Pod Insights Equity Podcast That's capitalism, baby! About this episode Here's what we got into today:
Deals of the Week: Layoffs at Cameo, where fintech valuations are today and where they are going, and Egnyte's slow-burn path to an IPO.
The end of VanMoof: Raising a lot of money doesn't necessitate a startup's success. Such is the case with VanMoof, which raised nine-figures and built and sold e-bikes. Now it is no more, and we have questions.
CEO turnover: As the CEO of OnlyFans steps down, the gang dug into when a CEO can or should step down. Certainly some companies do best, for example, with long-term leadership by a founder. But not all.
Generative AI and the writer's strike: It turns out that we're bigger South Park fans than we knew as a group, but that's not really the point. What matters is that a recently released 'AI-generated' episode of the show is driving a conversation today concerning how critical — or not — humans are to the creative process. Google is also busy here.
And that's the end of the week! Equity is back on Monday! Chat soon!
For episode transcripts and more, head to Equity’s Simplecast website.
Equity drops at 7 a.m. PT every Monday, Wednesday and Friday, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts. TechCrunch also has a great show on crypto, a show that interviews foundersand more!
Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products.
Learn more about your ad choices. Visit megaphone.fm/adchoices
Transcript 0:10 Speaker 00 Hello and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and the nuance behind the headlines. My name is Alex and I am joined today by my friends. I have senior tech reporter on the fintech beat. It's Mary Ann Azaveto. Hi, Mary Ann. I hear you are in the state of North Carolina, which apparently has a great number of excellent state animals.
0:29 Speaker 01 It does. And yes, yes, I am enjoying a little bit cooler weather than Texas while I'm here.
0:34 Speaker 00 That's good. The second place that's cooler than Texas is literally the surface of the sun. But we're not all stuck in the South. Some of us are in the Northeast. We also have on the show today Rebecca Scootek, senior tech reporter on venture capital and co-host of our sister podcast Found. Becca, hi, how are you?
0:48 Speaker 02 I am good. Got to say it's pretty hot up here as well.
0:52 Speaker 00 I know. Pretty much everywhere in the world, 1,000 degrees right now, and I'm miserable. It's, it's too much. I like warm much better than like, you know, winter, but I don't like to sweat before breakfast. It's too much.
1:03 Speaker 02 Yeah. The humidity not dropping below 50% for like two weeks here, and we're not even in a heat wave technically yet is like a little concerning.
1:11 Speaker 00 Yeah.
1:11 Speaker 02 One could say.
1:11 Speaker 00 Everyone in Arizona is like, it's a dry heat. I'm like, not anymore. Welcome to hell, everybody. All right. Climate change aside, we have a great show for you today. We are going to talk about Cameo layoffs, dropping fintech valuations and ignites growth. Then we have Van Moof going Van Poof, which I swear will make sense when we get there. Then CEOs stepping down and AI's impact on writers. It's going to be an absolutely packed show, but we are going to begin with Cameo. And Becca, what's going on over at the fine social media celebrity thing?
1:40 Speaker 02 So Cameo, for those who don't remember or don't know, is the startup where you can pay to have a celebrity, a someone who voices a fictional character or something of that matter, record a greeting for you. And they vary in price and they did really well during the pandemic. They picked up a lot when people were sort of trapped at home. Sort of a fun thing. People were buying for each other. But the latest news from Cameo is that it intends to lay off 80 employees, which will leave the company with less than 50 employees, which is a major shift from the fact that they had about 400 people working at the peak. They were valued at more than $1 billion in 2021. So definitely a bit of a cut there.
2:22 Speaker 02 But quite frankly, I can't believe this company would have been worth $1 billion to begin with. Sorry. I know. I know. It's crazy to think that people were willing to spend hundreds of dollars for some celebrity to, to send someone, say, a greeting for their birthday. It's just like, really? I can think of so many better uses of your money.
2:44 Speaker 00 What? Really? The way that I see this is VIP tickets to concerts. Most bands that I track, which is in the smaller heavy metal genres, so not bands that are selling out arenas and stadiums, you know, they'll often sell VIP tickets, which is kind of like general admission, but you just go early and then you get to like, take a picture with the band, say hi. People fricking love that stuff. It's access essentially, and it's great. And it gets more money to the bands who are on tours. They can pay for gas and stuff. And to me, Cameo is just the digital equivalent of that. So people are already paying for that, you know, week in, week out at the venue. Why not also digitally? My question is not why is there demand or not, but why do they need 400 people? That's a lot of folks.
