This Week in Startups - Breaking down Ryan Breslow's YC critique + Spotify's solution & Joe Rogan's response | E1374

Episode Date: February 1, 2022

Over the weekend Bolt CEO Ryan Breslow wrote a big thread on why he thinks Y Combinator isn't worth it. We break it down point by point and assess the validity of the claims (7:07). Right before we started recording, news broke that Breslow was leaving the CEO role to assume the executive chairman position, so we cover that too (2:11). Then, we cover Joe Rogan’s expla-nology (explanation/apology) video regarding his COVID-related interviews that have upset many. We react to his response, Spotify's new COVID policy and reflect on the risks to Spotify’s business overall (44:32). (0:00) Jason and Molly tee up today’s topics: Bolt CEO steps down after another spicy thread, Rogan “apologizes” for COVID misinformation (2:11) Bolt CEO Ryan Breslow stepped down as CEO to executive chair: was it really his decision? (7:07) Jason and Molly break down Breslow’s thread on YC not being worth it for founders (15:43) Lemon.io - Get 15% off your first 4 weeks of developer time at https://Lemon.io/twist (17:00) Breslow’s YC thread cont.: breaking down Breslow’s five beliefs about YC (27:53) Ourcrowd - Check out the deal of the week at https://ourcrowd.com/twist (29:11) YC scaling fundraising and opening access to venture capital to more groups of founders; Breslow’s advice on building a network and fundraising (36:03) Marlow - Get 15% off your individual or team memberships at https://getmarlow.com/twist. (37:18) YC alumni have started a blockchain-based DAO called Orange DAO to invest in crypto startups (44:32) Joe Rogan’s “apology” video and Spotify’s new COVID disclaimer: Molly nails the prediction, has Spotify done a bad job of content moderation so far? (53:42) Breaking down Joe Rogan’s explanology (explanation/apology) piece by piece (1:13:17) Jason breaks down the math of Spotify acquiring Joe Rogan for ~$100M and Howard Stern’s similar deal with Sirius XM Ryan's Thread: https://twitter.com/theryanking/status/1487500943511932941 Joe Rogan's Video: https://www.instagram.com/p/CZYQ_nDJi6G/ FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood

Okay, we have major breaking news. Bolt CEO Ryan Breslau has stepped down as CEO, and he is moving to an executive chairman role. This is after, yes, he did this crazy YC thread that YC was not worth it. This after the thread that YC and Venture is a mob, the kid threw bombs, and now he's out of a job. Was this his decision? Or was he pushed out?

We're going to talk about it today. And we're going to talk about the fundamentals of his argument about Y Combinator, which actually turns into a little bit of an extra, a bonus VC Sunday school, if you will, VC Monday school. We also, God help us, wade into the Joe Rogan conversation. We talk about the explanology is what we're calling in an explanation and an apology Instagram video. We also break it down a piece of good one, by the way, good producers, good coinage. Explanology. We break it down in pieces, but we also reflect on the wrist to Spotify's business overall and just what this means in terms of the landscape of content, publishing, platforms. It's a messy business. And we, I think, agree that Spotify at least kind of whiffed it here. Hopefully they're going to pull it back together. It's a great episode. Stick with us. This week in startups is brought to you by lemon.io. Need to speed up your product development, without draining your budget?

Hire vetted engineers from Europe at lemon.io. Go to lemon.com slash twist to get 15% off for the first four weeks. Our crowd helps you invest early in pre-IPO companies alongside professional VCs. If you're interested in investing, you can join Our Crowd for free at OUR, CROWD.com slash twist, and Marlowe. Every founder should have a coach to help them become more effective at managing and leading their teams. Get 15% off your coaching membership at getmarlo.com slash twist. All right. Welcome, everybody. We're going to get right to the news. And there's the news we thought

was the big news today until the new news came along and is the new big news of the day. So much news is breaking. I mean, I know. Like right now you're sitting there like, which story is it going to be because it could be one of five things. Much news. So much. We are actually going to start, though, with our own wheelhouse, which is this ongoing conversation about Y Combinator and Stripe and Ryan Breslow, the CEO of Bolt, just throwing bombs, throwing lightning bolts, if you will, nonstop. And as we were about to start the show, this is how you know this is happening in real time. We found out that Ryan Breslo, Bolt CEO, is actually stepping down.

as CEO and moving into a role as executive chair, Jason. Go. I'm assuming he needs to spend more time with his family. No, I mean, I like Ryan. He says his choice. No. He was unhinged this past week. There are two Tweetstorms.

There was the Mob TweetStorm. And then there was the YC tweet storm. And let's face it, this kid. went rogue. He flew very close to the sun and I think maybe the wax on the on the wings might have just melted a little bit and Icarus

is coming back down to Earth. What, you know, was this really his decision? This seems to me like maybe some board members came to him and said, listen, great to fight up, great marketing. Are you okay? Like, you might be under a lot of stress maybe.

And it's, I got the sense. when I see this announcement that maybe he's feeling a tremendous amount of stress from all of this and maybe just needs a break. And maybe the lashing out on social media, if you consider it lashing out, I would say picking fights on social media. I didn't mind it. I thought it was kind of brilliant in terms of increasing the profile of Bolt. I don't mind people mixing it up.

I thought it was brilliant. But I think somebody probably on the board came to him and said, listen, you might need a break and, uh, you know, let's have you become executive chairman and I don't know. This is very strange because what do you think? Yeah. Well, I have a lot of questions about that because that has not been common, let's say, right? Like we've seen over the past few years.

I mean, founders have wide latitude, especially when their companies are worth $14 billion. So I feel like it would be pretty surprising. for any public company board. I mean, there are so many CEOs right now out there where I'm just like, how do you still have your job up to and including, for example, the Activision Blizzard guy, like, I don't know, the CEO of United, right? Like, you look around and you're like, what are boards even doing, Mark Zuckerberg? Correct.

So that would be, I think, an unusual move. You are 100% correct. For a company making this much money. Yeah, let me refine my take on it then. I think this was a joint decision because you're right. I don't think he could be forced out. He probably had either some combination of super voting shares or a lot of shares. And generally the founders, VCs and board members are reticent to remove a founder over the last 10, 15 years.

It takes a lot. I mean, so much so that they're making a Showtime show or something about Uber and Travis being ousted, right? Exactly. And that was so notable. That proxy fight, that, you know, lawsuits and removing him was such a dramatic, what, two-year process, one year? of really intensity. And obviously I was on the losing team on that one. You know, I was, I had literally pledged my shares to him so he could vote my shares to

increase his voting percentage to try to keep him in. Oh, wow. I didn't know that. That's a little inside information. I just disclosed here for the first time, I think. Are you in trouble? Is this cool? No, I just, you know, for me, it was like, hey, listen, he brought me in.

I'm here to support him. Mistakes were made. I'm trying to help him get where he needs to go. and I was in favor of him staying on board. But anyway, let's put that aside. Were the tweet threads he did, you know, like a fireable offense? No. I mean, I don't think they were particularly damaging, right?

They were not damaging. Everybody knows what Bolt is now. Right. So the question is like, are people not going to go work at Bolt? Is the stock not going to go up? Are they not going to have customers? No. I don't, I think in all these cases, people are like, what does Bolt do again?

Or should I, what's their Twitter handle? I follow them or maybe I'll buy shares in secondary. This guy seems like a baller. Yeah. I actually think that we have to consider the possibility that Ryan Breslow meant the things that he said, wanted to say them. Yes. That it wasn't like, and he responded very emotionally to the idea that it was a PR stunt, right? Or that it was in some way meant to be marketing. Let's get it to the tweet from Saturday, because we had this on the docket for today.

Yeah. And I really wanted to talk to about it because it is about accelerators and are they worth it or not and is YC worth it. And I've actually been outspoken about this. So maybe we could walk through what he said about YC and I can give some reactions and context to it. I think it's important. That was the second tweet storm. We know the first one. We talked about that in last week's episodes.

Right. And regardless of the stepping down, he clearly has something to say. And so let's get into the thing he has to say, which he started quite clearly with Y Combinator is not worth it a thread. I mean, what a title. I mean, say what you will. The kid knows how to start a thread. I mean, this derailed my whole, was this Saturday? This was Saturday.

Yeah, this was like, all of a sudden, we were on grip chat. Molly puts down the laundry, like, gets the popcorn. Here we go. Yeah. Then he stated that this is definitely not content marketing for Bolt. He said, before we dig in a note on my motivation, some think my recent tweets are marketing stunts. The truth, there's nothing that pisses me off more than the mob shit that goes.

on in Silicon Valley. My mission of empowering the next generation of entrepreneurs drives all my work. Sounds familiar and he's doubling down. I like it. Doubling down. He's doubling down and he heard us talking about this being marketing last week and other people had that same hot take. And so he addresses it. So he's listening to the industry's reaction to his first bomb throwing and this one. And then, so he goes on, okay, now to YC, he says, this thread is long, but here's the main takeaway. also the kid knows how to construct a lead. He's like, maybe you're not going to read the whole thing. So TLDR is YC might have started off pure, but money, power, and greed have corrupted it.

