“The Apple “Rundle” is anemic, the California brain drain (California’s exodus) and a prediction on Palantir’s direct listing

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Hi, everyone.

This is Pivot from New York Magazine and the Vox Media Podcast Network.

I'm Kara Swisher.

And I'm Scott Gowa.

And Kara, I have been officially, or I have selected, or volunteered to be a subject in the Phase 3 trials of a vaccine.

Really?

Are you lying?

No, I took it yesterday.

It's the Russian vaccine, and I don't want anyone to worry about me.

I'm feeling fine.

My tebjapokronhonom glossabaza, Donald Trump.

oh my god i'm russian i'm russian

that's good vaccine humor

there's no good vaccine humor there's no good vaccine humor the only person who can make vaccine humor is probably bill gates i'm guessing that's good humor good vaccine let me just say let me just say there's a lot of back and forth over when the vaccine's coming trump keeps the the actual scientists keep saying no in testimony in front of the senate uh or in front of congress and and i think it was yeah it was the senate um and and trump keeps saying three weeks but I feel like

we have to get a vaccine.

Although from reading a lot about it last night, actually, I was reading a lot for an interview I'm preparing for.

It's going to be a long, long, long time before we get one.

You think?

Yes.

No, I don't think.

Well, so what have you heard?

I think there's just so many conflicting questions.

Well, it's not a herd.

I listen to, I read scientists, not politicians.

Jesus Christ.

Just give me a fucking opinion, Smarty Pants.

It's going to be two shots a long time from now.

So the end of 2020, the end of 2021 into 22, before everybody gets it.

There's going to be a small amount of people that get it, and then it's going to take forever.

So, we're not going to be out of this thing for a while.

That's the best case scenario, just so you know.

Yeah.

Well, Fauci said that, right?

He said, by the end of 21, life really won't be back to normal.

He thinks until the end of 21.

Yes, people are going to be vulnerable to this for a long, long, long time.

So, just whatever Trump says about three weeks, he's smoking something, something, smoking something, something.

But he always does that.

He just lies without recourse, which is one of his specialities.

uh let's get into the stuff we were talking about so uh amazon uh announced it is offering podcast streaming on amazon music we could yay for us i guess and then spotify stock film uh what do what do we think of this and then trump is jumping at the idea to do a four-hour debate with joe biden on the joe rogan podcast which Joe Biden should not do,

but probably will not do.

A lot of activity in the podcast market.

Well, if you think about where video went, the playbook there is the only real way to differentiate is through original content.

And it's very expensive and risky to try and back music artists.

And the model right now, the kind of entrenched players, the record labels have figured out a way that it just doesn't, you know, even Jay-Z can't figure out his own kind of direct-to-consumer infrastructure.

They're not an oligopoly, but they're sort of a triopoly.

And so if Spotify wants to go vertical, they can either forward integrate into hardware or they can reverse integrate into content.

And when they reverse integrated into content, they found the place that they could differentiate in an exploding medium was, you guessed it, podcasts.

And

you could spend a billion dollars and have a decent, stable podcast content that potentially differentiates your service.

A billion dollars behind Taylor Swift and Beyonce, who knows what happens, right?

They would probably want two or 300 million bucks just for their next couple of albums.

And so it makes sense.

And you know what's going to happen is

it's good for the jungle cat and the dog because now there's more bidders trying to find original content around podcasting.

And there are over a million podcasts, but I bet less than

literally less than 100 or 200 are self-sustaining.

And they're inexpensive.

I was just face-hubbing with a friend of mine who happens to be an actor, Sean Hayes, who's on Will and Grace.

And I noticed he was.

Jack, he's great.

He was number three on all of Apple podcasts with his thing called Smartlist.

He's doing with Jason Bateman and Will Arnett.

And they bring on a surprise.

They each have to surprise each each other with a guest every episode.

It's a great idea.

And they're all very funny.

It's just essentially three white guys sitting there, funny, white guys sitting around talking.

And he's number three now, which is, and I was like, how did you do that?

And he said, he self-funded it.

Like, he wasn't his agent.

It wasn't a hundred.

There's no barriers of entry, but the problem is there's no moats either.

It's, yeah.

And

the celebrity podcast, the celebrity podcasts haven't had stank power.

Remember, Alec Baldwin's podcast was hot for a while.

It's a very difficult medium.

I mean, to sustain.

That's what I'm telling you.

That have sustained it.

Like I said, you're a lazy celebrity.

You probably can't sustain it.

But in any case,

it's an interesting time and it's an interesting time for

podcasting.

Do you think Joe Rogan should

Joe Biden should go on Joe Rogan's show?

The Joe should go on the Joe show.

No, look, at the end of the day, the person who's up in the polls wants to minimize all exogenous risk and debates.

There's always an opportunity for exogenous risk.

And if you believe the polls, and

everyone's nervous, right?

We're all scared to believe the polls.

But if you do believe the polls, it looks like he is, Biden is markedly up.

It looks like it's going to even be difficult for Trump.

In most elections, it would be most a lot of

media companies, had they not been hit by a car

in 2016, would be saying that it's basically over.

And the campaign wants to minimize, you know, Speaker O'Neill never used to debate his opponents because he didn't need to.

And right now, I personally, I just don't think Biden should debate him.

I think there's less opportunity for a gotcha moment when they're not standing next to each other or sitting next to each other.

Yeah, and Joe Rogan will gotcha him because he's, of course, beautiful.

Yeah, but I don't, and I think Joe would actually try to be even-handed because it would be a big moment of credibility for him.

I think he would, I actually think he would do a good job.

I think he's an interesting guy with a different viewpoint, although I know you're not a big fan.

I don't like him.

I think he would do a good job.

