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Dead Cat

A podcast about Silicon Valley, hosted by newsletter writer Eric Newcomer and Tom Dotan, with Katie Benner as a regular special guest. www.newcomer.co

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Do You Trust Amazon With Your Medical Records?

Amazon proved that it’s willing to enter any market with its 2017 announcement that it would buy Whole Foods for $13.4 billion. What other tech giant would buy a grocery store?Now Amazon is moving into — robotic vacuums? Amazon said it wanted to buy Roomba-maker iRobot for $1.7 billion. The acquisition raised all sorts of questions about what exactly Amazon wants from the suctioning rover manufacturer. Is the company trying to make a map of your house?Paranoia about Amazon’s data hoovering went into overdrive when Amazon announced that it intends to buy a virtual doctor’s office. Amazon said it would purchase telemedicine-powered doctor’s office One Medical for nearly $4 billion. (That acquisition comes after Amazon purchased pharmacy company PillPack in 2018 for $753 million.) My former boss Brad Stone smartly argued yesterday that the acquisitions are part of Amazon Chief Andy Jassy’s effort to build a “fourth pillar” for the company that moves it beyond Amazon Web Services, Prime, and Amazon Marketplace.He wrote:The deals are also emblematic of Jassy’s hunt for a so-called fourth “pillar,” beyond AWS, Prime and the Amazon Marketplace. Jeff Bezos described the features of such a business in his shareholder letter in 2014: “Customers love it, it can grow to very large size, it has strong returns on capital, and it’s durable in time—with the potential to endure for decades.” Eight years later, Amazon’s pursuit of this coveted fourth leg of the stool has been largely fruitless. Video has been an important part of Prime but is free for members and generates a nebulous return on capital. Advertising spews cash for Amazon ($8.76 billion in the last quarter alone) but is tolerated, not embraced, by customers.The deal raises questions, not just about Amazon’s strategy, but about how big we want these tech giants to get. Stone described the acquisitions as reflecting “an almost breathtaking disregard for the trustbusters.”On Dead Cat, the tech podcast I co-host, this week we grapple with whether we’re comfortable with Amazon’s size, especially as the e-commerce giant saunters into our medical lives. Katie Benner and I are both One Medical customers — patients you might call us — so on the latest episode we debate whether we would cancel our subscriptions once One Medical is officially under new ownership. Give it a listen. Get full access to Newcomer at www.newcomer.co/subscribe

53mins

9 Aug 2022

Rank #1

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Freeloaders, Fat cats & Ne'er-do-wells (w/Alex Heath)

Instagram chief Adam Mosseri has been playing defense as Instagram’s product goes on offense. Mosseri released a video explaining recent changes to Instagram and defended Instagram’s pivot from a friend-oriented, social graph-sorted photo sharing app to a creator-driven, AI-powered content machine.Meanwhile, the broader Meta employee base has been feeling the pain. CEO Mark Zuckerberg is bringing down the hammer, signaling that the company is trying to manage out weak performers. The company has started a campaign against coasters.But Meta employees are passing around memes suggesting that Zuckerberg is the coaster-in-chief.I talked with Verge reporter and social media savant Alex Heath about the turmoil at Facebook on the latest episode of Dead Cat, along with co-hosts Tom Dotan and Katie Benner.Heath recently recounted a contentious vignette inside a recent Meta all-hands:“Hi there,” the first prerecorded employee question started. “I’m Gary, and I’m located in Chicago.” His question: would Meta Days — extra days off introduced during the pandemic — continue in 2023?Zuckerberg appeared visibly frustrated. “Um… all right,” he stammered. He’d just explained that he thought the economy was headed for one of the “worst downturns that we’ve seen in recent history.” He’d already frozen hiring in many areas. TikTok was eating their lunch, and it would take over a year and a half before they had “line of sight” to overtaking it.And Gary from Chicago was asking about extra vacation days?“Given my tone in the rest of the Q&A, you can probably imagine what my reaction to this is,” Zuckerberg said. After this year, Meta Days were canceled.We talk about employee unrest at Meta, Instagram’s strategy shift, the state of the metaverse, and Snap’s oscillating stock price on the episode. At the end of the lively episode, the conversation devolved into an argument about antitrust. We end the podcast a bit abruptly in order to avoid recording Tom’s son dashing into the room. Enjoy.Give it a listen.Read the automated transcript. Get full access to Newcomer at www.newcomer.co/subscribe

1hr 11mins

2 Aug 2022

Rank #2

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Travis Kalanick's Right-Hand Man Tells the Story of the Coup that Brought Them Down (w/Emil Michael)

