The Exchanges

Q You bring up Slack and Notion a lot as sort of these outliers. I'm curious, what do you think the two have in common that let them be the aggregation that most people aren't tool builders?

A Well, so obviously one person can build the Notion that other people use, and it's a lightweight collaborative database system that doesn't otherwise have kind of good parallels. Slack had a network effect in that, um, One team would use it, and then someone was working with that team, so they would use Slack, and then their team would use it, and then they, so it would kind of spread organically. There were very, very few pieces of enterprise software where that's actually happened, and where that's worked. Um, it's like the Slack, and that's about, there's like one other I forget. Um, and what this is, you know, it's kind of the point I made at the beginning of the essay, was there was this whole story, kind of, 1015 years ago in the Valley, that like, Enterprise software will become grassroots. It'll be bottom up, bottom up enterprise, bottom up sales. You won't have to go through the sales process. You won't go to CIO. You won't have to wait. They go through an 18 month sales cycle. The users will see the thing and buy it. And it turned out that that gets you five percent of the market. And for everyone else, no, actually you need to go and evangelize. You need to explain to people why this is a thing and why they need it and why they need to budget for it and why they need to buy it. And, um, you need to explain to people why, what, that this problem exists, and then you n…

AI assessment note: “one person can build the Notion that other people use... Slack had a network effect”

Q would live in a different universe. Like we don't, that's not, that's not possible, but you can find kind of poke away and ask, well, how do we think about what this could be and what you might be able to automate it, automate with it? And we've had this conversation a lot of like you and I sort of sitting and thinking like, what do we use this for?

A Yeah. And it took me a while to realize, oh, wait, the reason why benchmarking in this space is so much more complicated than trying to evaluate, you know, traditional software is the diverse skill sets and use cases. Hey, there's that like the diversity of how this can be used, but also what's actually possible today versus how this actually is going to be used in 1015 years just makes it incredibly complicated to try and figure out a how people are using it, what makes it good or bad. And to your point, you might find one specific, you know, application and go, this is actually brilliant and genius for me. And I'll look at it and go, I have no idea how I would ever use this. Um, okay. That's bucket number one. What are your two other buckets?

AI assessment note: “the reason why benchmarking in this space is so much more complicated”

Q So how do you reduce it? How do you create a fair process? Is that even possible?

A So I, so I think there's two ways to come at this. One of them is to say, um, That, um, you, on the one hand, need to try and solve it, and on the other hand, you need to understand that there will always be mistakes, which is, you know, the UK post office scandal is companies, post office deploys database, database has bugs, post office that shows shortfalls in cash, post office sues hundreds, maybe thousands of people for theft, hundreds of people go to prison. At no point does anyone in the post office admit that there are bugs in the database. Now that's, SQL, you know, this is 30 year old technology. There's a deeper problem here, which is it now appears that people inside the post office actually did understand that there were bugs and tried to cover it up, which at which point you're in a different problem. Um, but the point is like, you know, we all, you know, we all sort of understand in principle, the computer should be wrong. And if there are bugs in the computer that are ruining people's lives, then that's an institutional problem, not an engineering problem. I mean, it's an engineering problem too, but the backstop has to be a willingness to consider that the computer might be wrong. I think that, so this is that, so those are kind of the two parts to it. I think the other side of this is when you're actually making things, um, there's a real ideological puzzle her…

AI assessment note: “the backstop has to be a willingness to consider that the computer might be wrong.”

Q know, the price can come down in principle and the weight can come down in principle. You know, the chips can get smaller. Maybe it doesn't need the screen on the outside, you know, maybe the better materials, et cetera, et cetera, et cetera. It's like, you know, with all of these things, you have to ask, okay, if this was smaller and lighter and cheaper, would I want one?

A And the only comparison I have is I went out and bought the very different tech, but the Ray-Ban Meta Glasses, Price point, really affordable. They Ray-Ban sell glasses that are more expensive than the price point of these meta Ray-Ban glasses. I can see, I have a few couple of instances where they're very cool to use, like being inside of a garage, being able to lean into a Formula One car and stuff like that. But on the day-to-day, and easy, I've put them on my face and completely forgotten that I have them there. I've actually used them more to listen to music than I have to actually take pictures. Because I might as well, if I want a good picture, I might as well just take out my phone. And quite frankly, the picture of a POV of my face just doesn't. I've also banned my husband from taking pictures because I've realized how tiny I am compared to him.

AI assessment note: “the only comparison I have is I went out and bought... the Ray-Ban Meta Glasses”

Q And you think we're in that phase right now with AI? Yeah.

