This Week in Startups - "Minions" record-breaking viral strategy, TikTok algo, reframing semiconductors & energy | E1500

Episode Date: July 6, 2022

On today's show, Molly and Jason catch up after the long weekend (0:00) before breaking down how the new "Minions" movie broke a box office record by using TikTok, catchy hooks, and viral marketing (5:19). They also cover TikTok dropping plans to expand its ecommerce platform into the US and Europe (29:52), before covering the "Chips Act" stalemate and discussing how we should reframe semiconductor manufacturing and energy independence as national defense issues (35:50). Links referenced in the show: https://www.frontiersin.org/articles/10.3389/fnhum.2021.578644/full https://www.bloomberg.com/opinion/articles/2022-07-04/chipmakers-and-us-congress-are-playing-a-stupid-game-of-chicken

Hey, everybody, welcome back from the long weekend. Have a couple of espresso. I know it's going to be a long Tuesday, but it's also going to be a big week on this weekend startup's great conversation today. And we're also going to talk today about the minions trend where everybody seems to be going from TikTok to go see the movie Minions and suits. Really interesting. We'll talk about TikTok, how it's sort of changing marketing and all that.

And we go on a little diversion to talk about hooks in songs, which seems to be a key part of what's happening on TikTok. And I went down the rabbit hole. It's called Harmonic Surprise. We can talk about that on today's show. He's just a music fan, people. He's just a music fan. But it turns out we are being manipulated in many different ways, including the music.

Also, on the TikTok hook, no pun intended, we're talking about its changing plans for its e-commerce business and why the West maybe isn't ready for live streaming QBC. We're also going to talk about the Chips Act and energy independence and just maybe some reframing of the big issues that America is dealing with. I have some thoughts and feelings on it. and Molly and I chop it up at the end of the show. Finding consensus. It's going to be a great show. Stick with us. This week in Startups is brought to you by,

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purchase of a website or domain. And Masterclass, learn from the world's best minds, anytime, anywhere, and at your own pace. Get 15% off an annual membership to Masterclass at masterclass.com slash startups. All right. Hey, everybody. Welcome. It's Tuesday. I hope you had a great July 4th. How was your weekend, Molly? It was good. It was actually a great weekend. We reunited with like old school friends that my son's been and then just ended up having the whole weekend together. Oh, fantastic. Yes. I'm up in Tahoe for summer. It looked beautiful. Were you on a float? I was literally on a float. How do you do this? Yeah, so I'm just like, somebody added me to a thread of like, you know, tech people in Tahoe.

Yeah. It's like a dozen people. I was like, for God's sake, he's already the king of Tahoe. it's been a year. No, no, no, six months. Anyway, so somebody is like, who's going to the parade? I'm like, yeah, tell me about the parade. They're like, yeah, 10 to 12, you know, goes down Main Street. They've been doing it for 100 years. It's like classic July 4th parade.

I was like, oh, my God, I totally want to go to that. I asked my daughters, hey, you want to go to the parade? They're like, what's a parade? You know, like, this is like a new concept. And they know what a parade is, but they were like, I don't know. They've never been to one. So we went to this like Main Street parade, but my friend was like, we have a float. Do you, do you and your, you and your,

daughters want to ride on the float. And it was quite cute float. It was like rolling down the river float. So everybody was wearing like, you know, you know, tubes that you go down the river with. Oh, really? Yeah. And it was water themed. And then it's, God, delightful. You go down Main Street. Everybody's got American flags and you're just like, this is America and you're throwing candy. It was delightful. It was a delightful weekend. So that's wonderful. Happy July 4th, everybody. And still the greatest country in the world, despite all the problems. we are talking about, especially on a Monday or Tuesday when all the news was built up, but it didn't seem like as crazy as a news weekend as we've had.

People shut it down, I think, other than some horrific events at Fourth of July events, which sucked. But I think for the most part, the news, I mean, you know, it's like, how awful do you have to be to target exactly what you were talking about, which is those wonderful celebrations? For years and years and years, I would go to Red Lodge with my family, actually. my aunt and uncle have a cabin there and we would always go to the like the red lodge fourth of July parade is just the greatest it's just exactly that like it's so small and then there's like horses and anyway that yes the news i mean i i'm literally at that parade and then later that night

i found out about the tragic shooting uh and yeah i did not meet a bus kill us that was like a total like well no it is a but we should mention it so that it doesn't seem like we don't know because Jesus Christ yeah and uh you know it just it keeps happening and we're We're making modest changes to the laws around guns, but it feels like this is... I feel grateful for my family and my lovely fourth. Like, that's all I took away from that. It's just like, I feel grateful. We had a great time.

Yeah. And I don't know what else to say. Yeah, it just keeps happening. And we seem like we're not able to do anything. Hopefully, this continuation of this tragic story with, it seems like a specific type of person does this every time. And there seems to always be, you know, with its early report, so I don't want to jump to any

conclusions. But once again, another person who had every signal out there. Every signal. Every signal is like blaring and nobody says anything. Or if they do say anything, nothing happens. You can't take guns away from people who are obviously mentally, yada, yada, yada. So,

hard turn, but let's get into something joyful and fun. A little culture here. I noticed, you know, this movie Minions came out, The Rise of Gru. And I've seen these Minion movies. The Minions were a character in some other movie. And so I'm peripherally aware of it. But it seems to have trended.

