This Week in Tech 545

Leo Laporte: It's time for TWiT, This Week in Tech, we have a great, smart panel for you. Tim Stevens is here from C Net, from Stratechery, Ben Thompson, my buddy Steve Kovach from Tech Insider, and we are going to talk about the latest news. Yes, some CES news, autonomous vehicles, the future of the auto industry, but there's also watches and VR and all sorts of tech next on TWiT.

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Leo: This is TWiT, This Week in Tech, episode 545, recorded Sunday, January 17, 2016.

There's a Literal Frog in My Throat

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It's time for TWiT: This Week in Tech, the show where we cover the week's tech news. We have a great tech panel for you. We've brought in the heavy hitters, the smart guys. Start with Tim Stevens. He is from C Net, but also from a brand new publication on C Net, congratulations on the road show.

Tim Stevens: Thank you, Leo. We just launched that at the Detroit auto show this week, it's been a great first week. We're excited to have it out there in the wild and public eyes finally.

Leo: Timing couldn't be better. Everybody is very interested in autonomous vehicles, what is going on with cars. It's not any more you want a Corvette or a Mustang, it's gotten to be a very interesting, almost a consumer electronics subject these days.

Tim: Absolutely. We're seeing more studies that show that people are making buying decisions about cars more about what their phones can do with their cars than what is under the hood, so we're trying our best to bring that information to the readers.

Leo: Well somebody who is also very interested in all of this, he joins us from Taiwan, Ben Thompson of Stratechery.com and the exponent FM podcast. Hey, Ben, good morning.

Ben Thompson: Good morning!

Leo: How early is it?

Ben: It is 7 AM.

Leo: It's not that bad. You normally get up at this hour, no doubt.

Ben: Yes like all bloggers do.

Leo: Bloggers love getting up and seeing the sun rise.

Ben: It's better now, because during daylight's saving time, I have to wake up at 6. Winter is easier.

Leo: Welcome. I'm so glad you make the time for us. We really love your input. Also joining us, and we're thrilled to have him, Steve Kovach. He is from Business Insider, but he is now Deputy editor of their newest publication, techinsider.io. Last time you were here, you were just getting that started. It's going well?

Steve Kovach: Yeah. I think we're six months in now, and everything is chugging along. It's really impressive. We just finished our first CES, now we're going to do some big things for our first full year out there, so I'm excited.

Leo: It is a wide ranging... best pizza place in New York City, here's what gravitational waves are and how they could change physics forever. It's a mix! Lake Eerie can get extremely violent and here at the photos to prove it. The sexiest doctor alive. It's really wide ranging.

Steve: So there's a lot of digital culture, that's what that Instagram doctor guy is. I'm in charge of the nuts and bolts gadget coverage, but we're pretty diversified, and the whole idea is to cover things, the broad theme of the site is innovation and what technology enables us to do. That hot doctor wouldn't exist without Instagram.

Leo: That's true!

Steve: It's a different approach to technology journalism, I think.

Leo: I was looking at i Justine's feed the other day. We love iJustine, she got her start on this network and I've watched with great pride and interest in her success, but man. It's interesting to watch her Instagram feed. The most recent one is her jumping in the air, and there are a lot of them like that; I think 20,0000 likes. Immediately. Did you see the video of the guy's notifications....

Steve: Oh yeah, and it just blows up his home screen?

Leo: That's crazy.

Steve: That's why if you're an Instagram star, you never turn on lock screen notifications. It just whizzes by.

Leo: I'm going to find that. It was a sports thing or NFL or something.

Steve: I forget how he was famous. We posted it on the site too, I was just blown away by it. I didn't know the iPhone could do that.

Leo: What 8 million Instagram followers does to your notifications. Take a look. Can you see me? You can't see me. There we go. Look at that. I didn't even know the iPhone could do notifications that fast. Just watching my notifications flow in. Wow. Those are all likes. Jimminy Christmas. So you did have a story that's probably more important than how many Instagram likes. By the way, it's Demi Deseus who runs a soccer focused Instagram account @433. I've never heard of, but I guess if you were a soccer or football fan you would. SpaceX had a launch and attempted landing today that failed, we should mention. They were trying to do what they've already done once before, which is land the first stage successfully so it could be re-used and unfortunately this case apparently one of the struts snapped. We weren't able to watch the video, Musk said the residual pieces of the crash--Elon Musk we're talking about-- are bigger this time compared to the first two. Similar landing attempts last year. But from the looks of it, at least some of it survived, of course this is important to SpaceX and to space in general because one of the big costs of launches is that these launches are one time use and they're gone and very expensive to build.

Tim: The last landing they had blew up spectacularly. It looks like this one got toppled over. That's an improvement. The one success they did have was on solid ground, and they're still trying to do the drone ship landing successfully. They haven't managed to pull that off just yet. If they can do that, they will do that in California, which is what they want to do. We'll have to wait and see, but I guess it was somewhat rushed yesterday, which probably didn't help matters at all.

Leo: Also, there is a little bit of vying between Jeff Bezos and Elon Mus because Jeff Bezos did successfully land one of its stages. They're measuring. It's OK. A little competition. It's good. Civilian Space. We talked yesterday on the New ScreenSavers, Jason Calacannis was my cohost about Elon's plan to provide global Internet with some huge number of low earth orbit satellites. Jason pointed out one of the reasons he can even contemplate this is he happens to own a rocket company so maybe there is some sense in launching this. How many was it? Was it 400? 500? Low earth orbit? All right. Let's get back to the topic at hand. You didn't go to CES. Tim was at CES. Ben, you didn't go to CES. You got other stuff to do. You went, Steve.

Steve: I saw Tim there at the Faraday future keynote thing.

Leo: Faraday is one of the electronic cars, one of the new ones in the business, and they showed off a concept car. Faraday has yet to show any real product. What do you think, Tim? Are they credible?

Tim: They've definitely got a lot of funding. That was one of the big things that they talked about at the event at CES was the backing from LE TV which is a major Chinese and media conglomerate. They've invested somewhere around a billion dollars to get this company off the ground. They've got some strong backing and they're about to start construction on a battery factory just outside of Las Vegas, that was another part of the big announcement they're making at CES. But the big thing we wanted to see was a production in this car that we could actually see and sit in and get driven around in, and actually attract the course of this company towards a product that you and I could think about buying but they rolled out this crazy concept car thing, an autonomous, 2000 horsepower, electric hyper car thing, which was a hollow shell that would certainly never go out of production. That was pretty disappointing, because everyone can draw cool sketches and have fun, but to actually make a production ready car that can pass all the crash regulations and everything else that you need to get on the road, that's a much more complicated thing and that's still a big question mark in my mind and in a lot of other people's minds as well.

Leo: Yeah, when you go these websites, it's very airy fairy blue sky. What if we could redefine our relationship with the automobile. That always makes me a little suspect of the whole thing, but they've got money. They've got venture capital. Ben, you're most recent post on Stratechery was about autonomous vehicles. We lost him.

Jason: John is writing you a note right now to say Ben is lost.

Leo: He's lost to us! Let's talk about the Detroit auto show, because that's one of the things you see at CES is of course the consumer electronics aspect of automobiles, the high tech inside. Is it the same with the Detroit auto show these days/ Or is it more traditional?

Tim: It's definitely more traditional. We're seeing CES become the platform for these major manufacturers to make big announcements about their consumer electronic integrations, their car play announcements, GM announced a 500 million dollar investment in Lyft. Those are stories that wouldn't play as well in Detroit. Detroit is a traditional automotive show, with traditional automotive journalists there. They want to see new cars, they want to see new sheet metal, talk about new engines, that kind of thing. Partnerships with Silicon Valley, entertainment, integrations, things like that would get buried with the new models being unveiled in Detroit. We're seeing GM and Ford and other manufacturers have a smart cadence. They'll go to CES, they'll talk about their technology stories, they'll talk that up and then they'll get a good buzz going into Detroit where they'll show off the actual cars. Mercedes did that this year as well. They showed off the E type at CES, they did some demonstrations of the autonomous functionality the demonstrations of the driving functionality of that car. You get to Detroit and you actually see the car itself. That was a nice way to transition from one show to the next.

Leo: Coining was there with Gorilla Glass for car windshields. They showed it on the Ford GT.

Tim: Ryan Seacrest was there for the Demonstrations of, he was there talking at the Ford Event and he went to the Ford booth to shoot hailstones at him.