Today, YC is a lottery factory capturing 10% from founders with little concern about the individuals going through the program. Okay. Now, this is where you have to pause for a second and look at each of the claims. YC might have started off pure. We all agree. So this is incredibly persuasive. His constructing of arguments, whether you're not going to be. whether you agree with him or not, Ryan either was in debate club or he's paying attention

to how to tweet and how to construct an argument. So Y.C might have started off pure. He's saying something that we can all agree with. And he's putting a might in there. But money, power, and greed have corrupted it. We all agree that money, power, and greed corrupt. So if you just think about this as a construct, he's getting you to say yes twice, which is a great way to sell your ideas. Now he's saying YC is a lottery factory. Again, you're saying yes and you're nodding. But all ventures the lottery, isn't it? Yes. Like we say that all the time.

And they're capturing 10% for founders. Well, that's factually true. So now you got a fourth yes in the construction of the argument. Now here's where the fifth one, we can debate. With little concern about the individuals going through the program. So we get you to say yes, four times. Just so you understand how to be persuasive. The fourth one is false. They obviously care about the companies in the program. I know the partners there. These are people who have a lot of choices of where to work. They care deeply about

the individuals going through the program. So I don't think that that's actually accurate. And it's kind of unfair. People at YC are dedicated to those companies. Are there too many of them is 10% too much, given the economics of today's market? Should that have changed over time? Those are, you know, nuanced conversations. But the fifth thing here, I think is not true. Well, what's interesting about the fifth thing, though, is that it is in some way, it's unfalsifiable. Like, it's fundamentally subjective. Unless you actually know those people, you can't prove it either way, which is so it's so it creates, I mean, this is so interesting because we're deconstructing also how information spreads. Yes. But here are what he considers

to be his proof for the statements as he's laid them out. First, he says they've become predatory. First and foremost, he says the cost is beyond predatory for $500,000. YC has two separate safes, one for 7% and one of the earliest possible evaluation in your company. The result is that they own 10 to 14% of your company out of the gate. Now, this model is also somewhat familiar. Well, we do it at launch, right? And here's how to look at this. They're talking about YC's new model.

Their new model, paradoxically, was something that I kind of pioneered with the launch model, which was we would put in 100K for 6%. pretty similar to the YCDL, which I think is $125 for 7. And that's the standard accelerator deal. We can debate if that's a good deal or not. I think it's a great deal for the top accelerators, for people who are first-time founders. If you're a third or fourth-time founder, do you need to do that? Because it kind of insinuates a $2 million valuation for that 7%.

Maybe you don't need that. The second amount, you know, which is what we were doing, we would match whatever you got in the open market at whatever valuation you got. They're doing something similar with this extra. 375, I think they're putting in. So if they put that 375 in at 20 million, which a lot of YC companies might go for, they're only getting, what is that, like 1.5%. So they're actually more like 9% and 9%. If it's at 10 million, sure, they're getting another 3.75%.

So they're just over 10. But the truth is, you're going to give that to other investors. So would you care if YC had 9 to 14% or YC had 7% and some other Angel had it or some other seed fund. The founder doesn't actually care. Because someone is going to own 10 to 15% either way, is what you're saying. Somebody's going to own seven, the accelerator, and somebody's going to own the difference between 7 and 14, a seed fund typically.

So in truth, if you're a founder, if you could get all that money upfront guaranteed and not have to waste your time finding investors and it was at the same terms, it's actually a better deal. You understand that, right? Did I explain it properly? Oh, yeah, absolutely. I mean, someone's going to own 10 to 15% either way. This way, the first.

Funding is guaranteed. You know exactly who owns your 10 to 15%. Correct. You're off to the races. The only question I guess I have, and maybe Ryan has too, is could you have gotten more money for the 10 to 15% if you went to the open market? Is this like the easy choice that's a bit of a discount? And that is what anybody going to an accelerator has to answer the question, because it really is that $2 million early evaluation. If you go to the launch accelerate tech stars or Ycombinare, I can tell you as a first time founder, you're going to have a much easier time raising money and your company will become worth more than 7% more valuable. So that's a pretty easy calculation to make. Now, that makes a lot of other investors jealous. But the truth is, if I were to put my name on and launch his name on it,

or YC or TechStars, does the sorting process for the investment community and you're learning about this now as a venture capitalist, you see how much work you're putting into sorting? Yep. If somebody were to sort 100 companies and say, these are the seven best, which is what we do at the accelerator and what Y Combinator does, you'd be like, okay, that's worth something. going to pay attention to those seven companies. Thank you. If you respect that person, I have a track record. Right. So if your company would have been worth six million, if it's but worth seven million, which would be like 15% more, it's actually worth it. So that's all the founder has to decide. Right. Is do you make the company more than seven percent or whatever the difference is

in that 125K? So if it's 5%, 6%, 7% better, you should do it. Nobody's making you do this, right? Is that the fun? Well, like if you're the fact to that, except that when you sign the deal, yeah, go ahead. No, you're right. That's another incredibly basic and important point that's missed in his argument, which is, there's no gun to anybody's head here. You're making that choice as a founder.

And it's pretty great for the founder. Now, every, if the company becomes a unicorn, every investor looks like they got a deal. What that very simplistic, immature version of looking at, at the world does not account for is all the losses, which is in the previous tweet, which is it's a lottery. And only, you know, you basically have a lottery of if it's going to work or not. So when you look at that crazy valuation and, you know, when you do become a unicorn and it's Airbnb, and you're like, that makes no sense.

Why did they get that deal? You have to then say, okay, well, a thousand other startups failed and they got zero dollars back. Right. And they did all the work of running the accelerator, which I think they have 100 people running their accelerator, maybe 150 people work at YC. I'm not sure what the number is now. So I make a fact check, I guess.

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Disagree. He then names five beliefs about Y Combinator and breaks him down one by one, that the name will raise valuation by more than that 10 to 14% that YC will coach it. Okay, so hold on. Let's stop with that first point. Should we do them one at a time? I think we should because that point, see, what he's doing here is he's blending those two rounds. The 7% you could say, you know, they're actually saying the core belief there,

if we go back one to the number one on that list. Yeah. You only have to say, does a company become worth 7% more valuable? Right? Not 10 to 14. Because the 10 to 14, that last eight through 14 points is at market rate. It's at the market rate. Right. So the market determines that guy. But that's not all you're necessarily raising. Correct. So he's just kind of, in order to make his argument stronger, he's being intellectually dishonest on that one. So in that first one, he's saying YC's name will raise valuation by more than 7% is the most accurate, not the 10 to 14. It's a subtle point. But that's a subtle point. But that's That last 375K is that market rate, not at the 7% rate. But it's kind of like a pro rata though, right? Like no matter what, that 375 ends up buying YC 10 to 14%. We're straying a little bit into BC Sunday school here, but what you would do is you would take

the 7% out for the original note, which they bought for 125. So what he's saying in the math here is there's three to seven percent that that 375 buys. If it was at a $10 million valuation, it would be $3 million, you know, the $3.25. 3.75, we buy 3.75 points. And if it was at 6.7, 8, it would buy a little more. But that is that market rate. So YC promises you that 375 at the next notes conversion. So whatever the price is, they're paying market price, just like anybody else would. All they're doing is taking the time out and letting you, if you were going to raise a million, start with 37% already accounted for. That's incredibly helpful. Once you get to 37, 40, 50% of your round close, the other half closes

99% easier. Right? It's all about. momentum. The first 30, 40% is the hardest. The last 20, 30% is like, it closes immediately. It'd be like you saying, like, there's two tickets left for tonight's Warriors game. It's like, I'll take them. Right. You know, when there's like, the whole arena is empty. It's like, okay, I'll wait and see how this goes. Yeah. So it's just not intellectually correct, the first point. Okay. Point two, Y Combinator will coach and mentor you. Sure. Okay. Ryan goes on to say, my YC founder friends say the advice is minimal. There are rushed office hours, generic advice,

Y Combinator is a machine, and going deep with the founder is basically impossible by design. This is, I've heard this for many founders who say the program is cookie cutter, the knowledge is now available, you know,

on this being in startups, on every other podcast, on Quora. This is directionally correct and it's a function of, so this is his strongest part of his argument. You don't go to YC for their advice. The advice is minimal.

