Podcast Summary
Leveraging resources to grow businesses despite compliance and security challenges: Vanta simplifies SOC 2 report generation, storytelling is essential for understanding a company's history, Ken Langone's 'I Love Capitalism' and George A. Miller's 'The Hot Hand' offer insights, and Dell's promotions and ModLoft's modern furniture were also discussed.
Compliance and security should not hinder startups from growing their business. Vanta, a company that helps businesses obtain SOC 2 reports quickly, was discussed as a solution for this issue. Ben Gilbert and David Rosenthal, co-hosts of the "Acquired FM" podcast, shared insights about storytelling and the importance of understanding a company's history, which is accessible to all listeners, not just LP show subscribers. Jay Cal recommended two books, "I Love Capitalism" by Ken Langone and "The Hot Hand" by George A. Miller, that could provide valuable insights for entrepreneurs. The discussion also touched on Dell's small business month promotions and ModLoft's modern furniture offerings. Overall, the conversation emphasized the importance of learning from successful companies' stories, taking advantage of resources that help businesses grow, and staying informed through reading.
Debunking the myth of the hot hand in sports and business: The hot hand or streak phenomenon may not be as reliable as believed, successful CEOs often come from unexpected backgrounds, and creativity is crucial for success.
The concept of a hot hand or streak in sports and business may not be as reliable as we think. The book "The Hot Hand" debunks the myth of the hot hand in basketball, and the case studies in "The Outsiders" book show that successful CEOs often come from unexpected backgrounds. The importance of creativity, as explored in "Creativity, Inc.," is another key takeaway. These books challenge conventional wisdom and offer valuable insights into the complexities of sports, business, and creativity. Whether you're a sports fan, a business leader, or simply curious, these books offer fascinating perspectives on the power of perseverance, innovation, and the importance of looking beyond the surface.
Discovering New Favorite TV Shows During the Pandemic: The group discussed their favorite TV shows discovered or continued watching during the pandemic, including 'The Man in the High Castle', 'Clone Wars', 'Schitt's Creek', and 'I May Destroy You'. They highlighted the high-quality productions and the impact these shows had on them.
During this news roundtable discussion, the group shared their favorite TV shows they discovered or continued watching during the pandemic. Jason mentioned his fascination with the alternative history presented in "The Man in the High Castle," while Jason and his wife found themselves in a disagreement over his watching "Clone Wars" without her. Dan Levy's Canadian creation, "Schitt's Creek," was another popular recommendation. Michael's pick was "I May Destroy You," an HBO series dealing with complex themes around race, sexual identity, and memory. As they wrapped up the TV talk, they also touched on current events, discussing Apple's developer relations issues, TikTok's CEO resigning from the Chinese Communist Party, and Walmart's bidding war. Throughout the conversation, they highlighted the high-quality productions and the impact these shows had on them.
Using Vanta for faster compliance: Vanta helps businesses achieve compliance quickly and efficiently, saving valuable time and resources through integrations with essential tools like Slack, GitHub, and AWS.
Using Vanta for securing and maintaining compliance in your business can save you significant time and resources compared to doing it manually. Vanta's integration with essential tools like Google Slack, GitHub, and AWS makes it an indispensable tool for companies like Kitty Hawk. By using Vanta, businesses can achieve compliance in just a few weeks instead of months, freeing up valuable time for employees to focus on more critical tasks. The ongoing dispute between Apple and Epic Games highlights the power dynamics at play in the tech industry. Epic Games, a successful publisher and software developer, sought a discount on Apple's transaction fees for in-app purchases. When Apple refused, Epic circumvented the App Store by directing users to a external website to make purchases. Apple's strict rules and perceived lack of flexibility have led to negative publicity and a growing number of developers expressing support for Epic. The situation underscores the importance of understanding the power dynamics and potential risks involved in partnerships and business relationships.
A legal battle between Epic and Apple could impact the entire gaming industry: Epic's fight against Apple's App Store policies could lead to a shift in power dynamics in the tech industry, potentially impacting the gaming industry and the App Store ecosystem.
