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Speaker 1
hello everybody it is saturday september the 7th 2023 i'm back with my old friend keith tear the publisher of that was the week the tech newspaper last week at this time keith and i talked about The brewing battle between technology, social media companies in particular, and world governments. We talked about Brazil versus X, France versus Telegram, and other conflicts brewing. And we're back on that theme today. Keith is responding in his editorial to an interesting piece by Robert Reich, one of America's leading Political writers, analysts, tech people who argued in The Guardian yesterday and Friday that not only Elon Musk is out of control, but how to rein him in. Keith was particularly troubled by this because one of the points that Reich made was that sometimes foreign governments should at least threaten to arrest Musk. So Keith's created Some AI art, which presents Musk as a kind of superhero with a lot of small police. Keith, you were profoundly offended. If you wanted to press, I don't know if it's Robert Reich was trying to press your button, but certainly this brought out all your libertarian anger, this piece, didn't it?
Well, I think it's more my, going with the French theme, my liberté, égalité, fraternité instincts, because Robert Reich in his headline says, Musk is out of control, which implies that Reich thinks Musk should be under control and he should be reined in, in quotes. Now, Reich is a leading Democrat. He was part of Clinton's administration.
I'm not sure if he's a leading Democrat. I mean, he's an ex-leading Democrat. He's a bit of an old guy. I mean, he teaches at UC Berkeley now, so he's not exactly close to the current powers that be within the Democratic Party, but he certainly represents a tradition within the party.
Yeah, a bit like Kissinger in the Republican Party. I agree. He wishes. I mean, he's not exactly Kissinger, Robert, but that's another story. That's another story, yeah. But his core instinct is to be outraged that Elon Musk can say the things he says.
Yeah, I don't know. Because this is one of these ones where you had a fit. Let's talk about what Reich actually said. The Guardian piece, as I said, it came out yesterday. The headline is, which Reich, of course, doesn't write, Elon Musk is out of control. Here's how to rein him in. Let's quote what Reich says. and he wrote, Elon Musk is rapidly transforming his enormous wealth, he's the richest person in the world, again, no arguments there, into a huge source of unaccountable political power that's now backing Trump and other authoritarians around the world. Would you object to that, Keith? He is the richest man. So let's go back, let's deal with it point by point. He's the richest man in the world.
You can't ask me a question and then keep talking. Okay, go on. Unaccountable. Musk is a citizen, right? He's rich, yes. He's a citizen. Citizens are not meant to be held accountable for what they say, other than by the law. If he breaks the law, that's a different thing. But the idea that a citizen should be accountable is not a democratic idea.
Well, let's go on and let's deal with X, because I think that's the core of the issue. Musk owns X, formerly known as blah, blah. He publicly endorsed Trump last month. No arguments there. And this week, there was the news that Trump and Musk have floated the idea of governing together if Trump wins a second term. He's outraged. I mean, Reich is clearly on the left. I mentioned earlier, Keith, that in a way, Musk has become the 2020s version of Rupert Murdoch, the man that the left hates. Is there a difference between Musk and Murdoch?
There's a huge difference, but there's also some similarities. They're both hated by roughly the same groups. They both offend the sensibilities of what used to be the left, but I think today is more like the kind of control-seeking,
So you are the real left. Is that your argument? They both control media. Are you the real left still? Do you still have the spirit of the left left in you?
So coming back to Murdoch, it seems to me the big difference is that Murdoch owned, obviously, newspapers, television stations. Whereas, of course, Musk owns X. Are they different when it comes to rights use of accountability? Are there different responsibilities if you own a social media platform versus a newspaper or a TV network?
I think the core of answering that is to do with whether editorial control is a significant difference. Clearly, Murdoch had editors who were in control and he could call them and tell them things and they would mostly listen to him um and therefore yeah i do think that there's some um uh you know there are some rules but newspapers do enjoy rights um and certainly as long as they don't break the law the state keeps out of their business except in
authoritarian states yeah and of course the guardian which reich um wrote his piece, doesn't hide its own politics. It's clearly a paper on the left, although it's a non-profit owned by a trust. Do you think that, I mean, when Musk acquired X, at the time it was known as Twitter, when he acquired it, his politics were, I don't know whether they were still forming or hidden. Do you think he could have pulled it off if he'd been so explicitly pro-Trump, pro-Republican?
