posted about 14 hours ago on re/code
The issue may have affected as many as 6.8 million users. Facebook disclosed another software bug on Friday that may have exposed some users’ private photos to app developers without their permission. The bug, which was live for 12 days in September, may have impacted as many as 6.8 million users. Facebook says the bug impacted hundreds of apps that let users create accounts and sign in using their Facebook login information. The software bug gave hundreds of developers access to a broader range of Facebook photos than are usually allowed. “When someone gives permission for an app to access their photos on Facebook, we usually only grant the app access to photos people share on their timeline,” Facebook wrote in a blog post. “In this case, the bug potentially gave developers access to other photos, such as those shared on Marketplace or Facebook Stories.” That included photos from draft posts — essentially, photos that were uploaded to Facebook but never actually shared. It did not impact photos shared in Messenger, and we’ve asked Facebook if it impacted photos shared to private groups or albums. Facebook has had an embarrassingly terrible year when it comes to user privacy. Not including Cambridge Analytica, which exposed the company’s weak privacy policies from years past, Facebook has had a number of other privacy mishaps, many of them in the past six months. There was a bug that accidentally “unblocked” people that users had blocked; there was a bug that changed users’ share settings so that they were sharing information publicly without realizing it; hackers then stole the private information for as many as 50 million users right before the midterm elections. This new photo-sharing bug is yet another black eye for the company, which is dealing with the (totally fair) perception that it doesn’t take user privacy seriously. Why would anyone trust Facebook with their personal data? We asked CEO Mark Zuckerberg that question back in September when Facebook exposed the security hack: “As I’ve said in a number of things that I’ve written and spoken about, including election security, security is an arms race. We’re continuing to improve our defenses, and I think that this also underscores that there are just constant attacks from people who are trying to take over accounts or steal information from people in our community. I think that the teams that we have at Facebook are very focused on this and there are a lot of talented people who are working on this and I think doing good work, but this is going to be an ongoing effort and we’re going to need to keep on focusing on this over time.” It’s unclear if Facebook might be punished by regulators for this most recent blunder. That’s because Facebook told TechCrunch that it discovered the bug on Sept. 25 — almost three months ago. New European data laws require companies to report data breaches to authorities within 72 hours, and to the user “without undue delay.” They can be fined for violations. Facebook reported the issue to the Office of the Data Protection Commissioner on Nov. 22, “as soon as we established it was considered a reportable breach under GDPR,” a spokesperson told Recode. “We had to investigate in order to make that conclusion. And once we did, we let our regulator know within the 72 hour timeframe.” Users were obviously not told at the same time. “We have been investigating the issue since it was discovered to try and understand its impact so that we could ensure we are contacting the right developers and people affected by the bug,” a company spokesperson said over email. “It then took us some time to build a meaningful way to notify people, and get translations done.” Facebook, meanwhile, will begin to alert users who were impacted. Here’s what the alert will look like. Facebook Here’s the alert Facebook will show users impacted by the latest software bug.

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posted about 15 hours ago on re/code
Plus: Apple expands to Austin, Texas; spam-scammers send thousands of bomb threats that result in evacuations nationwide; log on the fire fill me with desire ... Amazon officially killed the five-year Whole Foods-Instacart delivery partnership. Instacart will begin pulling the first group of 1,415 workers out of its 76 Whole Foods locations in February. The company expects to be able to offer 75 percent of those workers employment at another nearby retailer that partners with Instacart for deliveries. In the last year and a half, Instacart has reduced its dependence on Whole Foods by signing delivery deals with giant chains like Kroger, Aldi, Sam’s Club and Walmart Canada. Meanwhile, Postmates is building the autonomous delivery robot of the future — it’s called Serve, and it’s launching soon in Los Angeles. [Jason Del Rey / Recode] Apple plans to build a 133-acre corporate campus in Austin, Texas, that will cost $1 billion and create about 15,000 new jobs. Apple also plans to open offices in Seattle, San Diego and Culver City, Calif., adding more than 1,000 new employees in each location; over the next three years, it will also add hundreds of jobs in several cities, including New York and Boston. Skipping the Amazon-HQ2-style gimmicks — no reality-TV-style competition, no year-long publicity tour — Apple acted like a grown-up company in its plans to expand its workforce and extend its footprint beyond the West Coast. [Timothy W. Martin and Russell Gold / The Wall Street Journal] Spam-scammers sent a wave of bomb threats worldwide, causing evacuations at businesses, schools, subways and other locations; the scammer demanded $20,000 to be deposited in a bitcoin wallet address in exchange for not detonating a supposed bomb. There’s no evidence of any actual explosives being placed or detonated, but the threats provoked evacuations and law enforcement investigations across the U.S., Canada and New Zealand. The ploy appears to be a steep escalation of a bitcoin blackmail tactic that took off this summer, in which victims received an email claiming that a hacker commandeered their webcam and would release the resulting photos publicly if the target didn’t pay a small amount in bitcoin; the scheme earned its perpetrators half a million dollars. [Adi Robertson / The Verge] Here’s a detailed inside look at what it was like to work at Tesla as Model 3 manufacturing ramped up — and the company’s leader melted down. And here’s a Bird’s-eye view of the frenzied growth of the controversial e-scooter player Bird — which might be the fastest-growing company ever — including data that confirms the seductive math behind the Bird business. [Charles Duhigg / Wired] YouTube removed more than a million and a half channels, all of the more than 50 million videos on them and 224 million comments during the third quarter because of violations of its policies. Government officials around the world have been pressuring social media platforms like YouTube and Facebook to quickly identify and remove extremist and violent content, and YouTube began issuing quarterly enforcement reports this year to demonstrate its commitment to policing its platform. Meanwhile, YouTube’s annual “Rewind” video recap of the year in YouTube culture quickly became the most-disliked video on the platform, with more than 10 million “dislikes,” overtaking Justin Bieber’s 2010 song “Baby.” [Paresh Dave / Reuters] Top stories from Recode Cryptocurrency suffers a black eye after a buzzy $130 million project crumbles. The failure of Basis is a reminder of why some Silicon Valley investors shied away from the crypto industry in the first place. [Theodore Schleifer] This is cool The painter of Texas fast-food-chain light. Logs on the fire fill me with desire ...

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posted 1 day ago on re/code
The world’s biggest social network wants to get into the pay TV business — by taking a page from Amazon. Facebook is readying its biggest move into video to date: It wants to sell consumers subscriptions to cable TV networks like HBO and hopes they’ll watch those networks on its own apps. The social network is talking to pay TV channels including HBO, Showtime and Starz about a proposal to sell those companies’ streaming TV services on Facebook. Consumers who subscribed to the channels could watch them on Facebook’s own properties — mostly likely via Facebook’s “Watch” hub — but could also likely view them on other platforms and devices, like Roku TVs. It’s a model the TV guys are familiar with: Amazon has been doing something similar for a few years, and Apple is looking to do the same thing next year. Industry sources say Facebook’s media team has been discussing deals with HBO and others for months and would like to launch the product in the first half of 2019. A Facebook rep declined to comment. If it happens, it would be both a logical path for Facebook, given its big ambitions to become a video hub, and a big departure for the company: While Facebook has dabbled with e-commerce in the past, it hasn’t made a big push to sell anything directly to consumers. Facebook has spent several years trying to convince media companies to create content for its 2.3 billion users, with limited results. But it has also signaled that it’s willing to spend money to acquire premium programming. In 2017, it bid $600 million in an unsuccessful attempt to stream Indian cricket matches; last month it began streaming a handful of old TV shows, including “Buffy the Vampire Slayer,” via a deal with 20th Century Fox. Industry executives believe TV programmers will expect Facebook to shell out advance payments for multiple-year deals, which Facebook would recoup by pocketing some of the channels’ subscription fees. Platforms like Apple and Amazon generally keep 15 percent to 30 percent of any subscription revenue they generate. Selling content or anything else to its users would be a significant change for Facebook, which has always kept its core service free and relies on advertising for almost all of its revenue. But sources say one of the reasons the company is interested in selling pay TV subscriptions is that the networks already spend lots of money advertising their services on Facebook. The logic: Instead of sending consumers who click on those ads outside of Facebook, the company could capture some of the revenue itself.

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posted 1 day ago on re/code
The failure of Basis is a reminder of why some Silicon Valley investors shied away from the cryptocurrency industry in the first place. The cryptocurrency industry has had a wild, peak-to-valley year. Case in point: The news today that Basis — one of Silicon Valley’s buzziest attempts to create an alternative to traditional currency — is shutting down. Basis said it raised $133 million just this April from blue-chip venture capitalists like Andreessen Horowitz and Alphabet’s GV. That shocking amount of dough was meant to build a “stablecoin” — or a currency that would be insulated from inflation — and to try and prevent the price sensitivity that has bedeviled other cryptocurrencies. But Basis felt the project would really only work if its tokens, or what Basis created to adjust the supply of its stablecoin and therefore keep its value relatively stable, wouldn’t be subject to U.S. securities laws. Regulators have been trying to assess whether to apply standard laws that govern things like stocks to digital assets like coins — and Basis said it was reading the tea leaves and predicting a crackdown. “Unfortunately, having to apply US securities regulation to the system had a serious negative impact on our ability to launch Basis,” its CEO Nader Al-Naji wrote Thursday. But at a bigger-picture level, this is a black eye for the entire cryptocurrency industry. As the amount of money it raised makes clear, Basis was seen as being at the vanguard of the cryptocurrency revolution. And while the company says it is returning the money it raised to its investors, it’s nevertheless a very public stumble for its prestigious backers. Of course, crypto investing — just like startup investing — produces lots of failures. That’s normal. But this particular failure also is a reminder why some Silicon Valley investors shied away from investing in crypto projects such as initial coin offerings in the first place: The regulatory landscape is just too uncertain to be able to predict much of anything. Basis’ demise was first reported by The Block.

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posted 1 day ago on re/code
Instacart will begin pulling the first group of workers out of Whole Foods locations in February. The writing has been on the wall since Amazon’s 2016 acquisition of Whole Foods. Now, reality is backing it up. The five-year relationship between Whole Foods and grocery delivery service Instacart is winding down, the delivery startup announced on Thursday. Instacart will begin pulling the first group of 1,415 workers out of its 76 Whole Foods locations in February. The company expects to be able to offer 75 percent of those workers employment at another nearby retailer that partners with Instacart for deliveries. The end of the relationship is expected to reduce Instacart’s revenue by less than five percent, including any impact on the membership business, according to a person familiar with the company’s finances. In addition to membership fees, Instacart also generates revenue through retailer commissions, online ads and delivery and service fees. This outcome has been a matter of when, not if, since Amazon announced in June 2016 its intention to acquire Whole Foods. Since then, Amazon has steadily been ramping up its own free two-hour delivery service from Whole Foods stores for Amazon Prime members. Today, the service is available in more than 60 cities. But the acquisition also spurred giant grocery chains to take action and walk into Instacart’s arms. In the last year and a half, Instacart has reduced its dependence on Whole Foods by signing delivery deals with giant chains like Kroger, Aldi, Sam’s Club and Walmart Canada. The company has also taken on $871 million in new funding from investors. Several years ago, the end of the Whole Foods relationship could have been a death knell for the startup; today, it certainly has a negative impact, but not a catastrophic one. An Instacart spokesperson would not provide details about any possible breakup agreement with Whole Foods, citing confidentially provisions. But it seems fair to assume that Amazon would have paid to end the relationship; Recode reported in 2016 that Whole Foods and Instacart had signed a five-year agreement, which would mean there’s still a few years to go on it. Instacart is providing a three-month severance payment to those Instacart workers stationed at Whole Foods stores who decline a new job from Instacart or aren’t offered one. The payment will be based on the maximum monthly income they earned through Instacart at any point in 2018.

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posted 1 day ago on re/code
Plus: Procter & Gamble buys Walker & Co.; millennials are ghosting their jobs like they would ghost an ex-boyfriend; and best lists, worst lists. President Donald Trump’s former personal lawyer Michael Cohen was sentenced to three years behind bars for making secret payments to women who alleged they had affairs with Trump, lying to Congress about Trump’s business dealings with Russia and failing to report millions of dollars in income. “I felt it was my duty to cover up his dirty deeds,” Cohen explained. Prosecutors also revealed they had struck a non-prosecution deal with American Media, publisher of the National Enquirer tabloid, for its $150,000 hush payment to former Playboy model Karen McDougal to keep her from publicly disclosing her alleged affair with Trump before the 2016 election. [Benjamin Weiser and William K. Rashbaum / The New York Times] [Want to get the Recode Daily in your inbox? Subscribe here.] The Federal Communications Commission voted to open a new review of U.S. media ownership rules that could reverse a rule prohibiting mergers among the four largest broadcast networks. FCC Chairman Ajit Pai said the agency is “teeing up a number of questions” on the issue, and would keep an open mind as to whether the rules remain necessary to promote competition. The FCC also approved a controversial measure that gives mobile carriers the authority to block text messages. The order, supported by the FCC’s Republican majority, classifies text messages as a part of an information service as opposed to a telecommunications service, which prohibits carriers from blocking or discriminating against their users. [Ted Johnson / Variety] Procter & Gamble acquired the health-and-beauty startup that was aiming to build the Procter & Gamble for people of color. P&G has purchased Walker & Company Brands, maker of Bevel men’s grooming products and Form beauty products; founder Tristan and Walker will continue to run it as CEO. Walker & Company will move its headquarters from the heart of Silicon Valley in Palo Alto, Calif., to Atlanta, Ga., where the startup’s largest customer base resides. Investors are said to have recouped the majority, but not all, of the nearly $40 million they invested in Walker & Company, which means P&G paid somewhere between $20 million and $40 million for the startup. Here’s Walker’s interview with Kara Swisher at a 2017 Code Commerce event. [Jason Del Rey / Recode] Economists report that workers are starting to act like millennials on Tinder — they’re ditching jobs with nary a text. Companies across the country say that “ghosting” — silent exits — are on the rise, and recruiters at global staffing firms have noticed a “10 to 20 percent increase” in ghosting over the past year. Analysts blame America’s increasingly tight labor market; job openings have surpassed the number of seekers for eight straight months, and the unemployment rate has clung to a 49-year low of 3.7 percent since September. [Danielle Paquette / The Washington Post] Pop superstar Taylor Swift used facial recognition technology to track her stalkers at a concert at Pasadena’s Rose Bowl earlier this year. A kiosk set up to show highlights of the singer’s rehearsals secretly recorded the faces of onlookers, which were sent to a security “command post” in Nashville that attempted to match those images to hundreds of images of Swift’s known stalkers. The technology could revolutionize policing, medicine, even agriculture, but its applications can easily be weaponized— should we be worried? [Dave Gershgorn / Quartz] What happens if/when Facebook goes the way of Myspace? Should the company ever collapse — or become so clearly moribund it might as well have died — more than a billion people worldwide would need to unwind their relationship with the platform. We’ve lost plenty of networks before, and one day, we’ll be done with Facebook, at least as we know it. Will it be done with us? [John Herrman / The New York Times Magazine] Top stories from Recode 2018’s tech trends and tribulations in 14 charts. Here’s a visual look back at the year. [Rani Molla] Lyft has eaten into Uber’s U.S. market share, new data suggests. Uber controls the majority of U.S. ride-hailing, but Lyft is growing twice as fast. And both plan to go public in early 2019. [Rani Molla] New York City Council members railed against Amazon in the hope of renegotiating the HQ2 deal. The first of three public hearings on the terms of the previously secret deal were held on Wednesday. [Shirin Ghaffary] The big business of being a social media star. Platforms like YouTube and Netflix are at war, and on the latest Recode Media, Shot Studios CEO John Shahidi says he’s happy to sell content to all of them. [Kurt Wagner] This is cool The best of things. The worst of things.

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posted 2 days ago on re/code
Here’s a visual look back at the year. There’s been a lot to keep track of this year. We’ve endured disasters both natural and manmade, political polarization and the relentless encroachment of big technology companies. Some might say 2018 was even crazier than 2017. Before we leave it behind, here’s a look back at 2018’s tech, tribulations and trends in charts. Amazon’s HQ2 contest played on our emotions This is the year Amazon stole the news cycle with its nationwide contest — or con — for a second headquarters. Cities around the country and in Canada prostrated themselves before the e-commerce giant, offering tax breaks and name changes in hopes of winning the HQ2 and the 50,000 jobs that come with it. In November, over a year after the contest began, Amazon announced it would be splitting its new headquarters between Long Island City in New York and Crystal City, Northern Virginia — likely suspects all along. On social media — if not in real life — the decision upset people in the cities that didn’t get an HQ2 as well as the cities that did. Negative sentiment about the decision far outweighed positive online, according to data from consumer insights company Crimson Hexagon: if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["MPOPH"]={},window.datawrapper["MPOPH"].embedDeltas={"100":780,"200":623,"300":567,"400":550,"500":525,"700":508,"800":508,"900":508,"1000":508},window.datawrapper["MPOPH"].iframe=document.getElementById("datawrapper-chart-MPOPH"),window.datawrapper["MPOPH"].iframe.style.height=window.datawrapper["MPOPH"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["MPOPH"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("MPOPH"==b)window.datawrapper["MPOPH"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Social media usership plateaued in its most valuable regions 2018 spelled the end of social media growth in the U.S. and North America. Companies like Facebook, Twitter and Snap are still growing their user bases overseas, but stagnation at home will be painful. That’s because these companies rely on advertising to pay the bills and advertisers pay a premium to reach U.S. consumers, making them disproportionally important for the social media industry’s revenue growth. (function() { var l = function() { new pym.Parent( 'end-of-social-media__graphic', 'https://apps.voxmedia.com/recodeviz/end-of-social-media/'); }; if(typeof(pym) === 'undefined') { var h = document.getElementsByTagName('head')[0], s = document.createElement('script'); s.type = 'text/javascript'; s.src = 'https://pym.nprapps.org/pym.v1.min.js'; s.onload = l; h.appendChild(s); } else { l(); } })(); Elon Musk tweeted himself into trouble Elon Musk went on a Twitter bender this year. A spate of uncouth tweets managed to cast a cloud over his electric car company — which actually performed pretty well this year — and its stock. In the most dramatic example, the Tesla CEO had to step down as chairman and settle with the Securities and Exchange Commission after he prematurely tweeted that he’d be taking Tesla private — at the nice round price of $420 a share — and that he had “funding secured.” The take-private deal never happened. Still, the tweet initially sent the stock up 10 percent to close at $380. But the price generally went down from there, only beginning an upward ascent once the SEC agreed on the settlement, which would require that Tesla oversee Musk’s tweets. However, it doesn’t look like that promise is being fulfilled. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["VhIq4"]={},window.datawrapper["VhIq4"].embedDeltas={"100":639,"200":575,"300":550,"400":550,"500":550,"700":550,"800":550,"900":550,"1000":550},window.datawrapper["VhIq4"].iframe=document.getElementById("datawrapper-chart-VhIq4"),window.datawrapper["VhIq4"].iframe.style.height=window.datawrapper["VhIq4"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["VhIq4"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("VhIq4"==b)window.datawrapper["VhIq4"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Electric vehicles had an electric year Already, 2018 is a record year for electric vehicle sales in the U.S. and we only have data through November. So far, about 313,000 plug-in electric vehicles have sold in the U.S. this year, 57 percent higher than last year’s total sales, according to data from InsideEVs. Electric vehicle sales were driven by Tesla’s Model 3, which sold 114,000 — about a third of all electric cars in the U.S. this year. It was followed by the Toyota Prius Prime, which sold about 25,000 through November. This has all happened while Trump’s steel and import tariffs have wreaked havoc on the car industry at large. It’s been less painful for Tesla, which makes its vehicles in the U.S. Bonus: Electric scooters had a great year, too. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["dGG94"]={},window.datawrapper["dGG94"].embedDeltas={"100":617,"200":539,"300":525,"400":500,"500":500,"700":500,"800":500,"900":500,"1000":500},window.datawrapper["dGG94"].iframe=document.getElementById("datawrapper-chart-dGG94"),window.datawrapper["dGG94"].iframe.style.height=window.datawrapper["dGG94"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["dGG94"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("dGG94"==b)window.datawrapper["dGG94"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Deadly wildfires burned through California California was inundated with deadly wildfires — if not media coverage of those fires — this year, as some of the most destructive wildfires in the state’s history destroyed landscapes and lives. The Mendocino Complex Fire in July burned a record number of acres — 460,000 — while Camp Fire was the deadliest, with around 80 casualties. San Francisco’s air quality was so bad that enterprising Uber drivers sold masks out of their cars. A recent government climate report says these fires are worse than they would have been without global warming. Increased heat and drought will only compound the problem in the future. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["aCZf9"]={},window.datawrapper["aCZf9"].embedDeltas={"100":575,"200":500,"300":500,"400":500,"500":475,"700":475,"800":475,"900":475,"1000":475},window.datawrapper["aCZf9"].iframe=document.getElementById("datawrapper-chart-aCZf9"),window.datawrapper["aCZf9"].iframe.style.height=window.datawrapper["aCZf9"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["aCZf9"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("aCZf9"==b)window.datawrapper["aCZf9"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Facebook kept betraying our trust A lot of people thought about deleting their Facebook account in 2018. There was even a #DeleteFacebook campaign. Again and again users were reminded that they were products, not the social media company’s customers. This year, more evidence emerged showing how Facebook was manipulated to interfere in the 2016 presidential election. We also found out that a third party, Cambridge Analytica, was able to collect information on countless Facebook users without their permission. Most recently, we learned that top Facebook executives sought to keep some of this information hidden. These screw-ups affected Facebook’s stock price and users’ trust. The result: Facebook is the least trusted of all major tech companies, according to an online survey by consumer research company Toluna conducted this month. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["M1CJU"]={},window.datawrapper["M1CJU"].embedDeltas={"100":675,"200":575,"300":525,"400":500,"500":475,"700":475,"800":475,"900":450,"1000":450},window.datawrapper["M1CJU"].iframe=document.getElementById("datawrapper-chart-M1CJU"),window.datawrapper["M1CJU"].iframe.style.height=window.datawrapper["M1CJU"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["M1CJU"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("M1CJU"==b)window.datawrapper["M1CJU"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); #MeToo made it through 2018 The #MeToo movement is still going strong in 2018. This year, more than 100 powerful people have been accused of sexual misconduct, according to an ongoing Vox list that parses news reports. The movement, which became mainstream in 2017 after a number of women publicly accused producer Harvey Weinstein of sexual harassment and assault, aims to show solidarity with, and de-stigmatize, victims. The result is that more women have felt empowered to come forward and bring their abusers to justice. Here’s a look at the numbers this year by industry: if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["43dQt"]={},window.datawrapper["43dQt"].embedDeltas={"100":576,"200":462,"300":437,"400":412,"500":412,"700":387,"800":387,"900":387,"1000":387},window.datawrapper["43dQt"].iframe=document.getElementById("datawrapper-chart-43dQt"),window.datawrapper["43dQt"].iframe.style.height=window.datawrapper["43dQt"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["43dQt"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("43dQt"==b)window.datawrapper["43dQt"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Cryptocurrency bit the dust This was not a good year for the blockchain — at least as far as the value of its currencies. Bitcoin — the marquee cryptocurrency — peaked at around $20,000 at the end of last year. It’s been all downhill from there. Bitcoin’s price has fallen more than 70 percent since Jan. 1. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["uFqvR"]={},window.datawrapper["uFqvR"].embedDeltas={"100":564,"200":539,"300":500,"400":500,"500":500,"700":500,"800":500,"900":500,"1000":500},window.datawrapper["uFqvR"].iframe=document.getElementById("datawrapper-chart-uFqvR"),window.datawrapper["uFqvR"].iframe.style.height=window.datawrapper["uFqvR"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["uFqvR"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("uFqvR"==b)window.datawrapper["uFqvR"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Teens think Juul is cuul; regulators not so much At least some venture capitalists and teens have found common ground this year with e-cigarette unicorn Juul. The $15 billion startup, which sells USB-shaped devices that dispense nicotine vapor, owns about 70 percent of the U.S. vaping market. But the company has been a bane to parents and regulators, who’ve come after it for being a risk for teens. In November, Juul stopped selling most of its flavored pods in retail stores and stopped promoting on social media, ahead of measures by the Food and Drug Administration that would have done essentially the same thing. Whether that stunts Juul use remains to be seen, but Juul’s relative search traffic on Google has declined from its peak last month. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["PYwKx"]={},window.datawrapper["PYwKx"].embedDeltas={"100":614,"200":525,"300":500,"400":500,"500":475,"700":475,"800":475,"900":475,"1000":475},window.datawrapper["PYwKx"].iframe=document.getElementById("datawrapper-chart-PYwKx"),window.datawrapper["PYwKx"].iframe.style.height=window.datawrapper["PYwKx"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["PYwKx"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("PYwKx"==b)window.datawrapper["PYwKx"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Trillion is the new $100 billion valuation After long speculation on who would reach the milestone, Apple in August became the first U.S. public company to have a market cap of $1 trillion. A month later, Amazon briefly hit the $1 trillion mark during intraday trading. Hiding in the wings, there’s Microsoft, which hasn’t reached a trillion but currently holds the title of most valuable public company thanks to a recent decline in Apple’s stock price. What does this all mean? The biggest tech companies are getting even bigger. Also, inflation means a trillion isn’t what it used to be. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["Ejetg"]={},window.datawrapper["Ejetg"].embedDeltas={"100":625,"200":575,"300":550,"400":550,"500":525,"700":525,"800":525,"900":525,"1000":525},window.datawrapper["Ejetg"].iframe=document.getElementById("datawrapper-chart-Ejetg"),window.datawrapper["Ejetg"].iframe.style.height=window.datawrapper["Ejetg"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["Ejetg"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("Ejetg"==b)window.datawrapper["Ejetg"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); A blue wave swept the House for midterm elections Halfway through President Trump’s term, his party suffered a defeat as Democrats added 39 seats in the House to achieve a majority. The change will provide a check on presidential powers and a receptive audience for special counsel Robert Mueller, should he find proof of illegal conduct during the 2016 presidential elections. That said, the “blue wave” fell short and failed to unseat Republican majorities in the Senate and in governorships around the country. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["HrPFY"]={},window.datawrapper["HrPFY"].embedDeltas={"100":341,"200":277,"300":252,"400":227,"500":227,"700":202,"800":202,"900":202,"1000":202},window.datawrapper["HrPFY"].iframe=document.getElementById("datawrapper-chart-HrPFY"),window.datawrapper["HrPFY"].iframe.style.height=window.datawrapper["HrPFY"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["HrPFY"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("HrPFY"==b)window.datawrapper["HrPFY"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Tech companies are spending record amounts on fixed assets Internet companies are pushing capital expenditure to new heights. The biggest tech companies — Google, Facebook, Apple, Amazon and Microsoft — are acquiring everything from real estate to data centers to warehouses in order to keep up with customer demand and each other. It remains to be seen whether investing all this cash will put more distance between these companies and their competitors or if it will just be another burden on their balance sheets. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["baivU"]={},window.datawrapper["baivU"].embedDeltas={"100":637,"200":542,"300":500,"400":500,"500":500,"700":500,"800":500,"900":500,"1000":500},window.datawrapper["baivU"].iframe=document.getElementById("datawrapper-chart-baivU"),window.datawrapper["baivU"].iframe.style.height=window.datawrapper["baivU"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["baivU"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("baivU"==b)window.datawrapper["baivU"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); The winner of the battle royale: Fortnite This has been a great year for free-to-play video games, especially those that can be played on smartphones. Epic Games’ Fortnite had the highest revenue this year, from January to November, according to data from SuperData/Nielsen. The measurement firm noted that Fortnite has been neck and neck with its No. 2, Tencent’s Honour of Kings, which also added a battle royale mode. Indeed, battle royale — a genre in which numerous (usually 100) players fight to be the last man/woman standing — is the real winner. It went from rare to mainstream in just two years. SuperData, which is now owned by Nielsen, wouldn’t provide revenue numbers as they had earlier this year. At the time, Fortnite brought in a record $318 million in revenue in one month — not bad for a game that doesn’t actually require you to buy anything. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["K6bmR"]={},window.datawrapper["K6bmR"].embedDeltas={"100":758,"200":641,"300":602,"400":602,"500":563,"700":563,"800":563,"900":563,"1000":563},window.datawrapper["K6bmR"].iframe=document.getElementById("datawrapper-chart-K6bmR"),window.datawrapper["K6bmR"].iframe.style.height=window.datawrapper["K6bmR"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["K6bmR"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("K6bmR"==b)window.datawrapper["K6bmR"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Americans moved on from MoviePass Worth $3,000 per share last December, MoviePass parent company Helios Matheson Analytics is now trading for around 2 cents a share. Its pricing model seemed too good to be true: You could basically see as many movies in the theater as you wanted for $10 a month — about the price of a single movie theater ticket. It was. Unsurprisingly, the company burned through cash and had to raise prices and limit its offerings. Recently, MoviePass added a three-tiered payment plan that’s much more down to earth. The move sent the stock up 16 percent earlier this month — not a very difficult feat for something priced so low. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["5eBhW"]={},window.datawrapper["5eBhW"].embedDeltas={"100":575,"200":525,"300":500,"400":475,"500":475,"700":475,"800":475,"900":475,"1000":475},window.datawrapper["5eBhW"].iframe=document.getElementById("datawrapper-chart-5eBhW"),window.datawrapper["5eBhW"].iframe.style.height=window.datawrapper["5eBhW"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["5eBhW"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("5eBhW"==b)window.datawrapper["5eBhW"].iframe.style.height=a.data["datawrapper-height"][b]+"px"});

