This Week in Startups - Meta's looming layoffs & path forward, Airbnb answers concerns & more | E1606

Episode Date: November 8, 2022

Monday! First, J+M dive deep on Meta reportedly cutting "many thousands" of jobs this week (1:56), the company's best path forward (12:14), and more. Then, J+M discuss some new Airbnb features (40:52) and Peloton's former CEO coming back with a new DTC startup! (55:39) (0:00) J+M tee up today's topics! (1:46) Meta will reportedly continue the trend of tech layoffs, to cut "many thousands" of jobs this week (10:34) Notion - Sign up for FREE at https://notion.com (12:04) Breaking down Meta's path forward, Jason's newest Jay Trade, plan for Meta to juice its stock price over the next 5-10 years (31:56) LinkedIn Marketing -  Get a $100 LinkedIn ad credit at https://linkedin.com/thisweekinstartups (33:22) More context on Meta layoffs, severance and finding jobs post layoffs, Meta's insane pace of hiring since 2019 (40:42) Airbnb CEO Brian Chesky announced new features: full pricing transparency, value prioritization, restrictions on checkout requests, and more! (55:29) Former Peloton CEO John Foley is back with a new DTC startup FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood Subscribe to our YouTube to watch all full episodes: https://www.youtube.com/channel/UCkkhmBWfS7pILYIk0izkc3A?sub_confirmation=1

Hey, everybody. Big news this week. The Wall Street Journal is reporting, Molly, that meta, the Facebook corporation, is going to be laying off thousands, many thousands of people this week. My lord, it's getting intense out here in Silicon Valley. It's real. I mean, we had said last week that if Google and Facebook, if meta and Alphabet started doing this, it was real.

So it is real. We have a ton of charts, though, to show the evolution of meta over the past few years. We're going to go real deep. on Meta's Evolution, hiring, stock market drop, and Jason's plan. Stock buybacks? Stock buybacks. And then there may or may not be a shocking J-trade. Shocking J-trade.

And then, pursuant to our discussion last week about Brian Chesky, making all the right moves and throwing off billions in free cash flow, he's at the top of his game on a product basis as well. Big product news coming out of Airbnb. bit. Yeah, crushing it. And speaking of somebody we are rooting hard for to crush it, apparently we are. Former Peloton CEO John Foley is back and Jason is shopping for a new rug at his new startup, D-C startup called Ernesta. We're going to break that down too. It's going to be a great show. It's going to be a great show. Stick with it. This week in startups is brought to you by Notion is one place for notes, docs, docs, projects, and everyday work that goes way beyond a

Wiki. Get started for free at Notion.com slash twist and LinkedIn marketing. To redeem a free $100 LinkedIn ad credit and launch your first campaign, go to LinkedIn.com slash this week in startups. Hey, it's Monday, Molly. How are you? It's Monday. I had a nice, had a nice restful weekend with family. I didn't look at any social media. It was amazing. Yeah. Ran a 5K, training for the turkey trot. Yeah, how about how... Oh, you know, 5K? I did. Well, I mean, slowly.

So that's 3.1 miles. I'm going to guess your time. Three miles times, maybe just a nice jog, 11 minutes, 30, 4 minutes. We don't have to talk about my time. I live in one of those neighborhoods where you either go straight up or straight down. Oh, oh, that's different. Yeah. So I run down and I hike it back up.

So it's fine. That's fine. But you know what? That means that when I finally get to the turkey trot, my time's going to be amazing. Because all I ever do is walk up. Hill, quickly. The turkey trot 5K or 10K? It's a 5K.

My mom sent me all my marathon pictures this weekend. That was quite nice of her because the marathon was a great. Because it was a big marathon. And I started getting motivated because I've actually, the weight loss kicked in again a little bit. So I've been getting a little fit and I actually was on the treadmill. And I just started running. And I was like, oh, what's going on here? My uphill walking turned into running.

So it is possible that you could. Oh, yeah. I mean, it builds strength and then you run down and then you, you know, whatever. I mean, it just, listen, it feels great. It just feels it's like sometimes you do. a little extra endorphins. Yes. Exercise is pretty important.

Like, you know, mom being in town or whatever, or whatever is going on. Or whatever's going on in the world. Yes. I'm glad you, one of us had a restful weekend. Yeah. I highly recommend it. Okay. So, disclaimer, disclaimer, disclaimer,

I'm not going to be the CEO of Twitter at the end. And I'm not going to talk about any of the details of Twitter. You know, there's plenty of places on Twitter. You can read about that. that. So it's kind of odd to that to be the top tech story. We're not talking about here. But obviously, my friend bought the company. And, yeah, I was an advisor to it. But people are making a lot out of it that they probably shouldn't. It's my involvement has been greatly exaggerated. Of course, if that, if I say, my involvement has been greatly exaggerated, people are like, well, you're flexing. There's no winning. There's no winning in the situation. There's no winning. I will say, I find it both.

difficult and a giant relief to not talk about it. Like, it's sort of both of those things at once. It's like, you know what? At least whatever happens as the storyline plays out, like, I didn't have to say a word. I wanted to, but I also didn't want to. So like, you know what? I recognize it put you in an odd spot. I appreciate you having my pack to the, you know, extent you can hear on the pod.

But, you know, listen, if you want to hear a bunch of people randomly talking about it without a lot of actual information, It's plenty of podcasts. You have Twitter for that, right, or every other podcast. Or Twitter or any number of places you can get involved in rampant speculation, which I would say, is that about 14% accuracy right now? But let's get into the number one story that's happening. Let's do it. The other one.

Let's do it. Well, I mean, this is the big trend. I think we've been talking about this for a while. It's a meta story, and I didn't mean that as a pun. I really didn't. But according to the Wall Street Journal, meta, the company, is planning, quote, large-scale layoffs this week that could impact thousands of employees. As of September 30th, Meta had over 87,000 employees, which was up 28% year-over year,

over Q3, 2021. So massive hiring boom has happened at Meta on, all-in Friday. You and the gang talked about large-scale layoffs looming at big tech companies. And we said on this show last week that once we saw big layoffs start to happen at alphabet or meta, Google or Facebook, that that would mean we'd really hit an inflection point. And it seems like we're there. So these meta layoffs, like we said, are expected Wednesday. I think they are expected to be huge, like way, way more than Twitter or any of the other big layoffs that we heard about last week when obviously there where the Twitter layoffs, open door, Stripe cut 1,000 employees,

lift cut 700 employees. Like, it's getting to the point where I don't think we can safely say there's going to be a soft landing for everybody who is laid off from tech, clearly. Because also, they're not all engineers, right? It's sales and marketing people and brand people.

And it's, I think this is the official sign that we're headed into some legit, tough times in the industry. I don't even know if it's a broad-based US recession, but it's a tech recession. Yeah, I mean, in tech, this is a crash, let's be honest. This is crash-like behaviors.

Beyond a recession, recession, negative growth for two quarters, we kind of had that. Then we had as we talked about, the positive GDP growth. But in tech with these 60, 70, 80%, 90%, stock prices off from their peak, and with these significant cuts, we're going to be looking at, I think, what will feel like a recession for tech. And this is really the result of the free money that was available. and tech hiring being leadership was thinking we're going to hire for two years out, or at least a year. And I think there's a lack of discipline around making money and profits, free cash flow, employee stock options, comp. People are typically giving 4% of the company's stock away every year.