Look, I've known Musk not as a friend, but he's been in my circle since about 1995, 6 actually, when we were both invested in by Draper Fisher Jervison and we're both CEOs in that orbit. He's quirky. I mean, I don't think he is political, actually.
Yeah, but you don't answer my question. He is political. I don't think you can argue with Reich's point that he's clearly presenting himself, for better or worse, with Trump. I mean, there's nothing illegal about that. You talked about working with Trump on an innovation initiative.
Andrew, when I say he isn't political, do you know what I mean by that? I don't mean he doesn't make political statements. I mean his motivation. He's not a coherent political person. He doesn't have a worldview. That evolves in a linear fashion through experience like normal political people He's kind of a one-off statement guy.
Certainly, that does describe many of the things he does. Other things he's, you know, when he talks about SpaceX or Tesla, he's not an idiot. So it's nuanced, isn't it? I mean,
any... In that sense, is he that different from, say, Trump, who doesn't really ever particularly changes his mind all the time? I mean, it seems like... Very similar to Trump, I know. So whether, whatever, I mean, so you're... I use the word political. I mean, maybe this is, again, a semantic issue. He is interested in politics. He certainly committed his name and his resources to Trump and the Republican Party at the moment. Could he have gone away with that? If he'd been so explicitly pro-Trump when he was trying to buy X, do you think he could have done it?
Well, look, I think he could have because it's all about money. I mean, if you can pay $44 billion, you can do it, even if you're the devil. So, and by the way, I think characterizing Musk is a kind of a fool's errand. It almost doesn't matter, does it? Because the real discussion isn't what is Elon Musk? The real discussion is should Elon Musk be arrested by foreign governments because of things he says? And I think we both would agree that is no. Well, it depends what he says.
And I mean, if your presentation of Musk is that he just sort of just says whatever he thinks at the moment. and he's not a real person, then he can do it. Aren't you giving him carte blanche to say anything? Because nothing, you shouldn't take him particularly seriously.
He clearly is, you know, on the spectrum, let's say. And so, you know, you wouldn't expect Musk to become your financial advisor, your banker, your uh therapist because he's a non-linear thinker any more than you would let donald trump do those things but you don't criminalize him for what he says like i i let's go to something i really strongly disagree with busk about his current obsession with immigration and his agreement with trump that there's correlation between immigration and crime which both are wrong. I disagree with him, but I'm not going to call for him to be a rebel.
Okay, so let's be fair to Reich, because I think you take what he says a little bit out of context. He's writing this piece that Musk is out of control. Here's how to rein him in. Here's how... We, the public, at least, that can control him. He has five things that he lists. Let's go through these because we can talk about one of them, which is about arresting him. But let's deal with the first two. Boycott Tesla and advertisers should boycott X. What do you think of those two? This is for ordinary people who simply hate Musk and his politics.
Well, I think the very concept of punishing Musk for his ideas is a non-starter for me. But yes, it's quite possible. It's already happening, I'm sure.
Advertisers boycotting X. There is a legal case right now that was just approved by a judge against some very large advertisers for conspiring to destroy the advertising base of X. So that could possibly be crossing over.
Yeah, I mean, Reich's piece is to ordinary people reading in The Guardian who are going to agree with his politics and say, what can we do? The second one isn't to ordinary people. Okay, so it's advertisers boycotting. There's been a lot of talk about that, whether it's effective or not. Boycotting Tesla seems... I don't know whether it will make a massive difference to, to mask. So let's deal with four and five and then we'll get to the, uh, we'll get to, to the one that really outraged you. Um,
He has a piece about the FTC. In the US, the FTC should demand that Musk take down lies that are likely to endanger individuals. And if he does not sue him under the Section 5 of the FTC Act. So that's specifically, I think, an X point. What do you think on that?