This is definitely an episode you’re going to want to listen to. It’s been a long time coming. It’s a sequel of sorts to my interview with Bill Gurley that ran a few months after launching this newsletter and my conversation with Dara Khosrowshahi after that.I finally convinced Emil Michael, a central player in the Uber saga, to give me an on-the-record interview. Michael was once Travis Kalanick’s top lieutenant. He raised about $15 billion for Uber during his nearly four years at the company. Finally, he came on Dead Cat to talk to Tom Dotan and me. It’s been five years since Kalanick and Michael acrimoniously departed the company they helped build into a juggernaut. While Michael isn’t Kalanick — who I would love to interview again someday — he was probably the second most important person at Uber during the period, understood the company and Kalanick intimately, and is a lot more willing to publicly reflect on what Uber got right and wrong than his old boss. We covered a lot of ground in our hour and a half long conversation. Michael didn’t shy away from much. Whether you’re interested in the inside baseball behind Kalanick’s ouster, or if you want to learn from Uber’s mistakes, or you just want to hear how they raised so much money, you’re going to want to give this episode a listen.He talked about his infamous visit to a shady Korean karaoke bar that led former U.S. Attorney General Eric Holder to recommend Michael’s dismissal. (In my mind, probably the biggest unreported information from the Kalanick era is the Holder report itself. If anyone ever wants to leak it to me, you know where to find me.)We discussed the latest media Uber obsession — “The Uber files.” The Guardian and other outlets reported on Uber’s influence campaign in Europe and the “kill switch.” It was a trip down memory lane that helped convince Michael to give his side of the story. Michael quipped about the “kill switch,” Uber’s tactic of locking down computers ahead of government raids: “I do think one of the bad things we did at Uber was naming things terribly.”Michael inveighed against Benchmark partner Bill Gurley’s crusade to push out Kalanick. But he also reminisced about how he and Gurley used to talk multiple times a day. Michael criticized current Uber CEO Dara Khosrowshahi’s management of the company, today worth $44.2 billion — about a third less than when Michael helped the company raise at an approximately $70 billion valuation. “When does the buck stop at Dara’s desk?” Michael asked us. But Michael also kicked himself for letting the merger with Lyft slip through his fingers. We talked about the media coverage of Uber past and present, what the press got right, and what it got wrong. But Michael also admitted that he’d never really figured out how to talk to the press. Together, we analyzed the Uber TV show, Super Pumped. Michael engaged with core questions about Uber’s existence: Was the independent contractor model an inescapable original sin? Should investors ever have given Uber so much money? Was the Saudi round that valued Uber at about $70 billion a fair benchmark by which to judge Uber’s current CEO? Given the many twists and turns of the Uber saga, there’s always more I wish that we’d dug into. We could have dedicated a whole episode to the Susan Fowler saga, for instance. And for every scandal that we examined, there’s another that we left out. Still, I think it’s as in-depth a public reflection as there has been from Kalanick’s camp since Kalanick resigned almost exactly five years ago.Toward the end of our conversation, I asked Michael: “Did you push back on Travis enough? Or did he like having people who are sort of like—”And he filled in the blank for me. Was he a “yes man”?Michael said, “I would at least say this on a relative basis: I did more than anyone else in history of giving him feedback. Whether it was investors or other leaders, whatever, because we had a relationship that allowed for that. And I cultivated that on purpose because I wanted to be someone who is able to be a counter voice there. And he listened to me.”Give it a listen.Read the automated transcript. Get full access to Newcomer at www.newcomer.co/subscribe

1hr 27mins

26 Jul 2022

Rank #3

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This Episode Wasn't Sponsored By Techmeme

