EP 13: An Interview with Keith Rabois on Why He Tweets and Miami Tech Week, Netflix Loses 200K Subscribers, and Even More Elon

(04:35) Miami Tech Week is just dangerous being so close to Coachella (08:18) Netflix somehow losing subscribers even though they raised prices and have 98 competitors (24:14) Elon Musk just buying stuff out of spite (29:57) A16Z’s new Accelerator (36:08) Keith Rabois interview and his hottest of takes Follow the show: https://twitter.com/cartoonavatars https://www.instagram.com/cartoonavatars/ https://www.tiktok.com/@cartoonavatars Follow the hosts: https://twitter.com/zck https://twitter.com/nikitabier https://twitter.com/loganbartlett Mixed and edited: Justin Hrabovsky Produced: Andrew Nadeau and Rashad Assir Executive Producer: Josh Machiz Music: Griff Lawson Reference Links: Netflix stock loss: https://www.cnbc.com/2022/04/19/netflix-nflx-earnings-q1-2022.html Elon Musk twitter funding: https://www.theverge.com/2022/4/21/23033445/elon-musk-twitter-bank-debt-commitment-letter A16Z Accelerator program: https://techcrunch.com/2022/04/18/andreessen-horowitz-a16z-start-seed/ Executive Producer: Rashad Assir Producer: Leah Clapper Mixing and editing: Justin Hrabovsky Check out Unsupervised Learning, Redpoint's AI Podcast: https://www.youtube.com/@UCUl-s_Vp-Kkk_XVyDylNwLA 🎥 Subscribe on YouTube: https://www.youtube.com/channel/UCugS0jD5IAdoqzjaNYzns7w?sub_confirmation=1 Follow on Socials 📸 Instagram - https://www.instagram.com/theloganbartlettshow 📱 X - https://twitter.com/loganbartshow 🎬 Clips on TikTok - https://www.tiktok.com/@theloganbartlettshow About the Show Logan Bartlett is a Software Investor at Redpoint Ventures - a Silicon Valley-based VC with $6B AUM and investments in Snowflake, DraftKings, Twilio, and Netflix. In each episode of The Logan Bartlett Show, we sit down with the people behind today’s most important startups and extract the tactics, lessons, and frameworks they’ve learned the hard way. Conversations span hiring to GTM, product, growth, fundraising and everything in between - collectively forming the ultimate playbook to make you a better CEO, investor or board member. Tap follow and enable notifications to stay ahead of the game.

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

• 0:03Logan Bartlett?

  Welcome to the 13th episode of Three Cartoon Avatars. I'm your host Logan Bartlett, and I am joined today by my esteemed co-host Nikita Beer and Zach Kukoff. How are we doing today, guys?

• 0:13Speaker 01

  Doing well. My sewer line was plugged today, so I had a plumber come to unplug it.

• 0:22Logan Bartlett?

  That's exciting stuff.

• 0:23Speaker 01

  I turned my house into a, essentially like a hacker house where we're building products and engineers are sleeping over. So it was sort of a crisis, but the crisis has been averted, and also my stock portfolio was destroyed today.

• 0:39Speaker 02

  Yeah, I love that I knew the stock thing going into this, but the plumber thing was like a fun adventure we all just learned about together for the first time.

• 0:46Logan Bartlett?

  Yeah, no, that's good. I'm glad you incorporated that. This is really the humanizing elements of Nikita Beer, that his sewer has been backed up all day. No, I really appreciate that, that level of honesty. So I guess, kind of a quick update before we dive into the regular scheduled programming. So, we've collectively been sort of talking and we've had a really fun time doing this over the course of the last, the last 12, 13 episodes or whatever. And we've really enjoyed having a bunch of guests on and having other people either talk with us or interview people. And so I think what we've kind of collectively decided is the format's going to evolve a little bit from, from here. We're thinking through a little bit of an evolved format that is probably going to be more rotating

• 1:28Logan Bartlett?

  guests that come on to co-host with us, as well as likely an interview once a week. This is sort of the first week we've, we've tested this out. You'll hear the Keith Rabois interview that I did in person at Miami Tech Week here at the end. So I think you're going to hear the, the type of format that we do. Just continue to evolve. We're going to continue to experiment from, from here. So it's been a ton of fun and I think we want to keep doing it, but it's going to be a little bit of an evolved and different format. And Nikita, I know you've had a bunch of time constraints as well, so maybe talk to people a little bit about what the last, whatever, three months has been for you and, and where, what you're up to from here.

• 2:06Speaker 01

  I've had a blast. I've gotten great feedback from like everyone that's Listened, I mean, sharing product knowledge, talking about these news stories. I'm about to be launching a product in about a few weeks. So I'm going to be sort of the guest star going forward. But I'm still excited to be part of it and watch this thing bloom.

• 2:28Logan Bartlett?

  What started as a joke, Nikita launching an app and a product, what we thought was actually not true. Somehow, we've grown up so much over the course of the last three months. He's actually, he's actually building something.

• 2:38Speaker 01

  To be fair, when the market crashed, I was like, I think I need to sell another app to Facebook.

• 2:47Logan Bartlett?

  That's good.

• 2:48Speaker 02

  I think people, we're going to miss having Nikita on every week, but I think people are really going to enjoy. We're going to have a bunch of different faces, but different voices on. And even so far, it's been a lot of fun to be able to bring on folks who are even more involved in the weekly drama than we've been. So I'm excited for the new format. I think people are really going to enjoy it.

• 3:04Logan Bartlett?

  Yeah, I've gotten some people that you've heard to agree to come on more regularly as well. So I know Paddy McCormick is going to do it. Zach Weinberg, who was on last week, who's actually blown up as a TikTok star a little bit. He, TikTokers get really mad when you criticize Elon, which, and crypto, which Weinberg did last week. And so we need to make sure he comes back for more of that type of content, getting canceled by 19 year olds on TikTok.

• 3:29Speaker 02

  I am happy that Zach is the other Zach Weinberg, the other Jewish Zach on the show. Is going to fall on his sword each week for the 19 year old mob. That's a pleasure to have him in class.

• 3:40Logan Bartlett?

  The rage bait comments that he's gotten, we just couldn't resist that sweet, sweet virality.

• 3:45Speaker 02

  He's uncancellable.

• 3:46Logan Bartlett?

  He is uncancellable. He is post cancellation. I think when you sell a company for $2 billion, you're in that position. But yeah, no, Nikita, we really enjoyed it. And you've obviously had a ton of insight into all the products. And so one of the things we want to make sure is we continue to get the founder and product centric kind of thinking and feedback. Obviously Zach and I don't have that here. And so we'll continue to incorporate people like that. And if there's suggestions that, you know, people we think we can hear on. We don't always have to have, you know, Jewish men in their late twenties, early thirties. So I think we'll diversify the ranks a little bit as well. So yeah, no, we're, we're excited to continue to experiment.

• 4:27Speaker 02

  I don't think Zach Weinberg solves that problem, but I love that we're trying to one day.

• 4:31Logan Bartlett?

  Yeah, Paddy is Irish, so I guess that gets us some of the way there.

• 4:35Speaker 02

  So Logan, how has Miami Tech Week been?

• 4:37Logan Bartlett?

  Yeah, so I guess we're recording this on Thursday afternoon and it's so far, I think officially it kind of got going on Wednesday. Last night was sort of the start of it. I sat down with Keith on Tuesday and so was able to hang with the Founder's Fun guys for a while. And then last night, Insight had a party, then Kraft had a party, then Lux had a party. I went to Ramp. Ramp had like a party for customers and a handful of their employees and so I did that. But it's been fun. There's a lot of VCs down here. There's not like one cohesive thing going on. It's sort of like, I think Miami Tech Week is a vibe more than it is anything specific to

• 5:22Logan Bartlett?

  like where you go or what you do. It's a lot of investors hanging out. But I don't know, I think people are just excited to see other humans again, like interact in mass with other humans. I think crypto's kind of ignored the pandemic, but it feels like this is the first real event for a lot of people. So it's been fun.

• 5:40Speaker 02

  I heard Vanilla Ice was at the Kraft party?

• 5:43Logan Bartlett?

  Yes, yes. Vanilla, I did not see that. I was gone at that point, but I don't know how they landed on that. If it's intentionally ironic, if it's not, I have no idea.

• 5:54Speaker 02

  Pre-pandemic, he was at like either Dreamforce or like some, he was like doing a bunch of tech stuff, making the rounds before COVID too. I feel like he's been a staple at tech parties.

• 6:05Logan Bartlett?

  I don't know if that's like really sad that he's doing this or like good on him, you know, at this point. I feel like this is kind of the business that Cameo has made happen, just at a larger scale, right? I don't know what happens though. I wasn't there. Like, once it gets past Ice Ice Baby, like, does he just keep doing it? Does he just loop back to different like versions of Ice Ice Baby?

• 6:23Speaker 02

  He does Ice Ice Baby, then he has Under Pressure, like all the samples thereafter.

• 6:28Logan Bartlett?

  Ice Ice Baby, Techno Remix. Yeah, I think it's all that. I have no idea.

• 6:33Speaker 02

  I will say, it's not sad for him, like power to him. You should get the bag. It's like sad that everyone in tech is so old that Vanilla Ice is like an exciting person to half perform.

• 6:43Logan Bartlett?

  Yeah, I think that's, well, it plays to the geriatric crowd that's in Florida pretty well. So I think like this is, this is hip and new. I saw a funny tweet at one point that was like, it's nice that the Super Bowl actually has, uh, finally has like modern artists that we know. And then it's like the person slowly realizing that they're old, right?

• 7:02Speaker 02

  Yeah.

• 7:03Logan Bartlett?

  That's kind of the way, it's glad we finally have, you know, artists coming to our shows that are culturally relevant like Vanilla Ice.

• 7:09Speaker 01

  Do you think that all these events are like, this is like the final event of the bull market? Uh, like I, I felt like the, like there's been an event like every two weeks in tech for the last six months. It feels like this like markets tanking, its valuations are getting cut. Like it's, it seems like the, uh, the kind of foolishness and, uh, crazy spending is, uh, is on the way out.

• 7:34Logan Bartlett?

  Do you think venture firms are going to stop spending 500 grand on parties with, uh, with Vanilla Ice in attendance? I don't, I don't know. If, I thought that was just a product of, of venture capital and that was the best way to get deals.

• 7:45Speaker 02

  You have to understand, Nikita, these people have like, well, not maybe these people, but a lot of people in venture don't really have a social life outside of tech. So like the idea that their venture firm can subsidize their social lifestyle is actually quite appealing, certainly not to any investor on this call, but to many other investors in the world.

• 8:02Speaker 01

  Yeah. Thank you to all the VCs who have subsidized, uh, the parties for the last 12 months.

• 8:07Logan Bartlett?

  It's a, you know, it's the way of giving back. People say VCs don't add value, but here we are. We're, uh, yeah, providing alcohol, food and, uh, nineties hip hop artists to, uh, to the community. So it's the least we can do. So one topic we wanted to hit this week was Netflix shares were down over 37% on Wednesday after the company reported its, uh, first subscriber loss in more than 10 years. So Netflix announced Tuesday after the market closed that they had lost 200,000 subscribers in the first quarter. And it's also forecasting a 2 million subscriber loss for the second quarter. So, uh, just to put this in context, about 700,000 of the subscribers that were lost were due to, uh, Russia and, uh, their, their suspension.