But he's trying to, I guess he's trying to set, well, you would use the word censor. Some people might say control what can and can't be said on X. And read what he says underneath.
Musk's free speech rights under the First Amendment do not take precedence over public interest. Well, actually they do. Public interest includes the right to hear points of view that you disagree with. And so he's wrong on the face of it. That's just completely incorrect.
Yeah, I was just in New York this week at CyberTech. We did a panel, a Yossi Vardy's event on the new world of fake and truth. It was moderated by a powerful woman from NBC News. I mean, this is a hard one, though, Keith. What can and can't you say on X? I mean, that goes back to Murdoch. That's why it's more complicated because a social network like X or Facebook is different from the Sun newspaper or Fox News.
One of the pieces you have this week is from our mutual friend Albert Wenger, one of the partners at Union Square Ventures. And he talks about approaching the freedom of speech as a fundamental human right, which I think is your position. And he also says there's two ways of doing it. We can also approach freedom of speech as an instrument for progress. If we do the second, then are there reasons why you can control what can and can't be said on X?
I mean, why not? What would be the reason not to? I'm not... So does Reich say that you're not allowed to say stuff that's illegal? I mean, it's interesting, Andrew. There's some new categories now that are not about legality. They've been... they've been created over the past few years. One of them is misinformation. The other is disinformation. The distinction being a known falsehood versus something that's false, but you didn't know it was false. Now, these are not illegal. Neither one of those is illegal.
And the difference, what's interesting, going back to last week's show, which was mostly about Durov and France versus Telegram, is that Musk's social media platform, X, is public, whereas Telegram isn't. So the dark web doesn't really exist on X, does it? These are two different issues.
Well, there are direct messages. I don't think they have groups yet. but there are direct messages which are private. But yeah, for the most part, you're right.
So you're beginning to win me over, Keith. And the fifth one, and we're going to come back to the arrest thing in a second, is the US government and we taxpayers, and this is what Reich wrote, have additional power over Musk if we're willing to use it. The US should terminate its contract with him, starting with Musk's SpaceX. What do you think of that?
Well, it's funny because if the US did do that, the US would be behind India in the space race. I mean, SpaceX is almost the only viable platform for traveling to the moon, to Mars. It seems to be pivotal. United Airlines doesn't go to Mars yet. Exactly. And even supplying the space station, as we saw yesterday, bringing down those two stranded astronauts with the Boeing spaceship having to come back unmanned for fear that something bad would happen. So, you know, I mean, Reich is just on a witch hunt.
So leaving that aside, I know he's upset you, but the difference then with Murdoch, it seems to me, and this is historically interesting, is that Murdoch, for all his power and wealth and political interests, he never was able to compete with governments. Whereas, as you say, Musk can. I mean, companies like SpaceX are in their own way more powerful than NASA. Is this fair?
Actually, I think Murdoch started... If you remember back when he was the owner of BSkyB in Europe, and he was also the star satellite network in Asia, Murdoch would almost always, during election times, be the kingmaker of who would win the next election.
Well, he had a global finger on the balance of power. He did. And he couldn't absolutely determine outcomes, but he could certainly influence them far more than the Russians can, which we always seem to be talking about today. And, okay, so Musk is way less influential than that. Way less.
Yeah, but Murdoch never owned companies or technologies or corporations that... were more powerful than government agencies like SpaceX or more... Yeah, no, you're right.
But that's more of a traditional media influence. And of course, X is different. I mean, what Musk seems to be doing with X now is sort of turning it into a social media platform which is like the sun, except that it's not Murdoch using his minions to take his positions. He's the one doing it. It's a combination of the sun and the old Twitter.
Yeah, I actually look at it with two eyes shut. So let's come to the thing that really outraged you. At the moment, of the five, we're probably about two for two, Keith. I have to admit that of these four, I think boycotting Tesla is perfectly fine. Citizens have every right. If they don't like a company, I should probably boycott Tesla. We've got two Teslas. I'm going to get rid of them. I'm going to burn them publicly this afternoon. Advertisers should boycott X. I agree with that. I'm not sure on... But why, Andrew?
