Hi, everyone. You're listening to HBS After Hours.
I'm Yang -mi Moon, and I'm here again tonight with my buddies, Felix Oberholzer G and Mihir Desai.
Hi, guys. Hey, how are you?
I'm Mihi. Hey, so spring is here in Boston, finally.
Finally. Amazing. It's amazing.
We have to wait. I know.
There's a temptation to play hooky on days like today, but I trust that you both didn't do that.
Not so much. Yeah. I showed up.
I will say when spring gets so delayed, it's even more beautiful than it usually is.
Right? The sky's bluer, and - Everybody's in a good mood.
Everyone's in a great mood, and you just pay for it with like a month of pain that we had for last month.
But besides that, it's great.
So there's been an interesting development for our podcast, and that is we've started to get mail, which is really fun.
So I thought what I'd do to kick us off is I would share my favorite piece of mail that we've gotten so far.
And Mihir, I'm going to throw this to you because this is about one of the topics that you had us talk about last week.
Yeah. So this is just great.
It's from Aaron Stark, who's actually a graduate of the school.
And he wrote to us about the gender wage gap piece.
He just provided this incredible historical example from about 130 years ago, and the Waltham Watch Company, which apparently was the Facebook of its day, and their efforts to do exactly the kinds of things we were talking about, which is just equal pay for equal work, and how they experimented with daycare on location.
And it's just a spectacular example of how, in a way, how persistent the issues are, but also of an organization 130 years ago thinking deeply about a problem that we still struggle with.
The best thing is he enclosed that photo of the company.
It's from a 130 year old photo of this company and the daycare that they were providing for the women that were working there.
Yeah, no, it was spectacular.
That was really pretty cool.
Well, having gotten this email, I think we want to love to hear from people.
And in fact, we've set up an email address.
That's right. Purposely for that, so go ahead, yeah.
It's hbsafterhours at gmail .com.
We love to get emails, so send in your emails.
Yeah, absolutely. That would be fantastic.
Send us things. Yes.
Okay. So, Felix, I know you brought in a topic for us to talk about.
I did. I want to talk about Apple's acquisition of this app.
It's a magazine subscription app called Texture.
Okay. All right. And then I also have a topic I brought in having to do with the big tech giants, so those are our two topics for tonight.
Okay, Felix, why don't you get us started?
Yeah. So, you probably saw Apple bought Texture.
So, this is an app that provides access to about 200 magazines.
So, you pay a monthly subscription fee.
It's very much like Netflix.
And one of the ideas that people have been talking about is that it's going to be folded into Apple News.
And this is sort of what we're beginning to see is the Netflix of other things.
So, you might remember that Apple bought Beats not so long ago with Spotify -like ambitions.
And then before that, they bought BookLamp, which people described as the Pandora of books.
So, let me ask you, is there such a thing?
Can there be something like the Netflix of News?
Well, I have to say, I think this is very exciting.
So, what is the problem they're dealing with?
I think the problem I'm dealing with is they're all these magazines.
I want to read them all.
I don't really want to subscribe to them all.
And I want to get the best of those magazine articles.
That's a real problem for me.
And so, the possibility of having a monthly service that curates that and provides it to me in a really beautiful way, I think that's exciting.
So, I just personally, I find it like an attractive possibility.
And then business -wise, I think it's super interesting.
I think it's a real shot across the bow at Facebook and Google.
You know, they're sending a signal about what they want to become.
Credibility and journalism, high -quality pieces.
Yeah, I mean, I think even in the announcement, they kind of took a shot at them, right?
They were like, yeah, you know, those guys, they've been making money off the publishers, and they don't do anything, and they don't curate it, they don't control.
And I think Apple's trying to take the high ground, and like, you know, we're going to be a credible provider, and we're going to share the economics, right?
Because, I mean, the worst part about Facebook and Google is they don't share the economics.
And these guys share the economics of the articles.
So, I think it's hugely interesting.
What do you think, Yangmi?
So, I find it to be a really compelling proposition as well, whenever a service provider provides both huge amount of choice and really great curation, I love that combination.
I'm less optimistic about the economic potential, which is different than saying I don't think they can make money doing it.
I just worry about the market size for a business like this and people's willingness to pay.