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posted 2 days ago on re/code
Platforms like YouTube and Netflix are at war, and Shots Studios CEO John Shahidi is happy to sell content to all of them. On the latest episode of Recode Media, Shots Studios CEO John Shahidi talked with Recode’s Kurt Wagner about how the company is embracing its role as an “arms dealer” in the war being fought among platforms like YouTube, Netflix, Spotify, Apple Music and Twitter. All those companies want content to differentiate themsleves, he explained, and Shots cuts deals between those companies and the seven young online media stars it manages. “What’s the point of going to battle against everyone else when you don’t have premium content?” Shahidi asked. “What we wanna do is supply, you know? Like, ‘Hey, Netflix, do you need something?’ Well, guess what? Guess who’s got the best mobile creators? And we all know Netflix, that your mobile growth is growing.” Earlier this year, his company produced a documentary series for Netflix about one of Shots’ acts, the Brazilian musician Anitta, called “Vai Anitta.” And unlike a traditional movie studio that might see Netflix as an alternative to theatrical distribution, Shots assumed the movie would be watched on her fans’ phones. “When we were reviewing the video, the editing and everything post-production, the Anitta show, we weren’t watching it on a TV,” Shahidi said. “And not only that, Sam [Shahidi, John’s brother and co-founder] went on eBay and bought some of the most popular phones in Brazil, which is not the iPhone. Different Samsung phones are the most popular phones down there, and we would test these and we would zoom in on the faces and we would change the coloring based on those devices that are popular in Brazil.” You can listen to Recode Media wherever you get your podcasts — including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts and Overcast. Below, we’ve shared a lightly edited full transcript of Kurt’s conversation with John. Kurt Wagner: This is Recode Media from the Vox Media Podcast Network. I’m Kurt Wagner, in for Peter Kafka, and today I’m in Los Angeles with John Shahidi, the co-founder and CEO of Shots Studios. It’s Shots Studios? John Shahidi: Correct. Not Shots anymore? Not Shots. It used to be just Shots. Now it’s Shots Studios. No, it’s not Shots. I knew you back when you were just Shots. Yeah. Or Shots app. It’s not Shots app. Or the Shots app. Nope. Rest in peace. Rest in peace, yeah. The selfie app. We have a million things to get to. I’ve known you for a handful of years now. We actually worked on the same floor, back when it was Shots app, and that was at Mashable back in the day. So, I’m really excited. Now you’re doing all kinds of stuff around media. You’re managing some ... what I used to, would have called social media stars. Now they’re just like stars, that are musicians and people like that. Why don’t you give us a quick update on what Shots Studios is, and then I wanna go back and figure out how you got here. What do you guys actually do? Well, there’s five parts of Shots Studios. Five parts. Yeah. And tech is not one of them. Is that good? You’re smiling, I feel like. Well, it’s a little bit of a relief until we figure out what we want to do. I mean, tech’s always gonna be a passion, my brother and I before, we even made video games. Always just into tech, right, Sam used to hack into Xboxes just to pay for like different stuff when he was going to college. It’s always been, I’ve always had an itch — and don’t get me wrong, probably once a week I call Sam, “I’ve got an app idea.” He hangs up on me, he hangs up, or I’ll call him and say, “You got a sec?” And he’s like, “Not for an app idea.” So I still, it’s always ... but right now, it’s really nice to focus on what we’ve been focused on for the last little over two years. I think it was April 2016 when I think you even wrote about Shots making the pivot from an app to a content studio. Okay, so the five things that you do. Five is, one is we’re a production company. We create all our videos, whether they’re an Instagram sketch or a YouTube sketch or a music video or even our new show on Netflix. Yup, the Netflix show. Everything’s in-house. We have our management company. So, we actually ... sometimes we’ll produce for a third party if it’s an interesting deal — not financially — if it’s something that kinda fits our DNA. But most of the content we create are by artists, musicians, comedians that are managed in-house as well. So, if there’s an idea, we don’t have to go through the politics of talking to a manager, then an agent, then a lawyer, then a business manager, sometimes a family member. We just go. You just do it all yourself. And you manage, what? A half-dozen people or so? We manage seven folks right now, yeah. We’ll be adding to the roster quite a bit in 2019, which I could get into a little bit. Then we have our music side, which isn’t announced yet, although it will be something on the music label side that we’re really excited about but we’re not announcing it until probably after the holidays. Okay. Because a handful of those seven are musicians. Correct. Are all of them musicians or most? No, no. I would say four of seven are musicians. Four of seven are musicians. Okay. So you’re doing music. All right, that’s three. And then there’s the touring side. With Alesso and Anita, eventually Lele and Rudy are going to get into the touring stuff. But then, even the non-musicians, the comedians, or the entertainers like Blaney. There’ll be some different things; it doesn’t always have to be a concert. It doesn’t have to be a festival. It will be getting into the play business and different types of shows, anything that’s really entertaining but also visually rich as well, so we can film. Yup. And then there’s our product and brand teams which is led by Marshall Osborne, who was actually a friend of mine in San Francisco. He worked at Uber, worked at marketing there, he recently just joined our team, too. We’re on products, brands. This year, we’ll have over 20 billion minutes watched just on YouTube alone. Yeah. We’re always trying to explain to brands why we’re better than other people, why our watch-through and this and that... And brands still are kind of really a little bit scared to spend money on social media. They’re still on the traditional side, so until they get educated, we’re going to create our own products, as well. Products being, I guess, you said you don’t want to build apps anymore, so what is a product in this case? A product ... It could be mostly consumer good products, could be in the beauty space, could be in the food and beverage space. Oh, so literal, I don’t know, we’re drinking out of these Shots Studios mugs right now. An actual physical product like that? Yeah, there’ll be merchandising. Food and beverage and beauty are our focus right now. But then, we’ll be getting into the merchandising business. You could eventually maybe see a pajama company maybe owned by us. Oh, wow, pajamas. That’s kind of random, no? Well, that’s the thing with this company. We are just random. It’s gotta be something that not only is there a need for it in the world and in the consumer goods space, but also we’ve gotta be able to create content around it, right? So I could just see sleepover series that we produce for Facebook Watch, a slumber party show, and the pajamas in this show happen to be all our pajamas, and that’s available for sale on whatever.com. So, you have seven people and basically, you do everything around their careers. You produce, you manage, you help with tour, maybe you’re gonna build products that have their brand. So, pretty much these seven people, anything that touches their professional creative lives is what you guys are helping to run. Yeah, it’s an entire experience. Even pretty soon here, we’re gonna have a couple, outside of just the creators and artists, we’re gonna start signing — and this is where our roster’s gonna grow next year — songwriters and producers. So, even the lyric of the song is written by someone in-house. The beat of the song. The melodies of the song will be produced in-house, sang by artists. So, it’s a whole experience from the writing down the lyric of the song to putting that lyric over a beat to the artist recording it, to it being mixed and engineered will be in-house. We’ll be creating the music video for it to the marketing side which goes to our products and brands team will do all the marketing for the song, the label that distributes it. Everything is you. It’ll be a whole experience. So, let’s go back in time for a second because this is not what I would have pegged you as doing when we first met. I mentioned we literally worked on the same floor which is how I met you which is kind of funny, but you were running a selfie app called Shots, and part of the reason that it was a big deal was because it was Justin Bieber-backed, he’s one of your best friends, he was an investor and used the app all the time. Still is. He’s still an investor. Yeah. What the heck was Shots app? Well, Shots app was everything, you know, that we’re creating right now, the initial plan was to create this stuff in-house, find the next social media star within our app, which instead of finding them in our app we found them on Vine. But, we went to create this ecosystem where we could go in and we could find talent within our app and team up with them and produce content that would live inside our app. Which we actually tried, right before we pulled the app, we had our Awkward Puppet series. You tried to do original content inside of Shots. Yeah, yeah. And we did. We uploaded the Awkward Puppet series into the app. We did a few sketches inside the app. And then we put that onto YouTube and when it went on YouTube ... There’s a lot more people on YouTube. Yeah, a lot more YouTube, we had a discoverability issue, you had to be following the Awkward Puppets page or Rudy’s page to have seen the Awkward Puppets. This is Rudy Mancuso, right? Rudy Mancuso, who was one of our artists. Yup. But with Rudy, so … and Rudy was actually, Rudy was in the beginning, “I don’t want it on YouTube. I don’t care, we’ll make this work.” He just wanted it inside the app. He loved it. He was the one we were fighting, I was like “Rudy, trust me, let’s do it on YouTube.” But he was so Team Shots at the time where he was like, “No, it’s so much cooler to have our own thing,” he kept it on ours even though he wasn’t an investor at the time. He was just part of, he just believed in it so much, but then I was like, “We’re doing a disservice to you, Rudy, this is too funny, too good.” Yeah. And as soon as we put it on YouTube, it blew up and then it got the attention of YouTube where we spoke with them more and we said, “You know what, we’re going to bring everyone onto YouTube.” Explain to people who don’t know how you get an app that’s invested in by Justin Bieber, right, ‘cause he’s an international superstar. How does that come about for someone like yourself? Well, I explained all this to Justin. But how did you even meet him? I met Justin through a couple mutual friends, two different people, one being his father and one that was at the time his jeweler, was actually a friend of mine ‘cause he happened to be Mayweather’s jeweler, who Mayweather was an investor. This is Floyd Mayweather, the boxer. Floyd Mayweather, yeah. So you knew Floyd, too. Yeah, so I knew Floyd, who I met, that’s a different story, whole different story with Floyd, how I met him and how he invested. He actually tried to give us cash, literally, like $500-whatever. He tried to give you $500,000 in cash. In cash, yeah. And what do you say with that when ... Oh I had to argue with him for two hours, I said, “Hey, I need a wire.” He just didn’t understand what a wire was. He was like, “No,” he’s like, “I pay everything cash.” But anyway ... All right. Weird world. So you know Floyd Mayweather, his jeweler is Justin Bieber’s jeweler, you meet Justin Bieber. Mm-hmm. So I met Justin and Justin actually was a fan of our apps. He was using, at the time before the Shots app we had created a few different iPhone games. Yeah. And he was playing the games. So my friend Ben Baller who’s the jeweler, he happened to be with Justin, they had some business together and he saw that Justin had a couple of our apps on his phone. He was like, “Yeah, I know the guys who made that.” He’s like, “I’m a huge fan.” Long story, he gave him my info and I met with Justin, explained to him everything. Actually, I remember taking, I don’t know, a 20-25 slide deck printed out to his house, and I was like showing content, creating content, we wanted to create cartoons, we wanted to build an app where we had user-generated content and original content all in one, and that’s what we wanted to create. And that’s when he said, “I want to be part of this.” And why do you start with the selfie, though? Because that’s what it was known as, it was known as a selfie app. And I remember talking to you early on and it was like — and we can get into this a little bit later on — but you were like, “Hey, we want to build this kind of network where people don’t feel pressured about likes.” I don’t think you could ... you couldn’t see how many likes photos got at the time ... Yeah, no comments. You could only comment if you sent someone a message back, so it kind of, you know, created this extra barrier where someone couldn’t just leave a nasty comment. So, you really seemed to be trying to clean up this social networking experience to, in my opinion, that seemed like the goal much less than this content idea that you ultimately came up with. Well, we wanted to because you can’t move backwards. You can’t have comments and everything at first and then remove it. And we just wanted to start in a place that was positive and it was just not even positive, but just, I lack the word, but it was just like don’t overthink, you known what I mean? Just post. Low barrier. We didn’t even have filters. Yeah, very low barrier. Just, you know, just post, you know, because remember, that was before Snapchat Stories. That was before Instagram Stories, and before Twitter-supported photos and before Facebook was really mobile. I don’t even know if Facebook had a mobile app back then. Remember, it took them a long time to have a mobile app and their mobile app was awful the first year. So, really, okay, where was that place where you could just snap a quick picture? You know what I mean? I just took a picture of my Google Home Hub and I posted it on my Instagram Story. Back then, there was nowhere to host anything like that. So that’s what Shots app was. So don’t think about it, don’t worry about the negative comments, post that picture of Google Home Hub. Don’t worry about someone saying, “Hey man, you’re destroying my feed,” or this and that. There was no filters, so don’t worry about someone making fun of a wrinkle or how your makeup’s done. Don’t overthink. Yeah. And then that’s why the selfie, that’s why, you know, and there was a need for selfies. You know, really at the time, there was nothing, you know, other than an IOS camera, there was no social network that had a reverse camera. You know, so, I don’t even know, yeah, I don’t even think Instagram, even if Instagram did, no one was really using the camera. Even to this day, people don’t use the camera for a timeline for, obviously, for Stories you use the camera but for a timeline post, you weren’t using the Instagram camera. You were taking things from a camera roll, making them nice and uploading them. And, of course, you had arguably the world’s most popular selfie-taker, right? Justin Bieber as a user and investor. Yeah, yeah, yeah, yeah. He loved taking the selfies so we just knew he was the right person. You know, but it wasn’t necessarily about the selfie. He also believed in the very long-term vision of this company. Yeah. That’s why he wanted, he didn’t want to just invest in the selfie app, he wanted to invest in everything that we were doing. And to this day, he’s still super supportive of everyone on our team. Yeah, so he’s still an investor, but he’s not one of the seven that is part of the, kind of, management that you’re doing. No, no, no no. He’s managed by Scooter Braun. Yeah, yeah. You manage — I said this kind of at the beginning — I always thought of these guys as internet stars because a lot of them got famous on Vine, which you mentioned. Walk me through how this team came together. So, where did you find Rudy Mancuso, for example. He’s a good example not only because he’s very talented, he also performed at our Code Conference in May. That was great. And he was awesome. But how did you find this group of people, through Vine and other platforms like that? They were, you know, at the time, they were using Vine for video but they were using the Shots app for photos. And I remember looking at, you know, just data on our top users and I was just really interested. And we used to have get-togethers, you know, something that YouTube and Instagram do actually a great job of is catering to the community. They have — Instagram, YouTube, even some of the streaming networks like Spotify, Apple Music — they all have these teams that cater towards the artists, the influencers, the comedians, the athletes, they all have different teams now. It took a while for them to build teams that actually cater towards their, you know, the power users. The different verticals. Or, the users in each of those verticals. Yeah, but now they’re split up. But back then they didn’t really have that, and we wanted that. We wanted, you know, if you had an issue, right, like if you didn’t have your login, there was like VIP lines. So, we, you know, we just assumed who we knew, which was all our investors obviously were using it, Justin was using it, Mayweather was using it, I think Mayweather announced one of his fights exclusively on our app. Yeah. Marlon Wayans, Mike Tyson, Cristiano Ronaldo. So, we assumed that they were our top users. And then Sam, my brother Sam, gave me data for our top users. And, it was like Justin 1, Kylie Jenner 2, and it was like a list of like a bunch of people I’ve never heard of. It was like, then I was looking at, you know, Snoop Dogg was like No. 18, I was like, who are all these people in between? I thought Snoop Dogg would be the biggest guy, especially he was very active on social, he was using Twitter, HQ, and doing viral stuff on Instagram. And, when I started looking at our names we started reaching out and Rudy was one of them, Lele was one of them, Anwar was one of them, King Bach. Really, you did not know them before ... I did not know. The only one I recognized when I looked them up was King Bach. I was like, “Oh, wow, that’s the guy. I see his videos.” Right. But meanwhile they were very popular on Vine. They were. These guys were all part of that original Vine star crew, right? Correct. Not only were they big on Vine but they were also, they were big on Vine, but they were looking for a place to go to to get away from the comments and bullying. Because Vine users are probably the most cruel. Like, if you read some of their comments and just video platforms. Even YouTube comments are a lot more cruel than other platforms. ’Cause I think a lot of Vine users, you go through their profile — I’m talking about the regular users — you go to their profile and you don’t see their personal life. Where Instagram, it’s like, oh okay cool. You wanna see that? Well I saw a picture of you and your mother, you know what I mean? Like, on Vine and YouTube they don’t really have content where you can’t ... it’s easy for someone to hide, you know, on the Vine account. So I think they were looking for that escape, and I think they were hearing about an app that they could use for photos and they could use Vine as video. That’s how it was happening. So then when we start reaching out to everyone, understanding, and I said, “These are the guys that we should be creating the content with.” Yeah. And you do something really unique, so for those who don’t know, the seven people that you manage, to me it doesn’t really feel like they’re all operating in seven different worlds. Like, Rudy Mancuso directs a music video for Lele Pons who appears in a music video for Anitta, who’s one of the top Brazilian pop stars, like they are participating in each other’s projects, like it’s almost a little team thing. I assume that’s obviously by design. Yeah. Like, how did you get them to buy into this notion of, “Hey, you could all be kind of famous on your own, or you could all kind of collaborate together.” So I think, well, there’s a business behind it but then there’s also what we call the Shots family. And the Shots family is in the ... Let’s not make work first, let’s make friendship first, we’re gonna spend a lot of our life together. So let’s work together, let’s, you know, there’s a no-negativity rule. You know, someone ... That’s a natural rule. That’s a nice sure rule. It’s like, uh, the kindergarten rule that I would have. Yeah. Well there’s no, like, you can’t call me and complain about someone. If you don’t agree with what so-and-so did or said or posted, you call them, you don’t call me and complain like, “Hey, why’s so-and-so doing this?” You don’t want to babysit, basically. Yeah, none of that. We’re very hands on with our business, as I mentioned the five different parts. Yeah. So we’re very active. And we’re always there, if you’re having a bad day, you could call me. But I don’t wanna hear you complain about something else. And it’s not just within our group. It could be another creator. There’s a lot of creators that have been in the press for a lot of different controversies with internet creators last year. I don’t wanna hear about it. Yeah. I saw it. I saw what so-and-so did and posted and is getting backlash for, I saw it. Just learn from it. Yeah. We don’t do that. But I don’t wanna hear about it, like oh hey, you know, I’m not a gossip guy. So there’s that one part, but then there’s the strategic business part. Every one of our seven owns their vertical. Like Anitta, you mentioned. Anitta’s the biggest star in Brazil. Like, No. 1. I did not know much about Anitta. You have a Netflix show, which you mentioned, it’s about her career, I guess. I was pretty blown away, I don’t know anything about the Brazilian music scene, I mean, she’s like selling out massive stadiums full of people. Oh she does stadiums, she does festivals down there... She’s growing internationally, but you know what’s interesting about Anitta is 12 percent of Brazil population — which is 220 million people — follow her on social media. Yeah. That’s how powerful and big she is. She’s, you know, we call her the queen of Brazil. A lot of people, the press, the media, other artists call her the queen of Brazil and so she owns that market, so we don’t...we’re not gonna go look for another Brazilian to step on her toes. So that also makes that no-negativity rule easy, right? ’Cause she doesn’t feel like she’s competing directly with the other members of your crew here. Correct. Or Alesso, for instance. Alesso’s our producer/DJ. Yeah. That’s it. You know. We get DJs calling us all the time, “Man, I let go of my manager.” “Hey, let me know if you need a referral.” “Well, what about you guys?” “We have our guy.” That’s funny. And he’s part of this team. We don’t ... It’s kind of like you’re forming a sports team or something like that. It’s like, all right you got your quarterback, you got your left tackle, you got your ... I think I would kill it as a basketball coach. There you go! I’m thinking about it. You’re general manager of the Los Angeles Lakers. I think I would kill it as a basketball manager, watch these guys like, have you talked to them? Oh yeah, I know exactly what to do. Yeah. I could kill it on the basketball court. So you’re basically saying these are the different areas where we need someone to contribute to the group. Mm-hmm. You find someone to fill that need and people buy into that. Well, Lele is our pop star. International. Right? She’s big in the Spanish world and the English world. She’s also our comedian. She’s our overall entertainer. Yeah. You know, Rudy’s our entertainer but Rudy, we’ll see a lot more piano in 2019 with him. He’s gonna own the piano. There is no new generation Billy Joel, Elton John. Yeah. You know? Like, he should be that. Everyone loves the piano. So explain to me how ... I can imagine, explain to those of us who are listening here how it benefits one another for them. I mean, is it simply, hey, Rudy tags Lele in a video and therefore they reach both user bases or is it more complex than that? Yeah. Well, I’ll give you a great example and you could see this in a Netflix show. Anitta’s career started changing when she started collaborating with Alesso. Alesso, at the time when we started working with him, owned ... Who is a DJ, by the way. Alesso’s our DJ producer, who’s also producer, he’s a dance DJ. He is massive in Europe. No. 1 market, like, by a landslide in Germany, Sweden, U.K., Italy. And when we started working with Anitta, at first, 99 percent of her followers were Brazil. At first. Yeah. One percent was spam. Would explain why someone like me didn’t really know who she was. Yeah. You know. So 99 percent, yeah, exactly, most people. Anitta before us, and in the show we talk about it, she met everything with a dozen music managers here. And some of the biggest names. I don’t wanna say their names but some biggest names and there was like, “no.” They just didn’t know who she was. Yeah. Yeah. But we were lucky enough cause Shots app’s biggest market was Brazil. Oh. One of the reasons why we couldn’t raise money is we used to go pitch about how big we were in Brazil. And people were comparing us to Path, who was like always bragging about Indonesia. R.I.P. Path, talking about Path, yeah. Yeah. All the nice apps. And so I understood Brazil. And I understood people not understanding Brazil. Yeah. So that’s how we ... But then we’re going back to ... how this all works is so when we first started with Anitta and then Alesso was right around the same summer, summer of 2017. Okay. And we said, “Why don’t they do a song together?” And fast-forward to a little over a year later, Anitta’s selling out shows in Paris, Portugal, she did the Royal Albert Hall in London. Remember, a year and a half ago she was 99 percent followings in Brazil. Yeah. She’s selling out the Royal Albert Hall, one of the most iconic venues in the world. And Alesso’s No. 1 market is now Brazil. No. 2 market is Mexico City. Really? Yeah. And now the U.K. is his third-largest market. And so is that as simple as ... It sounds so easy when you say it like that, right? Okay, find someone who’s really popular in country x and have them work with someone popular in country y and voila. It’s that why don’t more people do this, like it’s ... I feel like it can’t be this easy. It’s easy when you’re working with logical, smart people. Right? Like it just takes one. Anitta and I were going on, messaging on WhatsApp today. She had a couple of ideas about different things and I educated her on what I thought on the ideas and why I thought that. And the response was, “Oh, okay, I didn’t see it like that, cool.” I think if you don’t explain properly to a logical person — which she’s very logical, very smart, Alesso’s very logical, very smart — but they’re also caught on the side on the brain that’s focused on creative. Yeah. Which is, one side of the brain is the creative, imaginative side and then the other side of the brain is the logical, more mathematical, putting pieces together side. Yeah. So when they’re so focused on an idea on this side, and I’m sittin’ in the office on the other side, I could explain to them clearly, and they’re smart where their brain meets in the middle, says it’s a good idea or it’s a bad idea. It will work or it won’t work. Yeah. And for me, it’s really easy for me and my brothers, really easy because they’re very smart people with zero ego. I mean, we’re talking about Anitta. I was just gonna say, long story short, they’re not high maintenance, they’re happy to collaborate and they don’t have massive egos. Anitta has over 31 million followers on Instagram. I forgot her YouTube number, it’s over 10 million on YouTube, maybe even closer to 15 million on YouTube. She can’t walk two feet in Brazil. She has her own show on Netflix that’s doing very well and more than just Brazil — in Colombia, Mexico, Spain and even the U.S. Would say even 80 percent Portuguese. She has a hit Netflix show, she has hit music out, she’s a judge on “The Voice Mexico” which is the No. 1 show. All this, and she still is humble. Yeah. You know, and that’s the things we look at, at first with anyone we work with is where’s the ego, is there an ego coming with them? And that’s when we say no to most people. That’s when ... A lot — believe it or not, Kurt — once a day someone will reach out. It could be an up-and-coming artist that’s talented or someone that’s extremely established. We say no. We say no because it makes it so much easier to do this entire thing when there’s no ego. Yeah. And they’re like, “We’ll work together with you.” So, explain the distribution strategy, because the Netflix thing is one of the first examples I can think of that feels ... something that you’re doing that’s kind of traditional media. Obviously Netflix is new but the idea of a series, documentary kind of TV show is more traditional. Most of what you do, it shows up on YouTube, it showed up on Vine back before Vine wasn’t around anymore. So are you, I mean, these are kind of ... This is a very digital strategy. I imagine that’s by design. Do you want to stay in that realm or do you want to ... Well, we wanna be where our audience is. Okay. You know? So if our audience is on Netflix, which we could tell if they are or not, then we’ll create something for Netflix, you know? But our thing is we want to be everywhere. The best way I like to explain our company is — and that’s why, going back to what I said at first, there’s no app, right? Although I can think of ideas for not building anything is I like to kind of ... So there’s like a giant war going on within all these platforms. No one really talks about it, but it’s a fact. I talk about it! I feel like it’s all I talk about these days. Okay so there’s a war, there’s a war between Instagram and YouTube. There’s a war between YouTube and Spotify. There’s a war between Spotify and Amazon. There’s a war between Amazon and Hulu. There’s a war between Hulu and Netflix. There’s a war going on, which kind of reminds me of the world. What we want to be is that one company which, we don’t know the name of the company, but you know, there’s few, you know ... We might know the name of the company, but we wanna be the company that are supplying these platforms with the missiles and tanks and armory, you know? You’re an arms dealer now. Yeah! But that’s what we wanna be, we’re arms dealers! All right! Be careful how you, ya know. Well, you know, we’re not creating arms. I know. But content is ... I mean, what’s the point? What’s the point of going to battle against everyone else when you don’t have premium content? Yeah. And that’s what we’re creating as a company. So, what we wanna do is supply, you know? Like, “Hey, Netflix, do you need something?” Well, guess what? Guess who’s got the best mobile creators? And we all know Netflix, that your mobile growth is growing. Yep. It’s no secret. Tablet, smartphone, anything mobile is growing. Which is what the 13- or 24-year-old is using to consume content. 13- or 24-year-old is not buying a $3,500 TV. Right. You know? They may even have one, they probably don’t even turn it on. They’re watching their $3,500 phone, or whatever. Yeah. Or $330 phone. Sure. Or whatever it is. And we look at that. Yeah. Anitta’s show, when we were ... Bud who’s in the room here, he was even part of this as like, when we were reviewing the video, the editing and everything post production, the Anitta show, we weren’t watching it on a TV. We were watching it on phones. And not only that, Sam went on eBay and bought some of the most popular phones in Brazil, which is not the iPhone. Yeah. Different Samsung phones are the most popular phones down there, and we would test these and we would zoom in on the faces and we would change the coloring based on those devices that are popular in Brazil. So you’re editing for a mobile Netflix viewer? Yeah. We didn’t have a big screen, even though we got this room here for that, we never, like I was telling you, we never set it up for that. There was supposed to be a screen on here and everything for us to watch the Anitta show. We just ended up watching it through Vimeo links on our phones and editing it through there and giving feedback, “Hey, it should be zoomed in here, this and that, that seems a little too dark. Boost the color.” So Netflix is in that business, YouTube is that, Instagram is almost all that. Yeah. Twitter video, Facebook video. You said you basically want to provide content to every platform out there: Netflix, Hulu, Facebook, Twitter. What works best for you right now? I think it’s YouTube, actually. Oh. Is YouTube still your biggest thing? It was the last time we spoke. YouTube is, and especially now that we’ve gotten into music. A music video is like YouTube video. Yeah. So YouTube for a few reasons. One is because music. Although Spotify has video, great video, Apple’s got ... Spotify’s got the vertical videos that we love creating for. Apple’s...God, you know. You’d could consume...Lele has her own video playlist on Apple right now. Yeah. They just launched that Apple.co/Lelepons. If you go there you’ll just see her music and visually ... But YouTube, for a few reasons. One is, when we started this, one of the reasons why when we started seeing her content being consumed outside of the Shots app, was we were monetizing for the first time. Yeah. You can actually make money from YouTube. Yeah. You can make money from day one. Yeah. You just click a button. Yeah, yeah. So, now you have revenue from there. You get discoverability because, don’t forget, it’s Google, right? Yeah. So they have the best ways to ... Whether it’s searching or serve you based off what you searched. So, I knew that that was another one of our reasons, was YouTube and Google will, if you are looking for it, they’ll figure out how to get it over to you. Yeah. Then there’s the music element, right? Yeah. But then, one of the things that we really care about is the people that work there or ... So you have a good business relationship with YouTube. Just everyone, all departments, from their music department to the YouTube music team, to their creators team, to the originals team, and now we meet ... Because in the next year, we’ll be getting more into science and education, so their STEM team, just the most incredible people who understand us and appreciate the work that we put in, because our content’s a little bit more produced than other creators. They love the fact that we’re taking someone that’s labeled as a YouTuber, say, like Lele or Rudy, and actually develop them into international stars. Lele just performed at the Latin AMAs, second-to-last slot, right before Maluma. That’s massive, never been done, never been done. That’s good for YouTube because she built her following on YouTube. All the headlines are, “YouTube star steals the show at the Latin AMAs.” Yeah. Okay. I’m gonna list off these others platforms. Give me your quick gut reaction thoughts on them. Facebook. Facebook.com? Yeah, as a platform, Facebook proper, the blue app. I like where they’re going with originals. We’re actually building some shows. For Facebook Watch? For Facebook Watch, yeah. They are giving us, so far, full freedom. They’re like, “Hey, we love what you guys are doing. You have any ideas, spit it out.” I had, I think, about eight different ideas. They loved everything. They’re very open-minded to make Facebook Watch happen. So, Facebook Watch, I believe it ... Could work for you guys. Yeah. You don’t post to Facebook Pages, though? We do and we don’t. We don’t really have a strategy. Honestly, it’s when we remember to. That’s crazy. I hate saying it like that, but it’s ... Because we also ... Even though you can monetize now on Facebook, it’s important also from a perspective angle to have as many views on a YouTube video. Right? Yeah. I would rather a Rudy video have 10 million views on YouTube than, let’s say, seven million on YouTube and three million on Facebook, because that 10 million just makes a big difference when it becomes ... Well, you can’t make money, at least not much, from the Facebook stuff, or what? I don’t know if we’re part of this program, but there is a ... You probably would know if you were part of it because you’d be making money. No, because we didn’t really follow up. So, there was a program ... You should probably do that. Maybe. Maybe, or we’ll just focus on the original stuff. Okay. Instead of taking ... We also don’t really like to recycle content, even though a lot of people do it. They create something, and I’ve even said we should be everywhere, but when I say everywhere, we should create for everywhere. So, Spotify, for instance, if it’s time for music, we don’t Spotify because Spotify is vertical videos. We’re not gonna chop up a landscape video and just zoom in on the middle, which is what a lot of musicians do. It’s a really awful experience. We have a whole team that just literally shoots vertically. It turns the camera 90 degrees and it shoots vertically, and it creates something specifically, because a vertical video’s gotta be tall. So, we’ll put palm trees, bunk beds. We’ve even joked about getting a giraffe and putting a giraffe. You have to put tall items in it. So it’s shot completely different than a wide video. Those are the things that we like to do. Right now, we don’t have the bandwidth to create something original, specifically for Facebook, unless now the original team’s called, because now there’s budgets. Because yeah, they’re paying you for it. Yeah, there’s budgets. Got it. They’re giving us some serious budgets, and that’s where now Facebook’s exciting. It’s like, okay, they get it. Okay. Instagram. That’s one of the most powerful platforms. That’s both ... I know Lele, for example, was early with IGTV. What do you guys think of IGTV? I feel like from the outside it feels ... I’ve clicked in it a few times, doesn’t ... I mean, I’m probably not the target demo, but not a lot for me there. Yeah. I’m a believer in IGTV. I think the idea is great. I think it has a product issue right now, which they’re working on. Right now, I’ve noticed in the discover section when I click on a video, it’s bringing me an IGTV video. So, I think they have this product issue right now on how do you separate this original full-screen vertical video from everything else and not ruining that experience of the square photos and videos? Yeah. Basically, discoverability, like how do I actually discover ... It just has a product issue, but you know what? That’s one app update. Someone could just walk in and be like, “Hey, I figured it out,” push one update, IGTV’s a thing. Yeah. So, Instagram is a valuable platform and audience for you and the folks that you work with? Yeah. I mean, Instagram’s our secret weapon. That’s where all our fans are. I know they’re on YouTube, too, but they’re also there. It’s a lead generator for anything with a link, whether it’s the Anitta show, which has a Netflix link, so we could put the link in the bio, swipe up on the Instagram Story is very valuable. All right, and Snapchat. Um… Yeah. You look like you don’t want to answer this one. Yeah. I mean, listen. This is the thing with Snapchat. There’s still people who use it. The product’s always been a great product. I don’t think they ... There’s some things Snapchat can do to make a comeback, but the few times we’ve tried to explain that, it’s really gone nowhere, so it’s kind of not ... With the executives at the company? Certain people, and we’re now at a place where, “Okay. Let’s just focus on the people who understand us.” That’s where we’re at, and I’m meeting with Snapchat next week, I think, but it’s just being ... The reputation is they haven’t prioritized creators. It sounds like based on your ... I’m looking at ... The people can’t really necessarily see you, but you’re clearly hesitant to maybe say what’s truly on your mind, but it sounds like at the very least, they’re not treating creators the way that you think they should be treated. Yeah. Well, there’s people who treat them better, and we also, right now, we’re doing a lot with five things, that platforms. We’re huge on YouTube. We’re huge on Instagram. We’re huge on Apple Music. We’re huge on Spotify. Actually, I’m a believer in Twitter Video. Oh, really? Yeah. What’s your pitch for Twitter Video, because I … you could convince me. Well, you know I’ve always been a Twitter fan. I’ve always been a Twitter ... I know you’re a Twitter fan. We didn’t even talk about ... I’ll do a quick aside, but back in the day, and I wrote about this, I’m not the only one, about being “Shahidi’d.” You were the first to write about it —no, no. Dan Primack. Yeah, he was. I’m sorry, Dan. If you mentioned someone on Twitter, which you have mentioned me on Twitter, I would spend two weeks of nonstop Twitter notifications from mostly Justin Bieber fans. Yeah, yeah. That doesn’t happen as much anymore. Do you think it was a lot of bots and stuff? It didn’t feel like bots at the time. No. I think I had started posting not what they wanted to see. Right? Oh. I think they loved me and Justin always being together, which we were before this, during the app days, during when he was in his creative zone. I think he really leaned on me and my brother a lot to just be around with him, but then now, he’s a married man. He’s taking a little break. Hopefully he makes a comeback soon, but taking a little break from work. I’ve been focused on building the company, moving ... So, you’re not giving Beliebers the Belieber content that they necessarily want. Yeah. Yeah, yeah. I mean, there’s still some, and they consume ... I read the comments on our videos, and they all talk about ... I love seeing the, “I love what Shots has become,” and they love the evolution of the company and all that, but it’s not like what it used to be, but that’s fine. I’m also older. I don’t need ... You don’t need the Beliebers as much. Yeah, that’s fair. Yeah, yeah. No, it’s not only that. It’s just, I want to use Twitter like you use Twitter. I go there for news and information, and I can’t ... You don’t want to be bombarded. I don’t want to miss that @reply about you because someone wants to meet Justin. Yeah. Okay. So, give me your quick pitch. Give me your 30-second pitch on why Twitter Video is still relevant. Well, there’s still a lot of users on Twitter, and the product actually is pretty decent when it comes to landscape videos. I think the vertical videos need a little bit of work, which is something I think they should prioritize because most of their users are mobile users, but the product is actually there, which is something that most platforms, it’s the other way around. Right? They have the content and the creators, but they don’t have the product. The product is there, so now all they need is the content. And we already have a following on there. Lele’s got, I don’t know, close to two million. Rudy’s got over a million. Anitta’s got I don’t know how many millions. Alesso’s got a couple million. So, we have a following there. There’s the retweeting, right? So, when you go back to what we were talking about, collaborations, there’s the collaborations with the one-click ... There’s more of a viral network effect on Twitter, yeah. Yes. Yeah. So, it just needs the right content. That’s why if you see the tweets with the most retweets and likes, they’re memes, which memes are original content, too, meaning someone created that for us to laugh. So, it wasn’t anything personal. They were trying to entertain John and Kurt. So, when you look at those, I see memes with 80,000 retweets. So, people want original content on YouTube, and I think that’s just a matter of us hiring a team. On Twitter? I’m sorry. On Twitter. On Twitter. Yeah, yeah. Yeah, and it’s just a matter of us staffing up and saying ... So, I feel like social media a couple years ago was more of almost like a science, trying to figure out what would work and what wouldn’t. Obviously, the algorithms were a little maybe newer, and people were still experimenting. What have you learned? I’m sure you’ve learned a lot of things, but if you could maybe boil it down, as someone who has groomed and helped build Vine stars, social media stars into much larger than that, what’s one or two things that you’ve learned throughout that? Well, one is to always be relatable. Understand who your audience is and create content for that audience. So, you gotta be relatable. That’s what makes Lele so big. Yeah. More so than maybe traditional TV or something like that, just because social feels intimate, or what? Yes, yes. It’s gotta be ... Lele’s best-performing videos are videos where she’s just herself, and we’ve noticed that anytime we’ve upped the productions on some of our YouTube videos, the engagement’s gone down because we don’t connect as much because of what you just said, and then also, there’s gotta be proper evolution. When we first started with the Shots family, they were on Vine. They were creating six-second videos. We didn’t jump from six-second videos to a Netflix show, which is 30 minutes an episode. We went from six-second Vine videos to then we moved everyone to the Shots app, which Shots app was 15 to 30 seconds. That was a quick ... We X’d that only because all the reasons that I said before. So, then we actually, before we went to YouTube, we went to Instagram. Instagram at the time was 30-second videos, so it was before they changed it to one minute. So, now we went from six seconds to 15 seconds to 30 seconds, figuring out how to be able to keep your attention, beginning, middle and end, tell us a story in the short amount of time. Then after 30 seconds, Instagram opened up to one minute, and now it’s one-minute videos. So, we started creating one-minute videos. Then when we got the hang of that, anywhere from 30 seconds to one minute, most of them were around 45 seconds, we launched our YouTube channels. Our first YouTube videos were 90 seconds, two minutes. So, there’s really a total evolution, step by step. Three minutes, four minutes, five-minute music videos. Rudy’s released a couple 12-to-16-minute sketches on his channel. Then we did the Anitta show on Netflix, which is, I think, 28 minutes an episode. All right. Last thing. The next logical step after a 28-minute episode is a movie or a documentary or something that’s an hour or more. Well, I really enjoyed creating the Anitta show. It was so beautiful. The Netflix show. Yeah. The Netflix show of Vai Anitta. That one was like taking a team that we brought onboard with two of our team members, Alicia and Charlie, who collectively have ... They worked for NFL Films. They did all the Hard Knocks. They did Mayweather’s All Access. That’s how I met them, through Mayweather. Got it. So, bringing them, who collectively, Charlie and Alicia, have 22 Emmys, and then teaming them up with our Mobile First guys, Bud Calvin, Wes, just our existing team that focuses on YouTube videos, and then having these two worlds meet is what delivered the Anitta show. So, I think more shows like that is gonna be really interesting for us, and then we want to try our first film. Do you want to do a movie? Yeah. We want to do ... I think next year, we’ll probably try our first, maybe even two movies in 2019. Really? Two movies in the same year? Mm-hmm. Yeah. Rudy’s got an itch. He’s got a really, really amazing idea for a movie. Are these documentary-style or like sitcoms? No, these will be scripted. Yeah. No, those will be scripted film. A film? It will be a scripted comedy, on the comedy side, with a touch of music, because this company is about music. So, it’ll be a comedy with music. The comedy musical from Shots Studios. Yeah, yeah, yeah, yeah. “Comedy musical.” I don’t know why Sam doesn’t want me to say musical comedy. You can say whatever you want. I don’t see Sam around here, so ... Yeah, I know, but he’s going to listen to this, and he’s gonna listen to the whole thing just to make sure I didn’t say anything inappropriate. Even if you buried it at the very end here? Yeah. Yeah. John, this was awesome. Thank you so much for coming on the podcast. Thank you.

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posted 2 days ago on re/code
The first of three public hearings on the terms of the previously secret deal were held today. Members of a New York City council committee denounced terms of the recent Amazon HQ2 deal in the first of three public hearings being held about the plans. “We are not in the business of corporate welfare here at the city council,” said City Council Speaker Corey Johnson, referencing the up to $3 billion in government subsidies the company will receive. Johnson, one of the fiercest critics of the deal, spoke at the council’s Committee on Economic Development hearing on Wednesday at City Hall. Amazon says the move will bring at least 25,000 jobs to the city over the next decade and $27.5 billion in state and city revenue in the next 25 years. Johnson contested these numbers at the hearing, saying they warrant an outside independent verification beyond the report the state commissioned. Johnson and other council members were upset about being denied oversight of the plan — but that wasn’t on Amazon alone. Both New York City Mayor Bill de Blasio and New York Governor Andrew Cuomo worked together with Amazon to bypass the standard review processes that would have given the city council a chance to veto or even review the deal. The hearing was the first opportunity council members had to publicly and directly vent their frustrations to key people behind the negotiations. While city council members have threatened to throw a wrench in the process, they’re limited in what they can do. A five-member state board is expected to vote on some aspects of the deal in the new year. Some council members are hoping they can influence new appointees to the board to vote against the plan, but it’s not clear how realistic that outcome is. One leader from the city’s Economic Development Corporation, James Patchett, who helped work on the deal, took the brunt of the tough questions on Wednesday morning. “Whose interest do you think you’re representing in making this deal?” asked Johnson. “One hundred percent New York City,” said Patchett. “I fundamentally believe this is a good deal for New York City or I wouldn’t be sitting here today.” Patchett cited a Quinnipiac University poll that showed 60 percent of registered voters in Queens supported Amazon’s move — although that poll only counted eligible voters, which could have excluded many members of the borough’s large immigrant community. “There’s plenty of people who feel the interests of New York City were not served,” retorted Johnson. Two Amazon executives — Brian Huseman, a VP of public policy, and Holly Sullivan, worldwide head of economic development — were also in the audience and faced a grilling from council members who pressed the company on several topics. They asked why Amazon made the city sign an NDA to keep details of the deal secret, how many jobs it would reserve for New York City residents and if it would dedicate $500 million of the government subsidies it’s receiving toward public housing. Amazon’s representatives didn’t commit to dedicating any future government subsidies to public projects. When pressed on how many jobs they would promise New Yorkers over imported talent, they said it was too early to say. They called the NDA “standard practice” and that they needed it to share confidential company data with government agencies. While Amazon’s executives were successful in mostly sticking to the corporate script, at times they sounded out of touch. Johnson criticized the company for making no mention of the potential impact on the city’s crumbling public transportation infrastructure, aside from a plan to build a helipad. “Amazon will be paying for the helipad,” said Huseman — a clarification that was met with sarcastic laughs from the crowd. “I would hope so!” said Johnson. The next public hearing will be held some time in January, although a specific date has not been set. After initially declining to confirm he would attend that gathering, Huseman eventually said he would be there.

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posted 3 days ago on re/code
Uber controls the majority of U.S. ride-hailing but Lyft is growing twice as fast. And both plan to go public in early 2019. Last Thursday, it looked as though Lyft would be the first ride-hailing unicorn to go public, after it confidentially filed a draft form for an IPO. But its bigger competitor, Uber, eliminated Lyft’s lead the following day when its own plans to go public were reported. Both are expected to hit the public markets as soon as the first quarter of 2019. So where do they stand? As of October, Uber and Lyft combined owned nearly 98 percent of the U.S. consumer ride-sharing market, according to new data from Second Measure, a company that analyzes billions of anonymized credit and debit card purchases. Uber held 69.2 percent (3 percentage points lower than in October 2017) according to Second Measure, while Lyft controlled 28.4 percent (3 percentage points higher than last year). Juno, Gett and Via split up the remaining 2.4 percent. Second Measure’s Lyft estimates (28.4 percent) are a bit lower than the 35 percent market share the company claimed earlier this year, though Lyft’s numbers would include Canadian sales as well as corporate spending on rides. Uber doesn’t disclose market share numbers. Lyft and Uber both declined to comment on the data. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["h1gEg"]={},window.datawrapper["h1gEg"].embedDeltas={"100":550,"200":550,"300":550,"400":550,"500":550,"700":550,"800":550,"900":550,"1000":550},window.datawrapper["h1gEg"].iframe=document.getElementById("datawrapper-chart-h1gEg"),window.datawrapper["h1gEg"].iframe.style.height=window.datawrapper["h1gEg"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["h1gEg"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("h1gEg"==b)window.datawrapper["h1gEg"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Both companies grew their revenue since last year, according to Second Measure, but Lyft’s grew 32 percent — twice as fast as Uber did when you compare October 2017 to October 2018. According to Uber, its third-quarter revenue — which includes revenue from Uber Eats, its international business and payments from business accounts — increased a much higher 38 percent year over year to $2.95 billion. Second Measure’s numbers, which don’t include Uber Eats — Uber’s fastest-growing business — and are for U.S. consumers only, show 17 percent growth in that time. A report from The Information, citing a person familiar with Lyft’s figures, said that Lyft’s U.S. and Canada revenue more than doubled in the first half of 2018 to $909 million. According to Second Measure’s data, Lyft’s U.S.-only revenue rose 71 percent in that time. Note that Second Measure’s estimates of Uber’s ride-sharing sales included revenue from Uber Eats until May 2017, when the measurement company was able to separate the two. That made Uber’s ride-sharing market share slightly higher than it should have been prior to that timeframe.