I mean, if I was an advertiser, if I controlled the advertising power of Verizon or Honda, there are just... But why? It's a distasteful platform. I have other options. If all there was was X, I might have to use it. But I'd rather advertise on Facebook. Yeah, but for me to say that.
Ruins my day every time I look at it. It's distasteful. Though I'm sure if I don't look at Facebook. You're making that up because you don't look at it. Well, when I do, it ruins my day. Okay, so we're getting to the final one, Keith. The one that has outraged Keith Teer. regulators, and let's read the whole thing, regulators around the world should threaten, threaten, let's remember that word, Musk with arrest if he doesn't stop disseminating lies and hate on X. And then I'm quoting him, global regulators may be on the way to doing this as evidenced by the 24 August arrest in France of Durov. which French authorities have found complicit in hate crimes and disinformation. Like Musk, Douravis styled himself as a free speech absolutist. But as we said, he's kind of unlike Musk in some ways, and certainly Telegram and X are different. Is there anything in this, Keith, that doesn't make you throw up?
It's not about throwing up. It's about measuring the extent to which Reich and his co-thinkers are prepared to go to try to control thinking and speech. Well, it's just not. It's him. He's not claiming it. It's nobody else. Well, The Guardian published it, so obviously...
I'm completely not arguing that they shouldn't have published it. I'm arguing that he represents a very strong strain of thinking. Musk's sole enemy isn't Robert Reich, as we all know. There's millions of enemies of Musk, and they all would like to shut him up. You're not going to blame this all on the woke people, are you? Or Hamas. I don't think any of those labels are big enough to describe this. It's basically an abandonment of civilized discourse. When you use words like lies and hate, which are non-deterministic labels that are completely subjective in your own head, and you want, quote, lies and hate, to be criminalized, that is this path towards the brave new world or the big brother 1984 society. And it's coming from people who call themselves left. That is real. And it's foundational to civilization that they should not be allowed to get away with that.
Yeah, I mean, I have to admit, I'm not as outraged as you. As you know, I'm hard to outrage, but I tend to agree. I mean, is it because they're in an echo chamber themselves and they can't imagine that anything Musk says and his friend Trump could have any legitimacy? Is Reif really just saying that anyone who doesn't agree with him should be locked up? Well, you know, as you said, isn't there that chant that Trump started the chant, but the Democrats locked him up in their latest convention?
Yeah, lock him up. You know, I think that is where it ends up, isn't it? That's the fear that it ends up becoming real. And it's not that much of a stretch of the imagination that Musk gets arrested now. Well, if he went to Brazil, he probably would be arrested. Probably, yeah. And this idea of the rule of law, which was usually a right-wing kind of words, is the rule of law is really the evidence that society has evolved to the place where there are rules that everyone abides by. What Reich is doing here is trying to break the rules.
Although you are sort of... I think you're... I mean, he has five points. One of them, he sticks in the middle, is a little extreme. But I'm not sure you're being particular.
I mean, you just don't like what he says. No, you have to put those five points, all five of them, into the context of what is his goal. His goal is to shut Musk up and to use whatever means he can to achieve that, including the use of state authority. And... The goal of shutting Musk up is not a goal I approve of.
Yeah, I think you're probably right on that. I think Reich is wanting to shut Elon Musk up. He's out of control. He sounds like a parent talking about a child. Here's how to rein him in. So I think you and I are probably in agreement on that one or that one. certainly less outraged than you. It does raise a bigger issue. The New Yorker ran an interesting piece more about the Durov case. The arrest of Telegram's founder illuminates global anxieties about social platforms, and that's true. And whilst there's a cartoonish quality, I think you're right to write, these are real issues, Keith, aren't they?
