The Realignment Ep. 90: Erik Torenberg on Realignments in Tech, Media, and Education

Erik Torenberg, welcome to The Realignment.

It's a pleasure to be here. Big fan of the show.

Yeah, thanks. It's been months since we first made the pitch, but this is finally all together. I'm now working with you at On Deck. Saagar's coming in with the podcast here, so that's the way things work here. But look, you've got a really interesting background. You're a venture capitalist, you're the founder of On Deck, which we'll get into a bit later. And before that, you were an early-stage employee at tech companies. So the first thing anyone from the audience is going to want to hear from you is, what are your thoughts from the tech industry's perspective on what happened last week? Obviously, we're not looking to have you get into the politics of it. We don't want you to play, I don't even know how to say it. We don't need you to get into Jack Dorsey's head, but let's talk about the deeper structure of what's going on here because something fascinating that's been happening on Twitter that a lot of our listeners probably haven't seen is there's this big debate by people like Balaji Srinivasan, who's come on the show, Naval Ravikant, talking about how from now on tech is gonna decentralize because of what happened. We're gonna see different countries come up with their own versions of Twitter. Individual users are gonna create their own servers to host their own social media platforms. It's all sort of confusing. So what do you think about all of this?

It's interesting. The, you know, there was this response to, to Twitter and Facebook banning accounts, which was, it's not censorship, you could just create your own app. And then there's this response to Google and Apple banning apps, which was, it's not your— it's not censorship, just create your own operating system. And then Amazon bans web hosting, and people are like, it's not censorship, create your own, you know, what, your own internet just so you can send a tweet? I, I saw a tweet version of that argument going around. And it's just funny how sort of the goalposts keep shifting. And to zoom out here a little bit, the first era of the internet was an incredibly idealistic time. Everything was going to be more democratic because we started with open protocols. But what happened in the 2000s was companies like Google, Apple, Amazon, Facebook built products that outpaced the capabilities of open protocols, and everything became centralized again. And it was decentralized prior. The good news, and the reason why we didn't care too much, was that billions of people got access to amazing technologies, a lot of them for free. The bad news is that FAANG, or GAFA, became our new overlords.

So that's Facebook, Amazon, Netflix, Google, all those sort of people.

Yeah. You couldn't really leave Facebook and Twitter and start your own new one because they controlled all of our data. You couldn't just transport your friends list. your follower graph. And if you did start a new app like Parler, AWS might ban you. And so fast forward a few years, this is 2016, and a decentralized crypto movement emerges. Bitcoin started before that, but we were talking about a decentralized internet. And the ethos of crypto movement was that governments and corporations were too powerful, were getting too centralized, and we needed to change from don't be evil, was Google's motto of their ethics, to can't be evil, to literally don't have the power to take down people because of their views. In the crypto movement, people first focused on the money use case, because you saw countries like Venezuela and others that were just inflating their currency. Bitcoin, as a store of value, solved a real problem. It served a real use case. The decentralized internet was still hypothetical, because as many complaints as there have been about censorship, it hasn't been a huge issue, and centralized services just work way better. The only reason why you switch to decentralization is if you were solving for the censorship use case, and that wasn't existential. What we saw in the past week was coordinated efforts across every level of the stack to ban not just a person, but an entire app. So, uh, so now the stakes of creating decentralized internet at every level of stack have never been higher. And, and I'm starting to see a lot more focus in, in my groups of people from people who want to build decentralized, uh, you know, layers of the internet, starting with social media. And, and I'm more excited about this bottoms-up approach than a tops-down approach, you know, from— with via regulation, because, you know, our political system doesn't really have the political will nor the technical competence to regulate effectively. What happens, or the concern is that you might regulate in a way that makes incumbents actually stronger. What we've seen in the past is that the bottoms-up approach has typically been better. Microsoft disrupted IBM, the next wave of tech giants disrupted Microsoft, and hopefully decentralized companies will disrupt Google and Facebook.

What I love about what you're saying, Erik, is that there's still an optimistic free market case of what you're making because currently the discourse within the American political right is it's over, just go build your own is like basically a meme. And to the extent it is, but you're actually talking about building something new that is technically possible, like technologically possible in terms of decentralization. The question I have for you is, is decentralization the only way forward? Because we're also seeing these emergence of paid, I don't wanna call them walled communities, but like semi-walled communities and like curated communities where people are having conversation and basically entrance of social, which is like this interesting fusion of the old all-open social media and then also not fully decentralized. Is that what the future looks like? So from your perspective, somebody actually involved in this industry, maybe even funding the next competitor, building the next competitor, give us some sense of the trajectory of the different ways they could look. It could look fully decentralized, it could look somewhere in the middle, or is there even a free market answer to Twitter, Facebook, et cetera?

I think there's a free market answer. I think it's going to take a while. It's not tomorrow. It's not next year. It might not even be 2 years from now. It's going to take a while. There was this tweet from my friend Conor, who runs Roam, which is a great note-taking app, where he said that the scariest words in the English language were Balaji was right. He was right about COVID when everyone was going crazy, and he's been talking about the need to decentralize for a long time. And he was right about that. I think we're going to see a hybrid approach. I think in the interim, you know, I'm very pessimistic as it relates to this idea of, are we going to have unity? I think basically, the internet is going to bifurcate. We're going to have a blue internet, and we're going to have a red internet. And the problem is that the internet right now is so blue that if the red internet starts to get off the ground, and it gets off the ground in an unsavory way, the blue internet is going to block it. So I think we're going to see parallel, basically like a right-wing version or conservative version of nearly every blue company. And I think some of those are going to get off the ground, be really powerful. I think some of those might get banned. And thus, you need the decentralized version in order for that to happen. So I think we're going to see a hybrid. I think the sort of centralized approach, but just sort of a right-wing version or a They wouldn't call it that, perhaps, but just a different version will exist. But medium to long term, we're going to have to move decentralized if you want to remove all choke points in the system. Because if we're seeing what we saw with Parler extend to other apps, and they're changing their rules on the fly, that's what's most concerning about this, is there's no set constitution that they have to abide by as a private company. Outside of what our actual Constitution allows them to do. And they're just sort of responding to sentiment and pressure within their own companies. Can I bring—

oh, sorry. I just want to bring a degree of optimism into the conversation because we did want to have you on for optimistic reasons.

Please.

I don't agree with the red state or red Twitter, blue Twitter take in the long term. In the short term, there's definitely a lot of money for anyone who's libertarian and to the right of that trying to say, Twitter's horrible, it's bad, I'm gonna create the operationally right version of that that will have different degrees of moderation/censorship, depending on your perspective on that topic, that's gonna have different approaches to what's the terms of service, all those bigger things. But that being said, when you're thinking as a venture capitalist, Erik, if I were pitching you this service, I think the key question you'd be answering is what's the problem that any user of the incumbent service is actually trying to solve. And let's be frank for a second, 99.999% of conservatives on Twitter and on Facebook are having a totally fun time. The funniest cases that I see, and this is definitely happening within my own family, not to call anyone out too hard, but I have a relative who has sub-300 followers on Twitter who just quit the app because they're afraid that, quote, Jack is going to come for them. I can guarantee very few things, but Jack Dorsey is not coming for post-60-year-old boomer with 300 followers who are mostly anon accounts, right? So from my perspective, it doesn't seem like post the next 6 months, because the next 6 months are going to be full of all forms of overreach, all this craziness in every level of our policy. But I just don't see a world in July 2021 where Twitter is still not usable enough to the point where there isn't gonna be that big of an opportunity for people. So how do you think about that as a venture capitalist?

