This Week in Startups - Web3 wars & Rivian Q3 earnings with our new co-host Molly Wood! | E1349

Episode Date: December 22, 2021

Jason is joined by This Week in Startups' new co-host Molly Wood for a news show. First they cover why Molly joined the TWiST team (1:24), then they dig into the Web3 wars erupting on Twitter (24:00) and break down Rivian's Q3 earnings (51:45). Producer's note: this is our only podcast this week

Today is Molly Wood's first show as a full-time co-host, and we're going to cover a lot of news. The Web3 Wars have begun on Twitter. Jack, Elon Bellaji, Chris Dixon, Sacks, everybody mixing it up overnight. Rivian stock has dropped 45 percent. We talk about that from the peak and the future of electric vehicles. Plus, we talk about what she's going to be doing here at launch as an investor, and we're going to talk about how we run the show. So welcome to Molly Wood and let's get started. This weekend startups is brought to you by Vantamta. Compliance and security shouldn't be a deal breaker for startups to win new business. Vanta makes it easy for companies to get a SOC2 report fast.

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Join more than 45,000 people worldwide who are driving results with data IQ. Visit d-a-t-a-I-K-U.com. So Molly is here and should be a co-host of the show. So second decade, new co-hosts, here we go. Tada! I mean, I have to assume there is someone here who did not know that. So, like, guess what, guys? Guess what?

And so, Molly and I have been friends for, I'm trying to remember when we first met. It must have been like at C-NET or something. I was definitely at C-Net. I mean, it's been 15 years. Yeah, maybe. It was probably when I was running in Gadget. I could see-Net and gadget. Yes.

In fact, I wrote a thing that annoyed you. Oh, did that? In gadget, yes. Oh, really? Really? I was full contact back then. I know. We first met in a very J-Cal way. Oh, no. And then we put it all together. This is literally the story of my life is people saying, we've already met.

And I'm just like, oh, no. My wife is standing next to me. She's just like, let's hear it. Oh, I know. You didn't give them credit for something or? No, I called them rumor blogs. I wrote like this problem about Apple. And in a throwaway sentence, I referred to rumor blogs. And then Jason was like, not having it. At that time, we were like these super underdogs at Engadget, just trying to survive. And it was really hard because we would not get wrecked.

I'll tell you why we were so sensitive. We would break news and we would go faster than anybody. You remember this time when like stories had to sit for a couple of days, get read by two editors, fact checked, all the stuff. And Peter Rojas was like, okay, we got a tip from somebody in. side of Motorola. They showed us this. We know he works at Motorola. Like they had these inside things and we're going with it.

You know, and I was like, great. That's our advantage. And then, you know, then, I don't know, CNAD or who else at the time? New York Times, Wall Street Journal, Walt Mossberg would cover the same story, but it wouldn't link to us. Or worse, they would say, a gadget blog or a tech blog. And they wouldn't even say our name. And I was just a rumor blog. A rumor blog.

And I was like, give us the goddamn link. And what it was was at the time. I don't know if you remember this. But SEO was so precious that everybody knew, journalists knew, publishers knew, and the publishers explicitly told the journalists do not link to them, do not mention them. If we have to get them credit, we'll say Engadgett, but do never link to them because we don't want to take our page rank 9 or 10 from the New York Times and give it to Lowly Engadget

because then they'll beat us in the search rankings. But anyway, that was a funny time. Yeah. So you're here. you and I have been friends for 15 years and colleagues. And we were talking, I don't know, it was like two years ago. And you said, hey, I'd like to be a venture capitalist. How does that work?

Do you remember the conversation? Maybe we could just give the audience a little background on how this came to pass. I do. Yeah. I mean, I started when I went to Marketplace Tech, that was one of the first coverage streams I launched, which was like, let's help people understand how venture capital works. It's such a black box for people. It's this sort of mysterious mechanism.

It's like the priesthood that controls all the money and makes all of this magical technology happen. What is the deal? And then the more what is the deal stories I did, the more I was like, ooh, I kind of like this. It sort of feels like a little bit like what I do, but more direct, right? Boots on the ground with a chance to make an actual impact, but it's similar skills. It's curiosity. It's evaluation. It's, you know, healthy skepticism.

But it's also because we came from that world of like products and product reviews and evaluation. It's also fundamentally enthusiastic. It's very positive. Yeah, it's a very good incident. It's very positive. You get to get excited about stuff, which is, you know, a great thing. Anyway, so yeah, so then I came and had this conversation and Jason was like, well, everybody comes into the office 50 hours a week in San Francisco. And I was like, oh, no, that's not going to yeah. Yeah. And then. And we went up to that. I was not. And then, you know, COVID came and fixed everything. Here we are. It's kind of true. Yeah, I was trying to, you know, my initial idea was I came

to the parties thinking, you know, all the venture firms I'd seen, the advantage was being in the room, having this discussion about the startup, having the founders come in and sitting around a table with them and you just couldn't close a deal unless you spent time with founders. And what I was taught by the Sequoias and, you know, George Zachary from Charles River and all my mentors, Bill Gurley and people who came before me was you know, it's the amount of time you spend with that founder and the attention you give them is your chances of getting the deal and then also subsequently after you have the deal, the chances of success. And boy, did that go out the window because nobody would meet in person.

Nobody would meet on Zoom. If you said, let's do a go-to meeting, venture capitalists would be like, you're not serious. So all that was like interesting. But then when COVID hit, it's really interesting. It's made it sort of like online dating where people now go on these like quick dates. I hate to use a dating analogy in 2021, but stick with it for a second. They're like, they kind of whip through Tinder or might understand kids go through, you know, these different apps. They pick somebody who's appealing. They do a quick chat with them.

Sometimes they go out with them. Sometimes they might even do more. And then they decide if they want to have a relationship. So it's almost like this idea that you, you know, met somebody, had a cup of coffee, whatever. It just seems to have flipped. And so now as founders just get on a 20-minute call. They're like, here's my diligence.

Here's a diligence room. what we're doing. How much are you in for? Yes or no? And it's, if you told them, like, let's have a, let's go for a walk around, you know, the park, South Park, they'd be like, are you crazy? South Park's a Park in San Francisco for those folks who don't know. And typically VCs would go for a walk around the park. And then other VCs would look at the window, be like, I wonder who that person's walking around the park with. So that's very true. Life has changed. It makes it so founders can have three times, four times as many meetings and spend zero dollars traveling. And it makes it so venture firms could meet three times as many,

companies and find better, you know, founder firm fit. And I'm sort of, to be clear, I am mostly, that was certainly a consideration, but what I mean to say is Jason and I have been in conversation for a while about how to make this all work. And then a whole bunch of things came together all at the same time, not least of which is remote work, but primarily it was just like, this is the moment. This is the opportunity. And I'm super excited.

So thank you. Wow. We're super excited. to thank you because to give you an idea of my life. You know, this show was this week in startups, like singular. Then twice a week,

three times a week. They keep selling out the ads. And I said, I wonder if it could be five days a week. And now here we are going to January, six days a week. We're going to have a Sunday show. And we sell the,

yeah, exactly. Be careful what you signed up for. Whoa, whoa, whoa. And I've got bigger plans. But I don't want to scare you on day negative.

This is basically day negative 10. I'm going to go ahead. I'm going to like sell everybody on this idea that Jason like has all this faith in me and really believes and we're going to have this fun. Like as you are going to say, the new segment where Jason coach is Molly about investing. That's all true. But let's be honest, he needs backup. The man needs to back up. I mean, it's just a self-preservation.

