Brian Gannon (How software is eating the hardware industry & what’s wrong with innovation)

  • 00:01:20 The genesis of the Loop device as an idea and business.
  • 00:07:07 Why Loop considers itself much more a software than a hardware company?
  • 00:10:56 Is hardware development going the way of software – make it once and sell it almost an unlimited time? How does one get started with developing hardware in China?
  • 00:24:24 Is complexity the domain of humans? Will everything else be taken over by AI? Should everything in life be free? Is technology already delivering on this? Is work completely optional?
  • 00:38:16 Are we not daring enough in the startup industry? Why did we give up on the sci-fi dreams of the 1960s and 1970s.
  • 00:43:14 Is regulation and politics the real hindrance to innovation? Why do people go into extreme memes?

You may watch this episode on Youtube – #80 Brian Gannon (How software is eating the Hardware industry & what’s wrong with innovation).

Brian Gannon is the CEO of Loop – the easiest way to stay connected with your family. Before starting his own business Brian worked with Maxim at their hardware video acceleration unit.

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Brian, welcome to the George McCall podcast. Thanks for doing this. Thanks for coming. Thanks so much, Torsten. I appreciate the invite. Absolutely. We talked a little bit earlier, and I learned a little bit when I did my research about Loop, and what it reminded me of is something that I’ve seen, I think, the first time about 15 years ago. I don’t know if you were behind the same thing. It is a digital picture frame where you have the ability for your friends and relatives to not just, and that’s what I remembered. It was a card that you add into a digital picture frame, but now you’ve built something else that you can update over Wi Fi, that you can update over the Internet. Maybe you can tell us a little more about the genesis of your idea. Yeah, thank you. Yeah, no, totally. The genesis of the idea was really quite simple. I have my son, Alex, here. I live in San Francisco, but I’m originally from the East Coast and from Boston, and my family is scattered about. When I had him, I really then, I’m just a guy, right? I’m not sharing pictures too much with my family, but once that happens, at life event, you then get much more concerned about that, like keeping people up to date and sharing their lives growing up. I just didn’t really want to put pictures of my kids on Facebook. It was as simple as that. That was kind of like the only alternative at the time that I felt, like Instagram or Facebook. I just sort of took a step back. I did everything people do. I kind of created fake accounts sometimes, and subgroups. It was just all quite complex. I was actually at the Stanford Design School at the time too, and my sort of antenna was going up at the time about watching for friction in different areas. I was doing it for other people and other businesses, and then I started to kind of observe this. I actually started making an app. I was like, this will be so straightforward. I’ll make a cool little app. It’ll be a little private thing, almost like path back in the day, but very family focused. We really got nowhere with it. We found it was really hard to get someone to sort of sign up for yet a new app that would do very similar things potentially on the sort of bigger platforms. It was a sort of side project. One day my dad got sick and he was on the East Coast, and I was like, oh boy, this is really, it was getting pretty serious, and I’ve got this little one year old boy here, and he was beautiful. Maybe if I just get pictures to him in videos of my son Alex, it’ll really lift his spirits and he’ll sort of come out of this. So I sent him an iPad and spent hundreds of dollars on it, kind of loaded it up with different software, and he never used it. I was like, you got to be kidding me. I’m an engineer. I get a little background here. We built basically a screen that I could connect up to WiFi. I had wires coming out of it. It was connected to Raspberry Pi. I took that crappy app that I had and started connecting it, and all of a sudden these pictures started to flow, sort of effortlessly, efficiently, simply. And people started to ask me, by the way, are we good to go on this still? But people started to ask me if they could buy one. And I’m like, what are you talking about? It has wires. Excuse me. It’s like a danger. Like literally it’s probably an electrical danger. And so I said, come on, this is ridiculous. Kept happening. Went to my developer who’s like 26. And he’s like, well, you know, I’m like, can I get that thing back? I just want to check it out in my own house. You know, and he never gave it to me. Weeks go by and I go, hey, what’s going on? He said, well, look, I’m having parties and I’ve given out the app to a bunch of people. And now all of a sudden we have all these sort of channels running with all the people in the content and everyone kind of gets around the loop. And I was like, really? So all of a sudden there was this sort of like there, I went from like an app that I thought was going to be sensational to nobody cared to, oh my god, everyone I talk with has a different sort of experience with this that makes it right for them. And so that was really the sort of genesis of this. And by the way, bridging back to your idea about digital frames, I said, whoa, this is a really interesting way of getting, you know, all types of businesses were getting changed through connectivity and kind of changing a frigging thermostat becomes a $3 billion business for Google Nest, you know, because they added in some design and some intelligence behind it, you know, some better software. Drop cam, you know, those old security cameras, you know, billion dollars, you know, these were basically billion dollar companies that are basically just applying great software to some very, very simple, almost off the shelf hardware, you know, depending on how far you want to go. So and by the way, just a little background, I was making while I was doing this, you know, project of loop, I was actually the core job, my day job was building video compression technology. And it’s basically a chip and software. And if you opened up a drop cam slash nest cam, or GoPro, or Ring doorbell, it’s all the same thing. It’s a little chip that in software that records and compresses video and sends it to the cloud. Right. So I got to meet all these people in day one of their businesses, Jamie Siminoff from Ring doorbell, when he just got going, he had sold a ton of stuff. And I built a little reference design for a doorbell type cameras. I mean, it saved him days maybe, but you know, you know, but I think we were in aligned in the thinking of the market. I got to meet all those people, the founders of drop cam. So I had a little bit in my head, this like, you know, kind of waiting for this idea, because these guys are building these incredible businesses, incredible brands, basically built off some commodity hardware, but with some amazing software. And it was working and I said, Oh my gosh, you know, the digital frame, remember, we talked about those things and they kind of didn’t have, you know, it didn’t really work. It just didn’t work the way people thought of it. And maybe it’s time. And maybe we could use that as the sort of anchor point as being a simpler entry into people’s lives. Right. You know, hey, you know, you’ve heard a digital frame like what if it did this and this, you know, maybe someone gives it a try. And it worked, you know, it, you know, we were able to kind of get on people’s map radar. Yeah, like how you frame this that we have this, this somewhat unintelligent, a digital hardware and we just make it useful with all the software addition and the design and the functionality in mind. When you, when you go run Silicon Valley, and I experienced when I talked to VCs and you pitch a hardware starter, you usually