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Plus: New Verizon execs say old Verizon execs made a $5 billion mistake betting on AOL and Yahoo; social media has surpassed newspapers as a news source for Americans; Time’s Person of the Year is a group of journalists targeted for their work. Google CEO Sundar Pichai told the House Judiciary Committee that the company has “no plans” to launch a controversial censored search product in China, but he refused to rule out the possibility, which wasn’t reassuring to critics who say that “Project Dragonfly” will enable the Chinese government to block its citizens from accessing information it doesn’t like and surveil its political opponents. Some new information about the scope of the project emerged during the three-hour-plus hearing, but lawmakers spent much of their time asking about alleged anti-conservative bias, data privacy and other issues; here’s a time-stamped recap of the proceedings. Some say Congress should replace these time-consuming hearings with talks that work toward solutions. [Shirin Ghaffary and Kurt Wagner / Recode] [Want to get the Recode Daily in your inbox? Subscribe here.] Verizon is writing off $4.5 billion of the $10 billion or so it spent buying AOL in 2015 and Yahoo in 2017. Verizon hoped the combination of the two web pioneers — which it called Oath — would make it a more powerful force in digital advertising, but its share of that market has shrunk instead. One lesson you can take from this, even if you’re not an internet giant: Giant megadeals don’t belong to the companies that make them. They belong to the executives that make them; if those execs leave, the deals can go, too. And there are new people running Verizon now. [Peter Kafka / Recode] Disney is exploring splitting up and selling the 22 regional sports networks it acquired from Fox to multiple buyers, likely complicating the regulatory approval process. The company had hoped to sell RSNs to a single buyer in a deal to address antitrust concerns over its pending $71.3 billion merger with Fox; Disney faces a 90-day deadline to get rid of the networks after it closes its deal. Sinclair Broadcasting, in conjunction with CVC Capital Partners, has reportedly made the only serious — but lowball — bid for all 22 networks. [Josh Kosman and Richard Morgan / New York Post] More than eight million people are working illegally in the U.S. — including at a Trump golf club in New Jersey — and they make up about 5 percent of the workforce. The situation is not likely to change: Though policymakers have talked for years about shutting off the influx of undocumented workers, the economy has grown to heavily rely on them, particularly in low-paid, low-skilled jobs, which employers often have trouble filling with American workers. [Miriam Jordan / The New York Times] Time magazine has chosen “The Guardians” — a group of journalists who have been targeted for their work — as its collective Person of the Year 2018. A series of four black-and-white covers highlights what the magazine calls “the War on Truth”; the group includes Jamal Khashoggi, the Washington Post contributor who was killed at the Saudi Arabian consulate in Istanbul in October; Maria Ressa, the founder of Rappler, a news startup under attack by the authoritarian president of the Philippines; Wa Lone and Kyaw Soe Oo, two Reuters journalists who were arrested one year ago in Myanmar while they were working on stories about the killings of Rohingya Muslims; and journalists at the Capital Gazette, the Annapolis, Md., newspaper where five employees were murdered by a gunman last June.[Jill Disis and Brian Stelter / CNN Business] Top stories from Recode U.S. internet speeds rose nearly 40 percent this year. New Jersey had the fastest broadband, while Maine had the slowest. [Rani Molla] Twitter has made journalists dumber, meaner and more reactive, says Vox.com founder Ezra Klein. At a live recording of Recode Decode, Klein spoke with Kara Swisher about the future of journalism, the decline of scoops and the role of political journalists post-2016.[Kara Swisher] This is cool The Ringer picked its 45 favorite sports moments of 2018 (don’t miss the other best-of lists at the end). And here’s a different kind of end-of-the-year review.

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Tristan Walker’s Walker & Company is the maker of Bevel shaving products and the Form haircare line. For the last five years, Tristan Walker has set out to build a health and beauty company that could create a legacy as enduring as that of an industry giant like Procter & Gamble. On Wednesday morning, Walker’s startup announced that its next chapter will occur inside of that consumer product giant. P&G has purchased Walker & Company Brands, maker of Bevel men’s grooming products and Form beauty products, and Walker will continue to run it as CEO. With the deal, Walker & Company will move its headquarters from the heart of Silicon Valley in Palo Alto, Calif. to Atlanta, Ga., where the startup’s largest customer base resides, where talent and living costs are more affordable and where Walker wants to raise his family. The companies did not disclose the financial terms of the deal, but a person familiar with the details told Recode that investors recouped the majority, but not all, of the nearly $40 million they invested in Walker and Company. That means Procter & Gamble paid somewhere between $20 million and $40 million for the startup. While not a standout financial outcome by venture capital standards, the move looks like it has smart upside for both companies. Walker and Company gets to tap into P&G’s research and development expertise — the company spent $1.9 billion on those efforts in 2017 — as well as its global retail relationships and supply chain efficiencies. It also gets marketing support from a company that spent $7 billion on advertising across all of its brands last year. In Walker & Company Brands, Procter & Gamble acquires the cachet of an emerging player in healthy and beauty focused on serving the country’s growing multicultural customer base. Last year, P&G rival Unilever acquired Sundial Brands, the maker of personal care products popular among women of color. For P&G, Bevel adds a line of razors and shaving products meant to eliminate skin problems like razor bumps that disproportionally impact men of color. P&G also owns Gillette, Braun and The Art of Shaving. And in the Form haircare line, Procter & Gamble gets a product line designed to be “inclusive” and work across a variety of hair types. P&G currently owns mainstream shampoo brands Pantene and Head & Shoulders. “I never started this company to get wealthy; I started this company to serve,” Walker said in an interview with Recode. “I started this company to realize that vision of making health and beauty simple for people of color. This accelerates that vision.” Walker founded the startup in 2013, when it unveiled the Bevel shaving brand. Investors included Upfront Ventures, Andreessen Horowitz and IVP. It started with a razor and line of shaving accoutrement sold directly through its website, and later added an electric hair trimmer, which was name-dropped in a 2016 track from rapper and Walker & Company investor Nas. Target sells Bevel products online and in some stores. Form Beauty launched in 2017 and encourages women to take an online survey to personalize an appropriate combination of hair products for them. The brand’s shampoos and conditioners are sold through Sephora in addition to Formbeauty.com. For more on the startup’s journey, watch Walker’s interview with Recode’s Kara Swisher at a 2017 Code Commerce event:

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New Jersey had the fastest broadband, while Maine had the slowest. Finally some good news: The internet is getting faster, especially fixed broadband internet. Broadband download speeds in the U.S. rose 35.8 percent and upload speeds are up 22 percent from last year, according to internet speed-test company Ookla in its latest U.S. broadband report. The growth in speed is important as the internet undergirds more of our daily lives and the wider economy. As internet service providers continue building out fiber networks around the country, expect speeds to increase, though speeds vary widely by region depending on infrastructure and whether or not an area has fiber. New Jersey had the highest mean download speed — 121 megabits per second — while Rhode Island had the fastest upload speed — 63 Mbps — in Q2 and Q3 of 2018. Maine had the slowest mean upload and download speeds (50 Mbps download, 10 Mbps upload) of any state. California, the home of Silicon Valley, ranked 17th in downloads and 24th in uploads. if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["2ScDr"]={},window.datawrapper["2ScDr"].embedDeltas={"100":609,"200":542,"300":525,"400":500,"500":500,"700":500,"800":500,"900":500,"1000":500},window.datawrapper["2ScDr"].iframe=document.getElementById("datawrapper-chart-2ScDr"),window.datawrapper["2ScDr"].iframe.style.height=window.datawrapper["2ScDr"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["2ScDr"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("2ScDr"==b)window.datawrapper["2ScDr"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); Xfinity was the fastest broadband provider nationwide, followed by Verizon, according to Ookla. On a city level, Kansas City — the home of Google Fiber — had the highest mean broadband speeds of any city in the country, both for downloads and uploads, at 159 and 127 Mbps respectively. Memphis had the slowest mean download speed — 45 Mbps — while Laredo, Texas, had the slowest upload speed at about 9 Mbps. Search for your city’s fastest broadband provider as well as mean download and upload speeds here: if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["TVJjg"]={},window.datawrapper["TVJjg"].embedDeltas={"100":658,"200":558,"300":558,"400":558,"500":533,"700":533,"800":533,"900":533,"1000":533},window.datawrapper["TVJjg"].iframe=document.getElementById("datawrapper-chart-TVJjg"),window.datawrapper["TVJjg"].iframe.style.height=window.datawrapper["TVJjg"].embedDeltas[Math.min(1e3,Math.max(100*Math.floor(window.datawrapper["TVJjg"].iframe.offsetWidth/100),100))]+"px",window.addEventListener("message",function(a){if("undefined"!=typeof a.data["datawrapper-height"])for(var b in a.data["datawrapper-height"])if("TVJjg"==b)window.datawrapper["TVJjg"].iframe.style.height=a.data["datawrapper-height"][b]+"px"}); As of October, the U.S. ranked seventh in the world in broadband and 43rd in mobile download speeds — a slight increase in rank from last year. Broadband is twice as fast as mobile. Broadband speed growth is also outpacing mobile. The rollout of 5G mobile connections should help. Ookla’s data was measured using its Speedtest during the second and third quarters of 2018. It measured speeds on more than 24 million unique devices and through 115 million consumer-initiated tests.

