This Week in Startups - E1029: Basecamp Co-Founder & Author David Heinemeier Hansson (@DHH) debates Jason on reining in capitalism, benefits of state-run education & healthcare, big-tech disappointments, work-from-home paradigm shift, wealth tax & more!

Episode Date: February 18, 2020

0:56 Jason intros David Heinemeier Hansson (@DHH) and asks about the work-from-home paradigm shift 5:28 Measuring programming success via budgets instead of estimates, quantifying creativity 9:57 Are incentive systems inherently bad? 13:01 How terrible commutes turned the tides for remote work in Silicon Valley, why do executives subject themselves to horrible working conditions? 17:59 What is the optimal amount of work hours per week? 19:58 Benefits of higher minimum wage 23:28 How can America "get to Denmark"? Should we rein in capitalism? 27:19 How do educational stipends work in Denmark? Benefits of state-sponsored education & healthcare 32:27 Is American bureaucracy able to change quickly? 35:52 Are gig workers being exploited? Why or why not? 45:57 Flexibility vs. Security in the gig-economy 51:20 Has the American Dream become false in America? 1:00:26 Are ISA schools (like Lambda School) an innovation or a bandaid on the failing capitalist system? 1:06:30 What do successful numbers look like for ISAs? 1:12:28 Starting Basecamp & raising from Jeff Bezos in the early days 1:19:43 Roasting Jeff Bezos on Twitter, socialism, progressivism in America 1:28:13 Amazon disappointments & how can Bezos save face? 1:36:31 Wealth tax debate 1:43:23 Which major tech companies should be broken up? 1:52:04 Will GDPR-like policies work in America? 1:55:59 What is David doing with Hey.com? Should there be two-sided consent in email read-receipt tracking? 2:03:29 Could there ever be an open-source Twitter or messaging app? Was WhatsApp it before being bought by Facebook? 2:09:34 Thoughts on tech journalism vs. big-tech 2:12:22 Can big-tech regulation fix the competitive landscape?

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startups, you're in for a treat. You've been asking for it since March of 2013 when the David Hanmeyer Hansen was first on this weekend startups. You know him on the Twitter at DHH, a self-proclaimed loudmouth like myself, lots of opinions based on a lot of experience. If you haven't read the book, it doesn't have to be crazy at work, which he co-authored with his partner in Basecamp. It's a great book, great read. And David's been right about a lot of things that have come to fruition. Obviously, Rubion Rails, he was the creator of. He does the rework podcast.

And he was early on with work from home. What did you see 10 years ago, David, and welcome back to the program that led you to believe that work from home was going to be so paradigm shifting. And when did you start doing it, you know, as a company? Yeah, so we did it since the beginning. the second I started working with Jason in 2001 that all happened of a blog post that he had made

to Signal versus Noise, the blog that's still running today, talking about like, hey, I've got to understand programming, is there anyone out there? It was an open call. Is there anyone out there who can help me? I sent him an email. And that email went to a back and forth and we started working together.

And for about six months, we didn't even speak on the phone. It was just email, I am, that was the whole thing. So from inception, Jason and I started working remote. So by the time 2010, for example, rolls around, we've been working remote for 10 years. And we wrote a book on this called Remote Office Not Required in 2013. And I thought, man, we're really late to this game. Everyone must clearly understand that remote is the future of knowledge work and that we're just stating the obvious. And what it turned out was that book was even early.

that this great sort of awakening of the wonders of remote work really does not seem to have come out broadly until just in the last few years, which just strikes me as odd. I've almost been working remotely now for 20 years. And for me, the number one thing is it's just a better quality of life in all the factors. The lack of a commute,

the lack of a personal space that I control, the lack of all these sort of impositions on doing the work. And then the availability of like, hey, I get to have lunch with my family. I get to walk out outside where I live when the weather's nice. I get to do all these things that just wouldn't be possible if we were like, hey, you got to come to the office in Chicago. That's just what it is. And it really took a certain type of trust and a certain type of employee, I think you would admit, who can be self-ful. possessed, self-directed enough to work from home. Not everybody can handle it, right? Or do you

find the opposite? I'm not so sure I agree with that. I think that the main awakening that's happening now is not because people changed. Did people get materially more sort of responsible over the last 10 years? No, they didn't. We just realized that what makes a good remote worker makes a good worker, period. And that really, let's not even focus on the worker. What makes a good remote working environment is what makes a good working environment period. That all these attributes that some see as, oh, this is really hard, this is really difficult, that's the hard, difficult work you should be doing anyway. You should be doing it at all companies.

You should be writing things down. You should be giving adequate time for considered thought. And these things just don't happen in all these ad hoc meetings. And so all these factors we describe in remote office not required was really just a recapitulation. of, hey, here's a good way to run your company such that it doesn't suck. You know, I agree with that because, you know, sometimes the failure of the team member, the employee in this relationship is the failure of the manager not being clear about what the expectation is, what the outcome is, right? And so you're like, well, we just need to fill these positions, have bodies in a room, but you haven't made it clear to the employee, here is the output. But here is why you're here.

You need to push this amount of code. You need to add this amount of features over this period of time. You need to sell this many licenses, whatever the goal is. And for sales, it's easy. You pick a number. For coding, maybe a little harder, right? Like the number of stories or, you know. I don't even think that sort of gold-based outcomes like that or that helpful.

I mean, one of the other things we've published recently is a software methodology called shape-up. It's at basecamp.com slash shape-up, which talks. talks about how we do software development at base game and have really been doing it for the past 20 years. And one of the big ideas there is no estimates. No estimates. Don't give estimates. Don't require people to commit to estimates. Estimates are bullshit.

Because when it comes to creative work, which includes software development, we just don't know. How long is it going to take to make this feature? I don't know. It could take two weeks. It could take two months. There's a version of this I could probably do in an afternoon. What we focus on is budgets. Hey, you have four weeks to come up with a great version of this general fuzzy outlined concept.

And when you do it like that, you're inspiring trust in the employee that they can figure out how to come up with that great version of the feature. You give the budget that allows someone to work responsible, sustainable hours, that this isn't about crunching for 80 hours because you somehow got roped in to committing to some executives' hairbrained version. of what that feature should look like. No, you're doing this in collaboration with the designer you're working with on it, the support team you're working with on it, and you're going to come up with something great, and you're going to launch that. And that's going to be a much better way of working

rather than hammering people down to sort of these hard estimates. That really appears, though, is they're easy? We could say, like, oh, we should launch V1 in like two months. That's why you're here. You're hired to do that. Well, does the employee have any control over what goes into V1? If they don't, then it's really bullshit. Yeah, it's very interesting.

The point system when I first heard it, I was like, oh, that's interesting. Okay, so we're going to quantify something like you're saying. That's artistic in its nature, creative is nature. And so it's aspirationally very appealing to the business side, right? Like, oh, we have some predictability. Oh, we can take these artists and we can make them into widgets and we can define them like a sales executive. But the truth is, it is creative. And if you give people, a lot of this is about trust, right?

I think remote work is about trust and giving people, taking out the point system really is about trust with the team. We have a team that's qualified and you trust them. You say, listen, here's the canvas, four weeks. Here's the goal, a product that's worth paying for. Go. You know, you treat people like adults and, you know, you might get a better result. I guarantee you you're going to get a better result. There's been just a ton of research into this.

Drive 2.0 was a Daniel Pink's book, which outlines basically what motivates employees. And you go, they're motivated by mastery, autonomy, purpose. These are the things you can get when you line work up in this way. And I think that the sad thing about the agile development approach, which was, it was full of good ideas. But this point-based system is really a bad idea. Not only, maybe there was a kernel of a good idea inside here that like these points they could be personal, but oftentimes they're not, right? They're treated as objective as those programmers are just these machines you can plug in and you take out one programmer, oh, you lose 15 points.

You plug in another programmer, you gain 15 points. That's just not how things work. That's not how humans work. And I think it's just based on a fundamental misunderstanding of that, which makes it just a poor way of working. Yeah, it's very interesting. I think there was a goal in there and like any incentive system, this is one of the big problems with creating an incentive system in your own company is that people then start to think the incentive system is the goal of the company as opposed to the product. So you're like, okay, we need to get this many more customers. We're like, okay, let's get these customers. And then you find out those customers churn next month or next year. They didn't actually need the product, right? They're Wells Fargo,

right? You sign up a bunch of, you make a metric that is accounts opened and the people underneath you who are being whipped into fulfilling those quotas, they will meet them by any means necessary, including opening accounts for dead people, right? And fraud. I mean, you woke up one day and you had six accounts and you're like, what happened here? It's like, oh, fraud, an incentive system gone awry. This is the problem with all incentive systems. Incentive systems are simply bunk.

There's another great book called Punished by Rewards by Alfie Cohen that outlines all the scientific research on why incentive systems don't work. And the key reason is that they push out the intrinsic motivation that someone might have to do good work. And they replace it with extrinsic motivation, which is simply I'm going to sort of just optimize this thing I'm being told to optimize for. In programming and in software development, people would try for a long time. I mean, all the way back in the 80s, we could count lines of code. If we'd kind lines of code, we'll find the most productive programmer, right? I think even Bill Gates who said something about if you were giving sort of bonuses for,

lines of code. It's like declaring the heaviest airplane to be a success. That's just not how these things are measured. The best program is not the biggest program. The most productive programmer is not the programmer who writes the most lines of code. Yeah. And when you get to scale and a bunch of MBAs come into the business and try to quantify it and now you've got people thinking in this sort of metacognition about the business and they try to make it into a system. Right. And it's like trying to make, you would never do that with music, right? Or if you did, you create a boy band where you'd be like, okay, we've just manufactured, you know, boys to men or whatever we think people want, but it wouldn't stand the test of the times like Bob Dylan does or, you know, whichever

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The thing that really actually, I think, became, the eye-opener here in Silicon Valley is with remote work, when people stopped showing up to their offices because the commute became so oppressive in Silicon Valley specifically. You had these kids coming here to take a 150 or $200,000 development job. They would live in the city for $4,000 a month for a one-bedroom. They would get on a bus for an hour and a half, go to Facebook, come back for an hour and a and so they're leaving the city from whatever it is, 8 a.m. until 8 p.m. Can you imagine somebody doing a three-hour commute, somebody who makes $200,000 a year?

It's bonkers. Like, you're living life wrong, right? Like, this is not the model of a great life. A hundred percent. And I think this is one of those aspects of our entire approach to work ethics, so to speak, or what qualifies as hard work, that it's just utterly mind. blowing. I think on the same tangent, when I first read that Marisa Mayer was bragging about the fact that she was working 120 hours a week and she could do this by being strategic with her bathroom

breaks, I was like, wait, you're an executive at one of the most successful companies in the world and arguably you have worse working conditions than a slave in ancient Rome. How is this? Like, why would you subject yourself to such a degree of sort of poor work? conditions. It just, it blows my mind. And I think it's one of those key regressions that if you look over the decades, you look back to like, what were the aspirations of the white color workers or the managers in like 1980 or 1970. It was to take off early and go to the golf course and enjoy life and I don't know, I have, I don't know, a drink at 4 p.m. Right? It wasn't like, hey, how can I stay at work for as many hours as possible? Because that's my only source of satisfaction. And

and meaning in life. I think we've really just taken a seriously bad turn on that road. Now, if a person is an elite athlete, Navy SEAL, an artist, and they pursue their art, basketball, ice skating, whatever it is they're doing, training for the Olympics, whatever. And they do it for 60, 70, 80 hours a week, and the time passes really quickly and they love it. You don't have a problem with that.

First of all, I have a problem with the analogy because it's not true. If you look at any serious athlete, none of them are training 70 or 80 hours a week on any sustained sense of meaning of the word. They have these enormous breaks. I was just talking to my wife. I'm not a big fan of American football, NFL. But we were just talking about it. The season is over. And then I was like, when do they start up again?

Like in March or whatever? Yeah. She was like, no, they start up in September. Like, athletes, more than anyone, know that you need huge amounts of break. There's been a ton of studies done on this on, for example, the impact of sleep. There's a great company in Chicago. I think it's called Sleep Advisors. Oh, man, I should know this.

Hopefully we can put it in the show notes. But they consult for major franchises, NFL, NBA, and so on. They've quantified just the dramatic effects you get from getting better sleep, getting better rest. That's simply pushing all day, every day, all week, all year, That's not how you make a great athlete. You make a great athlete by doing concentrated concerted lessons, and then you have tons of rest. And I think this goes for everyone.

Regardless of whether you're a musician or you're an athlete or whatever, you need downtime. You need sort of a creative respite when it's a creative pursuit. You need physical respite when it comes to that. I work out with a trainer who's trained Olympians, and one of the things he always goes on and on about it. Like, dude, training for, days in a row, it's just going to destroy your body. You're not going to actually end up

being a better athlete. You're not going to end up being better at anything. And I think it's some of those lessons that lie just beneath the surface of a story of, say, Michael Jordan, like, oh, he was the first one at the gym and he was the last one to leave. That story has some qualifications that we would be wise to take into account. Yeah. I mean, Kobe was known for just a relentless 365-day-a-year work ethic. I think Michael Jordan was known more for going and playing blackjack till 6 a.m. and then going to the gym and still winning the game. He was almost like he was handicapping himself. He was so good. He just would stay out all night. No, that one in that case, it happens to be true. He was, no, no, no, no. I get the part, I take the part of, like, him playing

blackjack until 6 a.m. I don't take the part about Kobe working out, what, 12-hour days for 365 days a year. That just doesn't happen, which I think is another thing that's interesting here. There's been another wonderful story or study based on people who say, you know, say they work 80 or more hours a week? How long do they actually work? And people are full of bullshit, right? They consider everything. There was one example of like a CEO that said, oh, I'm working like 90 hours a week

and he was including everything. Like going out to dinner. Like, well, I was thinking about work. Okay. No, that doesn't. That's not what we're talking about here. I tell people who work for me that the average person, our investment company puts in, I think, 45 to 55 hours a week.

