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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 Can't make me feel this way It's my girl, my girl, my girl, my girl
Speaker 2
Hi, welcome to That Was The Week. This is Keith Teare, the digital version, bringing you this week's newsletter with no Andrew Keene this week. Andrew is in New York, visiting his children, I believe. And so this is a solo version of the podcast. And this week's newsletter is titled Vision Pro is a Hit. And this is being done with the Vision Pro. This is my avatar created by Apple. using the device came about six o'clock last night when FedEx showed up. I was pretty excited at the time. And here we here we now are recording in zoom, just so that I can do this. I mean, let me let me switch myself on by adding meet myself and you can see that there's two of me there's the the real me down below sitting in my office and my books behind that's a real background and the digital me up above um we can we can remove this and go back to me um Tina Gilmore taught me how to do that and um let's first of all just acknowledge why the title of the newsletter is Vision Pro is a Hit. There was a lot a lot of coverage about Vision Pro this week um you know ones that that um I'm
Speaker 2
where a guy with a vast background of covering tech writes lucidly, he's a photographer as well, about the impact of this device on him. And his writing's fantastic and you can feel his emotions coming through it and you can get a sense of it. And honestly, if I hadn't bought one, his writing would have made me jealous. I would have wanted to buy one. Also, Daring Fireball, Daring Fireball is John, John Guber, I think it is not Gruber. I always get that wrong. It's one or the other, wrote a very extensive review, which I thought also is excellent. And Nick Bilton in in Vanity Fair, or Variety, one of those two wrote, wrote a really good review. So
Speaker 2
Really, everybody's blown away by it. Everybody who has any kind of context in tech and is experiencing this for the first time. Just what it can do is astonishing. I mean, I can tell you now I'm sat at my desk. My Mac screen is being brought into the Vision Pro as a virtual screen. And I can see right in front of my eyes here, I can see Zoom on actually on my Mac. And up above it, I've got zoom on, you know, I'm in the zoom twice once, literally on my Mac and the second time through the screen. So there's two of me in the zoom call. You're only hearing the microphone from one. And the the the ability for me to see that. So I can see both versions. I can also see my notes over on the left here from today's newsletter. And it's, it's incredibly convenient. And clearly, I wear glasses, even my avatar has has glasses. I got the Zeiss lenses that are for my prescription. And without wearing my glasses inside the headset, I can I can read my notes really, really well. This thing is, you know, clearly, super expensive, super high end, but from a just an engineering a software point of view, blows me away, actually blows me away. And not very many things blow me away these days. Turning to the bulk of the newsletter, by the way all of those reviews are under a new section called Product of the Week. I think it's only going to survive one week as a section. It replaces AI of the Week this week and you can go down there and click on the titles to go through to the original sources. The first essay in Essays of the Week is one by Jeff Becker. He's a venture capitalist and Jeff as a title, Changing the Customer of Venture Capital, which is an intriguing title, because it begs a few questions. The most obvious of which is who is the customer of venture capital? If you're if you're a venture capitalist, who you're selling to, because customers are the people you sell to, and who you're buying from. Those are your suppliers. And strangely, many venture capitalists want you to believe that their customer is the entrepreneur, especially if you are an entrepreneur. Now, there's some justification for that, because venture capitalists work very hard to make to help you be successful. And so it often gives the appearance of serving you, But you are actually as an entrepreneur, the supplier, what you're supplying is opportunities. And the venture capitalist job is to select your opportunity and start those and decide whether to go with it. And if they do, they should work very hard to make that a good choice. But make no mistake, their customer is their investor, the person giving the money. Why? Well, that's who's paying them. Customers pay you. It pays them two ways. They get paid a salary from fees. Typically, that's 20% of all the money invested can be spent on fees. And secondly, 20% of any profit they make is retained by the venture capitalists. That's their reward. and so they are being paid by their customer for success and for effort and just you know that that that is super weird that we even have to discuss it because it's kind of