Because unlike when YC. started. The advice is all available on the internet. Everybody's written so many startup books. Everybody's done so many Quora questions. It's like the information's out there and the office hours, I do hear that they're rushed because they have so many partners. I'm sorry, they have so many companies that it's just very diluted. So this is probably true. And he also talks about in relation to YC's name raising valuation by more than 10 to 14 percent, that part of the problem is the batch size is 400, which seems to get to both of those issues, right?

Potentially the valuation thing, because they're just pumping them out by the hundreds, literally. And how could you possibly give personalized advice? They have their class size is too big to use education. This is why I only did seven in the launch accelerator classes. I think we've done 24 now or 24 classes of seven because I was like, I just don't want to, I don't want to have,

what is like a giant restaurant? I don't want to run like the cheesecake factory or olive garden. You know, like if I'm going to do a restaurant, I want it to be a seven, eight seat sushi bar, and I want it to be high end. So that's why I did seven. I also don't want to put my name on 400 things. But YC is a machine and it is trying to use its brand to scale and to try to very quickly find as many unicorns as possible.

And they have taken a portfolio approach. This is Ryan's strongest argument. It is correct. And as you would say, Molly, and what do you want to say? And? And. And still probably worth the 7%. Right.

Because they do in fact make you more than 7% more valuable. So even though it's less intimate, even though it's a machine, even though they accept too many companies, still worth it. So this is interesting too because then his third belief number three, right? So if we want to go back to the five points. Yes. Belief number three, why Combinator will put you in front of hundreds of investors at Demo Day. That's true. He's like, yeah, sure, that happens.

But no, it's not unique. nearly every accelerator does this, including, for example, ours, and there's only seven of you. So he says, sure, YC maybe has more investors, but it is simultaneously the hardest accelerator to stand out in giving the outlandish backlash. The demo day is kind of a joke. But what I will say is they, because of their reputation, a lot of the new investors, not the old investors, get kind of sweeped up in it. So if you're a dentist or a lawyer, somebody from outside the industry, you kind of have felt

like over the last years, it's a safe bet to bet on a YC company. And so you'll pay a higher price. You won't review the documents and you make a quick decision. So he's absolutely correct. We introduce people to 1,000, well, we introduce people to 9,500 angels who are members of the syndicate. And we have them on this podcast and they reach 100,000 people and probably 10% of those, another 10,000, are investors. So it is no longer unique their demo day. So this is a directionally correct, if not correct, criticism. Yep. And what's interesting here is everything has been, I would say, other than maybe what you're,

like you're saying, you know, look, the valuation argument is just, that's flawed. You may have an argument as a CEO that 10 to 15% ownership by a single entity is just too much. That seems separate from this. But so far, yeah, he's basically saying, I think, why Combinator is the Olive Garden and is not as good as you think it is. But it's calories. But it's calories. So then we have our belief number four.

Okay. Which is where we start to get into more mob stuff. YC will help you sell into YC. This part says Ryan is actually true. Hashtag the mob. If your startup sells to other startups, they have a monopoly on this. So this is. Yeah.

So is this true? This is half true, not true. I've heard from founders, it's annoying that people believe this because somebody comes up with an enterprise. product and then they start hitting every YC company up. Well, you use our product, use a product. And then one of the nefarious things, and I'll just say, I've heard this. And, you know, I'm not making any accusations here.

But when people do diligence on a YC company, it might be wise. And people have told me to discount their sales numbers or to drill into them and find out if there's a little favor bank going on here, where let's say 10 YC companies pay for your product, you pay for their product. This is called round tripping in the industry. It's a little known, but this is why in diligence, you and I have been through this in your first month here, I've said, or you actually witnessed me having a conversation with Kelly, which was, did you talk to three customers?

And it was that SaaS product. I won't say which one. That was a little hard to understand. And it would have been easier if we had talked to the customers, but it's a back end software product. So therefore, it's not like you go on the web and see how people are using it. And if you do drill in on a YC company and they have 10 customers, and you find out seven of them are from YC,

I would discount all seven. Yeah, okay. And I would say those seven don't count. Baby mob. It'd be like... It's not even a club. Look, it's a club. Let's call it what it is, right?

Mops are not necessarily clubs. Not every club is the mob. The mob is a club, but not every club is the mob. You know, when I grew up in Brooklyn, every club is a mob. A lot of the mobs that were in clubs. they would have like Italian American Heritage Club

that would be the St. This person club, the Columbus Club you know, there were clubs so it was a car club Yeah, is the one you say. It's a Columbus. I'm not throwing any aspersions on the Italian American community. They'd take care of each other.

After I did my yaya impersonation on all in last week and people were you going to cancel me after that. Not even going to lie, had a lot of cringe on the dog walk over that one. I was like, oh no, no, no, no. Am I not allowed to do my Italian Don't bring that here.

Don't bring that here. See also the pre-show conversation regarding the 80s. I think I can't do an Italian grandmother conversation. Okay. I mean. I thought I could. I know a lot of Italian grandmas. Save it for the other show.

Save it for the other show. So anyway, but this is something that other startups do. So I've trained all my people always ask the source of the first 10 customers. And you would be, I would never be surprised if the first. first three customers were your sorority sister, fraternity brothers who are working at J.P. Morgan or Goldman Sachs and they did you favor by putting it on their corporate card or trying it. Not illegal, maybe not even unethical. If your fraternity brother was at Goldman and you might be able to get your SaaS product

into Goldman through them, that's just the contact. That's just hustle and networking. But if you don't use the product and then you're using that data to go, sell an investor. Is it a honest representation of reality? Probably not if they're not using the product. Now, if they use the product and it's landed and expanded, yes. So this is where it's a very nuanced conversation. And yeah. I mean, this is what I think is so brilliant about this thread overall is that it's all kind of, it's just like how you squint, right? It's true depending on how you look at it. Like some versions of it are true. And what he's essentially pointing out here is

Y Combinator has a lot of power. And I have had people come to me, like I think I was telling you guys, I had a venture capitalist years ago be like, I think you should take a look at Y Combinator and whether it's a net negative for the Valley in general. Because once something has enough influence and power, then of course they can seem like the bully in the room. And it doesn't mean they didn't build that influence legitimately. I mean, we could say the same about Harvard and Stanford, right?

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Y Combinator is, unlike Harvard, which has the same number of students graduating, I think, what Y Combinator decided was, hey, listen, if we could have six people go through this program and it's such a good program and it helps founders so much, why don't we try for 60? Why don't we try for 100? So that's kind of cool that they did try to scale it and let more people have access to it. If they only accept it seven forever and those people all raise 10 million coming out of the program, you'd be like, well, why don't they let more people in? Why don't they let more people of color in? Why don't they let more women in? They actually have funded, and this is where you have to give them a lot of credit. Because they've scaled, they funded more international, more women,

more people of color, more underrepresented founders than anybody. Now you could take a negative view of that and say on a percentage basis, yada yada, but net numbers. It means it's too crowded and blah, blah, blah. Well, there's always given Take. There's always given take. But the numbers are tremendous. And this is if I was running my comment, I'd say, okay, here's the number of female founders we've invested in. Would anybody like to put their numbers against ours? Because it would be embarrassing. Because if they've had two, I think they've had maybe 2,000 people go through the program to date. They're doing 400 a year now and they were doing 100 before. Somebody can fact check me, but it's got to be in the thousands now.

So let's say it's 3,000. If 10% of 3,000 were female founders, that's 300 female founders funded. You could take the top 10 venture firms, combine their female founders to it would be 100. You're not getting those numbers. Totally. You're not getting those numbers. And they're investing early, which is the hardest deal to make. So you've got to give Y Combinator a lot of credit for being inclusive, even though people

would like to say they're not inclusive. Yeah. Because you're looking at percentage, not real numbers. And then finally, Ryan says, point number five is that he says, YC will connect you with peers at the same stage. His response to that is tech is a very welcoming community. Not for everyone. But sure. Tech is a very welcoming community. He says, with a little work, this is easy, but it's

certainly not worth any equity in your company. What do you think about that? I mean, sure, right? Making friends isn't necessarily, but it's icing on the cake. It's not the cake. But again, going back to Harvard and Yale, aren't the networks? Don't you join a fraternity? A hundred percent is why you do that. When YC was in public, the network was extremely valuable. Yeah. Now, tech is a very welcoming community. of Ryan's accurate in 2022. He would be inaccurate 15 years ago. Because when I came, or even like 20, 30 years, when I came into the industry, even as a white guy, the fact that I was from Brooklyn and didn't have a, you know, degree from Harvard or, you know, or Stanford or something like that, it was kind of like, you really belong here or not, you know?

And I would say tech is more welcoming. Much more welcome. I don't think that necessarily always means it's very. I would compare it to other industries as a fair one. So would you say it's easier to make it. tech or Hollywood? Tech. Okay.