Well, there's this interesting, there's this thing called Robert Conquest's Law, the second law, which states that if you're not, if a company or organization isn't explicitly right, it ends up being left. And the inverse of that is if a company is not explicitly left, it ends up being labeled as right. And so I think we're seeing this with Substack, right? I mean, the joke this past week was like, is Donald Trump going to get a Substack now?

That'd be incredible.

Yeah. And so, you know, if a company doesn't go to where the furthest people want it to go, it's going to be labeled as right. And I think we're going to see a lot of companies that, you know, they want— they're classical liberal. Like, they don't want to be right, but they're going to be classified as right if they don't go all the way. I think, as a venture capitalist— I mean, going back to Sagar's point a little bit, I think private communities are going to be enormous. And that's what On Deck is, and we'll get to it in a bit. But I think people are kind of— I mean, even before all of this, we're retreating from the public sphere a bit. People joke that Twitter is a library inside of a civil war. Like, our public platforms have just gotten too chaotic, and people have been searching for people who think like them, for people who they can resonate with, and not have to deal with, you know, not be called, you know, all these sorts of names by the other side. So I'm very excited about the, you know, the emergence of private paid communities that are unbundling a certain, you know, certain audience, or a certain interest group that is underserved by our public platforms.

This is what I'm really fascinated by, and I actually heard you say this elsewhere, and I want to tease it out here, is about what we have lost from public communication, and what we have lost from people thinking out loud, so to speak. As in, it's extraordinarily valuable actually to hear people think out loud and say controversial opinions and have it all spill out into the public discourse, and somebody else jumps in and says, well, have you thought about this? This is something which very much typified Twitter, I would say, like 5 or 6 years ago when I started getting like really into the platform. Now, as it's been mass adoption or has become more of a civil war, as you so to speak, in the political moment, it's frankly become a lot more anodyne. And the most interesting conversations that I have on a daily basis are in like private group chats. And this is what I heard you talk about, which is like we're gleaning so much information from our friends, which used to be at least in a semi-public or public environment, completely, which has now just retreated. What do you think that's cost as a society?

I don't even wanna—

I don't wanna make it a generic cancel culture take, but you're like, look, like toxicity and caustic discourse has made it so that people don't wanna think out loud, and that's a problem, and I think we should talk about it more.

The saddest part is we'll never know what we're losing, um, you know, or it's impossible to, to quantify, you know. Um, uh, Marc Andreessen, for example, is somebody who, who used to tweet all the time and share all these interesting insights, and so many people learned from them. And then he totally retreated. He's 100% off Twitter. He has the same conversations, but in private, but so many more people would be learning if it were in public, but just the cost doesn't make sense for him anymore. And there are hundreds of people for whom that is the case. So the amount that people could learn, could be inspired, could build on top of each other is just so much, and we can't calculate it. When Steven Johnson, in his book, Where Good Ideas Come From, the TL;DR of that book is it comes from a marketplace of ideas. It comes from a very dense group of people who are sharing ideas, building on top of their ideas, building on top of hunches, is the words he used. And it's really sad. I mean, it's really sad that basically what we've seen in the last 60 years is the group that has the power now is censoring the group that doesn't.

And that has flipped.

It was the right that used to have a lot of the cultural power, and they were censoring a lot. And now it's the opposite in certain circles. And I even saw Noam Chomsky, who I believe has supported extreme communist revolutions. I just say this to say he's so far left-wing. Even he is saying, hey, we shouldn't be censoring. Free speech is our device. We, the left, have been the advocates of free speech for so long. I saw a great tweet that said, if Noam Chomsky is telling you to ease up on your censorship, that's like Snoop Dogg telling somebody to ease up on the weed or ease up on your leftism. It's like Snoop Dogg telling you to ease up on smoking weed.

So the last thing here that I want to get at is what is the line between censorship and moderation? Right. So once again, we'll bring it to On Deck for a second. On Deck is communities of people that are working in different verticals. So, for example, people who are interested in climate tech people who are interested in podcasting where I work, people who are writers, founders, et cetera. However, on the Slack channel of the group, if someone started cursing, bringing in bad vibes, not even breaking the law, right? So, because people always make the exception of, no, look, if you threaten violence, obviously you'll get kicked from something that's not censorship. But there's just such thing as bad vibes. There could be a world where I could be on the On Deck Founders Fellowship Slack, and you frankly, as a moderator who's curating a community, have to remove me because I'm just bringing the wrong perspective—not even perspective, just the wrong vibe into it. So how is someone who's organizing communities of people? How do you advise thinking that? Because the Parler situation is complicated. Sagar and I will do a more dedicated episode about it. But the one thing that I do think happened here is Parler did not think hard enough about this question of what is the difference between censorship about people's views, which are not inherently harmful, and just the idea that you don't want to have a toxic dumpster fire that no one wants to hang out in. I know plenty of right-wing friends, some of the most right-wing people I know, who said, oh yeah, I left Parler because it was a dumpster fire. So how can people who are building communities on these private, smaller degrees think about that?

I think you want to plan as much as possible or be explicit as much as possible in your code of conduct of what you will take, uh, and what you will not take. And you want to screen, uh, early on for it. So if you, you say, hey, you know, we're going to invite speakers and we're not going to, um, you know, cancel them, uh, we're not going to disinvite them, um, for XYZ reason, you should say that to your community members when you're interviewing them. And if, if they, you know, are on board with that, they, you know, maybe even have them do a pledge or something Then you have an explicit agreement. I think what's challenging, and you can't plan for everything, but is when you, you don't plan for stuff and you, you know, have misaligned expectations, and now you're at the whim of your users. So I try to be as explicit as possible early on so that you prepare for it. A good example here is Substack. They released a post a few weeks ago where they basically said, hey, we're going to have a— and I like this approach too— we're going to have a federalist approach. We're going to enable writers, the many communities that we have, just to set their own rules. We're not going to set from the top. They did this preemptively because they know that something is going to come up and they can now point to their rules as opposed to where Twitter and some of these other places are, which is they're making up rules on the spot. That's when you really lose trust.

Totally. Last thing before we get to present day, I love this story. Your previous first company before Product Hunt, before Village Global was wrapped. It was, and correct me if I'm wrong, like chat roulette-esque beatboxing. Not beatboxing, like rap battles and everything. That'd be the lamest beatboxing. That'd be the lamest company ever. But what was so interesting is obviously, like, no offense, you know this, it didn't quite work out. But what's crazy is when I heard you talking about it on a recent podcast appearance, you think about this and you're like, wait a second, Before TikTok became an actual company, it was Musical.ly, which was frankly, I think, a lamer idea than rap battles, which was— not that rap battles are lame, but a lame idea from my perspective is lip syncing. And it obviously didn't work out. But once you took that platform and attached TikTok's algorithm to it, it became the biggest thing ever, separate from the geopolitical debate there. So how, as you look at that space, do you just think about that experience? And that's a combination of You went to a market too early. The world obviously wasn't there in 2012. There was no magical algorithm to fix those issues. How do you just think about that space?

