Recode Daily: Concerned about cryptocurrency, Capitol Hill also starts to worry about video-manipulation tech

Plus, on the job with Russian fake-news trolls, Sony enters the ride-hailing race, and “Black Panther” breaks records and barriers

Spurred by the global investment craze over bitcoin and other cryptocurrencies, bipartisan momentum is growing on Capitol Hill for stricter federal oversight on the emerging asset class. Study up on your crypto cocktail chatter with this in-case-you-missed-it deep dive, and this comprehensive reading list curated by investor Chris Dixon and his colleagues at Andreessen Horowitz. [David Morgan / Reuters]

U.S. lawmakers are also starting to sound the alarm on video-manipulation technology, which they fear could set off a new wave of fake news driven by doctored audio or video. Researchers at Stanford and the University of Washington, for example, are developing technology that allows people to alter footage of world leaders like Russian President Vladimir Putin and former U.S. President Barack Obama, making them appear to say and do things they’ve never actually done. [Ali Breland / The Hill]

Facebook executive Rob Goldman apologized to his coworkers for tweets over the weekend that attempted to explain more about how Russians used Facebook to spread misinformation — but were hijacked by Donald Trump to attack the media. “The tweets were my own personal view and not Facebook’s,” Goldman wrote to his colleagues. “I conveyed my view poorly.” [Nicholas Thompson / Wired]

Here’s how former Russian fake-news-factory trolls described their often-bizarre work lives at the Internet Research Agency, which last Friday was indicted over meddling in the 2016 U.S. presidential election. The 12-hour writing shifts at the Moscow-based cube farm involved creating thousands of fake social media accounts and generating and sharing culturally dissonant articles and tweets in English. [Neil MacFarquhar / The New York Times]

Japanese consumer electronics giant Sony is entering the ride-hailing arena, developing a taxi-hailing system that uses artificial intelligence to predict demand. Five Tokyo-based taxi operators in Japan are partnering with Sony on the joint venture. Uber and China’s Didi Chuxing are also focusing on taxi-centered systems because of Japan’s in-principle ban on the use of privately owned vehicles in ride-hailing services. [Nikkei Asian Review]

Just a month after Facebook’s recent changes to its News Feed algorithm, publishers including The New York Times and BuzzFeed are already reporting declining traffic from Facebook of up to 14 percent. The declines are not a surprise — Facebook CEO Mark Zuckerberg himself warned that news as a percentage of News Feed content would drop from 5 percent to 4 percent, implying that publishers can broadly expect a 20 percent drop. [Lucia Moses / Digiday]


Recode Presents …

Do you have questions about tech addiction? We’re talking to “How to Break Up With Your Phone” author Catherine Price on this week’s episode of Too Embarrassed to Ask. Send us your questions for Catherine by emailing TooEmbarrassed@recode.net.


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The Amazon Prime credit card will start giving 5 percent back on Whole Foods purchases.

And non-Prime members with the regular Amazon Rewards Visa card will earn 3 percent back.

Nike’s latest Air Jordan sneaker “drop” showcased the potential of Snapchat commerce.

Shopify and Darkstore helped bring the in-app shopping experience to life.

Why magazine editor Janice Min passed on running the Los Angeles Times newsroom.

On the latest episode of Recode Media with Peter Kafka, catch the full interview with Min, part owner of the Hollywood Reporter, from the recent Code Media conference.

This is cool

“Black Panther” had such a big four-day opening weekend that the latest Marvel movie is on track to make more money than “Justice League,” “Jurassic World” and “The Avengers.” Groundbreaking as a comic book movie with all black leads, “Black Panther” has been widely praised for its diverse casting, fashion and soundtrack, but it also excelled on another important level — black meme culture. Michelle Obama is into it so much that she tweeted about it; some people went to extremes to try to get a ticket.


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?

Yeah.

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.

Right.

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.

Right.

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?”

Yeah.

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.

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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.

Yeah.

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?

Yeah.

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.

Oh.

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.

Yeah.

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.

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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.

Yeah.

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.


Recode – All

Recode Daily: Trump attacked everyone — except Russia — in his weekend Twitter tirade

Plus, when Facebook met Snapchat, aspiring tech hubs don’t want to be “the next Silicon Valley,” and the tyranny of convenience.

President Donald Trump used skeptical remarks by Facebook ads executive Rob Goldman as ammunition in a Saturday Twitter tirade, insisting that Russia didn’t influence the 2016 U.S. presidential election. On Friday, a federal grand jury indicted 13 Russian nationals and three Russian entities, alleging illegal interference in the elections in support of Donald Trump. But Facebook, Twitter and other social media companies did exactly what they tell marketers they can do — they let Russia’s troll factory more efficiently deliver disruptive messages to large groups of targeted people than if they had bought TV ads or any other traditional ad campaign. [Peter Kafka / Recode]

A new book about Snapchat contains a juicy story about how Facebook’s earliest efforts to kill the rival communications app backfired — and may have inadvertently saved Snapchat. In “How to Turn Down a Billion Dollars: The Snapchat Story,” former TechCrunch writer Billy Gallagher says Facebook CEO Mark Zuckerberg met in 2012 with Snap CEO Evan Spiegel and expressed interest in buying the one-year-old Snapchat; when Spiegel declined, Zuckerberg launched a wannabe Snapchat-killer clone called Poke, which was intended to kill Snapchat for good. Meanwhile, Spiegel sold about $ 50 million worth of Snap stock last week, his first personal stock sale since the company went public last March. [Kurt Wagner / Recode]

Although they may nickname themselves Silicon Beach and Silicon Prairie, Desert, Hills and so on, many aspiring U.S. tech hub cities don’t aspire to be “the next Silicon Valley.” And as the tech backlash builds, the leaders of smaller tech scenes are eager to foster the area’s good aspects— jobs and innovation — while avoiding any association with the bad. Toronto is one noteworthy tech guinea pig — it turned over a 12-acre chunk of land to Google sister company Sidewalk Toronto to create a “smart” neighborhood built from the internet up. [Erin Griffith / Wired]

New data from Re:Create shows how much the internet has enabled a new creative economy. Findings show that nearly 15 million people used the Amazon Publishing, eBay, Etsy, Instagram, Shapeways, Tumblr, Twitch, WordPress and YouTube platforms to earn approximately $ 6 billion in 2016. And that’s not even counting key indie platforms like Kickstarter, Patreon, Indiegogo, Wattpad, Bandcamp, Apple, Spotify and others; in 2016 alone, Kickstarter had close to $ 600 million in pledges. [Mike Masnick / Techdirt]

Top stories from Recode

J.Crew has hired the Starbucks executive who transformed the coffee chain into a tech innovator.

Adam Brotman has joined the apparel retailer as president and chief experience officer.

Many ICOs are “complete scams,” says Benchmark’s Sarah Tavel.

On the latest episode of Recode Decode, Tavel says she believes that cryptocurrencies will be a big deal going forward.

How can I be less addicted to tech?

Executives, investors and rapper Chamillionaire are among the Code Media attendees who offered suggestions and solutions on a special episode of Too Embarrassed to Ask.

This is cool

The tyranny of convenience.


Recode – All

Full transcript: MoviePass CEO Mitch Lowe on Recode Media

The podcast received a request to interview the CEO and have him explain his “weird business model,” and it delivered.

On this episode of Recode Media with Peter Kafka, MoviePass CEO Mitch Lowe talks about how he’s trying to make a profitable business out of charging $ 10/month for nearly unlimited visits to the movie theater.

You can read some of the highlights from the interview here, or listen to it in full in the audio player above. Below, we’ve provided a lightly edited complete transcript of their conversations.

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


Peter Kafka: This is Recode Media with Peter Kafka. That’s me. I am part of the Vox Media podcast network. I’m here at Vox Media headquarters in New York City. In a couple days, I’ll be in Huntington Beach for the Code Media conference February 12th and 13th. You probably bought your ticket. If you haven’t bought your ticket, it may too late but you can still check by going to Recode.net. It’s going to be a great event. If you are not there in person, we will tell you about it later.

That’s like this podcast, we move on into the future. Today’s the present. I am here in New York City with Mitch Lowe, CEO of MoviePass. Before Mitch introduces himself, I’m going to share a reader email from Colin. I don’t know if Colin wanted us to use his last name so we’ll go with “Colin” for now. He has a guest request. “I’d love to hear you talk with Mitch Lowe, the MoviePass CEO. That’s such a weird business that I don’t understand and you’re good at probing people who have weird business models.” Mitch Lowe, welcome to the show. Let’s talk about your weird business model.

Mitch Lowe: Thank you. Yeah. It’s actually pretty simple. I don’t find it weird.

People are fascinated with your company, by the way, like Colin.

I love movies. I kind of grew up as a latchkey kid. My brother and I brought our first Betamax player. It was so heavy like it took two of us to carry it. For me, what’s really, really exciting is how people are actually going back to the movie theater when many people said it was on the way out.

Describe what MoviePass is. You have a million and a half subscribers so a million and a half people know what it is. For those who haven’t got a subscription, it’s 10 bucks a month or 90 bucks a year.

It’s $ 9.99 a month. From time to time, we’ll run specials for annual programs. Essentially, it’s like Netflix for the movie theater. You pay one flat fee, that’s 9.99 and you can go to about 91 percent of the movie theaters across the country and go to essentially a movie a day.

You can see up to 30-some, 28, 29, 31 movies a month.

Yeah, exactly.

One movie a day for 10 bucks per month.

That’s right. I know it seems like too good to be true, but the way it works, you download our app onto your phone, so you do need a smartphone. You do need a unique email address per account.

If you’re listening to this podcast, you have these things.

Yes. Then we send you a MasterCard debit card in the mail with your name on it. You decide you want to go to a movie. You find the movie, you find the theater, you find the showtime you want to go to. Then when you get within a hundred yards of the movie theater, you check in and magically that credit card works at that theater for about 30 minutes.

And you buy a ticket there.

You just walk up and say, “I want the 7:00 o’clock showing to ‘Lady Bird.’” They print out a ticket and you walk in. The beauty of it is, we’re paying the bill on that credit card. That’s how we pay.

This is a company that I’ve heard about for years. I would get an email from some PR person telling me about a company called MoviePass for five or six years and I’ve looked at it and ignored it because it didn’t make much sense. It was 40 bucks a month. It was sort of aimed at indie film people. You are not the founder of the company, you are the CEO. We can talk about the history of it, but you came in the last year or so, right?

Yeah. I can in about a year and a half ago. You’re right. The product had been focused on the heavy moviegoer. About 11 percent of people in the country go to 18 films a year and that’s how it was priced.

This was aimed at them.

Yeah.

You’re saying there’s another group of people who go to movies not that often.

Right.

We think it’s a great product for them. To be clear, in New York City, every movie ticket price is, I don’t know, 15 bucks.