But I don't think if I'm advising the Biden campaign, and by the way, I think Obama and the Clints got together and said, okay, playtime's over, Joe.

Here is who is advising you.

I think he is getting very smart advice.

Yeah.

I think they'd say, all right, come up with excuses, but we're just not going to debate this guy.

Unless we go below four or five points margin, there's no reason to debate him.

Just say no.

Yeah.

And then lastly, I think banter.

I think he shouldn't do it.

It's like, that's a, that's, it's, it's perfect for Trump to like wander around and talk.

It's, it's like, it's a perfect Trump

and start lying.

Yeah.

You know, he loves to talk.

I mean, like the other day, he was just going on and on and on, like lying.

And you can't stop the lies, right?

You can't check, do the lie checks and it would be joe biden checking lies and it would be exhausting um i don't he's not sleepy but the lies you know if you ever watch uh i think it's daniel dale who does the rundowns of lies i was just thinking of him oh oh my god that guy let's get him this is his moment he's like that guy baghdad the general the guy yeah that guy's gonna have action figures he is so good

oh my gosh that guy's good he's good um so uh republican uh senators led by marco rubio are asking trump to reject the tick tock deal Or I wrote about it this week.

I'm on the same side as Josh Hawley and Marco Rubio, oddly enough.

What do you think about that, very briefly?

I mean, it's essentially a glorified vendor deal from what a lot of us can tell, but it's not clear what's going on or whether it was just a lot of noise from Trump.

It feels like it.

Basically, every Republican president or Republican senator that wakes up in the morning and looks in the mirror and says, hello, Mr.

President, including Marco Rubio, who Florida citizens have been funding an extended and failed presidential win.

I think literally every moment of every day, Senator Rubio is trying to figure out what gets him a bigger turnout in Des Moines.

I think that is all he does.

And what you're going to see, especially if the margin between and the polls between Biden and Trump remains at eight points,

all of a sudden, all of a sudden, Republicans are going to find something they haven't come across in about four years.

They're going to find their testicles.

And you're already seeing it.

You're already seeing them starting to say, okay, I'm not on board with this.

All of a sudden, they're finding their backbone.

And if in two weeks Biden is still up by eight points, you're going to see all of a sudden a lot of leadership from Republican senators saying, I disagree with the president.

And this is just the latest example.

And they're right.

This thing is this thing, the CFIAS review, if CFIS has any integrity, it just doesn't make any sense.

Well, the national security, the cybersecurity agency has to sign off on it, really.

And if they say no and then they approve it anyway, which they apparently can do, which is I don't hate to use that term with this administration.

It'd be something.

I can't even tell what it is, but Oracle's not the owner, and the Chinese get to keep the company.

That's kind of what's happening here.

It's a follow-on financier as we said.

Yeah.

That's all it is.

We're going to go on to big stories.

The Apple Rundle has arrived, and their new fitness service is giving Peloton a run for its money.

I just want to point out, Scott, when I'm giving you your due about Apple's stock being up some some 40%, you said it would be, even though, as you noted, revenue hadn't necessarily changed that much.

At Apple's annual event this week, the company announced their new subscription program, Apple One.

The service will include Apple Arcade, Apple Plus, the TV Plus, iCloud, Apple Music, and other services starting at $14.95 a month.

Plus, they introduced their new Apple Fitness Plus, which will function much like Peloton streaming recorded classes by top fitness trainers.

The move has been rumored since August, and Andrew Ross Sorkin and I talked about it while Scott was out, but the dog is the Rundle expert.

Scott, in December of 19, you predicted the Apple stock would be up on a move on the Rundle.

Boom, I guess.

Is that how I say it?

Boom.

You can do it.

Go ahead.

Go ahead.

Do the boom.

B to the double O to the M.

That's right.

Recurring revenue bundle.

No one had ever heard of it.

Apple,

there's a really interesting business lesson for almost any company.

And that is, all right, all right.

We're going to be in a low growth economy.

We can't double our revenues, but we need to double our stock price.

Our stakeholders are just going to invest their human and their financial capital in Zoom or Peloton.

And the only way you can do that is to do what Apple's done.

But Apple has not increased their earnings one buck in the last 18 months.

Their stock's up 150%

because 23% of their revenue now comes from recurring revenues, specifically services.

What do you think of this particular rundle?

I feel like more should be in there.

It's anemic, right?

I felt that it was not a good Rundle.

It's kind of,

I don't know, it's the bad news bears of apps all strung together and it's cute and it's nice and you like everything.

You do save some money.

But here's the thing, an effective rundle.

And everybody, CEOs call me all the time and say, we want to move to a recurring rabbit bundle.

And I'm like, all right, are you willing to invest billions of dollars and take your earnings down?

Because the metaphor is monogamy.

And that is, if you're going to go all in with someone and give up all the rest, it better be an incredibly strong value proposition.

Sure.

When Amazon

says, all right, two-day free delivering on on all your orders, that is like, okay, I am hot.

Let's bunker down for the next 50 or 60 years and prograde.

I am going to go all in on you.

I'm not going to cheat with eBay or any other one else.

It is really, it's got to be a compelling offer.

And right now, it's just not a very compelling offer.

You got music, you got games, you got Apple TV Plus, you got some cloud storage, and they're basically testing their fitness app.

But the mother, the gangster move here is very obvious, and it's two words.

First word, I, second word, phone.

the opportunity for apple is to take the real leap and

and tim cuts one of the few people has the credibility the capital and the brand to do this and to take their apple care and their their iphone package which i think is about 35 bucks a month and basically say to the top two 3 percent of the world that are all ios users for a hundred or 150 200 bucks a month we'll give you all of this all these kind of you know tier two apps, plus we'll give you your iPhone, your iPad, your AirPods.

