Box CEO Aaron Levie on Trump, the Tech Giants, and the Stock Market

As the pandemic flattens much of the U. S. economy, many technology firms are doing just fine. Business is moving online, and they’re well positioned to benefit. For tech CEOs like Box’s Aaron Levie, the experience can be bewildering. While you’re riding a wave most companies can only dream about, you’re watching the rest of the economy — including many of your customers — struggle to get by. In this conversation, Levie says this economy is “not sustainable,” and offers a look into his mindset as he tries to make sense of where this is all heading. 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?

  This episode is brought to you by Genesis. What does it actually take to put Agentic 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. 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?

• 0:43Alex Kantrowitz?

  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.

• 1:03Alex Kantrowitz?

  Hey, Aaron, thanks for doing this.

• 1:05Speaker 01

  Yeah, sure.

• 1:06Alex Kantrowitz?

  Do appreciate you coming on. Is it all right if we talk a little politics to start?

• 1:10Speaker 01

  Yeah, I am at your service.

• 1:13Alex Kantrowitz?

  Okay, great. All right, so I'll just cue up the intro and then we can jump right in.

• 1:30Alex Kantrowitz?

  Hello and welcome to the Big Technology Podcast. This is Alex Kantrowitz, and joining us today is Box CEO Aaron Levie. Welcome to the show, Aaron.

• 1:38Speaker 01

  Hey, thanks for having me, Alex.

• 1:40Alex Kantrowitz?

  My pleasure, you know, usually I would go up with an intro telling everybody about who the guest is, but I feel like everyone knows you and it's kind of interesting that you've made being an enterprise CEO, enterprise technology CEO, cool. How have you done that?

• 1:54Speaker 01

  Well, I appreciate the thought that I've done that. So that's great news. You know, I think probably more than anything, what's happening in the world, and we just happen to be early on this trend, is that people inside of business want the same level of user experience and the same quality of software in their workplace as they have in their home lives. And this idea of, you know, when you are at home, you can use amazing products from Apple and Facebook and Google, but then you go into work and you're just using legacy enterprise software that makes your life suck, like those days are obviously over. And that doesn't mean that all companies on the planet are using all these modern tools, but I think the writing is on the wall that the future of enterprise software has to

• 2:39Speaker 01

  be consumer-grade applications, simple experiences. And so when we started our company 15 years ago now, and then we pivoted in the enterprise, we just felt like the future of enterprise software had to look completely different, and it had to resemble much more of a consumer quality around what business applications would look like in the future. And so that's been our, you know, basically job number one and main goal since we pivoted in the enterprise about 13 years ago.

• 3:06Alex Kantrowitz?

  That's right. And your public persona is also like very human and authentic, and you react like normally, like it feels like you're one of us, which is like, you know, we get a chance to see your perspective on Twitter all day long. I mean, you can probably tell I fave almost every one of your tweets. So it's kind of great. And, you know, I feel like I have some sort of idea of where you're coming from, so I'm really excited for this conversation. As we go through it, we're going to cover three different topics. One is the current situation in the US, you know, talk a little politics, talk a little economy, then we'll move into competing with the tech giants and working in an economy dominated by the tech giants. And we'll wrap up with a segment that will cover the future of work. So let's just start with politics if we can.

• 3:48Alex Kantrowitz?

  So your stock price was $9.12 on March 13th, and today it's nearing $18. So it's basically double of where it was earlier in the year when the economy was crumbling. And it's largely due to the fact that the Trump administration has infused a good amount of money, more than $2 trillion, and saved essentially the stock market, also helped some people who aren't traders. But, you know, it's definitely a market-oriented stimulus package. So how do you feel about the Trump administration today?

• 4:18Speaker 01

  Yeah, well, great, great question, obviously incredibly important given this again, given the time that we're in. I think that this administration has mishandled almost every element of of the pandemic, you know, between the health response as well as the economic response. And to your exact point, I think way too much emphasis has been put on how the NASDAQ or the S and P is doing and not as much on how our actual small businesses doing, how our actual employees and and workers doing throughout the country. So so unfortunately, I think we've got this massive distraction of the stock market's

• 4:59Speaker 01

  performance, which, as you know, is is heavily weighted toward a couple of sectors and importantly, within those sectors, a few companies that are, you know, you know, really driving up the the results of the overall market to a point of of it almost being misleading around how well the economy is doing. So I think that unfortunately has been a big distraction. And and ultimately, the real essence of the problem is you have health crisis and you have an economic crisis. And in the health crisis, I think we've basically done almost everything possible to to ensure that we don't recover quickly and and that we don't create the right kind of, you know, health standards and social norms and infrastructure in the country to respond to the health crisis. And so that's put the onus more on businesses

• 5:43Speaker 01

  and and states and cities. And for something like a health crisis where there's no boundary, there's no territory, there's no dividing line on on politics, you really do need a federal response at some point. And that should have been done swiftly in the beginning of this crisis. And I think we know the playbook of what what largely should have happened between mask wearing and setting up the right kind of testing infrastructure and making sure that we had the right kind of health norms throughout the country. So that was the health crisis response that that, you know, right out of the gate, I think we got wrong. And shockingly, still in in August of 2020, we're still getting wrong. And then on the economic response. I'm less close to all of the dynamics here.

• 6:24Speaker 01

  I think the loans to small affected businesses, I think that was absolutely a noble and important effort. We can point to a tremendous amount of flaws with it around who got money, who didn't get money, all of those issues, but the swiftness, I think, was at least important. But I do think that putting more money in the hands of individuals who are affected by this in terms of if they've had furloughs or job hour reductions or job loss completely, we do have to get money just into the hands of citizens and people directly. And I think that's ultimately where Congress needs to step up. So I think I and many others in tech have been very conflicted because our businesses

• 7:08Speaker 01

  are doing well because we happen to be digital platforms that are remaining successful during this time because of the fact of how our technology, we're only technology companies. We don't have much of a physical requirement or presence. And so our businesses are doing well, but at the same time, we know that the economy and the health care crisis is very severe in the country.

