Tech IPOs Are Back, Google's In Court, Tom Brady's Working For Delta

Ranjan Roy from Margins is back for our weekly discussion of the latest tech news. We cover: 1) The return of tech IPOs 2) Is Arm's stock bounce really a good sign? 3) How Instacart is looking ahead of its IPO 4) Why every business is an ad business now 5) Our forthcoming interview with Airbnb CEO Brian Chesky 6) Google's antitrust case 7) Tom Brady's new job with Delta 8) Why we're buying the iPhone 15 --- 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?

  Tech IPOs are back. Google is in court with the DOJ. Flexport continues to, well, float around amid a new leadership change and plenty more is going on. We'll talk about all that as we come back after this. This episode is brought to you by Genesis. What does it actually take to put a Gentic AI to work across an entire enterprise? I recently spoke with Genesis Chairman and CEO Tony Bates about why orchestration is emerging as a competitive advantage in customer experience and what companies need to get right in the AI era. Then I sat down with Adam Mitchell, Head of Enterprise Business Solutions at Voya Financial, to go inside a large-scale Agentic CX transformation, including the business decisions, trade-offs, and lessons along the way.

• 0:44Alex Kantrowitz?

  You can watch both conversations now on my YouTube channel today. It's never been more challenging to get Frontier Compute. How do you know where to look, who to trust, or how much to pay? Akash is an open cloud that provides easy access, 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 a free consultation. That's akash.network/alex for a free consultation.

• 1:16Alex Kantrowitz?

  Welcome to Big Technology Podcast Friday Edition, where we break down the news in our traditional cool-headed, nuanced format. Ron John Roy is here with us. Welcome back, Ron John.

• 1:26Speaker 01

  Summer's over and tech IPOs are back. I'm excited.

• 1:30Alex Kantrowitz?

  That's right. So we had not only a huge tech IPO this week, where ARM is up 25% after it has IPO'd, but another one just filed. Instacart has filed and it's ready to go. It seems like after a two-year hiatus, tech companies are finally returning to the public markets. What do you make of this?

• 1:51Speaker 01

  Yeah, I think so. First of all, ARM, the AI chip design company that is controlled by SoftBank from my favorite Masayoshi son, their IPO jumped 25% on the first day of trading. And this is incredible. The IPO market has been in a drought essentially since early 2022. I think it was actually around the time Ukraine, the Russia conflict started. That was really when the market closed and it has not been open since. So it's been a year and a half that market's essentially been shut off. And if you think about every late-stage startup that has been itching to get out,

• 2:33Speaker 01

  ARM is the best sign ever. The idea that a company can actually IPO, see its valuation jump to $60 billion, I think is a hugely positive sign. And also, it's a win for Masayoshi son. It's a win for the overall vision. We haven't really heard about SoftBank in a long time. This is exciting for him.

• 2:57Alex Kantrowitz?

  Okay, so let me put the counterargument here, which is that, you know, there's been this longstanding belief that if your stock pipe pops on IPO day, then you're doing great. But it's all, isn't it all in how the banks price it? Like, you can kind of price it in a way that's going to make it pop. You're going to price it in a way you'd kind of want to be even, right? Because if it pops too much, you've left money on the table for the IPO, right? This year, you get paid, you and the insiders get paid the share price. And then once it turns to the market, that 25% gain doesn't even go to the company. So, okay, maybe it looks, seems like, oh, it's so hot, everybody wants it. But this is all in the pricing mechanism, right? So why do we care about the fact that it priced? In fact, isn't that a bad sign? Like, doesn't it show that the people who have taken this company public have actually done a bad job?

• 3:41Speaker 01

  All right, so if we are to get into IPO pricing, I think this is something, there's been plenty of debate. Bill Gurley was probably the most vocal around. When your IPO pops, you're essentially leaving money on the table, that that's money that you and your private, the, the long-term shareholders who took your company from start to going public, that it could have been given to them versus the retail investors or institutional money that actually bought on that first day. To me, I've always had a little bit of problem with that because it's still showing that there's excitement around the stock. It's still showing that people want to get interested and it kind of sets the tone because obviously if something drops on the first day, that's a very bad

• 4:25Speaker 01

  sign. If something is flat on the first day, that also seems to show that there's not a ton of excitement around this. With, with ARM though, again, I, probably the most praise I will give Masayoshi Son, you already heard it at the beginning of this episode. One thing that was a little interesting here is it was still around $500 million worth of shares were actually available on the float for a $60 billion company. So it was still a very small percentage of the company was floated, which is, it's in a bit of financial engineering in the sense that, you know, rather than the whole company goes out and now everyone realizes money, it's let's take a small slice and then obviously the

• 5:06Speaker 01

  lower the supply, the easier it is for that to actually cause a large shift in the, you know, top line price. And then suddenly the company's worth $60 billion, at least notionally. But SoftBank still does own 90% of the company.

• 5:19Alex Kantrowitz?