And by the way, boss, you're you're going to get everything 30 days before anybody else.

We're not even going to tell you to ship it to you.

Don't you want the iPhone 30 days before everybody else?

Wouldn't you take it?

I would take it.

I'd say just ship it to me.

Because the biggest mistake that companies make and marketers make is believing that choice is a good thing.

No, we want less choice.

We just want to be more confident in our choices.

There are many statistics on that.

Happiness and lack of choice.

Well, I don't know about you, but I have decided when I go to restaurants, I try, I do believe that research that you only have a certain number of good decisions in you every day.

So I try not make decisions around anything that's not important.

I try to defer to somebody else and I want to focus my decision calories on things that matter.

Absolutely.

So I don't order food around a sandwich every day.

Just whoever I'm with, I'm like, all right, I like the weight of it.

I eat every single day.

What's that?

I do.

I eat the same sandwich every day.

Really?

Yeah.

What is that sandwich?

I like it.

It's a turkey sandwich with a cheese and

coleslaw.

So you're sandwich monogamous.

I like it.

I am a sandwich monogamous.

But I agree with you.

I think this rundle is anemic.

That's a very good way of putting it.

It's not a, I was like, I get much more.

I do love my Amazon Rundle.

I do.

It's like useful.

The delivery, it gets there quick.

I'd like more stuff from them.

I want more in my Rundle.

They took their core offering, e-commerce.

Yeah.

The only successful Rundles in the world.

Spin it up a little bit for me.

You know what the test of a Rundle is?

It's not whether it's a good value.

It's not whether it's interesting.

It's whether it's a fucking IQ test.

If you have an IQ over 80 in a credit card, you have Amazon Prime.

If you have an IQ over 60 in a credit card, you have Netflix.

This is not an IQ test.

It kind of takes some time.

You have to trade it off.

And you also have to have an adjunct that makes the core offering that much better.

Panera is offering unlimited coffee for $19.95 a month.

They've signed up a million people.

Why?

Because it's an IQ test.

Of course, why wouldn't you do that?

Yeah.

I agree.

Anyway, I think it's an IQ.

Rich people are very parsimonious.

Rich people do like their things and you do recognize value.

You do.

There is a value.

Not in terms of saving money.

It's like this is easy for me kind of thing.

I like a rundle.

And this, I agree.

This isn't a good enough run.

I don't want any of it, I don't want Apple Arcade.

I sort of want Apple TV, I guess, plus iCloud.

Well, I already get that, right?

And then

I buy storage a little bit, but it doesn't cost that much.

And music, which already costs that much.

So it doesn't, I don't know.

I don't know.

We'll talk about Apple Fitness Plus.

This is something they're doing in competition with Peloton, although more people like the actual device of Peloton, which is the bike or the treadmill,

than anything else.

And they also like the trainers.

I don't know if Apple can really compete without an actual device.

It's super interesting.

And there's another business lesson here.

You want to get in front, demographics are destiny, and you want to get in front of migration patterns.

So if you were to invest in home builders or infrastructure companies in Texas and Florida, you're going to be just fine because one of the great migrations is being really driven by two factors, and that's sunshine and low taxes.

And then the other, the biggest migrations probably in,

gosh, consumer history are about to take place.

And the first is 18% of GDP is up for grabs because healthcare is being blown up.

Then the $700 billion higher ed cartel is being blown up.

And also the sweat industrial complex.

We are not, just to your previous points, we are not going back into a dark, damp soul cycle or barrier's boot camp in the next 18 months.

And in addition, and

The reality is around COVID-19, and we don't speak about this out loud, there has never been a good time, Kara, to be in really good shape.

There has never been a good time to commit to eating better,

a better time to commit to getting fit and strong and being robust.

Because if you believe Anne Gola Merkel and that 60% of us at some point are going to have COVID-19, you're going to look back on all the mornings you got up and took a run or got on your Peloton or did some pull-ups or, you know, whatever it is.

And you're going to think, you know what, that was probably a pretty good idea.

And I think the fitness industry has been basically 30 to 40% of it has been shut down.

I'm not going back to this.

What do you think of this thing?

I'm going to make you land the plane here.

Well, okay.

So I think, I think it's a huge, I think fitness is a huge opportunity.

I have not tried Apple Fitness.

I wonder.

I wonder if they can,

here's the thing, Apple's competence at the end of the day.

A lot of people would say it's software.

I still believe it's hardware.

I think the, I think, look, I think iOS is beautiful, but I think it's the iPhone and the actual MacBook that are extraordinary and singular.

And I don't see how they ever really make a big move in this without some sort of vertical integration into hardware.

What do you see?

I agree.

They have to have the bikes.

I'm going to tell you something, although I sound like an elitist.

I just bought a new Peloton because you bought a second Peloton.

Well, no, I'm trading mine in.

They're giving me an enormous amount of money for it.

Now, I was, that was left at my house, so I didn't pay anything for it, this Peloton, but I'm getting a substantive amount of money for it, the old old one.

They're taking it out of my house.

They're bringing the new one.

And so,

you know, when I do the,

if I had a fitness club or something like that, it's actually somewhat affordable because I usually used to have a fitness club membership or something like that.

And so it's actually like

once you take the return and

the service is so good, they show up and stuff like that.

It's not that bad when you zero it out, right?

Essentially.

And so I bought one because I love the device.

I love the, just like I love the iphone or i love the mac um and so i they have to have a device because i don't want to use their apple fitness plus thing just to save money i like the whole experience you know what well and apple is not about saving money right and think about how much money is up for grabs i used to

rent them that's really interesting if you can rent these i can i used to spend 240 a month to go hang out with really hot gay men in lululemon it's called equinox

And that $240 is up for grabs.

