This Week in Startups - Is Peloton undervalued? + Rad Power Bikes CEO Mike Radenbaugh + Succession recap, All-in | E1344

Episode Date: December 14, 2021

First, Jason breaks down the math of why Peloton might be undervalued (3:23). Then, the founder and CEO Rad Power Bikes Mike Radenbaugh joins to discuss building a massive ebike company (15:36), the most innovative features, ebike regulation and cites. Then, *spoiler alert* Jason gives his top takeaways from the Succession season three finale recap (01:05:58) and Producer Nick pitches a storyline to work Jason into season four. At the end of the show Jason and Nick discuss the strategy and behind the scenes of producing All-in (01:32:20).

Okay, big show today, everybody, and we have five full this week and startups coming to you this week. I'm going to start off with Peloton. Are they undervalued? They have lost 75% or so of their market cap, but their numbers are looking really good. I think, I think Peloton might be a buy, and I'm going to go into the numbers and tell you how I assess that, looking at their subscribers and the value of their company and the lifetime value of their customers. We went to a little bit of back at the envelope math. So you understand how investors think about these businesses. then we have an amazing interview with the founder and CEO of Rad Power Bikes. I love e-bikes. I bought two.

This company is like really doing crazy stuff. And we talk about the founding story and why e-bikes are this new magical experience that everybody should try. And by the way, I paid for those bikes and then I invited them in the show. So you know, I never accept anything free, which is nothing free. It's always somebody wants to have lunch or wants a favor or an introduction. So I never accept anything free nor does anybody on the staff. There's no way to get on this program.

you send a PR note here and try to get somebody on the program and automatically put your person in the penalty box for like a year or two. We wouldn't even consider them. So don't send PR requests for this week in startups are all in. Please. I mean, unless it's like Bill Gates or like a top 100 person, we understand that, like, yes, you can call us if they have a new book coming out. We're going to have the founder of Snowflake on the show on Wednesday. And I'm reading his book right now. It's fantastic.

And so, yes, for that level of person, maybe. At the end of the pod, I put this at the end. Spoiler alert. I'm going to talk about the ending of secession. Producer Nick is going to pitch me on me being in season four. He's got a story arc idea. We'll see how that is. We'll put it up the flagpole.

See if anybody salutes. And I'm going to recap the season and what I think of this extraordinary piece of art that they created called Secession. So if you haven't seen the final episode, just at the end, know that I'm going to talk about. And there'll be some spoilers. And at the end of the end of the end, Nick and I had an open end discussion about all in podcast. and just in the last 10 episodes it's gone to the top 50 episodes in the world, top 100 podcasts in the world.

Something's happened. And we get into how we produced the show and some inside baseball about the last couple of episodes and Nick strategies around that. And I actually talk about CafeX, one of my investments, which came up during the show.

So some inside baseball at the end that you're going to really enjoy trying to do a little bit more about my life than take you inside the program in detail with some of the producers and principals on the show. Stick with us.

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Join thousands. of successful founders who choose Stripe as their payments platform. Whether you're an online or in-person retailer, software platform, marketplace or subscription business, visit Stripe.com to learn more about how Stripe can support your business today. And Calm for Business can help your employees be their best selves at work. HR and benefit leaders can get a free year of Calm for Business at Calm.com slash Twist. All right, first up in the news, I've been watching Peloton because I absolutely love this company. And at some point, CNBC asked me, hey, J-Cal, what do you think of Peloton?

It was really expensive. They were worth, I think, $30 billion or $40 billion at the time. And I was like, gosh, at $30 billion, if they have a million of these connected units or whatever, it's $30,000 per unit per customer. That makes no sense because the lifetime value of the customer is nowhere near $30,000. Even if it was, it still wouldn't make sense. And so I've been watching it like a hundred. hawk. And during this recent stock market correction, of course, the stock market, if you zoom out a year, still at all-time highs, basically, you know, bouncing along the ceiling, as we say, if you imagine

a balloon, if people think there's kind of a ceiling, kind of was bouncing the ceiling. And there were some stocks that became meme stocks. Meme stocks were people were explicitly trying to pump and dump or run them up or run amok with them. And the meme stocks were AMC and GameStop. Those have compressed and come back down to Earth. And then there were some stocks that were stocks. that were considered pandemic stocks. They were going to just have a huge boom. People got excited about those. You had a little bit of meme-ness to them,

a little bit of pandemic thesis, and then you also had more people participating in the stock market, thanks to apps like Robin Hood. So Peloton was one of those that kind of hit on all three, right? It's a consumer product, so retail investors love it. It also is an absolutely great product. So if you're actually looking at it in a great business, I think, because they get $40 a month in subscription,

which is $500 a year and pure profit from the software subscription put aside the hardware, which if they broke even on it, you know, having millions of people pay you $500 a year, it's pretty great business, isn't it? Anyway, they peaked at a $47 billion market cap. The price has compressed since then, and we'll show you a couple charts here if you're watching the YouTube channel. If you're listening, the chart is just showing the peak. All right, so Peloton on December 24th, 2020, Christmas makes sense.

Everybody was buying Pelotons for folks. Hit an all-time market cap. I think the peak stock price, you know, 162 bucks. a share pretty amazing. Since that time, they've lost a massive amount of value. They're down at 13 now. So they're roughly a third, right, or quarter, right? Four times 13 would be 26 times 252. So they're trading about 25% of where they were. And just last week, there was this crazy moment, Sex in the City, and this will just be a mini spoiler alert, has a sequel. So if you really care about Sex and the City, pass for it 90 seconds, I'll be done talking about it on the show,

just like that, which is the sequel to Sex and the City. Mr. Big, Chris Knoth, famous for being on Law & Order, great actor, at least when he was on Law & Order, dies after, has a heart attack after using his Peloton, and the stock dropped like 10% to the next day, which makes no sense. My gosh, it's fiction, and it's like nobody even watches this show, I think. It's like a very minor show, and I watched it. It was kind of terrible, I'll be honest.

I was never a huge fan of that show. I might not be the demographic. So this week, Peloton came back with their own ad to counter this. So just in, you know, sort of news around Peloton, we'll get back to, I want to get back to the numbers and answer the question. Is it undervalued now? Is Peloton was clearly overvalued? Now is it undervalued.

And we'll have a little discussion about that based on some numbers. But here is a 37-second comeback ad that Peloton did really quick with Chris Knoth, basically saying he's not dead. I'll see another side of 37 seconds. It's a new beginnings. You look great. I feel great. Should we take another ride?

Life's too short and not too. And just like that, the world was reminded that regular cycling stimulates and improves your heart lungs and circulation, reducing your risk of cardiovascular diseases. Cycling strengthens your heart muscles, lowers resting pulse, and reduces blood fat levels. He's alive. Is that Ryan Reynolds, the voice over? I think it is. Anyway, during this time, overall revenue has increased 6%, but its connective fitness subscriptions have nearly doubled from 1.3 to 2.5%. million dollars. So, in other words, when you look at the chart of their actual business,

pretty amazing. Just in the, in Q2 of 2020, they had 712 connected fitness subscriptions. They now, then a year later, they had 1.6. So they more than two and a half times. And now they have 2.492, so almost 2.5. We'll give them the round up there. So this is a really great looking chart. If you look at their quarterly revenue, it's come down. This is, I think, because of supply chain issues, because a part of their revenue is buying of the bicycles and the tread. and then part of it is the software subscription that you have. Now, in order really use a Pelotone, you have to have a software subscription. You can theoretically use it, but you can't take the classes.

It doesn't record your data. So they basically put a gun to your head. I think it's kind of lame, actually, but whatever. It's such a great product that most people are not comparing this to a piece of gym equipment. They're comparing it to a gym membership. And for $40 a month, each of these spin classes, I think are, my understanding is $25 to $40, depending on what city you're in is what a spin class costs. So if you go to about one class a month, maybe the two, you're in the same.

the black already. And the software is amazing and it's super convenient. So it is much better for you. So if you look at the mix of revenue, that's the key here. I don't like the hardware revenue. Obviously, we like the software revenue because the subscription revenue, I think, is 100% profit. In the same quarter of last year, 2020, they had 757 million in revenue. 600 million of that came from the bikes, 156 million from subscriptions. So obviously, overwhelmingly majority was selling the bikes and the treads. The tread is their fancy word for a tread mill. In their most recent quarter, they earned $304 million from subscriptions. So they doubled subscriptions a year later, and they made $500 million, a little bit less selling hardware. I think that it might not be, it might be they have some

supply issues that we're having a hard time keeping them in stock. So what we really want to look at here is Peloton's ratio, because when you're buying a company or a stock, whether I'm doing it at an early stage or you're doing it as a public investor, you try to value the business in relation to their sales, their customers, lifetime values, some other metric. So if you look at their ratios, they were at $35,000 per subscriber at the peak. In other words, if you took the value of the company, $47 billion, the number of subscribers, it was like $35,000. And that has plummeted now, and that was last December. Now, this December, they're at $5,000 per subscriber. Well, what's the lifetime value of a Peloton subscriber? I just described before. It's $500.000.

per year to have this offer of 40 bucks a month, so 480, so we just run that up to 500 for the envelope math time. So if somebody stays with the product for 10 years, that's pretty amazing, right? Microacquire is a startup acquisition, marketplace that cuts out everyone in the middle. If you're a founder and you're looking to sell your startup, microacquire is free for you, and it's private and there are no intermediaries there. The way microacquire makes money is they charge people like me who might want to buy companies or other larger companies, a membership fee to review the deals.

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And that subscriber ratio we just did only doesn't count their digital only subscribe because they do have people who just pay for their digital only subscription, and that digital only subscription does include their hardware. That's for people who want to use their own bikes. So if you go on Amazon, you can see people selling bikes with iPads. If you have your own bike, you can have a Peloton subscription and just use your own bike so they don't want people who already had bikes to get left out. But it doesn't do things like change the speed of the bike, or, you know, it's just not as integrated, right? They don't have the data from the bike getting pumped into their system.

And Peloton lists its annual retention at 92%, which is extraordinary, which is 8% churn. So if you just do some back of the envelope math here, this is a chart we made internally. So, you know, there could be errors in it and obviously make your own investment decisions. But I like to just make some quick charts. So if you were to look at their subs, connected fitness and digital subscribers, at their current market cap, they're worth $12,000 if you blended those two together. In the second column, we're looking at annual subscription costs, 4168, or connected, digital only 228. If you take their lifetime value based on the projected average subscriber's lifetime,

then you would be looking at if you just think that they will stick with the product for 10 years, you know, the 10-year lifetime value is something like $13,000. So that's like one times or so or one and a half times if you think they stick around for six years, one and a half, one to one and a half times the value of the company. In other words, the company, if you take how much money they, going to make just from the current subscribers is worth what those subscribers are worth. So I haven't made a move here. I don't buy individual stocks, but I'm going to keep my eye on Peloton because it looks like

they are suffering through just some real negativity. I do think it's a takeout target. Apple should buy this. I can say enough for years. It feels always has felt like the Apple of this space. And Apple doesn't like to buy things. So who knows if they'll ever come out with their own connected fitness. But there are other brands like Nike or other companies that might want to own.

this and Amazon I could see wanting to own this because it would play it well into your Amazon Prime subscription. Imagine you bought your Peloton equipment and if you had Amazon Prime, the subscription was just included and my lord, it could be a great business. So I love the business. I thought this would be an interesting way to look at it. So when things compress and you have these valuation compressions, maybe sometimes some companies will get valued at less. I don't know how much cash they have. You can take the cash out of their valuation and then do this. You could give them some value for the equity of their brand. A lot of different ways to look at these things.