Of that, probably 30 to 45 is in the office and probably five is like responding to emails or texts and stuff like that off hours. I think a solid 50 and sometimes 60 is like the upper bounds of not burning out. That's where I've come to in my career is like, yeah, you know, there are times when things are competitive and you have to ratchet things up. I've been in those situations. but I think sustainability for me is somewhere in that 50-hour-a-week range. What do you think a sustainable work schedule is? I mean, obviously it varies by person, but let's just say in business, you're in a competitive environment you want to win.

Yeah. I think what's also fascinating about this is that we don't have to sort of just grasp numbers out of personal anecdotes. Yeah. That this kind of stuff has been studied intensely as well. And it's been codified into these social contracts that we're going to have eight hours for work, eight hours for play, and eight hours for sleep. That working a 40-hour work week is actually a really well-designed system. And it wasn't designed out of benevolence.

Like, it was Henry Ford constructing the Model T assembly line going, do you know what? If I make my workers work 50 hours a week or 60 hours a week, they just end up making more mistakes, putting parts in the wrong way. And I have to take essentially automobiles that aren't working right back and fix them. And it costs more. And his other reasoning, yeah, his other reasoning was, I want my workers to have a car and have a longer weekend to go drive it somewhere and stay at a motel overnight. So he's actually thinking, and I think this is one of the things that tech people have to start thinking about is, well, what do we want our, what do we want the consumer base to be? When you think about minimum wage, one of the best arguments for

Apple or Amazon paying 15 or 20 bucks an hour, which is the minimum wage in Australia and other, you know, sort of more functioning democracies is like, you know what? If they have that extra five bucks, maybe they buy an iPhone, you know, every 18 months instead of 36. Like, it's actually going to benefit you in the long term. And they did it up in Seattle. And it turned out the restaurant, they thought the restaurants were going to all go out of business. And it turns out they had more customers. And it was like, hey, geniuses, the people who work at the restaurants are going to other restaurants because they can afford it again. It's kind of interesting. those things were just like, hey, if we just made a slightly fair, equitable society, oh, wait,

it's better for everyone. Like having just a tiny handful of people hoarding everything at the top, it doesn't even benefit the tiny handful of people hoarding everything at the top. It's just, you end up creating a worse society in all the factors, right? Not just the economy, but politically and socially. And on any factor you care, measure the prosperity and success of a society, you end up just fucking it up. Like, you really need to, to design society around like something like a Rawls veil where you go, hey, if I didn't know where I end up, how do I want society to work? If I can't

decide at the inception that I'm going to be part of the 1%, what kind of support systems would like? What would I like my healthcare system to look like? What would I like my education system to look like? What would I like my socioeconomic support system to look like? Yeah. It's not super complicated moral philosophy here. Tax season is almost here. And if you are a small business owner or if you work for yourself, self-employed, you're going to want to get your taxes done by somebody you can trust, whether you're a freelancer or a gig worker or maybe you've got some complex capital gain stuff going on, huh? Like an angel investor might like me? Well, tax file is the answer. You can get your

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and watch the magic happen visit taxfile.com slash twist to get 15% off your return up to $20. And that's T-A-X-F-Y-E dot com slash twist. T-W-I-S-T. again, tax file for supporting independent media like this week in startups. Let's get back to this amazing episode. You grew up in Denmark? I know you went to university there. And that is interesting. There's a term getting to Denmark, which means getting to a high functioning society amongst the elites in the globe, like when they go to Davos and other places, I haven't been to Davos, but at other conversations with these globalist type people that are like, we have to get to Denmark, which is a really great compliment. It means what the people want is what they

get in their government. When we look at America and how amazing we've performed on a capitalistic basis, but how poorly we've performed in government services, healthcare and education or a disaster here, we spend the most, we get the least. But on a capitalist basis, we have the giant companies that for a little 300 million person country are, you know, taking over the globe. And we are the benefactors of that as a country. What do you think about that balance? where our government's completely dysfunctional. We don't get what we need out of it, yet we spend all this money.

But capitalism, you know, unconstrained capitalism in America, I would call it. We're very vibrant, you know, less rules-based capitalism, let's call it.

Fluid capitalism, extreme capitalism. There's got to be a word for it. Extreme capitalism. Late stage, I think, is the insulting word for it because it kind of says like this is the end of the game.

Yes. So late stage capitalism or extreme capitalism, I'll call it. was it worth it or not worth it because we do you know have google and facebook and amazon and all these incredible services uber Airbnb we we are the owners of those as a country those companies right so was it worth it or not well first of all we're not the owners there's a small handful of people who are the owners who get the benefits uh the lion's share of the benefits

of those companies so positing as though like hey this is a shared benefit America is doing a disservice to all the people who this is not a benefit at all. In fact, they are the prey. If you look at companies like Facebook and Google, there's certainly people who benefit from it. And then there are certain people who are being exploited by it. And I think perhaps that's even more concrete when you look at the gig economy and you look at companies like Uber or DoorDash or any of these other atrocious companies who

essentially have built their wealth off exploitation and violation of people and misclassification misclassifying them as contractors instead of workers. But let's put that aside and take the big picture first, which is sort of is capitalism a good thing. This is one of those arguments that I always find so fascinating because in the context of you saying getting to Denmark, that's the goal, right? Denmark is a capitalist system. What are you talking about?

They're free markets. They're free companies. They're not state-owned companies. Much of Western Europe has simply decided that there's certain parts of the economy, that certain parts of society that operate poorly under market economics. They are education and healthcare in particular. So if you look at most of Western Europe, it's not just Denmark, although Denmark is perhaps a, well, really all of Scandinavia,

is a particularly well-functioning example of the government running healthcare, not paying for insurance, running. Like the doctors at the hospitals, they're employed by the government. The same thing is in the UK. and you take education, the universities in Denmark, they're not sort of private universities where the government kicks in on the dead scale. No, they're run by the government.

And you know what? They're run really well. In fact, when I came from Denmark to here, I was astounded at just how poorly those two parts worked. When I came to the U.S., I had a girlfriend at the time who was enrolled in Loyola University. And first of all, the cost was just obscene.

I think we were paying something like a 30 or 35 grand a year for the year. that, I forget the specifics. When you come from a country like Denmark where education is not only paid for by the government, there's a stipend for any student to cover basic living expenses. Explain that, because that's mind-blowing to Americans. Explain how the stipend works. How much is it?

How do you get it technically? It's not means-tested. So if you are a... Well, actually, that's not entirely true. If you work... Anyway, let me just go to the basic. The basics is that you get about $1,000 a month to pay free living expenses while you attend university. And you can do this for up to, I think, like, six years or something, which a master's degree in Denmark is usually around five years.

And then they allow you one year to essentially gap it. Most people don't necessarily finish their master's degree in five years. And then I think there's probably also an extension available if you pursue a PhD. The interesting part for me, though, where you can sort of say, like, how is this affordable? is that in an American frame of mind, you think, like, oh, is the government really paying like 30 or 40 or 50 grand a year for all these students? Of course they're not. The education system is incentivized to be efficient. My entire education at the Copenhagen Business School, I looked at this once, and I thought it was something like $18,000 for three-year bachelor's degree. That was what it cost the Danish state to produce that education. And you go like, well, that's obviously a lot less. I know there are some examples where in-state tuition, and so and so forth. But if you just say, what does it cost to educate anyone who wants a higher education and give them the stipend to allow them to live while they do so?

What will it cost society? And the answer is a whole lot less than you would think, a whole lot less than what is spent on the American system, which is a system that's heavily gate kept, right? Either you have to have these extreme grades and you almost have to prepare for college and kindergarten or you have to be very wealthy. That's a broken system. And then on health care, it's the same thing.

Denmark has great health care. Now, every society, even if they have great health care, have people who complain about that health care. That's just the nature of it, right? But if you look at the overall stats, life expectancy and all these basic things, Denmark does just way better than the U.S. And Denmark spends something, I think it's like 8% of GDP, and the U.S. spent 18% of GDP on health care.

So you go, here you have two of the most important functions of society, health care and education, The American system is a for-profit capitalist system that is just being whipped by state-funded and run systems. And you go, like, do you know what? That should just give you some room for pause here that maybe the capitalist system in all factors of the society is not the clear answer. That doesn't mean that we can't have for-profit companies producing phones.

Yeah, that works great. Like, hey, get your phone on the free market. You're not that interested in the free market when you're about to die. Yeah, I mean, it does seem like when you do this hybrid of, because we do have Medicare and we have some state sponsored things and we have some like, you know. And people love him. Well, they do love him. It's like they're fighting for it. That's how they make their decision on how to vote is for that.

So it is even more. We just have to go one way or the other. You know, I think it has to be completely capitalistic or it has to be, you know, in a free market where customers are paying. But we've picked the worst of all worlds to tie it to employment creates the most. It's the most unhealthy dynamic. But, I mean, I have people who can't work for some of the startups I've invested in because the health care is not good enough or they can't leave a company that's hit scale because they can't get as good health care.

So now you have employers dealing with employees who either don't want to go or don't want to leave and it just creates this total dysfunction, right? Like in terms of like we were talking about before in the... Isn't that ironic that here you have a market sort of approach that's essentially under undermining the free market. It's undermining the free movement of labor. People can't change jobs. They can't do all these things. And what are we doing this for? For some sort of ideological obsession that the free market is the right answer for everything, it is so clearly not the right answer for health care. And I think failing to address that is creating some of those great frictions in American society and American politics. And I think hopefully we're finally getting to the point where people have just had enough. And of course they've had enough. You look at all the objective measures of medical bankruptcies or the outcome of the medical system. You go like, this shit is broken. And I say that as someone who's very rich in sort of comparison to the standard.

And I can afford any kind of health care I want. And I've gotten any kind of health care I wanted. And the system is still completely insane. I go in to get some sort of checkup. I have to fill out more papers than, I don't know, applying for a driver's license in the Soviet Union would have required. right? You go like, the system is more baroquely bureaucratic and just

the whole wrestling of everything with insurances and so on. It's just bust. Like, on all objective factors, the system is just bust and it needs to be replaced. Yeah. I mean, in this we are in agreement. And it seems like when you talk about getting to Denmark,

America, it seems like it takes an extra decade or two to get through these things. If you look at gay marriage and you look at cannabis regulation, you know, we're so far behind on these things and then it tips at a certain point. No, this is what gives me such hope about America that for all the failings in America, there is absolutely a willingness to change. Cannabis? We're not legal in Denmark. Not legal in Denmark. It's not legal in Denmark? Not legal in almost all of Europe. There is a, Portugal and in Holland,

these things, there's either decriminalizations or full-on legalization. It's not legal anywhere else. And this has happened in the U.S. in a very relatively short amount of time. And this is what gives me such hope and why I agitate so lively for all these advantages. I know American can do this. And I know it particularly so because, as you said at the top of the start of this, is America is uniquely rich. You look at GDP per capita. America just trounces Denmark. It's more than 20% higher GDP per capita in the U.S. than it is in Denmark. The money is here. It's just being spent very poorly.

18% of GDP spent on health care, bonkers. The fact that the federal government can't provide these services is simply just a factor of taxation. The U.S. collects something like 17% of GDP in taxes. Compare that to France or Denmark, and it's in the mid to high 40s. Literally in Denmark, we collect three times the amount of GDP per capita to per capita to provide these basic services to society. And what do you get?

You get Denmark is literally number two on the list of happiest people in the world. Number one is Finland, which has a very similar system to Denmark, right? And the U.S. I think is 19. And if you just think about, like, also, when people get pregnant and have babies, you get time off paid for by the government

or by companies? How does it work? Usually it's a bit of a combination, but yeah, that's a great point because this is really all of Western industrialized world has paid parental leave. Yeah. The U.S. has none. Like literally zero weeks assigned in general worker protections. You go to a place like Denmark, you get six months off at full pay, and then you can take additional time after that at reduced pay.

And you're like, I mean, I have three kids. Yeah. Well, we have three kids. And I haven't gone through that, I just, I can't even imagine someone who has only like two. weeks. Yeah. To from when, when they have a kid until the wife has to get back to work or the partner who had the kid has to get back to work.

You're like, Jesus, that is just inhumane. And why? Why do we need that, right? So that's one area where I actually give tech some kudos that there's been some movement here on policy that a lot of tech companies actually have quite generous parental leave programs now. Obviously, that should just be a societally. Yeah.

And also, I should actually say, tech. companies have these wide, generous policies for their treasured unicorn employees, their engineers, their designers, the project managers, they're not exactly giving these benefits out to their gig workers or their call center staff or any of the other worker areas of the economy. Perfect, perfect segue. You were lamenting the gig worker economy and that they're being exploited. I'm curious, if you look at, you know, being a ride-sharing driver or delivering food as an entry level, you know, I'm going to work at 20 hours a week and make whatever, $12 to $20 an hour, depending on how busy it is. Do you have a problem with that or do you

have a problem with it starts to tip over into full time, they should get benefits? Because it seems to me like these jobs have already existed and nobody complained about them, but if Uber, Lyft and Dordash become large companies, then all of a sudden it's like, well, this feels unfair. Well, it's just exploitation on an industrial scale. And I think there are many problems here. One problem is that no one is taking home after expenses 12 to 20 bucks an hour. There's been numerous studies on this. Basically, everything hinges on the fact that you convince gig workers to run down the assets that they have. You convince them to run down the asset like their car, defer maintenance, defer depreciation, basically not dealing with any of the costs of actually

providing the service. And so even in the best of cases, or I don't even know if it's a best case, even in the case where someone just works 10 hours a week because they want to make some extra cash is utterly exploitive. The fact that gig workers are not being paid for their expenses, the fact that they're not being paid while they're waiting between jobs. I saw one study just come out, was it last week, about the fact that Uber and Lyft are majorly contributing to congestion in cities to traffic because 40% of the time spent working for these apps are spent without passengers in the car. And those 40% of that hours, they're not being paid for that hours. So if a freelancer, though, I mean, you've worked with a lot of freelancers.

