Ed Zitron: Silicon Valley's Empty Promises and Billion-Dollar Blunders

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Language models are kind of interesting. I despise them for the environmental damage they do and the fact they steal from people the actual things they can do. Pretty cool. The problem is they're not being sold as this is pretty cool. They're being sold as this is the revolution that will change everything about business forever and ever. That is my problem with it. That and literally the stealing of the environmental damage.

I'm Guy Kawasaki. This is the Remarkable People podcast. And we found another remarkable person to help you be remarkable too. His name is Ed Zetron and he is a media and PR expert.

And.

Well, that's understating. He is so opinionated about AI and what he calls the rot economy that I just wanted a kind of new voice, a new perspective on AI and tech bros and all that stuff. So welcome to the show, Ed.

Thank you for having me, Guy.

Listen, Ed, I have noticed in your podcast and your writing and stuff that you don't exactly hold yourself back. So I gotta ask you this question. I think I know what you're gonna say, but tell me what you think of this blue origin flight with the women into space.

It's one of those things where I think Katy Perry came back and she was talking about Mother Earth and loving Mother Earth and it's like, how many fossil fuels were necessary to get you up and down? How many did you fly there on a private jet? I think it was just. It was pr, it was marketing, and it was just one of those meaningless things that I think it's cool that we send people to space, but this one was unnecessary and a little strange, frankly.

And let me ask you something. Do you think that this advanced women in STEM and kind of diversity in space at all?

I think that those are extremely important issues like women and people of color, LGBTQ making sure that they have presence in all industries and in STEM and everything is extremely important. I do not think the blue origin flight had anything to do with that. Of the Sort. I think it was just a Blue origin marketing campaign. And it sucks that it really was exploiting woman in STEM far more than it was helping. I don't think anyone saw this and went, oh, that's a good idea. Now, I wasn't into woman in STEM before, but I saw Katy Perry in space, and now I'm just gaga for it.

And her quote was, putting the ass in astronaut.

I mean, good stuff, Katie. Good for her. But also what? Could have said anything. Could have said anything. If only. I saw an interview with her where she claimed she was reading about string theory as well. Good for her again. But it's like, what is this even about? Is this about woman in stem? Is this just about feeling good in a kind of vague and unattached way? I don't know. It just all feels cynical to me.

I was talking to my wife about this, and I said, if it was up to me, the women I would include would be people like Jane Goodall, Dolly Parton, one of the many woman.

Who works at NASA.

Yeah, Yeah.

I don't know. Like, one of the. One of the many incredible women in science. I'm not saying I don't know. I feel like that felt like a fairly obvious one, but it was the big name thing. That feels so cynical. It's not even like you had a celebrity and a few actual scientists. You just had celebs. It's like, okay, what's this for? Who is this for? Is this just for. I don't know.

I would have loved to see Jane Goodall and Greta Thunberg.

That would actually make sense. This does not. I mean, it makes sense in a kind of marketing sense. And, like, we're just doing things to get headlines because that's what it was. But headlines for that's the thing is just very kind of specious. Like, why are we doing this? I don't know. So many better things we could have done.

Okay. And we have better things to discuss. So what is the gist of your analysis of OpenAI? My God, what a diatribe.

So OpenAI is a company that burned $9 billion to lose $5 billion in 2024. They have no path to profitability. Their software does not have significant business returns, and they're on course to bear. Their estimates are like, they'll burn $320 billion in the next five years. And this generative AI has petered out. We are not seeing significant gains in any way, and we're definitely not getting AGI. So my view of OpenAI is it's one of the most successful cons of all time. I believe. If you look at the way it's structured, it is an incredible con. He has all of his infrastructure provided by Microsoft, provided by Core Weave, if they ever build it. Stargate as well is never going to happen, but nevertheless, he has managed to take all of the risk and put it on other people, including Masayoshi, son of SoftBank. My analysis is the entire generative AI boom is OpenAI. And OpenAI itself is a runaway train of over promises. It is in reality probably more like a $5 billion valuation. SaaS business, it is the equivalent of Docker. I don't know, maybe they have a higher valuation than that. In the case of Docker, it's cloud software, it's cloud compute. That's all it is. But it's been turned into this massive, meaningless, empty hype bubble. And I think you're seeing people pull away from it. Johnson and Johnson has reduced all of their generative AI efforts. For example, Microsoft's pulling back on data centers. OpenAI is just. It's not a nothing burger, but it's definitely much less than people claim it is.

So are you impugning OpenAI specifically or AI in general?

So that's the thing. There's AI. There's all sorts of AI over here. You've had people on your show, you've talked about AI. AI can mean a hell of a lot of things and has been around for decades. OpenAI I'm referring to with generative AI. The current AI hype boom is based on that. There are lots of people that. That conflate AI writ large with generative AI because it allows them to sell things and pretend they're in the future.

And so do you use AI in your podcast and in your writing and stuff at all?

No.

Not one bit?

No. Why would I? That's the thing. Like, I write my scripts. My scripts are edited by someone. I speak into a microphone. It's edited by a producer.

Yeah.

I don't have any reason to.

Okay, let me tell you one of my use cases. I was writing a book called Think Remarkable, and I wanted examples of people who really made big career changes, not just going up the hierarchy, but completely changing what they did. So I asked ChatGPT that question. Give me examples of successful people who made really great career changes. And ChatGPT told me Julia Child was a spook, working for the oss until her 30s. She got married, they moved to Paris, she fell in love with French food, and she became the French Chef, I would have never have heard of that example were it not for AI.