3:22 Speaker 02 Yeah.
3:23 Speaker 00 For a video app.
3:24 Speaker 02 Yes, which is probably why they're laying off multiple times, especially because it's a marketplace. Cause I know that from the one cameo that I've ever heard was my cousin got married last year and, and route to her bachelorette party and our friend of ours paid for a Kermit the Frog cameo for her to say congratulations. And they, she was like, I'm not paying that much for this. So she paid for one of a lower, lower dollar amount, Kermit the Frog cameos and you could tell. And it was probably one of the funniest things I've ever heard. My cousin cried. She thought it was great, but I was just like, it's a marketplace. Like, how many people do you need to manage that? People say they're going to do these things and then their backend
4:09 Speaker 02 manages them and people go on and buy. So the thought that it would need that many staffers is just, I just don't understand how.
4:16 Speaker 00 You, you do have to have a staff to handle high profile vendors, which are celebrities or bands, right? Because those people need a higher touch setup on the product side. I, I understand that, but the whole point of tech I thought was to do more with less. So you would think that a company that is this, I'm not gonna say cut and dried per se, but, but it's simple-ish, you know, it just seemed like too many people. So more layoffs there, not a huge shock. I think though, that its valuation may have made some sense. Pretty high volume, reasonable cuts. People are paying a couple hundred bucks. You know, I can see it.
4:47 Speaker 01 I mean, to be clear, I think the concept is cool. I just think, because I looked on there, considering getting a gift for someone, I was just surprised at just how expensive it was. I think if the prices were a little bit more accessible, a little bit more affordable, then they would probably see more demand.
5:02 Speaker 00 Yeah, agreed. My friend Drew has bought me one or two cameos for different major events, and it's definitely fun, like different football players and such. Lovely, cool. I hope it survives. People like it. I just don't know how you have a company that had 130 employees and now is 50, down from 400, and you maintain anything like corporate culture, but Godspeed cameo.
5:21 Speaker 01 Just ask Twitter.
5:22 Speaker 00 Well, I hear everything's going great at Twitter.
5:25 Speaker 01 Oh, yeah.
5:25 Speaker 00 Clearly. So I've never seen a more workable version of TweetDeck in my life. It's just bug-free. All right, you guys, the pair of you, wrote a story recently about fintech valuations, taking a look at them through the lens of secondary markets. This is one of my favorite things to do. And so I'm curious, what did you find when you looked under the carpet where all the bodies were hidden?
5:44 Speaker 01 Well, the findings were not shocking. Fintech valuations have dropped significantly since January of 2022, and we talked to notice.co Tyson Hendrickson in particular, who started this company. They've got this, this cool tool. It's a pricing tool based on secondary share activity. But I was, I was surprised even though by just how much fintech valuations have dropped in the past year and a half or so. For example, Stripe, which I did not realize, according to his data, their data, was valued at close to $200 billion based on secondary share activity in January 2022. Fast forward to very recently, and it was closer to $50 billion.
6:28 Speaker 00 Woo, that's brutal. That's a 75% reduction?
6:32 Speaker 01 Right.
6:33 Speaker 00 Wow.
6:34 Speaker 02 Yeah, no, I think, Marion, you bring up a really good point here, too, that this data allows us to see, like, we, of course, can point to past primary funding rounds for companies like Stripe, but when you go into the secondary data, and someone I spoke with that we put in the piece, Greg Martin, his whole thing is that secondary deal activity, secondary pricing, is the only accurate pricing for how much a company is willing to pay. We all thought the last valuation for Stripe was 95 billion, but no, investors were really willing to pay up to 200 billion. So like us on the outside, like we didn't actually have a clear view of like what we're valuing that company at because it doesn't matter if you can get a group of 10 investors to agree on a price. If you're getting day in and day out, secondary buyers bidding it up and up and up, like that's really what it's worth at the
7:19 Speaker 02 end of the day.
7:20 Speaker 01 And that's why so many Stripe employees are frustrated that the company did not go public last year.
7:26 Speaker 00 Or the year before. I'll just throw that in there. 2021 was like the best year for tech IBS since I was born.
7:32 Speaker 01 Right.
7:32 Speaker 00 Yeah, brutal. I will say though, there were a couple of companies on the list who had positive share price changes. Who were they?
7:38 Speaker 01 They were all in the same space. So that's interesting. Rippling, is it Gusto or Gusto? We always have this conversation, Alex.
