This Week in Startups - FCC's Brendan Carr on Starlink subsidy revocation, China's internet ambitions, and TikTok | E1870

Starting point is 00:00:00 You know, once StarNet comes online, I don't think it would take that much or that long for the CCB to start rolling up all these countries with being either the complementary service or the main service. And again, that's going to be a very different version of the Internet that people are going to be exposed to if you're going through StarNet as opposed to either Starlink or Kuiper or even just the regular homegrown African telcos. This week in Startups is brought to you by Vanta. Compliance and Security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a SOC2 report fast. Twist listeners can get $1,000 off for a limited time at Vanta.com slash twist. Gusto is easy online payroll, benefits, and HR built for modern small businesses. Get three months free when you run your first payroll at gusto.com slash twist.

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Starting point is 00:01:11 and a business address to keep your personal privacy intact. Visit Northwest Registeredagent.com slash twist to get a 60% discount on your next LLC. All right, everybody, we are honored today to have FCC Commissioner Brendan Carr back on the show.

Starting point is 00:01:28 Commissioner Carr joined me back in July of 2022, episode 1509 to talk about the banning of TikTok and should it be banned. Back then, he made a lot of waves when he called for Tim Cook and Sundar from Google to remove TikTok from the apps or something that has turned out to be pretty prescient. People are now starting to take that much more seriously. Well, we've got him back on the show because he is in his unique style being very candid about the regulatory harassed. of Elon Musk by the Biden administration commissioner car. Welcome back to the program. So good to be with you. Thanks for having me. All right. Let's get right into it. I want to get an

Starting point is 00:02:09 update from you about obviously what's happening with TikTok. But the FCC revoked a $900 million subsidy, I guess, program from Starlink. And you felt it was because why? Yeah, this is a pretty puzzling decision to me that really can't be explained on the law or the facts or really policy. I think it can only be explained when you step back and look at what, you know, frankly, it wasn't my term, but the Wall Street Journal called regulatory harassment of Elon Musk, and it cuts across a wide range of administrative agencies. With the FCC in particular, you know, we issued this award two starlink back in 2020, almost a billion dollars to, to your point, to subsidize to ensure that $640,000,

Starting point is 00:02:57 thousand rural homes and businesses would get covered with high-speed internet 100 over 20. And what the FCC did last week was in a three-to-two decision. So there's five commissioners. I'm the senior Republican. There's three Democrats. It was a party-line vote. They decided to revoke that award of one, nearly $1 billion. And the reason they said was because we don't think it's reasonable or that Starlink is

Starting point is 00:03:22 reasonably likely to be able to deliver 120 internet service to those $640,000. locations. There's a lot of problems with that decision if you look at it, you know, individually, but I think the strongest, most compelling point is that the federal government itself is relying on Starlink for very mission critical operations and connectivity. The military is entering into multi-million dollar deals with Starlink, you know, as we speak. And so plainly, I think the technology in the federal government's view is reliable. So what's going on here? And my theory of the case is that it goes back to last year when President Biden was in the White House and stood behind the podium with the official seal of the President of the United States

Starting point is 00:03:59 and said that Elon Musk is worth being looked into. And a reporter followed up and said how. And President Biden said there's a lot of ways. And it's true, there are a lot of ways. And since then, this pace and cadence of, again, regulatory harassment or inquiries looking into Elon Musk have been rather unprecedented. You've got the FAA, the NLRB, the DOJ, the Federal Trade Commission, the Southern District of New York, the FAA. And now the FCHA. And now the FCHA. joins in the mix. And so again, I think any of these individual decisions don't make a lot of sense other than tying it back to what President Biden said at the podium. Because look, administrative agencies, you know, they understand the cues that are being sent from upon high.

Starting point is 00:04:40 And I think that they read that that statement from President Biden as a green light. Now, look, there's another way of looking at it, which is to say, Elon Musk has a lot of business operations. So, of course, he's going to run in with the government allows businesses that are on sort of the the leading edge of a lot of these industries, and therefore maybe you're going to get extra scrutiny. And I get that. But again, if you look individually, like the NLRB, basically went after them because they insisted on having black t-shirts at Tesla

Starting point is 00:05:02 as opposed to allowing people to wear t-shirts that would promote unionization. Or you look at the Federal Trade Commission, and they were asking to get information about reporters that were getting access to information as part of the Twitter files reveal or the Fish and Wildlife Service, which went after him because there was a handful of Bob White quail eggs, and some blue land crabs that got charred after a SpaceX launch. And so we look at these individually, again, they don't seem to hold up other than when you tie it back to that broader position of the president.

Starting point is 00:05:34 So let's just get to ground truth here because politics has been inserted. I'm going to get to ground truth. As you've said, the government is buying Starling. It is mission critical. I have Starling at both of my homes. Here, as you can see, I'm at my ski house and then at my other. other house, it frequently performs at the level of my broadband connectivity. In other words, I'm able to tape this week in startups and the All In podcast over Starlink. And in fact,

Starting point is 00:06:02 I have Starlink because I need a backup. I'm a professional podcaster. The $1,200 I spend each year on Starlink at two different homes, which is $2,400. If I were to miss one episode of a podcast, you know, it's thousands of dollars in ads. It easily justifies me having them as just as backups. But when I use them, a commissioner, respectfully, They hit 100 slash 20, and people who are on boats, who are in remote areas, are buying these because it is the hands-down best solution for a rural or a non-landline connection. So what am I missing as a consumer, a dedicated consumer of Starling, and all the people who are in rural areas, what are they missing and the people on boats and planes and the government?

