Pod Insights The Vergecast 324: Instagram chaos, Photokina 2018, and Elon Musk gets sued About this episode This week, we saw the two founders of Instagram abruptly leave, so Casey Newton comes on the show to talk about all that drama and what it might mean for Facebook’s prized possession.
Then, Dan Seifert joins us to talk about all of the cameras that were announced at Photokina this year, plus all the models that were announced before the show even started.
Finally, Liz Lopatto comes on for an impromptu This Week In Elon to discuss the fact that the SEC has filed a lawsuit against Mr. Musk, which happened just before we started recording the show.
1:28 - Instagram founders resign from Facebook
5:00 - 5 times Facebook messed with Instagram
20:43 - Whats App co-founder Forbes interview
22:32 - Former boss of Facebook Messenger calls Brian Acton “low class”
32:31 - Photokina 2018 recap
38:39 - Zeiss camera with built-in Adobe Lightroom
51:16 - Paul’s weekly segment “Space Egg”
56:07 - This week in Elon Musk: Live Edition™ with Liz Lopatto
1:09:52 - Oculus Quest
Also, in case you missed it, Nilay talked to Google AMP’s Malte Ubl about how he’s trying to make the mobile web better. You can listen to that in the Vergecast feed.
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Transcript 14,266 words · 9 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:00 Nilay Patel? This episode of Verchast is brought to you by Microsoft Azure. Your business is built on bold ideas. Bring them to life faster, push them farther and scale them worldwide without skipping a beat using Microsoft Azure. Stay productive with familiar tools, develop and deploy where you want with a consistent hybrid environment and build engaging apps with intelligent features. Join the startups, governments and 90% of Fortune 500 businesses running on Microsoft Cloud by starting your free account at azure.com/trial. That's A-Z-U-R-E.com/trial.
0:31 Nilay Patel? Hello and welcome to Verchast, the flagship podcast of Vox Media, which we have successfully trolled this company into officially saying that we're the flagship. No, I read the press release. I believe we've been called a flagship, one of two. It's not my fault that whoever wrote that press release is not aware of how navies work.
0:55 Nilay Patel? There's only one, it's obviously us, but it's true. This is the Verchast. I'm your friend Neelai. Dieter Bohn is here. Hello. Paul Miller is here. Hello. We're gonna have a lot of people on the show today. I'm just gonna be straight up with everybody. Casey Newton is gonna join us, talk about Instagram. Dan Seifert's gonna talk about all the cameras that came out at Photokina. And we have to have an emergency this week in Elon with Liz, because right as we went to tape the show, Elon Musk was sued by the SEC. So that's gonna happen a little bit later. She's filing away right now. We're gonna bring her on when she's done. But let's start with Instagram, which was the news of the week in my mind. Instagram's founders quit in a huff. And to help us understand what's going on, we're gonna talk to Casey. How you doing, Casey?
1:38 Speaker 01 Well, I'm recovering from all this drama. You know me, Neelai, I'm not one for drama. And yet, every time I open Twitter, I read the headlines, something is happening on the Facebook senior executive team this week.
1:51 Nilay Patel? It's true. I will say usually, Casey, we bring you on, I'm like, how's democracy doing? And you're like, it's horrible. And yet, this feels more dramatic than that previous conversation about democracy in general, because it is legitimately crazy. No one is behaving. Walk us through some of the drama.
2:08 Speaker 01 Sure. So if you are just catching up to the news this week, after six years of working at Facebook, which of course, Facebook acquired their company in 2012 for a billion dollars, Kevin Systrom and Mike Krieger said, "We're leaving." And they did this so abruptly that Facebook was caught flat-footed. They did not have a plan to communicate this. They did not have a succession plan. As we're recording this, we still don't know who will lead Instagram into the future. And as best as I and others have been able to tell through our reporting, there was just a sense that Mark Zuckerberg was consolidating power and no longer wanted Instagram to operate with much autonomy whatsoever.
2:51 Speaker 01 And so the founders, who had been responsible for, you know, one of the few bright spots at Facebook over the past two years, walked out the door and all but promised that they would be back with another company, maybe soon.
3:03 Nilay Patel? Wow. What do you mean by consolidating power? He's the CEO of Facebook. What is there left to consolidate?
3:09 Speaker 01 So he went out and acquired what he thought would be the next generation of social networks. He spent a lot of money on WhatsApp, on Instagram, on Oculus. And he sort of put a time limit on all those acquisitions and said, "We're going to let y'all play around for three, four, or five years. Do your thing. And then eventually, we're going to kind of come in and do things our way." I actually don't think he said that latter part, but there was sort of a promise made of autonomy that would last for four or five years. And that clock ran out. So Zuckerberg did keep his word, but think of all that's happened in those past four or five years. Facebook has started to stagnate. It's sort of reached its saturation point in North America.
3:54 Speaker 01 There's some evidence that it's actually declining in North America. People are sharing less to Facebook. And so that has made Instagram look like a very shiny object. Arguably, it's the crown jewel in his lineup. And so it was sort of inevitable that he would turn his attentions there as he seeks to sort of find new avenues for growth for the company. Frankly, there aren't that many that he can choose. And so this does seem in some ways inevitable.
4:19 Nilay Patel? What do you mean by growth? Do you mean revenue growth? Do you mean user growth? Do you mean a good feelings growth?
4:25 Speaker 01 A sort of all three. I mean, he wants all three. I think because it's a publicly traded company in America, his mandate to shareholders is that he makes more money every quarter than he did the year before. And so I do think that this is driven out of a sense of revenue. The company is sort of de-emphasizing time spent on the site because of some of the other criticisms that they've gotten. So yeah, I think this is sort of a money move and sort of trying to find a new level of stability for Facebook as it enters this era where the flagship app isn't thought of as highly as it once was.
4:59 Nilay Patel? And so what you're looking at, Chris Welch wrote a post for us. It's like all the ways Facebook has messed with Instagram recently. And it's like frictionless sharing to Facebook is no longer tagged with the word Instagram, which was apparently a very dramatic problem for the founders. There's a hamburger menu and Mike Krieger, the CTO, said, I'm so proud we don't have a hamburger menu. And now they have a hamburger menu and you click it and all it says is open Facebook, which is like so rude.
5:25 Nilay Patel? To like move into someone's house and install like a shitty extra door and all that door does is like take you into some other house. Is that the stuff that's made these people leave? Or is that just like the price of being a billionaire?
5:37 Speaker 01 Broadly speaking, yes, I absolutely believe it. I've had a chance to speak with Mike Krieger and Kevin Systrom on multiple occasions. And I believe these are two individuals who care massively about their product. They feel like their product is a reflection on them. They were incredibly involved in the day to day at Instagram. They sweated the details. They were very deliberate about everything they did. So yeah, when all of a sudden every, you know, you think about how many photos are shared from Instagram to Facebook, particularly in North America, particularly among Facebook employees who are probably using Instagram as their main way of connecting to the Facebook service at all. And all of a sudden, all of those photos just appear as if they were natively posted on Facebook.
6:19 Speaker 01 I can absolutely see why that would be a major sticking point for them. Now, what we don't know though is what was the the trigger, right? Like, like most people, everyone who's reporting. ...of this story has said, there was no one thing, there was no straw that broke the camel's back. And yet, given how passionate these two were about their company, the idea they would just sort of leave it and throw their hands up without even being able to say who the successor was, I kind of don't believe it. I kind of believe that there was some sort of ask that was made where the two of them looked at each other and went into a conference room and said, all right, this is our red line, we're out. And, you know, one, that's speculation, so I don't know that. But man, I just look at all of the evidence and it feels that way. So I'm trying to, I'm trying to learn more.
7:04 Nilay Patel? So I have characterized this to Casey as a, as a whiskey decision. Because if you just look at how the story played out, Mike Isaac, New York Times, just had a story. The story just went up out of the blue, no one was prepared for it, and said they're considering leaving. And then everyone freaked out. Facebook PR didn't have a statement, Instagram PR didn't have a statement, Systrom and Krieger appeared to have disappeared. But Casey, you said to me, that first version of the Times story didn't have any details in it. It just said they're gonna, that they're gonna go. And then everyone else started doing their reporting and filling in. Kara at Recode and Kurt had a story that was basically like, they're really mad. NBC had a story that was like, he hates Mark Zuckerberg with all of his heart. And it's amazing, that stuff just started to fill in because people started
7:48 Nilay Patel? to talk. Is that what is leading you to think like this was a flip the table and leave decision?
7:52 Speaker 01 Yes, the, because, and I, and I wrote about this in my newsletter this week, which you can find at theverge.cominterface.
7:59 Nilay Patel? Wow.
8:00 Speaker 01 I really wish I hadn't stumbled over it, too.
8:02 Nilay Patel? I'm gonna start charging you a tax every time you plug yourself.
8:05 Speaker 01 Your website gets paid when I plug this website.
8:08 Nilay Patel? That's true.
8:09 Speaker 01 Yeah.