7:46 Speaker 00 I'm pretty sure it's Gusto, although Gusto is definitely a much better name. They should have called it Gusto.
7:52 Speaker 01 Okay, Gusto and Deal. And they're all three in this kind of this HR slash payroll slash fintech category. And they are the only three in this list that we got compiled that actually saw their value, secondary share valuations go up. They actually all saw increases.
8:10 Speaker 02 Yeah, Deal is really interesting because I'm like dying to see what happens with that company because I just feel like I've never heard someone say a negative thing about Deal.
8:20 Speaker 01 What? Did you not see my story last week?
8:22 Speaker 02 Not like that. Like people in the industry like seem like they're like obsessed with it. And then you talk to buyers, like this secondary buyer and other secondary buyers I've spoken to in the past, and they're all like, name one company you keep your eye on. And they're all like, Deal. It just keeps going up. It just keeps doing better and better. And like, we can't point to like a specific reason why. It's not like, oh, they made this huge announcement, this new product partnership. That's why everyone's interested in it. They're like, people are just continuously interested in it. And they themselves, these secondary buyers were like, we don't know why. So it's like, I'm like, very interested to see what happens with Deal because it seems like just the financial side's interesting. They also just started running a ton of ads on the New York City subways.
9:03 Speaker 01 I mean, Deal's seen some revenue growth and maybe That's part of the reason, you know, that so many people are interested in it. But yeah, it has had its share of negative headlines this year. Last week, I think it was, or I don't know, a couple of weeks ago, someone in California has called for an investigation into their hiring practices in terms of saying that they were hiring people as contractors when they should have been hired as full-time employees. So there's some controversy there. We don't really know the whole story, but there is, there is some controversy there. But yeah, agreed. I mean, it has, it's kind of like the, one of those buzzy companies, right? It's lots of buzz around it. But I do think it's notable though, that those three were the only three that saw their valuations go up while everyone else saw them go down.
9:46 Speaker 00 Yeah, I'm not that surprised, just given how big they've become. I wrote a story a couple of weeks or months back, I forget which one it was, about how when the IPO window opens, you know, keep an eye on these HR tech giants. And I, I put Rippling Gusto and Deal Remote and some other people into that kind of bucket, if you will, and they're, they're all just huge. They're doing hundreds of millions of dollars in revenue. And so when they do eventually debut, I, I think they're going to be okay, if not pretty good. And that's just not the case for a lot of these companies I think we're thinking about in the broader fintech space. We have to move on though. I want to talk about a company called Ignite. Although Becca, I just want to say, how, how did you pronounce it before the show? Cause it was excellent.
10:21 Speaker 01 Ignit.
10:22 Speaker 00 Ignit. It's not, it's not ignorant.
10:25 Speaker 01 Which sounds like a little bug you'd like find in your apartment. That's like harmless.
10:29 Speaker 02 I love ignorant so much. I love it.
10:32 Speaker 00 Isn't an e grit a bird?
10:33 Speaker 01 Sounds right.
10:34 Speaker 00 Anyways, Ignite, it's spelled E G N Y T E. So, you know, some startups like to have names that are spelled in adventurous ways. Read about this company with Ron this week. I have tracked Ignite since it was kind of a, I don't know, series A, series B company way back in the day, just crossed the $200 million ARR mark this year, growing about 25%. And it's an interesting company to talk about in this moment because we're watching a lot of the highest flying companies really struggle to defend prior valuations, to find liquidity and so forth. Ignite was always a quieter company, a little bit more focused on profitability and cash flow generation and kind of growing. And it's done well. And when it does eventually go public, I, you know, I think it's going to crush its last private valuation of around a half billion.
11:19 Speaker 00 And so it's fun to kind of catch up with the company, hear about its growth and add another company to the list of firms that we think are going to be, you know, just fine, no matter what happens to the overall economy. And Mary Ann, you talked to the CEO of Vinit Jane a couple of years ago.
11:33 Speaker 01 I did. I spoke with him January 2020 while we were at Crunchbase News and I really was impressed with his attitude, right? He was like so different from all these other startup CEO and founders that I talked to that were just obsessed with becoming a unicorn. He didn't care. He was like, I'm not interested in becoming a unicorn. I want us to become profitable. I want to go public one day. So I'm not surprised that the company has not raised more money since, what was, did you say 2018?
12:00 Speaker 00 I think 18, yeah.
12:01 Speaker 01 Yeah, I love that they're just like quietly building and growing and not just pounding their chests, trying to get, you know, attention. And he even told me then that their goal was to be profitable and he said, I think unicorn culture is dead. It's time for stallions.