Starting point is 00:06:49 what are we all missing about 100 slash 20, which we get from Starlink, and we're over the moon about, and people are raving, raving on social media when they get on a plane with Starlink, I believe there are a couple of airlines that have it now, that they cannot believe that the broadband, wireless broadband is as good. What are we all missing from our first person realities? Yeah, look, again, we didn't have any milestone or deadline for Starlink to kick in until 2025. that's when they were supposed to provide service to at least 40% of that 640,000 location. And yet the FCC's decision said, we don't think it's likely that they're going to get there by 2025, which again, doesn't make sense when you look at people's individual experiences.

Starting point is 00:07:35 What they pointed to specifically was there was some Ucla nationwide speed test average data that was showing speeds below 120. But again, Starlink didn't need to hit 120 until 2025. and moreover, the Ucla data was, you know, averaged nationwide. It wasn't about, you know, how are they directing beams to these particular communities. And the other thing to think about is, you know, competitively as well. So we ran this, what we called a reverse auction, which means in 2020, we said we're setting aside $9 billion, and we're going to try to connect something like 8 million homes in businesses that were on the wrong side that just provide two high-speed connectivity for the first time.

Starting point is 00:08:13 And we let a range of different technologies compete. And it was controversial at the time. that we even let Starlink. And there's other low worth orbit satellite systems that are going up right now. Amazon's Kuiper is one that's getting up and off the ground now as well. And so we bid it out. And Starlink won in these areas, but other providers won in other areas. There were something like 180 different winners, some fiber, some fixed wireless.

Starting point is 00:08:35 So there's a lot of different technologies that won. But again, you know, we really sort of created an entirely new standard and applied it only to one of those 180 winners, which was Starlink, and said, look, since you're not doing 120 today, we're not, you know, reasonably confident that you're going to do it in the future. And again, it was a backwards decision, too, because they looked at the starship, the starship launches. And they said, well, those have been failures. And I'm thinking to myself, you know, we made fun of trade press that thought that those were failures when you don't understand how technology works.

Starting point is 00:09:03 So again, to say, we're looking at these two data points, these two euclis B test data points, and we're going to somehow draw a straight line between them and say, look, you know, we don't think you're going to get to 120. That's not how technology developed. It's a hockey curve that sawtooths along the way. And so I think it was a really sort of backwards looking decision from the FCC from just an understanding of technology perspective too. Listen, selling software is hard enough right now, man. It's hand-to-hand combat out there in B2 land.

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Starting point is 00:10:42 If we're going to have people with high speed in cities, you know, we should make sure. that people who are in the rural areas of America, this incredibly expansive landmass that we're blessed with, yeah, we should subsidize them. And am I correct in understanding that our taxes, collectively, for the people who live in high-speed, you know, cheap areas, cities, suburbs, pays for the people in rural areas. Am I correct in just broad strokes why we're doing this? Yeah, that's right. You know, it used to be when we had this mob bell telephone monopoly, we had a system called implicit subsidies, which means we're going to let the 18thi monopoly get, you know, good profits in urban areas. In exchange for that, we're going to compel you to build out other

Starting point is 00:11:18 places. When we introduce competition into the broadband market, we move from implicit subsidies to explicit subsidies, meaning right now on your traditional telephone bill, you're going to see a line item charge, maybe called Universal Service. It ends up being two or three bucks a month. That two or three bucks a month goes into a federal pot of money that we administer at the FCC called the Universal Service Fund. It's about $9 billion a year. And we take that $9 billion And we divide it up in a couple categories, about four and a half billion is what you're talking about, which is subsidizing internet builds in parts of the country where there would just never be a private sector business case.

Starting point is 00:11:52 And again, with this Starlink technology, we were providing as a government we're planning on about $1,300 per location and a subsidy to make sure that Starlink would be available there. On that point, it's super important for people to understand. It costs but $1,300 to put a Starlink, you know, at let's call it, you know, Brendan and Jason's farm out in the middle of America. What would it cost our government

Starting point is 00:12:18 to run fiber or a cable modem to that same location? I've read estimates $15,000, is that ballpark, correct? That that would be the subsidy?

Starting point is 00:12:28 Another number of looking at $5,000. So there's another Biden administration program right now that's looking to get principally fiber to these communities, so it's $5,000.

Starting point is 00:12:36 So, yeah, you can look at it as $1,300 in subsidy for Starlink versus almost $5,000. So $75% cheaper. 75% cheaper. Yeah, and it's two components. It's the efficient use of resource, but also time, right?

Starting point is 00:12:49 I mean, you can get a Starlink system virtually overnight, whereas if the federal government says, wait, I think fiber is better. It's a better technology, in my view as a government. Okay, fine. For five years to trench the conduit, get the permitting process done, so it's both money and speed of connectivity. So let me ask this follow-up question there. Knowing what I know about consumer behavior, consumers naturally get a lot of

Starting point is 00:13:11 go to the most affordable product that they perceive is the best. It is clear that if you were a rural American today, that you can get Starlink right now and get the best product at the lowest price. So if the Biden administration or the FCC voted, hey, we're going to go fiber. That's our decision. And we all say, hey, that's a terrible decision. But, okay, I guess our government failed us and made a stupid decision.