No, it literally, we've been running since the summer under this constant fear. What if Jason gets COVID? What if Jason gets sick? What if Jason goes on a vacation? And when I went on vacation to Italy the summer, I banked a bunch of episodes. I decided to stay a couple of. an extra week. I had to do episodes remote, right? But episodes

are now easier because people are more likely to be guests because they can do what we're doing right now, which is remote. So then you probably saw that at, was Marketplace NPR or American or it's its own company. It's American. American Public Media is the parent company of Marketplace

and it's a frenemy to NPR. But everybody thinks they're the same thing. Yeah, everybody thinks they're the same thing. Yeah. Sock to compliance is critically important for you. Yes. You If you've got a startup, you need to have your SOC2 tight. Because if you don't, you can't close major customers. It's that simple.

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And so I'll tell you what was particularly exciting about you having an interest in doing this, aside from it, you know, we have good rapport on air. That's like a prerequisite. I'm excited to learn from you and have a different voice on the podcast because you've done a different style of radio than I have, a different style of broadcasting than I have. I've done this as like, let's face it, a bit of a hack, you know, like I was a pioneer in podcasting, but I never formally produced shows for public radio or anything like that. So I'm really excited about you working with our three producers. And they're super excited to have your membership. We're amazing. Pretty great. Yeah. We don't use words like amazing. Like we like to use words like up and coming or

hardworking. Yeah, my easy on the... Right, got it. Yeah, there was that... You know what? I think are going to be fine. Yeah, they're going to be fine. Yeah.

There's a great moment in an Anthony of Ordain documentary. Rest in peace. Speaking of broadcasters, incredible. And speaking of hack broadcasters, incredible, right? And somebody told the story, you know, after I died, when they were in this restaurant and they're like, the guys are like, I can't believe how good your crew is. They set this up. the restaurant, the lighting's perfect.

Everything's great. Your producers are on everything. It was just perfect. Every step of the way. And he goes, you're not listening. We only pet the baby when it's sleeping. Don't give them compliments. Like, we got to keep them on their, like, hungry.

On their toes. I always tell that to our team. But we have a great team. And now there's eight people working on the show, I think. Let's see, two hosts, three producers, two folks in sales. That's seven. And then our studio director. eight. So there's eight people will add more as we go. But it's becoming quite a phenomenon. And so

people understand what we're going to do. So there's the news program, there's interviews. And then there's Molly learning how to be a venture capitalist. So the way Molly and I discussed her kind of day breaking up is, hey, a.m. we do the show and PM, we do investing, right? And sometimes there'll be things that are different. But what do you think about interviews, Molly? Because I was thinking about this right before we went on air. I was like, wait a second. Should we, I mean, we each obviously know how to do interviews independently, and we'll do that. But is there some moment in time where we do a joint interview with somebody or does that ever work? Have you done it before?

Did you and Kai Ristold do that ever at Marketplace? Once a week on Make Me Smart. Every Tuesday we would do a joint interview, yeah. Yeah. It is very doable. And I would also say does not have to be the norm. Like you don't have to do it every time. There are definitely times when you want to.

But I think there is flexibility and backup. to just like see how the sausage is made. There's also some backup and being able to split up those duties and, you know, each of us like bring an interview occasionally, super useful and efficient. But absolutely, there are times when we can get somebody on here and interview them live in this exact time slot. Perfect.

So let's talk a little bit about how we read the news because I think most days we'll do the news together. Some days, if you're not available, I'm totally capable of doing solo news. I don't know if you ever done the news solo, but you've done segments. Not on this week in startups. No, I'm missing startups. So I think it's possible. I have hosted, you know, marketplace national radio show.

Yeah. But when you do that, you do those the day before or is it the morning of? Like, explain the process. Because it's slightly different than here where it's like, people are like, oh, I've known J-Cal, entrepreneur investor. He's reading the news and then giving his opinion on that. You don't get to give your opinion, right? You just have to or too much opinion. On Make Me Smart, yes.

And then, of course, there were the six years of Buzz Out Loud, where it was essentially this exact format every single day. Yeah. So, yes, I think because, as you said, we're like T minus 10 days right now, I'm not officially here, everybody. Like, don't get used to this. January 3rd. She's going to enjoy her break.

It's when this actually will start. But, yes, there's a beautiful script that right now is all J-Cal, and we can totally, I think we just split up the blocks. I love that we're basically just planning, by the way, the show in real time. And Zen Prophet just said, Molly needs to learn how to do ad reads. I'm not even lie.

Wow, that's actually good. I'm sweating that. Did you ever do ad reads on any of the other programs? No. And it was like religion, right? It was like the host does not do ad read because you're capital J journalism. I know I'm totally like, ooh. Well, I think this is why.

What's that going to be like? I think this is why Kara Swisher stopped putting herself into journalist and became a commentator fully and doesn't work full time at New York Times. I've actually talked to her about this, so she can just be full opinion. But I don't know if the audience of the New York Times perceives her as like something separate than a New York Times journalist. I don't think they have the sophistication to do that. But she does read the ads.

I'm not sure if she reads. I think she reads them on sway. And then obviously Vox does very well. But you don't have to read the ads. I'm fine reading the ads. I find it kind of fun. And I was thinking today I might be interesting if when we sell the ads, they could actually check a box and say, you know, Jason.

Molly mix it up, you know, like almost like, because I have a feeling there might be people who might prefer you to read the ads. There might be products. Yeah. You should just work in like a little, a little premium. Yeah. Take the opportunity. It would be like, if you want Molly, like, you know, she's coming off this whole journalism gig.

You're going to have to go. But you're not opposed to it. So that's good. You need some convincing. Well, no, I mean, I was actually going to bring it up to you off air. But I think talking about how the sausage made here with the, with the fans and the super fans and the pod is kind of interesting. So we'll have to figure that out and I'll have to talk to the sales team about that.

Ideally, what would be great is if we told people they didn't have a choice and just said, you know, the ads will be read by one of the two hosts. If you have a preference, you can select a preference here. We'll do our best to accommodate. And then I guess in rare instances, somebody, we could have them do that. But, you know, usually we get the ads the week. Our standard is to give us the ads the week before. So I tend to do the ad reads the week before.

And I'm good at it and people like it. And I'll be totally honest. When people buy the ads on podcasts, I don't know what your perception is. I think half the reason they do it is for the implied endorsement or it's nice to hear the host read it, whether it's Joe Rogan or Kara Swisher or anybody in between. And then half of it is like the actual performance of the ads. Did they do something for their business? Yep. Yeah.

I mean, I remember way back when you and I were podcasting at the same. I mean, when Buzz Out Loud was on, the ads became and we didn't read them, but we would have people on staff read them. And the ads became a character on the show. I mean, there was, like our, one of our camera guys, Charlie, read the Earthlink ads, and people started calling him Earthlink guy. And he became a character on the show, which is like the most sort of free branding that you can ever get. I do think people like the, I don't think audiences are as fussy about things like ad reads as we tend to think they are. They're not sitting there like, oh, that, you know, all these.

That's kind of impact. I mean, you read that. That's embarrassing. The only really time it does happen is when you look at something like the New York Times and their coverage of, say, Facebook. and you look at Facebook and their propensity to use money to try to create influence. And I think they're spending like $100 million on podcast was the whisper number. And I've got to think at least $10 million of that is at the New York Times. So if you watch any podcast or you go to like Vox or any of these places,

they're simultaneously, yeah, they're simultaneously covering Facebook from a very, you know, I would say advocacy journalism kind of perspective. While there's a Facebook ad saying Facebook is doing the best to keep the net evolving and And you're like, what is this? This is very weird juxtaposition. That's why I don't think Cara reads Facebook ads. So I think if they asked her to, she wouldn't read them. I think that might be the only exception.

