This Week in Startups - Coinbase lays off ~18%, EU crypto regulation, $NFLX & $ROKU ad-tech talks, Hallow prayer app, Prey laptop security | E1484

Episode Date: June 14, 2022

Today, we kick off the episode with Coinbase’s several hundred-person layoffs (3:23) and the EU’s crypto regulation in progress (23:15). We cover Netflix talking with Roku to help run its planned ad-supported tier (35:18). Our Startup of the Day is Catholic Prayer and mediation app Hallow, partnered with Mark Wahlberg for promotion (41:03). We’ll also showcase Prey, a company that helps protect laptops from theft, which our producer Justin should’ve used in his recent burglary (47:57). (0:00) Jason and Molly tee up today’s news stories (2:30) Apply today to Remote Demo Day - at remotedemoday.com and pitch +10K investors of thesyndicate.com, and close your round (3:23) Coinbase laid off 18% of its staff after a crazy few weeks in the crypto space (14:44) Wealthfront - Get your first $5,000 managed for free, for life at https://wealthfront.com/TWIST (15:59) Looking at Coinbase’s strongest quarter to date (22:01) Thorne - Personalized, scientific wellness. Go to https://Thorne.com/u/TWIST (23:15) EU Crypto Regulation is approaching (34:02) OpenPhone - Get an extra 20% off any plan for your first 6 months at https://openphone.com/twist (35:18) Netflix has reportedly reached out to competitors like Roku and Comcast for help with ad sales (41:03) SOTD: Catholic prayer app Hallow raised $52M and has ads featuring Mark Wahlberg (47:57) WLitF: Prey app + Producer Justin’s robbery story

Hey, everybody, hey, everybody. It is Tuesday, and the Warriors have one game fine. My voice is a little raspy, but I'm going to get through the show and we got a lot to talk about, Molly. We definitely do. We're going to kick it off and spend some time on Coinbase's thousand-plus person layoffs, what that's going to mean, what the company is going to do going forward, how it's been handled, and then the EU's crypto regulation already in progress. Yeah, and then we'll talk about Netflix, has reportedly engaged Roku and Comcast to talk about

an ad-supported tier. Very interesting news there. Yeah, when in trouble get some help, I think. We're going to talk about, this may come as a surprise, Catholic prayer in the form of the meditation app, Hallow, which is partnered with Mark Wahlberg to promote it. Oh, Mark Wahlberg. Get your prayers up. Speaking of praying, we're going to showcase a startup called pray, P-R-E-Y, that helps you track lost laptops because producer Justin, early Sunday morning found out. that his laptop and his my laptop, his corporate-issue laptop, have been stolen,

and you're going to find out at the end of the show how he tracked the culprits. And if he was ultimately able to recover thousands of dollars worth of laptop stolen in bedside, do or die Brooklyn. It is going to be a great show. So stick with us. This week in startups is brought to you by Wealthfront. Wealthfront makes it easy to invest and easy to grow your savings. with a diversified portfolio that balances your other riskier bets.

To start building your wealth and get your first $5,000 managed for free, go to wealthfront.com slash twist. Thorne. Thorne empowers people to take control of their long-term well-being with a proactive science-based approach to health. Through a variety of at-home tests, Thorne teaches you about what your body needs and provides the right, high-quality, certified nutritional supplements for you.

To get started and take 10% off your first order, head to Thorn.com slash you slash twist and openphone. As a startup founder, a lot of mistakes are easy to roll back, but using your personal cell phone number as your company number isn't one of them. Openphone makes it easy to get business phone numbers for you and your team right on top of your existing devices. Visit openphone.com slash twist to get 20% off your first six months. months. All right. So before we get to the show, we've got something for founders looking to raise capital. Yes, we now have two spots left for our next remote demo day.

It's on June 29th. And if you're an early stage startup and you got a product in the market, that's important. You've got to have a little bit of traction. And you're looking to raise 500K-ish or more. Apply today, Remote Demo Day at Remote Demo Day.com. It's that simple. And then you get to pitch the 10,000 investors plus who are in the syndicate.com. And, yeah, we'll help you raise your round.

can be like Gigster, which runs an Airbnb like location marketplace for creators. I'm on the board of the company. And I had the co-founder, Hank Lieber on episode 1196. They came on Remote Demo Day and they raised millions of dollars. So maybe that'll be you as well. There is no charge to do this. We do this to help the community. And we're always taking application.

So if you're interested in going later, you can go to the same thing, Remote Demoday.com. Check it out. All right. Let's get into the news. This morning, Coinbase, laid off 18. percent of its staff after obviously a pretty intense couple of weeks in the crypto space. Real quick note on Coinbase's stock performance going into these layoffs, which cannot have come as a surprise to anybody. The stock is down 78% from a year ago. It's down about 86% from its

2021 high of $357 a share in November. The market cap dropped from almost $80 billion in November 2021 to 11.3 billion today. Coinbase looks like it's got, as of Q1, at least $6.1 billion in cash, total revenue of $1.1.1 billion in Q1, and a total net loss in Q1 of $430 million. All right. It's very important to note. People get a little confused about this. There's revenue.

There's how much cash you have. And then there's the market capitalization. And now people will say, well, this company was worth. a hundred billion. So that doesn't mean they have a hundred billion in cash laying around. That's the value put on the company by the last share bought times the total number of shares. That's how the valuation is done. The last person to buy a share buys it for $100 and they have, you know, whatever,

a billion shares and it's worth $100 billion. So just keep that in mind when these layoffs happen. Their cash position, cash in the bank, cash equivalence, they call it a fancy term, That is $6 billion plus. They got like 6.1, I think. That's different than their market cap. So it's just a common mistake people make because they're like, well, why would they, if it's a $15 billion or a $50 billion company, why would they care if they have a thousand plus or minus?