If a freelancer is between writing blog posts or designing logos, but they want that flexibility, shouldn't they be able to have it? And be 1099? I think there. Or can only rich people be 1099? Sure. I think there's just a material categorical difference between someone who's making essentially no money after you account for expenses. or whether that makes up for it or not. Everyone I've ever known who've done consulting in tech,

they don't charge like what a full-time worker would get paid per hour. They charge, what, three, five, ten times as much because they know that the job and the income is lumpy. So you might have a great contract here for a month. That's full-time. Great. But you've got to make essentially three months pay to fill up your funnel and deal with that.

So it's just not at the same scale. I think that the fundamental underlying issue here is that gig workers, as you say, they should be paid $15, $20 an hour after expenses, accounting for time spent servicing the platform. And that includes the time driving from dropping off one patron to picking up the next. Yeah, I think now Uber is doing that. They pay for that time, but I don't think they pay for the wait time.

And there's a minimum now with a 50 cents an hour or whatever, 50 cents a mile fees. So I don't think you're correct in that they're making under what would be minimum wage at any case because why would millions of people then choose those jobs, David, if there are so many other jobs that are looking? Like, why would you choose to do this if there are so many assets? This is desperation. It's kind of like, why would anyone ever get a payday loan? You know what the interest rates are in payday loans? They're outrageous. Why would anyone ever do it? This is a multi-billion dollar industry. When you have an asset like a car and you need cash, sometimes you will look at that equation and go, do you know what?

It may be I'm deferring maintenance. It may be I'm running down my asset. But that's tomorrow. Today, I need 80 bucks. So I'm going to drive for Uber or Lyft or DoorDash, even if on the long scale. Or all three. I mean, most people are using multiple. And then on the long scale, I'm not going to make any money, but the long scale just

doesn't matter. Tomorrow matters. Paying the bill that's due now matters. Picking up groceries matter. And this is kind of the precar or preying on the precarious. that I find you so disappointing. And I find it doubly disappointing because I remember when Uber first came out

and it was essentially black cars, right? And I thought like, wow, what a great idea. And this was a relatively expensive service because it is relatively expensive to have a private chauffeur, right? This is the other illusion we have here is that suddenly everyone could afford to have private chauffeurs, private shoppers, doing all this work for them, while those workers were being well paid

and the companies turned into multi-billion dollar companies, no, no. Society didn't just fundamentally change in any of those ways such that we could all enjoy an army of servants. So I think that there's just, there's some fundamentals here that are uncomfortable. I think these companies are continuing to be unprofitable because the real product that they have,

for example, getting chauffured around, is a high-end luxury product that people just can't afford at the scale, of its current use, that maybe there's a great Uber that's a $2 billion company or an $800 million company or whatever the size of the industry works for black caps. Be careful with the valuation talk, David. I still have a big piece of that company. Let's not run down the valuation just yet, okay?

Well, I think this is exactly why I need to talk about it, right? Because I don't have a piece of any of these companies, which is why I talk about valuations in general, because I think they're really important. And it's really important to examine who owns these companies, who funds them, and look at like how does that maybe buyers their view on whether we should have a broad social net and whether companies should be required to hire people as employees. Well, I mean, the argument, I think, for low prices for Ubers is that it gives back to the discussion about, you know, people having access to stuff.

It gives a larger group of people access to actually get a ride when they need one, right? If I lived in Brooklyn and the boroughs, you couldn't get a taxi. you know, you might be able to get what they called the gypsy cab back in the day. You pay somebody under the books and an illegal car, three or four bucks to take you somewhere. And Uber does provide a really safer, much safer, tracked, you know, down to the millisecond, like where the car is and vetted approach than those cabs, right? And so that was progress in my mind. Yeah, maybe, right? You saw the Uber safety report.

What, 2,000 rapes in a year? Well, I mean, you have to understand the denominator on these as well. I mean, the denominator is giant. They did 1.7 billion rides in a quarter. Sure. And they're releasing it. Let's not pretend that they've solved the inherent safety issue that is getting into a stranger's personal car. Right?

They haven't. Maybe they've made it much safer. I don't even want to argue that point because I think they've made it. I think it made it much safer than a cab. Uber is a better product in the user experiment. Yeah. In user experience. And safer.

You admit it's safer. Right. It has to be safer. I'm not going to see that point. But I would put that one aside. Here's the thing. It has to be safer because you know exactly where the cab is at every point and you have the credit card number of the passenger. So for both parties, you have their entire history of where they've taken people and you have the minute-by-minute location, second-by-second location of the car.

With a cab, you know, you could have any – people used to share licenses in the yellow cabs and they could drive anywhere and they're not tracked. And there's no central dispatch tracking it in real time where you can press the safety button and say there's a problem. Sure. On remediation, on following up if there was a great investigation into these claims, you would have more data. No doubt about it. One of the key problems with Uber and other platforms is they've been very reluctant to do that. Not only have they been reluctant to do that, they've been actively interfering in investigations. One of the main scandals that came out before Uber went public was when one of the senior executives went to India to essentially, what, get the medical records on a rape victim there because it was looking bad. I think it was just, This story is very muddy on whether safety is actually better. There's been some regime change there. But you don't. Yeah, sure, right? Do you know it costs at least five times as much to acquire a new customer as it does to keep an existing one?

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That's helpscout.com slash twist to get started today. And thanks to my friends at Helpscout for supporting independent media like this week in startups. It means a lot to the fans of this show and to me and my team. Okay, let's get back to this amazing episode. What do you think the result should be of, because this is one of the statistics I got early on from TK and other folks was, and it's still true today, the majority of drivers are switching from 10 hours to 50 hours the next week, like massive swings and how often they want to work and how they want to work. You're a proponent of people having agency. You just said and you wrote a book about it. You've orchestrated your company around that.

So you yourself say, hey, this is how white collar workers should work. Shouldn't the blue collar workers be able to have the same freedom that you yourself, promote for white collar workers, set their own schedule. I think that's a great debate because it's this fallacy of what blue-collar workers want most of all is the freedom to choose. They want the flexibility. Absolutely not. If you ask these people, what would you rather?

Would you rather have the flexibility to set your own hours? Or would you rather be paid, let's say, 15 bucks an hour, have benefits, have sort of an expectable schedule. They'd go like, of course I'd rather have those things. No, I think you're 100% wrong. You just said yourself that you want to have lunch with your family and go for a walk outside. That's exactly what these people want. They're no different than you, David.

They want to drop their kids off at school. No, that's exactly doing. They're dropping their kids off a school. They drive Uber for a couple hours, pick their kids up, drop them off at whatever they're doing in the sports or something. And then they go do a couple of rides. That's exactly the pattern of people who are using the gig economies that they want to do hours of work and pockets that they can set. That's what they report themselves. That is the idealized version of the people who don't live at.

the edge of precarity. I just heard a stat that was 90% of all the Uber drivers in New York, they work full-time. And when you talk to these drivers, as I've done a fair bit, not on Uber, because I refuse to use Uber after the torn of scandals. But I still use Lyft, and Lyft is essentially the same system with marginally better governance, perhaps. But when you talk to these workers, like, they're concerns or not? Like, oh, yeah.

And then, like, in the morning, I was just playing with my kids in that. No, no. Why would they work full-time? Wait, wait. But if you're saying that they're making less than minimum wage and they're being exploited and they're working full-time, why wouldn't they take one of the massive number of full-time jobs available at Starbucks, Apple, Walmart, Target, all these places that can't find workers today. Those people cannot find workers and they pay 15 bucks an hour, 12 to 15 an hour at those places. Why would they take the car driving job if it's so bad?

That's where I think your argument breaks down because they're opting into it. And you said before, like, well, they're doing it on the margins. But now you're saying they do it full time, which might be the case in New York. If they are full time in New York, aren't there better options if they're making under minimum wage, which they're not? They're making, it's guaranteed in New York that they're making. Which is why the churn is so high. I saw another stat is basically like 100% of the drivers churn every year or something like that. Like truly estomically high.

Not that way. And part of that is that people realize what the true cost is after it's been a while. Like taking two Uber rides or doing it for a month, you don't. don't incur any of the costs that are inherent with driving your own automobile around, right? You're not going to be changing tires. You're not going to be having to change a transmission. You're not going to do any of the things that happen if you drive 200,000 miles, right? So I think this idealized version that is essentially sort of suburban people who just want to make a little bit of extra cash. And that is how this is made up. It's just bunk. It's not. Well, I think the original idea,

by the way, just to give you the original idea. Maybe that was the original idea was if you had I think the problem is if somebody buys a new car and they're experiencing that huge depreciation, that is an issue. The idea always was with Lyft, especially, or Zimride and sidecar, those first ones was, hey, you got this car already. You know, you've already bought it. That's the expectation. You might as well use it for some and make a little extra money on the side and pay for it. And that was sort of the expectation in the early days. And then people liked it so much.

The drivers liked it so much. They opted into doing it as careers. because those people do have agency and could go work in other jobs. I think it's one of the problems where your argument breaks down, David, is that you think rich people have agency and can change jobs,

and you think the poor people don't have agency and can't change jobs, they can. This just happens to be an entry-level job. That's how I look at. It's an entry-level job. They'll change from one level of exploitation to the next.

If you look at the people who are actually making minimum wage, which, by the way, it's not $15 in most of the country, right? Like, it's closer to $7 or $8 in most of the country. oftentimes people who are making minimum wage and dealing with that situation, they don't have real agency, they don't just work one job, they work multiple jobs.

And in any case, I think there's a sort of maybe, I mean, as some of these arguments we've had on Twitter, you're an investor in Uber, right? Like, I'm not going to convince you that Uber is a predatory organization that exploits

poor people because, like, that's just not cognitively dissonant with your position. Right? If you want to ask me what my position is, actually my position on it is I think it's provided a massive safety net for society of an entry-level job that anybody can do at any time to make money. And that actually produces this great foundation, which has resulted in us having the lowest unemployment in the history of the country. Because we have these entry-level jobs that people can jump in and out of while they plan for better jobs and increasing their skills, which are freely available to learn on the Internet, they can go learn any skill on the Internet and level up. Because this is the American dream pitch that you start sort of at the entry level, and then you have all the opportunities available to you, and you will pull yourself up and you will get to a better place.

The only problem with that is the American dream is false in America. If you look at any of the studies on social mobility, the U.S. have one of the lowest degrees of social mobility. Wait, false how? False that it's not happening or false that it's not possible? Well, everything is possible. That's an uninteresting discussion on a socioeconomic level. The interesting discussion is at what rates does it happen? At which rate does someone from the bottom 10% end up in, let's just say, the top 40%, right?

And the rates in the U. And it's not even bottom 10%. It's more like in the bottom 80%. What does it take to go from blue color to white color in the U.S.? And this is one of the things I care about because that's what I went through in Denmark. My parents were absolutely working class. They were probably working class poor. I didn't know.

I didn't know until I was maybe 16, 18. Because I had no consequences from it. I got a wonderful education. I got a great healthcare system, which, by the way, I needed because I had some hearing issues when I was a kid that required multiple surgeries and so on and so forth. We never paid a dime for it. It was never in our consciousness that access to medical care was something that was charged for, right?

So I had the experience of essentially living through the American dream of ending up in a far better place than where I started socioeconomically. And if you look at the statistics, sticks. America just sucks for that. Like, if you were born poor, you are likely to end up poor. There isn't this great transmission of poor people ending up being rich people

in the... Why do you think that is? It's possible. There are lottery winners. There are exceptional individuals who will sort of defy the odds. That happens all the time. It happens in all societies. But that is not a great way to gauge whether you have a fair and sound society.

And why do I think that is? A lot of it is about these sort of baselines, right? That, hey, can you get a great education if you're poor in the US? It's pretty difficult. You can be an exceptional student and then maybe you can get scholarships and so on and so forth.

But if we're only allowing the exceptional out of poor people to essentially get a proper education, well, we really haven't solved anything structurally. We've just allowed a handful of very fortunate and perhaps very skilled people to perpetrate the myth

that the American Dream is still alive and it's not. It's absolutely dead. Yeah, see, the only problem with the argument that the American Dream is not alive is that I see it every day in what I do here in Silicon Valley. Because you see anecdotes. You see anecdotes. You don't see anecdotes. I don't see the experience of 300 million people. You see a handful of people and you see the ones that are exceptional by the fact that they're in front of you, right? How many poor people are making it in front of you, making a pitch to you? None of them. Right? No, that's not true. That's not true. If they are, if the acceptance. A large, I would say a large number of them come from blue collar backgrounds with their parents. That actually is a trend where that, I think, stress. How many people have you seen? A thousand? Well, besides the two of us on the phone call here, yeah.

It's, I would say it's a significant portion of startup founders come from that background. But that could be an outlier situation where we are, there is a bias there. I guarantee you that it is because I've actually looked at the stats. And if you look at the stats for social mobility, which is the way you write the American dream, Can you go from racks to riches? It happens worse in America than almost any other Western society. And you just go like, for me, as someone who's immigrated to the U.S., I just go with indignation. That is fucked up.