12:15 Speaker 00 We gotta stop with the horse-based references.
12:18 Speaker 01 No.
12:19 Speaker 00 As a non-horse person, I don't.
12:21 Speaker 01 I know. I agree. It's a little cheesy, but you know, I did kind of love that whole, I think unicorn culture is dead. Because January 2020, that was a time where like everybody wanted to become a unicorn, right?
12:32 Speaker 00 And then ironically, late 2020 and all 2021, they all did.
12:36 Speaker 01 But are they still?
12:37 Speaker 00 Well, that's actually a debate we could have. I think we all kind of agree the answer is mostly no, I think. Is that fair? But looking at the winners from FinTech, looking at this company in the enterprise software space, there is a lot of strength out there. And eventually Becca and I will have a deluge of S1s to look through and may that day come as soon as humanly possible. Now, that's kind of a positive way to start the show. We're going to flip the script right after the break and talk about a bike that no longer goes.
13:07 Speaker 00 Becca, do you cycle like outside or just are you a Peloton inside warrior?
13:12 Speaker 01 I do have a bike and I do city bike if it doesn't make sense for me to bring my bike the whole way. I've never ridden this bike. I got it three months ago. I have not ridden it yet. I bought a very nice fancy helmet and a lock, but I have yet to ride it.
13:24 Speaker 00 You don't have to confess all of your sins on the show. You can, you can't just not share them. But for people who don't know, just because I think it matters, what is a city bike?
13:32 Speaker 02 Oh, a city bike, there's versions of these in a lot of different cities and urban areas. You just pay by, some do by the miles, some do by time, some do by both. So you take it out of a dock, you bike it over to a different dock and you leave it there. And they charge you for your time or your distance.
13:47 Speaker 00 Yeah, it's a really cool model. I'm absolutely here for it. I hope more cities do it. I ask all that because VanMoof, a company that I had heard of but never paid attention to, was, I suppose, now an e-bike startup based out of Holland, the Netherlands, and raised a lot of money and made some very fancy, high-end e-bikes, electrically powered bikes, battery-powered bikes. And then they full-on died in the last couple of weeks. We had a headline about VanMoof going van poof, which I thought was a little bit mean, but pretty funny. And, you know, I wonder, is this the first super-high-profile startup death we've seen in some time? They raised like 200 million, and I can't recall the last time we saw a company go straight into bankruptcy.
14:23 Speaker 02 The bankruptcy part of it is particularly interesting because you know if they've been doing poorly, they've been on the block, like they've been shopping around, trying to get either like a PE buyer or someone else to acquire them. So the fact that they're declaring bankruptcy kind of shows that maybe there just wasn't that much interest, which doesn't give a lot of confidence about the underlying product. Not like, oh, this was a bad business model, but people are really interested in the intellectual property or sort of the bikes themselves. But declaring bankruptcy after raising that much money kind of implies that maybe people aren't into that product.
14:52 Speaker 01 Yeah, I mean, Ingrid and Mike did a great job of kind of covering the whole saga. And I was intrigued because it sounds like, from their reporting, the company focused a lot on marketing, I think trying to be flashy, but didn't do enough focusing on like making a really good quality product and unit economics and supply chain issues. And all of those factors may have led to its demise. Now, also, another thing that I think that Ingrid wrote about that I thought was really interesting is Cowboy, one of VanMoof's biggest rivals, built an app to allow people to unlock the VanMoof bikes in a day or something like that. I don't know if that's, that's true, but so that way, if you have a VanMoof bike, it wouldn't get bricked, you know, you wouldn't be able to like not use it.
15:35 Speaker 01 The point she brought up was like, wow, is that going to make them even less appealing to potential buyers of their assets? Because it's like, what would they be buying?
15:43 Speaker 00 Yeah, I want to go back to Cowboys letting people unlock their van moves. Why do you need an app to ride a bike?
15:50 Speaker 01 Digital keys.
15:51 Speaker 00 Have you guys seen those things that people are like, oh, my shower was updating this morning, so I couldn't get clean because it was doing a software update? And you're like, why does your shower have software?
15:59 Speaker 01 Yeah, no, I'm like fridges with TV screens. I just like, it's too much tech. Why do you need that? And if it said like when your things were going bad, maybe I'd think differently. But it's like, do you want to watch the weather or do you want to watch the weather on your fridge? And it's like, why does anyone want that?