And the July 4th weekend record by the horrible 2011 Transformers Dark Side of the Moon, the worst franchise in the history of movies. Actually, I'm going to give you that one. I think that's accurate. It really is like so horrible. And this seems to have broken the record. So it's teed up for us here a moment. My son, like all the other teenagers in America,

went to see this new Minions movie this weekend. And my son, like many teenagers around the world, made me take him to Target on Friday night before a holiday weekend so he could get a suit to wear to the Minions movie. Because for whatever reason among the kids set, like for me and people my age and a lot of Americans, Top Gun 2 coming out was the must see event of the summer. But for everybody under 25,

this new Minions movie is like an event. And they- I don't understand why, but okay. I don't understand why. I mean, those Minions movies are popular and they're like a ride at Disneyland, I think, and whatever. But they are so excited to go to this thing that they're going out and buying suits.

And there became this like huge, meme, the music is really hip, like there are all of these things around it, but kids are dressing up in suits and going to see it, and it is just a whole entire thing. Right. That seems to have really found life on TikTok with these twin themes, I think, right? The suits and also the themes up. Okay. And to just put a number to this, 125.1 million during open weekend, so it's smashed by

10 million, you know, almost 8% or something. the previous record, again, by the horrible Transformer's Dark Side of the Moon, unwatchable films. So this, I think, would not have happened if it was. I do. I'm very, very annoyed by those movies. It's just to spend all that money and achieve so little to me is just. It's just offensive.

It's offensive. It's amazing. It really is, too. And to just do it over and over again, it's almost like they're taunting us. They're like, this film's still going to make money. people are still going to go see it and we're going to spend even more money making and marketing of it

and it's just even worse than the last one. It's like every incremental iPhone drop. Anyway, I did not mean to derail you. It was just amazing. The level of like, vitriol for the Transformers movies. To be honest, I'm displacing the other challenges in my life on Transformers.

Apologies to the cast and crew of that disaster. Just do, Mill, you're great. Anyway. But anyway, this set a massive record and I think it seems to have been driven. Like this record would not have been hit if it wasn't for the TikTok trending.

So this story has many layers. But they do a lot of marketing around minions. So they were doing all this crossover advertising. But there seems to have been two things that have set this out. And it really is worth studying because the first thing is Mr. Beast decided to do this. Now, I don't know if he was the first person to dress in a suit and go. But Mr. Beast has a massive following. and he really is driving culture.

When he does something, I mean, the fact that I met Jimmy a couple of times and I'm friendly with him and I told my daughters, I know him, especially my six-year-olds, they just can't believe it, you know, you know Mr. Beast? And he's really driving a lot of commerce with the, now he's got a chocolate bar, beastables or something, or feastables, I'm not sure what it's called, but supposedly these things are doing really well. And venture capitalists are now, to bring it back to this week and startups, Molly, venture capitalists are now looking at influencers and saying, hey, how do you build a business

around this person? And I think that Beestables, is it Feastables or Beestables? Beestables. He has Mr. Beest burgers and then he has Feastables, Affleck Frank. Yeah, I think the burger thing didn't do as well, but that was like his first warm up to it. But there's a venture capital studio that kind of came up with Beastables, put money into it. I think actually Alexis O'Hanian is the investor behind it. And so, like, this is an offshoot of the Mr. Bees brand. So he can basically make a chocolate, you know, a candy company out of this. And apparently he had a big impact on this, buying out the bid.

Everybody goes in suits. I don't, why are they all wearing suits to this? Is it a shine of respect? No, it's because we'll grew the character is always wearing a suit. Got it. And I think it actually started. I mean, what Mr. Beast, I think, is amazing at is spotting a trend and amplifying it. So this somehow had started, I think, in Australia.

and, you know, kids were already posting pictures of themselves and TikToks of, you know, people pulling up to the theater in these suits with, in particular, this Yeet song. Got it. As the sound. And then that video, the original, you know, this like Australian kid who posted a video of these 20-plus guys pulling up to a theater in full suits, according to this Twitter thread that digs into kind of the multi-layered success of all this, the creator posted this video, the Yeatsong was the sound,

that video got 35 million views, who highlights reposted it to their page, that was it. Like, then it was off. And then, at some point then Mr. Beast comes in, and then it's just like, and we have Supernova. So the rich minion sound has been used 136,000 times.

So that means people who are making a TikTok chose to use that as their soundtrack in just a very short period of time. There's been 8 billion views to the minions hashtag, which is crazy. And Mr. Bees renting out an entire theater to watch minions, got six million views. And a lot of this also happened on YouTube and generated 15,000 comments. So here is the, you can listen to the hook of that song.

