Episode 51: 2017 Holiday Special

[0] That is definitely the best news in a long time.

[1] Yeah.

[2] Dick Kossela has a good tweet.

[3] Roll Tide.

[4] Roll Tide.

[5] Welcome to episode 51 of Acquired, the podcast about technology acquisitions and IPOs.

[6] I'm Ben Gilbert.

[7] I'm David Resenthal.

[8] And we are your hosts.

[9] We are coming to you from mid -December.

[10] in a second annual acquired holiday tradition, the holiday special.

[11] David, are you excited?

[12] I'm so excited.

[13] I'm jealous because Ben has a glass of rosé and I am in the office and we don't yet have any whiner beer here.

[14] I'm toasting you in spirit.

[15] We'll have to do that in person at our meetup.

[16] And we'll talk about that in a moment.

[17] Okay, listeners now is a great time to thank one of our big partners here at Acquired, Service Now.

[18] Yes, ServiceNow is the AI platform for business transformation, helping automate processes, improve service delivery, and increase efficiency.

[19] 85 % of the Fortune 500 runs on them, and they have quickly joined the Microsofts at the NVIDias as one of the most important enterprise technology vendors in the world.

[20] And, just like them, Service Now has AI baked in everywhere in their platform.

[21] They are also a major partner of both Microsoft and NVIDIA.

[22] I was at NVIDIA's GTC earlier this year, and Jensen brought up ServiceNow and their partnership many times throughout the keynote.

[23] So why is ServiceNow so important to both Nvidia and Microsoft companies we've explored deeply in the last year on the show?

[24] Well, AI in the real world is only as good as the bedrock platform it's built into.

[25] So whether you're looking for AI to supercharge developers and IT, empower and streamline customer service, or enable HR to deliver better employee experiences, service now is the platform that can make it possible.

[26] Interestingly, employees can not only get answers to their questions, but they're offered actions that they can take immediately.

[27] For example, smarter self -service for changing 401K contributions directly through AI -powered chat, or developers building apps faster with AI -powered code generation, or service agents that can use AI to notify you of a product that needs replacement before.

[28] four people even chat with you.

[29] With ServiceNow's platform, your business can put AI to work today.

[30] It's pretty incredible that ServiceNow built AI directly into their platform.

[31] So all the integration work to prepare for it that otherwise would have taken you years is already done.

[32] So if you want to learn more about the ServiceNow platform and how it can turbocharge the time to deploy AI for your business, go over to ServiceNow .com slash acquired.

[33] And when you get in touch, just tell them Ben and David sent you.

[34] Thanks, ServiceNow.

[35] If you're new to the show, we've got a slack that you can join at Acquired .fm .m. We're over a thousand strong and, you know, good place to talk about tech M &A, recent news that happened, and more importantly, we actually have more DM activity than there is chatter in the main feed.

[36] So cool to see the connectivity among you listeners who are getting to know each other better by being listening to as a show.

[37] Yeah, we're almost at, we're almost at 1100 now.

[38] Our growth is accelerating.

[39] We're going exponential.

[40] That's cool.

[41] My date is old.

[42] I got a look.

[43] Well, speaking of listeners getting to know each other better, we mentioned it on the last show, and we got to drive the point home.

[44] We're going to be in San Francisco.

[45] David's already down there.

[46] I'll be flying down Thursday, January 18th.

[47] Mark your calendars.

[48] It'll be in the evening.

[49] We were still figuring out venue, but we're super excited to hang with our listeners for a few hours, and our densest concentration of listeners is in the Bay Area.

[50] New York and Seattle are up there too.

[51] But the Bay Area has certainly been growing the fastest and excited to always go to spend time down there.

[52] So.

[53] Yeah.

[54] And special shout out.

[55] And thank you to Preet, a longtime listener who has been helping organize and pull this together.

[56] So thank you.

[57] And this is, we can't wait to see y 'all.

[58] Not only to organize, but to really spark the whole thing.

[59] I think this is the thing David and I keep talking about haven't done and pre thanks for um inspiring us to do it and that is PR 3 3T uh if you're looking in the acquired slack.

[60] um all right david what else we've got it we've got an announcement for uh for next year we do we are uh going to be evolving the format a little bit in 2018 big things happening and acquired we're going to have to put the the old format back in the acquired museum that we talked about that's right that's right yeah It's scheduled for construction some time in, I haven't gotten a date yet from the crew.

[61] Sometime in the next decade.

[62] Don't worry, though.

[63] We're not making major changes to the show, but we are going to move to a season format.

[64] We thought after 50, now 51 episodes, it would be better to block this into a traditional podcast season format.

[65] And that's going to let us do a few things, which we're excited about.

[66] Yeah, we're most excited because it basically gives us a framework to try new things.

[67] So if we want to do something kind of radical, at the very longest, it can last one season.

[68] Of course, we still can change things on the fly, but can add or remove sections or change the format for seasons at a time.

[69] And those seasons will be six months, approximately 10 episodes.

[70] And one of the things we're most excited about is to do miniseries.

[71] So we've been doing it kind of informally with things like the Disney saga and talking a lot about basically different episodes that stringed together and tell a single narrative.

[72] David and I have been thinking a lot about, well, what are trends that we really want to cover and what are things that we really want to be thoughtful about and learn more on our own and have an impetus to do kind of a wider body of research before doing the episodes?

[73] And so I think you can probably expect one mini series as a part of the season early next year.

[74] this season.

[75] And if it works well, hopefully each season going forward.

[76] So we're thinking this will be probably around three episodes out of the 10.

[77] So seven, you know, normal standard acquired episodes and three for a for a mini series that we're going to change up in each season if it works well.

[78] That's right.

[79] And the most important thing is the name, which we are hyper -creatively calling season X. No, it's going to be season two.

[80] season 10 we're skipping seasons two through nine we're actually releasing season two and season 10 simultaneously 10 is actually marked by a why um but you'll get it it makes sense we put a lot of time into this ben this is your cheesy joke for the episode this is what happens when ben drinks for his day that's right that's right or should i yeah i thought about earlier making the joke that our uh meet up was going to be down in um acquired HQ2 in saying Francisco.

[81] Perfect, perfect.

[82] I guess I do.

[83] Well, that will definitely be a prediction for 2018 later in the show.

[84] Where is HQ2?

[85] Oh, I actually, this isn't in my notes, but like I do have strong conviction around a prediction for that.

[86] Oh, all right.

[87] Well, save it for 2018 predictions.

[88] I'm adding it to the dock now.

[89] All right, David.

[90] Anything else before we dive into the 2017 year in review?

[91] No. Let's do it.

[92] All right, so listeners, in 2017, we recorded 21 episodes, this being our 22nd, and David and I have gone through and handpicked each of our favorite.

[93] So, David, why don't you go first?

[94] What was your favorite episode?

[95] So, well, I'm going to start with my runners up for, I've got two runners up for.

[96] You know, it's like, I love to give multiple grades, you know, I just can't, I have trouble picking this one.

[97] God, we try and have a format.

[98] I know.

[99] Okay.

[100] Well, real quick, my runners -up are the Snap IPO and Square IPOs.

[101] Both great shows near and dear to my heart.

[102] But my winner, I cannot not pick our last episode, Beats.

[103] That was just too much fun.

[104] I mean, anytime you're talking about, you know, Jimmy Iveen, who's probably the coolest person alive and Dr. Dre in the same building, starting a company on the beach, getting acquired by Apple, largest.

[105] acquisition ever it just doesn't get any better than that no no somebody's been watching the documentary so good yeah if you have on that later listeners the defiant ones the HBO documentary was freaking awesome like if you like the episode even if you don't if you like like rap or entrepreneurship or scrappy founder stories or reflections on pop culture in the last 50 years like you got to go watch the defiant ones so good yeah my favorite was one of your runners -up uh the square IPO i felt like that was one where um you know sometimes on the show we're all over the place and sometimes we've occasionally we have really good structured thinking and i thought in that one we just not on this episode i thought in that one we um i will stand by the conclusion we made on that one forever and i felt like all of our reasoning to get there was really well founded i love that the fact that um We really got into like why the narrative was the way that it was about the company when it IPOed and basically poked all the holes in it and that it's a really sound company with solid fundamentals today that continues to do what it was doing when it was a private company and everyone just looked at it wrong.