A The other answer is until the internet, most people actually didn't have a reason to have a PC, which is why very few people did. I mean, they were expensive as well, but there actually wasn't a very good reason for most people to have a PC until the webcam launched. Um, but, but you've got like the, you've got this general purpose computer. Um, what do you use it for? If it's, you could do anything with it. Okay. Like what? Well, anything. Yes, but like what? And then when you poke away at those anythings, it works much better at some of them than others. Um, hence if you think about, like, the early, the cases where we really seem to have traction with LLMs right now, um, it's kind of an interesting contrast. On the one side it's code. It's helping you write code. So it's things where every, literally every comma and semicolon matters. And you can't have any mistakes where it's useful because it fills in a bunch of stuff and it's very easy to see the mistake. If you are a software developer, you know, that should be, it's forgot the comma, but it's still really useful for it to fill all of that in for you to give you that first draft that you can fix. And the other side thing that's really useful is brainstorming.

AI assessment note: “hence if you think about, like, the early, the cases where we really seem”

Q Which I feel like is, yeah, it's always the story in tech. What are the, what are the pieces in tech that are useful for us to understand how it works, and what are the pieces where we just don't care how it works? Based on another conversation we had this week of, we don't care how the Wi-Fi gets into our house. It's here. It works. Great.

A Yeah, exactly. And as I sort of said, right, there is a sort of counter thesis that says, no, this will be so much bigger and so much more powerful. It will not work like this. I mean, in a sense, all of these sorts of arguments are really, is this going to work like every other tech cycle? That will be verticalized and horizontal. There will be stuff that's done by hyperscalers. There'll be stuff that's done by startups. There will be stuff that disappears. There will be new features. We will change our work around this. And in 10 years time, we'll have forgotten about it like we've forgotten about machine learning, like it's just software. The counter argument is to say, no, this is going to be like a fundamental step change in generalization, and most of what I've been talking about is why, yeah, maybe that might not be as easy as it sounds, like a generalized, completely generalized interface. I mean, you know, we talked about error rates at the beginning. I think you could hypothesize that even if, you know, you were using a chatbot to talk to an AGI, it still would not be the right interface. Like, if you're using, you know, like as a kind of thought experiment, if, if, if, if at the other end of a chatbot was a person, if, if JackGPT was actually not, if it was actually a bunch of real people, then it would always be right, but that still might, might not be the right in…

AI assessment note: “in 10 years time, we'll have forgotten about it like we've forgotten about machine learning”

Q Met Horizons is a social app, but you start in a three-day environment and you can launch all sorts of different apps. So it's not just a social thing, but it's where is it that you come from? What is it that you think you should be trying to do? And I think Apple has sort of made the opposite trade-off to Meta. Every step all the way through this.

A It's also interesting when you, and again, I'm still stuck on, um, on the pricing of what are people most likely to do? Are you most likely to buy? You know, obviously not everyone. Fewer people will spend three and a half thousand US dollars on this thing, but the MVP being so good, will they look at it and go, holy shit, this is incredible, and I can't wait for the next version, versus meta, where it's just like more people are going to buy it, but more people are going to struggle with it and go, I don't get it, this is not perfect, I will never buy this Again, like, it's always an interesting, like, what's the habit of your consumers here?

AI assessment note: “Fewer people will spend three and a half thousand US dollars on this thing”

Q And what does a successful, where I keep going to is, what am I, not me personally, but what are we trying to achieve? What, what's the outcome that would make us all feel that this is the right outcome, and I put right in quotes here, in air quotes, but.

A Yeah, well this is, what's the underlying policy objective? Yes, the artist should be able to live. How many artists? On what basis? What does that, what does that mean? And we kind of went through this with music, um, And we are now back at the point that revenue from the recorded music industry is sort of two thirds of what it was in 2020 adjusted for inflation, sorry, in 2000 adjusted for inflation and is heading back upwards. But then there's a whole argument about how you distribute, um, the money from streaming. Um, cause as, as, as it's not to go down a rabbit hole, but as you know, basically the formula is that, you know, this is the total amount of money that Spotify gets and you divide it by how many plays you got. So if you've got two percent of all the plays, you get two percent of all the money if you're Taylor Swift, and if you get, you know, um, and of course the problem, then you kind of get a problem because you've got, you know, so, well, why does a play at a half hour track count the same as plays as a three minute track, um, which is an issue for classical, um, does it, because there might be three tracks over lasting an hour and a half, so why should that get paid, paid the same as three tracks from Taylor Swift? What about a 32nd noise track? What about all the people pumping Spotify with white noise, um, and a spam? Um, what about somebody who's a super f…

AI assessment note: “what's the underlying policy objective? Yes, the artist should be able to live.”