Yeah.

Well, that's what I was saying.

You know, this isn't costing me that much comparatively at all.

But what do you think?

Do you think they acquire Peloton?

Do you think they come out with their own device?

I don't know.

They're definitely going to go vertical.

They're the best manufacturers of technology products in the world.

Do they partner with someone?

Do they come out?

Peloton, despite that commercial, is a great brand right now.

Even though the stock is up like a crazy amount, but it's indication.

It might be too expensive and it also might raise antitrust concerns, but it's an incredible product.

It has the highest MPS.

It's had significant issues, you know, after Epic Games sued the company.

And then Apple's hitting back pretty hard,

saying they started the fire.

Will that affect their moving into things like this?

Well, that's the issue here is that

people can say, this is a great example of, again, how monopolies are bad.

And that is they're streaming together this kind of what it's called Apple I.

It should be called Apple Meh.

And that is Apple Music is sort of the second or third best music offering.

Apple TV Plus is sort of the third or fourth best TV offering.

But because they're all tied together and because they can put it at the top of the app store, you search for anything and it's like, all you see is ads.

It's like how Netflix made everybody watch the birdcage or whatever it was called, the bird box, which was just a shitty film.

Apple can basically shove this bundle or this rundle down almost everyone's throat.

And everyone that competes with the specific, the specific access apps is going to go, wait, we're so much better than this app, but because they control the rails, it's another example.

It'll be used as exhibit 38B in the antitrust case against Apple, or even not antitrust, but the case that says that the app store needs to be regulated.

It really is an example of

how it was pretty quick.

Yeah, but

I mean, it's dramatic.

It's up again, but it went down when Apple announces.

I just don't, I didn't even.

I didn't even think about downloading

the product I have.

And it would have to be substantively better.

It would have to integrate into my device.

Really compelling.

I don't.

Yeah.

And Peloton has

an app or a program, a fitness program distinct of the device.

I don't know.

It's about 10% of the revenue and it's growing fast.

It feels like they are really

coming into each other's swim lane.

It's going to be very interesting to see what happens in what I call the sweat industrial complex.

Who do you bet for on this one?

Who do you bet for in this particular project?

Well, I think the answer is yes.

I think it's great to be Monopoly and it's great to be the key innovator with the winds of COVID behind you.

I don't think it's either or.

I think Peloton and Apple are both

do really well.

But at the same time, you know who gets hurt?

Who gets really hurt?

Okay, so this is so indicative of our economy.

There's one innovator that makes billions of dollars, and we think it's an innovation economy.

Okay, that's one.

It's Peloton.

But think about all the companies that are going to go out of business.

Soulcycle, a great company is going to go out of business.

Equinox, a great company is going to go out of business.

All owned by the same guy.

Oh, the guy related.

Yeah.

Yeah, related.

But even I got a look and a chance to invest in CrossFit.

I do CrossFit.

You know, CrossFit, I still think they carve out a niche, but all these great small.

Yeah.

What happens to Orange Theory, another fantastic company located here in Boca Raton?

So they're open.

Yeah, that's got to be.

I think the revenues are probably 20 or 30%.

I won't go in there.

You wouldn't go into an Orange Theory.

I did.

I used to use it quite a bit.

I liked it.

It was a kind of a, I liked the workout and I did it like twice a week because I thought it was kind of fun.

Like, right.

It was just gave some variance.

Once or twice a week, I won't go in there.

It feels like I'm the same way.

I won't go into a room where people are working out.

It feels like

there's too much exhale.

Yeah, once the vaccine, I'll go back or things like that.

I like Rumble.

There were a whole bunch of them.

I tried different ones out.

Like they were sort of like going out to like

fast fashion stores.

You know what I mean?

Like, or something like that.

But not now.

Not now.

They all are.

You know what was the most humiliating thing about CrossFit the last time I was there before COVID broke out?

It's all, you all compete against the clock.

You have to conduct a certain amount of rounds against the clock.

And

everyone gets done.

It's basically a bunch of lesbian firefighters and 25-year-old male bartenders on human growth hormone.

It's some of the like most strongest inspiring people in the world and me.

And you know what they started doing?

Literally.

So everyone would finish and start fist bumping.

And I'd be over there flopping on the ground trying to do my burpees.

And Kara, I'm not joking, they would surround me and start clapping and saying shit like, it's so

loser.

And they would go, they would literally, they would surround me and they'd say shit like, it's so great you're here.

And I'd be like, fuck you.

Get away from me.

It was so humiliating.

We never mess with a lesbian.

It's so great you're here.

It's so great you're here.

Yeah, fuck you.

Well, you're the sad little, little

one in the corner.

I'm that kind of thing.

Oh, it's so cute.

Isn't he cute doing his?

Come on, Scotty.

You can make it to the finish line.

Oh, trying to get my wrap.

Scotty.

Good try.

Now I work out outside.

Try, Scotty.

I'm going to call you Scotty from now on.

Listen, we're going to take a quick break, Scotty.

We'll be back to talk about celebrities freezing out Instagram and a listener mail question.

Putin, come and get him.

Come and get him.

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Okay, we're back.

Let's talk about a couple of issues at Facebook this week.

Some of Hollywood's biggest stars are boycotting Instagram for 24 hours to protest misinformation and hate speech.

Celebrities, including Kim Kardashian West, joined with the Stop the Hate for Profit campaign.

This is the coalition of civil rights organizations that had organized the ad boycott in Facebook back in July.

Earlier this week, a whistleblower, former employee at Facebook, said executives the company ignored or were slow to address issues around international governments using the platform to spread misinformation.

It was a devastating

essay that she wrote on media.

