0:00:11 The most successful social video I ever produced for Disney, and it was still the most successful one we ever produced, was because I refused to go through the approval process, which was, I’m sure if it had gone wrong, I’m sure I’d have been fired.
0:00:13 But sometimes you have to stand up in what you believe for.
0:00:18 I loved Disney because if you had a big idea, somebody would fund it for you.
0:00:30 I have to say that of the 260 guests we’ve had on this podcast, you have by far the best background behind you.
0:00:35 And it’s real, it’s drawn, it’s painted, so it’s not one of those fake backgrounds.
0:00:38 I worked for this guy for 30 years.
0:00:44 I finished as Head of Innovation and Creativity at Disney, Pixar, Lucasfilms, Marvel, but it didn’t start that way.
0:00:46 I started as a coffee boy in the London office.
0:00:49 I used to go and get my boss six cappuccinos a day from a bar at Tannehill, First Street.
0:00:54 And about three weeks into the role, I was told I would be the character coordinator at the Royal,
0:00:58 that’s the person that looks after the characters that walk around, at the Royal Premier of Who Frames Roger Rabbit,
0:01:01 in the presence of the Princess of Wales.
0:01:02 Diana was like, what do I do?
0:01:05 They said, well, you stand at the bottom of the stairs, Roger Rabbit will come down the stairs,
0:01:09 the princess will come in along the receiving line, she’ll greet him or she’ll blow him off.
0:01:12 How could you possibly screw that up?
0:01:14 Well, that was the day when I found out what a contingency plan was.
0:01:19 A contingency plan would tell you if you’ve got to bring a very tall rabbit with spectacularly long feet
0:01:24 down a giant staircase towards the princess of Wales, you might want to measure the width of the steps first.
0:01:25 So I hadn’t.
0:01:29 Roger trips on the top step and he’s now hurtling like a bullet, head and feet,
0:01:34 directly down the stairs towards Diana’s head, whereupon he was met in midair by two Royal Protection officers
0:01:35 who just took him out.
0:01:38 There’s a very famous picture of Reuters of Roger going back like this,
0:01:40 two Secret Service heavies diving towards him in a suit,
0:01:44 and a 21-year-old PR guy from Disney in the back going, ah, shit, I’m fired.
0:01:49 So I got a call the next day from a place called Burbank, which I’d never heard of,
0:01:53 from somebody called a CMO, didn’t know what they were either, I thought I was going to tell him I’m fired.
0:01:59 And all I heard was, that was great publicity, was that I can make a career out of this.
0:02:06 And so basically for 20 years at Disney I did, I got to have some of the more mad, audacious, outrageous ideas.
0:02:07 That’s kind of what I did.
0:02:16 Well, Madison, I think that that was probably the best start of a podcast in the history.
0:02:17 They’re remarkable people.
0:02:21 Usually, Duncan, we like to introduce the guests, but, you know,
0:02:26 we’ve got to get out of that box and let the guests tell their own story.
0:02:30 When people ask me to, they want me to read my bio when I get up on the stage
0:02:32 and was like, do you remember the Charlie Brown cartoons?
0:02:33 You remember the principle?
0:02:37 Wah, wah, wah, wah, wah, don’t read the bio, please don’t.
0:02:39 So I always do two truths of the lie.
0:02:41 And the funny thing is, when you get off the stage, you think,
0:02:44 ah, this person’s coming up to me, they’re going to ask me a really important question.
0:02:47 They go, oh, they just want to know which one was the lie.
0:02:56 Okay, so clearly we are not going to do a tradition or introductions.
0:03:04 So, you know, I have to ask you this dumb question, but man, what was it like to work at Disney?
0:03:10 I mean, was it like being the Super Bowl MVP and every year you go to Disneyland?
0:03:12 What was it like?
0:03:14 I hosted pretty much all of those guys.
0:03:17 My job was, this was in the days before contracts.
0:03:21 So you literally, at the end of the game, you had to get onto the field at the end of the game,
0:03:25 grab the MVP, but everybody else was yanking your cameras,
0:03:26 and throwing them all over the place.
0:03:30 So your job was just get to the MVP, get the line up, go to Disney World,
0:03:33 get them on the corporate jet and fly them down to Disney World.
0:03:38 That sounds easy, but there’s the MVP who doesn’t want to go with you.
0:03:39 They want to go drinking somewhere.
0:03:42 So I got separated on the field from my cameraman.
0:03:44 And he comes on the radio and goes, where are you?
0:03:46 I said, I’m on the pitch at the halfway line.
0:03:49 And somebody else goes, I think he means he’s on the field at the 50-yard line.
0:03:55 So I worked for, basically for, I suppose, 50% of my career was with Michael Eisner,
0:03:57 50% with Bob Iger.
0:04:01 But Roy Disney was still there all the time, and I loved Roy and John Lasseter.
0:04:06 They were the old school, but the old school were just, they had less corporations.
0:04:08 We’ve got so tight and tidy and pretty now.
0:04:10 I think they pushed boundaries more.
0:04:13 I admired them both because they broke the rules.
0:04:17 The most successful social video I ever produced for Disney, and it was still the most successful
0:04:22 one we ever produced, was because I refused to go through the approval process, which was,
0:04:24 I’m sure if it had gone wrong, I’m sure I’d have been fired.
0:04:26 But sometimes you have to stand up in what you believe for.
0:04:32 I loved Disney because if you had a big idea, somebody would fund it for you.
0:04:35 And I loved working for Michael in particular, because every time he walked in the door,
0:04:38 he was always respectful and very courteous, but he’d say, you know what?
0:04:40 We’re the world’s number one entertainment company.
0:04:42 Come back when you’ve got something that scares me.
0:04:43 Come on, all right, bring it.
0:04:44 And so it was great.
0:04:50 And working with Bob was also fascinating because here comes Pixar, Marvel, Lucasfilms, ESPN,
0:04:56 ABC, and suddenly you’ve got all these cultures who are very unique, who, but the challenge
0:04:58 was everybody was better than everybody else.
0:05:03 So the task that Bob gave me was how might we embed a culture of innovation and creativity
0:05:04 into everybody’s DNA?
0:05:08 So the first thing I did was hire somebody else who knew what they were doing.
0:05:10 I said, make me look good.
0:05:11 They were a consultant.
0:05:14 They were never around for execution, but they were never going to show me how they did what
0:05:16 they did, or they were frightened I wouldn’t hire them again.
0:05:19 Model number two, I’ll be in charge of innovation and creativity.
0:05:20 What could possibly go wrong?
0:05:23 Well, it’s kind of like having a legal team or a marketing team or a sales team.
0:05:26 When you have an innovation team, you’ve kind of told everybody else you’re off the hook.
0:05:27 So that model failed.
0:05:32 The accelerator program, we bring in some young tech startups and take a 50-50 stake in their
0:05:32 business.
0:05:34 For them, we could scale.
0:05:35 That’s what Disney does.
0:05:38 For them, they could help us bring products and services to market much quicker than we normally did.
0:05:43 But we’d failed in Bob’s overall goal, which was, how might we embed a culture of innovation
0:05:45 and creativity into everybody’s DNA?
0:05:50 And so I asked 5,000 people, I said, what were the biggest barriers to being more innovative
0:05:51 and creative where you work?
0:05:53 Number one, don’t have time to think.
0:05:55 Number two, we don’t have the resources.
0:05:59 Number three, we say we’re consumer and client-centric, but we measure by quality results.
0:06:03 Number four, our ideas seem to get stuck, diluted or killed as they move through approval
0:06:03 process.
0:06:06 And number five, we all had a very different definition of creativity.
0:06:09 So I set out to create a toolkit that has three principles.
0:06:13 Takes the BS out of innovation and makes it more accessible to normal, hardworking people.
0:06:17 Makes creativity tangible for people who are uncomfortable with ambiguity and great.
0:06:19 Far more importantly, make it fun.
0:06:22 Give people tools they choose to use when you and I are not around.
0:06:24 So I was with Disney for 30 years.
0:06:28 I got the Jiminy Cricket, thank you, for 30 magical years of service bronze.
0:06:31 And I looked at it and I thought, shit, I’m nearly dead.
0:06:33 I’ve got to do something else.
0:06:37 So I left and I went home to England for a while and sat in the pub and felt sorry for
0:06:37 myself.
0:06:39 I thought, OK, what do I do now?
0:06:41 And somebody said, could you come and give a speech?
0:06:41 Sure.
0:06:43 And it just took off.
0:06:46 But see, I am the antithesis of so many other people.
0:06:49 The word, the creative, drives me nuts.
0:06:50 I’m sorry, it just does.
0:06:53 I know some people are better at writing stories.
0:06:55 Some people are better at writing music.
0:06:56 Some people are better at acting.
0:06:58 I believe everybody’s creative.
0:07:02 When you were a kid and you were given a gift for Christmas, it came in a huge box.
0:07:04 It took you ages to take the toy out of the box.
0:07:05 What do you spend the rest of the week playing with?
0:07:06 The box.
0:07:07 It was your rocket ship.
0:07:07 It was your force.
0:07:08 It was your creative.
0:07:09 But here’s the challenge.
0:07:11 Here comes AI.
0:07:14 And I was working with the engineer on their DeepMind project.
0:07:18 And I asked her, I said, how am I going to compete with what you do and what you’re
0:07:18 creating?
0:07:23 She said, well, she believed the most employable skill sets of the near term will be the ones that
0:07:25 will be the hardest for her to program into AI.
0:07:26 What are they?
0:07:28 Well, the ones with which we’re born.
0:07:29 We’re born with imagination.
0:07:30 We’re born creative.
0:07:31 We’re born curious.
0:07:32 We used to ask why, why, why again.
0:07:35 We’re born with MP and we’re born with intuition.
0:07:36 Will they be programmed one day?
0:07:37 I don’t know the answer.
0:07:39 But in the short term, probably not.
0:07:41 But the problem is that we go to school.
0:07:44 And the first thing our first grade teacher tells us to do is don’t forget to cover in
0:07:44 between the lines.
0:07:47 And then they say, stop asking why because there’s only one right answer.
0:07:49 So I did a talk at a university.
0:07:51 I had 3,000 students at university age.
0:07:55 So I brought in one first grade class of 30 little six-year-olds and sat them in the middle
0:07:56 with their teacher.
0:07:57 I said, hands up here.
0:07:57 Who’s creative?
0:07:58 Me, me, me, me, me, me, me.
0:08:00 A 30 little hand shot into the air.
0:08:02 The other 3,000 stayed down.
0:08:05 We are taught that we are not creative.
0:08:07 By the time we’re 18, most people have given up.
0:08:11 And yet here comes AI, which would doubtless take away many roles but create new ones.
0:08:13 But what have we got left?
0:08:15 I genuinely believe the things with which we were born.
0:08:23 Duncan, has anybody ever told you that you need to come out of your shell and learn to
0:08:24 express yourself?
0:08:27 And I haven’t had a drink yet.
0:08:35 If you don’t mind, I’d like to ask a few questions in my podcast.
0:08:48 So I want to hear about the philosophical impact of Disney calling people guests, not customers.
0:08:49 What’s behind that?
0:08:51 There’s a tool I call HowElse.
0:08:53 How by simply reframing a challenge?
0:08:57 Can you get people to stop thinking the way they always do and give them permission to think
0:08:57 differently?
0:09:00 So we’ll try and experiment and then I’ll answer your question.
0:09:01 Where do you live, by the way?
0:09:03 I live in Watsonville, California.
0:09:08 So if I was coming to Watsonville and you and I were going to open a car wash together,
0:09:12 tell me if you would, what are the three essential ingredients, three or four things we must have
0:09:12 in a car wash?
0:09:15 I would say good Wi-Fi is number one.
0:09:16 Wi-Fi.
0:09:16 All right.
0:09:22 And then obviously you have to have the car really clean.
0:09:22 Yeah.
0:09:26 And I would say the third thing is that…
0:09:27 Well, the essential ingredients.
0:09:33 The essential ingredients is your car comes out clean and then while you’re waiting for it,
0:09:34 you’re somewhat entertained.
0:09:37 And I would say that’s about it.
0:09:39 Well, maybe there’s a third.
0:09:45 The third one would be that I hope that the water and the resources are being effectively
0:09:46 recycled.
0:09:47 We’re just not polluting.
0:09:48 Okay.
0:09:50 So now you’re an high venture capitalist.
0:09:53 We’ve been invited to open a new franchise of auto spas.
0:09:55 Who are a spa?
0:09:56 What have you seen in a spa?
0:09:58 What would you like to see in your auto spa?
0:09:58 Anything you want.
0:10:00 What would you love to have in your auto spa?
0:10:07 So I think what you’re trying to say is that if you define it as car wash, you think of
0:10:09 just the rollers and the sprays.
0:10:13 But if you say auto spa, you think of manicure, pedicure, massage.
0:10:16 You think of like hippie music.
0:10:18 You think of relaxation.
0:10:19 You think of zen.
0:10:21 You’re not thinking of…
0:10:22 And that’s exactly how Walt used the tool.
0:10:23 Just getting your toenails cut.
0:10:27 Yeah, that’s exactly how Walt used the tool.
0:10:32 He said, look, July 17th, 1955, when he opened the doors to Disneyland, which has come out
0:10:34 for a 70th in a couple of months.
0:10:35 Now I feel old.
0:10:38 He said, we will not have any customers in our park.
0:10:39 We will only have guests.
0:10:40 We will not have any employees.
0:10:41 We’ll only have cast members.
0:10:43 They’ll be cast for a role in the show.
0:10:45 They’ll wear a costume, not a uniform.
0:10:46 They’ll work on stage, not backstage.
0:10:51 With that simple re-expression of the relationship between the employee and the customer as the
0:10:55 cast member and the guest, Walter created a culture of hospitality that’s rarely
0:10:56 been repeated elsewhere.
0:11:00 So now, fast forward, how is it actually used in business today?
0:11:04 In 2011, if we’d asked the question, how might we make more money, we’d have put the
0:11:05 gate price up at Walt Disney World.
0:11:06 People would have complained.
0:11:06 They’d have still come.
0:11:08 We’d have made our quarterly results.
0:11:10 You don’t get to iterate in a post-pandemic world.
0:11:13 So instead of saying, how might we make more money, we reversed the challenge and said,
0:11:16 how might we solve the biggest consumer pain point?
0:11:17 Everybody knew what it was.
0:11:18 It was called standing in line.
0:11:20 And I said, well, what if there were no lines?
0:11:21 Didn’t know how to do it.
0:11:23 Again, if you know how to do it, you’re iterating.
0:11:24 If it scares you a bit, you’re innovating.
0:11:27 So we used another tool, which is about looking outside.
0:11:31 I believe a lot of the insights for innovation come from looking outside of your industry.
0:11:36 And we found a very small pharmacy in Tokyo, Japan, that used RFID technology to enable
0:11:38 people not to stand in line when they came to pick up their prescriptions.
0:11:39 Bing!
0:11:41 Welcome to the World of Disney’s Magic Band.
0:11:42 I’m not wearing one today.
0:11:42 Oh, wait a minute.
0:11:43 Yes, I am.
0:11:43 Here we go.
0:11:46 Do they come in red or grey in the mail?
0:11:47 Yes, of course they do.
0:11:47 Why?
0:11:49 Because you’ll look great to the Star Wars edition or the Mickey Jedi edition.
0:11:51 Does it come in matching merchandise?
0:11:52 Of course it does.
0:11:53 This is my room key.
0:11:55 I don’t check in or check out of a Disney resort today.
0:11:56 It’s my theme park ticket.
0:11:57 The turnstiles are gone.
0:12:00 My reservations for my favourite character meet and greets, my favourite rides.
0:12:01 I can pay for food with it.
0:12:03 I can pay for merchandise with it.
0:12:07 I walk into the restaurant when I want to walk in and the food comes fresh to me.
0:12:11 Had we started by saying how might we make more money, we’d have made a 3% profit margin.
0:12:16 But by reversing the challenge and saying how might we solve the biggest consumer pain point,
0:12:20 the average guest at Walt Disney World today has over two hours free time they didn’t have
0:12:21 each and every day six years ago.
0:12:22 What has that resulted in?
0:12:23 Record intent to recommend.
0:12:25 Record intent to return.
0:12:28 And what is it you lovely people do with your free time at Disney e-books?
0:12:30 Spend money.
0:12:33 One of the biggest single revenue generating ideas Disney ever created.
0:12:36 And what’s the consumer doing every second of every day?
0:12:40 They’re crowdsourcing the future of every product and service Disney creates by telling
0:12:41 what they like and what they don’t.
0:12:43 And it comes in themed merchandise.
0:12:49 I swear, I have my list of questions and I was going to ask you about this wristband case.
0:12:55 So is this something that if you go back, it was like somebody in innovation thought of it
0:13:00 or was it security thought of it or the hotel lobby staff thought of it?
0:13:02 Like what was the genesis of this?
0:13:06 Well, the genesis was how might we stop people from standing in line?
0:13:08 When you’re hosting 25 million guests a year, that’s going to be tricky.
0:13:12 And so we looked in the theme park industry, but nobody was solving the issue.
0:13:17 So this tool is about where in the world has somebody already solved the challenge of people
0:13:18 not standing in line?
0:13:21 So you look outside of your industry and borrow about the underlying principle.
0:13:23 And that’s how we found the pharmacy.
0:13:27 But I will tell you there’s another story, not specific, not pertain to the magic band,
0:13:29 but it is all about I love Ed Catnall.
0:13:31 He always said creativity doesn’t follow job titles.
0:13:32 It just comes from where it comes from.
0:13:34 I love the naive expert.
0:13:35 Actually, do you have a pen and a piece of paper?
0:13:37 Yes, I do.
0:13:37 Good.
0:13:38 All right.
0:13:38 Come on then.
0:13:41 So the naive expert, who or what is a naive expert?
0:13:44 They are somebody who doesn’t know what you’re working on.
0:13:46 What does that give them permission to do that you can’t?
0:13:49 Well, they can ask the silly question you’re too embarrassed to ask in front of your colleagues.
0:13:53 They can throw out the audacious idea ungoverned by your river of thinking.
0:13:55 I define our river of thinking.
0:13:59 And the more experience, the more expertise we have, the more reasons we know why the new
0:14:00 idea won’t work.
0:14:01 So we constantly shoot it down.
0:14:03 So I was bringing a naive expert.
0:14:08 We were designing a new retail dining and entertainment complex for Hong Kong Disney in the room that
0:14:10 day with the Disney Imagineers, the people you would expect.
0:14:14 But on that particular day, I was faced with 12 white male American architects over 50.
0:14:16 So I brought in a young girl from China.
0:14:16 Why?
0:14:18 She was female, not male, under 20.
0:14:20 This is the dim sum girl.
0:14:20 Right.
0:14:21 Exactly right.
0:14:22 So hang on.
0:14:24 So I gave them the same challenge I’m going to give you now then.
0:14:26 So I’ll give you seven seconds to draw a house.
0:14:27 Go.
0:14:27 Come on.
0:14:28 Seven.
0:14:29 Come on.
0:14:29 Draw that house, guy.
0:14:30 Come on.
0:14:31 Seven.
0:14:31 Six.
0:14:32 Five.
0:14:33 Four.
0:14:34 Three.
0:14:34 Two.
0:14:34 One.
0:14:35 Here’s the thing.
0:14:39 See, if you’d drawn it, I know it’s going to look like this.
0:14:39 So here’s the thing.
0:14:43 Everybody drew this except the young female Chinese chef.
0:14:43 She drew.
0:14:45 Let’s see if I’ve got a picture of it over here.
0:14:46 Let’s see.
0:14:48 Oh, here we go.
0:14:50 She gave dim sum architecture.
0:14:50 Why wouldn’t she?
0:14:52 She’s a young female Chinese chef.
0:14:54 Never occurred to her to draw the house the same way we would.
0:14:58 On the way out the door, somebody put a post-it note over her drawing that simply said,
0:15:00 distinctly Disney, authentically Chinese.
0:15:05 Seven years later, the strategic brand position, the guy did the entire design of the Shanghai
0:15:06 Disney Resort.
0:15:08 Distinctly Disney, authentically Chinese.
0:15:11 The point is this, and companies don’t understand it.
0:15:13 Diversity is innovation.
0:15:16 If somebody doesn’t look like you, they don’t think like you.
0:15:18 And that, shockingly enough, they can help you think differently.
0:15:21 And I believe that sometimes we get leadership meeting.
0:15:24 Well, for goodness sake, inviting somebody who’s not a leader.
0:15:29 Some young 28 superstar who’s been on touchscreen technology since the day they were born.
0:15:31 Virtual reality since the day they were five.
0:15:34 And they’ve been on ChatGPT for a year longer than any of us.
0:15:35 But we don’t.
0:15:37 Because why do we do leaders and leaders?
0:15:38 Because that’s the way we’ve always done it here.
0:15:40 Maybe think about it differently.
0:16:01 I see a lot of companies where there’s like a chief innovation officer.
0:16:03 There’s a department of innovation.
0:16:06 There’s R&D specifically tasked with innovation.
0:16:11 But should everybody in the company be thinking creatively in innovation?
0:16:11 Yes.
0:16:15 Or just these people who are supposed to be tasked with this?
0:16:16 The creatives.
0:16:17 Oh, give me a break.
0:16:18 There was a lady.
0:16:19 I won’t go through the whole story.
0:16:25 So we were doing a strategic pricing session surrounded by the EVPs, the SVPs, and the gods
0:16:26 from Mount Olympus had joined us for a day.
0:16:28 So how might we make more money?
0:16:32 And they were all strategists and future planners and accountants and finance.
0:16:33 So I invited in Maggie.
0:16:34 Well, who’s Maggie?
0:16:37 Maggie was a 78-year-old cast member from our call centre.
0:16:40 Now, why would I invite Maggie into a strategic pricing session?
0:16:41 Let me think.
0:16:44 She spends eight hours a day talking to our guests at the call centre.
0:16:45 We don’t.
0:16:47 So we were just chatting during the lunch break.
0:16:49 And I said to her, I said, Maggie, why do you do this?
0:16:50 You’re 78.
0:16:51 You should be retired.
0:16:52 She goes, well, no, dear.
0:16:53 My husband passed away a few years ago.
0:16:54 And this keeps me company.
0:16:56 And I like making people happy.
0:16:57 I was like, oh, you lovely person.
0:17:00 I said, if you don’t mind my asking, what do you not like about your job?
0:17:01 She goes, oh, that’s easy, dear.
0:17:02 My boss.
0:17:04 I said, hang on a minute.
0:17:05 Why don’t you like your boss?
0:17:06 She goes, he makes me get off the phone.
0:17:08 It’s obvious she’s there for the gossip and the chat.
0:17:12 I said, if you don’t mind my asking, how many people do you book in a shift?
0:17:17 She goes, for every 20 calls I get, I’ll probably book a, convert one, one of those phone calls
0:17:18 to a Walt Disney World vacation.
0:17:19 I said, is that good or bad?
0:17:20 I don’t know how to think about it.
0:17:23 She goes, I reckon I could get three or four out of 20 if people would trust me.
0:17:24 Maggie, you’re a grandmother.
0:17:25 Everyone trusts me.
0:17:27 You work for the most trusted brand on the planet.
0:17:28 She goes, no, dear, they don’t.
0:17:29 I said, why not?
0:17:31 She says, oh, we’ve got this policy called guest request and suggest.
0:17:33 I said, oh, God, who came up with that title?
0:17:34 So I said, what’s that?
0:17:39 She said, if the consumer is online, and let’s say it’s the Valentine’s Day offer, let’s say
0:17:43 you have to travel, book in January, travel in February, you get a free character breakfast
0:17:44 with Anna and Elsa.
0:17:48 She said, if the consumer doesn’t mention that offer in those three specific bullet points
0:17:50 first, I’m not allowed to mention it.
0:17:51 My intuition was like, ah, that sounds good.
0:17:55 So I went off to meet the head of strategic pricing, and yes, I should have been a bit
0:17:56 more diplomatic in my response.
0:17:59 I said, tell me about guest requests, don’t suggest.
0:18:02 And he said, it’s worth X million dollars in incremental revenue.
0:18:03 And I said, what, by cheating people?
0:18:04 Probably didn’t come quite out the right way.
0:18:06 And he said, we’re not cheating people.
0:18:07 We just don’t make the offer first.
0:18:11 I said, listen, Maggie here reckons she could get three or four out of 20 if we take her out
0:18:12 of your policy.
0:18:16 Could you think we could take her and six of her colleagues out of your policy for six weeks
0:18:17 to see how they perform?
0:18:20 Six weeks later, they were all booking three or four out of 20.
0:18:24 The policy went away, and Disney made X amount of dollars in incremental revenue.
0:18:28 I am a great believer that ideas come from anywhere.
0:18:30 I was head of the innovation department.
0:18:31 I think that was a mistake.
0:18:40 Well, you know, you spend a lot of time in your book talking about no, because, as opposed
0:18:41 to yes, and.
0:18:46 So now, I understand the concept there, but can you just tell us, how do you walk the fine
0:18:49 line, because you cannot say yes to everything?
0:18:51 You cannot say no to everything either.
0:18:54 So how do you decide what’s yes or no?
0:18:55 I’m very clear in my signaling.
0:18:57 I say, this is an expansionist session today.
0:19:00 We will be having a reductionist session, but today we’re expansionist.
0:19:03 And in this session, you don’t get to say no because.
0:19:05 And I don’t let people say no because.
0:19:08 I’ll make them stand up just like an alcoholic and say, I’m a reductionist.
0:19:09 And we all laugh and cheer, and they sit back down again.
0:19:13 You must clearly signal what you’re looking for from people today.
0:19:18 As long as they know they’ll have the opportunity to evaluate the ideas later on, they’ll stay
0:19:19 with you on the yes end.
0:19:21 I also think a physical room is very important.
0:19:23 Steve created it first at Pixar.
0:19:28 These rooms like the greenhouse or the Toy Story room, rather than room 3450.