Starting point is 00:13:38 It's going to take five years for these people and get $5,000. we're all banging our heads. What would the consumers do in your estimation during that five-year period with their own money? Well, what we're telling them to do is just continue to wait on the wrong side of the digital divide. But I think what they would do is if they had the opportunity, they would sign up with Starlink or Amazon's Kuiper or something like that. I think, you know, if you were to step back as a matter of first principles, what's the most efficient thing for the government to do to bridge the digital divide? One argument is to just cut everybody a coupon for $600, which is effectively the price of a Starlink. dish, mail that coupon to everybody and call it a day. It doesn't even take $1,300.

Starting point is 00:14:15 I mean, the $1,300 is to make sure that Starlink is putting capacity over these $640,000 locations. They could require them to put in new ground stations. There's lost business opportunities. So the $1,300 is partly compensating for that. But if you're narrowly focused on ending the digital divide, mail everyone a coupon for $600 right now. Okay. But look, we want to be- Commissioner. I must respectfully ask, a very, listen, I do not have as much experience as you have inside of, you know, the halls of government. But I must repeat back to you what you've said.

Starting point is 00:14:46 At this moment in time, today, we could spend 90% less of American U.S. taxpayer dollars by sending a coupon of $600 instead of spending $5,000 on a fiber that comes in five years. So today, we could offer these people $600, $600, $600 to get the dish and let them be on their own for paying for the service. Sounds pretty fair to me. I would have liked that. You know, I paid for it.

Starting point is 00:15:08 and we would be done with this issue. And the commission and the government and the individuals would have the ability to work on something else. And we would save 90 cents on the dollar. But the FCC, some number of your commissioners, three of them who happened to be Democrats, have decided instead of sending, or even testing sending the $600 coupon,

Starting point is 00:15:32 instead of testing that, they've decided to block access to this and then forced people to wait as much as five years to spend 10 times as much. Is my assessment in any way hyperbolic, or did I just repeat back to you, basic ground truth, first principles? Yeah, that's right. And look, there's, again, you have to keep in mind in the background here. There's a separate federal program called the Biden administration is running.

Starting point is 00:15:57 It's their signature broadband initiative. It passed as part of the Infrastructure Act two years ago. It's called Bede or Internet for All is the branding. and that's a $42, $44 billion infrastructure investment that is skewed almost exclusively towards fiber builds. So we are about to spend right now, you know, $40-plus billion on fiber. Look, fiber is a great technology. I love it. I've been in the field.

Starting point is 00:16:19 I've spliced a lot of it. And there are some knock-on benefits right to fiber because you can connect sell sites to fiber when you're going by homes. And there's, you know, schools and anchor institutions. Like there are some knock-on benefits to fiber that you don't get necessarily with Starlink. But yes, if you're looking at this from the perspective of how do we quickly in a, efficiently bridge the digital divide, then looking at something like Starlink or Amazon Kiper when it gets going, that would be the most efficient way. But again, there's a ton of union jobs that come from building out fiber. I don't think that that's something that you can dismiss

Starting point is 00:16:47 when you look at how the policy sausage is making in D.C. right now. Yeah, we all know the one thing the Biden administration bases their actions on is the impact of unions or non-unions. They literally didn't invite Elon to the EV Summit because he has a non-union shop. Now we have the second piece of evidence. They're not giving this Starlink subsidy and it's the best option out there. And if we were to look, you know, and listen,

Starting point is 00:17:17 Jeff Bezos and Amazon is a great company, but they are pretty far behind. They have tested but two satellites to the thousands that Starlink has and Starlink has millions of users. Amazon will not be ready until 2029. So they'll have what Starlink has in five years, or probably less, because Starlink has not stopped innovating. So just to catch up with Starlink was a couple years ago, it's going to be five years.

Starting point is 00:17:43 So they're arguably seven, eight years behind. So if we are as Americans and we're looking at this, and let's say we're a Democratic American and we voted blue our whole lives, how could we look at this as anything other than harassment? Is there any steelman argument we could make for not allowing people to just have Starlink? I'm desperately trying to find it. I'm desperately trying to understand something this crazy. Yeah, I don't think so. Look, I think if Starlink was owned by someone else or owned by the same person with different politics, I don't think that that award would have been raked back.

Starting point is 00:18:16 And I think it's part of what I would describe as the Biden administration having what I sort of term a need, hate relationship with Elon Musk, where they need his technology. which they do in a lot of cases to deliver on their own policy goals, whether it's, you know, EV or NASA getting to space. You know, they're going to rely on that technology, including connectivity. When the military absolutely needs it and doesn't have another choice, they're going to enter into contracts with Elon Musk Starlink for this, but where they think they can get away with it, where it's not going to actually compromise one of their own policy priorities.

