Dead Cat with Casey Newton
8:00PM May 31, 2022
new york times
all right, we're here with dead cat. This is Eric newcomer, Tom and Katie are here. And we have fellow sub stacker Casey newton of platformer we're gonna sort of just fun episode talk about a couple different things. Interesting piece in The New York Times about substack. Failing to raise funding, which Casey has written about SNAP stock is down 45% In the last month, another interesting happening in the sort of social world and then it feels like we haven't talked about Elon Musk on this podcast. And
we thought about other things, even though that is the dominant story in writing some
tips that you got to do Ilan again. Casey,
welcome. Thanks. Thanks for coming on to the show.
Thanks for having me, gang.
How are all things that how are things in platformer world these days? Since we're going right into substack? What's What's the latest from the platform, which I don't read, by the way? Thank you. But my understanding is that it's like some sort of French language newsletter that covers like Algerian startups. That's basically it. You guys broke the big news about Flink and kudzu. So
if you want all the latest on sort of the Tick Tock behind the Flink, could you deal, go to platform or dot news? And subscribe? Things are going really well, at platformer like I truly do wish I could go back and talk to the version of myself that was thinking about leaving my job and starting a sub stack and just explaining like, here's everything, what's going to happen after you do this, and it would have made the decision a lot easier. So very happy to be doing this independent thing. Like I remember
talking to that version of you is I called or I forget, if I text you, and then we got on the phone, Casey, because you had your newsletter at the verge. And I you know, I was a Bloomberg. And so I got on the phone with Casey and honestly, I had no idea he was about to start platformer, though it made sense. And I was like, Oh, I think I'm gonna quit my job and like start a subset like, Do you think that's crazy? In case he's like it? Hi, I'm thankfully, I feel like they're pretty different. I would write about tech broadly, but I'm very money oriented. You're very platform oriented. We have sort of our different enough spins that we don't feel like competition, but we also have names worth Er,
yeah. Casey, do you feel competitive with Eric, like, tell us he's
hugely competitive with air. I mean, the whole reason I came on this podcast is I want people to hear my voice and be like, Why am I subscribing to Eric's publication?
Joke's on newcomer, because this is a free product. So this is doing it need to run the disinviting competition on we need to
run the sort of New York Times style daily ad, you know, the daily is free. But what really pays for this is if you subscribe, so subscribe to newcomer. And then if you're already subscribed, or newcomer you can subscribe to platform are
so tiny and I are collecting nothing from this. I just want that out there.
I mean, just to like be a little bit serious about this. Yeah, I grew up reading the LA Times had a lot of really great columnist there. And I just basically lucked out that I lived in an area that the LA Times like delivery trucks reached. And as a result, I got access to these great calmness. They're all of these people now that you know, particularly now that the newspaper industry is going through such a hard time that don't have access to those people. But we have the internet and so you can just find the columnist that is right for you. And you pay them what I think is a pretty reasonable low monthly rate. And you keep a columnist that you love in business. So like I just love that that model of the world that we're living in, and then the people who are really good at it are like able to live lives beyond their wildest dreams now,
does it sad on you, though, that this might be gutting your beloved LA Times?
It? Yes, I'm very sad about you know, what's what's happening to newspapers. I also as somebody who worked in newspapers for the first 10 years of my career was very frustrated by how slowly they were evolving, right, even though the writing what was on the wall. You know, some publications like The New York Times, in particular, I would say have done an incredible job of of remaking themselves. You know, more recently, publications like The Washington Post, I think have really kind of risen to the challenge. So I think you can do it, but it's a lot easier for the big national international publications to do it than the local pubs and that and
is it really a zero some like, Katie I feel like that sort of the media in the old newspapers sort of frame do you see this? Like, do you think really like $1 going to a substance At writers $1 loss to a newspaper,
I don't think that's how I would formulate it. I was just saying that the idea of people getting news from places other than traditional media, right? At Large siphons away
well, on the local newspaper, look, I think that the thing that sustained them for the longest time was the sports section. Right? Like that was, you know, people had a relationship to the beat writer for the teams that they followed and the column that's there. And then there was that awful period for the athletic when they were on their way up. And the CEO Alex Mathers said very elegantly to the New York Times, you know, our goal is to bleed all of the local sports, you know, like all the local papers from their sports sections, at least he's, I
believe, with a goal like they're trying the New York
Times bought the athletic,
yeah. How did nobody, like make that connection? When that whole deal was going down? It was hysterical. I mean, and I like Alex a lot. But like, it was like this whole moment of like, well, I guess he didn't believe the right person to frame the
news, which is really an not news story. The New York Times then Molen reported that, you know, substack had been out trying
and already making waves at the times their media reporter Yeah.