• 7:30Alex Kantrowitz?

  Yeah, and you're a public sector CEO, Aaron, and it must be interesting to be in your shoes and to, obviously, you're a critic of the administration, but to see that number tick up, the one that matters, right? The stock number. Your stock is doing great. So how does that feel for you internally when you try to balance these two things?

• 7:51Speaker 01

  Yeah, I think it's, you know, there is a little bit of a conflicting tension there, which again is our business is remaining stable and I think relatively strong right now, which I think is good on its own because we can keep people employed and we can continue to serve our customers. And we've had a very large portion of our customers fundamentally using our product because they have to enable remote work and they have to keep their business operations running. So in many respects, our technology is sort of critical to keeping organizations running. Again, to have a stock market that is somewhat or You know substantively disconnected from from the broader economy, I think, does create

• 8:35Speaker 01

  that cognitive dissonance sometimes. But honestly, I think whether it's today where maybe our stock is doing, you know, well on a relative basis or two years ago where we maybe were underperforming the market, our job is fundamentally not to pay much attention to the stock price and focus mostly on just execution, serving customers, making sure employees are staying safe and healthy right now. And that's that's at least how I think about it from a pure kind of CEO standpoint.

• 9:00Alex Kantrowitz?

  Yeah, it's fascinating because the administration has been so focused on keeping this market strong. And of course, you're the beneficiary of that. But then there's also, okay, the customers that you serve, you need people buying your product in order to be able to be a sustainable business that can show the quarterly earnings that, you know, ultimately underpin that numbers. So you guys are speaking with businesses in the economy all the time. What's the sense that you get in terms of like how the middle? I mean, you know, we know the top of the economy is doing good, especially in the tech sector, but you don't just serve tech companies. So what is your sense in terms of like how the middle and really like the midsize, you know, small to medium and then small businesses are doing right now?

• 9:37Speaker 01

  Yeah, yeah. You know, I would say this is such a bizarre experience because because it's so dependent on sector and so dependent on on where where that organization is is serving their customers in terms of it could be geographically, it could be where in the supply chain stack do they exist? And so I think, you know, across small businesses, midsize companies and large enterprises, you have you have it's a it's a very bimodal kind of environment where you have some companies that are doing unbelievably well. We've looked at you've seen some of the earnings from non tech companies that are in retail like Target where they're blowing out all their numbers, they're having record, you know,

• 10:21Speaker 01

  same store sales. Equally, you'll look at other retailers that maybe don't have as much of a digital presence, or maybe their products are are a little bit more discretionary in nature. So maybe, you know, fashion or some other kind of retailer and and, you know, their numbers are decimated. And so in the exact same sector with maybe even in some cases, the exact same Strategy, you can have completely two completely different outcomes. The same is true for small and medium businesses. We have some small and medium businesses who happen to be in spaces that are on fire and they're growing rapidly. We have some small businesses, some in live entertainment as an example, some in retail.

• 10:56Alex Kantrowitz?

  They must be getting crushed.

• 10:57Speaker 01

  They're completely crushed and we've done our best to say, okay, hey, you don't have to pay us right now. Just, just kind of, you know, hang in there. We're going to continue to support you. We have nonprofit customers that, that they're not able to do the same level of fundraising or keep operations running. Because obviously there's less money going into those areas. So, so we've had to do our part to say, okay, if you have a really effective business, we're going to do our part and, and make sure that you can still use the technology. But, but at the same time, again, this is the, this is sort of this, this cognitive dissonance right now. If you're in the tech sector, there's probably been more net growth of, of technology irrespective of, of the, the, the sector specific problems.

• 11:37Speaker 01

  Because of the fact that what's happened is so many companies, even those that have been impacted, have to move to digital platforms to be able to, to, to remain successful and to keep their operations running. And so.

• 11:49Alex Kantrowitz?

  Right. So is this a moment where the tech industry just sort of takes over the economy and doesn't look back?

• 11:54Speaker 01

  Well, I, I think there's a real risk of that and, and I think that.

• 11:59Alex Kantrowitz?

  It's interesting to hear you call it a risk. Okay, go ahead.

• 12:01Speaker 01

  Well, I, the risk is, is that, is that you basically have this dramatic acceleration of, of innovation and, and digital transformation. And the, the, it's, it's happening in a time scale that is completely unprecedented. And so normally what would happen is you would have technology get adopted over, you know, five years, 10 years, 15 years. And it would sort of, there'd be a certain pace to how that adoption would happen and the, and the competitive dynamics within the market as that, as that played out. Right now, what's happening is that adoption is happening in, in, in a few quarters or a couple of years. And so. You know, more than anything, the companies that are going to benefit from that digital acceleration are going to be companies that already exist, that already have a customer base,

• 12:46Speaker 01

  that can serve their existing customers and be able to support them. And so you are having a fairly artificial acceleration of a marketplace that really has never happened before in economic history. And, you know, even if you look at the case of Shelter In Place, well, who did Shelter In Place benefit the most retail-wise? Well, Amazon.

• 13:07Alex Kantrowitz?

  Amazon.

• 13:08Speaker 01

  So you do have a situation where our existing patterns and the existing companies that are serving us, their positions are being reinforced and getting stronger, you know, every day. And again, to call it out, I mean, we benefit from that. Like, it's probably going to be harder to be a startup that's competing with us right now because our customers are going to be focused on, you know, how do we go to reliable partners that we're used to working with, that we understand and we can trust? And that's going to benefit anybody who's been able to be well timed for this market. And I do think it's a risk in terms of it does reinforce and codify, you know, some of these market positions that existed pre-pandemic. But again, you know, the counter to all of those risks

• 13:51Speaker 01

  is the fact that these companies are serving customers during an unbelievable time of crisis. And so I do think that these are, you know, kind of in many cases, critical infrastructure. And it's important that these products exist and it's important that they're able to serve their customers successfully. So I'm of two minds on this situation.

• 14:11Alex Kantrowitz?