And when the market is going up and the stock price goes up, nobody questions any of these things. but now on the table at every company is, should we be by diluting the shareholders, forget about the employees and the management, because that was the focus for the last 10 years. Now people are saying the shareholders. Now, why, Molly, would people be focusing on the shareholders?

Well, because the shareholders are selling their shares and they don't want to buy them. Exactly. Like, the free money is over on every level, as is. Yes. And not every easy narrative is true, but one of the easy narratives about tech that keeps coming around and being kind of true,

is growth over revenue. Like we just keep seeing that in every tech boom, which is like, oh, we'll just have hyperscale, and then we'll make money eventually. But eventually always comes around, and sometimes it comes sooner than you expect and you haven't made the money yet. I think as Bill Gurley said,

like, you know, the boom is like going up an escalator, and when it goes past, it's like going down an elevator. You know, like we slowly, consistently go up, and then boom, right down the elevator, fast to the bottom floor. Management is starting to realize, we gave a, we're diluted, the shareholders too much, we're spending too much money. People are getting paid too much money. The entitlement is too high. The benefits are too high. And I'm not talking about health benefits

here. I'm talking about like, you know, kind bars, massages. Those those TikTok videos like, like, here's a day in the life of a Google employee in New York. And then they're like, I, you know, I went to get a massage. I went to get a facial. I did this. All that stuff. We should say, because I don't want to disrespect these employees who got all those benefits and act like there. But because that is what companies did because hiring was so competitive. They made that choice, right? It wasn't. It wasn't about like spoiling these big divas. It was just about like, how can we get you here? Because it was an insanely, everybody was overhiring. Thank you for correcting me or making sure that my point was clear. A hundred percent, that was the choice of management. Yeah. To create an entitlement culture from the boardroom where people had no accountability and were getting tons of stock options all the way down to the rank and file. Management and boards made these decisions. Employees were along for the ride.

And they also had no discipline in hiring people. They just said, well, let's just, you know, if it's going to, if we have to raise every salary 20%, and we got to do this to be competitive with each other, they created an unsustainable bid for high tech employees. I mean, the opening salaries in some companies, 250K, 150K, K, like for positions that if we were talking about it five or 10 years ago, would have been much lower. Yeah. So when all that discipline went out and we saw it in the new salary market.

We're like pretty standard million dollar packages. standard. It was getting out of control. You know, out of control. Out of control. And now what people are realizing is now that the top line's not going up, then the hedge funds or the retirement funds, people who are

want to own stocks that grow are saying, you know what, these stocks are not going to grow. They don't have discipline. They're not throwing off dividends. They're not throwing off profits. They're not buying back the shares. There are other options for us. So we went from the number one option, the safe option, tech to a safe option. I'm going to buy some energy. I'm going to buy some dividend stocks. I'm going to

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They have the dot com. And so when I saw this happen, Molly, I said to myself, you and I on this podcast had a conversation. I don't know if you remember this one. But I said, would not the logical thing for meta to do in a situation where nobody believes you cut some stuff, buy back your stock, cut the R&D spending a bit, and then watch the stock go back up because you're buying it on the cheap. And I had owned Facebook shares from, I was an LOP in a fund that had one of their companies

got acquired by Facebook. I sat on a nice chunk of that Facebook shares. I wrote it from $70, $60 or $70 when I got the distribution from this venture fund all the way to $115, and I sold it. The reason I sold it, Molly, was because I just didn't like Zock and his impact. Then I became a J-trader, and I said, I want to learn about public equity investment. you came on that journey with me and watched me lose 15% of my money

in three months. I'm just saying, I tried to warn you about Stitchvix. Like, other than that, I was on board. Well, I am trying to, it's biggest loser in the portfolio, thank you. Yeah. Go to jatrading.com to see just the bloodbath,

which is my first quarter of investing. I always ask me where my friends were before you make your J-tracks. Anyway. Anyway, what I've learned is that making trades with your heart as a public market investor is a bad idea. Got to be a little bit ruthless.

So I was out on the weekend. Oh, God. And I see this news break in our group chat, right? Nick says, hey, look, I immediately open up Robin Hood and I put in a trade. Jay, trade alert. And I bought Matt out. I cannot believe this. I was just like.

What is happening? You're just fully, this is your trade. transition to Supervillain? Basically. I bought 500 shares. Well, this is my standard slug. I'm buying 50K slugs typically because I'm trying to build like a million, two million dollar portfolio of active trading over the next 10 years with the stated goal.

You know, just beating venture capital returns. I just want to see if my VC returns from this period versus my, I'm taking like a 10-year challenge to myself. Can my public market buys either? match or compete with my venture buys. Now, venture funds I've been involved in are currently marked at whatever, four, five, six X, uh, you know, depending on where you trust the marks. Um, and so I've been elite in that regard. I'm not counting scouts where I did phenomenal and it was off the charts. But just looking at this, I'm saying, this founder is going to take the

medicine. I believe Zuck has so much pride and wants to win so badly that this, this moment in time, going from $360 a share to $90 a share, looking like, like a fool, having everybody in the world criticize you, everybody in the world give up on you, I think that is going to make suck, not break suck. And I think the first piece of medicine is doing what he's never had to do, which is to say I was wrong. I was wrong. You know who said I was wrong? Jack said he was wrong for hiring so many people at Twitter this weekend. I don't know if you saw that tweet storm. Yeah. He said, it's my fault. I doubled the number of employees, whatever, I shouldn't have done that. Brian Chesky made that huge riff. Now he's throwing

a free cash flow. Dara at Uber made that giant one. So at some point, mature leaders say I was wrong and they make the cuts. And you know, you look at Lyft, Stripe, Open Door, these cuts are happening. I think this is like, is this Lyft's third riff? I think so. It's their second, it's definitely their second, but I think it might be their third. I do, I want to go back for a second and say that on your Robin Hood screenshot of the thing where you just joined the evil empire and bought a bunch of Facebook. It said, time and force. Good for day. You were on the right side of the force for one day. He starts doing these rifts. I'm kind of going to Shoka. I'm going to go. This is a deep poll for Star Wars fans, but I'm going to Shoka now. I'm not part of the Jedi.

I'm not part of the dark side. I'm like a Ronan. Like perhaps my favorite character in Star Wars right now. That's an excellent. That is an excellent. pull for sure. I will believe everything you have said as soon as I hear Zach say, as soon as one, I hear where these riffs are. Because I guarantee, because if they are not accompanied with a reduction in metaverse bending, there's no universe in which you will convince me that what he's saying here is I was wrong. That's like that so far is the unproven part of your thesis. Right. So there's this, my thing was a four-part plan. A significant riff, which this one seems to be. We'll talk about how significant and what significant means here. Reduce.

the metaverse expense, juice the profits, which happens from those first two things. And there's other ways to juice profits. And then use the extra money to buyback stock. Essentially, one in three are done. The significant riff is going to juice profits. Now, we don't know if two and four have been done yet. But if I can get two, three, two or three of these, I'm going to double my money in the next three years, is my book. If I get four of these, this is going to be a ten bagger. I think he, yeah, or maybe a five bagger. It would be a five bagger if he does a lot. for. I could see. But he's also stock comp. I should have had a fifth one here is reasonable stock comp. So keep stock compensation at 1% instead of four or whatever they were

burning through. So that, you know. Should we do the charts? I interrupted you before we got to. No, no, no, that's sort of fun. I wanted to get your feedback. The charts that would actually show how this can also. Just how this can be accomplished, right? So set the stuff for the listeners. So we have some charts. Nick made some charts about meta's sort of situation. current events and then what we think might be future events if all of the boxes on your checklist they turn green. Okay, here's meta stock price since it's IPO in May 2012. You can see it hit almost $400 a share.