It's because the cash on hand is what they have. In order to get more cash, they would need to sell more shares. And there might not be a market for people to buy shares in a crypto company on this day. Right. And $6 billion is a pretty good amount of cash, but not if your core business. is declining rapidly. So let's break down the layoffs and exactly how many people were impacted. Coinbase CEO Brian Armstrong published the note that he shared with the team in which

he said, we grew too fast. We overhired. We scaled too quickly. Coinbase has a little over 6,000 employees right now, which is up from 1,250 employees at the start of 2021. So in 18 months, they grew staff by almost 5x and brought over, you know, well over 4,000 new team members, and now they're laying off 1,100 people. So if they had done a layoff of this size in, say, January 2021, that would have been 90%

of the company. It's a massive. It's just, you know, we talked about like a 25 point swing in the Warriors game. This is kind of like that. I mean, it's intense. In the post, he says, you know, three main reasons, right? Economic conditions have changed. Managing costs is critical in downmarket.

And Coinbase grew too quickly. He said they have to manage expenses. and increase efficiency. And that's why they're doing these layoffs. And they were pretty great to people. They're giving them 14 weeks of severance, which if you are in any of the lower rung, you know, starting out careers in the world,

you look at these layoffs on and you're like, 14 weeks plus two weeks for every year. Like people who work in factories, you know, people who drive. You just get fired. Yeah. I mean, you just get fired. It's like good luck with unemployment. These are incredibly generous.

Anybody who's got these jobs will find another job after they take a long, delightful summer off. And so as horrible as layoffs are, I always try to put these in context for people. These are high-tech workers who had 10 offers when they decided to go to Coinbase in all likelihood or 10 options. They probably have five options or three options right now that are amazing. And they'll be fine. Their stock is worth probably very little or none on the way out because they are underwater. The stock price went down and they had a strike price. So if the stock is trading below that stock price are underwater.

But they took that chance. But I read the letter this morning. I just, you know, I always like to hear the tone. My hot take, perfect note. It took responsibility. They defined reality, you know, hey, one, two, three, here's what's going on. As Canada as possible. gave a little pep talk.

And then he explained the mechanics of the layoff for a remote company. I don't know if you noticed that, but there was that dip from that company who did everybody on the same Zoom. If you're watching this, you're fired. Better. Better. Oh, my God.

So what he said was, listen, I'm really sorry about how we're doing this, but there is no way to do this. We had to send an email to everybody. And in that email, it will tell you if you're laid off or not. I know this seems very cold. We will have turned off your accounts. The reason we're doing that is to protect the customers, because some people have customer access,

and to protect people who might make a rash decision at this time or something to that effect. It was like a very meta, well thought out, like, I'm going to explain to you, there's no way to do layoffs properly, but this is the best we came up with, and here's why we did it that way. So you don't have that shock of like the how you broke up with me.

Some people don't like the how, you know. They want you to break up in a classy way, and I think you did that. You should do that. You should always break up in a classy way. Like, come on. It's you, not me. Yeah.

It's me, not you. What is some other interesting context in as this is happening is that last week, and we sort of missed this, there seemed to be, I mean, it's just very, it's interesting what's been going on there. There seem to have been a little bit of maybe like a mini mutiny, like a post. And it could have been, you know, one person or many, we don't know, called Operation Revive coin on this writing platform. platform mirror.xy-Z. And they said, we, the employees at Coinbase believe the executive team

has recently been making decisions that are not in the best interest of the company, its employees, and its shareholders. And they specifically called out the C-O-O-O, the CPO, and the chief people officer, not Brian Armstrong, which was interesting. And they listed these eight reasons why they thought these executives should be fired, including the like NFT platform over-prioritizing certain products. And then one of the things they said was aggressive hiring for thousands of roles despite the fact that it is an unsustainable plan, contrary to the wisdom of the crypto

industry. And they also call that rescinding offers to new employees. Yeah, this is what happens. When something comes apart, you know, the arrow start flying, the finger pointing happens. We're going to see a lot more of this. And CEO Brian Armstrong,

who is, I think, emboldened to communicate, and it's a good communicator, apparently, Like, his ability to write is pretty good and communicate. So I think he is like a new breed of like, I'm not going to back down. I'm not going to go quiet. I'm not going to do PR speak. He basically said this is really dumb on multiple levels. And he said in his second point, first of all, if you want to do a vote of no confidence,

you should do it on me and not blame the execs. Who do you think is running the company? I was a little offended not to be included. Smiley face. So he's, you know, being a little trolley. Number three, second, if you have no confidence in the execs or CEO of the company, then why are you working at that company? Quit and find a company to work at that you believe in, exclamation point.

I think that was pretty good. There is probably lots of, and then he just admits, probably lots we can do better. But if you're out of place where you want to leak stuff externally, that it's time for you to go. You're hurting yourself in those around you. And he basically said, if we catch you, we're going to fire your ass as well. So, you know, this is going to.

to be the rest of the summer and into the fall. And then for some of the legal cases, which is this one fall into, but, you know, other crypto projects like Luna, you know, there was this thing going around over the weekend that Doe Kwan had liquidated some billions of dollars of his Luna or Terra in that stable coin collapse. Who knows if that's true? But there's going to be a lot of discovery, legal, you know, DOJ actions, you know, civil lawsuits, you know, and blog posts and anonymous blog posts as crypto comes apart.

Yeah. And I think you're going to see companies have these kinds of people are going to be upset, right? Like, no matter how perfectly you handle it, there are going to be people who are going to be upset. It sounds like a big part of what was happening is that there were, there was some obvious telegraphing that layoffs were going to happen and employees probably thought the company scaled too fast. Like, it's interesting because it's this double, right, you can have leadership, but you can also have wisdom of the crowds, where it's very possible. People internally were like,

okay, but there are some warning signs that maybe, you know, this isn't, the rocket doesn't always go up. Yeah. Maybe we shouldn't be hiring as many people and obviously they didn't feel, listen to. But, you know, I mean, but that's also like what happens

when you work at a company. They set the agenda and you're either on board or you're not. Yeah, and I think there are, if you're, I think Brian's point about like, if you're not happy, like doing these kind of, things, um,

causative disturbance for the people who might be happy at the company and enjoying their time there. So the best thing to do is just move on in your life. Like it's the bitterness of like, uh, this kind of stuff, I think is, um, it's just wasted energy.