0:19:29 I mean, come on.
0:19:30 You could have the Death Star room.
0:19:35 And these physical signals to everybody that when we’re in this room, we don’t get to shoot
0:19:36 ideas down.
0:19:40 The challenge for all of us is the more experience and the more expertise we have, the more reasons
0:19:41 we know why the new idea won’t work.
0:19:43 So we constantly shoot it down.
0:19:47 So I actually have an exercise that I do when I actually, do you want to play?
0:19:47 Why not?
0:19:51 OK, so are we going to do a Star Wars party or a Harry Potter party?
0:19:52 What would you prefer?
0:19:53 Star Wars.
0:19:53 All right.
0:19:55 So I’m going to come at you with some ideas for a Star Wars party.
0:19:59 I’d like you to start each and every response with the words, you know, you’ve heard every
0:19:59 day.
0:20:00 No, because.
0:20:02 And then you’ll tell me no because and tell me why not.
0:20:05 So I was thinking we could actually take over some.
0:20:08 Oh, that the new blimp, the Goodyear, they’re coming out with that new blimp again.
0:20:12 And we could turn it into the Death Star and we could have a Death Star canteen with food
0:20:13 and wine from Hoth and Naboo and Tatooine.
0:20:17 And now I’m supposed to say no because and come up with a reason.
0:20:18 No because and tell me why not.
0:20:18 Yeah.
0:20:19 OK.
0:20:22 No, because the blimp cannot hold that many people.
0:20:25 People will be waiting for hours in line to get on the blimp.
0:20:26 All right.
0:20:30 But I tell you what, then we do it at Disneyland at Galaxy’s Edge and everybody could come dressed
0:20:31 in their favorite character.
0:20:33 Tall people could be Vader and small people would be Ewoks.
0:20:34 Pretty great.
0:20:38 Well, then security will go crazy because everybody will look like Darth Vader.
0:20:40 And how do we know one of them isn’t a criminal?
0:20:41 Fair point.
0:20:45 What if we just did a 24 hour movie marathon and people could get free coke and popcorn?
0:20:53 Well, how many people can really take a 24 hour kind of movie marathon?
0:20:55 Yeah, it sounds great on paper.
0:20:57 But how many people will actually do it?
0:20:57 All right.
0:20:58 So we’ll stop there.
0:20:59 And now we can do the exercise again.
0:21:04 This time, I want you to start each and every response with the words yes and and we’ll just
0:21:06 build on each other’s idea as we go.
0:21:07 Can we do Harry Potter?
0:21:08 Sure.
0:21:09 Cool.
0:21:11 So I’m going to cover you some ideas for a Harry Potter party.
0:21:14 I’d like you to start each and every response with yes and and build on the idea.
0:21:19 So I was thinking we could come to your house, put a sorting hat inside the front door and
0:21:22 all the good people get the Gryffindor party and all the dark, mysterious people get the
0:21:23 Slytherin party.
0:21:24 Yeah.
0:21:28 And then we could have this Quidditch contest and I have a bocce court.
0:21:32 We could convert it to some kind of Quidditch court and have everybody flying around in
0:21:33 their brooms.
0:21:33 Yes.
0:21:34 And we could.
0:21:34 Yeah.
0:21:37 Put them in one of those anti-gravity chambers where they could actually fly.
0:21:39 Yeah.
0:21:42 All right.
0:21:42 So we’ll stop there.
0:21:46 Listen, a lot more laughter, a lot more energy.
0:21:48 And most of it became Italian for the first time.
0:21:51 In the first exercise, do you think our idea was getting bigger or smaller as we were going
0:21:52 through the Star Wars idea?
0:21:54 Which direction was it?
0:21:54 Smaller.
0:21:57 And with the Harry Potter idea, are we getting bigger or smaller?
0:22:00 Bigger and bigger, yes.
0:22:04 Now, we have colleagues and clients and constituents to bring on board with our ideas at work.
0:22:06 Sometimes it’s hard, the bosses and colleagues, et cetera.
0:22:10 By the time we just finished building the Harry Potter idea together, whose idea was it by the
0:22:11 time we finished?
0:22:13 I hope all of us.
0:22:14 Exactly.
0:22:17 Yes, and has the power to turn a small idea into a big one really quickly.
0:22:21 We can always value engineer a big idea back down again, but far more importantly inside
0:22:26 as any organization has the power to transfer my idea to our idea and accelerate its opportunity
0:22:27 to get done.
0:22:29 That is the value of yes and.
0:22:33 But I want to come back to when I ask people who are the most creative people you ever met,
0:22:34 people always say kids.
0:22:37 And you ask, what do kids do better than you?
0:22:37 I say play.
0:22:40 And then I’ll ask people, who’s encouraging playful at work every day?
0:22:42 And nobody puts their hand up.
0:22:44 So, let me ask you a question.
0:22:45 Close your eyes.
0:22:46 We’re going to play a word association game.
0:22:48 I want you to shout out.
0:22:48 Keep your eyes closed.
0:22:52 I have to violate HIPAA here, Duncan.
0:22:56 I am deaf and I’m listening to you through a cochlear implant.
0:22:59 And I’m also seeing a simultaneous transcription.
0:23:03 So, if I were to close my eyes and just depend on audio,
0:23:05 I probably won’t understand what you’re saying.
0:23:06 That’s fine.
0:23:08 So, keep your eyes open.
0:23:11 But I just want you to shout out the first word that pops into your mind
0:23:13 when I ask you the following question.
0:23:14 Where are you usually?
0:23:17 And what are you doing when you get your best ideas?
0:23:20 I am surfing and it is between sets.
0:23:23 So, I have nothing to do but think.
0:23:26 So, people will say surfing, jogging, walking, playing, exercising,
0:23:28 in the park, in the forest.
0:23:30 And do you know I’ve done it with up to 20,000 people?
0:23:32 And I get them to write it down, that one word.
0:23:35 And I say, hands up, who put down at work?
0:23:37 Nobody ever has our best ideas at work.
0:23:38 Why not?
0:23:41 You remember that classic argument you were in with somebody recently?
0:23:43 A bit of a shouting match, angry at each other.
0:23:45 You turn to walk away from that argument.
0:23:47 And the second you turn to walk away from the argument,
0:23:48 what just popped into your head?
0:23:50 The second you turn to walk away from that argument, what was it?
0:23:52 How I could have wanted.
0:23:53 The killer one line.
0:23:55 Yeah, that one perfect, beautiful line.
0:23:56 You wished you’d used, but you didn’t, did you?
0:23:56 No.
0:23:57 Why?
0:24:00 Because when you’re in an argument, your brain is moving at 1,000 miles an hour,
0:24:01 defending itself.
0:24:05 At work, emails, presentations, weekly meetings, compliance training.
0:24:08 I hear myself say, I don’t have time to think.
0:24:10 And when we say we don’t have time to think,
0:24:11 we’re in the brain state called beta.
0:24:12 I call it busy beta.
0:24:14 We’re the reticular activating system.
0:24:18 Much easier, remember, as a door between your conscious and subconscious brain
0:24:19 is firmly closed.
0:24:23 When that door is closed, you only have access to your conscious brain.
0:24:25 So what percentage of our brain is conscious?
0:24:27 13% of our brain is conscious.
0:24:30 87% of our brain is subconscious.
0:24:34 But everything is back here to help you solve the challenge that you’re working on right now.
0:24:36 But when the door is shut, you don’t have access to it.
0:24:37 So what do I do?
0:24:38 I run an energizer.
0:24:39 What’s an energizer?
0:24:40 It’s a silly exercise.
0:24:41 Why am I doing that?
0:24:42 To make you laugh.
0:24:42 Why?
0:24:46 Because the moment I hear laughter, I know that metaphorically, I placed you back in on the
0:24:50 surfboard where it is where you have your best ideas into the brain state science calls alpha,
0:24:54 where the door is just wide enough open between your conscious and subconscious brain.
0:24:57 You can still make an informed decision, but you can still have a big idea.
0:25:00 I don’t expect people to be playful every second of every day.
0:25:03 I do expect people to be playful when they’re trying to have big ideas.
0:25:05 That’s what children do better than they’ve done.
0:25:11 When I was reading your book and I came to that section about the four states of a brain,
0:25:15 when I read alpha, I said, guy, you are Mr. Alpha.
0:25:20 I am an alpha when I’m in the shower, when I’m surfing, when I’m driving.
0:25:21 Ask Madison.
0:25:24 I’m like all alpha all the time.
0:25:27 And can I ask you a question about these four states?
0:25:30 Because you brought up a point here I didn’t quite understand.
0:25:34 So the four states are alpha, beta, theta, and delta.
0:25:41 Now in theta and delta, you talked about Edison and dropping a penny and then it woke him up again.
0:25:48 And then you talk in the delta, the dreamy state about Dolly dropping a key and that would wake him up.
0:25:56 So I didn’t understand why Edison dropping a penny is on theta and Dolly dropping a key is in delta.
0:25:59 It seems like those are very similar things.
0:26:00 Yes and no.
0:26:01 So here’s how it works.
0:26:06 If you know the expression when the penny drops, that eureka moment when I get the big idea, it came from Thomas Edison.
0:26:07 He used thoughtful theta.
0:26:12 He used to fall asleep at night, seated on an armchair with a tin tray on the floor.
0:26:13 The penny was between his knees.
0:26:14 He would fall asleep.
0:26:15 His muscles would relax.
0:26:16 The penny would drop.
0:26:20 It would hit the tin tray and it would wake him up and he’d write down whatever he was thinking.
0:26:21 And we might say, well, that’s nuts.
0:26:22 I’d never do that.
0:26:25 Well, who had more painted inventions in the 20th century than anybody else?
0:26:28 Dolly used to fall asleep against his easel.
0:26:31 As he fell asleep, he’d fall over and that would wake him up.
0:26:33 And he would sketch whatever he was dreaming.
0:26:35 Of course, I want to know he was smoking before he went to bed.
0:26:36 But he’s not one of those.
0:26:38 But neither of them were unsuccessful.
0:26:46 If one of those people who gets our best ideas as we’re falling asleep or waking up, A, keep a notepad by the bed because you promise yourself you won’t forget it by six o’clock in the morning.
0:26:53 Far more importantly, when you’re working with your colleagues, I hear so often clients will come to me and say, could you solve something in two hours?
0:26:54 You’re like, yeah, right, sure.
0:26:56 And the door was shut because we’re stressed.
0:26:59 And so the door between our conscious and subconscious brain firmly stressed.
0:27:01 Brief it in a week or two in advance.
0:27:08 Give people time to go wherever they are, whether they’re in the shower, whether they’re falling asleep, whether they’re in dreaming delta, which is way in the middle of the night.
0:27:11 So theta is the difference in answer to your question between theta and delta.
0:27:15 Theta is just as you’re beginning to wake up in the morning or just as you’re nodding off at night.
0:27:17 Delta is the doors are off.
0:27:20 You’re riding pink ponies and unicorns through the universe at three o’clock.
0:27:24 Probably not the best brain state for creativity at work.
0:27:28 I find the best brain state for creativity at work is the one that you live in is alpha.
0:27:30 How do we get there by being playful?
0:27:32 I want you to answer that question.
0:27:33 How do you get to alpha?
0:27:37 I don’t have a problem getting to alpha, but how do other people get a problem?
0:27:38 There’s a series of them in the book.
0:27:39 They’re called energizers.
0:27:40 They are 60 second X.
0:27:45 When I walk into a room, the first thing I do is sand down and say, hands up, who’s creative?
0:27:47 About 3% of the audience will put their hands up.
0:27:54 So then I get them to stand up in pairs and I tell person A they are the leading designer of Parachutes for Elephants.
0:27:55 Person B, they’re a news reporter.
0:27:58 They have to interview person A about how they get their job done.
0:28:02 And for the next two minutes, you just stand back and listen to the laughter in the room.
0:28:10 All I’m doing is opening the door between the conscious and subconscious brain and putting them back in wherever it is when they have their best ideas, when they’re an amazing alpha.
0:28:12 That’s what the energizers are for.
0:28:14 They are playfulness with purpose.
0:28:17 And again, ask us who are the most creative people we’ve ever met.
0:28:18 Kids, what do they do?
0:28:18 Play.
0:28:19 This is not rocket science.
0:28:27 I have to tell you, Duncan, that I’m almost afraid to admit this because people in California might go crazy when I tell them this.
0:28:33 But I take three showers a day and I’m thinking in those showers all the time.
0:28:35 And I surf once a day.
0:28:36 Plenty of ideas.
0:28:37 An idea factory.
0:28:42 Ask Madison, am I an idea factory or not?
0:28:43 Yes, very much so.
0:28:44 Always new ideas.
0:28:50 And Madison always says, no, because.
0:28:54 Madison, yes, Angel.
0:28:55 Yes, Anne, come on.
0:28:57 I’ll work on it.
0:29:03 Madison is my beta.
0:29:08 Between my alpha and her beta, we are an unstoppable team.
0:29:18 I would love to find out, do you even think it’s possible or does it merit doing this?
0:29:20 But how do you measure creativity?
0:29:23 That’s a tough one.
0:29:24 I know how to measure an idea.
0:29:25 Would that help?
0:29:27 Yes, that’s close enough.
0:29:35 So, you know, at the end of the brainstorm, we finish the brainstorm and we’re told we can put our three purple dots on the three ideas we like the most, the best.
0:29:37 So we read all of the ideas and then we look around the room.
0:29:38 Where’s our boss?
0:29:39 Oh, yeah, they’re over there.
0:29:41 Where are they going to put their red dots?
0:29:42 Oh, idea number 17.
0:29:46 So we line up right behind them and we put our idea on our dot on number 17.
0:29:47 We tell them how much we liked it, too.
0:29:48 But guess what?
0:29:49 We didn’t.
0:29:57 And so when the idea goes off to execution, it will get stuck, diluted or killed because the people who are responsible for getting it done were not passionate about it in the first place.
0:30:02 So I have a talk called Passionometer where I allow people to vote anonymously on their favorite ideas.
0:30:03 This is voting with your heart.
0:30:05 Got nothing to do with the head, nothing to do with strategy.
0:30:09 This is the idea that I want to take home and tell my loved ones I got to work on this.
0:30:10 It was one of my ideas.
0:30:11 That’s Passionometer.
0:30:14 You want to find out where the passion of the team is first.
0:30:19 I can get down from 50 ideas to about eight in a nanosecond doing that exercise, but it is done anonymously.
0:30:24 Then I’ll share with you this tool that I borrowed with pride from Richard Branson.
0:30:26 I love Richard Branson.
0:30:29 When was the last time anybody ever called him a CEO?
0:30:29 Never.
0:30:30 Yes, he is.
0:30:30 Of course he is.
0:30:31 He’s an entrepreneur.
0:30:32 He’s an entrepreneur.
0:30:34 So think of all the things he’s launched that failed.
0:30:41 Coca-Cola, Virgin Cola, Virgin Volca, Virgin Massages, Virgin Mobile, Virgin, you name it.
0:30:41 So what?
0:30:43 Virgin Bride?
0:30:45 Yes, Virgin Wedding’s got to remember.
0:30:47 He uses a tool called Stargazer.
0:30:50 So this is about voting with your head, not your heart.
0:30:52 Virgin is a very elastic brand, right?
0:30:54 Disney is a very non-elastic brand.
0:30:57 So Virgin, he’s done condoms and space travel and everything in between.
0:31:03 So how does Virgin evaluate what new ideas and products and services they should bring to market?
0:31:05 I use the same tool.
0:31:06 I call it Stargazer.
0:31:10 Let’s just say for today’s argument, is this idea a strategic brand fit?
0:31:11 I’m making that up.
0:31:14 People would choose their own criteria, obviously.
0:31:16 Is this idea embedded in consumer truth?
0:31:19 Maybe our target audience today is 21 to 24-year-olds.
0:31:24 Can I get this idea executed in the next 12 to 18 to 24 months?
0:31:25 My boss wants that done.
0:31:27 Is it going to make us a bucket load of money?
0:31:28 You’ll have a financial goal.
0:31:30 And is it socially engaging?
0:31:34 Is it going to get the 21 to 24-year-olds to talk about it on their social media?
0:31:36 And all you do is you take each idea.
0:31:40 And the problem with ideas are they’re horribly subjective, right?
0:31:40 You like pink.
0:31:41 I like blue.
0:31:41 Our boss likes yellow.
0:31:43 It’s a very good chance we’ll be doing the yellow idea.
0:31:46 All you do is you go around and score the idea.
0:31:50 Does it do a poor job, a good job, or an outstanding job of being aligned with our brand?
0:31:51 It does a pretty good job.
0:31:53 Is it going to make us a bucket load of money?
0:31:54 Oh, hell yes.
0:31:55 Is it socially engaging?
0:31:56 It’s fairly good.
0:31:59 Can I get it in the market the next 18 to 24 months?
0:32:00 Not a chance.
0:32:01 Is it embedded in consumer truth?
0:32:02 It does a fairly good job.
0:32:06 And then with a different colour for each of the last eight ideas you’ve got,
0:32:11 at some point, one idea will rise to the top as to meeting your criteria the most,
0:32:12 not the one you like the best.
0:32:16 By the way, the other thing that Branson always said was,
0:32:20 if it’s not a three out of three of embedded in consumer truth
0:32:24 and aligned with the Virgin brand, we must have the courage to throw it out.
0:32:27 When we were bringing two new Disney cruise ships into market,
0:32:29 we were bringing the big ones in,
0:32:31 we had to decide where the old ones would go.
0:32:34 Like any big corporation, that conversation takes too long.
0:32:36 And, oh, Dave’s not here today.
0:32:37 Oh, Sally’s not here today.
0:32:38 Oh, I’ve got to wait for Sally.
0:32:38 No.
0:32:41 Or it comes to all the VPs sitting in the room and go,
0:32:42 do you know what?
0:32:43 Last year I went to the Med.
0:32:44 It was great.
0:32:46 Oh, my wife loved the Alaska cruise.
0:32:47 I don’t give a toss.
0:32:49 We use this tool.
0:32:52 We’re 16 senior vice presidents of the Walt Disney Company.
0:32:55 We made a decision in 59 minutes.
0:33:01 Because one of them was, can I actually get a berth in the port in which we want in the next 12 months?
0:33:03 And if you can’t, you shouldn’t be doing it.
0:33:05 And it’s just great for cutting through all the nonsense.
0:33:08 And again, the tools are designed to be simple, powerful, fun.
0:33:18 So just as a little bit of realism here, if you looked at the top of the funnel when everything was yes and,
0:33:23 and the bottom of the funnel, like what percentage gets out and into reality?
0:33:24 That’s very fair.
0:33:29 So people often ask me what percentage of time they should spend in expansive versus reductive.
0:33:32 And so everybody says, oh, 80% expansive.
0:33:33 No, it’s the opposite.
0:33:36 It’s 20% expansive, 80% reductive.
0:33:37 The hard stuff is getting it done.
0:33:40 Having ideas, like you said, hundreds a day.
0:33:44 Getting them done through all the corporate approval processes, et cetera, et cetera, et cetera.
0:33:45 That takes time.
0:33:47 And that’s where the innovation tools come in.
0:33:50 My favorite, as you could probably guess, is the one called What If.
0:33:51 Why?
0:33:52 Because it’s about breaking the rules.
0:33:54 So it was a marvelous tool.
0:33:58 It was created by Walt Disney for the film Fantasia in 1940.
0:34:01 He wanted to pump mist into the theater and heat into the theater.
0:34:03 And the theater owner said, no, Walt, too expensive.
0:34:04 That’s not the way we do it here.
0:34:07 So Walt, step one, list the rules of your challenge.
0:34:10 So he just wrote down the rules of going to a movie theater.
0:34:11 I must sit down.
0:34:12 I must be quiet.
0:34:12 It is dark.
0:34:13 I must go to set time.
0:34:15 I must watch the previews.
0:34:16 I, Walt, can’t control the environment.
0:34:18 Step one, list the rules.
0:34:19 Step two, pick one.
0:34:20 He chose the environment.
0:34:22 And he said, what if I could control the environment?
0:34:24 Well, that wasn’t audacious enough.
0:34:30 The more audacious, outrageous and provocative your what if, the further out of your own river of thinking you’ll jump.
0:34:35 So he said, well, OK, if I can’t control the environment inside the theaters, what if I take my movies out of the theater?
0:34:36 Don’t be daft, Walt.
0:34:36 They’re two-dimensional.
0:34:37 They fall over.
0:34:39 What if I made them three-dimensional?
0:34:40 How do you do that, Walt?
0:34:43 What if I just had people dressed as princesses and cowboys and pirates?
0:34:45 People would be more immersed in that.
0:34:47 Yeah, but you can’t have Cinderella standing next to Jack Sparrow.
0:34:49 People would be immersed in her story.
0:34:51 So he said, well, what if I put them in different themed lands?
0:34:52 Boom.
0:34:53 What if I called it Disneyland?
0:34:57 Now, for people watching, it’s easy to say, oh, but I don’t have the resources.
0:34:58 So I’ll give you another example.
0:35:00 If I give you a big one, give you a small one.
0:35:05 There was a very small company in Great Britain in the 60s that used to make glasses that we drink out of.
0:35:08 They found too much breakage and not enough production when the glasses were being shipped and wrapped.
0:35:13 So they went down to the shop floor, observed the industry and wrote down the rules.
0:35:16 26 employees convey about 12 glasses to a box.
0:35:17 Boxes made out of cardboard.
0:35:18 Six on the top, six on the bottom.
0:35:20 Glasses separated by corrugated cardboard.
0:35:22 Glasses wrapped individually in newspaper.
0:35:24 Employees reading the newspaper.
0:35:27 So somebody asked the somewhat provocative, outrageous, what if question.
0:35:28 They said, what if we poke their eyes out?
0:35:30 That’s against the law and it’s not very nice.
0:35:34 But because they had the courage to ask it, somebody sitting next to them, the lady said, hang on a minute.
0:35:36 Why don’t we just hire blind people?
0:35:37 So they did.
0:35:38 Production up 26 percent.
0:35:40 Breakage down 42 percent.
0:35:44 The British government gave a 50 percent salary subsidy for hiring people with disabilities.
0:35:50 It’s about listing the rules of the challenge, taking one and asking the most audacious, what if question.
0:35:54 Why didn’t they just put newspapers in language that the people didn’t read?
0:35:58 Ooh, see, there you are, an amazing alpha again.
0:35:59 Dude, nice one.
0:36:00 Should have done it in Japanese.
0:36:08 Okay, but I asked you a very specific question from the top of the funnel to the bottom.
0:36:10 Like, what’s a percentage?
0:36:13 One out of 100, 20 out of 100.
0:36:16 What’s the order of magnitude that get through this?
0:36:19 I don’t think there’s a set percentage key.
0:36:22 I will tell you one of the things that helped me get things done was persistence.
0:36:24 I was like a bulldog and I wouldn’t let go.
0:36:27 If I believed in something long enough, I would go at it and go.
0:36:30 I would drive my boss absolutely mental, I would drive my boss absolutely mental and I wouldn’t give up on it.
0:36:39 As I mentioned earlier on that the social video that we produced, which was the most successful social video we ever produced, I refused to go through the approval process.
0:36:46 Because the approval process will get everybody in from brand strategy touching everything and diluting the content completely.
0:36:49 And when we produced the video, somebody said, where’s our logo?
0:36:50 I said, he’s five foot two.
0:36:52 He’s got big black ears and everybody loves him.
0:36:53 Get over yourself.
0:36:55 Probably not the best.
0:36:59 If you want somebody who stays inside the raw box, that’s probably not me.
0:37:05 But the percentage of ideas that we came up with Disney that came back out the other end, 5% maybe.
0:37:07 Up next on Remarkable People.
0:37:11 We were tasked by Disneyland Paris to get more people to come more often spend more money.
0:37:15 Our data told us who could afford the brand, who had affinityed the brand, who had been shopping online.
0:37:16 It was a 10 out of 10 of I’m coming this year.
0:37:17 Well, they hadn’t come.
0:37:20 So our intuition told us our data was missing something.
0:37:22 These people were either liars or procrastinators.
0:37:23 So let’s go find out.
0:37:36 Thank you to all our regular podcast listeners.
0:37:39 It’s our pleasure and honor to make the show for you.
0:37:45 If you find our show valuable, please do us a favor and subscribe, rate, and review it.
0:37:48 Even better, forward it to a friend.
0:37:50 A big mahalo to you for doing this.
0:37:55 You’re listening to Remarkable People with Guy Kawasaki.
0:38:02 How do you feel about these requirements of returning to the office?
0:38:10 Do you think that returning to the office increases collaboration or returning to the office is going to kill the alpha state in most people?
0:38:10 Think about this for a moment.
0:38:11 Who’s making that decision?
0:38:13 Oh, the boomers generation.
0:38:13 Yeah.
0:38:14 Okay, great.
0:38:15 Well done, you.
0:38:16 And what are you going to do?
0:38:17 You’re going to lose talent.
0:38:19 Because the talented people can leave.
0:38:20 They can get a job somewhere else.
0:38:23 If they don’t need to be there, they don’t need to be there.
0:38:23 I’m sorry.
0:38:24 I just vehemently disagree.
0:38:27 As long as you get your job done, I don’t care if you’re standing on the moon.
0:38:31 Here’s the biggest challenge facing corporate America in the next five to ten years.
0:38:32 Guess what?
0:38:33 Generation Z doesn’t want to work for you.
0:38:34 You already know it.
0:38:35 It terrifies you.
0:38:39 How would you stay relevant if this entire generation doesn’t want to work for you?
0:38:39 Why?
0:38:41 Because you’ve been driven by quarterly results.
0:38:42 They’re driven by purpose.
0:38:44 You think they’ll bend to change to you.
0:38:49 No, they won’t, just because you had to bend to change to your elders, because you could
0:38:51 only tell two people down the park.
0:38:52 They can tell the world.
