This Week in Startups - Downtown Josh Brown & Michael Batnick on Disney+, Peloton, Knicks, podcasting, markets, & more | E1496

Episode Date: June 30, 2022

Today, Jason is joined by the hosts of “What are your thoughts?” Downtown Josh Brown (CEO of Ritholtz Wealth Management) and Michael Batnick (Managing Partner at Ritholtz Wealth Management). They discuss the Knicks (1:22), Podcasting (14:25), markets (26:20), Disney (37:52), and more. Finally, Jason takes some audience questions (44:50). (0:00) Cold Open (1:22) Downtown Josh Brown & Michael Batnick join Jason: catching up and talking basketball (13:10) Coda - The All-in-one doc for teams, get a $1,000 credit at https://coda.io/twist (14:25) Audio as a media business (18:50) Why can’t the Knicks get great young talent to want to come? (20:35) ActiveCampaign - Get 10% off your ActiveCampaign subscription today at https://activecampaign.com/promo/twist (21:46) What’s it like being involved with the Warriors? (26:20) Market dynamics (36:25) LinkedIn Marketing - Get a $100 LinkedIn ad credit at https://linkedin.com/thisweekinstartups (37:52) Building a Disney position (44:50) Questions from the audience: Jason’s thoughts on RobinHood (59:12) Most exciting recent investment for Jason (1:06:30) Last question (1:07:30) Outro

Whenever finance gets super complicated, it's probably, there are some things that are complicated, of course, but whenever it gets super complicated, it's probably because somebody's running a grift or a scam. When people started to explain to me, oh, you can get 15%, 20% by loaning at your Bitcoin, I was like, okay, explain to me the scam. What's the grift? And they're like, not a grift. I'm like, okay, who's paying the 15% interest? And they're like, no, what's the risk that I'm not seeing? Exactly. This week in startups is brought to you by Coda. Kota is the all-in-one doc for teams. If you've got a stack of niche workflow tools,

or if you're buried in docs and spreadsheets, Cota is the dock that brings it all together. Startups can get a $1,000 credit at coda.io slash twist. Active campaign. The hardest thing in business is turning a lead into a customer, into a repeat customer. Simplify the process and start creating repeat customers with 10% off your active campaign subscription today at active campaign.com

slash promo slash twist and LinkedIn marketing. To redeem a free $100 LinkedIn ad credit and launch your first campaign, go to LinkedIn.com slash this week in startups. All right, everybody, I've quit this weekend startups and all in, and I'm now working for downtown Josh Brown. I'm Jason Kalakanis. Welcome to hire me. Welcome.

Thanks for hiring me. No, explain what we're doing here, Josh. Just an experiment. We're doing an experiment. We are simulcasting. Is that the right way to say it? We're dual casting, I guess. Dual casting.

Dual casting? All right. So here's what's going on. We are live on your channel. Okay. This week in startups, yeah. Yes. And we're live on the compound, which is our channel.

And I think there are live chats going in both places. Yeah. I think they're separate though. I don't think my people are mingling with your people. I'm not 100 sure about that. They're separated. So there's no back and forth. But we can on Restream see both coming in.

Yes, that's pretty cool. That's pretty cool. I don't know if the comments are coming from our folks or yours. That's a good question. I think we're purple. They're gray, I believe. Oh, maybe that's what it is.

Yeah, look at that. Anyway, yeah, yeah. In the Restream interface, we can see both of them. I see a lot of our friends. Yeah, let's go purple. Yeah, exactly. Well, I'm just tweeting. You guys have been having.

incredible. I don't know how long you've been doing your live streams, Josh and Michael, but when I tune in, you've got 500 people, 1,000 people. We get 3,400 pretty regularly now, but this new streaming live... We're better looking than you. There is that. There is that. I mean, Josh and I, I feel like we have pretty close hair. We're both

whatever, 67%. We're trying to... I don't know what's going on to that. A little bit of a dip here. Michael, I don't know what's going on with your hairstyle. I'm at zero. I've been at zero for a while, then. Well, I was watching, you guys had a show where you were talking about there's a pill coming. So Josh and I can get back the two inches we lost here. Yes. That's going to be pretty active.

And Michael can OD on the rest of the bottle. I don't think it's going to work for you, Michael. I think you're too far gone. I'm done. I'm done. So we think that our audience is primarily individual investors. And then probably like, let's say, 10 to 20% are professional investors and or financial advisors. We've a lot of Fed officials.

Fed officials tune in. A lot of Fed officials. We know. we know when we look at Google Analytics that this skews a lot younger than anything else that we do and for those who are older than me, for the young of heart, age doesn't have to be biological. Who do you think is the core audience for this week in startups?

Yeah, it's very clearly people running startups, capital allocators in the private market, and then fans of tech writ large. So if you just were fans of apps and technology, we talk about general tech as well. So I think there's some crossover here, but it's probably 25% or something to that. And I think there's a good way to introduce people to both channels. And I'm watching your channel and your experimentation with the YouTube live audience.

So this weekend startups is over 10 years old. We do six episodes a week. And it is a bit of an institution. We sell out all the ads. It makes millions of dollars a year. I just have Molly Wood as my co-host now. I got her from Marketplace. And so we got nine people working on a full time.

but we started this live on YouTube because I got obsessed with a YouTube live channel called Knicks fan TV. I'm a diehard Knicks fan. Yeah. Sorry. We should talk about that. I know. I don't know what's going on this off season,

but at least we got some. We're going to get them tomorrow. I don't know how great it is, but we're going to pay $110 million. Him is not that good. Yeah. I mean, he seems like a great, gritty point guard for $15 to $20 million, but I don't think for $25 million.

Jason, we don't know. He plays a good in Luca. No, we know. He's a good player on a good team and we're a B. So we don't, you know. I mean, there's no way we can go down, right? But I just love R.J. Barrett. I'm really watching his development.

I think this is going to be the breakout year. I love a lot of our bench, you know, quickly, Grimes, O.B., Sims, I don't know if you're watching Jericho Sims development. I think that kid's got potential. Big fan. He's a monster. He's a monster. He's a child, but he's a monster.

He doesn't know how to play basketball yet. He's like a few years away. He knows how to put the. to dunk the basket and to block the shot. And he's so high in the air. And I think Obie Toppens the other one, if we just do player development, I think this team's,

you know, got great potential. It seems like a lot of the teams that have made it did it through drafting, right? Like savvy draft. I'm hearing, Jason, I'm hearing way too much optimism.

You've been in next time for a long time. What is this? That's the problem. I was in the last row of section 324 during the Ewing era. I was there for the Larry Johnson four point play. I was there for Spreewell, the Spurs loss.

I watch this first celebrate. So how are you still glass at full? I don't even understand. Well, you want to playoff series in 22 years. I guess. I'll tell you why. I'll tell you why. I'll tell you why.

I'll tell you my plan. I have done okay investing in private market companies that sometimes go public. You're an optimist. And I made a 10-year plan. I looked at all my angel investing. This year I'll do, you know, put $100 million to work in private markets with my team of 21 people, right? I'm pretty active angel-in-year-old. investor in early stage companies.

And there is an outside chance if I hit two more Ubers in my life and a couple more of those signals and doubles, that I would have enough money. I could hit trace commas and lead a group to buy the Knicks. This is the last thing.