16:18 Speaker 00 Well, maybe your house is so large that your kitchen is so deep inside of it that you can't see a window.
16:24 Speaker 01 You know, I don't feel bad for those people.
16:27 Speaker 00 Look, I'm not saying we have to live in McMansions, but I will say though, that I own an e-bike. And even though I don't ride it much, my spouse does, and she thinks it's great. So I think e-bikes in general, fantastic ideas. I think even higher end e-bikes make a lot of sense, but at some point you're probably layering too much complexity and technology on top of what should be a pretty simple device. And not everything should be a startup. Something should be a small business. And I wonder if this is something that should have been more of a midsize enterprise versus a venture backed company with $200 million behind it. And a lot of venture capital firms that we've heard of, it feels like an error that was made because of how much money there was flowing around for a while.
17:02 Speaker 01 Yeah, it's unfortunate. I mean, the, the letter that supposedly that the founders had written, this started the company like 14 years ago. I mean, it's not like something that has just been around for a few years. I mean, it's been around for a long time.
17:14 Speaker 00 Yeah. As, as the last thing before we move on, the company stopped taking orders on June 29th and blamed it on like a technical issue. And
17:22 Speaker 01 Oh, yeah.
17:23 Speaker 00 Yeah.
17:23 Speaker 01 I was, yeah, I mean, come on, I think that that was really terrible on their part. I mean, when you, when you're dishonest publicly like that really just undermines your credibility. Nobody's going to believe anything you say anymore. I mean, they were blaming something on a glitch and then they're like, no, no, no, we did it on purpose because we, we wanted to get caught up. And then, you know, all this comes out. So that's just really not a good look.
17:43 Speaker 00 It also screams to me a disconnect between the C-suite and the companies operating people, like people actually doing the work. And that's never a healthy situation when it's due to a financial We'll have to see if the executive leadership at Vamoo sticks around, but other CEOs are not. And that includes Amy Gahn, the CEO of OnlyFans. She's stepping down. She was there for multiple years and OnlyFans has become, I would say, very much part of the cultural touchstone. Like, it's now part of conversation. People know what it is. I would say they also know what it's famous for. And it's grown into an enormously large company. So I guess I was a little surprised to see her step down. I think we had her at one of our conferences a year or two ago. But let's pull the team here. Becca, what was your thought about this?
18:23 Speaker 02 Well, one, I definitely thought it was interesting that she was picked to be CEO to begin with. Not anything about her personally, by any means. I don't, I'll be honest, I don't know much about her. But she was the chief marketing officer prior to being CEO, which is not a typical transition that you see.
18:41 Speaker 01 Right.
18:41 Speaker 02 But at the time, for OnlyFans, I could see it working in this scenario because they'd had so much negativity around decisions they had made and sort of ways they had communicated them and things like that. So like, oh, bringing on someone who's very much lived in that space of like, how to market, how to communicate, like what a company's trying to do. I was like, okay, in this situation, I get why that makes sense. But now it's a couple of years later and they're not dealing with some of those issues. I am curious how it was working out, having someone so ingrained in the marketing space in this like chief executive role, but maybe that's just me.
19:12 Speaker 01 I mean, according to PitchBook, the company made or would make $2.5 billion in revenue last year because they keep like 20% of the payments to the creators on the platform. That's a lot of money.
19:26 Speaker 00 Well, if it's 20%, that means we can 5X it to figure out their gross merchandise volume, which would be $12.5 billion. That's a lot of money flowing through OnlyFans.
19:36 Speaker 02 No, definitely. So that's why this is so interesting because it was like an interesting appointment to begin with. So the fact that her tenure wasn't particularly long and she like wants to start something else, like, isn't like the most surprising, like, CEO step down that we've seen this year, I would say.
19:50 Speaker 00 Yeah, and the COO stepping up makes a lot of sense. COOs are often the person who already has their hands in the day-to-day operations, knows what levers are being pulled and so forth. So it makes sense to me. I wonder if we're going to see more. Executive turnover in the next, you know, six to 12 months? Because I wonder if investors getting a little bit annoyed that some companies won't exit the private markets, if you will, will lead to forced or encouraged changes at the top of companies. And this isn't just a fintech thing. I wonder if this will happen kind of all around unicorn land because there's a lot of companies that might benefit from a shakeup.
20:24 Speaker 02 No, very good point because I was actually, we were recording Found earlier today and we were chatting with a founder who started the company, his company 15 years ago and he's been the CEO the entire time. And I was asking him about this because I was like, I feel like we have seen more CEOs and sort of like founders who had high up roles of that nature stepping back this year than I can remember from say 2021 or prior to that. And so it is interesting to see if this will be just like one of many more that we see this year.