There's a few things there. So Marc Andreessen has this line where he says, there are no dumb ideas, only ideas that are too early. And of course, there are some ideas, dumb ideas, but the ideas that people ridiculed in the internet bubble in '99 or early 2000s, Pets.com, Webvan. There were a few others.

Home Grocer. I was a Home Grocer house. That was my thing.

Exactly. These were massive failures. Today, they're all unicorns. Similarly, Wrapped.fm didn't work out, but interactive social video— we were also experimenting with patronage models at the time. It was just too early. It was earlier than Twitch even, but then of course, Musical.ly and and TikTok. And in terms of, you know, how to think about when you might be too early, I think, you know, these are hard to predict, but my line here is, if you're younger in your career and you're starting a company, you want to take more market risk than execution risk. When you're older and you're more experienced and you know how to build companies, you know how to build teams, and you can raise a lot of money, you want to take execution risk, i.e., do something that, you know, if you execute, you know will work. when you're younger, or when you're less experienced, and don't really have unfair advantages, you want to have the arbitrage of willing to do things that other people think are dumb, or think are too early, or think are not ready yet. And sometimes that gets you into this, hey, you're building VR, and it's way too early, and it's been too early for 30 years now. But sometimes you get into Bitcoin, or you get into crypto, you start Coinbase, and you're multibillionaires. So that's some of my advice there.

Yeah, I think that's amazing. I mean, I guess this gets to what you're doing right now, because I'm fascinated by the backstory of this company and heard you talk about it previously, which is On Deck. And you were saying, you're like, this is not the way that you're supposed to start a company. And fitting with our realignment thesis, just go tease that out a little bit, which is that, look, a lot of our listeners may not even have any experience starting a company. Many of them don't or just look outside looking in on venture capital, what is the traditional way that you're supposed to start a business? Then talk to us about how you started that business within this funding model, and like why it's exciting, where it's taking us, and what that actually means in terms of a disruption in terms of how companies themselves get formed.

A big realignment that happened in how startups get off the ground is that it used to be the case where before AWS and before all these tools, it was really hard to build the technology. It was really hard. You needed to raise money in order to even see if something would work. And so the biggest question investors would ask is, could this be built? And really important people to build the company were technical people. And Paul Graham had this arbitrage opportunity in 2005, where he identified that he could teach young technical people how to do business, and that they could build enormous companies. And he was right. And it's led to Dropbox, Stripe—

Airbnb.

Airbnb.

Airbnb. Massive company.

Amazing. All these amazing companies. And so what's changed over the past decade or so is that the cost of getting a company off the ground decreased rapidly. And so everyone could ship a minimum viable product or a beta or an early version of it for free, or without raising money. And so now the question became not, can they build it, but will people come? Will users come? Can they hire a team? And so what happened was that the arbitrage was no longer the technical founder to teach them how to do business, but it actually flipped into— now it's the business founder, or the person who understands a deep domain, I should say, insurance, healthcare, because software ate the world, Marc Andreessen's famous line, it ate a lot of the things that everyone uses, social networks, search engines, it's sort of like a lot of our public infrastructure. And now it's eating all these different domains. It's eating fintech, it's eating healthcare, it's eating real estate, education, a lot of these highly regulated spaces that require a lot of expertise. And so now the archetype of— and this relates to On Deck— the archetype of a founder is somebody who has that domain expertise. That's the scarcity now, and can build, you know, via no-code and other tools, can get something off the ground. And where that relates to On Deck is because On Deck basically started out as something of a founder school. It started as a community for people. It was sort of like, think of a Y Combinator before people had companies. And so we would take a lot of these people who always wanted to start a company, but never, you know, knew exactly how, or never thought that they could because they weren't technical, and either A, pair them with technical people, or B, you know, help them get the tools that they need to get an early version off the ground. But to your specific question of how we got the company off the ground, it was a side project. And because you can get things off the ground cheaper, you also don't necessarily need to be full-time on them. to make it work. It was a side project. I wasn't full-time on it for a couple of years. It emerged out of a community, an organic community, and we're seeing that a lot more now where people— Product Hunt also emerged out of a side project that started to get momentum, and then when it did, triple down on it. But yeah, that would've been inconceivable in the past.

A quick side note that I want to hit because I love the example of The early— the late 1990s period where the infrastructure wasn't built, because it brings up the famous British Railways example, which I'm pretty sure you probably know, Erik, which is people look at the dot-com bust in 2000 and say, wow, Pets.com. There's actually 5 different pets websites. So there was a real genuine example of a bubble there. But you had Expedia, all these companies that just weren't ready for prime time. Everyone IPO'd too early. It didn't work. And you could just look at that detail and say, wow, what a terrible failure. All these resources were misallocated. We don't like venture capital. But what ended up happening is all of the services and all the companies that were actually supported during that period, it effectively built the modern infrastructure that the next wave of tech was supported on. So the reason why Google was able to build the way it built, the reason why Facebook is able to build the way it built, the reason why the cost of running a server was able to collapse was the infrastructure was still there. And the example historically that people bring up is during the 1840s in the United Kingdom, there was this railway boom where everyone was obsessed with overinvesting in railway, huge bubble. It burst. It's a total disaster if you got in on the railway stocks. But at the same time, afterwards, the British had an amazing railway system, which helped fuel the Industrial Revolution. So as you look at those historical examples, how do you think about Because once again, this is something we're interested in at The Realignment. How do you think about the interplay of history and business and politics? Because the more you dive into this stuff, the more you realize it's really tied together.

You're absolutely right. And it's interesting because in 2016, 2017, we had this ICO boom where all these crypto projects— What's an ICO? Initial coin offering.

You are basically our first crypto-centric guest other than Balaji, so you're going to have to do a lot of editorializing on everything.

It was a way for people—

think of like crowdfunding for people who got crypto rich. It was a way for people to diversify their crypto assets without having to pay taxes on them. That's sort of one way of positioning it. And what happened was, you know, tens or hundreds of millions of dollars were— maybe billions— a lot of money was raised to and put into crypto projects before they even had— it was just off a white paper. Hey, if Bitcoin is now worth $1 trillion off a whitepaper, maybe these projects could be too. And so as you can imagine, it attracted both 1% of the diehards and 99% of the scammers. And so a lot of people lost a lot of money. A lot of projects didn't end up working out. And what I hope there, to your example— and Carlota Perez has some great stuff on just sort of the cycles of infrastructure— is that what we get there is, while there's a lot of failed projects, it'll be a lot of infrastructure that has been layered, such that 5 years from now, 10 years from now, there's not just a boom on the currency side, but on the true decentralized internet, on the browser level, from a social media perspective, at just every layer of the stack. So yeah, these things are all connected. And it goes back to the the saddest words in language being Balaji was right. What Balaji is most influenced by is The Sovereign Individual, which is this idea— it's a book, and the main thesis is that the individual is going— because of technology, people are going to become a lot more mobile, and people are going to become able to defend themselves a lot more and protect their money, protect their identity, And what's going to happen as a result of that is that governments are starting to— politicians will compete over their citizens, treat them like customers instead of citizens. And when you treat someone like a customer, you have to serve them. You have to offer a better product, because you now have the threat of exit. We've had the threat of voice, i.e., voting, but exit has been hard. It's hard to move. Um, and it's, it's hard to coordinate with people. And so the cost of coordination has gone down. And again, you know, a couple years ago, Balaji was, was talking about this. He was talking about moving to Austin. Everyone thought he was crazy. I mean, people still think he's crazy, and he is a little bit crazy. Um, but you see this right now with Miami, right? You see a, a mayor of Miami going on Twitter. His literal question was, how can I help? That, that's how low the bar was to get Keith Rabois, and a number of people to move. Of course, there are better tax incentives in Miami. I'm sure that helps a lot. But we're starting— and we saw— I forget which politician, but someone in San Francisco say an expletive to Elon Musk. Get lost, Elon Musk. And he went to Austin. So we're going to start to see people become a lot more mobile, be able to coordinate Governments start to compete. As we think about being good investors, to think about what startups are going to emerge, you have to think about it, of how it fits in with where trends are going.