I mean, this nicely guy. But did you try looking otherwise? Like you could have just. I don't see how that is an AI use case. You're describing search, you're describing search. And also, did you check the citation? The reason I say this is even here in this example of where you give me an example of how AI changed things, you basically refer to something that already existed. That I would love to say it was better, but it's Google search has become so mediocre that I don't think it's possible to say it's worse, but at the same time, the propensity for hallucinations. But even then, this magical industry of AI, this magical generative AI, after all of this, the best we've got is it's kind of search. I feel like you also would have come to that example had you looked harder. I don't mean that as an insult, but just had you not taken the first thing that popped up when you typed it into ChatGPT. Now, I assume you went and did in depth research on her afterwards, right?

Yes, definitely.

So that's the thing. Like, why didn't AI do that for you?

Well, in a sense, if I am worried about ChatGPT hallucinating, I'm not gonna ask ChatGPT, are you hallucinating?

I agree fully. I'm just saying that shouldn't it not do that? Shouldn't it be reliable? This is the thing. We're two years into this. Hundreds of billions of dollars of capex, all of these things. And you yourself, you've been around in tech pretty much since I started my career in 2008. You've been on the forefront of these movements. You've been looking at these things. It just feels like this should be more than it is right now. And that's because this is all generative AI is even in these examples. I'm not even criticizing. I'm just saying that why would I use AI in my podcast? Why would I use it in my work? Because you can't trust it. You can't really. It's a better search engine now, but even then, I used the search engine the other day to look up earnings reports and it didn't even give me the right. It gave me an earnings report from 2023 when I asked for 2025. It's just frustrating seeing everyone say this is the future when it isn't or it's barely the present. It's mostly the past. But more expensive.

Oh, wow. I can tell you we have a little different opinions of AI. But hey, that's good. That's why I want you on my podcast. Right? I don't want an echo chamber.

Indeed.

What if somebody said to you, going back a few minutes here, that, yeah, OpenAI at this point doesn't look sustainable. It's burning cash. You know it. It's losing money on every even paid customer or 200amonth or whatever. But can't you make the case that at the start of a revolution, most revolutions don't look sustainable?

You can make that case as long as you ignore history. So Jim Cabello for Goldman Sachs, the head of global equities research, said in the paper at the end of June of last year that basically, it's a trillion dollars of capex to make this work. But where are the returns? One of his big points he made was two parts of this the smartphone revolution and the original Internet. The original Internet. The argument people make is, yes, there were these $64,000, some microsystems, servers, and the argument is, well, those existed and thus this is the same thing. It isn't the amount of capital expenditures behind anything to do with some microsystems, original servers. Even the basic cable outlays of the early 2000s were minuscule compared to this. And on top of that, you could still see what it was going for. There was a roadmap. Furthermore, when it comes to the smartphone revolution, people said the same thing. Well, people said smartphones wouldn't be a big deal. That's also a historical cavelo also said that there were thousands of presentations that showed you a roadmap of, okay, once we get smaller Bluetooth radios, smaller GPS is, smaller cellular modems, we will see this, this, this, this, this all the way up to the iPhone and beyond. There's nothing like that for AI. There's nothing. And on top of that, the CapEx comparisons are completely different and even the businesses are completely different. The only comparison point of a company that's burned as much as OpenAI is Uber. Uber's largest burn was 20, $26.2 billion, if I'm correct. Now they did that because they literally could not run their business. People could not get in cars and go places due to Covid. There is no historical comparison with OpenAI. People have tried railroads. Doesn't make sense, doesn't make sense at all. Just isn't the comparison. Electricity grids, doesn't make sense. There are no historical comparisons with what OpenAI is doing. On top of that, all of the others, every single one. There was a theoretical concept even of how this would get cheaper. The only thing that people have right now is they are saying the cost of inference. So when you put a prompt in is coming down. There's proof that's happening. But even OpenAI has increased their cost of inference with their new image generator. It feels like a death cult. It's genuinely worrying that society is not looking at this as a problem. Anthropic. They burned $5 billion last year and they make a minuscule amount compared to OpenAI. It's frightening. This cannot continue as it is. It is not numerically possible unless something completely unprecedented happens. But I see no sign of that happening.

Well, but I could make the case that the fact that you can't see something unprecedented happening doesn't mean it's not going to happen. Lots of unprecedented things happen.

But I could become a wizard. I could learn to teleport. If a frog had wings, it could fly. There are all sorts of things we could say that are just what if this happened? But what I mean by unprecedented and all this is for OpenAI to survive. They have raised $40 billion. What they've actually done is they've got $10 billion upfront from SoftBank, then they get another 30 billion by the end of the year. And they only get 30 billion if they convert to a for profit entity, which means if they don't do that, they'll only get 20 billion. The for profit nonprofit thing is dodgy enough, but SoftBank has to borrow all of the money to fund them. Private deals of that size are rare. You've got a $35 million billion dollar. Pardon me, $35 billion infrastructure loan happening with Apollo and Meta right now. But that's Meta. Meta has the credit worthiness to stand this up. OpenAI doesn't. The fact that they are having to raise from one company, SoftBank is such a bad sign. Nevertheless, putting all that aside, how do they keep burning all this money? It's not changing, it's getting worse. There's only so much money in the world that is going to go into this company, especially as the AI trade is suffering. The unprecedented thing would have to be a scientific breakthrough that would then have to immediately become silicon. Because even if they came up with something that would make inference dramatically cheaper on the silicon side, it would take years to actually file into physical silicon. I don't know. I realize that the idea that a company of this size, of this importance being this financially unstable and this potentially destructible is scary. And it's hard for people to get their heads around. But at some point something has to change and I have no idea what that could possibly be. And I've not had a single person come up with an answer.

