EP 6: Super Pumped, BitConnect’s Possible Ponzi Scheme, Homebrew and Randi Zuckerberg’s Music Video

Foreign.

Welcome to the sixth episode of Three Cartoon Avatars. I'm your host, Logan Bartlett, and I'm joined today by my esteemed co hosts, the Don at the G Wagon, Nikita Beer. And the George Costanza Venture Capital, Zach Kukoff. How are we doing, guys?

Doing all right.

Only all right.

That's about it. Yeah.

Last week was much more dour. So I guess we've. Everyone hanging out together was put a little pep in. Pep in Nikita's step. How has the. How's the week been since I've seen you guys laugh? So I think we alluded to this last week, but we. We did all get dinner. We broke bread on Monday for the first time since we've been doing this. How's the rest of the week been? Zach, you're still in la.

I'm still in la. I can't get rid of me.

I.

In fact, I'm trying to see Nikita a whole second time. I liked hanging out so much. We all broke bread together.

If you're lucky. I didn't know Zach's drink, though, was gin and tonic. It kind of resonates with his old man Persona.

I was gonna say, you know who I learned that from? My grandparents turned me onto it at a. At a too young age to be drinking.

It was the hottest drink of the 1950s. So that makes it.

That's right, yeah. Thank you to Lydia and Ben Kukoff for turning me on to the gin and tonic at the age of, like, 14 years old.

Yeah, that's good. That. Yeah. I'm sure there's nothing illegal with that or. I don't think there's, like. There's probably some statute of limitations that exist on your. Your grandparents feeding you alcohol at 14.

I will say the GNT is A, I think, chronically underrated drink. I actually think. Are you ready for this? Especially Martini. We all know was. Used to be the hot drink. I think the next hot drink, Gin Negroni. That's from. That's where I'm putting my foot in the ground.

Isn't a gin Negroni just a Negroni?

Well, there's. Isn't there also a. Another kind of Negroni?

I think it's just a Negroni.

I've almost certain. I gotta look this up. I will say another kind of Negroni.

Yeah, I'm pretty sure a gin Negroni is a Negroni.

There's a. Yeah, but there's also a vodka Negroni.

Yeah.

I think when people say Negronis, they mean gin Negronis, but.

All right, fine, fine. Well, how about this? I think the Negroni is going to be the hot drink this year, regardless of what the bases.

It's pretty hot already.

Yeah, I. I'm accurate. It's called seeing the present clearly. Perhaps you've heard of that. Venture capitalists do it all the time, Nikita.

Yes, exactly. When Zach says he means, he means what's the. What's been. The big nursing compound in Florida. That's where it's really starting to pick up.

Oh, Boca Raton.

No, no, no, no, no.

The city of.

No, no, no. There's the big. It's like. It's the number one.

Oh, the villages. The villages, yeah, the villages. Yeah.

Well, Nikita, what did you think of hanging out with VCs for a night? Two nights? It feels like you're kind of getting indoctrinated. Indoctrinated into the culture.

You know how every founder just dreams of being a VC after they have an exit or whatever. And for me, I was like, I was potentially thinking about that career path, but after going to a VC conference, I realized how fucking boring it is.

It's a lot of networking. It's a lot of schmoozing for people. Like, calling that work. Right. It's professional networking.

I think it felt, like, mildly adversarial. Like, everyone's trying to, like, be the better vc, or they, like, we're all fighting for this, like, for our set of deals and LPs.

Well, especially with you, right? Yeah. Why do you think we started. We started a podcast, and, like, we exist on Twitter just so we're not like the other VCs. You know, like, that's the whole thing. We're trying to stand out here. So, yeah, everyone's kind of like everyone's friends, but also everyone's willing to stab each other in the back, like, at a moment's notice if it. If it benefits them. So it's a. I think it says

more about Logan's approach to vc. Logan's like, everyone is friends, and also everyone is willing to stab each other in the back. Not any. Any individual person who's talking. Everyone.

I will. I. I will knife someone if the situation benefits me. And, yeah, our returns. I. Yeah, you should sleep with one eye open, Zach. Off.

Yeah, that's clearly. I know it's coming to me. It's good to know.

But what surprised me was, like, everyone had, like, a. Literally everyone had a 5. $500 million fund, and it just showed how much liquidity is in the market right now. And, yeah, these are people that I've never heard of. They've, you know, they have no, you know, pedigree or professional reputation. It just seems like. Like there's just too much money competing for too. Too few deals right now.

I mean, one of the things is that's the case right now. Right? But I spent a bit of time with a bunch of LPs over the last week, and there's definitely a liquidity crunch that's. That's happening, right? Like, you hear a bunch of LPs, feel like everyone's back in market, raising bigger and bigger funds. Right? Zach, I know you can't comment, but General Catalyst raised a fund recently. Insight had a $20 billion fund that, that they announced. And there's probably four or five more kind of two, three, $4 billion funds that I know are being raised right now. And so I think the LPs are kind of like, what the fuck?

Well, it's not hugely surprising, right? Like, I can. Our. Our fund closure is public. We can, we can talk about the fact that it happened. But ultimately, like, because every fund has to get really big really fast or has to stay super disciplined, all of the funds who kind of sort of grew a little bit now are like, frantically trying to grow aggressively. Otherwise, you know, to be. Which is going to say crazy sound out loud, like, to be merely a 500 million or $700 million fund is sort of a no man's land right now.

Well, you say that. I mean, that's what we are. And I think you sort of need to purposefully do that. Right? Like, you kind of need to pick. It can't be on the path to a step along the way.