Would you say tech or finance? Is there a difference these days? Well, like Wall Street. We're working at Goldman as an investment banker versus, you know, tech. Okay. Tech versus, I don't know, the media, becoming a journalist. Could be equal? That's a, you know what?

Because tech has made media and becoming a journalist more accessible, I would say they are almost even and it is the result of tech, right? Like there's a substack, YouTube channels podcasting. But look, getting hired by the New York Times and or even if you get hired there being respected by the New York Times. You know, like it being, for example, from the middle of the country and working on the West Coast and then getting accepted by the New York Media Mafia. Yeah.

Tech is still easier. Okay. So we just took three, politics or tech? Easier to break into. Tech. So I would argue tech. So I just pick three top industries, media, finance. And I would say tech is more.

welcoming, mainly because of technology, like chat rooms, podcasts, and whatever. So it's the tools that make it that way. And frankly, that I think is what Ryan is saying too, is like, with a little work, you can join the like this weekend startup Slack channel for founders and, you know, get to know everybody. Be part of the notie gang. Like you're in a world. I'm trading more emails with Walton Dormish than half my staff.

I mean, he emails me more than. Yeah. The most optimistic hustler on the internet is Walton Dornish. It is like nothing I've ever seen. He's just like a, he's like a support machine. Yes. Incredible. Tech is about what you, what is your skill?

What can you get done? What have you done? A lot of the other industries are about who you know. Let's be honest. Hollywood, you know, who you know. And credentials. Yeah. And fundamentally about credentials.

And I think tech was built in theory to be less about credit. Well, and then also it was co-opted by a bunch of like Stanford guys. So it's, you know, everything is a give and take. But yes, 100% to that point where he's basically. saying tech is democratic enough that you don't need to give away 15% of your company for a community, I'll give him that one. That's a, that's a give me. So net net in all of this, is there any else thing to the argument we need to even go through here? So then he ends, no, but here's his four key pieces of advice to new founders on how to build a network and raise money. It's like

Ryan's accelerator in one tweet. One, hustle to make friends with other founders. Two, host social meetups to turn friends into more friends. Three, start building something differentiated and four, leverage your network when it's time to race. Great advice. I talk about it in my book about how to build a network. Not everybody's an extrovert. Not everybody's designed for this. Not everybody enjoys it.

Yep. So great. He is obviously an extrovert communicator. So for him, he has a bias towards this. I have a bias towards this. I've met many founders who are very successful who are the idea of hustling to make friends. like they don't want to invite people to dinner and, you know, host the dinner and then talk to people and try to hustle. Like the idea of hustling to make friends, I would say for the majority

of people is not something they're designed to do. So I think his advice is for like a third of people. Exactly. I totally agree. It's so interesting because, you know, as we get into the Rogan conversation and simultaneously there's a conversation happening in our chat right now that is basically about empathy, right? Please try to understand my point of view so that I can, I'll try to understand your point of view. And like, Ryan Breslo is giving advice that works for some people, but not for everybody. And YC is an accelerator that works for some companies and not for all of them. And it's, I mean, it literally is just like, can't we all just get on? Obviously, there was a response from Y Combinator at long last. No surprise, Paul Graham finally responded to

Paul Graham's retired, I think, but he does show up for, he was, Paul Graham's kind of retired. I respect Paul Graham for this as well. Kind of went to Europe, retired, and still gives it advice. And I see him when I used to go a couple years ago to why Commodore Demodice. He would actually show up for it. So I have a lot of respect for Paul Graham as well. I think he's like actually in it for the right reasons. And I respect him for handing it off to folks and then going and raising his family and yeah, cashing in his chips. Listen, as a founder, it's really hard to find the time to become a great manager on your own. And that's where Marlowe comes in. Marlowe is one to one management training and coaching that helps managers level up quickly. They take

the best parts of executive coaching and they combine it with their proprietary management training program. So you can become more effective and efficient at managing your team. This is super important. I see so many startups that fell from bad management. People don't quit a startup. They quit a bad manager. We all know that. So you need to have great managers who listen and have empathy, but also demand results from your people. So you'll work with a dedicated coach at Marlowe to help you identify which areas need improvement. Then you're going to focus on development. the most important habits and skills, and members rate their coaching experience 9.9 out of 10. So that's room for improvement. That's a pretty great score, though. Let's be honest.

And Marlowe works with managers and emerging leaders in startups like Scrib, Hems and Hers, status fear, and more. So what about the rest of your team? Marlowe has them covered as well. They can provide your entire team with the support they need to be successful. So here's what I want you to do, the call to action. Get marlowe.com slash twist to get 15% off your individual or team memberships. Once again, get marlowe.com slash twist to get 15% off. I mean, I guess what I think is interesting is that we are also at a point where as you examine all these questions about accelerators and heaven help us, that includes ours, you can ask yourself to some extent, right? Because let me make the point first that YC alumni have now

started a blockchain-based Dow called Orange Dow to invest in crypto startups. There was a seminar over the weekend about whether investment DOWs are in fact themselves the future of VC. So we're starting to see almost, you know, and this is a conversation that's come and gone over the years, like is crowdfunding and now crowdfunding through DOWs, which YC itself is even dabbling with the future of VC and or the competition to an accelerator or early stage VC if you don't care about all of these other sort of slightly less obvious benefits. You're just trading one selection process for another. And so with crowdfunding, you're saying a bunch of people writing $100 to $1,000 checks make a better decision than people who do it full time for a living and who see the top companies and who have great deal flow.

The answer to that is obviously no. And then here you're saying, okay, a bunch of people who join this Dow who put in 3Eath or, you know, one Bitcoin are going to make better decisions collectively. Possibly, I think what the best function of these groups, and listen, we run a Dow called the Syndicate.com. It's just not crypto-based and there's no voting on what companies go to it. People vote with their dollars if they want to fund it. So I think it's kind of similar, most similar analogous to syndicates, but DAWs are illegal in the United States. You cannot just take random people's money and invest in companies.

It is illegal to do. This seems like a really salient point. That's really salient. If this was legal, I'd be doing it. You don't think I want to get my hands on that crypto money. But how is it then that? I see can start this blockchain-based Dow to a business and crypto experimenting.

I jumped into the latest Dowling last night that they had a conversation on Twitter spaces and they're like, if you want to show interest and if you want to vote for people who are pro-Dows and everybody thinks Dow's are legal because somewhere in Montana, they have a framework for Dow's. They're all what's called Laos, LLC-based Tao's, which means they're doing the exact same SPV structure, that angelist, the syndicate, my syndicate, everybody else's syndicate uses Assure.com, assure.co provides. They're all doing an LLC, SPV, which has limitations. 250 members, $10 million invested. It has to be accredited investors. You have to know who they are. You have to have

have to have a relationship with them. You have to, if it's 506C, which all these DAOs are, 506C means it's publicly raising. You have to know who that you have to then certify if it's public that they're actually accredited. The reason why other DAWs did not get censored or had legal action is because when they went to buy the Constitution, they said, we are going to, we are going to buy the Constitution, they didn't say you are going to own the Constitution. And they kind of actually probably broke the law a little bit in that one because they were tweeting like, hey, let's buy the constitution. The fact is what you were doing was you were donating for them to buy the Constitution and then they were promising to do something like put it in a museum or something. Gotcha.

So if you actually want to take investors money and then return more and give them shares and ownership and something, you've got to play by the SEC's rules. And the SEC rules are you got to be accredited 250 people per SPV and you got to be registered and you can't break 10 million. YC alumni. I may have misspoken there and said that YC was starting it. We should try to get, um, it's, it's co-led by Ben Hugh, of course, of. Okay. So this is another rub.

Meme invention fame. People who went to what is another rub to all of this. The alumni of the alumni, like Harvard alumni, will say Harvard alumni investment club. That's not Harvard. And this is another thing. YC has had a little bit of a challenge with is alumni will leave and say, we have special access to YC companies and we'll get you into them early. And there was somebody who had a YC, I think Angelist had a mob, kind of mobby, right? So, you know, if you really want to go after

the mob behavior in Y company or the place to look would be, why do 20 companies suddenly raise their money before demo day, even though YC tells you not to raise money before. for demo day, and they wind up not presenting on demo day. And that's because YC has always given the inside track, all the Aces and Kings in the deck, go to YC partners and other venture firms. I know this because people have told me that they get tipped off by other YC partners. And of course they do. If you're a bunch, if you're a YC partner and you see some great company, you're like,

this is the next Airbnb. Of course you're going to invest in it. Of course you're going to get reserve your ticket. Of course you're going to develop a relationship with it. And if you have a relationship with some other venture firm, of course you're going to tip them off. Yeah. And of course, you're going to get some company to come along and buy your company that's not doing that well so you can get your returns. And I mean, look, it's a whole, it is a club. No conflict, no interest. No conflict, no interest. Is it is the opposite of everything you learned

in journalism. I mean, it's fun as hell for me. Like, just shedding the layers one by one. Just like, okay, I guess we just, yeah. What edge do you have? Press your edge. It's bad. I mean, you watch the TV show billions. Totally. Have you watched the TV show billions where they're always trying to get an edge and they're like, okay, how can we make this trade? It's like, okay, yeah, let's poison. Let's put bacteria in this juice company so we tank their stock so people get a coli. And we'll like, that was like the theme of the first season, I think, is like some juice

companies going public and they basically do any cola breakout to tank the stock because they shorted it and whatever. And it's like, that's illegal. Yeah. Business is ugly. Is it illegal for you to have a friend who's at YC who tells you you should invest in this company? Of course not.

