This Week in Startups - News! Bitcoin hits $50K, monetizing Clubhouse, drafting the Mount Rushmore of Tech CEOs & more with Acquired FM | E1175

Episode Date: February 19, 2021

Check out Acquired: https://www.acquired.fm FOLLOW Ben: https://twitter.com/gilbert FOLLOW David: https://twitter.com/djrosent FOLLOW Jason: https://linktr.ee/calacanis

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You ask for the Acquired FM boys to come back. Well, here they are. Ben Gilbert, David Rosenthal, in their fifth, sixth, seventh appearance. Who knows? They've been on the pod so many times now. If you don't know their podcast, it's Acquired.fm.

And of course, Ben is the co-founder of Pioneer Square Labs and the PSL Ventures Startup Studio VC Fund in Seattle, David Rosenthal, is the co-host of Acquired.fm, and he does not wet his beak. He does. He's an independent angel investor. He likes to wet his beak and a startup advisor. When you advise a startup, you get like 25, 50 basis points. What do you get?

A little chip chip there? Like, I used to back on the day? I usually, mostly, um, angel investing these days, uh, Sometimes I do invest a little and advise a little. Specifically, I usually help on, can help on fundraising rounds, having been on the dark side as a VC. Right. But you don't take a percentage of the round, a percentage of the raise. You just become an advisor for a year or two?

Yeah. No, no time limit. When you do the advisor agreements, you use the Founder Institute one that's nice and clean where you put the scope of work and the duration and everything, or do you just do it on a handshake? How does it work? usually most of what I'm doing is angel investing so almost all of I don't think I've ever been an advisor and not an investor so I angel invest alongside and then if I'm like being particularly helpful or helping on a specific thing might give you like an extra 25 basis points or

something yeah exactly what's the typical ask for a steed stage company 50 bips 25 bips oh I don't ask at all it's just like if the founder thinks I'm being helpful oh they'll just give it to you so you just say whatever I see my early day I would put in 10 to 25K and then ask for 25, 50 basis points and try to do some work. But then I got a bigger chip stack and I started investing more. What's your typical angel size, David, 10, 20, 30K? 10, 20, although I will admit, heard it here first time. I'm thinking about joining you, well, not joining you on Angel List because you have your own

platform now, but considering rolling fund, syndicate, so many options out there now. Yeah, you should do a syndicate. and if you do a syndicate and you want to do it at the syndicate.com, I don't want to compete with Angel's. I'm not really competing with Angel's. But we've done so well with the syndicate now. I have a problem. I don't have enough inventory of companies.

And I was just out of my staff meeting today. The last four or five deals are all two or three hundred percent oversubscribed because you typically have a small allocation, right, 500K, a million. Yep. And they're all coming in double, triple. It's really weird. And then I looked at it and I was like, oh, we quadrupled the size of our syndicate. It's a 7,000 members now.

And we're adding 100 a week, week in and week out. So we're going to get to that 10,000 I set up as a goal. Jason, I can't hear you over all this flexing. It's crazy. It's like it's this weird distortion. But there's the thing, Ben, should he do a rolling fund? Or should he do just deal by deal carry, easy, breezy syndicate? which is a better thing in your mind,

because you and I both have funds. I have a fund in a syndicate. I'm curious when you look at it, do you think these rolling funds make sense or not? I do think rolling funds make sense. Okay, why? Explain what a rolling fund is and explain to the audience why it makes sense.

Well, I mean, there's a lot of nuance between the two, but the thing that makes a rolling fund, to me, as someone who's not doing either or contemplating either or more attractive, is you get the capital commitment up front. You're not on a deal-by-deal basis going and rounding up,

hey, who wants to do this one with me. I mean, frankly, it's the attractive thing about being a venture capitalist, too, is where, you know, you secure the capital and then you get to decide the investment. And you can do that on a short timeline rather than needing to go. I mean, we all know how these rounds are coming together. It's like, you know, even if you're, even in cases where I'm working with the founder, helping them fundraise orchestrate a process, like it's coming together in a week, you know, I'm worried about a syndicate coming together in that period of time. That is challenging. Yeah. See, that's where the fund plus syndicate works really well because we can say, hey, we'll put 250 in from the fund

and we'll syndicate 500. And we kind of get the best of both worlds, you know, what I'm saying, so you can kind of really, um, well, and Jason, the way you haven't set up too, where like, I mean, if you're this oversubscribed on deals, then syndicates work great too because you're never sitting there waiting for weeks for somebody to commit for that last piece. You got a lot of demand. That's right. So if people don't get their paperwork in in time, the train leaves the station. and we're not holding the train. There's 150 people in the train. We're not holding it for the 151st.

But when I was starting, you're all right. Ben, if we had 50, and I needed to get those last 10 for Com.com in for 5K each to get that 50K. And I would hold the train for them because I needed them. I needed to book those seats as it were, right? So it is interesting. But the big game changer for all of this, though, is publicly soliciting, having this be on a incremental basis versus a 10-year life cycle fund.

So those are two different unique things. into the audience, who are neophytes. What do those two things mean, practically speaking in plain English? Well, okay, so on the fund lifecycle thing with let's take rolling funds, to me, this is huge. The ability to flex up and down on the size of the fund as needed. Like, you know, I've been at work at Majorna in past life, you know, big long established VC firm, raised my own fund with a few partners, you know, $55 million fund. We had to go out. We had to go institutional capital, go to all these LPs, universities, and the like, we had to put together 55 million bucks off the bat up front with the idea that that's going to last us a couple

years of investing plus per rata, get it all arranged up front. Well, then you hit market and like, you don't know if you can deploy $55 million or $10 million or $200 million, like, but it's all got to be set in stone up front before you know anything. Or if seed rounds double while you are out fundraising and suddenly your fund strategy that was predicated on a certain number of bets at a certain check size. Oh my gosh, the whole world's different. Which is happening to us as we speak. And the bets are in quarterly increments. So if you have a fund that is going to invest primary capital over three years and follow on over years, you know, four, five, six or whatever, you know, you got a certain window of time here. Here,

it's quarterly. So I can make a 5K commitment, 20K a year and I can skip as an LP. I can be like, you know what, David's doing a great job. I want to double. I feel like, David's hot. I'm going to increase my bet size in Q2. Oh, I feel like David didn't send an update. I'm going to skip Q3 and said him, hey, did I get an update? How's our business? And I don't want to say a short leash, but it does put, I feel like the GP, especially a new one, you're not a new one, your experience. But for some of the new GPs out there, it does let the LPs keep them on a shorter leash, doesn't it? Well, it does. But also, you know, I mean, I think one of the things I certainly found raising a traditional first-time fund is that you can think about,

your strategy all you want, but until the battle plan meets the enemy, you know, it's hard to know. And so you don't, you don't really know what is going to make sense for you as a strategy for a fund. Like, you hit the market with a large fund and it turns out it makes sense to do smaller check sizes instead. Well, you can't. Sorry. You know, or the opposite. So I think it gives LPs a chance. Well, A, it gives, it democratizes access to who the LP class is. That's the next thing about publicly soliciting. But, yeah, let's explain, Ben, what does it mean to publicly solicit versus what you and I do when we raise a fund?

Yeah. So when you are going and raising a traditional fund and you're, you're not only raising from, you know, just accredited investors, but in fact, qualified purchasers and even more stringent, um, requirement of, you know, the level of, uh, I think the wording in the law is the level of sophistication of this investor, um, which frankly is bound, uh, or tightly coupled to wealth. So people who already have a lot of money have access to invest in traditional funds. And of course, institutions do. But individuals who are just looking to deploy a little bit here and there, maybe because they feel like the stock market's too hot, or they don't want to pour it into

local real estate, or their interest rates and their savings account aren't doing anything. So, hey, maybe it'd be kind of fun to get into startups, which could be a high-yielding asset class if you invest in the right manager or the right startups. But of course, with traditional funds, that is not currently something you can do. However, with rolling funds, not only can, you know, the, the everyone sort of invest, which I think is true. Correct me if I'm wrong, David, but you can actually ask for publicly. Investor, but the, but the requirements for that are much lower. Here's the nuance. You can be a, you can publicly solicit, but they still have to be accredited, but then they, you have to do a higher level of verification, which I think a short

fund management and angelist, both of those services will do that for you. They charge 50 bucks, I think, and they just have to have an accountant or an attorney, I believe. People can look this up or fact check it. They need to look at the bank statement or a letter from the person saying, okay, this seems legit. And there's somebody who's CPA or legal degree is on the line for saying, this is an accredited investor. Now, if you, and these fall under the 506B and 506C offering rules, I believe by the SEC. And so the innovation for the rolling funds was, hey, the LPs make commitments,

limited partners make commitments quarterly, and they can change them, which you can't do in a regular fund. You pick for a regular fund. I'm going to be in for Ben's fund or Jason's fund for $250K. You can't say, you can't change them.

