Summer Stories to Savor | After Hours

Ted Audio Collective

Hello everyone, you're listening to After Hours, I'm Felix.

I'm Meer.

And it's just the two of us, Felix.

It's just the two of us and a very special episode.

Indeed, we've done this, I think, every year.

It's our opportunity to think about the summer.

We're getting ready for the final show, which will be next week with recommendations.

But it's our chance to think about what we're looking forward to thinking about over the coming months.

I love it for one reason alone.

And that is at the end of the summer, I like to look back and see.

Did we pick the most important stories?

Were we able to see how the stories would evolve?

So that alone, I think, is a fabulous exercise and something I love about this particular episode.

And this year, we're going to do it a little differently.

Yes.

We had a great idea, I think.

Yeah.

Let's see how it's going to work out.

Sounds great. Let's go.

All right, Felix, the story's to watch for the summer.

What do you got?

So one story I watch will be the split of Sequoia Capital.

It came as a big surprise, I think, to everyone.

So they will split into three different organizations, one that is focused on the US,

one that is focused on China, and then one that is focused on India and Southeast Asia.

And it's completely fascinating to me the many reasons why they did it.

One is portfolio conflict.

So sometimes an entity in a particular region couldn't really invest in, say,

a promising startup because, say, Sequoia Capital in the US already had a competitor.

I think this was one of the reasons why the India organization did not invest in the razor pay,

why some of their investment ideas around no code or low code startups didn't really fly the way they wanted.

There's a second reason I think that has to do with the person that main investor in China,

who's leading the China organization, Niel Chen, who's just had a wonderful, wonderful curve

and just contributed in amazing ways to Sequoia.

In some sense, his brand is probably as prominent, as important as the Sequoia brand.

And so maybe it's in part about the profit sharing arrangements and the degree to which they now reflect as prominence.

But then perhaps most important and most interesting is just the geopolitics of it all,

with the rise in tensions between China and the United States.

It's actually even for investors. It's now maybe a good idea to stay out of each other's lanes.

On this last portion, I'm not completely convinced that that's going to work so well,

in part because if you look at the latest round of financing for the China company,

roughly half of its funds come from North America.

And so how easy it is to separate it out, I think will be seen, but completely interesting and fascinating story to watch for sure.

I totally agree. And it came as a surprise.

And I love it because I think it heralds maybe two things.

One is, I think it tells us that maybe venture capital should be getting back to its roots a little bit.

So we have had these kind of growth of mega funds.

And Sequoia in some sense is splitting.

And as a consequence, each fund will be, I think, more nimble, which will be closer to the ground,

better incentives for the reason you laid out, which is the sharing of Kerry will be, I think, a little bit more fair across these places.

And then, of course, we know that geographies incredibly important to venture capital.

You succeed when you are close by the companies that you are doing.

So that all, I think, feels very good, almost like a return of VC to its roots.

I will say it's interesting because it came at the same time, Felix, as I believe,

Andres and Horowitz announcing a London expansion.

That's right.

Yeah.

And so it's really interesting, because I think of Andres and Horowitz as being the other firm that's really doing interesting stuff in the venture space,

because they have really added on layers and layers of expertise and costs to their venture capital model.

And by going into Europe, just as Sequoia is kind of breaking apart, it really seems like we're going to have a nice

little experiment to view the results of in a couple of years.

Yeah.

But I think Sequoia got it just right, and it should be really interesting to watch.

Yeah.

I agree.

So what's one of the stories that you'll be watching me here?

Well, I'm afraid you're probably going to be used to this, but I am just so obsessed with pricing, Felix.

The pricing of everything?

Well, yes.

Over the last 12 months, I've just gotten obsessed with pricing.

You know, we talked a little bit about the context of food and consumer goods,

but pricing has just gotten so fascinating to me.

For a long time, I think, in a very low inflation world, people just were asleep at the wheel with pricing.

And we have seen such remarkable things happen on pricing.

So first, we've seen these price volume tradeoffs that people are making.

Yeah.

Just as one recent example, Pepsi had organic revenue growth of 14% in the most recent quarter,

and that was 17% price and 3% volume declines.