Q And then there's a fourth question, does it need VC money if it's not a tech company, if it's not tech related?

A What kind of, you know, who is it that invests in those kinds of things? I mean, there's a much more, there's a much more general conversation I've had a bunch of times in the last couple of weird years, just sort of along the lines of a presentation I did at the beginning of last year called The Great Unbundling. Like, there is clearly going to be a wave of new company creation, right? Outside of software. So whether that's apparel, or retailing, or restaurants, all sorts of things, like the whole basis of how you buy stuff online changes. 40% of UK retail is now, non-food retail is now online. All of the Media channel, the way you acquire customers changes. The retail channel changes. The way that you would build a brand changes. Every component of that gets kind of broken up. So there's going to be a whole bunch of new companies created here. Half of them will fail. That's fine. A bunch of new companies will get created. Those companies are probably not 20 or 30 X returns. You know, they're not going to put, you're not going to go from a five million dollar check to a billion dollar exit, but they are somewhere further along that risk reward curve, and they might be, there's a lot of three X exits in there. There's a lot of new Victoria secrets and gaps to be, and all birds to be created in here. There's a bunch of Sephoras to be created in here. There's a bunch more Warrior…

AI assessment note: “Those companies are probably not 20 or 30 X returns.”

Q probably an Oracle database and there's a thousand people in India processing them. But if you were a Silicon Valley company, what would you say when you heard we have two and a half million invoices a year, you would start thinking of product. And that to me is what digital transformation means, is what would all the product be that you would do now when you hear that number?

A I love that. I was on the call with an institution or a company that's been around for more than 70 years, and we were talking about doing an ebook with them, and we spent a big 40 minutes of the conversation talking about how they were going to get this ebook on their website and how people were going to download it, because the software that they had or the website that they had, and to your point, The tech stack that they had would not allow for an ebook to be easily just uploaded. And I was just thinking about this. It took me two seconds to get that on my own website, but obviously my own website, to your point, I'm using tools that were built a couple of years ago by people who saw a problem, saw a solution straight away. Um, and so it was just a really good reminder of, oh, I'm working with an institution that's been around for seven years. Who's probably.

AI assessment note: “I'm using tools that were built a couple of years ago by people who saw”

Q Yeah. It's, um, can you, I don't know if those numbers break down into luxury goods versus necessities, because I thought that was interesting also. I was looking at an OECD report that was saying that There's been a shift in e-commerce from luxury goods to necessities, which ultimately makes a lot of sense. Um, but just, yeah. Any, anything interesting there in those numbers?

A Well, so yes and no. So what both the US and the UK give you is, and there's sort of several things to say here. So they get, they do a split out of e-commerce by category, but online and it's online owned and it's by retailer category. So they have online only retailers and then a couple of other categories. So they have grocery, they have home goods, they have clothing, and a couple of others. And so the picture you get is that online-only retailers, which means Amazon and anyone else who only has a website, doesn't have a store, physical store, is about 50, 50 to 60% of total e-commerce. And that's been gradually drifting down over the years as more and more e-commerce cities and Amazon, basically, like more and more physical retailers build an e-commerce presence. And that dipped down a few points in lockdown, basically because people had to buy more stuff that was from people who aren't Amazon. Not like a really big change, but it's kind of noticeable in the chart, and I posted that chart as well. Um, there's a little bit of texture within that, if I can channel the way equity analysts talk, can you give us some texture on that call please? A little bit of texture in the US, um, online clothing sales, online sales by clothing retailers. Doubled.

AI assessment note: “they do a split out of e-commerce by category, but online and it's”

Q your iPhone isn't in any of the pictures that we shoot that weekend? Which then becomes a really interesting question of what's going to happen if you close a deal with Apple? Apple is going to, I don't know, it becomes interesting when Apple is selling Products and services, and now getting into the, the media rights space, the exclusivity contracts in Formula One are going to get really interesting.

A Yeah, I mean, I think there's a whole media rights and advertising story there that's, that's, as it were, a TV industry conversation. The Apple conversation is, it's just like, I mean, there was this story a long time ago, um, that I think it was, um, Seagram invested in a company in Hollywood, um, in one of the movie studios for some reason, sometime in the sixties. So way before Edgar Bronfman and, and, and Universal, it was sometime in the sixties and they bought a stake in one of the movie studios and old man Bronfman who'd, Created this thing. It's basically selling booze to bootleggers in the twenties. Bill created this giant brewing company called Canadian Brewing Company called Seagram, which no longer exists. Anyway, so they, they own this stake in, as it might be MGM, and old man Bronchman says, that's a lot of money for young Edgar to meet some actresses. To which young, young Edgar says, it doesn't cost that much to meet actresses. That's not what you, you don't need to spend that much money to meet actresses. And there is a little bit of like, you know, is this just like the vanity trip of like, They like having the shows, and Eddie Q likes being the big deal, having the big checks in Hollywood.

