This Week in Startups - Dara sets the tone for Uber's next push, Jason's market prediction, Apple's ML director departs, Internet affordability & more | E1455

Episode Date: May 10, 2022

First, we discuss Uber CEO Dara Khosrowshahi's company-wide email rallying Uber behind a cash-generating vision to court investors (6:30). Then, we cover Apple's machine learning director departing because of the company's work from home policies (43:22) and the White House's negotiation with ISPs for low-cost high-speed internet to pair with the Affordable Connectivity Program (57:00). (00:00) Jason and Molly intro today’s news stories (02:30) Jason and Molly catch up (06:30) Uber CEO Dara Khosrowshahi wrote email employees Sunday night stating Uber needs to increase free cash flow to win support from investors (11:13) Embroker - Get an extra 10% off insurance for your business at https://Embroker.com/twist (12:27) Key takeaways from the Uber email (20:41) Dell For Startups - Apply and get up to 45% off at http://dell.com/twist (21:53) Jason and Molly’s thoughts on the Uber email (28:40) Catching up with Producer Nick (32:36) Ourcrowd - Check out the deal of the week at https://ourcrowd.com/twist (33:43) Wrapping up the Uber story, final thoughts (43:22) Apple’s director of ML is leaving the company due to its return to work policy (55:05) Jason makes some predictions (57:00) White House announced plans to boost high-speed internet for low-income families FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood

Hey, everybody, happy Monday. Big show today, a little bit of backed up news, but we spend most of our time, actually, on this huge email, a total level set from Uber CEO, Dara Khazarsahi. This is a big one. Yeah, I mean, he basically looks at what happened last week when they put out tremendous revenue numbers, just great numbers, a great beat for them.

And their stock went down, lifts got crushed, all tech stocks getting crushed. And he's saying, listen, we've got to tighten up here. The public market wants something different than what we're giving them. They want free cash flow. They want to see the profits. So we're going to show them the money. And he's basically outlining what that means practically for the company. And then Molly and I will talk about some of my predictions about layoffs and work from home colliding together and what the next six months is going to look like for tech workers and for companies.

Yes. Spoiler alert. Jason calls a bottom. Or at least a bump. At least a bump. A bumping along the bottom. Which I'm not sure I totally disagree with. I think I think we're pretty close. But I also don't think it's going to be as bad as we all think it's going to be like this is not necessarily going to be a disaster. Anyway, we're going to talk about what it means in the short term. Let's say the summer for the tech industry and the employees who may be laid off and the employees who may be thinking, I'm quitting over this work from home policy, like a high level Apple employee and what it's all going to look like for the next couple months. And then some good news.

The government did something right. Maybe 20 years too late. It sounds like right about government time. It's going to be a great show. Stick with us. This week in startups is brought to you by Embroker. Embroker's startup insurance program helps startups secure the most important types of insurance at a lower cost and with less hassle. Save up to 20% off of traditional insurance today at imbroker.com slash twist.

While you're there, get an extra 10% off using offer. code Twist. Dell for Startups. Visit Dell.com slash twist to apply for Dell for startups and save up to 45% off on select items. And Our Crowd. 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-CRO.com.

slash twist. All right, everybody, welcome to Monday. Monday, Monday. How should we get, Molly? Monday. Warriors one. I wisely gave myself a little stomach bug for Mother's Day, which meant that I spent the whole day.

Thank you. I spent the whole day on the couch watching sci-fi. I've subjected my son to all the Halo episodes on Paramount Plus. You know, I had watched the first one and I enjoyed it. Does it get better or is it sort of like, you know, just serviceable sci-fi? I would go ahead and just start at episode five. Because episode five is the video game. And I was like losing it.

Texted my brother. I'm like, dude, they're fighting banshees and wardhogs right now. Like, the energy sword. It was super exciting and thrilling. And then episode six is amazing. And episode set, I'm up to, they're not all out yet. You really binged, huh? Wow.

You went for it. Well, I had watched the first three already. So I went from four to seven. Watch the first 10, 15 minutes of the new Star Trek. And that's great. And then quickly fell asleep like an old man. Yeah, that's fair. We had a whole day out with the girls on Saturday.

We went to see Dr. Strange. Thursday, but. Oh, you did? See, my plan for Mother's Day was to see everything everywhere all at once. I've seen a lot of people tweeting. Me too. But is it for kids or not? Yeah, I think it is actually.

Like older, maybe a little older. 15 or something, maybe not 12. Well, no, I mean, I think you could take your oldest. I just wouldn't take the twins. Yeah. Yeah, that's what I heard. But I hear it's metaverse. Like, and people are freaking out and crying and having existential moments.

I saw somebody crying on TikTok talking about it. Oh, God, really? It didn't seem like a mentally stable person to begin with. You know the people who, I'm not saying people who cry easily? Hello. I'm saying people who seem deranged who kind of lose it on social media. And they need to make it into content. Yeah.

Yeah, you know these people on social media who just like lose it and attack everybody for no reason randomly? Really? I've heard of that. out of those people. Sometimes that happens. Maybe they have delusions that they're being persecuted or... And delusions of grandeur and that the world's against them and there's a grand conspiracy? Grand conspiracy. I don't know if there's any great, I don't know if there's anybody in our orbit who is experiencing a grand conspiracy and trying to stop the abuse of the angel investor class. So much abuse. So much abuse. I mean, that's what we need to do in the society is get the abuse under

control. Absolutely. And speaking of abuse, we did our 250th syndicate deal. So we abused our 250th founder by dropping money on their heads. All right, let's get to it. Let's do it. Let's do it. Let's do it. By the way, Dr. Strange is amazing. And I am here for the, I think it's the fourth or fifth part of the MCU, phase four or five. This phase four is going to be sick. The multi-year stuff is exciting. Okay, don't spoil it, but I'm excited. I'm not going to spoil anything about it. I really want there to be a double header. I want to do. I want to double header of everything everywhere and then Dr. Strange, like the two multiverse options at the driving.

I just love that we're talking about the space time continuum and, you know, this really, as much as this is Dr. Strange, which one of my favorite characters, it's really Scarlet Witch. I mean, this is the goodness. Basically, the TV show is the, you know, whatever they call that, not the epilogue, but the prologue. The setup, right. Yeah, it's kind of the setup to all this.

And so it's kind of cool that they have Disney Plus. Like, if you don't own Disney Plus and you see this, you're kind of going to be delighted going back and watching, you know, Wanda Vision. Wanda Vision, right. I'm like, I just want to call it this guy, that show was so good. And Loki, too, was also a good setup. These are almost like the prerex. They're just doing like really interesting stuff and mining that stuff.

And then, of course, we have May of the Fourth Be With You, but the Obi-Wan, they're calling it a special six-part series now, like a six-part event, which I kind of like, hey, this isn't just Mandelori. This is like big effing deal. But there's some big effing news. I think maybe starting with this Uber email full disclosure, I was the third or fourth investor at Uber. If you haven't been watching this podcast.