  I'm sticking to my guns here. I think this is all financial engineering, not even financial engineering, but just sort of engineering, a bump and actually doesn't really bode so well for, for the company, but it might actually, okay, the psychological ramifications here may be that we end up seeing far more tech IPOs happen than we've seen in the past.

• 5:42Speaker 01

  People need IPOs.

• 5:45Speaker 01

  People need IPOs.

• 5:46Alex Kantrowitz?

  They're gonna look for any sign, real or not, real or not. Exactly. So maybe that, and now we're gonna have Instacart go out. I mean, what do you make of the fact? So Instacart is fascinating. It's like, we're gonna have this spate of IPOs start up. But the, the actual valuations that you're gonna see, I mean, obviously SoftBank did well with ARM. In fact, it's probably its marquee success and it needed one, right? But now we're gonna see some of these companies have been waiting to go public forever, actually go out to the market and we're gonna see what they're actually valued compared to these insane private market valuations that VCs had been putting them on. So Instacart is one that, that we're about to see. It was valued at $39 billion in the private markets.

• 6:28Alex Kantrowitz?

  And now it's gonna price at a range of 26 to 28 per share. And that's gonna value it at 8.9 billion at the midpoint, right? So you're gonna go from, this is according to the New York Times, right? You're going from 39 billion to 8.9 billion. Even if these startups do go out and do go public and have their IPOs, you know, are we even in a moment to celebrate? Or is this more of a desperation, needed an exit somehow? And this is just the only way left?

• 6:58Speaker 01

  Well, yeah, I, I do think that Instacart, Instacart was interesting for me because having written and had some level of notoriety around DoorDash and food delivery as a topic for our margins newsletter, I was very, very keen in looking at the numbers here. The most amazing part to me about Instacart is they are profitable. They had almost $428 million in profit last year. And the revenue, it's around 2.9 billion, I believe it was. It's, it's in the, you know, the billions, low billions of dollars. They're profitable though. What was more interesting was 30% of their revenue came from advertising.

• 7:42Speaker 01

  And advertising, again, everyone has been trying to switch to this. In fact, like DoorDash and their S1, the story was always, we'll start selling, delivering groceries, which will always be potentially low margin, potentially unprofitable. But then within our app, once you're there. Then the every vendor, every food creator, everyone will start to pay for advertising to move up in your recommendation feed. And essentially, it becomes, you know, like an advertising driven product and advertising is the highest margin business imaginable. So they kind of are showing that it's possible. And I was pretty surprised. Again, it never was a $39 billion company. Now it's, you know, being valued at four or five X revenue,

• 8:25Speaker 01

  which is fine, which always could have been the right valuation. So to me, where it's going out actually, and the fact that it's profitable, might be the most perfect sign of just a normal, healthy market.

• 8:40Alex Kantrowitz?

  Uber does advertising, Lyft does advertising, Instacart does advertising, Amazon does advertising. Everybody does advertising. In the end, life is just a long journey toward an advertising business. Big technology started as an advertising business. If anybody at the above companies needs some counsel about how to run an advertising business, hit me up. It's a great business. And we will never get into the food delivery business. We started in the high margin area. We're sticking with it.

• 9:10Speaker 01

  I might have to go do some DoorDash deliveries right after this.

• 9:15Alex Kantrowitz?

  Exactly. Now, let me ask you this, though. You said Instacart's profitable. I thought that profitability was the only thing the market cared about right now. And if you're able to turn a profit, you should be doing well. And yet, even still, the valuation that Instacart is going to go at is $30 billion less than one of its more recent private market valuations. So what does that tell you? Does it just tell you that the private market valuation was just completely illogical? What does it tell you? And what does it tell you about the broader market that even if you're meeting what the market wants, your valuation is still going to be as low as Instacart's is?

• 9:53Speaker 01

  But it's not, it's not low. That's what I'm saying. It's

• 9:55Alex Kantrowitz?

  Reasonable?

• 9:56Speaker 01

  It's, it's, it's longitudinally correct. It's the idea that like, I just wanted to say longitudinally. It's, it's, it's like 20 to 22 times earnings. It's four to five times revenue. This is where a, even like a pure technology company should trade a little bit more richly, but like, A company that is claims to be pure technology, but obviously has plenty of workers and real world presence, but still is kind of a technology platform. Yeah, it's a hashtag high margin areas. One of a someone commented on our live LinkedIn live.

• 10:37Speaker 01

  It's a it's it's it's actually to me, it's almost the perfect end to Zerp and to show that we're no longer in a manic era. When you see these numbers and valuations being ascribed to a business like Instacart, which appears to be healthy, growing, the growth is slowing a little bit, but everything and so is the economy like, like overall, if you show me any of these numbers, it would just be like, okay, this is a normal business. Everything, everything looks okay versus where we were a couple of years ago. And again, that $39 billion was height of COVID, height of pandemic. Instacart is the extrapolated pandemic future and it was just wrong. It was, it was wrong.

• 11:20Alex Kantrowitz?