• 8:53Logan Bartlett?

  Of ongoing support of content there. So it would have been an ad of about 500,000 if you take that out. But just for context, Netflix previously told shareholders it expected to add 2.5 million net subscribers during the quarter. So 500,000 versus 2.5 million, if you kind of normalize this. During the same period a year ago, Netflix added 4 million subscribers. So this is a big, big deal. It obviously sent the stock tanking. You know, before COVID, Netflix was trading at $36 a share. It's currently down around 20, sorry, $215 a share. During the pandemic, over the course, when it had the big run up, it actually got above 700.

• 9:38Logan Bartlett?

  So it's kind of wild to see this business seems to be reeling a little bit from all the machinations in the market. And it's interesting to see them actually, the COVID darling that they were, they're actually in a worse place than they were prior to the pandemic. So Nikita, maybe give us your thoughts on Netflix as a product, where they are, what's gone wrong, where they go from here, all that stuff.

• 10:03Speaker 01

  Yeah, I mean, I've kind of not been that happy with the Netflix product for a couple of years now. I attribute like their slowing growth and consumer interest in their product to something that I call product decay. And that emerges from classic growth hacking that we do, you know, Silicon Valley companies do. Growth teams at these companies tend to run the show and they're incentivized to boost metrics that can have these sort of insidious effects. I mean, let's take an example, like their ranking of content is probably fixated like on overall watch time. But that content might be baity that actually performs well.

• 10:44Speaker 01

  Like there's two examples that I can find that I certainly don't want to watch, but I might click just to see what it is. And that's that show about like monsters dating sexy beasts. And then that silly reality like game show, The Floor is Lava.

• 11:00Logan Bartlett?

  And just to be clear, Sexy Beasts, just to give a little bit of the plot line here, but they, they, it's a dating show where each contestant dresses up in elaborate makeup in favor of their favorite. Beast and then they go on dates and go out in public together. So I don't know. I mean, to each their own, but I, I think sexy beast is a pretty riveting concept. Just to be clear, some people just call that dating and SF in general.

• 11:26Logan Bartlett?

  Sorry, Nikita, you were saying?

• 11:28Speaker 01

  So like, um, I think, uh, you know, it'll certainly boost the top line numbers, but, um, I think the, the, the problem is that it doesn't actually leave consumers satisfied with the product. And these sort of problems have plagued Facebook, uh, over the years, uh, as well. They, they prioritize, uh, kind of beady content and news feed. That certainly increased engagement, but it ended up crowding out posts from friends and family. And, uh, that ultimately created this whole crisis where users actually just stopped posting, uh, particularly in like influential and higher income coastal areas. And, uh, that led Facebook to create teams like MSI, which was meaningful social interactions.

• 12:10Speaker 01

  And they had initiatives like time well spent, which they try to get these like actual real posts from your friends back on the platform. And they're still digging themselves out of this, uh, situation right now.

• 12:21Logan Bartlett?

  Meaningful social interactions, by the way, or time well spent. Sounds like, you know, they hired some consultant to go in that like hasn't interacted with humans ever before. But on the, on the, on the Netflix point, like, what do you do from a product and content perspective? If you're Netflix, like, how do you get out of this flywheel?

• 12:38Speaker 01

  I, I think growth hacking is fine and it's, and it's necessary at those early stages of a product's lifecycle. It's how you get the velocity going and definitely how you make money quarter over quarter. But, um, ultimately like consumer product development is just as much art as it is science. And if you take Snapchat, they've leaned almost entirely toward that art, uh, side. And by, by simply building cool things that they think would be interesting to their core audience, these like coastal teens. Um, and so they're facing the, the exact opposite sort of problem. But for Netflix, I, I think they need to actually return to focusing on that segment of users. Uh, and just be intellectually honest around what the best experience for them would be.

• 13:22Speaker 01

  Um, right, right now, I think the, the friction to find like a highly rated movie is insanely high. Like, we all have, we've all experienced this sort of decision fatigue when we open the Netflix app. I like, I literally have to go to another app, which I use this app Just Watch to filter out by Rotten Tomatoes and IMDb scores. And what happens when I do that? I find a competing streaming service and watch it elsewhere. So it becomes totally commoditized. Uh, so I'm not opening Netflix first when I want to discover content. So they, I think they need to actually make it a little more utilitarian, uh, instead of just suggesting low quality stuff, uh, so that discovery takes place on their product.

• 14:03Speaker 01

  Uh, right now, it's, it's simply just a library. It was like the Renaissance of, for the media industry, the last 10 years, because Amazon and Netflix were paying, you know, huge amounts of money to have all this content produced. And everyone I know that works in production, uh, was totally booked, like, every day, week, working weekends, making a decent amount of money, too. Uh, and they, they just, and the supply of these production staffers was so limited that a lot of production moved to Atlanta, moved to Vancouver. Uh, so there might be some sort of bubble popping.

• 14:38Logan Bartlett?

  Yeah, I think what's interesting, so I, in full disclosure, one of our partners, the founder of Redpoint, uh, Tim Haley, is, uh, still on the board of Netflix. He made an investment, whatever, 22 some odd years ago. And so just give that as a disclosure. I actually don't, you know, know anything or, or whatever. But, uh, I will say what's interesting, Netflix has changed the tires while the car's in motion before, right? And obviously, they started as mailing DVDs, and then they went to content, then they went to, or, or streaming, uh, and then they made false starts. I think it was 2009, maybe, or 2010, with, uh, splitting those two businesses off. And they were going to have their streaming business and their DVD business, and then they wound down the DVD business. And now, then they went to syndicated or licensed content, and now they've leaned in on original

• 15:23Logan Bartlett?

  content. There isn't a back catalog for them, right? And part of this is, originally, the, the value prop for Netflix was there wasn't anything else like it. And a bunch of people enabled their success by giving them access to back catalogs, right? And so it's interesting that the theory was, hey, are they going to be able to change the tires while the car was moving and be able to build up this back catalog that had a big enough value prop that people would continue to subscribe? And also, they were kind of reaching the market saturation point where they started to increase prices as well, right? And so these two things have happened at once, along with increased competition, just in general, for net new content. So they're spending more on producing new stuff.

• 16:08Logan Bartlett?

  They have credible new competitors and they've lost their back catalog of stuff that like, if you originally signed up for Friends or whatever it was, right? All this stuff is now on, you know, a seemingly infinite number of apps. And so I wonder, it's going to take a while for them to catch up with, if ever, with the back catalog so that the value props there. Now, I do think it's a staple for certain types of people, just to have it. And there is a reasonable amount of great content on there. But I don't really see how they get out of this cycle that they're in right now, so long as HBO Max exists, so long as Disney Plus exists, so long as Hulu exists, so long as all those other things. And so I wonder if like, you know, for the, everyone's always said Apple makes the most

• 16:53Logan Bartlett?

  sense as an acquirer. I kind of wonder if like, that is a potential outcome here.

• 16:58Speaker 01

  It feels like Netflix's content feels cheap these days. And I think they're

• 17:02Logan Bartlett?

  Yes.

• 17:02Speaker 01

  Sort of been tarnished. And when they offered this catalog in like, you know, 2010, for 10 bucks, you got like 2,000 movies and they got it from the, I think they licensed it from the Starz Movie Channel catalog. But the market that they're fighting in today is so different from when they started. And to be fair, I think actually Netflix is a genuinely terrible business. They're playing in a market where their average revenue per user is the same as like an ad-based video network like YouTube and TikTok, but they're paying extraordinary prices for that content.

• 17:42Speaker 01

  And right now, what they're doing is they're riding between this like highbrow, high-quality experience like HBO and TikTok content. Like, so they're, they don't actually have a clear differentiated product they're offering anymore. And they're kind of in like no man's land is what I, they're creating hour-long junk food when you can get the same dopamine hit from watching a 15-second TikTok video or YouTube, which is free for ByteDance and Google. So I, I think the, like, as a product person, when I look at Netflix, like, the funnel to get value is extraordinary. Like, you have to literally sit at your TV, pull up the app, and then watch an hour of, like, some Flora's Lava video.

• 18:25Speaker 01

  And, and you could have just gotten that by opening your phone and watching TikTok.

• 18:29Logan Bartlett?

  Now, I think that's a great point, and that's, it's, it's interesting, right? They've been, at different points in time, pretty arrogant about who their competitors are. Like, in 2017, they said, "Sleep is our competition." In 2019, they said Fortnite was our biggest competition, right? And so they've been pretty arrogant about who they're competing with. But, you know, we saw Quibi fall down this, into this predicament of, in a world of everyone's a creator, right? And, and the near-infinite amount of content that you can get that's interesting scrolling on your phone, and you don't need the, the production value of high-quality lighting or sound or whatever, all that stuff. Like, you're willing to accept the video as-is, right? Are they caught in this middle ground where HBO's a premium product that what they stand

• 19:13Logan Bartlett?

  for is gonna be, you know, high-quality? And TikTok is the long tail of everything, and it allows the masses to come up with what's most interesting and most entertaining? So from a pure, like, time-competition standpoint, I just think both of those are much stronger value props.

• 19:30Speaker 01

  I just don't know if it's that big of a business. Like, this background noise where you unplug and you kind of, you're just sitting like a vegetable and watching, like, that's like, it's a, it's an important part of our lives. Like, that's what people do. But I think you, you get a lot of that from passively doing it on, on TikTok and these other social networks. So I, I don't know if, like, an hour in front of your couch, like, is, is really, really merits the, the price and all that for that sort of content.

• 20:01Logan Bartlett?

  And I wonder, I mean, to some extent, right, like, we're talking about a company that was founded in 1997, that got included in the FAANG stock for whatever, whoever came up with that, gave them a very nice glow up to include them with everyone else in that, right? And so this could just be the maturation point of, hey, they've done a great job. They've basically had two acts already, which is far more than any company, you know, most companies barely get one, let alone two. And now they're on their third act of like original content, which is, it's amazing, right? They went from the DVDs to, to the, you know, the streaming app to their original content. It's amazing they've gotten this, but I just wonder, like, it's, it's clear that that is a value prop, but I just wonder if we're at the saturation point of the people's willingness to pay for that.

• 20:45Logan Bartlett?

  And you're seeing as they increase prices, you're not seeing the, the stickiness that you once did, right? You're seeing churn because clearly there's alternatives to this passive lean back, you know, almost like pressing something for the radio station. There's a price sensitivity there that clearly as they increase, there's increased churn coming with it.

• 21:05Speaker 01

  I think that we should give them credit for like pulling it off twice. But also keep in mind, this company was created during like the birth of the social internet, like at least the, the streaming business was. And they totally missed the opportunity to make any of this a social experience that would drive stickiness. Like, uh, like if, if our, if we knew our peers were watching stuff, we would have to like keep the subscription going. But right now, most of the discovery around like the, the social part of Netflix happens on third-party networks, and it's not very intentional. Uh, so I, I think they had this chance, something that HBO certainly couldn't do.

• 21:45Speaker 01

  Maybe Amazon could have done, but I, I think Amazon Prime is just a, a loss-leading business to keep you on Prime.

• 21:52Logan Bartlett?