AI assessment note: “is this just like the vanity trip of like... Eddie Q likes being the big deal”

Q further question, which is yes, might it, but might it actually replace the entirety of everything you do? And we saw this kind of completely cack-handed attempt at doing this from, from, from Rabbit, which is now well on the way to being a smoking hole in the ground. Um, but, but that's kind of the thesis. Is you can take, take over, you can take over all of it.

A And it's interesting because I think you start to see, you start to see that a little bit of just like all the different things that you do of how they're starting to come together. And what I mean by that is, for example, like CapCut is being much more integrated into TikTok, CapCut being an editing tool that has a lot of AI features being embedded. But it's interesting, whereas you would previously maybe open CapCut, edit your video, then open TikTok, post the video. Now TikTok is saying, well, CapCart is embedded into TikTok, so don't even leave TikTok to use CapCart. Start doing it. It's interesting how all of these little tools and little workflows, I shouldn't say little, but are coming and piecing together a broader workflow within the same space, which is just fascinating. In that space, I'm just like, how do you get more people to use these tools without leaving your app?

AI assessment note: “you start to see that a little bit of just like all the different things”

Q So you can either look at that and say, well, then we should be terrified because we've got no way of knowing if it's going to get there, or you can say, well, it's got no way of knowing whether it's going to get there. Why are we even talking about this?

A You know, it's funny that, that feeling for me has been best encapsulated in how fast the European Union Basically struck a deal on an AI act and we're like, yep, 20, 24, we're going to have regulations on AI. And I don't think I've seen the European Union come together so fast on a piece of technology. So new in inverted commas. Um, and I was just like, oh yeah, this is a feeling that even at the European Union level where they're like, we have no idea what this is, but we know we need to move and we need to act fast and they're not the fastest on this kind of stuff. So it was interesting for me that encapsulated everything that you've just laid out there, which is, we don't even have the basic information here.

AI assessment note: “that feeling for me has been best encapsulated in how fast the European Union”

Q get turned into those? But there's a sort of second point, which is, well, can Google do this? Why can't Google do this? Why is OpenAI breaking out? But there's a third layer, which is simply doing a new search engine with a completely new user interface could be an opportunity to take share, even if it's actually just a Up front and onto the same thing you had before.

A And you know what's interesting hearing you talk about that? I was messing around. I can't, there's so many of these talks as we talked about last, last week as well, but I think it was something called avatar AI, where you can like, you know, talk with people, whether it's a Lewis Hamilton or Barack Obama, you name it. And I realized I was doing, I was doing a back and forth with fake Lewis Hamilton. And I had the moment of, wow, I've just spent So to your point, when you go to Google and you type in something, you leave pretty quickly the moment you have your answer, which got me thinking about your point, like advertising and time spent. We know that this is something that TikTok has done really well. It's like, they've managed to keep people on the platform scrolling for so long. And I had this moment the other day with this avatar. I was just like, I've just been sat in the same page and the same conversation in the same chatbot for 30 minutes. And I couldn't remember the last time that I'd spent so much time honed in on something. I was like, this is a whole new opportunity here to your point about how you How you think about how people are spending their times and when they're spending it and keeping them in the same space and just like thinking about ad revenues and different models as well.

AI assessment note: “this is a whole new opportunity here to your point about how you”

Q Yeah, yeah. Oh, that's an interesting thought. Are there other examples that you have, like Bloomberg, of things that just weren't, to your point, that's never going to be disrupted because people just don't know exists, can't have access to it?

