Ted Audio Collective Hello everyone, you're listening to After Hours.
I'm Felix. I'm Mihir.
And I'm YoungMih. And we're back after a long summer.
It's so good to see you guys.
Although, Mihir, are you back, really?
Because Mihir's on leave this year, Felix.
I mean, look at him.
Does he look like he's fully back?
He looks very relaxed.
Yeah, I am pretty relaxed.
So what does it mean you're on leave, Mihir?
I know. Academia's so from another era.
So we have these sabbaticals.
I've never taken one.
And I'm taking one.
It means that my formal teaching is not happening.
And it's a chance to restore oneself, experiment, learn, lots of great stuff.
So I'm really looking forward to it.
And you both have been like my tutors on this, because I think you both had one of those.
That's renewal leaves.
So I'm very excited to try to make the most of this one.
And then it goes by so quickly because you envision yourself having all of this time.
Yeah, exactly. That sense it is like vacation, right, where you think, oh my God, two weeks.
And then two weeks goes by before you know it.
Or like the summer that just flew by, didn't it?
But it's so good to be back.
It is really great to be back.
I'm so happy we're doing After Hours again.
Me too. And it's great to have YoungMih here, especially to begin the season.
It's really fantastic.
I'm excited. And over the course of the season, we'll have lots of different folks coming in.
And of course YoungMih will be hopefully joining us as much as she can.
But we're really looking forward to another season.
It's going to be so fun.
And so we brought some provocative questions today.
Yeah. YoungMih, what did you bring?
Well, I brought a couple.
I'll share with you my first one.
My first provocative question is, are we witnessing the slow death of Facebook?
Ooh, that's a good one.
I love that. That's the way I said it.
We've got to add some music in the background.
Yeah. So give me one that you guys brought in.
So I'm interested in second chances.
And in particular, Adam Newman from WeWork is back with a big investment from a really major venture capital fund.
And so I want to talk about whether we believe in second chances in this case and in general.
I like it. What about you, Felix?
I would like to talk about the war for talent.
It's heating up in lots of places with increasing compensation for many groups.
And then we're really at a strange moment where maybe it's getting better, maybe it's getting worse.
And I would love to know how you think about it.
Sounds great. Yes, that sounds good.
Let's do it. All right, YoungMih, Facebook, slow death.
Okay, so the origin of this question is as follows.
So one of the things I was reflecting on this summer is how so many of our biggest companies seem to be transitioning to their next chapter and in the process redefining their brand identity.
So for example, Apple, one of the most successful product companies of our generation, is well into its evolution into a full fledged product and services company with a much more expansive brand identity.
Mm -hmm. Amazon has redefined its identity from just being e -commerce for everyday goods.
It's now pushing into healthcare and entertainment.
Walmart is playing with membership services.
And in each one of these cases, the direction of the company is pretty clear.
Mm -hmm. Now, whether or not they'll succeed, of course, is another story.
But you have a sense of where they're going and what they're doing.
Right. And then there's Facebook.
The weaker version of my question is when we look at Facebook, are we looking at a company that is experiencing a full blown identity crisis?
The stronger version of the question is are we actually witnessing the slow death of Facebook?
One angle that I find particularly interesting is just how strong reactions are to the slightest change in economics.
You might remember this summer, I think the number of monthly active users fell by a tenth of a percent, and it wipes billions off of the balance sheet.
And you go, like, how can that be?
What's going on? Mm -hmm.
And I think what we're seeing in these strong market reactions is exactly your sense, Yangmi, that even though the numbers look OK today, something has fundamentally changed, the kind of enthusiasm that Facebook experienced for a very long time.
Just the astonishing global growth.
I mean, a third of humanity is on Facebook even today.
But somehow, there's no imagination.
I find the metaverse announcements so dull, so uninspiring, lacking any substance that will get your pulse racing.
And I think we see it in these reactions that there's just deep uncertainty and frankly deep skepticism about what the future will bring for meta on Facebook.
Yeah. I think, Yangmi, to your question and to your comments, Felix, I think it's a coherent strategy.
I just think it's a wrong one.
Oh. Even worse. Meaning, I think it's a big bet on the metaverse, $10 to $15 billion of losses a year right now, which people are feeling really kind of worried about and thinking about.
Why is that maybe coherent?
Well, you need a game changer.
The Facebook property itself, I think, is in secular decline for all kinds of reasons because of TikTok, because of its overall maturity.
And you need a competing operating system because you don't want to be under Apple and Google's thumb anymore.
So I think it's coherent.
It's just I think happens to be wrong, which is I don't think it's going to deliver what we expect it to deliver and what it's being promised to deliver.
Even the original versions of it that Zuckerberg's been trotting out there, I mean, they look really amateurish.
Yeah. So I guess I think it's coherent but wrong.
Does that make sense, Yangmi?
It does. And I think listening to both of you guys speak, it occurs to me that one of the things I think gives us confidence when we see a company transitioning to its next chapter is a sense that they continue to take care of the core.
So you look at Apple.
Apple is transitioning, but they continue to take care of the core.
Mm -hmm. Similarly with Amazon, you have a sense that the core remains strong.
