Pod Insights Equity Podcast We're in the pruning phase of tech layoffs About this episode Here's the rundown from Mary Ann and Alex:
A new Chinese AI model had us wondering who is really going to win the AI war and whether governments will play a role — perhaps not the role that they are expecting.
A founder that Founders Fund funded is now funding other founders at Founders Fund: Yep.
Sticking to the venture theme, is it possible for AI models in venture to actually create a less biased landscape for entrepreneurs? Connetic Ventures thinks so!
Two bits of good news: Tech layoffs have dramatically slowed, and slowing inflation could herald the end of interest rate hikes, which could bolster tech valuations. Or at least cut some of the pressure.
Finally, as Twitter does what it usually does when a rival service takes off, we asked ourselves how other social media services are doing. We are more familiar with some than others.
As always, Equity will be back for you bright and early Monday morning. Talk soon!
For episode transcripts and more, head to Equity’s Simplecast website.
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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.
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Transcript 0:11 Speaker 00 Hello and welcome back to Equity, a podcast all about the business of startups, where we unpack the numbers and the nuance behind the headlines. It is Friday, July 14th, and my name is Alex and I'm joined today, as always, by my friend. It's Mary Ann Azevedo, a senior TechCrunch reporter on the fintech beat. Mary Ann, hey.
0:27 Speaker 01 Hey, Alex, how are you?
0:29 Speaker 00 I'm doing good. You're wearing a new thing today, though, that I have to say, which is very interesting. You have, you have strings coming down from your glasses that are made of diamonds.
0:36 Speaker 01 I, my granny lanyard, yes, because while on vacation recently, I lost my glasses and it was very upsetting. So I vowed that when I got back, I would get this lanyard. So now, because I'd have to take my glasses off and on, right? Because I don't need them all the time. So it's very easy for me to misplace them, which I did very frequently. So now I have the granny lanyard to help me keep track of my glasses.
1:00 Speaker 00 I've never heard that phrase before. I just like to point out that you're bringing drip to the actual podcast recording on Zoom, and I appreciate that because it's bumping up our overall level of fashionability. All right, jokes aside, we have a lot to talk about this week, so we're going to kick off with what's going on with AI in China, Ryan Peterson moving to Founders Fund, then we have VC in the AI era, or kind of AI in the VC era, cooling inflation and why it's good for startups, tech layoffs, and why it's kind of, kind of getting better, if you will. And then how are those other Twitter rivals holding up? It's going to be a packed show, but Mary Ann, it's tech in 2023, so I think we have to start with artificial intelligence. So if you're okay with it, I want to take us over to China.
1:38 Speaker 01 Yeah, there's, there's some interesting things happening there.
1:41 Speaker 00 So TechCrunch wrote a story, and essentially, someone who was working on one of the better-known search engines in China has put together a very interesting next-gen LLM. It's called Bichuan 13B. And if you're not really accustomed to how LLMs are named, it's usually like a brand name with a dash and then a number, then a letter. And the number and letter at the end, like 13B, stands for like 13 billion parameters. So the previous model in this group was 7B for 7 billion. So I found that out the hard way by, by not knowing that for a long time.
2:11 Speaker 01 Thank you. I had never knew that.
2:13 Speaker 00 Well, it's it's it's cool because Baichuan was actually launched in April and raised 50 million and put together this kind of cool open source model. And I was like, hot dang, Mary Ann. I thought generative AI and AI in general in China was actually very locked down because there's a lot of rules in China about what you can and can't say in a digital context. So it turns out that that still kind of applies. And right before we started to record today, Tucker actually wrote a news story about regulations that have rolled out from Beijing about generative AI and kind of the licensing and regulatory regime. So I bring all of this up just to point out that there's an interesting division, not in ability to create new LLM technology, but in the ability to roll it out.
2:57 Speaker 00 And when GPT-4 was released, oh, what was that, Mary Ann, like a week ago?
3:04 Speaker 01 I don't remember exactly. It all runs together now, Alex. Maybe sometime in the past couple of weeks.
3:09 Speaker 00 There you go. Sometime in the last couple of weeks, which is like 48 years in AI time. Anyways, when you build something like that in the United States or many other markets, you can kind of just drop it. You can just put it out. And sure, there may be some regulatory pushback and some complaints and so forth. But you can at least go out and make some trouble. Pretty different in China. And so what I'm going to be really curious to see with companies like Baichuan Intelligence and the kind of other major technology companies in China that we all know by name that are working on this stuff, is how fast they can actually bring it out in a commercial context and also in a consumer context. And I think it's pretty unclear at this point, how much of this stuff is going to actually reach regular end users.