Just put, just go find another gig. Um, I think, you know, if Coinbase, uh, had their stock price high and it was above people's strike price,

that never gets written. And if the company's growing and people are still trading crypto, but the bigger picture here is, crypto market has actually collapsed. There are no more buyers. The buy side is gone. And as I said the other day, when you lose the buy side,

everything just plummets to base value. I talked about it yesterday. I talked about it for the last month. And the base value is going to be like, how much cash do you have? What's your revenue and earning? Some multiple on that. And, you know,

maybe the goodwill. We talked about goodwill. You know, like the IP, like does coin base mean anything to people? It does. It's the most respected brand in crypto. But really, I think going over the monster Q2 of 2021 is the big one here. Because remember, all the stimulus happened in the end of the year one of the, it was a lot of stimulus that happened, I think, in end of 2020 and into 2021.

People were getting unemployment and unemployment bonuses that were more money for a brief period of time, like six, 12 months in a lot of locations. They were getting more money to stay at home than to go to work. And people weren't able to spend money going out. So that's when you had the balance sheet flip massively. All of a sudden, everybody had massive savings and they weren't spending. So this is just like this incredible moment of time. And then you have a bunch of cash sitting around. You get a little frisky.

Yeah, maybe you heard about some coins and you want to place a bet on Bitcoin or whatever. Or you want to buy a stock because you heard about AMC is going to the moon. Listen, wealth front. is an investment platform that lets you open up low-fee IRAs, 401ks, and more. But here is the amazing innovation they created. They call it self-driving money. Basically, it's a robo-advisor that builds you a custom investment portfolio of ETFs based on your preferences, your risk score, and your interest.

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I absolutely love Wealthfront. Twist listeners can get, listen to this, their first 5,000 dollars managed for free for life. But you have to go to wealthfront.com slash twist. That's W-E-A-L-T-F-O-R-N-T dot com slash twist to start building your wealth today. But maybe you can walk us through Q2 of last year because the numbers they did were bonkers. Bonkers. And the reason we're bringing this up is because they are going to be compared against these numbers in presumably their next earnings report.

If you look at Coinbase's strongest quarter to date ever as a public company, it was Q2 2021. And during Q2 of last year, the total top line revenue was $2.2.2 billion was $2.2.1 billion last quarter in Q1 that I mentioned. So half, right? Q2 20201 net income or profit was $1.6 billion. That is compared to losing $430 million last quarter. The retail, the number of retail monthly transacting users in Q2 2021 were 8.8 million compared to 9.2 million last quarter. So actually not a big change there. Yeah. And they have added verified users overall. They also, it seems like, really tried to court institutional clients. So in Q2 2021, they reported institutional, 9,000 institutionals on the platform, which of course you want, right, because they're less volatile. We don't know how many of those big whales are still on the platform, but we may find out.

One note on the institutional's. My understanding is they pay for custodial services. So you pay, I think it might be 1% or 1.5% for them to hold your crypto and make sure it's safe and, you know, cold storage type stuff. And remember, that came up because maybe it was three weeks ago, you and I talked, Molly, about the fact that the deposits of people on Coinbase. were not secure, they could be used as collateral in the bankruptcy thing, and they'd put that into filing. These institutional clients are in a different category because they pay. And so my prediction, a little bit of a hot take here, is that they may start charging

you to keep your demolished crypto portfolio at Coinbase. So imagine they said to you, if you have, you told me you had $1,500 that went down to $500 or something in that range. Now imagine they go to you and say, yeah, by the way, you got to pay us five bucks a year to keep the $500 here. or if you had $5,000, you had to pay $50. Would you take it out? Probably not.

And now they've got a base of, you know, and that would, for that, they would guarantee you that it was safe, you know, and it couldn't be taken into bankruptcy. So they have to architect their system to do that. So just something to a little mini prediction from me. Yeah. No, that's a good one. Well, and also, I mean, I think mini prediction from J.P. Morgan today, right, vis-à-vis Coinbase.

J.P. Morgan downgraded it after being, like, pretty bullish for a lot. long time saying they're going to have a hard time turning a profit. And I do think, you know, two things are going to happen. One, Coinbase's next earnings call is going to be in comparison to this banana's stimmy quarter from Q2 2021. So in terms of a stock price effect, that is going to be terrible. And then second, as they have noted in previous filings, the majority of their revenue comes from these transaction piece. So if people are not trading, it's a big problem for revenue, It's like if people stop buying iPhones. And they haven't really shored up the AirPods pro business and the banking and finance side of things.

So in terms of those future revenue models, if people just stop trading crypto, even if they're just holding, it's somewhat in doubt. And the earnings report, like, we just need to, we can't say this enough times. It's going to look so horrible in comparison. That it's almost going to be unfair. This is where our subscription businesses are so in vogue. if they had been a subscription business all this time, and they had nine million people paying a subscription of but $5 a month, that would be $45 million.

$45 million, you know, across, you know, a year would be, you know, roughly $500 million in change of pure profit, pure profit, unadulterated, pure profit. And that's at but $5. Now, if it was $10, they have a billion, a billion dollars. Now, if they lost 5% of the users every quarter, but they were making a billion dollars, it's still be a better business. So it's basically going to turn into Netflix if, you know, they want to try to keep this business alive long term. Now, they do have the $6 billion.

So if they're losing $500 million a quarter, what was the loss the last quarter? I think it was like $500 million or something. Yeah, just like $4.30. Okay. So let's say they lose a... I'm just going to say $500. They got $6 billion in the bank. So they basically have...

