The Economy is Fine?, VC Funding Declines, Non-Negotiable Expectations

Square co-founder and Invisibly founder Jim McKelvey joins Ranjan Roy and Alex Kantrowitz for our weekly news recap show. We cover: 1) The state of the economy and markets 2) Fears of a credit crunch, or is it a credit tightening? 3) The state of the commercial real estate market 4) How commercial real estate's struggles impact small and regional banks 5) The decline in VC funding in Q1 6) What is 'dry powder' anyway? 7) Reflecting on Uber again 8) What is AutoGPT? 9) Regulating AI 10) Sell your data for money? 11) The Square reader's founding story 12) "Non-negotiable" expectations. ---- Enjoying Big Technology Podcast? Please rate us five stars ⭐⭐⭐⭐⭐ in your podcast app of choice. For weekly updates on the show, sign up for the pod newsletter on LinkedIn: https://www.linkedin.com/newsletters/6901970121829801984/ Questions? Feedback? Write to: [email protected] Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Alex Kantrowitz?

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• 0:45Alex Kantrowitz?

  flexibility, and peace of mind. That's how companies like Razer were able to cut their inference cost by 15 times. Visit akash.network/alex for free consultation. That's akash.network/alex for free consultation.

• 1:09Alex Kantrowitz?

  Welcome to Big Technology Podcast Friday Edition, where we break down the news in our traditional, cool-headed and nuanced manner. I am joined this week, as always, by Ron John Roy. Ron John, welcome. Hello. And we also have a very special guest, Jim McKelvey, friend of the show, co-founder of Square, and founder of Invisibly, is here. Jim, welcome. Thank you. It's gonna be fun. Yes, it will. So, you are also an independent director on the Federal Reserve of St. Louis.

• 1:40Speaker 01

  I'm currently the chair of the St. Louis Board of the Federal Reserve.

• 1:44Alex Kantrowitz?

  Okay, so that gives you a great amount of perspective on what's going on in the economy, which is awesome, because I have no idea what to make of this, and I don't think a lot of people do. So, here are just a couple of factors that we're dealing with. We have inflation that's high, close to 5% core, which is double what the Fed wants.

• 2:04Speaker 01

  Yep.

• 2:05Alex Kantrowitz?

  Yet, the S and P is rising. It's up about 7% this year. We have banks failing. Anybody who listens to this show knows that well, and the Fed is continuing to hike rates. And then, of course, we have slowing growth, but we're still growing as an economy. And I put this all together, and I say, huh? So.

• 2:23Alex Kantrowitz?

  I'm just kind of curious what you make of all this and how people should be thinking about it.

• 2:27Speaker 01

  I honestly think things are fine. I mean, I've been in the meetings. You have a very smart, very dedicated group of economists and central planners and central bankers who are doing as well as we can, given we had to jam, you know, a couple extra trillion dollars into the economy to stop a global health crisis from cratering the world economy. So let's not forget, you know, kind of that everything was great and then we had to shut off the economic engine, not just of the United States, but of the world. And that in doing so, we caused this, you know, sort of one-time spike. And that's, that's sort of what's brought us to where we are.

• 3:10Speaker 01

  Now, I say sort of because we don't know precisely the effects of it because we've never done it before. Like, we've never taken in human history, a functioning world economy and shut it down for health reasons. But that's exactly what we did during COVID-19. So, uncharted territory, but from within, from within the Fed, I think it's going pretty well. Like, I would, I disagree with some of the decisions that are implemented. I agree with others. Which is kind of how it should be. Like, we don't want unanimity. You want a bunch of people like me and the people who matter. I don't matter. I chair a regional Fed Board. But we report in the Midwest and the St. Louis, you know, sort of Fed is five-state region.

• 3:52Speaker 01

  But I'm just one voice of many. But you want different voices and that's what we got. So, all told, it's not great. We would like to see inflation coming down. We think we are. We think we've seen that. That's probably why you saw the S and P jump.

• 4:11Speaker 01

  But we are also seeing some, you know, persistent core inflation, as you mentioned. So that's kind of a bummer. And we're working on that. And the great thing is that the FOMC and, you know, Powell in particular have been very trustworthy, which is to say they do what they say they're going to do. And that gives the markets a lot of confidence. It doesn't necessarily improve the markets because if he says, "We're going to raise interest rates," then markets stink. But like, the fact is that this guy's been 100% credible for his whole tenure. So, you know, trust.

• 4:46Speaker 02

  I think that point about it's fine, that's actually the weirdest feeling right now for everyone who's been watching the kind of like utter chaos of the last few years because in a way, as Alex, as you're saying, the numbers are pretty fine, like inflation is decelerating, job growth is not decelerating, it's decelerated slightly, but it's still good. We're in one of the best job markets, you know, in history. At every level, everything actually looks like they might do this soft landing and we might maintain growth and we might maintain inflation might come down and the economy might be okay. But I think is that, is that why everyone's so scared? Because we're just not used to things functioning properly?

• 5:29Speaker 01

  No, things have been properly functioning for over a decade. And I'd say we properly functioned in the course of a pretty major economic disruption. Like now, it didn't function perfectly, you know, but that's like, oh, the fire department had to respond and they put out the fire. This doesn't mean the building didn't partially burn, right? So you don't have, I mean, COVID-19 was a massive economic shutdown. I mean, the skies over Mumbai were clear blue for months. That's how badly we were impacted. And, you know, we tend to say, well, but I wish everything was perfect and we didn't have a pandemic. And I'm like, yeah, I wish we didn't have one either, but we did. And I think we did a pretty good job. And, and more than that, you

• 6:14Speaker 01

  know, having been on the inside the entire time, I can tell you that the team who wrestles with these problems, these are great people. They are not politicians. As a matter of fact, when you join the Fed, as I did, you give up politics. So I'm politically neutral now. I'm neither Republican or Democrat. I vote against or for both sides, you know, it's just not this thing that gets caught up in politics, which almost happened during the banking shutdown. Like if you want to talk about the, you know, the sort of the scary thing, which was you say all these bank failures. Well, all right. Not too much has impacted people or businesses. We've had a couple of banks

• 6:54Speaker 01

  that have changed hands. And SVB was a big scary deal. Okay. But to bail out SVB, as they did, I thought was the perfect solution. And, you know, we can talk about that if you want, but that was an example of the system working, right? Something went wrong, and the people who were in charge fixed the problem. Okay, that's kind of what you want, you know? You want the paramedics to show up, defibrillate, patient goes, oh, okay, yeah, I'm alive.

• 7:27Alex Kantrowitz?