I’m in Italy right now for my first extended vacation of the year. I spent yesterday bopping around Siena, taking in another beautiful Duomo, eating a sandwich with lardo, and hunting for the frescoes that provided the grist for my girlfriend’s mom’s art history thesis. After stopping in Rome and Florence, my girlfriend and I are staying in rural Tuscany for a friend’s wedding and then are headed to Cinque Terre in a few days.I’m doing my best to disconnect from the newsletter for these two weeks — though not as much as my girlfriend might like. I left my podcast co-hosts Tom Dotan and Katie Benner to their own devices with Dead Cat this week. Listening to the episode, they’re clearly feeling a little more pessimistic than I am. Tom proposed for the subject line of this email, “No ideas. No joy. No money” or “the summer of despair.” Both struck me as a little too dour.In the latest episode of Dead Cat, Tom and Katie take stock of some of the top stories in tech this week via Techmeme headlines: The implosion of Apple’s self-driving car program, the Uber files, and Elon Musk’s fight with Twitter. They ask why tech seems to be stuck in a rut. But mostly they seem to have a fun time, sardonically dissecting the tech world and puzzling out what the latest stock downturn means for our favorite tech storylines. It’s an enjoyable listen if you’ve got some time to kill as vineyards and hay bales pass you by.Their discussion hinges in part on The Information’s latest reporting on Apple’s self-driving car program. Apple just can’t seem to figure it out.The Information’s Wayne Ma reported on the perils of demoware:Engineers waste precious time choreographing demonstrations along specific routes using technology that works there but almost nowhere else, a phenomenon known as demoware. Some people who have worked on Titan say Apple fell harder into the demoware trap than some rivals, despite the fact that an automated car with no steering wheel needs to drive almost perfectly everywhere or few people would feel safe buying one.“If you spend enough money, you can get almost any fixed route to work,” said Arun Venkatadri, who previously worked on self-driving cars at Uber and now runs Model-Prime, which makes software tools for robotics companies. “But what isn’t shown is whether you can build your self-driving software in a scalable fashion and whether you can operate in a reasonably broad area.”And if Apple can’t figure it out, who can? Despite constant promises and over-optimistic projections from self-driving car researchers, the driverless cars don’t seem to be coming to the masses anytime soon.Even while on vacation, I couldn’t help myself from reading Twitter’s lawsuit against Elon Musk. The suit convinced usually skeptical Hindenburg Research to buy Twitter shares, believing that Twitter had a compelling case on its hands.It’s hard not to feel bad for Twitter. They never wanted Musk to try to buy them in the first place. Then Musk gave them an offer too good to refuse. And since then, he seems to be trying to do everything in his power to further erode Twitter’s value without paying them the premium he agreed to.Tom and Katie break down the drama on the latest episode.Give it a listen. Get full access to Newcomer at www.newcomer.co/subscribe

43mins

14 Jul 2022

Rank #4

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SBF Plays Crypto Savior (w/Teddy Schleifer & Jeff John Roberts)

Sam Bankman-Fried, “SBF,” is bailing out failing crypto companies. The question is whether he’s trying to stymie contagion risk from further roiling the crypto world or if he’s simply shopping for deals. Or maybe it’s both.SBF’s crypto currency exchange company FTX gave crypto lender BlockFi a $400 million credit facility and struck a deal that allows FTX to buy BlockFi for as much as $240 million.Meanwhile, SBF’s investment arm Alameda Research provided Voyager Digital $500 million in financing in June. (Voyager Digital suspended withdrawals and deposits on Friday.) SBF also kicked the tires on crypto lender Celsius before raising questions about the company’s finances. (Celsius has frozen accounts and hired restructuring attorneys.)The Block reported last week:FTX began talks with Celsius about providing financial support or making an acquisition but decided against proceeding after looking at Celsius's finances, the sources said. Celsius had a $2 billion hole in its balance sheet and FTX found the company difficult to deal with, one of the sources said.FTX has also reportedly considered buying Robinhood after buying up a 7.6% stake. These days it seems like the crypto industry is eager for any sign of an SBF bailout:On this week’s Dead Cat, Tom Dotan and I called in two experts. We brought on Jeff John Roberts, the author of Kings of Crypto and the crypto editor at Fortune, and friend of the show Teddy Schleifer, who is a reporter at Puck and an SBF obsessive.We argued about SBF’s bailout strategy, his political ambitions, and the state of crypto regulation. Roberts accused me of being a “nocoiner” and I assured him that I was contentedly losing money on crypto currencies.Give it a listen.Read the automated transcript.Background readingThe Notorious S.B.F.Inside S.B.F.’s $12 Million Long ShotA 30-Year-Old Crypto Billionaire Wants to Give His Fortune AwayCan Crypto’s Richest Man Stand the Cold? Get full access to Newcomer at www.newcomer.co/subscribe

41mins

5 Jul 2022

Rank #5

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A Long Drag on a Mango Juul Pod (w/ Lauren Etter)

