Full transcript: Chris Kirchhoff, formerly of the Pentagon’s Silicon Valley office, on Recode Decode

How Complete Beginners are using an ‘Untapped’ Google Network to create Passive Income ON DEMAND

Flying cars could be in our future.

“I’m from the government, I’m here to help.”

On this episode of Recode Decode, hosted by Kara Swisher, Christopher Kirchhoff, a former partner at DIUx, the Pentagon’s Silicon Valley office, talks about how the Defense Department is trying to be smarter about technology.

You can read a write-up of the interview here or listen to the whole thing in the audio player above. Below, we’ve also provided a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

Kara Swisher: I’m Kara Swisher, executive editor of Recode. You may know me as the general in charge of the Militia Etherege, but in my spare time, I talk tech, and you’re listening to Recode Decode, a podcast about tech and media’s key players, big ideas and how they’re changing the world we live in.

Today in the red chair is Chris Kirchhoff, a former partner at the Pentagon’s Silicon Valley office DIUx, which stands for Defense Innovation Unit Experimental. What a name. It funds private companies in exchange for commercial products that can solve national defense problems. He’s also a visiting technologist at Harvard University’s Institute of Politics. Chris, welcome to Recode Decode.

Chris Kirchhoff: Thank you.

When I met you, you were working for Ash Carter. Is that correct?

I was.

Explain this DIUx because I think it’s really interesting. The CIA has an innovation unit here, all kinds of government agencies do, but Ash was a real technophile.

You have to give him credit for his vision. Back in …

He’s defense secretary under President Obama.

He was, but in 2001, he was merely Professor Ash Carter at the Kennedy School of Government, and he wrote an article that said the rate at which commercial R&D is growing is quickly going to surpass what the federal government, the Defense Department, spends on R&D. And so, less than a generation from now, the Defense Department is going to have a real problem. It’s going to be out of touch unless it pivots to private R&D.

He wrote that article in 2001. Of course, fast-forward, and 2015 he becomes secretary of defense and one of his first initiatives is essentially making that pivot happen. So that’s where myself and three other partners get launched out here to Silicon Valley.

So explain how you got here, because we had Ash on the show when he was defense secretary. It was a great show. And he had some really interesting stances on a lot of things. Encryption, he parted ways with President Obama on that issue, all kinds of issues.

But what … how did you get to do that? And talk a little bit more about the background of getting it out … hadn’t been out here, which has been that defense has been very involved with tech but in a different way.

This is peculiar history where Silicon Valley and the Pentagon have been tied together in lots of ways for a very long time.

Yeah. The internet, for example.

Right. Going back to Stanford in the ’60s, actually, there is this incredible deep history out here of federal funded innovation that has really helped commercial firms flourish. But that, interestingly enough, has died out a bit. There’s definitely been a gap, particularly in the last 15 years, a gap that we were in part designed to fill.

What was your background?

Yes, I was minding my own business working as a national security aide in Washington. I was going to Security Council at the time and I had known Ash.

That’s not a small thing.


What were you doing there?

I was the director of strategic planning. So I was in charge of the office at the NSC that is supposed to look into the future and worry about what you can afford next.

Okay. How did you get the skills to acquire to do that job?

Crystal balls. No, I studied technology policy in college and then I got my PhD and then started off in Washington and national security. It turns out there’s a whole lot of technology challenges in national security. I ended up working quite extensively for all the years of the Obama administration on different tech issues.

Through that I had a chance to work for the chairman of the Joint Chiefs of Staff and worked very closely with Ash Carter before he became secretary, and as a result, when Ash thought about forming this office, he realized that he would need a combination of people to help run it, that the office has to of course know Silicon Valley, you would need to know Washington and the military. That’s an awful lot to ask of one person. So he decided to create a partnership through me and together with three other people with very different skills. I was sort of the Washington guy sent out.


This is actually a problem, because at the time I had five suits and one pair of jeans, so I had to go buy a bunch of jeans. But I moved out here a couple of years ago.

So, what was your charge? You had studied just tech policy. What were the challenges you were looking at at the National Security Council? Give examples for us.


This is intelligence on our challenges we face for the government.

The National Security Council is a fascinating place to work, first of all, but 90 percent of the folks there are worried about what’s on fire today or what’s gonna be on fire tomorrow. That of course is appropriate and necessary. So knowing that they decided to create a small office that was trying to figure out what would be on fire five years from now, that office has kept on going. In fact, the person who took my desk, believe it or not, was the one who wrote the deep state banker memo and then got fired.

Yeah, thanks for that.

So now I know my …

Was there a deep state?


Did you find one in the drawer?

I actually I got a deep state sweatshirt made.

Okay, good.

And I was wearing it out here in Silicon Valley.

Who thinks of these things? Anyway, so you were there at the NSC … and what were you doing? What were you looking at? Like, what’s going on, whatever crisis had happened at that time?

Yes, I was looking actually at a technology … Tech is throwing national security a huge curveball right now because you have all the scary things that we all know about — missiles and nuclear technology from other nations — but then you have other kinds of commercial technology coming online.

So you have really cheap microelectronics, those microelectronic power drones. People can put grenades on drones. There’s all kinds of examples of emerging technology primarily coming out of the startup world, coming from Silicon Valley, in essence. Now, there’s a huge opportunity to a lot of this technology from a national homeland security standpoint, but there’s also a huge risk.


So we looked quite a bit at that topic.

Okay, what about the Russian involvement in the elections? Was that something you all weren’t paying attention to?

You know, one of the people who was supposed to speak at my White House farewell in August of 2016, couldn’t make it because she had to go to a very important meeting, which I later find out it was on that topic.

On that topic. Right.

So there were definitely a small number of people that were working on that.

So, you were there at the NSC and then you were dragged out here, essentially.

No, it was fantastic. I threw my golden retriever in the back of the car, drove over the Potomac, threw my BlackBerry out the window and came out to the land of, you know …

You do have BlackBerrys still there? Only place that still has Blackberrys, Washington, D.C.

What was your idea to come out here? Because again, a lot of agencies have representation here in Silicon Valley and opened up offices.

They do. I mean, it’s pretty small, though, to be honest with you. So In-Q-Tel is a strategic investment firm that you referenced earlier that works for the intelligence community. Then you have a couple of other representatives running around, but the playing field is really pretty open. There’s not too many people here that ingest a lot of technology and get it working in the federal government. We wanted to come out here, actually spend money, actually buy technology, pilot it, and then if it worked, use it at scale in the department.

Right, and back in the department, DARPA is doing that too, correct?

Yes. DARPA is one of the neatest parts of the federal government. It was a privilege to …

The D … Defense, what is it?

Advanced Research Projects Agency, we have to have acronyms. We’re DIUx and they’re DARPA.

DARPA has a very unique mission, which is to do really risky moonshot-style R&D. So if they’re trying it …

Like Mach 10 planes and things like that.

Right. It probably won’t work, but if it works it’ll be amazing. So they invented little things like the internet and the Stealth and all the sensors that made precision warfare work. That’s DARPA.

DIUx had a very different mission, which is to say there are some awesome off-the-shelf technologies being produced today, whether it’s a cybersecurity software suite, whether it’s a robotic ship, whether it’s a drone, whether it’s a new kind of data from commercial satellite, and you can use that today. You don’t have to do anything further to develop it. So our office had a very distinct mission from DARPA, which is to buy technology that’s available right away.

And when you talk about buy, what was that? How much money did you have to do this?

Well, I’m proud to announce that the office has just crossed the billion dollar mark in just under two years of making investments in tech.

This is already making investments, a billion dollars in investments.

Right. This is not making investments in the Silicon Valley venture capital way of buying equity, this is actually buying technology from companies, piloting it. And then there’s a really neat superpower the office has that Congress gave the department, which said if you do a technology pilot and you buy it a certain way you can immediately — and it works — you can immediately allow anyone in the department to buy that technology and scale them.

Without having to go through …

Without having to re-compete. Which is like … this is like the Holy Grail of federal acquisition and we’re privileged to be able to use them.

Give me examples of what … you get out here and what are you … how do you introduce yourself? Again, Silicon Valley doesn’t do a lot of business. It does defense business but not as much as you might imagine.

Yeah, no. I mean, it doesn’t do business with the government really at all.

There’s always people around, the Beltway Bandits.

And for good reason. So, if you’re a startup, your business plan says there’s a thing called …

Your drone startups.

Right. There’s a $ 25 trillion dollar consumer technology market and my tech is going to sell great there. If you go to an investor and you say there’s this teeny federal market, they have to file a lot of paperwork to get into and they don’t tell you for 18 months if you’re in or not. We want to focus on that, you know you don’t get funded.


So we knew that if we came out here with the regular tools the government uses to buy technology, we’d fail. We knew we had to find a different set of tools and we did. And because of those new tools, we can get a contract in about 30 days from start to finish, rather than 18 months.

Right. So, give me an example of once … you get out here and how do you introduce yourself? And then I wanna know what you invested.

Yeah, no. “I’m from the government, I’m here to help.”

“I’m here to buy your technology.” It feels like an episode that David Duchovny should be in. But what was … you kind of look like David Duchovny … anyway, how do you approach this world? Because it’s done in a very different way here.

Yeah, we were lucky to partner with a number of folks that are of the Valley and have a network of relationships here and have run startups and then CEOs at tech companies and have been executives and know their way around far better than I do. So we were able to use them to help us navigate the rollout here. We did that by first coming up with a particular challenge that we wanted to work on, somebody in the military would bring us a hard problem and they were doing it with an actual real-life mission that they figured commercial tech might be able to help with.

Give me an example.

Okay, so maritime surveillance. Right now, it’s really expensive to take airplanes and fly them with sensors looking, for instance, for boats carrying drugs. Wouldn’t it be amazing if, instead of flying 737s with military gear on them, we could take low-cost drones put the same surveillance packages on them, either on the surface of the ocean or in the air, and perform the same mission for much lower costs?

The group that brought that particular problem to us then caused us to go and do some market research to ask the question among the folks in the venture capital community and technologists we know. “Does anybody have tech that might be relevant to this problem? If so, put us in touch.” And then we ran a competition and we had an open bidding competition that anybody could enter. We found some firms had great tech. We were able to move forward in that particular case with the tech pilot.

So they can then sell that directly to the government.

Right, and there’s some additional benefits. I mean obviously the Department of Defense market is not a small one. So, particularly for a startup, there’s real opportunity there, but we provide some additional benefits too, that has been important for startups. We have things like test ranges that are really easy to get on. So if you’re a flying car company — and we work with a couple of those — we can get you on …

Get the flying cars, but go ahead.

You’re welcome in our test ranges in a hurry. That’s a great asset the department has.

Similarly, we can get your user feedback really quick. So it was a great example of one of the technologies that we deployed to Afghanistan with some troops, they were able to get the engineers some real criticism about what wasn’t working, which caused three iterations and the tech that made it much better that allowed the company …

What was the tech?

The tech actually was an amazing communications device. It was a mouthpiece, made by a company called Sonitus, and it allowed hands-free two-way communication using a bone conduction technology.

Near your ear.

Pretty wild. It vibrates your jawbone in such a way that causes the eardrum to vibrate. So imagine you’re on a patrol in Afghanistan or jumping off an airplane or a helicopter. There’s lots of noise. You’re having to grab a walkie-talkie or grab a microphone, which is not great because — or put headphones on to hear — because you’re wanting to keep track of your area, what’s going on around you. So this technology is just a little retainer-like thing that you clip onto your teeth, it proved to be really useful to troops on patrol.

Did they buy them then?

They did, actually.

So let’s get into the procurement issue because … and then we can get to more of the things the defense department needs going forward. The procurement is they design things very specifically. We always get story after story about that, that they design a toilet in a way … when there’s a commercial toilet industry that’s fantastic. They’ve designed in a certain way, they need to have it. It creates enormous costs. It’s out-of-control costs and all these Beltway Bandits take advantage of the situation and know how to work the system. And then there’s all the people that are revolving doors and military people into military contractors, blah, blah, blah. Because they buy everything, the military buy’s everything.

I know that’s certainly true.


But that comes from a particular history, right, which is if you’re going to, if you’re going to buy a nuclear submarine you can’t exactly go on Amazon.com and find 45 vendors.

No, not today. Maybe tomorrow.

Maybe tomorrow.

But they get it there faster.

They sure would. The result of that is the government system — particularly the defense acquisition rules — are set up to deal with companies where there’s often only one vendor. So that raises the question of how do you get a fair price for the taxpayer.


And the way that you get a fair price is your list out 45 pages of specifications for the toilet seat, and you say you must meet them in a certain cost, and that’s how we know we’re getting a fair deal for the taxpayer.


That works okay for a nuclear submarine. It doesn’t work as well for gear that’s much more commercially available. That’s where the problem exists, because we don’t need a drone company selling drones on Amazon.com today that could be used in military mission to fill out 65 pages of technical specifications where their drones should be.

How did you push back within the administration … the way that defense firms set up for that? Because you’ve got all these people. How do you create that situation? What’s the impetus for doing it?

Well, we got really lucky because in our corner we had Ash Carter, Secretary Ash Carter, who really believed in this mission and said, “I want you to find a way to do this, and if anybody tells you you can’t do it, you bring it to me.”

So we did the first thing you always do in these situations. We took a lot of lawyers to lunch and we discovered a very obscure provision of law, called other transaction authorities, that actually had to do this for advanced technology.

You get to work outside the federal acquisition rules quickly, you could just sit down with companies, you get to share information. It had everything we were looking for. Shockingly, very few people in the department were using it. Why? Well, it was obscure, not too many of the contracting officers or lawyers were trained in it. But after taking enough lawyers to lunch, we found a couple that were willing to work with us and agree that this would be a perfect fit.

What you were doing.

And we, as a result, became one of the first groups to use it widely and to use that special provision I referred to earlier, which allows you to go from pilot to production contract without re-competing.

Without re-competing.

When we get back we’re talking to Chris Kirchhoff. He was a former partner at the Pentagon’s Silicon Valley office DIUx, which stands for Defense Innovation Unit Experimental, it’s been funding private companies to the tune of a billion dollars in exchange for commercial products that can solve the national defense problems. When we get back we’re going to talk more with Chris about what those problems are and what are some of the things that he got done when he was there.


We’re here with Chris Kirchhoff, a former partner at the Pentagon’s Silicon Valley office DIUx, which stands for Defense Innovation Unit Experimental. It has funded private companies in exchange for commercial products that solve national defense problems. He’s now a visiting technologist at Harvard University’s Institute of Politics.

Chris, talk a little bit about what … some of the things you were looking for when you got here. You mentioned a few, that problem in Afghanistan with an earpiece, essentially. Name some other things that you guys invested in, and how did you … how did you find … you did searches for them, all kinds of research to find them. Who did you focus on? The big companies? The Googles? Or did you go to the smaller startups in what you were looking for?

Yes, we actually started first by talking to different units in the military and asking them, “Hey, what’s your hardest problem these days? Is there something you think we could do to potentially help?”

And we went from there to doing market research and asking the question, “Is there tech somewhere out in the tech world that might be relevant?”

The big surprise, I think, is showing up in Silicon Valley you’d expect cybersecurity software, software in general, to be a huge part of your portfolio. But actually it turns out most of our deals, many more than software, has gone towards hardware, which I think reflects a huge shift in the Valley here towards hardware itself that was a real surprise.

So a couple examples of projects we’re really proud of. One actually, funny story. Eric Schmidt is the chairman of the Defense Innovation Board.

Yes, he is.

Took his band of innovators around the world.

Is he still that?

He is, yup.

Explain the Defense Innovation Board. We don’t need to explain Eric Schmidt.

Right, so the Defense Innovation Board is a group of folks from outside the department, each of whom have really deep expertise in an area of tech, and they travel together essentially as a bunch of consultants who visit different commands around the world and look at what they’re doing and then make suggestions for maybe how they could be doing things better.

And so the story here is I think representative of the kind of insights they’re able to have. They toured the air operation center in Qatar. So this is the war room, if you will, that’s prosecuting in the air war.

We have most of our forward bases are — correct? — in Qatar.


It’s in the news lately, recently.

Yes. So if you’re trying to prosecute an airstrike in Iraq, in Syria, this is the operation center that does that.

Eric noticed there are these three or four captains doodling on a giant white board and they were … they had all these numbers and symbols and he said, “Well, what on earth are you doing?” They said, “Oh, we’re planning tanker routes. It’s one of the hardest things to do is to get enough refueling tankers in the right orbit so that they can link up right with aircraft to refuel them as we’re getting ready to do airstrikes.”

Eric said, “Well, there’s a thing called software. Why are you still doing this manually?” And they said, “Oh, well we actually have software that does it but it’s awful, it doesn’t really work. So the three of us just take 60 man hours every day to do this. And it’s a real pain because if one thing changes that we’ve got to go do it all over again.”

The math. It’s like they’re in “Hidden Figures.”

Right. So Eric shook his head and said …

Recalculate those Moon trajectories.

And then he turned to DIUx and said, “All right, you guys fix this.” So we did. We sent some of our Air Force guys forward with iMacs. They set up shop. They actually knew how to code. In less than really three months they built a prototype app that allowed the same programming to occur automatically in seconds.

Who had built their first one?

A defense contractor had built their first one and there was a refresh scheduled and we met them, they said, “Don’t worry. The refresh is being worked on now. The initial version should come in 2020, 2021.” We were of course astonished at the length it time …

Timing, and of course we are.

Well … we were proud anyway to send a very small number of folks forward, and in just under $ 2 million.

The fact that they messed up Obamacare just makes … I had an argument about Obamacare with someone and they were like, I said, “Well, you know Tinder makes all these matches, it’s all matching, it was all you had to do was matching, Tinder makes all these matches every day, millions and millions of matches.” And they said, “Are you comparing Obamacare to Tinder?” And I said, “No, Tinder works.”

At the time it was funny, but it was … the expenses were enormously different between what government was charged in terms of software and what you could get almost off the shelf. There’s no shelf to get it off anymore, in fact. You know what I mean? It was a shocking inability to just use software on the fly.

But this is a great way that Eric and the innovation wars were able to contribute, but they know other ways of doing things.


And the process can not only make the U.S. military more effective, but save millions even billions of taxpayer money.

What I find shocking is that they haven’t updated this. That’s the part I don’t get, when businesses have … when consumers have … But, anyway that’s another rant I can make later.

So can you … you had the defense, the board, that Eric was on. Right?


And then what you did was you would go around and do this all around the world?

Right. We work closely with the Innovation Board. Ash Carter also founded, there’s something called the Defense Digital Service, which is a bunch of programmers that work on IT issues.

Special ones, and every agency had those. They were moving those into every agency.

Well, that was the ambition at the end of the Obama administration, but as we know, science and technology in the current administration is a bit more challenged.

They aren’t there. It’s okay, you can say it, there’s nobody working there. But that was the goal is to put people in each agency to redo their IT.

And that actually brings up one of the bigger lessons that I’ve always taken away from my time both in government and out here, which is there is such extraordinary talent out here and there is no way we are going to get them to apply for a civil service job.


Right, and so we need to find some kind of way to get folks out here that are ready to take a year or two of public service and kind of like the Peace Corps, send them in.

Yeah, that’s what they’re trying to do. I was just with Chris Madell in Washington.

But let’s get back to the things you guys did. What else did … A billion dollars is a lot of money. That’s a pretty fair-sized VC fund, for example. What other things did you do?

Yeah, so we did a couple projects with flying cars, which I think really will be …

Explain that please.

The future of, yeah, military transportation. So right now we use helicopters to get around the world. An aircraft investigator once described to me, a helicopter is a million parts flying closely in formation.

That sounds great.

Wouldn’t it be great to move to an electric-powered vehicle with the same range that has one moving part, is silent. So we’re experimenting with different ways to deliver those troops …

Explain flying car. How do you conceive of it? Because I know Larry Page is working, a lot of people are working on flying cars. What does that mean?

Yes, I think there’s … personal air vehicles are of course, as people around here say, an industry of the future, that’s certainly true. So our question …

VL … vertical lift and take off.

Our question is how can we use this prototype technology to do military missions better? And it turns out there’s enormous opportunity both for delivering troops and special forces into denied areas. There’s also great possibilities for resupply, all of which right now are being carried out through much …

Through helicopters.


Right. Explain how it flies, if you’re talking about a flying car, how it’s different than a helicopter.

Yeah. Well, it’s a large drone, essentially, and because it’s electrically operated you have far fewer number of parts than you do in internal combustion engines, so your rate of engine failure is much lower. It’s fully autonomous. The range, actually, is pretty impressive on certain companies’ prototypes.

So what you have is actually something that’s very close to being operational, something that we can almost …

Just like a Tesla of the sky.


And does it look like a helicopter? Does it look like a …

It looks like something out of a “Batman” movie.

Right. Which one? I mean, it has four copter … they have a propeller, correct?

Yeah, there’s a few different designs. But yeah, they all look like a cross between something out of a “Batman” movie and “The Jetsons.”

Okay, and so you would fly those … fly these cars — and they’re not hovercrafts because that’s a whole different area of … people aren’t looking at that?

They can hover, right, which is useful for resupply. But yeah, they can do all kinds of things. So, it was our mission to ask the question if, gosh, you could potentially use these. And how ought we be planning to use this future technology?

Well, everyone put up their hand for that one, right? Like regular people want a flying car. Or everybody wants a flying car, presumably.

That’s true, but it’s much more likely that the military will start experimenting with them first.

Right. First. So, they would do them in missions, in resupply, in night missions, anywhere a helicopter goes, correct? Right now.


Right. Then it would not have to do a lot of maintenance and difficulty.

And you can do things, too, like to segregate a squad. Right now, we’ve put a lot of people typically in one or two helicopters. That’s not great for all kinds of obvious reasons, so wouldn’t it be nice to have 10 or 12 aerial vehicles carrying the same number of people that will not be nearly as vulnerable.

And easier to move, less dangerous to crash and things like that. All right. So how much money do you put into it that, and who’s making those?

Well, the same companies that you probably know about are making them, and this is again an example where the Department of Defense can actually play a role helping these companies on their commercial path.

It’s where they want them, right.

First of all, we have a small amount of money to spend and many of these companies are so capitalized … our money is peanuts, but we also have test ranges that they can go tomorrow and fly on.

Explain these test ranges. They have places where? In secret installations? Or where?

There are secret test ranges. Most of them are not, and a couple of them are actually very close to the Bay Area. So DIUx has set up a couple test ranges, one for flying cars, another actually for drones and anti-drone technology. Which is another real issue on the battlefield.


How can we stop a missle or other foreign adversaries from using drones to disrupt …

Right. Grenades, or look at us. They can do almost anything, correct? Poison or dispersing … and we could use the same, presumably. I’m sure we have.


Yeah. So drones is another one. What other things did you find?

A lot of …

By the way, it was in a “Homeland” episode, they had a drone and then, all right, shot it down.

If only it all worked like “Homeland” or the movies.

Where Carrie saves everything.

I made some great investments in cybersecurity and cloud software, and some undersea and sea-surface technology.

Okay, explain the undersea.

Well, it turns out one of our great advantages militarily is our undersea technology. But at the same time there’s been a lot of progress made on the commercial front. Different kinds of submersibles and robots that can operate in new ways. So that’s another great example of startups out here that have developed a technology that is for a different purpose altogether, but actually it’s quite relevant for military missions.

So this is submersibles to spy … that’s what submersibles are for? Presumably.

You can do that. You can conduct ocean surveillance. You can monitor temperature conditions, which are really important for other Navy missions. There’s a whole bunch of things you can do. Again, these are … DIUx is after broad classes of technology that can be transformational in many ways.

Beyond the submarine.


Then give me one other. Outfits. Clothes. Exoskeletons.

Outfits. Yeah, sure. So we’re … right. Wearables, it turns out, is another great place that there’s a heck of a lot of innovation going on right now on the commercial market.

Imagine you’re on an infantry squad and you have a mission that involves getting miles away in tough conditions. Dehydration is actually one of your biggest enemies. Imagine having a wearable sensor that would allow the squad leader to know when one of his or her soldiers was in danger of dehydration. Little things like that can make an enormous difference.

That’s a great idea, yeah. And what about exoskeletons and things like that? Were you involved in those?

We have not done any exoskeletons, but that again is another great example …

Carrying and lifting.


They’re using them in factory lines now.

They certainly are. Which is a whole nother area of potential innovation, of what technology are we using in modern factories that could also be used in defense factories.

Right. Right. That are being used. Do you find the defense people very open to all this, what you are bringing to them? Or did they think there’s this weird group of guys out in Silicon Valley …

Yeah, it was, to be honest, pretty mixed. The Defense Department is …


Big. Really big, actually, and also very tradition bound for good reason, because it turns out that mistakes in war are costly and you remember them.

So we really did have, I think, a challenge to prove to people that commercial tech could actually be durable enough and good enough to perform — and in cases even outperform existing military technology.

Right. Then when you … what would you say your most successful thing is? When we get back we’re going to talk about what the big challenges are going forward. But what would you think your most successful investment in your tenure was?

To be honest, I think it’s just showing that it can be done.

Right. You can have an innovative, nimble group.

Right, so taking six Air Force programmers and a couple iMacs and for under $ 2 million in literally eight weeks coming up with an app that revolutionized how the air war is fought. That caused a lot of folks across the Air Force to notice and ask the question, “Well gosh, I have this problem too. Could you send some of your guys my way?” Strangely enough, cultural change, I think, is going to be our biggest lever, if you will.

Right. And now what happened in the Trump … do they even know you’re there? Did they know you were there? What was the … what happened after Mattis, I guess?

Yes. Secretary Mattis was very kind with his time. He comes from a background of playing an incredibly transformational role in the Marine Corps so he gets transformation, and he came out last summer and spent a day and a half here in Silicon Valley. I think he’s very enthusiastic about our mission. Sees the logic, sees fit and wants to grow.

And continues to support it.


Continues to … how many partners are here now?

So, we are a couple … Those that started have just moved on and we’re in the process of putting a new leadership team in place.

And that will be the same amount of people doing these investments?

Roughly, and in the office we started with 12 and we’re now almost up to 70 or 75.

You’re located where? In your usual …

Yeah, headquarters is down in Mountain View on Moffett Field. We have a office in Boston, teeny office in Austin, Texas, then a small office also in the Pentagon.

Great. We’re here with Chris Kirchhoff, who just left the Defense Department or I guess Innovation Lab almost, in Silicon Valley, DIUx, which stands for Defense Innovation Unit Experimental. Who came up with that, Chris? Anyway, when we get back, we’re going to talk about where things are going in defense and what will be happening in the near and far future.


We’re here with Christopher Kirchhoff. He’s a former partner at the Pentagon Silicon Valley Defense Office, DIUx, which stands for Defense Innovation Unit Experimental. How did you come up with that awful name? I like DIUx but the rest …

I know. Well, first of all, we had to have an acronym because if we didn’t have an acronym they would not start the office.


We figured X was kind of cool, but I definitely wouldn’t turn to the Pentagon for some really …

Yeah, how about Wakanda? So now you’re a visiting — I’m gonna get to Wakanda — visiting technologist at Harvard University’s Institute of Politics. So let’s talk about where the challenges are that we face from a defense point of view going forward. I assume you look at, obviously — I’m joking about Wakanda, but I’m not — this idea of how we think about innovation, how we incorporate it into our defenses.

This doesn’t seem to be an administration that’s super interested in science and technology. That science and technology office is not staffed. It hasn’t been staffed. It was a new thing with President Obama, but the Office of Science and Technology has always been there for half a dozen administrations, I think. And it doesn’t … I don’t think it has a head yet, does it? It doesn’t. No, it does not. Which is like frightening in a lot of ways. So can you talk about what our challenges are now in the near term without science advisers at the White House?

Yes. I was really impressed …

I’m assuming the different agencies still are interested in science, some of them.

Yes. No, that’s certainly true. So the United States is in this peculiar predicament right. We’re 4 to 4.4 percent of the world’s population. We still command a quarter of global GDP. It’s why we have nice houses, nice big screen televisions, all that.

Our challenge going forward is our economic competitiveness. How on earth can we keep generating so much of the global economy with so few people? And if we’re going to be successful at this we’re going to have to make sure the leading part of our economy, the part of our economy that’s most dynamic, that tech sector really succeeds. The tech sector at the moment, if you haven’t noticed, is producing crazy, wild, disruptive technology and that technology will not be successful without the government clearing the road for it.

100 percent.

So what I worry about most now is whether that road can get cleared. Whether there are enough people out here in the tech sector talking to people in Washington about what needs to be done.

Which they’re not. Right. So talk about the areas. I mean, I’m assuming AI, robotics, automation, infrastructure, self-driving, all kinds of things like that.


Or is there more? I mean, cybersecurity.

No, it’s all these things and …

Non-hackable elections.

Wouldn’t that be nice? These things are all important, and one of the greatest challenges is just with people, because the people that tend to know the most about these technologies are not employed in Washington. They’re employed far away. That creates a challenge to begin with. How on earth do we get the people that know the most about the technology talking to the people that are in charge of writing regulations?

So let’s start with that. There was a big push by the Obama administration to get techies to come for short amounts of time and they fixed Obamacare, they fixed a lot of things, they moved in and fixed things. Now they’re really having a hard time recruiting anybody, correct?

They are, and that’s something I worry about a lot. We did this big review in the White House that looked across radical merchant technology.

This is Obama’s …

Right, and where would … It just completely turned upside down the mission of certain federal agencies and departments. The Department of Treasury, for instance, it regulates money.


Something kind of important, and it also turns out is the biggest bank for the government. It clears a lot of payments for federal agencies. So blockchain is going to be something that completely changes the Department of Treasury’s mission. So we asked the question, “Well, how many people are there today in the Department of Treasury that have enough expertise to participate in a peer conversation about blockchain?”

I would say zero, probably.

That was the answer, actually, and it’s not a surprise because the Department of Treasury doesn’t have a DARPA. They haven’t been recruiting for PhD cryptographers. But, it turns out they need to.


And desperately.

Well, they’ve got a Goldman Sachs banker running it who has a kind of unusual manner — I think we can be kind, that’s a kind way of putting it — who doesn’t seem interested in that. Correct? I mean that’s … is that where it comes from, the top in the Department of Treasury?

I think on the tech issues it has to come from the top because if you’re going to get people in the department you’re not through the usual means, right? Get them involved in the top of the policy conversations. You’re going to have to be the one that opens that door.

Right. And these are the departments, presumably, involved with regulating the blockchain. Which they won’t be able to regulate at some point because it’s unregulatable on some level of its being created by not them, or being monitored by not the government.

And you can just imagine if you were to walk across to each building in Washington and ask people there, “What do you do and how is it likely to change in the next five years based on what’s being invented in a garage somewhere?” Boy, there are some real challenges that we’re going to face going forward.

So Treasury, blockchain and what else? Let’s go through them. Blockchain …

I think blockchain and other technologies are …

And then cryptocurrency.

Right. That, of course, impacts the intelligence community’s mission. It also impacts, believe it or not, the development mission. Blockchain is going to revolutionize how a lot of development takes place, whether it’s land titles or new financial technologies to the developing world.

Similarly, the Department of State, there’s this thing called digital now that turns out it changes how we communicate. Almost every department or agency across the government is facing some real curveballs, and the curveballs are coming fast and most of them are not equipped with the kind of people or the kind offices …

Explain what challenge the Department of State faces.

Well, the Department of Defense is lucky because it does have places like DARPA that are part of it. That attracts top commercial talent, that are the best of what they do, and they can …

These are big challenges.

Right, they can look around the corner and say, “Hey boss, there’s this thing that you ought to know about called stealth technology.” Unfortunately, the Defense Department is one of a few parts of the government that has an advanced technology shop like that. And that’s because 30 years ago nobody thought advanced technology was relevant to, say, diplomacy, but it certainly is today. So I think we face a real transformational challenge of how do we re-engineer the State Department to have in it some technologists that can think about how diplomacy might be different going forward?

So how would you … what would they need? What are the issues they need to focus on?

Right. So a lot of the State Department’s mission is reporting and communicating. That, of course, has completely changed. But a lot of the State Department’s mission also is American values. It turns out, our values are actually bound up quite a bit in our technology, and our technology is the kind of mobile phone operating systems that we create and the kind of internet we advocate for.

These are all deeply technological areas, and again ask the question, how many of your scientists are there today working at State?


The answer is small.

Small. And that’s everything … I mean, they operate around the world, has to have some technological element.

There’s this funny story. I think there’s something like 140 foreign governments that have a presence here in Silicon Valley. Until last year, the State Department didn’t have anybody here.

Who do they have here?

They had one person who I think got fired.

Oh, okay.

Or sent along, when the administration changed.

Right. Okay. That’s not good. Another department, name another one. Education. Oh, good God.

Yes, so education is not something I personally looked at, but I mean, there again … Look, ed tech, the revolution going on at ed tech. Does the Department of Education have a DARPA-like appendage that is imagining what the future of ed tech is?


And how that will affect American education policy?

Right. So through every single department, and our government, they have to be thinking about … what about this idea that they were gonna … I mean, I know that Chris Liddell and Jared Kushner were pushing the Office of American Innovation. Pretty much everybody quit it. I think a lot of people that were on these different business councils have left over, I think it was Charlottesville.

How do you get Silicon Valley reengaged then with the government, or this government at least? You have a president who seems entirely uninterested in science and technology and in fact is hostile to it.

These are … the past months have not been kind to those who care deeply about this topic. But I think it’s just crucial to step back and notice that, as a nation, this is our future. This is the one thing we cannot afford to get wrong.

So why are we affording and getting it wrong?

I think a lot of people in Silicon Valley are still sort of pretending that what happens in Washington doesn’t really matter to them. And I think a lot of people in Washington just don’t have easy ways to get the knowledge they know they need.

How do they get … because it really is, you gotta convince people, tech people, to come there. These people have jobs everywhere and are easily available to them here and across the world, really. How do you entice them to come to government?

I’ll give you one great example we found. In the U.S. they have something called the Global Development Lab that’s all about technology innovation and global development.

This is where?



It was run, actually, by a former Apple employee named Ann-mae Chun, and she, within that lab, had the operational innovation team that was the team design to get to “yes.” So it had people from the legal department, from the HR department, from the contracting department, and whatever problem was brought to that team, “Hey, how do we get this Silicon Valley executive in for a year? How can we do this contract faster?” They were given the charge of coming up with a way to do it.

So they actually hired a tech recruiter. Imagine that, the government hiring somebody who is an expert in recruiting technologists with skills.

I can’t believe we’re saying, “Imagine that.” It’s like 2018 at this point.

Right. I mean, you would think, right? But it turns out that the bulk of the government, of course, is governed by the Civil Service Act, whose history goes back to the age of the telegraph, it was designed originally to staff the Post Office. Great at providing general administration, not so great at bringing in tech skills for term tours.

Yet, despite that, every department agency generally has a couple hiring authorities in the books, that if leadership says, “Hey, go do this,” you can get people in.

So what do you imagine … because I see other governments moving very heavily into technology within the government sector. And I’m sure they’re not ever as perfect as any of them. They’re all large bureaucracies so you’re going to fall prey to that. What are the biggest issues that our country faces, do you think?

I think one of the … again, going back to the importance of people, you can sit around a table in Washington and not even know that technology is in the middle of the issue you’re trying to solve if you don’t have somebody around the table that can see it.

So if you don’t have a tech team … I mean, if you have a lawyer in the room and an economist in the room, everybody in Washington has got their lawyer and their economist. But if you don’t have your technologist, you don’t even know what you’re missing. So I think that’s the first and probably the most fundamental part of the solution.

And then of the issues, what do you think the most critical thing is that we have to focus in on?

I think we’re at a moment where technology is probably a part of almost every major issue in one way or another.


I think you can’t any longer say, “Oh well, here are the four issues that technology is a part of and the 12 that aren’t,” and then divide your staff that way. And that’s part of the challenge. This is different than it was even 10 years ago.

So you have to have a technologist at every juncture of governing.

It’s totally ordinary to have a lawyer and an economist on your staff, in fact they have career paths that are set up to support that.

Right, but not for technologists. All right, so what are you doing at Harvard? I want to finish up. What are you studying?

I’m having a ton of fun 20 years after I was a freshman. I got involved in public policy. There’s a little corner of Harvard called the Institute of Politics, it’s a living memorial to JFK. I’m teaching a seminar on the topic of “Public Leadership in a Technological Age.” So whether you’re a computer science undergraduate or somebody studying government — or classics, for that matter — what ought you know about technology, about how it’s produced, about how it’s governed. You can be a future leader on this issue and get ready to join the conversation after you graduate.

And what is your one main thing you tell them? That you have to …

Yeah. Right. Ask not what you … no. So, we get together and we host a bunch of speakers from tech, also from tech policy in Washington. We’re looking for ways to get internships through so they can actually go experience what tech is. And what we tell them is that there definitely is a role, whatever educational track you’re on, to be able to learn more. Whether you’re a computer scientist that … Harvard just debuted an ethics and computer science course this semester. Something that turns out was kind of relevant.

Yes, very.

But if you look at the curriculum on the whole, it’s certainly not built with the idea in mind that we’re in the business of producing leaders that have to be able to grapple with technology policy.

Absolutely. All right, Chris, this has been really interesting. If you … if I had to worry about one thing — I really do like the idea of a flying car — but if I had to worry about one thing and I know you’re not, you don’t want to pick one. What is the thing that you think that government needs to focus most strongly on in the tech area?

Sure. Well, I had a chance to work on Ebola, on the White House Ebola task force.

That’s not coming back, is it?

Well, the thing is we’re kind of changing the world in the wrong way, right? So we’re deforesting, we’re … roads and air travel everywhere and when we deforest, we create these things that scientists call ecosystems where species clump together that normally don’t and it turns out that’s basically creating the world into a giant petri dish for emerging infectious disease.

So I actually worry the most, to be honest, about pandemics, I’m kind of in the Bill Gates camp on that one, when it comes to security.

I’m with you on pandemics, you know I’m obsessed with pandemics.

Do you have any Purell in the office? We should probably …

I have a lot.


I’m a pandemic obsesser.

Thank you so much, this has been very depressing. But we do need technologists in government and this administration really needs to focus on it, but I’m not … I have to say, I’m not very hopeful about that at this point. But we can always hope things can change.

Anyway, this had been Chris Kirchhoff. He’s a former partner at the Pentagon’s Silicon Valley office DIUx, which stands for Defense Innovation Unit Experimental, which is still operating here. It funds private companies in exchange for commercial products that can solve national defense problems. Thank you, Chris, for coming.

Thanks for having me.

Recode – All

Cash For Apps: Make money with android app

Full transcript: Former White House communications director Anthony Scaramucci on Recode Decode

How Complete Beginners are using an ‘Untapped’ Google Network to create Passive Income ON DEMAND

“[Trump] tried to fix or drain the swamp using cesspool operators and swamp creatures.”

On this episode of Recode Decode, hosted by Kara Swisher, former White House communications director Anthony Scaramucci “The Mooch” talks about his infamous 11-day stint in the Trump administration, his recently announced book deal and why he thinks the president will win reelection in 2020.

You can read a write-up of the interview here or listen to the whole thing in the audio player above. Below, we’ve also provided a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

Kara Swisher: Hi, I’m Kara Swisher, executive editor of Recode. I have been at my job for, I don’t know, a thousand mooches, but in my spare time I talk tech, and you’re listening to Recode Decode from the Vox Media podcast network.

Today I’m in New York City with Anthony Scaramucci, also known as The Mooch. He’s the founder of Sky Bridge Capital, and before that worked at Goldman Sachs, and started a different financial firm, Oscar Capital Management. But to most of my listeners he’s known for the 10, I guess long days he spent in the Trump White House last year. Anthony, welcome to the Recode Decode podcast. Did you ever think you’d be here?

Anthony Scaramucci: No, I never thought I’d be here, given the fact that you bombed me on Twitter.

Trolled you, it’s called.

Trolling, bombings one. I actually personally like you.

Did you like the trolling? I thought it was rather clever.

It doesn’t bother me at all.

It wasn’t mean, it was funny.

It actually doesn’t bother me at all. I think I’ve learned after my firing and my rolling in broken glass in American media that I actually have a strong conscience.


I can take just about anything.

Yeah, the media seems to like you quite a bit, Anthony.

You think?

I do.

I think it’s a love-hate relationship.

No, I don’t think they hate you. I think they’re amused by you, for sure, but they’re definitely going to give it to you, but you give it back so it’s just fine.

Yeah, it’s good. It’s all good. It’s healthy.

Let’s start. Explain who you are, Anthony Scaramucci.

I want to address the media at one point, too, because I think it’s very important for the United States. So who am I? That’s a good question.


Hopefully I’ll figure that out before I die. Well, I grew up in a middle-class family. My parents didn’t go to college.

In New York?

In New York, out on Long Island.


I grew up in a town called Port Washington.

I grew up in Roslyn Harbor, Anthony.

Okay. Do you remember McCormick Sand and Stone?

No, I do not.

Do you remember Gothic Sand and Stone?

Not really.

Okay, so you know where the clock tower is in Roslyn?

Sure, right.

And so if you head north out of Roslyn into the peninsula of Port Washington on West Shore Road there was a very large sand embankment there. Maybe you remember that growing up as a kid. So our area, Roslyn Harbor, Port Washington had the largest granular sand deposit in North America. And so all of Long Island is a glacial deposit. When the glacier receded back to the North Pole it left Long Island, Block Island, Nantucket, Martha’s Vineyard, the elbow of Cape Cod, and there you go. And so right there in the peninsula of Port Washington it took 95 years for Italian, Welsh and Irish immigrants to mine out that sand. And so my family originally started in Wooksbury, Pennsylvania.

Oh my gosh, my family is from Scranton.

Yeah, so there you go. Plains PX.

Actually, my family owns a coal mining company. Anyway, go ahead. Strip mining.

Okay, so my grandfather actually wasn’t a miner but he had a store in that town in Plains, Pennsylvania. And so he told my father and his two older brothers to leave the town. He didn’t want them going into the mines. And so they responded to classified advertising to go mine sand on Long Island. So they landed in the town of Port Washington and my dad started with a payloader. He worked a conveyor belt. They used to measure barges, this is probably giving you too much more than you want.

No, I like it. It’s fascinating.

The sand would be put on a barge by Bar Beach opposite the harbor. It would be tugboated through the Throgs Neck over to Long Island City. It would be mixed with the concrete. And so what people don’t realize is that the gateway for the skyscrapers here was the Queensboro Bridge, the 59th Street Bridge. It was erected in 1909. And so you took the sand from Long Island, mixed it in the concrete, and you had those big cylinder trucks ride over the Queensboro Bridge to build these buildings. So 65 percent of the concrete here came from my hometown from 1905 to 2000.

And your dad dug it?

My dad spent 42 years in that company.


He worked for the same company for 42 years. Started with his hands, never went to college. He had an unbelievable work ethic. I can still see and remember my mom preparing his lunch pail.

What did your mom do?

My mom was a homemaker.


And so this is very important to understand, because that family that I came from was an aspirational working-class family. We lived in a working-class area of the town. Port Washington is quite affluent.

It is.

Thank God for that because it was a very good public school system, but there are certain enclaves inside of Port Washington in the 1970s that had blue-collar people in them. And frankly, blue-collar people could afford to live there because they were very high wages post World War II. As we were continuing our industrialization, these other nations were vanquished, there was a shortage of labor. And so my dad had what I would call a light-blue-collar wage for a blue-collar job. Meaning he wasn’t a white-collar person, but we had Sears Toughskins, we were taking air conditioners in and out of our house, we shared one bathroom, five of us, but it was a great way to grow up. And I was a product of a very good public school system.

In Port Washington?

In Port Washington. So I’m not one of these — even though I’m a Republican — I’m not one of these conservatives that are for no government, or too small of a government. I believe that you have to have an energetic government to help create a level playing field or at least as level a playing field as you can get.

At least an education to start with.

No question. And so you need … You know, the Republicans are going to have to wake up and recognize that they’re not going to fix the uneven educational problem in the United States through charter schools or school choice and things like that. There are elements of the process of fixing it, but you have to have broad-scale public education reform.

We’ll talk about this later, changing how we’re teaching.

You have to have broad-scale public education reform and it has to come through the public schools and it has to come from union accountability. It’s not going to come from, “I’ve got a charter school and that’s how we’re going to do this.” I mean, they are great and they should be supported, and I do support them financially, but this is not the single element.

So here I am in this blue-collar enclave, in a very nice community 22 miles from Manhattan, and I go to Schreiber High School. You may remember that from Roslyn Harbor. I go to Tufts University, and from Tufts I go to Harvard Law School, and getting myself educated. And then it dawns on me that I’m going to do better in the world of finance and investing then I would necessarily practicing law, so I go to Goldman, I spend seven years there.

Are you a good banker, Anthony?

No, I sucked. Terrible at being a banker.

What were you in?

So I started in investment banking. My job at Goldman started on August 14, 1989. I was fired from Goldman Sachs on February 1st, 1990. So I sucked at it.

Yeah, what did you suck at? What was your suckage?

I suck at being an investment banker and an investment bank associate. I couldn’t do the spreadsheet math and the macro algorithms that you need to do to run the process. And I was bored to tears by it. And Goldman is a pretty swift place at recognizing when somebody sucks. And so it took them 18 short months, they fired me.

And this is a learning lesson for younger people listening to your podcast: Don’t burn any bridges. And so I stayed tight with the guy that fired me and I came back on Monday. I was fired on Friday, February 1st, I was back Monday pumping quarters … I got a roll of quarters because there were no cellphones back then. I was pumping quarters into pay phones here in midtown Manhattan and one of my buddy’s said, “Hey, there’s a job opening at Goldman Sachs.” So I laughed. I said, “Where is it?” “It’s in the investment area.” And so I called my old boss who had just fired me. I said, “Hey, there’s a job opening on the 28th floor,” I had gotten fired from the 17th floor. I said, “Could you put a good word in for me?”

He said, “You know what, I would. You’re an honest guy, you work hard, you just sucked at this job.” And so I went upstairs, I interviewed for the other job and got rehired into Goldman Sachs.

On Monday?

No, it took about six weeks. And so I was fired.

So what did you move to?

I was fired on February 1st and I got rehired on March 28th. So I moved into the equities area, the stock market area, and that was great. I thrived in that area.

Couldn’t you have just moved, Anthony?

I should have taken that job. The funny part about this is there was a guy named Bill Groover. He’s now a professor at Bucknell University. He’s in his early 70s. He told me when I was coming out of law school to go into the equities area. That I was well suited for it. I told him, “No, I want to be an investment banker.” And he said, “Yeah, you’re a jerkoff. You want to be an investment banker because you think it’s cooler than being in the equities area.” And I had to admit that was true.

Yeah, of course.

I thought that was the cooler job. So learning lesson No. 1: Don’t take the cooler job.


Don’t try to impress your friends. Take the job that you’re well suited for and take the job that you think you could do a better job at. So I had to get that lesson the hard way, I got fired. So you know, John Kelly wasn’t the first person to fire me.

Oh, I’ve been fired.

Yeah. You’ve been fired a couple times?

Several times. My first journalism job.

It’s not bad to be fired. It’s harder to fire people. I’ve counted 20 people that I have had to personally fire and I’ve been fired twice. And I can tell you, it’s like when your parents said to you — I mean, we can’t hit our kids anymore but when kids were getting hit, and I used to get hit by my dad. He would always say, “This is hurting me more than it’s hurting you,” as he would hit me with the belt.

Getting fired is probably less painful then firing somebody, at least for me. I don’t like the process of firing somebody because you know you’re creating anxiety in another human being and I don’t really like doing that. I like creating security in human beings, not anxiety.

Well, we’re going yeah to get to that. Wait, you got fired twice, so Goldman Sachs and the White House, right?


You go on to do what? You leave Goldman Sachs.

So now I’m at Mac Goldman. I’m in the equities area, raging bull market in the ’90s. My partner and I are running a private wealth team and we extract that private wealth team from Goldman. We form a company that has a hedge fund and a registered investment advisory where we’re managing money for wealthy people. We make a ton of mistakes but the rising tide of the bull market is really wiping out a lot of our mistakes.

And so we go on to great success and in five short years we sell our registered investment advisor in Neuberger Berman, which was a New York-based, at that time, publicly traded asset manager. So my partner at the time, Andy Bosar, at that time is probably in his early 60s now. Great guy, great mentor of mine, and so we run that business over there for a while. He then goes on to retire, lives up in Nantucket now. And I’m at Neuberger. Neuberger then gets purchased by the Lehman Brothers. This was October of ’03.

I’m at Lehman building a relation with Dick Fuld and some of the senior people there. I go to them in ’05 and say, “I’d like to leave and start something that I’m going to call Sky Bridge Capital.” I explain to them what it is, Dick is great to me. He offers me $ 10 million of balance sheet capital to go into my fund. I then go to Merrill Lynch who sold my business. They were the merger banker for the original sale.


They gave me $ 10 million. Michael Dell’s family office — I had known Michael from my days back at Goldman — and some of his guys, they also come in. And so my original investors are the Dell family office, Lehman Brothers and Merrill. I put my own personal dough in and we start Sky Bridge in this building that we’re speaking from on the sixth floor in a hedge fund hotel, literally in a very small room. There was a small table, there’s four computers and a couple of telephones, and that’s how we get Sky Bridge started.

So why did you want to go off on your own? I’m very interested in entrepreneurs and why they do what they do.

I think that people experience something, and I tell my children this, I have five children. You experience something from the age of 11 to 17 that drives your passion and love for your vocation. Your vocation finds you from age 11 to 17. I don’t know what it is, it could be medicine, it could be journalism, it could be something.

For me, my dad had his hours reduced and there was some financial anxiety in the house as a result of that. Because you know the overtime hours are more valuable to somebody that works by the hour because it’s time and a half or double, depending on the time. And so I went out and got myself a paper route. I was 11, 12 years old. I was hustling papers around my neighborhood and I was giving almost all the money to my folks to supplement the budget.

So financial anxiety?

Financial anxiety. And so what I learned about myself is that I could start up, I could create something out of nothing. I had a paper route, I was stocking shelves at Key Food, I worked in my uncle’s motorcycle shop, and I said to myself, “You know what, I’m going to have my own business someday. I’m going to be my own man someday.”

I went to law school for some of the silliest reasons on earth. I read an article in Time magazine about Kervaswain and Moore, a WASP law firm that I probably could have never got in there. And they were paying their law school associates at that time $ 65,000 a year. My dad was making like 33 grand. I was like, “Oh my God, this is like double my dad’s. I’m going to law school, I’m going to be totally set financially for life.” And when I got to law school I realize it didn’t fit me.

Yeah, you don’t fit a lawyer.

So I deplugged or unplugged from law school, got my job at Goldman, got fired from Goldman, got rehired into Goldman, and then I started my first business at the age of 32. And you know, when I was at Lehman it was fine, but I always had the bug to start another business.

You don’t strike me as a very good employee.

I’m unemployable, actually. I’m not a good employee because people take me the wrong way. I’m actually a great team player. I was captain of my high school football team. I know how to run a process, I know how to be a team player, believe it or not. Even though I’ve got a strong personality I subordinate my ego to very talented people. So I don’t run the money at Sky Bridge. I got grown guys running the money and my ego is healthy enough where I don’t need to insert myself into that process.

So Sky Bridge is the newest that you started with that early money.

It’s 13 years old. I started Sky Bridge …

How much do you have under investment?

There’s 10.9 billion under management here. It’s the 20th largest funds to funds in the world.

What do you do then if you have all of these guys running it?

What do I do is a really good question. So I’ve got a limited skill set. Here’s my self-evaluative skill set. I know how to evaluate talent. Okay, so if you ask me about Steve Bannon, I’ll leave out the expletives, but I can tell you exactly who the guy is. If you want to ask me about Reince Priebus, boom, I can give you the scouting report, what his pluses and minuses are, and I can do it objectively. So I know how to evaluate talent.

No. 2, effective communicator, although I am polarizing because I’m very opinionated and so some people don’t like opinionated people. And I’ll tell you another thing I’ve learned is, people don’t like the truth. You tell somebody the truth, they get very upset, they set their hair on fire and they run around in a circle.

You say the morale sucks in the White House … Well, by the way, the morale does suck in the White House, but you’re not allowed to say that because that’s the truth.


It’s going back to “A Few Good Men” from a generation ago.

“You can’t handle the truth.” Right.

“You can’t handle the truth.” Tell somebody the truth, you’re very polarizing. Let me tell you something, if you tell somebody the truth, it’s very liberating. I mean, I’m 54 years young. I’m 54 years young for a reason. I’m rolling out of bed saying, “Hey, no problem.” I’ve run this business as sound, ethically, as you could run a business. I would never dishonor my dad and his work ethic.

Are they still living, your parents?

They are. 82 and 81. They still live in the same house I grew up in. Funny part about that is, I wanted to move them once I started making some dough, but they’re are wedded to the neighbors, they’re wedded to the area.

My grandma has stayed in her same house.

I renovated the house. I mean, they got all brand new furniture and appliances and all that other stuff. A new roof, a new basement, you know, whatever they wanted. Funny thing is — because you’re some Italian heritage, so I’m going to ask you a question. Okay, when you turn to your parents, you say, “Okay, Pops, what kind of car do you want? I’m going to buy you a new car.” What is my father’s old-line Italian say that he wants?

A Chrysler.