With Facebook, I think two things make me very uncomfortable with the state of play right now.
One is there is a sense that the core is not as healthy even as its financials might make it seem.
Right. The landscape for advertising, it's become very clear, is about to shift in a very, very dramatic way.
At any given point in the economy, there are only so many advertising dollars to go around.
Right. So if you think about what's on the horizon for Facebook, at least three huge media powerhouses are now going to be selling advertising slots, Netflix, Disney, and HBO.
Yep. This is a huge deal for those three companies, of course, but it's also a huge deal for how advertising dollars get distributed more broadly.
And this is not the best news for Facebook, which was already, by the way, getting squeezed by Apple changing the way it does app tracking transparency.
Right. Which has hurt Facebook's advertising as well.
So on the economic side, the horizon doesn't look great there.
And then when it comes to the business of Facebook itself, they really seem to be getting clobbered by TikTok.
Mm -hmm. So if you listen to the news coming out of the company, you hear a lot of conversation about whether or not Facebook is going to begin to do more and more things that emulate TikTok.
And if you think about what has historically given Facebook its strength as a social platform, everything is built on that social graph, that network of links of friends and family and people that you know, TikTok is completely different.
It doesn't require a social graph at all.
Mm -hmm. And so for Facebook to begin to copy TikTok and begin showing random videos to users represents a real step change in its strategy.
In fact, it would make a great case study discussion for us to ask our students, should Facebook chase a new engagement model, leaving behind the safety and the strength of its irreplicable social graph and begin to try to be more like TikTok?
Yeah. I don't know that they have figured that out yet.
And then to your point, Mihir, on the leadership side, Zuckerberg seems to have completely lost interest in the core Facebook business.
Exactly. He's so focused on the metaverse, and the vision there is not inspiring, at least not yet.
I think you're nailing something on the product side, which is its inability to compete necessarily very well with TikTok.
But also on the finance side, there's a question of capital allocation and whether these people are good stewards of capital.
$10 to $15 billion a year on meta.
And oh, by the way, in 2021, we spent $50, $60 billion buying back our stock at really high levels.
And so there's this underlying question, which is what is this guy doing?
And he's kind of embodying some futurist personality, and he's trying to build this universe, and it can go to zero.
There's a set of outcomes here that include like zero on all that meta -spending.
And so one has to really wonder whether the leadership is actually doing something that both the employees and the investors are going to enjoy over the longer run.
I like this point about managing capital, and then I think similar things are true about managing other assets that the company has.
So if you think about Instagram, probably the most important ingredient on Instagram are all of these people who have built up massive social networks, who spend so much money, so much care at the endless posting so that you build up followers that you can then monetize.
The moment you go to a greater fraction of random allocation of images to imitate the entertainment value of TikTok, you're undermining that very value.
So it's not confidence -inspiring.
Whenever you see companies just copy and essentially ever seen Snap, all they have been doing is copying other social media platforms.
But if it's inconsistent with the underlying logic of your business model, I think that's particularly troublesome.
This is exactly right.
The difference between replicating Snap.
Snap2 is built on a social graph.
And so at least the engagement model is consistent with what they've done historically.
Once they start to try to emulate TikTok, it takes them in a direction that really undermines all of the investments that some of its most influential users have really depended on historically, and that can undermine the entire business.
The other part of it, which is striking to me, I think you both have nailed this idea that TikTok has changed the game and changed the nature of the revenue model.
And if you ape them, you undercut your essence.
At the same time, what do you do with the fact that your basic model is serving an older and grayer population that is not growing as fast?
One answer is, no, stick to your knitting, stay to that social graph model and do it.
But then the tension is, yeah, but I can't grow that base because young people are not adopting me.
So I guess I'm curious, would you tell them to double down on their model, or what would you tell them to do on that core business?
Well, I would probably tell them that everybody needs an avatar and they need to do exactly what they're doing on Facebook, but they need to do it in the metaverse.
Listen, I am one of the true believers in the metaverse, but not necessarily Facebook's metaverse.
Yeah. In some sense, metaverse is maybe just too broad a term to really get any sort of confidence into what they're thinking about, what they're doing.
Say in the professional setting where you might think customers are mostly businesses and will have high willingness to pay, it's very hard for me to see how avatars might replace interactions that are more information rich.
If you said, well, our play is mostly in gaming and will have a particular take on gaming, I think that's a very big and very lucrative market where I can well imagine that maybe Facebook, definitely someone else, will use metaverse type technology to transform what gaming is today.
But it's this broad, unclear, hazy vision that doesn't give me any confidence that they're thinking about any of these things in specific enough terms to make me really believe here is something that looks like a new business model that I can really believe in and that can be really profitable.
Yeah. Well, the good news about this conversation is it sounds like I'm not the only one that's feeling a little uneasy about this business.
So let's just keep an eye on it.
Yeah, we can continue it in the metaverse.
We can put on our goggles and we do.
Exactly. Okay. So we hear it.
Let's see your question next.
Sure. So I love second chances and I love redemption.
And I was struck by this story about Adam Newman, founder of WeWork, who really left in quite a, I guess, a disgraceful exit of sorts several years ago, in part because the valuation dropped from like 50 billion to like 3 billion.