I got back from Collision, the 35,000-person tech conference in Toronto, Sunday night. Everyone is worried about falling valuations — but the tech world keeps on spinning. Listen to this week’s episode of Dead Cat, Tom Dotan, Katie Benner, and I catch up, talk about my conference-going experience, and argue about what tech executive we’d most like to see as president. (Katie picks Tim Cook but I’m going with Jeff Bezos.)Then, Tom and I talk with Bloomberg reporter Lauren Etter. She’s the author of The Devil’s Playbook. We discuss the FDA’s surprise decision to ban Juul starting at around 32:30.Etter wrote for Bloomberg Businessweek:In 2019 almost 30% of high school students reported using e-cigarettes, mostly Juul. Former FDA Commissioner Scott Gottlieb warned that e-cigarette use had become an “almost ubiquitous—and dangerous—trend among teens.” Since then, the portion of high school students vaping has dropped to 11%, and the most popular product is a newer entrant, Puff Bar, not Juul.Yet it apparently wasn’t the company’s appeal to young people that led the agency to pull Juul off the market. A 2016 rule gave the FDA the authority to grant or deny “marketing orders” to e-cigarettes and other alternative tobacco products based on whether they met the standard of being “appropriate for the protection of the public health.” The agency found that Juul didn’t meet that standard because the company failed to provide sufficient evidence “to assess the potential toxicological risks of using the JUUL products”—even though Juul spent more than $150 million and hired an army of scientists to make its case.On Friday, a federal court stayed the FDA’s ban to give Juul time to appeal.Give it a listen.Read the automated transcript. Get full access to Newcomer at www.newcomer.co/subscribe

53mins

29 Jun 2022

Rank #6

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Nothing More Than a Magic Trick (w/Gary Marcus)

Are we nearing a time when we are going to get to have real, meaningful conversations with artificial intelligence?Nitasha Tiku got the world wondering just that with her story in the Washington Post about a Google engineer who believes that the company’s LaMDA artificial intelligence might be sentient. Google engineer Blake Lemoine carried out a series of seemingly personal conversations with the artificial intelligence and walked away believing that there was a sort of person behind the messages he was receiving.Artificial intelligence expert Gary Marcus thinks the idea that artificial intelligence systems are anywhere close to sentience is patently absurd. He wrote on his Substack:Neither LaMDA nor any of its cousins (GPT-3) are remotely intelligent. All they do is match patterns, draw from massive statistical databases of human language. The patterns might be cool, but language these systems utter doesn’t actually mean anything at all. And it sure as hell doesn’t mean that these systems are sentient.On Dead Cat, Tom Dotan and I talked to Marcus about artificial intelligence, how tech companies should frame these text generating machines to their users, and the media’s failure to cover speculative technologies skeptically. (In the post we make reference to Marcus’s post Does AI really need a paradigm shift?)Give it a listen.Read the automated transcript. Get full access to Newcomer at www.newcomer.co/subscribe

1hr 5mins

22 Jun 2022

Rank #7

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Coming to You From a Soon To Be Chesa-Free San Francisco (w/Jonathan Weber)