Well, close. A Cadillac. A Cadillac, right. They don’t want a German car. My mother says, “Mercedes.” She’s very status conscious. So I buy the Mercedes, my father gets this lease deal from the Cadillac dealer. So I get a Mercedes and a Cadillac. Now I go back, I visit my parents every Saturday and Sunday and make sure they’re okay, and I always bring my kids there. It’s a good grounding wire for them to see how I grew up so they don’t get too detached from reality, right. The Cadillac never moves from the driveway. The Mercedes is being used by everybody, including my father. If I look around, my mother says, “Yeah, he hates that Cadillac.” So I had to return the Cadillac, eat the lease and buy him a Mercedes.

Oh, okay.

I’m probably in trouble now because that’s a globalist thing to do. My point being that you know people don’t really know what they want until they get what they want.

Yeah, that’s true.

Look, I’ve lived this very improbable, very blessed life. Entrepreneurs, smart ones know that a lot of their success is providential or if they don’t believe in God it’s from the universe. It’s from the karmic atmosphere of the universe, luck. I don’t know. I didn’t pick my upbringing. I didn’t pick my parents. I didn’t pick the location of my birth, so therefore, definitional, I won the lottery. If there are certain axiomatic facts about life, one of them being life is unfair, the people sitting here in this podcast, we won the lottery by that definition.

I think about that all the time.

So for me I wake up with a lot of gratitude about life and I also recognize that the human condition is going to come with tragedy, because you’re going to have to say goodbye to people that you love. I mean that’s, unfortunately … If you get to an adult age, you’re going to see people die that you love. You know, I dedicated my first book to one of my best friends who was my brother in law, he died of stomach cancer at the age of 44 in 2009. Very painful, but the flip side of it is there’s a lot of fun things to do in life. But if you’re listening to this podcast and you obviously like Kyra. Is that how you say it? Kara?

Kara. Like Sarah.

Let me just say this, okay: Live your truth, live your dream, live who you are, live your sexuality. Be who you are because you’re only here visiting. Okay, and like Mel Brooks said, one of the best lines ever is, “Relax, none of us are getting out of here alive.” So live your dream and relax into it. Whatever happens to you, roll with it.

All right, so how did you get wrapped up with the Trump people then? Because quite a few of these things you’re saying are not things that come out of this particular White House, or maybe they do.

They do and they don’t. I mean, the messaging is flawed. The process of the messaging is flawed.

So how did you get hooked up with him?

I was with … First of all, I’ve known the president for a long time. I met him when I was at Goldman Sachs.


I met him at a … Actually, my old boss, Mike Fascitelli, in real estate. Remember, I was a real estate investment banker, I got fired by this guy Mike Fascitelli, he’s very close to Trump because he was in real estate.


So I met then Mr. Trump, I never called him Donald or anything like that, but I then met Mr. Trump probably in the late ’90s through my old boss from the real estate department. I had read “The Art of the Deal.” He was a larger-than-life figure here in New York when I was growing up. And so I’ll be very candid with you, at that point I was awestruck by meeting him.

Where did you meet him actually?

I’ll have to remember this. It was a restaurant. I’m not sure if it was the Plaza Hotel. It was somewhere up here in the plaza district in Midtown Manhattan.


Because I remember my boss saying, “Hey, I’m going to meet Donald Trump, do you want to meet him?”

Of course you said …

Yeah, I got to meet this guy. This guy’s a character on the Howard Stern Show.

This guy.

I got to go meet the guy, right? So I didn’t really know him, I’m not going to lie about that. I don’t like over-exaggerating my relationships with other people. But then started to see him out. I was out, socialized a little bit, went to a couple Yankee games. I’m tight with Randy Levine, the president of the Yankees. He was in the box with me, the owner’s box.

New York chitter chatter, right?

New York chitter chatter. He was with Regis Philbin, you know, I was there with a couple clients. I mean, the president, Mr. Trump, very gregarious, friendly guy. And then I got to know him a lot better during the Mitt Romney campaign. And so I was … You know my politics, I’m fairly agnostic. I’m not really strident Republican or strident anything. If you ask me my positions I’ll tell you what they are, they don’t fit either party. So I could never run for anything because Democrats would shell me on my economic views and the Republicans would shell me on my social progressive views.

Well, the old-time Republicans, the old New Yorker Republicans, the Rockefeller Republicans.

People say they’re all Rockefeller Republicans but I don’t even really see myself as that because I’m like way to the left on social stuff.

Yeah, but they would have gotten there if it was today.

Honestly, at the end of the day we … I mean, there’s one thing, that’s another axiomatic … My 54-year observation of the planet, there are no equal outcomes. You can’t systematize them, you can politicize them, you can read the Communist Manifesto, you can believe in socialism, you can say whatever you want, but you’re not going to have an equal outcome because people are uneven. What a society has to provide is as much equal opportunity as possible, but I’m telling you right now …

I know, people rise and fall.

No matter how you politicize it, you’re not going to get equal outcomes. And so for me, when I step back and look at this stuff, whether you’re black, white, whatever your sexual orientation is, whatever your family of origin is, let’s try to level out the playing field. Let people live under the theory of life, liberty and the pursuit of happiness.

Well that would be nice, Anthony, but it doesn’t happen that way.

It doesn’t happen that way and it probably won’t happen that way because primordially we were set up for primordialism. Primordially we’re set up for that.


You don’t think we are?

I think we are and we have to resist it. Primarily we’re set up for dragging our knuckles along the ground but we …

We have to transcend it.


We have to transcend it. You’re set up that way but you can transcend it. That’s your humanity, right? You’re in a piece of machinery that hasn’t evolved in probably half a million years and so … You know, your phone got upgraded nine times since they started them in 2007 or eight.

Wouldn’t that be nice? If you could upgrade people?

You can’t upgrade. You don’t have a software upgrade. So you have primordial instincts, you have atavistic instincts, but you can transcend them. Okay, but back on this point. Now with Trump it’s 2012, we’re doing fundraisers in his triplex apartment and I’m developing a relationship with him and his team. And I got a rapport with him. I’m seeing him, I go to lunch with him, I go to breakfast with him. We talk, blah, blah.

And then the day after “The Apprentice,” whatever that day may be, I can’t remember it but you could Google it. I’m in his office having breakfast with him and he says, “You know, that was it. It was great. My ratings were great, weren’t they? I’m the man.” And I’m listening to him and I’m laughing because he knows how to make you laugh. And then he says, “Oh that’s it, I’m running for president.” And then I laugh. I say, “You’re not running for president.” “I’m running for president. I hired this guy Corey Lewandowski. I got this guy Roger Stone. I’ve got this guy Sam Nunberg. They’re down on the fifth floor, we’re running for president. I’ve got Hope Hicks,” and I didn’t know any of these people. I said, “You’re not running for president.”

I said, “Let me tell you, this is a great publicity stunt. I get where you’re going.” I said, “You’re at 2 percent in the polls.” He said, “Yeah, I watch Fox too. I’m at 2 percent of the polls because people are like you. They think I’m not running for president, but I’m really running for president. I’m done with this stuff. I’m 68, 69 years old,” or whatever he said. I said, “Listen, you’re not running for president.”

I said, “Number one, I’ve been to your apartment, it’s fantastic. You have 19,000 square feet here in midtown Manhattan. You’re not going to live in 6,000 square feet in the White House residence, you’re just not going to do it.” “No, no, no I’m running for president.” I said, “I’ve been on your plane. Your plane is absolutely gorgeous. Your plane is beautiful.” I’m like, “You’re not going to carry the press around on Air Force One everywhere you go.” He said, “I don’t know. The country’s a mess. I’m going to fix the problems. I’m running for president.”

He said, “Hey, you’re halfway good on TV. I want you to help me. You don’t have to raise me any money by the way. I want to help me.” I said. “Okay.” I said, “Mr. Trump, I’m already tied into this guy.”

You were working for Mitt Romney.

Look, I’ve got a very eclectic political background. I bundled for Barack Obama. I went to law school with President Obama, and so I wrote him checks, bundled for him, and voted for him first term. I worked for Governor Romney, the second time I returned to my Republican roots. I didn’t like the president’s position on a lot of the business stuff and the excess regulation. It really hurts, cripples small businesses, excess regulation. So I go back to my Republican roots, I work for Romney. Romney gets beat — and no surprise there because a rising economy, it’s very hard to beat a sitting president, which is why Trump will get reelected.

So we’ll go back to the president now. He then says, “Well you’re with Scott Walker. Okay, after I kill Scott Walker you’re going to come work for me.” I’m like, “Well I can’t really do that. I got my clients.”

You were with Scott Walker the most like gutting all kinds of things that you probably believed in if you were backing Obama.

Okay. Study Scott, okay, because you have to understand, he’s in a very blue state. And here’s what happened.

No longer. Tammy Baldwin was the last holdout.

But here’s what happens, okay, and I really believe this because it’s happened to me. The media uses a prism and then a kaleidoscope.


And so here’s what happens is they make a decision on the candidate or the person. And they say, “Okay, let me get them through this prism. We got to alter the light structure around this person. Wait a minute, this guy could be effective and he may not have my ideology so let me warp the light. Oh shit, that’s not really working. Let me do a kaleidoscope now to change the whole landscape on the guy.”

So study Walker, he’s built a large rainy-day fund. He did a tremendous amount of educational reform in the system. The system is actually working better. All he was calling for, and no one wants to give him credit for this, was union accountability. Now you’ll bring somebody on, they’ll say all kinds of stuff related to politics, and the polemics of politics, and the union people will want to hit me with a stone. And they’ll inflate a rat outside my office, whatever. I don’t really care.

Your dad was in the union, correct?

My dad was in the union. I am a union guy. I have no problem with unions. But his union, let me tell you something, they were accountable to each other. So what I’m not in favor of is we’re all sitting here at this table, and we’re in the union together, and you decide because you’re in the union you’re not going to work. You decide that, “Hey, I’m not going to get up this morning and teach these kids,” or, “Hey, I’m cool sit in a rubber room. I don’t need to teach the kids, my union is going to protect me come hell or high water.” I’m not for that.

Okay, I get the virtue of a union. I get the structure of capitalism and the need for labor to unionize so they can get their share of the economic rent and create economic progress. I totally understand all that. But just like capitalists can run amok and they can environmentally pollute the system, which they shouldn’t be doing, or they can pay themselves too much at the top and not pay their employees enough at the bottom to let the social contract work properly, unions can also run amok. And they can provide a lack of accountability for their union members in an effort to protect everybody.

Okay, so we can debate all this stuff, it’s not even a matter. I’m with Walker. Walker is very funny, by the way. He says, “I got to drop out of the race before Trump nicknames me again. I don’t know if I could handle a nickname.” So I say to him, “I got to go with Jeb after Walker because my clients are with Jeb.” “Okay, after I kill Walker and Jeb are you going to come with me?” I said, “You know what, if you’re in the race, if you’re really serious, you’re in New York or I’m in New York, I’ll come with you.”

South Carolina primaries over, I get a call from him, I go to his office and I say, “Okay, here’s my list of people we can raise money from. I’m ready to help you.” And then something very bizarre and very accidental and improbable happens. The entire Republican establishment evacuates from the campaign and they signed these petitions of being never-Trumpers. And so the ridiculous part of my story is, I’m a pragmatic business person. I’ve written checks to Chuck Schumer. I’ve written checks to Senator Hillary Clinton. I’m now working for Donald J Trump for president.

And the Republican Party, at least.

The Republican Party evacuates. So what would have happened if Jeb got the nomination, I would have been a lowly check-writing rich dude from New York and no one would have paid any attention to me nor cared about me, but because of the supply evacuation of labor, talent, policy makers, television advocates, they leave, I get sucked up into the vortex of that, right?

I want to help the guy win. I’m on TV, I’m advocating for him, I’m campaigning for him, I’m raising money for him. And despite the “Liar and Furious” book, which I call “Liar and Furious” because Wolff is a liar and Bannon’s furious, you know I was there the whole way. And by the way, you know this because you know I’m Italian. You think I would back down in a fight? The guy has the “Access Hollywood fiasco,” that weekend I was out on Twitter supporting him, that next week …

I have to stop it. Come on that was … Talk about the fiasco.

You want me to talk about it?

You heard it. Yeah.

Hold on a second. Don’t you locker room talk at me. Hold on a second, hold on a second, hold on a second. I’m a New Yorker. You’re a New Yorker.

Yes, I am.

You never heard talk like that before?

I guess. Not from certain people. I do expect a heavier level of decorum.


I do. I do.

He’s a hilarious guy. He’s saying something really stupid. He’s playing for a laugh, he’s got a hot mike on, okay. By the way, I have said so many stupid things in my life and some of them in the … Look, I’ve made probably 10 phone books of mistakes in my life, at least three phone books of mistakes in 11 days inside the White House. So I’m not going to sit there and judge the guy. He said something regretful, he apologized for it, let’s move on.

Sort of. Sort of apologized.

Let me tell you something, I was there. At the Trump Tower studio he offered an apology. He looked pretty upset with himself for that moment, but whatever. And we can talk about that, but you know …

But you stuck with him.

Michael said that I left because — that’s Steve Bannon’s narrative because Steve now hates me, which is totally fine. But the facts don’t say that. Look at the videotape in the days after, I was on television. Look at my social media feed, I was out supporting him on that Friday night. Why did you keep supporting him? I’m playing to win.

You thought he was going to win? What was the reason you thought he was going to win?

I didn’t know if he was going to win or not win at that point. I thought we had a very good chance coming out of the convention. Anybody that’s telling you on October 10th, three days after the “Access Hollywood” fiasco, that we were going to win, is smoking their own crack pipe, okay?

I thought he was going to win.

You thought he was going to win after the “Access Hollywood” tape?

Yeah, because I think that people knew that about him, one, and that a lot of women had men like that.

Okay, well the good news for you is you were probably distant enough from it and could look at it more in a macro way.

I think people didn’t care.

I was probably too close to it.

I thought people should care but they didn’t.

Okay. Yeah, I don’t think they should care by the way. I mean …

I think mind your own business. We don’t live in France.

Yeah, we don’t live in France. But you know what? Maybe there’s some elements of France we should probably adapt. At the end of the day, who cares?

Freedom fries.

Let me tell you something I tell my Republican friends. You guys are for a smaller government in every aspect of my life except my bedroom. You want a larger government in my bedroom. You want to tell me who my lover should be and the positions I should have sexually. Okay, why don’t you guys get out of my bedroom.

And I feel that way about our public leaders. If the guy’s got the right policies, or she has the right policies, who cares? I don’t care about their personal lives. But that’s just me. So let’s move on.

So now I’m supporting him, we’re working together, it looks like we’re going to lose, and then it looks like we’re going to win. And then you’ve got to give this s.o.b. credit, he doesn’t leave. He’s a tenacious fighter. He’s in St Louis for that debate, he’s in Las Vegas for the next debate, the polls tighten. Remember, Paul Ryan wants him out. Reince Priebus wants him out. You’re going to lose, drop off the ticket.

And so here’s what happens, the Republican establishment basically doesn’t like him. I’m not saying some of it isn’t true, so I’ll be in trouble for that. Now he wins. He wins. We’re sitting around, he wins, and then the process begins. He names me to the executive transition team. Mike Wolff says I’m not doing anything at the transition. I don’t know, I’m interviewing hundreds of people for jobs. We set up his whole Tiger team, and then Jason Miller was going to be the comms director.

He says, “Okay, we need you to go downstairs to the studio a couple days, a couple times a day. And we need to out there on these different shows and telling people who we’re picking and how we’re picking.” And so I become one of the transition media advocates, and then they offer me the OPL [Office of Public Liaison] position, which is basically to be the president’s networker in chief to help him grow a robust CEO community. Small businesses, medium businesses, large businesses, also intragovernmental affairs. That’s fits my … That’s in my wheelhouse way more, frankly, than being a comms director. So I’m like, “Okay, I’m going to do that.” I get offered the job, I put my 12-year-old company and my 70 employees up for sale because I have to. I had to dislodge myself.

I know.

Think about how stupid I am, right? I view myself as a patriot. I view myself as somebody that has had this unbelievable life in America and I want people who grew up similarly to me to have those same opportunities. Because we’ve moved from the aspirational working class into the desperational working class. If you really travel the country …

No, I get it.

We’ve gone from aspirational to desperational. We have to return to aspirational, and if I’ve got an opportunity to affect policy to help that, I’m going to sell my company provided I can protect my employees, and protect all the people in this room, who by the way I was gone from the company for a year and they’ve done an amazing job, by the way. So I want to protect them.

And so I’ve got four bids. I take the second-highest bid. It’s from a Chinese conglomerate. They’re a Fortune 50 company. Why do I take a $ 14 million lower bid than the other bid? Because they’re going to keep the jobs. The American-based company already has a capital management firm, and you know, private equity and fund to funds. They really want the fund and a few of our asset managers, they don’t really need the apparatus associated with the asset managers. So I’m like, “I don’t want to do that to my staff. They helped me build this company over the last 13 years.” I take care of everybody here. I pay everybody 100 percent of their health care.

But you don’t sell. You end up not selling?

No I sold. I sold.

You sold?

I sold to go serve the government. Then Rancid Prebis and Adolf Bannon, they don’t want me in the position, so they begin this narrative. This oppositional research narrative. China, China, China. They tell several lies about me to the president and all of a sudden I’m not allowed to take the OPL job and they’re using all these falsehoods as a reason why.

So I’m in a limbo now, and then I catch Reince lying and then I have to point out what a liar he is. And then the president and I have a couple conversations, he realizes now he doesn’t like them. And then he brings me in and then the fun starts for me. I had an 11-day odyssey.

10 or 11?

No, it was 11.

I don’t know. You can decide how long a mooch is.

A mooch is 11 days. Don’t hurt my feelings. Because you have July 21st to July 31st, you say, “Okay, that’s 10 days.” But I was there for July 21st and I was there for July 31st. That’s 11 days. Don’t hurt my feelings.

All right, the new change in the time of a mooch is …

It’s 954,400 seconds if you were counting the seconds.

Which you did.

It’s fun.

We’re here with Anthony Scaramucci. When we get back we’re going to talk about, I don’t know, everything.


We’re back with Anthony Scaramucci. We’re talking about Trump, we’re talking about tech, we’re talking about all kinds of things. What do you think you’re going to do there? You came in guns blazing, essentially.

I came in as a … I don’t know Washington. I came in as a CEO. I came in as an entrepreneur. I didn’t come in as a slick political operative. So the president said, “You got to get rid of the leakers.” Okay, I’m going to get rid of the leakers. The same way I’m going to clean out a place here or you rip up a culture. You know. When you say good luck with it, I had them on the run. I did.

The president is kind of a leaker, it seems like to me. I’m pretty good at reading who the leaks are coming from.

Kara, let me say this. You’re always going to have leaks from the White House and you’re always going to have leaks in the political system. And in some way, leaks can be policy related and they can be beneficial.


I’m talking about the internment warfare leagues. The nastiness, the level of disharmony that was going on, the personal invective. This guy’s having an affair, that guy’s a drunk, this guy’s a globalist, that guy’s a nationalist. I’m talking about the whisperer versus the terrible, terrible leaks. Never going to get rid of the other leaks. I had those guys on the run.

By the way, when I got fired, the irony of the whole thing was they were so scared to leak the damn thing it didn’t get out there till two o’clock. I got fired at 9:37. I had those guys on the run, trust me.


I had another 10 days, would have fired a couple more people, and I would have stopped the firing like a good CEO. I would have given amnesty and pardon to everybody else in the room.

It’s a warning.

Yeah, this is how the calls going to work now.


Now we’re not going to leak on the president. We’re going to support the president. We’re going to stay loyal. You are. And see, never-Trumper people that are sitting in the room and you always-Trumper people, we’re going to meld the process together. We’re going to get it together, we’re going to figure it out. And by the way, you never have to lie for me because I’m not a liar. And you don’t have to worry about me. You know I’m never going to have you have to go to the press corps and make up a timeline or do any of the nonsense that these people do. I don’t care. I’m never going to dishonor my parents by being like that. So good news for you guys is, you can relax.

One of the greatest gifts that a leader can give people that are working with him — remember, no one’s ever worked for me, people work with me — the greatest gift you can give somebody is to relax on the ethics. Meaning I only expect you to be 100 percent ethical, I’d never want you to even touch the line.

And yet you’re working at the White House. It doesn’t feel like an ethical place at any point, I have to say.

All right, well, that’s your opinion.



Well, from the outside.

Okay, so that’s your opinion. And so by the way, the area that I was going to be responsible for is the only one I can control.


So me, I would work on that first. And then obviously if I had different roles inside the White House I’d work on the other things as well.

But I’m saying you’re describing somewhere where everybody’s not stabbing you in the back or front.

Yeah, well, I’m a front stabber but there’s a lot of back stabbers. And let me tell you something, these are terrible people by and large. They are vicious people. You probably have a lot of Silicon Valley people, I’m a Wall Streeter. Let me tell you how it works in Silicon Valley and Wall Street in my observation. You build your business and you build your career off of relationships. And so you’re trying to create like a big karma bank. I’m trying to do a mitzvah for you, you’re going to do one for me, we build a relationship. I’m totally cool with you making $ 100 million. Hopefully you don’t mind me making it. We’re all fine. Okay, we may be competitors once in a while but we’re both on the green team. We’re transacting over money.

In Washington, they actually get off on hurting each other. They actually earn badges or stripes on their lapel if they hurt somebody else. You know, “I crushed Swisher. I went after her with opposition research, I had 10 reporters write nasty things about her, and she fell from grace. Look at me, look at how cool I am, look how important I am.” And they do that to each other and they know that they’re doing it to each other and they admire it from each other.

But Trump did bring them in, as you know.

No, no, no, no, no. Time out a second. Time out a second.

Who hired them?

You’ve got to be fair. It’s been going on like that for 50 years.

Of course, of course. But I am saying he didn’t change that.

He didn’t change it because he’s a New Yorker. He descends on the area and he mis-sizes the area, if he’s going to be honest with himself. That’s why he’s a classic entrepreneur now, he is making so many changes because he has to. Entrepreneurs have to go through heavy turnover, you know that from Silicon Valley. You can’t get the culture and the personnel right Day One. You start flipping cards and building a different rotisserie team.

This is a lot of turnover, even for a startup.

A lot of turnover.

The Google guys, they stayed together forever. Facebook, the same exact thing, 10 years.

But that’s why they’re Google and Facebook. Okay, but there are other companies that are smaller or maybe not as successful that had heavy turnover in the beginning but are still decent companies.

We want more than a decent company from our president, presumably.

You’ve got to get the personalities right. If you don’t have the personalities right, you’re not going to get … You’re not going to have …

What do you imagine these people’s sort of …

It was like five or six things that did me in. Myself, I did myself in.

That phone call.

Yeah. That phone call. I trusted the guy, made a mistake there, so I have to own that. So I would say I did myself in. I think my first press conference did me in. I don’t know if you saw my first?

I did. I was fascinated by it.

I think that did me in. Too honest. Not slick enough, political operative. Not spinning enough, just talking very straight to people. I knew that the knives were going to come at me for that. The president putting in the memo that I was reporting to him directly.


That had a factor in it.

Because …

Well, because if you’re John Kelly and the president’s got you reporting to him directly, you just come in as a chief of staff, the first thing you do is remove the guys that are reporting directly to the president.

But that makes sense.

It makes sense. I never had a bad thing to say about John Kelly as a result of him firing me, God bless him. He had the right to do that and I took it like a man. You’re asking me what I think did me in. Then the other thing that did me in was I got hired to be a hatchet man. So when you get hired to be a hatchet man, the knives come out for you as well. I told Steve Colbert that I thought I would make it longer than a carton of milk in his refrigerator. I didn’t think I was going to make it that long. I was smart enough to know that it was a 30-, 60-, possibly 90-day job for me. I didn’t think it … I don’t see it as being an everlasting job.

But you pulled down Reince Priebus with you.

He had to be fired because he was the biggest leaker in the system. He’s a very dishonest guy, unbelievably insecure, he had to be fired. I mean, he was doing so much damage to the president and also he wasn’t staffing positions. And you know, if you were a never-Trumper and he put you in a position, if you’d like Trump he would find a way to block you. He was a disaster. But look, I would love to debate him on live television. I would love to debate him in a live forum.

He can’t do that.

He can’t do that.

What about Bannon?

Bannon is a different guy. I mean, he’s a very smart guy. He’s intellectually sound from the point of view that he’s very well read. He has a philosophical and political point of view. For all of his railing on the system he’s actually a cuck of the system.

Okay, so explain that term.

Okay, so he’s a cuck. You know, meaning like he is a hypocrite. Exactly. He’s actually a cuck of the system. He went to Harvard Business School, he worked at Goldman Sachs, he was a Hollywood producer, he worked in Washington.

He did check a lot of elite boxes.

He is an f-ing elitist. Okay, so all of this nonsense about him not being an elitist. He dresses like a hobo but he’s an elitist. But what he is is he’s got this messianic complex about himself where he thinks he has the answer and others do not. And so when you’re a messianic figure like that you do things that I said: You focus on your own brand, you care only about your personality, it’s your way or the highway. You don’t play well in the sandbox with others unless they’re playing and building your sandcastle. And so you know he’s a human walking disaster. It was also his political philosophy. He’s now at least admitting that he’s a racist. I mean, he’s openly admitting that he’s a racist, which you know is absolutely disgusting.

What’s the attraction to him by Trump then?

Well, I think it’s more complicated than that. I think you know Michael Wolff didn’t get that, right? We’re struggling in August. The Republican establishment is evacuated. It’s August of 2016, we’re at Woody Johnson’s house, now the ambassador to Great Britain. The Mercer family is there. They’re trying to figure out if they’re going to engage with then-candidate Trump. They had left the Crew situation. He’s now the declared nominee. They put five million into the PAC and they recommend Steve Bannon and Kellyanne Conway to the campaign. So they joined mid-August, the campaign.

And so I think the president, then the candidate, said, “Okay, listen I need to shuffle the deck here.” So he took those guys on. And then where I think the president has an issue with Bannon is that the president was already well ahead of Bannon on the desperation of the working class. The president was already ahead of Bannon on what the issues were for the core labor force of America and what the anxiety was. Bannon may have been there as well, but the president’s point, I think, is the right one, he beat 17 or 18 candidates and now he’s going neck and neck with Secretary Clinton. And so Bannon was trying to take all the credit for that. He had this guy Josh from Bloomberg, right, the devil’s bargain. Trump’s my hand puppet. I’m going to use Michael Wolff as my coming-out party. Trump’s the empty vessel, I’m the genius. All of this stuff was nonsensical, the guy needed to be removed.

But when you say what was the attraction, Trump’s an entrepreneur. The attraction was I needed something right then and there to help me so he brought those players in. And then — you can like this about Trump or dislike this — he then felt an obligation to Bannon and Priebus because of their roles inside the campaign. And so he wanted to reward them with high-profile jobs. That was a mistake because those guys didn’t care about him. They cared about themselves.

So what about now? He’s talked about it. “I like it chaotic. This is the way I like it.” Is that a problem from your perspective?

From my perspective it isn’t because …

It looks crazy from the outside, you know that. It does look a little bit crazy.

It’s not crazy.

Every day it’s a different thing. I feel like I can’t get in the shower without something happening by the time you get out.

Okay, so turn the news off. Okay, economy is growing, wages are up, he’s not calling for massive deregulation because he’s too smart for that. He’s talking for getting it to the middle of the pendulum.

It’s so business-like. The Dodd-Frank thing is about to go.

Well, Dodd-Frank is being modified. You have to remember, you have to accept some level of banking failure if you want the economy to grow. You don’t want to … Look, again, another axiomatic fact, life is unsafe. If you want the government to make you safest, then you’re going to be living in a society that doesn’t grow, and you’re going to live in a society that restricts animal spirits. You don’t want that. You’re an entrepreneur, you live in Silicon Valley, right? Or wherever you live. You don’t want that. You have to have people’s equity at risk in the community banking system and you have to allow some community banks to potentially fail as long as you don’t have systemic banking failure. Okay, so you can’t over-regulate the system then you won’t be able to grow and you will lose the wage growth opportunity.

All right, so keep going on the why it’s not chaotic.

I didn’t say it’s not chaotic. I said why it’s acceptable.


I didn’t say it wasn’t chaotic. It’s chaotic. But it’s acceptable because the nature of his personality is he’s an entrepreneur. He tried to fix or drain the swamp using cesspool operators and swamp creatures. You can’t bring Steve Bannon, who’s ironically railing on the swamp but is actually the Creature from the Black Lagoon, into the situation to drain the swamp. He’s going to add more sewage to the swamp. You can’t bring that …

But that’s precisely what he did. That’s what the president did, if you’re saying that.

Well, that was a mistake. He’s changing the personnel.

Right, but it’s not just them. It’s the global elitists who are leaving. Gary, Deanna.

Let’s give the president a little bit of credit. If you’re building a building, you’re going to hire people that can build the building. If you’re building a golf course, you’re going to hire people who can build a golf course. So he says, “Okay, I’m going into government, let me hire some people that are experienced hands in the government. Here’s what I want to do to change the government.” They go, “Well no, no, no, no. We like that system. That’s our business model.”

So he hired people, said, “Okay, help me drain the swamp.” And they’re like, “No, no, no, no. We’re not draining the swamp. We’re here forever. You’re going to be here for four years, possibly eight years, we’re going to add more sewage to the swamp. We’re going to turn the swamp into a gold-plated hot tub on you. We don’t want to drain the swamp.” So he’s figured that out now and now he’s got to change the leaders.

But it’s not just that group, it’s the other group. It seemed like there were two competing groups in the White House. Dean, Gary, Deanna, Dina Powell.

I think they left for different reasons. You’d have to ask them why they left, okay, but I think they left for different reasons. Listen, the good news is the changes that the president’s making now, my prediction is this takes me back to June of 1982 when Ronald Reagan made some personnel shifts. He fired Al Haig, he did a couple other things on the margin, and then he got the team tighter and better. It was after his assassination attempt, probably a year, and things were good. And then from June of ’82, the president did way better. The bad news for the president in June of ’82 it was too late and he got schmeisted in the midterm elections in 1982.

Yep. So did Obama.

So did Obama. So did George W. Bush in ’06. I mean, you can name … This is just what happens, this is what happens in our system. So the president has a chance to keep the House but they got to engage quickly. They’ve got to build a political operation above and beyond what they have right now. Otherwise you got 23 seats in jeopardy and he’ll lose the House.

Well what about a White House operation? I mean, some of these appointments that he makes do seem crazy. The FAA guy, the 24-year-old that was running a big … These things, why does that happen? What occurs in that administration where you don’t get many qualified people?

I’m being honest, I can’t answer it, but I do think some of that comes from the way Priebus set the thing up. So the very thick restrictor mechanism, literally always-Trumpers couldn’t get jobs in the White House.

Except now.

Well, it’s starting to happen now. But I mean, again, you know that was the way Priebus …

What do you imagine is going to happen in the next months ahead?

Good things. Look, again, you may not like him but I’ll just let you know, he ran a very successful business. The business went into bankruptcy, or almost bankruptcy, and he rebuilt it. He ran a very successful television program, I think it was on the air for 12 or 15 years. He went from zero political experience to the American presidency in 17 short months. So I mean the guy is talented. We have to step back and look at it. He’s talented so he’ll figure this out. He’ll shift the personnel mix. The seven or eight people that will go, that are about to go, and he replaces them with people …

Well just this week there’s Tillerson, Madius is probably going.

We’ll see. We’ll see. You think Madius is going? I don’t think Madius is going.

You don’t? Well I’m just saying.

I don’t know but we’ll see.

You feel like there is going to be stability? Because it feels constantly unstable. Or is that just …?

No. I think there will be once he gets the personnel around him that are philosophically in sync with him, once he gets people around him, this would be a good test for him. They’re in your presence, and they’re being obsequious, and then they leave, and they run to their Georgetown salons, and they snicker about you. I think you’ve got to get people in the room that are honest to you in your presence and then when they leave, they back you up, that they’re loyal.

Right, okay. Okay.

Even lying Ryan Lizza, he wrote in his article that I’ve never said a bad thing about the guy.

No, but I think he probably quoted you pretty accurately in that conversation, yes or no? Or not the conversation.

No, 100 percent. I haven’t walked back anything I said. But he had to admit that I’m not one of these do …

I don’t think he ever said that.

No, he literally explicitly said, “Hey, in fairness to Anthony Scaramucci, the guy doesn’t say anything bad about the president.”

Right, right.

And nor will I ever, because I like the guy.

What if there are things that you disagree with? Just don’t say them? You disagree on gay issues, for example. It’s got to be … It’s appalling.

I don’t even know if I disagree on gay issues, you’d probably have to ask him directly. I think he’s a New Yorker when it comes to gay issues.

Except for … Some of these rollbacks are clear. I’m sorry, no, pushback.

Okay, well, you may know it better than me.

These robots are obvious.

Let’s talk about the press for a second. Okay, I think you can be loyal to the president and you can disagree on tactics and strategy.

Okay. Except tactics and strategies are people’s lives.

If you’re going to have real friends, real friends tell you that you have a booger in your nose. Real friends tell you that you have bad breath. And real friends tell you you have food in your teeth, but they’re still your friends. They still love you, they want you to do well, right? So for me the war declaration on the media is nonsensical. Steve Bannon declared war on the media at C-PAC this year.

Trump seems to be enjoying it quite a bit.

It’s a mistake.

And what is his response when you say this?

I’m loyal to the president and I’m supportive of the president, but that is a mistake. You’re making a mistake with a war declaration on the media because No. 1, you’re not going to win that war. No. 2, you’re not picking the right battle. No. 3, it’s okay to have an adversarial relationship with the media but if you understand your role you have to be cross-checked and hand-checked by the media. Because the founders said, “We don’t want anybody too power-hungry to get these positions because we know that power corrupts absolutely.” Like Lord Acton said. And so the fourth … the state’s responsibility is to hand-check the people that are in power.

How do you judge the press’s performance in this?

With the media?

With the president in this administration?

In what category?

How do you think they’re doing?

Well see, that’s the irony. So the overall grade is actually …

For the press?

For the press, no. Very bad.


I would say his overall grade as it relates to policy — and the country is moving again, and we’re growing, and there’s a lot more opportunity, and there’s less slack in the employment markets, and there is a higher-quality job coming for the average worker. Those things are all very, very positive. That’s why he’s going to win reelection. But there’s a disconnect because of what I said, the prism and the kaleidoscope. There’s a disconnect between how well he’s doing and how the media is reporting it.

That’s what he says, too.

But this is true.

Look at the recent election.

It’s his fault. It’s his fault because you can’t declare war on the media. The fact that he hasn’t had a CNN interview, a major network television interview, or you pick … I don’t know, let’s say MSNBC. Pick an adversarial, or a perceived adversarial network, or news organization, the fact that he’s not in there with it … Let me tell you something. This guy’s got a force of personality. During the campaign he was on Morning Joe. During the campaign he was on these …

That bridge seems burned.

That bridge possibly is burned for now, but my point is, is that why lose your voice? You have this force of personality, you won the American presidency, you’ve been in the media for most of your adult life. Why lose that voice? Why lose that voice? Because Steve Bannon said, “Let’s declare war.”

So why is he doing it?

He’s a combative, competitive guy. He doesn’t like what’s being written about him.

Because he looks like a crazy old man shaking his fist at the television set.

I won’t use the word fake news because people obviously get upset about that, but how about inaccurate news or misinformed news? It’s happened to me. Okay, someone has said things about me that are categorically untrue. Please don’t say those things. They say, “Well we’re going to say them anyway.”

You have to understand something, there is standards, even the New York Times versus Sullivan case, you can’t maliciously say that about me. You’re accusing me of being a felon. You’re saying that I’m under investigation as a result of my role in the Russian situation, which is categorically untrue. Please do not write that about me. “Well I’m going to write it about you anyway.”

“Okay, well how is it sourced?” “I’ve got one source.” “Okay, could you please call Mitch McConnell’s office? I’m not under Senate investigation. Can you please call Steve Mnuchin’s office, I’m not under Treasury investigation.” “No, we’re going to write it based on the one source.” Okay, well I have a deep enough pocket and I’m a tough enough person where now we’re going to go to war. Okay, so to me it’s out there whether you like it or not. The we’re going to hit you, discolor you, dehumanize you, characterize you, disfigure you. So the president’s sore at all those things. But his strategy of combating that could be way more effective.

Now in addition to using Twitter and hopping over the mainstream media, he could sit in the gladiator ring with them. He’s very skilled and he can probably beat them more often than not.

All right, in that vein though, you mean it’s always about the coverage and not the actual thing? The Charlottesville comments. The other day lying to Justin Trudeau. All kinds of various things around the gay stuff is appalling. These executive orders have been, none of this is problematic from your perspective.

No, so I have to confess here. I didn’t see the executive orders so whatever they were, if they were anti-gay I would formally and publicly …

The transgender thing is true. Then the one after it and Charlottesville.

Did he walk back the transgender thing in the military?

No. The military has, he hasn’t. The military doesn’t agree with him.

Okay, the military doesn’t agree with him and they walked it back.

Right. The military did, not the president.

Anything that’s anti-gay, I have no problem publicly renouncing. The Charlottesville thing, you can get a look at the tape. My first television appearance after my firing was on George Stephanopoulos. I said that there can be no daylight or equivocation on Nazis. Nazis are bad.

But what do you say to this? This is the president saying this.

I think in that case, again …

That was not misunderstood.

I’m not an apologist for the guy. I will tell you I would call balls and strikes and tell you where I see things. Again, people can like me or dislike me for that but on the gay thing, if it’s anti-gay I totally …

Well I’m just using that.

Okay, well, if it’s anti-gay, I totally and wholly disagree with it unequivocally. And as far as I’m concerned, you know I have gay family members.

You don’t have to have gay family members.

I’m not even saying that. I was supporting the gay community before I realized I had gay family members. I just think it’s stupid. Okay, life, liberty and the pursuit of happiness is only for straight people? That is stupid. We need to change that.

I’m just using that as an example. Some of these things are real problems.

So unequivocally denounce that. I have no problem. Charlottesville, I was on public record on national television saying that was wrong. I said it to Steve Colbert. I’m saying it now on your podcast. I said it to the president.

And what does he say when you say, “What are you doing?”

Well, he tried to walk it back and say that he was trying to say that there were bad people on both sides. He malapropped and said that there were good people on both sides. But it really doesn’t matter, what matters is there can be no daylight on those things. And so what he did was classic him. He got to the … he flew to Washington from Bernardsville, got to the podium and denounced everything that he said on that Saturday. And then on the Tuesday at Trump Tower he went back to what he was saying because he was getting frustrated with the press. So again, I mean …

Guns, I’m going to do something then not do something. It feels like a lie.

The gun thing is …

Complicated. I get it.

The gun thing is very complicated. Let me tell you, the gun thing is very complicated. If you hate the Second Amendment and you’re listening to your podcast, I got bad news for you, you’re always going to have a Second Amendment. If you’re lucky …

I’m talking about his actions.

If you love AR-15s and you’re listening to this podcast, I got really bad news for you. A couple more mass killings like this, you’re going to have a groundswell of support.

There is a groundswell of support.

Yeah, but I mean there’s going to be an even bigger groundswell of support.

I’m talking about the president himself.

So to me, I would get ahead of it with legislation.

But getting on the air and saying you’re going to do something about it and then rolling it back, that’s the kind of stuff that is disingenuous. Just absolutely.

Okay, but that’s the problem with the political system, right? Because he’s trying to find the mark. He wears a lot of stuff on his sleeve as a New Yorker.

He just says it out loud.

So he’s saying it out loud. I’m going to do this because that’s what he really thinks he’s doing. Then he’s influenced another way. I’m going to do that because that’s what he’s really thinking he’s doing. But I do think that he’ll get to the right conclusion because I think he has the support of the NRA. And I think the NRA, say what you want about the NRA, they’re not stupid. They know that a couple more mass killings, a couple more killings of the innocents, you’re going to have a bigger problem than they currently have. So they’ve got to get somewhere on the guns. I’m not a one-size-fits-all person. If you’re in Montana on a ranch, you probably the gun legislation and the control.

We don’t have to debate gun control.

It would be different.

Yeah, I’m talking about the messaging is really …

The message. But listen, there’s no way you can tell me that there isn’t an intersection of values on this debate where normal people can have a gun for recreational or protective purposes and we can figure out a way to screen out the abnormal people.

Of course. Which is what he said reasonably and then shifted.

There’s no way that we can’t do that. Now I get the NRA. One chink out of it wants to take your rights away, they’re never going to get them back, and blah, blah. But let me tell you something, we can figure it out.

When we get back we’ll have more words of wisdom from The Mooch.


We’re here with Anthony Scaramucci at his office in midtown Manhattan. We’re talking about everything from Trump to tech to where the next election cycle is going. I’m going to finish up on two things. One, your book and the election stuff. You keep saying he’s going to get reelected.



Just look at the data. I’m a data-dependent person.

Just looking at this election in Pennsylvania.

Well, remember midterms, let me use President Obama’s own words, midterms of 2010. “I got schellacked.” His own words. He goes on to win a resounding reelection two short years later. It was 53-47. No, I mean he crushed him. Go look at the electoral college vote for Obama in 2012. Believe me, I was close to the situation.

It wasn’t a Reagan schellacked.

Well that was 49.

We’re never going to have those again.

I don’t think so. Not in this county. Not with all of these podcasts, people are locked in, man. But back then you had uniformity to press, you won 49 states back then. But on him, and just studying the data going back to 1880 to today, it’s very hard to dislodge a sitting president. A rising economy, it’s virtually not happened.

Someone will then push back and say, “Well what about Lyndon Johnson?” Economy was rising, he stepped out of the race because of the Vietnam War and the fear of Bobby Kennedy. Okay, but if he stayed in the race, people say maybe he wouldn’t have won reelection. I’ll cede them the 1968 election. Aside from that, go to 1880 to today, you don’t get knocked out unless you’ve got a big recession, some dramatic thing is going on.

Well, this is a special president in every way. I mean, he’s different than every other one so you could have a different outcome.

This kid Conor Lamb, a gun-toting …

A conservative Democrat.

A conservative Democrat. If you told me that the Democrats were going to pick a conservative Democrat …

Oh, there’s been conservative Democrats. That’s not true. There’s been all of that … In Pennsylvania, you mean?

No, no, no. No, I’m talking about the 2020 nomination, you’re at the Democratic National Convention, and the Democratic Party picks a conservative Democrat.

No, they’re not.

They’re not. Of course they’re not. Then I think they have no chance to beat him. They have no chance to beat him. They’re not going to beat him with … Because the American people are smart. They know that the left-leaning strategies on the economy and things like that actually don’t work. They like the social progress.

Who would be someone you’d be nervous about against Trump?

You’d have to start naming people. I tried to get Donna Brazil to name them on the Bill Maher show, she wouldn’t. But you have to start naming them. There’s nobody that I’ve heard that can beat Trump. Nobody. He’s a force of nature beyond anything …

Harris Booker.

She’s a very nice person. I met her on an Israel trip. She’s an elegant, nice person. I don’t think she can beat him. I just … No. 1, she doesn’t have his name recognition and his force of his personality.

Joe Biden.

Okay, Biden is an interesting guy. He is going to be mad at me now for this right because I love Biden. You can see there’s a picture of me and Joe at the World Economic Forum because we were supporting gay rights globally. Okay, and I was a big part of that with Chad Griffin. And I love Vice President Biden, but Vice President Biden fumbles the ball upon contact. So he does. I mean, he did it in the 1998 election. He did it against Barack Obama in 2008. He is a lovable guy from Scranton. Love him to death. I have no problem with him as a human being and he’d probably, arguably make a good president. He’s way smarter than people want to give him credit for, but he fumbles the ball on contact.

You can’t fumble the ball on contact. This is the NFL. You’re going in there, you’re getting hit left and right, and then people will then say, “Well didn’t you fumble the ball on contact?” “I didn’t even get a chance. I got steamrolled before I could even get the ball.” Are you following what I’m saying? But maybe I would have but probably not because I’m pretty good at debating. But the vice president …

So you don’t think there’s a Democratic candidate that can go up against him?

No. If they were smart they would say, “Okay, listen. We can’t stand Trump. And yes, I know we were lefter then left now but if you want to beat this guy we’ve got to bring on some of the anti-Trumper Republicans. And the only way we’re going to do that is we need a Conor Lamb-like candidate to go after this guy.” And you guys don’t have one of those. And my prediction — and you immediately said, “They’re never going to do that.” If you had one of those, you would reject him or her onto the ash-heap of history in two seconds.

So what about the midterm elections? That could cause stuff …

Going to cost them. It’s going to be tough now. I said a month ago that I thought that he could win, to the great surprise of people. But after this election and watching the lack of political operation and lack of apparatus that was deployed in PA18, if we don’t change that dramatically, we have to change that quickly because we’re already in March going into April, going to be tough now. He’s got the economic elements to surprise people. The disposable income is up, the economy is doing well, with the right political organization and apparatus you could surprise people.

The House and the Senate. He’s in big trouble.

They’ll probably move to impeach him, but then you know you got to … Look, they moved to impeach President Clinton. They impeached them and then you couldn’t get a trial together.

There’s also the Mueller investigation hanging over it. I’m not thinking Russians with the money laundering and other things.

I’ve been wrong about so many things. I think he comes out of the Mueller investigation okay. Maybe it’ll be people in the periphery that are getting hit or …

Even his family?

I don’t know. I don’t know. I’m not close enough to it but I think he comes out okay. The guy’s never used email, rarely uses his cellphone. I didn’t see any collusion.

I don’t think Russia is the issue, it’s money laundering.

Okay, maybe that is. Again, I wasn’t there so I’m don’t know.

I’m not sure you can be in real estate in New York and be in debt without some …

I don’t know. You’d have to look into that and maybe they have something.

I’m not a prosecutor, I don’t have subpoena power.

Maybe they have something, maybe they don’t. I don’t know. My prediction is, though, he’s the sitting president, it would be hard to take him out. That’s my prediction.

Okay, last question, your book. So your book … We’ll start where we began. It’s about a blue-collar president … You’re talking about one of the richest kids …

It’s a working title. You know, Donald Trump Jr called his father the blue-collar billionaire.

Yeah. So the rich kid said the rich kid was a blue-collar billionaire.

Yeah, but he was, though, that’s the irony of that soup. Because he saw something that the other global elites didn’t see.

The billionaire who likes the blue-collar people.

Kara, they didn’t see it. His secretary. Let me tell you something, okay.

Who is more blue collar if you think about it? Comes from a much more modest background.

They may not like me for saying this, okay. I’m okay with it now. I’m comfortable in my own skin. There were 18 or 20 candidates on the field in 2016, there were only two candidates that saw the economic desperation and duress. Bernard Sanders, Donald J. Trump, the other guys didn’t see it. I’m just telling you. Oh, and by the way, I got my hand raised here. You’re looking at a guy that didn’t see it because I spent 30 years of my life going up the economic spire of opportunity, and class transcendence, and I wanted to be rich. I wanted to go to the World Economic Forum. I wanted to talk to cool people like you. I wanted to be on television. I wanted to have financial independence and take care of my family. And so I was very driven and I started to push myself into the world of collective biases of the elites and I didn’t see it.

It wasn’t until I started campaigning with the president and then the candidate I said, “Oh my God, oh my God. He’s talking to the people that I grew up with.” These are the people I grew up with and my parents are insulated from these people because I’m paying for everything and making sure they’re okay. But the people I grew up with are having a rough time right now. And he sees it, he’s a billionaire living in a tower near the Tiffany store, he sees it and I’m a dummkopf. I did not see it. Why didn’t I see it? Because I’m tunneling myself in.

Let me finish by asking you …

So to me the blue-collar president means that he recognizes the economic duress and he’s trying to implement policies to help them. And thus far, 13, 14 months into it, the economic data suggest that there are elements of what he’s doing that are actually working.

Is he going to somehow try to stop the divisiveness? The Twitter attacks? I know that people say it’s beneath the president but there is a point where there is not decorum, but just simple behavioral.

So here’s my prediction. Do you want my prediction? He gets the right staff around him, guys he really trusts, men and women he really trusts, that are like I said, they passed the snickering test. You know, they’re not walking out of his office snickering in a Georgetown salon about him because they think they’re above him and he’s beneath them. He gets people in the room with him to work with him, he dials back all the nonsense on Twitter. That Twitter stuff in my opinion comes from “I’m undefended. I don’t have the appropriate media advocacy. They’re hitting me. I’m going to talk about Mika’s facelift.”

Okay, don’t talk about Mika’s facelift. Let’s use Twitter for policy. Let’s use Twitter for strategy. If you want to be cute and New Yorker on Twitter that’s fine, but let’s not go into Mika’s facelift. We don’t need to go in that direction.

Right, which he does.

At this point he thinks they’re hitting him so he’s going to hit them back and he uses Twitter because he’s got 50 million people on Twitter now. And so that’s, I don’t know, I think the New York Times has a three million person population of people so divide that, he’s got 17 times the New York Times.

Some of them are bots, Anthony.

I understand that. But in other words, let me put it this way. When he puts something out on Twitter, does it not show up on the world news?

Of course. Crazily enough.

It does, right? He’s getting to hundreds of millions of people off of Twitter.

So one last question about tech, because this is a tech podcast. How do you look at tech, tech which is quite opposed to Trump, I would say overall but not completely. He has been hostile at tech.

Yeah, there are people in Silicon Valley — and don’t worry, you’ll remain nameless for this podcast. I’m not going to out you guys. But there’s a large group of people in Silicon Valley that because of the fascism of the left, because the left is primarily fascist, that you can’t express your views.

We know, Peter Thiel is moving to Los Angeles.

Forget about Peter Thiel. He’s out of the … You know the gay community took a while to get out of the closet. It’s socially acceptable now. There’s a large group of people that are in-the-closet Trump supporters in Silicon Valley, trust me.

In the closet?

In-the-closet Trump supporters because they can’t come out of the closet because they’re shamed by leftist fascism. You know, look, I’m a victim of leftist fascism. I can’t even go back to my alma mater. I’m not allowed back on the campus of the university because I’m a Trump supporter. I’m fine with it.

Oh you long-suffering people. You’re not suffering, come on. You get to say what you want. That’s crap.

I get to say what I want because you’re cool and you’ve got a microphone in front of me. There are certain areas people don’t like what I’m saying and they want to keep me away from them.

Defend it. Defend it. They’re not going fascist. A fascist is they make you do something. I can’t imagine anyone making you shut up.

If I was an actor in Hollywood and a Trump supporter, I’m getting a lot of work?

I don’t know.

Okay. All right, well, you know, they don’t get a lot of work. So here’s the bottom line …

Some of them are bad actors, let’s be honest. He doesn’t have a good coterie.

You’re so funny. You have a lot of in-the-closet Trump supporters in Silicon Valley.

All right, okay. But where does it come with tech with all the different things with Russia, with their responsibility? There’s this sort of backlash to tech.

Here’s the good news. Okay, you’ve got a free-market president. You really study the originations …

Who likes terrorists, but go ahead.

You want to talk about the terrorists? I can talk all day about the terrorists.

No, there’s sanctions and I think they’re sanctions …

The playing field is uneven. He’s got to even up the playing field. Has to. They know he has to and he will. Just like they raised the dough on NATO.

He’ll make so many compromises in it it won’t matter, but go ahead.

Let’s go back to what you want to talk about.


The good news is he’s going to leave him alone. They’re probably not going to leave him alone. They’re going to probably pour money into some left-wing Democratic candidate but …

I don’t think they’re lefty at all. I find them incredibly conservative, but go ahead.

What are? The tech guys?

The tech people.

Yeah, I know that, but they’re anti-Trump. I’m telling you right now.

They’re anti all this immigration nonsense. It’s non-sense.

You want to see the floodgate open for the Democratic party from Silicon Valley? Pick a Conor Lamb, not him but pick an older Conor Lamb. I don’t know, convince Bob Iger to run.

He’s not doing it.

Convince Howard Schultz. These are practical business people that the Silicon Valley guys would say, “Hey, I’m probably more libertarian than I am a liberal. Let’s go with that guy.” You following what I’m saying? And then you got a chance. Other than that, you got no chance.

Where is tech now going forward with all these attacks on Facebook and Twitter? It’s very clear the Russians used the platforms.

My opinion is that you got wickedly smart people at Facebook and Twitter and these other places, and they’re all new. And so they’re going to take a while to get to the right editorial objectivity where fair people can express their opinions fairly and they’ll be less shadow banning on either side or whatever it might be. And it will by and large work out and there will be a period of tumble like there is in any society where you’re seeing radical Schopenhauer breakdown of a system in a rebuilding of a system.

Just like there was when we went from horse-and-buggy to horseless carriages, and just like every time we’ve had a massive S-curve move in technology. So my prediction is it’ll be a little shaky and it’ll be a little polemical in the beginning but then it’ll sort itself out. And that these people that are running these companies — I mean, it’s just my opinion so take it for what it’s worth. They’re by and large fair people. They by and large want the freedom. I am struck by what I said that Silicon Valley strikes me as way more libertarian.

It is, 100 percent. That’s what I mean. They’re not liberal.

So libertarians are actually for gay marriage. They don’t care what people do in their bedrooms. Okay, and so for me I think it will work out. The good news for them is that the president is ignoring them. You know, he’s got four things. He’s ignoring them. He’s got four things he wants to work on.

He needs to pay attention soon. There’s some things coming down the pipe. Robotics, automation, self-driving. Big job displacement issues possibly, possibly not.