0:38:57 So I was asked to give a talk to, let’s just call it the largest tool manufacturer, about
0:38:58 innovation and millennials.
0:39:02 So I didn’t know anything about this generation in terms of how they reacted with tools.
0:39:06 So I went down to Home Depot and Lowe’s, hung out in the aisle like some creepy dude.
0:39:10 And I was just listening and watching at the point of purchase that we’re taking this home.
0:39:14 And I went back to this brand, who is the largest manufacturer of tools in the United States
0:39:16 and I said, listen, this generation has never heard of your brand.
0:39:17 They didn’t mention you once.
0:39:20 They didn’t mention your products, the hammer, the chisel, the sword.
0:39:22 They didn’t even talk about the price, but they talked about what’s important to them.
0:39:25 We’re going to remodel our dream kitchen, our dream bathroom, our dream apartment.
0:39:29 I said, your purpose, if you choose to create one, is you could be the brand who helps people
0:39:30 build their dreams.
0:39:33 You could see the finance guys going, how quickly can we get this guy out of here?
0:39:34 I said, well, hang on a minute.
0:39:37 If you’re the brand who can help people build their dreams, could you be in banking?
0:39:37 Yes.
0:39:37 Finance?
0:39:38 Yes.
0:39:39 Engineering?
0:39:39 Yes.
0:39:40 Health?
0:39:40 Yes.
0:39:41 Education?
0:39:41 Yes.
0:39:42 Hospitality?
0:39:42 Sport?
0:39:43 You’d be in any line of it.
0:39:44 No, no, we make tools.
0:39:45 We’re really good at it.
0:39:47 In fact, we’re going to expand into Mexico and India.
0:39:48 They have a great middle class.
0:39:49 They will buy our tools.
0:39:50 Oh, yeah.
0:39:51 OK, good luck with that.
0:39:53 Have we seen the world of 3D printing recently?
0:39:53 Right.
0:39:56 India bypassed laptop computers and went to mobile phones.
0:40:00 Generation Z will bypass tools and go to 3D printing.
0:40:02 There’s a chap now.
0:40:04 I don’t know if you saw the CBS special January last year.
0:40:06 That’s how much impact it had on me.
0:40:13 young guy in his 30s in Texas building houses fully sustainable for $1,500 in five days and
0:40:14 the first houses he gave to the homeless.
0:40:20 NASA have now employed him to print a landing pad on the moon from which he can print a printer
0:40:21 from which he can build housing.
0:40:25 And if we don’t have purpose, I believe Generation Z won’t work for us.
0:40:32 And if you don’t have a new generation of employees, cast members, staff members, then I don’t care how successful you are today.
0:40:33 You’re not going to be around 10 years from now.
0:40:40 I got to say that if I’m listening to this and I’m buying into this, my first question would be, I’m stuck in this company.
0:40:44 It’s full of no because and my bosses and stuff.
0:40:45 What do I do?
0:40:46 Now run to the door.
0:40:47 Run for the exit.
0:40:49 Literally, you’re saying leave.
0:40:52 Here’s what I do with senior executives.
0:40:55 I get them to do that no because yes and exercise.
0:40:57 You can’t tell people what to do.
0:40:58 They have to do it for themselves, right?
0:41:00 And so people learn different ways.
0:41:03 Some people will learn by seeing, some by doing, some by listening.
0:41:08 And so I get them to do the no because and the yes and exercise because then they get, oh, I’m a no becauseer.
0:41:11 And I tell them, I know you have responsibilities.
0:41:12 You’re the CEO of you.
0:41:17 So just remind yourselves, we’re not greenlighting this idea for execution today.
0:41:19 We’re merely greenhousing it together using yes and.
0:41:22 But I want to come back on those learning abilities for a moment.
0:41:25 I can’t get you to close your eyes, but we’ll try it anyway.
0:41:26 How many days are there in September?
0:41:28 30, I would guess.
0:41:29 Okay.
0:41:29 How did you know?
0:41:30 How did you remember?
0:41:31 How did you learn it?
0:41:33 What did you just think of?
0:41:36 What could you see with your metaphorically eyes closed?
0:41:38 How did you know there were 30 days in September?
0:41:41 Madison, how did you know there were 30 days in September?
0:41:44 Just remembering like a calendar when I was younger.
0:41:44 A calendar.
0:41:46 So Madison can see it.
0:41:46 Okay.
0:41:47 Guy, how did you remember it?
0:41:52 I did it because I figured there’s very few months with 29 days.
0:41:54 So it’s 30 or 31.
0:41:56 And so it’s 50, 50.
0:41:59 So just pick one and you’ll rewrite half at a time.
0:42:02 30% of any audience would do this.
0:42:04 30 days have September, blah, blah, blah.
0:42:04 And November all the way.
0:42:06 They are auditory learners.
0:42:07 How do I know that?
0:42:10 They just told me because how old were they when they learned the rhyme?
0:42:10 Six.
0:42:11 How do they remember it?
0:42:12 Because they heard it.
0:42:14 40% of the audience would do what Madison just did.
0:42:17 They go, oh, no, I could just see a candle with a number 30, the word September.
0:42:19 They’re your visual learners.
0:42:21 And then these, but you’ve never seen anybody do this?
0:42:24 January, February, March, April, May, June, July, August.
0:42:25 These are kinesthetic learners, right?
0:42:26 They learn by doing.
0:42:30 And when I decided to create a book, I said to the publisher, it’s not a book.
0:42:31 He goes, what do you mean it’s not a book?
0:42:32 I said, it’s not a book.
0:42:32 If it’s a book, we fail.
0:42:33 Why?
0:42:36 Because when you see a book in an office, where is it?
0:42:37 It’s on the coffee table.
0:42:37 It’s on the bookshelf.
0:42:38 That’s a waste of money, isn’t it?
0:42:43 So I decided, OK, what nonfiction book have I ever read where I could read one page today,
0:42:45 put the rest of the book down, but know exactly what to do next?
0:42:47 I thought, my mum’s cookbook.
0:42:48 You want shepherd’s pie?
0:42:49 I said, page 67.
0:42:49 Cherry trifle?
0:42:50 Page 42.
0:42:52 So the book is designed the same way.
0:42:54 It says, have you ever been to the contents page?
0:42:56 It literally says, have you ever been to a brainstorm where nothing ever happened?
0:42:57 Go to page 12.
0:42:59 Work in a heavily regulated industry?
0:43:00 Go to page 42.
0:43:04 But it’s also designed for our visual, kinesthetic, and auditory learners.
0:43:05 There’s QR codes throughout.
0:43:07 They’re dynamic, so I can change them at any time.
0:43:11 For the auditory learners, it’s Sposify, but I’ll change it to an audio book over time.
0:43:15 For the visual learners, I am now an animated character, because I love doing things I haven’t
0:43:16 done before.
0:43:20 So I went into a studio in LA and bounced around with some characters.
0:43:23 I teach you how to use the tools inside the imagination.
0:43:28 But for the kinesthetic learners, I don’t know if it’s the first, but I haven’t seen another
0:43:29 one.
0:43:32 It’s the first ever fully integrated artificial intelligence book.
0:43:36 So you can ask the book questions through the QR code on the back of the book, and the
0:43:37 book will answer you.
0:43:39 Now, here’s the power of AI, right?
0:43:43 So I thought, ooh, I live in the most litigious country on the planet, so careful now.
0:43:46 So I thought, okay, I could just say, how do I use the tool on Pay67?
0:43:47 Nah, who cares?
0:43:48 I’ve just read the book.
0:43:48 Why would I need that?
0:43:53 No, you can ask the book, how do I use the tool on Pay67 to sell more orange pencils in
0:43:55 the state of Pennsylvania on January the 3rd next year?
0:43:57 The book will answer you.
0:44:00 But I thought, oh, but if they lose money on the orange pencils, are they going to sue me?
0:44:03 So it’s like, here come the terms and conditions.
0:44:05 I love doing things I haven’t done before.
0:44:07 That’s the only thing that excites me.
0:44:09 If I know how to do it, I get bored really easily.
0:44:11 So the book is, it’s a toolkit.
0:44:12 Now, I wanted to give it away for free.
0:44:14 The publisher had slightly different ideas.
0:44:18 Still want to give it away for free for students, because these are tomorrow, and these are the
0:44:21 people being told to stop asking why, because there’s only one right answer.
0:44:22 Don’t forget to color between the lines.
0:44:26 And they’re identifying as not creative by the time they leave university.
0:44:27 And that’s just sad.
0:44:29 I read your book cover to cover.
0:44:32 And wow, there’s so much in there.
0:44:34 30 bloody years, mate.
0:44:35 Try to get into 12 pages.
0:44:37 The editor had a field day.
0:44:40 So the next book I want to write is called Rolling Back the Ears.
0:44:43 It’s all the fun stuff that happens behind the magic to make it happen.
0:44:46 Like the day I stole the turkey from the president of the United States of America on Thanksgiving
0:44:50 Day, or the day I sent my son’s Buzz Lightyear into space for the opening of Toy Story.
0:44:52 That’s what I love doing about Disney.
0:44:56 What I loved the most was this Henry Ford quote.
0:44:58 Whether or not you think you can or think you can’t, you’re probably right.
0:45:00 It was Disneyland’s 50th anniversary.
0:45:02 The actual anniversary was over.
0:45:03 The media were tired of hearing from us.
0:45:06 I was like, what else do the media have to cover, even if they don’t want to?
0:45:09 Well, Mother’s Day, Father’s Day, Thanksgiving, Halloween, etc.
0:45:10 I said, tell me about Thanksgiving.
0:45:13 And this bloke said, well, the president pardons a turkey.
0:45:14 I said, well, hang on.
0:45:17 That’s the only turkey that doesn’t get killed that year.
0:45:17 He goes, yeah.
0:45:19 I said, wouldn’t that make him the happiest turkey on earth?
0:45:23 And everybody goes, oh, don’t even go there, dude, because Disneyland is the happiest place
0:45:23 on earth.
0:45:24 So I’m a great believer.
0:45:25 You pick up the phone.
0:45:26 You make your pitch.
0:45:26 They can laugh.
0:45:27 They can say no.
0:45:28 They can put the phone down.
0:45:28 Who cares?
0:45:32 So I phoned the White House and I got through to the director of communications.
0:45:34 I said, hey, what do you do with a turkey after the pardoning ceremony?
0:45:36 He says, oh, we give it to the National Turkey Federation.
0:45:38 I was like, oh, didn’t know we have one.
0:45:39 Couldn’t give me their number, could you?
0:45:42 So I called the president of the National Turkey Federation.
0:45:43 I said, what do you do with the turkeys after?
0:45:45 He said, oh, we’re just putting on a petting seal.
0:45:46 I said, well, can I have them?
0:45:46 He goes, yeah.
0:45:49 I was like, oh, aren’t we supposed to negotiate or haggle?
0:45:53 Then I found out more about turkeys than you could possibly want to know.
0:45:56 Turkeys, when grown to a certain size, have heart attacks and die.
0:45:57 I thought, oh, great.
0:45:57 You want coverage.
0:46:01 The one turkey pardoned by the president of the United States of America
0:46:03 is killed by a British PR guy on a stunt for Disney.
0:46:06 So in a moment of total and utter stupidity,
0:46:08 guy, we’ve all had those moments in our career
0:46:10 which seemed like a good idea at the time.
0:46:12 Well, I sent Pilgrim Mickey, the walk-around character,
0:46:16 and the parade music up to the pen, get the turkey kind of acclimatized.
0:46:18 And then I phoned the National Turkey Federation.
0:46:20 I said, you have told the White House we’re taking the turkey, right?
0:46:21 He said, no.
0:46:23 I said, you have to because we’re going to do the Super Bowl spot.
0:46:24 Turkey won.
0:46:26 You’ve just been pardoned by the president of the United States of America.
0:46:27 What do you do next?
0:46:27 Gobble, gobble.
0:46:28 I’m going to Disneyland.
0:46:31 So they phoned back and said, no, the White House is in.
0:46:31 I said, oh, great.
0:46:33 So then I get a call from our chairman.
0:46:35 He said, Duncan, I see you booked the corporate jet
0:46:38 for the 23rd of November from Washington, D.C. to L.A.
0:46:41 Can you tell me the passenger manifest, please?
0:46:44 I was like, well, Jay, I’ve got a couple of turkeys I need to move.
0:46:45 He goes, absolutely not.
0:46:49 I said, Jay, this is the second busiest travel day of the year.
0:46:50 It’s two days before Thanksgiving.
0:46:52 If you cancel, we can’t get this done.
0:46:53 And the president says we’re doing it.
0:46:54 He goes, I don’t care.
0:46:55 We’re not doing it.
0:46:57 Which I realized why afterwards.
0:47:02 I wish he just told me this would be his first request of the corporate jet from Bob because
0:47:03 Bob would just become CEO.
0:47:05 And imagine being your first request.
0:47:06 I need the corporate jet.
0:47:07 What for?
0:47:08 A couple of turkeys.
0:47:11 So I’m now in my favorite meeting of my 30 years at Disney.
0:47:13 36 people around a table.
0:47:15 Very serious conversation.
0:47:18 Animal welfare rights, corporate communications, operations, entertainment.
0:47:23 If the turkey dies halfway down Main Street, USA, will we run out and shroud it?
0:47:25 Or will you just look the other way and pretend it didn’t happen?
0:47:29 So then, God bless America, unbeknownst to any of us, the turkey that travels to the White
0:47:31 House travels with a stunt double.
0:47:32 This is what I loved about Disney.
0:47:35 When you said, here’s a problem, somebody went, I got you.
0:47:38 So this guy called Denny from Entertainment pops up out of nowhere.
0:47:41 He goes, do you remember the old spy movies, the black and white ones?
0:47:43 I was like, Denny, you really want to bring that up right now?
0:47:44 He goes, yeah, yeah.
0:47:47 Remember when the bad guy’s running away, the good guy’s running away from the bad guys?
0:47:49 He hits the wall and the wall turns around.
0:47:50 He’s on the other side of it.
0:47:51 I said, yeah.
0:47:53 He goes, I’ll build you one of those.
0:47:56 We’re going to put turkey one out the front of the float, turkey two out the back.
0:47:58 If turkey one goes down, I’ve got your back.
0:47:59 I said, oh, genius.
0:48:03 So now when you think nothing else could possibly go wrong, there’s a couple of weeks to go.
0:48:05 Bird flu hits the United States of America.
0:48:08 So I phoned up the director of comms at United Airlines.
0:48:10 I said, come on, we’re going to have a bit of fun with this.
0:48:13 And unbeknownst to us, they’d work with the Federal Aviation Authority.
0:48:15 So we walk into the airport.
0:48:20 And this is back in 2005 now, where the airports used to go, where the flights would drop down.
0:48:24 And it just came, instead of United Airlines 253, it just said, Turkey one.
0:48:26 I was like, oh, my God.
0:48:29 So then we get on the plane and they’ve got postcards in all the seats.
0:48:35 This is in honor of today’s guests, Marshmallow and Yam, who have been pardoned by the Presidents of the United States of America on their way to Disneyland.
0:48:38 We will not be serving turkey sandwiches in today’s flight.
0:48:39 We’ll be serving ham or cheese.
0:48:41 So now we get into the briefing room.
0:48:43 And the very first, we did it for seven years.
0:48:45 We did it with George Bush and President Obama.
0:48:53 George Bush comes in, unbeknownst to any of us, his script writer finds out where the turkeys are going, decides to have a bit of fun at our expense, but nobody had told us.
0:48:55 And I’m in charge of public relations at the time.
0:49:01 So George comes in, he goes, this year, Marshmallow and Yam were a little bit nervous about going back to a place called Frying Pan Park.
0:49:03 I was like, who the hell called it Frying Pan Park?
0:49:05 He goes, so this year, the turkeys are going to Disneyland.
0:49:08 I was like, oh, my God, did the President of the United States of America just…
0:49:11 And he goes, not only that, they were served the rest of their days at Disneyland.
0:49:12 I was like, my God, he said it twice.
0:49:19 And then he wrapped up his speech, he said, and not only that, they were served as grand marshals in Disneyland’s Thanksgiving Day Parade.
0:49:20 I was like, I can retire.
0:49:22 This is the best day of my life.
0:49:27 So the head of entertainment for Disney Parks comes across the room looking really angry, very frustrated.
0:49:28 It was like, dude, chill out.
0:49:29 This is the best day of my life.
0:49:32 He goes, we don’t have a Thanksgiving Day Parade.
0:49:34 I was like, oh, my God.
0:49:38 He goes, in order to build you two floats in a couple of days, it’s going to cost you a couple of hundred thousand dollars.
0:49:40 I said, well, Matt, I don’t have any money.
0:49:42 The President says we’re doing it.
0:49:42 So over to you.
0:49:51 And two days later, God bless Matt, Marshmallow and Yam came down the street of Main Street USA at Disneyland as grand marshals in Disneyland’s Thanksgiving Day Parade.
0:49:57 To me, it’s the epitome of, I love the Thomas Edison quote, whether or not you think you can or think you can’t, you’re probably right.
0:50:03 I dare you to try this again this November.
0:50:05 Don’t go there, don’t go there.
0:50:06 Don’t, do not.
0:50:08 Do not go there.
0:50:12 You and Elon with two turkeys.
0:50:13 I can see that.
0:50:18 There’s a joke there somewhere, but I’m not going.
0:50:19 I’m not reaching for it.
0:50:27 My last question for you is that you mentioned the concept of how to read your customer.
0:50:29 Oh, not, I used the C word.
0:50:33 How do you read your guest’s mind?
0:50:35 How do you read the mind of your guests?
0:50:37 Yeah, intuition.
0:50:42 So if I were to ask people, have you ever stared at the back of the head of somebody you think looks totally hot?
0:50:44 And that person is a total stranger.
0:50:46 They immediately turn around and look at you to look away really quickly.
0:50:47 Well, we’ve all done it.
0:50:48 How did we know?
0:50:48 How did they know?
0:50:53 We have 120 billion neurons in this brain and 120 million neurons in this brain.
0:50:58 The brain with which we as consumers and as business people make a lot of our decisions when we say we went with our gut.
0:51:02 So what is the power of intuition in an AI dominated world?
0:51:06 We were tasked by Disneyland Paris to get more people to come more often spend more money.
0:51:10 Our data told us who could afford the brand, who had affinity to the brand, had been shopping online.
0:51:11 It was a 10 out of 10 of them coming this year.
0:51:12 Well, they hadn’t come.
0:51:15 So our intuition told us our data was missing something.
0:51:17 These people were either liars or procrastinators.
0:51:18 So let’s go find out.
0:51:22 So we went to go and live with one of 26 different families for a day.
0:51:26 Now, going into hypotheses based on data and data alone was if we build it, they will come.
0:51:29 Well, that’s a $250 million capital investment strategy.
0:51:30 So you better be right.
0:51:32 So we went off to live with a series of different families.
0:51:34 Now, let me ask you a question, Guy.
0:51:34 Do you have children?
0:51:36 Four of them.
0:51:40 OK, so I kind of need you to close your eyes, but not close your eyes.
0:51:42 So picture the favorite photograph.
0:51:44 It’s in your house somewhere.
0:51:45 It’s a physical photograph.
0:51:47 It’s that favorite one of your children.
0:51:50 It makes you smile every time you think of it.
0:51:52 Which room is that favorite photograph in?
0:51:55 It is a picture of me with my children.
0:51:57 We’re all in wetsuits.
0:51:58 We’re holding our surfboards.
0:51:59 We just finished surfing.
0:52:01 And where were you that day?
0:52:03 Where was the photograph taken?
0:52:06 Well, there’s two versions of that photo.
0:52:09 One is in Waikiki and the other is in Santa Cruz.
0:52:10 But let’s say the Waikiki one.
0:52:11 OK, Waikiki one.
0:52:14 And are you comfortable telling us your children’s names?
0:52:15 Oh, of course.
0:52:19 It’s Nick, Noah, Noemi and Nate.
0:52:22 Nick, Noah, Noemi and Nate.
0:52:24 How old were they the day the photograph was taken?
0:52:33 Oh, something like 22, 20, 13 and 11.
0:52:33 Something like that.
0:52:35 And how old are they today?
0:52:38 Oh, they are 32, 30.
0:52:40 I know I’m going to get this wrong.
0:52:43 And 21 and 19.
0:52:44 Something like that.
0:52:45 So give or take the photograph.
0:52:47 I hope my wife doesn’t listen to this.
0:52:50 So give or take the photograph about 12 years old.
0:52:51 The one that you just thought of.
0:52:54 OK, so I asked the lady that I was living with.
0:52:56 I said, how old are your children?
0:52:59 The photograph looked like they were 24, 24 or five.
0:53:01 She goes, oh, no, love, they’re 24 and 25.
0:53:02 So I wrote it down.
0:53:03 It’s an individual clue.
0:53:04 It means nothing at the time.
0:53:05 It’s an individual data point.
0:53:08 So when we got back together, we all had the same data point.
0:53:10 When we asked the parent, when I asked you just now,
0:53:12 when I asked her how old the children were,
0:53:14 they turned out the picture was 20 years older in reality.
0:53:17 So my intuition was like, well, why is that?
0:53:20 But why did you just pick the one that you just thought of?
0:53:22 Why have people who are watching today or listening today,
0:53:25 who don’t have children, close your eyes
0:53:27 and think about that one in your parents’ house.
0:53:30 The dorky one of you from 15 or 20 years ago
0:53:31 where you look like a complete and utter dickhead.
0:53:32 But it’s still there, isn’t it?
0:53:34 Yes, staring you in the face every time you walk in.
0:53:35 Why?
0:53:36 Why is it still there?
0:53:38 So I use the seven whys like a child.
0:53:39 Why, why, why, why, why, why?
0:53:42 The insight for innovation comes on the fifth or sixth way,
0:53:43 not the first or second way.
0:53:46 And all the mums talked about three moments in time
0:53:48 through which a parent and a child must cross.
0:53:49 I’ve been through all three.
0:53:50 I know where I was for all three.
0:53:54 I knew when I was the day that my son, who was about nine,
0:53:55 he had tears in his eyes.
0:53:56 He said, are you Santa Claus?
0:54:00 And what hurt was, what was behind what he said?
0:54:01 I’m not your little boy anymore, daddy.
0:54:02 I’m growing up.
0:54:04 I know where I was when my daughter was 13,
0:54:06 dropped my hand in public for the first time.
0:54:08 It’s a seminal moment between a father and a daughter.
0:54:11 And I’m sure, like me, you know exactly where you were
0:54:12 when you had to say to your eldest,
0:54:16 goodbye for the very first time in their freshman year of college.
0:54:17 And you had to turn around and walk away.
0:54:20 And so our going in hypothesis was,
0:54:21 if we build it, they will come.
0:54:22 But what we realized was,
0:54:24 despite what our data was telling us,
0:54:25 there isn’t a single mum on the planet
0:54:26 that woke up this morning saying,
0:54:29 oh, I wonder if Disneyland’s got a new attraction this year.
0:54:32 But mum wakes up every morning, as she does every day,
0:54:34 worried about how quickly her children are growing up
0:54:36 and how she wants to make special memories for them.
0:54:37 While they still believe,
0:54:38 while they still hold my hand,
0:54:39 while they’re still here.
0:54:41 That’s the segmented communication campaign.
0:54:42 Disneyland Paris,
0:54:43 while Johnny still believes.
0:54:44 Disneyland Paris,
0:54:45 while Sarah will still hold your hand.
0:54:46 Disneyland Paris,
0:54:47 where Dave is still here.
0:54:51 Drove a 21% incremental attendance to the parks
0:54:54 and turned a somewhat arrogant product-centric organization
0:54:56 to a genuinely consumer-centric organization.
0:54:58 It’s now mandatory for every Disney executive
0:55:00 to go sweep the streets of Disneyland
0:55:01 one day or two days a year.
0:55:03 and one day a year in the living room
0:55:04 of one of our consumers
0:55:06 using our intuition.
0:55:08 And that happens to this day.
0:55:09 That still happens.
0:55:09 Yeah.
0:55:10 Oh, God, yes.
0:55:11 The thing is, right,
0:55:12 when you get to my age,
0:55:13 you get down on your knees
0:55:14 to do some pin training with a small child.
0:55:15 Then you think,
0:55:17 shit, I can’t get back up again.
0:55:19 Oh, my.
0:55:24 Duncan, I…
0:55:27 Man, it’s seldom we have a podcast
0:55:29 at such a pace.
0:55:34 And this is like the real drinking out of a river.
0:55:37 I know you use the concept of river,
0:55:39 of thinking in a negative way
0:55:40 where you’re stuck in that river,
0:55:42 but this is drinking from a river
0:55:44 of creativity and innovation.
0:55:47 So I thank you for being on my podcast.
0:55:49 I’m going to look at Disneyland
0:55:51 and Disney a whole different way,
0:55:53 even more positive if that’s possible.
0:55:55 And congratulations on your book.
0:55:57 Again, Duncan’s book’s name
0:56:00 is Imagination Emporium.
0:56:02 And I cannot think of a book
0:56:04 that is designed the way this one is
0:56:06 and with the colors and the illustrations.
0:56:08 So, yeah, as you would expect
0:56:10 the book from Duncan Wardell
0:56:11 to look like,
0:56:13 it fulfills your every fantasy.
0:56:16 So thank you very much, Duncan.
0:56:16 And thank you, Madison.
0:56:18 Yes, thank you.
0:56:18 I’m going to thank
0:56:20 the Remarkable People team,
0:56:22 which is, of course, Madison Neismar,
0:56:24 producer and co-author,
0:56:26 Tessa Neismar, researcher,
0:56:28 who dug up all the dirt on you for me.
0:56:32 And there is my sound design engineers,
0:56:34 which is Shannon Hernandez and Jeff C.
0:56:36 So we are the Remarkable People team.