5K this quarter, 10K this quarter, whatever. But then the public solicitation is really amazing. You say, hey, I'm raising. Yeah.

And I'm always raising. Yeah. And so Ben, does that be a little jelly of David? Are you a little jelly of David there? that he can go public solicit. Jason, you figured this out before anybody, right?

For folks like you, you know, like us that, you know, have a platform of, you know, whatever size, a following,

like it, this is completely game changing. You know, the percentage of our, of acquired listeners who are institutional LPs of the sophistication, size,

accreditation that would make sense to invest in a traditional fund is 0.01%. You know, the percentage of LPs of, of listeners to our shows that are accredited investors, have the sophistication knowledge, desire, willingness to invest in funds,

but don't meet those requirements is, I don't know, 10%, 15%, 20%, orders of magnitude more. Yeah, it's pretty dope. And, you know, the unfortunate thing is we hit critical mass and we don't need to do public solicitation. Now we don't need any more LPs. And so now that we're on the other side of it, it's like, I would like to do a public solicitation and allow more people to know about it. But I can't because we've already hit critical masks.

We already have these funds. So now I'm left to- Do you have a maximum commitment size? You know, you can do $10 million and up to 250 people, I think, in this process, I think is the limit. And we don't hit that. So, I mean, we just hit our largest deal ever for the syndicate. And it was $3.7 million. 3.2 from the syndicate, 500 from our fund.

Wow. So you're a legit, you know, check size firm. Series A. It's like a series A firm. Yeah. So we started as a syndicate doing seed and now we're literally doing million dollar, $2 million, $3 million thing. So it can happen, but it has to be a pretty robust company.

All right. When we get back from this quick break, now that we've talked shop and warm the audience up, something crazy happened. Imaginary money is worth a lot of real money. Bitcoin has been. broken $50,000. It's not a bubble. Is it a bubble? Is it not a bubble? Ben and David will tell us, should you put all of your money into Bitcoin or not when we get back from this quick break?

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And it's already great prices. So thanks again to M-Broker. Go ahead and check out inbroker.com slash twist. Okay, we're back. Ben, we have a lot of listeners. David, we have a lot of listeners on the line. They have liquidated all of their equities. They've got a ton of stock.

They're in their coin-based accounts. They got their entire network than 401K into Bitcoin. Should they do it? Yes or no, Ben, go. Wow. Something, something, something. This is not investment advice. Yada, yada. And also, I like the question that you get our lawyer on the line. Exactly. I like the question that you went to commercial with, which is, is this a bubble? And David and I spent like an ungodly amount of time researching Bitcoin for a massive episode that we did in January. And which is our, it's crazy. It's like already our biggest acquired episode ever by like 25%. it's a month old. If you talk about imaginary money,

you get ratings, for sure, especially when it's going up. It's like tweeting, like, do you have Google wave invites? Like, you just get all these people like spam following you for, for a decade thereafter.

Anyway, the, the most interesting sort of realization that I had, and this is thanks to the paradigm folks, um, was, yeah,

of course it's a bubble. All money is a bubble. It's just a really, really long one. And this was like an interesting heads up for me where if you're buying a stock, And let's not talk about the stock market today, but talk about the stock market a decade ago, you're buying something that represents the intrinsic value of the underlying asset. It's all the future profits that that company's going to make. Well, if I'm buying Bitcoin, like, or I'm buying a U.S. dollar, there is zero underlying value. The entire value is in the scarcity value and the fact that somebody else believes that it's worth the same thing or more than I am. So it makes it worth holding. And of course, the U.S. dollar has, been, what, for 50 years off of the gold system? So it's been no intrinsic value, sort of

exclusively a bubble ever since then. Bitcoin, of course, is the same thing. We've just seen these rapid, you know, boom and bus cycles. At the end of doing this whole episode, where I came down, I am so much more excited about Bitcoin than I was going into it. I absolutely get how it and why it will be a long-term store of value. Do I think it's an effective currency? Absolutely not, but it does seem that the world has kind of moved on to that, moved away from that and is really thinking about Bitcoin specifically, much more as, hey,

this is digital gold. And I'm on board with that. It's currently at a market cap of $974 billion. There's literally a trillion dollars. It's basically like an apple a couple of years ago. Half an apple. It's half an apple now, but it was a full Apple just a year ago.

Literally for something that doesn't exist in the world, except for some servers mining, some hash. Wait, I want to make a point, though, that this is one thing that I really tried to land on the episode. I hope we got across. Yeah. It's not totally that it's nothing. So a Bitcoin is the reward for doing work to verify the robustness of the system.

Like, it's like you get paid for it. It's like, you know, you go to work at a bank. You're working at a bank. You're working at the Fed. Like you get paid for the work that you're doing. Okay. The miners is just where every Bitcoin came from getting paid for that. Yes, from doing busy work.

It's like literally somebody wrote it for verifying the integrity of all the other transactions. It's literally I will not steal. It's not so somebody, you know, somebody can't go into your Coinbase account and take all your all your Bitcoin. But just to put a, to put a pin in this, it's worth more. Bitcoin is now collectively worth more than Facebook. And people use Facebook and Instagram all day long.

It doesn't make any sense that it's worth all this or does it? I understand it hasn't been hacked yet. So I think for me, the fact that it hasn't been hacked and it's a store of value is a miracle. The fact that there's a trillion dollars on a computer network owned by nobody, that's what the work. That's what the busy work that these people are doing. You think there are people that aren't trying to steal this money? Like shouldn't have been hacked? Like, aren't there Russians?

A lot of it's been hacked. I mean, well, yeah, Bitcoin, the thing that, you know, never has been stolen or compromised or lost. Well, it's been stolen on the ends, but the network itself is not the integrity of the system. Yeah. The integrity of the system with a trillion dollars at stake now, you would think that some state-sponsored act or China, Russia, pick a person who's got resources. They must be trying like heck to figure out a way to siphon off this value. And maybe they're doing it in some ways. I don't know. No, we'd know if they were. Here's the thing about zero-day exploits. Either they would have done it already or

they perceive it to be way more valuable in the future. And so you're saying there could be a zero-day exploit in Bitcoin. Sure. Sure. I mean, there could be a zero-day exploit in iOS. But it's all open source, right? It's all, the code base is all known. Why does that make, that means a lot of people have looked over it and no one's caught

a bug. But like, absolutely someone could have a zero-day vulnerability exploited and they're just deciding how to bring it. That's fascinating. Then they would also be long Bitcoin. They'd be betting on it being worth more than the piece. So, yeah, as long as the hackers are long. we should be long too.

Maybe they put that zero in there and they know this is another conspiracy there. What if there is an exploit in there that lets them predict where it's going or have some back end control of it so they could make it go down by, make it go up sell, make it go down by, make it go up sell. And they could just keep pumping and dumping in some way. This is a crazy conspiracy. Somebody's paying for order flow in Bitcoin. Too soon.

Exactly. No, there could be some weird bug in there. It is completely crazy. I mean, the hardest part about this is having to listen to Pomp and all these other people be insufferable that it's going to 250K. And I have exposure to this. Have you had the Wickel Boss Twins on the show? No, please go on.

Oh, you gotta have them on. Oh, they're very compelling. They're brutal. I just, it's hard to like just even look at them without seeing the social network and you've had them on the show. No, but we talked about them a bunch in this episode. Did you know that they... Are they dopey?

They're so smart. They took the Facebook settlement. in stock. Everybody was like, take the cash, take the cash, take the cash, take the cash. They took it in stock. They turned. That's got to burn. That's got a burn.

Oh, for sure. Zuckerberg like crazy that they still in stock. They took like $45 million in equity, turned that into $300 million in the IPO, put a whole bunch of that in Bitcoin and made like several billion. They're savvy at least. I just find them insufferably, insufferable. It's really the fact that there's two of them and they're really tall. That's the thing I find insufferable.

like two centers from the end. It would be like if there was two Shikil and their Olympians and their amazing investors with a track record. Like, it's too much. The whole thing is too much for me. So let's just put it at this. When we look at the bubble, somebody is going to get tagged here. So it looks like Elon bought $1.5 billion through Coinbase. Wait, through Coinbase? Yeah, Coinbase Prime Berkish. Coinbase has a primary, like they have a VIP program where I guess they work with people to build large positions. They did it in a week for them according to a headline I read. Yeah, it's a prime brokerage, just like a prime brokerage that a bank would have. And it only took them a week to build the billion and a half dollar position. That was the thing I found fascinating.

So I think what probably happened was they said, listen, we've got a buyer here who wants to buy a big chunk. That's good for everybody. Do people want to let this person in to the club? Or maybe they just, you know, maybe that's why it went from 35 to 50s or when it went from 30 to 40 was that buying going on. They've made 600 million now in profits. Wow. I mean, the way Tesla is running. It's a treasury asset. Like it's like that I mean, we, in some ways we should say, oh, look at all this profit that they're making. But you know, like, that's not the goal there.