Well, Musk wears two hats on X. He wears the mask of the owner that facilitates you and me publishing stuff. He also wears the mask of a user who has opinions. And sometimes those two get confused. But in those two roles, the first of the two, he's very much like Zuckerberg, or the Telegram founder in the public side of Telegram, in that social media is brand new in one regard. It gives a voice to an individual and groups of individuals can use them to organize points of view collectively. And often in some contexts like the Iranian street uprisings of a couple of years ago, we all liked that fact. What happens is the former left hates it when social media is used to disseminate points of view they disagree with.
I mean, left, progressive, whatever word you want to use. I mean, what's interesting is that in a way you're right. And in a way, there are two things going on at the same time. You've got this radical democratization of media where anyone can open an ex account and say whatever they like. On the other hand, you have the rise of these incredibly powerful political, cultural, economic demagogues like Musk and Trump who use the platforms, but not in a particularly democratic way. I mean, it's a top heavy, it's new old media. So it's Musk as Murdoch. So it's a weird combination.
I think you might be overfitting to old ideas there. I think it's more that social media, collectively speaking, represents the instrument for populism. And populism is when people have a point of view that's heard. And that is normally when, as the New Yorker says, creates anxiety in global governments. Sometimes we like that. Depends which government's feeling anxious, right? We like the fact that in Russia, These platforms are like China or Iran. Yeah, you're right on that. So what's wrong when the people have a voice in America? I mean, that shouldn't be something wrong.
I think what's happened is that people like your friend Robert Reich have become the conservatives. For better or worse, I mean, even at the Democratic Convention, there was a lot of USA, USA. The conservatives in today's political discourse, small c, are the Democrats. The Republicans, for better or worse, are the radicals. We may not like them, but they are certainly more radical than the... The Democrats are trying to uphold a system, whereas the Republicans are trying to create a new one.
Because... Did you pronounce it right, Keith? Kamala. Why did you have to put that in, though? I always find that annoying when someone says something outrageous. Oh, and by the way, my politics are this or that.
I'll tell you why I put it in, because... articulating the ideas I did in the editorial will lead to me being labeled right-wing, which I'm not, by those who want to rein in Musk and Trump for that matter. I don't want to rein him in either. And so in order to not be labeled right-wing, I wanted to spell out my views. Now, What you just said is super interesting about conservatism with a small c. I mean, in some ways, I'm being illogical. I really shouldn't vote for Kamala Harris. But why am I? Because I don't agree with anything, pretty much anything, that the Republicans stand for, and I want them to lose. But that's kind of obvious.
Let me revise the question. If, Keith, one of the... One of the things that Harris promised to do if she was elected would be to arrest Musk. Would you still vote for her? No. Oh, so Harris, if you're watching, if you want to lose Keith's vote, then you can be interesting to see if she does get elected. I mean, you had an interesting piece also in the editorial this week about...
Democratic investors convincing her to get rid of your friend, Lena Kahn, another of your close friends. Maybe you should. What would happen if Lena Kahn and Robert Reich went on a date, Keith? Oh, dear. He'd be accused of child stealing. Well, if they were and they were in a missile hit, then we'd know where to look. So do you expect Harris to be more or less friendly to the musks of the world? given the fact that she's getting a lot of Silicon Valley money from people like Reid Hoffman, who clearly have their own agenda too.
I think less friendly. I think it's inevitable that the trends are that we're moving to a place where owners of large successful businesses are demonized as the problem.
Now you sound like Trump. I hope not. We will see. Interesting. This issue is not going away. Let's get Keith to startup of the week. Very different sort of story from the Musk Reich issue. It's Covariant, which Amazon just acquired. Covariant is a robotics company. Why are they the startup of the week this week?
The main reason I put it in is because it actually isn't an acquisition. It's another one of those acquisitions disguised as hiring the team. So it's further evidence that in order to avoid antitrust, The large companies are using new ways of acquiring the companies they want to acquire that are not subject to, um, an M and a process. Um, but they, you know, that's a company that raised almost a billion dollars.
She can certainly suck a lot of time and money out of companies if you don't do things in the way Amazon just did and Microsoft did when it recently made a similar move. And Google just made a similar move as well. They're all kind of learning from each other here in real time. But lawyers are almost as creative as internet founders in finding ways to get around problems.