  It's interesting because it just goes to show you like thinking about how all these companies have gone to advertising, right? The Ubers, the lifts, the Instacarts, this whole generation of startups that were sort of built on share economy, convenience economy. The businesses have not been strong enough. They have to go to an ancillary business like ads. What do you think about that?

• 11:43Speaker 01

  I mean, when is Airbnb going to get into the advertising business and you walk into your Airbnb, actually product placements?

• 11:52Alex Kantrowitz?

  Guess what?

• 11:53Speaker 01

  In your Airbnb. Well, again, guys, if you're out there listening, just go with it. Just take the idea.

• 11:59Alex Kantrowitz?

  They are, they are. And this is a great moment. Yes, they are a great moment to plug. Brian Chesky, sitting down with me on Tuesday. Podcast is going live on Wednesday here on the feed. Yes, it's happening. Just confirmed. I'm sitting down with him in New York. We are running it on Wednesday morning, 8am Eastern Time, and I will ask him about advertising.

• 12:20Speaker 01

  I listeners cannot see that I am that shocked that I did. I had not heard about this from Alex.

• 12:26Alex Kantrowitz?

  We get big interviews here on the show.

• 12:28Speaker 01

  Yeah, no, no, no, I'm saying, I'm saying the timing of that. Um, but exactly product placements in Airbnb is because advertising that what I remember Uber was always an interesting one for me because especially anyone in New York who's ever taken an Uber to JFK in traffic knows you essentially have call it 70 to 80 minutes of captive time where you are sitting there. You have the Uber app open periodically anyways, because you're checking your time to distance and you're like, sorry, your dude, you know, time to arrival. And so what better place to actually just stick some ads in and they're, they're doing it. So, so yeah, Airbnb, you walk in this brought to keels lotion everywhere like an Equinox.

• 13:13Speaker 01

  You, I think that's a good idea.

• 13:15Alex Kantrowitz?

  Smart business for them to get into. And it, by the way, it brings it full circle. Talking about when you're in your ride hail app, looking at it because what, why, I always asked, why is a company like Google, for instance, getting into the self-driving business? And it's not, it actually is a strategic compliment to what they're doing. Because if you're a search business and you're focused on bringing ads to people based off of the intent of what they want to do, there's no more high intent action than getting in a car and going somewhere, traveling somewhere. And if you control transportation, then for instance, your advertising business, now of course, that could be a good business on its own, but it's the advertising business that would always, you know, be the interesting part.

• 13:59Alex Kantrowitz?

  And I, and I do think that that's sort of what Google is, you know, long-term going to get into. You're there, you're sitting in the back there, there's a screen, you're looking at the screen, you're communicating with the Waymo that way. That's going to have ads on it. And there's another place where the ad business starts to triumph as well.

• 14:15Speaker 01

  Wait, so you're, so I get in my Waymo, it knows I'm going to a restaurant, serves me ads for some like discounts potentially, or competitors can, uh, start feeding me ads within my Waymos on the screen. I don't know, I don't know if I like this future.

• 14:35Alex Kantrowitz?

  Even better. You're going in a Waymo, it's take you to Burger King. The Waymo says, after your dinner, we can be here waiting for you, bring you to Carville. You'll get some ice cream at 10% off. That's gonna happen.

• 14:49Speaker 01

  All right, that actually, that is gonna happen. I agree with you on that.

• 14:54Alex Kantrowitz?

  You pointed out this interesting story that in the information by friend of the program, Corey Weinberg, about how there is a clash between Sequoia Capital and the former co-founder and former CEO of Instacart, Apurva Meta. Do you want to take us a little bit into that story and why you found it interesting?

• 15:12Speaker 01

  Yeah, I think so. Apurva Meta had been pushed out and actually, I believe it's Fiji Simo from Facebook.

• 15:21Alex Kantrowitz?

  By the way, just to, I'm just pausing quickly because talking about the future of ads, like it's no, it's no wonder that a Facebook CEO, which is a company that builds itself off of advertising, is coming in and running Instacart. You know, it sort of shows you exactly where things are going. Sorry, I digress.

• 15:38Speaker 01

  No, no, but, but, but that actually was the, essentially the kind of signal to the market in the stated move that, you know, like we built this as a pure logistics business and Apurva Meta, I think was from Amazon. And, but we're gonna move into advertising. So we're bringing in a Facebook executive to take over and it worked. But, but to me, the most interesting part is you had, it's this like incredible play by play and I strongly recommend if you're an information subscriber to read it or to subscribe to the information from the pieces from Corey Weinberg. It's, it's, it's this way of the under, behind the scenes, lead investors and founders, where do you value a company? You know, like how

• 16:23Speaker 01

  do you keep these inflated valuations? Do you cut it in order to attract more talent in order to actually get it to the public markets versus trying to raise more money at that inflated valuation? And it played out perfectly in this saga between Sequoia and Apurva. And I think it's, again, and we'll probably talk, touch on Flexport later in the episode. Flexport's another company where, you know, had an inflated pandemic valuation. Every single one of these companies that had an inflated pandemic valuation, this drama is definitely playing out behind the scenes.