At least you would hope that that's not what sort of the CFO of Tesla is looking at this as. This is like a store of value, not an investment. Well, I mean, if he chipped off a hundred million a quarter and put it into building gigafactories, he would be taking virtual imaginary money and making a real world factory out of it. Do you have a business that accepts purchases or orders online? I bet you do. You're listening to This Week at startups.

And if so, have you ever had a digital transaction not go through? Of course, the answer is yes. So that's called a false decline in the industry. That's an industry term. A false decline. And this is what happens when an online purchase is declined, but it should have been accepted. How frustrating is that? You're right there.

You have the ability. It's a layup. You're going to put the ball in the basket. But no, you miss the shot. And this is often the result of technical, financial, or fraud scoring reasons. Well, last year, wait for this. U.S., UK, French, and German false declines were over $20 billion with a B dollars, according to our friends at checkout.com.

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that we're in a bubble in terms of the cycle, right? We had a down market in 2008 all the way to now. We had this little crazy blip during the start of the pandemic that very quickly recovered. so I guess we had a crash, but it recovered so quickly. I remember calling for a bubble in 2015, and we're still on that same bull run. I'm actually super curious, if you want us to answer the question, we won't back out to answer the question, but I'm very curious, I want to know your opinion from, you've lived through a bunch of cycles. This feels bubbly to me when people are doing irrational things. So that, for me, is the sign when people think that,

they can't lose, that's when I get worried. So when people are just not thinking about their bets, we're not using judgment. So I'll give a couple examples that made me nervous previously. During the dot-com era, I was filling my gas tank, and the person recognized me from the magazine, who was literally pumping my gas, and was talking about his pets.com and e-toys and other stock money that he was making and that he wanted to do. want to start a company. And I just thought, well, it's great that things are democratized, but this is a little bit weird that the guy pumping gas is also trading these stocks. So I do

get a little concerned about the stonks effect, which I would parallel those two. And then people not questioning valuations in the private market. I've seen that happen a number of times. That also gets weird. So, you know, having a company that, and you've probably had this experience right now, and you see it in VC culture on Twitter where people are talking about their markups. So I'm watching first-time fund managers talk about their 5x, 4-X. I wouldn't say the name of the woman. Jason, they're fundraising. Anyway, there's a woman who is effervescent on Twitter.

I would say her name. Oh, wait, wait, wait, we got to, I haven't, if it's come out, I haven't seen it. We've got to put this to rest. Jason, are you the mad genius behind VC Braggs? No, of course not. Of course, no. I mean, they basically have been DMing me since the beginning, thanking me for having a sense of humor when they made fun of me. Oh, it's so good.

I loved it. I was like, this is the greatest marketing ever. So I was loving the marketing. But, you know, watching people who are first time fund managers talk about their markups, you know, and then, you know, I'm friends with Bill Gurley on the other side. And, you know, I'm playing cards with Bill and, you know, having a heart to heart with him. And he's like, well, you can't eat, you know, those unrealized games. Yeah. Yeah.

Yeah. that's just, you know, it's not going to be food on the table. When I was, I mean, I'm still a whippersnapper, but I don't know. I was a real whippersnapper. We met through the rover and dog vacate merger and all that. He told me once he's like, yeah, it's real easy to write the checks in venture. Real, real hard to cash the checks. I mean, and so that's where I'm getting nervous.

And then sometimes I see a company that we passed on investing at a $20 million valuation because they had $500K in revenue. And I was like, you know what? 40 times revenue, this doesn't seem like something that works for me because I do want to be able to exit and get a return for people. So we'll pass. And I had to stop telling people we're passing based on valuation because it was creating too many bad feelings with the Y Combinator cohorts who were just really running up their valuations and it made no logical sense. And so that is another thing that gets my blinking warning light going off is I'm watching other VC funds put money into Clubhouse at a billion. with 5 million downloads. Now, listen, I know it's a breakout, but they're paying $200 per...

We came on your show when they raised at $100 million evaluation. And that didn't make sense either. I mean, I would have made that bet. I would have made the bet at $100, but that didn't make much sense either. But does it make sense now? In a billion, it makes no sense. Do you think the company's worth $100 million now? Well, let's just talk logically. Five million people using it, or $5 million downloads was the last I heard. But it might be growing, you know, we don't know the growth rate. So if the $5 million number that got quoted last month is now 20 million, 20 million, and it's doubling every month. I don't know, you know, who knows what the doubling rate is, but let's just say it gets to,

in order to be worth, what is a Facebook user valued? Facebook has three billion users and they're valued at a billion? Yeah, let's see. Like 7,800 million, I think, or a billion. Yeah, so they're valued. I know their, their U.S. users are super valuable. Their U.S. users are like over $100 a year. Yeah.

Yeah. Yeah, they, wait, wait, Facebook is, um, three billion users and, uh, let's, let's, uh, let's make it easy. Let's say they're 900 billion market cap, which is, they're a little less, but then that would be, uh, 300 bucks a user, right? 3 billion times 900 is $30 a user. You're right. Yeah. $30 a user. Wait, no, I think it's 300. 300?

300. Three, three, there's three billion users and 900 billion market cap. It's a little less. Oh, they're not. over a trillion yet. Got it. Okay. Yeah. $3 billion. It's all billion. So I think you just divide $900 by $300.

Okay. I do know that Facebook's U.S. Arpoo is $147 a year. Damn. Internationally, it's like an order of magnitude less, but I do think Clubhouse is mostly domestic. So would you value Clubhouse users at $150 a year?

I mean, there's zero ad load, so it's all about potential future value. Yeah, I mean, potentially if people paid 10 bucks a, if some people paid for a pro account for 10 bucks a month, it could be. If they had advertising and these are just strategic valuations though. Like this is,

this is people are playing. And like look at, um, look at Snap right or or Twitter. Like it's, it's super hard to build the monetization on the, uh, engine on the back end of a social network.

Like, um, there's value in the users. There's a lot of value for sure. If they could monetize them. Yeah. There's really only two organizations that have built. a social,

that have built attention-based monetization advertising systems at scale, Facebook and Google. Nobody else has done it at scale. So let's assume they do it. And they have 20 million people right now. And let's say they get to $100 a person. Is it possible?

It's sort of a silly way. This is the wrong way to value this company. Or at least to answer the question, is a billion dollars high or low? The answer is, a billion dollars is either way too high or way too low. We don't know which yet. It might be way too high and the whole thing goes bust and they never figure out how to, like, really, they're going to get a billion dollars of future cash flows out of this thing.

That may never happen. But it could also be too low. Let's answer that when we get back. How would you monetize Clubhouse in order to fill in the valuation and make the investment decision if you were, if you did have the opportunity, let's phrase the question to me, if we all had the opportunity to invest at the billion dollars, how would we justify it in terms of the business model and what business model where we need to see deployed in revenue to make that happen when we get back on the swing startups. Do you ever wish you invested early in some of the best performing IPOs of 2019 and 2020? Well, our crowd investors did invest early in many of those awesome IPOs.

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go to Acquire.com. And there's $100 you can spend on the LP show and where they go super in debt. And they're going into debt doing it. It's just causing them. It's really expensive to produce. They're losing money on it. So please. Please subscribe for a hundred bucks and help them stem the losses. But it's really, really a great problem. Talking to the internet is so much is there so much marginal cost in there. All right. If there was a revenue model, what would the revenue model be? David? Advertising, subscription, merch.

I mean, well, I mean, I think there. Virtual currency. Yeah, I think you got to do, I think you do what Twitch is doing of advertising is probably the biggest, you know, look, traditional media. We just did a three-hour episode of the New York Times. We do tons of media businesses. Like, media businesses, rule of thumb is you make two-thirds to three-quarters of your money from advertising and one third to a quarter from circulation, subscription, whatever you want to

call it. That's what they should do here. I think that's what Twitch says, make a lot of money from advertising. And then you got tipping and subscription to individual channels. What would it even be like on Clubhouse? Would it be like when I go into a room, it plays an ad first before I'm allowed to go in? That would be super annoying. I don't think they should start with ads. I think the first experiment I would run is around something like TwitchBits, have a virtual currency system. that you, you know, in-app purchase to pay into, and then you can allocate those among creators. It's almost like you could do medium collapse, but the people actually get money out of them. So you can imagine someone, you know, going on a, you know, a diatribe or a monologue or however

you want to, you want to phrase it. And the room, you know, compensating them for making a really great point. And they take a spread on that. They take 30% of it. Just like Roblox, just like Twitch. You should also do, they should also do paid subscription rooms, just like we have paid subscription podcast, the LP show. That would be very interesting. I've heard Paul talk about like, hey, if Kevin Hart wanted to do a show, he could have a thousand fans for 20 bucks, make $20,000, sitting in his backyard, just riffing new material, or Chappelle does it for a hundred bucks, gets a thousand people, makes $100,000. Never has to turn their camera on. Never has to go to makeup, just like literally in the hot tub. You pay to go to the comedy club,

and they split that with the performers. Same deal here. But look, we got into this conversation because of valuation, I just want to make the point that like any sort of multiple of current users or valuing it based on, hey, well, this other social network is able to make X dollars off of them. So with this current user number or we're trying to do anything that even looks remotely like a discounted cash flow, the right way to value this is say, oh my gosh, this is one of the rare set of opportunities to create the next Facebook, Google type company. We now know that the market cap of those companies can be in the two trillion dollar range. And so you just say like, wow, this is my chance to get a rare ticket on to one of these. This company's growing as fast as Facebook was in its early days. And companies don't do that. And so like, it's the, it's already hitting that escape velocity thing. And you got to, you're just making a bet that the founders are going to figure out how to retain and do monetization well. But it's like a- You guys, let me ask a crazy question. You guys think, have you seen Twitter spaces pop up in your top app?