But I thought I would take a moment and say, hmm, is Peloton a buy right now? I kind of don't like to buy equities. I just put my stuff into new companies. But I might make a bet here. I'm thinking about making a bet. You tell me and reply to me with your best use case or your best case for or against Peloton on Twitter.

I'm at Jason. So just reply to me and just tell me if you think my math is off or whatever. I'll do a little tweet store I'm on the TWI one. But I believe in the company. I think they can have three or four more products. I think they should buy hydro. I have a hydro rowing machine and barely use it. But I think the hydro is a great product and they basically copied the entire Peloton UI anyway.

So that would integrate seamlessly. And then there's Mira and there's Tonal. All these things should be one subscription. And then you can use them at other locations. That's kind of the best part of the tonal is when I was at the proper hotel in Austin. I took a picture like a QR code on the tonal and it just let me write in. And I could have all my account of workouts there. And I can track my workout.

and then it times out after five minutes and logs out, and the next person can use it, or you can just hit log out. Pretty cool experience, I have to say. All right, I'm really excited about our next guest on the program. Who decided he would go into one of the most difficult categories any entrepreneur can take on? Yes, he's building electric bikes.

And you say to me, hey, would you ever invest in an electric bike company? Hardware is hard, and you're up against China and the race to the bottom. Well, the only way to win in hardware is to make a product that is so transcendent, amazing, detailed, and made with such a level of obsession that it can't be copied and the brand actually becomes worth something to consumers. Well, Mike Radinbaugh is the founder and CEO of a company you've heard me talk about on social media. It's called Rat Powerbikes, and they make kick-ass electric bikes that are like nothing you've ever tried. you can go visit them at rad powerbikes.com. How do I know this?

Well, I tweeted after having driven e-bikes when I was in Italy and in Miami and over the past couple of years, hacked together e-bikes on the playa at Burning Man. Electric bikes are a different experience. You will take an electric bicycle on missions that you would never take a regular bicycle. And I would say my rad power bike missions tend to be the ones I would use my car. In other words, I am not wearing a bunch of sports clothes. I'm wearing regular civilian clothes. And I want to get a little bit of exercise, but I also want to have the optionality to go a little bit faster without sweating and to get to my destination quicker and easier. And to get up and down the giant crazy hills that we face in the Bay Area.

Welcome to the program, Mike. Jason, thanks. How's a radical intro? It's pretty rad. You and I met online because I tweeted, what's the best electric bi? to get and, you know, I got flooded with the responses, but the one that came over and over again was people who were absolutely obsessed with the rad power bike. I bought the best one, and then I bought the rad wagon. I don't know what the name of the first one I bought was. What's the top of the line

rad bike? I think you had the Rad Rover first or the Rad Rover. Rad Runner. We had with the big flat seat on the back that you can have another person sit on with the pegs. And so the bikes on an inspirational level, they don't look like touring bikes, they don't look like mountain bikes, they have big chunky tires. What is the aesthetic of this bike called? Is there a name for this category of bike

that you've perfected? The e-bikes that Rad popularized was first the direct-to-consumer model. Okay. So that's a really big part of our history. The second part was this e-bikes that are, you say, built for everything and priced for everyone,

and that built for everything, what we... take that internally to mean is that they're built to replace car trips. They're built to replace you're getting from point A to point B. So they don't look like a bicycle with an electric motor put onto them. They look like something quite a bit different. So the bike that you got the Rad Runner as an example, that's what we call a utility bike. And so you can carry groceries on it. You can take your kids to school. You can head out on date night. You can commute to work on it. And it's got tons of accessories that allow you to store stuff on it and big locks and big tires and puncture resistant attires.

What's the point of the giant chunky tires that feel more like a motorcycle or a moped? You know, because these aesthetically will look more like a moped kind of, which we don't have really here in the United States, but you do see in Europe quite often. What's the point of those big chunky tires on a utilitarian basis? Well, all along fat tires are a breakthrough for the e-bite category because they make people look at the category differently. It feels more like a piece of transportation because it can go over train tracks and rough roads and it can travel in inclement weather. And it's super comfortable. It doesn't get flat tires as easily. And it just looks freaking cool.

So I think it catches a lot of people's attention and brings them into the category. the way that a regular, you know, bike by appearance maybe wouldn't. Does that fat tire make it easier to ride and more stable because it has more surface area on the street? Is that a part of this? Most of our bikes have suspension forks as well. So they have the actual pneumatic suspension. But then the tires help with all the smaller bumps in the road. And so then you just have what's like a really cushy ride when you've got that combination of suspension forks plus big tires. So that's really the double whammy. And then.

It just makes them more versatile. You can take them on more types of paths. And the reason we did fat tires originally was that just didn't exist. That was something we pioneered. And we did it because bike infrastructure was not very good. And we wanted to overcome that through product design. And if you drive them over grass like I do or I have gravel in a driveway, you know, it just eats that.

Just go right through it. Boom. And that is a nice part of it. It does make it feel more stable. If you're a startup founder, you know, early decisions can be the difference between success and failure. And one decision that thousands of successful founders have made is choosing Stripe as their payments platform.

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People are building all these great businesses with all these SaaS tools. Well, Stripe is getting in the game now. They've got payment links. You've got to check it out. I want you to visit stripe.com to learn more about how Stripe can support your business and it supports all the businesses in my portfolio, and people love it. Whether you're an online or in-person retailer, SaaS platform, or a marketplace, head to stripe.com to get started today. Now, in terms of the ride, this is what people don't understand about the ride. You can ride it essentially in two different

ways. There is a literal throttle on the right hand, and you can twist it, and power will be sent to the tires and you will zip along, add up to about 24 miles an hour, depending on if you unlock, you can do a little unlock trick I read online. And I think you cap it at 20 miles per hour on the bikes and then you can unlock it if you choose to and get up to 24. Am I ballpark correct? Yeah, the federal limits 20 miles an hour. So we, everything's 20 miles an hour at Rad and we have 750 watts of power. So that's another thing we popularized throttles like you're talking about. Throttles didn't exist before Rad in a big way. And so that was something we popularized.

And the other thing was 750 watts of power, which is the federal legal limit in United States. And that amount of power empowers you to go places you just normally wouldn't. You were talking about climbing hills before we jumped on today with the bikes. And it's the great equalizer. It flattens hills, even steep ones. Yeah. When I drive up hills, I find like even the steepest of hills, it can eat the hill at eight or nine miles an hour at a pretty hard vertical. And these way more because they've got the bat,

They've got the chunky tires. Or if you like to, you can pedal. And if you paddle, it has gear shifters like a regular bike might. And depending on the gear shifter, it's easier or harder. And then there's a second setting, one through five, which is how much energy gets put into each pedal. So when you're on one, you feel like you're riding a normal bicycle, but with just a little bit of assist.

when you're on five, you do one rotation and it's going to push you an extra, I would say five miles an hour or something. So if you're going five, you're going to go 10. If you're going 10, you're going to go 15. Am I about ballpark right about how the pedal assist works? You got it exactly right. And so our bikes are designed to be throttle assisted when you want to just go from point A to point B and don't break a sweat. And maybe you don't even want to pedal that day, and you just want to cruise. And then there's also the pedal assist side. And that's one of the reasons why our product regularly gets compared to sort of an iPhone moment where it's this, it's this device that people don't really expect, but it all of a sudden it covers all

these different applications in your life. And it becomes this necessary daily tool, not just for, not just for transportation. Like for you, take your kids to school, take them to the ice cream store and do it without having to get in a 6,000 pound vehicle for, you know, to go pick up one ice cream cone. And, yeah, some of my favorite accessories, the one I have that is just absolutely amazing is, It's a cage that goes on the back. The back can either have a flat seat, which could arguably fit two kids, but my 11-year-old will go on those.

There's nice pegs so she can put her feet on the pegs and feel nice and safe. You have put plastic over the tire, so there's no chance of a person's, you know, jeans getting caught in there. It's very well thought through. So you can stay on the back, great, but this one has a cage. The cage has double bars on each side. So there's two bars on each side. If you sit in there, you can also use the pegs, you could put a five-year-old in their six-year-old, seven-year-old, my 11-year-old figured out a way to turn sideways and actually get in there.

Then they hold the bars on the inside, and then there's an outside bar, which is like this very rigid cage that I'm assuming is for safety if the bike were to fall over, kids wearing helmets, if they were holding the inside bars, and we have to talk about safety when we're talking about bikes. Those would hit the ground first. Is that made for safety? Is that the goal of it? that cage. What do you call that cage, that kit cage? Yeah, we call that the caboose. We gave it a fun, friendly name. And yeah, and so within there, you can put child seats, like you said, or you can put sort of seats for younger, younger, sort of, you know, younger children. And we just released a new accessory, which we got to get you, Jason. And I was going to say it's a good accessory for Seattle winter or San Francisco summers. And it's a cover that goes over that cage for the winter. So it completely encloses the, you know, the child passengers from rain and snow. And,

So we've seen customers in North Dakota using it and the, you know, in tough winters there. And we also just launched some bar mitts that go over the handlebars and keep your hands nice and toasty in the winter. I'm looking at it right here. It's called the Conestoga. Yeah, the Conestoga cover. Yeah. Conestoga cover. Wow, that is brilliant.

So you get a little wind protection, et cetera, while you have that caboose. But the caboose is for safety. Yeah. Like if kids are on this, that's a natural concern of parents in some way that would act as a safety mechanism. Yeah, you got it right. Yeah, and then the child seat itself encloses the kid. And then we also sell helmets across the website there. And like I said, all of our bikes go 20 miles an hour.

They fit within the federal definition of a bicycle and an e-bike. And so they're very safe to operate. And like these big tires and big brakes, everything's designed to welcome people that would not traditionally cycle into this e-bike movement that's happening. So you should think of our products a lot more like a piece of consumer electronics than you would a bicycle. It is a, as you're saying, this iPhone kind of moment when you ride an e-bike for the first time, whether it's rad or any of them. The sense of joy is very much because I used to ride a Vespa, you know, like a scooter when I lived in Manhattan, and I loved that experience. When every time I go to Europe, I will rent a Vespa. I love the 30 miles an hour zipping around. It's the right speed without having the windshield and everything around you. You could just enjoy a city or the countryside. And this feels very similar, I have to say. which is it's kind of like a nice speed to go.

20 miles an hour. If you're going downhill, maybe hit 25. I've hit 30 on it. I slow it down at that. But these are capable of going much faster, not your bike, but e-bikes are capable of going much faster. I've looked online. There are people who have ones that go 30, 40, and 50 miles an hour.

Let's talk about the regulatory framework of where these sit and then the different classes of bikes and then where we think they're going to go because people seem to be trying to figure out how to adopt to a world where some bicyclists are going 10 miles an hour and some are electric. I see some bike paths say no electric. Other ones don't seem to care. I don't know why you would care if it was electric or not. But let's talk about the regulatory environment in the United States now of how these things are classified. Well, it's really not that complicated now after passing some great model legislation the last few years.

So there's a three class system for e-bikes now that's federal in the federal law and a bunch of states as well. And so it's e-bikes that are limited to 20 miles an hour and 750 watts of power like a rad power bike can be used in almost all normal bike lane, you know, bike, you know, sort of inner urban trails systems. And it can be, it can vary a little bit by it from city to city. And, but no, generally, e-bikes are now federally classified. And it's, it's a lot less confusing. I think what you might be referring to is also just scooter and bike share, which is not what Rad Power Bikes does. We sell and service. We offer a solution to consumers that want to own the bike and accessorize it the same way you've kind of described.