3:44 Speaker 01 Right. So I'm learning, right? I'm learning about this. So Chinese companies cannot actually launch to the public, right?
3:52 Speaker 00 Generative AI models need to be, I would say, vetted, licensed and approved. So that way they don't make stuff up that could be construed as contra to approved narratives. And also there are some things that will get you in in trouble, if you will. So I think that there's going to be, and I've talked about this a little bit on the Monday show, I think, kind of a divergence between generative AI development in more open versus less open economies. And I think that the more open economies are going to do better because you can just put stuff out, get a lot of feedback. Back and learn because you don't have to dance around certain topics or deal with quite as much regulatory overhang. So to me, China, obviously, as we can see from Bychuan Intelligence, their technology community can build these things. The question is, can they actually bring them
4:36 Speaker 00 out in a manner that's interesting and useful? So it's something that I care a lot about, and I want to make sure we're talking about because talent is distributed everywhere, but access to markets are not.
4:45 Speaker 01 Yes, and I think, as one of these articles pointed out, since companies, like you said, have to, may also need to get a license before launching these large language models.
4:54 Speaker 00 Yeah.
4:54 Speaker 01 I think this could really impact China's ability to compete with the US in AI. And that's really, that's huge. I mean, that's a, that's a big deal.
5:03 Speaker 00 It's an enormous deal. And it also brings into account the kind of what we've called the chip war between the United States and its allies and China. The US, if you don't know, is trying to curtail the ability of China to kind of stay at the cutting edge of chip development. China, on the other hand, wants to be entirely self-sufficient in chip development. And as everyone knows, AI models often take a lot of GPUs to train them. If you don't know why that's the case, you can just go see in the data of what a Nvidia H100 will cost you. Anyways, all this is to say that the AI race that is going on in the world right now is of a different flavor, and I would say bent than what we heard two years ago, which was that China was going to crush the world in AI. And now they're kind of stepping on their own tail a little bit to make a pet-based analogy.
5:43 Speaker 01 Yeah, I mean, it feels like, obviously, that they're behind, like, way behind, even though they might not technically be, but because it's not out there, that's what it feels like.
5:53 Speaker 00 Yes. If you make something awesome and you lock it in a small box, have you made something awesome?
6:01 Speaker 00 I don't think so. Speaking of small boxes, though, things locked inside of them and moving them about, there's a man who's very well-known for his work in supply chain management logistics and the work of getting things from point A to point B, including China and the United States, and that's Flexport's Ryan Peterson. But today, he's kind of under new aegis, Mary Ann. What's going on?
6:18 Speaker 01 Yeah, first of all, that segue was awesome, Alex.
6:20 Speaker 00 Thank you.
6:21 Speaker 01 Yeah, great. So yeah, Ryan Peterson, who, for the unacquainted, is the CEO and founder of a company called Flexport, which I always kind of admired because it was one of these startups that was operating in what we kind of term like non-sexy industries, right? Where they're doing things that are actually really, really important, but not exactly as sexy or as interesting as industries like AI. So Flexport was founded almost, what, 10 years ago, has grown quite a lot since then. It's a freight, freight forwarder, basically helping companies move.
6:51 Speaker 01 Move stuff right through ocean, air, train, I think all sorts of modes of transportation. And Ryan Peterson, interestingly, he was CEO up until I think last year is when he decided to step down. And now he's joining venture firm Founders Fund as a partner.
7:06 Speaker 00 Yes.
7:07 Speaker 01 Which yeah, had Twitter all a chatter this week.
7:11 Speaker 00 I think actually you can say there, it had Twitter all a Twitter because that would actually be linguistically correct. Can we just go back a little bit, Mary Ann, and say that we need to stop describing any particular part of the technology world as sexy? Because
7:26 Speaker 00 AI, at least the AI that I've seen, not sexy. It's text based and it's tuned to be PG at all times. So to me, it feels very strange that we're calling anything.
7:36 Speaker 01 Yeah.
7:36 Speaker 00 Yeah, it just seems a little, what can we say instead?