I mean, if it's illegal, the entire American sphere of influence-based economy is going to go away overnight, and that's not going to happen. So here's what I say. If you're a founder, first-time founder, and you get into YC, go. Take the money and go. Your company will become worth more than 7%. And if they put the extra 300 in, you were going to take that from somebody else. It's a no brander to go. If you're a serial founder and you've got your own million dollars that you can back your company with or the first 250K, we'll do that, of course. and then push out your first financing. But if it's your first company and you got a co-founder, you'll wind up owning 20%, 15% when you go public,

like Larry Page did and Sergey Brennan will be okay, or Airbnb did. You'll be just fine if you own 7 to 15% of a Google Airbnb. Yeah, kind of how it works. Same goes for lunch, by the way. Same goes for our accelerator. Or tech stars, you know, like we really don't have to sell ours too hard because we only accept seven and we're always oversubscribed.

So it's not a big deal. Yeah, very true. But I have a new strategy I'm working on to, because we had bested YC's deal and I have a new strategy I'm working on that you know about, which we'll announce it maybe in 30 days of how we're going to best their better deal. So just put a pin in that. Because always find your edge and then press it. There you go.

We're putting some bacteria in YC's juice. Just kidding. No, we're not doing that. I am really proud of us, by the way, because we have gone fully 40 minutes into this podcast. Maybe it won't sound that way when you hear it edited. but it's taken us this long to actually get to the story that dominated most of the weekend, which was, of course, Joe Rogan and Spotify. All right, here we go.

Everybody wants to hear about this one. Molly, what did you say last week? I think we should start with your clip from last week. Can we start with that? Okay, producers. I just feel like that is the most salient thing we have to say here. That is very true. We had this conversation last week, and Jason, as he has won.

to do was like, what would you do, Molly? And I was like, ugh, but wait. Here's what I would do. Honestly, I guess what I would do is just put a label on it. Like this isn't, this is kind of like they do on editorials on TV or something. Like this or when call her daddy. So, or I wouldn't have a problem with that. If they said this, this show has disputed claims, here are.

Here are those disputed podcasts and link to them. Like that's kind of what Facebook is trying to do. Walk the line. I don't think Joe Rogan would have a. problem with that. I think he would want to actually hear where he's wrong. Yeah. I think actually he would. Nailed it. Nailed it. So the news broke this weekend that Spotify would link to their content terms, which I think they previously didn't have a policy. I mean, they did not. Like Spotify, we will get to in a minute, has done essentially everything wrong here. Okay. And one of the things

that they didn't do is have a published policy despite by their own admission having removed over 30,000 podcasts that weren't Joe Rogan related to COVID-19 misinformation specifically. Got it. So they had a policy, but wouldn't even tell like, you know, the media, of course, was calling them and wouldn't even say what their policy was. So step one is that they are actually going to publish it. Step two, they're going to put up this label, just like we suggested. Makes sense. any podcast episode that includes a discussion about COVID-19 will get a label and advisory that will direct listeners to Spotify's dedicated COVID-19 hub,

a resource that provides easy access to data-driven facts, up-to-date information as shared by scientists, physicians, academics, and public health authorities around the world, as well as links to trusted sources. Perfect. And then now people, if they want to have the debate of what, now the next debate is, what's a trusted source? So now you can go to that page and be like, I don't trust the world health organization or I don't trust voucher or whatever. But at least they're pointing you to trusted sources like scientists. I mean, that's a lot better than comedians or quack doctors or anything in between. Yeah, definitely.

Now, it still does not, Spotify still has not answered or I think probably dealt with to the satisfaction of its critics. Well, of Neil Young and Johnny Mitchell. And I mean, people keep glossing over this, but Brunay Brown stopped publishing her exclusive deal podcast indefinitely on Spotify. She's a big deal, right? She's a big deal. It's not my content, but she's like a personal help guru. Yeah. Like for people who aren't Joe Rogan fans, Brene Brown is the Joe Rogan, right? Like there's like, it's a very competing sort of self-help universe. Got it. Yeah. And Prince Harry and Megan have been putting pressure on Spotify because they signed an exclusive deal. They said publicly that they have questions. Behind the scenes, I would assume

those questions are how are you going to fix this? Yeah. And Spotify has not exactly dealt with, like, they put out a statement that was very Facebook-esque, right? We don't want to be in the position to censor content, this and that. But what they haven't acknowledged, I think, probably satisfactorily is that it's that they commissioned exclusive content. Like, they're the exclusive publisher here of this content. And so they do possibly, they're Joe Rogan's boss. Like, this is, as one friend put it to me this weekend, this is a talent management.

question because they buy the stuff. So it is and it isn't. There's something between producing the show and buying the rights to publish a pre-done show. So let me explain the sort of difference there. There are some people who choose to make the totality of their show and then say you can license it. Yeah. You can take it if you want, but you have no involvement of the production of. And that's the relationship they have with Joe Rogan. Then there's their in-house production team, which they just shut down. down, which the person who used to produce this podcast was actually running. I think it was called Studio 4 or something. And then they also have The Ringer. They bought the Ringer. The Ringer has

editors and producers. So in that way, they own the production company, which means they are, in fact, producing it. Is it Brne Brown? Am I pronouncing? Brne Brown. I believe, produces her own show with her people who she pays whatever she wants to, and then they get her episode. So they just publish the episode and they have exclusive rights to monetize it and sell ads on it. That's relationship with Joe Rogge. It's distinctly different. They're licensing IP.

That means they are not allowed to go into it and start editing and cutting it. Whereas if they were producing it in-house, they are explicitly doing that. They are constructing. So let's just, you'll understand there's two different relations there. Yes, I'm very familiar with production models.

I'm just not sure everybody. Okay, not me, right. Yeah, I know you know. And I think that is a super important thing to say, which is that Spotify is not producing or creating. They are not involved in the editorial creation of this product. However, unlike other podcast deals, right? Unlike Facebook, even, unlike YouTube,

Spotify is not the sort of like a neutral conduit for this content that could be found everywhere else. Right. So they have to the extent that- A different level of responsibility. Facebook and YouTube themselves had already blurred the line, and they were already trying to sort of claim that they were the platform. and not the publisher, and that was already a little bit messy because of algorithms and

YouTube has a studio where they encourage and pay creators. But in the case of Spotify, it's a much more one-to-one. And the thing that became like the sort of intellectual exercise I was having over the weekend is like, at what point, like could Spotify end up ruining everything for everyone by getting the FCC involved here? Because the FCC, for example, does content, has content regulation over broadcast. And so far, they have totally sidestepped questions of the internet, right? They're like, no, we are only responsible because we control the spectrums. Like, it's all about the specific type of communication, subscription services don't apply. But like, you wonder if this starts to become the thing where it's like, I have a lens for

that, actually. You're the publisher, yeah. By the way, stop your freaking tweets. I am not advocating this. Yeah, no. It is like an insight of where this could. Well, you just predicted essentially perfectly what Spotify would do. And you're kind of, I think, predicting directionally what a good.

government agency might do. And here's how you can determine if somebody's a publisher. And I talked about this, I think, we were having a discussion about like this just last week. A publisher publishes the content, right? They make it available. They promote it and they monetize it. And in some cases, they produce it. So here you have them doing everything but the production of the content. They are promoting it. They do ads for Joe Rogan. They promote it. They put it in the top of the app. They make the artwork. They're promoting it. They monetize it. They capture the money off of it. And they pay for it. Sorry, That was the piece I left out. So they pay for it.

If you are involved in that kind of revenue sharing relationship and you're involved in the promotion of it, you're the publisher. Even if you don't make it. Because they have the veto right. So whether the veto right comes after you get the episode or it comes during the production of the episode, you still got the veto right. So then I think they have a different level of responsibility than say they do for this week in startups, which they don't monetize the show.