I'm glad you brought that up, Erik. It's a very interesting phenomenon. It's also been alight in terms of the Twitter discourse. I want to interrogate it, I think, from perspective of maybe some of our listeners who they see what's going on with the mayor of Miami, and they're like, you have our mayor who's like, outwardly soliciting a bunch of rich dudes who are online in order to bring into our city. And almost every time that this type of thing works out, you have politicians who make deals with these rich people and you give them tax breaks or you write some fake thing into the tax code and you end up with Foxconn in Wisconsin, which is like a fake factory and was supposed to deliver these tens of thousands of jobs and GDP. And it turns out just a bunch of people got rich. State regulators and this Taiwanese company. What do you think prevents that from happening with the end state of the sovereign individual thesis? Because when you say it, sounds great. You're like, yeah, everybody has to compete against one another. In practice, what does it look like? Amazon HQ2 and everybody just throwing as much tax dollars on the floor as they possibly can with no real indication that it's going to come crawling back. What do you think about that?

I think both things can be true. I think net positive, it can be, you know, better off for any city to get these people. I mean, I think— I don't know the exact stat, but I think it's something like in California, or maybe it's just San Francisco, like 0.1% of the population is responsible for 40% of the tax dollars.

Mm-hmm.

So, you know, I think both things can be true in the sense that, do I think these people are going to get enormous tax breaks and it's going to be a race to the bottom? Yes. Do I think that they will still contribute meaningfully to the tax revenue, and just talent coming, and other positive externalities? Also, yes. But I think broadly, I'm less excited, or less a believer, that there's going to be all these new hubs that emerge, or the next Silicon Valley, and more that just that everything goes remote, or I should say, a lot goes remote. And people live on the internet. And it is a little bit a race to the bottom, in the sense that these— they're going to compete over who can offer the best tax haven and other things. But also, they're going to be forced to run their organizations like businesses. So they're going to be forced to restructure, to be a lot more innovative, to be a lot more effective. And the best ones are going to be super lean. and provide their citizens better services as a result. So I think there's reason to both be pessimistic and optimistic as a result of that thesis.

There's so much there, man, and I want to tie this back to the conversation we're going to have about higher education in a second, but can you talk about how you conceive of citizenship? Because there is just going to be a bunch of people who are basically going to say, we're not customers of government, We're citizens of government, right? What differentiates government from a business is that, A, government isn't a business. The job of a governor is not to manage a profit and loss statement. It isn't to give a direct return to shareholders. It's to take a society, take a community, and basically provide the best outcome for the most amount of people or some combination thereof. So how do we balance that? Because My problem with what you're saying, because I understand the trend that's driving it, is I'm concerned there could be a degree of inevitabilism in this space that could reflect the way our debate about globalization. So for example, past 30, 40 years, we all went to school, we're living on the internet, recording this podcast online, we're really benefiting from this globalisation phenomenon. That system was really great for us. But a lot of people who are a bit older than us, we don't have to take personal responsibility for this, but people who look like us, talk like us, come from the same background said globalization is inevitable. We have to do NAFTA. We have to let China into the World Trade Organization. We have to do X, Y, and Z thing. And anyone who doesn't accept that reality just doesn't understand trends. They don't understand the free market, et cetera. Now, we can agree that the trend online is just there. Obviously, that's true. It's very hard to make the case, and I'm sure you're probably going to run into this with your portfolio companies. It will be harder for you to tell people, no, you have to live within 20 miles of me, given this dynamic. That's definitely true. But at the same time, there are a bunch of public policy choices that we could make that— There are a bunch of public policy choices we could make that if we assume this is inevitable, could end up really biting us in the ass. So for example, if we just think it's inevitable that this isn't going to happen, we couldn't have an honest conversation about exit taxes. So for example, if you— let's say like you're from New Jersey, so let's say you've been in New Jersey your entire life, you've paid tax, you know, you've paid taxes, you know, all these different things. You were supported by public infrastructure. You were supported— I mean, you went to University of Michigan. So to a certain degree, obviously you're paying out of state, but there was some degree of support from the state. How do we balance that, right? Because I think it's— I'm not a communist, I'm not a socialist. I don't think it's cool to say, Erik, you're moving, we're going to take all your money. But there is a dynamic there that if we don't have the conversation now, it is going to end in punitive, it is going to end in reactionary politics. So that's a lot there, but how do you just think about the overall dynamic?

Well, there's sort of 2, um, things that I think it's worth separating out. One is people talk about the economic, uh, effects of, of, of, of what's happening when they talk about globalization and people being, uh, left behind and how that leads to polarization. Well, I And I think there are certainly trade-offs there. A lot of people get ahead, you know, uh, uh, you know, uh, especially globally, uh, you know, and some people get left behind. I think it's, it's probably economically net positive, but we have to do something for the people who get left behind. I'm, I'm less sympathetic to that, that, that is the cause of, of, of all of our polarization problems, because I think, uh, a lot of our polarization problems are actually, uh, the elites arguing amongst each other. It's people who go to Harvard and Yale. It's sort of the, the 1% versus the 0.01%. What I'm more sympathetic to is this idea that Patrick Deneen's argument of why liberalism fails, which is basically that it becomes a victim of its own success, that if we all start to view each other as customers, effectively, that means that we all view each other as independent. As a customer, you don't owe the business anything. What that leads to is you know, no more dependence on, on, on people, and thus no loyalty, and thus, you know, we just increasingly become atomized and fragmented and, and individualized, and, and, and don't, you know, sort of— and that explains a lot of our, you know, loneliness or anxiety or just loss of community. Um, so I think we do have to straddle this line of, of citizenship, of customer versus citizenship. Customer in the sense that, hey, um, Clean the poop off my street, right?

Like that sense.

Exactly.

Please.

Make it a safe place. Yes, exactly. But citizenship in that we are part of a community, and we should take care of each other. And there's this— I forget who has this distinction between sort of the somewheres and the anywheres.

David Goodhart.