  Yes, but the defibrillation doesn't always work, though. It's kind of like probably a lower percentage chance. I mean, I know it's an analogy, but there's a lower percentage chance of working than a lot of people think it does. And now, when we talk about fine, we're like thinking, okay, are we going to hit? Everything that I'm hearing now, like that you sort of take into account all the rumblings. And it seems now that people were like saying, okay, previously, we're going to have a soft landing, or even no landing, and the economy is just going to sink. And now the consensus seems to be just, you know, the, you know,

• 7:58Speaker 01

  I mean, that's the magic, that's the double backflip. It's happened like two out of the last 12 recessions.

• 8:04Alex Kantrowitz?

  So how bad do you think, if we are going into a recession, do you think we're heading there? And how bad will it be if we go there?

• 8:11Speaker 01

  I mean, recessions suck, except they do cure inflation, right? And if you're unwilling to accept a recession, then it's very hard to fix inflation, because the market says, well, they'll never let it turn down. And therefore, the market never cools off. And therefore, you got inflation forever. And that's, that's way worse. Okay. So I'm not minimizing the effect of a recession on people, because, you know, I've lived through several, and they suck. That said, inflation, systemic inflation, erodes everybody's money. Like, you're getting poorer every day until we fix this. You don't want to get poorer every day. And you're getting passively poor, which means your bank account looks the same. So

• 8:56Speaker 01

  you feel okay, but it's like this cancer. So, I mean, I'd rather not have cancer.

• 9:04Alex Kantrowitz?

  Same here. So let me ask you then, like if given the option, I'm not Controversial take there, Adam.

• 9:09Speaker 01

  Yeah, we're the cutting edge of this podcast, yeah.

• 9:13Alex Kantrowitz?

  So let's talk about those, some of the side effects that we might find as we end up making our way there if we end up there. So there's a lot of people that are now talking about the fact that we might have a credit crunch where banks are more reticent to lend. This is from Reuters, um, credit crunch fears may already be taking shape. Here's directly from the article, "A year of rising interest rates has already put smaller banks under pressure, competing for deposits, deposits that were leaking into treasury bonds and money market funds that paid more interest. The response, less lending, tighter credit standards and higher interest on loans was already taking shape. Officials are now watching for signs that this has kicked into overdrive." So I'm curious from your perspective, what you think about the potential for a credit crunch?

• 9:57Alex Kantrowitz?

  What, what really that means? I mean, is it just that like banks don't lend anymore? And how, how significant is that side effect of these rate raises if we end up hitting it?

• 10:08Speaker 01

  So that's what's supposed to happen.

• 10:11Alex Kantrowitz?

  Okay.

• 10:11Speaker 01

  What you described to me was exactly what is supposed to happen. So to me, I'm like, yeah, now does that impact certain people? Sure, but nothing you said was scary. Now, what would be scary would be a, uh, you know, a death spiral where you get this, you know, wage price inflation or some sort of perpetual recession like they have in Japan, you know, or something where like we never come out of it. But the US economy is very vigorous, uh, employment is still kicking ass. I mean, that's the one thing that we look at and we're kind of going, wait a second, there's still way too many, um, you know, uh, jobs open.

• 10:56Speaker 01

  And so everything you described

• 10:59Speaker 01

  Yeah, I mean, you can whine and complain about it, but I'm telling you, it's like winter. Yes, the leaves fall off the trees and it gets cold. And you know, Ron is talking about how nice it was in New York today. It's beautiful, like spring comes, but don't whine about winter or like then move to Miami where, you know, we don't have it.

• 11:21Alex Kantrowitz?

  So the tech scene is really blossoming in Miami, Jim.

• 11:24Speaker 01

  So I'm going down to speak in two weeks. So, yeah.

• 11:26Alex Kantrowitz?

  Okay.

• 11:27Speaker 02

  But I think that's exactly the point that is it a credit crunch or is it just credit tightening?

• 11:32Speaker 01

  It's credit tightening.

• 11:33Speaker 02

  Because rates are going up and exactly.

• 11:34Speaker 01

  Well, I mean, look, so, oh, I'm sorry. Go ahead.

• 11:37Speaker 02

  No, no, but I think you're making the exact point that we're just so not used to this that this is how it's supposed to work, but people haven't seen it work in so long that I think that's where every little movement feels like it's much bigger than it potentially is where it's just, this is normal business cycle stuff.

• 11:55Speaker 01

  Yeah.

• 11:55Speaker 02

  But.

• 11:56Speaker 01

  It's normal. And by the way, I would add that the banking cycle we've been through over the last 15 years has been abnormal in that banks haven't been lending during that time, like all that upswing. The banks weren't lending, like I built a company that does a like does billions of dollars of lending in the banks faces. Now, how could we do that? Well, the answer is they abandoned the small businesses. I mean, Square Capital lends out tremendous amounts of money at very fair rates. We make a return and everyone loves it. And the reason that market exists is because the banks abandoned it, not like in the last couple of months or years, but like over a decade ago, they stopped lending to a small

• 12:38Speaker 01

  and small businesses because I actually don't know why I won't, I won't fill in the blank there, but I can tell you that that what that's what allowed us to build, you know, sort of a massive lending business on top of a massive payments business.

• 12:51Alex Kantrowitz?

  What's your guess as to why?

• 12:54Speaker 01

  Um, I think it was too easy to make money just parking it at the Fed.

• 13:00Alex Kantrowitz?

  Huh.

• 13:00Speaker 01

  Like you used to be able to just get this spread from the government and you know, it's easy living on the government. Uh, lending is messy and risky and challenging and the Fed's really safe. So if you've got a positive return by just parking cash, then that's what you do. And if you, and you know, it's a great oversimplification. I think it, I think it got too easy for banks. And they just stopped doing the, the tough work. Believe me, lending is tough. Banks stopped banking. Yeah, kind of.

• 13:32Alex Kantrowitz?

  I'm going to keep reading, uh, different points of evidence to show that it might not be fun and let you tackle them, Jim. I'm getting a sense of like the dynamics of this show, which is that we have Jim and Ranjan teaming up against me, which is fine. This is sort of how it goes usually, but let's just, let's just go through some of these things. The other thing that people are saying that could be a systemic risk is the fact that commercial real estate is not in a good point, not in a good place, that all these companies had long leases in these buildings and these buildings had all their, uh, money tied up in regional, small and regional banks. And if companies break their leases or just can't pay because they don't, they're not going back to

• 14:13Alex Kantrowitz?

  the office, then this will eventually fall on the banks. Let me just read a, um, a short thread from Zach Koleas, who is a friend of the show, venture capitalist in San Francisco. He says, "My good buddy Jay Seiden at Cushman just posted his latest Q1 San Francisco commercial real estate roundup. He is not on Twitter, but it is good stuff. So posting below, it's incredibly grim. Employee, employee office attendance continue to track, continues to track right around 40% of its pre-pandemic level. At this rate, it'll be years before any sense of vitality returns to downtown. Overall vacancy is now 24.8%, the highest on record and up slightly

• 14:54Alex Kantrowitz?

  from last quarter. San Francisco is sitting on 21.1 million square feet of vacant office space." Now I know that this, you know, VCs like to talk about San Francisco because they're, many of them, for many of them, their point of focus doesn't extend beyond that 800,000 person city. And so I'm curious, though, if this is, it does seem like it's something going on around the country. And so I'm curious, like, what you think in terms of the bigger threat over here in terms of the commercial real estate issue.