But also there were some concerns and questions about his usage of funds and other things.
Well, he's back and he's back bigger than ever in a way.
So he has started a company called Flow.
And one of the most important, I think, venture capital firms there is, which is Andres and Horowitz, has backed him.
And they've backed him in a big way.
So they wrote him a check for $350 million, which makes the valuation of Flow more than a billion -dollar, instant unicorn without having commenced operations.
What is the underlying story?
It's a little unclear, but kind of residential real estate and redoing residential real estate, which is in many ways a broken market, in particular the rental version of it, and trying to redo that in a way that he tried to redo commercial real estate with WeWork.
And there's a crypto angle on it too with a digital wallet, but it's all pretty under -specified, let's just say.
So I'm curious what you make of this.
I think there's two ways to think about this at least.
One is, my God, Silicon Valley hasn't learned its lessons, and they're funding people who are these big visionaries but don't know how to really build businesses.
Alternatively, vision is really hard to find, and he has a vision, and he can raise money, and he can do things that other founders can't do.
And it makes perfect sense to back him again.
I know those are two polar extremes, but I'm curious what you made of this news.
As I think about someone's character, I think I'm less influenced by, were you successful at building a really fabulous company?
That actually doesn't matter that much to me, because in particular in the WeWork case, I think you can say two things.
One, he has really had dramatic influence on what office spaces look like.
And there was a core of a really great and valuable idea that then in the end was grossly overvalued by markets and investors.
So that alone, for me, wouldn't give me hesitation.
But the kinds of things that he did while he was at WeWork, I will never forget he trademarked we, and then he sold the trademark, I think, for millions of dollars back to the company.
That will give me a real pause, because this, to me, has less to do with was your vision exactly right, where you may be a little on the optimistic side when you sold the company.
I think that's completely understandable.
But moves like that will give me real hesitation, real pause.
And so what I'm thinking about when I look at the new company is basically he bought a large number of apartments, and now investors are investing in the idea that rents could be even higher, because these apartments are somehow more valuable than the current market price would suggest.
That seems not an unreasonable idea, but I would think, do you want to do business with this person?
Frankly, not me. Yeah.
Young me, what did you make of it?
I love the way that you articulated that, Felix.
If you were to defend Adam Newman, what you would say is that the truth is most startups fail.
Mm -hmm. Most founders fail.
Right. And there is a very common thing we refer to as a serial entrepreneur who tries one thing and then another thing and then another thing.
So put another way, if you look at some of the most successful founders out there, many of them failed in their first act, in their second act, and they only succeeded in their third or fourth act.
And in the world of business and particularly in the world of entrepreneurship, we talk about learning from failure all the time.
So if we mean what we say, a past failure should not be disqualifying.
In fact, we should be celebrating people who take risks and are willing to fail.
Right. And I think in this case, it also says a little bit of something about the state of venture capital today, which is that some of these venture funds are getting so big that in order to generate a return on the fund, you have to make these huge bets.
You have to deploy a lot of capital in a short amount of time, which means you have to write huge checks, which means you are specifically looking for founders who are building ventures with an extreme amount of audacity.
And say what you will about Adam Newman, he does not do small things.
And then also, by the way, housing is a big problem.
To be solved. But so then you say, well, why does this one make you uncomfortable?
And the reason I think this one makes me uncomfortable is exactly what Felix said.
There is such a thing as failing well, failing with integrity, failing in a way that it's clear to everyone that you made some mistakes along the way, maybe strategic, maybe execution, but you did it in a way where you can still hold your head up high and say look, every decision I ever made, I made
in the best interest of the company and its shareholders.
I never tried to mislead anyone.
I was never irresponsible with the funds under my care.
I never betrayed the trust people put in me.
I never treated people poorly, and so on and so on.
And in Adam Newman's case, I don't know, the missteps went beyond mismanagement.
They seem to reveal something deeper.
And that makes me very, very uncomfortable.
Yeah. I mean, I think you're right, Youngme, for me the lesson is a little bit about Adam Newman, but it's really about the venture capital industry in a way.
This story is really about why and how does Andres and Horowitz think it's okay to overlook the things that are causing you hesitation and causing Felix hesitation.
And I think the first part of your answer is right, which is they got to deploy a lot of capital.
They do. And this is the biggest check they've ever written.
Yeah. But here's a question for you.
If you have a fund size that is in the tens of billions of dollars and you have to deploy this capital in, I don't know, what, five years?
Yeah. Where do you put it?
You can't write $20 million checks.
You can't. You have to start writing $100, $200, $300 million checks, right?
That's exactly right, except that's exactly where we were several years ago with SoftBank.
And we saw how that has ended.
Yes. And the lure of writing those big checks is incredible because of the fees and because of everything else.
But I don't know. I confess, I think this is a little bit of an indictment of where the industry is today in the sense of overlooking the things that are bothering us and putting such a premium on this idea of talent, which is there are very few founders out there and there's a special person.
And that person is so special and his name is Adam Newman that we can overlook all this stuff.
And I just think that's problematic.
I don't know. It feels to me like a symptom of a deep problem in the industry more than anything else.