0:56:39 And I find it hard to believe
0:56:41 that you’re not a little bit more remarkable
0:56:43 after listening to this episode
0:56:44 and you’re going to be more creative
0:56:46 and innovative and change the world
0:56:48 and empathetic and all that good stuff.
0:56:50 And you’re going to look at turkeys
0:56:52 in a completely new way.
0:56:55 So thank you, Duncan.
0:56:56 And until next time,
0:56:58 mahalo and aloha
0:57:00 from the Remarkable People team.
0:57:07 This is Remarkable People.

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0:01:54 Welcome to Office Hours with PropG. This is the part of the show where we answer questions about business,
0:01:59 big tech, entrepreneurship, and whatever else is on your mind. If you’d like to submit a question,
0:02:04 please name my little voice recording to OfficeHours with PropGmedia.com. Question number one.
0:02:14 Hi, Prop G. This is Jake from Washington, D.C. I’m a big fan of all your podcasts. I think when it
0:02:18 comes to marketing and building businesses, you’re spot on. I also think you’ve come up with some
0:02:22 fantastic policy ideas that make sense, and I hope more moderate members of Congress reach out to you.
0:02:27 I’ve been thinking about your post-election analysis, where you discuss podcasts becoming
0:02:33 the dominant campaign medium in the next election, potentially replacing traditional door-to-door
0:02:40 outreach. This brings me to my question. How do you envision monetizing the monetization of political
0:02:45 campaigns on podcasts evolving? Are we going to be listening to you read, this ad was paid for by
0:02:50 Friends of Candidate X, as is required for all political ads? I’m curious to hear your thoughts on
0:02:56 how you think this emerging campaign medium will develop, and how would you maintain your authenticity
0:03:01 and credibility with your audience? Look forward to hearing from you, and keep up the great work.
0:03:06 Thanks for the thoughtful question, Jake from D.C. The 2024 cycle was the most expensive election in
0:03:14 American history, with political ad spending totaling over $11 billion. However, it wasn’t all disco for
0:03:20 broadcasters. This was the first election where their share of total spending fell below 50%. Since the
0:03:27 2020 election, ad spending increased over $2 billion. But traditional broadcasters only saw $100 million of this
0:03:31 growth. First off, I think it was Hearst, or one of the big family-owned media companies, was really smart.
0:03:35 About 20 years ago, they went and bought all these local TV stations in swing states, thinking,
0:03:41 okay, these are shitty businesses for about 20 months every two years. And then for four months,
0:03:45 they’re amazing businesses because they quintuple their ad rates and campaigns which think,
0:03:49 okay, old people vote. What do old people do? They want to watch the weather and see that handsome,
0:03:56 handsome young thing talking about the news. And they turn on their local news. And they can trap old people,
0:04:00 and they can run ads basically saying that, you know, the other guy is a pedophile and she’s
0:04:04 addicted to diet pills and you should vote for our guy. It’s really weird. Human condition. It’s much
0:04:08 easier for us to believe something negative about someone than something positive. So as Newt Gingrich
0:04:15 convinced his party 20 odd years ago, go negative, go early. Anyways, they bought these stations and
0:04:19 they’ve been the gift that keeps on giving. They were able to scoop them up fairly inexpensively
0:04:24 and they’re just cash machines. I think that is about to come to an end for two reasons. First reason,
0:04:29 Joe second Rogan. And that is when Trump went on Rogan, he got about 15 million downloads
0:04:37 on audio and about 40, 45 million views on YouTube. So call it 60 million. For Vice President Harris,
0:04:41 who by the way, totally fucked up and should have gotten on a plane. Joe Rogan is now more important
0:04:47 than her or was at that point to Austin and done an interview. I think Joe actually would have been
0:04:52 kind to her. He’s not about calling people out. He’s pretty good that way. As a matter of fact,
0:04:58 he doesn’t call people out enough. Oh, mRNA vaccines alter DNA. Really? Really? Oh, okay.
0:05:02 You’re not a fucking quack spreading misinformation that result in unnecessary death, disease, and
0:05:07 disability. Really? Oh, that makes sense. No, it doesn’t. Anyway, she should have done it. But for
0:05:17 for her to reach the same number of people, she would have had to go on CNN, MSNBC, and Fox every night for
0:05:24 three hours for an entire week. As a matter of fact, a woman I really respect a lot who has a, I believe
0:05:28 it’s a Sunday morning show on CNN, asked me to come on every week and do this thing like, what’s on your
0:05:35 mind? Where I talk for six to 10 minutes. And I said, I’ve done the math. No one 25 to 54 is watching CNN.
0:05:38 And for me to do the work I would need to do because I like you and I think you’re smart,
0:05:43 it’s just not worth, the juice isn’t worth the squeeze. And I would have killed to go on Anderson
0:05:49 Cooper or Michael Smirconish or Stephanie Ruhle. By the way, all three friends, all wonderful people
0:05:55 or any of these guys. I occasionally go on Chris Cuomo because I like, I only go on with my friends.
0:05:59 I know I’m name dropping right now, but it’s just not worth it. The people I’m trying to reach,
0:06:03 I’m trying to reach a young man. I’m trying to reach young people that want to develop economic
0:06:07 security. And guess what? They’re not walking. They’re not watching fucking CNN. Get this. The
0:06:14 average age, the average person watching MSNBC is a 70 year old white woman. Oh, but it makes sense for
0:06:18 politicians to go there. What do you think a 70 year old white woman has a made up her mind around who
0:06:24 she’s voting for? Having said that podcast, 34 year old male, 34 year old males, what do they vote on?
0:06:29 They don’t vote on issues or values. They vote on economics. They’re at a point in their life where
0:06:33 they’re trying to build economic security and the economic issue is more dynamic. What do I mean by
0:06:39 that? Every two or four years, it’s not entirely clear which party will become the party of economic
0:06:44 growth or become more favorable in the eyes of voters around economics. Traditionally, Republicans
0:06:48 are the business people, low taxes, but people are starting to pay attention that under Democratic
0:06:52 administrations, the last 50 years, there’s been 50 million jobs created. Under Republican
0:06:57 administrations, there’s been 1 million jobs. The markets tend to go up more during Democratic
0:07:02 tenure. So people are kind of saying, okay, whoever can sell me is going to get my vote at the age of
0:07:07 34 if they’re male. Whereas a 70 year old woman, so where is everyone going to go? I think to podcast.
0:07:12 Now, having said that, your notion is how do they monetize it or how do we monetize it? I don’t see why
0:07:16 it would be any more difficult to run a 30 second ad saying, he fucking sucks. And then having the
0:07:22 candidate go, I approve this ad. I think you’re going to start to see political ads. The reason I know
0:07:29 that this fear of influence is massively shifting, and I’m not exaggerating here. I bet 50% of the
0:07:35 candidates, mostly Democrat, but also Republicans, I’m seeing as somewhat moderate, have reached out to
0:07:40 me for quote unquote advice. When people reach out to me for advice, it’s not because they care about
0:07:45 what I think. It means they want help finding a job, they want money for their campaign, or they want to
0:07:51 come on the podcast. And I think that there’s probably a hundred senators and congresspeople
0:07:57 and governors who look in the mirror every morning and say the following, hello, Mr. President, or hello,
0:08:02 Madam President. And I’ve heard from most of them, and they claim they really are interested in my
0:08:05 advice. And they say, hey, wouldn’t it be a great idea for me to come on the pod and talk about it?
0:08:09 What’s interesting is the political candidates don’t do well on podcasts. People would much rather hear
0:08:17 from, I don’t know, Kim Kardashian, or a guy like Freed Zakaria gets unbelievable downloads.
0:08:22 Yeah, he does so well. Anthony Scaramucci does incredibly well. He’s not a political candidate,
0:08:27 but he’s a political commentator. Ian Bremmer, these geopoliticians, Josh Brown on the markets,
0:08:33 Aswad Damoner, and Kyla Scanlon, a young person on the market. These people get huge downloads. Mel
0:08:38 Robbins, I had her on, people love talking about emotions and raising their kids. When I bring
0:08:46 senators or congresspeople on, people just don’t care. It’s really interesting. But I am committed
0:08:52 to bringing more and more politicians on, specifically moderates on the left and on the right, although
0:08:58 I’m having trouble finding moderates on the right. I’m a moderate, but that wasn’t a Nazi salute. Yeah,
0:09:04 okay. Okay. What are your pronouns, he and Himmler? Anyway, I do think that if you get attention,
0:09:08 you can monetize it. And if you have attention and influence, which podcasts will have,
0:09:15 they’re going to be able to grab a disproportionate amount of that, what it’ll probably be 15 or 20
0:09:19 billion going into the next election. So if you have influence and attention, you’ll figure out a way
0:09:24 to monetize it, whether it’s ads, sponsored events, I don’t know, what have you. But we’re going
0:09:29 to see, I think we’re going to see for the first time, these local news stations start to feel some
0:09:33 of the same pressure that every other media company has felt. And then we’re going to see a massive
0:09:40 transfer of influence, attention and monetization to podcasts. In terms of conflict of interest, I read
0:09:45 ads. I don’t do crypto ads anymore because I worry it’s gambling and I worry there’s too many young men
0:09:52 staring at their phone, losing money or making money on crypto. But I have no problem advocating for
0:09:56 products. And if it’s a conflict, if I’m talking about a company, I’m an investor and I try to be
0:10:01 transparent. I’m here because I enjoy this, but I am a close second here because I want to make money.
0:10:06 And I don’t think people mind that. So what I think they mind is when they feel like you’re abusing
0:10:11 their trust and not being upfront about your intentions or your investments. So as long as
0:10:16 you’re transparent, I think that’s fine. But coming your way, I’m Joe Bob and I approve this ad.
0:10:20 Thanks for the question. Question number two.
0:10:27 Hey, Prof G. Love your show. Question for you. What advice do you have for federal workers considering
0:10:34 leaving public service? As you know, the DOGE efforts are cruel and chaotic. They’ve created a
0:10:40 stressful work environment that leaves me full of anxiety. Wondering if I’ll be the next to lose my job.
0:10:45 I joined the federal workforce as a military spouse five years ago. Prior to that, I spent my career in
0:10:52 the private sector. Despite high evaluations, leadership programs, and a graduate degree,
0:10:58 I’m still concerned I could lose my job. I live in Virginia with a high concentration of federal workers.
0:11:05 Should I jump ship before the job market is oversaturated? Should I stay put? Am I overthinking
0:11:10 this? I’d love to hear your thoughts. Anonymous for Virginia. The first is, I’m really sorry you’re
0:11:16 being, you’re stressed out. It’s sort of the unknown sometimes is more stressful than the actual known. And
0:11:22 that is a means of, I think, trying to assuage your stress. And there’s the basics, spending time with
0:11:29 loved ones, working out, meditation, breath work. I tried breath work. I tried this straw method from this
0:11:34 guy named Dan Reeves, who I love, who’s fantastic, this very soulful guy who does this 10% happier
0:11:40 podcast. Here’s the straw method. Breathe in. Two seconds. Then breathe out.
0:11:50 Four seconds. Okay. That shit does not work for me. It does not work for me. The breath work does not work.
0:11:58 I understand that you’re stressed out, but anytime there’s change or chaos, there is a silver lining, and that is
0:12:04 sometimes there’s opportunity where you don’t see it. What do I mean by that? What is happening in the federal
0:12:09 government level right now? I’m of two minds about it. The first is, to be blunt and coarse, welcome to
0:12:14 the work week. The idea that you get a random email from someone who might be laid off and have insecurity
0:12:21 and anxiety, people feel that across every business sector in America. In America. At the same time,
0:12:27 the injustice I get, but there’s tons of injustice in the private sector. The thing that I find most
0:12:33 troubling about it is not what people, most media is reporting on. It’s the incompetence. It’s laying off
0:12:37 workers who oversee our nuclear stockpile and then rehiring them thinking, oh, maybe we should,
0:12:42 in fact, look after this shit such that it doesn’t, you know, such that we can ensure that nobody,
0:12:47 the babies don’t start playing with it before it becomes less radioactive in 60,000 odd years.
0:12:52 The way they’re going about it, it just feels stupid and ineffective to me. And also the corruption,
0:12:59 firing people that happen to be investigating Musk’s business dealings, and also just the general
0:13:05 incompetence. Oh, we saved $8 billion. Well, actually, it’s $8 million that you saved. Oh,
0:13:10 we’re saving a million and a half dollars here. No, you’re not. They already spent the million and a
0:13:16 half. There’s no way to get it back. So I find the whole Keystone Cops fucking incompetence that
0:13:21 doesn’t reflect the general competence you find across most government agencies. I think I’m sort of of
0:13:27 that attitude of let them. I think it’s just so weird that the genius of the Republican Party is its
0:13:32 ability to convince people who are going to get hurt the most that this is a good idea for them. In
0:13:39 general, the reddest districts are the ones that are the biggest takers. The Department of Education
0:13:46 sends the most money per capita to these deep red states in the South. Okay, you want to eliminate the
0:13:53 Department of Education? Fine. You want to eliminate Medicare or take money out of Medicare where six in
0:14:01 10 kids in poor households in red states get the medical treatment they need? Okay, have at it. Let
0:14:06 them. You’re about to see just how incompetent you think government really is and when these cuts come
0:14:13 home to you. So I’m sort of of the attitude of, okay, you wanted it, you broke it, you own it.
0:14:21 Now, coming back to your specific situation, one, until you actually get laid off, unless it’s never
0:14:25 a bad idea to do a market check, see what’s out there, start investigating, start having coffees,
0:14:32 do interviews if you have ideas on who you want to speak to. I don’t think that’s a bad idea in any
0:14:37 situation to be kind of on a regular basis doing a market check. Having said that, I would not jump,
0:14:42 I would certainly not quit until you have another job. And also, a couple things can happen. One,
0:14:47 if you do get laid off, you’ll probably get some sort of severance. And two, when there’s change,
0:14:51 say they left 10 or 20% of the people at your organization, they’re pretty soon going to
0:14:55 realize they need people to actually run the fucking organization. And the top of the pyramid
0:15:01 will, quite frankly, get broader. And that is, you might find that you’re in a position to be
0:15:05 promoted sooner than you thought because there’s fewer people around. I’ve always told people when
0:15:09 there’s a transaction in the private sector, when their company gets acquired or there’s layoffs,
0:15:16 stick around because churn and chaos results in a lot of anxiety, oftentimes a lot of negative things,
0:15:22 but oftentimes a lot of opportunity because the company is being reconfigured and you might wake
0:15:29 up with a bigger and a better job. So in sum, find things and people that help manage your anxiety.
0:15:33 Two, it’s never a bad idea to do a bit of a market check and talk to people. And three,
0:15:39 think to yourself, what could go right? Right? We’re always about what could go wrong. Well,
0:15:44 what could go right? Maybe the organization, maybe people get laid off, maybe you’re good at what you
0:15:50 do, and maybe it ends up creating more avenues or arteries of opportunity for you. I appreciate the
0:15:55 question, Anonymous from Virginia. We have one quick break before our final question. Stay with us.
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0:18:51 you writing prompts, help with brainstorming, and can even help you strike the right tone for your
0:18:57 intended audience. And the best part, they offer enterprise-grade security and will never sell
0:19:01 your data. So you can have the peace of mind that comes from knowing that your data is completely
0:19:07 secured. We’ve used Grammarly at PropG, and as I’ve said before, it has made us more efficient and takes
0:19:12 our written work and makes it just quite frankly more competent. Get more done with Grammarly. Download
0:19:20 Grammarly for free at grammarly.com slash podcast. That’s grammarly.com slash podcasts.
0:19:28 Welcome back. Question number three.
0:19:34 Hey, Prop G, this is John Ward from Los Angeles. I took a marketing class from your company, Section,
0:19:40 a couple of years ago, and it was called Section 4 and really enjoyed it. Can you give us an update
0:19:45 on the company? Has it gone as expected? What’s working? What’s not? Have you taken more money?
0:19:51 Just really interested in that as an entrepreneurial journey and what’s going on with that company.
0:19:52 Thanks so much.
0:19:57 John from LA. Thanks for the kind words. I pride myself on being transparent. Everybody talks about
0:20:03 their wins and people don’t want to talk about their failures. Section is still got a question mark around
0:20:09 it. And that is the initial vision was find, build this all-star team of the best professors at business
0:20:15 schools and offer 80% of an amazing class. At every business school, there’s five or six ringers that
0:20:19 everybody has to take regardless of what they’re teaching because they’re so good. My thought was,
0:20:25 I’m going to aggregate all these ringers from the top 20 schools, put them online, really highly invest in
0:20:32 marketing and graphics and production quality, and give you 80% of the valuation class from Demodaran or from
0:20:41 Adam Alter’s marketing class or, God, I forget his name, this wonderful guy from Kellogg, Sarah Beckman from the
0:20:48 Haas School, and give you 80% of her course for $1,000 instead of $7,000, which is what it costs to take these courses at a
0:20:54 private university. I’m not sure if that’s true at the Haas School. Anyways, in sum, it wasn’t working. We were
0:20:58 spending a lot more money, and without the certification you get from an MBA, we had trouble
0:21:05 charging even $1,000. We got this incredible sugar high of COVID, and that is I put in, I raised a seed
0:21:13 round of $7 million. I put in, I think, $2 million of my own money, maybe $3 million, and it just took off
0:21:17 during COVID because everyone had a lot of time. And I knew that we were in a sugar high, but I didn’t realize we
0:21:22 were in like a speedballed meth cocaine high. And the company went from like $1 to $10 million overnight.
0:21:28 I went out, and I raised another $30 million. That was a mistake. I should have kept it small. I should
0:21:31 have been more judicious with the capital because once we had $30 million, we brought in a management
0:21:36 team, and they started spending money like fucking drunk sailors on shit that didn’t work. We hired
0:21:40 Malcolm Gladwell to speak to our audience for $100,000, or Adam Grant, who I love and think it’s great.
0:21:46 We paid him $100,000. They’re not worth that much money to speak to a bunch of prospective students, as good as they
0:21:52 are. So we were just wasting money. We went from 20 employees to 120. And here’s the mistake I made that I
0:21:59 continue to make in the private markets. And that is once I have access to capital, I try and grow too fast. I spend way
0:22:06 too much fucking money hire mediocre people and then end up having to lay off 60 or 80% of them. And that is what
0:22:13 happened here. As soon as we came out of COVID, revenues crashed, our burn was unsustainable, and we had to lay off
0:22:20 60, 70% of the staff. Now the company is about 25 or 30 people. We have pivoted to AI. What do I mean by that?
0:22:28 We found a lot of people and companies coming to us and say, could you upskill our media department at
0:22:34 L’Oreal on how to use different AI tools to make our department much more robust, give us this great…
0:22:39 L’Oreal has always had amazing media buying. That’s kind of, I would argue, their core confidence is
0:22:44 they’re just fantastic media buyers. And they said, how do we take the most cutting-edge tools and turn
0:22:49 every media planner or every media buyer into a warrior and make them just much better at what they do?
0:22:54 So we have pivoted section to basically AI upskilling for the enterprise.
0:23:00 And this is more my ballywick. I’ve always done B2B businesses. I’ve never done B2C.
0:23:05 I like B2B more. It’s based on individual relationships. Corporations, if you can move
0:23:09 the value or move the shareholder needle for them, are much less price sensitive
0:23:14 than consumers. I’ve just always been in B2B businesses. Anyways, we pivoted.
0:23:18 Really wonderful investors. General Catalyst is my lead,
0:23:23 and they’ve been incredibly supportive and nice and smart. And I have a good CEO, Greg
0:23:27 Shove, running the business now. We have some very talented people in the organization,
0:23:32 and it is starting to grow again. And we are now, I think, almost two-thirds subscription
0:23:37 revenue, back towards a $10 million run rate and working with very large corporations,
0:23:43 helping them, again, upskill certain departments within their organization around how to leverage these
0:23:50 new AI tools. So I’m hopeful, but the last five years have been really mediocre. I have wasted a ton
0:23:55 of time and money. Is that fair? Not wasted. Have not gotten the return I was originally hoping for.
0:24:00 I would bet, if I had to bet what’s going to happen, there’s an outside shot. It does really well. I think
0:24:04 there’s a good shot. We’re going to get our money back. Keep in mind, we’ve raised $38 million,
0:24:10 so I need to get my investors $38 million back before we start really showing any return. I’m
0:24:15 fairly confident. Is that right? I think I’m fairly confident that’ll happen. And we seem to finally
0:24:19 have found our footing. Having said that, this is kind of the story of my life in most of these
0:24:23 companies. I’ve had a couple companies where it’s just been up and to the right. But usually,
0:24:29 I start something, it does okay, then it doesn’t do okay. And the key is agility and kind of zero in
0:24:36 on something that works. And I think we have finally done that after five years and spending 25 or $30
0:24:42 million. I think we finally zeroed in on something. They’re signing up corporations and it’s actually
0:24:50 doing quite well and growing again. But this is, you know, this shit is hard. This is chestnut
0:24:55 checkers. But it’s finally, it seems to me kind of on its, found its footing again and doing
0:25:04 really well. But again, one out of seven companies succeeds. I’ve started nine. I’ve had two do really
0:25:08 well. I’ve had two or three just do okay. And I’ve had four just like flaming balls of shit hit a giant
0:25:14 wall and spray and everyone gets their face burned off. That was a little graphic. That was a little
0:25:19 graphic. Anyways, thanks for the question. I hope that satisfies your need to understand what is
0:25:28 happening at a section and it’s now called section AI. That’s all for this episode. If you’d like to
0:25:32 submit a question, please email a voice recording to officehours at propgmedia.com. Again, that’s
0:25:35 officehours at propgmedia.com.
0:25:47 This episode was produced by Jennifer Sanchez. Our intern is Dan Chalon. Drew Burroughs is our
0:25:50 technical director. Thank you for listening to the Prop G pod from the Vox Media Podcast Network.
0:25:56 We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn. And please follow
0:26:01 our Prop G Markets pod wherever you get your pods for new episodes every Monday and Thursday.

0:00:04 The fact that this movement moved faster than any of us anticipated
0:00:09 says something about the organic nature of founders wanting to build in the physical world.
0:00:13 There is no negative way to interpret American dynamism.
0:00:17 That’s about improving the state of education, of housing, of defense, of energy.
0:00:20 It’s all these things that are the cornerstones and building blocks.
0:00:24 It was shocking to Silicon Valley. It was not shocking to Washington.
0:00:27 What would happen to our supply chain?
0:00:30 What are all the shipping and logistics issues that would be created?
0:00:32 What would be the energy impact?
0:00:35 A lot of people say there’s going to be a war for space.
0:00:39 But I think it’s important people recognize there’s going to be a war in space.
0:00:43 That work has to start today. It can’t start 20 years from now. It has to start now.
0:00:48 A lot of our companies are focused on the fight of the future, not the one happening today.
0:00:53 The United States of America has embodied excellence for centuries.
0:00:59 Whether it was the Wright brothers taking flight in 1903, or the invention of the transistor in 1947.
0:01:01 How about the moon landing in 1969?
0:01:04 Or the birth of the internet in 1984?
0:01:09 All of these humanity-shaping innovations were built on American soil.
0:01:12 So, when did it become taboo to believe in America?
0:01:19 Well, three years ago, A16Z general partner Catherine Boyle wrote a thesis called Building American Dynamism.
0:01:23 Like few others at the time, Catherine’s words were unafraid.
0:01:28 She discussed America’s apathy toward progress and the country’s institutional failure.
0:01:31 But equally, that decline did not need to be our destiny.
0:01:35 In coining the term American dynamism, Catherine said,
0:02:03 So today, for the first time ever, you’ll get to hear Catherine, and her partner in crime, A16Z general partner David Ulovich,
0:02:10 discussed the origins of this thesis, which quickly led to a meme, and now is a $600 million dedicated fund.
0:02:14 So why was American dynamism controversial in the first place?
0:02:18 And what will it take to bring Washington and Silicon Valley back together?
0:02:23 Plus, how dynamic is America in today’s great power competition?
0:02:25 And where are we the furthest behind?
0:02:32 In this episode, we tie these questions together by discussing the third generation of our American Dynamism 50 list.
0:02:39 A compilation of top companies building toward the national interest, with a focus of this year’s list on the Indo-Pacific.
0:02:47 If you’d like to check out the full list of 50 companies from all over our country, head on over to A16Z.com slash 8050.
0:02:50 And of course, we’ll include a link in our show notes.
0:02:52 Okay, let’s get started.
0:03:01 As a reminder, the content here is for informational purposes only, should not be taken as legal, business, tax, or investment advice,
0:03:08 or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any A16Z fund.
0:03:14 Please note that A16Z and its affiliates may also maintain investments in the companies discussed in this podcast.
0:03:20 For more details, including a link to our investments, please see A16Z.com slash disclosures.
0:03:31 So it’s been about three years since the term, the thesis, American Dynamism, came to be.
0:03:34 Tell us more about the origins and where we’ve come since then.
0:03:41 Sandy, you and I constantly reflect on this because I am the eternal optimist, early stage investor, only see roses.
0:03:51 And if you had told me three years ago that we would be where we are today as a thesis, as a fund, as a group of founders who are building the national interest, I wouldn’t have believed you.
0:03:56 There’s just no way that anyone could have predicted how quickly this movement took hold.
0:04:02 And people inside of Andreessen Horowitz know that I have this little framework for how I describe the sort of meme magic of Andreessen Horowitz.
0:04:06 And I say we always go from thesis to meme to product.
0:04:15 And I would have assumed that sort of meme cycle of putting out something that’s a really well-thought, serious piece of, this is our thesis, this is where we’re going to focus.
0:04:22 Seeing sort of the broader community meme it and allow it to evolve with the help of founders, with the help of engineers.
0:04:24 I thought that would take 10 years.
0:04:27 I thought we’d be sitting here in 10 years saying, OK, we have a fund.
0:04:31 It’s incredible that American dynamism is something that every fund is taking seriously.
0:04:42 So the fact that we’ve done it in three and the fact that this movement moved faster than any of us anticipated says something about the organic nature of founders wanting to build in the physical world.