That's not for sale. They'll never sell it. But there's always a possibility that you know, Dolan could tokenize. His music career. His music career could go really well and the downtown brand but he's got i think his band is called downtown something his his his i will stream his music on repeat for hours a day if that's what it takes i would literally listen

to his music for an hour a day if he would sell me the next i will book his band for every bar mitzvah on long island absolutely to get him out of that building straight shot just crushing it out there jd in the straight shot so i you know i don't have an exact format for here but i thought maybe taking questions from the audience and going back and just talking about markets, because I watch your show to give people a little idea of what the compound is. How long have you been doing? Is it under a year now? Or is it hit a year? It's not that long, but it's more than a year. 2018? I think we launched in 2018, but we didn't start hiring actual staff until 19. And so we, so there's a lot going on behind the scenes that makes the show look much better than it would be if it was just me and Mike. trying to figure out YouTube and podcasts. So we've got staff and they are incredible editors, videographers, audio engineers.

They just social media people. And we've made a big investment because the feedback that we get from our clients who are watching our stuff and listening to our stuff is that it's really like become part of their routine. And, you know, when you have people managing money for you and giving you financial advice, It's not realistic that you're going to talk to them every day. But they don't feel the need to because we're giving everybody so much information about how we think and what we're debating internally.

So it's like a really great combination of building a fan base who will eventually become clients and talking to existing clients and friends of the firm all in one package. So we're really enjoying doing it. Contrast it for me, Josh, to your CNBC. hits because you're still doing that. Yeah. How is this different, this medium? Because I was doing CNBC like every other week for a while.

And we got to show the stage a couple times, I think. And so it's very different, obviously, podcasting. And then podcasting is different than YouTube live streaming. So I guess it's like three buckets there. But for you, how does your performance change? So you can relate to this. Your show All In is routinely every week, one of the top business podcast. in the world.

And you have a rapport with that crew, and it's the same crew pretty much, you know, every time, I know every once in a while people can't make it and you throw some new voices into the mix. But like, there are just people that you can almost like, Michael could probably explain it better than I can, but there's like a rapport that enables a much better conversation sometimes than when two people who barely know each other are on a Zoom or. you know, two different studios. So, you know, I feel like the podcast, I feel like the podcast formula is the winning formula for pretty much every topic under the sun, whether it's sports, history, pop culture.

So for finance, it's a layup. It's people that understand each other's differences and similarities and they know when one is finishing a sentence, the other one's beginning. It's like, it's just so much. It's like team basketball. It's like being the Warriors or something. I feel that way. and

Michael, what do you think about that? Yeah, I mean, TV is a tough format. You've got 20 seconds to make a point.

It's all about what's going to happen by the end of the day. It's just it's hard to, it's hard to get nuance in there. And, yeah, it's just a tough format, I think.

Yeah. Yeah, I think TV's great for real time breaking. And that's a lot of what, you know, what we do in financial media because the market is the subject. And the market is constantly moving.

So that is important. But then there's like room for later in the day or early the next morning for people who are commuting to work or riding a bike or whatever going for a walk. And there's no need for real time. The market's closed. And like let's try to like figure out what's going on together. So that's where I think podcasts fit in. It's not either or most people in the middle of the day aren't consuming a podcast if the market's open because they're paying attention to what the market's doing. So I feel like it's just another day part.

that live TV in finance doesn't really address. There's also something has Shark Tank on at night. There's also something to the audio format and I learned this from being a lifelong Howard Stern fan where you feel like you know every character on his show.

Absolutely. You take them with you where you go and I'll like, if I listen to an old Howard Stern bit, I will remember oftentimes literally where I was in the car when I heard that the first time. I could tell you the first time I heard Howard Stern when I was 15 years old in Brooklyn and a friend came over and said,

you have to listen to this tape. It's Hill Street Jews, and it's a bunch of Hasidic guys playing the characters of Hill Street Blues, the old TV show. And it was like contraband to have tapes of Howard Stern in the 80s to listen to when he was on the in the afternoon. So just taking this a step further, I heard Daniel Eck give an interview about the power of audio. And he made this point that really resonated with me.

If you think about all of the mediums, television, movies, a book, like any way that you get content. So newspaper article magazine, take all of those mediums. The most true medium is audio. And the example he gave is there were tape recordings of the Beatles in studio.

I forget what album they were recording. But in between takes, they're legitimately having conversations about nonsense, what's for lunch today, why was John late, whatever. but when you listen to that with your eyes closed it's like you're in the room with them

no other medium so when you watch a movie the director makes choices what angle am I shooting this from what what coloration you're being manipulated it's magical yeah right if you're a startup having a disorganized team is going to kill your business you need everybody to be on the same page And as an investor, I see this all the time. You must adopt a right first culture, especially in this remote world, and use great structure in a beautiful Coda page.

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In fact, we put our 100-point checklist on CODA. So just go to This Week in Startups.com slash SC. You can make a copy of this. You can do the checklist yourself with your internal team. You can expand it. You can make it a 200-point checklist. You could make three sub-checklists underneath some of the important items. So join the Productivity Revolution and sign up for Coda.

Head to coda.coma.com. To sign up and get $1,000 in startup credits, huh? How great is that? Voice is voice. Like, if you're listening to the three of us right now, you could conceivably be in the room with us, and it's all true. There's nothing, you know, there's nothing disguising what's going on. It's the most authentic, you know, of all the mediums.

And if you think about what's happened in journalism, you know, we look at the New York Times, we look at Fox, MSNBC. Everybody seems to have picked aside. everybody's got an agenda. You layer on link baiting on top of that. You layer on their desire to get subscribers by picking aside. Like the New York Times felt like left moderate, but now it feels like it's MSNBC. And then other people feel like they're going super far to the right to catch up to Fox.

And it's just gross to even click on those links. Like every week here in Silicon Valley, we have another tech company when the New York Times is just dunking on them and trying to destroy them. The away founder with that luggage company, they got destroyed the woman who ran that company. They just do these kind of hit pieces in the New York Times. And then I had the guy from Cracken, the guy, Jesse, who they did a hit piece on like last week. And he seemed completely reasonable on a podcast. And so I think the audience is starting to figure this out as well. It's like, oh, Joe Rogan interviewing somebody.

Yeah, I can make my own decision of what I think of Jordan Peterson or what I think of Sam Harris or whoever. And I don't need a journalist at the New York Time to reframe it for me and do those. edits like the Scorsese is doing to, you know, make you feel emotion, I think the New York Times is now making those edits. They're making the quotes kind of lead you in a direction. They're leading the witness. I kind of see a push and pull there. Like, I heard Ray Dalio talk about the Wall Street Journal had been going very in depth on Bridgewater and not everything they published was flattering. And Dalio in response started LinkedIn and he just started saying, rather than hope that my message gets out through a reporter,

I'll just start writing my own LinkedIn column. And it's been successful for him. And one of the comments he made, not 100% sure I believe this, but the media is part of the problem with America because we have no heroes anymore. The minute somebody accomplishes something, the instinct on the part of the press is,

how can we rip this person to shreds for clicks? Now, so that's one side of it. The other side of it is we've had incredible journalism that has probably saved investors a lot of money by being skeptical. And the Ferris example. John Carrey, Roo. Yeah. I mean, so like the you need, you need the Wall Street Journal and the New York Times to support journalists who are going to be, I don't want to say cynical, but maybe skeptical enough. Yeah.