And, you know, they've been trying to get valued at seven 50 million to a billion. And the round didn't come together that they had revenue, about 9 million in 2021. And, you know, I think important context for this is Andreessen Horowitz, as invested in both substack and clubhouse right and clubhouse, which has like no revenue, raised at a $4 billion valuation was extremely buzzy. And substack is sort of been the sort of I don't know, ugly stepchild. I'm sure they'd hate that. But, you know, just isn't as glamorous hasn't got the attention. But I mean, subjects producing revenue, and has seems to have more staying power than clubhouse. Anyway, so Casey has written about this, he is relieved maybe that substack didn't didn't get the money. So Casey, what's what's sort of your argument there? Yeah, I
mean, you know, we've all written stories about startups that raise too much money and investors hopes got too high. And then the investor started to meddle and gave them a bunch of horrible ideas for what they should do next. And that almost always comes at the expense of the user base, right. And, you know, earlier this year substack release of app, by default, that app turned off email notifications. So like, if you downloaded the subset app, you would no longer get platform or in your inbox. The whole reason I wanted to do this line of work was I had this direct connection with my audience. So you could already see that potentially going away. After you know, I and others wrote about this subject, I wound up walking that back data match scribe
people who, who got the out from email, which was insane, like, I agree,
but they reverse course, but you can imagine, you can imagine a world where they were suddenly, you know, they had an extra 100 million dollars of venture capital, and two years go by, and their investors are getting really nervous. And they say, you know, what, actually, I think it's time for us to take 20% of your revenues, they're like, whatever it so I think that like, they're still in this and all of a
sudden, then platformer is riding on another platform, you know, instead of an email.
But that's the risk, right? You know, I actually think that over the years, subtracts 10% Cut has come to look more and more reasonable compared to what other people take, which is maybe something we could talk about. But you know, but basically, I'm relieved that they didn't raise this money, because I think they still have some basic structural questions to ask themselves about what they're doing to get the combat kind of core model working. And I don't think you need another 100 million dollars to do it. Right. Like they need to figure out how to live within their means, and really figure out how to grow that base of users and get themselves to like sustainability.
I strenuously disagree with you. I mean, it feels like for once the media business had a chance to have Blitzscaling at its back, and then we don't even we don't get the money.
I mean, what what would they do to blitzscale they would just go out and pay like 5000 More people $100,000 To see if they would turn
into right What did was in the I didn't read the full story, but what was the essence my signature on the show, but what was the plan with the money? I mean, what did they sort of see as the value and and I
don't know that that was reported? I do? I think a key point is that substack has said that they're toning down their substack pro program, their VP of comms was on a Twitter spaces with me and she she said that, and I think that's interesting, because I was really, I mean, I didn't I didn't get money from them. They offered me like a weird small loan that was definitely not like a sign of strong belief and newcomer, but, you know, I think it sort of incentivizes you know, sub stacks that don't have sort of business front and center to start and then potentially not succeed but But to answer the question of how I like money to be spent to build ways for them to drive audience which is the thing that they haven't haven't done Only
so you can work out a couple of interesting numbers based on what we know about substack. So they just passed a million paying subscribers in November, I believe. And we now know according to Ben's reporting, that they had about $9 million in revenue. So
9 million in revenue, I mean, just back of the envelope that assuming 5 million of that is coming from Barry Weiss. Maybe 2 million is coming from like the bundle of newcomer platform or Glenn Greenwald. And Matt Taibbi, the rest is probably Alex Berenson. Is it mostly the revenue breakdown they
have they have more publications making more money than I that I think people like Ken
and you're very wise, Barry Weiss is number six. I just don't want to unfairly compliment her because Letters from an American Kevin Heather Cox Richardson is one on politics, the dispatches to Matt, Toby's three, the bulwarks for Glenn Greenwald's five and she's six anyway, just factcheck there.
But if you look at the numbers, what that means is that most people who subscribe to a public sub sect publication are only subscribing to one, right, because most of these things are somewhere in the like 70 to 100 bucks a year range, those subsets hole, you know, one of their big promises is you can be a part of this network, and we're gonna make it so easy for you to get customers because they will likely already be a customer of another substack. And from there, it's just a couple of taps. And all of a sudden, you know, we charge our credit card for years as well. You know, and they even will show you like a graph of where people come from and you know, to hear substack tele there's suddenly a lot of like existing subset customers. But wait, and then by the way, maybe they are you know, like, I'm not saying that I doubt them. But it doesn't seem like most people are having that experience. And I do think it's like a long term risk to them.
What I mean, we've sort of seen this particular game play out so many times in the media of building up the subscriber base, and everyone's looking for the next wave that's going to help you grow the business. And the obvious one is just bundling, right? It's all the same playbook. And I'm assuming you're talking about growing audience growing subscriber base, that's clearly going to be on the table, they're going to try to bundle you guys with with other people have similar topics, or maybe even have like a diverse bundle. So I'm skeptical. I don't think it's a great idea. To be honest, I think it's a way to juice numbers without using revenue.
A key a key feature that they've rolled out is recommendations where instead of some sort of viral algorithm, writers can recommend other writers. And that's been driving a bunch of subscribers to people, including myself, is a great, great or Ganic feature where writers can decide what they want to do.
That's like sort of, like on the right hand side of the page. I have the blogs I like to which was kind of like the it's sort of like it's it's preparing people psychologically for bundling. Well, yeah, because think about how this has played out with cable, right? There was cable. Everybody hated it. Like why do I have to have all this garbage just to get ESPN. And then there was like Netflix and Paramount plus and Amazon Video, and then people woke up one day and they're like, I'm paying Wow, hundreds of dollars a month for all of these individual streaming networks. And that has to come to an end at some point. And so how that comes to an end and how it shakes out is still being worked out. And I think that for direct to consumer news. It's sort of a similar idea. So if I'm paying $150 For newcomer, and Casey whatever case he's charging me
$100 is an insane bargain right away.
It's 33% off the newcomer price. And so
I'm helping people so you got money, like I am publishing decks from billion
dollars, just between the two of you. It's $250.
My retirement account and every company Casey writes about
and say that I also want to pay Heather Cox Richardson I also want to pay you know, Matt Taibbi suddenly I'm like, why am I paying $1,000 a year for news but like Casey said, most I not, could I not just pay less money and subscribe to The Wall Street Journal? I mean, so that's sort of where you what you come to which is by bundling feels like the natural
segue comes from the New York Times reporter.
