This Week in Tech 532

Leo Laporte: It's time for TWiT: This Week in Tech! I have an amazing show! Buckle up, because it's going to be a bumpy night. We've got Jason Calacanis, Peter Rojas, and Iain Thomson talking about the latest tech news. Their analysis will blow you away I promise. Stay tuned: TWiT is next.

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Leo: This is TWiT, This Week in Tech, episode 532, recorded Sunday, October 18, 2015.

Guillotine Simulator

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This is TWiT: This Week in Tech, and we've got a great panel for you. All in studio. I'm really excited. We've got Jason Calacanis back, because you can never get enough Jason Calacanis, and I'm still working on the Brooklyn. 

Jason Calacanis: The espresso is delightful, thank you very much. 

Leo: Short and tight. Also, he brought along an old buddy of his. I think you met at Engadget, right? Peter Rojas.

Jason: Yes, Peter Rojas and I, we created a gadget together. Cofounders. He did 99% of the work.

Leo: What do you do these days?

Peter Rojas: I am doing investing for Beta works. 

Leo: Nice.

Peter: I'm their west coast ambassador. 

Leo: Jason was telling me that journalists actually make great angels because they get access to all the deals. 

Jason: And you know how to question people.

Leo: You stop being a journalist when you do that. 

Jason: You can't be a journalist and cover the companies that you're investing in, but what's great about it is if you have an inquisitive mind, you know what questions to have. As a journalist, we all know how to sort through the BS and the PR nonsense. 

Peter: I know how to tear things about. It's surprising how many founders you meet who are raising money, and they're conditioned to think you go to meetings and you get a check. 

Leo: That actually makes sense. Somebody who has reviewed a lot of product would be a much better person at figuring out what the next big thing is. 

Peter: My entire career has been about what's the next exciting new product or company. Intellectually it's a good fit for me.

Leo: And then we've got a couple ink stained wretches here. You're ink stained, I'm just stained...

Iain Thomson: My fingers are burnt from the keypads that I hammer away at. 

Leo: Iain Thomson from the register. Great to see you! And we don't have anything to talk about, but that's OK. If there were news, it wouldn't be nearly as much fun with you guys. I'm a little hoarse, because we were just defusing bombs for the last 45 minutes. 

Jason: This VR headset, I have to say, VR is going to be a legitimate platform. It's been 20 minutes of VR. Just all kinds of different headsets. 

Leo: I remember in 1992 and they had an attached big headset and we were flying on a pterodactyl. It was disorienting and weird, and mainly you thought no one is going to choose a giant five-pound headset and do this. 

Jason: And no, because of these, the sensors have made it possible. 

Peter: I picked up the Gere VR. I had a day when I was meeting with a bunch of VR companies and all of them were doing demos on Gear VR.

Leo: The Gear VR doesn't have any electronics on it at all! 

Peter: The headset with the lenses, but the screen and electronics and everything is all off the phone. 

Leo: Samsung makes it. $199. Currently have two, one for the Note 4. One for the S6. The announced at the Oculus conference that they were going to make a 99 dollar one that would fit all their current models.

Peter: Yeah. And it has the Oculus software.

Leo: Oculus was based on Galaxy, wasn't it? The original Oculus.

Jason: What would happen was I heard from the inside was Oculus needed screens from the Samsung folks, and they were like, "Hey. If you want screens, you need to give us your technology to give this consumer thing out of your phone." So the Oculus people didn't exactly want to do it, so they did that. They're not going to need the Oculus for much longer.

Iain: I think the thing at the moment is AR is going to be much bigger. Trying the HoloLens, I was very excited. With the right application, that could be really good. My problem with VR is you're just too isolated. You can't move around. You can't concentrate on anything other than what's on the screen. It is very useful in certain circumstances.

Jason: For gaming. 

Leo: We were playing a game called "Keep talking and nobody explodes." You're defusing a bomb. One person is wearing the... It's actually clever because nobody has four VR headsets. Although we've seen demos where two people are in a VR space, it's a non-trivial thing to do. You're looking at this bomb and the rest of you guys have a printed manual and you're trying to solve this puzzle without seeing the bomb. It was fun! 

Jason: It's like if you were actually defusing a bomb and you were like MacGyver in a room and you had a radio and a walkie-talkie. It's like if you had to land a plane and you were talking to the control tower. Pull the Yoke, what's the Yoke? 

Leo: As you can see, these bombs get very complicated. 

Jason: We turned into 12-year-old boys. We didn't want to stop to do TWiT. 

Peter: It's a high stress situation when you're doing it. I was terrible at it.

Leo: What you see is that VR isn't necessarily what you imagine VR to be, which is an immersive environment that you're running through and shooting people. It can be a very interesting use of VR. Augmented reality is where you're still seeing the world around you but stuff is super-imposed upon it. I can imagine some very interesting, not just games, but obviously, AR is more about UI. Right?

Iain: Certain things, I'm amazed Disney hasn't got bigger into AR. 

Leo: Have you seen the View Master yet? This thing is amazing. 29 bucks. It's cardboard. You get a disc, and you put the disc on the table and then you put your phone in the View Master because it's cardboard and then you look through it and it is AR. On the disc, 3D animals appear. It's for kids, but it's very much a game. We've got one. I guess I could put my... I don't want to distract you. I guess I could put my S6 in here and you could play with it. It's kind of spectacular. There goes the disc. The disc doesn't actually do anything. It's not coded or anything but I guess the View Master...

Iain: It's hearkening back to when I was a kid and you had the thing that you pressed and it cycles through.

Leo: You still do it! It's got the thing and everything. What is wrong with you guys? They're bringing me all this stuff. 

Peter: I watched the Democratic debate in VR. 

Leo: I did too!

Peter: To Iain's point earlier, my point was that I couldn't follow or Tweet while I had the headset on because you can't multi task. You have to pick one or the other.

Leo: Wasn't it weird though, because at first I thought are you going to be in the back of the auditorium, and I'm looking down. Obviously the VR camera is just a ball, because nobody knows that they're on camera. I'm looking down and there's a guy looking at his phone. I can read what he's doing. I look to the left and there's a cameraman who is chewing his gum and waiting for the thing. They don't realize... You've got a few hundred people... me and Peter Rojas anyway. 

Peter: We may have been the only two people. 

Leo: Then the debate begins and you're backstage. It's a lot about how it's being produced because you see the steady cam guy. I saw Cheryl Crow tucking in her shirt getting ready to sing the Star Spangled Banner. What I do like about it in theory is you can watch the debate and look at the candidates as you choose.

Peter: That's what I liked about it; you didn't have to focus on the candidate who was talking, who was on camera. You could look at the body language and see what other people were doing. 

Leo: Were you able to wear it the whole time?

Peter: I only watched it for 10 or 15 minutes at a time. 

Leo: You tire pretty quickly. 

Jason: Is it the weight of the headset?

Peter: Not the weight, but the resolution is still low enough that it starts to create eyestrain. I don't get seasick from it, but you get a little bit of a headache. 

Jason: The reason this is working now is because the resolution has gotten better and the processors and the GPUs have gotten better. The Oculus is going to take two GPUs and video cards to properly do it. I heard 1500 is minimum game rig. 

Leo: They said 1500 for the Oculus Plus the minimum gaming rig you would need. Under 500. 350 to 500. It's a thousand dollar gaming PC, a 500-dollar Oculus. By the way, this isn't till maybe next quarter.

Peter: They expect to ship Q1 of next year. 

Leo: They say they will.

Peter: What I've heard from talking to people in the Industry is when you can get to 8K displays, that's... duel 4K would be the ideal. It's a lot, but we'll get there eventually. Not next year. 

Leo: Iain, you said when you put on the Gear VR that it had the screen door effect. You really see those pixels. 

Iain: It was the same when it first came out. They have this thing where you're going over an African safari, ooh. Pixilated elephant, I'm going to pay to see that. 

Leo: Was the HoloLens a better resolution?

Iain: It was a better resolution but a much smaller screen area because with the HoloLens you're looking at a little patch in front of you, which is great. The key thing was that you could actually knock certain things out. Leave a computer monitor on for example and have a Martian landscape with a Samsung computer monitor in front of you. If you could get a set of AR glasses, which could switch to VR, that's going to be the...

Leo: By the way, you can do that with a Gear VR because it has lenses.

Peter: It has a pass through. 

Leo: Actually you can use the camera in the phone. 

Peter: It's a little disorienting, but you can do it.

Jason: Taking it off is just like...

Leo: You pointed out another problem that I never thought of. Transition from the VR world to the normal world. 

Jason: You really do feel like a shot when you take it off. Your brain is literally fooled. In the tests if you try to walk off a cliff, it's hard for people. You feel physiologically like you are falling. 

Peter: What really freaks people out is the guillotine, like you bend over...

Leo: Guillotine simulator. There's good news and bad news, you're going to be Louis XVI, the bad news is you're getting your head chopped off.

Jason: You might not like the ending. Game of Thrones, it's going to be very interesting. 

Leo: Microsoft said at its announcement a couple weeks ago that it's going to be the first quarter of next year and it will be developer kit. It will be 3000 dollars and it will not look like the video we're showing on the screen. I think this is unfair, we've mentioned this before. To show this video at the demo, when in fact, you're not seeing that, are you Iain?

Iain: They displayed it onstage. I was in the audience trying to find a wifi signal that worked. It's one of those things where they've shown how it could look. I've got to say with that; it's not that far ahead. What you're looking at is a very basic game, very basic graphics, and once you've done the work of mapping the room that you're in, then it's very easy to set up. You'll be seeing an awful lot of clunky stuff in the meantime. 

Leo: You know what? The first PCs were pretty clunky. 

Iain: First mobile phones were.

Leo: First HD TVs were 10,000 dollars for a 50-inch display. This is all early days yet.

Iain: There's a couple things they have kept quiet about HoloLens. Battery life is going to be the absolute key thing.

Leo: The whole thing is on your head. Right? There's no wires. There's a PC in this visor. 

Iain: Every time you pick up the visor, there's no real calling slot. I don't know how they've managed to get more than 15 minutes battery life out of this. Apparently it does do a lot better than that. It's going to be some work and that kind of thing only works if you're untethered because the whole point of AR is you can move around the room and you can do various things and pick up various things. Early days yet, but I think it's going to be a winner.

Leo: Here's the good news. It's going to happen about the same time that a car can drive itself. So I will be able to sit in a car, play some games and I won't have to worry because the car will be driving itself.

Iain: But you've got the legislative problem. Automatic cars are only going to work if you don't have to be sitting there waiting to take control.

Leo: Did you watch the video of the reviewer? You're a Tesla owner. Did you get the autonomous vehicle thing?

Jason: I have the first Tesla of the Model S. I didn't have the sensors in mine. The sensors came in 2014. 

Leo: So what are the sensors?

Jason: I think it's lidar.

Peter: Elon is anti-lidar. 

Leo: The challenge is with the Google autonomous vehicles is they have to have the road mapped before they get there. So that's not good. You want a car that can go anywhere. This is the guy with... let's listen in because he's clearly terrified. 

Peter: He's also driving in Manhattan. 

Leo: He's driving in Manhattan traffic! Now I've got cruise control that I can use in stop and go traffic. I stop the car, and it keeps its distance. This changes lanes! Unbelievable. 

Iain: Don't you have to manually check your blind spots?

Jason: Technically speaking, it's to assist you, but you're not to take your hands off the wheel. 

Leo: Yeah. See, there it goes. 

Iain: It's got to be full autonomous for it to work. Fall into the backseat and have it take me home.

Leo: To answer your question, legislative hurdles, the initial step is. It's like an auto pilot. The pilot doesn't get to leave, you must stay in the driver's seat. It's assist. This guy is driving and it's driving for him. In fact he had a hard time. He put his foot on the break unnecessarily because he couldn't stand the idea that the car was going to stop. He was afraid it wasn't going to stop. 

Jason: Supposedly in the tests they've gotten from Los Angeles to Seattle, they're figuring out the five and the 101. Highways are super easy, which is where you want it anyway.

Leo: No. I want it in stop and go traffic. That's the worst thing in the world. I don't mind driving in a highway.

Jason: How often are you off the highway? On the highway you have these long stretches, 45 minutes, streets when you're in town, it might be a 15 minute run. Not as necessary. I'm talking about commuting.

Leo: I'm talking about commuting too. I used to commute to San Francisco and I had two hours of stop and go traffic. That is not fun.

Jason: How much is highway though?

Leo: It's all on the highway but it's still stop and go traffic.

Jason: Stop and go on the highway is when you need it. When you're in town, I don't know if you need it as much. But this is going to go much faster than a lot of people think. A lot of cities are in competition to get these autonomous systems on the road. 

Iain: Nevada is making a big play for it.

Jason: Nevada, New York, California. A lot of cities are engaging this because they see it as a huge economic opportunity. As commutes go up, people's depression goes up. Commutes are terrible for people and it's an impediment to the economy. Traffic can go down to, if you reduce 10, 20 % of traffic, you don't have to build a bigger highway. Up here in Petaluma, they've been working on this goddamn road for how long? 

Leo: Two-lane stretch that kills everybody and they've been trying to wind it and it's taking a decade.

Jason: And they did a decade in Los Angeles. Everything takes a decade.

Leo: And as soon as you widen it, traffic goes up, and you're as bad as it used to be.

Jason: If it goes faster, more people will travel. This could be really interesting in a lot of places like cities. We have this issue of people, who are firefighters, teachers, can't live in the cities any more because rent has gone up. People want to live in the city, so if we can make commuting faster either through ride sharing or the cars on the existing highway system, that is going to be really profound and keep the economy moving. 

Iain: What it needs is for you to be able to do other things while you're driving. That's going... otherwise we're just wasting time.

Jason: Which is Google's entire push on this. They look at the windshield as the next screen and that is why YouTube, it sounds really futuristic, but if they make the autonomous car work, YouTube's minutes watched per months and the advertising is going to go up 5 fold. It's going to be ridiculous. 

Leo: Mercedes is coming to town with that concept, autonomous vehicles. They invited you to go for a ride. That thing looks like a living room. Google took the steering wheels out. 

Jason: They have a button. Abort. 

Leo: You know what? That's the problem with this guy. He couldn't do it and it was making him anxious. Not that I wouldn't be without a steering wheel. 

Peter: I can't remember if it was in the Atlantic or the New Yorker, but when they introduced the first elevators that didn't have conductors, people were incredibly uncomfortable, and people didn't want to get in them. They didn't trust an elevator without someone manually controlling it. They had to change the design of elevators and get people used to the idea that you would press a button and it would go where you wanted it to go. 

Iain: Same with the underground. When they introduced computer-controlled trains, people refused to get on them because they couldn't see a driver in the front. 

Leo: I don’t' like riding the monorail in Vegas because there's nobody driving that thing. I don't know what's going to happen. It could take a left when it should take a right. That's terrible.

Jason: Yet you trust the monorail with the guy who is getting paid 18 bucks an hour to pretend he's paying attention. 

Leo: When you bought a phone, it actually came with a dialer human that would dial the phone for you... I'm joking. 

Iain: I was going to say. 

Jason: A building I lived in in New York on the West side Highway, remember the building I lived in, it had manual operators up until 2004. 

Leo: That's a luxury building.

Jason: No it's not. It was a warehouse kind of building. They just hadn't upgraded them. 

Leo: Cheaper to get some guy.

Iain: World's most boring job though. 

Leo: Only go up and down.

Jason: One of the biggest parts of the economy for a period of time were operators. This was a huge industry. 

Leo: At one point they said if the phone network continues to expand at the rate it is, AT&T will be employing every woman in the United States to do the switching. That's when they came up with electronic switching because they couldn't... humans couldn’t do it.

Jason: And employment seemed to go on. 

Leo: Somehow we survived. You may be able to drive an autonomous vehicle in Las Vegas, but you can't bet on Draft Kings in Las Vegas. 

Jason: The party is over now.

Leo: Is the party over? Boy. They're taking huge... there's two of them right? There's Fan Duel and Draft King. Fan Duel started, raised some money, Draft Kings came out of nowhere, raised hundreds of millions of dollars, including hundreds of millions from Fox and NBC Universal. Fox said we'll give you 300 million, but you have to buy 260 million in advertising.

Jason: You know what we call that? Round tripping. It was big in the first .com wave. Ale Well got a huge investigation because people were doing these huge portal wheels. You give me 200 million, I invest 175 million in your company. We both put it on our books and then the public buys the stock. 

Leo: That's terrible.

Jason: What just happened? It's a shell game. This has big ramifications.

Leo: The good news is these guys are going to get punched for this investment. Draft Kings is going to be made illegal.

Jason: Nevada, they don't play around. There's two issues. One, is it a game of skill or not? There is some skill involved. Then there is the climate of gambling in the United States. We live in a great time of change where a cannabis legislation, we have 30 states where medical is good?

Leo: Just a matter of time.

Jason: Gambling will be the next one to fall. 

Leo: You think so?

Jason: Sure. Because if you look at the major sports leagues, it's going on anyway. It's an exact parallel to the drug trade. When it's underground, it's easy for people to get ripped off. It's easy for people to get murdered. 

Leo: So when the numbers game went public with the lottery...