obvious but most venture capitalists will never tell you the story of their business in that way but that is the business Jeff, however, has a different reason. His title triggered me, but actually, his essay has got nothing to do with that. His essay is super interesting, arguably more interesting. It talks about the need to invest at scale early stage in order to drive innovation in society. And his number is that there should be $5 billion invested annually into seed stage and early stage investments. And the number of number of entrepreneurs who get that can be 50,000 a year. Roughly getting a million dollars each if my math is right. Might not be. You can check me and tell me in the comments. And what Jeff is arguing for there is automated allocation of roughly a million dollars to lots of entrepreneurs every year who meet certain criteria. That is very different to venture capital, where the individual venture capitalist sees themselves often as an artisan, carrying out a craft and selecting opportunities. I don't think they're necessarily contradictory, but Jeff makes the point that that artisan approach can't scale to society level innovation. and for that you need automated allocation of capital to appropriate investees. Obviously at SingleRank we do that. We score companies. We only invest at the Series B ramp but actually we score companies at all ramps starting with Pre-Seed. and we can recommend allocation of capital at massive scale throughout the entire life of a company and when we recommend it it's going to turn into better outcomes than when we don't. on the average. So I'm a big believer in automated allocation and scaling allocation, and allocation not being solely to do with individual venture capitalists. So read Jeff's essay, I think it's I'm going to guess he's going to write more as he thinks this through about how venture capital should operate at scale, especially early stage. But this is a great starting point. It certainly made me think. Another article that made me think is the second one. It's by Evan Shapiro, and it's about the aging population in the United States of America. Now, he looks at the last five years since 2019. And he makes the point that whereas America's population has grown in those five years by about 7.8 million, it has 2.7 million fewer 15 years and under. So it's lost about 3 million young people due to aging in five years. and it's increased the number of 65 to 80 year olds by 7.1 million in the same time period. If you take 40 as the cutoff, there's about half a million fewer people under 40 than there were before and about 8.4 million more people over 40. So we have this We have an aging population, which is also true, by the way, most of Western Europe and Japan, and even in China. So an aging population is, is, is a challenge to an economy. Because you need labor to be refreshed on less productivity is growing even faster than the population of working age is declining. And that isn't happening yet. There's a second piece I read, it isn't in the newsletter because it came out too late, but it's on the newsletter Noah Opinion, which has been in That Was The Week many times. And it's about the US economy and the recent numbers. And it's striking because it makes the point that the unemployment rate in the US is at the lowest point for many years at 3.7%. that in the last period, 350,000 new jobs were created, that's just in a month. And that all of the prior months, statistics were, were changed upwards, because more people got jobs than was thought at the time. And that we now at a place where the prime age unemployment rate That is to say, how many what percentage of people in prime age are employed is now at 80.6%. So we have very, very high employment. Usually when you have high employment, wages go up and that has been happening wages have gone up at an annual annualized rate of 6.6%. So, so you have an aging population with young people shrinking, you have rising, rising earnings, And at the same time, you have something that's quite remarkable in the context, which is an attack on the concept of immigration. Now, you know, when a society has full employment and wages are rising, and when young people are in decline, the obvious solution is immigration. So you have that combination of things. And when you have that, it's super, obvious that the policy of the nation needs to be to allow more people in. And by the way, this isn't just about skilled people. Many people have argued for a long time that we should allow skilled people to to enter the US or stay in the US if they graduated here. And that's a common refrain here in Silicon Valley. But actually these numbers tell you that you also need to have unskilled people, especially young unskilled people. So, so young unskilled people work on farms, they work in fast food. If you've lost that many young people so rapidly, you need to you need to refresh the young population, including the young unskilled population.