  Right, and it could be that this tech acceleration just sort of happened faster than much of the small businesses that have been, you know, waiting to compete with them or waiting to make moves were able to adjust. And now they're struggling. It is also interesting, you know, because the pace has been so fast. It is also interesting that a company like Amazon has now become more reliable than the US Postal Service. But I guess we can, you know, save that discussion for another time. One of the things that I really am interested in is This is the thing that I've been thinking about a lot. I know everyone has, which is like, how are we having an economy that's struggling the way it is? Like, we're definitely in a recession. Our unemployment rate is 10%, and yet the stock market continues to go up. And I know in my head,

• 14:53Alex Kantrowitz?

  right, that it just represents the highest performing companies in the economy. Many of them are tech. I think the tech giants, the growth of the tech giants equals the next 50 companies on the S and P 500

• 15:04Speaker 01

  Right.

• 15:05Alex Kantrowitz?

  this year, or something like that. But how is it possible that we have such a rough economy and yet the stock market is shooting up the way it is? And we've all read explanations, but I'd love to hear it from, from your perspective, someone who runs a company who's, who's in the middle of this change.

• 15:21Speaker 01

  Yeah, I think, I think I have maybe just sort of three small buckets of, of ideas there. And this is all, all based on, you know, the, the same kind of podcasts and videos that both you're doing and that, that are out there. So, so I, I have no kind of proprietary insight, but, but I think

• 15:38Alex Kantrowitz?

  We'll hear it.

• 15:39Speaker 01

  Okay, I'll pretend it's proprietary. I think there's, I think, again, this is, I'm like a, I probably got like a, a D plus in, in microeconomics and macroeconomics in, in college. So, so I, I wouldn't like trust anything I'm saying in any, in any kind of, you know, you know, kind of

• 15:58Alex Kantrowitz?

  You don't want people to trade off.

• 15:59Speaker 01

  Don't, don't trade off what I'm about to say, because especially because I'm sure this podcast will go live and the market will collapse like 30%. And so, so nothing that I'm saying will make any sense. So, so I think you've got, I think you have a few big factors. One, you have, you have a flight from an investment standpoint into the things that, that actually can have returns. And so, so money is moving out of other, you know, from other, other places where you might invest, where there might be, you know, now really, really low interest rates and you want to move that into, into the stock market to drive better, better returns. And so you have money moving in to the market in some cases, just because it's the, it's the only place where you can actually drive returns. The

• 16:42Speaker 01

  second thing is you have, there's the fact that I think big organizations are actually holding up better than anybody anticipated. And, and mostly it's big organizations in the, in the stock market, because there's just a certain kind of scale that you have to get to before you're a public company. And so if you think about, you know, if you think about, you know, Procter and Gamble, Target.

• 17:04Speaker 01

  The large banks, you know, these organizations are actually are experiencing record revenues and profits in some cases, simply because of just the, in some cases, they offer necessary products that are staples. And so you just have to buy soap and you have to buy food. And so their businesses aren't going away. And, and the government, again, is, has at times done a good job of, of making sure that, that individuals have enough money to be able to afford those things. And so you have money getting pumped into those, into those organizations. And so because, because so much of the, of the kind of S and P or NASDAQ

• 17:44Speaker 01

  is represented by a lot of these sort of staples, organizations that are selling these staples, and we, and we continue to need them. And on a relative basis, the airlines or the car companies make up a smaller portion of the overall stock market. You, you basically don't have as much, you have a muted impact by the sectors that are most impacted relative to the sectors that are continuing to perform incredibly well. So that's kind of category number two. And then I think category three is specific to technology. And, and whether you're looking at the big, you know, four or five technology companies that, that are, you know, above a trillion dollars, or the rise of, you know, companies like Tesla, or the Nvidia's of the world, or the cloud sector, so Atlassian and Splunk and all these companies.

• 18:28Speaker 01

  I think there's just a broader recognition, which is, which is that the markets that these companies are serving are, are potentially billions of, of consumers globally. And the barriers to getting to those billions of consumers have gone down dramatically in the past five or 10 years. And so the durability of that, those investments have, has actually gone up on a relative basis because of the fact that they're all digital, they don't require in-person interaction, and the markets for these, for these organizations are just so much larger than, than ever before. And so it's, it's sort of ironic, because if you went back five or 10 or 15 years ago, And you kind of looked at like the Warren Buffett, you know, style of investing, which is, which is, you know, what's a very stable business where, you know, anybody could run the company and it's

• 19:12Speaker 01

  going to survive and it doesn't really, it's not very volatile. Well, actually, in some cases, those businesses have been the worst off in, in this environment, you know, airlines where, where you just sort of, you, you imagine that every single year, people are going to take air, air flights, you know, 1% more than last year. And it's just very stable business and you eke out profits. And, and it's actually those businesses where, where you have the, the greatest risk and, and the companies that we normally think of as being sort of very volatile to innovation and disruption, the Apples, the Facebooks, the Googles of the world, those have actually been performing the best, just because of the durability of their business models in this time. So I think those, those three factors and maybe others that, that you know of, I think, allow.

• 19:55Alex Kantrowitz?

  Yeah, I mean, yeah, yeah, go ahead.

• 19:56Speaker 01

  No, I was gonna say allow for the market to, to exceed or be disconnected from the broader economy.

• 20:03Alex Kantrowitz?

  Right. And I mean, I, I don't think you gave yourself enough credit at the beginning of that answer because I think that was like pretty comprehensive and, and spot on. It is a very, very interesting economy. If I'm hearing it right, what you're saying is that like, we're living in an economy right now, that's largely driven by tech, that seems to have a market that's working well, right? And that market will translate to people's pensions and retirement funds. And one that's just accelerating from, I mean, maybe I'm kind of over my skis a little bit on this, but accelerating from a small and medium sized business, you know, driven economy, or it wasn't really even driven. It was definitely healthier, operating to one that is now going largely into technology, largely into big, big tech companies.