8:10 Nilay Patel? Well, my, my plan for secondary revenue on The Vergecast just fell apart, Casey.
8:14 Speaker 01 Darn it. We'll come up with something else. But I wrote about this, and when, when there are these high level moves, which have a high potential to be interpreted negatively, and of course, everyone has interpreted Systrom and Krieger leaving Facebook negatively, the company wants to get out ahead of it. They want to frame the narrative. They want to offer a positive way of looking at the story. And so They know that these things are coming. They work very hard and also, by the way, can work very quickly to make sure that that happens. I believe that if Facebook had even, let's say, 12 hours of notice, they would have been able to get up a rudimentary blog post, you know, brief one or two reporters, come up with a successor
8:59 Speaker 01 or at least sort of say something about what the succession plan is. Have Mark Zuckerberg do one of his posts on his timeline where he talks about all the good times that he had with Mike and Kevin over the years. Right? These are all things we've seen them do before. Recently, for example, when Jan Koom, the WhatsApp founder, left. Jan Koom, also somebody who sort of has no love lost for Facebook at this point. But they were still sort of able to go through the dog and pony show of we're all one big happy family. And they didn't do it this time, so it seems like it happened in a hurry. And to me, that indicates some level of hostility, like something. Like even if they decided this three weeks ago, they sprang it on Facebook. And who knows sort of what happened after that, right?
9:41 Speaker 01 The for like the insider media game is sort of like, how did Mike Isaac get this story? Right? Why did this person give them that story? Is it possible that someone at Facebook wanted to make sure that the first version of this story wasn't the story that Kevin Systrom, you know, posted on Twitter? So there's, you know, lots of interesting things to pick apart there.
9:59 Speaker 02 Is there, is there any, anything to do with this coincidence of timing with WhatsApp and Instagram? Like, is there any reason to link these timings?
10:07 Speaker 01 Well, are you talking about the story that came out the next day about WhatsApp?
10:11 Speaker 02 Well, the WhatsApp founder leaving, close to the time of Instagram founders leaving. You mentioned there's three big social network plays that Mark Zuckerberg has. One of them is not nearly as exciting as WhatsApp and Instagram as far as current market share. So is there anything to that coincidence?
10:29 Speaker 01 I think it is basically a timing thing. You know, as I said a bit earlier, these companies were acquired somewhere between, what, six and four years ago. Most founders, when they're acquired, the options that they get for joining the company vest over a four-year period, which is why it's very rare to see founders stay on much before four years. And in fact, many will leave long before four years because they realize they don't like working inside a giant company. So it's less of a coincidence and more just kind of the statistical likelihood of how long you stay at a company after it gets acquired. But I do think that the fact that all these things are clustered together is significant in that, you know, Mark Zuckerberg really now just sort of has a series of product families.
11:14 Speaker 01 He doesn't have any autonomous divisions that are going to be doing experiments around the future of social networking. And I think one of the things that was interesting about Instagram was that it was a little laboratory of democracy. And yes, it stole a lot of its most successful ideas from Snapchat, like particularly in later years. But then it also iterated on top of those. And I think you can argue that Instagram has been much more creative than any other Facebook property, right, over the past three years. And so the question is, what happens to all of that, right? Are the good and talented people who are still at Instagram, by the way, they are, there are a lot of really good folks there. You know, are they going to sort of rally around the new leader, whoever that is, probably a guy named Adam Mosseri, but we still don't know that for sure?
11:56 Speaker 01 Or are some of them going to say, you know what, I'm out of this company? Or I'm going to go see what Mike and Kevin are going to, you know, are up to in their garage. And I just think that really bears watching.
12:05 Nilay Patel? Yeah, this is a bunch of people who all got really rich, right? They don't have to do anything. And so you got a couple billionaires being like, we're going to make a new app. Of course, they could just like pay some engineers to hang out, right? Like, and you don't have to be-
12:18 Speaker 01 And by the way, by the way, I just want to say, the thing that surprised me the most about when I interviewed Kevin Systrom was how competitive he was. He is not thought of generally as a competitive person. And I think it's because he works for Mark Zuckerberg, who is probably one of the most competitive people in the entire world. But as much as Kevin loved polishing his product, and he did, and he does, the thing that he liked the most is winning. He just walked away from his baby, you know, maybe the biggest thing he'll ever do. I think he's going to be highly motivated to have a very successful next act.
12:46 Nilay Patel? Yeah. Well, one, I have to disclose, my wife works for Oculus, which is part of Facebook. Two, my favorite part of the resignation was the word again.
12:55 Speaker 01 Yes, we want to be creative again.
12:57 Nilay Patel? We're gonna go be creative again.
12:59 Speaker 01 Yeah, so you know, some people read that as suggesting they had not been able to be creative at Instagram. The reason I resist that interpretation is based on my own interviews with Kevin in particular. I think he was really proud of what they were doing there. Like, it isn't as if Systrom has, you know, spent the past three years railing against every decision they made. I think he was really excited about all of them. But he had also kind of come to work within a lot of constraints, many of which were put on him by the parent organization. And so, you know, now that Kevin has learned all that he's learned about social networking, what does he do when the handcuffs come off? I mean, if you're me, like, this is the most irresistible story of the year, right?
13:37 Nilay Patel? Yeah, it's worth noting what some of those handcuffs were, right? Ben Thompson wrote a great piece about Instagram and Facebook and sort of the fallout. And what he noted was, they'd created a product, Facebook bolted on its revenue engine to that product, and they had never solved the other part of it. Like, how would Instagram have been monetized if they hadn't just, like, bolted on Facebook tracking and targeting to that thing? Like, I don't know. But if you look at the stuff you have been covering on Instagram recently, yes, there's stories, yes, it's cool. But they were about to add shopping, which, I'm gonna go ahead and just let everybody listening to this know, I've been workshopping in my head a review series called "Dumb Shit I Bought on Instagram" for about six months. Because there's just a pile of dumb shit in my house that I bought on Instagram.
14:22 Nilay Patel? Never buy one of the wireless car charging clips that you see on Instagram. I have them all. All of them are disappointing. So like, they were adding shopping to the mix. They were, you just broke the story of like native retweets for influencers and brands, which just looks ridiculous, like, is like, conceptually, like, that's why Instagram is Instagram, because it doesn't have that. So if the first class of people you extend that to is like the worst actors on your platform. That seems like a horrible idea. So their innovation was starting to become revenue innovation, right? It was not user experience innovation outside of stories. And that split between the feed and the story list was getting bigger and bigger and bigger.
15:07 Nilay Patel? There are days that go by where I never scroll through the feed, which is where the money is, right?
15:12 Speaker 01 Right, and this has become a question. I actually asked Kevin Systrom that this summer in a piece you can read on The Verge about, hey, why aren't these things making more money? And his answer at the time was, well, you know, it's still early and we need to train a generation of advertisers. But to go to your point, Neil, it's like Instagram hasn't been innovative. Anyone can make that argument and that's fine. But I do think it's notable that it was just a couple of months ago that they launched IGTV, which is a very big bet that the future of video consumption on mobile is going to be vertical, that it deserves a standalone app, that it can be driven by a new generation of creators. This was really a bet the brand moment for Instagram. And it's two months old. And that's when Kevin Systrom, who championed it internally against a lot of opposition, this is when he walks out the door.
15:56 Speaker 01 I hope you see what I mean when I say this is insane that they left when they did. Because he had everything riding on IGTV. IGTV, you could argue it was going to be one of the big pieces of his legacy. And now, I would not be surprised if they killed it in a year.
16:11 Nilay Patel? When's the last time you opened it?
16:12 Speaker 01 I mean, I probably opened it two weeks ago.
16:15 Nilay Patel? Yeah, no one's using it. So let's make the list of flip the table moments that caused them to quit. Here's mine, just the potential things I would see. And just based on what you're saying, Mark Zuckerberg demands that IGTV go 90, right? And he's like, this is stupid. Portrait video is not the thing. Make IGTV horizontal. And Kevin Systrom says, no, you don't understand my vision, and he quits. I'll just put that on the list.
16:40 Speaker 03 I think more likely is that he demands that IGTV and, what is it, Facebook Watch?
16:45 Speaker 01 Yeah. Yeah, a merger.
16:48 Nilay Patel? Okay.
16:48 Speaker 01 I'm imagining that like you open Instagram and the first thing you see is the Facebook logo and it says Instagram presented by Facebook.
16:55 Nilay Patel? Yeah, that's three. I would put native regramming on that list. They have been religiously against it the entire time.
17:03 Speaker 02 Can someone explain the argument of why regramming would be bad for Instagram?
17:08 Speaker 01 So, uh, yeah. Have you ever used Twitter? I mean, the idea is that when you let people sort of mindlessly reshare things, you wind up incentivizing a lot of the bad behavior that we see on Facebook proper, that we see on Twitter, that it sort of makes everything more emotional. All of a sudden, the stuff that you're seeing in your feed isn't the stuff that you control. It's stuff that's been put there by other people. That makes it more of an attack surface if you're a hacker or you're meddling in an election, you know. And I should say, because, you know, we should say.