Yeah, I have. Okay. And have you seen it, David? I have not. Okay. I've seen it and I'm seeing it now every day I see it 50% of the time. And today for the first time I saw two or three going on at the same time. I also talked to the Twitter spaces person by DM and they're going to put me on it. But they specifically said, we want to put you on it. You're on our list. But you have 400,000 followers. We're limiting it to people with like under 200 or something because they don't want to break it. But I looked at it and I have to say, It's much more compelling to be on Twitter. Yeah, I agree. And then when the real dynamic that's incredible is, you click on somebody's profile, you go to their profile, and it minimizes the audio to the bottom, and then I'm reading your tweets.

And then I go to my replies, and I'm looking at my replies and trending topics and doom scrolling while listening. Are you still doom scrolling post-Trump? A little bit. We're still in COVID. You know what? I kind of delight scroll now.

I delight scroll like watching the impeachment and watching Biden do 2.2 million shots in a day. I've given up doom scrolling. I just delight scroll all night. All right. So Jason, all that behavior that you just described is literally exactly what I do on Clubhouse. The app still works great in the background. The only thing that's hard is for myself,

for me to take myself off of mute. I will say the way that I've thought about the delineation between Clubhouse and Twitter spaces right now is for Twitter spaces, it is only in the top bar for the people who are following me. So it is an opportunity to have a real-time live audio discussion with people that are already in my top of funnel as a creator. When you're on Clubhouse, there's way more opportunity to get exposure to people who aren't already in your ecosystem. So to me right now, at least, and if Twitter stays with the same mechanic, then Clubhouse will actually be a much better place to go and cultivate more exposure, whereas Twitter will be a better place to sort of deepen an existing relationship. Yeah, it's going to be interesting. because I love the feature of Twitter now where I could say people I mention or people I follow

can reply to certain tweets. And I use that sometimes when I just don't want to deal with trolls and whatnot. And I think that's going to be the powerful one. I want to be able to set up a room and say people I follow can join this or people who follow me already can join this. And I think that's going to be really powerful. But I would not go over to Clubhouse. I don't think if Twitter was working because I've already got a Nat scale network over here.

So I think that's going to be really interesting what the competitors are. I still think Clubhouse wins as the dedicated one. But if you look at stories, there's many more stories being consumed and shared on Facebook and Instagram than on Snapchat, the originator of that idea. Is that true? I assume it's true, yeah. Just because Instagram has such a broader reach. I mean, it ultimately was a grow-the-pie thing. It was a win-win for everyone because Snapchat's doing better than ever.

Instagram. I mean, it provided the new growth engine for Instagram when they were starting to taper off. but still, it could be true here too. I mean, my point is now with these at-scale services, the at-scale service can duplicate it and beat the original. I think is the kind of thing I noticed.

One as a creator, right, like your, your biggest fear. I mean, like, Facebook played this out for everybody. Everybody lives in fear of like,

oh, I go on a platform, I create an audience and then you, you gate me from my audience. Like, if you feel confident you've built a 400,000 person following on Twitter. You know, you feel pretty good.

Twitter's not going to algorithmically gate you. from them. You're still going to be able to reach them. You don't know what Clubhouse is going to do. That's the key, because I got blocked on Clubhouse because I sent a bunch of people to report these MLM scammers. And I was like, here's all these people selling coaching. That's a crazy sub story on Clubhouse, too, of like all the MLM stuff. God. It's so weird. Have you been in one of those rooms and listened to these people? I haven't, but I don't want to mention names, but there's like a J.T. Fox character who if you type J.T. Fox scam or J. J.T. Fox reviews. He's kind of like a, I don't know, somebody said to me he was like a poor man's

Tony Robbins or something and they sell these coaching things and they have these crazy bios and they were doing all of this like really hardcore coaching or telling people that were going to get seven or eight figures. And then all these people reported back to me that they charged 10 to $20,000. I don't know if JT does or other people do to be in a coaching session with them for 10 weeks or something on Facebook. This is like all those people that make money by teaching you how to run a really good Amazon third-party seller business. Basically, yes.

Yeah, or how to start a Shopify site and then, yeah. It's the same. And they're like, I've started 200, seven figure, eight figure, figure, nine-figure businesses. So I went on stage and they called me up. And I said, which one of those businesses can we look at right now and use? And they're like, oh, there's so many. I was like, well, which one's the number one that's made the most money you're most

proud of? And they kicked me out of the room. So then I came back to the room and M.C. Hammer was there and he's friendly with me and he put me back on the stage. I said, and the woman's like, well, here's how you do it. You do an $8,000 course, but then you tell people when you're on the phone with them that you'll give it to them for four. And then you tell them as long as they tell their friends about it and give you a testimonial and then you build trust with them. And she was literally teaching people how to convince people to take courses on creating more courses. It was really weird, dude. That's really where the money is. turtles all the way down. It's basically turtles all the way down. Wait, can we, so wait, we got to Clubhouse because we were talking about bubbles, and we got to bubbles because we were talking about Bitcoin. Can I pop us back up a little bit?

Yeah, pop us back up a level. All right. So I think you were originally asking the question around is, tell me about this Bitcoin bubble. Elon and everyone just piled in. Are they going to have the bottom drop out on them? And we started talking about this macroeconomic bubble. That's an interesting question. I didn't even consider, Ben. Oh, well, then I misinterpreted it in the first place, but I don't want to answer it. No, no, you made a point that's really interesting, Ben. What happens to Tesla if Bitcoin goes back down to $5,000 and they lose whatever that is,

80% of the bet and they lose a billion dollars. Yeah. Well, the first thing to know is that Tesla raised $12 billion in equity offerings last year. They did three different effectively, they're like IPOs. They basically said, hey, you can buy a bunch of new stock today, not from existing shareholders, but you can buy them from us, the company. And the price went up each time. Create more shares for you.

Which actually makes sense. I would defend that. But yeah. So, okay, there's this great, Jason, I'll link you so you can put this up here. There's this great graph that Bloomberg did of equity offerings done by Tesla over the years. Basically always sort of zero billion, one billion, maybe two billion. And then in 2020, they did $12 billion of equity offerings. So of course they should do that because people were.

bidding up their stock, they now have this, you could call it overpriced, you could call it very highly valued currency in their stock. Fully valued is the term of art, I think now fully valued. When you go on CNBC, you can say the market is fully valued. That's great. I'll take an intro to CNBC whenever you're ready, and I will tell them how fully valued GME is. So 2020, they do the responsible thing that you should do as a CEO of fiduciary responsibility. They are like, hey, this is a great fundraising opportunity.

Our stock is really high that we should do this. So they do it. They get 12 billion of cash on the balance sheet. It's now up closer to 20 billion because the business is great. It's making money. And so of course they put some of that in Bitcoin. So in some ways, it's like, well, if it all, I'm not going to quite make the argument that like, oh, it's all house money anyway. So if it all goes to zero, it all goes to zero.

But it is Bitcoin that has been bought by very shortly after converted equity value from the company, which is sort of, it's like you kind of have to wrap your mind around that. but I don't think, I mean, we're at this point where it feels like enough institutions, enough financial institutions, public companies, square, cash, there's insurance companies that are doing it, are plowing into Bitcoin, where you're not looking around and seeing like a bunch of internet cowboys looking at you and being like, yeah, Bitcoin, you're seeing like robust financial institutions looking at you and being like, we are participating in this monetary ecosystem. And so, sure, the price is going to go down, maybe dramatically, but at, at, at, there's enough sort of stability to find a relatively high bottom at this point, or at least

that's sort of how I think about it, because there's a bunch of institutional, sort of like, support. Support. That's a great way to put it. Yeah. I mean, I think that was the thing that when I saw Elon buy that big position, I was like, even if I didn't believe in it before, there's a certain manifest destiny here where if enough people buy into this, it is that.

But now he could also clear his position. That's what currency is, baby. Yeah. But what if he clears his position, he decides, you know what? I'm just going to take the profits and I want to be in U.S. currency again. Then what happens? Because Lord knows they move the market. You know, they piled in by the time they announced here, they're already up $600 million.