• 20:45Speaker 01

  Uh, yeah, I think that, that is absolutely a big part of it. And I think, you know, it's interesting, there, there's this connection back in some way to, you know, interestingly, interestingly enough, I think actually, in, if you, if you look at like, you know, what Andrew Yang was, was pushing on and, and obviously UBI, it was interesting because what the biggest fear was, was automation was going to start to drive out all of these.

• 21:11Alex Kantrowitz?

  No one predicted a pandemic.

• 21:12Speaker 01

  Exactly. And, and, and exactly. And so now.

• 21:15Alex Kantrowitz?

  But they've had the same impact.

• 21:16Speaker 01

  Same, same exact impact. And it's almost actually, it's interesting. It's almost actually. It's almost actually a simulation of what actually does this sort of end state look like of a very technology-driven economy. And we just got to it way faster than anybody imagined. And so the result is, is actually what, you know, again, maybe, maybe we could have theorized about, but, but you can actually have a situation where some small set of companies does unbelievably well. And the companies that are in that supply chain can likely do very, very well. But then you're going to have a lot of businesses that are impacted and a lot of jobs that are impacted because of that. So by definition, then, you actually do need some form of, of support and government safety

• 21:58Speaker 01

  net because there's just, there just doesn't like, the jobs just don't exist.

• 22:03Alex Kantrowitz?

  Right. Which is what we've, we've had that with the CARES Act. And I think that what you're describing now is the Trump economy, right? And so I'm curious from your standpoint, is the Trump economy sustainable?

• 22:13Speaker 01

  Maybe you could just define Trump economy for me so I, I build on the right point of that.

• 22:20Alex Kantrowitz?

  Right. Okay. I mean, let's sum it up, right? One that's definitely driven by technology, one where the market does well, even if the rest of the economy isn't doing great. I mean, yeah, that's one that's led by a handful of companies at the top. And everybody else is just getting, you know, getting the downstream effects from that.

• 22:39Speaker 01

  Yeah, I guess I wouldn't necessarily associate Trump with that. I would say that, that is, I mean, again, we can debate for better or worse, but that, that is where the economy-

• 22:49Alex Kantrowitz?

  Well, forget the label.

• 22:50Speaker 01

  Yeah, yeah, yeah.

• 22:51Alex Kantrowitz?

  Is this economy sustainable?

• 22:52Speaker 01

  Absolutely not. This, this economy is definitely not sustainable. But again, the, the, it's hard to separate the pandemic element of this. And so what would the natural, what would today's natural economy be like if people could get out of their houses and go support businesses? And, and, and so what I guess what I was saying is like, we're simulating kind of complete automation, but this is, we're not actually simulating what people want the economy to look like. I think people want to go out to restaurants and they want to go out to small businesses and they want to, to, to be able to do a lot of these things that, that can't get automated. We just happen to be forced into that right now. So I don't think that this, I mean, there's, there's no question that this economy can, can, that you can't sustain what we're experiencing right now. At the same time, I actually don't think people want this to be the economy.

• 23:35Speaker 01

  I don't think, you know, government or businesses want this to be what the economy looks like. And I think anybody- Any of these large tech companies would probably trade, you know, some X percent of their market cap to be able to return back to a more normal environment that where people could, you know, support more businesses and you could be mobile and we could actually have a little bit more of a of normalcy. I don't think anybody's happy. I just think the the stock market happens to, um, uh, to, to, to, again, be disconnected from the the sort of lived experience of most people right now.

• 24:04Alex Kantrowitz?

  Right. Uh, and we'll see what happens when everything comes back. Uh, but I'm curious. Okay, we're a couple of months away from the November election. What do you think happens in November?

• 24:14Speaker 01

  But I, and the only thing I just, let me, let me just say one, one more thought.

• 24:17Alex Kantrowitz?

  Yeah, yeah, go for it.

• 24:18Speaker 01

  I guess, I guess the, to me, the nuance is, I don't think that I, I like, is, is basically separating the economy from the stock market. Like, what, like, like, what we've mostly just talked about right now is why the stock market is, is at all time highs.

• 24:32Alex Kantrowitz?

  Yeah, yeah. No, I want to hear about the economy at large.

• 24:34Speaker 01

  Yeah, yeah.

• 24:35Alex Kantrowitz?

  Is this economy sustainable?

• 24:37Speaker 01

  This economy is absolutely unsustainable and it is, and you have to, you have to have government stimulus, you have to have, um, you have to have higher taxes, you have to have job programs. I mean, there's a lot of stuff you'd have to do, um, uh, to, to make sure that we can support the, the broader economy.

• 24:52Alex Kantrowitz?

  Totally. And I wonder, that's, I guess what I was getting at is like, we're now seeing an economy where the middle, I mean, I firmly believe you need the middle and the bottom of the economy to be strong, can't be led

• 25:00Speaker 01

  Hundred percent.

• 25:01Alex Kantrowitz?

  entirely by the top. And I just wonder what happens when we come back, uh, from this, you know, if we come back from it.

• 25:06Speaker 01

  Right.

• 25:06Alex Kantrowitz?

  And whether or not that is going to be evenly distributed, because we've run the simulation, but now we're living in it.

• 25:11Speaker 01

  That's exactly right. And, and I think the, to me, the, the, the thing that right now is, is we should, um, you know, with the CARES Act and, and, you know, uh, uh, you know, not to get overly political, but, but if a different, um, administration, you know, enters in and, and we, um, and we end up, you know, having even more programs that can support, you know, workers, then, then actually we can start to model out, like, what, what is the sustainable way to fund this? And, you know, where do those dollars come from? Is it higher corporate taxes? Is it higher income taxes? Uh, and then you can actually get to a point where you can understand, like, what's a sustainable version of this?

• 25:46Alex Kantrowitz?

  Yeah, because right now we're just printing money and the value of the dollar is dropping, something that's not talked about very much. And it doesn't seem like that's a very good route to do it. Like, we have to create something that can last versus just increase the monetary supply. Okay, I want to ask you before we wrap up this segment on politics, uh, what do you think happens in November?