It's where it's gonna I mean, it's coming guys, there's there's zero chance in my mind that that's subsectors. I think
what you're under under estimating is the idea that like, niche audiences, like how would I make more money off that like I have a sustainable business now making more than I make a Bloomberg? I feel like sure you guys are my friends, media people subscribe to a lot of newsletters because you need to stay up on media. But I think you guys are the sort of outlier cases and subscription behavior most of the people subscribing to newcomer you know, yeah, I publish some exclusive financial information that they want to read and they sign up to see that like, they're very they're in sort of the VC world. You know, they're interested in And so I just I don't think they're like subscribing a newcomer because they're like these general consumers who want want some very sophisticated VCA.
And I think that the it's probably a good idea. And you and Casey obviously know this better than I do to think about the financial fortunes of the folks who are writing for substack versus the financial fortunes of substack as a company. Sure. So it's true that you too, might be doing quite well. But how is substack doing overall? And I think that that's where the decision making around something like bundling comes into play, less so than how you or Casey you're personally doing. And the bundling aspect might not be for you. But if there are, say, you could guess hundreds of people on substack, writing about their grandma's favorite recipes, wouldn't it make sense to put all those grandmas together with all their delicious recipes?
Yes. So I actually made the example that we were talking about this in my Discord server this morning and food writers was the example that I use. So what I like to see substack consider is to offer essentially optional bundling tools, so that if you are a recipe writer, or a food writer with a relatively small following, you want to go in with nine or 10 or 12 other people that are doing the same thing, help each other grow, you might actually sort of come out ahead and all of that. And at the very least, like if I were sub sect, that's where I would start because, right, because if they come out, you know, tomorrow, and they say we're introducing a Netflix model, and it's like all you can eat for 10 bucks a month. You know, people like me and Eric are gonna run screaming,
destroy our friends. Yeah,
right. And I remember Apple tried that with their news bundle with Apple news. And they couldn't get almost any publications to sign on board with that, I think just the LA Times and the Wall Street Journal. But it was a fiasco, they couldn't get the other big name pubs that they would have wanted. But the interesting thing about you know, this bundle of niche products is that in television, it doesn't work. I mean, like, the bundle model only works because ESPN is the most popular cable channel in the country. And it charges significantly more than any other network to the cable distributors. And they kind of keep the whole business afloat, right? It's like you want ESPN and we're going to bundle everything else in there. And it's part of the kind of hard ass negotiations that the media companies have. And you know, with the like, different skinny bundles, which was a whole failed model. There were attempts to make, you know, non ESPN bundles there is this company still out there called Philo, which was, you know, they would pejoratively refer to it as the loser bundle, because it just had AMC and, you know, HGTV and all the discovery other network
viewers were losers or the
Commonwealth? I'm not I'm not casting judgment myself as to who was the real. But, but yeah, and so
maybe it's one of those rare things where everybody loses. That's Yeah,
that happens so often in media. But But yeah, I mean, I think the trouble with the idea, I love the idea of what you're proposing Casey and it obviously is like, you know, helping to rising tide lifting the weaker boats,
I don't know, kind of like a much more organic way to do customer acquisition.
Yeah. But it's just there's no history of it working. And that's another.
I will say, though, slightly related. If somebody offered me a channel, and don't care how it came to me streaming whatnot, that was only like murder shows, I'd be very excited true crime shows if I get NCIS law and order like CSI, etc, all in one channel. How much? How much money do I have?
I think all those shows are on CBS.
The ultimate bundle?
What about like that shutter? Like? I mean, shutter is a streaming service. That's just horror movies, right? And it's probably not like a massive success, but I don't know it's a business.
Yeah, it's okay. It's part of AMC. But But I guess the reason I bring it up to you guys is that like, it would be a little bit strange to bundle newcomer with grandma cooking blogs, or, or, you know, platformer with auto blogs or something. But they kind of need those anchor publications in there to kind of prove larger value. And I think that'd be that'd be where the negotiation happens.
Maybe eventually, they will go to like the very biggest sub stacks and just offer them a great deal and say, you know, you're making a million, we'll pay you a million and a half, if you're part of this bundle, you know, because we know you probably wouldn't make that as part of the bundle, just by the basic math, but you know, we want to incentivize more people subscribing, like, I could see them doing that. But, you know, we've been talking about this from the subject perspective, which is good and fine, but you think about it from the writers perspective. It's like, they also just have a bunch of writers on their platform now who could leave and just do this sustainably forever? And it's not clear that you actually need to substack to keep the business going. Right. Like, you know, journalists are so cynical and pessimistic about every business model that I think they aim under.
That I'm just Tom just, they
underestimate what a great job this can be. Right? You think about how big the internet is, if you can find to that and people that pay you 100 bucks a year, you're making more money than almost any media company would pay you for any reason. There's a lot of groups of 2000 people on the internet. So like, to me, the really exciting thing here is, you know, I hope substract because it has a long successful run, you know, I have no plans to leave it, it would be inconvenient to do so. But like, also, I'm not terrified about them going out of business, because, to me, the model works like I found my few 1000 people, and I can just do this as long as I want to.