How did we end up with such a society? Why did you have such a different experience? Why did you become such a special experience? First of all, I was prepared for that exceptional experience by going through all these safety nets. I guarantee you I would never have been qualified to work with Jason and sort of start the company and run it for 20 years with him, if the Danish state had not paid for my health care, had not paid for my education, had not paid for all of these things that made my sort of lived experience such that I didn't feel like I had to drive a taxi like my dad did.

Right. My dad was a bartender's a very similar job. That's a statement of truth. Like my dad literally drove a taxi on and off in Denmark for quite a while. And yeah, I didn't look forward to that being my profession. It didn't even occur to me that that was something that I had to do, right? Like I was on a different track right from the get-go because there's a social... How much of the upward mobility do you think is people giving up on the American dream and not being motivated to go online and learn? Because when we were coming up, none of this information was available online. Today, every course at MIT, majority of the courses at Stanford,

Harvard are all available for free. And if you had somebody come into your office at 37 signals, makers of course, basecamp.com, and they said, listen, I took these six courses, over at MIT, here's my coursework and AI and you were hiring an AI person, would you in any way care of that they had gone to MIT and paid them or had just done the courses online? And in fact, would you not pick the person who was self-motivated enough to take the six courses in AI machine learning and hire them over the person who paid? Because I think it would be the latter. Yeah. Yeah. I mean, we've never cared about credentials at base cam. We don't even look at these things. I don't know at which universities, the people who work with me at Basecamp graduated from.

It's just not interested. We look at the skills. But when you look at those skills, it's absolutely true. The information is out there. What is not out there is the time and the prerequisites to chase it. If you don't have the – I mean, there's a reason when people go to college, they consider that a full-time job. They may work part-time on top of that, but going to college is a full-time job. It's not a whole lot of people who just have 40 hours a week or even 20 hours a week to just say, do you know what?

I'm going to, after I've been at a brutal minimum wage job, I'm going to get online and I'm going to study for five hours a night. The people who do that, they're truly exceptional. And how do we know that? Because there's so few of them. So the proof is in the pudding. No, maybe not. This may have to do with motivation because, you know, the average American watches four hours of TV a day. So if they swapped out but two hours of that, just a half of it and watch education material, would they not in a year or two be, upwardly mobile in your mind? No. They wouldn't. Really? Blaming poor people for their predicament is just, it's not an avenue, I think, that's very interesting. Because you can do just comparative social studies.

You can look at what happens in societies that have these well-functioning social nets that help people up. Like, what are the broad trends? I'm in agreement with health care. I don't think Danes are any smarter than Americans, right? Absolutely. It's a better system. That's not something Americans think.

Yeah. We should have a world-class education system. like the Danish, obviously. And we should have world-class, you know, healthcare. But putting that aside, the fact is that all the information... I'm just going to stop you. You can't put those things aside. If all the information is available to learn freely on the internet, freely, everywhere,

you turn, any school can be learned. And we're hiring people to your own admission based on their skill, not their credentials. Then maybe the educational system of going to college and spending all this money and having credentialing should give way to just learning skills quickly and the ability to do that on your own. It's much more affordable, right? It's a theoretical ability, and I think

it's fine that it's available as an option, but I think we have a larger responsibility to society than simply cranking out workers. We should be cranking out citizens, people who are broadly versed in not just a narrow technical skill like, oh, I know JavaScript. Yeah, okay, that's good. You know what? We need fewer people who just

know JavaScript and more people who know JavaScript and ethics and geography and all these other things, right? Like these are tool skills. This is like, hey, I'm really good with a calculator. What can I do? You know what? That's not that interesting. And I think it's really damaging for society as whole.

It is interesting. The purpose of society just being, can you get a job? But it is interesting to add those skills to get out of the low paying entry level jobs, like delivering for Door Dash Lyft or Uber. I agree. It's just not happening, right? You can just look at the statistic. Right now, the masses working for Uber, Lyft, and DoorDash are not going online and they're not getting these amazing degrees, right? In fact, they're often getting... Because it's hard, right? I went to a university degree that was essentially a hard for an individual. It had professors, it had classmates, it had all these reinforcing social contracts that help you learn to just sit down on your own in front of a... browser and then expect like you're going to be a world class programmer you're going to be a world class it's possible but it's exceptional and on a societal level we can't just look for exceptional solutions we must look for the common solutions that simply empirically work not just

the ones we we sort of hope would work right so here's one that seems to be working development schools seem to be producing some number of qualified developers and obviously there are some controversy around these income sharing agreements, ISAs. Lambda school is one. That's the one most people know. It's 20 or I think you pay 20 or you do 30,000 and they take a percentage of your salary capped at 30 or something like that. Do you think that's net good for society, that innovation of ISAs?

Or do you think it's just a band-aid capitalistic, you know, acceleration of what's wrong with the American system? When do you stand on that one? On my talking points, that last one, that was a zinger. It is absolutely a bandage on capitalist society failings. The fact that anyone would think that getting a remote sort of learning experience for nine months, like that's something people should be on the hook for 30 grand for, it's just truly mind-blowing.

I think on that particular issue about ISAs, they have all the same incentive pitfalls. at subprime mortgages did, that essentially the originators of these bonds, they get to sell them off and do, I mean, that's the controvert, well, controversy is a shitty word. The sort of...

It's the rub. Backlash against Lambda right now is the revelations that they're selling off the ISAs. Yeah, they put them into a bundle like mortgages and they sell them to somebody to go collect on them. Yeah. Like, what the fuck? We've reduced people to tranches in a...

messing sort of securitized product. And then they're on the hook. And they're being promoted. I read some of this promotional materials from some of the hedge funds and lending institutions who are partnering with Lambda about it. And they're all about, this is a great new avenue for attractive returns. And you can get 8% on like, hey, these are people. Like, do you know what?

There's just something, something aesthetically, extremely revolting around packaging people's lives up in this ways, slicing them. and then selling them as a secureization, when what we really should have in the first place is what's on the actual docket right now in the political system. Hey, cancel student debt and make higher education tuition free. If it's the state-run affordable one, not let's give, you know, it's $50,000 to Loyola or something.

Stanford or, totally. And you know what? That's the other thing that I think is so funny about the American system is one of the reason I don't give a shit about whether someone went to Stanford or Harvard or whatever. I went to Copenhagen Business School. I don't know if it's on list of good schools. I don't think it is.

I didn't get an amazing education. I got a good education. It was fine. And you know what? That was all I needed. And that's what most people need. They just need a fine education. They don't need a luxury retreat for 50 grand a year that has sort of name brand professors.

We're an agreement on this one big time. Yeah, exactly. I mean, what are you paying for? You all need to go to CES Palace for education. Yeah. It makes no sense. people are going 200k in debt and their job prospect with their philosophy degree or whatever it happens to be, even a developer, is a fraction of the debt they've accumulated, like their entire

salary. For what purpose? It makes no sense. And then other people are paying their way to get in, you know? It's deferred. They're not paying 200 grand up front. No one is, right? You just, you accumulate student debt until you're crushed.

And this is how we ended up with $1.5 trillion in student debt in the U.S. It's an absolute emergency. And what the other part about that's just horrific is, you know, young people don't have their frontal cortex fully developed, which is where long-term decision-making comes from, which is why they'll like do, there's like a lot of viral videos on the internet of, like, young college kids doing stupid, dangerous shit is because they don't have long-term thinking yet. It's not, the literally brains are not developed.

So they take on a life debt. And we want to give them the agency for 200 grand of debt? No, it makes no sense. I like the, I like the idea. do you have Lambda school because putting aside the, you know, bucketing people into like a tranche of here's a thousand loans, you're going to make 8% on it. I like the fact that it's an option because these are high paying jobs.

You have a really good chance of getting one when you graduate, even if it's just 60, 70, 80K. No. As a job. First of all, this whole thing with placement rates is I've been getting a lot of information about this. Really? You think it's a scam?

Once I started tweeting about it, I got a bunch of people who knew what things looked like on the inside who started sending me messages. And I think once journalists and so on begin digging into what the actual placement rates are, they're going to see a system that is just underly, at Lambda School, that are underly unsustainable. That this just doesn't work very well. That for a lot of people, you literally cannot take them just off the whatever they were doing before.

If they didn't have the prerequisites, put them through a nine-month program. I thought they made people hit a certain prerequisites. I don't think they let everybody in, right? They do require some prerequisites. Whatever they're requiring. It may not be enough. The outcomes aren't there. Yeah.

What do you think the outcome is? This is not my information to share, so I'll let the sort of journalistic rigor of reporting roll through. Let's do a scenario here. All right just been to great pieces. Okay. Let's, yeah. Somebody's going to win a Pulitzer. So here, let's do a thought experiment.

If a hundred people went through and paid the median 25K of 20K forward or 30K. No one pays to 20K. By the way, no one pays the 20. I know one person who did. I think the rate is literally zero. I know somebody who did actually. They made the calculation. But anyway, it's probably a low number because why would you take the risk up front?

The whole hook is with 30. But it's only 10,000 more. So 30,000 over the course of, you know, whatever, let's call it a $75,000 entry level JavaScript position might be. But anyway, putting that aside, of 100 people, what do you think the number is that have to get a job in tech, you know, in the entire scale to make it worth having this program? What do you think is the acceptable rate? Well, the funny thing is you can just do the math, right?

So let's say you take a bond out on someone for 30 grand. What does it cost you to provide the education? And then you go, like, let's say it cost five grand to provide the education. You just needed one out of six to essentially go through. And then you would be break-even if, I mean, all things being equal, you're not considering acquisition costs and so on. This basically means that you can set up a system where you just expect that two out of six, right?

Now you're at a profit. That four out of six people, they're going to fail, right? You don't know which one is going to fail. It's almost like VC economics. It is. I just need one hit out of ten. Then I'm golden and fuck the other nine.

Right? It's one out of a hundred. I just need two students out of the six. Then I'm golden. Fuck the other four. And then you read some of these stories about who the other four were, how they were sold on the program,

how they got enrolled in it, what they had to give up in life and so on and you go like you know what just going fuck the other four that's a really are they hard selling them you think they're hard selling them the whole pitch the whole pitch is like hey you're working some entry level job somewhere making what $32,000 a year yeah here's your golden new opportunity in the off worlds jump on this later on a ship and we're going to take you to a 75k a year job all you have to do is go through a nine month program we're going to you're good you're golden yeah which is just not true. And I think that that's, it is predatory.

Well, I mean, we'll know if it's predatory. Let's get to the root, though. Let's get to the root, which was you labeled the root. This is a band age. Do you know how many people who would sign up for 30 grand of debt for a nine month program in Europe? I'll give you a hint. It's zero. Yeah. Because they just could go for free. Yeah. They can just go. And whether they could go to university or not, I mean, there are other, you could say like, well, I don't have four years. or three years as a bachelor's program takes in a lot of European countries. I don't have three years to go through it. Totally fair, right? It's just on the broad scale, people in Europe are not signing up for a 30 grand debt for a nine-month program.

What do you think if they charged $5,000 and then got, you know, whatever, 25K over five years, if you got a job, but if you didn't, no problem. You're not on the hook. I think once you lower the economics to such a level where it's not existential,

it's completely different. I think it would, I'd like those models a lot better. And there are actually a bunch of... Somebody's doing a free one, right? There's a free code school. Yep, yep, I think which is wonderful. It might be called free cold school. This is, if you're going to do a bandage on the failures of capitalism,

do the bandage as charity. I have the outmost respect for the people who try to soften the blow of American capitalism through charity, especially the kind of charity that's not just writing a big check for a tax write-off, but the kind of charity that is personal. investment of their time, their empathy into real people. That stuff, I lay down in my knee and I bow down in admiration and respect. I think that's a great way of going. And then there are other schools that are commercial, but commercial on a completely different level. Some guy which just wrote me last week talking about this school that's like 200 bucks a month. It's this. Oh, that's great. No sense of vetting this. But that's still, I mean, $2,500 a year. And I think they said the whole program took about 18 months or something. So that's roughly in this. That's like playing a phone bill, you know, or your cable bill or something, like your phone and cable bill. It's like two of your bills. Clearly, let's not sort of undermined the purpose. We were just talking about precarious gig workers. A lot of them don't have 200 bucks extra a month to spend an education. But regardless, there's a huge difference between. So you're saying poor people can't put together 15 hours to increase their future. So this is where I find yourself a little condescending in that regard. I think even poor people could put the money together and aspire to take one of those courses. Dude, what is it? Like three or two-thirds of the American people don't have like $400 for an unexpected deal?

I think that, yeah, they debunk that headline a bit, yeah. The way they ask that, I think, is a little debunked. They could. They might have to ask one of their friends. The point is people in our country love to have debt. I mean, we have a debt-driven society. I think that they do. Even affluent people and middle-class people take debt when they don't need it.

I mean. Right. Because nothing happened on the general sort of wealth or, or income scale from 1980 forward while education, health care, and housing just skyrocketed. So the reason people take on a whole lot of debt is that the expectations of living standards

that they were seeing growing up, they're just not true anymore. For most people since 1980 forward, they had no progression in real income and they had astronomic rise in expenses on just the three basics of housing, education, and health care. So how do you make up that gap?

And if you look at it, those three are the ones that have the most regulation and or are being run by our dysfunctional government. The things that actually have the... No. I mean, again, we just went over this territory. Tons of regulations. I mean, how much regulation is there in education? You can't start a school and give an accreditation.

You have to go through this like 20-year process to get accredited as a college, right? I mean, there's a lot of regulation in housing as well, building any kind of new housing, doing anything. But that's not the differential here. The differential is, again, when you compare about getting... to Denmark. Do you think there's a lot of regulation about state-run schools or hospitals in Denmark? I can tell it, yes, there is. But it is a dysfunctional setup when you try to do state regulation around sort of this market economy in healthcare. Right? Just scrap that. It breaks. We're in agreement on that. I mean, when you have the government setting a bunch of rules paid for by the

people who are lobbying them, who are the benefactors, it's bonkers, right? Like, how does it ever work? So you founded Basecamp back in 2005, was it? 2004? What was that? We launched in 2004. We started building in 2003, yeah. The great Web 2.0 era that we both lived through. I was doing web logs at that time. Blogging became a thing.