0:04:48 Coupled with things like the war in Ukraine, you know, we launched the thesis three weeks before Russia invaded Ukraine in 2022.
0:04:56 And so I think there were just a number of factors, the combination of the founders, the moment, the capital really saying this is something that is needed.
0:04:59 And it really resonating across the board.
0:05:03 Yeah, I think it’s happened faster than either one of us ever expected.
0:05:08 I think that all of the sort of demand polls that Catherine just mentioned were there.
0:05:09 The world needed this.
0:05:10 America needed this.
0:05:12 People needed change.
0:05:14 And they wanted people to start building for things that mattered.
0:05:17 But I think there was a supply side change as well.
0:05:21 I think all the engineers and founders were hungry for doing something that was more meaningful.
0:05:23 I think they wanted to tackle bigger problems.
0:05:25 They wanted to do things.
0:05:29 They saw things like SpaceX starting to really actually happen, like launch what’s happening.
0:05:34 And this idea that that could be made real just seemed much more tangible than ever before.
0:05:36 People watched what happened with Tesla.
0:05:40 Remember, it started with the Roadster, but then all of a sudden it became commonplace.
0:05:42 And there was a supercharging network that was created.
0:05:48 And I think people just recognize, hey, wait a minute, I don’t need to be optimizing ad clicks, which is fine if they want to do that.
0:05:53 But instead, they can really spend their time building things that they feel really, really proud about.
0:05:55 They really serve an important mission.
0:06:01 Even in some of the origins where some of the AD companies started, it was after Google bailed out of Project Maven.
0:06:05 And people in Silicon Valley were really trying to figure out what was important.
0:06:07 How do I want to spend my time?
0:06:13 And those early seeds blossomed into what now Catherine coined as the American dynamism practice.
0:06:19 So even though the practice and the fun came a little bit later, there were lots of seeds that had been planted even as early as 2018.
0:06:22 So I think you’re seeing a crescendo that had gained momentum.
0:06:26 And then I think we were able to really capitalize on that.
0:06:28 And I actually still think we’re just in the earliest innings.
0:06:29 Completely.
0:06:31 Can I just ask about that in particular?
0:06:43 The note about the fact that there was a period of time where actually many technologists were not just careful with supporting the national interest, but actually in some cases actively against it, right?
0:06:49 They weren’t able to support some of the initiatives that now, quite frankly, I think the Overton window has changed.
0:06:53 And now they’re not just willing but jumping to support those things.
0:06:55 But you mentioned memes, Catherine.
0:07:02 Like the term American dynamism, did this idea of supporting the national interest, did it need a rebranding?
0:07:09 And how effective do you think, again, something like American dynamism, which is so compelling, what role did that play, if any?
0:07:12 You said something interesting there, which was did it need a rebranding?
0:07:14 And there was no brand.
0:07:16 There was no concept.
0:07:22 The idea of building for the national interest when we said it was extremely controversial, even three years ago.
0:07:28 Like the reason why I think people were stunned was partially because of the name, because we actually said the word America.
0:07:32 For decades, it was very taboo to say you were building only for one country.
0:07:34 Tech was by its nature global.
0:07:35 You build software.
0:07:37 You want to see it go completely international.
0:07:42 Like the idea that you would say, no, actually, there are companies by law that can’t sell to other countries.
0:07:47 And we have an entire regulatory regime around how those companies are built, who they can work with, who our allies are.
0:07:49 And we need to respect that.
0:07:53 We actually need to build a practice because those companies are going to be the next phase of innovation.
0:07:56 Today, it’s seen as this is an obvious thesis.
0:07:59 But even a couple years ago, that was seen as, are you crazy?
0:08:01 Are our limited partners going to get behind that?
0:08:04 Are engineers going to want to say they’re building for the national interest?
0:08:18 The language that we used was very specific because it signified a specific type of company that is highly regulated, that builds in the physical world, that has to worry about the status of their engineers and can they get top secret clearances.
0:08:25 So I think in some ways, we named it that, one, because it exemplifies what we are doing here.
0:08:26 We didn’t name it defense tech, right?
0:08:30 We named it dynamism, which is so important to the actual thing that we are building.
0:08:33 But the fact that we said America, I do think was shocking.
0:08:34 I still think it shocks people.
0:08:39 But when you actually look at the companies and how they’re building, they’re working with the different states that they operate in.
0:08:47 They’re selling to various levels of government and they understand the seriousness of building a company like that where the language actually does matter.
0:08:53 Do you, can you comment on that from the perspective of it being controversial when it first came out?
0:08:55 And obviously, you take a firm like A16Z.
0:08:56 We do have LPs.
0:08:58 We do have other funds, even within the firm.
0:09:04 Can you just talk a little bit more about that inception period and the reaction within the industry?
0:09:09 Yeah, it’s always been funny, I think, to Catherine and I, when we think about the occasional criticisms we would hear.
0:09:13 People sometimes would say, American dynamism, like it doesn’t mean anything.
0:09:16 But obviously it means something because it’s galvanized the whole movement.
0:09:18 And they would say, it’s just this marketing thing.
0:09:21 And I would say to myself, wait a minute, what company doesn’t have marketing?
0:09:25 Like what enterprise software company is not going to have a marketing team or a marketing department?
0:09:30 Who doesn’t put together marketing materials to explain what they’re about, what they stand for, what they do?
0:09:32 Like who doesn’t want marketing?
0:09:36 Like you say it like it’s this pejorative, but it’s like, what kind of idiot would run a company without marketing?
0:09:40 If we went to a board meeting and a company said, we’re getting rid of marketing, that’s not happening.
0:09:47 And the mental gymnastics that people now go through to avoid saying American dynamism when they really, really want to say American dynamism.
0:09:55 We have competitors that go to just incredible, incredible lengths to come up with alternative phrasing to not say American dynamism.
0:09:58 Industrial revolution, resilience.
0:10:02 It’s like, okay, those are all good words, but they’re all encompassed by American dynamism.
0:10:08 And the other thing about American dynamism was just so clear early on that it’s only positive.
0:10:10 It only has a positive connotation.
0:10:13 There is no negative way to interpret American dynamism.
0:10:17 It doesn’t mean that the rest of the world has to be conquered or suffers.
0:10:19 It’s not any of those things.
0:10:24 All it says is that we want to promote American dynamism and people can hear that and say, you know what?
0:10:28 That’s about improving the state of education, of housing, of defense, of energy.
0:10:31 It’s all these things that are the cornerstones and building blocks.
0:10:34 And so there wasn’t as much criticism.
0:10:39 People just brushed it aside like any new thing or they didn’t want to acknowledge how good of an idea it was.
0:10:47 But because it was such a good idea and it really, I think, resonated with the builders and the founders, it really did galvanize this sort of overwhelming momentum.
0:10:50 Kind of like Catherine says, the meme takes hold quickly.
0:10:53 Like, good ideas do spread virally very, very fast.
0:11:01 And with our LPs, even today, there is still a little bit of an effort to convince them it’s not just about defense.
0:11:02 Defense is an important part of it.
0:11:04 But it’s not just about defense.
0:11:15 But I think now, three years in, they recognize that there’s things like public safety, which they had never really imagined as being part of American dynamism, are now increasingly important cornerstones of what we’re doing.
0:11:20 One thing I’ll add to what you just said, it was shocking to Silicon Valley.
0:11:21 It was not shocking to Washington.
0:11:24 And I think that’s also really important.
0:11:31 Like, the term American dynamism is a term that you would hear in D.C. in all sorts of contexts to refer to the innovation they care about.
0:11:34 So it was not surprising at all to Washington.
0:11:35 I actually think it was embraced immediately.
0:11:48 But that goes to show you just the gulf between how D.C. views innovation and how Silicon Valley views innovation and how, in some ways, this practice wants to push those two worlds closer together.
0:11:50 But it certainly wasn’t controversial in Washington.
0:11:53 I think when we go to D.C., it is exceptionally embraced.
0:11:57 People are so excited that Silicon Valley is building for these categories.
0:11:59 And from day one, the people in Washington got it.
0:12:05 It was more of a surprise for the people in Silicon Valley, many of whom who still had funds that were operating in China.
0:12:07 It was more of a surprise for them.
0:12:09 And now I don’t think it’s a surprise for anyone.
0:12:12 I think everyone gets the thesis and is on board with the message.
0:12:19 There were so many other terms that people would try to use before American dynamism that I think either made no sense or didn’t capture it.
0:12:24 I mean, forget about the fact that they didn’t galvanize a lot of excitement, but like deep tech, frontier tech, hard tech.
0:12:27 It was like, what does hard tech mean?
0:12:28 Lots of things are hard.
0:12:29 What does deep tech mean?
0:12:32 We never used those terms because, frankly, they just never made any sense.
0:12:35 And they also were just boring, stupid terms.
0:12:37 They weren’t galvanizing, that’s for sure.
0:12:42 Maybe one thing to clarify for folks, because I think you called it out, do you?
0:12:47 A lot of people associate American dynamism specifically with defense and maybe aerospace.
0:12:49 But there’s so much more to that story.
0:12:54 So I’d love for either one of you to just clarify, what are the other areas of American dynamism?
0:12:58 How do you view the overarching nature of supporting the national interest?
0:13:03 Anybody that thinks that they’re building in the national interest can take a really broad lens as to what that means.
0:13:04 And we welcome those people.
0:13:07 I think as Catherine will say, the tent is big and we welcome anybody into that tent.
0:13:09 It doesn’t mean we’re going to be investing in all those areas.
0:13:24 But if somebody, whether they’re working in areas of education, agriculture, manufacturing, material sciences, battery sciences, different kinds of chemistry and chemicals and things that are really critical to our national and our industrial supply chain, energy.
0:13:29 You know, the sensational thirst for energy in this country, all of these things are part of American dynamism.
0:13:31 Defense is obviously a part of it.
0:13:35 And the manufacturing base and the entire defense industrial base and supply chain that goes along with it.
0:13:37 Logistics, trucking.
0:13:42 There’s all these things that people, I think, underestimate the impact that technology can have in these categories.
0:13:47 And all these things have such a positive and beneficial impact on America.
0:13:53 Obviously, health care and education, those things are just key parts of what people think of as part of the American dream.
0:14:00 Yeah, I always say if there’s an executive department in Washington that exists to regulate or oversee an industry, that is likely American dynamism.
0:14:05 So think Department of Energy, Department of Defense, Department of State, FBI.
0:14:08 Like we see public safety as a huge component of American dynamism.
0:14:15 And it really is these categories where there’s just strong civic interest, like where Americans say, this is why we have a government.
0:14:18 These are the services that government is supposed to support us on.
0:14:22 And as D.U. said, it’s a very wide array of places that we cover.
0:14:32 But the real fundamental reason why we built a fund and a practice is because these companies sell in very different ways than all of the other companies in our portfolio.
0:14:42 And this is something that I think D.U. and I saw in the early days before we even had a practice where these one-off companies had these extraordinary business models, whether it’s something like Andrel or SpaceX or Flock Safety.
0:14:43 They’re all very different.
0:14:50 But government is like their core customer, and they have to figure out how to work with their core customer in a very bespoke way.
0:14:54 And, you know, in D.C., they have what they call federal practices, right?
0:14:57 But Silicon Valley had no concept of what does a federal practice look like.
0:14:59 You’ve never heard that word in Silicon Valley.
0:15:04 I often say D.C. got what we were doing a lot earlier than the people in Silicon Valley.
0:15:05 But now it’s just an obvious thing.
0:15:08 Of course, there’s all these companies that want to work with government.
0:15:10 They’re going to need different types of operating teams.
0:15:11 They’re going to need a different go-to-market motion.
0:15:14 They’re going to have to understand this weird term called government affairs.
0:15:18 So in some ways, it’s like these companies operate very differently.
0:15:25 So I want to pivot to talking about the American Dynamism 50 and talk about some of those companies that are building toward the national interest.
0:15:33 This is the third year of the 80-50, and every year you’ve chosen to shift its focus and talk about something specific.
0:15:35 This year, it is the Indo-Pacific.
0:15:36 Can we just start there?
0:15:39 And maybe for some folks, they hear that question, and it’s a trite one.
0:15:40 But for others, maybe it’s less obvious.
0:15:44 Can you speak to why this year’s 80-50 is focused on the Indo-Pacific?
0:15:50 I think it’s a good call out that every year we sit around and we say, what is the big story of American Dynamism for the year?
0:15:55 So last year, we really focused on the intersection of artificial intelligence and American Dynamism.
0:16:00 And I think we’ve been very focused on investing in that trend, but also we’ve seen a lot of robotics companies.
0:16:04 And this year, I think we really said, what is the commonality between our portfolio?
0:16:05 What are our companies talking about?
0:16:13 And what really, really has been the focus, not only in Washington, but also of our companies, is this sort of Indo-Pacific, but Taiwan.
0:16:15 That is the thing they are talking about.
0:16:16 That is the thing they are preparing for.
0:16:17 And we looked through our portfolio.
0:16:22 It actually came up because I was fortunate enough to go with a group in government to the border of Ukraine.
0:16:28 And one of the things when I came back, I looked at our portfolio and I said, we’ve really been investing more for the fight of the future.
0:16:33 And to use David’s term, a lot of our companies are focused on the fight of the future, not the one happening today.
0:16:46 That is something where, when we sat down and looked at our portfolio, we were overwhelmed with just how many companies are really focused on this, I would say, five to 10 year out, what could the world look like versus what’s happening on the ground today?
0:16:49 And we really wanted to highlight that in the companies that we chose this year.
0:17:01 The other thing that has shifted us toward what is happening in Taiwan and what could be the ramifications for the United States and her allies, we have a company that makes drones.
0:17:03 It’s an American-made drone manufacturer.
0:17:08 Most of their parts and components come from the United States, but they have a battery that comes from China.
0:17:16 And they sold some drones to an organization in Taiwan and they got sanctioned by China and they were no longer allowed to buy batteries from China.
0:17:21 And obviously that company figures out some alternative path to get batteries from another country.
0:17:25 And that’s okay, although it’s difficult because a lot of batteries are manufactured in China.
0:17:44 But that moment really, for me, said, hey, wait a minute, this isn’t just about getting ready for the next kinetic fight with a near peer or exact peer adversary, but it’s really about understanding what are all the different components and things that would be affected if we actually got into a major conflict in the Indo-Pacific region?
0:17:46 What would happen to our supply chain?
0:17:54 What do we get, whether it’s motors, actuators, components that we need for all the things that go into our manufacturing base, our defense industrial base?
0:17:57 What are all the shipping and logistics issues that would be created?
0:18:07 What would be the energy impact if we lost our ability to trade and bring in goods from the entire region, not just from China, but from elsewhere, from Vietnam, from the Philippines?
0:18:12 What are all the things that would change if we actually got into a kinetic fight in the Indo-Pacific region?
0:18:21 Do the old platform carrier groups work where we can bring a flotilla around an aircraft carrier of destroyers and have a week to get ready for a fight?
0:18:24 Or do we need a thousand drones that are autonomous in a swarm?
0:18:29 Do we need to rethink the way submersibles work and the way that unmanned surface vessels work?
0:18:38 And so I think when we saw a little taste of this in the Ukraine, this is the moment in time to start asking those questions and say, what are the companies that are going to matter if we get into a real conflict?
0:18:42 Which hopefully we never do, but if we do, what are the things that are going to matter most?
0:18:43 This is just the beginning.
0:18:52 I think you’ll expect us to spend more time thinking about the fight of the future, but not just from a kinetic lens, from an actual armed conflicts lens.
0:18:57 But what does it really mean if our supply chain lines got disrupted and we got a taste of this during COVID?
0:19:00 But what happens when it really freezes and really paralyzes?
0:19:01 How does America respond?
0:19:02 How do we get ready?
0:19:04 And what are the opportunities for our companies?
0:19:07 Yeah, what does it mean to be really prepared?
0:19:12 And at the outset of the 8050, you actually paint this scenario, which to your point, hopefully this never happens.
0:19:14 But you say this is not an abstract risk.
0:19:22 The PRC is engaged in the largest peacetime military buildup since World War II with an industrial advantage in warships, drones and other weapons of war.
0:19:31 It has spent years pressuring the U.S. and its allies, attacking civilian vessels, cutting undersea cables, and engaging in simulated war games just miles from Taiwan’s shores.
0:19:34 It is an expansionist power preparing for war.
0:19:37 So if this is true, how do we prepare?
0:19:39 And also maybe how prepared are we today?
0:19:41 It’s not abstract.
0:19:43 As D.U. mentioned, our companies are getting sanctioned.
0:19:49 It is in some ways surreal to work with great founders that are finding out that they’re sanctioned by China.
0:19:58 And so it is a very real risk, but I think the thing that in some ways should be hopeful for us is that this is why the American dynamism practice exists.
0:20:01 Five years ago, people didn’t see that this was an actual reality.
0:20:06 We now have a generation of founders who have started building and are meeting the demands.
0:20:15 The 8050 list, which I encourage everyone to read because I think it answers your question very deeply, is what are all of these companies across different sectors doing and how are they going to help prepare?
0:20:26 But I think what we hope people take away from this list is there’s a lot of sometimes hysteria about, okay, it’s terrifying that we’re not more prepared or it’s terrifying that this could potentially happen.
0:20:34 And here are 50 companies that have been working on this, putting their head down, building in the physical world, doing the hard thing day in, day out, recruiting talent to this mission.
0:20:37 And we should be celebrating that they were early and right.
0:20:39 So let’s jump in there.
0:20:44 What are the categories that you would maybe break down as really critical to us being prepared?
0:20:47 And then maybe let’s talk about some of those companies in each of the categories.
0:20:57 I think our view that’s shared by, I think, many people in the government that having just overwhelming capabilities is the best deterrence and is the best defense.
0:21:02 And that means making sure from a kinetic capability, do we have the most advanced missiles?
0:21:04 Do we have hypersonic capabilities?
0:21:07 Do we have the most advanced electronic warfare capabilities?
0:21:11 Can we navigate in contested communications environments?
0:21:14 Do we have total space domain awareness?
0:21:16 Do we have complete superiority in the space domain?
0:21:23 I think people kind of laughed a little bit in Trump’s first term when he created the Space Force, you know, and they had the Star Trek uniforms.
0:21:27 But people don’t understand, like, you know, that wasn’t early.
0:21:28 Maybe it was on time.
0:21:29 If anything, it was late.
0:21:34 That the space domain is one of the most important domains as we think about the fight of the future and what that looks like.
0:21:44 I think cybersecurity, not just cybersecurity for enterprises and for individuals, but cybersecurity for our entire industrial sort of manufacturing base.
0:21:54 All these machines and systems and industrial control systems we have, the water treatment plants, the electrical grid, the utility, like cybersecurity for that entire domain is critically important.
0:22:04 We’ve now connected all these things, whether it’s on warships and the naval fleet, whether it’s in the Air Force and in the air, or if it’s just like how we actually live our lives in the United States.
0:22:09 We have all these things now that are internet-connected, internet-controlled, internet-monitored.
0:22:22 So there’s a lot more cybersecurity companies today that are completely focused on an entirely new threat surface around the defense industrial base that needs to be protected, the utility and energy grid in the United States.
0:22:29 And then the other thing is we need to be able to generate and transmit, move energy very rapidly and at massive scale.
0:22:38 And so there’s a lot of energy projects that I think are critically important to just having robust and reliable defense in the United States and abroad, wherever we need to bring the fight.
0:22:53 To your point about the fact that we can even call out 50 companies each year building towards these spaces versus maybe the perception that the everyday American has, which is that there’s like a few primes and that’s it.
0:22:55 I think that’s important to highlight, right?
0:23:04 Yeah, not only was it not hard to find 50 companies, there’s way more companies.
0:23:06 We can’t possibly include them all.
0:23:15 We actually could have made the AD 250, but we just try to draw the line somewhere so that we think it’s a great list, but it is not the exhaustive canonical list.
0:23:17 Catherine, do you want to talk about some of the defense companies?
0:23:20 Yeah, so defense, but I also like to call out production.
0:23:24 These companies are a little different when people think of, as you said, the primes.
0:23:30 What the primes are really, really falling behind on is how quickly and cheaply they can produce what’s known as attributable systems.
0:23:37 Instead of creating battleships and aircraft carriers, can you create small modular products, ASVs, autonomous surface vessels?
0:23:39 Can you build the satellite bus very quickly?
0:23:43 It used to be that if you wanted to put something in space, it would take you three to five years.
0:23:45 Now it can take you less than three months.
0:23:53 So in some ways, I think the common theme among all of our defense companies is focus on modularity, focus on attributable systems, and focus on production.
0:24:00 So, you know, everyone is familiar with the great work that Anderl is doing across a number of programs that are going to be very important for the region.
0:24:09 We’re also investors in Sironic, which is focused on maritime and attributable autonomous surface vessels that they’ve built in various sizes that have been very important to the U.S. Navy.
0:24:17 We’re investors in APEX, which is similarly building small modular buses that can be sent to low-Earth orbit for various different types of payloads.
0:24:21 I like what David said about, like, space domain awareness is important.
0:24:24 It’s because a lot of people say there’s going to be a war for space.
0:24:32 But I think it’s important people recognize there’s going to be a war in space, that when you have that much critical infrastructure in low-Earth orbit, it will become a target.
0:24:41 And so you have to be able to send up buses as quickly as possible with different types of payloads that can do monitoring, that can potentially take both offensive and defensive actions.
0:24:47 And companies that are doing that and building these attributable systems for space will be even more important in the future.
0:24:52 So high-volume production and really focus on the attributable nature of a lot of these systems.
0:24:58 It’s encouraging for sure to see the 50 and, as you said, the many hundreds of companies building this space.
0:25:04 But I’d love to probe you on the question of, if we’re realistic, where are we furthest behind?
0:25:08 And maybe another way to pose that question is, where would you like to see more founders working?
0:25:10 Where would you like to see more investment going?
0:25:14 Where would you say that there’s a big enough gap that we need to fill?
0:25:15 It’s a good question.
0:25:26 I think we’ve always shied away from giving the request for startups ideas to people because we just think that the best founders come up with the best ideas and open our eyes to a huge gap or a huge opportunity.
0:25:33 That said, we are at this really interesting technology moment where manufacturing is being reassured.
0:25:44 AI is going to have just a tremendous impact on the way we think of technology, whether they’re kinetic systems, whether they’re targeting and guidance systems, whether they’re autonomy systems.
0:25:51 You’re going to see robotics play just a massive role in manufacturing and driving rapid-scale manufacturing.
0:25:58 I think Elon made a comment once because he’s working on a sort of a humanoid robot where he thinks there might be three robots for every human on Earth.
0:26:03 So I think that would put us somewhere between 22 and 30 billion robots.
0:26:04 Let’s say he’s just off by half.
0:26:10 Let’s just say he’s wrong by a factor of two, which I don’t know, but that still will be 15 billion robots.
0:26:11 That’s a lot of robots.
0:26:14 All those robots are going to need software, computer vision capabilities.
0:26:19 They’re going to need motors and actuators and all kinds of other components that need to be made.
0:26:24 And if we are in a fight in the Indo-Pacific region, we’re not going to get those motors and actuators from China.
0:26:28 Shenzhen is like the capital of that kind of component.
0:26:33 And so we need to have a really, really robust industrial supply chain to get those things.
0:26:38 Recently, I was with some government officials from Europe, and they were asking, like, what can Europe do?
0:26:39 Europe, there’s no growth.
0:26:40 There’s all these issues in Europe.
0:26:43 And I said, look, Europe has a huge opportunity.
0:26:50 And there’s countries like Germany that have always been leaders, whether it’s in chemicals manufacturing, industrial manufacturing, automotive manufacturing.
0:26:57 They have a real opportunity to be the center of the universe for the next industrial age that’s robotic driven and AI driven.
0:26:59 I think the United States has that same opportunity.
0:27:02 I think our neighbors to the north and south have similar opportunities.
0:27:09 I think there’s opportunity everywhere, but people need to figure out what are the veins that they want to mine and really go after.
0:27:17 Sometimes if we really talk about all the areas of opportunity, it can make you quite cynical or despondent or think that we’re totally screwed because everything is terrible.
0:27:18 Everything is wrong.
0:27:21 We’re so dependent on China from a supply chain standpoint.
0:27:24 And yet we know that this is actually what America does her best.
0:27:27 This is when people really get resourceful.
0:27:29 They find ways to solve problems and build new companies.
0:27:32 And I think we’re starting to see the beginnings of that now.
0:27:35 And I think we’re going to see a lot more of that going forward.
0:27:38 One area I’ll highlight is the manufacturing area.
0:27:48 And I think what should make people hopeful is a couple of years ago, there was a view in Silicon Valley that if you wanted to build anything to do with manufacturing, you needed to manufacture the product and you had to be a prime.
0:27:53 And that actually was seen as somewhat adversarial to the traditional companies in Washington.
0:27:56 And of course, that had to be the way that you would do it 10 years ago.
0:27:58 Startups weren’t working with these companies.
0:28:00 And so Anderil had to pioneer that we are going to be a new prime.
0:28:05 We have a number of companies in our portfolio that are manufacturing aerospace and defense parts.
0:28:08 This is in the case of Hadrian, where the factory is the actual product.
0:28:11 They are building factories that are going to support the existing defense industrial base.
0:28:19 We’re also investors in Senra, companies that are building wire harnesses, the things that actually go into these products that are very important for defense.
0:28:22 And they can sell to both primes and new space and new defense.
0:28:35 And so I think that’s what’s also exciting as you’re seeing the focus on not just building the products and vertically integrating, which Silicon Valley is very good at, but you’re also seeing these companies form that really want to be the backbone of the new defense industrial base.
0:28:38 And they have figured out new ways to manufacture faster.
0:28:39 They bring in software.
0:28:42 So for people who are really looking at, okay, what can we do in manufacturing?
0:28:43 How can we reassure?