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Klein says Twitter has made journalists dumber, meaner and more reactive. On the latest episode of Recode Decode, we returned to Manny’s in San Francisco for another live conversation about the future; last time, Kara spoke with Y Combinator’s Sam Altman about ethics, AI, Facebook and more. This week, Vox.com founder and editor-at-large Ezra Klein joined Kara onstage for a lively chat about the future of journalism, the decline of scoops, the role of political journalists post-2016 and why Klein thinks Twitter is making all those journalists dumber. “It’s making everybody talk about and think the same things all at the same time,” he said. “The best journalists are the people who are finding things out or seeing things or hearing things that the other journalists aren’t. You got to be pretty damn smart to look at what everybody else is looking at and see something they’re not gonna see.” “Most of us are not that smart,” Klein added. “Twitter is making us all dumber because we’re seeing the same shit all the time. ... [And] I think it makes us meaner. I think it displays us often at our worst. I don’t think it’s been good for audiences’ trust in us.” You can listen to Recode Decode wherever you get your podcasts, including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts and Overcast. Below, we’ve shared a lightly edited full transcript of Kara’s conversation with Ezra. Manny Yekutiel: So, tonight’s conversation is about the future of journalism. A lot has changed in the field of journalism over the last 10 to 15 years, and they’re gonna talk a little bit about what has changed, what’s happening now and their perspective on the future. These are two people who are so qualified to talk about this very topic, probably two of the most qualified people in the country. We’re honored to have them here at the corner of 16th and fucking Valencia in San Francisco at my small business. Real quick, the goal of Manny’s is to create a central place for people to become better informed and more involved citizens. That’s what this is about. We have events every night this week, next week and the week before New Year’s. Without further ado, Kara Swisher and Ezra Klein. Kara Swisher: Thank you. Wow. Goodness sake, the future of journalism. Jesus Christ. That is true about Sally Yates. I have a huge man-crush on her. Then she texts me and I’m like, “Ah, it’s Sally Yates!” every time it happens. And I have to say, “No, I can’t have dinner with you, Sally. Next week, next time I’m in D.C.” Anyway, it was such a good week too. Think about it. I mean, I get the whole lowdown on Michael Cohen. Ezra Klein: I was gonna get take-out. Yeah, okay. Okay. Ezra Klein: I’m not getting take-out to be here. Come on, to this week. Come on. I’d like to line up her and Preet Bharara and just hit them until they tell me everything. Anyway, so we’re gonna talk about the future of journalism. Ezra Klein is my friend and he is my colleague at Vox Media. We are now ... what are we? Ezra Klein: Partners. Partners. We are now partners. We’re doing a lot more stuff together. Ezra just moved to the Bay Area. Let’s give him a round of applause for being here. I have just moved half time. Not half time, a third of the time to D.C. because my kids are there. We have traded places a little bit, but I’m here a lot also. I want to get started. Ezra, I wanted you to talk a little bit about why you moved here. What was the thinking? You’ve gotten infected by the tech bug in a lot of ways. But the idea, not the bad one. Talk a little bit about why you’re here and what you’re thinking about. Then we’re gonna get into talking about journalism and other topics. Ezra Klein: Like any move, a bunch of it was personal. I’m from California. I’m from Irvine, California. I’ve been in D.C. for 15 years. I actually loved D.C. but that is also a long time to be in D.C. I took a book leave out in Half Moon Bay earlier this year. I just felt like I could think. There was just space from the news cycle, which I’ve lived in a news response mode for 15 years. I’ve been there for a long time doing that. I don’t think I realized just how loud the buzzing in my own mind was. Part of it was just being out there having a little bit more room, having a little bit more elevation on what is a political conversation has gotten more and more bizarre. More and more, we can talk about this in our future of journalism talk. I think more and more distorted by the actual journalistic conversation itself. Part of it is you guys have such nice weather out here. Everybody wants big picture. We left Half Moon Bay and we got back into a D.C. heat wave. Two weeks later we’re like, what if the weather could just be nice all the time? The other thing, though — and this is what Kara is alluding to, with the “tech bug” — this story here to me has become really interesting. My work as a journalist is I cover problems of governance. I cover the way governance fails. I cover the way governance succeeds. I’m interested in the way institutions are governed and the policy that comes out of that governance. Silicon Valley for a long time was a story of innovation. Of course, in some ways still is. I think for a lot of us now who have to live in the world that you all have created, it’s not a story of governance. How do you govern these platforms? How do you govern these companies? How do you govern organizations and products and tools and institutions that have more power than they ever anticipated? They don’t fit into a lot of our traditional models. That story of governance, particularly as I began to feel that everything in politics was increasingly down stream of changes it had particularly been wrought in our communications by tech. Coming out to spend more time thinking about and trying to understand that governance problem and where it was going was really appealing to me. You moved out here. You moved to Berkeley, correct? Ezra Klein: I did not. Oakland. Ezra Klein: I’m a very private person. I’m not telling you all where I moved. You all know enough about me. Enough about you. You moved out here because you wanted to understand it, to be part of the culture here, to figure out because you think this is the story. This is the journalism story. Ezra Klein: Yeah. It’s a strange culture. It is a different intellectual culture. The people here are peculiar. They’re peculiar people. The institution here is different. This is coming from D.C., so that’s a low bar. Ezra Klein: It’s true. I always say that one thing I think that is interesting about the two places is D.C. is this place where the culture is defined. It’s shaped by people watching solvable problems prove impossible to solve. Silicon Valley is shaped by people watching impossible problems prove possible to solve. That second one sounds better and for a long time when I said it, it really sounded better. It also can create an optimism and a heedlessness that can be a problem. Sometimes the caution you get in DC is not the worst thing in the world when you’re making decisions that have literal life-and-death consequences. Trying to understand the culture and the way people think and the way they’re making their decisions, trying to be able to inhabit the minds of the people creating this stuff that we’re all living amidst, that’s part of it. I do think a lot of my work is about building models. What’s going on, sometimes many at once to be able to understand how the pieces fit together. I never feel like I can do that very well from afar. Getting out of D.C. is important. Talk a little bit about the D.C. news culture right now, because you first did the Washington Post, as I started also at the Washington Post. You had a thing you were doing there and then moved on to create another thing. Then was it Vox in D.C.? And I don’t want to call you a creature of DC. You were a little ... Ezra Klein: Skittering little. Skittering little creature. Little cockroach of D.C. No. You reminded me a lot of Michael Kinsley, that kind of thing. There’s a culture of people, very smart people, talking. Journalists that cover D.C. The shift, I find it really interesting that you’re here now, that you think this is important. Talk about the culture of journalism happening, what has occurred. It’s been a certain way. I left D.C. because I didn’t want to cover the Clinton administration at the time. I didn’t want to rise at the Washington Post. I didn’t want to cover the White House. I thought it was a prison for reporters. I thought it was a very incestuous culture. Talk about it now, as you left it, how you look at how politics is being covered in the sense it’s being done now. Ezra Klein: I don’t think in the way that you’re talking about that the journalism culture is a D.C. culture. I think it’s now a Twitter culture. I believe this. I think this is a real problem. I’m much more hair on fire about this than a lot of my colleagues. Know that when you hear this, this is an opinion of mine that a lot of people disagree with. I think the fundamental force shaping political journalism now is Twitter. I think every political journalist that I know with a couple of exceptions is on Twitter all the time. All their friends are on Twitter. The feedback loop is incredibly fast. What is a journalist? On some level, what do these people, what do we do? We find things out or think things up, then we publish whatever we came up with somewhere. Then we get some kind of feedback and then we do it again. All that used to be pretty slow. What Twitter did was it made it really fast. You can look at Twitter within two minutes and know if your tweet is taking off. You can reload the thing. It’s like, is it at 100? Then it’s gonna go to 1,000. You can run all this out. There’s this intense incestuous herd-like political journalism Twitter culture. One of the things that ... It’s doing a bunch of different things simultaneously. One, I think, it’s making everybody talk about and think the same things all at the same time. The best journalists are the people who are finding things out or seeing things or hearing things that the other journalists aren’t. You got to be pretty damn smart to look at what everybody else is looking at and see something they’re not gonna see. Most of us are not that smart. Twitter is making us all dumber because we’re seeing the same shit all the time. Two, I think it makes us meaner. I think it displays us often at our worst. I don’t think it’s been good for audiences’ trust in us. Three, different kinds of stimuli create different kinds of product. If you are out reporting something… My wife — Annie Lowrey at the Atlantic, a former Recode Decode guest — she’s a really remarkable reporter. She goes out into very unusual places and sees things other people don’t see. I have tremendous admiration for what she does. I’m much more, as Kara put it, a Michael Kinsley-like character. I like, sit and stroke my chin. He actually does. Ezra Klein: I do. I’ve seen it. Ezra Klein: I have whole chin-stroking setup. It doesn’t work. It’s not good work. It’s never good work unless I’m actually doing the research to find things, to build models, to find evidence, to read appendices that other people aren’t doing. That work where you’re generating something new and then applying it as a lens onto the world, it can often be really good. If what’s happening is somebody said something and you’re reacting to it, or you read something and you’re reacting to it, which is the culture of Twitter — Twitter is a functionally reactive culture, it’s a reactive product. Hey, somebody said X. Come back at it. Clap back. I think it’s created a more reactive take economy. I think part of the rise in takes is economic and digital. Part of it is Twitter. The other thing I do think it creates is more reactive coverage. We’re all reacting to the same information, covering things more reactively. Talk about that. There is a D.C. political journalism culture that’s leading the way in that way. Or is it not? Do they even have to be there? Ezra Klein: I think we’re weaker now. What leads the way right now? People news is all New York. I think that’s a pretty powerful culture, particularly in this era. I actually think D.C. journalism culture is probably more powerful under Obama than it is under Trump. Cable is more under Trump than it was under Obama. Podcast culture is important, I think, increasingly. You have on the left the crooked media folks. On the right, people like Ben Shapiro. You have the intellectual dark web people. A lot of them were out here. A lot of that is in California, oddly enough, both on the left and the right. I don’t want to take away from your point that there’s a D.C. political culture. I do think the D.C. political culture got cracked and traumatized by Trump. I don’t think it exists as a cohesive force in the way certainly I felt it to under the Bush or Obama presidencies. That you have been covering before. Ezra Klein: It’s much more unsure of itself. I think a lot of the driving parts of it are outside of it now. Again, not everybody. A lot of people doing important driving work are in D.C. and just a lot of the work is there. You can’t get away from the fact that D.C. has a culture of its own. I don’t think it’s as powerful in politics as it used to be. People used to talk about the Georgetown cocktail circuit. To my knowledge, nobody’s ever been to Georgetown at this point. People just stopped going like 10 years ago. I think a lot of those things have weakened. I rode a nice scooter over there recently. It was nice. Ezra Klein: See? Maybe it’s coming back. It’s true. There was no cocktail party. I just was riding this scooter around. Ezra Klein: You’re spending a lot more time there. How is it different than when you were there? Well, when I was at the Washington Post I covered parties, if you can believe it. I started in the style section covering parties where things happened. I know it sounds crazy. Ezra Klein: I would be so bad at that job. I know. You’d be terrible. You’d be sitting in the corner. You’d be sitting in the corner. My job was essentially to get Teddy Kennedy to say something stupid. That was my job, which was not very hard because he drank a lot. What would happen is there would be something that happened that day, whether it was a big piece of legislation or whatever the news of the day was. Then the style section in the Washington Post would send out young party reporters to go to whatever — the agriculture association’s party or John McLaughlin had a party or whatever. Someone had a party and you went there and then you made a story of the day from the party, which actually there was a party culture, a cocktail party culture. A lot of policy was formed that way. A lot of the way the city worked was that way. That doesn’t exist. You’re right. It’s all ... Everyone is looking down at their phones and reacting. Doing reacting and reacting to reacting and reacting. I have been to a number of parties recently. I went to one at David Gregory’s house. His wife is Beth Wilkinson, who’s a very well-known litigator. I’ve been to a lot and I’ve been to a business roundtable thing with Jamie Dimon. It’s a really interesting culture. I find the journalism culture in D.C. to be incredibly docile. I find them very, very docile. I find myself extraordinarily rude in the culture, which I find myself here. Ezra Klein: Is that not true here? Yes, it is. It is. They seem to be used to it. I was at a thing for a business roundtable, which is this building near Union Station. Have you been to one of those dinners? Ezra Klein: I’ve been to their thing, not to a dinner. You go to dinners. Essentially they bring famous CEOs in and then you sit and have dinner with them at a boardroom table. It’s really awkward. It’s really not a nice place. I showed up looking like this, essentially. Everyone’s all real dressed up to the nines. I’m like, “Oh hi. Good to see you.” They put me in a good spot. There’s the status spot. I pay a lot of attention to status in Washington. It’s sort of like “The Hunger Games.” The city. There’s capital. You know what I mean? Where you’re sitting. I was sitting ... on one side was Doug, the guy who’s the CEO of Walmart, and on the other the CEO of Lockheed Martin. Across from me is Jamie Dimon. I was like, “Oh I got the good seat. I’m in the good seat. This is real good.” As it started, they were pontificating on I think it was China and the China tariffs and this and that. What was really interesting, this was off the record. Oh well, too bad. They were talking about different things. Jamie, who I know pretty well, said something about China, about tech. I was like, “Pfft.” Like that. I said it loudly. He was like, “Excuse me, Kara.” I’m like, “Well, I don’t know.” He’s like, “What do you have to say?” I said, “Everything you’re saying out of your mouth is wrong and I don’t know what to say. I got to say it.” The guy from Lockheed is laughing. Then Dylan’s over here saying, “Oh Kara, stop it.” I’m like, “No, but he’s wrong. Everything he’s saying is completely stupid.” The rest of the reporters don’t say a word. It was an astonishing display of lack ... Then what happened is, “As Kara said.” You know what I mean? It was fascinating to watch this weird ... there was no journalism going on. I don’t know what was happening. Ezra Klein: There’s definitely a lot of that. The other thing, though, that I think you’re getting at there, which I do think is part of this whole story is that, look, D.C., why was it useful to be in D.C.? In part because access can be useful. There’s a lot of access journalism in Washington, D.C. One reason I think that the culture there is breaking down, though, is that the access is becoming less and less useful. One, the institutions themselves are weakening. We were talking about political party reporting. The political parties are weakening. A lot of their functionaries are in D.C. They’re on Twitter and they’re not that interesting. They’re a lot less powerful than they used to be. There’s value to knowing the people who went into the Trump administration if you’re doing Trump administration reporting. It isn’t a cohesive thing like previous administrations have been. I started when I stepped down as editor in chief. I’m like, “Maybe I should do more White House reporting again.” I used to do a lot of that under Obama and a bit under Bush. I began sitting down and talking to these folks. I really quickly realized that, one, most of them don’t know what’s going on. Two, they’re mostly just ... I never reported on the White House. It was not trying to make arguments for what it was doing. They’re just back-biting each other. It’s like, there’s no information here. There’s a drama. I’m like, you can maybe uncover some things. The institutions themselves are less valuable to have access to. The people themselves are out tweeting up a storm. They’re on cable news all the time. That whole Georgetown cocktail circuit, the idea was you’d be near Teddy Kennedy. Then he’d tell you something. Ezra Klein: He’d slip something. I’m not saying there’s none of that. It’s just that the value of it has gone down so much that it’s changed the culture. What’s really interesting is they vomit information there. It’s not that hard here to get you all to talk. There it’s like, “Kara, did you know that we’re about to invade France?” I’m like, “Whoa okay. Thank you. Okay, thank you for that.” It’s incredible. The other part is that you go, I literally write Trump is a goblin or something like that on Twitter or whatever that particular morning I’m feeling like. Then they all call me from the White House like, “Hey, come over and visit.” I’m like, “Okay. Sure.” Ezra Klein: That is by far the part of D.C. that ... maybe it’s what makes it work but is the weirdest. The kind of it’s all in the game mentality. One of the really common things to have happen is report in D.C. — I’m sure you have this — is that you write something really searing about someone and then their staffer will call you and fight with you all day. Like, all day. They will not stop screaming at you. You’re like, yeah but your boss actually is an asshole or he was lying or whatever it might have been. Then at the end they’re like, okay, let’s get a drink sometime soon. It’s this very weird ... you build relationships through conflict. It’s fine. It’s a good way for them to ... That happens. Don’t you think that happens? That’s still an old journalism thing, right? Ezra Klein: As you said, I’ve spent most of my career in D.C. Maybe it’s true everywhere. I find that there’s a lot of yearning. They fight all day and then they go to the same dinners and parties at night. Culture of D.C., it’s still there a little bit but I think it’s lesser. I’ve always found it very odd. Let’s talk about how that affects everything in terms of the future of journalism. Now that you’re here, talk a little bit about what you’re studying, because I think one of the things you and I have talked a lot about is the impact of social media. Not just social media, but cable social media on what journalism is. To me, journalism is still block-and-tackle reporting. Calling, calling, calling, finding things out, trying to get to the truth of things, which has been shifted a little bit by the fact that you’re right, anybody could get. You don’t need to figure out, for example, what someone thinks because they tell you what they think immediately on the internet or on Twitter or wherever they decide to do it. Trump has changed the game in terms of reporting in that way by just spewing whatever he says every single day. What’s the biggest impacts on journalism right now from your perspective? Ezra Klein: I want to offer a disclaimer here quickly. You know when you’re working on something in your head, but it’s still a blob? No. Ezra Klein: I’ve been trying to work through this question. It’s currently in my head like this giant blob. I’m worried it’s all gonna come out very inarticulately. Don’t you see how this partnership is gonna develop? I’m gonna be like, “Yeah let’s go,” and he’s gonna be like, “Just a second. Let’s think about it.” Ezra Klein: A couple things. One, I think journalism is a lot of systems that are colliding in really weird ways right now. The couple that I think are the most important are, one, people have way more choice than they ever did before. Two, there’s much more competition for your attention than there ever was before. Not just within journalism, but with everything. The number of things anybody can do. We are in competition with Netflix. We are in competition with you being here. You’re here, you’re not clicking on Vox articles tonight. You’re doing something different. They might be. Ezra Klein: I guess you guys have phones. Then there’s Trump and the weaponization or the demonization of the press. Then there’s distraction and there’s social media and algorithms. Everything is coming together in weird ways. The big thing to me that’s happening right now is that we’re losing control in journalism over what is the idea of newsworthy. We are losing control of the agenda if we ever had it. I think we’ve become very, very, very reactive. I think Donald Trump uses that very much to his own advantage. There’s this day I keep thinking about. It was a couple weeks ago. This was right after the guy who had been sending bombs to journalists’ homes and offices had been caught. The next day, Donald Trump sends out a tweet that morning because it’s the world we live in. The thing says the real ... he knows the language to use. He didn’t say the fake news. He said the real enemy of the people. The media is the real enemy of the people. The day after the guy trying to kill the media, the Trump fan trying to kill the media was arrested. He sends out this tweet. The real enemy of the people. The media goes nuts, right? Because that’s fascist. That day for the first time in some number of weeks, a long number of weeks, Sarah Huckabee Sanders called a press conference, a public press briefing. She had not had any of these for weeks. She had stopped having them. She had explained why she’d stopped having them. She calls one that day. Sure enough, at that press briefing, Jim Acosta gets up from CNN. He and Sanders get into a fight. Then the Trump White House takes away Acosta’s press pass. There’s a fight about that. What they were doing was completely calculated. They made a series of moves. The language Trump used that day, the decision to hold a press conference so there would be a televised showdown between Acosta and Sanders. Then I looked at the foxnews.com home page. There was a huge splash with Sanders’ face. What do you do when the fight between the president and the press is the president’s storyline? When he was elected, Steve Bannon gave an interview to the New York Times. Again, Steve Bannon as chief strategist gave an interview and said, “You need to understand you’re the opposition. The media is the opposition.” One of the things going on right now is that there is ... Trump is a very good media manipulator. He works at the intersection of our hunger for ratings, our hunger for things that are outrageous and interesting, the way we operate in competitive pressures with others. What gets pushed up through algorithms, the way he’s able to dominate Twitter. Then he knows exactly how to move the conversation to the fights he wants to be having. Not the positive press for himself. We don’t cover that stuff positively. It’s a fight he wants. Him versus the media, not corruption at the EPA. Him versus the media. Not the fact that he’s actually trying to make Medicaid harder to use when he promised that he’d give everybody health insurance. One of the things that I think we are not good at in journalism right now, one thing I think we’re really failing at is we do not have enough of a sense of our own newsworthiness. We do not have a sense of what is our agenda to cover, what isn’t important. To resist what’s become extremely sophisticated forms of media manipulation and particularly resist it when it’s already dominating social media because we take that as our assignment editor. How do you combat that then? Because one of the things ... Ezra Klein: I need a way to combat it? Is there a way to combat it? Because there’s always been agenda setting. Look, whether you think it or not, you were talking about we lost the narrative of newsworthiness. The fact of the matter is, for many decades, seven white guys at CBS, seven white guys at NBC, New York Times determine the news on the Upper West Side of New York, essentially, or Upper East Side of New York. That’s a different thing too. That’s the agenda setting. In this case, it’s just that someone’s taken the tools that Silicon Valley has created and are using them in a different way that’s essentially become the punch list that you would have at any editorial meeting of a big newspaper, which you and I have both been to those at the Washington Post or the Wall Street Journal. It’s just deciding what the news is and what’s happened is I think we’ve abrogated, we rushed after it. We rushed after it like idiots, in some way. Ezra Klein: Yeah. I think that’s right. How do you then combat it? One of the things I was thinking, a column I’m writing about is what if — Twitter wouldn’t do this — but what would Donald Trump do without Twitter, for example, or what would blank do without Twitter? It doesn’t have to be Donald Trump, but he happens to be the best user of the platform around, essentially. What would certain figures do without it? What would be their power? I was trying to think, where would they go? What would happen without that particular tool? Would it work on Facebook? I guess cable is there, but it doesn’t reach quite as many people. It’s a really interesting question when you start to remove those tools from them. Ezra Klein: My theory is that Twitter is important to Donald Trump because of how he uses it on the media. Donald Trump’s Twitter power is not actually his Twitter account. It does reach a lot of people, but it’s not that many people and it’s quick and it’s going by. It’s forced multiplier is the media. It’s an agenda-setter for us. He’s using us in that way, in a way where he’s able to much more tightly define the message. I don’t know honestly what you’d do about it. Part of it is you have to be editorially thoughtful. What you were just saying I think is 100 percent true. You rewind the clock 30, 40 years. You have seven white guys on the Upper East Side deciding news. That’s not good either. I came up as a blogger. My first job, quote unquote in journalism, was blogging. I was a blogger forever. I still in some ways think of myself as a blogger. One of the things that I felt then was, isn’t it so great? There’s nothing in between me and the publish button. I can do everything at full speed and there are not gatekeepers. I was big on there being no gatekeepers. As things got faster and faster and I began to work at different institutions and see different publishing cycles and different ways things worked, is you begin to realize that time, the fact that it maybe takes time to publishing sometimes, it creates space where judgment can creep in. I often think that if you’re getting the information about the news from things that are a little bit slower right now, you’re often better informed than if you’re staying up to the minute on Twitter. You’re seeing things ... Oh wait. Are you talking about artisanal news right now? Ezra Klein: No. I like it mass-produced, but slow. Actually Nicole Wong from Twitter, who used to work at Twitter and Google, I did a podcast with her. It was talking about a slow food movement for the internet. It was a really interesting ... Ezra Klein: There was this great piece by ... Justin Kosslyn, I think it is. He runs Jigsaw, the Alphabet ... Do people really call it Alphabet out here? Does everybody say Google? No. We just say Google. Ezra Klein: Anyway, guy who runs Google’s Jigsaw. I say the Borg. Ezra Klein: He wrote this great piece about the need to see friction as a good thing on the internet sometimes. The idea that a lot of our problems online, he was talking about hackers and malware and all kinds of other things. The idea that making everything faster and easier and swifter and cleaner and making sure there’s absolutely nothing in between your impulse and the expression of that impulse, that’s actually a problem. Sometimes you need friction. There’s a reason I don’t keep Oreos in my house. I need friction between me and Oreos. They’re delicious. Ezra Klein: I do think there’s some of that in editorial processes. We think about this a lot at Vox. There’s a lot of ... We are, I think, getting better. I think this is true for a lot of newsrooms, getting better at letting pitches go by. I see. Interesting. That’s an interesting post that you did. You sit and actually think about things. I actually do like the speed of it a lot. I do. I’m very pleased with it. Some days I’m like, boom, I go and I’m like, yay. Good for me. Ezra Klein: I hear you saying that, but I don’t think it’s true. In what you produce journalistically, most of it is actually on slower time frames. You do New York Times columns. I think I wrote one in 45 minutes the other day, but go ahead. Ezra Klein: You do podcasts. They don’t come out for a couple days. No, no. Right away. That China one. Ezra Klein: Never mind. I landed in New York, wrote it, and it was up by an hour and a half. Ezra Klein: There you go. Maybe I’m wrong. I do think that a lot of your work ... I knew this stuff. Ezra Klein: Your work has a space of context. I knew the stuff. It was stuff I already knew. I had been working on it for a long time. I just was able to send ... what I like about journalism now is the speed of it. Getting stuff out, getting ideas and concepts out there really quickly to actually not just test them on people, but to get reaction. When I started in journalism, when I was at the Washington Post, I used to way, way back. Not many people had email addresses. Not you people. You don’t remember it. But you didn’t. I put my email address at the bottom and a lot of the reporters are like, “What are you doing that for? The readers will talk to you.” I’m like, “Yes, that’s exactly what I’m looking for. I’m looking for feedback,” which was interesting. I really enjoy the feedback. I think the story only starts once I put it up and then I have a really interesting time with it. Or I test out concepts. Right now I’m working on a column about how Silicon Valley people can take money from the Saudis as this gets worse and worse and worse. I’m testing it on Twitter, actually. I keep putting up, “Look at what the thugs did now. Look at this, oh Silicon Valley people.” Then I wait to see what the reaction is and get ideas and concepts from it. Then it starts to formulate in me. I guess that’s a slow way to do it. Ezra Klein: I am so sympathetic to this way of doing Twitter and journalism, and I also have come to think it’s so dangerous. Thank you. Ezra Klein: You live on the edge. You court disaster and eat catastrophe for breakfast. Yes, exactly. Ezra Klein: But for those of us who don’t quite have your metabolism, and I’ve seen this happen both to me and to some of my colleagues, there’s this tendency to treat Twitter like a comedian treats ... Jokes, yeah, trying out jokes. Ezra Klein: Not just jokes, but like small-town clubs, as a place to work out material. Yeah. Ezra Klein: So the structure of what we’re going to do here is, we’re going to work out our material where it has to be constrained to be shorter and less nuanced, in the place where it gets the least generous lead of any place on earth you could possibly do it, and it’s most easy to grab it, embed it and pull it out of context. That’s where we’re going to try out our new ideas. No editors, and no ... I see it happen, and you do get good things. This is what I’ve been thinking about a little bit lately. I wish we could set up a new culture around some of these things. Twitter would be so great if we could all agree to be generous on it. If there were some way to say ... This is a bad day for that, because of Jack’s multi-part ... Ezra Klein: Huh? You know about this, right? Ezra Klein: No. Of course you don’t. Jack Dorsey tweeted a multi-part thing about doing some kind of meditation with mosquitos, I’m not really clear what was going on. Ezra Klein: Excuse me? He was meditating in Myanmar and he forgot to mention the genocide and people got mad on the Twitter. Ezra Klein: Oh, that seems like ... But he put a multi-part series about this. I can have respect for people’s meditation, but it was the most tone-deaf series of things that you ever want to see. He put up a multi-part series, doesn’t mention genocide in any way. It was like, “Here I am in Myanmar having fun,” and it was like, “Whoa, wait a minute, Myanmar, there’s some people dying there.” So people went crazy, were mean to him, and then Fred Wilson wrote a piece saying don’t be so mean to Jack because he’s meditating. Ezra Klein: And you’re asking me why I don’t love Twitter. Right, I know, but it was interesting. Anyway, move along. Ezra Klein: To that point, the thing that I think is ... There was an Apple Watch. Ezra Klein: The thing I need a little bit is, I would like to have ... I think there’s a really good quality of risky ideas. One thing I loved about blogging was this ability to be wrong in public. I was younger, and so I didn’t have an institution behind me, but this feeling that I could try out an idea, and oftentimes people would come in the comments and be like, “That’s actually just wrong. If you knew the first thing about this you’d know it was wrong.” It’s like, “Oh, that’s great, that was wrong. Now I know it’s wrong.” It’s a useful thing to have happen. I want that, I want that ability for myself, for my colleagues, to be riskier with ideas, because even if a bunch of those are wrong, sometimes you get somewhere good. But in the long run you can’t have that in a dangerous space. You can’t have that in a place where there’s a lot of risk. Particularly for people and younger journalists who don’t have established reputations ... Or the training. Ezra Klein: And the training, and a really good sense of the conversation. A lot of my views on this come from being editor of Vox for four-ish years, and then before that at Wonkblog in the Washington Post, and just having it happen both to me and to people I managed or cared about at other institutions, watching them get blown up, and feeling just terrible, like I can’t help. Like it wasn’t under the thing. Let’s both of us talk about our practices now in journalism. What is your journalism ... How do you do your journalism right now? I can talk about how I do it, but I want to talk about how you do yours. What is your practice? Ezra Klein: Practice. What do I do? It’s split between two things. About half my time goes into what I think of as “Vox strategic.” So, I’m an executive producer on our network show, I’m working a lot on the Recode partnership that we’re working on, I’m working on helping, we’re doing a new YouTube show, so Vox does a lot of stuff, and I’m involved in a lot of that. Then the other half is what I think of as my work. I do two Ezra Klein Shows a week, which if you don’t listen to that podcast, Recode Decode listeners, it’s a great second podcast to Recode Decode. It complements it in really nice ways, and it’s much longer and slower paced, so you might enjoy that as well. Yeah. He came to me when I started doing podcasts, and he’s like, “I like this podcast thing,” and he’s like, “I’m thinking of doing it with So Wonky,” and I was like, “Have Joe Biden on to start.” He’s like, “I think the agriculture secretary is fascinating about farm subsidies.” I was like, “Joe Biden’s sure fun.” Remember that? Then you did the agriculture secretary. Whatever. Ezra Klein: That sounds exactly like something I’d do, although I’ve not been able to actually land the agriculture secretary. It was like the undersecretary, it was literally farm subsidies, and I was like ... Ezra Klein: It’s interesting. Here’s a question I actually have for you, before I get into my journalism practice. All right, okay. Ezra Klein: Do you find that your podcast download are correlated highly with how famous a person is? No. Ezra Klein: I don’t either, and it’s something I love about podcasting. No, not at all. Ezra Klein: One thing I’ve found ... Elon Musk went off the friggin rails, but ... Ezra Klein: Yeah, Elon Musk, he gets stuff like that. Yeah. Ezra Klein: But I find that I have on a lot of people who are, let’s say, B-list famous, like not Elon Musk, but way better known than random professors I have on, and the random professors often do much better. Yeah, I agree. You never know. Ezra Klein: It’s something I just love. Like, the audience is into new ideas, and somehow it spreads. I think it’s the coolest thing about the medium. Yeah. Ezra Klein: About half my time goes into the two podcasts, the two EK shows, and the weeds, and my own kind of writing, and I do some videos. Because of the podcast, one thing that’s been good for me is, I just ... And then I’m writing a book. Yeah, okay. Ezra Klein: I try to keep those things as tightly coupled as I can. What’s the book about? Ezra Klein: The book is about political polarization and identity, and basically why everything is fucked up, but it’s an effort to create ... A light read for you all. Ezra Klein: A light read, right. An effort to create a kind of model of why the parties are sorting in the way they are, and how that’s up-ending other institutions in politics and making us think about ourselves and each other differently. So a lot of what’s on the podcast has to do with things I’m thinking about and studying for the book. I see. So they go in between each other. Ezra Klein: It doesn’t work if they don’t all feed ... Right, they all feed together for the general idea. Ezra Klein: The thing I was thinking about when you said, “What is your practice,” I do a fair amount of reporting, I talk to a lot of people. I still do a lot of that. A lot of my reporting is among academics, or people who I feel have a high elevation on things. Some of it is among politicians, but less of it lately. Then the other thing is, I just am reading a lot of books lately. I’m reading a lot more books than I am news. You are. Ezra Klein: Because I kind of feel I have a reasonable handle on the news, and I don’t have a reasonable handle on the why. So I’m trying to spend a lot more time getting some perspective, and that’s been good, I think. You did this on a call the other day. You were talking about books you were reading, and I was like, “Books? That’s cool.” Ezra Klein: On what, on a call? You did it on a call we had. You were in your room. Ezra Klein: Oh yeah, I was ... You were like, all these books ... Ezra Klein: I’ve gone through a lot ... We were in a meeting, and I ended up talking about Yochai Benkler’s “Network Propaganda.” Yeah, that. Ezra Klein: About the way the left and right media ecosystems have developed. It’s a useful book, but I can’t say I feel like it really worked on that call. Yeah, no. I was like ... Ezra Klein: Didn’t really light up the room. I was like, “I just read People magazine, and Dolly Parton is cool.” It was great. I was fascinated that you were doing such heavy, it was almost college-like, it was ... Ezra Klein: I think my process, particularly right now with the book, is more, it almost works a little bit more like I’m an academic than I’m a ... Yeah, but it’s part of your journalism, I think. Ezra Klein: Yeah, that’s kind of how I do my journalism. So when you call people ... Do you call people all day, or do you just text with them? How do you do your ... Ezra Klein: No, I almost never text. In fact, you and I, I think, often have communication breakdowns, because I’ll email you and you’ll text me, and then nobody ever responds to anybody. You like to email, that’s right. Ezra Klein: Texting, it’s like I don’t want my phone to ever interrupt me doing anything for any reason. Yeah, all I do is text. Okay, thank you. Fifteen minutes till Q&A. I hate email. Ezra Klein: Yeah, I like email. I just found 53 emails from New York Times people to me, apparently I have a New York Times address, and I have it on my phone, and I didn’t know they ... Brett Stevens wrote me, which I was glad not to get. Ezra Klein: I spend a lot of time calling people. Okay, so you call. Ezra Klein: The podcast is reporting for me. I assume it is for you too. Yes, it is, absolutely, 100 percent. It’s ideas and reporting and concepts. Ezra Klein: I was talking with someone here in the audience, and he was very kind, and he said, “I learned a lot about questioning from you.” I said, “What did you learn?” He said, “When you question people, what you do is, you go and tell them your theory of what you already think, and ask them to respond to it.” Ah, nice. Ezra Klein: I was like, yeah, that is kind of how I report, too. It’s like, I’m working on this story, what do you think? How can you help me fill in the blanks of it? I’ve just made that into a podcast. Right. Ezra Klein: At Vox we have this line, using the whole news buffalo. The idea is that you want to use as much of the work you’re doing. If you’re working on a story, like maybe you want to do a Q&A with some of the people you’re reporting on, and on a shorter piece, and eventually a feature comes out, then we put it on The Weeds as a podcast. You want to use the whole news buffalo. I agree. Essentially it’s the ... enough about my concepts, what do you think about my concepts? Ezra Klein: Exactly. That is a reporting technique. I use the podcast absolutely as reporting, which is interesting. Also relationship-building between me and the subjects. People I didn’t know well, or people I didn’t have ... Do you make the old traditional phone calls? Ezra Klein: Yeah. You do that, and what else? Ezra Klein: Besides reading things, making phone calls, I do sometimes see people in person. It has happened. I am doing it less as I came out here because I haven’t structured that, but in Washington I spent a lot of time going up to the Hill or the White House or to some think tank or another. I take in information in most of the ways you would think. Sometimes I watch ... I podcast ... Has it changed a lot? Ezra Klein: Has it changed? Yeah. The thing that’s really changed is, I’ve basically stopped reading any social media, which for a long time was a big part of my news diet. I don’t read Twitter, I don’t read Facebook, I took everything off my phone. After you took Instagram off of your phone, that was the last thing I had, I took it off my phone. Good idea. Ezra Klein: You know what I’ve actually been doing recently ... I’ve been talking to my kids, but go ahead. No, I talk to them. Ezra Klein: On Instagram or just in general? No, they never stop talking. My kids call me all the time. I’ve got boys who never stop communicating. Ezra Klein: That’s great. I was like, “Can’t you be sullen?” You know how people are like, “My kids never say anything at home.” I’m like, “My kids never stop telling me things.” Ezra Klein: I’ve started using a bunch of, I have a lot of news homepages or apps on my phone. I actually really like the New Yorker app. There’s not that much on it, which is nice. I feel like I can manage it. They have this Today app, and they don’t put ... Well done, David Remnick. Ezra Klein: They don’t put everything up all at once, so you’re going through it and it’s like, I feel like I can complete things there. Editable, you can finish it. Ezra Klein: Yeah. You don’t do scoopy news though, right? That’s never been your ... Ezra Klein: No, not really. If something happens and I can break something in the course of doing something I will, but that’s not what I specialize in. But you’re not on that adrenaline high kind of thing. Ezra Klein: No. Yeah, I’ve stopped doing that, which I did a lot of ... Ezra Klein: You were the master of ... I was. I’m tired of it. Actually the other day there were like seven scoops and I was like, “I don’t care.” Someone’s like, “Kara, I’ve got this,” where I’m like, “I don’t care.” Ezra Klein: But this is a point you’ve made, that you used to be able to capture more of the value of the scope. Now there’s all this immediate spillover. Yes, there’s no value. There’s no value to some scoops any more. Not at all. Literally last night someone called me, I’m just like, “I’m going to sleep.” Ezra Klein: Doesn’t that seem like kind of a problem for the news though? Yes, it does. Ezra Klein: It’s an economic problem for the news, like it spills over completely. But it isn’t. It doesn’t matter. Before you could have all the scoops. Recode, we were specialized in, first of all we specialized in scoops, which was, we would get them all, and they seemed more important than they actually really were in a lot of ways. But they were, because having been at the Washington Post and the Wall Street Journal, things were brought to us and then we laid them back out. A lot of that wasn’t amazing reporting, it was they handed it to you, which I hated. I hated that whole ... Ezra Klein: Someone once gave me this great concept of a level one and level two scoop. A level one is something that everybody would’ve known soon anyway. Like right before, every four years, before people announce their vice presidential candidates, there’s this huge crush of news organizations trying to know it 15 minutes before, and it’s this huge coup, but it’s like, we would’ve known in 15 minutes. You could’ve just done anything else. Then there’s level two, like you wouldn’t have known it. Right, yes. Ezra Klein: Like, unless you got it, you wouldn’t have known it, and that stuff is super valid. I love those. I still love those. I still like, when we broke the story about Yahoo hacking years ago, I felt great about that. And because they weren’t going to tell anybody. That kind of stuff, I like those. Some of them, yes, you’re right, there’s different levels of them. I don’t spend almost any time on that any more, because what happens is, you do a scoop, and now you can’t get them all any more, and before you could. You could get a lot of them, or make it seem like it. Then they move so fast now, it doesn’t really matter. All the time you put into it doesn’t matter, and most of them are level one scoops, that people will find out 10 minutes later kind of stuff. It’s a waste of time, so we tend to do the fast follow, our much smarter stories. I think that’s what ... I’m not doing as much day to day ... I know what’s going on. I don’t do as much ... Ezra Klein: People are pounding on the doors to get in here. Manny Yekutiel: It’s a residential building. Ezra Klein: That must be exciting for the people who live on top of every event. I’ll get back, but the news stuff is not ... I don’t do the website. I’m not running the website, but I don’t think that matters as much. I think the reaction and the extra, the better stories are the ones that are, the longer stories, the more smarter stories, the explainer stories, which you guys pioneered, are much more important. To me, I think these live events and also the podcast are where the real stuff ... That’s where Mark Zuckerberg talked about holocaust deniers being okay, good people on both sides. That’s where Elon talked a lot about his SEC stuff, like he’s just going to tweet what he wants. News was broken there, or on stages at Code. That’s where, to me, the really interesting conversation ... That’s what I think people find interesting, and I’ve found that fans, or people that like my stuff, that’s what they tend to value. Ezra Klein: Isn’t one way to think about that that we were wrong in the media for a long time about which part of our work people would find most interesting? Yes. Ezra Klein: I think a lot of your work as ... There are things journalists did before they wrote the story that you were particularly good at and that’s why you got all the scoops, but now you’re actually just putting a microphone to that part. You get to listen to the whole Kara conversation, not just the part that got in the story, not just the part the Wall Street Journal had room for. That’s a really good point. Ezra Klein: In a lot of my work I feel like what I’m often doing is pulling up the model of politics that I use to evaluate everything else. Instead of seeing everything that got filtered through my model, you see the model itself. A lot of my big stories, like I wrote this piece, I’m very proud of this here, called “White Thread in a Browning America,” and it’s a piece that informs every piece I do, but instead of it being in my head, and you get pieces run through the mechanism that I use to decide what news is, you get the mechanism. Right. One of the reasons I did the Times column was because I wanted a global platform for some of these ... A lot of stuff I wrote on Recode, and it had resonance within the community, but ... I wrote one piece I thought was terrific when all the tech people went up to Trump Tower, and I called them sheeple, and it was great. I said for shame, these awful rich people, they’re so poor all they have is money, stuff like that. And how dare they not talk about immigration, how dare they not talk about the tolerance issues, all the things that Trump was railing against, they never said a word. That was a great column, and it had resonance within the tech community, but the reason why was that it had a bigger resonance with a wider range of people. There is a value to the print publication ... It’s not really the print, but in a broader sense, that I still think does matter, like thoughtful takes on the news. Not hot takes. I hate hot takes. I hate them. There’s so many people writing hot takes now all over the place. Ezra Klein: How do you distinguish between a hot take, a smart take, other ... A boring take? That’s easy. Ezra Klein: Well that’s easy. That one’s easy. Ezra Klein: I was joking with someone the other day that I want to start a vertical at Vox of lukewarm takes. Because a lot of things, like the lukewarm views ... But what is a hot take to you and what is a smart take? A really stupid shallow idea that is just like, “I’m going to say something real controversial and then have nothing to back it up with, and I’m just going to say it over and over again.” It’s like the dumb person sitting next to you at a Brooklyn dinner party. I don’t know how else to put it. Do you know what I mean? Ezra Klein: I didn’t see that drive-by Brooklyn coming at all. I was just sitting here, we talk D.C., SF ... I was just ... Ezra Klein: I’m glad we hit New York on the way. I’m glad. You know what, here’s the thing. I was at one this weekend. Tomorrow I turn 56 and I just can’t take it anymore, and it’s like ... Thank you. So I was literally at this dinner party and someone said something, I’m like, “That’s really stupid.” They were like, “What?” I’m like, “I wish I could be polite, but that’s the stupidest thing I’ve ever heard.” They’re like, “What?” I go, “You don’t even have any intellectual underpinnings to anything you just said, and I just can’t take it. I’m going to finish my dinner over here.” That’s what a hot take is to me. Ezra Klein: I admire this part of you so much. Really, yeah. That’s a hot take. Ezra Klein: I can barely get my external monologue to work at dinner parties. My internal monologue, I just really would not have, I think, the moxie to make it work. The brakes are off. But I think hot takes have taken over a lot of even really good journalistic institutions, and they’ve hired a lot of people that do hot takes and I hate them. I think it brings it down. Ezra Klein: Something I think about is that, when I started blogging, like in 2003, that was early blogging, 2001 is sort of the beginning of it, a little bit earlier with Dave Weiner. There was so little political opinion available. If you wanted political opinion, I grew up in Irvine, as I mentioned, so we got the LA Times. Not that when I was 10 I was looking for a political opinion, but if I had been, if at 10 I’d wanted more political opinion, it’s like we got the LA Times op-ed page and that was it. We didn’t subscribe in my house to any political magazines, there was no cable news ... It’s so weird to think about this. There was no political opinion. One reason blogs took off was that all of a sudden there was more political opinion, and more voices and perspectives could be recognized. There were really political opinions, and normal ones, and hot ones, and people cursed in these different ... It was great. But it still wasn’t that much, it wasn’t what most places did. Then everything is online, everything is easily accessible and everybody explodes looking at blogs, and also looking at what’s cheap to produce, the amount of available political opinion. Now we’re drowning in political opinion, there’s so much. But it’s not just political opinion. It’s opinion on everything. Ezra Klein: All opinion, yes. On everything. Some of it’s fantastic, by the way. Ezra Klein: Some of it’s great. Some of it’s really funny. There was a series of really funny Michael Cohen ones today that made me laugh all day long. They were great. Ezra Klein: And Twitter and Facebook, they’re also people’s ... Right. Ezra Klein: It’s not that opinions are bad, it’s just that one thing I think is so weird is how rapidly we moved from, I think, the well-informed person going about the world would’ve liked a lot more thoughtful opinion about things, too, it’s hard to get away from all the opinion there is about things. I don’t think ... people don’t want it. What happened I think, something we did at Recode a lot was we would tell you, you were seeing the mechanics of things. We’d say ... Peter Kafka’s the perfect person. He’s like, “Let me tell you what’s going on with Comcast.” Ezra Klein: He is the perfect person. He is, in that way. He was like, “This is a shitty deal. So here’s why.” You wouldn’t ever do that. You had the to-be-sure statement in the, “To be sure, some people feel this deal is problematic.” That line, which means it’s a shitty deal. I think we pulled it off and said, “We really need to tell you, this is a piece of shit.” That’s the kind of thing we did a lot of. Then we would use illustrations a lot, to show that ... My favorite thing, and I want you to all go look at it, we had a ball gag that we would put on Eric Schmidt all the time, every time Google said something stupid. Ezra Klein: Excuse me? It was an illustration of Eric Schmidt with a ball gag. Ezra Klein: Oh, it was an illustration. It was an illustration. Ezra, you naughty Ezra. See, there’s so much ... This is going to be a good partnership. I see this already. You’ve already been affected by San Francisco. So it was great, because we’d have a news story, like once again Eric Schmidt said something inane and it was stupid and we had the ball gag picture. It would be perfect. To me that was a perfect piece of journalistic ... It was really well done. Ezra Klein: And the Pulitzer committee, I’m sure, recognized it, put forth rightly. No, but I’m saying it was interesting, because everyone else sort of copied, not the ball gag, but everyone else went that direction. Ezra Klein: Something that was ... Sorry. Everyone went that direction, and I think it was not the worst direction to go in for journalists, but I do think that now everyone suddenly is, it’s like making avocado toast. Everyone’s making avocado toast, and not every makes a great avocado toast. Ezra Klein: I think it’s hard, honestly, to make a bad avocado toast. That’s like the genius of that. But the one thing I do want to say, and I can tell that we’re supposed to move to Q&A in a sec ... Right. Ezra Klein: Let me just say one last thing before we move to Q&A, which is, something that was really interesting to me to see when I was at the Post was that you could write the same story as news, news analysis and opinion. Yeah. Ezra Klein: You were just saying that there’s, “Some people think this is a shitty deal.” Like, “Critics say Comcast’s deal is terrible.” Right. Ezra Klein: Then there’s the kind of bland, but still, “News analysis: Comcast deal has problems.” Then there’s opinion, like “Comcast sucks.” You could write the same thing in different ways, it’s who you quoted and what order it went in. That was always really interesting to me. And I always thought that in the traditional way we did it, we made it too hard for the news side to tell the truth and too easy for the opinion side to lie, but now I think we also sometimes ... Opinion’s gotten so easy and thick out there that we don’t do enough of the stuff that was behind a lot of that news. There was good process, even if there wasn’t always good product, and I don’t want the old even-handed news product, but I do want to bring more of that process into it. That’s a really good point. All right, questions. We didn’t even get to Facebook, which, we don’t care. Manny Yekutiel: Yes, so we’re going to do open Q&A. Here that is ... Look, that just filled itself. What happened? Manny Yekutiel: What are you talking about? The grapefruit juice just ... Listen, Dobby. Manny Yekutiel: What? Are you sure? No, it’s like Dobby. I’m making a Harry Potter reference. Manny Yekutiel: You guys saw that happen. People without children, which is most of you people. Manny Yekutiel: Okay, so we like to give the public an opportunity to interact with you guys directly here because it’s a small living-room setting. Yes, please. Manny Yekutiel: We’re going to start with a question right over there. I’m going to hand you the mic, and if you don’t mind standing up and saying your name, we appreciate it. And real quick, does this part go on the podcast too? Yes, it does. Manny Yekutiel: All right, good for me to know. It all goes up. Jewell: Hi. My name is Jewell Stewart, and I have a question about, I thought it was really interesting how you were talking about the difference between the cultures in D.C. versus over here in San Francisco, and I’m wondering a little bit about the process versus product question, which is that the product of the news, the news inasmuch as it is a product is being driven more so by the imperatives of the market that exists here. It’s like the limitless growth opportunities that Silicon Valley sees, and that kind of has — not kind of, it has certainly — diminished the influence of local reporting, local journalism, and so I’m wondering about that. And to your point about the Facebook question, how the pivot to video imperative has really demolished a lot of the smaller-scale things, like we just saw Mic last week or two weeks ago or something fire a whole bunch of people. Everybody. Jewell: Everybody, yeah, so I’m wondering about your takes on the influence of technology on journalism, specifically regarding those two things. Why don’t you start. Ezra Klein: Yeah. It’s a great question, and a couple thoughts on it. One, “Pivot to video,” it makes me so mad. We don’t like that. We hate that. Ezra Klein: Vox, we published videos before we published text, and video was an important part of our journalism, and we didn’t go into it with a business case. Today we have more than five million subscribers on YouTube, it’s our biggest platform, we have a Netflix show. It really made me angry when a bunch of publishers went into video, and I’m not calling this out of anybody in particular, but a lot did. Whereas what they were trying to do was flood the zone with volume, because video had higher CPMs, so people would accidentally click on a bad video on an article that was getting heavy traffic. Or there was this move to Facebook, and everybody’s doing this short, silent autoplay, silent newsreel, and it wasn’t good work. There’s a lot of, I think, business in video, but there’s not good business in video just as a business strategy. You need an audience strategy. That’s one piece of it. Yeah, I was saying, if you do the product because some advertiser wants it, it’s like doing, like we do conferences. We do our conferences, we went to our conferences, and then we find the sponsors. We don’t do them because ... Whenever the sponsor comes to you with, “We’d like to do something on the future of innovation and AI and the ethics,” I’m like, “I’m going to go over here. I’m not doing that.” You know what I mean? I think that’s one of the things. To the local news question, I think it’s a really important one. Because I just was discussing this the other day. I interviewed AG Sulzberger, who’s the new, what is he, a publisher? He’s the publisher. Ezra Klein: You interviewed him. Yeah, I know, I forget. I get it wrong. He’s the publisher of the New York Times now. He’s the son of the other Sulzberger. There’s lots of them. He’s very smart, a smart young man, and one of the things I said, “What would you do if you got a billion dollars from Laurene Jobs,” who has many of them, and would be kind of cool. He’s like, “We want to make our own billion.” I’m like, “I don’t care, what would you do with a billion dollars?” He wouldn’t answer my question, which was irritating to me. If I was the New York Times and I was given a billion dollars, I would buy up local newspapers all over the country and do a New York Times job on them, like make them really good across ... That’s what I would do with a billion dollars. Bring back local news. Look what’s happened in Miami around Jeffrey Epstein. There’s just, if you put money into local news across the country, and I’m talking about a multimedia effort, like a newspaper but with all kinds of effort, if I was a billionaire that’s what I would do. That’s exactly what. I’d find that kind of thing and do something with it. Ezra Klein: A couple just quick thoughts on local news and tech businesses. One, on how product has affected and how technology has affected all of our business models, this answer may be off message, and if so, Jim Bankoff, I’m sorry, but I think for a long time ... Not a long time. There was a period of time in the media where the idea was that digital media companies were going to be tech companies with tech-like scale and tech-like returns. There was all this venture going into it, and there was this idea that it would be more akin to something like a Facebook, not at that scale, but like that, than actually a media business. What seems to me to be happening now is, it’s turned out that’s not really true. You are building media businesses online and they’re going to get media business-like returns if things go well and you’re going to need a mix of different revenue strategies. You’re building like a new Conde Nast, things like that, and it’s a pretty straightforward business model. But it isn’t as exciting, maybe you become a 10, 50, 100 billion dollar company, and you just figure out the business model later. I think that’s one thing that’s happening, and I think it’s been pretty hard. I think a lot of groups didn’t go into it with the business strategy. I actually think one good thing for Vox Media is that our CEO, Jim Bankoff, had been around the block in media and tech a bunch of times, and I think always was a little bit more sober. The other thing, just about local real quick, I don’t know, and this is hard, I don’t know that the market will furnish a business model for as much news as we ideally need to have. I think there’s going to have to be, if we’re going to get the things, particularly at the local level, that we need, there’s a real role for philanthropy, and there might even be a role, as there is in a lot of other countries, for the state, for subsidies of different kinds. We do this for arts here. It’s not crazy that you might see local journalism as a public good. But I see a lot of money go into local investigative, and I wish I saw more go into actually just building local journalism institutions. You need a platform for investigative to stand on. People need to be coming every day to read something they care about, and that’s what gives the investigative force. I see a lot of people want to invest in, or fund, local investigative, but I’m not seeing as much of what Kara’s saying, which is trying to build ... Just basic block and tackle. Ezra Klein: Basic excellent new generation local outlet. I think you can make money at it. Ezra Klein: I do too, but I’m not sure you can everywhere, and everywhere deserves great local journalism. Yeah, absolutely. Manny Yekutiel: All right. Right here in the front. Speaker 1: This is a little bit of a follow-on question to that, on local journalism, and it has to do with, both of you were speaking about the decline of cocktail party scoop journalism, and the thing is, in D.C. that’s definitely true in terms of the way that our elected officials tend to operate, and the way bureaucrats tend to operate, but it hasn’t felt as true when it comes to state houses throughout the country. You essentially have 50 different state houses where you’ve seen capital bureaus shut down over the last several years and NPR affiliates might be the only institutions that still have capital bureaus in most state houses. What role do you see in terms of a resurgence of that sort of cocktail party scoop type of journalism in that? It’s hard because those were always young journalists that were at state ... It wasn’t always the most ... You started off at City Hall. It was one of the early ones that you would do. I think what’s fallen apart is that mentorship system of moving up and that really is I think a problem. I think that’s always been a problem right now in journalism is that people at the lower levels don’t train up upwards. They move very quickly from thing to thing versus getting training. I think that’s one of the issues that just doing those stories every single day, like doing whatever, the city council meeting. I mean, I did them, I don’t know if Ezra did, but I did. I did a lot of those like just endless stories that you just get good at and get smart at and stuff. I think that’s one of the problems. Then when they just don’t have people there anymore, there’s just physically no people covering these things. I don’t know what the answer to that is. It seems to be every state in our country should have a major newspaper and then a major city newspaper, but that’s not the case. I’m not sure what the solution is. Ezra Klein: I would say state house journalism was always cross-subsidized by big-city journalism and national journalism. Who did great coverage of the California state house? To a large extent, the LA Times, which also did national and international for that matter, but was also rooted in LA, which is a huge city, one of the biggest cities in the world and you had that in smaller ways in a lot of states. Now in some states, obviously the state house is in the biggest city, but in a lot, it’s not. It’s been the weakening of those major metropolitan papers that has really gutted good state house coverage, because excellent journalists wanted to be at the LA Times and being at the state house for the LA Times was a really good way to do it. Or similarly, like the New York Times is based in New York City and every journalist wants to be at the New York Times or most of them do, but they also send people to Albany and it’s like that is how you become a national reporter at the New York Times. That’s, as Kara was saying, that’s an important thing ... Yeah, it’s a path. Ezra Klein: ... and so I do think it’s like the loss of those institutions and the big city metropolitan midsize daily business model that has destroyed state house coverage. There have been cool efforts to bring it back on its own, like the American Independent Network, but they’ve died because people don’t just want the state house coverage. It’s got to be bundled with the city they care about and the region they live in and the national news they care about or else you end up having state house coverage that is either only philanthropic or it’s for lobbyists, which is not the best kind of state house coverage. Or you have like the New York Times or someone dropping in to a particular state when it gets to be ... Manny Yekutiel: Right. ... And that happens a lot, but it’s still ... Manny Yekutiel: I’m going to get to you after this, but could we get over here in the back, do you mind coming to me because if it goes over there ... Yes, you right there. Yes, it’s going to do that whole like squeaky whale noise thing. If you don’t mind saying your name. Audience member: I have a question about false equivalency. I think the news right now is very ... if you look at just what’s happening, it’s very liberally biased and I think newspapers have a hard time with that. I read the New York Times religiously and I think they do great reporting, but if I look for example at how they’re covering what’s happening in Wisconsin, I just get really upset. I’m wondering what you think about that and why you think, in general, newspapers have such a hard time talking about Trump lying and all this false equivalency on both sides. It’s interesting because I just tweeted something like this because why do we keep ... We said something false and they write a headline of what he said versus ... Today it was the same thing. I agree. I had a story ... I think reporters type things down. I’ve said this many, many times. Peter Thiel was giving a speech at the National Press Club and everyone wrote a news story and what he said and I was like, “What are you doing? Half the things he said are just codswallop, it’s bullshit.” I just did a blog like, “Oh, he says this, but let me just tell you what actually is happening,” and I just did that. I was sort of irritated by how we were just sort of saying what they ... That was the experience I had, but I am irritated by ... we just say what they said and ... Audience member: My concern is that I feel like people that are uninformed ... Right. Audience member: If things aren’t being called out for what’s actually happening, there is this bias to think, “Well, everything ... “ Yes, because everything’s equal. I just did a podcast with Andrea Mitchell, Chuck Todd and Halle Jackson. They were talking about this very thing. She said, “What do you do when he says something crazy every 15 ...? Do you not report on it? Do you report on it, do you not report on it?” And she goes, at one point in a meeting, because she’s the head of her show, she’s like, “I don’t care what he just tweeted, we’re gonna just do the news,” and it was like an actual news story of something. But then he tweeted something that actually was news and then they’re like, they didn’t tell her and she’s like, “Why didn’t you tell me that?” Well, you said not to ... she was sort of stuck in this situation. So, whatever he tweeted was actually a piece of things ... some of them are newsworthy and some of them aren’t, but she was talking about the difficulty of doing that. And there’s a very straight-ahead journalist who’s been in it forever, really having trouble figuring out what to do. Because every ... someone else will rush in and cover it, right? Essentially ... you guys don’t do reactive stuff like that, do you? Ezra Klein: We try to do less ... we’ll react to something we think is really important, but to what you’re saying there: There is the issue of Trump tweeted something and it was reported in a straightforward, dumb fashion. Then there’s the issue of Trump tweeted something and everybody’s falling all over themselves to call it a lie, but they’re also falling all over themselves to cover it. I would say the caravan is a really good example of this. Trump dominated the news ... whatever happened to the migrant caravan that was gonna destroy America, by the way? Here we are, weeks later, it’s come further forward, somehow the country isn’t up and destroyed. There was a lot of good coverage of that, but we let him completely dominate the coverage for something that wasn’t that big of a story. So, that’s another thing, and it goes to Andrea Mitchell’s issue. I think a lot of the problem is also deciding really what is news and when to ... I’m actually right now, I’m less worried about false equivalence, which I think the news, in general, has gotten better at, though certainly there are bad examples, than I am about amplification. People are manipulating us to amplify them and I don’t think we are nearly sophisticated enough about how to handle that, nor the answers nearly as obvious as they were. And somebody’s done something terrible, maybe say it’s bad. Manny Yekutiel: Here in the front. Peter: Hi, my name’s Peter and I have a question for Mr. Klein about his article — and you can respond — from November titled, “To Beat Trump, House Democrats Need to Fight on Policy, Not Just Scandals.” In the article, you bring up the reporter’s paradox of their desire to cover the Democrats, they’re gonna talk about Trump’s scandals and not policy and the leadership of the Democrats wanting to focus on policy but the reporter’s not covering it. So, how do the Democrats resolve that and how do you persuade the reporters not to try to gin the system by focusing on what’s gonna be good publicity for them? Ezra Klein: So, one, I’m not sure there is a system-wide solution. One thing I have tried to do at the places I’ve been, I ran Wonk Blog at the Post, which was a policy focused vertical, and then Vox is something that I, along with Matt Iglesias and Melissa Bell, launched, and everywhere that I have run political coverage, I have made it part of the culture that we take policy seriously, Democratic, Republican, if somebody’s introducing a big new policy, if Trump is, if anybody is, we see that as headline news. And by the way, I think the audience does. We’ve always done really well on traffic. We’ve actually usually outraced more horse-race-oriented publications. So, the way I try to handle it is by orienting the values of the organizations that I’m in towards the things that I believe, that we believe, are important. To the broader point, one thing I was saying in that piece is that if you looked at how the Democrats ran the election, they didn’t spend their time on Trump scandals, they spent a lot of money on ads about health care. Now, they’re gonna be in office and nobody’s gonna listen to their health care talk and everybody’s gonna cover their scandals and if any Democrat anywhere in the House mentions the word “impeachment,” it’ll be headline news everywhere all the time. It just was today, actually. Ezra Klein: There you go. And so that’s gonna be, that’s the tricky waters for them to navigate. I don’t advise political figures, so how they navigate it is up to them. But I do think it’s something that we in the media need to think a little bit about, about whether or not we ... I think another way to think about this is the Clinton email coverage during the campaign. Clinton’s emails got more coverage than all policy issues in the campaign put together, Trump and Clinton, and by the way, it wasn’t close. They got way more coverage. And journalists will often say, “Well, look, it was a story,” and sure, it was a story, but how big of one? Were we ordering things correctly, because people are taking their cues on what’s important from, among other things, how often we’re covering it and how often we’re covering what else is going on and was email security really the issue that that election was turning on? I kinda don’t think so. So, I think that we need to do some soul-searching in our own profession. This is what I was saying a little bit earlier with newsworthiness, with what we believe to be newsworthy and what we don’t, because right now, I think we kinda tell the public newsworthiness’ importance, but it’s actually kinda outrageous, scandal, secret, it’s like a weird cocktail of things and I don’t think we’ve got that cocktail right. Yeah, because that stuff does work. Nicole, again, I urge you to listen to the Nicole Wong thing, but when you focus on speed, virality and engagement, you’re gonna get those kinds of stories and they’re gonna rise to the top and then people are gonna do them. It takes a lot of a very certain kind of person to resist it. It certainly does. It takes an editor that’s like, “Eh, I’m not interested.” Ezra Klein: I don’t hugely agree, to be honest. I think that we have a lot of received wisdom about this that isn’t quite true. Every place I’ve been, it’s like, “Oh yeah, the policy, that’s gonna do way worse than the other stuff,” and I’m not saying that Trump-Russia doesn’t do well. Some of it does and certainly if you get, if there’s a huge story ... but a lot of our top coverage in everywhere I’ve been has been the policy coverage. I think often it’s harder to do well, but I thought about this another way, because I was actually gonna go make an opposite version of this point, so I went back and I looked at Donald Trump’s tweets. I was like, I wanted to make the point looking at this that when Trump tweets like, “Media is the enemy of the people,” and blah, blah, blah, blah, that he gets way more pickup on Twitter than when he tweets about jobs numbers or something else like that. And then it turned out I was wrong. So, I couldn’t make that point, which was terrible. But, it was kind of encouraging in a way. Right. Manny Yekutiel: Let me ask real quick to you, Ezra, on this particular point: Vox is kind of known for being a place that doesn’t take the bait and has substantive policy coverage that’s also interesting. Ezra Klein: Oh, why thank you. Manny Yekutiel: I’m not saying this to brown-nose you, but there are probably a lot of publications that don’t wanna cover these things in such a sensational way, but they feel like if they do it, they won’t make the money, the business won’t survive. So, what do you think ... There is a pressure to do the sexy ... Manny Yekutiel: On Vox? No, not on Vox. On lots of publications. You can see it. Manny Yekutiel: But how do you not give in to the pressure and keep the business alive? Because Vox seems to be doing it. Ezra Klein: I don’t agree that ... I agree that we feel this pressure. I don’t agree that the pressure is as real as we think it is. The thing that I do think is true is that it’s quite hard, I think it’s harder to do a lot of these policy stories well, to find the angles on them, to understand how to make them sellable to an audience than some of the big scandal or the big conflict. Now, some places do do it well, right? I think if you name most of the really big outlets, they’re excellent at this, like, the New York Times, Washington Post. But I think that we have been trained to think that people don’t like this stuff and we often don’t do it well. I think, by the way, policy journalism is particularly hamstrung by false equivalence. Policy journalism, generally speaking, the question people have is, “How does this work and is it good? Will it be good for me?” And if the answer’s, “I can’t tell you,” they’re gonna leave. Now, if you can go and say, “This is gonna be terrible for you or great for you. This is a great bill or a bad bill,” I do think it pushes you toward taking a position. I think one reason that the organizations where I’ve done this it’s done pretty well is because we’ve been willing to take positions and that relates to what people actually want out of that coverage. And if you can’t do that, the coverage tends to fail. But I don’t think people don’t wanna know about things that are important. I think sometimes it’s harder, but ... I do think twitchy ... Ezra Klein: ... I think people want ... I think people are tired. I get the sense that people ... I’m working on a podcast idea and it’s so non-twitchy, it’s like the opposite. The podcast, when we started the podcast, one of the things was I was told you can’t do anything in an hour. And I’m like, “I’m doing it an hour,” you know what I mean? People, I think, really want substantive discussions. I think in the next era, leaning into smart is probably a really good idea, pushing towards smart. Ezra Klein: I got 50,000 retweets today on a tweet about Paul Ryan’s record on deficits ... Manny Yekutiel: Wow. Ezra Klein: It’s like, you know, people knew stuff... Manny Yekutiel: I’m thinking in particular, I know amongst a lot of people here ... Okay, let them ask questions. Manny Yekutiel: I will. But the ... I will. But just an example of this is that ... Oh, you’re still talking. Manny Yekutiel: ... Syria video you did. Ezra Klein: Yeah. Manny Yekutiel: Where you explain the Syrian conflict and all the ins and outs. That was a policy thing that a lot of people really ... Ezra Klein: That got like 120 million views. Yeah. All right. Manny Yekutiel: Next, over there in the striped shirt. [sound of glass breaking] Oh. Manny Yekutiel: Mazel tov! Anish: Hi, Anish Johri. You guys raised a really interesting point about news versus analysis versus opinion. So, as editors, you have folks working for you. What do you tell the people who work for you that ... What is their role as journalists? Is it to just tell the rest of us that aren’t in Washington, aren’t going to these parties, is it to tell us what’s happening? Is it to provide an opinion on what’s happening or is it to provide analysis? And I think what’s tough is, liberal readers are never gonna read Breitbart, conservative readers are not gonna read some of the liberal outlets. A lot of folks don’t read just pure news. Those don’t get clicks, and so opinion seems to become important, but there are a lot of problems with what we see in the echo chamber Twitter. As leaders, what do you tell folks that look up to you, what is the role of journalism? Well, I’m way down the other road for a long time now. I’ve always thought that ... I look at it as reported analysis. You can’t do analysis without doing the reporting and we’ve been doing that at Recode since the very ... since All Things D and before. I was so tired of that “to be sure” statement, those really ... I just was exhausted by it and I actually had a fit at the Wall Street Journal when there was a story about Webvan, I don’t remember, one of them, and they were like, “Kara, you need to get an analyst to say what you already know from your smarts and doing the reporting and having analysis to say what you wanna say.” I’m like, “Why can’t I say what I wanna say? I already know. I’m gonna tell you. This is a disaster, it’s gonna go up in smoke,” and they wouldn’t let me do it and you had to put the “to be sure” statement, which is “to be sure, comma, some people think ...” and then you quote someone. It just was ridiculous and I had this whole screaming monologue in my head that I decided to create a website with my screaming monologue. And so, I think what we do is you have to do the reporting to say, for example, in a story I worked on, “Yahoo is a goat rodeo, people, let me just tell you, I’ve been inside and it’s a goat rodeo in there.” You know what I mean? Manny Yekutiel: What’s a goat rodeo? A rodeo with goats. Do you know what I mean? Ezra Klein: Explanatory journalism, folks! Right, exactly. But you know what I mean, I have done the reporting. I’ve talked to hundreds of people, I’m gonna tell you this is a mess or I’m gonna tell you this is going on at Uber and stuff like that. What I do with my reporters is, “Tell me what you found out and then tell them. Tell the readers that and don’t be scared to say this is the determination you made, because you’re not wrong, because you spent the time doing it. You can make a determination of something.” And so, we’ve been doing that forever. We did that from the beginning and I want them to really do that a lot, but they can’t be just a pontificating person who just has an opinion about something, they’ve gotta go in there and find out and talk to everybody and then give people a chance to respond too. That’s the other thing, is letting these companies or people you cover respond, so you’re fair to them. It’s over, the old kind of way you do journalism is over, because it’s useless and it’s not true, really, I think. But we’ve been doing it forever, so it’s not fresh and new. Manny Yekutiel: We have time for one or two more questions, here with the white collar. That’s you. Oh, and there’s a hat. Arie: Yeah, the hat couldn’t come out before. Okay. Ari: Hi, my name is Ari Israel and my question is to Kara: When did you decide that you were cool being called a “bitch,” because clearly all women walk the fine line between weak and witch. Witch or bitch? Ari: Whichever one is allowed for the stream. Wow, there’s so many. Any of them. We can do anything ... Manny Yekutiel: It’s a podcast. Anything goes. I was always comfortable. I was comfortable from day one. I don’t know. It was interesting, I was just at this lunch called “The Old Grumpy Girls of the New York Times Network,” they had a lunch there for women at the New York Times. It was great, it was this lunch, it’s something like Old Girls Network, I don’t know. Anyway, someone asked me that and I was like, “I don’t know. I just have always been obnoxious.” It’s just since the beginning, and so, I don’t know. I just don’t care what people think of me. I wish I did. No, I don’t. I don’t know, I don’t know. You know something? Fascinatingly, nobody calls me that, people don’t attack me that much on Twitter. Someone was just pointing out to me I don’t get that ... I get less strafed on Twitter than you might imagine and I’m not clear why that is. Ari: You don’t let people push you around. I guess, yeah. Ezra Klein: I once saw you get attacked on Twitter, or even what you perceived as an attack on Twitter, and you responded with such overwhelming force that I don’t think it’s a mystery at all. I was like, “I am never gonna piss Kara off under any circumstance.” Oh, I know what it was. Yeah, that was not nice. Don’t worry about being called anything, honestly. Barb: All right, you can call me a bitch. Hi, I’m Barb Kinney. So, we’ve touched on Twitter a lot tonight and I think this is a good last question, because I wanna know about the future of journalism ... Hi, Barb. Barb: Hi Kara, how are you doing? I knew her back in D.C. D.C.! Barb: When she was a pup and I was too. Yeah. I was never a pup. Barb: But so, I’ve been frustrated with Twitter as all the reporters are reporting on Donald Trump’s tweets and part of me always wished that everybody would just boycott it for a while, but I now know that’s not gonna happen, because as you said earlier, how I guess important Twitter can be with what people have to say. It’s a platform. But what is the future of journalism if all we do is report on Donald Trump’s crazy tweets? Ezra Klein: So, a few things. I’m so sympathetic to the introduction of this question, but I wanna stand up a bit for my colleagues and say even now, even at its worst, there is so much other great work going on. Part of the problem is that some of what gets lifted up through the algorithms — and I think this is actually more true on cable news — there can be a focus on some of the work we do and other parts of it get lost, but there’s just remarkable journalism happening. Not just on Trump and politics, but out on foreign policy, a million great things are happening at any given moment. There’s a lot of bad stuff, but a lot of good. I do think that the future of journalism, particularly as people are moving more to subscription models, particularly as you can’t just rely on the algorithm to have a business model, particularly as you actually have to build enough of a relationship with the audience that they’re gonna fund you in some way or another, like, they’re gonna take actions on your behalf. I do think, and I hope, that that’s gonna push forward an amount of quality journalism. I don’t think you can ever really just be on Trump’s tweets. I think that you need more than that, but I think by the same token that if we don’t learn how to stop letting ... let me put it this way: The problem is not that we report on Trump’s tweets, it’s which ones we report on. We have decided that the president saying something offensive, I don’t wanna say “crazy” because genuinely crazy is newsworthy, but offensive often isn’t. The president saying something offensive is more important than any other president saying something important. I remember watching George W. Bush or Barack Obama give these very carefully crafted speeches on the future of manufacturing policy, where they found a setting, they went to a steel mill in Ohio and it was actually a guide to policy and they could not for love or money get anybody to cover that. And Donald Trump can get up and call Elizabeth Warren “Pocahontas” and it’s the front page everywhere. If we let the craziest actors crowd everything else out, if there’s no room for people who speak more quietly and more soberly and more thoughtfully, then we are going to get the kind of politics we create. There’s a very good argument to be made that the reason Donald Trump won the Republican primary is because he squeezed out coverage of every other candidate by just being more outrageous than any of them all the time. That’s a terrible, terrible business incentive structure. So, to what you were saying, I’m a little less worried in this respect about the future of journalism than I am about the future of politics. I’m worried that we, in journalism, are setting up a really terrible incentive structure in politics. I am very comforted that Michael Avenatti did not see a path for himself, but that might’ve had other dimensions to it, right? He was under legal clouds and other things. I am worried that we are creating a very, very clear way of winning now, where it’s like if you can just say enough nuts stuff so nobody else can get coverage, you win. That hasn’t tended to work for everybody. I think he’s an unusual case. Ezra Klein: That’s why I’m comforted by Avenatti. But I do also think that people are a little ... I believe I am the only person who watched every episode of “The Apprentice.” I did watch it, I’m sorry people, I did. I get why he’s popular, completely. I watched every episode. You get tired of the show after a while and I think a lot of journalists are tired of the show ... I get a sense that people are tired of the show. Do you know what I mean? Like, the show gets ... it’s sort of like “The Truman Show,” it’s like, “Oh, this blowhard. Fuck him.” Ezra Klein: Have you seen “The Truman Show”? No, no, the movie. No, at the end, he leaves. I know what happens at the end. I know, I know. But at the end of “The Truman Show,” they’re like, what’s on next? Ezra Klein: Oh, right, yeah. Remember, that’s the last line of that movie, which is a fantastic movie if you’ve never seen it. Ezra Klein: See, she did watch it. I did. Of course I did. I’ve watched it 50 times along with “Broadcast News” and some others. But I did watch “The Apprentice” and you did, by the end, the formulaicness, the tiredness, it got exhausting and you turned it off. I know it sounds crazy, but you did. And that interview with Chuck Todd and Andrea and Holly, you felt it. You feel it when you talk to journalists, everyone’s tired of the show. So, it’d be interesting to see what happens. And what’s really interesting right now, there’s a show on Broadway right now, “Network”, I urge you all to watch the movie and read the book, “Network,” it’s a Broadway show right now. It’s really fascinating to understand how all that was so outrageous and every bit of it is now existing, which is ... except for the murder on television so far, but it’s just a really interesting time. So, I have some hopes too. I think people are really leaning ... people seem to be ... the stuff we’re making money on is all smart and long and not short and twitchy, it seems like it. And so, that’s a positive thing. I’m gonna end this by asking Ezra a question: What’s your favorite journalism business model these days? Ezra Klein: The ones that make money. Yeah, okay, but which one? End on that then. Ezra Klein: What’s my favorite? I’ll say this: One of my favorite things that we’re doing, the thing that we’re doing that we weren’t doing a couple years ago and it’s been really good for us, our souls, is we’re ... we’ve become a production house, so with mid-roll, we’re making “Today Explained,” which is a daily podcast ... That’s great. Ezra Klein: ... and with Netflix, we’re making “Explained.” And we have another one coming with YouTube and I am ... I think those things have expressed the soul of what we want to be as well as anything we’ve ever done and they’re slower and they have a very different incentive structure around them and it’s felt healthy. It’s felt healthier than a lot of the other things that we’ve tried. That’s been really encouraging. And to what you were just saying, to what you’re making money on, being your best work, those are places where we’re making money on our best work ... Right. Ezra Klein: And that too has felt healthy. So that maybe is my, if I had to pick a favorite, but I love anything that allows us to actually fund our journalism. Right, but it’s true. And what’s really interesting is like I think of my kids too, because my son, he literally was like, “Do you know Ezra Klein?” I’m like, “Yes,” and he goes, “Can I meet him?” And I go, “Okay, I’m kind of famous,” but he wanted to go and meet Ezra and there’s a picture of him, “Oh, it’s Ezra Klein,” but now he likes Carlos ... Ezra Klein: Carlos Maza? He loves Carlos Maza. Ezra Klein: That’s awesome. I was like, “Don’t you wanna see Ezra Klein?” He’s like, “No, I wanna see Carlos Maza now.” Ezra Klein: Host of our Strikethrough series on YouTube, which is awesome. Right. He loves it, he loves it. It’s amazing. So, I have great ... my kids watch substantive stuff even if they’re doing it ... I have to say, my one son in the morning watches ... so, you see them watching substantive stuff, which I think is really interesting. So, I do think there’s a tiredness of the twitchy and the tiredness of the thing and we’ll see. We’ll see how it goes, but anyway, Ezra Klein, welcome to San Francisco and the Bay Area. Manny Yekutiel: Before we finish, I do wanna take 10 seconds and just say something about you, okay? No, don’t. Manny Yekutiel: This is a conversation about the future of journalism and there are few people right now writing in journalism that have the courage and brilliance and the chutzpah that you do. Chutzpah? Manny Yekutiel: The chutzpah. Chutzpah. Manny Yekutiel: And I just wanna say that people like you who have been willing and continue to be willing to hold power accountable and to hold people’s feet to the fire and do it so articulately ... Thank you. Manny Yekutiel: You are the face of journalism, the future of journalism ... Yeah, I’m real old, sweetie. Manny Yekutiel: We are so lucky ... I’m getting a little tired. Manny Yekutiel: We’re lucky to have you. Come on, young people. Manny Yekutiel: And so is Vox. Thank you. Manny Yekutiel: Let’s give one last ... I just wanted to say, Ezra and I are gonna be making some really cool stuff together. A lot’s been reported on this stuff, but we ... one of the things that’s great about working at Vox and other places is we just change as we do ... we find interesting things, we shift, we just decide on things. And one of the great things about working for it is the freedom to do that and to say, “Ah, this isn’t working, we’re doing this.” And we have some really exciting stuff and there’s also Casey Newton in the audience right there, who’s doing an amazing newsletter. There’s all kinds of stuff that we’re doing that I think is really fun for us to do and also really great content. And so, we’re pretty jazzed about stuff. Manny Yekutiel: Can I say a couple upcoming events real quick? Yes, go ahead. Manny Yekutiel: So, on Wednesday we have a conversation on the future of work with Leila Janah. Oh, nice. Manny Yekutiel: And then we have a bunch of other fun events. Next week, we have our local town hall with the District 8 Supervisor, Rafael Mandelman, and if you guys liked tonight, please share your love. It’s “Welcome to Manny’s” on Facebook and online and let’s give a final, big round of applause to Kara Swisher and Ezra Klein. Thank you.