That's when we first became aware of each other and podcasting shortly after when people didn't have iPhones yet. They had iPods, and we would put podcasts on an actual iPod, which was a music player for those people listening. At some point, you did raise money, I think $6 million, $5 or $6 million or something. What did you wind up raising? raised money. What we did was we sold a minority stake of the business to Jeff Bezos personally,

and Jeff paid Jason and I outright. We never needed any money to run the company, so we were never interested in venture capital. How did that what? How did you wind up being Bezos expeditions? How did you wind up? Because I had met with him during that time. He was interested in investing in Weblogs Inc. And I met with him.

So he was doing like almost angel investing or dipping his toe back then when. I think he just thought that was fun. This was 2005 for us. Yeah. And someone from his team just reached out and said, like, hey, we've been looking at the stuff you've been doing. Are you interested in having a conversation about this? And our first instinct was the same instinct as we've had. I think at that time, the count was like 42 VCs or funds had come to us and said, like, hey, are you interested in raising Series A funding?

And we were like, hey, no, please go away. Because we weren't. We had a profitable business and we were happy just growing that. we had no interest in it. So Basis comes along or Basis' expedition's team comes along and says like, hey, it's interesting. And we just said, like, well, we're not interested. You say, well, have a conversation. We had the conversation and we quickly realized that like, this is a hobby. Like, Bezos is having fun with his, at that time, large fortune, which was like 150th, the fortune he has today, right? Large fortune, having fun, investing because he sort of, it's a way to, I guess, meet people, interesting people.

You get to sort of hang out with them. To support ideas that are interesting and so on. So we have the conversation when we went like, hey, and then I think we threw out this ridiculous number, right, on the valuations, which is funny because I rail about valuations in general, and our valuation was absolutely ridiculous, right? We basically gave him a go-away valuation for the company. And he said, more or less, how much can I buy?

And we went like, like, what? I mean, didn't you see the numbers, right? Like, they don't make sense. And it's funny because his team, he has. had this whole team at the time. I think he probably still does. And they said like, hey, this doesn't make sense. Like, they're proposing a nonsense deal. And like, we knew it was nonsense. Like our, our pitch to him, it was just one page. And I think it had like four numbers on it. And like the main number that matters was what we were asking for in the

valuation. And it was basically like a fuck you valuation. Right. It was like. What times revenue was it at the time? A hundred times revenue, 50 times revenue? It was dumb. I forget what the specific one. It was dumb. And it was indeed based on revenue. And the every new number was really small and so on. But anyway, he comes back to us and say, like, how much can I buy? And we went like, oh, shit. I mean, we kind of didn't expect you to be interested in this nonsense deal. And we then had to talk him down from essentially wanting to buy, I guess, a VC-sized steak.

20-30 percent. Yeah. Yeah, something like that. To just enough where Jason and I could go, like, do you know what? This whole thing blew up because this was still realistic. Like, the whole reason the valuation was nonsense was because this was a very nascent business. that had very little revenue in the grand scheme of things. So it could totally go out of business.

Like most things go out of business. Sure. But if we got just a little bit off the table, I wouldn't have to worry about, like, hey, the groceries. I wouldn't have to drive an Uber if this failed. Idiot insurance. Foundational money. And this was, to me, this was really that financial clearing point that was like 99% of the value of sort of chasing money was just getting to the point where, do you know what, I can live a comfortable. middle-class life and not have to worry about expensive.

This is such an important insight, I think, that if you grew up blue collar, you get inherently, but some other people, I think, don't understand because maybe they grew up middle class and they drove a BMW but wanted a Mercedes or something or their parents were aspirational. I explain this to me, but once you get past a certain amount, and I think they said 70,000 a year in the United States, which probably doesn't include San Francisco and New York and L.A., but there's a certain point at which you're not really thinking about food or shelter anymore on the Maslow hierarchy, and you're good. And I try to explain this people, live well below your means, and you will be happy. And Naval also talks about this, and he hit the Uber home run and a couple of other ones.

And he also had an early exit. Once you start trying to chase lifestyle, it never works because now you're having the stress of running out of money. And I explain to people all the time. if you I, Elon and Jeff Bezos and Putin, the richest man in the world all sat and had a hamburger, the hamburger tastes the same. And there's literally like a diminishing return on hamburgers. Like the best hamburger might be $14 like somewhere in this country. That's it.

And nobody can get a better hamburger after that. People have tried. They make $50 hamburger. This is the Warhol argument, right? Like that the Coke tastes the same for billionaire or for a bum. Oh, did he have that as a theory? I like that. Yeah, he did that argument around the Coke.

That a Coke is sort of tastes the same. And absolutely, this is one of those things, at least treasure from that experience growing up working class in Denmark at the time was just what a wonderful life, what wonderful life you have when you're not on that treadmill. And when you have the basics taken care off to the point, like, I'm not worried about shelter. I'm not worrying about health care. I'm not worrying about food. You're free to pursue all the other wonders of life. And I think about this all the time. Because like now, right?

Not then, but now, like, I have all the money in the world. Like, I don't even fucking know what to spend my money on, right? What is the footprint of Basecamp, by the way? How many employees do you have now? We have 56. 56. But my point was that, like, do you know what? My favorite thing is not to fucking spend money.

my favorite thing is to like program that's one of the things I like the most I like to do it a ton I'd like to do it so much that I do it to an irrational degree for someone who's a CTO of a 56 person company like I probably shouldn't be programming as much as I do but you know what I can and I want to so fuck that I'm going to do that

or reading I mean this is one of these other things I think about like how do I spend the slices of my time and where do I get the enjoyment out of it like reading as one of those things like this is a pretty broadly accessible category of entertainment. And it's one of the things

I derive the most pleasure from. And then I also, of course, I also do for rich people shit like driving race cars fast around in circle. But I'm sort of far along enough on that trajectory. You know what? If I couldn't do the race car thing

and I could just do the programming thing and I could do the reading thing, good still. Good enough. Pretty good still. All right. So Jeff Bezos and Bezos expedition gave you that minimum viable lifestyle.

He provided for you this incredible gift. buying shares at an extraordinary price and for this you barbecue him incessantly on Twitter as the richest man in the world and I was breaking your chops about this you and I have full contact Twitter

even though unfortunately as we get older we seem to be agreeing on so much everyone becomes a socialist eventually so I'm just dragging you along a little faster than natural I know it's so true I'm I love capitalism even late stage capitalism but I just think

that we've screwed up so bad on healthcare and education that objectively, if we've done this bad, we need to look at who's done it great and just fucking copy the system. Like literally just need to go over there fucking photocopy because this is a shit show where people are scared of getting sick and they're not able to just get a basic education at a cheap price.

Like, I'm all in for, if that's socialism, I'm all in on it. And it is. That is the huge, thing where I'm like, hey, I'm on Twitter advocating for what's being called socialism. I'm like, these reforms are so mild. They're so sensical. They're even economical

when you look at the GDP discussions we have, right? That's the best part about it is. It makes business sense. Yes, this doesn't have to be about ideology and sort of the clash of ideology, socialism versus capitalism. Hey, I build my business on capitalism free market. It works great for

web software. I don't want the state to run web software. I want to be some regulations, especially around privacy and monopolies and so and so forth. But like, the free market is good. No one is saying the free market isn't good. Western Europe has the free market. Denmark has the free market. Finland has the free market. You just go, hey, there's a couple of areas here where it just doesn't work that great. It doesn't work great for health care. It doesn't work great for education. Let's just not do it there. And then, hey, we can do it all the rest of the places. See, one of the problems with the breakdown and the discussion is the word socialism is very

triggering and being anti-capitalist is also very triggering. So I'm very triggered when people want to take away capitalism. But when you look at socialism, no one does. I mean, there's a fringe group that wants to do anarchy and Bernie is mild. This is what gets me about Bernie. Bernie in Denmark, he would be a middle of the road potatoes centrist. Really? Absolutely. And this is the thing about having lived in multiple societies. I live 25 years of Denmark. What is the radical? I live. What is the radical in Denmark look like if Bernie said what's the left of him? Radical how? There's a ton of radical stuff that just goes with like a funny thing is a lot of the stuff that gets called most radical. It's basically like the U.S. 1950. Do you know what the top tax rates were in the 1950s

in the U.S.? The U.S. invented the income tax. The U.S. was actually incredibly progressive on taxation for a very long period of time all the way up until basically Reagan, 1980s. All the the radicalism that people are freaking the fuck out over now, you're just like, hey, that's American history like 60 years ago. Yeah. It's not exactly like it's from a foreign civilization basis. There are people who want to go all the way up to 60, 70% in Denmark. Oh, it was 67% up until a couple years before I moved. And now it's down around 52, which, do you want to know the irony here? The irony is that in California, my effective tax rate is virtually the same as Denmark. It is 49% or so.

something, yeah, it's brutal. 52. Yeah. You paid the 13% on income tax in California, and then you do the 37 on the federal side, like, and you're at 50. And in Denmark, I think it's like 52%. Right. Thank God for capital gains.

Just on your company, never take a salary. Exactly. That's how most people beat it, right? And Jason and I, we're the idiots. We just only take salaries. We never take capital gains. So we pay full boat. And this is actually why people have to put.

Well, no, you could pay yourself. You could pay yourself with a, uh, dividend. Yeah. No, dividends gets taxed as income. You need capital gains. And do you know what? The thing is, I'm not interested.

I'm happy paying 50%. 50% is a good number. I think 50% has a general rate for people. It feels about right. My favorite slash worst thing about the Scandinavian countries is that they have tied speeding tickets, which is close to your heart, I think, as well as mine, to your income. You would be so fucked, wouldn't you? Is it Finland who's giving people?

But somebody got a $100,000 ticket, like a NHL player. All these hockey players are buying mazzarotti's. They get dinged. Right. And then they get a percentage of their salary past year. So somebody got $100,000 ticket. Someone in Switzerland, I knew of this story because I talked to someone at the factory. In their Lamborghini got a, he first got a $150,000 ticket.

Then he appealed it. And then he got a $200,000 ticket. And then he appealed it all the way to the Swiss Supreme Court or whatever, $300,000. a ticket. I thought... Really? They just kept increasing it to teach them a lesson. They just kept increasing. And do you know what? I think that's great. Like if you want real deterrence for something like that, it has to be proportionate. This is why progressive taxation is a good thing. Progressive fines, I think is a wonderful thing. This is why sort of bail reform is so important. No one rich gives a shit about bail, right? Like they can all put up their whatever they have. And then you're a poor person

and bail is set as two grand and you end up spending like four years in Rikers for a thing you didn't even do. It's ridiculous. Yeah, they did that bowel reform. I think of it. But so when's the last time you talked to Bezos? I'm curious. And then does he like ever DM you and be like bruh, I provided you the minimum viable lifestyle? You're breaking my chops and I'm like your number one target

on Twitter. I think it's probably about 10 years since we spoke to Bezos last. I mean, as I said, when he bought the minority stake, Amazon was one-fifth the size of what it is now. It had one-fifth number of employees. And it's funny how all these numbers lined up. I looked them up recently.

Basis was literally worth 150th of what he is now. So it was large even then. This is 2005, right? Like Amazon was a juggernaut in 2005, but it wasn't this all-consuming monopoly player that it is today

that's sort of devouring things. How is it a monopoly player if it's got like low single digits of commerce? This is all about how you slice the pie. We just released the book as you pitched. It doesn't have to be crazy at work. Guess what the slice of all sales in the U.S.

that Amazon had for that, across all mediums. Of your book? Of our book? I'm going to say 70%. 90%. Wow, yeah. 90%. I know for me it was 90% the first week.

And this was not an apparation. We talked to the publisher of this, and they're like, yeah, it's pretty common. Like 90%. Like basically Amazon is the only bookseller that matters left in the world. Everything else is just the niche. Well, especially since they bought Audible

and how many of your, are you majority audible on your sales now? because I am. Like my audio book outranked my print book. It's a large slice. Do you read the book? What? You didn't read the book, right? No, I didn't. We had to, I mean, I don't like my own voice. You have to read the next one. I'm telling you.

But we had a lovely reader. I love audiobooks and I think it's great. But do you know what? When it comes to audiobooks, Amazon's dominance is even high. I think for us it was 95% or maybe 98%. Yeah. For sure, Audible is just like the entirety of the business. Which, again, like books, books is an industry, right? We can declare a monopolist within books. Amazon is without a doubt a monopolist within books. But overall commerce, no. That's a more nuanced discussion. I'm happy to have a tough point. So what is your main beef with him? That he doesn't pay taxes, that he, I don't really have, mistreats the employees.

We're making this be personal and it's not personal. Because you say his name in the tweets, it is personal. Well, I call shit out when when I see things that are. relevant to Jeff. Like, he's the richest man in the world. I don't know if he currently is or, I mean, whatever, it changes sometimes. His wealth is undisclosed. He is, yes. In terms of disclosed wealth, yes.