Jason: In the UK, it is completely legal. You can gamble on anything and society has not crumbled.

Leo: I saw two smoking barrels, and that did not look like a safe environment. 

Iain: Come on. It's always amusing when Americans come to a British pub and they see a fruit machine in the corner and what is that doing here? They're just drawn to it. This is so illegal. Wow. Seriously?

Leo: I think the FBI is investigating, I think you'll see congressional investigations, because of the equivalent of insider trading. 

Peter: That's the part that I find the most concerning and interesting is that these two big operations, and people who work at one have so much information about what people are actually betting on and what they're doing and then they're leveraging that information to take advantage on the other platform. 

Jason: Gambling is about getting an edge, and it has been for all time. When you play poker, I'm trying to get a read on you. I'm trying to have any edge I can. In poker, the biggest edge that I know of, I play in a lot of these big games. How tired are you? Did you just get in a fight with your spouse? Are you exhausted? How are you doing? Are you rich or are you poor? How expensive is that watch? I'm looking at those issues to see if I can get an edge on you. Right? Now you have people who are working inside of a company and these are people who are drawn to the gambling business, and then they see an edge that they can get over another person? That's why it being legal is so important. The whole reason Jimmy the Greek and all these people came to prominence, they were basically setting the line. The whole idea behind setting the line is to even out the money in gambling so one side doesn't take too much. 

Leo: But this is peri-mutual, so this is a little bit different, right? 

Jason: It's an information edge that nobody else has.

Leo: Explain this to me. It's like the Sting where they delayed the telegraph. 

Peter: It's not exactly like that. If you work at say Fan Duel, you can see an aggregate what bets people are making and you use that information to bet at Draft Kings. 

Leo: Does it give you an edge in picking the team? I guess it does... 

Iain: You can see what everyone else is picking, so if you go for lesser picked, you've got a better chance. 

Leo: That's what the ads imply. You could find that secret guy that's going to perform really well this week, that you can win.

Jason: If you know where the money is moving, you can know where the edge is. 

Leo: There's so much money. Draft King says they're going to pay out 2 billion dollars this year. 

Iain: That was one of the shocking things.

Jason: Think about it. You have over 300 million Americans...

Leo: That's more than their capitalization.

Jason: The people I know who bet on sports bet every weekend during the football season. Every weekend. You're talking about a dozen weekends, people are betting, probably on average 50 or 100 or 200, which isn't a lot of money. Based on minimum wage it's a couple of hours a week. People blow off steam. In aggregate, this becomes a lot of money. The tens of millions of people are doing it and are spending a thousand dollars a year, you quickly get to billions, which is why it needs to be regulated, it needs to be sanctioned, and they need to audit it. 

Leo: It's not a morality issue.

Jason: It shouldn't be. Just like marijuana and cannabis shouldn't be a morality issue. Objectively looking at science, alcohol and cannabis and MDMA and LSD, if you put all these drugs together, heroin meth, alcohol would be way far ahead...

Leo: In terms of deleterious effects.

Jason: Alcohol and tobacco...

Leo: Can you say that about fantasy football that it is not addictive like other forms of gambling which are illegal? Is all gambling going to be legal?

Jason: It's got to be legal. Because if it's legal, at least you know there aren't illegal activities going on in the background.

Leo: Heroine should be legal because the real risk of heroine is it's being cut or you're having to buy it in the street. If it were legal, it would be much safer. It still would be highly addictive. Just as gambling might be debilitative for people who are addicted, but you don't ban it because of that. 

Jason: Once in a while you'll have 30 people die in the same month from a bad shipment of heroine being dealt by people who aren't the most upstanding citizens. 

Leo: I was thinking Oh good. It's going to be comeuppance for Fox, because even though they played this round tripping game on us, they're going to lose their shirts because these guys are going to be put out of business. You don't think so because if you could invest in Fan Duel or Draft Kings...

Jason: No I wouldn't because they could go out of business. Look what happened to the Poker industry. What the feds tend to do is let you go for a while in this gray zone, and they build a case. Poker thought they were in the clear. All that was happening was the government was building their case.

Leo: People running poker sites are being arrested and getting off a plane in Guatemala.

Jason: It was a serious situation. They had mixed the account of the operations of the company with people's/player's bank accounts on the system. In other words, here's how we're operating and our profits should be in this bank account and the player's holding should be in this bank account. It was one bank account. Then they were paying all these poker pros a half million dollars a month... 

Leo: This sounds very much like what we're seeing with these fantasy...

Jason: We'll see if it's that deep. This is why you have to have light and regulation on it. Then everybody would be protected.

Iain: You keep expecting somebody with a middle name like Jimmy the Squirrel or Johnny the axe to come in and bring some style to it. 

Jason: Adam Silver when he took over the NBA said he wanted to make sports betting, have us look at sports betting in the United States. This is the head of the NBA which is had multiple scandals with the referees. 

Leo: But will Pete Rose ever get in the hall of fame. 

Jason: Probably not. He was betting on his own games. They said Michael Jordon bet on his own games too, but he always bet on himself to win. 

Leo: Pete said he bet on himself to win. He said I'm not going to bet against myself.

Iain: We've got the same problem in the UK with Football. Proper Football, not American Football.

Jason: When you kick around the little ball?

Iain: Yeah, I want to use a foot to kick a ball, rather than picking it up and running it. But there we had senior players throwing games deliberately, because you can make an awful lot of money that way.

Leo: There are some downsides to having this all be legal. It doesn't bring the sunlight out and make it all OK. 

Iain: Anybody can find a way to game any system, but if you do make it legal, then the vast bulk of it sticks to standards of business practices.

Leo: You want to make money? Get on YouTube and talk about the top paid YouTube stars for 2015 in just a moment. First, a word about your next Mattress. 

Jason: Casper. This is a company I missed investing in. 

Leo: This is an explosion, actually. I love the Internet, because it's clear is happening is that smart entrepreneurs are looking for businesses right for disruption. They're looking for something that's not quite working, and I can tell you something that's not quite working. Lying on a mattress for five minutes while the saleswoman is giving you the squirrelly look. You say, yeah, I'll take that one. I did that and I got a mattress that was way too hard. It was horrible! Fortunately, Casper came along and I'm getting not only a great deal because you get it direct from the factory, but the most comfortable mattress I've ever had. Some people say I don't want a memory foam mattress. This is memory foam and they put latex on the top so you get the firmness and support of the memory foam, but the comfort of the latex. Most importantly, it breathes. It's a cool mattress. It comes in... Look at this. Thi sis a queen size mattress. It comes in a tiny box and I opened it in my jammies, because I'm going to be sleeping on it. 

Jason: You committed to the bed.

Leo: It comes with a wrapper and an opener. Watch this. You open it up and it was very easy to get in the door because it's so compact but the mattress goes shoo and you've got a full mattress. I liked this so much, I got one for my kid. He's in college, third floor walk up. It worked great for him. 

Jason: Brace yourself!

Leo: Bum. Was there just an earthquake? No. That was Leo jumping on his Casper. 

Iain: You got him a mattress, not a bottle of JD?

Leo: Very affordable. 500 dollars for a twin, 950 for a king size. That's a great mattress price for a premium made in the USA mattress. You've got to go to You may say, what about lying on the mattress? What if I gave you a hundred nights to try the mattress? 100 nights. If at any time in those first hundred nights you say it's not for me, they come and get it and refund every penny you've paid. Shipping is free, returns are free. There's no risk at all. 

Jason: I like how you place the mattress at the door too. It's late, you just got home. Wow that was quite a bender. 

Leo: It's in the entry way. It's because it was the light. The light was good in the vestibule. 

Jason: They've taken out the whole retail channel here and all that money that used to pay. This is what is happening with the direct to factory movement. It used to be you had to sell your product for half price or a third of the price to somebody who then marked it up 2x or 3x. Now with these companies, they just go boom direct. 

Peter: Each chain had to have its own specific... So each mattress manufacturer would create pseudo models. 

Leo: Don't get me started on the springs. No springs. If you go there, by the way, 50 dollars off... That'll pay for your gear VR. So YouTube's highest paid stars, according to Forbes, this is not an easy thing because the stars don't say. YouTube definitely doesn't say Everybody is getting incredibly wealthy on YouTube. Forbes... You wrote a great article a couple years ago on why I'm leaving YouTube. 

Jason: I was part of the program where they gave you money in advance to get your account. We got, I can't say exact details, but it was 7 figures. But we then had to recoup it and it's 3 years later and we're recouping it now. It's working out. It was a pretty good deal. The problem is they take 45% of your revenue, which if you are running a business and you have a sales team, you know that your sales team is going to cost anywhere from 15 to 30% of your overall cost. So if you are getting 55%, and then your sales team has to take another 20 to 30% of what you get, now you're down to 30%. Great place to build a brand, horrible place to build a business. Completely unreasonable to take 45%, and now what they're trying to do is a little damage control. Last week Twitter came out and said we're going to give 70%.

Leo: Interesting. 30/70 is the split. 

Jason: That's what it should have been in the beginning. That's what I told them. I said I'll stick around if you do 70/30. 

Leo: It's worse on YouTube because there's no transparency. 

Jason: Everytime they make a change to the YouTube system, it's to keep the length of views. Here's the thing. When you put up TWiT videos, or I put up This Week in Startups, all of a sudden on the side are our competitors, and then you get all these subscribers but you can reach them. They keep obscurifying your ability to reach your audience. It's a little bit of a trap. Once you get on, you get all these subscribers and they change the rules, you never actually own your audience.

Leo: It sounds like they leaked these numbers to promote the idea that you like PewdiePie will be making 12 million dollars a year. 

Jason: completely believe he makes that much money, but consider how pathetic that is if they're making six or seven billion dollars. Compare it to something where you look at something like let's say Iron Man. He's getting paid Robert Downey Jr, 50 million a hundred million.

Leo: But he's got talent. PewdiPie just swears while playing a game. That's the other question I have. From the point of view of YouTube, this is a crappy audience. Right? It's 12 year olds.

Iain: Yeah, but it's an audience that is very difficult to deliver.

Leo: Nobody wants 12 year olds. Especially because most of those views are repeated views from the same few 12 year olds. I watched my 12 year old. He watches the same video a hundred times. 

Jason: It's now a billion people a month, so it's everybody on YouTube. So you can't get everybody there. The problem is they're just taking so much of the revenue and they were able to do that early, because when YouTube started, you had to pay for bandwidth. You used to have to pay for hosting, so it seemed like a great deal then. They've tried to hold the line on this revenue split and it's ridiculous, because if he's making 12 million only, can you imagine what he's done for that platform though? He has brought so much value to that platform to only make 12 million a year is a joke. It's a joke.

Peter: conversely, there's no PewdiPie without YouTube.

Jason: It's a great way to build a brand. But what you'll see is, you had Ellen, Ellen Degeneres and her show had a sweetheart deal with YouTube from what I was told by insiders. 90% of the revenue. Then YouTube started unravelning those deals and put her back down to 55%. She created EllenTube, her own YouTube and now Twitter is going to her and saying we'll give you 70%. Where does she interact all day long? On YouTube or on Twitter. She's on Twitter. Where does Justin Bieber and Lady Gaga? They're all on Twitter.

Leo: Frankly, Ellen is really there for promotional value. Not for revenue. So she's going to go where the audience is. The best audience is. If Fallon and Ellen are on YouTube because it generates audience for the TV show. That's where the revenue is. 

Jason: If you're thinking about how much they get in terms of views though, when you get a million, ten million views for those, and you...

Leo: A million views is like 1500 bucks! 

Jason: If it's a 30 CPM for that level of talent... They're getting bundled into the 2 dollar, 3 dollar YouTube garbage. When they go over to Twitter and they can put an ad on every single view, which you can't do on YouTube, and they have premium advertisers and they can sell into their own inventory...

Leo: But who do you get? You get the Twitter crowd. Is that what you want?

Jason: These are going to be legitimate views, and they're going to get 30, 40 CPM. 

Leo: It doesn't matter.

Jason: I think for the advertisers, it's going to be a great view. 

Leo: On TV, they don't know who is seeing it. 

Jason: People are talking about Oh My god Twitter, are they going to be able to come back? Or whatever. They're at 300 million monthlies, they could go to a billion because if they start getting people like Justin Bieber and Ellen to start putting their videos on there and interacting with their audience, nobody can interact... would you ever talk to the YouTube commenters? It's horrible.

Leo: You stay away fromthem.

Jason: But on Twitter you get all really great, considerate people. Theyre going to let you control your Twitter. 

Leo: I don't know what Twitter you use.

Iain: I was going to say, I've gotten some right nutters on there.

Jason: Compared to YouTube...

Iain: Right. But everything compared to YouTube. YouTube is a bear pit. 

Leo: Who is Smosh? 

Jason: comedy duo. 

Leo: That's pewdiepie. Next is Smosh. Here comes Smosh. They're a duo. Then the Fine brothers. I've seen them. But this is mostly under 20s. Teeny bopper. I like her. She's the dancing violinist. Lindsay Stirling. Retton Link. When they talk about these numbers, though I read this Fortune article. They're also including money for coca cola and others pay Retton to make pseudo ads. They're including the native content, so I don't think they're making this kind of money off of YouTube. That is not Michelle Fan. 

Leo: This is very confusing. 

Jason: Michelle was making 300,000 a year. Almost everyone who has made it work on YouTube has stuff off YouTube. 

Leo: that's the point. For Ellen, it's a promotional thing. 

Peter: What it comes to, you have to balance the value that you get having your videos on YouTube as a platform more or less than the value you're able to extract by showing your content somewhere else, right? I think that if you are reliant on YouTube for the audience, especially when you're early. You build your audience there. There comes a point when your audience is big enough, and maybe loyal enough where you can try to move them off of YouTube...

Jason: You want to get their e-mail address. 

Leo: You can't. Can you get it from YouTube?

Jason: No. The whole name of the game is people are running contests and landing pages and they'll let you click off of, and I was the person who got YouTube to concede this, I convinced Salor who was the previous head before Susan, to let you link out to your own site. So they let you link out to one domain name. The conversation I had with him, I want to link to my website. He's like you can't link off of YouTube. Annotations can only link to other videos. I said, "why can't I linke to myself?" We'll have spamming. But I'm a partner. You've already positioned me for trust, you have my credit card, you have my social security number, you have my tax ID, we're already splitting revenue. Why don't you let the partners at least link to themselves? They relented and said you can put in one URL, so I put in the URL of our website and then I created re-directs to go to our Twitter and our e-mail landing pages. We moved over 1 percent of our audience per month to email subscriptions. The name of the game is to have 2 or 3 million subscribers. If you can get 10 percent of those, then you will not be dependant on YouTube, and then what's going to happen is a market place is now emerging between Yahoo, Facebook, and Twitter to get this talent. YouTube is not going to go from a billion users down to a hundred million, but they're going to have serious competition and this talent is going to leave and go other places and publish other places first, and publish other places more.

Iain: I think that's why they're going to Forbes in the first place because they know that they've got a constant churn of people that they're going to hve to go through and flashing that in front of a late teen or an early twenty year old and they think I can do that. 

Leo: That's what breaks my heart. I see these kids and they really think they're going to make it. It's like going to Schwab's drugstore expecting to get discovered.

Iain: It's an essential life lesson you've got to learn. It doesn't work out a lot of the time.

Leo: You know what? You're not going to make it to the NBA either. 

Iain: Get used to it. 

Leo: I want to talk about Twitter, what we're going to do with Twitter, Mac, Apple has some new macs, I don't know if we care. We've got lots more. We've got a couple gadget guys here. I wish I could ask you about these new phones, but you're going to be reviewing them and your review will be on the Register. 

Iain: I was reviewing them until 3:00 this morning. 

Leo: 1 AM pacific time? 

Iain: 1 AM paciic time the embargo lifts and we will have something...

Leo: Can I say what the phones are? I haven't said yet. 

Iain: sure.

Leo: The new Nexus phones.

Iain: That's public knowledge, but the actual reviews themselves we've got to keep quiet about. Interesting upgrades and the timing of it was interesting, because the Nexus 5 was two years old and it's really showing it. The Nexus six was less than a year old.

Leo: Nobody is as beloved as the Nexus 6.

Iain: Even Googlers don't like the Nexus 6. 

Peter: The Nexus six was not a good phone.

Leo: It wasn't. The camera wasn't great.

Peter: I didn't think the screen was that good. 

Iain: It was very awkward and unwieldly. Now the Motorola has been sold to Lenovo. Ditch that. Let's go over and see what Lenovo can do for us.

Leo: Now Lenovo is ditching the Motorola Spirit. They announced that when Marshmallow comes out, they're going to drop Assist, which is one of the key features. It's always listening and knows what's going on situationally and where. Peter, do you miss getting these phones?

Peter: I do miss it a little bit. Now, it's a little harder to pull the trigger on things when you've got to pay out of pocket. I do like to keep up and I think I'll pick up one of these Nexus Phones. 

Leo: I actually like to pay out of pocket, because it reminds me of the pain that real people are going through making these decisions. That could be a thousand dollar error if you buy the wrong phone. These phones are very very expensive. 

Iain: This is why you've got to read all the reviews, try them out yourself.