One of the things that both of you guys talked about the very first time we discussed WeWork, if you remember, I think we were all quite down on it, even during the glory days of WeWork.
But I think both of you mentioned that essentially WeWork was a REIT and just cloaked in the vernacular of a technology company.
And if you look at this new venture called Flow, it also looks like a REIT, a real estate investment trust, which is a very conventional kind of company.
And yet because it's cloaked in the vernacular of a technology firm, it commands a very different kind of multiple.
And both of you guys, I remember, expressed deep, deep skepticism even about that piece of it, putting Adam Newman aside completely.
It's interesting, what is this cloak?
It's technology, but it's also a mysticism about community.
They've been talking a lot about building community through these housing units.
And so there's a whole set of words.
And of course, it's got a crypto angle on it, too.
So it's kind of tying together all these bells and whistles of the moment on something that is fundamentally pretty mundane.
Yeah. And in fact, if you look at the economics, so it's valued at roughly a billion dollars right now, each apartment he paid on average about $300 ,000, so you have to believe that the incremental revenue from the stock of apartments that he owns today will double.
Somehow my rent is going to go from $4 ,000 to $8 ,000 because I have miraculous community services.
And if that's not true, you have to believe that somehow the number of apartments that they can acquire in popular locations, that they justify that big gap between the value for any sort of incremental service that they can provide and the current valuation.
And it's just, in that sense, it almost strikes me as a little bit inconsistent with the times.
Across many early stage investments, I now see a little less emphasis on growth, a little more emphasis on profitability, and in this sense, this deal just strikes me like, oh my God, those are the good old days when we used to believe those kinds of things could actually work out.
And now I think the market is more skeptical, and I wouldn't be surprised if we looked back at this deal and would say, well, that was an exception among many more transactions that actually look now more interesting because they occur at valuations that seem much more reasonable.
Yeah, I think in a way, Felix, on your point, I thought over the last six or eight months that enough air had come out of the balloon to kind of moderate people's hopes and expectations, and this felt like the last gasp of the last era.
Yeah. It also made me think, how persistent the forces are that want to maintain that.
Yeah, yeah. The money's still flowing into the venture.
It's got to go somewhere.
It's got to go somewhere.
Exactly right. It's got to go somewhere.
Well, this will be a great one to watch, so we will see what ends up happening alongside.
Felix, is there a more positive spin on the question you brought in because both Meher and I brought in questions that these are pretty downward slumping conversations.
Yes, so I think my question is a real question, actually, but it comes with a good dose of optimism.
So here is what I've been puzzled by.
We live at a moment when, on the one hand, you have lots and lots of new jobs created.
You had really nice wage growth, in particular, for people who didn't make a lot of money to begin with, and the labor market was as tight as I can ever remember.
And now the situation is a little more mixed.
You see some layoffs.
You see a little more conversation even about, are we in a recession, are we not in a recession?
But at the same time, the experience of many companies, that there is this just intense competition for really qualified, really good people.
Everyone I talk with and I ask, what's your biggest concern?
It is, oh my God, you will not believe how hard it is to hire really good people and how difficult it is to then make sure that these good people actually stay with your organization.
And what's fascinated me during the summer was that the story why we're in this situation seems to change from week to week.
So first it was all about the great resignation.
And then it turned out, no, actually that's not true.
People just hop from one well -paid job to an even better paid job.
That's really all that's going on.
And then the next story was, well, what we're seeing is really older people, 55 plus, they either retire early or they cut back on hours or they refuse to go to office.
It's all of the quiet quitting, like all of these kinds of things.
And then you look at the August jobs report and in the 55 to 60 category, we now have the highest labor participation rate in history.
So how can it be that we have this sense of tension in the labor market, but when you look at particular data points, you don't really see it.
And I find my best explanation at this point in time, which I find completely fascinating, is maybe mostly what we're seeing is demographics.
Of course, as baby boomers retire and as the next generation that has had fewer kids and now fewer people in the labor market, as they get to be in the 55 plus category, that category shrinks in total size.
I find it important because this says the tensions today are actually just the beginning.
Here's some predictions for 2030 in the US.
We will miss 3 million well educated workers.
In Japan, it's 4 million.
In Germany, it's 2 million.
Collectively, it's dozens and dozens of millions of well educated workers.
And our, I think the only recipe for success will be innovate in what you offer in the labor market.
And that I think is the sense in which I'm really optimistic.
I see so much innovation, and I think that's going to be the key to be successful longer term.
But that's my take.
What do you two think?
Well, I mean, look, the labor market is such a puzzle right now and has been for a long time.
You see all these different things, and it's really hard to make sense of.
But you're, I think asking this deep question, which is, you know, is the so -called war for talent just never ending?
And will it just be with us for the next 10 or 15 years?
And so, let me give you my quick, I think, cynical take, which is people have been talking about the war for talent for 20 years.
And at the same time, they've been talking about the end of work.
So, there are these conflicting narratives that people hoist onto the economy.
Like, there will be no jobs left.
And AI is going to take over everything.
And then they're also at the same time saying, I cannot find anyone to hire.
And there's massive shortages of talent.
And so, I think these large narratives are just not that helpful for thinking about the world.