If you haven't watched the last 900 episodes. If you just arrived, which could be the case. And if so, welcome. You are in for a treat. Where you been? Somebody's always new somewhere. That's true. Fair enough.

So after meeting, this is a very interesting. kind of level set email from Uber CEO Dara Kozer Sahi. After meeting with large investors in New York and Boston, Uber CEO Dara wrote in an email to all employees on Sunday night. Sunday night. Couldn't even wait until Monday. No, that's a big statement. Yeah.

It is a big statement on like Mother's Day and Sunday night wrote in and said, all right, here's the deal. We need to actually turn a profit. We need to make money and show free cash flow in order to win faith from. investors, which is so interesting, given all that we've been talking about lately, about the Twitter board and, you know, Barry at Peloton and how to move forward. Let's do a quick catch-up, though, before we get into the substance of the email. The stock, Uber stock, is currently trading at a 47.5 billion market cap.

Last week, we covered their earnings, which were great, right? Revenue was up 136% year-over-year, annualized revenue is something like $27.4 billion, meaning Uber's only trading at 1.7 times. Wild. That's wild. That's wild. That's wild. Right.

Like the faith definitely is not there from the public market investors. And evidently, maybe even from the private market investors, Uber's down 60% from the mid-pandemic high, even as people get back in cars again. Yep. And it's down 45% year to date from $44 a share to $24 a share. Yeah. So it's gotten whacked. And all tech stocks have, I mean, the SaaS companies, Palaton, Zoom. I mean, just even Snowflake.

I mean, a lot of these have compressed. We've talked about it over and over again. That's fine. But what we're starting to see is valuations that are making you go, wait a second, does that make any sense? So what's happening here? We know there's been a market correction and money is coming out of the system. Inflation is happening at the same time.

This quantitative easing has turned into the government actually selling their positions in the debt markets. And so, and we're in a recession. In all likelihood. We had one in all likelihood. The first quarter was negative growth, just like 1% in change. And so we'll see if we have 2% or 1% or 0.5% or 3%. Who knows what negative could be in the second quarter.

The economy constricting. And some of that has to do with the war. Some of it has to do with supply chain. The war is exacerbated the supply chain. Anyway, you have all these headwinds and crazy events going on. But the reality is you have companies putting up a phenomenal, numbers and when they release their phenomenal numbers their stocks are going down

so this is a combination of retail quantitative is using etc etc but Dara is just not going to take it lying down he basically wrote this email to employees and he said after

earnings which remember we talked about last week they moved up because lifts were so terrible he moved the earnings up and he said basically he spent several days with investors in New York and Boston, this shows you, you know, how tuned in Dara is as an executive because he's done this before.

What was he at Expedia before? He was running Expedia, I believe. So he really understands the highly operational businesses in Wall Street and how to, you know, manage customers, partners, investors, employees, all that stuff. But, you know, this, I would say,

is probably the Fidelity's and the Morgan Stanley's of the world, people who own big positions in Uber. And now they're going to want to see something different. They are in a flight to quality. Everybody's going to buy companies or not sell companies,

depending on the situation, like Apple or Microsoft, companies that just print money. And in some of those cases, they buy back shares. And so he says, hey, you know what? We are just going to have to prove it to the markets. And I remember this from the dot-com era.

All of the companies went down together, and then some of the companies then recovered, some didn't, right? Some of them just permanently stayed down. They were not viable businesses. And so what he's basically saying in this email and I'll let you read it is, hey, listen, we just need to be in the bucket where people understand this can be profitable. And everybody knows Uber can't be profitable. You've seen the prices go up.

You've seen the wages go up. All the stuff they said would happen. That's basically happened. It doesn't mean it's going to be software level margins, but clearly they could have free cash flow. I'm going to quickly explain one crucial type of insurance that all startups need. It's D&O insurance. You've heard of this before. you might not know what it is. This is directors and officers insurance. And it helps if somebody does

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go to imbroker E-M-B-R-O-K-E-R-com slash twist and use that offer code T-W-I-T I'll read some of the the kind of like key nuggets from this email

and I think this is a good point to remind people that Uber still I think as a public company has never been profitable so the they had moments of profitability right where they sort of like

well it was based on external investments and selling shares of other external investments so if you net those out they've always been right at break even since Dara sort of took over. Like a year after that, he just got it to this like sort of break even point. Right. And right before COVID, they were like pretty close.

And so now it's like, all right, look, our investors are saying, show us if a business like this can be profitable, what are we going to do? So Dara writes, the average employee at Uber is barely over 30, which means you've spent your career in a long and unprecedented bull run. And the next period will be different and will require a different approach. rest assured, we are not going to put our heads in the sand. We will meet the moment. He said, among other things, investors are happy with delivery's growth coming out of the pandemic.

He really sort of differentiated between these two businesses and talked about the importance of them both. He said they like this delivery thing, but now they want to know, quote, is delivery a good business and why? What happens if we enter a recession? We need Rodara to answer both of those questions with undeniably strong results. Right. He also said, meeting the moment means making tradeoffs. The hurdle rate for our investments has gotten higher. And that means that some initiatives that require substantial capital will be slowed.

Got it. So here's the market conditions. This is great leadership. Here's reality. He's painted reality. And not just the reality of the situation for the company, but the reality for the people who work at the company. You may have never seen this before.

You've only lived in an up market. Something I actually said recently on this, I've said a couple times in these podcasts, like either here or all in or both, that, hey, we've got a generation of founders who've never done a downturn, so we'll see which ones can adjust at this time. So he's defining reality. And he's actually even saying, and your perspective as a 30-year-old might need to change because you haven't experienced this before. But, hey, I can tell you what the reality is like after this. And then he's then starting to prepare them for what the plan will be. So this is great leadership to find reality and then start explaining the plan. And the plan here is when he says hurdle rate for investments has gotten higher,

hey, if we want to start a new business, if we want to start a new initiative and we want to invest in that, invest is a fancy way of saying lose money in the short term to make money in the long term. We're going to have to pick our shots. We can't just decide willy-nilly we're going to start an Airbnb competitor or we're going to, you know, do micro mobility and we're going to, we're going to do scooters again or, you know, jump bikes or whatever, you know, like, we're going to have to pick our battles. We can't have seven wars that we're losing money in.

We're going to have to have to free and start making money. Yeah. A plan for how this investment is going to make money. Right. Like, not just a like, let's try this and see if it works, which is fine when you have happy investors and lots of money coming in the door. But when you don't, you have to be able to say, this is a. how this plan is going to have ROI.

Yes. Another interesting thing about delivery is that he was like, they love delivery, which surprised me because I actually think delivery should be growing even faster. Yeah, that was pretty cool. That was kind of cool. He's like, sure, it's fine, but it should be better. He said, the least efficient marketing and incentive spend will be pulled back. We will treat hiring as a privilege.