So, David, should we all put our money in Bitcoin? Yes or no. Go ahead, David. Should we all put our money? Let me ask you questions, David. Here's how our phrase. We should all have some exposure to Bitcoin. Everybody should have some exposure.

Yes. If a sibling came to you, and let's just say, or a cousin, whatever, they're just a blue collar average person, you know, they got two kids, a mortgage, whatever. And they say, you know, I got 100K in my 401k. I got, you know, two or 300k in the house. So I put my net worth at a half million dollars. I want to put 50k into Bitcoin, 10%. Do you say, what do you say to that? It's 50k of net worth is half a million, but liquidity of 100K. What do you say to them? They say, I love crypto.

I'd say that's, I would say that that's like maybe at the edge of okay, but I think that's okay. Wow. For what's not investment advice, personally, I have about 15% of my network. Wow. Mostly Bitcoin, some, some ether, a couple of small positions in other crypto. What would you do, Ben, in the same situation? Your cousin, brother, sister, uncle comes to you and says, I want to put 10% of my net worth

in this. That level of exposure feels a little high to me, but what I would definitely say is divided into five chunks. You want to put 50K in, great. Put 10K into 10 different piles in your mental buckets and then wait for Bitcoin to drop a certain amount, like dollar cost average it in. So every time the value of Bitcoin falls 5%, go buy 2K or 10K. you know, and think about, you know, buying mini dips along the way and you make it screwed and, you know, it may be at 100K by the time you put your fifth tranche in, but you may also save yourself a huge headache and sort of danger on the way down.

That's the thing I'm wondering here is, does this have escape velocity now like Clubhouse? And do, does it ever go back down? Right. Could. Now these guys are saying 250, 500K. And I'm like, that doesn't make any sense. But I didn't, when it was trading at 3 or 4,000, I was like, be careful people. Like, this could. go to zero. It's greed versus fear, baby. I mean, it's like, and fear and fear happens fast and appetite for risk evaporates very quickly. And so, you know, I think, um, whereas the early people who were piling in, if it starts plummeting, might look at and go, oh my God, I got to, I got to realize my gains. I got to get my money out, which of course causes the, the theoretical bank run. The later players that are in are institutional. I mean, they're in it for a long term. They have a thesis. There's a, they're hedging against cash in a way, right?

Like, they think cash is going to go down. How I would advise a non-tech savvy relative. I think the first question before you decide on percentage allocation is, what are your forecasted liquidity needs for the next X number of years? Don't need anything for 20 years. Yeah. Four years old. I'm retiring in 25.

I need a little bit for my kids college, but not. 10, 15, 20 percent. Sounds great. we have for the first time a new feature. This new feature we're going to do is called Mount Rushmore of tech CEOs, and we're doing this in a snake draft. I don't play fantasy football, but I do know what makes for a great CEO of a tech company.

We are going to pick our Mount Rushmore's, but we're doing it based upon a snake draft. What that means is David gets to go first. We did this according to net worth. David's going to go first. We did it according to allocation into Bitcoin. Assets, assets under management. So David goes from

I'm joking. I'm not joking. Love it. So anyway, David's going to pick first. We're doing reverse assets under management. Oh, here we go. Yes. So David is first, then Ben,

and then J-Cal goes as the third pick. But because it's a snake draft, first is David, second is Ben, third is J-Cal. Fourth is J-Cal, fifth is Ben, six is David. So David gets the first and sixth. I get the third and fourth. Ben gets the second and the fifth.

So theoretically, this should equal out. So David, we have a list. And then when we get to our Mount Rushmore's, we're going to let the audience decide who pick the best for, who's got the best Mount Rushmore. Whoever wins is going to get a cyber truck. Okay, here we go. Oh, yeah.

You're not just picking Ben on market cap. I know how Ben thinks. If it's already big, it's going to get bigger. There's no bubble. Everything goes up. Stonks go up. Bitcoin goes up. Ben's just, he just momentum trading all day long.

All day long. You're going to pick from the goats. And not only are you going to pick from the goats. We also have a pool of candidates who would be best described as the next generation or the up-and-comers. So we have a list here. While Jason's pulling up his list, I think we need to discuss agree, agree as a group on what the criteria are for like our, because I think that I could think of three different criteria to qualify for being on Mount Rushmore.

Most want to invest in? Well, so I was thinking, most want to invest in like, oh, how good are you as a capital allocator? Okay. I'm invested in you. I feel good that you're going to compound my capital over a long period of time. Got it. Okay, that's one. Are we going to keep this in the show?

we're going to keep this in the show, right? Our debate. I sure hope so. Sure. How are people going to grade our performance? Yeah. So you believe, David, how good they are, if you were going to give them a billion dollars, would they deploy it and get a great return?

I like that. That's a good way to do it. Okay. Would you get me 30% plus IRAs over a decade plus? Love it. Okay. That's one. Second criteria, completely different.

Would you want to work for them? It may even be some anti-correlation. And then you went with. a culture. Yeah, like how good a leader are you? Okay, yeah. People want to work for you. Okay, talent that they draw talent.

Okay, so we got the scoreboard on returns. We got, are they a great culture leader? Do you people want to work for them? Okay. And I think maybe I would submit for consideration by the group a third criteria, which is how good for society slash the world is what they're doing. Jesus, who cares about that? We just, okay, okay, screw that.

When we're talking about Mount Rushmore here. Weaker and weaker. It's like scoreboard, then how good do they make the players around them? And then how good are they for society? I actually, I love the third. It's just a very different. Like, I don't know how to, I don't know how to factor. I don't know how you weight these things, you know, because they, in some ways,

we're literally talking about carbon faces in stone here. You got to wait. That's true. Okay. We could kill number three. I like your general one. Ben, do you have anything you would tweak about that? No, Rosenthal is good at these criteria.

He came up with the ones for. for our best acquisitions of all time. And that was a good. It's a good set. I like it. I think I can go with it. I think I can roll with that. I mean,

I do think another one is if you put them in charge of another famous company, how would they do with it? So if you were going to put them in charge of Disney. Yeah, translatable performance. Who would run it better than cook, Iger, or Bezos?

There's been a bunch of studies done on this. I can't remember what book it was in, but one of the sort of hot tech circuit books. Good to grade. Built to last kind of thing. Where like, and they tested it outside of tech too. One of the examples was like, you take a surgeon out of an ER and you put them in a different hospital's ER, and they go from like zero fatalities over five years to like 10 fatalities that year. Really?

And like all investment banking was another one. You take even this IC analyst and you move them to a different team, even though it's a pretty individual sport and way worse. So it's, I think people always. overestimate how transferable talent is between organizations. All right, here we go. So we're going to pick from the goat pool, two from the goat, and then two from the futures pool.

Futures being people we think will be incredible going forward, goats being, they've already established themselves. But you don't have to do two and then two. You could do one, one, one, one, one, or two, you pick how you want to go. So there was a little strategy here. David, pick your first choice. I'm going first.

Not surprising, non-controversial, but I totally believe it. The recently retired Jeff Bezos taking him with my first pick. He's the LeBron. He's the LeBron or the Jordan. All right. Well, you said, or the Jordan.

Yeah. So that means there's two. Well, okay. What do you think, Ben? You're up next. You're up next. It's a tough one. It's a tough one.

Remember, I pick two. I'm going to go, and I'm going to steal David's number two, because he stole my number one, and I'm going to go Pony Ma from Tencent. Oh, damn. Wow. That is kind of explain your thinking there. Tencent is an absolute juggernaut, and it is not just because they are the owner of WeChat that has 1.2 billion users.

They are invested in like every successful Chinese sort of unicorn next generation company, not every, but a tremendous amount, like 5 to 10 percent positions in these companies, and tons of U.S. companies, Tesla, Riot Games. David, what am I missing here? Epic. Snap. Certainly by criteria number one of capital allocation. It's a pretty crazy one.

Now I get to pick two. This gets really interesting here because I could just take the top two of the futures pool right off the table right now. You could, but will you? However, this is a pretty easy decision for me. Looking at it, as great as Larry Page did and as much success as Zuckerberg had,

Zuckerberg, I think is on the downward trajectory and I don't think he ever made anything in his life that was unique to him. I don't think he's a creator. I think he's a thief. I think he's good at copying shit. So I would never include him in my Mount Rush, right? I think he's a disgraciad.

Larry Page is brilliant, but he got out of the game. Where's Larry Page? Nobody knows where Larry Page is. Could argue, though, that that was brilliant. Right. He's not in front of Congress, which is awesome. That's brilliant, but I don't think these guys are in the game. Now, Bob Iger, we both know, did a great job pulling together the Disney assets.

But he's a suit who did. did a good shepherding, what I think is important is your ability to make transcendent products in the world. And the huge mistake that you guys made is that you left. This is why I'm going to win at Mount Rushmore. It's because you too got cute. You got cute. You picked Bezos an obvious choice.