• 15:23Speaker 01

  Yeah, well, I mean, we abandoned our office in San Francisco, moved it to Oakland. So that's a vote for the region and a vote against San Francisco. San Francisco was a disastrous place to build a company. I mean, if, I won't say that I regret what happened at Square, because Square was very successful. And we don't know how much of that was due to our location. But I will tell you, the way we were treated as an employer was horrible. And eventually, we had to leave. So it was not a good place. And I think a lot of tech companies are finding out that there are other places to go from San Francisco that aren't as dysfunctional. Not to mention the fact that a lot of my friends in San Francisco just flat out won't

• 16:05Speaker 01

  go there anymore. Like, they're just afraid of the city. And it's just kind of devolving. Not San Francisco. So I mean, if you're stats from there. But look, office market in general, of course, like, duh, like, you're at your house, I'm at my house. I've never been to Ron's house, but that I don't, I don't guess you've got a bed and three guitars, you know, in your office.

• 16:30Speaker 01

  If you do, that's

• 16:31Alex Kantrowitz?

  Elon Musk does.

• 16:33Speaker 01

  You got a friggin bed in your office, then you are my HR hero, you know?

• 16:42Speaker 01

  But yeah, I mean, you know, here's three votes for working at home.

• 16:46Speaker 02

  Yeah, but I do think, I mean, how do we conflate the commercial real estate, like, whatever pressures it's facing? I mean, the work from home is only part of it, right? There's also just the overall economic cycle that it's also contending with. So it's getting hit on both sides. I think the more interesting thing to me here is how much, how many sectors are inflated in their value? And they're trying to do whatever they can to pretend they're still there. Because I'm guessing every commercial real estate company is trying desperately and will do whatever it can to just keep those values appearing like they're still high, the same way any late stage venture

• 17:26Speaker 01

  Yes, I was about to use the analogy of

• 17:28Speaker 02

  Yeah, that's where I was going.

• 17:30Speaker 01

  That's where we just extrapolate from the last funding round, and everything's great, Stan. We just won't be able to give you any money back. Sure.

• 17:40Speaker 01

  Look, it's a double whammy. I think the, I think the real question is, you know, what happens to that real estate? Because real estate is interesting because it doesn't disappear. It gets repurposed, you know? And maybe it turns into housing, maybe it turns into, you know, indoor farming, you know? Maybe it turns into, you know, space to put small fusion reactors. I mean, like, I don't know.

• 18:05Speaker 01

  And I sort of bet on this, you know, a little bit because I bought some buildings during the downturn. Just empty commercial buildings because they were, you know, kind of buy one, get one free. And because I, I kind of think that people are going to come back. Because I've, I've met with a lot of companies. This has been sort of my sort of side gig right now is just, you know, talking to CEOs about like, are you making your people come back? And if so, how and why? And, you know, that falls into two camps. Some are the, hey, we figured out remote work and it works great in our business. And therefore we don't ever need an office. Okay, cool. And, and, you know, Block is kind of that way. Like, we have offices and we love the offices, but they're not as full as they used to be and probably never will be.

• 18:50Speaker 01

  So, so we don't need as much office as we did. So that's, you know, that's kind of one option.

• 18:57Speaker 01

  I'm seeing a lot of companies, one of my other companies, forced everybody back. And when I say forced, it's like get your ass into the office. And that company has had this sort of creative renaissance. And I think it was because people are bumping into each other the way they used to. So I don't think the office market is dead. I think it's cyclically bad, which means it's a good time if you got, you know, crazy guts to buy office, you know? Buy, go, yeah, I mean, you'll look like a genius or an idiot. So, you know, don't take it best.

• 19:31Alex Kantrowitz?

  One or the other. So you don't see any broader risk though to the regional banking system for holding the loans on these buildings?

• 19:37Speaker 01

  No, they're going to get blooded, you know?

• 19:40Alex Kantrowitz?

  They're going to, oh, they are going to get hit by it.

• 19:41Speaker 01

  Yeah, yeah. But the banking system is designed for stuff like this. Like cyclicality is not a unheard of problem. It is something we deal with. And again, like, the question is, okay, let's say the banking system is going to get hit. What do I as an individual care? And the answer is, well, not really that much. Like I, my money's safe. We've proven that. So now as an investor, do I care? Well, yeah, that depends on what I'm betting on, right? But as a banker and a consumer, I'm cool.

• 20:20Alex Kantrowitz?

  All right. So a product of all this economic uncertainty is that venture capital funding is down. We have a story that Ron John picked up looking at global VC funding in the first quarter. It was $76 billion, which is nice, but it's 53% down from last year's Q1, which was 162 billion. And that's even with 10 billion going to OpenAI. So that makes up more than 10% of the entire amount of money going to startup companies was just that one investment there. So I'm curious, what do you think about this decline in VC funding? I would think that that funding would continue to be robust because they have all this dry powder that they need to spend,

• 21:04Alex Kantrowitz?

  that they've raised from LPs on, you know, long running funds, but it doesn't seem like that's making its way to startups.

• 21:12Speaker 01

  Well, and I have a VC fund that's got, you know, close to a billion dollars that we move around, or I should say funds. Our funds tend to be smaller, but we have a lot of them.

• 21:27Speaker 01

  And yeah, things have tightened up a lot and we're happy about it. I mean, I think it's a good time to be in the venture capital business. I thought the last several years were ridiculous. We were, we had founders getting funded for like really terrible ideas and really ludicrous business plans. And I mean, I could list them, but that's just gratuitous. I think the basic,

• 21:50Alex Kantrowitz?

  We would welcome that.

• 21:51Speaker 01

  Well, I mean, it's fun. I guess it's good commentary, but like, here's the question you have to ask, do good ideas die now because they don't get funded? And he says, no, absolutely not. If you've got a good idea, I'll fund you. Like my fund will fund you. Like if not, I've got dozens of, you know, friends at funds who would fund you as well. And VC is just a hobby for me. Like I do this, you know, on the side. I can dabble in real estate, dabble in venture capital, but I don't, I don't define myself as either as a professional.