So there are like these little edge cases where they're like, eh, I'm not sure I want to read that one. This is just such a good, this is going to be a great, you know, Columbia journalism or pointer piece someday. Like this sort of evolving relationship because way back in the day, I don't want to belabor this show. It's going to be like nine hours long. But I, back in the day,

it used to be that, like, you couldn't run, like at CNET, you couldn't run a Samsung ad on a Samsung review. That was just verboten. Like, no way was Samsung allowed to place an ad on the page that reviewed the Samsung, you know, way back in the whatever it was back in the day. Now, like, forget it. Samsung can just buy like, I mean, the whole sort of ecosystem has changed as audiences have gotten trained to be less sensitive to those things. Yeah. And yet, we would get emails all the time at marketplace with that cognitive dissonance. We got emails about underwomeness. We got emails about under writing it. Now, it's public radio, and so it might be because people donated. But like,

there still are some. I would be very curious to hear what your audience thinks about. Yeah, I don't think they care all that much. You know, what we do in the ad reads is I'm very specific with our producers. Make sure that if there's any claim in it, we say who's making the claim, right? So if I were to say, hey, this company is the greatest number one CRM in the world according to whom, you know, according to themselves, according to a Gartner group. So, you know, And then there's like overaggressive marketers who do silly things like maybe clip the ad and then edit it and put it on their own social media. We're like, no, no. The ads only exist here.

You're not buying an actual endorsement where J-Cal's like, I eat, you know, this specific neurotropic every day. This mattress is amazing. Here I am in it. All right. I think we've belavored at that point. If you don't have business insurance, you failed one of the first steps of being a great founder. Startups should look no further than in broker. Broker's technology saves you time and money.

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go to imbroker.com slash twist. And while you're there, you get 10% off. They're already amazing prices by using the offer code twist T-W-I-S-T. M-B-R-O-K-R-C-R-S-T-T-R-T-R-R-T-W. All right, thanks for supporting the show, I'm broker. Oh, and Ky Ristol followed me and DM'd me,

or I DM'd him. I just wanted to let you know. Oh, that's so nice. Oh. Thank goodness. You don't know what he said to me. Oh, yeah, you're like, good point. No, I said to him.

We're going to talk after the show then because I want to know. No, no, I said to him. He said, I said, hey, new follower. And he was like, hey, you know, I'll just say general terms, because I didn't clear with him to say it. But he was just happy for you or whatever. And I just told him, like, listen, it's a real bummer for me because I really like to listen to make me smarter.

And you guys had such a great rapport together. So it was better sweet, you know, that she's coming here about obviously I'm super happy. And he was, I think, super happy that you have to be a venture capitalist too. For people who are wondering, one of the, oh, go ahead. Yeah, say something nice about Kai. No, I was just going to say that so nice. Maybe sometime we'll have a line to talk about macroeconomics.

Absolutely. Yes. He's awesome. And for fans of the show, one of the segments we're going to make is Molly is going to learn how to be an investor. That's why she's here, you know, half time on media, half time on investing, which is basically what I do, or pretty close to it. So we'll do segments, maybe, you know, on the show on some regular cadence. I'll let Molly produce it. And we'll just talk about what Molly's learning about investing,

and then we'll have little debates about the best practices or how to do interviews. So for those of you who are interested in venture as a career, Molly's going to produce some segments on that. It's going to be great. I'm so excited. I'm super excited. Massive notes file of just like topics to discuss from my early homework and my early reading. I mean, honestly, I think learning in public is always valuable for everybody.

And like I said, this industry is so fascinating and confusing and complex. And there are rules, but sometimes there aren't rules, it seems like. And you have such a long experience that I just think this is going to be a blast. Okay. So when we do news, I'm excited for it too. When we do news, what is your philosophy of who reads it and then who comments on it in terms of if I have more commentary on it? Should you read it or should I read it, go into my commentary, take a question from you? What do you think the best way to pass the ball there is? I think that generally, like if we're going to be in a situation, and I suspect we are,

like today, you brought two stories, I brought two stories. Probably best if like I introduce your story and then you talk about it. So it's not a big old monologue and then vice versa. Okay, great. So then that means with the, uh, can you read the web three one? You don't have to do the Yoda voice. You tricked me. Yes, I absolutely can.

I know. Totti had said, but indeed, the web three wars have inevitably begun and they have happened so soon before most people even know what the hell you're talking about. Jack Dorsey, Elon, Balaji, and A16Z were involved in some back and forth on Twitter last night, starting with this tweet from Jack Dorsey, a like sub-tweets to the industry at 11 p.m. Eastern on Monday, just sitting there thinking any tweets, you don't own Web 3. The VCs and their LPs do. It will never escape their incentives. It's ultimately a centralized entity with a different label, know what you're getting into. And Jason thought, shots fired for sure

and this was just the start of it this started for people start with the take yeah what do you think well with his take he's correct web 3 is a term that existed actually 10 years ago and it was for the semantic web which was going to be a web that was designed as objects

and you could pull a recipe and ingredients would be one object, steps would be another and it would be like a programmable but more on a content and an object basis. And that was, I think, Tim Berners-Lee suggested it as Web3. Now the concept of Web 3 means the cohort of technologies around

cryptocurrency. What are those? It's decentralized. Not one person is running it. There's just a bunch of servers. I talk to each other, but nobody owns it. servers can come on off in the network. But there's no Microsoft or Amazon servers

or Twitter running the server farm. Right. And it seems like sort of crypto and Black Shane underlie that. But yes, so this is the shots fired tweet. Then this Twitter user replied, nice, with the following, so coming back to Jack, with the following WSJ headline from a December 18th article saying Jack Dorsey and the unlikely revolutionaries who want to reboot the internet,

the subhead of that story said members of the tech elite are banding together to bring the web back to its idealist origins. They call their vision Web3. So then Jack replied to that and said, no, no, no. I have nothing to do with Web 3. Wall Street Journal and others need names and photos to generate clicks. How about, he's fired on everybody. I mean, I don't know what Neuotropics he did last night, but he was hopped up.

I'm going to say Indica, Indica. Indica has a really good point. Indica's in, makes you inward and Sativa makes sure it more energy. I think it's on a Sativa view. I read a whole thing about how both of those are like a myth. because there aren't any actual standards and so whatever they're labeled means nothing.

But either way, whatever it was, he's got that big jack energy. He had big jack energy. So then Bellaji writes back and says, so now it's starting to become a blue check war. Belagie writes back, I respect you, and everything you've built. I also disagree here.

Twitter started as a protocol, the free speech wing of the free speech party, then corporate and political incentives led to deplatforming and censorship. Web3 offers the possibility not guarantee of something better. I thought this was totally fascinating

because that was like grafting on your own issue to frankly a completely different conversation. Yeah, Balaji is very smart. He's like the head of the debate club and what he doesn't realize as the head of the debate club, and he's been on the spot and all in and more friendly. He's debating on Twitter

with the guy who created Twitter. Maybe not the best strategy to come at that guy. And what he put in there is he started with a compliment, which means you know the insult's coming. Oh, yeah. The compliment is like, I respect and love you. You're the greatest.

And then he's like, but social media platforms are the reason for decentralization. I don't know if you caught that subtle, you know, little stab. He's talking about Twitter itself as a centralized product and Facebook, obviously. Right. And of course, Elon jumps in. Has anyone seen Web Free?

I can't find it. And there's some backstory here, but let's keep going. There is. Wait, I want to hear the backstory. Let's just get through the next two tweets. Then I'll give you the backstory. All right. So then now I like this new ping pong that we've just started.

This is great. And so then Jack replies to Elon, it's somewhere between A and Z. Drop the mic. Oh. He means A16 and Z, you guys. The Venture Furb. The Vajee worked at. That's raised like a billion dollars to invest in crypto.

And Elon Musk replies M something something. I'm not sure what that one I didn't get that one. I didn't get that one. I was hoping that you did, but I didn't. So then Elon jumps in with something that suggests that maybe he didn't get the A16Z reference. I'm just saying that's a possibility. Then is when it gets heavy.