Yeah, I know where you're going. But he's out of the game. And then you went with a wild card, Ben, and you didn't know I was going to. going to pick up too. And I am picking up Steve Jobs, who made the most beautiful product in the history of all products, the iPhone. Literally, the most important product in humanity in the last hundred years is the iPhone. And you, too, got cute and you did not give Steve Jobs proper respect. And he's on my Mount Rushmore now. And boy, do you two look silly. Because now I'm taking Elon Musk off the table who is not 50 years old yet. He's not even 50. He's in the goat and the future.

He is a worker. So you guys got cute. You thought you, you know, use your little chest moves, try to pin me down with a little bishop queen pin. And then you left. You left for me. Musk and jobs. This is like me taking Steph Curry. ahead of the Knicks at number seven. I now have on my Mount Rushmore, on either side, Steve Jobs and Elon Musk, please try and catch up.

You got the Splash Brothers. Oh, that Musk pick. That hurts. That hurts. Go ahead, Ben. See if you can salvage your Mount Rushmore, which is crumbling before our very eyes. One thing on Musk before you.

We got to give credit to Musk. Not only Tesla, not only SpaceX, PayPal. too. Like, this guy has hit the trifecta. He's not even 50 years old. And what if boring company or the thing in your brain works? I mean, Jesus, come on. And what if Starlink spins out and becomes worth $100 billion? I mean, that's a possibility too. Who, it should not spin out, but it is an amazing business line. Okay, boys. Right now you're feeling pretty dejected and defeated. Go ahead, Ben. See if you can salvage your Mount Rushmore. You got two picks in a row. You can just sit here

with us each having only one pick on our Rushmore. You could have picked either of those too. You two could have taken those off the board. And you didn't. So you're saying if you had the next 20 years to bet on, you don't think it's wise to bet on China. Listen, we're talking about Mount Rushmore here. You're right now, all of a sudden,

regretting your life decisions, Ben, and you have the next pick. You're on the clock. All right. So let's just see if you can salvage this. Because I like a wild card, the crowd went crazy when you picked that wild card. We just don't know if that's going to make you lose the cyber truck.

Which right now I'm thinking about putting the cyber truck on because I just ran the table on you too. All right. Come on, boys. Try to salvage this. Go ahead, Ben. So I'm a little bit afraid that your audience like me is too young to have seen the dominance of this CEO in his heyday. But I'm picking Bill Gates. Of course. And I don't just want to talk about, you know, the fact that, you know, Microsoft has become top three most valuable companies in the world or the fact that not only did he make over $100 billion personally, that he's giving it all away, I think the thing that is important to talk about here is the discovery. I don't know if it's an invention or discovery of the greatest business model in the world, which is software.

like platforms. I think that had Bill Gates weathered the internet, he would have been my number one pick. But he didn't, he didn't mean, software over the internet

is the true best business model of all time. But the world's riches were flown in on 747s to Redmond Washington to buy copies of Windows and office for decades. Unbelievable.

Yeah. And it, I mean, truly, truly pioneering. David, we have to give him some props because you said also, good for humanity. I think we have to take his philanthropic efforts and we have to put him equally up there. So it does make the Bezos selection and the Bill Gates selections even more

powerful because what if they do in the nonprofit sector, if Bezos does what Bill Gates did? Because if you were to argue, Ben, Gates is post-Microsoft impact on the world versus pre-mic, you know, during Microsoft. That's got to be a jump ball now, right? I think his impact in the world is greater with the foundation. Yeah. All right. This is getting a little heated here. I think the,

but yeah, Bezos is, the book is not done on Bezos. I think either at Amazon or in the rest of his life. Oh, you think he could come back? You think it's a round trip? Oh, no,

I don't think he comes back as a CEO. I think he will just continue to exert influence on Amazon. He's taking a break. He still owns like 20% of the company, or 10% after his divorce. What if Bezos is taking a break? What if he's just burnt out and wants to take a five-year sabbat? What if he comes back at 62?

I never thought about, has anybody even brought that up, Ben? The possibility that he would come back? Are you saying come back to Amazon or come back with something new? I didn't even think about him starting Amazon 2.0 or starting another company and being an entrepreneur. That's crazy to even think about. Yeah, it's hard to imagine he would be an entrepreneur again. I mean, I think he's going to pile in behind. But maybe with his focus on blue, I mean, you could imagine Blue Origin becoming a, you know.

SpaceX contemporary. Yeah. David, you're back on the clock here. Who? And I have two picks this time? I think right now, you've got a strong anchor

in Jeff Bezos. Are you going to go with the goats? Are you going to go with the futures pool now? Because this is a really good decision. I'm tempted by the futures pool here. I know,

I can tell. I'm watching you stand down on the notion page. I see you're looking down, not up. I know. I know. I know.

I'm probably scrolling down right now, looking at Toby from Shopify or Daniel Eck from Spotify. All right. I'm, I'm going to be controversial. This has gotten a little tense. I'm going to ratchet it up a little bit here.

Uh-oh. Here we go. Okay. Taking Chamath with my second pick. I'm taking him off the board. You're taking my... I'm taking your bestie. You took my bestie?

You just came out of so hard with Jobs and Elon there. I was going to introduce a rule that he wasn't allowed to take Chamath. So I'm glad you took him off the table before I had to introduce that. That was going to be my... I was going to be my little chip there, getting Chamath on my wall. So now you got Chmachma. And partially, of course, to tweak Jason is why I did that. But, uh, it was pretty good.

But, you know, we're Chumop. I mean. But David's back on the clock for a double. We can't like, his calls, you can't argue with the track record over the past 10 years. Track record is so strong. Yeah. And he's so young. I mean, he's not 50 yet either.

I mean, clearly you get to pick a second one. You're doubled up here. Okay. Uh, double up. While we're on the Chmoth subject, uh, Jason, this is probably a pretty good time for us to say, David and I were talking about, uh, about this beforehand. you have built something awesome in all in. Like, I get so much entertainment and,

and, like, true value out of listening. Like, from the minute the theme song hits all the way till the end, it's like, it's amazing. When the theme song comes back in, that's just, it's so good. Honestly, it's my favorite podcast right now. Like, you guys are crushing it. We know how hard it is in this game. Shout out Young Spielberg.

Shout out Young Spielberg. Can't give you enough props. You guys are doing great. I don't know what you guys thought of the GME episode. I'm sorry, the Vlad episode, but it was very polarizing. And I have to say, it literally, the drama, I'm going to say this. Wait, the episode where you were just hyping your own book the whole time or no? Well, I mean, I'm defending my guy, which of course is my role.

But I thought I laid back and let them do it. But they didn't want to go for the jugular. They were, people wanted blood, right? Like I think literally the GME, Wall Street Betts people wanted Chamoth to say you should go to jail to him. And I think it's very hard to do that on the phone with somebody when you're interviewing them. And I think it, I don't know if interviews are the right thing for us to do on the pod.

I'll be totally honest. Although, Jermon was great. Yeah, yeah. The surprise call-in is pretty good. Yeah. Okay.

You could go with call-ins, but not like hard-hitting interviews. And we can tell you, too, as a dual co-host team, it's hard for us to interview one person. I can't imagine four people trying to. It doesn't work. It just, it is crowded. Yeah.

So anyway, that was the big debate to go behind the scenes. But thank you for that. It's, uh, I think it's one of the important thing. You guys have such a good flow. Agreed. Yeah. It's, it definitely falls into the category of try things.

Like Chimot said, I want to do a podcast with you. And I was like, okay, sure. And, um, this is after Kara Swisher and Jim Bankoff will deny this over at Vox. But Kara Swisher's like, number one and number two choices was not Professor Galloway.

It was Chimoth or me. Whoa. So they couldn't get me or Chmoth. They couldn't get me in Chmoth. So they went with Professor G. And you see how Kara struggles with him. I mean, to. Well, I mean, if you compare the Chmoth's

amazing capital allocation over the past 10 years, which is mostly why I put him on my Mount Rushmore, secondarily to tweak you, but I thought you were to work for that. G, it's, ooh, that's Ralph. We should make, okay, I got it for our next hit together, boys. We're going to do the anti-mount Rushmore, the four worst capital allocators, the four worst people.

And then we could really get gnarly. Oh, that's going to be fun. Man, oh my God, the worst in tech. Which is kind of weird, because I'll be on that list. Why? Most people would put me on that list. Well, the question is, what's the biggest company ever to go to zero? who is at the helm.

Oh my lord. Well, I mean, was it Enron? Yeah, I mean, I think, you know, Theranos, but that wasn't horrible. No, it was, what, $10 billion or just people who are bad?

No, I think, bad, like, for Mount Rushmore is destroying value. Like, Theranos was a fraud. Like, it's just, it didn't, there was no value. But it did get to,

no, it got to a unicorn status, so they did destroy that. The people put the money and it's just destroying money. It's not like, there was something great, and Elizabeth Holmes, like, killed it. Yeah,

it's imaginary value. A cheap version of Bitcoin. Okay, let's keep going. David, another choice. Okay. Next pick. Shout out Professor Coltakes. Oh, not Prof.