Speaker 2
So what about all this stuff that's going on at the border with Mexico, where both Republicans and Democrats have focused on stopping immigration, or slowing it down or blocking it? I'll say two things that firstly, obviously, the border is out of control. No, but there's no process allowing people in that's missing altogether. And the fact that people are coming through the border, you know, and there is no process is A bit of a travesty for any border. The whole purpose of a border is to control the flow in and out. So that's fine. I absolutely agree that the border should not be leaky as it is. But the policy of the border needs to be open. That is to say, there needs to be a concerted effort to increase the population of the US by at least seven or eight million and maybe more. And, and, and that is in this, you know, massive distinction to the prevailing narrative, which, my personal opinion is, is entirely racist, driven by nationalism and fear that the border is not just out of control, but that bad people who we don't want are being allowed to come through it. I think mostly they're probably good people who we do want. We just need to have a process to allow them to do it legally. That said, Ron Conway, who some of you will know the name, Ron Conway is a prolific investor for many decades. started Silicon Valley Angel which is now known as SVA and has had some fantastic successes with unicorns and others. Ron this week signed what's known as an amicus brief with 50 businesses to protect a US law called known as DACA. DACA is a rule that allows children who enter the US illegally as children. It defers any action against them and gives them a path to citizenship. And DACA is apparently under threat. And so it's, it's, it's it's to Ron's credit that he is leading and publicizing this and seeking to get a call to support the continuation of DACA. And DACA is really all about young, largely unskilled people. So this is a given the context that we started with, it's it's remarkably irrational to want to stop DACA. So while while done wrong, talking about talk about government and policy and regulation. Immigration isn't the only the only thing covered in this week's newsletter. We also talk about Amazon's decision to discontinue its attempt to acquire iRobot. iRobot is that company that has robots that clean your carpets, basically, automatically. You're probably familiar with that. Amazon tried to acquire the company. The company wanted to be acquired. The European Union blocked it on anti-competitive grounds. And last week, that was announced that Amazon was pulling out. And within less than 24 hours, iRobot laid off 31% of its staff, and has made the judgment that it isn't sustainable in its current form, given that it's not being acquired. So this is this is, this gets us into the the irrationality of the European Union's decision
Speaker 2
to block the deal, just like they did the deal between Adobe and Figma. That decision was also centered on the EU. And it's funny, I saw an interview this week with the commissioner at the EU who deals with this. And she is really very good in terms of her ability to articulate her point of view, but she has a blind spot. which is she really doesn't understand the value chain from big tech back into society and innovation. The way it works is when Amazon acquires iRobot over a billion dollars goes back into the pockets of venture funds which then goes back into the pocket of their customers, their investors as we talked about earlier. In the case of Adobe and Figma it was 19 billion dollars. That money then gets cycled back into new venture funds and new innovation. And to Jeff Becker's point, innovation at scale requires large amounts of money to be invested every single year. By blocking these acquisitions, the EU is effectively cutting off the supply of money into innovation. And obviously that doesn't benefit society at all. More ironically, their claim is that it's for competitive reasons that they're protecting small companies from big ones. Yet the small company in question suffered a massive unemployment of 31% of its workforce due to the fact that you wouldn't let it happen. So this to me is, you know, more evidence that regulators are out of control. They have no idea. They're more out of control in the US Mexican border. They really have no idea how innovation works and what the flow of money needs to be. and they're making bad decisions and feeling good about it as if they're protecting somebody when clearly they're not. That happened again, I mean, not exactly the same phenomenon, but government and regulation and tech all came together in Washington, D.C. earlier this week at a hearing in Congress focused on child suicides. and pointing the finger of culpability at social media. It was a highly staged event, almost like a show trial, to be honest. There was no real dialogue, there were accusations, and speeches aimed at the social media CEOs who were there. And at one point, One of the representatives asked Mark Zuckerberg to apologize to the parents of deceased children who'd taken their own lives via suicide. And Zuckerberg did. He stood up and turned around and he kind of apologized. I think literally his words were careful, but it was certainly represented in the media as if he accepted responsibility and was making an apology.