17:38 Speaker 02 As I love to do.
17:39 Speaker 01 Yeah, well, so Instagram denied that they're building this. What I reported was based on some screenshots I had seen and a source who was familiar with this thing's development. And as I reported at the time, it was extremely rough. It was like sort of barely a prototype. But, you know, just the fact that Instagram is considering it, like, we believe is newsworthy, given that they have resisted it for so long. And so sort of where did that product come from and how did the Instagram founders feel about it? That, again, is like a very interesting question to me.
18:07 Nilay Patel? All right, so it's four things. What's the fifth one? What are the categories of things? There's not many more.
18:13 Speaker 01 Well, so another one, and again, it's hard to know, but it used to be that Kevin Systrom and Mark Zuckerberg worked together very closely. And Kevin Systrom would describe Zuckerberg as a member of Instagram's board, which sort of implies the kind of relationship where this person is checking in once a month and offering you advice and consent. During the big reshuffle that happened in the spring, Chris Cox became Kevin Systrom's boss. And all of a sudden, Systrom was getting a lot less FaceTime from Zuckerberg and I imagine was probably getting a lot more requests and suggestions from Chris Cox. And so I think just sort of changing up that dynamic where you used to feel like the CEO of your own company and now you just feel like middle management, I think, could have very easily made him say, "The hell with it."
18:58 Speaker 02 Yeah, but that's not that's not a flip the table, right? That's what I'm saying.
19:01 Speaker 01 Yeah, that's true.
19:02 Speaker 02 That's a slow burn.
19:03 Speaker 01 Maybe the email comes in from Chris Cox and with a big request, but I'm interrupted, Dieter, so.
19:07 Speaker 03 What if we go full conspiracy and it wasn't about Systrom flipping the table? It was him preemptively quitting on his own terms before he was fired. What if, I don't know, like, what if, like, Mark Zuckerberg is like, no, but I want to be as cool as you. You have to invite me to all the the cool Instagram parties. Because I really like Instagram better than Facebook. And he's like, and he said, no. And then Mark Zuckerberg was got really mad. And so he had to get out before Mark Zuckerberg, you know?
19:32 Nilay Patel? It's like the Rod Rosenstein theory of of Kevin Systrom leaving Instagram, right?
19:37 Speaker 02 Can I add, can I add a theory? Because this is so much.
19:39 Speaker 03 This is full conspiracy, by the way. I don't think this is true.
19:43 Speaker 02 What if they had an idea for a new company? This seemed like a good time to start it.
19:49 Nilay Patel? And they were just like, we're out.
19:50 Speaker 02 Yeah, it's like, well, you know, we have, we've compiled a list. It's not a heavy enough list to tip a table. But, you know, this is good timing for our hot new idea called Peach Two.
20:02 Speaker 01 I, you know, Paul, it's, I sort of like that as a theory. I actually, I can't remember exactly what Mike Krieger's background was. But Kevin used to work at Google and quit his job there to go build a thing, right? Like, so he has sort of been through that once before, where he had an idea for a company and went out and did it. And, you know, it's not crazy that he would do it again. But again, you just look at everything that they were working on in the moment and the idea that he walks away, there has to be a flip the table moment.
20:26 Nilay Patel? Right. That moment comes with IGTV, like, succeeding or failing. Either they shut down IGTV and he's like, all right, like, I'm out, I'm walking away. Or it's like the world's biggest success. Samsung starts selling vertical televisions, right? Like, he's like, legacy's secure and I'm moving on. I don't know. So Casey, that was but one half of the Facebook executive drama this week.
20:47 Speaker 01 Indeed, indeed. The other half.
20:50 Nilay Patel? The other half.
20:51 Speaker 01 Well, so, you know, among us Facebook watchers, one of the most delicious live for drama stories of the year was when Brian Acton, the former co-founder, or I guess still a co-founder of WhatsApp, quit Facebook around the beginning of the year and then a couple of months. Later tweeted, "It is time #deleteFacebook." And that was all he said, and he refused all interview requests. And, you know, we wrote a story and everyone wrote a story. And so for all of this time, we've wondered, why did Brian Acton tell everyone to delete Facebook? And on Wednesday, he gave an interview to Forbes in which he gave his answer. And it was basically two things.
21:31 Speaker 01 One is, he had promised users that they would never co-mingle WhatsApp data with Facebook data. And Facebook did indeed do that. And they had to pay a fine of $122 million. And he felt like that made him look like a liar. The second thing that made Brian Acton mad was that when WhatsApp was acquired, they promised users that they would never monetize through advertising, because they felt like there was a better way to make money. And Facebook had begun to explore the possibility of introducing ads into WhatsApp. Again, sort of felt like he had been made to look like a liar. And so for those two reasons, he walked out of the company after apparently a very chilly meeting with Mark Zuckerberg, in which Zuckerberg said, "This is probably the last time you'll ever talk to me."
22:16 Speaker 01 Wow. And then he disappeared. And he took $50 million and he gave it to the Signal folks and turned that into a nonprofit foundation. And now he gets to go live out his principles of end-to-end encryption on a non-advertising-supported app. So that was sort of drama piece one, was why did Brian Acton quit? And then the accelerant to the fuel for that fire was David Marcus, who used to run Facebook Messenger, and presumably sat in a lot of meetings with Brian Acton over the past few years. He's now running Facebook's Experimental Blockchain Division. He put up a post on Facebook that said, "I can't take it anymore. I have to tell you the other side of the story." And his side of the story was basically,
22:57 Speaker 01 "The WhatsApp guys slow-rolled every single effort to try to monetize their app, that they had an obligation to try to figure out a sustainable path forward for it, and they basically wouldn't do it." And he said that Brian Acton was a whole new standard of low class for criticizing the company that made him a billionaire several times over. And he said- In a sort of very digressive part of the post that I'm probably going to go into into more detail today at my newsletter at theverge.cominterface is that Facebook is sort of a net good for the world, that the good far outweighs the bad, and that it's a unique company among all companies because it is about people, and that while other
23:39 Speaker 01 companies are about selling things or entertaining you, Facebook is uniquely about people, and that's what makes it sort of unique and noble in the world. At that point, alarm bells started going off in people's heads, like, what sort of messianic cult is sort of being organized in Menlo Park?
23:56 Nilay Patel? Can I read the actual thing to you?
23:58 Speaker 01 Please read it.
23:59 Nilay Patel? All of those words are in there, but just imagine that you work at a company and you write this paragraph. This is David Marcus on Facebook. "I'll close by saying that as far as I'm concerned, and as a former lifelong entrepreneur and founder, there's no other large company I'd work at and no other leader I'd work for. I want to work on hard problems that possibly impact the lives of billions of people around the world, and Facebook is truly the only company that's singularly about people. Not about selling devices, which is a shot at Apple, not about delivering goods with less friction, which is a shot at Amazon, not about entertaining you, which is a shot at every entertainment company in the world, not about helping you-
24:37 Speaker 01 Netflix, Spotify.
24:38 Nilay Patel? Netflix, not about helping you find information, which is Google. Just about people. It makes it hard sometimes because people don't always behave in predictable ways, parentheses, algorithms do, which is not true. But it's so worth it because connecting people is a noble mission and the bad is far outweighed by the good."
24:57 Speaker 02 It's like Facebook is hoping to soon propose an IEEE standard for how humans are.
25:03 Nilay Patel? It's just crazy because they're a business, they make money, right? So all of these other things-
25:10 Speaker 02 People.
25:11 Nilay Patel? -are about helping people, right? So you sell them devices, they give you money, you give them a device. You enter-
25:17 Speaker 02 Only Facebook people.
25:18 Nilay Patel? They give you money, you entertain them. They give you money, you give them goods with less friction.
25:23 Speaker 03 You want to know the difference between us, Neelai?
25:25 Nilay Patel? Yeah.
25:26 Speaker 03 All the things you said are true, and I agree with you, but I can't get there because I'm still stuck on the fact that it's impossible to be a former lifelong anything.
25:35 Nilay Patel? Yes! Yes! Is he dead?
25:38 Speaker 01 Yes. Oh, oh, I mean, that's a good point. Another good point. It's very interesting to say that your company doesn't make money selling devices on the day that you introduce a $400 virtual reality headset at a public developer conference.
25:57 Nilay Patel? It's just so much. And then the parentheses, "algorithms behave in predictable ways" after this entire fake news experience that we've all been forced to go on. I read this statement and it's like, is Facebook a cult? First of all, but most of all, why don't the most important people at Facebook have the self-awareness to know that they sound like cartoons? Right? Like, this is the speech in Dave Eggers, "The Circle", before everyone in the world has a camera implanted on their forehead. Right? And it's like, you should know that that's what you sound like. They just don't have it. It's so confusing.