So that if there is bull going on, a lot of money doesn't get lost. So it's, I don't know where the line is. Of course, it's always moving. It's kind of like shorts. You know, like shorting is a great thing in terms of intellectual honesty in the markets. Somebody gets to place a bet against it. But then if they go fud like they did on Tesla, you're like, okay, you're sending drones over like a garage to tell us that there's no model three is being shipped. But when I drop my kid off for school, it's all Tesla's.

Like, what's the narrative here? Like, if they're delivering the cars, they're delivering the car. So the fud stuff gets kind of out of control. It's very simple because it's all driven by incentives. So I was looking at this because there's a saying in our industry, our friend Phil Perman said, the higher the VIX, the higher the clicks. And I was breaking this down on my own blog. I'm going to write about it later this week.

When the VIX is under 25, which is a pretty like calm market environment, I average around 5,000 page views on my blog. When the VIX is over 45, it's 15,000. Yeah, got it. If it leads, it leads, that's it. That's it. That's very simple. There's a new one.

What's that? Now, it's called Knicks for Clicks. Last night, Bill Simmons started his show, and I talked to Bill Simmons about this, of like, he's got so many Knicks fans left. I'm constantly, you know, DMing him, Nick stuff. And they started the show with Nix, just to go off on us for like our offseason and, you know, like, we can't get any superstars here. And we got Leon Rose and all these SAA people.

And so what CP of the franchise who does this Nix fan TV thing, what he calls it is Nix for Clicks. So anytime the national press. wants to get clicks, Stephen A. Smith, whoever it is, Knicks for clicks. Yeah. So the reason why the Knicks can't get any, the Knicks can get people here. The Knicks can get people here. But they, all right, I spoke to Ennis Cantor, one of my favorite players in the NBA. Of course.

Yes. I mean, just like one of the most passionate people I've ever met. You mean Freedom Canter. Seriously. Freedom Cantor. So I spent a day with him a couple of years ago and he was on, he was on, he was on the Knicks but leaving. And one of the things that he said is like a really big

impediment to getting great young players to want to come. It's so weird. It's so strange. But like I believe him because he's had conversations of people about this. If you're a young player joining the Knicks, where do you live?

Because they practice in Westchester. It's Westchester. Yes. They play on the facility to Manhattan or Brooklyn. They play on the west side of Manhattan, but they practice in Westchester. So like just like hypothetically, you choose to live in Westchester. Okay, great.

You're right near the practice facility. But you could be two hours from MSG on game day by car. It's a disaster. So do it reverse. Live in Midtown Manhattan. Not great, but do that. Now what? So you're near the games.

But for practice, you can get stuck in rush hour traffic leaving Manhattan. So it's like this weird thing that nobody would ever think about. But he's like, people think about their lifestyle. So if four teams are going to give them $20 million, why would they pick the team that makes them commute like a shoe salesman? Why isn't the training facility at MSG? Just buy the building next to it. They're schmucks.

It's unbelievable. I am going to make it first class all the way. I'm going to build an entire building. I'm going to give them on the slide. And also it's the owner. You saw how Dolman treats Charles Lothley throwing them out of the building? I mean, that tells you everything. There's no secret.

The words that nobody's coming here. Listen, one of the hardest things in business is turning a lead into a customer and then keeping that customer around for the long term. This is your funnel. Well, one of the best ways to do that is by having a seamless customer experience. On the other hand, a bad customer experience could kill your company. Seriously, we all know that. It's the leaky bucket syndrome. It's churn.

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and get 10% off your active campaign subscription today at activecampaign.com slash promo slash twist. that's activecampaign.com slash promo slash twist for 10% off and to let them know you came from this week in startups Hey what's it like being

so tell us about your like role or involvement with the Warriors and what what this year felt like like give us give us some well I you know I'm a diehard Knicks fan but since we're not in the playoffs I also became friendly yeah so I'm friendly I root for the Warriors I like their style of play

I'm friendly with a couple The Warriors, very good friends with Draymond, in fact. And so, and my friend Shamath owns part of the team. And so I developed relationships with some of the players through Shamoff. And then, you know, I go to the games. You know, I went to all the playoffs and finals games. They're incredible to see. And then-

We saw you. Yeah, I had courtside for one. Ironically, I had courtside for one, which somebody gave me the ticket. I didn't pay for it. And I sit down. And who am I sitting down next to? Cheryl Samburg. And so everybody's like,

oh, Cheryl and J. Cal are going to the game. And I've been so critical of Zuckerberg. So that was a very funny moment. And then I took Molly to the second row I paid for those seats. And then I have a friend who has the tickets

right behind the bench of the warrior. So I sit in those all the time, which is my favorite seats because I can see right there. And I know Steph. And so Steph will say hi to me or whatever. And everybody kind of freaks out or whatever. But the funny story was when I first started going to the games, I was sitting in Chumat seat.

And there was, And they're playing the Knicks. And I was not friends with any of the team players yet. So they're going up 30 against the Knicks. And I say to Steve Kerr, you know, like, what are you doing? This is Bush League. Like, get the starters out. What if like staff rolls his anchor?

And Andre Agadala tells me to shut up. Bogot tells me to shut up. I start telling them, listen, you guys can't even beat the clippers. You need to shut up. You're up 30 on the Knicks. You're not getting past the clippers. This is before they had won any games. And so then I became good friends with Bogot, good friends with David Lee.

And I play, you know, it's a small town here. So we play cards. We hang out or whatever. But I got to go to three out of the four years they went to Vegas to celebrate. So three out of those three years, I went with them to Vegas. So it's just a lot of fun to, you know, hang out with them. So how important. So the Knicks can't attract young players.

No. The Warriors, obviously they're obviously the best team in the league over the last 10 years. But besides that, one attribute of that team and where they're based is that there seem to be like venture investing opportunities available to NBA players who show up there just like by being in the scene and meeting people who have front row seats.

But that's like a hidden advantage. It's not hidden. That's like an advantage that your team has to attract talent, right? Yeah, absolutely. I mean, Iguado has his own fund. KD was involved with a lot of the companies when he was out here.

Dremond is involved in that stuff. Dremont's getting into media stuff now. So I, you know, I'm a media guy. So I've been, you know, talking to him about his plans and brainstorming with him and just even giving him some on-air tips of like, hey, you know, great job on that. You know, I don't know if you watch his Draymond Green Show on the post after he does, after he plays in the game, he goes home and records a YouTube video, which is pretty crazy. That's crazy. It's awesome.

So it's pretty great. And, you know, it's just nice to be watching that style of play. I think Steve Kerr is a genius. I got everybody to buy in. Steph is, you know, if we look back on staff, I mean, how is history going to look at him and the LeBron era? You know, like, who's going to have a bigger legacy? I think he moved up a lot in the last month, just in the minds of basketball people. It's not just like a guy with a circus shot anymore.

It's a guy that can carry a whole team to a championship basically. And change the game. I mean, like, if you look at LeBron and you look at Steph, like, LeBron is obviously like this incredible, like, basketball. player. Is there anybody who's ever been a individual better basketball player? Forget about the championship. Just as an individual but then he didn't change the game. It's not like they had to change

the rules or everybody changed the style of the game. You know, Shaq, they had to change rules for him. They changed rules for, I think Steph really did change the game. My kids, my son plays AAU basketball on a travel team. We're

a million miles away from the Bay area, but these kids are throwing up three. like they would not have been doing 15 years ago. There's just no way. And they're hitting them because that's all they work on. And that's the, you know, the most glamorous thing you could do as a 13-year-old is hit two or three, three-pointers in a game.