And we have a direct relationship with stripe. I mean, part of the reason substack has been able to recruit everyone has been the fact that you can leave, I don't think they would do a bundle that would infuriate writers, I think they would have to do it in a sort of additive way. And I want to talk about other things, but I do think the long tail issue is going to be a problem for substack have I had to make my business case against them, I think, you know, in anything, you know, influencer economy, sort of celebrities, when and that the top sort of get sort of really, really rich, and everybody else is sort of screwed. I mean, I feel like I'm sort of, I mean, we you can analyze, like the substack lists and sort of see, and I do think there's a sharp drop off, you know, from 12345, and then bye, bye 10, it's probably much lower. And so if they can't get the longtail to make good money, then they'll have less fewer sort of new subsets coming in with a shot at being sort of the celebrity writer or I don't know, okay, see, what's your view on that? Well, so
let's talk about the longtail the number one substack publication is a guy that writes about how to manage your career as an engineer, basically, if you pitch is that number one overall. Yeah, on technology on tech. Yeah. And so if you were to pitch that column to any mainstream publication that said, that's way too niche, Hey, get out of here, our readers would hate this guy's this guy's easily pragmatic engine 450 500,000 bucks a year, right. So if there are more niches like that, then I think the longtail is actually going to be really successful. Now, you know, we could talk about the characteristics that these really successful businesses have, they write for
rich people, continuing education for rich people, they tend
to be something that you can expense, right? They tend to be something that helps you make more money. So like not, you know, if you're if you want to write a poetry diary, it's probably not going to succeed to the same degree. But I think it's much more productive to think about this in terms of like, what sorts of publications could work and who you know, who is the person that could write that publication, and add that I think you'd have a bunch more people making half a million bucks a year.
And one thing that I really liked about this part of the conversation is that it shows that you can be really successful, and an online platform, where you have a broad audience where anybody can access you without being sensationalist, and insane person fighting with people, and just being generally wretched, aka, the Twitter model. Whereas it's like you just if you just want to nerd out with a bunch of people who have your general nerdy interests. That's great. And actually, I don't know that a poetry version wouldn't be successful. Because there's a part of me that's like, well, if it were Edna St. Vincent Millay, maybe I wouldn't give them a little bit of money. But that's so great. That makes me so happy.
And one of the biggest viral hits on substack of the year has been someone who's just sending out chapters of Dracula, like, I don't know if it's once like a couple times a week or every day, but it's become a huge Tumblr meme. Because of course, Dracula was, I believe, it's an epistolary novel, you know, and so, you know, people are a Tumblr, you know, because they know what's going to eventually happen to the narrator, or just sort of, like, don't tell me are having and we won't spoil it here on the podcast, but people are having a lot of fun, just sort of in the in the lead up to this. And again, you know, that's just like a public domain work that's a bunch of money or I don't know if they're monetizing it, or not, I mean, you know, it's a public domain work, but but they still could be up, you know, people are being creative with it. And I appreciate Katie bringing up the fact that like, you know, we as journalists who live on Twitter all day, you can come to believe that Twitter is the only way that you could ever do media and that every single story has to have the elements of scandal and outrage dialed up as far as they can possibly go to have any chance at all of getting attention and then like meanwhile, like I don't know, just like go look at the headlines on the stories that Eric and I write they're like, beautifully boring, like they never over promised. I know
sometimes I try to make them more boring. Or it's just I I don't have a very Yeah, I'm not no salacious. No. Most reds by the way, just out of curiosity, every time there's a battle or is the battle it signal or like the war over? Was that other the company you covered? Basecamp Yeah, exactly.
Yeah, I mean, look, I you know, and I've written the stories I would argue that the material in there justifies the headline. Yeah, I think like laughing the trick is just not to constantly over rotate like I think we got all named publications that just always sort of put Get the most absurd headline on everything. And it just shows their deep insecurity that there's actually enough material in there to get anyone to justify
Yeah, listen, sometimes we have to AV test those headlines to find out, which is the most absurd. But we know when we've hit it, I will say something, you know, just to both of you guys, and generally where the industry has gone over the last few years that I also find very heartening is the rise of the reported column, I think is very much attached to the substack model. And, you know, we saw people at like Ben Smith at the New York Times do a great job at this. But I actually think it's a great direction for journalism to go because I don't think there's any turning back the clock on people's opinions being out there as journalists, I mean, Twitter is fundamentally broken that it for for most reporters, I think, but what I what I liked so much about, you know, newcomer and Casey, remember, when you started, I think before it was called platform, or when you started your newsletter, and you basically laid out like, here's the way that you're hearing my views on the world of the internet. And like, I believe that Facebook has caused a huge amount of harm, I think Fox News has caused more, you probably have other tenants in your, you know, you know, your, your Hadith that explains it more in depth. But I think that's an important thing that has come out of this whole trend, which is, you know, you can still ally yourself with a political or social worldview, but also get like, you know, general general nutrition from it that is valuable to at least like supporting your worldview, and like maybe giving you opportunities to think about things.
So there's my there's my class who like couldn't thank you.
Thank you for saying that. But by the way, that idea of sort of like laying out here's where I come from, that's an idea that I stole from Jay Rosen, the NYU professor, anyone can do it. I highly encourage journalists to think about doing it. It's, you know, it's enormous ly clarified to just like, look at a blank google doc until like, what do I actually think about the world and just try to write it down. And once you have, I think it just, it brings real integrity to your work. You know, I get so frustrated by all these really talented reporters that I follow on Twitter, who's like whole mode of engaging with the world is just like, basically, quote, tweeting stuff with lol and lmao. Like, that's, that's their only, like, if you're a reader of those publications, and that's all you see those reporters doing, it's really hard to believe that they're there to do anything you know about the world, but laugh at it. And I think that that actually undermines the credibility of journalism. So I appreciate what you said, Tom. And yeah, I'm a huge fan of the reporter called, like, Ben Smith is basically my North Star every time I pick up the phone,
Band, but I think he would love to hear that.