7:38 Speaker 01 You're right. You're right. Interesting terminology. Yeah, is maybe like, I hate to use this word because it sounds insulting, but boring?
7:47 Speaker 00 Yeah. No, I mean, I mean, boring stuff makes lots of money.
7:52 Speaker 01 Yeah.
7:52 Speaker 00 Drilling oil out of the ground, pretty boring. It's putting a straw on the planet, and yet incredibly lucrative. So boring isn't bad. It's just accurate. Anyways, Founders Fund, I'm curious, when you saw this news, were you surprised that that's where he's ended up? Did you think he was going to end up at like Andreessen or Bessemer or Billy Bob's venture?
8:10 Speaker 01 You know, I don't know. Ryan Peterson, I've written countless stories where he participated in funding rounds at the very early stages and angel investors. So honestly, I wasn't shocked that he decided to become a VC. Like, that part didn't surprise me. I had not really paid attention to his history with Founders Fund previously. They had invested in Flexport very early on, and I think subsequently, maybe almost in every round, including one of their more recent large rounds. So, you know, learning that history, it wasn't shocking. But in his email statement to me, he basically said that he had not really ever thought about becoming a VC, which I, I found a little bit surprising because he invested as an angel into over 100, it was over 100 startups that he backed, including Ribling, Mercury Fair,
8:53 Speaker 01 Eight Sleep Carta. But he says that he never really thought about becoming a VC and that when he moved to the chairman role at Flexport, that a dozen or so VC firms reached out to him. He didn't entertain any of them, he says, besides Founders Fund.
9:07 Speaker 00 I mean, I believe most of that. I don't believe they never entertained the idea.
9:12 Speaker 01 Yeah.
9:12 Speaker 00 Come on. He's got, he's got friends who are VCs. He sees how much less they work than the CEO of a large company, you know, like, come on.
9:19 Speaker 01 Yeah, no, that part was a little questionable.
9:22 Speaker 00 Anyone who's gone out to dinner with a VC and seen how they approach prices has considered becoming a venture capitalist. Let's just say that. And then most of us declined. Anyways, I think this is cool. Founders Fund is a venture firm that I hear about quite a lot. I'm not going to go much deeper than that because I don't want to get us off track. But I do want to say that he put out a tweet that was contra to the image of Mr. Peterson that I had in my head before.
9:45 Speaker 01 Yeah, I mean, I had talked to him years ago. He came across as quite humble. And I think articles we've written in the past too, kind of portrayed that sort of persona that he carried. But yeah, the tweet was interesting. I have joined Founders Fund. If you are someone who's out to get revenge after having been wrong by a previous employer or investor, a French technical founder who fled socialism to build your company in America, or a Christ like figure of any kind, please get in touch.
10:11 Speaker 00 I wanted you to read that because apparently it's going to fit right in at Founders Fund.
10:16 Speaker 01 Yeah, I think, I think it made a few people take pause. But when I, again, communicated him only via email, unfortunately, but he did convey that he's going to be a generalist. He's excited and he's ready to back startups. He says, I'm interested in innovative companies, regardless of their stage or industry.
10:34 Speaker 00 All right. Well, let's see what Mr. Peterson does when he gets his hands on someone else's checkbook. We're going to move on to VC and AI in just a minute. But before we do that, we have a quick break and then we're back with all things money and computers.
10:49 Speaker 00 All right. And we're back. And Marian, I love wordplay because I spend all my time with words, much like yourself. And so when I was reading about Kinetic Ventures, I thought the way they spelled it was very funny. Because instead of it being kinetic, like K I N E T I Z, it's C O N N E T I C. And I had myself a small giggle. But if you could help us, what is Kinetic Ventures and why are they on the show?
11:09 Speaker 01 So this is a Kentucky-based venture firm, which honestly, I don't think I've ever heard of a venture firm based in Kentucky. So right away, that's cool, right? So Hyo Hyo wrote about them. Hyo is our resident startup pitch expert. Anyways, this company's developed a piece of software they called Wendell. And I really have to say, I like the premise of what they're trying to do with this. They say they're using AI to screen founders. And they're doing this, they say, as a way to avoid bias because they really want to invest in a diverse set of founders. So they're, they're trying to implement a new tool to help do that. So I really like the premise of it, but then, you know, as I was reading about Wendell, I of course had to have my skeptical hat on, but basically it's like they have founders
11:54 Speaker 01 take a test and then they're trying to assess these 13 entrepreneurial traits that they've come up with, things like leadership, extroversion or introversion, patience, attention to detail. They don't ask things like, are you a multi-time founder or where they went to school?