Yeah.

And that is a story you can tell for almost not all, but almost all kind of consumer goods companies.

It's like massive price increases and willingness to take pretty big volume hits upwards of high single-digit volume hits in some cases.

So watching how that pans out and watching if they are willing to keep taking those volume declines,

and what happens to those volume declines?

Do they accelerate or do they stabilize?

But pricing more generally is getting really interesting.

So we see more variable and dynamic pricing in lots of places.

We see Disney as one example going to a highly variable and highly dynamic pricing.

We see movie theaters going to dynamic pricing and lots of different pricing within a similar theater.

I just happen to look up movie theater tickets for a show this weekend, and it was 27 bucks for like not a great seat.

And there was highly heterogeneous pricing within that theater.

So you see that.

And then finally, maybe the most interesting pricing story of all was and will continue to be Tesla.

So Tesla has cut prices dramatically at the beginning of the year and now started raising prices again.

And Musk has made reference to the idea of dynamic pricing because he feels that he has such good understanding of the customers

because they don't have dealers that he's able to vary price very quickly.

And of course, one has to wonder if that's at all a good thing, meaning once you go to dynamic pricing,

which not as if the airline industry is a great story of value-max misage.

And then on making customers understand that, well wait a second when a price cut happens,

how are they going to respond or they're going to wait?

And then you have to train customers to think about this.

So I just think pricing over the summer is going to be fasting to watch.

As inflation comes down, will firms continue to push prices?

How much so? Will they be willing to live with volume declines?

And then will the Musk experiment with pricing pay off?

So lots of things to watch in pricing, Land.

Yeah.

It's completely fascinating for all the reasons that you pointed out.

And I'm curious how you think about what's going on in pricing and how that's related to the overall.

Of these companies and these industries.

I think beverages is a great example where we have this explosion in the number of brands.

Mostly reflecting the client in fixed costs.

I used to have a national advertising campaign, huge fixed costs.

Now I have social media.

And so it's much easier for smaller brands to get the attention of consumers and to come to provenance.

Similar in movie theaters, probably not the healthiest of industries.

And so one intuition I have about whenever I see increases in price discrimination is that in part what it reflects is, which is fresh out of ideas.

Yeah, that's interesting.

I think that's one way to read it.

And I think that's true.

I just think people got very sloppy and very sleepy about pricing for a long time.

And I think they've woken up and inflation in their cost inputs made them think about pricing again.

And now they're doing aggressive new things.

But I think you're fundamentally right, which is there is a lot of margin protection going on and willingness to sacrifice volume growth in these settings.

And that is a sign of reduced growth capacity or reduced ideas.

And then separately, I think there's this issue of price discrimination, which I think is perhaps more interesting, which is it's not just about no ideas.

It's about trying to use technology to pluck people off in weird ways.

But I think it's a lot harder than people understand it to be.

And I think it leads to lots of effects as is the case in airlines, which are not necessarily terribly good.

And so watching how that plays out, I think, is going to be really fascinating.

And I think there's another piece of this feel, which is you could do things over the last 12 months that you may not be able to do anymore.

And so what happens when you can't push on price as much as you used to be able to push?

Yes.

And ultimately, like in the example of airlines, much of this might benefit intermediaries that allow consumers to compare prices across many different brands.

So the rise of Amazon, the rise of all the intermediaries in the travel space, all of a sudden before you know it, you share those precious margins with new players that have newfound cloud.

Because in particular for product categories where I'm highly uncertain about the degree of price discrimination, where I think, oh my god, there might be an amazing deal somewhere out there.

How do I find out not by going to my favorite friend, but by going to one of these intermediaries?

Exactly.

Yeah, that's a great point.

Anyway, it should be something fun to watch.

Yeah, fascinating.

I don't know Felix, I feel like I'd love to hear more about your stories, your will and the watch.

But I feel like it would be great to kind of hear from some friends, Felix.

Oh, I totally agree.

Because I mean, yes, I am curious what you'll be watching, but just think about all the people we had on the podcast for the entire year.