• 17:00Alex Kantrowitz?

  Advertising is a great business. We're going to take a break, play an ad, and come back right after this. This episode is brought to you by AVPoint. 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 AVPoint 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 how more than 28,000 organizations deploy AI with confidence.

• 17:43Alex Kantrowitz?

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• 18:27Alex Kantrowitz?

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• 19:06Alex Kantrowitz?

  And we're back here on Big Technology Podcast, talking about the news of the week. Ron Jonroy of Margins is here with us. Thanks for sticking through the ad. Google, all right, they are in the midst of a very interesting antitrust case that really looks at the deals that they've made to put Google in the search bar as the default search and in some places icing out other competitors. You can go to some phones and you know, you type a search query in the search bar and automatically turns to Google. That's not an accident. Google pays billions of dollars for that space. And it also, you know, there are, there are places where you could just get Google and you can't get competitors. It's pretty interesting. So I'm curious if you've been following along this case, Ron Jon, what you think of it. And, and honestly,

• 19:51Alex Kantrowitz?

  the big question for me is Google, it's kind of funny watching the government go after Google as this big bad tech company while it's at its most vulnerable that it's been in modern memory. I'm kind of curious how you square the two of those.

• 20:05Speaker 01

  Yeah. In terms of Google's current state, we can definitely talk about if, have you gotten any of their generative search results yet?

• 20:14Alex Kantrowitz?

  Oh, yeah. I'm on generative search, generative search in labs. Yeah.

• 20:18Speaker 01

  And it's pretty good. We can definitely get into that and what that means for their overall business, at least I've found. But, but to me, the most interesting part of this trial, and it feels like a pretty strong argument is, so Google paid, I believe it was four to $7 billion a year to Apple to be the default in Safari. They paid Firefox, they paid Mozilla, the maker of Firefox, to be the default in their search bar. And it's actually the predominant source of revenue for Mozilla. So, so they're paying tons and tons of money to be the default. Meanwhile, their argument is we are the best search engine. Consumers, you know, like we're the default, but that's okay because

• 21:01Speaker 01

  we're by far the best search engine. Now, if that's the case that you're the best and consumers will choose you anyway, why pay billions of dollars to be the default? To me, as a starting point, it's totally counterintuitive and it's a strong argument that of course you're doing that because the search business, the more, if you are the default behavior, that means your search engine will get better because you're ingesting more and more data and more and more queries and you can make it better and better. So, so to me, it's at its core, it's a pretty strong case.

• 21:34Alex Kantrowitz?

  Yeah, that's true. I mean, I think that like the counter argument to that could be, yes, you are the best. People type you in more on a browser than they do any other search engine, but defaults are powerful. And how can you afford to not play that game? If the if the phone makers are setting it up that way?

• 21:53Speaker 01

  No, of course you can. But to argue that still consumers default to you because you're the best search engine, it just like if it's an open question of the highest bidder gets the default space. And this is a completely, you know, like a monetary based system, not a quality based system or one of consumer choice, then make that argument to me to another part of this, I think it's worth touching on is, I still always find it weird when the whole conversation is, the product is free. So it's hard to try to attribute anti trust in these cases with a free product, because to me, the customer here is still the advertiser. That's where the revenue is. That's where and advertisers, everyone,

• 22:38Speaker 01

  Google had no choice. They have to pay Google. That's why advertising prices for Facebook, for Google have risen over time. So so the lens through which to look at this should always be not, the product is free. So how do you really, you know, consumers are still getting a good deal. It's are the actual customers who are the advertisers, is it the best possible option and experience and output? But, you know, the the phrase Google tax is regularly used because it's almost you just have to pay to be part of search. Like, if you want to exist on the Internet, you have to pay, which, again, it's the greatest business model ever invented.

• 23:17Alex Kantrowitz?

  If you got a phone and you just ordered the new iPhone, which we'll talk about at the end, if it came in and the default was DuckDuckGo, would you keep that or switch to Google?

• 23:27Speaker 01

  I think I would be fine keeping it. I think most people would keep it. I used DuckDuckGo in the past again. I know you're a Bing boy, at least for a little while there.

• 23:37Alex Kantrowitz?

  Well, I was doing the Bing chat, but I've never really strayed from Google Search. Never replaced it with Google Search. So, you know, it is interesting. It's so convoluted because it's like, this is, the defense is, sorry, the prosecution is convoluted because it's like, the argument is, it's bad for advertisers who, you know, might have to pay a tax with Google, and they would much rather be able to like, you know, have competition between Google and a search engine like DuckDuckGo, which is all about not tracking. Meanwhile, who's that tracking done for? It's done on behalf of the advertisers. And Google happens to be like the king of tracking people online. So, it'd be tough to prove this one. I think the DOJ is going to lose.