• 26:04Speaker 01

  Well, I was wrong last time, so I don't have a great read on these things. What I would just say is that I think we need to, we need to return to a better model of governance in the country. We need to return to a better model of supporting, you know, all, all classes of citizens. And we need to return to a model where, where, you know, we get out of campaign mode all the time and, and we focus on, you know, building up the country and, you know, for again, all, all of the people in the country. And so, so that's what I'm hoping for.

• 26:42Alex Kantrowitz?

  Okay. You sound like a Biden voter.

• 26:45Speaker 01

  That might be the case. Yeah.

• 26:48Alex Kantrowitz?

  And yeah, I'd wonder if there, if Biden does win, whether there's going to be a peaceful, no, actually, I was going to wrap up, but I want to ask you this. All the stuff about the mail-in voting and voter fraud and like Trump obviously trying to sort of discredit the, the results of the election before a single vote is cast. What does that do from a business standpoint? Does that create some turbulence that makes your job more difficult to do?

• 27:11Speaker 01

  I, I, I think, um, uh, right now that hasn't, uh, that has not seemed to have seeped into the business, uh, kind of community or the business context, um, uh, thus far. I mean, obviously if in November, we have a protracted, um, battle for, for, you know, who's, who's in charge of the government, that could be very disruptive, um, uh, you know, in terms of world trade and, um, and overall, you know, kind of how, how the, um, you know, how businesses sort of think about what, what's the, you know, what direction is the country going in. But right now that has not been a, a sort of corporate issue. It's obviously an issue of, of, you know, personal concern. Um, but, um, but it hasn't, hasn't gone farther than that.

• 27:53Alex Kantrowitz?

  Okay. When we come back with Aaron Levy, CEO of Box, we're going to talk a little bit more about what it's like competing in a world that the tech giants dominate. And we're also going to read some of his tweets and have him react. So hope you stay tuned and we'll be, we'll be 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.

• 28:37Alex Kantrowitz?

  Your data, your cloud, and the agents acting on your behalf. It's how more than 28,000 organizations deploy AI with confidence. So innovation scales without scaling risk. Avpoint, the unifying trust layer for AI. Head to avpoint.com to see how enterprises deploy AI with confidence. Learn more at avpt.co/bigtechnologypodcast. That's avpt.co/bigtechnologypodcast. Okay, and we're back here with Box CEO Aaron Levie, a man who is so well-known, so well-liked, I think, in the tech industry.

• 29:17Speaker 01

  Oh, God.

• 29:17Alex Kantrowitz?

  That we don't need to spend an hour going through his credentials, although you could certainly look him up. He runs a great enterprise technology company and has this amazing view into the economy, which we've been talking about. And, you know, one of the other things that he does is, you know, he's living in a world where he's competing with the tech giants, Apple, Amazon, Facebook, Google, and Microsoft, which dominate the tech economy. And anyone has to, you know, reckon with when they're working today. So, Aaron, have the tech giants, are they sort of like a frenemy for you? Have they been more helpful, more hurtful? What's your relationship been like with them? And do you want to be competing in an economy that they control the way that they do?

• 29:57Speaker 01

  Yeah, well, this is a lot to unpack there. What I would say is that I prefer the term "co-opetition." So, you know, we are in an environment where you simultaneously have to cooperate and partner with many of these large-scale technology companies, as well as you're going to compete in particular categories against them, you know, for customer demand. And, you know, we...

• 30:24Speaker 01

  You know, we have a unique perspective because we're enterprise focused. And so some of the things that play out in in the outside world that are more pertinent to consumer companies, we don't face directly.

• 30:36Alex Kantrowitz?

  Yeah, you're not worried about getting booted off the App Store?

• 30:39Speaker 01

  For, you know, for the most part, we, we hear to all the policies and we have a very, a very pleasant experience and partnership on that front. So, so I think, you know, for us, what we care deeply about is, I think the number one, the number one angle we have is, we are very, very focused on a future state where customers have choice around the products that they use and the, the ability to move their data between different products and the ability to have some degree of interoperability between services that just fundamentally need to connect to one another that come from different technology providers. And so, and so that, that's our, our sort of stance on this.

• 31:20Speaker 01

  I actually think it's very healthy to have a very competitive marketplace, which includes incumbents that can launch competitive products. I think it forces startups to, to be at their best. It forces companies to have to continue to innovate and better serve customers. So, so I think, you know, by and large, I actually think that, that the environment that we're in is a healthy one in terms of, of startups are constantly trying to find the angles that the incumbent isn't going to be able to, to go and solve for. The incumbent has the ability to try and catch up to better serve their customers. And you, and you continue to have this sort of back and forth that, that drives more innovation, drives better customer value over time. And so, so I think that's, to me, the, the, the high level view of the market.

• 32:04Speaker 01

  You do have specific circumstances or situations where clearly the government probably needs to have some degree of, of consideration for. What I would, what I was, what I struggle with right now is that I haven't yet seen Any really great or logical proposals of what that would look like. And so we have a lot of, of, of sort of conversation and noise around the idea of big tech and you have to regulate big tech. But we don't have a lot of more precise solutions that, that, that really can be practical to adhere to and that would, would not over engineer the, the, the, the regulation to the point where you hobble an incumbent or even maybe worse in some cases where you

• 32:43Alex Kantrowitz?

  Yeah, the government could just go ahead. I mean, the government could just level the economy with some poorly thought out regulations.

• 32:49Speaker 01

  Well, that's exactly right. Like you, you could take the, you could take the thing that, that Ameri- that is probably the, the, our greatest long-term competitiveness in America, which is our innovation economy. And you could decimate the ability to, to actually get to a real scale on a global basis. And that would work against us as a country vastly more than, than for us. And so, so this is a very difficult and tricky situation because, because you have, you know, you have a dimension of, in the U S, you want companies to be able to be very competitive with one another and make sure consumers have choice and make sure that startups can emerge. On a global basis, you want to make sure that you're not hobbling, you know, your, your, your economy and, and effectively, you know, handicapping the, the, the success of these, these firms.