Wow. I had forgotten about those times representing a $1 trillion market cap in just like one year ago, late 2021. And then now it's trading where you bought it. at like 95, 95. When's the last time it looks like it was at 95? If you go backwards. I mean, maybe 2016?

Yeah. Okay, so we're six years. And that's about the time that they were on an incline, but also getting hammered by Congress, remember? Yeah. Because that was election interference stuff. There was a lot of testifying. There was like, oh, what's going to happen?

And it shot straight up. And it just pretty much shot straight up. So no one cares. You can swing an election with Facebook? Bye, bye, bye. No one. I mean, that was a cynical look. No one cares that nothing matters.

Yay. Now let's layer full-time employees over time on top. And we have this red line. And you can see that that number is only ever grown. There's not even been like a dip. It is now at 87,000 employees up 28% year over year in 2021. It like doubled in three years. Amazing.

Yeah. Staffing, staffing, staffing. That's a real telling chart. I mean, it literally, and this is. is what boards and management did. They said the stock price is going up. Let's just keep hiring because talent makes product, product delights customers, delighted customers, equal revenue. Revenue equal stock price goes up. Stock price goes up. You get into this flywheel of you correlate the employee account with the stock price. And you keep it out, you keep employees out of your

competitors' hands. Like we shouldn't forget this sort of catch and kill aspect of this. Did you bringing this up on this show that like sometimes companies it's a blocking strategy it's a blocking strategy it's a block it right it was blocking strategy exactly and they'll hire employees and just sit them there with an insane salary package correct just to keep them from the other guy so that was happening probably too okay now we're going to add meta's quarterly net kid in net income over time represented by a green line you see that peak at over 10 billion dollars per quarter in 2021 oh my god yeah look at that per quarter before just... What a chart this is.

Look at that so. Just to show people, we have now have the total employee account in red, the net income in green, and the stock price is the black line. We've now layered three charts. Amazing. Yep.

And the net income is almost in lockstep with the share price. Of course. You know, profits. Massive drop. Right. As profits go down, shareholders sell pretty straightforward.

But the only line that hasn't gone down is employee hiring. Correct. At all. Like hasn't even started to flatten. They are not even flattening that curve. That is just a rocket ship straight to space. Okay.

And then finally, we have a blue line added to our chart, and that represents Meta's average diluted shares outstanding, which sit at 2.7 billion shares roughly as of last quarter. And they've been giving tons of share. What's very confusing about this blue number. And we'll do another episode or segment. this, we have to break it down. It would be another double click, but the amount of shares being given to employees during this period was extraordinary. I believe, you know, like, I think the average, as I said, is like, you know, three or four percent. So they're giving money, they're

giving shares to employees, Molly. And that includes the board in all likelihood, although I'm not sure about their board, because their board is all rich people. I'm not sure how much comp they got. But all the management team are getting massive comp in the form of stock options. The developer, you referenced before, this million dollar package, they're buying off employees and talent with massive amounts of stock. The shareholders are being diluted every year by those stock grants, right? That stock is not free. That comes at the expense of the people who bought their shares in the company that didn't have them gifted as employees, but who bought it. In other words, your retirement, you know, or your endowment or some mutual fund. At the same time, you're diluted,

those folks, you're buying back shares. So Facebook did buy back shares. Now, I don't have the buybacks here. But if we could put the diluted shares outstanding with the align with how many shares they gave away and how many they bought back, I've ever heard people say that this feels like a scam. You're giving massive amounts of shares to employees and management. Buying back the shares, which inflates the price, those employees are selling into that, right? Okay. So you can goose your share price by buying back shares, but you're also at the same time just throwing shares out of a cannon like at the Warriors game where they do the t-shirts,

boof, like a money canon. Yeah. Now, is that fraud or is it sketchy? Is it unethical? Well, if the price of the shares are going up, nobody cares. Right. But when you see a plummet like this, now everybody's going to start questioning that. So they did these shares backs.

Remember they announced them in 2016. They did in 2017. And I don't know how many, how much they spent on it, but it was a lot. It was a lot. Yeah. I mean, they started in the single digit billions with these buyback programs. And by 2021 had announced, had increased the buyback program by $50 billion. So massive numbers of shares being bought.

By the way, side note, I also eventually want to. see this. When we talk more in depth about buybacks, I want to see this chart for Apple. Because same, same. Massive buyback program. Massive. Now, if management is keeping, you know, the net income, the profits of the business growing, well, then maybe you'd look at stock buybacks in a different way. And, you know, the relationship between stock buybacks and employee management grants, Molly, because you'd be looking at it saying, okay, the employee. are getting something, but they're making good decisions in management to keep those employees and to keep our profits high.

And we're benefiting from it as external shareholders who are buying a vote in this management. So I trust Apple. I trust Tim Cook. I trust the board over there. They're going to give some shares to employees to motivate them. They're going to buy back some shares, which is good for all shareholders, but we're not the bagholders as the public buyers. Right.

What feels like is happening at Facebook because the price is going down is, Zuck is choosing to burn all the money, have no profits, or run the profits down, I should say. There's still some profits, obviously. And the person who is really punished here is the people who bought those shares at $300, which is why Jim Kramer was like, I don't know if you saw that viral clip of him. In tears. They said he was crying. It wasn't crying.

He was just feeling really frustrated. Yeah. We'll play a clip of it right now. Yeah. Okay, you guys just saw the clip. Yeah. I mean, it's interesting to. hear anybody talk that sort of fervently about this idea of like,

I believed them, I had this trust. But it's true that it is very unusual. It's very unusual to look at the kind of chart we're looking at and realize that these precipitous drops, right? This absolute tanking of net income and share price came not as a result of externalities such as COVID, but as a result of internalities, such as pivoting the whole company to a totally unproven virtual reality strategy. and spending $15 billion on it. And so you could see where, if you're Jim Kramer, you end up going, well, okay, the buybacks were one part of this scheme that maybe didn't feel great and then were the bagholders,

but were the bagholders because, like, so far, Tim Cook has not lit any money on fire at Apple. No. Like, he's doing the same thing, but with shareholder price firmly in mind. Like, in no universe do we expect to see Tim Cook be like, you know what, I'm sacrificing all the iPhone margins? on something completely brand new and unproven. It's not happening. There is an underlying thing here that we should talk about as well.