So they have basically three years of runway to figure this out. If this recession takes a year, I think it's a... I said three, four quarters is what I thought it was going to be. We're in the second. So that means sometime into next year, things start to go sideways and go back, you know, start to go back up, maybe modestly. I think they have plenty of runway to get there. It's like unlike the BuzzFeed or Peloton situation where you were like,

whoa, cash crunch under 10 quarters. And this is what benefited Uber with their cash position, Airbnb, cash position, double-click back in Web 1.0, had a huge cash position. So when the market's hot, cash yourself up. If you don't need the money, that's the best time to raise is the lesson for founders. When you don't need money, best time to raise. And so you just get that little extra bit of cash cushion. Then you get to deploy it when the market's down, Molly. So he's actually in the cap.

Berti. Now, I think the stock's going to keep going down until they get through this quarter and into the next quarter. So I think it's going to be a really tough. year and they took the hard medicine of, you know, making the cuts. And I think we'll continue to, right? I mean, clearly I think this is a, this is a CEO who will course correct, one imagines. And I think you're absolutely right. You'll start to see those subscription fees come in.

Like, you'll start to probably see different revenue models. It'll be interesting to watch. Listen, dealing with your personal health and wellness can be daunting. You're probably being bombarded by ads and you might have no idea where to start. That's why Thorne created a care system that's personalized, preventative, and holistic, while still being science back. And if you're a high-performing founder or operator, you need to make sure you take care of your health. And that's where Thorne can help. Thorn offers at-home tests which identify where you need the most care, like a gut test that analyzes your gut microbiome,

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slash U-S-T-W-I-T to save that 10% and let them know you came from this week in startups. It will also be interesting to watch whether new regulations in the European Union on the crypto market have an ongoing negative effect on crypto and thereby Coinbase and everybody else in this business. Or a positive effect.

You could argue both. I would have, I think any regulatory certainty will ultimately be good for these businesses. 100% long term. Short term, though, it might drive some sketchy crap out of business, which we're going to see anyway. EU regulators for the 27 member countries are set to meet today, June 14th, and then again on June 30th to talk about kind of harmonizing crypto regulations. They kicked off this effort in September of 2020, and basically they want to try to like

unify, because there's fragmented regulations across the EU, unify those regulations, figure out what to do about the fact that crypto falls outside of these existing consumer investment frameworks. Like we've talked about whether it's a security or not. How do you even protections, FDIC, yeah, all this stuff. Yeah, how do you define it? Money laundering, stablecoins, how do you define it? And then how does that impact markets globally? And stable coins have to define like who's allowed to do this. I mean, who's a lot of allowed to build their own currency and then compete against the country or the region's currency, in the case of the EU, it's not one country, it's many countries.

Should you really allow somebody to create a digital version of your dollar? That's more efficient and controlled by a private company. There's an argument that private company shouldn't be allowed to do this, and this should only be the purview of governments. Now, a libertarian might say that's BS, but people who want to live in a more controlled society I very much want stable coins to be either illegal or regulated. I would fall into not banning them, not letting them be freewheeling. I would be hyper-regulating them, hyper-regulating them, as in, you know, you have to get a license,

you have to have a background check, you need to have everybody on the board has to be insured, bonded, background checked, you know, like serious like getting a bank charter stuff, which is why getting a bank charter was like the subject of an entire, An entire season of billions was about like, you know, how hard it is to get a bank charter. Like, you really want to make this hard for people so that you don't have really weird people like the tether people or Luna, you know, and Terra versus tether, you know, two different stable coins. You really don't want these people. But I got a hot take on all this. I think the regulators now have the high ground.

Like Obi-Wan, don't try it. at Anakin. Now, anybody doing anything Fugazi needs to understand the regulators have the high ground. And you've already lost one limb to count Duku. You got three left. I suggest you lean into the three, literally and figuratively. You do not want to take on the regulators at this point when Celsius, you know, froze everything, Luna, the tether questions that are still out there, all of these shenanigans, people losing their NFTs to hacks. X-R-P-S-E-C-C lawsuit, shout out to Brad who was the Warriors came last night.

That was super awkward. I've been so critical. He said they should all go to jail. He's like, hey, meet my kids. I was like, oh, my God. Nice to see you, Brad. My God. Putting it aside, if you're a regulator right now, you're like, okay, let's see you argue

against regulation when everybody's lost everything and we all. know that 98% of the projects are a scam and going to zero. There is no high ground. And you know who benefits? Coinbase circle. The companies that took preemptive regulation and regulated themselves and maybe overregulated themselves and were, you know, maybe what sort of judicious on who they listed as a coin and really were thoughtful, those people are now going to be the ones who benefit. Well, yeah. And also get swept up in regulation that they maybe didn't earn because they were trying to do the right thing. But yeah, the fact is, like, in a million different ways, one, we had, uh, if it walks like a bank and quacks like a bank, it's a bank, right? Like,

Celsius, your savings and loan. Sorry. Like, if it walks and quacks like derivatives trading. Yep. It is Luna and Terra. Like you cannot, you know, you tried to sort of set up these parallel structures to get around existing regulations on institutions that you look exactly like. And then, of course, people got screwed. And now everybody is going to get swept up in it and had the same exact conversation with Bill Gurley last night at the Warriors game. We're just like, how is this crypto thing?

Like they created this whole parallel universe to securities law. Right. And I think now the securities folks can say, okay, that was an interesting experience that failed. Yeah. And now we're going to take legal action because now that everything's collapsed,

we have the proof. So it's kind of like, you know, somebody drives the getaway car. It's pack with diamonds and then they're speeding. They go through a speed trap. The cop didn't even know they robbed the bank, but this is what criminals do. They just don't stop. So the cop then starts chasing them and they kill three people, flip the car, they kill one of the passengers, like everybody dies. The whole thing's a smoking pile of wreck. And then the judge gets it. And he's like, so you stole the diamonds. You were speeding. You kill two pedestrians. You kill two people in your

own car. You killed two people in the other car. Like you're going to jail for everything. It's over. Like there's, they give you no benefit of the doubt. The benefit of the doubt. The for the doubt when consumers lose their money, Molly, is gone. Yeah. It's gone. And it flips to you're guilty because people were hurt. Now, that's not fair either because those people put their money in. They knew this was Fulgazi in a lot of cases.