They'll be big on marketing at Uber since the beginning. Yeah. I think that was because they were in a very, competitor race. You had the door dashes of the world. You had the lifts of the world. You had a lot of competitors. And so they did spend money. They had money in the bank. Why not do a Super Bowl commercial? Why not do these ad campaigns? Everybody has seen Uber ad campaigns, Lyft ad campaigns, DoorDash ad campaigns, Uber Eats campaigns. You know, maybe those will be consolidated into things that are more effective. So that means maybe radio ads stay, maybe television goes. Maybe outdoor goes.

maybe, you know, influencer ads go up. There's different strategies here that could be more effective and you could track the ROI. So instead of just saying put 10% of our revenue towards marketing, which is sometimes what businesses do. They just pick a percentage of the revenue and just say, yeah, that's a reasonable number to spend. And then the marketing department isn't really looking at ROI maybe as much as they need to. So they could move to that.

This is, I think, one of the reasons why people give Elon a lot of credit. He's used his personal charisma and the product. to kind of sell itself. And listen, Tesla has no natural competitors or hasn't really had a natural competitor up until now, really. Yeah.

And actually, some of those competitors I noticed are doing ads online, ads on TV and stuff. Yeah. I did see actually, I mean, it might be the car that you got.

What's the name of the car you got? The Polestar. They did a Super Bowl ad. Yeah, I saw them on, I saw a TV ad for them. Oh. Yeah. So that was interesting.

And Ford has an ad for the lightning that I think is actually like, well, it's funny because the Polestar ad took a little bit of a swipe at Tesla by saying like, we're not trying to go to Mars. We're just trying to make cars. And it was funny. But then Ford has now Zuckerberg that idea and made this really snotty ad for the lightning.

And I'm just like, you know what? That's such mistake. Polestar because they're like they've got that European DNA, right? They did it with subtlety in class. Yes. And then Ford stopped in there with the big American truck version that's basically like, Like, come on. What you want to do is talk about the value of your product.

So I think one of the cars has this trip. I don't know if it's a Rivian or something. Somebody just went over the top and made a 600 mile range car. It's actually like a really bad idea to do that for the environment and just completely necessary. The car has to be it's too heavy. Yes, exactly. So the weights are working against you for most rides. Like most journeys in an electric car are, you know, 10 miles, 20 miles, 30 miles.

So now you're dragging a 600-mile battery pack that's working against you, right? Yeah. 400 is a sweet spot, I think. I think that probably is a sweet spot because you can... Five-hour drive, man. You go to L.A. man.

You go to L.A. Live. Five-hour drive. And nobody wants to be in a car for more than five hours and not get up. You have to take a bio break and get a cup of coffee. It's true. So anyway, Darrag goes on. We will be even more hardcore

about costs across the board. He is warning everybody. We will treat hiring as a privilege, he said. And then he said that they would be deliberate about when and where we add headcount. So he's not necessarily signaling layoffs, but he is saying you're not getting all the help you want. He's basically saying hiring freeze.

That's what I read without saying the word hiring freeze. And Facebook and meta is doing a hiring freeze. So we'll talk about this in a moment after we do his thing, but layoffs and the contagion that can occur. But keep going. Yeah, definitely. But here's this big super pumped energy at the end. which is, I've never been more certain we will win.

But it's going to demand the best of our DNA. Hustle, grit, and category defining innovation. Some places will have to pull back to sprint ahead. That's basically tipping cards about layoffs or shutting down units or maybe offices in certain places. We will absolutely have to do more with less. Again, we might shut an office down. We might get rid of a department. We might do layoffs.

This will not be easy, but it will be epic. I like that. Easy, epic. You got two ease in there. That's just a great way to get that, not rhyming, but a little bit of that alliteration going. Remember who we are, period. Remember who we are. Good short sentence type, punchy.

We are Uber, a once-in-a-generation company that became a verb and changed the world forever. This is a true statement. Let's write the next chapter of our story working together as pound, hashtag one Uber. And let's make it legendary. Go get it. Haps. Go get it. He wrote this after the warrior game.

I think it's like a boarder game. I bet he did. He's a warrior's friend. All fired up. Listen, if you know anything about this week in startups, you know we love our Dell gear. And right now, Dell has a semi-annual sale going on where Twist listeners can save up to 45% on select items. We love the 39-inch ultra-shop curve monitors so much that we send them to every single new employee here at this week in startups. Dell wants to help startup scale their tech stack because the company is rooted in startup culture.

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I like him being out there. And he also really. Deirdre Bosa, by the way, got this. So congratulations to Jierdra Bosa who leaked this. Yeah. At CMEC. I think. Yeah.

At CMEC. Um, I like that he also signals, Full contact Deirdre. Full contact. She, no, she's like, I don't know what they did, but they told her to go full contact at some point. And I was on. And she was always like very jovial at me.

And she was just like, but what about this? What about this? And I was like, well, if you let me finish. I don't usually do that. I usually just talk over people, but I didn't want to just talk over her. So I was like, wait, if you ask me the question, you got to let me finish. And she was like, fair enough. But I was like one of those contentious.

You're like, huh. Yeah, I like CNBC, but I don't like the like, like, I don't like when I'm just like I'm watching a screaming match. Yeah. Yeah. But he seems to be, if you read sort of between the lines here, I think Dara seems to be saying that they are all in on potentially hailables and taxi, which is interesting.

Like we're going to keep taxis on our platform. I have no clue what that is. And even as I said it out loud, I was sort of embarrassed. I think it means like flagging down a taxi, like old school. Like flagged like you see an Uber and you can be like. pick me out. Okay, so I guess in some markets

that's a term Halibals and someone to look it up for us. But they did add taxis in San Francisco. We know that. So maybe Halibals

just as a general category on a global basis for raise your hand, get a ride. Got it. I think so, yeah. Or it could be code word for something.

Halibals and taxi, delivery and mobility, which I think is the overarching term for get a ride in a car. And he's like, our strategy is really simple. Bring in consumers

on either mobility or delivery, encourage them to try the other and tie everything together with a compelling membership program. Well, I just found a link. Uber subscription, maybe? Oh, Uber 1 is a subscription, yes.

I think they call it Uber 1. That's their Amazon Prime. I'm a member of it. They have not done a great job marketing it yet. But the value profit is you get discounts for rides and upgrades. So you order an UberX, they might send an Uber Black. Yes, please.

Yeah, no, and I think you pay like five bucks a month and, you know, 60 bucks a year. So it's their Amazon's a product. And then you get priority delivery for free. You know how sometimes they deliver two or three things and you're like the last in the daisy chain of Pad Thai being delivered and it comes like cold. Yeah. They give you like straight shot delivery, which I think they call priority delivery. And then I think you don't have to pay certain fees for delivery.