Yeah. It’s crazy.

It’s crazily expensive.

Yeah. Just one movie and you’ve saved money.

Right. That’s the too good to be true part. Even the rest of the country, an average ticket is what, nine bucks?

No, the average price across the country is $ 8.73.

Almost $ 9.

So almost $ 9.

So there, if you go to more than one movie a month, you’re ahead of the game. I can see why consumers would like this. You guys launched this version of it last summer. It’s taken off really quickly, because again, it’s basically going to movies for free. Sounds too good to be true and there’s some caveats now that we can talk about.

Yeah.

This does not sound like a great business model for you guys. It seems like this is like a kozmo.com business plan where you lose money every time a consumer uses your service.

Right, right.

So?

There are actually dozens and dozens of businesses like ours that invest in building a large subscriber base. Whether it’s Netflix that buys $ 8 billion of content a year — and believe me, they have to borrow the money to do it — or companies like Facebook where it’s free but they’re monetizing all the advertising and all the data about you.

Right.

That’s exactly what we are.

There’s lots of money-losing internet companies and other startups, right?

Yeah.

By the way, you’re an early Netflix employee that worked at Redbox. I want to talk about those things as well.

Yeah.

Those companies, the theory is, you invest in capital, you invest in marketing. At some point, the business starts spinning, has enough momentum, enough pricing power that as you add users, you’re not adding cost and now you’re magically making billions of dollars.

Yeah.

You just walk through a system where every time someone uses your business, you lose money.

Well, I think everybody believes that all of our subscribers are going to gobs and gobs of movie, which is really what they do do in the first couple months they join. I kind of like … In our customers’ behavior, there’s two trends. One of them is like if you went to a buffet breakfast every single morning for two or three weeks, the first couple days …

You’re getting your waffles and the sausage.

You’re piling up. By the third or fourth day, you’re kind of down to a normal usage. That’s exactly how our customers, they start out, they go to a bunch of movies. They slowly edge down.

Here’s the trick: 89 percent of American moviegoers only go to four or five movies a year. When they join MoviePass, they double their consumption and go to about 10 a year. That’s a little bit less than one a month. They balance out the 11 percent of the population that go 18 times before joining MoviePass and then after go three times a month. It works out. Over time, it actually works out to be about one movie per month per subscriber. Now, some people do go to 10, 15. We even have one guy who on this 40th birthday challenged himself to go to 40 movies in 40 days. We do have people with a fair amount of time on their hands.

Who won that challenge?

I don’t think he’s gotten to the 40th day yet so he’s still working on it.

I don’t know 40 movies. So it’s a little bit of the gym model where you’re not expecting me to show up as often as I pay for the service.

Well, yeah. The gym model, the only reason I don’t like that comparison is the gym model is you join in January, you pay for a year, and then by February, you’re not going at all so you’re not getting any value.

And by the way, you finance this thing and they really don’t expect you to show up at all. You’ve modeled it out so your business works if I come once a month.

Yeah. Our goal is to get to breakeven with the subscription and the cost of goods. Then we have all these different ways that we make your life better as a customer. We know how to market films to you. You know, the studios are incredibly inefficient the way they market small films. Over the last three weeks, we bought one in every 19 movie tickets in the country, but when we promote a film, we’re buying one in 10, so we’re lifting. These are for subjective $ 50 million box office films. The studios are paying us to be a more efficient marketer of films.

What’s an example of a movie that the studios have paid you to promote?

I could list a bunch of them. “Maze Runner” is one over the last couple of weeks. “Lady Bird,” “I, Tonya,” almost every film …

These are real movies produced by real studios and they’re saying, “Hey, MoviePass, we’d like you to promote this to our customers.” When you want to promote “Lady Bird” to me, are you giving me a discount to go or are you saying, “Here’s a movie you might like”?

Remember, it’s free to our customers. That’s why we’re not marketing …

You’re consenting me in some way to go see “Lady Bird” or you’re saying, “Hey, check it out, Greta Gerwig.”

Our subscribers are looking for movies to go to and they’re very open to suggestions. When we say, “We’ll send out an email. We’ll highlight the title in our app so it’s at the top of our app. We’ll promote it in social media,” and our subscribers will go, “You know, I was really kind of thinking of going to that movie, but in the past I would’ve put it off and waited for it to come out on Netflix or HBO or Hulu” or something like that. Now because there’s no incremental cost to them, they take our suggestions and go to the movies. We go from 3 percent to 5 percent market share to over 10 percent.

It’s just you saying, “Check it out.”

Yeah.

You’re not rewarding me for going. You’re not giving free popcorn.

No. There are things that we are doing that are kind of separate from that. Those are private screenings and advanced screenings for our subscribers, but that’s a little bit of a difference.

You launched last summer, you’re at a million and a half subs. Now are you where you thought you would be nine months into it, six months into it?

Way beyond. When we sold half of the company to a data analytics company, in the contract we put in a clause where we would get a $ 2 million bonus if we hit 150,000 subscribers in 18 months. I thought, “Okay, that gives me about three or four months of padding.” I thought maybe it’d take us a year. We got there in two days. This is way beyond my expectations.

Again, especially if you’re in New York or LA, this just seems like obviously this would work for as long as it’s going to work because it is too good to be true, but if you’re going to basically let me see movies for free, of course I’m going to do it.

It’s a no-brainer.

We were talking before. I said, “This is like Groupon.”

Yeah.

Where of course you’re going to go take the two-for-one deal, for one. That also doesn’t seem sustainable.

Yeah. Well, if you think that there’s not enough money to support the growth, then yes, you would think so, but most people didn’t think we’d make it this far. Remember, if we’re buying one in every 19 movie tickets and it’s an $ 11 billion business, you can kind of calculate that’s a lot of money. We have been incredibly well funded. We have a backer that is prepared to go all the way to get us to cash-flow positive, which isn’t all that far in the future.

How big do you need to be for this to be a viable business?

I think by the end of this year, we’ll be big enough to where there’s … It’s really about getting enough customers who are beyond their fourth or fifth month and getting more subscribers in the lower-cost markets, in the Omahas and Kansas Citys of the world. Remember, to date, we’ve never done advertising. In the next couple weeks, we’ll begin advertising.

That million and a half subscribers, that’s just people telling each other on Facebook or wherever, “Hey, there’s deals. It sounds unbelievable.”

Yeah, and it’s way beyond a million and a half. Yes. We’ve spent 11,000 here and there on social media, on Facebook, various tests like that, but no advertising, just because.

Do you want to share an updated subscriber for well beyond a million and a half?

No. I think we’ll do that soon.

Keep that for the press release. We’ve gone through some of the big questions I’ve got about your business, like, “Is it a real business?”

Right.

Yes. “Are you making money?” No.

No.

Other big question, what do the theaters chains think about this? It sounds like there’s two groups. There’s the small indie movie theaters and there’s three big theater chains and they have very different views about you.

Yeah. That’s absolutely true. I like to look at it as there’s three groups. There is the top three like you mentioned. There’s a mid-tier group that is Marcus Theaters with 800 screens, and a bunch of 50-theater chains.

The big theaters, AMC, Cinemark.

And Regal.

Regal.

Then there’s a bunch of midsized chains and then there’s all these independents. The independents and the midsized chains understand that we, in some ways, are one of the salvations for the industry.

Overall, movie attendance drops year after year. Sometimes the box office goes up because the ticket prices are going up, but fewer people go to the movies each year, generally trend line for reasons that if you’ve listened to this podcast, you have a sense of.

Yeah. There’s been a single-digit percentage decline. There’s been a year or two over the last 10 years where there’s been a slight uptick in ticket sales.

Last year was 6 percent, I think.

Well, yeah. Let’s say it’s flat to slight declining year over year. The theaters, their solution is to continue to slightly increase the price 25 cents a year, 40 cents a year. Over the last 18 years, the prices have almost double. That’s a dead end. The independents who are today fighting for market share, they pretty much have the same product as the big guys today. They see us as a great way to help them compete.

You are pitching yourselves to them as marketing partners?

Because when someone joins MoviePass, they use that doubling of their frequency to see the smaller films. That’s good for art house theaters, that’s good for independent theaters.

I’m going to go see “Star Wars” regardless. If I’ve got MoviePass, I’m going to find time for “Lady Bird.”

Yeah. We don’t change your behavior for Marvel films or “Star Wars” or any of those things. We get you to see “Lady Bird” where you would’ve put off seeing it until it came out on one of the streaming services. The independents and the midsize theaters are very supportive and want to work with us.

Do you do rev share deals with them, get a cut of the popcorn?

Yeah. We do a whole bunch of different things, but the primary is kind of a lower price. It’s pretty much like the bulk sales they do. If you come up to any theater and you say, “I want 10 tickets,” they’ll typically give you 20 percent or 25 percent discount. Even … You go to Costco, you can buy booklets of AMC tickets and Cinemark, etc., and get the tickets for 25 percent off.

So local chain possibility that you’re not paying full for that ticket.

That’s right. For our partner theaters — and it’s a growing list of theaters — we are getting some form of a discount that varies. It could be based on the time of the day or the day of the week. They want to incentivize us to drive traffic to their empty seat times.

I’m sure you’re going to AMC or Cinemark or Regal saying, “Same thing, we’re going to help you bring people in. They’re going to see the Marvel movies and we can fill seats the rest of the time.” They have a resounding, “No.”

Yeah. If you think back when Orbitz and Travelocity, Expedia were founded, the airlines and the hotels wished they didn’t exist. They want that one-to-one relationship with customers. That’s exactly the way the big theaters look at us. They go, “Geez, we want that one-to-one relationship. We don’t want a middleman.”

You even have it now. It’s like you’re coming between me and my Cinemark subscription, right? I just go to a random theater. I don’t care what the theater is.

That’s exactly why we succeed and why subscribers really like the idea of a service where I can see what’s going on at Cinemark, I can see what’s going on at AMC or an independent, and use any of them. I’m in control and it’s me that decides where I go.

AMC, Cinemark, Regal can’t block you from doing what you’re doing because you’re paying them cash for a ticket, right, and then basically reselling it to me, effectively?

Yeah. We’re paying them full price. They’re actually thrilled. They went from being angry and wanting to stop us, at least AMC. The day we launched, they said we were a fringe player and that we would never succeed. The subtext to that is, “Dear customer, you should continue to pay higher prices because these guys over here are trying to do an unsustainable model.”

I can see why they would not want you to be inserted between them and their customer. I’m sure that they all have plans to launch their own subscription service, but again, I can’t see those working for the same reason I subscribe to Spotify and not Universal Music group service.

Exactly.

I don’t care what the label is. I want the music.

Yeah.

They’re not your pals. You guys are still beefing. There was something happening in the last couple weeks where you pulled out of some of the more trafficked AMC theaters?