They were greedy. They were acting out of like just no diligence on their part. So I don't. But you still do have to. I mean, and I know that you and I think differ a little bit in this in this instance. Like you think people need to learn how to gamble and they need to learn how to like, you know, but the fact is like people don't learn, right? Like, that would be great if they were learning.

But what they are doing is gambling. And they were in, they were 100% incentivized by these exchanges to like, if you make money on exchanges on literal trades and transactions, then your job is going to be to get as many trades and transactions as possible. And that is always going to be distorting. That's always going to suck people in who don't need to be there and who are going to get hurt. Yeah, but here's the thing. The owner of Ramsey Sports, when he starts playing in a poker game for boxes Zizi that he can't. afford. And then Tony Soprano now owns his sports store.

Ramsey Sports. And they just, you know, boost everything out of the place and light it on fire. Like, this guy knew. Like, he understood. Dave, Davy. Remember that? You feel the same way about the, you know, mortgage back security swaps and yeah. I mean, you can, you, there's a, this is why

regulation exists because it is a fine line. Like people get. Even in a regulated environment, point is well taken. In a regulated environment, you're saying, if I may summarize, people cheat. Mm-hmm. Now, if you cheat in an unregulated environment and you choose to, or you choose to participate in an unregulated, when you go play in an underground poker game, you are going to get screwed. Like, it's an underground poker game. I know guys who are pros who will go to underground poker games, knowing that they're probably going to lose, just to try to see if they can figure out how they're cheating. You can follow Bob, Haralabob, on, uh, on, uh,

You know, he's worked for the Dallas Mavericks, and he talked about playing in a game where people were wearing contact lenses, and they have, like, marked cards where you put a little bit of, like, a liquid on the card. And in the cards, you can tell, like, those are the aces. So they just, if you just know all the aces in the deck, I mean, just that alone as an advantage is huge. Because you're like, oh, okay, this guy has an ais, he's got an ace. This guy's got three aces, boom. So shout out to Horalaba, but he was explaining this, like, he played in one of these games. He had a feeling it was rigged. He had a feeling it was rigged. He took a minor loss. The way he figured it out is they wanted him to play heads up because I had somebody trying to get me to play heads up in my early in my poker career who I had beaten like three or four games in a row and won like, you know, one like, you know, 10 or 20 grand. And they're like, we should play heads up for like 100K or something or 50K, like whatever, you know. And I was like, yeah, no, I don't play heads up.

They really were trying to push me. But he did is he said, okay, yeah, you guys want me to play heads up versus that guy? Yeah, how much I'll let you stake me for 30 or 40 percent. In other words, you could buy into my action and they wouldn't take the action. And it was like, if you really actually were expert cheats, you would give me 25, take 25% of my action, play the long game, have me lose a million, and you'd still be up, right?

Because you'd lose the 25%, but you'd gain the other 75, you know, there'll be a formula here to actually back him. But when they wouldn't back him in what they, and he's a really good player, he knew that it was crazy. But this is going to be a crazy six months. Be prepared for it.

And if you're in crypto, here's the good news. I meet a lot of crypto entrepreneurs who are very smart, who are actually building stuff, who are appalled by the grifting they see going on. And they say to me privately, I can't say it because I'm in crypto. I don't want to seem like I'm going against the crypto revolution. But I am appalled that 90, 95%.

I agree with you 100%, Jekal. 95% plus of this stuff is a scam, a grift, and incompetence, or some combination of those three. I can't say it. But I'm glad you're saying it because it's really hard to be part the 5% that are actually building real stuff and who care about this and care about the core technologies and what they represent.

Guess what? Those 5% just ship product and you'll be fine. Just ship product and delight users. Now is the time for builders and the charlatans and these like wackos who grifted into NFT projects. You know, try to scam people by creating some shi bullshit.

You can bleep that out, but like cartoon characters and then sell them for you know, ungodly amounts of money that peer pressure people into buying them by making them feel less if they didn't own one and then bringing them into the circle if they did. Like, have you guys never like been, you know, went to high school and felt peer pressure? Well, I was just going to say yes. Exactly. No. Like we're living in an environment where a lot of people have not gotten scammed yet. They weren't old enough to get scammed in 2008 and they're getting scammed today. And like it is true that now the reel is going to rise to the top. But it's going to be a harder road for all of them. And they know it.

Yeah. Because of all of this banana pants. Listen, lots of founders are Lucy Goosey with their personal phone numbers. They put it on their company documents. They use it on sales calls, email footers. It's all over the place. What happens if that salesperson leaves a company? And now people are calling and that person's gone on.

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And listen, we get credit for you using the service. You're going to love it. And you're going to save 20%. Okay. Great deal for everybody. Speaking of a hard road, interesting scoop today from the information regarding the world of streaming. We are, by the way, saving all the news about, cricket rights and whatnot for when Lawn is on Thursday.

But update on what's been happening with Netflix. Of course, they've been in some trouble. There's a question about whether they're going to do an ad-supported tier. Now, the information has a scoop saying that it's apparently reached out to competitors like Roku and Comcast for help with ad sales. Oh, great. Great. Because they know how to do it?

Like, what would this even look like, I wonder? Well, people have ad networks. they might want to extend them. So what they can say is, hey, we'll do a three-year deal with you, Comcast or Roku. You, we just put this code into the Netflix free app and they'll have like a Netflix light. Or maybe it's the same Netflix app because they want to move it up the rankings. But we'll see. They might want to make it a different app experience.