And I think they're kind of propagated by people who have an agenda of sorts.
The reality is what you said, I think, which is, there's just a huge mismatch for skills.
And there's a huge mismatch on geography that is causing a lot of pressure.
And those mismatches are not, like, economy wide.
It's actually weird and idiosyncratic and all over the place.
And so, you can hoist a big narrative on this.
Or I think you can feel like, well, wait a second, there's just these big mismatches that we have to address.
So, I don't know. I guess my instincts are there's not one big Uber narrative here of, like, the war for talent.
I think what's going on is more subtle.
And it's really about deep mismatches, skills mismatches, and then geographic mismatches.
And we just have these areas of high growth and areas of very low growth.
And that's what we got to fix.
We got to fix the micro.
And that, I think, is the really big lesson for me about all this.
What do you think, Youngmi?
I think a very different way of asking the question is to say, is the role of being a CHRO, the head of human resources, the chief people officer at a company today, more difficult than it was 10 years ago?
Is there more pressure?
Is it harder than ever to do your job?
And I think the answer to that is it is so much harder.
The pressure is so much more intense.
Right. And I think that even if you were to do a thought experiment and imagine a world where there are exactly the same number of jobs today as there were 10, 20 years ago, and exactly where probably the same number of people willing to do those jobs as 10 or 20 years ago, it's still gotten harder.
And the reason I think it's still gotten harder is because there has been an arms race in terms of what companies are willing to do to attract workers.
Among younger workers, there's far more willingness to hop from one place to another.
So retaining workers has become much more difficult.
You used to be able to take employee loyalty for granted.
If you were a good company with good benefits, that's no longer the case.
There's a much lower tolerance for bad bosses, bad places to work.
And also, I think employees have gotten much more savvy about the fact that one of the ways to progress most quickly in your career and to get jumps in salary is by job hopping.
And so I kind of liken it to, I know this is a strange analogy, but if you think about the fashion industry, we still wear clothes every day.
We can't wear more clothes than you have more historically.
There's still companies producing clothes.
But if you are in the fashion industry, it is so much harder because fashion has become so fast.
It has just become fast.
And the velocity with which things are happening now makes it very, very difficult to sort of keep up, which means that human resource departments are having to be more creative than ever.
I think some of the scarcity that companies are feeling with respect to finding workers is real, because there are pockets where there is that mismatch that both of you guys talked about.
I do think some of it is false scarcity, to be quite honest, because maybe they are used to looking for those workers from a particular place, and maybe they should be more creative about how they're sourcing workers and so on.
But regardless, I think it has just become a much more multi -vectored dynamic.
And as a result, there's huge, huge pressure.
I find your analogy to fashion super interesting, young me.
And strange. No, actually.
Because it points to an asymmetry that I do find strange, in that in competition for products and services, we get this sense of differentiation.
Yes, fashion is very competitive, but each brand tries desperately to stand for something that is somehow very different.
And then in the market for talent, there's sort of a sea of sameness.
And in some sense, the best we seem to be able to do in the competition for talent is to say, we do what everybody else does, except we do it a little better.
Maybe we're a little nicer to you.
But I don't see the fundamental differentiation where different companies occupy different types of preferences about what people want at work.
And that strikes me as strange.
But here's where I would push back a little bit.
I think if you are 28 years old and you are working maybe in New York City in a competitive space, and you are hanging out with friends, all you're hearing about is, well, my company lets you not only work from home three days a week, but they give you two months where you can work from anywhere.
Well, my company offers bonuses in the form of cash and equity.
I think there's a growing amount of variation.
And this is the arms race I was talking about in companies in how they're trying to attract and to be a magnet for employees.
And I think if you look at the details, I think to a lot of young people in the middle or the beginning of their careers, they see a lot of variation and they're willing to hop jobs to find the perfect match.
I want to return to something that you said briefly, young me, which is this idea of false scarcity.
I actually think it's worth underscoring that because whenever you see these tropes, like the war for talent is never ending, and it's just going to keep on going forever, you have to ask yourself whether that's really true.
And why aren't they undertaking the efforts to do training?
Why aren't they doing even more to do things with underserved populations?
Now, maybe the answer is it's, you know, it just isn't economical.
But there is a cynical view of all this, which I characteristically will try to manifest today.
Which is, you know, look, this is like a ratchet effect.
This is a way to ratchet compensation.
This is a way to kind of have human resources be a larger and more important force inside companies.
And it's not necessarily really about something structural that's been going on for 20, 30 years.
Even as I say that, I know that's not right, but I think it's worth acknowledging there's an element to this that makes me think that there's some fraction of this, not entirely.
But there is this sense of false scarcity, and it is self -serving in a way.
I mean, the really interesting thing to watch, Felix, is what you mentioned briefly, which is there is a view that we're one big, deep recession from all of this stuff going away.
Yeah. You know, which is a very cynical view.
But I think there is a sense in which we're going to really see what the labor market looks like after that recession when it comes and if it comes.
Of course it's going to come, but when it comes and if it's severe, that'll be the true test of the kind of durability of these changes to the labor market.
And that's going to be really fascinating to watch, I think.
And as always, I remain the optimist.
