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Jan 6, 2024 · 2024 #1. Read the transcript grouped by speaker, inspect word-level timecodes, and optionally turn subtitles on for direct video playback
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Speaker 4
I've got sunshine on a cloudy day When it's cold outside I've got the month of May Everybody say I guess you'd say Hello everybody, it is January the 6th, a Saturday 2024.
Speaker 2
We are in 2024. And last week with my friend Keith Teare, the author of That Was The Week newsletter, we did a show that was the year about 2023. So this show, which isn't coming with a newsletter, so we can be a little freer. is going to be entitled That Will Be The Year. Happy New Year, Keith. 2024. Does it feel like the new year yet? Or is it still I already made the mistake of announcing yesterday on a show that was still in 2023. I saw that.
Speaker 1
But you said January 2023 as well, which was
Speaker 2
which was quite an achievement. If you can get stuff wrong, I will. That's the one thing.
Speaker 1
You know, Andrew, today, January the 6th is typically in the Christian calendar is called Epiphany. And it's the day when you're meant to take the Christmas tree down. If you have it one day longer than today, it's a sin.
Speaker 2
My Wife's Already Taken It Down, and I'm Jewish, so I'm less worried about sin. In terms of figuring out the future, you and I, I think, have always been on the same wavelength in terms of the past helping us make sense of the future. One of the articles that you pointed to this week, it's not in the newsletter, but I thought it was an interesting one, by Andy Kessler in the Wall Street Journal, he's an excellent writer, is the lesson for 1975 for today's pessimists. Do you agree with Kessler, Keith, that if we're to make sense of The Promise of 2024, we might look back to the mid 70s when everything seemed so dire and dark.
Speaker 1
Yeah, I mean, you and I both lived through that. That was the what's known as the oil crisis era, when inflation was almost 20%, I believe. And interest rates were, I remember my mortgage was like crazy expensive in those days. Yet, you know, it was the period before one of the longest uninterrupted growth periods in world history. So he's not wrong to focus on, you know, the bottom being the place where the next rise begins. What's really hard is to say whether that is 2024. Timing it is super hard. And in my world, 2024 still looks like it's going to be very difficult. That is to say the venture capital world, mostly shrinkage, not growth. However, all the you know, 10 years from now, the large companies that we will then think of as household names are being born now. So it really all comes down to the details of what you know, who you know, what bets you make, and what bets you avoid. I think it's super hard, but broadly speaking, he's right. I mean, obviously, there isn't really been very many times in human history where the future wasn't better than the past. It's Very Rare For The Future To Be Worth It.
Speaker 2
The common response on all this, the cliché is that our kids, maybe not yours and my kids, but our kids generally, their lives are going to be more of an economic struggle than our lives. It's interesting, you bring up the mid-70s and the real estate Inflation and the Real Estate Crisis. In Scott Galloway's predictions for 2024, he talks about a housing sale boom. I'm less interested in the boom or bust on that front. Does the real estate market impact on tech or vice versa? Or are they entirely separate, do you think?
Speaker 1
Well, in micro markets like Palo Alto, they're very correlated. House prices are a function of demand and ability to pay. And when tech is doing well, there are a lot of newly minted multimillionaires who can pay cash for a house that's priced over $5 million and they do. So they're very correlated in micro markets. I don't think they're very correlated at the macro level. I think I think the US is made up of lots of micro markets and some of them are super depressed, like let's say Detroit and others are super boomy.
Speaker 2
I think he's making the super boomy ones like Florida and parts of Texas are always boomy until they they bust. What about on the inflation side? Galloway is predicting a drop in the U.S. inflation. Is there a connection between inflation rates and the prosperity of tech in 2024, particularly investment? You and I have talked, you've always argued that for many investors, if you can make more money putting the money into a bank, then you're not going to risk it with tech stocks.
Speaker 1
Yeah, look, look, there's, there's, there's a hierarchy of interest rates. And the inflation rate is correlated to the interest rate. So really, when you're talking about the inflation rate, in the money markets, that translates to the interest rate. And the interest rate is the price of money. How Much You Pay For Money.
Speaker 1
But We'll See.