Okay, so let's suppose that you're right. An OpenAI dies. So what if you go to Gemini now and you ask a question, you don't get the old Google sort of search results of a quarter million links, you get an answer as opposed to links. So if you OpenAI died, so what?

Generative AI will stick around. We've already got models that run on device. They're not as good, but they're getting there. My argument is not that generative AI will die, the hype cycle will. Because right now no one wants to admit that generative AI is not going to give the business returns that they promised. It's not revolutionary. It is an evolutionary product of deep machine learning and deep learning and stuff like that. It is a next step. It has some functionality that's useful. It has been trumpeted. That's the thing. As a product, large language models are kind of interesting. I despise them for the environmental damage they do and the fact they steal from people the actual things they can do. Pretty cool. The problem is they're not being sold as this is pretty cool. They're being sold as this is the revolution that will change everything about business forever and ever. That is my problem with it. That and literally the stealing and the environmental damage. So you'll see Gemini hang around. I'm confident of that. In fact, if OpenAI collapses, I wouldn't be surprised if it gets absorbed into copilot because Microsoft owns all of their IP and all of their research, their pre AGI stuff, by the way, which they're never going to make it. But that's the other thing. Everyone is talking about AGI now. And that is just one of the most craven and disgusting things I've seen in tech and tech media in a while. Because we are not even close to the beginning of AGI. It is a farce and a lie to suggest otherwise. And it's nice to sit there and dream about it and say, oh, what if we had AGI? Wouldn't that be interesting? But we don't. And we're not going to. We may never. AGI is a cool idea. The idea of the conscious computer is so cool. I love the idea, but no one seems to want to actually have that discussion. They don't want to talk about the fact that we'd have to give these things personage that we'd have to give them rights potentially. They don't want to do that. They just want to vaguely say AGI is coming so that Wario Mario Amadei of Anthropic can raise more money, or so that Sam Altman can get a third Koenigsegg car. It's frustrating because you're taking the cool stuff about tech, the dreaming, the new innovations, the things that change society. You're putting that to the side so that you can create something that can raise more venture capital and you can hold up the stock market. It's boring on top of being not that useful.

Ed, like, don't feel constrained and tell us what you really think.

I know I've been holding back, guy. I'll be honest now.

So does the existence of Deepseek make you feel because it's cheaper?

I think Deep Seek is a good thing because if we're thinking about the problems of the generative AI bubble, it's the getting. None of the American companies have been pushed to be efficient. They've been building larger and fatter and nastier large language models that burn more capital, use more energy. Deepseek, however, has. Not that I don't know if it really cost them $5 million to train. I don't necessarily buy that, but it was definitely cheaper. I think Deep Seek has started pushing some of these corporations to get cheaper. Google, there's some Gemini stuff. I don't mind. Jeff Dean over at Google, he's all right. But they've been pushing for cheaper models that can run on the single H100 even that's not. Anyway, Deep Seekers put pressure on a lot of them to lower these costs. But it also kind of shook the market and said, hey, look, look, maybe it doesn't need to be have the latest Blackwell chips. Maybe we don't need to give Jensen Huang billions of dollars every single quarter just in case the stock market gets hurt. So Deep Seek's good. I think people got very xenophobic over it in a disappointing way. I think people were very quick to go, ah, it's the Chinese. They're doing something boring. And honestly, cowardly. If that's the best you've got against Deep Seek is to just be xenophobic. It's boring, it's just dull. And it doesn't actually suggest that anyone cares about technology. I personally am very excited. I love my tech. I really do cool stuff. That's why I get up in the morning and you see this and it's Just dull and at least deep seeks pushing them to make it cheaper. I don't know, it's just disappointing to see that this is what everyone's obsessed with. Foreign.

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Segue a little bit into a little larger topic, which is I love the concept of the rotation economy. R O T for those of you listening, so please explain the rot economy.

So our economy, the public markets in particular, but it's bled into the private markets as well, has been obsessed with growth. Growth at all costs. It's not about making sustainable businesses. It's not about making businesses that will last the test of time. It's about each quarter showing a high percentage growth. 10% would be considered bad. 20% ideal. More than that, even more ideal. The rot economy is something I refer to as specifically for the tech industry. It fans out. The tech industry is one of the best, and especially software, one of the best vehicles for growth ever. Software can proliferate infinitely theoretically, and as a result, it can create growth in all sorts of places without having to build physical things or have labor. It's actually why the generative AI situation is so bizarre. Nevertheless, when you have companies that for decades have been oriented around growth, rather than making happy customers, making people come back to the service because it's good, not because they have a monopoly over it, not because it has the cheapest prices, you chase out the people who innovate. You chase out those people who are sitting there thinking, how can I solve someone's problems? You're thinking, how can I solve a problem? And that problem is that my stock needs to keep. We need new crap to sell here and there. And thus the tech industry has been obsessed with growth for years and years and years, and they've been rewarded for it. Tech stocks have never been worth more. It's never been Easier for these companies to promote growth up until a few years ago. So they got desperate and they thought we don't have a new hyper growth market because they really haven't since smartphones, the cloud computing boom, there was a brief virtualization trend. Didn't really work. AR VR didn't work. Metaverse didn't work. Smart home didn't work. Amazon lost billions of dollars off of that. They're still losing money. None. Smartwatches, IoT 5G, these are all things that they all wanted to be the next type of growth thing. Except there hasn't been one for a long, long, long, long time. And thus they've got desperate. And the people running these companies all have MBAs. Sundar Pichai, Tim Cook, Satya Nadella, Auntie Jassy, MBAs. And no offense to MBAs. It's just when you are a business growth man, inspired by Jack Welch of ge, who is great book David Gellis, the man who destroyed capitalism. When the conditions are that you must grow every quarter, you're no longer thinking innovation, you're no longer thinking value creation. And so you don't really know what it looks like anymore. You look at the smartphone generation, you say that was big because it had lots of market opportunities versus the fact that you remember very well the first iPhone was incredible because it combined all of these distinct devices. You had this one thing, it brought home the idea that we saw in Palm and Compaq and things like that with the miniature computer. And it made sense and it made sense for us as people. You look at generative AI and it's very much a square peg round hole situation. But it makes sense if you look at it that these companies were trying to create something that would sell software, that would allow them to sell cloud compute with Azure, that would allow them to sell API calls with OpenAI, that allowed them to sell subscriptions with OpenAI. The problem is the underlying costs are so severe and it's always worked in the past to throw money at stuff. They're all growth oriented, they're not innovation oriented and I don't think they know what to do.