The headwinds of Apple making their changes to tracking mobile phones and the headwind of TikTok becoming an advertising juggernaut. True. So there were externalities and internalities. That's true. I think I made that word up internalities. Which they give you even less faith, but the majority one you nailed, it's the spending. But it just shows you like management is internal.

screwing up and externally screwing up. We're getting their ass handed to them. So you're getting your ass handed to them and then you make bad decisions. Yep. And they're not reacting. That is a really bad situation. It's a bad situation. So it's a good thing you drop 50 grand on their stock. I'm just saying. Well, here's my thinking.

All right. Okay. And our next chart. Well. Yeah, this is the one that's going to be painful. And I do want to put a disclaimer here. Because we do, we are talking about humans and you brought that up early. Thank you. Your empathy is always high and sometimes I'm thinking with my brain, not my heart.

Love mom. Well, no, I'm trying to think, I'm trying to also channel my heart, you know, namaste, as well as my logical thinking here. These are people, you know, in these layoffs, we look at them, we talk about them in the abstract here on the program. You know, these are people who, you know, sometimes have given years of their life to a company. They have their friends there.

They love the company. And then the manager has to lay people off where the CEO told everybody, like, believe in me, believe in the mission, and then they have to say, like, we're saying goodbye to 20% of you, 50% of you, 15% of you, 15% of you, 15% of you three times. This is so hard and painful for individuals on one hand. And then you must also counterbalance this. So that's, this breaks my heart. I mean, I have done these kind of lay off smiling. I had people cry. And like to this day, I feel tortured by it because when I talk to the two or three people who were crying, when I had to lay it like a lot of people off at Mahalo back in the day. because the search engine algorithm just took away 90% of our revenue overnight. I said, you know, it's going to be okay.

You're so smart. I'm going to help you get another job. You got a job instantly. You know, like, and they said, no, it's nothing to do with money of the job. I just love working here so much. Yeah. You know, and you just, you feel that dagger in your fucking heart. Sorry to say that for, to my producers.

You have to take it out now. Man, it is hard. It is really hard to say goodbye to friends and say goodbye to the mission. Now, going back to my head from my heart. Mm-hmm. on a logic basis. These are tech workers. They are so desirable on a global basis.

I would just be, yes. 98 out of 100. Because what do you mean when you say tech workers? Some of them are sales, some of them are brand. You know, like the assumption that somehow they're all super skilled high tech workers, because we know that the people who get laid off first

are the ones in customer support. It's often sales. It's often marketing. Those are crowded fields. Like I just want to caution. I just want to be mom again. caution against the idea that this is like, they're all just going to get immediately snapped up by some tech company because they all know how to code. That's not true. Yes. So there is a 100% correct. If you're an engineer and you get laid off, you have four office tomorrow. If you're a sales executive, you get laid off or a marketing executive you get laid off, it could be quite different. It could be, well, they kept some of the marketing and salespeople and they didn't keep you. Therefore, you're the bottom half. You're the bottom third. You were the easy cut. And then you have this scarlet letter situation. If I'm using that term correctly, you're. You know, you've been pinned as maybe the weakest of the herd.

It's completely unfair because it's probably not true. Who knows how the decisions are made. Sometimes it's the first people in. Sometimes it's the most tenured people because they're the most expensive. And you say, oh, these young people who are coming in in year two of their careers are doing, I can have two or three of them do the job for this, you know, overpriced person, what the management thinks is overpriced. So you do have a lot of that variability.

You're 100% correct. It's a very nuanced issue, mom. It's a very good point of yours. It's just, that being said. It's hard. It's hard. It's hard. Exactly. When you're looking at charts.

Yeah. It does require a pause here because we're going to be on people on CNBC, people in the news, New York Times, us here. We're going to talk about these things in relation to, oh, making the stock price go up and, you know, turning these companies around, making them sustainable. There's pain and suffering. However, that pain and suffering is not comparable to the true pain and suffering in the world of people living in authoritarian regimes, people who are living in dictatorship. people who are oppressed. So you have to be able to maintain many thoughts in your head at the same time to contextualize this. And so anyway, I think it's going to be pleasant and just unpack that. So here we go. Okay, before we go to the People chart, if they execute my strategy, here's what I believe will happen.

Now, this chart, and you can watch all these, YouTube.com slash this weekend, or if you watch us on Spotify, or listen on Spotify, you can press a button or you turn your phone sideways or something and it shows the video. But these charts are great. We'll do a series of these charts at a tweetstorm on Twitter.com slash TWI startups. Black line, stock price. It's going to go up into the right. Green line, net income, it's going to go up and to the right. Those two things are correlated. If the market sees income profits go up, they're going to make the stock price go up.

How is that going to happen? The total number of employees, the red line is going to have to go down, I believe, to 2019 or 2020 levels. That will be what's taken seriously. Now, that's going to be super painful. We'll get to that in a moment, Molly. And then the diluted shares that are outstanding, perhaps those could go down a little bit with a buyback. So two things are going up, two things are going down. That equals the stock

going $5x, you know, going to $3 or $400 a share again. It could do that. Right now it's trading, I think, $7.8, 9x price to earnings ratio. It's been clobbered. And people were betting last week, this wouldn't happen. But this is the plan. I think it's the plan. Hey, Tom Eschbacher is here with us again. He's a senior sales manager at LinkedIn Marketing Solutions. And we're talking about their amazing report today in startup marketing as as well as how to use LinkedIn to grow your startup. What are some tactical things? Not big picture strategy.

I'm talking tactics that founders can do today to figure out product market thing. One of the big tactics we see here is amplifying organic posting with paid advertising. You consider a startup that raises a seed round. They post a news on their LinkedIn page and see a bunch of likes, clicks, and follows come in. They follow that then with some updates about product. And they see continued traction with, for instance, HR benefit managers at tech companies that have fewer than 500 employees.

That's a signal and it becomes important to then get a larger sample. And to increase confidence, we've made it super easy to identify which audiences are engaging with your organic content, your LinkedIn company page, your website, and then extend reach into those segments with our best in class B2B ad targeting. So for early stage startups who amplify organic with paid, we see a 13x lift lift in unique reach. And those are meaningful insights to help inform product and go to market strategies. Such a great strategy. Head to LinkedIn.com such this week in startups and get the report now. So you have an edge on your competitors. And as a little pot sweetener, $100 off your first

marketing campaign thanks to Tom and the team at LinkedIn. Go get that report and get the Hyundai. There was an interesting counterpoint from my favorite Twitter account, which is a parody account. Oh, Bucco Capital. Our favorite. Love Bucco Capital. Oh, look, he's got parody. lest anybody think that Artie Bucco is alive and tweeting.

No, obviously he's alive and tweeting. Spoiler alert, he didn't die in the Sopranos. If anybody thinks Artie Bucco got whacked, he's alive and well. He does not participate in social media. For obvious reasons. He's busy cooking. If you're on the line, you're making Man of God,

you're making the Vongalae. You can't be tweeting. Come on. This is like my favorite account, and I will rain hell if it is ever mess. So odd brand that Artie Bucco would start a hedge fund. It's amazing.