You get a discounted thing. Got it. But I just found a software engineer level two, driver Hallibals when I did my search for Hallibals, the street hell industry, taxis, auto rickshaws,

and motorcycle sharing is a multi-billion dollar industry largely untapped by Uber. The Halables team is responsible for building technology that caters to this industry. Building from zero to one our product offering in the space.

We want the top of the mind choice of any rider who wants to hop on the back of a taxi, auto, rickshaw, or motorcycle. You will have the opportunity to work from the ground up, building and scaling systems. I like it.

So they really are saying we're coming for the, we're coming for every version of a ride that you would get, whether that's flagging down a rickshot or a taxi in the street, calling a car in advance, calling every level of car, a big car, a small car, a crappy car, a fancy car, and a taxi. This is something I think Uber could do a great job of. I think Uber should launch,

because I did this when I was in France one time. I think I did it twice. when I would go to France that I'd be alone I would take a motorcycle from I think Charles de Gaulle to Paris motorcycle picks you up

you don't have to wrap your hands around the dude it's like those it's a second seat that's a little bit higher that has its own grip bar or whatever you hop on the back

of this motorcycle it's got room for your bags in the back and boom you're in Paris in 20 minutes as opposed to an hour and a half or an hour

or whatever you know with the traffic and they zip you through traffic you can split traffic and they're like incredible drivers who are just, I always thought there should be a service I've been pitched on it many times in L.A. and other places of this.

I think they should do it with Vespas that have the second Vespas seat and just design it so you don't have to wrap your arms around the person. That's always the thing that's a little weird. It could be very weird for women as well. It's very weird. For everybody. It's like it's already weird enough to be in a car with somebody you don't know. No, thank you.

Exactly. Full no, thank you. But if you were in a, there are people who are in places where it's a little bit, there's a lot of traffic, and this is a faster way to ground, you might actually consider it. I think it could actually work in some, I could see hips or kids in New York and stuff like that, loving getting a vespita to pick them up and zip them home. Yep. And record time for a dollar or less or whatever.

Honestly, like, much less. Get all those cars off the road and replace a lot of them with electric scooters. Be great. Boom. You're talking about a massive traffic and environmental impact done. Well, and you think about it as an investment, it's like, it would be like a new product for Americans, you know? And so that means you have to educate them. It's risky. That but it could also be exhilarating and fun and you could get behind a new trend where people

say, I don't want a giant car taking me home. I want to save money. I want to save gasoline. I want to have less of an environmental impact. I don't want, I want to get there quicker. Yeah. Because these things just can go right to the front of the line. They're allowed to split traffic. So the Revel scooters and some of those electric scoot, I guess, with the other company, those became a little bit of a phenomenon in New York, whatever. They're cool. I just think you actually ideally need a driver. I think what you're describing is actually the way to make this take off

because not everybody knows how to drive them, not everybody is good at driving them. It's like a little unsafe. This is what the hellable should do. They should just take these. The people who drive these for Uber should park in front of Chase Center and just have 20 of them waiting for the game to come out. They should park in front of whatever the hottest bar

in Manhattan is or Williamsburg. And just if you're driving, one of these, you drive there, and then instead of calling an Uber, you take it, the Uber driver takes theirs out, you take their app out, you tap NFC, or you scan their QR code, you put a QR code on the side of it, boom, somebody scans a QR code, and it joins the car. So for the team, this is obvious, but for the hell ability to see it at Uber, put a QR code on the back of the person's phone or a sticker on the scooter, and if you want to take the ride, you say, hey, you're available.

The person's like, yes, obviously I'm available. and maybe you have like an available sign, you know, take out your Uber app. Yeah. And you just put a light on it that says available. And boom. And whoever gets there first, do you get a code. Oh my God. Just drink.

Think about all these drum producers we have working for us. Think about all of the, think about the three New York City area producers. And they are doing their, you know, because they are producers, they don't drink during the week. They just, they just day drink on the weekends. They're brunching it out. I caught my nephew with three drinks in front of them at brunch this week on a Mother's Day. That's Mother's Day. It's Mother's Day.

I don't even want to know what producer Nick's doing on not Mother's Day. But I saw two sangrias and another beverage. I can't verify what the other beverage was. Nick, you deserve it. It was a red of white and a coffee, which is the Nikki. That's the Nikki special. You deserve it. So you had a red sangria, a white and coffee.

Couldn't decide. Why decide? Just have one of each. And they had a coffee with anything in the coffee. We got two bellies. And I was trying both. They were small cups. Caroffs.

Mm-hmm. Oh, I see. Oh. Two karafs. I love this. That's what they called it. I don't know. That's what they called it.

Correct. I called them pitchers, but they called it karafs. Okay. All right. Well, you have, I'm glad you didn't fall into a crevice when you had your karafe. A kravs. A krav. A krav.

Is it a kraff? Is it a kraff? I mean, I like it. I like it. It's classy. It's pretty great. It's classy. I know.

I was at Mother's Day brunch and I had a karafe. my cafe. What did you put in the coffee? You'd have barely some of that coffee? No, no, no, no. I love a collo in my coffee. Maybe we'll do that for Friday. Everybody get a little collua special.

No, I do espresso martinis. You're not going to be here. It makes amazing espresso, obviously, as you know. You have a tariff cafe? Espresso martinis are a thing. Yeah. Of course. Did I buy that for you?

You bought it yourself? No. You have that. So you make yourself a little tight espresso with that. And then you shake it, ice it up. and you put a little vodka with it? Yeah, stoli vanilla. Ooh.

Yep. Two tablespoons of stoli vanilla. Well, if you're making two, two tablespoons of stoli vanilla, a tiny bit of Kalua, and I have something called Boovery, which is a chocolate liqueur, just a little tiny bit of that. You don't want it too creamy. You want it, like, nice and black. And then, yeah, you shake that with some ice, it's bomb. And you drop three espresso, you drop three coffee beans in it for.

Of course. Look at you fancy. Good father's done in the Holy Spirit. Yeah, of course. Go let's got to stay in the show. This is amazing. Great beans. Three beans.

Hey, what's going on over here? Get three beans. Let me get a Bucca. I mean, I was, I was, if you serve a guy in Brooklyn, like a San Bucca with two or one, I mean, you literally could start a fight. Dude. Like, it would be like the biggest insult ever. It's so funny.

You say this. We went to dinner with Savino took the whole New York team out a couple months ago. I heard about this. I didn't get the bill for this. They hid the bill in accounting someone. I'm going to find that one. Bill, Mike. Savino.

ordered a like Sanbuka or something. And it was, they brought, and it was a really Italian place that we were at. Shout out to Nino's, McDougal Street. What's up? And they brought him out a little Sanbuka shot with three coffee beans in it. And he was like, I've never seen coffee beans in a San Bucca before. And the waiter who's like complete Staten Island, like Highland Boulevard. Oh!

He was like, yeah, the Holy Trinity guy. Jesus Christ, come on. The Holy Mother. All right. So sorry to put you. Lord, let me someday go out to dinner with Savino. That's all I care about.