When it'd be totally fascinating if we could hear from them what they'll be watching, what they find interesting.

Yeah, I mean, like young me, for example.

The story I'm going to be watching this summer is the one that everyone's talking about, which is generative AI.

And in particular, I'm going to be looking at three dimensions of the story.

The first is just the state of play.

One of the amazing things about this technology is from week to week to see how rapidly it's advancing,

how the video capabilities are changing on almost week to week basis,

how the image capabilities are changing on almost week to week basis.

The second dimension I'm going to be watching is the ripple effects on other companies.

And so already you see so many companies out there pivoting either their business models, pivoting their strategy, pivoting the way they think about their internal functions and their capabilities,

and everything from how they think about talent, to how they think about their operational execution,

to incorporate the new world of generative AI.

A good example just today as I record this is Reddit is at war with itself as a result of a ripple effect associated with the new world of generative AI.

And you're going to see that again and again and again.

And the third is to just watch how this begins to cascade through the investment cycle.

And so we have lived through many investment cycles involving venture capital before.

Right now we appear to be at the beginning of a stage where everything has slowed down except for all of the investment that is pouring into generative AI.

And as we hear is often talked about on this podcast, sometimes these investment cycles play out in a very healthy way

and sometimes they play out in a very unhealthy way.

And so a summer is a very short period of time, but given how rapidly this space is evolving, I would expect that by the end of the summer we could already be in a very different place than we are right now.

So that's one of the things I'll be watching this summer.

No surprise.

Young me has her finger on the pulse of what's happening out there in companies. They're two things that really resonated with me in what she just explained. The first one is yes, we have all of these technological advances, but very quickly I'm convinced across different technologies.

And then it will be commoditized. They will have very similar capabilities. It's increasing very quickly at this moment as she explains, but very quickly will have lots of different technologies to choose from.

And then I think the more interesting question in some sense is how good are you at building products using this particular technology.

And there we see dramatic differences already where slapping a text box onto your website. Yeah, maybe you can do that, but that's not going to be what makes you really successful.

And so I'm paying a lot of attention to companies ability to turn this technology into usable products.

And then the second dimension that I find completely fascinating is the regulatory environment and how quickly it changes you parliament has now just passed what they call the AI act, which I think is globally the first really serious attempt to regulate AI.

And it comes with really important and fascinating restrictions. So for instance, if passed away parliament and visions it at this moment in time, there will be no biometric surveillance in Europe.

They will not engage in predictive policing. One of the most fascinating stipulations I think is that you have to train the algorithm in a way that it does not produce illegal content.

Right. Sounds trivial. Super super complicated to implement. So on all of these fronts regulatory product wise, she's so right. That's one of the big stories of the summer of 2023.

I agree. And well beyond that, potentially, I think two things strike me about it. Felix, the first on your first point as this situation is evolved over the last six or eight months since really chat GPT became well known.

I've become more convinced of the transformational nature of what is happening from a technological perspective. And so I think the disruption we saw it a little bit in the education market with Cheg.

The disruption that it's going to have to existing business models is pretty massive. And that doesn't mean everyone wins. It means there's going to be winners and losers to your point. And I think watching that happen will be fascinating.

Yeah. I am still concerned about Google and understanding how Google will respond. I think you're much more sanguine about this than I am. But I think that's one place to watch it.

But just as I've become more convinced about how interesting the technology is, I've also become more convinced that financial markets are more divorced from reality on it.

You know, for the reason in part that you said, which is that first, it's not clear if any of this is not going to be commoditized. And the run up that we have seen in the last six months that has basically been concentrated in big tech and has been AI driven both in public securities, but to young me.

Point also in private securities has just been massive. Now some of these cases are at least potentially justifiable. So I think it in video is a good example where people conceive of it no longer as a hardware play, but as a software play because of their tools that they put on top of their chips.

But man, there are several hoops to jump through to get you to understand what's happening in financial markets with respect to AI.

And so watching that is going to be the other piece of it because if it turns out that everything takes longer and if it turns out there are not just winners, but lots of losers.