Meanwhile, the Wall Street Journal is reporting that the Federal Trade Commission is gearing up for an antitrust law by the end of the year.

Also, today

there's more sort of evidence of them not being able to control this platform.

In this case,

a message that's been going around that's been shared a lot, saying for people to attack

BLM and anti-FA people to get ready for attacks and stuff like that, which has been shared more than most things by President Trump.

And so it continues, this continuing.

Now, the celebrities got made fun of for doing this.

And of course, this group, Stop Hate for Profit, has been effective with the ads, although who knows if it has a real impact.

But what do you think?

People made fun of celebrities for, oh, my God, 24 hours, you're killing us kind of thing.

What are your thoughts on this?

Continues, that was my point.

I think it's performative and totally ineffective.

I don't, and it's just sort of, oh, that'll show them.

You're taking 24 hours off of Instagram.

Yeah.

Come on.

I don't, I don't know.

Fine.

I, I, look, these, they have voices.

They're important voices.

I, I think their heart's in the right place.

I don't see any real downside here, but in terms of actual effect and the, the advertiser boycott, look, it's, at the end of the day, what they should do is testify in front of Congress.

What they should do is host fundraisers for senators who are willing to do the hard work and

advance antitrust.

But the the notion that anyone gives a shit that Chlorie Kardashian is taking 24 minutes off of Instagram in protest.

I agree with you.

I agree.

I agree.

It's easy to dunk on these people.

But this is the continuing, like eventually you think this has any impact on regular people not using it?

Or what, like, ooh, just these little signals.

What would Stop Hate for Profit do?

I mean, they tried the ad, what do you do?

You've talked about jail.

You've talked about jail.

You hold them away.

Look, one of the reasons we keep having these too big to fail and financial crises is there was no one was arrested from the financial crisis.

The algebra of disincentive, you know, where the algebra of disincentive has worked really well is around varsity blues.

I would bet if either of us got a call when our kid was trying to get into college and said, hey, for 20, for $250,000, I can get your kid into UCLA, a big upgrade from where they're going now, USC.

We would say, no, thank you and hang up the phone because we have seen Ann Becky do a purp walk.

We've seen Felicity Huffman do a perp walk.

The algebra of incentive is

because it's wrong.

It's also because it's wrong.

I don't even need to see a perp walk.

No, okay, but you have clearly higher ethical standards than the rest of us.

But anyways, just in case for the rest of us, the algebra of disincentive is the likelihood of the probability of getting caught.

Times of punishment has to be greater than the expected upside.

And again,

that algebra, it's working with varsity blues and paying someone to have your,

paying someone to take your kids SAT.

That works.

That's government working, where the algebra of disincentive is turning the algebra of incentive is around big tech.

And also, quite frankly, financial institutions that absolutely really kind of didn't pay any sort of price.

No financial executive went to prison in the meltdown of 2008.

Anyway, my point is, yeah, all this stuff is just,

it's almost good for Facebook because it gives people the illusion that they're being punished or something is happening.

The FCC is no longer a regulatory body.

It's the cheapest insurance company in the world that says for 1% of your market cap will indemnify you against

future legal action against anything you've done.

So look,

the algebra of disincentive needs to be revisited.

I think there needs to be huge fines or a perp walk across big tech.

I think it's getting that serious.

What do you think?

That's interesting.

And what would be the perp walk for?

Oh, I don't know.

Inciting genocide, perjury, multiple instances of perjury, fraud.

It feels a lot like Trump in a lot of ways because he just keeps violating the law.

Although, is he violating the law?

He's lawless,

and then there's no way to enforce it.

It feels like you're sort of a sheriff in a small town, a western town, and you can't do anything about, you know, the villain that enters town and is breaking up the...

the saloon and everything else.

What is the actual

that's the thing is how do you actually get them doing that pert walk well here's the thing what you know what stalin said about one death is a tragedy millions of deaths are a statistic i think these individuals have learned that i think facebook would be in more trouble if it had done kind of one or two bad things versus 200 because you start focusing in on i think if i think if uh poor if incompetence Two people died in an embassy in Benghazi and it's a tragedy because we put a name to their face.

But when we have 5% of the world's population and 25% of the infections and probably, I don't know, 100,000 to 300,000 more deaths based on negligence and incompetence, it's no longer, there's no longer faces attached to it.

It's a statistic.

If you're Robin Hood, rather than maybe stealing from one trader or one account holder,

if you incrementally steal from millions or hide information and you continue to violate, you continue to ignore teen depression, it becomes a statistic, not a tragedy.

And so the key around breaking the law or acting unethically is to do it thousands or millions of times in a small incremental way.

And I think these companies have learned that.

I think they've gone after Lenin's statistical approach and said, all right, if I'm Donald Trump, if I insult every cohort, then I'm irreverent.

But if he were just to go after, if he were just to mock disabled people, he'd be in trouble.

But no, I'm going to mock women.

I'm going to mock people of color.

I'm going to be

xenophobic.

And then it all becomes, well, he's just irreverent.

And there's no specific crime to zero in on.

Right.

Right.

So so here in this case, it's got to be the federal government initially doing things like FTC, I would assume.

I think when it comes to our biggest problems, whether it's climate change, whether it's income inequality, or whether it's the growing power, unfettered power, unchecked power of big tech,

the only countervailing force that has ever arrested any real true evil over the last hundred years has been either fantastic journalists, law enforcement, but specifically it's been the U.S.

government.

We have to step in and regulate.

And the government gets it wrong all the time, but the heart is in the right place.

And they're the only one with the scale and the authority and the checks and balances to hold private power accountable.

And when it's in the middle of the day, you don't want to give Kim Kardashian any claps, will you?

You're not giving her any claps.

Who's this?

Kim Kardashian.

Look,

good for them.

