Vivek Wadhwa joins Jason to discuss the new iPad mini, Windows 8, Scott Forstal leaving Apple and discuss those affected by Hurricane Sandy. Jason also takes a moment to express his sentiments about Facebook and their Craigslist-like classifieds ads. Jason also unveils the new Launch Conference app! Lon Harris reads the news.
Narrator: Distribution provided by CoudSigma. The cloud that adapts to you. Visit CloudSigma.com/This WeekIn, for a free $200 credit.
New Relic Ad: Today’s episode of ThisWeekIn Startups, is brought to you by, NewRelic. Use promo code: TWIST and get a free month of NewRelic Pro. To redeem: visit NewRelic.com/ThisWeekIn, and see why thousands of developers, world wide, don’t deploy, with out it.
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Jason: Hey, everybody. Hey, everybody. It’s friday, so it’s the ThisWeekIn Startups News Round Table. Lon Harris is with us, to read the news. Vivek Wadhwa is here, to give us his insights. We have a huge week: Apple has a major management shakeup, Lucas has been sold to Disney, the Windows 8 Phone is out, the Nexus 7 phone and tablets are out. A lot is going on. YouTube’s redesigned. Stick with us. We’re going to talk about each of these items and how they affect startups. Right now.
TWiST title sequence.
Jason: Hey, everybody. Hey, everybody. Welcome to ThisWeekIn Startups. It’s friday. It is episode #302. It’s our News Round Table. We’ve got a lot to discuss, today. Lucas got bought by Disney. Apple fired half of the management team and moved their responsibilities around. YouTube redesigned. Nexus, Google’s new phones and tablets, are out.
Jason: Hurricane Sandy. A lot is here and Lon Harris. Welcome back, to the program, to read the news.
Lon: Thank you. Glad to be back.
Jason: How are you doing?
Lon: I’m doing great.
Jason: You’re not working at Ranker, anymore. You had a good run, there.
Lon: I had a good, year-long, run at Ranker. Ranker’s doing great. They were just in PandoDaily, the other day. I don’t know if you saw it.
Jason: No. I didn’t see it.
Lon: Yeah. They’re building readers at a very rapid clip and views are way up. So, things are going great there. I have moved on. I am now writing for What’s Trending.
Jason: Right. Which, is Shira Lazar’s daily show.
Lon: Daily, YouTube Live show. We go live, at noon, everyday. You can watch that and not miss your ThisWeekIn Startups.
Jason: No problem. How long is the show for?
Lon: The show used to be about an hour. We’ve tightened it up to about 20 minutes, now. We do, the, sort of, a daily count-down, of, here’s the best of YouTube, today, and then, interviews.
Jason: What was that decision to cut two thirds of the show? Was it, just, not tight enough? A, sort of, meandering or too hard to sustain, that much, content for an hour?
Lon: It was, mostly, a VOD (Video On Demand) issue. There was a dedicated, “live” audience, who loved the longer format, but, it was very hard to chop up 20 minute segments to make them YouTube friendly. Now, we do an opening, that can be, basically, a four minute YouTube segment, a middle segment, that’s maybe two or three minutes and a last segment that’s, maybe, seven or eight.
Jason: So, maybe, what we’ve learned over the last four or five years, of both of us, working on this stuff, is that’s it’s about VOD. Live streaming is nice, but it’s not what people want. Consumers want time shifting.
Lon: It’s a similar lesson to what, I think, we learned when I was at ThisWeekIn, where we would look at the live viewership always lagged and then, the iTunes viewership was where it was.
Jason: Yeah. People listen in the car. They listen at the gym.
Lon: Right. So, it’s the same with What’s Trending.
Jason: Vivek Wadhwa is with us. Of course, Vivek is just an excellent columnist and writer, who, I read everything he writes. Welcome back to the program, Vivek.
Vivek: Thanks for having me, Jason.
Jason: We have a lot to get into, with you. Especially, around the Apple changes. But, before we do, let me just take a moment and thank a new sponsor on the program, which, is New Relic.
New Relic Ad: These guys do a great job for us, in helping monitor our websites. If you’re in the startup business, you know you have to monitor your website. You want to make sure that it’s up and running and that it’s fast. Remember, Marissa Mayer, told me and many others, “Speed drives usage. If you don’t have speed on your website, you’re not going to have usage. One of the best ways to increase usage of your product is to increase the speed of your product.” How do you do that? If you can measure it, you can manage it, right? That’s what you hear about your weight. That’s what you hear about all kinds of things in your life: if you can measure it, you can manage it. That’s why I’m wearing this Nike FuelBand. I lost twenty-two pounds. Thank you, very much, Lon.
Lon: Oh. Doing well.
Jason: The Nike FuelBand didn’t do it. I did it, by, just, eating meat and no carbs. Anyway, putting that aside.
Lon: You had to cut off your Lance Armstrong band and replace it.
Jason: That’s a whole other story. We’ll get into that one, later.
New Relic Ad: But, listen. Hey, we only allow products on the show we use ourselves. We’ve been using this product and it does things like, your browser load time. Pull up my screen, guys. You can see, in this screenshot, the browser load time, the app, the network. You’re measuring on different levels. You’re measuring how long the browser takes to load stuff, the network, the pipe. You’re measuring how well your apps, also respond. Because, the software is, actually, a big driver of this. You have the network level, the software level, and the browser level. You gotta get all of that right and it’s complicated. That’s what New Relic does. We use it for the Launch Ticker, which, is crushing it, and for ThisWeekIn. Customers include, people like: SkullCandy, Spotify, Nike, Zillow, Vonage. You may have heard of some of these companies. Some of them are public. Some of them, I’m wearing their wristband. These are great companies and they use this product, cause it’s great. A really good price, too. Want x-ray vision into your web apps? Sign up, today and get a free t-shirt. Go to NewRelic.com/ThisWekIn. It’s fast and easy. No credit card is required. They made a t-shirt. This is an incredible t-shirt. Look at this, Lon. A fan came up with this concept. It, sort of, works off of the samurai thing. There’s the blade and it cuts the dot in the “I”, in half. Very clever. It’s going to be, only, for people who sign up.
Lon: I like the font, too. It’s like a throw back, 70s japanese movie, kind of font.
Jason: It is. I saw this and I, immediately, knew that this was going to win. All the fans on the TwistList, said, “This is the winner.” NewRelic.com/ThisWeekIn. Fast, east, no credit card required. Go get your free t-shirt. Let’s all thank them, on our Twitter accounts. Welcome them to the program and, just say, “thanks”. Thank you, @NewRelic, for sponsoring independent media, like ThisWeekIn Startups, which, is crushing it. I was out with the TuneIn C.E.O., the other day. It’s a Sequoia-backed company. They are crushing it. These guys are making a lot of money. He told me, just like the Stitcher Radio guys, we are one of the top podcasts. Top podcasts. And, the traffic’s huge. And, they want to talk business. A little “bidness”, going on. Speaking of business. It’s like audience development. I feel like the show’s respected.
Lon: It always was, but now, it feels like it’s crossing over into a more mainstream acceptance.
Jason: Absolutely. Now, I have my reality television… I signed off on a reality T.V. deal.
Lon: Finally. We’ve been saying that for many years.
Jason: But, it’s “shopping” deal. It’s one of the big firms. I’ll announce, later, who, specifically. You’ll know some of the shows they do (coughing: Pawnstars and Secret Millionaire) They do a lot of the big reality T.V. shows. They said, “Hey, you wanna do this?” I said, “I will only do it if I can own the show, with you and I’ll do it, if I’ve got final edit.” That’s it. Those are my terms. You know what they said?
Lon: Great. That’s like the Gordon Ramsey deal. What did they say?
Jason: “Yes, Gordon.” I was like, “Wow!” I got an agent at CAA. Who knows. Maybe, I’ll be on T.V., someday, doing what I’m doing here. No, it’d be a different type of show.
Lon: Startup Nightmares.
Jason: I’d give it a 5% chance. Startup Nightmares. Exactly.
Lon: Great concept.
Jason: What’s the first story?
Lon: Alright. We have to talk about these Apple management shakeups. Vivek was quoted in U.S.A. ,Today. Tim Cook announced, two high-ranking Apple executives have been sent packing. Scott Forstall, who was in charge of iPhone software development. Sort of, the head of the iOS team. And, retail head, John Browett, will, both, be leaving the company. S.V.P., Scott Forestall, led the iOS team. He’s going to remain an advisor to Tim Cook, until his departure, sometime in 2013. He had, originally, been considered something of a favored, to replace Steve Jobs, as C.E.O.. Clearly, that did not happen. Now, he’s going to be moving on. Jony Ive, reportedly, did not get along, well, with Forstall. There’s been the rumors: Apple’s management team not getting along. He will, now, head up hardware and software human interface. Craig Federighi, is going to oversee iOS and OSX development. There was, a lot of talk, that we’ll, definitely, want to ask Vivek about: the relationships and the dynamic among the senior management team. It was, also, rumored that Forstall had refused to sign an apology after the iOS maps debacle, a few weeks back. Which, may have led to this, as well. How do you think Ive is going to change Apple’s software? What does this say about the dynamic in Apple’s top ranks?