That would not be how they would have been playing 15 years ago. So I agree with you. Let's go to markets. I have a question for you guys. If we, this has been quite a drawdown, obviously, for tech stocks, for growth stocks, etc. Do you believe we're bouncing along the bottom right now? Because we're looking at some of the valuations.

I've started to see these moments where like large cash position in a company, great revenue base. Maybe the company's a little mismanaged. It's been managed for growth, not for cash flow. But this massive discipline that's come to the market, all of a sudden the cuts, the hiring freezes from some of the big companies. You know, it feels like everybody took the medicine this time really fast. You know, like people realize we're in a downturn and public.

company said, we're stopping hiring, we're making cuts, we're going to focus on free cash flow. Is this the bottom? Is this bouncing along the bottom? What do you think? I think that there's no indication that we've bottomed. I think you're going to have to unfortunately see inflation come down. I think it's really that simple. So you've seen companies take their medicine, valuations reset very quickly. Austin Reeve tweeted today just to give you an idea of how bad it is. How much would you pay for a company with 170 million monthly web visits? 50 million YouTube followers the two-day event with 60,000

attendees in an eight-figure hot sauce brand. That company he was describing is BuzzFeed. Their market cap is $200 million. Jason, I know you're seeing deals in the private space that are multiple He's going to put us on hold

and then acquire BuzzFeed. Don't do that to him. The thing is they have $300 million in revenue and they only have $50 million in cash left and they're losing money. They got $100 million in cash. I was going to say how much does it cost

to produce that revenue? I wouldn't know. Well, Josh, we spoke about this yesterday. If you look at the number of companies that are trading below their cash value in short-term investments, it's at an all-time high. Why, as you know, much better than we do, all of these money losing companies have been subsidized by people like you and your peers. And that game is over.

And it's not coming back tomorrow. And so it stands to reason that if you're bleeding money and it costs a ton of money to keep you in business, you will trade at a discount to what cash you have on hand. Or somebody could take this company over, like we're starting with Zen, Desk is being taken private with one point three. What does A M&A kick up? It's happening right now. I think that's going to be the trend of the rest of the year because you look at

Zendesk. They had this like hostile board members kind of pushing them to take that $17 billion go private. Now they they wound up taking a $10 billion go private with over a billion dollars in cash, $1.3 billion in revenue, 30% growth. This seems like a great company. And, you know, Jason, but it, but it, I know it feels. like a failure for people, maybe like in the venture world, but let's keep in mind, Zendesk went public

in 2014. It was one of the first handful of unicorns. I don't think Fortune magazine did the unicorn cover until 2015, but I could be wrong. Maybe it was 14. But that was one of the first, and it was ridiculed. People said a billion dollars for a chatbot or whatever. So getting a $10 billion exit eight years later is not a failure. I know we wish it could have been more. The stock price is higher, but that's a win. It's a completely fair point. But what I look at is long-term greed-wise, the management team and the board, they, I think,

these private equity folks, I think just pressured them to give up because they made their lives so miserable. You know, couldn't they have, because they were going to also buy SurveyMonkey, you would think a company that was in a strong position. This is in BuzzFeed in a weak position. This is a company in a strong position. 30% growth. That's almost high growth. It's, it's very respectable growth on a big number. Why cashing your chips now? Why not keep going? And I think it's because the private equity firm is like, we're going to cut half the staff. We're going to make this thing print three, four, 500 million in profits a year. And then we'll take it out again or

sell it to sales force for 20 billion. And I think that's, we're going to see. So somebody will buy, I think Bankoff or Vox will wind up buying, you can see a reverse merger, maybe Vox does some kind of deal with BuzzFeed to go public. And then they just got the BuzzFeed staff and make it profitable and put it with their collection of assets. So we've seen a trend of international billionaires by U.S. media assets from overseas because it puts them immediately into the conversation in a way that they have influence from day one. So rather than hire company, yeah. Yeah, rather than hire PR firms and try to get a message or show up at Davos every year,

like if you own your own media outlet and it's got video, it's got print, it's got subscription, like you're a player. People have to listen to what you have to say. So I mentioned Fortune before. Fortune, I think, is the best financial magazine of all time. And that was sold to a billionaire from somewhere in Asia. Oh, yeah, it was a crypto guy who they were criticizing and then he bought part of it. Yeah, I mean.

And then I wouldn't. Yes. Bezos bought the post. Yeah. And then what's his name? You'll see more. Piero Midiar started information. Now, he's a pyramid or started The Intercept.

So, yeah, it's a classic move. Media sucks as a business. Let's be honest. Like the journal is right. Unless you have an agenda, unless you have an alternative use for those assets beyond just advertising revenue. Well, that's what this is too. Think about this. Like, we do media.

We don't need to make money from it. We have other day jobs. So that's kind of like the ultimate sweet spot. That was the big beef at all in that we had this like little flare up because it became a business all of a sudden. and we're like, you know what? Our businesses are big outside of all in. Let's just make that a podcast. Four-way split.

We'll just do it once a week. We're not going to do any events. We're not going to do any of that. Even with the great success of the event, the first event we did, because we're like, our other businesses are crushing it. Let's just do the pot every week and be the 25th, 35th, you know, biggest episode of the week every week. And that's enough.

No advertising. Just go from there. Hey, Jason, getting back to where we're on the market, I was listening to playing English show that with Derek Thompson, he had Conner Sen on, talking about where we are in the cycle. In 2008 and during the dot-com bubble, by the time stocks were already, by the time stocks were down 20%, we were already in a recession. Now, the MBER didn't tell us we were, but I think people knew that we were in recession. Right now, it's happening so much quicker where the stock market is front running a recession. So you look at home builders, for example, the stocks are down 40%.

They have gross profit margins at an all-time record high, pre-tax income out of record high, but stocks don't get credit for what they did. They get credit or penalized for what the investors think the market is going to do. So I would say that if we do not get a recession, stocks are very, very attractive right now, but there is still a lot of price instability for the first time in basically our lifetime, and that matters a lot. The cost of capital matters a lot. Yeah.

Hey, Michael did this thing on his blog. I don't know if we have the graphic to share, but just the information is really valuable because it's a new environment for most people watching this. Stocks during, so when people say inflation is bad, it's actually not. You need inflation because the alternative is worse, disinflation. It's high inflation that's bad or quickly accelerate. So Michael broke it down into inflation regimes, zero to two percent. 2% to 4%, 4%, 4%.

And there is a point at which historically the rubber meets the road, and stock returns become deeply negative. The other interesting finding there, which Michael can explain, is that actually falling inflation, no matter what level it's falling from, is a really good tailwind for stocks. Even if it's falling from 8 to 6, it's actually beneficial. Because consumers have more money to spend and engage? Because we're looking forward because the stock market is looking forward. So,

so it's like, so here's a number one thing before Michael go. The number one thing about investing, that might be different on Wall Street than Silicon Valley. The number one thing about public market investing and Wall Street, there's no such thing as good or bad. There is only ever better than expected or worse than expected. So get those two words good and bad.

if you're going to be a public market investor, eliminate those two words from your vocabulary. It doesn't exist. All that matters is, okay, that sounds bad, but the expectations were so much worse, the asset rallies. Because the assets are being priced in real time.

Dude, so it's the right. Interest rates are the lifeblood of the economy, and interest rates were at zero for a long, long time. And the only thing that mattered was top line growth, subscriber growth, use new growth. And we overdid it dramatically, right? At one point during the pandemic, Peloton had a larger market cap than MetLife. 30-40 billion, yeah.