get a lot of empty stairs. There is some VCs who love you because they’ve been very successful with hardware, but generally they say, well, this is not for us. How did fundraising work for you? Because most accelerators that I know, they don’t even accept hardware startups. Yeah, I don’t, you know, I don’t know what it was about us that kind of worked because we in a sense, I mean, I still find fundraising to be incredibly hard, incredibly challenging. No matter what, even though we’ve raised some good money and we’ve made some progress, but no answering your question, one for short, this is a piece of software, right? Let me give you a couple of examples. I guess the other advantage, you know, ring, making tons of money, right? You know, successful, probably profitable to drop cam, same sort of thing. There were some examples when, you know, as they were exiting them, we were getting started. So maybe those were some true points, but I actually think more so, to be honest with you, and this actually helped me, and this is kind of a funny one. I used to have a little bit more of a story that was like, IOT meets AI, right? You could imagine trying to use these buzzwords, right? And, you know, some people might squint and be like, okay, it’s broadly directionally correct. But reality was, it wasn’t authentic. It really just wasn’t an authentic story. So I started talking about like, you know, like a character like me or somebody else. And I was like, well, you know, actually the first slide in my deck is like this guy, Alex, he just had a son. Jake, he lives in Seattle and his parents have spread out across, and sisters across the country. And gosh, it’s such a mess. They’ve got a little bit of email. They’ve got a text message chain, but his dad’s on Android. He’s on iOS. Right? And I just, I basically told the truth, or a person who’s truth. It’s my first slide in my deck. And then everything started getting easy. Because people would just say, that’s me. That’s me. Like, we were really solving a problem. It wasn’t just some bogus bullshit, right? Like we built it because we were solving a problem. Turns out that a lot of people have the same exact problem. So once we kind of, I would argue, we got away with a little bit of the sort of momentum at the beginning. But very quickly, I learned that the key is to tell your authentic, real story, and then to find the people that love what you’re doing. Hardware software, I don’t, you know, I mean, like, whatever, like, you know, it’s, it’s customers, there’s, you know, you know, problem solution, you know, there’s, there’s just a lot more brought it to it. But you’re right. I mean, you do have to be careful not to kind of lean into the hardware too much or, or even give off that you’re kind of on this hardware journey versus no, no, I’m, I just want to reassure you, my software roadmap, you know, here’s how much I spent on software as much as it’s hardware, you know, and even as we, you know, kind of talked about before the podcast, the thesis was, Hey, look, man, those guys in China are taking the cost out of this stuff and building high quality stuff. And I want to take advantage of that inefficiency or whatever you’d call it. Because all I have to do is dump my software and I tell them what to do. It’s not that simple. But you know what, you know, our second product, our second generation, we kind of learn the ropes a bit better. It really was that simple. I could tell you, we’ll talk about that later, but like it literally was once you figure it out, it could be really powerful and quite simple to get stuff done in China. Yeah, I think something has changed. And when I look back, there were a bunch of people who did DVRs. I know a lot of people might not remember what that was, but it’s something where you recorded digitally, the TV channel, the TV signal. And that was a big deal about 20 years, 15 years ago. And it was, if you made this hardware, you could do it all over the planet, but most people would eventually be drawn to China and say the difference in manufacturing this device was, it was 20% cheaper in China, still enough to make the comparable product and be the most competitive in the marketplace, but it wasn’t a 10x. What I feel like what we are getting to right now is similar to what we’ve seen, the software, you only do it once, you develop it once, you code it once, but then you can run it unlimited. Times with CPUs are so cheap and computing is getting cheaper by the minute. And it seems like we are now seeing something similar that’s happening in mostly China, but everywhere around the world, in factories that you, you always get a 10x. And I think we, we, we’re used to, and we see this especially in electronics now, and maybe this also plays a role, what Apple is doing, because suddenly I feel like Apple, they didn’t have a lot of core innovation for the longest time. So it was always slightly better to iPhones, but it wasn’t never really a quantum jump. And now suddenly you see the M1 coming out, which is like 10 times faster than the Intel CPUs for probably the same points, much less. We see this with the new iPhones that seem to be very popular, at least in terms of buyers. It seems that it’s something effort, and I don’t know if you can confirm this, but we see the software eating the world is now also software is eating hardware, or hardware is behaving more like software as, as something that you have, if you can figure out whether the man could be, it’s almost free to make it, which is quite complex. Yeah, I’ll give you, this is a perfect time for this conversation. Now, I mean, there’s obviously a new ones to that. You know, we made our first generation, we’ll just call it loop one, which was a sort of retro looking device. It had knob, it has knobs on it. So it’s kind of like that cool curves, you know, we could post up some pictures of it later. And then we recently put a loop made a loop two, which we just launched. That’s what you’d see on my website today. You won’t see a reference to my loop one, because I just want to, you know, focus on that loop two for now. That the loop one almost killed us, right? Yeah, it’s unbelievable product. Oh, it’s so good. I mean, it’s most unbelievable, literally, you know, the top designer at Apple, one of the top designer at Apple, like has like five of them in his family, like, you know, it’s Scott Bellsky, one of my customers, I hope he’s okay me talking about it, but he probably has five or six, you know, distributed, he told me he hasn’t turned his off in a year, right, you know, it’s in his kitchen, you know, I mean, it was, and my point of that is we kind of went over the top of it. We kind of were inspired by Apple and the sort of character and all the little, every little detail. And the reality was the sort of reason why I’m going to bring up the story is I didn’t have to deliver that much in order to solve my customers problems, right? Like, because a lot of it was in the software domain, right, the sort of the issues were a lot in the software, the things that solve the problem, like, you know, how far did I have to go innovate on the hardware, let’s say, in order to, one, get the customer to buy it, and number two, to kind of delight them on a daily basis. So I kind of feel like we overshot and that’s where we ran into trouble, where I was trying to ask people in China to do something that they hadn’t done before, you know, in this specific way, right, you know, and remember there might have been somebody that did it before, but I didn’t talk to that right person, like sometimes there’s some inefficiency there. Where do you go, let’s say you want that design, or you want a competitive design and you want a couple of bits, do you go to Alibaba, or where do you actually go, how does this get started? Yeah, good question. I mean, you could, there’s multiple ways of doing it now that I know, but I’ll tell you what I did before, right? I, you know, knew people, I’d been traveling China myself for a while