[106] And so, yeah, pumped about the company square and pumped about that episode.

[107] I stand by my grade on that one, unlike the YouTube episode, where we gave a C. And every time I see some new article about YouTube.

[108] I'm like, we really, we really have to redo that episode.

[109] Yeah, we really should do.

[110] Maybe that would be a fun thing to do in season two or maybe season three is revisit, you know, that could be a mini series at some point revisiting.

[111] We should revisit Instagram.

[112] We should revisit YouTube.

[113] Especially when we were wrong.

[114] Like where we were wrong and why.

[115] Yeah.

[116] I'm not on the surface without doing the research yet.

[117] I'm not 100 % convinced we were wrong on YouTube.

[118] Will we give it a C?

[119] Yeah.

[120] And it was largely.

[121] around opportunity cost and basically spending a whole bunch of time and money on what we kind of called a distraction for the break -even business of YouTube.

[122] But I'm way more bought in on what it does for the rest of Google in the Google ecosystem than I was before.

[123] I mean, it's an incredible product.

[124] I'm going to talk more about it on this show.

[125] But it's also still not clear that it makes money, right?

[126] I haven't actually looked in a while.

[127] Yeah, but I think that's about right.

[128] Yeah.

[129] You know, David, you're an early stage VC.

[130] You don't necessarily invest in things that make money.

[131] So, you know, what do you care?

[132] That's a low blow, bit.

[133] Low blow.

[134] Speaking of what, you want to move into our personal 2017s?

[135] Yeah, yeah.

[136] We thought we'd add this section to the show this year, especially, you know, we're doing our holiday episode here, and we talk a lot about topical things on the show and companies and stories, but we don't talk that much about ourselves.

[137] Yeah.

[138] And I thought that was like the right thing to do.

[139] But we've gotten a lot of feedback from listeners, people in person and people from messaging us on the Slack saying, like, you guys mentioned early what you did.

[140] You know, like you can look us up on LinkedIn or whatever, but that we don't actually ever talk about our day to day.

[141] Yeah.

[142] And it's so funny.

[143] Like as acquired's gotten bigger.

[144] I mean, at a certain point, I think it was maybe kind of the beginning of this year, like, or maybe end of last year.

[145] Like, we passed a threshold where like way, I don't know about you been, but like way more people in the world now know me as like co -host of Acquired than anything else I do in life, which is so great.

[146] And yet, you know, Ben and I spend, you know, a small, small portion of our, you know, waking hours dedicated to Acquired.

[147] To the Acquired Media Empire.

[148] Hey, museum coming.

[149] Yeah.

[150] 2019.

[151] That's right.

[152] But yeah.

[153] So, I mean, for me, 2017 was about as big a year as you can get.

[154] So almost exactly a year ago at the end of 2016, Jenny, my wife, finished her PhD, which itself was an incredible accomplishment.

[155] And I was and am so proud of her.

[156] It took her six and a half years.

[157] And I would, woo, indeed.

[158] Indeed.

[159] And I was also thinking about and embarking on a new journey that I am on now.

[160] And so those things coincided.

[161] And at the beginning of this year, I left Madrona, the VC firm where I was in Seattle, left working them there full time.

[162] And Jenny and I actually spent the first couple months of the year living in Europe.

[163] We moved to Paris for a couple months to celebrate her finishing.

[164] and starting a new journey for both of us.

[165] And David, during that period, your carve -outs were like way, way better than mine.

[166] Oh, man, I had so much time for carve -outs.

[167] It was magical.

[168] My carve -out is Israel.

[169] Yeah.

[170] Because I just got back.

[171] And it was so great.

[172] Yeah, definitely back to the real world now.

[173] But it was great because a little known fact by actually most people in my life.

[174] But now to be known by the acquired audience, I was a French literature major in college and Jenny was the natural natural path to yeah natural path to being a technology VC early stage technology BC but I lived in France in college and for a summer and Jenny also studied abroad there and neither of us had been back since her time in college so it had been 10 years really amazing to have this chance to go back to a special place for both of us.

[175] And then this summer, we moved back to the States and moved to San Francisco, which has been great.

[176] And I loved Seattle, still spend a lot of time there, but also love San Francisco.

[177] And Jenny's from here.

[178] And it's just such an amazing city that has so much history and is so much, you know, is the epicenter of tech, but is also just so much more than tech in Silicon Valley.

[179] So it's been great, you know, exploring this new city.

[180] And then also I've been working on, working on my new thing with my partner and my business partner.

[181] Unfortunately, we can't talk just yet about what it is coming soon in 2018.

[182] But the founder journey has been everything it's cracked up to be.

[183] It's been wonderful, crazy, scary, awesome, terrifying.

[184] You know, I think a bunch of people at the end of the year.

[185] have been asking me, you know, how's it been?

[186] And both, I had no idea the direction it was going to go and, like, could never have foreseen all the daily twists and turns along the way.

[187] And yet at the same time, we're, like, moving along exactly in the direction and pace that we thought we were in the bigger picture.

[188] And it's just been such a cool experience.

[189] And really has helped me build a lot of empathy for, you know, all the other founders out there that we cover on the show that I've worked with NBC.

[190] And I'm sure.

[191] or, you know, as we know from our survey, many of you out there as well.

[192] So that's been my 2017.

[193] But one of the best things, for sure, has been acquired.

[194] And especially now that we don't live in the same city, I'm just so glad we keep doing this.

[195] And it's turned into much more than either of us, I think, ever would have expected.

[196] So thanks, Ben, for being my co -host along the way.

[197] Dude, yeah, likewise.

[198] You know, it's caused us to make a nice, nice AV investment.

[199] I never thought I'd be a person with an office with four microphones and Mike stands behind me, but here I am.

[200] Dude, one of the things I enjoyed most about the defiant ones was all of the shots of, you know, Dre and all the other artists in the studio and, uh, you know, pop filters.

[201] Like, we have, you know, Dre quality pop filters on our microphones.

[202] It's like seven bucks.

[203] It's the cheapest part of the whole setup, but it makes it look the most legit.

[204] I know.

[205] We are totally legit.

[206] Well, David, it's funny how we have, you know, very different 2017s, but parallel in a lot of ways.

[207] And one of the ways that you were just mentioning is, you know, there's all these crazy ups and downs in sort of the founder journey, but you are exactly in the direction, doing exactly the things where if you were to have drawn the line, you know, when you first started, where you thought you'd be.

[208] I'll tell this story in Medius Rest.

[209] So talking about a conversation I had yesterday with one of our investors, and I went through an update deck of everything that's going on with the company, and he goes, looks great.

[210] It's exactly where I would have pegged you guys.

[211] I haven't heard from you in a few months, but this is great.

[212] Thanks for letting me know, right on track.

[213] And in my head, I was thinking, right on track?

[214] Like, all the, you know.

[215] Every day has been an adventure.

[216] I know.

[217] I know.

[218] So my year, I think I've talked about this a couple times on the show, but my normal job is I'm the co -founder of Pioneer Square Labs, which is a startup studio that's based in Seattle.

[219] It's sort of a new model for entrepreneurship that sits somewhere in between being the actual operating founder of a company and being an investor.

[220] Our model is that we start companies partnering with a great entrepreneur at sort of various stages.

[221] Either we work with them from the moment that we come up with the idea together or, sort of in that first early week or month.

[222] Or we have an idea internally in the studio.

[223] It's about 20 people, heavily biased toward engineers.

[224] We prototype things.

[225] We talk to customers about it.

[226] We try and bring it to market.

[227] And if that's going well, then we start finding people who are really domain deep, who are amazing founders and work with us.

[228] And constantly trying to find different ways to plug in with great founders that are along various parts of their entrepreneurial journey, so branching out the model a little bit.