And you can't force yourself ahead. And they say, listen, we'll give you 20% of the revenue. You get to expand to 100,000 people. And it'll be a three-year deal. And we'll all do better because you have this up and run. already. So this would be, you know, a fine thing to do in the short term for them to learn. Remember, Yahoo, for people who don't remember, or are too young, Yahoo, licensed Google, and Google was the default search engine on Yahoo. And it just had power by Google on the bottom.

And then eventually people just started clicking power by Google, and they started going directly to Google. And so there are business ideas like this out there where you can learn from a partner for some period of time, and it's destined to break up at some point. But, you know, there's been this talk of Netflix buying Roku. I think I'd be like a, I don't know if antitrust, it's weird to know what antitrust would do. In a down market is really Biden and the antitrust and Lena Kahn going to be like, you know what, we should really start attacking American companies that are, you know,

already getting their asses kicked, that are just trying to survive and laying people off. It's a really bad look. This is where politics comes into play. You know, Lena Con got put in there when the market was at a top and everybody hated billionaires and Bernie folks and Elizabeth Warren, you know, pay your fair share. And it's like, well, you made the tax law. So change the tax law if you want people to pay differently. Come on. Like people aren't gaming the tax law.

I mean, but you do have to change the tax law. You can't say capital gains. If we want to change a capital gain structure of the country. Elizabeth Warren about that. Talk to Republicans about that. Well, yeah. So somewhere between the, if we, all politicians. Enforce the tax law.

There's a 70, like, trillion dollars. tax gap anyway, sorry. Okay. Well, if there are, I get a little fired up about the tax situation. There are people cheating on their taxes. Obviously, we should 10x the number of people. There are companies, there are individuals. Like, if we collected all the taxes that are owed in this country, we have all the money

we need. The fundamental not, so which would be great to just get people to pay their, pay what they're supposed to pay. But if you want people to pay differently, it is not helpful to attack folks who are playing by the rules. If capital gains works differently, if you don't have income and you just have capital gains, you might have three years where you pay no taxes and then two years where you set records

and pay the biggest taxes in the history of the universe. So if you want to change that, then you change capital gains. And if you want to change capital games, be prepared that America is not going to be the leading economy in the world with the most resilient and the most vibrant. So, you know, in this case, like, you know,

I think Lena Khan is... So back to our original question is, what do you think, Molly? Like, is Lena Khan going to be able to stop a deal between Roku and Netflix, two companies that have gotten completely demolished, completely beaten up. Would they have the high ground to do that?

I think this might be an opportunity for some mid-sized M&A to actually occur. Because if Pelotong doesn't get bought by somebody, it could go out of business. And then do you want to be Lena Khan who's like, or Biden? Oh, yeah, we didn't let you do this merger. And then the company went out of business

and laid more people off. Now, the company's objecting to mid-sized. Like, nobody's objecting to mid-sized mergers. There's going to be scrutiny, but I don't think. Netflix and Roku, forget it. Those are, neither of those are even approaching monopoly status. It is interesting, though, that the insider piece really poohs those rumors, too. And it's like, you know, this is really unlikely because Netflix doesn't want to move into hardware.

I mean, that's a tough. That seems like a sort of an overly simplistic reading that might have made more sense when the market was what it was. And Netflix was in the position that it was, but it might be a lot more. and like owning smart TVs now. I mean, if they do build an ad network, then they want as many customers as possible to feed those ads to. And so,

because once you have the relationship with McDonald's or, you know, Marvel and Marvel's advertising, you know, or the new Obi-Wan's getting advertised, they'll take as many viewers as you got. They want to get people over there. So,

you know, it's a lot of people who you didn't expect to build large advertising businesses have, like Amazon and Apple all of a sudden have very robust advertising businesses because they have such a captured, well-heeled audience. And so, yeah, I just, we're very interested to see what that happened with M&A. I think people have not tried to do M&A because they're so scared of wasting their time and then getting stopped at the finish line that they haven't tried. So like the high ground for regulators. Now I think the high ground goes to companies that

want to do M&A. And yeah, go ahead, Lena Con. Go ahead, you know, Biden. You want to you know, attack American companies at this moment in time during a recession with layoffs, okay, go for it. Let's see what the optics look like. So all this stuff is political. Yeah, it's going to be interesting times. Interesting times.

All right, and then we have an amazing startup of the day. There is no good way to smoothly transition. This was evidently, speaking of ad networks, this was an ad that was served up to one of our producers, to producer Justin. So a little bit of a targeted advertising. Me. I got this. It was her to you?

Yeah, I tweeted this. I got this on Instagram. Yes. This is I, for some reason, Mark Wahlberg thinks this Catholic boy from Brooklyn needs to pray more. Oh. Catholic boy from Boston is our father full of grace. Say, how do your mom for me, J. Cal? Hey, chicken.

Hey, chicken. How's it hanging? Hey, chicken. Say, how do your mother for me? Say how do your mother for me, all right? Say, how do your mother for me, Jacob? Well, at this point, I think we should probably just, all right, I'm going to give you the headline and then we're going to run the video. Catholic prayer app,

Hallow has raised $52 million and has ads featuring Mark Wahlberg that are being targeted to J-Cal, among others, calm for Catholics. Let's get a little Mark Wahlberg fix today. Oh, man, thank God. Thank Hallow. I'm prayed up today. I'm prayed up. Ready? We're going to fight the fight right now. God bless you. Yeah, that's it. You know, God loves the canons. So I actually tweeted this. Maybe this happened to both Justin and I. Justin, do you, producer Justin, if you're on the line, did you actually... I thought you got the ad too.