26:34 Speaker 01 Well, and like, this has been one of the, I think, very fair criticisms of Facebook over the past year is that it is an incredibly insular environment. And until very recently, there'd been almost no shakeups at the top of Mark Zuckerberg's organization for the better part of a decade. Like, his closest advisors have been with him since the start of Facebook. And so I do think that there is a group think that develops. And when you consider how successful Facebook has been in most aspects of growing and taking the business public, you can understand why they would become like, less sensitive to external criticism. But also, this idea that Facebook is good for the world is the reason that they're working there, and it's very much under attack.
27:17 Speaker 01 And so I think what you're starting to see is some defensiveness come out because I think people are starting to say to Facebook employees, "Oh, God, like, you work there, like, you're hurting the world." Right? I'm not saying I feel that way necessarily, but I do believe that Facebook employees are hearing this when they're out at parties, or at soccer games, or your other kid's baseball game, whatever. And so I think we're actually going to see more of this defensiveness as Facebook executives try to make the case that this thing that they're building is something other than just a soulless advertising machine.
27:46 Nilay Patel? Yeah, and I just have too many poorly constructed wireless car charging mounts to believe anything otherwise.
27:55 Nilay Patel? I gotta start this series. All right, we've done this. What's your big takeaway, Casey? What's the thing people need to know?
27:59 Speaker 01 Well, I'm giving away what, at least right now, would be my sort of year-end piece about Facebook. But like, this was the year that Mark Zuckerberg got rid of all of the high-ranking executives that had different ideas about what Facebook should be than he did. Like, he had people in there, Yon Kuhn, Brian Acton, Mike Krieger, Kevin Systrom. These are people who thought very differently about the way to build and profit from social networks, and they are all gone now. And so whatever Facebook looks like in the future, it was always gonna be Mark Zuckerberg's call. But to the extent that he had any internal resistance or alternative ideas, if they're there, I don't know about them.
28:40 Nilay Patel? We don't know who's gonna run it next, but...
28:42 Speaker 01 Yeah, Chris Cox is sort of everyone's pick for who would be the next CEO of Facebook. He's been there forever. He's very well-liked. He's very charismatic. He's good on stage. You know, he still does the orientation for all the new employees. So it would probably be him. But, you know, as far as like, public speeches go, he's basically been in hiding since F8, and he had very little to say before then about all of Facebook's various crises.
29:04 Nilay Patel? Oh, I meant Instagram.
29:05 Speaker 01 Oh, sorry. Instagram will be run by, well, in a way, I mean, Instagram will be run by Chris Cox, right? Because like, he's the head of all product. The person who'll be running it day-to-day will probably be Adam Mosseri, who came over during the big reshuffling in the middle of the year. He was previously running the News Feed. His background is in design. Really smart guy, really thoughtful, very well-liked. But man, he's just been handed a bag of crap. And it is very notable to me that, again, like, we're recording late in the day on Thursday, three days after this all happened, and Instagram still hasn't just confirmed that he's running it.
29:37 Nilay Patel? Yeah. What a mess. Thank you, Casey. I'm gonna read an ad, and then we're gonna bring on Dan Seifert to talk about some cameras, which are far less dramatic.
29:48 Nilay Patel? This episode of Veritas is brought to you by Microsoft Azure. On the Veritas, we cover the ever-changing world of consumer tech. Coming up next, we're going to hear an advertiser segment from Microsoft Azure about another ever-changing field: big data. Listen to this.
30:01 Speaker 04 In a city, everything we do, from swiping a ticket at the subway turnstile to checking into the public Wi-Fi, is a piece of data.
30:10 Speaker 05 In just the last two years, we've produced more data in the world than the rest of the years combined. We're getting into multiple petabytes, even exabytes of data.
30:18 Speaker 04 That's Rohan Kumar. He's Vice President of Azure Data at Microsoft. And that's exabytes, as in one megabyte with 12 zeros at the end. It's a lot of data.
30:28 Speaker 05 And with this volume of data comes a lot of potential for intelligence. When we say, how do you make the data intelligent? It's really about getting into a single place where you can run machine learning models which derive artificial intelligence from that data to make it more meaningful.
30:45 Speaker 04 One application is making our cities smarter. Ayal Federlevi is the CEO of ZenCity, a startup that's trying to make the data-driven city a bit more intelligent by adding people to the mix. ZenCity takes a pulse of what's on the city's mind through social media, and then they analyze that data for insights using Azure services.
31:06 Speaker 06 Posts, comments, 311 calls to the call center. We use machine learning to turn all of that huge mess of unstructured data into actionable, quantifiable scores and measures that can actually support decisions in the local government.
31:21 Speaker 04 Those millions of data points can help city governments understand what their citizens need.
31:26 Speaker 06 When we had big snowstorms in the US this winter, we saw some of our cities actually use our platform to recognize areas where more people are talking about being stuck in the snow and prioritize snow removal. There's so much data being created around every action that we take in life. The real question becomes what we actually do with it.
31:47 Speaker 04 Learn more about the tools you can use to make sense of the world and your business with Azure. Start free at azure.com/trial. A-Z-U-R-E.com/trial.
32:03 Nilay Patel? We're back. I want to thank Microsoft for supporting the Vergecast, the flagship podcast of the Vox Media Podcast Network. I don't know if they know they're supporting the flagship, but they are now. All right, Dan Seifert is here. Hello, Dan.
32:14 Speaker 07 Hi.
32:15 Nilay Patel? So, last week on the show, we had iPhone review. So much camera nerdery. I went on the talk show with John Gruber. It was another two hours of camera nerdery. And it's funny, because the real camera nerdery is yet to come.
32:28 Speaker 07 Oh, get ready for it. The real camera nerdery. Actually, you mentioned this earlier at the top of the show, that this week was the Fotokina trade show out in Germany, which is like the big trade show for the camera world every year. It used to be every two years, now it's every year. So there's a bunch of stuff that came out of that. But really, the past month has seen more action in the camera world than I can remember in like the past five years.
32:53 Nilay Patel? Yes.
32:53 Speaker 07 It's been crazy. And like, it's all happening on the extreme high end of like, the pro, extreme enthusiast level, because that's where all the interesting stuff with cameras happens now, because consumers aren't buying them anymore, and they just use their phones, like the iPhone. But what is happening are like some seriously big shifts that are like super interesting, especially if you are into cameras or you're into photography, which if you're into gadgets at all, I feel like the camera is such a gadget at this point. It's really cool. So, just a rundown, since like the end of August, we've seen new camera systems from Canon, new camera systems from Nikon.
33:28 Nilay Patel? Just say what you mean by a camera system.
33:29 Speaker 07 Okay.
33:30 Nilay Patel? Because these are monumental shifts.
33:32 Speaker 07 These are big shifts, yeah. So the big things that we saw at the end of August and into early September were new mirrorless cameras from Canon and Nikon that are pro level. They're called full frames, and they got big image sensors in them. They're expensive. They start at $2,000 and up for the camera, and then you're going to spend hundreds or thousands of dollars for lenses for these things.
33:52 Speaker 02 Because you can't use your old lenses on these.
33:54 Speaker 07 Well...
33:55 Speaker 02 Without an adapter.
33:56 Speaker 07 Yes, you can adapt the old lenses to them. The thing is that the shift, this is a big shift for Canon and Nikon. So, the mirrorless camera movement has been happening for over a decade now. And what that has brought, has brought a lot of like smaller cameras, more portable designs, more digital technology into these digital cameras, kind of a shift away from the film designs that were prior to it. But Canon and Nikon have bucked this. They've stayed the ground with their Pro DSLRs, which have had basically the same designs for decades now, because they just took their film camera designs and adapted them to digital. This step that they're making now is they are finally embracing mirrorless cameras on the pro level. And so Canon has its new EOS R camera, which is the new, like, the flagship of the EOS
34:40 Speaker 07 R system, which means cameras and lenses. And then Nikon has their new Z7 and Z6 cameras, which are their new Z system type cameras. So that's just two things, and it's already huge. That's two things. That happened before Photokina even happened. Yeah. That happened like three weeks ago. They were huge. They're huge in the camera world. These haven't actually hit shelves yet, so there's still a lot of excitement for them because, you know, the influencers and partners have been able to get their hands on them. So there's been a lot of press about them. We're still waiting to get our hands on them to really evaluate final production level quality stuff, but we're excited about it. And they're coming really soon. So that happens before Photokina even happens. And now Photokina has happened, and you've got companies like Fujifilm and Panasonic and Leica.
35:24 Speaker 07 And Carl Zeiss just announced a camera today, which is crazy. But they've also released new high-end cameras. So Panasonic has announced that it is also getting into the full-frame camera game. Panasonic is really interesting because it's coming from the other direction of Canon and Nikon. Panasonic and Olympus were the first ones to release mirrorless cameras back years ago, and they didn't have it attached to a legacy film system. But now they are pushing into the full-frame world with their new Lumix S series cameras that are coming next year. And so they're attacking from the other end, but they're still pro-level stuff, high-end big sensors, high megapixels. They're not going to be cheap. So that's that. And then Fujifilm is saying, "Full frame is too small for us. We're doing medium format." Yeah. Which is like...