Starting point is 00:18:46 Then you see actions like the revocation of the Starlink award. It's a very odd sort of need, hate, hate, dynamic that's taking place right now. But it's also, I mean, look, I mean, it's part of a broader symptom in this country where we're just having a difficult time building, you know, actual physical things for a variety of reasons. We get caught up on environmental review. We get caught up in historic preservation review. I mean, one of the reasons why this country did so well the last 20 years was so much investment in innovation went into Silicon Valley into the application space, into the internet space, which was very, very lightly regulated. I mean, just more broadly right now, we are just really holding ourselves back through, you know, overregulation from the, administrative state. Yeah. And so if we were, if you were to look back, how long have you been with

Starting point is 00:19:29 the FCC or been involved in telecommunications more broadly? Yeah, a long time. Join the FCC back in 2012, became a commissioner in 2017, and I was general counsel of the agency before that. So you've been with the FCC for over a decade. So you've seen it all. Yeah. If you were to look back on that decade and then the decade before it in the last 20 years, what would you say has been the most transformative, competitive broadband product released in the last 10 or 20 years. Well, look, I think, you know, the emergence of, you know, 5G as this next generation platform, I know people are sort of a little bit down on 5G right now because they thought of it as sort of 4G, which was, you know, 4G was all about the smartphone, was all about the app economy and

Starting point is 00:20:12 you could see it and you can experience it. You know, you had Uber, you had all sorts of, you know, dating apps and everything that flourished. And so people were really amped on it. But I still think that this 5G, this idea that you can now get connectivity that can compete with fiber, again, whether it's Starlink or otherwise. We have this sort of convergence of technologies right now to deliver high-speed service that we never had before. Again, before people thought that, you know, they could only get a high-speed service from their cable provider, or maybe your telco had fiber.

Starting point is 00:20:38 But now we have what we call fixed wireless, where you can get, again, wirelessly from a cell site, basically, the same service you had before. So I think this convergence of technology and this idea that, you know, previously siloed companies are now competing. You know, again, you know, traditional mobile wireless guys, Verizon T-Mobile, they're taking a larger market share right now of the in-home broadband market, which was usually sort of the exclusive province of cable. And so that type of, you know, competition has been pretty interesting to see.

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Starting point is 00:22:39 the people who have, essentially in some cases, a monopoly or duopoly, getting into your house or your apartment. That is a 5G connection coming via a Verizon and AT&T. And very few people have that, right? It's low millions, I believe. It's, and it works primarily in big cities, I think, mostly. So it doesn't work in rural areas because you still need to get fiber out to that rural area. You still got to build towers. It requires towers.

Starting point is 00:23:04 Then you have satellite requires no towers, requires no fiber, only requires clear a line of sight, which means just getting above the tallest tree, and they literally have tree mounts. So when I was looking at my Tahoe home and how do I get my home at Lake Tahoe to have it, They said, put it on the top of your house or find your tallest tree and put it on the top and there's a tree amount. So the two things, there are two things that have made it cheaper or at least had other options. But the prices, have they started to come down now because of Starlink and because of 5G

Starting point is 00:23:33 direct into your home through a router providing broadband? Have the prices come down? Because it feels to me like it hasn't. They've come down in two ways. One, people can say, well, it's a little of a trick math. You're getting a ton more data now for effectively the same prices before. So by some measures, you could say it's a lot cheaper on per megabit basis. But also more generally, if you look at, you know, I mean, inflation sort of helps everything from a pricing point.

Starting point is 00:23:56 But the price of internet has not kept up with the price of inflation. So in sort of real terms, it's gone down as well. So I do think we're saying that some competitive pressure there as well. Do you believe when Starlink, you know, becomes more prevalent and then we get Amazon's offering? And I believe Hughes is also going to have a low Earth or orbit offering. When those offerings happen, you have two people competing with Starlink, now they're going to be in a price war. So right now Starlink, I think on average,

Starting point is 00:24:21 what is it, 70 to 100 bucks a month, something in that range? Yeah, it sounds right. So I think it starts to half maybe, do you think? And then it's game on, right? We could actually see Americans really competitively shopping for internet providers because of the satellite folks. I think that's right.

Starting point is 00:24:38 I mean, look, I think there's a lot of reasons why we need to have the backs of America's, you know, innovators and entrepreneurs, those competitive dynamics are one. But even, you know, globally, if you step back, you know, China is launching their own copycat service to Starlink. They're calling it StarNet. They're usually not very creative when they end up stealing U.S. technology. And I don't think we really grappled with as a country what that's going to mean when China has StarNet.

Starting point is 00:25:01 So just step back for a second. Let's say it's roughly 2028, give or take a year, is what people are thinking about for China's StarNet to take place. We already are obviously very familiar with this concept of Belt and Road, where China has through various mechanisms, sort of locked up different markets, particularly Africa, you know, it goes with ports, it goes with rails. We saw it with, you know, Huawei technology. Nuclear power. Yeah. Now imagine that, you know, the CCP can be the global internet provider.

Starting point is 00:25:27 They will undercut, you know, Starlink and Amazon by price by half, right? And they can offer, you know, let's take Africa, they can offer nations in Africa, internet filters and censorship that are both amenable to those African nations and to the CCP. And that's a really scary world. We think about the geopolitics that are opened up when China can be a global high-speed internet provider and, you know, controlling the content filters and, you know, and all of that. And so, again, we need to make sure that, you know, Starlink and Amazon are going. We need to be helping them lock in sort of long-term market access to countries in Africa and South America. Because I think, you know, we're going to see quite the brawl happen once this StarNet technology gets up and running.

Starting point is 00:26:10 Commissioner, this is a very important point. You bring up that I think people are not aware of. You know, China has an explicit strategy to give loans to build roads and bridges. They call this belt and road. And if you look it up online, we read the Wikipedia page, basically it looks like a belt going across, you know, from China, across India, Pakistan, etc., all the way to Africa. And they want to have influence in the frontier markets and the emerging markets. We're in the developed world, first world, we used to call it.