Okay, so it's the minions rapping with somebody. I count money. And it does money involved in it. So it just sounds like every other generic hip-hop song from the last 10 years. I count money, whatever, except the Minions. are counting money too. People love those freaking minions. I mean, this is just like, I mean, there is something, I don't want to get you started on

TikTok, but there is something special about TikTok specifically. Like, things don't spread like this on YouTube. You know, they spread. There's virality, obviously. But there is something about these layers of marketing. And it seems like the minions team or whoever was the Sony, I can't even remember what studio it is, took advantage of this. It's two things.

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we took our 100 point founder checklist, which we made for the podcast, and we made for our founders. You know what? We said, why don't we share this with everybody? This is like a book for free on Notion, and you can take it, copy it to your Notion. You can write notes on it, and that's the magic of Notion. They have great templates. It puts everybody on the same platform, and it just accelerates your efficiency. When new people join your company, they go to Notion, and they see all the projects going on,

and they quickly get up to speed. It's changed everything. So here is your call to action. Go to Notion.S.O and get addicted like the rest of us. Use the promo code twist. You're going to get $250 off their annual plan. Notion.S.O. And use the promo code twist during checkout for $250 off. Thanks to the Notion team for making a great product that we love and enjoying every day. There's two things unique to as a product feature. So there are two product features that are driving us and why TikTok is so successful at this kind of virality. Number one is they pick your feed for you. So on YouTube, you subscribe to content and they suggest. stuff to you, certainly in the sidebar or on your homepage, but they're not saying, hey, here are all the most popular things. Show it to you first, right?

So it's not like the algorithm and your default, right? We always say defaults matter in product design. So the default being, we're going to curate what you see means that TikTok's algorithm can specifically say, you know what, Minions is taking over, everybody has to experience minions. Right. They've got this for you page that's literally, again, I'm scared to say it, but it's cultural program.

It's like this is a hot new thing. It's programming you. 100%. But the thing is like Twitter has trends, YouTube has hot videos. Like they all have the Explorer tab, yes. Some kind of page like this, but TikTok just is really good at it. Well, no, it's that they default to it. And probably also they're good at it. Oh, they do.

Mine doesn't. Yeah, you're defaulted to your For You. Your feed is. Oh, yeah, yeah. That's true. I am, yes. Yeah. So it's confusing because you would think 4U would be your subscriptions, right?

Right. So there's like the two tabs. But it turns out. is for you is like, this is what we think. We prepared this for you. So imagine if when you opened up Twitter, it took you to the trending topics tab, not who you follow, just a trending topics.

Imagine on YouTube if you went to the Explore tab and they just showed you the top trending videos. And then the second piece of this puzzle is, you know, those sound clips that you can make a video to. You're but one click to create the sound, right? I think it's one click, maybe two, to create a video with that sound in the background. What this does is,

it's sort of like the quote retweet button, but much more powerful. And so, you know how quote retweets on Twitter are getting super popular? It's almost like the quote retweet is kind of like the real sophisticated way to, you know,

it's the most sophisticated part of the Twitter art form. It's kind of like that where you can just pile on and that's when 100,000 of these get made in three days. right? Yeah. Also, the fact that the videos are very short and the experience is very short means you're

consuming so much more. So a YouTube video, maybe you watch for 30, 60, 90 seconds. People flip through TikToks. They must, the average TikTok must be five to ten seconds before people flip to the next one. And sometimes they watch a longer one. But the third piece of the puzzle is something that's existed for a long time, Molly. And I was in Hollywood last weekend for my friend's birthday party. It's a very small birthday party.

but there were a number of celebrities there. One of them was a woman named Suki Waterhouse. And she was an it girl, an actress, a musician. And she was telling me one of her older songs from like seven years ago. I was saying, hey, well, she knows who I am. I met her before. Hey, what's going on in your world? What's going on in your world?

And she said, you know, it was really interesting, Jake out my feed on TikTok went crazy because, you know, somebody clipped a song from seven years ago. And now all of a sudden that song is trending. So what happened here was they made. the hook for this minions and now that's almost like creating a meme. So the hook and the sound sample is now being made in a preemptive way. And there is literally on Sirius XM, a channel, I'm a subscriber to Sirius XM because of Howard Stern, and I hear this promotion all the time. They have TikTok radio. So they're literally taking, you know, you hear these little samples,

you know, caught a vibe, you know, by Willow, and then they actually play the full song. And you're like, oh wow, that's a pretty good song, but the hook is but a small part of it. And I was talking to a number of very high profile celebrities, and one of them was a musician, I wouldn't say who, was talking about how there is a project to deconstruct all the biggest hooks in history and understand how those hooks became popular, essentially. Like reverse engineering, this stuff. And it turns out there's this harmonic uniqueness that is a factor. So the song, this is America in this one study, so there's people in universities and research projects to study hooks.

And it turns out if you're playing, you know, GCD chords, popular chords, those songs are in the lower part of the Billboard Top 100 charts. But the top charts have some unique chord structure that is different in a harmonic way. and it turns out the number one song for like this harmonic I've got the second word, it's harmonic something. Surprised. Harmonic surprise. Pretty simple. Okay, and so here is the harmonic surprise.