I told him the other day. And for me, I mean, Casey, a little further along in his career, but for me, like, you know, I don't know if I would have been able to get a reported column job. And so this was a way to sort of force the issue. And thankfully, you know, I got enough subscribers to justify it. But it allowed, you know, that's a job. That's sort of, in some ways, not the case with Ben, but for a lot of reporters given to reporters once they're tired of reporting a little bit, but it happy to have it sort of a little earlier in my career that I might have been able to at a traditional media outlet.
Also, you know, beyond just the reported column, we also support the just very good and informative column, which maybe could transition us to Elon time and in Matt Levine's continuing domination. I know he's so good analyses of whatever bullshit Elon is throwing out at us on a weekly basis.
He comes in armed with facts. That's what makes it really different from a
well, you trust him more than the financial system or report, you know, it's like, Oh, this guy is the decider of what how the world works, and I read it anyway.
What should we say about Elon? Should we should we go into it? Should we save it for the end? I sort of jumped to it.
But let's do that. I mean, I think it's, I feel like the Jack Dorsey Elon thing has been the biggest recent development. I mean, Casey as a close watcher of Twitter, like, What the What's wrong with Jack Dorsey? I mean, he like I mean, he's basically betraying the guy he put in as CEO. It's like, Parag has been CEO for I don't I don't know the guy maybe is bad, but like, he's been in it for like a couple of months. And now Jack's like,
none of us can remember pirogues name.
Jack Dorsey's position is, ideally Twitter would be controlled by no one and it should be this utopian anarchistic world. But since we can't have that, let's have a fascism of Elon Musk on Twitter instead, and only the strongest among us can rule like, what what is the guy who has the most incoherent worldview?
Why felt like that was so crystallized when after the Elan deal was finally announced, and Jack posts, a link to radio heads everything in its right place as like some sort of arrival point for this whole deal. And it's like, did you read the lyrics to that song? Have you ever listened to that? song before and didn't just look up, you know, a song name that has like, right? Because I would not call that the like the utopia deal of like any situation,
why Yeah, it's
like sucking on a lemon. I mean, it's like radio heads to stop it, you know, kid a record, nothing is positive, that would be referenced in that song or album but go off track.
There's like also this beautiful symmetry and just like Jack and Elon using their companies to just like, buy things that please them whether it's Elon using Tesla to buy solar city or Jack having square by title, like just like using these, like public companies as piggy banks. But, you know, as far as like, what is Jack thinking? You know, I've talked to a lot of people about this, the best theory that I've heard is basically, Jack was all about forced out of the company, right? These activist shareholders came on, they said, you're not hitting any of these targets. And so last November, he's basically told like, you, it's time for you to go, You're not even trying to do any of the things that you promised to do. And so he leaves and tells the world that oh, you know, it's my choice, I'm stepping down. And he did get to pick his successor. And so he picked Parag, who had played a big role in this blue sky project, which is, you know, trying to turn Twitter into some kind of decentralized protocol. So, at the time, it seems like Jack thought Parag was the best bet to create the Twitter of his dreams. But then a few months later, he hears that Elon is acquiring stock and is interested in the company. And of course, they've been friends for a while. And so, you know, Elon starts gathering, you know, a position in the company. And then if you look at the proxy statement, like the day after they reach a standstill agreement for Elon to stop buying shares of Twitter, Jack goes to him, and it's like, why don't you just buy it? So like, Jack, according to the regulatory filings is the person that upset the applecart and triggered this whole thing. And it's because he really wants to get this thing off the public market. And I think that's because he has all this scar tissue from the fact that he was forced out of his own company twice. And so it's like, if he can't run it, then no one can. And so it's very emotional reactions.
There does seem like this view from Jack through his tweets that like, he was the CEO, but he couldn't really do what he wanted. Because ultimately, sort of there are the there are obviously moves that you have to make if you're doing things for the public markets. And so you do those? And like, you just can't be as crazy as he would have won. I mean, yeah, that's sort of capitalism, you know, but like, is he still going to be under capitalism as a private company? Or? I don't know, I guess the question here is, how much do you let Jack off the hook for the idea that he wasn't able to do what you truly wanted to CEO because he had to be sort of a good steward of the company as a public company CEO,
right. But I mean, it's such nonsense, you know, no one had more of an opportunity that Jack Dorsey to shape the future of Twitter, you know, he co founded it. He was CEO of it twice. You know, most recently for six years, he was also chairman of the board. So for this guy to come out after all of that, and just be like, yeah, like, what about you know, Twitter never became what it should have. It's like that is literally or Well, that could not be more your fault.
Right? Right. It would be kind of like if Dean ba K were like, God, while I was running the show, we really never did what we should. crazy sounding that would sound insane,
complete. And like Jack just gets a pass even though he's you know, he was he was a halftime CEO, which was also his choice, right? Like that was that's what makes me even more calling. Why does
he get a pass? It fascinates me so much more than any other executive of any industry I've ever covered. He gets a pass every time.