Sorting through that in the next several months and certainly next year is going to be really interesting to watch. So just as the technology is proving robust, I think that in some sense, the financial markets are proving even more divorced from reality.

Is it more a story of winners or losers or is it more a story of a bubble?

You know, I confess it looks to me a lot more like the latter.

Yeah, of course, it's hard to disentangle those two because if a winner is really a winner, that winner can be really big.

But what we see capitalized now is a lot of people winning.

Yeah. And that's the issue. And that looks like this drive phenomena from the 1980s and you know, calm phenomenon of the late 1990s.

It looks just like that worth lots of people are being capitalized as winners, which can't in a some sense really be true. But that should be a really fun one to watch.

Yeah, I don't know about you, but I really love hearing from a friend of the show.

I think in particular, I recall quite fondly hearing from Dolly Chogue from NYU and Lane Higgins from the Wall Street Journal.

The sports episode. Yes. I wonder what stories they'll be watching this summer.

I have been thinking a lot about women's sports. I'm just off from a great few days in Oklahoma City at the Women's College Softball World Series.

And it was a blast. If you love sports, if you love athleticism, if you love entertainment, if you love great crowds, if you love drama,

everything that sports has to offer was there. And it really has me thinking about this tiny fraction of investment in capital that flows into women's sports that is growing now.

And what a good bed it is for the future. It's way overdue. There's great stuff happening. And I'm excited to see what happens in the coming months and years.

I am a self-professed swimmer and I cannot wait for all of the national and international competitions that are going to take place this summer in the swim world.

Mainly because this is our table setter for who's going to become a star in the Paris Olympics.

There's a couple young swimmers from Romania, France, Canada, the United States that I think are going to have a little bit of breakout summers.

You know, US team trials is in June in Indianapolis and then in July through August, Worlds is in Japan. And I cannot wait to see all the fast swimming.

And you know, see who comes out as the next big thing.

It's even wonderful to hear in Lane Higgins voice. I've heard a lot about all these swim events. I think that's the definition of a true fan.

What's interesting to me is this emphasis on new stars. And that I think is completely fascinating in sports more generally.

How maybe not the deeply devoted fans to a particular sport. I'm guessing for them it doesn't really matter that much.

Whether you have a well-known star, whether there is a particular consolation that is interesting.

But when you think about what feather and others have done for tennis, they're really just on the back of a few superstars.

You drag an entire sport and sport category into the public limelight.

And then people start to understand how tennis works and why it's interesting.

And I think what she's describing is sort of this next phase for women swimming.

For some time we haven't had I think a star that really reached the masses.

And if that can happen, it'll be really amazing with enormous economic consequences also.

The latest example is obviously Messi's move to inter Miami.

Yes.

Social media sensation tickets I read went from less than $100 to see them play to now somewhere in the $2.5,000 category.

Basically as a result of one person's involvement.

Yeah, I couldn't agree more. And I think what's interesting about both Dolly and Lane's comments is they are also pointing us towards in some sense smaller settings for watching sports.

Strong attention to what's happening with women's sports teams and the amateurism of the swimming world.

And with Paris coming up, there's just going to be lots of opportunities to see really world-class talent in your country perform at very, very high levels.

And so going to a big sports game to see Messi, that's exciting.

But you know the reality is going to any sports venue where you're actually quite close and you're watching teams that are competing, it's actually extremely exciting.

Yeah.

It's like a Friday night lights kind of experience.

And so I think it's just a great thing to think about for the summer, which is trying to get to an amateur event.

I think the other thing that your comments just triggered in me is the other massive sports story, which I don't think we've understood the full consequences of, is this Saudi LIV live golf, PGA thing.

I mean, man, what a story. And that is one, which is not over just briefly, the Saudi sovereign wealth fund backed this renegade golf association called 54 or LIV.

And they changed the sport.

And then they merged with the PGA. And the PGA had sworn them as enemies. And on a dime, they changed. And now of course politicians are looking into it.

And that's what the whole story and this remarkable way in which just with a pool of capital, they have transformed golf.

Yeah. Golf is traditionally like the 72 whole game. They want to make it a 54 whole game.