Did you get the ad too, Justin? I tweeted a different ad this weekend. It went viral. I wonder, maybe producer Justin's not here, but we'll get a check on a producer. Because producer Justin's got come on and talk about the caper of his laptop. Exactly. He's going to be ready for the caper. I got this one this weekend and said, wow. Interesting app, but

amazing delivery. It's so great. He, no, he, uh, prayed up is his new line. So you got to stay prayed up. That's what he told me. Jacob, you got to stay prayed up. I'm like, okay, Lord. John Shealy says, I'm getting the rosary with me.

Oh my God. Okay, but his feet too. He said, do the rosary with me. So you can do a virtual rosary. Like my grandmother got rest of soul would do the rosary. Anytime we did something bad or we got in trouble, she'd do a rosary for us. This is before you could play bejewed, you know, like you're sitting at home and you had your. I was like the grandmother.

I know what's up. Literally take the rosary and each bead was a hell married. Every single thing all the time. I want to get some Greek worry beads. There's a thing. My grandfather got rest his soul on my Greek side. He had these thing called worry beads. And I guess you would say a prayer for each one.

Pull up Greek worry beads. People don't know about this. It's kind of like the rosary. I think that those are in other cultures also, I believe. But yeah. Really? I need to get into some worry beads. But you'll see old Greek men walking around with their worry beads and they just pull like one of these little beans on it, you know, little beads.

And that's it. So this is what I want to do. I want to make this week in startups worry beads. This way in the recession, you have your Greek worry beads. Each one of them is going to give you a foundational tenant of running a startup. So you'll get these and each one will be number. or have an icon on it, remember to understand your runway. Remember to update your investors and you just go through it.

American boy and our noted gang says, Prade Up is common African American vernacular. Our grandparents say it. Our parents say it. And so we say it too. Oh. And Mark Wahlberg. So anyway, but let's talk about this as a startup idea.

Oh, it's brilliant. $52 million. Yeah, exactly. Catholic Prayer and Meditation app. It's like calm for Catholics. Like I said, that claims over a million downloads. It was founded in 2018 by Alex Jones. I'm assuming not that Alex Jones.

Oh, please Lord now. Alessandro DeSanto and Eric Carrechus, who started asking priests and members of the church about the intersection of meditation and faith and found that there's a big crossover. They did $12 million in Series A, have raised this $52 million overall. And a $40 million series B, investors include Peter Thiel. Oh, Fray's Peter. Capital, Sousaventures, and Scott Malpass.

Okay. So it's an alt-right, far-right thing. No, Ben Shapiro. He hasn't started the Ben-Shapiro DeliWire Fund yet. But is it that? It's not that Alex Jones, is it? No. I mean, I'm hoping it's not that, Alex Jones.

I mean, if Alex Jones secures the meditation bag, that's just, yeah, that's just unfair. But, you know, I'm always fascinated that in the top 50 podcast is this Dr. I'm sorry, Father Mike Schmitz. I don't know, the Bible of the year, the Bible in a year. And he's always up there. I guess people like to listen to some podcasting stuff. So it's not that Alex Jones. It's this.

Oh, thank goodness. Bless. It's this. Yeah. No, I intended. Looking Alex Jones. Yeah, he really right. I mean, what do you want for me?

He's a redhead, we got blue eyes. Like, couldn't look more. He looks like. Couldn't look more Catholic. There was a young priest I knew. look like him. Yeah. I mean, it's, I'll leave it at that. You know, as we know, like, product market fit really, really matters. And if you can find a super devoted, no pun intended, audience, and then say, we know that there is a proven market for meditation, for mindfulness, for this,

you know, a sense of achieving peace and, and having these moments throughout your day that get you grounded and centered and, you know, bring self-love. And then you can just sort of say, let's do that. But specifically for Catholics and for the devout, it's like, it seems like built-in money. This is like the offeratory or whatever that was called. Offeratory, you know, basically when you went to church, Catholic church, they had a basket with a long handle on. I know, my grandfather on my Irish side, God rest his so, he was an usher and they would put the basket. in front of each person slowly.

Some people had money to put in. Some people didn't. Some put a dollar. Some put an envelope to, you know, have their donation not be known. And I always just thought, I wonder if I could put a dollar in there and pull one of those fives out. That was always my thought. It was like, is there a slight a hand trick where I can go put a dollar in and grab the five out?

But, yeah. So anyway, there it is, folks. That's a very sweet story about your religious upbringing. Yes. I used to do 605 Mass at, yeah, in Barrage, Brooklyn. I would do it every Saturday, every Sunday with my girlfriend. Love it. There were like six people there.

It was like the people who like, you know, these old people who wake up at 4 a.m. It would be outside of church 20 minutes early and then there would go. All right. There it is. All right. Well, we live in the future. Here we go. I love this app.

We got to get Justin on because Justin had his laptop stolen from his apartment. Justin, you want to come on air and tell us what happened briefly? And then we'll talk about this. we live in the future slash startup of the day app. So Justin, we're in the group chat. All of a sudden, all bedlam breaks loose.

Your laptops are stolen and you go into full Columbo mode. What happens? Yes. Yeah. Laptops are stolen sometimes Sunday night, probably because my roommate didn't lock the door with the deadbolt. Your ex-Rummate, you mean?

Former, now former roommate? No, he's definitely still. my roommate. I love him. He's great. But so once I find these are lost, I file the police report, but quickly notice that this is bedstay. This is not a priority. It's a couple thousand dollars worth of laptops, which I think falls under grand larceny, but still, it's not a homicide. It's not something else. So I realize I'm going to need to do some detective work myself. And so I start pulling up my, find my devices. They're offline for a few hours. Eventually they come up at a house.

So I kind of case that house, but realize I don't have a good approach. I try to go to the police again, say it's at this house. They don't have a good approach. Like you couldn't take the shot is what you're saying? You don't know? Exactly. My girlfriend was on the phone with me and I said, I'm going to go and I'm going to ring on the doorbell of this house.