I'm sure I'm not the first person to say this, but in some ways there's already a Netflix of news and it's called the internet, right?
And the subscription price happens to be zero.
Exactly. There's a huge amount of content out there.
There are a lot of mechanisms by which people sift through the content and are able to make their way to the things that they want, and they don't pay for it.
And I think for a lot of people, that's fine.
And so, the alternative is that for a lot of people.
Now, I do believe that there's a subset of people who really care about having access to things they would have missed otherwise.
And so, I think it's a compelling value proposition.
I just don't know how big the market size is.
What do you think, Felix?
So, my sense is I share your skepticism because there are apps like Flipboard that do exactly this sounds very much like a Flipboard, except you will have to pay $10 per month.
And Flipboard is free.
And so, the question I think generally in the production dissemination of news is now how do you compete with free?
How do you what is that?
Let me make this maybe even more general.
Think about newspapers, big newspapers like The New York Times doing a fabulous job producing news.
It's actually quite interesting to see when The New York Times breaks the story, how literally that story travels from place to place through the internet, even globally.
Are you optimistic about The New York Times' The Wall Street Journal's ability to keep doing this in the face of competition with free?
Well, I think it's like many things in the internet, which is the biggest and the best get bigger and better.
And a lot of the smaller players fall through, right?
So, I think The New York Times is going to do fantastic.
I think The Wall Street Journal is going to do fantastic.
The question is the second tier players, you know, is the Boston Herald going to survive?
Or, you know, is the Providence Journal bulletin going to survive?
That's the deeper problem.
And the local news problem, I think, is the real issue.
I think the national news issues will continue to be surfaced and there'll be a vibrant press.
It's really the local stuff I worry about.
So again, I think I might be less optimistic even about The New York Times and The Wall Street Journal.
I think The Wall Street Journal is a slightly different beast.
But The New York Times, first of all, I think all the national newspapers, the ones that are doing really well, we're sort of in a bubble right now, sort of the Trump bubble of news consumption.
So that's the first thing.
But the second thing is their ability to dictate what we talk about depends on their cultural relevance.
And it's hard for me to imagine that next generation regarding The New York Times with the same kind of esteem and placing the same kind of credibility on it as an institution that we do.
I remember when I went to college, one of the first things I did as I met my roommates in college is we collectively said, okay, we need to get a subscription to The New York Times.
Because it was our way of feeling like we were entering adulthood and we were trying to pretend we knew things.
But it's funny, if I think about college kids now, the likelihood that they enter college and they think, oh, this is a publication that we need to have access to on a regular basis, I think that doesn't even enter their minds.
All of that news has become so completely unbundled.
So one of the interesting observations is though that the number of digital subscribers to The New York Times keeps going up.
So they're adding about 150 ,000 new subscribers each quarter.
They're now at 2 .6 million people who subscribe.
And one of the fascinating things about newspaper economics is if you could magically jump into an old digital future, you actually don't need that big an audience in order to survive.
And the reason is that, yes, you'll have a smaller audience and maybe they pay less than the advertisers used to pay, but you have a whole bunch of costs that you don't have.
You no longer need to print.
You no longer need to distribute the newspaper that is being printed.
Wait, so you mean so much of the economic baggage right now comes from their legacy business?
Yes, and having to hold both of them at the same time.
That's right, that's exactly right.
So when you look at the subscription prices of The New York Times, they do something very funny.
You would think, we're oriented towards the future.
We're making digital only subscriptions super attractive and then print is going to just go up in price and we shepherd everyone to the digital subscription.
If you look at the prices that they have, that's not what they do.
There's big incentives to subscribe to the Sunday paper.
Why? Oh, because the Sunday paper has all these ads.
And so the problem of newspaper companies is not so much, in my view, the end game, the future.
There with a limited size audience and maybe just the old people like us who have gotten used to reading the paper.
But the problem is the transition.
You're sitting on this incredible block of fixed cost that doesn't move with dwindling print subscriptions.
But then the other piece of that is that even though they're profitable, they're still, relatively speaking, small businesses.
So The New York Times is an example.
What is it? A two, $3 billion business?
It's a tiny business.
And the only thing that gives it any kind of weight is its cultural relevance.