Yes. This is the Chris Dixon one. Chris Dixon is the lead partner at Andresen Horowitz, who has invested, I'm going to guess, over a billion dollars into the crypto projects. And why don't you read that one for us? Yes. So then Chris Dixon jumps in with a sub-tweet. First, they ignore you.

Then they laugh at you. Then they fight you. We are here. Then you win. And then Jack is like, oh, hell no. You're a fun determined to be a media empire that can't be ignored, not Gandhi. Oh, my lord. These guys have no idea what.

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It is Jack Unleashed. Jack gone wild. He has jumped the fence and he does not care. And he is taking no prisoners. He believes in the early version of the web, I can tell you from personal conversations with him. We're not bests or anything like that. But, you know, I know Jack for a long.

long time. And, you know, he's a fundamental open platform guy. And he is, uh, the other backstory, I believe is that Andreessen Horowitz didn't invest in Twitter or square. I think it might have been they got turned down, I think. And then also, uh, and this, I don't think anybody's ever talked about publicly, but there was talk when Twitter was at its bottom of a Twitter buyout. And I know that Andreessen Horowitz was trying to do a Twitter buyout. That's not public knowledge, but I have a lot of non-public information that I share in this program. So if some journalist wants to... It is now.

It is now. So good luck with that. Amazing. So I can give you the backstory here. Yeah. Somebody sent Elon the video of me talking about... I don't know if you saw that Bill Gates video where Bill Gates is trying to explain the internet to David Letterman. And then somebody who's a fan of this show made a TikTok out of it.

And then I... I, and that TikTok went viral and got like two or three million views on TikTok, where I just basically explain like, yeah, explaining Web 2, or explaining the internet like Bill Gates is trying to do there, is how I feel when I try to explain Web 3 to people. It's just, and that doesn't mean I endorse Web 3 necessarily, or I don't think there's scams and all kinds of problems, but it's just the general feeling I have. But this person clipped it almost as if I'm like the Web 3, you know, super proponent. It's okay.

It's a fan doing a super clip. I get it. That went viral. Somebody sent it to Elon. Elon asked me if he could tweet it. I was like originally no. And then he wound up tweeting it like a week later because I told him okay. So he tweeted that. That went viral. And that's when this whole Web 3 thing started to get momentum because he did a follow-up tweet to that video. He said, just to be clear, I am not saying I know what Web 3 is. I think Web 3 sounds kind of like a marketing BS, which let's face it. It is marketing. It's just marketing. And if you look at at the core of this is, you know, Jack's view that the, so that's the video that people can watch later. But if you look at Elon's follow-up reply, you'll see that he's very clear, like, listen, I'm not endorsing. Maybe you could read that one, Molly. I'm not suggesting Web3 is real. Seems more marketing buzzword than reality right now.

Just wondering what the future will be like in 10, 20 or 30 years. 20-51 sounds crazy futuristic. Yeah. So, to be clear, there's a multitude of issues here. One of them is, is what we're building actually truly an independent, decentralized, no middleman, no intermediary version of the internet. Which, by the way, is what the internet was in the beginning. Exactly.

So this idea is so happy that you and I can age ourselves in this way because it's like, oh, were any of you peanuts around for the internet, a set of decentralized protocols that could connect computers and information that of course. Nobody owned and nobody controlled. And RSS feeds and HGN. like nobody own these. It's called open standards. And so this is just like a 10% what they're defining Web3 is

kind of like this little 10% on top of it, which is technically the servers aren't owned or controlled by everybody, which is a very nuanced point. In other words, the software on the servers is open source. The internet itself is not controlled by everybody. But yeah, when somebody puts a database like IMDB or Twitter, a database of tweets or Flickr

or whatever on the internet, it can become a wall garden of you know, they control those servers and the data on them. And it all had to, like if you sort of compare the internet, if you assume that when people say Web3, and I think this is the case now, they mean some version of crypto and more importantly, blockchain, right?

They mean this kind of like decentralized usage of information and tracking and public ledgers and the kind of open availability of the information about what happens on the blockchain. That's what they're talking about. And that is, it seems, the potential that Jack sees in terms of it being a revolutionary and disruptive force, even though he himself is one of the people who created an organizing principle around

what was a messy, ugly, hard-to-understand set of open protocols and decentralized information sharing that needed a user interface and an organization and inevitably drew people who went like, huh, I bet I could make some money on this. And as we well know, the driving principle of all business is monopoly. And so we had an internet that became the web that ended up controlled by a number of monopolies. Yeah. Google.

And Jack is like, ooh, even though I did that, I hope that doesn't happen with the blockchain. And in super fairness to him, he started inside of Twitter years ago, a project to make a decentralized version of Twitter and the ability for you, which was his brilliant suggestion, which I had never heard prior to him making it. bring your own algorithm, write your own algorithms. And when you open up Twitter, if you want to have an algorithm that emphasizes kindness or, you know, fact-based organizations, and I want to have one that, you know, is a free-for-all. And then somebody else wants to have one that's like their closest friends plus timeliness or something.

We could all tweak our algorithms in real time and let the best algorithm win. And maybe somebody would say, I want an algorithm that removes trolling from the far left and far right. And that would be called the troll-free algorithm. And when you log into Twitter, it's like, here's like the app store of algorithms. That was Jack's idea, I believe. I mean, he was looking at Twitter as a way to, you know, cross the chasm and decentralize it and make it more customizable. The second piece of this puzzle is it's a lot of money being made right now. Right.

And people don't want to talk about how that money is being made. But how the money is being made is, in many cases, illegal and non-traditional. would be the kind way to say it. And so what I mean by that is there are security laws. And crypto tokens, which, Andresen Horowitz, which is at the core of this, they're the ones who have a media company that is ramming down people's throat Web 3.0. They're buying up all of these tokens. And here is what cynical people or concerned people have been telling me on the back channel.

And I always like to talk about the back channel to the point I can. So I'm not going to put anybody's names on this. But Andresen Horowitz has got a really great footprint of people investing in crypto. So good on them. They're working hard. They're deeply embedded in a crypto ecosystem and they've been making bets for a long time. Great. That's what they're supposed to do.

They also get to buy the tokens in many cases before the public gets to buy the tokens. They also get to buy them at discounted prices, maybe with some extra rights, plus they're investing in the company. In other words, they've created two cap tables, one for the global economy of a not buyers of tokens. And then they have like the actual cap table following Delaware law. They're participating in both of these things. And what people have told me is like now they're buying these tokens and they control the companies or have a big, not control, but they have a big seat at the table in the

companies, like to say a board seat or they own 25% of it or 15% of the company. Now, if you would take the most cynical approach, non-accredit investors can't buy into that company. Let's call the company, I don't know, Acme, crypto. You can't as a non-accredited investor, just in the audience, if you're making under 200,000 a year. You can't buy equity in Acme, crypto. But you could buy the tokens on, you know, any a number of exchanges. And Andreessen Horowitz bought those tokens at a lower price than you, because they were there at inception. Now the tokens are going up, and Adrescent Horowitz won't shut up about

the company, and they have a media channel. So what the SEC, if you were to swap out the word token, for security and you are working at marketplace for a long time understand public markets in the rules, Molly. Yeah. How would the SEC interpret an insider buying low, pumping, and security to a group of people who are non-accredited investors on a global basis who they don't even know and those people buying it and let's say we don't know this. But let's say Andrewson Horowitz was selling some of their tokens.

I don't know if that's true or not, but if they were selling them and pumping it, or they weren't selling them and pumping it, and they had this huge vested interest, both in the cap table and the tokens, on the token side, that would be considered either some combination, if the tokens were securities, insider trading, or market manipulation. Now, in a private company, if I said when Uber was private, I love Uber's. Everybody should try Uber. Uber. Uber eats is dope. Uber Black's great. I'm an investor in the company. you know, there's nothing there because you can't publicly trade the stock. It's private. The equities are not available. When the company goes public, you start to have a higher authority of, you know, are you speaking for the company, et cetera, as a board member. So that's just the issue I wanted to highlight. Right. Like, we should clarify that the first part of what you have described is exactly how venture capital works. Like the VCs invest in a company. I know, I know, because I've been reading the book.