And she said, please do not do that. So then next day, I see them moving. I'm writing the launch ticker, which is our newsletter. that we send out. And I get an alert that it's, the location's been found, which, um,

and I see it's moving. This is through the software that. This is through Apple uses. Find mine. Now, you, for Find by to work, you don't have an LTE connection on your laptop.

And in order to join a Wi-Fi network, it would have to be one that you were already on. A members of a couple of like those generic like Comcast or like the, the spectrum provider, so maybe that helped. But I think I know that the iPhone Apple tag technology does reach out to other devices. It does. I didn't know that. They found it.

So I wonder if Find My has that same thing because these people never logged on to their own Wi-Fi network as far as I can tell because Apple lets you lock their device and the locks were never actually successfully pushed out. So they were just blocked by the password. They didn't get the message where when you have a device that's missing, you can put a little message and it puts it in a special locked mode. That never took into effect. So I see these devices moving and I'm like, oh man, they're about to be lost forever, shipped off to China or wherever else that they get fenced at. And so I put on my running shoes, start running, eventually find the laptop stop right in front of a electronic store.

I run up, I probably get a foot away from the guys who have it. I see them holding my laptop, talking to each other about selling them. My girlfriend was kind of in the back of my mind. They don't notice you. Well, they see me. I'm sweating, but I'm not paying too much attention. I kind of like try to open up the door of the electronic shop and I realized that it's not open for another 10 minutes.

So at that point I say, I could confront them now or I can wait and just kind of keep eyes on them. a couple hundred meters away, call the cops. The cops arrive in 20 minutes. By that time, the gentleman who stole my laptop have turned it over into the electronic store, either to sell or to see if they could get it jailbroken. But the cops helped me, and I collected them there.

So that's my story. So it's sort of like a magical we live in the future in terms of the connection and the fine might. Good job, not going full Batman. I don't know. I kind of feel like the story would have been, I think for the show, it would have been better if there was a confrontation.

So for ratings and for the show, I feel like you failed us. But you did get my lap. One of them was your laptop. One of them technically was my laptop. I got it back. You did get it back. No insurance.

And I was thinking of you the whole time because I know you like the movie Dread. Yeah. And I was like, I need Judge Dred to solve this for me. Just. Guilty. Guilty. He's waiting.

Guilty the like little conference. information from headquarters and just such a good justice. So anyway, now you can talk about prey. Well, handled. And don't listen to this guy who's like, it could have been better content if you've gotten a giant. Oh, don't get into a confrontation.

I'm having a full on mom freak out right now. Like, mom energy, what is happening? We need to know. I wonder if the Nodys know if somebody in the Nodie crew or producers can tell us how this actually works. Does it actually work that you can find my, I need to know this. If you do find my laptop

and you do find my laptop, does it, and you're not connected to Wi-Fi, does it connect by Bluetooth or whatever to an iPhone, that's part of the Find My Network that then gives you the location. Yeah, I bet it's using some kind of air tanks work. They took that technology from tile.

Yeah, I bet it's using some kind of a mesh network situation. However, what we think, and this is that we live in the future, and this was irresistible today. We had to do Hallow and we had to do this app because we had Pray and Prey. This one is P-R-E-Y. Yes.

That's right. I'm not sorry about that. I laughed at my own joke all day long. Prey is a software and online platform for mobile device tracking, management, and protection available for laptops, tablets, and mobiles. So I guess had this been installed, then he wouldn't even need the Find My, although it does apparently. Yeah, this one's got different features. So what's really interesting about Prey is that it will turn on your camera and your microphone.

So if you are in stolen mode and somebody steals it, you can then basically surveil people and you can track even better. So this is why I think laptops should have LTE connections as a pot, you know, like as a built-in feature. Because I had a Chrome, the original Chromebook had Verizon LTE built into it. What a delight to open your laptop up and just have LTE working on it, like with Google 5 for an extra 10 bucks. Totally. Why do we not have Apple laptops, you know, they sell their iPads with the option of having a cellular connection. Why not put that in every MacBook?

Wouldn't that be the greatest feature ever? Wouldn't you pay an extra $100 for your laptop if we could have LTE based in it? And what if you could open it up and actually put your SIM card in? You know, you order an extra, all these places let you order an extra data sim now. Yeah, that'd be amazing. It'd be amazing. Please do that. But I've been obsessed with this, probably,

because it also does it for Android phones and all your devices. I haven't actually used it myself, but the main feature is location tracking and with active monitoring of device management, the service has automatic reactions to location triggers that alert, its security functions when detected, remote security capabilities, users can recover or wipe information loss or stolen devices. So it's pretty. Groovy. I think people also use this to spy on people. So I'm reticent to...

I know. That's what I keep thinking to. I'm just like, if there's a backdoor in this app, like, everyone can... Well, I think if you install it, you know you have prey installed. Like, it's a system widget. You can't covertly do this and, like, spy on somebody. Like, I know people do this to spy on their exes, like, is a whole thing. I'd sort of rather have... I'd sort of rather have the Apple version. Well, maybe. Yeah. I think if you're a laptop super important, I think having one of these third-party tools is kind of cool.

And then having it automatically connect to Wi-Fi networks, like if you really don't want somebody to have it because, but you could also wipe this stuff and everything's in the cloud. So the ability to remote wipe and then just collect your insurance, I think is the easiest thing. But there you have it, folks. We live in the future. Pray for pray. Pray for pray. Pray for your, for prey. two very cool startups. Thanks for tuning in today, everybody.

If you want to get involved in the live taping of the show, you know what to do. You go to YouTube.com slash this weekend, and you hit the notification bell. Go live around 10 a.m. every day, five days a week. Soon to be seven days a week, which our Saturday and Sunday show. Molly just fell out of her chair.

Somebody helped Molly up. What do with the Sunday show? What do you mean? Well, I'm talking about a live version. Oh, live version. Yeah, I did fall out of my chair. On Sunday, we can pray, Molly. We're going to do it.

was my doing the roadrunner. We're going to do Praya.