Leo: Calm down. Steve Kovach has lost it. Now we have another Skype down. Tim, it's just going to be you and me, I think.

Tim: I can't imagine anything better.

Leo: We can survive this. There is a moral to be told here. The more you have consumer electronics in a car, the more you risk crashes. I don't mean physical crashes, but software crashes, and I think that's one reason why car manufacturers are a little bit and rightly so, skeptical of turning these things into computers.

Tim: There definitely has to be a line drawn. Firewalls built and all that good stuff. Definitely one of the things we talked about, in fact General Motors just launched a cyber security division within the company about 8 or 9 months ago. They have a team of somewhere between 80 and 100 individuals focused exclusively on security. Half the team is trying to break stuff, half is trying to fix stuff, but it's good to see that corporations are making that level of interest. They are still not exactly clear on how the software is structured to provide the Internal security that you need for these types of systems. They're not being totally transparent or open as you might expect someone like Google to be, for example, but they are being a little bit more transparent and they're learning that security through obscurity is not the way forward, which for me is quite encouraging to learn.

Leo: You talk a little bit about Audi who is doing a hydrogen fueld concept car. But this is a different kind of electric car.

Tim: Right. You're typical EV, Tesla that kind of thing, has an electric motors behind the wheels and the electricity comes from the battery. A Hydrogen powered car is pretty much the same thing except the battery pack is a lot smaller and there is an additional hydrogen tank on board plus a fuel cell stack, so instead of electricity coming exclusively from the battery, the electricity can come through this fuel cell stack, which is powered by hydrogen. The only emissions from the car would be water, which is not bad for the environment, and you get quicker re-fueling, You can re-fuel a fuel cell powered car in 4 minutes, about the same amount of time you can re-fuel a gasoline powered car. Again, you can have all the range of a gas powered car, and all the power and everything else too. The problem is you can't go to your local corner gas station and get a tank full of hydrogen, at least not yet. Audi had the H tron car, which is pretty cool. It also had some fancy high tech stuff, like pop out chrome mirrors, instead of having digital mirrors, they're cameras that point backwards which is nice.

Leo: I think that's really interesting. We've seen other cars doing that too. Who is that had the rear view mirror with a camera view? What a great idea.

Tim: Chevy is actually augmented the bolt with a camera, so that gives you 120 degree wide angle view at the rear rather than just using a mirror, but in the US you cannot actually get rid of the driver side mirror has to be a proper mirrors, so digital rear view mirrors, which are much more aerodynamic than things hanging off your door are not legal in the US yet, that's something manufacturers are trying to change. But Chevy got around that by building the mirror into an LCD camera taht sits behind the actual mirror, so if the LCD were to go out fo rany reason, it works like an old school mirror, but when you flip on the system, you get the digital camera view out the back, which is a pretty smart way to get around the legislation.

Leo: Is that the concern of legislators is safety that a video tap might not be as reliable as a physical mirror?

Tim: I think that's part of why that law still exists, but it ultimately exists because back in the day there was no alternative so they had to legislate that it had to be a mirror, so they simply stated that a physical mirror had to be on the car.

Leo: I see. It wasn't to prevent cameras, it was that there weren't any.

Tim: That's one of those things that's getting really unfortunately confusing as manufacturers are trying to go forward with autonomous functionality. BMWs, for example, in Europe you can park your car by getting out of the car and hitting a button. The car would then pull into the garage and you wouldn't have to do anything. In the US, BMW disabled that functionality because the law in certain states in the US, is to put the car into park, you must physically press the brake pedal before putting it into par, and BMW said you can't do that when out of the car, so they disabled that functionality. Of course, Tesla added that functionality a couple weeks ago and the new eclass for Mercedes will do the same thing. They took the interpretation that the brake simply had to be pressed, it didn't matter how it was pressed. That's one of those annoying things where it's up for interpretation and different manufacturers are interpreting it differently. That's one of the reasons we saw the department of transportation making a statement last week that they are going to try to work to standardize a lot of these laws to make the US a more friendly place for research, which is very encouraging.

Leo: Tesla also announced the Fetch mode where you can actually say to your car, park in the garage, the car parks itself and you go out your front door and you say come here car and it comes and gets you the next day.

Tim: Which is great if your garage has enough room to fit a car and nothing else. But certainly it will make cars easier to park.

Leo: That's really interesting. Is it reliable? Have you tried it?

Tim: We haven't had a chance to try it yet, no. But BMW and Mercedes Bendz have functionality. The Mercedes app... part of this is that you must always maintain control of the car to be driving the car, that was another part of the legislation that BMW was concerned about. The way Mercedes is concerned about is you run an app on your Smartphone, so as you're backing up your car, you have to run your finger circle on the app.

Leo: I'm in control!

Tim: If you take your finger of the app, it stops immediately, that way you're demonstrating control of the car without being in the car.

Leo: I'm in control! Wow. The only time I've ever used any autonomous functions, I was at the Ford test track, this was some years ago. Unfortunately, we have this on camera, they were demonstrating their self-park feature and they said OK. You're driving through town, thank goodness this was on the test track and I was in a big old Flex, and they said you're looking for a parking space, so press that button, the car continues to drive, and then it beeps at you, oh here's a spot, I can fit, and then you say OK. Park it. I press the other button, and they say take your hands off the wheels and feet off the pedals, it's going to park itself, it's cool the thing spins around and stuff, what they don't tell you, and I think they did it on purpose, now I'm thinking there's a whole plan here, once it parks, put your feet back on the brake and turn off the ignition because I didn't, and it continued to idle backwards into the car behind me and went BAM. Now I'm thinking they were trying to do this because there were engineers in the car laughing at me. I think there were state legislators lobbying to take that rule off so you have to put a foot on the brake. It should just say I'm parked!

Tim: Yeah, absolutely. Especially now that you don't have to have any physical linkage between yourself and the transmission. Transmissions can shift themselves, cars can steer themselves now.

Leo: I'm driving by wire anyway.

Tim: There's a lot of old laws hanging around that are ultimately making these engineering decisions more difficult than they need to be, and as part as what that program is going through to iron out, like you can test autonomous cars in four states in the US right now, and I think Virginia is coming in and will be number five. That's it. There are a lot of places and opportunities to be testing these cars in other states in the US, if you have to pick and choose like that, it's going to make it more difficult to be a leader in that area and autonomy is going to be a huge Industry for these manufacturers, and if they can't test these things efficiently in every state in the US, that's going to be a major issue going forward. I hope that this helps to have a stable platform across the US for laws that are progressive enough to enable this kind of progressive technology and to enable us to continue being leaders in the space.

Leo: Ben Thompson, you wrote about this in Stratechery. You said that for your money, the most interesting news out of CES was from General Motors!

Ben: Sorry. I got disconnected.

Leo: We got you back!

Ben: That was a nice hook. I'm personally a little skeptical about the Bolt, specifically. I think the challenge when it comes to low cost electric is what you're buying as someone buying a 30,000 car is different than what you're looking for in a purchase... you mentioned you were aquiring a Tesla, a hundred thousand dollar car. Particularly today...

Leo: Is it just more expensive to do it right?

Ben: First off, the up-front cost is more, and there's point of evidence that customers anchor on the up-front cost more than the total cost of ownership. Two, the total cost of ownership of an internal combustion engine powered car right now is as low as it's been in a long time, it's been that way for a while because of low oil prices, and three I think an under appreciated part is people who are buying a Tesla, if they want to go to Grandma's house they say Oh, we'll just take the BMW instead, right? Whereas someone buying a 30,000 dollar car with subsidies, they don't have an alternative car, two they're not going to fly. They can't drop 4500 dollars for the family to get plane tickets, the pure driving performance issue of electrics is much more of a limiting factor for the lower you go on the income scale. On the flip side, the bolt is not going to really, unless it gets some Prius aura status on you that no question having a Tesla does...

Leo: That's why I'm buying it, I just want the status.

Ben: You say that with a smirking tone to hide the truth, which is that it's totally the case.

Leo: You know why I want a Tesla? I want the highest tech vehicle out there just to see. I was very tempted with the bolt. 200 mile range, Tesla isn't hugely more.

Ben: Sure, but selling to people who were interested in the tech just to try it isn't particularly interesting.

Leo: I grant you that.