too. And that was, that is, and was an inefficiency, and more so in the past, you know, five years ago or so, where, yeah, you’re right, like, who do you talk to, man, right? So we actually partnered with a company called PCH at the beginning, and that was short lived, but it kind of gave me a sort of insight into, you know, how to get these folks. And, you know, we, I was really kind of networking, to be honest with you, like, who do you know, like, you know, who’s a great person that does this? And you know, we all did it kind of poorly, I would argue, right, we, we got it done, but you know, it was way harder than it needed to be. He chose the right person, maybe made some design tradeoffs, were a little bit less, you know, extravagant, you could have just kind of pushed out the product faster and cheaper. But, you know, these days, you know, that people are starting to solve that, they’re creating sort of marketplaces for the different manufacturers. I would not look, I wouldn’t, you know, if somebody were doing a product today, I would say, hey, look, go into Alibaba and find the person that’s doing what, you know, from a hardware point of view that you’re doing the closest and, and so it’s not a variation of what they’re doing. And see if you could start there, start with those conversations, right. And then the second piece is try not to veer too much, right, you know, assuming you’re doing the same thing we’re doing, you’re going to be innovating in the hardware space. Let them do it, you know, you put your design stamp on it, takes you three months to come up with a sensational design, make sure it’s manufacturable, like you just, you don’t have to be a genius to kind of figure this stuff out. But, you know, get, get into their zone and kind of meet them in the middle, and then let them run. And, and I’ll just give you the sort of example, like our first product took us probably 18 months traveling to China, a team in China, all this stuff. I actually had the drop cam team operations working for me, like, it was kind of incredible. And we got it out, but it was like, woo, that was incredible, hard. 2020, in March, I was trying to make our loop two, which is sort of be our millennial edition, you know, millennials are having kids. And, you know, that was what I would argue we kind of missed with the loop one was, you know, oh, wow, you know, these famous people use your product, like how, you know, how exciting. And then you’d go to like, maybe an average person and they’d be like, looks a bit kind of high tech. And I don’t know if I want this in my home, you know, particularly women. What did that happen? Yeah. Yeah. You know what I mean, though? I mean, obviously it was a broad demographic, you know, but like, you know, it was something it was like, Oh, wow, these, you know, 30 ish people having kids women. And we just realized we just didn’t do a good enough job, figuring out what they wanted listening more. And anyways, that’s what led us to this loop two. Number one, we were like, Hey, look, we never really took advantage of the cost as much as we thought about, you know, if we do it again, we could find this really nail that cost structure that kind of again, you go into their zone, right? You kind of stay on what they’re doing. You don’t try to do any magic. They being China, you’re trying to partner. But but also just this, you know, the concept of the design being friendly to and fitting with the millennials, or you know, these moms might want to use. And so I just kind of the example was I was pitching an investor like March 15 was like the last time in New York City. And I laugh about this because, you know, I’m in New York City, we’re in a cafe March 15 of last year, right, 2020 of 2020, right? And, and we’re all washing our hands, but we’re like three feet away from each other, right? We’re like, don’t touch my hand. Sorry, fist bump, but like breathing all over each other. And I’ve got my laptop, but I’m in the cafe pitching one investor. And I turn to the women next to me and I say, Hey, which one do you want? I’ve got six of these, I kind of explain what we’re doing. And they’re like, D, D, I like the, you know, what is the fourth one? And it was clear, I kind of like slapped my book down. I told the investor, yeah, it’s D, everyone loves D, right? Like, we’re going to make that. Fast forward, I can’t travel to China. Fast forward from March 15, December 15, I shipped about 500 of those units to the market. I never went to China. I didn’t have anyone working with me like to help me. It was just me, my team and the guys that are building it. And the guys and girls that, you know, they’re actually quite a dynamic team down there, which is great. Men and women. But they, they crushed it. And it was because I was a great partner and it cost me, I mean, literally, maybe like $25,000 out of pocket. Like, people like, oh, hardware costs so much. I’m like, talking about like my software bill in a month is, you know, bigger than these. So yeah, it seems like there’s something big and underway when you look at the hardware costs. So is the retail price for, for a loop is still at 250. So it’s still the case. No, 179 loop is yeah, 179 is the sort of sticker price of our loop. And obviously, so sales all the time. Yeah, hopefully it can be very honest with us. What is the obviously depends. So you make $100,000 devices or a million devices. I don’t know if you did the calculations. What is the hardware cost of this once you made a million devices? Yeah, great question. In fact, this is, this is another piece of the puzzle we learned when we were making loop two, I told you the requirements, right? It was like, number one, I wanted to, to be fitting for new millennials or having kids, right, particularly millennial moms, that sort of thing, women in general. That’s number one, right? The design kind of has to fit them, the features, like integrations, how it works. That’s number one. Number two was this. We had just figured out a subscription model, right? So we were able to command, which is great, kind of like Ring doorbell, three bucks a month from our customers for an array of cloud services, you know, there’s backup, there’s the handful of other things, but you know, basically, it’s like a backup in the cloud plus some other cloud based services. And so you’re giving away the devices you’re like, yeah, that’s where you’re leading to. Yeah, that’s what I’m leading to. Right. So, so, so I, so I basically found it. So that’s three bucks a month, 36 a year, right, roughly, right. And I said, Hey guys, so here is the other thing we need to make the loop needs to cost 36 bucks to make, right. And I said, so if we get our subscription to equal the then we could potentially give it away for free, you know, at the limits, if you wanted to, and start here, but when you get you selling it for 170, are you planning to literally give it away like the Amazon fire? Well, these things are things you don’t want to jump right into, right? You want to actually iterate and test because remember, there’s a price sensitivity that goes along with this, maybe free, maybe you get the same demand at $99, then you get for zero, right? Because not everyone needs it, right? You know, it’s not like, you know, well, all we say is the software products, it’s often in a more specialized software products, it’s as complicated and as expensive to get a free subscriber. So to speak, if it’s a real subscriber, right, then to get a paying one, if it’s $36 a year, I think it’s almost the same thing for most things that I know of, right? And so, but, but again, it’s really just kind of math and testing, right? Like so, you might be able to say, as an example, so there’s a bunch of variations on this, right? One might be, you give a steep discount at the beginning, so $179, then you drop it to $99, huge savings if you sign up for my $3 per month, right? Does that shift your revenue dramatically from hardware to software? Does that give you a higher