investor, entrepreneur, and podcaster Jason Calacanis joins the usher. He gives us a abbreviated history of the twenty-first century technical school industry, explains why this is like and unlike the summer of 2000, makes some boldface predictions about crypto and the economy, and tells us how he ’ south advising unseasoned headman executives. part of their conversation is excerpted below. If you have questions, observations, or ideas for future episodes, email us at PlainEnglish @ Spotify.com .
Derek Thompson: so the commercialize is absolutely disgusting right now. technical school stocks have been destroyed this year. Crypto ’ s been demolished. growth stocks are down 70 percentage, if they ’ ra lucky. What is happening at the consequence ? Do you think we ’ rhenium witnessing the start of technical school bubble 2.0 ?
Jason Calacanis: It ’ s a bang-up interview. There ’ randomness a set going on concurrently, so this is unlike anything I ’ ve seen. We had the 2008 Great Recession that was based on one thing, real estate, and a bunch together of people getting mortgages who probably shouldn ’ t have gotten mortgages and defaulting. then you had the point com female chest, which I guess is most analogous since it ’ s the like cohort of companies, the like expressive style of companies. But that was very different as well, because at that clock time they had tens of millions of internet users. Most of them weren ’ t on broadband. People were calm afraid to put their credit cards on-line and the business models were not established. It was a identical unlike world. The number of customers you could reach was typically millions to tens of millions. now, it ’ second billions. You go onto the App Store, you can reach billions of people. You go onto both app stores, it ’ s 3 billion people .
And indeed what we ’ re seeing mighty now is, we had a very vibrant market and then the pandemic happened. What happened when the pandemic happened ? Everybody looked at technical school stocks and said, “ My God, it ’ s so easy to make money with technical school stocks. They entirely go up. ” No, they don ’ thyroxine. They go to zero. I ’ ve seen many stocks go to zero and people forget that .
DT: indeed, Jason, you were there for the dot com bubble in 2000, and you ’ re obviously here now for any this is gon sodium be called—the COVID bubble, dot com 2.0, web3 bubble, the name will come. Can you do a brief history of the twenty-first century in technical school for us ? How did we get from the department of transportation com ripple to the pandemic bubble ?
JC: So how do we get hera ? For the death 20 years, we ’ ve talked about how few companies were going public. And the argument I heard as a private marketplace investor—I ’ ve invested in 300 companies privately ; before that I was a diarist and an entrepreneur—is that going public kind of sucked, and the markets were challenging to you, and you had to disclose everything. So all of a sudden, we have all these unicorns, we have all this incredible invention going on, and the clientele models become fabulously blue. And SAS as a business model, selling software to businesses, recurring tax income starts to churn. Things like Salesforce and Slack are precisely printing money. And then you have consumer products like Instagram : All of a sudden they have 15 employees and a hundred million users. You ’ re like, “ Wow, this is such incredible efficiency. ”
So we have this industry setup where it ’ s like, these companies are not going populace, and they ’ rhenium money-printing machines and you can ’ thymine fall back. Right ? And that ’ s when you should start to get nervous. Overfunding happens. And founders say, “ You know, every time I ’ ve raised money—C series, A series, B—it ’ s gotten easier and I don ’ t need to have discipline. I don ’ t need to worry about the bottom trace because everybody ’ s rewarding the top line. ” And obviously Uber was a big beneficiary of this. They just kept raising more and more billions of dollars. And it was like, well, what can Uber do ? Let ’ s go to another 100 cities. Let ’ s do food. Let ’ s do flying cars. Let ’ s be ace ambitious. If the money is coming in cheap, our company ’ s worth $ 20 billion, and we can give away 5 percentage of the company and get a billion dollars, then we ’ ll figure out how to make that worth more than 5 percentage.
And then of class the public markets start getting excited. retail investors join the party again, always an interest sign. And this time the retail investors are much younger and they ’ rhenium very sophisticate, and they ’ ra identical risk taking and they have this app called Robinhood, which I was a seed investor in american samoa well. And it makes it ace easy. They take all the friction out to trade .
Remember, the friction to trade was $ 25. And you had to get on the earphone and tell a agent what your orderliness was. Like literally, when I started trading stocks in the ’ 90s, you had to call up, say, “ I wan sodium buy 100 shares of this at market. ” They say, “ Great, ” charge you 25 bucks to put your decree in. now you can buy like a fraction of a share of Apple, trade it 10 times a day, and pay nothing .
That ’ s all the apparatus. And people lost their discipline on the invest slope, people lost their discipline running the companies. And then the public markets said, as they got overheated during the pandemic, when everybody ’ s home, there ’ s no sports to bet on, and people have stimulus checks and people stop spending money. If you ’ re not going on vacation, if you ’ re not going out to eat, all this adds up, you start buying NFTs, you start buying stocks. What stocks do you buy ? I don ’ deoxythymidine monophosphate know. Reddit said AMC and GameStop are funny story stocks to buy. The wax of meme stocks .
All this starts happening and people are getting disconnected from the fundamental reality of clientele, which is you serve a customer with a merchandise or serve. You charge them a price or you monetize them in some way, and then there ’ s a profit. At the end of the day, all of that went out the window. This is a full-blown contagious disease. The capital news is there ’ s a batch of companies that are not sustainable but most of the companies actually have real businesses. And even some of the ones that are most punish. If you look at some of the most punished companies, Peloton comes to mind, and people love their Pelotons. They got 3 million subscribers—like to have 3 million subscribers in the acid com earned run average would be extraordinary. thus even the ones that are absolutely decimated have pretty loved products. talk to anybody with a Peloton. They ’ re like “ You can take this from me, pry it from my dead hands when I have a kernel attack on it. ” Like they ’ ra not giving it up. And therefore this is a big swing probably excessively far for the overheat markets. But, you know, this is when fortunes are created. I always tell people, fortunes are created in gloomy markets. They ’ rhenium collected in up markets. And here we go, the bicycle starts again.
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This excerpt was lightly edited for clarity .
host : Derek Thompson
Guest : Jason Calacanis
Producer : Devon Manze
Subscribe : Spotify
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