TWiST News: M.G. Siegler Explains the Current Venture Crisis and Google’s Antitrust Woes | E2023

M.G. Siegler joins Jason and Alex (0s)

• Meta was accused of lying about a secret project, drawing parallels to past denials by companies like Google and Apple regarding their own projects, such as Google Chrome and Apple's car initiative. (0s)
• The discussion includes advertisements for services like Gusto, Oracle Cloud Infrastructure, and Linear, highlighting their benefits for businesses. (38s)
• The hosts express concern about Hurricane Milton approaching Florida, emphasizing the importance of community support and humanitarian efforts during such crises. (2m16s)
• The conversation touches on the shared human experience and the fragility of life, quoting a song by Sting to illustrate the point. (2m44s)
• M.G. Siegler, a guest on the show, is introduced as a former journalist and venture capitalist with experience at VentureBeat, TechCrunch, CrunchFund, and GV. (4m14s)
• The hosts discuss the unique career path of transitioning from journalism to venture capitalism, mentioning notable figures like Om Malik and Michael Moritz. (4m40s)

M.G. Siegler's journey from journalism to venture capital (5m5s)

• M.G. Siegler never studied journalism in school and initially worked as a web developer, but started writing about technology on the side, which eventually led to him being hired by VentureBeat and then TechCrunch (5m6s).
• Writing has always been a constant part of his career, and writing about technology came naturally to him, but he didn't think that being a journalist was the end state of his career (5m27s).
• He didn't think that transitioning to venture capital was a viable option, but being able to look at many startups at TechCrunch helped him recognize patterns and try to translate that into venture capital (5m50s).
• When he first made the jump to venture capital, he didn't know what he didn't know, and it was a trial by fire in the early days of Crunch Fund (6m2s).
• As a journalist, the goal is to figure out reality by asking questions and building a mental model of the story, whereas in venture capital, the goal is to figure out the bigger story and why it matters (6m27s).
• In journalism, the payoff is immediate, with people reacting to a piece, whereas in venture capital, the payoff is delayed, with investments taking 10 years to mature (7m4s).
• One of the biggest learning curves in transitioning from journalism to venture capital is learning to say no to most opportunities, as the criteria for a good investment are different from those for a good story (7m55s).

Differences between journalism and venture capital (8m33s)

• The transition from journalism to venture capital (VC) provides access to more detailed information, as companies share their financials, allowing for a faster learning curve (8m34s).
• The biggest eye-opener in this transition is the realization that much of what is reported in the media is not entirely accurate, with many facts being taken as true without proper verification (8m58s).
• There is a significant dichotomy between the world of journalism and VC, with few people able to reconcile the differences between the two, and great reporters are able to get close to the facts despite these challenges (9m21s).
• The best reporting is often only directionally accurate, as there are incentives to withhold information and ulterior motives at play when sharing information (9m33s).
• Experienced reporters are aware of these dynamics and take them into account when reporting, but an asymmetry of information still exists (9m49s).
• The transition from journalism to VC highlights the differences in access to information and the challenges of reporting accurately in the face of these differences (10m1s).

Gusto - Get three months free when you run your first payroll (10m2s)

• Gusto is a platform that helps with payroll, benefits, onboarding, and HR, all in one place, making it easier for businesses to manage these tasks (10m6s).
• Over 300,000 businesses trust Gusto, and it can grow with a startup as it scales (10m17s).
• Gusto handles state and federal taxes for staff across the country, making it easier for businesses to manage their tax obligations (10m30s).
• The platform also offers 401K plans, allowing businesses to provide this benefit to their employees (10m35s).
• Gusto helps businesses with compliance, with three out of four employees saying it helps them be government compliant (10m40s).
• The platform is simple and easy to use, allowing businesses to focus on building their company (10m44s).
• Gusto offers a discount with no hidden fees, and new users can try it and get three months free by visiting gusto.com/twist (10m59s).