Right. And even if you are sort of competing with Putin on wealth, like, you deserve some scrutiny here, right? Yeah, not the best place to be, yeah. Sort of our oligarchs to undergo some scrutiny. And that's what I'm basically saying. And that's where I've been disappointed in both Jeff and Amazon in the decisions that they've made. I thought the HQ two

debacle was just an insult. And other insult to municipalities, why? Why? Like, you're making a mockery of America. It's making a mockery of not what can America do for you, what can you do for America? And this, there was a reason story to come out where

one of apparently, one of the springboards for this of trying to shake down municipalities for tax benefits was that Elon Musk had gotten, I think, 1.4 billion from Nevada or something for building a gigafactory and bases went like shit how is Elon getting $1.4 billion in tax but we should be getting more and you're like is this what we want our

billionaires to compete on who can rip off local governments the most such a bad look at this time yeah I mean I don't mind different cities competing to try to get business oh I but for the richest I don't mind it I think if cities if there's a city that really wants the jobs and they want to incentivize somebody to build the bottom. There's only so many companies that are going to do these and there's only so many cities that will participate. New York decided not to participate

and they won anyway. What a victory. What a victory. You go like AOC and the gang up there, they were just sort of excruciated for the fact that they were in a position and then it turns out, oh shit, Amazon's just going to do it now. They're going to move into Hudson Yards and bring

what was it, 20,000 jobs or something. They're still not going to bring as many, but yeah. No, but they called the game, or they called the bluff. They did call the bluff. I think the real problem is that I had with the H-SQ thing is it was a lot of work and false hope for a large number of cities. If they said we're considering these 10 cities and here's what we're looking for, give us your best offer. But they made it such an ongoing long thing with so many cities participating that making it open to everybody just led to all this false hope. And I said on CNBC at the time because they had me picking which cities.

I was like, listen, I would love to see a city that needs it like Pittsburgh or Detroit, some city that law, Michigan, somebody who, you know, a city or a state where they need the jobs and they need this and it would be a great bridge. That's what I would like to see when it. And of course. And imagine if they'd done that. It would be amazing. It would be amazing. It had gone in and said, do you know what? Detroit.

To get billions out of the municipalities. We're going to pick Pittsburgh. Because you know what? Pittsburgh needs this. We're going to do it. We would all have started like, holy shit, that's amazing. I would probably have shut up a little bit about my billionaires wrecking everything. If that was a legitimate, honest, authentic investment into America where you're just like,

we're going to do what's good for the country here. And why shouldn't they? Amazon is also a trillion dollar company, depending on which day you check the stock price, right? Yeah. Can we ask a little bit of decency like that from trillion dollar companies, from the world's richest man? The cluelessness of, I think, Bezos in this regard, I think it's really clueless of him to not be self-aware enough to know that when you are the richest person, you do need to take steps. And he did tweet at some point, I don't remember this, like, how do I give money away?

And I was like, you built a trillion-dollar company. So you know how to build a trillion dollars in value and whatever they're selling every year, tens of billions of stuff. Like, I think you'll figure it out, kid. Like, there's a lot of ways to give money away. Like, just give it to Bill Gates. he seems to know exactly how to lower poverty and mortality rates. Well, let me give you an even better example. Just pay your workers.

Like, if Amazon had better working conditions, including for people who work in the warehouses, that's a great way of giving back. Just pick a city like Pittsburgh and don't ask them to give you $4 billion. Like, there are great ways to run a more ethical business where you're not sort of just trying to hoard all the money. And then at the end of the day, before you sort of, you get your midlikes crisis. and then you're trying to figure out how to spend it all. No, just not be such a hoarder in the first place.

We're all going to be better off if there was a little bit more slack in the system. And I think there's just such an obsession pathology in a lot of American business. That is, like, we're going to squeeze everything to the last cent. And I don't care who we're going to exploit. We're going to get there. And oh, shit, it's the end of the day. Can I buy an art wing somewhere? Can I do an endowment for some university?

Well, actually. You know what? Philanthropy does not make up for dysfunction. Well, philanthropy does make up for a lot. And as we're sitting here, breaking news, Amazon Jeff Bezos is just dedicated $10 billion to fight global warming. So that's 10% of his net worth. Or maybe now that he's divorced, it might be more, maybe 15%. So I think after he bought that $100 or $200 million house in L.A., maybe he felt like I need to announce something to take the edge off the $150 million house purchase.

Well, and first of all, also a lot of this is you go to philanthropy. And winners take all is a great book. Anand, I read it. Yeah, yeah. I'm trying to get them on the pod. Yes. You trying to put, as you said, the bandage on the capitalist system run amok after the fact,

like how much is the global impact on climate changing that Amazon themselves abroad? Like, I heard a stat. Good question. In New York City, there's 1.5 million packages every day being driven by diesel trucks around for delivery. And you go like, do you know, what percentage of that do you think?

is Amazon. I think Amazon probably has a shocking percent. Whenever they take a photo of some of these people sorting the mail on the street in New York City, you're like, it's 80 percent. Exactly. Amazon boxes, so so basis going out and saying like, I'm going to dedicate $20 billion to climate change. That's great, right? But how much damage have you cost? And there's probably a fair chance that damage has been more than 10 billion. I think the thing that would be great on a leadership basis is they're doing simplified packing in some cases. They just need to make that the rule. So I've started carrying like my Contigo cup and trying to like reduce

my paper cup usage, you know, of coffee like by half at least. You know, Bezos has the wherewithal to just say to people, listen, you cannot wrap your shit in like five layers of plastic for us to layer it in two more layers of plastic. If you want to do toothpaste, you want to just, it's got to just be like in Europe

where they do less packaging in a lot of the supermarkets and make it top down. You cannot do unnecessary packaging anymore if you want to sell through Amazon. You've got two years to get your act together. We're going to, you know, do this over some period of time. And that would be amazing. And then why not just have all the cars be electric when you're doing the deliveries?

Just buy all electric cars and deliver them there. There's definitely a bunch of things. You can do. But then I think what's also funny is like, so on the one hand, you get this commitment to the $10 billion in climate change. Wonderful. Really, truly is. But amazing.

Then they also go to like one day shipping or in New York where you can get anything in like two hours. Like what is the cost of someone delivering a like package of toothpaste? in two hours. Just all the logistical machinery that has to do to that. What is the footprint of that? Do you know what? Maybe we just shouldn't be able to get shit in two hours.

Like all these conveniences that we've been so happy about. The same thing with the Uber. My house looks like a depot. No, let's go use an Uber here. Uber, you definitely want to get an Uber in a minute. This isn't great, right? The fact that Uber has increased. It's fantastic.

It is on a very individualized level. Like the level of sort of material comfort that you can now live as a moderately rich person in the U.S. is outrageous, right? It's bonkers. Like kings of old would have just looked upon what we have. Any food in half an hour. Yeah. Any food in half an hour. It's crazy.

We spent the holidays in New York and I was just, I was shocked. And it's very hard to resist this on an individual level and also resisting on the individual level. doesn't solve these structural issues. So we need structural changes. And I think one of the structural changes we need is that, like, you know, we don't need that many billionaires and they don't need to be that rich. So if we can sort of institute a progressive tax regime where the richest 400 families in the U.S. don't actually pay the lowest effective tax rate in the U.S., that's progress.

I'm a big fan of the wealth tax too. I'm a big fan of the estate tax. I'm a big fan of taxes in general. Everybody who's done, the wealth tax, has regretted it and gotten rid of it in France. No, they haven't. France regretted it because of structural issues in Europe. Do you know how hard it is to go count all of your race cars, put a value on them every year for 1% and then pay it? You could have to get an auditor to come and look at your 12 Ferraris, David, and your 14 Lamborghinis

and figure out what the cost of those 27 cars are. And it's so easy. No, it's not easy. Then you have to hire somebody to go. So assess the value of all day. Don't you do valuations? Don't you do angel deals? Don't you put prices on shit?

Yes, you do. There's entire industries focused around this. No, no. We just say it's $6 million. It's $8 million. Great. Sounds good. Let's go.

That's what we do. We don't hire like some outside person to be like, oh, my God. No, but every person's going to do that in every household. All you need is a market. You don't need a evaluator. You just need a market. You need transactions. And then you can look at it.

And it doesn't even matter. 80% of all the wealth is in publicly evaluated stock. stocks, bonds, and assets, financial assets. Those financial assets, they're constantly assessed. That's what the entire public markets are around. We know exactly how much Basos is worth because basically his entire net worth is his stock portfolio. What do you think it does to people who own private companies? You have to put a value on base camp now every year and pay 1% of your equity in that?

Do you know how easy that is? Actually, because we looked into like, hey, let's just play theoretical here. theoretically, if someone wanted to buy Bezos out of Basecamp, how much would they have to pay for that? You go to... 25 times earnings. Companies that specialize in this is not that difficult. Most of the transaction happen around the same level,

or you make a way to force these transactions. There's a great... There's a guy that helped write or help do the research for Thomas Piggotties Capital in 21st Century called... I forget what's the first name is? Guzman. Let's put it in the show notes. There's a great Twitter account, and he just recently made the entire case. I think maybe it was in The Guardian

in New York Times about wealth taxes and about this exact problem with private companies. First of all, private companies is a vast, vast minority of this equation, right? So there's this one area where it's a little bit difficult, perhaps. And his recommendation was ingenious, in genius, I tell you. Don't include them. No.

That if you don't want to put a value on your business, or if you don't essentially want to sell your business, just pay your taxes in kind. This is how taxes started. Taxes didn't use to be monetary. They used to be like, hey, you're harvesting whatever. We need like five years of corn. I don't even know if that makes any sense.

But you were paying in kind, right? You were paying your taxes in kind. You can pay taxes on private company in such a way that you don't have to sell them in public markets. You just hand those over to the government. If you would rather pay an equity, and equity is valued all the time, to the government, you do that. So if your entire network is tied up in the government, you do that. into a private company, and that somehow it says to be above the 100 million. Hey, just give the government 1% a year.

Oh, the equity in a company. Oh, my God. You're talking crazy right now. Since you don't have to sell it. Oh, God. It would be so much easier if just people pay the shit they own all the time to pay their bills. This is not weird. No, I've been there.

Right? The fact that people have to sell to pay their bills. It would be so much easier if just people paid a minimum tax. Like, I think that would be an easier one to sell. I'm just thinking about the American capital. bought and sold government system, just a minimum where whatever you made, you have to pay a minimum of 20%, even as a crazy rich person with deductions. Like, no matter what the deductions are, there is a base level of tax.

That's the problem here, is that everybody's figured out all these loopholes. This is why the flat tax was such a brilliant movement as well, just like, let's stop having every possible loophole, then people rack up losses. Then Trump's like, oh, you know what? If you buy a plane, you can depreciate the whole thing. And literally the entire discussion I hear amongst rich people now is the depreciation of a plane in one year. And how amazing this is that Trump did this. Because you can sell your stock in Amazon, buy the plane and you're basically not exactly getting it for free,

but the depreciation gets counted against those gains that year. It's bonkers or some large amount of forward-looking depreciation. It's not bonkers. It's obscene. And this is why people are sharpening the guillotine. And I think rich people, and I took myself in that group, clearly. We're going to thoroughly regret that we took so much and left so little. I'm in agreement, actually. Short term.

Like, as you say, it's even better for the economy if there's a broad base of consumers who are not poor, right? This idea of a broad middle class based on sort of just working normal jobs is a good thing. We need to bring that back. And some of bringing that back is not just win-win. Some of it is that rich people give up more. And you know what? Again, I already pay the 50% right, because we're so stupid not to play all these games

and not funnel all our money through capital gains, which by the way, I think should also be abolished. The capital gains loophole is just obscene. And it's already abolished in California, right? Like your 13% state tax does not recognize capital gains in some special category. Let's just do that at a federal level. There's all these things we've got to do.

Because get back to the fundamentals. The fundamental is the U.S. collects about 17% of GDP in taxes. That is one-third of what a country like France or Denmark does. If we want broad social systems where the government pays for health care and education and so forth, the federal government needs more money. Right. Or are we going to notice? That's the thing I get back to all the time with Bezos in particular, right?

Is he going to notice if he has to pay, like, I don't know, a couple billion a year? No. Demand is worth, what, $120 billion? I forget what the latest count is. You're not even going to notice. This is the joke of Gates. So Gates have committed very valiantly to donate the majority of his funds to charity. Yeah, all of it over time.

Do you know what's growing every year? His network. Or Gates Network, right? Yeah, he can't give it away fast enough. Well, he can. He's not, right? And he's earning more. The rate of, you want to give it away in a charge of fashion.

He gave way six. billion already in like whatever 15 years. I mean, he's giving it away fast, but it's still not fast enough. It is pretty inspiring. Is that not the most damning sort of charge against capitalism? That like the dude can literally want to give it away, can't give it away fast enough because he's making so much fucking money and not paying taxes on it? Well, no. I mean, I think it just speaks to Microsoft being such an amazing, really resilient company that keeps growing. And that gets us to the monopoly discussion. Which company should be broken up in order, rank them and why.

Worst behavior tech companies and why, which one should be broken up first? We've had the most negative impact on humanity. Number one is? Yeah, it's almost like you're doing my talking points for Facebook here. But I'm big on breaking Facebook up. I think the two acquisitions, they were stupidly allowed to make in Instagram and WhatsApp prevented real competition in social media and in social networks. And absolutely they should be broken up.

that's just one remedy though. I think we should break up Facebook. I think we should break up Google. I think we should break up Amazon. I think there's probably also a case for breaking up Apple. But I think this core idea that we're allowing tech conglomerates, that they can have one area where they're really dominant. And then they can use that dominance in that one monopoly area like Google is doing with search engines

to capture monopolies in other areas, either through acquisitions or conquest. It's just bunk. Like all of antitrust law and practice was, sort of focused around this, right? That we didn't want the big trusts that just owned everything. I've been reading Matt Stoller's Goliath book that details how the trust busters in the, in the 20s and 30s took on J.P. Morgan and took on Standard Oil and all these other things. And you're like, Jesus, yeah, why can we have some of that? Why can we have a president who is sort of just out there decrying the fact of monopolies, monopolist capitalists and how the economy is how you define it is the issue because they defined it as like are the users.

suffering and the users were suffering and when you look at Android or YouTube or Chrome or Gmail and all these free services. Tremendous suffering. Tremendous suffering. Through the exploitation of privacy. So targeted advertisement I think it's probably one of the worst evils

ever been inflicted on the internet and it's what's given rise to Facebook and Google. So we need to attack targeted advertisement head on. My preferred solution is simply to ban it. That you cannot show advertisement based on personal data. Don't you like targeted ads? Don't you like seeing an ad that's better?