Speaker 2
You're not making any predictions. Who Moved My Cheese, Keith, and should be really renamed that famous book Who Moved My Money. 2024 at the moment seems to be shaping itself up as the year of this pivotal historic US election. The information around an interesting piece that you forwarded to me about how AI will and won't affect the election. Do you think it's going to have much of an impact, AI, and all this issue of misinformation and propaganda will actually be less of a big deal than it was in 2020 and certainly in 2016?
Speaker 1
Well, the answer is yes, it will have an impact, but how is probably more important than whether it will. AI is going to have an impact on everything, the election included. The Way It Will Have an Impact.
Speaker 1
and the data has to be pretty real-time so that the targeting is good. There's nothing worse than bad targeting because you offend everyone. So AI will help with real-time targeting at scale across networks for sure. And that will take the form of what emails you get, what social media posts you see, and what comes through your letterbox in an envelope. So it will have an impact. However, I don't agree with those who think the primary impact will be what is described as misinformation and propaganda. I think I almost don't agree that there is such a thing as I think misinformation is a weaponized word to describe the point of view of those you disagree with. And Obviously Politics Is About Opinion, It's Very Rarely About Facts.
Speaker 2
of The Cartesian World, where we're absolutely certain about what we think. We seem to live in an age where there's almost minimal amounts of skepticism, very few skeptics. Everyone knows what they think about the world, but no one trusts anything they see. No one trusts their eyes. And with AI, perhaps there's good reason, because you're going to have all these perfect fakes. So it's a weird inverse of Cartesianism, isn't it?
Speaker 1
Yeah, I don't know how many of our listeners, viewers are familiar with Cartesianism.
Speaker 2
I'm sure they all are, Keith. Don't patronise our listeners and viewers.
Speaker 1
But it's basically empiricism, logic and facts. Whereas in current society, it's basically opinion and
Speaker 1
you know, there's nothing more worthy in 2024 than being a victim. And that tells you that we're living in a time of emotional reactions, not thoughtful, logical reactions. And once emotion dominates your opinions, you really can't be trusted with the future of the human race.
Speaker 2
That position that you articulated, you hear it before, is that You're suggesting, and correct me if I'm wrong, that you're not subject to that. Your objective is, the problem is nobody else's. Are you part of this or are you separate from it?
Speaker 1
No, I'm not separate from it, but I'm, interestingly enough, I mean, I come from what is collectively called the left. But I am entirely alienated from it currently because of the super emotional content that drives every utterance and really no empathy at all for points of view that are different.
Speaker 2
When it goes back to this issue of certainty, although I mean you're of an age Keith where When You Grew Up as a Leftist, which you were, you were an activist. I mean, it's quite normal to be a young leftist and an old conservative. What about Galloway believes that Biden's going to be reelected. Galloway isn't a political expert, but he believes that Trump will get sentenced. This is not a political show. Do you get any bets on Biden or Trump or neither, perhaps? I wouldn't be surprised myself. It's easy to make these predictions now. It's so hard to tell what's going to happen. I wouldn't be surprised if neither of them are president by this time next year.
Speaker 1
I was on the Gilmore Gang yesterday and this question came up and one of the points that I think is right is that the only candidate Biden can beat is Trump. If the Republicans field Nikki Haley and probably even The Others, Christie and Watson.
Speaker 2
Well, they're not going to, I mean, Hayley is a reality and the reverse is true as well, isn't it? And the only Republican that Trump can beat, well, the reverse is true. The only Democrat that Trump could beat is Biden. I think that's probably true. I mean, they're both so bad, so archaic and corrupt and rotten and bankrupt morally and intellectually. It's astonishing. So what do you think of the chances of hate?
Speaker 1
It's A Toss-Up
Speaker 1
His Vote Goes Up, Not Down.
Speaker 2
So my, and we can revisit this, Keith, this time next year, my guess is Haley will be president. What's your guess?
Speaker 1
My guess is Biden will be president. I'm agreeing with Professor Galloway.
Speaker 2
Professor Galloway. The other thing Galloway says, always bold, that Matters 20, let's talk about some more mainstream tech stuff. Meta's 2024 growth vehicle will be WhatsApp. I've always wondered about WhatsApp. It was always a weird acquisition. It always seemed both fraught. Did you agree with Scott Galloway that WhatsApp might turn out to be the ace in the hole for Meta in 2024?