That’s why he’s got to tackle the educational issues and technical skill training. And I’ll leave you with this one thought. I’ll leave you with this one thought.

All right, you leave me with one thought.

One thought. You want one thought?


Because you interview a lot of people.


And if you get a public servant on your podcast, why don’t you ask them what the 25-year plan is for America. Say, “Hey, tell me the politician that has a 25-year plan for America.” That’s a data-dependent plan, that isn’t focused on the left or focused on the right, but is actually a right or wrong plan. Meaning that here are policies for the United States, forget about left and right, are they right or wrong for America? And who’s the politician that’s focused on that, and who’s the politician that’s going to lay out the realness to the American people that, hey, I’ve got bad news for you. We’re not fixing the deficit in a cable news cycle. I got really bad news for you. We’re not fixing the job displacement from robots in five years or 10 years, it’s going to take us 25 years. I’ve got really bad news for you, our infrastructure is crumbling.

And AI is going to take your job.

AI is going to take your job, and the infrastructure is crumbling, and we’re going to have a third world country run by robots if we don’t come up with the right policies. So who’s doing that? And so I will leave you with that and I would say it rhetorically but I would also say it emphatically, that America needs a 25-year plan. And let me give you the bad news: The Chinese have a 50- and a 100-year plan.

They do.

And so America is not going to have that because it’s America, but we could have a 25-year plan. And we could have a bipartisan commitment to that plan to help our children and our grandchildren. And the one thing I learned about Washington and wanting to stop the nonsense and knock it off with each other with the stupid backstabbing and the subterfuge, and work on the 25-year plan to help America.

Why don’t you work on Trump getting off of Twitter and doing that. It creates divisiveness.

I was there for 11 days.

Those long 11 days.

I couldn’t get him to stop tweeting on Jeff Sessions. He’s going to do what he does, but he’s going to be fine for Silicon Valley and there will be progress made under his administration, but it’s not the answer long-term. We have to develop a 25-year plan.

And who’s responsible for that? Politicians, the tech companies?

Well, I think the citizenry. I think that we have to activate citizens, we’ve got to activate.

Are you running for office? This is my last question. Would you run for office?

Do I look nuts? Do I look crazy?

I don’t know.

First of all, how could I even run for office? Everything that I just said doesn’t fit any party.

I don’t know.

Well what party does that fit in?

The Mooch party.

Oh yeah, The Mooch party. That’s going to fuckin’ win … I’m sorry about that, I used the F-bomb.

That’s okay, I don’t care.

That’s going to win 11 votes over 11 days.

I have a question. You allow people to make fun of you using The Mooch and the whole thing, you’re very humorous about it.

I could care less.

You like it though, too.

I don’t necessarily like it, I just think that what other people think of me is none of my business. I could care less. You know the irony about being called The Mooch, I’ve been called The Mooch my entire life since the second grade in 1972. And it turns out that the left loves it because it’s a “pejorative” because a mooch is a mooch, right?

Money and squeaking.

The irony is, I’ve been more mooched then Benna Moocher, trust me. You could just look at my philanthropy. But at the end of the day, I don’t care. That’s my last name. My last name is Scaramucci. My friends from high school call me Mooch. That was on my varsity football jacket, Mooch. So big deal.

I’m sure it was. Are you going back to the White House?

I’m not even allowed in the White House. How can I go back? I’m on like the naughty list.

You can’t get within a block.

The guy is a little bit thin-skinned.

You can tell me a little bit.

I told the truth, big deal. I said the morale is terrible in the White House. Don’t hit me. Why don’t you back off of me, I’ll back off of you. You’re not going to back off of me, I got no problem going after you.

All right, Rocky Balboa, this has been entirely enjoyable.

Come on.

Thank you so much.

Rocky Balboa. At least you didn’t say Vito Corleone. All right.

I was thinking it.

All right.



Mooch, it was great talking to you. Thanks for coming on the show.

Recode – All

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Kara Swisher tweet-trolled The Mooch and all we got was this terrific 90-minute Recode Decode podcast

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Aaaaaaaay, it’s, well, you know whom it is.

The colorful White House communications director is still a supporter of President Trump, even though he was fired after 11 days.

When he was appointed as the White House communications director in July of 2017, Anthony Scaramucci knew that he was being hired as “a hatchet man,” thinking he would last only one to three months in the job. Tasked with ridding the Trump West Wing of leakers, he was fired in 11 days.

“I had those guys on the run, trust me,” Scaramucci said on the latest episode of Recode Decode, hosted by Kara Swisher, who met “The Mooch” in person in San Francisco after tweet-trolling him humorously but relentlessly throughout his short tenure in D.C.

As it turns out, Scaramucci can take a joke and also is quick to make them about himself. “When I got fired, the irony of the whole thing was they were so scared to leak the damn thing, it didn’t get out until 2:00 pm. I got fired at 9:37 am,” he said.

Cementing his reputation as a “front-stabber,” he didn’t mince words on the podcast about some of the people he has crossed paths with in Washington. But after all is said and done, he is still a supporter of President Donald J. Trump, and thinks he won’t be unseated in 2020 unless Democrats run a Conor Lamb-esque conservative member of their party — something that Scaramucci is confident will not happen.

“Studying the data, going back to 1880 to today, [it’s] very hard to dislodge a sitting president,” he said. “If they [Democrats] were smart, they would say, ‘Listen, we can’t stand Trump, and I guess we’re lefter than left now, but if you want to beat this guy, we’ve got to bring on some of the anti-Trumper Republicans.’”

Below the embed, we’ve excerpted highlights of Scaramucci’s other predictions and observations from the new Recode Decode. You can listen to the full interview on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you get your podcasts.

On backstabbing in Washington

“These are terrible people. By and large, they are vicious people … Let me tell you how it works in Silicon Valley and Wall Street, this is my observation: You build your business and you build you career off of relationships, so you’re trying to create a big karma bank: ‘I’m gonna do one for you, you’re gonna do one for me, we build a relationship. We may be competitors once in a while, but we’re both on the green team: We’re transacting over money.’ In Washington, they actually get off on hurting each other. They earn badges or stripes on their lapel if they hurt somebody else: ‘I crushed Swisher. I went after her with opposition research, I had 10 reporters write nasty things about her and she fell from grace! Look at me, look how cool I am! Look how important I am.’ They do that to each other and they admire it from each other.”

On former chief of staff Reince Priebus

“He had to be fired because he was the biggest leaker in the system, a very dishonest guy, unbelievably insecure. Had to be fired. He was doing so much damage to the president and also, he wasn’t staffing positions. If you were a #NeverTrump-er, he’d put you in a position. If you liked Trump, he’d find a way to block you. He was a disaster. I would love to debate him on live television.”

On former chief strategist Steve Bannon

“He’s a very smart guy. He has a philosophical and political point of view. For all of his railing on the system, he’s actually a cuck of the system. He’s a hypocrite. He went to Harvard Business School, he worked at Goldman Sachs, he was a Hollywood producer, he worked in Washington. He is an effing elitist. He dresses like a hobo, but he’s an elitist. What he is, he’s got this messianic complex about himself where he thinks he has the answer and others do not … He’s now, at least, admitting he’s a racist.”

On the Access Hollywood tape

“[Trump]’s a hilarious guy. He’s saying something really stupid, he’s playing for a laugh, he’s got a hot mic on, OK? By the way, I have said so many stupid things in my life. I have made 10 phone books of mistakes in my life — at least three phone books of mistakes in 11 days inside the White House. I’m not gonna sit there and judge the guy. He said something regretful, he apologized for it, let’s move on.”

On the Mueller investigation

“I think he comes out of the Mueller investigation OK. Maybe there’ll be people in the periphery that are getting hit. Guy’s never used email, rarely uses his cell phone. I didn’t see any collusion, I’ll maintain that.”

On Trump’s war against the media

“I’m supportive of the president, but that is a mistake. Number one, you’re not gonna win that war. Number two, you’re not picking the right battle. Number three, it’s OK to have an adversarial relationship with the media, but if you understand your role, you have to be cross-checked and hand-checked by the media. The founders said we don’t want anybody too power-hungry to get these positions because we know that power corrupts absolutely, like Lord Acton said.”

On Trump’s Twitter attacks

“That Twitter stuff comes from ‘I’m undefended, I don’t have the appropriate media advocacy, they’re hitting me, I’m gonna talk about Mika’s facelift.’ Don’t talk about Mika’s facelift. Let’s use Twitter for policy, let’s use Twitter for strategy. If you want to be cute and New Yorker, that’s fine, but let’s not go into Mika’s facelift. We don’t need to go in that direction.”

On supporters of President Trump in Silicon Valley

“There are people in Silicon Valley — and don’t worry, you’ll remain nameless for this podcast, I’m not gonna out you guys — but there’s a large group of people in Silicon Valley that, because of the fascism of the left, the left is primarily fascist, you can’t express your view. Forget about Peter Thiel, he’s out. You know, the gay community took a while to get out of the closet, it’s socially acceptable now? There’s a large group of people that are in the closet Trump supporters in Silicon Valley, trust me! They can’t come out of the closet because they’re shamed by leftist fascism. I’m a victim of leftist fascism, I can’t even go back to my alma mater. I’m not allowed back on the campus of Tufts University because I’m a Trump supporter.”

If you like this show, you should also sample our other podcasts:

  • Recode Media with Peter Kafka features no-nonsense conversations with the smartest and most interesting people in the media world, with new episodes every Thursday. Use these links to subscribe on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
  • Too Embarrassed to Ask, hosted by Kara Swisher and The Verge’s Lauren Goode, answers the tech questions sent in by our readers and listeners. You can hear new episodes every Friday on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.
  • And Recode Replay has all the audio from our live events, including the Code Conference, Code Media and the Code Commerce Series. Subscribe today on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

If you like what we’re doing, please write a review on Apple Podcasts — and if you don’t, just tweet-strafe Kara.

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Full transcript: Facebook co-founder Chris Hughes on Recode Decode

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His new book advocates for providing “guaranteed income.”

On this episode of Recode Decode, hosted by Kara Swisher, Chris Hughes, the co-founder of Facebook and former owner of The New Republic, talks about his new book, “Fair Shot: Rethinking Inequality and How We Earn.” In it, Hughes argues that working people should receive a guaranteed income, paid for by the top 1 percent of earners in the U.S.

You can read a write-up of the interview here or listen to the whole thing in the audio player above. Below, we’ve also provided a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

Kara Swisher: Recode Radio presents Recode Decode, coming to you from the Vox Media podcast network. Hi, I’m Kara Swisher, executive editor of Recode. You may know me as someone who plans to get rich by selling bulletproof armor for Teslas, but in my spare time, I talk tech, and you’re listening to Recode Decode, a podcast about tech and media’s key players, big ideas and how they’re changing the world we live in. You can find more episodes of Recode Decode on Apple Podcasts, Spotify, Google Play Music or wherever you listen to podcasts, or just visit recode.net/podcasts for more.

Now in week three of my horrible cold, which is giving me this very scratchy voice today, still, we have in the red chair Chris Hughes, one of the co-founders of Facebook. He’s also the author of a new book called “Fair Shot: Rethinking Inequality and How We Earn.” It argues that working people should receive a guaranteed income, sometimes called Universal Basic Income, paid for by the 1 percent like Chris himself. Chris, welcome to Recode Decode.

Chris Hughes: Thanks for having me.

So, tell me about … and let me go into your background first, because this is a big topic, and the joke I made at the top about bulletproofing your Teslas was from a quote that Robert Reich just gave at an event, where he said, “You’re either gonna have to do something like Universal Basic Income or” — to the rich — “or you’re gonna have to pay to bulletproof your Teslas.” You know, so we’ll get into a really bad situation of haves and have-nots and like Brazil or some countries where the rich have to insulate themselves using security, or South Africa or somewhere else.

So, I wanted to explain that it’s not a joke but it’s a very serious issue. But first, let’s talk about your background. Can you give everybody a quick synopsis of your history?

Happily. I’ll try to give the Cliff’s Notes version. I grew up in a little town, Hickory, North Carolina. It’s at the foothills of the Appalachian Mountains, used to be a …

You’ve barely lost the accent, but you have.

I did a little bit.

I can hear it.

Well, that’s part of the story, actually. I grew up there, my mom was a public school teacher, Dad was a traveling paper salesman, but then I got a scholarship to go to a fancy boarding school, Phillips Andover, up in Massachusetts. And it was there where …

Nice. That is a fancy boarding school.

It is indeed. It was there where I lost the accent and then later got a scholarship to go to Harvard and met Mark Zuckerberg, freshman year. We ended up roommates sophomore year, started Facebook in February of 2004, the rocket ship took off and my life changed pretty dramatically.

I ended up wanting to write the book in order to partially tell my story and be clear that the financial reward that I got from three years’ worth of work at Facebook was entirely disproportionate to the time and effort put in, but to also make the case that my story, which is nothing but … You know, the only thing we can call it is a lucky break, is unfortunately not that uncommon in the economy today.

No, now, you are unusual …

That a small group of people … I might be extreme but I don’t think my case is actually that unusual, a small group of people are getting very, very wealthy while everybody else is struggling to make ends meets.

Yeah, extremely wealthy in some cases. What did you … after Facebook, you left relatively early?

I did. I left in 2007 and went and worked for President Obama.

Right, like digital stuff.

Back in the early days of the campaign, I had the title of Director of Online Organizing, which pretty much meant trying to not just build a community online but create a movement that was willing to take the campaign into their own hands, not just sort of the hub-and-spoke traditional model of those campaigns, but instead people standing up to organize events and raise money, knock on doors, make phone calls and using the internet to power …

Which was early on. I mean, this had been tried by … Actually, the right wing was very good at it. The conservatives were very good at it way, way, way back, but this was one of the biggest efforts to do this, an important part of his winning.

Yeah, it was a transitional moment in politics in so many ways, but I think the biggest shift was not so much in technology. We had a social network called barackobama.com The technology was good but it was in the expectations that the candidate at the time and that the campaign around him was interesting, specifically saying, “You know, we’re not going to try to lock down the message and just us, three or four at the campaign headquarters in Chicago, are going to figure it all out. Instead, we’re going to open it up and quite literally enable anybody to write anything on our website barackobama.com.”

It was a symbolic moment but it mattered because it invited people into the campaign, to participate in a way that previously they hadn’t really been asked to, and it was symbolic of a lot of other changes. So we ended up raising tens of millions, hundreds of million by the end, of dollars through the internet, had tens of thousands of grassroots events. It was an important moment.

What got you there? How did you get there, you just liked Obama?

Well, it was back in 2007 and …

Way back then, that’s so long ago.

I know. It’s not that long ago, but politics has changed so dramatically, this really feels that way.

I was working on some of the political products at Facebook and so, one of the people that I got to know was this guy Reggie Love, who was President Obama’s body man, as they’re called, and …

That’s an unfortunate term, isn’t it?

Anyway, sorry to say that word, but he was his assistant and he just went with him anywhere. We started having conversations, just like we were doing with other candidates and officeholders, on how to use Facebook. It became clear that Obama was going to throw his hat in the ring and then I talked to a few of the other people. I did really believe in Obama’s story himself and the promise that he offered. Initially I just took a leave, but the leave turned into a permanent move.

Did you miss doing that, leaving Facebook?

You know, I had mixed feelings about it, but my experience was really different than Mark’s and Dustin’s. I mean, Facebook was a mission in and of itself for Mark, and for me it was a company that I enjoyed being a part of, growing. I learned a lot, it was exciting, there were all kinds of challenges, but it was clear to me early on that Facebook was not my life’s work. It was going to be a chapter, and it turned out to be a very important chapter, but I felt, particularly in 2007 when George Bush was president, we had all kinds of what I view as unfair economic policies, the war in Iraq and Afghanistan. It was a time when I was really hopeful that the country could change the corner.

Well, you had money and means and you had skills.

Yeah, at that point I moved to the campaign and was paid I think $ 65,000. Facebook stock was all …

No one feels badly for you.

No, no, no, I know, I’m just being clear. I talk in the book about when I actually sold some stock and didn’t make money and what a massive change it was, but in that period the move from Facebook to Obama was about the mission.

Yeah, you were at a startup, it was a startup, people forget. Yeah, absolutely. So, you did that, and then afterwards had done a range of things. I’m sorry to go back in history but people find your background interesting.

It’s fun.

So, you then went on to buy a publication, you did a lot of things, your husband ran for office.

He did, yeah. After Facebook went public in 2012, my husband and I made a commitment to give away the vast majority of the money that we made and to invest that money in causes that we believed in. I started investing in, really, multiple things, and on the one hand I started the journey to cash. That is how I sort of ended up writing the book today and talking about guaranteed income and universal basic income.

I also bought a magazine called The New Republic and decided to invest there because I believed two things. That the journalism that The New Republic had done for decades, nearly 100 years at the time, was incredibly valuable, important to the world, important to democracy and also deserved, in 2012, a bigger audience than it had historically had. I talk a lot in the book about my experience there because on the whole there are more things that I regret than …

Yeah, a little rocky.

More than a little rocky.

Those are real grumpy — I’m being polite — those are super grumpy journalists. I lived in Washington, I know those things.

Yeah, but I also came in guns blazing.

Yeah, you did. I know better.

I came in with the kind of expectation that if you invest a lot of money and you bring together smart people and you set really ambitious goals, you know, you can reach them. That’s what the first two experiences of my career had taught me. Between Facebook and the Obama Campaign they taught me that the impossible was actually a little bit more possible than one might think.

What was the big problem? You write about it, but what do you think the big issue … what’s your big mistake and that big mistake? I think it’s a group of people that doesn’t like the internet in general. Most traditional media, in my experience over the years, has been resistant.

Well, I think …

Or grudging would be [a better word].

If I were to do it all over again, I would take a different approach. I would not come in and say the kind of journalism that The New Republic has historically done is necessarily made for an audience of tens of millions of people. I came in really thinking that we could and should open it up to a much broader kind of audience.

Big ideas should have big …

Exactly, and I think at the end of the day I was maybe the last to learn what everybody else already knew. The New Republic had been a small kind of magazine.

Artisanal, we would call it artisanal.

Yeah, we had 35,000 subscribers and that wasn’t because … You know, it was because there’s a community of people who are politically minded, culturally curious, literary, etc., but that community is relatively small.

Maybe. We’ll see what Laurene Jobs does at the Atlantic, they’re doing a kind of conversation.

Yeah, well, the Atlantic has a different tradition, the New Yorker has its own. You know, each of these institutions are artisanal, they make up a category. But so rather than swinging for the fences, I think the institution would have been better served, the people I worked with would have been better served and the values behind it would have been better served if we had made more modest investments. If we’d said, “Yes, we’re going to have a good website that is in line with the values of the day, but we don’t need the best award-winning iPad app guys.” Like the slickest kind of technology content management systems, we probably don’t need to create a custom one from scratch, as we ended up doing. These kinds of things …

You’re the internet guy. Someone there called you a terrier to me.

What’s that?


What does that mean?

I don’t know, don’t ask me. I get those … I’m sorry, everyone in … There’s a reason I left Washington, and a part of it was the extreme distaste for the internet no matter what, even if it was a relatively good idea.

Look, you came in with … you did come in with guns blazing, and those people, no. When I was like, “No, no, no, Chris, stop, these are not the …” It’s like when Pierre Omidyar went into Intercept, at first there was like, “Oh, they’re real grumpy over there,” but it’s like, Laurene Jobs is making investments. There’s all kind of internet people making … Jeff Bezos — the Washington Post — seems to have done a very good job of that.

Absolutely, but just one last point on that. I do think it’s important, though, to recognize that the kind of journalism that all of these institutions do is really a public goal.


And this idea that the market … We have to find robust, for-profit kind of sustainable models for this journalism, maybe we will. There’s a scenario where we don’t and that doesn’t mean that it’s not important to support it.

Well, you have ProPublica.

Exactly, you do have ProPublica and Texas Tribune, you have some …

Yeah, you have rich people backing these things.

Exactly, and when I started … I see you sort of rolling your eyes a little bit. My initial response was a kind of skepticism, “Is that really sustainable?” But on the other side of my experience, I think that is in many ways the story of a lot of the high-quality media in the country.

The New Republic had not really ever turned a profit. It was technically a company but it was really … I mean, I have a line in the book, it was a cause dressed up as a company — and I think we culturally need to get a little bit more used to the fact that even if Jeff was losing an immense amount of money at the Washington Post, I still think that the journalism is important to …

Yeah, well, it’s interesting because … We’ll get to that, because you’re talking about rich people paying for something like universal income too. There is a duty of public service and maybe that’s the way it’s going to be paid for and everyone should stop bellyaching over it, you’re right. You know what I mean, on some level. So, what’s your relationship there now? None? Or you sold?

No, I sold the magazine to Win McCormack in 2016.

Well, that’s a name of a person who should own The New Republic. Sorry. Win McCormack?


It’s a perfect name. You have a good name but it’s not as good as Win McCormack.

Not quite as austere, right?

Yes, yeah. So you have had nothing to do, or do you imagine going into other journalism-type things? You had an interest.

Yeah, and my interest is still real. I’m focused on specifically income inequality. I have come to believe that where the most opportunity lies is in making the case for cash and specifically for guaranteed income for Americans who are struggling to make ends meet, so that’s what I’m most …

Well, we’re going to talk about in the next section. I just want to finish up with you, and then your husband ran for office. You go from one thing to … he didn’t win.

Well, that was him. That wasn’t me.

Yes, but you were involved in it.

Yes, it turns out we are married.

We are married, and didn’t win. Is he going to run again or is that it?

I don’t think so. He’s focused on something called Stand Up America, which is an organization that tries to channel a resistance to Trump’s agenda. It’s quite the understatement that the energy that the resistance has cultivated over the past few years is in need of organization, so what they do is connect the dots, and on Facebook, on Twitter, email, text message, I mean, you name it. It’s trying to make sure people are aware of what’s happening, particularly when it comes to the Russia investigation but across the board, and then translate that enthusiasm and energy into boots on the ground, door knocks and eventually, hopefully, into electoral victory.

Votes will be the thing. I just had an interesting interview with Cory Booker and I’m going to be talking to Chuck Schumer later today, but I think votes would be the thing that everyone needs to focus on beyond … and how to get people to actually step out and vote. That’s pretty much it.

Yeah, absolutely.

It’s just an understatement of how difficult that is, but it’s the only thing that’s going to change anything.

Then you move to this, this book and what got you interested in the income inequality. A lot of people out here, Sam Altman’s interested, there’s an experiment in Oakland, I think there’s one in Sweden. They’re all over.

We have one in Stockton.

Stockton, California, so talk about that. Your group has one, you are what?

My interest in guaranteed income actually started around 2012, and I came in through the international door to start. So my husband and I came into this immense amount of wealth, we made this commitment to give it all away, and so the first kind of …

And you could have done a lot of things. You could have done a lot of … like a family foundation.

The first kind of question is this like, what’s the most effective thing that you can do?


And so it seems like an easy question. It’s actually an incredibly complex one, and so we went on a journey — and I have a chapter in the book that narrates a piece of it — to think about where are we going to get the most bang for the buck? How can we help people in the way that is the most effective? And particularly from an international perspective.

I looked a lot at different things and ended up finding Michael Faye and Paul Niehaus, the two co-founders of an organization called GiveDirectly, and made a first gift of $ 100,000, which was literally texted to people living on less than a dollar a day in Kenya, and began a journey myself. And, so I came to the immense amount of evidence that cash is the most effective thing that you can do to improve health outcomes, education outcomes and lift people out of poverty.

So, giving the poor money is the way to make them not poor?

Indeed, and I learned that initially through the international lens, but then here, domestically, what I discovered is that we actually already have the world’s largest cash transfer program. It’s called the Earned Income Tax Credit. It’s called a tax credit, but what it actually is is a lived experience of … it’s a check that tens of millions of Americans get and it lifts more people out of poverty than food stamps, housing vouchers and unemployment insurance combined.

Now, it needs to be modernized, I would argue, for the economy that we live in today, not just the income inequality that we have but also the income instability that the gig economy has introduced. At the end of the day, though it’s once a belief that I had because of the empirical evidence that shows the effectiveness, and one that I feel like is a moral case, I believe that the best way to respect the dignity of people and embrace their freedom is through the most fundable thing.

Simple thing.

Through cash and the ability to chase their own dreams or figure out their own futures.

Cash or some kind of money. So, you got interested in it through that, just by giving?

Initially, and then …

What did you try with that concept? Because again there’s lots of … I’m assuming you get like pecked to death all day of what you should give to and how you can help people.

Yeah, and I mean my husband and I give to an array of causes, it’s not just Cash International. LGBT rights is another thing that’s important to us, we were active in the fight for marriage equality, but particularly when it comes to income inequality and ending poverty. When you’re on the hunt for what’s the most effective thing to do, one of the things that I’ve learned is that sometimes the best solution is the simplest. Of course we need more and better education, of course we need more small businesses to create good jobs.

We’ve spent decades thinking about those things, investing in those things, and we should think more. However, sometimes we overlook the most powerful tool or the most powerful weapon in the arsenal and in many ways the simplest, and I think cash can be that. So my hope, though, is to take the conversation a little bit out of speculating about whether robots are going to take all the jobs in 2040 and driverless car and situate it in the here and now, because income inequality has not been as bad as it is today since 1929.

Wow, that’s amazing.

Since the year the Great Depression began. I mean, the top 0.1 percent — not 1 percent, the top 0.1 percent — owns as much wealth as the bottom 90 percent combined. And so anybody who says, “Well, that’s just the way the economy works.” No, we have chosen the rules that structure this economy and we have the power to choose different ones, and I think a guaranteed income should be at the center.

All right, we’re going to talk about that more because it’s loaded with so many different things, politics with everything else, when we get back. We’re here with Chris Hughes, he is one of the co-founders of Facebook but his new book is called “Fair Shot: Rethinking Inequality and How We Earn It.” We’re going to talk more about that and other issues when we get back.


We’re here in the red chair with Chris Hughes, one of the co-founders of Facebook but he’s talking about income inequality because of his new book “Fair Shot: Rethinking Inequality and How We Earn It.”

We just talked about his background and how he got to this topic. Let’s talk some more about that because there’s so many things hanging off of income inequality. There’s all kinds of efforts. Talk first about your efforts that you’re doing in Stockton. How do you approach it? Because again, there’s lots of different thoughts about this and some people think it’s … I met someone the other day calling it communism, like, you know what I mean like, okay, yeah, kind of.

I think of it as capitalism with much better guardrails.

Okay, something like that.

The group that I co-run is called the Economic Security Project and what we are trying to do is convene a bigger, broader conversation about how a guaranteed income can work in America. There are a lot of people who are interested in UBI, how might this actually evolve, and there are a lot of people who want to think about what we can do in the next three years, what can we do in the next five years, so a shorter time horizon than …

This is to solve inequality problems right now?


Whereas there’s possible job loss, we’ll get to that.

Exactly. So what we do is we convene a network of academics, policy makers, technologists, artists, all of who are talking about, “How do we attack this?” And as part of that we move money. One of the things that we’ve done is work to support Mayor Michael Tubbs, who is the mayor of Stockton, California. For those of you who are listeners who don’t know, he’s 27 years old, he’s the youngest mayor of a major American city. He’s African-American from a city that is incredibly diverse. He’s the first African-American mayor there in generations and he is committed to exploring how a guaranteed income can work for Stocktonians in the here and now.

This is beyond payments from the government?

Specifically, what we’re doing is supporting a demonstration of the idea that will provide an income to some members of the Stockton community. The community itself will decide who exactly, how much money, the duration, etc. Community meetings are beginning this summer and disbursements are likely to begin in fall.

What does it generalize, I know that the community is deciding this, but there are standards right now growing?

Yeah, one place to begin the number, a lot of people talked about is $ 1,000 a month, others talk about more … in the book I call for $ 500 a month, making the case that modest amounts of money can really have out-sized impacts and go even further. The idea, though, is to invite more people into the conversation and move us out of just the realm of theory, might this be a good idea, into the practical, the here and now.

We have lots of research already from up in Alaska, where they have a small guaranteed income from the Earned Income Tax Credit. The Cherokee in North Carolina have a guaranteed income and not to mention the international stuff and so, yes, we need more evidence. And we’re hopeful that that will emerge, but the real focus is on the storytelling. And Tubbs himself as a leader has already just, in announcing this in the work that he’s doing, brought so many more people into the conversation both in Stockton and nationwide.

Who gets the money in your … That’s going to be decided, but in general who gets it? The poorest, correct? Or not? Or working families?

In Stockton, it will be decided by Stocktonians.

It’s not me that’s going to get $ 1,000. It’s not wealthy people. Or is there a level or should everybody get it?

In the book, I make the case that the best way to start with a guaranteed income today is $ 500 to everyone who’s making $ 50,000 on down. So, it’s a little bit different than a UBI. It’s inspired by the exact same values of cash, no strings attached, to achieve financial stability, recognize the dignity and freedom of each individual, but it’s a more modest place to begin. I make the case that we can and should do this through a modernization of the Earned Income Tax Credit.

Which goes to what level of people?

Right now, this is part of the problem. It’s so complex, you know, the people who get it, it depends on how old you are, how many kids you have, whether or not you’re married, what state you live in, what your wages were like. And, so what ends up happening is that people get, in many cases, quite a lot of money, between $ 500 and $ 6,000 a year, but because it’s not predictable, you don’t know where it’s coming, when it’s coming, how much you’re going to get. It doesn’t provide the fundamental financial stability, which in my view is …

Which is covering rent or?

That’s the problem that I see this is really trying to solve in the here and now. I mean, we know that jobs in America have already come apart. That is what the effects of automation and globalization in particular have done. All the jobs in the past 10 years that we’ve created, 94 percent of them are part-time, contract, temporary, seasonal. They’re the kinds of things that … Yeah, unemployment is near a record low, but the jobs that are out there are not providing the kind of 40-hours-a-week benefits …

Yes, and it’s going to get worse.

Sick leave, retirement benefits. And it’s very likely to get worse.

And then the elimination of some jobs with some of these technologies you’re talking about, some very … especially around automation, especially on self-driving, we don’t know, nobody knows.

That’s the threat that looms, right? Lots of people have predictions, but in some sense … My argument is, we don’t know exactly where the future is going to go and should have a conversation about where it might lead, but we already know quite a lot about what’s already happening to jobs and we need a guaranteed income to stabilize the lives of Americans who are working hard.

What if you’re someone that’s arguing against it, what is your argument against it?

The arguments I hear most often …

What’s the best one that you’d make if you were against it?

The one that comes up the most often is education, particularly in personal context for me. People say, “Well, you came from a middle-class family, a small town in North Carolina, you got a great education and you did super well for yourself, isn’t that just what we need more of?”

“You drag yourself up,” you drag yourself up from a modest background, right?

That’s the argument that a lot of people make. You know, on the one hand, of course we need better education. There’s no question that education in America, we’ve invested a lot of money in it and have seen some benefits but not enough and there’s an important argument to be made for more education.

But what I think we’ve often overlooked is that … Put yourself in the shoes of somebody who’s got a … Let’s say you’ve got a high school [diploma], you’ve been working in a minimum wage job. You want to go back and get retrained for really any kind of job. Right now, we say, “Well, clearly we just need more educational opportunities.” That person, though …

I’ll use this specific example. I was in Ohio last summer talking to people who were specifically in this position. They were working in minimum wage jobs, they wanted to get all kinds of retraining. You begin the conversation like, “Okay, but why aren’t you doing that?” So, first off, where are you going to go? Community college. The closest community college is 45 minutes away. You got to pay for the gas to get there and the tuition, yeah it costs $ 8,000. Well, you can get financial aid, it’s going to cost you $ 1,000. Mind you, as the backdrop, none of these people have savings. You know, half of Americans can’t find $ 400 in the case of emergency. Just from the beginning, you got to find $ 1,000 to pay for their education.

Now from there, if you’ve got kids, you’ve got to figure out childcare. How are you going to pay for that when you’re at school? And then if you’re working in a job already, you’ve got to make up for the lost hours and lost wages that you’re not going to have when you’re already living on the brink, how are you going to do that?

And then, even assuming you can figure out all of those things, when you show up for your class at 8:00 pm there’s an immense amount of evidence that shows that if you’ve already been working a full-time day, you’re exhausted and the likelihood of you being successful in that is quite low.

So my view is, of course we need more education, but let’s not overlook the power that cash has to open up the opportunities to be able to take advantage of the educational opportunities we create.

What about the current push by the Trump administration of, “These are lazy people and they have to work for their money.”

I think that’s preposterous. Not only does that not …

It’s out there in …

It’s a cynical argument that people make.

Of course it is, it’s awful and it’s cruel. Wow, cruelty from this administration. It’s cruel, it’s flat out cruel.

Yeah, absolutely. And I think it’s premised on perpetrating a myth. Specifically it’s this myth of the Welfare Queen, which was authored by none other than Ronald Reagan but is still permeating.

Lee Atwater did it.

Well, in the Reagan era.

Yeah and let’s give credit to Lee Atwater, who has died but frankly deserved a lot of credit for that.

It’s a myth that has been really problematic and really destructive. It’s racialized in the sense that it conjures up this kind of idea of people who just hang out and live on the … Now, of course, the evidence doesn’t show that. If you look at labor force participation rates for African-American women, for instance, and you compare those to white men, guess which group works more?

African-American women.

African-American women. So the data shows that that is not true, and when you actually get out there and talk to working people, you know, it doesn’t take much to actually see that that’s not true. But it’s a cynical kind of story that it’s in the interest of a lot of people in power to continue to [promote].

But that’s what they’re pushing right now around all kinds of things, is that you have to work to get welfare, you have to demonstrate that you can’t … It is never leaving our society, this concept of the lazy poor.

I am hopeful that we can turn a corner. It’s not going to evaporate tomorrow. I don’t want to overstate the case here but I do think that there is a generational shift that’s happening and specifically if we can broaden the definition of work that we use to really recognize what work is.

It’s sort of similar to what happened with marriage. In the marriage fight for LGBT people, for a very long time there was an argument about legalizing same-sex marriage as if it was like another kind of marriage, this thing that’s over here that’s different. And then when the movement shifted and started making the case that no marriage … What is marriage fundamentally about? It’s fundamentally about love and commitment, and love is love and marriage is marriage and we need to make sure that the definition of marriage matches love and matches the time that we live in. The definition of marriage quite literally has expanded over time to recognize the kind of marriage that my husband and I are in, for instance.

Similarly, with work, when we talk about work all the time, clearly a mom or a dad who’s staying home with young kids who are under … particularly if they’re under 5 or 6 and not in school, they’re working and we use the word “work” to describe what they’re doing. Similarly, people engaged in elder care, if you’ve got an aging parent at home, you’re working. And I make the case in the book that students, people involved in education, those people are working, too.

Of course.

If we can expand the definition of work to recognize what people are doing, what you end up with is recognizing the role that virtually every American is playing in society.

Except the people that are doing most of that work are people of color, women are doing two jobs, raising the kids, and we’ve got an issue of around white men essentially that don’t recognize that this is work.

And, they’ve been historically excluded. Like right now, I was in Jackson, Mississippi, three weeks ago meeting with a lot of young African-American moms who lived in public housing and right now many of them were … in fact, all of them were sufficiently poor that they needed the safety net kinds of benefits. Right now, our safety net says what you’re doing at home taking care of your kids? No, no that doesn’t count. You got to go over to Burger King and get a $ 7-an-hour job — and mind you for every $ 7 that they make they’re docked about $ 4 or $ 5 of government benefits that get reduced, so their actual per-hour earnings become quite small. In order to qualify for a whole host of benefits because that’s real work, but the work that you’re doing at home doesn’t count.

Well, there are those who say you shouldn’t have kids. It goes on, it’s a deeply ingrained racism and everything is …

I think it has to change and I think we have to start somewhere. This is going to be a long-term kind of fight because it does tap into big cultural questions. Again, I don’t want to overstate the speed with which this may happen, but I do think it is similar to something like the fight for marriage equality, which over the course of decades we did see a generational and cultural shift.

For the most part, for many. Although still there’s so much retrograde stuff going on.

Not for everyone, yeah.

You know, Chris, only gay people want to get married and go into the military, I don’t know if you know that. No, I wanted to go in the military, I did, I wanted to do both.

So once you start this in place what do you hope to … What is the goal? Is it to show success, show what … Or just watch how it works?

Well, I think we can start in cities and states and build a sense of momentum.

Everything is happening in the cities and states that matters.

Most things are happening in the cities and states, although I do think that … I can talk a little bit about the opportunity, too, at the federal level. In my view, we should begin today like what Mayor Tubbs is doing in Stockton. You could also do this at a state level, it will be a more modest size, a few hundred dollars a month, but we can begin now and see how it works, see how it changes the lives of people who are getting it. Again, we have a lot of evidence already to know but specifically …

How is it changing, people feel a little more relaxed, they can do …

People certainly feel more relaxed. The recipients of cash assistance specifically through the Earned Income Tax Credit, the kids do better in school. They stay in school for longer periods of time, they do better on tests. Health outcomes improve, people are hospitalized less often, there are fewer complications in pregnancies, people who receive the guaranteed income from the Cherokee as they grow into adults have fewer mental health issues.

There’s a lot of evidence about the effective care. And all this, by the way, is domestic, we don’t even have to go to the couple of hundred studies that exist internationally that show all kinds of other benefits, you know, domestic violence rates go down in many cases and all of it.

It’s intuitive, at the end of the day, if you have a little bit more financial stability in your life you’re able to live one step or two steps back from the brink. We’re not talking about so much money that everybody wins the lottery and we’re like all just, you know, hanging out, putting up our feet, whatever the worst images are that the critics conjure up.

Lazy, eating Cheetos. Cheetos is always involved.

So there’s a lot of evidence. Developing more of a track record at the city level and at the state level and then I do think long-term at the federal level. You know, we just saw a tax bill that got passed at the end of last year, which gave massive cuts …

That was Rich People’s Universal Basic Income.

Giving massive cuts to the 1 percent and to corporations and doubled down on what I consider a debunked theory of trickle-down economics. We’ve been doing this for 40 years and median wages have not meaningfully budged, and yet …

The rich get richer.

The rich get richer and they made a decision to double down on that. Now I think that there is a movement already growing to repeal and replace that law and to rethink it. And I do think that there’s an opportunity to put a modernized Earned Income Tax Credit, which essentially provides a guaranteed income for working people, at the center of that kind of bill.

Now, whether that will happen in 2021 or, I don’t know, 2025, I mean, who knows? So many things can change, but the cynicism that’s permeating our culture about change in Washington and at other levels is the biggest hurdle. We have to begin to think creatively and begin to organize on these ideas.

You know about Sheryl Sandberg’s, I think with the College Track people, giving them cash because they need it for rent. She has a thing where she’s giving away the people who are on College Track. They get money so they can pay the rent, they can do summer internships they couldn’t afford. She’s just giving them money like she …

This is a similar concept, because what happens when they go to college through College Track, poor kids don’t know how to dress, they don’t know how to network, they can’t take summer jobs that are easy. Sometimes their parents rely on them and so the concept is give them cash to pay for those things and give them an extra comfort.

I don’t know that much about it but from what you describe it seems to make a lot of sense. I do think people often ask, again, why is it that cash is so … I was on financial aid in college. Mark Zuckerberg and Dustin Muscovites, they dropped out and I was out here that first summer when they decided to stay here and I went back, and a lot of people say, “Well, do you regret that decision?” Because on paper it was the wrong decision from a financial perspective, and to be honest it wasn’t even ever really a decision for me because …

You had to go back.

Because the idea … I mean, if I were to be here, what am I going to do? Work at Starbucks all day and then come home to work at Facebook marketing? I guess I could have, but I was at Harvard and was the first of my family to have that kind of opportunity and so … Anyway, my point is this, a lot of people in college now have a guaranteed income and it comes from their parents — and my kid one day will have that too, so I’m in that category now — but a lot of other people don’t. We have a responsibility to even the playing field and to counteract how those generational cycles …

That was very important about your own experience there. They could afford to be startup people in a different way.

We’re here with Chris Hughes, he’s one of the founders of Facebook. He is very interested in income inequality with his new book “Fair Shot: Rethinking Inequality and How We Earn.”

The changing workplace, are you worried about … You’ve benefited from technology financially and have been part of the technology sector for part of your life. Are you worried about job loss or things like that because that could stress this system even more?

I am. Alot of people are convinced that artificial intelligence is going to create mass technical unemployment.

Well, it’s combined automation, there’s a whole bunch.

It’s automation, it’s artificial intelligence, exactly.

Economics, self-driving.

Exactly, it’s a combination of multiple trends. There are a lot of economists who think that’s crazy and I talk to a lot of them, too. Jason Forman, who played a prominent role in the Obama administration, has particularly carved out a play saying, “You know, in the long-term this is unlikely to happen.” I’m concerned about it but I also don’t … I’m not in the class where I’m here saying, “It’s going to happen, it’s a fait accompli, it’s a done deal.” It may or may not.

But what I do think the trends are very clear about is the increasing fragmentation of jobs already, and it’s the gig economy that is indicative of that — the Lyft drivers and Uber drivers — but it’s also the worker at Starbucks who can only get 25 hours and who doesn’t know next week if she’ll get 10 or 40.

Or when.

The idea that you need to be able to plan, planning is made very, very difficult.

That’s very important.

You’re constantly stressed if you don’t know you’re going to be able to make rent. Yeah, you have a job, you have some hours, but if you’re not going to get enough then you’re constantly living on …

You’re in a constant state of instability.

I worry about the wholesale job loss, absolutely, but I’m also personally really intent on making clear that wherever you fall on whether or not that’s the future or not the future, we already need a guaranteed income.

I think it’s interesting. Marc Andreessen is a big proponent of this, that in the end it will be like farming to manufacturing and we’ll have more jobs than ever.

The reason I’m so interested in it this past year — we’ve done a special on MSNBC about it, we’re going to do a lot more of them — is because he was saying, I said, “The blacksmiths, what happened to them?” and he goes, “I don’t care what happened to the blacksmiths,” and I was like, “Yeah, but they had families and something happened, something not good happened to those people.” Did they retrain?

There was social unrest during that whole period, there was enormous social unrest with the farming to manufacturing economy, and we forget because we’re a national of perpetually forgetting our history. It’s happened several times, these shifts in technologies, really.

And people make the argument, too, around not just retraining but mobility. Well, yeah, the blacksmiths of today, they should just move to where all the jobs are.

Who’s going to teach them? I just want to know who’s going to retrain …

The average move across job lines cost over $ 5,000 and half of Americans can’t find $ 400 in case their car breaks down, so this idea that you’re just supposed to pack up, turn off the lights and magically move to a place where housing alone is probably five times as expensive as where you were before, it’s crazy.

I think I want to get to the idea of this 1 percent, not just the fragmentation but the wealthiest concentration of wealth moving higher and higher up to a smaller and smaller amount of people. Because I firmly believe there’s a group of people at the top who have benefited from the future. At the very top, the obscenely wealthy love the future, they will be able to change, they will be able to afford it, they will be able to teach themselves, they’re interested in teaching themselves.

Then there’s a vast group of people in the middle who like the future, are scared of the future, and this group on the top is not pulling them up and presumably they would pull the ones below them up further, but there’s no pulling up by the wealthy here. Here’s you saying that the 1 percent should pay this. We’ve just had a tax cut where the 1 percent got paid. What do you imagine this … why the 1 percent doesn’t have this duty to take care?

In San Francisco, it’s the same thing. You can see the streets right now and it’s hard living here with people doing drugs on the streets, you are like, they’re lying on the streets doing drugs in front of my house. This is not good as a taxpayer and you feel badly for feeling that way too, but most people don’t feel badly about thinking about people in that way.

Well, I think a lot of the people that I talk to are cognizant of a sense of responsibility they have to other people. It’s in San Francisco, it’s in New York. I’ll paint with a broad brush and then I’ll be a little more specific about what I mean. I think that there is a sense, particularly amongst people who have been successful in technology, that the rewards that have come are very much historically unique.

I mean, we’ve never lived in a time where 20-year-olds are able to go from zero dollars to hundreds of millions of dollars, billions of dollars, before. Royalty is like the closest thing, hundreds of years ago, and so that is … I do think that there’s a widening sense that something is happening in the economy that makes that possible, and it’s happening at the exact same time that everybody else is having a hard time making ends meet.

That middle group that you’re discussing, those folks have not gotten a raise in 40 years but the cost of living is 30 percent higher. I do think that there’s increasingly a sense of responsibility. Now that’s probably more on the left than on the right, but my hope is to appeal not only to a sense of moral responsibility but also a sense of pragmatism. And by that I mean what we know about what creates long-term economic growth is that consumer spending is the biggest driver of that, and if you put $ 100 in the pockets really of anybody in your description there, anybody in the middle or at the bottom, they’re going to spend most of that money on whatever is most urgent for them: Housing, health care, education.

You put $ 100 in the pockets of the 1 percent, we know it goes into a bank account. It goes to work in complex financial moves but it’s not part of the productive economy. There was a study that the Roosevelt Institute did last year that modeled out, if you give $ 500 for guaranteed income to every American, what would happen to the economy? And the model shows that over the next eight years GDP would grow by 7 percent.

Based on just that amount.

Based just on that amount. And so my argument is that I think in the long run a guaranteed income is good for everyone, certainly for the middle class and the poor who need the funds the most, but it should also be good for …

The producers, the wealthy.

For the wealthy as well because it creates a kind of broad-based economic growth.

Just specifically to talk about the pay for a moment. I think tax rates on income of $ 250,000 and higher should come into line with their historical average of 50 percent. That’s where they were for much of the 20th century, for the decades after the Second World War really up until 1980 ,that’s in line with where they were. And it just so happens that that’s the period when economic growth was not only the biggest but also the most broadly shared and we had plenty of innovation, plenty of smart people starting all kinds of new companies. The idea that if taxes were higher on that income that we wouldn’t have started Facebook, that’s just not true.

It’s nonsense.

And the way that that would play out is because it’s income above, if you’re making $ 300,000, which in some parts of the country definitely makes you wealthy but not, let’s say, a part of the winner-take-all. What you’re talking about is a few more like $ 7,000 more in taxes to fund a guaranteed income. If you made $ 10 million, well, what we’re talking about is your tax bill would be $ 1.5 million higher than it is today, and it is my view that that is more in line with where our finances should be in. We can and should ask the members of that 1 percent to be footing the bill, to make sure that everybody else can enjoy the economic opportunity …

You’re with a group of people in tech who talk about that but I deal with a lot of people from Wall Street and stuff like that and I am always astounded by the continued greed of incredibly wealthy people.

I think it’s short-sighted. I think in the long-term it’s …

I would agree. I was talking to someone who is enormously wealthy, really, they were driving me crazy and I finally said, “You know, you’re so poor all you have is money.” Like, “I don’t know what to say.” He was so insulted. He was like, “Why could you say that to me?” I’m like, I just, “You’re so poor, I just don’t know how to explain it to you. You’re just …” It’s astonishing.

I’m constantly surprised by it when you get to a certain level of income and you can’t understand because you know you don’t want to give it to government, the government is somewhat incompetent. Like, “I don’t want to give it to those bozos to hand out.” I feel like when I pay … I pay a lot of taxes and I’m like, “I don’t want to give it to those crazy military people,” like everybody has a thing.

That’s why the Earned Income Tax Credit is the structure that I’m talking about using to build the guaranteed income. It has historically been really popular on the right as well as the left.

I would like to give it to regular people. Yeah, I’m good with people just getting cash.

Every president in the United States since 1975, Republican and Democrat alike, every single one has meaningfully expanded the Earned Income Tax Credit. And it’s for that reason, not only because of the evidence it shows that it works but because there’s a sense that on the right …

Also, it’s a good gimme, it’s a good gimme.

Well, I think there’s a sense on the right that we should put the money in the hands of the people.

The people’s pockets.

Of people who can figure out how to use it themselves.

That was the argument for the tax cuts.

Well, but in that case it’s for the 1 percent, not for …

Didn’t you hear Paul Ryan, didn’t you hear what he …

Well, talk about a cynical kind of … I mean, every non-partisan analysis of the tax bill shows that there are massive disproportionate returns to the 1 percent, not to …

I like that you’re saying, “Talk about cynical,” at this moment in history.

So, let’s finish up, we only have a few more minutes. Talking about politics right now, you’re in … how do you look at the political scene? Your husband is working on the resistance and Facebook has gotten smacked hard. You don’t have to just talk about Facebook but, please do Twitter, Facebook, Google, YouTube?

Well, I mean, so many things. I think the news coming out of Washington, it’s hard to imagine it being more depressing. However, I do think that Trump’s election has been a wake-up call on the left and the right that a lot of people feel that the system is rigged against them and they are willing to embrace a very, very different perspective. It’s scary when Trump is in the White House pushing the policies that he is pushing, but I think the opportunity is, people are open to kinds of crazier kinds of ideas. Guaranteed income a few years ago was on the fringe. I think it’s increasingly becoming part of the mainstream.

I think, though, that we’ve got to counteract the sense that things are just going to always be the way that they are. The economy is going to always be the way it is, so politics is always going to be the way that it is and there’s a lot of evidence in the enthusiasm on the left. You know, you look at the Women’s March, this march that’s planned in a couple of weeks around gun violence across the country. There are a lot of reasons to be hopeful. As you said at the top of the conversation, votes matter, and what happens this November and then in November of 2020.

The only people that are voting are … thank goodness for African-American women. That’s it. The rest of them, millennials, I want to smack them upside the head.

And specifically Facebook. I think Facebook is increasingly recognizing the responsibility that it has.

Slow progress.

Slowly but increasingly and overdue.

Yeah, sorry about that American democracy problem. But, I mean, it was slow.

It was slow, absolutely.

We were all screaming about it a year ago and they just, they slowed all this all the way to today.

It has been slow. But I think what’s happened …

Why is that? You worked with these people.

Oof. I would speculate about that just as much as you or anyone else. I think that there was a sense that Facebook as a platform was a kind of neutral algorithm. It’s just a thing that works in the basement. It’s like, you just surface things and there’s nobody …

I’m giving you my “Mm-hmm.”

When in reality, I mean, humans make the decision about how these algorithms work and right now we are seeing a different approach from Facebook.

You think they’re taking advantage of that?

With local news in particular, I find that the initiative around local news that I have … I mean, I haven’t talked to anyone at Facebook about this. I’ve read the journalism that you’ve done and many others have done to be some of the most interesting. They’re specifically working with a dozen local news outlets to do two things.

One, to help them understand how to surface their journalism to bigger and broader audiences on the platform but also to adjust the algorithms to make sure more people see it. Which is really remarkable, right? Because it is a normative statement that local news matters and is important and that specifically Facebook has a responsibility to ensure that people see it. Now is that going to be enough? Absolutely not, we’ve got to think about foreign powers meddling in the election.

Why didn’t they see it, weren’t geniuses what … I mean, I’m being reductive there but you know what I mean.

Your guess is as good as mine on that. I think that they’re turning a corner now and are focused on …

An understatement. I literally was just in an argument on Twitter with the head of ads who was like, “Well, it’s not our fault.” I’m like, “Stop, just stop talking.”

What was he saying?

He was saying that it wasn’t truly their fault.

“It” being the Russian stuff.

The Russians. I think I just said, “Hush. Stop talking. Just stop, please.”

Yeah, I think it’s very clear. I mean, you have a responsibility to make sure foreign powers don’t hack our elections. And the problem is, okay, well, how do you define “hack”? But propagating fake news on a platform to support one candidate over another is a problem.

Well, you know, the thing is, to their defense, it’s a company, not a government fighting a government. I know, but it’s a government, right? You made a face.

I mean, it’s a company, but this idea that companies don’t have responsibilities, that’s just not my worldview.

Oh, yes, of course, but I’m saying our government didn’t intervene. Well, you know these companies can’t do it by themselves, this has got to be an effort …

Well, yes, government has … I mean, if I’m talking about the …

Not the Trump government. The Obama administration certainly had a responsibility here to be more active.

Absolutely. And I am worried about the election this fall. We have evidence to show that the Russians in particular, it’s very clear, tried very hard to hack the voting systems in several states, and we have not made … I have seen no progress from a federal perspective in making sure that these elections are going to be safe and secure. There’s been some media coverage of it, but frankly, I think there’s been more media coverage of Facebook’s role than the imperative for a stronger security system. And clearly, we need more coverage of both. I think on all of this, we need to be talking about it all much more robustly, because this problem is not going to go away.

Well, this particular administration is so cynical, it’s a disturbingly cynical administration, which doesn’t mind creating havoc. In the end, it’s a group of people that love havoc and are also not very smart.

Well, but to say that sort of suggests … I mean, we have a responsibility, democracy, whatever your politics, democracy … In the democratic system it’s the responsibility of people in power to govern and defend it.

Of course, but you know, we have a president who just joked that it was good that the Chinese … I mean, you know, like, come on. It’s so funny because it’s sort of like …

Well, let’s just not excuse that, let’s not be …

I’m not excusing it.

No, I’m not saying you are, but we just can’t have this air of resignation like, “Oh, they’re just crazy and nothing is ever going to happen.”

They’re not crazy-crazy, you know. They’re not crazy, it’s just that it’s impossible to do anything when good people don’t stand up. And I’m talking about the Republicans most of the time because it’s the enablers to me who are the real problem now, which is interesting, but this will be done by voting. Chris, when do you imagine you have — we’re going to finish up — when do you imagine success for this?