Leo: And yet, it's so personal. You still have to make that decision. For me, what is the best? A review is only going to tell you so much about how you're going to like it. For me, battery life is all. All I care about on the 6P, which I have ordered and I hope will come in a few weeks is battery life. If battery life is fine, then everything else will be fine. If it can't get 18 to 20 hours, and again, this is a problem because it's the way I use it. 

Iain: I was going to say, battery life is such a difficult one because of the different ways people use things. Actually from a testing perspective as well. Trying to run these things down, you've got to use all these different applications. Turn flashlight on, run YouTube video the whole time. 

Leo: It's so synthetic, that's not a real world experience. That's why I buy them and I try to use them as long as I can, and then I say as subjectively, for me, it's not enough. 

Peter: Everyone has their own personal use circumstances. Frankly, where you live and where you work has a big impact on battery life too because it has to do with distance to a cell tower. 

Leo: Hunting. If you're hunting a lot, that's going to kill battery life. All sorts of issues. These will be Google Fi phones. If it's unlocked, you can put anything on it. I actually Fi because it uses either T Mobile or Sprint. So I'm less likely to be hunting. In the city, I'll use Sprint. Here, I'll be using T Mobile. 

Iain: My only problem with Fi, and I'm still testing this out, it seems to default more to the Sprint Network than it does to T Mobile.

Leo: Here it's T Mobile.

Iain: And you've got to carry around the equipment to handle both T Mobile and Sprint Networks. 

Leo: You do. That's the phone. 

Iain: T Mobile is largely based off of LT, whereas Sprint has an awful lot of CDMA stuff. So you've got an extra hardware load...

Leo: It's more in the phone, you've got more stuff going on. 

Jason: This is the Nexus 5P. 

Peter: Google Fi, it's their wireless network, which is just...

Jason: So they're using both of those networks.

Iain: And therefore you've got to have the hardware to deal with them both which is tricky.

Jason: Therefore your battery is going to get more drained, or more expensive. 

Leo: It's different chips.

Iain: No, but it does mean you've got less room to pack in there. 

Leo: Maybe the same chip. 

Jason: So Google is now going to be your provider of your phone service, not Verizon. 

Leo: 20 bucks per phone. That's all your calling and texting, and then 10 bucks per gigabyte used. My experience has been it saves you a lot of money. After the first month they only charge you for what you used each month. 

Jason: So is Google taking out all the profitability that the carriers would have had?

Iain: Well, this is a limited roll out. The carriers are still trying to work out. They've gone with T Mobile and Sprint. AT&T would have laughed these people out of the building. 

Jason: Underdogs need them. 

Iain: Exctly.

Peter: Sprint historically has been very friendly to the MVMOs because what ends up happening is these guys do the cost of customer aquisition and the marketing for them and Sprint has ended up purchasing a lot of the NVMOs. 

Jason: So Google doesn't need to make a profit off of us as consumers from the service as the NVMO, and they don't try to make money off the phone hardware either, they're just trying to make money off of you doing searches. 

Leo: That's a tough business model to beat if you're Sprint or you're LG or HTC. How do you beat that model? That's a great model.

Iain: The only reason they can do this is because you guys are getting hosed so badly on your mobile bills by the existing companies. Seriously. If you had a decent level of competition in the US mobile industy, this wouldn't be possible.

Leo: I don't know why more people don't use NVMOs because they're almost always a lot cheaper than the big carriers. 

Peter: Typically when you look at straight talk. At the end of the day, NVMOs are leasing capacity from the established....

Leo: Do they get treated differently by Sprint?

Peter: Sometimes. The customer service can be a little bit more complicated.

Leo: But the quality of service...?

Peter: Quality should be the same. Yeah. The thing is, it's hard for them past a certain point to keep down a price, because even if they're paying a wholesale rate, it's not like... I guess Google could set it as a loss or something like that, but at some point, they have to pay the carrier. 

Leo: I'm sure Google Fiber is cost rather than cost plus for Google, right?

Peter: Google Fiber is different because they're not renting at capacity. They're building out their own...They're buying bandwidth. In terms of the infrastructure to the home, they're not leasing somebody else's lines. 

Iain: Also they've been very picky in where they put Google fiber because they work out Sweetheart deals with the local government in order to get up onto the....

Leo: That's right. Who wouldn't do that deal?

Iain: Definitely. It's frustrating writing about this, because if you live in the bay area, you have to put up with such lousy wifi usually.

Leo: It's not just the bay area, and those are the two businesses that we in the United States have the worst deal. One is mobile and the other is Internet. 

Iain: You invented the Internet for goodness sake!

Leo: Is it because we have all this old infrastructure?

Peter: It's because of the legacy. It's a big country, but also the regulatory environment that we have. If we look at how we did cable TV, cable companies would go to a local municipality and agree to a deal where we get a monopoly, exclusive franchise in this area from this municipality, but then in response, the cable company has to agree to wire up every single home. So there's that trade off. The way we've done this before in the past was because of the cost of laying the actual infrastructure, which was wired in most cases, the trade off is you have to give the company some monopoly and then there's a level of regulation and they have to appeal to some board or commission to raise their rates or things like that.

Leo: This is where, by the way, it's fallen down.

Peter: It's fallen down because what has happened are the Comcasts and Time Warners of the world have figured out that...

Leo: They bully the hell out of these guys. 

Peter: They want the monopoly without the regulation. I think the thing is you have to have both. If you look at the UK, the level of regulation is actually very high and it has led to a better situation for consumers. It's counter-intuitive. We always had this idea that less regulation is always better, but it's been proven that there are circumstances where in a more regulated market, it leads to better competition, which is more capitalist at the end of the day.

Leo: Like you guys, we could actually have TV licenses. 

Iain: The TV license is a tricky one because it pays for the BBC, which has a public education...

Leo: I don't think that's going to fly here.

Iain: No. But on the other hand, if you look at how much you pay for the BBC as opposed to the other subscription channels, it's a bargain! 126 a year in the UK. Nothing. People are spending 40 bucks a month on...

Leo: Is it based on color or black and white, or is it based on TV screen size?

Iain: It's based on color or black and white. You pay a little less for a black and white TV, but who has a black and white TV these days? You do get TV detectives who claim to be able to detect if you've got a TV in your room. I agree with you.

Jason: The best thing is you guys own this huge archive at the BBC and there's an IP player which is amazing. People have no idea. 

Leo: iPlayer sells more VPN subscriptions than anything. 

Iain: I have huge arguments with the BBC about this. Simplicate. I would cheerfully pay the license fee to get my player over here.

Jason: You could cheerfully get a VPN for 50 bucks and get it. 

Iain: I know. I would rather pub BBC directly...

Leo: Forget it. Stephen Fry is leaving QI. 

Iain: I'm fine with that.

Leo: Really? He's too smart. 

Iain: Stephen Fry is good in a lot of areas, but he's a bit too much of an Apple fanboy for my liking. 

Leo: I try to watch QI because we get it now. I feel like these guys must be scripted. How could we know all this crap off the top of their head. Stephen Fry is reading Cue cards.

Iain: He is an Oxford educator. 

Leo: Cambridge education there. This is smart people. 

Jason: You could tell from the accent. They speak that proper English. 

Iain: Bring me the rugger scores immediately.

Leo: What kind of accent do you have?

Iain: Technically it's RP. It's the kind of accent they beat into you at public school. 

Leo: It's not posh. 

Iain: It's posh-ish. 

Leo: So you have a public school accent. 

Peter: I would like it noted that I'm the only person not speaking with an accent. 

Leo: You are much appreciated for that, Mr. Rojas. It's fun to have a smart panel. I learn so much. Peter Rojas is here, formerly founder of Engadget, and now Angus Moto. Now an investor. If you want money, talk to Peter.

Peter: Just let me know how much you need.

Leo: It's just that easy. What is as?

Peter: American Samoa. I waited six years for that domain name. It was originally registered.. this is completely true. You can look it up. A Kurdish socialer's worker's party. For whatever reason had this domain, and I was waiting for it. I would check every six months. The thing is, the nick that you register the TLD, you have to do everything fax with money orders. They have a PO Box on Broadway New York. That's where I had to send a check to. 

Leo: i just renewed my Ile of Mann registration. IM. TWiT.IM. I thought one day that would be useful. We spent a lot of money to that sinking island republic. That's all they got. They got the TV. It's worth a lot of money. Iain is with The Register, and also Jason Calcanis is here. He has Serial number 1, ony because Elon gave it to you, the Model S.

Jason: Got lucky. 

Leo: Elon has number 2?

Jason: Elon has the prototype. 

Leo: That's why Jobs and Woz worked it out. Woz got number 1, and Steve got upset, so they gave him Employee Zero. 

Jason: There's this series called the founder series that are 30 or 40 early investors in the company get...

Iain: Didn't Sergei get number 3?

Jason: I'm getting a founders of the X. 

Leo: Are you? So give me some advice. I put the reservation in. But then, they were going to send me an invitation to customize. 

Jason: My understanding is they're setting up the line, because there are so many back orders.

Leo: I wouldn't want the founders. Is that hand made?

Jason: Not necessarily handmade, but they're fresh off the line. So when I got mine, I didn't have the dome lights, and I didn't have the cubby and a lot of pieces were missing because they hadn't come from the manufacturer and they haven't built them yet. So then when I sent the car in for service, they replaced three or four things. I said no don't replace them, I want it to not have that so that the car is more valuable. So then I got this person who offered me 250 thousand for the first one. I paid a buck 25 for it. I was like, Wow.

Leo: That's poker speak for 125 thousand. 

Jason: No. I'm not going to sell. 

Leo: Our show to you today brought to you by

Jason: I use that product.

Leo: How much is a stamp nowadays? It's a buck 25. 

Jason: The last time I bought stamps, they were 34 cents. I don't know what they are now. 

Leo: No. They're forever. You go the forever and you don't know.

Jason: I honestly don't know what a stamp is. 

Leo: You know why you don't know? Because you use You don't have to know.

Jason: We've got that in the office. Love that.

Leo: By the way, letters, packages, it doesn't matter. You put it on the scale, the stamps get printed out. You don't care what it costs because you know that it will be exactly right. You don't have to put an extra two stamps on there because you're worried. On the other hand you don't want to over pay, so maybe you put a few less, and then it's a mess. It gets kicked back! 

Jason: You don't want that.

Leo: It eliminates...

Jason: It's perfect.

Leo: You know what it does? It makes you look more professional. When that mail comes to your customer and it's perfectly packaged and they got the email saying it's on its way, it makes you look professional. So many Etsy and E Bay sellers are gluing stuff on. They're wrapping this thing in lumpy brown paper. Make yourself look professional! People come back to you and they go hey this was great. It was a great experience. You get higher ratings. If you are doing any kind of mailing, you've got to get, and by the way you don't need a postage meter, because it uses your computer and your printer. You don’t even have to go to the post office anymore because a uniformed official from the US Government will come to your place of business and pick up your mail. They call them the mail carrier! It’s an amazing thing. I really—and you get discounts you can’t get at the post office, package insurance discounted in just one click. You don’t have to fill out the forms for certified mail, the return receipt. Even international custom forms automatically filled out by the software. So I shouldn’t, we shouldn’t have to sell you. Go to Up in the right hand corner in the page you’ll see a microphone. You click that. You use the offer code TWIT and we’ve got $110 bonus offer for you. You get the digital scale, the USB scale. That’s important. You also get $55 in free postage you can use over the first few months of your account. You do get a free month as well. It’s a great way to try No risk at all. Go to the mic, go to the website, click the microphone—

Jason: The radio microphone.

Leo: The one, the fancy—

Jason: The old-timey.

Leo: I know, it’s so cool.

Jason: Old-timey.

Leo: And if you see my face you got it right. And use the offer code TWIT.

Jason: You know what the best part of that is? Media Mail. My wife uses this a bunch.

Leo: Yes, because it saves you so much money.

Jason: Do you know what Media Mail is?

Leo: Yea.

Jason: The US Post Office came up with this thing where they said, “If you want to ship a book or a CD or a DVD, all this stuff, you can get it for half off or something.

Leo: It’s slow. But it’s cheap.

Jason: Well, 2-10 days. But here’s what it turns into in reality. It winds up being the same.

Leo: Because the truck’s going anyway, so why not?

Jason: Because the truck’s going anyway, so why not, like “Oh, hold this one back.” It’s like, “Put it on the truck. Go.” So it always winds up going faster. But it saves half as much. So it wasn’t making sense for people to re-sell books because the cost of the book was greater than the cost of the shipping.

Leo: And since 9-11, anything more than a pound and a half, you had to go to the post office and show your face. You don’t have to do that with because of the endicia, they know who you are, you can mail any size package.

Jason: Media Mail, look it up.

Leo: Twitter. Oh by the way, Stamps, thank you for supporting TWiT. Twitter is not TWiT.

Jason: Twitter is not TWiT.

Leo: I’ve been fighting this battle. I was first. Been fighting this battle since 2005, since Ed came up with this Twitter thing or whoever it was. Jack, whoever, we don’t even know. Jack’s back.

Jason: Jack is back.

Leo: Are you happy that Jack’s back? Wait a minutes, before you say anything, do you have any Twitter stock?

Jason: I don’t own any Twitter stock.

Leo: OK, good.

Jason: I don’t own any, I don’t own any public company stocks unless one of the investments I made in a private company gets bought by them. And so I had shares in the company WhatsApp which got bought by Facebook—

Leo: How did you know WhatsApp would be big?

Jason: I didn’t. I was what’s called an LP in another venture capital firm. So I was a limited partner in another venture capital firm that bought them. So then when the shares get sold, they send the shares to you. So I wound up with some Facebook shares which I’m going to be liquidating. So that’s the only disclosure I have because—

Leo: You know who owns Twitter? He owns more than Jack Dorsey. Steve Ballmer.

Jason: Steve Ballmer. And he opened a Twitter account. This is going to be awesome.

Leo: He’s never used Twitter.

Jason: It’s going to be so awesome. 

Iain: It’s going to be a slow motion, it will just be like. When we heard that we were just like—

Jason: Hash mark, explanation point.

Iain: I know it’s going to get some guys—

Jason: Steve Ballmer’s emoji game is going to be so strong. When somebody shows Steve Ballmer emojis, game over.

Peter: The only question I have, does he show up at the developer’s conference next week? I’m so looking forward to it.

Leo: His handle by the way is Clippersteveb. Clippersteveb.

Peter: Oh, he’s so awesome.

Leo: All right, you’re mocking him, aren’t you?

Jason: No.

Leo: You’re mocking him.

Jason: I love the fact that he’s only got 9,000 followers right now (laughing).

Leo: You can get in early on the Steve Ballmer train.

Jason: It’s going to be so awesome.

Leo: Now’s your chance.

Jason: Like during the regular season, how many fines is he going to get by the NBA? Like he’s going to be live tweeting—

Leo: Oh, wait a minute. This is his old account. He’s now moved. For crying out loud.

Jason: Oh. Steve underscore Ballmer?

Leo: Why, he didn’t like ClipperStevieB?

Jason: Way to go with the underscore. And he lost 3,000 followers (laughing).

Leo: (Laughing) nobody followed him.

Jason: He’s going to do great.

Iain: I mean it’s very easy to mock Steve Ballmer. And it’s a surprising amount of fun as well. 

Jason: He’s a winner.

Iain: But we first got into this, it’s like what is he thinking?

Leo: What is he thinking? Especially kind of late, like late stage investor perhaps?

Peter: He’s enthusiastic. I love it.

Leo: I love my recommendations by the way from the Twitter. Because I followed Steve Ballmer, they suggest Aaron Levie, that makes sense, or whatever it is. Adam Baines, the COO at Twitter, much loved and Startup L. Jackson.

Jason: Which is a parody account that is hysterical. That is not me. Anybody who thinks it’s me, it’s not me.

Leo: I thought it was you.

Jason: There’s a rumor going around that it’s me. It’s not me.

Leo: It’s you. Come on admit it.

Jason: It’s definitely not me.

Leo: You’re using that buffer thing.

Jason: Oh a buffer. Who knows? Maybe.

Peter: But did you see someone figure out who it was?

Jason: Oh really?

Peter: They did machine, they did like a natural line response—

Leo: They analyzed his patterns.

Peter: Well, not just his language but his photos that he was posting. And they used that to analyze and they figured. And they sent him an e-mail. They were like, “Is this you?” And he was like, “Yea, you got me.”

Jason: Oh really?

Peter: But they didn’t reveal who he was.

Jason: Oh, cool.

Iain: It’s like SwiftOnSecurity. I mean enough people know who that is now, but we just keep hearing quotes.

Leo: We do?

Iain: It’s so good.

Leo: Who is it?

Iain: I can’t say.

Jason: Tell him afterwards.

Leo: Is it a person named Swift?

Iain: No.

Leo: It’s Taylor Swift’s— but you know, it’s also semi-serious. I mean the content’s good.

Jason: That’s the best thing about it.

Iain: No, the content is absolutely, it’s as brilliant as—

Leo: It’s as if Taylor Swift was a security genius.

Jason: She could be.

Iain: That’s a scary thought.