A I don't know. I mean, you know, there are, you know, there are whole worlds of, you know, there's a huge wave of stuff going on in fintech at the moment. Um, and you know, people who know a lot about fintech and use words like rails, which is not just not my field. No, in a sense, I don't know. I don't know that field. Um, but those, that sometimes those arbitrage opportunities are kind of hiding in plain sight. And, you know, as soon as somebody says, hey, you could do this, people go, oh, wow. Um, I mean, that's like, um, you know, one of the companies I talk about a fair amount at the moment is frame.io, which again, you know, As soon as you say one person edits a video and 10 people need to see it, and that's a spreadsheet with time codes, you go, well, yeah, that should be software. Um, but until somebody actually says, hey, here's this opportunity, you know, nobody knew it was that, or nobody, you know, and people, and of course, people who are doing that wouldn't necessarily realize it. But that's, again, this kind of, we kind of circle back to this point, you know, would they get into this industry? And maybe this is actually kind of another kind of useful framing. Would Google get into frame.io's business? And again, of course not. Um, there is this phrase that I think, Larry or Sergei, Larry Page or Sergei Brin co-founders of Google used, which was, um, the toothbrush…

AI assessment note: “one of the companies I talk about a fair amount at the moment is frame.io”

Q a tech company or is it a fashion company? Can we just say it's a brand new fashion company built in an era where tech and digital is first? And so that's a new type of fashion. That's a new type of fashion company. That's not a tech company. It's just built today. Like, cause it's brand new, isn't it? She, and it's, it's, it's a couple of years old.

A So I think you could certainly say, um, it's a company that leverages a new channel, which is my, the point of my kind of Walmart analogy, you know, is Walmart a car company? I don't think that's a very productive conversation. Is it a company that presumes everyone has a car? Instead of a company that presumes everyone walks to a supermarket, what does it mean if everybody has a car? How do you build your supermarket in different ways if everyone has a car? If people are driving away with what they bought instead of walking away with what they bought, what does that mean? Um, and I think, you know, you have to think about how good the car park is. You have to think about what it means that people drive there and sort of, and so I think that is kind of the Shopify point.

AI assessment note: “it's a company that leverages a new channel, which is my, the point”

Q It's interesting, is it also for a small group of people, or is it going to actually happen in our day-to-day lives for all of the normal people using it on a day-to-day basis?

A Yeah, I mean, is it more like the web, or is it more like open source? Um, and of course, you've also got to kind of strip aside all of the, the absurd amount of noise around it, for people who say it's all a Ponzi scheme, and people who say it's going to replace civilization. You kind of have to strip both of those apart, and think, oh, in five to 10 years, five to 10 years time, you might be able to build Facebook on this, and what would that mean, and how would that work? Um, the other extreme might be something like, um, cars, say, where we don't really know what or when autonomy is going to look like and how long that's going to take, and it may be that we never get full autonomy, and full autonomy is a bit like general AI in that, you know, this is a joke in AI that, you know, AI is anything that doesn't work yet, because as soon as it works, people say that's not AI, that's just a database. That's just image recognition. That's just, that's just, you know, pattern recognition. That's not AI. And it may be that, you know, we have a car that can drive itself by the freeway, but you know, you have to take over when you leave the freeway. And so people will say, well, that's not full self-driving. That's just driver. That's just lane keeping. That's just driver assists. That's just automatic braking. And we, we never get full autonomy. So we don't know. It's one of those thi…

AI assessment note: “So we don't know. It's one of those things where like come back”

Q But that's why we wanted to have this conversation of like, what are actually the interesting questions to ask about this topic?

A It is. And I mean, I think, you know, the, the, the, The framing that I often kind of come back to is to look at the, you know, to compare this particularly in the way people think about it in the way the state of development to compare it a to the early internet and b to open source in the nineties. The early internet in the sense that again, yes, everyone thought this was bullshit one and two, it was incredible. You needed to be incredibly technical to get anything done. And it was not obvious what you would do with it. And again, whenever I say this on Twitter, people say you're an idiot. There were loads of useful things to do on the internet in the seventies. And I said, Who was on the internet in the seventies? There were useful things for those people to do, but if you got on the internet in 1993, yeah, I could send email. To who? To other internet people. Not to anyone else. And so, you know, and meanwhile, if you actually wanted to do anything, um, it was totally unclear, and I think we talked about this briefly on the last podcast, it's very unclear what the endpoint was going to look like. So not only were there all these layers in the stack that you had to So you had to get a modem, and you had to set up TCP IP on your PC, which, and it didn't come with TCP IP, so you had to know what that was, and then you had to get it from a software shop, because there was no in…

AI assessment note: “the framing that I often kind of come back to is to look at”

Q the weeds and the infrastructure. Like that's the last thing we need to think of. Um, Which becomes fascinating, because I always wonder, like, why are people interested in web three right now? Is it because they want to think of a new way to build that infrastructure, or are they more interested in that projection of what could be and what all of this could build down the line?