The more this idea is talked about in the mainstream, not just in political conversations but around dining room tables, over coffee and over …

And how you put out there, of course.

I think that’s success in the short term. In the long run, clearly, we want public policy to change, but success in the next couple of years will be people talking seriously about how can get a guaranteed income done in one way or another? Maybe through the Earned Income Tax Credit, maybe through other kinds of ways, but the more we’re rolling up our sleeves and thinking about, “How do you guarantee financial stability through cash?” That’s the success in the near term.

You have actually convinced me. And now I’m thinking about definitely, you know, some scenario I’m interested in. You know, I agree you, I think giving people … Listen, I’d rather that than the latest tank or the latest whatever the hell our government is spending money on. I’d rather give it to average people who need a break, which would be nice so they can get to one among our many, many, many problems in this country.

Anyway, we have a lot of great things, too, and our generosity, although some people don’t agree with it, would be one of them. Chris, it was great talking to you. You’ve had a fascinating career since you stopped funding like fancy magazines. This is much better than the fancy magazines, and people who hate you no matter what you do just so, yeah.

I’ll say, “Swisher told me to do it.”

I could have told you that Chris, “Just give away money to people who actually appreciate it,” but buying a media company, still. I don’t know which one you should buy, but you should. I appreciate the effort.

I think I’m out of that.

You’re out of that business, no more Chris Hughes. Is there even one for sale? I don’t know, there’s always something for sale, Chris. It was great talking and thanks for coming on the show.

Recode – All

Cash For Apps: Make money with android app

Full transcript: Senator Chuck Schumer on Recode Decode

How Complete Beginners are using an ‘Untapped’ Google Network to create Passive Income ON DEMAND

The Senate Minority Leader talks about Amazon, net neutrality and why you can’t negotiate with Donald Trump.

On this episode of Recode Decode, hosted by Kara Swisher, Senator Chuck Schumer, D-NY, talks with Kara and Democratic strategist Hilary Rosen about a range of tech-related issues, including immigration, net neutrality and Russian election meddling.

You can read a write-up of the interview here or listen to the whole thing in the audio player above. Below, we’ve also provided a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

Kara Swisher: Recode Radio presents Recode Decode, coming to you from the Vox Media podcast network. Hi, I’m Kara Swisher, executive editor of Recode. You may know me as the creator of the popular Facebook page “100 Percent American Patriot News, Definitely Not From Russia, But Don’t Look Too Closely. In my spare time I talk tech, and you’re listening to Recode Decode, a podcast about tech and media’s key players, big ideas and how they’re changing the world we live in. You can find more episodes of Recode Decode on Apple Podcasts, Spotify, Google Play Music, or wherever you listen to podcasts, or just visit recode.net/podcasts for more.

Today I’m joined once again by democratic strategist Hilary Rosen, who regular listeners may remember co-hosted a month of political episodes with me last year. One of the people we wanted to talk to back then was Senator Chuck Schumer, he’s the senate minority leader and the senior United States Senator from New York, obviously, and he’s joining us today from Washington, D.C., for a shorter Recode Decode, but we’re thrilled to have him. Senator, welcome to Recode Decode.

Chuck Schumer: Kara, great to be with you, I’m looking forward to it.

KS: We have so much to talk about, we could talk for hours, I’m guessing. Let’s go right into it. You’ve been in the Senate for 20 years now and the leader for one. I’d just like to know what the biggest difference … you’re in an administration that’s quite active too, so why don’t you talk a little bit about that?

Okay, well I’ll tell you a story. I like stories. Abe Lincoln said, “The best thing a politician can do is tell stories.” It’s election night, 8:00 pm, I see the exit polls of college-educated women, North Carolina and Florida, the first two states to close, and I go, “Oh, boy.” I call up Hillary’s chief pollster, strategist, guy named Benenson, he says, “Don’t worry, our firewall in Wisconsin, Pennsylvania and Michigan can’t be broken. There’s no way Trump wins.” Of course, he won, and the next morning just by way of reference, Paul Ryan called me up, the Republican Speaker, and I just happened to ask him, “Well, did this come a surprise to you, Paul?” He told me this story, I hadn’t told him the 8:00 pm story.

He said, “I called up our chief pollster at 6:30 pm, he said, “Sorry Paul, Feingold’s going to be your new Democratic senator in Wisconsin. Schumer’s going to be majority leader, Hillary’s going to be president.”

Okay, I am distraught, my wife is distraught, my big daughter is most distraught, because she had worked in the Hillary campaign and had her job picked out in the White House. I taught them the old Shirelles song, some of you will remember this, “Mama said there’d be days like this,” and I moped around in my house for two days. I’m not a moper.

Hilary Rosen: As did the rest of the country.

The third day, I had an epiphany, almost a message from the heavens. It went like this: “Chuck, stop moping. If Hillary had been president, your job would be easier, it would be more fun, and you’d get some good things done. That’s why you’re there. But with Trump as president and you as minority leader, your job is much more important.” That has fueled me the whole way through. This is the hardest job I’ve ever had. Much harder than just being senator, particularly with Trump as president. I worry more in this job. I wake up in the morning and I have three or four things I’m always worried about. I’m not a worrier, I never used to worry, but I love it more than any job I’ve had because what we’re doing is so vital and so important to saving America.

KS: How is your frenemy relationship going right now? You were down with immigration and sort of up with Dreamers then down with Dreamers, and it goes back and forth quite a bit. Where is it right now? How do you characterize it? Because I can’t tell what’s happening there.

He likes to talk to me. He calls me up, but I’m right in his face. He said to me when we were debating immigration, “Everyone loves the wall.” I said, “Mr. President, 35 percent of the people like the wall, that’s your base. If you keep just appealing to your base, you’ll never be re-elected and you won’t be a good president.”

I said to him time and time again, “You’ve campaigned when you ran as a populist, and against both the Democratic and Republican establishments, but you’ve embraced the hard right. The hard right is so far away from not only where the American people are, but even most Republicans. You’re going to be an abject failure as president. You ought to change.” I talk to him like that, and he keeps calling me back.

HR: Do you sense you’re one of the few who actually does talk to him that way?

I think I am one of the few. Most of the people around Trump seem to be in the sycophant mold. That’s not quite my nature.

KS: Let’s ask about Dreamers though, where are they now? You were getting along with them, you had that lovely, I don’t know, lunch or whatever it was, dinner. This was supposed to be the easy one and it hasn’t passed, obviously. That’s a concern here, immigration issues are a major concern in technology and the technology sector.

Of course, of course. Well, we need immigration in tech. I’ll tell you an interesting thing. When McCain and I did the 2013 immigration bill — which passed the Senate with 68 votes but the Tea Party stopped it in the House, Boehner was afraid to bring it up even though it would have passed — but we put on the legislation, where of course there was a path to citizenship for the 11 million. We also said that any foreigner who studies STEM — science, technology, engineering or math — and gets an MA or PhD at one of our universities gets a green card stapled to his or her diploma.

That would have been such a shot in the arm for tech, and still today, I’ve nurtured and helped the New York tech industry, which now doesn’t need much nurturing. We’re No. 2 after California. When I asked them what their complaints are, it’s still getting talent and how many people from overseas want to come here and can’t.

With Trump, in answer to your question, I said afterwards, negotiating with him is like negotiating with Jello. I try when I’m negotiating to put myself in the other person’s shoes. I knew Trump wanted his wall. I hated the wall, but I felt, we all felt so desperate to help the plight of the Dreamers, that we were willing to give him not the cutbacks on legal immigration, which involved humanity, and not interior enforcement, and not sanctuary cities, which would hurt lives, but this physical structure of the wall, which I believe never would have been built.

To build a wall in the 60 miles that he first wanted to, you needed 982 eminent domain cases. Anyway, we gave him what he wanted but he couldn’t take yes for an answer. We sat at the table, myself, I insisted it just be his chief of staff, Kelly, my chief of staff, Mike Lynch, him and me. I didn’t want Miller there or Cotton or anybody else; these anti-immigration people. Basically, we didn’t shake hands on a deal, but we said this is the parameters of a deal, we think we can both accept it. Immediately he talks to Miller and Cotton and adds all these unacceptable things. You can’t negotiate with him because it’s like Jello.

KS: What happens now then? Where are the Dreamers? Where is immigration? This is wending through the courts and everything else. What happens?

We meet regularly with the Dreamers and the other groups that have been with us through the battles on immigration. The first thing we’re doing is urging Trump to simply extend the date. He caused all this problem.

KS: He created the deadline.

He created the deadline. He can lift it tomorrow. We’ve said that to him. If he doesn’t, we will then have to see, in this omnibus bill that comes up March 25th, if we can get something in that’s positive for Dreamers and extends the deadline. The problem has been Paul Ryan. Not so much the Senate, although some — and you saw the vote in the Senate even on our bipartisan bill — but Ryan has been very negative here but he’s feeling the heat from two places. One, the deportation, the breaking up of families, just the total nastiness of this administration to Dreamers is just an issue that strikes the heart chords of America.

Second, he’s got 30 or 40 so-called moderate Republicans in suburban districts, and those districts are putting heat on those people to say, “Do something.” Now in the past, unfortunately, when the hard right, the Freedom Caucus, says jump, Ryan says, “How high?” and that’s what’s tied us in a knot. But maybe he’ll feel the pressure this time.

KS: We’re going to take a quick break now for a word from our sponsors. We’ll be back in a minute with Senator Chuck Schumer.


HR: There’s such unanimity among Californians and in the tech community and maybe on the coasts to support the Dreamers and to support some immigration bill. There was this perception after the budget at the end of last year that maybe Democrats didn’t use all the leverage that you had to try and do something. Do you think that’s because the politics of immigration aren’t really the same way that Californians or the tech industry perceives it?

That’s certainly true, Hilary, but I remind people, we’re playing with a pair of fours. We have a Republican president, a Republican Senate, a Republican House, led by a Republican party that is the most anti-immigrant we have ever seen in the history of America. We can pressure as best we can, but we really don’t hold the cards. Democrats hate to shut down the government. We hate it. We like government. We’re not like the Republicans. The only time we’ve ever done it has been for Dreamers. We put the issue on the table. We came real close in the bipartisan vote where he got the piece of the wall, which I think would never be built. We got a really good bill on Dreamers, not just 700,000 but close to two million citizenships for them.

Then Trump lobbied against it. The Republicans backed off, so at some point we’re going to have to go back at it again, and we will, but we got to call our shots because we can’t just pound our hand on the table and say, “It’s going to get done.” One reminder, if all of those who support Dreamers, Dreamers themselves, the Hispanic community and all those who support it, if we take back the majority in House and Senate, it’ll get done like that.

KS: You’ve got this pair of fours you’re carrying around. Net neutrality, explain what you want to do here and why you think you can be successful. This is another issue. Ajit Pai runs the FCC.

Well first, I feel really strongly about net neutrality. Like building highways, in the 21st century the net is our highways, and if we were, as a country, to have tolls everywhere and say rich people could use the highways and poor people couldn’t, middle-class people couldn’t, startup businesses couldn’t, we never would have gotten to the place we have here as such a strong economy. It’s the same exact thing with the net.

I really resent these ISPs. I talked to them. They came in and made the case, I felt more strongly for net neutrality after they came in than before because it’s clear they want to maximize their profits by squeezing people who don’t have much power and acceding to people who do.

We feel very strongly about this. This unites our caucus from the most liberal to the most moderate. The advantage we have here, which we didn’t have in immigration, is since it was done by regulation, by Pai, who I think is a horror as head of the FCC — I’m not supposed to use such a strong word. Let me strike that and say …

KS: Horror?

… a very bad leader.

KS: I can think of bigger.

As the head of the FCC. We’re allowed to bring to the floor within 60 days of them passing this regulation a motion to overturn it, and it only takes 51 votes. We now have all 49 of our Democrats. We’re 49 since Doug Jones from Alabama joined us, and one Republican, Susan Collins, so we’re at 50. We get one more Republican to support what’s called CRA, Congressional Resolution Act, to overturn Pai’s regulation on net neutrality, it passes.

We are urging strongly our friends throughout America to email, write, call, picket, protest their senators, particularly their Republican senators if they’re in such a state, and say, “Support the CRA to restore net neutrality. Support restoring net neutrality.”

I remember SOPA and PIPA. We had millions of people emailing and protesting and we succeeded in beating it. We can do the same thing here. We’re trying to rouse the community.

KS: Are you working with the big tech companies to do that?


KS: Who are you working with?

Yes, we’re working with the big tech companies, the little tech companies. I was on the phone today with the head of the Internet Association asking him to get all of his membership, which goes all the way from the biggest tech companies to the others.

I put in a call to someone I know, Reed Hastings. Netflix users will pay a lot more money if this happens, and they might get slower service too. I’d love Netflix to, any time you subscribe, to just have a little chyron on there and say, “Write your senator. Don’t be charged more for your movies.” We need to get all of our tech providers, big and little.

I spoke to Fred Wilson today, who’s one of the funders of tech in New York. We’re trying to get the whole tech community to rally the way they did with SOPA and PIPA. Folks, a lot of it depends on the employees in these companies. If they tell their leaders in their companies, “Please get onboard here,” that’s going to help too.

HR: I think one of the reasons this becomes different than SOPA and PIPA is that there really are customers on both sides of the equation here. When you look at Netflix or Amazon or YouTube, they take up 75 percent to 80 percent of all the bandwidth on the internet, and then these telephone companies feel like they’re subsidizing those businesses, but both of them charge customers, right?


HR: Netflix charges customers more anyway, right?

Yeah, it’s not the fight between Netflix …

HR: It’s money versus money.

I want to be for the people, for the average person. This is going to cost them more because Netflix won’t reduce their prices, but the cable companies and the ISPs will raise their prices.

KS: Also, Netflix did do a deal with Comcast, so a lot of people felt like they backed off the fight after they got theirs.

It’s not just Netflix, it’s a whole bunch of companies that should do this.

HR: Do you think if you got 51 senators that that would lead to compromised legislation, or do you just see it as just a fight at the FCC?

I’d like to keep fighting. I am very leery with a Republican controlled House and Senate of legislation this year. Again, if we get back the majority, I’d like to do good legislation and force Trump to sign it. I’d make one more point here related to this and everything else. The M.O. of our Republican colleagues — I’m sorry to sound partisan here, but these are the facts — they always side with the big interests over the average people. That’s certainly true here in net neutrality. Average folks will pay more. New startup companies, Fred Wilson, who I talked to, who’s funded a lot of the startups in New York, they’re petrified because their larger competitors will get better rates than they do.

If you’re a new company, a new startup, that’s going to kill you. They are siding with the big special interests — surprise, surprise — and we’re trying to help the average people. The good news here is because this was a regulation that was passed in the last six months, we have the ability on our own with a couple of Republican votes to overturn it, then we’ll have to go to the House. But I think if we get people to rise up the way they did with SOPA/PIPA, there were two sides there too. There were the companies, the content providers and the tech community on one side versus the other. If we get people to rise up, we can have the same positive result. A lot of Republicans on SOPA and PIPA who never wanted to side with average folks were forced to.

KS: Can you walk us through, when it passes, what happens? If it passes, you get that extra senator, is there anyone you’re targeting? Then what happens?

Well, we’re targeting everybody right now because it’s just starting. We have 60 days from last Thursday, so we have a long time. We’re going to have days of action where we build things up. There’s a discharge petition, that’s a technical thing.

I just had a meeting of seven or eight senators, Senator Markey, Senator Wyden, Senator Cantwell. People have been very involved in this issue. We’ve divided up the heads of the big companies and calling them. I’m going to do calls with every New York college newspaper to get them to write about it. We’re just starting to rally here. And hey, Kara, it got me on your show.

KS: Yeah, that’s true. Fair point.

HR: You think the politics of this work for Democrats?

Absolutely. Here, I want to say something interesting here. It’s a little broader but it’s related. Our secret weapon to win back the House and Senate, we got a few, but one of the top ones, probably the top one is the millennials, the 18 to 35. These are the people who know tech the best. They’re going to be the largest voting cohort this year.

I’m a baby boomer. I was born in 1950. My children are the millennials. They’re 28 and 32. They’re the largest voting cohort. They’re overwhelmingly Democratic, all of a sudden. Four reasons I want to mention, and this is very nice. It gives me help. Oh, let me tell you, Hillary only won millennials by plus seven.

In the New Jersey governor race, millennials went by 41 points for the Democratic candidate, in Virginia 38 and in Alabama, where we won that senate race, the millennials and the African-Americans were our two secret weapons and we won by 20 points. Millennials in Alabama. This is a big deal.

Why are the millennials so for us? Four reasons in ascending order of importance, and this is going to give you faith in America. Fourth, college. They want help with all the burden of all these student loans they have. Third, environment, green. These folks are very green. Second, freedom. Net neutrality, decriminalization or legalization of marijuana, the freedom to do what you want, and net neutrality is way up on that list because it gives people freedom to pursue things on the internet without too much cost.

The No. 1 reason, bigger even than net neutrality and bigger than all the others, is this — and this one came as a surprise to me. The others are sort of intuitive. The younger people hate the bigotry, the smell of discrimination that’s coming out of Trump and the Republicans. The anti-women, anti-black, anti-LGBT, anti-Hispanic, anti-immigrant, anti-Muslim.

I thought about it after I learned this and, very interesting, at my wedding, 1980, to my wife, not a person of color was at our wedding. There were probably gay people but we didn’t know they were gay. They wouldn’t tell us in those days. My daughter’s wedding a year and a half ago was like the United Nations. Not because she was picking and choosing. That’s who she went to elementary school with, high school with, college with, works with, has friends with.

What we’ve learned, Kara, this is so interesting, on the coasts, they would call it bigotry. In the middle of the country, even high school educated kids, women more than men because they’re more sensitive to discrimination, would say, “We don’t like the way they’re dividing us.” When you think about it, almost every group of friends has a black, has a gay, has women. When Trump picks on them and the Republicans pick on them, they tell their friends, “I don’t like this,” and neither do their white male friends.

HR: True.

This is our future.

HR: That’s the “Netflix and chill” tweet that you’re …

Yeah, that was Netflix and chill.

HR: We’re going to get some Netflix and chill and maybe slow this down.

I want to confess, I didn’t know what chill … I knew what chill meant in my generation, which means the opposite of what Netflix and chill means today.

KS: In the #MeToo movement, let’s not go down that road. We can talk about #MeToo in a second. I want to touch on a couple things: Guns.

I have a great #MeToo story, okay?

KS: All right, go ahead.

I’ve been an advocate of #MeToo.

KS: I do want to get to guns, midterm elections and Russian bots. Go ahead.

We will. When #MeToo came out, my mom, I haven’t told this publicly yet, but I’m going to do it here. She’s 89. She told me just in October the following story after #MeToo started. She was 17 years old. It was 1945. She was on the diving board at a camp where she was a counselor, and a parent of one of the kids at the camp, who was a big deal in her neighborhood, he owned jewelry stores. I’m going to leave out his name, even though he’s dead now. He grabs her from behind and pushes her into him. She says, “What are you doing, Joe?” She jumps off the diving board.

She goes into the changing room, which is an open co-ed changing room. He comes behind her, takes down the straps of her bathing suit and says, “Turn around, Selma,” and she turns around, he’s naked. She runs out of the changing room and goes back up and she tells — this is the part that really was amazing to me, even worse or as bad as the previous part. She told her mother, she told her father, she told her grandma who she was close to. They said, “Don’t tell anyone. They’re going to blame you.”

That was in 1945. Just about every woman has had stories like this or a friend who has stories like this. I tried to explain this to my male friends, colleagues, that men just don’t understand it because they’ve never experienced this, but so many women have. It took the #MeToo movement for my mother to tell me this story, whatever it is, 44 years later.

HR: God bless her. And her voice.

Isn’t that amazing?

HR: God bless her.

KS: It’s not surprising to women, I think. Everybody has a story, especially in tech. Everywhere. Every sector. There’s not sector of the U.S. economy that it hasn’t affected, at work especially and everywhere in their personal lives.

We’re going to take another break for a word from our sponsors. We’ll turn to Hilary Rosen and my conversation with Senator Chuck Schumer after this.


I want to get to regulation in big tech, because one of the things people feel that tech has — especially social media — has become weaponized and coarsened our culture. Obviously Donald Trump is really talented at Twitter, whether you like it or not, but he’s good at it. A lot of people feel that there needs to be regulation of big tech on lots of issues, from tech addiction to fake news, antitrust, advertising and transparency. Democrats, which used to be the supporters of tech, are now much more negative on it. Do you feel that way or do you feel that the regulation’s necessary?

I think it’s a very difficult question. First, let me say this. The people who most want to undo tech is the hard right. Donald Trump and the hard right do not like anything stated against them. They all watch Fox News, which is totally biased. Any time there’s groups that can talk against them, agglomerate against them, they don’t like it. The left is mad at tech for reasons, but it’s not the same. I have no doubt that the hard right and Trump would like to undo tech as much as they could, even though he uses Twitter.

Now a broader issue. For a decade, tech was a great, great thing. It allowed people to agglomerate. It allowed people who had no power, who didn’t own a newspaper, who didn’t own a TV station, who didn’t have a megaphone, to get together and have power. We would not have the guns movement. I have some optimism on guns, but only because online we’re going to have, they have five million they hope to get in Washington on the 24th against the NRA.

KS: The gun march.

Wouldn’t have happened without the net and without a big, broad, powerful internet. That’s true on immigration. That’s true on the issues. We Democrats represent average folks. Tech gives us the advantage. We don’t have a Fox News. We don’t have Rush Limbaugh who gets 20 million people a day. It’s our antidote. I am sympathetic.

Now because it’s so open and so free, lots of dark forces have taken advantage, and I certainly think tech has to modulate itself. One easy example for us in politics, all ads should have to be made public, who’s paying for the ads when they’re political ads, just like you have to do on television or radio, and I don’t know why big tech resists that.

HR: The Warner Klobuchar.

It’s the Warner Klobuchar legislation. There are probably other changes, but I think you have to be careful. Government regulation of speech is a frightening thing, and often has a bigger downside than upside. I approach the issue with care, maybe moreso than some of my colleagues who would have similar politics to me.

HR: Some of the regulation of tech in the FCC net neutrality order ended up going over to the FTC. What they said was the FTC should be more active in antitrust and in consumer protection, and now the Senate is going to …

Consumer protection I’m all for. That’s a different issue than regulating speech. That’s the worry I have here. Given tech is so new, we probably have to look at it, but we ought to approach it with caution.

HR: Do you think the FTC should do more?

I’d have to study it a little more. Any Trump-appointed agency, I’m dubious of.

KS: What about the responsibility of tech? Facebook, Twitter, other things?

That’s a different issue.

KS: Being used by Russia. Hillary Clinton, we interviewed her last year at the Code Conference, talked a lot about this. A lot of people made fun of her at the time. How do you come down right now and what should these tech companies do?

I think they should do more on their own for sure. That’s the antidote to government regulation and also the antidote to a lot of this stuff. Now they’ve had some successes. Facebook took off 50,000 fake accounts before the French election and it was relatively free. I’ve talked to the leaders of Facebook, Twitter, Google about this. I’ve told them, make efforts to figure out how to deal with this issue without doing too much impinging on free speech or the government’s going to come in and change you, and that will not be good. I think they get it, and their first big test will be the 2018 elections.

I don’t think the Trump administration will do a thing. The amount the Trump administration is doing against Russia is appallingly zero almost. It’s up to tech to do more, and I do think they’re making an effort not only because it’s the right thing to do, but because I think they know down the road their survival depends on it.

HR: That is the test, then, is the midterms, that you think that nothing is going to happen in Congress or in regulation before the midterms.

No. Oh, with these guys? No.

HR: Tech is essentially on the hook to make sure the election feels fair.

Yes. I think tech has to make sure. For instance, they should knock out all these fake accounts. They’re already, I forgot the word, but downgrading things they think are fake, so it comes up less on Twitter, less on your Facebook News Feed. If you got the Russians, let’s say they have 50 websites and they all do the same thing. First they’re talking about this and then an hour later they’re all talking about that. That’s suspect.

HR: Pretty good sign.

Yeah, that’s a pretty good sign. They should look into that. Maybe they can’t shut them down, but they can so downgrade them so it’s only one rather than 50 people bouncing around the same message so that it goes way down on their list.

HR: Do you see Facebook as a media company?

Well, it’s everything. Facebook’s a very powerful force. I think overall it’s been a very positive force. I think now people are taking advantage of the openness of the net, and Facebook has an obligation to try and deal with it. I’ve talked to them. I truly believe they want to. I truly believe they know that their future is at stake with this. I also believe it’s a hard thing to do.

And here’s another thing I worry about. They tried to deal with certain things in the past, and the hard right went and criticized them, because much of this, the left does very little of this. I mean, we don’t use bots the way the Russians would or the hard right people would, we meaning the left, not me. I think when they do that, the hard right criticizes them, they’re going to have to be a little more immune to that criticism and go after the fake stuff and separate it from the legitimate stuff, even if it’s a little bit crazy what legitimate people are saying and doing.

KS: When you talk about this power, you’re pretty kind to the tech companies. A lot of people are less thrilled with them.

Yeah, I am more sympathetic because I think they’re in very difficult position and I worry about government regulation.

KS: All right, but what about the power that they have and what’s coming down the pike? Automation, robotics, AI, all these very important technologies could make them more powerful than ever, almost like nation states themselves. Does that worry you at all?

Well, it’s something I’m concerned about, yes. Do I know what the consequences are, let alone the solutions? No.

HR: To Kara’s point, we’ve spent a lot of time talking about how companies other than online communications companies, but companies like Amazon and what they’re doing to communities and retail and the like.

There’s another one. Now Amazon does great things for huge amounts of people, and they only have 3 percent to 4 percent of the retail market. Could it get greater? Yes, but again, I’d be careful. I’d be careful because they are creating cheaper better competition, people get better goods, cheaper goods.

I guess my feelings are a little more nuanced. Yes, they’re big, but big can do good things as well as bad things, and you got to separate the wheat from the chaff. Would the world be a better place or a worse place if there were no Amazon right now? My guess is a worse place. Yet, there is a lot of problems, for sure.

KS: You don’t see a Microsoft monopoly trial in any of the futures of these companies, or maybe? You were around for that.

When Microsoft was a big monopoly and I thought they were much more rapacious, I fought them. Back in the ’90s, they didn’t talk to me for 10 years.

HR: You’re not seeing that right now?

I am not seeing the same thing. I go to my small tech companies and say, “How does Google treat you in New York?” A lot of them say, “Much more fairly than we would have thought.”

KS: Not Yelp. I have just one more question.

No, Yelp, I’ve spoke to Jeremy Stoppelman. He does not feel that way.

HR: Yeah, they feel differently. Right.

I have.

KS: No. Just one more question from me and then Hilary might have a follow-up.

Kara, it’s more mixed. It’s more mixed in terms of the …

KS: Mixed, I agree with you. I agree with you. There’s too many of them. There’s lots of them. I’m just curious, Hilary’s going to ask you a question I think about where you see the midterm elections going and what you’ll do if you’re the majority leader, but I’d like to know how do you involve yourself in tech? One of your daughters works in tech. Are you a techy? Would you call yourself that?

No. I’m interested in it. I read every article about it, but I am not a techy. In fact, I’ll tell you a funny story. I’m well known for my flip phone. I don’t have an iPhone because my chief of staff, Mike Lynch, in 2004, said, “You know what, someone’s going to hack into this down the road, and you’ll say on your phone, ‘Ugh, Senator so and so, what a moron,’ and that’ll be the end.” I use my cellphone, and I actually … maybe I’m old fashioned.

HR: You don’t text either?

I don’t do texting. I get emails on my iPad. I get emails, but I don’t text. I don’t even know how to do it. I’m backward that way.

KS: You’re not on Snapchat?

Putin is not listening in to me, Kara. He can’t.

KS: You’re not Snapchatting then I’m guessing, right?


KS: Nothing? None of it? You could use Signal. There’s a thing called Signal. They are encrypted.

They will figure out how to capture your instantaneous Snapchats down the road or Signal or anything else.

HR: Communicate the old-fashioned way.

Old-fashioned. I like people. I like to talk to people. I sit on an airplane. I ask the person sitting next to me their life’s history. Wouldn’t be the same if we did it online.

KS: Okay. Hilary, why don’t you ask the election question, then we’ll let the Senator go.

HR: Two quick questions, lightning round then. When does the presidential campaign start, by the way?

It shouldn’t start until 2019. My attitude, who people ask. Let a thousand flowers bloom. Let there be lots of candidates all over the lot and let them go through the crucible of the first year, year and a half. Now, the one thing I’d say is we shouldn’t beat the daylights out of each other. We have a far greater enemy in Donald Trump. Politically speaking, he’s the enemy.

HR: That’s some advice Democrats are not yet taking from you.

No, and I think the difference between a mainstream Democrat and a far left Democrat is about 2 percent of the difference between either of them and Donald Trump. We have an emergency here. We got to keep our eye on what we have to do, which is beat Trump.

Now in 2018, to preempt your question, I think we can take back the House and the Senate. Why? The millennials I mentioned. Second, Democrats are getting much better. This is a tech issue. As we all know, Donald Trump did a better job on the social media than we did. We have learned to do. We are getting advice from some of the biggest, the best smartest people in tech, a lot of them are very comfortable. They made money and they’re working for us full-time.

In Alabama, our social media helped turn out millennials. Our social media and learning how to do turnout, especially in the African-American community where for the first time it wasn’t a bunch of white guys telling the blacks how to turn out, but we had indigenous people running the whole show. Millennial turnout and African-American turnout was higher than in 2016, but also higher than 2008 and ’12. We’re using social media really well. We’re going to kick the pants off the Republicans on social media.

You also have swing voters. I’m going to conclude by giving you one little vignette here. We looked at our five most Republican states where we have Democratic senators: Montana, North Dakota, Indiana, Missouri, West Virginia. We took out the people who always vote Republican, always vote Democrat, but looked at the broad middle, about 60 percent.

Here was the key question. These are Republican states. Do you prefer a Republican senator who had helped Donald Trump pass his agenda on jobs in the economy? That’s his strong suit. Or a Democratic senator who will serve as a check and balance on Donald Trump whenever appropriate? 72 percent, check and balance. 20 percent of the people who identified themselves as strong Trump supporters still wanted check and balance.

People want a check and balance on Trump, and we are now ahead on our polling in all 10 Senate races where Democrats are running in states that Trump carried. We’re ahead in three of the challenger states, and I’ll tell you this, if we take back the Senate, when I have the right to put things on the floor, we can stop Donald Trump from doing bad things and we can actually start doing some really good things. It’s an imperative.

HR: Even though voters generally like the tax cuts, they generally actually like a president who’s fighting for them on trade, as sloppy as he’s been this week, you think that the check and balance is the message?

People, swing voters, suburban voters, women voters, people of color, just lots of folks are worried about Trump and want a check and balance. Some of them like Trump, but still want a check and balance. Many of them don’t like Trump, and my prediction, now that his tax bill has been …

You know, the first month he got a big boost on that tax bill. Why? They just passed it. He had all these companies announcing bonuses, and the stock market went way up. All three are gone. A) It’s no longer just announced and Trump has screwed up on so many things between then and now. Second, people are realizing three things. One, that 80 percent of the benefits went to the wealthiest permanently while their benefits are smaller and temporary. Second, that there’s a huge deficit and third, they’re using that deficit to cut health care, Medicare, Medicaid.

The Koch brothers, with their huge money machine, put ads against McCaskill in Missouri and Donnelly in Indiana. The Senate super PAC answered back on taxes. They put ads on taxes. We answered back with the answer I told you, we won the argument. The tax issue is not going to be the panacea the Republicans think it is.

KS: Can I ask one final question?

You know what’s a bigger issue to people? Health care costs than taxes. Health care costs.

KS: Right.

HR: Now Trump owns them.

KS: Being anti-Donald Trump, does that work? It doesn’t seem to. No matter what low he goes to, it doesn’t seem to.

HR: If you’re a Senator in a state, I think Kara’s asking if you’re a Senator in a state, a Democrat in a state that Donald Trump won, are you running against Donald Trump?

Yeah, you are in terms of check and balance and saying when I disagree with Trump I will fight him. When I agree with him, I’m not going to just go against him for its own sake. In reference to the question that Kara asked, 2018 election with Trump at 40 percent, that’s a huge advantage for us. That doesn’t mean we can’t have our own positive program, and we have some of it and we’re going to have more. We just announced an infrastructure program, $ 1 trillion of real jobs. You know what we did? We took the tax cuts on the rich, some of them, $ 1 trillion worth, and put it into infrastructure. What do people prefer? Tax cuts on the wealthiest people and biggest corporations or millions of middle-class jobs on infrastructure?

In that bill, we proposed something that’s going to really help us in rural areas. In the 1930s, Franklin Roosevelt said every rural home should get electricity. It was a necessity. We say in the 21st century every rural home should get broadband. High-speed internet. Right now, one third of all rural homes have almost none. We will propose it. We’re proposing a job training program, like the apprentice program in Germany, where people can get good paying jobs after a company gets a tax incentive to train them. We realize that in 2016, Democrats did not focus positively enough on people. We are. Remember, fighting Trump is also going to be very important. You need both.

KS: Perfect. Senator Schumer, this has been great. I like all your stories. I wish you would tweet, honestly. You can’t on your flip phone, but it’d be nice.

I’ve tried to make a deal with Donald Trump, “You don’t tweet, I won’t tweet.”

KS: Yeah, he likes to tweet.

HR: He’s tweeting but he doesn’t seem to do the same on taxes.

Tweeting is doing him more harm than good.

KS: I don’t know. He’s good at it, I’ll tell you that.

No, you see, you sound like Donald Trump. I tell him this. It’s good for his 35 percent. It turns off 65 percent. We’re upset because even 35 percent would go for him, but count your blessings.

KS: Well, thank you so much. It was great talking to you, and Hilary Rosen …

HR: Thank you.

KS: … who was also on as my co-host, thank you so much. Thank you for coming on the show. I’m sure we’ll be talking a lot more in the future.

Hey, make sure you write and call, email your Senators on net neutrality, audience.

KS: I’ve already done it.

Good. Thank you.

KS: While I’m sitting here. Thank you so much, Senator. Thanks again to Hilary Rosen for co-hosting this episode with me.

Recode – All

Cash For Apps: Make money with android app

Full transcript: GLG President and CEO Alexander Saint-Amand on Recode Decode

How Complete Beginners are using an ‘Untapped’ Google Network to create Passive Income ON DEMAND

“You could call what we do consulting, but it isn’t really.”

On this episode of Recode Decode, hosted by Kara Swisher, GLG President and CEO Alexander Saint-Amand talks about running a learning platform for investors and business professionals.

You can read a write-up of the interview here or listen to the whole thing in the audio player above. Below, we’ve also provided a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

Kara Swisher: Recode Radio presents Record Decode coming to you from the Vox Media podcast network. Hi, I’m Kara Swisher, executive editor of Recode. You may know me as the star of “Black Panther,” but in my spare time I talk tech, and you’re listening to Recode Decode, a podcast about tech and media’s key players, big ideas and how they’re changing the world we live in. You can find more episodes of Recode Decode at Apple Podcast, Spotify, Google Play Music or wherever you listen to podcasts, or just visit Record.net/podcasts for more.

Today I’m in New York City with a very bad voice, and I’m here with Alexander Saint-Amand — what a name — the CEO and president of GLG, a learning platform that connects businesses and investors with experts on a range of subjects. He’s been with the company for 20 years and has been CEO since 2006. Alexander, welcome to Recode Decode.

Alexander Saint-Amand: Thank you for having me.

Let’s talk a little bit about your business because I don’t think people know what you do. When you’re saying a learning platform, people usually think of Udacity or one of the other platforms and things like that. Give me an outline on how you got to where you got.

Yeah, I’d love to compare us to some of those platforms too, but GLG’s a one-to-one learning business for professionals. I hate to use analogies, but the easiest way to think about it is Uber meets Harvard. It is a one-to-one learning business, like I said. On the one hand, we have a group of companies, a few thousand companies that want to talk to various experts on various subjects, learn from experts on lots of different things, and so we have this membership on the other side of about 750,000 professionals who are available to teach.

Like calling an Uber, you tell us what you want to learn or …

Right, such as.

Just because I was preparing for this, I looked through some of our projects this morning. To name a few that are in the news, we’re doing work on school security today. That might not surprise you. We had everyone from a really big tech company that you probably know down to a startup looking at how schools do security — and not in a political way, like what guns should or shouldn’t be there, but just how does the security work in the school.

We’ve done work today also actually comparably on hotel security after Las Vegas. I can keep going down this political line. We took a client to see the wall, the border wall with Mexico, and had a group of people who understand border security lay out how it actually works in real life. The client was not Donald Trump, just for the record, but was someone else looking at the subject.

A lot of stuff can be really boring. We did the first project this morning. When I looked at the list this morning at 6:30, the first project was on how reservoirs are designed and reservoir engineering in Latin America.

This is all done online? Their clients of yours? Talk a little bit about your background. How did you get to doing this first? Then we can talk about how it works.

I think for you, you remember Guru.com?

Yes I do. Explain for the people what Guru.com was. There were a lot of them.

Guru.com was … There were a lot of them. We’re actually one of them, although you don’t know that. We like to say, when we went to raise money for this idea, we talked to all the same people. They talked to Guru and Elance and ExpertNet, and you remember some of those, but there were more.

Yeah, what was the other one? There was another one, I can’t remember. It degenerated into Wiccans and something else.

Right. I like to say phone sex and astrology.

Yeah, phone sex and astrology.

I’m not sure that’s true.

Wiccans was a big part of it. I can’t remember what it was.

Yes, it was. I don’t remember that one either, but I know what you’re talking about.

You need a Wiccan at any time.


You don’t have Wiccans.

We don’t. Guru, if you remember, started out with real aspirations to get great experts. The idea was what it sounds like, you find a guru.

You could meet them over at a digital platform.

You can find them through the digital platform, but the idea I think on Guru is that you talk to them over the phone or you meet them in person. As you know, they raised a lot of money. I think it was ’98, ’99, somewhere in there, right when we were raising money. In fact, they announced their round a week after we went to see the same venture firms.


We were stuck because they raised a few hundred million, and what they do is they opened up the thing to anyone, and so you go to Guru and if they have the head of neurology at Stanford on there, you can come and say, “Hey, I have a headache. Can you help?” The problem is that no matter how much money you pay the head of neurology at Stanford, he’s not interested in that question. He might be if you have a real problem, but he thinks it’s beneath his pay grade, he’s not interested, and he doesn’t learn through teaching that. He drops off, and it devolves.

Adverse selection, which is the big problem. I mentioned Uber meets Harvard. There’s a Harvard part, which is you have to qualify the student and the teacher. We went a different way. We recruited the faculty at Duke and Stanford and Harvard Medical schools, and we invited them to teach.

What was the premise to them at the time? Because this was, what, in the ’90s, right?

It was ’99. It was the booming of the biotech.

Right, before everything went down.

Before everything went down, the booming of biotech, and our first customers were investors who were looking to learn about all these new things that were happening in biotech. We went to the universities and said, “It’d be good for you to share your actual expertise.” In other words, investors are making decisions based on equity research reports, based on whatever, other written materials they can find, and shouldn’t they talk straight to the source.

By the way, you’ll learn from talking to them too. It was a little bit based on some jealousy between Duke and Stanford at the time. I could get into the politics of it. I remember Stanford has always been connected with the venture community, Duke wasn’t. The dean at Duke wanted Duke to be a center of thought leadership, and so he invited a bunch of his faculty to teach with us.

You were just saying you wanted to qualify the people who are talking because it can devolve into just anybody can get a … A lot of them were open platforms for experts.

Yeah, which continues today. You saw a few years ago some of the folks behind Twitter launched, I think it was called Ask Jelly. There was Quora, there’s been Yahoo Answers, LinkedIn Answers.

I’m blanking on the one that was back then. It was another one besides Guru. It went down real hard.

I want to know, too. Guru went down hard, too.

It’s like Answers.com, too, went hard. I’ll remember it.

It wasn’t Answers. The idea has a long intellectual history in the Valley of what about all that knowledge that’s in people’s heads.

How can you get it out and sort it out?

How can you get it out?


Then you apply Uber to that idea, and you think, “Let’s just connect everyone.” Learning doesn’t work like that. I always tell people we are like eBay for learning or Uber for learning, but learning is not selling a camera on eBay and it’s not finding a car. The bar is much higher. You asked, why, the Duke faculty members, did they want to teach a group of investors? Because they learn through teaching.

Right. There also were a bunch of other things that are slightly in your area, not just so much the Udacity’s or the MOOCs, but the ones where you’d want to learn to play the guitar or you’d want to learn to do a lot of things and they would link you. They were essentially a linking service. Then others, the one that was sold to LinkedIn, and that was sort of computer learning.

Oh, Linda?



Right. Those were online courses.

Those are online courses. I think our core idea is that, and I can make analogies, but our core idea is that one-to-one or customized learning is the new learning thing. In other words, making one-to-many-many is one idea. That’s what a lot of amazing companies are doing.

Right. That’s how universities have gone online, right?

That’s right. That’s the MOOCs.

You can learn at MIT from anywhere in the world.

Yeah. The learning methodology is the same. I watched a lecture at MIT. I watched a lecture on my phone. Now of course Sarah and others have made their focus more on skills training and skills development, which I’m fascinated by. The question is what’s the delivery mechanism of that learning? The conceit of all those companies is that if you just take one-to-many and make it one-to-many-many-many, it’s going to change the way everyone learns. Our idea is not that. It’s that customization is the key to the learning and that people don’t really understand what the dynamics are that take place if you want to scale one-to-one, but if you do accept those constraints, that one-to-one is the most powerful method of learning.

Take the example I used here: As a company you want to work on school security. What do you read about that, that teaches you how it really works?

You can search Google, right, by yourself?

You can search Google.

You can send some intern in to get you as much information about it.

You can pull the other report, and those things are important. You should do those things. Then when it really comes time to start figuring out what you want to do, you need perspective from people in the space about how would your idea work in that market and what if you did this, what if you did that. It’s the development of perspective, the development of I guess you would call it wisdom on the subject that really only takes place, just like this conversation. You can learn a lot about GLG, but you’re going to ask me questions and learn more about GLG.

Right. How does that differ than say other ways of people learning or consultants, really? That’s what Bane does. That’s what all the other consultants [do]. How did you differentiate?

Bane, McKinsey, etc., they deliver you what you should do, their ideas. You say, “Should we open in Australia?” and they deliver you a report. “What should we do with our business?” They deliver you a report. I would say that we’re not that. We don’t tell you what to do. We don’t tell you the answer, per se. We teach you about things. You want to learn about markets. Most of the top strategy consultants do use us, most of the biggest companies in the world use us, or many of them do, but they don’t use us for the same thing that they use a consultant for.

You could call what we do is consulting, but it isn’t really. It’s the average interaction between, we’ve done millions of projects. Our members have answered, I believe, almost 100 million questions on our various sites, but the primary experience is a phone call.

It’s a one-on-one.

It’s a one-on-one phone call or a meeting.

Go back again to the ’90s. You started this, Guru got all this money and there was three or four others that were like this. Talk about what happened. Your original premise was the same thing that you’re doing now?

Our founding story’s a little different. The company’s called GLG. It was originally called Gerson Lehrman Group. It was started in ’98 by a fellow named Gerson and a fellow named Lehrman, so it’s Gerson Lehrman Group. The original idea that they had come up with was to start a publishing company and so they raised some money for the publishing company. It’s a long story and I’ll tell it to you because it relates to the heart of the matter. I joined them, and we came up with this other idea to do this, and we went out to raise money for it, but we didn’t and Guru did and other people did.

The publishing company didn’t work either, so we repurposed the capital from the publishing company and put it into this idea. This idea worked. Even as Guru was fairly immediately struggling, we developed a first group of customers who loved the idea and started working with us and so it took off.

There is a digital element to it because you link … People find you or not? How do you look at it that way? I want to get later into talking about where learning is going.

Yeah. Great. The digital component is just how do you scale. The digital side of GLG is fairly straightforward, but it’s not that different from Uber. There’s a car around the corner, and you now know where it is because of GPS. GLG is just how would you know who the best people are on the subject? We use a lot of different technology to find the best people and what they want to teach or what they have to teach, and then we spend just as much time figuring out, if you’re a customer of ours, what you want to learn. To do that at scale requires a lot of systems, but not super-fancy systems. Of course we use AI for it. Of course we have what you might expect, but it’s a combination of the idea combined with simple systems.

Give me an example. Someone will come, like school security. What happens then in that? They would contact you?

They work with someone at GLG. You can go to our site, but in general you’re covered by someone. We have a few thousand employees, someone covers you. You call them and you say, “I want to learn about school security, and here’s what I’m thinking about.” They will go through our database. They’ll invite new people. We’ll ask people in the membership to invite other people. It fairly has scale. We want to invite a lot of people to this idea and hopefully have you connected with someone on the phone within a few hours. It’s not quite on demand, like 15 minute on demand, but it’s on demand as in same-day or next-day.

Right. How do you vet the experts then? That was one of the issues, too, is the quality, as with any of these platforms, the quality of the expert matters.

We recruit because we think you’re an expert in something. Yes, we have a lot of inbound people applying, but in general we’re recruiting you because we heard you’re Kara Swisher and we think you know something about something.

I have no expertise in anything.

You have expertise in podcasts, for example.

I guess.

That’s such an important point because people don’t really know what they have to teach either. We will recruit a former Fortune 500 CEO and they’ll ask us, “What do you think I have to teach?” They have a lot to teach about being a Fortune 500 CEO or in a sector or farmer or whatever it is, or interacting with the White House or managing corporate culture or whatever the subject is. They don’t really know what their real thing is.

That would be valuable.

That would be valuable or that they’re the best at teaching. We always say that everyone loves to teach, they just don’t know quite what do they want to teach and where they want to teach it. Not everyone wants to go move to Boston and teach a course, but everyone does love sharing their expertise with the right people.

Right. They go and you link them up and that’s it, and the fee is paid? How do you figure that out?

We invite a lot of people to do the project. Everyone can opt in or opt out. They fill out a questionnaire of what they do or don’t know. They go through some legal and compliance and contracting type things. They’re then available. Then we pass along their information and their biographical background and the answers to those questions to a customer. The customer then gets to make a decision about who they want to talk to, and then there’s a scheduling system in our sites and stuff that helps them schedule a call.

Then a fee that you …

Then afterwards, the member bills their hourly fee. The customer pays us in a variety of different ways.

Right, different ways. When you’re thinking about where expertise is going, why do they need you? You can find everybody.

Every reporter always asks us that question, and everyone in Silicon Valley asks that question. Most people don’t really know how to find the expertise they’re looking for, and they’re not used to the process you would go through to find … I was a reporter also, just for a year.

What did you report?

I covered news for Bloomberg. I covered the Bundesbank for much of the year for Bloomberg.

Oh man, that’s enough to get you out of journalism.

I loved it, actually.

Did you?

I loved everything about it.

(laughing) Bundesbank.

I did. I loved everything about it. I’ll tell you how I got to this from that, but most people don’t know what they want to learn, exactly. They don’t know exactly who they want to talk to. They come in with a question, like, “I think there’s more to learn about school security. Where do I go? Who would I talk to?” They wouldn’t necessarily think, just to use an example, to talk to the people who now run security at the various concert halls in Paris. Those folks have thought a lot about security after what’s happened there, and so they are great people to teach just maybe a new way of thinking about it.

How do you entice them to want to teach? Money?

People like teaching good students. The key to GLG is making sure that … The reason why it’s not a consumer idea yet is because you have to qualify the student. The problem with Yahoo Answers is just all sorts of people are asking random questions, and are they worth teaching? Same with Google.

Also, crazy. We’re going to talk about that and more when we get back. We’re here with Alexander Saint-Amand. He’s the CEO and president of GLG, a learning platform that connects businesses and investors with experts on a range of subjects. This is an area that Silicon Valley’s been trying to tackle for years, and we’ll talk about how that’s going when we get back.


Today I’m in New York City with a terrible voice, and I’m here with Alexander Saint-Amand, the CEO and president of GLG. It’s a learning platform. We’ve just been talking about how GLG got created in the bust, essentially right before the bust. Let’s talk about the idea that Silicon Valley thinks they can do this through AI and everything, knowledge. Let’s talk about where it’s going from a technological point of view, because what you’re doing is pretty traditional. You’re linking people with others, not unlike LinkedIn or any of the other, or Tinder or anything. You’re linking people.

It may be more like Tinder than LinkedIn. I like to say that part of GLG is just the idea that there’s just a vacuum created by LinkedIn. You’re connected to all these people, but you’re not really connected. You don’t really have a way or there’s no human connection. Our connection is we want you on the phone with someone talking to them. We want you in a room with someone that’s the very best person to reach and learn from, to teach or to learn from. What’s the question about AI exactly?

No, the idea is Silicon Valley is trying to get at this problem with Quora and stuff like that. They’ve been trying to automate it forever, the idea of where knowledge resides and how you access it from people. Essentially they’re going to get to downloading your brain, but that’s a different thing.

Downloading your brain is a different thing.

Well, it’s not.

It’s certainly within the broad long-term wheelhouse, yeah, but I think just all of them don’t accept what makes learning work and why is Harvard a place that you want to teach or learn.

Because you can’t get in. Sorry.

Well no, that’s part of it though, because there’s admissions.

I can’t get in, but go ahead. I just can’t.

I think you can. There are admissions and you know that the student’s smart, you know the community is smart. That’s an important constraint. Once you remove that constraint, the class might not be as interesting at Harvard.


I would just say you just have to start with what works in the existing learning institutions and think how it applies once you apply some basic matching, LinkedIn or Uber whatever.

Talk a little bit about where it’s going though, because every couple of months I get one of these of how we’re going to change learning, how people are going to learn differently. A lot of it is trying to automate it or trying to consolidate IT into it. A lot of it recently around AI, this is how you’ll be learning, this is how it transforms that.

Yeah, and I’m sure you’ve thought about it with your kids, too.

Teaching. I think there’s something so wrong with schools, but that’s another …

There’s a really cool study that I like to just always point to, which is if you take the average math class, there’s a bunch of kids. Some kids are two years ahead today, some students are two years behind. That’s statistically how big the gap is on any given subject. We totally get that little piece, they’re way ahead, they’re way behind. Well, if they’re way ahead, they’re bored. And if they’re way behind, they’re confused. The teachers can’t solve for that because teacher’s got 25 students.

Has to teach to the program.

To the mean or median, whatever. The question is, how would you solve that? There are tons of cool technologies for solving that and testing, using AI or otherwise, just more simple algorithms to make sure you get questions on things you don’t understand and no questions on the stuff you’ve already mastered. Lots of software works that way today. Adult learning doesn’t take place like that. You don’t have a chance to just have exactly the right teacher.

And if you think about it, you say that where teaching is broken, imagine executive education for a second. You go to take a course on marketing for two weeks with 50 of your peers from totally different-size companies who have totally different levels of expertise. What’s the average level in that class? It’s just average. It’s by definition going to be really easy for you on one part and too confusing for you on the other part. What you need is exactly the right course with exactly the right teacher. That’s not that hard to deliver as long as you don’t just try to scale it just so fast. As long as you don’t just open the idea of …

The way we’ve taught is not that way. It is teaching to the mean and the idea of learning that is completely customized is still far away.

Yeah. I always say that GLG’s first customers were some of the best investors in the world.

They wanted some expertise on biotech or whatever the heck they were looking at.

Biotech or anything.

“What is this bitcoin?” You’re probably doing a lot of that, right?

We do a lot on cryptocurrency, we do a lot on cryptocurrency security. I always say to people, a lot is that fancy stuff, a lot of it is how do reimbursement systems work for hospitals in Eastern Europe? It’s super interesting if you’re trying to figure out are there any businesses in that space.

Where do you find that expert?

People who run hospitals in Eastern Europe and Turkish veterinarians, for example.

What if they’re not good runners of hospitals? That’s the problem you run into. Anyway, go ahead. Sorry.

That’s a different question, and I can talk about it, but the main point is that the best investors, first of all, they’re looking for perspective, not an answer. There’s no answer to how it’s run, it’s just a perspective, “What if we did this? What if we did that?” They would never settle for a report. You’ve never met someone at Sequoia that says, “Oh I just read the report on the hotel industry, and so I’m backing Airbnb.”


It doesn’t happen. They go and try to figure out what are the weaknesses in the space? Where is there opportunity? What if they did this in this city and this country? What would happen? They never have accepted the report as the answer. Of course, they’re the best investors with all the resources, so of course they can do that. The question is how many people can do that. I think eventually everyone will be able to do that. No one will accept that their learning is just a one-to-many course, because no one ever learned well that way.

The innovation is not that high in making that same course interaction, teacher/student relationship just available to more people. That’s just not that innovative. I’m less focused on AI than I am on the same thing, I use an analogy with drugs. It used to be everyone took the same drugs for cancer and now because of genomics, because of the availability of information. Yes, because of AI, but because of AI and the development of those drugs, you will get a more and more tailored drug. Same with your learning.

It’s interesting when you think about that, because we don’t think about learning that way ever. We just don’t. It’s one of the few things, health care is the other one, that hasn’t changed that much because of digitization or the ability to do that, to connect people in the same way. Dating has changed drastically, if you think about how good it’s got. Good or bad, depending on how much you like those services, but they’ve solved the problem that analog hasn’t been able to solve.