Speaker 1
It's funny, there's an echo, you can hear it?
Speaker 2
Yeah, I can hear the echo.
Speaker 1
Have you got the Telegram app? It's funny, there's an echo, you can hear it?
Speaker 2
Yeah, I can hear the echo.
Speaker 1
Okay, I've closed down the Telegram app. I think we're streaming on Telegram for the first time and I think it was echoing back. Yeah, you should have done it on WhatsApp, Keith. Yeah, so look, I think Meta is an advertising earner, mainly and WhatsApp does not contribute anything to its advertising revenue currently. So if you really want to analyze Meta as a company, it's really all about Facebook, Instagram, Threads to a lesser extent and whatsapp is more functional and people like whatsapp because it actually provides them with a with a advertising free Excellent service. So I think it's super important when they first acquired it. I wrote an article in TechCrunch saying it's all about mobile Because Facebook needed a messaging mobile play the same as Instagram was all about mobile And so Facebook's now established on both mobile and on the web. Now, unlike Google, where mobile, especially if it's Apple mobile, is a problem for it, for Facebook, mobile is a plus. And so if you look at the share of advertising revenue historically, Metashare is growing and Google's is shrinking. It's still big, but it's down to roughly 50% now, where it used to be like 90%. So I think Meta is not going away and is going to keep minting money like there's no tomorrow. And Zuckerberg, being who he is, is going to invest it in AI and probably in the face mask.
Speaker 2
2023, of course, was the year that Elon Musk renamed Twitter as X. And his vision of X seems to be something like Facebook plus WhatsApp. Professor Galloway believes that Musk will either lose control of Twitter or sell it in 2024. You're a big fan of Musk. I don't know whether that means you disagree with Galloway. My sense is something has to happen because the business at least, maybe not the site, although you and I disagree on this, is in free fall. What's your sense of what might happen? Could he begin to rebuild X as a real business? Bigger and broader than what Twitter was?
Speaker 1
Yeah, so firstly, I think Galloway is being emotional in that part. Galloway is is a zealot against Musk.
Speaker 2
As most of us are, you're one of the few people who aren't. Yeah, but he brings out the zealot in anyone, I mean, because he's so annoying.
Speaker 1
So once you're a zealot, you correlate your desired outcome to the likely outcome.
Speaker 2
And that's like saying, you know, you're a zealot about Hitler or Stalin or Pol Pot. I mean, certain people bring out passion for better or worse.
Speaker 1
Yeah, yeah. So no, but all I'm saying is you can't trust Galloway's opinion on Twitter, unless you pass it through the prism of knowing that he's highly emotional about it.
Speaker 2
But I think in defense of Scott Galloway, I don't think he, he's any more of a Musk hater than most other people. I think it, you know, most other people is telling me, the car switches of the world who he works with people who made their names on Twitter.
Speaker 1
She's not most people. I mean, that she's part of the war against Elon. And fair enough. I mean, that exists. I'm not part of it. Neither am I gung ho for him. I mean, he's a he's a nuanced, challenged personality in all kinds of ways. But Twitter itself, still remains the go-to place for almost anything interesting. You can't get what is on Twitter, on Facebook, you can't get it on Instagram, you can't get it on threads, you certainly can't get it through Google search or through chat GPT. Twitter will be a survivor of the chat GPT transformation because it doesn't replicate what Twitter does. So I think Twitter's a winner now.
Speaker 2
Is it possible to argue that you could have made the same argument about AOL in the mid 90s or Yahoo? They just go away and you may be right. No one's going to replicate Twitter, but it's just it's it's archaic.
Speaker 1
It's history. Well, that's too abstract. I mean, AOL went away because it didn't offer anything of value that you couldn't get on the Internet. Twitter has not been replicated anywhere. It's unique.
Speaker 2
Yeah, you may be right. We will see. Galloway believes that TikTok is going to come for Netflix and Spotify. I have to admit that for me, if I had to name one company that might be in a much worse position in 2025, in a year's time, it will be Spotify. I've never quite understood what it is, and it's not Enron, it's not FTX, but there seems to be something missing with Spotify.