  Nikita, I agree with your sharing experience thing, right? Because we're all watching these things, the social experience. We're all watching these things in different times, right? And they did this one big drop and you watch it yourself. But one of the great things about television in general was the shared experience, right? And right now, like, the only things that we have shared experience around are like presidential debates. It's like sporting events, it's award shows. And we've lost this like, and then it was kind of Game of Thrones for a little while. But we've lost this like connectivity of everyone on Twitter talking about the same thing at the same time or knowing what other people are watching. And Spotify, Spotify has captured this from a music standpoint, right? Spotify clearly, if you look in the right hand of what they're, what they're doing, it's more of a social experience that they've, they've recognized.

• 22:36Speaker 01

  You're not, you're not opening the app and seeing anything. I think this is like, it's certainly happening, but the level that they could be executing, they're, they're far from that. I mean, the biggest thing they've done in app that actually even shows any kind of social proof is those labels that they added in the last couple of months that say like, top, top one in the US currently. Like, that is the furthest they've gotten and they literally have your identity. They, at one point, they had Facebook sync. The execution was really poor when they streamed everything that you watched to Facebook. But there has to be some version of it that could make it actually like, could, the content could have social proof.

• 23:20Logan Bartlett?

  Yeah, like, why can't I know that Nikita's on season two of Sexy Beasts already, watching like the, you know, the second episode? Like, why can't I know that? Why can't we be friends?

• 23:28Speaker 01

  I mean, they, they should like, it's definitely a tricky thing to execute, but I think there's a way to navigate the privacy implications and still capture the stickiness of like, your friends are all watching this. Don't cancel your subscription yet because you're going to be left out.

• 23:44Logan Bartlett?

  I mean, I think it's just clear they've reached the maturation point for whatever their market is. And I don't like, I'm not, it seems like Reed Hastings a great, a great leader and that he's turned, you know, he's been able to continue to pivot this and evolve. So I don't mean to take anything away from them. It's just now a different business. It's not a growth stock in the tech world anymore. Like, it's, it's kind of a mature, becoming a mature media company. And that's, that's fine. It's just valued very differently than what a high-growth tech company is. Elon Musk was in the news as he seemingly always is, but he laid out his plan for his takeover

• 24:23Logan Bartlett?

  of Twitter. In an SEC filing, he said it would be $25 billion in debt and another $21 billion in personal equity. The funding is going to be provided through two debt commitment letters from Morgan Stanley's senior funding, in which the bank commits to offer loans worth 25 and a half billion. Notably, I guess Elon didn't list any equity partners in there along with him, but it came out that he is talking to Tomo Bravo about a potential pairing up here. So it's interesting. I mean, the story's been ongoing for the last, whatever, 10 days at this

• 25:02Logan Bartlett?

  point, two weeks. Last week, right before, right after we aired, we talked a little bit about the poison pill with Dan Primack, and they actually implemented that as well. And so there is some protection against a hostile takeover for Twitter's board. But interested in your guys' take, I didn't think it would actually get this far that he would have funding set up and funding secured, as he once upon a time famously said. Nikita, what are your thoughts here? Did you think we would end up at this point? Where do you think it goes from here?

• 25:35Speaker 01

  I think Elon's public persona almost pigeonholed him in this position where he has to now buy the company, or else it's going to be such a big blow to his ego. So I don't think he can back out from where he is, where he's standing now. He's literally going to have to find some private equity company, whether it's Tony Bravo, or I think Apollo was the other one that he's working with. I think he's going to have to find some way to buy it now. And I think there's no way they'll be able to stop him. I mean, even with the poison pill, they're talking about the tender offer.

• 26:09Logan Bartlett?

  But the tender offer, they can still block it, right? The tender offer can still, like, it's sort of a game of chicken at this point. I think the poison pill in place, like, can make it impossible to acquire, but it would be a really bad look if they ran it. Tender offer and the shareholders said, hey, we want to go with this. And then ultimately the board decided not to do it. Chamath on the all in last week did a, did a really good job kind of outlining the history of the poison pill. The one thing that they didn't talk about was the notable example of Yahoo and Microsoft. So this happened in, in February 2008, Microsoft placed a bid on Yahoo for $45 billion.

• 26:51Logan Bartlett?

  They put in a, a Jerry Yang, who's the CEO of Yahoo at the time, put in a poison pill to block from a takeover. When ultimately they weren't able to agree on price, the stock dropped 25%. And ultimately Yahoo was sold for four and a half billion to Verizon in 2017. So we went from a $45 billion offer to one 10th of that nine years later, right here. And so that's the example, the counter example that these guys are up against of, hey, this really can go south and the board could act in a very myopic way that doesn't prove to be very successful. And so I think, and by the way, about that, it was half stock, half equity, or sorry, half cash, half, half stock.

• 27:34Logan Bartlett?

  And so if you look at that today, that was whatever 22 billion of Microsoft's stock. If you held that, that would be $220 billion worth. And obviously who knows, like they, they wouldn't have actually held, but it's just insane. Like you can destroy a ton of value, right? And in thinking you're acting in the best interest of the shareholders.

• 27:54Speaker 02

  Yeah. I mean, the one, I think the thing that's interesting about this whole Elon situation still is he, Elon never learned or doesn't care to learn, I think to his credit, like the act of seeming serious. Like he's very good at accomplishing things clearly, like look at the track record he's created so far. And yet with the way he speaks purposefully, by the way, and the way that he interacts in the world, I think is, doesn't signal to the Wall Street establishment, to the media chattering class, that he's a serious contender for many of these things. And so I think we are seeing is like this weird cognitive dissonance where people are watching him get more and more serious and closer and closer to be able to force the issue in a real way, but still feeling intuitively like they should be objecting or they should be dismissing it because it's coming from a guy who likes to post 420 memes on Twitter.

• 28:40Speaker 01

  Yeah, he definitely doesn't talk like your typical billionaire, I think.

• 28:44Logan Bartlett?

  Well, in typical Elon fashion, I guess, all this stuff, I mean, it was a holiday for him on 420. So it seems like, you know, I don't know if the timing of all this is just serendipitous, but he, uh, he was, yeah, it seems like this is gonna continue to go on. I don't think we've heard the end of this for the next weeks, months. I have a feeling that we're gonna be talking about this for a long, long time, so.

• 29:05Speaker 01

  Are you guys Twitter shareholders?

• 29:07Logan Bartlett?

  No. Tiny.

• 29:09Speaker 01

  Okay. I think just part of it, the part of the problem is that, uh, a lot of people haven't internalized that the, the tech bubble of like COVID has popped. And so they're still attached to that, like, I don't know, $77 share price. Uh, so the $54 offers just feels lower, uh, or feels too low. Uh, and I mean, I think realistically though, with inflation, every like, uh, all, uh, kind of long duration types of tech plays are probably priced fairly at this point.

• 29:42Logan Bartlett?

  Yeah, Twitter only needs to look at Netflix that was trading at $700 at one point during the pandemic and now is trading at whatever, $200 to know that maybe they shouldn't be holding themselves to the high watermark, uh, of what was their 52 week high or whatever happened in the pandemic. Uh, another topic we wanted to hit, Andreessen Horowitz, uh, announced this week that they were launching an accelerator called, called Start. So for more than a year, A16Z has quietly piloted its own take on an accelerator for early-stage entrepreneurs. Um, in exchange for a, as of now, unannounced percentage ownership, Andreessen Start is going to offer up to a million dollars in venture capital. Uh, the checks are coming out of Andreessen's $400 million seed fund that closed in August 2021.

• 30:26Logan Bartlett?

  Uh, the areas they're gonna focus on are consumer, enterprise, fintech, games, other, and then, uh, I thought, interesting, American dynamism. Uh, so there's no standard deal that's gonna be in place. They're gonna negotiate separately with each startup. Uh, they're potentially going to scale up and down as they, as potentially makes sense for them. And, um, yeah, so it's interesting, uh, I guess. Zach, what are your thoughts on why Andreessen would do this? Sequoia obviously announced something that was comparable, uh, a few months ago, I guess. So what's your opinion here?

• 31:00Speaker 02

  Yeah, I mean, look at what Andreessen is doing here, what Sequoia has done with ARC, which was their programmer starts in India even before that. Now, I will say what's interesting about a lot of these programs is even if they only fund whatever it is, 10 or 11 companies per cycle, they still get access to via the application process, hundreds, if not thousands of people who will likely apply to this, right? So if you're Andreessen or Sequoia, even for the limited cost of doing 11 of these deals, if you could have a relatively emerging investor, junior investor comb through a number of these applications, you could actually probably see a lot of the same cycle of folks who would go through YC pretty early in that process before they've gone through YC as well.

• 31:41Speaker 01

  I think the target of their audience, and from what I've heard through the grapevine from colleagues, is that they've been proactively reaching out to a very specific type of founder, which is like these experienced tech executives, like chief product officers, kind of senior product managers at sort of the big tech companies. And it seems to me like they're effectively like scaling out an EIR program. And that seems to be kind of the big point of differentiation from YC, which, you know, takes bets on those kind of young and foolish college dropouts or junior Facebook software engineers. I don't know if actually that's

• 32:21Speaker 01

  going to lead to better outcomes or returns. I mean, probably, because at least these people know how to manage teams, they know how to operationalize a product development cycle. They probably won't be as gritty, they won't have the same level of grit. But so I think for them, like, for these types of founders, offering a million dollars is like a nice cushion, like, because they've been fantasized in their previous roles at these, you know, big tech companies, and they've been afraid to take the plunge. I've heard this in private conversations, like, what if I can't raise money? And I've always told them, like, look, it's easy to raise money, but even raising money is the easiest part. It's hiring that's

• 33:06Speaker 01

  the challenge. And so it gets them past that mental block. And so I think that's why it's an attractive proposition. And, I mean,

• 33:17Speaker 01

  They, you could sort of like, I feel like I could approach any firm and I could probably get some sort of check from them to get started. But I think most people actually can't really internalize that without it being put on a blog post saying, "We will give you $1 million."

• 33:31Speaker 02

  I mean, I will say like, listen, we know that former CPOs, former VPs of, you know, lighthouse companies in a given industry tend to start interesting startups, but we know that as often as those folks build great businesses, they equally as often, probably if not more so, build businesses that tend to struggle. Like, the challenge I would have is if I'm, you know, the CPO of any major unicorn, right? And the difference between me spending the next 10 years on a company, or me not spending the next 10 years in a company, is a million dollar check? By the way, a million dollars is a lot of money. I certainly don't have a million dollars in cash, okay? So I am not throwing stones out of my glass house on this one. But I'm also not a VP or a C-suite executive from like, a superstar, you know, deck of

• 34:15Speaker 02

  corn company from the last couple of years. If the million dollars is really what flips you from, "I'm gonna stay in my relatively cushier job," or "I'm gonna go be a really early-stage gritty founder," I sort of question your commitment to doing it for the next 10 years.

• 34:30Speaker 01

  Well, they were very specific in their language on their blog post. I think they have one line in there where like, "If you haven't left your day job yet, consider applying." So I think they just need to, they need to like, they need to market to that type of segment of people. And I don't know if they'll actually end up building great companies. At least, Andreessen has effectively also been doing this in the background before this program existed. At least all, like, my friends that, at Facebook, that ultimately went to start companies during COVID and after, they all went, started with Andreessen.

• 35:13Speaker 01

  And part of it was, I think they didn't know how to pitch, and Andreessen was sort of accommodating around that.