Everyone knows that education is broken in some way, when I look at some of my kids’ stuff or just myself. I don’t learn at all. People don’t learn all day long about things. I think you read the internet is what you do.

You read the internet.

Right. Google has been a learning mechanism for a lot of people. “Let’s look it up and find out.”

Yeah, it is, but who says, “Gosh, five years ago I googled it and that really changed my life”?

Right, no. 100 percent. I remember what I Google.

It’s not that there’s not enough information on Google, it’s that learning doesn’t take place totally by reading. You can learn a lot by reading something, but the question is how do you really grow, how do you learn?

I always like to say the MBA is one of those incredibly broken things. Not because you shouldn’t go or something like that, but because when you leave it, you don’t know any business. You listen to a bunch of lectures, but you can’t fire someone. You have no actual business skills.

It’ll be so much better if you apply into Harvard, you got in. Now we know something about you, but then you spent the next five years in a series of small group learning experiences in companies. You spent a year in product development at Google, you spent a year in finance at Goldman. You spent a year in the best companies, and you really learned through those experiences, which would be much closer to a traditional guild or apprenticeship in Europe.

Is that a new business for you, the new way of learning?

Well, I’ll say one more thing about it, that the faculty at those schools are typically not that happy with the experience either. They have this very specific expertise. Frances Frei’s studying culture. She goes to Google to apply it.

Uber. She’s at Uber.

Sorry, Uber to apply it.

She picked the Mount Everest of horror shows.

That’s right, because what she wants to work on is that problem. That’s her thing.

Good luck, Frances. I still don’t think you can do it. Sorry.

Maybe she can’t, but you see why she did it.

We had a podcast taping with her.

Because she’s put it at the Everest of that, what she doesn’t want to teach necessarily …

You’re going to die in the crevasse of …

She may.

She shall.

She may.

The crevasse of non-ethics, but go ahead. Sorry.

She may, but she will learn from that. And I’m sure, I don’t know this, I don’t know her, but I would imagine that she gets to apply all the things that she’s been working on.


Whereas if she goes to teach at business school, she just teaches introductory entrepreneurialism, business leadership, these generic courses. People love to teach the thing they really know and care about. Basically the whole system is built on old matching technology that should be replaced.

Old, people self-select, you mean?

No, meaning you would have to aggregate people in a classroom, so I guess that’s just the number of people that can connect. The new matching would say that Frances’s best students are Uber, Huawei and a company that’s trying to scale in Europe, and those are the thing people who are wrestling with culture the most and so those should be her students. She should still be a Harvard faculty member in teaching those students. The old world said only the people that can come to Boston can therefore be in the class.

Talk about how learning has to change then. Where does it go and how does digital technologies help that? Obviously people are mobile. People are listening to a lot more. They’re consuming tons of podcasts, a lot of educational podcasts, things like that. VR has this enormous capability of changing … VR/AR, really, or mixed reality. I think that’s the term that we like to use now. Talk a little bit about how that changes. You’re just doing better matching, essentially. If people have a problem, you’re finding their solutions for them.

We like all those technologies. If a GLG match can take place through VR or anything you want to call it, we’re very happy about that. What we’re interested in is we’re interested in two questions, which is what do people want to learn? I use an example of when you call us about schools, for example. Once you do a project, let’s say, on school security, we should be able to recommend a project to you on hotel security, because if you’re interested in one, you’re probably interested in the other.

You’re like Netflix.

That’s right.

“If you like this movie, you might like this.”

That’s right. That’s really important, because if you think about Harvard, you don’t just go to Harvard and pick all the things you want to learn. That’s not the thing. The thing is that they also can recommend, if you want to study classics, these are the things you have to know in classics.

We aim to be like that and we operate like that, meaning much of what you do at GLG, maybe 70 percent of it, is stuff you initiate, but 30 percent is the stuff that we’re recommending. We spend a lot of time on that. Similarly, we want to spend a lot of time figuring out what you want to teach, which is just as hard. Most people that join our membership …

These are the teachers?

Yeah, if you’re the head of neurology at Stanford and you study the A45-B antigen as a target in breast cancer or something like that, then you know that’s what you have to teach.

You might want to teach guitar, but go ahead.

You might want to and some of them are probably qualified to, but that’s not your primary area of expertise. Whereas if you’re a general executive, you may not know. You run a large sales organization, you may not know what you actually know about running a sales organization or management culture or anything.

Tell me about what people do want to learn. What are the things that you specialize in?

We started with science, so a lot of what we do is still science. The big buckets are technology regulation and globalization. Those are I think the three big buckets. The last one’s probably personal development.

Let’s go through them. Technology, meaning how to do things?

Technology, so, “How does that A45-B antigen function as a target in breast cancer,” let’s say, “and is it a reasonable target and how does it work and why does it work.” That’s just because medical science is where we started, but there are plenty of examples there. In regulations, it’s, How can I open a business today in Venezuela? What will the government accept? I run a copper business and I want to expand from Brazil into Venezuela.”


“Don’t.” There’s the short answer, but if you did want to and you knew certain constraints, how would you think about entering that market and what would you need to do? Globalization is, “I know my business” — same example — “I know my business in Brazil but I don’t know it in Venezuela.” “I understand this business very well in China and we’ve expanded all over Europe, but we don’t understand the United States market yet.”

The last bucket is personal development, just straight up, “I’m the head of Merck North America and I want to keep growing as an executive. How do I think about my core professional development goals?” Which you can say is more like coaching.

Right. There’s the coaches, yeah.

I give you some learning buckets. There’s of course coaching. There’s consulting. There’s executive education. There’s market research. I would say all of those categories and more are disruptible on some level by a more customized model, in the same way that Michael Dell didn’t really change the nature of the computer you can get.

No, just how you put it together.

Yeah, just made it much more customizable. They did that through a very particular business decision, which was just not to pay the manufacturer until they bought the customized pieces. One of our core ideas is we just don’t pay for any of the learning until the customer needs it. That allows us to have many, many, many, many more courses, effectively millions of courses available.

Same with Amazon. When it launched, they didn’t buy the books until after the customer ordered the books so they could have a couple million books and Barnes & Noble was stuck. This is the long tail theory. The long tail’s so important to learning. What people need to learn is often in the long tail, the right teacher is often in the long tail.

Interesting. When we get back, we’re going to talk more about where learning is going. I’d really like to think about how people are going to learn in the future, if it’s going to be a lifelong thing or students learn now. I don’t know if you saw last night the students at the Florida high school that got attacked, they had a teacher on there. Did you see her?

I didn’t see her.

Oh she was fantastic. She was trying to get the person from the NRA to explain the Second Amendment and how it started and she goes, “And I need supporting explanations.” I just had a really bad flashback to high school and they’re teaching the same way, which was funny.

We’ll talk about where learning’s going and how it changes in a digital space, because I think you’re going to see a ton more learning that way, because the way, again, schools are done, you create a Harvard and people go there, it doesn’t make any sense going forward.


Today I’m in New York and I’m here with Alexander Saint-Amand, the CEO and president of GLG. It’s a learning platform that connects businesses, investors and experts on a range of subjects. I want to talk about the future of learning, where it’s going, because when you think about this, what you’re doing is analog, but you’re linking people using a platform to do so. Where do you imagine the future of learning is going?

Again, as I said, it’s one of the few things that has resisted digital. Although there’s plenty of courses online and things like that, we still go to schools or take courses, or it’s very physical. You talk about doing things physically. When you think about your business going forward, how do you imagine it changing?

I just think always about the personalization of it, and I don’t really necessarily …

Care how it’s delivered.

I don’t really care how it’s delivered per se. I don’t really think the innovation and delivery has been much innovation. Yes, the internet makes it possible to watch a course that was taught across the country and around the world, and that’s important because …

More people have access.

Yeah, more people have access and for certain things, particularly base skill development or write and learn to code or learning base math, Khan Academy. I mean these things are incredible, but they don’t change the nature of the learning. The nature of the learning comes down to how are we interacting. There are of course historical precedents for this. There’s, I wish I knew the word, I think it’s chavrusa or something. It’s the Jewish tradition of debate that they teach in yeshiva and you’re paired up with someone else and you just keep debating.

I saw “Yentl,” but go ahead.

I didn’t see it in “Yentl” but I see it in Israel.

I’ve seen “Yentl.”

That process, for example, is really powerful, I think, or they wouldn’t have been doing it for a few thousand years, and it’s not a piece of the methodology. It’s probably closer …

It’s not even slightly digital.

Not even slightly digital.

Do you think, again, Silicon Valley’s really pushing on the idea that all learning will be digital going forward, do you think that’s just not so? Well, until you can put the chip in your head.

I think the digital piece of the match — like what do you know now and why is it that you need more help with that — is really powerful, those tests in the systems. I think there’s also game-based assessments of nonspecific qualities that are really interesting in terms of what do I need to learn, but once it’s, “What do I need to go learn?” I think there’s so much proof that a conversation is the only thing that’s adaptive enough to keep up with the person, because remember, it’s two years ahead, two years behind any given subject, but it’s any given minute, any given subject, you’re constantly a little ahead, a little behind. You’re following me a little bit on what I’m saying, you’re a little behind.

Conversation is just so powerful to achieve that. Just to make it real, let me bring you back to the founding story, if you don’t mind, in terms of the personal story I think lays out how you would think about it too. When I was in high school, my mom got sick and she was diagnosed with some idiopathic cortical atrophy.

I don’t even know what that is.

Exactly. That’s the point. It’s idiopathic, meaning we don’t know why. Cortical atrophy meaning her brain is shrinking. Her brain is shrinking and we don’t know why. It happened when she was I think 52, and we were driving to school and she got lost and then within six months she didn’t know who I was.


We went and got a first opinion, and to this point you go get a first opinion and the doctor says, “We don’t know what’s happening.” You go get a second opinion, and the doctors says, “We don’t know what’s happening.” You go read everything you can about frontotemporal dementia and Alzheimer’s and Lewy Body and stroke, and you’re trying to figure out what’s going on.

That happened to me, and I went to college and I ended up leaving college for a few years just because of taking care of her. I went and became a reporter. When I became a reporter, I learned to ask people questions, so that I went back to school and I was a very, very serious chemistry, pre-med student and I was planning on going to medical school.

I met these folks who were starting this publishing company at the time, and it’s a long story, but I started going to medical conferences for a company in New York and I would act as a private reporter. I ended up going to the Neurology Conference. I went and talked to them.

Because you were interested.

Because I was interested. I went and I talked to the fellow who studies frontotemporal dementia, and I asked him question after question, and told him about, I didn’t use my mom’s name, but I said, “If it was this, would it be that?” He didn’t know who I was, but I was knowledgeable on the subject, and like a reporter, I just kept pushing. Well, I learned she didn’t have that. I went through all of them, and over time, this isn’t a perfect story because she had Alzheimer’s and there was no answer, but she didn’t have those other things. Of course, if you didn’t know what your mother has and she’s still alive and maybe you’re going to get it and all those kinds of things, it’s a huge comfort in knowing what she has, but I didn’t get it from the first or the second conversation.

I didn’t get it because I read a report. I couldn’t. I tried for years. I think that says everything about what we’re trying to do. If your mother got sick or if you got sick, you would not be satisfied with what you could read. You would go find the best teacher and the best teacher and the best teacher and you’d keep having an interactive experience, and you would learn a lot. You would know quite a lot about the subject if you could, in that way. I think that’s the future of learning. I think that you’ll find exactly the material that you need. Some of it will be presented digitally, that’s true, through a test that knows what you want to learn, but it’ll also be about finding the best teacher.

This brings you to the other side of GLG, which is so important, which is people love to teach. If you think about your career, you’re going to spend time learning and you’re going to spend time learning and teaching, and you’re going to spend time teaching in some continuum. People learn through teaching. They stay engaged in the workforce through teaching. They may call it consulting, they may call it joining boards, they may call it a lot of things, but just straight-up sharing your expertise teaches you a lot, too. That matters because if you think about the future of learning, you’re not going to be constrained to the people that are just readily available to you in your local community. Kind of like an Etsy. You’ll be able to find the people around the world that love to teach that thing.

I want to finish on two different things. Being in New York, you guys are in New York, essentially.

We are, yeah.

I want to get to that, yeah, but when you’re talking about finding whatever you want whenever you want, this highly customized world, which again, is a digital mentality of doing this, how does then our learning change? How we teach kids, how we teach. Should every kid have a special teacher, which seems impossible?

I haven’t really gotten to kids yet. I’m more interested in what happens through your life. I wish I had a perspective on kids because I have them and I have no answers there yet. Although I think the more adaptive the better, of course.

I always go into the classroom, I’m like, “Why are they sitting here? They’re not learning.” I constantly think the way we teach is just so wrong given how much technology we have the ability to match people, the ability to figure out people’s actual skills.

What they love and why they love it.


Getting back to my example, the key of that two years ahead, two years behind thing is that is why so many kids decide they’re not good at math: It’s because they so clearly feel ahead or behind, bored or confused. I don’t know if that means everyone has a personal teacher, but I wouldn’t rule it out.

Different two personal teachers. It can’t be one, right? It’s not like we have Socrates teaching Alexander the Great or whatever.

Not everyone might be ready for Socrates. I don’t know. I don’t have a perspective on that. I’ve been so focused on what happens. I’m a little focused on what happens in college, but then after college, how do you learn throughout your life, how do you teach throughout your life? I’m quite sure the idea of a business degree will change completely.

All degrees or not all degrees?

All degrees. First of all, medicine already functions to some extent like this. There is precedent. Law school doesn’t function like this, but medicine does.

Meaning that you work in the hospital?

You work in the hospital.

You still have to go to medical school. Hands on.

You have to take two years of science, and then you really are in clerkships and internships and residency. There’s this great expression, by the way — “See one, do one, teach one” — in medical school where you watch an appendectomy, you do the appendectomy and then you teach the appendectomy and then you know the appendectomy. That seems like a model. You’re doing this very personally. Someone’s right over your shoulder making sure over and over again that this is something you actually know.

I think to your point about digital impact, I think that that kind of learning is just much more possible than you think. Just to give you a sense of skill, we’ve paid our teachers we like to say about $ 1 billion at this point, so we’re not officially in the gig economy per se, just because we’re focused on higher-level professionals.

They called you Uber for Harvard, right?

Well, if it’s the Uber meets Harvard, there are pieces of both, and I suppose that we are somewhat of the gig economy. We’re providing gigs for people to teach for sure, but at a relatively high price point, a relatively high skill. It’s professionals.

Last thing, I want to finish and I want to talk about the idea of what people want to learn, because it changes over time. Now you said different things are really popular, and obviously today people would be interested in school security. Is that how it goes? Do you see a trend in learning?

The trends we see, we see topical trends, like digital health, for example, is the fastest-rising category.

Why? Tell me about that.

Just so much opportunity. I use digital health specifically against hospital IT. Everything was health care IT. That was the electronic medical records, etc. Now, running GLG is a little bit like running a very large virtual university. You’re always seeing people.

Or interested in.

Yeah, what they’re interested in. The consumer side of health and the digitization of that has been the fastest-rising subject. There are others like that. Of course North Korea crops up if North Korea happens or something like that, but the big subjects are China and the rest of the world or digital health. You see those kinds of things.

What do people want to know about China?

So many businesses try to figure out how to work in China, and so many Chinese businesses are trying to work in the rest of the world. Those two things lead to lots and lots of learning.

Lots of questions.

That’s true in every country, but China’s very big and the rest of the world is big, and so there’s a lot of overlap.

Then other topics that seem to be popping up? It’s just topical, topical, topical?

Those are just themes. If you look at on a weekly basis, of course you see, over the last six months in particular, you see cryptocurrency and it’s real applications, security and cryptocurrency, regulation of cryptocurrency. You’ll see that crop up. Maybe that is a 10-year theme.

Maybe. You don’t have that many experts, actually.

That’s right, but we do have experts in the things that cryptocurrency touches. If you’re interested in gambling in cryptocurrency, there are people that know gambling. If you’re interested in banks and cryptocurrency, people know banks. The Internet of Things is usually the third biggest.


That’s big tech companies trying to understand how refrigerators work, for example.

How refrigerators work?

It’s an example, but the idea is that you’re going to put technology in real things, in watches, in refrigerators, in cars, then much of the people developing those technologies don’t know watches and refrigerators and cars. They just know the technology.

They want to learn about that.

They want to learn about it.

Finally, finishing up, I was going to talk about New York, but I don’t know, do you consider yourself a tech company or what? How do you look at yourself?

We very much started as a technology idea, and then we put services on top. I just go back to Uber meets Harvard. There’s a people side and there’s a technology side.

Uber isn’t a technology company. It uses technology.

It uses technology. It’s a people business that uses technology. I suppose Yelp is in the same category in some ways. We are some blend.

Now tell me what are the strangest things people have wanted to learn.

Expanding a biscuit business into Malaysia, for example.

I wouldn’t even begin to know where to find that expert.

Neither would I. If you look through it, it’s a very long tale. It’s not long in that it gets a consumer, and there’s no, “Is Bieber getting married?” That’s not the kind of thing we look at.

He is.

Is he?

Yes, I’m an expert on Bieber and Selena Gomez.

I will sign you up and you can do that project.

I don’t know who would want that information.

There’s an answer out there. It’s not that long, but there’s so many things that are strange, that the average one would be strange. The things that are probably less strange are, “How do I grow as a professional?” It usually is more specific. It usually is things like, “How do I build an HR organization that can support a culture that I want to build? Can I talk to people like Patty McCord in doing that? Who do I talk to?”

I was just going to say Patty McCord, call her.

Would be amazing. Who can I really learn from? It’s not just Patty because Patty has one perspective, but how do I talk to the head of HR at Procter & Gamble too because that’s less fancy, but probably has really strong perspective and years of understanding how those kinds of company …

Then you call the head of Procter & Gamble HR and they say?

Not the current, you’d call the former.

Because the current would be like, “I don’t want to help you.”

No, the current may very well want to teach if you find the right student. If you find an amazing startup that’s doing something that they’re interested in, he may very well want to do the project, or he or she.

Last question: As we enter the future, how do you imagine we will learn? This is a highly customizable way we’re learning. I think you’re getting a chip in your ear, and that’s going to be like that, like “The Matrix.”

The physical property?

Yeah. Just you’ll have a chip. I want to play the piano and there will be no learning.

If the chip gets all the way in your brain, I guess it’ll figure out how to play the piano for you. In the intermediate period, I think you’ll be able to say, “What do I need to really know about learning the piano?” and the very best knowledge on that for you. It’ll watch the way you play the piano and say, “Oh, I’ve got to change the course.”


“Oh, I’ve got to keep changing the course and keep being adaptive.” Maybe it means I’ll put you in touch with a different teacher because you’re not ready for this little piece. This person’s really good — to use the piano analogy — this person’s really good at playing the piano. This person’s really good with your fingers. This person’s much better with reading music. This person’s much better with this. You’ll just have a constant stream of the best expertise from all those people.

I think my chip is better, Alexander.

The chip just goes straight in?

Right in.

You just play?

Martial arts or anything. Expert.

Then we would just be learning, and I agree, that would be a different space.

Exactly. Anyway, I appreciate it. This is a really interesting talk. Thank you for coming on the show.

Thanks very much for having me.

Recode – All

Cash For Apps: Make money with android app

Katie Couric and Kara Swisher interview each other on Recode Decode

How Complete Beginners are using an ‘Untapped’ Google Network to create Passive Income ON DEMAND

Kara: “I think being irritating is the most important muscle skill that any [journalist or entrepreneur] has to have.”

On this episode of Recode Decode, hosted by Kara Swisher, journalist Katie Couric turns the tables on Kara and interviews her for her own podcast, called Katie Couric. The two cover topics including the responsibilities of tech, diversity and the future of work.

You can read a write-up of the interview here or listen to the whole thing in the audio player above. Below, we’ve also provided a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

Kara Swisher: Recode Radio presents Recode Decode, coming to you from the Vox Media podcast network.

Hi, I’m Kara Swisher, executive editor of Recode. You may know me as the opposite of America’s sweetheart, but in my spare time I talk tech and you’re listening to Recode Decode, a podcast about tech and media’s key players, big ideas and how they’re changing the world we live in. You can find more episodes of Recode Decode on Apple Podcast, Spotify, Google Play Music or wherever you listen to podcasts. Or just visit Recode.net/podcasts for more.

Today, we’re gonna to do a little something different. That person you found laughing in the background, I’m talking to Katie Couric, who has hosted shows … Katie, is this right? NBC, ABC, CBS and Yahoo.

True that.

We’re gonna be discussing … And NatGeo. We’re gonna be discussing our careers in media.

I can’t hold down a job, Kara.

I know, you’re like jumpy with the jobs. Media, technology and so much more. And then the discussion will be posted on both Recode Decode and Katie’s podcast, which has a great name, it’s called Katie Couric.

How original.

I know, I don’t name my podcast after me.

I know, I honestly wish I … But everyone encouraged me to just use my name because …

You should.

I don’t know.

You’re very famous. I was going to be Kara’s Korner with a K but then no one liked it.

That’s pretty cheesy.

Yeah, it is. And then I was going to open a store along with it. So we’re gonna go back and forth. Apparently, you have lot of questions for me.

I do. I do.

But I’m gonna start with you though. You just got back from the Olympics.

I did.

What was your job there? What did you do? You were on NBC.

I was.

Back on NBC.

I think they needed a veteran person to host the opening ceremony.

They’re going through those pretty quick.

Singular. Not opening ceremonies, opening ceremony for NBC. So Mike Tirico, who I think has done an incredible job. Kara, I don’t know if you’ve been watching …


He is the new host of the Olympics. Bob Costas decided he had enough and so …

He had a lot of Olympics.

I think because it was Mike’s first rodeo, in a way, covering the Olympic Games, they asked if I would co-anchor the opening ceremony with him, which was really fun. I had done it three times before. I had done it for Salt Lake City, Torino and Athens.


Not Torino, sorry. Salt Lake City, Athens and, shoot where’s the other one that I did?

I thought more global.

I’m sorry.

That’s all right.

I just thought … Wait, hold on. I did Salt Lake City, Athens and Sydney!

Sydney, okay.

Which was my favorite Olympics of all because I love Australians.

Oh cool. And so how did you like it? What was it like to be back in that Olympic anchor chair? I don’t know what they call it.

Well, it was sort of like riding a bike. It was actually really fun. You know, the thing about the opening ceremony, it’s a whole mix. Obviously, there’s some sports involved and you need to familiarize yourself with the various athletes, but it’s really quite geopolitical and cultural as well, and you want to be knowledgeable about the host country. It’s an opportunity for that country to really strut its stuff and sort of put itself on a world stage.

Right, with the outfits, too.

We had a bit of controversy because our cultural expert made a comment about Japan, which I think was … I don’t think it’s safe to say it was misinterpreted but it was probably a little impolitic. And what’s sad about it is he’s so smart and knowledgeable and incredibly culturally sensitive, so for this to happen was very disappointing.

There’s been a few of those.

It angered a lot of South Koreans because of the Japanese occupation. I think he was maybe overly complimentary about the Japanese and they were very, very … Many people were very, very upset about it. Other than that, and the fact that I made a comment about the Dutch skating on the canals, it went swimmingly. (laughs) Because they all got … I heard from people from The Netherlands who are like, “You’re a moron, we don’t skate on the canals,” but I was trying to salute the rich tradition and why the Dutch are such incredible speed skaters but I think I was sort of … You know how you say you’re five minutes ago, I was like a century ago when I made that assessment.

Yeah, that’s right. Otherwise, there’s not even the slight chance to mess up at these Olympics anymore.

Oh my gosh, it’s so interesting in the age of social media, Kara, as you know, it’s like everything you say gets … People have a voice and they use it and many times that’s really good, and many times it makes it difficult to be a public figure, as you well know.

Well, I don’t care.

I know. I wanna be more like you, Kara. I get my feelings hurt. I’m sensitive, and I’m like, “Oh no,” and then I lose sleep and I get so upset.

But you do a lot of social media. But you do a ton, like the other day there was like soup, you were making soup on social media. What were you making? Stew? Chili?

I actually had a lot of fun with InstaStories.

Right. Yeah okay, explain this because you are on … So you’re one of the few … I wanna go back a little bit. I know you have a million questions for me but I want to go back in your career, cuz you’ve been quite digital compared to most people of the anchor era.

Well, given the fact that I’m a 61-year-old woman, I actually have tried to embrace new technology and I’ve always tried to be a little foreword thinking. And the one thing I am good at, Kara, is I think I have the sixth sense of what is going on in the ether or the zeitgeist and I try to adjust to it accordingly. Sometimes I’m a little ahead of the curve, honestly, but I’ve just tried to understand that the media landscape is changing dramatically. People get their information, consume it in very different ways than they did when I was starting out in the business, and so I’ve just tried to be smart about it.

Because you were on a broadcast just recently, so you’re sort of back to the old big, big engine broadcast that you just power through. How did that feel, because you’ve really been doing digital and much different kind of broadcasting.

Yeah, I mean I’ve still tried to keep my hand in traditional linear television. I’m doing a six-hour series for National Geographic right now.


I did a documentary about transgender issues for NatGeo. So, I’ve kind of tried to be media everywhere, if you will, by iterating content for different platforms, and doing content that’s suitable for various platforms. I mean, that NBC Olympics team, that is a massive machine, and I have to say it was great to have …

The one thing I do miss about not being at a broadcast network is that esprit de corps, you know, that sense that everybody’s kinda working together for … I was going to say for the common good, which I don’t know if you can actually say that in television, which is pretty damn cut-throat. But you feel like there’s this kind of community, this sense of we are all kind of marching in step and rowing together and trying to make our network be the best, and so that was really fun.

Right, rather than being a single player, essentially.


So can you just review … I promise you’ll get to ask me questions.

Good, good, good.

Everyone knows your career. You don’t have to go into your long and storied career, but you were at all the networks. You worked for all of them, which I think is astonishing.

Except for Fox, I never worked for Fox.

There’s a chance still. There’s a chance still you could do it. Do you see it happening?

No, it was so interesting though, Kara, the other night when I was in San Francisco, I decided I’m just going to check out Fox cuz I like to hear what different networks are talking about. I don’t really watch that much television anymore, but I was laying in bed, I was sort of exhausted and I thought I’d turn it on, and you can see why the county’s so divided, because it’s a parallel universe. When you look at the kind of stuff you get on MSNBC versus the perspective you get on Fox from like Sean Hannity and Laura Ingraham, no wonder there are two Americas, right?

Yeah, absolutely. Well you went right to the belly of the beast there. I can’t watch either. I mean both of them are upsetting on some level, in some way. I think Fox is more upsetting, but they definitely have a different point of view.

Do you feel like it’s … Do you watch it sometimes to get that point of view? Because I think it’s helpful to hear what different people are saying about different topics, but it’s confusing because then you’re like, “Well, who’s right?” And everyone does have their truth now and their perspective and gosh it’s just hard, I think.

Well, one of the things is they … On MSNBC or CNN, one of them, they always have a Trump person on it or someone who’s anti, so you do get those points of view. They always like to make it into … I find it completely, the whole thing reductive and ridiculous.

It is so reductive.

It’s like the movie “Network.”

I feel like nobody’s talking about the big issues. They’re all talking about sort of the latest tweet but nobody’s talking about what are the issues, what are the challenges of immigration reform?

Right, exactly.

What needs to be done specifically? What’s keeping us from moving ahead? What are some legitimate complaints about illegal immigration? It has become so polarized that I think sometimes people really are not getting the information they need to make smart choices.

I think cable is so attractive in terms of watching it because it’s so easy to watch that it’s … I try not to, I think it deadens the soul. And Fox has perfected it, the others have taken it and done their own versions of it.

Well, it’s affirmation not information, isn’t it?

Yup, 100 percent. And so it just exhausts me. I think cable has done more for ruining our democracy than almost anything, besides the Russians these days.

Phil Griffin and Jeff Zucker on line two for you.

I know, but you know what I mean, that whole … I so think Fox led it, like created the thing. When they try to be more thoughtful it’s really helpful. I think you were come from the era where there were thoughtful broadcasts that you put together every night.

Yeah, and I do think young people are gonna wanna return to that, in a way. I’ve been very heartened to see all those kids in Parkland, Florida, Kara. I was just crushed and devastated for those families. I can barely even talk about it, and to see these young people … That Emma Gonzalez, who gave that speech at that rally, and “We call B.S.,” I felt so proud of them. Because I talked to Mark Barden — who’s a friend of mine, whose son Daniel was killed at Sandy Hook — last night and we were saying, second graders who survive a school shooting can’t really use their voices, their parents are so grief-stricken, understandably, of course, as much as they try, it’s hard. But these kids, they mobilized in a nanosecond. They’re doing a march on Washington and in communities all across the country, and they are like totally mad as hell, and they’re not gonna take it anymore. And I have found that so inspiring.

It’s social media that they’re using, which is really interesting. They’re using the tools that they’re very good at to do it. You can put thoughtful things in these mediums. I mean, it’s such a canard that you don’t have to.

I agree.

Same thing with cable. Same thing with all of them. You do not have to make it as reductive as it is.

I don’t know … Yeah, why do you think media companies, for so long, clung to that and really …

It’s cheap.

I guess it’s sort of the M.O. to basically feel that people are too dumb to absorb important substantive information.

Or that they can’t listen for more than a minute. That they can’t …

Well, podcasts is totally … I mean, look at how podcasts are growing, that’s totally disproving that.

Right, 100 percent. When I started my podcast several people, this was years ago, I did it three years ago, and several people who were experts were like, “People won’t listen for an hour.” And I was like, “Well, I’m gonna talk for an hour.” Our whole premise at Recode has always been substance.

It’s so true. And Kara, like my daughter Carrie is a senior in college, and she is so funny. She’s like, “Hey Mom, there was a really good thing on The Daily about North Korea, you need to listen to that.”


Or, “Did you hear? I heard this on NPR.” And it’s so interesting because Carrie will be listening to podcasts while she’s brushing her teeth or washing her face in the morning, and I’m like so proud of her that she is so engaged and it’s with smart material.

But she’s 12th grade so she’s the Gen Z.

No, she’s a senior in college.

Senior in college. Okay, so is she a millennial or is …

I think she’s on the cusp of millennial. I think she’s like a Gen Z/millennial.

I’m gonna make like a huge generalization but I think people use Snapchat and that era, it’s not the Facebook generation, it’s sort of this Snapchat generation.


They are much different in how they use social media. They’re very careful and considered how they do it. They’re less relative. They’re less Twitter-twitchy. They use these mediums very carefully. I have a son who’s 15 and another who’s 13, and they’re both much more careful about how they use it and present themselves and consume the medium. It’s not twitchy.

Let me ask you about Snapchat because I wanna not only talk to you about some of these big media companies and get the latest skinny on it, but I also wanna talk about you, Kara. But first, I know Evan Spiegel had a good quarter. I get all the stuff on my phone, and I know that investors were a little heartened, but it seems like Instagram really took the wind out of his sails.

Yeah, they did.

With Insta Stories, which I’m totally obsessed with, which is actually a sickness which we’ll discuss later. But tell me what’s going on with Snapchat. I know they did a redesign and people were upset about it.

They did. They didn’t like it.

What’s the latest on that?

Yeah, my son texted me, he’s like, “Nobody likes this redesign.” I mean, I think these companies redesign continually, they’re always shifting and changing. And Facebook had 20 ones that people didn’t like so I think they just have to go with the way they wanna do it and hope for the best.

And people will adjust.

Yeah, I don’t obsess on redesigns, unless they’re truly awful, like a new Coke.

Yeah, yeah.

You know, something that really doesn’t work. And people get used to the way they’re using these things so I don’t over index on that. That said, they’ve got to be very careful because what happened is years ago Facebook tried to copy … tried to buy Snapchat, first of all. Facebook is essentially their mortal, not their mortal enemy, their killer really. They’re trying to kill of Snapchat. They tried to buy Snapchat and he put it off. He’s a really interesting, in visionary, entrepreneur, Evan Spiegel. I think every time I talk to him, I’m always fascinated, and I can’t say that with everybody I talk to.


And he’s got a big sense of where things are going, and they really do have an advantage in that it’s not a twitchy medium, even though I don’t use it that much and I do know how to use it. But it’s a different … It’s a communications medium, a lot more like WeChat in China, if you ever use that one.

I don’t use WeChat.

But Facebook had just decided to try to kill it, so they tried something, I think it was called Poke or something like that, which is just an awful name for a medium, based on the pokes on Facebook essentially. And that didn’t work and didn’t catch on. And then they used Instagram to do this, to do Instagram Stories. And I had Kevin Systrom, who was the founder of Instagram, on my podcast and he … People complained about it, they basically thought it was shoplifting or plagiarism, in terms of how they borrowed what Snapchat was doing. And he said, look, we are doing the same thing they’re doing but someone invented the car radio, should we not make better car radios? That was his argument, we’re making a better car radio, and good for them for inventing the car radio but too bad.

I think he was saying that the nature of technology is that people build on, just like Jobs and Gates stole … They borrowed the stuff from Xerox Park, the graphical user interface. It happens and happens again, and I think the problem for Snapchat is that Facebook can just roll, eventually will get it right just like Microsoft did a million times on a bunch of other tech companies.

So, what does that mean for Evan Spiegel and Snapchat and how does Instagram compare?

Well, he’s so creative, that’s the issue, I think … And so is Kevin Systrom, by the way, who runs Instagram. But I think it’s hard, I think it’s super hard to compete. I mean, the era of big tech companies now is really here. I was talking to someone the other day, a venture capitalist named Sarah Tavel, and she said it’s really hard to make innovative companies anymore because … And there will be innovative companies, it’s not gonna never stop, but the powerful companies Apple, Google, Facebook …


And Amazon, it just creates like a really difficult … And they’re buying up companies and they’re being innovative and iterative themselves and so it makes it super hard for small companies to break in.

Facebook has gotten a lot of bad press lately, obviously.

Yes, they have.

About Russia and about all kinds of things. So can you just catch me up on what’s happening at Facebook and what do you think the outcome is gonna be of a lot of this criticism?

Well, you know it’s interesting, you don’t follow Twitter that carefully, but I had debate with Facebook executives this weekend on Twitter.

Oh that must have been fun. I’m gonna have to go back and check that out.

They lost. They lost. It’s gone. It’s gone, Katie.

They lost?


Oh god.

Here’s what they did. They’re very sensitive. First of all, they did a very slow roll about the uses of their platform by Russia in terms of initially last year, Mark Zuckerberg said there was no impact whatsoever.

But they said that again, even recently, right?

Yeah, they do.

They didn’t sway the election, which is an unknowable thing to conclude.

Unknowable, yes. Well, they just keep saying it …

If they say it, it’ll be so.

It’s like Trump, right? They just keep saying, the crowds were bigger, the crowds were bigger, the crowds were bigger.

I think one of the things is they’re very technical and mathematical people and so they’re being very accurate about certain things they’re saying and focusing in and missing the forest through the trees.

Isn’t a lot of this stuff unquantifiable?

Some of it is. Some of it is, but I think the overall issue is that they’re technically saying, these ads were not run … These ads weren’t, they weren’t talking about the content on the platform, it’s so much larger and bigger than they’re discussing. But technically their ads were bought at various times and so their whole premise around this is that these ads didn’t sway the election, and everyone else is like, well there’s an indictment by Robert Mueller that shows how they used primarily Facebook and Instagram to really invade the system and take advantage of the system. And I liken it to, if you think about what if Russia had bought all the advertisements on a network or run the content of a network during a presidential election and swayed it.


They don’t wanna take responsibility for the fact that their platform was used by a malevolent power to create discord in our country, and that doesn’t seem to bother them as much as technically our ads weren’t bought until here. The platforms were used and abused because it’s sort of like, why would you rob a bank, that’s where the money is, that’s where the people are. And so these platforms — Facebook being the biggest one — have been much abused by malevolent powers.

So what’s gonna happen, when you think about Facebook, Kara, and you think about, say, YouTube, which has also had a lot of problems with pornography and inappropriate content and advertisers are now shying away from that, what is the solutions for these companies, when the genie is out of the bottle?

I just had a long interview with Susan Wojcicki at one of our events earlier this week, actually, who’s the CEO of YouTube, very thoughtful person. And I just had her on an MSNBC show …

I really like her.

She’s great. She’s great. But I mean, they’re trying really hard because they know these platforms are massive. I think it’s a trillion hours a week or something, it’s some enormous number that’s being uploaded to YouTube and all these social media platforms and so the ability of them to monitor it, is enormous. Obviously, people can’t do it. It’s not feasible for people to do it, it’s not scalable.

And then secondly, the technology around AI and other machine learning in order to maybe control this better is still in its infancy and very problematic. So they’re trying to figure out how to maintain order, I guess, and at the same time pretend they’re not media companies. And so when I interview them I do a lot of, “Well, are you a media company?” “No, we’re …” I think Susan was like, “No, we’re a technology platform whose end result is media,” or it was some really convoluted way of saying …

Why do you think they’re so reticent to kind of admit?

Because it requires responsibility. That means they’re responsible. The New York Times cares if it’s wrong, right? Whatever people think of the New York Times or whatever, the liberal media or whatever. You know, working at any of these institutions, we care when we’re wrong, we say we’re wrong, we correct and it matters. There’s a great deal of heaviness to the responsibility.

Well, they say they’re the pipes, they’re not the stuff that goes through it, right?

Right. Even as they ruin the business plans of every publisher, you know what I mean. It’s a different kind of media company, but they’re a media company. But the minute they admit they’re a media company, it means they have responsibility for what’s on their platform. And there’s lots of laws why they don’t want that to happen, too. They wanna just say they’re a benign platform, essentially.

Do you think that’s ever going to change? How do you see this all …

No, I don’t think that there will be any regulation. There’s always talk about it, and obviously … I’m interviewing Cory Booker and others, the Democrats are suddenly, which were the friend of media, the friends of the internet, are now turning on the internet.


Which is interesting. And so we’ll see if the Democrats get in power if there’s more regulation, but so far the U.S. and where most of this is taking place, is toothless. Europe, on the other hand, there’s a woman named Margrethe Vestager who’s been very tough on all the big media companies in Europe.

Who is she?

She’s a commissioner at the EU, I think it’s for competition, I forget her long title, but she’s … I did a great podcast and interview with her. She’s really an interesting force and she’s the one that’s levied all these fines on these companies and really has the teeth to really bother them in these countries. And I think the European Union and Europe has a very different point of view on privacy, on abuse, on all kinds of things that is problematic for the U.S. tech companies. But in the U.S., they roll over, everybody rolls over. And obviously, ort tweeter in chief, our troll in chief, Donald Trump is using the medium to his own advantage.

But when we get back … We gotta break for a commercial and when we get back we’re gonna go real deep with you and me, Katie.

Okay, sounds good.

All right. We’re here with Katie Couric. She and I are doing a co-podcast and when we get back we’re gonna talk about our careers. I have to ask you questions about Yahoo and more.


We’re here with Katie Couric, we’re doing a joint discussion.

This is so fun.

Is it fun?

I feel like we’re having lunch and just hanging out.

Nobody knows this, but we like each other, Katie Couric, don’t we?

Yes, we do, Kara Swisher. I admire you, I like you. I think you’re really smart, really funny and really good at what you do. So speaking of that, how did you get into this crazy business? I know you went to Georgetown. You started writing for your school newspaper.

No, I didn’t. I did not write for my school, at Georgetown.

Oh, you called the Washington Post to bitch them out about an article, which made me laugh.


Cuz you thought that they did a bad job covering something at Georgetown.

Yeah, I did. I was mad at them for a piece on, I’ll date myself, Roberto d’Aubuisson, do you remember him?


From Nicaragua, the awful killer of women and children in Nicaragua, he led the death squads.

That’s right.

I thought it was irresponsible. They didn’t do a good job covering him, so I was kinda pissed about it.

Well, you know what I thought was really interesting about that story, Kara? I don’t remember the editor to whom you spoke.

It’s Larry Kramer.

Larry Kramer. Not the Larry Kramer.

Well, it’s the Larry Kramer in journalism. He’s now a USA Today publisher, I think.

Oh that’s right, okay. Wait, who’s the other Kramer?

The playwright? Playwright Larry Kramer.

No, not the playwright. The guy at MSNBC.

Oh! I don’t know, there’s so … Larry Kudlow.

No, no the guy who screams all the time.

Oh, Kramer, Jim Kramer.

Jim Kramer, sorry. I was getting him mixed up with Jim Kramer. So Larry Kramer, which I really thought was cool, said, “Come in and talk to me about it.” Now if he hadn’t done that, do you think you would have gotten into journalism anyway?

That’s a good question. Yes, I was. I was already really writing a lot. Yes, 100 percent.

But still.

I think getting that break to go to Washington Post was a big deal, and it was a big deal because you know how it elevates you when you go. Where did you start? You started out at like a small …

I started at ABC News in Washington getting out Frank Reynold’s ham sandwiches, making coffee and passing our Xeroxes of the rundown.

Guess what I did, I delivered mail. You know that. And you know what was really interesting about working from the beginning is, I was in the mail room and I did night news aide and things like that at the Washington Post when I was younger, when I was in college, was that you understand the dynamics of politics of a newsroom much better from a lower rung. I don’t know if you did. I learned that really talented people weren’t quite as difficult as the less talented people.

Yeah, I don’t know if I learned that, but I did learn through osmosis, just kind of how a newsroom worked. I think it sort of feeds your curiosity. You watch people who you admire, who you think are good, who are tough, and I also think it makes you think, “Hey, if they can do it, I can do it, cuz they’re not that great.”

Right, exactly. I think you probably did the same thing, I took every opportunity I got. Every time someone handed me a chance I took it and like, oh, “Someone go to the Smithsonian to write about this dumb rock collection story,” and I just said, “I’ll do it.” “I’ll do it” was my …

Definitely. Right, say yes to everything. I know I did this book of advice a few years ago where I just asked people to write essays, sort of the secrets of their success cuz I thought it’d be a nice graduation present. And I gave all the money to Scholarship of America, which gives underserved kids an opportunity to go to college. And that’s what Ryan Seacrest said, of all people, he said, “Say yes to everything.” And I think that is a really important and a valuable piece of advice for people starting out. Don’t you, Kara?

Yeah, I do, absolutely. I think one of the things … It was more than yes, I didn’t just say yes, I just literally would do whatever, that kind of thing.


I think one of the things … I was talking to someone the other day, they were like, “What do you regret?” and I’m like, “I didn’t really travel.” I went right to work, like I worked, I think you probably did the same thing. I didn’t really take time off. I didn’t go and find myself in Thailand.

I know. Well for me, work is like oxygen.

Yes, agreed.

I have to work, and I know you feel the same way and I’m wondering, I didn’t realize, I feel like I know a lot about you, but I don’t think I knew that your dad died when you were just 5 years old.


And he had a cerebral hemorrhage.

Yeah, sudden.

Yeah, and he was how old, Kara?


34 years old, which is so heartbreaking. And that was the age that Ellie was when Jay died, my late husband. Do you remember your dad?

You know it’s funny, I do in bits and pieces and I don’t know how much she does … A lot of people whose parents die at a young age are, it’s something called highly functional, because they become … half their life goes away, really, if you think about it. If you’re 5 you don’t have much reference to other friends and family and things, you reference your parents pretty much. And so you get highly functional because the worst thing in the world happened to you and you survived.

I think a lot of people, kids whose parents died at a young age, become one, they work, they just move faster because they realize the ephemerality of life, and then at the same time they can deal with things, things don’t bother them that much, both negative and positive. You wanna be bothered by certain things in life, but you definitely roll on through.

Is your mom still living?

Yes, she is, oh yeah, she’s in Mexico City right now.

Do you worry about her a lot? Cuz the one thing I noticed, and I had talked with Carrie, my younger daughter about this, because Ellie was at such a formative age, Carrie was just 2 and Ellie I guess was 6, had turned 6, and she gets a lot of anxiety about me because I’m her only parent. Do you feel that way about your mom?

No, I don’t. My mom drives me nuts.

I’m sorry. I’m sorry.

No, we’re an Italian family so no, I do not worry about her. She loves her Fox News so let me just say, so that’s been a great time this past couple of years.

Oh, interesting. Do you guys not talk about politics at the Thanksgiving table?

Oh my god, she never shuts up. I had to throw her out of Thanksgiving once cuz she voted for Rick Santorum, but that’s a long story.


She said he wouldn’t because he was for anti-gay stuff, and I said, “You can’t vote for him and continue to have Thanksgiving [here].”

Where does she live?

In New York City, and everywhere. She’s in Mexico City right now, I think.


She travels.

That’s interesting.

She like an Auntie Mame kind of person. Yeah, Fox has poisoned her brain completely. But she’s okay, she’s pretty funny. You’d like her, Katie. She’s fun …

She sounds fun. We’ll have to take her to lunch or something.

We’ll take her to lunch.

Not talk about politics too much.

Oh she doesn’t like Trump so much, but she likes Fox News, oddly she can’t stand Trump.

Wait, I want to do a little more of your career stuff. So after the Washington Post … I mean, you are such a force, Kara, and you’re sort of the most well liked and feared, I’ve read that a million places, journalists covering in Silicon Valley. How did you get so interested in covering technology?

The tech? I covered Steve Case from AOL. I was here in Washington at the Washington Post and I covered the internet early, early on when there was AT&T interchange and all this other stuff. So I was super struck by the internet from a very early age. Washington Post had a phone I’d use, a big old heavy one, it was in a suitcase. I was riveted that there was going to be a mobile phone for some reason. That was stuck in …

Did you have one of those Maxwell Smart car phones that looked like a shoe box?

It was not in my car but it was suitcase that I brought in my car that the phone’s in. And then I had one of the other phones that looked like those big ones. I’ve had phones forever. I was one time on a vacation with someone I was going out with, and I was in the middle of the bay in Provincetown, it was low tide and so I could walk out pretty far, and I was like, “It works out here!” And I think they broke up with me right then.


Yeah, no. I just went on a vacation to Mexico with Nellie and it was supposed to be without any internet or anything else and of course, I managed to find a cellular connection somewhere.

You managed to find the one square foot where your phone reception would come in.

I did hike up the giant hill to get there, but whatever. It’s details, Katie.

Do you worry about tech addiction? Because that’s something that I am worried about, not only for myself but for people in general.

Yes, that’s another big issue with these internet companies.

I see my daughters … One of the hours I’m doing for NatGeo — shameless plug — is talking about, is technology making us lose our humanity? Because it is really changing, dramatically changing the nature of our relationships.

And one thing I heard, Kara, from an internet expert, an addiction expert out in California I interviewed, Larry Rosen, he said that kids are actually developing plague in their brain because phones and screen time is actually interrupting the melatonin in their brain and increasing cortisol, and they’re very, very worried about early dementia among these addicted kids, which was enough to freak me out.

Oh my goodness. Katie, that’s terrible.

I’m sorry to break the news to you.

So I’m completely demented right now then. It’s nothing to joke about. I agree, I think it’s going to be a big topic this year. People talk about this and again, this is the next wave that hits the companies like Facebook.

Definitely. And you hear more people making noise. One of the guys I interviewed, Tristan Harris … I love him, Kara. He’s such a remarkable young man. He’s 33 years old, he quit Google, because … Was it Google?

Yeah, Google. He was at Google.

Yeah, because he felt like these internet companies or tech companies are manipulating us so much, and they’re making us addicted by …

They’re also taking, same theme, not taking responsibility for what they’re doing. And so one of the things … People are likening him, I mean media companies are likening to cigarette companies. I think that’s taking it slightly too far, but there is a question of how much warning people should have, how much knowing, how much science needs to happen around this stuff.

I feel like nobody’s really … That’s one of the reasons I wanted to do this hour, we’re operating and it’s like minute by minute, and nobody I think in the media culture takes a step back and says, wait a second, let’s take a look at some of these big issues. Because I think this is such an incredibly transformational time in almost every arena. But nobody is sort of debating it or talking about it.

Well they don’t want to. These internet companies don’t want to do that because I think what they’ve been doing is growing at breakneck speed, and one of the things I started to do last year, right when they went to visit Trump, you remember that? They all trooped up to Trump Tower.


And didn’t say anything about immigration. And I wrote one of these scold, scold columns about it, talking about, how dare you do this without discussing immigration. This guy had been so anti-immigrant, which is has been the fuel for Silicon Valley essentially, immigrants. All the major companies founded by immigrants: Elon Musk, Sergey Brin, Satya Nadella, Steve Job’s father was an immigrant, Susan Wojcicki’s father is from another country. So I was really angry at them for doing that, for walking up there.

And they’re like, “Oh well, he doesn’t mean what he says.” I’m like, “He means what he says around this topic cuz he said it so many times, it was one of his basic promises to his constituency.” So I think what they want to do is sort of act as if they’re the saviors of humanity and take no responsibility for what their inventions create.

And tech addiction is just one of the many, and at some point you do … Like I get a lot of pushback, this past year was like, “You’re such a scold,” and I’m like, “No, you need to grow up and start to understand,” not just tech addiction, but job displacement, like what’s gonna happen around AI and automation.

Can we talk about that, too?


Cuz that’s something I address in this hour. 38 percent of jobs are susceptible to automation, eliminating them by the early 2030s. I know you did a town hall series with MSNBC about that and with jobs in the future. This is something that I’ve been really interested in because these jobs are not being lost to globalization, they’re being lost to automation.

Robots, AI.

It’s a huge dilemma and I think it’s actually part of what’s feeding white, working-class frustration, another hour I’m doing on NatGeo. So what is the solution here?

I don’t know because I got the inspiration for doing that series for NBC from Marc Andreessen who have been arguing with for decades and how … He and I argue about all kinds of things. But one of the things he was talking about was that it’s like farming to manufacturing condition.

It definitely is.

Except that happened over 70-some years and it was a huge political uprising because of it, and now in this age of social media and also constant and repeated media everywhere, and people’s feeling so apart from each other and so partisan. It’s a powder keg, as far I can tell.

I agree.

You really created a situation … You know, Steve Case has talked about this. J.D. Vance’s great book “Hillbilly Elegy.” There is a massive transition about to happen around jobs that people are not paying attention to and I don’t want to be one of those …

Joan Williams also wrote a great book based on a Wall Street Journal piece that … No, Harvard Business Review article just called “White Working Class.” Which talks a lot about cultural, class cluelessness and cultural condescension and all this stuff. I highly recommend.

Who is thinking of it? I don’t wanna say like, there’s not gonna be better jobs in the future, but what are we gonna do about it? One of the things that … Nellie just interviewed Robert Reich, who was the former Labor Secretary.

I love him.

And one of the things that he said in this interview, they did a New York Times thing on AI, it was an event, and one of the things that was the best quote that came out of it was, she was asking about universal basic income — which is you pay people, essentially, when jobs get lost, and it’s very controversial. It feels like communism a little bit. It’s questionable, but it’s one of the ideas of how to deal with this joblessness, eventual joblessness. He said, you either pay them, these numbers to pay people to not work, essentially, or you’re gonna pay to bulletproof your Tesla. And I was like, oh wow, that’s … You’re gonna create this sort of Brazil-like situation where there’s very poor and very rich.

My question is, who’s thinking about it? Who among our … Is it the tech companies? Whose responsibility is it, the tech companies? The government? Is it citizens?

I think it’s all of the above, but you’re right, it’s very frustrating that people are kind of like, just have their head in the sand about this. Zoe Baird is working very hard on this thing called Skillful, and she’s working with Governor Hickenlooper in Colorado, to try to come up with a way to retrain especially displaced workers.

But I think our whole education system needs to be reevaluated. I went to Johnstown, Pennsylvania, where 50 percent of the high school students are involved in vocational training, and I just think that we have to really, everybody has to put their thinking caps on.

And where it’s going, because some of these jobs … There’s a great story in the New York Times recently about Sweden, that robots are doing mining, essentially.


Why should people … Like this whole thing about Kentucky going back to coal mining, people probably shouldn’t coal mine. It’s very dangerous. There’s certain jobs, rote jobs, that maybe people shouldn’t do anymore.


And it wasn’t good for people in the first place so why just have them there when robots can it better?

But I think what’s hard, Kara, is these are generational, traditional jobs that have been passed on. It’s part of certain people’s DNA, so we have to help rethink their whole thinking. We have to rethink education, rethink all the different possibilities and how for the get-go, from pre-K on, we start orienting people towards the job of the future. Thank you.

Thank you, President Couric. But they can’t even decide on lunch. They can’t pass a Dreamers Act. The Dreamers Act thing is just driving me crazy because it’s literally an advertisement to the rest of the world that we don’t like innovation. We don’t like innovative people, we don’t like people who work harder. It’s such a message to the rest of the world, which again, the technology and the innovation in this country’s been fueled by immigrants. No matter how you slice it, people coming in, fresh ideas, fresh thinking.

And also hard working.


The scrappy people who have something to prove, I mean those are the people who change the world, not people who, pardon the expression, are born with the silver spoon in their mouth, like many people we know.

Right, and the problem is, I think one of the things … We can get into diversity in the next section, but I do need to talk to you about Yahoo.

Okay, we’ll talk about that, but I also want to talk to you about like how you’re able to get so many people to talk to you and how you stay in the business without pissing people so many people off, they never talk to you again.

Well I’m about to piss everyone off, I think. At the end of my career is going to be one big disaster.

Really? You’re just gonna go out like …

I’m gonna go like a Roman candle, Katie. I’m going out big and ugly.