0:28:50 You have these companies that are really, I would say, doing a lot of R&D on this automation that you can bring to the factory floor.
0:28:52 And that should be very exciting for people.
0:29:04 There’s also kind of a vibe shift in Washington where, you know, companies that work in the manufacturing and industrial spaces or the chemical spaces, there’s a lot of places in this country where it’s very hard to open up a new factory, to start a new factory.
0:29:13 There’s all kinds of regulatories and restrictions and things that make it difficult to do the hard work that is required to build some of these kinds of facilities.
0:29:19 You know, these are not just rocket fuel facilities, but even just basic industrial facilities and manufacturing facilities.
0:29:30 And there’s an appetite and, I think, an awareness in Washington, and it’s even quite a bipartisan thing, to recognize, look, we’ve got to make it easier to allow founders and companies to build these kinds of facilities.
0:29:41 We have to not allow too much red tape to get in the way of us opening up the new kinds of, whether they’re shipyards or manufacturing facilities, that are desperately needed because that work has to start today.
0:29:43 It can’t start 20 years from now.
0:29:44 It has to start now.
0:29:46 And I think that that has been a major shift in Washington.
0:29:47 Completely.
0:29:49 And maybe we can just touch on that directly.
0:29:55 It sounded like you try to stay away from a wish list in terms of what you want founders to build because there’s just so much opportunity.
0:30:02 Maybe the same question going for the kind of regulatory action that you might like to see in Washington.
0:30:16 Are there specific actions from the policy perspective that you would like to see that would take these 50 companies and many more and allow them to thrive and ignite the kind of innovation and bring in the kind of founders that you know exist in technology and otherwise.
0:30:21 Is there a wish list, especially now that we have a new administration?
0:30:24 I think there’s a very long wish list.
0:30:28 But some of the basic ones are just like, look, there’s lots of opportunities that the government wants solved.
0:30:34 They just need to commit that, look, if someone’s going to go after these problems, they’re going to pick a winner and guarantee an outcome.
0:30:40 We will happily fund the R&D efforts of our companies when they don’t have to say that we will guarantee it’ll be this company.
0:30:40 That’s okay.
0:30:41 We can take that risk.
0:30:43 We think we can go find the best companies.
0:30:51 But they sometimes need to say, look, if you go build a hypersonic missile at this price point, we will guarantee that we will buy a billion dollars worth of them.
0:30:57 We will provide the greased wheels to enable facilities and manufacturing and factories to be built and created.
0:31:05 I think the government can really be a partner and the regulators can really be enablers and not people that are putting up roadblocks and red tape.
0:31:12 The regulators can really say, hey, look, these are the priorities and the projects that matter to the United States over the next 5, 10, 15, 20 years.
0:31:21 And if you build them, we will commit to supporting them and buying them and that we’ll have a process that favors the best product and the best companies and not just the legacy incumbents.
0:31:23 I 100% agree with that.
0:31:28 And D, you and I have now been going to Washington for a decade, right, saying the same thing over and over and over again.
0:31:30 You don’t have to have procurement reform.
0:31:31 We’re not Pollyannish.
0:31:33 We don’t think there needs to be a big thing.
0:31:38 You already have the mechanisms to be able to award contracts to the companies that are producing the best products.
0:31:39 You just need to use them.
0:31:43 And I think I’m more convinced that there is a cultural problem inside the DoD.
0:31:55 And the thing that I’m most hopeful about is that you’re finally seeing people across the DoD, but particularly in Secretary Hegs’ confirmation hearing, he explicitly said we need new technologies to be in the hands of the warfighter.
0:32:06 And hearing it at the highest level during a confirmation hearing that that’s going to be one of his priorities, that makes me think that there is going to be a strong cultural change and that it’s not just going to be lip service anymore.
0:32:09 Like, we need to actually use the authorities we have.
0:32:21 To be able to give the best companies contracts, to make them compete against each other, to use the beautiful system of capitalism that works in every other industry aside from defense, right, and actually have these companies compete.
0:32:22 Best product wins.
0:32:26 We buy a bunch of them, and that company is the one that’s going to continue serving a contract.
0:32:29 And we have not had that for decades.
0:32:31 And that is why the budget has ballooned.
0:32:42 I think now that you have Doge, other initiatives, and particularly an administration that is focused on saving the taxpayer money, they’re going to find that these companies are actually, that is their goal.
0:32:49 To save the taxpayer money, to produce the best products, the cheapest, the fastest, and to make sure they get into the hands of the warfighter when needed.
0:32:52 Catherine, you mentioned this gulf between San Francisco and Washington.
0:33:03 And as you’re speaking, I’m reflecting on the fact that so many technologists perhaps do gravitate towards the consumer sphere because there are clear rules to the game.
0:33:06 There are clear things that if they compete, if they do the best, they win.
0:33:15 And as you’re talking about some of that reform, I also wonder what else we can do to incentivize technologists to participate in this space.
0:33:21 Even within the AD50, we’ve mentioned Anderil and Palmer Luckey, previously from Oculus.
0:33:23 We see a few other founders on the list.
0:33:26 Robinhood co-founder Bai Zhu Bhatt now creating Aetherflux.
0:33:32 What else can we do here to get those kind of individuals participating in this road towards American dynamism?
0:33:36 Honestly, I think there are so many people who want to build for this category.
0:33:43 It is incredible to see people like Bai Zhu say, hey, I built a massive, important company called Robinhood, and now I’m going to do something even harder.
0:33:47 Like, it is incredible to see that level of talent wanting to come into the sector.
0:33:49 So I don’t think we have a talent problem.
0:33:51 I don’t think we have a recruiting problem.
0:33:57 I think if the government says, hey, we need X, Y, and Z, X, Y, and Z will be built faster than they can possibly imagine.
0:34:01 The biggest problem is we need to procure the things that are built, the best products.
0:34:03 And we need to be ruthless about what is the best.
0:34:10 Not whatever company I’ve known for 50 years is the person I’m going to give the contract to, which is how Washington used to do business.
0:34:15 And I think we are at this moment where enough people have realized that is not the best way to do business.
0:34:21 We need to give it to the best companies, and we need to be ruthless about the competition and make sure that the best companies are being awarded contracts.
0:34:22 So I’m hopeful.
0:34:23 Ten years in, I’m hopeful.
0:34:24 I’m hopeful.
0:34:24 This is the moment.
0:34:30 Again, it’s always roses to me, so maybe I’ll be wrong on this, but I am very hopeful that we’re finally going to see that.
0:34:32 Let’s also talk about geography.
0:34:37 So something that I thought was interesting from this list is that we had 15 cities on it.
0:34:44 The three cities that dominated were L.A., San Francisco, and D.C. at 17, 13, and four companies, respectively.
0:34:51 Perhaps to some folks, you know, they hear us talking about D.C. and Silicon Valley, so perhaps those two cities are no surprise.
0:34:56 But for those who maybe aren’t familiar with the gundo, for example, why L.A.?
0:35:07 Why has that become such a welcoming place for American dynamism companies or anything you’d call out there about how, not just at the federal level, but the regional level, can play a role in really fostering that kind of engagement?
0:35:16 Southern California and Los Angeles in particular have always been huge epicenters of both innovation, the defense industrial base.
0:35:17 It’s been the home to JPL.
0:35:20 NASA’s had a major presence there.
0:35:25 And so there’s always been a bunch of aerospace, engineering, history, and just legacy there.
0:35:32 And then Elon put SpaceX in El Segundo, which means all the talent that he started to aggregate came to that area.
0:35:36 And so I think that’s one of the reasons why L.A. tops the charts, and El Segundo in particular.
0:35:39 And then Southern California, Camp Pendleton is based there.
0:35:42 You know, Naval Air Station Miramar is there.
0:35:47 San Diego has a major military presence across the Marines and the Navy.
0:35:49 I think the Blue Angels are still based in San Diego.
0:35:55 And so there’s just been a huge ecosystem down there, which makes it a great place to build.
0:35:59 The other thing I would say is you need to know what an incredibly high bar for talent looks like.
0:36:05 So if you worked at an Android or a SpaceX or a Palantir, you know what startup success looks like.
0:36:14 You’ve been in a company where you get to work with the smartest people, working the longest hours, shipping the fastest, delivering just exceptional outcomes and exceptional results.
0:36:18 But now a lot of those founders, they don’t have to be in Silicon Valley.
0:36:20 And we’re just finding more and more of those founders.
0:36:22 Take Garrett from Fox Safety.
0:36:24 He’s based in Atlanta.
0:36:29 He did Y Combinator almost a decade ago, but he’s now based and built the company in Atlanta.
0:36:31 And we’re seeing more and more founders like that.
0:36:34 In fact, Catherine mentioned Apex Space.
0:36:39 Ian Cinnamon has spent time in Silicon Valley, but is now building Apex Space in the L.A. area.
0:36:41 And he’s doing that because the customers are there.
0:36:43 There’s a whole ecosystem developing there.
0:36:48 And so the flywheel to build a real startup ecosystem is really happening there where there’s talent.
0:36:50 There’s other startups and companies there.
0:36:51 There’s customers there.
0:36:53 There’s the ability to do manufacturing there.
0:36:56 There’s much more of an industrial ecosystem down there.
0:36:59 And so they’re right in the epicenter of where it’s all happening.
0:37:02 If I can make a prediction, I actually think we shouldn’t sleep on Texas.
0:37:07 Austin is really becoming a really interesting production and manufacturing hub.
0:37:12 I think part of the reason for that is because of Elon and moving so many of the facilities for both Tesla to Austin.
0:37:15 That has really changed the game in terms of the talent that’s there.
0:37:20 But if we’re going to make predictions about 10 years from now, I think Austin will definitely be a manufacturing hub.
0:37:22 And Texas in general will be a good place to build.
0:37:23 Yeah.
0:37:32 What is there to say about how these different cities, instead of being hostile, as we have seen some jurisdictions be to whether it’s defense or technology overall,
0:37:38 how should cities be thinking about welcoming these different companies?
0:37:42 An example, obviously, is Anderil is building Arsenal One in Columbus, Ohio.
0:37:47 We also saw all kinds of cities, as I mentioned, on the 8050, whether it’s Cleveland or Denver.
0:37:48 You mentioned Austin.
0:37:50 We also saw Houston, Santa Barbara, right?
0:37:54 It’s very cool to see the distribution of these companies.
0:38:00 And so, I guess, coming back to the question, how would you advise, whether it’s a city council, whether it’s someone at the state level,
0:38:08 about thinking about how to bring in these companies and, again, not be hostile and instead figure out how to bring in this really valuable talent?
0:38:12 Well, there’s sort of classical incentive packages that I think cities are well-equipped.
0:38:19 You know, it’s like they want to bring in these jobs, so they’ll compete against each other and they’ll think about things like tax incentives and different opportunities like that.
0:38:27 But I think sometimes cities overlook just the importance of having a ton of space and removing the red tape for these companies to be able to operate,
0:38:31 companies be able to do the sort of experimentation and development and production they need.
0:38:40 So, I think in many ways, there’s not like a one-size-fits-all, but I would very much encourage all of the cities to meet with these companies, to meet with them early,
0:38:44 and then say, what is the big thing that would change your mind about coming here?
0:38:45 What is the thing that you are looking for?
0:38:49 And really tailor and craft packages to bring these companies to their cities.
0:38:56 I mean, what’s great is we’re seeing early-stage companies have these bake-offs for their next facility or their next city that they’re going to be building in.
0:38:58 And cities are really good at that.
0:39:01 Like, they know that these jobs are important and these are high-value jobs.
0:39:07 So, you don’t have to be the size of an anduril, and you don’t have to have that size of facility to really get a city excited.
0:39:08 But I don’t think it’s one-size-fits-all.
0:39:15 Every company has different needs, so it really is taking the time to get to know these companies and figure out how you can be most helpful to them.
0:39:23 As we close out, I’d love to hear both of your perspectives on just what you’re most excited about, where the ball is moving in 2025.
0:39:31 I mean, I’m most excited about just the pace of change and the pace of innovation, both on the government side and in our world.
0:39:35 Every day feels like it’s just so much change.
0:39:41 It feels like we’re in this accelerated timeline across all things, not just innovation, but culture, politics.
0:39:43 Everything is accelerated and everything is heightened.
0:39:45 And to me, that is the perfect time to start building.
0:39:47 You want to catch that wave.
0:39:48 You want to be part of something like that.
0:39:49 You want to live in that timeline.
0:39:54 And so, I’m just enthused because I think we’re going to see companies we never thought possible.
0:39:57 I think we’re going to see extraordinary founders say, I want to build in this space.
0:39:59 And I’m just excited to work with them.
0:40:03 And I think that what we thought might take, again, five, ten years is going to take two.
0:40:05 And we’re already seeing that in our own portfolio.
0:40:10 And so, if you’re on the fence about starting an American dynamism company today, I would say do it.
0:40:16 Because two years from now, I think the acceleration and the pace that you will see in this category will be nothing short of extraordinary.
0:40:18 I’m always excited about the future.
0:40:23 But I think that people just wildly underestimate the impact that AI is going to have.
0:40:26 We have a nuclear power company, Radiant Nuclear.
0:40:30 And so, Radiant Nuclear is obviously, they have to go through a regulatory process.
0:40:32 It is very paperwork heavy.
0:40:43 And there are now multiple startups that are just using AI to better facilitate the regulatory process to help you understand where are you going through these different checklists and requirements for regulatory approval.
0:40:47 We have a company we’ve looked at that helps facilitate foreign military sales.
0:40:59 But using AI to navigate this massive, complex regulatory environment where you have to deal with classified information, who has access to classified information, dealing with who gets the information, how do you facilitate these foreign military sales.
0:41:05 Things that are critical to the defense industrial base, but that are really being enabled and unlocked and accelerated by AI.
0:41:18 I think people still wildly underestimate the positive impact that AI is going to have across every industry, from defense to healthcare to manufacturing to transportation, logistics, energy, you name it.
0:41:22 And I think for the first time, Washington is like, okay, we know we need to change.
0:41:31 We want to make sure that America just has unrivaled superiority and is the greatest place on earth for people to live, where people want to build their businesses, build their lives.
0:41:34 And I think we underestimate how fast some of this is going to happen.
0:41:34 Yeah.
0:41:40 The vibe shift has been very real and it’s been amazing to see how quickly it’s changed your point to you around AI.
0:41:43 We’ll have to direct folks to last year’s AD50.
0:41:51 I know a lot has changed since then in AI, but that gives folks a glimpse of all the ways that AI is impacting all the categories within American dynamism.
0:41:55 So we’ll make sure to link to that and also this year’s Indo-Pacific AD50.
0:42:00 Thank you both so much for joining this podcast, but then also for all your building in American dynamism.
0:42:01 Thank you.
0:42:02 Thanks so much, Seth.
0:42:10 Alright, if you did make it this far, don’t forget to go check out our full American dynamism 50 list.
0:42:16 Compilation of the top companies building toward the national interest with this year’s focus on the Indo-Pacific.
0:42:23 Go check out the full list, which covers companies from all over the country at A6CZ.com slash AD50.
0:42:28 You can also click the link in our show notes, including links to our prior two years of the AD50.
0:42:30 Alright, we’ll see you next time.
0:42:30 I’ll see you next time.

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0:01:51 Welcome to Raging Moderates.
0:01:52 I’m Scott Galloway.
0:01:53 And I’m Jessica Darla.
0:01:54 Jess, how are you?
0:01:54 I’m great.
0:01:55 How are you?
0:01:56 I’m good.
0:01:59 I’m in the great state of Texas at South by Southwest.
0:02:00 I’ve been seeing on social.
0:02:01 You’re all over.
0:02:02 Really?
0:02:03 Oh, your own social.
0:02:04 Your team’s doing a great job.
0:02:06 I’m all over.
0:02:07 I just love me.
0:02:14 I did a big, when I went on stage yesterday for Pivot, I danced around with my belly hanging out, screaming.
0:02:15 That was a big hit.
0:02:15 Yeah?
0:02:16 That was a big hit.
0:02:20 Yeah, no, mockery is always, the algorithms love mockery.
0:02:20 It’s true.
0:02:22 The algorithms are pretty mean.
0:02:26 And they were mean, actually, even before Elon Musk, but meaner now.
0:02:27 And what have you been up to?
0:02:29 How’s your, or how was your weekend, I should say?
0:02:30 Oh, it was great.
0:02:30 It was my birthday.
0:02:34 Yesterday, I was in Jamaica, sans children.
0:02:36 So we finally got away.
0:02:37 And it was fabulous.
0:02:41 I had, my husband loves Jamaica, always has.
0:02:43 I have never, had never been.
0:02:44 And he loves Jamaica?
0:02:46 He’s obsessed with Jamaica, him and his friends.
0:02:50 Yeah, it’s, it’s a pretty amazing place.
0:02:54 But we went to Goldeneye, Ian Fleming’s old house.
0:02:56 And now Chris Blackwell, who started Island Records, owns it.
0:02:57 I’ve heard it’s great.
0:02:59 Oh, it’s fantastic.
0:03:01 And it feels completely empty.
0:03:04 Like, we were wondering the whole time if there were other people around.
0:03:07 And there was a happy hour, which saw like 20 people at.
0:03:09 And that was the max the whole time.
0:03:11 So it was very cool and secluded.
0:03:14 And my best friend has the same birthday as me.
0:03:17 We met in preschool and she came with her husband.
0:03:18 They live in Florida now.
0:03:19 So it was cool.
0:03:22 And you’re, you’re 37, 38?
0:03:23 No, the big four ones.
0:03:26 So seven years until my midlife crisis, according to you, right?
0:03:31 Where I started traveling only with my girlfriends and dancing with my belly out.
0:03:35 But the good news is, is that for men, 50 is the new 30.
0:03:36 And for women, 40 is the new 80.
0:03:38 I haven’t heard that one before.
0:03:38 That’s good.
0:03:39 It’s not really.
0:03:40 It’s upsetting.
0:03:41 But thank you.
0:03:42 That’s good.
0:03:44 Yeah, that’s, that’s, there’s a term for that.
0:03:44 New York.
0:03:45 All right, enough of that.
0:03:46 Let’s get into it.
0:03:51 President Trump sent financial markets into a tailspin last week.
0:03:54 Today, we’re going to talk about Trump backtracking on tariffs.
0:03:59 Representative Al Green getting censored for protesting Trump’s trying to address what Governor
0:04:01 Newsom really thinks about trans rights.
0:04:05 And James Carville’s surprising advice to Democrats, do nothing.
0:04:12 So markets kind of very volatile this week or last week with this ever-changing trade policy.
0:04:17 On Thursday, he delayed tariffs on goods from Canada and Mexico, giving industries a brief
0:04:22 bit of relief, but on Friday, he was back on offense, threatening new tariffs on Canadian
0:04:27 lumber and dairy, claiming Canada has been ripping us off for years.
0:04:32 The back and forth has left businesses scrambling and critics warning of economic fallout.
0:04:37 Jess, how did these sudden shifts in trade policy impact businesses and global markets?
0:04:38 Really badly.
0:04:44 And the strangest part to me has been how little he seems to care.
0:04:48 Because he was totally, like, live by the market, die by the market.
0:04:51 And he’s taking a very laissez-faire attitude towards it.
0:04:53 He was interviewed by Maria Bartiromo.
0:04:58 And she was asking him about this because, you know, business anchors, no matter their
0:05:03 partisan affiliations, have been freaking out over the last week with the Canada and Mexico
0:05:05 25 percent threat.
0:05:10 And he went with the, like, there could be a little bit of pain or, you know, maybe we’ll
0:05:13 see a recession and kind of shrugged it off.
0:05:17 And Howard Lutnik is out there, you know, doing his best dancing around it.
0:05:18 Like, we’re all going to be fine.
0:05:19 And Scott Besson, we’re all going to be fine.
0:05:27 And Trump seems oddly comfortable to me with whatever the fate of the market or the American
0:05:31 economy is going to be as a result of these policies that he hasn’t done a particularly
0:05:33 good job in defending.
0:05:39 And I’ve been thinking a lot about the difference between the first Trump term and the second
0:05:44 Trump term and how the chaos of this term is actually what we thought would happen the
0:05:45 first time.
0:05:49 But it was remarkably calm on a comparative basis.
0:05:54 And how central to that calmness Steve Mnuchin actually was.
0:05:57 And I thought, like, oh, is this something that people are thinking about?
0:05:59 So I started keyword searching for Mnuchin.
0:06:05 And I see that there are a lot of people who are talking about what a good Treasury Secretary
0:06:08 he actually was and that he managed to stay under the frame.
0:06:13 And he had a few incredible photo ops and things like that with his wife holding all the money,
0:06:13 et cetera.
0:06:16 But that he was really an even hand.
0:06:22 And there was someone who pointed out how Trump 1.0 put two of the best financial bureaucrats
0:06:24 in power, Jerome Powell and Steve Mnuchin.
0:06:27 And then Trump 2.0 hired knuckle dragging cultists.
0:06:30 And I thought that summed it up pretty well.
0:06:33 Yeah, it’s really it’s almost getting a little bit comical.
0:06:38 I think a key to these negotiations is it’s really difficult to even understand what he wants.
0:06:41 When I think about he says, OK, Canada has been ripping us off.
0:06:44 It’s it’s hard to exactly discern what it means.
0:06:48 And then he’ll go to, well, they need to stop shipping fentanyl across the border.
0:06:50 And that might might be true of Canada.
0:06:50 It’s not.
0:06:55 It might be true, excuse me, of Mexico and China, or you could at least make a philosophical
0:06:55 argument.
0:06:58 The amount of fentanyl that’s coming across the Canadian border, I think, could fit in a
0:06:59 backpack.
0:07:01 It’s less than one percent of the fentanyl that comes into the nation.
0:07:07 And in addition, we’re now at a point where I don’t even know if the tariffs are on or off
0:07:12 based on what hour it is, where people are going to start clearing the shelves or developing
0:07:17 alternative supply chains and alternative alliances, regardless of whether he takes the tariffs
0:07:20 off again, because we just have no credibility.
0:07:26 And the Atlanta Fed tracker, or they basically have a mechanism for predicting GDP growth, has
0:07:30 gone from positive four percent to negative two point eight.
0:07:34 Consumer sentiment has had its largest fall since COVID.
0:07:38 The economy is contracting at its fastest rate since the lockdowns.
0:07:43 It’s just really difficult to understand what the endgame here is.
0:07:47 If he’s putting this out to try and accomplish some big, beautiful deal that it can take credit
0:07:51 for it, any thoughts on what’s motivating the administration right now?
0:07:53 Well, he has always loved tariffs.
0:07:56 Like, the McKinley obsession is legit.
0:08:03 And he can, at certain moments, wax quasi-lyrical about the beauty of tariffs and McKinley.
0:08:07 And, you know, we have Mount McKinley now in Alaska as well.
0:08:11 So I think there is a fundamental affection that he has.
0:08:14 And that’s not to say that all tariffs are bad.
0:08:19 And I saw, actually, your markets co-host, Ed, pointed this out.
0:08:23 There was an op-ed in The New York Times by a Rust Belt Democrat, Chris DeLuzio.
0:08:29 It’s he replaced Conor Lamb, who also ran in the Senate primary against John Fetterman.
0:08:37 And he wrote a piece defending tariffs and saying that anti-tariff absolutism is not good policy.
0:08:43 And there was a very strong argument to make that we need some protectionist tariffs, even
0:08:48 when it comes to Canada and Mexico, to make sure that we are producing things at home, that
0:08:52 people can earn a good wage, which I know is fundamental to what you’re doing with that
0:08:54 Project 2028, which I think is so cool.
0:08:57 And I was pretty taken with his argument.
0:09:01 And he mentioned how we’re all OK with the China tariffs, right?
0:09:06 So Trump had the 10 percent tariff on China, and Biden actually tripled it when it comes
0:09:07 to steel and aluminum.
0:09:12 And we get basically all of our construction supplies from Canada, including a lot of steel
0:09:15 and aluminum, plus a ton of cement and lumber.
0:09:23 So why I’m not saying a 25 percent tariff, but using the same logic that we do against
0:09:29 China, which is obviously an adversary versus a friend, but there’s some good economic policy
0:09:30 to it, right?
0:09:33 We’re not just punishing China because it’s run by an authoritarian and they’re terrible
0:09:34 on human rights.
0:09:37 There’s a reason we’re trying to protect the American worker there.
0:09:40 So why wouldn’t we think about maybe like a five percent, right?
0:09:41 Or a 10 percent?
0:09:46 Yeah, so my understanding of tariffs is that they do make sense when they’re used as a
0:09:50 weapon to try and restore asymmetry and imbalance in trade.
0:09:55 If the U.S. doesn’t have access to the Chinese auto market, then fine, you want to bring your
0:09:56 cars over here, we’re going to tariff them.
0:10:00 You might want to protect certain key strategic industries.
0:10:03 The steelmaking industry, you can make an argument for, we need to at least have a few
0:10:10 mills kind of always fired up such that if we need to make tanks or our primary source
0:10:14 of steel goes dark, like what happened with Putin and oil in Germany, we’re not caught
0:10:15 sort of flat-footed.
0:10:22 But just a sweeping tariff at these levels is nothing but an increase in costs.
0:10:28 I read that the average car, should these tariffs hold, is going to go up in price somewhere between
0:10:29 $8,000 and $12,000.
0:10:36 The way cars are manufactured is you actually have certain parts that leave Lansing, Michigan,
0:10:41 go to Canada, have work done to them, then go all the way down to Mexico, have more work
0:10:45 or assembly, and then come back to Lansing, Michigan for assembly at a Ford plant.
0:10:50 Some of these, some of the parts used to assemble a car go back and forth a half a dozen times
0:10:51 across borders.
0:10:54 So $8,000 to $12,000 increase per car.
0:10:58 They’re talking about an average increase per household of $1,200.
0:11:01 I mean, this is, this is really weird.
0:11:08 And even more so than the actual tariffs is the sclerotic reputation we’re establishing.