• 35:18Speaker 02

  Yeah, I mean, there's a ton of like, you know, I hate to say it like this, but there is a ton of alphas of VC, taking somebody who's super smart and just didn't spend 50K to hire, you know, Fourth and King to design their deck, or whatever, they're charging 100K now, I don't know. And being able to like, help them articulate the vision for their company and invest really early, versus waiting to only look at the companies that already have hired the deck designer and that, you know, have workshopped their pitch within an inch of death.

• 35:44Speaker 01

  It's all a learnable skill and I think that once you as an investor acknowledge that, I think then you can start looking past it to see is there something there.

• 35:55Logan Bartlett?

  Andreessen Horowitz should be careful if they're gonna fuck with YC, you know, Breslow, Breslow got knocked off his throne by, by, you know, putting his hand in the wrong, in the wrong bin or whatever. So I would suggest they proceed with caution here. All right. So what you're going to hear next is a interview that I did with Keith Rabois at Miami Tech Week. Obviously I am not a professional interviewer. So Keith and I are definitely friendly and so it's a little bit of just a casual conversation. We went into a bunch of different stuff which you'll, you'll hear and yeah, he's, he's never short on opinions and so definitely a fun conversation. Excited for you to hear it. Thanks everyone for joining. I'm here today with, with Keith Rabois. We are here for Miami Tech Week. So I figured we'd do it in person. Thanks for doing this Keith.

• 36:39Speaker 03

  Welcome to Miami.

• 36:40Logan Bartlett?

  Yes. I, so for Keith and I are friendly. I, whatever the line in between that I get him to do this, but also not the line to his, to his very fun birthday parties that I've heard a lot about. So whatever, whatever that middle group is, but we also share an investment in, in Ramp together.

• 36:56Speaker 03

  Yeah. So at least you picked a good company.

• 36:57Logan Bartlett?

  I know, I know. Well, I need you to filter more of those my way. So yes, we are here. We have quite a contingency for Red Point down this week. We're excited to see what, what is, I guess this is the second Miami Tech Week?

• 37:09Speaker 03

  It is. So Delian, my colleague at Founders Fund, started Tech Week last year. He really wanted an excuse to move his younger friends to Miami.

• 37:16Logan Bartlett?

  Yep.

• 37:17Speaker 03

  And so we created Tech Week as a way to overcome the inertia and get people to visit Miami. And then this year we've boned it out like 10x.

• 37:24Logan Bartlett?

  I, we were actually invited to a closing party for Miami Tech Month. So now it's, it's turning, it's really, there's a sprawl going on here.

• 37:31Speaker 03

  There is between Bitcoin, NFT Week. Yeah. Yeah. Every, every, everybody in tech is here this month. Everybody who is anybody in tech has been here this month.

• 37:39Logan Bartlett?

  The, and then I guess FTX is next week in the Bahamas and that, I mean, that's like a, you know, whatever county of the, of Miami.

• 37:45Speaker 03

  Well, then we come back with F1. Ready for F1?

• 37:48Logan Bartlett?

  Which is apparently like the hottest sports take. I was talking to some of my friends that are like huge sports guys and they said it's just going to be insane trying to get.

• 37:54Speaker 03

  The hotel, uh, the hotel rates for the year are never higher or have never been higher than they are for early May, which is, you know, past the peak season of weather. So it's going to be an epic event in Miami.

• 38:06Logan Bartlett?

  Is this the first time they've done that or is it?

• 38:07Speaker 03

  Yeah, this is the first time Miami's hosted an F1 race, but it's going to be incredible.

• 38:12Logan Bartlett?

  It's actually fascinating, this drive to survive thing. It's such an interesting, taking this like little niche sport and blowing it out and now Miami leaning into it.

• 38:19Speaker 03

  Miami's leaning into it. Vegas just announced they're going to do a nighttime F1, which will be super exciting, but everybody's coming here for that weekend. Um, it's going to be equivalent to our Basel.

• 38:28Logan Bartlett?

  Yeah, wow. Uh, so obviously you've, uh, so you moved to Miami in December?

• 38:33Speaker 03

  December 10th, 2020.

• 38:36Logan Bartlett?

  2020. So we're, we're what 15 months, 16 months at this point. Uh, so you, you, I know you've told the story before, but the criteria you were thinking about in picking a city, you were fed up with the Bay Area to say?

• 38:47Speaker 03

  Yeah. So we were fed up. My husband and I were fed up with, uh, the COVID restrictions, the lockdown, the crime, the homelessness and the taxation, the regulation. And our diagnosis was everything was going to get worse before we'd get better. And we didn't want to sit through the curve as, you know, waste years of our lives as everything was getting worse before, you know, one day there'd be like light at the end of the tunnel. So we started filtering cities of where we can move to both professionally and personally, both have founders fund and internally in our family. And our family criteria was simply warm weather, access to an international airport, cause a halt in food and, uh, shopping in a Barry's bootcamp, just apply in a, a, a tax rate below 4.5%. You apply those five criteria and there's no cities except Miami in the US.

• 39:30Logan Bartlett?

  And, uh, and then the big other one was international airport, right?

• 39:34Speaker 03

  Yeah. International airport was pretty critical, uh, partially so people could visit us founders, et cetera, and partially because I do have to travel.

• 39:42Logan Bartlett?

  Yeah. Uh, and that, that's the one that, uh, uh, I, my family's all from Nashville and, and Nashville is near and dear to my heart. And, uh, yeah, I think that was where it seems like it, it worked out to your, to your benefit, to Miami's benefit, all that, but what could have been, uh, in some ways if Nashville.

• 39:56Speaker 03

  Nashville was disqualified to the founders fund list explicitly due to the lack of international airports.

• 40:01Logan Bartlett?

  Yeah, that's a bummer.

• 40:02Speaker 03

  Austin too, in some ways really doesn't have. International Airport.

• 40:05Logan Bartlett?

  Yeah, Austin's an interesting one because they were such a it was it was like kind of the third or fourth tech city for so long and it feels like they kind of flubbed.

• 40:12Speaker 03

  Oh, yeah. No one prominent in tech has moved since I announced I was coming to Miami.

• 40:16Logan Bartlett?

  Is that right?

• 40:17Speaker 03

  Yeah.

• 40:17Logan Bartlett?

  You're capturing that outflow.

• 40:18Speaker 03

  Oh, absolutely.

• 40:19Logan Bartlett?

  It's a zero sum opportunity between there. It kind of is.

• 40:22Speaker 03

  Well, I don't know if it's zero sum, but strictly speaking, there are people who have more and less influence, people are going to be more and less successful, and I want 99% of them here.

• 40:31Logan Bartlett?

  Yeah, that makes sense. Now, how do you think about I feel like it's weird. I was before we were starting. It's a weird straw man of like the San Francisco advocate or supporter, which there are some still out there, believe it or not, that died in the wall. I am I am not that. I think San Francisco has a has a role in the overall tech ecosystem. But how do you think about like the public drawing the people to Miami? And is it is it at the expense of San Francisco? Is it at the expense of other cities? How do you sort of think about where San Francisco is today?

• 41:00Speaker 03

  Well, I think San Francisco is the next Detroit. I think the writing is on the wall and you'll look obvious in hindsight, everybody be like, well, of course it's Detroit. But right, Detroit took 10 years to fall apart. It was the epicenter of American business in the United States for 20, 30, 40 years. And then it fell apart within a decade and it's taken 30, 40 years to rebuild and that's going to happen in the Bay Area. So fundamentally, right now, the way I think about Miami is Miami is the future. So you can either be part of the past for the future. And some people opt in to be part of the past. They're old, their age, their brain doesn't isn't that flexible anymore. And there's people who are embracing the future and they're all moving to Miami.

• 41:33Logan Bartlett?

  I'm going to get a hard time for not pushing back on some of these things and I want to I want to qualify.

• 41:38Speaker 03

  You should push back because I'll give you evidence.

• 41:40Logan Bartlett?

  No, no, no, I don't. I don't actually don't even believe any of the arguments I would actually have. I actually kind of on your side with a lot of these things, but I no, I think it's, yeah, I mean, I think the proof's in the pudding now. And so so was the original mission for Miami Tech Week and doing this whole thing together from Delian's mind? Was it to get was it to convince people that were kind of Bay, I mean, obviously other cities as well, the Bay Area native, to see the light at the end of the tunnel?

• 42:05Speaker 03

  The best metaphor I'm going to borrow from someone else is Miami is like an addictive consumer app. And the problem with a new app for consumers, you have to initiate that download. Like until you get people to try your app, you have no idea of convincing them about the engagement, the quality. So a lot of people have never been to Miami, especially from California. New Yorkers have always been to Miami for a variety of reasons. But a lot of my California friends had never been here. So we needed to create an excuse to overcome that inertia. And then when people come here, they're very pleasantly surprised. They see most, most arresting experience to start is people are happy. That was the one thing I didn't realize when I moved here was how happy everybody would be. You go to a coffee shop, you go to a restaurant, you go to a bar, you go to Barry's Bootcamp. Wherever you go, you will find happy people inevitably. And that's made it easy to layer on new people because people want to be around.

• 42:50Speaker 03

  Happiness is contagious. And so people want to be around happy people. I'll tell you a quick anecdote. I had a friend of mine in technology, visit me last June, uh, from North Carolina, where he had relocated to his family during COVID. And we went to dinner and I told him how everybody here is happy. And he kind of, you know, smiled at dinner. And then I took him to a housewarming party of some friends of ours who had moved to New York and introduced him to 30 people at this party. And so we were driving home after dinner and he says, he looks at me and he says, you know what, I didn't believe you at dinner at all, but every single one of those 30 people I met at that party was, was happy.

• 43:19Logan Bartlett?

  Yeah. And you're like, is it drugs? Is it the weather?

• 43:21Speaker 03

  It's definitely not drugs.

• 43:22Logan Bartlett?

  Yeah, yeah, exactly.

• 43:23Speaker 03

  Not at my party.

• 43:25Logan Bartlett?

  I, uh, well, we're in the founder's office and, uh, I've heard it colloquially referred to as Miami Keith, because, uh, everyone said, now you're in such a good mood walking around here.

• 43:34Speaker 03

  Yeah. I mean, well, it's impossible. I mean, sunlight, you know, vitamin D, stuff.

• 43:37Logan Bartlett?

  Totally.

• 43:38Speaker 03

  It contributes to it. There's lots of research behind that, but happiness is absolutely contagious. So I once interviewed Patrick Carlson at the CEO summit for Coastal Ventures. And I asked him, how do you have a culture at Stripe where everybody's happy? Cause everybody I knew at Stripe was happy. And he said, I don't do anything. I just hire people who are already happy. And so sometimes, you know, you filter them, right? So there's some of that, but yeah, you can't come here and not be happy. And so my thesis was originally was, people are like, how are you going to get engineers to move? That was a big critique of like Miami. I was like, engineers are people. Humans have been humans since Shakespeare. So the same things that appeal to humans are going to appeal to engineers. I just need to clarify that, communicate that, amplify that. And we'll have all the engineers here and they are.

• 44:19Speaker 03

  So I have a, I run a company as CEO while I'm investing and we have now 40 engineers. 75 to 80% have moved to Miami. We could easily double that engineering team in the next quarter or two if we want to. We'll have to see whether we need that many engineers right away. But fundamentally, we go to New York, we go to Chicago, we go to LA, and we go to the Bay Area. We tell people, you're going to be happy and you're going to be professionally challenged. Yep.