Right, Right, exactly.

We're staying that way purposefully, and we've sort of been that way for a long time. Right. And so we're not aspiring to be a four or five billion dollars fund. I think the folks that have gone from 100 to 300 to 500 to 700 or whatever, I think if. If your path is just trying to grow and continue to go up, I really do think there's going to be a cleaving off there versus, you know, there are groups that have decided to stay. I mean, benchmark famously. Right? And we'll. We'll get to talking a little bit more about them, but staying smaller, intentionally so.

Yeah, I think that's right. Like, my point is less about the enduring managers, more with the emerging managers.

Right?

If you're on your way to a 5 billion and 500 million to stop, that's the death zone. If you're disciplined and you've always been 500 million, right? That's a very different situation.

Yeah. Well, I think it was funny, Nikita's observation that, like, that there were a lot. There's a lot of like, 2, 3, 4. This was before we. We got on the podcast, but a lot of tier 2, 3, 4 VCs. And I feel like every VC thinks that they're, you know, sequoia is 1A or something. And then everyone thinks that they're 1B or like, tier 2 at worst. Right? Like, every VC is like, yeah, I mean, we're like 1B sequoia. Sure, we'll give them their credit. But, like, we're just right that next tick below. And I think there's like, 70 funds telling themselves that their fund, their number one B in the order.

Do you think these funds actually believe that? Like, I don't know if, if people are actually, like, putting a truth serum, they'd be like, yeah, we're like number two to Sequoia. Or is that like a. A marketing thing they're doing?

I.

They. They were defending their egos at, at the. The party I was at, where they were like, saying, yeah, we did. We did this deal from 20 in 2013 that returned 100x. But they kept referring to that deal 10 years ago that they did.

That's my favorite growth as a board member is just, like, try to bring everything back. Like the, the. The old board member that, like, had one big win in, you know, whatever 2009 or something. They, like, sold Douglas double click. And they're, like, trying to vector the conversation back to the one big win they had. Zach, your question? I think everyone thinks that they're on the ascension, right? If they don't think they're firmly 1B, they think that they're like, you know, that their star is on the rise, right. And that they're very close to being that. I don't think anyone's like, yeah, you know, we're tier three, but this is probably going to be our place for the next bit, right? Because the ground's moving underneath everyone. And so if you think, like, if you don't think you're ascending, then you're definitely falling in a very meaningful way.

I think that's probably right. I also would say, by the way, Nikita, to your point, like, the weird structure of venture such that you can basically be set for life if you're a small fund and you happen to do one great deal, right? If you're like a $300 million fund and you're the early investor in a $10 billion outcome and you own 20% of it, right. That is like a life changing outcome for three to four partners. And so, but then you only, because you only need to do one of those to really be successful, you end up with all these folks who have only done one of those and think forever they're like the greatest investor in the world because they had one phenomenal outcome.

Well, and I think at the end of the day, like being rich is different than like feeling important. Right? And so there's a lot of people at these conferences that are worth, you know, tens of millions of dollars or whatever it is, Right. But no one gives a shit because it happened, you know, eight years ago or, you know, they never had a big win, but they've been at a big fund and hung around for a while. And so they're like walking around and puffing their chest out. And they grew up under the world in which the VCs had all the power, right? And they're used to Nikita groveling to them to get the fundraised. And now the dynamic has totally shifted. And so I think all these people just feel they're like, five years ago I was so important and now like, no one gives a shit that I invested in, you know, whatever exact target 10 years ago or whatever it is.

Yeah, five years ago all I had to do was do like the most obvious deals in the world. And that made me unfathomably wealthy. And today I can't do that. And people are no longer calling me a genius. Is it me or is it a macro? Was it am I good or was the macro environment really good? Yeah, Impossible to answer.

Yeah, it turns out, it turns out like if multiples appreciate by 5x like and you get your pick of SaaS companies, it might not be like you. That's actually the generational tester.

That's right.

A little index to the circumstances of the time. But yeah. Well, I saved this story. We were at, we were at dinner on Monday night and I wanted to hold off on this because it was a cool experience. And so I told these guys I wasn't going to tell the story for them twice and that I would actually do it on the pod. But before we, before we hung, on Monday night, I actually got to go to SNL for the first time. And this is something I've been sitting on. I had this friend who had a friend and he said if ever I wanted to go to snl, like, let me know. And I was like, whatever. And he goes, yeah, ever, if you want to. And so I've been sitting on this for like a year and I saw whatever. A month ago it came out John Mulaney was hosting. And Zach, I know you're a big John Mulaney fan as well. I don't know your. Your take on it, but what you're shaking your head.

I would not call myself. I've seen Mulaney in person once and actually think it's courtesy of Logan, so thank you for that. But that was like the only time ever I don't like Mulaney's choir boy shtick. The only time I enjoyed Mulaney was post reh. Have.

Oh, interesting. It must be the Catholicism. Like there's enough Jewish comedians for you to focus on that. The Catholic comedians. Yeah, that's sort of.

The Jewish comedians don't do the choir boy act. I think it's a whole other. That's like a whole other neurosis that I don't subscribe to.