Ben: This is a narrow point, I'm no auto expert like Tim or anyone else in the space, but I think looking at the characteristics of the market for a car like the bolt, we'll see. I think big picture, what I was trying to do with my piece this week, we're talking about how cars are changing, there's distinct axis of what it's changing on, and your interpretation changes based on what you're looking at. The three being the electrification, two being self-driving, three being the changing nature of transportation which is individually owned and operated vehicles to transportation as a service.

Leo: That may throw everything up in the air because these companies are built around the notion of personal car ownership. I thought it was very interesting that you point out that GM announced a half billion dollar investment in Lyft. You don't invest in Lyft as a ride service, it's not about ride sharing. In my opinion, Uber and Lyft are about the future of car ownership. They're hedging their bets, in effect.

Ben: Frankly, if transportation as a service becomes the dominant form of transportation, all the existing car manufacturers are in trouble, not because we won't need cars, we will, but because the nature of what we need a car for will change.

Leo: How does it change their business? I'm sure you've crunched the numbers. They sell a lot fewer cars because we're not all owning individual owning?

Ben: If the number... it's hard to know the number of miles driven will change. Presumably if we are all using Ubers and Lyfts in the future, the cars that are used for Uber and Lyft are going to be replaced more frequently.

Leo: So it's still a business for them.

Ben: Right, but the difference is you're not buying 90,000 dollar car because it makes you feel good about yourself.

Tim: I spoke with Mark Fields who is the CEO of Ford in Detroit this past week, and everyone is asking that question, is Ford screwed if everyone goes into car sharing and stops buying cars? The personal transportation industry is about a 2 trillion dollar industry, the mass transportation Industry is something like a five point something trillion dollar Industry. Right now, the auto industry has no share of that whatsoever. Worst case, if they need to transition into something more mass transit, that's a huge market for them to tap into. Obviously it's going to take a lot of change for them to be able to capitalize on that. With that investment from GM into Lyft with ford's Smart mobility program, they're definitely looking in that direction, and they see the writing as much as anybody. Fields is confident that they can pivot in that direction of... that was an interesting angle of the attack on that problem.

Ben: Of course he would be being the CEO.

Leo: I've also been talking to Ford since before... as I know you have. They have been fairly aware of this. By the way, these are the exact changes we've seen Technology wreak on Industries. This is a giant Industry and a huge economic driver in the United States, so I think there's concern about what this might portend.

Steve: That's something interesting. They don't see it, in the long term view, in the short term in four or five years they have a car you can buy. It'll be like another Tesla type thing. Ten, fifteen, twenty years, they're going for that services thing too. They see it as a subscription service, you pay a fee and they deliver you whatever car when you need it. So if you need a truck to pick up furniture from Ikea, you get that. If you need a one man car to get you to work for the day, you get that. It's like Spotify for cars. You get the thing you need when you need it and you don't own the car.

Leo: I have to think that reduces the amount of sales, because really there are a lot of cars in this country that are not being driven. That's how Uber X and Lyft started was this notion that there are a lot of cars sitting around.

Tim: I think there are people who are not going where they want to, or who are going where they want to in a way they'd rather not. There are certainly people unable to drive anymore who are relying on public transit. Parents of People who are younger than 16 who want their kids to band practice or whatever.

Leo: I think it's just a small amount of time before they invent a thing where as long as you're playing Candy Crush saga, the car continues to move forward. That's actually the solution right there. I'm sorry, I'm being facetious.

Ben: This is exactly why it's useful to tease these things apart, because it's trivial to sit here and imagine what the future will look like, the real trick in analysis is figuring the timing. Maybe I can order whatever car I want to my door, but as much as Faraday wants to brag about their funding, i want to see the funding that guarantees they'll get that date and they'll be in place to do it. Color me skeptical. This is where it gets into something that has gotten criticism in the last couple years, is the idea of disruption in that electrification or these fetch my car things, these are very much sustaining innovations, in which case we should expect the existing manufacturers to take care of them, and if you want to enter the market, you're going to have to take Tesla, where Tesla is coming at the high end, they're offering something, going over the top on features, going over the top on Status and brand. There's a reason why there have been few entrances in the car market over the last few years because it's a hard thing to break into. On the flip side, people use disruption for everything, right? Disruption is about business models, first and foremost. What happens with something like Uber where you no longer buy a car, you just use one when you need it, that is a new business model. What is scary about disruption is it doesn't matter that Mark Fields can see it coming, it doesn't matter that GM can see it coming, what will happen to them will be almost completely out of their control, maybe they will survive in some fashion or maybe they won't or maybe it won't happen at all, but the entire point of disruption and what makes it ironic is that the brilliant inside of disruption is that incumbents can't do anything about it and now there's a whole consulting practice on how being an incumbent is disrupting.

Leo: We have such a template for this. We've seen it happen so many times in so many industries.

Ben: What happens is once you get into a world where people don't buy their own cars, they're all fleet sales, I'm sorry. Ford innovate all you want, but your business has fundamentally changed, and almost certainly in an unfavorable direction because you're giving up all the angles in which you sell cars.

Leo; Who is going to buy undercoating if it's fleet purchases?

Ben: Now, again, there is a timing issue here. It's easy to say the US sold a record number of cars last year, but what makes Uber interesting from my perspective is Uber uses today's cars with today's driving systems (AKA humans) and everything about Uber uses existing technologies with tomorrow's business model. That's interesting, because as these technologies come online, Google is going for this home run multi bank shot approach where magically their system will work and it will be approved, that's not usually how technology change happens. We'll see. You see the younger generation... people have been predicting cord cutting for ages, it hasn't happened because people like their cable bundle. There's lots of reasons for that, there's good reasons for that, however the numbers are going down finally, and the reason they're going down is not to be morbid, but pepole are dying. Young people are not getting it for the first time, they've grown up with the Internet and all these sorts of things, and I suspect the same thing will happen with cars. Us old people are attached to our cars, we'll stick with them till we die, probably in a car, and young people are going to come up who the idea of wasting a couple hours a day on anything other than their Smartphone will make no sense to them, and that's when the shift will happen. Sorry, that was a long rant.

Leo: I think it's exactly the point, because we're trying to figure out what's going to happen. We're in a weird interregnum where gas prices are going down and car sales are at record highs, but you know that's not going to stay that way.

Ben: There's lots of reasons to expect they will.

Leo; Really?

Ben: There's been a massive technological breakthrough in oil extraction, which is fracking. It has lowered the cost, it has opened up massive new resources of oil, it comes online and goes offline quickly so it responds quickly to market conditions. There's secular reasons to expect that oil will stay lower for a while. That's fine. The thing about electrification is it's interesting, it's a new technology. Theoretically it allows some companies to come in because you're moving the complexity of the drive train, but it's not changing the fundamental nature of what it means to have a car company and what it means to own a car. It's...

Leo: It looks like I picked a crappy time to go off the grid and buy an electric car.

Ben: You're doing it for the environment.

Leo: That's why I'm doing it, yeah. Tim Stevens is here. You picked a new show, Road Show, part of his C Net duties. What is the website? The Roadshow?

Tim: theroadshow.com.

Leo: Ben Thompson from Stratechery, if you can see him by now, that is a must subscribe stratechery.com, and from tech insdider.io, it's great to have Steve Kovach. I think I want to talk about Bitcoin when we come back. There's lots to talk about. Our show to you today brought to you by shipstation. We know a lot of you have made hay in this new economy by selling online, by becoming an Ebay seller or selling on Etsy or Amazon. How do you ship? How do you do your fulfillment? You need to know about shipstation.com, the fastest easiest way to manage and ship all your orders in one place. Shipstation.com. They can easily create shipping labels for all the otp carriers including UBS and Fedex, plus you'll get a free US services postal account thta gives you access to deeply discounted UPS shipping rates, those same shipping rates in the past, only Fortune 500 companies could get. Ship internationally? Sure they'll do a DHL, they've got it all in one spot! And, it's really eask to import your customer orders from Ebay from Amazon, Etsy, more than 50 popular marketplaces and shopping cars. It integrates right into your workflow. They have an incredible 98% satisfaction rating form their customers. It's the way to ship! You look pro, your customers are happy, you're happy, your live is easier and you can try it free for the next 30 days. In fact, you can get an additional month for free if you use our offer code TWiT. That's right, 30 days free and another month free, but you have to use the offer code TWiT. Here's how you do it, you go to shipstation.com, there's a microphone at the top there, click that and enter the offer code TWiT. Shipstation.com. yay. I love empowering people to make their way in this new economy and be glad you're not a big three automaker in the US. I hate to be in that position. The history is even though companies know this is coming, they often can't figure out how to make the transition.