Speaker 1
Well, Spotify is a Me Too company. You know, if you look back at the history, which you were intimately connected to back in your Berkeley days of the Web 1.0. Audio cafe. Yeah. So the history of music really culminates with Google and Apple on mobile, offering the world's catalogue of everything for a small monthly price. And Spotify is a Me Too, and it's pretty hard for a Me Too to compete when other players in the game own the hardware and software side. So it's actually done remarkably well, given the challenges of even being relevant. I do think It's Made Some Mistakes. I think the podcasting shift wasn't great.
Speaker 2
So... But that's the company and compare, I mean, Galloway says that TikTok will come from Netflix and Spotify, which may be true. I want to talk about TikTok in a minute. But Netflix has proved itself to be a survivor. It's invented and reinvented itself brilliantly, whereas Spotify hasn't. Is that fair, do you think?
Speaker 1
Yeah, and I think it is fair because Spotify is trying to offer something for when you are, you know, active. You don't sit down and listen to Spotify like you sit down and watch a movie. Spotify is in your ears when you're on a train, you know, or walking and there's so many competing alternatives to that, that it's super hard for Spotify to get the attention. And I will say again, it's done remarkably well, given that channel.
Speaker 2
Has it done? I mean, that's the thing I always wonder about Spotify. Has it done remarkably well? It's done remarkably well navigating the ups and downs of the market. So they're my dad for 2024. Do you have one, a company that everyone takes for granted that might not seem as inevitable as most people think?
Speaker 1
Not really. You know, I can't think of another company like Spotify that has done super well despite everything, despite the challenges. And I think it's Daniel Elk, the founder, he's obviously a super driven and smart guy.
Speaker 2
Maybe they're the Man United of the tech world, Spotify.
Speaker 1
Well, it depends which era of Man United you're talking about. Desiree Milosevic in the chat is saying that Mastodon is trying to replicate a nicer Twitter.
Speaker 2
Yeah, who cares about Mastodon? I mean all that Mastodon stuff is so irrelevant to me. It hasn't broken through in any way. So there's no company that for you, you scratch your head and think I really don't get that company.
Speaker 1
I don't get that. I forgot the name of it, but the Chinese company that's competing with Amazon for buying stuff. Is it Shane? No. I'm forgetting what it is, but trying to be the next Amazon with lower prices and inferior quality goods. I don't get that.
Speaker 2
So what about TikTok? Is this going to be the year that TikTok becomes A Major Player
Speaker 1
you know, 30 second flick it and go to the next one. That's what TikTok is. That's why people love it. If it tries to break out from that to movies and music streaming, it will fail is my prediction. So I don't agree with him.
Speaker 2
But if it comes from Netflix, it's coming after that market. I mean, you could have said the same about Netflix when they sent DVDs in the post to reinvent themselves.
Speaker 1
No, Netflix was replacing a bad experience. The bad experience was having to walk to Blockbuster to get a video. It replaced a bad experience with a better one and cheaper. TikTok, you know, has no chance of replacing what is effectively a good experience. That's Netflix.
Speaker 2
What about X, though? For many people, particularly younger people, TikTok is X or what X could have been and isn't.
Speaker 1
No, I don't think TikTok is X because the content is what defines X and the content is what defines TikTok and they're totally different types of content for different audiences. Twitter is for you and me, people who actually care to think or debate.
Speaker 2
It is and we certainly, I don't give it much chance. It's for the last two sceptics in the world.
Speaker 1
You know, we'll see, but I think Twitter, the fact that Twitter is still serving three to four hundred million unique people, which is pretty much as it were.
Speaker 2
Well, we shall see with Twitter. I would argue my prediction for 2024 is that Twitter will be or X will be, you know, I'm not sure they'll go bust or he'll sell it, but it'll be in a worse position next year than it is right now in economic and cultural terms. I'm guessing you disagree.
Speaker 1
I strongly disagree. I do agree with Scott on the China-US thawing, though.
Speaker 2
Yeah, well, what about... And Scott, he's supposed to be daring, but the company he's betting on is, alphabet of all companies, the holding company of Google. I would be happy if that was the outcome of 2024. Do you agree? I mean, what does 2024 promise for Google?
Speaker 1
They're highly challenged because the core of their revenue is advertising on web searches and mobile searches. And according to all the stats I read, the number of people adopting ChatGPT for information is growing very fast. And the likelihood that you will go and do a web search is shrinking.