takeup rate experiment? That’s just an experiment, right? Then you could potentially drop it further and further and see where that line dropped. And I got this from Dropcam too, because they had, remember, they had $7 a month, $30 a month. And I believe we can go up the ladder too. We’re just trying to get creative and learn a bit more. That’s not exact science right now, why $3 a month? But ultimately, I saw them and I asked the founders, I’m like, so why didn’t you give it away for free? You were making such a description, then explode and he goes, we don’t really have a great reason. We were actually really thinking of doing it. And I hope I’m not speaking for me or too much, but he said he felt that he was a bit of the conservative voice in the world and that the VC wanted to do it, Greg wanted to do it, but that he was kind of like, hey, guys, we got a great thing going here. Like, why are we going to screw with this growing fast or profitable? I don’t know how probably were, but certainly your economics worked and all that. And so it’s like, why screw this up? And he’s like, looking back, maybe it was the right call, but then they got bought by Nest and it all didn’t matter. But Brian, help me again, when you think of big numbers, what can be the price of such a device that you’re making? Obviously, it depends on a bunch of factors, but can you make it say for $20? Is that realistic at all? Yeah, I would say a variation of what we make, maybe making it a little smaller or something like that. I think at the margins, maybe 25 or something like that, maybe as low as 20, you are impacted by the display cost, which is the biggest piece. But you still have to have, there’s a limit in terms of like, there has to be the connectivity chips, there has to be all these things that don’t go away. But yeah, it’s getting really, really, really cheap. That is so cheap. And I assume it’s a 720 display, that’s the resolution. Yeah, it would be something like that. And again, like our displays, people are like, that’s amazing. Look how incredible that, like lifelike, it’s like three year old iPad technology, right? And, you know, or longer. So it’s been depreciated, you know, everything’s gone. But from a five foot, we’re a five foot experience versus like a, you know, a three inch experience. So, you know, the pixel resolution does not have to be anywhere. It’s not even on the map. No one’s going to be able to see the resolution or something like that. So yeah, no, it’s getting there. That is quite incredible. I mean, I can see a ton of different businesses that have a similar problem where we didn’t realize how cheap the technology has gotten due to Moore’s Law and all the investment going in from the iPhone side and what Samsung puts in. And then we, on the other side, realized that a lot of this technology is too hard for users to set up, like, you know, drop cam and what loop is doing where you could do this with another device, you could buy an old iPad off eBay, right? And could do it and set it up for your parents, but it would take forever. So if nobody would do it, yeah. And I think there’s a lot of those use cases where, where a lot of people are just, and we have these TVs now, you know, TVs have all these amps and they have so much connectivity, but getting it to work is, is, is just menacing. And you just want to press one, one button and then it should look like the old TV. And that’s the challenge, right? Because you have to download these apps and you have to get the latest update and then you can’t sign in and then there’s this long password. You spend like half an hour designing the Netflix. You know, that is, that was, I would argue that that was part of the thesis of our business as well, or maybe more of like a cultural, you know, North Star of saying, I just want anybody to just turn this, you know, you open up the box. I mean, even our, the way our instructions are in the box, it’s kind of like plug in and enjoy. Like, you know, it’s kind of, but the point is actually you plug it in, it turns on the screen tells you what to do, right? You know, and you just kind of walk through these steps. We’re not perfect yet, but we pay so much attention to, you know, how do I get this so that, you know, 99% of people of any tech stack, like ability, it will be obvious to them what they’re doing and how it’s working. And that’s really hard. Making something simple and easy to use is really hard to do. But it’s, but it’s, but as you said, you know, even that idea, remember I kind of mentioned the beginning, it’s like, there’s all types of friction that people aren’t aware of, like, hey, I got this amazing new app. It’s so cool. You just have to get everyone in your family to download it ready. It’s free. It’s free. It’s totally free. Okay, great. Instantly, everyone’s like, you know, that sounds like work, like how many phone calls am I going to have to do? And then, you know, like, who, you know, who’s going to manage this stuff? Like, so there’s friction everywhere. And that’s our, a bit of our intent is, you know, how do we pull these things away? How do we kind of subtract from these, these friction points and shave it and shave it and shave it? So it’s just so simple to use. Yeah, I mean, Apple has definitely shown us the way there. Because we’ve seen Linux phones before the iPhone, they’ve been out for a couple of years, they’ve worked kind of on a similar software stack that looked the same, they had a stylus or maybe not. But nobody really bought into them. And it wasn’t a mass phenomenon. And then suddenly the iPhone took off because they got this point, right? I wonder if we’re going to keep seeing these two paths because on one hand we have, we have labor costs, which seems to rise slowly somehow with innovation or with inflation. It doesn’t really seem to be impacted much by innovation. Maybe it’s going slower than it used to be. That argument can be made. But the hardware costs, it seems to continuously improve with Murphy’s law of it. Not Murphy’s law. Murphy’s law actually gets both because it never works, right? Yeah, totally. That’s a great one. What I wanted to get to is, but we also always want to, we want more out of our devices, right? We get this iPhone and like six months later it’s boring. We want the next iPhone because it could do more, but we don’t really know why we want this new iPhone, right? Is it, we don’t have a specific use case might or usually it’s just, we, we wait for something to inspire us. What I’m trying to say is, what do you think we’re going to see and we see this with AI that we, we have this, this, this whole software and hard respect look at so cheap and continue to be so cheap that it, at some point it will be very hard for labor to compete with this. What I’m trying to say is there will be very, very few tasks left that humans are really useful, like worth investing that much money in humans because AI and computers can already solve this. And what, what you’re, what you guys are after is you’re kind of, you have to remarry technology with humans, right? This is kind of the software stuff you’re talking about. A hundred percent. Yeah. But for lots of back end, like if you think about back end tasks and software development where you basically, you just interfacing different machines, computers are not talking to each other, humans are not involved. Do you think we’re going to run into a problem that we will realize, well, what am I supposed to do with these humans? I mean, what tasks should I give them that they are competitive at? So there seems to be millions of jobs we are completely eliminating over the next 20 years. You know, I would, my counter to that would be that I can’t imagine, I can’t imagine there being less demand for software somewhere in the stack in 20 years. And so, you know, I had actually been thinking about, you know, this other business you think about is like, you know, what’s the new factory, right? And the new factory could be a building full of, and