I moved from San Francisco to New York, in February 2019, back before it was cool to turn tail on the tech mecca. Truth be told, I’ll always have a special place in my heart for San Francisco, but my girlfriend beckoned from Brooklyn.I’m writing this from my flight back to New York after over a week in SF. I spent much of it in an Airbnb next to Mr. Pickle’s on Van Ness Avenue and then a few days crashing at a fellow tech reporter’s apartment in the Outer Richmond. I ate Mission Chinese and La Taqueria, drank at Brass Tacks and The Monk’s Kettle, and made it up to Calistoga for a picturesque vineyard wedding.But did I spend any time working for you, dear reader? Yes, not to worry. I spent my days shuttling from South Park to the Presidio, catching up with venture capitalists, founders, tech media insiders, and senior tech executives. And I spent my nights getting drunk with them, eager for looser lips.Here are my key immediate takeaways:One source told me that even Insight Partners — which announced a $20 billion fund in February — has decided to seriously slow down big late stage private investments. Until recently, Insight looked like one of the last holdouts when it came to doing late stage deals even as the market unraveled. But now, like pretty much everyone else, it’s mostly focused on its existing portfolio.VC advice on the downturn — even Sequoia Capital’s presentation to founders — has felt too much like content marketing. For some startup CEOs it can feel a bit like you’re the goody two-shoes, “A” student in the classroom, when the teacher reprimands everyone. You think the rebuke applies to you, but really the message is meant for the troublemakers. But it’s the most diligent among us that take these admonitions personally. Founders need advice specific to their company. There’s a sense that there have been many software engineers who have been overpromoted in the bull cycle and that this downturn could force some coders to reset their expectations about their appropriate rank and pay.I spent much of my time asking sources what the overarching, thematic story of the downturn would be. One venture capitalist gave me my favorite answer: He argued that we’d look back on this downturn as a story of the perfect storm between retail and professional investor excesses. On the retail side, we saw the rise of Robinhood and Coinbase, and r/wallstreetbets trades on Kodak and GameStop. On the professional side, we saw firms like SoftBank and Tiger go so, so long without enough diligence to back it up.If I had to name a couple companies/firms that I think are most likely to represent this downturn, right now I’d name Instacart, Coinbase, Robinhood, GoPuff, Bird, Tesla, Tiger, and SoftBank. Though, right now, I think increasingly crypto is looking like it will be the category most associated with this cycle’s excesses.There’s been a lot of envy in traditional startup world of people who went over to the the crypto dark side. Now there’s all sorts of schadenfreude going on as crypto prices plummet. Some VCs are starting to admit (mostly in private) that they never really believed in crypto. Still, there’s so much money. Just as I was leaving the city, Coinbase announced that it was brutally laying off 18% of its staff, locking them out of their emails before they even had time to say goodbye.We’re overdue for a reckoning over who screwed over credulous investors with implausible SPAC deals. ~cough~ Chamath ~ cough ~ At least, Brad Gerstner’s Altimeter led the PIPE on its own terrible Grab SPAC deal. Andreessen Horowitz still remains, probably, the biggest nemesis of many firms in Silicon Valley. Sure, Tiger blew up the startup world. But what Tiger did was so unlike anything venture capital firms were doing, so there’s less professional jealousy. There are whispers that things aren’t as copacetic internally at a16z as might appear from their highly choreographed public communications. It would seem that part of the explanation for the explosion of funds at the firm has been the explosion of egos. Instead of resolving interpersonal conflicts on the consumer fund, let’s just create a gaming fund. In that light, it’s pretty amazing that the firm couldn’t figure out a way to keep Katie Haun. Consumer investing across the board seems challenged. What’s going on over at Popshop, Lunchclub, Cameo, and Clubhouse just to name a few? I guess investors simply wishing consumer investing into being without a strong new thesis wasn’t exactly an omen for the sector’s inevitable success. (I will say that Whatnot and BeReal remain two consumer plays that I’m still following.) What will it mean for this generation of consumer investors? Benchmark’s next generation consumer investor, Sarah Tavel, seems to have made her best investment in business-to-business company Chainalysis, last valued at $8.6 billion. Speaking of Benchmark, the firm deserves some credit for holding firm on its strategy as other venture firms’ fund sizes got crazy. Sure, Benchmark probably could have made way more money if it topped up its own investments — but then it might be taking the heat that Benchmark favorite Altimeter is getting right now over its overexuberance. There’s money and reputation to manage. Benchmark has always made enough money to value its