David Goodhart, yeah. Exactly. And so I don't think economically— I don't think exit taxes is the way to do it. And I think that's only going to accelerate the sovereign individual. I think it's more hearts and minds. I think the challenge with San Francisco is that San Francisco is in a tough place, and California more broadly, where the people that are funding it, they're calling extractors and exploiters. Zuckerberg's $75 million donation to a hospital, I think it's like the biggest one, and because he had his name on it, they call him extractor. You're not going to win hearts and minds by demonizing rich people and thinking that we're in this conflict theory that when someone gets rich, or a company gets rich, it's at my expense. Going back to crypto for a second, one of the things I'm really interested— crypto has this idea of tokenization. Let me zoom out for a second. When the corporation was invented, the big innovation there was instead of one person owning the entire company, you now had hundreds of employees who could have shared upside in the company's success. And that's just transformational. So instead of one person getting rich, you have hundreds or thousands of people getting rich. What crypto wants to do is also give the users upside in the company. And so when we think about Facebook and Twitter, these are data products, right? If you go on there, you have a big following, you have helped make— add value to that product. you've added data to it, and you don't see any of the economic gains from it directly. But maybe you should. And not from a top-down regulatory perspective, unless it's like, let people transfer API keys, but more from, they should incentivize you to want to contribute more, reward you from contributing to the network. And imagine how much more companies or people would have appreciation for these companies if, when they got rich, they got rich too, or they saw a shared upside in that. And we do have it a little bit. Like, right now, it's too sort of indirect. Like, it goes to taxes, which then goes to their services, but they don't connect it to, hey, you know, Jeff Bezos, whoever, you know, helped pay for this service that I use. They're outside with a guillotine at Jeff Bezos' house thinking that, you know, he took money from them. So I'd more like to tie it, whether it's tokens— and that's something that crypto is thinking— or if there is some version of UBI in the future, that it's tied to the stock market, because we want to have a greater appreciation for how wealth is created. We want to put people on the same side instead of thinking that there's this zero-sum relationship.

Yeah, I think aligning the incentives is the most important thing. It's interesting, you're talking about citizenship and customers. I mean, one of the areas where the customers, AKA people, have been completely failed here, and where you're really focused on, is higher education. This is something you're working directly to disrupt. I mean, let's talk here just terms. I'm sure most of the people here who are listening to this podcast are not satisfied with the higher education system or with their own student debt or with their own having gone through the system. Just lay it out on a macro level, what can actually be done about it from your perspective, a more free market perspective, and what have been the structural problems as to actually doing anything up until now?

Quick thing before you answer those, can you just define the problem in higher education from your perspective? Because that's, because that's where the debate comes in from the start. But so can you define the problem and then get to Sagar? It's all—

you could just probably restate those.

Yeah, there are multiple problems. The, the ones I like to focus on is that it's too expensive, and it is just— and the expenses are rising. It doesn't prepare people effectively for the labor market, and it— so it's not serving one of its value props, and it is too monopolistic and basically serves as a cartel that affects competitors from entering. So too expensive, not helping people get jobs sufficiently, and it's a monopoly.

Okay, so what caused those problems? What is the cause of those problems, and what's your solution, and what are other solutions?

So basically on the— I'll start with the, the getting jobs. We have a problem where many— basically what happened was credential inflation. Everyone thought that in order to get a great job, you had to go to college, but there weren't enough great jobs that required college degrees to serve everyone going to college. 50% of employed college graduates got jobs that required a college degree. And only 37% take jobs that required even a high school degree. So just to paint a visual, there were 100,000 people in 2010 who took a bachelor's degree who became janitors. There were over 5,000 with a master's degree who became janitors. Obviously, you don't need to go to college to become a janitor. And so we've told people that college is this insurance, that you need to do it in order to get a great job. And what happens is we're not having enough great jobs to overcome it. And because there's not enough interlocking between what people are learning and what the job market is requiring. And so we're starting to see the unbundling. I mean, if you think of college as a bundle, it's education, it's network, and it's credential. We unbundled the education, you know, a decade ago with MOOCs, with online courses. But you still left the network and the credential. What we're starting to see is— we'll get to COVID in a second— but is job-specific courses. My friend Scott Belsie calls this edu-ployment, which is combining the education and employment into one. So you're starting to see things like Lambda School, which help people learn how to code and then get them a job. This is the rise of boot camps. And you're starting to see that for not just code, but a bunch of other sectors. Learn how to do sales, learn how to do growth, learn how to do marketing, learn how to do skills that employers want. And I imagine pretty soon we're going to see Facebook or Google or some of the— Walmart start to have their own boot camps or their own— build their own pipeline where people can say, hey, you know, if I can get into Harvard or Stanford, I'll go there, but if I'm going to some, you know, tier 3 university, I might as well just go to Walmart because I could just Walmart U. I could guarantee that I'll get a job. I can get the liberal arts on the side. So we're starting to see a great unbundling, but what we're realizing is that the unbundling by itself didn't work. Like MOOCs didn't work because completion rates weren't high enough, and you wanted to go to parties. You know, college is a bundle of a bunch of other stuff too. It's social life, it's coming of age, it's relationships. And so the winners are going to be people that rebundle. the uses of college. And so we started— Andeka started on the career element, but I could see us over time, or pretty soon, doing a liberal arts component, or even a school of life component, so that we could start to just rebundle some of the things that people get in their college experience, do it for a fraction of the cost.

I want to know how you solve a problem that comes up whenever people talk about credentialing, and I sort of call this the HR problem in the sense that if you apply for any job, we could talk as much as we want about how college doesn't necessarily indicate education. There could be— you did some interesting writing about how as schools eliminate testing requirements for the SAT, there's a possibility that that could actually weaken the degree as a credential because there would just be no metrics that anyone could outside that anyone could assert from the outside, et cetera, et cetera. All those ideas are important. They matter. What always stops me is that if you look at a marketing firm in the middle of the country, somewhere totally random, at the end of the day, if I apply for a job and I have a degree from a university, and there's a person who doesn't have a degree but has taken various MOOCs, has thought about problems in different ways, has a really great Twitter account, I am still probably going to get chosen under this scenario because the HR manager, who's a 30-something person who is busy, doesn't have time to think about the big debates, is always just going to choose the credential. So within that dynamic, how do we think about solving that bottleneck? Because that bottleneck doesn't exist at Google because there are various cultural reasons why that's just not there. And in tech, it's certainly cool. Naval had this great tweet where he said, the smartest thing you should do in tech is you should get into Stanford University and immediately drop out so that everyone knows you got into Stanford, so you're smart, you were a hard worker in high school, but you don't have to actually pay any money for it.

Yeah.

But that doesn't exist in the middle, it doesn't exist in the bottom, and it doesn't exist in most of corporate America. So how do you think about solving that basic HR credential problem? Because I know you've written a lot about peer-to-peer credentials, different things like that.