Ben: I think there's the aspect where... I used the Earnest Hemingway quote...

Leo: I love that quote!

Ben: It's been getting overused. How did you go bankrupt? Gradually then suddenly. Boy that was a rough...

Leo: It's such a good quote. "How did you go bankrupt? Two ways. Gradually then suddenly."

Ben: I think there will be an aspect of that in autos and a lot of businesses. I've been saying this will be the case for TV for a long time as well. I think people get so hung up on the technology and you can see why a future makes more sense than the present and you can see that in TV and you can see it in cars where having these autonomous cars that drive around ferrying people on demand makes sense for all kinds of reasons, but I think a mistake that technologists make regularly is dramatically underestimating how difficult it is for that sort of change to happen. You see this in technological products. People are hesitant to change how they use a computer, much less how they use a car the fact that they have 50,000 dollars in their garage, or all these sorts of things. I think that's why I mentioned before, it's going to be a generational sort of thing. In the short to medium term, I suspect most car companies are going to continue to do better than we expect. That's why I don't do stock picking, for example. One, if I did, I would do it for my own profit, but two, this is what makes it tricky is getting into the timing aspect. The other thing too, this is why the Apple car makes no sense because we'll all be using Uber one day, well that's like saying in 2001 an iPod doesn't make sense because we'll be using our phones someday. That doesn't mean Apple shouldn't have made the iPod. If we have twenty to twenty five years of this paradigm, making something at the highend isn't the worst idea, then again, if the paradigm is going to change in five years, then it's a terrible idea. This is why you get paid the big bucks to be Tim Cook or whoever to make these sorts of bets.

Leo: It's interesting because you have on one hand the incumbants of the world trying to figure out how to survive, and you have the new guys trying to figure out how to capitalize. Here's Steve Kovach riding 85 miles an hour in a golf cart. We just don't know what is this? The Archomodo?

Steve: Archomodo. It's a street legal Trike.

Leo: That's legal?

Steve: Street legal. It's classified as a motorcycle. It's all electric, it can be cranked up to 80 or 85. These guys told me something profound, the founders of this company when I was chatting with them. They said if and when we get to fully autonomous vehicles, the vehicles will look more like that thing I'm riding around in and less like model X or S or a giant SUV because they don't need to withstand the impact from a tree or a bus, because that's not going to be an issue anymore. So vehicles get lighter, cheaper, more people have access to this kind of transportation. It's a win for everyone. Does that mean that companies are going to make as much money off it? Probably not. Are they going to be able to sell a hundred thousand dollar Tesla anymore? Probably not. But it's just really interesting to think in twenty or thirty years, our cars are going to look more like that and less like a typical four door Sudan.

Leo: We've seen autonomous four door vehicles. Chevy had one a couple years ago at CES, they look like personal capsules, almost.

Tim: I disagree with the notion that we won't have luxury cars in the future, we have luxury everything now. We have luxury watches that cost more than cars. You don't really need a watch anymore. Those things will definitely continue. I have a lot of issues with Archmodo. They've been delayed many times. That's a company with interesting history. Once cars can avoid accidents better than we can, we can strip out a lot of the extraenous stuff in there and get rid of things like speed limits and driving licenses, at some point we won't need those. As we try to chart the future of the car sharing economy, somebody still has to build those cars and no one is in a better position than the big auto manufacturers at this point. If anything, we could make transportation something accessible to more and more people, that doesn't mean that these companies are going to go away, their business is going to shift drastically.

Leo: Let's talk a little bit about BitCoin. Mike Hern, who was an early mover in BitCoin, I think he left his job at Google five years ago to go to work as a Bitcoin developer wrote an article that caused the price of Bitcoin to tumble three days ago. The Resolution of the Bitcoin experiment, in which he says I've sold all my Bitcoins and come to the inescapable conclusion that it has failed. Bitcoin is over. The network is on the brink of technical collapse. You should know that. If you had never heard about Bitcoin before, would you care about a payments network that couldn't move your existing money, two had wildly unpredictable fees that were high and rising fast, three allowed buyers to take back payments they had made after walking out of the store just by pressing a button. If you aren't aware of this feature, that's because Bitcoin was just changed to allow it. That was in response to large backlogs of Bitcoin transactions, sometimes taking a full day, and much of the Bitcoin mining occuring in China. Jason Calacannis told me he believed that was because a lot of the Bitcoin miners were in power plans and coal plants and nuclear plants in China where they could tap into the electricity for free and avoid the real cost of Bitcoin mining, which is the cost of the electricity, and finally in which the companies and people building it were in open civil war. Fred Wilson, AVC.com wrote a response in which he said it's an opportunity for BitCoin to transform itself and survive. What do you guys think the future is of Bitcoin?

Steve: I've never seen Bitcoin as a real currency.

Leo: It's an experiment.

Steve: It's a commodity. People trade it like a commodity. The fact that this guy wrote a medium post and it sent the price tanking, you don't see that with a dollar. If you can blog and change the value of the US dollar... there's no army backing it, there's no government backing it. Transaction processes are all over the map, and I have never seen a convincing argument that convinces me that this can be a real currency.

Ben: That's the rub here, I can't speak for most people, I know where a few people stand, the value of Bitcoin is more interesting the less you think of it as currency. At a very fundamental level, what Bitcoin and the blockchain technology allows is digital scarcity. The entire thing with digital is that it's infinitely copiable. That's interesting in some ways, but it's problematic in other ways because the value of something digital goes to digital because there's an infinite amount. In the case of the blockchain, you can have something be digital and all the advantages that comes with that being instantly transferrable, transparent, movable, all over the place while also being scarce. There can only be one of something. That was thought to be impossible, and what makes Bitcoin so interesting is that made that possible. That has all kinds of potential interesting applications, the most obvious one of which is to be used as a currency. The way Bitcoin works is a series of checks and interlocking incentives in which there has to be a monetary aspect to motivate minors to verify transactions which enables the scarcity. There has to be a component to it, but a real open question with Bitcoin specifically is the future as this restricted amount of digital currency, like gold, which is why there tends to be an overlap in people who support a gold standard and that sort of approach to monetary policy and Bitcoi supporters as opposed to Fiat currency, which is Government backed. There's a federal reserve. There's a reason why there's all these political angles you've heard in relation to Bitcoin. The civil war here is between one side that is agains tthe federal reserve and wants it to be its own currency, and the other side that sees the technology and what it could potentially enable. There's a fundamental division here. The division is probably more between Silicon Valley and...

Leo: Speculators.

Ben: I would say Bitcoin true believers. I don't mean that pejoratively. I mean where they see it like the original Satoshi document and writings which were more in line with that sort of view. He's skeptical of things like the federal reserve and wanted to create a national currency. It's a fundamental philisophical divide. The division is real. I am not sure how it will be resolved. I'm not deep enough in the community to know, but I know when you get to a core question of what's the point, the future is in doubt.

Leo: It's fascinating, though, to watch. Fortunately, I think I have seven Bitcoins somewhere, which means at one point they were worth more than 7,000 dollars and they're now worth about two. It's free money as far as I'm concerned.

Ben: From my perspective, to the extent that Bitcoin is not viewed as money the more interesting and valuable it becomes, systematically...

Leo: Do you mean the technology of Blockchain or...?

Ben: Both. I think the blockchain idea is fascinating. A lot of it gets down to this question that true believers hone in on is there's no trust in Bitcoin. It's a trustless system. What people forget, and it's easy to lose site of, all systems, all institutions that involve humans have some sort of structure to them. The question is whether it is explicit or implicit, and you're seeing that play out in Bitcoin right now. There is governance in Bitcoin, there are people who are in control, and it turns out as Mike Herd is finding out, just because there is theoretically no one in control, doesn't mean there isn't someone in control.

Leo: What this reminds me of is the battles that happened in Open Source projects all the time.

Ben: The company reminds me of Zappos, the shoe company that is doing their wholocracy.

Leo: There's nobody in charge, no hierarchy. Do your best work.

Ben: You look at any human institution, there are structures that emerge, the question is do you want them to be planned, like most operations, or do you want them to be implicity, and it's easy to say implicit and natural is good until you realize that's how we have a diversity problem, how did we manage to start a company with it being all male, white, and Asians? Because we just hired our friends and got recommendations. Unless you are explicit and planful, that's what's going to happen. There's good things too. We all believe the same sort of thing. We all pull on the same oar. OK. But there will always be structure, the question is, is it explicit or implicit? You see that happen with Bitcoin, you see it happen everywhere.