Tweeted a bit of a counterpoint to this. Not a complete counterpoint, but just an interesting like, if you're a Facebook employee, I think that the first point in this tweet was the one that I think is interesting because it's like you see Facebook meta trying to execute this big turnaround. And if you are an employee at Facebook, right, the blue, the original product, and you're frustrated with all the metaverse stuff, this is probably not going to help. There's going to be a real morale issue. And then he also makes the point in his third bullet point that it's going to be rough out

there once big tech normalizes big layoffs, which is kind of going on and on and on. It is a great time to be hiring. So to all of our founders out there, if you are trying to hire. You're going to benefit. But he also makes the point that tech companies are getting their finances buttoned up for 23 guidance. And that actually to what we just talked about, there have been people sort of celebrating these big layoffs as though, you know,

and I think it's really good that we're getting that out of the way, that although companies gave them entitlements, that doesn't mean they were entitled. There's still people losing jobs. And that even though, like, I have been known to out and out cheer for Zuck to fail, I don't want that to come at the expense of the people who work there because they don't serve that. Yeah.

And on the, yeah, great tweet. I shout out Artibucco. I have such a crush on that parody account. Pretty good. I can't wait to find out who it is. They're an insider. He understands the industry pretty well. On the morale issue, if you make one riff and you're, you know, it tends to go well

after about two weeks in my experience, because I've been involved in this so many times with my own companies and companies I've invested in. Because what happens is people see their friends, get jobs. and become happy. And that's a two, three, four week process. They also see them go on vacation for three to six months. If I'm being candid in the tech industry, people tend to get, you know, whatever,

two, three, four, five, six months, which is nowhere near what a bus driver or a chef or whatever gets. Like, you get a kick in the pants and you get like a week's salary, two weeks salary, if you're lucky. So we have this incredible, you know, graceful landings for very highly paid people. And they tend to take a nice, you know, respite.

and then they land on their feet. That's what I've seen traditionally. Now, maybe this recession will be different, but I suspect everybody starts landing on their feet. And maybe their comp isn't as good as their peak comp, but it's going to be within 80% or something, and they survive. Then what happens is the company they're at,

everybody goes, wait a second, things are going well. And that's what the Airbnb employees are Airbnb morale has never been higher. They are throwing off massive cash flow, right? We talked about this last week in the earnings. Just if you're an employee at Airbnb right now, the, what is it, four or five thousand employees and not that two or three thousand that got laid off. Remember that super riff? Actually, you remember perfectly well because you were impacted by it.

Yeah. The people who stayed are stoked. Their stock price is surged. And the people who left, I'm going to guess all did pretty well. You know, if you want to hire an employee and Airbnb employees, pretty covet in this town. Absolutely. I mean, there's no, it's an aidless thing to have on your resume. And so it ultimately works out.

And even for the people who left, who were vested. their stock price went up. So, yes, I mean, I think being part of this industry and leaving, having this happen, like, you know, just like you said, there are a lot of things happening all the same time, a lot of truths happening simultaneously. It is tough to lose your job abruptly in most of these cases. These people are going to be fine, but the short term pain is real. I mean, if you look at this chart. Is this the people one? Yeah, and I hate to be a downer here.

Oh, wow. Yeah. But if we were just to go back three years to the number of employees meta had, right? And then we drew some black lines here on the alphabet and meta. Just to give you an idea. In 2019, you know, they had probably 40,000 or so employees there. And they're now at 87. That was like like almost 60% rift to get to where they were in 2019. To get to where they were in 2020, it'd be similar, like a 50% riff. Then to get to where they were, but in 2021. you know, you're talking about letting go of 27,000 people, a third of your staff. That's insane. I'm going to put their riff at 10%. Where did all this hiring go? I mean, so 10% is still 8,700-ish employees.

I mean, if they let go of 8700 employees, let it sink in how many people that is. Now, in terms of the overall economy, not a lot. In terms of just a number of humans. Yeah. Just to process that many people being laid off is going to take months. I mean, holy cow. So I think maybe this might be a significant number, but a smaller percentage. Yeah.

Maybe between, I don't think he's going to do 10. I think he's going to do 5 to 7. I mean, yeah, we have no idea to be clear that Wall Street Journal didn't give a number. It did say that they thought it would be many thousands of people. But that could be 5%. I mean. I think it's 4,000 people, which would be 5%. I'm going to put it out 5%.

So it will feel like a large number of people than it is. It would be more people than all the companies combined last week. The open door, Twitter, all that combined will be less than the Meta Rift this week. Well, not at 4,000, but yeah. Or close, right. So if it's 5,000, it would be the same. Like, meta alone could do roughly the same or similar as every other company did last week. Yeah, maybe 5,000 people would be the same.

Yeah. So I think there were 5,000 people laid off at those five companies last week. But open door, lift, Twitter, et cetera. So anyway, for this to have an impact, it's got to. it be 5% and for it to have a dramatic impact would be 10.

So somewhere between 5 and 10% would be in some way hit the bottom line which is I think what his goal is if it's less than 5%

if it's less than 5,000 employees this is a token and I made a bad jade to be a complete free market monster. Yeah.

If it's over 5,000 people I made a killer jay trade because he's taking expense seriously. Yeah. And this is where

I have a really hard time with public market investing because I'm literally betting. The more people he cuts, the better it would be for my J-trade. If he cuts- I know. 20,000 people. Welcome to what is so terrible about public market investing, right? Is it good news is always bad news or bad news is always good news.

And it's just like, I know totally. I'm excited about my three-month CDs at 4.5%. Brian Chesky is shaping up to being one of the great CEOs of our time, I believe. He's paying attention. He's listening to our show. I think he might be listening to me specifically. He even said, he even talked about stripping the beds in one of his tweets. I was like, oh my God, that's me.

That's you. All right, let's break it down. Let's break it down all the right moves. Exactly. All the right moves, Chesky. Like, he really is, honestly, exactly what we talked about on Friday. So as a follow up to earnings, Chesky revealed that Airbnb was working on the transparency around pricing to roll all of the fees in to. And to be fair, he had already tweeted that they were working on this.

but he has now rolled it out. Now, when you search on Airbnb, we were talking last week about these hidden fees that people are annoyed about. And here's a video that Chesky tweeted early on Monday morning today, as we're taping, he said basically what you're seeing here is that cleaning fees will become more apparent earlier on.

So when you're searching for accommodations right now, you only see nightly rates and no other fees. And those fees could be cleaning. It could be tax. It's whatever it is. Now, You will have to hit a toggle switch to see the breakdown, the total cost with nightly rates and fees, so that you can more accurately search for locations in your price ranges.

You basically won't get this price surprise where you look at something and it's, you know, 300 bucks a night, you think. And then once all the fees are in, you know, and you can see that there might be taxes, there might be cleaning. Yes. You'll just see the total price breakdown. Part one, which is great. Of this story. is fees, is just concisely

being transparent about the fees. Brilliant. And he did it exactly how we were talking about, just a toggle switch and what's the default. And I'm assuming the default is to not have it turned on and then you turn it on, but it's so prominently display for people not watching.

It literally has a toggle switch at the top, as if your settings were open. It's literally at the top, and it says display, total price. Bulletproof. It doesn't matter if it's defaulted on or off. in my mind since it's so prominent. Yeah, totally. What you would look at,

and this is why you listen to this week in Startup, Smiling, is the detail here is what is the default? In other words, what does it start as on or off? That tells you a lot. Is it defaulted on or off? It looks like it's defaulted off, and then you have to turn it on. Okay, fine, fair enough.