Yeah. Yeah. They invest in the company. They get a certain number of shares that are preferred. By the way, they're better than the shares that people will be able to buy when they get on the public market. And therefore, they have this like preferred position within the company, some ownership, and they promote the company because they want their shares to perform better over time. The difference, I think, as you've described it, is that they're not also out there on a private market for stock in that company, buying all the other stock. Right. And then trying to pump up the company and pretending that they don't own the company. those other shares, the kind of like common bucket, the tokens. Yeah.

Tokens, we should say at this point, the SEC is still wrestling why it still works and is a gray area and there's so much money to be made real, real quick before the SEC figures it out is because they have not figured out how to specifically categorize tokens. They don't know yet if they're securities. They have not determined them to officially be securities in every case. So in the absence of those rules, Katie barred the door, make all the money you want. And it seems like you were suggesting on Twitter that like, that might be the part that Chris Dixon doesn't want to talk about. I think that's probably the part Chris Dixon doesn't want to talk about or anybody who's deep in crypto is what are their rules, what are their lockups?

How are they be able to liquidate their position in what order, right? So there are all these rules with chairs around who can sell their shares in what order, concept of pari-pursu. if we are going to sell 10% of the company, every shareholder gets to sell 10% of their holdings, not just one so that people can have some, you know, equality in the representation of their shares. None of that exists here.

And everybody knows when you're buying a token, is there anybody buying these tokens who, of a thousand people buying the token, how many are buying them independent of the appreciation of the price? In other words, they don't care about that. The only situation I could see that happening

would be if people were buying tokens, in some video game, where the primary use is to play the video game, right? Right. But in these cases, everybody's buying these with some anticipation of the price going up where they wouldn't have bought them. Yep. And the apps wouldn't have charts and people drawing pictures on them, like trying to predict where these things are going.

And so this is great, this is a great debate for us to have. And you really need to have the government, the SEC and these agencies just say, listen, if you want to sell tokens, it's a security. if people are buying them for them to appreciate. And then if we get rid of the accreditation laws, that levels the playing field. And I think that that's the easiest solution here because, you know,

it's going to be the circular debate about, oh, you hate innovation. Like, every time I bring this up, that it's unfair that one group of people are playing by the rules and the other group is just running a muck. People are like, oh, you hate innovation, boomer. And I'm like, I own like seven figures worth of Bitcoin. But okay, sure, I'm a boomer.

Right. I think that is the issue is just leveling the playing field. Now, if everybody was allowed to buy tokens or private company securities, what's the issue? Which is why these things work overseas, right? I don't know if you know this, but you can sell these tokens in Europe, you know, in a lot of other countries, a lot of countries in Europe and a lot of countries around the world. No problem because you're allowed to do with your money, what you will in those cases. I mean, in some ways, the part that Chris Dixon is right about is that this is, in fact, the inevitable evolution of a brand new economic. economic sea change.

And we're in the part of the evolution where the people who understand it are in the position to make a lot of money off of it. There are idealists who want it to be. And then frankly, the question of centralized or decentralized is almost off to the side. Because the fact is everything is going to become, everything becomes centralized. The end. Right. There is no, like, we're not using Linux right now.

Everything centralizes. And frankly, it has to because that's the only way you get adoption. If you think about how difficult it is to use these services, we have yet to have something like BitTorrent, you know, or things before it become easy to use. Other decentralized protocols had to be kind of masked in something like Kazaa or Napster in order for it to be productized. So that would be the big challenge of this is can somebody productize that it make NFTs as easy as buying something on Amazon, right, and trading them. And maybe we'll get there. All right. I think we beat this horse pretty hard.

but there is some breaking news. I had tweeted something about, like, you probably don't want to start a fight with, you know, the guy who created Twitter. But then Sacks jumped in and put like, he made a joke about the warning. Molly, wanted to read this.

Yeah, he's saying thousands deep platforms, lab leak theory censored First Amendment in Jeopardy. Jack. Oh, does something happen? I've been in an ashram. Someone criticizes Web 3. Jack. How dare you?

So suggesting here that Jack has allowed the principles of free speech to be destroyed on his platform. Again, I am fascinated. And I know these guys are your homies, but I am fascinated by how this conversation in Jack's mind about technology decentralization has become a way for them to come in and be like, we're mad at you about, you know, monitoring speech on your platform, which again, when you centralize, P.S., that's what happens. Society is censorship.

Yeah, I mean, somebody has to be responsible. You have liability. To be clear, David Sacks is my bestie, but we have very different political beliefs. And we've been able to maintain our friendship through that, barely. No, I have a great friendship. You do a great job on the show. But he, oh, thank you. He is, you know, very much into free speech, like many of us are. And what he doesn't recognize here is that Jack also is super free speech. But Jack, I think, had a hard time maintaining the service known as Twitter in the age of Trump. which is the trolley car problem, you know, the unsolvable problem of no-win situation. What is it, Kobayashi-Maru in Star Trek Orleans or the troll-winnable game? Mm-hmm.

Yeah, it's just an unwinnable game running Twitter in the age of a savant like Trump who knows exactly how to tweet like right along the line of the terms of service. He's like, somebody's pin the terms of service and they're like, here's what you can tweet.

And he's like, yeah, you know, I'm so proud of these people or those people and those people. and those people are tearing into the, you know, the capital building or something. I mean, those issues existed before on Twitter and it was grappling with it. And, you know, it was, it's the question, it is the question that monetization drives is,

are you going to let your product become an unusable cesspool where there's abuse, where there's fraud, where there's fakery, where there are things that, to put it bluntly, advertisers don't want to be associated with. And that is why, like, call it all you, censorship is, a tool of governments, not private companies. If private companies want to make money, they're going to censor. I've witnessed John Sino walking back the geographically accurate statement that Taiwan is a country so that he can keep selling movies in China. That was the most medical apology I'm seeing in my life. I was like, do the Chinese have

like a shotgun off screen pointed at him or something? Yeah. So sad. Yeah, it was a billion Oh, that was what it was. The shotgun was filled with like a million dollars. The shotgun is the Chinese market for movies. The NBA did the same thing. The Olympic Committee did the same thing. I mean, so it's just like, anyway, yeah. Well, I think Jack.

There are so many conversations I've been so excited to have with you on this podcast, and I don't want to have them all today because we have, you know, the rest of forever. But like, it's going to be so great. Well, I mean, and I think Sacks is having fun, sort of making fun of Jack. The fact is, I think Jack. And so is Blaggy. saying the same thing. Yeah, I think Jack's done a great job. And these guys are both right-wing guys who feel, who are really aggrieved that Trump got thrown off. And I can tell you, Sacks is a

complete baby about the January 6th insurrection, which I brought on an episode of All In, and then he refused to publish the discussion and was like, let's not, because we have an agreement on All In, if anybody doesn't like a topic, we can skip it after we've edited it, after we've done the show. And I brought it up, and he lost the debate to me, like just handily. And he's like, you know what? The January 6th stuff's going to come out like three weeks. We should take this out. And I was like, no, I want to leave it in. And he's like, well, the rule is, you know, anyone who wants to take it out. And I was like, okay. So he is really upset about the January 6th thing being considering an insurrection and all that and Trump being kicked off. So that's where he's coming from.