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posted 3 days ago on re/code
The search giant’s top executive was grilled on the topic by members of Congress before the House Judiciary Committee today. During a grueling 3.5 hour congressional committee hearing today, Google CEO Sundar Pichai faced some tough questions around his company’s controversial project to build a censored search product in China. Pichai could have used the opportunity to publicly scrap plans to build a version of his company’s core tool, code-named Dragonfly, that would block terms such as “human rights,” “Nobel Prize” and “student protest” from search results in China. But when House Rep. David Cicilline asked Pichai point blank if, as CEO, he would rule out launching a “tool for surveillance and censorship in China,” Pichai deflected. “One of the things that’s important to us as a company, we have a stated mission of providing users with information, and so we always think it’s in our duty to explore possibilities to give users access to information,” said Pichai in response. “As I’ve said earlier on this, we’ll be very thoughtful and we will engage widely as we make progress,” he added. This response isn’t reassuring to critics who say that Project Dragonfly will enable the Chinese government to block its citizens from accessing information it doesn’t like and surveil its political opponents. In advance of the hearing, 60 groups including dozens of leading human rights organizations signed a letter calling on Pichai to drop all design and development of the tool. Instead, Pichai’s response reaffirms the CEO’s interpretation of Google’s mission to “organize the world’s information and make it universally accessible and useful” in bringing search to the world’s most populous country — even if that means putting political restrictions on the type of information that’s made accessible. We also learned some new information about the scope of the project from the hearing. Pichai confirmed that it’s been “under way for a while” and at one point over 100 people were working on it. This presents a contradiction — if, as Pichai stated today, Google right now has “no plans to launch a search service in China” and the project is an experiment, then why have so many people been working on it? And why not commit to stopping its development in light of human rights concerns? Unfortunately, we didn’t get to hear Pichai go into more detail on the topic since members of the House Judiciary Committee spent a significant portion of their time asking about alleged anti-conservative bias, data privacy and other issues.

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posted 3 days ago on re/code
Another day, a similar story featuring Google CEO Sundar Pichai. Republican lawmakers still believe tech companies are biased against conservatives — and it doesn’t look as though that’s going to change anytime soon. A number of politicians accused Google of bias in its search results during a hearing with CEO Sundar Pichai on Tuesday. The main argument from some members of the House Judiciary Committee focused on the fact that a lot of Google employees are liberal, which is common among Silicon Valley tech companies. Rep. Matt Gaetz, a republican from Florida, said that there are some Google employees who chat in a group thread about “resisting” President Trump and was confused why Pichai hasn’t conducted an investigation into employees’ political leanings. Rep. Louie Gohmert, another republican from Texas, brought up a video, published by Breitbart in September, that showed Google executives openly discussing President Trump’s surprising 2016 victory and how it upset a lot of Google employees. “You run off conservatives and you embrace liberals,” Gohmert said. These accusations of bias have been thrown around for years and aren’t specific to Google. Facebook and Twitter have also been accused of suppressing conservative news and opinions. There have already been multiple hearings with representatives from these companies this year where those accusations were discussed. Tuesday’s hearing didn’t do anything to put that conversation to bed. A lot of bias accusations from lawmakers have stemmed from personal experiences, or testimonials from conservative commentators who have been suspended or banned from using these platforms for violating the rules. (The most famous of those, Infowars’ Alex Jones, was actually in attendance on Tuesday.) Gaetz brought up a Wall Street Journal story from September that found some Google employees discussed boosting some “pro-immigration” resources around the time of Trump’s travel ban in early 2017. Google claims the ideas were never implemented. Twitter CEO Jack Dorsey once said that the company was so liberal that conservative employees didn’t feel safe speaking out. Stories like those have supported the idea that these companies are biased, but the lack of hard evidence or statistics means that the conversations around this topic routinely go the same way they went on Tuesday: Republican lawmakers claim that tech employees are biased, which means the systems they build are biased. Tech companies claim that the systems are not biased. Democratic lawmakers think the whole thing is a big waste of time and distracts from more pressing issues. When asked Tuesday if he thought Google was biased, Pichai answered: “No, not in our approach,” an apparent acknowledgment that employees might be biased but that the company is not. The conversation didn’t progress at all on Tuesday. If anything, Gaetz would like to keep the discussion going, and asked Google to conduct an investigation. “I would strongly suggest that one of the crisis response tools that you use is an investigation into the discourse of your employees on resisting the Trump presidency, resisting the Trump agenda, and then smothering some of the conservative outlets that seek to amplify that content,” he said.

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posted 4 days ago on re/code
And Verizon investors seem fine with that. It was easy to predict that Verizon would end up regretting the $10 billion or so that it had invested in AOL and Yahoo. The two companies used to define the internet, but by the time the phone company bought them, they were long past their prime. And no one except Priceline has ever revived a faded consumer internet company — once it’s done, it’s done. Now Verizon has formally acknowledged that it, too, can’t turn AOL and Yahoo around and has written off $4.6 billion of the money it spent buying the two properties. The playbook from here on out calls for a series of staff cuts and asset sales, followed by more writedowns, followed by more cuts, etc. This one contains multiple teachable moments. Just wishing that there was an alternative to the Facebook/Google advertising duopoly doesn’t make it so, for instance. Then again, Facebook and Google can look at the demise of two of the internet’s most powerful companies and remind themselves that this could be their fate, too. One particular lesson you can take from this even if you’re not an internet giant, past, present or future: Giant megadeals don’t belong to the companies that make them. They belong to the executives that make them. And if those execs leave, the deals can go, too. Again, this has been easy to see for a while at Verizon. Lowell McAdams, the Verizon CEO who pushed the company into media over the last few years, left this summer. And his replacement, Hans Vestberg, is a guy who cares about boosting Verizon’s wireless business, not building a media one. (Vestberg didn’t even try to feign enthusiasm about his media assets when interviewed at Business Insider’s Ignition conference last week.) Vestberg’s ascent was followed by the departure of Tim Armstrong, the man who sold McAdams on the AOL/Yahoo combination. And that was that. As I put it a few months ago, when Verizon was still insisting that 1+1=3 and that it was psyched to own AOL/Yahoo: * Guy who built media empire is leaving.* Guy who sponsored the media empire builder has left.* Media empire is a small piece of a company that doesn’t seem interested in building media empires anymore.Draw your own conclusion. But if you didn’t want to take my word for it, you can now take Verizon’s. The company’s SEC filing this morning duly notes “competitive and market pressures” that made AOL and Yahoo worth less than it thought. But the real reason the company has rethought the whole thing, Verizon says, is that new people are running Verizon: “Effective August 1, 2018, Hans Vestberg became Chief Executive Officer of Verizon, and effective October 1, 2018, K. Guru Gowrappan was appointed Chief Executive Officer of the Media business. In connection with Verizon’s annual budget process in the fourth quarter, the new leadership at both Oath and Verizon completed a comprehensive five-year strategic planning review of Oath’s business prospects [italics added] resulting in unfavorable adjustments to Oath’s financial projections.” Translation: We just got here! So don’t blame us. Blame the other guys, who conveniently aren’t around to take the blame. And Verizon investors, who didn’t complain about any of this a few years ago, are happy to take the new guys up on their offer. Verizon shares are up about 2 percent this morning.

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posted 4 days ago on re/code
Plus: Was Spotify’s unusual IPO a trendsetter or an anomaly?; Amazon is making its own server chips — potentially threatening Intel; an interactive cannabis museum and 2019’s munchie trends. Your apps know where you are, when you are — and sell that info to the highest bidder. In a months-long investigation, The New York Times found that companies that buy location data from mobile apps have the capability to identify individual people without consent, even if the companies say they are only interested in aggregate trends. The data is so precise that they could pinpoint a phone at a person’s address and follow that phone throughout a day, linking it with public records to identify a name. Many location companies say users know what they are signing up for when they approve location services in apps, but the explanations “are often incomplete or misleading,” according to The Times. [Jennifer Valentino-DeVries, Natasha Singer, Michael H. Keller and Aaron Krolik / The New York Times] [Want to get the Recode Daily in your inbox? Subscribe here.] Instagram has promoted Vishal Shah to head of product, filling one of its most important executive vacancies. Shah oversaw the company’s shopping efforts, ad products and its IGTV video service; he replaces Adam Mosseri, who now runs the company after being promoted following the departure of the company’s two co-founders this fall. Instagram will soon account for a sizeable part of owner Facebook’s revenue growth, and also keeps Facebook connected to younger people online while helping fend off a potential threat from rival Snapchat. Here’s video from Shah’s September appearance at Recode’s Code Commerce conference.Meanwhile, Instagram has added a voice messaging feature to its Direct messages; users can record audio messages up to one minute long by holding down the microphone button. [Kurt Wagner / Recode] Spotify’s unconventional IPO didn’t disrupt Wall Street — but Airbnb and Slack might do that next year. Spotify decided to sell its shares in an IPO directly to regular people rather than to a pre-chosen group of its bankers’ friends — a move known as a direct listing. On the precipice of a new year that will see some of the tech sector’s most iconic startups become public companies — including Uber, Lyft and Postmates — both Airbnb and Slack are weighing direct listings, and their decisions will go a long way toward signaling whether Spotify’s so-far singular move was an aberration or a trendsetter. [Theodore Schleifer / Recode] A Chinese court banned the import and sale of nearly all of Apple’s recent iPhone models, up to and including the iPhone X, citing infringement of two Qualcomm patents. Apple is already disputing the scope of the ban, saying it only applies to iPhones that run on an older operating system. The direct impact is limited to the domestic Chinese market, but it represents a significant disruption to Apple’s business, and could bring the two parties to the negotiating table in their long litigation war. Apple is appealing the decision. [Davey Alba / BuzzFeed News] Amazon is now making its own homegrown server chips for use inside the millions of servers in its data centers around the world. The world’s largest online retailer and cloud-computing company doesn’t plan to sell its new chips directly to customers, but the decision to go the do-it-yourself route is the latest sign that big internet outfits are willing to cut out longtime suppliers like Silicon Valley chipmaker Intel. Apple beat the other tech giants to this cost-saving trend four years ago when it unveiled its first custom-built chip for the iPhone; Google has also designed specialized chips for its artificial intelligence technology, and Facebook and Microsoft have indicated that they are working on similar AI chips. [Cade Metz / The New York Times] Layoffs are the latest thing in cryptocurrency, as startups are reducing headcount to survive the young market’s biggest selloff to date. Blockchain venture firm ConsenSys recently cut 13 percent of its staff; Steemit, which runs a blockchain-based social network, last week laid off 70 percent of its staff. A number of smaller firms that raised money during the manic 2017 cryptocurrency rally have retrenched sharply or quietly closed. Bitcoin is down more than 80 percent from its December 2017 high, and the total market value of all cryptocurrency, currently about $111 billion, has fallen 87 percent from its early January high of $827 billion. And job seekers appear to be losing interest in the business: The number of searches on Indeed.com for jobs related to blockchain or cryptocurrency fell 3 percent in the 12 months through October; a year earlier, there was a 482 percent increase. [Paul Vigna / The Wall Street Journal] Top stories from Recode Live updates from Google CEO Sundar Pichai’s testimony to Congress today. The search giant’s CEO begins his hearing before the House Judiciary Committee at 10 am ET / 7 am PT.[Shirin Ghaffary and Kurt Wagner] A group of Google employees are calling on tech workers to band together to end forced arbitration. The practice is still prevalent across the tech industry, despite recent criticism and some limitations on its use in cases of sexual harassment. [Shirin Ghaffary] Framebridge CEO Susan Tynan explains why it’s okay to be analog in a digital world. On this episode of Recode Decode, Tynan talks about overcoming investors’ skepticism in order to start her online framing company. [Kara Swisher] This is cool The interactive cannabis museum. Munchie trends of 2019.

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posted 4 days ago on re/code
The search giant’s CEO begins his hearing before the House Judiciary Committee at 10 am ET / 7 am PT. Google chief executive Sundar Pichai will answer questions before the House Judiciary Committee today in what has become a critical moment for the company as it deals with a growing list of prickly ethical debates and controversies. Tuesday’s public testimony will be Pichai’s first before Congress in a year in which many of his tech peers have also traveled to Washington. He notoriously declined an invitation to attend a hearing in September that Facebook COO Sheryl Sandberg and Twitter CEO Jack Dorsey attended. The Senate committee that held that hearing left an empty chair and nameplate in his place. The hearing, which was originally scheduled for last week but was postponed after the death of former President George H.W. Bush, is expected to focus on a couple key areas. The first: Accusations that the search giant’s algorithms are biased against conservative content, a popular complaint that conservative politicians have also lobbied against other major tech companies, like Facebook and Twitter. Facebook, Twitter and Google’s YouTube have all denied that their algorithms suppress conservative content — and even said as much in front of this very committee earlier this year. Pichai met with top Republican lawmakers in September to answer some of their questions on this topic privately after the earlier Senate Committee snub, but this will be the first time he discusses them in public. Another issue that members of Congress on both sides of the political spectrum will bring up: Google’s controversial plans in China, codenamed Project Dragonfly. The company has drawn harsh criticism over the plan to offer a modified version of its search engine that complies with the Chinese government’s censorship. A leaked prototype of the product blocked search results for terms such as “human rights” and “student protest.” Pichai did did not mention China by name in his written opening remarks, which were released last night. It’s likely other issues will arise. When Facebook CEO Mark Zuckerberg testified before Congress in April, for example, the questions were wide-ranging. Google’s data privacy practices will likely come up, especially given the company’s acknowledgement on Monday that a data breach impacting its social platform, Google+, affected 52 million users. Lawmakers could also bring up backlash against the company’s handling of employees’ sexual harassment claims, which caused 20,000 Google workers to walk out of their offices last month.