Speaker 2
I take your point, but aren't they separate different products? I mean, ChatGPT, if you go and search on ChatGPT. If you're on ChatGPT4, it was finalized, I think, in April of this year. And if you're on ChatGPT3, it's like two years out of date. So they're not really comparable.
Speaker 1
Well, they've updated, even 3.5 is updated to March 2023 now. So they're not that out of date. But that said, Google has always served many different purposes with web search. And some of those purposes will remain. For example, if you're trying to find a specific product that you want to buy, Google is still pretty good. Even to find the Amazon page for the product, it's best to do a Google search. So Google will not die or disappear. But For those times when you use Google to actually discover knowledge and information, ChatGPT is a lot better. This week, my wife who works at CrunchBase was wanting to consider writing an article about what happens after a decline like in 2008 or when the bubble burst in 2000. you know, what is the evidence that the next cohort of investments is good? And you couldn't do it on Google, but chat GPT produced a spoken answer to that question that took about five minutes. It was very in depth and very comprehensive.
Speaker 2
People use Google to find if out if the local pizza shop is open or what time.
Speaker 1
Yeah, that'll continue. I don't see that going away.
Speaker 2
If you're not bullish on Alphabet, the Galloway's big tech stock pick is Alphabet. What's your big tech stock pick? Is there one in particular, Microsoft, Amazon, Apple?
Speaker 1
Apple and Microsoft will do just fine. Facebook will do just fine. Google has to transition and will. So there may be a kind of a bit of a dip that's followed by a recovery if they succeed. But I think it's clear the big winner, we said it last week, is going to be open AI. Open AI is going to mature from an upstart to a dominant player.
Speaker 2
Yeah, it's interesting that Galloway believes that the tech of the year will be GLP-1 rather than CHAT-GPT. I mean, it's a different kind of technology. I have to admit, I'm not convinced by your argument about OpenAI. I think there are all sorts of political reasons and Altman reasons why. I'm not sure if OpenAI will blow up in 2024, but I'm guessing it will be a choppy year for it. But you believe that By this time next year, OpenAI might be a big tech company. A genuine big tech company.
Speaker 1
It's already valued at somewhere between 10 and 20 billion dollars. I thought it was 80 or 100 billion. Yeah, that's looking backwards. The 80 or 100 is if they get this current sale done, which they probably will. We said a few months ago that it will, it might be the first two to four trillion dollar company. You said that, I didn't say that. Yeah, I said that. And I think it's on track and that will end up being true.
Speaker 2
So you don't see any of the ramifications of all the 2023 boardroom stuff is playing out in open AI in 2024?
Speaker 1
You know, there are tensions, human tensions there. but I don't think the tech is going to be impacted by that. I also think that anyone, any company working with big data is going to prosper. Companies like Snowflake, Databricks, you know, all of them, there's lots of them, will prosper because my life is dominated by data and analytics and predicted and predictions.
Speaker 2
I can't think that that is your business as well. So you don't agree with Galloway that 2024 will be the year of PKI. And I'm quoting him, the AI bubble won't burst, but it will deflate. You don't believe that.
Speaker 1
No, look, his graph that you just showed there is showing the current multiple between the price of the stock and the revenue of those companies. And it's showing that AI is inflated. Another way of saying that is there's a bubble. He's saying the bubble won't burst. I agree with him. But I also think he should understand and probably does that bubbles are rational reactions by human beings to opportunity. And so those multiples are only big if you look backwards. But if you look forward, an OpenAI does end up being worth $4 trillion. Those are still tiny valuations.
Speaker 2
Do you expect there to be an alternative to OpenAI? In the Galloway chart, it includes Anthropic, there are one or two other I mean, obviously Google has its own barred technology. Will OpenAI have a competitor or do you see it as it simply dominating the entire market?
Speaker 1
It already does have competitors. So the real question is how effective are the competitors? And I think OpenAI accidentally, by creating ChatGPT, Created the interface to its product that dominates. That is that chat interface. And just as most people don't leave Twitter, most people don't leave WhatsApp. most people aren't going to leave chat GPT. So first mover advantage in this case is a big plus and makes it very hard for a competitive story.