• 22:20Speaker 01

  But in both cases, yeah, things are getting tighter and that's kind of good. Like if you have real value as a founder, now's a great time to be a company founder. Fantastic. I love downturns. Love it, love it, love it.

• 22:34Speaker 02

  How do you, but how do you see the dynamic of the dry powder playing out? Like is, can venture funds be as patient as they need to be? Whether that's like, you know, reducing investment for a year or two or three or whatever it takes? And just sitting on it? Cause I think that's like the tension right now. Where on one side you see these insane numbers that VC and PE is sitting on however many hundreds of billions of dollars of dry powder. But on the other, it's tight and things are going to get more selective and slowing down, which also I love your serenity. That's a good thing. But how do those two things get reconciled?

• 23:11Speaker 01

  Well, I mean, you know, this reminds me of the Steven Wright joke. I bought powdered water, but I don't know what to add.

• 23:20Speaker 01

  Like what is this powder? Cause if you think about how a fund is funded, like it's not like I write a check to Sequoia and say, here, Roloff, go crazy, you know? He calls capital as he finds and Sequoia finds opportunity. So yes, I've committed, you know, say a million dollars to a VC fund. That doesn't mean they've taken a million dollars. So yeah, they can, they can say they've got a million dollars, but they haven't deployed it until they deploy it. They don't need me to write the check. And a lot of the people who are writing these checks are now, you know, kind of cash tight. And some of them are missing their payments. So there might be a little ripple there. But the other thing is the VC world is tightening up in general. So you're getting better deals as a funder.

• 24:05Speaker 01

  So like, it's all kind of balancing out. There's, there's a, you know, couple of invisible hands, you know, sort of simultaneously at work here, but, but it does work, you know? So I personally think, again, don't care that much about the VCs. They kind of had a nice run for a while when capital was super cheap and anything that had potential yield could get investors. And so, you know, they rode on really mediocre overall performance. Like the, you know, look at the industry as a whole and you know, you'd be better in T bills, right?

• 24:43Speaker 01

  But. There were some funds that did exceptionally well. And of course, those are the ones that we talk about, you know, sort of like all my friends who come back from Vegas are winners. Because the only people who won talk about it, like the people who lost, you know, lost the Ferrari at the crap table, they don't, they don't brag about that, you know, it's the guy that beats the house. So there's true selection bias in those stories. But if you look at the overall industry, I think it's healthy. I think it's fine. My question is, if I have a good idea or a great idea, is the money available? Absolutely. Now, you'll, I'm going to get a bunch of calls from this, that people start texting me and go, Jim, you said you'd fund a great idea. And I just, now, shh, shh.

• 25:28Speaker 02

  They have great ideas.

• 25:31Speaker 01

  You have to go through the process where we determine if we think it's a great idea, we're wrong like 60% of the time, even with very, very smart people on it. But, you know, it's, I've, I've never seen a company with a truly great idea not get money. And Square funded in the middle of the worst, like a real recession, not this thing that might or might happen in some time now, you know, like, no, 2008, 2009, like, that was dark.

• 26:00Speaker 02

  Actually, what, when was the launch again? It was right around there, right?

• 26:03Speaker 01

  Yeah, 2009. It was like, as the, as the economy was scraping at the bottom. That's when we launched. And everyone's like, well, there's no money available. We were like, well, that's great. And people's salaries expectations are lower, and we can hire the best talent, which we did. And then, and then, lo and behold, we had a pile of money thrown at us forever, because we had a good idea. So I don't, I mean, this is, this is sort of the thing I go into in the book, which is, you know, if you, if you read the Innovation Stack, you're going to hear me harp on this again and again and again. But like, I think if you're inventing something, a recession is a great time to start. Just the best time in the world.

• 26:47Alex Kantrowitz?

  I would agree. I mean, big technology came out of like the depths of the COVID recession and ended up being a good time to start. So especially because the burn rate was low because you couldn't go outside.

• 26:58Speaker 01

  You're a survivor.

• 27:00Alex Kantrowitz?

  Exactly.

• 27:01Speaker 01

  You're a cockroach. Nobody kills you.

• 27:04Alex Kantrowitz?

  I'll take that.

• 27:05Speaker 01

  Yeah, no, it's a great cockroach and sewer rats, man. They're my idols.

• 27:10Alex Kantrowitz?

  Yes, I will.

• 27:11Speaker 01

  I got out of the way of a cockroach the other day. Like, there was this cockroach walking down the street and it just had such swagger that I moved.

• 27:20Speaker 02

  Well, come to New York. I just had a rat run over my foot yesterday and everyone around me looked and no one even laughed. I didn't even laugh. I just kept walking.

• 27:28Alex Kantrowitz?

  Oh, my God.

• 27:28Speaker 01

  Sat down and finished your entree, huh?

• 27:30Speaker 02

  Yeah.

• 27:32Alex Kantrowitz?

  This was not, this was not on our list of topics to cover, but New York has a-

• 27:35Speaker 02

  Once you brought up the roach, I figured I'd bring up the rat.

• 27:38Alex Kantrowitz?

  No, New York has a rat czar now. It's actually pretty exciting. So she's a former schoolteacher. Her name is Kathleen Coratti. This woman is my hero already. Her introductory press conference featured this line, "You'll be seeing a lot of me and a lot less rats." I mean, you have a better intro conference than that?

• 27:59Speaker 01

  Rules. I love it.

• 28:00Alex Kantrowitz?

  She's amazing. She just, but obviously the week that she comes into power, Rajan gets a firsthand, first foot encounter.

• 28:09Speaker 01

  That's because she's driving them out. She would not have seen-

• 28:11Alex Kantrowitz?

  Exactly. They're getting their last run-ins.

• 28:14Speaker 01

  The invisible ones.

• 28:15Alex Kantrowitz?

  Exactly.

• 28:19Alex Kantrowitz?

  So Rajan, should we touch on the Uber story before we go to break?

• 28:23Speaker 02

  Yeah, I just read it. I liked it.

• 28:25Alex Kantrowitz?

  Okay, so let me just-

• 28:25Speaker 02

  It triggered me earlier, so.

• 28:27Alex Kantrowitz?

  Yeah, so I'm actually curious to get Rajan's perspective on this. So last week on the podcast, actually this week on the podcast, a couple of days ago, Emile Michael, who's the former chief business officer of Uber, came on. We talked a little bit about this article in the Wall Street Journal that had the CEO of Uber, Derek Koshrosawi, driving for the first time in his nearly six-year tenure and finding all these problems in the app. And I wrote about it this week in a big technology story called "What the Heck Is Happening at Uber?" And basically looked at it in terms of what's going on, the- What it means about Dara's leadership, but also the fact that like they could keep throwing bonuses at drivers because of zero interest rate policy and that's dried up. And now they need to focus on the app itself versus just the bonus pool money.