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On this episode of Recode Decode, Tynan talks about overcoming investors’ skepticism in order to start her online framing company. On the latest episode of Recode Decode with Kara Swisher, Framebridge CEO Susan Tynan joined Kara in Washington, D.C., to talk about the challenges of starting an online framing company, being a startup in the era of Big Tech and how the D.C.-based company is thinking about Amazon’s planned construction of a new office nearby. You can listen to Recode Decode wherever you get your podcasts, including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts and Overcast. Below, we’ve shared a lightly edited full transcript of Kara’s conversation with Susan. Hi, I’m Kara Swisher, editor at large of Recode. You may know me as someone whose house is decorated with framed printouts of Twitter arguments, but in my spare time I talk tech and you’re listening to Recode Decode from the Vox Media Podcast Network. Today in the red chair is Susan Tynan, the founder and CEO of Framebridge. Before starting the company in 2014, she worked at LivingSocial — we’ll talk about that — and the Obama White House. That’s quite a resume, Susan. Welcome to Recode Decode. Thanks. I’m excited to be here. There’s so much to talk about. Unfortunately, you got me on a bad day. It’s the Facebook disaster day, which is yesterday and the day before, but it was a pretty bad story in the New York Times. We’re gonna talk about that, being a CEO and tech responsibility, but let’s talk a little bit about you, yourself, and how you started Framebridge. There’s not many startups started by women. We’ll talk about that issue and why. I know, I’m sorry, you’re gonna have to carry water for all women, but there we have it because tech is such a non-diverse place. Let’s start with your background. It’s a really interesting background. You were at LivingSocial. Who was the CEO? What’s his name? Tim O’Shaughnessy. Tim O’Shaughnessy. Yep. That’s right. I remember, it was back in the day, it was a big deal. It was that and Groupon and everything else. Tell me about your background. Go through it for us. Sure. Before that I had been a management consultant, and then found my way really into consumer tech, sort of fintech before fintech. You worked for Boston Consulting or something like that? Accenture. Accenture, whatever. Same one. Exactly. But actually wound up doing a big project for the Postal Service in which I find myself back in a warehouse. But then sort of meandered through a few different consumer tech jobs and grew to love it. Loved the consumer orientation and the speed. Certainly, that was what I loved most about LivingSocial. I was actually in the Obama White House when friends from a previous job started LivingSocial. Right, and they brought it to Washington? Yeah, it was in Washington and I watched it and it was the most exciting thing in Washington since probably AOL. Yeah, right, exactly, and sort of went that way too. But all right, you went there. What were you doing in the Obama White House? I worked in the budget office and I had a role that was really to solve management issues that could become political issues. It wasn’t a policy job. It was truly things like response to the oil spill, response to GI bill delays. The current administration’s still dealing with that right now. Like you would look at it and say what? Let’s look at the data, let’s figure out what’s happening and make recommendations, and then also have the fun of being able to say you’re calling from the White House. Is that fun? Yeah. It is? What a privilege. What happened exactly? They go, “Oh!” People responded quickly. They do? Yes. What do you think now? I’m not going to ask your political opinion. I definitely was amazed at the caliber of the people. Truly, the smartest people in every field rushed in to the first administration, to Obama’s first. It was an awe to be around these people and I just feel sad about that. Right, okay. You did that and then you decided to go off to do a startup? Yeah, ‘cause I saw them building it and it looked like so much fun and yes. How did you get hooked up with them? I knew them from a previous startup. I was watching them and was sort of almost waiting to be called, maybe too prideful to say I’d love to join. Someone called me and said, “We’re gonna start a sort of new business line, wanna join?” What did you do there? I started new deal categories, so home services, family-friendly deals, and then ultimately what is now Groupon’s main business, Groupon Goods, selling products. Selling products itself, which LivingSocial did. Can we talk about what happened to that business? ‘Cause it was hot, hot, hot and then both of them went under. Groupon was bigger. It required two sides to work and when it worked, that cycle was really supportive of one another. If merchants got good customers, then good merchants would do deals and customers would open those emails. When it started, I think merchants started saying, “We’re not getting good customers. We’re just giving away the store.” Then, premiere vendors didn’t wanna be in emails, and then emails ... And then also, worse, how do you make more money in that business? We had to put more and more deals in the emails and then just for the customer, it became less and less interesting. It just sort of unraveled pretty quickly. Why wasn’t that thought of before, speaking of management consultants? Yeah. It was the first time people had done this deal, although there have been deals, like those books that you carry around, those big heavy books that you had coupons in. Right. I think there were some offline versions, right, the Yellow Pages and then also there were versions of this that were ... Yelp. I mean things exist that were connecting local stores with customers and the community. There was going to be a set of solutions to come out of that. I think in some ways, I learned there’s an issue when it comes too easy and I think it came too easy and then it was just like a feeding frenzy for both companies to grow as fast as possible. We didn’t have to think enough about what happens next because it was coming so easy. Right, that you were getting deals, deals, deals and you could always have the next customer and cycle through customers. But retailers got angry pretty fast, or vendors? They did. But the growth was happening so fast that it all took place so quickly. It’s interesting because I have since formed a company that is so fundamental. We place something of value in someone’s hands and that is definitely a result. Right. Of that, okay. You did that and you stayed there till when? Because it started unraveling pretty quickly. How much money was put into it? One was Steve Case and one was Ted Leonsis, right? It was Steve. This was Steve. Steve was LivingSocial. Both Steve and Tim, backers of Framebridge, which I think is sort of the best thing we see in tech, right? I left in ‘09, or sorry, I left in 2011 and it was, yeah, it hadn’t ... The future was unclear, but it wasn’t as exciting. Right, and you thought what? You wanted to go to another internet company? Yes, and I took a product role, head of product for a taxi app. All right, which one? Taxi Magic, which then became Curb. Right. Yep. Right, right, right and that was early, that was early days. Yes, they were actually the first to have an iPhone app to hail a taxi. Thought that would be an exciting place to be certainly because industry-wise, something was gonna happen there. But by that time, I had the idea for Framebridge and it was brewing in me. Explain what it is. Explain to people what that is. Framebridge is custom picture framing, half the time, half the price of traditional framing. We do it all centrally. We send people packaging, they send us their art or they upload a photo and we print it and frame it. I think really sort of two pretty obvious theses that we’ve been able to prove out — which is one, if someone made this easier and more affordable, people would do it more often. Because framing’s expensive. Yes. And it’s local, it’s very local. It’s very local, it’s fragmented and it should be a bigger category than it is. Right. We truly believed it was constrained because of the price and the way it was delivered. There are a few chains, right? Not many. The craft chains, yeah. But really it was that younger customers should love this too. They like experiences, they create amazing content, why wouldn’t they also? They would, it’s just the way in which it was delivered wasn’t appealing to them. Then the second part, which I didn’t know how we would do, but since we have, was I’m sure if we aggregate all this demand, we can somehow deliver it in a way that is less expensive. Right. That’s really by streamlining our operations by bringing manufacturing best practices to this industry that had not been brought there before. Talk about that. Why wasn’t it? Why did you come up with it? Why was it framing that you got interested in? Personal need. I had four national parks posters, I took ‘em to a frame store, they cost $400 each to be framed and I thought $1,600 for a poster seemed crazy. And I started talking to everybody about the idea and everybody had a similar story: Delight at what they framed and sticker shock from the experience. But why this? I like to get the idea of what someone decides at the moment you decided, “Why, I think frames. Yes, frames.” Yeah, no, because it was broken. Truly, and because the first ... Every time you ask someone about what they framed, they tell you about the sticker shock and then the second question is, well tell me about it and they say, “Actually, I went to Nepal and let me tell you.” People have stuff they love. The thing they’re doing, right. You said, “Okay, this is what I’m gonna do”? This is what I’m gonna do. Oh, but the reason I did it was because I was in this taxi business and I thought here’s a problem with what, at the time, hilariously, we thought was a $15 million market size, but every smart person in the country is working on it. I thought I have an idea that I believe in so much that no one is working on. Why wouldn’t I go do that? That would worry people though, like, “Oh, nobody’s working on it.” That’s the first thing they always say, but I think that’s only because you had to have the reverence for design, some tech understanding, and some willingness to figure out the manufacturing. It was really just could you put all the pieces together? Right, and so you started off. Okay, you’re one of the few women as a CEO. Yep. This is your idea. How did you create it? What did you do? I was in my late 30s when I started it, so I joke a little bit, I did it like a woman that was totally prepared at the time I started. I was able to raise ... I raised money out of the gate and I raised money from people who knew me as a manager from other jobs. Right, so Steve Case. I was a known entity to them in that capacity. How much did you raise at that time? At that time, I raised about one and a half, it was at $3 million seed in two tranches. You were trying to find investors like a Steve Case or Tim who had worked with you at LivingSocial or elsewhere? That’s right. Who wouldn’t bother you, really. Who trusted you. You had to believe two things. You had to believe this was a category worthy of disruption — which obviously a lot of investors did not believe — and then you had to believe I could get it done. Right, so talk about that process. Again, I don’t wanna focus on you’re a woman but there aren’t many women CEOs. There just aren’t. I can count them on my hands. One hand. No, I think it’s interesting, even though this would obviously be an industry I might be interested in, I think the fact that it’s a crafty industry is a double whammy. It’s a lady industry. Totally, so I think there’s both a lack of understanding of it but also when I went out there, I think there was somewhat of a question of my ambition. Like, I wanted to build a very large business and this is how I was gonna do it, but I think paired with a mom going out and pitching a frame business, you had to know me to know that I was gonna get it done. That’s why, I mean, I pitched to everyone under the sun on both coasts but wound up with people who knew me. Talk about the difficulties of pitching, because I want people to get a sense of what that’s like. I laughed ... One day in two different cities, I got the exact same anecdote, which was I don’t understand the use case. If I’m in Aspen with my friends, I would take a picture, and I could frame it. I thought, this is amazing. I’m in two different cities in the same day and that was the only use case you could come up with. Because they go to Aspen, these douchey VCs. Yes, and there’s also a lot of, “I asked my wife and we have a decorator and we wouldn’t need it.” Mm-hmm. Oh man, I hate these guys. It’s really amazing. Then, I used to actually report back from the road and I remember my mom took an interest in this and would say, “Did you meet any women today?” Always, I’m like, “No, mom, of course not.” Of course not, yeah, it was all dudes. Although one of my original investors is from NEA Partners, a woman. Right, okay. You had to get them around the idea, one, that it’s a good idea, and two, that you could do it? Yes. You had to say, yeah, it’s a big enough category and I can get it done. Right, right. What was your biggest argument? Pitch me. That you could do it. It’s still my biggest, how many industries are left that haven’t been transformed by the internet? I found one! I found one. Then I think the wind at our backs in terms of all the content people are taking on their phone. Right, exactly. Obviously there’s all this stuff ... People want an analog version of this. Yes, and I think it’s gonna be really hard for you to convince me people won’t wanna pull things down from the cloud and live with them in their real lives. Of course they do. That’s understandable. Was there another example like it? That people had done that with? People who’d done the same ... There was a lot of framing, you pull down clouds into a digital frame. Oh, into a digital frame, yeah. That came and went. I had 17 of those. Yeah, I don’t even see it as a substitute for what we do. There really is some significance and people get an emotional reaction to ... To art or that they created. Yes. I think ... Interesting, I will give us credit for this. We had product market fit when we launched and we started selling ‘cause it made sense. That’s the other thing, this is interesting with pitching. I’ve only gotten east coast money. I really think there is something sort of fundamental, clear about what we’re doing and we have interesting stuff to say. Absolutely, we are growing the category. This is net new business. That’s cool. But it’s not, it’s too tangible. I think I really struggled with that. It was like, I get it, but what’s most interesting to a hot topic on people’s data. But what’s really interesting is you know what people value in their lives. We definitely do. We know if you got married or if you love dogs. But what’s most interesting is that we provide this service in a much smoother way and you’re gonna incorporate it in your life more. But I definitely think there are investors who want something more. I actually remember an investor saying, A) it wasn’t sexy enough. They try and do sexier stuff and B) it just seemed like a line drive. It’s just too obvious. A line drive. What a bunch of idiots. When you raised this money, talk about the ... I like when entrepreneurs talk about the challenges they face. You raise this money, you locate in Washington, right? Yes. You have everything here and it’s a little bit like ... I’m trying to think of a business, probably Stitchfix or some others. Very much centralized and then they go out. Your big problem would be marketing, correct? Getting people to use it. Every day it’s lining up supply and demand, ‘cause we actually have to, unlike other companies, we actually have to build everything we sell. Right. Yes, it’s both. We had to build it all together at the same time. I had pulled in a couple folks, sort of the best people I knew from places I had worked and the second, close the funding, hire them on. So then we started working on everything all at once. By that time we had done some of the product development of that app, but we built the website, we found a warehouse, right outside of D.C., we located ourselves in the warehouse and then we truly had to, I had originally told investors that we would outsource the framing from the beginning, because we didn’t know anything about framing, but ... Where would you have outsourced it to? Right, it was just to prove the concept. It was like our MVP would be, we just have the website, and we’d actually just work with local framers and fulfill it, and it would all be behind the scenes. Like what, like florists? Right, but that wasn’t the whole business plan. That was just to prove it, so that I didn’t scare people about what we were gonna do. I love all the casual lying that entrepreneurs have to do. No, I’m kidding. You know what I mean. No, no, no. It was an evolution. All right. Okay. Oh, nice, well said. But it happened really quickly. We did not do that with one frame. I started meeting with framers and I thought, “Wait a minute. What am I doing?” Why? I can get equipment, we can do this. Right. Why did you think that? For all of the reasons that it was possible to come in, well, one, they didn’t have any storage. If we were talking to vendors and there was another, there was someone else in the value chain, why were we doing this whole thing? It just seemed, and most importantly, we couldn’t control quality, and we couldn’t start getting faster, or smarter faster. From the very, very first frame, we launched everything together. We got used equipment. We hired some framers, and we launched our website. So, and you decided hire some framers to work for you directly? Yes. Right. And getting the actual things you need to make a frame and offer them kind of things. Yes. How difficult was that? Because you’re going against local people, right? What was the reception? Yeah, so, not good. I think, I mean from consumers, consumers got it, we have a very clear value prop. Sort of ... Oh, I get it. I’ve spent $4 million on framing. So people are, “I got it.” And then now, increasingly with social proof, people trust us, and they get it. Certainly the industry was suspicious. We came in saying — and I believe it — this is new demand and I think we’ve been able to prove that for the most part. This is people that weren’t getting framed. This is people who were not. A third of our customers had never framed something before, and 65 percent of the items, they say they would not have framed otherwise. So, you’re trying not to piss them off, you’re disrupting ... Well, that’s not what I came in to do. Right. I came in to get this to more people because I thought people would actually get stuff. What had been the problem, and why is this a disruptable industry? Most people, well, know local framers don’t actually store any inventory, so they buy from distributors when you choose off of that wall of 10,000 frame styles. Right. So, it’s expensive and takes time. Meaning? Explain that. Meaning, so, there’s a wall of 10,000 frame styles, you choose, they measure your art, then they order from a distributor the materials in little chopped up pieces to come to their store, and so that takes a couple weeks and it’s expensive, it’s heavily marked up. So we said, we’ll essentialize all this, we’ll order in high quantities, and we’ll make things ourselves. Out of the gates, we were able to offer at a lower price. Lower price, and so the premise would be that this shouldn’t cost as much, but you have less selection, right? You don’t have 10,000... We do. We have 50 frame styles, but we added some attractive ... And also the way in which the original industry worked, because products didn’t cycle through quickly, it didn’t even keep up with home décor trends. It really wasn’t ... just a lot of value the customer wasn’t getting. Which was even design advice you’d necessarily believe in. Right, right. So how many people do you have working here? 450. Wow. In Washington? No. We have about 70 people in Washington, and the rest in Lexington, Kentucky. Wow, well I wanna talk about that in a second. Yes. And then the idea is that you’re bringing it to places that, you’re doing what Amazon didn’t do, I guess. Hiring people in areas that nobody expected. Oh, yes, of course. Yes, yes, but of course. HQ2, have you heard about that? Yes, most recently, yes. Right, right, right. That’s exactly right. So how do you operate? The company, then, is done in, so most of it, probably making of it, is in Lexington? That’s right. And then everything, instead of here. So then the challenges you face is, presumably, marketing it and getting people to use it. That’s right. And getting people to use it again and again. That part we have, and that has been why we’ve been able to successfully fundraise, and sort of the wow of our business. It answers a lot of the open questions people have at the beginning, which was, I don’t get this, I do it once every 10 years when I move, and we said, no, no, no, truly, by making it better, the category will be bigger. So that’s what we’ve been able to prove out. People repeat and repeat with frequency, they give it as a gift, and we see and hear people saying they’re looking for things now. Looking for things, so, to frame? To frame. To frame. All right. So, what do you spend your days doing? You raise more money. Yup. Correct. Hiring. And really, the customer standard is really my life, is making sure that we’re delivering the best product for our customer. How do you do that? Well, I feel, a lot, I feel, just basic, almost unease in a great way that we’ve, that we’ve framed 600,000 items. We know a lot about what people should be framing. We should be using that to make a better and better and better experience. Well, that’s presumably the idea behind Amazon and everything else. Right. The data gives you that information. And why on Earth would we let ourselves lose this lead? I truly, at the end of the day, just want people to love what they framed, and I believe that grows a bigger, better business. All of the entrepreneurs I admire are obsessed with it, with the same thing, so that’s things from the product interactions and the physical product, to making sure things we’re doing to streamline in the warehouse, just make a better experience, not in any way a degraded one. And then, yeah, making sure everything we do represents who we are, and that always feels like whack-a-mole. Right, right. And you, as the leader, tell us about some of the challenges you might face, and if they’re different from being a woman or not. So, it’s interesting, I think there’s something, in some ways ... Where are you from, by the way? Cleveland. Can you tell? That’s what I thought, I’m like, yeah, I’m like, “What kind of accent?” It’s a plum, right? It’s a plum? That’s what they call it. Yeah, it is. Cleveland’s a, it was New York is the Big Apple, and Cleveland’s a plum. Uh huh, okay. So, I think, sometimes, no, I don’t think it’s harder being a leader as a ... I think being a leader ... Talk about the challenge of being a leader. Emotional intelligence, I think, is obviously critical to being a good leader. I think, generally, I think women often have a leg up there, so I think that’s fine. And I think I’ve been able to recruit some other great leaders as well. So it’s pretty good. I think being a sole founder ... There’s often two people. Yes, can be challenging just because, sort of, the weight of the world ... Right, is on you. Yes, I have a very talented COO now, takes some of that weight off, but I think, sort of the, this is why we got into this, this is why we built this, all of that is one person. I think that can be a lot. And now, yeah, I have a tremendous obligation to our employees, our investors. So, how much have you, total, raised now? 67 million. Whoa. And then where did you go the second time? So, same investors, Revolution, NEA and Swan & Legend, a couple times, and then we raised our C in the spring from T. Rowe Price. Oh, that’s interesting. Henry Elgin bought in. Yes. He would love this. Yes. He’s amazing, and he has such a fundamental view on things, like, this makes sense, you’re delivering for customers, they like you, keep doing that and I can understand how this will be successful. It was such a, as I said, east coast, it was such a refreshing perspective on our business. Well, you know, what’s interesting is a lot stuff definitely doesn’t get analog stuff. Talk to me about that a little bit, because it’s the analog part of it, it’s a thing. It’s a thing and it will always be a thing. Truly, there was, I remember a pitch meeting in which someone said, but really it could be, like, “What’s the social element to it?” I’m like, “Oh yeah. This is how people share. Blah blah blah.” They’re like, “No, no, no, but what’s the social element to it?” And I’m like, “Well, not really, because it’s in your house.” Right, it doesn’t talk to anybody. Couldn’t the frames speak to each other and then the Russians somehow get in your living room, or something like that? So there’s no social element. I know why I like you. Today, I’m so up to my fucking eyeballs in all this shit. Well, I don’t know if you wanna talk about that ... I do. ... but it’s interesting as a direct-to-consumer company, we could only exist because we could efficiently market in the early days. Right, right. And, so, the only way we could go from zero to a real company was the audience and targeting sophistication of Facebook. It’s interesting because, I’ve discussed my multiple lives, when I look back, that’s really okay if just people who might want picture frames hear about Framebridge. It’s really less okay if real debates and policy issues we should be having as a country are being inserted into specific peoples minds. Into frames. Say, “It just hangs on the wall.” Just hangs on the wall. That’s all it does. Did you see the Banksy frame? That was the most exciting, did you not see this? It was the most exciting thing on the news. No, no. Tell me. All right, explain it to me. Banksy developed a frame that shredded the art. Oh, right. Yes, of course. Yes, yes, I did. I’m sorry. Yes, yes, after it was bought at auction. But we were really excited because there’s not a lot of exciting news in our category. Right. There’s not a ... framing isn’t the place to be. No, but that really ... No, yeah. It was. Did you, are you selling that frame? No, but we should. You should. Like a shredding ... so you just keep putting art in it? Yeah, no, well, now it dangles from the bottom. I mean, that’s part of the art. Okay. I’m sorry. I’m just very literal. I like “it hangs on the wall.” It just hangs. I can see in Silicon Valley, they’d be like, “What?” No, come on. New market. We created a new market. I’m saying they’re idiots. I’m saying you’re brilliant. Thank you, thank you. I’m sorry. And it makes people happy. It truly does. It is a fundamental good product. Talk about what it’s like being a startup right now, because I think a lot of startups, it’s a very fallow period for startups. They’re aren’t any very exciting ones coming along. You had the Airbnb, Uber, Pinterest gang, but not since then. There’s been a very slow moving train. I think it’s because the big companies are dominating everything. I think that’s right, and I’m in e-commerce, so there’s just like these digitally native brands, a lot of them, and a lot of them are really cool marketers. I think that’s fun, I think it’s been fun to see that that’s a relationship with the customer that is so different from the old way. I look at those companies and admire them. Sometimes I’m jealous of those companies, because ... Such as? Like a ... Yeah, like all of the companies, you could focus really only on marketing because we have had to scale custom manufacturing. We’ve had to invent things that don’t exist. Right, right. So a lot of our time and focus has been on that less glamorous side. Right, which is how do we get the frame — you’re more like Amazon. But the defensible, the defensible side. Yeah, yeah, the moats, I call it the moats, and Amazon has moats and moats. They have data moats, they’ve got manufacturing moats, they’ve got packaging moats, customer service ... Right, so we unwrap packaging and inside it might be 10 Disney passes or it might be an old diploma on vellum, and our team has to use our software to make a series of decisions on how that should be framed, and then the rest of the factory has to be powered like a real factory. So, that’s not easy. No, no, it’s an actual manufacturing, it’s another analog problem. And then you also have to go through customer service to get it back and forth. How do you look, who do you look up for then? It’s gotta be Amazon, right? Oh, sure. We have team members who’ve been at Amazon who are terrific, and have learned a tremendous amount of ... There’s so much that we admire there. I think for us, though, we have to look at, in an Amazon world, why do you exist? Yes, I was gonna get to that next. Deep knowledge of our category. Right. Could they do it eventually if they wanted to? They can do anything they wanted to. Right, yeah. They just did microwaves, I don’t think they’re gonna get to you yet. No, they’re not gonna get to us. You’re down on, you’re number 212 on that list of killing off retail. We’re in a category that doesn’t have a beloved brand and deserves one because we touch stuff you love, and there’s a trust and design element. Right. So, all of that means we can compete, and we can build something that people believe in and incorporate it into their lives. I think, really for us, it’s being very disciplined, about being very dedicated to this category. I don’t think they’re coming for you. I don’t think so. They’re coming to Washington though, as you said. Halfway, half of them. Yes. I understand that, but I don’t think they’re coming, I can’t see them up in Seattle where they’re real headquarters is, not HQ2, I can’t imagine them thinking it’s a big enough category for them. You know what I mean? No, it was a hidden gem. And it’s too hard and it’s too, it’s big, but it’s not big enough. So, therefore, microwaves. Oh, I see microwaves, I see furniture, I see anything else, but that’s ... It’s also interesting because they haven’t done a lot that requires design and service. Service. Yeah, I mean, they’re doing it in the studios, but it’s a little bit of a disaster over there, but, you know what I mean. It’s a much more difficult business, and certainly doesn’t make a lot of money, and so they ... The cloud and their packing up of consumer goods is relatively easy. Their focus on the customer though, amazing. Talk about the move towards analog, because I think that’s a big area. It doesn’t matter if it’s in e-commerce, these, I guess Uber is an analog business in a lot of ways. Yeah, that’s true. But Uber, Lyft or others, talk about that concept, because I think so much more of the next year has to do with analog, whether it’s salads, or things ... I love those guys. I think that .. The Sweetgreens guys, I just was with them, yeah, they have a beautiful headquarters. They talk about salads, I know, they talk about salad like it’s the second coming or something. But, you know what? It is. Okay. Well, they have the best ones. Yup, that’s true. I have to say, I went to eat there afterwards, and I tried to sneak in, they ended up buying my lunch for me, but it was delicious. I was like, “This is a delicious freaking salad, Steve Case,” yeah, whatever it was, I don’t remember. I think, customers intracity using technology to make people’s lives easier, I think, obviously, I think the analog stuff is all about ease, right, in our busy lives. We keep crowding our lives with more, but certainly, even Framebridge came because I wanted nice things but didn’t have the time to figure them out on my own, in addition to not being able to afford it. I think that’s what everything will be now. I think there’s also, the beauty of the analog is, it’s a market that exists. Right. Sure, we’re saying it’s new demand, but it’s still, it’s something you can believe versus a solution in search of a problem. Meaning? Explain that. Well, I think some technology businesses like, there really isn’t, it might not have needed to have existed. Right, right. And to fix it and stuff like that. So, when you think about that, you said you found this gem to disrupt, how many more are left? Oh, yeah, I don’t, some are really hard, people keep mentioning things. Like? Well, you were talking to Elon about construction, I thought, “Oh, that’s really interesting.” Right, yes, I’m correct. Yes, that I think you are, and I was thinking about what we do in terms of custom manufacturing, and I think there’s a lot more there. Yes. Construction has to change. It’s insane how slow it is. How artisanal it is. The guy comes to your house and puts in drywall. Right. It makes no sense. That wall could have been made somewhere else. Also, all of the information asymmetry. I think any time the customer doesn’t know what they’re getting and doesn’t know who to trust. Yes. You should look into that. I renovated several houses, I stay there and stare at them, because I learned it all, but I was fascinated by it. They were like, “You can’t customize it.” I’m like, “But could you customize it?” Sure you could. You could make that drywall to a specification. Why does it have to be made by one guy who they hire? You know what I mean? And it’s always a guy, but why can’t they be pre-wired and brought in? Well, I think there are a lot of industries where making things seem harder than they are is part of the whole deal. Yes. I see why they’re doing it that way, although I don’t think thinking beyond it. Construction is one of them, 100 percent, the way we build houses has gotta change. It’s ridiculous. So what areas do you move into, or is it just a big enough business to do it? Right now it’s a big enough business. We have tons more opportunity, and people, as I said, are framing a lot more often, a lot more people to reach here and internationally. Do you have any international business then? We don’t today. So we have a lot of opportunity. Yeah, and truly I sort of won’t be constrained by today’s market size. I really think that was just very powerful. What is that size? It’s like 45 billion in the U.S. but that’s all the offline stuff, and of course half of our business is digital, and it’s new, truly, people are framing everything, it’s like company mission statements ... What’s the weirdest thing? Company marathon bib, a ponytail, umbilical cord. A pretzel. What? Really? What do you do when they get there? You wear gloves. Okay, I’m still back at ponytail. Okay, all right, so did they tell you? Did they warn you of a ponytail? They did. Customer service knew. Knew it was coming? Yeah, for the ponytail they knew. Yep. Wow, the umbilical cord now. Yeah. Whoa. I’m trying to like that, but I can’t. Right. That one maybe, but you can like the little baby hats from the hospital, c’mon, or the bracelet. Okay. That’s good stuff. I have them in a box. I have that in a box. I do not have the umbilical cord in a box. Well. Think about it. I get excited about the potential market for the business when two things happen: Either I see something that has just so much emotional depth behind it, and people share these stories with us. So someone sent us a charcoal painting, a drawing, and she said “My neighbor drew this of me to build me up after our hard divorce.” I was like, that is really nice, and whoa, and so when we realize we’re dealing with things that matter to people, and have such significance, I realize there’s a big business here, and a meaningful one. I think when we realize we’re part of anything happening in the culture, so we saw last Super Bowl, one of our product managers was pulling the feed of what people were framing, and all of a sudden it’s Eagles fans, right? Right. And you realize you’re in a stadium, and you’re celebrating something, and you’re thinking about commemorating that. Right. That’s so different for this category that would have been like, 10 years later. “I should have done something about, remember that time we went to the Super Bowl?” And I don’t think it’s deluding ourselves to think that what we’re doing is helping people remember good stuff in their life. Right. Before they forget about it. Right. So you’re doing something that’s analog. Do you see a market in these virtual frames? They came and went. Why? Tell me. No, and well sure I do as a substitute. I guess I just said it wasn’t, but yeah sure. It’s something you put on your wall. I don’t worry about the lack of wall space as an issue. It’s ephemeral. The whole point is pulling something down to store. Actually, there’s an NYU professor who’s done some research on the difference in the photos you post versus the photos you print. Oh. And of course they’re a total different set of photos. So what are they? Tell me. Well, things you deeply value versus your made-up phony life. Oh you know I could go on about Instagram, the performative nature of Instagram. Recently, I stopped using Instagram, because I think I hate it. I love Kevin Systrom, who founded it, but I just hate it, because it’s so not true. It’s true, but not true. It’s interesting, because it’s only visual. Yeah. Everybody’s really happy, and I know a lot of happy people, but not that many happy people, who will have moments of happiness and moments of sadness, and so one day I put all really negative pictures on Instagram and it really freaked people out. “Here’s a bag of urine I found on the street of San Francisco,” which is very common, and I just kept taking pictures of bags of urine and bottles of urine. I have to tell you, Instagram is a platform. I’m gonna send that to frame it for you. Well, it wouldn’t be the weirdest thing. Oh, c’mon. No it wouldn’t. If I sent you a bag of urine? Please frame it. Oh I thought it was a photo of a bag of urine, in which case it wouldn’t be the weirdest thing. No. Maybe the bag of urine, yes. Okay, all right, I’m not gonna do that to you, but in any case. But I’m gonna look at the terms of service. All right. Instagram is a platform for us though, as an advertising platform, very good, not only obviously when all the right people are there, but ... People take those pictures. Yes, and also it polices itself in terms of visual beauty wins, like good content actually wins. Yes it does. That’s true. Fair point. So that’s good for you. So that’s good for us. Yeah, I just think it’s killing the human race, that’s all. It’s so funny, I have such a weird relationship with it, but it is owned by Facebook, by the way. Well actually, our creative director is very worried. She thinks, “Oh my gosh, everyone’s home will look the same.” My gosh, just like everyone’s wearing the same outfit or styling their hair the same way. How quickly, but then we can move on, but still, there’s something unoriginal. Yeah, it has all kinds of implications all over the place. In any case, but do people use Instagram and then print them out from there? You can connect from your feed, yep. Yeah, but do people do a lot of that? Yeah, they do. But it’s from their phone. So phones are everything to you, correct? Phones are everything to us, and the cameras keep getting better and better, which means you can blow up the pictures bigger. All right, so I have a couple more questions. As a startup, I really am interested in this idea of being a startup right now. Now you’re on the East Coast, which I think is very different in this idea, of Silicon Valley finding talent outside of Silicon Valley, and Steve is obviously a huge proponent of it. Yes. And you just gave a comment about the Amazon headquarters. Yep. Essentially, he’s being polite saying, “Why the hell didn’t you put it in Kentucky?” Talk about operating there, and operating here on the East Coast. Yeah. There are goods and bads, and I really do admire Steve’s rise of the rest, but there are challenges, and I think as you scale you get into those challenges. Such as? We have, believe it or not, well you know this, D.C. is a very small pond. Yes it is. We can hire people we wanna hire. If we seek out someone we can get them. We’re the exciting thing happening, but there are some marketing, some engineering, some product design jobs where everyone’s in New York. Right, which you need for your thing. For design. Or obviously, for us. New York and LA ... So what does that mean from your perspective? Yeah, well, D.C. is a funny market. It’s not like the middle of the country, because people do have to come here for certain jobs, and so we always pick up talent. Someone attached to a partner who’s at the World Bank or something like that. Right, yeah. People cycle in and out, and people have reasons for being here, and it’s a nice place to live so it’s fine, but yeah, I remember actually pitching someone out west and they said, “Yay, Susan’s back from Chicago,” and I was like, “Oh, Chicago,” Washington, it’s just off the grid for that sort of thing. I think we, for our production, we chose Kentucky for a lot of reasons. Explain that. The truthful answer is we found a terrific leader there who had stood up the Zappos facility there. Ah. Tony Hsieh. Yeah, and so that’s really why we’re there. It’s also fast shipping to most of the country, and a lot of people available. Who can do this job. Yep. That you can train to do this job. Yep. Which is to frame things. Yep. Wow. Why don’t you take a bow in terms of locating there. You couldn’t have located it elsewhere, right, in this country? You had to pick. No. You had to pick a place. Where it’s inexpensive. Where it’s inexpensive. I believe the rent per square foot of our facility there is a tenth of what it is in D.C. Right. So you couldn’t make it here. No. You couldn’t do that here, and you didn’t think of outsourcing it elsewhere in India? No. Turnaround time, people send us their stuff, you’re sending me your Kevin Durant signed jersey ... So if you operated in India, you might have one there? Right. Right, so it has to be closer. Yeah, but we’ve done sufficient innovation, and we’re doing even more robotics, certainly all powered by our software, so we will be able to open new facilities that are smarter facilities. Talk about the robotics. Yeah, so a couple of things, we use robotics to track your art through the building, which is great. So we know where everything is, because obviously keeping them safe is our job. Can’t lose that umbilical cord. Right. You really can’t get that back. It’s hard to replace. That is like a plot of a Lucy show. “Where’s the umbilical cord?” Can’t you see that? That is hard. That would be an entire plot of “Modern Family.” Go ahead. Yes. Well, in early days ... By the way, speaking of Lucy, I thought a lot about the chocolate on the conveyor belt, that’s what Framebridge felt like in the early days. Yeah, that’s the See’s Factory in San Francisco, did you know that? That’s where they did it. Oh really? That’s awesome. I learned this from Sue Decker, and I think Warren Buffett. It was on — Anyway, go ahead. Also, some simple tasks in the framing process, we have been able to automate. I think what’s important there is, I certainly am inspired by the businesses that are able to figure out what need to be humans and what can be done robotically, and certainly there are aspects of the design process judgment that requires well-trained human people. People. And crafts people. Not for long, Susan. Well, we’ll see. I’m kidding. It’s a really hard thing, actually, not to have human intervention. It has a scalability problem. At this point, although I’ve just been visiting some Amazon warehouses, and also you could see that they could automate quite a bit more of it, so you can see them do it slowly, but there were certain places people needed to be. There were lots of people in the warehouse. Yep. So last thing I wanna talk about, being in Washington and having Amazon come here, what do you think of that? Yeah. Are they gonna steal all of your employees? Right. I keep saying it’s great. Uh-oh. Yeah. There’s only four employees, and they’re gonna take them all from me, and they will. I mean, yeah, there’s a little bit of that. No, I do think the more vibrant this community is in Washington is good, it’s fine. I think it’ll be fine. I love how you’re pretending. “This ain’t good for me. They’re coming in with their fancy pants Amazonian kinda thing.” Yeah, but ... Yeah, but talk about that, because Washington was with Steve and others. Yeah. It was a hub, then it wasn’t. I am the beneficiary. Framebridge only exists because Steve started AOL here, absolutely. Right, but then it flamed out. I remember going to pick the headquarters out, at the time his manager, Jean Case, she was doing all the comms for them and stuff like that, and we went and looked at the headquarters. I mean it popularized the internet. Yes. We all use this thing. You know what I mean? I do think there is, maybe you have to feel this way when you’re in the middle of a journey, but it existed for a reason, and I remember actually talking to Tim about LivingSocial. I only exist because of LivingSocial. A lot of people got married and had babies because they met there. A lot of people learned valuable skills. There is something about — It’s gonna be a flywheel now that Amazon’s here, but how do you create that? By supporting other people. It’s not Silicon Valley. It tends to burn out I’ve noticed in most of these cities. Yeah. Austin had a big thing, and then it didn’t. That’s interesting. LA had a big thing, and then it didn’t. Well, Seattle does. Well I guess funding, right? People had to have made enough money that they can support other entrepreneurs. Right. That’s the only way it can keep going. Exactly. I have make enough money that I can support other entrepreneurs. Is that the plan, to go public? Yeah, sure. The plan is to build a fundamentally good business that provides value to people. Could someone buy you? Yeah. Potentially. Some retail, anyone who wants to own photo, which is everybody, but yeah we think there’s a big enough opportunity here. It’s a real enough business, and we’re certainly ambitious enough about it. All right. The last thing I always ask entrepreneurs, what mistakes did you make that you were like “Ugh, that was a stupid thing.” What did you learn? Oh my gosh, we made so many. You, yourself. What was yorur biggest mistake? Truly, if I thought about them too much, I wouldn’t be able to get up the next day. Yeah, I had a real backlog situation when we first started manufacturing, and so the mistake was thinking that the original team could all be people from my network, or people I understood or knew, and it was like the business has a large manufacturing component. We needed to hire people who knew what they were doing. There may have been a little bit of hubris in the beginning on that. But you could deal with that so far? Yeah. And what’s the best thing you did? Started the company. No, but truly, despite everyone saying, “I don’t get it.” I believed in it enough to will it into fruition. Right. A lot of people said that to you? Oh everybody. When I started podcasts, I was like, “I don’t care what you think.” So the generous interpretation is that people are trying to prevent you from failing, which I do think that’s something people do to females more often. Yes. I do think there’s a, “I’m gonna protect you from the eventual embarrassment.” Yeah, you’re right. That’s true. I just think people just yammer on. They’re risk free. That’s true. I always say I didn’t have chicken pox as a kid, and everyone would tell me how serious that was, and then they invented a vaccine. Well, you’re lucky on that one. But you believe in the future. I suppose. Anyway, Susan, it was great talking to you. Thanks for coming on the show. On that note. On that note, thank you for listening, everybody.