Leo: On the otehr hand, there was a flower grown in space. Thank you Twitter for sharing this momentous occasion for all of us, of a space flower grown in the International space station. It's a Zinia, by the way.

Steve; I love that Astronauts can Tweet.

Leo: Didn't Chris Hatfield do a Bowie YouTube video taht someone uploaded?

Tim: He did a full album. It was encouraging to see a dead flower blooming because two weeks ago they pictured some flowers and plants that weren't looking too good, so that's encouraging that it's not just in the Martian that you can grow things in space.

Leo: That's what I think about is Mark Wotley growing potatoes on Mars. We live in very interesting times. If there's one thing I get out of doing this show is not only being an observer, but getting Ben and Steve to talk about it. I feel very fortunate. We're going to take a break, come back with more. Go ahead, Ben if you want to drink some tea or scotch.

Ben: It might literally be a frog.

Leo: That's literally a frog in his chaser, ladies and gentlemen.

Ben: Did I just title the show?

Leo: I think you did! Our show to you today brought to you by Carbonite online backup stuff happens. While it's unlikely you'll be abandoned on Mars, it is true that your data could be disrupted and if you're in business, losing your data could mean losing your business,. That's why a great backup plan is so important. You wouldn't want to run a business without fire insurance. Get some data insurance from Carbonite.com, one of the thigns that makes carbonite work is you're not backing up locally. You're backing up to the clouds, so if there's a massive disaster, if there's a fire or flood or somebody comes in and wipes your business out and takes everything, you're not reliant on those backups that Joey from the mailroom stuck in the closer last week. You got stuff on the Carbonite cloud, automatic, continuous backup. No more down time with Carbonite cloud backup. Protect the files that keep your business or home running smoothly. No wonder more than a million and a half homes and small business trust Carbonite to backup their computers and servers I know a lot of you are geeks and think I could easily to an R sink to an Amazon service S3 instance, and yes. You probably could. Would you rely on it? I think it's safe to say for better to trust Carbonite. Certainly there are a lot of people who aren't going to roll their own who need good backup. Carbonite.com. You don't need a credit card. In fact if you use the offer code TWiT, you'll get two free bonus months if you decide to buy. They got this nailed. Carbonite.com, the best online automatic full time cloud backup for you and your data at home or at work at Carbonite.com. Let's see here. Google IO has dropped Sundar Pichai. It's fun that it's not Larry Page anymore. Sundar Pichai has made the Tweet announcement that IO is coming May 18th. Not at a normal convention center but at the Shoreline amphitheater where Neil Young has his annual Bridge benefits, where Carlos Santana plays. This is a concert venue with a big lawn. I don't know how they're going to do a whole Google IO thing.

Ben: It's all the side sections that are a question mark. I mean yeah, you can do a keynote there.

Leo: It was in Google's backyard, so we were thinking maybe they'd send you autonomous vehicles to get each and every visitor... put some bikes out front some segways, and roll on over to the Google campus.

Ben: I'm super interested in ithis, but just speculating. If they do really, if yo ustep back far enough it wouldn't be a problem if Google scales back their developer platform support thing, from a strategic perspective, particularly on Android, I think apps are a necessary thing that they need ro be competative. It's not...

Leo: Cordial.

Ben: That said, it's pretty inportant. So that's relaly interesting. I'm curious to see what happens with the rest of the program and schedule, obviously what it means.

Tim: I think you could make the case that those sessions could happen of fsite or purely online as long as you have the developers, or the Google personnel talking about the new AVIs and streaming them online...

Leo: Why do you have to go to Google?

Tim: I think there is a lot of value in people getting together and seeing physical demonstrations of things, but by and large that's there for the media to be able to write about what cool new thing Google is up to, and maybe that's what this is turning into. They have a big splashy Keynote, the media gets to go there and write about all the cool new things Google is up to, and then developers go back to their computers and lear about all the valuable things they need to do to build the next generation of apps. Do they need to be there to make that happen?

Leo: It would be a lot easier for Sergey Brin to parachute in.

Steve: Oh, I remember that.

Leo: (Laughing) He had to land on the roof at Moscone. Actually he didn’t do the parachuting, did he?

Steve: No they had a stunt guy. They had stunt men doing that.

Leo: He was just there shooting it with his Google Glass. Where are Google Glass by the way? Are we going to see more Google Glass stuff? They supposedly have a new design.

Steve: Yea it seems like 2.0 we might even see it in a couple months at IO.

Leo: Does anybody want this?

Steve: I think they’re going to go, it’s not going to try to kill your smartphone like they did at that first round. Not necessarily to kill your smart phone but you know, become a consumer type gadget. I think it’s going to be an enterprise gadget, and industrial gadget, kind of like the HoloLens is working on right now. I don’t think it’s going to be normal people are going to go to the store and buy this thing.

Leo: Yea, it doesn’t seem to have a place in the world of VR and AR because it’s not really either of those. It’s actually just a display over your eyebrow with a camera.

Ben: I think it gets to that timing issue I talked about before. I mean first off I push back against the way people kind of instinctually whomp VR and AR together. Again, maybe there’s certainly technological connections but I think a computer and a phone are the same thing as a console and—or a better example, a console and a phone are basically the same thing as well if you want to get technical about it.

Leo: But I do have to point out, Ben. I know where you’re going with this and I’ll let you go on, but I do have to point out, there have been now some hybrid approaches where you’re in your Oculus Rift but you don’t run into a table because it’s in your real space and it shows up in your VR as a real obstacle.

Ben: Sure and that gets to the point where they are technically similar or technically, there’s some sort of thing, image in your eyes, your eyes are involved in.

Leo: Right.

Ben: But the big difference is how you use them. And something like a VR thing, like an Oculus, it’s a what I term a destination device. Like you make a decision like I am going to use the Rift now and you go and you put it on and then you use the Rift and then you finish and you take it off and then you move on. And there’s a big vein in technology of this. That’s where consoles fit, right? You go and you sit down by a console game—

Leo: It’s essentially a gaming device you’re saying.

Ben: Well I mean or no, not just gaming. There’s also movies, right? You sit down and you watch a movie and then you stop watching the movie. And that’s a very large and profitable space to be. But there’s another space of technology which I call accompanying technologies, things that are with you as you go about your day. The reason why the smartphone is so dominant and such an important platform is not because we make an appointment to go use our smartphone. And the reason why Facebook is such a big deal is not because we say, “Oh, I’m going to go use Facebook now. It’s 4 o’clock.” It’s because they’re omnipresent. They’re always with us. And they’re there when we need them. We can pull it up. I have three minutes in line, I’ll look on Facebook or play Candy Crush or whatever. That’s what makes Candy Crush a very different sort of game than Call of Duty, right? One you sit down to play Call of Duty. You don’t like sit down, oh I’m going to block off a few hours tonight to play Candy Crush. You might end up spending a few hours but the way in which you go about doing it, your posture as you do it is very different.

Leo: I think you might be making the same mistake though that somebody who was in the world of computing where it was a desktop computer and you said, “You know, someday you’ll have that in your pocket.” They might say, “Oh, that’s crazy talk. Nobody wants to do that.” The desktop computer is a destination device.

Ben: No, what I’m saying is I think AR—

Leo: You’re looking at current technology maybe not what might be happening.

Ben: No, you’re mishearing me. I’m actually, what I’m saying is AR is very different from VR.

Leo: Well I’ll agree with you on that.

Ben: AR is more interesting in the long run to me because AR is an accompanying technology. So I actually think Google Glass is very interesting. I think the timing was wrong and probably the tech wasn’t right and the way they approached them might not have been right, but the idea of having an augmented vision and a computer with you as you go through your day to day activities, that by definition, the market is much bigger from an attention perspective, from a time perspective because it’s all the time in your day. And so my distinction is between AR and VR which VR will be fine and interesting. I think that AR in the long run will be bigger than VR simply because it’s, yea—

Leo: Well that makes sense. But will VR continue where you’re isolated from your environment? Will that kind of VR continue?

Ben: Well you could have like the what’s the, Up? No, Wall-E sort of scenario where people just live in VR.

Leo: I wouldn’t mind. I’ll do that. Bring me a coke and a batch of fries and I’ll just sit in my little floating car and life is good.