12:09 Speaker 00 So basically you don't have to have gone to Stanford and gone through YC to get kinetic ventures to care about you. And frankly, that makes good sense because if you're founding and basing your venture firm in Kentucky, you are deliberately not doing it in Silicon Valley or New York City or Boston.
12:25 Speaker 01 Right.
12:25 Speaker 00 Right. Here in the United States, those are the three biggest kind of hubs. So you're probably wanting to look at a different founder pool?
12:31 Speaker 01 Mm hmm. Which is great. I love that.
12:34 Speaker 00 Absolutely. And then there's another element to this that I found really interesting, which was they're not taking carry. Instead, they're just charging a management fee. And if you don't know the old phrase two and 20, it's like the old, I don't know, Mary Ann. It's, it's the old fashioned way that venture funds got paid. They'd raise a fund, they got 2% of it per year to pay their own expenses and 20% of profits after they paid back the initial capital, two and 20, that became two and a half and 25 in certain funds, blah, blah, blah, blah, blah. Taking 1.9% no carry is cheaper, but it seems they want to do that to open up access so more people can put their money into kinetic.
13:09 Speaker 01 Yeah. I mean, all of this is great. Like, I really love that. It seems very inclusionary on all angles here with the firms trying to do. So I find it fascinating. So I'm curious to see, you know, how this works in the long run, like if it's really going to get them, like how, what are their returns going to be like? Is it really going to accurately assess who might make a investable founder as opposed to, you know, one who's building a dad?
13:35 Speaker 00 Well, I mean, I think those are not mutually exclude, those are overlapping circles, right? Because some people will have the right background and the right idea at the wrong time. Some people will have the right background, the right timing, but the wrong idea and et cetera. So I don't think it'll ever be perfect. But Wendell, this AI thingy that Kinetic has, gives companies a one to five star rating after they fill in their information and it kind of crunches the numbers. And the more stars you have, the greater the chance they think that you're going to succeed. But they do need a lot of capital to pull this off because they probably have to have enough darts at the dartboard to prove their aiming mechanisms. I think they need like 500 million to do this. Anyways, they're going to write 15 to 20 checks a year, most of which are between a quarter and a half million dollars. And I think this is cool.
14:20 Speaker 00 Although, much like many things that I want to use new technologies to combat human biases, the proof will be in the proverbial pudding.
14:29 Speaker 01 Right. Yeah. Yeah. Hopefully, we can circle back with them in like a year or so, see how it's going.
14:34 Speaker 00 Kinetic, we'll have you back on the show if you give us your early IRR numbers. And that goes true for any venture capitalist who wants to come on the show. Give us
14:41 Speaker 01 Yes, yes.
14:42 Speaker 00 If you're willing to share performance data, we will talk to you.
14:44 Speaker 01 Absolutely. Give us the numbers. Show us the money.
14:49 Speaker 00 That's wait, that's from that movie with the, with the guy shouting into his phone, right?
14:52 Speaker 01 Was it Tom Cruise? Is it?
14:54 Speaker 00 Yes, but I haven't seen the movie. I've just seen the GIF.
14:56 Speaker 01 Jerry Maguire. Yes, that's it. Yes, yes, yes. Love that movie. Love it.
15:01 Speaker 00 Really?
15:01 Speaker 01 Yeah. It's a great movie.
15:03 Speaker 00 Equity movie note at some point in time. I have not seen Jerry Maguire. Toby Maguire, wasn't he like a Spider-Man actor? Any relation to the fictional character?
15:14 Speaker 01 No.
15:16 Speaker 00 All right. Well, before you and I get fired for going off topic, we should discuss other people in the world of technology who are getting laid off. And I want to start with layoffs and then I want to bring in some recent economic data. But first, Mary Ann, last year, back when Natasha was still with us, it felt like here on the show, every single week, we would talk about like between six and 600 companies that were trimming staff. And from an anecdotal perspective, what are you hearing from founders and investors lately about startups trimming their staffs?