reputation. (That’s something Travis Kalanick, Adam Neumann, Nirav Tolia, etc. surely gripe about.)Last year’s hype around venture capital firms indefinitely holding onto private companies long after they go public is looking like pure bubble thinking. Sequoia’s timing on its all-in-one, hold indefinitely “The Sequoia Capital Fund” looks a little more like one of the excesses from the bull market. But limited partners seem too afraid to do anything to unwind the strategy shift that seems designed to enrich the firm’s general partners. (Reach out to me if you have off-the-record intel on this.)Investors are dramatically slowing the pace of their investments. These funds are going to last years longer than they would have in bull times. Multi-stage investors seem more inclined to double-down on their existing portfolio companies than to make new bets. Bridge rounds are on everyone’s lips. Still, I heard from investors who had made secret Series B and C investments in companies this year. It’s a good time to make a bet on a company that got away for a hype-y Series A round.Startup founders think prospective employees want assurances that their company is really worth what the company says it is. Good private unicorns are in a bit of a bind. Prospective employees are now automatically giving their equity offers a mental haircut based on the market downturn. So good companies have an incentive to reaffirm their valuations with funding rounds during the downturn — even if it otherwise might be smarter to keep their valuations artificially low so as to maintain room to grow should conditions worsen. (I wish employees would get better at assessing companies based on fundamentals, rather than the last tick fundraising round. Employees are basically begging founders to maximize for valuation, which then minimizes employee upside.)Some small-to-medium sized companies are shopping themselves to their rival startups but it’s not always clear why the competitor would want to buy. Why take on additional burn and headcount when all you might end up getting is leads on some new customers? Sure, you might do some venture capital firm a favor, but what’s that really worth?There are some cracks in up-start media world. The most obvious tremor is at BuzzFeed where the stock has sunk 54% in a month. Reporters have been leaving in droves. Meanwhile, The Information lost one of its top editors — Martin Peers. He’s long been a central figure over there. The Information’s up-and-coming venture capital reporter Berber Jin departed to the Wall Street Journal, as did Sarah Krouse who will be covering Netflix for the Journal. Stephen Nellis returned to Reuters. Meanwhile spirits seem strong at my former employer, Bloomberg. The ascendance of the player-coach editor seems to have people upbeat. Sarah Frier is leading big tech coverage and Lucas Shaw (who has been a guest on Dead Cat) is running the show on Hollywood coverage. And somehow Bloomberg just lured back a former star reporter who had left to join the startup ranks: Alex Barinka — who left Bloomberg as a deals reporter to help launch Imran Khan’s Verishop before going over to Stitch Fix — is joining Frier’s team as a social media reporter based in LA. Next week I’m in Toronto for Collision where I’ll be interviewing Uncork Capital’s Andy McLoughlin, Real Ventures’ Janet Bannister, and Left Lane Capital’s Vinny Pujji on a panel Wednesday called “Survival of the leanest: The importance of being capital efficient.” Then, less than an hour later I’ll interview General Catalyst’s Hemant Taneja about responsible innovation. On Thursday, I’ll ask “Has the tech bubble burst... again?!” in a panel with FirstMark’s Matt Turck, Lux’s Deena Shakir, and Neo Financial’s Andrew Chau. Expect the most interesting tidbits in this newsletter late next week.Talking about Chesa Boudin on Dead CatMy first meeting in San Francisco started with a tour of The San Francisco Standard, the Michael Moritz-funded local news enterprise. My old editor Jonathan Weber — once the editor of tech media dot-com icon The Industry Standard — is the editor-in-chief over at the SF Standard. Weber, Dead Cat co-host Tom Dotan, and I met up for a nice dinner at The Morris in the Mission. After spending the evening discussing San Francisco District Attorney Chesa Boudin’s recall, Tom and I convinced Weber to come on the Dead Cat podcast and talk about the Standard and San Francisco politics.Tom thinks I’m going to get eviscerated by San Franciscans for my politics. This is something we’ve never seen before: a New Yorker opining on San Francisco local affairs. I did my best to offend conservatives and liberals alike, maligning the police while rooting for tech’s ascendant influence on San Francisco politics. Weber makes the case for objective, follow-the-reporting local news and outlines the real issues underpinning the recall. He explains how money is simultaneously to blame and not to blame for Boudin’s recall. And he defends the Standard against its critics for its influential story on Boudin’s refusal to make drug arrests. We interrogate what Boudin’s defeat means for the future of progressive politics and the city of San Francisco.Give it a listen.Read the automated transcript. Get full access to Newcomer at www.newcomer.co/subscribe