Epic's legal battle against Apple is more than just a dispute over Fortnite's removal from the App Store. Epic, the company behind the Unreal Engine, which powers numerous games, TV shows, and other applications, could potentially be drawn into the fight. Tim Sweeney, Epic's CEO, is a principled figure who wants an open app ecosystem and is willing to fight for it, even if the financial impact on him is minimal. This conflict, which started with Apple's antitrust hearing, could significantly impact the entire gaming industry and the App Store ecosystem. If Epic were to partner with Android phone makers, it could potentially create a new front in the ongoing tech war between Apple and Android. This is not just a fight between two companies, but a potential shift in the power dynamics of the tech industry.
Partnering with phone manufacturers might not significantly challenge Apple's market dominance: While Fortnite's partnership with phone manufacturers could attract some players, Apple's strong ecosystem and lock-in effects limit the potential impact.
While Epic Games partnering with a phone manufacturer to offer in-game currency as a perk could potentially attract some Fortnite players, it may not be enough to significantly challenge Apple's market dominance. Apple's ecosystem has strong lock-in effects, and the number of people willing to switch phones solely for a gaming advantage is likely small. The idea of a Fortnite tablet with specific gaming features could have potential, but it's uncertain if it would be a game-changer. Instead, companies like Dell, with their offerings for small businesses, continue to provide valuable resources and tools to help startups grow and scale their technology.
Impact of WeChat, Epic, and Tencent on Apple's market share and developer relations: Apple's relationship with Chinese companies and their impact on the App Store could lead to a loss of developer faith and revenue. A potential solution is a tiered revenue sharing model or a new phone/tablet with a lower revenue share from Unreal Engine.
The relationship between WeChat, Epic, and Tencent, and the role of these companies in the Chinese market, could significantly impact Apple's market share and developer relations. Apple's loss of developer faith and the importance of China to their revenue make this situation a major concern. A potential solution suggested was a tiered revenue sharing model, where Apple takes a larger percentage initially and then reduces it as the developer's revenue grows. Another idea was for Unreal Engine, a competitor to Apple's App Store, to create a phone or tablet with a lower revenue share, potentially attracting developers and consumers. Epic's business model, which includes game development, game engine, and the Epic Game Store, could serve as inspiration for this approach. This could lead to a shift in the market and give consumers more choices and savings.
The importance of a paywall for paid content: Majority of paid content should be behind a paywall for success, while the acquisition of TikTok by a Chinese company may not benefit American workers.
The success of paid content depends on having a majority of it behind a paywall. Ben and David discussed various models, such as one for one or a percentage of content, and agreed that the majority is key. Regarding TikTok, they predicted that the acquisition of the app by a Chinese company may not be beneficial for American workers. Moving on to a different topic, Ben shared his positive experience with Modloft, a furniture company that offers great prices, build quality, and risk-free trials, among other benefits. Despite the challenging times, Ben urged listeners to vote for qualified individuals to help deal with the crisis.
Supporting underrepresented communities in entrepreneurship: Invest in future of marginalized groups, acknowledge systemic injustices, and work towards change with empathy and understanding.
It's important for individuals and organizations to use their resources and influence to support underrepresented communities, specifically black and brown founders, in the entrepreneurial space. This is a tangible way to effect change and invest in the future of marginalized groups. The speaker, who is an investor, is personally committed to this cause and encourages others to join him in this effort. He also emphasizes the need for empathy and understanding towards the experiences of those who are suffering from systemic injustices, such as unfair policing. It's crucial to acknowledge the reality of these issues and work towards finding creative solutions and qualified leadership to bring about change.
Addressing law enforcement issues: inadequate training, excessive force, and human rights concerns: The need for longer police training, non-lethal weapons, and better procedures to ensure non-lethal interactions is crucial. Human rights concerns extend beyond the U.S., and companies must be held accountable for their relationships with violations.