It is a real irony that like his whole shtick was Catholic, you know, Georgetown dude. And like he had to, you know, go to rehab for three months for cocaine use. Right. That is like kind of an irony. But yeah, no, he, he. It's worth people going back and watching his SNL open. But I went to the dress rehearsal and yeah, he did a whole bunch of thing about like, you know, his friends calling in to his. Into his intervention. Right. And going to rehab for a while and having to delete all his drug dealers phones and all that. Pretty funny bit. But so I'm sitting there and, you know, this is a. It felt like a once in a lifetime experience. And so I'm excited to see John Mulaney lcd, LCD sound systems, also playing who I like. And I have two seats open in for me right before it starts. And then Chris Rock walks in with his daughter and sits down right next to me. And so now I'm like, you know, center stage, snl, Chris Rock sitting next to me, trying to play it cool. And so it ended up being a super cool show. I think the rules were a little different of what I got versus what Chris Rock had to do me. They were like, you show up at 7:46, you're out, right? Chris Rock rolled in, whatever. An hour later, for me, it was like no cell phone. Chris Rock was like texting away the entire show. But it was cool. They had Paul Rudd, Steve Martin, Conan o', Brien, Tina Fey, Candice Bergen, because it was like the five timer thing. So the whole Thing is like a super interesting, cool sort of only in New York experience. So while I love being in LA in the warm weather this past week, there are some benefits to staying in New York.

Did you, did you love being in LA when you took the first flight you could. The second the conference programming was over

to get back, you know, I are

going to have a whole fun weekend together. Logan was like, I will be on the first red eye back to New York. Thank you very much.

I did walk into a party, survey the scene, walk out and catch a red eye. So I guess enjoyed. I enjoyed my time.

Yeah.

Enjoyed it.

Jason.

Yeah, I would say that this, this week was more representative probably of San Francisco than la because it was a VC conference.

I think that's right. Yeah.

That's a.

It's interesting that, like, you know, we talked about this a couple weeks ago, but it's clear these destination events that like, everyone just flies in for like boondoggle networking. Everyone at once. Right. I think that's going to be a rotating thing that, you know, it was Art Basel once upon a time and now it's. It was upfront this month. And I'm sure there's going to be another, you know, Miami Tech weeks coming up. Right. And so I'm sure that's going to be the same thing that, you know, everyone just drops into a city, takes over. It's the worst East Denver, it's the worst week for everyone on Tinder and Bubble in those cities that all these roads come in, start swiping away.

I can't imagine to be a USC sorority girl this week in LA must have been a hellish experience.

Yeah, there was a lot of swiping to get to the. Yeah, to get to the. Well, good. So I think first topic we wanted to cover this week was the first episode of Super Pumped, the Battle for Uber. So for people that don't know, this is a Showtime show based on the 2019 book by Mike Isaac by the same name. The show was created by Brian Koppelman, who was the creator of Billions and Rounders. And I looked through his Wikipedia, seemingly didn't do anything else between the years, like 1998 to 2016. It seems like he took those years off and just did Rounders and then Billions.

But how is that different from VCs?

Yeah, exactly. He's basically a VC.

He did two good deals and then it didn't work for 10 years. Yeah.

So the show focuses on the. The rise and the fall of former Uber CEO Travis Kalanick, who's Played by Joseph Gordon Levitt. Uma Thurman plays Arianna Huffington. She hasn't made an appearance yet. It's narrated by Quentin Tarantino. The series has, has actually already been renewed for another season in which they're going to go into, into Facebook. So they're, it sounds like they're going to keep doing these little like miniseries type things focused on some plot in the tech ecosystem. So I guess just as a backdrop before we dive in, I did my just a quick flag disclosure, blah, blah, blah. My partner Elliot, who recruited me into Redpoint. His sister's Austin guy who is a character on the show. She's featured prominently in episode one. And so I, I'm not totally unconflicted in my, you know, my perspectives on this, but yeah, I'd be interested. Nikita, what'd you think?

I thought it was extremely cringy to watch. Like I, I think they were trying to go for the same vibe as the Social Network, but it just came off so awkward. But at the same time I was really trying to separate whether like it was actually the show or that tech culture in 2010 was that cringy? Because I mean in 2010 it was like the post Facebook like frat era of tech and you know, people were wearing collared shirts and you know, drinking. They had a beer keg in the office. And I think it's, it's like most of us like don't really remember that because it was just. We don't. We kind of repress it actually that, that, that's how an Office was run back then. So yeah, I, but I mean it's still interesting to watch seeing Hollywood's portrayal of, of all this. And I mean it, the story definitely needed to be told.

I couldn't stand it. I mean I felt it was like not. I don't think it was endemic to the time. I think the show was just not a good show. I just read the book. I didn't read the book. Now I can't speak to the book. But I thought the show was like cringy to your point, Nikita, my all of my exuber friends said, by the way, didn't even feel accurate. Like the actual story is so much juicier, at least from the first episode that we were shown. Like the actual story is so much more interesting than what they ended up focusing on. Like, here's a good example of this, right? They talked about the safe rides fee and they called it a Michael Eisner moment. Have any of you ever heard anyone in Sex as Something is a Michael Eisner moment. Like any year, 2010 or today, now.

Yeah. Michael Eisner, of course not. I don't think people have been taking inspiration from Michael. Right?

Like, like, I mean, seriously, like, I was just so off the mark in both the big ways and the small ways that I. I mean, you know, there's the Twitter thread going around for an ex Uber employee who said that Joseph Gordon Levitt had pinged him to hear about what it was like to work for TK and apparently he, like, made a point of not talking to Travis himself when he did the actual prep for the show. So the whole thing to me struck me as like kind of willfully, a little bit telling a story perhaps that was not necessarily a one to one mirror of reality.

What I thought was kind of like missing. And they always do this for any of these, like, tech stories is they. They don't actually tell the origin story. And I think that was probably the more interesting part of Uber of, like, Travis didn't really take the company that seriously at the beginning because Ryan Graves was running it. It was more of like a side project. And I think how it eventually became like a core part of his life and it just became his magnum opus. I think that would have been more interesting to tell, but they just kind of glazed over that and acted like he had conviction on day one that this, this company would be the big one.