Well, not necessarily the more trafficked. We’re in roughly 660 AMCs.

You pulled out of 10.

Yeah. We pulled out of 10, a small fraction of them. What we started doing is kind of assessing where we spend our money. We bought a million tickets in the last 30 days at AMC theaters across the country. That’s like 10, $ 11 million we paid them for tickets. Our subscribers say that they spent on average $ 12 every time they went to an AMC, which is more than double their average of $ 4.88. Another $ 12 million in concessions that are 85 percent margin.

Just to be clear — because there was some confusion about who did what — but this is you actively saying, “We’re not going to support these 10 theaters,” and these aren’t 10 theaters in Omaha, right?

No. They’re all over the country, but there’s some in New York and L.A. and Chicago.

Big ones, right?

Yeah. AMC tends to have bigger theaters.

Right. They’re in Times Square in New York, Union Square. First of all, to be clear, is the idea here that you’re going to show AMC how much pricing power you have and what they’re missing out?

Yeah. I think the idea was that we want to work with them. Our customers want to go to their locations. What we wanted to understand is, how can we still give a great opportunity or accessibility to our subscribers and, at the time, demonstrate to AMC that really they should be our partner. We identified locations, there’s many more than these 10, that have plenty of competition around them. Those 10 were selected primarily because they had a Regal or a Cinemark or independents about.

You picked 10 in big high-traffic areas where you could say, “Sorry, you can’t go to the Times …” What’s one of the ones in New York that you can’t go to?

I think 42nd.

“You can’t go see ‘Paddington.’” I tried to buy a ticket to go see “Paddington 2,” which I’ve already paid for. It’s not bad. At Times Square and you send them the message saying, “Sorry, doesn’t work there, but you can go down the street”?

Yeah. We have not sent messages to our subscribers but our subscribers can see the theaters that are available.

That theater doesn’t show up.

Yeah. We launched that, I believe, on a Thursday. Over the weekend, we looked to see, did those customers who typically would go to AMC, did they find another theater to go to? Almost every one of them found another theater to watch the movie.

This is a way for a small startup that has very little power to sort of leverage whatever power you do have and make a point.

Well, I can walk you through some amazing numbers, but if you look at their forecast for operating margin for Q1 of this year, which analysts say will be down about 10 percent compared to Q1 of last year.

This is AMC you’re talking about.

This is AMC. Last year, they reported $ 55 million in Q1 operating profit. If you use our numbers for concession purchases and our numbers for the tickets we bought, which we know that number. Our concessions is self-reported as our customers telling us. You use the margins that AMC reports in their earnings. We represented I think it was 34 or $ 35 million in Q1 of operating margin for them, 62 percent of their total U.S. company margin.

So you started this experiment when?

Couple weeks ago.

Couple weeks ago. Have you gone back to them and said, “Uncle, you got enough.”

No.

How long will this go on for?

I don’t know. You know, we’re assessing other possible locations. There are actually quite a few that fit that same criteria where there is plenty of competitors.

Can you feel whatever discomfort your customers feel? You’re saying, “Look, we’re taking this theater away from you, but you’re not going to notice it.” That may be true, but you hear the message and you hear, “They’re not working with AMC theaters. If I’m about to buy a MoviePass subscription, maybe I’m rethinking it.” I don’t think you guys are going to go out of business but I’m crushed.

That’s true.

It’s a risky proposition for you.

It is risky. By the way, we have no plans to increase the quantity of AMC locations or to decrease the quantity of locations. All I’m saying is there’s an awful lot. I would love to sit down at a table and show the AMC folks how we can be great partners and drive more business into their locations. We were partners with them for two years. The previous CEO knows exactly just how positive we can be for their business. Our customers want to go to AMCs. We want to work with AMC, but at the same time, you can’t keep giving millions and millions a week to an entity who says over and over again how, “Yeah, we’re happy to take your money but we’re never going to share in that increase profit with you.”

I mean, from the movie theater’s perspective, they’re already facing this sort of structural problem. People are spending more time watching Netflix shows. There’s this constant discussion, I think: Shorten the window and decrease the amount of time you even have to see a movie in a theater. They’re fighting off all of that. You come in from the other side saying, “We’d like to participate in your business and we’d like to help insert ourselves between you and your customer. By the way, it’ll be good for you.” You can image their reluctance to see you as a friend.

Yeah, but to me that’s illogical. It all comes down to whether you believe us or not. If a business came into you and said, “I can double the amount of people that listen to your podcast and I want a small percentage of the increased advertising revenue that you get,” would you tell them, “Go away, I’ll never share any increase profit with you”? That’s essentially what they’re saying to us. We double the amount of times their customers go to AMCs. We more than double the amount of concessions they buy every time they go, and that is increased profit.

I like the more audience. I like being able to sell more ads. I can see giving you a cut. This is already an issue for media companies. Who’s mediating us? Who’s distributing us? What platform are we dependent on?

Yeah.

Another middleman wants to insert themselves between me and the audience. That’s the question I have because, by the way, you’re going to increase that takeover time.

Yeah. That’s the problem. You always find that the big incumbent players are thinking more about protecting their current business. We can’t possibly lower the price and make the deal better. Meanwhile, consumers have changed dramatically. People who are under 35 grew up with subscription and they think about consuming entertainment in a much different way than this a la carte transact.

Theaters are the only business that hasn’t evolved in the entertainment space to at least offering options. Unfortunately, these guys are very old school. They’re trying to protect their current business. They want to maintain higher prices and yet they have no plan for what’s in the future. Do we just keep, every year, raising prices? What happens when it’s $ 30? They’ve shown that they don’t have a solution to get more people back into the theaters. They tried more comfortable seating, different food. That’s helping, but MoviePass is the only thing out there that actually doubles the frequency of millions and millions of subscribers.

You’re talking about distortion. You worked at Netflix and later Redbox. What did you learn from those two experiences? What was your title at Netflix?

I was the VP of business development and strategic alliances.

This was as they were sort of moving into streaming, right?

No. I was there at the beginning.

Early days.

I was there from ’98 to 2003.

You got stock?

Yeah.

So you don’t need to work. That’s good.

That’s what I keep telling myself.

Then at Redbox?

I was COO and president for eight years and grew it from six kiosks. The year I left, we did a billion and a half in revenue and threw off 300 million in cash flow. By the way, we had the exact same thing from Blockbuster. Blockbuster said, “Don’t look at these guys who are renting movies for a dollar a night. Keep coming to us and pay $ 4.50 for the same movie.” People said, “There’s no way these guys can afford to rent the same movie for a buck.”

Besides having a general sort of enthusiasm for things that people look from the outside saying, “Doesn’t make any sense, that’s not going to work,” what else did you learn working at those two companies that’s applicable to this job?

Yeah. There was really two keys. The first one is if you as a customer know that there’s a different way, don’t take for granted that the way it’s been done in the past is the best way. Keep your eyes open to what consumers really want. Focus on the consumer. Focus on what the customer wants. In the Netflix days, it was pretty much an accepted practice that if you had a video store and you were renting movies, you had to live off of late fees.

In the same way that the gym model was, “We don’t expect you to come. We expect you to be stuck in financing this membership. That’s actually how we make our money.” The movie rental business was based on you not returning the movie and paying outrageous fees.

Yeah. It was 15 percent to 20 percent of the revenue and it was almost all the profit. We took a look at it and we said, “You know what? It doesn’t have to be that way.” By eliminating the late fees, we essentially removed all that anxiety of renting and thinking, “Oh god, if I don’t watch it tonight or tomorrow, I’m going to pay a late fee.” As a result, people started experimenting with films they never would’ve seen in an a la carte model. That’s exactly what we’re seeing in MoviePass where we’re eliminating or significantly reducing the anxiety of making a bad choice of going to the movies.

You told me a good Reed Hastings story the last time I talked to you about … You were going to say same-day delivery?

We were going to do kiosks.

The whole idea was you had figured out a local delivery model and backed out of it.

Oh, okay. Yeah.

I just don’t know the whole story.

During the a la carte days — because for ’98 and ’99, we were renting movies for $ 4.99 for a weekly rental plus a shipping charge. What we found is that the people who got the movies within one day, that in those markets with a one-day delivery, we had a significantly higher market share than all the other markets. We’re trying to figure out, how do you get movies quickly to people? There was really a couple different ways. One of the ways was to have a kiosk in your local grocery store where you could just pick them up and return them.

That became Redbox.

We called that Netflix Express but it was kind of a stealth side business that we ultimately closed because it was shortly after we went public in ’02 and we got word that analysts heard about this and thought we were going backwards to the physical world instead of forward. The valuation was pretty much built upon going to a digital feature.

They wanted you to be an internet company, not a rental company.

Yeah, not a physical location company. Yeah.

That was something that Reed Hastings sort of figured out?

Yeah. The guy is a genius when it comes to focus, which is really the second thing I learned is you’ve got to focus on the one thing you can do better than anybody else. In Netflix’s case, it was having the biggest inventory delivered at the fastest speed. He was a genius in keeping everybody laser focused on that.

You mentioned this earlier, this is not a company you founded. You came in later.

Yeah.

It had founders, it had a different business plan that it punted around for a while. How did you come to this company?

I think this is my third participation in MoviePass. Early on after I left Redbox, a friend of mine, Tony Conrad, who’s a partner at True Ventures in San Francisco …

I interviewed his partner at True Ventures.

Yeah. True was both the seed and the A round of investors for MoviePass.

With that original business plan, 40 bucks a month?

Yeah. Back in 2011. They tried all kinds of prices, by the way, 25, 35, 45, etc. Tony thought I would make a great adviser to both Stacy and Hamet, who are the co-founders. Stacy is here in New York and Hamet is in California. At the time, I was doing advising and consulting of companies along with Mark Randolph, who’s really the founder of Netflix. He’s the guy who really had the idea. We started advising the MoviePass folks and it was pretty clear to us right off the bat that this needed to be a mass-market product and get to at least a $ 19.99 price point or lower.

You looked at it early on and said, “This business you have will not work.”

We essentially said for it to be fun, you needed to make it big. To get big, you had to go beyond the moviegoer who goes a lot. You need to get to a broader audience because for us, when you’re helping millions of subscribers, it’s a lot more fun than hundreds of thousands. We advised the two founders for about six or eight months in 2012. At the end of about six months, we realized that we weren’t making a lot of headway.

Headway for getting those guys to change?

Because it’s a tough decision.

Because you start a business, you think you have a great idea. These guys come in from the outside saying, “No, no. You got to scale it up, make it bigger.”

Right. Back up. We’re used to people pushing back on our ideas, but we were looking for things that would be fun and interesting. We walked away, and about a year later got drawn back in by one of their investors who wanted us to help them with some ideas with the company. That fell apart as well. Then in January of 2016, I met Chris Kelly, a former chief privacy officer at Facebook, he had become the major shareholder in the meantime. He and I met at Sundance, totally hit it off, saw eye to eye on the opportunity to making it more a mass-market product. Then I invested shortly after that and came in as CEO in June of 2016, June or July.