That's a product decision. Yeah. And now here's like an even more subtle one. When you turn it on, does it stay on for your next search or not? These are nuanced product discussions that really impact revenue and consumer behavior. Is the default on or is the default off?

And does it remember your setting from the last usage? So just keep that in mind when you're designing a product. And think about how careful Airbnb and Chesky, you know, and everybody has always said about Brian Chesky and Airbnb that fundamentally that although it was a real innovation in terms of business model, that it was as much like Uber, design first. And so that the reason, reason, you know, that Airbnb has talked about as far back as May of 2021, Airbnb has talked about

addressing the concern about the fees and said, we're going to work on it. According to the Wall Street Journal, the reason it took so long was because they wanted to design it perfectly. They wanted to make it as seamless and appealing and useful as possible without creating more off-putting kind of distortion. Friction. Thank you. That's the word. That's exactly the word. Yeah. So, you know, this is, I mean, it's interesting, right? Like going from being a journalist to being inside the industry, like all of a sudden you, it's like the matrix. Like when I was a journalist, I like had this amount of like knowledge of what's going on.

And then you're behind the scenes and you start having the real discussions. Okay, what is the default setting? Okay, does it remember your default setting? Okay, what's the friction here? Why are we doing it? And in product design, what you see is, you know, a product like Uber, this exact same thing happened with tipping. and I had very passionate discussions with Travis about this back in the day. I'm not speaking out of school.

We both have talked about it publicly during interviews we've done. I'm from Brooklyn. I tip everybody. I tip people who don't expect the tip. Remember I told you the story of the time I tried to tip a flight attendant? Yeah. Back in the 80s, we called them stewardesses. So back in like 84, like...

We don't have to go back. I was like a 15-year-old. I thought I was in Goodfellas. And I was like, hey, sweetie, this is for you. I gave the flight attendant $3 for a Coca-Cola. And she literally took it and dropped it in my lap and said, we don't get, we don't take tips. You're like, okay. And I was like, oh, what do you mean you don't take a tip?

I tip the Hertz guy. Artie Bucco. Artie Bucco, I tipped the Hertz guy who brought my car around. He was like, why are you tipping me? Oh, my Lord. I mean, I tip the security guard when I, you know, when I went to. I do remember that. I do remember that, actually, with Uber and trying to figure out how to integrate tipping in a way that wouldn't feel invasive.

Like, it wouldn't stress you out, but it would let you make it easier. And then the drivers, you'd know where it was going. Like, all of this is, all of these are fundamentally designed questions. So then the other thing, other changes. So there's this big design change to make the fees more obvious slash invisible. The default is off. I'm reading here, by the way. Invisible in the right way, though.

I think it's interesting that the default is off. But I guess maybe it's like, then you can really see the breakdown a little bit better. I don't know. Sounds to me like a discussion that occurred and there was a little bit of a split discussion internally. I would love to know. And they said, let's start by exposing it and let people turn it on. Yeah. So this feels to be like a bunch of respected people had a difference of opinion.

And they said, let's start with the test with it off. Yeah. And see how many people turn it on. So we get data. Which is not a bad decision, by the way. It's a considered decision. Let's turn it off and let's see if it will turn it on. It's a fine decision.

Yeah, it's interesting. Like, it's sort of a jobsian question, right? Like, do you, are you the kind of company who collects the data and does a little bit of a real-time A-B test and takes the flack? Or do you just say, this is what you want as a customer? I'm just going to make that call. And they could have gone either way and I don't hate it. Yeah. That's another perennial.

This is why you listen to this week and startup. From the inside, I can tell you, that's another perennial management decision. Do great products get made by God, kings and queens who give the edict. Okay, we're having a difference of opinion here. Congratulations, everybody, on the debate. This was a vibrant debate. As the CEO, I'm going with default off,

where I'm going with default on. And that's where we're going. I appreciate the dissenters, the dissenting opinion, but I'm just going to pick this one. And if I'm wrong, I will own it. Right. So if I'm taking out the headphone jack and our sales plummet,

or I don't want buttons all over this. And I don't want, remember the Blackberry had tons of buttons? You remember, like, the smartphones had 18 buttons? He's like, let's have one button at the bottom, Steve Jobs. And they're like, are you crazy? And he's like, well, the buttons could be on the screen. It's the right decision. I mean, does anybody want an iPhone with four buttons on the bottom?

No, it's great. You want dynamic buttons. You don't want to have to remember what the little circle arrow back button means. Like, come on. Have you ever been to that Fifth Avenue store in New York where there are no buttons in the elevator? There are no buttons in the elevator. I've been to a lot of those.

Yeah, with a person asking what floor you're going to. And yeah. I do not like that. Anyway. Hmm. Okay. And in addition to and so in addition to this choice. So the toggle is off by default, fine.

But Chesky also announced that they'll be prioritizing searches by total price. Hmm. So that you're certain the highest quality homes with the best total prices, whether you have that toggle off or all. on, exactly, we'll rank higher at search results. So they're prioritizing value. And then regardless, and I think this is such a clever mix and match. So you have the toggle off by default, but the algorithm is going to prioritize the best total price, which I think is genius.

And he's saying, you know, we started as an affordable alternative to hotels. That's totally true. And affordability is especially important today, wants to help hosts who offer the best. So in a way, and I don't, he's not trying to out the hosts here, but it's, it's an incentive. The fact that the fee structure is very, very obvious. Yes. Because I think the hosts get to decide the cleaning fee. Yep, they do.

Is a very clever threading of the pressure needle here. He just took the buttons out, Molly. He took the buttons out. He did it. He pulled the jobs. Brian, all the right moves, Chesky. That's his new nickname. When you see him, there's Airbnb employees listening, I want you to come up to him.

Just give him a little pound on the chest. Give him like, you know, a little fist bump. And I just want you to call him all the right moves. He's doing all the right moves. He understands his customers. He understands his shareholders. He understands his team. And I was going to ask this question.

Is Airbnb about value or experience? And what Brian is saying, people come to us for value. We know that. We're not pretending we're the Amman Hotel. We know you want to save a little bit of money. We know that matters to you. That's part of your decision-making process. You want bang for your buck, right?

And that's what I think of. When I rent an Airbnb, I think, okay, I'm going here and I would have to buy four hotel rooms. When I travel, it's four hotel rooms. The parents, the kids, probably two rooms now with three kids, and the nannies, if I'm with a nanny, or if I'm bringing my parents or whatever. It's typically three, four rooms, right? And I'm like, okay, three or four rooms, four or five hundred bucks a night. I'm in for two, three grand a night because there's so much taxes in hotels. And then I think Airbnb, it's typically like 1,500 a night or 1,000 a night.

I get five or six bedrooms. I can invite an extra person and they have a game room for the kids and they got a kitchen. And now I can cook food, which we like. So much better when you have a family. You don't have to have a kid in a hotel room alone. Like, you don't have to be freaked out about all of that. Adjoining rooms, nonsense. So it is, it's a better value for families.