Ben: it’s possible. I mean they’re, you know, reality to us is what we perceive at any moment in time. So it can be like, you could say that, “Oh, people want to actually live real life with people.” Well, at the end of the day, it’s just neurons firing. I mean whatever triggers that, triggers that.

Leo: That’s a really interesting point. VR as it stands now, you’re in immersed in a kind of semi-realistic environment. But ultimately it could be your reality.

Tim: The problem is you couldn’t have both. If you imagine, you know there’s all sorts of talk about contact lenses that can project images. You can imagine a situation where you could have an augmented reality experience and then ultimately if you want to go VR, that your vision could be completely occluded by some sort of a representation of your current landscape or fictional landscapes. So I would like to think that down the road these two things would kind of blend together, you know simply be the same thing from one to the other or somewhat seamlessly. But yea, ultimately in the short term at least or the midterm, AR is simply the kind of thing that you can apply to your current day to day life whereas VR is going to be much more of a gaming entertainment sort of thing. As much as Facebook wants to turn into a social experience down the road and maybe they’ll figure out a way to make Second Life cool for a new generation.

Leo: But each have their own merits and values and usefulness.

Tim: For sure. And I’m excited about it.

Steve: What Tim said is really interesting too because based on what we’ve heard so far, what limited things we’ve heard so far about Magic Leap, that’s exactly what they’re going for.

Leo: That’s Google’s company.

Steve: Right, and that’s Google’s too. Or they have a heavy investment in it. But what they’re doing is you know, their technology, this is not the terminology they’d probably want us to use, but they blast the images right into your eyeball and they can dial it up from AR, they dial it straight up to VR and back again as needed. And that’s the kind of one gadget to rule them all. The ultimate goal is to not only have something cool, an entertaining experience, but also just eliminate most of the screens in your life too. That’s really what they’re going for. And that’s like a really bold mission for that company.

Leo: Yea, this is Magic Leap’s really kind of misleading video.

Steve: That’s augmented reality. And you know—

Leo: These are kids in a gym and they’re implying that what the kids are seeing, by the way the kids are not wearing anything, is a giant whale leaping out of the gym floor. That’s not though what the kids saw obviously.

Tim: It’s a shame the kids can’t see it because some of them are going to get crushed by that whale.

Leo: (Laughing) boy, it’d be nice if they could see it. Do you think though that we’ll have anything like that at some point?

Steve: Some really think they’re on to something very similar to that and the resolution is so good.

Leo: How would you do that? With contact lenses? What would you?

Steve: It’s some kind of thing where again, they haven’t shown any of what they have but there’s people, John Dewar spoke at a conference I think it was 2 years ago, our BI Mission conference and he was just like, “This thing just knocked my socks off. It’s amazing.”

Leo: How does this compare to HoloLens, Microsoft’s AR solution?

Steve: It’s totally different. So HoloLens, I was actually a little disappointed with how narrow the field of view is. If you look in your peripheral vision, the images that you are looking at kind of disappear. It’s cool. You can walk around the room and like walk around these fake objects in real life but it’s nothing like those HoloLens video shows everybody.

Leo: We know a little more. A HoloLens evangelist, Bruce Harris, spoke at an event in Israel. And Brad Sam is reporting that he shared some more information about this. 5.5 hour use batter life unless you’re on heavy load and then you’d be 2.5 hours. Anything can connect to the device as long it supports Wi-Fi or Bluetooth. And here he addresses that tricky field of view image. Whether you’re looking through a slot, a mail slot or what. He said it’s basically like a 15” monitor about 2 feet away from your face and the reason, finally giving a reason for this, and confirming it, is because of cost and battery life. But Harris said as manufacturing improves, the company intends to expand the field of view. It’s just a price issue. He says it’s being made my Microsoft, not by a 3rd party, but not in the US. And of course we know that Microsoft has announced there will be a developer addition for $3,000 coming out at some point this year. So we’re in early days of all of this stuff. It’s interesting. VR must be easier to do. I think it is technically a lot easier to do. You don’t have to calculate in real-time, real-world surfaces and respond to them. So that’s a little bit ahead right now. But I think both will be very important. And I’m kind of with you, Ben, I would probably wear an AR device of some kind, whether it’s Glass or HoloLens or something else a lot. I mean I would love the idea of being in the real world but getting augmented information about that real world.

Ben: Yea I mean generally speaking a dedicated device is going to be ahead. And I mean dedicated, not just dedicated in that that’s all the device does but the device is dedicated to doing one sort of job. And like the gaming or console or the movie world has traditionally been ahead and then things come along, you know, things like your phone come along behind. But eventually they become good enough. And this is I think the one, I’ve been actually relatively skeptical and critical of Facebook thinking that Oculus will be a platform in the future. I think they certainly they want and expect it to be more than the next console. And one reason to, and I think that’s why Google and Microsoft have been more focused on the AR sort of things which I think is more about the world in the future. And Google doesn’t own Magic Leap. They’ve just invested in it via ventures. But if you want to have a defense of Facebook going the sort of Oculus route, it’s that, well it is going to be on the market for the first time. You can buy them now or pre-order one now. And because, yea, it’s an easier problem to solve. And then can you branch out from that to more of an AR view? Maybe. We’ll see. It will be, it certainly will be interesting to see how it plays out. There’s a go to market challenge with any dedicated device which Microsoft learned with, you know, they wanted the Xbox to be the computer for the home. The problem is like by starting with gaming, yes there was an established market. But they ended up making it too expensive to be a computer for everyone. I think there will be, that’s always the challenge in building a platform from a dedicated device is you end up having a real tension between your hard core customers and just casual people. For example I didn’t order an Oculus. I’m going to get—

Leo: I unfortunately ordered 2. You want to borrow one of mine?

Ben: Yes, sir, I would love to.

Leo: You know you have to buy a new computer, too.

Ben: Yea well I would buy a new computer. It was more I kind of forgot about it and then there were already delays until June. And I’m like, we’ll see.

Tim: I’m in June as well. I had this little thing called CES going on so I was a little late in ordering.

Leo: I jumped on it, and I got May. But then I found out because I was a Kickstarter backer, that I’m going to get another one, a free one. I hope those come sooner. We should get those first, right?

Tim: I think you will.

Ben: Yea.

Leo: But it’s not going to just be Oculus. You’ve got, a lot of people are very excited about HTC’s Vibe which is in a relationship with Steam. Those are two good players. Sony’s got their own helmet and now Google has really doubled down on AR or VR. They have taken, Clay Bavor who is VP for Product Management. He was in charge of Gmail, Google Drive, Google Docs. He also was in charge of Cardboard. He’s now dropping all the apps and he is going to be a senior vice president in charge of VR. They’ve got a guy doing VR full time at Google. And I think a fairly high level guy. So that seems like, his title is VP Virtual Reality. Or VP VR.

Ben: This is what companies like Google do. They set up a thing and have a big press release announcement and everyone you know, because they’re the big dog, they’re going to take over, do this and that was the story of Microsoft in the 90s and 2000s and now it’s Google today. But we’ll see.

Leo: Well everybody wants to be in this space. That just tells you this is an important space, right?

Ben: Oh for sure. I mean I think in the long run, I mean I’m still more optimistic about things like the Watch than most people. But in the long run if you think about what would replace a smartphone, you know I think it’s, this is an obvious sort of area to tent up in.

Leo: You think a smart watch is the next thing?

Ben: I think it will off load more and more functionality from a phone. But obviously there is an input challenge.

Leo: I did an interesting thing. Right before the show we had a 6th grader who wanted to interview me. And he was starting to write, take notes on his smartphone. And I thought, “Oh, this will take a while.” (laughing). I said, “So wait a minute. I have an app I just put on my iPhone that attaches to the watch that has a complication on the watch that allows me to record.” And I pressed the record button. What’s it called, Press Record?” Press Record? Press Record Now? I can’t remember. Let me look it up here. Just Press Record. It was awesome. The audio, I could play you the audio. The audio from my watch—‘I am sitting here with Addie.’ Sounds pretty good. ‘I am sitting here with Addie who is going to now ask me some questions for Addie’s research paper.’ Doesn’t that sound pretty much like me? ‘Question 1.’ This is me and I’m not—

Addie: What kind of businesses are most affected by ad blockers?

Leo: I’m not even really talking into my watch that much. I mean it’s kind of there. You do need this because Steve you could use this for interviews and stuff.