A So I think, look, crypto has clearly had these sort of successive waves of enthusiasm, and there was a sort of huge bubble sort of four or five years ago. There was a huge spike in the chart. Now we've kind of, we're in like last 18 months or two years, this is sort of massively elevated price. And of course, you know, it sounds very cynical and unkind, but when somebody, some people are getting very, very rich from something, that does occasionally change how they think about it. It could change how they think what it's going to be. Um, now we've clearly, we've had this sort of, this huge surge within that, we've had this surge of enthusiasm for NFTs. And, you know, it's almost like a kind of a microcosm of my point that by talking about that Web three is an attempt to Shift the discussion from saying this is digital gold and that's all it is, and it's, and it's a cryptocurrency. It's to get away from talking about currency and to say, no, it's a platform, which I think I'm, if I haven't said explicitly, like, yeah, I get that. I believe that. Definitely. Um, but, but the, the end of my, my point is, so if web three is a sort of a rebrand of, of, of crypto and NFT is a sort of a, there's a microcosm of NFT in that because clearly the wave of, of excitement was around these sort of various kind of collectible digital objects. And again, I have no conceptual problem at all with …

AI assessment note: “Web three is an attempt to Shift the discussion... to say, no, it's a platform”

Q or you're trying to take out one feature that actually wouldn't work if it's trying to be implemented in a different market because, again, just the differences between the horizontal approach to the vertical approach. I'm just... What is it going to take if it's like beyond the willingness to do so? Like, are there fundamental things that need to shift for those technologies and that innovation to be applied?

A I've definitely still seen successful cases of people having, uh, kind of seen Chinese innovation having kind of, uh, like applied it in the West. I mean, actually I've been reading like the Jingdong, um, Mai Cai and Miss Fresh IPO perspectives, but you know, they're all about the 30 minute gross, the 30 minute grocery deliveries in first year cities, which reads a lot like the current wave of startups that's raising huge amounts of money in both Turkey and like Uh, Europe during the pandemic, right? So, um, definitely never say never. And also, you know, companies like, uh, Cider that just recently raised, you know, they were, they're saying they're kind of doing the Gen Z version of Shen and Italics to a certain degree as well, right? Kind of copying this kind of consumer to manufacturing model. Um, so I would say definitely it is still possible for Western startups, um, to, Borrow, uh, inspirations from kind of successful Chinese startups. I think it starts off with probably, you know, being, having an Understanding what's happening there, and then kind of going one little level deeper to sort of, you know, getting to understand, like, okay, understanding that successful and hot, and then knowing why exactly that is, and then thinking what enablers does China have that we don't have that would make this impossible, or at least, um, or maybe, you know, it doesn't have this, s…

AI assessment note: “I think it starts off with probably, you know, being, having an Understanding what's happening”

Q oh, well, and that was always one of the tensions between sales and engineering. The sales will be, well, I sold the deal, and they're going to get a discount every month, and then it's going to be, and the engineers would look at them with like deaf eyes of, That is not a thing that our billing system or any billing system can do. What are you thinking about?

A Well, so the loop, the reason that I remember this is that the startup that I was working with, um, they were basically a layer on top. And the idea, the original idea was that this was going to be a platform to allow telcos to sell to MVNOs. So, you know, you're going to have five, anyone not know, MVNO is a mobile virtual network operator. So they buy that capacity on the cellular network at wholesale. And then they resell it on with their own brand. And there's a lot of different degrees of difference. Sometimes they have their own SIM card. Sometimes they don't. So this is what Virgin Mobile was is, for example, is they don't own the network. They're renting capacity on someone else's network. And of course, as a, as a mobile operator, you need a software system to support that. And so the idea was here is a software, it's called an MBNE, Mobile Virtual Network Enabler. Um, at one point, this is all very exciting and interesting now, very much isn't. It didn't really turn out to be a big business, and we could have a whole conversation about why MB&As were not a big deal, except in some places. So in some places they're a huge deal. Let's forget that. Never mind that rabbit hole. Um, the rabbit hole I wanted to go down was that the idea of the realization of this startup was, no, actually what we can do is we can sell this to telcos Not to enable EMVNOs, but as a layer for …

AI assessment note: “now they can actually have a system where they can change the price every day.”

Q And are they allowed to make real time adjustments, make adjustments to the cars?