Well, I mean, so Elon also gets this pass. Right? That's another thing that they have in common. But this is a big reason why the activist investors came on in 2020 To begin with, was that they were sick of it. And it was clear that Twitter was underperforming, in part because they had a terrible CEO who was barely paying attention to the company. So it did actually wind up there was a consequence for him, which was that he lost his job, but he can't stop meddling with it. You know, now, the, you know, the twist in the saga this week, is that he's apparently gonna roll his equity over into the new Elon company, you know, and that'll probably be a big position, and he may be able to actually, you know, continue to exert control on the future of Twitter.
I mean, everything you just said is in so many ways, like very vindicating of the Nick Bilton book on Twitter where he describes Jack Dorsey as basically like a scheming moron and it's what I remember when that book came out. People were like, That's so mean. Jack such a good guy like, but I don't know, like, I would say that that book is not looking so terrible. And I wonder what was it about Jack Dorsey that for that huge chunk of time, people so wanted to defend him and protect him. I kind of don't get it.
I mean, let me know when you tell Nick Bilton, who you are believe From the first time
there, look there, there is a tradition is of a founder worship and Silicon Valley. And if you go back to 2013, point 14, Jack really did look like this transformational figure who'd had two incredibly powerful ideas, right Twitter and Square. And you know, till very recently like square looks like an even more amazing company than Twitter and basically every way, right? So there's this idea that once you're lucky twice, you're good. And by that standard, how could Jack Dorsey be anything but good. But I think the past five years or so I've really taken a lot of shine off of that, because he's become so disconnected. You know, he's remotely managing these companies in between meditation retreats, it's just not he just doesn't seem to be as serious as a person as he did in like 2013 2014.
But that point of view, is why it's probably so convenient for him to have this removed from Twitter, as you know, the CEO and kind of say, why is it not achieving its full potential? What is going on here? It's like, well, you, first of all, are distant from the company physically, for a time when he decided he was going to move to Africa. But also, it's just so it's such a perfect microcosm of this era, that people are refusing to take any responsibility for their actions, and instead speaking very, you know, for like an illusory way of how they are, you know, what is the sphere of influence that they have on things and who is responsible for the larger consequences of the world? I mean, it's perfect, he is a man of our time,
this deal is still not happening, or you have a bet, Casey, I mean, the stock market is clearly not certain it's happening, but sort of the odds
seem like they went up this week, I mean, so really weird thing about this week, as last week was the week of chaos and Elon making it seem like the deal was never going to happen. This week, he got rid of the margin loan that he was going to take out against his Tesla shares suggesting he was going to light up more people to take equity in the company. So that I mean, this week, it was like a completely different Elon Musk, he stopped, you know, tweeting weird stuff about the company for the most part and started tweeting about eldering instead. So you know, if you want to have like a mosquito meter, that's like, how likely is this deer is like this week? You know, it's sort of swung over to the app, maybe it goes through side of things. Do
you think he's that he can get outside money? Yeah,
I mean, he's already lined up, you know, billions of equity, but a lot of
what's out? Yeah, some of a lot of the deal was supposed to be done.
Yeah, I think it'd be a combination of debt and equity. But like, I would like Andreessen, I think it was going to take money.
Yeah, yes, yes. And Sequoia, but they weren't that big. And
if you are an employee at Twitter right now, how do you what exactly is your commitment to this company and to whatever mission you think you are attached to right now, I just, it blows my mind, it's one thing to sort of see the circus playing out on TV or wherever, but to decide that you are part of something greater that there is still, you know, beyond just like clocking in and out and you know, pushing code, like actually feeling like there is a light here that's going to result in like the greater good of a company and maybe even the world like, what, what where is your brain at?
Well, I mean, that, you know, Twitter is is very important product, it's important every day, I mean, all the horrible things that happened this week, and how essential Twitter has been to understanding those events in real time. So I'm sure plenty of people who work at the company are just happy to continue doing that. At the same time. I also know a lot of other people are looking for other jobs right now a lot of other executives have quit in the past few weeks, we're gonna see a lot more of that in the weeks to come. You know, keep in mind probably had what three months running this company before this whole catastrophe started to unfold. So he didn't really have much time to rally the troops. And as soon as he did start talking to his troops on a regular basis, it was, you know, trying to manage their feelings around this guy with a kindergarten level understanding of content moderation, saying he was going to come in and blow up the company, right. So Parag has not been popular among the rank and file. Just a very difficult situation. So
Parag is not popular, either.
I mean, he he was it was well liked when he was named Twitter CEO. He's a known quantity there. He's been there for over a decade, people did respect him. But he has not been able to do much since he got to the company, in terms of improving it making people feel better about their jobs. He's been firing a lot
of people. Have we got any of that? Or do you know what?
You know? I mean, I think it's fairly standard, like new CEO comes in and cleans house a little bit and wants to pick their own deputies and lieutenants who are more loyal to them, right timing.
I mean, couldn't have
waited till after the deal went through to start axing favorite top operatives,
that would make sense to me. I mean, you know, he eventually came forward and said, I have to be prepared for any eventuality. And, you know, and I think the subtext there was, if this deal falls through, like, do I want to squander three or six months while I have these people who I don't really trust in these positions of high authority,
I don't know What gives me the most optimistic outcome? Like if you were to say everything, you know, Elon cleans up his act, the deal goes through? What does the ideal version of Twitter look like six to eight months from now,
I think like the best case scenario is that as Elon is confronted with the everyday realities of running Twitter, he sort of speed runs the past decade of all of us learning about why content moderation is good for business, and winds up not changing that much of the core product, right? Like when you look at what Elon wants to do with Twitter, aside from what he said about free speech, there are not a lot of big changes that he has proposed. So there's a world in which he runs the company, and it doesn't change all that much. I think that's about as good as you can hope for like, I don't think he's going to be a transformational leader. You know, Twitter was working fine for him. He's the, you know, number one user on the platform is businesses are helped tremendously by the fact that, you know, he can promote them there. So why would he change it? That might? Yeah,
as a side note, that is why it killed me that there was like a spate of Op Ed saying, like, what we're seeing here is billionaires controlling the media. And you know, Elon Musk is gonna turn Twitter into a megaphone. It's like 80 million followers. What, what more megaphone does he need? Like, how does that pass as like smart analysis?