[229] One thing that I did this year that's very different is since July, I've been the interim CEO of our most recent spin -out called Taunt.

[230] And Taunt is an e -sports company for folks who haven't been tracking.

[231] E -sports is this insane phenomenon where people watch other people play video games competitively to the tune of 300 million people per year.

[232] It's growing very quickly every year.

[233] It's huge in Asia and growing quickly in the West.

[234] And what Taunt does is it's a way for people to have more fun being fans of e -sports and to compete with their friends while they're watching in sort of a live fantasy -type experience.

[235] So you and your friends compete against each other, and it's a social competitive app.

[236] Boy, the number one thing switching from my job as a, you know, basically serially starting these ideas and then working to transition off them to start the next one, to sort of running with one, at least in this interim capacity, has been a remarkable.

[237] I way underestimated how much focus I would need to have.

[238] I've basically stopped doing not only everything at PSL, but so many other things in my life because running a company just requires ridiculous, ridiculous focus.

[239] And every single day, it's a battle of all the really important things that need to happen that won't happen today.

[240] actually the T .A. McCann, who's another awesome founder and investor in the Seattle area, calls this itindi important things I'm not doing yet.

[241] And he keeps a conscious list of things that are like extremely important, super high priority things, but like not, you know, it's either not as urgent.

[242] It's not a hair on fire problem as other things or it's just not as high priority as some other high priority things.

[243] I would describe the rest of my life as I, I would describe the rest of my life as worked a lot, but I didn't, you know, like if I ever needed to leave work at three or something and not check in for the rest of the day, that was kind of fine.

[244] And it's being in the founder mindset really means it's really not the case.

[245] Like there are things, there are sometimes things that just absolutely must, must be done today, this hour.

[246] Maybe the number one skill is constantly being able to be on all the time, be ready for anything, and play schedule to and understand that whatever you looked at and thought your day was going to be at the beginning of the day may actually not be the correct prioritization given new information and having to juggle that on the fly.

[247] And a lot of you out there are probably laughing and know this well and have been in this situation a lot.

[248] I've started other things before but never a venture back thing where we were sort of quickly building a team, quickly in market.

[249] And yeah, the biggest thing is really being able to quickly adapt and reprioritize on the fly.

[250] You have multiple, you know, handful of people that, like, depend on you, you know.

[251] I mean, that's one thing that's not our structure here.

[252] And so I'm lucky that I don't have that particular challenge of being a founder.

[253] I still have a little bit more kind of autonomy.

[254] But I got to imagine, like, you know, in some ways, you know, as founder and CEO of something, Like, you have the least amount of freedom.

[255] Yeah.

[256] And at least in the pre -product market fit stage where you're actually not sure what the North Star is.

[257] Like, you have an idea, you have a value or a mission that's North Star, but there's not a defined implementation yet.

[258] There's a lot of thrashing.

[259] And, you know, you try and reduce CPU thrash, but ultimately you are switching back and forth to a lot of things, and there is high switching cost to that.

[260] Yeah.

[261] Is there ever?

[262] Is there ever?

[263] despite all the things that we have going on in our lives, like I said, I'm just so glad we keep this tradition of acquired.

[264] I'm proud of us.

[265] Oh, my gosh.

[266] Yeah, I mean, I'm with you.

[267] Other than my time when Jenny and I were, you know, hanging out gallivanting around Europe.

[268] We were not exactly gallivanting, but, you know, when my carve outs were much better back then, like I basically have done nothing else except work and acquired this year.

[269] Yeah, that's the other thing is.

[270] I think my carve -out's probably suffered because there's weeks where I'm like, I'm supposed to have read something that was not an email since the last time we recorded.

[271] Yeah.

[272] I am in that boat, too.

[273] Well, should we review our 2017 predictions that we made last year?

[274] Sounds great.

[275] See how we did?

[276] How wrong were we?

[277] Well, let's see.

[278] Okay, so my first one, should we trade off?

[279] each of ours?

[280] Yeah, that sounds great.

[281] So my first one was that aggregation theory was going to become even more important, Ben Thompson's seminal aggregation theory, was going to become even more important in 2017 than 2016.

[282] I think I kind of nailed that one.

[283] I mean, it wasn't a very controversial prediction.

[284] I think in 2017 it has become super clear that the biggest tech companies, you know, the Facebooks, the Amazon's, the Googles, the apples.

[285] have just consolidated so much power in the space, continue to consolidate even more power.

[286] And that is, you know, kind of, I think, a direct result of, you know, everything that's implied by aggregation theory.

[287] And Ben is actually, Thompson has actually shifted a lot of his writing, I think, to this.

[288] You know, what is the consequence of this?

[289] Yeah, I mean, it changed our economy.

[290] It changed our political structure.

[291] It changed, it changed, it literally changed, like, the way that people interact with other humans.

[292] Like if you look at a society as a collection of political, social, and economic changes, like, it is the driving force behind the biggest change of all three of those.

[293] I mean, if you want to talk about income inequality, if you want to, there's a variety of things.

[294] I mean, I think aggregation theory is the thing driving most of those.

[295] Yeah.

[296] And super specifically, I mean, in the startup tech ecosystem, you know, we're kind of at a moment now where, like, for pretty much any kind of product and company that you have, If you want to do user acquisition, like, you have two choices.

[297] You have two destinations, like Google or Facebook, you know.

[298] It's striking.

[299] And everything else is a growth hack.

[300] Yeah.

[301] And everything else is like you're rolling the dice.

[302] Yeah.

[303] Super interesting.

[304] I saw a great tweet earlier by Patio 11, the frequent commenter on Hacker News.

[305] And I think he now works on Stripe Atlas.

[306] It was a great tweet storm.

[307] We'll include this in the show notes of great advice that you can't hear.

[308] too many times and that you should just people should continue to talk about even though they feel it's old hat because there's always new people that can benefit from hearing it and one of the observations was that the hardest thing to do in a b -to -be company is sales and the hardest thing to do in a b -to -c company is distribution and if you're starting a consumer company you basically have facebook or google to go to and you're effectively just paying a tax to get to their customers and they get bigger and they get better.

[309] And every single company that bootstraps their business or not bootstraps, I mean, Coca -Cola pays those companies huge amounts of money per year, everybody does in order to reach their customers because they have all the customers.

[310] And that just fuels the flywheel even more.

[311] So it is, you know, the hardest thing to do in consumer is distribution and they have the lock on distribution.

[312] I just noticed one of my predictions from last year is the big aggregators get bigger.

[313] I think we have the same prediction.

[314] Basically the same thing.

[315] All right.

[316] Check on that one.

[317] Yeah.

[318] Another one that I had, I think the rest of mine are kind of hard to check in on.

[319] I said people get more serious about universal basic income.

[320] I think the people who were already proponents of universal basic income got further entrenched in that view based on our political and economic structure now.

[321] I don't think that it picked up any traction in any way.

[322] I think the experiments continued.

[323] I think a lot of great books were written on it.

[324] I don't think is really picked up steam.

[325] My next one, I said we would see more tech IPOs in 2017 and 2016.

[326] And we did, but we didn't see that many more.

[327] So there were 26 in 2016 and 33 in 2017.

[328] I'll call it.

[329] I qualify that.

[330] That's more, but nowhere near, you know, the heyday of the earlier 2000s.

[331] There's so many companies that, have raised so much money in the private markets and need to exit one way or another, and they still have not exited.

[332] And this is a trend that I think will continue into 2018.

[333] But some of the big ones, big IPOs we did see in 2017, some of which we cover here, Snap, Blue Apron, Stitch Fix, Cloudera, Octa, MuleSoft, Roku, MongoDB, and Seattle native Redfin.

[334] All went public in 2017.

[335] Good companies in there, just not a ton of them.

[336] Yeah, yeah.

[337] Another one that was one of mine last year was the commoditization of machine learning and that the value is in the data itself and not in the actual machine learning algorithms or infrastructure to do that.

[338] That's absolutely played out.

[339] Looking at Reinvent this year, looking at a lot of Google Clouds announcements, there really are more and more machine learning off -the -shelf tools.