It reminds me what's happened in cricket. What's happened in lots of places where a pool of capital can just change the game.

Yeah. And that is going to be extremely fascinating to watch.

And you see the pull of stars, right? In competition between the two golf organizations.

It's all about who can you get exactly. And to your point, Felix, you raised tennis and black men's efforts in tennis.

Yes. I don't know if you remember in our sports episode. And this has something familiar with that, which is basically being a golf superstar is great.

But if you're 40th in the world, it's tough. And so what LIV did is basically underwrite a lot of talent and guarantee salaries.

And so now the PGA is going to have to go through that.

So to your point about stars and how the rents get shared with everyone else, what they're going to try to do in golf is change the rules of the game.

And that's exactly what you were hinting at would happen in tennis.

Yeah. Of course, this wouldn't be complete if we didn't hear from Sarah Green, Carmichael of Bloomberg and Kristen Mugford from HBS, who also are thinking about some stories for us.

This summer, I'm going to be watching the travel industry. There's a few things here I'm especially interested in given that consumer demand is expected to finally be above

pre-pandemic levels. First, can the airlines keep up or are we in for another season of baggage delays and flight cancellations?

Second, can we learn anything about the state of work life balance from how people are behaving this summer?

You know, are people still blending their vacation with a little bit of remote work? Or are people hungry for a cleaner dividing line between their job and their leisure time?

Finally, I'm just interested in what the summer travel season can tell us about the state of the economy. Consumers keep telling posters that they're worried about or recession, and yet then they just keep going out and spending.

So I'm curious to see if we get any clarity on that from how people are actually behaving.

Summer time means big budget movie releases, and I'm so excited to see what we learned about the future of movie theaters this summer.

As you know, movie theaters were hit hard by COVID, it tended strapped, and movie productions were stalled, and late, and this is the first summer we're actually back to a full slate of big releases.

So I am so curious to see if people go back to the theater experience, or if streaming and COVID have forever changed how we want to enjoy movies.

And my guess is what happens is summer may have been applications on the movie industry for the future.

Curious to get your thoughts. I got to say Felix, hearing from all these folks was a great idea. Yeah, it's so nice. It's like a little family reunion.

Exactly. So obviously both Sarah and Kristen have got really interesting ideas. I would say that the most interesting thing about both of them is I just think these services businesses.

So travel in particular, but also theaters and entertainment, it's really where we're going to get the tell on the macro economy. So travel has just been booming.

And yet we're not really convinced at least markets not really convinced that it's a permanent kind of shift yet travel companies keep saying there's like no signs of abating demand.

And similarly with theaters, there's a little bit of a macro tell there too, which is just this desire to kind of go out and enjoy services.

So I think those are two great industries to watch, not just because of their effect on the overall economy or the tell on consumer spending, but also frankly because of inflation.

So the most persistent piece of inflation, which looks like it's been amating quite nicely in the US at least is services inflation.

And so we really need to break the back of services inflation if we want to break the back of inflation generally. So in addition to just being great industries to follow because many of us are engaged in travel and entertainment.

It just happens to be that this summer, it's also going to be a great tell on the macro economy.

You're so right and reading the tea leaves. What all of this means for the macro economy is difficult because you have all of these idiosyncrasies for each of these services industry at one at the same time.

So for instance, in airline travel, the supply chain issues are not really over. They're over for many other parts of the economy, but the delivery of new planes.

Every airline will tell you we're waiting for planes were nervous about will they be delivered on time will they be delivered at all and then even in spare parts.

So spare parts for engines still turn out to be quite scarce. And as a result, we don't quite know is that still pandemic overhang or is it a shift in how these businesses will perform in the future in the case of the movie theater industry.

I'm particularly nervous about AMC. Yeah, I don't really know what's going to happen. They lost 500 million dollars over the course of the last 12 months.

Even their own predictions say that revenue relative to 2019 will probably be half a billion less than they saw prior to the pandemic. This is the fifth year where they lost money. So there it's maybe more a story of substitutes.

I have a personal story where I went to the theater and you know, it was nice to see the big screen much better sound than I have at home. But at the same time I sat right next to a really unruly group of teenagers who didn't pay that much attention to the movie.