Leo: SwiftOnSecurity has a Tumblr that’s awesome. Did you read “What I Would Do If I Discovered That My Phone Were Compromised?” It was wonderful. It involved getting on a plane to fly to Seattle after putting the phone in a wire mesh bag, making sure that there was a battery charger in there so the phone would not go off. You know, turn off. Brilliant stuff on there. Highly recommend it.

Iain: If we’re on the subject of Twitter—

Leo: We are, actually that’s how we got here.

Iain: I have to say, SarcasticRover.

Leo: No, I love it.

Iain: CuriosityRover is a must read.

Jason: Wait, is CuriosityRover a real one or a parody? 

Iain: No, no it’s a parody.

Leo: But there’s CuriosityRover, the real one.

Iain: No, there’s CuriosityRover, they’ve got a separate one for that. But SarcasticRover is, it’s well worth following.

Leo: There’s actually 2 SarcasticRovers now.

Iain: Oh, no.

Leo: Yea, yea. It’s a copycat. By the way, I’m pleased to say Sarcastic Rover follows me. So it goes around.

Jason: It’s only following 1,100 so it is significant.

Leo: That’s right because some people will just follow everybody.

Jason: Yea, for the reciprocation effect. Make everybody feel good.

Leo: Yea. So Twitter has an interesting challenge. They fired, the board fired Dick Costello. Is that fair? He was fired.

Jason: They pushed him out and I think he did 6 or 7 years there and he grew the company and I think at a certain point you’re not going to want to stay if people don’t want you there.

Leo: According to Nick Bilton, Costello was the guy who said “No, we’re going to cut off the 3rd party developer ecosystem.” This was widely read by the 3rd party ecosystem to be a bad idea. Was it a bad idea for Twitter?

Peter: It may have turned out to be a bad idea in the long run because I think that if you, so many of the innovations on the product came from the eco-system over the years.

Jason: Almost all of them.

Peter: And I also think that it put them down a path that forced them to be an advertising revenue only business and—

Leo: That’s kind of the justification. “We’ve got to force you to our app or our page so you can see the ad revenue.”

Peter: Yea, I mean it’s still a lot of path not taken, road not taken kind of stuff that, I mean it’s hard to say in retrospect whether if they’d gone—

Leo: I feel like Twitter should have gone non-profit and never gone public for sure. And said, “Hey, we’re a great national institution. We are a huge benefit to the internet. And we’re going to run it that way.”

Peter: I don’t think the investors would ever—

Jason: You know the thing about it is—

Leo: Well now they’re screwed because the stock market expects impossible growth.

Peter: Well the initial investors.

Leo: No, the initial investors got their money but now Twitter is screwed because they have to grow at multiples that are not possible.

Jason: It’s very similar to how Yahoo was put up against Google. And if you put yourself up against Google, you’re going to fail. You have to be who you are. And I think what Twitter has done really well is they’re really great for news, they’re really great for journalists and like, let’s say, opinion leaders, right? That’s where they all seem to hang out and talk. And they’re really great at video with Periscope and Vine. And they’re great at buying small companies that have a million users and getting them to 25 million users. So they should be a collection of brands and they should go all in on video.

Leo: Kind of like Facebook, right? Facebook’s taking the big blue monolith and splitting it into chunks.

Jason: Well, if you look, I mean Facebook now has Instagram, WhatsApp and the Messenger App.

Leo: And the Messenger app which is huge.

Jason: They all are hundreds of millions and collectively they are over a billion obviously. And so this is a great roadmap for Twitter and they’re great at video and they’re great at capturing celebrities. So when you think about celebrities or journalists or politicians, they manage their own Twitter presence. And in a lot of cases they don’t manage their YouTube and Facebook. They have people do that, right? Because it’s complicated and not personal.

Leo: I thought everybody had people do Twitter.

Jason: No. Very few-- it’s almost universally, every sports or journalist—

Leo: People like Lady Gaga and Taylor Swift have taught us that really authenticity on Twitter is key.

Jason: Correct, correct. And when you look at Tom Cruise, it’s like, “Really Tom? You have somebody doing your Tweets for you?” That’s just bizarre. I mean do you not understand that this is supposed to be—and it’s only 140 characters. Is it that hard? I mean like you can hang off the side of a place, you can’t write 140 characters?

Leo: That’s really interesting.

Iain: If we’re talking Tom Cruise and bizarre though, there’s a lot of material there.

Leo: (Laughing).

Jason: (Laughing) internal topic. Twitter’s going to have a great comeback. Here’s the thing. Whenever a founder comes back to a company, you know they’ve got unfinished business. And it’s very similar to when Larry Page and Sergey, even though they didn’t leave the company, they had to put Erick Schmidt in charge for Wall Street to like it. That’s who Dick Costello was at that point in time. Now you had Jack go off, go on his little, you know, hero’s journey, go do Square, he went to Sciota, he became a better person. Jack’s a much more developed person than he was. And because Nick Bilton, you know, really—

Leo: Skewered him.

Jason: You couldn’t have looked worse.

Leo: Yea.

Jason: He looked very immature, petty, immature all this stuff. And you know what? I think that really hit him hard. He’s a very sensitive guy. I know him personally.

Leo: He’s a pants designer. I mean he’s a fashion guy.

Jason: He’s an artist. He’s very sensitive. He’s very considered. And I think he’s become a magnificent leader now. And people want to work for him.

Peter: That’s good.

Jason: And he’s got clarity of vision. And so when you hear him speak, he’s become much more mature and he’s much more—I did that for you, by the way—much more mature. And he’s got very good clarity of vision of what he wants it to be. Now people can debate what it should be or what’s it going to be, but he’s going to take it in a certain direction. He’s going to—and when the founder takes over like that, it tends to be a great thing for the stock. And it tends to be a great thing for the company. People are going to want to work there.

Leo: So it’s like Jobs coming back, it’s like Sergey and Larry coming back.

Jason: Well, he’s not Jobs. 

Peter: Well the thing is, the thing that Jack doesn’t have that the Google guys have is the dual class of stock, right? He’s not in control of his own company.

Leo: Yea, the Google guys, you can’t vote. Only the Google guys can vote right?

Peter: Basically those guys—and that’s how they set it up which is like, you can buy our stock, you can make some money, but you don’t—

Iain: But they’re running the show, yea.

Jason: But Jack does have that at Square. So he learned from that. Right now Twitter is so on its heels and so beat up that I think people are going to give him a couple of years to figure it out. I think the stock market will give him a year or two because it’s already on the floor. A year or two. A year or two.

Leo: And his first action he announces layoffs? Are they needed layoffs? Thousands of people, right?

Jason: Here’s what I think. When you add people to a developing group, like when you put the 4th person or 5th person on an app it slows it down almost inevitably. And so what they did was, I think—

Leo: It’s the mythical man month. You cannot throw more programmers at a problem. It just makes it worse, not better.

Jason: And so they just needed to tighten up the engineering ship. They’re reorganizing. And so it’s also going to make the place more efficient.

Leo: And also, you know he’s sitting there and he says, “You guys have been working on Moments for months. Can we release this?”

Jason: Yea. What do you think of it?

Leo: It’s useless.

Jason: Yea. People don’t like it.

Leo: It’s better on mobile than it is on the desktop. And it doesn’t make any sense on the desktop. But on mobile—

Iain: I find it really annoying on mobile.

Jason: It’s not jarring.

Leo: Well, it’s a couple of problems. It’s nobody I know, right? It’s not made up of my—it’s not like Nuzzle, where it’s made up of people I follow, it’s just what Twitter’s editors have decided. Here’s the big today’s news, sports, entertainment or fun. There’s a lot of repetition because the same stories show up on all 3 of them. Look, here’s today—

Jason: Yea and they scarify all of the Twitter re-tweets and following the person. It’s all in ellipses. Which is a tiny little product detail. They don’t want you to click to the source. They don’t want you to engage with it. They just want you to swipe through it. So it’s really kind of dumb consumption. Which is the opposite of the Twitter mix.

Leo: Really? But I understand the point which is a lot of people come to Twitter and go, “I don’t get it.” Even with the recommended users—

Jason: It could be an onboarding trip.

Leo: It’s for onboarding. It’s so there’s something there you can look at.

Jason: If you want to watch a recap of today’s football game when the 49ers game finishes, and you swipe through it, you don’t need to watch ESPN. That’s what it’s for.

Leo: You know what’s better than that? Snapchat. On ESPN Discover Channel on Snapchat you get everything you need, you get quick highlights.

Jason: But this is really difficult for publishers. I don’t know how publishers are going to make money if you can get the entirety of their content on one of these apps that is un-monetized. 

Leo: But we talked a lot about this with Jeff Jarvis who is saying, who is essentially saying that publishers are following the BuzzFeed Vice model which is, “It ain’t about the home page anymore.”

Jason: Well, then how are they going to monetize because Facebook’s not sharing revenue and Twitter’s not sharing revenue on these pages, so I don’t get it.

Leo: I don’t either. I don’t either.

Jason: I mean—

Leo: Look at what Google’s doing with this new AMP project where they say, “Well you can be fast and stuff but don’t use image tags, don’t use Java script, don’t use anything.”

Jason: You’re going to have to sneak in native ads. 

Leo: That’s what it is.

Jason: Because everybody’s going to have to sneak in native ads.

Peter: But Facebook is doing rev share on instant articles.

Jason: They will. Do you trust them?

Peter: Of course not. But I mean look. What we’re seeing, we’re seeing this moment where because of mobile and because of how bad the mobile experience of the regular web is, these social publishing platforms which is what Facebook and Twitter are, they’re absorbing media, right. And it makes sense because they want to keep people in those experiences and they can frankly offer something that is better than what the publishers are offering themselves. And I think that there’s—I wrote about this a few weeks ago. There’s a reason why people use ad blockers, right, and it’s because the experience of the regular web is pretty bad.

Jason: The mobile browser is just so slow and there’s so much cruft that an ad blocker or using a native solution like native Twitter, native Facebook video is so great. But you know, publishers can hack this. So what I did with my podcast was we take the best of clips. And it would be great for TWiT to do this. We put a best of clip and at the bottom we put a lower third for Stamps or a lower third for whomever the sponsor is, and at the end, we say, “Brought to you by whomever.”

Leo: This is Twitter video you’re talking about?

Jason: On Twitter video. So my native videos—

Leo: See we don’t have access to that. You have access to that.

Jason: Yea but you can easily get access. I’ll talk to Adam later.

Leo: You said that last time you were here.

Jason: I’ll cc Adam Bain. Anyway, here’s the thing. What’s going to be great about it is you bake the ads in like that and then you can game their system. So you can buy penny ads—

Leo: Oh, Adam’s going to like that. Take that part out and then—

Jason: Well listen, here’s the thing. You know Facebook told me, and I had this meeting with Cheryl Sandberg once and I was talking to her about it. I was like, “Hey, I’m putting my stuff up on, I’m putting my podcast up on your system and it says I can’t put, I can’t sell ads on my Facebook page, but you want me to pay money to promote my Facebook page.” She’s like, “Yea, you can’t sell ads.” So I’m like, “Well, I have ads in my podcast baked in.” We read the ads, just like you do. And she’s like, “Yea, that’s ok.” So I’m like, “Ok, so you’re not going to kick us off for that.” So they don’t enforce it. So here’s the thing. What are they going to do? Are they going to go to guys like us and say, “Yea, we don’t want your content on there if you bake it in?”

Leo: It’s kind of what YouTube told me.

Jason: Yea. And you know what, you tell, you put it up and say, “Go ahead YouTube. I dare you to take this freakin tech down. I dare you to take it down.” They’ll never do that.

Leo: So, this sounds like there is an opportunity for Twitter to respond to these issues. You already said there’s an opportunity with YouTube stars to do better by them.

Jason: Sure.

Leo: Maybe there’s an opportunity to do better by publications, share that ad revenue.

Jason: Yep.

Leo: Maybe there’s an opening here because these other platforms haven’t done such a good job.

Jason: You have to go in eyes wide open.

Leo: Will Twitter do that?

Jason: Twitter’s going to share revenue big time. 

Leo: That’s how they get in the game, right?

Jason: Yea, that’s how they get in the game.

Peter: I think that’s their one advantage that they can leverage right now.

Iain: Yea, I mean the big problem with, I mean from a publishing perspective from someone who’s still in the industry is you’ve got pressure from—

Leo: You’re the last man still in the industry.

Iain: So many, pressure from so many different areas. And we’ve seen it with other publications who’ve panicked. Particularly about the ad blocking issues. And just like go for more and more esoteric ads just to try to beat them.

Leo: They don’t need to panic, right? These ad blockers aren’t really hurting revenue.

Iain: They’re trimming it. They’re not—I mean it’s all coming down to—there’s also, one of the things that is really encouraging is that you see smart ad block use. So people, we’ve been rushing about this for years, but we’ve seen more and more people, if they like a site, they will take ad blocker off of it and like they’re contributing to that site.

Leo: Which is great because people—by the way I think that a lot of people don’t do it because you just turn it on and you forget about it.

Iain: Yea, you just turn it on and forget it.

Leo: But that is a way for you as a user to influence sites and to reward sites who give you ads that respect you as opposed to abuse you.

Jason: But do they also do it if the site is obnoxious with the ads, like road blocks and everything, it’s like, “Ok, I’m going to punish you and ad block you. But if you’re reasonable and the New York Times had some beautiful ads, ah screw it, I’ll accept them.”

Leo: It would be nice if we could do that. Most ad blockers don’t foster that. They just block everything. You never know. You just go in and you go, “Eh. I don’t know.”

Iain: People are getting smarter about it you know, because they realize that this content has got to come from somewhere and someone’s got to pay for it. So you know.

Jason: Do you think that Apple’s going to make it like one step install for the ad blockers? Because right now you have to go to settings, Safari, content blockers, content, turn it on.

Leo: First it’s a little weird. You have to install it.

Jason: Install.

Leo: Because you won’t get the setting until you have one installed.

Jason: Install, settings, Safari, content—

Leo: That’s a lot of steps.

Iain: Yea.

Leo: It’s almost as bad as doing a podcast.

Jason: There’s five steps.

Peter: They’re not going to push it.

Jason: They’re not going to push it.

Leo: Yea, I think that’s right.

Peter: I think for a lot of reasons. I think one is they’re going to wait to see how Apple News does, right?

Jason: Oh, that came out at the same time.

Leo: By the way, horrific.

Peter: It’s a terrible product.

Leo: It’s horrible (laughing). I keep getting Detroit weather in my “customized” Apple News.

Iain: Ooo, lovely.

Peter: This is actually one of the things where we see that Apple is actually not good at this stuff.

Leo: They’re terrible.

Jason: Yea, their basic apps are basic.

Peter: Yea, and so the question then is, do they get this right in a few years or is this something that they kill?

Leo: Well it’s too late. This is the problem with an app. People open it once. If it sucks they put it away. They throw, they put it in the Apple folder which I have and everybody who uses an iPhone has. Where you put the stuff—

Jason: The junk drawer. Crud.

Leo: The junk folder.

Jason: I think Apple, I think what Apple does is they build an app that is so basic that it’s for people who don’t want to install other apps like your grandfather or your uncle, whoever doesn’t want to do that and they make them extremely simple and they don’t compete with the ecosystem. Whatever comes out in the ecosystem, 2 years later they add it to their base products. So if Sunrise has you know, some really great calendar thing, or swiping—

Leo: Too late. Microsoft bought them.

Jason: I know, but that’s when you have like—

Leo: (Laughing) too late.

Jason: Mailbox does swiping on e-mail, right? Does –

Leo: Microsoft bought it. What else.

Jason: Dropbox bought that one I think. But all those little features like swiping the e-mail left or right, they’ll add it to the mailbox but they’ll wait 2 years to give the app ecosystem time to profit off of them, right? I message added your location, share your location for an hour. They could have added that 2 years ago when other people had it like Waze or whatever. So I think they purposely make their own apps limited. That’s a theory I have.

Leo: Not to compete with the ecosystem. Yea.

Jason: If they just ripped off the ecosystem like Facebook does, everybody just gave up on building apps. Remember –

Leo: Did you hear the verb Sherlocked?

Jason: No. What does that mean?

Leo: Oh, yea, you know that right?

Peter: Yea. Yep.

Jason: What is Sherlocked?

Leo: So when you’ve been—so Sherlock was a wonderful app written by OBDev I believe. It was a great tool. And then, actually it wasn’t Sherlock. It was called Launcher something.

Jason: Sidekick?

Leo: And then Apple came out with Sherlock, putting that company out of business. And almost in every Apple announcement they’re putting somebody out of business. They have essentially co-opted somebody’s software.

Jason: You just can’t have it be too close to when that company came out. You’ve got to give them enough time to get to the next feature.

Leo: Yea. Watson. That’s what they killed. Watson. Remember that?

Peter: Yea but I mean this is true. People worry about Google or Facebook or Microsoft. It used to be Microsoft, right, and then it was Google and now it’s Facebook.

Jason: But time to rip-off is important because Facebook will rip stuff off within months. Like they did Poke to get with Snap Chat. They did a Groupon competitor.

Peter: How did they get so bad at the rip-offs? They did the Foursquare rip-off.

Jason: They did a Groupon rip-off. And it’s a pathetic because—

Leo: They did a Vine rip-off. Remember that?

Iain: Customers don’t go for it and it really irritates developers so –

Jason: Well can you imagine if you work there too?