Jason: Nobody knows, exactly, what is going on, here. This is like, when you see a couple gets divorced, or, a business breaks up. The VCs and the entrepreneur no longer want to work together. Whatever it is. Nobody knows, exactly, what happens. You can speculate, but, you don’t actually know, because, a lot of things occur in private. We can speculate, but, we don’t know. Then, I guess, if we’re speculating, specifically, with Scott Forstall, there’s been rumors that he’s hard to get along with. Sound familiar? It was considered that he and Jony Ive are the guys who Steve Jobs, really, curated. But, Steve could manage these folks. It feels like, maybe, Scott had a little, too much, Steve in him. Then, people don’t want to treat him like Steve Jobs. So, then, what happens is Tim Cook is trying to keep the other guys, here. He has to make the decision, “Who can I afford to lose?” If you look at it, you can’t lose Jony Ive. You can’t lose him. This is the guy who is the design genius, which means, he designs the company. Now, not signing… I thought that this maps thing… I don’t think that they should have apologized. What they should have done was allowed Google Maps to, still, be there, launch their product and then, switch to it as the default. They could have said, “We’re going to put Google maps back.”
Lon: Or, at least, give the option: you can choose which one you want.
Jason: I just think that it’s kind of weak to apologize, like that. Now, I guess, the question becomes, Now that these changes have been made, and we don’t know why. It sounds like Tim Cooke wants to have peace. He values management peace. He values, a certain, peacefulness with the media, with the leakers, with the supply chain. These are all things that Steve Jobs could care less if he was at war. Steve Jobs was at war with the supply chain. He was at war with the press and the bloggers. He was at war with the leakers.
Lon: You get the sense that he thrived, a bit, on conflict.
Jason: He loved it. If it meant conflict, it meant that things were moving forward. Tim is a more even keeled guy. So, if you’re a shareholder of Apple, which one do you want? I think that both have their pros and cons. If you have total complete chaos, there’s a chance this thing could come off of the rails. If you have, too much, tranquility, there’s a chance they couldn’t innovate. Vivek, you’ve got a lot of thoughts on this, what do you think?
Vivek: First of all, what you’re saying is a normal transition. When you have a dictator or king that passes away, the people who come to power, battle each other. The dictator, always, has his or her favorites, and, those people are the ones who take the most fire. The management stuff is 100% predictable. What I want to question is, Apple itself. We duel over every little feature, as if, it’s real innovation. Where’s the innovation. Where’s the last major big break through been, since, the iPhone 1, came out? It’s the same thing. We keep adding some nicer icons, we’ll make the processor, a little bit, faster, add some more memory, and then, say “Ooh, Aah, Wow! Look at this.” Jobs used to go on and give a remarkable presentation and everyone would, sort of, bow down and say, “Yes sir, yes emperor, this is really, true innovation.” But, the fact is that, without Jobs, being able to do that, people, like me, are going to start speaking up and saying, “Hey, the emperor has no clothes.” That is the risk to Apple, right now.
Jason: You think the risk is innovative new products, not management turmoil? Is there not something more innovative than a faster phone and a smaller iPad?
Vivek: Look at the Connect. Very nice innovation. Then, you have Leap Motion. You have a bunch of gesture based devices. Right now, at, Sharper Image, you can by these projectors that can clip onto your iPhone. Why isn’t Apple delivering break through innovations, like that? We were expecting the Apple TV, that would be voice controlled and have all of these magical things. Where is the God damned Apple TV? Where are all of these innovations that we were expecting? All we are getting is another iPhone, every six months, which, is slightly better than the old one.
Jason: I do have to agree with you and, perhaps, disagree, on one level. Because, it does seem like it takes them every three years to put out an innovative product. With the time between the iPod and iPhone was years, 4 or 5 years. Then, the time between the iPhone and the iPad was a couple of years. It was two and a half years ago that the iPad came out. So, it feels, that to put out a totally revolutionary product might be a 3-5 year cycle for them.
Vivek: The iPad was just another iPhone, with a bigger screen.
Jason: No. The iPad is a unique experience. They have sold 100 million of them. You can’t just say it’s a bigger iPhone.
Vivek: It’s just a bigger iPhone. It wasn’t as revolutionary as the iPhone, itself, was.
Jason: You could argue that the iPhone was a better iPod with a bigger screen. Double the screen of the iPod and add a phone. You want the game changer. I would argue that the iPad was a game changer only because, it changed behavior, so much. If you catch my drift, there. People started watching videos, for example. They wouldn’t watch videos on their phones, except for short YouTube videos, but, on an iPad, you’d watch a movie. I do believe the iPad was revolutionary.
Jason: In usage. How people use it. It is… yes, it’s a big fat iPhone, agreed. But, I also think that some categories, one of the things we’re seeing… Vivek, I’m interested in your feedback on this, that, there’s so much competition, right now. That the race to perfecting a new device is, sort of, halving. I don’t know if we can call this Calacanis’ Law. Maybe, I can get credit for something, finally. But, the time between reaching perfection, 90% of perfection, is shortening by, you know, whatever, 10% a year. Because, look at the iPhone 5, as a device. That is the perfect smartphone. So, is the Galaxy phones that have come out, from Samsung and the Windows phone from Nokia. I don’t think there’s anything left to do with a phone. Like, I think, they’ve reached the 85/90% complete mark. With iPads, I feel like the same thing. They’re two and a half year old tablets and it seems that nobody’s got anymore ideas and they’re as good as they’re going to get. The iPod, itself… The iPhone took five years till perfection. The iPod took, maybe, 6 or 7 years till perfection. The iPad only took two and a half years. Is the product perfection cycle accelerating, Vivek?
Vivek: It is. You’re, absolutely, right. You’re making some very good points, over there. What we should have had, right now, with the iPad, we should have had a Minority Report-type, of gesture recognition system. MicroSoft rolled it out several years ago and the Connect became a runaway hit. How hard is it to embed some of those technologies into your little iPad devices and come up with new ways of looking at it. Then, they say that the projectors. What about those. Then, the basic iPad, itself. The biggest threat to Apple is, really, a device like this. This looks like the iPad mini, to most people. It’s only $35. One tenth of the price.
Jason: By the way, add a zero and it’s this device. You’re holding a device that looks, exactly, the same. Pull up your web browser.
Vivek: I don’t have internet connectivity.
Jason: O.K. I was about to say, if you pull up the New York Times and I pull up The New York Times, right now, on our mini 7″ tablets, I’m guaranteeing you there’s very little difference in the experience.
Vivek: There’s not much difference, at all. In fact, if you’re one of the one billions of people, who’ve never used a smartphone, before, and you get this for a tenth of the price, there’s no, even, looking at Apple. This is what is going to kill the market. This is a very slick little device.
Jason: Now, that’s the one from India. What’s the name of it?
Vivek: It’s made in India. It’s the AAKASH. It’s being made by DataWind, a Canadian company. It’s being made in India, by them. But, the point is, that there will be an entire generation of these from the Chinese and everywhere, which, are below $100. How is Apple going to justify it’s $300 price?
Jason: Wait a second. I’m on the UbiSlate site and it says that it is $3,499. I see it, right there, Vivek.
Lon: You gotta get your mental Rupee calculation.
Jason: Oh, that’s Rupees. I get it.
Vivek: It has a GPRS chip, built into it, which means, you can also use it as a telephone.
Jason: Is it subsidized by fifty bucks or thirty bucks?
Vivek: That’s the list price.
Jason: No. But, I’m saying, is the government subsidizing them.
Vivek: The government is going to sell them for $27, or so.
Jason: Oh, wow! See, I had been speculating that tablets will be free. I think it’s only a matter of time before Amazon… right now they’re at $199 and so is Google. I think Google should give a tablet, if you buy a 3 year license or if you pay a 3 year Amazon Prime, in advance, they should give you the tablet for free. Cause, just think how that would spur tablet usage. I don’t understand these stupid technology companies, with these huge balance sheets and they sit on the money, while the race is going to Apple. You have to make much more dramatic… this is a message to Larry and to Jeff: “Guys, step on the pedal. Tablet computing is a big “F”ing deal.” BFD, as I tell people. It’s a big franking deal. Why not give it away. For $149, you get 3 years of Amazon Prime and you get the device. You cares if you lose $100 million. Do you think they should do that, Vivek, if you were running one of those huge companies?
Vivek: It’s going to happen, regardless, of what we say, here. Because, these devices are going to find their away into The United States and they’ll be priced at $50-$60-$70. Then, someone will say, “Hey, if I can have my little ads running over here, I can give it away for free.”
Jason: Why isn’t it here? Why isn’t UbiSlate here?
Vivek: This is just coming out of India, this month. The original version of this was not very usable. It’s just rolling out, literally, this month. November 11, is when they’re first releasing it in India. So, we have to look forward to next year.
Jason: They gotta get these in The United States. If they get these in The United States, can you imagine?
Lon: Everybody will have one in each room of their house.
Jason: They’ll become like remote controls. Two things to summarize: Vivek, makes a great point: we have not seen the game changer from Apple since the iPad. He debates it’s the iPad. I’m going to respectfully, disagree with him. I think that the iPad was very revolutionary. Anything that sales 100 million copies of the first version has to be revolutionary. But, they do have to get something out. I agree whole-heartedly. Where is the hell is the Apple TV? That is… you know what? He’s coming out with it. I think, he didn’t want to confuse the market with too much product and they’re trying to maximize. I think, Tim Cook is such a ‘wonk’, in a good way, when it comes to managing the supply chain and managing stuff, I bet you, if Steve Jobs were alive, today… rest in peace, Steve… he’d be like, “I gotta get something out.”