15:44 Speaker 01 I mean, definitely, it's far fewer layoffs occurring now compared to last year, especially the second half of last year where it felt like it was, they were, yeah, it was like we were bombarded with tips constantly about companies, startups laying off. And it was just left and right, right? It became like a daily thing. And it got to the point, there were so many companies laying off, we couldn't even cover all of them, right? In like one story anymore. We had to do roundups or things like that. And, and there were large numbers. There were companies laying off, like, you know, Stripe, I think, was 1,100 people. I mean, there were some big numbers. This year, right now, it's calmed down. It's not nearly as much as it was before.
16:23 Speaker 00 So there were two major periods of tech layoffs that we've talked about on Equity. The first was the early 2020 COVID economic shutdown snap recession, in which we saw a lot of layoffs because people were terrified that the economy was going to be turned off. I mean, Airbnb went through layoffs in particular because of their business model as well. But what was interesting about that, Mary Ann, is that that was a Q2 2020 phenomena. And then by Q3, Q4, it was done.
16:49 Speaker 01 Right.
16:49 Speaker 00 And then we had this massive venture boom. Then we had the most recent layoff cycle, the one that you're really talking about. And this is from data via layoffs.fyi, great service, kind of began Q1 of last year, but really picked up between Q2 of 22 and Q2 of this year. The difference is that this time, the numbers were bigger, and then they came down more slowly. But the thing that we've been talking about lately over on techwatch.com is that while we've seen the number of individual staffers laid off decline precipitously from 89,554 in January to 10,910 in June of this year, right?
17:25 Speaker 01 Huge drop. Massive.
17:27 Speaker 00 Good news, everybody. The chance of you getting laid off is going down. But there's also bad news. And the bad news is that while that number has been steadily falling, the number of companies executing layoffs at all has slowly picked back up. So I want to run my hypothesis past you. During the, the last, the last nine months, it felt like the big layoffs were like companies being like, okay, we really overhired in this whole division. We need to kill off this project. We're going to cut 1,000 staff. You know, like Plaid had layoffs, right? Stripe had layoffs.
17:55 Speaker 01 It felt like everybody did a lot of the big Decacorns and big players in fintech too. And interestingly, many of them use that same terminology, Alex, is that, oh, we overhired. We just, we overhired. Our, our expectations were off. It was, it became like this repetitive thing.
18:13 Speaker 00 My favorite part of that was when every single CEO is like, I take responsibility.
18:17 Speaker 01 It was my fault.
18:18 Speaker 00 It was my fault. I'm taking no pay cut. There will be no repercussions, but I will publicly pretend to take fault for this because it is the PR smart move. Anyways.
18:27 Speaker 01 Right.
18:28 Speaker 00 The difference now is we are seeing the number of layoffs go down, but the more companies kind of doing these layoffs, you know, this isn't a massive change, but there used to be a correlation between declining number of layoffs and number of companies cutting. The divergence, I think, is we're seeing more companies today do smaller cuts. More tactical, more trimming, more, maybe we cut most of the way, but we just need to ax a couple more things. And so we're, we're in the, the pruning stage of tech overgrowth.
18:54 Speaker 01 That's a good way to describe it. Yeah. Just kind of like, as you put also, I think in one of your fat trimming, kind of like, okay, we don't have to do a massive layoff, but there's still room for cuts to make us, you know, a little bit more capital efficient. And more and more companies appear to be doing that, according to the data you looked at.
19:13 Speaker 00 Yeah. To pick an example about this, and one of the reasons why I decided to dig into this is one, we had gotten a tip that Crunchbase was going through layoffs. I, I didn't get a chance to confirm it. So we had it and we didn't publish it because I didn't have a second source and blah, blah, blah, blah. Anyways, Crunchbase is cutting staff and also Microsoft, which cut 10,000 people earlier, cut another like 250. But you know, 50 layoffs at Crunchbase, 250 in Microsoft. I mean, these numbers do feel smaller than they would have been nine, 12 months ago. So I think they're kind of indicative of this new era of layoffs. And we are seeing them land in the same spots as usual, sales, customer success, recruiting, marketing.
19:49 Speaker 01 Recruiting, yeah.
19:51 Speaker 00 Yeah.
19:51 Speaker 01 Cause even Stripe laid off apparently some recruiting staff recently as well.
19:56 Speaker 00 Which is kind of shit because, I don't know, all the recruiters that I've worked with at companies where I've used them to help hire people for the company have been. Awesome.