Peloton was bigger than MetLife. Zoom was bigger than X on Mobile. So we clearly overdid it. And then so we don't need to go into all the areas, but we overdid it a lot. And maybe we're overcorrecting on the downside right now. But a lot of these companies, just on traditional metrics, still don't appear to be like bargains. I know the stock price is down a whole lot, but they still have to do. Nike is a good example of that.

Like, it's like one of the greatest companies in the world. one of the greatest companies in the history of the consumer companies. They had a good earnings report. They actually beat on revenue and earnings. The problem is it was 23 times earnings when they reported. And this is a market that is 16, probably on its way to 13 or 14. Hey, Tom Eschbacher is here with us again. He's a senior sales manager at LinkedIn Marketing Solutions.

And we're talking about their amazing report today in startup marketing, as well as how to use LinkedIn to grow your startup. What are some tactical things, not big picture? your strategy. I'm talking tactics that founders can do today to figure out product market fit. One of the big tactics we see here is amplifying organic posting with paid advertising. You consider a startup that raises a seed round. They post a news on their LinkedIn page and see a bunch of likes, clicks, and follows come in. They follow that then with some updates about product and they see continued traction with, for instance, HR benefit managers at tech

companies that have fewer than 500 employees. That's a signal and it becomes important to then get a larger sample. And to increase confidence, we've made it super easy to identify which audiences are engaging with your organic content, your LinkedIn company page, your website, and then extend reach into those segments with our best in class B2B ad targeting. So for early stage startups who amplify organic with paid, we see a 13x lift in unique reach. And those are meaningful insights to help inform product and go to market strategies. Such a great strategy. Head to LinkedIn.com slash this week in startups and get the report now so you have an edge

on your competitors. And as a little pot sweetener, $100 off your first marketing campaign, thanks to Tom and the team at LinkedIn. Go get that report and get the Hyundai. We bottomed, by the way, the S&P over the last five years historically, like during crises, COVID included, has been bottoming at 14 times. So we're not that far away from crisis multiples. I feel we're bouncing along the bottom.

I feel like we're bouncing along the bottom right now. If you were going to buy a company and hold it for 10 years, like I've been looking at Disney. I've been wanting to get into Disney for a while, but it kind of spiked up. And now it's under 100 again. And I was like, I think I'm going to buy some Disney. You know what's for one or a whole thing forever.

Disney is more expensive than Netflix right now. I know, but they own Star Wars, Pixar and, you know, Marvel, like, and our kids are going to Disneyland and our kids are not going to Netflix land. They're not going to Ozark World. Yeah, no, Ozark World kind of dark. I don't think we want to send them there for, to work with the cartels. To work with Ruth? Orange is the new black world.

It's not a great exhibit. No, you don't want to spend time there. But yeah, I think this is the time. If you were going to start building a position, because I hold things in decades. I take a decade long approach to stuff. I'm not like trading in and out of stuff yearly or, you know, quarterly, God forsake, not like by day. But I really do like to hold things for a decade. And I feel like that could be like a decade long holding for me.

We ran the numbers and Disney has actually underperformed the S&P 500. Yeah. For for 30, over the last 30 years. So all of the things about Disney that make it a great company, we could all cite those things, the parks, the kids connection with the characters. But it's a media company. But in the end, in the end, like if you. P&ABC suck.

If you bought the S&P instead of Disney, 30 years ago, you did better. So buy and hold is obviously great, but where you buy is going to have a really big... Jason, Facebook underperform the NASDAQ since inception. Yeah. Crazy. It's crazy. I am, I think the subscription business that Disney is building has such amazing opportunities. I don't understand who's running product there, but, you know, and I said this on CNBC,

and I almost got laughed at the show. I said, they're going to be bigger than Netflix. Just watch. Like, this subscribe. It's obvious to anybody who looks at content that their content in IP library will result in more subscribers ultimately, especially on a global basis where these characters transcend. Wait, why do you say that? I think anybody who's a parent who gets Disney will never unsubscribe. All of us, yes.

And so if you're a parent, you're not going to unsubscribe. And these things become timeless. Like, we watch Star Wars. my daughters who are six years old and 12 years old, they are now into Obi-Wan. They're into Clone Wars. Now we have that shared IP. Marvel, you're having shared IP.

We all grew up reading X-Men comic books. And now we're going to have the X-Men movies with the Avengers movies because they just got that license back. And then Pixar, like our kids or, you know, we kind of missed that one. Maybe we saw it, you know, we're Gen Xers. But Pixar transcends that. And the Disney characters transcend that. So this idea that you can.

could have a media company, that subscription, that every generation can enjoy together, to me, is unprecedented in the world, whereas Netflix is kind of long tail and pockets of like Chappelle shows over here, Orange is the New Black, Ozark, these appeal to very different groups of people. And I don't understand how incompetent Disney is that when you sign up for Disney Plus, at the end of the show, they don't play a trailer for the Star Wars experience and then have a one-click purchase your tickets. Or you watched Grow Goose. and you got introduced into Baby Yoda, spoiler alert, it didn't upsell you on buying Grogu for Christmas.

Those opportunities are coming in the app, in-app purchases. For sure. In-app typical purchases. Or I could subscribe and it would include, like, I could give them $1,000 a year and get four tickets to buy. But why couldn't Netflix sell us opium during Ozart? Absolutely. Yeah, why can't they ups?

I saw it pretty interesting today from Netflix. Vox did this piece. Netflix subscribers are more likely to quit in the first month than any other streaming service. You know why? Binging. It sucks. It's such a stupid decision. Binging was a great decision at the beginning because it was new and novel.

But none of these shows have the BuzzFeed, you know, water cooler effect. Or ringer. Or ringer. You don't have the water cooler effect. Right. Why not spread out Queens Gambit? Why not spread out Ozar? So they tried to do that with, um,

They did do that. With stranger things. With strangers things. The last two seasons of Ozark, they gave you half and half. They are doing that now. They need to make it like Sopranos. HBO Max knows what they're doing. HBO Max is so much better than Netflix. So much better.

Disney is great. And they just face it out for you. Aren't there shows, though, that are better to just dump the whole season at once and let the fans go crazy in the first weekend? I think it might be better for super fans. I would have loved to gotten Obi-Wan at one drop. But, you know, as a nerd. Because honestly, this is embarrassing.

but I forget what happened from one week to the next. That's age. That's just age, Josh. It must be age. Are you turning on subtitles? Are you turning on subtitles for Game of Thrones because you can't understand

what they're saying anymore? No, I'm about to. Are you really recent? You're the reason they have the recap there. The rest of us hit Skip recap. Josh. It's for you. You're losing it.

I am. So if one of the interesting. Let me just put a button on this. Yeah, Disney. Disney added seven and a half million subs last quarter while Netflix lost 200,000. Disney will have a billion subs.

Right, because by way, by way. I think it'll be right because when Disney goes into a new geography, they don't have to clear their throat and introduce themselves. These characters are universally known and loved

the world over. And Disney can just basically say, hey, we're here, we're in your language. Here's the price. And it's done. It's done. So I'm with you on that. Yeah, I mean, look, everybody made fun of like Disney China.

Are you a picky blinders guys, Jason? You know, I started, here's the problem. I'm married. And if I start one of these shows, my wife... No, you could stop there. That's the problem. You understand. You know, they fall asleep and then you want to watch.