• 29:12Alex Kantrowitz?

  So Ron, I do feel like this is kind of in your wheelhouse and I'm curious what your reaction is to the story.

• 29:17Speaker 02

  I was amazed because when the Wall Street Journal story came out again, you know, Dara has gotten into a car and you know, actually did some driving and suddenly found out that it's a clunky experience and it's terrible. As you said, six years in, I don't know who in the corporate communications team thought this was a good idea to push, but was also interesting was there was probably, this is one of those moments, there's like a few hour period where you saw people celebrating the story and being like, this is a CEO, this is a real CEO, you know, who's willing to get his hands dirty and drive. I think, and it's kind of odd to me because again, Uber is such an interesting company

• 29:59Speaker 02

  of where it's going to go because on some side, you know, the stock has not performed amazingly, especially since its IPO, I think it's flat or down. But again, on the other side, Uber Eats is solidifying itself as a big competitor. You know, their rides business is at least stabilized, even though, I mean, competitors like Lyft are just seem to be disappearing. So overall, they seem in a fine place, but I don't know, I was shocked that they would actually put him out there like that and think it was a good idea.

• 30:29Alex Kantrowitz?

  That's why the story seems so weird. It was like the nice headline and the splashy photo up top and then you start reading it. I think all the celebration is people that didn't read it.

• 30:38Speaker 02

  Sometimes, sometimes some journalists are amazing at kind of like not, you know, communicating one thing on the headline and then very quietly, you know, communicating something else in the subtext of the article. And it felt a little bit like that.

• 30:55Alex Kantrowitz?

  Yeah. Jim, did you see that story of Dara driving Uber for the first time?

• 31:00Speaker 01

  No, but man, I would have ridden more if, if I'd done, he was driving last week.

• 31:05Alex Kantrowitz?

  Yeah. Okay, let's go to break and come back and talk about a few more topics. We'll talk about some of this AI regulation going, going, going through Congress or the talk of it at least, and who owns the rights to content, which is very interesting, something that Jim could weigh in as the founder of Invisibly. And then we will talk about some more issues. So stay tuned. We're here on Big Technology Podcast with Ron John Roy. He writes margins on Substack. Go subscribe to it. And we're also here with Jim McKelvey, the co-founder of Square, founder of Invisibly, also the author of The Innovation Stack, which you can get on Amazon. The Innovation Stack, Building an Unbeatable Business, One Crazy,

• 31:47Alex Kantrowitz?

  Building an Unbeatable Business, One Crazy Idea at a Time, also director of the St. Louis Fed. All right, back right after this. This episode is brought to you by App Point. Everyone's racing to roll out AI right now. Co-pilots, chatbots, agents doing real work. But here's the part nobody loves talking about. All that AI runs on your data, and most teams have no single way to see it, secure it, and prove it's under control. That's exactly what App Point does. For 25 years, they've been the trusted layer beneath the world's most demanding data, now extended across your entire AI estate. Your data, your cloud, and the agents acting on your behalf. It's

• 32:29Alex Kantrowitz?

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• 32:55Alex Kantrowitz?

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• 33:38Alex Kantrowitz?

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• 33:56Alex Kantrowitz?

  And we're back here on Big Technology Podcast with Ron John Roy and Jim McKelvey. We're going to talk a lot about AI in this next segment, but also we got a fun, we got a real good fun story of the week, so that'll be at the end here. So stay tuned for that. And we're also going to talk a little bit about Square and its founding and like what the future of financial tech might look like. In the world of AI, we have a very interesting development. This is something called AutoGPT. Okay, if you thought GPT-4 was crazy, AutoGPT is even more nuts. So this is according to Harsh Maketa on Twitter. "It's an experimental, open-source attempt to make GPT-4 fully autonomous. The program, driven by GPT-4, chains together large language model thoughts to autonomously

• 34:40Alex Kantrowitz?

  achieve whatever goal you set." So basically, people have set this, these large language models and given them access to their computers, they can download things and just keep acting in terms of trying to accomplish the tasks. And people have this warning when you start using these AutoGPTs, like, monitor this closely because we have no idea where it's going to go if you let it running. And basically, you can shut it down if it starts doing things you're not happy with.

• 35:07Alex Kantrowitz?

  I'm curious what you both think about this new wave of AI and whether Auto GPT is like, is this scary? Is this exciting for entrepreneurs? Jim, what do you think?

• 35:18Speaker 01

  I think it's kind of fun. I mean, I wouldn't run it, but hey, man, I feel the way I feel about biohacking. You know, there are guys that are like jamming chips into their head and gulping down all sorts of, you know, crazy peptides and whatever. I love the fact that they're experimenting on their bodies and not mine. I, you know, have a pretty locked down, boring, old computer. I don't put a lot of important stuff on it. If you steal it, I don't care, except for a couple of photos that I lose. So I love the experimentation. I love the idea because it's going to be messy. Like AI is a new thing. It's going

• 36:00Speaker 01

  to be messy. So the folks who think that we can control it by completely avoiding the mess are probably unrealistic. That said, it's dangerous to think that we would give control over certain systems to, you know, some sort of sentient, non-human. And I don't know where that's going. I'm not an AI expert. My wife and I are working a lot on AI safety. We're funding a lot of, you know, sort of AI safety initiatives. And we do have investments in, you know, some of the companies who are, you know, potentially doing great stuff or doing dangerous stuff like we just don't know yet. But we think it's a, I mean, it's

• 36:45Speaker 01

  not something to ignore. It's something to engage in. So yeah, have fun. Experiment. Try it out on your machine.

• 36:52Alex Kantrowitz?

  I'm not touching this stuff. Ron, John, how about you? What do you think?

• 36:55Speaker 02

  I'll admit, I don't quite understand what the difference between Auto GPT and traditional GPT is from the explanation. And my for you tab on Twitter has become all Auto GPT threads about how powerful it is. And I mean, I'd spend like, I read a couple of articles and even then. I didn't quite get what's significantly different about it. And I think, I mean, this is where in terms of the hype cycle of AI, just the level of where we've gotten to, I think is it's amazing. I keep going back to ChatGPT launched on November 30th of last year, like, we're only a few months into this and we're already on, as we were saying, like, I was on vacation for two weeks and I, when I came

• 37:39Speaker 02

  back, we're in an entirely new world around what AI and generative AI was doing. So, I don't know, I think like, this stuff, to me, the biggest disconnect right now is, I want to see real products. And I know this is almost like a broken record, but like even Adobe yesterday, or I think this morning, made these big announcements around generative AI video editing and premiere. And I was kind of excited and I was like, all right, I'm gonna go try these out. But they're not actually public yet, and they're going to be debuted at a conference at the end of April, and then later this spring, they will be available to users with no specific date. So like, demo, I feel, again, having worked with this stuff a good amount, like, we're so far past the demo phase that companies should be

• 38:22Speaker 02

  launching real products. Or if AutoGPT is amazing, show me something, let me use a, like a program, let me improve my life somehow with it.