Starting point is 00:26:37 But there are frontier markets, which tend to be not democratic. They have emerging markets. maybe they have some democratic components, and then obviously you've got the free world, the West and the developed world. These emerging countries are going to go one direction or the other. They're going to lean towards democracy, capitalism, and freedom for individuals, or they're going to lean towards authoritarian. And every time the authoritarian, if I'm understanding you correctly,

Starting point is 00:27:03 offer them services, that kind of builds the fiber and the relationship, to use a term there, with the authoritarian. And China's wants that, they want to have that relationship. They want to build that fiber with Africa, Pakistan, India, anybody over there. And the United States, this is actually critically important. So having Elon Musk and Jeff Bezos and Amazon getting to Africa and supporting them is a national security and a humanity level issue, correct? Yeah, look, I visited Nairobi Kenya. I was about actually two hours outside of Nairobi, this, you know, dusty small town called Nanuki.

Starting point is 00:27:42 And, you know, I'm driving at this town and there's just Huawei billboards everywhere, everywhere in this small town, you know, a two-hour bumpy drive outside of Nairobi. At that point in time, Huawei had something like an 80% market share. And, you know, right now Starlink is moving into Africa. They are seeing a little bit of pushback from African nations that want to protect their own sort of national telecom monopoly. So there's just some basic, you know, incumbency bias there. But yeah, you know, once StarNet comes on.

Starting point is 00:28:12 online. I don't think it would take that much or that long for the CCP to start rolling up all these countries with being either the complementary service or the main service. And again, that's going to be a very different version of the internet that people are going to be exposed to if you're going through StarNet as opposed to either Starlink or Kiper or even just the regular homegrown African telcos. As we wrap here, and I know you're busy and I appreciate your time. What is happening with TikTok? You and I have been talking about how this is super, super dangerous for America, for democracy, to have a foreign nation, which is on the board, which controls something as powerful and influential as TikTok or even owning

Starting point is 00:28:54 X or Twitter, or if they own Facebook or Instagram or LinkedIn, whatever platform it happened to be at scale. And then we have this Hamas attack in Israel, and we're seeing on TikTok 100 to 1, 500 to 1, pro-Hamas or pro-Palestinian, you know, and obviously this is a very nuanced discussion. here. You could be anti-Hamas and pro-Palestinian, in fact, I think most of us are. But it is trending towards anti-Semitism often. Two-part question. One, should this be the wake-up call for us that the thumb might be on the scale here by the Chinese and the CCP? And do you think that they would waste the opportunity to use TikTok strategically on something like the Middle Eastern

Starting point is 00:29:39 conflict, or you think they would save that ability for, say, the 2024 election? It's a good question. When we talked about this last, again, it was sort of July of 2022, was sort of the leading edge of some of the pushback on TikTok. And what we've seen since then is TikTok has come out and admitted that they were in fact surveilling U.S. journalists and accessing their data illicitly. There's been more information that's come to light about just the massive amounts of data that's being accessed from inside Beijing by officials that are themselves members of the CCP. And stepping back, I think TikTok is two main threats. One is surveillance. That's sort of what I was talking about, the data flows. And the second is what you were talking about,

Starting point is 00:30:14 which is foreign influence. And we've seen it, again, in spades ahead of our most recent midterm elections after we talk. There were, it was evidence came out that the CCP's propaganda outlets was using TikTok to target, select U.S. politicians for criticism. As you pointed out, there's all sorts of data coming to light right now about pro-Hamas content, you know, trending, you know, outrageously as compared to sort of other neutral content. So I think it is a two-pronged issue, surveillance and foreign influence. And I'm, it's sort of a tale of two, sort of the best of times and the worst of times. Since we talked, there has been some progress. We did pass a nationwide ban on TikTok for federal devices. There's 25, 30 states that have done that

Starting point is 00:30:51 as well. That's good. At the same time, I am frustrated that we haven't gone further as a federal government. And I'm hopeful that as, you know, Congress comes back into session in this new year, that we will sort of follow up with the concrete steps we need to protect ourselves from TikTok. I think the answer is this. We need to require the genuine divestment of all ties back this CCP. So getting rid of bite dance, getting rid of all CCP controls. The platform itself, I don't have a problem with people doing short form videos. The problem is it being, you know, connected back to the CCP. So people that are worried, I think, look, on the left, there's some concern that electorally we can't, you know, shut down TikTok because, you know,

Starting point is 00:31:29 our sort of younger Democrat voters sort of skew on the TikTok that, okay, I don't know if I agree with that, but my answer to that would be the platform can continue. We just need to require the divestment of ties back. I'm actually somewhat hopeful that we're going to make some additional progress on that in the new year. But frankly, the tide is going out, whether it's next year or the following year, I just don't see a future in which the CCP and bite dance can continue to have the same degree of control over TikTok that they once enjoyed. And we can do this entirely consistent with the First Amendment. Some people do that because of the First Amendment. And there's a variety of reasons why that's not the case. One, there's a Supreme Court case called Arcara

Starting point is 00:32:06 books where there's a bookstore. They were running basically a prostitution ring out of the bookstore. And the government shut down the bookstore. And the guy said, you can't shut down the bookstore. That's, you know, first member protected activity. And the Supreme Court said, no, you know, it's got nothing to do with it. You're engaging in illegal conduct. And therefore, you know, as a collateral consequence, yeah, your bookstore shut down, but we're not doing it based on content. And so that's the key distinction is conduct versus content. And TikTok's conduct, meaning the surveillance, meaning the actual taking of data is sufficient standing alone to ban it without violating the First Amendment.