You've done it for you and your family. So I think a lot more of the legislation challenges and the headwinds are on the share industry where they've had a rocky five years, so to speak. I mean, the bike sharing has transformed cities. They're absolutely amazing. However, people are adjusting to more bikes being around. Americans are used to walking or cars. And we just have to reset everybody's expectation here to be like the Nordics, Germany, and China, where when you pull up to a red light, there's more bikes than cars, waiting for the light to change, correct?

Yes. And hey, it's happening fast here. Electric bikes outsold electric cars in the United States last year, two to one. That makes sense. Sure. So it's coming fast. And luckily, the legislation's already really cemented in support of what we think is the right speed, the right power, the right sort of use and application. Of course, there's more we want to do to make e-bikes part of everyday life and in legislation. And that's what our government affairs team works on primarily. So there are e-bike classes, one, two, and three, 20 miles per hour for the first two, 25 for the second. E-bike class one is pedal assist. Number two means you could have a throttle and then three is a throttle and going up to 25 miles per hour, correct?

Yeah, three is up to 28 miles per hour in class three, but you don't have a throttle. And there's no throttle in class three. And so we really believe that the throttle is a huge unlock for application. Because like you said, sometimes you want that VESPA experience. You know, like a weird application, but sometimes I load my panniers up and I still have a bag coming from the grocery store and I can put it between my knees and then throttle home. So, so it's good meal and you're full and you're like, I don't want to puke here and I need a little bit of electrical. I'll just, I'll just glide. Absolutely.

Yeah, it's great for after Thanksgiving dinner. That's for sure. For sure. And then, of course, there's mopeds and those come in A, B, and C classes, 20, 30, 40 miles per hour. They look at the CCs instead of the watts. I think it's 49 CC. And then you need a driver's license for the first two categories. Once you get up to 40 miles per hour on a Vesper or more, you're going to need.

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No, we don't. No, we really believe that 20 mile and our top speed is sufficient for the masses. And, you know, today, Rad's customers are about one thing. third rural, about one third urban and about one third suburban. And so it's already something that's resonating really broadly geographically. Lots of socioeconomic sort of spread in that to people from sort of all walks of life or buying and using our products. So we think we're there. We think it's the right sort of speed, the right amount of power. So these higher power applications, there's just a smaller grouping of needs. So for example, 70% of trips in the United States are under 10 miles.

60% are under 6 miles. So most people aren't traveling that far for their average sort of daily applications. So like super high top speeds, we don't think it's responsible or makes a lot of sense. And 20 is great. I mean, going on a VESPA, which has a similar tire structure. It's just a slightly different type of helmet, right? You have to wear a motorcycle helmet. But those going 35 miles per hour allow you to be in traffic that's going 35 miles.

for hour. So that's the justification, I think, for rad making this class of vehicle, because there might be people who are doing that 10 miles, but they have 35 mile roads. The roads I'm on are typically 15 to 25 miles per hour. So when you're riding a rad bike, you can ride like a car in the middle of the lane and the person behind you can STFU shut the frack up if they don't like it, because you're going the speed limit. But the only problem I have is sometimes I will go onto a street that starts to hit that 35. It would be nice to be. go at 35. Sometimes I can get my rad power bike up to 30, but you know, Jason, I kind of compared to this like, like a gaming PC versus a regular PC. It's like, yeah, there's, there's, there's a small

group that could really benefit from that, but we're focused on e-bikes for the masses. And I think you're right at 20 miles an hour, you spend a lot less time interacting with cars because you're traveling more like the speed of traffic. So that's, that's what we found to really be the sweet spot. Yeah, there's a 40-mile bike. Vintage Cycle has a 36-mile one. And there's some other people making them a nice super 73, which makes a, I guess they're the closest competitor to you.

They, I think, are making some that are bigger. But I see some cops now have ones that go 50, 60 miles and I think that's super interesting. A cop bike that goes 50 or 60. Watch out. Well, I mean, if you think about it, you know, if you're trying to evade a cop on foot, or on a bicycle and their bike can go 50. That's pretty dope.

Okay, so most people, you decided to go direct to consumer. I think that's brilliant. When you get the bike, it comes in a nice box. You have to put it together. It's not that hard to put together. My system put one together. She's never put a bicycle together. So she was literally able to do it.

She's not, not technical, but she's not a bicycle mechanic. But a lot of people like to go to a dealer and try things out. So talk to me on a business. level about this decision to go direct versus having a dealer network and then also support because one of the pieces I got for one of my bikes was broken. I call customer support. You guys are super busy. We were able to eventually get it worked out. And you had, I guess, a street team in the Bay Area that will come help you. So talk about that challenge because you're dealing with physical real world product. They can get damaged. Like what happened to me, one of the

bikes got damaged in shipping, which, you know, it's going to happen at some point to somebody. but the decision to not go through the retail channel and go direct. And getting these things serviced, which is super important. Great questions, Jason. Well, we think of you as almost like an early adopter. So you joined when we probably only had 50,000 or 100,000 customers. We're now over 350,000 customers. Wow.

We'll add more than 100,000 in just the second half of 2021 alone. We'll end the year at over 700 employees in the company. And we have five retail stores now. We'll more than double that next year. We have 22. Oh, you have your own retail stores? Of course, yeah. So you're taking like a Tesla approach to it having a showroom kind of thing?

Yeah, we have, we have a, you know, our showrooms are doing really well at welcoming. What cities did you pick? The start. San Diego, Seattle, beautiful, Vancouver. We just opened a brand new location in Berkeley, California, right down the road from you. Oh, that's fantastic. That's probably who helped me out, yeah. Yeah, it could be.

Yeah. And then we have a, we have a retail store in Utrecht in the Netherlands as well. And so we'll be. expanding all over the East Coast, you know, more stores along the West Coast, more stores in the Rockies all along there. So Rad customers have the ability to buy online and ship directly to Doorstep, or they can buy online and pick our Rad Mobile Service, which will bring the bike to their house, white glove delivery and all stick and span, or they can come to our Rad retail stores and have directed consumer pricing. You charge a little extra for the VIP service to build it?

What does it cost to have them come and put it together for you? bucks, 200 bucks? Yeah, right between there. Yeah, depending on location. Wow. So, yeah, and so we find those customers love that value-added service to have one of our mechanics do the final assembly process. However, you know, before we had all these stores and mobile service operations, we had

hundreds of thousands of customers that buy the bikes, ship direct doorstep and assemble it themselves. And we find that it's a fun process for people. You put the front wheel on, you put the pedals on, a few, you know, a few more little pieces and the way you go after kind of a quick. safety check on the bike. So, yeah, this was, this was something we faced right away out of the gate was, okay, we want to make e-bikes accessible. How do we do it? And a big part of that's pricing. And so our bikes are priced between just under $1,000 to $1,900. And, um, and those bikes are

of a quality like you've experienced that compares to bikes in the $6,000, $7,000 range because you're going direct from RAD and we have a lot more scale. That was the thing I was delighted by because I, you know, I'm price insensitive at this point in my career. But I did look at it and I was like, wait a second, these clowns want four or five thousand dollars for an electric bike. It doesn't have any of the accessories and your bike matches it on specs or bets it on specs and yours are 1500 to 2000. I bought that top end obviously. How do you do that? Is it because you don't because you go direct and you don't have to sell it to a bike store which then is looking to market up 100%.

Is that the savings? Is the bike stores are marking these things up 50, 100%. Yeah, there's a lot of layers in there. you buy a traditional e-bike. But maybe more importantly is we've just designed our whole business vertically. And so we own, we own last mile through our retail stores and mobile service operations are vertically integrating into manufacturing. So when you buy from RAD, we have designed and engineered everything and we own all the tooling

for it. And we produce it in six countries now, six different countries we produce our products. So it's just a very different experience. I think it's more one Z two Z with the traditional bike companies. And I would think of RAD. Frankly, we just, we, that 700 people or so at Rad, we look a lot more like a consumer electronics brand, a lot more like some of your favorite consumer brands and just the way we've built the company. And so that shows up in the pricing and it shows up in the quality and it shows up

in the sort of revolutionary nature of the products. Like, we don't, we don't want to launch anything that's not going to create a dinner table conversation with you and your friends. People are, I mean, everywhere I take the bike, it reminds me when I had the, you know, 16 Tesla roads are ever made. I mean, it's just literally, I'll park it at a restaurant. I take my two daughters off. We go eat Greek food and five people walk around the bike and they ask questions. What is it? How does it work? Da-da-da. I'm like, got the name on the side. You could Google it, folks. But I am asking, uh, answering a lot of questions. We charge $100, $200 to have the install done the white glove service. That's break even or you lose money on that at best, right? Like, you're not even, I mean, you got to send somebody out that takes two hours. Person's got to get paid well. It's hard to find people today. Their mechanics. Well, because we push a lot of volume through our system. And so we have positive contribution margin and a lot of these sort of white glove channels for RAD, like our stores. And I'd say, like, no, there's when you can drive volume and you can deliver value to the customer, when you have those kind of two things happening, then sales happen at RAD a lot by word of mouth.

And so we save a lot of marketing costs. And so, no, RAD has been sort of a largely break-even business as we reinvest into growth of scale. And just so everybody knows, I never accept any free products. So when you said you had to send me something out, that's incredibly gracious of you. I will buy it myself. I bought both bikes. And you did help me with the customer support. I appreciate that.

And when you, the control panel on it, there's a little control panel on there, like a little LCD kind of thing where you do the settings. That I think you buy from somebody else currently. That's somebody else's display, because I've seen it on other bikes, I think. Yeah, as an early adopter, you had some products where there was a mix of off-the-shelf parts and rad-engineered parts. And so every new iteration that we come out with, for example, today we're on the Rad Rover version 6 that just launched about three months ago. And so that's a completely new display and user interface.

And so that one's all engineered in house and tooled in house. So you'll start to see us go to 100% on everything. Yeah, I'd say the one you have now on the old ones is kind of janky. It's like not user-friendly. I mean, it takes a little, it's not difficult to use, but I'm always like, where's the information? And I was wondering about that. And then I was also wondering, I see one of the main selling points of some other bikes is there's a built-in GPS and a built-in lock from your smartphone. You do have a key on yours that locks it, but you don't have GPS.

And I think you can take it and ride it even if it is locked, or does when I lock it on mine, does it, is it incapable? of being ridden. Yeah, it's turned off when you, when you power is off, but people can still ride like a pedal bike. They could, but as long as you have the bike locked up, then you're going to be just fine. And, you know, your, you're common about the display on your current model, your prior year model year. A lot of feedback we got from our customers was that the display buttons were a little

too small to be used with bigger hands, especially when you have gloves on. And, and so the new displays have, you know, glove friendly sort of, you know, larger button display units. That's great. Yeah. So we're always listening to the. customer and always sort of implementing change as we roll out new revolutions of rad. Okay, so now what about the GPS thing and then making it so, because I thought this

would be like a really easy thing for you to do, I think when I'm on my control panel, or I should have an app, I should be able to connect to the bike and lock the bike remotely. And when I lock it remotely, you can't use the wheels, you know, the screen gets locked and I have GPS because, listen, bike theft, sadly is something we all have to live with. Why no GPS? I mean, I'm putting like air tags on my bike, hiding them under the seat kind of situation. But it seems to me like putting GPS on this would cost $100. And then you could get a whisper net or a GPS drippy service for like whatever it is,

$25 a year, I think is what they would do, $2 a month, $3 a month. And you could just charge us, you know, $150 on top of the bike to have that feature. Where are you out with that? You spend a lot of time with folks in startups and scale ups and companies doing hypergrowth. and Rad's been growing like crazy. And as you can imagine, it's all about prioritization. And so early on, it's what is the customers, like, what's the highest and best value for the customer?