Oh, it's all I care about. Someday as in next week. Someday as in next week. Yeah, you're going to get a nine. I want Sabino order in the wine. Oh,

yeah. Oh, yeah. I'm doing my seven day tone up this week. I told Savino when we went to Hong Kong. I was like, come to Hong Kong with me. I don't have time, but I want to hit like,

I want to hit at least three Michelin Stars. We did six. So we just demolished Hong Kong. He knows how to live. It's like, here's your job. Find the hotel and book reservations everywhere. Boom. And he nailed it. And now I got precious my chief of staff. So the next trip's going to be even more crazy. All around the world, tech companies are innovating and driving returns for investors. And our crowd is an investment platform that analyzes many of these companies across the global private market. Then they select startups with the greatest growth potential and bring them to you, from personalized medicine to cybersecurity to robotics and quantum computing. and so much more. In state-of-the-art labs, startup garages, or anywhere in between, our crowd identifies innovators so you can invest when growth potential is greatest,

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Anyway, I think it's- I love it here. So let's wrap up the Uber story. Let's wrap up the Uber thing. Yeah. So yeah, I mean, Uber clearly signaling, I think, a couple really interesting things. One is that they see the opportunity to take, like, seize this moment in time. which is like, look, there's a pullback. Nobody's in a question, any hard choices that you make.

And also, clearly institutional investors are like, look, we've been patient long enough, but we're not at a point where we can just continue to funnel money at this thing until you show us that you're willing to make the hard choices. I feel like if you consider the long, super pumped journey, we're now at the point we kind of knew we'd always be at where it's like, Dara, are you going to do it?

Show us the money. It's Jerry McGuire moment. And here's the thing. Great. It's going to be easy enough for them to do. You just cut the cost, you cut expenses 10%. It's not the end of the world. You may have to raise prices a little bit here. You may cut some marketing there, but they'll easily do it. And then if you look at what's happening in the public markets, this will be great for employees because their stock options will accelerate and rise. And I think when you're, I'm looking at the market right now, and not the overall market, but specifically tech stocks, I think, and I'm going to call it right now, we're here. on Monday, May 9th. I believe we are doing what I call bouncing along the bottom. So I don't think there's going to be

precipitous drops in the tech stocks from here because, listen, I mean, it's easy call to make. If they're down 70, 80%, you know, they could go to 80%, but we're bouncing along the bottom to where the cash in the bank at some companies and the revenue of these companies is so great. the cash in the bank is so great that they can flip the switch, make the hard decision, and the company becomes, like, if a company is valued at two times revenue, one times revenue,

or they have $5 billion in cash and they're worth $7 billion, now you're saying the enterprise value is worth $2 billion. If they bought that stock back from the public market for the $5 billion they had, then they'd have a $2 billion market cap. And I think certain companies like Peloton, Robin Hood are going to start to fall into this category, Lyft might even, if they tighten up their business because they're only worth. it's $7 billion. Right.

Then they become potential buyout candidates. Now, if they're going to get bought out, they have to be bought out for a premium. The premium typically is 50%. So what you're going to see here is this is, I think, the bargain hunting summer, the summer bargain hunt. I think this is a unique opportunity between now, May 9th, and call it when we get back in September. Sell and May and go away is what people typically say.

You know, it's going to be a really tough market for the next. couple of months, but I think I am calling a bottom. Now, that doesn't mean it's not going to go down a little bit more. I'm calling the bouncing along the bottom of the bottom. And now's the time to bargain hunt in my mind for the companies you think that can pull off this change. And I think stock buybacks is something we might see. If a company is sitting on a ton of cash like, you know, Robin Hood is or Uber is, and they get to profitability, if you see them start saying, you know, what, we're going to do a buyback of, you know, $100 million or $250 million. Right.

And so you know this is the case because what you'll also see is the CEOs of these companies that may have sold shares earlier and they may have sold them at a premium, now start buying their own shares back. Because if a CEO, we did, right? Yeah, with Daniel. Who was it? Ah, yes, that's it. Nick read my mind on that one, put it right there in the chat.

Okay, oh, there it is. Okay. So this is a classic move. When you believe your stock is undervalued, if the CEO goes and buys 10 million or something like that, you know, 5, 10 million, something that feels like that. In this case, 50 is how much I put in Spotify.

Wow. I'm guessing Daniel, you know, probably had a chance to sell some shares at some point, you know, before the IPO, whatever. Maybe he cashed out a couple hundred million. Because I don't think you can buy your own share back on a margin loan. He might be able to actually. If his margin loan was for a couple billion dollars,

I don't see why he couldn't buy $50 million. So he may have a huge margin loan that he can take if he owns $2 billion worth of Spotify or three. I don't know what his position in Spotify's worth, but let's just pick a number $3 billion. Certainly he could take 10% of that and buy $300 million with the shares. That's the ultimate insider move to do. And you're not doing that in all likelihood to manipulate the stock.

You're doing it to show the stock is undervalued. And I believe the best is yet to go. And that you're not going anywhere, that you're not going to, I mean, you're certainly not going anywhere with that little investment. And then Nick makes the point, I think, and this is true, if Uber ends up break even on a net basis before the end of 2022 and shows a net profit early in 2023 and is trading at less than two times revenue, this is not buying advice, but perpio. Yeah, it could be, it could be the setup. And so I think this is where, you know, the market and all this, you know, headwinds that we talked about, now you have to make changes. And this is where layoffs can become a contagion. And I mentioned this over the weekend.

Right, right, right. You started to see people like fast.co go out of business, right? There was no time to do the layoffs. They waited too long. They should have cut the company in half or by two thirds and still stayed in the game. They didn't. And then you see Cameo laid off, on deck laid off. Who else laid off?

A number of other companies have started the layoffs. Oh, I did a little thing here. Well, we know better had their own problems. Robin Hood laid off. So you're starting to see, when you see layoffs in the 10% or greater, they're significant. 5% is a reorg. 5% means nothing. But 10%, unless it's a huge number, like Google laying off 5% might be a very real number.

But a company with 1,000 people laying off 50, that's a reorg. You're supposed to cut the bottom 50 performance according to Jackwell. When you see 10%, when you see 25%, that means, We want to extend our runway by X number of months. We want to show profitability, et cetera. And so we're going to start seeing those signs. Now, this gives every CEO and every board cover to do the layoffs. Now you've got cover to do layoffs.

You consider them like reorgs in some cases because you know you're not getting rid of the top performance. You're obviously going to start with the least performance. There's 5, 10%. You cut from any company. you don't do it for culture reasons typically, but if you have the opportunity to cut 10%, you're going to do it as a CEO. And so now everybody's doing it.