Media training and transparency in companies (11m2s)

• Companies that are more open and transparent, particularly those led by CEOs who are candid about their operations, tend to perform better than those that are secretive. This openness often reflects a CEO's confidence and understanding of their business, which is more common among experienced entrepreneurs. (11m5s)
• Media training often leads to stilted conversations, as individuals are cautious about sharing anything that might suggest their company is not performing perfectly. This results in communication that is only directionally accurate, missing the opportunity for more genuine and informative discussions. (12m28s)
• The process of information sharing in companies is complex, involving journalists, media-trained individuals, and internal company dynamics. Internal conflicts, such as those seen in companies like Uber, can further complicate transparency, with factions within companies sometimes at odds, akin to a "Game of Thrones" scenario. (12m43s)

Venture capital's current state and CRV's capital return (14m11s)

• CRV is returning capital to their Limited Partners (LPs) due to the current situation in the industry, as reported by Aaron Griffith in The New York Times (14m31s).
• This move is unique, but not unprecedented, as there have been individual situations in the past where VC firms have returned capital, such as after the dot-com crash (15m8s).
• The current state of the industry is characterized as the "best of times, worst of times," with the recent Open AI fund raise and 50-plus billion valuation contrasting with the struggles of many startups (15m24s).
• The industry is coming off a decade of boom times, but also dealing with the aftermath of the post-COVID era and the overvaluation of many companies (16m0s).
• The AI boom cycle is currently underway, but this has not prevented CRV from taking the step of returning capital to their LPs, suggesting that the firm views the current situation as challenging (16m3s).
• The decision by CRV to return capital may be driven by the overvaluation of many startups, which is a legacy of the post-COVID era and the proliferation of "zero" or unprofitable companies (16m17s).
• The industry is still in a learning phase, particularly with regards to AI, and the current situation is complex and multifaceted (14m28s).

Challenges and opportunities in the venture industry (16m23s)

• The Chinese character for crisis is composed of two characters: danger and opportunity, indicating that the current venture crisis presents both risks and potential for growth (16m23s).
• The danger lies in the fact that many people will lose money, startups will go out of business, and valuations are overvalued, causing LPs to lose money and the system to feel stuck (16m30s).
• The opportunity arises from the potential for the industry to become "unstuck" and for new solutions to emerge (16m47s).
• The venture industry is trying to get unstuck, with two main issues: too much capital in early-stage companies and not enough good companies to absorb it, and a broken late-stage market with limited exits and evaluation overhang (16m59s).
• The early-stage market is fascinating, with a natural tendency for bubbles to form, as seen in the cases of crypto and AI (17m32s).
• The early stage is where venture capitalists can make their returns, as it is where the most growth and potential for returns on investment exist (18m24s).
• Focusing on super early-stage investments, such as year zero, can be a strategic choice for venture capitalists, as it is where the most potential for growth and returns can be found (18m36s).

Early stage venture returns and the impact of high valuations (18m42s)

• Early-stage venture investors typically look for a 10x return on investment, with some hoping for even higher returns, such as the Ubers of the world, which can be 1,000 to 10,000 times the initial investment (18m46s).
• As the investment stage progresses, the expected return decreases, with growth-stage funds looking for around a 3x return (19m5s).
• Early-stage investors aim to find companies that can return the entire fund, which is often referred to as a "Grand Slam" or "hitting a home run" (19m23s).
• Historically, finding one company that can return the entire fund has been the key to making successful venture funds (19m31s).
• However, due to high valuations, even in early stages, it has become harder to achieve this goal (19m38s).
• The current AI cycle has seen companies like Open AI and Safe Superintelligence receive high valuations, making it challenging for investors to achieve a 10x return (20m1s).
• With high valuations, it becomes increasingly difficult for venture funds to return the entire fund, especially when considering portfolio management and bankroll management (20m40s).
• To return a fund with 40 names, one company would need to be worth around $40 billion, which is a rare occurrence (20m59s).
• There are few companies that have reached a valuation of over $40 billion, and investors who have achieved this have been "absurdly lucky" (21m8s).
• The list of companies that have reached a valuation of over $40 billion can be counted on two hands, and it's not many names (21m35s).