• 24:18Speaker 01

  I mean, definitely, given the recent track record around antitrust, I'm not saying that it's a guaranteed win. But, but again, it's, to me, the interesting part of this, and I actually, I mean, on the topic of generative search. So, the thing that's moving search forward and making it better after 10 years, 12 years, where it consistently degraded as a product and was filled with more and more ads and became messier and just less useful, is generative AI and the ability to, and I do use ChatGPT for a lot of search type queries, and that Google's, for those, so Google has released in their Labs program, Generative Search,

• 25:00Speaker 01

  and it's pretty amazing, at least I've found, you put in a search query, and then this kind of like little bit of a screen unfurls of a different color, and there's an essentially kind of like a, an LLM-driven generated answer that says, here's the answer to your search, as though you're querying ChatGPT, with links out to the right. I mean, it's what search always was supposed to be. To me, though, the, the, the argument on the consumer side is, is if we actually had competition, where could search have gone? Or have been like, it's so clear, anyone who has Used Google, which is all of us, is knows that search is degraded over time in terms of quality. And like, the top half got filled with ads and it just, it didn't get better

• 25:45Speaker 01

  over the last decade. It's finally, because there's competition, getting better.

• 25:51Alex Kantrowitz?

  I was gonna argue with you, but as I've used generative search, I've started to like it. And I do think it's, it's pretty cool. I think it's, it's actually, it's a good experience. It's getting better.

• 26:02Speaker 01

  Now, the question is, what does that do to their business model? Because when it's gone to the point that like, 50% of the screen is occupied by ads, ahead of all the organic search results, and now generative search, it's back to that Google promise. It's clean, it's accurate, it's like, informative, it's, it's just, it's the answer that you're looking for. And then that's, that's what, again, Google, the original promise was. Now, it is that again. But then, how does that factor into their business model? I think it'll be interesting to watch.

• 26:35Alex Kantrowitz?

  It hampers the business model. And that's why they're doing cars.

• 26:39Speaker 01

  That's why they're doing, to show ads.

• 26:41Alex Kantrowitz?

  Like, there's something true about it. Exactly. They'll need to find new venues to show you ads. You know, it used to be back in, I mean, Google is the, the natural predecessor of Yahoo, right? And we rarely talk about Yahoo on this show for good reasons. It's kind of an afterthought in the tech world and long obsolete. It's kind of known as a dinosaur. But they've had a pretty interesting revival of some sorts. I don't even know if revival is, is the right word. But what have your thoughts been on where Yahoo has gone lately? Because, you know, obviously, it's not a competitor with Google, but it has had a very interesting second act, or maybe third act?

• 27:22Speaker 01

  I would call this at least the third, if not the fourth. Yahoo, for those who are unaware, was bought by Apollo, the private equity giant, in 2021 for

• 27:35Speaker 01

  Five for $5 billion. Now, what they've been doing is essentially like it could present itself as the ultimate kind of private equity turnaround story. The Apollo went in, brought in all new management. The information had this piece, talks with Jim Lanzo and the new CEO about how cutting costs, stripping down the organization, trying to actually find where the value is. And again, this is a company that still in the last quarter made 1.8 billion dollars in non-search revenue, but it's still declining. So all of these things, this is a company making billions in revenue. And it's interesting to me because

• 28:16Speaker 01

  certain assets, again, Yahoo Sports, fantasy sports, my, for years, I have been in leagues on that platform and it's been great. And everyone lives in Yahoo for the fantasy app, but then chats on WhatsApp or has to go out. They could have gotten into sports betting. Yahoo Finance, again, I think they were saying they get 100 million users a month. It's still one of the most trafficked properties on the internet. So then, and they, and to me, the finance one is pretty interesting because they now have a premium subscription product. I think it probably caught on well during the whole retail trading boom. But again, imagine some massive, some, you convert 2% of 100 million to pay you $10 a month,

• 29:01Speaker 01

  $20 a month. There's so many good business opportunities sitting there in this brand that clearly to folks like us or listening, listeners to the big technology podcast, probably not putting Yahoo at the forefront of that innovation and cutting edge technology. But again, there's a lot there that to work with.

• 29:24Alex Kantrowitz?

  I do think that we're just going to, you know, gravitate to become like Yahoo Fan Podcast.

• 29:29Speaker 01

  That's next.

• 29:30Alex Kantrowitz?

  For content, like the latest in Yahoo Sports. Oh damn, tuning in.

• 29:36Speaker 01

  Should we do it? Can we, do you think we could do an entire episode, just a Yahoo deep dive?

• 29:43Alex Kantrowitz?

  Well, okay, here's, here's what we'll do. So Jim Lanzon has been, who's the CEO of Yahoo, has been on the podcast. I've known him for a lot of years. I can ask him to come on to do a Yahoo podcast, but I just need to be sure that there's audience, you know, there's audience interest in it. So folks, if you want to have a full Yahoo podcast, go to the ratings on Apple Podcasts, hit the five stars, say you love the 915 show, the September 15 show. If we get more than three five star ratings on that, I'll take that as a signal that we got to have Jim on and then we can do a full Yahoo show. What do you think?