There are numerous issues that need addressing in the realm of law enforcement, including inadequate training and the excessive use of force. The average training period for police officers in the U.S. is six months, and there's a call for increasing their salary and extending their training to four years. Additionally, there's a need for more non-lethal weapons and better procedures to ensure non-lethal interactions. The recent shooting of a suspect in the back seven times, despite his resistance, highlights the urgent need for change. Furthermore, human rights concerns extend beyond the U.S. border, with the Chinese Communist Party's involvement in genocide against the Uighurs being a significant issue. Companies like TikTok must be held accountable for their relationships with human rights violations. In the business world, the recent leadership change at Disney, with Bob Iger choosing Bob Chepeck over Kevin Mayer for the CEO role, raises questions about the value of different executive backgrounds and experiences.
Iger's unique background and experience made him the ideal CEO for Disney's transformation: Recognizing individual achievements aren't enough, surround yourself with talented individuals and be a visionary leader to reach the next level.
Robert Iger's unique background and experience, having spent his entire career rising up through the ranks of Disney and then transforming the company's strategy, made him the ideal CEO to execute the digital distribution, international expansion, and IP acquisition plans that set the direction for Disney for the next twenty years. Iger's ability to recognize that what got him there wouldn't be enough to take Disney to the next level and his experience as both a visionary leader and a COO made him a valuable asset. The importance of surrounding oneself with talented individuals and recognizing when individual achievements are not enough to reach the next level was also emphasized.
Focusing on a few key strategies for growth: Effective execution of a few strategies is more beneficial than spreading resources thin. Prioritize growing subscribers, building franchises, and expanding internationally.
Focusing on executing a few key strategies effectively is more beneficial for a company than trying to tackle too many ideas at once. Bob Iger's success at Disney is a prime example of this approach. The company's priorities should be on growing subscribers for Disney Plus, building great franchises, and expanding internationally. Iger's retirement was not planned, but rather forced due to his age and potential exclusion from important negotiations. The best jobs for individuals seeking power, fame, and wealth may not always be the most glamorous or exciting, but rather those that align with their passions and abilities. Companies like Berkshire Hathaway, which have achieved great success, must also navigate the challenges of succession and potential changes in strategy. Ultimately, it's essential to understand what got a company to where it is and how to build on that foundation for future growth.
Ben's description of the deposition process as painful and arduous: Answer truthfully during depositions and maintain good faith despite the intimidating environment. Be aware of potential privacy concerns when dealing with companies based in countries with questionable data handling practices.
The deposition process in a legal dispute can be a lengthy and surreal experience. In this case, a man named Ben, who had a trademark dispute over the name "Cyber Surfer," described the experience as painful and arduous, involving a room full of lawyers arguing over mundane questions without a judge present. Despite the intimidating environment, it's essential to answer truthfully and treat the process with good faith. Regarding TikTok, Ben expressed concerns about the Chinese Communist Party having access to American users' data, drawing parallels to Yahoo's past practice of handing over dissidents' information to the Chinese government. The conversation then shifted to the philosophical implications of allowing China to control what content is accessible to the rest of the world while we accept their output.
Geopolitical concerns over TikTok's Chinese ownership: Speakers debated potential data access by Chinese Communist Party, removal of freedoms in Hong Kong, and national security risks of TikTok's Chinese ownership. Suggestions included TikTok becoming an independent third party entity with its own data servers.
The discussion revolved around the complex geopolitical issues surrounding TikTok, a social media platform owned by the Chinese company ByteDance. The speakers expressed concerns over the Chinese Communist Party's potential access to user data and the removal of freedoms in Hong Kong. Some argued that TikTok's ownership by a Chinese company, despite significant US investment, raises serious national security concerns. The speakers also debated the role and responsibility of journalists in reporting on these issues and the potential consequences of dismissing essential workers during the pandemic. Ultimately, it was suggested that TikTok may become an independent third party entity with its own data on its own servers, outside of China, as a potential solution to these concerns.
TikTok's Future: An Acquisition by Microsoft or Oracle: TikTok's estimated $25-$30B valuation, 250M users, and potential acquisition by tech giants Microsoft or Oracle could lead to significant growth and revenue for both parties.