Now the next phase happens, Molly, which is if you don't do it and it's a recession, then people start wondering, why aren't you doing? And then that puts a unique, interesting pressure on the CEO. The CEO and the management team

have to go to their board. They have to then think, even to their own teams and to their shareholders, hey, the reason we're not laying off is because we are throwing off this amount of cash flow,

free cash flow every month, we're profitable, and we want to hire more people, which is what Google did through the recession. They were hiring people during the Great Recession because they were massively profitable.

So anyway, this is what the summer is going to be. Every company is going to do a layoff or a reorg, cut 5%, unless they have a really strong thesis of why they wouldn't. Right.

Well, unless they've been, you know, super discipline and super lean. I mean, not, yeah, I know I'm like your bleeding heart mom over here, but it's frustrating. It's, it's the bummer part of this is that there are going to be these layoffs and some of them are going to be about contain. I mean, there could be lemming layoffs that aren't entirely necessary and then you're releasing a bunch of your workforce into an environment where it's right, where doors are closed, where there are hiring freezes.

Yes. And so, you know, it's hard not to, it's hard not to acknowledge that. up until now when there were a bunch of layoffs, it was like, look, your tech employees, you know, you've said this. Were there tech employees? There are lots of openings. Like, they're, you know,

you can't fill these jobs, blah, blah, blah, but at some point, soon, probably, these little ducklings who have only ever known a bull run are about to get sent into a world where every door is closed. And that is. It's a distinct possibility. It could be a little ugly briefly. Yes.

The distinct possibility that that Google sheet with the list of the impacted employees who opt into being in the sheet, like, hey, call me if you have a job, here's my title, here's my LinkedIn URL, here's my email. Those may not be wanted by the, you know, those sheets may not be poured over by an HR department somewhere because there's a hiring freeze at meta,

there's a hiring freeze at Uber, there's a hiring freeze at Airbnb, whatever it is, or they're being super selective. So that's going to be the next thing. And so when that happens, then we're going to start seeing this is going to clash into, and crash into, sorry, the work from home issue.

You may have seen Apple. So it's like this is my two-parter of predictions, a three-part. One, we're bouncing along the bottom in a recession. Now is the time to be looking at these stocks and figure out which ones you think will be here 10 years from now. And if you were going to buy them, I think this is going to be the choice opportunity to get into them. And this may, this could last like a six months bouncing along the bottom.

It could be 16 months. You know, usually these recession things are six to 18 months. So just be prepared for that. If you're buying them, you're not flipping them in the fourth quarter of this year. It might be the fourth quarter of next year or two years from now. The next piece is, okay, these stocks are hitting the floor and then the layoff contagion. And now the third piece. Apple said, we're going to go back to three days a week, one day a week now.

Well, that was two weeks ago. And two days a week and two weeks and then three days a week, I think three or four weeks from now by the end of this month. Yeah. There's like, you know, some very high level AI person, machine learning person in Goodfellow is not. He quit over this? Director of Machine Learning. Like basically the guy ran the division. So how do you read this, Molly?

How do you read this person quitting? And a note to staff, he said, I believe strongly that more flexibility would have been the best policy for my team. There were some, this is where like I roll my own burden. watch and I like to read the comments and there were several supplies several replies. I'm not sure. Thank you. Several replies that suggested that he had been there just about four years, meaning he's vested.

So that that could be a part of this. And clearly he had gotten used to a lifestyle that he believed was very effective. I think that they, he probably still thinks he has choice. And he may, right? Like if you're, he might, although I will say the higher you. get up. The more expensive you get as an employee headed into a recession, the harder it can be for you to find a job. But I don't, I mean, he may just literally be like, I don't want to work like that. Right. So. And invested. So I don't have to. Here's my read. Yeah. Apple,

obviously believes in work from the office. They believe that's how the magic happens. They want to, they want to win this battle with employees. The secrecy. Don't forget the secrecy part. That apparently is a huge part of why Apple wants people in the office because it doesn't want to leave in the office. Yes. Like, you know, maybe some work from home, Supreme Court documents to work from home, right?

Like now that place is going to be locked down and you're not going to be able to leave the building with anything. Right. So, and it's hardware and design is a big part of it. But putting aside any of it, I think a lot of people believe that people are not working as hard when they're at home. And we can debate it.

I'm sure there are people who are. goofing off at home, and I'm sure there are people who are crushing it. And then there's these other factors, security, hardware, design, philosophies. I think what's actually happening here is Apple is challenging the employees. And it's a, A, a loyalty test, and B, a way to avoid having layoffs. So they want to like, have people volunteer. People will volunteer. If you say everybody's coming back to work,

there's a certain number of people who left. You know, if I said everybody has to be in San Francisco, I lose you, I lose Ashley, she moved up to Napa, you know, like people moved all to different places. And if I said we have to be in once or twice a week, I probably lose nobody, but people might be like, you're going to pay for my Airbnb if I have to stay overnight, are you paying for my Uber?

Like, it'd be a whole thing. Like, do I get paid for my commute time? All these conversations would start to come up. Which I, I saw some Apple employees kind of lobbying, like, are we being compensated? It's like for your commute, no, that's not how the world works. I mean, the world didn't, but now there is this question of like, wait, this is a lot of time that I'm essentially donating to my company. Hey, you chose where you chose where you wanted to live.

Yeah, right, but I mean, it's on the table. But if they moved, right, like stuff is on the table now that didn't used to be on the table. And I do think the idea of like forcing the question makes a lot of sense in that regard. Because Apple's probably like, we don't want all that stuff on the table. Right. This is the deal. It's a power move. And I think they would love to cut 10% of the staff and be more efficient and not have to do a layoff.

And like if people push out buying an iPhone because of the economy, because they're behind in their payments or whatever, they say, yeah, I just keep an iPhone for one extra year now because I just want to save a little money. I don't want to spend the $1,400. So now. Yeah, yeah. And you're like, they don't have to. It's like, well, if they want to keep showing the earnings they have, getting rid of some. high-priced employees. Yeah, that actually does help the bottom line.

Yeah. And if those employees are not the ones who are going to be, you know, shoved out the door into a brutal job market, if it's like, look, you're the guy who's vested, you made a crap ton of money because a machine learning is really like, and you don't want to come back to the office, fine. I don't, I do think it's very interesting that that guy tweeted about it. I think, you know, the sort of because I'm,

did he actually tweeted or did his, that was a reporter. You know what, actually he didn't tweet about it. You're right. That was the reporter getting the, internal note that said this would have been a better decision for my tape. Fair. Good point. Good point.

Because I think leaving loudly in that regard is not in your best interest. Somebody leaked it to her. So obviously, he wanted it out there if he did that. And he said it. And, you know, so it's, it's going to, I just think it's a fascinating moment in time because we're going to find out what businesses can work remotely and what can't. Like it is so true that a hardware business, I mean, at least some people have to be, you got to like see it. then there's a question even about a software business,

how collaborative do you want to be? Whiteboarding, all of that stuff. But then there's the other question of like, my God, is real estate expensive? And so if that's a cost that you can cut, are you going to be better? Like, I'm just so interested to see what this all, what all this data looks like in five years.