0:11:12 Because even if you decide, okay, we’re going to do a deal and we’re going to come to some
0:11:14 sort of accommodation that works for both.
0:11:18 You know, who can trust that we’re actually going to do what we said we’re going to do?
0:11:23 We’re now talking about, supposedly Trump wants Iran to think about another, another deal.
0:11:30 We’re, we’re shutting off intelligence to Ukraine and then they bomb a hotel where Americans are.
0:11:33 We, we talk about putting it back on and putting sanctions back on Russia.
0:11:39 I mean, it’s just the world economic policy is being run on this guy’s blood sugar level
0:11:45 at that moment, which means that if you’re going to base billions or if you’re the EU or
0:11:51 trillions of dollars in trade and alliances and supply chain on one man’s blood sugar, you
0:11:55 decide, no, I’m going to just have workarounds, even if they’re more expensive.
0:11:57 It’s just the automobile industry right now.
0:12:03 I’m at South by Southwest and a key theme here when I talk to advertisers is that their
0:12:05 advertising business is down.
0:12:07 I mean, this has so many ripple effects across the economy.
0:12:11 Their advertising business is down because some of the biggest advertisers are automobile companies
0:12:14 and they literally are just, we don’t know what to do.
0:12:19 We’ve paused all marketing and spending because as far as we know, we’re not going to have
0:12:22 cars on a lot and we’re just not sure what’s going to happen.
0:12:23 So they can’t even plan.
0:12:27 If the tariffs were absolutely going in, they would say, okay, we need to plan our business
0:12:27 model.
0:12:31 We’re going to raise prices, find alternative routes or supply chain, but they would have
0:12:31 a business plan.
0:12:35 Right now, this is the worst of all worlds.
0:12:36 I think that’s what Eisenhower said.
0:12:39 The wrong decision is bad, but no decision is worse.
0:12:43 And there are entire companies who have to make essentially no decision because they don’t
0:12:45 know what environment they’re going to be operating.
0:12:50 Yeah, well, Trump backed off of this round of tariffs because the CEOs of the major car
0:12:52 companies reached out to him, right?
0:12:53 And called and said, you can’t do this.
0:12:57 I mean, it’s $8,000 to $12,000 extra for a regular car.
0:12:59 It’s $20,000 for a truck.
0:13:05 So anyone who’s actually using their car for work is facing an extra $20,000, which is obviously
0:13:05 unaffordable.
0:13:07 I agree with what you’re saying.
0:13:11 I don’t think that it means that tariffs aren’t going to end up being a tax on the consumer.
0:13:16 A majority of Americans know that I think it could go up to $1,800 actually per annum,
0:13:21 per family, the cost of these if they’re implemented in the way that they’re being
0:13:22 posed or pitched.
0:13:30 But the result that I’m seeing most clearly from the wobbly or frenetic nature of this
0:13:35 administration is that our allies are getting stronger on their own.
0:13:39 So you look at Claudia Scheinbaum, who I think has been great in handling President Trump.
0:13:41 She has an 85% approval rating.
0:13:45 Do you know of any world leader with an 85% approval rating who isn’t like Vladimir Putin
0:13:46 has fake polling?
0:13:47 The queen.
0:13:48 I don’t know.
0:13:48 You’re right.
0:13:49 That’s insane.
0:13:50 It’s remarkable.
0:13:56 And also for a female head of state, right, on top of it, which I wouldn’t expect.
0:13:57 A Jewish climate scientist.
0:14:04 A Jewish climate scientist lady has an 85% approval rating in Mexico during a time when
0:14:09 dealing with one of the more xenophobic American presidents in history.
0:14:10 Which is crazy.
0:14:11 It is crazy.
0:14:16 Or like Mark Carney, who’s going to be the new prime minister of Canada, won the race to be
0:14:21 head of the Liberal Party over the weekend, has no technical political experience, but he
0:14:24 was a central banker, which is why people picked him.
0:14:28 And he went after Trudeau consistently about how poorly he had handled the economy.
0:14:33 And the major thing that he said was, you need someone who can steer Canada through this
0:14:34 war with America.
0:14:40 When would you ever think that that would be a platform that a Canadian premier would
0:14:41 have to run on, right?
0:14:46 This idea that we are going to be at war with our neighbor, that we are on incredibly friendly
0:14:50 terms or, historically speaking, have been on incredibly friendly terms with.
0:14:51 So that’s happening there.
0:14:55 You look at the European countries that are building up their own defense.
0:14:59 They’re thinking about, you know, what nuclear arsenal can they get to to help with sharing
0:14:59 there?
0:15:04 We’re cutting off the intelligence sharing with Ukraine at this moment.
0:15:06 They’re being embraced by Europe.
0:15:11 We’re on the wrong side of everything with that vis-a-vis cozying up to Putin.
0:15:17 And I see everybody else getting a lot stronger while we’re getting weaker at home and abroad.
0:15:18 Yeah, it really is.
0:15:20 It’s very difficult to understand the trade.
0:15:22 And the trade right now at a very macro level is the following.
0:15:29 We’re basically trashing and fraying and making much more brittle and fragile these 80-year
0:15:34 alliances with the world’s largest economies that, through free trade, cooperation,
0:15:39 coordination, general goodwill, cooperation towards each other, lower costs for Americans,
0:15:41 and increase the sales of our products abroad.
0:15:45 And now these nations are just going to figure out different alliances.
0:15:48 And even if we go back and say, hey, just kidding.
0:15:49 We didn’t mean it.
0:15:50 Love you.
0:15:52 Come down to Mar-a-Lago.
0:15:53 They’re going to say, sorry, boss.
0:15:54 You’re just not a reliable partner.
0:15:58 I don’t know who I’m waking up next to.
0:16:00 And for me, everything comes back to high school.
0:16:05 And then as I saw this fantastic study that attempted to figure out and get to the bottom
0:16:08 of why popular kids were popular.
0:16:11 So they looked at the most popular kids in high school.
0:16:12 Were they the best looking?
0:16:12 No.
0:16:14 Were they the best athletes?
0:16:14 No.
0:16:15 Were they the smartest?
0:16:16 Again, no.
0:16:20 The thing they had in common was they liked the most other people.
0:16:26 They were that kid that would, going down the hallway, would yell, hey, you know, Lisa,
0:16:27 Jim, good to see you.
0:16:28 What’d you do this weekend?
0:16:32 And was confident enough to like other people that those were the most popular kids.
0:16:38 And I read this data showing that about three quarters of Americans feel pretty good about
0:16:38 Canada.
0:16:40 They’re like, yeah, Canadians, go on.
0:16:44 But now two thirds of Canadians don’t think of us as an ally.
0:16:49 They have really been, I don’t want to use the word traumatized, but really feel, quite
0:16:51 frankly, just poorly treated.
0:16:56 And it’s not like they’re going to get over that in six or even 12 months.
0:17:00 We are basically saying to the world, we’re going to be the least popular kid.
0:17:05 And as a result, have fewer alliances, fewer treaties, less cooperation, because we’re acting
0:17:07 as if, you know, we think you’re a fucking idiot.
0:17:14 And where we keep yelling expletives or hurling insults at the other kids, you know, rolling
0:17:15 by us.
0:17:19 And the next day we don’t, the kid doesn’t even know what we’re going to say about that
0:17:19 kid.
0:17:25 We’re just so unpredictable and big and flexing our power and flexing our muscles and just being
0:17:27 somewhat, somewhat abusive.
0:17:34 This is going to have, unfortunately, it’s really going after what is a key attribute in any brand.
0:17:36 And be clear, the brand is incredibly important.
0:17:37 It’s what precedes you.
0:17:42 It’s what puts you in the room before you’re there in terms of negotiations and expectations.
0:17:46 But one of the key things about our brand that people don’t appreciate until now is the U.S.
0:17:48 is actually fairly, is this fair?
0:17:50 I think it is, is fairly consistent.
0:17:55 There are certain standards around free trade, rule of law, consistency.
0:17:58 Quite frankly, we’re slow to change things.
0:18:03 We have, you know, checks and balances government that any large treaty you, you could believe
0:18:06 that we just weren’t overnight going to do away with NAFTA, that there was, you could
0:18:13 invest around it, Mexico and Canada, because it would probably stay in place for a long time.
0:18:17 And the only way it would be changed is if all three houses of government agreed on it, not
0:18:23 that, you know, someone had given the campaign $285 billion showed up with just a bunch of
0:18:23 kids.
0:18:27 By the way, I went to dinner with one of the, I was at a dinner with one of the doge kids.
0:18:27 Oh, really?
0:18:28 Yeah.
0:18:29 I didn’t speak to him.
0:18:31 He’s, I think, about 19.
0:18:32 And it felt everyone.
0:18:35 Did you like slip him a drink and say, don’t worry?
0:18:40 I’m not going to tell anyone you’re underage and that you’re in my social security payment.
0:18:42 I’m just getting, you’re too young for social security.
0:18:45 Yeah, no, I’m pretty sure I’m going to be getting mail from the AARP.
0:18:47 But yeah, it was, it was sort of interesting.
0:18:51 And I, I, I was initially going to go over and talk to him and I thought that’s just going
0:18:52 to depress me.
0:18:58 Anyways, I’m now going to parties with the doge children, but this is, it’s hard to see how
0:19:01 we don’t come out of this pretty structurally damaged.
0:19:03 It just doesn’t, doesn’t make any sense to me.
0:19:05 All right, let’s take a quick break.
0:19:06 Stay with us.
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0:22:26 Welcome back.
0:22:32 Last week, Texas Representative Al Green was formally censured after interrupting President Trump’s address to Congress, shouting,
0:22:36 No mandate to cut Medicaid, as he waved his cane.
0:22:44 The moment led to his removal from the chamber and a 224-198 vote to rebuke him, with 10 Democrats joining Republicans in the censure.
0:22:49 This split underscores ongoing divisions within the party over how to push back against Trump.
0:22:57 Green, who has a history of direct action, including being arrested alongside the late Representative John Lewis, seems unbothered by the consequences, saying,
0:22:59 You have to be willing to suffer the consequences.
0:23:05 Jess, what do you think this says about the Democratic Party that 10 of their own members voted to censure Green?
0:23:08 Is this about decorum, or is it a sign of deeper fractures?
0:23:15 Well, I think that there is an unfair expectation that Democrats are supposed to have it perfectly together at this moment.
0:23:20 Like, after Romney lost in 2012, they spent years trying to figure out what to do.
0:23:26 And they had a plan, and they ended up with Donald Trump as the nominee in 2016 anyway, and that definitely wasn’t their plan.
0:23:39 So, I’m trying to take a step back and look at this like, everybody is out to win their race, or to at least win their day, in terms of coverage, what they’re putting out there.
0:23:44 And those 10 members who voted to censure Al Green are from swing districts.
0:23:45 They’re representing Trump voters.
0:23:50 It may just be how they feel also personally, but you look at the character of these people.
0:23:56 We had Tom Swasey on the podcast before, like, a Chrissy Houlihan, Jared Moskowitz, Ami Barra.
0:24:02 Like, these are really great, dependable Democrats that believe strongly in the mission of the party.
0:24:03 They’re great representatives.
0:24:06 And I think they’re just running their own races.
0:24:08 That it wasn’t personal about Al Green.
0:24:13 I don’t think it was about, you know, taking a stand as a unified Democratic Party.
0:24:28 I think that they felt like the way that it looked to have Al Green not only doing that and disrupting to that level, and it should be noted that Marjorie Taylor Greene and Lauren Boebert and Joe Wilson from years ago when Obama was president, have been hugely disruptive.
0:24:36 And Republicans didn’t care, and they didn’t censure them, and everyone just kind of moved on because that’s their character and that’s who they are.
0:24:43 But Democrats always hold ourselves to higher standards, and it can be tough electorally, but I do like that about us, that we have some sort of moral compass.
0:24:56 But the big problem with what happened during Trump’s speech is that there were these incredible guests that he brought, including this 13-year-old who has had brain cancer.
0:25:03 I think he’s had 13 operations, and he was essentially like a make-a-wish kid, right, who got to become a Secret Service agent.
0:25:08 And a bunch of Democrats didn’t even bother to look up from their phones while he was being honored.
0:25:29 And I think that that’s really what turned a lot of those Democrats who voted to censure Al Green and even some who didn’t vote to do that, like a Ro Khanna, but spoke out against how awful that looked, that we just didn’t seem up to the challenge in that particular moment.
0:25:41 Like, there is a way to not normalize some of the things that Trump is saying, and there were tons of lies, and his speech was an hour and 44 minutes, so the fact-checkers couldn’t even keep up with what was going on.
0:25:50 But when you have guests like Lake and Riley’s family was there, hostage families, this kid with brain cancer, you got to stand up and you got to applaud.
0:25:52 And they didn’t do that.
0:26:01 Yeah, I thought it was really, really telling in the sense that, one, it was just, I think we came out of that, when I say we Democrats, big losers.
0:26:04 We looked reckless, overly emotional.
0:26:11 I think our behavior just turns off moderates and emboldens Republicans.
0:26:19 Because, look, at the joint address or gatherings of Congress, the president wins.
0:26:33 It’s a bully pulpit, there’s a lot of majesty, and what you do in that situation, quite frankly, is you sit quietly, you say nothing, and in instances where they bring in a hero or a kid who’s endured a lot of surgery, you stand up and you applaud.
0:26:36 You show you’re, you know, you show you’re still a human, right?
0:26:43 Instead, all of the disruption and the woman following around with the sign saying, this is not normal.
0:26:48 I mean, Marjorie Taylor Greene and Lauren Boebert look like idiots, and we didn’t like it when they did it.
0:26:51 And we shouldn’t, we shouldn’t copy that kind of behavior.
0:26:54 It really made us look weak.
0:26:58 I actually thought, you know, the best moment for the Republicans was when they removed him.
0:27:01 I thought Speaker Johnson came across as authoritative.
0:27:07 And we’re starting to look like, I mean, it kind of made me sad just for America.
0:27:12 It feels like we’re two steps away from being, whereas in South Korea, where occasionally the Congress just breaks out into fisticuffs.
0:27:16 It’s like we’re about to become that nation.
0:27:22 And the other thing I think it reflects poorly on Democrats is clearly our leadership has no control over these people.
0:27:25 Because this just didn’t make sense for the Democratic Party.
0:27:27 Your point is an interesting one.
0:27:31 And that is, I’ve never understood why the Democratic Party eats our own.
0:27:38 I’m still pissed off at Senator Gillibrand for getting all high and mighty and chasing Senator Franken out of office.
0:27:38 So I think would have been…
0:27:43 And did you say she didn’t have the same kind of words for Andrew Cuomo getting back in the mayoral race?
0:27:44 She got her seat.
0:27:46 She was essentially an unknown.
0:27:48 And in my view, she kind of brightens up her room by leaving it.
0:27:54 And the Clintons appointed her, right, to the Senate seat that was vacated.
0:27:55 My understanding is by Secretary Clinton.
0:28:01 And the Clintons don’t speak to her anymore because I think that she’s not a very consistent person.
0:28:04 But for her to basically eat one of…
0:28:12 For us to allow her to ruin the career of one of our most articulate and, quite frankly, humorous voices counter to Trump,
0:28:17 so that she could have an 11-second run for presidency, that was the ticket no one was asking for.
0:28:19 Remember that?
0:28:23 The former mayor of New York and Kristen Gillibrand were both running for president.
0:28:27 And my favorite was she said she wanted to represent other young mothers.
0:28:28 I’m like, you’re a young mother?
0:28:30 Anyway, is that rough?
0:28:31 Is that rough?
0:28:31 Not cool.
0:28:33 I’m a 41-year-old woman.
0:28:35 No, but she’s much older than you.
0:28:37 I know, but just don’t do…
0:28:39 Just, you were good before that.
0:28:40 I was good.
0:28:43 Snatching defeat from the jaws of victory.
0:28:45 I am who I am.
0:28:48 But, yeah, I agree with you.
0:28:50 At first I thought, it’s good they censured him.
0:28:55 And then I thought, why are we always deciding to eat our own and hold our…
0:28:58 Like you said, we shoot ourselves in the foot.
0:29:01 And I’m not sure we should be disarming unilaterally.
0:29:04 But I thought it was a terrible look for Democrats.
0:29:08 Yeah, I wanted to add to that with the eating your own.
0:29:12 Al Green, by the way, is in a Democrat plus 53 seat.
0:29:19 He doesn’t have to think about what his constituents are going to say, right, if he causes a ruckus.
0:29:21 I mean, inevitably, I’m sure they like it.
0:29:22 He’s been their representative a long time.
0:29:30 But what really pissed me off was seeing progressives criticizing Alisa Slotkin, who gave the Democratic response.
0:29:34 So Bernie did his own thing, as usual, and he did great.
0:29:36 He had millions of social media impressions.
0:29:40 He is a viral machine in the best possible way.
0:29:43 But Alisa Slotkin gave the Democratic response.
0:29:46 She did an amazing job.
0:29:49 There were conservatives all over social media saying she did a great job.
0:29:56 She talked about being called to service, you know, in New York on 9-11, went and joined the CIA, did three tours.
0:29:59 She just won a swing state that Donald Trump won.
0:30:00 She managed to pull that off.
0:30:05 She talked about growing up in a household with a mom who voted for Democrats, a dad who voted Republican.
0:30:16 She talked about how happy she was that we had Reagan during the Cold War and not Trump because he would have ceded the world to the USSR.
0:30:23 And progressives are dumping on her because she said that George Bush was a patriot and that she said anything nice about Reagan.
0:30:27 And I saw a lot of comments like, oh, well, why isn’t she talking about FDR?
0:30:33 FDR is not a touchpoint for many people who are alive right now.
0:30:36 I understand on a historical basis why that makes sense.
0:30:53 But if you think that talking about Reagan and Bush being of good character isn’t smart if you are trying to get swing voters, moderate voters, left-leaning independents, even some right-leaning independents to vote for you, or even just that she’s telling us how she won her election.
0:31:02 I mean, we should just be having tutorials all the time from Democrats that pulled these miracles off in this environment.
0:31:04 And it really upset me.
0:31:12 I was like, this is—if you think she’s too conservative, you don’t like that she voted for the Lakin-Riley Act, you’re concerned about, you know, how she’s going to be on trans issues, etc.
0:31:13 That’s fine.
0:31:15 There’s a time and place for that.
0:31:28 But when you see someone that gets up after Trump’s speech, which had a very high approval rating in terms of the audience, which was skewed Republican, of course, but still, like, he did well in terms of his delivery.
0:31:29 She gets up there.
0:31:40 She gives a succinct response to it that talks about what really should matter to the party, like the economy, our national security, making sure that the day-to-day lives of Americans is improved and better.
0:31:43 And you want to shit on her?
0:31:46 Like, I have no time for that at all.
0:31:51 Yeah, what the Republicans have that the Democrats lack is a certain level of synchronicity and coordination.
0:32:01 And that is, if you look at the relationship between these kind of conservative think tanks, conservative media, and Republican talking points and discipline, they’re coordinated.
0:32:11 And the sum of its parts, or the whole is greater than the sum of its parts, whereas the Democrats look sclerotic, like, oh, we don’t like the person giving the response because they were too moderate.
0:32:14 Oh, we’re, you know, we’re going to have these random interruptions and yell out.
0:32:16 We just look all over the place and disorganized.
0:32:19 And, like, quite frankly, like, we just don’t have our shit together.
0:32:34 And something that people vote for is they would rather vote for someone who seems resolute and youthful and vigorous and competent than someone who just seems to be kind of, like, flailing and don’t know, you know, you don’t get a sense for where they stand.
0:32:42 And the same reason why I think our, you know, our trading partners are going to not trust the U.S. around different alliances.
0:32:47 I think that the American public right now looks at the Democratic Party and is like, Jesus Christ, pick a theme.
0:32:49 Like, what, who are you guys?
0:32:50 What are you?
0:32:58 And, you know, the response to this has been, you know, ranges from ineffective to kind of overly, overly emotional.
0:33:01 It’s just a, it’s just not a good look for us.
0:33:01 All right.
0:33:03 Let’s take one more quick break.
0:33:03 Stay with us.
0:33:07 Hey there.
0:33:11 I’m Peter Kafka, the host of Channels, the podcast about tech and media and the way they’re colliding.
0:33:17 And this week I’m talking about the state of the movies and the state of TV and how they all get melded together in the Oscars.
0:33:21 A huge event that looks like it’s going to get smaller every year.
0:33:28 Here to explain what happened this year and what’s going to happen in the future is Matt Bellany, the veteran Hollywood journalist from Puck.
0:33:32 Matt is smart and he’s going to make you feel smart for listening in.
0:33:37 You can hear our chat on channels from the Vox Media Podcast Network.
0:33:51 This week on The Vergecast, we are asking existential questions about laptops.
0:33:53 What do we want our laptops to be?
0:33:54 We’ve had them for decades.
0:34:00 And every time somebody has a big, wild new idea about laptops, it tends to go terribly.
0:34:06 So this week we got new MacBook Airs from Apple, which have new chips, but are just the same as they’ve ever been.
0:34:14 And then there are companies like Framework, which want us to rethink the way that we buy and upgrade and repair and use our laptops.
0:34:17 So what do we want from our computers?
0:34:33 This week on Prof G Markets, we speak with Jonathan Cantor, former Assistant Attorney General for the Antitrust Division of the U.S. Department of Justice.
0:34:41 We discuss which sectors he believes most need antitrust enforcement and how businesses actually feel about antitrust.
0:34:43 The dirty little secret is that business actually likes what we do.
0:34:48 They’re the ones encouraging us to bring cases because they want access to markets.
0:34:50 They want supply chains that are affordable.
0:34:54 They want greater supply of key inputs.
0:34:55 Right.
0:34:57 This is something that’s quite popular in business.
0:35:01 You can find that conversation exclusively on the Prof G Markets podcast.
0:35:04 Welcome back.
0:35:15 Before we go, California Governor Gavin Newsom is under fire from LGBTQ plus activists after saying it’s deeply unfair for transgender girls to compete in high school girl sports.
0:35:22 He made the comments on the debut episode of his new podcast while chatting with right wing provocateur Charlie Kirk.
0:35:31 Newsom, once a trailblazer for LGBTQ rights, also agreed that a Trump campaign ad attacking Kamala Harris over gender affirming care was politically devastating.
0:35:39 Speaking of Harris, she’s reportedly considering a run for California governor in 2026, and she’s told allies she’ll decide by the end of the summer.
0:35:45 One could cement her leadership in the Democratic Party, but take her out of the running for president in 2028.
0:35:49 Meanwhile, Democratic strategist James Carville has a message for the party.
0:35:51 Do nothing.
0:35:56 He argues that Republicans are so bad at governing their own chaos will sink them.
0:36:01 Jess, does Newsom’s stance on trans athletes hurt his 2028 chances, especially with progressives?
0:36:03 I mean, they’re not going to like it.
0:36:06 It’s part of him tacking to the center.
0:36:18 And I think a little bit of a fulfillment of him coming out and probably what he naturally thinks versus how he’s been campaigning or governing over the course of his career.
0:36:24 But I saw there was a New York Times-Ipsos poll out on the issue of transgender women in women’s sports.
0:36:30 So it’s an 80-20 issue, like across the general public, against it.
0:36:37 But it’s also 67 to 31 percent of self-identified Democrats do not think that transgender women should be playing in women’s sports.
0:36:41 So this is the common sense position, right?
0:36:48 This is the stuff that we’ve been talking about since the Charlemagne and the God ad came out, but really for several years, right?
0:36:50 Like what Bill Maher has been going on and on and on about.
0:36:55 Just say the normal thing, which this is biologically unfair.
0:36:59 We are not trying to tamp down on someone’s civil rights.
0:37:07 It’s hard to make an argument that it is the civil rights issue of our time that transgender women get to compete on a collegiate level against women.
0:37:14 We’re not talking about having equal access to all the amenities of society being treated equally under the law.
0:37:18 We’re talking about a very specific test case of this.
0:37:23 And Tim Ryan was talking about it a few weeks ago, actually, when he was on Maher.
0:37:31 And Maher was quickfire asking him, you know, is this the hill to die on about several issues and brought up this issue.
0:37:34 And Tim Ryan said, no, it’s not the hill to die on.
0:37:42 There’s a way to say that you want to make sure that rights are protected without saying that Leah Thomas should be swimming against biological women.
0:37:47 I get it. Gavin Newsom wants to run.
0:37:55 He’s doing what he can to make sure that he is more palatable to a larger, more moderate electorate when that time comes around.
0:38:00 But I do think that there’s going to be a lot of mea culpa-ing over the course of the next few years.
0:38:11 People are going to have to talk about why it is that they said that Biden was completely fine and that they didn’t think that there were any legitimate concerns about him serving for the next four years.
0:38:13 And certainly a policy like this is going to be one of them.
0:38:15 They’re going to have to talk about the border as well.
0:38:23 Why did you not say anything for a lot of them for the first three years of the Biden administration when there were hundreds of thousands of people crossing the border on a monthly basis?
0:38:26 Did you see the new CBP numbers?
0:38:31 It’s down to, I think, 8,100 crossings in February.
0:38:36 It was 250,000 peak on a monthly basis under Biden.
0:38:39 And this started under Biden, for sure, coming down.
0:38:42 But it’s quite clear there have been no new laws passed.
0:38:49 The rules on the books, if they are enforced, can do a lot in stemming illegal immigration.
0:39:00 I think in general, people look at the Democratic Party and are drawn to some of the ideals and some of the people and then go, oh, wait, but they’re fucking insane.
0:39:02 And this is one of those issues.
0:39:06 I said this two, two and a half years ago on Pivot and got a lot of pushback.
0:39:17 But when there was a bicycle race or a bike race in North Carolina, not a big race, but a race that was big enough that it had cash prizes.
0:39:22 And a transgender woman came across the finish line five minutes before the rest of the crowd.