Well, that was my tweet, actually. I said Harvard. Maybe Naval did it too. Me and Naval, same thing. I love that you brought up credentials, because I mentioned the education has been unbundled, the network is starting to be unbundled, the credential is really the last thing that's just so hard to unbundle, and it's so powerful. We saw this with COVID right? Before COVID you could sort of tell the story of all the sort of bundle and things that were happening at college, and that's why it's worth a quarter million dollars or more. But in the era of COVID where everyone had to sit home, there was no networking, it's literally Zoom university, and it's still the same price. You're still paying a quarter million dollars for a piece of paper, because you'd actually probably rather watch YouTube than what you're— the best professor in the world than the one that you happen to have, and their talks are free. And so That has sort of shown, hey, I'm really just paying for this piece of paper. And the piece of paper is valuable. Like, we have to bow down to it. But what we started to see over the past few years is just stabs at it. It's sort of like Craigslist. You know, the unbundling of Craigslist happened by death by a thousand cuts, by thousands of companies taking, you know, unbundling little elements of it. And we're starting to see it in credentials, you know, GitHub with coding, for example. Behance with design, and it's not going to be for every single one, but we're starting to see, you know, unbundling for skill-specific ones, and I think that's pretty powerful. But what I'm most excited about is peer-to-peer credentials, because, you know, when people make hires today, you know, they'll look at school, but the biggest thing they look at is references. If you get a bad reference from someone, boom, you're out. If you get a great reference from someone who they trust, You're in. And there's this trope that Silicon Valley only funds the Stanford kids, but if I were to ask either of you which person under 25 is going to be the next big thing in tech or in media, I would much rather follow that person than someone who tells me that they went to Harvard or Stanford. And yet that information is not legible. It's not on the internet. It's not explicit. I don't want to go through the 1,000 people that you follow on Twitter to find— I want to say, who are the people that you really believe in? And so I have a vision. I want to build it, or I want to see someone else build a peer-to-peer credential platform where people could say, hey, this is my person. I sort of want to bet on this person, bet my reputation. But also, maybe there's some social or actual physical currency, like speculation, that you can do that— I don't need to get into the logistics of how that could work— that would incentivize you to identify really talented people early on. And this dovetails well with ISAs a little bit, because right now people are—

Income Share Agreements.

Income Share Agreements, thank you. Because people are paying this upfront huge fee to go to college and then hoping they get a job afterwards. But you can imagine a crowdfunding— for people who know what they want to do, you'd say, hey, instead of Why don't— can I just raise money for this right now? And it doesn't have to be venture capital. It could just be an income share agreement where I pursue this art project or pursue this podcast or pursue this— that ties to the creator economy. There's just so many more ways to make money on the internet. We need to make more ways to raise money on the internet and to signal value of who's really impressive on the internet. So again, this is not going to happen tomorrow. It's not going to happen next year. It's going to be death by a thousand paper cuts. but over the next decade, you know, I think the fine university— the best universities will be fine. The, um, the, you know—

If you get into Harvard and you could pay for it, you should probably still go. No one's saying don't do that.

Yeah, yeah. But if you're thinking of doing art history in some, um, you know, tier 3 school and you— it's— and you think you'll get an amazing job after that, you know, maybe just, just talk to some people, you know, think about it, think about some other things you can do. If you do go to tier 3 school, maybe, you know, learn how to code. But yeah, I'm very excited for credential to be unbundled.

So then the last question on this topic is, what do you think about the people who are getting screwed over by the current system? Because everything we're talking about, peer-to-peer credentials, great idea. As you said yourself, you're thinking about building this, you want someone to build it. So that's not coming into the table for a while. What do you think about something like student loan forgiveness? What do you think about the role that government plays in this? Because the example I always think of is, After the Great Recession, a bunch of states cut funding for higher education. So what that meant is in their states, if you were an in-state tuition attendee, which I did at the University of Oregon, you actually had to pay a lot more money. So as I think about this whole debate about the future and technology, I think, hey, at a baseline level, you probably could just restore higher education funding to what it was in 2007. I'm pretty sure in a lot of states post-COVID, you're going to see a lot of cuts to higher education further. So how do you think about the balance between people who are in the current system or have graduated and are screwed, especially if they didn't graduate? Because that's the worst position to be in. It really sucks if you went to school, you didn't get a degree because no one cares about half degrees and you have all this debt, or you're someone who's about to go to college next year and you're thinking peer-to-peer is great, or Senator Erik could just like either make it so my student loans are discharged in bankruptcy, or we could raise the amount of money the state puts into— a state university, even if it's a second or third tier, because we get dunked on the third tier state schools or third tier private— actually, let's skip the third tier private universities, never go to them. But there's a world where a random, random, random third tier state school, if it's cheap enough, makes a lot of sense for you. So how do you think about that?

I, um, I don't know enough about student loan forgive— I don't know about student loan forgiveness because I, I think it's unfair to a lot of people who've paid their student loans. And I don't know how to reconcile, uh, you know, that and what to do there. I do know that we need to make sure that this doesn't happen for the next generation. And so what government can do is sort of like— I don't mean to be glib, but sort of stop making it so difficult to innovate for us to lower the costs. You know, uh, healthcare, housing, and education are the industries that costs have been rising dramatically, wherein many other sectors where government isn't involved or isn't sort of serving as a blocker, costs have gone down. And so you were asking, why is this the case in education? There isn't innovation in education. You know, we were talking about Facebook and Apple and all these other companies being monopolies, but they get disrupted every 40 years kind of organically because government sort of gets out the way. On the university level, you know, the last entrant into the top 10 or even top 50 maybe was, I believe it was Stanford, and it was founded over 100 years ago. And so Um, and the reason why is because, uh, they choose who can be an actual university. There's an accreditation process, which has a good intent, i.e., we don't want to see Trump University or, you know, all these crazy—

That's the most political statement we'll get from you the entire episode.

Exactly. We don't want to see all these crazy things. Um, but you're— you, you are making it so difficult for well-meaning entrepreneurs who are very talented to create competitors. And what happens is regulatory capture. It's in their interest not to let competitors in so they can continue to rake in the profits. And why disrupt yourself if no one else is going to disrupt you? And so the accreditation process is something that I think if that were changed, we would see a lot more competition in education. And what we talked about when, you know, a monopoly doesn't care because it doesn't have to. When you have competition, people are— it filters out. The best ones rise to the top. And the customer gets the best experience. The students would have better experience on the— but that also happens in healthcare and housing. In housing, we have a massive structural shortage, right? For the last 20 years, we've seen, you know, go down from 11 million units to 7 million units. There's something like 17 million people who can't afford housing. And in healthcare, nearly, you know, half of Americans have $2,000 in liquid assets, yet deductibles are something like $1,500, $1,600. So any healthcare issue means you're basically financially ruined. And what we were talking about earlier, when software ate the world, the best entrepreneurs often go to the place that has the least red tape. Now it's changing because we've already, like, covered a lot of that. But if you make it easier to innovate in education, healthcare, and housing, you lower the costs while having better product. And then the next generation doesn't get into debt, and it doesn't have to, you know, get wiped out by these— these 3. Again, this isn't happening anytime soon. There's no political will to make it happen. So I think we need to do it from a cultural perspective. We need to lessen the pressure to go to college if it's not the right thing for you. And we need to teach people to be more mindful with their expenses and put more pressure on governments to innovate on this stuff eventually. I know that's not a short-term answer, and that's not a one-size-fits-all approach, but it's going to take a number of things.

Yeah, it definitely is. This is about as libertarian as I allow on the podcast, just so you know.

I want to make clear, I'm not a libertarian. Libertarians, while I'm sympathetic with their ideas, they always lose, and there are structural reasons why they lose. Live and let live is not an inspiring enough philosophy, as opposed to win and help win. Or if your whole ideology is non-aggression, and someone is aggressive towards you, you're going to lose. I am a believer, furthermore, in state capacity, and in Tyler's idea of state capacity.

Tyler Cowen.