• 38:32Alex Kantrowitz?

  I think the cool thing about it is that you're able to give it a task and it can literally go and download programs to accomplish that task. So you can be like, paint me a picture in Photoshop, and it goes in and downloads Photoshop and gets painting. But I might be getting ahead of myself.

• 38:45Speaker 02

  It'll actually get me a Photoshop license and it'll, I know, I mean, that's specific, but that's what I'm, that's what I'm saying, that this stuff like theoretically versus in practice, that's exactly the kind of thing that, you know, like downloading a program to your computer and installing it and running it and creating a login and stuff like, imagine how many things don't work in that process. Yeah.

• 39:12Speaker 01

  Especially if it's an Adobe product. Oh, Jesus.

• 39:14Speaker 02

  Especially if it's an Adobe.

• 39:16Speaker 01

  The Creative Suite.

• 39:18Speaker 02

  Creative Cloud just updates my computer every few hours, I feel.

• 39:23Speaker 01

  Oh, yeah. I truly miss the days when you could just get a copy of Illustrator and install it.

• 39:30Speaker 01

  That was it.

• 39:31Alex Kantrowitz?

  So I did, yeah, I did download an Adobe video editing program and, oh my God. Yeah, downloaded all that stuff to my, I mean, more, probably more hardware, more software on my computer than it had originally. And I couldn't uninstall.

• 39:45Speaker 01

  No, you can't get rid of it.

• 39:47Alex Kantrowitz?

  You have to download an uninstaller from Adobe that's dozens of megabytes and then it will, only then will you be able to install it. It took me an hour to get rid of it.

• 39:55Speaker 01

  And you know, somebody at Adobe puts a hook and so like, well, what if they want to change their minds and want an undo button?

• 39:59Alex Kantrowitz?

  Exactly.

• 40:00Speaker 01

  It's like all there. It's just like, you know, commented out or something. It's, I, yeah.

• 40:06Alex Kantrowitz?

  Well, we're on the same page here on this topic. So Jim, what do you think the right regulation mix is on AI? There's a, there's an Axios story here. I mean, the Senate, this is what always happens, that there's a big technology issue when, when it comes to policy and the Senate is always confident they're going to get something done. So Chris Murphy from Connecticut, he's a Senator, he said, something is coming. Oh, he's talking about the boom and we aren't ready. So at least they're admitting that. Finally, we're at that point. But there's an Axios story here that talks about how Senator Chuck Schumer is spearheading the congressional effort to craft legislation regarding AI, on regulating AI, circulating a broad framework among experts in recent weeks.

• 40:48Alex Kantrowitz?

  The push is being treated as urgent and time sensitive, with the US not wanting to be left behind as other countries, particularly China, race ahead with developing the technology and shaping its rules. The goal would be to develop resilient regulations that can adapt to the advancement of AI technology and balance the need for security, accountability and transparency with facilitating innovation. I mean, I've seen them swing and miss at trying to do anything with Facebook. That seemed, what that ambition seems impossible to me.

• 41:20Speaker 01

  Yeah, I was gonna say, yeah, they should go do that. Like, I'm, I'm for them doing that. Now, would I bet that that will result in something that's successful? I do not. Look, it's very hard to regulate something you don't understand. And I have access to some of the world's greatest minds in the field of AI. And I've had conversations with some of them and hopefully more of them. And they are not unanimous. It's not a clear answer among the people who are in there doing it and actually understand it. So I would give the odds of senators, not, you know,

• 42:06Speaker 01

  to malign anyone in particular, I, I'd laud them for the effort and interest. But I think the best they could hope to do is watch it carefully. I mean, heck, there are many, many examples of government just failing to regulate even the most basic things that we all agree should be regulated and we can't do it, you know?

• 42:29Speaker 01

  So I don't think we're gonna get that.

• 42:32Speaker 02

  But what do we do in the meantime? Because even like on the copyright issue, and I know like,

• 42:39Speaker 02

  I mean, in terms of like what kind of regulation could actually come about? But should something, it feels like has to be decided relatively soon, right? Because otherwise, if every mod, like a subsequent model ingests every article, picture, and there's absolutely no regulation or no kind of general understanding and accepted norm around what's okay, it completely changes copyright law. It completely changes the way all these existing regulations on the books function without any real discussion or without any actual kind of like civic society engagement. So how do we, do we just have to wait till we get it? Or like, what should people be doing right now?

• 43:22Speaker 01

  Man.

• 43:25Speaker 01

  You hope there's not some giant negative externality wrapped in. And I say hope, like sometimes the market dynamics destroy things. So, you know, we destroyed most of the press by some bad math in the internet, which wiped out the newspapers, which wiped out basically all the reporters who collectively watched our backs, which now lands us in the situation where there's a ton of, you know, bad behavior that's not being exposed because we just don't have the, you know, culture of news gathering and fact checking and all that stuff that we used to, right? For a bunch of economic reasons, and that was just one where, you know, the invisible hand just raised its invisible middle finger.

• 44:10Speaker 01

  It didn't correct the situation.

• 44:14Speaker 01

  So I'm, and I'm not hopeful. I am still forming my opinion as to whether to be hopeful or pessimistic. I guess I am an optimist by nature, but I'm also a cynic. So, you know, that makes me bad at cocktail parties.

• 44:33Speaker 01

  And I think this is a scary topic. I'm glad people are talking about it. And maybe that's the best we can do. We can talk intelligently about it and try not to be too, you know, Terminator 2 about our, you know, prospects for humanity. But look, understand that we got to ask these questions. And I have no answers. So I am as confused and, you know, sort of worried as any person who reads.

• 45:04Alex Kantrowitz?

  Can you talk about this from your perspective, running invisibly, right? Where you're working on maybe fixing some of the economics that led to some problems with the newspapers? And, you know, it's kind of interesting because you might yourself now come into competition with the large language models delivering information that you're trying to with your app.

• 45:24Speaker 01

  Well, what invisibly is trying to do is let people take control of their attention. So fundamentally, it's about an individual having control, which I mean, you should choose what you read, you should have access to everything, and be able to access it whenever you want on your terms. So you shouldn't be blocked by paywalls or disrupted by ads. But it's not like magic. It's not like this doesn't have to be paid for. So the question is, how do you pay for it? And the sort of the cool thing that we've got going at invisibly that I don't even know if you know about this yet, because it was, you know, sort of developed in the last couple of months. We figured out passive earning, and we're putting that into the product.