To finish up this section I think is, what I think about when I think about these ideas about not accepting people in this country, and keeping open borders and things like that to do this, including around the issues of diversity too, like not thinking bigger … I have this vision in my head of a small girl in Afghanistan who knows how to solve cancer, it’s in her brain, who’s gonna be the one who does it, who will never get there because of all kinds of issues, whether immigration or discrimination or whatever. We don’t know who hasn’t been able to invent things because of the barriers we put in people’s way that we could remove and create a better place. And I know it sounds like pie in the sky, but the more barriers we put in front of people to be innovative, the less humanity benefits.

I agree with you 100 percent, and I do think the internet is helping remove some of those barriers in terms of giving people a pathway to education and exposing them to ideas that they’d never be exposed to otherwise.

Right, well, we’re gonna talk about that more because you talked to James Damore and others for one of the pieces that I was talking on.

Anyway, we’re here with Katie Couric, we are talking about all kinds of things. We’re jumping from thing to thing but that’s why we’re so fascinating to everybody, including ourselves.

Really, truly.

When we get back we’re gonna talk about Katie’s time at Yahoo and how I’m gonna go out in a giant cloud of something. Anyway, when we get back.


Okay, we’re here with Katie Couric. We’ve been talking about a range of things. Katie, obviously, is the famous, most famousist anchor person.

No, I’m not.

Yes, you are. You’ve worked for every network and Yahoo. You’re gonna tell me, Yahoo. Katie, what happened?

Well, I think it was a really interesting experience. I think that the real issue is that many of these tech companies … I mean, it was what were talking about earlier, they are not media companies, they do not care deeply about stories, about content, about true connection. I think they care about widgets and gadgets and delivery systems, but they aren’t really super interested in the vegetable soup that’s running through the pipes.

Right, right.

And I think it, for me, was just a bit of a culture clash. I think that the problems, the challenges of making sure people got good content was just not high on their priority list.

Right, so when you went in you were thinking what? You had been at these … you had left ABC.

Well, I thought … Yeah, I saw the world changing. I saw people consuming information. I saw this pipeline whether … Direct disintermediation, or using these pipes to reach people, was something that was incredibly promising and I thought Yahoo, I said to Marissa Mayer, I said, “Do you want to be known as the company who serves up stories about the boy who lived on Ramen noodles for 13 years or do you wanna kinda have really important, interesting, substantive interviews? Do you want to educate and enlighten people? Do you want to raise the bar?” And it doesn’t mean you can’t have the Ramen noodle story, but you could maybe do a high-low thing, like they do in fashion.

Yeah, sure.

You wear a sweater from Bergdorf’s and jeans from J.Crew. So she seemed to be open, but I don’t think she ever sort of understood the commitment that would take and I just think she had a lot of other things on her plate, in fairness. And so I wouldn’t say it was an unhappy marriage, but it certainly wasn’t very fulfilling for me because I had all this content, I was getting big interviews.

You were.

And it was sort of like a tree falling in the forest.

Because they didn’t put it on the front page or what was …

Well, they didn’t put it on the front page or they didn’t really know … Even now they really don’t have very good distribution. They didn’t really know how to market things properly. They didn’t really know how to take quality and make it scalable.

And at one point, you were paying for Facebook ads, is that correct? To get your stuff out there?

No, no, no. I wasn’t paying. I did bring someone in who was really an expert on micro targeting because I would say to him, “How can my stuff get seen more?” And I would say to the Yahoo folks, “Can we please do a newsletter, I’ll totally push out everybody’s content, I’ll make sure everyone sees Matt Bai’s column or I’ll make sure that people see Joe Zee’s fashion thing.”

Yeah, because they hired a lot of people.

Yeah, they hired some big names and yet they were in the witness protection program. So I said, “Let me help you, help them, help us, help everybody.”


I don’t know, maybe it’s because they were kind of at that time — and are — a legacy tech company that they had kind of lost their mojo to innovate, I think in way.

No, it’s an attitude throughout tech. The content doesn’t matter.


They talk about it.

They have no respect for content.

It’s not even no respect.


Not even that. It’s really weird. It’s like, oh, it’s just another thing they’re pushing through the system, essentially. It doesn’t matter.

I think the secret sauce are people who are technologically savvy but also respect and care about storytelling, and the company that I think combines those two things is gonna win the day. And I haven’t really found it yet, have you? Well, I guess Vox, in a way.

We try to, but we don’t own the pipes. I do think sometimes, when I talk to Evan Spiegel, I do think well at least he gets the concepts around it. Like the idea that you differentiate or you curate, and I think that’s the question is, the curation. And I think one of the things that I’ve found fascinating from your tenure at Yahoo, besides all the other things I was writing about there, was they made this enormously high-profile hire — and you are. It was a big giant hire that they made. And then they literally hid you anywhere they could put you.

It was so weird, right?

It was.

As a business proposition, it’s not like I’m all that and a bag of chips, but if you are going to invest in somebody like me, who has a quote-unquote brand, which — I hate that — but who is recognizable and who has a connection with people, why not leverage that? It was bizarre.

I don’t think they meant it in the first place.

No, no, no.

It was just a thing. They never intended to do it, but it sounded good.

It was like a good press release but it was sort of …

But they hired a lot of people so it was more than … It was something. You know what I mean? That was what was interesting, the whole … It was sort of a side-light and I don’t think it was as cynical as a press release. I think they thought they wanted it …

No, I think you’re right. I think they just didn’t understand what it required, and I would try to say, “Hey, let me bring this person in to run media, who really gets it,” and they just … I don’t know, it was strange.

So you left because why? Cuz then it had changed, Marissa was taking …

I just didn’t see them shifting their attitudes and at some point …

Even under Oath? I just interviewed Tim Armstrong.

I like Tim, I think he’s great. I told him I thought the new name of the company should be Rize, R-I-Z-E, cuz it’s sort of like Verizon, and it’s aspirational and positive.

Oh I like that, Katie Couric. That’s a great name.

I think they paid a lot of money to come up with Oath, whatever. But anyway, so I think these companies are, maybe they’ll wake up and smell the coffee but I think they’re just very lumbering and slow. And so at some point, ironically, but at some point you want to do quality work and make sure that someone values what you do and makes sure that they hopefully want to get it out into the world. Which is increasingly fragmented, by the way.

Two questions though, Netflix just paid Ryan Murphy …

Right, 300 million dollars.

And Shonda Rhimes has a similar deal.

I know.

Obviously Apple just invested in a Reese Witherspoon thing that’s very expensive.

Based on morning television.

Exactly, it’s all about … It’s gonna be a Katie Couric character.

Not about me, I don’t think.

But you could consult for sure, you seem to know a thing or two about that. When you look at all that, though, they are moving rather heavily into that space.

They are. I think right now, I think that they are not super jazzed about moving into a more news space, maybe ultimately they will be, but right now I think they’re really focused on scripted content, and super kind of impactful buzzy stuff. I think in a news landscape, where there is so much content everywhere … I don’t know about you, Kara, but I read so many articles on my phone and I’m like, “Where did I read that? What was that? How did I know that?”

And it’s disconnected from the brand.

It feels very confusing but I think you’re right. I think the landscape is continually changing and iterating, as they say, and it will be interesting to see. But the most important thing is how are we gonna keep people informed and engaged in the world around them? I do think from what I said earlier, that a lot of young people, Gen Z, whatever you call it, millennials, really are engaged, but we have to continue to think about how we’ll continue to keep people engaged, you know? Because it’s so important to a democracy.

I know. What would you do right now if you were young? I mean you already …

If I were young?

Let me just say, everybody, Katie Couric is the hardest-working woman and we were having dinner and literally she was getting on … You were getting on a night flight, where were you going? You were going to like Alabama or somewhere. We’re like, “Katie Couric can rest.”

I know. I just love to work.

We’re like, “Katie Couric can take a minute.”

I don’t know why. My husband thinks I’m insane.

Yeah, and I work hard and I think you’re insane.

I know. I do feel like I have find to find a better balance. But what would I do if I was starting out in the business now?

I don’t know. At one point I’m like, “You did that Sarah Palin interview, you can retire now.”

I know, but I like to be engaged in the world.

I get it.

I like to be talking to interesting people.

Everyone’s saying, “What would you do if you were young?” What are you interested in now?

Interested in now?

Yeah, cuz look, broadcast is sort of shifting so dramatically and you tried the Yahoo thing. Although, that doesn’t mean that that didn’t work. But where were you looking at or where would you go?

I think I’d like to try something more entrepreneurial, because I think there’s never been a better time. If you talk about disintermediation … I do a lot on Instagram because I feel a real connection to people who follow me on Instagram, it feels a little less sort of cosmic than Twitter. I feel it’s more community based, and I think that’s a really interesting outlet to experiment in and try different things.

I’d like to do something that really, at this point in my career, shines a light on other young up-and-coming, especially female journalists, diverse journalists, people who represent all different points of view. Because the one thing we’ve seen, Kara, so clearly is, certainly in broadcast, that is it still a male bastion. It’s still, all the decision makers are primarily white men, and we have to start changing that. And how do you change it? Well, you give women an experience and a chance to shine.

Obviously, media’s been the focus of a lot of the #MeToo stuff, more than any … I was talking to someone the other day, there’s a lot of it in tech but it really has been focused on media, including places you’ve worked.


When you see that happened did you just become inured to it? Like, “Ugh, this is the way it is”?

I have to say, personally, I did not deal with a lot of that. I don’t know whether I’m just imminently inharassable, but I was very lucky. Every now and then someone would make a comment or it would be a little fratty but I think I’m kind of like you, I would roll my eyes or give it right back. And so I think culturally, it’s just been such a shift in what is acceptable and what is unacceptable.

But having said that, I’ve been the beneficiary of having a pretty powerful job and I would try to set the right tone in a work environment. Having said that, I think I’m sure it was jocularity bordered on too much, kind of, boy’s humor.

Yeah, I think about what did I allow that I shouldn’t have.

I don’t really feel that way. Some people have said, “Well, how did you not know what was going on?” I think there was also this feeling of privacy and people do things and you’re not monitoring behavior in people’s spare time, you don’t know about it. And I have a totally clear and clean conscious about the way I comported myself and any responsibility that I bear for people’s bad behavior.

Yeah, that’s hard, because I think what happens is, one of the things I’ve noticed at least in Silicon Valley and talking to people, is that people let things go. I think about how you become, again, inured to it, you get this stuff all the time and then you live in the environment and then …

And some of it is so subtle, Kara.

Absolutely, they’re called microaggressions in Silicon Valley.

I think that one of the things that hasn’t gotten a lot of attention is sort of very subtle sexism that’s marginalizing and dismissive and undervalues people’s accomplishments and intelligence and ability to contribute, and it’s this very subtle thing that, you can’t go to necessarily HR about it but you feel it intensely. And I have experienced that.

It’s really interesting when I … I just finished the Tina Brown book about her tenure at Vanity Fair, which I thought was fantastic.

Yeah, I haven’t read it yet, I’m going to.

Oh you’ve got to read it, it’s hysterical and beautifully written, and very funny and very raw.

She’s so brilliant.

Brilliant. But I was just thinking, people have a vision of her that’s really not very nice, like tough ball-busting lady editor kind of thing.

I’m so over that. I am so over that.

Exactly. I was like, she changed magazines in two, not one but two, and she had some rockier times at Daily Beast and Talk and stuff like that, but her accomplishments were massive when you start to realize it, the impact on magazines.

Oh definitely.

And the kind of image she has is so … Any man who did that … It made me furious when I was reading. I was thinking, this person still has sort of a reputation among some, which is like, “Oh, what a tough bitch she is.” That kind of thing. And I’m like, “Whoa wait a minute, she did a lot and why is that her image?”

Well, you know I think that’s why it’s so important to have women in leadership positions. When I anchored the “CBS Evening News” I would call writers out and say, “Why are you describing Hillary Clinton that way? Would you describe a male candidate that way?”

I just had that happen to me.

Or, “Why can’t we do a story on X, Y and Z?” Things that my male counterparts would never in a million years imagine.

Why should it be you that does it? Why does it have to be a woman? I did the same thing when I interviewed Hillary Clinton last year at Code, one of the anchors I was telling you was like, “She was strident.” And I’m like, “What word did you just use?” And this was on the air, and they’re like … I said, “Strident is a word you only use for hysterical women.”

It’s true. And how about shrill?

And I’m like, “She was tough.”

How about that being taken out of our vocabulary. Do you ever … And hey, how about perky.

You’re perky.

I was called perky.

Yeah, you get a lot of perky.

I am very outgoing and I’m friendly and I’m very upbeat, but are men ever called perky? No. I feel like it’s a demeaning, marginalizing description of somebody and I don’t like it.

Also when you shifted, I think you did shift though, you were a much more complex person than “perky Katie,” you know what I mean?

That’s the thing, I think that people don’t …

People didn’t like it.

People don’t like, they don’t wanna acknowledge that people are multidimensional, they wanna put them in a box and say they are X, Y and Z. And I think nuance has been lost in our current discourse and hasn’t really existed in a very long time and it’s just very easy to stereotype people.

We were at Vanity Fair and I was talking about your salary and I was thrilled you got the big salary you got at Yahoo, someone was sort of saying, “Oh, that’s a lot of money.” I’m like, “Who cares? She got the money.” And you yelled from the audience, “That’s right, Swisher,” or something like that, but in this sort of growl, and it was fantastic. And everyone was like, “Is that Katie Couric?” And I was like, “Yes that is Katie Couric, she wants the money.”

Well I think women especially … I mean, think about it: Morning television, you have to be nice. And I think, luckily, I think of myself as a nice person, but you have to fulfill these expectations and roles and it’s very hard to navigate as a woman, this kind of being this tough, but not too tough. Being challenging but not too challenging. Not having an opinion, being palatable and pleasant in the morning, You have to be like the breakfast smoothie. And it’s hard, it’s really hard.

I like the breakfast smoothie.

I think I stole that from Tom Brokaw, who described Matt as that once.

Not anymore. What smoothie would you be? Like, oh my goodness, you’d be an interesting smoothie. But it’s true, I think that’s what interesting is that if you don’t fulfill their expectations of you …

One of the hours I’m doing for NatGeo, and again I’ve been thinking about all these and the only reason I bring it up is because you’re in this hour and you’re fantastic. It’s about gender inequality and Hollywood and Silicon Valley. And I talk to a woman at Harvard who studies implicit bias, and you and I talked about this, Kara.

I don’t think it’s implicit.

Because companies that consider themselves a meritocracy are the least meritocratic of anyone because they don’t acknowledge their innate biases. And I think we are so programmed to see men and women in a certain way that it’s actually reinforced by all the messaging we get in commercials and the objectification of women, the hypersexualization of women.

I had to think, when this whole #MeToo was exploding, the Victoria’s Secret fashion show was on CBS and I was like, “No wonder women are confused, no wonder everybody is confused.”

Right, but then you have the backlash. And you interviewed James Damore for that, right? Or others, you went to one of his … You told me, “I’m going to this party.”

I went to a cookout.

Yeah. I was like …

They were serving sausages.

Of course they were. There’s sausages everywhere where I work, Katie. Everywhere I go, sausage fest is everything.

It was interesting.

That was the name of my memoir, was “Sausage Fest.” But it’s true, it’s so true. But what was interesting when you were talking about that was that … I loved that you were open to hearing them, because one of the things in Silicon Valley right now, Peter Thiel has to move because he can’t be conservative.

Right, right.

Which, oh come on. Come on. Come on.

Yeah, let’s discuss that.

All right, we only have a few minutes. Oh come on. It just … Please. I just don’t even know what to say. This is a person who is a victimizer that acts like a victim, typical. This guy sued a company out of business, he’s got billions of dollars, he’s got all kinds of things at his disposal. And he gets to speak up, he gets to give speeches, he gets to … You know what I mean? And he’s still a victim? He has …

Let me ask you something, Kara. In terms of policy discussion, do you believe that in certain circles that a conservative point of view is actually heard at all and there can be an open conversation with people of differing opinions?

I think some places are conservative and some places aren’t. I can’t operate in certain parts of the country either, in certain companies. Companies have their point of view, and I think a lot of these companies pretend they don’t, cuz when you have to say your values, you have to argue about them, right?


Values is what you argue about. I had this really interesting time at YouTube, I went there to talk to them and they were talking about how it used to be all squirrel videos and nice things and now they have a college ethical debate every day, whether it’s Logan Paul or whatever. And on some level I’m like, “Well, that’s what it’s about, having values, you have to state your values.” And I don’t think they can …

I’m gonna have a podcasting guy who’s doing all these polls on conservatives. They don’t get to talk. It is a liberal environment. It is, it just is. These companies are more tolerant. Tech has been more tolerant and these are their values. So I don’t know if you can’t talk, cuz I’m sorry, these people have so many opportunities to talk. I googled, there’s like 900 places to talk and all kinds of opportunities, but I think once you say something that’s not in their value system, maybe it’s not a place you need to work.


Or maybe you should work somewhere else. As a gay person, you couldn’t be gay. You couldn’t, and of course that ended up being illegal in some places. It’s still not that legal in many places. But I just think you have to think about what values you have and if you have those values, not being cowed into saying, you have to have everyone’s point of view. This is our value, this is what … Every internet company has a little statement of who they are and I think they’re scared about that, they’re scared about stating them.

Yeah. That’s interesting, but I also think that there are some issues that respectable, intelligent, well-meaning people can disagree, and I wonder about our inability to have a respectful conversation about … Certain things are non-negotiable, I understand that, but certain things that you can have a different point of view, and you can learn from somebody, and they can say, “This is how I feel about this.” aAnd I feel like those conversations aren’t happening. And it really bums me out and I think it’s really damaging the country.

Well, it’s because it’s so politicized. Yes, it’s so politicized. But maybe, I was just thinking the other day, some other point of view came out and I was like, “I’m so glad to hear this point of view, now I know.” People are like, “I can’t believe people are like this.” I think they’ve always been like this, they just have an outlet. And especially social media amplifies and weaponizes a lot of it. When I think about it I’m like, “Well okay, now I can see it, it’s out in broad daylight, I understand the ignorance,” or whatever I think of whatever the point of view is. Many I find are ignorant.

You can’t really persuade somebody if you’re not talking to them. There’s a really good book that’s written by the incoming president at the University of Virginia, Jim Ryan, it’s called, “Wait … What?” And he gave a great speech at the Harvard School of Education and it’s basically, we’ve lost our ability to be even a tiny bit circumspect. We have these instantaneous reactions and sometimes just to take a moment and say, wait, what?

And anyway, it’s very interesting the way we hear things, the way we react to things, the way that we are in our own echo chambers, the way that we’re preaching to the choir, especially on social media and Twitter. I just wish once in a while we could all say, wait what?

Except I’m gonna push back on that.

And hear each other a little bit, not on everything, Kara, but on some things.

No, I’m gonna push back on it in a very big way because I do think we’re hearing each other, that’s the problem. I’m reading the actual book on “Hamilton,” not the musical, which I really much enjoyed.

Oh, the David Chernow? Ron Chernow?

Ron Chernow. If you read that book, the stuff that was going on between Hamilton, Jefferson, Madison and Washington …

Not to mention Aaron Burr.

Yeah, exactly. Who created a problem at the end. It was really quite the same, it is even worse. And our democracy hung by thread so many times, the Whiskey Rebellion, the XYZ Affair. We have no sense of history is what it is. And if you read that, you’re like, “Oh my god.” You realize … And the invective was so vicious through these different newspaper articles they wrote against each other. They were was act, this Addition Act, people don’t remember it, people went to jail for having a Republican point of view, if they insulted the government. And that was a law in the books for a very long time, that if you insulted the government you were jailed. So people who were not of the Adams group, the Federalists, were put in jail for years and their lives were changed.

So I think this has been an American problem for years. It’s the lack of ability to have any memory and at the same time realize we have always been like this. And what’s happened is Trump has just given voice to all of it, now we see it instantly and that’s what’s discomforting about it. But this is not something … Go read that book, cuz then I sort of felt a little better. I was like, “Oh wow, we’ve been doing this for centuries. We’re on the cusp of anarchy at every single second.”

I’ll read that and you read “Wait … What?”

All right, I’ll read … cuz I think it’s not. I think social media’s made it worse and that these companies have a responsibility, and we’ll end on that because one of the things, when you were talking about how do I get liked and disliked, what I think happens and the reason I think you’re successful is because … I hate to have something in common with Donald Trump but you say it like it is for you, and I think people do appreciate that. Whether they disagree with you or don’t agree with you, if you have a cogent point of view and you’re genuine, these mediums, you thrive in them.

I guess. I’m still quite careful. I think that you are sort of Kara-bar-the-door. I’m a little more careful about some of the things I put out there in the world because, I don’t know. I wanna get the I-don’t-care gene from you somehow because I still have that desire to be liked.

Yeah, you gotta get rid of that, Katie.

I have it less as I’ve gotten older but I still have it.

At 70, you’re gonna say, “Fuck you.”


When is it? What age you gonna do that at?

Well I’m starting to say, not f-you, but …

It’s so sweet you can’t say it.

Shut up.

Hush, you.

Get out of here.

Hush now.

Get out of town. Bite me. That’s about as far as I go.

Oh my god.

I do say, “bite me.”

I do you think you get an enormous amount of criticism that I can’t imagine having. Like I was thinking there was a story about Lena Dunham in Vanity Fair about the same thing.

Oh gosh, yeah. Lena, really, I mean.

I love Lena Dunham.

This is the world we live in and I think you can say nothing and stand for nothing, or you can say when you feel strongly about things. I’ve been pretty open about saying we have to have a conversation about sensible gun laws. It is insanity.


It is insanity, and no it’s not a panacea. No, it will never prevent gun violence but it can reduce it and it has to be a multi-pronged approach. I agree mental illness is a part of it but easy access to firearms is really a horrific thing.

It is.

And I’ve been pretty vocal about that.

So what’s your next … You’ve got me to have my colonoscopy.

I’m actually taking a well-known person to get screened in March. I’m not gonna tell you who.

Oh no.

But I’m gonna escort this individual.


No. I am not actually gonna perform the colonoscopy because I’m not qualified but I’m going to be sort of the escort, which will be fun because it’s such a preventable disease. Nothing feels better to be, if you talk about anything I’ve done in my life and when people come up to me, Kara, and say, “You know what? I got screened for colon cancer because of you and that screening saved my life,” I mean that makes me feel like I’m walking on a cloud.

I agree. I have the colon of a 20 year old.

Do you? Mazel, mazel.

I’m clean, clean. Clean living, Katie.

When was your last … Well you’re not … How old are you now?

I’m old, 54.

Okay, so how many? You’ve had one colonoscopy?

One, yes. I’m going to have one next year.

Okay, good.

Five years, right? Five years? Can you tell me, Doctor Couric?

Yes. Well, depending on what they find. They found a McDonald’s cheeseburger when I did mine.

You didn’t take the pills?

No, I’m kidding.

No, I will take ’em.

I wanna end on one thing. Where do you imagine you’re gonna go next? You’re talking about Instagram, which I think is really interesting but … And then I’m gonna tell you what I’m gonna do next, if you wanna know.

I do wanna know, of course I wanna know.

What do you imagine, if you could like design a career right now? Like you’re doing these documentaries, you’re doing all kinds of things. What would be the most interesting way … Still storytelling, I think.

I mean, storytelling, I do love talking to interesting people. I like understanding sort of where they came from, how they got there. I love learning all the time. I’m insatiably curious so I think … I don’t know exactly. I need some career advice from you, Kara.

I think you should interview. I think you should interview.

Because I also like being connected to an audience or to people. I like feeling that I have access to people, that I can make them … I can make complicated subjects more understandable or that I can introduce them to something that they’re not aware of that will improve their lives, or that will just make their day more interesting. I like being sort of that conduit for people and I think I have a pretty good sensibility about things. I think I’ve got a nose for news, as they say. I can sense when something is gonna kinda be in the ethos. So I don’t know exactly but I just wanna keep learning and discovering, and that sounds so cheesy and weird but you know, I just enjoy being engaged and I like to bring people along for the ride.

That’s not cheesy. And you should do interviews, I’m just telling you. What do you imagine your greatest interview was?

I think my most impactful, which really isn’t a word but now I think it is a word cuz it’s used so much, I think it probably was Sarah Palin.

That was a hell of an interview.

Having nothing to do with me, I think basically went there with questions that required critical thinking and accumulated knowledge. And I think I was very careful about asking them in a non-confrontational way.

You did …

I think it exposed a lot about her and I think that was very helpful for voters.

Yeah, you took a photograph, you know what I mean?

More like an x-ray.

Yeah, you did, and you couldn’t deny it. It was like okay, I see. It was really interesting.

But I feel like I’ve done a lot of pretty good interviews, like this one for example.

Ah, this one.

One more question, hold on.

All right.

This is from Jiana, my producer.

All right.

What muscles and skills do you think entrepreneurship draws upon compared to journalism?

Katie, I think being irritating is the most important muscle skill that anyone has to have.

Being irritating?

Irritating. Being irritable and irritating. Looking at something and saying, “Why is this done this way?” I think ever great entrepreneur from Steve Jobs down to today, lots of great entrepreneurs are, every one of them is irritating and irritated. So they see something and they don’t let anything stop them from doing it, and I think it’s really hard. I think agreeable people don’t invent things.

Yeah. I think the most important word in an entrepreneur’s vocabulary is, “Why?”

Why. Yeah.

Or maybe, “Why not?”

It’s more like, “I don’t like this, I don’t want to do this …” I think our greatest will be from very difficult people.

Oh and by the way, before we go, I have to plug my podcast. I’m getting it in big, bold letters, highlighted in yellow.


So hey Kara, tell your listeners, who by the way, I’m sure you have a lot of really cool people who listen to your podcast.

I do.

Will you tell them to listen to my mine?


Because it’s actually, I hope it’s interesting and fun. We have a lot of cool guests like Julia Louis Dreyfus, Mitch Landrieu. That’s one nice thing, you know, because I’ve been doing this for a century, I’m able to get pretty good guests on my podcast.

So who else, Julia Louis, Mitch Landrieu, who else? Who else? Who else have you had?

Well Doris Kearns Goodwin, Samantha Bee …


Kareem Abdul-Jabbar, Gretchen Carlson, Amy Schumer, I just interviewed in her apartment. You would love Amy Schumer. Do you know her?

No, I do not, Katie.

Oh you would love her. When you’re in New York, let’s all get together. I like her, I don’t hang out with her, but I think you would love her. Alec Baldwin, Tina Brown, the aforementioned Tina Brown, Ina Garten. I cooked eggs in Ina Garten’s kitchen in East Hampton.


They were delicious. Danny Meyer, who I love. David Axelrod, Martha Stewart, blah blah blah, Sheryl Sandberg. Who you know well.

Listen, Katie Couric. Yes, I do. I do. I do know Sheryl Sandberg.

We talk to her about … Is it Plan B or “Option B”?

“Option B.”

“Option B,” yes. Which of course I could relate to her experience.

Absolutely, that much have been … I’m gonna listen to that interview.

Listen to all of them Kara, you have nothing else to do.

I’m gonna spend my whole day listening to Katie Couric. Anyway Katie, thank you so much.

This was so fun. Will you call me when you come to New York so we can hang out?

Totally, I absolutely will do that.

And Happy President’s Day, by the way.

Thank you so much.

And by the way, I wanted to ask you, you’re thinking about running for mayor of San Francisco, right?

You have a million questions, Katie, we’ll have to do Part 2 of this thing.

In 2023.

Maybe, perhaps. I think I might aim even higher, Katie.

Really? Are you gonna run for president?

No, that would be a disaster.

Senator? Governor?

What am I talking about.

You’d be great. Can I be your Press Secretary?

Oh my god. We would just go down in flames, it would be so good.

Hey, it sounds like a sitcom, doesn’t it?

It does, it does. Let’s write it. All right, thank you, Katie Couric.

Bye, Kara.

Wait, I gotta say my goodbye. You gotta listen to my good bye part. Katie, it was great talking to you, thanks for coming on the show. Once again, Katie’s podcast is called Katie Couric. You can find it pretty much everywhere you listen to Recode Decode and she gets much better guests than I do.

Recode – All

Cash For Apps: Make money with android app

Full transcript: Investor and owner of the Washington City Paper Mark Ein on Recode Decode

How Complete Beginners are using an ‘Untapped’ Google Network to create Passive Income ON DEMAND

He recently bought the City Paper in the hope of promoting local journalism.

On this episode of Recode Decode, hosted by Kara Swisher, entrepreneur and investor Mark Ein talks about his recent purchase of the Washington City Paper, an alternative weekly newspaper in Washington, D.C. He’s an investor by trade, but the paper is a philanthropic endeavor. “If it turns out that we’re making money,” he said, “we’re just going to hire more people. I’m really passionate about this. I think this is a platform that we can do a lot of good with.”

You can read a write-up of the interview here or listen to the whole thing in the audio player above. Below, we’ve also provided a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

Kara Swisher: Recode Radio presents Recode Decode, coming to you from the Vox Media podcast network. Hi. I’m Kara Swisher, executive editor of Recode. You may know me as someone who used to work for the City Paper in Washington, D.C., but in my spare time, I talk about tech. You’re listening to Recode Decode, a podcast about tech and media’s key players, big ideas and how they’re changing the world we live in. You can find more episodes of Recode Decode on Apple Podcast, Spotify, Google Play Music, or wherever you listen to podcasts, or just visit Recode.net/podcasts for more.

Today, I’m in Washington, D.C., and I’m here with Mark Ein, someone I’ve wanted to talk to for a while, and now I have an excellent reason. He’s an investor and entrepreneur. He’s the CEO of several companies, including Venture House Group and Capital Investment Corporation 4 — is that 4?

Last year, the most interesting part, he bought the alternative newspaper here in Washington, the Washington City Paper where I used to work. It was my first and second job, or something like that. I was very young. He’s working with some of the paper’s other alumni, including Jake Tapper and Ta-Nehisi Coates, to figure out where it goes next and about local news. There’s so much to talk about. Welcome to the show, Mark.

Mark Ein: It’s great to be here.

I ran into you at CES, which was interesting for you to be there. I want to know why you were there, but let’s talk about you, because my listeners are a lot of tech and media people, but talk about what you’ve done, because you’ve done a whole bunch of really interesting entrepreneurial companies.

Yeah. We’ve really run the gamut from investing in early-stage companies, starting companies, to growth capital, to …


… to SPACs, to buying whole businesses.

That’s a big thing in Silicon Valley.

Yeah. It’s interesting. In sort of the tech boom 1.0 that you were a part of in Washington, D.C., the Washington area was a really booming area.

It was.

There was a lot of great companies, AOL, MCI, Nextel. We were involved in a lot of those. As we got to the next phase of the internet, D.C. just wasn’t a hotbed of those kind of opportunities. I had done, as I mentioned, everything from early-stage to late-stage. What I really decided was I wanted to spend my time focusing in on putting more capital and more time into buying whole businesses, but then taking a venture mindset towards them. I just felt like every time I invested in startups, I felt like the day after you invested, they started losing your money the next day.

That’s right. That’s the rules.

I felt like it was literally like a race to fill up the tank before you ran out of gas. If you’re in a market like Silicon Valley or some other places where there’s a lot of terrific companies and entrepreneurs, that works. I think if you’re in other places, traditionally that’s been really hard.

I want to get into it, but let’s get more into your background. How did you get … You worked at the traditional companies. You worked at … is it Blackstone?

I worked at Carlisle.

Carlisle, Carlisle.

And Goldman before that. Yeah, and I was at Carlisle …

Explain your background. You went into finance, which is a typical career.

Yeah, I went to Penn and worked at Goldman in the ’80s, but then I went out to the west coast and worked at a firm called Brentwood Associates, which was one of the early venture firms in LA.

Mm-hmm. This is in LA, right.

They were investors in Apple and other companies like that, and I had a great experience.

Why’d you go there?

I really wanted to get to California. I always wanted to live out there, and I loved it. I loved the people there. They were really high-quality people who were focused on being great investors, and I wanted to be. Back then in 1989, there were not many jobs for a 24-year-old kid to get into that side of the business. There were very, very few jobs. I was fortunate to meet them and hit it off. I went out there, and I learned a ton from then. I did go back to business school, and I almost went back to LA, but then Carlisle was five years old. I grew up in this area. I always had a dream of coming back.

Carlisle, explain for people. Huge, powerful, little scary, who knows what they’re up to, investment firm.

I think it is one of the largest private equity firms in the world. They do a lot of stuff. When I was there, there were 30 of us, and we had $ 100 million fund. It was a very small.

Wow, small. God.

It was the only thing in Washington I could ever imagine doing back then. That was the business I wanted to be in. It was the only game in town, and it was a little bit of a startup. To be honest, up until the first five years when I joined it, it had a sort of mixed track record of some things good and some not. I went there, and I started focusing on growth capital and wireless communications.

Big deal.

We did a lot of stuff.

Perfect timing.

We sort of hit the wave. It was amazing. The rest of the firm was focusing on buying defense companies, which was what the firm was known for, but we supplemented it with the other. It worked out great. What I learned was that if you rolled up your sleeves and got involved, as I mentioned, in companies, even if you got involved later, you could really make a difference. You could be a catalyst to helping those companies be more valuable.

I thought rather than having a big portfolio and being spread thin, why don’t I be more concentrated in a smaller number of companies with my time and capital? Eventually Carlisle got bigger, and I decided I wanted to go off on my own and do that. I left in ’99 to start my own firm called Venture House.

That was sort of the peak of the internet bubble, and also the decline. There was a whole fallow period in there.

Yeah. I started in ’99, which was kind of still the boom times.

That’s when AOL bought Time Warner.

That was when AOL … AOL did buy …


Yeah, yeah.

Yeah, yeah.


They did buy it. It wasn’t a merger.

They did. Yeah, yeah, the famous picture with Steve in the suit and Levin in the jeans. Yeah, and so it was the … I raised the money really quickly. People were excited. I had a great track record. For a year, I was everyone’s favorite genius, because everything was going through the roof.

What were you investing in?

Early-stage company, early investors in XM Satellite, a company called Varsity Books. We did some stuff that we seeded ourselves.

I remember Varsity Books.

Yeah, we were in a whole bunch of stuff like that. We seeded a few things ourselves. For a year and a half, everything was going up. I was everyone’s favorite genius around town. Then the bust happened, and I was everyone’s favorite idiot. It was interesting, because through that, I never changed my perception of what we were doing. I felt very comfortable with where we are, but you get buffeted by sort of the headwinds and tailwinds in the world around you.

I kept our head down, and I actually went to our investors, because the one thing we did is we didn’t invest really heavily the way a lot of other people did. We had a lot of capital. I went to people and I said, “Look, do you want us to keep going?” Everyone said, “No, Mark. We believe in you. Let’s keep going.” That’s when we really pivoted and said there’s a lot of companies who are really good that we can buy at the moment for good prices, but that then we can help grow as if we had …

What were you focusing in on? Because you did a lot of cloud, you did a lot of tech. Everything’s tech, in a lot of ways. Castle, which was the big success, that’s all tech, like how buildings become smart, I guess.

Yeah, so it was tech, media, telecom. One of the companies that we seeded was a company called Matrix. It became the world’s leading RFID company. We sold it to Symbol, which is the world’s leading barcode company. They couldn’t figure out how to get in the RFID business, so they bought us. Then I bought a company, the last company we bought through Venture House was a company called Cybernet that was owned by the CTIA. It was a billing protocol embedded in the billing systems of all the wireless carriers, and a clearinghouse that we bought.

When I saw it, I was like, “This is the greatest platform company I’ve ever seen. This thing has so many moats around it. If we can get … Left to its own devices inside the CTIA, nothing is going to happen, but if we can spin it out, there’s so much we can do.” We bought it for 35 million and sold it for 210 four years later.

Right. I want to get back eventually to the word “moats,” because I think it’s an important one in investing, like who has them and who doesn’t?

Yeah. This one actually did, because the company was founded by the Wireless Trade ssociation. The carriers let them own the billing protocol that transmitted all the roaming data back and forth. They would have probably not let a third party do that uncontrolled, but because it was owned by the trade association, everyone had faith in it. We acquired that. That was a true, really valuable moat.

Castle, which was the one that probably made you the most money, I’m guessing …

We still own it.

Yeah, you still own it, and you looked at that because …

What I decided was after we fully invested in Venture House …

Explain Castle. Castle is …

Yeah, so Castle is the world’s leading access …

When you go in a building …

Your building, your space. I was very happy to see that.

Yes, I have one. Got one in my pocket.

I was really happy, love to see that. We’re the leading provider of managed access control for commercial real estate. We do your access control, your video, and we do it on a managed service. The founder of the company is a fantastic guy. He started in the mid ’70s. It was security as a service back in the mid ’70s. He was well ahead of his time.

As you know in D.C., it’s an iconic brand. I was looking for a platform company that I could buy, and this opportunity came to me. In Washington and in a few other markets, Castle is to security what Coke is to soft drinks, or Xerox is to copiers. It’s one of those brands that people call it that, even if it’s not your company.

I got introduced to the company, and I came back to the office and I told my assistant, “Come here and bring my calendar.” I said, “Cancel everything for the next month.” She said, “What are you talking about? You’ve never done this.” I said, “Just cancel everything. I’m dropping everything in my life until I see if we can do this.” Three weeks later, we had a deal to buy it.

Why? Explain, because that’s something entrepreneurs … What was … Why?

It just was everything you would ever want in the profile of what I was saying.

So technology?

An amazing platform company. It had a great business model, a great brand, a great embedded …


Yeah, and so much room to grow. We could go to more geographies. We could go to more verticals. We could introduce more products into our … There were just so many things we could do when we got it. The founder of the company, who is an absolutely wonderful guy, built a great business, but he was sort of at the point where he was ready to move on and was looking for a caretaker for that company.

I’ve met probably 25, 30 people who said they tried to buy it, but they never hit it off with him. He and I met the first time, and he, an hour later, walked out and he told his No. 2 person, “I’m going to sell the company to that person.” It’s just been a great ride. It’s a great company. It’s a great business, but we also do something important. We protect people and property. The world we live in is not getting safer.

Great. It’s also an interesting area. It reminds me a little bit when Sheryl Sandberg’s late husband, Dave Goldberg, bought a survey company. I was like, “What? What are you doing?” But it had so many elements that were different than you think of a survey company, because it was … technology would change it. I think yours is one of those.

It is.

I think a lot about real estate now, real estate technology quite a bit.

Yeah. It’s an industry that, for a lot of reasons, has not adopted technology as fast as other companies.

Or been global. It’s so local. It’s such a local …

It’s local in the nature that people, and it’s just not … There’s a whole bunch of reasons. I’ve thought a lot about this, because even sometimes we’ll introduce amazing new technologies, and it’s hard sometimes to sell new stuff. Now that’s great if you’re the embedded provider, because you’re less likely to get disrupted. It’s a little harder sometimes to get new things introduced, but we’ve done amazing things. We created a system in Washington where building owners can get their video monitored by the police department.

That was one of the things that hit me, actually, watching “24.” I was watching “24,” and they’re chasing the bad guy. They’re chasing him on the camera, and they go, “He’s coming out of camera view.” Chloe O’Brien says, “Tunnel into that camera.” They did it and they caught the bad guy. I thought, “That’s the way the world should work, but it doesn’t.” We made it work that way in Washington, actually.

Right, right, but it’s all kinds of these smart buildings. Mark Cuban has talked about it, like moving by. Buildings, to me, there’s certain areas that are going to get bigger, building property is really what … Home and commercial is done in such an antiquated way. It reminds me of Oracle Database. Why do they do it the way they do it when it can be so much different, given all the cameras everywhere, given all the not just cameras, but ability to set sensors? I just think it’s a really interesting area.

You did that, and then you got into tennis. Why?

Not as a business. As a hobby.

We’re going to get to City Paper.


Not as a business.

No, the tennis has not been a business. That’s been a labor of love and a passion.

You bought it from Billie Jean King.

I bought the franchise in Washington 10 years ago from Billie. Well, Billie owns the league, so I was a franchisee. Then I bought the league from Billie last year. Yeah, just tennis has been a big part of my life. I think that sport in particular is a wonderful sport for kids. It teaches you so much. You’re on the court by yourself. It teaches you discipline, self-reliance, a whole bunch of great things. It’s been helpful in my life.

I wanted to bring that team to D.C. Our mission really was to use it as a community platform to bring people together to help local charitable partners. We’ve done that. Along the way, we ended up winning a lot of championships and having a lot of success in getting the city behind us, but it’s been a very rewarding experience.

Do you think a lot about … I know I oriented this around tech, but I’ve interviewed Ted Leonsis and others, and Mark Cuban about sports. Tech, tennis really … Serena Williams is just on the board of SurveyMonkey. There’s little intersections, but not that much, with tennis for sure.

Yeah. The great athletes in tennis are iconic athletes, back to Stan Smith and Arthur Ashe, and today’s Serena and Roger Federer are iconic. They’re highly sought after by companies. Serena’s played for our team. She’s been a good friend. She’s always had an eye to business. I always knew she would get more involved in it, but tennis is not as big in the states as, say, basketball is, but the quality of the athletes and human beings in tennis I think is unparalleled in the sports world. The athletes really understand their role in society, and they embrace it and try to be forces for good.

How do you technologize it more? Look, you have the NBA. You have everybody. We just had Adam Silver. That’s all they talk about now is digitization. Obviously with NBC and the Olympics, when you’re a sports owner, how do you look at that, because you’re really a sports owner?

Right. Yeah. We’ve done a bunch of … WTT has been the innovator in tennis. We were the first ones to do instant replay on line calling, and shot clock, and all kinds of stuff. Last year, we were the first tennis event ever where we mic’d the players during the match. It was amazing. You could hear them talking to each other and hear their strategies during the match. We have a bunch more coming this year. We do think if you want to appeal to millennial audience, you need to have a product both in person and on the screen that’s millennial friendly. We’re doing all kinds of things to attract them.

But you just like tennis.

I love the sport, and I love the people in it.


As I said, we’ve won a lot of championships. We’ve set all kinds of records, but to me, the most meaningful part of that 10-year experience is you look around the stands, and I see families having great times in the summer and helping local charitable partners who get Venus and Serena to teach them tennis. Those are the things that really matter.

Larry Ellis is into tennis, too.

Larry is super into tennis. He is.

He is. He talks about it.

There’s tons of people, tons of people. It’s not a sport that people who … It was important in their life, they know how to invest in it. If you love basketball, you buy a team. Any of the other, that’s the simple thing to do. Traditionally, tennis hasn’t been that way. It’s a bit harder to figure out how to make a difference. Team Tennis has been one of the great ways to do that. We’re looking for more people who love tennis to come be owners of teams.

Yeah. I played a lot of tennis when I was a kid.

You then bought the City Paper. Explain that. Explain how it happened, and then in the next segment, we’ll talk about local news and where that’s …

Yeah. Five years ago, the City Paper was sold as part of a portfolio. The editor came to me and …

Sold several times.

It has sold many times over the years, but it’s an iconic paper. It’s been around since 1981. It’s an important part of the fabric of D.C. It’s been a hotbed of …

It was with Baltimore originally. That was the original founding.

Baltimore was with it, right. It has an incredible alumni network. You mentioned Jake, and Ta-Nehisi, and Kate Boo, and of course, Kara Swisher at the top of the list, but also an amazing number of people who today write for the Post have passed through the City Paper. Five years ago, I looked at buying it, but got sold as a portfolio. I couldn’t spin it out separately.

Meaning it was what Baltimore …

Someone has five or six of them.

Yeah, there are.

The seller wanted to sell it as a package.

Chicago Reader I think was involved, wasn’t it?

I think it was Creative Loaf. There was a bunch of other things that got sold with it. The person who bought it, I went to them and said, “Would you spin it off?” They said, “No, we want to keep it together.” That came and went. Then in the fall …

Why did you want to buy it? Just why?

I think any local community needs strong local journalism. I think local ownership is helpful, having someone who really cares about the community makes a real difference. I’d say my conviction for it only grew dramatically in the last five years, and especially in the last two years. That’s why when I came back in the fall, I jumped at it. I jumped at it …

First of all, I met the young woman who’s the editor who’s fantastic, Alexa Mills. She came to my office, and with my venture hat on, I thought this is the kind of person I’d want to back. That was it, but then secondly, I think journalists are saving the world, to some extent, right now. I think if you closed your eyes and you imagined a world without a free press, that would be a really scary world at the moment.

A lot of people are imagining it and actually planning for it.

Well, then we need to make sure that doesn’t happen. It’s really been something I’ve been thinking a lot about. I didn’t know exactly how to act on it, besides subscribing to a lot of things. Here was a way to do it in a meaningful way, especially at a local level. It’s something I’ve really thought a lot about. I’ve been disturbed by the attacks on the press, the norms, the institutions of our country. I think one of the best ways to combat that is to have a strong, high-quality journalism.

Had you looked at what Bezos had done? You didn’t buy the Washington Post, but it wasn’t actually that expensive, as it turned out.

Yeah, and there was a group of local people that we were talking about potentially doing it, but then Jeff did it.

Doing the Post.

Doing the Post. We were going to do it as a group, but Jeff did it, and I honestly I have been in awe of what he and Fred Ryan and Marty Baron have done. I think it’s extraordinary what they’ve done. Their focus has been to become more national, because they want to be a digital platform, and it makes sense, but what they’ve done has been amazing.

I’ve gone over there, and I’ve sat there. The energy in the newsroom was addictive to me. I thought some of what they did I think is applicable for the City Paper, some isn’t, but the mission is. I think the mission of providing high-quality local journalism and shining light on things that need to see the light of day is one that they share and we share.

All right, we’re here talking with Mark Ein. He’s an investor and entrepreneur. He’s founded lots of companies, been a venture capitalist, but most recently he’s gotten in the news for buying an alternative newspaper here in Washington, D.C., called the Washington City Paper, where I began my career. I was fired from the City Paper, by the way.

I’m sorry. Sorry about that.

That’s okay. Don’t worry. It’s not your fault. I deserved it.

Do you want to come back?

No, thank you. I’m okay.

Okay. We’ll hire you back.

You had a lot of other alumni, Jake Tapper, Ta-Nehisi Coates, Kate Boo, and a bunch of others. When we get back, we’re going to talk about local news and what happens in the internet age with Mark Ein.


We’re here with Mark Ein. He’s a Washington, D.C., investor and entrepreneur. He has most recently bought the City Paper, which is a local publication I worked at. A lot of people have, tons and tons of great alumni have come from it. We’re just starting to talk about local news and where it’s going.

I’m especially struck by it in the internet age, because a lot of local news has been bought up. For example, the TV news by Sinclair across the country. Local newspaper is dying. Big newspapers like the Washington Post where I worked also, I focused on local retail when I was here. I covered Heckinger and the end of Woody’s, the end of Garfinkel’s, the end of everything. You know what I mean? It was really interesting.

I really did see the impact of digital technologies on these areas. Local news seemed to suffer absolutely the most, and getting no coverage. City Halls, corruption were things that really needed attention. City Paper has been at the forefront of that for years. Talk about your sort of business idea of how you saved this, because that’s really what you’re charged with doing.

Yeah, so let’s start with what the problem is, which you outlined, is that as new generations aren’t used to looking at print, it’s never become the habit, and so print dies. You have to survive on digital is the common wisdom. It’s hard to sell digital if you’re niche and small, which is why people try to aggregate big audiences. That’s where all the dollars are. That is the problem.

As it relates to the City Paper, I’ve never done anything in my life that I’ve had such an outpouring of support. There’s gratitude, but there’s also heartfelt and meaningful offers of, “How can I help? What can I do?” People around town, people who own businesses, prominent people, everyone has said, “What can I do to help?”

Explain who you got involved.

Yeah, so we had Ted Leonsis got involved, Jose Andres got involved.

The chef.

Chef Jose Andres. Jeremy Zimmer, who’s not local, but from the west coast, heard about it and said, “I want to help you think through this.” Mark Walsh, who you know.

Yes, AOL.

There’s a whole bunch of more people coming just since it got announced. That was the small group of people who I talked to before we announced it. There’s a whole bunch more. Then on the journalism side, the alumni network of Jake, and Ta-Nehisi, and Kate, and hopefully you. Everyone’s wanted to help. Hopefully in that good will and offers of support, we come up with a model that works.

Can you talk a little bit through that, because I think about this a lot. Journalism isn’t a charity, but it is. It’s sort of become that way. Bezos, I think they’re making a tiny bit of money. It’s not an enormous amount of money. I always bug internet billionaires to invest in the New York Times and things like that. I’m always trying to get one of them to put a billion dollars into something like the New York Times. I’m like, “What would they do with a billion dollars?”

It’s interesting that it’s now internet people that they’re getting the money from or tech people, but that’s where the money is. They’re interested in it, and some of them are guilty for having ruined local journalism essentially, or ruined the business model.

Indirectly. It wasn’t the goal, but yeah, through the things that they founded. I think that’s a really interesting point. It’s something that I’ve given a lot of thought to recently. As people are successful and they try to make a difference in the world, you can be involved philanthropically. You can be involved civically. Some people buy art. Some people buy sports teams. I actually think this is going to be a new category of things that people say, “I can make a huge impact in the world.” People make movies and documentaries.

I think this is going to be a category that people really focus on. I’ve seen it myself, the amount of people that are interested. Then there’s actual real foundations who you can raise money from to get grants to do journalism, of which we’re going to tap into. But ultimately what we’ve said is we’re going to stand this up and give it a long runway and a lot of resources. Ultimately, it does need to stand on its own. At some point, it needs to. We do think we can, through a combination of … there are grants, events, which is a big thing, the way people use these platforms. Then we’re going to see what happens.

There is, I believe, an audience for print that gets given to people on street corners. There is, if you look in our paper and you look at the Kennedy Center, the 930 Club, the Anthem, there is no single better way to see every show that’s coming in town in those venues and picking up the back page of the City Paper. It’s the best. There’s no digital equivalent.

Actually, we used to paste those down. One would come up, and you’d lose it on the floor. Then you’d paste it down.

I’m sure.

I have memories of that kind of stuff.

Yeah, but it still is … That’s why they give us the money they do, because it actually does sell tickets to events.

Let’s talk about the business models of these things, because most of these as I recall when I was there, it was selling ads to 930 Club. I know Seth Hurwitz is involved.

Yeah, Seth.

It was club things, it was beer. There was a lot of liquor. That was the City Paper, and the Washington Post of course had Heckinger’s and Woody’s and things like that, which soon died, and classifieds was a very important part of the City Paper.

Now Craigslist decimated everybody, essentially, and more other technologies like that. I think probably Craigslist did more to decimate local news, because that was … The fact of the matter is, classifieds weren’t good. They were expensive. They didn’t work. They were static. The people on the other end were rude. All kinds of problems with their businesses that they never fixed or addressed. When you’re thinking about that business plan, advertising is the No. 1, correct?

Advertising is the vast majority, print advertising.

Print advertising.

Then digital, and then some amount of events.

Right. How do you then rethink that? Because I sit around, and there’s almost no way out of it that is easy.

I think, just like I’ve done with the other companies that we’ve bought where you find a really good company you can make better, I think we can execute a lot better. The company’s lost money for five years but it hasn’t lost so much money. Incremental things make a huge difference for us. I think we can execute on the sales side in a big way. If we just tap into the people who believe in what we’re doing, that will make a gigantic difference. That’s one.

I think we can have a much better digital footprint. We’re going to transfer the platform to something that’s a lot more user friendly and better for serving ads. I think we can do better there.

Events is a gigantic opportunity for us. You asked about the ads. The ads are the local entertainment. It’s arts is what it is for us. There’s a way, I think, to curate interesting events with them and partnership with them and increase our events business, as you well know. At Recode, you’re a big believer in events.

I’m way behind. It’s 15 years later. I was catching up.

Look, I’ll give you another just interesting thing that we thought about is, the arts organizations in town are the ones who really provide 80 percent of our advertising. They sell about two and a half million tickets a year in Washington. If you add up the sports teams in town, they sell six million tickets. We get not a dollar from them, but we’re the best way to reach the millennial audience. We’re actually going to start a sports section. We’re not going to cover, since we’re weekly, we’re not going to cover games and standings, but we’re going to tell the behind-the-scenes story of the athletes and the teams. They’re fantastic stories, the same stories we tell about everyone else in town. We believe that the sports organizations will then want to be supporters of ours. All of these things, any one of these could tilt us over to …

All right, one of the issues around City Paper, as I remember, is always bite the hand that feeds you, essentially. It was way before snark and the internet, which now it seems tame in comparison, City Paper was always really holding feet to the fire of power, including people like the 930 Club, all your advertisers. It was always an issue when I was there. It was that, and it was quite tense. Now it’s, I would assume, even more weaponized, essentially.

I actually think it’s become a little less. I think that was they had to stake out their role in the community. When the Post was doing what it was doing, that was the right role. I think now that the Post has become somewhat more nationally focused, that we can be a little less known for just doing that. I think we are the ones who hold people’s feet to the fire. We do hold people accountable, especially local politicians. It’s funny, when I was thinking of buying this …

What was that column? What was the column?

Loose Lips.

Loose Lips. Right.

When I was thinking of buying it, a very prominent person in town came over to me and said, “I heard you’re thinking of buying the City Paper.” I said, “What are you talking about?” He said, “Come on.” Then I said, “Well, I’m thinking about it.” They said, “Well then, are you going to kill Loose Lips?” I said, “Well, now that you’ve said that, I’m definitely not killing it.” I said, “First of all, I’m not making editorial decisions, but we’re not.” It is known for that.