So many Coltakes. Oh, so ice, ice cold. I just came, I was in Texas during this craziness. I literally just got off a plane a couple hours ago. Really? Oh, so you're saying Prof. Prof G went to Texas and caused that ice storm? It was, I spent last night with no water, no heat in 20 degrees.

This is what happens when Prof G. That's Prop G. Visit Prof G went to Texas with his cold takes. Go ahead, David. Okay. You're doing good now. I think Bezos Chamoth is a surprisingly compelling Mount Rushmore. Yeah.

And then I'm going to, I'm really, I'm swinging around totally different style, taking Andy Grove as my next pick. Oh, wow. Look at Ben. So dejected. I'm just looking at, now you're easy to beat. Like, oh, okay. Come at me.

Oh, how is Intel doing now, David? Did I just crack the aquarium? Andy Grove has been dead since like 2002. You guys breaking up. The real measure of a CEO is how the institution survives you, which why, you know, my pick of Bill Gates is clearly wildly superior based on the succession plan. Okay, it didn't survive him too well immediately after he left. Whereas Andy Grove, he left Intel and that thing kept going,

displayed boneheaded decisions for a long, long, long time. But Bomber did print money. I look at Bomber and Tim Cook as like, they just extracted all the value of the previous person's vision. Oh, you got to give Tim Cook more credit than that. They just ring it out. Tim Cook's like, you know what? You realize AirPods alone is a Fortune 500 company,

which was launched with Tim Cook. The Apple Watch alone. It's an accessory. Apple Watch is exactly the same way. Also a Fortune 500 company. Also garbage. Garbage product. AirPod's great product.

Watch is garbage. Oh, you don't like Apple Watch? You have to charge that thing every day? It doesn't work. Do you have the latest ones? No, but I'm thinking about trying it again. I try the do, I got the SE.

It's great. And now it's up to six. I probably should try again. Get the SE if you don't, like, unless you want the always on screen, which, you know, I actually view that as a bug, not a feature.

I don't want to know what the time is all the time. The SE, it's great. It's cheap. Battery lasts a long time. Get sleep tracking. It's great. But it doesn't give you the other. stuff like you're having a heart attack. Okay. No, but if you're worried about having a heart attack.

At my advanced age, I need the one that tells me if I'm having a heart attack because, you know, with with this Robin Hood IPO, it's going one or two, right? I don't know. We need that heart attack. My God, is that company going to be. You need life alert. I need a life alert. I've fallen and my stock can't get up. I think it's going to be a tremendous one. But okay, here we go. Ben, you're back on the clock. You've got your Bill Gates and Pony Ma. Very controversial second pick, but a very solid fifth

pick, I will say. Gates was going to be a, would have been on my short list if Steve Jobs or Elon weren't available. But go ahead. What do you got, Ben? Because now you're going to futures pool. Correct. Yeah. I'm in the emerging managers category for our capital allocation.

Yes. I am going to move out of the world of pure bits and into the world of Adams here a little bit. And I'm going to go Katrina Lake from Stitchvick. God damn it. You guys just did two of my picks.

That was going to be my final two. I was going to do Chimoth and Katrina. God damn you guys. Tell me why. You got to have a draft board strategy. I knew she'd slurred it so strong and now I'm just getting, you guys are running the table now late in the game.

Why Katrina from Stitchvitz? Because obviously it's an $8 billion company. It's a fraction of the size of some of the other emerging. Because we have on the emerging board, We also have Airbnb. We also have Stripe. We also have Shopify. I mean, we got a lot going on here.

So, one, this is an $8 billion company that a year ago was a $1.5 billion company. So you got to have some R.OIC credit here as someone managing capital and just doing an unbelievable job compounding the base, building value, getting the shareholders excited. I think this company is like perfectly positioned to just explode out of COVID. And I think that weathering the storm that the way that they have and then the way that all of us are going to go finally buy new clothes and we've completely forgotten how to do that and show up to an office. I know because we, the three of us, people don't know this, but we got a Coachella house together and we all need outfits. Oh yeah, we're doing this live.

We're actually in Coachella live at a. I'm so YOLO right now. I'm going to tell you guys, Jason, I know you want to be. back with people, I was just on two packed planes. It's awful. It's the most terrifying thing I've ever done in my life. I can't wait to go to Tokyo with a packed plane. I can't wait to go to Shinjingu-Satian, go to Kyoto.

I want to go everywhere. I'm fucking losing my mind. Got people with masks down around their like chin. It's awful. So now it's on me. You know, built to last is a big part of this. I think you got to be built to last. You know, Jeff Lawson at Twilio, he's young and he's been buying up assets.

great Seattle CEO. Yeah, really interesting. Bumble joining this pack out of nowhere. That's an interesting one. But then you start... Hot out of the gates and a $9 billion valuation just after IPO. And you gotta wonder, like, my God, I mean, because she was one of the co-founders of Tinder, right? And she

kind of got, well, like literally harassed there, according to reports. Unbelievable story of overcoming adversity to be one of the most wildly successful. Pretty great, right? Yeah. So she's a great pick. But, you know, when you start looking at the top of this list, you know, there's a couple of

businesses that I think are truly unique. And Zoom isn't one of them. Zoom is great. Hot fire. But that product itself, you know, he came from where WebEx or go-to meeting or something. He came from one of those places and he built a better version. I appreciate that. And it's certainly a big company in the company of the moment.

But I like. You're going heavy on product here. You got jobs, you got Musk. I just think product is how I made all my money, Ben. If I bet on the product. And so I am a creature of my previous success. And I think I'm going to narrow it down now because I have two picks and I'm going to be done. When I look at the unique products on the list, Shopify, Spotify, and Airbnb are very unique products that did not exist in the world before those people went after them.

And so those are the three I'm narrowing down from. This is very hard because all three of those are incredible. All three founders, incredible. E-commerce is just getting started, but then so is audio and so is Airbnb. Let's be honest, I've had Shopify on the pod. I've had Spotify on the pod. I still can't hear you over all the flexing. But Airbnb, you know, Brian said he would come on the pod.

Well, we've done episodes on all three of those companies. So. But I had Toby on. He's going to come on again. This is a really hard one for me. I got to pick Spotify, locking in Spotify, because that makes it really easy for me. I have to lock in Spotify.

I'm sorry, Shopify. Shopify. They're very similar. I have to lock in Shopify. I store your reactions and then I changed it. Whoa. So unfair. It's like going like, I fold.

You are on poker flare. You're trying to. I'm all in. I fold. I call. You want to know our hands. I got to go with Shopify because it's the biggest. And it's,

e-commerce is just still in the second inning, right? We're so early. So then it just leaves me with Airbnb and Spotify. And I'm going to do a coin toss here. So hard to me. You take the two fives? Well, here's the thing. I am an audiophile.

So my personal interest is with Spotify. But on a business level, I think Airbnb is a bigger opportunity. It's a fantastic business. Product. Very hard for me. I'm going to go Airbnb. I'm going to go to Airbnb.

So, wait, you're not going Airbnb. You're going Brian Chesky as your great capital allocator. I'm going Brian Chesney. Correct. I think what Brian has built has been incredible. Now, you might think he's a one trick pony. He did one thing, but I think both of these are, this is the futures board, right? This is the futures board.

Both of those folks have raised a ton of, of money and they've created a ton of value. They both created over $100 billion of value in 10 years. Spotify has created whatever 60-70, so I think it's legit. I struggled over this decision. Ben, you're up. I just watched you not pick Patrick Collison. And I'm just wondering, like, what was the matter with? Like, did you not see him on there or like, there's some kind of, and I think, was that correct that you picked Brian Chesky as someone that you would rather park into a business to allocate capital than Patrick Collison? Listen, they're both tremendous.

I just think there is some magic about what Brian built with Airbnb. I'm not saying there's not magic. This is a really hard decision. I mean, we're talking about Michael Jordan and Bird and just incredible players. This is obviously an imperfect process. And I'm willing to go imperfect because I do think Airbnb will be a trillion-dollar company. Ooh, that's a take right there. Wow.

I just thought, I think Airbnb is just getting started. I'll be totally honest. You think Airbnb is going to be a trillion-dollar company? company before Stripe will. I think it'll be a horse race between all three of those choices. All right. We should make a long bet on this. Patrick and Brian, I think those are all, you know.

And, you know, if Travis was here, I obviously would have picked him for Uber, but he's not here. So it's kind of hard. Okay, but you're picking Patrick. That's a really good choice. 100%. You could write in Travis if you think he's got another act. Oh, I could. You're right.

Actually, can I do that? That's an easy one for me. I would put Travis in instead of Brian. Can I change it or no? It is your show. but you heard me be critical of your pick and now you're trying to walk this one back too. You think I'm trying to walk back, Brian?