• 30:23Speaker 01

  I like this. I mean, reading this actually brought me back to, do you remember the mid 2010s Yahoo revival under Marissa Mayer? I think maybe we called that the third act there probably, but what did they bought Tumblr, they, they, they made a lot of moves at the time, I remember.

• 30:47Alex Kantrowitz?

  Yeah, they did. Didn't work out, did not work out very well. So maybe this one will work out better, but it will, I don't know, I still think it's going to be an afterthought for a long time. So, but maybe not. We'll have to do a Yahoo focused episode then to figure it out. Okay. Speaking of companies and second acts, Flexport right now is going through a bit of one of those. We've had Ryan Peterson, the, the former and now, you know, current CEO of Flexport, which is a logistics company and logistics tech company. And, and Ryan left, gave the company to Dave Clark, who came from the Amazon side and Clark had the company on his own for a handful of months, not even a year. And Ryan Peterson

• 31:32Alex Kantrowitz?

  has, has come back. So there's a lot of factors at play here. We talked a little bit about it on the show on Wednesday with Christie Coulter talking about Amazon. We talked a little bit about Clark. Ranjan, I've been getting texts from you for like the last week and a half being like, I think I learned something new. I'm, you know, doing more research about the Flexport story. I mean, I guess like I want to frame this with a broader question, which is that, is this just broader upheaval of startups post COVID trying to deal with the shocks? Or is the fact that this company has like, you know, so publicly like back, you know, Swung back and forth between CEOs over the past year. Just more indicative of Flexport and potentially just like, is this just like a simple story of picking

• 32:16Alex Kantrowitz?

  the wrong person to succeed a founder CEO?

• 32:20Speaker 01

  I, I think what's so interesting about this story for me is, again, having an incredibly public CEO and then chairman and CEO again in Ryan Peterson, like, you know, Twitter celebrity, essentially, like, where everyone, you know, hangs on his every word. That and him very publicly tweeting about rescinding offers and needing to and a fortress balance sheet, it makes it interesting. But in reality, I think this is similar to the Instacart drama we were just talking about, is yet another story of a company that was perfectly positioned in the pandemic. Not only was it perfectly positioned from a business standpoint in the explosion of

• 33:05Speaker 01

  e-commerce and the need for, you know, like faster, more automated and logistics. It also had, again, a very public CEO. So those things together clearly brought its valuation and fundraising to levels that could not be maintained. And, and to me, so, and I, I, listening to your podcast with Christie from Amazon on Wednesday, like, her talking about, you know, again, as Dave Clark, the assassin, the idea of like, you know, enjoying firing people and just hanging around. I, I still wonder how much of it was a culture clash and how much of it was simply he came at a time to, that everything was inflated in terms of expectations.

• 33:50Speaker 01

  There was just another piece that said that revenue is down 70% year on year for the first half. So basically 2022 first half versus 2023, down 70%.

• 34:01Speaker 01

  Yeah, it's just a lot of companies that were positioned well during the pandemic. It's are down. And so, so to me, I wonder how much of it was really cultural and how much of it was, he just entered a battle he could not win. And now Ryan Peterson's back. And again, in terms of the future of the company, it's, it's, maybe it will normalize and like Instacart is worth a reasonable amount now. Maybe Flexport just pivots back to where a reasonable valuation relative to its revenue and growth and then everyone's happy.

• 34:36Alex Kantrowitz?

  Right. And I do think that it was like, not only the fact that his, he couldn't win the battle, but it flamed out so quickly and so publicly. Also because he was, he brought a leadership team in, you know, of all Amazonians largely. And people who had been at the old Flexport didn't like it. And it seems like this leadership team was obstinate and weren't willing to change. And ultimately, like, you have like, a, a tough situation to begin with. You're, if you're not nice, not flexible, sort of ends up being where you, where you end up.

• 35:14Speaker 01

  Yeah, I, I think

• 35:15Alex Kantrowitz?

  Probably what happened here.

• 35:17Speaker 01

  Yeah, I think it's, uh, it's, it's a, it's, it's almost every story of kind of like large scale management change, pandemic valuation, Twitter heavy CEO, just, yeah, I think it's, I think more is going to continue coming out and we're going to learn more and it's gonna, this is an interesting one to keep following.

• 35:39Alex Kantrowitz?

  Definitely. Sorry, I know we, we wanted to end on iPhone, we'll end on iPhone. But as we get close to that, I just need to ask you about Tom Brady and Delta. So Tom Brady is now not just a spokesperson for Delta, which is kind of old news, it happened last week. But he's there helping as an advisor, teaching the teams there about leadership. Just as they rework their rewards program in a way that's really pissed off a lot of members of these Delta rewards. Now, okay, I'll admit, I think that flight rewards programs are like, Kind of a strange thing because they really matter to a very small portion of

• 36:24Alex Kantrowitz?

  the population as, as everybody else has this like really disastrous experience on airplanes and flying, even though there's just a true modern miracle and very safe. But so to me, like those who get like way in the weeds on these flight programs, it's almost like, okay, cry me a river. But however, it has, it has brought up a bit of a rebellion among the Delta gold medallion, or whatever it is, status folks who are now anti Tom Brady. Take us into the drama, Ron John.