Lon: And, he wouldn’t have done iPad mini, right?
Jason: Given the performance. Given that they are selling a million of these Nexus 7s a month, he would have. Because, he would have not wanted to see them chip away at the franchise. So, he would have had to, I believe. But, he would have gotten that TV out, by now. I think what Tim Cook is doing is managing… again, he manages for peace and predictability. So he says, “Why should I confuse the market? If people are coming into the store and they have $500 to spend, sell them this (iPad mini) or an iPhone 5. Why are we going to put a third option out there?” They want to pace it. What’s the rush? “I get, a little, more time to polish off. There’s going to be so much scrutiny on it.” Let’s go to the next story.
Lon: Alright. While we’re staying on the tablet market: Google’s updating its Nexus 7 tablet and adding a 10″ tablet, the Nexus 10. It’s going to be the first Nexus tablet to directly take on the iPad. As well, the company has announced the Nexus 4 phone, which, will replace the Galaxy Nexus. All of these new products will be available, November 13. I’ve got the specs on it, here. The Nexus LG, 4.7″ screen, wireless charging, and can take 360 degree panoramic photos.
Jason: Wireless charging? Wow. I didn’t know that it had induction charging.
Lon: Yeah. It comes with an inductive charging dock.
Jason: No! The 10, wow.
Lon: That’s the 4. 8GB for $299 and 16GB for $349. No LTE. Nexus 7 is going to be 16GB for $199, it was $249. Sort of, taking the price down, a little bit. Then, the Nexus 10, by Samsung, is going to be the highest resolution tablet on the planet. The battery last nine hours and 500 hours of standby. That’s going to be $399 for the small version and then, $429 if you want the big. I guess the question would be, if the Nexus 4 tanks, who’s fault is that, Google or the control freak carriers? How competitive do you think these Nexus tablets are going to be? Feature and price-wise against Apple and the iPad?
Jason: This is a blunder. Listen to me. Listen!! It’s a huge blunder to not have LTE on a phone. Anybody with LTE, what’s happening, right now, is you go to a bar or your schoolyard or you’re at home, and somebody says… this literally happens, now, “Hey, did anybody see that YouTube video: Gang’em Style?” and four people take out their phone and try to get to it. The person with the LTE has the HD version loaded before the 3G person even has YouTube’s logo loaded.
Lon: I think, that’s very astute. That’s what people are looking for. Those little things.
Jason: It’s about the speed. You cannot watch… Listen!! Please, listen, Google! LTE is the most game changing mobile feature. If you don’t have LTE, throw the device away. Put is on the ground, on the side of the curb and smash your goddamn phone into pieces, if you don’s have LTE. Do it right now. If you hear the sound of my voice, put your phone against the curb and crush it. Tell them that it got ran over, get the insurance, and then… I’m not telling you to do insurance fraud, but do insurance fraud and get on LTE. Vivek, am I right or am I wrong?
Vivek: I won’t endorse the insurance fraud, but you’re making a very good point.
Jason: Do you have LTE or not?
Vivek: No, I’ve got a 4S and it’s pathetic.
Jason: Have you seen LTE performance, or have you been with someone who’s pulled out LTE and showed you how fast it is?
Vivek: I’ve heard about it. I’d love to get it, as well.
Jason: It’s unbelievable. I hated Verizon. This is a message to Ivan, from Verizon: I hated your company, for so long. Hated, hated, hated Verizon. Hated that company. Terrible company. Terrible service. Just price gouging, everything horrible… you know what? I love Verizon. If someone asked me, “What’s your favorite company?” Now, it’s Disney and Verizon. Because, I now, get 20mb, going down the 405 freeway. 20mb. I’m driving in my Tesla, with the 3G connection in the dashboard…
Lon: You’re not using your phone, while you’re…
Jason: Of course not. I was in an Uber. I’m in an Uber watching NetFlix, watching YouTube in HD. It’s unbelievable how fast it is.
Vivek: Talk about your Tesla, for a second. How is that?
Jason: It’s incredible. I took a friend of mine out, last night, for a ride. I took Ev Williams out for a ride. I took Chris Sacca out for a ride. Both of them ordered the car, the next week. Everybody who I take for a ride, orders the car. Everybody who’s got half a brain, who gets in that car… it’s so fast that to have a sedan go as fast as a Porsche or a Corvette… it’s shocking to people as to how fast it is. Then, you have this beautiful technology in the there. They’re doing over the air updates. It’s a flawless car. It just won “Car of the Year”. Then, to hear Mitt Romney call Tesla a loser? They’ve got 12,000 ordered. The company hits profitability, or from what I understand, they’re going to hit profitability, any month, in the news they keep speculating. And, the car wins “Car of the Year”, from Automotive Magazine. How does Romney, who is supposed to be a pro-innovation jobs guy, then say that Tesla’s a loser. He’s never been in the car. It rings so ‘douchey’. I hate to use that word, but it’s so ‘douchey’. It would be like saying that the iPad or iPhone is a terrible product. It creates this dissonance, when a political candidate says that a product’s a loser and, then, you know it’s not, cause, you use the it everyday. I drive it everyday. I’ve driven the other one for three years. When you say that, if makes me think that you’re a fraud.
Lon: Mitt Romney is fraud. Let’s just put that out there. He’s building this big case against all of these, sort of, green technologies that Obama’s been supporting and he made a tactical, huge, error of including that in, like Solyndra, and all those companies that people don’t like.
Jason: It’s like saying, “Oh, my God. MySpace and Facebook are huge losers.” Whoa! MySpace, yes, they lost, Facebook won. Greatest success story. “Oh, yes!” InfoSeek, Lycos, and Google are disasters.” Wait. InfoSeek and Lycos did die. I think they did. This is a huge winner. What do you think, Vivek? Of this Romney nonsense.
Vivek: I agree with you, on this one. But, after hearing these things that he’s said, I’m like, “Oh, my God,” he’s so far off base that it ain’t funny.
Jason: It’s almost like, somebody’s handing him notes.
Lon: That’s exactly what it is.
Jason: Like, “Be passionate about this.” And, he’s like,”O.K. I can play passionate about that.”
Lon: I think it’s just a lack of understanding. They’re just looking at all these names of companies and lumping them together.
Vivek: Look at solar energy. Yes, Solyndra was a disaster but, to attack ‘solar’. Solar is dropping and we’ll all be living in solar-powered houses, by the end of this decade. That’s another amazing technology that is getting a bad rap because of dirty politics.
Jason: It’s dirty politics. If you’re in the technology industry and you’re backing Romney, I just think, you’re making a huge mistake, because the guy doesn’t get it. Technology is the most important thing. If he doesn’t get that, what else doesn’t he get? I’m not a political guy. I’m an independent. I’m, sort of, like, Bloomberg. But, like Bloomberg, I’ve come to the conclusion, “Romney, douche.” At least, with Obama, I do think that Obama, sincerely, cares. I think he’s going to charge us too much on taxes. I don’t agree with ObamaCare. I think that was poorly executed. I’ve got my issues with the guy. I’ve got my issues. World politics is not one of them. Look at the ‘S’ show that he has inherited. The “sugar” show that he inherited. Then, to lie… like, every month, we see job growth. The percentage of unemployment go down. Then, Mitt Romney is adding up every possible statistic of unemployment and packaging them together, as if, it’s a total, complete disaster. But, we see a chart of the stock market rallying and a chart of job growth and unemployment going down. You can’t argue with facts. Facts matter. It’s so bizarre. I don’t mean to get into politics. You’re an independent, I take it, Vivek?
Vivek: I’m, more or less, where you are. I’m dead center. Actually, I was leaning Romney, because I was unhappy with Obama, particularly, on immigration. But, after hearing these mindless attacks on Tesla, and a lot of the other stupidity that I’m hearing, I’m back in the center, again.
Jason: Well, you’re like me, right, Vivek? You want to prevent gay people from getting married, prevent women from making choices about their bodies, and give all the rich people tax breaks, right? That’s what you’re into?
Vivek: Right, exactly. Women should not be allowed in the tech world.
Lon: Romney hasn’t made a case. Here’s why you should vote for me. It’s like the same plan we’ve been hearing from McCain and Bush. Like, lower the taxes on everybody. Be meaner to China.
Vivek: Women, belong in the home. That’s the way it used to be and that’s the way it should be, again.
Jason: I want to talk about Lucas and Disney, in a moment. First, I just want to tell everybody: we have a huge announcement about the Launch Conference at the end of the show. SourceBits has helped me build an app. They’ve agreed to be on the show, today, after the news. Talking about the app. This is a revolutionary app, that SourceBits, and I, are making that is going to change the face of crowd funding and events, for ever. Stick with us. Thank you, SourceBits, for sponsoring the show. Give us the Disney story. This, I’m loving.
Lon: Disney acquired Lucas Films. That includes, not only, the Star Wars franchise, but, all Lucas Film properties, Lucas Arts, the video games, and Industrial Light and Magic, and SkyWalker Sound. Total sale price tag was $4.05 billion. Lucas has pledged that he is going to donate, most of the money that he made… he owned 100% of Lucas Film, by the way… to education charities.
Jason: That’s the way to own a startup.