And then if I watch a show, I'm cheating. This is the new cheating. You know, if I go one episode ahead, this is the biggest argument in her house with me. It's not. Oh, you know, we're watching together, though? She'll watch the old man. She's into it. Really?

Yeah. She's into it? My wife doesn't want to watch anything violent. And that's like everything I love. I'm like, I start with violence. Yeah, exactly. I'm like, do you want to watch Gladiator again? She's like, can't watch that.

You know, like anything about it. Jason, all these media companies are getting killed. Paramounts getting destroyed. Yeah. Warner Brothers Discovery, all of them. It's a tough business. Also, advertising in a recession gets walloped. So, you know, it's, and it starts with, you know, the weakest things,

outdoor and then TV. And the thing that people go to is radio and, um, We're getting a question for you from Purple fans. Purple fans say what? Let's get some questions now. Purple fans want to know what you think about Robin Hood at this valuation. I am holding my position. I was an investor before they went public.

I had, man, I wish I could have distributed to my LPs at $30 a share. But I do think the world of the founders and their ability to make great product. I know there were like some issues with like this massive denial of service attack, everybody wanted to short the same stock. Like, this is what happens with successful companies. They become sometimes too successful, but I'm holding. What would the stop do if, uh, if Ladd stepped down?

I think it would go up 20%. Yeah, I mean, he's, I understand why he's not popular right now, but he's also a product genius and their product geniuses over there. Let me push back a little bit, Jason. It's very rare to be a product genius in the world. That might not be good enough, though, in a brokerage industry. Fair enough. Yeah. Yeah.

What's taking so long? for IRA accounts to be open. What's taking so long for them to get ACATs on the platform? This seems to be such elemental stuff. Yeah, I'm not sure what's going on. I don't have many insights. I don't talk to management now that it's like a public company all that often. But they should be releasing product fast.

I think there's a lot of cleanup work that probably had to be done and a lot of management distraction, I would say. So when I was watching the Uber situation with Travis, once management gets distracted with all these folks, you know, you're basically fighting wars every. day, lawsuits, investigations, depositions, whatever it happens to be, internal turmoil while you're running a high-growth company, this is incredibly challenging, incredibly challenging. I mean, Elon goes through this from time to time. It's just the distraction level can get crazy with these lawsuits.

And you know, you're trying to. On the product side, I use a platform. And just from the usability, enter, dollar swipe up, there's nothing better. Here's the thing. That doesn't happen by accident. When you have a flawless app that like just delights customers and you get what's called market pull in our industry, people are such incredible fans of the product. They tell their friends about it. You don't need to spend money on marketing.

You're just acquiring customers because the market loves it so much. It's happened with Uber. It happened with Airbnb. It happened with Google. It happened with Facebook. It happened with Instagram. It happened with Tesla. You know, like Tesla sell themselves.

They don't have to do any marketing. You get into Tesla. You're like, I want one. It's that simple. And the people want. It's a delightful product. But can they survive a bare market, a crypto win? or like, can they survive that?

How much cash they have? Yeah. I mean, I think they have a lot of cash. They have a lot of cash. Yeah. I'm sure they will survive. I mean, can they thrive? Those are different questions.

I would, it could be like a year or two of sideways. I mean, I, but again, I think in 10-year increments, if you, there's no way I don't see the company having 50 to 100 million active accounts 10 years from now. There's no way I don't see Disney having two or three times, the number of accounts they have two or three years from now. There's no way Airbnb doesn't have twice as many customers. twice as many hosts 10 years from now. I think what's a reasonable bare case on Robin Hood,

even at today's valuation though, and where it's different from all of those other examples that you cite, if Disney gets a customer using a lot of their products, it's not really hurting the customer. Like, I see a million Disney movies. I have the app. I go to the park once a year. I'm a Disney.

Like, I love Disney. It's like a good thing. If Robin Hood has a customer, using its product a lot. That customer is going to go broke. You cannot tell me that the, so Robin Hood's incentive is the opposite. Day trading is, day trading is then it goes holding. Well, what's good for Robin Hood is extremely active customers, lots of them, and stock

market bubbles. That is simultaneously the worst possible thing that can happen to its users. So they're literally sitting on the other side of the table. And that's what separates them from a lot of the examples that you cite. And I don't know how to, like, how does Robin do really well, why it's, while its customers do very well. Yeah, my thesis on this, I've thought about this a lot. I have a thesis on it, which is, you know, you get people who were interested in trading

stocks, maybe owning a share of Tesla, owning a share of Apple, they want to participate. They get a little frisky, you know, it's like somebody at a poker table of playing too many hands. Of course, that's negative EV. You want to start with the good cards and maybe, you know, get more money into the best hands as opposed to just flipping stuff. So I think what's happening is this next generation, the people who are, are tuning into us on YouTube, I think that that generation is going to be the most sophisticated

financial generation ever because they got their asses walloped in crypto. They got involved in meme stocks and other nonsense. They're starting with an education that is absurdly high. When you hang out with a bunch of millennials or Gen Zs, they understand shorting and they understand puts and calls to a level that most people in our generation still don't understand. Definitely true. Definitely true. And they're doing it. So you learn by doing. you want to learn poker, you got to play poker. That's it. You want to be good at gambling. And you have to lose money. And you got to lose money. That's the price. So I always tell people, if you're starting angel investing or poker, make the smallest bets possible, play as much

as possible. So taking your concept, though, to its logical endpoint. Yeah. So somebody learns a lot because they were a Robin Hood user in 20 and 21. They thought they were a genius. This year, this year, they said, you know what? I have learned a lot. And the worst thing I can do is funnel orders to Robin Hood all day and trade against Citadel. So, Robin Hood knows that as well. And they have 401Ks, 529s, balanced portfolios, and people doing checking in it. Well, I think there'll be a super app of finance and I think Robin Hood has a chance of being in. I think they're the likely candidate.

So imagine this generation opens up an app and they're getting their paycheck put in there. They're checking accounts in there. They're 529 for their kids is in there. Their 401K is in there. Their IRA is in there. And they're just doing tax optimist. taxation, tax loss harvesting. We were also shareholders in Wealthfront, which I think sold too early.

But Wealthfront also kind of was educating people on that. And they kind of had a little bit of an older generation, you know, using it. But, you know, I think that these apps will come together and there'll be super apps. Just like Uber sort of turning into a super app now. You think Robin Hood has a head start on something like a SOFI to be V. Because most people are not going to have five. It'll be a two or three horse race, of course. You think it'll be those two?

Or, and there could be other ones that show up. You could see something like Cash app that Jack's working on, maybe expand, right? Because I think he did he had crypto to Cash App? I think he did. Do you worry about the seamlessness with which somebody can have their paycheck deposited into a financial super app? And with one swipe, have that be in five different crypto coins. Like, should life be that seamless? Should finance have no roadblocks?

at all, no friction. I am a fan of people being able to do what they want with their money and learning hard lessons early. So I am fine with it because the alternative is, you know, what I saw when I first started working, you know, down on Wall Street, installing laser printers in the late 80s and early 90s, which was people were taking their paychecks to a money, a cash checking place. And they were paying 4% on their money to just get cash. And then we'd go to a bar and we'd lose another 20% and then we wonder where our money was going. So, Yeah, if it goes into an investment app, yeah, I think it's a much better thing than going to a cash checking place. I think poor people and people who are starting on the economic rung, yes, they should be getting

their money put into an investment app and at least having the option before they, you know, gamble it or spend it on beer or a night out. Yeah, maybe I could put some of it into Apple or Disney. Yeah, that might be a better outcome, actually. And that's why I love what you guys do, you know, here with the compound, is you're educating people and you're demystifying it. We're having a conversation here. You can actually, as a consumer, have a reasonable discussion about Disney.