And it was mostly about sharing Instagram stories and right talking with one another and it was a little bit of a shock that I had forgotten what it means to maybe watch a movie with many other people and that would be a very different experience.

And so even in the case of the movie industry, how much are we really looking at substitution? How much are we looking at overall demand that will tell us something about the health of the economy, not obvious to me at all.

Yeah, AMC also has some maybe increases associated with it. They also are a poster child of the meme stock frenzy and the aftermath of that.

And so watching how that plays out, my instincts are that it is going to be a viable industry for some players that are maybe providing niche kinds of theater experiences.

But it is hard to see any kind of a return to pre-pandemic levels. But by the way, this is also just an interesting juncture to just mention that streaming will also be fascinating just because of the pricing changes that people are going through.

The sharing password things that Netflix is doing and by the way, the remarkable run up in those stock prices. So that's also an angle on that piece of this, which should be super fasting.

One last thing Felix about your comment about the airlines. The other reason why airlines are fantastic to watch is the labor market. They have constraints on pilots.

And watching how they handle those labor supply shortages also is fascinating for understanding the broader economy. That's the final window I think on it, which is really interesting.

It will be interesting to see if you go through an extended period where you just cannot basically meet demand.

Whether that teaches you something about price discipline in the first place.

Right. That's been my experience over the last couple of months. It's just seeing reduced capacity, seeing remarkable prices.

But the puzzle Felix is airport still feel like more chaotic than ever.

Anyway, I don't know how that all happens. Thank God for capacity constraints. Right. Exactly.

And then of course, episodes that I have such fond memories for is when gel Avery and Amy Bernstein were with us.

And we wanted to make sure to hear from them what they will be watching this summer.

I'll spend the next few months following the growing wave of consumer boycotts of brands who are engaging with social issues brands like Bud Light, Target and now Lego have recently been targets of boycotts following their engagement with LGBTQ plus consumers.

Similar backlash to what we saw several years ago when Nike engaged Colin Kaepernick in its 30th anniversary just do it campaign.

Brand activism has become a core strategy for today's brands and consumers are demanding that brands stand up in the face of the important issues of our time.

But the last few months have been difficult for brands will brands pull back from brand activism in the face of these boycotts or will brands remain true to their values.

I'm fascinated to watch it play out.

One story I'll be watching concerns the labor union movement in the United States.

It's been growing modestly over the last couple of years.

We now have a high profile strike with the writers guild.

But at the same time, we are dealing with economic turmoil. There have been widespread layoffs and the Supreme Court seems to be pretty anti-union.

So I'm very curious to see whether the union movement can continue to grow or not.

Brand activism is one of the really fascinating stories to watch. I completely agree with Jill.

One thing that strikes me as particularly interesting is we get these really big stories.

And I think sometimes significant changes in market share in for a particular set of companies than a particular set of products.

So Modelo now being the number one beer brand in the US displacing Bud Light. That's pretty remarkable.

But at the same time, it's also interesting to see just how few boycotts there are.

Given all the pronouncements that you get, given all the brands that take some stands on social issues, I haven't really done any research on this.

But my casual impression is very few brands get a lot of attention.

Their stance becomes very controversial.

So part of what's so interesting to think about the future of brand activism is should we think of it as, and if things go wrong, they can go horribly wrong.

And you will lose market share and suffer endlessly.

Or will we think of it as, actually, this is on average something that is probably good for employer branding.

It's good for internal dynamics of the firm and the chances that it gets any sort of attention from the public at large.

Those chances are actually quite minimal.

I'm not really sure what I should think, but it's definitely an interesting difference in how you view the future of brand activism.

And indeed, I think we're Jill's pointing us to this summer because I think we'll learn a lot about the persistence of these kinds of issues.

Is it a flash on the pan, these boycotts, or do they have long lasting impact on brands?

And I think we'll know in the case of Bud Light and perhaps Target in six months.

But we can't quite tell yet.

I confess, I think the comparison Jill made to Nike and Colin Kaepernick is really interesting.

Which is part of the lesson here is to really, I think, understand your customers.