They don't have the rights to it. They don't promote it. Fine. And to that point about. veto power, and this is where like things just get a little, continue to get a little messy for Spotify. Spotify vetoed when Rogan went to exclusive on Spotify, they immediately removed about 40 episodes from his 1,000 episode feed, which included people like interviews like Alex Jones, Miloinoppos, Chuck Johnson. They removed episodes including interviews with a convicted rapist, serving life in prison,

and a comedian who was accused of soliciting child porn from a teen girl. So what I am trying to say is Spotify has exercised veto power in the past. It has removed tens of thousands of podcasts from its own directory over COVID-19 misinformation. And it has carved a big old loophole for Joe Rogan. And I just doubt that from a, it's only a matter of time before like legislators come in here. Right. Like this is, I don't think this has solved their problem, the labels. I think, you know, and then in fairness to Joe Rogan, the people who were convicted of crimes and all that kind of stuff, like war machine and stuff like that, they were on before those convictions happened. So it was kind of like, do we want this archive episode? So it would be like, we're not going to include Bill Cosby shows or, you know.

But they made an editorial call. They made an editorial call to not take those. Yes. And so then I think we, the next piece of this puzzle is to go to Joe Rogan actually gave some feedback on his approach to the show. So, which I think kind of defended my position, which has always been, he's a comedian. He just has a rambling three-hour conversation and you should not really take any of this as anything more than a rambling conversation. That might be a starting point for you to do your own research. So let's hear some parts of his clip. I think, let's see, because he doesn't, he explains the situation and then I think a relevant clip is Rogan talks about his problems with the claims of misinformation. Let's listen to that here because nobody's talking about specific. what the misinformation is. I think his position on this is important.

The problem I have with the term misinformation, especially today, is that many of the things that we thought of as misinformation just a short while ago are now accepted as fact. Like, for instance, eight months ago, if you said, if you get vaccinated, you can still catch COVID and you can still spread COVID, you would be removed from social media. They would ban you from certain platforms. Now, that's accepted as fact. If you said, I don't think cloth masks work. You would be banned from social media. Now, that's openly and repeatedly stated on CNN. If you said, I think it's possible that COVID-19 came from a lab. You'd be banned from many social media platforms. Now, that's on the cover of Newsweek. What are you sure thought on,

you know, the moving target of a pandemic, which is a unique situation. Like, he is not wrong that the advice from a year ago would be radically different in the Amhermocron era or that the lab league theory went from being like you get banned from social media talking about it now most people believe that's kind of the likely scenario? I mean, I think four to five of those things are just actual lies. Which piece? Like at no point would you get banned? First of all, this question of banned from social media is a whole other, right?

What does that even mean? Like if you're losing your account, like people lost their accounts or had them turned off for 60 days. Nobody saying everyone knows that no vaccine, like, that like the flu vaccine, you could still get the flu. And he still potentially, right? Like doctors were saying, this is how vaccines work. That now were you saying the vaccine doesn't work? You're still going to get sick and spread it to everybody. So don't take it. I just think like that. There's a little playing, there's a little like defensive. This is such a terrible mistake. Like even getting into the Joe Rogan content from my side. But like, yeah. I think that.

But that's, it's an interesting attempt to have it both ways. I kind of feel like, I might be taking the other, this might be a situation where we have different opinions on this. Because I kind of feel like in a moving target like this, I would, I would air on the side of having more information. And I look at your- Every platform has. Platforms have not been out here just wholesale nuking people.

I think that fundamentally is what is the big lie. There haven't been, you are correct. A lot of people have not lost their accounts over this. It would be the most extreme people saying, don't get the vaccine, it's got microchips in it. Exactly. Like, look at who has actually been banned versus the claim, like, if you say this, you'll be banned.

No. Thousands of Q and non accounts went away. Sure. Yes. Those were the ones that the people talking about the microchip. Yeah, yeah. Interestingly, I said when we had our discussion, I think like Rogan wouldn't have a problem. I think he's, I kind of consider him in the Tim Ferriss vein, although he, I think Tim is a little

more considered and Joe takes like, if Tim Ferriss takes like this, I've got my hands like the size of a grapefruit, a big one, like if he takes this much risk in terms of booking guests, now like my hands are like a watermelon, like Joe will have almost anybody on who's interesting. Do audiences understand that? I thought they did, but maybe they don't. Here Rogan explains in this quick 40 second clip that he gets things wrongs and he has no problem correcting himself, which I would think we would already know. Let's play that one. all of those theories that at one point in time were banned were openly discussed by those two men that I had on my podcast that have been accused of dangerous misinformation I do not know if they're right I don't know because I'm not a doctor I'm not a scientist I'm just a person who sits down and talks to people and has conversations with them do I get things wrong absolutely I get things wrong but I try to correct them whenever I get something wrong I try to correct it because I'm interested in telling the truth I'm interested in finding out what the truth is and I'm interested in having interesting conversations with people that have differing opinions.

I'm not interested in only talking to people that have one perspective. Okay, I think we knew that already. I'm at a loss for people not putting Rogan show in perspective. Yeah, that's the part where I think like... Now I'm the Rogan people in your app mentions. I can see you're like, oh, boy, my app matches are going to have a lot of Rogan supporters. Disaster. Look, I mean, it is, it is really a luxury to, like, if influence didn't exist, one of America's biggest industries wouldn't be marketing and advertising. If industry, if influence

didn't exist, we wouldn't have, we'd be out of a job. Like, it's willfully and luxuriously naive, considering the volume of people who cite Joe Rogan as their hero, right? Like, this guy is in the status of Tesla, Apple, PlayStation, versus Microsoft. like he has a cultish fan base. So that gives hit. So the idea that it is credible that people are not taking Joe Rogan seriously, we are not a nation of Spock's out here, taking information in and being like, fascinating. That's not what's happening.

And we know it. And he knows it because he got paid whatever, how many hundreds, tens of millions, what, $100 million to go to Spotify. It would be lovely to believe that the way America. works is that people are out here taking information and then doing their own research and they're coming to reasonable conclusions. And if that were true, we wouldn't have 2,500 COVID deaths yesterday from among almost exclusively unvaccinated people. Right. And so this is where with great power comes great responsibility. And he's not taking it. I don't see him taking it.

Well, yeah. So I think he started today. Maybe that's what the point of this, I think that's what this moment is, is maybe Joe Rogan realizing, geez, I got a lot. of influence. And as you're correctly pointing out, getting $100 million is Spotify confirming he's got a lot of influence where they would not have given $100 million because that $100 billion they have to make back in 500,000 people paying for the service over the next two or three years. You don't get to be just some doofy idiot. We have all been put into a position where we take responsibility for the things that we say. So the fast and loose production style doesn't work anymore for him. No. He should be more considered and thoughtful is, I think, what everybody is saying. So let's play

this clip where the clip number four where he talks about what he can do better and the disclaimer that you correctly pointed out would be coming. One of the things that Spotify wants to do that I agree with is that at the beginning of these controversial podcasts, like specifically ones about COVID, is to put a disclaimer and say that you should speak with your physician and that these people and the Opinions that they express are contrary to the opinions of the consensus of experts, which I think is very important. Sure. Have that on there. I'm very happy with that.

I think if there's anything that I've done that I could do better is have more experts with differing opinions right after I have the controversial ones. I would most certainly be open to doing that. So that's a good thought. Here's another idea. In the original days of podcasting, you have a guest on, you talk, you publish. Maybe if you get that big of an audience and it's about science, you have a science editor, listen to the pod, and maybe you do a little preamble before the pod starts and say, in this podcast, at 40 minutes in, this person makes this claim.

I talked to three doctors after the pod went out, and here's what they said. Three out of three doctors disagree with him. And here's why they disagree with them. And I'm going to have one of those doctors on episode 1500. So in two weeks, you'll hear that. So you could actually do some work after the pod is taped to do a little fact checking on what people said. This actually, I, that's what I would do if I Spotify. It's funny because you had the idea for basically a roundtable, like a panel of fact checkers, almost like a, what's that walking

dead spin-off show that's sort of like- A Talking Dead. A Talking Dead. But for Joe Rogan. And he essentially just like proposed the same thing. Similar idea. Yeah. Which at some point, you know what? I mean, it's kind of funny because what you're watching here is Joe Rogan start to ask questions that, like journalism. Like, hmm. if I hear a thing, maybe I should, if I hear a thing from a single source, maybe I should have some other sources who can either confirm or deny that thing. Yes. And listen, the problem with the podcasting format, Sam Harris did a podcast where he talked about

not having Brett Weinstein on his podcast anymore. And Brett has kind of gone off the deep end. I think most people would agree, kind of like in the anti-vax kind of area. And he was like, he basically, Sam Harris, who's a friend of mine, chose to do the opposite of what Joe Rogan is doing. He's like, said, I don't want to platform people at this moment in time where the vaccine, people who are on vaccinated are getting killed. Because I can't in real time fact check the person. And then we get into this like, what is truth? Conversation.