• 33:34Speaker 01

  And so I think you've got, there's a lot of considerations and, and this is why I think the government has to tread very carefully on these topics.

• 33:41Alex Kantrowitz?

  It's a different perspective that you offer than one you typically hear about these companies talking about how smaller companies find the gaps and push, push forward and innovate and that pushes the tech giants and the tech giants pushes them. Mostly what we hear in public is that the tech giants will squash smaller competitors. And as soon as they find a business there, they're going to go in and grab it. So why do you think the way you do while it seems like the conventional wisdom thinks the other way?

• 34:07Speaker 01

  I think, and again, this is not to say that I'm anti-regulation because actually I think there are very particular problems, but I think you have to work backwards from what is the real problem we're trying to solve and then, and then what is the right type of regulation to solve that problem. So that, that aside for one second, we're happy to loop back of like what that could look like. I think the reality is, is that, is that I'm not quite sure, in, in some of the proposals that we've seen around breaking up big tech or you can't do acquisitions of a certain scale, the part that I don't quite understand is how we're imagining that, that we want these companies to be able to, to continue to sustain their operations. I mean, is the idea that Facebook basically can't own Instagram or can't buy WhatsApp and then thus, and you, you basically can just guarantee their

• 34:51Speaker 01

  disruption over time. Like if you can't, if you can't match the functionality of, of your disruptive competitor, that could, you know, quite literally spell the fact that your business is, is not going to exist in the future. That's how disruption works. And so I just don't know how, how the government is sort of anticipating simultaneously letting these companies continue to thrive and succeed over time and, and build great products that consumers like, while also at the same time making sure that they, that they can never get into, you know, particular categories.

• 35:19Alex Kantrowitz?

  You mean, you could also, you could also invent internally versus acquire externally.

• 35:24Speaker 01

  You could, but it's, in some cases it's

• 35:26Alex Kantrowitz?

  It's harder.

• 35:27Speaker 01

  Well, actually, I'm, you absolutely can do that, but, but the, in some cases, I'm not clear that that is, is good for either consumers or the economy either. If you think about what, what it would mean for big tech to not be able to make acquisitions, I'm not positive that, that you'd get the same level of venture capital or the same, the same volume of startups entering this.

• 35:48Alex Kantrowitz?

  Yeah, cuts off the exit path.

• 35:49Speaker 01

  Like, I guess now you have to basically believe that, that every category that a startup enters is going to be able to be a sustained, long-term, independent company. And that's not the case for all innovation. You know, sometimes you're, you're really just experimenting because you know that maybe at the end of it, you, you do have a path to get acquired by Facebook or Google or Apple. And so I think if you, if you basically cut that off, you have a huge risk, which is, which is, are we going to be able to sustain the, the same volume of innovation and startups? And so, so I, this is, this is why this is a, a, a topic I, I personally struggle with because as an entrepreneur, you know, you definitely always get really, really upset whenever a bigger company copies one of your features. Conversely, actually, as an entrepreneur, I, you know,

• 36:35Speaker 01

  You know, would hope that one day if Box was ever considered so large that like, you know, we had antitrust concerns that I would still be able to have a path where we could, we could make sure that we don't get disrupted and that we could continue to build a viable company that can serve our customers. And you don't want the government to basically effectively mandate that a company can't remain competitive. And

• 36:57Alex Kantrowitz?

  Right. But what about, what about the other way around also? I mean, your market cap is in the two and a half billion range. Cloud is a place where the tech giants are all fighting it out. Microsoft, Apple, Google is in there. Amazon, like, could you ever see Box joining forces with one of those companies and with something like the current, you know, antitrust, anti-tech giant feelings right now sort of cut that path off?

• 37:22Speaker 01

  Um, well,

• 37:23Alex Kantrowitz?

  You'd probably get a premium on your shares if one of those guys came knocking.

• 37:27Speaker 01

  Well, I probably can't use this podcast to, to describe future, you know, kind of business outcomes of that sort. But what I would say is that, you know, Box aside, I do think that it becomes very, very hard for some of these larger technology companies to, to enter categories where, you know, even they have customers that are saying, hey, we really need you to support us in this particular space. And that company is looking out at the market and, and they might have this really difficult choice of, of are they even able to buy something? Or, and then conversely, if they go and compete with one of the independent companies in the market, is it going to be considered, oh, well, now you're just building a copycat feature?

• 38:06Alex Kantrowitz?

  Yeah.

• 38:07Speaker 01

  And so you kind of, you almost impair the, the sort of ability for the natural competitive forces to play out in the industry. And it was interesting because, because I, you know, the, I think there's a lot of problems with Facebook, to be clear, especially in the state of social media and online harassment, the, you know, how Trump uses these platforms. So, so I am not a, I'm definitely not a Facebook apologist. However, it was interesting in the, in the congressional hearings, you know, they read out some of, of the either emails or text messages from, from, you know, talking about the Instagram acquisition and sort of there's this innuendo, which is that we're either going to have to compete with you or buy you. And the government sort of saw that as a threat. Of like it's extortion, which is like you either sell us this product or or or we have to go compete with you.

• 38:52Speaker 01

  And and the interesting thing, though, is is that, you know, despite what Zuck texted, you know, Sistrom, the reality was that that is actually his only option, right? He either if if photos are leaving the Facebook platform and he needs to make sure that they are a great photo sharing tool, they're going to have to be competitive. And and all he was kind of giving Kevin the choice of is that like, we're going to have to compete. And that has certain, you know, implications for your business. You should know about those. Or we're happy to try and figure out how to strike a deal. And again, you could read that as as extortion of of having to acquire a business. But I don't really know any other practical way for that conversation to play out. Because the only alternative is that he doesn't say that to Kevin. They launch an Instagram competitor, Kevin then thinks that, okay, well, you just copied me.