That's actually going to be very interesting. You know, both models clearly can work. We have not seen an at-home model or work-from-home model create a Google or Apple. There's WordPress, there's Envision, you know, work from home companies that have

been and work from home forever. But they're not trillion-dollar companies, they're not $100 billion companies, you know? They're unicorns, so we know a unicorn can be made, okay, checkbox. But could you make Facebook? Could you make Tesla? Could you make Apple? Could you make Google? Most people believe it can't be done. Now, could you operate them in an emergency

remotely? Of course you can. Right? They're already built. They're already at scale. And obviously a factory and an Apple store are different. So put that on the side. But we're talking the creation of the iPhone, the creation of the model S, the creation of Google, you know, search or Gmail. Could they be done remote? Well, obviously the hardware stuff that exists in the real world.

The answer is no. You have to be in a room. You're building it. Portions could be, software could be. And then the question is only could like a Google or Amazon level business, the virtual parts of it. God, it's so, it is just such a. fundamental culture question.

Because if you look at those companies, they all have a lot in common with a cult. Yes. And it's really hard to create. I mean, don't get me wrong. I have a cult like devotion to launch. But it is really hard to create that sense of connection

when people are at home. It's like there are good things and bad things. You know, people are finding that they're a lot, it's easier for them to say things to their, like meetings are more equitable because you don't have that sort of in the room power balance thing. So people of lower level feel more comfortable

like sharing their opinion in a meeting. And previously they maybe wouldn't have because they were physically intimidated. This is why I think the Zoom boxes should be based on, the size of the Zoom box should be based on your, whatever your salary is, that's the size of your box. That's the size of your box. It would be like one of those heat maps.

You know, when they have stocks and the, you know, they show the market caps of them. Your opinion just mouths more. Your opinion is based on that. Your purple aura says, what you say matters more. But so like some parts of that are good. But in terms of creating like that sense of, I mean,

in order to program somebody, you need to get them in your space and feed them your drinks and have the party and, you know, like have the club. And so can you recreate that four times a year? I think is a real question. Can you get that like, you know,

devotion? That, that esprit to corpse, you know. That is free to corpse. Can you build it virtually? And you know, like I, I feel we have a different type of,

enthusiasm at launch and inside as virtual companies than we do in person, it's much less the relationship between us and more the work and the output that we're doing. And then people have, I think, happier home lives. And I find it's easier. I feel like people are more content in their life outside. They're outies, as opposed to their inies, going back to Severance. So I feel like the inies aren't as like sacrificing their outside life. Therefore, they don't resent the company as much. Whereas I felt people who had to come to an office,

there was a sense of resentment in some people. My family's at home. I'm missing dinner with my kids. I didn't get to drop my kid off at school because I had to get to the office for an early morning meeting. Some of my nanny had to drop them off or my neighbor had to pick them up. I'm missing that.

So I kind of feel like for me, I like the remote thing in that I like having happy intent people working for me. And we're not making a car or a phone. We're investing. It's slightly different. Also, we work so much more. I think you get an extra hour. Remote work you get at, depending on what the commute.

used to be. And that was a big, that actually is how I ended up working from, I was working from home for three years before the pandemic started. And a big part of that reason was because we were sort of trying this experiment where I would go to San Francisco. And for me, that was a 45-hour,

45-minute minimum drive each way. And the argument that I made is that that's just a, you pay me too much to be offline for an hour and a half a day. During, you know, rush hour of news and output. Right. Like, that's just, that's not a good use of your money. Whereas if I'm at home, I'm going to be working those hours. And we have data that shows that, like, most Americans ended up working, like, 30% more hours.

I mean, that might not even be ideal, but people are working up to, like, 11 hours a day. Because you just, you just can. Yeah. So depending on. If you enjoy your job, it's like, well, I'm awake and I don't want to stream something. I already worked out. You know, basically that two-hour commute, which is probably average. If the two-hour commute, I think, probably gets, I think it becomes work or it gets split 50-50.

Right. And I'm okay with that. And honestly, so then depending on again, like, this is why I wonder what that five-year ROI is going to be, how do you measure productivity? Did it go up? Mine certainly did. When I went full-time remote, way up. I don't know that I could do as much as I'm doing right now if I had to commute.

Yeah. And my commute's 25 minutes, 30 minutes. It wasn't that bad. I mean, in the pandemic, I was doing it. 22. It was pretty crazy. Easy job. Actually, I kind of liked it because I would be listening to the news or a podcast or audio book on the way to work and on the way home. It kind of gave me like a a little decompression moment. I kind of like that piece to it, but I realize not everybody is privileged enough to have a 20 minute commute. Some people have two hour, you know, whatever my 45 total

minute a day. I kind of enjoyed actually. It gave me like a little me time. I think that's not the worst. I do miss that time. I like the car time. I do enjoy that time. I do enjoy that time. Yeah. It was like, but then if you missed your kid's thing, it kind of sucks. All right. Yeah. So anyway, this is, I think, my predictions. Bouncing along the bottom, the winners are going to emerge.

You'll be able to identify winners by profitability and the change in unprofitability to profitability, stock buybacks, either by executives or, you know, the company doing them and the layoffs. And then layoffs are going to be contagion like over the summer. everybody's going to rebalance everything. The job market is going to be very different at the second half of this year. So people who felt they had three or four different job offers might only have one or two. I'm talking about a sought after person

who easily had a competitive market for their services. They may only have one or two. And yeah, maybe I don't think salaries are going to go down, but I don't think you're going to be able to extract that extra, you know, I got three offers. So, hey, you know, this is what I need. kind of moment and then somebody would be like, okay, fine, we'll pay it. I think that's going to go away because people are like, you know what, we'll get by.

Yep, we'll get by. We don't need to be in a dog fight for your services. And so that will be good for startups too, because I do think that there'll be some number of employees who are like, I don't want to, if this startup allows me to work from home, so this machine learning guy and his team, the members of his team are going to be like, you know what, we can go work at this company, you know, WordPress, Matt Mullerwegg's going to let us work from home. Great, we'll work from home.

Right. I'll go there. Oh, he doesn't pay as much as Apple or the options aren't worth as much, you know, whatever, the RSUs, Apple can be more generous. Okay. I don't care. It's working from home, you know, I want to ski 40 days in Tahoe. I want to set my own schedule, you know. Different people have to be different points left.

And it will just, it will become part of a workplace culture question. Some places have this. Others have this. You may have the choice for a little while, but I will, the only thing I will add to your prediction is if you're thinking about switching jobs, lock it in now. I think it's probably good advice. All right. Lock it in. Good news as a result of bipartisan legislation.