Yes. And so the minute it begins to lose that, I mean, I think a larger question is, I mean, this is a little provocative, but do you think The New York Times has gained credibility over the last few years or has it lost credibility over the last few years as an institution?
Yeah. Unfortunately, I think it depends on who you ask.
I think the resources they're putting on news today are incredible.
These reporters are doing incredible work.
And are they more respected?
I think by the people you'd expect, they respect them even more than they ever did.
And for the people who wrote them off, they like completely dismiss them.
It's like, it's just a litmus test.
It's a political litmus test.
What do you think, Felix?
My sense is that just like with many changes in society today, they have become more partisan.
If I read The Times today, my intuition is I often see headlines that speak to partisan sentiment that don't quite match.
Then, you know, after you're one of the few readers who make it to the 17th paragraph, you discover that, yeah, maybe things are not quite as clear cut as the headline suggested.
So in my individual reading experience, definitely they have become more partisan.
It's probably, if you worry about the economics of the newspaper business, it's probably exactly what you should be doing.
You're serving an audience.
And, you know, for people like me, who are probably somewhere in the middle of the political spectrum, we're sort of losing out.
Because just like the politicians flee for the left and the right door, the media move towards where the audience is.
But I think that's a subtle but important shift, because I do think when we were growing up, it was regarded as the objective arbiter of what is journalism, what is important.
And I think there's been a shift.
The thing I'm interested in, in part, is these other organizational forms.
So, for example, ProPublica, which is an investigative body.
That's nonprofit. Not for profit.
And Bezos buying the post, you know, those are totally different ownership models, where you're no longer a public companies.
And in Bezos' case, he can write an infinite number of checks.
And so that's a whole different model.
So it's interesting.
Will the New York Times do well?
The question is, in one sense, from a finance perspective, is that the right ownership structure?
To have some benefactor?
Yeah. Well, in the Times case, it's a family with the B shares.
In Bezos' case, it's a guy who's just going to write checks forever, conceivably.
And in ProPublica's case, it's kind of a nonprofit.
So, to me, part of the question here is in this transition, what organizational form kind of comes to dominate and what do they specialize in?
Can I just come back to texture for a second?
I want to make sure and understand this.
So it is different than flipboard in the following sense.
If texture grows, can't you build a wall around your content?
I know that goes against a lot of thinking.
But if you want the economics to shift in your direction, isn't that the only thing you can do?
Otherwise, we always at the mercy of Google and Facebook and giving it away for free.
But the tension operating in the background is always advertising, financing versus subscription.
And so, yes, I can rely completely on subscription, but my audience will be small.
Or I can pursue a mix model.
So even in the New York Times today, about 60 percent of the revenue, which is a big increase, is from subscriptions.
40 percent is from advertising.
But you cannot give up to 40 percent.
And so, for you to then say, oh, and I shut out all these advertisers who would love to talk to the readers who are not willing to pay a lot for news or for magazines.
That's a very hard trade off to make.
I don't even know how important it is to put a wall around it anyway.
Yeah, maybe. Yeah. Just to give you an example.
So about a week and a half ago, I was talking to Eugene Soltis for this podcast, and he gave a recommendation for a site called the browser .com.
And he said, oh, I know the browser.
Yes, yes. You pay thirty dollars a year and every day you get sent four articles that this curator has chosen.
The articles themselves are free.
Like if you found them yourselves, you can click on them and they're totally free.
Yeah. But his ability to find them.
And I have to say, I've become a little addicted to it because they are fantastically curated.
This is even true for the Times, right?
The Times paywall is leaky.
Yeah, that is. You have access and then depending on where you come from, from social media, from somewhere else.
But it's strategically leaky.
It's strategically leaky, but it's leaky for that same reason that some people will be willing to pay for curation and some people maybe to go back to your point about cultural relevance.
I think that is highly contested today.
Do you guys think in 10 years, the New York Times will be stronger than it is today or weaker?
I think it will be stronger.
Stronger. You do? Yeah, absolutely.
Do you think there'll be a print version of it, Felix?
I don't think so. That will be gone.
I will be very surprised if there was a print version 10 years from now.
Interesting. Yeah, fascinating.
Thanks, guys. I want to talk to you guys now about four of the big tech giants.
The four that I want to talk about are Facebook, Amazon, Apple, and Alphabet slash Google.