And then you can learn from guys like you or guys like me or other places. Yeah, there's some nuance here. What's the price earning? What's the average price earning? That's what we're trying to do on All In. That's what I try to do on this weekend startups. That's what you're trying to do here. It's not, whenever finance gets super complicated, it's probably, there are some things

that are complicated, of course. But whenever it gets super complicated, it's probably because somebody's running a grift or a scam. When people started to explain to me, oh, you can get 15%, 20% by loaning at your Bitcoin. I was like, okay, explain to me the scam. What's the grift? And they're like, not a grift. I'm like, okay, who's paying the 15% interest? And they're like, what's the risk that I'm not seeing? Exactly. And the risk turned down to me. Of course. Counterparty and people were doing off-chain bull-and-and-they were also like giving you tokens as your interest. That'd be like giving you airline miles or something. Like, you're throwing an airline miles.

We have a thing that we talk about. And Corey Hofstein, I think, is the person who has done the best job at, like, coining this phrase and writing about it in depth. But we stole it. That risk can never be eliminated and it can only be transformed. So like, you can start off by saying, okay, I'm going to invest in such and such asset class, whatever, but I really don't like this particular risk. Maybe it's the liquidity or maybe it's the risk of volatility.

or whatever, you can totally transform a volatility risk into a liquidity risk via hedges or whatever. Like there's a million ways that you can transform risk, but you're always taking some kind of risk if there is a potential reward. And I think to your point, like 15, 20 million Robin Hood users have learned that about a variety of different markets. I don't know if they really learned it, but they experienced it definitely. Sometimes risk can be transformed in a positive way.

where you're not the person over. So, for example, illiquid investments, right? The marks that we all know are fake are sometimes

in the investors' best interest. Of course, they can't blow out even if they wanted to, but Cliff Asness causes volatility laundering. So in other words, I am at risk.

The risk I have, though, is not volatility because I can't sell anyway. The risk I have is I just can't get access to my capital. Right. We consider this a feature

in private markets. So, you know, one of the ways people got really rich with Uber was Travis didn't let people sell. And he controlled the secondary market of Uber shares with an iron fist. And then some people in the early round like I was, we had certain rights to our shares where we could sell them. And, you know, there were people who were contemporaries of mine who sold that two, three, four billion. And I had people banging my door to sell my shares. Listen, it was a lot of money for me at the time. I'm glad I held, you know,

there were 10xes to a car, 20 xes to occur after that. So, you know, holding is sometimes a feature, not a bug. And that's how venture firms work. Venture firms, you put your money in and you find out 10 years later how you did. That's why, you know, endowments like them. It's like, I can just put this money away. I trust this fund manager. In 10 years, I'll find out how I'm doing.

That's not an arc that most people want, but it does take out all volatility. We send our LPs a note every year. Here's a very conservative estimate of what this stuff is worth. But please ignore, feel free to ignore all of these reports, audits, markups, and just look at cash in cash out. I'm in 20 plus venture funds, some of the most famous ones in the world, and I just look cash in cash out. I put in $100,000, how much should they get out?

What would I have done in the market? I just set these, I call them wealth bombs. You put $100K, $250K into one of these venture firms. I'll find out in 10 years. did I, did I 2x or did I 10x? And sometimes we two or three X, sometimes you 10x. Sometimes you're 20x. And I kind of like that way of investing,

but I'm actually coming around to public markets now that everything's so low. Because you start looking at some of these valuations, like Peloton at $3 billion with $900 million in quarterly revenue. I know they're running out of cash and it's been mismanaged and it's a show in so many different ways. But the new manager seems pretty good. If they can get some cash, I don't know why this thing hasn't been bought yet. Why is Peloton sitting out there at $3 billion?

Yeah. Why didn't somebody buy it yet? Because the comps are impossible for the next decade, unless we're going to have a pandemic. Another one. That's why. They'll never have a year as good as 20 ever. Unless Monkeypox like Willie blows up. Three, four billion in revenue? I mean, for $3 billion company. Nike can't Nike buy them? That makes total sense. Nike. But what's the rush? Look at the trajectory. So why would you wait?

wait right yeah wait it's like we're playing yeah we're playing some like game of chicken here like who's going to do the snap eminah purchase next mirror got bought by Lulu I don't know what they paid but I already

could pretty much mentally guarantee that's a write off at some point like like so like what's the what's the unless you unless Nike thinks Adidas is going to buy it what why would they be in a rush I guess I guess but it's got two billion

does it have two million subscribers between the two, like a million and change for the hardware subscribers. It's such a great product, too. The people who have it love it. I think they would do really well at Jims. Equinox maybe merge with it. What about the issue that everybody that could afford one and once one bought it and there's nobody left?

Is that believable? You could buy the customers and just cross sell them. Yeah, I think you could, I think the price will go down. I think they have been very greedy on the price. I think that they could really, I mean, I paid like three or four grand for my treadmill and I pay $44 a month. It's pretty outrageous. I think they could go down market over time and keep expanding that.

I would have really liked to see them buy Tonal. Tonal's a great product too. It's just that Tonal's very expensive to install. I looked at that business. You have to like bolt it onto the wall, but it's a very cool product and it keeps getting better. I just think somebody will consolidate Tonal, hydro, and Peloton, and do a roll-up. That's the other thing that would be great.

one of these PE companies should just buy those three assets, put them together and get the economies of scale. What are you most excited about that you've invested in recently? Great question. Public or private. Like, what are you fired? Forget about what happens in the next three months. Like, what are you just fired up about in general?

So, hardware is a horrible business, like consumer hardware. So I did a smoke detector at one point in a camera, you know, in the days of drop cam. And, you know, before Nest existed and Google had bought. but drop cam. And so I got my ass handed to me on a couple of those investments. And then something hardware as a service emerged. So what's hardware as a service?

You know SaaS, software as a service. You pay a monthly fee for software. Adobe moved over to this after Salesforce pioneered it. And it turns out to be more profitable. When people have to buy package software, we all know like they steal it. And then they're trying to extend the life cycle. Maybe I'll keep my Photoshop for another year.

And it's just better for everybody. You pay 20 bucks a month for your Photoshop or you pay 50 bucks a month for whatever, Salesforce or Slack or Notion or Zendesk. Okay, we had a hardware company that presented at one of our events called Density, and they were doing people counting, and they would count the number of people

coming in out of Phil's coffee. I was like, there's a reasonable investment. I'll put 350K, and then I own 6% of the company. They go through three iterations of the hardware. Eventually, they realize, hey, you know who really actually needs to count people in spaces? People with big campuses. Okay, so let's talk to some universities.

Wait a second. There's companies with big campuses like Google and Twitter and Yahoo. And, oh, Yahoo got bought by AOL. AOL's got campuses. So they built this people count against Density.io. And I invested in this company was $5 million. It's worth over a billion now. And lo and behold, the pandemic happens.

Now people have this asset of space and they need to optimize it. And they need to know how many people are in a space because of the pandemic. But more importantly, you know, you have the legal departments like, I need more space and we need two more conference rooms. And then the CFO or ops person is like, you have a lot of space now, but I guess you guys get paid a lot. This reminds me of Matterport a little bit. You probably know RJ. Yep.