52mins

15 Jun 2022

Rank #8

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Sheryl Sandberg Leans Out w/Deepa Seetharaman)

Big tech executives are heading for the exits. Last week, Meta Chief Operating Officer Sheryl Sandberg announced that she would leave the Facebook parent company in the fall. Today, Dave Clark, CEO of Amazon’s worldwide consumer business, explained why he’s leaving Amazon: He’s going to become CEO of the logistics startup Flexport. With the markets on the brink, what other top tech executives will decide it’s a good time to step away?On this week’s Dead Cat, Tom Dotan, Katie Benner, and I talked to Wall Street Journal reporter Deepa Seetharaman about why Sandberg is leaving Facebook parent company Meta. There have been plenty of reasons cited for Sandberg’s departure: Burnout, a rising philanthropic impulse, a shrinking fiefdom within Meta. Seetharaman and her colleagues reported that Sandberg has faced an internal investigation at Meta that could have given Sandberg another reason to head for the exits.The Journal reported:Earlier this year, The Wall Street Journal contacted Meta about two incidents from several years ago in which Ms. Sandberg, the chief operating officer, pressed a U.K. tabloid to shelve an article about her former boyfriend, Activision Blizzard Inc. Chief Executive Bobby Kotick, and a 2014 temporary restraining order against him.The episode dovetailed with a company investigation into Ms. Sandberg’s activities, which hasn’t been previously reported, including a review of her use of corporate resources to help plan her coming wedding to Tom Bernthal, a consultant, the people said. The couple has been engaged since 2020.Last week’s podcast guest, Casey Newton, pushed back against the idea in his newsletter that the investigation likely triggered Sandberg’s departure:Meta paid Sandberg $35 million last year; I can’t even imagine what she would have to ask her employees to do for her on the wedding front that would merit much more than a “hey, knock it off” from her boss.Moreover, as Bloomberg’s Sarah Frier noted, for top-level executives at the world’s biggest companies, the personal and professional are often intertwined. Meta, for example, paid $15.1 million last year “for expenses related to protecting its CEO at his homes and during personal travel.” It spent another $10 million on security for Mark Zuckerberg’s family and $1.6 million so he could travel on a private aircraft.And so you’ll forgive me for being skeptical that Sandberg’s wedding planning had anything to do with her departure, or the timing of her announcement. Particularly when you consider that Sandberg is going to continue working for the company for several more months as COO — and then remain on the Meta board indefinitely.Toward the end of the conversation with Seetharaman, we talked about the legacy of Sandberg’s “Lean In” campaign.Lean In helped to kick off a reexamination of how women were treated in the workplace, especially among the management ranks. That movement then started to seem passé as progressive crusaders wanted to shift the focus from individual workers “leaning in” to the responsibilities of the broader society. Today, as we’re starting to see some signs of backlash to progressive social politics, it’s worth reflecting on and celebrating the work that Sandberg undertook to help support women in the workplace.“We’re moving into a far more regressive era in American society, in a larger way, that’s beyond Sheryl Sandberg, and beyond Amber Heard, or Johnny Depp,” Benner said on the podcast. “[Sandberg] had the financial power, and she had the social and political standing within an extremely powerful company to use that platform to say women are treated like s**t at work. And can we all just agree on that? And so that was — I think we forget — that that was actually a very big deal.”Give it a listen.Read the automated transcript. Get full access to Newcomer at www.newcomer.co/subscribe

49mins

8 Jun 2022

Rank #9

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State of Substack (w/Casey Newton)