Here we go. True story. You know how we were pretty up this all the time. Did you say bipartisan? What's that? Yeah. Yeah. Good news related to bipartisan legislation, which was only barely bipartisan, let's be

honest. But you remember how President Biden actually managed to get an infrastructure bill passed and it was a lot of money. As a result of that infrastructure package, there is, going to be much more availability of high-speed internet for low-income Americans. Okay. Explain. How do they do this?

Amazing. 20 internet services have agreed to cut prices or increase speeds to provide eligible households with affordable high-speed internet. They include providers that cover more than 80% of the U.S. population, AT&T, Comcast, Verizon. It means they'll offer plans with speeds of at least 100 megabits per second for $30 a month. to households that qualify for this affordable connectivity program. This is, of course, as I mentioned, part of this trillion-dollar bipartisan infrastructure bill that passed. And this will be eligible or available to almost 50 million households,

48 million households that have an income at or below 200% of the federal poverty guidelines. And this is a huge deal. How do they know that? You have to apply to Verizon and tell them your household income? I think that probably, and some, somewhat unfortunately, the federal government will operate this affordable connectivity program. And then it'll just be based on your tax returns. No, actually, wait a second.

I'm reading here. Oh, so you can get accredited through a government site. That's good. And it says it's based on income level or participation in government programs like Medicaid. So if Medicaid, so that's a smart idea. If you're low income enough for Medicaid. Did they call them food stamps anymore? I think that's.

They call them SNAP. SNAP benefits. S&AP. Got it. I know that food stamps was considered a, like, I don't know. Now they call it SNAP or food stamps because people are very used to food stamps, but they gave it a sort of less like loaded name, I guess. Yeah, I guess it was like shaming people that they were on food stamps. I remember when I was a kid, people on food stamps were shamed by it.

So if you have Medicaid or SNAP benefits, I guess. So 11.5 million households have signed up to receive the ACP benefit. Wow. That's amazing. It's, I mean, this is a huge deal for people who do want to work remotely, have some, you know, or have like a child care or just like you can't, I mean, imagine if you're low income in America and you want to start a business. And the thing that is literally holding you back is access to broadband internet. We pay like the highest. I think the United States still pays more per megabyte than any other developed nation. Like our cost, you know, it's terrible. Our cost to speed situation is terrible. And it's because we just don't have enough. competition. You know, this would have been great 20 years ago. I have to say this is

the fact that it took the government 20 years to do this is like just shows how dysfunctional and gridlocked our government typically is. I know. The great paradox here or irony

is that because of Starlink and there's two other competitors that are coming, there's an independent one and I think Amazon's doing it. So there's going to be three satellite-based low Earth

orbit satellites, which means they're really fast, as opposed to the old slow stuff. They're going to have three of those. Those are all going to be $100 and dropping a month. And they're going to be really fast. And you can use them anywhere. Then Verizon and other 5G folks are doing 5G to the home. And then cities are banning like single access points to buildings. So there's that legislation that I think just San Francisco, the Bay Area now did where

you, you know, if you put the fiber into the home, you can't. like block other people. Right. So what's going to happen here is this is going to be great for that group of people. And at the same time, it's going to be a dogfight in pricing, I predict. And I think most homes will, most, these things are going to become so cheap that most homes are going to buy two different services because it's that middle class homes and above, I think are going to buy two services.

So they're never down. That's how much our cup will runeth over. People are going to have a satellite and a fiber line or DSL. They're going to have 5G to the home and the satellite or 5G plus the landline. So people are going to have two of these things. I think it's going to be the, and if you think about it as a home, we have five people in a home. Having like two 30 to $50 services makes sense. Mm-hmm.

You know, like. Yeah. Because you want to be able to avoid congestion or have like, you know, have the halo streaming on this side and the work stuff on this side. Yeah, no, I agree. I have had up until five months ago. two high-speed internet services running to my house for redundancy. Yeah.

Well, I just, and the one, and then the home one for redundancy. So they were both plugged into the back of the box in case someone, you know, if Comcast goes down, AT&T kicks in, it would automatically fail over. Yeah, that automatic failover routers are dope. I think everybody's going to have those. It's pale. It is P-I-N-P. But yes, you're absolutely right.

Like we're on the cusp of the competition that would have made this irrelevant. But we took so long to either enable competition or give people to spend benefit that now it's coming not too late for people, but it is irritating that it didn't happen to. It's like they're going to solve the problem right before the problem is solved. Right before, you know, capitalism solves the problem, exactly. Yeah, I mean, listen, we love to, and I think there's a time for both. You know, I, I think these. We're not there yet, so.

Well, you know, it feels like there should be a little bit of government intervention here. if the prices aren't coming down naturally because of competition. As a competition, exactly. Yeah. So you have to at least double click and find out why they're not going down and what's being blocked and why. And I think other folks, because the whole, I'll tell you why I'm not 100% free market on this one, because there are edge cases where people who work in rural areas, people who are low income. Well, and just how hard it's been to get fiber to the middle of the country.

There is no infrastructure. Like, you can't really... We have a big country. You can't run fiber. You can't run fiber to farms. I mean, it's just not possible. The farms would have to pay $100,000 each to lay, you know, at least $100,000 each to lay the distance between these things. So it just strictly not possible.

Yeah. Agreed. Totally agree. But also the importance in society for this. So I would say, you know, deprecating the post office and moving some of the post office budget towards this would be another. great use of funds because who wants like why are you going there well i i believe that the the the post office should be a one day a week service two day a week service not a five six seven day a

week service it should be like a backstop against the free market services and the fact that it's a five or six day a week service is why everybody gets a free ride and you get so many of these free flyers and real estate agents sending you stuff that gets thrown away. It's terrible for the environment. It's, and, you know, I'm not saying those people should be fired. They should be reassigned and they can be given pensions and, you know, a soft landing. So I'm not cold-hearted about the employees there. But just think about it from first principles.

Would we create the post office today as it is currently, would the United States create the post office today? The answer is no. Amazon doesn't use the post office most times. they're using their own services, other ones, we don't need it. So once a week, you get your post. And if you want something faster, well, then sign up. I just went through the exercise of taking every bill and making it E,

an E bill, right? That relies on broadband everywhere and affordable access to the internet. But yes, there are a lot of infrastructure that would have to, well, it also relies on digital, or, you know, relies on digital literacy. A lot of things would have to be. be in place before you could do that. That's why I said one or two days a week. And maybe in rural America, it's three days a week and in cities it's one day a week.

Yeah. Like, there's somebody living in New York City needs seven day a week, postal service, six days a week. I'm of the opinion that we can afford both if we make hard choices and get disciplined, but. Well, what could we do with that money? That would be better served. Well, I think we could use the post office for more things, right? We have a globe. We have an internet.

We have a national infrastructure. of post office. So that people have been talking about, for example, using the post office to provide basic banking services so that for the unbanked, you could do some banking

at the post office, which used to exist. You could use that infrastructure for potentially more things. Is the government so bad is executing? That is very true. All right.

So that's our Monday news wrap up slash government redesign session. There you go.