this kind of happening in some fashions, but it’s like, you know, what’s going on in Pittsburgh, you know, the old steel town, right? Oh, it’s a building with software. And they have a bunch of people that do quality assurance. That’s probably the most people in the entire company. Kind of an entry level job, but you got to check if things are working, right? And then you go up the ladder, you know, then there’s a manager that has to manage each level. And so you get a hierarchy, and you get all these varying skill sets, you know, from the highest level architecture down to, and so I just don’t think that, and I don’t think it happens in the past where this sort of just goes away and you magically push a button and everything just sort of works. Nothing ever works like that. And so I think as we go up the complexity level, which is where we’re going, sort of up in the complexity, it just filters down with all these really hard, hard things to do. And I would even argue now, it’s like, oh, great, look at all these software tools that we have. It’s so amazing compared to 20 years ago. It’s probably more complex to make software now than it was 20 years ago. It takes more people. I’ve got the integrations and the APIs, but the APIs didn’t work and the software stack and my Amazon service, which is really depends. It really depends. I always make that example. You can literally just download a bunch of repositories of GitHub, most of them work, but if they’re well maintained, and then add a few lines of code and you’re good to go, you can have AI running for you, whatever you want to do. So this is the reason. Stitch those together, stitch those two things together and a complexity happens at the interface that is going to require an engineer three months to be, if they’re good, to figure out where the bug is and what happened, you know, and all the permutations. Now, now all of a sudden a 20 customers hit that from 10 different directions and different use cases. At the same time, Amazon servers and the Wi Fi went down, but we had 20 users come in and they were uploading and downloading at the same time. Oh, shoot. Okay. More complexity. Okay. Now, as you talked about, Hey, the product’s getting better. This is amazing. We’re adding another feature. Okay. The new feature causes an interface to the old feature that breaks it. And like so, and how do you solve that? I mean, maybe AI will be able to solve some real basic ones, but so I just think the complexity is what creates opportunity. And so if we’re getting more and more, if we’re getting simpler, meaning that the demands of it go down, the software demand for the functionality goes down, that’s a problem. If it’s going up, I think it’s just more is more. I like how you say that complexity creates opportunity. I think you onto something that I love it, but there’s going to be a lot of jobs that we have now that are just not complex enough, right? They’re just too repetitive and they will all go out the window. One thing that seems to be, I don’t know if you ever thought about that, that seems to be very resistant to this is the construction industry. You know, that’s as much making your hands dirty as we can think of in many modern industries. And I always think if we would get to a level where we can see similar economics that we now see in hardware and definitely we see it in software, anything that’s been around in the last 30 years and somewhat popular, if we could get similar economics into the construction industry by literally, it doesn’t have to be an intelligent robot, it can be a drone can be several different devices that live in the physical world. We don’t have a lot of those yet, but I think we’re getting more. Then we would bring the economics and I think healthcare and construction is kind of the only things left with huge inflation because we just can’t bring them in from China or build them in a little. Yeah, they’re not fun. Yeah, they’re not done in Silicon Valley for free and we use them for free like most of the software services. Now, if we could export the same elements of the economics to these industries, healthcare and construction, I think we all live in this utopia world that a lot of people now bring in. And I think this is a millennial thing. Think about that a lot is you want kind of everything for free and you reminded me with your voice and they want healthcare for free and you want rent for free and you want everything in your life for free and you basically just sit there and say, okay, today, I feel like I should do a little work. That’s kind of the ideal. That’s the dream of the millennial, so to speak. And I must say, there’s something nice to it, right? There is this ring to it, this complete optionality, there is this creativity. That’s the only thing that matters. And most industries, it’s already like that when you think of food delivery, right? It’s just like sitting yourself or press a couple of buttons and the best food in town arrives 10 minutes later and we did this with the internet. We did this with software. There’s just a few industries left and then the socialist utopia is there. The strangest is the songs. Yeah, I think, you know, I guess there’s a lot to unpack there, right? But I think maybe it does come back to this sort of complexity thing. I mean, there’s two pieces of it, right? There’s kind of like, hey, look, the things I’m interested in talking about. One is, what if we became so sort of wealthy and it was spread out that you didn’t have to work? What happens to people? And, you know, the way I think about that is that, you know, I think it’s very important for people to have purpose and to, you know, whatever that would be, that you feel like you’re being valuable, right? People kind of patch on the back and say, great job, right? And you worked hard at something. I think everyone’s felt that reward cycle. But that’s not a good argument, I feel. I know this is kind of a traditional argument, but I think there’s a lot of purpose in, say, for something that’s artistic, for poetry. Oh, I agree. That’s part of it. That make no money. That will never make any money. Right. But I’m not talking about making money. So I’m just generally talking about making sure that there’s, you know, a sense of purpose that people do stuff and whether or not that involves the salary or, you know, you can talk about the fact, you know, this wealth distribution or how it works. But also, you know, on the flip side, I don’t really go down that angle too much because it just still feels like to me, there’s always maybe the complexity factor again, like it just, I think you could drive costs out of, you know, America’s quite a rich country and that a lot of people don’t feel rich. So there’s, you know, maybe some issues there. But, you know, when I think about, I kind of agree that, like, you got these two overhangs, this healthcare thing, that if we can figure that out, you look at that, you know, it’s like a line item at my business. I’m like, how the hell can we get that bill down, right? It’s possible, probably, right? And then what does that free up? And then where does that go to, right? If it frees up and then just goes to the 1%, you know, not like a 1% or kind of thing, well, but we just know economically, if that did happen, that wouldn’t be helpful. So there’s a couple of things done back there. But also, I just think in terms of jobs and like, problems to solve, I guess, is probably what I’m actually more getting at. Let’s say there’s part of what we do, it could be boiled down to problems to be solved. You solve a problem, that’s a business. That’s kind of the definition of a business, right? Is you solve somebody’s problem at its core. Yeah, but a lot of entrepreneurs and VCs have burned their fingers in those industries because just that core innovation that pushed is a wave that comes behind you just never happened. And I’d rather create more money for the 1% and reduce our health care bills with better quality by the factor