Garrett Camp did take an L in the first, like, two minutes of that was just like a brutal opening for him. Just like, yeah, and then I shoved you to the side.

Dork.

It was like, basically they took to a proverbial locker and, like, shut the door.

My new drinking game is every time they have him say, are you sure, TK and like, the world's kind of dopiest voice. Just take a shot and you'll be completely blacked out within five minutes.

Zach, I'm impressed. You. You went with TK as well. It's like you're. You're basically on the show at this point now. You know, I actually enjoyed it maybe to some extent. I live like this period in time, and so I found it interesting. But, you know, I think it had the, the. The thing that they struggled with, which I don't know exactly how. The Social Network pushed through and didn't have this problem in my mind, but they're both trying to stay true to the fact that these are real people, right, and capture some of their essence, but also make them compelling characters. And so I. I thought it was interesting like, the Travis as a character was far less interesting in my mind than Travis as the actual person. Right. Normally, these things rationalize the character on television, and it's actually far more boring than what you get in real life. And here it was actually the. The opposite. Joseph. Gordon Levitt felt like he was. I don't know, he felt like he was trying way too hard. Like, Kalanick had this. This kind of intimidating energy, but also this charisma. And, like, the whole Broie thing. For Travis, it was kind of a shtick. At the end of the day, he was kind of a nerd that cared about, like, the engineering culture, and he put on this, like, bravado over it all. And I. I just think he was a much more interesting, like, complicated person. And just Gordon Levitt, like, the guy that was in 500 days of summer, like, just couldn't really convey that. And so I sort of struggled, like, just watching him. I actually think someone had this observation on. On Twitter, but Kyle Chandler, the guy, Coach Taylor from Friday Night Lights, who played girly here, I think would have actually been a better Travis Kalanick. Like, I think he could have captured that essence of, like, intimidation, but charisma, but, you know, like, could be a little dorky, but also, like, a leader. Right. And just Gordon Levitt just doesn't really have that for me.

Yeah, I think you're right. There was a total miscast. Again, like, it's not shocking when he didn't take the effort to actually go out and talk to the character he's playing, who's very much alive. Right. And presumably would have spoken to him. Like, to me, that's just. It's emblematic of, like, the whole approach to the show, which is.

It's not.

At least the Social Network, for all of its flaws, was a good movie. Like, it's a really good movie. As a matter of fact, I was robbed for Best Picture. Like, that was a fun, great narrative. True or not? Probably not. At least it works as art. This, to me, is. It fails on two levels. It doesn't feel like it's true. And also, I don't think it works as a piece of art either.

What do you think the difference is that Social Network did, like, do you think they. They just casted it better? Because this certainly has elements of the plot now. They went into more of the origin story and all of that, but what do you think, like, this is missing that Social Network got right?

Well, I mean, Social Network was directed by David Fincher. I mean, one of the greatest directors of all time. Cinematography was beautiful. The score was amazing. Like the. The way that it's written by.

Written by Aaron Sorkin. Right. My absolute favorite screenwriter because I'm trash, but yeah, by Aaron Sorkin, who's incredible.

Yeah. I mean, the dialogue was. Was great. The. The characters were all had very strong identities that were like. Like most of them were pretty likable. And I, I think seeing it start from the dorm room level made it feel like this, you know, rags to riches story. So I, I mean, and everyone was flawed and they were flawed in a way that you could understand where they came from. I don't know. I. I think, yeah, I think it was really robbed of picture and it was just an amazing film. I don't, I don't. I. It felt like they were trying to chase after that vibe with this show and they just totally missed the mark.

I almost would rather have seen them not take it seriously. Like, I felt like the Social Network because it was so well written and it was so well directed. Nikita, to your point, the score was so great and it was so well acted. Logan, to your point, right, like, it works as a serious self. Serious piece. Although there are still some lines the, you know, sorry, my prod is at the cleaners. There's still some lines that are sort of ridiculous on their own merit. But like this one, because the dialogue was off and all the small things they got wrong and the thing didn't ring true, I almost would rather them seeing them, like, go really campy and kind of play it up really big and be kind of winking and knowing they're ridiculous rather than try to like, straddle this line of not being hyper accurate, or at least not feeling accurate in an impressionistic sense, but also not being funny enough to be a fun hate watch either.

Do you think we're, like, too close to the circumstances around this, both from a time period as well as like, our careers and understanding that, like, the little offness of the power dynamic with VCs and, you know, all that stuff is actually bothering us more. Like, it's kind of weird for me to internalize seeing Gurley, who, you know, I know know of a little bit, and seeing him as like this, you know, handsome, smooth, talking Kyle Chandler character with his two dorky associates like Kohler and Fenton. Like that actually high comedy that girly. So girly is actually friends with Koppelman, which is funny, but girly gets played by this like, handsome, handsome, smooth character. And then Kohler and Fenton take these, like these dorky Ls with the. With the characters that they got. But I don't know how much is, like, it's bothering me that I have more of an appreciation of the essence of these characters than. Than the Social Network. Right. Obviously, I see Zuck, but I don't have an opinion about Zuckerberg, like, in the nuances in the early days, or I see the Winklevoss brothers, but, like, I don't really have an opinion stylistically about how they operate versus, like, Kyle Chandler throwing on all these, like, hokey Texas mannerisms about. And like, oh, I'm gonna finish your sentence. And, you know, all of that stuff, it just. I don't know, it kind of made me uncomfortable with how dorky it was.