• 36:54Speaker 01

  Yeah, well, I hope you're not calling out folks who spend a lot of time analyzing the minutia of flight awards programs because I am one of those people and I spend some time on, you know what, I'm proud, proud medallion for life. So.

• 37:14Alex Kantrowitz?

  The way, here's the way, if I flew all the time, I would absolutely be optimizing this stuff because I feel like, you know, at a certain point, just the, being on a plane all the time, it can really be soul crushing unless like it's made a little bit more pleasant. Sorry.

• 37:33Speaker 01

  Yeah, no, no, it is. And I've been flying a lot in the last year and a half, which is probably when I've been spending more time thinking about this stuff. But, but what's really interesting about this to me is, one, the Tom Brady angle, and I say this as a lifelong Patriots fan, my love for post NFL Tom Brady, sometimes goes up, sometimes goes down. However, Tom Brady is coming into Delta to not be a brand ambassador, but to actually give leadership lessons to the employees. I have never heard of this kind of arrangement. I don't know what it means. Or, you know, like, big companies always bring in speakers and pay them a speaking fee, or maybe have some kind of thing like

• 38:18Speaker 01

  that. Why the CEO of Delta would go on air and make this like it's a big announcement, was the most awkward, weird thing to me already. But yeah, the, but the, the outrage in the subreddits is Delta basically is just taking their rewards program and just slashing it, making it way less attractive, making it far less accessible for people in terms of lounges, in terms of free flights, in terms of upgrades, everything. And basically making it so you have to spend a lot more money. Which is interesting to me because again, the whole antitrust angle with airlines is something probably early on that pushed me towards the topic of antitrust.

• 39:01Speaker 01

  It was airlines because there's no other industry where the overall degradation of the entire experience is so clear to everyone.

• 39:10Alex Kantrowitz?

  Right.

• 39:10Speaker 01

  Who flies, yet the price goes up and the service gets worse. And it's all, it's an oligopoly. There's a few players, lack of competition. And because of that, it's, it's, and it continues and it doesn't get any better. And the demand is consistent as well because people want to fly, especially post-COVID. So, so I think it's the perfect kind of encapsulation of what's wrong when you don't have competition in a market. And it's also the perfect encapsulation of what is wrong with corporate marketing when you do something as weird as bringing Tom Brady to give your entire company leadership lessons.

• 39:49Alex Kantrowitz?

  I don't know, man. If you were in a meeting and Tom Brady came in, just came and fired up troops. You wouldn't leave there being like, let's go.

• 39:57Speaker 01

  No, man. I would want, I want Aaron Rodgers in there. Sorry.

• 40:01Alex Kantrowitz?

  You've just brought up the third rail for me. I've had a very, very difficult week.

• 40:06Speaker 01

  This might be the end of the margins, big technology relationship, I believe.

• 40:12Alex Kantrowitz?

  Nah, it's good. I would bring, I would bring either Tom Brady or Aaron Rodgers in here and let them pump up the troops. Maybe we can get him on.

• 40:20Speaker 01

  After Rodgers went out, I will, I bet on the Jets. I actually bet like 15 bucks. I think it ended up paying out. It was about eight to one, but I don't know. I have a feeling. I was like, I was, uh, and it was an incredible game. Do you, do you think the Jets have, are above 500 this season?

• 40:41Alex Kantrowitz?

  Yes, I do. Cause I think that like, they're not going to stand still if the quarterback ends up being bad. They'll bring somebody else in who can win. With that defense and that special teams and the offensive talent, you can do it.

• 40:52Speaker 01

  Do you know who I think they should bring in?

• 40:54Alex Kantrowitz?

  Who?

• 40:55Speaker 01

  Not to, to wrap up this segment. Tom Brady.

• 40:59Alex Kantrowitz?

  Yeah, definitely.

• 41:00Speaker 01

  He knows the AFC East. He's available. He's clearly got time.

• 41:05Alex Kantrowitz?

  He can take a Delta plane from wherever he is to

• 41:08Speaker 01

  Straight to, straight to the Meadowlands, yeah.

• 41:10Alex Kantrowitz?

  And get going right away. I support this. All right. Last, let's talk about the iPhone.

• 41:17Alex Kantrowitz?

  iPhone 15 is out. It was announced this week. Preorder is open today. You and I have both ordered the iPhone 15. I guess the big question is, do you see this as a mega cycle for Apple? Or is this just going to be another meh upgrade cycle for the iPhone? Leading to the big question of whether Apple is now really not as much of a growth company as it's been in the past. Three straight quarters of falling revenue. Looks like another one is going to come. Company really needs this iPhone 15. We talked about it a lot last week. So I'm curious, what made you upgrade and what you think the prospects are for the rest of, you know, the world following suit?