And the reason I want to talk to you guys about this is whenever one of those names come up now, when I'm in the classroom, when I'm in conversation with colleagues, in any context, there's just a growing sense that these four companies have gotten so big and so powerful, perhaps even too big to fail.
I, on the other hand, believe that each one of these four companies is vulnerable in a particular way.
So I have three questions for you, and then I want to dig into it a little bit.
First of all, do you think that each one of these four companies is vulnerable as well?
Oh, yeah, I think everybody's vulnerable.
I mean, we can talk about which ones in more different ways.
Differences, but yes.
There's some vulnerability for...
Question number two.
Which of the four do you believe, right now, as we sit here, is the most vulnerable?
I think it's Apple without any doubt.
I'm very worried about Apple.
What about you, Meir?
I'm going to go with Alphabet and Google.
Wow. Yeah. I'm going to go with Apple.
Should we dig? No, no, no.
One more question. Question number three, and then we'll dig in.
Question number three is, which of the four is the least vulnerable?
I'm going to go with Alphabet slash Google.
All right, so we'll bring it on.
I'm going to go with Amazon.
I'm going to go with Facebook.
So we got a lot of diversity here.
Let's dig in. All right, let's dig in.
So let's start with Facebook, just to get it out of the way.
Okay. So I think Facebook is so intertwined in our lives that what they do, technically speaking, is of course there's a million companies who could do exactly this.
And by the way, they could build a more beautiful website and everything, but it's a little bit like trying to move the center of a city, the place where people assemble in front of the church.
How do you do that?
The problem is if somehow you could move everyone to a next place, that of course would be easy, but that's not possible.
So I'm just giving you a few examples.
I have to watch my nephews and nieces play soccer, but I'm also part of other groups, political groups, music.
Even though I'm not a heavy Facebook user, there are so many social things built around Facebook that I was not surprised at all, given the storm of outrage that we experienced.
What has happened in the last couple of days?
A, no one quits their Facebook.
B, Facebook has just made the decision to make more advertising space available under service.
Why is that? Because there's unprecedented demand.
Okay. So A, I just deleted my Facebook account after our conversation a couple of weeks ago.
So I am one of the people who deleted.
So now you're socially totally isolated.
Well, I was preferr.
Oh, okay. It's the story of my life.
I'm perfectly happy that way.
Second, you didn't mention any regulatory threat, any possibility of changes to what their business model is because of the questions about privacy and people rethinking data protection.
And that seems like a huge oversight.
So just today, there was a super interesting article about the expected changes as a result of the European privacy legislation that will go into effect sometime in late May.
If you're Google and if you're Apple, and if you're one of the big guys, it's easy to get people to consent because they have an idea what these services do.
If you're at a company called No One and no one has ever heard of you, there's zero chance that you will give consent.
And so the expectation is that actually Google and Facebook's market share will go up.
I'm telling you guys, regulation is going to make them stronger.
That's what you made that point?
Absolutely. I'm going to move us on though, because we've talked about Facebook a lot.
Apple. So Felix, you said you are very worried about Apple.
I'm very worried about Apple.
Apple is the one I'm the most worried about as well.
So I started to get worried when I saw, do you remember the IP lawsuits between Samsung and Apple?
And that silly debate around who has invented the round edges that then make the phone so different.
When that happens between companies that were arguing about trivial details of design, I know there's no differentiation left.
I know that Apple phone is a wonderful, wonderful phone, and it's just about as good as many phones that many people produce.
And so then the question is, what is next?
Well, I think in general, what I see in the digital space is services next.
So services in Apple is about $30 billion today.
That's less than 15 % of revenue.
And then they do a, really, like I should be super excited about them buying beats, such a small business.
I should be super excited about them buying book lamp, such a small business.
That's desperation.
Wait, you want them to be buying big businesses?
What do you want them to be doing?
They're throwing off like $60 billion a cash a year.
From phones. That's right.
And from other devices, but yeah.
From phones. And that's a dying business.
This is the problem, which is people have been talking about the death of Apple for the last eight years.
It's been dramatically overstated, right?
The economics of their business are amazing.
Will there be another big device?
Maybe, maybe not. Their economics are solid when they're just iterating new devices.
And you just dismissed $30 billion of services revenue as if it was nothing.