• 46:05Speaker 01

  It's not in the product. So if you go download invisibly's app today, you won't get this. But in, you know, four to six weeks, you will. And it's passive earning, which is to say you can hook up data streams. Like, let us look at your bank account. Now, we can't touch the money, but we can look at the money. If we can just look at the money, we can actually sell that information, earn money, and then allow you to buy subscriptions to your favorite magazines. So you want to read, you know, the New York, well, not the New York Times, but like the Wall Street Journal, you can read the Journal, you know? That's normally, you know, a pretty expensive subscription, and it's a great, high-quality magazine that you can get for free if you give us.

• 46:48Speaker 01

  But it's not really free. You're giving us access to your data. And the only thing that's weird about that is that these big companies have been accessing your data for years and not paying you. They're making money off your data. So in our case, we're saying, okay, well, we'll do the same thing they're doing, sell your data, but we'll give you the money. So that's what invisibly is sort of doing. And at the heart of it is this idea that the individual should be in control. That, you know, that me as a, like, I should be the person deciding what

• 47:22Speaker 01

  I choose to read and what I choose and how I choose to pay for it. So I can pay by a number of ways, but like passive payment to me is really cool because you hook it up once and then like you got a lifetime subscription to whatever you want.

• 47:37Speaker 02

  Wait, sorry, can you passive payment, payment, meaning like if I, can you go through that concept again?

• 47:45Speaker 01

  Yeah.

• 47:45Speaker 02

  Because you had said.

• 47:45Speaker 01

  So you've got a bank account, you've got a couple of credit card accounts, I'm assuming.

• 47:49Speaker 02

  Yeah.

• 47:49Speaker 01

  So let us look at them, i.e. give us the, you know, password to have a view of them. Not that we can write checks or charge your card, but I just need to see where you're spending money. That financial data is very, very valuable. So I package that up, invisibly packages that up and sells it. Okay. And you get money for that and that money comes back to you. But.

• 48:15Speaker 02

  Instead, instead of like some of the kind of like traditional, let's say hedge fund service providers that just

• 48:21Speaker 01

  Yes.

• 48:22Speaker 02

  pay the banks or pay the credit card companies directly for that packaged financial data. It's actually going directly to the user.

• 48:29Speaker 01

  Yeah, it's worth.

• 48:30Speaker 02

  Like with the bank account. Okay.

• 48:31Speaker 01

  We're still trying to figure out exactly what it's worth per month, but it's worth, you know, dollars per month and not cents per month. And so that's, that's a revenue stream. Now the question is, well, what do you get from this revenue stream? And we did in an experiment early where we let people just cash it out. We said, you know, here, take it, take it on a gift card. And we found that that created massive fraud, like all these people would come and like fake having all this financial data and all this stuff just to get the gift cards. And it's like, okay, forget that. So now what we've done is we've said, okay, you can have super valuable premium subscriptions to your favorite media sources.

• 49:12Speaker 01

  Turns out the fraudsters don't want to read The Economist. They don't have this hankering to open up the SF Times or read Barron's, cover to cover. So the fraudsters all go, "Ugh, well, we can't cash out." I mean, they're not interested. So we got rid of all the fraudsters, but now we're giving real value to real humans. Because like the idea, like I spend hundreds of dollars a month in subscriptions. Well, what if I could cut that cost and still have access? And still pay? I mean, it's not like I'm stiffing the Journal. Like, I will still pay The Wall Street Journal. It's just it's going to go through this intermediary called invisibly,

• 49:55Speaker 01

  where they're packaging up and selling my data on my terms. And then, this is the cool thing with invisibly, is that the user really gets to set the terms. So if you sit there and say, "No, no, no. I am totally creeped out by the idea of you looking into my bank account." I don't argue with you. I don't say, "Well, you're dumb, because everybody looks at your bank account, and I know this from founding Block." No, I say, "Okay, cool. If that makes you uncomfortable, let's talk about another way you could pay. How about watching these ads? Like, how about doing these surveys? Like, there are other things that you can do with your attention that will get you paid. And we take that money and give you all the stuff that you want." So, like, we're hoping to start with journalism.

• 50:36Speaker 01

  And the idea is to pay for the content that people really want. And right now, you know, the heartbreaking thing is that a lot of the best journalism, a lot of the best content is paywalled off, because that's the model that they use to create it. And so, a lot of people who would happily, you know, read these very high-quality publications or watch, you know, great content, can't because of the paywalls. So we're trying to eliminate that.

• 51:05Alex Kantrowitz?

  So we have like about 10 minutes left. So why don't we go to a question about Square? Ranjan, you can ask that and then we'll end up with this meme of non-negotiable expectations that some finance firm put out. Ranjan?

• 51:18Speaker 02

  Yeah, I had heard on a different podcast and I would love you to kind of walk through the story of the first Square reader. For context, I had left the US, I'd moved to Singapore in like 2009 and 10, had lived in New York before that. I remember coming back and seeing like street vendors with Square readers in what maybe was that 2012 or so? And it was the most mind blowing thing because like you'd had street vendors in New York forever. And in terms of just like, okay, everything has changed. That was one of those moments. But then I believe, can you kind of walk through the first prototype you had built? And then just kind of how it came to be from a design perspective?

• 51:59Speaker 01

  So I'm a glass blower. I used to be a professional glass artist. But basically I'm a guy who makes stuff that nobody needs. It's called art. And when I sell it, I sell it for a lot of money, but nobody needs it. So I better take the money when they're interested. And a lady came into my studio, actually she called and it was a phone order. And I couldn't take her payment because she only had an American Express card. Coincidentally, my friend and former employee, Jack Dorsey, had just been kicked out of Twitter for the first time.

• 52:34Speaker 01

  And was, had approached me about starting a new company. So Jack and I were trying to start a company, trying to come up with an idea. I lost this sale and the light went on in my head. I was like, I want to get paid.

• 52:46Speaker 01

  And my attitude towards my iPhone was that it should magically turn into whatever I wanted it to turn into. Like that's my attitude towards my cellphone, which is like, if it's a phone, if I want to be a phone, it's a map. You know, this morning it was a chessboard, you know, you know, tonight it's going to be, you know, a TV, you know, whatever. It's, it turns magically into this thing, except back in 09, it wouldn't turn magically into a credit card machine. So I was like, well, let's magically turn this into a credit card machine. So the reason you saw the little white Square readers is that, you know, the mag stripe on credit cards used to be required for a Safe transaction. So you kind of had to read that. So we sort of hacked the system and built a mag stripe reader that was super cool and super cheap. And so we just gave it away.