Good for them.

Yeah.

But

until the Attorney General says, all right, if you continue to do this, if we find people are being pulled out of cars in India and hanged, we are going to reverse engineer it to someone's liability at the corporation that is in charge of this platform.

There's certainly a lot of evidence, especially all these whistleblowers.

They're coming out of the woodwork over there, you know, with example after example after example.

So we'll see.

All right, Scott, let's go to a listener mail question.

Let's play it.

You've got, you've got, I can't believe I'm going to be a mailman.

You've got mail.

Hi, Scott and Kara.

This is Robin calling from Seattle.

As I experience and read about the heat waves, fires, and smoke up and down the West Coast, I've been thinking specifically about the evolution of California's brand and how that could affect those of us in the Pacific Northwest.

For 100 years, California was a sort of American promised land, its massive population growth due to year-round sunshine and enormous economic opportunity.

But weather is no longer the attraction it was as climate change has brought record heat, droughts, and massive fires.

The big wine growers have been hedging with land as far north as British Columbia.

And the new work-from-home opportunities could mean that Silicon Valley in particular is no longer so appealing geographically.

Add all these trends together, and you're left with only the entertainment business around LA as a big draw to the state.

What do you think are the longer-term impacts of all this on how we view California?

Thanks.

And I love the show.

Kara, I'd like to get your thoughts on this, the brand California.

I've been talking to a lot of people in California about this.

A lot of people are doing this.

They're moving out, which is interesting.

They are moving out of, I mean, this last thing with, you know, San Francisco had done rather well in the COVID area, So they were sort of, sort of bumping along pretty well compared to most of the state, although Los Angeles was hit harder and didn't have as much ability to fight it off.

But

I think that's absolutely true.

I don't know what the brand, I always think it comes back because it's a beautiful state.

It's a gorgeous place to live.

There's so many, there's, you know, there's just a different kind of thinking out there.

It really truly is.

You just living here, I can feel sort of the

lard above my head.

You know what I mean?

Like, it's not as innovative.

It just isn't.

Everyone's pretty satisfied to be here.

And I always think about it, like the people who kept going, what kind of people were they, right?

And then there's the people who said, yeah, Pennsylvania will do just fine.

Or

I'm stopping at, you know, here.

I'm stopping.

Utah.

Yeah, Utah, whatever.

Well, Utah takes a lot to get there.

You know, I don't know.

It's a really good question because there is, you know, there are all the issues around homelessness, around traffic, around earthquakes, around these fires.

Now, it sort of adds to like, it's a lot.

It's a lot.

And I don't know, you know, what these tech companies are going to do since that, this is where they are and this is where they meet with each other.

So a lot of people are moving out.

I just don't know if it doesn't then coalesce back to it when things are calmer.

I don't know.

What do you think?

Well, I'm a native son of California.

I spent the first 35 years of my life in California, and

I have a huge debt to the generosity and vision of California taxpayers and the Reading CUC.

I don't think they're

California is singular.

It is the most beautiful, interesting society, geography in the world.

It is to America, the America brand, what Air Jordan is to Nike, what the Mercedes-Gold Wing is to Mercedes.

It is singular and an unbelievable.

It's the crown jewel, in my opinion, of America.

The crown jewel of California, in my view, is state education.

If you think about even big tech, there's been, show me a company that's created more than

$10 billion of shareholder value within 12 months, and I'll show you a company that's in a bike ride of a fantastic California educational institution.

I think Cal State, half a million kids, UC, I think they should double.

Go back to where we were in the 80s, where unremarkable kids had remarkable opportunities.

I think a huge investment in education.

I think they should embrace their love of immigrants and progressive policies.

I think that the whole state should become a sanctuary state and say, if you're smart and hardworking, please come here.

I think absolutely embracing the Latino culture has been a huge boon for us.

On the flip side, because I don't want to sound like a total liberal, I think that the state legislature is going to have to take a harder line against unions because taxes and costs have become totally unmanageable in California.

But look, in forest management and climate change, it's all terrible.

But at the end of the day, California is where people keep going to reinvent themselves and take risks.

And it happens to be the most beautiful place on earth.

So I don't think there's anything wrong with California that can't be fixed with what's right with it, but it's going to have to bring down its costs.

But I'd say embrace your progressiveness, embrace your embrace of immigrants and embrace state-funded education.

I think California, you know, California will have ups and downs.

As long as they have that desert, that ocean, the Hollywood bowl,

it's just an extraordinary state.

There's very few people that

drive from San Diego

to Orange County, to Laguna, to Los Angeles, to Zuma, to Santa Barbara, to San Luis Obispo, to San Francisco, to Carmel, and think, you know what?

I wouldn't mind living here.

This is just

a drive.

This one is extraordinary.

Like, you know, like a Corvette could be disastrous.

Oh, you know it.

We should do that.

You know it the most.

We should do a podcast.

You know it the most.

Yeah, it is.

I feel like, you know, definitely, my friends are like on their last legs there.

And I have a house there.

I miss it, but I miss it.

I really do.

Despite all the issues, I think it's really hard to, it has a draw that's very hard to explain.

And it's because it's, it's so like,

it's got a lot of possible, but there's definitely like, you're definitely like, good God, this is too much.

This is one too many.

You know, we'll see.

A lot of people did were like today, there was a lot of postings, you know, of those sort of apocalyptic Blade Runner photos in San Francisco, for example.

I'm just focusing on that because I live there.

I've lived there.

I live in DC now.

But,

you know, you see those photos.

and then today there were all these beautiful blue sky photos and everyone was like last week, this week.

And

they were happy.

They were sort of

had forgotten that, which is interesting.

So, and there is a really strong ability to slough things off.