They built $30 billion of services revenue.
That's something. And there's a lot of runway ahead.
So I'm on Felix's side here.
So I'll say, I'll say three things.
So number one, they're losing in the world.
They are losing in China.
They are irrelevant in India.
They're losing in major markets.
Number two, the services piece that Felix described, $30 billion, most of that's from their app store.
So even the $30 billion I think is somewhat deceptive.
This is a $200 billion company.
And then the third thing I'll say is I think they're behind in technology.
Out of all four of these companies, that's the furthest behind in artificial intelligence, furthest behind in machine learning.
Now, the flip side to that is they have the strongest balance sheet in the world, perhaps.
And I liked him cook.
I would never underestimate him.
But if you really listen to what you just said, Meher, it feels like they're in harvest mode.
In other words, yes, they can keep going.
They can keep producing, but they're harvesting.
They're harvesting the fruits of innovation that they pioneered over the last month.
And what, like Alphabet, which makes all its money from search algorithms, is like not harvesting.
So I mean, try to compare a conversation with the Google Assistant to a conversation with Siri.
But that's a sign of how far behind they are in artificial intelligence.
But let's move to Alphabet, Google.
I'll give you two things.
I mean, at least two things.
One is I think they're the most concentrated in their businesses.
They're so concentrated on search, they haven't developed other businesses to speak of.
And they failed at developing other businesses.
It's not clear to me how search evolves over time.
There's some interesting new browsers that are popping up to avoid the data problems that people feel with Google.
And they appear to be very, very good.
There's one I think called, it's called DuckDuckGoose or something.
And then last, I will say I don't buy into the controlling shareholder structure.
And this may be a little bit nerdy.
Yeah. I think look, they have demonstrated that.
You're talking about the dual class thing.
Well, they have 10x shares, the three guys have 10x shares.
They're not the only ones.
They're not the only ones.
Many, many companies.
They're not the only ones, but they have a problem with spending on things that go nowhere.
And I think that's problematic.
And that's the, their whole vision is like moonshot everything, which is fine.
But I think there's an enormous risk that if the search business somehow pauses, then there's nothing else.
There's nothing else there.
And I would worry about that problem.
I'm being a little more aggressive about it because you guys are so like pro -Alphabet, but I think that's worrisome.
And I don't like the governance structure.
I don't like the governance structure at all.
So tell me why I'm wrong.
Well, I don't know if you're wrong, but here's why I feel like they're the most robust of the four right now.
So number one, I feel like their basic service, which is their search, is the most functionally vital of all.
If Google went down today.
Wouldn't we all just go to Bing?
You know, I'm just serious.
Are you being serious?
I'm being absolutely serious.
There's no comparison.
They are light years ahead in terms of the artificial intelligence embedded in their search engine relative to Bing.
It's the closest thing to a utility in the West that I can think of.
Now, not in all parts of the world, but in the West.
I think it's the closest thing to a utility.
So the second thing I would say is that the bulk of their revenue comes from, I would argue, the most robust form of advertising, which is their homepage search based advertising, because they're not chasing you.
This is not targeting you and chasing you.
This is you typing in, I'm looking for beaches in Maine, and they're giving you back beaches in Maine, which is the most robust form of advertising out there.
And it's incredibly lucrative for them.
I agree that they haven't built out an ecosystem of businesses, but they have built out an ecosystem of services that I think has become deeply, deeply ingrained in our lives, whether you're talking about Google Maps, or you're talking about Gmail, or Google Docs, or YouTube, and all of the rest.
And all of that is a mechanism, I think, for them to continue to get better and better, and being able to provide the most sophisticated artificial intelligence in the world.
And I think it's particularly impressive if you think about the privacy conversation that we're having at this moment in time.
If you type in fishing rod into a search box, there is a very high likelihood that you're in the market for a fishing rod.
I don't need to know anything else about you.
That is, I actually don't think we will ever get there, but if we were to move towards a world where advertisers are essentially blind to the identity of people who are online, I cannot think of any other business that will survive as elegantly as Google.
Because they don't actually...
They need so little information.
They still need little information.
They need so little.
So little to produce a really robust advertising model.
They're always being helpful.
You go in and you search for something, and they will serve you back both search results as well as advertising, but it's in response to what you've asked for.