36:09 Speaker 07 Preach it. Even bigger sensors. And, you know, just to like clarify, in photography, the bigger the sensor is, generally, the better the image quality. That's kind of like a general rule. So Apple talked a lot about how the iPhone XS has a bigger image sensor than the iPhone X, and that's what's contributed to its leap forward in camera quality. The same thing happens on the big camera level. It just happens at a bigger scale. So Fujifilm released a medium-format mirrorless camera two years ago called the GFX 50S. And it's still, it's a big camera, like, not super portable, kind of stays in the studio. It's great for studio work, maybe great for slow portraiture work. But now they have the GFX 50R, which is basically the same camera in a smaller body. So you could like take this out on the street. It is like the size of...
36:54 Speaker 07 A Canon Rebel, the SLR.
36:56 Nilay Patel? Wow.
36:56 Speaker 07 Which is a small camera. And that gives you a huge sensor, which gives you better image quality, better dynamic range, and better control over your depth of field. So you can really have a great control over the actual blur that a lens creates, as opposed to like the fake blur that your smartphone might try to create. So that's super exciting. And that's, it's gonna, I'm gonna name, say the price, and it's gonna sound really expensive, but compared to other medium format cameras, it's actually really cheap. It's $4,500 for the body of this camera. And that's coming in November.
37:23 Nilay Patel? How much is a regular medium format camera?
37:25 Speaker 07 Well, the other players in the medium format space are like Hassblad and Leica and Phase 1. Hassblad cameras start at $10,000 and go up to $35,000, I believe. Leica just announced their new S3 medium format camera, which has 63 megapixels. Vlad got his hands on it over in Photokina. He described it as frustratingly awesome. There's no price tag on it, but you can expect it to be north of 20 grand for just the camera.
37:51 Nilay Patel? Wow.
37:52 Speaker 07 So those are, these are like serious pro level stuff. Like, I don't even think pros buy these cameras. I think rental houses buy these cameras and rent them to pros. That's basically the business model for this. But the Fuji film is something that, you know, $4,500 is about what you're going to pay for a new Nikon Z7 with a lens, or Canon EOS R with a few lenses. So it's not out of the range of what pros spend on cameras that they use to shoot weddings or shoot portraits, or, you know, shoot senior pictures, or, you know, what you can use to hype up your Instagram profile before Facebook kills it.
38:27 Speaker 07 So like, it's super exciting in how much is happening in this space. And like I said earlier, it's all on the high end because frankly, consumers just aren't buying cameras anymore.
38:39 Nilay Patel? So here's the one that I want the most out of all of these, because it is the craziest thing in the world. You said Zeiss put out a camera. It's a ZX1. It has an Android tablet on the back that runs the mobile version of Lightroom.
38:53 Speaker 07 It is bonkers. It is, it is, okay, so this is-
38:56 Nilay Patel? I want it so bad.
38:57 Speaker 07 They're calling it a concept, but in the same press release, they're saying that stores will have it next year. So I, it's hard to read what this exactly is. But it's a, what they're calling a fixed lens, full frame camera. So you can't change the lens on it. It is fixed in place and it's one field of view. But it's a 35mm equivalent lens. It's got an F2 aperture. It's a Carl Zeiss lens, which is a really high quality lens. But the crazy part is that- They're saying it runs Lightroom CC right on the camera. You can shoot your photos, edit them right on the camera, and then it's got Wi-Fi, so you can upload them right there. So like, it's like a whole computer and camera built into one, which seems wildly ambitious. And I'm hugely skeptical, but also super, super curious about it.
39:37 Nilay Patel? This is one of those things where, like, Lightroom on a phone is great. So what if my phone was just a huge, a huge camera? Like, just have this thing make phone calls and I'll just, I'll just use this.
39:50 Speaker 07 So Samsung released that a couple of years ago. There was the-
39:52 Nilay Patel? But the camera was shitty.
39:54 Speaker 07 So yeah, that was the problem was like, they were putting like, basically the equivalent of like, a $300 or $400 point and shoot camera on a phone. And having a phone back, and it, of course, was like, a Samsung phone from a few years ago, so it was like a Galaxy S4 style phone.
40:06 Nilay Patel? That was like a real part spin experiment.
40:08 Speaker 07 Oh, total part spin.
40:09 Nilay Patel? They walked in the factory like, "Oh, man, we gotta clean out this room. What if we just glue this crappy camera onto this crappy phone and be like, it's the future." Yeah, this is like a real camera.
40:18 Speaker 07 This is a real high-end camera. So in terms of specs, this is like similar to Sony's RX1 Mark II or Leica's Q, both of which are north of $4,000 cameras. So this is going to be a four, maybe five, maybe six. It's hard to say exactly the price, but it's gonna be way up there in terms of thousands of dollars. And then it's got a 4.3-inch touchscreen on the back that you can use Lightroom with.
40:42 Nilay Patel? But here's what I don't understand. Cameras with built-in editing features have existed for a long time. It's not a surprise. I bet if you're Zeiss, you're like, "Well, we don't have any built-in, we don't have any software engineers to build us built-in editing features. And even if we hire the team from Nikon, we've looked at their work and that sucks. So we're just gonna like, we're just gonna call Adobe and have them do it for us." But then they've got this Android, like, why doesn't it run a sharing service?
41:07 Speaker 07 It's really weird that they're like, "You know what? Just, we're gonna put Lightroom on the back." Like, it's a very strange approach, especially like, Lightroom is not super fun to use on a computer. It's even less fun to use on a tablet.
41:19 Nilay Patel? Oh, disagree. You're talking about Lightroom Classic. Lightroom CC, which is what this is. Lightroom CC is great. Yeah.
41:23 Speaker 07 I'm skeptical that it's great.
41:25 Nilay Patel? I love it.
41:25 Speaker 07 But yeah, the traditional way is like, modern cameras now all have Bluetooth and Wi-Fi built in. So you can transfer your photos wirelessly to your phone, and then you can edit them on your phone and share them to Instagram or whatever right there. This is like saying, "Don't bother with your phone, do all the work here and upload them to the internet directly."
41:42 Nilay Patel? With a Flickr? Where are you uploading to? Yeah, to the Lightroom cloud.
41:46 Speaker 07 Yeah.
41:46 Nilay Patel? So here's the, here's the, the question now. So like a $4,000 camera.
41:52 Speaker 07 At least, yeah.
41:53 Nilay Patel? Lightroom CC has a monthly service fee. So is this a $4,000 camera that costs $10 a month?
42:00 Speaker 07 You know, I, I think if you're paying four grand plus for a camera that you can't change the lens on, you're not too worried about the $10 a month for Lightroom. It's just a, just a hunch.
42:09 Nilay Patel? I will say that I enjoy.
42:10 Speaker 07 You probably already are paying for Lightroom to use with your other cameras.
42:14 Nilay Patel? Okay, that's fair.
42:15 Speaker 02 I hope when your subscription runs out, they put a little like, like a demo version on Lightroom.
42:21 Speaker 07 It puts a watermark on your images.
42:24 Nilay Patel? I, I pay the $10 a month for Lightroom CC. I think it is a thing that makes having a lot of cameras worth it. I need to write this piece. Dieter has assigned me this piece like 10 times.
42:33 Speaker 03 Yeah, where, where is it?
42:36 Nilay Patel? I don't, I just keep writing a headline, Lightroom is the new iPhoto, and then I'm sad about iPhoto and it goes away.
42:40 Speaker 03 Oh, yeah.
42:40 Nilay Patel? Because photos in the Mac is garbage.
42:42 Speaker 07 Yeah. Well, I think, you know, if you're building, if you're using Lightroom, you are serious about either cameras or you're serious about photography and you're not a casual user at all. And all of the casual stuff that's happening with cameras and with photography now is all happening on the phone. And it's all happening, you're either editing directly in the iPhone Photos app or you're editing in Google Photos, which is really actually quite great for editing really quickly. Or you're doing it in, in Instagram and you're not interested in managing a library on your computer.
43:10 Speaker 03 And actually, to push back on that just a little bit, it, it is theoretically possible that they could bring back a little bit of consumer interest in bigger cameras. But because Nikon and Canon in particular have been avoiding this new trend for so long and stuck with the big, big DSLRs, people are like, yeah, I don't, don't care, I don't want to deal with it. When do you think that some of this stuff, especially from Nikon and Canon, might trickle down to like a more reasonable consumer level? That's like, that's the thing I'm waiting for.
43:38 Speaker 07 I think it's going to be a while. And, and part of that reason is because of the way the camera market is at this point. The only cameras that are actually selling and camera section that's growing is the enthusiast camera level, which is, means you're spending north of $1,000 for a camera. You're buying a few lenses at a few hundred dollars a piece or more. So that, that's the only cameras that are selling right now. And the pro level, which is where Canon and Nikon are entering with these new mirrorless cameras. So I think it's going to take a long time for Canon and Nikon to bring their stuff down. Canon, Canon is the world's biggest, you know, outside of like, unless you consider like Apple the biggest seller of cameras, which is probably accurate, but like in the camera world.