20:03 Speaker 01 Yeah, and I think it's also just kind of telling, though, because if we're seeing all these recruiters get laid off, that means that should we expect, obviously, a hiring slowdown? Because all these companies are not looking to hire in the same way they were, so.
20:16 Speaker 00 Absolutely. And one thing that we have seen when it comes to hiring more quickly is a slight deceleration in the pace at which the United States is adding jobs, though job creation has been relatively healthy and stable for the last while. But there's been a lot of concern about inflation, which we have talked about on the show. It's been kind of a worldwide issue for the last year, year and a half. But the good news, everybody, is that recent inflation data, and I'm not going to drag you through all the numbers, because most of you don't care, and those of you who do have already read them, but recent data regarding domestic or American inflation have shown reasonable improvements on that metric.
20:48 Speaker 01 Yeah.
20:48 Speaker 00 And this matters, because it could mean, Mary Ann, less interest rate hikes.
20:52 Speaker 01 Woo. Yeah, I mean, inflation was nuts, you know, over the past year. I mean, everything was more expensive, everything by like multiples. It's been crazy, so I'm happy to hear that things are slowing down.
21:05 Speaker 00 Yeah, and it's good for tech companies, because if interest rates are almost done being hiked here, or perhaps there'll be another quarter point raise or whatever, but we're through, it appears, the worst of it. This is good for tech valuations on the public market, which then trickle backwards into the startup domain. So it sucks that we had to like get to this point by seeing the axe swing on so many startup necks, if you will, but at least it appears that we're almost out of the woods here. We're not going to see, I think, rate cuts anytime soon, but at least the pressure won't be increasing even more than we've already seen.
21:39 Speaker 01 Right, for sure. I feel like I hesitate to say this, but sort of like the worst is over, maybe? Like, no recession like we feared?
21:49 Speaker 00 Okay, let's, let's talk about personalities for a second. In a general sense, Mary Ann, are you more of an optimist, more of a pessimist, or more of a person who thinks that they're relatively neutral about stuff?
22:00 Speaker 01 Oh, gosh, I've changed over time, Alex, so, and I think it depends on what the topic is, so hmm, probably more neutral.
22:10 Speaker 00 Okay, but regarding, let's say, economics, economic data.
22:14 Speaker 01 I would say probably more of an optimist.
22:17 Speaker 00 Okay, I'll take that. I think that I used to be more of a pessimist, and I've become actually more of an optimist over time on economic data, and everything else has gone the other way.
22:27 Speaker 01 Yeah.
22:28 Speaker 00 You meet enough people, you eventually just stay inside all the time.
22:31 Speaker 01 Exactly.
22:32 Speaker 00 But I think I'm with you on the optimism part here because what we have heard is a steady drumbeat of kind of doom and gloom about the economy and forecasts and how we're, you know, minutes, just minutes away from a recession here and it consistently hasn't worked out. And I think a lot of that is due to strictly the power of what I would call modified capitalism, the system that we live in here, which is free market capitalism with regulations to kind of like power through stuff and things have gone pretty well. And if we can keep this economic recovery or status quo going with less rate increases, it feels like you said, the worst could be over for startups, for tech valuations. I mean, we're not out, we're getting close.
23:13 Speaker 01 Not out of the woods yet.
23:14 Speaker 00 Yeah, I hate, I'm trying to use fewer cliches. I'm trying to avoid cliches like the plague.
23:20 Speaker 01 It's hard though, because they just kind of sum it up so, so well. But yeah, I mean, I'm with you. I agree. Like, I guess we're still kind of, we have to wait and see what happens, but it does feel that way to me as well. I do feel like perhaps the worst is behind us. I do also, like, I see it in my inbox, Alex. Like, I'm, I'm getting a lot more pitches for news that, you know, that I wasn't seeing for a long time. So I, there is a little bit of.
23:42 Speaker 00 Tell me, tell me about, dig into that. Is that in terms of like round size, hires? Like, what are the metrics you're seeing there?
23:49 Speaker 01 Yes, yes. I mean, for a long time there, it was like, I was flooded with seed, very early stage raises, pitches for early stage raises. And that was the norm and not a big shock because we've reported on that, right? I think there was a lot of money flowing into the very early stage market. But now I'm starting to see it come back, right? I'm starting to see the larger round sizes again. I'm starting to see more activity picking up.