Leo: But that underscores that you get one chance with an app. And Facebook, every one of these apps people launched them once and then threw them away. You get one chance.

Peter: That’s true but then they end up getting something like Facebook Messenger right where they pull it out. They got that right.

Leo: That was tricky because they had to force people—

Peter: Absolutely.

Leo: to say, “No, you can’t use it in the app. You have to get it and install and use Facebook Messenger.”

Peter: Oh, you know why they did that?

Leo: You know why? They got lock in. If your friends are using Messenger, even if you’re pissed off that you had to do that, you’re not going to delete Messenger.

Jason: There was a reason that they did that I heard from the inside.

Leo: What?

Jason: They—you know how when you first turn on an app, they say like, “Hey, can we allow this to messenger you?” Well when they launched the Facebook app they didn’t do that. So and it didn’t exist I think. So everybody had Facebook on their phones. Which means none of the users had alerts on. So if you install Messenger again, you get to put the alert on.

Leo: They forgot to turn on the alerts.

Jason: So you they just said, “Oh, well on a growth basis, the 400 million people who have the app don’t have alerts on. How do we get alerts on?”

Leo: But it also fits with their larger—

Jason: You can’t do it retroactively.

Leo: It fits with their larger strategy of having separate apps. And the other thing is that they’re turning Messenger into a platform like WeChat that does so much more.

Peter: They are obsessed with owning the notification layer. Because they realize that that has become the top level of the smartphone experience.

Leo: That’s how you get-- It’s not the front page anymore.

Peter: We actually did a whole like one day beta works a couple of weeks ago.

Jason: That is so interesting.

Peter: Where all we did is talk about the future of notifications. And it turns out that like this is where users are sort of, they’re migrating because that’s sort of the 1st –

Leo: It’s the 1st thing you see.

Peter: It’s the 1st thing you interact with, right? And so what’s happening is that we’re seeing apps that are being built that are just notifications. They, you interact just as notifications. But you’re also seeing that as apps are trying to compete for attention and for engagement, they’re trying to you know, push as many notifications out as they can get away with.

Leo: Well Apple’s aware of this because they have spanked developers like PCalc for putting, they put a calculator in the notifications and they delisted them. Then they let it back in.

Peter: They let that one back. And I think that what is going on is I think that we’re at sort of—imagine what, remember what e-mail was like before we had, before Gmail? Right before we had good spam filters right? And so we’re kind of at that place where we don’t have the intelligence in the notification layer in the OS, the smart phone OS and—

Leo: It strikes me that’s probably why the Apple Watch exists. Because essentially it’s a notification machine.

Peter: It absolutely is.

Leo: Surface’s notification. Which is why I hate it.

Peter: And eventually we’re going to get to a place where—

Leo: I don’t want them. I don’t need them.

Peter: The notifications need to be smarter. We’ll get there eventually.

Leo: It’s one of the first things. If you’re going to use the Apple Watch, what you do is you prune notifications.

Peter: You absolutely

Leo: You have to.

Peter: You have to. Because it’s not usable otherwise.

Leo: I actually finally said, “Stop telling me stand up. I will stand up but I’m not going to do it right now.”

Jason: Is the new Watch OS out, the new one?

Peter: Watch OS2, yea.

Jason: What’s the number one reason to upgrade it?

Leo: Didn’t help. Didn’t help.

Jason: Because I gave up on my phone. It’s a $350 desk weight now.

Leo: Didn’t help.

Peter: It did not make a difference. So the thing I was looking forward to was ok you’re going to be able to have these apps which run natively on the watch.

Leo: Nobody made them.

Peter: I saw a couple. But even the ones that are, it’s not really, the performance is not dramatically better.

Leo: Oh, but there’s Time Machine. You can twist the dial and go back and forth in time.

Jason: For what purpose?

Leo: Well—

Peter: Calendar, appointments.

Jason: You mean I could set my watch for the wrong time? Wow that’s so useful.

Iain: Damn, I wanted to go back in time.

Leo: No, it was actually disappointing. Everybody was hoping Watch 2.0 would, Watch OS 2 would really make Watch work.

Jason: Watch is terrible.

Leo: And it was a minor upgrade. And I think Watch is terrible. I really do.

Jason: It really is like, it had so much promise. When they showed it—

Leo: It had so much marketing.

Jason: But I thought that if the Apple developers, like some app developer just is going to nail it. Somebody’s going to nail the experience. And nobody has. 

Leo: Partly it’s the constrained size of the screen, the ridiculous number of buttons.

Peter: Like, look. At AOL I built an app for Apple Watch and even though they’ve opened it up a little bit Watch OS 2.0 it’s very still, very limited. 

Leo: You can’t do much.

Peter: It’s very, very limited.

Leo: Basically you can do an animated GIF.

Peter: And Apple kind of holds back a lot of the best stuff for themselves so you don’t have access to the—

Leo: This is a personality flaw that’s going to bite them I think in the long run. They’ve—

Peter: Yea but they, I mean they follow the same path with the iPhone, right? I mean don’t forget, there were no apps for the original iPhone.

Jason: There was no browser for the original iPhone.

Iain: We waited 18 months for 3rd party apps on the iPhone.

Jason: And no browser, right? I mean like they stopped—

Peter: Well they had a browser, but.

Jason: But they didn’t let Dolphin on, they didn’t let Opera on, they didn’t let VLC Player, like they’re like, “No media players, no media players and no browsers.” And it’s like, “Well, really?”

Leo: This is why I call the iPhone constipated. It’s there’s a lot of holding back. They’ve got to let it flow.

Jason: There’s got to be one killer app that emerges from the phone that didn’t exist before.

Leo: Well I think there’s lots.

Jason: No but a killer app that you like, “I wake up in the morning and—“

Leo: Twitter doesn’t exist without a smartphone, right?

Jason: Right. But what if they had a killer app for the phone? The watch, I mean the watch. I’m sorry I misspoke. The watch. Which one, what is it for the watch that we say, “I can’t leave my watch at home because I have to use this. I need it for this purpose.”

Peter: It took, but remember it took a couple of years with the smartphone.

Jason: Like I won’t not wear my Fitbit. Before that the basic Fitbit. I want my steps. I want my calories. I want my sleep.

Leo: And that is that metric we use where you get, will you go back and get it if you—will you fetch it?

Iain: That’s interesting because I’ve tried pretty much all the smart watches out there. And I have never found one—

Leo: None of them.

Iain: Which is in any way something which, as you say, I would go back and get if I left it in the house.

Leo: Even the fitness bands I’m kind of a fan. I know you like your Fitbit.

Jason: I won’t go back to my house for it, but I will walk up 3 flights of stairs to get it at the door. So I’m halfway there because here’s the thing.

Iain: That must be irritating because then you lost the steps.

Peter: Yea, you haven’t tracked the steps.

Jason: You know what? In my own OCD mind, I have a little bit of that OCD. I don’t like missing flights because it’s not the steps. It’s the flights.

Leo: You mean air flights? Or flights of stairs?

Jason: No it counts how many flights of stairs you go up. And the flights are hard to get. You lose three flights, you only do 30 a day. I don’t want to lose 3 of my 30. It’s ridiculous. But I’ll go back for that.

Peter: I just go the stand up notice.

Jason: And the sleeping.

Peter: Excuse me everyone.

Jason: Peter and I were talking about this earlier. How do you sleep?

Leo: You can always tell when someone’s wearing an Apple Watch because at 10 to the hour, they stand up.

Jason: How do you sleep? Do you sleep well? How do you sleep? Do you sleep well? Do you sleep well on the Casper?

Leo: That is so stupid by the way. Everybody stands up at the same time.

Peter: You could stagger it, yea.

Leo: Please. Apple, what are you thinking?

Jason: It’s at the same time?

Peter: It’s always at 10 to the hour.

Iain: Apparently at Apple offices now it’s not the hokey pokey at 1 to the hour because everyone stands up and—

Leo: You know, everybody’s learned that all you have to do is this for a while.

Iain: There’s better things you can do.

Jason: But this is great for sleep. I think that sleep is the new killer app.

Leo: It’s the new thing is monitoring your sleep.

Jason: Because when you start to realize the fact, especially as you get a little bit older, when Peter and I were talking about this, he’s got the Zeo which I had for a while and when you start realizing the impact sleep has on your work, your mood, your concentration and weight loss and building muscle, everything and I am now, when I see I got 4-5 hours of sleep like 2 days in a week, I really put an effort into that next day of getting my full 8.

Leo: But here’s the thing. How do you act on this information?

Jason: It’s very simple. When you see that you’re getting disrupted in sleep? You say, “What disrupted me? Oh, bulldogs. Oh, I was on my computer. Oh, this double espresso, short and tight.” Everything is, you start to learn what the items are and then you start eliminating them. So we did the blackout curtains, bulldogs in the other room, no screen time like Peter was talking about and then I got this thing called Flux for my desktop. 

Peter: Yea, that makes it, it lowers the color temperature of the screen so it reduces the blue light.

Jason: It changes the color temperature.

Leo: Does that make a difference? I thought that was a gimmick. 

Jason: The blue light is Flux. It’s so great.

Peter: Like I got a Kindle, you know I use the Kindle, the e-ink reader because it actually doesn’t produce the blue light because it’s not an LCD screen. It has just the edge lighting. And that’s actually because it’s—

Leo: Paper white or the new one that’s not blue.

Peter: The Voyage.

Leo: The Voyager. That’s not blue.

Peter: Those will not impact your sleep negatively. 

Leo: So you can read in bed.

Peter: Absolutely. And so, I mean I made a bunch of these changes too and I have two small children. And so I was getting –

Jason: You’ve got to put those up for adoption. That’s the worst.

Peter: They’re gone. 

Jason: Out.

Leo: See that’s my problem is I can’t act on any of this information.

Jason: No, if you get Flux though, because I have to be one my computer sometimes like there’s not choice.

Leo: I’ll get Flux. I thought that was a gimmick. Like the baseball players wearing those copper bracelets.

Jason: No. Completely worth it.

Peter: No, it’s a real thing.

Jason: A real thing. So what Flux does is it’s an app for Mac and it just changes your screen hue based on if the sun’s down and what time of night is the ambience. And I can tell you like when you go to bed it’s easier to go to bed.

Leo: Son of a gun. Because my sleep is crap.

Iain: Well this is why I don’t read the computer in bed. I always have books by the side of the bed. Because if you’re trying to get to sleep. Also, if you wake up in the middle of the night and you open a laptop, that’s it. You know.

Jason: You’re jumping down the rabbit hole.

Peter: Absolutely not look at your phone or your laptop if you wake up in the middle of the night.

Jason: Yea, I’ve been taking my phone—

Leo: And then there’s the guys who do the split sleep thing. You know, where you sleep for 4 hours and then awake for 4 hours, then sleep for another 4 hours.

Jason: None of us are that important. Look, forget that. None of us are that important, not making that big of a contribution to humanity. We don’t need to be awake that long. Sorry. It’s a great panel. It’s probably the panel of the year. Nobody’s that important.

Leo: I have to ask you, what I want to ask you about, Omid Kordestani.

Jason: When we get back.

Leo: Because I believe there’s a reason why he joined Twitter and I want to ask you about him. But first, when’s—you know what? This is a, this might help me with my sleep. GoToMeeting. Because I’m going to be more efficient during the day so I can sleep better at night. GoToMeeting means you don’t have to travel. That’s the worst thing for sleep. Get on a plane, new time zone. Terrible for sleep.

Jason: Terrible.

Leo: Not to mention expensive. What if you could just meet wherever you are with whoever you need to meet. Your team, your clients, your colleagues all over the world, your suppliers. But you don’t have to leave home. They don’t have to leave home. They like you for that. You can meet from any computer but you can also meet from an iPad, from a smartphone, from any tablet. No traffic, no travel expenses.

Jason: Start the meeting on time.

Leo: Start it on time. End it on time. Get done, things done faster because you’re seeing—

Jason: Record the audio.

Leo: You’re seeing each other’s screen. Absolutely.

Jason: I use it 10 times a week.

Leo: HD cameras on everything these days so you see each other face to face. You don’t lose any of that body language.

Jason: You get HD. And then you have screen sharing. And it’s very smooth. So I use it, I have two accounts. One for each company. And I do about 10 meetings a week on it. It always works.

Leo: Jason I love you. You’ve got to come back all the time.

Jason: No, I’ve used GoToMeeting forever and literally there’s a really cool Google Chrome, Google Calendar plug-in, where in Google Calendar it says, “Set up GoToMeeting.” You press one button. Boom, it puts in the meeting code. And then e-mails it to everybody. So I’m just like, “You want a meeting?” I put it in, I press the button and it’s all set up. You don’t even need to have an assistant or anything. And then everybody can dial it. Because most people want to dial in on the phone. So they’ll dial in on the phone. 

Leo: But that’s the beauty part. You don’t even have to do it. You can do a conference call, but you can also add—

Jason: And then you add this other stuff. I use it constantly.

Leo: GoToCitrix, GoToMeeting. It’s There’s a try it free button. You get 30 days. You don’t have to take our word for it. You can really see what it can do for you. I bet you’ll sleep better.

Jason: For sure. You’ll sleep better knowing the meeting’s going to start on time.

Leo: I’m just thinking, you might sleep better. So Omid Kordestani is an interesting fellow. Employee number 11 at Google. So very early Google-er. He kind of is one of the guys who’s on the beach at Google. He still works for Google but he doesn’t have any real responsibility.

Peter: I think he’s employee number 11 or something like that.

Leo: Yea. He was a business guy, right? He was a business guy?

Jason: Yep.

Leo: He makes relationships. So weird. All of a sudden. He’s on the board of Twitter.

Jason: He’s probably Jack’s pick.

Peter: He started there after the re-org, so.

Jason: I think this is Jack’s pick.

Leo: You don’t think Google said, “Omid, go on over to that Twitter.”

Jason: No, no, no, no.

Leo: “Check it out. Help get that into shape. And then we’ll acquire it.”

Jason: I think it’s—

Peter: No, I don’t think so.

Jason: Google is a natural acquirer for Twitter obviously because they failed at everything social they’ve ever done. And everybody believes that if the price goes down to a certain point that Google would buy it or become, you know, a potential purchase.

Leo: Even a hostile takeover.

Jason: It’s kind of hard to do.

Peter: It’s harder to do.

Jason: It’s harder to do.

Leo: Why?

Jason: Because if you do a –

Leo: You want everyone to like you.

Jason: Well, there’s that. Like you do the hostile takeover, like are people going to leave the company, lose the management team. But it’s also just hard to wrangle all the stock and then the price will just keep going up. People won’t sell it to you. But it’s easier just to come in and give everybody a 50% premium.

Leo: And they can’t afford that.

Jason: But look at what happened with Microsoft when they tried to buy Yahoo which is like trying to get a deal done is hard.

Leo: It’s a mess.

Jason: But he is a consummate deal maker. In the early days of Google you have to remember, Google had no distribution. What did Google do? They got Yahoo to put Google on it. Which I think was a Michael Moritz deal then Omid. But they got Google everywhere. And they fought you know, to get it into browsers, into Firefox, etcetera. And he was the guy who got them all those deals and a lot of publishers. New York Times, etcetera, to put Ad Words on, right, and to put Ad Sense on rather. And he is a consummate deal maker and that’s what he’ll do for Twitter.

Leo: So VentureBeat has this story about how he’s going to have a $12 million dollar package for becoming executive chairman of Twitter. But remember this guy’s got $123 million dollars in Google stock. He doesn’t really need to go to Twitter.

Iain: He doesn’t really need to do anything. 

Peter: He could go to the South Pacific.

Leo: If it were you and me, we’d go together to the Seychelles. We’d enjoy a little—

Jason: That’s interesting. Peter and I are going to the Seychelles right after this.

Leo: Let’s all go. 

Jason: Let’s go. Ok, Peter, are you taking the Betaworks jet or are we taking the other jet? We’ll take both. 

Leo: Can Elan join us?

Jason: Exactly.

Leo: All right. Ok (laughing).

Peter: By the way, the G4 just got out of the shop.

Jason: That’s about the only chance we have of getting a jet.

Leo: All right. So it’s just conspiracy theory on my part.

Jason: Total conspiracy theory. Listen. The thing with Twitter is—

Leo: Does Google even want Twitter? They want the social signals, don’t they?

Peter: It’s actually easier for them to buy it now that they’ve re-orged with Alphabet. 

Leo: They can make it a t.

Peter: They could bring it in, not actually put in underneath Google.

Jason: Well that’s the reason. I mean the reason they did Alphabet was for exactly this reason. To buy things and to let senior managers operate on their own cap table. So for people like Tony with Nest, etcetera, they really don’t want to have a boss. They don’t want to answer into somebody. And then what it also does it’s going to act as a shield for anti-trust stuff where they say, “Oh my God, Google is listening through your Nest or your, you know, your Nest-cam and they’re going to target Ad Sense against it.” And they’d be like, “Those are separate companies and they don’t share information.” And now they’re separate buildings and separate people, separate cap tables, separate accounting. And so it’s like just starting down that path to make life a little bit easier.

Peter: Well it is. It helps them avoid the strategy tax which Microsoft has pad and obviously shown that—

Leo: What is strategy tax?