[340] And it really is all about not only having the data.

[341] data, but having the data in a great format, you're processing pipeline and correctly sort of labeling and cleaning data to be used by machine learning.

[342] I'll disclaim here that I'm not an expert on this, but we haven't really seen like new math in any way that has radically changed what people are doing with machine learning.

[343] It's much more about the availability of tools, more people having access to those tools.

[344] And a big thing is just sort of the computer being more and more available.

[345] There's some newer models that people are using, but it's largely about making it more available and less expensive for companies to hire the large teams that was previously required to do data science.

[346] Yeah.

[347] Well, so in contrast to a new, exciting technology becoming easier to use and more widely available, my prediction or I guess question more for 2017 is we will see.

[348] if VR becomes a big thing or not.

[349] And, well, unfortunately for the VR industry, at least for the moment, it's still not a big thing.

[350] So we'll see.

[351] I wouldn't, you know, call VR and AR out per se.

[352] I don't think this is the yet at least the 3D TV of technologies.

[353] But AR is more in.

[354] Like, AR did great.

[355] Or AR at least has a path to becoming mainstream.

[356] A path.

[357] But it's still not here.

[358] No. Here's a speculative question is, how do you call that earlier?

[359] I mean, there were plenty of VR naysayers, but looking back on it, I mean, what are the signals that people just weren't going to buy the devices at the volume that we were all hoping earlier?

[360] So you don't make those investments or you don't spend years of your time working on those companies.

[361] Some people are going to weather the storm and do great, and when it finally does become a thing, if it becomes a thing.

[362] But, you know, how do you spot that?

[363] yeah i don't know i mean the kickstarter you know numbers for oculus were really good along the way and then you know their their dev kit shipments um but uh and and the uh you know the uh you know the vibe is an incredible piece of hardware i don't know i mean i guess the thing is it's just like still not easy to access for you know most people for your mainstream consumer like you still need to do a lot of work to get the pay off of the incredible experience and spend a lot of money.

[364] It's not as easy as just like downloading the number one app in the app store or like Coinbase, you know?

[365] Yeah.

[366] That was something we did not predict.

[367] No, no we're in here just to say anything about crypto.

[368] No. Well, we missed that, but we did.

[369] In fact, I would say I may miss it again.

[370] Yeah, I don't have, I don't have anything in my 2018.

[371] predictions about crypto, probably should.

[372] All right.

[373] My last one was, I said, the mega trend of urbanization would continue.

[374] I think it probably did.

[375] I don't have a great way to measure, but more people in the world all around the world.

[376] Moving to cities doesn't seem to be abating anytime soon.

[377] Nope.

[378] And mine was, does it become more expensive to produce physical stuff?

[379] David, I honestly can't remember my rationale behind this.

[380] Well, I think you were saying that, like, as, you know, like, take China, for instance, you know, as the middle class rises, is it going to become more expensive, actually, to produce stuff physically in China, like, fiscal goods?

[381] Right, right.

[382] Well, the cost of DRAM went up, component costs of smartphones went up.

[383] But I think that probably has to do with more, like, more business, like, structural business dynamics than it does rising labor costs.

[384] Yeah, I'm not sure that that actually.

[385] happened.

[386] If anything, I think more and more returns are going to capital as opposed to labor around the world.

[387] All right.

[388] Final section to round out a review of 2017 before we look forward bravely and boldly into 2018.

[389] Our top acquired theme of 2017.

[390] So unlike last year when we did this, we reviewed themes that we talked about most on the show.

[391] That's actually way, way too long.

[392] way too long and not that interesting.

[393] So we're taking a more qualitative approach this year.

[394] And what we think, you know, looking back on our body of work for this year, like what stands out to each of us as like the kind of most impactful or interesting theme that we've discussed on the show?

[395] So for me, it's actually a pretty recent one that I think I first brought up on the Stitch Fix episode.

[396] but then also talked about on the beats episode.

[397] And that's this concept of the way to really, you know, as an investor, make outsized returns.

[398] And as a company and as a founder to really have a large, large impact as opposed to a smaller impact is to do something, you know, make a, have a thesis with a company or an investment that is, obviously you want it to be correct.

[399] But being correct is not enough.

[400] you have to also be correct and non -consensus, not obvious.

[401] And this was something that Andy Ratcliffe, one of the founders to benchmark and one of my professors in business school talks a lot about.

[402] And he took this idea from Howard Marks at Oak Tree.

[403] But it's really, really powerful when you internalize it.

[404] And if you look at, you know, Stitch Fix, as I mentioned in Beats, you know, but I think also Square, Starbucks, Snap.

[405] All of these are companies and products that, you know, they were both like the correct product for the time.

[406] but before they were started, like, nobody thought, like, you know, who's going to go to a store to drink coffee?

[407] Like, people buy coffee beans to drink at home, you know?

[408] Or, you know, who's going to pay a lot of money for headphones that aren't reference headphones?

[409] Like, the $2 ones that you get with your, you know, iPod or, you know, an iPhone are good enough.

[410] Or, you know, a snap, like Facebook dominates social media.

[411] Like, why do you need another, like, you know, method of sharing photos with one another?

[412] And I think it's a really powerful idea.

[413] Again, both for, both for investing, obviously, but also as a founder in product design as well.

[414] Yeah, I totally agree.

[415] It's a good theme.

[416] Mine, I don't think we explicitly called this out on a show, but we talked about it in many of these episodes.

[417] In 2008, call it, we started, maybe 2007, we started first hearing about social media.

[418] And it was a term that I don't think I had quite understood and dieted.

[419] dissected for a few years of really like what is what does it actually mean I get that we're calling Twitter social media like I understand that what does it imply as you dig into it and and really understand like okay it means basically everyone is a citizen journalist and it won't just be for this in this short form capacity of course you have the rise of medium you have YouTube you have basically the the rise of the internet allowing anybody to become a creator where instead of a one to many world where you have publishers that push out to a very small number of publishers that push out to millions of people.

[420] You have, you know, everybody on earth able to push content to everybody else on earth and build followings in different ways.

[421] It really makes all media truly social and all media, the future of media, much more about do you have a compelling message rather than are you able to fit in with a body of content that has existed today?

[422] And in the ability to be non -conformer, which David actually fits in pretty well with your tech theme to be able to be differentiated by be nonconforming and still get distribution on that that was a new piece of value that was unlocked and the biggest thing to come of all that is that the internet and social media really removed gatekeepers.

[423] It removed a lot of the power that was held by people that controlled the very few that could actually publish that you had to fit in with that you had to be conformed.

[424] And you see this in so many different, there's so many different manifestations of which one of one amazing thing for the world is the fact that Times person of the year was the silence breakers.

[425] I mean, for the first time, there were people, there were women, primarily that were able to stand up and talk about their stories and know that they weren't going to be silenced for that by the people that controlled all the distribution because you don't have to be afraid in this world, and there are ways to get your message out, even if you don't go through those gatekeepers trying to silence you.

[426] Yeah, totally.

[427] And, like, you can tell your story on your terms, too.

[428] I mean, Ben Thompson's person of the year was Susan Fowler, the Uber whistleblower.

[429] On her own blog.

[430] He talks about it.

[431] Yeah, on her own blog.

[432] Like, you know, she didn't have to go to, you know, the New York Times to get them to break the story and have them tell it on their terms.

[433] And, like, who knows what happens?

[434] Like, yeah, on her own blog, like, she, wrote it, she hit published on her terms.

[435] It's pretty incredible.

[436] And of course there's negative repercussions to this too.

[437] Of course, you start to get into, you know, you only start reading things from, that are lower quality because they don't have editorial process, that are only confirmation bias thing.

[438] I mean, there's, of course, many problems with it.

[439] But the removal of gatekeepers by social media broadly is finally coming to fruition.

[440] But I would, what's super interesting, though, is like, I would say.

[441] like, yes, social media has definitely removed people, individual people and organizations of people who are gatekeepers.

[442] But like we were talking about with the just growth and consequences of aggregation theory earlier, like there are now technologies that are gatekeepers.