So we apply a value innovation lens. And so that's why we don't have connectivity today. If we, if Rad does connectivity in the future, maybe I can be on in a future episode to talk about that. It's going to be something that we're definitely going to add connectivity. I mean, people want to know where their bike is, right? I mean, that's like a little brand. If we do that, it's going to be something that we've spent years on.

And it's not just an app for the sake of. app. It's not just connectivity for connectivity's sake. It's something that's really driven by our first mover insights is driven by that 350 plus thousand customers we have today and, you know, user studies. And so that's why we wanted to focus on a really great super scalable fundamental product and then fold in new features and accessories. We launched 40 accessories this year, right, for our product. So like the, you know, the engine is turning. Oh, sorry, the motor. The one I really like that I'm not sure if I'm going to get is my rad power bikes have a nice pass-through for your legs. In other words, you don't have to lift your leg over to get on the bike. Like a Vespa,

you pick your foot a couple of inches, maybe it's 12 inches off the ground or 14 inches, and your leg just slides across and you're on the bike. However, you make a beautiful black plastic case that can slide into that space and become a giant cavernous, a store. storage base that looks like you can hold some groceries, your jacket, your laptop, whatever, and it locks nice. So kind of kills one part of functionality, but it adds another. What's that thing called? And what are your most popular accessories today?

That accessory is called the center console. Okay. And we have people putting full packs in there of soda, of course. Yes, of course. Small dogs, like they put, we'll park their small dog in there and kind of take it from the not close it. They leave it open with a small dog in there. Yeah, so it's got an open top that you can leave open so your dog's head

stuck out of the top. off and leave it open and let your puppy be in there? Absolutely. I wonder if my new 30-pound bulldog could fit in there. That way, he would love it. I don't know if I could fit a 30-pound dog. We have a whole other set of rad pet-carrying accessories. And so the categories that we love and we focus a lot of attention on our accessory lineups,

one is pet carrying. And so we have pet carriers that are all engineered and designed in-house. Another's family, family biking accessories. The others are commuting, like, you know, commuting to work applications. and then just general utility, like running to the grocery store, going to haul in five bags of groceries back home, or for commercial applications, right? We have heated or insulated pizza delivery food bags

for, we have thousands of commercial customers that use these in business application. So a lot of our accessories are in that vein as well. What's nice about the accessories is on the bike are pegs, screws, I don't know what you call them, mounts, where all of these accessories, you make them, like, you make running boards, which are really cool. So my rad wagon has running boards, not pegs. So then when my two daughters run, they both can put their feet on, essentially, like,

a running board that would be on the side of an SUV. That is the secret, right? It's like really easy to zip, zip these on. Absolutely. That's another thing we pioneered. Just this universal accessory mounting system. So almost every spot where you can mount an accessory on a rad power bike has a multitude of things that can go into the slots.

And we kind of think those like expansion slots on a PC. And depending on whatever the user needs. So we have front rack mounting points on every single one of our bikes. So you can mount these big durable front racking system. So you can have gear on the front, gear on the back, and gear in the center console like you just described. And the sides. You can put saddle bags, but that obviously makes it harder to have a passenger. But the front one is pretty cool.

On the front, you can put a small basket, a giant basket. I don't know what else. but you put big baskets up there. Absolutely. Yeah, pizza carrying the devices. You can put stereos and boom boxes, you name it. That's the thing I was thinking about, but I don't know if I want to be that guy. Mike, you know, like the guy who has like, you know,

dire straits or whatever blasting while they're riding their bike and then everybody has to hear it. Kind of cool in a way if you were going for a ride with a couple of friends. But you got to buy these things in pairs, folks, because as much fun as it is to have an electric bike, you got a bike too, because somebody's going to come over and they're going to go for riding the bike. You're going to go for riding the bike. This is a crazy thing. You're like, you got to buy them two at a time because you got to go out with friends on these bikes. They're so much fun. Oh, I think my job's here is done, Jason. I'll talk to you later. Thank you. I hate to be such a super fan, but I do think how many people who order a bike

order a second one? I mean, you've got to have, because that was the first thing I did. I bought the bike. I'm taking one daughter out of time. And then it's like, ah, we want to go too. I got three daughters. I got one wife. Okay, two bikes. One can hold two. One can hold one. So now we got the whole family on these things. Yeah, that's what we find is just, you know, get, ready for a life of being an e-biker. And what comes with that is a multitude of bikes and a garage full of them at some point. Because you end up having different bikes for different applications, different members of the family. You might trade in and trade up your rad model over time as well as you kind of find your life might change and your needs might change for your bike.

And so, yeah, we see that that's another great part of our business is like we have so much word of mouth, but we also have so many returning customers because once you're an e-biker, you're bit by that sort of rad grin or the e-bike smile, like you said. And you feel like a kid again and you get to places faster than you do in a car. And it really is the key. The multitude of benefits is just, you know, keeps people locked into that lifestyle. It's a, I know it does for me. The key to the whole thing is that missions that would be true. far to go on a bike. Like, if you got a bike and you go on a dinner, you're like, ah, I don't know if I want to exercise right now. I just want to get dinner. I'm just taking the girls for ice cream.

You mentioned ice cream as a mission. You know, the quick lunch, the ice cream, going to the store, what I find now is some of the missions where I would have used Uber Eats or, you know, postmates or whatever. I'm just like, you know what? I feel like getting some fresh air. I'll go get us ice cream and I'll bring it back. So I'll just zip down and get the boba or get the ice cream, bring it back for my daughter. It's quicker than, waiting on Uber-Rates and I get a little bit of, you know, I still use Uber it's not, don't get crazy people. You know, it's nice to just ride it out there. Hard to raise money for this. I say you raised a lot of money now, but I mean,

investors must have been like, are you kidding me? You want to create an electric bike company and go up against China's like race to the bottom and everybody else. I mean, it's a doggedly expensive place to exist and the margins are obviously going to be challenged over time. So what was the investment community's reaction when you came out? this crazy idea that you were going to make an American electric bike company? I started this company as you know when I was 15 years old. And this job, you know, as I think of it today, it picked me and this is my life's mission. So this is, it is required a lot of grit and a lot of hard work by a lot of people on Team Rad.

But all these customers that, you know, as we call them rad riders, they have propelled us in a myriad of ways. One is all the great product and user feedback. Two is just coming back to buy again. And so that data has been instrumental in helping us secure some of the best investors in the world. Rad's the first Ebyte company on the planet to have kind of institutional investor list behind it. And I think it's a testament to the sort of core economics of the business. And then the long-term trends that RAD is positioned better than anybody on Earth around.

So maybe like you're just walking through a few of those, the largest contributor. of greenhouse gases in the United States is transportation. Yep. And like I said before, 70% of trips are under 10 miles. An electric car only takes a little dent out of carbon because they're more energy efficient than an internal combustion engine, but they're still 4,000, 6,000, 8,000 pound vehicles. And electric bikes, on the other hand, gets 1,600 miles per gallon energy equivalent or so.

Yeah, I mean, the truth is now, if you buy, I have electric car, I have electric bike. the times I use gas are limited to like but one car we have which is kind of like our getaway car in case the world goes to hell and I mean you know I got like a backup old car just in case you just need a solar panel and uh yeah I guess but you know I'm just I'm thinking like walking dead type scenario I want to have both options available but uh the people who did your series A at 1.5 million dollar pre it was hard to raise money back then they're sitting pretty right now your series D at 1.5 billion they're on a thousand extra right now.

Congratulations to the people back to. No, we don't publicize our valuation and that's not absolutely. So, no, yeah. Okay. Yeah. So, but no, but I, but I do think that the story is quite an extraordinary one.

A hardware company. I want an e-bike business in a car. We get the information from, we get the information from Pitchbook, which tends to be directionally accurate. Well, yeah. Well, but I can't speak to that. But I think you write on the friends here. This is an incredible story and a car.

centric world and it's a people-led movement, right? So you have our investor group, they're users of our products and they see the transformational nature of these things. I immediately reached out to you. I was like, I got to find out if this is an opportunity to invest here, but the train had left the station. Let's talk a little bit about the government support that's coming. We are seeing more and more cities obviously have bike sharing. Great. That's a great vote of confidence for what you're doing. Eventually, they might want to use your bikes, I assume. They must have contacted you already. You're too busy being sold out. Tell me what you think of these bike sharing programs and eventually maybe partnering with the city. We've seen a lot of success

with commercial fleet operators, using the bikes to deliver food and beverage and groceries and parcels. But we've also seen a lot of success doing sort of community bike lending programs. So there's one that's being stood up now in Oakland that we're really excited to be a partner of. And these are groups that almost act like a e-bike library so you can rent out a model for a week and use it. And so that's where we're focused is letting consumers spend time on our products. And we see bike share and the sort of scooter share industry, frankly, that side of micromobility where people will use it to go from, you know, do the last mile trip in an urban environment

when they're, you know, visiting a new city or here and there between lunch meetings. We see those as really people coming in the door of micromobility. And as they fall back in love with that feeling of being on electric micromorability, it's silent, it's swift, it's super fun, it's economical. They want to buy their own e-bike and they want to tune it to their life. And so that's where we see ourselves plugging in. So you're not running any of those programs. But if people want to buy the bikes and run it themselves,

Mausletov, go for it. Yeah, we focus mostly on rental fleet operators that are in vacation, you know, communities. What are they rent them for a week? You said that people are now doing co-ops and renting and what's the average price to rent these things a week a day? These are the most, this is the most beautiful story. Some of these things are non-profits and they offer the bikes to people for free and especially people without the economic means otherwise. And we just, and these are the kind of programs we love to support because it's right towards the mission of our business. That's absolutely fantastic.

We're seeing in the buildback better plan, a lot of infrastructure items related to electric. obviously they want to increase the incentive to people to buy electric cars. We've always had a one to $5,000 tax credit for cars. I think that's going to go up to $5,000 if your Tesla is $7,500. If you're a legacy person because Tesla pays people more money but doesn't have a union and the people with a union, I think you get a better deal because Biden's in the pocket of the unions. Putting that aside, there's an e-buy credit of $4.1 billion in the bill better act. What impact might that have?

Because I think it's something in the lines of like, I don't know, $500 or $1,000. Is that right? It is, Jason. And it's an amazing moment for e-bikes in a national sense, because this is the first time that e-bikes have been provided with an incentive like this. So it validates e-bikes as a primary form of transportation for so many people. You know, more than two-thirds of our customers' primary reason for buying bikes from us is to replace car miles. And so these are the kind of conversations we've been having at their federal level.

And it's great to see the e-bike tax credit included here. So you said the sort of total amount of money allocated to this program, but it's just a 30% tax credit for folks that fit within the sort of income tax brackets. and so this starts to phase out at $75,000 of modified adjusted gross income. Okay. So if you're upper middle class, you don't get this tax credit. If you're under 75K a year, you're a civilian, whatever it is, you get a major discount. We're talking about $900. The bike has to cost less than $4,000 and you get a tax credit of $900.

In other words, you get your money back. That's right. Pay taxes, you get that $900 back. Now, on a bike like yours that costs, you know, I think that's a tax, you know, I think the max you can spend as close to like two, if you get some accessories, maybe 2,500, but let's just pick a number, 2000. Would that mean the bike would go down to 1,100 as you know this bill or something like that? It'd be a 30% tax credit.

Oh, okay, so 600. Yep. So it's a 30% tax credit. And no, we think it really moves the needle. And it makes, it takes a product like ours that's already resonating with people, like I said, from all walks of life. Our bike started less than $1,000. But it just takes it to making it that much more accessible.