• 39:35Speaker 01

  And and like, that's like, that's just also, you know, it's not clear how that one is supposed to end up. So so I think I I just think that that, you know, some of these things, they end up, you know, feeling like like, okay, we've got to go chase the the most aggressive solution possible. But it's really, really important that you think through what are the possible implications downstream? If you over rotate toward regulation in some of these categories. And I don't think that that anybody would say what we want the technology industry to look like is the airline industry or or the, you know, the three or four big telecom giants that we have in the country. And that's that is the risk of over regulation as you get to that point. And so I think we have to balance, you know, the the very particular points of regulation that matter.

• 40:17Speaker 01

  So when customers have their data in these platforms, do they have the ability to get the data out of these platforms? Is their privacy able to be controlled in a way that keeps them safe and protected? Are they able to, you know, have very kind of clear choice when when they don't want to use one of the defaulted products of one of these vendors that that kind of comes for free in one of their offerings? Like, you have to be like, that's sort of the the type of regulation we should be looking at, not generic sort of banning M and A or breaking up some of these technology companies.

• 40:48Alex Kantrowitz?

  Yeah, no, it's a it's a fascinating perspective. Okay, we're gonna read your tweets when we come back from the break. And then we're going to talk a little bit about the future of work. So thanks, everyone, for listening up until this point. Stay with us, we'll be right back.

• 41:00Speaker 02

  Now, more than ever, we need someone on our side. But Rob Whitman? Whitman's votes drove up costs, cut Medicaid, and risked 350,000 Virginians' health care to pay for tax breaks for himself and his donors. He's not on our side. Shannon Taylor will fight corruption, cut taxes, and bring down costs. This November, vote for Shannon Taylor. She's for us. Paid for by HMP, the HouseMajorityPac.com. Not authorized by any candidate or candidates committee.

• 41:30Alex Kantrowitz?

  And we're back here with Box CEO Aaron Levie. And Aaron, it's time to read some of your tweets. It's what I do all day long, read your tweets and try to think, hey, what's he saying here? Because I feel like you have no problem calling bullshit on the tech industry and probably its critics. So I picked out a few that I thought we could just read out quickly and maybe you can answer with your expanded.

• 41:53Speaker 01

  This could be very dangerous, by the way. I have no idea where this is going.

• 41:55Alex Kantrowitz?

  Oh, that's why I decided to do it. I'll give you a minute each to respond on each one of these. Okay, so the first one. "The conventional wisdom on Apple for the past decade is that they needed to enter a completely new market to grow. As the world's first $2 trillion company, it turns out continuing to build better and better products and services works just fine."

• 42:15Speaker 01

  No, I mean, this one is, you know, if you remember the past kind of 10 years or so, there was always this commentary of, you know, Apple has to get into cars. They have to buy Tesla. They have to buy Disney. They have to buy Time Warner. These are the only ways that they're going to be able to continue to grow. And I think what Apple has proven out is actually like continue to build amazing products, build ecosystems around those products, whether those are in payments or media or, you know, new just underlying features in the OS. And they've been able to prove out that there's a very, very large scale, in fact, the largest company in the world, viable business model in just continuing to hone, continue to optimize, build around adjacencies without having to do with a lot of analysts were thinking they had to do, which is you have to enter $100 billion

• 42:59Speaker 01

  market categories if you're going to want to continue to scale and survive.

• 43:03Alex Kantrowitz?

  Yeah, and we'll see what happens with that market cap, but it is, it's impressive and definitely has proven me wrong, at least in the short term. Okay, so the teens on TikTok have no idea that they found themselves smack in the middle of a multi-decade-long battle for the future of database architectures.

• 43:23Alex Kantrowitz?

  I love this.

• 43:24Speaker 01

  Well, this one was very esoteric, so I probably shouldn't have even gotten this one out there, but.

• 43:30Alex Kantrowitz?

  No, this is great. It just gave me good fodder for the podcast.

• 43:32Speaker 01

  Oh, great.

• 43:33Alex Kantrowitz?

  So, yeah, go ahead.

• 43:33Speaker 01

  Okay, well, this is when it was rumored that Oracle was also looking at TikTok and there's, it's just a, again, a little bit of an esoteric point of Oracle and Microsoft for about 25-plus years, actually probably longer, maybe 30 years, have been battling in the database world and in infrastructure in general. And so, it's interesting at this point. I mean, it's beyond interesting. It's actually just like absurd that the two primary bidders of TikTok, at least, you know, that are in the news are enterprise software companies by and large. And so that's just a very confusing mashup to me.

• 44:13Alex Kantrowitz?

  Yeah. Have you guys looked into buying TikTok?

• 44:14Speaker 01

  Absolutely. So, and then we ended, we ended looking at it about three seconds later.

• 44:22Alex Kantrowitz?

  Okay, all right. This is a scoop, by the way. Fox is considered. All right. We'll make sure to make it the headline. Okay, here we go. You know the pandemic is deeply affecting you when you drive by a golf course and think, maybe that could be fun.

• 44:35Speaker 01

  Well, I don't want to offend any golfers, but I've.

• 44:39Alex Kantrowitz?

  I've tweeted out.

• 44:40Speaker 01

  I've generally, I've generally felt that's about the most boring sport on the planet. And, and so somehow last week I was just driving around and, and actually was like, wow, like, imagine being outside for a couple hours and just like hitting a ball. That sounds actually kind of enjoyable. And then, and then that was a very fleeting thought, much like the TikTok acquisition, and I moved on with my life.

• 45:04Alex Kantrowitz?

  Okay, so we'll have Box CEO considers buying TikTok also. And this was about Facebook Reels. You have to hand it to Facebook. They sure do know how to compete when it matters most.