And it's just, it's great. But what I really like about this, the more I think about the toggle being off, comparing with the search results prioritizing total price, he's preventing the pharmacy benefit manager problem. What's that? The middleman that sits in the middle of drug pricing. So like if they had just turned this toggle on by default and all you ever saw was the total price, you wouldn't know the difference between the hosts who are charging an absorbent cleaning fee and the ones who aren't.

That's the game. That's the game. It's to say you customer get to see this and you don't get to be sure. shocked by the fee, but you host, you don't get to just charge a bunch and hide it. And it's they play games with that fee too. They play games with the fee too, from what I understand. I'm not like, I use Airbnb, like maybe twice, once or twice a year. And I think a lot of those hosts play games with that fee. They're like, oh, if you do all these things on the list, which is super annoying, like I didn't come here to clean your house.

Came here to have a vacation. You ever have this experience? the last day of your Airbnb, and you're like, oh, you know, the last time I have vacation when I'm exhausted and I got to go home and face reality. I got to spend two hours making sure, like, the sheets are off the bed. Totally. I got out. The garage door has to be locked with the code. And I'm just like, I feel like I'm launching a rocket with the list of things I've got to do. I just gave you money so I don't have to do these things. That's what I said last week. Because I was like, I stayed at this Airbnb and I had to strip the bed and we had to take the trash out to the outside trash cans, do all of this cleaning. And I was like, okay, come on. I just want to be in a hotel.

And then I saw this tweet from Brian Chesky that was like, you shouldn't have to do unreasonable checkout tasks such as stripping the beds, doing the lot. And I was like, oh, he's listening to the pod. Hey, Brian, what's up? What's up, buddy? All the right moves. All the right. Come on the show. No, he did.

He's going to come on. I just talked to. Excellent. Vacuuming. What? Do the laundry and the vacuuming? Apparently that's up. That's bonkers.

Oh, can you put the sheets in the washer for me? I've stayed at places where they asked. that you'd put the sheets in the washer. Oh, so they come in and just have to the dryer. I understand. I understand the goal of the host in doing that stuff. It's just not cool. And then they charge you an extra like 100 or 200 bucks if you don't do it, right?

That's the, that's the threat. I guess. Nobody wants this nonsense. Or they leave you a bad review or whatever, right? It's just like, no, it's too much. Oh, yeah, right. They review you too. I love the idea that they sort by value.

I love that. Sort by value. So if you want to play games, you want to, you want to effort. around and then you find out. You want to F around with your cleaning bill, your cleaning fee, then you find out. Your search results. Yeah. If I do an Airbnb, I'm going to have a new thing. No cleaning fee. No cleaning fee, unless you stay in something or whatever. But just. Well, I was going to say, like, if you want to be a host who, if you know this up front, and again, this is just all about transparency and design and not letting hosts hide stuff

and not letting, you know, guests take advantage. So you could be the kind of Airbnb that says, hey, there will be no cleaning fee whatsoever if you strip the beds and you put the wash in the washer. Cool. Some people might be willing to do that. They just might, you know, like I get a little bit of my grandma vibe and I want to clean up a place. Like, if that's what you're into and as a result, you have no extra fee, that is, then all of a sudden you have some pricing control as a host.

You have a differentiation opportunity. You know, I do that too. When I leave a hotel room, I tidy up. I totally do. And I leave a tip. And I leave a huge tip. And I still clean up. But I still clean up a little bit because I don't want to be, it's more like my own

personal pride of not being a slob. Exactly. Maybe it's my Irish upbringing, but I'm like, oh my God, I left. Like if I leave the coffee set up, a mess, I'm like, oh no. Literally, if it's like stained, I go get a towel and moisted and I just wipe the thing down because I don't want to leave a coffee stain and be an animal. So even though I complained about stripping, stripping the beds was for some reason, that was a bridge too far for me.

that really irritated me. I was just like, that is not because it's just like it was combined with 50 million other rules and whatever. But the truth is, I would nine times out of 10 book an Airbnb that didn't charge me a cleaning fee if I agreed to do that because then it would be a trade and I'd be like, yeah, fine, cool. I save some money. But considering that I paid a cleaning fee and was asked to strip the beds, I lost my mind. Full Karen. I asked on the Twitter, what's the best rug? Now, why did I ask this question? I don't want to get to my personal life here. But my spouse, who you know, is delightful, beautiful, stunning, has incredible sense of design. Charming. Encirming. All the things I'm not. That's why the marriage

works. She really is wonderful. You know, like, that couple where they invite the couple, and they're like, she's so great. I guess the price we pay is that guy. Oh, come on. But we'll still invite him. What I married her, I started getting the second. and invites to dinner parties. Before that, I was one and done. Like, wait a minute. It's like, wait a second. Huh.

She takes the edge off. But anyway, part of the problem is, you know, we have the two dogs, three children, and the rugs get destroyed. This makes me go manic. And I did a tweet. One of the producers can go find it by doing an advance search on the Twitter where I was talking about this. And I, oh my God, look at my producers.

It's already there. Like, come on. Look at my producers. So proud of my producer. Didn't already have that ready. So I said this. Anyone have a lead? By the way, this is dated September 16th.

I just got a light. And I'm getting a quote retreat, L.O.L. Well done. That's a first for the show. Wow. Producers are on. Did we get any adderol prescriptions for our producers? They're on today.

Wow, strong Monday. So I put this out there because I'm losing my mind. I grew up poor. We didn't have, we had like one rug. And like, we didn't get rugs because these things get destroyed. And it will make you as a cheap person like I am who has cheap DNA. lose your mind. Like, I love my kids.

I love my dogs. But when they stain the rugs and I have to go into dad mode and I'm like, bad dogs or like, daughters, I told you no ice cream while we're watching superhero movies. And they're like, but I love ice cream.

We're like watching superhero movies with you. Why can't we have both things? And I'm like, I find out both things. But they ruin these goddamn rugs, Molly. Me and everybody on Twitter was like, e-sailrugs.com, the end. There's only one place. No, and scroll down.

everybody said to me Oh, that's right, rugable Rugable. Everybody said rugable. And so what Rugable is actually, but now I'm all about e-sale. But anyway, rugable. Anyway, rugable went crazy. Now here's the thing.

Rugable, you have one? Yeah, I'm too. Okay. It comes with a little base level mat and you velcro it onto this mat. And the reason that that's important is because you can unvelcro it and you can put that sucker in the washing machine.

Washing machine. Molly, I pay five, six hundred bucks. for, I got a big house. I got five or six of these rugs. Five rugs. These guys come, they lift all the furniture, they take the rugs. We do this every year. Bless you, that's 500 and 600. That's

five or 600 bucks per rug. Per rug. Yeah, because I've done that. They come back perfect. They come back perfect. God love them. They do a great job. It's three grand every time I do this. And I just watched $3,000 in my mind on fire. Sorry. God damn it. On fire.

And I kid you not. this is the level of privilege I'm living under now. These things get stained two weeks later. The dog takes a leak. A dog pukes on it. A kid drops an ice cream. And now I'm back in OCD land. I just paid three grand.