And do you hold any companies that we would have heard of as positive examples that are not the rot economy?

Not in tech, truthfully. In tech is just a slop fest. Nvidia is interesting. So Nvidia Jensen Huang is technical and he sounds like monstrous to work with at times. But you he is a technical guy, he is a hard working guy, cleaned toilets as a kid. He is a real working stiff. Nvidia Regardless of the fact that Jensen jumps from trend to trend, they at least make physical things that are good. They've screwed over consumers with GPUs right now. They've done terrible things pretty much because of the rot economy, pretty much the same thing. Growth at all costs, which means melting wires because they've sent all the powers down 2 cable for GPUs. Point is, Nvidia is about one of the better ones. But right now, our crop of public tech stocks are really horrifying. It's really disappointing because I would love it to be different. I want a better tech industry. I deeply want tech to make cool stuff that makes people's lives better. I just don't see them doing it. Costco is probably my one company that I think is in line with the idea that growth is not the only thing but in tech. And I understand on some level, I understand why. I understand if you're the CEO of a public company and the market wants growth, what are you meant to do there? You could push back, but the pushback would include your stock going down, which might lead to a board revolt. So you're in this catch 22 situation. But you look at people like Sundar Pichai, who is a former McKinsey guy, and that guy does not care. That guy's not thinking innovation, he's thinking line go up, number go up.

Do you think that Dave and Bill are turning over in their grave right now?

I think that if you look at the elder generation tech founders, those living and those not, you can really see that there is something that shifted in the mindset of the people that run these companies. I also think that there are some, like Bill Gates, who were always like this. Microsoft had an antitrust case, was it in the 90s over MS, DOS and Windows. Some of these guys, like Eric Schmidt, they're ROT economists and they always were. I don't think that was always the case, but at the same time it's hard to tell because it was the Manga quote. It's like, look at the incentives. I forget the exact one, but the incentives back then were to build stuff so that it would be valuable. There was not the inherent assumption that it always would be. The early days of Apple, as horrible as Steve Jobs was, the early days of Apple were very much like crap. What do we put together? What would be useful for people? What problems can we solve? And yes, Steve Jobs had his aesthetic choices and his proclivities, but ultimately it was about solving a problem. And then that would be value bull. Now it's can I sell an idea now? Can I put a concept together that will convince the markets that something is happening which is inherently different to showing the markets that we have created something of value which will then grow? So I think that when you look at the elder founders living and dead, I can't say for certain whether had they been born into a different generation and founded their companies today, whether they would do any different. It's the wills of the markets and the incentives at play. They are what dictate things. And I think that it's hard to tell and I don't feel much good for these executives, but I understand why they're doing it. I just can't speak to their what's up here.

And the why they're doing it is because they believe they have shareholder responsibility and their whole goal is to up.

The stock and that's shareholder supremacy. That is Jack Welch of GE where shareholder capitalism took hold thanks to him and Milton Friedman. The idea that we must make the shareholders happy, we must improve the stock price, stock buybacks, it becomes such a big thing now. It's anti business as well. The incentives are no longer around creating businesses that create value. It's around creating businesses that provide value to not the customer. And it's so frustrating because it is going to drag our economy down with it eventually. It is going to drag society. I'm not saying apocalypse, but it is always going to be negative for society when we have shareholder supremacy. And I wrote a piece about this last year as well. It's just frustrating because you can see the direct results. You can see the human capital. You see the tens of thousands of people laid off. Microsoft alone, tens of thousands of people in the last few years. And that happens not because the companies are unprofitable. These companies print money, $10 billion in profit, I think a quarter with Microsoft, probably more. Yet they lay people off just so they can make another number go up is all that's important. It's so frustrating.

What do you think happens to people like Elon Musk and Jeff Bezos and Marc Andreessen and Peter Thiel? Were they good and they got corrupted or were they corrupted and now because they're powerful, their corruption can come out? What can you explain those kind of changes that they seem to have gone through?

So I think there is a universal theme with billionaires. I think there are very few exceptions. Steve Wozniak, I think is probably an exception. A very, very rich people that they get where they get without ever enjoying a single moment. They don't have anything that they truly love and are attached to that brings them joy, that isn't money related, that isn't to do with business, that isn't to do with conquest. So when they eventually get to a point where they have everything, they really feel like they have nothing. I can't speak to whether Bezos or Musk. Musk sounds like he's been pretty horrific for a long time. I don't know much about the history of Bezos, but I know this. The way these men act is depressed. These men are not happy. They're not saying these things because they have a deeply held ideology that means something to them. They're saying out of grievance that they feel the world has taken something from them when they themselves have been arguably the biggest beneficiaries of the world's resources. They could go and do anything, and they choose to do what it is they're doing. They don't act with kindness. They act with malice and aggression and judgment and hatred. And that comes from a place of emptiness. That comes from a place of not really enjoying a single damn thing. When you have all the choices in the world, you choose to go online and get angry. You choose to go online and attack woman. You go online, attack trans people and attack minorities and attack dei. You do that because you are miserable and isolationist. That's what it is at the heart of these men. The way they're acting is disgusting. It's really putrid. And it's also pathetic and cowardly and the opposite of manly. It's the opposite of masculinity. It's so cowardly. When you have power and you use that power to attack people who are powerless or marginalized, that is weakness. And that's what these men are. They're weak. They have all the power in the world, but deep down in their hearts, they're weak.