People spend a lot more than that on their cell phones. They spend a heck of a lot more than that on their laptops. Yeah, cell phones, 1,200, laptops, 1,500,000, I mean, if you think about 4.1 billion, divide that by $300,000, you're talking about putting $13, 14, 15 million, possibly $1,000 e-bikes on the road. That'd be amazing. How many e-bikes are there in America now? You said you sold 350 or something already? Yeah, yeah. So, RADs are 20, 25% market share in the United States and climbing.

You know, next year we're going to, you know, like I always think about RAD as like a business that's historically more than doubled sort of triple digit growth every single year. And we've got a lot of supply. We're in stock of 90% of our bikes now. And that'll move to 100% towards the end of the year and moving into January. So we're going to be in stock on all of our RAD models going into the new year and hope to be so all next year. That's been the biggest constraint to growth over the last few years for our business.

OV's been inventory constrained, pre-pandemic, post-pandemic, mid-pandemic like we are now. And so when the business is in stock and able to keep up with customer demand, then I think we're going to tap out that tax credit faster than the years that it's going to be made available because that ends at 2025. And we're going to need to re-up on that because e-bikes are going to be flying off the shelves. It is a bright new future. I am so excited that you're doing this and you've chosen to make it your life's worth, because the joy it brings to people who ride them

and what it's going to do for the environment and congestion in cities is absolutely stunning. This is one of the... I'm not a big fan of government interference in markets. However, a little incentive to make the air cleaner and to get rid of congestion. I think we can all agree. That's something pretty good to spend a little bit of taxpayer money on.

It's an amazing product, sincerely. I met you after being just a huge fan of the product. So if you're listening to me and you want to have a thrill and have a great time riding a bicycle, I give it five stars, two thumbs up, my highest rating, rad power bikes are absolutely fucking delightful. I love them. And it's just added a lot of joy to my life.

So sincerely, my biggest endorsement, it is just an amazing, amazing product. And I look forward to buying many more in the future as you keep creating better and better products. Wow, thank you, Jason. Thanks for the support of the e-bike revolution. So I'll see you out there on the roads. It does feel, it does actually feel like a revolution. And you can see it too because when you pass by somebody, because I've passed by people with rad power bikes or even other ones, the Super 73, whatever, that move. There's so many great players in the space that you're doggedly competing against. But you're all really part of a revolution to just get some more cars off the road. And for the love of God, if you're running a city and you've, you know, you just have to go.

I'm sure you've been to the Nordics, but you've been to Denmark and you've driven a bike there, I'm assuming? Yeah, we have an office in the Netherlands, so we shipped to, yeah, 28 countries. So, yeah, absolutely. Describe for people what it's like to drive a bicycle in the Nordic countries. I mean, it is completely different than America. Yeah, you come back and you start to not have car blindness anymore. So in the U.S., you just get so used to seeing cars everywhere. And when you come back from the Nordic countries, you realize that there's clearly been a better way.

all along. They literally, when you're in Denmark, along the water, they don't put cars. They put a beautiful wide promenade and they give half of it to pedestrians and half of it to bicyclists and you can get from point A

to B in most cases with never interfacing with a car. And that's really what we have to look at. When you're looking at a modern city, whether it's Brooklyn or New York, Manhattan, Miami, we should be looking for areas whether it's on the beach or, you know, taking streets that are normally for cars and just

no cars on that street, zero cars and 100% bicycles. That's the way to make this revolution happen is to just make it, just the one concern people have in the United States is a very valid concern is having to share the road with insane cars that are giant with people who are, you know, doing their makeup, eating a slice of pizza, or texting. It's crazy that we do not have protected bike lanes everywhere. But who's doing the best job as a city in the United States with protective bike lanes? You know, e-bikes have been growing really fast every year, like I said, pre-pandemic post, all that, or mid-pandemic here.

But infrastructure, bike infrastructure, really got a huge acceleration through the pandemic. Yeah. Because streets started getting taken back again by people and local governments were doing it because of health mandates. And so turning in like you have there, you have something called safe streets or slow streets in San Francisco. And, you know, in Paris, they shut down a ton of infrastructure. We saw sales grow multi-hundred percent just over a few months there as they started shutting down more streets there to car traffic. That's fantastic. So it has been a huge accelerant.

So the safe streets and bike lanes induce purchase of the product makes total sense. And for cities, they just have to have the chutzpah to realize, if you build it, they will come. that's what happens. It is a specific concern. The first thing my wife said is safety, safety, safety. That's it. You can have the kids on this. Are you riding on roads with cars?

I'm like, yes, I'm right. That there are only roads with cars in America. Road, car, you know, bike lanes only, but I know the bike lanes. And we just have to take this to another level. Just like shutting down certain streets to make outdoor dining. It's delightful. Just do that in every possible city. If you're voting or you're in office,

This is a quick way to stay in office and get more votes. Everybody loves a good bike lane. It's fantastic. It really is, isn't it? I mean, it is. It's totally non-controversial. The local businesses along this promenade, they do better. They do better.

So it's as simple as that. I mean, we've been giving all this space a weight of cars for free. All these years, you can fit, I think you can park 16 bikes in the same place you can park an SUV. And so, you know, it's just like our city streets have been taken over, like, this, but one thing that's always been really surprising to folks is how many of our customers are in the suburbs and in rural areas because the sub the city, you might have a subway. You can jump on, right? You could maybe walk to your destination.

But in the suburbs, they've just been designed with sprawl and disconnection. And so that's where an e-bike is, we've seen some of the biggest growth for our businesses in the burbs and in rural areas where they don't have bus systems where things are designed disconnected. All right. everybody can follow Mike on Twitter M-I-K-E-R-A-D-E-N-B-A-U-H he's active on the Twitter

ratpowerbikes.com and just go buy one. Trust me. Just go buy one. They're fucking great. All right. It's the end of the show. Both this episode of this podcast

and of season three of Secession, everybody's watching it. Great show. Really, my goal for 2022 is to get cast in secession as a late stage like Cotu, TPG, whatever Masayoshi-Jan SoftBank. I want to be like a late stage VC

working on a project with Kendall and then just absolutely be like the worst example of a late stage investor in the world. It just totally caused chaos with Kendall on some transformative investment. But let's talk about the season finale because I think it's absolutely fantastic. I think this has been an absolutely fantastic season. and I'm very, very excited to play a VCI next season.

We should start that just as a rumor. So our producer Nick has mapped out a storyline, producer Nick, and you tell me your storyline for season four with me written in, and then I will give my recap of the final episode. But okay, pitch me on this. All right. So let me just back it up for a second. the reason I think this would work is because there may be no other person in the world

that understands like peak apex, dushy, VC than Jason does because he deals with founders, early, early stage founders, raising money, seven of them constantly all year long. And he hears the best. And in fairness, a lot of the stories are great. A lot of venture capitalists are really, really nice people take the time majority. Yeah. But he also hears all of the horror stories, all of them. You know them all.

Right? And you've dealt with it yourself, right? You tell the story about being in a meeting and someone's on their phone. You stop and you're like, hey. Yeah, the guy was on his Blackberry during a meeting fromahaw.com and I just stopped the presentation because he was under the table using his Blackberry and I was like, well, this is lamb. I flew up here and can't even get through a 10-minute presentation.

Crazy. Yeah. So in a weird way, this was kind of the role that you were born to play. Oh, yes. Well, yes. I deal with this all the time. Yes. So, all right, here's how I think it should go, right?

So season four starts, and I'm not caught up on season three yet, but I know generally what happens. Broadstroke. So there might be some things that don't make sense here, but whatever. So early in the season, Kendall hears about all the money that's being poured into venture capital over the last couple of years, right? It went from the low billions to now hundreds and hundreds of billions approaching trillion dollars over the last decade, right? He's now severed ties from Logan. He needs to do his own thing. He wants to make his own name.

and he's like, I got to get in on this. This is crazy. And he's considering, should I go, should I try and raise an early stage fund? Should I try and go late stage? What should I do? So he calls his friend from business school. Got it. Enter Jason.

Enter Jason. Yes. The apex predator of VC douches is how this character is described in the right room. The apex VC douche. Jason, so Kendall calls you and he's like, hey, thinking about starting a firm. I don't know, early stage, early stage. And you're like, dude, early stages for the birds, late stage is easy money. Everybody does a diligence for you.

You make all the nerds that work for you, check off diligence boxes. You just throw in $25 million. And then two years later, you're flip it and you dump it on some stupid retail investors. He's like, it's the easiest job in the world. Easy money. Easy money. Why would you put 10 years of effort into this? Like, you could just put 10 months.

Who cares? Who wants to work with early stage companies anyway? They're just waste of time. Yeah. There's so many. Why would you work with somebody with 100 customers when you could work with $10 million? Right. He's like 2x, easy 2x, flip it. No problem.

Easy to 8x, whatever, whatever they're going for. So your character convinces him that right now, the way the market works, paying 550 to 100x revenue or more for a SaaS company is going to print money, right? That's the state of the market right now. Let's what we pay. Who cares? You see Tiger Global. It gives a shit. Whatever. That's what we pay. Then you take a meeting together and the meeting scene is like,

you are legitimately the worst person on the planet. And everyone is like, oh, you're interrupting the founder. You're just like, you're on your phone. you're not even paying attention. You're like showing him memes. You're like, dude, you see what happened? You see Zion? He gained all this weight.

Oh my God, we're an idiot. So the founder's sweating for the product. Awful, awful. Why don't you raise the prices? Why don't you fire your bottom 10% of customers? Yeah, you'll do this with half the number of employees. Yeah, it's like a SaaS enterprise software company. Like, have you thought about integrating Web3 to this at all or no?

Are you guys not thinking about that yet? Just the worst, right? Just, yeah, terrible suggestions. So that's like earlyish on in the season. And somewhere in the middle of the season, something's happening, right? Kendall, something happens to Kendall where, you know, he's trying to show this off against his dad, right? He's trying to prove to his dad.

Hey, look, I started this thing on my own. I did. You know, look at this deal. I did. We're up five hours. Right, right, right. Our deal already got marked up. We made more money than Waystar made this month.

In one month, I made more money with one investment than Waystar or A-C-N, A-V-N. Waystar RICO? No, what's their Fox? They call it AVN or something. Yeah, something like that. Yeah. Right, right, right. We're up. Right. And look how low margin.

I made more money on paper than Avian made this month. Right. I own 10% of the software company, 90% margins. Your margins are what on your on your Fox News? Nothing. Yeah. You're a loser. Dad. This is how the new, this is how new money's made. Something like that, right? Yep. And then a few episodes later, if you turn out the company's getting pro by the DOJ for lying to investors. And then the market starts correcting and then all their public comparable, kind of like what's happened over the last four weeks, all the public comparables start going to take. It was like a zoom level compression, yeah. Yeah, yeah. And he already did the deal.

So he paid, you know, whatever, let's call it 75X, top line sales. But I sold all the secondary. So they have to do a down round. Now Kendall, they're asking Kendall for intros to raise a down round. They're like, we've got to cut the valuation in half. And then somehow, the company would have to be somehow tied into like ad sales or some kind of platform like that. Wastar Royco acquires the company for like $0.10. Logan always wins. That he invested in.

I've never seen Logan Roy not win. I've never seen that's how it ties up. The even better part I'll punch it up. Is this late stage VC clears his position? Kendall marking it up. So when Kendall marks it up, he sells his piece to co-to in an LLC. And he says, listen, you know, I just always like to take some chips off the table. Donate the player, hit the game.