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• Oracle Cloud Infrastructure (OCI) offers a solution to significantly reduce cloud computing costs, potentially cutting monthly cloud bills in half. (21m44s)
• OCI serves as a comprehensive platform for infrastructure, database, and app development needs, with built-in AI capabilities. (22m6s)
• OCI is more cost-effective compared to other cloud services, charging 50% less for compute and 80% less for networking. (22m15s)
• Oracle provides a special introductory offer for new OCI customers in the US, which includes halving the current cloud computing bill for qualifying companies. (22m36s)
• The offer is limited to new OCI customers and requires a minimum financial commitment, with certain exclusions. (22m57s)

Future exits and liquidity evaluations in startups (23m7s)

• There's an interesting optimism in future exits and liquidity valuations that contrasts with the current market enthusiasm in investment deals, particularly with the high valuation of companies like Safe Super Intelligence and Open AI (23m7s).
• The hope is that with interest rates coming back down, the IPO window will open again, allowing AI companies to go public and providing an opportunity for them to raise more capital (23m40s).
• The market may be okay with non-profitable companies going public, as seen in the past with companies like Amazon, which didn't show a profit for years but had the promise of future profits (24m35s).
• However, in recent years, the market has been less okay with non-profitable companies going public, and companies like Uber and Airbnb had to mature and show profits before going public (24m47s).
• There's been a lack of M&A activity, aside from "backdoor acquisitions" or "Acquisitions by another name" where tech behemoths buy teams, license software, and provide a way for investors to get their money back (25m12s).
• These backdoor acquisitions often involve buying a team and licensing software, then finding a way to return money to investors, possibly through a loan repayment with interest and a royalty or equity stake (25m40s).
• In some cases, investors may be left behind in a shell company, with some people staying behind to "answer the phones" while the rest of the team moves on to a new venture (26m30s).
• Those left behind may be offered a deal to stay for a few years, answer phones, and receive a pile of cash, essentially a "no-show job" (26m48s).

Acquisitions, hackquisitions, and regulatory impact on M&A (27m14s)

• There was an inflection point where Microsoft acquired a company, and it seems like a similar situation is happening with another company, Character, which was brought back into Google, with its founders owning around 20% of the company, and they are trying to make it work as a full consumer company, but it's unclear what's going on with these deals due to the regulatory environment (27m14s).
• The regulatory environment is preventing real M&A from happening, and tech companies that would normally buy startups for talent are unable to do so, hence the acquisition model is being used until they're told to stop (28m6s).
• The acquisition model is not worth it for companies, as it's causing legal teams to be bogged down and product teams to freeze, and it's not just about big companies being able to acquire things, it's existential for capitalism (28m47s).
• The trickle-down effects of the regulatory environment are not being taken into account, and the diasporas of acquired companies are not flowing back into the system, keeping it going, and it's not good for anyone (29m53s).
• The current situation is causing everyone to be stuck, and it's not just about the big companies, it's about the ecosystem as a whole, and when there are no exits, it's not good for capitalism (30m12s).
• The product team is also affected, as they have to compete against the company being acquired, and it's causing them to freeze and lose market share (29m12s).
• The kill fee for the acquisition of Figma by Adobe was a billion dollars, which is why the acquisition model is not worth it for companies (28m55s).
• The regulatory environment is expected to change after the election, and it will be interesting to see what happens with the DOJ and the position of Lina Khan (28m15s).
• The venture ecosystem is compared to an ocean, where removing certain elements can disrupt the balance, similar to how the absence of smaller acquisitions can hinder innovation and talent movement. (30m29s)
• Smaller acquisitions, often referred to as "singles and doubles," are crucial for retiring non-breakout projects and allowing venture capitalists to focus on new opportunities. This process helps maintain innovation and societal progress. (30m40s)
• Many successful entrepreneurs have been able to start new ventures after initial smaller exits, which provided them with enough capital to fund their next projects. Examples include Elon Musk with Zip2 and Travis Kalanick with Red Swoosh. (31m41s)
• Currently, there is a lack of these smaller acquisitions, which is unusual and concerning for the venture ecosystem. (32m12s)
• There is a discussion about the importance of allowing smaller acquisitions to proceed, regardless of the acquiring company, to promote capital recycling and innovation. (32m41s)
• The Adobe-Figma deal, valued at $20 billion, is highlighted as an example of a large acquisition that differs from smaller deals, as it involves a major player acquiring a potential challenger. (32m51s)
• Concerns are raised about regulatory scrutiny on small acquisitions, such as Meta's purchase of a VR fitness company and Amazon's attempt to buy a robot vacuum company, which are seen as minor compared to larger past acquisitions like YouTube and Whole Foods. (33m17s)
• There is a current venture crisis and Google's antitrust issues are being discussed (34m2s).
• The discussions about the venture crisis and Google's antitrust issues have had a chilling effect, resulting in fewer conversations taking place (34m4s).
• The reduced number of discussions is attributed to the current situation, implying that people are hesitant to engage in conversations about these topics (34m8s).