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posted 4 days ago on re/code
Should Mark Zuckerberg fire himself? And other tough questions. On a recent episode of Recode Decode, Y Combinator president Sam Altman joined Recode’s Kara Swisher at the San Francisco bar Manny’s for a live discussion about the state of tech. Their conversation, moderated by the bar’s owner Manny Yekutiel, touched on the diversity of Silicon Valley’s employees, the future of artificial intelligence, whether Facebook CEO Mark Zuckerberg should fire himself and much more. You can listen to Recode Decode wherever you get your podcasts, including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts and Overcast. Below, we’ve shared a lightly edited full transcript of Kara’s conversation with Manny and Sam. Manny Yekutiel: Tonight’s conversation is Technology and Politics: How the Fuck Did We Get Here? But I left the F-word out of the EventBrite title. Kara Swisher: Okay, all right. Manny Yekutiel: So how it’s gonna go is we’re gonna talk for about 45 minutes. We’re just gonna kibbitz here; that’s Yiddish for just kinda like ... I know what that is, thank you. I grew up in Roslyn Harbor, Long Island. I’m good. Manny Yekutiel: Okay, good. I want to hear the Long Island accent come up. I’m a shaineh madela. Manny Yekutiel: Oh, you are a shaineh madela. See, there you go. Anyway, move along. Manny Yekutiel: Sam’s jealous. Move along! Manny Yekutiel: Okay, so then 45 minutes of us kibbitzing and then 45 minutes of you guys. I have an Oprah mic down here that I’m gonna hand to you guys for Q&A. So we’re just gonna chat for 45, you guys for 45, and then you guys can keep drinking, all right? So let’s begin. Cool. Manny Yekutiel: So we’re gonna kinda move chronologically a little bit here, and I want you guys ... For those in the audience that haven’t been to conversations with you already and haven’t met you, talk a little bit about the utopia that the early technologists were thinking about when they thought about how technology and the World Wide Web would interact with politics. What did people think was gonna happen with the intersection of tech and politics? I mean, I can start. I think they didn’t think at all; I think you think that they thought and they know what they were doing, and I think a lot of things get written after people become billionaires or after they become successful. But having been there at the very beginning ... I actually lived in Washington, I worked for the Washington Post when the internet was actually born. Not when it was born, because it was there before as a government entity, but when it was commercialized for the first time; was when they released it and there was legislation, which I covered, and actually Al Gore ... That’s how I met Al Gore because he was a principal senator behind it; he did, in fact, invent the internet, and he was integral to that. And so you imagine that people had great thoughtfulness towards what was gonna happen or the implications, and they absolutely did not. And I think that’s a lie that is now being borne out today, is that you think that Mark Zuckerberg, for example, to name someone who’s plunging toward disaster right now, had an idea of what was gonna happen. I don’t think they had any idea whatsoever, and in fact designed these systems in a way that if you had an idea of what was gonna happen or any kind of anticipation, you might’ve made other choices in the way they were built. Sam Altman: I don’t think people knew what was gonna happen because it’s sort of ... It’s unimaginable what has happened. Fourteen years ago, Facebook was a website that no one took seriously in Mark Zuckerberg’s dorm room. You know, 14 years ago, the first prototype of the iPhone, I don’t think, had been made. The speed and the size and the impact that has happened, I think that we’ve just lived through one of the three great technological revolutions in human history, and the rate of change of technology is so much faster than the rate of change of people; certainly of evolution, but even how quickly we can update our own thought processes. I think I agree that people didn’t think about what was gonna happen, but it was not out of any malice; it was just like it’s hard to have ... I remember what it was like at the beginning of that. It’s hard to imagine that it got this big, that it went this well. Well, so you’re saying they didn’t have malice. I mean, that’s a pretty low bar; it’s like they weren’t assholes. That shouldn’t be the bar. It’s just that thoughtlessness can just have the same amount of damage. Sam Altman: Oh, for sure. ... that lack of ... And my issue with a lot of is, as it began to develop, they pretended that they didn’t have the power and money they were collecting. And so the thoughtlessness continued, and continues today, with the people who run ... Sam Altman: So I certainly think what has gone wrong is when it became clear this was going to be as big as it has become, people didn’t stop and say, “Okay, what do we do now?” But at the beginning, when people were just sort of imagining what the internet was gonna be like and what mobile was gonna do, I don’t think anyone could have really predicted this. That would be very hard. Manny Yekutiel: But wasn’t ... I remember when I first moved here, I went to Noisebridge and there were all these kind of anarco-hackers that were talking about how, you know, afterwards we’re not gonna have governments, we’re not gonna ... That tech is gonna kinda free everyone and break our chains. And wasn’t there this kind of undercurrent of folks who thought of technology as a way to break down the systems of power? Well, unusual because it was all white men, who are really the most under-siege people on the planet. So no. I’m gonna say no for that one. I do think that ... Manny Yekutiel: That’s a hard no from Kara Swisher. It’s a hard no. You know, it’s interesting when I think back because I came here in 19 ... I’d written a book about AOL, which was the first commercialized, really ... Manny Yekutiel: I remember chat rooms. Chat rooms and things like that. And I came here because I was hired to the Wall Street Journal to cover the ... It wasn’t even called the internet; it was online services. And I was the first reporter to cover the internet for them. And when I got ... I’ve told this story before. When I got the job, a lot of the media reporters said, “Oh, you’re here to cover CB radio,” and I was like, “No, I’m here to cover the medium that’s gonna decimate all your industries. Nice to meet you.” And they were like ... Manny Yekutiel: So you haven’t changed one bit. No, not a bit. No. But it was really interesting because you got a sort of front row seat to ... I mean, I remember going ... By the way, Google didn’t even exist for a long ... Oh my goodness. Didn’t even exist for a long time from when I was here, but it was Marc Andreessen when he was ... he might’ve been a teenager when I met him; I think he was 19 or something. You know, early at Yahoo when they were five or six people. Bezos I met when he had five people. Like it was really early. Early, early, early on. Manny Yekutiel: Okay, so let’s take a giant leap forward to closer to today, and part of the reason why I wanted to do this conversation with you guys as it relates to civic engagement is I think we’re living in a time where people have a lot of anger, tension, anxiety around the intersection with how technology has affected our politics, specifically after this 2016 election. So one of the first questions I wanted to ask is do you think people would be feeling this way if Hillary Clinton had won? Sam Altman: I mean, yes, but they’d be different people. Fifty percent of the country would be feeling this way, but a different 50 percent. Manny Yekutiel: Even with the whole like, you know, if Russia had tried to ... Because part of it was this feeling that the Russians co-opted our technology in order to make it so that Donald Trump would win, right? So there’s this feeling of this tool that was supposed to help us fucking everything up. And do you ... If Donald Trump had won even given that ... Sorry, if Hillary Clinton had won given that, do you really think that there’d be this much angst and anxiety? Sam Altman: I personally do. I mean, I think there are other people on the other side who would say, well, there were these other powerful things that were trying to help Hillary win. I think the story would get told either way, and I think there were probably a lot of people on both sides trying to use the platforms to influence. You know, I remember it was only two election cycles ago when candidates were saying, “Well, do I have to think about digital at all? Like, I just do it by TV ads, right?” So the speed with which technology has changed politics and the degree to which I think most candidates still don’t understand that is huge, and I think that a lot of people wish that hadn’t happened or that change hadn’t happened so quickly in politics. But I always believe people when they say they’re angry. I think that is always true, but it’s very hard to articulate the precise reason you’re angry, and I think you see a lot of that in the way people talk about technology in the 2016 election. Something clearly has changed in what I would say is a bad way, at least it’s a very different way, but it’s hard to precisely articulate what that is and what we want to do about it. There’s two parts. First of all, look, Donald Trump is very good at the internet, and Brad Parscale, even though he’s a loathsome creature, is also ... Manny Yekutiel: Who’s that? He’s the campaign manager for Trump and he was the digital director, and he’s the one that really did understand how to use and target people in really ... Some nefarious ways, some very effective ways, appeal to fear and anger. Target people online and use these services the way that you would sell cookies or a movie or something like that. Really did understand it. And I think the Clinton campaign was still operating in an old style, a digital style, and so was the Democratic Party. And one of the things that’s always been really striking because the original people, if you ... A couple cycles ago it was Howard Dean and Joe what’s-his-name. Oh, that guy, Trippy, right. We had him at one of our AllThingsD [conferences] one year. He had done some of the early digital stuff for Howard Dean, which was effective initially, but the problem was not everybody had a cellphone, not everybody was online, and things like that. And one of the people we actually interviewed way back then was Ralph Reid. Because one of the things that’s interesting if you think about it is, for much of the 20th century, most of the media outlets were liberal; were liberal or left-center, center-left, centrist, but certainly not conservative. And even though they say we’re fair, they just weren’t. They were liberal, essentially. And the right-wing did not have a place to talk until online, and so they got very good at it very early because they were the out-of-power people. And so they moved to cable, like with Fox News, and it’s hard to think of now, but cable was an outlying medium back then. And the same thing with the internet; they used the internet really well and they learned how to use and communicate on it really well, and then they learned how to use it in a more nefarious way. Manny Yekutiel: Do you think we’ve moved too fast? I mean Sam, you’ve said twice here that no one could’ve imagined how much it would change in 15 years. Do you feel like we developed too quickly and society’s just not catching up and we should’ve gone slower? Is that even possible? Sam Altman: Well, what I was gonna say is I would love it if that were possible. But in like the world we have, the fastest-moving company tends to win; the company that gets to the most scale the fastest and proves the fastest, makes the best products, tends to win, and that’s mostly good. But it has some important negative consequences, and I think we’re all now wrestling with what to do about that. But I think it’s very hard to stop progress; that probably won’t work. And I think what we can do, and what I think we need to figure out how to do now, is how do we as a society adapt more quickly when the world can change so fast? I think it’s better to try to get faster at society correcting than trying to slow down technological progress, and we so far have been very bad at that. Manny Yekutiel: So we’re ... It’s interesting because the way you’re talking about it is if we don’t have control over it, right? That these people have done it, we have done this. We haven’t done this. Certain people have done this, and they run these companies. And so what’s really interesting about Silicon Valley that I’ve covered is when there’s successes, we sort of celebrate a lot of these people like they’re geniuses. I always say ... They always tell me ... They spend all day telling me how smart they are, like continually. Not you, Sam. You’re lovely. Sam Altman: Thank you. Again, low bar. But they ... Sam Altman: I’ll still take it. Good. Take it, take it. Run, run, run right out the door. Manny Yekutiel: She pays you a compliment, you take that compliment. You run right down Valencia; you keep going till you get to Palo Alto. So they spend a lot of time telling you how smart they are, and then when things go wrong, they move into the “we.” Like if you’ve noticed that with Zuckerberg ... Have you noticed that? Like “Well, I want to ... The community wants to work together to fix this problem.” And I was in an interview with him; I go, “Well, you own the community,” and he’s like, “Yes, but I think the community should all decide.” And I go, “But you have 60 percent of the company and you control it. You’re the CEO, the chairman and the founder, and you have unprecedented power over this giant organization of which you have no ability to run.” And yet the people should work together. And I was like, “Well when do the people get power?” It just goes ... It’s hysterical to watch. Sam Altman: I have a question for you: Do you think Mark Zuckerberg should be the one who decides who gets to use Facebook and who doesn’t, and who gets to say stuff and who doesn’t, and what you can say and what you can’t? Yes. I think he built the company, and yes, he should. This is his product. Sam Altman: And does that future not ... He’s not a government. He’s not a government, and this is the lie that Silicon Valley tells you. This is a for-profit company of which Mark Zuckerberg is now a $64 billionaire. Sam Altman: For sure, but ... So he took the money. Sam Altman: ... in some sense he’s bigger than a government, and we ... Yes, of course he is, and that’s what’s terrifying. Sam Altman: And yet he’s unfireable. He’s unfireable. That’s what I said. Unkillable, unfireable. I think I called him a mix between ... In the Times column last week, I called him a mix between ... If you mix Wolverine and Deadpool together and added in, you know, a zombie or two. Sam Altman: I think all ... I don’t agree with that, just to say it clearly. Manny Yekutiel: I’m just gonna let this ... Wait, hold this for a second. I’m a little warm right now. I’ve gotta change brands, hold up. Manny Yekutiel: We’ve got a moment. I’m gonna wait for this. I feel like ... I don’t know what’s happening here. I gotta be careful you don’t get a boob shot. You got it? Manny Yekutiel: Yeah, I got it. Okay, all right. Manny Yekutiel: All right. Some people call it changing hats, you call it changing T-shirts. Changing brands. Sam Altman: So look, I certainly would like to see different rules for what you’re allowed to say and not say on the internet, but it scares me to think that a small handful of people that are not accountable to us and not elected by us and can do whatever they want get to make the decisions about who gets to exist online and who doesn’t. So I would welcome regulations for who gets a megaphone, who gets a platform, what you’re allowed to say and not say. But it’s surprising to me to hear people that are traditionally very far on the left in the technology industry saying, “We want the companies to make these rules,” not, “We want a government that we get to elect to make these rules.” Look, the broadcast networks have been doing it forever, so I don’t know ... Would you have a problem when the New York Times did it? It was like 12 white guys on the Upper West Side of New York would decide what was on the front page of the New York Times every day for decades. Sam Altman: Actually I think that was bad too. Yes, exactly. I’m saying the broadcast networks were the same; this is not different. What’s different is the size, and the unprecedented size and influence and impact, and the amplification of the situation. But it’s not un-similar to the person who ran CBS and NBC and ABC when there were only three networks. Sam Altman: To be clear, I feel equally bad about three people deciding ... Like I don’t think that was a good world either when we had, you know, the three heads of those networks deciding what people got to hear. I think that’s ... That’s always been the world, and I think what’s ... Sam Altman: But that doesn’t mean we shouldn’t shoot for something better. Right. The only ... Except what? Because this is what always coalesces, is power in the hands of a certain small group of people who are typically the same people, and then the discussion turns to, say, right now for example, the discussions around tribalism, like how there’s so much tribalism. The issue isn’t tribalism, the issue is the system sucks for most people. And so what ... Let me just finish. What happens is, for example on these platforms, is the people building them have never felt unsafe in their life for one second. And so what happens is ... Like I was with someone from Twitter and they had suddenly gotten attacked online for something; they’d suddenly gotten strafed, like the ... And they said, “This is really hard,” and I go, “Welcome to the rest of the world for women, people of color, gays and the rest of us.” They get this all the time, and it depends on what group it is. And so what happens is the ... The problem is the diversity at the top is lacking. If there was a more diverse top, you would get a very different outcome here. Sam Altman: So I think that ... I’m all for the different outcome and I’m all for sort of way more investment to fix the problem of harassment and discrimination online. I think that’s become a huge problem. For all that tech has done wrong, I do think one thing that’s really great is that those people who have been denied a voice, who have not been the three white guys in charge of the network, finally have a voice and we’re seeing huge social change come from that. And honestly, for all of the hugely negative things that have gone wrong and for all of the ways we haven’t yet figured out how to adapt to this, which are huge, the fact that everyone in the world now has access to a platform and a voice. We’ve seen incredibly positive change in a short period of time. Manny Yekutiel: Right. Think about Black Lives Matter, think about the Dakota pipeline, think about police brutality. Sam Altman: So that’s great. But they don’t have a voice because they don’t own it just because the ... See, this is the lie ... Sam Altman: But it’s catalyzing action. It sort of is, but it’s owned by the same people. I mean, we just did a piece on Recode where we just ... A couple years ago, I did a piece called “The Men and No Women of Facebook,” and I just put up their pictures. And it was like white guy, white guy, white guy, Asian guy, Indian guy, white guy. Like that was the whole thing. And at the time, either Mark or someone called and said, “That’s really unfair,” and I said, “You hired them. I didn’t. I’m just putting up their pictures for people to see.” But recently, we did another one when they did a reorg of Facebook ... I don’t mean to pick on Facebook particularly because every tech company’s like this. We put all the pictures and I think we said there’s more people named Jim here than there are women. Like it was something like that, and then we like ... And as for people of color, well, Kevin Systrom’s picture is in black and white. That’s the only difference. Like it was ridiculous; it was insanity that they have ... If you look at these management structures, the real ... Black Lives Matters can talk, but they don’t run Facebook. These different groups can do things, but they don’t own Google. Sam Altman: So hypothetical then: If tonight something changed and the people that ran these companies represented the actual public that are speaking out and being given a voice, what do you think would change in our politics? It would be a much better internet, I can tell you that. I think it would be a quantumly better internet if there’s more voices at the table. How to change politics? Sam Altman: I’m not arguing against the need for greater diversity in leadership. It seems to me that the echo chamber that civic discourse online is dirty, it’s difficult, it’s ad hominem, it’s not particularly productive, and my question is how does a more diverse top raise the level of discourse? Because politics is about power. I don’t know if you ... I mean, that’s what I think it’s about; politics is about power, and who has it and who doesn’t have it, and who’s allowed to wield it and do things. And these jobs have very real-world implications, and so the people that are in power ... Oh, who’s yelling? That’s nice. The people that are in power matter and the people that are empowered matter, and that includes the ownership of these companies and also who’s running them. I think better ... I mean, look at Y Combinator; you’re making enormous efforts to try to diversify the pool, correct? Sam Altman: Certainly, and diversifying our partnership has absolutely reflected in a more diverse set of founders. So I believe this works, I really do. I do think it’s somewhat separate from ... It’s not the only way to make these platforms work better. I mean, government regulation about how we handle discourse, and online harassment, and what you’re allowed to say and not say, I think is another way to do it. And I personally will always be more comfortable with that than a small group of people, no matter what they look like, that are in absolute power forever and unfireable making these decisions. Manny Yekutiel: So let’s talk about power for a second. Another reason why I wanted to bring the two of you together is we’re all friends and both of you independently came to me and said, you know, “I’m thinking about running for political office,” separate from each other. I think you were ... Can I say? You were considering maybe running for ... Lightly, okay. We talked about it, about running for governor of California, and you and I talked about running for mayor of San Francisco. And I was like, “Awesome, let’s ... How can I help or what would you like to talk about?” So tell me a little bit about why you were thinking about running for office and why you chose not to. Sam Altman: I was thinking about it because I think the state is in a very bad place, particularly when it comes to the cost of living and specifically the cost of housing. And if that doesn’t get fixed, I think the state is going to devolve into a very unpleasant place. Like one thing that I have really come to believe is that you cannot have social justice without economic justice, and economic justice in California feels unattainable. And I think it would take someone with no loyalties to sort of very powerful interest groups. I would not be indebted to other groups, and so maybe I could try a couple of variable things, just on this issue. So you’re like Bloomberg without an obsession with Coca-Cola, right? Sam Altman: I don’t know he has an obsession with Coca-Cola. Hello, Big Gulp? Sam Altman: The reason I didn’t, or the reasons I didn’t ... Manny Yekutiel: This talk brought to you by Coca-Cola. Sam Altman: I don’t think I’d have enough experience to do it, because maybe I could do like a few things that would be really good, but I wouldn’t know how to deal with the thousands of things that also just needed to happen. And more importantly than that to me personally, I wanted to spend my time trying to make sure we get artificial intelligence built in a really good way, which I think is like, to me personally, the most important problem in the world and not something I was willing to set aside to run for office. Manny Yekutiel: What about you, Kara? I just wanted unmitigated power to screw people. Sam Altman: I love the honesty. Yeah, it’s true. I’d have like limousines idling in front of my house, things like that. And then I would want to get like thrown out of office in a really dramatic fashion; “Fuck you, I’ll get you back!” That’s what I wanted. That’s why. Manny Yekutiel: So why didn’t you do it? I don’t know, it’s just next. You know, it’s like in Valley of the Dolls, I’d be like Neely O’Hara; like “All of you fuckers.” So no, I wanted ... Because I was complaining too much and I thought, “This is ridiculous. I shouldn’t complain, I should do something.” It was very simple. And you know, after the Trump election, I thought if this idiot can get elected, I could get elected. Really, like it was things ... The brakes were off for people; something had changed with him. If I can pay him a small compliment, that’s the smallest I’ll give him, is that the brakes were off for people that could ... The way politics ... He’s unhinged everything, which is not necessarily a bad thing. He happens to be a bad thing, but that ... Sam Altman: But that’s a good thing, I think. Yes, I do too. I do too. Manny Yekutiel: Yeah, we saw in this recent election all these people that never would’ve run beforehand. You know, I built this space; because of it, there’s millions of people that are changing the way they think about their interaction with the body politic because of that election. Yeah. So I thought that that was ... I think it was a similar thing. And now, of course, now that fantastic squad of ladies that’s run by Alexandria Ocasio-Cortez ... She’s the head of it, it looks like, and they’ve got a squad of them. I want to join that squad now, so I have to run for Congress. Like I figured they’ll let the old white lady in; like, “Let her in. Let’s have her for humor.” But I thought about that. I thought about, you know, that this is a city, I’ve lived here for 20 ... A long time, and that it was important to instead of just complain about things, to do something about it. Now we have a new mayor, so no one thought that the former mayor would die like that, and they’ve got ... You should give this mayor a chance. I think it’s really important not just to be difficult to run. Manny Yekutiel: So we’re gonna ask like one or two more questions and then we’re gonna open up to open Q&A. We’re gonna take a quick break now. We’ll be back to this live interview with Y Combinator President Sam Altman after this. [ad] Manny Yekutiel: Okay, here’s what’s gonna happen: I’m gonna ask you guys each individual questions and then I’m gonna ask kind of a final question. So your first op-ed in the New York Times was entitled “Mark Zuckerberg and the Expensive ...” “The Expensive Education of Mark Zuckerberg.” Manny Yekutiel: And Silicon Valley. And I meant for the rest of us, not for him. Manny Yekutiel: Has he learned? No. I wouldn’t say so. Manny Yekutiel: Will he? Oh, he’s a nice man, you know what I mean? Like he’s a very ... As Sam knows, he’s a nice guy; he’s really a ... And it’s the same thing, he’s personally nice, but he’s causing enormous damage. I think one of the things, if you listen to that podcast ... Everyone focused on the Holocaust deniers part where he said essentially they don’t mean to lie, and I was like they do mean to lie; they mean to lie a lot. And so that was, to me, an insane thing to say, but that got a lot of the attention. That essentially was Mark Zuckerberg should never get on a stage with me ever again in his life, because last time he almost sweated to death and then this time he defended Holocaust deniers. That was nice. Manny Yekutiel: Yeah, two out of two right there. I know. How do I get him to say things like that? Anyway, so the exchange I was most disturbed by, and I’ve written about it since in the Times, was when I kept pressing him on the impact of his inventions on Myanmar and India; that they had made these pretty sloppy rules in these countries and these products were not thought out properly, and they weren’t introduced properly, and they didn’t have the proper people in place to manage it, and it created ... People died, and that how did he feel about that? And so, “How did you feel about that, that you made this badly and there was real-life consequences?” And instead of ... What he said was, he goes, “What I’m really interested in is solutions. Solutions are what I like to do. Like I think we should just get in and fix the situation” — “we” again. “We should fix the situation.” And I was like, “Yeah, I got that, but you caused the problem, so how do you feel about what you caused?” And so six times I asked him the same question, six times. And I said, “Yeah, but I want to know how you think about it.” Sam Altman: But don’t you think that ... I mean, if I was in his shoes and I had billions of people all like ... I’ve had all these things weighing on my shoulders. How could he start to let that affect his emotional strength? Because he wouldn’t be able to make it through the day otherwise. Because he took the money and the job. I’m sorry. He’s an adult. I don’t mean to be rude, but like, stop treating him like he’s a juvenile and like oh my goodness, this poor hoodie-cladden boy; it’s so hard for him. Like, my kids can take more pressure than he can. But nonetheless, he kept ... I asked him six times, it went on for a while because it got really uncomfortable, and he kept saying, “We’ve gotta fix the solution.” I said, “Yeah, but you caused the problem. How do you feel about it? How do you feel about it? How do you feel about it? People died.” And he finally got exasperated because I’d done it so many times, and I did that on purpose, and he goes, “What do you want me to say?” I said, “How about starting off with, ‘I’m really sorry what I did caused people to die.’” That would be like the human reaction, right? That’s the first answer. And then secondly, I’d wonder if I was capable of handling this thing and if I’m the right person to do this, because it does have real-world implications. And then I asked who should be fired for this, who should be fired? And you know, he hummed and hawed, and he goes, “I guess me because I’m the CEO and the founder, and I own and control it, and I’m the chairman.” And he goes, “Well, do you want me to fire myself?” and I said, “That would be fine.” You know what I mean? Like I’m just saying, I just want them to understand the implications. Sam Altman: But would that actually solve the problem? If Mark Zuckerberg went to Hawaii and was like, “Okay, bye guys. I’m done.” Like we still have billions of people ... Like here’s the thing, he posted on Facebook and I’ve looked recently on his posts. It doesn’t matter what he posts about, you then have tens of thousands of people attacking each other about Brett Kavanaugh, Palestine, sexual assault, whatever. And it’s just like this whirlpool of hate, that sure, he’s the one that starts the whirlpool, but if he was replaced by someone else, wouldn’t people still be ... I don’t know. I don’t know. I think he needs help. I think they need big-time help there with a lot of people who have more global viewpoints, that maybe are not living in the bubble of Palo Alto, that have a bigger idea of things, that understand ethical issues, that ... These are ethical, societal, philosophical issues, and these are people, if you know them, are lovely people, but ill-equipped to deal with them, I think. Sam Altman: I want to say something. Before I do it, I want to make two points for clarity. One is I think it’s a real shame that he didn’t start that with “I’m sorry,” which seems the obvious human reaction and what anyone would want from a leader in that situation. I have the feeling he felt it and I think there’s sometimes such an adversarial relationship between people under siege and people asking them questions that maybe you don’t feel like you can express it, but I wish he had done that and I want to believe that’s what he felt. The second thing is I wanna be clear that I do think we need to adapt these platforms and their rules and how we use them much faster. It turns out when you give everyone a voice, you get great and terrible behavior from that and it’s easy in stories to always categorize people and we as humans like the stories where people are either clearly the hero or clearly the villain. And unfortunately it’s almost never the case. There’s good and evil in everybody and everything, but I do think we need to get addressed, as you said people are dying and we need to address that much faster and with more seriousness than we have been. And I believe we can, although I believe that’s going to take work that we’re not currently doing. But I think it’s easy to talk about how people are dying. And I think it’s important to talk about how people are living too. I grew up gay in the Midwest in the ’90s and early 2000s. And that was sort of not very good, and I think without the internet I will honestly say I’m not sure I would have made it through that. That was ... transformed me personally, I think it’s been transformative, the acceptance of gay people in the world. And I think you can say that for many other groups that have been oppressed with no voice for a long time. I have no doubt that many people have lived because of Facebook as well. I get that argument. But it’s how they’re building the structure. Nicole Wong who used to work for Twitter and Google, fantastic, smart person. She was a lawyer for them. We did an amazing interview where she talked about the pillars you build these things on. And originally, for example, the pillar for Google was context, authenticity, authentic and something else. You pick the choices you make to build the structure you’re making. What Facebook has been built on, for example, I’m just using Facebook because it’s the biggest, and Twitter is its own cesspool of mess, but actually is kind of fun in a lot of ways. Today was really fun for some reason, there was all kinds of weird names on there. But, you build it on certain things, so what Facebook has been built on is virality, speed and engagement. When you build it on those premises, guess what you get? Precisely what you get. You get fake news, you get hatred. If you build it around community, context, authentic connections, that’s a very different business. But guess what? It’s not as lucrative a business. Sam Altman: Look, it deeply troubles me, and I think it should deeply trouble everyone that these companies have teams of people that figure out how to exploit our dopamine systems. And you get what you get. You get what you expect to get out of that. I do think, though, that there is more good than bad that comes from this. If I could push a button and make all the Facebook products disappear, I wouldn’t. Twitter maybe. Facebook, I’m joking about that. I do think that the value that we’ve gotten, and again we need to adapt. It’s happened much faster than I think human society has been able to adapt, or so far we’ve been able to adapt to. But I think there’s incredible good that’s easy to get lost in the discussion. Manny Yekutiel: So based on your comments, you guys are both leaders, you’re thinking of the future. You’re talking to the people who are at the core of this. Based on those conversations, and you’re reading the tea leaves, where do you see this going? Are we on the edge of a precipice and it’s just going to get worse? Or are people really waking up to some of the issues with these tools and are taking really serious concrete steps to solving them? I wish I could say that, but a lot of the stuff that’s out of Facebook right now is we’re the victims here. I’ve never seen, it’s insane that reaction. It’s fascinating. It’s really interesting contrast to the Google people around the sexual harassment. The employees actually said wait a second, this is not how we want to run a company. Which was interesting. The Facebook employees are more, I call them docile. But they are. They’re docile. They must feed them Soma in the bread or something like that. In the artisanal ... Manny Yekutiel: What is that? It’s from a book called “1984.” Sam Altman: “Brave New World,” isn’t it? Manny Yekutiel: Kara, we’re on television right now. But it’s a book. Manny Yekutiel: National television. But it’s a book you should have read. Manny Yekutiel: I went to yeshiva, we weren’t allowed to read that. I should run Facebook because I’ve read “1984” and I understand the implications of dictatorship. Sam Altman: It’s from “1984” or “Brave New World”? Manny Yekutiel: That’s what this is all about you just want to ... Audience member: “Brave New World.” Sam Altman: Yeah, close enough. Manny Yekutiel: Wait a second. I’m sorry, “Brave New World,” not “1984,” George Orwell. Oh my God. No wait, you’re right. We read them, it was ninth grade, we read ‘em all, we read ‘em all. But in any case, I’m sorry. They ... what was your point? Manny Yekutiel: I don’t know. I’m embarrassed now. If there’s anything to happen. Is there anything gonna, in the future. Manny Yekutiel: I will say ... I think Congress is going to insert itself, and the fact that Lindsey Graham is going to have any say over this is disturbing. I think it’s bad. These people in Congress, I’ve spent a lot of time in Washington, been visiting them. There are a few senators, Senator Warner, Senator Klobuchar, most of the senators, Senator Burr, Senator Bennet. There’s a couple that are pretty intelligent. Senator Wyden. Who else? You know them better than I do. Congressman anybody. Sam Altman: I just maybe less that I think highly of than you. Some good ones. Right, I know, but I’m just saying. Sam Altman: Look, I think we’re going to get this resolved, but I don’t ... but I think we’ve actually lost sight of what’s really important. I think we are living on an exponential curve of technology, and the rate of changes has been increasing every year, every decade, it’s going to keep changing. And what we are in right now, which feels like the most important and most difficult technological issue we will ever face, will turn out to be nothing but a warm-up drill for the stuff that we’re going to be dealing with in the next, five, then next 10, years. And so I think this, that seems like this absolute meltdown, there can be nothing more important, nothing harder, we are going to look back at this with fondness in the way that we look back at previous presidents now and be like whenever when life was so simple. But the next round of issues are going to be like, what does it mean when anyone can edit anyone else’s genome? What does it mean when we have artificial intelligence that is smarter than humans in every way? These, I promise, these are going to make the issues of today look like trifles that we wish we had to deal with again. I think he’s right. It’s AI, robotics, changes in transportation, gene, things around genes and DNA. These are, it’s about to come, is really frightening in terms of who determines these things and the impact it has on society, for sure. Sam Altman: The thing that’s always hard about exponential curves is when you look backwards they look flat and when you look forwards they look vertical. And you kind of only sense your own relative pace of progress so it always feels like the most important thing ever, and in that sense it’s always true. But if you don’t look forward, if we get totally mired down in this stuff that’s happening right now and we miss these questions, they really get to fundamental questions about what is the future of humanity going to look like? What does it mean to be human? What is the world going to look like in 30 years, which is unrecognizably different, and that part I’m confident about. I’m confident we’ll adjust the current issues, I’m not at all confident we’ll be able to address the future ones. And then sensors and surveillance too. What does a Chinese-driven internet look like, and those kinds of things. It’s a really interesting question. Manny Yekutiel: Lordy, lordy, lord. Goodness. Lordy, lordy, lord. It’s hard to think about because he’s right. The surveillance stuff that’s coming. The sensors, the stuff you put in our bodies and things like that ... the altering of your own bodies, it’s really big stuff. Manny Yekutiel: You’re speaking to a packed house here in San Francisco and also the American public on CSPAN and you have OpenAI and you’re both very involved in these questions. Is there anything we can do right now, other than just sit and wait for this technology to be developed and then hope it doesn’t destroy us? What can we actually do? Not watch “Black Mirror.” Sam Altman: Actually, I think sci-fi is really important to watch. Not the pig one. I’ll never unsee that one. Manny Yekutiel: I didn’t see the pig one. Oh, don’t see the pig one. Manny Yekutiel: Okay. Don’t see the pig one. Sam Altman: In terms of what we can do, I think people can participate, people can get involved. Kara talked about how tech companies’ leadership is overwhelmingly male and that’s true. But the most skewed field I know of right now is machine learning PhDs, which are by graduation rates, 98, 99 percent men. And that is the group of people, in my opinion, I may turn out to be wrong, that will have the most effect on the future of the world that we live in. And what we can do is get involved. We can encourage a much broader, a much more diverse group of people to go into that field, and into other fields as well. We can start societal conversations now, before we’re reacting from the other side like we are from how social media gets used. We can start conversations now about what decision should we make, what do we want society to look like. Before we actually make all these changes, are we sure they’re good, are we sure they’re bad, which ones should we try to stop, which ones should we do more of? But I don’t know how to do that because I think society is very good at reacting to yesterday’s problems and very bad at investing a huge amount of time and energy and thought into the problems that will occur in 10 years. Manny Yekutiel: But Sam, aren’t you the chair of OpenAI, aren’t you the person that’s supposed to be thinking of ... Sam Altman: Oh, I’m trying to. The question is what can other people do? I’m trying to make that my major focus. That’s why I’m not running for governor. I’m going to Mars with Elon Musk, that’s my job. Manny Yekutiel: That does not sound very fun. Are you kidding? He’s so much fun. What are you talking about? Elon Musk is the most fun, correct? Sam Altman: Elon is very fun. He’s very fun. Manny Yekutiel: Okay we’ve now veered off topic. Sam Altman: Maybe I’ll change that to the best interview in tech for my other answer. Yeah, he is one of them. [ad] Manny Yekutiel: Okay, so I think it’s time. We’re going to open it up to audience questions. I just got a cramp in my leg. Ow. Okay, so here’s how it’s going to work, oh we have hands already, that’s great. So we have a wireless mic and I’m going to point to you and then we’re going to hand you the wireless mic. Better to ask a specific question to one or the other because that way we get more questions, so if you have a specific question for someone please let them know who it is, and then please pass the mic back up, okay? We’ve got one mic. Also, also, also, please say your name and stand up. First question is going to be over there, so let’s pass this mic down, yeah, you right over here. Aurora: Hi, my name is Aurora Quinn Elmer, I’m doing work helping communities and organizations figure out how to definitively and effectively deal with sexual predators when they’re identified, with the possibility of applying restorative justice when that’s appropriate. Particularly for lower-level offenses or miscommunications. I’m curious to hear from both of you how you would like to see us shift how we respond to accusations in the #MeToo era. I think we haven’t quite sorted that out yet, as far as I can tell. Oh, you take that one. We are reaching a really interesting point now in the #MeToo stuff. There’s still these astonishing stories, I don’t know if you read the Les Moonves ones in the New York Times today. You should, it’s disturbing. Although it’s kind of low-level corruption on his part, the way he’s trying to cover up in order to get the money that he wants. It’s a big question because these stories go around the world so quickly. Everything gets amplified so quickly and then people get exhausted by the amount of discussion. And what’s really critically important is the people, women, especially women, should have voices and be heard. The stories should be heard. And I think one of the things that we did when we covered the Ellen Pao trial, which I think we were pretty good on at Recode, one of things that I did as an editor is I decided to cover it, I hate to use this comparison, like the Super Bowl. And we had five stories a day on it, and we decided just to put a lot of attention on it. We had two reporters on it, two great reporters. And we covered the hell out of it in lots of different aspects. Sam Altman: You live-blogged it, it was sentence by sentence. Yeah, we did. We did everything because we thought it was an important intersection of sexism, fucked-up VC-ness that everybody knows about and everybody writes about and power and money and influence and stuff like that. One of the problems is when you have things like Twitter or whatever, things just ... it exhausts people, so then it becomes noisy and then the real point is never, you can’t have a substantive discussion about problems and everybody feels in a crouch position and doesn’t know what to do. Legitimate stories, everyone gets ... men get I can’t say anything. Women now want to talk a lot and about it, but then there’s so many different stories, then you’ve got the cable stations doing different things and it becomes sort of circus. It’s really hard in this era not to be twitchy, right? In terms of what you’re doing. So it’s really hard to know how you substantively make changes. My feeling is again, the issue is systems. The system is broken in a way that doesn’t allow, it’s broken against certain people, that certain people stay in power, and those people like to stay in power and they’re not going to give it up willingly. How do you change the systems at their very core is really the super difficult problem from my perspective. Sam Altman: The area where I have the most expertise on this is not about lower-income, lower-status women, but female founders in the YC portfolio. I think there’s still a hugely long way to go there. And I think, my new belief about how that problem is actually starting to get solved is the LPs that give VCs their money to invest. Now that they have decided to demand reporting and transparency on this, I think that’s the first time where I’m actually seeing the industry take this sufficiently seriously. I have sort of an unusual perspective on this whole thing because I was both, harassed as a founder 15 years ago, and it wasn’t that bad, but it’s always stuck in memory. And I’m friends with a lot of powerful men in VC who are on the other side of this. So I feel I see both sides of it now. At this point a very common complaint from YCs female founders is that male VCs will not engage with them in anything other than a conference room during the day with the door open with people in there. And that is a huge disservice to women in technology. And how that gets fixed, I mean I hear about it and I understand why people have the risk profile they do. And when I say, “Just don’t be an asshole and you’ll be fine 99 percent of the time,” people say, “Well what about that one percent? I’m not going to take that risk.” But the current state there, it’s clearly better than women being harassed but it’s deeply unfair to women. And I don’t know how you turn that around. Although, part of it is so funny because ... I’ve had people say that to me, it’s like what if someone says anything. Well don’t grab their ass, how bout that? Let’s start with that. Don’t kiss them. Don’t ask them out on date. Those are like, I’ll make a list for you, don’t do these things. Sam Altman: To be clear, I’m on your side of this, I’m just saying I don’t know how to make it happen. I know, but it’s such a vast overreaction by men to this. It’s crazy. Women don’t go around doing this all day. We manage to control ourselves even though we want to grab you guys. Well I don’t, but. Sam Altman: I was going to say. You do, I don’t. Opposite. But, sorry ... but you know what I mean. Sam Altman: I do. When I hear that I literally want to take the glass and throw it at their head. Sam Altman: I’m agreeing, I’m just saying this has become a huge problem. But that’s the first reaction, is, “How does it affect me?” Versus, “Wow, this is a systematic problem throughout society and maybe I’m a cause.” My son who is 13 is a champion debater and he goes, “Mom, what about men who get harassed?” And I was like, “What?” And he goes, “There are men that get harassed.” I go, “One percent.” And he’s like, “Yeah let’s talk about that.” I’m like, “Why? Why don’t we talk about the 99 percent? So we end up having this amazing debate about it, but to me it’s really interesting how he goes there. That’s where he goes, versus the 99 percent. I don’t send him to his room for that or anything like that. But it’s interesting. I don’t know how you ... just stop it. Just stop it. I don’t know what else to say. Manny Yekutiel: We can continue, or we can move to the next question. To the left, you have the mic. Joelle Stewart: Hi, my name is Joelle Stewart and this question is for the would-be mayor, Kara Swisher. I am wondering about the real world ... I think what we don’t interrogate enough is the real world impacts of a lot of these tech platforms, not just in the sense of these mass genocides that are caused by some unnamed technology platforms, but for example the demographics of this room would not look the way that it does without the employment practices of the companies that we live around, let’s be real. I live in San Francisco, and am I the only black person here? Oh maybe there’s, oh hey, all right. All right, there’s a few of us, but not as many as there were probably 15 years ago. And so in light of things like Amazon going to Long Island city and Sidewalk Labs, the Google experiment that deigns to create a whole city, spoiler alert, I’m an urban planner so I’m really curious about this and your take on how these platforms and companies wielding their employment power and their economic power effects cities and how things can be a little bit different. It’s very weird that the employment patterns are reflected so heavily in cities. Blah, blah, blah. You know what I mean, so I’m wondering what you think about it. Thanks. That’s a big question. I think what you’re asking about is how we get, I believe, how do we get more diversity involved in this thing. Or to create cities that are less pushed apart by money, by race, by all kinds of things, correct? Joelle Stewart: I’m wondering how to do we connect those two. Because I think that in San Francisco at least, it’s very desperate. People think oh my company is totally white, and the city is totally white and what coincidence, but it’s really connected. 100 percent. Again, it goes to this thoughtlessness, how did this happen. And they act like it just happened. Years ago, and I tell this story a lot. I wrote a story, I’m not a city planner, what’s happened around cities is a lot to do with city planning, you know how segregation happens, it’s very clear. And in this city it’s about money, who can afford to live here? And then who they hire who then can afford to live here. They don’t see the connections between things and connections are very hard for a lot of these people who run these companies to make. They really can’t make connections of why this happens here or why, the way Hollywood people couldn’t connect why the way they depict women affected misogyny. It was really interesting thing today on Twitter, who was it? Was it Claire Danes, or someone was talking about what’s-her-name’s bikini. Audience member: Natalie Portman. Yes, Natalie Portman. Manny Yekutiel: Someone’s on Twitter here. Well Twitter was good today. It was an interesting debate. Jessica Simpson, she was just making a comment as a teenage girl. It was really an interesting, you should go look at it. But I’m getting off the topic. I think the way they hire, years ago I wrote a story called, besides the men and the women of Facebook, I like to drop these things down every and then, was the board of Twitter. It was 10 white men of the same age almost, like exactly the same. You could have just, I didn’t know them all apart from each other. And I called the CEO Dick Costolo, who’s great. He’s a great guy, and I said, “How did you get 10 of the same exact white men on the board?” He goes, “I don’t know, it just happened.” And I was like, “It couldn’t happen, that’s mathematically impossible, like how did that happen?” And so I wrote a story and I believe, I literally think I should have quit after I wrote this lead. I said, “The board of Twitter which has three Peters and a Dick,” which was so good. I should have gone done, and I’m gone. I had a really interesting discussion about it, he thought it just had happened that way. And what was fascinating to me ... Manny Yekutiel: Really? Yes. He really did. Honestly. It was interesting, and he did and other people did it when I went to question him is like, “Well you know Kara, we have standards.” That’s the word they use. I said, “It’s really interesting that you always use the word standards when it comes to adding women or people of color to a board, but you never do it when it’s 10 white men, who by the way are driving your company into a wall, just so you know, Twitter’s not doing very well.” You know what I mean? Or Yahoo, or any of them. Standards is only applied to people who are trying to get in. It’s that kind of stuff. So I can’t tell you about cities, but I do think these decisions are made purposely and they pretend ... unconscious bias, it’s very conscious as far as I can tell, or thoughtlessness. I think we need thoughtful politicians who say, look, like the NIMBY/YIMBY thing, just call it out. Look yYou’re going to put people with different economic and racial — in different places all throughout the city, everyone’s going to do. You’ve got to have leaders that do that and that’s really, I think, the problem, is that they don’t do that. At these companies you’ve got to have leaders that say, “I have 70 percent white guys running this places, I need to change this. I can’t look at it like I’m dropping standards.” You know what I mean? It can’t be looked at like that, because that’s the way they see it in their brain, that it’s a favor rather than an asset. Do you have a thought on it? How do you solve city problems and racism? Sam Altman: I also feel unqualified to opine on that. But other than, I think, the data is really clear that making housing affordable is a hugely beneficial thing to people that are younger or disenfranchised in any way. And I think San Francisco had a catastrophic failure to do that. Manny Yekutiel: So we have a question to the right here. You in the white sweater, but do you mind coming over here away from the speaker because it’s going to do that crazy loud whale noise thing. Yep. Peggy: Hi, I’m Peggy. I wanted to change the topic to the politicization of data and who owns your data. And so we all subscribe to these social platforms and how who owns our attention, right? And how that might change antitrust laws or the definition of monopoly and I’m interested to hear both your thoughts on that. Manny Yekutiel: Thank you. Sam Altman: I mean, I think you own your data and people agree on that. The hard part is at the internet giants, their network effects or monopolies or whatever coded word you want to use for the fact you can’t pick an alternative. If all your friends are on Instagram, you’re going to be on Instagram. And so, what true ownership of data would mean, if you stop liking Instagram’s rule you could go somewhere else and have a good experience, but you don’t really have an option to do that. And I think that’s what the current consumer data protection laws and the antitrust laws and just more general consumer protection laws fail to take into account. Is that ... people say, if you don’t like Facebook, just don’t use any of Facebook’s products. It’s much easier said than done. And sure you can do it. And some people do. Does anyone in this room not use any Facebook product at least once a week. None? Truly none? Manny Yekutiel: Honestly Sam, I feel like I’ve tried multiple times, I’ve deleted the fucking app. I’ve turned by phone to black and white, I’ve really tried to get off it and I feel like I actually chemically cannot do it. Sam Altman: Right. No, Facebook is a bloated app that is exhausting. Sam Altman: But you don’t use Instagram, WhatsApp, nothing? No, Instagram is a museum of people’s performative bullshit. And Oculus, I kind of like VR. I kind of like VR. Manny Yekutiel: But you use it, honey, don’t you? Sorry, Kara. What, Instagram? No, I’m not on Instagram. Manny Yekutiel: Okay, you’re on Twitter all day. There’s better or worse. Twitter I like because it’s a cesspool. Sam Altman: My point is, I think the data question is easier than, less important than how do we actually have consumer choice in a world where we have these monopolies that are bigger than AT&T at the peak of it. And I think that’s what’s getting lost in the conversation because it’s so hard no ones willing to actually talk about it. I think they’re going to be broken up. I do. I think there’s going to be some regulatory ... It’s going to be really interesting around antitrust, there’s some really interesting legal theories going around about all of it. But I think the amount of data that these companies have on you and how they collect it is ... Manny Yekutiel: So what does that mean, you literally use Twitter with this half of the room, but not the people on this half of the room? I don’t know, well, they’ve done it before. It’s happened before, so I don’t know. I think probably that’s where it’s going to go. If I had to guess, very similar to what everyone said, “Who could affect Microsoft?” and then bingo, they affected Microsoft. So I think there’s going to be some sort of regulatory relief because these companies can’t resist their Borg-like tendencies to want to suck up every piece of information. Peggy: But who is there defining... I think if the Democrats get in power, used to be friends of tech. They’re not so friendly to tech anymore. I can tell you from visiting them. I think you’ve got a lot of people in the Democratic Party who now are pretty pissed about what happened and have some thoughts on that. Manny Yekutiel: Okay, we have a question all the way in the back. Yes, you. I know you’re surprised. All the way in the back. Do you want to just get up and project? Yeah, let’s do that. Just say your name and please project. Louisa: Yeah, my name is Louisa. My question is for Sam. It’s about how you think about preventing AI from ending civilization in general and how you think about that in terms of domestic versus what seems to be an arms race between us and China. Sam Altman: To say this extremely clearly, we will, I can’t promise when, I can’t even make a confident prediction if I want. But we will, we, humanity will at some point build digital intelligence that surpasses human intelligence. People don’t think about that much because it’s so uncomfortable, and it’s so hard to say. That’s an event horizon. It’s just really hard to see what the world looks like on the other side. I think it really matters that it’s built in a way where the benefit of it is distributed widely throughout humanity and decisions about how we use it and how we build is distributed widely through humanity, not to make this a commercial for OpenAI, but I do genuinely think that’s super important. I think we will be able to learn the collective human value system. I think there will be big arguments about what human values we should keep and what were bad and that we should let go and who gets to decide that and how we vote on it will be sort of, in some sense, the hardest problem humanity’s ever faced. But I now believe in a way that I didn’t use to, or at least I used to not be as confident that the technological problems of how we build an AI, like a super AI that shares human values that align with the goals of humanity. I think that’s technically possible. So that’s the good news. The bad news is I think the collective action, collective governance problem is going to be super hard. And I think this is, as we were saying earlier, society just ... evolution’s slower than technology? I think we’re going to have to ... We are likely going to have to react to this at a speed that we’re not good at. Which is why, I think, it’s important that the technology industry now try to get people thinking about this. And try to figure out the world that we want to collectively build. But Sam, you know who has hired most of the AI in machine learning? What are the two companies that control most of it right now? Sam Altman: I’d say that OpenAI put out half the most important results in the year, something like that. And we’re only 80 people. One of the things that is cool about this. But the two companies that are really hiring heavily are Google and Facebook. Sam Altman: The most number of people. But one of the things that’s cool about this and one of the things that’s magical about software is if you have people that are like a little bit smarter or a little better mission and a little bit better plan, just like startups always can, you can beat a company that has tens or hundreds of thousands of people. I think that’s always true about software. And it’s exponentially true about artificial intelligence. So I think looking at the number of people that companies have is the wrong way to think about it. I think looking at sort of maybe number of transistors under the control of the company will turn out to be the right way to think about it. Manny Yekutiel: Just a quick follow-up for you, Sam. What do you think specifically is the role of the 500, 600 or some elected federal officials that have just been brought into government to do to kind of steer the conversation, right? ‘Cause if you’ve been elected to the 2018 Congress and this is something that you cared about, what is the role of those people? Sam Altman: The tricky balance is there’s two very different ways that this is really important. One is the changes that it’s going to have into the economy and jobs in the next few years. And that’s a huge issue and that’s what’s affecting your constituents today. And that’s where people are going to feel pain today and next year and the year after. And then there are the questions about how is this going to fundamentally reshape the world in 20 years, 30 years. And how you as a politician prioritize and balance those two things, which they’re both about AI but other than that they’re actually totally different, are very hard. And I think our system, especially with Congress on a two-year cycle, even the presidency on a four-year cycle, is going to do a much better job at the first. I actually think we’re going to get that right. I think we’re gonna figure out how to deal with that. But how we kind of like pick this long-term future, I think that’s going to take courage and sort of force that in a politician. There’s nobody working on it. Let’s be clear. Sam Altman: There’s nobody working on it. I mean, right now we don’t have a chief science officer running the office of science. If we have an Ebola situation, we’re fucked. Like truly fucked. We don’t have a chief science person, we don’t have a chief technology officer. That whole area has been gutted out right now. It’s really quite a ... I mean, I think one guy, there’s one guy in there who is one of the deputy CTOs. He was in real estate before or something like that. He was. What’s his name? Sam Altman: I don’t know. Ross? Sam Altman: Michael Kratsios. Whatever. Whatever. They were like, “Meet him.” I was like “No! I refuse. I’m not meeting a real estate guy to talk about tech.” Manny Yekutiel: I think that I maybe, okay. Or maybe you tried it? Manny Yekutiel: All right, next question. Right over here. We need more smart people. Manny Yekutiel: You’ve got your hand raised for a while. Yeah, you! Yes, yeah! Chris: I’m Chris. You have made mention before of being fatigued from news and that potential resource being repleted. Sam, you mentioned the exponential growth curve, I think a nod to the singularity. The Weinstein brothers make mention of the sense-making apparatus when referring to the news. And I think the disruption of the economics that publishing news today. When you believe are going to be the upcoming sense-making apparati of dealing with the increasing intentional load we’re going to see as our growth exponentially expands? Manny Yekutiel: Does someone want to repeat that question? I think he’s saying, how do we deal with all these screens. Is that right? Or something like that. The incoming. Yeah, the incoming. Manny Yekutiel: How do we take in all the news? I literally don’t wanna take a shower anymore because I’m like, “What happened? Wait what? We just declared war on France?” Like just on Twitter for five seconds and then it’s over. I don’t know. Sam, you’re ...? Sam Altman: Well I think that’s a stressful and unhealthy way to live, personally ... And frankly very unhygienic of you. I shower. I just have the phone in there with a baggy. Sam Altman: And no, I think you need to give yourself permission to not follow every post, not read every news article. The things that cause outrage and that feel like ... There was probably something that happened in February of this year that this entire room was talking about all day long. And you were putting aside work, time that you could have spent with your family, your friends, your hobbies because this thing was so important. And you couldn’t shower because if you even were away from your computer for five minutes you were going to miss the conversation. And none of you remember what that is. And it’s okay to miss it. I guess it was “shithole countries,” but go ahead. Sam Altman: It’s okay to miss that. No it’s not. You need not to miss that one. Sam Altman: But there’s no way to stay informed and stay sane right now. There’s just no way to do it. Like I think we ... one of the things that is happening is everyone seems so fatigued and stressed and unhappy. And I wish I could just like ... we could all take a day off and go for walk in the woods. And the world is gonna keep spinning. There will be plenty of problems when we get back. We can read about them then. Like your job is to stay on top of this, so maybe you have to. But it’s not most people’s jobs. No, but here’s the thing. I do think there is a push toward less twitchiness. That there’s more that ... You know, I’ve just noticed how fast our podcasts are growing. And when I started the Recode Decode podcast everyone was like, “Kara you can’t do it in an hour. People won’t listen an hour. They won’t like an hour. You need to do it 26 seconds.” And I was like, “No, I’m gonna do an hour.” And they’re like, “You can’t do an hour. You can’t do an hour.” And I’m like, “I think people like a substantive discussion. I like a substantive discussion. I’m just gonna keep talking.” And do an interview with someone for an hour so that they and they talk. Sam, you were on there. Sam Altman: I was. Yeah. And it was an hour discussion, right? And it changes the whole nature of it. And it’s only grown. So I do think there is some, there is something where the twitchiness, people are pushing away from it. And you can see it in entertainment. There are some really wonderful entertainment shows that take commitment and are interesting. And so I don’t necessarily know if we’re all, that we don’t push that away. It seems that people are pushing that away a little bit in terms of indicators that we’re getting from the stuff that people read on our sites. Sam Altman: Can I share a quick story? Manny Yekutiel: Oh my god, yes please! Sam Altman: I was speaking to a very dear friend of mine and he came to see me for some life advice. And he said, “I’m trying to figure out what I want to do. I’ve spent the last 10 years on the internet. I have a” — and he does have one, for sure — “I have a very bad case of internet addiction. You” — he pointed to me — “have staged an intervention before. Other friends of mine have too. None of you have been able to make it work. And I realize that for 10 years I’ve been wasting my time on Twitter reading the news in online forums. And my partner left me. None of my jobs have worked out. And now I’m about to turn 40 and I don’t know what I wanna do with my life.” And it was just that, and that’s all true. And it was just this gut-wrenching moment where I couldn’t tell him like, “Oh. It’s okay.” I’m like, “Yeah that really did happen.” And I think we’re gonna see this a lot more. ‘Cause there’s so much in the world and so much of it’s so bad. But it’s easy to get immobilized by it. And if it’s not your job to stay on top of everything that’s happening ... do less of it. You’ll still know a lot, and there will be plenty to be outraged about. But like, read a ... One rule that I have for myself, that I’m trying to have for myself, is if I’m looking at a website and kind of like mindlessly doing it, and I hit, like, open a new tab and type in the same website again. Which I do more than I’d like to admit. I close the computer and I either have to go for a walk or read a physical book. And I’m not perfect about that. Sometimes I just keep going. But I’m trying to be better about that. Because I think it’s ... you know, we were talking, there are these dopamine systems. It’s deep in our biology to react to this and we haven’t had time to build up societal antibodies yet. I think younger people are changing. I have to say my sons, they’re very good at putting it down. Much different. It’s a really interesting thing. I watch them. But they use it in a different way. It’s used for certain things. They just don’t use other things. Like I watched “Gilligan’s Island” till my head’ll fall off when I was a kid. Like you used to do things and then you’d switch them into other things. Being upset on the train — I was in New York and everyone was looking at their phones. And I was like, “Oh everyone is on their phones.” I made like I was grumpy in a way. But then I thought, well before everybody had a newspaper and was looking at a book. You know what I mean? No one was staring out into space on a subway. Sam Altman: I remember being bored as like this abstract thought from a long time ago that I can barely hold on to. And I miss that. Manny Yekutiel: I do too. I feel like, no offense, but I feel like we have seen in our lifetime, I actually don’t know how, but I remember. Keep going. Dig. Manny Yekutiel: Oh goddamn. I remember going home and being like, “Great, I get to go on the internet now!” And telling my mom to get off the phone so that I could log on to get on the internet. And it was this thing you could do for a special 30 minutes and the rest of the time you just had to figure out what to do. And now ... and in our lifetime I’ve seen now we’re always on the internet all the time. And I’m always nervous. Sweetie, I was around when there were rotary phones so I don’t worry about the age thing. Like we had the [rotary phone noises], that kind of thing. So you know I think it’s just it depends on these things are built to be addictive. And that’s another thing. They hire tons and tons of people to addict you. And everybody knows that. And again, when we’re sitting around saying, “Oh they’re trying really hard.” They hired 20 PhDs to make you push that red button and they did that on purpose. And to pretend otherwise and then them to go, “Oh I don’t know why people are addicted”? When they’re handing you liquor. Sam Altman: That is the thing that I think, I mean, it’s hard to pick one thing that tech companies have done the worst because they’re so many to pick on. But that one thing, the fact that they have figured out how to hack you in biology to make us unhappy I think is like, when history books are written it’s going to be like, “What the fuck? Did that actually happen?” But it’s the same people that are doing the other stuff. That’s what I’m saying. To make them into like hapless victims of their own success is a mistake. They are purposely doing this with every choice they make. And then when it goes awry they’re like, “Who knew?” Sam Altman: I think that you and I agree. And there’s plenty to be critical about. But I’m just trying to say that there’s also things I’m thankful for. But again, I agree, but that’s not critical, it’s truthful. Like there’s a difference between ... Sam Altman: Those are truthful and I think ... But when you say bad things about them it’s like, “Don’t be so critical.” But I’m like, “I’m just pointing out that you’ve made billions of dollars off of other people’s privacy, off of other people’s attention, and taking advantage of other people’s stuff.” So I ... that’s all. Sam Altman: And I agree. I’m pointing out that I think that and I also am glad that these companies exist. And I know that I may be in the minority in the room for that. But I think they’ve done great good for society too. Manny Yekutiel: Shall we move on to the next question? Sure. Manny Yekutiel: We have a question to the right. Over there. Martha: Hi my name is Martha and I’m a founder and CEO of an early-stage political activism company and a former policy adviser so I think about these questions quite a bit, given some of the things you were saying about social media platforms being built for addictive behavior and consequences that are detrimental to our society as a whole. Even life-or-death situations. Do you think that Silicon Valley investors — not just business leaders but investors — have a responsibility to demand less revenue? When you think about, especially me, when I think about my business model and how much money we can make in five years, a lot of it is dependent on that kind of behavior. So do you think that we need to change our business model? Yeah. I mean, I think that their business models are their business models. I don’t know, how would you change them? As Wall Street is Wall Street, right? How are you gonna do this? And they won’t change this. And just look at, I’ll switch it to another thing, the murder of this journalist Khashoggi. Do you know how many companies in Silicon Valley are funded by the Saudis? Are you seeing Uber handing the money back? I’m gonna be asking Dara Khosrowshahi that tomorrow. “Are you handing the money back?” He’s a murderous thug, according to Lindsey Graham, and if Lindsey Graham is saying it it’s absolutely true, right? You know? They’re not gonna do it. They’re not gonna do it. Like there’s an expression, I think my ... someone told it to me, someone in my family was like, “You’re so poor. All you have is money.” And they don’t wanna change these business plans. They don’t wanna change the addictive ones. They don’t wanna change the data-sucking ones. They don’t wanna change the advertising ones. They don’t wanna change any of them. They just don’t. They don’t want to do it. They like the money. They like the power. They like everything. They just happen to wear Allbirds. That’s the only difference between them and a Wall Street mogul. And at least the Wall Street moguls I prefer because they’re like, “We’re rapacious assholes.” And that’s the end of it. And you’re like, “All right. I get you. Let’s have a beer.” But I don’t know, I don’t know, I don’t think they’ll do it. I don’t think they’ll do it. But I just, I don’t know. Do you? Sam Altman: I mean, look, this is easier for me to say because I don’t need more money, but I certainly won’t invest in companies that I will be successful but would be bad for the world. Sometimes I invest thinking it would be good for the world and I get it wrong. But I won’t go into it doing that. And I try not to let YC do that either. And I think that in the long run that does work and I think that it makes you more successful. We certainly tell companies that come to us in many specific instances like, “You could go build that product. You could do that service. You could sell to that customer and you would make more revenue. But you’d be compromising something more important. You shouldn’t do that.” At OpenAI, when we wrote our charter we talked about the scenarios where we would or wouldn’t make money. And how just the things we wouldn’t be willing to do no matter how much money they made. And we made this public so the public would hold us accountable to that. And I think that’s really important. I think there are different investors that think differently. One thing that I have a lot of sympathy for is people who came from nothing, got a job at a company where they’re getting an incredible salary but the company is doing things that they don’t like or don’t fit their own ethical compass. And they’re not in the situation I’m in. And they really struggle with what the right answer do there is. And I’m not in their shoes now. But with the Juul stuff. There are a lot of Silicon Valley people in that. How did you think about that? Sam Altman: So the Juul one? This is this vaping thing. Sam Altman: This vaping thing? This is the vaping thing you must keep away from a 16-year-old boy named Louie Swisher, but go ahead. I now have a vaping thing. Sam Altman: I hadn’t looked into that. I own one myself. Sam Altman: In depth it seems really problematic. What someone told me, I haven’t researched this at all, but someone told me is that pure nicotine is actually not that bad for you. And that the science on that ... Yeah, I assume that’s right. So I haven’t studied ... You may not have children right now, but go ahead. Sam Altman: I haven’t studied it. It seems really problematic from what I know. I wouldn’t invest. Because there would be a lot of people dead. That was, that should have been an obvious one for lots of people. Manny Yekutiel: It’s almost eight o’clock so we have the last audience question. And I know there’s a lot of questions. There’s gonna be some time afterwards but right over here. Last audience question. Hillary: Thank You. Hi. My name is Hillary and I ... So I’ve heard people talk about open crypto networks that present potentially open computing systems where maybe platforms like Facebook could be built in ways that shift the power and maybe the revenue model. Giving a little more power to users. And I was wondering what you guys think about that and the prospects there. For solving some of these problems that we’ve talked about. Sam Altman: I so wanna see a single crypto project shipment actually get used. Then I will sort of stop dismissing them out of hand. But until that happens, I don’t think I can point ... I haven’t been working like super long but yeah a decently long chunk of time now, and I can’t point to any piece of technology that has had as much ... It has so captured the discussion of the industry with so little actual use. The amount of money that has gone into crypto projects that are somewhere in between incompetent and fraud, I have never seen in any other industry. Well, the early internet. Sam Altman: That one I didn’t see. I did. Sam Altman: I could believe that one’s worse. Je was there. I was there. There were a lot of... Sam Altman: Je. Je. Me. That’s me in French. Sam Altman: I got it. I think I got that language right, right? Okay. Sam Altman: So maybe we can say it’s the worst since then. Well, there were a lot of like, there was a lot of scammery in the early internet. It really was. It was like crazy at the time. Hillary: I’m sort of asking like, let’s suppose like in concept where we rule out all the scam. What about just you getting paid for your privacy? Like you get to ... like years ago when I was writing a book about AOL, Steve Case got up in some investment commerce and said that we’re making $76 from each user. He had some number that he assigned to it. And I put my hand up, I said,”Can I have my $35 please?” And he’s like, “What?” And I’m like, “Why shouldn’t you pay me half that money and maybe I’ll give you more.” They never come up with that idea. Like just being paid for your ... it’s not like giving away your liver, I don’t think. But what do you want a ... should you be paid? Sam Altman: The promise is so seductive and maybe it is a way to get around the issue of these unopen protocols that you’re on one now. That’s where everything is, you can’t leave. Maybe if Instagram was on some sort of blockchain, something or the other, you could leave in some sense. Or use another version of it. But I think we’re learning something fundamental about human coordination and governance, where these de-essentialized projects so far are just not working. The promise is incredibly seductive. I hope it happens. The current ecosystem of the crypto, blockchain world seems, today, this may change. This may be like a burnout after the dot-com and then the Facebook rises later. But the system today seems unlikely to produce that. I really hope it gets there. And I really hope it does someday. The promise is tantalizing. Manny Yekutiel: So the final question I have, which is something that I’ve been asking a lot of these panelists about is what is one thing that the people that are in this physical room right here can actually take away and do to address some of the issues that have been brought up in this conversation? Sam Altman: You quit Facebook. I’m pretty impressed. Quit it. I never used it. Just for work. I just use it for work until I understand it. Here’s the thing. If you’re employees of these companies, you are their base. Like I hate to use a Trump term, but you are their base. Listen to the Google Walkout Organizers podcast we did. I think it was six women and one man. It was astonishing. And they were astonishing, articulate, strong, still loving their jobs, but really said, “Enough.” And they also just didn’t want to talk about issues of sexual harassment around which the first thing started because they were paying someone $90,000,000 who had real issues to go, which is astonishing they did that. If you’re employees of these companies, ask questions of these things. It is not disloyal to say, “Is this the way we’re doing it?” Because the premise of Silicon Valley, at least when I got here and this was the good part, was that it was changing the world, that it was better. Then they went on and on about how better they were. Now demand that they be better. You know, just demand. As employees, to me, you have the power to do that. And that doesn’t mean dropping a dime to me or anybody else. Or fine, do that. I would like that. And it’s helped me a lot in that way. You have a part and a power with these people. Manny Yekutiel: Someone you may have ... You have power that you don’t understand that you can use and voices. And so I think it’s really important for you as employees or working here to say, “No.” Like, “No this is not gonna stand. This is not gonna stand.” And everyone who does that, you can affect them. You don’t need me to affect them. You don’t need powerful people to do it. You have that. And not saying like everyone is powerful but you really can, especially in this industry and these leaders are listening. I think they do it, and then they do get affected by these things. So that’s what I would say to do. Sam Altman: I think that’s the most important point. I hadn’t thought of saying that but I will ... that’s what I think is the right answer. I think that it is employees that the companies that have more power than any other constituencies. That’s the group that these companies have to keep happy. And the challenge is it’s such a premium in this industry. And I do think that this industry is better then others at listening to employees and trying to adapt. That employees at the large tech companies have much much more power than they realize. The other thing that I was going to say is just, I think it’s fine to spend most of your time thinking about the problems and the challenges of today, I think that’s really good. But if you believe that sort of you are living for the future and all the people that are going to come out after you, you got to at least allocate some to the problems of the future. And you’ve got to spend some of your time and your resources and your effort trying to think about not the problems of 2019 but of the problems of 2039. And it’s hard to do that without concerted effort because the problems of today are so big. And so to me it’s about making choices. Like be an adult. I just like so many times when they’re ... I talk about juvenilization of men here is Silicon Valley. Or letting these people have a pass or whatever. Or just giving people passes. Like, act like an adult. Like what would an adult do. And not see that as a negative thing, you know what I mean? Here it’s like oh, everyone’s young, or we have to have a young person, or that young mentality. Like there is something good about acquired wisdom. I’m only saying that because I’m 412. But it’s true. It’s not just a power to say no to these people, but it’s a power to say yes, this is the way we should go. You should be doing both things. You don’t want to be a hindrance, but you should say no appropriately and yes appropriately. And that’s what adult people do. And take responsibility. That’s the other thing. Take responsibility for what you’re doing. And stop acting like the things you’re doing don’t have an impact because they absolutely do. And get out across this country. And I don’t mean doing Mark Zuckerberg and visiting every cow in every fucking state. Like don’t do that, that’s bad. But get out to understand how people actually live their lives. Not a place where there’s hot and cold running kombucha. Like there are other places. There’s other places and it doesn’t mean that you aren’t as justifiable as they are ‘cause that’s really irritating too, to say the real Americans live here. Real Americans live everywhere. But do start to understand how other people live, paycheck to paycheck. They have hard times with healthcare and nutrition. And they have lots of stuff like that. To me that’s acting like an adult. Sam Altman: Can I make one pleasant comment off of that? It’ll be fast. I think one thing that had gone wrong with the move into the internet is that we have evolved some biological protections for how we act with someone in person. And there’s most of the time, we have some compassion that just sort of happens when you’re with another person physically. Some level of politeness that often happens. Not always. But on the internet that biological protection seems to have gone away and it’s so easy to just cast people as just the other. To cast people as stupid or Luddites or racists or just out of touch or drug addicts or whatever. And in my experience, I have found that my own preconceptions of people when I meet them on the internet or when they’re mean to me on the internet or I get in a fit with someone on Twitter, I’m always willing to think the worst. And if I meet them in person, I always find myself thinking the best. And I think this is something that has gone deeply wrong about the internet. And if you just get out and meet very different people with even a little bit of an open mind, your biology will take over a lot of the rest. Manny Yekutiel: So I mean, first of all, and I have to say I don’t know if we could have planned this before but that is the perfect segue into why we built this space. Because the premise was that these conversations, some of them are much more productive to be had in person. And so I’m really honored deeply that both of you would take time out of your busy schedules to join us tonight, and be in conversation. And especially for flying here for this conversation. So a really big round of applause for Kara and Sam. We’re doing things here every day, sometimes multiple times a day. If you’re interested in staying involved in this space the website’s Welcome to Manny’s. Please do spread the word. Feel free to tag us or search us online, Welcome to Manny’s. The goal of Manny’s, like I said, is to create a central, affordable and accessible place to become a better informed and more involved citizen. And with that, let us give our final thank you to Kara and Sam. Sam Altman: Thank you for having us. Thanks to Sam Altman for joining me onstage and to Manny’s in San Francisco for hosting us. I urge you go there, it’s on the corner on 16th and Valencia. Thanks for listening.