[443] So if you want to market to people, you know, in any sense, like you need to pay the toll to Google and Facebook.

[444] Yeah.

[445] There's different, there's different taxes along the delivery now than there were before.

[446] Yeah.

[447] And they're, um, they're more obvious and they're more monetary.

[448] Like, it's, it's less about paying your dues and more about paying money.

[449] And, you know, even outside of marketing, like in terms of getting your voice heard, um, yes, you can do it on via social media and on these platforms, but you also have to pay the toll.

[450] You have to pay the toll with your attention and your contribution of that content to that platform, which is going to monetize the attention that it generates.

[451] Yep.

[452] And everybody is either paying the toll to do distribution or paying the toll.

[453] I'm sorry, paying the toll to do acquisition or paying the toll by giving their content to Facebook and Google with accelerated mobile pages, with the subscription platforms are both launching, with Facebook Instagram articles.

[454] In all forms, some of the best content in the world is being contributed as part of the bargain that the publishers are striking with platforms.

[455] Indeed, indeed.

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[476] All right.

[477] 2018 predictions?

[478] 2018.

[479] Here we come.

[480] Well, maybe I'll start off because it's it's appropriate.

[481] I didn't plan it this way.

[482] My first prediction is that the consequences of aggregation theory continue.

[483] David, you make the most like cop -out predictions.

[484] I really, I need to like, I need to go out on a limb more.

[485] Clearly, my brain, uh, too much in the second half of this year has just been tied up in my work.

[486] I've not been able to, been able to make a really, you know, interesting and compelling predictions here.

[487] All right, I'm just going to stop there.

[488] I've got more, but you go next.

[489] I'll force you to make a call.

[490] Here we sit on December 12th, 2017.

[491] What is the price of Bitcoin on December 12th, 2018?

[492] Oh, okay.

[493] Well, I'm going to force you to make a prediction after this.

[494] And it's 17 ,000 -ish today.

[495] Yeah, 17 ,000 -ish -ish today.

[496] I mean, I don't know.

[497] It depends on so many things.

[498] But I'm going to wildly pick a number out of thin air.

[499] I am going to say the price of Bitcoin on December 12th, 2018 will be $28 ,000.

[500] I like it.

[501] I like it.

[502] And 52 cents for good measure.

[503] What's your prediction?

[504] Buy your futures right there.

[505] You heard it first.

[506] Um, uh, $2 ,000.

[507] Um, but I do think it's going to, I think it's going to get up to 30 first, 30 ,000 first.

[508] Up to 30 down to two.

[509] Yeah.

[510] So you and I are an order of magnitude apart.

[511] Yeah.

[512] I'm curious what it's going to get to in the next two weeks alone.

[513] I mean, I think people are going to get Coinbase for Christmas.

[514] You think people are going to give each other Bitcoin for Christmas?

[515] That should be our carve out.

[516] Yeah.

[517] Yeah.

[518] I think people are going to get phones.

[519] They're going to download.

[520] the number one app in the app store.

[521] It's going to be Coinbase.

[522] People are going to think they're being clever and people are going to think they're doing the thing that the dot -com stock people did when it was like, I'm going to buy my grandson a tech stock for Christmas and ride it up.

[523] Like, here have some Cisco.

[524] It's going to be that.

[525] Wow.

[526] Wow.

[527] Stocking stuffer of Christmas 2017.

[528] We got to release this before Christmas, so I'm not wrong before this airs.

[529] Yeah, we're doing intentionally doing this show a little earlier this year than last year so that we can get it out before Christmas so that carve -outs can be used to stocking stuffers.

[530] Yeah, and for everyone doing a long drive, you have this to listen to.

[531] Yeah, all right, okay, so my question back to you, prediction.

[532] We referenced it earlier in the show.

[533] Where is Amazon HQ2?

[534] Amazon HQ2 will be in Toronto.

[535] Oh, wow, you're going with the Dark Horse.

[536] I am.

[537] Canada.

[538] I am.

[539] They said it's the North American HQ2.

[540] Yeah.

[541] I think.

[542] Do you think they were, do you think they have Canada in mind all along?

[543] I do.

[544] I think Toronto because it gives them diversification in case tax stuff goes crazy in the U .S. I mean, it's not, it's not looking like it's going to hurt corporations right now.

[545] But, you know, Amazon's been extremely conscious of tax law and done insane things to their business model to, um, to, to, to, make sure that they give customers the best deal possible since they're very inception.

[546] So I think they're very conscious of that.

[547] I think they want to diversify politically as well as have an economic center brown tax to do that.

[548] And I also think, you know, as I used to work at Microsoft, we hired a ton of Waterloo grads, really great computer science school.

[549] I think they're going to do plop right down the same way they did next to the University of Washington.

[550] Wow.

[551] Well, Well, my prediction is somewhere in Texas, probably Dallas slight edge over Austin, but Austin also a big frontrunner.

[552] It's not a bad call.

[553] If you're not going to go to Canada, I'll go to a red state.

[554] Well, Texas is a very, very diverse state.

[555] Yeah, it's true.

[556] It's true.

[557] For a lot of reasons, including Jenny's mom's family is all from Texas outside the Houston area and still lives there.

[558] There is a very good chance, potentially in the next presidential election.

[559] But if not, by then, the next one for sure that Texas will be able to state.

[560] I believe it.

[561] Did you know the demographics are changing incredibly rapidly?

[562] Did you know Dallas, Fort Worth is the number four metropolitan area in the United States?

[563] Yeah, it's enormous.

[564] You got New York, L .A., Chicago, and then Dallas, Fort Worth, Arlington.

[565] And it's not far behind Chicago.

[566] It's 9 .5 million and 7 .2 million.

[567] Yeah, interesting.

[568] Bigger than the Bay.

[569] Well, the Bay Area is split into the San Francisco area and the San Jose area.

[570] I bet if you combine the two of those, it's up there.

[571] How's Dallas's tech community?

[572] Listeners, if you're in Dallas or have connections with Dallas, would love to kind of explore that a little bit further.

[573] So reach out on Slack or, you know, it seems like one big theme that a lot of, that I hear over and over and over.

[574] again is people start companies for other people in Silicon Valley.

[575] Why don't we start companies for people in the rest of the United States?

[576] And then there's lots of arguments about, well, you know, people are harder to reach and I don't understand their pain points and blah, blah, blah.

[577] Like, there's a ton of people in Dallas.

[578] Seems like that's a rich market to, if you believe that people in Dallas behave differently and used different services than people in the Bay Area would, like that feels like a huge group of people that you can go start companies for.

[579] to our earlier discussion like how are you going to reach people in Dallas the same way you're going to reach people in the Bay Area Facebook and Google all right my money is on Texas but uh we've got Canada we've got Texas all right um all right what's your next one my next one is that this current mega consolidation era that we're in will continue and accelerate in 2018 we're in the midst right now of a Disney Time Warner M &A transaction that includes sort of part of the company where we covered the Qualcomm Broadcom Disney Fox.

[580] Or Disney Fox, yep.

[581] We covered the Qualcomm Broadcom and what was the third major one that just, oh, the non -tech but CVS and Aetna.

[582] And I think we're just going to see huge M &A continue through 2018.

[583] And I think the political climate is right for these companies to combine.

[584] You know, you enter these, you enter these eras of lots of new companies being created and companies not combining for a while.

[585] So you have sort of proliferation in an industry and then followed by big areas of consolidation.

[586] And I think we are charging into a consolidation era.

[587] Interesting.

[588] You think across multiple industries or particularly in the tech industry?

[589] Let's see.

[590] The regulatory argument would argue, across multiple industries.

[591] And the tech argument that I would make is that, let's see, you would see consolidation after a period of sustained innovation, new company creation, which would come from a lot of availability of early stage capital.

[592] So I guess if the cost of capital got more expensive and private company funding was less abundant, then you would start to see more consolidation, I think.

[593] I don't know if that logic totally holds, but.

[594] All right.

[595] My last one is, I seriously believe we have been in the midst of major disruption that has been happening in the venture capital ecosystem over the last few years.