A Oh, good question. Yes and no. Um, there's a whole thing of being in Park Fermi, which means that you can't touch the cars, and you can, and actually something that we haven't said, the most bizarre thing about F-One is with every other sport, you can kind of pick up your tennis racket, you can pick up your ball, you can pick up your cricket bat, and you can practice. You can't actually just jump into an F-One car and practice, and so for some of the new drivers, the first time that they're getting into an F-One car is during a free practice session, which happens on the Friday of A race weekend. And so you're practicing in broad daylight with, you know, obviously spectators because people come and watch the free practice sessions. And these are the only times where you can kind of tweak the car. And this is when you're learning. And so I had a whole conversation with someone around comms in F one. You can hear when you're watching, uh, an F one, um, race, you can hear the comms coming from the drivers and from the pit lane and back and forth. And so someone was asking me a question going, Hey, does everyone hear the communications that's happening? And yeah. That was, you know, it was an advantage in the days. You would listen to other teams, communications and comms to understand how they were, what they were doing. And so that is, they are tweaking and changing during the fr…

AI assessment note: “Yes and no. Um, there's a whole thing of being in Park Fermi”

Q How realistic is that, that that stays, by the way, at that? How realistic is that it, I know it's hard to do those kind of predictions, but...

A Well, it, it's, I, you would be very surprising to see another wobble. I don't, I think it would have been hard, I think it would have been hard to predict where it would settle. Would it, will it settle at, you know, will it settle at 45% or 35%? Answer it settle at 40%. Like, who knows? But it settled there and it's bouncing around there for the last couple of months. The same in the, the same for the, the share of total. Grocery is actually equally interesting. Grocery is about a third of UK retail. Well, not food, predominantly food is the category, just supermarkets. It's about a third of UK retail. It was at five percent online in the beginning of the year. It stepped up almost overnight to 10% and has stayed absolutely steady there for the last couple of months. So you just get this step. In fact, it's wobbled a little bit around that, but it's basically been completely steady. And so UK grocery, online grocery sales doubled overnight, went from five percent to 10%. Now, I remember when I was at Andreessen Horowitz, we had these Thank you. We invested in Instacart quite early, and I remember being in the partner meeting explaining this thing called Ocado.

AI assessment note: “you would be very surprising to see another wobble”

Q there should be regulation. But you're in this sort of really weird new sphere in which there's like 15 people in the San Francisco Bay Area who could theoretically decide what presidential candidates in Australia can say to the electorate. At least in like a kind of major chunk of how they would say it. And they're like, yeah, yeah, yeah, we, do you want us to have that power?

A And that's it. And they probably don't. And you talk to most of these tech companies. I think this is the, this is the thing that really gets me pissed off is when you listen to the academics or the journalists, it makes it sound as if, you know, the heads of these giant social media platforms want to be making those decisions. I think you'd ask any of them and they say, God, no, I absolutely don't want to be in charge of what we sense and what we did. If we could take away that problem entirely, which obviously you can't, but they don't want to be seen as being the world's, you know, global sensors. But there's something there around also of what you said, Which is the, there's a fundamental, in my opinion, difference that needs to be made between the social media platforms. And again, how do you define them? Are they a tool? Are they content creators? Are they, you know, editors, whatever you want to call them. And we can have a conversation about that because I know you've got thoughts about that, but also that we've got to make a difference, but basically between the social media platforms, where you go to have your voice being amplified and the software companies. And it was something that we, again, when I used to sell campaigning Software struggled with a lot. A, because it was political and it was, there's a massive difference in the US versus Europe. In the US, campaig…

AI assessment note: “the heads of these giant social media platforms want to be making those decisions... God, no”

Q I did have one question for you, and maybe it'll come back, but... Does anything surprise you when you, as someone who's watched these events religiously every year or however, I don't even know if they come out twice a year or once a year, it's once a year, isn't it? Um, does anything surprise you?

A So, kind of coming back to what I was sort of saying earlier, like, there's a point about the, well, sort of rephrase this point, the technology sort of develops in S-curves, and there's a moment when it, there's a point in time where it's improving visibly very quickly. And, you know, the point in time, kind of 10 or 15 years, maybe 15 or 20 years ago, if you bought a new PC every two years, it would be dramatically better. And today, it really wouldn't be. The same thing like buying cars in the twenties and thirties and forties, they were dramatically better. And now, if you buy a new car, you can't really tell the difference between a new car and a car 10 years ago. And it's not like that the industry forgot to innovate. It's like they've added airbags and crumple zones and air conditioning and electric, like they've done everything. And that's kind of where smartphones are now, almost. It's certainly where PCs are. And it's kind of where smartphones are getting to that point as well. And yeah, the camera is, there's a camera and there's five G and so on, but basically you've added most of what you, the obvious stuff that was on the list. And so the pace of visible improvements show, um, slows down. And so to that point, you know, there was a point where the new iPhone was like, oh my God, that's like way better than the one last from last year. And this time it will be nice…

AI assessment note: “the pace of visible improvements show, um, slows down”

Q Netflix, um, you know, name a dozen big companies and not think in, okay, how many other companies that are important that you touch the touching every day? What is the Objective here. Is it to be able to wave a flag that says we've got the big tech company, or is it that your citizens benefit from the tools and services and economic dynamism that come from that creation?