20:56 Speaker 00 Yeah, I think keeping the founder in the CEO role for an incredibly long period of time has had some pretty high profile success and some pretty high profile misses. And I think the general vibe that VCs wanted to keep founders involved in data day operations and therefore at the top for a long period of time makes sense. But also, you know, not every business is in its hypergrowth phase. And so you probably do want someone with a bit more, I'm going to say, traditional business savvy, I think, kind of an adult in the room type aspect, kind of a Schmidt to Google or a Zuckerberg's number two, who left?
21:28 Speaker 02 Cheryl.
21:28 Speaker 00 Cheryl.
21:29 Speaker 02 Cheryl, yeah. Should have just said lean in.
21:31 Speaker 00 Lean. So if people don't know, I was sick yesterday and I am recovering. So I'm trying to bring my, my full zip and my brain is only like 80% there, like a Cheryl to suck, if you will, bringing in someone who has a bit more of that to them. So it's not a huge shock to me. I will be very curious to see if there's any changes at OnlyFans after this. And if this is as cosmetic a change as we think it is versus something more structural, you know, are they going to go back on their nudity ban or whatever?
21:55 Speaker 01 I agree, but also just on this note of founders and CEOs, I don't think it's really necessarily a negative signal in general when founders decide to step away from a CEO role. I mean, I think you can be brilliant, have a great idea for a company, you can get it off the ground, maybe raise some money, but that doesn't mean you necessarily have to to run it forever. So sometimes I think it can be a good thing for a founder to say, you know what? I started this, it's moving right along, but it's time for someone else to come in. Marketta did this last year, I think it was that Jason Gardner, he stepped down from his role as CEO, they named Simon Khalif, who was the company's chief product officer to take over. So sometimes it's like, you know, different phases require different types of leadership, not always a bad thing.
22:38 Speaker 00 Absolutely. And if you are a CEO who's stepping down, email us so we can put you on Found and you can tell us all about why you're making that change and how it represents what's going on in the markets. We'd love to know more.
22:48 Speaker 02 Or you could let us scoop it if you really love the show.
22:51 Speaker 01 Even better, yes.
22:52 Speaker 00 You should let us scoop it and then come on Found and then we'll have a twofer and we'll all feel fantastic. Moving along, did you guys see the fake episode of South Park that came out recently?
23:02 Speaker 01 I didn't see it. I just read Devon's very good story on it, but I was a huge South Park fan when South Park first came out. Loved it, loved it, loved it, love Cartman.
23:11 Speaker 00 That's who you pick?
23:12 Speaker 01 I love Cartman. Come on, how can you not?
23:15 Speaker 00 Because he's a terrible little devil child.
23:18 Speaker 01 He's hilarious.
23:19 Speaker 00 He made someone's parents into chili and then fed it to them and then licked their tears off their face. He's the-
23:24 Speaker 02 AI couldn't write that.
23:26 Speaker 01 Right.
23:26 Speaker 00 AI could not write. Remember when he took the parents' ashes and made them into like cocoa powder?
23:31 Speaker 01 I may have forgotten that, but I still think he's hilarious. And no, so I do need to watch it. I do think though, I mean, Devon did a great job kind of looking at this story from all angles, because basically what happened is Fable Studios soft launched their AI that they said could write, animate, direct, voice and edit a whole TV show. And they did it amid an ongoing writer's strike.
23:51 Speaker 00 Yes. And so the tension here is why would you show off your AI technology at a moment which we're having this epic fight over what is creation and who owns identity, voices and representation? Definitely to me, tone deaf, but also if you wanted to get the word out, congratulations, you've done that.
24:07 Speaker 01 Right.
24:07 Speaker 00 The question is, is the negative publicity worth the negative publicity? And Becca, I'm curious how this landed on your plate.
24:13 Speaker 02 Well, this is one of those situations where you just think to yourself like, that's capitalism, baby. Like, they're like, oh, these people aren't writing. Guess who has all the money? The people who make those decisions. But in their mind, this was probably the perfect time to launch this. Anyone who likes the labor rights or cares about this kind of stuff, it's just like, that company is just going to be such a stain.
24:33 Speaker 00 Well, Fable, which was born out of Facebook's Oculus group back in 2018, is obviously not a new company. But I will say, this is the first time that I have heard about them. So, mission accomplished. Marian, they're working on something that's going to help, I think, with other generative AI. It's called simulation. I was a little unclear about what they're actually building, though, when I was prepping for the show.