[596] But it's been disruption that's been happening at the capital formation and raising parts of the ecosystem as so much money has come into the asset class, both in terms of existing, you know, well -known VC firms raising much larger funds and getting bigger as money has come in.

[597] And new entrants like SoftBank, like bringing $100 billion in a new fund into the asset class.

[598] All of that is likely to continue.

[599] But I think we're going to start to see, we are starting to see, a second order effect.

[600] of that in the VC ecosystem, which is, I think there is a serious retilling of the soil, I would say, of what true early stage investing is and company building.

[601] And who does it and who's great at it?

[602] Because what's happened is, you know, the series A, quote unquote, firms that used to be the early stage firms that invested when companies were getting started, and right at those beginning days, they don't do that anymore because they're so much bigger now because they have so much more capital.

[603] So they wait until later.

[604] And so I don't know, maybe we'll see some turnover in who the quote unquote, best firms, top tier firms are at the traditional, you know, Sand Hill Road set.

[605] But there's this whole really thriving ecosystem underneath it.

[606] You know, like you're part of it, Ben, at PSL and so many other firms are.

[607] and it's all all kind of emerging underneath.

[608] It's like Clay Christensen in action here.

[609] And say what you will about ICOs, but I mean there's no denying that that is a super transformative way to finance early stage companies if that were to continue.

[610] Yep.

[611] Indeed.

[612] Indeed.

[613] Hmm.

[614] All right.

[615] Well, I have another one and then I have one question to close with.

[616] So one prediction I have is that we're going to start seeing smaller, more intimate communication networks rise instead of broad social networks as people start to react to, you know, the lack of comfort with things being public and a shift toward a desire for more private communication and private broadcast of themselves.

[617] And this is a prediction that has, you know, people were making this bet for a long time.

[618] Path tried to make it in, what, 2010, 2011.

[619] Earlier than that even, I think.

[620] Yeah, maybe it doesn't know.

[621] Maybe not that much earlier.

[622] Sometime around that.

[623] Yeah.

[624] And, you know, I'm just not sure the timing was right for that.

[625] I think Facebook had so much more, there was still so much more growth available for the user experience in terms of there are so many more people rapidly coming on to this thing.

[626] And it's becoming the de facto way that I communicate with anyone in the world.

[627] So it makes it sort of hard to disrupt.

[628] I do think now that, and it's actually a perfect time for Facebook to be experimenting with monetizing WhatsApp.

[629] that private communication networks are going to start occupying more of people's time than public communication networks did.

[630] I've noticed, and this could be entering a different phase of life, but I do way less activity that could be broadcast to my social network on Facebook, and I spend way more time in a variety of private slacks.

[631] I even spend less time on Twitter and more time in Slack and in messenger groups, and I really do think that people are just finally having the reaction to I don't want to have all my stuff be public all the time and and and sort of culling that.

[632] And of course, you're not actually going to call it on those platforms where you already have all the connection.

[633] You're not going to shrink those social graphs.

[634] You're just going to move to new ones.

[635] And of course, that's why Facebook acquires the new ones because they, you know, they need to stay king of that.

[636] Yeah.

[637] It's interesting.

[638] I mean, Path, I was just looking at a blast from the past.

[639] I used to actually really enjoy Path, which for listeners you don't know, this was the sort of private mobile app social network, I guess you could call it that, from sometime around 29, 10, 11 that had a lot of buzz and really was like beautifully designed.

[640] Really.

[641] Oh my God.

[642] They invented that that button, the path button that was like a radial menu.

[643] Yes, yes.

[644] You're right.

[645] You clicked it and then it expanded out into like all the different types of media you could post.

[646] Yep.

[647] And they had parallax scroll down so you would pull down and different parts of the page would move at different ratios.

[648] Yeah.

[649] Oh, that's right.

[650] Way ahead of their time.

[651] Anyway, that might be a fun episode to do at some point because they get bought by a Chinese conglomerate of some sort.

[652] Yeah, I just looked it up.

[653] Dowum Kikau.

[654] I'm not sure where they are based, but interesting.

[655] Yeah.

[656] I also saw an interesting tweet that's going to reveal one of my carve -outs early.

[657] But it was a Josh Ellman tweet.

[658] Josh is a partner at at Greylock talking about we've had this extreme shift toward individualism and how everything is so tailored for us now with basically everybody has their own personalized news feed.

[659] Everybody has the, you log into any technology product now and it's so tailored for you that it's starting to put us in silos a little bit.

[660] And it's starting to make us feel extremely isolated.

[661] And we may see products, he suggested that this is why things like HQ Trivia, where everybody is all in one room all together, all at the same time, you know, 400 ,000 people strong, we're going to start to see the rise of products that make us feel part of a collective again and part of something greater than our individually tailored selves.

[662] And I think there is really something to that.

[663] You know, if you let yourself, you can just become more and more isolated.

[664] And I've noticed it in my lifestyle to create, you know, craft a life that's like more and more specifically designed for me, which is awesome in many ways, but is kind of isolating.

[665] Yeah, I know a lot of, a lot of folks in tech are thinking about that broadly and some founders are working on ideas in that space, you know, or broadly on that theme.

[666] It is definitely a countertrend that maybe will come to fruition in 2018.

[667] Yeah.

[668] And then I have one more sort of question.

[669] So I'll pause at something first.

[670] Talking about being mobile first or moving to mobile today, I think is a lot about, is very similar to talking about, you know, being a PC or doing something with software from, you know, many years ago.

[671] And it just seems like an irrelevant question.

[672] Right.

[673] It's like, well, yeah, I assumed.

[674] And I'm wondering, you know, are we nearing the end of mobile?

[675] and I don't mean that in something is going to replace mobile.

[676] Like, I don't think it's going to be the AirPods and the watch and you're not going to have your phone.

[677] But it's almost like, are we going to enter somewhere where between like voice assistants in your house and your phone, and like it's all part of a constellation of devices where you have sort of machine learning built experiences for you, there's some AR component, like, are we moving away from the mobile era and into this sort of like ecosystem of highly tailored devices era and will that kind of actually happen in 2018 okay i'm gonna go out on a limb here i think we're moving into the era of the end of eras like whoa there's no you know it's just the internet now and like it like there's no difference between mobile and web or desktop or you know uh voice assistant or are it's just like the internet it's like you can access it through multiple modalities it's just a highfalutin explanation for something that all those you know investment research memos have said for four years yeah uh but no where i'm going with this is like you access the services that you want to interact with through you know in multiple modalities like you internet access them you know through a keyboard and mouse and through a touchscreen and through your voice and uh you know through your wrist or through your glasses like it's all the same and they're all everywhere yeah omnipresent technology you want to do carve outs let's do it okay so just like last year we are keeping our mega extended carve out section so we're going to do each pick one carve -out from all of the categories of carve -outs that we typically cover.

[678] So we have books, and I'm going to do separate fiction and nonfiction, article, podcast, music, TV, or movie, or both, and app are categories.

[679] We're thinking this is also why we wanted to get this episode out ahead of the holidays for all of the upcoming travel that lots of people have, for airplanes, car rides, or maybe stocking stuffers for some of these who wanted to get these out to you before the season.

[680] I will start off with my first carve -out fiction book.

[681] It's actually a trilogy is Philip Pullman's His Dark Materials trilogy, which the first book of which is the Golden Compass, which is a fantasy, sort of, you know, young adult fiction, but also like, you know, can very much be read and enjoyed by adults, kind of like Harry Potter.

[682] like very similar to Harry Potter trilogy and I had not read it growing up.

[683] Jenny had and he just wrote came out with the first book of the second trilogy many, many years later.

[684] And so he's writing a new trilogy.

[685] The first book of that just came out.

[686] I haven't read it yet because I just finished the original, but really good, super fun.

[687] It's like, it's like Harry Potter meets like sci -fi meets steampunk with a female male protagonist, uh, and just like really, really well done.

[688] And it's all a, uh, it's all a complete inversion and retelling of Paradise Lost.