A It's interesting. It's so interesting you say that, Benedict, because so this, and I think for me, this is the paradox of Europe is that everything that Europe focuses on is always for Consumer protection for the best of the citizens. You look at everything, whether it's roaming charges, whether it's the default setting, privacy settings on your iPhone, whatever it is, they always do it with the consumer in mind. But then this idea of waving a flag, and I always look at it, and I'm, I'm a bizarre product of the European Union in that I was born in France, British by passport, but never really lived in the UK until recently. Lived in Brussels for most of my life, and, um, Where I was going with this is I would love to see more European flag waving versus nationalistic waving. Um, but sadly, that's, that's just not the, that's just not the case. Um, and the best example I have of this is, um, Grand Prix that happened this weekend. It was the first Frenchman who won a Grand Prix in 24 years, and France went absolutely apeshit. Um, he was on the front page of every French newspaper, Emmanuel Macron won him, and there was this, like, French pride that this thing that hadn't happened in 24 years has happened. So I don't know, I still think there is something there about attaching your national flag to a company.

AI assessment note: “this is the paradox of Europe is that everything that Europe focuses on is always for Consumer protection”

Q you've got, you know, the internet unsplits these two things apart. You've got this physical asset, and you've got the product. And where is the point of leverage, or maybe they're both points of leverage in different ways. And so if those get broken apart, and now you don't need one, is that better for you, or is that a catastrophe for you, or does it not make any difference?

A I think we saw that from the journalistic perspective. I mean, you and I have spoken about this before, but with something like a sub stack where the barrier to entry now is any journalist or anyone with an opinion, um, and a following can create a newsletter that a bit because the barrier to entry is now so low and anyone can do it. What I found myself finding myself, the situation that I found myself with is overwhelmed by the amount of people Who are putting things out there in the world. And what I really need is someone to tell me, okay, there are 20 people writing about LLMs. This is, these are the two people of substance who actually have an opinion that's founded in experience or expertise. Well, who's the other one?

AI assessment note: “I think we saw that from the journalistic perspective... with something like a sub stack”

Q other big story this week, and I think we should probably close out here, but the other interesting stories this week was just how Google, is Google missing the boat on the next wave of search, and how Google is looking at all of the hype around chat GPT, and I'm like, oh, is that going to be a potential next wave of anti-competitiveness that we're going to start seeing?

A Yeah. Well, this is, I mean, there's a general point here, which is, you know, yeah. Generals fighting the last battle. And, you know, you could make a similar point about the app store, which is, you know, if web three ever actually does happen and does become a thing, then that will profoundly challenge all sorts of assumptions about, first of all, about like what the app store is and, you know, sort of, sort of proximate kind of problem is more fundamentally if these things are all kind of run by DAOs. On the one hand, who do you sue? And on the other hand, if they're all open and composable, then how do you construct a market definition? And how do you claim that they're anti-competitive? And you know, what happens if two DAOs merge? And there's all sorts of like intellectually interesting competition or problems if Web three ever actually was a thing in much, much more than Web two. Um, but there's also, yes, I mean, it's back to the thing I said earlier, you know, the competitive threat in tech is generally not someone doing the same thing as you, but better. Or, or, or, or let me kind of qualify that. Each market sort of goes for an S-curve, and there's like an early period where everyone's fighting it out to win. So this is like the, at the time when there were 10 different PC productivity suites, you know, 10 different wordpresses and 10 different spreadsheets. At one …

AI assessment note: “there's a general point here, which is, you know, yeah. Generals fighting the last battle.”

Q talking about is text and video, but there's a sort of more general, like, what does it mean if I can just ask for software that does this? Because, heck, that That does feel like it gets you quite a long way towards Hal 9000. You know, if I can just ask the computer to make something that does this for me, that feels very sort of pregnant with possibility.

A And we're having a, you feel like you're having a conversation with someone who understands you. I think this is what I was having with, even with just, like, Chat, GPT conversations, or with Avatar, just like, I'm not feeling like I'm spinning my wheels asking for something. I'm on the receiving end. They don't get they being, you know, the Avatar, whatever, but I'm actually starting, the more you have the back and forth conversation, the more you realize, shit, it feels like we've got the same information, and we've got the same context, and the same understanding of what I'm trying to get to, which is both incredible and very scary also, that, that thought of, oh, you're asking for something.

AI assessment note: “feels like we've got the same information, and we've got the same context”