So you’re someone that comes in and says, “I’m going to put up money and I’m also going to take over the company and we’re also going to change the direction of the company.” The founders at that time say, “Great!” or, “We don’t like this idea but we can’t say no.” How does that happen? How does that discussion go?

Yeah. Those kind of discussions can run the gamut depending on the founder and their receptivity, and of course no one gets into that situation if you’re doing great.

“You’ve been at it for five or six years, it’s not working.”

Yeah. Just plugging along and not making … They had grown. They had grown to about nine million in revenue, but they constantly needed cash. They were actually very receptive, very positive. Of course, they had known me through several iterations over the previous couple years. I guess four years. They were just super positive and receptive. In reality, I had been in that position before in the past and it’s not the greatest feeling when someone who hasn’t paid their dues in that particular company comes in and thinks they know everything.

Again, they put in their time and their money and it’s enormous work to start a company like this and their baby. Then allowing you to come in, in some ways, is a concession. “It’s not working, we need to do something different.”

Yeah. They were very positive about that.

Are they still involved in the company?

They are as advisers and I get some great input from them. They actually developed a pretty amazing infrastructure to be able to make this work.

When you come in and you take over a company like this and it’s basically a pivot, do you have to sort of think about the DNA of the company, the existing employees and how you’re going to reorient them? Or do you just bring in all new people?

Well, I think you can do it in lots of different ways. In this scenario, I don’t think anything other than a few consultants who were out in California left. It was everybody.

Everybody stayed.

Everybody stayed. We were only nine people. We added one or two people over the course of the first year because we were still small. We were mostly experimenting, testing different price plans. I tried a $ 99 plan that including IMAX, did a $ 14.95 plan, tried all kinds of things. For the first year, I think we brought on two or three people and then just tested like crazy until we were ready to roll out the $ 9.95 plan.

You said an earlier incarnation of the company had nine million in revenue but they kept having to get money. You’ve got a business plan that requires you to go back and get more funding periodically, right? Recording this early February. The stock markets are in a nose dive. Things look sort of wobbly at best in the media world. You hear people saying it’s very difficult to raise money. Are you at all concerned that you are going to go back to the well and at some point, someone’s going to say, “No, no. We’re going to stop funding the money losing enterprise. We’re done with it.”

We have a really, really potentially big business. We’ve grown faster than Spotify. We’re the fastest-growing entertainment service and with no free trials. Everybody’s paying. There’s a lot of interest at many different levels from media companies to studios to huge organizations that want to be affiliated with us, so we have lots of options at this point. We have a deep-pocketed backer that is prepared to fund us all the way.

Is there an ancillary business where you also figure out my babysitter situation because, of all the reasons that I have for not going to movies, it’s really expensive to see a movie in New York but the ticket price is the smallest part of it. Everything else that’s involved. If you look in a different city, it’d be parking as well. Are there add-on businesses you can layer on here?

Yeah. Besides the marketing on behalf of the studios, I always looked at going to the movies as a centerpiece to a night out or a day out. You need a babysitter, you might take a Lyft to get there. You might go to dinner or have some drinks. We want to build out what we kind of want to evolve from, let’s say, Orbitz for the movie theater to OpenTable for the movie theater.

We know which movies you might like. We know where you are. We could suggest, “Hey, in two hours a great movie is starting at the AMC theater. There’s a great restaurant across the street. Use our card, use our payment system and get a free appetizer and then click here to get the tickets.” We think we can build out a whole ecosystem around — and of course include babysitting through one of the services, Care or one of those others.

All right. Well, when you figure out the babysitting component, let me know and I will sign up.

Okay.

Mitch, great to talk to you.

Thank you.

Colin, I hope we’ve scratched whatever intellectual itch you had.


Recode – All

Full transcript: Harvard Business School professor Nancy Koehn talks about leadership on Recode Decode

Her new book is “Forged in Crisis: The Power of Courageous Leadership in Turbulent Times.”

On this episode of Recode Decode, hosted by Kara Swisher, Harvard Business School historian Nancy Koehn talks about her new book, “Forged In Crisis: The Power of Courageous Leadership in Turbulent Times.”

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.

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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 a leader, not a follower, unless you’re Chrissy Teigen, whom I would follow anywhere. 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 Nancy Koehn, a historian at the Harvard Business School. She spent 10 years writing her latest book, “Forged in Crisis: The Power of Courageous Leadership in Turbulent Times,” which seems so pertinent right now. It examines the rise of five leaders who had to overcome a crisis — including Abraham Lincoln, Frederick Douglass and Rachel Carson — and shows how their stories might inspire us. We need a lot of inspiration, Nancy. Welcome to Recode Decode.

Nancy Koehn: Thank you. It’s a pleasure to be here, Kara.

Tell me how you got to be the historian of Harvard Business School. How does that happen?

You know, way led onto way, as Robert Frost would say. I graduated from Harvard’s history department and got a chance to apply as a lecturer at Harvard Business School. I just thought, “Hell, that sounds really interesting. I don’t know anything about business, but I’ll figure it out,” and I went. Just leapt over the cliff.

What history were you studying?

Believe it or not, I was a graduate student and my dissertation was about 18th century England and what were the British ministers thinking when they did things like the Stamp Tax.

Right. Oh, wow. The Stamp Tax. That’s a hot topic.

That’s a kind of a stretch from the Harvard Business School, right?

Yeah, yeah, yeah.

I ended up there. Didn’t know where the …

Why were you interested in that? I’m going to go back just a little. Why were you interested in the Stamp Tax?

Because I wanted to understand how intelligent, educated people in Whitehall could be looking to the West and thinking such very different things than people like Patrick Henry or Benjamin Franklin or Thomas Jefferson were thinking.

Right. It didn’t end well for them.

Right. And talk about disruption. There was unintended … I wanted to understand, where did that unintended disruption come from?

And where was the decision-making around it?

And what were the choices they made? They had no idea. People like George Grenville, who authored the Stamp Tax, they had no idea that what they did was going to cause such a firebomb in places like Boston or Philadelphia. They were trying to raise revenue. They were doing something … And not close down the government in Whitehall in 1765 and keep a far-flung empire afloat.

Right, right. So it was unintended consequences.

Completely.

Right, without knowledge.

So I was fascinated by that, how good intentions cause such very big surprises. That’s what I had written about when I got hired to go teach business history at the Harvard Business School.

Business history. That’s something that people … History is not something that businesses look at very much.

No, they do not.

They don’t remember anything. They think they do, but they don’t.

That’s right. A few CEOs will tell you candidly that on their nightstand are biographies. They’re serious. They read them and they try and learn from them, but no one goes to the Harvard Business School to study history. Very few leaders that I’ve coached over the years spend a lot of time thinking about the past and what it might teach us about the present.

The Harvard Business School, at that time, in the early ’90s, had a very robust cottage industry called business history. Where it became very valuable is in your turf, Kara, in your domain, because what we did in the course I started teaching, a second-year course, 450 MBAs took it in 1993, ’94, ’95, is try and understand the rhymes of past industrial revolutions with what was then being called “the computer revolution” that became the smartphone revolution that became the digital revolution.

A lot of students were looking at John Rockefeller and saying, “Hmm. Is Rockefeller like Jeff Bezos by 2000? Can we understand what some of these new pioneers in the digital frontier are doing by understanding what other path-breakers did?”

It actually was a very popular class and in the process of teaching it, I learned a hell of a lot about organizations, business and entrepreneurship, which is were I spent the bulk of my time, actually teaching entrepreneurship.

Right. We’re going to get to entrepreneurship and historically what makes one, because I think there are commonalities in a lot of things. One of the things that’s striking about the tech industry, we’re going to focus more on the tech industry, is the lack of interest in history, lack of interest in … Thinking that they’re breaking new ground almost all the time, and that aren’t any lessons to be learned.

You know what? I’m flummoxed by that, but I’m an outlier, I’m a historian. I can’t read history, I can’t discover a new moment. I was just reading a Teddy Roosevelt speech from 1910 and realizing everything he’s saying about daring greatly and moving into a new arena is relevant to new businesses, even community activism, today.

Mark Twain once said, “History doesn’t repeat itself, but sometimes it does rhyme.” I don’t understand why someone that’s in a brand-new industry, or relatively young industry, isn’t fascinated by other folks that were in young industries before them.

Because, you know, the old … I can’t remember who said it. “There’s nothing new under the sun” is a famous quote. It’s the Greeks, essentially. But they feel like everything is new under the sun, that they’re doing things that have never been done, or that they have to kill the past. I think that’s really part of it. Or if they’re pulled down by the past, that will hinder them from future progress.

Maybe, but that’s a kind of dangerous naivety, I think.

Yeah, well, welcome to Silicon Valley.

Or maybe it’s hubris. “We’re brand new and we’re cool.” That’s hubris, because one, it’s not true and second, those that don’t know the past are doomed to repeat its mistakes. There’s no question. We see that over, and over, and over.

If I were advising almost anybody in your neck of the woods, it would be, “Pick up a biography of pioneer, a business pioneer if you want, and learn from what he or she learned and the mistakes they made and the grounds they plowed, because that’s where the gold is for today.”

Right, where you can learn lessons. We’ll get to who they should look at in a second, but … You were doing historical research on leadership …

I was doing … I went to the Harvard Business School, wasn’t supposed to spend more than two years there but got infected with the pragmatism of the place. I began writing a book called “Brand New: How Entrepreneurs Earned Consumers’ Trust From Wedgwood to Dell” and I got really interested, Kara, in these stories of these six entrepreneurs who had basically won on the demand side.

That is, someone like Howard Schultz, who didn’t have any proprietary technology, but figured out, before you and I knew we needed a double tall latte to begin our day, that consumers wanted that, and so competed on the demand side.

Or someone like Michael Dell. I mean, his game wasn’t really a game of technological innovation …

It was simple.

It was about consumer customization and then creating the value chain to support that.

I was fascinated by people that could build competitive advantage in a relatively new market. That got me interested in the curious alchemy, both inside and out, of entrepreneurs. I spent a lot of time teaching entrepreneurs, advising entrepreneurs, being involved in some startup companies that came out of the Harvard Business School.

Harvard Business School has a lot of actual fans in Silicon Valley. Frances Frei is there now at Uber.

You bet, you bet. And there have been a lot … Even though we’re in Boston, our necks are craned West a lot of the time. It was a very, very interesting way station along my intellectual and personal journey to try and understand what makes entrepreneurs tick and how do we understand their impact.

That led me, ultimately, into leadership, because as you and your listeners know really well, it’s one thing to start a company, it’s another thing to build the organization capabilities you need to keep it sustainable and vibrant.