[689] Uh, really, really fun.

[690] Uh, I only have one book this year that I, uh, I'm gonna say makes the cut, um, shoe dog.

[691] It was so good.

[692] Oh, so good.

[693] Talked about it a bunch on, on when, uh, whatever episode it was where it was my carve out.

[694] I think, and David, it was your curve out and I'd have forgotten that.

[695] Um, but the, this, The story of Phil Knight and the creation of Nike, just like page Turner, thriller, but nonfiction, and so freaking well written.

[696] Yeah, that would be, if you have somebody on your holiday list that, you know, enjoys business or shoes or just good, you know, biography, autobiographies, like, yeah, sports, uh, put this, you know, under the tree or menorah or, you know, whatever.

[697] year object of celebration is this holiday season.

[698] My nonfiction is actually, I'm repeating my carve out from, I think, the last episode, just because I finally, I finished reading it since then.

[699] It was so good.

[700] It is Wooden on leadership, speaking in the sports and shoes arena.

[701] John Wooden, legendary coach of UCLA.

[702] And Wooden on leadership is his book expounding on his philosophies of leadership.

[703] and in particular his pyramid of success.

[704] And what I didn't talk about on Carvouts last time is, I just think this is so cool.

[705] His definition of success, I really want to try and keep this in mind in my own life and my own, you know, new endeavors now.

[706] And John Wyn says, you know, people think about success as like achieving something or like setting goals and hitting them or having anything, you know, externally visible.

[707] But he said, that's not what success is at all.

[708] To him, success is, as I'm quoting here, success is peace of mind, which is a direct result of self -satisfaction in knowing you made the effort to become the best of which you are capable.

[709] So nothing about like results, nothing about external perception.

[710] The only measurement that you can truly, you know, both measure and, and feel fulfilled by of success is whether you made the effort to become the best that you can be at whatever you're trying to do.

[711] And it's so great because it's like, you can always ask yourself, like, did I actually?

[712] like put my total effort into this.

[713] If yes, it doesn't matter what the outcome is.

[714] If no, then no, I wasn't successful.

[715] And that's how he coached his teams.

[716] And I mean, he's I think still the winningest coach in college basketball history.

[717] I mean, he would go multiple seasons without losing a game and won 10 national championships, I think.

[718] But he never cared about the outcome of the game.

[719] It was always just about getting his players and his teams to do the best that they were capable.

[720] it's a great mantra especially in this day and age where there's so much that feels out of our control in life and in tech all you can control is whether you make yourself the best you can be my article so the second category is the best article we read this year or at least the the one that we feel is noteworthy of a carve out it actually happened in December of 2016 but i think it was after we recorded the holiday episode It is the New York Times magazine cover story called The Great AI Awakening.

[721] And this was the first piece that I read that really brought not only an understanding, but a compelling narrative to why AI machine learning is so transformative to the era that we live in.

[722] And it tells the story of the recreation of Google Translate using, I believe, a neural network instead of sort of like structured top -down rule -based architecture and and pitting them against each other and it's, you know, it's a good narrative.

[723] It's told really well.

[724] And there have been many probably better pieces written since then.

[725] And I'm sure it was a little dumb down or sensationalist relative to more industry papers or industry articles had been written before, but really landmark to see that on the cover of the New York Times Magazine and really well done.

[726] man it's time moves so fast these days like that yeah i totally remember that article and i in my head that came out like five years ago and it came out one year ago yeah okay my article uh is is much shorter um but uh is a fred wilson uh blog post uh from earlier this year uh called founder friendly and it was a about the Uber situation and the benchmark lawsuit against Travis Kalanick and that whole saga and he was Fred was who's a great VC at Union Square Ventures the founder I want a co -founder of Union Square Ventures he was responding to a tweet that Dan Primac put out saying that Primac tweeted let me find the exact quote here our I quote unquote founder friendly 2010 to 2017 and the point being that like you know a VC and a great VC like benchmark suing the CEO of portfolio company is like the end of this era of like VCs just sucking up to founders and being founder friendly and founders should watch out for VCs and Fred had this response was like you know sometimes like what's most friendly to founders is is doing what's best for the company or his point his point was that as a VC and a board member you need to do what's best for the company and that isn't always like sucking up to founders like sometimes and often in the long run what's best for the company is also best for the founders um and uh i don't mean necessarily here to opine one way or the other on the uber situation particularly but i think it was this was the beginning of a sea change in i think the relationship between vc's and founders and boards and founders um i think for the better uh not in just like bringing power away from founders and back to vCs but just more of a balance of like going from an era where founders can do no wrong to do what's best for the company and for all of the stake code holders involved.

[727] My podcast is an episode of the Ezra Klein Show with Yval Noah Harari, the author of Sapiens.

[728] And I can't actually remember if this was one of my carveouts or not.

[729] I think Sapiens was, and I think maybe the podcast was, but awesome interview.

[730] If you haven't read Sapiens, that's also a great book.

[731] It's like a primer on many, many things that are core to the human condition, archaeological stuff, psychological stuff, evolutionary biology, a lot of sociology of why we treat people the way we do today in different groups and how that falls out of different evolutionary things.

[732] And Yvall is just a great thinker and he talks a lot about, he actually does a 60 -day meditation retreat, silent meditation retreat to start off every year, which sounds freaking nuts.

[733] But I hope, I don't know.

[734] I think I'm going to make it a 2018 resolution to do a a three day.

[735] I'd love to do like a meditation retreat.

[736] But honestly, you know, I've been like just doing headspace and playing around with some some meditation apps and like trying to get into like dabble a little bit.

[737] This notion of like 60 days.

[738] Oh my God.

[739] Yeah.

[740] But the notion of of meditating alone like actually focusing on your breath and not letting your mind wander.

[741] It's impossible.

[742] It's very difficult to do that for like five or ten seconds.

[743] I totally see how this is an incredibly trained art and just very interested to see.

[744] Like, it's almost like a CrossFit thing, like the people that meditate, like, you're very aware that they meditate.

[745] But I think it's something where like if you can really refine the practice and get good at it, I can see how that can change you as a person.

[746] Yeah, totally.

[747] I did a bunch of exploration with meditation in grad school.

[748] and did I I haven't done any full day retreats but I did a half day retreat actually as part of a class at Stanford and grad school and it was it was really cool very very difficult even just a half a day of sitting there but that's cool I remember listening to that show too and thinking 60 days oh my goodness yeah okay my podcast Carve Out for the year is also I think I did have this also as one of my carve -outs at some point during the year is the episode of the Bill Simmons show with Jimmy Ivy and we've been talking about him a lot lately but literally the coolest human alive, go listen to it.

[749] I'm queuing that up now.

[750] Literally, did you grab my phone?

[751] I'll jump forward.

[752] My music also related to this whole Jimmy Ivy and ecosystem, although everything in music is related to him, I discovered Bruce Springsteen and the East Street band have multiple live albums.

[753] I had growing up their live in New York City album from their reunion tour, which was fantastic.

[754] But there is, I think, probably their best live album is live at the Hammersmith Odeon in London in 1975.

[755] This is early, early days right after Born to Run comes out.

[756] And this is just an amazing show.

[757] Bruce writes about it in Born to Run in the autobiography.

[758] Whatever your streaming service of choice is, go listen to this now.

[759] It's just the boss at his best with the band.

[760] Sweet.

[761] My music, I'm sure this was a carve out of mine.

[762] Odessa's new album, A Moment Apart.

[763] I know that I listen to this over and over again.

[764] I know that it's new and anecdotally and the Spotify, your top tracks of 2017, reinforced it.

[765] It's my work music.

[766] It's my morning music.

[767] It's my workout music.

[768] It's so good.

[769] and it's weird.

[770] Somebody asked me the other day, three bands you would take to your grave and, like, I have longer bands that have, like, staying power the other two, the Beatles and Radiohead.

[771] And I'm like, it's weird, but they're newer, they're trendy, but Odessa makes the cut.

[772] And we can revisit that in like five years, but that's how I feel right now.

[773] Radiohead.