Lon: The deal involves three new Star Wars films, which, is going to arrive in 2015. Lucas is going to be an advisor, but, he is turning it over, he said, “It is now time for me to pass Star Wars on to a new generation of filmmakers.”
Jason: Thank God.
Lon: Star Wars is, also, going to be integrated deeply into T.V., theme parks, the whole shebang. Disney, previously purchased Pixar for $7.4 billion, back in 2006 and Marvel, very memorably, for $4 billion in 2009. So, what do you think of the terms of this deal, $4.05 billion? Who should direct the new Star Wars film?
Vivek: My heart bleeds for the guy and for Jason. What do these rich people do with all of this money? Going on buying Teslas and other fancy cars.
Jason: You can drop about three zeros off of what he’s made.
Lon: It’s $4.05 billion more of what he’s made, already. Some Scrooge McDuck style pile he had.
Vivek: But, when you have the kind of money that Jason does, what difference does one or two billion make?
Lon: What’s a billion, between friends?
Jason: Please. I got a lot more work to do. This is fantastic. Disney is a great company. I’m very bullish on Disney. I’m going to buy a lot of stock in Disney. These guys have crushed it. Being able to acquire Marvel, Pixar, and Lucas. All in the same three year period. It’s extraordinary.
Lon: From ’06 to 2012. So, it’s six years.
Jason: It’s unbelievable, what the run that they’ve gone on, is. I love the idea of making the new films. I love the idea of George Lucas, most of all, not doing it. On a technology basis, what this is going to allow for is… Disney never made a big run at the internet. They’ve had, like, the Disney Internet Group, they’ve done O.K. Blocking and tackling. Singles and doubles. But, let’s face it, movies, and licensing, and the parks, have been juggernauts. They could be an internet juggernaut. They could be as important to the internet as Facebook, Google, Yahoo!, certainly, and, AOL. They’re not, yet. They need to focus in on the internet side. Big time! Star Wars is a top property on the internet. If you own Marvel and Star Wars and ESPN and all of these things, they really need to focus in on this stuff.
Lon: They’ve got so many of the greatest creative minds in the country, together, in one place, under one roof. It sort of boggles the mind.
Jason: Why don’t they have a top 20 site? They gotta get a top 20 site.
Lon: I think, the GO.com thing seems to have thrown them off for a decade.
Jason: For two decades! And, I think people would, really, like to get into Star Wars. Get inside a brand, like that. You know, to get more inside of something.
Vivek: The Disney brand is so powerful, that they can build on that and, now, get into new domains. People trust Disney. You think Disney, you think motherhood and apple pie. This is a great strategy.
Lon: It was interesting to me that a lot of people… the internet, the immediate reaction was, like, “Oh, they’re going to make it, real, kiddie, and everything is going to be dumbed down for the Disney audience. I think that people forget that, so many entertainment properties have come out of Disney, that are not branded with that Walt Disney Pictures, sort of, vibe. They had Miramax, for years, all these Pixar movies. The Avengers.
Jason: Can you imagine if you could go to a website and just get inside of Toy Story, everyday?
Lon: Like, Inside Toy Story. Inside Wreck-It-Ralph.
Jason: Yeah. You, just, go inside that topic.
Lon: Sure. If only somebody had some maps.
Jason: Somebody had some strategy to get inside of these topics. If somebody had an aggregation ability to aggregate and curate all of these topics. Next story.
(Whispering: Call me, Bob Iger.) Call me, Bob Iger. I met him at a Laker’s game. Nice guy.
Lon: MicroSoft. We gotta talk about them. Unveiled the latest iteration of it’s Windows 8 Phone. New features in the Windows Phone 8 operating system, new Office is pre-installed. You get immediate access to docs. It, also, has native Skype and Yammer integration. Facebook photos can be displayed on the lock screen. Data Sense monitors and optimizes your mobile data usage, against your carrier limits. Pandora comes with a year of ad free music, and there’s a kid’s corner function, limiting the apps that your kids can access. Which, has been very popular amongst parents. Which feature impresses you most? Will this help MicroSoft to catch up to Apple and Google?
Jason: Vivek, MicroSoft, toast, not toast?
Vivek: Nyet, nyet, nyet. MicroSoft is toast. They missed a big opportunity, over here. Because, they’re trying to protect their enterprise monopoly. They think that it will carry over into this new world. Therefore, Windows 8 pricing is ridiculous. If I was running MicroSoft, I would start thinking forward, “My competition is Google, now.” It’s not anyone else. I would give Windows 8 away for free. It looks nicer than Android. Windows 8 got some nice things about it. If they gave it away for free, it would be on these devices that I was talking about. It would have Windows 8 on it. You’d have a billion, two billion, three billion of those. Then, you can charge subscriptions for Office. Right now, on these devices, three billion new devices are going to have Google’s Android on them.
Jason: By the way, Vivek, before Android was out, weren’t they just pirating the “sugar” out of Windows, anyway, in the developing world?
Vivek: Yep. Absolutely.
Jason: It was just being whole-sale stolen in China and India and other places.
Vivek: Now, it’s all Android. Everyone has moved their entire operating systems over to Android.
Jason: Because, it’s free.
Vivek: Because, it’s free. It’s legal. Yeah. They’re going to be doing Google searches, Gmail, buying Google Apps, Google, Google, Google, all the way.
Jason: This is where Vivek is a smart guy. Why I had him on the program. He’s so right. First, they get Android, cause it’s free. They’re into the ecosystem. Now, Google has their hooks in. Then, they say ” you know, maps integrates, Gmail integrates, Google drive integrates, and Google Office integrates.” All of this “sugar” integrates, perfectly and flawlessly, with Chrome, which is in Android. It all works, together, so simply. So, what are the chances that someone is going to say, “You know what, I’m not going to use the GoogleDrive. That’s at a bargain basement price. I’m going to install SkyDrive.” MicroSoft has to be bold: put out Windows 8 for free, let anybody use it on any hardware, and, then, what they should do is, if you want it supported, if you want the drive, if you want the extra space on HotMail, if you want Office, then charge for that. Could they not make it free in those developing countries, as well?
Vivek: Absolutely. Because, they’re competing with Google. They would have everyone on MicroSoft’s platforms, upscaling from it, using Office. You want to, now, install the next version of PowerPoint, you pay MicroSoft $5. There’s so many opportunities that MicroSoft has, here. We’re on the verge of this media revolution. Two to three billion new devices coming online over the next few years. It should have been MicroSoft devices. At least give Google a run for their money. Right now, Google is going to own the world, because of MicroSoft’s stupidity.
Jason: And Apple, to a certain extent. Because, they want to protect the margins. The percentage of devices, I saw Android is 75% of the smartpnones, now. Is that right? On a global basis.
Vivek: And, it’s going to be 100% at the rate that they’re going.
Jason: In The United States, it’s not as profound, but on a global basis… in China or India, how many people are going to have iOS or Windows?
Vivek: There are 911million cell phones in India, right now. When these devices come with the cell phones built in, at $35, you’ll have 911 million of these, just, in India and a billion in China, and they will all run Android. So, which means, they’ll be doing Google searches, Google this, Google that, versus MicroSoft. MicroSoft is going to lose the war, trying to protect it’s tiny little turf.
Jason: Makes no sense.
Lon: What’s their thinking there. Obviously, you have people at MicroSoft who know this.
This is the classic innovator’s dilemma. It’s an innovator’s dilemma. It’s crossing the chasm. You have this existing business, that you’re protecting, that’s throwing of massive earnings that keeps MicroSoft a $100 billion plus company. Then, Google has taken those franchises and run them down to zero costs or negligible costs. You know what, MicroSoft took NetScape’s business, the NetScape browser, and made it free, with IE. This is how you do hardcore warfare. You, just, absolutely, annihilate the other person’s margin. What is happening to Apple? Android is annihilating the iOS market, by saying the operating system is free. Eat all you want. HTC, Samsung , and these other vendors are producing world-class products. Better phones than iPhone. They might not be better on an aesthetic basis or as a package, with the complete app ecosystem, but anywhere down the line, Samsung’s phones are always a couple of months ahead of Apple’s. They had LTE a year before, they had bigger screens two years before. They’re always going to be ahead. But, as a full product, yeah, sure, iOS, plus, their hardware is a better device, better industrial design. But, I’ve picked up one of those Samsung phones. Oh, my God. They’re gorgeous, They’re stunning. Stunning successes. So, this is going to be very interesting, what Google’s doing. Everybody’s going, “Facebook’s going to kill Google.” How did that go, Vivek?
Vivek: No race. Google has just started, right now. When they start getting the billions of users, they’ll bring Google+ back. I’m still optimistic about Google+. I’m pessimistic about Facebook, by the way. Facebook, right now, is under so much pressure, to increase revenue, through advertising, when people want to be in private, gated communities. Google+, still, has a lot of mileage to go with it. Now, with Android winning the tablet wars, Google is going to dominate. Google is going to be tomorrow’s MicroSoft.
Lon: Speaking of Google+. We, also, have a story about Facebook ads, if you want to talk about that, next. We’re going to talk about the YouTube update, as well as, Gmail has an update. They’re making them look more like Google+. They’re integrating the Google+ posting design.