There’s such a disconnect.

So that work on “Brand New” brought me into the curious, often cliché, often eyes-glazingly cliché field of leadership. I was determined, as a historian, to say, “Can I figure out something gritty and serious and accessible to say about leadership?” That took me to this new book, which took me forever and a day to write, called “Forged in Crisis.”

Right. One of the things — before we get to talking about the book in the next section — when you think about that, there is sections of entrepreneurship and that’s one of them. One of them is the first idea and the persistence, and we’re going to talk about what commonalities exist. But then it is the actual leadership. I have seen so many companies that I’ve covered falter at that moment. Even a promising idea. You think of Dell leadership. It’s always a crisis of leadership in some way.

Or allowing leaderships to … I was just thinking about … I just asked a question of a Facebook exec, if they had enough irritants in the leadership, because they all agree with each other and maybe they can’t do it.

Exactly. That’s a great way of thinking about it.

They didn’t even want to think about that. I was like, “Wow, you’re not even thinking about it.” You know what I mean? It was an interesting … they weren’t being hostile or anything like that, but they felt like getting along was great and I thought getting along in this instance led to the problems they’re having. It was a really interesting thing.

People don’t look at the way we build leaders in tech as leadership being the most important part of it, which is interesting. They look at the entrepreneur part of it or the …

They do, but you know the founder piece … If you think about founders who have successfully made the transition from a founder to an institution builder …

There’s two.

Right?

Three. In tech.

There aren’t very many. If you think about them, they are mostly men in Silicon Valley that have also had to transform themselves at some very fundamental level because the things that take you into the successful IPO are not the same qualities within yourself that bring you to a place where, “I’m going to create a company for the ages.”

Right. I think you could just say Gates, Bezos and Jobs.

Yeah, absolutely. I might say Howard Schultz, as well, at Starbucks, at a low-tech industry.

He wasn’t a founder, though.

Right.

I’m doing early founders.

Those are good examples, but they’re three out of, I don’t know, scores of people you keep tabs on.

Yeah, it often is. Some of them do step aside. Like Pierre Omidyar stepped aside at eBay and made way for a better leader, which was interesting. Smart enough and adult enough to do that. Most of them aren’t. They just grow in the job and grow badly.

I think Zuckerberg has tried and will eventually transform himself. I mean, he has, obviously. He’s the most important company and most valued company in Silicon Valley. But I think that his struggle towards leadership is still ongoing, which is interesting.

Yeah, I’m sure you’re right, just from my own knowledge as someone from the outside thinking about what’s happening to these individuals. I think Jeff Bezos is a very interesting example, because in the last three years, it seems to be — particularly in the last two years — you see someone that, at least for outsiders looking in, is trying to, or seems to be trying to establish an external footprint. Not just for his company, but also for himself.

It’s more than buying the Washington Post. It’s about someone now that’s saying, “Hmm. Now there’s a bigger cape I have to wear, a larger mantle that I think exists on my shoulders in this company and in the imprint of the company.” It will be very interesting to see how Jeff Bezos steps out, so to speak, and expands.

Well, I think he’s very deft. Again, I was saying to an earlier guest that he’s an adult. It’s easier when you’re an adult and when you don’t start from early on having …

What happens in Silicon Valley, and we can talk about this, is that people get licked up and down all day. They suddenly transform themselves into a different person because of the negative that they get.

What’s interesting to me about Bezos that is a corollary to what you just said, Kara, is that he’s always had a kind of — again, from the outside looking at him, I’m never met him — a kind of emotional forbearance. So he’s not someone who’s felt the need to necessarily download his reactions. He’s been, it seems to be, deft.

He’s an adult.

Deft.

I don’t know how else to say it. He was old when he started. He was older when he started. A lot of these people are kids and they aren’t fully formed and therefore get sucked up into behaviors or arrogance, in a way, that’s really damaging. And they never recover from … You don’t see a lot of … We’ll get to that in a second.

You became this historian and what you do now is, you look at historical leaders or entrepreneurs. Because that’s the interest at Harvard, though, entrepreneurship.

There’s a huge interest in “How do I launch myself into an entrepreneurial path?” and there’s a big interest in “If I’m going to do that, how do I grow myself into someone who’s an effective leader?” Our students often see those things, refreshingly, as being connected. How able they are to execute on that charge they put before themselves is a more open question.

What I do now is teach, until recently, until this year, when I’m teaching a course on the emotional awareness of leaders …

Oh, that would be nice.

Very interesting. From the ground up, from nuts and bolts. Very critical stuff. I have taught a big course called “Power and Glory in Turbulent Times: The History and Leadership from Henry V to Steve Jobs.” We end with a case on Mark Zuckerberg and a case on Steve Jobs.

Wow.

And we study not just their business accomplishments or their business mistakes, but the arc of their life. We get a sense of, who did these people grow into with the assumption or the achievement of great power and influence? So it’s a course for the students in, “Hmm. What do I learn about myself from looking at Estee Lauder or Martin Luther King or Steve Jobs or Katharine Graham …”

Iconic.

Who becomes a real heroine to a lot of my female students who don’t know about her.

It’s a really interesting course to teach. To watch the students grapple with the biographies and then try and cut and paste from those on to their own sense of themselves.

Mm-hmm. All right, we’re talking with Nancy Koehn. She’s written a book. She’s a Harvard professor? Is that … Harvard Business School.

I’m a tenured professor at the Harvard Business School.

Business School. She’s spent the last 10 years writing her latest book, “Forged in Crisis: The Power of Courageous Leadership in Turbulent Times.” It examines the rise of five leaders who’ve had to overcome a crisis.

When we get back, we’re going to talk with her about the book, and what are the aspects of leadership, and also, what has to change for an entrepreneur to become a leader in a sustainable business.

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We’re here in the red chair with Nancy Koehn, a historian at Harvard Business School. We’re going to be talking about her book, “Forged in Crisis: The Power of Courageous Leadership in Turbulent Times.”

Nancy, you looked at five leaders around leadership. Abraham Lincoln, Frederick Douglass, Rachel Carson. I don’t know who the other two were. You can talk about them.

I want to start first, talk about the importance of leadership and what it means, because I think it gets twisted around in our society.

It does. It’s become such a cliché that we’re just bored hearing the word, especially right now, given the schoolyard mudslinging that goes for national governance.

I use a definition in the book that I stumbled on many years ago from David Foster Wallace, the American writer. This was from an essay he wrote about the first John McCain presidential campaign. He said, “Real leaders are individuals who help us overcome the limitations of our own weakness, and selfishness, and laziness, and fears, and get us to do harder, better things than we can get ourselves to do on our own.”

I think that captures a whole lot about leaders in all kinds of fields. Companies, movements, governments, religious institutions. This book is about individuals who made themselves in the midst of astounding volatility, and while they were down on their knees, screaming at the sky in confusion, made themselves into those kind of people. And they did it over and over again.

One of the things, you’ve got “Forged in Crisis.” I think that’s where most leaders are forged, right?

Absolutely.

I think that’s how we … That’s our cliché of leadership, for sure.

Yep.

Let’s talk about the leaders you looked at. I know people … I don’t like to say commonalities in leadership, because I think that’s probably another canard, that there is commonalities in leadership. There’s lots of ways to be a leader. I think we have a vision of a leader, of sort of a strong, white-guy hero or someone who’s firm, versus other ways to lead.

You picked the leaders you picked. I want to know why. Abraham Lincoln, Frederick Douglass, Rachel Carson. Who were the other two?

Ernest Shackleton is the opening story. He’s fourth of the five. An Antarctic explorer whose ship went down off the coast of Antarctica and has to get his men home.

Yes. Many books have been written about him.

The fifth person is the least well known in the book, Dietrich Bonhoeffer, who was a clergyman, a pastor, in Germany when the Nazis came to power in 1933 and becomes, immediately, a member of the resistance to Hitler. He gets more and more radical in his resistance as the noose of Nazi evil tightens, and by 1939 has joined a group of double agents within the Nazi government working to assassinate Hitler in order to overthrow the Third Reich.

His story is not as well known, but it’s an astounding story about resistance and being true to your muscles of moral courage as an authoritarian, an increasingly dangerous leader in his government, take hold.

Let’s start with him. What caused that to … Talk about the qualities of leadership and what forged him. Because a lot of people didn’t see it coming. They don’t, or they cooked slowly, let’s …

They cook slowly. He refused to not admit that the lobster, or the animal of goodness, was boiling very rapidly in the pot. He could see right away, because the Nazis, as some of your listeners will well know, actually were very quick in doing a whole bunch of things. Closing down civil liberties, getting rid of privacy laws, burning books within six months of taking power, announcing all these restrictions on Jewish business and other kinds of activity.

It was clear they were going to have enemies of the state and all kinds of people were in trouble because of it. Bonhoeffer just said, “Look. This man and what he represents — and the people that are supporting him — mean terrible trouble, not only for Germany, but he’s a war monger and there’s going to be a big conflict.”

He just set to work trying to educate other people in that same vein. What’s so interesting, and ultimately important, for our moment in the story is how, as the noose of power tightened, people can see what’s happening, but they put their hands over their eyes and say, “I’m not going to get involved. I’m going to allow this to be so I can be safe because I’m scared if I stand up.”

One of the really interesting lessons is, how do you find the chutzpah and the grit and the self-motivated fuel to keep on resisting, and how do you bring others along on that journey?

Interestingly, Kara, to something you said earlier, this was not a hard-charging, super-aggressive, celebrity kind of guy. He breaks a lot of our falls and dangerous myths or preconceptions about leaders. He’s articulate. He’s serious, but he’s a quiet person. He’s a kind person. He’s increasingly trying to develop his own muscles of courage, because he’s scared. He’s trying to figure out how to stay under the radar of the Gestapo and the SS while, “I try and figure out what in the hell we’re going to do against this increasingly obvious madman.” And last but not least, “How am I going to keep my eyes open to what’s really happening?”

It’s almost a primer for those serious citizens today that want to be aware and active in a way that is consistent.

Right. How do you imagine he thought that was a serious time and others did not? What is it within him that has a leadership quality where he’s like, “I’m …” Because you can be wrong. You can be over-resistant or just obstructive.

That’s another trenchant question. I think one was just, “I refuse to look away.” Now, a second piece that’s really important to this story … This is the only spy story in the book and if any of these get optioned as a films, this is the one that has all the dramatic tension, because he becomes a double agent.

Here’s the hook. His brother-in-law … He was from a very well-connected — he’s the only person in the book that’s from a well-connected family. His brother-in-law, a gentleman named Hans Dohnányi, was assistant secretary to the Minister of Justice, so he was already inside the Nazi government. He had inside information. Years before we get to the Wannsee Conference in the early ’40s, that codified the Final Solution, the extermination of European Jewry, Dohnányi knew what was going on. He knew. He saw the writing and he could tell Bonhoeffer. Bonhoeffer saw, with unmistakable …

He had good information.