I. I think Hollywood just wants to portray tech in a certain way that they know what their audience wants to hear. They want to see the CEO as the adversary, the VC as this Texan oil man who, like, doesn't look at numbers and just makes shoots from the hip. So, yeah, I think he's been portrayed pretty unfairly over the years. I mean, he's had inexcusable workplace problems. But to be fair, like, Uber has probably saved, like, thousands of lives from drunk driving. And I think when. When these Hollywood writers and reporters cover it, they.

They.

I don't think we should, like, overlook the mistakes, but I. I think the fact, like, preserving human life as a company is a big deal, and it deserves, like, more recognition than what pundits typically give them.

Mention the convenience on the worker side, the convenience on, like, our ability to get around, like, you know, drunk driving. Certainly part of it. And I think they made a mistake of. Of part of what they did super well. Uber in the early days was just kind of power ahead and take over cities and have their users as evangelists behind what they were doing. Right. And I think they missed the mark on not also doing that from a PR standpoint. They used it from a, like, government pushback standpoint. But the number of stories that they could have told about, you know, not driving drunk or whatever, and the number of studies that they could have done. Lyft ultimately did some of these studies of, like, lives saved from drunk driving and all that. But, like, it was so patently obvious to me the benefit of Uber and Travis really let that narrative get away from them, which I think was a mistake. And there's kind of this hostility of the media that I think really started in that period of time right in the tech ecosystem. And I think if he had been a little bit more proactive and collaborative about this. Like they could have owned that narrative in a better way.

Yeah, I'm not sure I agree with that. It goes without saying, by the way, we didn't even talk about some of the biggest stuff saving human lives. Incredible. But also the fact that taxis just routinely wouldn't pick up people of color and a totally normalized thing for years and years. Right. The idea that most of taxi drivers were in hundreds of thousands of dollars of debt to the medallions. Yeah. The taxi commission here is not the good guys in all of these shows, but I think Uber, if I recall correctly, I'm pretty sure they did have partnerships with Mothers Against Drunk Drivers and all the sort of usual suspects you'd suspect. I think Travis, culturally. Right. Like tk Culturally cultural was not the New York Times cocktail party stylistic character. And that's the way most people in tech. Right. Most great founders are not the like New York Times cocktail party attendee. And that's, that's fine. But you know, the challenge is then you get the sort of assorted PR problems that not fitting into that crowd socially creates for you.

Yeah. I think it's the, the, the, it's the, the pattern of like, it's not what you do, it's how you say it. And because of his, his sort of, you know, personality and identity, it didn't matter how many lives he saved. It was more just. He rubbed a lot of people the wrong way.

And you know, the, the taxi cab locally was much more in bed with media and all of that stuff. Right. And so, and so the narratives that that were being spun were going to be much more rooted in the local companies and all of that rather than the, the social good that was actually happening. Yeah. It's interesting to see all this stuff portrayed. It's disappointing that we don't have more of like a three dimensional character. I wonder if there's like constraints given to the time. But it felt like, it felt like they kind of cut. Took shortcuts on the character development with regard to, I mean, all of, all of the characters we saw on screen, it felt like they, they just kind of force fed us that this person's bad, this person's. You know, how many references did they make to like, we don't. At Benchmark Capital, we don't shoot our founders. We leave that to Sequoia. Which one?

Oh, my God. Benchmark Capital. By the, the funniest part of that.

That sounds so awkward. Right. Clearly no one, like, listened to any of this. I, I was talking to a friend at Benchmark and he was like, I've never heard it called Benchmark Capital. Right. And so it's just like, like, come on, these little things that, and so I think they just tried to set up a little too much of like the foreshadowing that oh, Bill is in his camp and now they're using like filling each other's sentences or whatever and like setting up for the, the, you know, thing at the end when everyone knows the story. You don't need to bang us over the head with what's going to happen.

By the way, I will say as much as we're all close to this and certainly not unbiased observers here, like the Rotten Tomatoes score is like 50%, right? So this is not necessarily being widely recognized as some beloved piece of cinema outside of the tech scene.

Well, I guess referenced in the show there was a line about Travis Kalanick that Travis Kalanick conveyed to his brother about Randy Zuckerberg getting rich from Mark Zuckerberg. Now I actually didn't know Randy Zuckerberg was a person until that line happened. And then it just so happened she popped up in my life twice this week. So for people that don't know Randy Zuckerberg is Mark's older sister, it seems like she's become a something of an evangelist for Web3 and she's making these short form videos to raise awareness for crypto and NFT and blockchain or the things like that, I guess. Earlier this week she posted a video that was set to Twisted Sisters. We're not going to take it. And it was called We're All Going to Make It. So Justin, I don't know if you can cue this up for us and we can give at least a little bit of a snippet for people to hear. We're all going to make it. Yeah, we're all gonna make it. We're all gonna make it. Everyone, It's just the start.

So gm, carpe or crypto DM D

Y O R and pick a coin. We'll link the full thing in the, in the show notes for other people to, to watch the entirety. I think I've watched it eight times now or so, but. Zach, what, what? Any thoughts on Randy Zuckerberg's presentation of Web3 here?

I, I couldn't believe she made a video about the future and the entire thing looked like it came out of 1985. Like that was a little bit surprising to see. I don't know, I, I, I just feel like it was a strange, I I just felt like it was a strange video to put out. Like, didn't you guys remember the Capitol holiday videos they used to do?

Yeah.