44:19 Speaker 07 Canon is the biggest company there is and they sell more EOS Rebels, which are their entry level DSLRs than anything else still, but it's a shrinking market. And I think it's going to take a long time for them to bring down these mirrorless cameras down to that level. Canon and Nikon actually have had consumer level mirrorless efforts in the past. There's the Canon EOS M system. You've probably never heard of it because nobody buys it, nobody owns it. It's not great. They don't put a lot of effort and resources into them because they don't want to cannibalize Rebel sales. And so they've not been very well received and they don't sell a ton of them. Nikon had, the name is escaping me now. I honestly think it was like called the Z1. A very weird mirrorless
45:03 Speaker 07 camera system for a while was, again, didn't have a lot of support put into it from Nikon, was kind of ignored and wasn't super well received by the market. And that has opened up the window for companies like Sony to waltz in. Sony started by selling cameras that were kind of consumer level, under a thousand dollars. And now Sony has really, really grown its pro level business so much that it sells more full frame cameras or high end mirrorless cameras than Nikon does in the US, which is kind of crazy. It's nipping at Canon's heels. And so Canon and Nikon are seeing Sony as the threat on the high end. And so this is kind of a protectionist type of move for them. They're being like
45:46 Speaker 07 dragged into this kicking and screaming, but they have to because Sony is eating their lunch.
45:49 Nilay Patel? And people love those Sony cameras.
45:51 Speaker 07 Yeah, especially, you know, the new creator class, right? So like the YouTubers and the people who are using these cameras, not just for photography, but mostly for video. And that's one thing that's really interesting with these new cameras, especially from Canon and Nikon, is that they're going to be great for photography, but there's a lot of things left on the table for video features. Like the Canon doesn't shoot 4K video. It doesn't shoot 120 frames per second at 1080, which is like where you get all the sick B-roll from the slow motion. The Nikon has only one card slot and it doesn't use the SD cards. It uses a much more expensive card format that is way less common, that people don't really have. And so like, it's a lot of these weird things that they seem like no brainers that they could have added. Like Panasonic has a great business selling mirrorless cameras that shoot great video. And if you want to step up from Panasonic, you go to Sony.
46:37 Speaker 07 That's what all the YouTubers are using. Like, we've talked to Sarah DiCia a bunch and had her on, and that's what she's using to shoot all of her videos. And, you know, we know a lot of YouTubers that are using these rigs.
46:47 Nilay Patel? Sarah literally saw me at the Apple event, the iPhone event, and I posted a photo that I took there, and she literally tweeted at me, "I always give you shit for using Nikon, because Nikon is like silly, but I'll admit that photo looks pretty good." Because she's just like, to her, she thinks Nikon is like the stupidest company, because they won't make a product that she wants to buy.
47:06 Speaker 07 Right.
47:06 Nilay Patel? Like, not even a little bit.
47:08 Speaker 07 It's not even like that she wants. They don't make a product that does what she needs it to do.
47:11 Nilay Patel? Right, right, that's what I mean.
47:12 Speaker 07 So like, they've taken so long to do this, and these are the first steps, and I'm sure that, like, you know, the next camera in the EOS R line will add 4K video and some of these other features, and the next Nikon Z7, but those might be a couple of years out. These companies don't move that fast, obviously. So, it's frustrating, but it's also exciting at the same time, because they're finally seeing that they have to address this market. And Canon has had a great business selling EOS 5Ds for years. I think they were probably really protectionist about that, and, you know, maybe now they need to shift it over to the R line.
47:44 Speaker 02 I am very excited to see this many full-frame mirrorless cameras, because that, to me, feels like there was like some sort of breakthrough in the production process that made this easier for more companies to accomplish, which means, I hope, in the long run, it could get a lot cheaper. Because the image off of a full-frame versus a Micro 4/3 is just so obviously better, but it is always kind of, it's like, you have to have a lot more than $2,000 to get into that, especially for video.
48:13 Speaker 07 Yeah, because you've got to factor in the cost of lenses as well, and these lenses are all pro-level lenses, which some of them might cost as much as the camera or more. And then they're also big. They're big and heavy. Even though I'm saying that they're smaller than DSLRs, they're still a lot bigger than what a lot of people think of as a mirrorless camera.
48:30 Nilay Patel? I'm stoked.
48:30 Speaker 02 So, I'm stoked. I'm hoping, I hope to get a good mirrorless for like $1,000 in a few years. That'd be nice.
48:37 Speaker 07 Yeah, I mean, you can get a great mirrorless camera for the $1,000 price at this point. They have-
48:42 Speaker 02 Full frame.
48:43 Speaker 07 But you're going to give up a little bit in the image quality, or, excuse me, I should say the image sensor size, which gives you, you know, as I mentioned earlier, some limitations on the creative things that you can do with them. But it is very exciting.
48:55 Nilay Patel? I'm looking at used Sony A7Ss right now, Paul.
49:00 Nilay Patel? Right in the strike range.
49:02 Speaker 02 Well, yeah.
49:03 Nilay Patel? They're like 1,100 bucks.
49:04 Speaker 02 I went through months of consternation, save up for like a full frame or get the smaller. I forget which Sony I have, but it's not a full frame sensor. And I was very sad to not be rich.
49:16 Nilay Patel? And you can use A7R for 799 on eBay.
49:20 Speaker 07 Yeah, because Sony's-
49:21 Nilay Patel? I've got a five star rating.
49:22 Speaker 07 The reason is because Sony's been doing this for so many years now. I think that first A7 line came out in 2012 or 2013. So they're three generations into their cameras, whereas Nikon and Canon are just entering now.
49:33 Nilay Patel? The thing that strikes me is the thing you're saying about the sort of creator class. Like, I always think the whole point of The Verge is we cover the tools and then we cover the culture that tools makes. And the place where I see it the most, and I have since the day we started The Verge, is cameras. Right? You give people cheap cameras, they're gonna make videos with them. Now there is YouTube and Instagram, and now you see the camera companies knowing, oh, this is a market for us. This is a whole generation of young people wants to be YouTubers. And people like Marquez and Sarah and everyone are saying, buy an RX100, buy an A7R2. Right? Like, these are the cameras you want, and they're picking Sony every time. And you have to know these other companies, or that's just money that's left on the table.
50:16 Speaker 07 Yeah. And these other companies are like, especially Canon and Nikon are very traditional camera companies. They're very proud of what they have and what they've built over the past century. They're old companies, they've been around a long time, they've had many great accomplishments over the years. And so I'm sure there's a ton of hubris built into that, that has caused them to drag their feet. And but it's, like I said, it's very exciting that they're entering this market now. And the most exciting part may be actually the lenses that they're bringing in. Canon is coming in strong with some really awesome lenses that they don't necessarily offer on their DSLRs. So there's actual a reason for someone to move from a DSLR to these mirrorless cameras, because you can get these really sweet lenses.
51:01 Nilay Patel? All right. Well, Vergecast listeners, Paul and I are starting a GoFundMe to buy a series of medium format mirrorless cameras. It's gonna be great. Dan, thank you so much.
51:11 Speaker 07 My pleasure.
51:12 Nilay Patel? Appreciate it. There's all kinds of photo Kino news on the site, so just go check it out. So Paul, man, every week you do a segment.
51:19 Speaker 02 I do.
51:20 Nilay Patel? What's it called?
51:22 Speaker 02 It is, as you know, Neel, I always been called and always will be called Space Egg,
51:30 Speaker 02 which I gotta say, you know, when I first started the series that is called Space Egg. Paul, who's who's Space Egg sponsored by? Oh, I'm so glad you asked. Today's Space Egg segment of the Vergecast is brought to you by Darn Tough Vermont socks, who has not has not abandoned me for some reason as an advertiser. The flagship Marino experience for your feet. And I think it's clear here that this is not a plural. This is the flagship Marino experience for your feet. It's made in the USA and unconditionally guaranteed for life. Visit darn tough.com slash verge for 20% off your first order.
52:12 Speaker 02 That's darn tough.com slash verge. It's socks. They make socks. Okay. Space egg. Space egg. I was like, you know, a lot of the other series that I do are unique creations, but this one has been completely ripped off of a product from Alibaba called Space Egg. Alibaba is making a hotel robot, which is a very fun genre. I met with Savioke at CES this year. They had a hotel robot. And so the hotel robot is pretty simple. Typically, they bring stuff to your room. So a good hotel robot can get on the elevator, ride to your room, not run over any little children on the way.