Steve: I’m totally going to get-I’m downloading it right now. This is awesome.

Leo: It’s amazing. And you need, not all the watch faces support the complication. I’m using, what is the name of this? Chronograph. But the complication on Chronograph, you have a little microphone complication. You tap that. It records and then the cool thing is it immediately transfers it over to the phone. So as I was able to email this back to Addie as soon as we were done.

Ben: What’s the app called?

Leo: Just Press Record. Where did I find out about this? I think I found out about this on MacBreak Weekly, one of our hosts, probably Rene Richie or it might have been—yea, I think it was Rene who told me about this. Isn’t that cool? So that is, this is the first app on the Watch that I really thought, ok that takes advantage of the Watch’s form factor in a unique way. I mean I’ve got a stopwatch application on here. Big deal. You know I can do that with a Timex.

Ben: Oh the big thing for me is notifications. I mean I just love not having to pull my phone out of my pocket. That said, I will note that I like the watch. I still wear it every day. It has reduced it’s utility for 2 reasons. One, cold weather because I have long sleeves on. And so there’s more effort involved in looking at it. Which has been complicated by, no pun intended, has been complicated by the fact that I broke my arm which made it, I didn’t have another, hand to pull my sleeve up. So it actually for a few weeks anyway, it ended up being that pulling the phone out of my pocket was more convenient than looking at my watch.

Leo: You’re not in a cast. Are you ok?

Ben: Yea, I just got the cast off actually.

Leo: Oh, this was the fall you told us about. Yea, yea. I’m sorry. Well I’m glad you’re feeling better. Well see for instance now I know that Ben Carson is doing a live Facebook feed of his town hall in South Carolina right now. And I wouldn’t have known that if the Watch hadn’t told me.

Ben: Yea but this is why—

Leo: But what am I going to do with it?

Ben: It involves that you have to have control of your notifications. Which I think Apple has not done a good enough job making it easy to manage. You know fortunately I trimmed down my notifications even before I had the watch, so.

Leo: But to get back to Google Glass, that might be really a reasonable use for Google Glass. I mean it could have done all those things we just talked about.

Ben: Well there’s the social aspect, right? I mean you have this thing on your face.

Leo: That’s the dork part, yea.

Ben: It even gets back to the Uber stuff and all that sort of thing. Technological change does not just depend on getting the technology right. Like especially the more that technology enters into the real world in the case of cars or in the case of TVs or in the case of wearing something on your body, like there has to be real societal change in morays of what’s acceptable and what’s not. And wearing something on your face is certainly a part of that. But yea, absolutely. You can see the idea of being able to just flick your eyes up and see something going on would be great. I mean the one interesting thing about the Watch and I think Neil Patel nailed this right at the beginning in his monster review but it’s certainly been the case, is people are much more, feel much more, not offended but they feel much more awkward about you looking at your watch to see notifications than even they do, we’ve had smartphones for so long—

Leo: It’s an insult. It’s an insult.

Ben: But what’s weird is you can—

Leo: It’s like, “I’m bored.”

Ben: I could be looking at my phone and you would just keep talking because we’ve had smartphones long enough that you know I’m not ignoring you. I’m just checking something. Whereas the watch hasn’t been out, like you would be more offended by a point 3 second glance at my watch than you would me actually pulling out this thing and putting it in front of my face. And it’s so bizarre. People will keep talking even as you pull the phone out, but they’ll stop talking when you look at your wrist. Just because the social part.

Steve: Yea, it’s that old metaphor of we used to use watches to tell time and it also says boredom. What was that famous debate? Was it George H.W. Bush during the debate? He was caught looking at his watch or something. So we have that old metaphor or this means I’m bored. I need to get out of here and not oh I just got a text message from my best friend or something.

Tim: And of course we saw Jeb Bush looking at his watch doing something rather than—

Leo: Oh, I’ve got to show you that video (laughing). That cracked me up. Thank you for reminding me about that. Jeb Bush was talking to the Des Moines Register because of course the Iowa caucus is coming up. And he must have just recently received an Apple Watch. Because he’s apparently a little confused about how it works.

Steve: He’s had one since the summer at least because I remember all his early campaign videos he was wearing it.

Leo: Really?

Steve: Yea.

Leo: So hmm (laughing). In that case there’s less of an excuse for this behavior. Let’s go to the YouTube video. So it’s hard to see here but let me play it again. You can hear somebody say “Hello” and Bush loks around going what?

Video: Hello?

Leo: What?

Steve: Oh, it’s bad.

Leo: And the editorial board laughs.

Jeb Bush: My watch can’t be talking.

Leo: Yea, yea it could.

Tim: That look of amazement is great.

Jeb: I’ll call you back.

Video: (laughing).

Leo: I think—

Jeb: I’ve never had my bat phone been turned on. That’s the coolest thing in the world.

Leo: I think that besides being an awesome ad for Apple, I think it kind of humanized him a little bit. I liked that.

Tim: I absolutely agree. I think that’s the most human side of Jeb Bush I’ve seen throughout his whole campaign process.

Leo: I mean you could say something cruel, like Kevin in the chatroom, “Jeb is dumb as a brick.” You could come up with that conclusion. Especially if you know he’s owned this watch for months. Or it’s just cute. He didn’t really know. I don’t know. I don’t know where I fall down on that one (laughing). To me Jeb Bush looks like a potential savior from a Donald Trump candidacy so I’m kind of rooting for him a little bit. Let’s take a break. We’re going to come back. I’m sorry I put politics in here. I take it out. Take it out. Edit that out, right? Right. They’re going to edit that out.

Jason Howell: Done.

Leo: Done.

Leo: Ah, whatever. Techinsider.io that’s the new publication from business insider. Steve Kovach is one of the—what is your title? You’re managing editor?

Steve: Deputy editor.

Leo: Deputy. Deputy editor. Do you get a star, a badge of any kind?

Steve: I’ve asked and they still won’t give me one. I keep bugging Henry and he still hasn’t given me a deputy badge yet.

Leo: (Laughing) I’d love that. It’s great to have you, Steve, always a pleasure. Joining us from New York, from Brooklyn probably, yea?

Steve: No, Manhattan.

Leo: Oh.

Steve: I’ve moved on from Brooklyn.

Leo: You have New York values, eh?

Steve: Yea I do have New York values, yea.

Leo: Was that a story in New York? I saw some of the daily news covers.

Steve: Oh my God, you have no idea. Oh, that’s all anyone could talk about for 24 hours.

Leo: Oh you mean like the fire department, the FDNY? That kind of values? Yea, yea that’s what I was talking about. We also have from Taiwan where they now have for the first time ever, they will have a female prime minister.

Ben: You want to wade into complicated politics?

Leo: Ah, well, I do when we come back. We can talk a little bit. Because she uses social media quite effectively I hear. Or is it—

Ben: I wouldn’t say it’s used. The real social media, I think, story is in the US, what’s happening there.

Leo: Well, we’re going to take a break and you can answer that. But we will talk about Tsai Ing-wen, the president not the prime minister. You have a president. Say it again?

Ben: Tsai Ing-wen.

Leo: Tsai Ing-wen.

Ben: Ing-wen.

Leo: Ing-wen.

Ben: There you go. That’s better. Still wrong but ok.

Leo: Ing-wen. Is it a one?

Ben: It’s actually the same characters as English so her name literally means English.

Leo: Huh, interesting.

Ben: That’s the language down here.

Leo: Ing-wen. Tsai Ing-wen.

Ben: Don’t say the G. Ing-wen.

Leo: Ing-wen. No G. Right, thank you for the lessons. How’s your Chinese? Is it good?

Ben: The way I answer is it depends on who’s asking me.

Leo: (Laughing) who’s talking to you. It’s better than mine. Not as good as Mark Zuckerberg’s probably.

Ben: No it’s much better than yours I think. His Chinese isn’t that good.

Leo: Is it bad?

Ben: Well he has an excellent vocabulary and actually his listening comprehension’s very good. In some respects it is probably better than mine. But his pronunciation is pretty terrible. He doesn’t really use tones that much. At all.

Leo: That’s critical in Chinese because Mah and Mah are very different words.

Ben: Right I mean yea. I mean because his—what it sounds like is it sounds like someone who is very busy and devoted a set part of his day to like hard-core studying. Which would make sense being Mark Zuckerberg and not enough time with an actual Chinese speaker who is correcting his pronunciation and having a good foundation there. That said, I mean—

Leo: Still impressive as hell. We’re not denigrating the achievement.