So it's the most...
I guess I want to turn it back on you though, right?
Which is, where is the innovation?
The tools you talked about, they bought YouTube.
Gmail has been around forever and has issues.
I mean, where is the next thing?
That's kind of what we said about Apple, right?
Are they just milking the ad business forever?
I don't think it's milking if intelligence is something that exists along a curve, and they're constantly, constantly moving up that curve.
We just talk about phones.
Android is now by far the dominant operating system for mobile phones.
This to me is like a big change away from the PC desktop now to mobile.
Lots of places when I travel, lots of places, I have Google maps.
Google maps is connected to transportation services, restaurants.
Everything that I want to do revolves now around a mobile service.
And this is what's interesting, Apple versus Google.
It reminds me so much of the time when Apple almost went bankrupt the first time around.
They decided to be small and beautiful and high priced.
And as a result, the thing that really grew the desktop market was just not a market that they could ever capture.
Even at the best of their times, they're, you know, not really relevant.
And I think the same is happening now in mobile devices where the iOS with all its beauty and privacy and things you can love about it, it is just basically not relevant for anyone.
Oh my God, iOS is not relevant for anyone except for the beauty and the privacy.
Yeah. Hello beauty and privacy.
It's 20 % global market share.
And what am I supposed to react to that?
Is that like low or well?
If the competitor has 70 % global market share, it is sort of low.
Why do I need to, why is it the fact that Android operating system is so prevalent?
Why does that make me want to adopt it?
So here's, here's how I'm thinking about why, why the mobile operating system is so important.
When you think about Apple's history and the reason why it declined the first time around, it all had to do with incentives of other companies to co -invest with Apple to produce software at that point in time.
Today we're seeing exactly the same thing.
If I'm a bank in Kazakhstan and I'm thinking about who do I partner with, you know, I want to do this mobile banking thing.
Of course, no one can imagine life without Candy Crush, but if Candy Crush becomes popular, it gets ported to all the mobile operating system.
If you're thinking about expensive compliments to the mobile operating system, that's no longer true.
Now I'm looking at what kinds of phones do people have and I integrate with the mobile operating systems.
So you're not going to integrate with Apple?
I'm not going to integrate with Apple because no one has Apple.
So Felix, what's interesting about what you say in this notion of compliments, if you had gone to CES, the big consumer electronics show in Vegas, I don't know, eight, nine years ago, Apple was the center of CES and every company was trying to figure out how to position itself within that Apple ecosystem.
If you went to CES last year, you would have felt like Apple was completely non -existent, but all the innovation, everything people were showcasing had nothing to do with Apple anymore, which is just a small case.
But that's interesting.
I want to say I dug in my heels a little bit, but you guys made a lot of progress with me.
But I do feel like we've made you worried about one of your favorite brands, but anyway, I want to hear about Amazon because you named that as the one that you...
I just think they are so deep in people's lives and consumers.
And I think that is a really exciting thing.
I think their strategies in brick and mortar is really interesting.
I think they're doing some really fascinating stuff there.
I think they have an economic model that is fantastic.
And I don't know who really gives them a run for their money.
So I know this is going to sound very strange, but sometimes I think of Amazon the way I think of Walmart historically.
You know how Walmart built this amazing machine in the United States?
And then you think, oh my God, these guys are going to take over the world.
And then that, basically with few exceptions, Mexico and so on, that didn't happen.
And the reason was that it's a brick and mortar company.
It's a logistics company.
And so I think one vulnerability that will be really interesting to watch is as say Amazon tries to go into Eastern Europe, where you have Allegro that is the dominant player.
Can they really play?
I'm reading the flip card acquisition as, can't really build the thing from scratch.
We have to buy someone, which is of course exactly Walmart's story.
I don't think that's true.
I think Amazon was kicking flip cards.
But anyway, that's a separate conversation.
Yeah. But Walmart is going to win that deal, right?
We will. Yeah, we'll have to see.
But in a way where Walmart made very, where they made the right acquisitions of a fairly big, important player, they ended up being globally successful.
And everywhere else they completely struck out.
And sometimes I'm wondering, this sounds so strange, even in my head, sometimes I'm wondering if Amazon is just a new Walmart.
That's pretty mind bending.