Yeah. And what I would like to see is the state working in conjunction with the free market and private enterprises to give the best solution, because there certainly are externalities that the markets just don't take into account, or market failures that they just don't have ways to solve for. And so a symbiosis is where I stand there.

No, the last thing I want to get with you is media, because obviously this is where we are at. A lot of the same dynamics also apply to what you're talking about. It's a pretty rigid industry. It's rigidly, in terms of how it functions on television, cable television, and more, highly regulated, large behemoth corporate monopolies. But then we also have things like this, tens of thousands of people are going to listen to this, or You know, whenever I do Rising, like a lot of people will still watch that. On the alternative and on the margins, there are things that are emerging which tell us something is going on here. From your perspective, where do you see that going? Because I kind of have this, I'm of two minds, which is that of one mind, Ben Smith at the New York Times wrote this great profile of Cameo and more where he was talking about how the future celebrity in America is not like a celebrity to everyone outside of people in the movie business. They're celebrity to you, as in most of the time I walk down the street and nobody knows who I am. But like every once in a while, like once a week or so, somebody's like, oh my God, I love your show. And it's like, that's really interesting, right? So like to every maybe like 1 out of 2,000 people, you're someone who they really, really, really like what you do. Now that's great from a subscription model and all that stuff, but in terms of wide culture and appeal, that actually has a lot of downstream effects. So how do you see the future of that industry, whether consolidation is even possible, and just broadly, societally, what that means for all of us whenever it comes to media?

Yeah. So the broader trend here is basically that it's got— the cost of creating media and of distributing media is lower than it's ever been and is basically going to zero eventually. So what that means is that you can find someone who speaks exactly to you. There's no sort of compromising, exactly to you. And that there's riches in niches, as the saying goes. And so there's— Kevin Kelly had this phrase, the Wired founder, he said, 1,000 true fans.

Yes.

Where if you have 1,000 people paying you $100 a month, you can make a living— sorry, a year as a creator. Li Jin has this idea of 100 true fans, where you could have 100 people paying you $1,000 a year. And it really just goes to show that, as we were talking about earlier, the future is these private niche communities that conform, you know, that most customize to what you want.

Mm-hmm.

And so I think we're only going to continue to see that. I think we still need to increase the ways by which these creators can monetize. and the ways by which they can raise money and not just sort of have a cash relationship, but also have an equity relationship. So I think we're going to continue to see the unbundling of creators, especially from media organizations, that if they're creating undue value, right, they're going to say, hey, I'm not paid enough by this organization. I'm going to unbundle and then after recreate some elements, if they're entrepreneurial, of what this organization served to me. But what we're going to see basically is whoever captures the value— or sorry, whoever creates the value is going to find a way to capture the value. Whoever is responsible for user demand and user loyalty is going to find a way to better reorient the value chain such that value creation and value capture are more aligned. So that's sort of where I think about in the business perspective. And I think it turns out people have wanted to hear from individuals more than they've wanted to hear from institutions.

Yeah.

Just decades ago, it was just harder for an individual to, uh, you know, one, get an audience, and then two, sort of recreate the functionality that the institution gave them. But this sort of goes back to the sovereign individual point, where now it's easier, and that will exist. So that's the business side. On the cultural side, I mean, as we mentioned, you know, people talk a lot about, you know, fake news. Really, it's I mean, when we had 3 channels, it's not that everyone agreed all the time, but everyone had the same coordinates by which they could even have a disagreement.

Yeah.

Now, everyone is watching different— is having different coordinates, so they can't even have a conversation. They can't even agree on what happened, let alone agree on an interpretation of what that means or where that's going. And I think that's only going to continue. People are going to What these content creators are, are really reality entrepreneurs that are offering you the version of reality that you can opt into. And in the COVID era, like, no one knows who to trust anymore, what institutions to trust. People are desperate for having a reality that makes sense to them. So I think it's only going to contribute. My friend calls this kaleidoscope theory, which is this idea that culture fragments into thousands of shards, Each culture plays out its own fantasies alongside the other cultures. The result is skyrocketing innovation at the cost of shared alignment on anything. And it's a trade-off that could make sense as long as it doesn't lead to complete chaos. And then it sort of begs the question—

TBD. Hardcore TBD on the complete chaos point.

This week is going to tell me that kaleidoscope theory is bad.

Yes. Yes. The, um, you know, there's this, uh, great quote somewhere. It was like, is all this stuff gonna make us happy? And the, the person— all this innovation— and the person responds, no, no, no, you'll be unhappy, but you'll be unhappy in new and creative ways.

Yeah.

Um, and it sort of begs the question, like, did we— what about shared reality? Not just shared coordinates, shared reality. Didn't we have it? And, and it's unclear. You could answer it, no, we had a shared myth where everyone is under the same delusions. But this goes back to Martin Gurri's sort of revolt of the, of the public. In the information age, you can't keep up the delusions anymore. You can't control the narrative. There's all these competing narratives, all of which have shards of truth to them. The more information there is, the more arguments over what's true. So I, I don't see alignment happening in broad-scale ways, but I do see people finding their own private communities to speak to them and find meaning to them. And what really we need to figure out and help them find meaning is how to make these interoperable, how to make them so they don't cause conflict among each other, but find other common enemies. Maybe the joke is alien invasion or something, other things that they can cohere around, even if they have different senses of reality. That's our big challenge.

No, and I love that you brought that up because the weakest area in the creator economy, because of the niche, dynamic is just the echo chamber. I had Erik Weinstein on the podcast last episode. It's not exactly easy to argue with Erik, so I will argue with him now that he's not here. He's talking about the alternate media of places like the IDW. The reason why it's not a true challenger to the mainstream media yet is it's just an echo chamber. It only speaks to itself. There's only so many times that you could bring the same set of people on the same podcast to bring the same conversations, the same topic. You only get so in-group. And in many ways, the dynamics of the creator economy with the whole idea of get your top 5 to 7% of people to pay, get your top most intense listeners engaged, that will not encourage you to balance the art of how do we speak to new audiences, how do we have our private community, but how do we also, to your point, interoperate?

It's interesting. When we only had 3 channels, that was obviously a big— there was just one echo chamber. And what happened is you now have a lot of these others. And they certainly don't talk to each other, or as much as they should, per your point on the IDW. But what's interesting, I think the, you know, but there's a reason, like, I think Eric Weinstein would say, hey, I'd be willing to go on any other show, I've just been iced out. And so sometimes people talk about the filter bubble problem, as though it's the worst thing that's possible. Although, in my opinion, what's worse is just total ideological uniformity. And so I've learned to maybe celebrate the fact that there even exists different bubbles because they didn't necessarily used to. And especially in this censorship world, you can imagine a world where they're snuffed out and everyone is forced to think like China doesn't have ideological filter bubbles.