Jason: The Google+ design is beautiful. It’s a beautiful design. Have you seen people talking about… I have to find it. Give me a second… DangerousMinds.net did a story about the Facebook stuff. They’ve been really talking about, what I’m calling, “Facebook’s Double Taxation”. Which is, you paid to get your friends to follow you there, or you brought all of your friends there. Now, if you want to reach them… here it is, “Pay Facebook to promote this or the dog will die.” You have to pay to promote your stories to your own followers. That would be like, if MailChimp said, ” Oh, you have 10,000 followers. I’m going to charge you to reach them, again.”, you know, these are your followers. Or like Twitter, said, “Oh. You want to tweet to your people, they’re not going to see your posts, unless you pay us, again.” It is such garbage. Their double taxation is unbelievable. What do you think about it?
Vivek: Facebook is getting itself into a lot of trouble. People are going to begin to resent it more and more. It’s under pressure to increase it’s revenue. Their IPO was the worst thing that could happen to it. The arrogance and the IPO strategy is all screwed up.
Jason: So, you think that the IPO arrogance led to this downfall and now they’re in a desperate death spiral to maximize revenue to get that stock back up. And, by the way, climbing back, when you lose 50% of your stock value, you’ve got to climb back, 100%. Let me say that one more time. You lose half of your stock value, you go from $40 to $20, like they did, to get back to $40, you have got to grow 100 %. It’s twice as hard to dig yourself out of the hole, as it is to fall into it. When people start making stuff like this, where, they make goofy caricatures of you, and people say, “I want my friends back.” Like, this “I Want My Friends Back!” campaign. Mark Cuban tweets, “I’m done. We’re going to put everybody on Tumblr.” Look at this: if you want to do your blog post and get to people, these guys calculated what it’s going to cost them, it’s going to cost them $672, 000, a year, to get to their friends, that they built. I said it, when they were doing it, I said, “anybody who invests in these Facebook pages, to get followers, and we tested it, here at Mahalo. We spent about ten grand, doing it. And I realized: we have about fifty thousand followers our learn guitar page. 4,000 people see it. Less than 10%, 8%. Then, like, 1% percent of those, like 40 people or 80 people, wind up clicking through. I’m like, this makes no sense.
Lon: Yeah. We used to see the same thing at Ranker. Where we’d have tens of thousands of friends, but, then it would say that your posts’ impressions were like than 1500 people.
Jason: So, people understand, technically, what is happening is, people got to, let’s say, 100,000 followers. When they post to their page. When you go to, like, Facebook.com/JasonCalacanis, ThisWeekIn Startups or Ranker or Nike. You have 100,000 people. You paid to get those 100,000. You expect, when you post to your wall, if they follow you, they liked you, they would see it. Every single one of them. That’s what the deal was. Then, they said, “No,no. We’re going to make this news rank, like EdgeRank, where if the post is not “worthy”, what ever that means, it doesn’t show up. But, if you get a lot of comments, it does. Then, for somebody, like, George Takei, (imitating ” Hey, now. Oh, my.”)
Lon: (imitating George Takei) “Oh, my.”
Jason: Very well done. George Takei, posts all this viral stuff. He is like, “What going on? Nobody’s gets my stuff, anymore.” So, then he says, “Everybody comment and like on this, so that you can see it.” Because, he knows that you have to get 50 people to comment or like something for it to show up on everybody else’s. But, that was not the original deal. I think that Facebook perpetrated an actual fraud on people. And, that there is a class-action lawsuit, that is going to come, for: I invested in getting my friends and now, I can’t reach them.
Lon: It’s a bait and switch.
Jason: It’s a blatant bait and switch. So, then, what they do is, say, “O.K., now, you can only reach X number of people, but if you want guaranteed reach, pay us.” I just paid you to get the 100,000 followers when I put the like button on my site. “How many times do I have to pay you?” is going to be the question. I think that this is the end. Look at this. So, if you want to get this to, reach 17,000 of your followers, $75. 22,000 of your followers, $100. Reach 41,000, it’s $200. And, no one calls it anti-trust? I think DangerousMinds has nailed this.
Lon: It’s funny, in a weird way, it’s, a little bit, like what people were accusing Yelp of doing. Remember, they were saying, if you… Yelp, then, they’d put nicer reviews at the top.
Lon: Basically, rearrange how the searches work. This is, basically, the same thing. If you pay us, we’ll make sure everyone sees your posts.
Jason: As he’s saying in this piece, “Google can, absolutely, crush it by saying, “We will never charge you to reach your followers.” And, Facebook is moved your cheese. Mark Cuban, says, “We’re done. We’re going to push everybody to our Tumblr and to our Twitter.” Why should we do this. It’s a disaster for Facebook. Is it not, Vivek?
Vivek: Absolutely. I’ve said, several times, that, “The IPO was the worst thing that could happen to it, it’s making them, now, do stupid things.” They’re going to alienate their users, more and more. The users have more and more options. It’s a losing battle for Facebook, right now.
Jason: It’s unbelievable.
Lon: And, they have Craigslist ads, now.
Jason: Now, they’re copying Craigslist Ads. Remember I said that it was unproven if advertising would work in social networks?
Jason: I said, five or six years ago. Somebody, said, “Oh. It’s a $100 billion company.” I said, “It’s a long way to go, before Facebook becomes a $100 billion company.” But, then, it started, trending that way. Now, it’s back down to a $50 billion company, that people hate. Marketers. Madison Avenue is up in arms about this. People on Madison Avenue, from my sources, are telling me, that Madison avenue is protesting. They’re like, silent protests and people, really, handing it to Facebook. I think, that if you look at the whole history of Facebook, it’s been “Don’t trust us, don’t trust us, don’t trust us. But, we have a billion people, so you have to participate.” Well, you know what? You don’t have to participate. You can go to Tumblr. You can go to Twitter. You can go to these other sources. This idea that you “have” to be on Facebook, you “have” to be on Facebook, is, absolutely, not true.
Lon: Well, the idea was, always, that’s where people are. But, now, people are all over the place. And, mobile. Are people using the Facebook mobile app, everyday?
Jason: That’s the thing. Now, that you have mobile, you can route around Facebook.
Lon: Now, you have another way to reach everybody.
Vivek: Another perspective, over here. As we saw Google grow up. It was, always, into doing good. It could do no evil. Like, in Silicon Valley, you see Google, everywhere, they’re, always, contributing money, they’re providing support. They’re doing good for the community, and so on. Facebook has never done that. The only thing that they’ve done recently is, this organ campaign, and they’ve got a lot of publicity for that. But, Facebook has never been into social responsibility or trying to win over the community, or trying to win over its users. They’re not into doing good. It’s always been about Mark Zuckerberg and his ego and his money and his arrogance, basically. It’s never been about the users.
Jason: Yeah. It’s about how much can he get away with. That’s been… if you look at Mark’s career, it’s been, how much can he get away with? How much could he screw his partners, on the original business? How much can he screw the Winlkevoss? Now, it’s, how much can he screw the advertisers, in his own system. It was, also, how much can he screw his users. I mean, the thing that got me crazy was, a bunch of these young gay people, who were at a college, were in a gay glee club, chorus. This is just heartbreaking. It’s hard enough being gay, in this society. One of the students said, “Let’s do a Facebook group for our gay boy’s choir.” It said, queer gay boys choir, or something like that, in the name of the group. So, he says, “Look, I can add all the members of the choir.” He adds all the members of the choir. It, automatically, posted, that this one person, who didn’t know how groups worked, and, how would you ever know that it would do this, posted to each of those young men’s wall. These are 17, 18 year-old kids, that, “they joined the queer choir.” Six or seven of them, hadn’t told their parents that they were gay. They were outed because of Facebook’s selfish, horrible track record of taking care of their own users. This lack of trust… Facebook should be sued for $100 million for each one of those. $100 million for each one. Do you know how painful that is, for those individuals? To not be able to come out in their own time? On they’re own terms? Look at Anderson Cooper. He took decades of his life, to come out publicly.
Lon: It’s such a personal decision. You want to be in charge.
Jason: I know a lot of gay people who suffered through this, for decades. These poor kids have to come out, when there’re not ready? They might kill themselves. There are gay people, killing themselves, at young ages, because, they’re ashamed of who they are. They shouldn’t. Then, Zuckerberg, because of the culture he created, is responsible for the pain and suffering of those individuals. I am infuriated about it. He should get sued for hundreds of millions of dollars, for it. It is, absolutely, abhorrent. It is directly related to Mark Zuckerberg’s approach to building a product. This is why I went off on him, years ago. People have tried to crush my career. Some of the most powerful people in the industry said, “You gotta back off your criticism of Facebook.” They tried to end my career, over it. Look. I was right. 100% right, about it. The guy is a tool. Period.
Vivek: He’s getting it left, right, and center, from the public markets. He’s the same guy who showed up in a hoodie at the investment banker’s and hid in the bathroom for an hour, out of arrogance. Now, he’s getting it left, right, and center. He’s getting his just due, over here.
Jason: He needs to, really, take a long, deep look in the mirror. Where is Mark Zuckerberg’s public apology to those kids, that he outed? Where is it? Where is G.L.A.D., in all of this? Where is the Gay and Lesbian Association?
Lon: The Facebook spokesperson, Andrew Noyes, said, ” Our hearts go out to these young people. Their unfortunate experience, reminds us that we must continue our work to empower and educate users about our robust privacy controls.” That’s what they said.