Peter: Well it’s where you can’t do certain, like different parts of your business can’t do what’s best for them because they have to keep some other parts. I mean Sony’s a classic example of this where they basically ruined the PS3 for that generation because they had to put a Blu-ray player in which bumps the price up because they had to keep the other part of the business happy.

Jason: They also had that with the Walkman where they’re like, “Oh, we have to release mini-disk.” And they were all bought into that. Remember that mini-disk format? So the hardware and they bought Columbia Records, they bought Def-Jam or Columbia bought Def-Jam, they had Sony Records and there was like that whole integrated convergence was the word we used to use. And convergence means don’t do what’s best for the consumer. And you see how that worked out for Sony.

Leo: Speaking of which, among other people fired in the 300 layoffs at Twitter, the co-founder of Vine. Whoops.

Jason: Don’t worry, he got a good package.

Leo: Rus Yusupov. Ok, I guess they didn’t really need him anymore.

Iain: No.

Leo: What the hell? He’s going to the Seychelles with us by the way.

Jason: The real vein when you buy a company and then you have the founders around it makes it harder for the management team that bought the company because everybody will look towards the founder for guidance.

Leo: It undermines management.

Jason: And it undermines the management. So I literally have had in the 2 cases I sold companies, people were like, “You know, Jason, might be time for you to go on to your next adventure because everybody wants to talk to you.” You know.

Iain: Exactly. There’s a big farm in the country where you can run around and—

Jason: They just don’t want bulls in the china shop. 

Peter: You can make all the product decisions you want (laughing).

Leo: By the way, 67 billion dollars. What the Dell? 67 billion dollars for EMC.

Jason: That’s a big transaction.

Leo: The largest they say tech acquisition of all time.

Iain: It’s certainly up there.

Leo: That’s government money. That’s government money.

Jason: Well if you think about the largest hedge funds in the world I think are just tipping $100 billion. I think Apple has $120 or $130 billion in cash.

Leo: Yea, Apple could spend that. But how does Dell even have $67 billion?

Jason: It must be multiple hedge funds giving them money.

Leo: Investors.

Jason: And I think they did this with some ring. But I think EMC has predictable revenue so it’s a little bit easier.

Iain: Yea.

Leo: What is the business of EMC? What the hell do they do?

Jason: Storage.

Leo: They make storage. But it’s Enterprise storage.

Peter: VMware is really the business they’re in.

Leo: EMC owns VMware?

Peter: It’s actually bigger than EMC.

Jason: Yea that was the biggest—I think it was the best acquisition ever because they bought it for a billion and it’s worth $30 or something?

Peter: Yea. It’s been hugely successful.

Jason: Or maybe they bought it for $500 million? I don’t know what the run-up is but they bought a company that then became bigger than the mothership. Which I actually have a theory. I think YouTube becomes bigger than Google Search eventually. Because if you think about it how often, although Search has bigger intent for purchase, we all spend much more time watching video and video ads are super compelling as well. They’re the equal, they’re only matched to Search as the video ads in the world. And video ads, if Google continues and people, it actually competes with TV and they start having Netflix like programming on it, hey –

Leo: So what is EMC? They do storage, they have VMware.

Jason: They also created Pivotal which was a combination of 3 or 4 different assets that they spun out and that company I believe is worth $2, a billion or 2 at least. The make hundreds of dollars-worth of revenue. I’ve actually, I know a lot of people over there. My friends work at Pivotal.

Leo: So is this company, this massive kind of multi-faceted company worth $67 billion dollars?

Jason: Yea, for sure, for sure. They have bought asset after asset after asset.

Leo: This is not an HP Compaq type of deal?

Jason: No, they’re not in a dying business. They’re in growing businesses.

Leo: And in fact Dell wants to be in the services business, right? They don’t want to be just—the worst thing in the world is to be a PC manufacturer.

Jason: But look at what IBM’s move was. It was a pretty brilliant move. They were like, when they got rid of the ThinkPad and you know, gave it to Lenovo and all these other people.

Iain: Giving it to Lenovo wasn’t a brilliant move. As a ThinkPad user I was furious.

Jason: I was a ThinkPad user too. It was quite a charming device for that time, right? I mean it was a really well constructed, well thought out device. And I actually think Microsoft now making their own—what is the new Surface called?

Iain: The Surface Book. Yea.

Jason: I am intrigued.

Leo: I bought one.

Jason: You bought one? I’m super intrigued.

Leo: I hear you but—

Iain: I was, I’m getting, I don’t know. It’s a very interesting play by Microsoft because with your hands on it it’s a lovely bit of engineering.

Jason: Have you had your hands in it?

Iain: Yea, yea.

Jason: And the hinge. Tell us about the hinge.

Iain: Bizarre. The hinge worries me.

Jason: So less worthy.

Iain: Yea, I mean the hinge, I hope to goodness they’ve actually done decent engineering testing on that because the hinge looks like the first point of failure.

Jason: It’s like the falcon doors on the Model X.

Peter: But it doesn’t lay flat.

Leo: The idea is that, you’ve had this happen. Where you have a computer and it’s a touch screen and you push it and it falls over.

Jason: Yea, it sucks.

Leo: So the idea is it changes the way the center of gravity on the thing by extending the—

Iain: There is another reason however. You’re—well, you’re both using Apple products. And you notice how the keyboard is recessed?

Leo: Yea.

Peter: Yea.

Iain: To avoid having the screen touch the keyboard.

Leo: No, but this was a big problem on this for a long time.

Jason: You had the keyboard on the screen.

Leo: These keys were hitting on the screen. And so the keys never touch the screen.

Iain: With the Surface Book the keys don’t touch the screen. So that’s one of the reason’s they’ve got it in there.

Jason: When you hold it like this can you see through it? Is it like a little bit of space in there in the gap?

Peter: Yea. There’s a gap. There’s a gap. Yea.

Jason: So you could get dust or like if you had cookies in your bags, things are going to get in there.

Leo: All going to fall in there.

Iain: Exactly. And this is something else—

Jason: So you’ve got to get a little bag.

Leo: And you’ve got a pen, a magnetized pen on the side which is also going to fall off in the bag.

Jason: This is like this kind of stuff is now, I basically typed in MacBook and this was $15 bucks on Amazon and it looks beautiful and it’s like fake leather but you put your little MacBook in it, you’re fine.

Peter: Yea.

Jason: Beautiful.

Peter: I mean it’s—

Jason: I’m going to buy one.

Iain: It’s in no ways as cheap as a –

Leo: Oh, it’s expensive.

Jason: How much is it? $1,500?

Iain: Well the top of the range model, you’re looking at like $3,100.

Jason: What?

Peter: For the 1 terabyte.

Iain: For 1 terabyte of storage—

Jason: What? A $3,000 laptop that’s like a MacPro.

Leo: The one that I got was $2,099. Because that’s the lowest model you can get with a GPU, a discrete GPU. Otherwise it uses the Intel Iris Graphics. You want a discrete GPU especially because it’s a 3,000 x 2,000 screen. And it’s an i5, it’s not an i7. And I only got 8GB of RAM. All of this will add up. But $2,099 I think is actually the price of the one you want. 256GB SD.

Iain: Bear in mind also, you’re not going to get the real GPU performance until people write code for it. So they’ve—

Jason: And it’s also running Windows 10.

Iain: Yea.

Jason: So is Windows 10 uniting everything now? Will it be the same operating system on the phones, the Surface, the Surface Book?

Iain: That’s the eventual—well, Surface Book and Surface, yes, exactly the same. The phone they’ve still got a ways to go yet.

Leo: The phone is dead.

Iain: It’s—

Leo: The phone is dead.

Jason: One operating system—here’s the thing. If one operating system unites them all, because I believe that Apple will put iOS on these—

Leo: But it isn’t. It looks like—I think you’re right but I don’t think—but, well. 

Jason: If they do that.

Leo: I hope they don’t kill OS10.

Iain: You do have the universal apps on Windows which will work on both but it is still very much a work in progress. And one of the things that was interesting from the actual device state was that the new phones they’re actually billing as, almost billing as don’t bother getting a PC, just give yourself one of these and they can plug in—

Leo: You can dock it and then you can put a screen on it.

Iain: So they may be trying—

Leo: But you’re using Windows Phone. You’re not using Windows 10.

Iain: But you’re using Windows Phone which means you’ve got no apps that you want so you know, or very few apps that you want.

Leo: The real problem that these companies are facing is nobody wants to buy a new PC. Everybody’s fine and they just launched a $70 million dollar ad. You want to see the worst ad you’ve ever seen in your life?

Peter: Oh, it’s hilarious.

Leo: A $70 million dollar ad campaign. This is Microsoft, Intel, HP, Dell and Lenovo all banding together to convince you to buy their new PCs. Take a watch here. It’s an emergency helicopter. She flips it around. My God, they keyboard is on the—and the guy’s signaling them. Instead of signaling them to take off says, “PC does what?” Now if you’ve ever been in a helicopter like you know that there’s no laptop in the world that can blast Top Gun music loud enough to hear. Meanwhile the guy—

Jason: What’s his story?

Leo: Apparently he’s shipwrecked. He has his PC.

Jason: How did he charge it? I just want to know because somehow he’s got a 20 day growth.

Leo: He’s Skyping. Wait a minute, wait a minute.

Jason: Oh, here we go.

Female Actress: PC does what?

Jason: Wha?

Leo: Not urban enough.

Iain: Why is Microsoft advertising so bad? Remember the first Surface advert?

Leo: It’s always bad.

Iain: Where they were doing that clicking thing?

Leo: Remember Bill Gates with the calzone? No, the crueler? What was that he was—

Jason: Oh my God, look at this one.

Leo: These are athletes that are distracted by the fact that their coach is rotating their screen.

Jason: Here’s the problem.

Leo: Nobody wants this. This is the weirdest one. Watch this one. We’re in a hotel. The bus, I don’t know what—first of all, elevator operator? No. Apparently this hotel has bell boys.

Jason: Of course.

Leo: And watch what he’s doing. That’s a laptop. He’s now sliding it under the door. Listen.

Male Actor 1: PC does what?

Male Actor 2: PC does amazingly thin deisgns.

Leo: (Laughing).

Jason: Don’t listen to that. I kind of like that one.

Leo: PC does what? First of all when was the last time you were in a hotel and the bell boy slides a PC under the door? I don’t think so.

Peter: Don’t they do that for everybody (laughing). I don’t even shop for computers anymore.

Leo: One of the worst ads. These are as bad as the Bill Gates ad—it was a churro. He was eating a churro. Remember that?

Iain: No.

Jason: No. That was not that memorable actually. This might be so bad that people pay attention to it. But the thing is, when you’re Apple and they know they’re going to have to go into Steve Jobs and Jony Ive or whatever, show it to him. And they know they’re going to get reamed no matter, even if it’s good they’re going to get reamed. Like that’s the best case scenario is that they have to do a bunch of notes an fix it. They have to go into a meeting with HP, Lenovo, Microsoft and Intel. So there’s executives from four companies that had to approve this campaign.

Leo: That’s the problem.

Jason: That’s the issue. It’s like a consortium—

Iain: It’s young. It’s hip.

Leo: That’s what the kids are saying today.

Jason: Absolutely. My kid says that, sure.

Leo: They’re saying, “It does what?”

Jason: Well I heard them say something like “What?”

Leo: What? Huh?

Jason: What?

Leo: This is the Bill Gates churro ad. Oh wait a minute. It’s private. Oh man, they’ve obviously shut it down. This is on your site too. They paid Jerry Seinfeld $10 million dollars to do ads for Windows.

Jerry Seinfeld: Shoe Circus. Quality shoes at discount prices. Why pay more?

Leo: Two ads.

Jerry: Bill Gates.

Bill Gates: Jerry Seinfeld? I’m good. The left one’s a little tight.

Shoe Salesman: They’ll stretch.

Jerry: Are you sure they’ll stretch? Is that your toe?

Bill: No.

Jerry: What is it?

Bill: Leather.

Jason: What did he say?

Peter: Leather.

Jerry: He’s a conquistador. They run very tight. 

Shoe Salesman: Let me get the other one.

Jerry: You know what I do? I wear them in the shower. Do you ever wear clothes in the shower, Bill?

Bill: Never.

Jerry: Open the door, go about your business.

Peter: He set the brand.

Jerry: He’s a 10.

Jason: I’m confused.

Bill: Better.

Jerry: That’s a 10.

Peter: I mean in a way it kind of did because I think that Microsoft stopped being a scary company.

Leo: No, it just became a weird company.

Peter: Well you need to kind of, they needed to kind of get weird.

Jason: I have to say though, they’re really crushing it on product. I mean—

Leo: I think the Surface Book is awesome.

Jason: Outlook? The Outlook app is the best app on iOS I think.

Leo: You know why? That was an acquisition.

Jason: That was an acquisition.

Leo: That was a company.

Peter: The fact that they were smart enough—they’ve been very smart with their mobile acquisitions. 

Jason: For sure.

Leo: I agree.

Peter: Sunrise is my preferred calendar app.

Leo: A lot of credit to Satya Nadella who finally said, this is that whole thing you were talking about, the strategy tax. He finally said, “You know what? Everybody says we can only develop for Windows? We’re going to go where the customers are. They’re on iOS. We’re going to do a touch based version of Office and we’re not going to do it for the Windows Phone. We’re going to do it for iOS.” And I think that was brilliant.

Peter: But I think it’s also, I mean the reason why they’re doing the Surface Book and why they’re sort of doing hardware is realizing that if there is going to be a declining PC market, they might as well start grabbing the profits in it. I mean the profits are really only in the hardware.

Iain: Only in the high end though.

Leo: What? There’s no profits in the hardware.

Peter: High end hardware? Yes. So what they’re saying is, you know, “Yea, we’re going to screw our OEM partners, but if this market’s going down, we’re going to milk it all the way down”

Leo: I think the OEM’s don’t feel like they’re being screwed because Microsoft—

Peter: Oh they do. They absolutely do.

Leo: Microsoft’s taking the high end though, right? So you can still make a Yoga for $1,500. That’s not Microsoft’s $2,000 computer not going to do that.

Peter: They’re not happy but this is why they’ve started doing Chromebooks and hedging their bets.

Jason: You know what? They have to make products that inspire people to pay attention. Look, none of us are going to talk about the HP and whatever. Those people are not building inspiring products to lose money.

Leo: No, it’s horrible.

Jason: But the Surface is inspiring. You look at the Surface Book and you’re like, “I want it. It’s got something.” When they detached it? It was like a wow moment for the first time it came out ever.

Leo: Yea.

Jason: When’s the last time they had a wow moment?

Iain: It was fascinating in the actual event. When he actually first took it off you could just see in the journalists faces like ooh. Hang on a second. Apple’s got something to be worried about now.

Jason: You can’t do that with MacBook. My MacBook doesn’t take the top off. And you know I would like to flip the screen around and use it as a—

Leo: You know what else the MacBook doesn’t do? It doesn’t have touch. And I think Apple has said all along, “We don’t think touch is good at an arm’s length.” And I think Microsoft’s going to prove them wrong.

Jason: Oh, totally wrong because there are times when you want to touch the screen.

Leo: It’s an—you’re used to it now.

Jason: Absolutely.

Iain: And also once you get, once you get used to it—

Leo: Your Chromebook? Your Pixel has touch, right?

Iain: Once you get used to it, I mean I will go back and thankfully all my laptops are now touch. But when I use my wife’s laptop and you go, “Oh, no, let me show you. Oh hang on. You’ve got an old machine. Right. Ok. (Laughing).

Leo: There’s the keywords. Old machine. PC does what?

Iain: Please, please stop that. I wish I had never seen that.

Leo: What? What?

Iain: That advert now. It’s going to be—

Leo: Rojas does what (laughing)?

Peter: That I like.

Leo: That could be your new tagline.

Jason: Peter does what?

Peter: Hashtag, Rojas does what.

Leo: That’s a good hashtag.

Peter: Kids, make a trend.

Leo: Everybody tweet. #Rojasdoeswhat.

Jason: I think we have an episode title. TWiT does what?

Leo: TWiT does what? Our show today brought to you by FreshBooks. If you’re a freelancer, if you’re a small business, this is brilliant. I found out about this in 2004. I was going to Canada to do the TV show. I had to bill them for my expenses, for my day rate, and I had to do it in Canadian dollars. I was firing up Excel and Word to do this. It was so bad that I stopped billing them. For 3 months I just didn’t send them bills.

Jason: Right.

Leo: Month 4 I sent them a bill. They said, “What is this? We’re not going to pay this.” You got to invoice if you’re going to get paid and if you’re going to get paid you want to do it in a timely way. You want FreshBooks. It makes it easy. It handles all the currencies. It handles your receipts. You take a picture with the FreshBooks app and that receipt now becomes part of your invoice. It is super simple cloud accounting software. And if you’re a freelancer and you are still doing invoices by hand, this will change your life. You’ll literally be creating and sending invoices in minutes. If they don’t pay promptly, they’ll automatically send them a reminder. But you know what? They will pay promptly because the invoice is e-mail and it has a button that says, “Pay Me.” And it turns out your clients are as adverse to paying their bills as you are to sending them a bill. You make it easy. They pay faster. On average 5 days faster when you use FreshBooks. And if you have any questions, any problems, help is free forever from those awesome FreshBooks support rock stars. They’re in Toronto. They’re Canadian. They’re nice. They’re just nice people. 