I have to say, I scratch my head. I scratch every part of my body. I just do not understand. When you have infinite resources and infinite money, why are you not taking the high road? If there's a time to take the high road, it's now, right?

And like I said, you could eat whatever meal you want cooked by your favorite chef, with your favorite band playing anywhere. You could do any of these things, but you choose this. And that only comes from a place of deep unhappiness. That only comes from a place when there isn't anything you actually want to do at all. When you yourself feel this echoing emptiness inside you. Because if they felt anything for Themselves if they felt anything joyous or happy that they could attach to, they would attach themselves to that. But they attached themselves to anger. Mark Zuckerberg on Joe Rogan was a joke. That's ridiculous. You go, hang on. There is no masculine enough anymore where you got billions of dollars. You own chunks of Hawaii. What are you doing? Why are you here? Why are you on a podcast? You could be in Hawaii doing anything. Hawaii is an incredible looking place. You should just be there and stare into the distance. There's so much beauty there alone. You have all of this stuff and you choose to do this. And it must just not feel like much to them. They must just feel nothing but anger. Anger and resentment. Resentment after they're given everything, everything. They must have more, they must take more. It must be the empty inside them, the void.

But would you make the case that if they were not like this, they would not have achieved success which came first?

I think that you're right, that there is definitely a degree of if they did not have. Actually, no. I take that a step back. I don't know if I conflate the two. I think the single minded focus on success, absolute success. I mean, in many of these cases, when you look into their actual past to success, it wasn't like they had great business acumen. They stabbed a few backs a few times. Musk is an incredible leverage guy. That's really it. He knows how to leverage assets. That's about it. Mark Zuckerberg hasn't written a line of code since 2006. Mark Zuckerberg knew who to go to. Sheryl Sandberg is probably more responsible for Mark Zuckerberg being a billionaire than Mark Zuckerberg. There are people that attach themselves to these people that help. I think that sure, that whether or not billionaires should exist is pretty obvious. You don't need a billion dollars. Just come on. But I think that what got them there was that to an extent. But what did they do when they weren't making money? Did they not have fun doing it? They watch JoJo's Bizarre Adventure. Did they ever watch listen to Jet like Charles Mingus? Did they not do anything cool or fun in between now and then? Was there nothing that made their heart sing? And I think the answer is no, there wasn't. And I think this happens to millions, billions of people all their lives. Plenty of people who end up dirt poor who also find no joy. It's just more obvious with these people because they have so many more choices that they don't choose.

So if I Am a young entrepreneur and I'm listening to this podcast like my head is exploding right now. You're basically ripping all my tech heroes. So what is a young entrepreneur supposed to do? What is a young entrepreneur's North Light?

Cling to helping people. I don't necessarily mean helping people in the vocational way. Make something that people need, that works. Be good to your friends and family. Love the people closer to you harder while working on whatever you're doing. You can work incredibly hard while also putting love and joy into the world by being there for your friends, by being an available person. Go to therapy. It's the best thing that most people don't do. Exploring oneself is one of the most beautiful things a human can do. And young entrepreneurs are so commonly told to aspire to be these billionaire types. When you look at their history and. And you say this isn't something to aspire to, this is something they fell into. So the advice for young entrepreneurs is focus on the most valuable thing you can do that's easiest for you. That's the best I can say. The closest you can get, something you're naturally good at, that pays well. I internally dial that in just as a job thing. But if you're going to build something, solve a real problem, find something that pisses people off or that frustrates them within their life, within their job, and truly solve that in a way that involves them paying you. Because there's nothing. That's the thing. It's okay as long as you're upfront with the incentives. Not being like Mark Zuckerberg, not being like Larry Ellison, not being like Jeff Bezos isn't a bad thing. And also, these men grew up in vastly different times to today. Their lessons, even if they were positive, would not be relevant to a society where it's harder to accumulate wealth, where most young people can't buy a house, where most housing and rent is way higher, where we as Americans burn so much money on health care. The world is different now. So appending yourself to these people isn't necessarily the right thing. Focusing on the reality, focusing on the tangibles of helping people with good software or hardware or what job you do, find a way to be useful and monetize that. You can be a creative too. That will be a grind, but you can do it. Just whatever you do, actually give a crap.

You are basically rewriting every business book written in the last 25 years there.

Yeah, I've read a lot of them too. And a lot of them are written like they were written 25 years ago. The Effective Executive by Drucker is still pretty good because a lot of his lessons come down to, hey, when someone's good under you, treat them well. If you have good people working for you and they work on a product that people like, people will buy it, be a good boss. Be a boss that respects the labor of other people. These are timeless lessons. The problem is that modern business writing has got so far away from that, and it feeds into this culture of easy answers, of quick fixes. Very obvious, kind of trite, but it's to try and get people away from having to have responsibility for others and themselves. Not to say that circumstances don't happen that change things, but it's. There are no easy answers. Sometimes the answers involve you not making as much money because you're spending on other people working for you. Sometimes it means you work harder and you have to spend more time working and investing in the people and the processes. I actually really like Rework, Rework by Basecamp. Guys, that was a very good book as well. But a lot of the modern business books are just naff. They don't really say much. They're trying to give you little tips that you could hopefully copy, but you can't copy someone else's homework.