0:39:32 And then you saw the footage of basically a six foot four swimmer with a just enormous wingspan shows up and takes the NCAA finals and like shatters every record.
0:39:36 And I think America looks at that and goes, they’ve gone fucking insane.
0:39:45 And they’re defending this because they decided this was some sort of woke to establish a woke bona fides who immediately had to go, OK, I’m going to ignore all common sense.
0:39:51 And it was just it’s done enormous damage that we don’t have basic common sense.
0:40:02 And I think I believe our view on this should be, look, if a local school board, we believe let’s embrace the Republican ideology that on decisions around nuance, individual schools and parents should make up their own mind.
0:40:14 If there’s a school where they say, look, a 14 year old transgender woman would really benefit from participating in junior high school or high school sports, where quite frankly, the stakes aren’t that high.
0:40:19 Then fine, they can decide to let to let her participate.
0:40:29 But anything involving scholarships, money, accolades, admissions to colleges, whatever it might be, or contact sports, quite frankly.
0:40:33 No, and I don’t see the crime against humanity here.
0:40:35 I will never play basketball.
0:40:37 I don’t have those skills.
0:40:38 I wasn’t born with those skills.
0:40:45 And I believe if you’re born with testicles and a penis and the advantage of testosterone and that bone structure, unfortunately, you know,
0:40:51 you don’t get to play women’s sports because it, to me, the math was just so simple.
0:41:08 And that is, if we’re going to permit this and have no regulation around it, then essentially what you’re saying is all the accoutrements of athletics, all the money, the fame, the prestige, the relevance, the self-esteem is going to slowly but surely be sequestered to people born with a penis.
0:41:13 I was just shocked feminists didn’t say, no, we can’t, we can’t have this.
0:41:19 And we just allowed this just strategically on an issue that really doesn’t impact that many people.
0:41:25 And I’m sure we’ll get emails on that, to the, that was where we were going to say, okay, this is a big issue for us.
0:41:27 And we just come across, it’s just insane.
0:41:35 And the one commercial that moved the needle more than anything during the presidential campaign was that commercial basically saying, you know, I think it was accusing the Democrats.
0:41:42 And of course, I believe it was somewhat of an exaggeration or taken out of context that we were paying for the transgender surgery of inmates.
0:41:51 This to me, I think this is Governor Newsom, who we know is running, you know, triangulating to the middle.
0:41:57 And quite frankly, pissing off the left is a feature, not a bug in terms of your electability.
0:42:03 Somebody is going to have to, you know, someone was saying to me, who’s the leading candidate for Democratic nomination in 2028?
0:42:06 And I said, it’s, it’s probably governor you really haven’t heard of right now.
0:42:08 Someone will rise to the moment.
0:42:11 And I’m not even sure we know this person right now.
0:42:17 I’ve always thought Governor Newsom would make a really strong candidate because I’m convinced we’re a very luxurious nation and he just looks presidential.
0:42:19 Also, I think he’s a fantastic debater.
0:42:26 I think he’s one of maybe a handful of Democrats that goes behind enemy lines as evidenced by the fact he went on with very conservative commentator, Charlie Kirk.
0:42:31 But this, this needs to be an issue that the Democrats need to pivot very aggressively.
0:42:39 People, people should have rights if a local school wants to let a transgender girl play sports, more power to you.
0:42:45 But with respect to anything regarding, you know, advantage, no, this just doesn’t make any sense.
0:42:51 They need to pivot hard on this because otherwise they are just handing a gift, the gift that keeps on giving to Republicans.
0:43:00 Yeah, they also need to talk about it in the framework of fairness, because that has been where Bernie Sanders has been so successful, right?
0:43:07 And talking about the oligarchy that’s out there and how unfair things are for the average American, the American worker, et cetera.
0:43:16 And so that’s how Governor Newsom and Charlie Kirk were talking about the issue on his podcast, where he said, you know, I was a college athlete, so was my wife.
0:43:17 I have two daughters.
0:43:19 I know that it is not fair.
0:43:33 And my conservative co-hosts on The Five have obviously been relentlessly talking about this, but they picked up on exactly what you said, which is where are the feminists in all of this?
0:43:42 And you’ve seen very few, you know, champion female athletes, including for Martina Navratilova, who is incredible on this issue, speaking out about it.
0:43:45 You can’t get an answer from like a Billie Jean King, for instance, on this issue.
0:43:56 You have a Megan Rapinoe, Sue Bird, et cetera, defending trans women’s rights to be in seriously competitive women’s sports.
0:44:05 And I think a lot of that comes down to the fact that people are just denying what biological advantages are afforded to men.
0:44:12 And that has been something that we just haven’t been able to have, you know, serious, clear-headed conversations about.
0:44:16 And some of that gets into the language police stuff that we have, you know, weird terms for things.
0:44:20 And we’re talking about inseminated people and struggling to find men and women.
0:44:29 Not that we don’t know that there are, you know, 30 intersex combinations that can happen and that the law needs to make sure that it protects as many people as possible.
0:44:43 But when you can’t have a straight, normal, common-sense conversation with someone where you can talk about men and women and talk about where it is appropriate to have transgender athletes competing and where it is inappropriate to do so,
0:44:49 we become like aliens to regular people.
0:44:58 Even seeing that 30 percent of Democrats versus 18 percent of the general electorate are in favor of transgender women and women’s sports, that’s a pretty big difference.
0:45:02 Obviously, you know, you have a bunch of Republicans in the general sample.
0:45:04 They’re going to be pulling it to the other side.
0:45:08 But when you have a conversation with somebody, if you just went out to lunch with them and said, what do you think about this?
0:45:13 I think odds are that they would think the same way that we do about it.
0:45:18 And there’s definitely, I felt that a couple of years ago when we were speaking about this issue, there’s definitely a narrative you’re supposed to sign up to.
0:45:21 It’s almost like the narrative around being a MAGA.
0:45:26 You have to be MAGA or you could be alienated or voted off the island or Trump will go after you in primary you.
0:45:34 On the left, it’s more nuanced in the sense that if you don’t sign up to the narrative in this kind of certain ideology, you’re treated like an apostate.
0:45:39 And the blowback on this, if you didn’t sign up for the narrative, and there was just no critical thinking.
0:45:42 This kind of seemed like an easy one.
0:45:44 But I think we lost a lot of credibility.
0:45:48 Anyways, what do you think of the idea of a Governor Harris, Jess?
0:45:49 I don’t think we’re going to have a President Harris.
0:45:56 So I think that it is a much more reasonable idea for her to run for governor if she wants to continue to serve the country.
0:46:02 I know that she’s technically the frontrunner in the early polls for 2028, which is what happens.
0:46:05 The last nominee is always the person that’s furthest ahead.
0:46:14 And she did save us from certain electoral disaster because I think if Biden had stayed on top of the ticket, Trump would have won over 400 electoral votes.
0:46:20 And those swing state senators like the Alyssa Slotkins of the world would not have been able to win their competitive races.
0:46:33 But, you know, I assume that people would line up for her in California and that there are a lot of people who are considering running who would kind of bow down to the idea of Kamala getting in.
0:46:36 And perhaps that’s the right route for her.
0:46:42 But I just I feel strongly that the national stage is not going to be where she ends up again.
0:46:45 I’m really split on this because she’s a competent person.
0:46:49 Right. And I think she was a good attorney general, good good senator.
0:46:53 And she’d probably be, I’d like to think, a competent governor.
0:47:00 The problem is, I think when you run for president and you lose against Donald Trump, quite frankly, just I think you go away for a while.
0:47:08 I don’t think I think she’ll be a talking point for for Republicans and their races if she maintains her national profile.
0:47:17 I think when you lose her president, quite frankly, I think the best thing for the party would be if she just went dark until we have a Democratic president and she’s appointed to the Supreme Court.
0:47:18 I think she’d be an outstanding justice.
0:47:20 Yeah, I think she’d be an outstanding justice.
0:47:22 Yeah, I hadn’t thought about that, actually.
0:47:28 I mean, I know people say things like Obama, but I hadn’t thought about it for Kamala.
0:47:31 Anyways, but my sense is she’s going to be a continued talking point.
0:47:36 I don’t think I think she’ll continue to be a flashpoint for for Republicans.
0:47:37 And I wouldn’t be surprised.
0:47:53 I mean, I’ll be curious, but given I think she’s setting herself up for real challenge and embarrassment here, because about every couple of decades, a quote unquote lifestyle mayor governor wins in California cities and in the state.
0:48:08 Because the quality of life in some of our bigger cities in California is is eroded so much that I think the moons are lining up for what I call like a no nonsense kind of Pete Wilson ish kind of kind of governor.
0:48:12 And I would just say I would hate to see her run and lose.
0:48:21 I think it would it would basically send a signal to the entire nation that Democratic ideals are kind of just just totally done and gone.
0:48:26 So torn on this because I think she’s a competent person and would probably be a decent governor.
0:48:42 But I think she her brand and the possibility of a loss and her as a constant talking point for Republicans reminding them of why, you know, Americans didn’t vote for her in the first place will be a real another cudgel or a weapon that will benefit benefit Republicans.
0:48:47 Well, she has a lot of those loony positions that we’re talking about with Newsom that she’s taken.
0:49:03 We only ended up with the Charlemagne the God ad because Kamala signed yes on like an ACLU questionnaire when she was running for president in 2020, saying that she would be supportive of transgender operations for people who are currently incarcerated.
0:49:12 And the New York Times has an analysis, by the way, there are plenty of transgender people who got their gender affirming care while Trump was president.
0:49:16 So he was lying about that and saying that this was just something that happened under the Biden administration.
0:49:22 But this comes that whole conversation was rooted in the fact that Kamala had taken a far left position.
0:49:42 One of the most important propositions or ballot proposition ballot measures was Prop 36 for California this year, which was undoing a 2014, what was it, Prop 47 from 2014, which allowed people to shoplift up to $950 without being arrested.
0:49:43 That’s right.
0:49:47 Right. And it passed with 70 percent of the vote, 68, 70 percent of the vote.
0:49:49 And Newsom opposed it.
0:49:50 And Kamala wavered on it.
0:49:55 She was asked the weekend before the election on like Saturday or Sunday before we all went to vote on Tuesday.
0:49:57 And she demurred.
0:49:59 She didn’t say where she would stand on it.
0:50:02 You can’t be like that anymore.
0:50:04 You can’t certainly can’t run for governor of a state.
0:50:17 We have 70 percent approval rating for something and not take a stance at all, let alone pick the thing that the majority of people are in favor of and not have a good defense for why.
0:50:25 That is. And Governor Newsom had a whole thing about, you know, the issue with privatizing prisons and that it was going to cut out money for drug rehabilitation programs, et cetera.
0:50:34 But as an elected official or someone who wants to be an elected official, being on the wrong side of a 70 30 issue does not bode well for you.
0:50:44 Yeah. So speaking, speaking of being on the or kind of political strategy, what do you think of Carville’s notion that Democrats should step back and let Republicans implode?
0:50:47 Do you think this is a dangerous gamble, this notion of just do nothing?
0:50:55 I think it’s a little more nuanced than do nothing because it’s important that you continue to amplify what is going on.
0:51:05 So the the best message tested line of argumentation right now is around the cuts to Medicaid and that Trump isn’t focusing on the economy.
0:51:09 So over 80 percent want him to focus on the economy. Only 36 percent think that he actually is.
0:51:13 Nobody Republican, Democrat, independent wants these Medicaid cuts.
0:51:17 And I’m sure you’ve seen the coverage of the town halls that are occurring all over the country.
0:51:19 And the Republicans, you know, are saying that they’re astroturfs.
0:51:23 It’s all Democratic plans. And George Soros is setting everyone up for it.
0:51:30 But the Republicans now don’t want swing district congresspeople to have these town halls because it’s gotten so brutal.
0:51:35 And they have veterans showing up who are saying, like, you’re slashing our benefits.
0:51:38 You’re firing me. You know, we don’t like what Doge is doing.
0:51:40 Hands off our Medicaid, et cetera.
0:51:53 And so I think, quote unquote, do nothing if that means amplifying what their spending bill is actually going to do, amplifying what Elon Musk is doing, which he’s the weakest link in the administration.
0:51:56 People like the idea of getting rid of waste, fraud and abuse.
0:52:03 They don’t like the approach that he’s taking to it and don’t really see that as what’s being executed.
0:52:08 Then I say Carville’s right. But he’s also taken a lot of big swings and missed.
0:52:14 Like he said Kamala was definitely winning. You know, he’s a it’s part of his charm for sure.
0:52:20 Right. Yeah. He’s well, whenever he speaks, you listen, because he’s just so compelling and so matter of fact.
0:52:22 But he’s a winner and we like winners.
0:52:24 That’s right. But you’re I think your instincts are right on.
0:52:34 And that is it’s not do nothing as much as it is demonstrate more discipline instead of running over here and going, oh, my God, the Gulf of Gulf of America.
0:52:36 Or male versus female. No, no, no, no. Be more disciplined.
0:52:45 Talk about surrender in Ukraine and that they’re coming after your Medicare and have experts and data and look like an adult and just hammer them.
0:52:50 The difficult thing about Democrats is not what to talk about. It’s what not to talk about.
0:52:58 And specifically, they need to stop taking the debate around these ridiculous, stupid issues that don’t affect anybody that are clearly being thrown out there as weapons of mass distraction.
0:53:02 Even Doge, I believe, is a weapon of mass distraction.
0:53:06 And instead of getting all angry about 19 year olds, whether they should be in there, I get it.
0:53:13 But the majority or a lot of moderates, quite frankly, see some of these firings and under the breath are like, well, welcome to the work week.
0:53:21 This has happened to me and other people. What they should, in my opinion, be focused on is a much more boring but impactful piece of data.
0:53:28 And that is this is all a distraction to the notion that, one, they’re going to increase the deficits by $800 billion a year, which is nothing but a tax increase.
0:53:34 We’re about to experience the greatest tax increase in history on young people in the form of unprecedented deficits.
0:53:40 And two, they’re coming for your Medicaid. There’s no way. Look at what they’re planning here.
0:53:43 They’ve tasked the Energy and Commerce Department with cutting $800 billion.
0:53:46 That means they’re coming. They’re coming for Medicaid.
0:53:50 And just, and anything else, again, it goes back to the same notion.
0:54:01 The Democratic leadership doesn’t have the discipline that McConnell imposed or that, you know, it appears that Speaker Johnson and Trump are imposing on the Republican Party.
0:54:04 We just lack, they just lack sort of that.
0:54:10 And instead, they just, they take the bait and they start saying, can you believe he said this?
0:54:13 And it’s like, well, okay, that, that, yeah. All right.
0:54:24 We all know he’s reckless and he’s weird, but focus on the things that are indefensible on Republicans’ part that are popular among Americans and hammer away on those one or two issues.
0:54:28 So it’s, again, it’s not doing nothing. It’s more discipline.
0:54:37 Just, just before we wrap up here, what do you think of what happened recently that supposedly Trump has directed, has basically said, all right,
0:54:45 Doge is now an advisory or almost like a service to different cabinet members, but they ultimately get to make the decision around layoffs.
0:54:45 Any thoughts?
0:54:48 Seems like Elon Musk is ruffling some feathers.
0:55:04 There was some reporting of what went on in that cabinet meeting and that Secretary Duffy, who oversees transportation, and Secretary Rubio, our Secretary of State, were both forthcoming in their criticisms of Musk and basically said, like, what the fuck do you want us to do?
0:55:13 Like, Sean Duffy said, we’re having plane crashes, right, at an unprecedented level, and you’re cutting air traffic controllers.
0:55:18 And that apparently Trump sided with them over Musk.
0:55:22 So I don’t know, you know, I’m not a Musk whisperer.
0:55:26 I have not deeply studied him as much as you or certainly as Kara has.
0:55:47 But it feels like he is on more tenuous ground than he certainly was at the beginning of this and that Trump at least has some level of realization that the fate of the administration’s success actually depends on these individual bureaucracies working well and not necessarily whatever Elon Musk is doing.
0:55:54 So he’s continually demoted, you know, they say Amy Gleason is actually the administrator, and now he is an advisory person, et cetera.
0:55:58 And you look at Tesla basically cratering, right?
0:56:00 The international sales are some of the most astounding.
0:56:02 What is it, down in Germany, like 75 percent?
0:56:07 So he, you know, might want to tend to his home.
0:56:24 That could be his children or his companies that he had before he did this and pay attention to that versus the day-to-day grind where it seems like these folks who got confirmation for these jobs have a different kind of plan on how to execute.
0:56:35 Yeah, if this in fact is true, that he’s now got to defer and the ultimate decision is made or not made by the cabinet heads, it’s effectively, I think, the end operationally of Doge.
0:56:53 And the notion that we decided that an individual, the world’s wealthiest man, who is severely addicted to ketamine, reported by the Wall Street Journal, is concurrently being sued by two women for sole custody of their children because he doesn’t, he’s not involved in their lives.
0:57:02 Maybe that’s not the individual who gets to bypass any sort of congressional vetting or approval to decide if veterans or children get their medical care and food.
0:57:18 And in addition, if you look at what so far has happened from Doge, the audit, the only thing it has demonstrated, in my view, is that the U.S. government has a lot less fraud and waste than initially feared.
0:57:32 If this were a physical, I would argue that the U.S. government has gotten a clean bill of health, that this wall of receipts meant to just highlight all the outrageous waste and fraud, there’s no there there.
0:57:36 The first thing they reported on the wall of receipts was an $8 billion savings.
0:57:38 It ended up it was $8 million and it was money that had already been spent.
0:57:42 And then items two, three, and four, it ended up, weren’t even true.
0:57:47 They are having trouble finding all of this waste and fraud that was supposedly out there.
0:57:49 And this isn’t an operation.
0:57:51 This isn’t about operational efficiency.
0:57:53 It’s about political ideology.
0:58:01 I got an email from a fraternity brother who I hadn’t talked to in 30 years, a kid named Greg Townsend, kid.
0:58:02 He’s now, you know, 57.
0:58:05 And after graduating, you have trouble.
0:58:09 All you see when you hear from these kids is a guy you used to do beer bongs with.
0:58:13 And that’s, you assume they’re still doing beer bongs and listening to Led Zeppelin.
0:58:25 And this, this, this guy, this man, Greg, had gone on to law school and has been working for a division of the UN pursuing war criminals around the world out of, out of Switzerland.
0:58:28 I mean, I was just so blown away by his work.
0:58:40 And he said that their funding had just been shut down, but they’re continuing to work because they all, all are so committed to creating an incentive system globally where people think twice before committing war crimes.
0:58:43 And essentially the funding was cut off.
0:58:49 So if you look at where they quote unquote have what Doge has really done, it’s not an operational or an efficiency mechanism.
0:58:53 It’s a political ideology because they just decided, I know, let’s just shut down all U.S. foreign aid.
0:58:58 That’s a political decision that has nothing to do with efficiency or fraud.
0:59:05 And what Trump has been really good at is using people as human shields and kind of soaking them up, having them do his dirty work and then firing them.
0:59:12 92% of his advisors were fired in the first administration, which was more than the previous three administrations combined.
0:59:18 And I think he’s essentially, I mean, the thing about Trump that’s just so obvious that people don’t want to talk about nobody.
0:59:21 He is literally Chernobyl after the meltdown.
0:59:25 You get near him, you’re going to die a hideous death, at least your reputation.
0:59:27 And it’s happening to Musk.
0:59:29 I see it here at South by Southwest.
0:59:31 People are throwing shit at Teslas.
0:59:36 You know, my, when I talked about Tesla, I’m like, you know, zero to 1939 in three seconds.
0:59:44 It’s really hard to understand the political calculus or the political calculus here, the economic calculus.
0:59:46 He really fucked up.
0:59:55 And that is the opportunity to remove inspectors from the 32 different investigations across 11 agencies against his companies.
0:59:55 Okay.
0:59:59 That’s an economic incentive to get involved and be cozy up to the president.
1:00:03 But the cost that’s being levied on him and his brands right now is enormous.
1:00:05 People are canceling Starlink contracts.
1:00:10 Entire countries are saying, Poland’s saying, we can’t count on you or your technology.
1:00:13 Provinces of Canada are canceling Starlink.
1:00:16 And I thought that’s the one that is really going to scare the shit out of them.
1:00:22 What’s unusual about this, and I use Nike as a counterexample, Nike took a political stand.
1:00:24 And sometimes it works.
1:00:29 When they decided to embrace Colin Kaepernick when he bent a knee, that was a real political risk.
1:00:30 But they did the math.
1:00:34 And that is two-thirds of Nike sales are outside of the U.S.
1:00:39 No international individual is that concerned or thinks the U.S. has race relations correct.
1:00:51 And about two-thirds of their revenue came from people under the age of 30 or non-whites, meaning the people that were outraged and did videos of burning their Nikes, that was probably their first pair on Nikes.
1:00:58 They did the math and said, this is going to cement and tickle the censors of the majority of our profits and revenue base.
1:01:01 And Musk has done the exact opposite.
1:01:07 75% of Republicans who he’s sort of lighting up or illuminating or activating say they would never buy an EV.
1:01:17 So he’s done the exact wrong math here, and that is the group that he is most going to piss off and alienate is sort of his core customer base.
1:01:25 And all this bullshit in Europe, it does seem like there’s a very healthy gag reflex in Europe around him trying to meddle in their election.
1:01:30 But I have never – it feels to me, and I’ve said this before and I’ve been wrong, this feels like a tipping point.
1:01:36 It feels like the worm has turned, and I was thinking the Bill Burr rant against him was sort of evidence of that.
1:01:44 But Tesla has shed a third of its value in February, and I mean the polling on this guy is absolutely – it’s just brutal.
1:01:56 Anyways, I don’t – I think – and I’m calling it, and I’ve been wrong before, but I think the Musk brand has absolutely peaked and is crashing in the fall right now feels unsustainable.
1:01:58 I mean, I mean, you would know better than me.
1:02:07 I feel like it is very early in the Trump administration to be writing the obituaries for anyone, let alone the person who got Trump elected.
1:02:18 And we also need to keep in mind that the normal things that should, quote-unquote, take a person down do not apply, certainly to Trump, right?
1:02:28 And a lot of people in his orbit, and I get this criticism all the time from lefty friends, you know, don’t normalize him, you know, this is normalizing, et cetera.
1:02:40 There is nothing more normalized than the fact that Donald Trump got reelected and that everyone knew exactly who he was and that they knew as well that Elon Musk was coming in for the ride and all of this.
1:02:44 He was by his side, almost glued to him for the last two months of campaigning.
1:02:55 So I’m not sure that I agree completely with you in terms of this being the end of it, but it certainly feels like a trouble-in-paradise moment.
1:03:01 And that, again, the American people are smarter than Trump and co. think that they are.
1:03:11 And they’re trying to convince all of us that public servants are just leeches instead of people who dedicate their lives to helping other people.
1:03:13 And does that mean there aren’t some bad public servants?
1:03:15 Of course there are.
1:03:28 But by and large, a workforce that’s 30% veterans, people that we all agree with, should have the most opportunities when they come home from serving this country, possibly, you know, risking their lives for us.
1:03:34 And they should have these possibilities to go and work for us and continue to make America better.
1:03:39 That Musk is really off-key in terms of how he’s talking about those folks.
1:03:51 Yeah, to your point, Kara was saying that Trump is scared of Musk, that he’s the world’s wealthiest man, which is his metric for credibility, and that the last thing he wants to do is piss him off.
1:03:52 I think he’s just going to fade away.
1:03:54 I think it’s going to be, if in fact—
1:03:55 He’s going to disappear him?
1:03:58 Well, no, I think Musk will decide to fade away.
1:04:01 I think Musk at some point is going to do the math and go, this is just not worth it for me.
1:04:14 And also, if in fact it’s now the cabinet members who get to decide or either do this or not do this, Secretary Rubio is not going to lay off some people in the State Department to save some money at this point.
1:04:16 He doesn’t give a shit about a small increase in the deficit.
1:04:18 He’s got a difficult job.
1:04:22 He’s not going to start laying off what he thinks might be bureaucratic.
1:04:26 He wants all the firepower he can get.
1:04:34 The notion that these guys are going to say, okay, I’m really going to take a chainsaw to my—the incentives are I need to get shit done.
1:04:35 I need to reflect confidence.
1:04:37 I need to have decent morale.
1:04:39 I need resources to get things done.
1:04:45 I’m getting shoved back and forth by these decisions.
1:04:45 They need people.
1:05:03 The notion that they are going to decide to start cutting costs, I think effectively or operationally, it might be if in fact he’s now there on top, so to speak, might be, if you will, the end of Doge.
1:05:04 It’s got to be the Pentagon anyway.
1:05:05 Got to be the Pentagon.
1:05:07 I mean, that’s where all the money is.
1:05:12 So they have to go after the Pentagon if they’re going to be actually making any savings.
1:05:17 And we’ve got to go, but I’m just saying it’s all smoke and mirrors, saying we’re going to go, we’re going to cut here or there.
1:05:18 We know where the money is.
1:05:20 It’s in the entitlement programs and in the Pentagon.
1:05:22 And so far, they’re not doing that.
1:05:23 It’s interesting.
1:05:26 That was one, I think, strategic error on the part of the Republicans.
1:05:28 I think they would have had a lot more credibility.
1:05:35 They would have obviated or kind of defenestrated any criticism if they had gone after the Pentagon first.
1:05:41 And that is, I would think it would have been much harder for Democrats to be critical of the process.
1:05:44 I thought that was a strategic error on their part of what started with the Pentagon.
1:05:45 Any thoughts?
1:05:45 Yeah.
1:05:47 I mean, you go where the money is, right?
1:05:51 And that was something that Secretary Hegseth said that he was open to.
1:05:53 He said, you know, we’ve never passed a clean audit.
1:05:55 And we absolutely should.
1:05:57 So, yeah, start with the audit of the Pentagon.
1:05:59 All right, Jess, that’s it for this episode.
1:06:01 Thank you for listening to Raging Moderates.
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