of N. That’d be better. Yeah, to make it, you know, the socialist argument doesn’t work in that sense. It’s we make everyone equal, which is somewhat true. But it also everyone ends up being really poor, just five or 10 years or not always goes down this line. So I’d rather have a real dynamic industry, but obviously it’s not there’s regulation. I think that’s one big problem. But the other problem is this, it just hasn’t happened. The technology is ripe for this yet. But when we when we look at this, this job and productivity growth, I think what happened is, and, and Eric was for saying this arena was saying this, if what’s kind of happened is, and I’m curious how you think about that, being in Silicon Valley for so long, I feel like we are not daring enough, we are not tackling the industries where we would see the impact of technology brings huge impact in productivity growth. And what I mean by this is the biggest expenditures we have were, as you said, health care, cars, can say Tesla helps a little, but it’s even more expensive than all the other cars, construction of housing of shelter, does it big line items that we pay for every day? This is 90% of our budget. Nothing has really happened in these areas. And I would even include travel, travel has, it’s not it’s a little better. But the efficiency gain from the airplane in the 1990s or the 1960s and 2020s, there’s almost the same airplane, maybe 20% less fuel. I mean, who cares, right? We didn’t see that. Oh, yeah, I, I used to. Yeah, go ahead. Mind if I jump, you know, I used to have the same argument to which I was like, are you kidding me? Like, I literally, you know, drive this fairly straightforward car that resembles the same one from 50 years ago, this combustion engine, right? This is like, let’s call five years ago. The planes are literally from like the 60s, you know, and I watch a TV. That’s basically the same thing, right? It’s like these huge parts of our lives haven’t really evolved, right? Like, oh, it’s great. It’s flatter. Okay, wonderful. So we don’t see productivity growth and that’s been a deal steam, but others have pointed it out much before is because we don’t push enough, we don’t take this absolutely software is that a huge technology, the world changing technology and the internet, we don’t push it enough to go into these industries, we should just drop all these requirements, drop all the regulation and as society come together, so to speak, go to Mars and just say healthcare can only be 1% of the GDP if it’s more something is rotten. So let’s get rid of all the regulation that say one state only or two states and they can do whatever they want. Yeah, the way I look at it is this. And I think this thesis is starting to prove out. Let’s flash back 10 years, 10 years, think of how, you know, like, we were such Luddites 10 years ago, right? And but the thesis that you might have argued was it looks really, if you look at the exponential curve at the bottom, it looks really flat, right? And then it just starts going fucking crazy. And so what I’ve observed in the last 10 years is and maybe some of it’s due to the smartphone, this is kind of, you know, it’s a communication device and all that, but it’s like, we’ve now going to a rapid deploying, we’re putting people, you know, private companies are blasting people up and down, right, you know, press a button, communicate with anywhere in the world for free, you know, kind of Spock style Star Trek communicators that are getting incredibly powerful. And so we’re now going up that Jetsons curve, right? We’re now just starting to hit these things. And it’s a compounding effect, right? It’s just a, you know, someone had to build someone had to build a bunch of batteries for this and bring that cost down, which then enabled a guy to build a car that wouldn’t cost, you know, look, kind of expensive at 80 grand, but really they were like 250,000. It’s not really even a business, right? So, you know, and then they’re even doing their own scale thing. I’ll make a, you know, Tesla’s, I’m going to make a, you know, a sports car for very small audiences, really expensive, then I’m going to make a high end sedan and then I’m going to make a medium end sedan and then I’m going to, and suddenly they’re 30 grand. Yeah, but I feel it’s still hitting, hitting the low end for it. I mean, this is maybe what the VC’s dictate us as entrepreneurs. They don’t care about ambitions, right? They care about making money in five years or less. But there’s something about the level of how we hit the low hanging fruit that’s really disturbs me in terms of what we, what my grandfather talked about. He talked about free energy. That was something he thought he will see in his lifetime. He thought about supersonic flight is going to be everywhere. There is no one road to go much slower. So there’s so many things that we just gave up in the mid 70s. Now, I wonder why nobody has really given me a good answer. Why have you just gave up on it? Because I think it’s a self fulfilling prophecy. We would have there more. I’ll be honest with you. Here’s what I thought. I think that the government is what invested these massive amounts of money that created the opportunity for that next level of innovation and most private investors don’t have that type of budget to move the needle on something that big. And so that therein lies. Now remember, you know, kind of Perkins did a lot of clean energy stuff 15 years or 20 years ago. I can’t remember when it was. It was just a little early, right? Maybe the input technologies just weren’t there yet. And obviously China as a country invested this huge amount of money to own solar panels. So they gave them away for free, drove down the cost, but they kind of, you know, bottomed out the market, which then destroyed US based innovation in that area. You know, what kind of investor is going to go back at that? You know, it’s going to take another decade or two to get the gumption up to now reinvest in some of these technologies. But I agree. The other thing I’ll agree with those look at health care. Like why haven’t we been doing remote health care for, you know, until finally the pandemic requires it, right? And it’s a way better experience, right? I think it’s a mind issue. So I think there is something going on since the 70s, especially that is, yes, the government plays a role, but I mean, we are the government, at least in the US, right? So we, it is our democratic leaders, at least in theory, they just they come go in front of us and lead us, not by their own opinions, but what they sense were the populace will be in theory of this is always true. I don’t know. But it’s different than a dictatorship. So the government is basically just an expression of what we want more or less. I mean, it goes up and down in the cycle. And I don’t know if there’s a conviction is something that the world war where we were to review this conviction of an enemy, right? But we had Russia in the 70s, or we did have an enemy, a real enemy, dude was definitely weakened already in the 70s. And that’s kind of my thesis. We don’t have we’ve lost these, these, these impulses that were given to us certainly by religion, and we lost these impulses of an enemy in real life. And we somewhat we just trundle along comfortably, which is nice. But it’s been like, you know, the end stage of the Roman Empire. There’s less urgency. There’s less urban. Yeah, right. Right. There’s let there potentially less urgency, right? There’s less at stake. You know, when the guys were up at NASA, working day after day after night and night, night, night to beat, you know, or kind of surpass Sputnik or something like that. Can’t see your family for months and months and months. There’s a lot of sacrifice involved in these incredible innovations in a short amount of Manhattan project. Like, it’s incredible. Now, again, those were government funded. So you know, you know, maybe that’s a piece of the equation. But also when I look at healthcare now, I