• 44:45Logan Bartlett?

  And so the Miami, like, in willing it into existence, which I think you and Delian have done that. Like, is it, is it kind of a pet project? Is it because you'll be at the nucleus of this and therefore it's great? Investment opportunities will come out of it. Like, how do you actually think about willing all this into?

• 45:02Speaker 03

  I think it's like starting a company. It's no different. When you start a company, everybody around you thinks it's ridiculous. It's never going to work. They have all the criticisms, all the reasons it won't work. And then you have to overcome inertia. And inertia is not your friend and time is not your friend. And then you have to find ways of overcoming that inertia. And then eventually you get momentum and the network effects again. So when I first moved to Miami, I went to a dinner that Sunday night with the mayor and like about 13 people. That was the entire successful version of Miami in tech. Yep. Now, and I did handcraft, like every single person I wanted to move here was like handwork. I'd have them stay at my house. I'd entertain them. I'd put a program of things to do and test out Miami. Now, people want to move to Miami. I don't have to do anything. There's such a network of, I haven't been invited to your house. Thousands of people.

• 45:47Speaker 03

  There's literally thousands of people here, hundreds who've been very successful in tech. So, yeah, I may help connect the dots here and there. Or there might be someone who's so strategic, I might use a little bit of my time. Yeah. To help, you know, navigate Miami for them. But that's it. And this is just propelling. And like I, I had a birthday, my birthday is in March, so I had a birthday party. Already three people, March 17th is my birthday. Three people from that birthday party have already bought a place in Miami.

• 46:14Logan Bartlett?

  Well, specifically, I've heard your birthday parties are a really good time. So it's not totally surprising.

• 46:19Speaker 03

  They're boring as hell, but they're a good experience for people to come to visit to Miami.

• 46:22Logan Bartlett?

  Yes, that's exactly right. Well, it's, uh, yeah, I'm excited for, I mean, we're, so we're recording this on Tuesday. We have, uh, it really is picking up, what, Wednesday, Thursday, Friday, Saturday of like all the events and stuff. But it really is stacked in. I mean, it's every. It seems like someone made the joke that's a lot of VCs, but I actually, I mean, I know a lot of operators as well that are flying in for the event or already here in the ecosystem.

• 46:43Speaker 03

  So I'll give you my radical theory behind the Miami movement that I can now prove empirically was the correct thesis, but a lot of people disagreed with me initially. So my thesis was having studied Silicon Valley, been old enough to have actually worked with the people who built Silicon Valley at the challenge of their career as I was starting mine. And then having read everything about the history of Silicon Valley that could be read. I had a specific view about what made Silicon Valley Silicon Valley, and I said, I'm just going to recreate that in Miami. And my diagnosis was the key to Silicon Valley was actually the investors. It was a set of people that had a very different risk appetite that all co-located. And that's what made Silicon Valley. It wasn't Stanford. It wasn't the weather. It wasn't this counterculture. That's all nonsense.

• 47:27Speaker 03

  I, so the first thing I did is I'm going to move the investors here. I'm going to move angel investors. I want to move VCs. If you look at my goals that I announced when I moved here is I want five competitive firms to founders fund, open offices in Miami in the first year. I want the VCs in the ecosystem of angel investors to be the best possible place in the planet for them. And the founders will move here secondarily. And that's exactly what happened. Now, the reason why I say I can prove this theory. This is a great new book written about the history of venture capital called Power Law. And he argues this thesis perfectly. And so now I have a complete book to give people that don't believe in the key hypothesis. But I've been running this playbook for 16 months before the book was published.

• 48:05Logan Bartlett?

  Totally. I was, I was actually annoyed when it came out because I, I, I think one of the things I had done was piece together a lot of that stuff. And you really have to, I mean, it was like a pretty onerous process of like going to old Don Valentine interviews or like watching, you know, YouTube's clips of him speaking at Stanford. Or like Cal has a big resource of information about that stuff and he packaged it up in such a like easy, consumable way.

• 48:27Speaker 03

  It's a great book. I highly recommend it to anybody interested in both entrepreneurialism or venture capital. But yes, specifically, I was lucky enough that when I started my career in Silicon Valley, I got to work with Peter Lamont. I got to be on the board with Dick Kremel. So I absorbed a lot of their history, you know, through that experience. And then, you know, 22 years of doing. Doing it myself, basically pieced together all these pieces. So I didn't have to go backwards too much. There was maybe the first generation of like the Trader's Eight National Semiconductor. I didn't, I didn't know them, but the next generation from I didn't know Don, you know, etc. Next generation I got to meet and get to work with, which is really exciting. That's why I had this view in the back of my head of what really mattered was different than what people reflexively were articulating.

• 49:07Logan Bartlett?

  Totally. No, that's interesting. It's, uh, yeah, I'm excited to see all the people that come through. It seems like, uh, there's a very loud group of, uh, it's all the very online people that are know or definitely here. And then there's like a long list of people that are like not broadcasting it, but are also definitely coming through.

• 49:23Speaker 03

  Oh yeah. I mean, like last night was the first night and I was at a dinner and then a party and ran into a ton of people that are not broadcasting.

• 49:30Logan Bartlett?

  Yeah.

• 49:30Speaker 03

  Their year that are very successful and very interesting.

• 49:32Logan Bartlett?

  Totally. I just bumped into, uh, one in your office.

• 49:34Speaker 03

  That's true.

• 49:35Logan Bartlett?

  For a meeting. Yeah. Yeah. He's, he's definitely not going to publicly proclaim it, but we'll, uh, yeah.

• 49:39Speaker 03

  Well, that's he, he's not going to have a choice because the founders he's working with are going to post a photo of him here.

• 49:44Logan Bartlett?

  Oh, yeah.

• 49:44Speaker 03

  Later today.

• 49:45Logan Bartlett?

  Yeah. Okay. So there's actually going to be evidence of it. Uh, well, that's good. You moved out to San Francisco in ninety?

• 49:51Speaker 03

  Uh, two thousand.

• 49:52Logan Bartlett?

  Okay. I thought it was before that. Uh, and where are we? What is this remind you of right now, uh, in Miami?

• 49:58Speaker 03

  Well, other people have told me that have very high fidelity experiences that it's more like New York two thousand eight. I've heard this from a lot of people who actually built New York technology in two thousand eight. So I wasn't there, though. I participated. I grew up in New Jersey and New York and, you know, lived in New York. So I understood it, but I think that's the best metaphor. The venture metaphor is we're like a series B company.

• 50:18Logan Bartlett?

  Yeah.

• 50:18Speaker 03

  We went quickly from C to series B. Now we have to prove that we can scale this.

• 50:23Logan Bartlett?

  Yeah. Well, what do you think in 10 years? What is the geographic dispersion look like? You know, twenty thirty two of, uh, dollars from venture. What's the split?

• 50:31Speaker 03

  So, so I don't care what mediocre venture capitalists do, but I care what we do at Founder's Fund. So the criteria I set was going to be. Our new fund should have equal dollars allocated to Miami in the entire Bay Area.

• 50:44Logan Bartlett?

  Wow.

• 50:44Speaker 03

  So in the last fund, and this is looking backwards, so a lot of bias here. We were 24% Bay Area and 9 or 10% Miami. And I only moved here halfway through that fund cycle. So we're almost caught up.

• 50:56Logan Bartlett?

  Run rate, it's.

• 50:57Speaker 03

  Yeah, so I expect this new fund to be about, hopefully, 15 or 16% Miami. And hopefully, the Bay Area is no more than 15 or 16%.

• 51:04Logan Bartlett?

  Wow.

• 51:05Speaker 03

  That'd be a pretty significant accomplishment.

• 51:06Logan Bartlett?

  Totally.

• 51:07Speaker 03

  In three years to go from zero to on par with the Bay Area for Founder's Fund would be amazing.

• 51:12Logan Bartlett?

  Yeah, well, especially, I mean, in mass, it's what, 45% probably Bay Area still. So I, obviously a lagging indicator.

• 51:18Speaker 03

  Yeah, but I think we'll have other funds follow us. And, you know, the disadvantage of venture is you get an advantage for about one to three years.

• 51:24Logan Bartlett?

  Yeah.

• 51:24Speaker 03

  And then people emulate what's working.

• 51:26Logan Bartlett?

  Yeah.

• 51:26Speaker 03

  So I suspect a lot of funds will be copying our strategy in Miami.

• 51:29Logan Bartlett?

  Yeah, well, there's a lot of people here that are scouting it out, so, uh, good. Well, uh, shifting gears a little bit, so, uh, you're, we originally, I originally, uh, exchanged notes with you over Twitter. Your, uh, Twitter persona, I think, is renowned, uh, and it's a little bit of, uh, if people are.

• 51:46Speaker 03

  Pot and kettle.

• 51:47Logan Bartlett?

  Yeah, oh, that's fair, yeah, two, two, two people here that, uh, maybe have a little bit of a distinction of their in-person. But how do you think about, like, uh, it's clearly something of a marketing, I don't know. It's, it's just fun and you, you mess around and have a good time with it? Or how, do you think about a marketing strategy? I can tell you my, my view of it, but.

• 52:03Speaker 03

  Well, it is a marketing strategy in some extent. I learned this when I was working at Square. I read every single tweet about Square for almost three years. And what I realized is that you could amplify value propositions by retweeting real users' experiences and that VCs noticed this and it helped us with race funding and it helped with recruiting. So that experience bled into other things I've done professionally. I've launched, you know, Open Door, I tweeted about Open Door, became a VC, tweeted about our portfolio companies, about our brand at both Coastal and now Founder's Fund. And so it is a marketing platform and it does resonate because the target audiences are pretty similar. People who use Twitter, follow Twitter, tend to overlap with the people who are interested in technologies.

• 52:48Speaker 03

  The flip side is I also have a large following now and I felt like I would be neglecting the advantages of having a following if on some issues I didn't process it.

• 52:58Logan Bartlett?

  Yeah.

• 52:59Speaker 03

  I felt like I have 300,000 followers. If there's things that are important to me in my life, I should talk about them because otherwise what am I doing with this audience? So I do talk about issues that transcend, you know, pure marketing for the fund. And I think that makes it more interesting for many of my followers, probably eliminates a few. But fundamentally, it's mostly used professionally and personally to move ideas forward that I believe the world needs to hear.

• 53:22Logan Bartlett?

  Yeah. And I think you were the first that taught me a very important lesson of not necessarily to engage with, with bad faith arguments. And I think notoriously wrong is, uh,

• 53:33Speaker 03

  Yeah, that was old squareism. So there's this one annoying person who kept writing the stupidest tweets about square. But because I was running a company, you can't always like share all the reasons why.

• 53:43Logan Bartlett?

  Totally.

• 53:43Speaker 03

  And but it.

• 53:44Logan Bartlett?

  But I didn't want. And you've already lost if you're arguing.

• 53:46Speaker 03

  Yeah. And you know, but I didn't want the record, like people to assume like, well, they read this tweet about square must be true. So I wanted to authoritatively say it's not true factually. And so I got in this debate using the wrong thing. It became kind of an internal, kind of an amusing thing. Like a lot of our company meetings would have various tweets with my little wrong comments. So I kept that up a little bit. Maybe I should get rid of it and try something new.