• 45:19Speaker 01

  Yeah, I think, and this kind of goes back to the prior point, which is, which is, you know, Facebook, Facebook is a company where, you know, it's interesting, in the tech industry, for decades now, we have always talked about this idea of the innovator's dilemma. And the innovator's dilemma is really simple, which is, as you get bigger as a company, you, you begin to sort of lose, you begin to overbuild your product and, and over-serve your customers, which means that then some other competitor can come in and do something different, or new, or fresh, and then go and disrupt you. And, and it's interesting, because for now decades, we've talked about the idea of like, why is it that these incumbents continue to fail at the innovator's dilemma? Like, it's an obvious problem, it's a known

• 46:04Speaker 01

  thing, like, why does Blockbuster get disrupted by Netflix? Why does Walmart get disrupted by Amazon? And so you're finally seeing a crop of technology companies, between Google, Facebook, Amazon, and others, that actually have this idea built into the DNA of the organization. And they, they do not want to lose their position. And they know exactly how to lose their position, because they themselves got into their leading position because they were disrupted. And so, somebody like Zuck doesn't want to let that happen to Facebook. And so it's, when they, when they really understand that there's an existential threat to their product, or a major market opportunity that they have to respond to, i.e. the banning of TikTok as an example, they move very quickly and very swiftly. And I think as an entrepreneur, you kind of look at that, and you have a lot of respect for, for the organization's

• 46:49Speaker 01

  ability to respond to those moments, and, and then be able to remain successful and very competitive.

• 46:55Alex Kantrowitz?

  Totally. Facebook's longevity is like, one of the most befuddling things to me as a reporter covering the tech giants, because they are in the most fickle of all industries, which is social media. Like, you look a couple of years ago, TikTok was the big thing, not TikTok, HQ trivia, right? Everyone was saying HQ trivia is the future of everything, and now it's gone, and happened in a blink of an eye. Okay, one last tweet, and then we're gonna have like, a minute for, for future of work, but I'm excited to ask a question about that. Okay, here it is. "I have yet to run into a business strategy problem that can't be solved by a pyramid shape or a flywheel."

• 47:28Speaker 01

  I mean, this one is, uh, uh, these are, I just, I just want to apologize on behalf of all listeners about the tweet, about which tweets you've chosen. Um, so, uh,

• 47:38Alex Kantrowitz?

  This is a, yeah, it's a fun selection.

• 47:40Speaker 01

  I, I just happened to be, um, uh, leaving an, uh, a Zoom, uh, corporate strategy review call and, um, where basically the solution to the, the strategy was, uh, we, we just drew out a pyramid and, um, and then that, that kind of clarified our business problem to everybody on the call. Um, and so, and then, and then since then, um, I found myself putting everything into a pyramid shape strategically, and it's actually, uh, solved so many of our internal problems is amazing.

• 48:08Alex Kantrowitz?

  This is great. Okay. So things, all the problems at, at Boxer are on their way to being tough. Not like there are many, but, uh, once you deploy the pyramid strategy, I think you're

• 48:17Speaker 01

  All you need is, all you need is a pyramid.

• 48:19Alex Kantrowitz?

  All you need is a pyramid or a flywheel.

• 48:21Speaker 01

  Or a flywheel.

• 48:21Alex Kantrowitz?

  But the best part is they can put the flywheel diagram into a pyramid and then you're really cooking with grease.

• 48:26Speaker 01

  Actually, if you have pyramids that, that are components of the flywheel, that's even better. I would actually recommend that one.

• 48:32Alex Kantrowitz?

  Mm hmm. Yeah. Okay. We have like two minutes left. I feel bad. I've left like the future of work stuff for the end. But I'm just going to ask you, I think, what the most important question is, which is you're a pretty hands-on CEO. I know you like to walk around the office and spend time with your employees. Now that you're so distant from everyone, how can you, um, you know, keep your leadership style, uh, in play? And, and how do you keep morale up in the company?

• 48:56Speaker 01

  Yeah, I think, um, you know, moving to completely virtual and remote has, has been a huge adjustment for, for so many of our, our, our employees and, and me especially, because I do like to kind of walk around and get a sense of, of what's going on in the organization, how people are doing, what they're working on, all of that. So you've had to move that to virtual and obviously you can't fully, you know, kind of replicate a lot of that, that type of interaction style. I think the, the, the part that I've, um, I found to be compelling about virtual and remote is the fact that you can actually bring together disparate parts of the business in a much more seamless and interactive way. And so, and so for the, while there have been trade offs of the ability to get everybody together in person, we've been able to actually be able to pull together people from across the business that otherwise would not have come together.

• 49:41Speaker 01

  And so we've got many teams and many projects internally where you have things like 100 people in a Slack channel all working on a project that normally you would have maybe only had five or 10 people on that project and they'd be stuck in a conference room. It would be the exact same five or 10 people looking at the exact same problem from the same angle. And now you've all of a sudden blown that out and more people can participate and begin to work on that, that initiative. And so there's a lot of things about going virtual, not necessarily remote, but virtual, that I think are actually beneficial to collaboration and productivity and innovation. It would be great if you could experience this out of, out of, you know, more voluntarily as opposed to out of a pandemic.

• 50:22Speaker 01

  But it has been meaningful in terms of how we work and how we operate at Box.

• 50:27Alex Kantrowitz?

  Aaron Levie, thank you so much for joining us today. This was a great conversation. Really appreciate you coming on the podcast. I know it's a risk. It's like the beginning of this podcast and it's just great speaking with you and I hope you'll come back again.

• 50:39Speaker 01

  Thanks, Alex.

• 50:40Alex Kantrowitz?

  Thanks, everybody, for listening. Please rate the podcast if you can and subscribe to it, share it with a friend, and we will see you next week. Thank you.

• 50:59Speaker 02

  Now, more than ever, we need someone on our side. But Rob Whitman? Whitman's votes drove up costs, cut Medicaid, and risked 350,000 Virginians' healthcare to pay for tax breaks for himself and his donors. He's not on our side. Shannon Taylor will fight corruption, cut taxes, and bring down costs. This November, vote for Shannon Taylor. She's for us. Paid for by HMP, the House Majority PAC dot com. Not authorized by any candidate or candidate's committee.

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  In this life, you can't win.

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• 51:42Alex Kantrowitz?

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