Twitter is already a megaphone?
Yeah, do not start it in the liberal worry about Elon Musk taking over Twitter at all, like, I just don't see what he does. That's so bad. And I would love I've said this a billion times already. But I'd love for Elon to be culpable for every bad thing that happens on Twitter, like, especially if he's branding himself as like a Republican. And so you can say, Oh, this is for once, like, conservative has to actually govern something that people care about and can
be even like, goes and shoots a school full of children and posts all the photos and videos on Twitter or something like that. Maybe, maybe, who knows? Maybe
there are I don't know,
what's the like, you're saying like if he's going to loosen things up, and let's see about what they post. Right and not censor, and a bunch of crazy as shit shows up, like people being beheaded over, maybe maybe he would rethink. Hey,
you know, the redhead, the redhead CEO, you Shawn, you know, had that whole tweet storm that was very popular, which basically had the idea that ultimately, you know, people are forced to satisfy the consensus of the mob. Right? Is that how you would characterize it Casey? Or, I mean, basically, like there's just a level of public pressure that even the most like true believer conservative wouldn't be able to stomach like you're saying, Katie, and therefore they would make the same decisions. Good. Liberals are making
Yeah, I mean, people don't want to believe that there is consumer demand for content moderation. But there is I promise you, like consumers love content, moderation.
I don't, I don't want to open a social media app and see something insanely dreadful. I don't want
that and the most moderate consumers like that. They're the ones who want content moderation, because they don't want to be annoyed by the insane, extreme behavior of the fringes. That's what never made sense. Ron's view, it's the moderates who want content moderation, not the far left, or the far right. Like this is
all we all know, like, just hurtling towards a scenario where Tucker Carlson is, you know, arguably arguing vehemently towards the need to see beheading videos on Twitter, right? It's just going to be him saying, like, the big media companies tell you, you don't want to see people's heads being chopped
off. But actually, you really, actually want
to see it. My family wants to see it. And your family wants to see it, too. Yeah.
When the families of those who have been beheaded, they also want to see that again. Videos. Yeah.
Can you see? I mean, this is like, what Tom was getting at. I mean, and you touched on this earlier that, like, you think that then your mission statement that Fox was worse than Facebook? And it's I think a lot about, I mean, I don't know, like, but yet, there's so much more interest in like understanding how social media companies behave, than then yeah, like Fox or I don't know, how's your thinking on that sort of grow? Well, on this, like, in
a in a certain way, like Fox is very straightforward. Like you just have a bunch of, you know, people going on and like saying horrible things, and it's not anything other than what it pretends to be. You know, Facebook is not that it presents itself as sort of being this neutral forum for thought. There are these algorithms that read things that are extremely difficult to understand people assume the worst about them. They're collecting a lot of data about us personally, they're using it to target ads. So those are like very different things. And it's it should not surprise us that like Facebook has drawn so much more scrutiny. It's also much bigger, right? Facebook's audience is like orders of magnitude bigger than Fox News. Same time you do a study of like what actually shifts the politics in a country and it seems like it's much more Fox News than than a Facebook, you know, by itself. So, you know, like, everything multiple things can be true Facebook is is a very important subject for study I write about all the time, but I'm very leery of people that want to find very simple solutions to systemic problems. And like, over the past year, I just feel like we've seen in so many ways that our problems are so much bigger than freaking Facebook, like you could unplug that thing tomorrow. And you would still have the majority of the Republican party who's turned against democracy, like you cannot solve that problem at the level of like putting the algorithm on GitHub, but a lot of people still tweet about that as if that's the
case. And if you I mean, sorry, if you're unplugged Fox News, it does feel like I mean,
I think we should try it. Yeah, we should try it. Yeah.
Katie, and I are no comments on that.
Yeah, I just about to say I'm no commenting, because I actually, I have somebody who watches probably a lot more Fox News than you do, Eric. Well, I
watch a lot of Tucker clips. Certainly. But yeah, that's not the same. You're defending Fox News from First, from your actual point of view. Yeah, as
somebody who has to watch it all the time, who works with Fox News reporters in the newsroom at the Justice Department who sees what they report who reads their stories? I think that that blanket statement, let's try shutting down Fox News is not something that I would actually agree with. Wow. Now it's shocking to me. There's something deeply wrong with what's going on on Tucker Carlson show. Let me point you to the 20,000 words that my colleague just wrote about this very issue, where he talks about how Tucker Carlson is mainstreaming some of the most virulent and ugly white supremacist and homophobic ideas into mainstream America.
I mean, we should also say like the quote unquote, news division of a fox has done so much to mainstream ideas about you know, grooming and CRT and all of these frickin boogeyman like that is not contained to Tucker Carlson, right, the entire news division, the entire news division is oriented around finding grievance bait to feed to conservatives and poison their minds into thinking that Democrats are trying to destroy civilization.