Well, I think we should try to come back after the break and do three super inspiring things that we want to talk about.
Yeah, something a little more up with.
Yes. Excellent. So Meir, you brought a story that inspires us?
Well, I'm not sure if it's inspiring, but it's a fun one.
So let me try this out on you.
So over the summer, Serena Williams launched, in addition to her remarkable performance most recently, launched her own venture capital fund.
Kim Kardashian has teamed up with an ex -Carlyle private equity person to start their own private equity fund.
And so we have celebrity investment funds now in private equity and venture capital.
Gwyneth is there. Leo's there.
Serena's there. Kim's there.
Are you on a first name basis with Leo and Serena and Gwyneth and all?
Exactly. So what do you make of this?
Is it like the final stages of late stage capitalism and its decay before the revolution?
Or is it kind of like fun and savvy and smart?
So I think it's inspiring in two ways.
The first is, you know how there's always a little bit of the sense of, oh, peace, rounded in secrecy, it's like so complicated.
And then you see someone who hasn't spent her entire life or his entire life as a financial services professional and they team up with other smart people.
And then it looks like, oh, my God, it's quite doable.
Would I invest with Serena?
So she's invested in things like masterclass where the celebrity angle can be quite helpful.
She's invested in companies like Tonal, like the Workout Equipment Space.
So, yes, I do think as a result of being in a position to have a conversation that she's in, she has contacts, she has connections, she has insights.
If you think of PE less as a question of what's the latest round of financial engineering that we can think of.
But what are reasonable good ideas?
Yeah. There's no reason to believe that celebrities, simply because they're celebrities, have fewer good ideas than the three of us would have.
Yeah. In the sense that it sends a signal about the democratization of the space.
Mm -hmm. And I think that's fantastic.
I love that. Young me, what do you think?
This doesn't feel controversial to me.
I mean, I think what Serena is doing is pretty straightforward.
She's creating a vehicle for venture investments.
And her advantage, and this is true of all celebrity venture funds, is her ability to get great deal flow.
She gets to see all the great deals.
She has a wonderful pipeline, and she's often invited to participate.
So the VC landscape can be competitive, particularly with the hottest startups.
And so she has an edge in that competitive VC landscape, because everybody would love to have her on their cap table.
You know, at the end of the day, she still has to make good investments.
And so her track record remains to be seen.
But what's cool here is the focus on underrepresented founders.
I really love that about what Serena is doing.
I think Kim Kardashian is in a different category.
I think this is yet another indication of her business savvy, her cultural savvy.
Andreessen and other VC firms can pour financial capital into companies and maybe provide some advice along the way.
Kim Kardashian is someone who can not only pour financial capital into whatever company she chooses, she can also pour her cultural capital into that business.
And it's interesting, she's not launching a venture fund.
She's doing PE. This is a different thing.
The hardest thing about building a consumer business today is standing out in the crowd.
There are dozens of new beauty brands launching every day, new vodka brands, new fashion brands.
So the credibility that comes from having passed Kim Kardashian's cultural filter cannot be overstated.
I mean, I don't know, but my sense is that this is not a venture capital play in the conventional way we think of venture capital.
I think this is a portfolio play.
I think this is a vehicle to enable her to build a conglomerate, a kind of mini -LVMH for a very different demographic that includes all the kinds of brands you might see in a more modern, hipper LVMH, including luxury brands, premium alcohol brands, e -commerce brands, digital brands, hospitality brands.
If you think about it, some of the most powerful brands in this space were spearheaded many, many decades ago by incredible women.
Coco Chanel, Estée Louder.
These women were fashion icons.
They were business moguls.
If they had been men, we would have called them titans of industry.
And so if you were to say, who is the Coco Chanel of our times?
Who is the Estée Louder of our times?
Who is it 50 years from now, we're going to look back and create something that still stands today.
I think there are a lot of people who still think of Kim Kardashian as this empty -headed reality TV star, but I think that's really closed -minded to a certain demographic.
She is a fashion icon.
She's a business mogul.
She's a billionaire in the making.
And I think the Kardashian -Jenner family, with Kris Jenner at the helm, I think the model in their head is to think of what Bernard Arnaud and his family has done in building a business empire in a certain sector for certain demographic.
I think that's the model they have in their head.
And I think they are very deliberately rounding out their portfolio in this way.
And I wouldn't sleep on this.
I think this is orders of magnitude different than what you see with Gwyneth or Leo or Serena.
I think this is a very different kind of play.
This conversation is helping me distinguish between two different things.
So I think in the investment management space, there's a clear case to be made, Young Mia, I think as you did, that for example, pipeline is so important and deal flow is so important that Serena can do something different.
Yes. And that I think is definitely true.
There's also a taste -making component to this, which is just the ability to influence taste.
But I think the real thing that you're emphasizing is maybe this isn't about investment management.
Maybe this is really about building a larger operating company platform.
The question is always, why don't you go do what Rihanna did?
Why don't you go do what Dre did?
Why don't you go and build companies?
Why are we taking the investment management vehicle?
I think if you look at it as more as an operating entity, and maybe it's a distinction without a difference, Young Mia, between like an investment management and operating entity, but what you're articulating is a Kardashian empire.