And that is one of the problems because if the, if the WHO is a politicized organization now or a Fauci, you know, did try to cover up the Lab League thing or there's some conspiracy, theory there or if it actually turns out to be reality. Who knows? Did we fund gain a function? I'm sure we did. Did we do it with the intent of creating a pandemic? Obviously not. So you have all these possibilities, but you can't in a podcast edit in real time. Like podcasting does have limitations as a format. It does. Definitely. I think that even Facebook and Twitter, like the thing that ultimately pushed these platforms to make these content decisions is that at some point, you don't, again, when our per capita infections and deaths are so outrageous compared to the rest of the world, right? When it's a genuine public health crisis, when you have people saying, and people who are sincerely

being misled by the act of just asking questions, when you have a guy in the news today who was like, I declined a kidney transplant that I need to stay alive because they were going to make me get the vaccine. Yeah. To get a new kidney, right? Like the bar is higher than this sort of simple question of like, I'm just out here asking question. I'm just having conversations. I will say, I give Joe Rogan a lot of credit for acknowledging the conversation.

Like I, in today's America, I was frankly shocked that he didn't just dig right in because he has always been controversial. He has always like, yes, invited people on to just have a conversation and engage in some like intellectual back and forth. And that was like kind of okay. went again, 2,500 people. We are two-thirds of the way to the peak of American deaths per day. Yeah, it was 4,000, right?

Before a vaccine. Yeah. And it's all unvaccinated people, like 98, 99%. Or it's my mother who is vaccinated and totally immunocompromised and is put at severe danger by the fact that this pandemic in this country is like never going to fucking it. I get Joe Rogan a lot of credit. Because this last group of people who refuses to get vaccinated, right?

It's not a small group. We're like at 60% of the country. 34% 36% of the country. With two shots. Yeah. And then like something like 20 or 30% boosted. Right?

Like it's. Yeah. It's a challenge. It is a genuine public health crisis. And so it's just not, you can't just sort of say like I'm just talking over here. So. Which has led, I think a lot of people now to be like if you're, I hate to say this, but if your risk assessment, I'm going to be said in a kind way, if your risk assessment is so

poor that you don't take the vaccine. I mean, I don't know what I can do at this point. Like, how could you be looking at the statistics of 99% of the debts or whatever it is? It's way into the 90s. And I, you know, I wish we had exact. But then, like, how easy, how hard would it be for Joe Rogan to be like, hey, Dr. Malone, 99% of the deaths are among the unvaccinated, right? That's what I mean when I say, like, hammering that home.

Yeah, that would be more responsible. That would be, like, just say, get the vaccine. That's why I find it not credible that you're just intellectually curious still. Like, no, you're not, right? You're embracing some kind of like, you're taking the money, the fame and the attention is very comfortable. The great, I saw a large audience. Thing the other day that was like, Joe Rogan at this point is closer to Rush Limbaugh than Howard Stern, right? Because there was a void there.

There's this audience that's super fired up and very eager to embrace a voice like that. I think Joe Rogan just realized. and I give him a lot of credit for putting out a video where he's like, I realize that this train has gotten a little out of my control. Because most people are just digging in and being like double barrel people. I'm doing what I want. So good for him. He actually said something similar to what I said.

Back in October, he said this. It would be better to get the virus and recover and have amazing immunity. Rogan's side of the podcast, do you know what I think you should do? I think you should get vaccinated and then get sick. This is why. Because then you got the vaccine protects you from a bad. infection and then you get COVID, so then you get the robust immunity that is imparted from having the actual disease itself. That's a quote from his podcast, which is kind of, I didn't

say it exactly like that, but I did say I think the ultimate protection is being triple vaxed, then you get it and you get the weakest version and then you have the natural immunity too, and then you're kind of on the side. So I don't know. It's because he produces so much content and he talks about this so much, it's also very hard to get a handle because you're talking about three hour podcasts rambling, talking about this. Right. I mean, listen, I... He's Vax, too, right? He's not anti-vax?

The real... I don't... I don't know. I know that when he... I think when he got COVID, he said that he... Was Vex. He did say that.

He... Yeah. I mean... I'm not an anti-vax person. There's an opportunity, again, to... Look, I am of the firm belief that this is mostly a Spotify story. Okay, why?

It is very much about Rogan and the fact that he has a huge audience and a ton of influence. And, you know, for all the people... who are like, if you're getting your advice from Joe Rogan, like, you're just not paying attention to how influence and media works and has always pretty much, right? That's been my position, which is like, he's a comedian. Like, he always did Fear Factor. But you are right. He's at scale.

We know what influence. I'm coming around to your position, which is he's at scale. He's at scale. And when you're at scale, you have a different responsibility. And he should rise to the occasion. Hopefully, this is him rising to the occasion. Right. And, um, but to rock Mike's point, who says, I thought this podcast was about startups.

I think this is about Spotify. This is about Spotify. This is a business story. And every single company who's coming up right now does not realize that it's a content company and it is. And content moderation. I mean, we've talked about this before,

even Airbnb, even Uber, right? Like, everything is moderation at this point. And if you are going to be a company who is trying to build on the creator economy, on,

you know, podcasting, on acquiring and distributing content, these are the questions that are going to come up. And the fact that Spotify got into this business without, I don't know, a published policy, without a plan, without a morals cause of contract. They were moving fast and breaking it. Exactly. And what I'm saying to new companies who want to get in this business, don't wing it. This is the defining question now of putting information on the internet.

And early in the pandemic, he did say, you know, if a young person is healthy, they don't need to get the vaccine. I think that was bad advice. But he said, again, that's my advice. and what do I know? I'm not even a doctor. But to your point, he's at scale. He should be more thoughtful. Spotify is at scale. They should be more thoughtful. So if, and I thought his response was thoughtful. So, and I think he is actually a considered thoughtful person. So I think Spotify should demand a little more editorial controls from him, and he should demand it of himself. Let's end with his goals for the show. And kind of an apology? This was sort of an apology

an apology. It was an explanation apology. What do you call that? An ex-pinology? Not an apology. But yeah. But I know he did say the words, I'm sorry. I'm sorry. You feel that way. Let's hear a clip seven. Let's listen. I don't want to just show the contrary opinion to what the narrative is. I want to show all kinds of opinions so that we can all figure out what's going on and not just about COVID, about everything, about health, about fitness, wellness, the state of the world itself. It's a strange responsibility to have this many viewers and listeners. It's very strange. And it's nothing that I prepare for. And it's nothing that I ever anticipated. I am going to do my best in the future to balance things out. I'm going to do my best. But my point of doing this is always just to create interesting

conversations and ones that I hope people enjoy. So if I pissed you off, I'm sorry. And if you enjoy the podcast, thank you. Rate the apology. One to 10. Sincerity. thoughtfulness. I found him sincere in this apology, but I don't like the, if I pissed you off, I'm sorry, I'm sorry you feel that way. However, I'm sorry, I think that this was, I know, right? I'm sorry. Have your spouse or significant others say that? I'm sorry, I ruined your mentions, Molly.

Yeah, exactly. I know I did this. I never happen to be in a relationship. I know I did this terrible thing, and I'm sorry that I did it. I'm probably going to do it again, to be clear. I look overall this is so much more thoughtful than I frankly this is at least an acknowledgement that there is a burden of responsibility I'm also shocked this dude doesn't seem to have any producers I think there are no producers of note I think the producers book guests and they might give him some notes but I don't think there's like a science producer

talking about science stuff yeah oh he did apologize to Spotify so to bring this back to Spotify. Spotify has been growing quickly. They provide a great app, but they, let's face, it suck at content moderation and managing all this stuff. And they need to suck less. That's my I mean, they need to suck less for their own sake, because at one point, Joe Rogan had wiped four billion, well, you could actually say Neil Young and Joni Mitchell and Bernay Brown and Harry and Megan had wiped four billion dollars off of Spotify's market cap. Like, so when this news broke, it did drop the stock, yeah. Yeah. Four billion dollars at one point. Now it's up. Spotify's stock was up as much as 12% as of noon Eastern Monday, although the

broader market was up as well. I mean, look. I wonder if it had to do with the market stuff or if it was actually a business story. I wonder, yeah, I wonder was that happening during the stock market going down anyway? Like we have to, we would need to know what the overall stock market was doing during that period. But it does look like it took a massive dip when that news broke. Yeah. So maybe people responding to the news. Yeah. I guess. Anyway, they got a great business, and getting Joe Rogan was a brilliant move. I have to say, the $100 million they're paying him, I think is so, somebody can fact check me on this if they have inside information or something.