And I think the issues that companies have run into is because they've somehow lost track of their customers.

So taking positions, I think, is remarkable and wonderful or can be.

But the issue with the broader corporate purpose movement is it's got to be consistent with your understanding of who your customers are.

And so I think Nike managed that incredibly well.

I'm not sure these other folks have.

I don't know if they've kind of thought it through in the same way.

On Amy's issues on the unions, I think it's fascinating to watch.

I confess, I have looked at some of these stories about renewed union activism as being quite idiosyncratic.

So there are these moments where people talk about, for example, Amazon or Starbucks.

Those are kind of two, I think, poster child movements.

But frankly, it feels like it's happening on the fringe.

It feels like it's happening in pretty isolated ways.

So Amy's raising the possibility that there's some kind of broader revival of those labor efforts.

And that I think is super interesting.

So far, my instincts are that it feels a little idiosyncratic and on the margins.

But I think over the summer we'll learn if there's a little bit more action there.

Yeah. And maybe you can read it as sort of a last-ditch effort to save unionization and to save collective action on the part of employees.

What's really interesting to me is across so many of these situations,

it's not the unions themselves that instigate the collective action.

It's a particular person at Starbucks.

It's a particular person at Amazon warehouse.

And I think that in part reflects that unions themselves have given up on organizing labor the way they used to in the 40s and 50s.

Much of their intention is today on the political process, which I think makes a lot of sense if you look at overall unionization in the country,

and the chances that you could really move things in a substantial way, say, by a strike the way we have it in France.

I think that's just super, super unlikely in the context of the United States.

And so focusing on politics and focusing on improving working conditions,

while legislative means, I think, and lobbying makes a ton of sense for the unions.

But it leaves open the gap.

It leaves open that, or what if we wanted to unionize?

So it's both a sign of the strengths of the labor relations at the very local level where people get together and try to improve the conditions under which they have worked.

But it's maybe also a sign at one at the same time of the weakness of the unionization movement.

In some sense, Felix, as you're raising, the more interesting place to look is Europe and the UK and France,

and those places are facing really severe kinds of labor issues, certainly in the UK, and yet it hasn't been manifest in very significant victories yet.

And so there have been some victories, but there's just been persistent issues that are not really getting the traction that one might have imagined them to get.

And of course, European inflation and cost of loving issues are much worse than in the US.

They have not arrested nearly as quickly as they have in the US.

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Twitter are just how the algorithms have changed and how video and how much content they're pushing that is video content that is kind of tick tocky and they are just looking for views. So watching the new CEO come in who has ad experience primarily seeing if she can rebuild that business. I think it's going to be completely fascinating. But both feel to me like a little bit of slow motion train ride.

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yet another Twitter-like service. And that's how convinced that's good news. And I'm a little bit of two minds, even for the Goldman story. I totally see how it's both shocking and to some extent fascinating to see them failing consumer finance. Because it's always, you know, the reputation is a little bit, that's the easier part of the finance industry. It's less glamorous. It's like the thing that everybody can do. It's commoditized. Because it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it doesn't really, it

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It's a general banking index that is probably down by 10, 20% over this period of time, goldman has done well and so while there are very loud critics, you can say a single or two in favor of the companies stewardship at this moment in time. Yeah, it's always tricky, right? Because this is kind of one of those games that people play, which is who do you compare them to? Yeah, you can be assured that it's in your management and boards are expert at picking the right comparative group. But you know, Morgan's

Stanley, which is going to go through a leadership transition this summer, is an interesting comparison. And he, I think James Gorman has done a really remarkable job in that firm. And that's the most directly relevant comparison. But you're absolutely right. You can create a scenario where people can feel quite good about David Solomon. It is interesting that the broader financial industry, and especially the big banks, I'm just struck by how they are dominated by people who have been in their jobs for a long time. That's true at Bank of America. That's true at JP Morgan. That's been true at Morgan Stanley. It's true at Morgan. That's been true at Morgan Stanley. It's true at Morgan. That's been true at Morgan Stanley. It's true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true

at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That's been true at Morgan. That

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