That's a set of operating businesses.
Yes. And they've done these, you know, I mean, she has Skims, KKW.
And so I think it remains to be seen.
Absolutely. How this unfolds.
But I wouldn't underestimate the ambition here.
Oh, absolutely. Not, I want a 10x return on some investment I'm making.
I think Serena is looking for the 10x return on every investment that fund makes.
I think the Kim Kardashian play is very different.
I mean, that's just my sense.
Yeah. And I think it's going to take the next 10 years to see this play out.
I find it really fascinating.
It'll be a fun one to watch.
I think there's also an important difference having to do with scaling up.
So if I'm really good at knowing, in many of these spaces, there are lots and lots of companies that at first blush seem very similar, but I'm really good about having intuition, and I have a particular cultural position that moves me into a position that I can anoint whichever product will win.
Exactly. I think that is, of course, something that is really fabulous because it's infinitely scalable.
If you're going down the Rihanna route, turns out she's a really fantastic designer, but it's not nearly as scalable as being the king and queen maker in these markets.
Yeah. Yeah. It'll be a fun one to watch.
That'll be a fun one to watch.
Felix, what did you bring?
So I have a simple question for you.
What's your favorite prequel or sequel, the best one you've ever seen?
Oh, gosh. So unsurprisingly, I'm going to go to the British crime space.
Oh, goodness. No. Never changes.
So... Endeavor is the spectacular prequel to Morse, and Louis is a sequel to Morse.
What does he talk...
I don't even know these words you're saying.
Like this is a parallel universe span of town relations.
I thought you meant Star Wars and things like that.
I'm clicking big. I was clicking Top Gun and House of the Dragon and things like that.
Well, Top Gun Maverick was pretty good.
That one made me feel old.
Yeah. What about you, young me?
What are your favorites?
I have to say that I think of prequels and sequels as comfort food.
They don't necessarily challenge me in any way.
But they can be awfully comfortable to return to a world that you're familiar with.
So I find something soothing about them.
I was thinking about the question, of course, because like everyone else, I'm watching House of the Dragon.
Oh, my God, it's been so long.
By the way, long time listeners, I'm having a flashback of Felix and young me talking about games of thrones.
Oh, my God. He calls it games of thrones.
Whatever. I would have loved to talk to you both because at this moment where I'm thinking I love the original series so much.
Is it even a good idea for me to see it?
Yeah. I always have to square like if something is dear to you, like do you generally just think I'll watch it, it may not be great and it's not going to wreck the earlier experience.
That you had. Or are you more choosy when it comes to sequels and prequels?
The only reason I'm pausing is I'm trying to decide whether to answer your question or to just go deep into House of the Dragon.
Oh God, please. No, no.
If I think about my experience watching House of the Dragon, I do find myself happy to be back in that world.
But also I cannot help but compare it to the original Game of Thrones and that stunning first season and how difficult it is to live up to those standards.
I have this kind of sense that basically if you like the original IP, I'm all in for the sequels and prequels.
And if I don't like the original IP, I think it's all a huge waste of time.
It just depends on your preferences, right?
But you liked the sequel to Top Gun you said.
I thought it was good.
I mean the family loved it so it was good.
Yeah. But I think there's a little bit of snobbery about prequels and sequels like, oh, why can't people tell a new story and is it going to crowd out originality and so on and so forth?
I don't really buy into that.
There's so much original stuff.
Yeah. In part, I think that's just a selection effect.
So sequels get made if things were really successful and everything else you forget anyway.
And so your sense is everything is a sequel now, but it's just your faulty memory that you don't remember all the things you didn't like and no one else liked.
And so there's never going to be a sequel.
There you go. You know, the music version of this is remixes.
I love remixes. There's something about when you hear some artist remake a favorite song and take it in a different direction.
Fantastic. That mix of the familiar and the new.
I love it so much. Have you watched For All Mankind?
I have. There's this Elvis Presley remake that was just magical.
I know exactly what you're talking about.
That wedding scene.
Amazing. Oh, I agree with you.
Yeah. That is an interesting show.
Oh, we could just end up talking about shows.
Have you seen that one here, by the way?
I don't think so. No, is this the Elvis movie?
The general Elvis movie?
No, no, no. This is For All Mankind.
This is the one where the Soviets beat the U .S.
to the moon. Oh, no, no, no, no.
No, I missed it. And then as a result, history diverges.
It's kind of interesting.
Yeah. Okay. Wait. Before we end this segment, I brought one more question in, which is what inspired you this summer or who inspired you to summer?
Were you inspired by anything?
I think I have a good example that I found very inspiring.
And that was the European and American response to the invasion in Ukraine, where the first moment you think, oh, everybody's on the side of Ukraine, but how long is that going to last, which I'm guessing was part of the Russian calculation.
And then to just see how countries stick by the original plan and individuals do.
I traveled a little bit in Europe this summer, and I found it inspiring how many people I met who said, look, if it's going to be a little colder this winter, if maybe we can't heat our spaces quite as well, that seems a small price to pay in order to push back against the Russian aggression.
I would not have expected it.
I think in part is why I thought it was really inspiring.
That's a great example.