24:11 Speaker 00 Okay, well, hold on, everybody, hold on to what Mary Ann just said because next week, if everything aligns, the stars, schedules and so forth, we should have a pretty fun Equity Wednesday for you, digging pretty deep with a special guest into Q2 venture data and looking ahead. So, Mary Ann, I didn't ask you to do that, but thank you so much for reminding me to bring that up on today's show.
24:32 Speaker 01 Absolutely not planned, but it's true. I think we're going to see a very different second half of 2023 than the first half.
24:40 Speaker 00 All right, now, we need to quickly talk about our last thing today because we talked too much about inflation, sorry about that, everybody. But one thing, Mary Ann, that I've learned recently, now that I have a baby, is that children love screens. Ada, my daughter, loves to try to eat my Apple Watch. Like, she thinks it's hilarious to try to like turn on alarms randomly by just hitting it. And she also like lunges for my phone. So I had to stop tweeting while I'm holding her because she wants to put the phone into her mouth.
25:05 Speaker 01 If we, if we start seeing like really garbled tweets coming on out of Alex's account, we know why.
25:12 Speaker 00 Yes, I did not start drinking again. I have a six month off. I, I, this is a very long wind up to asking you because you have children who are older. There's a lot of Twitter competitors out there. Have they shown any resonance in your children's circles? Or are they still more on the TikTok side of things as you consider Twitter's future?
25:30 Speaker 01 Yeah, I think with that age group, it's definitely more like TikTok and even still YouTube. But in general, I mean, we've seen what a plethora of Twitter rivals pop up over the past six months or so, right? Like, how many? We've got, well, most recently Threads.
25:46 Speaker 00 Yep.
25:46 Speaker 01 Mastodon.
25:47 Speaker 00 Yep.
25:47 Speaker 01 Blue Sky.
25:48 Speaker 00 Blue Sky. T, T2?
25:50 Speaker 01 T, T who?
25:54 Speaker 00 That's rude. T2 and then post.news. And that's just the ones that I, that I can name offhand. The question really becomes, you know, how are these services doing? And where do we sit? Did you have an Instagram account before Threads came out?
26:09 Speaker 01 Mm hmm. I did, I do. And I don't have a Threads account yet. I admit it.
26:13 Speaker 00 Oh, why not?
26:15 Speaker 01 Well, one, I've been busy. And second of all, I, I still don't even, I still don't even know, like, how is it tied to my Instagram account? Cause like, I don't want my personal stuff out there, you know? Like, to me, I view, I kind of use Twitter mostly for professional.
26:32 Speaker 00 Yeah.
26:32 Speaker 01 Stuff. I mean, it's not all professional posting, but for the most part, Instagram is very personal, right? I've got family photos, things I don't want the whole world to see. So I haven't educated myself yet enough to know, like, what is the overlap between Threads and Instagram? And I'm not saying I won't do it, I just haven't gotten there yet.
26:50 Speaker 00 Yeah, yeah, it's not a bad, it's not a bad bit of hesitancy because it turns out if you make a threads account and you have an Instagram account, the only way to kill your threads account is to kill your Instagram account. So I don't know why that's the case, but you know, old Meta out there once again making things great for consumers. The thing about threads, though, and this is its absolute credit. It launched and grew, as we talked about on the Monday show this week. And I think really because they took a leave of TikTok's book and gave everyone a feed from the beginnings. You didn't have to kind of build it from zero like with Twitter. But then again, I was just thinking about how fast threads blew up versus these other services that are often still like invite only, like Blue Sky.
27:26 Speaker 01 Right.
27:27 Speaker 00 And I wonder if they're squandering the moment a little bit by not having a wider door or aperture into their service. Because threads proved that there was massive demand for something else, you know?
27:38 Speaker 01 I mean, they've topped 100 and 100 million users, right? Like in a matter of days.
27:43 Speaker 00 Yeah.
27:44 Speaker 01 Which is nuts.
27:45 Speaker 00 And they also marshaled a lot of like, just like well-known things. So that when you showed up, there was already a party going on. Like it wasn't just they gave you a feed. They had like celebrities and brands, which is apparently what Facebook is that now, I guess.