I would, I would argue that that's first of all, not unique to only Fox. But I would also say that I think that there is a difference between what's going on in the sort of Op Ed hours, the primetime hours and what's happening during the day. The only issue I take as the Eric wants to say that the reason I don't support his blanket statement is simply because I'm too afraid to say that I agree with him, which is not true.
Okay. It's shocking to me, i i To me, too, for it to me. Fox News is clearly the worst thing in American culture at the moment, and would certainly be the first thing I would want to pull the plug on with, with little ambiguity. And I'm struggling to respond to the argument style that I just need to watch. More.
No, I'm not. I'm not saying I'm not even saying you're wrong. I'm just saying I disagree with you. But for not for the reason you're going to say
yes, want to talk about snap to close it out.
I can talk about SNAP, Eric always
wants to say that I refuse to say I hate Republicans, because I'm too afraid to what Eric doesn't understand is that most of my family is Republican. And I have a lot of friends who are Republicans, such as I will not say, out of hand hit on Republicans.
I grew up I think like, and I'm not happy that
you hate them. I think you should. I'm just saying like,
I guess my preference that you don't say something is because it's your beep makes me more comfortable with than the fact that I have a friend who's fine, just sort of with terrible people. So it is it said out of a place of trying to protect you from saying that things are gonna make
me I'm spending all Memorial Day with Republicans. I'm about to about to get into a car tomorrow and go spend my whole weekend in a house with Republicans.
I mean, Republicans can be nice to have as come
as Yeah, as someone who like commits very strongly to the fringe view that the channel that I would unplug the first to CNN that is based entirely No. That is based entirely on my having to go visit my parents all the time and seeing their obsessive watching my mom. Anyway, nauseating.
It was great talking to you. Unfortunately, I have to run to this other call. But Casey was good to see you. Enjoy. Good to see you, Katie. Bye.
Do you want to just finish up like five minutes with snap so we can end the episode in a normal place?
case your saver I don't know what your thoughts are.
Oh, I mean, I'm ready to go.
They got reamed after Evan Spiegel put out an internal note and filed with the SEC that they are likely to fall below their projections in terms of revenue next quarter, citing economic headwinds and the massive debt Don't turn and look, I don't cover this company anymore. It's been a long time. So I've talked to sources there. I have nothing new to really say about the current state of affairs. This seems like an insane overreaction. Yeah, in my mind, I mean, snap is still a growing app. Although I still don't fully understand its ad promise. And that side of the business still kind of confuses me. It makes at least 80% as much sense as any other digital media company. So this is kind of a crazy time where the market is really severely overcorrected against this company, but I don't know how long it'll take for stuff to normalize again.
Yeah, I don't know, either. I'm like, you know, I have nothing smart to say about like, why investors do this thing. And don't do that thing. You know, like reporters famously do not play the stock market. So we're, like, insulated from this. But, you know, if you thought that Snapchat was like, a valuable app, and snap was a valuable company six months ago, I don't know why you'd be applying a 40% discount to that today. You know, I guess the only argument is that, like, multiples have been so inflated for so long that it's like time for them to come back to Earth. And that, you know, maybe you're gonna sort of like overcorrect just a little bit. But yeah, I think I think snap is probably going to be just fine. For the next three or five years. Yeah,
there's nothing fundamental that changed about its business or its stickiness with users. I guess maybe my one criticism is like, its growth is a little bit eyebrow raising, not like in a suspicious way. But it's probably coming from less valuable users that maybe don't denote that they're going to be able to hugely monetize them. But again, this is like the playbook that social media companies have run for the last decade. So there's nothing new here.
Yeah, I mean, I will also say that, like, snap has been really bad at predicting its revenue for the past couple of years. Right. And I think that investors might just be saying, the hell with this, because they they've had so like, far from their guidance. So many times, now, they, you know, first they're like, App Tracking transparency, like, is isn't gonna affect us, but like that affected them, but like, then they bounce back, but like, then they issued it corrected guidance. And so it may just be that investors are saying, We have no idea what's gonna happen with this company. Yeah,
just just hold for a bit.
And you guys are much closer to it than I am. But it does. It feels like a company, you know, that never wanted to run ads, and never got comfortable with the fact that it's businesses running ads. I don't know it like, yeah, I don't know, it's always gonna be an ads business, right? Or there's no escaping this sort of ads situation that they've got themselves. And I mean,
they're they've made a big bet on E commerce, you know, like, they want to make everything shoppable within the app. And they're accordion creators, which you can monetize in ways that go beyond ads. So I think there's like, you can imagine some different businesses for them. But ads are the heart of
it, right? As I've said on the show before, and I stand by, no one wants to run ads, ads, think ads or ads, ads, make everything that you've ever liked worse. And so I had complete, you know, I related as much as I ever could to Evan, when he would believe very strongly that he didn't want to have ads on the platform. But at some point, you just have to give into the business.
Every media business in the world. Consumers are cheap, you know, Netflix is going to do ads.
Yeah, it'll be worse for it. And we're a worse world because we live in that eventuality. But yeah, I don't think they're gonna dump ads anytime soon. And I guess my final line here is just buy now is the time to buy snap. full endorsement. That's my that's my, my analyst rating.
Cool, Casey. Thanks. Thanks so much for coming on. Everybody should subscribe to platformer. Yeah. Nice. Nice to hear from you.
Yes. Thanks for having me on those done. tussling with you all. Thanks, Casey. Silicone Sally Goodbye, goodbye. Goodbye. Goodbye. Goodbye. Goodbye. Goodbye.