I heard three years, some people say five years, but let's pick four. Four years, $25 million. I think he was probably making $15, $20 million. He probably gets an overage if they break that number. So what they did with Joe Rogan was a highly profitable power move. I'll explain the math. They are almost guaranteed to get back a large percentage of Joe Rogan's $100 million in advertising. Let's say they get back 75 with $100 million. We're 50. Say 50. So now they're out $50 million. Spotify costs like $10 a month, $8 a month. I'm not sure. I pay for like a family

plan. That's 15, I think. I think I pay for that too. Yeah. Yeah. It's a pretty good deal, actually. You get five emails. You can share it. Yeah, that's great. So if a Spotify, user is worth, let's say $200 over three years. It's taking a guess here. If you had a million of them, that'd be $200 million. If you had a quarter million of them, it would be $50 million. So I think they make their money back and then some. And they blocked another competing service from getting Joe Rogan, the number one

podcaster at the time. In other words, sometimes when you overpay for something and you block a competitor from having it, in the long term, you know, you're going to wind up winning. That's why, like, the Howard Stern deal, which made no sense to people on Terrestrial radio, what they didn't realize was if only one million people pay for the $10 a month, $120 a year, over three years for Howard Stern, that's $360. That's his contract price. There are people actually doing the math on the other end of these deals.

And maybe it's maybe there's 25 million at risk. There's not the top line number at risk. It's probably 10 or 20% of the total number at risk. And for Joe Rogan, he got all that money up front, I believe, or a significant portion of it, took out his downside risk. And now he doesn't have to worry about ever having to talk to an advertiser again. All the risk was taken out. So if he did get canceled or did make some stupid mistake, he secured the bag.

And that was, I'm sure, there is no clause in it about like Joe Rogan's a bad person. There's no clause in it like Joe Rogan said the wrong word or gets canceled. He just gets the money, period, in a negotiation like that. Yeah, which is on Spotify at the end of the day. Like, and they'll have to make those. And look, it may end up being the best business deal. Like, you know, signing all these exclusives might end up being the best business deal that Spotify ever made. But I'll be very curious to see what the like long term fallout is of this move into straight up publisher.

Right. If they, if they, if God forbid they call down the FCC on streaming services, who ultimately loses then? I think there go, I think it'll, the downside is so minor of being a publisher. And I think they explicitly are going into Netflix territory. I think that's why they bought Ringer was to learn from Bill Simmons, who was a savant. But also, I think it was more for the playbook. I'll be honest. Like the IP they got might be worth half the deal, two-thirds a deal.

I think what they really wanted was Bill Simmons' brain. Like Bill Simmons created 30 for 30, Grant Land, all these incredible shows. He knows how to manage the talent. So much like when AOL bought Weblogs thing for me, they were trying to get the playbook for Engadget and joystick so they could do TMZ, which they owned half of and other blogs like TMZ was a blog they built on our platform. So I think they were trying to buy the playbook. Joe Rogan was part of the playbook, anchor part of the playbook. And what's the other one they bought? Gimlet. Gimlet. Yeah. So just specifically, Bill Simmons. I don't

know if they bought them, but they did the same like an exclusive. Maybe they bought them. I thought they bought them. I thought they bought them. They're all, they're all Spotify employees now because the unions are fighting and it's all goes up to Spotify. So Spotify bought this. It is so interesting because that is exactly what, when we were talking about, the amount of money that Disney and Netflix and HBO. I mean, it's interesting to think that the competition to them. We were like, nobody could ever compete now. It's such a big moat in terms of their investment in contact content.

And it is interesting to think about Spotify as a competitor that's sort of like coming in the side. Guerrilla warfare. Licensing maybe a different type of content, but the same eyeballs, right? The same attention economy. Same year time. Yeah. Gimlet and Ringer. We're bought outright.

Thanks, Justin. And now we're part of this. anchor. So if you're watching this on Spotify, you can press a button if you're listening to the audio stream and then anchor their, you know, back in technology shows the video. Yeah. So now they're competing with YouTube. So now we have our content on YouTube and video on Spotify. So, you know, people can. May or may not have a label today. We don't know. Exactly. I don't think they rolled that out does yet. Here, just some math on the stock drop. Variety reported Spotify stock drop 6% from January 26 to 206% from January 26 to 28th representing $2 billion lost market

have during the same time period. Tech stocks went down, Zoom 10% square 15 in Twilio. So it seems like correlation, not causation. Could be a click-bady headline. Okay. Could be. Yeah, could be.

I think we did enough show. Did we do a show? RIP, my mentions, even in chat. It's all over now. Time to go. Actually, one of the things I like about having us co-host is we have a different opinion about this. And I actually felt like I

learned a little something in our discussion, which was, I wasn't taking into account the downside risk of Spotify with regulation, if they don't get this right, which I think is actually real. I was kind of not even thinking about that. So you made me think about that. And then also, Joe, taking more responsibility, which actually has now, I think our positions were kind of two circles that were close together. And now if you kind of push them together a little bit, I think what we figured out today, because you and I have been debating this on, and we have a different opinion. I was always like, buyer beware, like, it's a comedian. And now I'm kind of like, wait a second, if a comedian does get to this level of scale and the publisher is at this level

of scale during a pandemic and it could be resulting in public health crisis, yeah, maybe you take a little more care and you do that proactively because it's the right thing to do. Like, where is his producers? Like, if I was Spotify, I would sit with Joe and be like, here's like $250,000 extra a year. Hire five scientists part-time to just fact-check your own pod. 50K each, five scientists. And any time you talk about science, the show I was talking about, you just have them do that. and we'll make an after Joe show. After Joe show is actually a good title. Dude, after Joe show is a good title and would be huge.

Yeah. It'd be huge, just like the Talking Dead. Yeah, I mean, listen, you're a great co-host. I love having these conversations with you. And I love that, like, I do love that our, you know, our chat, we're in a, we're at a point in America where we literally have to relearn how to disagree. And I have been proud of most of the people in our chat today who are having an argument, like a conversation where they are trying to educate each other.

And it's great to see. not everybody, but like a lot of them. I think if you stop arguing and just take the approach of like, let's hash this out, what is valid about each position? And if you just give a little more space to what's valid about the other person's position and what is an outcome that's good for everybody. Yeah. Like, I'm always thinking, because I work with startups, whenever there's problems,

I'm just like, what's the solution? What's our plan? I just immediately go to that. And they're like, oh, my God, there's so many problems. We've fucked up this. We fucked up that. And I'm like, great assessment. What's the plan?

And people are like, Jake, you're the greatest board member, every the greatest mentor. I'm like, because I stopped wallowing in the problems and I just got us focused on the plan. And like when you start joining boards, you'll be faced with crises constantly.

And if you can be that person who says, well, in a crisis, you do have to assess. And that's what we did here. We were assessing, what's the problem? And it is misinformation.

What's the solution? Better information, you know? More thoughtfulness. 100% 100% Be more thoughtful Just listen

Let's make 2020 The year of and And the year of and And it's a way of being more thoughtful Yes And How many Joe Rogan Empathy

Thoughtfulness Here's interesting I didn't know we had voting in YouTube But one of the producers Just put a I know A thing up here How many Joe Rogan episodes

Do you listen to them on Zero 1 to 3489 I think I'm more like 1 or 2 So I'll pick 1 to three. Oh, 37% of our audience listens to one to three. Interesting. Only 26% of our audience listens to none.

That is, we have a podcasting audience. So the majority of our audience listens to Joe Rogan every month. Big overlap. Interesting. All right, everybody. Thanks for tuning in. Please rate and subscribe. Go to this week in startups.com and give us your email address.

If you want to get invited to meetups and yada yada, go to this week in startups.com slash slack. If you want to join our Slack and come to our meetups. which are at this week and startups.com slash meetups. Okay, we'll see you all next time. Bye-bye. Bye.

Hey guys, Rachel reporting here. On February 14th and 15th, we'll be hosting Founder University Intensive. This is a two-day program for Founders. Now, this course is only open to women founders. We'll be hosting a course open to everyone on May 9th and 10. You can apply for both at founder. Dot University.

And applications for the longer 12-week Founder University program are due on February 14th, and you can also apply for those at founder. Dot University. Follow Jason and Molly on Twitter. At Jason and at Molly Wood. If you're not a boomer and prefer TikTok, search for this week in startups to find a fan account at this underscore week underscore in underscore startups.

And our official account at TWA startups, but honestly the fan account is way better than ours. And if you're still not tired of hearing from Jason six days a week, you can hear and read his book angel at angel the book.com slash audible.