And I told my wife, let's do this. She's like, I don't like those rugs. Why don't you just buy a Bissell? I'm no. I have, now you, you try to trigger me? This is my trauma. You can rent Abyssal at the grocery store. I have Abyssal.

It doesn't work. Oh. None of it works. Whatever they do on the commercial with the Bissell, it doesn't work. Or maybe they got the wrong Bissile.com slash twist. Get 20% off your next Bissle. If the Bissle worked, I'd do an ad read for it, but this doesn't work for me. Are we or are we not freaking parents up in here right now?

I'm literally turning into my mom. And then my rug does this and then I need a Bissell. You just got to rent a Bissle. I'm so passionate about rugs. In the Monclair. Okay. Okay. So now let's explain what's happening. Yes.

Okay. The reason that we're talking about rugs for so long is one, it's fun as hell. And two, the Peloton co-founder and former CEO John Foley is back. Love it. With a D-to-C company. Love it. Because why not? And in this case, it's a rug business.

D-to-C custom rug retailer, hoping to enter the market, quote, in between home decor retailers and high-end custom rug sellers. Yes, go. Ernessa, I don't know what that means in terms of pricing. Oh, $8 to $40 per square foot. So definitely not the rug bowl. 10 by 10. crowd is a hundred a hundred a hundred times eight is 800 so for a large rug you got a large living

room or a hundred times 40 four thousand oh yeah so this is this is a this is mid to high end but they're custom now hold on a second custom is different they're cutting it to your specs i like this we had a company called bench made modern uh that i really believed in a great founder um and they it wound i think we got our money back it was like one of these sales where i was like ah I almost wish it was a zero instead of getting my money back. I would have wished they got me either 100 or whatever. But they did couches by the inch. You could literally, they would send you a draft, a piece of paper that you would unroll

and you would unfurl it, put it on your floor. And it would say 48 inches, 49 inches, 50 inches, 51 inches. You tape it to your floor, Molly. And then you go sit on the floor in front of your TV. And you're like, you know what? I was going to buy a 48 inch. I could fit a 52 in it. You put your side tables on the piece of paper next to it.

Bench made modern. You can look at the video. You can look them up. That's pretty cool. That's pretty cool. I think they still exist, by the way. I just, yeah. I mean, I think it's not unusual.

I bought 50-year-old handmade Turkish carpets in Assemble. And I paid, you know, 3,000 each, I think, or something like that. How much each? Like 6,000 total? Yeah. I mean, huge. A good rug. They're 7 by 9, they're 50-year-old, their handmade Turkish carpets.

Like, it's a whole, people, you will spend money on rugs that you plan to. And you'll be able to resell them probably for half of what you bought it for. or a third of what you bought it for, maybe? Yeah, maybe the same, depending on what the market's doing. But I will say, this is not a rugable. You're not going to bistle this. You're going to have to send this half for cleaning. However, it looks like Foley learned his lesson on D2C.

We should note before we have to wrap here. He was quoted as saying, I want to show discipline. I want to show profitability. Oh, good. And I want to have a real focus on unit economics. I love it. Ernesto will not attempt to vertically integrate its supply chain. Yeah.

Will we say this? You want to bet on a founder after they get their ass kicked? I just made that bet on Zuck. Yeah. I was about to say I hate Zuck. I got to speak from my heart, not my mind. I wish only the best for Zuck in his evolution. My mind, not my heart, my mind hates what he's done.

But with my heart, I wish Zuck a great evolution and Palmer Lucky. Why? Why did I do that? Why did I do that? I can't stop talking about me. Every interview, they're like, what about Jason Gallagatis? And he's like, oh, Jay Cal, it never ends. It never ends.

But anyway, I wish him the best. I would like him to come on the program. I'm a huge fan of Peloton. I love it. I hope that John Foley, this is my hope. I hope John Foley makes this a freaking huge success. And then goes to a private equity firm and says, look, I'm selling rugs. I'm a rug salesman.

I'm a rug salesman now. I've learned my lesson. I'm doing my penance. I'm selling rugs. Amazing. And I have learned like the rug salesman for thousands of years to do this profitably. I'm a new man. You can trust me.

Give me $4 billion and I want to buy the Peloton asset back. And I want to make my money. my own umbrella company of DDC brands. And I'm going to buy Quip and Casper and a couple of other ones. Oh, let it be. I went to Morocco and I worked in the bazaar

and I haggled and I focused on union economics. He learned those skills, right? He's like a... Yeah? You know like in the bazaar? Yeah. He went to the mountaintop.

That's him. He went on his pilgrimage. I love this. Let it be. I want this to happen. Let it be. I wish John Foley an epic return. I hope he dunks on all his naysayers,

and I hope he comes back and buys Peloton. Oh my God, that would be beautiful. Sweet, sweet revenge. Make this thing a money printing machine, save up all those profits, John, and then go by Peloton. The return of the king. I love it.

I'm here for it. I'm here for it. It's a redemption show is what we have on Monday. All right, everybody, thank you. I was just kidding. I'm so glad you burst into song that I didn't have to. I know, totally.

I was like, such a great song. Man, when I brought up Bar Marley, man, I put that legend album on. For me, that's it. We got a huge week coming up. Next to Unicorns is back on Wednesday. We have our crypto roundtable on Thursday.

We're going to talk about this whole FTT, FT, FTX, Alameda Research, Binance, selling out of all its coins, and who's propping up who and whatnot. It's going to be amazing, and we need those two to help us understand it. And then, of course, we'll have more Lon Harris and OK Boomer on Friday. Lon Harrison. And Rachel reporting are just bringing the heat every week. Really like great,

it's a great Friday combo too. Great supporting cast here. Great supporting cast. I wonder if Rachel's going to find an interesting product and break in one day. Rachel reporting. Oh yeah, totally. You know, I'm not, this okay boomer. She's locked for Fridays.

But, you know, I'm hoping maybe Tuesday, Wednesday, Thursday, she breaks in. Let's go. That's a great interesting product. Maybe she did the last week. She did that cool mood boards. Freaking awesome. Yeah, she's good. Also, if you're not caught.

I know, I know you got like a side hustle or a side quest. The kids call it a side quest. I know you're on a side quest, but you have to watch the peripheral. I watched one, and I just watched the last two episodes of Andor without my wife. Yeah. And they were so freaking good that this is the slow burn of all slow burns. There have been no lightsabers or blasters in this. And it is the most heightened, tense, just incredible storytelling in the Star Wars universe outside of like, you know, two or three of the best.

films. It is incredible. Andor is a revelation. The money they spent on this, the actors in it, the guy who played Gallum, I forgot the guy's name, that guy. They pigeonholed Andy Circus. Circus. Circus. Circus. S-I-I-S. This guy, Andy Circus, deserves an Emmy for this performance. he is an extraordinary actor and they pigeon told him as like the monster like Ghalam he always plays a CGI character this guy's a thespian he can act

I want to see him in more films I love him in that you know he's in the Ironman once he's in the Marvel the Avengers one once he's like he's the he's the like kind of South African guy who's like you can't scare me because you're not a cuddled fish oh Anyway, okay, so that's all coming up. I will get caught up on Andor.

You should get caught up on the peripheral. It's going to be a great week. Stick with us. See you tomorrow. Bye, bye, bye, bye.