So nearing the end of this, what I have to ask is, you have done multiple podcasts in terms of hosting them. You're here. I'm really enjoying talking to you. We get constant comments from our listeners about how do I start a podcast? How do I start a newsletter? You also have an excellent Substack. This is also something, you know, you and I are thinking about and working on at On Deck. So we're asking this to basically every creator we bring on. How would you advise people think about building in this new media space, especially if they're new? Because my last bit on this here is that I'm incredibly frustrated by the fact that too often the people who succeed in these new creator economy spaces are people who are already big somewhere else. So for example, Stir did this, and Stir is also somewhat that comes from the On Deck space, when they did this really cool pre-subscribe drop. So it said, who are people who people would pay money to if they left their existing institution? That's really exciting. There could be a world where you could see that leading to a lot of interesting new voices, but all it really meant is that the top 4 or 5 writers were at the New York Times. So there are people who've been blown up over 10 years. The New York Times has a massive audience. If the New York Times is seeking to compete for the top people, if Barstool is trying to get the collar daddy types to stay and not leave, what they will tell people is, we will get a billion people to see your face. Saagar and Jettye, I work at Big Media Corp. Wanna be effing famous? I will make you effing famous.

Yeah.

You don't have to just have your 15 minutes. That's always gonna be the bit that works there. So as you're answering this question, just think about What is the 20-year-old who— and you know who you are because you DM and email us a lot— who is just a random college kid who isn't going to a no-name school, isn't going to a named school, who wants to build but isn't going to have the New York Times or Rising or The Realignment or On Deck to back them up when they start?

Just as inspiration for that kid, that 20-year-old kid, check out this history YouTube channel called What If All This Tea? We can put it in the show notes. It's just a sophomore at college who's built up this business on this, and he might drop out for it, teaching people how to do— or just teaching people history, just explaining his passion to people. And he's not the best historian in the world, but he's super dynamic as a speaker, and he can break down really complicated concepts. And so, and one thing I would tell that person is, look for role models, look for examples of people who are doing what you want to do, and see how you could bring your own spin to it. The other thing I'd say is, we were talking about MOOCs earlier. The reason they didn't work, people didn't complete their courses, is because they didn't have accountability. And so what we're doing at On Deck is combining the benefits of MOOCs, which is learn at your own time, don't pay a hundredth of the price, but combining also the benefits of college, which is accountability. Like, you have to do this thing or you will suffer public shame, and you've set a goal to it. So we have our fellowships that combine those elements. Marshall, you're helping us lead the podcast fellowship. We have the writing fellowship. And what they serve is not just accountability, but constant feedback. And so I think in the same way that you go to a— you either have a personal trainer or you go to a boot camp to make sure you get your workout in, for many people, join a program like that. If you want to get a newsletter off the ground, or if you want to get a podcast off the ground, want to go from 0 to 1, or you want to go from 1 to 10, whether it's On Deck or something else, be part of a community that you either make or you join of people who are going to push you explicitly, directly, but also indirectly, uh, just by their example. You know, I, I love going to boot camp, seeing people just like run faster than me on the treadmill or whatever it is, and I got to go faster. Um, so yeah, I would look at what examples exist out there for inspiration, um, and then I would, uh, I would join and be part of a So last question, this is totally random.

Seriously, everyone, I cannot recommend Erik's podcast enough. My favorite episode you did recently was about the past, present, and future of the NBA with the head of IMG Academy, which I— we could have another period someday when you talk about your nascent NBA career, because I think that's, I think that's, I think that's really interesting and, and, and just really compelling on the ambition side there. But you mentioned this idea of what would it look like if the NBA or other leagues were set up so that players actually owned equity in the teams, in the league? Because that's an application of the idea that we're looking at with the creator economy. Because the key thing with the creator economy, what matters there is that value is moving from technology to brand down to the actual person. So Sagar, with Rising, it used to be 30 years ago, The value was first with the cable network, the actual distribution of the cable cords across the entire world, the satellites. That's a billion-dollar business. Then as that gets cheaper over time, it's all about the brand. It's The Hill versus Fox versus the Washington Examiner, et cetera. But now it's basically you. Now it's basically, can Saagar get people on Patreon or Supercast or any of these cool new programs? Can he sell out on Cameo? All those sort of things. You applied that idea a tiny bit to the NBA. I want you just to expand on it for a second because A, it shows that you have a pretty expansive dynamic thought here, but it's also an illustration of the fact that as we're thinking of what skills can you develop as a podcaster, it's the ability to bring in different concepts and apply them to different areas that you wouldn't have thought of it before.

Right. So, and what Marshall's talking about is about my NBA career is that LeBron called me, you know, about joining the Lakers and I told him I'm too busy with On Deck, but maybe next year. No, I wanted to be a coach at one point. But this is really fascinating because if you take one thing from this podcast as it relates to creators, it's this idea that whoever captures user demand or customer demand is going to capture the value. And a lot of our industries, music, books, others, there have been these middlemen, that have taken too much of a cut, and it didn't accurately reflect the, the value creation, right? We even see it in tech. Founders used to get really terrible terms from VCs, and now VCs are— you know, the joke, the meme among VCs is they always say, how can I help you? When it's actually— it didn't used to be the case. It actually— VCs treated founders like shit. But founders, they, they, they get the customer— they could have customer demand, and so they are in charge. And now every year they're getting increasingly better valuations. Just more and more leverage. And we see that it hasn't fully happened in music yet, but it's going to happen. It hasn't happened because record labels own catalogs. But, you know, more artists— right, more artists are going to be in control of their catalog. Whoever controls customer value is going to capture it. And so anytime there's the talent or the stars, they should be— over time, they will increasingly become owners. And so we see this in athletics, too. I mean, Michael Jordan, he made way less money than he should have made based on how important he was. And so we see Mike Conley getting a $150 million contract or whatever. The players are getting just more and more leverage, but they're using it on salary negotiations. What they're not using it, as far as I'm concerned, or as far as I know, is on ownership itself, is on equity in the business. And so if LeBron James said, hey, I'm going to start a new league, where the players own a majority share of the equity. This is the thought experiment. Could he bring a few other players with him and now restructure the entire thing? Now, LeBron probably doesn't want to build a new NBA from scratch. What he would do, maybe that threat would bring the NBA back to the table and say, okay, we'll give you anything if you stayed. Actually, the most interesting businessperson here, this is a bit subculture, but is LaVar Ball.

Yeah.

He's the Ball brothers' dad, because he's doing it both on the league level, I think, in sort of his minor league experiment, which was very interesting. But he's also doing it on the shoes level, right? Because, you know, how much— who made more money off of Jordans, you know, him or Nike or whoever?

Nike.

Yeah, exactly. Whereas Jordan should be making way more money.

He's literally the silhouette. That's the most individual thing ever.

Exactly. The capacity to provide supply— this is the great realignment. This is what Ben Thompson at the Stryker E-Bog talks about, whereas controlling supply used to be the most important thing because distribution was limited. What happened was with the internet, distribution became unlimited. Now anybody could reach anybody, you know, at any time, and what was the scarcity was now distribution. Who can control demand? And so that has realigned so many different industries, and they're still early in their realignment, but if you look at any industry and you look at who owns the customer demand here, that person or that group should have equity, should have ownership, in the underlying asset, and so should share the majority of the profits that come from it. And so in the NBA and in other industries, we're still early on it, and it's going to be exciting to see.

That's such, such an important concept. That's literally where the world is trending, so I'm glad that we got to highlight here. Erik, thank you for joining us, man. This has been just an amazing conversation. I think it's been very useful, I mean, for me in particular, I hope for everybody out there, just for somebody who's operating in the space and literally actually actively participating in those realignments to break that down here. So thank you for joining us, man. We really appreciate it.

Thanks for having me. Love the show.

See you later.