Speaker 2
And it's always first mover advantage until it isn't. People made that argument back in 1997 about search and then someone else came along. We will see. One issue that isn't going away is the value of news, the role of the news industry. You sent me an interesting piece about how much the news is worth. that was a story about how OpenAI was offering publishers as little as a million a year. I talked to Tim O'Reilly, who brought that up. He said Altman called him with an offer that was easy for him to turn down. What do you expect 2024 to be in terms of the news industry? And you and I have talked endlessly about Substack, which is back in the news this week because of its supposed support for right-wing commentators, what kind of year will 2024 be for the traditional news industry and also for Substack?
Speaker 1
Yeah, I think, you know, I think there's a big difference between Tim O'Reilly and say, the New York Times. And there's even a bigger difference between those two. And let's say CNN. I think the value of actual news, which is what happened today, is going to go to zero. But the value of analysis and applied knowledge is going to go up. So Tim O'Reilly is sitting, I believe, with his books. If you don't know O'Reilly, it's O'Reilly Media. Go and look at all the books that are correlated to tech and deep tech, you know, how to code in Python, for example, and almost anything else. The value of that goes up because expert knowledge is a precondition to good AI, whereas news isn't. So I think that content is going to bifurcate into highly valuable content and less valuable content. And unfortunately for the New York Times, I think it's somewhere in the middle and towards the low end, whereas O'Reilly is towards the high end. So he's right to turn it down. The New York Times may not be.
Speaker 2
Yeah. And of course, 2024 will be the year in which The New York Times Case Against Open AI. Perhaps get into the courts, perhaps resolve. What about Substack? I know you and I have a particular interest. It seems to be a small company that roars, at least on That Was The Week. Could this be a decisive year for Substack? Could it be the year that it either is made or breaks?
Speaker 1
Well, look, it continues to innovate. I'm now doing this post that we're doing now. This video will go as a Substack video post. Substack will transcribe it, acknowledging you and me in the transcription, and it will automatically create a podcast of it that goes to Apple and Spotify and all the other podcast places. So Substack's becoming not just a place where you write, but it's becoming a place where you create and distribute And you get analytics for all the traffic. It's a super, you know, worthy effort to create... Worthy, Keith.
Speaker 2
That's not a word that you or I like very much.
Speaker 1
No, but it's good. They've done a good job.
Speaker 2
It might be nice if some financiers got behind Substack and they acquired X. I think X within the Substack Empire would make a lot more sense than Substack within the X Empire.
Speaker 1
Yeah, no, I don't agree with that. You don't? No, no, I think X is a standalone, it's a global infrastructure. It's like the wire service for everything.
Speaker 2
And you believe in X, it's going to take a lot to convince Keith otherwise. Finally, Keith, you talked about the middle, but you like the idea of the middle there. are two core arguments going into 2024. One about what's called existential pessimism and the other about accelerationism, both extremes. One believes that tech's about to destroy the world. One believes that tech's about to save the world. You believe in a middle way. Can that happen in 2024? Can we begin to recognize both the limitations and promise of tech?
Speaker 1
Well, I think those those two, you know, pretenders to rational thinking. Both are created by this emotionally driven Zeitgeist. They're just two different emotions. So I agree, I agree with the author here that neither one of them really addresses the real question, which is how does the human race continue to improve its condition, such that everyone's life gets better. And, and technology clearly plays a role there. But so too does the question, who benefits? And that question, who benefits and how, is almost never asked by the accelerationists. And the doomsters are the worst. They just are negative about everything. So they don't even ask the question because they don't believe there are any benefits. I do believe there are benefits. And I think we have to ask the question, how do we make sure everyone prospers from those benefits? That's probably where I would be different. But, you know, on the whole, the third way doesn't, should not involve slowing down technology. It should involve putting technology to good use on behalf of everyone.
Speaker 2
Well, there's going to be much to be discussed on that throughout 2024. And finally, finally, Keith, the most important question of all, who's going to have a better 2024, Manchester United Football Club or Tottenham Hotspur Football Club?
Speaker 1
I would say, well, 2024 is 12 months. So that involves the first half of next season. So I think my answer is Manchester United.
Speaker 3
I've got sunshine on a cloudy day
Speaker 4
When It's Cold Outside I've Got The Money Everybody Say I Guess You Say What Can Make Me Feel This Way Is My Girl I'm Talking About