So I was in one of those a long time ago. And that felt like the good version of this. Right? Knowing, sort of tongue in cheek and on the joke. Listen, I, I have nothing against anybody involved in the video, but it did have, like, big theater kid energy to me in a way that was, like, sort of incongruous to everyone I know in crypto, none of whom have theater kid energy.

Yeah, I mean, for me, it just marked the top for crypto. I think that I'm, I'm, I'm selling everything today.

I actually heard a story, speaking of top of Crypto, of, like, a secondary round going down at multiple billions with all of the money being taken out, and it's called a seed round. And so that was, like, I think it was a couple days before this video was posted, so I think it's fair to not mark the top of Crypto with Randy Zuckerberg. I mean, Mark literally created a platform that people conspired to overthrow the government. And somehow I felt like this was actually worse in some ways. I, I, Zach, you said I don't have any problem with people that made the video. I, I, I don't know. I don't know if I could agree there. I mean, I, I did get whatever, three minutes times, eight times watching 24 minutes of enjoyment out of it. So I can't say I'm totally against it, but it was, the production quality was actually quite well done, and I, Lord knows what this actually costs to make, but, yeah, no, I, I don't know if I, if I would chill for this one.

I will say I've gotten more enjoyment out of watching the video lately than I have out of using Facebook. So in the Zuckerberg power ranking, Randy has outstripped Mark in my world.

My favorite comment on that video, though, was it was like a guy that was based in Ukraine said, I'm in a bunker, and this made my day worse.

Oh, that.

It got like 3000 likes ratio the video.

That is good stuff right there. So I made a list of all the, all the Zuckerberg family videos here, and I would love to get your guys best and worst from an enjoyment standpoint, what you. What you like the most. So there was the Randy Zuckerberg we're all gonna make it video. There was the Mark Zuckerberg smoking ribs. The, the meta announcement video. There was a wakeboarding video where he was flying with the American flag on the 4th of July. And then there was the. The super sweaty All Things D conference where he basically, you know, looked like he was going to collapse on stage because he was pouring sweat so much. Zach, favorite video and least favorite video of the Zuckerberg family here.

I mean, it's, it's. This is a real tough one. I think this is the hardest power ranking we've ever done in all six episodes of the pod so far, but it's close. But I think the number one has to be Mark Zuckerberg smoking ribs. I mean, that is like an iconic all time video that I will spend my whole life. I will never make content as good as that, no matter how hard I try. I got to say, least favorite video probably the 2010 all things the. Because I could very much imagine myself being uncomfortably sweaty at a conference. That feels a little too empathetic to me.

You seem like a sweaty guy.

I don't know that I'm a sweaty guy, but I feel like in that scenario I could be a sweaty guy.

You know, you give off sweaty guy energy. No, I agree. I agree. Wow. Wow.

A little, A little, A little harsh on the pod this week.

Nikita, you're. As a former Facebook employee, this was your grandmaster one once upon a time here. What was your. What was your number one video and what was your least favorite from the Zuckerberg clan?

I mean, he's fully embraced the smoking ribs, you know, video of sweet baby rays. I mean, he has it in the background of all his all hands videos every week. But I have to say that the wakeboarding video, dropping that on the 4th of July was. Was a power move. And it. When it. When it actually was released, it was like, it actually resonated with a lot of people.

It was Mark trying to interview at Founders Fund, which was actually. That was. That was a big hit. Mark was really embracing the American flag and flying. It was actually in Tahoe. I had a buddy that sent me a video before Mark had posted it, and he sent me a video and he goes, I think this is Mark Zuckerberg trying to wakeboard with American. And I was like, that seems very weirdly specific. But yeah, no, I agree that that was also my favorite. My favorite video. The. The smoking ribs one. I actually, I'm gonna rank it last on my list, if only. Now he's. Now he's in on the joke, right? Like, I want the ones that he's not quite in on the joke all the way. And he's embraced that one a little Too much for my liking. So originally I was very high on it, but it's fallen off since then.

See, I, I believe in death of the author. I'm not concerned with what Zuckerberg thinks is the best of these jokes to me. Like the moment of seeing him smoking those ribs forever is so powerful that he can put as many sweet baby Rays sauce packets as he wants on his bookshelf. I'm still going to be a big fan of that video forever.

Hey, by the way, one thing the most awkward part of the podcast here is our request to like and subscribe and tell your friends if you're enjoying it. So here's me shilling once again for our own podcast, Shameless. So one other topic I actually found really interesting this week was DBT Labs, which is a data orchestration company. It's kind of indexed to the rise in data manipulation index to Snowflake and Databricks and all these Amazon Redshift and Google bigquery and all of that. They, they were set to raise a big round at $6.2 billion was the valuation they originally had originally targeted. And they actually proactively lowered the round to 4.2 billion. And not only that, but they actually came out and admitted that and said as much.

Right.

And I knew there was, there were a bunch of reporters sniffing around that knew that they originally had it at 6 and lowered at 4. And so I actually thought it was fascinating. DBT kind of in a masterclass of like PR management actually owned the story from the start and said like, yes, here's why we cut it. And so what Tristan Handy, the CEO said was the investors were ready. It's that we have another set of stakeholders, holders that we care about the employees. He said, the last thing that we want is for our employees or the 300 people that we're set to hire over the coming year to feel like we're not giving them the full opportunity to participate in the upside. So I thought that was actually super interesting. Both DBT handled the PR really well. Instead of the information or someone running a story that hey, this valuation got slashed, they actually owned it and said, hey, this is what happened. And then they actually took the narrative of it and said, and here's why we did it for our employees. Right? And so I think that's an interesting kind of PR move that we're seeing more and more. And it sounds self serving when I say this as a vc, that's like, hey, lower valuation can sometimes times be better in recruiting companies. But you are Getting more sophisticated engineers and more sophisticated executives that are asking about the 409A price which is going to be anchored off of these private round valuations. Right. And so I think this was actually really smart, not, not in a VC centric way, but for Tristan to proactively recognize that the public markets are down 50% and that, that even though he could have gone higher in valuation, setting the bar a little bit lower is going to be enticing to employees.