He had … There you go. Very good information. And he refused to turn away from it.

Right, right. Exactly. Or not believe it.

Or not believe it. Exactly.

Which I think a lot of … “Oh, it’s not going to be that bad. They don’t really mean it.” That’s always the one.

“They don’t really mean it.” Exactly.

I always am like … I remember when tech was upset every time Trump turned around and screwed them, essentially, after saying he wouldn’t. I said, “He said something, like on immigration, 76 times on the trail,” and they were like, “Well, yeah, but he doesn’t mean it.” I said, “But he said it 76 times. Don’t you think he meant it?” “Well, it was just campaigning.” I was like, “That’s a lot of times to say it.” Of course he’s followed through on what he said, which I think … Why wouldn’t he?

Muslim travel ban. Two months in office.

Why wouldn’t he? He said it. I don’t assume cynicism at all times by people. What was interesting is the willingness of them to believe that it was a lie on the campaign trail, which I thought it wasn’t. I said, “He made a promise to his voters. He said it. He seems to believe it. He has a historical predilection for this.”

What was interesting is that they wouldn’t even entertain that he meant what he said. I said the famous Maya Angelou quote, “When someone shows you who they are the first time, believe them.” I believed him. So I wasn’t so mad at him as I was with the tech leaders, who continually kept dismissing it, which was interesting.

Let’s talk about Abraham Lincoln. Obviously, he’s such an iconic figure. Obviously, so much crisis, ended in the tragedy. Talk about those leaderships, because he did push through things that he even was uncomfortable with speaking of.

Very much so. I tried to add to the already very crowded field. This could have been a book on Lincoln, and in a fit of humility, it did not become that. The world doesn’t need another book [on Lincoln].

But here’s what’s new in the story for your listeners about Lincoln. One is the emotional experience of, what did it feel like to live Abraham Lincoln’s life, walking down those halls and not sleeping in the White House. It’s extraordinarily wrenching for him. What many of your listeners may not know is that he, at times, despaired so much that he said, on several occasions and worried enough of his Cabinet ministers at one point that they took action, that he felt ready to kill himself.

Part of the story is, how do you keep on keeping on in the midst of the perfect storm? I think what’s really interesting from the standpoint of the kind of things you talk about in Recode is, thinking about Lincoln not as the Commander in Chief, not as the Great Abolitionist, not as the brilliant political calculator. Think about Abraham Lincoln as a change leader who articulated the change over and over again.

One of the things we don’t see in Silicon Valley and we don’t see in Washington, among all the turbulence, is leaders that are willing to say, “Let me frame the stakes of what’s going on. Here’s the moment at which we find ourselves. Here’s where we want to be headed, through this turbulence. Here’s what’s at stake. Here’s what the trade-offs are. Here’s why they’re ultimately worth making.”

Whether we’re talking about the negative effects of kids doing too much with technology, or we’re talking about a globalizing world which America can’t be an isolationist on immigration policy any longer. Those days are over. Here was someone who stepped up to that plate in letters, in speeches, in all kinds of forms …

And consistently.

And communicated the large sweep of the change. That was tremendously important to holding the nation together during the war.

Do you know who’s consistent? Trump. Trump is consistent. See, that’s …

He’s absolutely consistent.

On social media, now, it’s twitchy and twittery and short, but it’s consistent everywhere, every place. It never changes. What’s interesting is how the president always can’t believe it hasn’t changed. I’m like …

But it’s what you just said about Trump’s policy on immigration. He is as he appears. We can now make our opinions and make our best on him acting from that place.

Well, what’s interesting is, people say he’s not going to do what he doesn’t really believe in and I’m like, “Why? Where’s the evidence otherwise?” Because it seems like he’s using his platform very effectively to continue, because he doesn’t actually have shame.

He has no shame.

People … And that’s fine. People seem to be angry about that. I’m like, “I don’t know. He just seems to do what he says he’s going to do, so why are you consistently surprised, or clutching your pearls, by someone who says the same thing over and over and over again?”

It’s a little bit, though, like why were people at other moments, at great wrenching change at the top of a nation, unable to see what was coming down from a leader?

I think one of the things you’re talking about is the articulation … I think probably one leader that does that in Silicon Valley is Elon Musk. He does repeat things over and over, about AI. He doesn’t get off of a theme … He continues to say the same thing, or in different ways and in different modes, or when he’s announcing these … So some of it is marketing for himself and for his company. Mostly for his companies. Or he does these dramatic, like, “I’m only going to take $ 50 billion if I succeed,” or whatever the heck he’s doing on any moment, which is a lot about marketing. But it is about articulation of a thought process that stays consistent.

I think so, and to your point, I think it’s about, where does this fit in to the larger sweep? If he talks about space travel, he’s talking about in the context of where we are as a global village right now and why this is important. Very few people that we have access to in our crowded media moment at a governing level, or a leadership level, are doing that. It’s incredibly important.

Well, isn’t it hard because the mediums are so twitchy and need to change so quickly that nobody can sustain a cogent thought for very long?

Yeah, but just because it’s hard doesn’t mean we shouldn’t be doing it. It is hard. And the same thing is, making it twitchy makes it more important to give us some context.

Yeah. Just the other … I’ve been really tsk tsk-y at tech about its responsibility for a year. It’s almost like, “When are you going to stop that?” I’m like, “Never. How about never? I’m going to keep …” It’s a really interesting phenomena. But then I did feel pressure. Maybe I should stop that and move on to another thing. Then I’m like, “No, I think I won’t.” It’s an interesting question of being able to stick to a thematic thing in today’s twitchy … It would be interesting to see how Abraham Lincoln would react in a Twitter universe.

Well, you know, he was in his own Twitter moment. The telegraph was a kind of Twitter or smartphone at the time. What people forget about Abraham Lincoln … All these executives, when I talk about Lincoln and leadership lessons of his presidency, say, “Oh, he had no social media,” but he did have the equivalent of social media.

He is control central. The stuff that is pouring into him every single day, and I’m not just talking about media, I’m talking about every single telegraph from the front, hundreds of constituents walking through. This man is worrying about getting socks to the troops in Virginia as much as he’s worried about how in the hell is he going to avoid impeachment hearings in 1864, as to whether he should sue for a negotiated peace. This guy is besieged by the equivalent of social media.

By information.

And, still to your point, he stays on message, so to speak. Over and … “I would save the Union,” and “By 1862, it’s going to be a Union without slavery.” That consistency is so important for a nation literally wrenched apart by the carnage of the Civil War.

And to get back to … I’m still reading, forever, the book on Hamilton, the actual book, not the musical. The amount of writing and things, newspapers, they do back and forth under Greek names, often, was fascinating. The correspondence was … It seems even harder to do those. It was all about persuasion and putting your stakes out there.

It was. Let’s go back to what you said at the very beginning. We think we’re brand new, having these outlets to communicate a particular position or a particular viewpoint. We’re not. The pamphlets that really defined … The pamphlet wars that you’re talking about that helped define the framework on this country in the 1770s and 1780s were not so dissimilar to today, absolutely.

To what people with … And harder, in a lot of ways.

What was the lesson, if you had to take away from, I’m going to go to each of them, Abraham Lincoln’s leadership. Consistency …

A very edible lesson for your listeners is, when the stakes are high and you’re emotionally hot under the collar, do nothing right away. Don’t hit send, don’t hit post, don’t hit tweet. Do nothing. There’s all kinds of examples of Lincoln having enough emotional control, even when he was really upset, to do nothing and actually making a huge beneficial …

100 percent.

Do nothing in the moment. Just control yourself enough to wait. I think that’s a really powerful lesson.

Ernest Shackleton’s most powerful lesson, again, very …

Who got caught up in …

This explorer, he’s got to get 27 men home and all he’s got is three rowboats.

In the Arctic, right?

He’s off the coast of Antarctica.

Antarctica, right.

He’s got three rowboats and some canned goods. And rifles to kill seals. They got nothing else. They got no Twitter, they got no Waze …

Not real good jackets.

They’ve got no Instagram to take pictures and show people where they are. They’re on the ice for well over a year, floating on icebergs.

What he learns and what he demonstrates, over and over again, that determines the success of his mission, because it keeps his men believing in him, back to leadership, and in their own ability to survive this, is, every single day, he shows up, out of his tent or late at night, even if he didn’t sleep, even if he had six hours of, “Oh my God, I have no idea how I’m going to get home and get this done,” he shows up in service to the mission. Every day, he says, “Keep your things packed, lads, we’re going to go home.” That ability to, again, not disgorge his … the leader …

Anger.

Not disgorge his own anxieties real time, turned out to be critical to keeping his followers believing that they could do the impossible. Show up in service to your mission. A little forbearance, a little control, serves you well.

I think the most important lesson on Frederick Douglass, the abolitionist, escaped slave …

Contemporary of Abraham Lincoln.

Knew Lincoln. Lincoln could never have done what he did in ending slavery without all the groundwork at the grassroots level that Douglass had been doing for years on the abolitionist circuit.

Douglass’s most important lesson is, when you’re really, really scared, take one step into the fear. Into the fear, not away from it. Don’t duck it. Don’t pull out your phone and try to scroll it away. Move into it. That’s a really …

What’s the fear he moved into?

His fear, and a very defining one at various points, is, one, I’m going to be recaptured. In one really telling, pivotal, critical moment in his life, “The overseer is going to kill me by beating me,” because that was a real fear. He decides to confront the overseer and it really defines the rest of his life.

“I’m going to be killed for writing my autobiography. I’m going to be recaptured.” He’s got a lot of personal fears. And then the most important, pervasive fear, intellectually and morally, is, “I won’t be able to accomplish … I won’t be able to get the incredibly entrenched roots of slavery ripped up and eliminated in my lifetime.” Then after that, “I won’t be able to get the vote for women,” which is where he turns after the 13th Amendment, abolishing slavery, is passed.

For Dietrich Bonhoeffer, I think the most important lesson is, “You can make yourself a great deal …”

Explain who Dietrich Bonhoeffer …

Dietrich Bonhoeffer …

The German again.

The German Nazi resister, who finds his life and his position becoming more and more dangerous and more precarious as he goes. It’s important to remember he was a very young man when he’s doing this. He’s born in 1906, so when the Nazis come to power, he’s 24. When the [second] World War breaks out, he’s 33.

He’s a very young man, so he’s developing his muscles of moral courage. He’s doing it, not in one fell swoop. Leaders aren’t Supermen or Superwomen. They’re made, bit by bit. We get stronger. We get better. He’s developing it and he keeps working to get braver and writing about how difficult that is.