I think it's a question of whether tech companies, having people, just specifically tech companies, having people in the same place,

despite this being a digital industry and everyone talking about work from home, et cetera, et cetera, et cetera, there is a thing about analog proximity that makes an exciting

culture.

And what you said before, the people who kept going, there's a reason that venture capital, the people who venture are in on the way.

It's in our DNA.

You take the biggest risk takers in the world,

left Europe, got on a barf barge called a boat for nine weeks, got to the U.S.

And then the ones that said, I'm willing to take more risk, kept heading west.

And I'm not only willing to take more risk, I'm ridiculously fucking hardy.

i can survive snakes and scurvy and well they didn't have scurvy but whatever whatever was killing them scurvy and then i could get past the rockies in a wagon

the people the dna the people ended up in california is pretty awesome dna or i am going to risk my life and figure out a way to immigrate here because I want to work hard and I want to make I want to make money and send it home.

It's like goddamn DNA of risk-taking, creativity, concern for family, wanting a better life.

It's just all of this.

It is more creative.

Oh my gosh, you're literally mating, like, I don't know, the two hottest, smartest people in the world.

It's like, it's literally, California is the army of offspring of Giselle and Tom Brady, and then throw in Madeline Albright for like empathy and IQ or something.

It's just, it's got the best DNA in the world.

How does California not survive?

We are pro-California.

We think we, you can't, we can, we can't

fix what is right with California.

That's like an old, what's right with America?

What's wrong?

There's nothing wrong with California that can't be fixed with what's right with California.

All right.

What state decided to had an elected official, an elected official who decided on the steps of City Hall to break the law and marry Kara Swisher and her first wife?

What other state would do that?

What other state would do that?

What other state would say, Kara, we are not going to deny you the same pain and suffering as the rest of us no we are not going to we are not going to deny you

and i'm getting married again construct invented by a bunch of dudes who didn't want i'm getting married again anyways don't get me started on marriage i'm getting married again really soon yeah you'll hear about it i know you are i'm doing the mini wedding i'm doing i'll hear about it i know i'm doing a mini wedding and then the big one you'll get invited to but the we're doing a mini wedding because we have to

That was the most backhanded insult I've ever had.

I'm kidding.

You're on the mass one.

You're on the big one.

You're on the big one.

Oh, wait, I get to miss the Zoom call with you and a bunch of dogs and your kids and their curling irons and their hot girlfriends.

I don't get invited to that.

Let me just tell you, there'll be no Zooming in this wedding.

There'll be no Zooming.

There'll be no Zoom wedding for Kara Swisher.

Thank you very much.

I've had the Russian vaccine.

I'm safe.

Listen to me.

You'll come to the good wedding, the one with the dancing, okay?

I'll bring vodka.

All right.

Oh, God.

I'm rethinking my invitation.

You have to not embarrass me.

Do you understand?

You and my mother.

We're going to put you and my mother at a table.

That's what's going to happen.

And then you virtue signal by just being, just being horrified at me.

Horrified.

I'm going to have a table of troublemakers and you and my mother will be the main

people together.

Lucky's a little fashion plague.

Me and Lucky will hit the dance floor.

Class up to joint a little bit.

Class up to joint a little bit.

All right, Scott.

One more quick break.

We'll be back.

Dr.

Swisher will give me a hard time.

He's become like my new dad.

He emails me when he thinks I'm out of line.

I know that.

I love it.

I love it.

My brother's hilarious.

He's in California speaking English.

All right, Scott, one more quick break.

We'll be back for predictions.

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Okay, Scott, it's prediction time.

I want you, I want a really good one.

You did well on Apple.

There's several we've done well on.

There's another one that was,

we were right.

We were getting credit for.

Oh, that people would drop pay of people as they moved out of the Silicon Valley area.

But that was, they were doing that already.

I don't feel like that was a prediction, but maybe you do.

So I'm fascinated by

one, I'd like to think the immunities are kicking in.

I wonder if CPHIUS is going to reject this deal.

But more specifically, I think a really interesting dynamic in the public markets.

Did you see the Snowflake IPO?

I did.

Tell me, talk about it.

I think it's really interesting.

Well, biggest software IPO in history, incredible cloud company, and in contrast

to another tech company.

Data storage, but go ahead.

Another, yeah, it's basically cloud for databases.

Another company that's trying to go public and take advantage of this froth around tech is Palantir.

And it'll be very interesting if the markets, how much sanity has crept into the markets, because everything that Snowflake is, 3,400 clients growing 150% a year, incredible path to profitability, great logo or client renewal, great dollar renewal, which are really the two things any business needs to look at, logo renewal and dollar renewal.

And we should talk about them more at some point.

But it kind of is the best of tech in the web.

And I think Palantir is the worst.

17 years and $3.5 billion spent to build a company that does $700 million in revenue and loses $500 million.

And three of its clients are 30% of the revenue, 120 total clients.

Very, if you think of it, Snowflake is like Google.

You can start small, see if it works, ramp up your spending.

Whereas Palantir is like a big ad agency that says you need three or 5 million bucks just to get started and it takes a ton of time.

It's really more of a services company.

It's more like an Accenture.

And if you look at the private markets, I'm fascinated with these secondary exchanges.

And I went on to figure out if I could buy some Palantir shares, how much it would be.

It's trading at 15 to 20 billion.

And most recently, they're making signals that they're going to value it at 10 billion.

So Palantir now has negative momentum and then the really really scary thing here kara that no one's talking about that no one's talking about but you and me so facebook arguably is a global operating system for the consumer world ex-China and the second most influential person and what has been the most damaging organization of the last 50 years is Peter Thiel.

And Peter Thiel is the founder of Palantir and is also proposing series or class F shares such that they control or he controls along with the other co-founder, Palantir, and their stated mission is to be the operating system of government.