52:55 Speaker 02 And then it'll like, show up at your room with like, a toothbrush or your, the meal you ordered or something like that. Alibaba has a nice little twist because they have their own voice assistant. So you can, instead of calling the hotel reception and they send the robot, apparently somehow you can communicate directly with these robots. But what is really exciting to me about this whole genre, the Space Egg genre, is you're getting used to having robots that aren't Roombas. That kind of co-mingle with you, right? So these robots are designed to like identify crowds and like steer around them and like stop if they think they're doing anything dangerous and obviously not run over people. They sometimes have kind of some way to interact with somebody who's like right in front of them
53:40 Speaker 02 or touches them or something like that. So I think it's, it's just like, it's a really strong step one because you know, none, these robots typically, they don't have arms or anything. They're very passive, but you know, over time, you know, maybe we'll have a robot waiter and we'll have a robot this and we'll have a robot that. But I think where the first time a lot of us will co-mingle with a robot will be in like a hotel lobby.
54:04 Nilay Patel? A space egg.
54:04 Speaker 02 Space egg.
54:05 Nilay Patel? I like it. I'm very excited. I will say the, the sort of increase in chatter about how we live with robots is very real lately.
54:14 Speaker 02 You feeling it?
54:14 Nilay Patel? Yeah, it's just there's, I mean, we had the CEO of Anki on the show a few weeks ago and that was this whole thing. And I talked to a friend of mine who just a good job at another company. It's like building a robot and the first one's very simple, but their whole vision is all of your daily life will be like enhanced by robots. There's just like activity in that zone.
54:32 Speaker 03 So here's my, here's my real question though, like the Anki vector doesn't do much. It's like, you can ask it assistant questions, but it's like a thing you hang out with. And the Roomba does something. It vacuums your floor. The hotel robots, I guess like some of them will deliver room service to you. But what is the first really big, I'm hanging out with robots and they're just sort of around thing that they're gonna do? Like, what are they gonna do that can't be done by, I don't know, a kiosk? Is it, is it food delivery?
55:06 Speaker 02 Bringing stuff, I mean, there already are some robots working on that, like with the, I mean, people are making the robots robots and they're so far not self-sufficient in this way. But you know, there are food delivery robots. I mean, it makes a lot of sense. If you're going to dispatch a person to do a rote task, then you want a robot to do it if they can. And I, I just don't see any stop to that. So yeah, we'll probably interact with robots delivering us stuff first.
55:33 Speaker 03 You think that'll be the first thing? Robots delivering us stuff?
55:36 Nilay Patel? Yes.
55:36 Speaker 02 Well, because, because household tasks, I mean, have you ever tried to wash the dishes with your hands? It's very complicated. And when you think of it through a lens of robotics, it's just clearly impossible. You know, like, there's times when you're trying to use the, like, the scratchy part of the sponge, and the stuff won't come off, so you have to use your fingernail. Like, will robots have fingernails, you know?
55:59 Speaker 03 Well, and it's a judgment call of how gross the sponge can get before you, like, throw it away and get a better one, get a clean one.
56:05 Speaker 02 Absolutely.
56:05 Speaker 03 It's like, I never know what to do there.
56:06 Nilay Patel? All right. We're down the dishwashing rabbit hole, but Elizabeth is here. Hello, Liz.
56:12 Speaker 08 Hey, how's it going?
56:13 Nilay Patel? It's going. So Liz, every week, you actually do a thing with the same name called This Week in Elon.
56:20 Speaker 08 Yeah.
56:21 Nilay Patel? But by my estimation, this is now the third week where you have been ready to go with a recap of This Week in Elon, and then Elon has Elon'd.
56:31 Speaker 08 Listen, um, I don't want to be too dramatic about it, but Elon Musk has kind of been ruining my life for, like, the last several months.
56:40 Nilay Patel? All right, but I would say this is the most, this is the only time when we've said, oh, we gotta, we gotta hit pause and, like, start over because of the, the scale of the Elon-ing. So Liz has already recorded This Week in Elon for the Vergecast that we're tossing.
56:55 Speaker 08 At nine o'clock in the morning this morning. I'm on Pacific time. It's currently two o'clock. We're, it's Thursday, and, like, I cannot believe that I am already out of date, and it has not even been 12 hours. What happened was I had, like, this great thing about, like, labor unions and Tesla and this NLRB board hearing that's been going on this week. And then the SEC was like, what's up? We're filing charges. So the SEC has sued Elon Musk for securities fraud after he attempted to take the company private earlier this summer. Longtime listeners know, a recurring theme in This Week in Elon is that one should never tweet, and right now, in the SEC complaint, we have some evidence for why.
57:35 Nilay Patel? Yeah.
57:36 Speaker 08 Not only because of the take-private tweets that are the basis of the complaint, though those are pretty significant, but also because a bunch of the evidence cited in the complaint is... Elon Musk's short seller tweets. So for those of you who might not know, short sellers are people who basically bet that a stock is going to decline. And those of you who've been watching Elon closely know that he has been saying all sorts of wild things about short sellers. There are two that are cited in the complaint. One of them is from May, "Short burn of the century coming soon. Flamethrowers should arrive just in time." And another one in June, "They have about three weeks before their short position explodes." Although, obviously, there are plenty of other taunts for short sellers to choose from. Anyway, the SEC just gave a press conference where they basically dragged Elon.
58:21 Speaker 08 I called up a couple of corporate governance folks. But what the SEC is seeking to do is to remove Elon Musk from being the CEO or a board member of a public company.
58:33 Nilay Patel? Any public company, not just Tesla. The claim is that his tweet, in particular about taking Tesla private $420 a share, quote, "funding secure," was so reckless that not only should he be removed as the CEO of Tesla, but he should never serve in one of those positions at a public company again. Which is wild, correct?
58:53 Speaker 08 Listen, all of this is wild. I'm just going to read you some choice quotes from the complaint. "In truth and in fact, Musk had not discussed, much less confirmed, key deal terms, including price, with any potential funding source." And then they go on to say that the "funding secured" tweet was "false and misleading," and subsequent "statements were false and misleading too." And then I'm going to quote again. "Musk knew or was reckless in not knowing that each of these statements was false and/or misleading because he did not have an adequate basis in fact for his assertions. Musk knew that he had never discussed a going-private transaction at $420 a share with any potential funding source. He had done nothing to investigate whether it would be possible for all current investors to remain with Tesla as a private company via a special purpose fund, and had not confirmed
59:37 Speaker 08 support of Tesla's investors for a going-private transaction."
59:41 Nilay Patel? That's a lot.
59:42 Speaker 03 Yeah.
59:43 Nilay Patel? Never tweet, I think.
59:44 Speaker 03 So when the SEC says, "We don't think you should be an officer in any public company ever again," is that the sort of thing, like, the SEC says that to a lot of people, but they don't really mean it, and by the time it gets through trial, it's like, "Yeah, that's our opening position, but that's not really going to go there." Or is this a thing that they don't really do, and this is, like, super serious because they're real mad?
1:00:06 Speaker 08 It's super serious because they're real mad, and also because they filed immediately. You've got to keep in mind, usually it takes longer for the SEC to like do these things, which means that either like according to the corporate governance experts I spoke to, either this is basically open and shut and totally vanilla, or they're real mad. And so like, I talked to Charles Elon, who's the director of the Weinberg Center for Corporate Governance at the University of Delaware, and he was like, I'm just going to quote him, "His actions were for a public company CEO way out of line. Everything the last couple of months has been very disturbing for investors. The rules don't seem to apply, and the SEC believes they did or should." So, there's that. The other person I spoke to was Chester Spat, who's a former chief economist
1:00:50 Speaker 08 for the SEC. And he, you know, one of the things in the complaint is there's this discussion of the shorts, of course, and the reason it's there, Spat told me, was that it reinforces the idea that maybe he was trying to manipulate the price in order to burn the shorts. So, there's that, too. But yeah, cases like this typically take a long time, and often people reach settlements with the SEC rather than going all the way through. That usually involves the payment of a fine. But again, we're dealing with Elon Musk.
1:01:18 Speaker 03 Yeah.
1:01:18 Speaker 08 So who knows? He might decide to fight this the whole way through. Right now, I think one of the things that we should be watching is Tesla's board, because this is just filed against Elon. It's not Tesla.
1:01:30 Speaker 03 Against Tesla. Okay.
1:01:30 Speaker 08 And so, you know, there could potentially be something coming for Tesla, maybe. I don't know. But if I'm a Tesla board member, I'm starting to think very seriously about succession planning.
1:01:41 Speaker 03 Yeah. You'd think they were doing that before.
1:01:44 Speaker 08 Eh, eh, eh.
1:01:45 Speaker 03 Okay. There's a quote from the complaint that I would like to read briefly.
1:01:50 Speaker 08 Yes, please.
1:01:51 Speaker 03 "He rounded the price up to $420 because he had recently learned about the number's significance in marijuana culture and thought his girlfriend, quote, 'would find it funny, which is admittedly not a great reason to pick a price.'"
1:02:04 Speaker 08 Wow.
1:02:05 Speaker 03 He picked $420 to make Grimes laugh.
1:02:07 Speaker 02 Okay, okay. I beg to differ. That's a great reason to pick...