Exactly. This is all fair. And he's like, well, yeah, I locked in my win. I sold 80%. I kept 20% as I did insurance. I'm good. Yeah. And it turns out that the guy, oh, and it would be.

great too if Kendall didn't know but it turns out the guy also has an early stage fund he led to A while he was telling Kendall that like early stages for morons right or he took his money and he bought options in Roystar knowing that you know he's like yeah and I took the money and then I just bought options I know your dad hates you and he wants to spite you and then yeah I knew your dad was gonna yeah I just I flip my investment in this dog into Roy Co because yeah your dad's a killer he's always that doesn't lose I think it's great all right good job somebody can clip this and send it to them. Adam McKay.

That is Adam McKay and see if I can get a walk on. You have the number. He'd be in the writer's room. Also, so for people who didn't see, I have a couple of notes about the ending. This was basically a mirror, for those of you who don't know, of Rupert Murdoch. And what did Rupert Murdoch do with his kids

and James Murdoch being a really smart son who is now, who was possibly going to be the era parent, but I think Murdoch just decided to sell everything to Disney. This was kind of the same moment where Logan Roy was like, listen, I could give this to my kids, but there are people like Disney

who really know what they're doing and are playing at the top of the game. That is in the best interest of the shareholders. So in all these kids who basically prove that they don't know what they're doing, Like each one this season, you know, Kendall went for the throne and he didn't kill the king. Shiv tried to get a board seat at the board meet at the annual meeting. She failed.

And then Roman tried to do this deal with the merger and be his dad's right hand man. And he failed. And then all three of these failure dipshit kids then decide that they're going to collectively use their total incompetence to try to take on Logan Roy, who is a self-made man who built this from nothing. thing and he's got Jerry and Frank and all of these people around him who've been through the war with him. And they're all like, oh, but you should do this because we can now vote you. And he's like, yeah, no, I talk to your mom. And Tom is loyal to me, not his wife, Shiv, who's not loyal to him. And all of a sudden, they are totally neutered. And all they get is they're whatever, $2 billion each. And Logan gets his $5, $6 billion and he wins again. It's the perfect time to sell.

And Logan wins again. It's like the perfect arc. They actually thought, each of these deranged kids thought that they had, because of their silver spoon and because of their inheritance, because of what was gifted to them, some amazing ability to take over this company and run it. When in fact, what they should do is just take the bag and run with that and go do whatever they want in life.

And the other observation I had about this is they're so miserable that no matter how epic their lives is. And this show does an amazing job of accurately showing the life of the ultra, ultra, ultra, ultra, ultra, ultra wealthy, where they do not care about their 50 million dollar apartments or their jets or their helicopters. They're on huge lakes. They're in Tuscany. They don't care. They're miserable while being in the greatest locations that all of us watching this would be like, if I could go on that vacation once in my life, I'd talk about it for the next 20 years. You guys hear me talk about the time I stayed at the Amman Hotel in Tokyo. You hear me talk about, you know, times I've gotten to, you know, I went to Tuscany this summer and I was able to borrow

Chimot's beach house or whatever, or whatever, but he let me use this place in the beach in Italy. We've been public about that. It's very nice. And I, like, for me, I'm just pinching myself. This is incredible. I can't believe it came from Brooklyn got to have this. These people are not having that experience at all. They're miserable. They don't care. And what amazing people. performances, I think across the just entire spectrum, those four kids being miserable and then getting nothing. My prediction for next year is that this deal somehow comes off the rails, the deal that they closed with the Gojo deal. Something happens and the Gojo deal unwinds. Or the Gojo CEO, yeah, like maybe the Gojo CEO was cooking the books, maybe he gets arrested

He dies in a helicopter accident. Something happens. And somehow Logan Roy gets control of the company again and then everything's back in play. Or maybe the kid's splinter and they go start buying assets and they get their money and they start building things. But this has got to be no more than a five-season show. I think the way this has been going, the stakes get higher every year and it's got to unravel. I hope they don't do this for 10 years. I think they just have to absolutely end this show.

in five seasons or less. That's what I think. And that final scene for Logan Roy is explaining to them that they're just pedestrians is absolutely fantastic. And then there's this other scene when he's with that Scars guard character who played the clown from it. You know, what incredible where he, they both kind of respect each other because they are just marauding, marauding capitalists.

It's just those two on screen together. And he just realizes, this is my best, this isn't the best interests of all shareholders, especially me, to cash in my chips. And that they are just really just total morons. It's absolutely amazing. And shout out to Comfrey and Greg and some of the other supporting cast who just were amazing as well. I'm a big fan of the Red Scare podcast, and Dasha did a great job. And that kid, Greg, is just awesome. but Tom's,

Tom is the goat. I thought Tom was absolutely amazing. And I also love the guy from Ferris Bueller's Day Off. He had a great, great scene in this final episode where it's so important for him to have been the firstborn son. And then obviously, yeah, Connor, just amazing. He finally got his flowers in this episode

where they gave him a great scene because he's just been great in the show. but they never really focused on him enough. He got a really great scene. And Jeremy Strong, after that New Yorker profile, where he's just like some crazy method actor. And they kind of were sort of signaling that nobody likes to work with him because he's too intense and insane. He thinks this is a Shakespearean drama and not a comedy or a dromity

and that he's kind of like clueless or whatever. I don't know what's true of that or what's not or why that story dropped at this time. But Jeremy Strong gives the amazing performance. when he breaks down and just confesses that he's a murderer and he could have saved that kid or maybe he couldn't have and Roman comes in and starts making jokes. Now I know why I couldn't get a gin and tonic and Shiv's just like, you ruined my wedding. He's like, they don't care about the person who died trying to score drugs for this degenerate billionaire air. And what a great show. I know it's unrealistic. I know, you know, whatever, it's a bunch of white people acting insanely privileged or whatever, but I think it's like a great late stage capitalism moment and the end of media as,

it's really, it speaks to the death of the American entrepreneur in the media space. It speaks to the death of secession and inherited wealth. That really is a theme here, is that the concept of being born on third base and getting this incredible inheritance and these businesses, they just can't survive. not the media business and not the next generation. So this whole idea that the next generation gets to, nope, there are disruptors, there are entrepreneurs out there who are going to build better businesses like the goju guy, you know, or any other entrepreneurs they show on the show or capitalists.

The strongest survive in entrepreneurship. I just love it as an entrepreneurial show. The acting is top notch. The writing is top notch. I know it's unrealistic at times. The scenarios are unreal. But they do seem to get a lot of nuances right about. you know, where they're going, how they're traveling, the clothes they're wearing, what matters to them,

you know, the whole scene with the bunny rabbit and feeding them a bagel. Like that is like crazy, rich people with, you know, sending their concierge doctor to take care of a rabbit. Like, that's just perfectly on brand and amazing. What a great show. Congratulations to everybody involved. If you haven't watched it, I'm sorry for spoiling it, but it's sort of like any of these great shows. like The Sopranos are Breaking Bad, where I think it's just like some great wine you've had before, some great restaurant, you got the chicken parm or you got the rabbi there before, and you could go back 10 times and get that same Peking duck and be just as happy as the first nine times. Great job.

And what do you think of it? Matt mentioned me on Twitter, our Instagram. What was your favorite part of it? And if you, by the way, in this day and age, I'm giving you 48 hours on the spoilers. I'll tell you on the show if I'm going to talk spoilers. I'll put it at the end. But just on Twitter and everything else, you got 24 hours, 48 hours, and then everything's out.

Stay off Twitter. When I want to watch a Knicks game, I don't open Twitter. I have scores off. If you don't want to get spoiled with these big season finale, whether it's billions or this or curbed, just stay off social media, okay? The end. Did you read the whole entire profile on Jeremy Strong? I didn't read the whole profile.

Okay. I read like half. I was actually listening to it, Autumn, which was a good. company I wanted to invest in, AUDM got pulled up by the New York Times, I think. They have professional people read whatever the big features are. And so at the top of the New Yorker page, they had that where you could play it. So I started listening to it while I was working. It was, so I thought the writer did an amazing job, amazing, balancing it where it was,

it was very like, it took Jeremy Strong very seriously. And he's like, he's almost Daniel Day Lewis incarnate, right? Like you read this, did you read the part about it? And he studied all those actors, yes. And he was obsessed about certain actors like Dustin Hoffman, yeah. And Daniel Day Lewis, like he would stay outside of his, he, you know, he became his assistant on one shoot for. He got on the sets of those people, yeah. And he would just, he was outside of his trailer all day, all night, whatever you need, Daniel, I'll do it for you right away.

And Daniel Day Lewis wrote him this amazing note, like, you're the future, whatever. And he wouldn't talk about it because obviously Daniel DeLois was very private person. But then they also, he also like, there were these little hints all throughout the article where, and someone had a quote, like, you don't know, you can't, it's impossible to tell if Jeremy Strong is, like, the next Daniel Day Lewis person that, that is like, he's just about that life. Like, he's acting as his life. Or, he's going to be a method actor. Do not, do not let anybody else on the cast see me until we do the scene. Yeah. That's how intense they are. Like, if I happen to walk by somebody and make up, you, you, you, you f*** the whole thing. You fucking. And I can't do my

performance. Yeah. So, but the, the writer kind of, uh, all. Also, like, there was these little nuggets where he, like, he kind of might be insinuating that he's sort of faking it. And he's actually what he really is is like the best networker of all time. Because then later in the article, the guy mentions he's or the person who wrote it mentions that. Jeremy Strong gave him like a list of names to contact. Yeah. And it's all. And then it's like, and the writer's like, yeah, and two days after I started the profile, Matt, I got a text from Matthew McConaughey saying, oh my God, Jeremy Strong, hardest worker ever, best guy ever.

And he's like, that never happened. Like, that's weird. So he kind of like, I don't know. I thought he told the line really well where he's like, he is this like crazy, obsessed method actor, but he also like really knows how to play relationships. He wants to be the crazy. So he's like PRing himself.

Which, by the way, Kendall in this last episode, spoiler alert, it's not a major spoiler for him. He said, you know, he's like, yeah, I think I'm just going to document dump all this stuff onto my instant. And Vanity Fair is working on a story with me. And then Confere comes and he's like, well, it's kind of more like the PR person kind of like, well, it's more kind of

like we're kind of floating ideas with Vanity Fair. They're not really reaching out to us. And it's like, oh yeah, these guys are so desperate to be relevant for their inheritance that they're actually calling Vanity Fair and trying to stir stuff up and like... Yeah, and I thought you made a good point too. Like, you're, I think Succession

is at the point where and very few shows at this level where you don't even care what the plot is anymore. You just want to see everyone hanging out. Yes. Right? Like the Sopranos hit that note, right?

You don't even care what happens. You just want to see Pauley and Silvio. If they're at the bang, if they're at the poker game, it's going to be great. Like, it doesn't matter. It does not matter. It can be about anything. And I feel like, you know, there are shows where the plot, like Game of Thrones never really hit the point where you want the characters hanging out.

It was kind of all about the plot. But Succession is like, it doesn't even matter what the plot is. It could be anything. You're just like, yeah, I'm in. I just want to see everybody hanging out. No, no. Like we're going to a wedding to Tuscany. It's like,

Awesome. Can't wait. Well, you know, and then it's also like they're in the back of a limo. They're in, they're on the jet in three different cabins and different things around. That was also like a very cool note. When you're, I've been on a lot of private jets obviously. And like when people are Super Bowl or what's up? Like there are there are ones that have one cabin, right?

You have four seats in the front. They got the shared table and they get a bathroom, right? Okay. Starter jet, 12 seats, whatever. And you got one that's got like the four seats in the front and the, you know, captain's chairs. And you got the table and the couch for like eating a meal. And then you got a cabin in the back with a door that closes. And that's like typically a bed.