You'll hear the first part of This is America. And then when you hear it get kind of weird and unique to your ear, that's a harmonic surprise. So I guess that is super surprising to people when they hear it. And that's what makes a great hook. And I think that's what stops you, Molly, in your. your for you feed. You hear something unique, you stop. And people are customizing music now to have those drops, like those moments,

whatever it is. Yes. I mean, you start with the hook and then work backwards to the song now. As opposed to, you know, you have a song, you may have a couple of chords. I've heard a bunch of interviews with songwriters, you know, they sometimes start with a hook. Sometimes they have a verse. Sometimes they have a chord structure.

But now there, and there is a seminal study on this. We'll put it in the notes. just studying all of these hooks over time. And then there were, you don't necessarily have to have this harmonic surprise. There were also things that just sounded different as an entire genre.

So it turns out Nirvana was one of those things. And Nirvana was very influenced. Kirk Cobain, rest in peace, was influenced by either the Pixies or the band that sings zombie. What is the pan that's saying? The cranberries. It was either, it was that sort of.

They both kind of have, yeah, some birds of that. They both had that, like, kind of gruny. she sound that really influenced Kirk Cobain reportedly. And so there you have it, folks. I think that's, it's also, by the way, I did see, I did see Top Gun, Maverick. Finally. Yes.

It is a masterpiece. It is a masterpiece. I'm so glad I was like worried that all the buildup was going to mean it was a letdown for you, but it's so great. You know, it's just like a perfectly structured summer film. Perfect movie. Like it has just, it hits all the notes. The acting is amazing.

The action's amazing. The dialogue is compelling. The acting is great. And very cathartic, you know, at a number of moments. And the Val Kilmore stuff, I won't spoil it. It was also very touching. And yeah, just great all around. And I didn't cry.

But I was having allergies that day. I was having allergies. So when the movie ended, I did have to rub my eyes because of the allergies, Molly. And just my daughter was like, are you crying? I was like, no. My allergies hit right at the end. That's so weird that they kicked in right at the end there. Yes.

It was in a theater of all places. What a weird time. I mean, usually, you know, they should really probably look at their H-FAC system in that theater. Exactly. That can't be happening. It's wonderful. It's wonderful. It was the Pixies, by the way, and I'm so freaking happy to hear that because I love the Pixies.

I had to look up the Nirvana influence. Pixies. Yeah, you wouldn't necessarily think that. So congratulations to. TikTok, I guess. It still doesn't mean I don't want to ban TikTok and it still doesn't mean

that there are not huge problems with this. The press has run away with the TikTok story, as you know. A member of the FCC who we might have on the podcast has asked for TikTok

to be removed from the stores because it's becoming clear when you look at this and what could be done to break a box office record with the algorithm, now think, so we had this

big buildup here of how influential TikTok is and how this whole generation, their behavior, what they do this weekend. Now imagine, I don't know, a foreign actor like China wanted to influence culture in the United States. And let's say they had an issue like the Russians did, gun control, abortion, race, all of the things that we are as Americans struggling with, right? And are also in terms of issues, you know, not energy independence, not global warming, not education, not the economy, things that people might say are more important or you have a bigger impact and are more existential, right?

They can basically take the wounds we have and just rub salt in them, which is exactly Russia's playbook. That's what they did explicitly during 2016. So now TikTok has that ability. Will they use it? Are they using it? We can have that debate, but should they have the ability to do that. Yep. I mean, I don't know if you want to have that debate right now. Sure. Let's do it. Quick. Mike, mini debate. Okay, you've heard me talk about our show us your space giveaway over the past couple of Squarespace ad reads, right? Basically, we ran a contest. We asked you, our audience, to submit your most beautiful website for a chance to win a thousand bucks. Well, we featured some of the best submissions here on this week in startups, and we had so many

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And it looks beautiful, right? You know why it looks beautiful? Because they built it on Squarespace. Of course, you know, Squarespace is the best place to build a beautiful website. And they have amazing templates. You knew that. you've known that for a decade. What you may not realize is that they have amazing e-commerce functionality, whether you're selling content or a physical object in the real world. They're optimized

for mobile. They have incredible SEO built in, incredible 24-hour support. We're huge fans of Squarespace over here. They've been our longest running, continuous partner on this week and startups for that. I thank them. Thank you so much. And don't forget, you can get 10% off at Squarespace.com slash twist by using the promo code twist. Go to Squarespace.com slash twist and use that promo code twist, please. Yeah, I mean, the mini version of that is that everything you've described is what happens on Facebook and Twitter. And not, at least for me, on TikTok. Like, TikTok's for you page gives you things based on what you're into legitimately. Not this thing is trending that is going to make you angry or you should join this group that's going to make you upset, which is what

happens on Facebook and Twitter, which I think is actually why and frankly, and also on YouTube. And you see TikTok having this incredible rise because for many people, they actually perceive it as more fun and less divisive. Yes. And mine, my for you page didn't have any minions on it because it knows that all I want is huskies and cute animals. And that is why I love TikTok. But seriously, like, so when I see those stories, I think to myself, Facebook's PR team

is doing a great job because what Facebook would like and YouTube would like is the reciprocity, not to protect Americans to make money in that huge. jazz market. Well, I don't think they'll ever get reciprocity. So I think the reciprocity thing. I don't think so either, but that is the core of what everybody suddenly seems to be asking for. And I think it's either a red herring or an effective PR device by these other companies that are losing to TikTok. I don't think that the Facebooks of the world. So how about just make us happier instead of make us sadder? And then you could beat TikTok without having to plan all these stories about how the CCP is programming us. I do think TikTok has figured out an

alternate route. Instead of using outrage and these, you know, things that divide us as the way to get engagement, they figured out joy, fun, dancing, etc. It's like Monsters Inc. when they figure out that you can power the world with laughs and not screams. As long as we're talking, as long as we're talking kids movies. Well, so here's the thing. I think both of these things can be true at this, or all three things can be true at the same time. Absolutely. Facebook could be trying to undermine TikTok. And TikTok could be doing good stuff today.