Jason: Oh, yeah. Bull “S”! “Their robust privacy…” They, specifically, designed that product… Where are my lawyers? Where are my class-action, ambulance chasing lawyers? Get in touch with these kids. There’s plenty of public record of me, Mike Arrington, and other people, saying that, this is a “b.s. feature.” Robert Scovill, myself, and Mike Arrington, we were all added to the NAMBLA Group, along with Mark Zuckerberg. Mark Zuckerberg knew, he created this feature, that resulted in this pain and suffering in these people’s lives. Probably in other people’s, as well, by the way.
Lon: Oh. probably more.
Jason: He should pay $100 million… plus a public apology. And, he never would do it. Right, Vivek?
Vivek: I don’t think.
Jason: He’d never do it.
Lon: Apple apologized for the maps.
Jason: Think about that. This is the difference. Tim Cook apologizes over the maps being wrong. Mark Zuckerberg gives a snide P.R. comment, from his P.R. lackey, about the outing of young, 17, 18 year-old gay men, when we have gay people committing suicide, all the time. It is an epidemic of gay people committing suicide, because they’re ashamed of who they are. This is the same as when black people were not allowed to be on the front of the bus. The same suffrage of women, not being able to vote and being beaten. It’s the same thing that gay people are going through, today. It’s unbelievable, in this day and age, that a company, like, Facebook, would contribute to that and then, not take ownership of it. I bet you that, out of the whatever number of thousands of employees, 15 or 20 % are gay. If you’re gay, how could you work at this company, without, Mark Zuckerberg making an, actual, apology, individually, to each of these individuals, and making this right. He should pay them each, $10 million, in Facebook stock, out of his own shares. I’m dead serious. Where are the gay and lesbian associations, fighting for these people, who’ve had their lives, potentially, ruined? I don’t think their lives will be ruined, I think they’ll have great lives. Being gay is a lot of fun. All my gay friends, just, have so much fun. I’m married with a kid.
Lon: One of them, Bobby Duncan, she’s 22. It does look like she has had a falling out with her father. She, now, is out to her father, who is very religious. He wrote some very hateful things on her wall, after this. It’s causing genuine human suffering.
Jason: Mark Zuckerberg can’t possibly apologize, himself. Can’t possibly.
Lon: How can you? You’ve made this decision, for them.
Jason: What do you think that I would do?
Lon: Well, you’d definitely apologize.
Jason: If I did something, so, stupid, I would get on a plane and I’d say, “May I take you to lunch? May I take you on a tour of the company? Would you please come out here? I’ll fly you out, first-class. I’ll fly you out on my goddamned private jet, cause I “F’d” up, so bad and I am so sorry.” This is, literally, what I would do. I’d look the person in the eye and say, “I just want to apologize. It’s my fault. Leadership starts at the top. The buck stops here. It’s my fault. It’s, really, going to inform everything that we do, here.” “This is my management team,” at lunch. “We want to hear what you went through and we, each, are going to apologize to you, in order.” Each person on the management team is apologizing, in order. That’s what I would do. Literally. I would make every member of the management team apologize to them.
Lon: I don’t know the guy, personally. But, you feel that he amy not operate on that level. One on one, empathy, “Let me hear your story.”
Vivek: Facebook has never been socially responsible. that’s the difference between Google and Facebook. Google, from day one, made sure that it didn’t be perceived as evil, like MicroSoft did. So, they were the opposite of MicroSoft. They were the do-gooders. In the community, Google is respected. Facebook is despised by a large segment of the community and it is growing. That’s what the problem is.
Jason: Yeah. Leadership starts at the top. It really does. An organization takes on the ethos of its leader. That’s what I’ve learned in my years. Twenty years, as an entrepreneur, five years of angel investing, and six years of running the conference. Who you are, as a leader, is what your product becomes. Whether, it’s Mike Arrington with TechCrunch, me with Inside.com or WebLogs, Inc., with Tim Cook or Steve Jobs at Apple. Whatever it is. For better or for worse. But, when you see an organization’s behavior. The fact that Google has their Google non-profit, what’s it called? That Megan runs. Google.org. Google.org gave, like, 1% of their IPO money and put it in a $1 billion fund. They’re still giving it out eleven years, later. And, they don’t even have to. Where’s Facebook.org?
Lon: It’s Google.org. You’re right. Over $1 billion in investments and grants.
Vivek: Facebook doesn’t do these things. They don’t give back.
Jason: They don’t give back.
Vivek: Zuckerberg doesn’t give to the community. That’s the problem with the company that they have done nothing to build social support. What they’re doing is alienating their users.
Jason: And, they’re leaving. I heard, from somebody, that getting a Facebook developer, right now, to leave Facebook, is easy. This was a VC, at a startup meeting that I had. I’m not making this up. I never make these stories up on the show. I may leave people’s names out for obvious reasons, nobody wants to pick a fight with Facebook, except for me, apparently, and Vivek, we don’t care. We’re not on anybody’s payroll. The truth is, I was in a meeting with a well-respected VC. If I said their first name, you would know who they are and an entrepreneur, up and coming. You wouldn’t know them, necessarily. When I asked, “Where are you getting your developers?” Do you know what the person said? “I’m getting them from Facebook.” I said, “How do you get them from Facebook. Why would they leave?” “They’re vested. The stock’s at 20. Nobody thinks the stock’s going up. They think it’s going to be a slow crawl. It’s not fun to work there, anymore. All it’s about is, getting more ads on the site. They’re not innovating. All they do is steal ideas” This is what they said. I’m not making it up. People don’t want to work at Facebook, anymore. You can only fool people for so long. Let’s another story, then, we’ll move on to my big SourceBits announcement.
Lon: Alright. We can talk about Hurricane Sandy. We can talk about the YouTube layout. We can talk about Yahoo!’s deal with Wenner Media.
Jason: Let Vivek. He’s a great guest. Go ahead, Vivek. You pick.
Vivek: Let’s talk about Yahoo!. Do you think Yahoo! is going to make it under Marissa?
Lon: Under the new terms of this new deal with Wenner Media, US Weekly and Rolling Stone content will, now, appear on Yahoo! and vice-versa. Yahoo! will, also, get red carpet videos from US weekly and behind the scenes and in studio interviews with musicians, from Rolling Stone. The deal was started, when Levinson was, still, C.E.O. It’s similar to the deal he helped move forward with ABC News. Wenner is, now, going to sell its Yahoo! pages to advertisers and share that revenue with Yahoo!. How many more of these kinds of deals can we expect Marissa to close? Are acquisitions more important than these kinds of cooperating?
Vivek: Let me put you on the spot, Jason. Can Marissa turn this company around?
Jason: I do, actually, believe so and I’ll tell you why. She is a positivity machine. I’ve known her for many years. She’s, always, been delightful and positive in every interaction that I’ve had with her. When people were saying, “Oh. Mahalo-human-powered search. He’s going to attack Google,” and the people were pitting us against each other, she was, always, delightful and charming to me. She was always delightful and charming and warm to me at the TechCrunch 50 and Launch events. She is a person, who is relentlessly positive and she’s wickedly smart. What Yahoo! needs is a relentlessly positive person, who is wickedly smart. And what it’s doing is, you can see it, already. We said it on this program, how to fix Yahoo!. She put the person from IntoNow, which was the big acquisition they did last year. It’s a cool, interesting, second screen experience. You’re watching Walking Dead. It knows you’re watching Walking Dead, then, you can talk to people. She put the entrepreneur in charge of all mobile strategy. She took the other woman, Cathy, from that wired site, and made her the C.M.O. Pull up her name. When I’m talking you should be typing, “Yahoo! C.M.O.” but she’s very smart, that other woman.
Lon: Kathy Savitt.
Jason: Kathy Savitt. The woman’s brilliant. She had a weird site. What was her site? That she was C.E.O. of? Just go to her CrunchBase profile or her LinkedIn profile. Anyway, she is becoming a magnet.
Lon: We’re going to figure this out. Amazon.
Jason: There’s something else that she did in between.
Jason: Lockerz. You ever see these locker things.
Lon: Oh, my God. It’s huge. Kids are crazy about it.
Jason: Kids love it cause they make money off of it. You get, like, some points. It’s some multi-level thing.
Lon: You share what you share.
Jason: Exactly. It’s like some weird MLM, multilevel marketing…
Lon: You hear the YouTube people love Lockerz.
Jason: Anyway. I found that business was, a little bit, odd. That aside, she’s, obviously, a hustler. Marissa is putting each of these people in. That’s step one. She’s got hope. She’s putting the right people in positions. Now, she’s making acquisitions. She bought that startup, Stamped. That group made a beautiful web app. It’s like, you stamped what you like. They have all of these resources. She’s putting the right people in place. She’s making small acqui-hires of dedicated teams. She’s going to incentivize them, properly. Now the question is, Vivek, will she cut 2,000 seats of people? What will that have on morale? That’s going to be hard to do. So, what I think she’s doing is building up the positivity and the hope. Knowing that she has to build up massive amounts of hope, for when she cuts those people. Then, she’s going to have to build up hope, again. But, hopefully, that will net net, be a bigger hope bubble.
Vivek: Do you think she will buy AOL?