I have found incredible inspiration in nature, this summer.
I'll give you my most recent example.
I was on a beach in Wales on the Gower Peninsula.
I think it's pronounced rocilly, although I can never pronounce anything that I saw in Wales because it's completely impossible to pronounce.
It followed on a week after Punta Reyes in California.
This combination of mountains and water and beach are just so, so spectacular.
And I found him really, really inspiring.
Oh, I love that. What about you, Emily?
So this is to bring it kind of full circle a little bit.
You know, I just got really inspired by watching Serena play tennis at the U .S.
Open. I'm not a huge tennis fan.
I kind of casually follow it, but I was trying to think about why I was so inspired by it.
And in my head, I started listing all the reasons.
Every video they showed of her, they would juxtapose with video from when she was a little girl.
And there was something about seeing that process of aging so gracefully that I just found so moving.
When she announced her retirement, she expressed so much ambivalence about the retirement.
It was clear she really didn't want to walk away.
And it so resonated with that conflict over wanting to have everything and recognizing that life is full of trade -offs.
And then the actual scene itself, there was something about watching her in that moment to see the crowd that used to be so mixed in their response to her, be so completely in love with her, just to watch her love for her family and in particular her sister.
And then I was just thinking about what she has meant to the sport and the fact that her success was so improbable coming from Compton, just rising through the ranks of this very crusty sport that was desperately in need of some different kind of energy.
She's just one of one.
I watched it and I can't believe how much it inspired me, but it really did.
I happened to see that last game that she won.
You could literally feel people's admiration for her in everything.
And then the little ways in which she interacts with the audience during the game, when she smiles, when she admonishes people not to clap when her opponent made a double fault.
Little things. It was miraculous to see, I will never forget.
Yeah. There was something so unique about that experience.
Super special. That's a great thing to think about.
I have to say also just for transforming the sport.
She just totally changed the sport.
You really did. And it's just fantastic to see someone go out like that on her terms.
I loved it. Anyway, so we'll be back with picks, right?
Good. Yeah. Let's do some recommendations.
What do you have for us, Mir?
1776 is a musical that was recently put on at the American Repertory Theatre in Cambridge where I saw it.
And it is now coming to Broadway.
Oh. And it is spectacular.
Really? I don't love musicals.
Oh, well, you got to go see this.
And I think the reason why is it's an older musical, but the folks at the ART have repurposed it with an entirely female cast.
Interesting. And so all the major figures are played by women.
And it's just spectacular.
The great thing about this musical is the thing I sometimes feel about America is that we've lost the ability to say two things at the same time, which is it's a great country.
And it also is massively problematic.
People will say either of those two things.
This musical manages to say both things at the same time.
And it just shivers down my spine.
Really? And I totally recommend it for really understanding what is spectacular and problematic and terrible about this country all together in one piece.
1776, which is going to be opening on Broadway in about a month.
Wonderful. Nice recommendation.
What do you have, Yang Yi?
First, a quick plug for women's sports.
So watching Serena kind of put down this rabbit hole where I started watching women's tennis, women's soccer, the WNBA.
So that's not a recommendation.
That's just a quick word of encouragement to people to support women's sports.
But my recommendation is I discovered the show on Hulu.
It's called Welcome to Rexham.
Don't know it. And it's a documentary, docuseries I should say.
And it captures the true life story of two Hollywood stars, Ryan Reynolds and Rob Meccolini, who decide to purchase the Rexham football club.
Oh, yeah. This football club, which is one of the oldest football clubs in Europe, there's a system of relegation in all these different levels of leagues and it's way down there.
So they buy this club and they try to improve the fortunes of the team with the goal of rising up a level and getting promoted to the next higher league.
I'm looking at Felix.
I think I said that right.
Yes, you said that right.
But it's also about the community of Rexham, which is a community that is really, really struggling.
And this team means everything to the community.
So these two Hollywood hotshots come in.
They purchase this team.
And it's about the relationship between them and the team and the town.
And it is such a reminder that real life is so much more poignant and powerful than fiction.
And what helps a lot is that Ryan Reynolds and Rob Meccolini are so funny and so charming and watching them interact with the folks in Rexham is just really, really entertaining.
So I would highly, highly recommend it.
Sounds fabulous. What do you have Felix?
I am recommending a book that I read this summer by Jennifer Egan.
Oh, I like her. She has a new book out, The Candy House.
And then I noticed that I had never read a visit from the Goon Squad, which was the book for which she won a Pulitzer Prize.
And it is amazing. I loved every page.
The story itself is fabulous, but also the formal elements.
I remember one chapter that came in the form of a PowerPoint presentation.
There was a young person mostly thinking about her mother and the best way to express her thoughts came in the form of a PowerPoint presentation.
It was just both the formality of it, sort of the story of a young group of people who grow up together and then end up living life in quite different circumstances.
It's really quite wonderful.
So to anyone like me who had missed that earlier book, A Visit From The Goon Squad, highly, highly recommended.
I find it amazing how she can take on different voices and just completely different tone from one story to the next.
It's really kind of wondrous.
She's something. That's a great pick.
And this is it for today.
Thank you for listening.
This was After Hours from the TED Audio Collective.