1:02:11 Nilay Patel? Yeah.
1:02:12 Speaker 08 No, I'm just saying.
1:02:13 Speaker 02 420 LOL is the best reason to pick a price for your public company I can think of.
1:02:19 Speaker 08 Here's the thing, and like I've written about this a little in the newsletter. There is like a world in which both Grimes and Azelia Banks are deposed to testify. Because as you may remember, Azelia Banks was brought to Elon's home to record something with Grimes. And then she put up a bunch of really embarrassing Instagram posts about Musk and Grimes, suggesting that she saw him trying to get funding to cover his ass, basically. So there's a world where that happens.
1:02:48 Nilay Patel? I think we're all hoping for that world. I think.
1:02:51 Speaker 08 I am not, actually.
1:02:53 Nilay Patel? In the grand history of Verge trial coverage, this is the one. But most cases settle, right?
1:02:59 Speaker 08 Yes, most cases settle.
1:03:00 Nilay Patel? 70, 80% of cases settle. This one, if it is indeed as open and shut as it seems like it might be, because the tweet was not true. How does it settle? Does he say, okay, I can't, you don't want me to be the CEO or director of a public company anymore. I'm going to step down, I'm going to run Tesla product development. We'll just get some car industry suit to come run Tesla as the CEO. Is that acceptable? Is that like an outcome that can happen?
1:03:28 Speaker 08 I mean, it's certainly possible. Like, I don't want to speak for the SEC.
1:03:32 Nilay Patel? Yes.
1:03:32 Speaker 08 I don't understand it, frankly, and I am a little afraid of it. But it's totally possible that he pays a huge fine. It's totally possible that the ban on being involved in public companies is for a limited period of time. So one example is Michael Miliken, who went to jail for bond trading. That's a long story. But he basically like came back in the finance industry and is now well respected again, even though he did jail time for junk bonds. So there are a lot of possibilities where, you know, this is not the end of the world for Tesla. But investors have been taking this very poorly. The last time I checked, Tesla shares were down 10% in aftermarket trading, which is a lot. So there's that.
1:04:15 Speaker 08 If I seem a little punch drunk, it's because I feel a little punch drunk, to be perfectly honest. It's just, it's a lot going on, especially at the end of the day. One of the things that I guess, I think that could potentially be possible is that we're going to be seeing more, because you may remember that the DOJ is also looking into this as a criminal matter.
1:04:32 Nilay Patel? Wow, I actually didn't know that. There might be criminal charges.
1:04:35 Speaker 08 There's too much Elon. Yeah. This is a thing that's been reported on, but the DOJ is apparently checking this out as well as a criminal matter.
1:04:43 Nilay Patel? Wow. The short sellers must be just like, opening those bottles of champagne today, right? Like, after all of that, this is the most resounding victory over most they could possibly have, right?
1:04:53 Speaker 08 If you want, I can open up my, uh, my list of Tesla shorts and take a look at what they're saying.
1:05:01 Speaker 08 Because, bless them, they, I imagine, have some things to say. Let's see here. It looks like they're saying, "It's done, integrity, get some."
1:05:11 Nilay Patel? Wow. Integrity, get some is the, the nerdiest, like, Xbox Live exclamation that has ever occurred.
1:05:21 Speaker 03 I think, I'm pretty sure this person means "get some integrity," not "integrity, get some."
1:05:26 Nilay Patel? Oh, okay. I heard it a totally different way.
1:05:33 Nilay Patel? All right. Well, it's, it's, it sounds like everyone is horrible. But never tweet truly the message of This Week in Elon this week, I think.
1:05:41 Speaker 08 Every week. That's the message of This Week in Elon every week, and none of us, including Elon, ever learn it.
1:05:48 Nilay Patel? All right, so presumably, he's not going to be tweeting about this. What happens next?
1:05:52 Speaker 08 That's a good question, and I'm not sure. I imagine there's going to be an emergency board meeting, because that seems like the natural response to this kind of thing. And if I'm a Tesla board member, at this point, I'm thinking, okay, how do I respond so that Tesla doesn't also get involved in this particular mess? Because right now, again, it's just Elon. The other thing is that Elon is now potentially conflicted. So at minimum, you're thinking about succession planning. At maximum, you're thinking about removing your CEO before the SEC does it. Though I'm not totally sure why you would necessarily do that if you're a Tesla board member, since that's the relief the SEC is seeking.
1:06:26 Nilay Patel? Right.
1:06:27 Speaker 08 So it might mean that they're having this meeting about like strategizing what their next moves are. Like, one can respond, and there's any of a number of possible things that could come out of that response. So wait and see, I guess.
1:06:41 Nilay Patel? I just, on top of all of this, he's still like sleeping on the floor of the factory trying to get Model 3s out the door, right?
1:06:48 Speaker 08 Well, so they've moved on to delivery hell, where like they're producing cars, but they're having a hard time getting them to the people who own them.
1:06:56 Nilay Patel? Why? Why is that hard? They literally make things that move.
1:07:01 Speaker 08 Look, if I understood Tesla, I feel like I would be at a better paying job.
1:07:09 Nilay Patel? Okay.
1:07:11 Speaker 08 Okay. I mean, the thing that he tweeted this weekend was like that they were having a hard time with like the delivery trucks that you put the cars on and then drive across the country with. And so they were thinking of building their own, which seems weird. And also, again, like the kind of thing that like, again, I don't know the SEC or how they live, but I might be like thinking about like, huh, is that true? And like, if you're a Tesla shareholder, is it better that they're having a hard time getting adequate delivery trucks? Or is it better to wait for Elon Musk to put his own delivery trucks together? Neither of those seem good?
1:07:47 Nilay Patel? No. Yeah, so the tweet was, he's tweeting at somebody, "Apologies, we're upgrading our logistics system, but running into an extreme shortage of car carrier trailers. Started building our own car carriers this weekend to alleviate load." So, I don't know, man. Like, this is not a problem that GM has. Like, the CEO of Ford is not like, "I'm so sorry, Explorer owners. I was unable to ship this year's 500,000 Ford Explorers to the world," right? Right. Elon runs into problems that big companies have solved for 100 years.
1:08:16 Speaker 08 Also, while I'm at it, the LA Times ran a piece on Wednesday that, you know, auto haulers are pretty dubious about this shortage. And so I'm just going to read to you quickly from that piece. There's no shortage that I know of, said Guy Young. As general manager of Auto Haulers Association of America, he would know. There's a general shortage of drivers, but we've got a lot of members with drivers and car carriers who could supply what they need. And Anidi Lindstrom, a trucking analyst for IHS Market, is flummoxed, too. "I've never heard of a situation like that," he said. "In my experience, there's always some available capacity that can be harvested, especially," he said, "for a well-known company with a $50 billion market value." It's confusing. It doesn't sound real to me.
1:08:57 Speaker 03 Yeah. That is a very, very kind way of saying bullshit.
1:09:03 Speaker 08 Yeah.
1:09:05 Nilay Patel? If a newspaper can call the head of the Car Haulers Association, why can't anyone at Tesla?
1:09:13 Speaker 08 I don't know, man. I don't know. But I will say that there was just an SEC press conference, again, where they mostly dragged Elon, but they didn't comment on a question about any further actions, which, you know, like, no comment is a no comment. It doesn't say anything, but it does, in its way, say something, does it not?
1:09:34 Speaker 03 Yeah.
1:09:34 Nilay Patel? Yeah. All right. Well, thank you, Liz. I'm so sorry that This Week in Elon was, once again, upended by Elon. But I appreciated the fuck it, let's do it live nature of this week's segment. We have to wrap up, but real quick at the end, we really did not talk enough about the Oculus Quest, which is the new headset from Oculus. I will say, people on our staff are very excited about it. They're not shipping until next year, so we've got a lot of time to talk about in the future. But it's all on the site. Go check it out. It's a fancy new headset. We'll get one when we get one, and we'll keep covering what's going on in that world. That's it. You can listen to This Week in Elon with Liz every week on the site. You can subscribe to it as a newsletter. I trust that newsletter is about to get very exciting.
1:10:18 Speaker 08 We actually sent an emergency newsletter when this broke.
1:10:22 Nilay Patel? Of course. There's also a bunch of events coming up. There's a Microsoft event coming up. There's a Google event coming up. That stuff is leaking all over the place. The Pixel 3 in particular is leaking everywhere. Casey was on the show. You can go listen to the first season of Converge on Apple Podcasts. We are hard at work on season three of Why'd You Push That Button. It's coming out very, very soon. So go catch up on seasons one and two of Why'd You Push That Button. You can listen to podcasts from Recode. There's Recode Decode with Kara Swisher. There's Recode Media with Peter Kafka, one of my very faves. And you can tweet at us. I'm at Reckless on Twitter. Paul's at FuturePaul. Liz is MSLopato. Dieter is at Backlon. We love hearing from you. And we will see you next week. That's the Vergecast. Rock and roll. Paul.
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