Venture capital dynamics and fundraising during market downturn (34m9s)

• The current market downturn has given Limited Partners (LPs) in funds a valid excuse to trim the number of funds they commit to and reduce their commitments (34m16s).
• Many LPs are adopting a "pencils down" approach, waiting for returns to recycle before investing in new funds, with some expressing interest in meeting with fund managers to hear their vision and start building relationships for future investments (34m37s).
• Fund managers are taking meetings with LPs to establish relationships and lay the groundwork for future fundraising efforts, such as for a potential "fund five" (34m52s).
• Some LPs who were unable to invest in previous funds due to being "pencils down" are now expressing interest in investing in future funds, citing the return of Distributed to Paid-in Capital (DPI) and other positive developments (35m14s).
• The outlook for 2025 is more positive, with a new administration, the stock market at all-time highs, and a potential soft landing, which could create a favorable environment for fundraising and investment (35m27s).
• The best-case scenario for the economy is a managed recession, with controlled inflation, stable interest rates, and a healthy unemployment rate, which would support a strong fundraising environment (35m46s).

Predictions for the startup market recovery (35m48s)

• The potential recovery of the startup market could involve the return of mergers and acquisitions (M&A) and the initial public offering (IPO) market, with companies like Stripe and possibly SpaceX or Starlink going public in 2025. (35m48s)
• The current year is considered inactive for significant market movements due to the upcoming election, and any substantial actions are expected to occur post-election. (36m9s)
• M&A activity is anticipated to take longer to recover than the IPO market due to ongoing antitrust issues and legal team constraints. (36m20s)
• Many companies remain overvalued from the previous cycle, necessitating difficult decisions and potential down rounds, with more adjustments expected next year. (36m50s)
• The best-case scenario for market recovery is optimistic, but a more realistic outcome involves gradual improvement with uncertainties, particularly concerning the impact of AI and the emergence of new companies. (37m13s)
• There is concern about early-stage AI companies, as they may not develop substantial user-based products beyond what major companies are already offering, potentially affecting the broader ecosystem. (37m33s)

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• The platform is purpose-built for modern product teams, allowing them to streamline bug reporting, test tracking, plan and inspect new features, and manage long-term product roadmaps. (38m18s)
• Linear is favored by tech companies of all sizes, including half of Y Combinator companies, and is used by organizations such as Cash App, Scale AI, and Vercel. (38m31s)
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AI competition among tech giants and Meta's hardware challenges (38m57s)