24:55 Speaker 01 Same, yeah. It's described as an agent-based approach to creating and documenting events for media. I'm not exactly sure what that means. I was also intrigued by the CEO kind of trying to defend what they did by saying that, you know, this was a moment of maximum leverage for people who are striking to set rules for coming decades and keep producers from using this tech. Which is, it was just like, what, what are you, what, what are you trying to say? So, let's make this, this AI-generated show so we can help these writers have an example of, like, what should not happen? I mean, I don't know. It was just kind of weird.
25:30 Speaker 00 I mean, come on. Don't be so tone deaf.
25:33 Speaker 01 Yeah.
25:33 Speaker 00 I'm not a fan of this. Although, I will say, there was some more news in the generative AI world. Google is working on a thing called Genesis. I don't know if you guys saw this. Essentially, it's like a companion tool for journalists to use this new technology to help them write headlines, and maybe some text and copy and so forth and all that. And you can guess the reactions that people have had to it. But I'm curious, if you had an AI buddy that kind of like knew your writing style a little bit and could write next to you in WordPress, maybe, would you be willing to try it out in a professional setting?
26:02 Speaker 02 For a headline, I guess.
26:03 Speaker 01 Yeah, maybe for headlines, just because I overthink headlines so much, and I wouldn't have, maybe I'd have to bug you less, Alex, for, like, headline ideas.
26:11 Speaker 00 You've never bugged me once, Marian.
26:13 Speaker 02 But beyond headlines, I would, I would have to say, no.
26:18 Speaker 00 Why is that?
26:19 Speaker 01 I mean, why would we? Why would I do that? I mean, the whole point of journalism is to have a voice, you know, to have be an authoritative voice, in my opinion, at least in what we're writing. So to use AI would totally negate that.
26:35 Speaker 00 Becca, you had a similar reaction, same same argument?
26:37 Speaker 02 Yeah, it's pretty much, it's just like, why did we come reporters to then have someone else do our job? Like, we're in it because we like to do it.
26:44 Speaker 00 Well, there's two things that we're describing here because writing and reporting way in the past, used to be a bit more distinct. You had people go out and then they would collect fax and send it back and people would put them into stories. Now we kind of expect people to be both reporters and writers. They're actually kind of almost synonymous terms in a lot of ways. I think definitely on the headline front, this stuff's coming our way. But I wrote a story back in like 2015, somewhere in there, way back in the day, about how like the AP was using some blogging, we called robots back then, to help them do coverage of earnings. Because a lot of that's pretty cut and dry. And my my view at the time was, if you can spit out a sentence that tells me where the EPS is compared to analyst expectations, cool, but everything else needs to come from me because you don't know what I'm looking for, if that makes sense.
27:29 Speaker 01 Right. And they don't know what we know to provide the context that readers want or need. Right?
27:35 Speaker 02 It's like, half of PR people can't even come up with a good angle for a story when they pitch you the information that you get said information and go, that's not interesting, but this information would be interesting in this context. It's just like, if half the people working on this kind of a problem can't figure it out, I don't know why technology would be better.
27:51 Speaker 00 Yeah, absolutely. Which is why I'm not concerned about it. I guess is the other side of this. Like, people are like, oh, people have asked me in my personal life, are you worried about, you know, losing your job because of AI? The answer is no, I'm just not. And also, I think, and maybe this is, this might be me, you know, cracking my buggy whip and thatching my house's roof and being a little bit old fashioned, but I think that people like to read humans for how they write individually. At least, I really hope so.
28:16 Speaker 01 Right. Like, the voice, their their knowledge, their authority. That's what I mean, we've, you know, you come, if you read certain publications or journalists regularly, you come to kind of know that, even if it's subconscious.
28:26 Speaker 02 Right.
28:27 Speaker 00 I was reading one of Becca's stories today that just went out and like I just, I know how she writes. I particularly like it and it's fun to watch her, it's fun to read not just her reporting, but also the way that she puts it together. And that is so clutch to me to like invest in an individual person at a publication. So I guess Genesis sounds cool, but I mean, at the same time, if it's just for headlines, our analytics service, Marfield, already has headline generation built in and you don't even have to ask for it. It just tells you other headlines you could have used for you.
28:59 Speaker 02 After the story's out.
29:01 Speaker 01 Yeah, that's true. But I do think that if you want to use a bot to help you write a story, it's going to sound robotic.