So let me ask our consumers and our citizens and our senators and investors, do you think it's a good idea to have Peter Thiel

as the control, the second most important person at the operating system for consumer world, who wants to be the controlling shareholder for an operating system that figures out the algorithms behind camera surveillance and who gets targeted for FBI scrutiny?

It's sort of, you know, it's either like, okay, heads he wins, tails we lose.

It's this company financially is a fucking disaster.

They're trying to create distraction by being all secretive and spy versus spy.

And we are not like Silicon Valley.

Yeah, you're not like Silicon Valley.

You haven't learned how to be profitable.

And we have Peter Thiel is going to be who wants to be the controlling shareholder and most influential person in Facebook and now the operating system for surveillance.

What could go wrong, Kara?

What could go wrong?

So my prediction is the markets.

I think the markets get it right.

Similar to the fire door that got slammed shut on Winnerk,

I think the fire door is going to slam shut again on Palantir.

It is a shitty business.

I mean, a shitty, concentrated, service-like business that does not have the metrics of a SaaS company.

And it's going to be controlled by an individual who has arguably, arguably been the invisible hand behind Facebook.

He's been the only one that hasn't left the board.

And now he wants to be the controlling shareholder behind the operating system for our government.

Come on.

But Chuck, talk very quickly about the, because we have only a little bit of time, but of the economics of this.

You focused in on that, that

this is sort of everyone will not be able to read and understand

how it doesn't make money.

Well, you have a company that's 17 years old that's raised and spent over $3 billion

and can't figure out a way to be profitable.

It loses 60 cents on the dollar.

It spent 1.2 million on 750 million in revenues.

And

it's got 120 clients.

It's got terrible renewal rates.

So,

and also, I think it's some very bright people there.

I think some of the

some incredibly bright people, specifically every kid you know that got to level 20 in Dungeons and Dragons is working there now.

It's just incredibly,

I think it's got a strong culture.

I think they do good work.

I think at 700 million in revenues, it's worth what Accenture is worth, which is three to five times revenue.

It's worth $3 to $4 billion.

And also, I want to be clear, I like that Palantir has decided to do work for the government and said, we're not going to do work for foreign adversaries.

I like that, but it shouldn't be a company controlled by one man.

That's dangerous.

So this is a good company, but already they have negative momentum.

because they are not growing as fast as other SaaS companies and they're more, they have not figured out a way to get to profitability.

And then we have a CEO who claims to be a socialist who's paying himself $15 million a year.

Like I said, this company is the Rudy Giuliani of tech.

And I think the firewall has been triggered.

I think Snowflake is an example of an incredible SaaS company, 3,400 clients, an ability to start up with a low investment, incredibly scalable, built on better technology.

Palantir is built on old technology, which quite frankly has a lot of critics.

And they won't release the renewal rates in their dollar renewal because they're shitty.

A lot of people try to buy it.

They don't like it.

So Palantir or the stock?

That's the correct question.

It's going to be an interesting test.

If Palantir gets out and Robinhood traders just go, oh, it's Palantir.

It's got that weirdo Peter Thiel, who's also a crazy genius in terms of investor, and it gets bid up by kids in their basement, I think that's going to be another signal that we are in for a massive, scary correction.

If the markets do what they're supposed to do, I think the markets are going to get a taste of this thing and throw up all over the table and say, no, not here.

So it is an interesting test whether the halo of Snowflake brings brings Poll's power to

its way.

It's supposed to do a direct listing anytime.

It's supposed to do a direct listing, I think, in the next 30 days.

They should get it out before the election because then suddenly he's less powerful.

That's funny.

Again, you should be a journalist.

That's the right question.

That's the right question.

And that is the key to being the biggest asset here: Peter Thiel and his relationships with the administration.

And the biggest risk is Peter Thiel and his relationship with the administration.

Because do you think the Democratic administration is going to want to cozy up to Peter Thiel?

So

I think this guy has crossed the line of an effective oligarch that is now so close and his proximity to Trump has infected him.

And I think if a Democratic, Jack Dorsey and Peter Thiel have more of their economic wealth on the line other than Donald Trump, are more invested in Donald Trump and Mark Zuckerberg, more invested in Donald Trump's reelection than any individual.

That's the real prediction that I just dragged out of you.

All those companies.

We will talk about it our next show.

This idea of who's in trouble.

What do you think?

What do you think happens with Palantir?

Do you think it gets out?

What do you think?

I go to the economics, Scott.

I think it really is troubling that it can't make money.

But that doesn't mean it won't.

It doesn't mean that it shouldn't.

It's just that others are doing rather well in an area.

So I think they do a lot of hand waving around their secretiveness and this and their CIA background and their magic Peter Thiel sauce.

You know what I mean?

I think they do.

There's a lot of hand waving going on.

And by the way, Peter Thiel has had a lot of failures too, right?

He's done very well.

Like, let's be clear.

he's a brilliant guy.

I don't agree with him on a lot of things, but he's a brilliant guy.

But there's a lot of hand waving going on at this company.

And so it always makes, and it doesn't mean they don't have products that are worthy, but like, if you can't figure out a way to make money after all this time, when all the wind is at your back, including support of this Trump administration, I don't know what.

I don't know what.

That's how I feel.

Thank you.

Well said.

Well said, Carol.

Thank you.

Today's episode was produced by Rebecca Sonanis, our sound engineer is Fernando Finite.

Erica Anderson is our executive producer.

Special thanks to Drew Burroughs.

If you like what you heard, please download, subscribe, wherever you listen to your podcast.

My tobiopocronomon glossova wazza dono da trampa.

Oh my god, Kara, it's happening.

It's happening.