• 41:59Speaker 01

  This upgrade cycle, and I've probably said this many times on this podcast as someone who waited in line for hours for the first iPhone. And I think upgraded every year until the iPhone 10. I had not upgraded since the iPhone 12. This is the first time. So it's three years. To me, it actually, the bigger symbol of the iPhone 15 is I'm upgrading for the USB C charger. And just because it's been three years. I mean, it's, it's literally, there is nothing of particular interest about the phone to me. It's just, it's time for me to do what I feel. It's the USB C is going to be worthwhile for me.

• 42:41Speaker 01

  But other than that, I really find nothing that interesting about the way they presented the iPhone. And, and I think, I mean, do you, at a certain point, but, but I say this as someone who has AirPods, who just bought the Apple Watch Ultra, who has HomePods in my house. So Apple's still taking plenty of my share of wallet. It's just that maybe phones don't need to be upgraded every year. Like, or at least it doesn't need to be an event. It's, it's, it's moving on to focus on the Vision Pro, upgrade the things that. Maybe it's like AirPods get a buy every other year cycle, watch gets every other year

• 43:21Speaker 01

  cycle, but, but what that does to how people view Apple's numbers, it totally changes the entire trajectory of what was once and the iPhone company and it was the vast majority of their revenue.

• 43:34Alex Kantrowitz?

  Well, you'll note that they don't even break out how many iPhones they sell anymore, just the total revenue. So I think that answers your question. And, and you're right. I mean, it is, it is, uh, it's weird actually to continue to have these events. Like, you know, I remember as a reporter in San Francisco, going to those reveal events, like for the seven and being like, oh, this is amazing. You know, seeing the upgrades, like it doesn't have a button at the bottom anymore. That's super cool. And they would take us onto this into the hands-on area and there'd be like a thousand people with cameras, you know, jostling and Tim Cook walks the floor. It was this big thing. And I remember, I saw the videos this week of people in the hands-on area and I was like, we don't freaking need this. Like, it's the same thing. However, space-grade titanium, Ron John, can't say no to that.

• 44:19Speaker 01

  Space-grade, I need Johnny Ive to, I need Johnny Ive to tell me about space-grade titanium. Otherwise, I'm not interested.

• 44:27Alex Kantrowitz?

  Light enough to get into space, strong enough to withstand the elements, space-grade titanium.

• 44:33Speaker 01

  Wait, is that really what they said?

• 44:35Alex Kantrowitz?

  Yeah.

• 44:36Speaker 01

  Oh, wow. I, uh, wow.

• 44:40Alex Kantrowitz?

  Hey, look, we both bought without even having to hear the pitch.

• 44:43Speaker 01

  I know.

• 44:43Alex Kantrowitz?

  So at this point, the products are selling themselves. We can't really say anything.

• 44:46Speaker 01

  I know. I, I actually pre-ordered at 8:05 a.m. And again, to, to Apple's credit, and actually in terms of the power of Tim Cook, killer Tim Cook in the ecosystem, is on my iPhone, and I have an Apple card. It's not, I don't use it as a primary credit card, but I have one and I literally use it for the financing of Apple products. And it took like,

• 45:15Speaker 01

  Less than one minute to order, even say that I want to trade in a phone and it even is like, do you want to trade in Ron Jon Roy's iPhone 12 Pro Max? Click that. Okay, the new price is da, da, da. And then financing, here's the exact amount. Double click on the right side to enable Apple Pay and it's done. And just that power and it's financed and you get 3% back with the Apple card. Like that whole process was almost, it was scarily good and it was, it's impressive.

• 45:48Alex Kantrowitz?

  Yeah, I had never pre-ordered before and so I'm going to the pre-order and I get to checkout and it's like double click on the side of your phone to finish this purchase. Like see on my phone, there's already the checkout function and I'm like, what the hell? That is good.

• 46:03Speaker 01

  I'm, I'm, I still contend, Tim Cook would destroy either Mark Zuckerberg or Elon Musk in a cage match because look what he has built quietly, without any fanfare, without any boasting. He's just the most killer ecosystem of a company that's imaginable.

• 46:24Alex Kantrowitz?

  But you know, that doesn't count once you're in the octagon. It's all about.

• 46:27Speaker 01

  You're in the octagon.

• 46:28Alex Kantrowitz?

  Those are my fists for those who are listening. All right, everybody, thank you for listening. Thank you, Ron Jon Roy, for being here. We'll do it next week. By the way, we'll probably be having our 15s in hand at that point. It's the pickup time, so we'll do a quick little review, but we'll talk also about the week's news. Plenty to go on, plenty to discuss. Thanks again, Ron Jon, for being here.

• 46:47Speaker 01

  Thank you.

• 46:48Alex Kantrowitz?

  Thank you to everybody for listening and thank you to LinkedIn for having me as part of your podcast network. Always a joy, always great to be here with Ron Jon and talk about the week's news. We'll see you next time on Big Technology Podcast.

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