I mean, you probably like no ads, but if you did see an ad, wouldn't you like one that's better? No, no. This whole idea that relevant ads are a bonus to people is a complete manufactured talking point by the ad tech industry. I don't. I don't know. I like seeing targeted ads better, but you know what? But then you think through it and you don't. Like when I talk to, to sort of take the example of someone who just became pregnant, this is an example that's been recounted. it over and over again because it happens all the time. Let's say they go down to buy a pregnancy test at CVS. That sales that gets sold to a data broker.

That data broker sells it on to either Facebook or Google or someone else. And all of a sudden, before you've even told maybe your spouse or your family, if you're pregnant, you start getting ads for essentially like, hey, here's a baby stroller. Here's what to do.

And it happens based on your IP address. You want to keep it. Here's an adoption agency. Actually, you should get an abortion. Yeah, but you know the punchline is it happens to every computer in the house because they're using your IP address for your router. So like every now and then I'm like, why am I seeing bikinis and bathing suits? And then I like walk by my wife's computer and she's buying swimsuits. That's your browsing habits. And I'm like, this is not my browsing habits.

I didn't search for this. But I see the brands. I recognize the brand she buys and then she sees the brands I buy, which is hilarious. It's shit. It's not good. And you know what? I think one of the reasons it's really so not good is because these companies like Facebook and Google, they have found that this is the golden opportunity to turn shit content into gold.

Content no longer matters in sort of any sense of abstract idea of quality. The only thing that matters is engagement. So if you can find the most outrageous content, that's going to be the most engaging content, the most diverse of content, that's the one that performs best for ads because it just doesn't matter what the content is. It just matter whether you keep the eyeballs fixed. Then you can show them ads based on the personal data, not on the content. Which you were someone who made content, right? Like Weblogs, Inc and so on.

Wouldn't you want that, like, say, an Engadget could command a premium because they had, like, tech stuff? It was the tech reviews and they could do ads based on that. Yeah. The reason I'm not in the content business anymore, to be honest, is because it's too hard to do. It's too hard to do because then we had people who were targeting Engadgett, and so somebody would run an ad on in gadget. like a small ad buy, they would cookie everybody. Then they would sell that information to somebody else and say, would you like to buy in gadget users?

And now they've stolen your entire audience. They stole the audience. And so Nick Denton and I, when he was doing Gawker, we were like, are you letting this other third party on? And they're like, he's like, yeah, they're sending us like a check for $3,000 a month. I was like, I think they're selling Gizmodo and Engadgett on the side to Samsung.

And Samson was buying direct from it. They're no longer buying direct. And he was like, oh, yeah. Should we kick him out? And we basically colluded to kick them out. We clicked out all the ad networks because we're like, this is screwing up direct sales. And what if you didn't need a cartel to do protection? What if you had basic regulations that simply said you cannot do targeted ads?

The value of, say, and gadget would go through the roof. Like, tech journalism is one of the most profitable ones because, like, people fucking buy phones all the time and they want to read reviews. So this is the natural place to place these kinds of advertisement. This used to happen. Targeted advertisement is a new phenomenon. Like, we literally live through. It's really effective. It's birth of it, right?

Yeah. It's super effective. It's too effective. Now, everybody in the content business is just going to subscription. I'm going to subscription withinside.com. We have advertising. We did over a million dollars last year. I'm like, you know what?

The advertising, we have to concede at some point that we're not going to be able to build an at-scale advertising company and just start charging people 10 bucks a month for the content. And no one is. And it is because Google and Facebook literally took, I just did a congressional testimony on this topic in front of the House antitrust subcommittee. And one of the data points I pulled out as part of that research was, I think it was 2016 and 2017, 99% of all the growth in Internet advertising was captured by two companies.

99% like it sounds like it's not even real. But 99% was captured by Facebook and Google. Of the gain, year over year went to them. Yes. And it makes sense because if you've ever placed ads, you're like, oh my God, I can target and retarget and find exactly my audience and do these lookalike audience. through AI, and it's just so effective. And then if you don't do it, now your competitors are doing it, so you're in an arms race.

Yes. I know you took... That was exactly my argument. My argument in front of Congress was that you're at a grave competitive disadvantage. If you do not take a sort of availance of the surveillance capitalist system that is powering this ad engine. And that's terrible. That we're handing over an entire industry, internet advertisement, to essentially two

companies and a little extra, is not good. And the consequences of that are starkly clear. There was just another newspaper, I don't know, a conglomerate or whatever that went out of business or went into bankruptcy that runs the Miami Herald and I think 130 other local newspapers. And you go like, do you want to trade all the local newspapers and all of America and do you know what you get back? You get Facebook.

You're like, holy shit, what a bad trade. What a bad deal, as the president would say, right? A terrible fucking deal for the country. It's terrible. I mean, I think if you look at it, it's such an easy solution. We have to just redefine what antitrust is and how it works. And then just look at the behavior of the companies. If the behavior is really bad, it makes it really easy to say, you know what?

And the incentives. The incentives. This is really what we need to focus on. Why are Facebook and Google collecting all this personal data? Because it's so valuable because they can sell it. They should have a one-year limit. involved with collecting and storing personal data would not be worth it at all if they could not monetize it in the way that they did. So all these privacy scandals would keep having over and

over and over again, would, I mean, if not entirely, largely disappear because it would simply be hugely unprofitable to run the risk of collecting personal data. You do not have a legitimate express specified consent for just to what store it. And the thing that really gets me is that I think this is going to would hurt Facebook more than anyone who is really, who is really the ones who need to hurt the most. Like, if you take Google, for example, Google has, has intent. When you show up on their website and you search for used cars, Los Angeles, that's all the intent you need. You don't need any personal data. You don't need to be able to filter out, like, who's pregnant and who's not. There's enough intent in that search. Yeah. There's such an easy

solution to all this, which I think the GDPR, you know, it's actually surprisingly good in how it's It's fucking amazing. Have you read it? I just read it again this morning. Yeah, no, I saw your tweets about it. But the principles and so on. It's so good. They're like, you have to write this in a way that people can understand it and make it clear.

It's like, oh, wow, there's some common sense. I think there's such an easy unlock for Facebook and Google, which is you log in tomorrow and they say, right now you get these services for free in exchange for this information. Would you like to pay us $99 a year for Google service? search, Gmail, and Google Docs without advertising or tracking. Facebook. Would you like to get Instagram ad free for $10 a month? Would you like Facebook and Instagram ad free for $14?

Would you like WhatsApp, Instagram for $19? And just sell the bundle. And what percentage do you think, do it? 5, 10, 15, it would be perfect for them in terms of cover to say, look, we gave people an option. They voted. Whatever percent want to this trade and the other percent don't. And I think it would be actually great for them.

It would be ultimately great for them because you would let people actually have a choice. There are some proposals being cooked up in Congress that I'm aware of that essentially proposes that model. Really? That you have to give uses the choice of essentially buying their privacy back. The problem with that and the specific legislation I'm thinking about does have something to address it. But the problem in principle with that is that you end up essentially with all the rich people not having their privacy invaded. And all the people who aren't so rich, they will. Like, I'm, for example, I mean, as we all are in this society, we're hypocrites.

I'm a hypocrite in the sense of like I use some Google products, right? Like I'm calling for the dismantlement of Google as a conglomerate. I want them to be broken up. And you know what? I also watch videos on YouTube sometimes. And on YouTube, they actually give you that option. I pay nine bucks a month. What is it, Red or Pro?

Yeah, I pay for it. And I'm like. The greatest thing ever. The greatest subscription ever is YouTube Red. I'm convinced. And then sometimes I'll hit a browser. a window for whatever reason I wasn't locked into that red account and I see what YouTube is like with the ads.

And I go like, holy shit, I fear for humanity. It's every other ad. I had to buy it for our house because my daughters, you know, sometimes get on that YouTube and we have an account for the family now so that they don't have to see the ads, whether it's on Apple TV or wherever and they want to watch some video. Just like you watch an educational video and you're getting an ad for something crazy and you're like, this is brutal. 30 second ad, 45 seconds.

and video. Yeah, no, right? And I think that this is the thing, and this is also, I feel a little bad about my usage of Twitter. So I use Twitter, and I don't know what the hell their algorithm is.

It used to be, I think, if you were verified, you didn't get ads. Now some verified accounts are getting ads. I don't see ads ever. I don't get ads. I think it's a great hook because if I had to look,

I've seen accounts where they get ads. Like, it's every 10 tweets or whatever. Is it really? And on Twitter, at least you sort of can scroll by it and it's a little faster. It's not like YouTube where you kind of just stuck in front of it. But it's still, shitty.

Brutal. And you go like, you know what, this is not a world you want to live in where you're just constantly being bombarded with the most

targeted, exploitive ads you can possibly come up with. We got to do better. And again, I don't say that as like, oh, I hate all advertisements. I don't.

I enjoy a good advertisement. I remember seeing the, do you see this thing? Maybe Volvo ran it at the Super Bowl or something, but they had this ad about Volvo and how they do safety and like this young

girl growing up and so on. You go like, that was a great ad. I loved seeing that ad. It's not like all advertisement is bad. It's not like all brand advertisement is bad. But do you know what? Almost all personally targeted performance metric ads, they're fucking terrible. And we'd be better off as a society

if they just did not exist. All right, as we wrap up here, I know you're anti-UBER, my number one investment. I know you're also anti-superhuman, my number five investment right now in terms of returns and you're creating a superhuman killer.

Your investment philosophy is. I know, my whole day, but I can't buy equity in your companies. How don't I buy equity in your companies? So wait, there's a superhuman killer or corrector of tracked emails that you're coming out with, explain what it is, or what you can't explain? Yeah, yeah, yeah, yeah. You've been teasing, but I don't know. It's a hey.com. Hey.com.

Great domain. H-E-Y.com. Clients. You got hay.com? We didn't get. We bought expensively hay. That's a million dollar domain. Oh, my Lord.

It was big bags of money and they were very heavy. That's how I've been applying or replying people on Twitter when they asked about it. It was pretty expensive. It's a great domain. I got $1.5 million for $20.com. I bought it for $70 like 15 years ago. That was a great investment. The guy who held hay.com, this is public records.

He'd held it since I think 95. Right. And didn't even use it? Great fucking investment. Yeah. He was actually using. He wasn't squatting. Oh, he was using it.

That's cool. Yep. So that was the other thing. So we bought it expensively, and that was part of saying, like, hey, we're going to do something completely on us. It's funny. Someone on Twitter, when I announced that I was going to come out on this show, they pulled up the clip where you had asked something about, hey, so do you want to compete against Gmail? And I said, like, I know I'm not at all interested in that. Yeah, here we are.

And here we are. I'm building essentially a Gmail. Well, competitors are a big word. I'm a socialist. I'm a socialist and wants health care. Yeah. We're not going for sort of a free email service that tries to get a billion people to watch ad or have their emails mind. So we're going to build a niche service as all paid email services are.

But hey.com, it's a new email service with integrated clients. It comes out in April. And we haven't revealed a lot about the features. But one of the things we have talked about is that I'm just furious about the tracking that goes on with email. And your number four investment, superhuman, was the worst of the bunch. and there was this big expose, I think it was Mike Industries that put it out

where essentially superhuman was embedding these spy pixels and then reporting back to the sender when the recipient had opened it, where they had opened it from, how many times they had opened it, and at what time? This is kind of a standard feature, though,

and like all sales, automation software has it, Salesforce, everything has it today. Superhuman did by far the most grotesque, obscene version where they revealed all sorts of detail and aggregation that no one else was doing at the individual level. But you're right. This was something that was happening in other salespeople, software and so on. There was no other individual email client that had ever gone this far like superhuman did. But this was just a great thing. So for us, when I read the story about superhuman, I was just so disgusted. I thought like, this is just the worst. So first it led to a

sort of introspection at base cam like I wonder what kind of spying pixels we have and it turned out because we used or we use MailChimp it embeds spying pixels by default and in that case it mainly just uses it to aggregate open rates but I went that's still bullshit we shouldn't do that. No it also tells you where the IP address was

it gives you location data too in MailChimp it tells you like 60% of your people are in North America 30% are here it gives you that data I didn't even know that okay that's terrible too so anyway the pitch here with hay.com is we're going to cut that shit out. We're going to essentially be a spying pixel blocking client. You can detect these things.

You can do things about how you proxy images and actually the signature. I just looked at someone from your staff sent me using superhuman. Send me an email. And I looked up in the HTML. And there was the spying pixel. It was right there at the top.

It's like read receipts. It should be... It should be read receipts, I think. The standard should be like you turn them on. Like, I think on iPhone you can set. I want read receipts because I want the person to know I read it. That's the obvious standard here. I do this with my wife.

I do this with my wife. I have one person in my entire life who I allow read receipts for. It's my wife. Right. And it's great. Consent-based read receipts, they're totally kosher. Beautiful, yeah. There was a, there was, I used a Gmail tool bar called bad mail or something like that.

Because I was getting so many of these. When you're an investor, they send you doc send, which I refuse to open. Right. which is a deck that lets the person on the other side say how many seconds you are on each slide of their pitch deck. Oh my God. And where you are. And then they can shame you about, hey, Jason, why did you only spend like 10 seconds in that slide? It's so ridiculous.