27:58 Speaker 01 Yeah, I will say this. I think that Meta or Facebook has gotten a lot of heat over the past year or two. I mean, especially Mark Zuckerberg. A lot of like criticism and oh, copycatting and things like that. In this case, it feels like Meta has actually done something right. And, and this is what I find most kind of interesting about all this. Like if the public battle between Mark Zuckerberg and Elon Musk, Mark Zuckerberg is actually looking pretty good compared to Elon.
28:29 Speaker 01 You know, it's like, you know, this is actually turning out to be, I think, an okay thing for Meta, which is a little bit of a surprise there. They actually seem to have handled this well.
28:38 Speaker 00 By Mark Zuckerberg looking all right, are you referring to his stature inside the technology community or the recent topless selfie he shared?
28:45 Speaker 01 Oh, no, no, no. I'm not looking at topless selfies. I'm talking about his stature, right? Like he's actually looking to be like sort of the more mature person in this whole competition.
28:55 Speaker 00 That's because compared to Elon Musk on Twitter, my six month old appears mature.
29:01 Speaker 00 I mean, so if you don't know, all right, we're short on time. I'm going to compress greatly here. Elon Musk likes to tweet. He's not particularly good at it. He's kind of boring. And if he wasn't the richest man in the world, or whatever, people wouldn't care. Anyways, he gets salty at times. This is part of the best part of his Twitter usage. And he called Zuck a cuck, and got community noted that there's no evidence that Zuck has been thus cuckolded. And if you don't know what those words are, well, you're probably too young to know anyways. Then he proposed a quote literal dick measuring competition with Zuck. And then throughout all this, they're both training in like martial arts, but Zuckerberg already had been. Anyways, they're not posting like, like shirtless thirst trappy photos.
29:41 Speaker 00 And it's all very stupid. Like, it's, it's, the discourse of American politics has gotten dumb, but this is somehow dumber.
29:48 Speaker 01 Right. I mean, come on. It's hard to believe. Like, you can't make this stuff up.
29:54 Speaker 00 I think there's
29:55 Speaker 01 Another cliche.
29:56 Speaker 00 Look, if it wasn't for cliches, you wouldn't have a leg to stand on.
30:01 Speaker 00 If it wasn't for cliches, which side of the fence would we, would we straddle? All right. I think there's a, there's a inverse correlation between maturity and net worth. Because, hear me out. The richer you get, the less of normal societal rules about decorum apply to you.
30:20 Speaker 01 True.
30:21 Speaker 00 If you're poor and crazy, you're crazy. If you're rich and crazy, you're eccentric. And you're defended by a panoply of things that are around you. So to me, we're just watching people who have had too much money for too long, have access to essentially community newspapers. And at least, at least it's engaging, maybe?
30:41 Speaker 01 It is. And I'm fascinated just in general by all this, this Twitter rivalry that's happening. To be honest with you, I know we have to go, but I can't tell many of them apart from each other. Like, I don't really see much differentiator. I know that everyone's looking for a Twitter alternative for various reasons. We'll see if Threads is able to continue this kind of growth over time. I mean, it's been a great, you know, start. We'll see how much people like it and use it.
31:06 Speaker 00 Well, I'm glad we didn't leave a loose thread in that conversation, but we do have to wrap up. Don't forget everybody, we hang out over on EquityPod on Twitter and threads, though we are just Equity on Blue Sky in that first name club. And Disrupt is right around the corner. It's coming up in September. We are going to be opening the show once again on the Builders stage, which is where I'm hosting. It's going to be me and Mary Ann. I don't know, do you think we're going to bring on a third? We could bring on another. Who knows? There might even be a third chart there, but it's going to be a lot of fun. We loved kicking off the conference last year. It was actually like super packed and people came and it was fun and we gave out pens. Yeah, it was a good time. But anyways, we're going to be doing a lot of IRL podcasting from Disrupt. So if you like any of the TechCrunch shows, make sure to come by and check that out. And I think that's it, Mary Ann.
31:49 Speaker 00 We're back on Monday, but in the meantime, I think we can say goodbye. Yeah, bye. Bye, everybody. Equity is hosted by myself, editor in chief of TechCrunch Plus, Alex Wilhelm, and TechCrunch senior reporter, Mary Ann Azvedo. We're produced by Teresa Locan Solo with editing by Kel. Bryce Durbin is our illustrator. And thanks to the TechCrunch Audience Development Team and Henry Pekervat, who manages TechCrunch Audio Products. Thank you so much for listening and we'll talk to you next time.
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