I’m not a believer in snark. Alexa isn’t either. I don’t think snark for the sake of that is a tone that really is attractive to a wide audience. I think there’s a way to be responsible both positively when there’s good stories to tell and negatively when there’s negative stories to tell.

How do you do that in this age? Because I have to say, media has gotten utterly nasty. Jake Tapper is pretty tough on Twitter, or anybody is.

Yeah, but if you read the cover story about Trayon White, the new council member, it’s an amazing story. He’s a 32-year-old up-and-coming guy, just got elected. It’s really a positive story about a guy who’s a positive guy. You know what? I actually believe readers want to read those. I think there’s a role. I think people want to hear good because of what you’ve said. Everything else gears so negative. It can’t be Pollyanna-ish, but I think if there’s good stuff happening and you can write about those things, I think there’s a lot of desire for people to read that.

When you are with your editor, she was part of finding an owner. I know that. You do want to find a good owner. When I was looking for money, I was definitely very wary of venture capitalists, for example. I just didn’t want to talk to them. I didn’t want them to have any control over me, and so I picked NBC and Terry Semel, who are both media people — you know what I mean? — that really did understand those things.

Even then, it’s hard. Even then, there’s often … every now and then, even when I was working at the Journal, there was always sort of — I wouldn’t say meddling, because it never really got to that, but it was definitely a constant worry. How do you look at the new … When you look at that, what do you think about as being the owner, because you got to be … Pierre Omidyar got in trouble at the Intercept. All good intentions, by the way. Pierre has a lot of astonishingly good intentions. Bezos has managed rather well to stay out of the news on being a meddling owner, but how do you look at that?

You’re not a meddling owner. You don’t go there. I’ve literally been to the office twice, once when I was thinking about buying it and once with a bottle of champagne when we did it. I haven’t been back.

Right, but you’ve got to be thinking about how it goes, because …

I do.

When people say, “Why would you buy this?” what would be the reason?

Because I believe that it’s important to support high-quality journalism. I didn’t want it to go away, and I didn’t want it to be minimized. I wanted it to be everything it can be. That was it. Period. Full stop. That was the reason I did it. I think we’re living in a time where it’s more important than ever.

We can do that. I don’t need to go there, and you just say, “I’m not getting involved in editorial one way or the other.” You walk the walk and you prove that, and you have that separation. That’s what we’ve done, and it’s what we’re going to do.

But then …

That goes, by the way, for everyone else who was involved around it, all the advisers and everyone else. They all play by the same rules.

Right, that they can’t be irritated or annoyed and stuff like that.

Nope, and everyone knows that that’s part of what comes with the territory. I know that I’m going to have uncomfortable moments. I already had. I had someone call me last week, “I haven’t seen you in a while. Could I come see you? I hear the paper is doing something, writing something.” I just said, “I’m not getting involved in those things.” I just think mostly everything you do in life that’s positive has some negative. On this one, I’ll take a little bit of negative for all the good we’ll be able to do.

Right. We’re going to talk more with Mark Ein. He’s here. He’s an investor and entrepreneur in Washington. He has recently bought the Washington City Paper, getting involved in digital journalism and regular journalism. When we get back, we’re going to talk more about where he’s going next with his various investments.


We’re here with Mark Ein. He’s an investor and entrepreneur here in Washington, D.C. You talked at the beginning about this idea of Washington losing its step in a technology sense. Now, I was here for the Washington Post. I wrote about the first internet companies. Mark Pincus started his first company from Zynga. Obviously Steve Case and Ted Leonsis were here with AOL, which sort of ran into a wall eventually. Now it’s called Oath. I just interviewed Tim Armstrong onstage, but that company’s sort of a shadow of what it was. All of the original internet companies were here, MCI, PSI Net.




All of them, because the internet hub was here. May East I think was here. There were obviously defense department things, but it was a very … In the early stages, it was a hub of activity. I think we could pretty much say AOL was the most critical at that time. How do you look at the scene here when you look around the technology scene? What happened?

Yeah, so I’ve been a big champion in trying to be supportive. It is.

It’s important for the local.

Yeah, it is. In 1999 when everyone was going out to northern Virginia, I planted a flag on 7th Street downtown in a loft to say this is where it’s going to go. I think the first internet wave was about building the pipes and the infrastructure, and this community was perfect for that for all the reasons we said. It was the perfect place for that, and that’s what we did.

The second wave was much more about the creative economy and the creative class. That just has not been a strength of Washington relative to other places. There have been some good companies, Blackboard and others. LivingSocial was a big hope at one point here. There’s some that people aren’t … There’s a lot of genomics and stuff out of NIH that’s good, but it has not been nearly what the first wave is. It’s frustrating to a lot of people. There’s still a lot of activity and a lot of hope, but the results speak for themselves. We keep trying and keep hoping. It really only takes one of those kind of … The center …

Right. No, it doesn’t actually. There’s always one. I think of Los Angeles, Demand Media, then not. Snapchat’s obviously struggling. Myspace was in LA, and then it didn’t. Austin had a whole bunch of them. It’s never been replicated outside of Silicon Valley on a massive scale, except maybe New York a little bit, but still not.

Yeah, but when you get those sort of suns that are centers of the solar system, look at what the spinouts … Look, we’re sitting in Vox’s office, which came out of AOL. There’s a whole bunch. Ted came out of AOL. There’s a lot of stuff that came out of AOL. Entrepreneurs, venture capital, a lot of good things.

A company and talent that doesn’t get a lot of attention is MicroStrategy, actually. A company … Appian just went public. Clarabridge, Alarm.com. It was actually a little bit like the smaller version of that. You need those. You need the ones that break away that become worth a lot of money and were magnets of talent. We just haven’t had one of those in a long time. We keep trying, but it hasn’t been as good. That’s one of the reasons I also pivoted to looking to buying companies outside of this area, but ones, again, where we could be a catalyst to help them grow.

How do you create those? Here you are trying to create sort of reinvigoration of media that was popular, and then saw some really hard times. How do you do that as an entrepreneur, thinking about it? I’m thinking local is a really good idea. The LA Times just got bought by a billionaire there who’s a local billionaire. I think it’s better than the Tronc billionaires, that guy from Chicago.

When you’re looking at all this, a really interesting thing of how you … Steve Case talks about this. How do you create economies elsewhere? Because that’s what’s going on right now around jobs elsewhere in this country.

Yeah. I think that the local journalism, it’s interesting, literally in the three months I’ve been looking at this, I feel like we just found ourselves on the path of progress. Facebook just hired Campbell Brown to focus on local news. Google is focused on it. The World Economic Forum, everyone feels like this is something they’ve got to crack the code on. I think obviously with the election, people are realizing the issue of not having real news, and people are realizing there’s some amount of effort on the national level, but local is really important.

I feel like we’re in the path of progress. How it all comes together and manifests itself into something sustainable, we’ll see. Again, this is something I’m passionate about, but it isn’t my day job. My job is to help and be a catalyst, bring the talent and capital and relationships, but this isn’t what I’m doing day in and day out.

But when you think about it, when you look at the Facebooks of the world as a media owner, they’re in a lot of trouble lately of how they’ve behaved. Campbell was just on our stages and caused a lot of controversy. She said, “I’m not here to help publishers make money,” which I’m like, “You kind of are. That’s really kind of your job, but okay.” The point she was making is it doesn’t work, it doesn’t work. We’re not the be-all and end-all, and yet everything’s moved to Facebook, or people’s new distribution has happened there.

I think they’re at the beginning of their journey. We’ll see where it goes.

At the beginning of their journey?

I was as surprised as you were to hear that. I think ultimately it’s not a sustainable ecosystem where people produce content and someone else monetizes it. That’s not going to work in the long term. Something’s got to give. I think hopefully there’s models that are good for them and also good for local publishers who can invest in the content.

One thing, Kara, I mentioned one area, sports, that we’re looking at a job, we just put someone new in locally. The editor Alexa tells me, she says, “Mark, every time we post a job,” she goes, “I’m embarrassed by the amount of high-quality people we get who want to work here. There are so many journalists looking for a platform, really high-quality journalists.” There’s way more content that should be written than is being funded right now.

I’ve said with this, if we ever make money, it’s all going back in. I have to assume whatever money I’ve put in, I’m never getting out. My dream would be to grow our revenues so that we can hire more of those journalists and a couple more things.

What are your revenues? Are you going to tell me? You’re not going to tell me.

No, but it’s not huge.

What did you buy it for?

It wasn’t a huge amount of money.

No. That number I saw in …

Yeah, that wasn’t right, because it came with a lot of liabilities and losses and stuff. You can never judge it by that.

Right, and how much you’re going to … No, of course, how much you’re going to lose a year.

You can’t, but it’s going to be a meaningful investment over the next couple of years. It’s not going to turn around, but it’s something that I’m enthusiastic about doing.

All right. Let’s finish up talking about where you think the next wave is going in business. What are you looking at? You’re not doing as much investing. You’re sticking with these companies, but you obviously have an itchy attitude towards new things.

Yeah. What I decided to do is to not do a ton of things, but every year to find a company that I could buy, which — not the City Paper. That is not the investment part of my life. That’s the philanthropic.

Right. It’s tennis. Tennis and City Paper.

Yeah, those are like the philanthropic parts of my life. The real business part of my life is every year or two finding a great company we can buy and help be a catalyst to grow it. I’ve used these public vehicles called SPACs. That’s what capital investment’s for.

Explain SPACs.

We go out and we raise … The last one we raised $ 400 million. It’s a public company.

Chamath just did that.

Chamath did do that. Yeah, we’ve been doing it for 10 years. We’ve done three successful, really successful deals with it. We just raised our fourth one in August.

You have $ 450 million just burning a hole in your pocket.

Yeah, 400. We’re looking for the right company to invest in. Our thing is is that we’re really long-term investors. This is what I was doing with my own capital, and this is the way to do it at bigger scale. I think we’re really good partners to management teams, the three that we’re …

This is just for people who don’t know, you buy a company and then it instantly becomes public, because the SPAC is public.

Yeah, because we’re public. We’re public with cash. Then you find a private company. Then they get our cash in the public vehicle, and they get us and the things that we can bring.

Some people are talking about internet companies doing this so they can go public very quickly without the whole rigamarole that happens.

Yeah, there’s a lot of advantages of going public this way. I believe we’ve proven it. It has to be the right situation. It’s not right for every company, but it’s right for a lot of companies. Every one of the ones that we’ve done, the companies were effusive about the experience. Our investors made money, and it’s been great. We’re looking for No. 4.

The company that we did out of the second one I love, a company called Lindblad Expeditions. It’s a company that takes people in partnership with National Geographic, Arctic, Antarctic, Galapagos. The basic thesis there two or three years ago was …

Capital constraint.

Capital constraint, huge returns on capital, great brand, entrepreneur built the business, never had a partner. We met him, we gave him capital to grow, but it was basically the theory that people in the world want experiences, not stuff.

That is true.

We take people to … It’s interesting. I thought about the arc of my own career. When I started on Wall Street, it was what tie you wore and suit you wore. Move to LA, it’s what car you drove. D.C. was the size of your office in some building here.

Is that it?

That’s what it was. Today, your brand is who you are on Instagram, right, and Facebook. We take people to the Arctic to take pictures with the polar bears, and Antarctic with the penguins, and the blue-footed boobies in Galapagos. There’s an insatiable desire for people to do that.

The Airbnb experience is unriveted too. No one else is paying attention to them, but I …

To their experiences.

Their experiences they’re adding to their business, I find them really interesting. I’ve done a whole bunch.

Yeah. I’m a huge believer in this, and I also think as we get more urbanized and more heads-down in our phones, just the need and the opportunity to take people away and to nature and see the world and get away and unplug for a little bit of time is something that’s just going to be a really, really important, profound trend for a long time. Lindblad’s one of the great leaders in that.

So the anti-tech addiction thing.

It is. I think it’s an antidote to that and a tonic to that.

Except you bring your Instagram.

We want you to post #lindblad when you’re there so people see how good it is, but you’re not when you’re on the iceberg so much.

I don’t think there’s an experience anyone can have anymore that they don’t chronicle. My goal is at some point to become a hermit where I just don’t speak to anyone, just go off of everything, and I’ll be gone kind of thing.

I think the detox idea is a good one.

It’s interesting.

It is, but we love that, and I think finding other things like that that center around experiences is a really interesting trend that we’re interested in.

What else are you looking at?

In the third one, we actually bought an enterprise software for the PR communications industry called Scission. We own PR Newswire amongst other stuff.

Oh nice.

Our mission there is really interesting. This was a large company built by GTCR, a private equity firm in Chicago, and it’s enterprise software in the cloud for that industry. Our mission there is to make earned media measurable the way that paid media is. We got the guy from Oracle. Obviously a bunch of Silicon Valley has made paid media measurable, and we’re trying to do the same for earned media. We own PR Newswire and a bunch of other assets.

For those who don’t know, PR Newswire is where everybody puts their …

You put your press releases.

Press release on.

Right. I’m a huge believer too in earned media. Obviously you look at the presidential election, the power of earned media is proven, but it’s hard to measure. People don’t know how much to spend, how much to invest. If we can take this gigantic platform we have, we’re the biggest company in the world by a factor of three and actually make it measurable, we think we can prove the efficacy of it, and people invest more in. Yeah.

I’m curious what you think Donald Trump’s tweets are. Are they earned or paid media?

I stay away from that.

All right, stay away from that.

We love that company, and we’re seeing a lot of really interesting things for capital investment for. There are a lot of companies doing really interesting things that with a little bit of capital and some help, can become great long-term world-class companies.

All right. Last couple questions. Being in D.C., what is it like here now with this mood of the country? What’s going to solve it? It must be exhausting. It’s exhausting being in California.

Yeah. It is a little harder to get away. It’s interesting. It is a company town, but I don’t work for the company, so you’re a little bit removed from it day in and day out, but you’re close to it. By proximity, you can’t ignore it. Yeah, I think it’s disorienting. It’s disorienting for all of us, no matter where you live, but it is interesting when you are in Washington, as you know, because you lived here, because you get a disproportionate amount of attention.

I’ll tell you this, that when I bought the City Paper, the Washington Post wrote an article.

I saw it.

I got a note from the president congratulating me.

You’re kidding.


What did he say?


Oh wow. Huh.

That’s a little anecdote about …

Does he know you own Katharine Graham’s house?

No, he doesn’t, but it’s an interesting anecdote about what it means to live in Washington, as you know, that you just have a greater spotlight. Whenever I travel, people are amazed at how senators and congressmen and presidents, but it’s a small community here. It’s a little … That’s actually one of the reasons I love living here. I really love this place, because people are interesting and they’re doing interesting things. They care about the world. It’s tricky at times, but it’s a place where people are making a difference, but at the same time, it’s kind of a small town.

Absolutely. Then one question I ask everybody. You’re an entrepreneur. We give entrepreneurial advice to people. Either pick something you did really well or something not so well, and what you learned or didn’t learn, or did well that you think, “That was really great?”

My best advice is just you just have to follow your internal compass and follow your true north. I’ve just seen so many times where people take a shortcut, because they think that it’s going to get them where they want to go, and it ends up being the thing that kills them. In the end, you oftentimes have to do … I just think if you take a long-term view … I’ve always thought it’s a long life in a small world. Treat people well, and that’ll … Best advice you can take.

I just think you just follow your internal compass. Always try to follow your true north. It’ll serve you well, even in the moment if it sometimes feels like it’s not the most expedient thing to do, just know that long term it’ll pay off.

In the day after, you said when your investment strategy feels like they’re just losing you money the next day, how do you feel about owning a local news organization?

Again, this is the different …

You feel better about it.

It’s different, because it’s in the philanthropic part of my life. We’ve gone in with the expectation it’s different. Look, I really believe that we can drive more revenues. As I’ve said, if that turns out that we’re making money, we’re just going to hire more people. I’m really passionate about this. I think this is a platform that we can do a lot of good with.

Okay. Mark Ein. Oh, by the way, congratulations to Mark Ein. He’s here. He just had a child today, or last night.

Eight hours ago.

Are you tired? Good luck with that.


Good luck.

Thanks Kara, it’s good to see you.

Congratulations. Mark, thank you for talking to us today, especially today.

Recode – All

Cash For Apps: Make money with android app

Full transcript: Benchmark partner Sarah Tavel on Recode Decode

In venture capital, “Men get promoted based on potential and women get promoted based on what they’ve achieved. … That is starting to change.”

On this episode of Recode Decode, hosted by Kara Swisher, Benchmark partner Sarah Tavel talks with Kara and Recode’s Teddy Schleifer about her career in tech companies and venture capital. Her resume includes stints at Pinterest, Bessemer Venture Partners and Greylock Partners, but last year she became the first woman partner hired at Benchmark, where one of her focuses is cryptocurrencies.

You can read a write-up of the interview here or listen to the whole thing in the audio player above. Below, we’ve also provided a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

Kara Swisher: Hi, I’m Kara Swisher, executive editor of Recode. You may know me as the person who decides what price bitcoin sells at, but in my spare time I talk tech, and you’re listening to Recode Decode, a podcast about tech and media’s key players, big ideas and how they’re changing the world we live in. You can find more episodes of Recode Radio on Apple Podcasts, Spotify, Google Play Music or wherever you listen to podcasts, or just visit recode.net/podcasts for more.

Today in the red chair is Sarah Tavel, a partner at the venture capital firm Benchmark. She was the first woman ever hired as a partner by the firm and that was in May of 2017. She previously worked at Bessemer Venture Partners, Pinterest and Greylock Partners. Sarah, welcome to Recode Decode.

Sarah Tavel: Thank you so much.

KS: And joining me here today for the interview is Recode’s senior finance and influence editor. Is that your new title?

TS: My fancy title, right.

KS: Teddy Schleifer. He writes a lot about venture capital firms like Benchmark. Hey, Teddy.

TS: Hey.

KS: How are you doing?

TS: Good.

KS: I’ve known Sarah for a while, I guess, and she was also one of our Recode 100 winners.

The very tail end but I’ll take it.

KS: Take it, you’ll go … I guarantee you a higher rating this year if you do well, especially with bitcoin. Why don’t we start talking a little bit about your background, because you worked at a lot of places and you’re a relatively young person, but you’ve been a venture capitalist. You worked in …

Yeah, I started my venture career one year out of college, which is pretty atypical.

KS: Why don’t you go through that? Because I know, we’re not going to overly focus on the woman issue, but there’s not that many women venture capitalists and I want to talk about why that is a little bit later. But why don’t we talk about your journey and where you went?

I got into venture … Taking a step back, I was a philosophy major in college, so I had always been interested in investing but didn’t really even know what venture capital was until basically the week I applied to a venture job.

KS: But why that after college?

So what happened is, I was at a strategy consulting firm that was a startup and I had joined this firm because I’d done a bunch of entrepreneurial things in college and just wanted to be part of a startup.

KS: Like what?

It sounds quite random, but I started a house-painting company, an exterior residential house-painting company that ended up expanding into more kind of general contracting. I sold ads for all these random publications. I was kind of like a local ad sales rep, and I just realized … I knew how to sell and so I kept on selling ads to the same people for different products, basically. And so I was kind of more focused on making money in college than I was going to classes. And it ended up being that I joined this strategy consulting firm, and it kind of went up.

And then as it often does, one of our biggest clients had some budget problems and we started to thrash and I started to look for a new job. And I’d always been interested, actually, in investing. My dad was a public equity investor and I started to look into equity research jobs and then had the really good fortune of talking to one of my friends who I had known in college and she was like, “You know what? You love investing and you did all these random entrepreneurial things in college. You should look into venture capital.”

And I was honestly like, “Well, what’s venture capital?” And so I went out … There’s this bookstore in Harvard Square called the Co-op and I bought the “Vault Guide to Venture Capital.” And it was one of those things that the more I read, the more I realized that this was what I wanted to do. It felt super exciting to get to work with founders in the early stages of a company and still be doing investing. And I knew the lowest rung of the ladder in a venture capital firm is this sourcing role, where you’re cold-calling founders and you’re trying to get them to take a next meeting and take your money eventually. And I knew through my ad experience that I could do that. I knew how to do 20 calls in a day and sell people. So I ended up applying to Bessemer.

KS: Which is based there.

That’s right. So they have a place upstate in Larchmont, New York. And it was super lucky timing because they were looking to hire an analyst at the team at the same time that I was looking to jump ship, and it’s really thanks to the random work experience I had in college that I ended up getting the job and joining .. I think I was the first woman they hired in probably 10 years. And it was supposed to be a two-year job and ended up being six for me.

So I was five years in the New York office. I was working with one partner, Jeremy Levine, I don’t know if you know him. He’s really an awesome person. So I was there. I was working on sourcing deals in the beginning for software as a service companies. Companies like Cornerstone, OnDemand and Mindbody and others, and then worked on a bunch of companies that really range from deep in the stack to hire, kind of consumer stuff like diapers.com. I moved to the West Coast about five years in.

KS: Because you had to?

No, I grew up in Manhattan and there was a combination of being a little sick of New York, and also I started to realize that New York City was a local maxima. Like if I really wanted to build my career in technology, I wanted to be in the global maxima. I wanted to be in the place where the best were.

And so I transferred from Bessemer’s New York office to the Menlo Park office. And actually what ended up being really fortuitous is that I had been tracking this one company, Pinterest. I was an early user of the product and just really, really loved what they were doing, and I had actually met the founders, actually Paul Sciarra, when they were working on the precursor to Pinterest called Tote.

KS: Oh, wow.

So as Pinterest came out, I started to play with it. I loved it so much and reached out to them basically the day I moved to San Francisco and we ended up sourcing the investment for Bessemer. We did the series A. It was a four-person company at the time. It was really minuscule. And then, as you know, I ended up just loving the company so much that I decided to jump ship and join.

TS: I’d love to get a little bit more into just the experience of being a young person at a venture capital firm, not being a general partner or something. When you talk to people today, there is occasionally frustration that there’s people who steal a deal or market the deals there. As are people who will say it’s hard, some folks in venture don’t feel that it’s a meritocracy, being a young person at a firm. What was it like being at Bessemer? What was it like in general? You’re still fairly young, but being somebody who’s been in venture for a long time and growing up in the business about being an analyst or an associate at a big top tier venture firm, how did you succeed there?

There were a bunch of different factors that really influenced my early days at Bessemer. First of all, I was coming into a venture capital firm with really no experience in technology and no actual investing experience. Everything was really new to me and I was the only woman in a 25-person firm. I felt physically the smallest. It felt very different.

I’d never been in a context where I was the only woman, actually. So it was one of those things. I didn’t really know what to expect and it ended up feeling hard in the beginning. And the nice thing, though, about the analyst job in a venture capital firm is that the measure of merit is very objective, which is, “Do you source good deals?” And so it was the type of thing that I didn’t have to politic to get ahead. I just had to do what I knew I could do, which is call a lot of companies, work really hard.

KS: But how did you evaluate them?

In the beginning, you know, when you’re an analyst, you actually are supposed to orient towards companies that are already kind of working, and so you end up meeting companies and you learn what questions to ask, how are they … I was doing a lot of software as a service companies. Where is their monthly recurring revenue? How much does it cost to acquire the customer? How fast are they growing? How much have they raised?

And so then there’s like those things that are pretty objective also. And then what we would do is, every Monday, we would have an analyst meeting where basically the analyst would present the two or three most interesting companies that they spoke to the prior week and that was how you circulate or socialize the company to the partners and then they would do the next step. You would be part of the diligence process for that company and that was how you started to develop your own pattern recognition and learn how to diligence the company and then ultimately which companies to invest in.

KS: To Teddy’s question, most of the younger people source the better things because they’re on the ground. What do you need them for?

What do you need the young people?

KS: No, the old.

Well, in the beginning you don’t know what’s good.

KS: Right.

Right? As a young person. What you do know is, the way I think of it is that you get very, very good in the early days of knowing what are the 50 companies that the firm should meet with every year. And then as you’ve progress, you go from knowing what the 50 companies are that you should meet, to then you get a little bit better, and you know what are the 30 that you should be spending time with. And then it’s, what are the 10, but ultimately the hardest decision is what are the two that you invest in?

KS: Right.

That’s where the gray hair really helps. And then it’s also, as you know, it’s winning the deal. It’s a lot harder to do that when you’re a year out of college.

KS: Right.

TS: And so you felt like being a young person at a venture firm the same way that a GP is evaluated based on their returns individually. You felt like if you were one of the people that sourced, you know, you presented the list of 50, you presented a list of 10, and the company succeeded they would say, “Sarah sourced this deal. She was the analyst and she gets points.”

That’s exactly the way.

TS: Do you think that’s still true today in venture? Do you think that there’s … Obviously there are some folks who kind of walk in the door at a GP level or at a higher level than someone in their 20s. But you think that’s still kind of the path to success for someone who is fresh out of college or maybe has an MBA?

If you’re joining a venture firm in the more junior roles, but even if you join as a principal or a VP, at the end of the day, it’s so much about seeing the right deals. That is really what it comes down to, and again, there’s so much subjectivity in who gets credit for a deal.

KS: That’s all we do as reporters.

It’s really hard.

KS: “I did Uber!” “No I did Uber!”


KS: “Last year I didn’t do Uber.”

Right. Right. Yeah. And you know, success has many fathers, as they say, and … you even look at the Facebook story, and there’s three people who claim having sourced that investment. So there’s still always that question, but it’s a very objective way for a young person to say that they’re doing a good job. And then also to build their own personal brand and ultimately …

KS: They have the relationships with the founders.


KS: Was that harder as a woman?

I would assume so. It’s so hard to know, because I don’t have an A/B experiment. But I don’t know the answer to that.

KS: When you pal around …

I mean, I didn’t pal around too much.

KS: Not too much drinking and going to clubs. So you got interested in Pinterest and went there?

Yes, that’s right.

KS: So what caused that?

I’d been in venture for six years, actually, by the time I left.

KS: Which made you ancient?

Which made me ancient, and it was one of those things where I knew a couple things. I knew that I had basically locked in a career in venture. Like Pinterest was just … I mean super lucky, it was an incredible, like it was already really growing. And I believed so much in the product from the very beginning that I just had a lot of conviction that this was going to become a really important company. And at the same time, I always had this voice in the back of my head, which was that I wanted to experience myself in the company and I wanted to know what it was like to be in the company.

It was partially just my own experience, like I’ve always been on sports teams. I was captain of the rugby team. I loved being a part of a team and leading a team and wanted to know what that was like to do it in the big leagues, in a real company. And then I also always felt like I would go to board meetings and there were something that felt almost a little inauthentic to me, that the CEO would ask for advice on something and I could come from a very rational, analytical place, but I didn’t feel like I could come from a place that was from the heart. And that’s kind of more who I am, like I really want to be able to have that empathy, come from that …

KS: Board meetings can be Kabuki theater.

There’s definitely a part of that. And so there was a voice in the back of my head for a long time and it just got louder and louder, the more time I spent with Pinterest, like at the time I was doing anything I could to help make the company successful. When we invested, it was a four-, five-person company growing really quickly. And there was just so much to get done that they didn’t have enough people around the table to do it. So I was chasing domain squatters for Ben, trying to find engineers, doing whatever I could and just realizing that you could only do so much from the outside. And so I just realized, you know … Do you know the Bezos regret minimization framework?

He has this great video where he talks about … I remember watching this video as I was making this decision of making decisions today that minimizes the regret you have in the future. And I realized that if I didn’t kind of throw my hat into the ring and try to join Pinterest — I didn’t know whether Ben would have any interest in hiring me — but if I didn’t throw my hat into the ring or at least try, I’d always regret it. So I basically called Ben up one day and essentially asked for a job. I pitched myself as a BD [business development] person.

KS: Right, perfect.

I told him I was like, “I’ll get the ’pin it’ button everywhere.” And then he actually reverse-pitched me and said, “What I really need is someone to just fix problems for me.” He’s like, “I need a utility player. I need someone who will put structure around a problem, solve it, move on to the next problem, solve it, etc.”

KS: What’s that job title?

Well, the actual job title was Business Operations Specialist, but when I started at Pinterest, the first thing I had to do was help us localize Pinterest, like we had never launched internationally. All of the strings in our code were just English and so there was no way to actually swap in a different language for the strings, so I worked with an engineer and did that. Then it was, “Oh, we’re starting to get some interest for a series C financing. Why don’t you … Here are some term sheets. Figure this out and close our series C financing,” which was actually our unicorn round, as it ended up being called, and then increasingly what ended up happening is that …

KS: So you were the one they were paying attention to.

I remember like, this was probably just a couple of months after I joined in, and I felt like I was like, “Man, if I get fired tomorrow and I go back to venture, I’ll have already learned so much like from this.”

KS: What not to do, probably.

Yeah. What not to do. It is so interesting to see how different venture firms act during this process. It is not …

KS: Can you give an example? Not say who did something …

Sure. Yeah, there is one firm that has a reputation for being founder friendly and rightly so, because I was negotiating these deal docs with Rakuten, which is a Japanese firm. And as you can imagine, it was pretty tricky, because they were using an East Coast firm, they were in Japan. This was one of their first venture investments.

So I was very focused on executing the deal with them. And then at some point in the process you have to kind of bring the deal to your insiders and see if they have any changes. And one group had … I call it death by a thousand paper cuts. It was like so many little tweaks and the other group was like, “Just when you need our signature just let me know and I’ll sign it.” And that’s a very big difference.

KS: Absolutely. Yeah. Yeah.

But then what ended up happening is that at the time that I joined Pinterest we had no product managers. Ben and Evan, the two co-founders, were actually against the idea of a product manager, and what ended up happening is that the daily stand-up for the engineers was basically the same every day. And I ended up kind of working with a bunch of engineers on a couple of projects. Those ended up shipping and kind of moving on track and so I ended up becoming really one of the first product managers at Pinterest.

KS: Right.

And I started the search team with one of the engineers. And that ended up kind of expanding into what we ended up calling our discovery team. So by the end of my time of Pinterest, I was responsible for search and all the recommendations on Pinterest, our computer vision team, our quality team and it was one of those things that’s like that, “Don’t ask what seat, just get on the rocket ship.” As a philosophy major, you feel like, “How did I end up being the product manager for really the most technical product team at Pinterest?”

KS: That’s very technical, right.

Yeah, but it ended up really working.

KS: Yeah. So why did you leave?

That was a hard decision. I really anguished over it. I mean what happened is that the Greylock team reached out to me, and I mean they were very savvy about it. “I’m not looking to leave. I’m super happy here.” And Jeff Markowitz, I don’t know Jeff, he’s fantastic. He was like, “Totally get it. But do you want to meet Reid Hoffman?” And so then you meet Reid and he’s just such a wonderful, amazing person. You come out and you feel like you’ve learned so much. And then, “Oh, that was a great meeting. Do you want to meet David Sze?” And then before you know it, you’ve met everybody on the team.

TS: They’re interviewing without you knowing it.

And it’s one of those things that it really starts to make you think like, “Gosh, this is an amazing group of people.” And I always knew I would go back to venture. I just didn’t really know when that may be.

KS: Did you want to stay through the IPO?

That was the thing I really asked myself. At the time the company was … We had just crossed 100 million monthly active users and we were about 650 people. And I felt like I had been there from the very beginning. I was on the outside in the beginning. But then you do feel like you want to be there for the entire ride. And then at the same time, I also realized that … I started to feel like I would have more impact on the venture side. And also that venture was the type of thing that … You look at the careers of many of the best venture capitalists and they really start to do their best deals five or six years into it.

KS: Yeah.

People like Eric, my partner Eric Vishria, who did just unbelievable deals in his first year. Most of the time, it takes several years to get really good at the job. And I realized, if I want to be one of the best in the industry, which is what I want to be, I should start doing the job now. And so I make it sound easy. I really did anguish over this decision because leaving a company is a very unnatural thing to do and it almost feels like your senior year in college, first semester …

KS: Right.

And everybody is getting excited for the best year and then you’re like, “All right, I just got my dream job. It’s time for me to go.” So I left, and gosh I can’t remember, I think it was July 2015, and joined the Greylock team as one of the partners.

KS: And then went to Benchmark. You’re a fascinating person to a lot of people.

That was obviously not planned. When I joined Greylock, it was a decision to be there for my venture career. What ended up happening is, I was on the consumer team at Greylock. I had led a couple of investments and then got to know the Benchmark team. And it was one of those things where they reached out to me and in a very similar fashion, you just start to get to know each of the members of the team.

KS: Right.

And then they kind of told me about their interest in really getting to know me. And I said no. Like it didn’t feel like the right thing to do at the time. And then I realized that, “You know what? I owe it to myself in a way, like this is what I want to do for my career. I owe it to myself to get to know how some of the best in the business do the job.”

KS: Right.

And it felt almost like, “What do I have to lose?” At the very least, it will make me better at my job at Greylock. And so I started to get to know the team. And then the more I got to know the team and the way they do the job at Benchmark and the way that Benchmark is structured, the more I realized like, “Wow. This is actually the way I want to do venture.”

KS: Such as what?

The way I would describe Benchmark is that it’s this very small partnership. It’s a very lean team, as you know, like there’s … It’s the six …

KS: I remember the old Benchmark. I was around for the first Benchmark.

The five tall guys?

KS: Oh yeah. They were real tall.

They were really tall. I definitely remember this meeting with them.

KS: I could only imagine.

But it was one of these things where you’ve got, like at the time, it was just five partners. I’m obviously the sixth, and you’ve got nothing else. No associates, no talent partner, no marketing partners, like they talk about investing being the only thing and there is just a complete clarity of we just do series A, series B investments. Our fund is the same size fund as it’s been since for the last, I don’t know, 15 years.

And then of course the equal partnership. Before I got to know the Benchmark team, I thought about the equal partnership as a compensation thing. Like, oh, isn’t it cool that as a new person, you get to make the same amount of money as like Bill Gurley? But what you end up feeling when you’re a part of the partnership is that it’s actually a cultural tenet of a quality like you come in and you feel like from the very beginning, that you are an equal. And that is such a different dynamic than it is in many other firms.

KS: Which is, you work your way up.

Yeah, you work your way up. You earn credibility over time. You have to prove yourself as kind of what you can field. And I came into Benchmark and I didn’t feel like I had to prove myself at all, and it was almost a scary feeling because I’m so used to …

KS: Working your way up.

Yeah. And using that to drive you. And then you realize that actually the way that you do it at Benchmark is that you don’t direct that energy internally; you direct it externally. It just felt like a very different place. And of course, every firm talks about being team oriented. But when you have an equal partnership, it really actually does happen, like where you are all focused on just doing the best investments that we can as a partnership and then supporting those investments regardless of who is on the board of that company.

KS: Well, that’s the goal at least.

Yeah, but you really do feel it.

KS: All right. We’re here with Sarah Tavel. She is a partner at Benchmark and we’ve just heard about her very varied career in a very short time.


KS: I do like that you leave and go. I think it’s fantastic when that happens. I’ve done it myself. When we get back, we’ll be talking about some of her investments and her thoughts. We’re also here with Teddy Schleifer, who covers venture capital and influence for us.

TS: Apparently.

KS: Apparently, at Recode. And we’ll talk about where Sarah thinks the big investments are right now. She’s very involved in bitcoin and other cryptocurrencies. We’ll talk about that and more.


We’re here on Recode Decode with Sarah Tavel. She’s a partner at Benchmark. She’s had a long career as a very young person at many venture capital firms, Bessemer, Greylock, she’s worked at Pinterest and now she’s at Benchmark.


KS: And when you got there what did you decide, because everybody at Benchmark has certain areas and obviously this past year, all Bill Gurley has done is deals with Uber, with all three of your partners.

It’s been a full team engagement.

KS: Full team engagement, but you focused more on cryptocurrency. Can you talk a little bit about that?

Yeah, sure. I kind of always described Benchmark as, instead of, at Greylock or other firms, you have 20 people on the field. You have to choose a very specific position. At Benchmark, you’ve got six of you. So you get to take up a lot more space, so I definitely spent a lot of time in consumer. I’ve led two deals so far at Benchmark, one of which is a consumer marketplace. I continued to look in that space but the space that I ended up feeling a real gravitational pull towards was the cryptocurrency space. I read the bitcoin white paper when I was actually at Pinterest and I remember thinking, “God, this Satoshi guy, he’s a genius. But this feels like it will never work as a currency. It’s just … it’s deflationary.” I kind of put it to the side. I didn’t really think much about it.

And then when I was at Greylock, I actually remember reading about ethereum and the DAO. And as a philosophy major, when you read about this idea of a smart contract, you know, this kind of code that self-executes to … If you have some kind of contract and if it will execute something like payment or whatever it may be. That to me was like, “Wow, this is going to change everything.” And so I started to dig in more when I was actually at Greylock, and at one point I really got involved with a Greylock and Benchmark investment called Xapo. I don’t know if you know Wences.

KS: Wences? I just saw him the other night.

Everybody calls him patient zero of Silicon Valley.

KS: He was the first person. He made me buy bitcoin. And I did a story on it 100 years ago and I can’t find my bitcoin, but that’s another issue.

That’s so funny. I think a lot of people owe him a lot of money.

KS: They do. If I ever find mine.

If he could take carry on all of the winnings that people had from buying bitcoin.

KS: John the Baptist of bitcoin.

That’s right. And he actually was the first person I sat down with as I was trying to make sense of this ecosystem and just kind of like, “Give me the 101.” And so when I joined Benchmark, the ICO stuff was just starting to happen and I really … it was one of those things that you feel this intellectual, gravitational pull. It’s also, one of the things that I always look for is where are the smartest people that I know spending their time?

And there’s just so much energy. You just keep on meeting person after person who is super intelligent and passionate about the space. And so, I spent the first few months of my time at Benchmark just doing a lot of reading, a lot of talking to people. You could read Medium post after Medium post, white paper after white paper, and still feel like you are just starting to figure it out. But it ended up being just a space that I think is still incredibly early. But there’s a lot of promising things happening.

TS: Did you feel like … What’s the temperature of the Benchmark investors in terms of limited partners on investing in crypto? Obviously every firm is deliberating how much risk they’re willing to take. Benchmark obviously has the track record that should give people some comfort, but is that a tough sell to folks to say, “Hey, we’re thinking about investing in a token. We’re thinking about potentially even just buying a raw asset.” Is that a tough conversation or do they get it?

Well, first of all, we’ve been investing in this space for several years. We invested in Xapo in 2014. We invested in a fund called Pantera, and Bitstamp in 2014. So our interest in the space isn’t new to our LPs. And then at the same time, you’ve got a lot of other venture firms who are making exactly the same phone call to their LPs, so it’s not the first time that they hear about it. And as you said, I mean, we’re in a pretty privileged position with our LPs right now, where they trust us to make the call. So that hasn’t been hard and we have our documents all …

KS: They’re throwing money at you. But not quite as much money as SoftBank.

That’s right. Yeah. The hard thing is when you keep your fund the same small size …

KS: They’re going to roll over everybody.

That’s right. But what ends up happening is, within the partnership we have a spectrum of bullishness. I mean, Bill yesterday mentioned. He was, I can’t remember exactly …

TS: He said it was nauseous talking. Everybody, this is at the Goldman Sachs tech conference with like hundreds of public investors, he says, “Everybody in this room is nauseous talking about crypto. So let’s move on.”

I saw that, I was like, “Bill.”

KS: Make the nauseous case. What’s this?

That nauseous case is a few things, which is, No. 1, when you actually look at the underlying, I mean, tear opener on bitcoin, “What dictates the price of bitcoin besides fluctuations in supply and demand?” We were actually … I think part of Bill’s comment came from the, as a partnership, we actually just came back. We flew to New York City on Sunday and spent time with a lot of people that we respect in New York City that are on the private equity side, the hedge fund side, and as you can imagine, one of the most fun topics to talk about when you’re meeting with these people is, “What do you think about what’s happening in the cryptocurrency ecosystem?”

And so it ends up being this big topic of conversation. So people on the East Coast kind of can think about bitcoin as a trade. And then when you look at the promise of the blockchain, which is this idea that we’re going to have all these decentralized applications that people talk about, we’re going to have this decentralized Uber and you’re going to call a car from the cloud, that has been an idea … They call them dApps, decentralized applications, which are basically applications that are built on a blockchain.

KS: Right.

That’s been an idea out there for several years and yet there’s nothing to show for it.

KS: Right. I think one of the things that’s interesting about it is, it’s like, I was at the early internet. And one of the facets of the early internet, there’s a lot of con men and hucksters.


KS: Very much so. Millions of them.

And that’s the same here right now.

KS: Except, you were using the internet, you understood the use of it. And I think one of the problems is I don’t even understand what it’s used for yet, or I don’t see any actual applications. And so to me, where the investments are are not necessarily in playing the currency game but what are the companies that are going to be the Google of.


KS: And I don’t know that.

No one really knows that.

KS: Why not? Like, I knew the internet. I was like, “AOL? Okay, I can see Yahoo.” I can see them, you know what I mean? It started to become very clear.

Adam, I don’t know if you … At some point you should have Adam Ludwin on. He’s has some great blog posts on exactly this issue, which is that there are so many alleged use cases for the blockchain, but really what it comes down to is this idea of being central proof, that a lot of the use cases that make a lot of sense for using bitcoin or blockchain more generally are use cases where you couldn’t do it otherwise. As an example, I mean there’s definitely illegal use cases. There’s just kind of criminal activity, buying things that are …

KS: Which is not a business you really want to get into.

Not a business you want to get into. But there are also, you’re in Venezuela and you need protection from an inflation …

KS: Which is Xapo, which is Wences …

Yes. Wences’s argument. You want to get money out of your country. There are use cases that do make sense there and I think actually a lot of the positive bumps that you probably see in bitcoin are as a result of some newspaper article talking about the people in whatever country it may be that are using bitcoin because they have nothing else that they do.

KS: Right.

And that is a real use case.

KS: Okay. It’s not the internet yet.

It’s not the internet yet. I think it’s like, we are in the infrastructure build-out phase of this ecosystem. Part of the problem is that if you think about executing a contract on ethereum or trying to build an application on ethereum, it’s just not at a point that can scale. And same with bitcoin. We have a number of challenges that have to do with scaling and therefore transactional costs, and they’re just kind of the fundamental … Like the idea of having a decentralized architecture necessarily means that you have a less efficient architecture than anything centralized, right? There is some analysis I saw someone do that talked about how it’s, I think that it was 400 million times more expensive to execute a snippet of code on ethereum as it is to on AWS.

KS: Right.

So you have to have a very strong reason to do it, and the infrastructure to really let you scale doing that is still very new, which is what a lot of the ICOs are going towards. So it’s a trite conversation. But I think we’re in the ’80s. It just happened much faster and it’s a little bit like we need to let the creativity bloom and see what …

KS: Does that mean the big companies will be the ones — or the banks — that will be taken captive of before that? Because it’s against the banks’ business. I mean if it works in the philosophical way, that it’s supposed to, you don’t need banks, you don’t need …

That would be a very long-term.

KS: Really?

I think so. There’s just a lot of intermediate steps that have to happen before we’re … I think often what happens is that in the very beginning of any new platform change, you think about disrupting kind of the incumbent stuff. But really, what ends up happening is that you kind of start to move into a more orthogonal area.

KS: Sure.

And then that ends up actually being like the third step, is that disrupts the incumbents.

KS: If you take it to the logic I assume, and I’m not a genius around this, is you don’t need governments. Because what do governments do? They provide currency and maybe an army. Ultimately if you strip it down.

Go ahead.

TS: Did you question whether or not a conclusion of this exercise will be, “Do you need venture capital firms?” I mean obviously, that’s kind of a paradox that all VC firms are in today, they employ people like you to look at crypto and should we invest in crypto, and how does Benchmark make money off of it.

Side by side, there are other venture capitalists who again have varying levels of worry about … Not that every entrepreneur in 10 years is going to raise money through an initial offering, but some will. And do you worry about kind of the existential question about — you’ve been at this for a long time, you obviously love the gig — about whether or not it’s going to raise questions about the need for venture capital firms at all?

There was a period when this ICO craze was happening where you had to ask yourself that as a VC. And if you look at the stats in 2017, there was more money put into ICOs than seed investments. That definitely has to make you wonder. And of course you look at how much money some of these companies raise in their ICOs and it completely takes the business away from a VC. But I don’t believe that the ICO structure as it is right now is going to continue. I think that there was a lot of FOMO driving it. I think that it is very clearly a bubble to me, what’s happening at the ICOs. You’ve got all these people who made a lot of money in bitcoin, and later ethereum, who are kind of rolling it into these ICOs.

KS: They’re super smart.

They think they have the Midas touch. And by the way, like the bubble … Everybody looks smart in a bull market. And so there are a lot of people who think they’re really smart right now. And then you’ve got all the people who have FOMO. I can only imagine what it must have been like in the internet bubble where you have all these people around you getting rich, and you’re like, “I want to get rich too.” And so what they end up doing is that they hear about a new blockchain project and they buy into the token offering and you’ve just got all these people raising a lot of money.

But there’s a couple of things. No. 1 is, I do think a lot of these projects are going to collapse. A lot of them have been complete scams. But even the ones that were very reputable had been blessed by a lot of the powers that be. Projects like Tezos have had pretty visible … not quite implosions, but real problems with them. And then you’ve got like a lot of the money that’s just been floating around has been irrationally exuberant. It’s just going to go away. And what we’re going to be left with is that actually making these early stage calls is really freaking hard.

And they also … For what it’s worth — and this may be right or wrong — I don’t fundamentally believe in the structure of the ICO. I don’t believe in a couple of engineers writing a white paper, trying to anticipate all the inflation rate that they want to have, all the incentives. I mean, it just seems like we’ve gone back in software development to the ’80s, where you had waterfall development. And really, to build these types of networks, you want to have a very iterative process. You want to be able to adjust the inflation rate.

I always think about War of Warcraft. Lik,e they had this gold. You know, they have gold in War of Warcraft, and they never could have anticipated some of the times when they had to have an inflationary monetary policy or a deflationary monetary policy. It took them a while to kind of get a sense for how gold was going to be used and mined to really know what to do.

So you’ve got people who try to anticipate everything. They write this long white paper. They then sell tokens to people and then they’re beholden to those people, and it makes it a lot harder to pivot, it makes it a lot harder to iterate from there. And so I think, if I were to guess, I think that you might actually see almost a kind of Open Source 2.0 type structure, where you’ve got people who want to create a new token project and they actually raise good old-fashioned equity for that company. They become the core contributors to the project. In the token offering, they get tokens on the balance sheet. And that’s their incentive to kind of continue to make that project go forward. And so you end up having a little bit more of a centralized-decentralized hybrid model that ends up, thankfully for me, still creating a need for venture capital.

KS: To invest in these companies.


KS: And it will be the companies, not the bitcoin speculators, that will make them money. I remember there was a stock market bubble during the early internet for companies that don’t exist anymore. There was one that was a storage company. They made little things you stored stuff on. It was a bunch of companies like that and then they all went away. It was really … And then there was Google years and years later.

I believe that.

KS: Later. Amazon later.


KS: It was interesting.

Right now the space is, I think, attracting the best and the worst of people.

KS: Right. Yeah I think when it becomes something that people use … when businesses use … when it really matters, but we don’t know that. We don’t know that yet.

And you would say, like I mean I think bitcoin itself as a store of value is a really important early use case, this kind of idea of payments like a digital …

KS: If you can get it to people using it.


KS: Who does that?

Well I can send you bitcoin right now.

KS: I know that, but who actually uses it for actual transactions?

Right. No one’s using it as a payment product. It’s more that people … I kind of think of it as my dystopian hedge. People are preppers and this my version of prepping.

KS: Are you a prepper?

No, I’m not a prepper. But I do have bitcoin as my dystopian hedge.

KS: Because then you will then do what?

Well you know, it’s good to feel like you have a type of currency that exists outside of our government.

KS: I just have a big pile of gold.

That’s a good idea too.

KS: Beyond this, what else are you interested in? Is it cryptocurrency all the way? You clearly are obsessed with it.

I spend a lot of time there, but I’m always looking for new opportunities and consumer … We at Benchmark still believe in the consumer space and obviously we have companies like Nextdoor and Discord and Marco Polo. And then when I was at Pinterest, I got to see the transformative impact of deep learning. My team, we started out with a plain vanilla computer vision, where I was spending nights and weekends drawing bounding boxes on pin images to try to create classifiers for, “These are boots and these are heels and these are bags,” and then we started to play around with deep learning.

And it was this tremendous step function in the experience that you could create. And so I know I’ve spent a lot of time thinking about, “Well, what are the applications both to business users and consumers that leverage deep learning in some way?” And then my partner Eric spends a lot of time there too. We’ve kind of gone up and down the stack with companies like Cerebro, which is like a chip-set company that makes it easier to train AI models, to some other companies that are I don’t think announced just yet.

KS: All right. They’re all the future stuff.


KS: Anything else that you’re worried about?

I mean, I worry about the strength of the incumbents. It is really …

KS: They’re pretty strong. Never before like this.

Never before. I didn’t realize how lucky I was to start my venture career in 2006. At the time, we had software as a service and it was almost the simplest roadmap. It was take an on-prem software product, put it in the cloud and you’ve got a public company. It was just kind of rinse and repeat. And then you had Web 2.0 and then mobile and you had going from kind of 3G to 4G, like you had all these wonderful technology transformations that created so much greenfield opportunity.

And here we are where you’ve got Facebook, Google, Amazon, Netflix, these kind of incumbents, Apple obviously, that are so strong and it makes it really, really hard for a founder to find the seam that they can exploit. And so yeah, there’s a little bit of waiting, kind of wondering when the next platform is going to emerge. Which is, I think, part of what drives a lot of people like me into crypto right now. It is a little bit kind of relative thing …

KS: Which they don’t have their arms around.

Exactly. And there’s no incumbents in crypto. You could think of bitcoin and ethereum as the incumbency, but it’s not like there’s a Mark Zuckerberg running one of those companies. They’re decentralized protocols. And that means that there’s still a lot of opportunity in the market.

KS: Okay, we’re here with Sarah Tavel who is a partner at Benchmark. We were just talking about cryptocurrency. When we get back we’re going to be talking about a bunch of other things that she’s doing as a venture capitalist.


We’re here with Sarah Tavel, a partner at Benchmark, and we’re just talking about her giant interest — her obsession, really — with cryptocurrency, which she’s correct to do so. But there’s other parts of her job. We’re going to be talking about.

Teddy, you had a question about …

TS: Sarah, you’re involved with a group of women venture capitalists — in I think a couple of cities now, it’s not just here — where the idea is to basically get together and have a network for female founders to come to when they’re looking for advice. I’m curious. There’s been a lot of organizations of women in tech. I know it’s early, have you noticed any tangible impacts yet or if it’s still of the network of female VCs or what kind of the bigger picture goal is? What do you imagine the impact of this type of thing would be?

I think it’s important to give a little context on how we got started, which was … It’s seems like so long ago now, but when all these sexual harassment cases were coming out with VCs and female entrepreneurs. And there was a little bit of … I had been organizing these kind of monthly breakfasts with a bunch of women GPs, and then we all kind of would come to these breakfasts and feel a little shell-shocked about what was happening and then we actually ended up organizing a dinner, and it was kind of like, “Well, what can we do to make it better for female founders, to make it better for female VCs?” And it ended up being this really wonderful group of women.

KS: All four of you.

That’s the thing, actually, is when I started at Bessemer in 2006 …

KS: I can’t believe the one in 25. That’s astonishing.

Yeah. And it felt like, you would look around and try to see who were the role models. And it was so small, the number of women.

KS: Mary Meeker.

I don’t think Mary Meeker was … it was people like Theresia Gouw and Jennifer Fonstad. And there was a handful — like literally a handful — of female GPs. And then and we kind of reached this point — I mean obviously there’s so far to go as an industry — but we reached a point where it felt like all of a sudden we had a critical mass of women.

And I think that sometimes you’d hear that kind of early women in Goldman Sachs or whatever group it could be, because there were so few of them, they ended up being more competitive with one another. But instead what we have now is we have a group of women that really have come together because we want to help one another. We want to make each other more successful and we want to help make female founders more successful.

And so we came together, I think that the first dinner was maybe a group of 15 GPs or so, and there’s been a couple of blog posts about it, and then we ended up trying to think, “Well what are the initiatives that we want to take on to pursue this mission?” and Jess Lee from Sequoia, who is one of the new additions to the female partnership, she ended up kind of having this idea for hosting female founder office hours. I think it was probably something that she wished she had had when she was at Polyvore.

By the way, Peter Fenton, as you guys know, was an investor in Polyvore and so we ended up … The first event we had was actually having office hours for female-founded seed companies. We did that in San Francisco. Then it kind took off and then we had one in New York, one in LA recently. We’re going to have one … I think it’s next week for series A companies here in San Francisco. And who knows whether any investments come from that. But what is important that’s coming from that without question for me is that we’re increasing access of the female VCs to female founders and vice versa.

KS: So can I ask you, why do you have to do that? I mean honestly, on some level it’s insane, that you have to do it and then you get all these comments, which drives me nuts, when we’re doing it based on standards, but they aren’t. They 100 percent aren’t doing it based on standards.

Yeah. I mean there’s definitely … I asked myself that question. I do already feel like there’s attacks on my kind of being a female VC and doing the job and then we end up taking on these other things. But we’re thinking about actually how now to … Like there are so many, as they call them, male allies out there.

KS: Allies.

I know.

KS: We shouldn’t even look at them as allies. It’s their job.