• 54:05Logan Bartlett?

  I, I like it. I, I will use a screenshot, a version of it occasionally when, when someone else is being bad faith. So it works, it works well for me. But, uh, yeah, it's, it's, uh, I mean, it's an interesting marketing platform to the extent that you can, I've seen your views, the companies, I think, have benefited from the awareness of it.

• 54:24Speaker 03

  Oh, definitely. I mean, there are times when in a competitive situation, like very hyper competitive, I'm competing with other VCs are good, you know, to lead an investment round. Some of the founders do, well, many of the founders do reference checks, but one of the things that resonates with them is they're definitely significant founder CEOs who I've worked with will say, like when the company needed help, like defense, you know, in articulation of why they were succeeding when the rest of the world was against them, I would use my platform and my following to help them.

• 54:51Logan Bartlett?

  Yeah.

• 54:51Speaker 03

  And that's a real value when something goes wrong.

• 54:53Logan Bartlett?

  Yeah.

• 54:53Speaker 03

  So that's helpful. The bad side or the flip side of the crazy side I've had over Twitter over the last decade is. I decided to chase this fool's errand of correcting everything wrong on the internet.

• 55:03Logan Bartlett?

  Yeah.

• 55:03Speaker 03

  Which is just a bad idea. There's so many bad, there's so many dumb things on the internet.

• 55:07Logan Bartlett?

  Yeah.

• 55:07Speaker 03

  That I need to be more disciplined about trying to correct everything wrong that someone publishes.

• 55:10Logan Bartlett?

  Yeah.

• 55:11Speaker 03

  So I'm gonna try to be more, you know, focus my time on something else.

• 55:15Logan Bartlett?

  What? Yeah, correcting everyone on the internet that's wrong, I think, is a endless exercise. Yeah, I think, I think you might lose that battle. So I guess, just because we're talking about it, what do you think about, we don't necessarily need to go into the different personalities bidding on Twitter right now, but what do you think about like the core fundamental problems of either the business, the platform, the opportunity that could be with someone that you used to work with? Or like, what do you think of Twitter today?

• 55:41Speaker 03

  Well, I think Twitter's a mess. Partially, it's been underperforming. You know, probably product velocity, but consistency and hyphidity. It's the most important social platform. So to be clear, my views have been consistent. You can read tweets from the last decade. The most important social platform in the world is Twitter.

• 55:58Logan Bartlett?

  Because of influence and...

• 56:00Speaker 03

  Impact in society, input of countries globally, period. No exception to that. However, could it be a better business with more value and more value creation? Absolutely. But more importantly, it's ideologically bankrupt right now. The new regime is anti-speech, and the whole point of Twitter is to give people unheard voices, long-tail voices, more of a platform, less gatekeepers, more access, more democratization. And the new regime thinks their job is to censor. And so I'm very happy to see that people who don't believe in censorship are trying to do things, whether it's directly, indirectly, buy, acquire, run, whatever, to solve this problem. The world needs to hear more voices with a more diverse set of views, not less voices, more controlled by people who already have power.

• 56:45Logan Bartlett?

  What do you, what do you think of, I mean, the specific examples that come to mind on the like, suppressing voices and all that? Maybe you have a better example, but obviously, the Hunter Biden laptop thing very specifically, and the president being kicked off the platform after January 11th.

• 56:58Speaker 03

  Well, I think kicking the president off the platform where you have Putin literally on the platform today.

• 57:03Logan Bartlett?

  Yeah.

• 57:03Speaker 03

  Is completely, like, completely indefensible.

• 57:06Logan Bartlett?

  Yeah.

• 57:06Speaker 03

  Like, there's no way you can have Putin tweeting and Trump ban. Like, Trump is not going out murdering people, like, for fun. Like, that just makes no sense.

• 57:15Logan Bartlett?

  So there's just a subjectivity to the rules?

• 57:17Speaker 03

  It's not even subjectivity. It's like ideologically, intellectually, and ideologically bankrupt. In addition, there are clearly... People on Twitter suppressing things that are critical of the CCP.

• 57:27Logan Bartlett?

  Yeah.

• 57:27Speaker 03

  Like, so for example, my husband wrote a policy paper that was published by Foreign Policy, the most elite foreign policy, you know, sort of publication on the planet, that Twitter will not let him buy ads against. There's no possible defense for that, except that someone works for the CCP at Twitter. And I tried to get this fixed and they still won't fix it. So like, there's, Twitter is working for the CCP, supporting Russia's, you know, dictatoratorial regime and suppressing Trump at the same time, which makes no sense. Then the COVID, let alone the COVID stuff, yeah. So, almost everything that was published on Twitter was wrong. And almost everybody who had a different opinion that was turned out to be accurate was suppressed on Twitter.

• 58:09Speaker 03

  So fundamentally, this is what happens when you give people power to make decisions. They will either reinforce their power, or they reinforce the powers that be. And the whole world of science and technology are disruptive people with disruptive ideas that prove to be right with the benefit of hindsight.

• 58:27Logan Bartlett?

  Do you think, uh, that, so just to back up on that, you think someone at Twitter is working with the CCP?

• 58:32Speaker 03

  Oh, I know for a fact. Like, there are definitely spies for the CCP that work at Twitter and Google.

• 58:38Logan Bartlett?

  And, and they're suppressing stuff that they don't?

• 58:40Speaker 03

  A hundred percent. And then fortunately, after the next election, we're going to investigate this. I'm very excited that the new regime in Congress will definitely look into what CCP spies are working at these technology companies.

• 58:51Logan Bartlett?

  Interesting. I, uh, and so do you think, like, how do you actually solve this? Is it, is it just more speech and sort of letting it be out there?

• 58:59Speaker 03

  I think this is not, again, I generally default to very basic principles and they're almost always right and everything else is noise. Anything that can be published in a book should be allowed on Twitter. So if Donald Trump could write a book, he should be able to tweet. If he wants to write something that would be banned in a book, so. You know, obscene, pornographic. We have principles for hundreds of years, actually arguably thousands, if you go back to, you know, sort of Greece and stuff, that have worked. Why are we trying to come up with new principles when we know what works?

• 59:28Logan Bartlett?

  Do you, do you not think that the scale of the internet and the ubiquity of some of this stuff changes the paradigm? Like, we need to rethink antitrust laws or some of these things because of the digital, you know?

• 59:39Speaker 03

  I think that's usually an excuse, and if someone has a reasonable argument, they should point to specifically what's different about a digital regime. But the printing press is basically, all these controversies that people debate about Twitter were unlocked when the printing press happened. All the powers, all the governments that existed, all the religions that existed hated the printing press. But the printing press have been one of the best things ever for mankind.

• 59:59Logan Bartlett?

  Yeah, yeah, interesting. You touched on China. I can't, I can't be remiss to, you have been pretty vocal anti-China and other, I mean, congrats on the Midas list, but other funds out there have, have entire strategies in China. What do you, like, do you think that that is at odds with being a pro-US, American?

• 1:00:22Speaker 03

  Well, I don't think it's morally and ethically at odds. It's legally permissible, which I think the law should change. I don't think it should be acceptable for an American fund to invest in China without the, without the CCP changing, sort of, either its principles or being, you know, removed from power.

• 1:00:37Logan Bartlett?

  Yeah.

• 1:00:37Speaker 03

  But I think that's up to Congress to change the law. So they're not violating, for the most part, I don't think these funds are violating the law. I think we at Founders Fund believe as American citizens, we have an obligation not to help the CCP, so we would never invest in things that would help the CCP, and we're pretty critical of funds that do, while taking the privileges and advantages of being an American.

• 1:00:57Logan Bartlett?

  Has that been, has that been something, I, I've noticed it of, of late, is it something to draw a distinction more and more and call people's attention to the, you know, the potential conflicts that exist here?

• 1:01:06Speaker 03

  Well, I definitely think the agenda of the CCP is now more activist, both internally and externally. And I think therefore, it's more obvious to a broader swath of the American public how we have to confront some of these problems as opposed to ignore them.

• 1:01:25Logan Bartlett?

  Yes.

• 1:01:26Speaker 03

  So therefore, I think there's going to be more pressure on financial services firms, just like, there's going to be more pressure on corporations that do business with China.

• 1:01:33Logan Bartlett?

  Yeah, interesting. And it's, I mean, the, the other thing that exists in all this is TikTok, right? And what is possibly gonna, I mean, it's- I spent a lot of time on it. Redpoint has a TikTok presence on it, right? It's an amazing platform in so many ways, and it's also absolutely terrifying.

• 1:01:48Speaker 03

  Yeah, so I'm not allowed to use TikTok is my guess. So fundamentally, yeah, I'm a, I was an advocate of the Trump administration's tentative decision to ban TikTok. I think we should absolutely ban TikTok for a variety of good reasons. Actually, I think that one of the issues the Trump administration got into was there was two or three distinct reasons to ban TikTok. And rather than just step on one and, you know, have the policy follow that. They're trying to triangulate these three different reasons. There's an economic retaliation reason, like American social media companies are not allowed in China.

• 1:02:16Logan Bartlett?

  Yes.

• 1:02:17Speaker 03

  Arguably, we should have reciprocal rules. But there's a national security rationale, which I think is pretty important. And I think that was probably the one that they should have pursued. And ultimately, the American administration needs to ban TikTok.

• 1:02:31Logan Bartlett?

  Yeah, or at least bring like, bring the code base to the United States or something.

• 1:02:35Speaker 03

  There may be ways to

• 1:02:37Logan Bartlett?

  Make it work otherwise.

• 1:02:38Speaker 03

  To minimize the national security damage, absolutely. But there does have to be pretty clear, pretty transparent rules and pretty difficult to manipulate. Because otherwise, definitely people will manipulate.

• 1:02:49Logan Bartlett?

  I feel like a crazy person every, I always get yelled at online for defending Facebook and stuff. But I'm like, at least we can call Zuckerberg to Congress, right? Like, at least we can, you know, versus TikTok, I think mostly gets, I mean, not a free pass. I think people are cognizant of this, but it's, it's pretty scary, right? Like, the amount of stuff that's going on there.

• 1:03:05Speaker 03

  It's scary. It's a great platform to influence behavior.

• 1:03:08Logan Bartlett?

  Hundred percent.

• 1:03:08Speaker 03

  So I was actually told a pretty good anecdote that I really believe that the initial plan when Musically sold was to basically dumb down the American kids so that China can compete better with us. Which actually is a pretty good strategy in some ways. That isn't like, arguably, that's not a short-term national security problem, but it is actually You know, it sort of betrays a certain mindset. Totally. Well, I think American kids are probably doing it to themselves as well. It seems at times, but yeah. Yeah, you never really know whether that's true, but I do think there are major issues in allowing the CCP to control content, manipulate content that affects a whole swath of the American public. We would not allow this on Twitter. Yep. No, absolutely.

• 1:03:52Logan Bartlett?

  Uh, I guess kind of shifting gears a little bit, uh, so I think almost to the day you called the market top. Uh, like almost very literally, which I, you know, whatever, uh, that was an amazing, uh, serendipitous, uh, prognosis of what was going on in the ecosystem. Uh, what did you see at that time of doing that? And then also like what's happened? How have you internalized some of the stuff that's happened the last couple of months since then?