mean, that’s really interesting, right? Because I think it was Bill Gurley talked about it where he’s like, man, I tried getting into this, like, but there’s just so much regulation, like I can’t even even if I innovated, I didn’t even know if it was going to is no telling whether it’s going to get adopted or whatever, because it’s all locked up. And so, you know, I think some of those things, even if he had some big pockets, would get scared off because of some sort of regulation. And actually just one a little connection, it was kind of fascinating. I was actually at a fundraiser for Boston based congressman. And he was like, you know, government doesn’t seem to do that great of a job. And I’m not an anti government. Like I I’ve benefited a lot, right? From from all types of government stuff, right? So I’m not really, but he actually kind of made me think about it too. And he said, you know, shouldn’t there be a lot of business people and government are there? Like, what is it? You know, what’s the makeup of these people? And so he did the math. And he said, guess how many people in Congress have a background in business? That was 4%. Yeah, four. Yeah, it’s rare. And that was probably all from Texas. And the Orleans. Yeah, probably, right. And so and so now I was like, that makes sense. These are sort of people that became maybe lawyers and and sort of it’s like a lawyer running my business. You know, I mean, you’ve got to be real a special dynamic lawyer to have all those tools. You know, but they’re debaters and went, you know, it’s kind of like fight. So it’s part of it is that I would even argue this is kind of crossing into some other territory. But like what I would love to see is that it became I was just having this conversation with somebody else recently, which was I feel like the founding of this country was like people that were talented in other areas sort of came into the government as a level of service, right? Like, hey, I’m a little bit older and wiser. I’m going to, you know, try to help out a bit and you know, not all altruistic, but you know, there’s always an ego involved in these things. But what if that was a typical cycle for us here, right? Oh, I just made some really serious, you know, things, but I just want to give back. And so now it’s a half of, you know, half of people have like a business and organizational experience. I love that idea, but I don’t think it’s going to happen. And here’s why, because I think the specialization has gone so far up. So basically what our representative democracy requires from the actors, so to speak, to be like actors, right? So and that’s what this whole debate with Trump and Hollywood was about. They’re the same people, right? So obviously Trump is playing a role that was designed for him to get him elected and to potentially be reelected. And it’s, when you’re a senator, you will, you better figure out how to be a good actor and, you know, speak in different language and you do it slightly different, but it’s very similar to CEO jobs are very similar to, but as an entrepreneur, you’re the opposite. You’re not an actor. You want to, you want to tell people what they should do, because you will never get elected. Well, yes and no, I would argue that, well, number one, we found that I’m thinking of like a guy named Harry Reid, right? I think he led the thing. I don’t know him that well, but I mean, I remember listening to him, I’m like, that guy’s the leader of the House of the Senate. God, he was not a very charismatic guy, right? These are just comedy, right? They did that, man, what do they do a day? They do appropriation comedy? Yeah, I think he was higher than that, to be honest with you. I mean, I think he, I think leader of the House or something like that. But any event, what we’re finding now is we used to think that all the CEOs were Jack Welsh guys or maybe Steve Jobs guys, shooting guns. And now you’re looking back and you’re going, you know, it’s like books like good, good to grade. It takes all types, shy people, reserved people. They’re all successful, right? At different ways, right? There’s multiple ways of skinning the cap to be successful. Now, so I still think that there’s possible to be successful multiple dimensions on, you know, on a different angle. I do think though, that we’re in a cycle of what’s getting rewarded, right? And it actually reminded me in politics. It reminds me of when Howard Stern, you’re familiar with Howard Stern? Yeah. Shock jock radio. He went on and he created this outrageous thing and he started below. You couldn’t not listen to it, right? It was so outrageous. He started to knock people off every radio station. And so the other shock jocks started jumping in and they started trying to be even crazier. They were getting like fined and lost. And so there was just this shock jock wave, right? It’s gone. It kind of, he’s a calmer guy. Other people calm down and that’s not rewarded anymore, right? There was just different models like even like sports radio maybe became more important too. But like it was a period in time that’s gone. And you might argue that you’re right. Today’s people get rewarded for that. But in a new world, in some time, 10 or whatever years from now, people will be rewarded for something different potentially, I hope. I hope so. But you know, you got to accept, I think Eric Hoffer told me this, there’s the mass movement where you will you be the author authoritarian, you’re the leader, you tell people what to do in the mass movement, but it’s a properly working democracy. You got to anticipate what people want in a few weeks from now, or maybe in a week from now, you saw this with COVID, right? So we basically all the politicians on both sides kind of flip flopped. Remember that they were like, what do we do with masks? And then the Democratic Party was all about over. So you can never wear a mask as racers and you have to go to Chinatown. And then two weeks later, they were like, if you don’t wear a mask, you’re racist. And then everyone flipped on the Republican side. And I think we’re going to see this again. Now, I think in California, especially we saw this very strong COVID response. And now it flips to the other side where everyone will be. And that was my prediction six months from now. If you have a mask on and in California, people think you’re racist because you didn’t get the vaccine or whatever is wrong with you. The opposite of what just happened 12 months ago. So that is, you’ve got to really triangulate. And I think Bill Clinton was the best that as he was, he was a genius. He really figured out how to triangulate where people will be in a relatively short time frame from now, and then get ahead of this movement, even if it requires you to just later as all your convictions. And if you don’t do this, I don’t think it’s, it will not sustainably be like that. I mean, you maybe get lucky because you have your head of everyone for some lucky reason, but then the next election is over. And I think this is what happened to Trump to an extent. He didn’t play his role good enough. Maybe he just was unpopular, but it’s the bit you take a big risk and it rarely happens. So you will never be inside it for 20 years. Now we’re going to have a rich. It seems like everyone wants to be. Yeah, yeah, no, totally. I agree with a lot of what you just said. And, you know, I mean, but I think those skills are always in, you know, certain skills are always in vogue, right? You know, to be the ability to relate to people, to predict what to say, what they want to hear, to be honest with you. That’s part of this game, right? In a way, right? How do you, that politics is about potentially saying what you, I used to like John McCain a lot, right? And I think what I loved about him was, you know, he was a straight talk express. He would say this stuff and you were just like, Oh my God, like the guy, you know, I agree with that so much, right? But that’s really going to be unpopular with some other