Jason: I don’t think she could buy AOL. Cause, it’s worth $3.5 billion, right now. Unless, Tim Armstrong wants to cash in his chips. Yes she should, if she could. Because, she would get all of those content properties. Although, I don’t know how Arianna would go for that. You’d have to give Arianna another $50 million. Cause, Arianna, I think, probably, got short changed in the AOL sale. I think she is, actually, worth, a little bit, more. She’d have to re-up, Arianna. Reload her for another $100 million. Which, would be worth it, actually. I think, if she buys a dozen companies a year, for three years, one of them will become YouTube or Pinterest or something. And, you know what? People like her. And, they’ll take the meeting. If we were sitting, here, talking, two years ago, that Scott Thompson guy… he was ‘swarmy’, and people hated him. He was a liar on his resumé.
Lon: Not a well-liked guy.
Jason: You have to understand entrepreneur psychology. If I’m going to sell my company. If I’m Jason Calacanis. If I’m Dave Morin. If I’m Kevin Rose. And, you sell your company. Whether you make money or not, and you’re going to make some money in life, it’s not, really an issue, for, say, that level of entrepreneur. But, what really matters to guys and gals, who are entrepreneurs, who’ve got whatever level of notoriety or success is, that they sell their baby and their team to a place that’s going to take care it and they can be proud of. I’m very proud to say, I sold my first company to Dow Jones, my second company to AOL, and that AOL, still, covets Engadget and AutoBlog and Joystick. Would I rather have sold it to Disney. Probably. But, AOL paid a price that was much greater than everybody else. I’m not saying that Disney offered. I’m not saying they didn’t. I’m not saying newsCorp. did or didn’t. The point is, if I wind up selling Inside.com/Mahalo or ThisWeekIn, I want it to go somewhere, where I can be proud of where we went and what we accomplished. Now, Yahoo! is one of those. I think, if you sell to Facebook, right now, you feel like a loser. If you sell to Google, you feel like a winner. If you sell to Yahoo!, you feel like a winner, again. That’s critical. The reason that Facebook had to pay through the nose for Instagram was, they knew the dream was over. The gig’s up. Purely, cash. But, with Yahoo!, you might sell, and say, “You know what?” Maybe, if you’re Dave Morin, or me, or whoever, you’re like, “Eh, maybe I can work with Marissa for a couple of years.” Or, “Maybe, I can work with Larry and Sergey, it they treat me nice.” It’s an ego issue.
Lon: I feel like, people think of it like it’s just all raw numbers.
Lon: And, it’s not at all. It’s a personal psychological aspect of it.
Jason: Business is personal. It’s 100% personal. It’s never “just business”. When people say, “It’s just business”, what they’re saying is, ” I’m saying, It’s ‘just business’, to make you feel bad about how, personally, I just screwed you.” When they say that, that’s the point. “Oh, don’t take it personal, it’s ‘just business’.” Because,. “I just screwed you and you, personally, feel, really, bad about it.” When Mike Arrington and I broke up, over TechCrunch 50, “Oh, it’s just business, it’s nothing personal.” No. It’s personal and you’re trying to put, a little, sugar coating on it. Vivek, what do you think about my comments on Yahoo!?
Vivek: I’m glad to hear that. You know more than I do. I really like Marissa. I, really, want her to succeed. If for no other reason, there are only a few women, who are running prominent Silicon Valley companies. To have a role model, here, for tens of thousands of other women. So, I, really, really, want her to succeed. Frankly, I don’t know, if I had her job, what I’d do. Yahoo! has, so much, legacy, I don’t know how she can turn it around. If she does, she is super-human, and, she’s got my whole-hearted support, on this. As far as Mike Arrington goes, you know him better than I do. I wouldn’t want to go, anywhere, near him.
Jason: I saw Mike Arrington, for the first time, the other day. We were, both, at an event, in the same room. Seated on separate sides of the event, and, literally, like, ten people came up to me, like, “Mike Arrington’s in the room.” Which means that, ten people are going up to him, saying, “Jason Calacanis is in the room.”
Lon: Of course.
Jason: We’re on, like, different sides of the room. I’m like, “I just don’t want to talk to him, or whatever.”
Lon: Remind’s you of that moment in ‘The Prestige’, where, Christian Bale, goes to see Hugh Jackman’s performance?
Jason: Whatever, I don’t need to talk to the guy. If I get screwed in business, and somebody does it, it’s over for me. I don’t need to make up with him, or, whatever.
Vivek: I got on Arrington’s ‘shit list’, also. Over the battle we had about women in tech and the blacks in America thing. He’s a clear warmonger.
Jason: Oh. (Jingling swear jar) The good news is: when you declare on the 17th person or the 170th person, nobody takes it serious, anymore. It’s like, Venezuela, when they declare war on people. Like, the guy, Chavez, he declares war on everybody. He get’s upset at everybody. It’s like, “Yeah. O.K.” Put him in the corner.
Lon: He gets, a little, prickly.
Vivek: I think, one day, he’ll be born again. He’ll say, “I’ve been, very, mean to people. These are good people”
Lon: Mike Arrington or Hugo Chavez? Who are we talking about?
Jason: Who is that? Satan? Who are we talking about, here? It’s interesting, though. I’m at the door, talking to a C.E.O., he’s walking, I guess, to leave. He looks over, to make eye contact. When, we look at each other, he goes, “Hi, Jason.” and leaves. “Hi, Mike.”
Lon: So dramatic.
Jason: It’s not. It’s corny. Who cares? Move on. I own the Launch Festival. It’s a much bigger project, than TechCrunch Disrupt, right now, I believe. Putting the Zuckerberg interview aside, that’s a pretty big “get”. But, I’ll never get that. This has been great. Vivek, you are a wonderful guest. Maybe, we’ll do one more. What’s the last one? Hurricane.
Lon: We can do Sandy. So, Hurricane Sandy, of course, devastated, much of, New York, this week. Many areas are, still, in the midst of recovery or not even recovering. I don’t know if you saw the, amazing, horrifying stuff, out of Staten Island, today.
Lon: Staten Island is, still, underwater. Tens of thousands of people, without power, who need help, who are stuck, there.
Jason: It’s shameful.
Lon: It’s a complete horror show, over there, today. I think, it was The New York Times, but, somebody had an amazing piece on it, today.
Jason: Oh, my God. How is that possible? I’m pulling it up, now.
Lon: That’s what’s crazy, to think about. It’s the same stuff, to a somewhat, lesser degree. It’s the same kind of stuff… It’s a Reuter’s article, called: “On Staten Island, Cries for help, Replaced by a Loss for Words.” It is just stark and horrifying, what people are, still, going through, today. We don’t want to minimize that, but, we do want to talk about how hard this has hit the startups and the tech industry, in New York City. Verizon’s key switching station, in lower Manhattan, is completely flooded. FourSquare offices, had to completely shut down. Employees were moved to temporary office space. Time had, basically, given up on publishing their own photos and have been documenting the storm, almost, exclusively, on Instagram. Instagram was getting ten photos per second, during the storm.
Lon: HuffPo, Gawker, MarketWatch, BuzzFeed, and tons of other sites, went down because their servers were flooded. And Uber. We gotta talk about Uber. They had ended, then, later reinstated controversial surge pricing, in New York City, to get vehicles, out there, in the storm. They’re waving fees to drivers. So, drivers, now, are collecting 100% of what they charge. Just, to get them out there, in New York, to help people. What tech companies were the big losers in the storm? Which were the hardest hit? What can we do?
Jason: What do you think, Vivek?
Vivek: The thing about startups is, that, they can work, from home. Now, the problem is, I have many friends, in New York, they don’t have power, at home, as well. It’s miserable. It’s sad. I feel, really, bad for what people are going through. It’s cold, miserable, and wet. Public transportation is not working. It’s, really, sad to see what they’re going through.
Jason: Yeah. It’s, pretty, terrible. What’s interesting is, I was on this email list. Somebody was like, ” Oh, my God. Can we have the board meeting?”, for this board, I’m on. I just responded, “It’s, like, 82 degrees and sunny, here, for, the last eight years.” That person, on the list, was like, “I am trying to find warmth, for my child. I spent the day, trying to get electricity and a warm place for us to sleep. It’s, a little bit of, a snide comment, Jason.” I was like, “Manhattan, still doesn’t have power?” This was yesterday. I wasn’t aware, that Manhattan, still didn’t have power. It still doesn’t. They say, it’s going to happen, today. It’s friday. It’s saddening.
Lon: Right. Some people were being told, “Tomorrow. Hopefully tomorrow, afternoon, they’ll get power.”
Vivek:Then, West Chester. All across the county. All across the region. It’s, really, miserable, over there. This is, like, being a third-world country. It’s so cold.
Jason: It’s always, the poor people. Staten Island is, obviously, not as affluent. Then, the Lower East Side. It’s like, this kind of stuff doesn’t happen on the Upper West Side or Upper East Side.
Lon: Rich people can get out.
Jason: That’s the other thing.
Lon: People that live on Staten Island, where are they going to go? Their homes are there, everything is there.
Jason: It’s not like, they can afford to go and stay in a hotel, or whatever.
Lon: Right. There’s this joke, that Mitt Romney was suggesting, “Everyone go to your summer homes.”
Jason: He didn’t say that?
Lon: No. He didn’t, really. That was the joke: “Mitt Romney advises everyone to go to their second home.”