I wouldn't do any of those things. I do what I already do, which is explain to at least my audience why she's wrong and hope that little by little the world realizes that. I mean, the fact that sponsors of the Democrats are asking Kamala Harris to fire her is kind of interesting.
So I think, in all seriousness, we should, because Reich's point about boycotting Tesla and boycotting X, I think we should start thinking seriously, Keith, about you've got the X of the week from the startup guy. Can't we have a better title? I mean, can't it be social media post of the week? I mean, you may like Musk. I don't like him. Can't we promote another social media? Can't we just promote social media?
It will because you're the one who puts it together.
Words and timings
Itwillbecauseyou'retheonewhoputsittogether.
Speaker 2
No, I read all of them. I don't see anything interesting on the others. Nothing? Really nothing, because they're not used in that way. Facebook is mainly personal stuff. Threads is like antiseptic, you know, denuded content with only one point of view. What does denuded mean? Well, it's... No nudity? It's been anesthetized, you know, what's the right word? Sanitized.
Yeah, well, I think we should... Can't we have a post of the week? I mean, you can use X, but I think we're promoting... You know, if we took our support away from X, do you think the whole platform would collapse?
Now the Rupert Murdoch, Elon Musk is coming out of teeth care. Well, let's get to your X of the week, which is an interesting one, actually, a particularly interesting one from somebody called the startup guy. I've never heard of him. He doesn't have – or he or she doesn't have – I guess it's a he, the startup guy. He doesn't have a big following, but it's certainly an interesting – An interesting X post. Venture-backed startups take a decade or more to build. So tell us about this.
Yeah, so this comes from Carter. And Peter Walker and Michael Ho from Carter have been doing fantastic work producing charts like this, mainly on LinkedIn.
Yeah, I could have taken this from LinkedIn. It was also on LinkedIn. but if you look at the left-hand column, it's the number of years it takes to achieve a funding event.
Not everyone's watching. For people just listening, we have a very nice image, actually, of seed series A, series B, series C, series D, and then the other side is how long it takes to build.
Yeah, so only 2% of startups get to a series D in their first two years. I'm one of those, by the way. Real Names did a an A, B, C, and D in about 15 months. And so when things really take off, that's what happens. But this is a very good way of thinking about the power law of venture capital, because the ones that do it faster are the ones that grow value quicker. So all this is really saying this chart, and for those listening and not seeing, 26%, 38% actually if you do the bottom two, or 52% if you do the bottom three, take more than eight years to get to a Series D. You've got to be patient. Is that what you're saying? Well, some ideas take time, especially if hardware is involved or global growth is involved or if it's enterprise, they take time. Other ones, especially consumer and mobile, can happen super quick. And the chart kind of shows that. And it's saying to a founder, don't do a startup unless you're prepared to spend the next 10 years on it.
Well, it's often, you know, the only way to get cash out of a startup is to sell it or IPO it. It's very rare for there to be any other method like dividends from revenues is not a thing in startups. So how many startups get bought or IPO is well under 10%. So, you know, by definition, 90% of startups that attract venture capital don't ever pay out. That's the name of the game. That's why indexing is so important. And there's a couple of articles this week about indexing, one by Rob Hodgkinson from SignalRank.
Next big thing. So anyone who wants to invest, go into SignalRank, Keith. What's the chances next week of we had – Durov arrested last week. Robert Wright calling for Musk's arrest this week. What's the chances next week that Musk will be arrested? I think he has a bit of a martyr complex. I wouldn't be surprised if he chose to travel to Brazil to be arrested. It would actually give him a bit of a thrill. He could X from jail in Brazil.
Yeah, I think Musk has that third voice in his head where he's actually playing a character called Elon Musk and he does things for the audience. And that means anything's possible because it depends where his brain takes his character.
Well, Elon, if you're watching today, please go to Brazil. Give us something. It will outrage Keith. Give us something to talk about next week. Keith, have a great week. And we will be back with That Was The Week next week. Thanks so much, Keith. Thank you, Andrew.