TikTok's future as an independent entity is likely to involve an acquisition, possibly by a tech giant like Microsoft or Oracle. The valuation of the company, with approximately 250 million users, is estimated to be between $25 and $30 billion. This estimation is based on comparing TikTok's user base to that of other successful tech companies and their revenue per user. The acquisition would provide TikTok with the necessary infrastructure and resources to continue growing, and would likely result in significant revenue for both parties. The use of a Special Purpose Acquisition Company (SPAC) is also mentioned as a potential method for completing the acquisition. Overall, the discussion emphasizes the potential value of TikTok's user base and the motivation for major investors to see the company become an independent entity.
Impact of the pandemic on venture capital landscape: Angel and seed stage valuations remain stable, larger checks for later-stage companies decrease seed deals, investors focus on mature businesses, remote accelerators increase investment volume while maintaining quality.
The pandemic has significantly impacted the venture capital landscape, particularly in the early stages. Angel and seed stage valuations have remained relatively stable despite economic uncertainty, with founders retaining more equity than in previous years. However, larger check sizes for later-stage companies have led to decreased seed stage deal activity. Despite these changes, some investors are doubling down on investments in mature, profit-near businesses. Remote accelerators have also become more prevalent and efficient, allowing for a higher volume of investments while maintaining quality. The increased number of applicants ensures a strong pool of potential investments. Overall, the pandemic has forced adaptations in the venture capital industry, leading to changes in investment strategies and an increased focus on remote operations.
Tools like Remoteour.com facilitate remote work and virtual interactions: Remote tools enable efficient communication and monetization opportunities, with the SEC's recent actions expanding investment accessibility
Remote work and virtual interactions are becoming increasingly important and efficient, as demonstrated by tools like Remoteour.com. This software allows for quick, scheduled calls and even monetization, making it an excellent example of the adaptability and innovation happening in response to the accelerated changes brought about by the COVID-19 pandemic. Additionally, the SEC's recent actions, such as allowing for spousal equivalents in accredited investment, further support the growing accessibility and inclusivity of investment opportunities. Ultimately, these developments underscore the importance of staying informed and being prepared to adapt and capitalize on emerging trends.
Proposing a test for accredited investor status: A test for accredited investor status could expand investment opportunities to more individuals, increasing participation and diversity. However, potential conflicts of interest require careful consideration, such as an independent proctor and video record for audits.
Current investment regulations limit who can invest in certain syndicates based on accreditation status. This means individuals who don't meet the threshold, like a podcast producer, cannot invest even if they wish to. The speaker proposes creating a test, similar to financial certifications, to allow more people to become accredited investors. This could increase participation in investment opportunities. However, there are concerns about potential conflicts of interest since the person administering the test would financially benefit from more accredited investors. To mitigate this, the speaker suggests having an independent proctor and saving a video record of the test-taking process for an audit trail. The use of existing certification platforms and secure video hosting sites could streamline the process. This idea could potentially open up investment opportunities to a wider audience while maintaining regulatory compliance.
Navigating Pro-Rata Rights in Limited Partnerships: Understanding specific rules and regulations is crucial when dealing with pro-rata rights in limited partnerships.
When it comes to acquiring pro-rata rights in limited partnerships, the rules and requirements can vary greatly depending on the specific situation. The speaker shared anecdotes from his experience obtaining a gun license in California, which he compared to the process of investing in limited partnerships. He suggested implementing a threshold amount for investments without additional hoops, but acknowledged that this could involve a combination of requirements such as taking a course and passing a test. Ultimately, the key takeaway is that navigating the world of limited partnerships and pro-rata rights requires careful consideration and a solid understanding of the specific rules and regulations in place.
Understanding Risks and Regulations in Investing: Investing involves financial and emotional risks, having rules and regulations can protect investors, be aware of regulatory capture to make informed decisions.