Yeah, I think a lot of the best CEOs are increasingly realizing that overly aggressive valuations, particularly when there's not a lot of traction to go on. And like so many of these open source projects, and this is not about DBT specifically, but so many of these open source projects are raising so far ahead of their monetization skis that I actually think a lot of the great CEOs in them are realizing it's, it's to, it's to no one's benefit to do that. Right. Maybe actually only to a VC's benefit to pump up these valuations aggressively because it means you can win the deal more easily and you can deploy more capital into these companies. But if you are the, you know, if you're the CEO of a company choosing between a billion or 2 billion valuation on maybe a million dollars in revenue of an open source project, I think you're making your life a lot harder. I think a lot of they are, them are listening, they're making lives a lot harder to raise that higher valuation.

But I mean, for at least his justification, he's saying he can give out, you know, equity awards that won't, that won't go down when it IPOs. I mean, it still would probably be better to give these grants to executive hires that have high headline numbers. Like Instead of giving 10, 10 million over four years, they offer 15. So I don't see how it actually helps with recruiting. I mean, certainly they might quit if it drops a lot, but they'll still be essentially in the money compared to other offers.

Well, two things. One, the strike price on the options, right, is the first and so that gets set lower. But then two, I do think there's a sophistication that exists with executives in particular. You've made this point in the past that are coming from the public markets and they're saying like, hey, that number is made up. Right? And just because one VC said that at a moment in time, said that that is what this is worth and maybe, maybe that was below market, maybe it was market, maybe it above where the rest of the market would have come in. They're saying, hey, you know, I can't figure out what this is, is worth. And so I just can internalize how, how big of a number the billions are in the, in the business. And I can figure out how much revenue the company has. And I can do that math of hey, this is 100x or 200x or 500x. And my company in the public markets is trading at, you know, it used to be at, at 30, 40, 50 times revenue and now it's down to, you know, 15, 20. And so I think it's more that element of it. And so you're right, you could just say, hey, I'm giving a $15 million package instead of 10. But I do think there's some other, you know, sophistication that, that play in the more polished executives or engineers.

Yeah, I think you're right, Nikita, if you're, if you're certain. But if you're, you know, hiring the director who's now first time vp, you're probably right. The headline number is the thing people are optimizing for in that case.

Yeah. But yeah, the 4:9 valuation really fucks up a lot of things for, for all these companies because I mean, if there is, if there is a down round or if the, they're struggling to raise capital, a lot of these employees aren't going to fork over money to pay for those options.

Yeah, totally. And then that leads to like perverse incentives and then, you know, whatever, like the, the employees aren't actually bought into everything. And so, so yeah, it's an interesting conundrum to get in. So I imagine we'll see more and more of this. I actually think it's smart to potentially advertise where interest was from a valuation standpoint. I'll tell you, VCs aren't inherently the ones that are capping price of what people can go to from a valuation standpoint. It's more and more founders saying, hey, this feels like a fair place where there's still a ton of upside that exists for our employees. We still want our investors to, you know, if we execute, do well. Right. And I think that's a, it's a healthier dynamic than what it's been at the path in the past six months ago maybe where people were just trying to raise at the highest absolute valuation that they could. Okay. Another topic of the week was BitConnect founder Satish Kubadhi was just indicted by a US grand jury on charges that he orchestrated a global Ponzi scheme that raised 2.4 billion from investors in a fraudulent cryptocurrency investment platform, the Justice Department said. He was charged in San Diego with misleading investors about BitConnect's purported proprietary technology, which falsely promised returns based on phony volatility software that tracked cryptocurrency exchange markets. Nikita, your thoughts on this?

I feel like the SEC is just taking a dart and just throwing it at the entire crypto industry and just wherever it lands, they're, they're auditing and investigating that company because right now effectively everything happening in crypto is illegal. Because when you're, when you're issuing this either NFTs or stocks or whatever, these buyers are expecting a return and it, it constitutes a security and legally you, every buyer must be an accredited investor. So virtually all like everything happening in, in crypto are these is illegal securities. And it's funny how the SEC frame this as a Ponzi scheme. My impression was everything in crypto is a Ponzi scheme. I mean so, but I, I've, you know, I've, I've talked to quite a few lawyers in this space over the last few weeks and it, it seems like the, the, the perception right now is that there's going to be a big crackdown on all these companies maybe doing was maybe more egregious, but I think it's just a matter of time before the government catches up or changes the laws on needing to be an accredited investor to invest in these non public securities.

Yeah, I mean it feels like the line between what constitutes fraud and what constitutes a business is increasingly narrow in the world of crypto and NFTs these days.

Yeah, I mean I, realistically I, I don't see how the SEC goes after all these types of cases because it just seems like we have, you know, millions of people working on these sorts of this, this technology and, and the public wants it. Certainly a lot of people are losing money through, through scams, but I, I just don't, I don't know how, how this is going to play out.

Nikita. Pro fraud pro Wash Wash trades here. He's. They can't catch you. Everyone just keep running. And you' you think all the G

wagons are coming from. Follow it all the way back, people.