There are many of them. And so how do we integrate them into what we are doing? Like, it shouldn’t just be a female founder pushing a female VC and that’s what it is. It should be a female founder pitching a VC. And one the top VCs …

KS: Or just a founder.

Well, you have to start somewhere.

KS: Yeah. I guess.

That was one thing. Then the second thing is actually we co-hosted an event, I think it was actually last week, where it was something where we hosted a couple of panels. I hosted a panel with Rebecca Kaidan, who’s a GP now at USV, and Emily Melton, a partner at DFJ, on career trajectories for VCs, and we had 80 women in the audience who were in investing jobs in venture capital firms. And it was one of those things where I could only imagine if I had gone to attend one of those events, like when I was one or two years into the job, how inspiring that would be to me. Just seeing people who are succeeding and doing it makes you feel like you can do it too. So I think that there’s a lot of positive things coming out of it. It is a lot of work. Like we’re trying to figure out how to start to spread that around.

KS: Spread it around how, what do you mean?

Well, just getting more people under the tent to take on some of the things that we …

KS: What’s the actual problem though? I mean besides rampant sexism across this globe? But what’s the actual issue? Because you are someone they’ve let in, you know what I mean? And now you have status at Benchmark and have the experience, but they seemed to like just have one, like a Mary Meeker or you or something like that. From your perspective what’s the problem? And I know you want to be nice about it, but what you imagine?

You mentioned the biggest problem, which is …

KS: Rampant sexism.

Rampant sexism. There’s subconscious bias of course, which is a big thing. I think the subconscious bias is a really big thing, actually. If you look at … I was just reflecting on this, you look at many of the female VCs that are in GP roles have followed career trajectories that are very similar to my own, which is that you come in a more junior role, which is a lower-risk role to hire for, prove yourself and then you can get the GP role. And it’s a little bit that kind of subconscious bias thing where men get promoted based on potential and women get promoted based on what they’ve achieved.

KS: Mm-hmm.

That is a bias of which women get into the ranks. It’s just easier when you’ve already proven yourself. But at the same time, that is starting to change. I mean, you see more and more examples of women being brought into these GP roles. And I think there’s all types of things, there’s the natural thing of homophily, which is we naturally hang out with people who are like us, and there’s nothing wrong about that.

But you have to make that extra effort to go beyond your natural network. And I think, people are just starting to realize that that’s what we need to do, both when we are looking to hire a VC at a firm but then also a female executive or female engineer or underrepresented minority in one of these fast-growing startups. It takes that extra effort because we’re starting from a homogenous nucleus and you have to try extra hard to break through.

KS: Right. Absolutely. At the same time, what’s interesting to me is that it’s an ongoing issue. It’s sort of fascinating because I do think a lot of women stay in operational roles at companies because it’s a better career path trajectory. Being one of anything is always difficult.

Can we shift to the venture business in general? I don’t want you to have to be the one to talk about it, speaking of wh, but it’s really … you got real touted when you got hired. “Oh, we got Sarah Tavel.” “Wasn’t she just over here?”

TS: The same total number of women jumping from firm to firm.

KS: Sequoia next.

Just got that one.

KS: That’s right. What about Excel? Does Excel have one? Excel, you better get on it.

I am very happy at Benchmark.

KS: Good, good. So you eventually get Bill in general. Where do you imagine where we are and where it goes? I would tell you, you have SoftBank coming in.

Well that’s a big question.

KS: Just for those who don’t know SoftBank, Teddy?

TS: Sure. SoftBank is both loathed and terrorizing but also an opportunity for a lot of venture capitalists because they can mark up companies in your portfolio. But I think the bigger question here is like, obviously with valuations on the rise and SoftBank being a threat and to some extent an opportunity, how do you think about this? Does that make you think about the types of deals you do differently? Does it worry you about losing a deal because someone adds a zero to the end of the check?

It’s interesting to see that many other venture firms are having a little … I don’t know if this is fair to say, but scope creep, where a lot of funds that have started out as kind of traditional series A, series B funds are starting to expand both into the seed world and into the growth world. And so they will end up kind of competing and feeling that pressure more than we do. We went through a period of time at Benchmark where we joke it was like the empire-building phase where we …

TS: Israel.

Yeah. We had Israel, we had London, we had a bigger partnership, and our returns suffered during that time, and we ended up really trying to kind of come back to the core of Benchmark.

KS: People can’t help themselves.

A lot of people can’t help themselves. And so we kind of went through an experience where we came back and now are very, very clear on who we are and what we want to do, which is series A, series B investing, series A really being what we focus on. And SoftBank may come down to the series A one day. If so, God bless ’em.

TS: I definitely don’t think people should rule it out. I mean, the idea that they would do that.

If you are SoftBank … SoftBank wants to put a lot of money to work and it’s very hard to do that at series A. So I think it’s unlikely that that will happen. And so like for us, we’re just focused on doing what we’ve been doing for 20-plus years now, which is being the first call and really kind of trying to shepherd these companies to their full potential. We can’t ignore what’s happening with SoftBank. Like we obviously were beneficiaries of that with Uber and WeWork. And then you’ve got Katrina Lake at Stitch Fix who raised $ 42,000,000 and went public and has a multi-billion dollar company.

KS: Which didn’t take that …

$ 42,000,000. That’s just an unbelievable story. And so we hope to find many more of those companies.

KS: Can they resist that money? Because one of the things is you’re all investing in innovative and groundbreaking companies. Venture capital hasn’t been that. Everybody comes out remembering when Marc Andreessen came in and we’re going to change venture capital. Not really. It’s the same system, essentially. But what does disrupt venture capital?

I mean a lot of capital does disrupt the venture capital, right, which is the problem we’ve had as an industry. Bill obviously has been speaking about that for a while. He does a good job there. And it’s one of those things that you keep on expecting the problem to balance in the other way, and instead, it actually is just getting worse, obviously, with SoftBank as the most recent entrant

KS: Where does the money go?

The money is getting jammed into a lot companies, and I think it remains to be seen what the impact will be on these companies. Like I think about when you’re running a business, you have this decision, which is that you can turn the wheel towards growth or you can turn the wheel towards profitability, and it’s really freaking hard to turn the wheel towards profitability.

It’s like this active will every day of knowing what to say no to, which you have to say increasingly. But then when you have a SoftBank or you have just like this amount of capital available in the private markets, the amount of diligence you have to do to raise money in the private markets versus the process of going public, it’s night and day. It’s just so much easier. And so the companies can kick the can down the road by raising more money in the private markets, and then if they don’t have the same pressure towards profitability that they would otherwise have if they were public …

KS: And then they run the risk of SoftBank giving their money to a competitor.

If they say no, that is the risk that they, SoftBank …

KS: I think that was the movie “The Godfather.”

TS: Dara had a great quote yesterday at the Goldman Conference where he said yeah, “I’d rather have the capital cannon behind me than in front of me.” That’s like, kudos to them. I mean, it’s a strong negotiating tactic when they say we’re going to invest in Lyft if this SoftBank tender with Uber doesn’t go through, and then it works. I think it works.

KS: Although money isn’t always the factor.

And yet it takes a tremendous amount of discipline if you’re one of these founders, and then you have this tremendous war chest to then stay disciplined with how you use that capital. It’s just a bigger version of what we’ve faced in the earliest-stage markets, where … I’m starting to sound like an old person, but when I started my career I remember, we were working on a series A investment and it was like a $ 5,000,000 investment, we were just like, “Oh my God. This is an expensive round.” And what’s it going to do with a company that have $ 5,000,000 at the stage of the company. And here we are where the series As are easily $ 15,000,000 but can be far, far bigger than that.

KS: Some of the numbers are … You could also just put the money in the bank, I mean speaking of Pinterest, they didn’t spend a lot of their money, right?

Ben has thankfully, he has the DNA of a very disciplined …

KS: He’s cheap is what I call it.

He’s cheap. Yeah. He is cheap, and I think that it is so easy to just spend money when you have it and it really does … I am one of those people who believe that having a scarcity brings out the best in a company and really focuses you on what is core to the company and then you execute better. And so I liked that discipline and I think it remains to be seen what’s going to happen to these companies that get to raise a lot of capital.

KS: They may never go public.

They may never go public. That’s the fear …

KS: What’s the next company to go public?

What’s the next one to go public? I couldn’t say.

KS: You couldn’t say. I say Airbnb, probably.

I don’t think so. I think there’s going to be someone else before that.

KS: Really? A good one?


KS: Uber?


KS: She says nothing. All right. Last question. And then Teddy, you’ll have a last question. If you were to give a tip for someone who’s become — and I don’t wanna say female, just any venture capitalist — what would it be? What is a mistake you made that you would say, “Oh I should’ve done that differently.” It can be something you did great, too. It doesn’t have to be a mistake. Like one thing that was critical to you.

For someone young in their career?

KS: Yeah.

For me it was absolutely finding someone like a Jeremy Levine, who takes you under their wing and teaches you how to do the job. People have for a long time talked about venture capital as an apprenticeship business. And there’s no question that’s what it is because it’s one of those businesses where … I call it the learning cycle. Like the feedback cycle is not fast. It takes years for you to know whether you’re on the right track with the company. And so when you’re a young person and you don’t have that pattern recognition down yet, you have to bootstrap it from someone else’s pattern recognition. And it’s very, very hard to find a partner who is willing to invest the time in a young person to show them the craft.

I mean, I fight for 15-minute slots in my schedule right now, where if I spend an hour with someone that means I can’t spend an hour with a founder. Your time is very, very precious, and so to find someone who will make that investment, which is a very long-term investment, was critical for me. I was unbelievably lucky to get to work with Jeremy, because he’s not only just the great investor but he was a great mentor to me. I always tell people that when you join a firm, you want to make sure you’re going to be set up for success. And the biggest way is, who’s going to be that person? Who’s going to chaperone you? And you have to pick the right person.

KS: Walt Mossberg did that for me.

TS: So that’s your advice for venture capitalists. The corresponding question is you’ve now been at three firms, sounds like when you were at Pinterest you were dealing with firms. What’s your advice for CEOs who are potentially negotiating a deal or they have four term sheets, one of them is 15 percent higher. My point is, you’ve seen a lot of shops.

I always tell people two things, which is No. 1, you want to really make sure that that VC that you’re going to bring on to your board is going to be as much on the same side of the table as you are in terms of understanding what the strengths and weaknesses are for your business, what the vision is and where you want to go from there, because the last thing you want is to have that first board meeting and you kind of say, “Here’s the new initiative I want to do.” And the VC’s like, “I thought you don’t want that strategy mismatch.” That’s No. 1.

And then No. 2, and this is probably just as important, is references. The reference is like … what I always tell founders is, if someone gives you a reference and it’s a hot company here, a hot company there, it’s so easy to be a fair-weather VC and it feels good to get to call Brian Chesky or whoever it is and do a reference. But ultimately the best references, the most useful ones will be the ones when it’s a company that has been going sideways or didn’t succeed or even the CEO is like, “Oh, talk to those people and you’ll really figure out what that VC is made of.” And you want to know, like you don’t want a fair-weather fan on your board. You want someone who will do the work.

KS: And there are lots of those.

There are a lot of those.

KS: There are a lot of those, which are weaker people or people who, they’re not necessarily malevolent …

Just cheerleading, and when things are good they’re there and then they don’t do the hard work.

KS: Yeah. And also assholes, you shouldn’t go with that. They are easy to find.

I say no to assholes.

KS: Yeah, absolutely. Anyway, Sarah, this was great talking to you. It was an interesting discussion and I have a feeling you’re going to be running everything someday, it’s a sense. And thank you for coming on the show.

Thank you so much for having me.

KS: And taking your 15-minute slots. I really appreciate it. Now I feel badly for being late. And thanks to Teddy Schleifer from Recode for co-hosting with me today.

Recode – All

Full transcript: VR researcher Jeremy Bailenson on Recode Decode

“You should do impossible things in VR. You shouldn’t do things you would do otherwise.”

On this episode of Recode Decode, hosted by Kara Swisher, Jeremy Bailenson, the director of Stanford University’s Virtual Human Interaction Lab, talks about his new book, “Experience on Demand: What Virtual Reality Is, How It Works, and What It Can Do.” His work in VR is aimed at providing meaningful experiences that increase empathy.

You can listen to the entire interview here or in the audio player above. Below, we’ve also provided a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

Kara Swisher: Recode Radio presents Recode Decode, coming to you from the Vox Media Podcast Network.

Hi, I’m Kara Swisher, executive editor of Recode. You may know me as someone who believes we are living in the Matrix, the news is so ridiculous that someone has to be writing it, but in my spare time I talk tech, and you’re listening to Recode Decode, a podcast about tech and media’s key players, big ideas and how they’re changing the world we live in. You can find more episodes of Recode Decode on Apple podcasts, Spotify, Google Play Music, or wherever you listen to podcasts, or just visit recode.net/podcasts for more.

Today in the red chair is Jeremy Bailenson, the founder of the Virtual Human Interaction Lab at Stanford University, where we are taping this podcast. He’s also a professor in Stanford’s Communication Department, and is the author of a new book called “Experience on Demand: What Virtual Reality Is, How It Works, and What It Can Do.” Jeremy, welcome to Recode Decode.

Jeremy Bailenson: It’s an absolute pleasure to be here. Thank you.

Good. So, Jeremy and I met on a panel. I’ve known of you, of course, for a long time, about Common Sense Media and the impact of virtual reality on kids, and we’ll get to that in a minute. And we just went through a short version of a virtual reality thing that Jeremy’s working on, which we’ll also talk about, which is around empathy, and the actual, maybe helpful uses of VR versus just entertainment.

But let’s get a little background on you and how you got to here, and what you’re doing, and what Stanford’s doing in this area, because it’s a growing area, obviously, within Silicon Valley.

I’ve been working in virtual reality since 1999.

So you’re one of the early ones.

And my PhD was in cognitive psychology, and in 1999 I looked around and I realized that I didn’t really love what I was doing. I was building models of how the mind worked, running experiments on people and writing computer programs to represent the mind, and I decided, “I wanna leave my field.” I was lucky enough to get a postdoc at UC Santa Barbara, where I learned how to build VR from a hardware standpoint.

Why VR? What got you … Sorry to interject, but.

No. So one of the reasons I got into VR was an amazing novel called “Neuromancer,” science fiction by William Gibson.

Affects a lot of people.

It was, you know … I realized as I was trying to build artificial intelligence, I wasn’t that good at it, but with VR you can fake intelligence, you can create an illusion that causes people to really feel like they’re in a place, and I was inspired by “Neuromancer” …

What was inspiring, because I thought you were gonna say “Ready Player One,” which is about to become a movie? That’s another one.

I just re-read “Ready Player One,” and it’s awesome, but to me “Neuromancer” is the true bible.

Because why? Tell me why.

It really pushes in a world where VR is, what does it mean to be a person, what does it mean to be co-located with people. Unfortunately, it’s a very dark vision.

They all are, yeah.

Yeah, if it bleeds, it leads, right?


But in terms of, especially … You gotta remember, Gibson writes this in the late ’70s, and when he writes it, he’s working with Jaron Lanier, who is the godfather of VR, created the term, and there’s this synergy where the really early demos of VR, he takes these into account as he’s writing it. In my opinion, just really sets up a place to understand what people are …

So coming from cognitive psychology, you’d be attracted to this, re-making people the way they are in a different place?

In a world where there’s no rules, what do people do? That’s really what got me excited.

Right, and there were the games. There were a lot of these games that were in that genre and in worlds that people would create in games, even those … All the different games, all the various Dungeons & Dragons games were a version of that.

The first VR I ever did was in 1994. I was interviewing to be a grad student at Berkeley, and on the Embarcadero they had this game called Dactyl Nightmare. It was running 10 frames … It was running at 10 frames a second, the tracking was off. It was still one of the coolest things I …

What did you do in it? Dactyl Nightmare.

You stood on this platform, and they tried to do a network, and they were basically combating people and dinosaurs. And to be honest, all the details are a little fuzzy.

Right, because you liked it. You thought, “Oh, cool.”

But it was enough to make me think that …

What were you wearing on your head? Like a big giant helmet?

The helmet was not big and giant. It was certainly bigger and gianter than what we have now, consumer grade.

It’s still big and giant, yeah.

But nothing compared to the monstrosities that I later put in my lab upstairs.

Right. That’s what I thought. So you started doing that. There weren’t that many people in the field, although it was talked about a lot. There was a lot of attention towards Jaron and others.

There was a handful on engineers that were doing it, and then the reason I got this postdoc at UC Santa Barbara is because we were using it to study perception. So if you try to think about how the human understands vision, how we understand sight and sounds, VR’s a great tool, because you can, say, dissociate what the eyes see from what the body’s doing. You can have a person physically walking but not see the updates or vice versa, and it’s a really nice way to understand the visual system.

So I was lucky enough to get this postdoc at Santa Barbara where there’s, again, just a handful of people looking at psych and VR. I was lucky enough to shift out of perceptual psychology and work with a guy named Jim Blascovich, who taught me the social world, how to ask bigger questions about social interaction and communication and training, and what began was a really fun collaboration where we asked the question, in a world where there’s no rules. You can change your age, you can look at two people at once, you can have your avatar mimic somebody. When there’s no social rules, what happens and how does it change the world?

Right. And so, one of the things, meanwhile, as you’re doing this, the Internet’s starting to explode, really. I mean, there was a downturn, but it pretty much was on the up and to the right, essentially, people using it, with some focus on VR, but a lot less, because VR and other artificial intelligence were sort of hot for a while, and then weren’t, because people more focused on portals, and then social media and Twitter and things like that. What happened during that period, would you say, because it’s made a comeback, let’s just say?

So from my perspective, VR is growing in that period, because when I get there, there’s 10 people, social scientists that are even delving at all into this, and from my perspective I never thought it was gonna be a consumer product this soon. That wasn’t the frame that I had. For me it was, “Wow. We’re actually getting to publish in places that are reputable,” and “Whoa, Stanford’s bringing me out for a job interview. What’s wrong with those crazy guys? Why would they interview somebody doing something so strange in 2003?” So from my perspective, it actually was growing, but I didn’t have the consumer veil on.

Which it has, which it has moved into. So let’s talk about this, just so you define for the people who don’t know these terms, people mix them up a lot of the time, virtual reality, mixed reality. Talk about what the differences are right now. When you say virtual reality, what do you mean versus other things?

Virtual reality is complete transportation. We block out light from the physical world, we block out sound. All of your senses get replaced, and it’s really as if you went somewhere else psychologically, and you don’t see the physical world.

Right, and right now typically it relies on eyes, although there’s haptic stuff, and there’s pushback, and some smells at some point.

In my lab we do always sight and sound. We do a little bit of haptics, and we used to do a lot more, where you basically get force feedback, so you feel touch, and we do a little bit of scent. I’m happy later on to talk about our smell study, or doughnut study, and how it relates to eating.

Oh, sure. Absolutely. So virtual reality is just being transported elsewhere. Augmented reality is …

Augmented reality, the best way to think about AR is multitasking. So augmented reality, most of what you see and hear comes from the physical world, and we put a digital layer over that. So, if there’s a crowd of people, everybody can have a name tag over their head that only you can see, and you’ll know their names.

Right, so it’s imposing digital things, like Pokémon, I think, or what Ikea’s doing around clothing and things like that. I mean, around furniture, seeing it in your living room. Then mixed reality. Is that different, or is that both of them together?

Mixed reality, my humble opinion, is a term that’s been created to make the world more confusing.

That’s what we do as journalists.

Well, I think it came from a corporation first, but I won’t name that corporation. Mixed reality is, if you think of VR as all digital, then AR is mostly physical light, then mixed reality gets you somewhere in the middle.


So it’s basically, you can think of it as a continuum. How much of the light are you letting in from the physical world?

Right. Well, let’s stick to virtual reality because that’s where you work in, but when you think about virtual reality, it did go commercial. So you stayed at Stanford, and you were studying what here? What were you hired to do? You did your postdoc studying what?

We are here in the Department of Communication, and when I arrived here, what I tunnel-visioned on for eight years straight was social interaction. What happens when two people network into VR and they see each other’s avatars, and what changes in terms of how they talk, how they feel connected, what are the implications of forming friendships online, the social interaction. Because you have to get tenure here at Stanford, and the way you do that is you just become as good as you possibly can on one area.

And why this? What was your thinking in this area, besides tenure? Jeremy, I suspect you have other motivations.

Well, that’s an interesting … We’ll talk about the trajectory, but post-tenure, my trajectory changed drastically. So pre-tenure, it was work that I had thought was amazing and rigorous, and I’m very proud of it, but it wasn’t necessarily what I wanted to be doing. So the early work, the social interaction, I’m in the Department of Communications, so studying how people communicate seemed like a good fit. And remember, I came from psychology and came to a new field, communication. So I wanted to try to stay as far down the line as I could.

Now, when I get tenure in 2010, that really frees me up to do work that may not be as publishable in the short term, but it was a little more out there about things that I wanted to do. For example, this is the work we do using virtual reality to teach about climate change, or to teach about empathy, or race relations.

Yeah, we’re gonna get into that, because I just think … So the idea is using VR as a social tool to improve social justice, really.

The early work was about what happens when you put people together in VR, and I still do that work, and we can talk about it, but …

Yeah, I do wanna talk about it, but first …

Post-tenure, we shift to what happens when you put people in places, in places that teach them …

In situations.

In situations.


So it didn’t need to have the social …

Well, role-playing has been around forever, but it’s usually, you’re sitting in front of someone who doesn’t look like what you’re supposed to be or whatever. It’s hard to do, because it requires huge amounts of imagination and shifting.

Whenever we build something in VR, we always go back to the old work and we say, “What was the best way to do it before?” And we don’t try to reinvent the wheel, so we certainly look to the role-playing work.

All right. Let’s talk about where VR is now, and then we’ll talk about what you’re doing now.

So this book you’ve written, this is what you’ve been doing, is looking at that, and then shifting the focus away from just, this is what people do when they’re in VR. But I would like to know, what do people do in VR?

Luckily here at Stanford, we are a revolving door, and everybody comes here to see what we’re doing, but also to show us what they’re doing. From my perspective, there has been a tension, which is that the corporations … Their job is to make money. They make money when everybody is using VR and they are using it all day long. So that’s why you’re seeing film and media and video games. In my experience — and I have been doing this for 20 years now — VR doesn’t work for these long durations, using it every day, for a couple of reasons.

For me, it’s been watching the companies who think that they can just do everything they have always done in VR come to grips with the fact. And of course no one listens to me when I politely suggest that they have got to learn on their own, there is a reason people aren’t playing video games for 10 hours a day in VR, or why you haven’t seen a feature film that anyone has gone to, because VR is not about, in my opinion, long durations. It’s not about something you use all the time. It’s for these very intense, teachable, aha moments that …

You just did a demo in my lab, Kara, and you got it. It took you about two to three minutes, you didn’t need to be in there for 20 minutes.

Right, right. Yeah, you could. You could just do that endlessly, but there is a point where you get … It’s interesting when I try VR now, it is exactly that. I’m like, “Okay. I got that.” I don’t wanna be with the gnomes or I don’t wanna touch the whale anymore, I got touching the whale. Some of them are more appealing than others, like if you’re in Hawaii or on a boat, it’s kind of cool, but eventually that’s enough.

What we’re trying to find as a field of VR is … You know, when you and I were on the panel together, you made a, it was a funny comment about, “Who would actually wear these goggles?”


And the answer is, if the content is good enough, you will do it.

Of course, yes.

And if it’s not good enough, yes, sometimes it is, and we can talk about the cases. So my …

I was talking about commercialization. Most people wouldn’t just … It’s not affordable and hard to use.

I totally agree. I totally agree. But even if you’re going to a shopping mall or museum, the content’s got to be good enough to justify messing up your hair, getting those lines around your face and having your buddies take pictures of you and making fun. So we try to focus in the lab on content that’s worth doing, but not all content is that.

Right. So you’re focusing not on the entertainment aspect of it now?

Look, I’m all for entertainment. And when VR works for entertainment, then I think it’s gonna be great. We’re choosing to focus our lab’s energy on how to use VR to try to solve some harder problems.

On harder problems here. And what is the interest among commercial companies when you’re doing it, because they wanna what? Make movies? I mean, we can talk about why Facebook bought Oculus or why different companies are involved in it, but everybody is. Google is, all the internet companies for sure, and the entertainment companies are certainly dabbling.

Look, the companies come here and visit and all of them have a wing … You can name, which big one … They all have a wing, VR for good or VR for social. So they’re all playing in this space. And I actually think that the people who I’ve talked to, they care and they’re doing it for the right reasons.

That being said, that’s not gonna be how their business succeeds. Their businesses are gonna succeed because you read the news in VR and you’re watching your sitcoms in VR. So we spend a lot of time talking to them. We give endless demos to groups from different companies. And I talk to the leaders of these companie, and I get on my soapbox and they politely listen to me about, “You shouldn’t use it all day. It’s not for all types of content.” And we’ll see what happens.

They’d like to see it and hear it all day. Anyway, sitting here talking with Jeremy Bailenson, he’s a Stanford professor who is the founder of the Virtual Human Interaction Lab. Why did you name it that? Virtual Human … Well, how virtual humans interact.

So no one ever asks that question. I’m glad you did. It was a careful process, because I wanted to … When I first got to Stanford, I couldn’t be seen as the VR guy, because VR was not a thing, right?

Yeah, yeah. VR guy. Is that an insult? “Oh, it’s the VR guy.”

Like, “What does that weird guy …”

“Let’s move quickly from RT so he won’t come and sit with us.”

Look, had you met me in 1999, we would not be having this interview. “What do you do? That’s a ridiculous thing.”

I knew what it was.

I know you knew what it was, but I wouldn’t be worth two hours of …

I was much more interested than … I was at MIT and they’re doing all that stuff at MIT around it, but go ahead.

Of course. So I couldn’t be the VR guy. So Virtual Human Interaction really points at that social collaborative nature.

I see. So it’s humans but virtual.

That’s right.

Okay, got it. All right. Anyway, here’s the new book out called “Experience on Demand.” Can I ask you that also before we get to the next segment? “Experience on Demand,” what does that mean?

The advice, if there’s one take-home piece that listeners can have, is VR has done well. It’s not a media experience, it’s an actual experience. Our studies in the lab have shown the brain tends to respond how you’d expect it to with a real event. So as you create your content, as you choose whether or not to do content, think, “Would I want to do this in the real world?” The healthy way to think of VR is as an actual experience, not a media experience.

Yeah. It’s interesting when you think about that. I wouldn’t wanna jump out of a plane in the real world. I’d like to do it, but I wouldn’t. So I’d like to do it in a virtual …

So it’s a great point, and the distinction is could versus would. So I can’t jump out of the plane in the real world, but I would in VR.

Yes, exactly.

I can murder somebody in the real world, but I wouldn’t wanna do it. So it’s about, you should do impossible things in VR. You shouldn’t do things you would do otherwise.

Yeah. I didn’t know you want to murder people, Jeremy. All right. We’re here with Jeremy Bailenson, “Experienced on Demand: What Virtual Reality Is, How It Works, and What It Can Do” is his new book. He’s a Stanford professor. When we get back, we’re gonna talk about where virtual reality is and why so many of the internet companies are dabbling in it, and where we are in the process.


We’re here in the red chair with Jeremy Bailenson, the founder of the Virtual Human Interaction Lab at Stanford University. That’s a mouthful, Jeremy. He’s also a professor in the Communication Department and the author of a new book called “Experience on Demand: What Virtual Reality Is, How It Works, and What It Can Do.” And we’ve been talking about how he got to virtual reality.

Let’s talk about where it is now. Now, Facebook made an enormous investment by buying Oculus. Magic Leap is another … There’s just a lot of interest in Silicon Valley over this, although others are not as interested. I was just recently at Apple and they’re much more interested in AR. That’s their focus, the phone being the center of it. Can you just talk about the state of play right now? And also the academic state of play, because that’s different than the commercial one.

Well, with Apple, the first rule of Apple is you do not talk about Apple. So I’ll leave it at that without …

Oh, dear. You must stop talking about Apple.

Samsung is all in. I’m on their advisory board. I spend a lot of time working with them to help them think that through. Microsoft hired … So the genius Mark Bolas who was a USC professor, there really Oculus was born because some people go in and sit in Mark Bolas’s lab. He’s now at Microsoft. Of course, Jaron Lanier, he’s at Microsoft. The Chinese companies are all dedicating nine- to 10-figure budgets in this. Sony, of course, is the first person to really deliver to living rooms with a PlayStation VR about 10 million …

Yeah. Sony’s not a person, but go ahead.

There’s a lot of energy in that space.

Yeah. And why? What is the thinking? You’ve dealt with all of them in the very … as they enter the picture. What is their interest?

Kara, if I knew the why, I would be wealthy and famous. I think they’re struggling with the, “What do we really want people to do in here?” You brought up Pokémon Go. When you look at the commercials for augmented reality, it’s, “Help me fix a sink,” or it’s, “Let’s understand how to learn this,” and then you build it and it’s, “Let’s play Pokémon Go.” So I think it’s a real challenge.

It’s a lack of imagination, Jeremy.

Wozniak, he talks about when he and Jobs created the personal computer, how they got it wrong in terms of what they thought about use cases. Now, Facebook, Oculus, they thought games was gonna be the home run king. And in my opinion, games are probably better in the current state they are in VR, and you’re seeing at least slow progress there. So why they’re doing it, there’s this kind of sense where everybody feels there’s something here. It’s a transformational experiential thing, but no one’s really figured out why.

And what is the best explanation that you have when you think about it? And we’ll get to the empathy part. I agree with you, I think what you’re doing is much more important. What is the why that’s the best reason for a lot of these companies? Because entertainment companies have been dabbling, not as much as the tech companies obviously, because it’s a heavily tech product, essentially.

Training to me … What has been the one case that has persisted for the last three decades? And that’s the military using VR to train soldiers. And when you take that lens and say let’s use VR, not just to train soldiers, but let’s train athletes, and let’s train people who work at a big consumer … So I think training is a low-hanging fruit.

Mm-hmm. In terms of what it’s like, or be in situations, or put them in …

Last year I co-founded a company called Strivr, and Strivr began using VR to train quarterbacks, to teach quarterbacks how to look around, recognize a pattern. Last year we trained over 100,000 employees of Walmart. And what they were training are things like, look around at our safety violation, is our sharp knife out. Look around during holiday rush with everybody coming at you and practicing coping strategies in these really intense arousing conditions. And this was a use case of the many, many things that Walmart trains its employees. There’s literally a couple-hundred-page document, we chose four or five things out of there that actually we thought would be a good use case in VR.

How expensive was that? Because to create the VR is very … We just went through on empathy, which we’ll talk about in a little bit, but it’s very expensive to create each of these, correct? Or is the price coming down? Or …

In VR there’s three ways to do content. One we won’t talk about, because it’s not ripe yet, and that’s called lightfield capture. But putting that aside, you either get to build 3-D models using computer graphics, or you shoot in what’s called 360 video. And 360 video is cheap, easy. The problem is it’s not interactive, so you can’t grab an object. When you’re going to computer graphics, that’s where it gets more pricey and more expensive. And so depending on what your needs are, how interactive you need it to be, it’s gonna get more expensive.

Is that what’s stopping the development? Because you could do these all day long for companies, presumably.

So if you were to ask me six months ago what is blocking this from getting everywhere, six months ago I would’ve said position tracking, which is the way you measure how somebody moves physically so you can update the virtual scene. I think that that’s not been solved, but there’s been enough progress there that I don’t think that that’s a roadblock.

I do believe that content is the problem. There’s two roadblocks. The first is simply creating 3-D models that look really good and expensive, and we need more people to become great 3-D modelers. The second is narrative, and there’s two challenges here. One is in general, storytelling is really hard to do well. There’s a reason why Recode has succeeded compared to everyone else because you guys know how to do storytelling. The second is, the traditional model of storytelling doesn’t work in VR. We could talk about all the reasons …

Talk to me about a few.

The first is attention. When you have a listener to a podcast, you have her attention. There’s no other sounds going through those earphones. In VR, if you want somebody to look at a specific spot at a specific time, you can’t force that. So there can be some very important event going on. It could be a sidelong glance between two people. It can be something moving in your field of view, and the user can be looking at her feet or she can be looking up in the sky. And it’s hard to …

Get people to focus.

VR is anarchy. People can look anywhere whenever they want.

It’s really good.

Film is fascism. It’s great. The director, if she tells you where to look, when to look, and we have the attention.

Yeah, this is what you will be doing. Yeah, that’s right. They directed you. And in VR people have choices.

And there is a lot of smart people trying to come up with solutions to …

But you can just manipulate people. I’ve heard people are manipulable.

So you can actually force their field of view, but then you get motion sickness. So I’m a big wimp when it comes to motion sickness. If the virtual camera moves and I’m not moving with it, I get dizzy.

Right, right. All right. Talk about more problems. One is obviously these rooms where you wear the headsets, which are heavy and onerous. And I’ve had lots of arguments with people. Typically, I hate to say that it’s a man that’s like, “Oh, it’s fine.” I’m like, “It’s not.” It’s not something that average people are gonna want to do for very long, like you were talking about.

You could see you should do it in training, but it’s a singular experience. You’re alone, you feel isolated, you know you look stupid — Again, the headsets are still not ready for primetime. It feels like it could be lighter. And you see them in sci-fi in a way that … You’re used to them like that already and you wonder why you’re wearing this giant helmet, essentially. Where is that in the process, or is it just a matter of cost in development?

So when we talk about the downsides of VR, and you hinted at one of them, and the first thing from my mind is distraction, which is you’ve got this helmet on, you can’t see the walls, you can’t see if your cat comes in.

You’re worried about hitting …

You smash into things. I have literally saved lives in my lab from the head of the BBC, Lord Tony Hall when he did this flying demo, decided just to do a backflip.

Oh, dear.

And he’s in his ’70s, and I was right behind him, spotting him, and I caught him and he was just fine. But in general, you’re starting to see more of these accidents occur.

In the VR he was doing a backflip so he decided to physically do it?

No. In VR, he was taking off like Superman, and the way you do that is you put your hands over your head to take off like Superman would, and there’s some haptic feedback you get from the ground, and he just went with the motion and decided to jump backward.

Oh my God.

And we’re very careful in my lab, but Jeremy doesn’t come with Oculus and Jeremy doesn’t come with the HTC VIVE. And there’s some news out of Russia, which — how much we can trust in a Russian news agency is another story. About three weeks ago, a man while playing a video game in VR fell through a plate glass table and died.

Oh, wow.

And again, I can’t verify that.

Because they were moving? Because they were moving in the space.

It was a paragraph out of Newswire.

Right. But you could see that. You could see people moving. You don’t know where to go. You’re also nervous about what you’re gonna hit and the edges of where things are. So they have to be empty rooms. That’s why … Like you’re thinking, if this is gonna be commercial, you’d have to have like a room of empty … like a store of empty rooms where people …

With mattresses.


Once a week I catch somebody. So you did the demo upstairs, we’ll talk about that. What you didn’t do are the ones that are more perceptually deranged. Things like walking a plank, or we do things that are designed to just be fun. But by definition, VR is intense. We choose to do things that you wouldn’t do in the physical world. And safety is something that I [take seriously].

Interesting. And then, we talked just briefly about haptics and other things because that still is not there, and smells. Tell me about smells, because I get sight and sound. You kind of have that nailed, essentially. It’s just in more of development, and haptics is more difficult, where it pushes back at you, or you grab something and you actually feel when you’re grabbing.

Yeah. The best way to do haptics is what we call passive haptics, and that’s what the location-based VR companies are doing, like nomadic VR up in San Rafael, and that’s a fancy word. If there’s cobwebs in VR, they hang string. And if there’s a table in VR, they put a bar.

It’s like an old radio show.

Yeah, haunted house, radio, exactly. So to do haptic using haptic devices, we have one of the heroes here at Stanford, his name is Ken Salisbury, and another here, her name is Allison Okamura, that does medical haptics, and it’s really, really hard and expensive to do haptics well, so what the companies have chosen is a little bit of haptics, for example, vibration of the controllers, and that gets you a long way.

A little bit, but it’s not real.

It’s not the same type of feedback you get from a handshake, which is, if you take one hand and shake your other hand with it and press really hard, the amount of devices it would get to get the amount of force from all the different angles is bigger than a car.

Oh, impossible. Yeah. What has to happen? What’s the breakthrough that has to happen?

If I knew that, again, I’d be a wealthy and famous man.

Yeah, because that’s really … Feeling things is really …

I mean, the good news psychologically, we’ve done about seven or eight studies on social haptics, meaning when you feel touch from another person and psychologically, even a tiny bit of haptic feedback really goes a long way. So I do think it’s an important cue and we should include it, but it’s nowhere near as advanced as sight and sound.

Sight and sound, and then smell.

So smell, interesting …

Taste, eventually.

Taste, I’ve never seen any of your demos of taste yet. I don’t know how …

You should. Why not?


Disney does this. Whenever you’re watching one of their movies using their glasses, they always shoot water and stuff at you.

Oh, they do?

Yeah, and smells, like all of a sudden it’s that … cinnamon buns everywhere.

Yes. So it’s …

Yeah, I wanna hear about these doughnuts.

So smells, the problem of how to create a novel smell by combining a certain number of primitives of chemicals, that’s pretty easy to do. In other words, if you have a set number of chemicals in the lab, you can produce a lot of smells. Now, with sight and sound, when you see an image, the image refreshes, meaning 90 times a second, you replace what was there before or what was there disappears. With sound waves, the same thing happens.

With virtual smell, if there’s a stinky bird that flies by you, you beam some scent into the nose area. And the problem is that when that bird flies away then the scent lingers. In other words, you have to have fancy fan systems to clear the scent. And now you’re starting to see some demos that are getting better, but that’s been the holdup. It’s not creating scent, but clearing it when it should.

Oh, just like you’re at the ocean, you’d wanna smell the ocean and then you wouldn’t, right?

When it’s there, it is stunning. There’s some good demos up.

Doughnuts? What was the doughnut thing?

A postdoc of mine, his name is Benji Lee, we were just about to publish papers coming out in a few weeks that asked the question, “What contributes to feelings of hunger?” And imagine you have a doughnut in your hand, okay? And you’re bringing that doughnut to your mouth and you’re about to eat it. There’s three senses that are going into that. You see the doughnut in your hand, you feel the touch of your doughnut on your skin and you smell the doughnut as it gets close.

What we did in VR is we created an experiment where you could cross these conditions, where we could basically … you could either see the doughnut or not in your hand, you could feel a plastic doughnut in your hand or not, and we could put some doughnut smell in front of your nose, yes or no. And what we could do is we could parse the unique contribution of touch and scent to how much doughnuts you want to eat later on, to how many doughnuts you wanna eat later on.

And what we discovered in this paper — and it’s very preliminary, very preliminary small samples, so take it as the first step of many — the two competing hypotheses was that when you had this very realistic doughnut simulation that you’d wanna eat more, priming, or you wouldn’t wanna eat more, association. And after the study, we had a set number of doughnuts on the table and we allowed people to eat however many they wanted, and after touching and smelling the doughnut, they wanted to eat less.


So it acted as association.

They didn’t get to eat the doughnut, Jeremy.

Well, they could take as many as they wanted.

It’s eating the doughnut is the key part. I get the touching and smelling there, but eating the doughnut is what …

The big idea behind this work is imagine if a beautiful hamburger, looked like a hamburger, smelled like a hamburger, but it was really a vegan patty.

I see.

We just solved climate change. We’ve just solved the obesity epidemic. It’s just, can you give the experience of tasting amazing food …

And not really doing it.


Oh, that’s interesting. You could move that to a lot of things, a lot of facts and thoughts of things. There’s a lot of experiences where you wanna have the experience but not the side effects. All right. We’re gonna talk about that when we get back. We’re here with Jeremy Bailenson. He’s the founder of the Virtual Human Interaction Lab at Stanford University where we’re taping this podcast, or digitally taping at least, and he’s a professor in Stanford’s Communications Department. He’s the author of a new book, “Experience on Demand: What Virtual Reality Is, How It Works, and What It Can Do.” When we get back, we’re gonna talk about what it could do in the future.


We’re here with Jeremy Bailenson, a professor at Stanford who’s an expert in virtual reality, but he’s doing some really much more interesting things with this than playing a stupid game or touching a whale or something like that. Not that I mind either of those things.

But some of the stuff you just showed me was empathy and we’ve talked about that. We were on a panel recently discussing that. One of the things I agree with you, training is a great way … and the military has been doing this forever, correct? Putting people in situations, it’s essentially role-playing but with using digital tools. Talk about the empathy part. You’re debuting this … Talk about this project.

So the recent project I’ll talk about in a second, it’s called “1000 Cut Journey.” But as a lab, we’ve been studying VR empathy since 2003. And when I arrived at Stanford, we had a small grant from the company Cisco, and a brilliant woman named Marcia Sitosky, she said, “Jeremy, can you use VR to do diversity training? The way we do it now it’s informational, but it’s not powerful.”

And so we developed what you just did called the virtual mirror, which is you walk up to a mirror, you see your reflection, and what the neuroscientists call, body transfer occurs. Meaning, as you move your physical body, you see your virtual body moving synchronously at the same time. After about four minutes, the brain expands its schema to include that virtual body. So our big idea is you walk up to a mirror, you see yourself as someone else.

A woman or not.

I can change my change my gender, my age, my race. I can become a different species. And then you experience some trauma while wearing the body of another. You walk a mile in her shoes. And since 2003, we’ve been publishing studies that show how it can affect ageism, racism, discrimination against the disabled, pretty much any domain in which an experience of walking a mile in someone else’s shoes would help.

They truly feel that, if they truly feel what the person feels.

It’s another cue that they get that they wouldn’t have otherwise. We do tend to look at emotions, but as a lab, what sets us apart from a lot of people that do this work or that think about this is that we look at behavioral change, because with issues of race and gender, all of us say we wanna be better and most of us wanna be better, but it’s actually hard to change your behavior. And so we tend to look at outcome measures.

So pertinent now for sure. One of the things you were talking about is this idea of implicit racism. I think it’s explicit and just people don’t say it. That’s different than implicit. They just think they’re now allowed to say it, or they’re able to say it because we have a president who says it out loud. But I don’t think it went away. Even Martin Luther King was writing about that. It’s like we’re just unveiling what’s already there.

So this is an idea I got. I became a young black kid, a boy, and I got 1000 cuts. You were using the more minor things, not the more, the real heavy-duty race. It was you getting picked on unnecessarily, having people make remarks about being black casually, kids doing it to each other, the teacher digging on you for doing the same thing a white kid did, that kind of stuff.

So this is a collaboration with Courtney Cogburn. She’s a professor at Columbia University and she studies implicit racial bias. That’s what she does academically. And she and I worked together for over a year just on the storyboard, working with her team members on things that have happened to them in their lives, watching documentaries and just talking to lots of people. And what we came up with, it’s about a 10-minute journey where it was important to Courtney that the idea is these types of events happen to you every day, all throughout your life. It doesn’t happen once.

Microaggressions, I think they’re called.

These microaggressions, they happen when you’re a kid, when you’re a teenager, when you’re an adult. And in this journey, you’re wearing the body of a black person, and you start by feeling discrimination in a school room when you are in third grade, and then you are a teenager, where you have an interaction with the police that’s very different from your white friends, and then you are an adult who is going on a job interview and you’re seeing the same types of events. And so it’s about a 10-minute experience where it’s 1000 cuts, showing that these things happen all the time.

And your result is you’re trying to get people to be more empathetic. People who you would say, if you were doing that, stopping, you’d put a white police officer or any police officer in that setting to see what it’s like to be on the other side of it.

We haven’t collected data with this yet because it’s brand new, but let me tell you about the study we’re just about to publish. And this is about becoming homeless. It’s a 10-minute journey where you start out by having a home and you slowly, over time, events happen to you, you lose your job, you get evicted, you can’t afford a place to live. You try to sleep in your car, the cops arrest you from there.

And this is one we’ve studied extensively, so premiered at the Tribeca Film Festival in 2016. And since then, we’ve run thousands of people through it. And we’ve also looked, not just right afterwards but eight weeks later, and what we’re asking you to do there is to sign a petition, physically sign a petition that says, “I am willing to have my personal taxes increased to support affordable housing measures.”

And so we’re asking people to literally sign a petition. And what we’re looking at is VR compared to control conditions. Things like traditional role-playing …

And you talk about or else you try to like stand on the street and explain why you should give something to something.

We have an informational condition as well. We have lots of control conditions. We work with my colleague at Stanford, his name is Jamil Zaki, and he’s an expert in empathy who studies the neuroscience of empathy, and he’s also not a VR evangelist. So it’s a nice collaboration because he comes at it not believing VR is gonna be better than traditional role-playing. So it’s good to have that check in balance.

Yeah. And so, one of the things I have … Well, I think I brought it up in the panel, is that you can walk someone through what it’s like to get arrested as a black kid, say, in Baltimore. When you could curb a little bit of the terror around it, you could feel nervous in a situation you’ve never been in, but it’s a lifetime of behavior.

So I think, in this #MeToo movement, a lot of women were like, “Yeah, sure. People do that. It happens all the time.” Like they’ve got to become inured to it and aware of it in the way that men aren’t, for example. And I think putting them through one bad day is not gonna … like really, a day that goes askew, it’s not gonna make them understand quite as much. I don’t know. I feel like it’s easy to forget that kind of thing.

This is definitely not a magic trick that’s gonna solve everything. It’s another tool that we can use. And where I think you see the most benefit of VR right now is in motivation. So in 2015 at the Tribeca Film Festival, we had a seven-minute journey, it was called the ocean acidification experience. And this was, you learned about climate change, how it affects the ocean. At Tribeca, they had this VR arcade open for about 10 hours a day for seven days straight. I had a line of sometimes 100 adults deep, waiting in line for sometimes up to an hour to learn about chemistry. And because VR is experiential, it’s novel and it’s fun, people are motivated to do it better. So leveraging this kind of phase where it’s novel, it’s a way to get people to actually experience something …

Pay attention. You could see that. And where do you see most of the applications besides commercials, schools, training? Why go to school, Jeremy, at all? Why go to Stanford?

Well, we went down this road with MOOCs, these videotapes of professors. And so I actually work with a provost at Stanford to rethink our online education policy, and where I come in is field trips. I don’t want to replace the classroom. However, if you’re gonna go to learn about the coral reefs, why not swim around them? If you’re gonna learn about the statue of David, why looking at a 2-D picture? I mean, there seems to be some low-hanging fruits where VR actually will help. I don’t think we should blindly throw it at everything, but in those rare cases where this lesson helps, and then the cool thing about a VR simulation is, just like the digital song, once you build one, every single person on the planet will have access to it, assuming they can get the [hardware].

Right, presumably. And so let’s finish up talking about the hardware and how … Again, it’s the purview, I’m sorry, of white guys, but you can see there, I think Mark Zuckerberg bought Oculus because he thought it was cool and he had the billions to do so. When does it become available to everybody? Because obviously cellphones were the purview of the rich and then everybody has one, and these things have a way of iterating through the society, but this is a more expensive and heavy-duty technical challenge.

So I agree with the heavy-duty technical challenge. The expense I’m not agreeing with because it costs the same as most of these video game platforms, and these have … they’re everywhere. People have the money to buy the hardware. They do because they’re buying those video games. The reason they’re not is twofold. One, as you pointed out, to get these things working correctly, if there’s a driver update or if some of the camera …

There’s always a glitch. I think every VR thing … I mean, like our little handle.

Yeah, yeah, yeah. And so, because of that, it’s not there yet. The second is content. Content right now on the web is awesome. Content … Video games as a commercial success are fantastic. And people have not come up with the, whether it’s a game or a show. They haven’t figured out how to make it worth all that drama.

Why is that? Why does it take a whole new bunch of inventing? I think it does. I think that’s the problem, is that you have technical people here in Silicon Valley and then you have Hollywood people who tell, like fascism, tell stories in a certain way. It’s a whole new genre of creative people.

I agree completely. And the one thing I will say is that, if you look at the history of film, it took us a long time to get to where we are today. So on the one hand, I’m completely agreeing that we need to break the template of, “Let’s have the film person come in and bring that over.” On the other hand …

There’s a lot of film people who are interested.

Of course.

Jon Favreau, director of … famous director, and he’s all in with that.

There’s a number of folks who are in. And if you think of the two industries that are grasping at VR, it’s journalism and it’s film. And why are they doing that? Because …

We have to have new ways of getting audiences.

That’s right. The location-based VR companies, and it’s just like an arcade. They’ve got super-high-end, good tracking and a lot of these passive haptics and it feels good, like a haunted house type. It turns out that a year or two ago, how, where these things were gonna be, but now there are these places that no one really goes to anymore, they’re called movie theaters and you can just serve them right into there.

Yeah, that’s true. That’s interesting. And getting back to the empathy thing. I do think that’s the most promising, and experiential things, like I’d love to go to Bilbao, but I don’t really wanna go to Spain. You know what I mean? I’d love to walk through it, that kind of stuff, and really experience it in a different way than just looking at 2-D pictures, or hear a story in a different way that scares you. Like I could see these horror movies being really terrifying if you did them right.

But the issues around empathy and feeling, walking a mile in other people’s shoes, I mean, you don’t expect to like change people’s … Would you put this on Donald Trump’s head and suddenly he wouldn’t insult Haitians or what? Like what’s the goal?

In the book, in chapter three, what I do is I go through, very carefully, every study that I know of that’s looked at VR and empathy, and I really take an honest approach, which is this is not gonna solve …

And there’s not been that many studies.

There’s not been that many studies. I mean, there’s a great academic named Mel Slater in Barcelona, and then there’s my group that had been doing this. And what we’re showing is that in general it is better than controlled conditions, but it doesn’t work every time and it also depends on the content.

The question I get all the time is, “Does VR change empathy?” And my answer is, “Well, you wouldn’t say that about film or the written word. It depends on what you do.” And I’m just a hack when it comes to making VR content, right? What do I know about creating experiences? My strength is studying how these things work, and I’ve been put in the position because there’s no content out there to create these experiences like becoming homeless, and then to help Courtney work on “1000 Cut Journey.” And when smarter people than me are making the content, I think it’ll be better. But in general, to sum up the empathy research, it does tend to work better than role-playing or watching a video.

Right. I think you have to inject people with something, like drugs or something else, or some digital thing in your brain, like putting a chip in there that changes things. I don’t know.

It’s certainly not gonna help you with your use case, your oval office use case. I don’t think it can …

I think we’re gonna give up on him on that one. And then lastly, manipulations, speaking of Donald Trump, lying, people feeling tricked. You could do that. This is like … Just right now, the internet is getting in trouble. All the tech people are, for the results of their inventions maybe aren’t as benign as we all thought, about Russia and everything. It’s like every day, it’s another fresh horror that the tech … the result of their inventions. This seems open to so much horrible manipulation that … You know what I mean? Like the road it goes down.

In VR, when you’re experiencing spherical video compared to computer graphics, I think it will be different because of the expectations. With computer graphics, very few people have expectations of truth. When it comes to spherical video, that’s where we’re in this danger land because we think it’s gonna be real, but maybe it’s not. So VR suffers the same problem as all media, it can be manipulated.

Where VR comes in differently is that it’s so intense and it feels real. So the concern is not can it be manipulated more? Because the answer is yes, all media gets manipulated. The worry is that, when it’s manipulated that it creates this muscle memory for an experience that has a different result than simply reading something.

And also just on the constituents, so much attention around attention. All right, it’s stealing of attention, essentially, just recently, for example. We don’t like reality reality. Reality reality isn’t as nice. And that’s what “Ready Player One” is about to come out talking about that. They live in these horrible places and so they go into the whatever the place they go to experience a better life.

The Oasis.

The Oasis. That’s right.

So yes, in my lab we got a 20-minute rule and you’re not supposed to be in there for more than that.

Yeah, because that’s gonna work with normal people. They don’t eat too much fried food.

There’s a pair of German psychologists who published a paper in 2014 where one watched his buddy while he stayed in VR for 24 hours and took some measurements.

Oh, no. What happened? It’s like the guy who ate all those McDonald’s hamburgers.


Got fat and sick.

By hour 17, he was reporting not being able to discern whether events were happening in VR and outside.

Oh, dear.

So I am advocating on this show today that we should not be spending all day in VR.

Said the VR researcher.

I don’t play video games, I don’t have a Facebook account. I mean, I go outside for a living.

Yeah, you like reality reality.

I do, I do. But in the same light, we shouldn’t be … If five years from now, listeners, you are putting on VR to read your email, then I’ve done something wrong as an advocate. I think we should reserve VR …

No, Jeremy. There’s gonna be a chip in your eye that’s gonna be VR. Don’t you understand?

I get pitches to …

Oh, it’s going there.

I get those pitches quite often.

Not today, we’ll be dead, but that’s where it’s going, like enhanced people.

So my advice is to go outside. Save VR for the things that make it special and we don’t need to be reading our email on VR.

Well, that was a great way to end. We’re talking to Jeremy Bailenson. He runs the Virtual Human Interaction Lab at Stanford. He’s a professor here, and he has a new book out which you should buy, “Experience on Demand: What Virtual Reality Is, How It Works, and What It Can Do.” There’s a lot of hype around virtual reality and this is like a nice, clear thing of where we’re going and where we are. So it’s not hyped or undercut. Anyway, Jeremy, it was great talking to you. Thank you for coming on the show.

Thank you so much.

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