That is fun and joyful. And literally that has been, they were on one of the Sunday shows defending themselves and said, listen, you know, we just open up the app, use it. You'll see it's just all joy. There's no political stuff there. Some people do post-political stuff, but it generally doesn't trend and nobody cares. And so we don't show more of it. Should they have, and then the third thing that is true is, should they have that power?

and should reciprocity be a key, you know, operating principle on communications platforms, and I think it should. So all three of these things you could actually agree on. Facebook is horrible in Twitter for, you know, rubbing salt in the wounds and using outrage as their way to trend stuff. TikTok has found an alternate of outrage, which is joy and fun and creativity. And the Russians could be secretly plotting to have this as a secret weapon, which is what I actually think.

I, you know, don't put it past them. sciops and having control of another group citizens. They need it. I just don't even know if they need TikTok at this point but yes. Those with facilities,

this high definition that nobody just nailed it. Those with facilities set up for screams will always fight for market share. So anyway, I still think it should be kicked out and then let the other platforms or let another platform emerge

to use the same basic structure. Here's a video, here's a sound, now make something creative around the sound. That's my last take on it. But yeah, this harmonic

the harmonic structure is something that I think is going to be really interesting in terms of AI. I think this is something where what's the AI? We know GPT3. Is it GPT3? Yeah, I think it is. Something like that. I always end up in the Gary Payton. Anyway, it's something close to that.

Yes. So anyway, the one for basically doing dialogue, that's working relatively well. Now there's the Dolly one that is doing images. That's really well. The next piece that's going to drop is not like beating a video game. It's going to be creating a hook. So you'll have AI that'll be able to create better hooks than humans. And then that AI, some human will sing the words the AI tells them to sing. Or they will then create a version of, you know, God forbid, Kirk Cobain singing a hook. And then they could literally come up with five songs that Kirk Cobain could potentially have written and with hooks and

you know that it's sort of game over for the music industry or game on for the music industry or humans game over for humans yeah so this uh frontiers inn.org uh the paper that if you want to look it up what to expect when unexpected becomes expected harmonic surprise and preference over time in popular music key takeaway previous work demonstrates that music with more surprising courts tend to be perceived as more enjoyable than music with more conventional harmonic structures. Sicko mode by Travis Scott and Drake also had that. It's so funny because I have a playlist called Awesome Key Changes because I have always been aware of my highly susceptible, my high susceptibility to musical manipulation.

Like every moment, there was some tweet one time that was relevant to the fact that I've created this because every time you have a song with an awesome key change, you get. all fired up. Like, no doubt about it. In fact, all fired up by PAP and Tatar. Good key change song. But I remember somebody tweeted one day and it was like, every time I thought that I had had a religious experience or moment of transport listening to music, I realized it was actually just an awesome key change. I'm like, that's right. I'll share my Spotify list with you. It's got a lot of a lot of good months. All right. Speaking of TikTok and potential growth, according to the financial times, TikTok has canceled, maybe because Facebook's PR machine is working, has canceled.

plans to expand its new live e-commerce platform in Europe and the U.S. after struggling to gain traction in the UK. It's called TikTok Shop. This is actually extremely common in China that there will be these live streams, much like the Twitch streams that we are familiar with, but where people stream for a long time, but what they're doing is selling. It's like QVC. And the commerce venture is called TikTok Shop. It's active in Asia and the UK. And it is much like a TikTok version of QVC. evidently though, when it launched in the UK last year, it failed to meet engagement targets and some influencers actually dropped out of the program. And anonymous TikTok employees spoke to the Financial Times and said the market just isn't there yet.

General consumer awareness and adoption are still low and nascent, which I think is kind of interesting. I think in the West, my theory on this is that in the West we want our constant upselling in marketing to be more subtle. Like we don't want it to be so on the nose. There were, I mean, there's a group of people who really enjoyed QVC. I think people who had a lot of free time who enjoyed shopping, unboxing experiences. Amazon copied this as well. It just seems like maybe Americans are too busy to sit there and watch a video about a product,

one after the other sequentially, and then buy it. And they just like, you know, maybe there's other modalities that work better. We're like not too busy judging from our social media consumption, but I, but maybe this, idea of a stream that just is like to sell you stuff is a niche here. It's just not our it's not the jam. I don't know. I think it's really interesting. I think there's an opportunity here. Like if Marquise from that YouTube channel, MK. Marquez. Marquez. Yeah, if Marquez did this on his YouTube and he said, here are my top 20 products or peripherals that you don't know about, go buy them. Because I'll watch him sometimes. And

he'll influence my purchasing, I guess. Right. If you like something. But see what I mean. It's more like, it's more round. It's not just, here's a thing by it.