We can all get braver, if you will, moment by moment, if we keep on, as Sheryl Sandberg and Adam Grant have written in “Option B,” working on our muscles of moral courage and resilience. So that’s a really important lesson.

I think the lesson of Rachel Carson, who is the environmentalist whose book, published in 1962, “Silent Spring” is arguably one of the most important books of the 20th century. It, more than any other single act, launched the modern environmental movement.

I think the … She’s battling, as many of your listeners probably won’t know, metastatic breast cancer as she writes this book. She’s racing the clock to try and finish before her life ends.

I think one of her most important lessons is how she understood that a lot of your life, you’re not necessarily making a huge, bold splash in the external world. You are gathering. I have this whole section in the book about the gathering seasons of our lives, when we’re learning and investing in ourselves, and not necessarily checking an item off the bucket list.

You can’t do really important, good things if you don’t spend some time gathering. I worry that in our twitchy moment, we’re so impatient to have X or Y, externally, right now, that we’re not laying the groundwork within ourselves to become the kind of people we need to become to do the worthy things.

Right. You don’t get those moments. It’s interesting. Gates always does this Book Week and stuff like that. I’m actually going away for a week to do that, to just think.

That’s gathering, right?

Yeah. I have to go to a place that doesn’t have internet, because I just can’t …

Well, fine.

I’m addicted. You know what I mean? I have to remove myself from that equation, which is going to be hard.

I bet you’ll come back feeling like you’ve gathered a whole bunch of good stuff in there.

Hopefully. Or really well slept, I think. One of the other. Which is fine.

That’s part of gathering, too.

Yeah, exactly. When we get back, we’re talking to Nancy Koehn, a historian at Harvard Business School, about leadership. Her new book is called “Forged in Crisis: The Power of Courageous Leadership in Turbulent Times.” There’s a lot of turbulent times right now.

I want to go through some qualities of leadership that you think are necessary now, some of the ones that some of the … This is a tech show, what some of the tech leaders have shown and what they need to do, given how much they’re under siege lately, and deservedly so, and how they leadership their way out of it.

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We’re here with Nancy Koehn. She is a historian at the Harvard Business School. Her new book is about leadership. It’s called “Forged in Crisis: The Power of Courageous Leadership in Turbulent Times” and it examines the rise of five leaders who had to overcome crisis, including Abraham Lincoln, Frederick Douglass and Rachel Carson, and others.

There’s all kinds of way to become a leader. Let’s focus first on the general thing. Are there any commonalities or not? I don’t think there are, but maybe there are. Maybe there’s certain qualities that you need. Because there’s a different quality from being an entrepreneur to starting a company, which is not leadership. Probably persistence, ability to say yes when others are saying no. There’s certain commonalities of entrepreneurship, correct?

Absolutely. How you figure out what good calculated risks to take.

Luck. Luck is some of it.

Some of it’s just opportunity, meaning preparation, as Oprah Winfrey said over and over again. A colleague of mine once said that entrepreneurs are defined by being opportunity driven where so many other people are resource constrained, in terms of …

Right. “You can’t do that.”

What they’re listening to and thinking about. Or as Estee Lauder, the cosmetics entrepreneur, once said, “No is just another word for how and when.” That’s a lot of what you’re talking about when you talk about the kind of resilience and stick-to-it-ive-ness of entrepreneurs.

I think people in Silicon Valley love the Thomas Edison quote a little too much. “If I haven’t failed 500 times, I just found …” You know, I mean, “I found 500 ways it didn’t work. I didn’t fail.”

Exactly, right? That kind of stick-to-it-ive-ness is really important. But when we’re talking about leadership, I’m on your page. I don’t really talk a lot about common aspects. I think there are threads that connect these stories in this book and I think some of those threads are relevant to the Valley, or to Silicon Valley and tech.

One is that each of these people discovered, or stumbled into, or knew it from the time they were young, like Douglas being a slave and teaching himself to read, which he did because it was illegal to teach slaves to read, he did in a very ingenious, entrepreneurial way, they discover some kind of mighty purpose. The purpose, over time, becomes something more than, “I’m going to make a lot of money,” or, “I’m going …”

It can’t be money.

Pardon?

It can’t ever be money.

The mighty purpose is not about money.

No leader I’ve ever … No real leader does money matter.

And no real leader ever settles for “it’s about money,” because if you’re really defined by and shaped by and motivated, especially in your darkest moments, by the power of the purpose, the North Star you’re headed towards, it can’t be money. It has to be something that involves a larger group of people and … As Martin Buber, the 20th century German philosopher once said, “A might purpose is always about the movement from I to thou,””from me and my agenda to something bigger and more transcendent that’s about other people. The first thing is, you’ve got to find that.

Yeah. I think a lot of people do think it’s about money or ego, which are both the same thing, as far as …

They are exactly the same thing.

One of the things … I was talking to someone who thinks of themselves as a financial leader and is not, is just such a small-minded person. They were driving me crazy about something. I said … It’s an old saying. I said, “You’re so poor, all you have is money,” because they didn’t have a bigger idea of anything, in terms of involving people. I found it really interesting that he thought of himself as a leader, which was … I think he was super disturbed when I said that.

Then you wonder about how much of that kind of behavior or downloaded thinking is about how we try and justify what we’ve done and what we haven’t done.

I’m so struck … I do a lot of coaching. I’ve been at the Harvard Business School for 26 years. You quickly see with our alumni, they’re either getting bigger after they hit 45 in spirit, what they’re up to, or they’re getting smaller by degrees and figuring out, what are the mental gymnastics …

They need to take. What lies …

I have to construct to justify what I’m doing.

One is a larger sense of purpose. Often because of a crisis.

A second, really critical … Often because they find themselves in a crisis and discover it. Or they’re in a crisis, they’ve got this purpose out there, hovering, and they’re like, “I’m going to get through this by hook or crook, because that purpose is important.” It becomes like a kind of rope they grab onto and put in the mountain to climb up with. Then they infect other people with a sense of purpose because it’s personally meaningful to them.

I think the second aspect we don’t talk about very much … We talk about EQ, but I’m not … You know, Emotional Quotient, emotional intelligence. I like the term emotional awareness, because emotional awareness is about how you lead yourself, how you get up every day and define the hundreds of decisions you’ll make, that if you’re in a position of any kind of authority, other people are taking cues from.

We forget. A lot of people forget, especially in the Valley, I think. Maybe in lots of new businesses. When you’re in the position of the kind of authority that many of the people you talk with and work with are, all eyes are on you. You’ve got to show up and all those little choices you make are things that people are taking cues from. Including how you’re dealing with the person at Starbucks, or how you’re …

I think bad behavior does …

How you’re handling your assistants in the office, or engaging with them.

I think a really important piece is, what kind of emotional awareness do you have about yourself, what you’re up to, what kind of control you have, and how much of your own humanity — defined in benevolent, higher-road terms — are you harnessing each day as part of that awareness, to work with the people and make the people capable of doing harder, better things than they could do on their own. So think a big piece of it is emotional awareness.

A third aspect, never talked about, as far as I can tell, in the Zip codes that you and I both operate in and the overlap therein, is all of these people made times to write their thoughts down. Not necessarily to tweet them out and not necessarily as a to-do list. They wrote. They had typewriters in a few instances. But they wrote.

They wrote because writing proved to be a way to parse out their thoughts and their own emotions in a way that helped them think more clearly. One of the things we’re not teaching anybody in schools of leadership or executive seminars is, writing is a tool for helping you think more clearly and you can use it to lead yourself and your organization.

I worry that in our world of emojis, that we’re losing the ability to do the hard stuff, which is to think and write.

Yep. I think about that. I thought about that the other day. I just realized I’m not writing as much. I’m tweeting more, but the stuff I’m tweeting I could write. You know what I mean? I could actually … Which is interesting. They’re actually interesting thoughts, I just … It’s a way of getting out ideas.

It is. And here’s another kicker for the tech industry. There’s now beginning to be pretty good research that if you write with a paper and pencil or a pen and paper, your thought processes are different than if you tap.

Ah, interesting. Of course.

You actually turn out to be a little bit more creative, a little bit more …

I just have bad handwriting.

You discover more … Think about it, right?

I don’t do it because I hate … I have bad handwriting and I hate …

Well, but … I’m not trying to convert you. I’m suggesting …

I’m going to use a typewriter. I’ll use a typewriter.

That there’s something interesting … I’ve done this a lot …

I just bought a typewriter.

Pardon?

I just bought a typewriter.

I’ll bet it’s a little different.

I’m good on a typewriter, better than on a computer keyboard.

Yeah.

That’s why I bought the typewriter, because it slows me down.

That’s the point. It slows you down so you pull things out of the nooks and crannies within yourself that you might not have pulled out.

Right. And I make mistakes I can’t correct. That’s the other thing.

And those are useful, because then you go back and you see, “Oh, no, I wanted to use it in this way.”

Right. Yeah. It’s hard to do on a typewriter. You can’t go back.

You can’t go back.

You can, but you can’t.

Let’s talk a little bit about who you think are great leaders. I was thinking … As you were talking, I was thinking about … I’m going to just use tech, the ones I’m familiar with, but Reed Hastings from Netflix seems to have defined things really clearly. He’s stuck with them.

Other leaders … I do think Mark Zuckerberg’s someone who does evolve, whether you agree with him or not — and believe me, I’ve been super critical of some things they’ve done at Facebook. But I do think he tries to evolve it. You can see it in his essays and his struggling with the problems his company has created. That doesn’t forgive them, but it certainly is an interesting … Someone playing out, publicly.

Bezos doesn’t communicate that much, actually.

Not much.

He does it by action, which is an interesting way to do it.

Jobs, obviously, was iconic, and mysterious, and fantastic. That’s …

And seems happier giving away his money than he did making it. At least to look at his face.

Jobs? Jobs didn’t give away. It’s Gates.

Oh, I’m sorry. Gates. Excuse me.

Yes, he is a better person.

Oh, I know a lot more about Steve Jobs. Very …

He didn’t give away much money.

He didn’t give away much money at all. Very, very brilliant and driven and, I think, in many way, expensive human being.

Yeah. Yeah. He, I think, got better as … People always talk about his illness, but most of the things that he created that are now memorable were happening when he was dying, which I thought was interesting.

That’s really … That’s a very … I never thought about … You’re absolutely right.

The last seven years, every single critical thing happened then. He did a lot before that, but the real things, the big things …

No, 2005 afterwards, you’re absolutely right, Kara. That’s really interesting. Yeah.

And he also didn’t think he was going to die, too. Even though it was clear he was. One of the questions we asked him at a Code conference in the last year of his life was, I think I asked him, “What are you going to do with the rest of your life?” Everyone had a sharp intake of breath because he looked really sickly. He had to have been the most lively person of anyone in the room. The sickest person, but the most lively, which is interesting. He was immediately like, “Well, television. Television’s a real …” He was acting as if he had all the time in the world, which I thought was either the most incredible, overwhelming lie to yourself or he really did think that.