Yeah.

Pump and dump. Wash trade beer.

I know eventually I'm gonna go down

actually matter of time about the G wagon trade you made with 100k or whatever bump you got after purchasing. So they're, they're like.

Well, once they saw that the seats hug you as you turn. This is a, this is a new feature that Nikita showed me in the G wagon this week. When you make a turn on them, the seats hug you. Is that right?

Right?

Yeah. Yeah. And what I usually tell if a girl's riding in the car is it's like having a boyfriend.

Nikita, beer. So alone. He has his car hug him. Yeah, that's.

Logan's a little sharp this week. Has some zingers.

I lack of sleep flying back on that red eye. Yeah, you guys are all collateral damage for me at this point. So. So another thing this week that, that was I, I found interesting was Home Brew, which is Hunter Walk and Satya Patel, a nine year old San Francisco based seed firm has announced that they're making their last new investments out of their third fund and that the fund going forward will operate as a, as an evergreen entity backed only by Hunter Walken and Satya's money. So I. Zach, do you have any, any thoughts specifically about this structure? I think some of us know the homebrew guys and so I actually don't have any, any inside baseball on, on the decisioning. This is all sort of outside in speculation but would love to hear your thoughts as well.

Yeah, I have nothing on Homebrew specifically and by the way, I'm a big fan of Hunter and Satya's both so very like it's, it makes a lot of sense for them.

Keep the deal flow coming guys. That's what I. Yeah, please.

Yeah. Hunter and Satya, we're, we're big fans. What I will say is like, I think it does make sense. I mean just look at the market for a second. There's a, there's a swath of GPs who have done phenomenally well in the last years. Right. And some portion of those are going to retire and say hey, you know, no more. And we saw that happen this summer. A bunch of those folks, right. And some swath. I actually think an increasing swath are going to do what Hunter and Satya have done.

Right.

And say, hey, we've done well. This entire, you know, macro tech market's done quite well for us. Why wouldn't we now go and transition to only managing our own money and avoid the stress and the hassle of, of all the things that are involved when you take money from others.

Right.

I actually makes a lot of sense and by the way, you see it all the time in every other vertical. Why not in venture?

Yeah, that's what I think is actually, I mean that, you know, 0.72 when Steve Cohen was actually kicked out of trading other people's money for a long time.

A different, a different outcome certainly.

But in the, in the hedge fund industry, like people have made so much money and have moved more and more to being family office structures. Right. And yeah, whether or not it was illegal or not, the reasons that they, that they were forced into doing that. So I think it is interesting. I mean it's a lot easier to make. You can write smaller checks and you're not dividing the money you get back by. It's not 20% or 25% or 30% or whatever in the carried income that you get back. Like all of it's yours. And so you can be a fifth the size, a fourth the size, a third the size and actually be able to generate more money for yourself. And I think it actually aligns interests with founders as well. If you're going to say small. Right, right. Like it aligns interest for Satya and Hunter to be able to stay small and still generate returns. And also it aligns interest from the founders that they're able to, they're able to still get their involvement without needing to be force fed huge chunks of capital.

I, I mean as, as an investor, I probably want to follow on, on all their deals because now it's their own money at stake, 100%.

We all have to put our own money at stake. But yes, 100% of their own money, to be clear.

I mean all my, like everyone, everyone I know is, has their own rolling fund and they constantly send me deals and I'm like, how much of this is your own money? Like, because I, I don't have my own fun. I'm just putting in my own checks. And they're like, well, all my deals are marked up 5x. I'm like, what, what does that even mean?

So syndicates and rolling funds are like the least amount of your own money. Right? Like that's like the least levered relative or sorry, the most levered sorry relative to like the Logan's of the world who have to put a. I don't know what Logan's GP commit is, but sizable.

Yeah, yeah, yeah. My debt is bigger than my, my assets versus liability math is not great. I, I do think that's, it's an interesting point. Do you structurally, do you know with these rolling funds you have to put up 1%? I assume legally you have to put up. That's the, I think that's the legal bare minimum that you have to put up.

I, I think so, but I, I think that percentage drops very quickly once the checks start rolling in. Yeah, the strangest thing. So I, I've, I'm in a couple, and you put in your bank information on the Angellist page, and they just pull money from your account, like on a quarterly basis without even you telling. Without, without even telling you. And I, I, I eventually logged in. I'm like, whoa, whoa, whoa, what's going on? I had to, like, turn them all off because they were like, just depleting my entire bank account.

What's easier to cancel? The New York Times subscription or a rolling fund subscription? Two very insidious things.

Yeah, Yeah. I mean, you have to, you have to like, like email angel list to get, get it turned off. So it was kind of an ordeal.

Yeah, I bet. You have to show up in person and like.

Yeah.

You actually have to track down Naval and grab him and wrestle him to the ground and be able to turn off Angel List. Yeah, that's right.

You have to personally fight each rolling fun lead to get your money back.

I guess as our usual outro here, normally we do a tease of Nikita's revealing his app. We, we actually just found out for the, the joke, I guess, has been that we actually didn't think Nikita had an app, and so there was nothing to reveal.

But it sounds like Nikita.

We. You actually are building something now.

I am building an app.

Wow. So we don't even need to tease it. It's actually something real. Do we have a name yet?

Not yet. I don't know if it'll even launch, but Toiling away.

Wow, I can't wait.

Well, what I just heard is everyone send name suggestions in Nikita's inbox. Just tweet at him and give him your best ideas.

What I heard is if you just start wiring money to Nikita, he has to take it. That's how I interpreted that sentence.