It's review based. It's a trusted recommendation. Yes. This is sort of like the way it works in China. I interviewed this person who did a documentary about this in China and how common it is. And it's all about the influencer. There's not a review thing necessarily. It's just like you really like this person.

They tell you to buy stuff. You buy it. And then you give them tips while you watch their live stream. It's just super. transactional. Whereas I think the model that's been more popular in the U.S. and the UK is more, I don't know, it's like quality oriented, it's research, right. It's more CNET than it is QBC.

It's just interesting that. Yeah, I'm interested why this doesn't work culturally here. Or the UK. I mean, that's where it failed first, causing them to not want to. It seems like it's a uniquely, your aunt and your grandparents. mother watching QVC and buying, like, what are those little figurines they buy and they put on shelves, the collectible stuff? Oh, humble, humble, humble, hobbles, who bull?

Whatever they are. Yeah, like this one, there's like all kinds of different ones. The little figurines. Little figurines and they collect them and, you know, somebody goes on there and says, isn't this incredible look? It's got this like unique feature. You know, it's kind of like NFTs. Like, if they did this for NFTs, that'd be kind of cool.

Get Gary Vaynerchuk and like somebody else to just sit there and talk about NFTs. and there's like a hundred of them available. It's like kind of NFTs is this, right? They do a drop. And actually a little bit is this. And there's a certain number of them. So maybe like the drops are kind of like in sneakers you have drops. So it's a limited supply of things.

Combine with a video, combined with an influencer. But the thing that doesn't seem to resonate here is the video part. Yeah. Yeah. Interesting. Humble gifts. Can you believe? I forgot about these creepy little bastards.

Oh, God. Hummel. Right in the garbage. Like this is what happens. grandma dies, God forbid. This legitimately is. And then somebody goes to their house and they're like, where's our inheritance? What did grandma do with all the money?

And there's like 300 of these figurines or unboxed, you know, on the shelves, boxed, whatever. Which are still going for like hundreds of dollars. Okay, I'm down the rabbit hole here. I'm pulling out. Pull out. Masterclass is the best way to learn from world class instructors at the top of their fields. I love this product. I have a subscription to it.

My wife and I use it. We love it. There's amazing courses there, including my pal, the greatest shooter of all time, Steph Curry, teaching you shooting, ball handling, and scoring. I'm actually going to start taking that class because there's a basketball court here up in Tahoe and I'm going to start running some pickup games. I want to learn how to catch that ball, cock it into the right spot, get up on my toes, and boom, have that Steph Curry form. And I'm going to learn that at Masterclass. That's the only place Steph Curry teaches it. And I just watched Chris Voss. He's the former FBI lead hostage negotiator, he's got a best-selling book. Well, he has a course on Masterclass that's even

better than his best-selling book. And the world-class production value, they spend so much money producing this stuff that it's just a joyful thing to watch. And the lessons are about, you know, 10, 15 minutes. So you've got a busy schedule, you're drinking a cup of coffee. Why not do something for yourself to improve yourself? And you can get unlimited access to every master class. I kid you not. You just make one decision. Masterclass is the best. I'm going to subscribe to it. I'm going to invest in myself. You make that one decision. You have access to all these classes. Think about how much you can learn. So, as a twist listener, they're going to give you 15% off an annual subscription. That's a great deal. I want you to go to masterclass.com

slash startups, masterclass.com slash startups. And you'd get 15% off a masterclass annual membership, which is completely worth it. I pay for it myself. And I did long before they ever considered advertising gear, because I love the product. Well, speaking of China, you know, everybody knows Taiwan is the world leader in chip manufacturing. And that, you know, we saw during the supply chain, if we don't get semiconductor, if these semiconductors and these chips don't ship, well, then you can't get a car

because it's waiting for a chip and you can't get an appliance, etc. And obviously these chips go into military aircraft, weapons, systems, etc. They're in everything. And so as part of this, you know, we did a chips act. And maybe you could

just refresh our memory on all of this, Molly, and why this is super important. Right. So as we know from the pandemic, this global semiconductor shortage affected prices for everything and really put the spotlight on the fact that the U.S. has virtually zero, possibly actually zero manufacturing capability for chips in the United States. So there have been plans for a global expansion. Intel was talking about breaking ground on a facility in Ohio. Lots of other chip makers were, well, I guess there aren't even lots. of other chipmakers, but there have been efforts to try to bring chip manufacturing to the U.S., including, actually, Taiwan Semiconductor company. TSM was saying it was going to open a plan here with the aid of this Chips Act, a big bill that would provide $52 billion in incentives to chipmakers to set up shop in the United

States. It promises tax breaks and other incentives. Unfortunately, two things happened. One, the bill didn't actually include funding. It was these tax breaks and other incentives, and the chipmakers would prefer money to establish manufacturing here. The second thing that is happening is that this bill is being held up currently because Mitch McConnell said he would block it related to a budgeting bill being put forward by the Democrats that included price cuts on prescription drugs. and I think the rollback of some tax cuts, some budget priorities that he was not into now. It's caught in the crossfire.