I think it's fair. I think you can, well, because it's like, you know, Travis's a controversial pick, right? Like,

there's not. I wanted to pick a controversial one. And I, if you were to pick Travis is the justification, what he's, his body of work thus far, or his future potential. It's both.

I mean, you have Uber at over $100 billion right now. And you have Cloud Kitchens at $6 billion. Hmm. Do you still hold Uber stock? Yes. I still own, yes, a lot. I mean, technically speaking, I probably shouldn't own this much as a percentage of my net worth, but I still believe in the company.

I mean, it's so obvious that it's an anti-fragile company now. If you stay home, they win. If you go out, they win. So just theoretically. And then this whole idea that like Bezos is leaving Amazon, but then there's all these stores that are reopening. and now they're doing this idea that every store's inventory is on Uber Eats and Postmates. So if I want wine. I'll take this bed all day.

This whole thing that like Uber Eats and DoorDash are both diversifying out of food and into effectively competing with Amazon's Prime Now offering, I'll take Amazon all day. I think there is obviously Amazon is just great at what they do. But last mile, I don't know, man. You got to think of the size of the network and then think, been about all the local stores trying to compete with Amazon saying, I'm just going to put my inventory on these things. And it's just a very lightweight model like Spotify's. I'm sorry, like Shopify's, where Shopify is benefiting from all this creativity out there. And then they become the platform. Uber eats or an Uber delivery as the platform. And then anybody's store.

So if there's a store that sells pencils and stationery, they're on there and you can get it within an hour. If I want to order stationary and I need it tonight, am I going to wait for two days on Amazon or one day or just go on Uber, I might use Uber for some things. All right. So are you switching your pick? I'm switching Brian to TK if you guys will allow it. We'll allow it. I'll allow it.

I think we all know your mouth rush to more has these caveats all over it, but we're allowing it. We just know it's like the 94 baseball season. Anyway, so all I'm doing is putting Brian back in the pool for David, which I think maybe Ben, you're scared that that gives David an edge because he's going to take it now. Because I think Dave was trying to talk me to putting TK on there so that he could take Brian. Yes.

I am very sure that David was trying to pick, right, I think David is trying, I think, I'm going to predict David's pick. I think he's picking Whitney. Oh, what do you think? I think you pick at Whitney.

You seem a little enamored, I'll be honest. Who am I picking? Whitney from Bumble. Whitney. Oh, no, I don't know enough about the dating business.

So then met my wife when I was 21 years old before any of this. Yeah. You're going with Eric, a Zoom? I can't figure you out. Bingo. Okay.

Eric and Zoom. Why? Lots of reasons. Let's just take specific to Eric. He's, I believe, don't quote me on this because I might be wrong, but I believe he's the number one Glassdoor, CEO, highly ranked leader in the world. That is why he put that thing in the grading criteria because he knew that he had a shoe in for it. Hey, don't let me make the rules.

Great. You let me make the rules. Oh, yeah. And suicide queens are now why. because I have one. Okay, great. The Suicide Queen's Wild because you got it. Okay.

This competition has Ben Gilbert. It has David Rosenthal asterisk and Jason Cali-Kanis asterisk. I mean, but like who knows who's going to win. I think most people would argue my pick of Travis diminishes my Mount Rushmore because people were not fun. No, I like it. You're taking risk. You're thinking long term.

Well, let's recap here. Wait, wait, wait, wait, wait, wait. One more on. I want to put a word in for my, for Eric, of course. He's created Zoom the most existential product of the past year. But even before that, he was number one to rank CEO for years before that running. I think he's a very, very good capital allocator. Zoom consumed like something ridiculous, like a million, two million dollars of venture capital.

They raised more than that, but they didn't consume any of it on route to a hugely free cash flow positive IPO. But then the, um, the, um, the big. thing is I think this rounds out my portfolio. If you look at my portfolio, we got capital allocation covered. Bezos, what more can you say? Chimoth, I got all the upside that Chimaz got for the rest of his career on capital allocation. Then I've got good for good for the world and a great leader, Andy Grove. I mean, he wrote the book for Silicon Valley. Like, Andy Grove isn't as magnanimous as he was. An incredible story, immigrant from Hungary, survived by I respect your choices.

And then I've got the leader. David was here building a portfolio. I'm building a portfolio because we're going to get ranked on our portfolio. Pretty good. Ben, you want to recap yours? Yeah. So my first pick was Pony Ma from Tencent. And then Bill Gates, legendary CEO, Microsoft and the co-founder of the Bill

and Melinda Gates Foundation, the greatest charity known to mankind. What was my next? Oh, Katrina Lake from Stitch Fix. and then we rounded it out with Patrick Collison, both of those last picks unbelievably slipped through and were available for me. Amazing. And I had obviously Elon and Jobs,

the two greatest creators, I think, of our generation. Toby with Shopify, kind of a dark horse there in terms of Canadian. People don't even understand what that business is or know the name Shopify, even though they use it all the time. That was a super good one you swapped in. Yeah.

And then I swapped in TK. And, you know, people don't understand how well Cloud Kitchens is doing because they literally do zero press. there you cannot find a story about Travis. You can find one about his apartment in Manhattan being used for a party during COVID, which he wasn't at, and somebody had people over and somebody gnarced or dropped a dime on them

for having 10 people in a room. But other than that, he's pretty quiet, right? No press is his new rule. He will not talk to the press, just like many other people are not talking to the press these days, because they see it as downside, not upside. And he's just staying focused.

And man, I think when the numbers for Cloud Kitchens, come out. I'll make a prediction right here. I think Cloud Kitchen's in Uber. I think they're going to merge. And I think TK.K. becomes back. And Uber and Cloud Kitchens becomes one thing. I was going to ask if you think, I mean, you took jobs with your number one pick. Do you think that's where we're headed? Yeah, I think it's going to be a job situation. I think, you know, it's, it's would be if Uber sees Uber eats as like a big part of this and there's this giant footprint of real estate that are Cloud Kitchens right now owned by Travis, I don't know that.

this, who's the guy, Mr. Beast or whatever, doing the burgers? Unbelievable. That thing seemed to, I don't know how they did that, and I don't know that Cloud Kitchens did it or how they did it, but it felt Cloud Kitchens-esque in its ability to roll out. So he found people who were running burger joints to do his recipe and ship them. Is that how it worked? I don't think they were running burger joints. I think it was stood up in these ghost kitchens.

So he basically, I'm guessing, did this. with cloud kitchens. I don't know that. Overnight National Rollout, the brand. It's so interesting. It's like you're plugging in a food stack to an influencer. It's like he already had the audience and he just plugged in an ordering system, which is all digital

plus the infrastructure for the food, which existed in a ghost kitchen. I don't know if it was exactly cloud kitchens, but I mean, what if a rapper comes out and you know, if Jay-Z or Beyonce, Jay-Z and Beyonce say, hey, this is our favorite recipe for X. This is our favorite breast, this is our favorite

whatever, and they make their sandwich. And it's the Beyonce and Jay Z burger, you know, or pizza, whatever it is that they love from Italy. Oh my Lord. You know, and then, forget it. Celebrity chefs. I mean, just think of them as distribution. David Chang's, why is he starting restaurants when he could just start David Chang's short

rib? We're talking about it. It's, it's AWS for the real world. I mean, my brother-in-law works for a great analogy. What a great analogy. Which is a slightly different model. doing so they're not in the exact same space as cloud kitchens despite also having come out of reber but um this space is so strategic and like even before coronavirus but post coronavirus

world like this is um we are only just scratching the surface of the innovation to come yeah i mean i think looking at what happened with milk delivery back in the day where milk was just dropped off every day the idea that you would go get your milk or your ice like it was dropped off it was easier and then if you go to korea jajimyan or other noodles or whatever get dropped off and there's just somebody who does a run, bento boxes in Japan. I think we're kind of catching up in America

that food delivery at scale can be a thing, right? And it can work really well. We happen to have a country that is more spread out in some cases. All right, this has been amazing. Of course, mine, jobs, Elon, Toby, TK. I think I got a shot at winning here.

But honestly, I was off to a strong start and I'm not sure. I think you guys may have caught up a little bit. It's your choice, everybody. go to our Twitter handles and we'll be running polls and seeing who wins. All right, everybody,

we'll see you next time. Go sign up for Acquired.fm. Write a nice review. Give them a Hyundai for their special Acquired FM LP show. You don't need to give us a Hyundai. The main show's free.

And I'll give a quick plug. If you're an all-in listener, which you should be, because it's excellent. I don't know why Jason isn't talking about it more. It's an awesome podcast. He just did a great podcast

that really dove into like, what is the media's role in society today and how our tech platform transforming the role of journalism. And I was actually listening to that the day after David and I recorded our three-hour history of the New York Times that we just dropped on Acquired,

like unbelievably good compliment. So really fun to like hear those episodes both back to back. I did that with the Times of London. The original Times. Yes, the Times of London. All right, we'll see you all next time. Bye-bye. Great job, boys.