Investing comes with risks, both financial and emotional, and it's crucial to only invest what you can afford to lose. The speaker shared personal experiences from poker games and investing in Robin Hood, highlighting the importance of having rules and regulations in place to protect investors. He also discussed the concept of regulatory capture, where regulations may benefit larger financial institutions by limiting the supply of capital to certain assets, allowing those institutions to capture more of the market for themselves. It's essential to be aware of these risks and regulations when making investment decisions.
Brokers' relationships and SPACs in real estate transactions: Brokers prioritize relationship preservation, but sellers should focus on highest price. SPACs offer a new, less painful way for companies to go public, attracting both companies and investors.
In real estate transactions, the relationship between brokers is an iterated game where preserving that relationship for future deals is crucial. Brokers may try to influence sellers with unsolicited advice, but sellers should focus on getting the highest price for their property. A potential solution to incentivize brokers is tiered carry, where they receive a larger commission for selling properties above a certain price. The real estate industry has seen a surge in Special-Purpose Acquisition Companies (SPACs) IPOs in recent years, offering investors a new way to participate in the public market. SPACs are easier and less painful than traditional IPOs, making them an attractive option for companies and investors alike. Bill Gurley, a prominent venture capitalist, has recently embraced SPACs after previously advocating against them due to concerns over regulatory capture. The trend towards SPACs is changing the landscape of public offerings and is expected to continue.
Embracing the SPAC model for fundraising: Chamath Palihapitiya shifted from traditional fundraising to SPACs for control, avoiding validation from institutions and the grueling fundraising process, inspiring others to follow suit.
Chamath Palihapitiya, a successful entrepreneur and investor, grew disillusioned with the traditional fundraising process and validating himself through institutional investors. Instead, he embraced the SPAC (Special Purpose Acquisition Company) model, which allows him to raise large sums of money directly from investors without the need for institutional validation. This shift was inspired by his past experiences of struggling for validation in the industry and realizing that he could provide more value by investing in companies and inviting others to join him. The SPAC model also allows him to maintain control and avoid the grueling fundraising process, enabling him to focus on creating value for his investors. This trend is not unique to Chamath, as other successful entrepreneurs and personalities are also adopting this approach, demonstrating a shift in power dynamics in the investment world.
Investor backing can boost a company's value and momentum: Reputable investors or accelerators can validate a company, potentially leading to the next round of funding. A new trend is using SPACs to create a rolling fund for accelerators and syndicates, providing enterprise value and transparency.
The backing of reputable investors or accelerators can significantly enhance a company's value and momentum. This is often referred to as the "stamp in your passport" effect, where each investment or partnership serves as validation and can expedite the next round of funding. A new trend emerging in this space is the use of Special Purpose Acquisition Companies (SPACs) to create a rolling fund for accelerators and syndicates. This would allow the entity to invest the SPAC's cash and create its own holding company, with the potential for future returns. The speaker is considering this option and even suggested the name "Rolling SPAC." Ultimately, this approach would provide enterprise value to the operating company as an investor, while also allowing for transparency through disclosed holdings. When choosing investments, the speaker suggested considering top tech companies like Airbnb, Asana, Thread Up, Qualtrics, Palantir, and Ant Financial (formerly Alipay) and committing a million dollars to each of your top two choices, with the understanding that you cannot touch the funds for 10 years.
Consider both potential returns and margin of safety when investing: Investors should evaluate potential returns (IRR hurdle) and safety (margin of safety) before making long-term investment bets.
When making a long-term investment bet, it's important to consider both the potential for high compounding returns (IRR hurdle) and the margin of safety. Airbnb was identified as a potential investment with a decent margin of safety due to its current bounce back and potential for continued growth. However, some investors prioritize higher returns over safety and may choose companies like Qualtrics, which is run by a strong CEO and has the potential to be a juggernaut in its industry. Ultimately, it's crucial to do thorough research before making an investment decision.
Comparing Airbnb and Asana's Long-Term Growth Potential: The speaker believes Asana has higher long-term growth potential than Airbnb and compares it to Qualtrics, with a strong belief it could be worth 10x or even 50x in value in 10 years. He also emphasizes the importance of infrastructure and creative gathering platforms like Fortnite, which generates over a billion dollars in revenue annually.