And he's fighting for his team, which is the Republican. Right. But Jack is a free speech guy. To be clear. Sure. Yeah. Absolutely. Let's see. The reply from Catherine Bronski was, wait, wasn't he the one who criticized Web 3 though? which is true. Yes. Jack is the one who said whatever we're calling Web 3 right now is being co-opted

and is becoming a wholly owned subsidiary of essentially one VC firm but certainly he is saying these private interests. It was everybody and their personal issues, right? And whether your issue is free speech or your issue is,

I want everything to be centralized and decentralized in the future or your issue is, I want to make a crap ton of money on the blockchain. Or it's Trump being kicked off of Twitter. and free speech and how generally speaking, Twitter has leaned more left

because the other backstory here is last week, I mean, I would say it's leaned less terrorist, but okay. Okay, sure, yeah. Now we've just got a bunch of Trump fans of the YouTube comments. She's called Trump a terrorist. I mean, what is somebody who inspires a revolution?

A revolution and insurrection. I guess it depends on where you're set. But last week, We're going to get to Rivian any minute, by the way. What's that? I said, we're going to get to Rivian any minute, by the way. Any minute now. Last week, Sacks got a label on his Twitter saying some of these conversations are heated.

There's a human behind it. So he was a little bit tweaked like, I'm the only person getting this because I'm Republican. And I'm right wing. And the truth is a lot of other people got it. I got it. So this was one where I was yelling. I was yelling at my headphones while I was walking the dogs. listening to that episode because I got that warning when I tweeted about my climate change

podcast. Yes. So basically. Everybody's got this morning. Here's the thing I just found out, though, because I was in a group chat, which is basically where all these, like, I was in one of these back channels with people. And in that back channel, somebody had the label. He's like, oh, I got labeled.

And we all clicked on it. And it was like, four of us didn't see the label and two of us did. And it was like, oh, wait a second. What's the thread there? So it's not that they're labeling a person. It's that they're labeling a person and the recipient of the tweet. So this is a more sophisticated algorithm. It might be that, you know, me looking at as a climate,

I'm not a climate diner looking at yours might see that. But somebody who, you know, didn't have passion about climate, might not. I don't know. Or maybe blue checks don't see it. So I would love it if someone on Twitter could come on and explain how this works. They've been great, actually. Yeah. I mean, I think they're usually very open exactly about how they're implementing these tools. And I would love to hear it out there. They're the opposite of, yeah, they're the opposite of the other one. Facebook, yeah, in this regard. All right. Let's, should we just go right over to Rivian? Let's do it. Okay, Rivian had a negative earnings report last week and the stock is down 45%. Since the peak, Rivian hit $150 billion market cap in November. As you know, and since then the stock has dropped from $17,000.

$2 a share to $96 a share. Current market cap, $86 billion. Earnings report, Rivian disclosed. It will be a few hundred cars short of its goal of 1,200 vehicles built in 2021. They have only produced 652 as of December 15th, and they've delivered 386 of those. So what you're seeing here is the fun with numbers that companies that are behind like to do, companies that are ahead, like Apple, just say, like, we sold this many phones, companies that that are behind a games.

Like, we've produced 652 vehicles. We only delivered 386 of them, you know, which means like, are they actually done? I would wonder. A few hundred is a big miss if your goal was only 1,200, obviously. I saw one in the wild and I got very excited is how rare they are. Short living in the wild. That's fantastic.

I took a picture of it. I heard it's a decent car. People seem to like it. Yeah. Actually, a lovely truck. I mean, I really was like, that thing is hot. They should make like a couple hundred more of those.

You know, that's the thing is like making a prototype and making 100,000 cars to very different things. Last month on episode 1324, we covered the IPO when they raised just over 13 billion. And here's what I said about their valuation. Okay, this is a 34 second clip. We'll see you on the other side. Rivian should be worth if I gave them just an incredible amount of credit. if you gave Rivian a million dollars in valuation for every truck they'd sold, that would be $50 billion.

That would be kind of crazy because you don't make a million dollars off each one. So if you gave them $100,000 in value, it would be worth $5 billion. I think $5 billion would be a fine valuation for Rivian right now. But obviously they've raised all this money, so they have to have a valuation over $17 billion because that's how much cash they have. So maybe double that $40 billion. Even there, it doesn't make much sense. So what I'm trying to do there, Molly, is back of the envelope math, trying to come up with my own unique valuation techniques to explain to people how to look at these things.

You have a certain amount of cash in the company. I think their cash holdings was up to $17 billion. They raised some in the IPO. They had some from funding before then. So if you net out the cash, right, because if you were worth, I don't know, if you had $17 billion in a bank account and you had no ideas, and a company name, it would be $17 billion would be the value of the company, the value of the cash. So you have to separate the cash out. So if you net out the cash, how do you value a company with, you know, however many pre-orders they have, I put $100,000 in value on each one.

Maybe that means each car, if they made $10,000 in profit on each car, each car represents 10 more cars in the future that they'll eventually get to. You can come up with all different ways to do division into valuations. But I think it's a $25 billion company, maybe $30. And that's one of the big problems right now in the market is this disconnection from what you've actually done and how your company is valued. And so I knew that anybody buying at these high prices

would lose half their money. I will say this now, if you were my, if you were like, if you were like, should I buy the stock, Jason, we weren't on air.

I would say, if you really love the company, I would wait a year because they're so overvalued that maybe in the next year they're going to grow into their valuation. But I could see it also losing, not just half,

but I can see it losing 75% of its value now. I can see it going half from here and then half again. One of the things that I found so fascinating, I will say when I saw it in the wild after listening to, I had listened to that episode where you did the back of the envelope math because we both talked about Rivian on our two shows that day. And when it drove by, I told my son like, that's a billion dollar truck based on their current valuation.

One of the things I found so fascinating about Rivian and the reason I 100% agree with you, which is wait a year and see what happened, is that right after it went public, days later, because one of the things you talked about was the weirdness of the Ford deal, Ford having this big deal with Rivian, despite making the F-150 Lightning an electric pickup truck that it's really pushing as a mainstream pickup.

So like, why would Ford be in bed with Rivian? Maybe it's a negligible amount of money. They don't care. It's like how GM is still invested in, what is the one, Nicola? Yes. Because it's like, they don't care, right? They're just putting, placing bets and maybe one of them will pay off. but almost immediately after Rivian went public, Ford announced the dissolution of that deal.

Said, oh, by the way, now that we made all our money on the IPO, we're not going to be making trucks with Rivian anymore, which I found borderline legal feeling. I'm guessing, they'll have to disclose that in the future we'll find out. I'm guessing, you know, listen, if Ford had sold, you know, somewhere near the peak, now that it's got cut in half, they would still have their entire ownership theoretically in what they're their current value is now, plus all that cash, right? So the right move for Ford would be, and Ford shareholders would be to sell every single share of Riven right now, as quick as possible, even at half the value. They should sell every share, and they should redeploy that money into the F-150, since they are competitors. And by the way, if you look at Ford's economics, the F-150 and trucks are their profit center. They barely make money or they lose money on other cars. Trucks are the profit center, and trucks are their franchise.

like trucks are to Ford, what like hamburgers are to McDonald's. Like it just is their product. So they have to defeat Rivian. So, you know, sometimes a strategic will place a bet on a company to get close to it because they know it's a threat. And that's what you see when these companies do it, which is why, speaking to being investors, at some point we will invest in a company. And that company will say, oh, one of the strategics wants to invest.

And we'll say, they can invest. you know, do you have other funding sources? If so, take that money. Because this investment means they're just trying to get information and get closer to us. And they're trying to get the pole position on an acquisition. It really is what you want as a venture capital list or as a founder. You want an auction for the company or for the company to go public. So you want people competing for the company. So Ford, you know, is GM going to buy a company and then give Ford 10% of the returns or Ford maybe had the right to block a sale? Who knows what the rights were? This does not mean I don't think Rivian is qualified people who made a beautiful car.