Speaker 2
You know, insofar as that's true, it's a big mistake. I think, because if you ask the question why young people take their lives, and if like me, you've, you've had teenagers, I've, I got one still, and two others have just turned into their 20s, 21 and 22.
Speaker 2
Their life is full of challenges. Challenges at school, challenges in sports, challenges to do with going through puberty. There's, you know, challenges with partners. There's all kinds of challenges and sometimes they get depressed. And if you were to ask the question for any teenager, what is causing their depression? Social media wouldn't be high up the list. Certainly, social media is a canvas that they they participate in and sometimes live on and often far too much. But it isn't the cause of anything. It's where things play out, but not where things are created. And the finger accusation from Congress to the CEOs should have been resisted with a more intellectual rebuttal. But instead, There was almost like an apology, a bowing down, being ashamed, if you will. Even the ex-CEO, she made the point that only 1% of the Twitter user base are in the age group in question. That's really beside the point. The point really is, does social media have to have the power to cause children to do things that are not suggested by the rest of their life? I don't think so. I think that's really wrong. It reminds me of earlier debates about whether Hollywood was responsible for gun crime because it did movies with guns.
Speaker 2
It's getting the horse in the cart backwards, in my view. And so I wish Zuckerberg and the others would have a conversation prior to going to Congress, use the research that's available, and show that, sad as they are, for the fact that there are children who commit suicide and that's a real thing and society's full of pressure. My local high school here that all my children went to went through a phase of several years where there were suicides. The local railway lines were the chosen method. And You know, in diagnosing why the pressure on those teenagers to perform at school, it's a highly competitive school, driven both by the school itself, but also by their parents, was a massive factor in their depression. And they probably were all on social media. But no one would have believed that was the cause. it was it was simply a part of their life any more than their tv was the cause or their radio was the cause or their streaming was the cause anyway enough said that's my point of view you may disagree it's a highly emotional topic and clearly nobody wants to in any way, you know, minimize the impact of child suicide on both their friends and their parents and society at large, I certainly don't. But I same time, I don't want to point the finger at something that isn't responsible and isn't isn't the cause. Finally, on a more upbeat note, there's a great piece on the future of work and AI. Chris Huer, who I've known for many years, runs an institute focused on the future of work, and he's authored this piece, and it's in the Essays of the Week. I recommend you read it. It's great reading. That said, this is the first and possibly the last time you'll see my avatar replacing me on That Was The Week. Andrew will be back next week. I am going to play a video immediately after this that shows you how my 22-year-old son experienced the Apple Vision Pro for the first time last night and it gives you a sense of of the impact of it on on a first time user. So that was the week. See you all next week with Andrew. All the best.
Speaker
Wow.
Speaker 1
So the thing is, there is edges I will say it's not 3d like total world. You know what I mean? Yeah. But it's pretty much it's pretty great. Well, you don't need to touch it unless it's falling off my head.
Speaker 3
Oh my god, I'm so close up. Whoa, you Is one gonna scare me? No. Okay.
Speaker 1
Wow.
Speaker 3
I can't imagine video games with this thing. That'd be crazy. Whoa, dinosaur.
Speaker 1
Have you shown Luke? Not yet. No.
Speaker 3
Holy crap. Did it just come now?
Speaker 1
Yeah.
Speaker 3
Am I speaking really loud? I feel like I am.
Speaker 1
You are. This is we're in the first hour of this being in the house.
Speaker 3
Whoa, I'm looking at one in the face right here.
Speaker 1
I think there's about to be an attack. Have you seen this already? No. No. Wow, it feels real. Feels like I'm right here. And if you click your fingers at all, you can pause at any time by clicking the pause button.
Speaker 3
Okay, I paused it. And then you can even look around while it's paused. So the one thing about this that scares me is this is like more cool than real life.
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 say What can make me feel this way? It's my girl, my girl, I'm talking about her