And so these now chipmakers are saying, well, we're not going to expand to the U.S. What's interesting, there was a good Bloomberg piece, actually, that was an opinion piece. If you guys can drop that in here, I think I put it in our chat earlier, that was basically saying, like, everybody's shooting themselves in the foot here. Congress is effing around with this in just the most nakedly political way possible. but also these companies have the money to do this, right? Like, get some financing. I mean, pay for your own chip facilities, considering that you just lost a ton of business

or had all these problems as a result of this global supply chain. And so what this Bloomberg piece pointed out was like, it sort of feels like nobody is very serious about this. And if I'm being honest, I spoke not that long ago at an event, like the Silicon Belt, like the chip trade association, event. And it seemed pretty clear that nobody actually wanted to pay for the expansion into the US and that it's so much harder and more expensive than they're making it out to seem. Like,

you can't just pop up a fab facility. It's like NASA. Yeah. This is hard work. It's expensive to do. And the Chips Act, creating helpful incentives to produce semiconductor for America, you know, if we do not provide the incentives, South Korea is a very viable location. Europe is providing some serious incentives. And so, you know, in a global capitalistic market, of course people are going to just go to where the cheapest and fastest solution is.

Now that has been China and Taiwan, but these things take, you know, five, ten years to get up and running, to get competitive. It's not, this is not like, I don't know, opening up a Starbucks, obviously. This is, you know, takes a lot of forethought and a lot of investment. And so I think we have to reframe how we look at this, how we look at energy independence, you know, the supply chain around pharmaceuticals.

So if we just take those three, Molly, this is what I've been thinking about all weekend. So thinking about, you know, where is America very strong and where are we actually weak, right? And, you know, I did this tweet, like, hey, still the best country in the world. and of course, you know, that created a lot of debate. We have issues that we can, you know, having a really hard time seeing eye to eye on. Abortion, gun control, social justice. I mean, pick any race. Well, race.

But also, manufacturing, globalization, like, oh, huh, huh. But no, now we put those, there's a, those energy independence, supply chain and pharmaceuticals. I think everybody in America agrees. We want to have those be. independent of dictatorships, right? We don't want to be dependent on Russia or Saudi Arabia for oil. We don't want it to be dependent on a dictatorship in China for our chips or pharmaceuticals. We can all agree on those. Those 90 plus percent of Americans are like, yeah, we should be able to make our, you know, drugs here. We should be able to, you know, build nuclear, solar, whatever,

be energy independent here. And we should, you know, have not have this dependency on chips and high-tech manufacturing. We should put those in a different bucket. And the bucket is kind of where we have defense. We're not having big debates about defense, right? We want to have a strong military. We want to be protected and safe. This is where I think we should move these categories of discussion to. It's national security.

If you take them out of the bickering we have around race, abortion, and gun control, which will those will never end. Those debates are so, you know, polarizing. I don't see them end it. Chips aren't even in that debate, though. Chip, this is purely... This one is being held up on other budgetary constraints. If we just put them into the military bucket, took money from the military to fund those things

and said, energy independence is a military issue. Let's take some money from the military. Anybody would say, well, that makes sense. We don't have to go to a war with Russia if we are in energy independent. We won't have to go to war with China if we're independent and Taiwan. Right. But clearly, none of your homies are in the military industrial complex because plenty of of people would say no to that, including most likely these big chip companies, because I guarantee

you that deep down inside Intel does not want to manufacture chips in the United States, because you know why? It's bad for profit. It is too expensive. Full stop. It is too expensive and too complicated for any of these companies to set up manufacturing in the United States. And they're not going to. And they're not going to do it without the Chips Act. And the Chips Act is not going to pass because Congress can't do, Congress doesn't do stuff like this. Like there is a universe in which we could make it part of a national defense budget, but it would cut into the profits of these companies. It would also mean that like TSM probably couldn't manufacture for the United States because they would find some security flaw in reason like, well, it's not safe. Taiwan, they would,

they would, they're actually, Taiwan is opening a plan here. So we see Taiwan with TSMC as a, an ally and somebody to get to it to those. But if it was part of national defense budgeting, then that That would be a different conversation. Well, I'm not just saying it's strictly, you know, you have to take it from the National Defense Budget. But if we just framed it, we thought about it as being in that vertical. We should. We are 100. I agree with you.

We as Americans need to, and the politicians, I think this gives them a free pass, basically. Move this stuff over and make it non-polarizing. We must have drugs. We must have, you know, pharmaceuticals. We must have energy independence and we must have chips. and it is a, you know, this is a sovereignty issue. This being dependent, we're seeing what being dependent on Russia's done to Germany. And us being energy independent, we don't talk about this, but our country is, you know, a net exporter now.