But I think it's interesting.
I think the physical spaces is really interesting.
Okay, guys, we don't have that much time left.
But it's time for our picks.
Who wants to go first?
I'll go first. As probably you also, I love reading The Economist.
And one of the temptations, obviously, when you look at the magazine, one of the temptations is to read the leaders, you know, make sense of the news today.
But actually, what I end up loving is I go to the obituary first.
You're so strange. I love obituary too.
Such a strange human being.
Their obituaries are amazing.
Sometimes it's people I have never even heard of.
And there's always something really quirky, something that sort of speaks to who the person really is.
So the director died.
And they described how he really didn't like professional actors.
Okay, so what do you do?
His idea, which I thought was totally brilliant, he had two cameras always.
And you would never know which one is wrong.
Oh, that's great. So the method actor doesn't actually know which camera to act towards.
And that's how he got more natural behavior, more interesting things.
And I got this from the obituary.
That's fantastic. All right, what about you?
I love obituaries too, by the way.
I mean, I think they're fantastic.
So I have a little bit of a geeky suggestion, which is a working paper that came out at the end of last year by Jerry Otten and David Splinter, who are two very good people at the Treasury Department.
They have a paper that undercuts, I think, very effectively the Piketty and Sayyas notion of income inequality.
Piketty and Sayyas, the original work goes back, I think, almost 10 or 12 years now.
And it is about rising income inequality.
Here's the issue. First, about five years ago, Alan Arback and Kevin Hassett wrote a devastating critique of the Piketty book and some of that original analysis.
This is something that completely undercuts the idea that income inequality has grown significantly over the last 50 years.
And in fact, the estimates, it is, by the way, still the case, income inequality has grown, but not nearly as much as the popular notion is.
I think it's so important because I've, you know, I mean, I don't know, not to get on a soap box, but there's this notion that the world is going to hell in a hand basket and income inequality is going through the roof and everybody, well, wait a second, the data is not nearly what you think it is.
And so, I don't know, I think it's just a wonderful, yeah, and it's a wonderful corrective and it's not getting the press it deserves because it goes so against kind of what we all want to believe or we think have now come to believe.
And it's a really careful piece of work.
So, Jerry Otten and David splinter, and it's got the most boring title.
It's like income inequality in the United States.
But I think it's really worth reading.
Definitely going to check that out.
Okay. So, my recommendation this week is a 15 minute video, even though there's actually no video and it's only audio.
Recently Southwest airlines, they had that engine failure in mid -air, right?
And the engine blew out.
It blew open a window and there was a terrifying 15 minutes for that plane.
And you can go online and you can listen to the pilot of that plane, land the plane.
And it's the conversation between her and air traffic control.
Her name is Tammy Jo Schultz.
She's among the first female Navy fighter pilots ever.
And that's how she trained.
She was never in combat because she wasn't allowed, but she became an instructor and then she became a pilot for Southwest airlines.
And she's piloting this plane.
And suddenly there's this terrifying moment and you can hear her.
She is cool as a cucumber.
The number of commercial female pilots is apparently like 5%.
And sometimes you board a plane and you do register.
And it's just, I gotta tell you, first of all, I'm always inspired by ordinary people doing extraordinary things and being reminded that so many ordinary people are quite extraordinary.
But I have to say when you see a woman like in a position like that, just keep, oh.
That's great. That is great.
It's really amazing to listen to.
So I think that's a, can I ask you a question with this?
Yeah, yeah. So I think about Sully Sullenberger.
Yes. So it's like that.
But is it, but here's the question, which is why do I know and why do most people know Sully Sullenberger's name?
And I don't think people know Tammy Jo's name.
Is that. I don't know, but I have to tell you this woman's cool.
There's a moment where she says to the air traffic controller, you know, we've lost part of the plane.
And you can hear the air traffic controller saying, excuse me, and she says, yes, we've lost part of the plane.
I need to land immediately.
You know, it's really something.
That's a great suggestion.
It's really something.
Anyway, thanks everyone for listening.
This is HBS Afterhouse.
It's an audio. It's just.
It's audio, but like you can, I could only get it like on YouTube.
So with the transcript.
And what's incredible is how mundane it is.
It's like, you know, she's just laying in the plane and she's organizing like emergency personnel to come.