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posted 4 days ago on re/code
Vishal Shah has been promoted to lead all of Instagram’s product efforts. Instagram has filled one of its most important executive vacancies in an effort to piece together a leadership team that was largely dismantled throughout 2018. Vishal Shah, a product executive who oversaw Instagram’s shopping efforts, ad products and its IGTV video service, has been promoted to head of product for all of Instagram, according to sources. That was the same job held by Adam Mosseri, who currently runs Instagram, until he was promoted following the departure of the company’s two co-founders this fall. A Facebook spokesperson confirmed the promotion and sent Recode the following statement from Mosseri: I am thrilled that Vishal Shah is Instagram’s new Head of Product. Vishal is an experienced manager with deep product knowledge who lives out Instagram’s values of people first, simplicity, and craft. He is a great addition to our leadership team and I look forward to working with him in this new role. It’s been a quietly tumultuous year for Instagram leadership — quiet because Instagram’s executive changes have been overshadowed by its parent company Facebook, which has some kind of public crisis virtually every week. Instagram’s heads of product and engineering left for a newly formed Facebook blockchain team in May, its COO took a promotion at Facebook in September and its co-founders, Kevin Systrom and Mike Krieger, left abruptly later that month. Mosseri, who was promoted to run all of Instagram two months ago, has been looking to fill open head of product, head of engineering and COO roles just six months after joining Instagram himself. Shah’s promotion takes care of at least one of those openings — an important one made all the more important by Systrom’s departure. As Instagram’s co-founder and a detail-obsessed designer, Systrom was very hands-on with the app. He famously approved every single Instagram ad when the company first started selling them. Systrom’s departure led to some concern externally that the Instagram app could get messed up in the wrong hands. Facebook can’t let that happen considering Instagram has become arguably the company’s most important product. The photo- and video-sharing app will soon account for a sizable part of Facebook’s revenue growth, and also drives users back to the main Facebook app. Plus, it keeps Facebook connected to younger people online, and has helped the company fend off a potential threat in Snapchat. The task of continuing Instagram’s momentum will fall largely on the company’s new executive leaders, including Shah. It could be tough. Facebook is dealing with some serious morale issues following the company’s public missteps, including an increase in employees thinking about leaving. Instagram is struggling with some of the same morale and employee retention concerns, according to multiple current and former employees. Many employees were shocked and saddened when Systrom and Krieger left and feel as though Facebook has taken more control over Instagram’s operations, which has added to the morale issues. It’s possible that promoting Shah, who has been at Instagram almost four years, instead of bringing in a new head of product from Facebook might help alleviate some of that frustration. As part of Shah’s promotion, Ashley Yuki, a product manager who oversaw video on Instagram, including IGTV, will take over Shah’s old role. Mosseri hopes to have a new head of engineering and a new COO in place by early next year. Here’s a video of Shah at Recode’s Code Commerce conference this past fall.

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posted 5 days ago on re/code
Airbnb and Slack are considering direct listings. Postmates, with JPMorgan’s help, is plotting the more traditional route. When Spotify decided to sell its shares in an IPO directly to regular people rather than to a pre-chosen group of its bankers’ friends — in a move known as a direct listing — it portended an inflection point in the relationship between Silicon Valley and Wall Street. “The U.S. initial public offering market is broken,” Spotify’s chief financial officer Barry McCarthy wrote earlier this year. “Try a direct listing, like we did at Spotify.” But on the precipice of a 2019 initial public offering year that will see some of the tech sector’s most iconic startups become public companies, no one has yet said that they are heeding McCarthy’s call. In fact, the two IPOs already on the docket for 2019 — from Uber and Lyft, both of which last week reportedly filed confidentially to go public — are expected to pursue standard-fare, by-the-books listings. Some bankers say the conversations around direct listings have largely died down after an initial bout of curiosity this spring. There are, however, two companies that are weighing direct listings, Recode has learned: Airbnb and Slack. And their decisions will go a long way toward signaling whether Spotify’s move was an aberration or a trendsetter. When it went public in April, Spotify’s new approach aimed to loosen Wall Street investment banks’ grip on startups’ jump to the stock market. Rather than selling shares to institutional investors for a set price on the day before the stock becomes available to everyone, Spotify’s direct listing allowed for the share price to be “discovered” naturally on opening day by the rate at which buyers were willing to buy and sellers were willing to sell. A company that directly lists doesn’t create or sell any new stock and therefore doesn’t raise any money — it’s just current shareholders selling their preexisting shares — which means it’s an option available only to the few who don’t need cash. While it is a little early to assess the legacy of Spotify’s novel and provocative financial maneuver, which some on Wall Street were privately betting against, insiders and observers generally view the Spotify experiment as at least a non-failure. Despite Spotify’s seemingly risky offering, the direct listing has yielded a remarkably stable stock. But there is exactly one and only one example of it working: Spotify itself. And as concerns about an economic recession crest, startups might be even less willing to roll the dice on something not in the tried-and-true playbook. “The system actually — with all its quirks — works well,” Sandy Miller, a late-stage venture capitalist at IVP, said of traditional IPO listings. “We wouldn’t recommend [a direct listing] generally for our companies.” Silicon Valley bankers tell Recode they have not detected much traction and are not, as of now, expecting any significant 2019 direct listings. Bankers say they fielded tons of questions about the hot new thing last spring when Spotify began to trade on the New York Stock Exchange, mostly from CEOs who were just plain curious about the hot new thing. Spotify’s leadership and investors, too, got flooded with inquiries. But in recent months, once its sheen wore off? The conversations thinned to just those who actually should be considering it. Bankers won’t argue that the direct listing is dead, but predict that the follow-ups to Spotify are a few years away. There are two prominent exceptions. The first is the company that is most serious about reducing the role of bankers: Airbnb. The company and its finance staff have been closely studying how Spotify executed its IPO and are seriously considering whether to do a direct listing, according to people familiar with the matter. The conversations have been serious enough that the CEO of Airbnb, Brian Chesky, has consulted in recent months with the CEO of Spotify, Daniel Ek, about how Airbnb could possibly pursue its own similar listing, the people say. Airbnb declined to comment. Chesky is said to be interested in making Airbnb’s public offering more than merely a financing event and is drawn to any approach that makes his IPO less traditional (like perhaps granting Airbnb hosts stock). A direct listing for Airbnb, which was last valued at over $30 billion, would be another revealing moment in the Wall Street-Silicon Valley war. One of the highest profile tech companies in the world would be declaring that it doesn’t need bankers the way that bankers think they do. Airbnb “could probably successfully do a direct listing,” said Miller. “I think they’re a decent candidate for it — but again, they’re the rare case.” Airbnb, whose new chief financial officer hasn’t even started yet, very well could need to wait until 2020 for its IPO. But it has a few things that fit the direct listing profile to a tee: The company, as of now, does not need to raise any money as it would in a typical IPO. It has a trademark, global brand that gives it enormous visibility. It’s guaranteed to get coverage from research analysts either way. One big holdup, according to the people: Airbnb has not allowed for much private stock trading over the last few years — unlike Spotify — which would make it harder for Airbnb to determine how exactly to price its shares on opening day before the mad rush to buy and sell begins. The lack of trading could also create pent-up demand from longtime shareholders to sell immediately. Also seriously considering a direct listing in recent months is Slack, the workplace messaging company that recently hired Goldman Sachs to help lead its initial public offering work. Slack CEO Stewart Butterfield is said to be curious about the idea, though he has not yet made any final decisions, according to people familiar with his thinking. Slack’s offering isn’t expected until the second half of 2019. Slack declined to comment. Slack’s move would be somewhat atypical because bankers and investors believe that enterprise startups — companies that make revenue by selling products or services to other companies — are, on average, poor candidates for a novel debut that comes without the promotional marketing of a traditional IPO. Most ordinary Americans haven’t heard of most enterprise companies, and people like to buy stocks they’ve heard of. But Slack is basically the only enterprise company where the direct listing idea makes any sense. With eight million daily active users, Slack is the rare enterprise startup with a cult-like base of followers. It has a brand that is well-known enough for everyday investors to potentially be interested in buying some stock at the beginning of trading. In short, it’s the most consumer-esque enterprise company out there. But for smaller companies — think of those with market capitalizations below $10 billion — a direct listing doesn’t seem doable. Postmates recently hired JPMorgan to advise it on its traditional IPO slated for next year, according to a person close to the company. The idea of pursuing a direct listing never seriously came up, according to a second person close to the food-delivery startup. Postmates and JPMorgan didn’t comment. Crowdstrike, the cybersecurity startup that worked to investigate the data hack into the Democratic National Committee, is preparing a traditional listing. Also expected to say no to the direct listing is Zoom, the video-conferencing company, a person close to the company said. Both declined to comment. So despite all the direct listing fanfare, a 2019 wave this is not.

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posted 5 days ago on re/code
The practice is still prevalent across the tech industry despite recent criticism and some limitations on its use in cases of sexual harassment. Last month, when 20,000 Google employees walked out of work, their first demand was an end to a practice that prevents workers from taking their employer to court over issues like sexual harassment. That practice, called forced arbitration, requires employees to settle disputes in-house rather in the courts. Studies show that forced arbitration generally favors employers and tends, on average, to result in lower worker payouts compared to court cases. Following the walkout, Google dropped forced arbitration in cases of sexual harassment and assault — but not in other types of cases, and only for full-time employees. But Google isn’t the only company that makes its employees resolve certain disputes this way — several other major tech firms still have the practice in some form. Today, a group of Google employees, including one of the organizers of the walkout, are rallying tech workers at other firms to come together to help put a stop to that. They’ve formed a new group called “Googlers for Ending Forced Arbitration” that aims to provide a tech-wide coalition among employees at different companies. “Today we ask all our fellow workers industry-wide to join our fight to end forced arbitration,” reads an open letter published on Medium. “2019 must be the year to end a system of privatized justice that impacts over 60 million workers in the US alone.” Since the walkout, organizers at Google say they’ve heard from tech workers at over 15 other major tech companies about their experiences with forced arbitration. The letter today links to a sign-up form for workers interested in joining the group. The form lists several major tech companies, including Amazon, Apple, Uber and Airbnb, as suggested options to choose as employees’ place of work. The letter also lends its support to two pieces of legislation in the U.S. Congress that could limit forced arbitration nationally, the Arbitration Fairness Act by Senator Richard Blumenthal and Restoring Justice for Workers Act by Representative Jerrold Nadler.

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