We're strictly talking about here the disconnect between the price of the company and the actual performance. Right. Amazon also owning 20% is crazy. Many people would. Yeah, their order is not that big. I was going to say many people would make the same argument about Tesla, right? The price to earnings ratio also does not hold up when you consider the number of vehicles on the road. Now Tesla obviously is in lots of other businesses.

Yeah, self-driving. Nevertheless, price earnings, like if price earnings is the only thing we're talking about here, like you could say that Ribian and Tesla are in sort of similar camps in terms of valuation, but one of them does produce products so far. I think one of them has a million cars on the road and one has 350. I mean, that's a, I mean, there's a big jump between those two. And I think if you look at the valuation of Tesla in the beginning with Tesla too, Tesla was worth like $3 billion.

Yeah. And there was the whole Tesla short movement. So people really didn't believe that Tesla was going to go anywhere. And the Amazon, you know, they never discussed this. And I've tried to get the answer for maybe one of our fans has inside information, you know, has found the information on the web. They can email producers at This Week in Startups.com. Is that Amazon order guaranteed and guaranteed at what milestones?

Because Nicola had all these orders for their vehicles. That turned out to be a total fraud, you know, SEC investigation, DOJ, investigation, all this stuff. And I, when I had the founder on this pod, I was like, you know, trying to figure out if it was real, and it was just obviously not very real. And those orders typically cost, they're called letters of intent in the industry. A letter of intent is like basically the same as saying nothing. Nothing on a piece of paper.

Like, I will buy a billion cars signed Ford, signed Amazon. It means nothing. And so what happens is in these structures, they will ask the company, hey, we'll let you invest in the company has this low price. Will you give us a letter of intent to buy this many vehicles? It's not binding, of course. We just, we need the social proof. And so literally both parties are in on that. Because they're like, oh, I bought equity in the company.

Now I layer on top of the equity a bogus order, a non-binding order. I would say bogus. They would say it's just non-binding. And then their stock goes up. So if Amazon says today, we're going to up our 100,000 to 500,000 and they own 20% of the company, they just made tens of billions of dollars when the stock pops. Yeah. Which I think is exactly what Ford just did. Ford then announced our deal is over after they made the money.

Yeah. The other thing I would want to know from Amazon is what cost center that money came from. Because if it came from, because my back channels suggest that Amazon needs to start stashing that climate pledge money pretty much anywhere. So if the Rivian investment was made as part of the climate pledge, then that to me makes it a tiny bit more suspect. All right. More back of the envelope math. And I agree with that point. At an $80 billion, market cap, they're getting $1,1,000 in credit for their 71,000 deposits. These are fully refundable deposits and cost $1,000. I will say, getting $1,000 for somebody on even a refundable order is a major deal. People don't part with $1,000, you know, for something that's going to come in years.

So I do think that's a real thing. If you give Rivian $100,000 of credit for every single deposit and delivery of their market cap would be $7.1 billion, $5 billion less than what they raised at their IPO. Rivian pickup truck start at 67,500. So if they deliver 10,000 sold cars next year, that'd be $675 million in booked revenue. And a market cap of $80 billion. The price to sales ratio would be $118. Price when you say price to sales means the valuation of the company. But for some reason, they don't say valuation to sales. They just say price. It's implied. It's the price of the company. So that is, for this way, SaaS companies are valued at 20 to 50 times. There's no way

a physical product in the real world should be valued at 118 times. That's bizarre. Still way too high. I would value it at, I don't know, let's say 10 times, 20 times, 30 times. I mean, if you want to be super gracious about it. So if we went 30 times, 700 million, that's 21 billion, something like that. So this back of the envelope math, something to get good at, Molly, when you're assessing startups.

And my producers were kind enough to 25 X. I see here in my notes. So to hit 25X, they would need to do 3.2 billion in sales. So they're far off from, you know, where they would need to be. Right. They'd have to sell and deliver. Thank you, producers, 47,000 cars in 2022.

And they have so far kind of whiffed at a couple hundred. I mean, look. They've done less than 1% of that. It is so easy for us to sit here right now. I mean, I will never discount how hard it is to spin up a domestic car company. That had not, until Tesla did it, that hadn't been done in America in a hundred years. It is a really hard job. But if we were to go back in time to when Tesla was just going public, when Tesla was just starting to produce cars,

I bet if you looked at the number of cars produced and the valuation, like, I would really be interested to see those charts plotted along the same line. All the same skepticism was there. They're not going to be able to make these things. The valuation is absurd. It's all. I don't know that on a pure numbers and froth basis, you can actually count Rivian out based on how this is, because this absurdity has happened before and produced a real car company.

Here's the thing. Smart entrepreneurs, when the market is hot, raise money, and as much as possible at as solid evaluation as you can. So when founders come to me and they say, we just raised six, I literally had this conversation yesterday, hey, you invested, you did our Series A with us six months ago, J-Cal. We've got a lot done. And people want to invest more, but it's only been six months.

And I'm like, so if the valuation was 30 million at the last round, pick a valuation to sell 15% of the company, if you think 100 million is the right number. And you can tell people, we don't need the money. We have 30 months of runway or whatever it is in the bank. But if you would like to put a term sheet in and do a preemptive, we would love to have as as a partner. And we could certainly build a plan that would put that capital together and accelerate our progress. Is that something you might be interested in? And I think they will take it down. So opportunistic fundraising is smart, right? And we see that all the

time with a secondary. Did AMC and I don't know if AMC or GameStop did secondaries after their stocks got run up. But you know, when the meme stocks, AMC and the movie theater company

and GameStop, the selling CD DVD company in physical stores. Selling games. And so AMC actually did a second they sold shares. They did a, uh, what's called a secondary offering, you know, like a public company that just sells more shares and they put 500 million in the bank. So sometimes you could have something that isn't real and then manifest destiny, you know, fake it until you make it.

All of a sudden, Rivian's got all this money in the bank. They're not going anywhere. So maybe they make it. And I hope they do make it. Money can cover. Crap tons of money can cover for a multitude of sins for at least a while. Sure. So if they can use this crap ton to make some trucks, now we're talking. I love that. I can't wait to see the battle between, and by the way, listen, I don't want to pump my guy, but I think CyberTruck has a million deposits. Is that right? I know we put it at a lower price. I think it's only 500 bucks. Something like that, yeah. But I mean, I think it has a million now. And if half of those were to get actually claimed, I mean, Ford's got a major problem. Yeah, one million deposits for Cybertruck. I have been playing devil's advocate with respect to Rivian and because, you know, maybe they'll succeed. But listen, like, once known, the Ford F150 is the best selling vehicle in America, period, full stop every year, every single year. More than the Prius. If I didn't live in Northern California where, like, there's just not places to put trucks that size, I would have a deposit on a Ford F150 right now.

Like, I am a Montana girl. That truck was announced. I was like, that's the one. What would they call lightning or something? The lightning. Yeah. When, no, I want it so bad. Like, I'm obsessed with the lightning.

It looks cool. people know and trucks they have been driving all their lives and cars they've been driving all their lives, start making electric vehicles. It is going to be so hard for anybody who's not a household name to come in. So, you know, I'm being nice to Ribian for the sake of like, well, it could happen or whatever. But the fact is, like, a known brand is going to eat their lunch. When there is an electric BMW that is worth owning and buying and has the range and has the infrastructure, like my Tesla is out. Because I am a BMW girl. Yeah. That'll be interesting. too because we'll see if the BMW will the BMW have to be significantly better or as good

as your model you have the model Y or three and the Y is incredible yeah I just got the dopest snow tires on it by the way from Finland they're incredible I was just driving in the snow in Tahoe and it's incredible I spun out like a little bit twice and it just gripped immediately it was such a great feeling that's awesome because it's all the drive and the roof rack I don't have the roof rag or anything like that. I don't either, but I keep seeing the roof rack on the Y and I'm like, that looks hot. It does look pretty good.