Or it was genuine.

It was genuine. You couldn’t lie to yourself in the way he looked and stuff.

That’s fascinating.

He was the most alive person I’ve ever seen of those leaders, which is interesting. Lots of faults and things like that, that he had, but one of the ones that I know that was … People would always say the reason he was successful was because he was heartless. I think the reason he was successful is because he was all heart, which, I think, is different. That manifested itself in a similar way, because all heart can make you tough, because you have to have it happen.

But let’s talk about what leadership qualities don’t work. I’ve been writing a lot about Uber and others. Talk about what … That, it seems like, one, it was a failure of leadership and, at the same time, to me — and I’m very obsessed with this right now — is the enablers around the leader.

Absolutely.

Same thing with Trump. I’m not so much bothered by Trump as, say, the RNC person today saying, “So what if he asked the FBI Director?” She’s normalizing that in a way that’s really disturbing, how we voted. I’m not surprised he did that, I’m surprised others are supporting it. The same thing with Uber or disasters in Silicon Valley, it’s the enablers around people.

Yes. I think that’s an astute point. Many years ago, an entrepreneur named Jonathan Bush, who founded a tech health company called Athena Health, was student of mine.

Yep. Bush. He’s Bush’s nephew.

He’s the cousin of 43 and the nephew of 41. John asked me to join his board and he said — and this is to your point about irritants at the top of the podcast, Kara — he said, “You’ve got to have people who will flip you the bird. You simply do, so you can grow, so you can see things you wouldn’t see otherwise. It keeps you honest.”

What you’re talking about, and I agree with in the case of Uber, is a company that, at least from the outside, did not appear to have enough people saying to Travis or saying to Trump …

Who had some really strong qualities.

“This will not fly. This cannot fly. Are you kidding, Mr. President? Are you kidding, Travis?” And we didn’t see that, so no one called them to account. I agree with you. Have they … I want to shake the RNC person and some of Trump’s handlers and say, “Have you no shame?”

Right. At the same time, it’s not … What’s interesting is, there’s certain things they were getting from, let’s stick with Travis, that they were getting from him, which is the high growth, the aggression and everything else, so that they sublimated the things that would later kill this situation, which was interesting.

I always think about, what were they … We wrote about … They had the medical files of a rape victim. At the time, when I saw it, I was like, “Are you kidding me?” And they were like, “Yeah, I know.” It was as if I slapped them awake, then they started … People are like, “How did you get those stories?” I’m like, “The people are very ashamed they didn’t do anything at the time.” That’s who called me, finally. That’s who I got to.

It was all of them, because it was as if I slapped them out of a stupor. They knew at the time it was a problem, but something happened and then they were embarrassed and wanted to make up for it.

Well, but that’s happening in our country, too. The halls of national government were … We know that there are things that are terribly detrimental things to democracy, the sinews, the blood and muscle of our country, that are happening right now. And who’s speaking up? Who will speak the truth, is what you’re really talking about, in a small circle of top executives? It’s incredibly important.

But at the same time, you don’t want to be pearl-clutching about it.

No, that’s right, but anyone that’s gotten to that level understands, to use your word about Bezos, deftness. Telling the truth in those kind of circles is not about holding the cross and walking to Damascus and getting knocked off a horse. It’s about a kind of deftness. It’s also about having a group of leaders see that the road to riches and sustainability might not be paved in hard-charging aggression. That there are alternative routes.

Or it might have to change during the time.

We just have a little more time. I want to talk about a couple more things around leadership. When I think about successful organizations, I think a lot about cohesion. There’s a leader, typically a single leader or maybe one or two, often two in tech, actually … There’s often someone that balances the other person. It is often two, actually.

It’s two in most companies, I think, Kara.

Yeah, and two. One that doesn’t get as much attention as the other.

Exactly.

Who does because they’re more interesting.

The cohesion around a group of people. They don’t have to like each other. I was thinking of Google. I don’t think they all liked each other. They did for a while and then they didn’t because people get tired and stuff. But the cohesion they had was really important.

Same thing at Facebook. I think you see a lot of cohesion among them. The ones that are not successful are not cohesive in the beginning. What happens with cohesion is agreement in the extreme where nobody doubts anybody else. So there isn’t, as I said, an irritant.

Can you talk about how you change leadership styles over time? It seems like people get to be dancing monkeys and what works, works, works.

Someone in the leadership team has to be able to say, “We’re swapping out now.” Recognize that “we’re seeing no evil, hearing no evil,” whatever. “We’re drinking the Kool Aid.” Someone has to say, “We gotta change the beverage menu.”

How do you create that in an organization?

You surround yourself with at least some kind of informal consiglieres, if you’re a CEO or COO, that are outside the company that are keeping you honest. I know all kinds of leaders, across different businesses, that have risen to positions of power partly because they had their own informal board of directors, three or four people you trust that you’re bouncing stuff off on, and they’re people that can put those irritants in your head and then you can bring them deftly, but seriously, into the corner office. You gotta be able to do that, especially in a world like tech that’s changing all the time and in which today’s path to the North Star is likely to be obsolete in a year and a half.

Right. Why do they miss that? What’s interesting is, I’ve noticed about people that I’ve covered since the beginning, they suddenly become so smart because they’re rich or because they’re successful. It’s a really interesting thing, because then you … Very few, although some of them do, remain the same. I think what happens is they get — I use an expression. Again, I’ve used it — they get licked up and down all day and therefore believe it.

Again, we’re back to emotional awareness. Think about someone like Lincoln. He writes, in a very interesting letter in the middle of the war, when someone’s saying, “Lash out at this opponent,” he says, “What I deal in is too vast for malice.”

I see. Woo.

There’s someone who’s like, “I know what I’m doing. I am not going to show up in the arrogant cloak with the orb and scepter in terms of how I think about myself.” You’ve got to lead yourself in a way that keeps you, in some sense, grounded and not believing all the stories of sycophants, eating all that sycophantic pie that comes your way.

What are the qualities? Because I am reading this Hamilton biography. I think the most important person that sticks out here is not Hamilton, who could be petty, Jefferson, 100 percent petty, Madison …

Oh my God. Mean. Jefferson mean, too.

Mean. Washington.

Washington. There’s someone. There’s a perfect example.

What happened? What did he have that caused … Because he saved the Republic.

Because he had the sense that “who I am and how I show up,” literally from, “No, we’re not going to call the president ‘his highness.’” He says that. “We’re a democracy.”

But beyond that. On the day-to-day level, how he balanced out people was really difficult. It was so touch and go.

I can’t imagine that in your world, in the world of tech, there isn’t that requirement, in some sense. You’re dealing with such ego, such high left-side brain development without the commensurate right-side brain development.

Great leaders, real leaders, like the kind we’re both agreeing on, are men and women who are like, “I’m grounded. My values, my character, my competence are aligned.” Now, you’re going to need to get along with Mr. Jefferson. He played peacemaker all the time, Washington did, among Jefferson, Madison and Hamilton.

And didn’t have to.

He didn’t have to, except that he recognized, back to cohesion, that they were going to try and figure out the foundations of this young, struggling country. We couldn’t be warring among ourselves all the time.

I think the single answer to, “How did Washington do this?” was, “With great sense of my own emotional awareness.” In terms he wouldn’t have used. He didn’t use those words. Harness to, “We gotta get this Republicship off the ground.”

A bigger picture.

All right. To finish up, qualities of leadership that are, I think, critical. I hate to do commonalities, because I don’t think there’s a case, but name two things that are critical and two things that are deadly to leadership.

All right. Let me start with the leadership no-no’s. Great leaders, real leaders, don’t throw their people, their mission, their office under the bus. Because you create a team that is running scared and not willing to make serious bets if you do that.

They’re scared.

Not to mention the friction and divisiveness and toxicity of that.

So you don’t throw your people under the bus and you don’t, ultimately, demean the very office you’re in, demean the position of where you are, in the sense not of, “What’s our stock price?” or, “How many people did we hire this year?” or, “What’s our market cap and what’s our market share?” But in the sense of, “We’re building something that has a serious reason for being and we’re doing it for more than just our own pocketbooks and for more than just this month.”

The ability to hold on to the vast future that Lincoln talked about. Those are … You can’t be ripping what you’re doing apart, or demeaning it. Those are two really important leadership no-no’s.

What do great leaders always do? How do they always show up? I think the sense of humility, that we’re getting at with Washington and Lincoln. A sense of humility. A sense that “I’m part of something bigger, and I’m allying myself and motivating people for something worthy, that’s larger than just this second and this win.”

Here’s the crazy irony about that, about leaders discovering that and unleashing the power. Leaders that are really doing that move from I to thou. You can see a little bit of this in Satya Nadella at Microsoft. “We’re here for a bigger deal.”

When you discover that in yourself and can light it up in yourself, you get really powerful in a deeply appealing, contagious way. So the irony of all this licking them up and down, and “Aren’t we great?” and “the smartest kid on the room” is actually less powerful than the other way of being. Great leaders unlock that.

The second thing I think that real leaders do is, they understand that other people around them are waiting to be unlocked themselves. You play a role unlocking others. You’re not just doing this for the company. You’re doing it for all the people around you that you can help be better and stronger.

If you’re working from those two places, you’re running on a good gas tank.

Yep. I agree with that. That’s a very important thing, is doing that. I think about it all the time, when I want to be petty. When I’m angry, I sometimes … I think the strongest thing that you’ve said here, we’ve got to finish up, the do nothing thing. I thought about that the other day. I was going to do something and I was mad. I just was like, “I’m just not going to do anything.”

And what happened?

It worked out just fine. It’s not in my nature not to do anything.

It’s not in a lot of our natures.

I’m like a mom.

It doesn’t mean it’s not the right thing to do.

“I’m going to clean up your room.” I think another thing was with my kid, too. Same thing. He made a mess and I was just was like, “I’m going to do nothing. I’m letting him clean it up,” and it worked 100 percent better. It was interesting. Other times, I do intervene. Most of the time. Because I do know better, Nancy. I don’t know if you know that. That’s my leadership style. Benevolent fascism is how I work at home. You can write your next book on it.

It’s a good title.

“A Case Study of Kara Swisher: Benevolent Fascism.”

Anyway, it was great talking to you. This is really important stuff. I think leadership is more important than ever, the right kind of leadership. We didn’t even get into #metoo or anything else, but that’s a whole ’nother …

Whole ’nother moment.

Yeah.

An important disruption.

Right now in Silicon Valley, all these leaders are praising China because they get things done and they work harder, and the niceties of sexual harassment investigations they don’t have to worry about. Of course, the New York Times had a great story about that today.

But it’s a whole ’nother topic. Maybe we’ll have you back to talk about those things.


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