I may be part of that indictment.

But I just haven't read it. I've not read your books, guy. I'm very sorry.

Oh, at this moment, I would say I'm lucky you haven't read some of my books.

But also, I should be clear, 10, 20 years ago, these books were written for 10, 20 years ago. And even then, when you write a book, it takes a year or so to come out. Everything is going to time out over time. The idea that the books might need to be rewritten is just the process of history. Yeah, there are some bad ones, but yeah, of course old books are going to be like. I wrote two PR books and they are terribly out of. Like, they make sense. The core tips are good, but there's some social media stuff in there. It does not make any sense anymore.

I have to tell you that the Effective Executive. I read that in college and I loved the writing of Peter Drucker and his other book, the Management. That really thick book was just formative in my mind.

There was like an MBA one as well. It's funny, I remember reading the Effective Executive on one of the few books I read on the subway when I was living in New York in 2009, actually. And I remember reading it crouched into a corner, being like, this is good. A job I hated. I was so unhappy. I was just looking this. Is there anything in here that will help me? I was just like, oh, these all make sense. But no, nothing will help me from this book to fix the situation because workers are so often deprived of industry. But it's good, I think, for young people to inter. My dream would be that young people internalize lessons like this because I think that the future of business needs to involve more love for the workers. Workers need to be less disposable. There needs to be more training. Managers need to be fired en masse and replaced with managers who actually know what they're talking about. There is just so much rot that has crept into all businesses. Up next on Remarkable People. I think that in general, Apple products are very good. I think the App Store is an abomination and I think the way that they promote horrifying microtransaction filled stuff is disgusting. I think their physical products, I think their silicon is fantastic. I genuinely do. I think Meta is horrifying. I think Microsoft. I would never work Meta, Google or Microsoft. No, absolutely not.

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You're listening to Remarkable People with Guy Kawasaki.

I think my favorite lesson from the effective executive, and I use it whenever people talk to me about what's the role or purpose of a company is. I believe Peter Drucker said that the purpose of a company is to create customers, which is very different than optimized shareholder return.

I think the. It's a great lesson, but the meaning has been misinterpreted because creating customers, it has been turned into creating businesses, creating problems and then creating solutions for the problems versus what I think Drucker meant, which was finding customers that need problems solved and solving them.

Exactly.

And that conflation is at the root of a lot of our problems. Because when you really look at, when you really look at what's happening, it is creating customers, by which I mean forcing something upon a current customer or a new customer, making them have to work with you rather than appealing to them in any way. And I like how Drucker put it, you should earn their business. That is the scary thing that I think has left a lot of modern capitalism.

While we're on the subject of the effective executive, you open the door here. Do you have any other books you would like my listeners to read to provide a guiding light?

So rework. Jason Fried. It's been a long time since I read it, but that book was really good. And it was like quite modernized. And a lot of it is about doing the things that make sense rather than doing the things that people are telling you to do. I have a small agency, only a couple of people work with me, and I've always kept it like that. And one of the big things when I was starting out was people would say to me, well, when are you going to scale up? I'd always say to them, why? To what end? Then you'd be bigger. I'm like, why am I going to make more money? The business will be bigger. It's like you go back and forth with people and there are all these things that people do in businesses. Software, they have the thing, processes they choose. They do it because they think they have to. And rework is really good at focusing on, hey, what do we actually need to do here? What roles do we need in an organization? What should each person in an organization do? And it's very Good like that. It's been a while, but I really love that book a lot. I also like Atomic Habits. It's cliche, but I think that over time we all develop habits and the ways we work, kind of by accident we just bumble our way through lives. Atomic Habits. It has some annoying bits. It's quite repetitive, but making you a little more conscious of the way you build the world around you professionally and otherwise is really something like. That's a good one.

My last topic for you, because you are a PR and media expert, let us talk about what it means to be in PR and media today. It's a very different world of pitching stories and getting coverage and social media. So what is the state of the business these days?

So every single year since 2008, someone has told me that media relations is dying. My business has been around since 2013. 2012 13, I think. Yet to die, yet doing very well. Media relations is still a big business. Pitching stories to reporters is as well. The reason that PR people want to kill it off is it's difficult. You have to studiously read. You have to keep up on everything happening. You actually have to know what you're talking about. And you have to read all the journalist stuff that never goes out of style because companies want third party approval and they want it on honest terms that people will read and then approve of the company. That's a very basic thing, never really changed. The thing is, PR has bred it out of the industry. PR people have been told not to do media relations. They've been told it doesn't work anymore, that the company is the media now. Never been true. Not even once. Guy, these people, it's like, oh, every year they say the same things like social media is taking over, content's taking over. It's not 2013, but they say the same things. But in reality that media relations is one of the few parts of PR that still works and still gets paid the rest of it. Content creation. Yeah, it's probably the most at threat thing from generative AI when it comes to writing anodyne business copy that no one really reads but everyone internally feels good about. That's what generative AI does. You want slop? We've got slop. PR has too much slop in it. So I think that really specialist PR is going to continue ripping just because as social communities get more bifurcated, as we have less media outlets, as media outlets get more specialized, you're going to have more people that want to get in front of specialized audiences, which requires a specialist. And media relations are specialists. They're the highest revenue part of the business other than the scammy parts where you just have someone sign up for 100 services and they can't fire you. Talking about Edelman. And it's a situation where PR people don't know what to do. Less people are going into pr. They go into it because they think they're going to be running events. I went into pr, completely lied to about what it would be and I'm happy I stayed. I love doing media relations. I get to talk to journalists all day. I get to know all their stuff, I get to read constantly. I get to be smarter and get paid for it. It's awesome. I think the PR will keep going that way. I think the PR is going to see some astronomical changes in the next few years, though, because what else is there right now? Crisis management. Great specialist industry. The specialist PR firms, the specialists, the people that know those industries and the PR people who are incentivized to learn them. Not these PR people who know a little bit about a lot, they're unworthy. The people that know what they're talking about. Look at the sports people, look at Sarita over at the Atlanta Braves. You can see the people who are really good in this industry and it's because they know and love their subjects. And I think PR as an industry has so many generalists and I think that you're going to see that shift or you're going to see agencies die.