The speaker is making a long-term investment decision between Airbnb and Asana, with a stronger belief in Asana's potential for higher returns. He compares it to Qualtrics, which he thinks could be 10x or even 50x in value in 10 years. The speaker also mentions Amazon as a safe investment due to its growth and cash flow dynamics, but expresses caution against the "flight to quality" effect, where investors seek safety in companies during a crisis. He also discusses Clubhouse's high valuation and the potential impact of Epic Games' acquisition of House Party. The speaker emphasizes the importance of infrastructure and gathering creative acts and creators online, as seen in Fortnite's success. Although the exact revenue percentage of Fortnite within Epic Games is unknown, it is believed to generate over a billion dollars in revenue annually. Overall, the speaker's investment strategy is focused on long-term growth potential and the power of infrastructure to support creative and gathering platforms.
Monetizing Unreal Engine: From Demos to Podcasts: Understand the costs and benefits of various monetization strategies, be selective with sponsors, and prioritize adding value to the content.
Epic Games, the creator of Unreal Engine, used their impressive demo as a money-making machine, much like Amazon's first customer being AWS. They saw potential in monetizing their services, from the engine to online services to live ops to payments to a store. The podcast discussed their own experience with monetization, revealing that their podcast only makes half of their income, with sponsorships being the other half. They have been selective with sponsors, only accepting those that add value to the content. One potential sponsor, offering a high-interest rate for an upfront payment, was turned down due to concerns about the potential negative impact on their business and their founders' experiences. The podcast hosts emphasized the importance of understanding the true costs and benefits of various monetization strategies.
Showing up consistently and with passion is crucial for podcast success: Consistently show up, put in the work, build a community, and reinvest revenue for marketing and growth to succeed in podcasting
Consistency and passion are key to building a successful podcast business. The speakers discussed their experience with "Acquired," a podcast they run as a side project, and how they've grown it from humble beginnings to a larger operation. They emphasized the importance of showing up regularly and putting in the work, even when it's not yet profitable. They also mentioned the importance of community building and deal flow. The speakers shared that they've learned a lot from doing the show and have enjoyed the process, which they believe is essential for long-term success. They recommended taking a portion of the revenue and reinvesting it back into marketing and growth efforts. Ultimately, they encouraged others to pursue podcasting if they're passionate about it and are willing to put in the time and effort. As Peter Rojas, a successful podcaster, once said, "It's a secret to blogging, and it really is a secret to podcasting, which is showing up."
Experimenting with formats and frequency for podcast success: Consistently experimenting with formats and frequency keeps podcast content fresh and engaging for audiences. Balance consistency with new ideas to maintain listener interest.
Experimentation and frequency are key elements for a successful podcast. Jason Calacanis, a podcast host, emphasizes the importance of trying new formats and solo episodes to keep the content fresh and engaging for the audience. He suggests separating long-form interviews into shorter episodes or even doing emergency pods to cover breaking news. Frequency is also crucial, but it should not compromise the quality of the content. Hosts should aim for consistency while allowing room for experimentation and trying new things. Tim Ferriss is an example of someone who successfully experimented with different formats, such as having guests answer questions from the audience. Overall, the key is to find a balance between consistency and experimentation to keep the audience engaged and coming back for more.
Experience a new kind of ramen: Try Sukiyaki-style ramen with fresh buckwheat noodles and rich anchovy sauce, topped off with hot water for a unique two-thirds soup experience.
Jason introduced the hosts to a unique ramen experience at Tie Shokan in San Francisco. Unlike traditional ramen with watery soup and terrible noodles, this Sukiyaki-style ramen offers fresh buckwheat noodles dipped in a thick, rich anchovy sauce. After slurping up the noodles, a hot water kettle is used to top off the dish and create a two-thirds soup. The hosts are excited to try this new ramen experience together and share it on their podcast. They also expressed their gratitude to their sponsors and encouraged listeners to support them on choir.fm. Overall, the conversation highlighted the importance of trying new things and sharing unique experiences.