Starting point is 00:32:37 Or another way to think about it is you can take a pen and you can write the most salacious sort of anti-American propaganda you want and the government can't take the pen consistent with the First Amendment. But if you take that same pen and you pick a lock, well, then that's conduct. And we can take the pen from you. And it's no defense to say, well, I was writing anti-American propaganda before you took the pen from me. And so I think, you know, we got to move forward and get TikTok, you know, across the finish line here.

Starting point is 00:33:01 Listen, I appreciate you taking a stand and being so transparent. have the other three Democratic FCC chairs addressed in any way the accusations that you put forward about Starling? Yeah, on the Starling side, they've said, look, we had an obligation to just make an assessment of whether we thought was reasonably capable that they would hit it. And we just applied the law and we just came out where we came out. And that's what they have consistently said. Any rebuttal to that other than. Yeah, I just don't think it. I just don't think it withstands, you know, sort of even casual scrutiny.

Starting point is 00:33:33 And again, I think you can look at it, you know, narrowly or again, just the macro view that, you know, come on, the federal government is relying on Starlink entering into contracts with them. So the idea that, you know, it's not a reliable technology. It just doesn't, you know, seem to make sense. Good enough for a rural farm. I think we can all. Or good enough for putting, you know, in private jets for rich people or putting it, you know, on military bases. I think good enough for everybody else. Commissioner, Brennan Carr.

Starting point is 00:34:01 Thank you again for coming on the program, and we'll see you all next time on this weekend startups. Bye-bye. All right, listen, we all know starting a business used to be a real pain in the neck. You needed to get a lawyer. There were tons of hidden fees. It was a mess now. With Northwest registered agent, it only takes 10 clicks and 10 minutes. Northwest provides everything you need to start and maintain your business. Every LLC, corporation, or nonprofit Northwest Forms comes equipped with registered agent service, a business address, a website, and hosting, email, a phone number, and all of this is covered by Northwest's privacy by default settings. Again, your full business identity is going to be live in 10 minutes and in 10 clicks. So here's a very simple call to action for $39.00, plus state fees. They're going to form your LLC, your corporation, or your nonprofit, and you'll be able to launch your business in just minutes. Visit Northwest Registeredagent.com slash twist today. That is, Northwest Registered registeredagent.com slash TWIST today.

Starting point is 00:35:05 Hey, everybody. I wanted to just talk to you a little bit about starting a company. I've been in the technology industry now for 30 years, starting my first companies in the early 90s. And one thing I remember over all of these decades of innovation is people lamenting, oh my God, if only I started a company at the start of the internet, I was there. I was doing my magazine covering all these companies. And then the dot-com bust happened and everybody said, oh, man, I missed my window. But before that, I heard a lot of people say during the internet era,

Starting point is 00:35:42 right as that was getting started, online services like AOL and CD-ROMs, people would lament, oh my God, if only I started my startup during the PC revolution of the 80s and 90s, I would have been Bill Gates, I would have been Steve Jobs, I would have been Mitch Kapor, doing Lotus 1, 2, 3, I would have been Michael Dell. right and then I heard people during web 2.0 when I started weblogs Inc and gadget auto blog all those great blogs I sold this day well I heard people say oh if only I had started my company during that web 2.0 period when Zuckerberg was doing Facebook and Instagram came out and WhatsApp YouTube and all these incredible companies and now I hear people saying oh my god I

Starting point is 00:36:22 missed my window I should have started a company during the cloud revolution during the app revolution of 2009 all the way to 2021, and oh, I missed it. You didn't miss anything. The technology industry and the markets are like the tides. The tide comes in, the tide goes out. The best time to get to the beach and to start to prepare, to surf the big waves, is when the tide's gone out. You kind of learn a little bit. You get your company started. The waves start coming in. They get progressively bigger and bigger, and before you know it, the market crests and you are big wave surfing. So don't worry about having missed your window. Understand that it's a cycle. And we are now at the bottom of the cycle in 2023. This is the bottom of the cycle. The cycle ran from 2009 when I started investing in

Starting point is 00:37:14 companies like Uber and Robin Hood and Thumbtack and Com.com, superhuman, grin. I hit so many amazing companies. And the market peaked. Some of us cashed in some chips. Yum, yum, people made fortunes, and then it all collapsed. And here we are. In 2023, this is the best time in our lifetimes to start a company. Why is it the best time now? I just told you about four incredible super cycles. This is the super cycle of all super cycles, because it's built on those previous four super cycles. It's built on the PC revolution. It's built on the internet revolution and it's built on the app and cloud revolution and here we go this is the AI revolution and the efficiency revolution and it really is a globalization revolution as well because when you

Starting point is 00:37:59 start a company if you do get product market fit and the market pulls that company in and your service it can go global very quickly and that is something nobody expected in our industry nobody expected that Airbnb and Uber and Coinbase Robin hood would become global phenomenons as quickly as they have. But when you think about it, it makes sense because a video can go viral on Twitter slash X, Instagram, TikTok, a blog post can go viral. And what happens? Everybody in the world knows about some really interesting piece of technology. And all of the companies I've mentioned, they all started with one, two, or three founders. That's how they all started. So if you're sitting there wondering if you have what it takes, you probably do. If you can find two other really talented