Jason: It’s a fun town.

Leo: There they are. Don’t they look like just fun people? See, that could be Vancouver. But I think they’re in Toronto. Getting started is easy and you can try it right now free for 30 days.

Jason: Boom.

Leo: The only thing I ask. They’re going to say at some point, “How did you hear? How did you find out about this great product?” You just say, “Oh, I heard This Week in Tech.” That’s all. If you do that for me I’ll be happy and you’ll get 30 days free. And by the way your life will change. I’m telling you it is the best way to send invoices. United States—according to NBC News, the United States Department of Transportation will require at some point in the future, every drone purchase be registered with the Federal Government.

Jason: What? What?

Female Newscaster: Taking precautions are the priority for these--

Jason: Drone says what?

Leo: Drone says—well, they’re—

Peter: I totally, I totally get this.

Leo: In LA there was a problem. There were fire fighters trying to get to a fire in helicopters. They couldn’t. The planes had to— because of the stupid ass drones.

Peter: They had to clear the airspace for 20 minutes. And that actually caused the fire to leap across the highway and cause all this damage.

Iain: And there’s no legislation at the state government so the fire fighters and federal employees can take these things down if they need to.

Peter: And we’ve seen there’s been a lot of close calls with aircrafts.

Leo: JFK there was a close miss.

Peter: And so what they want to be able to do is if somebody does cause an accident, they’re going to be able to trace it back to who the drone was. And the thing is, sooner or later there is going to be an accident. It’s inevitable. People are going to die.

Jason: These jerk offs are taking these things to airports. Which is ridiculous.

Peter: People are going to die and so—

Jason: It’s like the laser pointers in the cockpits.

Peter: Exactly.

Jason: Who are these idiots?

Iain: Who does this?

Leo: There are some horrible people in the world.

Jason: How on earth would you take a drone and fly it near JFK. I mean what if you do crash into the plane? You’ve killed 300 people. It’s going to happen.

Leo: Come on, a drone’s not going to crash a plane.

Jason: If it goes into—

Peter: Absolutely, absolutely.

Jason: Birds take them down.

Peter: If a bird can take down a plane, then a drone can.

Jason: Then drones can for sure. And they’re getting bigger. And those, those batteries in those are the very dense batteries, aren’t they? Can explode.

Peter: Lithium Ion yea.

Iain: You get that in a jet turbine and it’s going to be very interesting.

Leo: When drones are outlawed only outlaws will have drones. I think we need a 2nd amendment for drones.

Jason: Oh, boy. Here we go. The founding fathers did not see a time—

Peter: If you put a gun on your drone it can’t be regulated, right?

Leo: Oh, there you go.

Jason: Exactly. No drones will absolutely have more regulations then guns ever will have.

Iain: Well NASA’s already working on a traffic control system for drones. I mean they’ve started work on that.

Peter: They’ve introduced geo-fencing for drones. I mean you can’t fly a drone over the White House now. Not at least recently.

Leo: Because some drunk landed his drone in the White House grounds.

Iain: We covered the drone gun this week. And that looks very—

Leo: The DroneDefender.

Iain: Yea. Which uses—

Jason: Oh yea, this is brilliant.

Iain: Uses radio pulses to basically put the drone into safety mode. So either it just lands itself safely or it turns back to the operator.

Leo: It’s the Battelle DroneDefender.

Jason: It puts it into safety mode?

Iain: Yea.

Jason: Ah.

Peter: So it lands, right?

Iain: Well it depends what the setup on the drone is. Most drones will either land or return them back to their—

Jason: Return to sender.

Iain: I think it’s a great idea. Because we had a, I did this story a couple of months ago on a guy who actually managed to get one of these things with a shotgun. Because it was hovering down low over his daughters in the swimming pool.

Leo: Right. There was some question about that whole story. I saw the interview of the guy.

Jason: Yea, he may have thrown the daughter, it may have been the daughters in the pool, and he felt like shooting it down. 

Iain: Given the fact that when they turned up to get their drone and were very angry with him, he was open carrying a handgun on his side. This guy has issues. But.

Leo: But if he had a Battelle DroneDefender, no problem.

Jason: You also have to consider that shooting guns in the air is probably a little more dangerous than flying a drone.

Iain: If he’s doing that—

Leo: Look at that. He’s actually bringing it down.

Iain: No, he’s not unfortunately.

Jason: He’s pretending to.

Iain: I spoke to Battelle about this and—

Leo: It looks like he’s bringing it down.

Iain: It does look like—

Jason: It’s a gravity ray. It’s a gravity ray. Tractor beam. That’s actually Darth Vader.

Leo: I need a tractor beam.

Iain: I mean the guy that builds this said, “Look. We’re trying to avoid damage at any time possible. We can’t control the drone, but what we can do is either get it to land or get it to bugger off.” So you know—

Leo: It’s not John Battelle, is it? It’s some other?

Iain: No, it’s a non-profit.

Leo: Because this man is a renaissance man (laughing).

Jason: Industry standard, to the Web 2.0 conference and now Battelle’s DroneDefender, brought to you by John Battelle.

Leo: Ok.

Jason: These things are very powerful. I mean the advancements in drone technology have been nothing short of phenomenal. Like the fact—

Leo: And by the way you can credit the smartphone for that.

Jason: Absolutely.

Leo: Because most of these technologies were developed for smartphones.

Jason: All the sensors. And they’ve become so safe now. I was flying one out there at Chris Anderson’s 3DR out in Berkeley. And he was showing me some of them. These things were going 50, 60 miles per hour in the air.

Iain: Well they’ve got drone racing.

Leo: Drone racing sounds awesome.

Jason: These are the, yea. He was showing me the unregulated ones. When they sell them they have regulators on them so they can only go maybe 20 miles per hour. But the speed and accuracy and the ability to not crash them on people’s heads now is phenomenal. If they lose range, they come home. They land within 3 or 4 feet of where they took off. And if you say, “I want to go down.” You used to push the throttle down and they came down as fast as possible and broke into pieces. Now if you put the throttle perfectly down, it comes down at a graduated pace.

Leo: Oh yea, it’s amazing.

Jason: And they’re going, these next versions, with light arm, whatever computer vision, you’re going to try to fly it into a wall, and it will stop. And it won’t let you. So they’re getting safer but I don’t know if I’m ready to live in a world where people are just flying these through cities and over people’s houses. There’s going to be have to be some new regulation around how high over my house you can be.

Leo: This is drone racing. You wear a VR helmet while you’re steering the drone so you feel like you’re flying in the drone.

Jason: I’d puke on that.

Peter: You get licensed. If you want to drive a car you get licensed. You register cars. We live, we somehow survive that. We kept our freedom, so.

Jason: Here’s the thing.

Iain: And somehow you can still buy a gun anywhere.

Jason: You can’t take your car over somebody else’s house and I think there’s going to have to be some limits set to how high above my personal residence you can go. Because we had this issue in LA where helicopters, the rule was they could just, it’s safety. So they can go as long as they want as long as it’s safe. And they were coming to the 405 in Brentwood and Bellaire during rush hour with 5 helicopters. And all of the communities got together and said, “Listen. You guys are way too low. And you’re waking up all of our children at 11:00 at night.”

Leo: Why is it? You know we’ve had remote controlled planes and helicopters for ages. Why is it there’s such an issue with drones? Is it because it’s so easy to fly?

Jason: Easy.

Peter: It’s a combination of the technology, the ease of use and the cost coming down.

Iain: The radio controlled, the bulk of the radio controlled stuff was aircraft and you needed a certain amount of time, a certain amount of space—

Leo: It’s all fun and games.

Iain: Yea, it’s all fun and games until you hit the mesh. I mean but –

Peter: But also the addition of the fact that you can add a very cheap digital camera now which was very—I mean 30 years ago this really wasn’t a thing. But I mean, you know imagine the scenario like you live in an apartment building in New York and someone flies a drone up to your window and just parks it right out there. Camera on. It’s a live feed. I mean, it’s a public space. Is that something that’s legal? Because it’s legal to walk around and take photos of people on the street, right? You can do that. We all understand that. But clearly most people would feel like a camera attached to a drone outside of their bedroom window in an apartment building would make them really uncomfortable. That’s clearly not public space anymore.

Leo: All right last story and I’m very curious what you guys think about this. Theranos.

Peter: Oh my God.

Leo: So big unicorn, a young women who was at Stanford decided she, in 2003 that she was going to invent a way to test blood with just a few drops. Instead of the vial that they have to draw. Formed a company called Theranos in 2003. Got people like Larry Elliston to fund it to the tune of $400 million dollars. Got 2 US Secretaries of State, former US Defense Secretary, former Chairman of the Senate Armed Services Committee on the board of directors.

Jason: These sound like really respected investors. Oh wait. They’re not.

Leo: They’re not. But what’s interesting is if it were real, Theranos would be a great investment. It would change—

Jason: It would be huge.

Leo: The way we do blood tests. It would make it possible to go into a drugstore, get a drug test—

Jason: Without getting blood pulled.

Leo: With just a pinprick. However the technology has been a little bit troubled.

Iain: That’s a polite way of putting it. 

Leo: And unfortunately now the Wall Street Journal has published information that this $9 billion dollar company may not really have technology that works.

Jason: This is, this is going to be, I’ll predict here that this will be an Enron-like cratering for this company. There is a very significant chance that the whole thing’s a fraud. From the people I’ve talked to. Now this is all rumor and speculation but the Wall Street Journal does not put itself, it’s publication on the line. This is not a blog. This is the Wall Street Journal that did a very long, investigative journalist piece. Continue.

Leo: They—of course blood tests are regulated. The FDA regulates them. And the way they generally do this is they send samples to the company that’s doing blood tests and check on them. It turns out according to the Journal that Theranos had its own Edison blood test machines but they also had other blood test machines made by other companies which take larger samples. And that when they got a sample, I don’t know how they knew, but when they got a sample from the FDA they wouldn’t use their blood tests machine but they used the 3rd party. So they were able to get certified, the implication is, kind of by skating around the regulations. The real question is if the Edison works at all. And also by the way, in order to get these small samples to work in a larger machine they have to dilute them which produces not maybe the best results. In fact the whistle blowers who went to the Wall Street Journal said things like, “We would test people with potassium levels. They’d be dead if this was the actual potassium level.” It’s fatal.

Peter: Jean-Louis Gassee, the ex-Apple guy, and ex-BeOS, he did, he actually wrote a thing where he did some tests and he actually had it run by both. And the tests results from like the Stanford lab versus Theranos where actually pretty like different enough that he was really concerned. 

Jason: This is life and death.

Peter: He contacted Theranos and he was like, “Yea, could I get an explanation for the variance in the results?” Nothing.

Jason: This is the worst kept secret because I have been hearing about this for years.

Leo: Now, this woman who created this. She dropped out of Stanford at 19.

Jason: This is the big issue.

Iain: She is phenomenally well connected.

Leo: Her name is Elizabeth Holmes. She is very attractive which certainly helps.

Jason: The big issue here is the narrative exactly as you’re describing it is, people wanted her to be the next Steve Jobs. People wanted her to be the Zuckerberg who dropped out of college. And we all want to see more female executives and we want to see more diversity in the industry. And this is maybe what happens when people want to see that a little too much. And the investors were not sophisticated and nobody on the board has a medical degree. And nobody has vetted the technology. And I overheard conversations about this in the past couple of years.

Leo: It’s been a drum beat for a while, hasn’t it?

Jason: It’s been a drum beat for a while. It’s been, like I said, a worse kept secret in Silicon Valley that this holding could be a fraud because from what I heard, investors who wanted to invest in it who were serious investors, and she has no serious investors, the blue chip investors were not allowed to do due diligence. What is due diligence? Due diligence is when you go in and you verify that what somebody is telling you has happened. I’m an Angel investor. Of the last 100 deals I did, 3 of the deals I did did not pass due diligence. In other words there were things that were material in Angel investing that in my very cursory, you know we’re talking about putting 10s to 100s of thousands of dollars into a company, did not cut the mustard with me and my team. This is 100s of millions of dollars. It’s a $400 dollar crater that’s going to happen. And people’s lives are at risk. If this turns out to be the level of fraud that it is, it is a demented, deranged situation because what person would play fast and loose with people’s health and a co-founder committed suicide and his spouse said that, she says that the suicide may have been related to this not working. The technology. Now the spouse, and this happened like a year ago. Or I think the suicide. The spouse owns the shares in the company. So the way I look at game theory, if the spouse has equity in the company, and she is willing to say in her husband’s suicide that this company could be a fraud, she’s going to kill her own equity in the company.

Leo: Well worse than that because actually—

Jason: Because she must have a big moral burden.

Leo: She’s the wife of Ian Gibson, Gibbons rather who was the British bio-chemist. After she spoke to the Journal, she received a threatening letter saying, “We will sue you if you continue to make false statements about Theranos.”

Jason: I hope that this is not what it is but I’ve seen this movie before. And I watched a video of her and just like, you know—

Leo: Do you think Ms. Holmes is actually actively involved?

Peter: I don’t think this is like—

Jason: She can’t not be.

Peter: -- a scam in the sense that she set out to rip a bunch of people off. I think that she—

Iain: She just can’t get it to work.

Peter: -- has this vision for a company. She hired people to help her realize the vision. This Ian Gibbons guy, he started to develop the technology. It didn’t pan out. 

Jason: And she couldn’t admit it.

Peter: And she couldn’t admit it.

Jason: That’s exactly what it is.

Leo: And it was not possible to do a blood test with a fractional—

Peter: What she wanted to do, her vision for what they want to do is not feasible at least with current technology and what do you do? You’ve raised hundreds of thousands of dollars.

Jason: It’s very simple. What you do is you go to your investors and you say, “Thank you for giving me 20 million dollars to figure this out. It didn’t work out. What would you like me to do? Shut the company down, return the last million, you all take a write off?” We’re all big investors here. Like the whole—

Leo: This is what happens.

Jason: This is what you’re supposed to do.

Peter: It is so hard for people to actually do that. I know, that would have been the right thing to do.

Jason: Is it? Is it, Peter? I don’t think so. I don’t—I mean it is hard to do, but it is what you’re supposed to do.

Peter: No, absolutely. And like we’ve had like founders at Betaworks who you know—

Jason: Of course.

Peter: They worked on something. It didn’t work out. They didn’t return the money. Which is very rare, but it does happen.

Jason: Then you know what happens? You build credibility with the investment community and you get invested in again.

Peter: Look at Ed Williams.

Jason: Exactly. He went with Odeo, and he’s like “Hey, Odeo is not working out.” They were like, “Do you want the money back? I’m going to start this Twitter thing.” Seems to be working out. The Skunk Works project. Same thing with Stuart Butterfield with Slack. And both Flickr and Slack were side projects that worked out. If this is true and it turns out to be this way, this is a deranged person or a person like Bernie Madoff who—you know, Bernie Madoff may have been a great money manager for some number of years, then he had a bad couple of years and he tried to cover it up like you were saying and the lie grew and grew and grew.

Peter: That’s what I’m saying. Like she got herself to a point where she did not know how to extract herself.

Jason: But it’s unforgivable, it’s unforgiveable. It’s people’s health. If it’s true.

Leo: We should be clear. This is speculation. If this happens—

Jason: This is the Wall Street Journal doing a really big investigative piece so we’re beyond speculation. We’re getting to the facts.

Leo: Based on what the Journal said, this is very damning.

Jason: It’s disconcerting to a level that if it is true, this is what I’m saying, there’s a—in my mind, 1 or 2% chance that this is explainable.

Leo: Right.

Jason: There is a 98% chance that this—

Leo: They hired a heavy hitter attorney David Boyce.

Iain: As a journalist the biggest thing that the story, that really got me about this story was after that Wall Street Journal piece had come out, they should have come out fighting, made public demonstrations about what it’s done, and they haven’t done it. They made me really, really nervous.

Leo: Well the hunkered down and hired-

Jason: Look at this quote.

Iain: Yea, exactly.

Jason: First this is, this is on October 16th.

Leo: On the Twitter account.

Jason: On the Theranos Twitter account Holmes is saying on Jim Cramer, “First they think you’re crazy, then they fight you, and then all of a sudden you change the world.” Like in the face of this you’re doing platitudes on Jim Cramer and you’re hiring David Boyce who is the attorney you hire when you’ve got something, you know, very serious going on right?

Leo: Yea.

Jason: Like this is not—when David is your spokesperson, things are bad in all likelihood.

Leo: He represented Microsoft, right, in the Department of Justice.

Jason: You’re guilty. It’s a good chance you’re guilty when he’s the guy who’s representing you.

Leo: He’s the guy you hire if you really needed somebody. David, I’ll hire you, I promise when I—

Peter: Yea, no, no. And he’s not cheap.

Jason: Here’s the other quote. 

Leo: And he’s very expensive. But she’s got money. She’s worth $4 and a half billion.

Jason: Well, on paper.

Leo: On paper. 