And you got the ones that have three. So there's like one seating room. Then there's like another seating room. And then there's a bedroom. And then there's the ones that have four. And ones for the crew. One's for security, the assistants, the nanny, whoever. and there's like the passengers and then there's the principal.

And so, you know, when Logan Roy is traveling, he's like, you guys go up there, we're going to be in this cabin, security and my assistant's in the first cabin, and they're walking between. Like that little nuance, there's somebody who is this life, who's telling them, it needs to be four cabins. Logan Roy is not on a two or three cabin. He's on a global. He's on, you know, this level of plane. It's got to have four cabins because discussion of the kids. is happening in one. Logan and his, you know, business partner or whatever is in one. And then the assistants and the nannies. That's incredible. It's pretty, like, that level of

detail is just extraordinary that they get right. We're like when they went out to the Hampton's house this season, Amagascot or whatever. Amagansit. Amagansit, whatever. Like, and they're going out to this house and they got to go there. Like, that's actually a real house that was sold for like $75 million. That's got like whatever amount of beach front. And they're going on a hike. And then some chef has set up a lobster bake. I've been to a, I mean, I've been to Nantucket and Kate Cod, like a lobster bake takes, you know, like 24 hours of planning. It takes 10 people.

They're setting up and they're like, oh yeah, we got to, and then just like stumble upon this table. Like it's nothing. It's like, they spent $10,000 setting up a lobster bake at the end of a two mile hike. Yeah. Stop there. They don't even eat anything. They just have like a glass of wine.

They barely touch it and they just like all gets thrown away. And you're like, the poor person in me or my poor, you know, thinking is always like, oh my God, they just wasted $10,000 on a clam-baked lobsters. It's like five-star Michelin chef. All these people had to carry tables out there and set all this up. They don't give a fuck. They just, yeah, just throw it away. Who cares?

Not my problem. It's like, it's a rounding error. It would be like you throwing away a chicken sandwich. Like you ate, you were like, eh, I don't feel like the chicken sandwich. Like, I can't throw away a chicken sandwich. I still, like, I'm like, you got to save that, right? those are the notes that the show absolutely absolutely nails of conspicuous consumption and I think it's also kind of like the end of the white guy, white family, media company

like there is something Connecticut, whatever great neck Long Island East Egg, West Egg, I think that's been a criticism of it of like oh my God it's all these white people it's like and then they have like the New York Times was going to merge with them in that second season and they were like a bunch of white people, but they were like super liberal, and they're like the Fox. It's sort of like the Scholesberger's and the Murdox considering a merger,

and it's like all these decrepit old white, you know, rich, you know, heiresses and heirs, and, you know, they all just got handed this, like, dying empire, and they're just like, totally circling the drain with it. Absolutely great season. And shout out to the, I don't know if you watch this podcast,

but there's a podcast called The Watch. And they did a great job this season of just every night doing a show where the showrunner and this other guy who is just a pop culture genius, the two of them. So folks are always asking me for a recommendation. But Chris Ryan and Andy Greenwald. Andy Greenwald, yeah. Andy Greenwald is like actually makes TV. So he actually can talk about, and if you listen to it, a lot of my observations,

going to be crib from them, but also stuff that like, you know, I've been reading all the, I got so into the show. I was like reading all the recaps and, you know, people talking about it on Twitter. But they do a great job. This kid, Chris Ryan is like, he's kind of like the version of me as a moderator. Chris Ryan is unbelievable. I think like Chris Ryan, I like to meet Chris Ryan at some point because he's been doing pods for a long time. And I kind of feel like the two of us have a similar podcasting style where he's really good at getting the most out of Andy Greenwald. and that he adds his piece to it

and lots of impressions too he does impressions yeah yeah he does I just like you know like I have to say like Bill Simmons and his like internal squad for the ringer they really have perfected

the hot take two man game pick and roll you know and I didn't even know they had one about TV but I watched I listened to the watch

after like some of the the Mandalorian and they did secession with all. And then shout out to my friend Karas Wisher. She did the official podcast, which was good, but not as good as the watch, because she had to do the official HBO one,

so I hope she secured the bag and they paid her a million bucks for it. She got access to some of the cast and whatever. So that was good. But the takes weren't as good because I think they can't be as critical because it's the official HBO one. Or, you know, yeah,

she needed to be paired. She's such a great interviewer. she loves the show, but she needed to be paired with an independent TV critic for the entirety of the arc. So that was my criticism of that podcast

was they should have just paired her with like an Andy Greenwald or somebody who could independently kind of hit at it, but that's the problem when, you know, the person who makes the product and does the post show.

Insecure has been doing this wind down after WI&E, like wind down, but wind down. And that's interesting. It's like this whole trend, but I like, independent people who do it. I'd like to do that at some point with like the all-end crew or

something. Like after something, I don't know what we would do. What would we do, Nick? Like after what could we all get together? Congressional hearings? Maybe they're long. That was a joke. That was a joke. That was a joke. Okay. Professional hearing. I wish there was something that was like the Super Bowl of what we do. There was no Oscars or Super Bowl of what we do. I mean, if Steve Jobs was doing a keynote, that would be it. yeah but there's not so yeah no and i i almost think that the part of the why allans cool is that you guys don't care about your like there's no um i think that you all should think that you the show is the super bowl of your industry that's what it's becoming at least once a week when

it comes out right yeah i mean we're 45 is the peak i saw that's how i want you all to think i want you to think that this is the Super Bowl of our like every week. I do. I take it seriously. I don't know if you saw the comment. The top comment on the YouTube was just that I did a great job moderating this week. And I was like,

I think it's not that my moderation is getting better. I think you get credit for your edits because I know you're editing to make things easier to hear when we all start talking at the same time. So shout out to producer Nick, the fifth beetle on the all in pod. The thing I would say is I've been working with them offline and saying to Sacks, like here's why I'm interrupting you. You're going to.

long and it sounds like a monologue. And if I let you go on a right wing tirade and I don't represent the other side of the opinion, you're not being challenged. So let me challenge you. And it's not an interruption. You're just doing six points. You got to do one or two points. So we have a reasonable chance.

And then Chimot is now and Freiburger are becoming the masters of saying, hey, I want to build on something J-Cal said. Hey, I want to build on something. I like Chimot's point from two episodes ago. In other words, showing interest in the, other besties insights is when things get really good, I think. I don't know what you think. Yeah, I think it's incredible.

You know, I love like last week for, and I told, I told you all this, but I thought that the better.com layoff segment was the best. Like if someone had to ask me what this, what is the show? I would just give them because it started funny, like making fun of how. Totally. Yeah, terrible, terrible job. And then it got into, you know, sort of like, here's why this happened. And Friedberg was like, I think we should really.

And he always does this. He deconstructs things down to like what actually matters here. And he's like, well, what really happened is they were, yeah, they were wildly overfunded. And when you're overfunded and it's a hot market, you're pushing all the chips in. And when soft bank gives you money, a lot of what they're giving you is also growth targets. And to meet those growth targets, you have to. really go all in. And if there's a pullback, especially in a market like mortgages, you're cutting people.

And so some of this is an incentive to grow, is due to the incentive to grow as much as it was to, you know, any other normal market thing. Yeah. And then saying, you know, Freebert gave like this advice. Like, hey, as a founder, your investors, they don't, especially if it's, you know, one of these not going to name them, but firms that are throwing a million bets out in 2021, they don't care if you're one of the nine that go bust, they don't care. They care if you're the one that doesn't go bust that hits that, you know, 50, 80x, whatever. That's all they care about. But your

values are different. You should care about your employees. And what if you go out of business, it doesn't matter to your investor, but it matters to everyone that you employ, right? And then Chamath gave all these amazing stories from Facebook and that led to the Yuri Milner story. And it The market was compressing and they needed to get money. And then Yuri came over the top and they had taken money from Microsoft. He was given that inside baseball of stuff people have never heard of. Never. And it was just that, but all of that information was in one segment about a stupid 900

person, not and you know, of course, that's terrible for the 900 people, but in the grand scheme of things like, who cares? Yes, it was like a layup story, right? It became a bigger picture. Right. And the whole reason the story got brought up because you were like, let's talk about how ridiculous this is. And then it just turned into this like magical, incredible.

segment that you will not find, you cannot find that anywhere. You're not going to get that anywhere else in the world. I don't know if you saw my tweet, but I said, listen, I think what's happening in mainstream media is they're addicted to making you scared and outraged, just like the algorithm. They want to make you scared. They want to make you outraged. Why increases engagement? Then if you think about what we're trying to do on the pod, and we explained it the other week, and we should leave this, by the way, this decompression of a deconstruction of all in. Let's leave this into the episode, please. I like it as a segment. I like you being on the show. a little more, Nick, you're good on the show, if you don't mind.

Thanks. What was very interesting was, you know, we were saying, we're trying to teach you how to be an independent thinker and radically self-aligned as a word I use. That's what I'm always trying to do. I want to give people those insights and make them radically self-reliant. They trust themselves. And I think what's happening is this bifurcation of, you know,

commercial media, corporate media, like whatever. It's Fox, MSNBC, New York Times. It's all corporate media. Vox, BuzzFeed, they all exist to make money for shareholders. And the quickest path for them is to try to keep up with the algorithm to get more engagement. So they're in an arms race with Zuckerberg for outrage, for engagement. How do they get it? It could be cancellations.

It could be woke. It could be fear. It could be COVID world coverage. It could be, you know, if there's a riot, whether it's a January 6th riot or looting in San Francisco or a BLM or written house, they're going to get you anxious, worked up outrage to get you to tune in tomorrow night, to MSNBC or Fox or anything in between the two. What we're trying to do is to say, here's how to think for yourself. Here's how to be smarter and create things in the world and not be part of that silliness,

which it's becoming obvious to everybody what's happening. You're being manipulated to make you outraged to get you to tune in again. and I got absolutely pulled into it during COVID and during the Trump era because how could you not? It was so crazy and scary. I don't blame people for it, but they're whipping it up. And I, you know, with that Rittenhouse thing, I wonder in those situations, if we didn't do wall-to-war coverage of people rioting and going crazy, if Rittenhouse would have left his house with the gun, right? I think people are saying, I want to be part of that. I want to, or some subsection of people who are so worked up, they say, I want to be part of

January 6th. I want to be part of whatever is happening when Rittenhouse decided he had to go protect himself. So the media is not causing January 6th, but they're not not getting people to engage in it more, if that makes sense. I don't know how you feel about that, Nick. Yeah. And you can.

That's my take on our success. Yeah, I try and, and you could just see this like, it's a microcosm, but if you look at the titles of the episodes, I try and make them engaging with our success. making them inflammatory, right? For like, for instance, last week,

right, we talked about a giant tech stock pullback, um, or growth stock pullback, if you want to call it that. And I, and, and kind of what happens when you actually hit,

uh, we didn't call it, uh, depression, but, you know, I think we're going towards a recession in the stock market for the next couple years.

Correction. Recession. Whatever. Correction. Okay. Um, and I, I,

you know, I think I said, I think in the title, it said operating in a downturn. Perfect. I just wanted to make it like not, you know, I didn't want to say like, hey, sell like everything right now. You didn't say crash. Right.

And I just, yeah, I, I, I try and make it. And I know I'm stumbling here. You know, I didn't notice that on 57. You said understanding Omicron. Yeah, I didn't want to make it like. You didn't say like, Omicron. Oh, yeah. Understanding it.