Starting point is 00:38:42 people. And what I've done, you know I'm an angel investor, an early stage investor, but truth be told, I have a venture capital firm. I like to say angel because we invest early, we have a venture capital firm. We get 20,000 applications. The venture capital firm is called launch. You can visit at launch.com, launch.com. I can't get the M. Launch. Launch.com tried to get it, but can't buy the domain name. So we go at launch.com. Great domain name. When we get these 20,000 applications, and we sort them. And we try to figure out which founders we should meet with. We have a limited amount of time. So we meet with about 3,000 companies a year, about the top, in the top 15%. When we looked at these companies, more than half, were in the ideation, should I get started

Starting point is 00:39:23 phase, I have a prototype, I have an idea, I have wireframes. So what I decided to do was an experiment, and the experiment is called founder.com. What is founder.com. University? It's a 12-week course. It occurs Monday and Thursdays at 6 p.m. That's all you need to know. So if you got a full-time job, 6 p.m. Pacific, 9 p.m. East Coast. If you're anywhere else in the world, you're going to be staying up in the middle of the night. This course is 12 weeks, and we teach you a number of the most important items that you need to know about creating a startup. Now, the most important thing is launching your product, right? Then after you have a product, well, you need to get users and you need to talk to customers. Hopefully you talk to some customers before you make your product to

Starting point is 00:40:04 figure out what you should build. Then you have to have a business model, right? This is really, really seems simple, doesn't it? And then ultimately, you have to figure out how to scale the company. Well, at Founder University, we have had thousands of people go through our 12-week course and 96% of people graduate. How did we get 96% of people to graduate? Very simple. I came up with a trick. If you're accepted, and we accept about 10% of the teams that apply. So we had 2,000 applicants last time. We accepted 200 teams, 450 or so founders, because most people have two or three co-founders on a team. We charge them $500 to come to the course. And if they come all 12 weeks, one of the founders, it doesn't have to be both.

Starting point is 00:40:45 If you come all 12 Mondays, we just give you the $500 back. 96% of people have completed the course. So I came up with a little trick, and it works really well. So the course is essentially free if you show up. I don't want you to burn a spot, right? I want you to finish all 12 weeks, which is an hour and a half a week. So it's not a lot of, we're talking about 18 hours of time total. what we found was about half of the knowledge in our program is known by the founders already.

Starting point is 00:41:12 Well, that's great. The problem is, or the great thing is, you don't know which half you don't know. And so as we walk you through this, we're going to point you to the greatest content, the greatest best practices in the world, not just ours, just from the founders who've built great companies. And listen, we've sat there and watched them do it. And so we're going to help educate you and make sure that you don't have any holes in your knowledge. Why is this important? Well, if you make a mistake with how you set up your company, your cap table,

Starting point is 00:41:39 the rights, your board, investor rights, if you screw up, you know, employee stock option plans, the accounting, or how you design a product and who your first employee is, who your first hire is, all of that can derail a company. And these would be in the category of kind of self-inflicted unnecessary wounds. So what we want to do is teach you how to build the car. And then we tell you, hey, here's the track. Be careful on this turn. We've seen cars flip on that turn. You go into that turn too fast, you can flip the car.

Starting point is 00:42:08 Hey, be careful. This is a really tight part of the course. You can speed up on it, but there are some potholes. So just be wary of that. Hey, you want to make sure the bolts are on pretty hard on this Ferrari that you're building here. And here's how to get the right tires on the car because that's where the rubber meets the road. We try to figure out all of those things just to make it faster for you and more efficient

Starting point is 00:42:30 for you to get your product to more. market to get customers and to start learning. You can do this if you have ideally one of the three following skill sets. Number one, you're a developer. You can write code. Number two, you're a designer, Ux, UI expert. You can make the front end of the product, the user interface, super important, right? So if you think about any great product, you know, take Uber as one example, the fastest growing company I ever invested in along with Com and Grin, a couple of other ones went really fast too. You know, underpinnings, the code, hey, you know, matching with the algorithm, a driver and a rider. But also the rider has to have a beautiful interface, right?

Starting point is 00:43:10 To see the cab coming, to do the tip, to rate the driver. And the driver needs to have a beautiful, you know, application on the driver side. They have a different app. And then third, you need to have a growth hacker, somebody who understands customers and customer acquisition. Those are the three best archetypes for you have in your startup. If you can get any combination of that, two developers, one growth. hacker, two growth hackers, one developer, two designers and a developer. Any combination of that is a very strong start. Here's a secret. Being a developer takes about six months to learn.

Starting point is 00:43:45 Being a Ux designer, about three months, being a growth hacker, about three months. You can actually learn 50, 60, 70 percent of the job, depending on how much you apply yourself just by doing one of those three. And think about that for three to six months. So if you don't have any skill, you're just an idea person, quote unquote. Pick one of those three. I'll pick all three and spend six months of your life going all in on learning UX and interface design. Very simple to do.

Starting point is 00:44:13 Look at what Apple says are the apps of the month, apps of the year, their favorite apps, the ones they write editorials of and work backwards, right? It's a very simple tip that you might not have thought of. If you want to have a world class app, well, who determines what's world class? Apple does. They pick com as the app of the year. So if you look at the com app, they love that app, they love design, they love U.S. X, you don't need to be the expert on it.