Jason: Yeah. Of course. Wow. That’s big of him. Listen. On the Uber front, they did the right thing by canceling surge pricing and they did the doubly right thing, by taking no profit, at all, and giving 100% to the drivers. Why is that the right thing to do? It increases demand. Surge pricing is to get more drivers on the road. So, on the holidays, they do surge pricing, so that more drivers will say, “You know what, I have to work on Christmas.”, “I have to work on New Year’s, because, I can’t pass up this deal.” I pay two and a half times, on Halloween night. That’s good for everybody. If you don’t want it, you don’t have to pay the surge pricing.
Lon: Right. But, isn’t there something illegal about price gouging.
Jason: You should not surge in a crisis.
Jason: You should not surge. They realized it, immediately. It automatically kicks in. It’s not like, they made that decision. If demand gets, too, high. Surge pricing goes up, proportional. So, it might be one and half times, two times, two and a half times, three times. They do that to get more drivers on the road. It’s a very scientific, awesome thing, they do. They did the right thing.
Vivek: It’s capitalism. As long as, you’re not taking advantage of people. And, people have an option of buying your service or not buying your service, that’s the way life works.
Jason: Yeah. What they did was, say, “This is a tragedy. We shouldn’t do price gouging, of course, inadvertently.” They pulled it back. That’s what they did. Which, is what I expect them to do. That’s why I’m proud to be an angel investor in their company. They do a great job. It’s the same thing with, like, gasoline or water. In a crisis, like this, could you charge more? Yes. Should you? No. The other thing is businesses. I saw Madison Square Garden emailed their people and said, “We want people to come to work, because we need to get ready for the big Nick’s season’s starting and Rockefeller Center. We owe it to those people to get that stuff up and running.” Which, is true. People do want to go and see that stuff. Especially, in a time of crisis. Get it back up and running. But, they said, “If you choose to stay home, because, you can’t get in, that’s fine. Just, use a personal day or a vacation day.” I thought, “That’s reasonable for week two of this crisis.” Like, when it gets easier on people. But it’s not reasonable, in week one.
Lon: Two or three days, after.
Jason: You can’t for the first two or three days. Like, after 9/11, it’s like, “Go, take care of your families.” But, after that, it is reasonable to say, “Hey, it’s a week after the storm, if you choose to stay home for week two or three…” But, you just can’t send that email, in the middle of it. Which, is a big mistake. Cause companies need to… I have a friend who’s company has been down. SkipHop. It’s got 50-60 employees. It’s a great maker of kid’s stuff. Michael Diamond, a friend of mine, from New York, in the old days. His office is down, his servers are down, his ERP system is down. The factory, in New Jersey, is down. This is going to be a major loss for him. It’s 4% of the year. 5% of the year is going to be a wash. That’s like, when, you run a tight business… No pun intended. It’s very sad. Actually, my heart goes out to everybody, in New York. It feels like this could have been, a lot, worse. So, I do think, there is something to be said, for people did a good job reacting. The emergency service people, seem to have done a great job and people listened to the warnings. How great is it that, science can tell us, three days before something, like this, that it’s coming. They knew three days.
Lon: One of the oddest parts about the whole tragedy is how it was, sort of, unfolding in this painfully slow way. So, you know this horrible thing is coming.
Jason: The image on top of the New York Times building. They put a HD camera on top of the New York Times building.
Lon: It was unfolding, so slow, you could follow it.
Jason: It is like the social media of a disaster.
Lon: This was the most-covered natural disaster, in history. Where, there was, just, more coverage of it, going on. I’m was YouTube… cause for our show, we put a montage together of, some of, the most dramatic footage, from YouTube. So, I was on YouTube, while it’s going on.
Jason: What do you think of these people putting out fake reports, during a crisis.
Lon: It was horrifying. People were getting misinformation over Twitter.
Jason: Somebody said, “all of Manhattan is being turned off: the electricity. By ConEd”. It got picked up by the media.
Lon: Tons of fake stories out there. People dying
Jason: Vivek, what does the media do, if somebody tweets and that thousands of retweets, that, the power is going off, in Manhattan? You know half of the power is, already, off. Do you report on that without confirmation, to get people the news, quickly? Or, do you not. Who are these people who do something, like that, in a time of tragedy?
Vivek: I think you have to be, a little more, judicious, and double check and use your own sources. The media has a responsibility. They can’t just be echoing the garbage that they hear on Twitter.
Jason: I think, what they’re going to have to do is, say… and everybody is going to have to catch up to this… “O.K. There is a rumor, and it is a rumor, cause we’ve called ConEd and we don’t have any confirmation, we’re going to try to get confirmation, but, we’re going to tell you about a rumor. We know that people can fake stuff, very easily, in times of crisis. There are sick demented people, who do that. If this is a sick demented person, it might be, but, there a thousand retweets to the power’s going off in Manhattan. This could be, cause, everybody’s retweeting it, cause they want to help each other out, and, it could be one liar. So, if you live in an area, with power, you may want to think about charging your phones, right now. There’s no downside to that.” They have to say it, like, that.
Lon: Yeah. Of course.
Jason: But, they’re not saying it, like that. Which, I don’t understand. Why am I not running all these newsrooms? Am I that smart or are people that dumb. Is that how you would say it?
Jason: Isn’t that how you would say it, Vivek? So, why can’t the media get that? Are they that stupid?
Lon: It seems that the only thing that C.N.N. has left is that, they have to rigorously research it. They can’t just say things. Twitter can, just, say things.
Jason: I’m not saying, I’m a genius. I know I’m not. Whatever I got. 1150 on my SATs. When it was bad at 1600. You got, what? 1400.
Lon: You really want to do this? I got a 1510 on mine.
Jason: Of course. You’re much smarter than I am.
Lon: I do what I can. I try.
Jason: Vivek, what did you get on the SATs? Did you take the SATs? Did they have the SATs?
Vivek: That was so long ago.
Jason: It’s 1600. I’ll answer. 1590.
Vivek: Believe it, or not. I was really pathetic, when I was in high school and school. During my bachelor degree and tests, it used to be a game: what is the least amount of work that I could do, and get a passing grade?
Jason: What? Were you a stoner in the 70s? Were you a stoner?
Vivek: I wasn’t a stoner. No.
Lon: I was, also, not a great student. I was a much better test taker than I was a student.
Vivek: Whatever was the minimum I could to pass. That was my goal, in life.
Jason: We have a bunch of underachievers, on the program, today. The point is: I know that I’m not the smartest guy in the class. In fact, I know, I’m, kind of, towards the back of the class, but, I know how to say, something’s a rumor, or not. Why are we putting people on the news…
Lon: It’s not dumbness, it’s motive.
Lon: It doesn’t go back to smart/dumb. They’re incentivized to get this news out as quickly as you, possibly, can. Beat MSNBC. Beat ABC.
Jason: Are they being sensationalistic? Are they incented to do that, do you think? To get ratings.
Lon: They’re incentivized to get more eyeballs.
Jason: Even, in a time of crisis, do you think they’re that dumb and sinister?
Lon: It’s like that on the web. It’s the same thing with unique page views. It’s not, really, different as a game.
Jason: This is why the media is collapsing, on itself. Because, they set the benchmark at page views and viewership, not excellence. It’s a race to the bottom. Listen, to me. It’s a race to the bottom. You ever watch the show, Newsroom, on HBO? This is the whole topic of the show.
Lon: Of course. This morning, I was in a coffee shop and Emily Mortimer was running lines at a table, right next to me.
Jason: She was doing lines at the table?
Lon: No. No, she was running lines from a script.
Jason: That’s terrible for you to say that. Out in public. She was doing rails?
Lon: Doing a rail. No. She was reading a line, and I don’t know what she was practicing.
Jason: She’s the lead?
Lon: She’s Maggie?
Jason: Was she in “Breaking the Waves”?
Lon: No. You’re thinking of Emily Watson. This is Emily Mortimer, from Newsroom. But, she’s reading a script. I swear, I don’t know for a fact that it was Newsroom, Season 2, but the line, (imitating Mackenzie) “If you think, I’m going to sit here and take this kind of abuse…”, I’m like, “She’s gotta be talking to Will McAvoy.”
Vivek: You guys are having, too much, fun, over here.
Jason: What they need to do is… Here’s my suggestion, for Google. If I type in “Emily Watson” and “Emily Mortimer”, when you type in two people’s names, they need to split the page, down the middle, and show them both. That should be the new default. Vivek, you ‘re a great guest. You always tell it, like it is. That was a great discussion. Everybody follow @wadhwa. You’re, still, writing for who, now? Washington Post?
Vivek: Washington Post, Business Week, you name it, I write.
Jason: Everybody go to Washington post. Check out his stuff.
Vivek: Go to my website: Wadhwa.com.
Jason: That’s what you follow. This is my, specific, command to the super fans: anytime he writes something for Washington Post, I expect you to tweet it, Facebook it, and Google+ it. As loyal soldiers, of the program, you gotta support the guests. Seriously, when he renews his Washington Post contract, and they see 25-50 extra, super fans, retweeting it, it’s going to matter. He can ask for more money.
Lon: That’s what makes them super fans. That’s what makes a fan into a super fan.
Jason: My super fans are the greatest. They’ll do anything. @Lons on Twitter. Thank you, Lon, for helping out, on the news.
Vivek: Jason, thanks for having me on. I’m a super fan.
Jason: Big group hug. Thanks, Vivek. Thanks, Lon. We’ll see everybody, next time.