So let me ask you something. Could you, just for the people listening to this, how do you define media relations? Is it your ability to call up Ijustine or Marques Brownlee, or 20 years.

Ago you could call up what's so funny with those? So Ijustine and Marques are interesting because they're so big now that you really can't pitch them. You can, but you can't. Like, you have to have a thing specifically for them. So media relations is getting people to write coverage about your client or put your client on television or put your client on a podcast. Now, what this means in practice is PR people think it means spamming them and just hoping for the best. What it means is a really tailored pitch for them, but also knowing them. And I don't mean this kind of nasty, greasy, oh, I'm going to pretend to be friends with, you know, them as I mates with a lot of them. But they don't run anything extra because I'm their mate. They run it because I actually read their stuff. Studiously, media relations is getting coverage that really is it. It's the thing that people have always paid for. I think people always pay for it. It means getting people on podcasts, on tv, in newspapers. It means finding the right reporter for a story and getting them to write it. There are the greasier kinds. There are the people that do the kind of place stories, the rumor mill stuff that's on the side of it. It's not what I peddle him, but it's interactions with journalists.

But Ed, how do you make a judgment? Like, on the one hand you are condemning the rot economy, on the other hand you're pitching media stories. Aren't those two things overlapping and in conflict?

Sometimes I'm really lucky to have clients that are. I pick my clients quite carefully, and there's a reason I don't work with any crypto companies as well. But look at it like this. Journalists here from hun. I do the writing stuff, the podcast stuff. I do it for the love of the game. I had 300 subscribers when I started in 2020. I have 60,000 now. I did that because I love writing. And if I don't write, I'll go crazy. The cats in my brain will keep meowing. So I think that it helps that I do that. My clients seem to really like it because they understand that journalists are going to connect with me, because they understand my work and they know who I am and they know that I wouldn't bring them something rubbish. Also something that wouldn't embarrass me. I don't want to embarrass myself. I have a very public profile. But even before when I didn't. So I think there is a challenge. I'm sure there is definitely a degree of, oh, God, what if these two sides touch? But I firewall them quite aggressively. No client gets any coverage on my newsletter or podcast. I separate those worlds incredibly carefully. I take on clients that I like and I respect, and when I pitch reporters, I'm very clear, hey, if you don't like this, that's totally fine. And I get turned down for stories all the time, as any PR person does. The important thing is to not use one on the other. I would never, ever use anything to do with the show, to do with my PR work. In fact, during ces, I had a live radio show thing I did, and I intentionally invited journalists on before I pitched them so that there was never a chance where anything was contingent. And then I had one that I invited on that then said no, and I had zero reaction to it because those are two separate things. If you do things with intentionality, things tend to work out.

Are you saying to me that if Amazon or Google or Apple or Meta came to you and said we would like to retain you for media relations, you would turn them down?

I'd probably take Apple. I like Apple stuff. Like I'm a happy Apple customer and I feel like Tim Cook, despite him being like a supply chain guy. I think that in general Apple products are very good. I think the App Store is an abomination. And I think the way that they promote horrifying microtransaction filled stuff is disgusting. I think their physical products, I think their silicon is fantastic. I genuinely do. I think Meta is horrifying. I think Microsoft. I would never work matter Google or Microsoft. No, absolutely not. Like those companies. Microsoft alone. The monopolies they hold do such damage to and make. They make software worse. They make the software industry worse with their monopolies. They make millions, hundreds of millions of people miserable every day with Microsoft Teams. There are real consequences to what Microsoft does. I think Apple by and large does a good job. I think the App Store is evil and I think that they run it in an evil and craven way. And I'll keep saying that even if they did hire me.

What is evil about the App Store?

Okay, open up the App Store and look at how they're monetizing it. Because what they do is they promote things like Hinge, Bumble and these very microtransaction heavy dating apps. They promote microtransaction heavy gaming apps. They monetize heavily on things that are built on the principles of gambling and the principles of addiction based psychology. They monetize misery and they do so with a deliberate hand. Apple could have chosen at any time to punish companies that monetize in this manner. Instead, Apple chose to make billions of dollars off it. Go and look up anything around how Gacha games, referring to these games where you give them a little money and then you might get an item for your character. Those games are based on actively harmful psychological principles. Deliberate ones. Apple makes money off them. Billions and billions of billions. Apple a company that deliberately made the App Store so that they could claim there was some kind of quality control that they could stop consumers being harmed actively. They profit off of consumer harm and there's no reason for them to do it other than profit. What they could do. And Apple has a history of doing this. Remember what they did to Flash? They could crush the life out of these businesses. They could just go no, supercell cannot do this. I Hinge Tinder. They cannot make money off of the way like Hinge, for example, they gate the best looking people behind microtransactions. It's insane. It's an insane company. Apple could very easily just say we don't allow you to make money like that. Or we put a hard limit on these things. We allow these principles. But there is a hard limit on what you can extract from a customer. That's the thing. These incentives trickle down economics I don't think really works, but trickle down incentives do. If Apple just said, no, you can't make money in this manner, they wouldn't be able to. Others would copy or they would. Then theoretically they go to Android, sure. But it's the question of do you want their money? And the answer is yeah, they do. They're happy to. They're really happy to. They are happy to take that money hand over fist. Make the GDP of a small country off of people putting money into clash of clans or Candy Crush. It's gratuitous.