• 1:04:17Speaker 03

  Yeah, to me, this is not that difficult. Uh, there was basically, as soon as the interest rates started to go up, there was going to be a market correction. There has to be technologies, stocks generally generate cash flow significant years in the future. And so if you change the discount rate, the value of the company just has to change. And so the, the thing that happened in October was all these inflation deniers basically ran out of excuses. So there was this, it's transitory, it's this or that excuses that the Biden administration was profiting. And you know, certain set of the market, a set of people were believing, you know, nonsense is obviously true. Like if you look at January 1st, I posted that we're in for serious inflation this year. You know, Jack Dorsey posted, we're in hyperinflation and everybody critiqued them even more so, you know, the Twitter,

• 1:05:01Speaker 03

  the Twitter debate. Fundamentally, the inflation was very obvious, but there was enough excuses the Biden administration was throwing out that people kept believing. Then finally in October, I think the administration, the Fed basically explicitly said, we have inflation. Yeah. So as soon as that cracked, I was like, duh, interest rates are going up. Well, that means technology stocks are going down. This is inevitable. Fortunately, Ari Levy from, uh, CNBC, I think, um, asked me, um, point blank, is this the top of the market?

• 1:05:27Logan Bartlett?

  Yeah, Twitter.

• 1:05:28Speaker 03

  Yeah. Yeah. I mean, I've internally been talking about it in a founder's fund and debating, you know, what we should be doing differently because of this. But the fact that he asked me, is this really the top of the market? Happened to clarify my brain. I'm like, yeah, this actually is right now. Cause there's no more excuses. Inflation's real and nobody can deny it anymore. And that's basically what's happened. And interest rates, you know, are probably going to continue to go up for a while. But all you have to do is monitor the inflation rate. Like this isn't rocket science at all. Every month you get a government report card on the inflation rate. If inflation keeps going up, stock, technology stocks are going to keep going down. If inflation stabilizes without having to raise interest rates, then either things will be stable or things might get better. But you don't have to monitor one data point. It's not, this really is simple.

• 1:06:09Logan Bartlett?

  It's, well, every other change that I've lived through had some like very specific, almost micro thing that happened to the ecosystem or the macro.

• 1:06:20Speaker 03

  Let's talk about this. So 1999, so talk about the benefits of studying history. 1999, the market collapsed in 2000, you know, in March and then in June. The specific cause of that was six federal interest rate hikes by the Federal Reserve. And 99% of the people in tech either didn't know this or forgot it. And they all should have known it. Most journalists forgot it or shouldn't or should have known it. But if you lived through that market correction, which I did in 2000, you knew exactly what triggered it, which was the Federal Reserve raising interest rates. So it's like, if the Federal Reserve starts raising interest rates again, guess what's going to happen? We're going to live through 2000 again.

• 1:06:52Logan Bartlett?

  Totally.

• 1:06:53Speaker 03

  This is not, again, like, most of life is really simple.

• 1:06:55Logan Bartlett?

  And I was honestly, it was interesting. Most of the examples that I had lived through were like, I remember in 2016 when Tableau and LinkedIn took a bloodbath, right? And that was like, everyone was very concerned about this very small pocket of software and what was ultimately going to impact each other. And all those things sold off for a little while. Or then there was a very big COVID thing where it was like, hey, the fundamentals of these businesses are going to change, right? And therefore what all is going to happen? But this was the first one that was like, I guess dating back to 99, it predates mine. But the first one that was like actually as simple as, you know, interest rates, inflation, all that.

• 1:07:27Speaker 03

  Yeah, it's just, do you ever see anybody build a discounted cash flow model? Like, I think, I mean, I don't do that. As Delia has talked about publicly, I never look at these models. But I definitely watch my colleagues and it changes me to change the variable. I definitely could see what happens with Excel.

• 1:07:40Logan Bartlett?

  Yeah, yeah, yeah, that's interesting. So how did you internalize that? Like, what, what did you guys, how did you think about it? How'd you act on it? Where are we now?

• 1:07:47Speaker 03

  Well, we, I had started wanting us to avoid investing for the most part last summer. And had some success or failures with my colleagues, convincing them. Peter definitely also is a macro, and he's actually the best macro thinker that I know. Also believe that we're heading for a recession and inflation, et cetera. But there was so much momentum going on in the world that I don't think we were as disciplined as we should have been about like ceasing investing and being really restrictive on valuations until about October.

• 1:08:16Logan Bartlett?

  Yeah.

• 1:08:17Speaker 03

  Then I think we did shift pretty fundamentally about not being willing to chase valuations that other people were willing to pay. Last year, as I tweeted also, we were price takers. So basically, the company would set the effective valuation and you could either be in or out and you could decide to compete at that price, but you didn't have a choice of resetting the price. Starting over the summer into October, we started saying, we're going to be disciplined on price and we're not going to chase valuations.

• 1:08:42Logan Bartlett?

  Yes, but and counterintuitively, you also leaned into a handful, I mean, one that we worked together on, but you leaned in on a handful of opportunities that you saw outsized potential and what was going through that? I know at some extent accumulating advantages that go through these markets.

• 1:08:57Speaker 03

  Yeah, I mean, to some extent, we felt we had asymmetric. Those are all companies that we were previously investors in, Ramp, for example, Cavac, et cetera. We leaned into pretty aggressively, but we felt we had asymmetric information about the quality of the team, the caliber, you know, the opportunity, the market, et cetera. We do like concentrated bets as founders fund. We're probably most famous among LPs for concentrating our dollars into winning companies. It's a strategy that Peter and Brian and Napoleon here have really executed. It's not something I typically do, but fundamentally, that's the founder's fundamentality is find winners and really double, triple down. And we felt like there was some opportunities to trip, double, triple, quadruple down. So in some ways, those are intellectually inconsistent, but also depends on timeframes. So these are all growth fund investments.

• 1:09:42Speaker 03

  Growth fund thinks in like a three or four year time horizon. My predictions about the current market are more like this month, this quarter, this year. So depending upon how you back to different timeframes, you could come up with a different answer, whether you should be leaning in or leaning back. I never wanted to pull back, for example, in seed investing. I love writing seed checks. It's my forte. I don't think there's any reason to adjust your seed strategy based upon macro dynamics because you're going to be building a company for six to 12 years in the future. Nobody knows what the world's going to look like in six to 12 years.

• 1:10:10Logan Bartlett?

  And it'll either work or it won't. And it won't be because you paid 10 or 20 or 50 posts or whatever it is.

• 1:10:16Speaker 03

  Nope, nope, nope. So I, yeah, so I think we're going to be very aggressive in seed. I want to be as aggressive as ever funding seed companies. But by the time this series B kicks in. You need to be very judicious about what price you're paying for what risk. Yeah.

• 1:10:28Logan Bartlett?

  And it's interesting. So I guess the state of the venture landscape right now, as you think about it, like, so you've lived, you started your career at the tail end of the, you know, whatever, the Cramlix and Pierre LeMond and all those guys. Where, and then we've, I say that there was kind of the broadcast television days and the cable television days. And now we're sort of in the streaming wars. Where, what do you think is going on in the market at large? Like, people are getting bigger, have gotten bigger over the last year. Do you think we're going to see consolidation of brands that exists?

• 1:10:56Speaker 03

  Yeah, I believe we've been vertically integrated. Other people have talked about it more elegantly, including one of my junior colleagues, Average, written about this as well. I think this is like law firm error. Like, you have to be multi-stage or it's going to be very difficult to compete. I think brands that were very successful with focus, like Merit Tech in the growth sector, or Benchmark, et cetera, are going to really struggle in this vertically integrated, multi-stage environment. I think a lot of the seed funds that were doing well, solo JP's, et cetera, were kind of relying upon artificial markups. Where everything was up into the right for the last two or three years, they looked good on paper. But until those turn into true DPI or liquidity, they're not going to, they're not going to perform anywhere near your expectations. I mean, those portfolios should be written down by, divided by three. Just to adjust to the public comparables, they don't look so hot.

• 1:11:40Speaker 03

  So I think the trend of launching a new fund, raising $100 million plus, everybody think you're the coolest fund ever, that, that trend is pretty much done.

• 1:11:48Logan Bartlett?

  Yep. Interesting. I guess one, one other thread I wanted to go down was just investment, what, what you look for in entrepreneurs and all that. And I, I think it's, I mean, I'm, I'm mostly investing post-product market fit, and you're mostly investing pre-product market fit. I, I invest in dot coms, you invest in, you know, people, right?

• 1:12:05Speaker 03

  Yeah, that's really true.

• 1:12:07Logan Bartlett?

  And, and so I feel like there's, I always love peppering you with questions about how you actually think about that. And so maybe the, the, the types of things you're looking for in entrepreneurs in general, like what makes people really spike to you, want to be able to write a check into them?

• 1:12:21Speaker 03

  Yeah. So my preferred course is to invest on a team and a keynote deck and nothing else. No business metrics, no product even sometimes. But basically, nothing that another investor can kind of evaluate. Once there's metrics, there's lots of smart people in our world. And so I feel like that gets commoditized. But if you just force a decision on the deck and the team, there's very few VCs who want to write significant checks against that. So I'd prefer to compete on that dimension.

• 1:12:48Logan Bartlett?

  And is it mostly, mostly referral-based that things are coming in?

• 1:12:52Speaker 03

  Well, that level, it's often not a referral. I have to intercept before anybody else hits it all.

• 1:12:57Logan Bartlett?

  Some of them are still like raising rate.

• 1:12:59Speaker 03

  Yeah, I prefer like nobody else being on the cap table, ideally. That said, definitely will look at investments from, you know, highly qualified referrals, or even occasionally from a Twitter, you know, a random tweet, et cetera.

• 1:13:11Logan Bartlett?

  Your DMs are about to be just a nightmare.

• 1:13:14Speaker 03

  Um, but in any event, um, there's always a spark. So the thing that leads me to want to write a check is a spark. And the spark can be different, and in fact, is different with different founders. But I have this reaction like, oh my God, I have never seen anybody like this before. And it can be like, this is the greatest salesperson I've ever met. This is the greatest storyteller I've ever met. This is the most tenacious person I've ever met. This is the smartest person I've ever met. They're very different. But there's this year that perks and I'm like, holy cow. If I don't feel that, I usually don't want to, I almost never want to invest. The thesis behind that is if you think about how heroic it is to create a business in a proverbial garage with a co-founder, say, I'm going to reinvent the world. I'm going to reinvent society. I'm going to reinvent an industry. That's like borderline irrational.

• 1:13:57Logan Bartlett?

  Yeah.

• 1:13:58Speaker 03

  And so my analysis over 40 years is the only people who actually reinvent the world have some Herculean ability in some dimension that's not normal. Otherwise, the chance you're going to reinvent the world rounds to literally zero.

• 1:14:12Logan Bartlett?

  Yeah.

• 1:14:12Speaker 03

  So I don't want to be investing in zeros. So fundamentally, I need that spark or I won't write the chap. Another way that does resonate with me is, uh, Balaji wrote this, well, he taught a class at Stanford called Startup Engineering. He expressed this concept of an intellectual maze that later Chris Dixon kind of paced into a blog. The founders who can walk you through the intellectual maze from starting to success instead of failure are very rare. And when you meet a founder who can literally draw that map, the treasure map for you, uh, I would also invest in that.