people. Anyway, so, and I think in some ways that’s what I think Trump took that to yet another level, but could only be done through the power of incredible persuasion of personality, right? That, you know, and again, you can’t replicate. It’s like, like, you can’t be Reagan again. You know, and that has been a failure of people, right? Trying to kind of Reagan Reagan and then they kind of fall flat a little bit, because there’s only one guy. Yeah, well, I think what is the new trend is very hard to predict right now. We say we need a new thing to that people can obsess about on Twitter. So they forget about COVID. And I think it’s happening now, but it didn’t happen for 12 months. And before that, it was obviously Trump. There’s always this mega themes or the smaller themes of it kind is probably one thing people obsess about. There’s these, there’s relatively hard to forecast trends or themes that come up, where people really obsess are very passionate about. And then weirdly enough, you ask them six months later, and you’re like, look at the answer you have. This is, this is history. I’m like, no, but six months ago, you would have like, gone to two extremes to defend your position. And now you don’t, you don’t even want to talk about it. So I found this weird, especially because the same people who held these strong opinions, they, they don’t find that weird. They’re like, okay, no, but that was six months ago. And I’m like, yes, but it nothing really changed, right? Everything, you can, you can make that argument that things have changed, but not in such a short time frame. And that I think is increasing because of the information overload, we lose track of what’s actually happening. So do you think that that’s a result of the new mechanisms of social media? Right? Is that an, is that an output? So you think before, okay, right. So you’re saying that it was like this before, but maybe longer periods or, you know, maybe not as high peaks or something like that. More moderated. And it will, I mean, eventually it will peter off because we will see that people get adjusted to the information overload that is probably already in the process. And we’re pretty far in on this, but this is what created all this, the, the, the social media hypocrisy in the end, because you, you, you went on the cycle, as you said, with this, the social media itself was the theme, right? You wanted to go there and be really excited and hate a bunch of people and then go on with life. And now you look at them and you’re like, okay, they don’t matter. So, you know, you don’t get excited anymore. So you jump to the next thing. And that’s probably you have a nature and then they probably exploited it the best. But they needed a theme and they need, they need a new theme. I don’t know what’s going to happen next. Well, but, you know, I mean, but let’s even think about it this way. You and I talked about this before the podcast, but like, you know, the movie, the social dilemma, right? And, and understanding, you know, this is where the AI thing was probably the most practical use of it. And unfortunately, really, I think it has bad, you know, outcomes. But, you know, the fact that I used to think that Facebook and all these social networks are showing things that you really liked, right? And there’s a piece of that. But the algorithm found something even more powerful in our brains, right, that triggered other things, which was this sort of hate or whatever, or opposing views, right? I told you that I don’t really use Facebook that much, but it still sends me notifications. I use them as a business. So I get the notifications. It’s always someone that would probably have an opposing view to me, like strongly. And I’m not talking like a little bit over here, a little bit over there. It’s like that cousin or aunt that is just so far over there. And that’s what they’re showing. And because they know that will get me, they’re watching how long I’ll read it, you know, how long I stand that get all these cues. And I think that that is, you know, that’s not natural, right? That’s not that’s an unnatural thing or unnatural thing. That’s kind of amplifying things, which then creates more of this drama of, you know, I believe the rest of the world, I had a buddy from Boston, I grew up with these like, geez, man, how’s it going in San Francisco, like the fires and like that, you know, the people with the zombies on the street and like, you know, what about your kids? I’m like, I don’t know about the park right now, man. We talking about it. It’s like, you know, and he’s like, but, you know, it’s like people, the protests. I’m like, I don’t, I don’t know what you’re talking about. Like, well, it’s true, right? But he says, but it’s also not true, right? It’s true in the incident, but it is nothing to do with the 24 seven life that’s going on. And that but, but, but what I wanted to say about social media is it goes into what gets people to interact meaning and what they track. It’s the, they do see the, how long you look at something, but they’re really mostly interested in and likes, comments, shares on Facebook. But who does that? I mean, those are, those are kids, right? Well, I would never click on something on Facebook and say, like, why would I ever do this? And I use Facebook every day or comment. So they really, they came from this, I don’t know, 18 to 25 year old demographic and just blew it out of proportion because they don’t have anything else to matter. It’s a shortcoming of the tech, you know, but all the, the, a lot of these things are built on the power law, right? Like, remember, I said, Hey, I don’t like to put pictures of kids on, on Facebook. And when I started researching it, I realized not a lot of people do. There’s this 10% of people that go crazy doing it. And you’re like, wow. And so they fill up the feed. And, and so we’re all lawyers and they’re the doers. And that is the leverage model that makes the engagement, you know, kind of work. So it’s about power users was the year of the sociopath. That’s what we do. So the sociopath, then you go to Facebook, you play your game, you play with people’s emotions because you don’t have any. And you know, that, that character strength has really been amplified in the last couple of years. And I don’t know what’s next. What’s the year 2021? Maybe it’s not the sociopaths. Yeah, I, you know what, I still hope, I have hope that it’s kind of what we observed in that shock jock world with Howard Stern, right? Watch Howard Stern now at the nicest show in the world. Oh, it’s fabulous. Like, it’s, you know, really, I mean, nobody’s afraid of coming on, you know, he’s, and he’s talked about, but, you know, I don’t know what happened. Maybe the culture is ready for, but it kind of went in and went out. And, you know, it was, you know, you couldn’t help listening, you know, you know, to such raunchy, such unbelievable stuff. But then maybe I don’t know what happened. I don’t know what the dynamic was. It’s not fair anymore. Didn’t he go to prison? Howard Stern? No, definitely not. No, no, I don’t think he did. He’s out of role. No, he’s, he’s just making a ton of money on Sirius XM. It’s kind of like the Joe Rogan. He was like, before Joe Rogan did his thing on Spotify, right? He signed with Sirius XM to be the anchor. Yeah, I love both of them. I haven’t looked to listen to Howard Stern in quite some time. Yeah, me neither. I’m actually finding him on YouTube. Somehow they served it up and it was like, oh, whoa. You’ve got the real recommendation there. So that’s more. Yeah. Anyways, Brian, that was awesome. Thanks for coming on the podcast. We went from your start up to Facebook and the Senate. We, I think, we covered everything. No, it was great. I think it was a nice arc of the story. Yeah, same here. Same here. Hope we get to do this again. Thank you so much, Doris. It was a great spending time with you. Take it easy. All right, cheers, Mike. Take it easy.

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