Starting point is 00:44:34 Just draft off of Apple selections. So these are the kind of nuggets of wisdom that we do. If you come to the program, you also get to come to a kickoff or a closing event with me in San Francisco or New York. And so I hang out with these companies, and here's the best part. We, every week, will offer the companies to apply for $25,000 in funding. We have a fund. We're raising a $100 million fund. Our last fund was $44 million.

Starting point is 00:44:58 And what we like to do is, the reason we do Founder University is not just because we want of health founders, we do. But we're also a business. What is our business? Our business is getting on your cap table and owning some shares in a large number of companies with the hope that one or two turn into Uber, Thumbtack, Airbnb, whatever. So what we're going to do is every week, if you need it, you can check a box that says, hey, I want to be considered for the launch friends and family round. Last class, I think we invested in 30 companies, 25K each. About half of the people, it turns out, are interested in a small 25K check to get them started. And most of the companies are not yet incorporated who come to founding university.

Starting point is 00:45:36 So this is what we call a pre-accelerator. We also have an accelerator at launch. It's called the launch accelerator. We invest 100K in founders, typically with a product in market. Then there's Y Combinator, 500 startups. Hair VC does a great accelerator of the summer. So there's lots of accelerators out there. This is a pre-accelerator.

Starting point is 00:45:54 Founder. University is a pre-accelerator. And you can do it at night. You don't need to be full-time. We want to meet you early so that we can be your first investor. I get a kick out of that personally, to just tell you sincerely, when I invest in a company like Thumbtack, I was literally the first investor in Thumbtack. It just is a wonderful feeling when I see Jonathan and Marco, the founders of that awesome company. And they say, thank you to me. Thanks for believing in us and being the first person to believe in us. Or superhuman. I was the first investor in that with my friend Darmesh from HubSpot.

Starting point is 00:46:23 This is one of the great joys of my life. And a lot of other early stage investors tell me this is why they do it. To be an early supporter of an entrepreneur and watch them change the world, man, as my kids say, that will fill your bucket. It will make you feel emotionally amazing. It makes me get out of bed every day and do this week in startups and all in podcast and the events I do. And listen, if I hit a unicorn every 100 or 200, it means I can keep hiring people for

Starting point is 00:46:49 my team. we have 21 people at the launch fund, which runs founder. Dot University. That's a URL. And I want you to come to founder. dot university. I want you to apply. And so please start a company.

Starting point is 00:47:02 Now, some people will tell you you can't do it. Some people will tell you the majority fail. Of course, the majority fail. But what you're trying to do is learn. And if startups fail at an 80 or 90% rate, right, to return, and when we say fail, failure to return money to investors is what we're saying. So there's other reasons to do a startup. You're learning, your confidence, your ability.

Starting point is 00:47:20 to lead people to build a product. There's so many other things that come, even in the quote-unquote failure. What I've found is the founders who stick with it and they do two, three, four startups, they eventually get a win, which kind of makes sense mathematically if you think about it.

Starting point is 00:47:33 If you have a 15% chance of success and you do it three, four, five times, and each time you will get five times better at being a founder, literally at least five times, maybe 10 times. So between your first and second project, 10 times better. Between your second and third project,

Starting point is 00:47:50 five times better. Third and fourth, you might be three times better. Because you get better at building a team, right? You get better at building a product. You get better at interviewing potential customers and understanding their needs. So it's very simple. My request for you today is to please consider starting a company. And it doesn't matter if you're graduating high school and going to college. It doesn't matter if you're at Google and you're getting paid a ton of money, but you're kind of bored at Facebook or Google and you're 35 years. It doesn't matter if you're 60 years old or 50 years old or 40 years sold, just get two or three of the people you respect most who can build a product. You don't want three idea people. You don't want three salespeople. You need builders. You got to have people who can

Starting point is 00:48:28 build, write code, design, and get your team together and apply. Please, founder. University, please apply. We're doing our seventh cohort right now. We've invested in about 70, 80 companies now, either with that 25K check, 100K check, or sometimes we'll even invest directly. So we just invested at $250,000 in one company and $500,000 another who came out of Founder University with just a direct investment. So we're very flexible in terms of investment dollars. And listen, you've got nothing to lose. It's basically free if you just come for 12 weeks.

Starting point is 00:49:00 You're going to learn a ton. Even if you don't, if you start of fails, who cares, if you'll learn a ton. And you bring all that, all that experience back. And now's the time. So as I said at the top of this, this is the start of the super cycle. This is the artificial intelligence super cycle that is building on everything that came before it. And it's so much cheaper now to run a company. So the instructions here, very simple.

Starting point is 00:49:27 Founder. University, please apply. If you don't know if you should apply, go ahead and apply. Then at least you're on our mailing list and you'll get updates. And then once in a while when I'm doing, I'll do like a private speaking gig kind of thing and you're on our mailing list and I'll invite you to something cool. So you go to Founder University, apply, join the members. mailing list and let's get started. Let's build companies that change the world. We want to be

Starting point is 00:49:50 your first investor. I want you to say JCal, Jason Kalakanis, was my first investor. Please apply. Founder. University. And I'll look forward at seeing you during the kickoff and the wrap up weeks. Weeks, one and 12. And then I want to change the world with you. I want to build a hundred billion dollar company with you and your team.

This Week in Startups - FCC's Brendan Carr on Starlink subsidy revocation, China's internet ambitions, and TikTok | E1870

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