• 53:31Speaker 01

  And millions and millions of people, including many street vendors, decided that they wanted to get paid too. So that turned into Square. And then we had a bunch of other sort of brilliant people come up with other products that have actually even done better than that original idea. But the original idea came from me losing a sale.

• 53:51Speaker 02

  How did you know? How are you connected to Jack Dorsey before that?

• 53:56Speaker 01

  Jack and I are both from St. Louis and Jack used to work for me at another company that I actually still own. Like, the company that I first employed Jack at, Mira, I don't know, 30 some years later, is still making money and in business. So, but that, Jack and I both used to work together.

• 54:15Speaker 02

  Okay.

• 54:16Alex Kantrowitz?

  Nice.

• 54:17Speaker 01

  Yeah. Be nice to your interns.

• 54:19Alex Kantrowitz?

  Yeah.

• 54:20Speaker 01

  If you get an intern, you really know.

• 54:21Speaker 02

  Wait, was Jack your, Jack was your intern?

• 54:23Speaker 01

  Summer intern, yeah.

• 54:25Speaker 02

  Ah, alright.

• 54:26Speaker 01

  Yeah, payback's a bitch. He's not my boss.

• 54:31Alex Kantrowitz?

  So, let's end the show with this. There was a slide from a company, a, I think, finance company that went around the internet last week about non-negotiable expectations. Oh, it was a law firm. Okay. So I'm just gonna read these expectations and let's see if they're fair or not. It says, PH is an American law 20 law firm. You're in the big leagues, which is a pressure, which is a privilege. Act like it. That's number one. Number two, we are in the business of client service. You are the concierge at the Four Seasons, a waiter at Alina. The client always comes first and is always right. If a client wants

• 55:12Alex Kantrowitz?

  a mountain moved, we move it. No questions. And then beyond that, as a junior, your clients are the associates and partners of the deal team. Three, you are online 24/7. No expectation, no exceptions, no excuses. Four, timelines slash quality. Clients expect everything to be done perfectly and delivered yesterday. Five, someone is paying $850 for one hour of your time. Think about that in everything you do. All communication and work product needs to be prompt, professional, and polished. Six, take ownership of everything you do. Once you touch a document slash work stream, You own every mistake in it, fair or not. Seven, work from home is a luxury. Don't take advantage of it.

• 55:55Alex Kantrowitz?

  Buy a full home setup, two monitors, docking station, keyboard slash mouse, and a working phone. Or come into the office, no poor connections, no excuses. Three, see number three and five. Eight, no questions until you've tried to figure something out yourself. Google unfamiliar concepts, search the DMS, read statutes, read instructions, et cetera. Still can't figure out the answer? Talk to your classmates. Nine, I don't know is never an acceptable answer. Ten, this is your career. Embrace the reality and always put your best foot forward, if not for the firm or your deal team, for yourself. At the end of the day, it's your reputation that will carry you, whether that's here, in house, or in-house, or somewhere else. Make it count. Okay.

• 56:39Alex Kantrowitz?

  Some people were saying these are great expectations. Some people were saying they're unfair expectations. It's almost like this Rorschach test of people's beliefs and what happens in inside companies. So where do we land on this one?

• 56:52Speaker 01

  It sounds like that was written by some senior partners who probably worked 20 hours a week.

• 56:59Speaker 01

  And bill 60, you know, I'm sure they still bill 60 hours a week. My guess is that they wrote that from home.

• 57:07Speaker 01

  And

• 57:09Speaker 01

  I mean, I could go through it point by point. The one that really jumped out at me is I don't know is not an acceptable answer. I don't know is incredibly liberating. Now, the question behind it is, I don't care. That's probably bad.

• 57:27Speaker 01

  But if the question behind is, I don't know, but I want to and will find out, well, that's good. I mean, I spend my whole career in I don't know. Like, everything I work on is an I don't know. Like, I'm trying to build a company that's, you know, trying to make, you know, put you in charge of your attention for the first time in your life. We don't know how to do that. We've been at it for six years. We've vaporized tens of millions of dollars and we've got a pretty good early product, but we don't know exactly that it works. I mean, I don't know is where I live, so

• 58:02Speaker 01

  I would hate to.

• 58:05Speaker 01

  Force that out of my vocabulary.

• 58:09Alex Kantrowitz?

  Yeah, I'm also on the side of not endorsing this set of expectations.

• 58:13Speaker 02

  I'll, I'll, I'll take the other side in just to take the other side, but also it's a law firm. It's probably a big corporate law firm. And I think one of the big things that's been interesting is like how every, how the nature of work is kind of, everything's getting conflated. Like, you know, again, I worked in finance through the 2000s and there was a lot about it that sucked and that was just the way it was and you accepted it. And, you know, it kind of, that cycle continued. But it was finance and is the entire industry really going to change? Or is there just certain things that based on the nature of the job are consistent? And I think the, the main takeaway of this is like all the

• 58:57Speaker 02

  future of work, everything has changed, stuff that came out of the last couple of years. It's a reminder that certain things have not changed and big corporate law firms. Like it's almost like if they are to change the way they operate and their behavior and their attitudes, the entire facade comes crumbling down and then, you know, you have to rebuild something completely new from scratch. So I think, I think it makes sense.

• 59:19Alex Kantrowitz?

  You'd be in favor for that tiering down and rebuilding.

• 59:22Speaker 02

  I wouldn't be, I wouldn't be against it.

• 59:24Speaker 01

  Yeah. So we're, um, cause we have a couple of companies that build software for law firms and the big firms are splintering into these smaller firms and they're, you know, it's all partners walking out with their book of business and, uh, yeah, the industry's in a shakeup as we speak.

• 59:42Speaker 02

  And then I guess if that's the case, then trying to retain talent with these, uh, 10 beautiful, non-negotiable expectations are probably not the right strategy.

• 59:52Alex Kantrowitz?

  Yeah.

• 59:53Speaker 02

  You brought me over back to your side then.

• 59:55Alex Kantrowitz?

  Wow. Well, this is a good time to end then, right? Chalk up a victory and call it a perfect podcast. Okay, well, let's do that. And Jim, just want to say thank you. It's always great to speak with you. Really appreciate you coming on and sharing your insight, and I hope we can do it again soon. You can find Jim's book anywhere you buy books. It's called The Innovation Stack Building and Unbeatable Business, One Crazy Idea at a Time. You can find Jim's app invisibly in your app store of choice. You can find Ron John's newsletter, Margins, in Substack, ReadMargins.com. Good thing you have that custom domain, not blocked by Elon. You could also find mine at BigTechnology.com, also not blocked. For now, we'll see what happens.

• 1:00:39Alex Kantrowitz?

  All right, for Jim McKelvey and Ron John Roy, I'm Alex Kintzerts. We will see you next time on Big Technology Podcast.

• 1:00:57Speaker 03

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