Jason: I mean she started this company when she was very young. But look at this. “We love a reporter—“ This is a weird tweet too. I mean whoever is doing this PR is deranged. “We love a reporter who does her homework. #ironsisters @business and @CarolineYLChen set the record straight in Bloomberg. 

Peter: But if you read the story it’s actually not that positive of a story. 

Jason: It’s not that positive of a story. Like you can’t come out and then be attacking reporters and championing reporters when somebody’s health’s on the line and you’re saying 1 out of 250 tests or 240 tests are being actually done.

Leo: She says, she told Jim Cramer, “We offered to bring our technology to the Wall Street Journal offices and they denied that request to show it to them.”

Jason: This is really weird. The whole thing is…

Leo: It doesn’t seem like the way the Wall Street Journal would work.

Iain: No.

Peter: You know what it reminds me of? It actually reminds me of a Kickstarter campaign gone bad. Where you have something, you build something.

Leo: You mean like the Laser Razor?

Peter: Well maybe not that bad. But you know, you have somebody who’s very enthusiastic. They’ve invented something or have something and it turns out that commercializing it or actually delivering on the promise on the price and all this stuff which is not as easy as they thought it was going to be. And like Jason’s saying, the right thing to do is you refund the money, or you give the money back to the investors, you know. Instead, you know, and I think it’s actually partly if you look at probably her board, the board—

Jason: The board is made up of a bunch of generals and senators and…

Peter: The board is like, “Nope. Build a wall and you know.”

Leo: That would be the natural response.

Peter: We have siege mentality.

Leo: She’s got John McCain tweeting that he’s seen the technology and it’s wonderful.

Jason: Yea like when you’re in—

Leo: Because John McCain would be an expert.

Jason: Can we get like somebody with a PhD and biology to just come in here and take a look?

Iain: Yea, exactly.

Jason: And that’s the thing I heard was that the investors were not allowed to—

Peter: Henry Kissinger is a board member.

Leo: Is he really?

Peter: Yea.

Leo: Wow.

Jason: When you go to these old guys—

Peter: Think about, think about just that for a second.

Jason: This is somebody, from what I understand, it’s like going to the TED conference, finding all the rich old guys, putting them on your board, getting their money, and then you have nobody to answer to.

Leo: I’ll tell you, if I were going to perpetrate a fraud, I would do exactly that to give myself, to get that kind of people on board.

Jason: You’ve got the weight. Henry Kissinger, John McCain, whoever.

Leo: But those are not as you point out medical experts.

Peter: I don’t think she came, I don’t think she came out of this like, “I’m going to do, I’m 23, I’m going to this long con.”

Leo: Because that was a long con.

Jason: No, definitely not a long, yea.

Leo: It’s 12 years.

Peter: I think she got in over her head.

Leo: I think you’re right. I think that’s like a sensible, a sensible explanation.

Jason: The Kickstarter is the perfect example. But what it’s going to do for the, for the technology industry is it’s not going to be an Enron like event I believe if this, you know, in the 90+% chance it turns out to be a fraud which is what I would, as a journalist that’s covered this space for over 20 years, this feels 90% chance of fraud, to me. I’m just setting a line here. I don’t know, to be clear. Don’t sue me. I’m setting a line. And if it is this way, then in my experience, this becomes a watershed moment for this moment in time, for this investment cycle of every other company needs to be investigated. There’s going to be other ones. And then is it going to be a WorldCom, Enron, remember that whole series of companies that were cooking the books.

Leo: And thanks to which we have Sarbanes-Oxley in regulation, federal regulation.

Jason: Right. This whole thing could take down the whole cycle. This could be the beginning of the end of the cycle. And that’s why this is like—

Peter: But this, this is a bio-tech so it’s different than a lot of I mean. Just because bio-tech companies are having problems doesn’t mean that—

Jason: Hopefully it’s an isolated case.

Peter: And there are like plenty of people who are going to be happy to see Draper Fisher and Larry Ellison lose their money.

Leo: (Laughing).

Jason: (Laughing) it’s just deranged. I mean if—

Leo: But what about that Laser Razor? Because I really—

Peter: It got kicked off Kickstarter.

Leo: I know.

Jason: It looked so promising.

Peter: And now they’re on Indigogo which is—

Leo: They haven’t raised quite as much on Indigogo though.

Jason: Wait a second. Really?

Leo: Yea.

Peter: They switched to Indigogo and I think they have not hit their goal.

Jason: So…

Peter: But the product is clearly not—

Leo: Functional.

Peter: Functional or something that they should be raising money for.

Leo: They didn’t even have a prototype.

Jason: Peter, Kickstarters, you need to have a functioning prototype. Idigogo you can make up whatever you want.

Peter: Kickstarter has a much higher standard, Indigogo—

Jason: Explain it. I don’t understand.

Peter: So Kickstarter, so—

Leo: I have to say, there’s plenty of fraudulent stuff on Kickstarter.

Peter: Absolutely. But they’re trying to weed the stuff out and they’re trying to make sure that you have—

Leo: The battery you charge from the air? Like that would pick up electricity in the air?

Jason: Oh. Well, isn’t that special.

Leo: Apparently there’s quite a bit floating around.

Jason: Very good.

Peter: Kickstarter is trying to be good.

Jason: Sounds great.

Peter: Actually reincorporated as a benefit corporation.

Jason: Right. No, I believe Kickstarter is—

Leo: Which makes them what, a charity, like a charity?

Peter: Not a charity but they have to, there has to be like a public good element to what they’re doing.

Leo: The standard is higher? Ok, good.

Jason: The B corporation is a really interesting formation. It’s like a C corp, like a standard C corporation for profit but you have to have a corporate mission, and then you have to live up to that mission and then—

Leo: And who regulates that?

Jason: That’s the question. The government is now recognizing these in about 2 dozen states right now and they’re building the regulation around it. And what it basically means is you set your corporate mission and then your board has to hold you to that mission. So TOM’s Shoes, or before that, what was the ice cream company? Ben & Jerry’s. They can say, “Hey.” Or Paul Newman’s which was a non-profit but it was a for-profit. They say, “Paul Newman’s is going to give all its proceeds and our job is to be organic.” Or whatever. And then the board hold you to your mission statement.

Leo: I like that.

Jason: I’ve invested in one company that’s a B-corp. It was one of the 1st B-corps called Handup. And I was the 1st investor in it. And they’re making software, a software program for homeless organizations to make, essentially Kickstarter profiles of homeless people who can then put on what they’re trying to raise money for to get out of poverty.

Leo: By the way the Laser Razor has raised enough money on Indigogo. They are funded.

Peter: They did. They must have just done it recently.

Leo: They did what is called flexible funding which means it doesn’t even matter. You pay whether they raise the amount the asked for or not. Their goal was $160,000. They’ve raised—apparently there are still 2000 people who believe in the Laser Razor. $336,000 dollars.

Jason: If it’s a research project and everybody knows up front, this is what happens to these platforms. Indigogo will be the platform which will be the speculative, I believe that maybe there’s a chance you could make this work. And Kickstarter will be the platform where like I am at least going to get the product delivered. It may suck, but I will get the product at some point.

Iain: I was going to say, I mean every single Kickstarter I’ve invested in has turned in late. Seriously late.

Jason: For sure.

Leo: Oh yea. I’ve got a few things. The Joey Bra. That was great. That was a bra that you could put a phone in. Didn’t fit. So I found somebody with smaller breasts (laughing).

Iain: It’s very brave. I think it’s very brave of you to come out like this and you know.

Jason: Wow.

Iain: The mental image wasn’t quite accurate.

Leo: Joining us this week. Boy wasn’t this the best show ever?

Peter: It’s pretty good.

Jason: It’s a battle.

Leo: Call me Caitlyn, my friend. Jason Calacanis, Peter Rojas. They came up here together. I hope they’re going to leave together as friends.

Jason: We will.

Leo: Even though he’s a terrible bomb diffuser. Terrible.

Jason: Great dispatch.

Leo: Good at dispatch, not so great at field.

Jason: He’s great, great as air controller.

Peter: You know, if I have a great support staff I think I actually could get the job done. I don’t know.

Leo: (Laughing) are we going to make a special out of that or something? We should do something.

Jason: That’s got to be.

Leo: We should do a little special out of the—anyways, it’s been great to have you both. And congratulations, Peter, you moved to the Bay area. That means you’re going to come here more often, right?

Peter: Yes I did. It’s a lot easier now for me. And I really only like to be here in the studio.

Leo: It’s fun, isn’t it?

Peter: To me via Skype is just so, yea.

Leo: It’s so much more fun.

Peter: It’s not, yea.

Leo: And then of course, #rojasdoeswhat.

Peter: There you go.

Jason: Rojas said what?

Peter: Make it trend.

Leo: Rojas did what?

Peter: Is it trending yet? Is it trending nationally yet?

Leo: the great Ian Thomson. Always wonderful to have you too.

Iain: Always fun to.

Leo: And remember when you try to follow him on Twitter, he spells his name in an unusual fashion.

Iain: Yea my parents and I had words about that one.

Leo: I-A-I-N-T-H-O-M-S-O-N

Iain: Well Lane I see. I get a lot of Lane over here. Oh, you’re Lane Thomson.

Leo: Lane? Aye, aye, aye, aye, aye.

Peter: You might just want to consider changing your name. It might me a little easier.

Iain: I was here first, damnit.

Leo: (Laughing) It’s traditional. This is the traditional real spelling of Ian.

Iain: Well my dad’s a Scott so he always wanted the Scottish spelling in there.

Leo: Congratulations on losing to Australia in the Rugby World Cup.

Iain: It’s tradition. And if you lose to anyone you might as well lose to Australia.

Leo: (Laughing) It’s tradition.

Jason: (Laughing) We are perennial losers.

Iain: Well no, it’s. I mean when it comes to Scottish sport, there’s a mobile series called Red Dwarf where they actually joked about it where Scotland still managed to get knocked out in the first round of the World Cup despite genetically engineering their goal keeper to be 9 foot tall and 18’ wide. 

Leo: That didn’t help. If you enjoyed this week TWiT, man we had a great week all week long. And here’s a little bit of what you might of missed.

Narrator: Previously on TWiT.

Leo: Ok, Marty. All you have to do is get in that DeLorean. We’ll add 1.21 gigawatts of power and you’re going to 2015, Marty.

Narrator: Security Now.

Steve Gibson: The big news of the week, LastPass was being acquired by LogMeIn.

Joe Siegrist: And I know people are kind of fearing that something is fundamentally going to change but I’m here to say that that’s not going to happen.

Narrator: This Week in Law.

Mary Anne Franks: Well I think what we’ve seen in California is there’s a much more attention being paid to the issue of non-consensual pornography and isolation and talking about all the different ways in which one can attack that problem. Why do people post pictures of other people without their consent? Why there is an entire industry of consumers that are looking for revenge porn, that that’s what they’re searching for?

Narrator: The New Screen Savers.

Leo: Loved this movie but as a lot of people who were fans of Steve Jobs, and I know there was a lot of controversy around this movie, it’s not a bio-pic.

Danny Boyle: I much prefer the Shakespearian approach is you take a historical figure, and take some basic elements of them. You don’t slander them. You don’t invent stuff that is completely unreasonable.

Leo: Richard the III’s family would have been thrilled about Shakespeare’s treatment of him (laughing).

Narrator: If you missed TWiT this week, you missed a lot.

Leo: And we’ve got a big week coming up. What’s ahead, Mike Elgan?

Mike Elgan: Coming up this week, IBM reports earnings tomorrow which is Monday, October 19th. HTC is holding a press event the next day on Tuesday, October 20th. Verizon and Yahoo also have earnings that day. Twitter’s developer conference called Twitter Flight is Wednesday, October 21st. E-Bay reports earnings on Wednesday as well. And October 21st is also Back to the Future day. It’s the date when Marty McFly time travels from 1985 to the future to save his kids in the movie Back to the Future II. It also happens to be the day when the world’s first hover board chips from a company called Arx Pax. And Thursday, big day for earnings. Expect to hear from Alphabet, the company formally known as Google, as well as Amazon, Microsoft, AT&T and Pandora Media. For all this and the rest of the news this week, tune in to Tech News Today at 10:00 AM Pacific, 1700 UTC at Back to you, Leo.

Leo: Thank you Mike Elgan. One more thing I’d like to add, we have the t-shirt, the new TWiT t-shirt. I’m so excited. This is the, I think, the most interesting and many agree now at the office. The best looking t-shirt that we’ve ever done. A great design we got from 99designs. Look at that. Isn’t that cool? So here’s the deal. It’s at Teespring. T double E And as always with these, this is a limited time shirt. So what we’re going to do is we will give you a chance to buy it through November 10th. After that we will never make any more. That makes it a little bit I think more special, right? So the TWiT fall 2015 shirt is now available on Teespring. You’ve got 23 days to order. We do have women’s sizes, men’s sizes. Go to the website. Teespring. T double E for the new TWiT fall 2015 t-shirt. What do you think of that hover board? Is that really, can you really, can it, does it really hover? It’s going to be out on Wednesday.

Jason: Are these hover boards the ones that have the cooper underneath it?

Leo: This is not the cyber boards. This thing floats.

Iain: Yea but you’ve got to have a magnetic strip underneath.

Jason: Yea it needs to believe is copper underneath.

Leo: It’s a mag-lev hover board.

Jason: Yea so what I was told, we were going to have one of these versions at the launch festival last year and we were going to try to have Tony Hawk skate on it. I don’t think it was this one. And they were like, “We’ve never really built the, a big base for it.” So you have to build like some huge copper base and then it will hover. And Tony Hawk really wanted to skate on it.

Iain: He did for like 7 minutes.

Jason: He did later. He did?

Iain: And then it’s, seems like you’ve got 7 minutes, 7 minutes of life on it and then you just poof.

Jason: Yea I mean if we, if we put copper on the floor of every street it could work, but.

Leo: Tony Hawk.

Jason: Yea.

Leo: On the Endo.

Dave Carnie: Hi I’m Johnny Knoxsville and I’m going to show you the hover board.

Leo: It’s more like a Johnny Knoxsville kind of a thing if you ask me than a Tony Hawk. I can’t imagine you could control this in any way.

Tony Hawk: You’ve got everything you know. 

Leo: There’s no wheels. There’s no friction. It’s basically you’re on ice.

Iain: Yea. It’s, it’s one of those devices that existed because enough people wanted it to.

Leo: Yea, because of Back to the Future is why.

Jason: Yea.

Iain: Yea.

Leo: I also wanted flying cars but I don’t think that’s such a good idea either.

Jason: Yea so like they have the skate ramp in the back.

Leo: Yea.

Jason: But you notice he’s just on the front.

Leo: Yea, he’s never on that.

Jason: So it’s a little bit of a fraud going on here probably speaking of like tech frauds. Like I think it’s probably like a little plate over there and then the back is the ambition, right?

Iain: Yea.

Leo: Someday you could skitch.

Jason: Like I want to know exactly how big that floor is in front of him there and what’s going on underneath it. Well no, maybe he is going up on the ramp. Ok, wait a second I take it back.

Leo: Oh, you can. You can. He can ramp it.

Jason: It’s a very small ramp but you see it’s made out of like some—

Leo: It’s copper. It’s got to be conductive. It’s a super conductor right? Or no. Mag-lev.

Iain: And also because he’s having to provide his own friction on this.

Jason: Wow this new board has succeeded in making the world’s greatest skateboarder look horrible. Congratulations. You just—

Leo: (Laughing) You’ve invented the future, Marty.

Jason: The future is the most skilled skateboarder looks like an idiot. Wow. Look at him. He’s spinning like a fool.

Peter: It’s a level playing field finally.

Leo: Finally. That’s what we wanted.

Jason: Finally Leo you can be as good as Tony Hawk at something. You can fall on your back like Tony Hawk.

Leo: Rojas says what? Our show today, thank you very much for being here at 3:00 PM Pacific, but a little earlier we had that fun game and maybe we could get that out as a TWiT special. We do this normally at 3:00 PM Pacific, 6:00 PM Eastern time, 2200 UTC on Sundays. Please stop by. If you’d like to be in the studio, we had a great studio audience. Very patient, long time in the show but I hope the seats weren’t too uncomfortable. You can always e-mail

Jason: And we’re halfway done. So everybody can settle in.

Leo: This is our bathroom break we’ll be back for the 2nd half. No.

Jason: It’s like Star Wars. You know in Star Wars when it comes out they’re going to do a marathon that starts at 4:00AM.

Leo: Watch all of the movies.

Jason: All 6. And then you watch in 3D part 7.

Iain: Oh good great.

Jason: I think I’ll start at episode 4. I’ll come for episode 4 and then I’ll do 4, 5, 6, 7. I’m not doing 1, 2, 3. Maybe I’ll do 3, 4, 5, 6.

Iain: I still haven’t seen 2 and 3. After 1 I couldn’t bring myself to watch it.

Jason: 3’s very good actually. I like 3.

Iain: Really?

Jason: Just for the like—

Iain: I just looked it and said—

Jason: The Obi-Wan, Anakin you know, lobby scene is great.

Leo: Which is the one with Jean-Luc Picard? That’s the one I want to see.

Jason: He’s not in that series.

Leo: Thanks for being here! We’ll see you later. Another TWiT is in the can.



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