One of the many joys of going independent and writing on Substack is that I work at the eye of a trend piece. There’s a storm circling around me with fights about Substack’s politics and its promise as a media disruptor. But at the center of that vortex, I’m far more focused on my own business than the broader maelstrom around me. I’m very fortunate to say that my paid subscriber count has now grown beyond 1,500 and more than 22,000 people now receive my free emails. I’ve been enjoying a steeper growth curve lately.This week on the Dead Cat podcast, Katie Benner, Tom Dotan, and I talk to technology Substack writer Casey Newton. On the podcast, I reminisce about how I phoned Newton during the depths of the pandemic to tell him that I was going to leave Bloomberg to start a Substack only to learn he was about to launch one as well. Newton founded Platformer, a go-to destination for news and analysis about what’s happening in the technology industry — especially at social media companies. Newton and I are part of a group of writers that formed the Discord community Sidechannel together. (Paying Newcomer subscribers get access to the community, though I’ll confess that my channels are fairly dormant.)Our discussion was sparked by a news story about what’s not happening. Substack apparently isn’t raising a new round of financing, according to the New York Times. Unlike fellow Andreessen Horowitz portfolio company Clubhouse, which raised at a $4 billion valuation in April 2021, Substack hasn’t earned a unicorn valuation. Substack reportedly generated about $9 million in revenue in 2021. Given the turbulent financial markets, Substack abandoned its fundraising effort, according to the report.Newton celebrated Substack’s failure to fundraise in his newsletter:One, it reduces the pressure on Substack to financialize every facet of its newsletter, podcast and app ecosystem. In March, when the company introduced an app, I noted here that Substack shut off emails from your subscribed publications by default — a worrying step, I thought, toward building a centralized platform that the company could monetize more aggressively. To its credit, Substack changed the default to preserve email subscriptions within 24 hours. But giving up more equity to VCs will bring more “suggestions” from the company’s board to move in this direction. The more Substack can rely on its own cash flow, the more easily it can chart its own future.Two, having less cash on hand can enforce a useful kind of discipline on a company. Having giant piles of cash on hand can be great for making splashy acquisitions or experimenting with new products. But Substack is still figuring out just how many people can sustainably enter this line of work — solo creators, operating mostly without a safety net, selling media for a monthly fee.(On the podcast, we also talk about Elon Musk’s Twitter bid and Snap’s tumbling stock price.)Give it a listen.Read the automated transcript.The State of NewcomerGiven that we’re already talking about Substack — and since I’ve gained a bunch of new readers lately — I wanted to give a brief tour of the Newcomer newsletter to help you all navigate what I’m publishing and get a sense for the rhythms around here.Dead CatI publish Dead Cat — the podcast with my friends and fellow reporters Tom Dotan and Katie Benner — toward the end of the workday every Tuesday. (We usually record on Fridays.)The podcast is free and is meant to be a little looser than the newsletter. Dead Cat, while still pretty fixated on Silicon Valley inside baseball, is more oriented toward the culture of tech and less focused on money than my newsletter articles.Dotan is a reporter for Insider. He writes about the gig economy after spending years covering companies like Snap and Disney. Benner writes about the U.S. Justice Department for the New York Times after many years writing about Wall Street and Silicon Valley. The three of us worked together as reporters at The Information, where I was the first employee. We’ve been close friends for many years.You can listen to the podcast on Substack’s app or on Apple or Spotify. I’ve started including an automated transcript of our conversation in each podcast post. We’re averaging more than 1,800 listeners for each episode, according to Substack’s analytics. If you’re not interested in Dead Cat or don’t need an email to remind you to listen, you can opt out of receiving the emails on your account page. (I’ve been trying to put more meat on the bone of podcast posts so that even if you just read them, you’re receiving an email that will interest you — like my interview with the Uber driver who leaked the video of Travis Kalanick that arrived beneath a Dead Cat episode.)The podcast’s name is a reference to a text conversation between Marc Andreessen and Mark Zuckerberg. Though if you prefer to associate it with a dead cat bounce, I won’t hold it against you.Newcomer NewsletterAs regular readers know, I publish newsletter articles somewhat chaotically. Variety is the spice of life and I enjoy chasing different types of stories that take varying amounts of time to complete.I almost always publish a standalone newsletter article each week (usually toward the end of the week). Most weeks, I try to save something for paying subscribers. That can mean putting a paywall halfway down an article — like saving exclusive financial information for paying subscribers — or putting entire pieces behind the paywall. Types of Newcomer PostsIn-depth profiles of Silicon Valley main characters based on a probing interview. Think: Elad Gil Wants You To Live Longer or General Catalyst's Secret CEO or Above the Crowd.Sweeping, deeply-reported narratives about a venture capital firm. Probably my most iconic piece remains, The Unauthorized Story of Andreessen Horowitz. And Andreessen Horowitz has been perhaps the main character of this newsletter with pieces like When Will a16z Become a Public Market Investor? I’d put my profile of Bessemer Venture Partners — The Anti-Portfolio — in this bucket. I’ve also been covering Y Combinator closely with my interview of YC President Geoff Ralston YC = Growth, What Insiders Think About YC's New Deal Terms, and Ali Partovi Wants to Beat the Old YC.Stories about top investment firms based on their private fundraising materials. Recently, I published a look at Tiger Global with some of the firm’s private fundraising decks. (I added a few more slides after publishing the article by the way if you haven’t returned to it since.) Fans of that piece should also check out my article Inside 3 Crypto Funds' Investor Decks. I’ve gotten my hands on another pitch deck so I should have another similar piece out in the coming days.Market trend pieces. Recent examples: Here’s What Investors Think the Treacherous Public Markets Mean for Private Startups or Good Times in The Great Revaluation. These pieces rely on my building up a depth of information about a particular sector before dropping it in a single post.Story of a Cap Table articles. These are fun and instructive venture capital case studies. They’re always popular. An example from late last year: The Story of a Cap Table: GitLab. The challenge with these pieces is that they require interesting companies to file to go public — and cooperative sources at a regulatorily-paranoid time in a company’s lifetime. Given the slow IPO pipeline, there’s been a slowdown in cap table stories.Weekend reading posts. It’s a fun way to concisely hit a bunch of different topics at once. But, truth be told, I’m always ambivalent about them. If you know me, then you know I feel guilty whenever I’m not breaking news or bringing exclusive access to a piece. But I think the reality is that I spend a unhealthy amount of time reading tech news and many readers are happy to get a rundown of what I think matters. I’m always trying to think of new ways to level these pieces up.Scoops. I’m addicted to scoops. I live for the adrenaline. Definitely, my scoop on OpenSea’s funding round was important for the newsletter. I made that piece a broader look at Katie Haun and Andreessen Horowitz. If it’s getting toward the end of the week and I haven’t published anything yet, I’m probably scrambling for a scoop. It’s a great time to send me a tip.There are other long-form pieces that don’t fit neatly into these categories. I wrote a case against Rivian. I’m still really proud of my investigation into Palantir’s SPAC investments. I should write a follow-up piece on how many of those investments have gone terribly. Get full access to Newcomer at www.newcomer.co/subscribe

54mins

31 May 2022

Rank #10