So I just tell people, don't send me docs and send me a PDF. And then I use VPN. So I just put it that I'm in Tokyo because I like to just see all the Japanese like ads and like Japanese version of Google. We're on the same page here. We're just in the fact that you have the same fundamental. It's all human instincts and desires for privacy that everyone does. We just have to get your investment philosophy to follow suit here. I think just what superhuman did was terrible.

My advice to Raul would be, and all the sales software companies is they should just be an open public standard where you set read receipts per individual just like you do on your phone. If you don't want read receipts, you don't do it. If you do want them, you do do it. And it just would be so much easier for everybody, you know. So that's essentially a pitch that made to the mailing list. So I went out publicly and said like, hey, when hey.com launches, we're going to block this.

And not only we're going to block it is, we're going to shame this. We're going to call out that like wherever it was from your staff who used superhuman and had the spying pixels turned on. We're going to say like, hey, uh, I think it's turned on by default. I don't even know if you can turn it off. You can. But that's the other thing. They make this assumption it's on by default and all this other bullshit. Yeah.

So we're going to call it out and say like, hey, Jason is sending you email using spying software called superhuman. Would you like to block Jason? Or would you like to just tell you to fuck off? You're such a great competitor. I really respect your ability to stir the pot and be a shit starter because I do the same thing. I use that. I want to use that to make real change. So we've started talking to some of the mailing list providers like ConvertKit and Intercom and so on.

Let's just get voluntary on this basis that read receipts is something you need consent for. I have no problem with read receipts. If you send out an email that asks essentially Microsoft Outlook used to do this, right? It would say, Jason would like to know when you have opened his emails, allowed and I. If that's what it is, wonderful. No one has any problem with that. That's the way it should be. This is not what the industry is doing today.

Well, you mean, if you look at the thing I love about email, which is why I'm pursuing email newsletters atinside.com is it's the one open source platform like HTTP and everything like the web. Those two, and even RSS, you know, and within closures, which is the fundamental base of podcasting, if you look at podcasting, if you look at podcasting, If you look at podcasting, email, and the web, all three of them not controlled by the big Google Facebooks of the world because they were open standards. You can't control it. These are treasures of the Internet. And we need to protect those treasures and we need to guard them. And we need to smack people who abuse them across the head and say, what are you thinking? Don't poison email.

Email is wonderful. Email is one of those, as you say, three treasures of the Internet. We don't want to ruin emails presentation by turning it into spying cesspool. Are there any others? I guess Linux and web servers are open source. I'm trying to think of like the other open source thing that consumers use that has led to so many flowers blooming. You know? Well, we're on Rails. I'm just going to self-promote here. Yeah, of course, yeah.

The one that isn't. I mean, there's a lot of us, right? But in terms of protocols, I'm talking about consumer tools. There's not that many. Not that many. There's not that many protocols. We need one for social networks. I know people have tried.

They've done open standards for it. There needs to be an open standard Twitter. and I am trying to find somebody to build it and back them and a messaging platform. So having a messaging platform that competes heads up with WhatsApp, et cetera, and a social network, I have been begging to find somebody to build this and make it either free or pay for premium, but no tracking. You own 100% or there. I cannot find somebody to do it.

A lot of the crypto people are into it. We almost had it. WhatsApp was it. WhatsApp was it. This is why Brian from WhatsApp is living with such regret right now. that he got such a big offer and he didn't dare refuse it and now Facebook owns

fucking WhatsApp right WhatsApp just celebrated two billion people on it and in its original version before Facebook bought them they were profitable and they were profitable

on something like it's a dollar a year they had 600 million people pay in one year one dollar per year such a brilliant business model and we had that it was a standard

it was end to end encrypting it was all of these things like Brian is trying to make amends right now with signal And I mean, really kudos to him for realizing the gravity of his mistake selling WhatsApp to Facebook and double kudos for trying to correct that mistake for essentially trying to rebuild WhatsApp outside of the Facebook Death Star in terms of Signal. He's donated $50 million to the Signal Foundation. They now have a group of 20 people working on it.

He did? He did? He did? Isn't it amazing? Like, Kevin Sistram left Instagram and has nothing good to say about it. Zuckerberg. Of course not. WhatsApp guys left a billion dollars

on the table in that last year and they were like, yeah, not worth working for this guy any longer. Dave Morin had Path and Zuckerberg started stealing Dave Moran's ideas from Path and putting it into Facebook after Dave Morin left. Snapchat, same thing. I mean

Facebook is not good. Even the people who worked for him and the people he made rich hate him. Yes. Now that says something. Like it's one thing for you, to break Bezos's chops, you know, about like, you know, obviously weeks in these games. Which I barely even do, right? Like, it's not like I'm saying, hey, Bezos, you're a bad person. These people are literally saying, hey, Zuckerberg, you're a bad person. Yes. It's a distinctly

different thing. There's, there, it's a vote of no confidence in the human. Yours is a critique of, hey, pay your taxes, pay people a little bit more. It's, it's, I think doing it privately, but obviously you haven't kept up the relationship with Jeff. What happens if this, hey.com thing works, and Basecamp is working. I think base camp's got to be doing close to nine figures now or something in that range. We're doing so well that money has not been on my mind for a very long time. And that's one of the liberating things I think about that. But not nine figures yet.

We would not have done hay in an earlier day. I think now we have just sort of like, do you know what? If this doesn't work, it's not the end of the world. Like who cares, right? So I have sort of, and we have just the freedom to go full in, all out. and have fun. Do a fun project. Have fun.

Have fun. It's hugely important. Do it sustainably. We're not working 80 hours a week just because we want to launch a major new email service. We're working 40 hours a week. But we're going to go all out. And we're going to use this platform more so than any other piece of software we've ever done to enforce better social norms.

And we start with things like spying pixels and calling shit out like that. Yeah. I commend you on it. I think there should be a standard. And I like a good fight. I like when people mix it up. I think email is something when we invested, you know, in the first round of superhuman, which is a slide deck.

You know, the pitch was, let's make something people will pay a dollar a day for. And that is faster and better than this cluster fuck that Gmail has become, which is slow and broken. And the interface looks like, you know, you know, this is what happened with monopolies, right? Yeah. Gmail has had a monopoly on email effectively for a very long time. and they've stagnated, as all monopolies do, right? Like, you look at what happened to the Internet Explorer

once Microsoft had a total monopoly. It just stagnated. This is what happens. So I'm really happy to see that email is one of those things where the network effects are weak. Like, they're extremely strong on the protocol level. They're relatively weak on the client level. Like, whether you use Gmail or Yahoo or hey.com,

you can send email to anyone in the world, mostly, right? Like, it's actually still surprisingly complicated to get all the protocols and so on, right? But if you do all that work, you can do it. And that's what excites me. We don't need to beat anyone. We don't need to beat superhuman. We don't need to beat Gmail.

There's literally like 5 billion people who use email. What do we need? If we can get 50,000 people or 100,000 or whatever, to want to pay for a pay. It's a huge success. One million paying a dollar a day is a fuck ton of money. Yes. Back to the dollar thing.

Like, just charge people a fair price. A dollar a day for an executive using email, completely worth it. Like how many hours do we spend on our email boxes? And we're even going a bit down market from that. We're not just building luxury software

for Silicon Valley executives. We're building for a broader audience so it's going to be much, much cheaper than what that is. Yet it's still going to be for pay, right? I think we finally come around to this idea that free is not free. You just pay in a different currency.

Whether you pay in privacy or you're paying your attention or you're paying something else, you're not getting anything for free. This was one, you'll appreciate this anecdote. I just saw this article on TechCrunch the other day, calling out some company in very fiercely journalistic sense where they were investigating something and something was bullshit. And I thought back to what TechCrunch used to be, where it was just this cheerleader for venture capital free services back in the mid-2000.

I thought like, do you know what, if even TechCrunch can turn around and actually become sort of respectable member of journalistic standing and not just cheerleaders for broken industry, There's real hope here. There's real hope. The tech industry is getting pretty, they got their knives out for big tech. Like big, I don't know if you're watching the big tech versus tech discussion online. And it's getting full force because I think they felt like they gave such a free pass for so long to tech. And they were such cheerleaders that now I would say nine out of 10 stories, maybe even, you know, 99 out of 100 I could contacted for is bad news. They're like, here's something terrible.

going on. Can we get a quote from you about something terrible? And I'm like, I made, it really is a big hangover. I'm like, I did 80 investments last year. Do you want to profile a company that's doing something interesting? They're like, no, another day. But for today, we would like to talk to you about how horrible these 10 things are intact. And I'm just like, you know what? I don't have time. I'm sorry. Like, this is what happens. This is what happens when you blindly cheerlead an industry for like 15 years straight. You wake up and you realize, Holy shit, there's so much bad stuff here we need to cover. There's so many broken social norms we need to correct.

We've got to get to work. And I agree with you. Like, it's not going to be like this forever, but there's just so much shit to clean up that it's going to be like this for a while. And I think that backlash is actually good. I think the backlash is healthy because people, it shows that people expect more from technologists. And technologists should understand this because we have a disproportionate impact on

society, therefore great power, great responsibility. Just take a little more responsibility. And really, if Zuckerberg, all these roads lead to Zuckerberg, he was the first to come in and say, the new model is move fast, fast, break things, and he pissed in the well that everybody had to drink from. And it was like, dude, you're pissing in the literal well of users. Please stop pissing in the well. And he was like, why do I care? It's a well. Dumb fucks. Dumpfucks, right? Yeah. I mean, that was his quote. Like, these people are dumb fucks. Who cares, right? And I don't think much has changed about Zuckerberg's position on users, right?

It doesn't look like that. No. And I think that this is why this overhang is now coming in. And even Facebook is actually finally feeling something. You saw that the EU blocked the launch of Facebook dating. Oh, really? Because basically the answers that they'd given around privacy and so on were insufficient. So Zuckerberg is lining up to do this big launch and the EU just says, nope.

Or you look at Libra where like world governments basically you went like, what the fuck are you talking about? We would give Zuckerberg his own private currency. You've got to be out of your fucking mind. Nope. What happened when we let him by Instagram and WhatsApp? Like literally, like, we have democracy breaking in the United States because he wants to make rubles. He's taking ads in rubles. Let's unwind that shit, right?

We can fix it. That's the great promise of democracy. We can fix it. We can get someone in place who goes like, do you know what? Those were bad decisions and we're going to change those. And there's a long American history of busting the trusts. There's a breaking up companies that are. too big, too important to be that big and bring them under sort of democratic control.

It's going to be better. And it's going to be better for shareholders. I mean, you spin out YouTube and you spin out NEST and you spin out Android. The value of creation would be bonkers. You spin out AWS. You spin out Instagram. I mean, these things will become worth 50% more when they're independent companies. Like the entire enterprise will increase. This is the tragedy. This is the tragedy of prosperity. This is like, what do they call it, the, the oral curse or something like that. When you have this spigot of money, as Google has in terms of the targeted advertisement, that just goes they can be so inefficient and so bad at everything else, and it doesn't matter. Google has now launched, what, 22 or 25 different messaging services? They all just fail. It doesn't matter.

It doesn't put a dent in the bottom line. Like 98% of all revenue comes from targeted advertising. The same thing with Facebook. They keep. just launching all sorts of shit. It doesn't matter if it works. Polk. Remember, poke was like their third Snapchat killer. They just keep trying to kill Snapchat

incessantly. Like, it's so pathetic that like, can you imagine working for Zuckerberg and coming into work and be like, hey, I have a really great idea. And he's like, fuck you, your idea. Here's what, you know,

Evan Spiegel did yesterday. Just copy this. And it's like, but you're paying me $400,000 a year to be your lead designer. And they're like, yeah, doesn't matter. This is what I find this.

It's such a great point because people often talk about, when we talk about increasing tax revenues, they say, oh, government is so inefficient. Have you seen fucking Facebook? Have you seen Google? Like, do you know how inefficient? Do you know how many people who make like 300 grand doing fucking nothing? Oh, no. They're just buying talent off the market. It's a blocking strategy.

It's a blocking strategy. Take all the smartest people off the market. They can't create a company that kills the money printing machine. Because you have the money printing machine. It's just like, you know what the mode is? the mode is all the smart people getting overpaid to do nothing and then they get complacent it's gold it means beyond gold they have it's golden palace they're just like here live in this palace and like how bad is that for all of society how bad is that even for investors like you right like

no it's problematic new companies coming up we need a new generation of facebook's and whatever we don't need facebook to buy all of them or google or whoever no i mean if you look at instagram and youtube is just to $1 billion and $1.6 billion acquisitions. Both of those companies stand alone would be worth $200, $300 billion. And they would be competing in the arena of ideas with other people. And YouTube would be competing with Netflix and Disney not being this side piece for, you know, extending the Google search franchise, right? And it would just be a much better world.

I'm really impressed by this conversation. I think we're on the same page. about social democracy, social safety nets, about health care, about education. And Bloomberg. We both agree Bloomberg

should be the next president, so this is great. You're Bernie, I know, I know you're Bernie. I think that's another, yeah, that's another two hours.

All right, listen, David, it's great to get you back on the pod and you'll be released this on your podcast as well, so thanks for having me as a guest. Everybody check out, hey.com,

basecamp.com, rubyon rails. org. And if you have not read rework back from 2010. It is a great book. A lot of great insights in there on how to do remote work and just run an organization. You're one of a kind, David, and I appreciate you come back on the pot. Well, thank you so much for having me. Let's not wait 10 years for another one. Absolutely. Maybe we'll just make this like we'll do it every year. We'll just sort of the

rundown of where we're at. All right, man. Talk to soon, brother. All right, thanks. Cheers. Great job.