[774] Yeah, man. I mean, Radiohead's great, but like, you put them in the same category as the Beatles and Odessa.

[775] Well, for Take to My Grave, I think, I mean, they're more, more, than Odeza.

[776] Like, I think O'Dazza is three.

[777] And I'm not in my radio head.

[778] I'm more in Odezah phase right now than a radio head phase, but like, you know, radio had got me through college.

[779] Fair enough.

[780] It's, it's a, I mean, that's the thing about music and back to the beats episode that Jimmy and Dre just totally identified.

[781] Like, music is about, it's like, you identify with a certain point in your life, with certain activities.

[782] Like, it's just such, it's an emotional thing.

[783] It is, um, I totally hear you.

[784] There's, like, mid, two, 2000s, you know, hip -hop dance tracks that, like, we're in, you know, just take me right back to that specific moment of time in college.

[785] Anyway.

[786] Okay.

[787] My movie, TV and movie for me, for 2017, I was going to do the defiant ones, but we can't, we can't do too much today.

[788] It's a recency bias already.

[789] Recency bias, yeah.

[790] I didn't watch that many movies in 2017, but I just on an airplane trip last week finally watched Creed the latest Rocky movie and I think probably I think the last hard to imagine them following up on that watch I'll say that and they probably made Creed too but really really really good and very worth watching cool mine is Blade Runner 2049 it's a movie the other that I saw in theaters and embarrassed to say I'd never watched Blade Runner the original all the way through so I watched I think the addition I watched was the final cut or the there's a few different remastered versions but watched that the night before and then went and saw 2049 in theaters the next day and you know it's what it's both visually incredible and one of those thinker movies that you're thinking about for days after and especially in our AI apocalypse that we were in definitely interesting to think about yeah i'm going to add one additional movie carve out uh hasn't come out yet but obviously the last jett i is it hasn't even come out yet but it's definitely safe to say look if they already grin at a new trilogy then for for ryan johnson then i'm pretty sure we're gonna love it yeah i'm pretty sure it's gonna be awesome yep all right app app um so my app for the year i'm joking, says the guy who told you I would talk about YouTube later in the episode.

[791] We gave it a C on Acquired.

[792] I'm not sure it deserves more than a C. But my app of the year is YouTube.

[793] I have been spending a lot more time in YouTube this year.

[794] And I feel like on the episode we did on the company, I was very critical of like, YouTube's not a destination site.

[795] Like, who goes to you?

[796] Do you just follow links there?

[797] You do, you know, embeds.

[798] That's the only YouTube content you watch.

[799] I've been re -engaging with like the main app and the feed and like there's great stuff that they surface for you in there.

[800] Um, and very personalized based on your, you know, watching history.

[801] Um, I find myself often, you know, when I'm bored at home, just open up YouTube and see what it recommends for me. Wow.

[802] That's like a behavior I know people do that it just hasn't materialized for me. Like I, I actually extremely rarely watch something on YouTube.

[803] And I, I know that, I know that sounds weird, but like, you know, I never want, it's actually, just not a good modality for me. I never, I never want to play sound on my phone.

[804] It's too much of a commitment really for me to browse through.

[805] And that's why Twitter's better or Facebook's better.

[806] Maybe 2018 will be the year that I start browsing the YouTube news feed.

[807] So I was totally in the same mode as you, didn't understand it at all.

[808] And then I don't know why, for some reason, uh, I just picked it up one day and I was like, oh, wow, this is really entertaining.

[809] And the feed is like very personalized to me. Yeah, that's right, listeners.

[810] You are listening to The Insightful Show Acquired, where we realize that YouTube is cool.

[811] If we didn't already, you know, know that we were too old and not cool anymore, like now it's official, or at least for me. That's right.

[812] That's right.

[813] Well, here, so I have, I've already given away my app of the year, which is HQ, which I talked about on the last episode.

[814] But my biggest observation around this, when David, you sent me, the framework to go through and figure out my app of the year.

[815] Went through my home screen.

[816] So I got the iPhone 10.

[817] So I have one, two, three, four, five, six, seven by four.

[818] There's 28 apps on my home screen, including the doc.

[819] Zero of them came out in 2017.

[820] And that's, I think, a interesting point about the end of the mobile era.

[821] Like there is very, very, very rarely a new app that becomes a part of my daily or even weekly life.

[822] the closest would maybe be I started using in light and photo fox and some other photos specialized photo editing apps now that you can do a lot more powerful sort of pro style tools on the iPhone but I actually don't think those are 2017 either I just don't actually think there's new apps that are habit forming in my daily life and maybe I'm just like not one of the cool kids anymore and there's plenty of those and I'm not involved like Musically was 2016 I mean there's been a there's been a rise of of new consumer apps I guess I have TBH on my phone but it's not at the beginning HQ was not not on my home screen either but I think it's telling well it's nowhere near the velocity that it used to be no I mean pull out your phone do you have anything on your home screen that came out this year no I did the same I did the same exercise and that's how I ended up with YouTube I was like okay there's nothing new on my phone this year what have I interacted with differently or more than last year and that's how I got YouTube yep all right so you heard her here first couple old men doing a podcast welcome to 2018 yeah David actually David actually bought an older phone pretty soon I'm going to be telling the kids to get off my lawn our sponsor for this episode is a brand new one for us stat sig so many of you reached out to them after hearing their CEO, Vijay, on ACQ2, that we are partnering with them as a sponsor of Acquired.

[823] Yeah, for those of you who haven't listened, Vijay's story is amazing.

[824] Before founding Statsig, Vijay spent 10 years at Facebook where he led the development of their mobile app ad product, which, as you all know, went on to become a huge part of their business.

[825] He also had a front row seat to all of the incredible product engineering tools.

[826] that let Facebook continuously experiment and roll out product features to billions of users around the world.

[827] Yep.

[828] So now Statscig is the modern version of that promise and available to all companies building great products.

[829] Statscig is a feature management and experimentation platform that helps product teams ship faster, automate A -B testing, and see the impact every feature is having on the core business metrics.

[830] The tool gives visualizations backed by a powerful stats engine unlocking real -time product observable.

[831] ability.

[832] So what does that actually mean?

[833] It lets you tie a new feature that you just shipped to a core metric in your business and then instantly know if it made a difference or not in how your customers use your product.

[834] It's super cool.

[835] Statsig lets you make actual data -driven decisions about product changes, test them with different user groups around the world, and get statistically accurate reporting on the impact.

[836] Customers include Notion, Brex, OpenAI, FlipCart, Figma, Microsoft, and cruise automation.

[837] There are like so many more that we could name.

[838] I mean, I'm looking at the list, Plex and Versel, friends of the show at Rec Room, Vanta.

[839] They like literally have hundreds of customers now.

[840] Also, Statsig is a great platform for rolling out and testing AI product features.

[841] So for anyone who's used Notion's awesome generative AI features and watched how fast that product has evolved, all of that was managed with Statsig.

[842] Yep.

[843] If you're experimenting with new AI features for your product and you want to know if it's really making a difference for your KPI's STATSIG is awesome for that.

[844] They can now ingest data from data warehouses.

[845] So it works with your company's data wherever it's stored so you can quickly get started no matter how your feature flagging is set up today.

[846] You don't even have to migrate from any current solution you might have.

[847] We're pumped to be working with them.

[848] You can click the link in the show notes or go on over to statSig .com to get started.

[849] And when you do, just tell them that you heard about them from Ben and David here on Acquired.

[850] All right.

[851] I think that's all we've got.

[852] Have a safe drive, a safe travel to wherever you're going.

[853] Enjoy the time off work.

[854] And if you've ever thought, hey, you know, they say that thing about reviews and that's nice and that's for other people to do, we actually mean that for you too.

[855] So we would love, love, love as soon as we sign off here or right now.

[856] I don't have anything else important to say if you'd leave us a review on iTunes.

[857] That's all we've got.

[858] Happy holidays.

[859] Happy holidays.

[860] We'll see you in 2018.

[861] We'll see you in season two.

[862] See you in season 10.

[863] Or two.