29:09 Speaker 00 Yes.
29:09 Speaker 01 And who wants to read that? It's going to be boring. I mean, that's it.
29:13 Speaker 02 My like main thing for writing that I think generative AI will be great at is, and people should use it for, is cover letters. That is my only thing that I see generative AI being good at because no matter what, I feel like cover letters sound like they're written by a robot anyway. So why waste the time?
29:32 Speaker 00 Cover letters and letters of recommendation.
29:34 Speaker 02 Yeah.
29:35 Speaker 00 Which are essentially just Mad Libs, right? Billy Bob is the best I've ever seen in insert category here, whatever. So yeah, that's, that's fine. Take all the trash writing and give it to the robots, but anything that I have to read because I want to learn something or because I'm trying to enjoy like a piece of fiction or whatever, then yeah, I just expect humans to schlep it. And I wonder if that'll become a premium down the road, just because I've been thinking a lot about this. I'm going to squeeze in one more thing. Did you guys hear about the authors? There's a couple of thousand authors that put together a letter complaining about their works being ingested into these AI systems that could then be asked to write kind of quote, quote, in their style. And I always try to not have a first kind of like reaction to technology as scary stories and going, yeah, because eh, you know,
30:18 Speaker 00 technology doesn't usually end up being as scary as people think. But this feels very different than search to me because search was a way to index the internet. This is a way to use what has been done to create more without citing your sourcing or crediting or paying. And so I think these authors have a legitimate grievance, like this, to me makes sense.
30:36 Speaker 02 Yeah, absolutely.
30:37 Speaker 01 I think so. I mean, it's actually more than 8,500 authors that have signed this open letter. And I do agree with it. And I think it's almost, is it, how is this different from plagiarism? I don't understand. I mean, it may not be verbatim, but it is very much like stealing concepts or thoughts that authors have had, not citing them. Like, where do you draw the line?
30:57 Speaker 00 I think about 20 feet behind this. At the same time, do I hope the technology hadn't been made? No, I just think that maybe we should have thought a little bit more earlier on about monetization and paying for this. Last thought, then we have to wrap up. But like, do you think that any of these AI companies will end up fairly compensating people whose work they used to train their models they're now profiting off of?
31:17 Speaker 01 I think it's going to be hard to figure out how to do that. Like, how do you quantify it?
31:22 Speaker 00 Yeah, that's a good point. How many is it? Is it queries, like number of queries, number of words generated from those queries, frequency, words ingested?
31:31 Speaker 01 It feels like it would be extremely complicated. And I don't know if any of these companies are going to be willing to do the work that would be needed to be able to do that.
31:40 Speaker 00 Yeah. Well, listen, guys, we got to go away. Equity, of course, is back next Monday, next Wednesday, next Friday. Couple of housekeeping notes. You can follow Equity on Twitter and threads where we tweet and thread under the handle EquityPod. And we skeet over on Blue Sky under the handle Equity. Disrupt is right around the corner. Equity's opening the show once again. And also, Becca Fallon will be on one of the mornings as well. Yeah?
32:00 Speaker 02 Yes. And we're talking with cybersecurity Maven Windows Snyder. So should be a really fun conversation.
32:07 Speaker 00 It's going to be an absolute blast. Having podcasts kickoff each day of the show has been one of our better ideas in recent years. And I'm very excited about this. There's also an IRL podcasting opportunity from the TechCrunch Podcasting Network in the works. So stay tuned for details on that. And if you don't have a ticket yet to disrupt, come hang out with us. Use the code Equity, save a couple of bucks. And I think that's it. Mary Ann, did I miss anything?
32:28 Speaker 01 I don't think so.
32:29 Speaker 00 All right. Well, Becca, thank you as always for coming on the pod. You are amazing and a treat. Mary Ann, I'll see you next week. Everyone else, bye.
32:35 Speaker 01 Bye.
32:37 Speaker 00 Equity is hosted by myself, editor in chief of TechCrunch Plus, Alex Wilhelm, and TechCrunch senior reporter, Mary Ann Azvedo. We are produced by Teresa Locan Solo with editing by Kel. Bryce Durbin is our illustrator. And a big thank you to the audience development team and Henry Picavet, who manages TechCrunch Audio Products. Thank you so much for listening, and we'll talk to you next time.
Previous Venture's Q2 was calm (and that's not good) Next Please re-xeet this podcast episode Page updated October 12, 2026 · transcript and summary are machine-generated