We're largely independent of these issues, even though our gas prices have gone up. We're in good shape. Germany's like actually wondering if they're going to be able to have enough, they're going to have heat this winter. Like, they've got existential issues. We don't have existential issues anymore with energy. We do have existential issues with pharmaceuticals and chips. The good news, there's other places that are democracies that want this business. If we screw this up, it's going to go to South Korea.

It's going to go to Europe. And that's fine. Those democracies are high functioning and we can buy chips from them. If those are cheaper solutions, it's fine. But I thought the framing is something that we could unblock a lot of our thinking. You know, if we take education and take it out of, if you look at education as a national security issue, yeah. I know. I mean, there really is, you're absolutely right that they're-

Immigration, national security issue. There's such an opportunity for an administration, almost certainly not this one, to market all of these issues, to lump them together and say, you know, if we want to remain the strongest. And frankly, actually, that is what South Korea quite specifically has been doing for several decades. And the first investment they made is in education, to be and stay a strong country. And immigration falls under this. So now you have education, immigration could fall under this rubric on this framing, this way of contextualizing the issue. So we don't have to fight about it. We don't, Republicans and Democrats fight over everything.

They don't have to fight over education. They don't have to fight over immigration in these two verticals. If we don't have scientists, if we don't have technologists, and if we don't let people immigrate and stay here after they get their PhDs and masters and high tech, you know, jobs, we should just carve that out. I've talked about it on this show before. That's recruitment. Recruiting. That's drafting. That is like the NBA, scouting. We should look at that differently than immigration coming across the border, immigration, you know, people coming here for asylum because they're, you know, face, you know, something horrible in their own country. That's separate than recruiting talented people so that we remain secure as a country, national security issues. Anyway, they have a fix. That's my little rant and pivot. Love it. Love it. That's a perfect way, I think, to come out of the fourth weekend. Yeah, I was thinking about America. That's all. This is America? Like, this is, you know, things that we can all, what can we agree on is a great starting point for resolving issues. Once you have what we can agree on, if we agree on those five major topics, okay, gun control. All right. Yeah, this is going to be hard. Oh, abortion. This is super hard. Okay, race, reparations, social justice. Okay, this is hard. But at least we have, you know, a foundation of things that we work on together, politics. states, the citizens of this great country, that make you feel like we're making progress.

Like if we were getting nukes set up here, if we were recruiting the top scientists around the world, if we could be, you know, energy independent, oh, my God, and semiconductor independent, supply chain independent, would just make Americans feel a greater sense of pride, I think. And you'd feel safer, right? You'd feel less anxiety. Yeah? as a country.

Maybe. All right. They have a focus. That's my little rant. I read my rant in the YouTube. I would also like, you know, human rights for women and girls, but. We can still work on those. We could still work on those.

I'm trying to take stuff off the table. I'm just saying when you say safer and less anxiety, the semiconductors are not quite as big a deal for me right this minute. However, I do understand that the long term economic certainty, economic uncertainty and division is what causes, what makes it way easier for social issues. to crop up and tear us apart. And my theory is like the social issues are how this is super cynical, but I think a lot of politicians are using these social issues as like wedges to get people to come out and vote. Of course they are.

And to me, it's just gross. You know, I want to see a politician get up there. I want to see them get up there and say, listen, we can all agree on this. We don't want to have smarter kids. We all have kids. We all want the next generation to be smarter. We want to be competitive on the global stage. let's just agree that we're going to invest like maniacs in this country for STEM.

We're going to go crazy. We're going to have more people in graduate school for science, technology, engineering, and math than any country. Like if I run for president or if I ran for governor, that would be my platform. I'm going to make things more fun. I'm going to make everybody smarter. The end. I think I could win on that platform for governor California. I mean, seriously, yes.

I am in for this. Let's go. All right. Here we go. All right. Jason. com. Thanks for listening.

Everybody, it may be a short week, but it's not going to be short on content. That's for sure. Tons and tons of news. Just another great show here covering the news for you. If you want to join us live, don't forget. YouTube.com slash this weekend, or you can go to this week in startups.com slash YouTube.

It will redirect you, hopefully. We also have a Twitter community where we talk about these topics throughout the day. And the Twitter community now, over 1,600 people in that Twitter community explaining to us, what they want us to talk about on the show and then basically double-clicking on topics and helping each other with their startups, which is kind of cool.

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So do you. We want to hear from you. Let's all hang out. Let's all hang. I'm really thinking about real world stuff too, by the way, Molly. I'm thinking about we should do a quarterly dinner. I'll flip the bell.

I'll pick up the tab. But I was thinking of quarterly dinner with investors in climate and renewables and sustainability here in the Bay Area. Just do it quarterly. You know, we'll pick a nice ramen joint, something nice and fun. It could be by you out in Oakland if you want.

We do in the East Bay, maybe San Francisco is easiest, but get a private room and maybe 12 people who are investing in the space. We'll just have like a little get-together. You know, keep it very casual. And I want to do that as well, well for early stage seed funds too is just do like a quarterly dinner so uh and then we're

going to start doing this week in startups live if you have ideas producers at this week and startups dot com we want to do this week and startups live soon so uh just to meet the fans and get out there now that uh we're in the endemic so we'll see it tomorrow let's go let's go tomorrow see it tomorrow