Like, I think that's actually a great way to do. Tech stocks, plummet was accurate. Some people might say, but VC's great resignation accurate, Jack versus departure. I mean, we just put the facts out there and that's it. Yeah. Yeah. And I try and get most of the engaging topics in the title. But if you look at earlier episodes, I was a little bit more inflammatory because I didn't

really think about the impact that the show would have now. Right. And I don't want people to look at our title. And like, remember, I think I tweeted this, but like all the shows that we were around in like the top 50 shows in America were like one of them was like American democracy. Is it changed forever? I think one of them was like, boobies. something.

Yeah, but that was funny. Everybody responded to me on that one. That's a comedy podcast, though. The comedy podcast is called like, yeah. Yeah, whatever. But yeah, there was like an NPR podcast that was like, is this the end of American democracy as we know? It's like, okay, like what are we doing here?

NPR. Like even NPR's in on it. And I don't blame you. As a producer in media, the, you're in an arms race for headlines. So you want to do the best you can to get people to the show. I think what we all have to do is like, let's just calm the rhetoric down, calm the fear mongering. I kind of wrote a couple of tweets over the weekend.

I got a big response. I was like, listen. I don't know if you can pull those tweets up somebody, but I basically was saying like, listen, we live in like the greatest time ever. We're living twice as long. The opportunity is amazing. I'm just talking, and I was very specific to say in the United States, it's like, stop complaining everybody.

Please, I can't take the incessing complaining. And some of the hardship, I'm listening to this hardcore history podcast that my friend turned me on to last week about it's called Roadmap to Armageddon. So I started listened to us over the worst week.

Like the Nazis during World War II were hopped up on methamphetamine. They weren't sleeping. They were deranged murder. Can you imagine like you're fighting the Nazis? And they're on zero hour sleep hopped up on meth.

Like Nazis are already crazy. And like we're complaining about Bitcoin 40,000 and like my NFTs is down and my door dash is in here like fuck up people like buck up our grandparents like went to war and we're already like saying democracy's over and complaining about like nonsense yeah I think bringing it back to all in how I would kind of phrase it I think that specifically our show has a major advantage and it's the ultimate advantage actually over every other publication on the planet in that

we don't need to make money there's no financial incentive and it's it's it's you all do it because you care about impact. And I like to talk to each other. And you like to talk to each other. You do it because you like it. And it's started. Yeah. Right.

And that is the ultimate advantage in that, you know, they need to be inflammatory sometimes. They need to drive people to their website so they can survive. None of you are worried about that, nor am I. And it's just, it's an advantage that they don't have. It's kind of an unfair advantage, right? The advantage they have. yes, they have the unfair advantage of like if you're a tech podcaster who runs events,

I'm not going to mention anybody specific names. If you're too hard on somebody, they won't speak at your $7,000 ticket conference. So you have to tow this line of access journalism, they call it, where you're not too brutal to somebody so they don't show up. But then you've also got this audience that hates tech, and so you're hating on tech

while trying to get tech people to spend $7,000 on a ticket while trying to get the right person to come and sit down for an interview. And so this access journalism becomes very challenging. Harris Fisher is the best at it. She's like literally was dunking on Zuckerberg. And she's like, I like Mark Zuckerberg personally. You pull up her article about Mark Zuckerberg from last week in the New York Times. Her first sentence is how she personally likes Zuckerberg.

But she needs Zuckerberg to show up for code conference or to be on her podcast at some point. And so she's just very good at managing that access or whatever. but then there's other people who are just pandering, right? I wouldn't put her in the pandering category, but it does, we're free. I mean, everybody knows we're capital allocators. We are obviously going to talk about books, but we're going to explain it.

Here's why I'm long Uber. Here's why I'm long Robin Hood. That's why I'm not selling my swear shirt. Last week, another great example, another great example of, so you were talking about, Friedberg was talking about low-level, low-wage, manual, you know, McDonald's, Starbucks, bucks job starting to go away because the companies can't afford that price anymore and can't

run it profitably if they have to pay people $20 an hour and nobody wants to work that job for that crappy wage anymore, right? And Freeberg brought up how, you know, technology is going to change this. And you say, oh, you know, not to pump anything, but, you know, we and you didn't even say the name of the startup and you said, I have a startup that, um, we're sorry about CAFEX as doing robotics or whatever. I didn't want to pump them up. I was just like doing Right, but which, and you didn't even mention the name, but as you brought it up to make a good point and a good example, that was fair. And that was in line with the conversation. You didn't bring it up out of nowhere.

Everyone's like, oh, pump it, dude, pump it. Like joking, right? So it's this like, you did it to make a point and a good one. And you got made fun of for it because that's how the show works and you guys are friends. And that's another thing that really, you know, it's like an all-star team. We wouldn't be able to break jobs and stuff like that. Right. It's like a super band, but everybody actually is really good friends with each other. It's a perfect, I don't know. I love doing it. I, you know, you say all the time, like, you give up your Friday nights for it. I don't care. I love doing it. I really do.

I know the audience appreciates you giving up your Thursday and Friday nights for it over the last year. And I just nobody else could do the edits you do. Plus, I just rip it up on Saturday. So whatever. Yeah. I'm super pleased with CafeX surviving the downturn. I, you know, it was really hard, I think. for companies in the retail space and just started, if I just put the Instagram up there, somebody can pull up the Cafe, Get CafeX, I think is their Instagram.

We can leave all this in the show, by the way, because I like to give a little shout out. I like the sort of like show decompression or deconstruction. Check out the Instagram. Somebody can pull it up, and you'll see they've been selling these Colette macaroons at SFO's Terminal 3. And I always said,

like, he told me there were, like, why are you using the arm in the cafe app? So can somebody pull up the Instagram? I just posted it in the stream. And the second image is a video. You can play that image while I talk. I always thought, you know, like people are like, why don't you just do this as like a closed system?

And there was like a company Brigo and just do it all behind the scenes and the cup comes out. Like, you know, those old school coffee ones that you would see in a hospital that use powder, milk or whatever. And we were always like, we want to use the arm because we want to be able to do anything with it. And one of the things we always knew was food. would be really great. And taps would be really great. So they have taps, they have food, and they have the espresso machine. So you can really do a lot of interesting things. Like,

they will take from the tap, you know, some green tea or some kombucha, and then they can put milk froth on it or oatmeal froth on it and make it like a Starbucks thing. But you can only do that if you have an arm working between multiple machines. Obviously, there are other beverages that are super popular right now, like boba. So they could obviously do a boba if they wanted to. They can use a hot chocolate machine. You can do anything with the arm. But this is the thing that has been the game changer. Selling, you know, $10 packs of, you know, the best macaroons in the Bay Area or whatever, the best ones will be in LAX or Austin's airport. You really put really interesting things in there. And then that makes all the ticket sales go up and nobody wants these jobs. So

if you're Dunkin' Donuts or your Starbucks and you can't get people, and the lines are getting, I mean, I don't know if you've seen the lines at an airport for a coffee place. I mean, it can be 30 people, people just give out. She'd just put one of these. You should just put one of these. between every four gates, in addition to having the Starbucks, if people want to go to that, and then boom. So they went to a, they pivoted to an enterprise model. They run these ones at F, SFO,

but if Duncan or Lee or Dean and DeLuca or other people want to run, chock full of nuts, whoever, any espresso brand, any coffee brand wants to run these and put their name on the front, they'll give you the machine and the software, and they'll be like a hardware as a service provider. So shout out to get CAFEX. Really, really proud of the team.

Now, when they lease the machines or franchise the machines, do they still maintain the Cathay-X branding? No, the idea is, you know, we had to put them out there ourselves because, you know, who's going to do this crazy thing over the last five years, right? It was like a really crazy idea five years ago. Now it's an obvious idea. So we had to come up with something. But now, you know, to pick the locations, operate the machines,

and build a coffee brand is a lot. a lot of work. There are people who already know how to do that. Like Dunkin' Donuts and Starbucks and coffee bean and tea leaf. Everybody knows. I'm just saying in terms of branding, like I pulled this picture up. Imagine this with like the pink and orange Dunkin' Donuts colors. You know, you don't have to imagine.

And I've seen like in decks all of the different brands with on there. All the different mokups. Yeah. All the different moshes. You can imagine this could work also for, if you had a club in Vegas or something or you had a place. Making mixed drinks? Obviously, if you have taps, you could have cider, beers, wines. You could be making coffees with, you know, collua in them.

So it's ultimately extensible. And what I was looking for an investment was something that could do the whole job. And I looked at the salad robots, the pizza robots. They always did 30 to 60% of the job, which is fine. I mean, that's helpful. I wanted something that would do 100% of the job and be a full stack. So I do think at some point, some coffee brand, put a thousand of these or two because you could have a thousand of these

in between your 5,000 existing locations, right? And then the people at the existing location, like let's say you were Duncan, Logan Airport and you were coffee bean and tea leaf, you know, at LAX and whatever in Austin, the Austin, you know, whatever, a coffee brand. You could have the people who are working in the live store, have three other versions of these, right, between other gates, It's like the gate that has nobody you have to walk a mile to. You put those there.

The people then go fill up the coffee beans, fill up the milk. If it breaks, they go clean it. You know, that's the vision, I think, is filling in. Like, you ever see a Starbucks in the baggage claim area? No. You can't fit it, but you can fit one of these in the baggage claim area. So when people are waiting for their bags, you could have one of these there. The dunk in person from upstairs could come down and fill the beans at the end.

And there's GPS monitoring on the cafeX app, right? So if you're like close by a machine, does it send you a notification? Like, I think it would be so cool. When we had them in, we had four of them in San Francisco. And they were just constantly going to vandalized. It was a real problem. Tough city to have a. Tough city to reach out.

No, they would give you an alert. Hey, would you like us to order your mocha? And it would remember your last drink. You say yes. And it's like counting you down as you go there. So it's very cool. Yeah, like you get a push notification. like, hey, we know your favorite drink is this.

You will have it ready in three minutes. I think that's the Atscale vision. And, you know, if you just... That would be so dope. Anybody knows anybody who is looking to build a cafe chain and they have the ability to buy the machine. I think the machines go for 200K. And then it's like, I think it's 2K a month to maintain them or 1,500 for the software.

So, you know, these things can do $500,000 a year. So they pay off in just a year or two, I think, if you have a good location. and then the next nine years is all profit, basically. And coffee's high margin. So you can really, you had a campus of some type or you own buildings. You know, you need to be able to sell. Yeah, it sounds like college makes so much sense. It's relatively safe areas for the most part.

24 hours a day. And you only need to sell, I think. A lot of foot traffic. If the average ticket size is like six bucks, you know, between one and two drinks, if you have 100 order, 100 to 200 orders a day, you start to hit six. to $12,000, $6,9, or $12,000, $365 days a year, $65,000. Something in that range makes it highly profitable, like super highly profitable. I think $1,000 a day in orders, you know, $150 orders a day, 100 to $200 a day.

You just are going to break even to be massively profitable with these. I wonder who's on the buyer side, too, for universities. Like, is the, like, if you're... Usually outsource the entire thing to one restaurant group. They don't want to deal with it. So that's what I think that's a challenge. Basically give the restaurant groups the budget. Like are you dealing with a public university or private university's budget?

Because if that's the case, then 250K up front wouldn't be that big of a deal, right? I think they put the entire concession out to, in a place like a college campus or a campus like Google, they might put the entire thing out to a restaurant group, like restaurant associates or something. Just do everything. All the coffee stands, all the auto wallet juices, the snack bars, they'll just do everything for them. they don't have to worry about it, but then if you have a big venue like an airport, they want to create a marketplace or you have a mall. You want to create a marketplace where people are competing against each other paying the highest prices for rent, right?

And so they wouldn't just give over the entire mall to somebody to do the food court. They want to have a vibrant marketplace of competitors. And so that's the idea.