• Tech companies like Meta, Google, and Microsoft are taking AI search seriously, with Meta putting an AI search box at the top of Siri and Google introducing the Gemini box, while Microsoft has co-pilot and Open AI has chat GPT with 300-400 million monthly active users (38m59s).
• The competition is for the 50% of queries that are easy to answer, such as asking about the history of Pink Floyd or the weather, and it's unclear who will win this "consumer query race" (39m35s).
• Open AI and chat GPT have achieved massive scale, but companies like Apple and Google have inherent advantages with their devices already in a billion pockets (40m25s).
• For new apps to compete, they need to be significantly better than the existing services, and while Open AI and chat GPT have done a good job of becoming brand names and creating good products, it's unclear if they can overcome the gap (40m44s).
• The competition will likely heat up in the next couple of years as these AI services are baked into billions of devices, making it harder for new competitors to enter the market (41m24s).
• The current state of AI services like Siri and Gemini is still rudimentary compared to Open AI, with Siri being like talking to a toddler, Gemini like talking to a smart teenager, and chat GPT like talking to a graduate student or college student (41m53s).
• The technology is advancing rapidly, and it's possible that in a year or two, talking to one of these AI services will be like talking to the smartest human being on the planet and the next 10 smartest people in a room (42m12s).
• A hypothetical dinner party with the 12 most effective, smartest, and cleverest people in the world, including Einstein, Elon Musk, and Steve Jobs, would likely result in a four-hour conversation about what to have for dinner, with a potentially deconstructed meal as the outcome (42m34s).
• The conversation shifts to how brilliant ideas are translated into products, referencing startups like Perplexities of the World and Anthropic, and how they can compete with established companies like Apple and Google (43m10s).
• The discussion touches on the reports of Sam Altman and Johnny Ives working on a new product, highlighting the importance of having a physical product to gain an advantage in the market (43m25s).
• Mark Zuckerberg has been talking about how Meta is at an inherent disadvantage due to not having a phone, leading to their attempts to develop new products like glasses (43m36s).
• The idea of a Facebook phone is revisited, with the speaker recalling how Meta denied the project's existence despite meeting with phone vendors (43m55s).
• The conversation also mentions how companies like Google and Apple have been known to deny working on certain projects, only to later reveal them, such as Google's browser Chrome and Apple's potential car project (44m16s).
• The speaker reflects on their time at GV (Google Ventures) and how it operates as a traditional VC fund, with a focus on returns, despite being part of the broader Alphabet world (44m48s).
• The discussion concludes that being a CVC (Corporate Venture Capital) in a period of conservative traditional venture LPs may not necessarily decrease firepower, and could potentially make CVCs a more advantageous place to invest from (45m6s).

Venture capital dynamics and favorite AI tools (45m47s)

• Venture capital dynamics are expected to remain relatively stable during periods of extreme volatility, with a focus on long-term capital and less emphasis on short-term gains (45m47s).
• The current venture crisis may not see a significant change, with the market potentially becoming slightly more stable but still subject to considerations and volatility (45m50s).
• Notion is mentioned as a tool with lots of AI features, but the speaker's favorite AI tool is Mid Journey, which they use extensively for image creation (46m26s).
• The speaker is also interested in new voice AI tools, such as ChatGPT's voice assistant and Google's voice AI, which are considered more compelling than early voice assistants like Siri and Alexa (46m37s).
• Amazon is reportedly working on a new version of its voice assistant, which is expected to be released soon (46m55s).
• The speaker encourages the use of AI tools, citing the example of their dad using ChatGPT every day, which indicates product-market fit (47m9s).
• The speaker's team is encouraged to use AI tools, with a goal of 30-50 interactions per day, and to start every project by asking AI questions (47m20s).
• A favorite prompt for AI is "check your work" to refine and improve the response, which often results in a better answer (47m45s).
• The speaker recommends Spyglass.org, a website that offers full access to the "inner ring" for $10 a month, as a source of worthwhile reading (48m49s).

Google breakup discussion and DOJ's antitrust case (49m8s)

• The U.S. Department of Justice (DOJ) has won a case against Google, finding the company liable under Section 2 of the Sherman Act for maintaining monopolies in U.S. general search services and U.S. general search text advertising, which are significant markets generating tens of billions of dollars annually. (49m52s)
• The government is considering both behavioral and structural remedies to prevent Google from leveraging its products like Chrome, Pay, and Android to maintain its monopoly. Structural remedies could potentially involve breaking up the company. (50m18s)
• Despite the possibility of a breakup, the likelihood of Google being broken up is considered very low, estimated at under 5%, as such cases often involve lengthy negotiations and can span multiple U.S. presidential administrations. (50m40s)
• A potential remedy could involve breaking up Google's deal with Apple or spinning out YouTube, which could create more shareholder value and would involve a five-year period to separate the advertising systems due to their integrated nature. (52m5s)
• Google's potential antitrust remedies include limiting or ending its use of contracts, monopoly profits, and other tools to control or influence distribution channels, specifically the big search deals that give Google access to a large amount of data, which in turn improves its search capabilities and makes it harder for competitors to enter the market (54m17s).
• The government is considering forcing Google to make its indexes, data feeds, and models used for Google search available in whole or through an API, which could potentially allow startups to access and utilize Google's search data (54m45s).
• This remedy could enable startups to build their own search products using Google's data, similar to how Brave's search API works, and could potentially increase competition in the search market (55m21s).
• The proposed remedies are part of an ongoing antitrust case against Google, and the company is expected to fight them, but the judge in the case has outlined these potential remedies as part of the discovery process (54m0s).
• The market may solve the problem of Google's dominance before the Department of Justice does, as technology and innovation can move faster than the legal process (53m20s).
• The government's proposed remedies are aimed at addressing Google's control over distribution channels and its accumulation and use of data, which gives it a competitive advantage (54m40s).