• 1:14:41Logan Bartlett?

  Yeah, got it. Uh, uh, well, the good news is Chris won't hear this because, uh, he, he blocked me a long time ago on Twitter. He, they don't, you don't have to worry about that, the copy and paste thing. Um, it's interesting. So, so is it some specific spike that, that just like, is this totally intuitive to you? Is it something that you think can be imparted on people having, is it pattern matching over time? How do you think about that?

• 1:15:03Speaker 03

  I don't know. It's definitely the hardest part of venture capital to teach. If I could teach it, the more my colleagues, I would. So, and if you develop this kind of spidey sense, I think you can be a successful investor, period. And you're ready to write your own checks.

• 1:15:16Logan Bartlett?

  Yeah.

• 1:15:16Speaker 03

  So if someone shows this propensity, I would embrace them, fund them, give them money for their own fund, or try to recruit them here to founders fund. So it's pretty rare.

• 1:15:28Speaker 03

  You can teach some things around pattern matching. So for example, we recently funded a founder who's about 20 years old, who I met on a Zoom call, and my first reaction was like, oh my God, he's another Delian. It's like literally like another Delian.

• 1:15:44Logan Bartlett?

  That's a good thing.

• 1:15:46Speaker 03

  So I called up Delian. I'm like, you have to talk to this guy. And he's like, why? And the idea sounded kind of crazy, but I'm like, this guy is literally you. And Delian didn't believe it. Then he started talking to him on the phone. He's like, oh my God, he really is like me.

• 1:15:59Logan Bartlett?

  That's so funny.

• 1:16:00Speaker 03

  So I found another Delian.

• 1:16:01Logan Bartlett?

  Oh, wow. That's a, yeah. Well, I mean, and that's a pattern matching experience. Was Delian, I mean, in general, is that like, is that an archetype? Or obviously people are one of one in that. But like, do you have a mental model for a lot of the people you go invest with? Or?

• 1:16:13Speaker 03

  Um, no, but when like.

• 1:16:15Logan Bartlett?

  When you see it.

• 1:16:16Speaker 03

  There's like a trait. So for example, let's talk about a well-known entrepreneur, Max Lovecham.

• 1:16:20Logan Bartlett?

  Yeah, sure.

• 1:16:20Speaker 03

  So I remember when I first joined PayPal, about three months later, Reid Hoffman came up to me and said, you know what's special about Max?

• 1:16:27Logan Bartlett?

  No. I feel like a lot, but I don't know where you're going with this.

• 1:16:30Speaker 03

  Well, he's like, Max is a first-rate business mind paired with a first-rate technologist. And in Silicon Valley, there's almost none of those.

• 1:16:36Logan Bartlett?

  Yeah.

• 1:16:36Speaker 03

  And this is literally, this conversation happened in January 2000. Uh, yes, January 2000, or January 2001. And so if I find someone who's a first-rate technologist and a first-rate business mind, I would definitely invest. Because like now, watching 20 years later, I'm like, you're right, there's about five of those people.

• 1:16:52Logan Bartlett?

  Yeah.

• 1:16:53Speaker 03

  Or like Jack Dorsey is actually first-rate business mind, first, pretty first-rate technology mind, and a first-rate design mind.

• 1:16:58Logan Bartlett?

  Yeah.

• 1:16:58Speaker 03

  Which is why he's had like ridiculous success. Is the Venn diagram of those three things doesn't really exist. Maybe like Steve Jobs, you know, like there's not that many people who can do all three.

• 1:17:07Logan Bartlett?

  Yeah, interesting. Yeah, it's a, uh, yeah, it's a. Very unique traits in people. Uh, I just have Delian written down here with a question mark. I'm not sure.

• 1:17:14Speaker 03

  Lots of questions about.

• 1:17:14Logan Bartlett?

  Yeah, I know, I know. We don't need to get into that there. So I guess because we're sort of on the Twitter thread and all this. You know, I'm sure you've given this answer before, but it's it's interesting today as you look at the people that are derivative or have some lineage back to PayPal, just the number of people that are in the news today that are running, you know, different funds, different, different companies, all that like, what was it that made that unique moment in time? What? How much was nature versus nurture of that specific experience that led to say, I mean, roll offs now running Sequoia, Elon's obviously Tesla, SpaceX, potentially Twitter, right? You're here, we can go down to YouTube.

• 1:18:00Logan Bartlett?

  Max at a firm, it's just like, it's an insane, everyone knows the list, but it's insane.

• 1:18:03Speaker 03

  Yelp, LinkedIn.

• 1:18:04Logan Bartlett?

  Yelp, LinkedIn, yeah, all that like, what? What was it at that moment in time or that that either brought everyone this talent together causation correlation, all that?

• 1:18:14Speaker 03

  I think the number one thing was Peter Thiel and Max Leffler were just extremely excellent at assessing and hiring. So they hired a lot of very talented people who had ambition. That was the number one drive like, and it was really Peter hired most of the non-technical people and Max hired all the technical people.

• 1:18:29Logan Bartlett?

  And everyone was 25 to 35?

• 1:18:33Speaker 03

  The age range probably was more like 21 to 35 with some exceptions, but fundamentally that's about right. So people also had a lot of energy.

• 1:18:41Logan Bartlett?

  Yeah, good point in the career.

• 1:18:42Speaker 03

  Post PayPal experience. I think the bit, the difficulty of building PayPal, we had a lot of hostility from eBay, Mastercard, Visa, Amex, later post nine 11, the Treasury Department, all had issues with us. They were trying to kill us in different ways. So we had to confront a lot of challenges. And I think building a company under hostile circumstances led to bonding. So each of us bonded together. We saw, we got to witness what each of us was capable of under pressure. So building a company under stress, I think is a healthy exercise. And I think there were some lessons that we were ahead of the curve, like David Sacks was ahead of the curve of creating a separate design team that the product people actually reported to for a while. He was ahead of the curve in rebranding product managers as producers.

• 1:19:23Speaker 03

  To create value, we've had some very advanced data science that Max Levchin pioneered, including like some very pioneering techniques that everybody now takes for granted, including like your CAPTCHA tests that he and a couple of engineers invented but forgot to patent because we were too busy. A lot of techniques around human and not confusing human labor and math in a very clever equation. They got on the cover of Wired magazine back in 2000 for inventing. So there was a lot of pioneering things. We did a lot of management philosophy, anti-MBA, promoting people, hiring up and coming talent that are now taken for granted across the technology world. So we pioneered a lot of ideas that have spread and that's kept us quite relevant.

• 1:20:03Logan Bartlett?

  Yeah, it's interesting. It's amazing. Just all the stuff that's come out of it. Well, the last one I had, obviously, corporate takeover is a PayPal mafia has been in the news lately. So you're going to buy berries takeover?

• 1:20:15Speaker 03

  Yeah, I figured it, you know, I have to, Eli can afford Twitter, you know, I need to find something I could.

• 1:20:21Logan Bartlett?

  Yeah, great. Well, we're excited.

• 1:20:22Speaker 03

  And the only thing I use more than Twitter is my berries. So I figured I should just buy it. No, just kidding.

• 1:20:26Logan Bartlett?

  It's much healthier for your.

• 1:20:27Speaker 03

  I already have like three jobs. I'm like ambassador to Miami, I'm the CEO of a company and, you know, serve on the board of like 18 companies as an investor. I don't have, I don't have time to run berries, you know, as a side project.

• 1:20:38Logan Bartlett?

  I think, I think it's probably a safe, safe thing. How do you actually make all that, I guess, last one, but how do you actually make all that time work? Like, how do you manage your day to day across? I mean, you essentially have three full-time gigs, right?

• 1:20:51Speaker 03

  Yeah, at least. Yeah, I teach berries for fun.

• 1:20:54Logan Bartlett?

  Yeah, exactly.

• 1:20:55Speaker 03

  So I think the key is to have skill set and prioritization. This is like an executive trait that developed 13 years running companies, which is basically what are your priorities and allocate your time against priorities, mapping. I think most people do not map their priorities and time well. So I have this thing called a calendar audit that I use with CEOs, which is awesome. Ask them to go to whiteboard and list their top three priorities on the left column. Then we go pull up their Google Calendar and we compare what percentage of time do they actually spending as three parties and they never really tie.

• 1:21:25Logan Bartlett?

  Map, yeah.

• 1:21:26Speaker 03

  Like, for example, people say recruiting is my number one party. You probably hear this.

• 1:21:28Logan Bartlett?

  Yeah, yeah, totally.

• 1:21:29Speaker 03

  The time.

• 1:21:29Logan Bartlett?

  Totally.

• 1:21:30Speaker 03

  I met probably one founder in my life who actually makes recruiting.

• 1:21:33Logan Bartlett?

  Yeah, that maps time based.

• 1:21:34Speaker 03

  So I'm always constantly doing this. I'm like constantly, like every day in the morning I wake up and do this. I do this in my interpersonal life, which drives some of my friends crazy.

• 1:21:43Logan Bartlett?

  Yeah.

• 1:21:43Speaker 03

  I do this professionally. I do this with like fitness. I'm always like triaging time against priorities.

• 1:21:49Logan Bartlett?

  Yeah.

• 1:21:49Speaker 03

  And that's how you get a lot more done is really for forcing yourself to prioritize strictly and then allocating the time to make sure it's in alignment and then you get a lot better output.

• 1:22:00Logan Bartlett?

  Interesting. Um, good deal. Well, uh, anything I didn't have?

• 1:22:03Speaker 03

  Oh yeah, we could talk forever.

• 1:22:04Logan Bartlett?

  Yeah, I know. This is fun. Uh, thanks for, uh, thanks for doing this. This, uh, yeah, I, a lot of, a lot of good stuff that I, uh, that I hadn't heard yet. So, um, yeah, I really appreciate you doing this and I'm excited for this, this week. I don't know what percentage is going to be boondoggle, uh, lessons. I mean, it's nice to actually have the first real, I think this is the first like kind of in-person event that sort of happened in a way pre-COVID. It feels like.

• 1:22:27Speaker 03

  Well, not that people live here, like we've had Basel, you know?

• 1:22:30Logan Bartlett?

  Yeah, sure.

• 1:22:30Speaker 03

  Epic Ultra, if you're into music. So tech weeks are pretty substantial. Operation F1 will be a substantial operation. I'm excited because I think unlike many conferences and many environments where people go for conferences, Deli and I think we can get between 10 and 20% of the people come here.

• 1:22:46Logan Bartlett?

  To convert.

• 1:22:47Speaker 03

  Yeah. So that's my real goal is prove that Miami is the center of gravity in technology and then move people here that reinforces that.

• 1:22:54Logan Bartlett?

  Well, thanks for doing this.

• 1:22:55Speaker 03

  Pleasure.

• 1:22:55Logan Bartlett?

  All right.

• 1:23:00Logan Bartlett?

  That concludes the 13th episode of Three Cartoon Avatars. I have a Miami dinner party to get to, so, uh, yeah, we, we only could make it whatever, uh, however long this is, a couple hours, definitely our longest one to date.

• 1:23:14Speaker 02

  Nikita, given this is the last time that you can foreseeably tease the app before it actually exists, should we do, we do one last attempt at you telling us what you're working on?

• 1:23:24Speaker 01

  Yeah, the name of the app is.