It just looks good. Yeah, I kind of, I kind of do have an affinity for that roof rack because I have this dream of like the entire car having no bags in it and just being super spacious and, you know, our jacket's thrown in the trunk, you know, but not, you know, everything's in the roof rack. Yeah. So tell me this. Would the BMW electric have to be as good or better or 10% worth?

Let's put 20% better, as good or 20% worse for you to pull the trigger on trading in your model Y to go back to BMW. As a BMW fan girl. Right. I mean, and that's really, we're talking about brand affinity, right? So for me as a consumer, it could definitely be 10% worse. And I would still do it. See, that's interesting. I know this car.

I love it. I love how it drives. I trust the brand. I want, you know, there's a version. There's a universe in which you want. Like Tesla has pushed the envelope on what a car. car is and that's great. But like, I don't know what the rain sensing, uh, wipers are sensing, but it's certainly not

rain. Like there's that kind of like, there are things that are solved. A friend of mine just referred to this idea of brilliant basics. Like car makers have solved car stuff. Yes. So if they also solve electric for, for most sort of mainstream consumers, that's going to be who have a favorite brand already. That's going to be a sell.

See, that's a point well said. because I do think having had a Tesla, like being the 16th person to have one in California with the Roadster, because I have the 16th Roadsder. And I do think, like, the basic things are things that they had to start from zero. So you're correct about, like, windshield wipers, like working properly in terms of, like, sensing rain. Like, it's quite possible that, like, the steering column or the design of certain things in a BMW is more refined than a Tesla because they're doing something different. Or they just have him. longer. They just haven't, they've been making cars for longer, right? And then I think self-driving is the key. See, this is where I think people are under valuing Tesla's lead because right now self-driving

works, I would say flawlessly over 90% on a highway and maybe flawlessly 75% to 85% on what I'll call simple streets. Oh, you're having to Arizona streets or something. Yeah. But I don't use it on local streets because I just prefer to drive and I don't want to deal with the edge cases. But on the highway, I am addicted. And I was going to buy, I love corvettes. I used a corvette. And I was like, maybe I should get the new corvette. And I was like, eh, I can't because it's a gas. I don't want to burn gas ever again. I care too much about the planet. And my daughters will go crazy on me. And I kind of am addicted to self-driving because it's, it's not just that I don't want to pay attention when I'm driving. It's at the safety of self-driving

and the smoothness of it is for me, hard to go backwards on. Because I, when I'm driving my daughters, if I have it on autopilot on the road and I'm paying attention, that's much safer than me not being on autopilot. And that's what the statistics are showing. Is that, you know, putting aside the people doing stupid things with self-driving technology, the majority of people are just getting better and better and better in terms of the number of accidents.

Like it's really hard to crash a Tesla on the highway if you have autopilot on. It's just, it would have to be some freak thing like a boulder falling from the sky in front of you. Like self-driving keeps distance. the premise and purely as a solo, as a one person case, I have not had good luck with the software. I've had a lot of auto braking on the freeway. Really? That's bizarre.

I don't, yeah, I don't use it. I actually don't consider it. I never had an auto break on the freeway. I had an auto break twice at like 75 miles an hour with my kid in the car. Like if somebody had been behind us, we'd be dead. And so now I'm just like, I don't use it. And there was nothing on the road. It wasn't like a plastic bag kind of situation, huh?

No. The second time I saw a bird. Yeah. But no car should slam on the brakes for a bird. But again, this is my individual experience, right? Not everybody has had. There are like forums where people talk about auto breaking, but I assume we're, I have always had a magnetic field for technology.

If some thing can go wrong, I'm going to be the person that it goes wrong with, which is why I'm like a nightmare tech reviewer. But I have had that experience with my why. Here's the thing. What's going to happen is we're quickly going to get to the point where I think people are going to start looking at this because self-driving technology is getting here from multiple vendors, we're going to start looking at, hey, in aggregate, how much safer are Tesla drivers versus BMW drives?

And that's where, or the new escalade has self-driving on it or some lane control. And so if we see those self-driving systems make people 10, 20, 30% safer, that's going to be like the mega, the statistics are starting to show that. And I don't know if you saw in the latest Tesla app to have the safety score. Did you turn on your safety score where it grades you? So inside the test lap, exactly. But it tells you disengagement from autopilot, hard stopping, you know, leaving your lane. And it gives you a score out of 100.

And so they're basically telling you how good of a driver you are. And let's just say there's another person in my house who drives my car sometimes. And, you know, like I'm like up in the high 80s trying to get into the 90s. And then all of a sudden my score goes down to 70. And then I look and it's like, who was driving my car? and it's at 55. I'm terrified. I'm just absolutely terrified to know what my

safety score is. It's just best if I don't know. I'm just saying the car goes really fast. It's zippy. All right, listen. Oh, there it is. So there's your safety score. See that?

That's what it looks like in your Tesla app. You can go turn it on right now. And this is going to be amazing. Well, here's the thing. Tesla will say, if you're over 90, we'll ensure your vehicle because we can replace your vehicle. And so they'll just skim, imagine if Tesla skim the cream, and just said, anybody who's above 90 for the past year will insure you, please stay above 90.

If you go below 90, we're going to give you like a warning. If you're below my 90 for, I don't know, 100 days, you're going to have to find a new insurance provider. I'm literally looking for this in the app right now. I am listening now. So great. There's some place we turn on in settings, I think. But this is going to, if Tesla does this, the most profit, this is going to just kill insurance companies because the insurance companies make their money from the most profitable drivers. the safest drivers, obviously.

And if you took all the safe drivers and you have the data proving they're safe, not they said they're safe, not their previous accidents, but their real-time data. Imagine it said, we're going to look at every month. If you are above 90, you pay, you pay $100. If you're in the 80s,

you pay $200. If you're in the 70s, you pay $300. That would be incredible. They would just give you your bill at the end of month based on your score. Wow. That would be incredible. That's all the matter. I wonder if that's going to happen. I wonder.

I wonder. All right, everybody. This has been Molly's first show. Good job, Molly. The producers were like, this is really good. We're good together, yeah. We're good together. We're good together.

I have that podcasting eye right now, though. This is really a freaking delight. You're smart. We don't have to agree all the time, as people are saying in the comments. We're going to have a really good time on the show. It's going to be fun. It's going to be different than what you did in the last couple iterations. but you and I have mutual respect and we're not going to agree on anything.

And it's going to be, I think it's also good for me. It's like, it's been lonely. I'll be honest. Because doing the news alone, people do like when I do it alone, but it's kind of like this Ben Shapiro existence where like,

you know, I kind of want to hear somebody challenge my, you know, opinion. Like when Ben does his show, unless he's a top five podcaster, I think, he's just like,

news item, here's how you should think about it. News item, here's how you should think about it. And that's what I do every, day. And I kind of want somebody else to say, like, is that true or, you know, well, know that I say that to my phone when I'm on my walks all the time when I'm listening to the show. So I'm like, I'm ready. You're ready. You're like, no, J-Cal. That is not how

the world works. All right, everybody. We'll see you next time on this week in startups. Molly starts the week of January 3rd. And you can reach all the producers at once by emailing producers at this week and startups.com. If you want to come to a local meetup, this week in startups.com, slash meetups. And we, I think we're on pause because of the pandemic stuff for a couple weeks, but I think people are going to start them up again in the end of January. And that's just founders. We're founders by founders.

If you want to learn more, you can join our Slack, which is where we talk just about this show and the meetups and being founders. Nothing else. It's not a marketing channel for you. If you're a marketer, we will ban you. Every day, we ban one person for posting to multiple Slack channels. They're marketing nonsense. This week in startups.com slash slack.

So there you have it, folks. We'll see you in 2022. See you next year. See you next year, everybody.