Possible effects of opening Google's search API (55m25s)

• Google's default status on billions of devices is a concern, and a potential remedy could be to allow other providers access to some of the information Google collects, giving them a chance to compete, or to strip Google of its default status (55m26s).
• Opening up Google's "blackbox" JSON for other startups to build upon could be a solution, but it might create another business line that makes Google more powerful (56m7s).
• If Google were to spin out YouTube, it could result in hundreds of billions of dollars, potentially making YouTube a $500 billion company from the start (56m24s).
• If Google were to make YouTube public and float shares to the public, it could take around four years for Google to clear its position, allowing it to invest the gained cash in AI and other products and services (56m34s).
• Yahoo's SearchMonkey, a feature from the early 2000s, allowed developers to enhance search results with rich data, structural data integration, and custom result templates, giving users more control over their search experience (57m11s).
• Brave browser has its own version of a search API, similar to Yahoo's SearchMonkey, which allows for customizable search results (58m33s).
• The discussion revolves around the current venture crisis and Google's antitrust issues, with a mention of the Brave search API, which allows startups to create user-first products and maintain user privacy. (58m52s)
• The Brave browser is praised for its ability to protect user privacy and speed up browsing by blocking ads and tracking cookies. (59m24s)
• The use of Virtual Private Networks (VPNs) is also discussed as a means to maintain online privacy, with the speaker mentioning their use of ExpressVPN and another VPN service. (1h0m26s)
• The Microsoft antitrust case is referenced as a comparison to the current Google antitrust issues, with the speaker suggesting that the case had a limited impact on Microsoft's operations and ultimately did not lead to the company's breakup. (1h1m10s)
• The speaker believes that the current antitrust case against Google will likely have a similar outcome, with the company emerging relatively unscathed, but notes that the distraction caused by the case may have an impact on Google's management team. (1h1m0s)
• The discussion also touches on Microsoft's failure to establish a dominant position in the smartphone market, with the speaker attributing this to the company's distraction during the antitrust case and its eventual abandonment of the Windows Phone project. (1h1m46s)
• Google has responded to the antitrust allegations, stating that the process is just beginning and that they will respond in detail. (1h2m18s)
• The current antitrust case against Google is not only bad for the company but also risks users' privacy and security by potentially forcing Google to share search queries, clicks, and results with competitors, although personally identifiable information (PII) would be removed (1h2m25s).
• The removal of PII is intended to address privacy concerns, but it raises questions about how this process would work in practice (1h2m41s).
• The concept of sharing user data for targeted advertising, also known as retargeting, has existed in the past but has been disrupted by companies like Apple and Brave (1h2m59s).
• The antitrust case may ultimately come down to a simple demand from the government for Google to make a concession, such as giving up control of Google Chrome, its search deals with Apple worth $30-40 billion, or YouTube (1h3m7s).
• The government may be seeking a symbolic "sacrifice" from Google, and the company may need to offer up one of its assets to appease regulators (1h3m28s).