There's the concept of entropic doom. And I think what you're describing is en route doom.

Yes, Right. When growth all doom to rot. Yeah, it's very frustrating because a company like Apple, for example, the Vision Pro, I like it. I loved it at times. I always describe it as when you put it on and it works, it's magical. But it only works like 20% of the time. It's insanely broken. Had they left it a few more years, that would have actually been really good. But they rushed it out because the growth had to show something. They had to show a new dude ad. And had they waited, I think it would have been significantly better. I think that there is promise there. It's cool watching someone try. That's the thing. I love seeing them try. But even with the Vision Pro, you can see how they rushed it and they had to rush it and it's like these insert the. This erotic entropy is too close to erotic for me. But you see it crush the life out of joy. You see it destroy things. That could be cool at the Vision Pro could be cool. It's nowhere near there. You can see it though, sometimes and it's like, God damn it. If you weren't so rushed, imagine how good this could have been.

I would say that because of my history with Apple, very few people have had a relationship with Apple like I have. I have loved the company. And I have to tell you, this is my last question for you because I'M just so curious what you're gonna say. What do you think when you see Tim Cook donate a million dollars to the inauguration and is in those pictures on that stage? Jesus is like, yeah, he's doing what's right so that tariffs against China doesn't affect him. He's representing the shareholders. He's doing his fiduciary duty. Or has he basically sold out? Like, how do you wrap your mind around that?

All of the above. Tim Cook's a gay man. The idea of donating to this administration as a gay man, can't imagine it was fun or easy. It's also kind of craven. I don't feel any sympathy for someone that rich and powerful, but I can understand the value judgment there. Must have been really difficult. Really, like, quite tough. I also think he shouldn't have done it, but I can understand why he did. What was he meant to do? It was a shakedown, a classic mob shakedown. What was he meant to do? I do think that Apple as a company is in a better direction than most. But, man, when I saw him do that, actually, when the others did it first, I'm like, tim Cook's absolutely going to do this. And people are saying he wouldn't. It would go against his morals. And it's like, he'll do it. And it sucks. It sucks to see. But I think Steve Jobs would have done it. I think Steve Jobs would have absolutely done it. He would have done it in two seconds. And I think that had he survived, had he beaten cancer, he would have been. Only I think I put him in the same bucket as if John Lennon was still alive. Except I think that Jobs was far more noxious, but Lennon would have been more annoying. I think the Cook is in, like, this bind where he has to deal with an international concept of trade. Now, on a level, that was the reason he took over from Steve Jobs, so he had to make this very difficult but necessary choice. That sucks. Sucks so bad. He shouldn't have done it. It sucks. But also, I get why he did it.

Yeah, yeah. Listen. On the other hand, Steve Wozniak gave quite a powerful interview, too.

Right.

Expressing basically the opposite of that.

What do you mean? I didn't see the Wozniak interview.

Oh, you check out what Wozniak said. He was, I think, in Europe, and he gave an interview about. Let's just say the two of you are aligned. Not necessarily on Tim Cook, but about how people are taking a knee.

Wozniak. I met Wozniak a year or two ago. And he gave me hope, mostly because I talked to him about just tech in general. We're backstage for a client thing and we were talking about Lucid Motors, and he had a problem with the car. And then he just turned to me and he said, you ever hear of icab? I'm like, what's that, Steve? And he goes, it's a open source web browser that he uses. And he. It was this like a €10 made by a guy in Germany, I think, this incredibly fast and slick web browser. And the way he talked about it, he was so excited. And it made me think. It's like, you see people, these rot economists like Satya Nadella and Sundar Pichai. You see the people in tech like that who don't really care. There's no joy in the computer. I'll never forgive them what they've done to the computer. And you see someone like Wozniak, you're like, you know what? There are people who work in this industry, even though Wozniak has filed out of it, who do care and who do find the computer fascinating. And I. They give me hope. I believe genuinely, there are more people like that than there are Elon Musk. And I think long term, they will win out. We will win out too.

That's the way to end this podcast, because I think Wozniak is the purest form of engineering I have ever met.

He is a thing.

He really is you.

I had never met him, but he seemed so, so happy to talk about a little web browser. It was so lovely. It was so lovely to see this guy. Didn't need to do this, like, have a conversation even, but he didn't need to care about this. But he was so happy to share it with someone. And it's just like, it really does give you hope.

Yeah, I completely agree. Let's end on that high note. Yahoo. For Steve Wozniak.

Yes, agreed.

Ed, thank you so much for being on my podcast. Let's just say that you're making my head explode. I'm gonna have to reevaluate some of my perspectives and values after this podcast. But that's the whole point of a podcast, right?

Yeah. And I hope you found it interesting. I had a great time. Thank you for having me.

Thank you for being on this. I'm Guy Kawasaki. This is the Remarkable People podcast. You've been listening to the Remarkable Ed Zeitron and lots to think about from this podcast. So let me thank the rest of the Remarkable People team. It's Madison Nismer, Tessa Knysmer, Shannon Hernandez, and the one and only Jeff C. So with a remarkable people team trying to make you remarkable. Thank you very much for listening. This is remarkable people.