And so similar theme. What they can do is they can tell you, hey, the sales department, that 12 seat conference room has an average of 1.1 people in it. It's being used as a phone booth. You don't need it. They should share it with accounting. Period. Full stop. And oh, by the way, nobody goes to work in New Bruns.

But everybody is going to work in Long Island City. You should shut the New Brunswick office down. You've only got six people going there and you're spending this amount per square foot. And once you do that, it turns out facilities are like the number two after expense. And so they just, they manage that space for you. It's kind of becoming the industry standard. So I was very, very excited about hardware. Is that an exit this year or next year?

Like, what do they, what do you think? I think it's like they're just starting to have their ramp up in terms of, sales. And so I would like to see them stay private for a little bit longer so they could just take a market share nice and quietly. And there'll be plenty of opportunities after that. And, you know, we had this company, CafeX, which was, you know, trying to do robotic coffee. And there's two of them at SFO. And the company just got walloped. It was in the real world. Airport. So you're running, when you run a hardware company like that, you're doing the hardware development and you still have to do the software.

Right. In their case, they also had to do retail. So you had to do three businesses concurrently. Well, now they started saying, you know what, if you're Duncan or your Starbucks or whoever, do you want our machines to put, you know, if you have a big line now for coffee, how about you put one of these 24 hours a day? You can get all kinds of food now. They start food from them.

And I think this company is going to make it, you know, like it was like during the pandemic, it was like, oh my God, I don't know if this company is going to make it. And now at airports, they're doing, you know, like significant revenue every week. And they started to beat the coffee shop that was staffed. It's a storefront or it's a kiosk or how does it work? I haven't seen it. Yeah, you can just type in CafeX on YouTube and pull it up. Or one of my team members could actually play it here for a second.

I was in Starbucks at Likwardi. The line's 40 people long. It doesn't make sense. It doesn't work. So now imagine there's one between each one. And ours can do, it's got a tag. in it so you can do co-brew or komb you can put any food in it because it's using an arm

to make the coffee and so that same unit could also be there it is so that could be beer, that could be wine, that could be an egg and cheese sandwich so eventually all this is going to be automated. Oh look at that. Yeah, so the robot arms can do anything so I'm hoping to... Oh, that's cool.

So what this company is doing now is to say hey, buy the machine from us for 250K and you know pay us a software fee every month and you could put Dunkin Donuts on the front that. And so, you know, Duncan has, you know, or coffee bean and tea leaf in LA, whatever it is, they might have five of those in an airport. Now they could five staff locations. They could put another 10 of these between the other popular places or on a college campus. And you're helping us

with a labor, uh, labor cost inflation. Hey, how much you pay a month for that? Is that a, is that a software fee will be like two pay or something like that? So, you know, you'll buy it for 250. You amortize that over 10 years, then, you know, these things can do $10,000 a week, $5,000 a week. You start to do the math on it. These things do a half a million dollars in revenue a year. You know, you start to, and that's not with alcohol. You could start to see these things popping up everywhere. And the software and hardware sack is really hard.

Do you worry that it's going to be like the supermarket where it's self-checkout? And then there's like two people that work at self-checkout, helping people do self-checkout. And then the machine breaks and like- Yeah, it's a great question. Josh, I looked at the burger. company, the pizza company, the salad company, the yogurt company, they were robotic plus everything. None of them could do the whole process. You nailed it.

The hamburger company, we get you like halfway there. The salad company would get you 60% of the way there. The yogurt place would get you 65%. Pizza, we get you 40%. And then a human had to intervene, exactly like you're pointing out. It turns out making coffee, it's something a robot and software can do perfectly today, and they do it more consistently because we know the temperature, we know the foam percentage, the computer does it better

crazy to think but the turnover at Dunkin' Donuts is bonkers like the average Dunkin' Donuts work or less less than a year that person's not going to make you a great coffee all due respect. This category should be called ass Americanos as a service. Well, I mean it's just

you know like you look at what happened with Dunk McDonald's like in New York they were trying to give $15 an hour 10 years ago and then I remember all of these kiosk companies were like yum, yum. You ever walk into a subway and say to yourself, why isn't this a vending machine? Exactly. Yeah, that would be hard.

Yeah. Cut into bread, getting the food. Anytime you got all those ingredients. It's so modular. Like, why wouldn't that be an assembly line that's coin operated? That's probably about 10 years out. The reason is because you got to cut all that food and then the food's flying everywhere. Whereas with coffee, you know, it's like two or three ingredients.

It's the sure number of ingredients and the dexterity. needed. But, you know, I think you could do... Last question. Will the robot spell my name wrong on the cup? Yeah, absolutely. Yeah. Okay, good. Jason, Jason, I got a question for you. How long do you take you to transition to Pacific time? Like, in your calendar... As a New Yorker? And your calendar invites. As a New Yorker. How long did that take you?

Oh, God. I mean... Don't come out of me with PST. I don't like that. It's brutal. It's brutal. I still, you know, I'm getting used to... There's a double late short. It's kind of nice to be at the end of the day. You're kind of wrapping up and you got the Knicks game on at 430. Kind of nice. Very nice. And then those late, you know, you guys have those 9 p.m. starts. It's ridiculous. It's not fair. It's not fair. We get them at 6 o'clock. It's beautiful. They started all the finals at 9 p.m. Eastern. It's crazy. So beautiful on the West Coast. You got kids that want to watch. They can't. But, yeah, I have to tell you, like, you know, getting up for markets and, you know, they're like, oh, hey, come in in person for

tech chat. You know. And you're like, at what time? And I got to get up at 5.30. And then I got to get to the studio and make up at 6.30 in the morning. I mean, it's brutal. It's brutal to be on air at 6 a.m. So you guys got the market thing is much better for y'all. Jason, how'd we do?

I wake up at 4 a.m. I think that's great. We had 3 or 400 people on our side. You had 700 people. I think we had 1,000 people. That's dope. I think the conversation moved fast. We didn't take enough questions.

Shout out to the viewers. Thank you guys. How did we do? What did you think of the collab? What did you think of the collab? 1 to 10. Rate the co-lab on a 1 to 10. I thought this is so much fun. We would do this with you whenever you want.

Just hit us up. I think this is good. And then, you know, we could do a three-way. You know, Josh, we could have a three-way here. My wife said no to that. She said no to three-ways, yeah. Yeah, no, we're not good to be doing that. Don't bring it up again, Josh.

Okay. That's a road to nowhere. I think that's probably worse than cheating on Netflix. But look at that. Yeah, a lot of tens, a lot of 12s. Where are people calling in from? That's the other question I had for folks. Where are you calling in from?

What city? Our people? or our people are like U.S., Canada, the UK, but all over the world. And all over the world, yeah. Yeah. So this is, this, this was, this was awesome. Thank you for having us on our channel. Yeah.

We'll have you on your channel. Everybody on my channel. We'll have you on our channel next time. Yes. So you guys host next time. Everybody, go just search for the compound and subscribe, great. And follow me. Congrats on, uh, congrats on All In, by the way.

Thank you. Yeah. Great, great show. You guys are consistent. And, uh, we're, you know, we're, we're, we're fans of yours. is your fans of ours, so we really appreciate it. Yeah. All right.

We'll see you all next time on The Compound and This Weekend Sorbs. Bye-bye. Thank you. I don't know how to end the show here. Are you supposed to end the show? Do I end the show? You do a little bow. We all go out and we hold hands and we bow, just like it's a Broadway show.