Potential Google spin-offs (1h3m41s)

• Google has several properties that could be spun off, but YouTube is unlikely to be the one due to its massive size, with a potential spin-off being the largest ever at over $191 billion (1h3m49s).
• Chrome is another possibility, with over a billion users, and could potentially survive as an independent company, generating significant revenue from Google search (1h4m15s).
• However, Chrome is deeply integrated with other Google services like Google Docs and Gmail, making it a difficult and potentially damaging spin-off (1h5m22s).
• Google agrees that splitting off Chrome or Android would be detrimental, and there isn't an easy property to spin off without causing significant disruption (1h4m40s).
• YouTube is considered an easier spin-off due to its relatively simple ad network, but this would still require advertisers to manage an additional ad network (1h4m47s).
• The advertising industry already manages multiple ad networks, including Facebook, Microsoft, and TikTok, so adding a YouTube spin-off wouldn't be a significant issue (1h5m10s).
• Google Home automation is considered a potential easy spin-off, but it's not a significant asset, and giving it up would be seen as a minor concession (1h5m58s).
• The idea of Google giving up Nest, a home automation company, as a remedy for being declared a monopoly is seen as an unimpressive outcome (1h6m16s).

Audience Q&A (1h6m27s)

• A transition period is expected before the widespread adoption of Advanced General Intelligence (AGI), which may lead to significant displacement and potentially a universal basic income, as seen in the Expanse series with the concept of "Basic Universal Life Credits" (1h6m31s).
• The idea of someone starving to death is becoming less common in advanced civilizations, with more people dying from obesity-related diseases, and the concept of basic universal life credits could ensure that everyone has access to food and shelter (1h7m31s).
• The concept of "Basic" in the Expanse series is not a luxurious support, but rather a guarantee that one will not starve or be without shelter, and it is possible that something similar could become the norm in the future (1h7m4s).
• The rise of automation and AI could lead to a re-evaluation of the concept of work and the need for a universal basic income, as seen in the Expanse series (1h7m16s).
• Consultants may not be necessary in the future, as AI tools like Chad GPT can replace most of their work, but consultancies will still be employed as they provide a way to shift accountability and make difficult decisions, such as layoffs (1h8m40s).
• The use of AI tools like Chad GPT may lead to a reduction in the number of consultants needed, with the bottom third of consultants potentially becoming unnecessary, and the remaining consultants being able to do the work of many (1h9m45s).
• Some consulting firms, such as McKenzie, have recently started offering buyouts, which are technically not layoffs, as a way to reduce their workforce, and it is possible that this trend will continue in the future (1h9m22s).
• The development of AI may lead to the death of billable hour wastage, as some tasks can be automated, potentially resulting in a more efficient use of time and resources (1h10m16s).
• Certain industries, such as tax preparation, may see a reduction in the number of employees needed due to AI, but could still experience increased profitability and earnings expansion (1h10m52s).
• The concept of "surging earnings" or "earnings expansion" and "static team size" may become more prevalent, where companies maintain or reduce their workforce while increasing profits (1h11m19s).
• This shift could lead to top law firms or other organizations reducing their workforce by 20% while increasing profitability by 30% (1h11m29s).
• The rise of corporate profitability may lead to increased investment in initiatives such as universal basic income (UBI) or other forms of social support (1h11m50s).
• Ideas such as giving every child $1,000 in the S&P 500 at birth or investing in index funds for kids' savings accounts have been proposed as ways to promote financial inclusion and investment in the US economy (1h11m57s).
• The concept of "Invest America" involves putting $1,000 to $5,000 in every kid's savings account in index funds, allowing them to access the funds at certain points in their life, such as for college or a down payment on a home (1h12m30s).
• A startup idea, kidsinvestmentclub.com, aims to create a platform where young adults can practice making trades with fake money, while parents can confirm and execute the trades in a real account (1h13m7s).
• A proposal was made to create an app for kids to learn about trading, with the idea of making junior traders, and the creator is willing to fund it and has the domain name, as well as the first thousand customers ready to go (1h13m42s).
• Parents expressed interest in paying for a product like this, with some willing to pay $100 or $25 per month (1h14m0s).
• The idea was met with enthusiasm, but one person, Alex, had to remind themselves to avoid a conflict of interest as a journalist (1h14m15s).
• The conversation ended with a lighthearted exchange about avoiding conflicts of interest and a promise to discuss more in the future (1h14m34s).