Ben: I think his vocabulary’s probably better than mine. And that’s why he is understood and he’s able to get across because he actually speaks, he has all the right words in the right places.

Leo: He knows the words.

Ben: Right, exactly. And so—

Leo: But he sounds like a robot probably.

Ben: Well it just sounds weird. But I mean my tones aren’t great so I’m not, I’m the pot calling the kettle black and given the fact that I actually live in a Chinese speaking company and presume we have more freedom than Mark Zuckerberg—

Leo: You should be better than you are is what you’re saying.

Ben: Right exactly. This is pure spite and jealous speaking.

Leo: (Laughing) It’s great.

Ben: I say that all the time.

Leo: Are you in Taipei? Where are you?

Ben: Yea, I’m in Taipei.

Leo: Taipei. And joining us from upper New York State, how’s the ice racing, Tim Stevens?

Tim: A little to damp unfortunately. It’s been a warm winter. People were water skiing on Christmas.

Leo: What?

Tim: No ice racing yet, unfortunately.

Leo: That’s right. Christmas Eve it was like 72 degrees in downstate. It was like summer.

Tim: Yea, 70 degrees up here on Christmas Eve which is not good for the ice production I’m sorry to say. And a truck actually just crashed through one of the local lakes. Somebody got a little too eager trying to get out there on the lake. So not quite yet.

Leo: I can’t resist noting for those of you watching video, Tim’s highly impressive collection of badges, conference badges over your left shoulder there. I have a collection but boy, that think is, that think looks like it weighs 50 pounds.

Tim: Yea, and every now and again I walk by and knock it off the wall and I spend an hour and a half putting it back up there again. It used to be in a nice order but not anymore. I’ve got a bunch more since CES in Detroit.

Leo: See I’m trying to cut down on my conference attendance so my badge ball is not growing as big as yours. I can’t believe I just said badge ball. Hey coming up in just a little bit (laughing)—

Ben: We’ve got to edit out the awkward pauses.

Leo: We have a newsletter now. When did that start? Just now? This is the first week? All right if you want to sign up for our TWiT newsletter, we’ll put it out every Sunday for Monday consumption. It will tell you what’s ahead in the week for TWiT. You can sign up at TWiT.TV/newsletter. This is exciting. Very exciting. And I will probably be required to contribute some to it and others. But it’s mostly just an update on what’s going on, network highlights, information about upcoming shows, reviews, picks, that kind of thing. We promise not to sell your email or in any way share it with anybody except us. But you will get a weekly email from us and that’s it. Just one weekly email telling you what’s going on with TWiT. And it’s free. Newsletters, as Reverend Dan says, are hot. Did you miss anything this week? We had a great week. You know what? I think we’ve created a video montage. When the editors aren’t busy cutting stuff out of the show, they’re doing things like this. Watch.

Narrator: Previously on TWiT.

Megan Morrone: I’m wearing this king’s hat because for a brief moment this weekend I owned TWiT TV.

Leo: What?

Megan: This is an app called Stolen. Oh, wait a minute. I already own Leo Laporte.

Leo: Oh, man.

Narrator: Triangulation.

Leo: We are talking about the best photography in the world with one of the best photographers in the world, Vincent Laforet.

Vincent Lafore: Photography’s ultimately about anticipation and knowing people, knowing their habits and predicting what’s going to happen in the seconds in advance. That is what the best photographers do on a regular basis. They’re incredible observers.

Narrator: Know How.

Fr. Robert Ballecer: I have a problem. My parents keep running into the garage door wall.

Bryan Burnett: I have seen people who put a tennis ball attached to a string in their garage but this sounds like you want to do what they are doing now.

Fr. Robert: This is my dad entering the garage with his Ti-Fighter. Stay on target. Stay on target. No, Dad, stop.

Bryan: Too close! Too close!

Narrator: Tech News Today.

Megan: It is not easy for bosses to monitor how long their employees are sitting at their desk. One thing that not many bosses have tried is secretly installing motion detectors.

Iain Thomson: Yes, this is the Daily Telegraph staff that came back over the weekend break to find little gray motion and heat sensors. It didn’t go down well to put it that way.

Narrator: TWiT. It’s free when you watch from work.

Leo: And yes, for those of you watching closely our app pick of the week on iOS Today was Secret which promptly was shut down. Huh? Stolen, not Secret. Stolen.

Steve: Secret is gone too.

Leo: Secret is also shut down. Stolen. Well actually we can talk a little bit about what happened with Stolen and why it was shut down. Coming up we’ve got a great Triangulation for you tomorrow. It’s a book I’ve been recommending in our Audible ads for some time called The Righteous Mind. Its author Jonathan Haidt is a professor or moral philosophy. Where do our ethics come from? Are they inborn or are they taught to us? The answer will surprise you and it’s very surprising. He also talks a little bit about why politics are so polarized in this country. Why it’s so difficult for like-minds to come to an agreement on anything. It’s a fascinating, fascinating book and I can’t wait to talk to Professor Jonathan Haidt. That’s tomorrow on Triangulation. Our show today brought to you by Squarespace, the place to make your next website. Squarespace.com whether you need a simple landing page, their cover page thing is so cool. I used a cover page for my leoville.com front page. It’s a way to introduce yourself and who you are to people, to show them links to your other social media because one of the things that’s great about Squarespace is how it integrates in your Twitter, your Facebook, your Instagram, your YouTube, your LinkedIn, and on and on and on. I just love it. And it’s so easy to modify it. Squarespace makes it very trivially easy to create a site, a blog, a portfolio. If you’re a band, a site that includes tour dates and an easy to use calendar. You can sell. In fact every template includes commerce so you can sell your CDs or do donations. It would be great for a charity. It’s all built in including mobile responsive templates that make it very easy for you to make a site that looks beautiful on any size screen. I am just such a huge fan of Squarespace. Affordable, easy to use and state of the art web hosting that never, ever, ever goes down. I mean I don’t know if they never go down but I’ve never had them. In fact even if you get a lot of traffic it just, it’s so robust. You get a free custom domain name with an annual purchase. It’s a great way to promote your business, to create and manage your store. And by the way your store, and this is not your typical shopping cart experience. It’s not going to look like some dumb shopping cart. It looks like your site. It matches your ethos. Are you a musician? Do you have a band? Do you have a business? Are you getting married? Don’t go to one of those crazy marriage template sites. It’s so much better on Squarespace.com. Try it free right now. Just go to Squarespace.com start your free trial. But do use the promo code TWIT and you’ll get 10% off when you decide to pay when you sign up. And you will. Squarespace. You should. Really. Squarespace.com use the offer code TWIT. We’re talking tech with the big brains in the business, Tim Stevens from C-Net. His new show by the way, roadshow at theroadshow.com. It looks slick from your first show. Really looks great.

Tim: Thank you. Thank you very much.

Leo: You’re doing a nice job there. And I’m thrilled for you because I know you’re really into the subject, so. It’s nice to combine your passions with your job.

Tim: It absolutely is. And I appreciate the kind words.

Leo: I feel like that’s what you’ve done too, Ben Thompson. It’s clear that you have a passion for the subject and you write so well at Stratechery. I immediately paid for a subscription because frankly the insight that you offer is just second to none. Stratechery.

Ben: And I always clarify. If you go to Stratechery there are free articles.

Leo: Oh yea.

Ben: What you pay for is to get 3 extra ones a week basically.

Leo: Really worth it. Really great stuff. And The Exponent Podcast. Is that going well for you?

Ben: It is. It’s going very well. Exponent.fm so we’re up into the 60s now and yea, it’s quite popular. It’s me and James Allworth who’s actually a co-author with Clay Christensen of How Will You Measure Your Life and a great background on current society.

Leo: That’s great. I love Clay Christensen. I’m not familiar with James so I’ll have to start listening.

Ben: We approach things, we do get into some of the analysis stuff and certainly there’s a connection to Statechery and what I write about. But I think we’re particularly interested in the social impact and of things. And this one will be more about cars. But I think last week we talked about inequality.

Leo: Yea, you used the Paul Graham essay as a starting point which is a good place to start.

Ben: Yea, absolutely. It was certainly did a great job in sparking conversation. The conversation which is great. I think it was unfortunate in some of the words were spoken but they weren’t conversational aspect which doesn’t do anybody good. But yea, that’s definitely a check it out. If you are listening to a podcast that is probably the product I should push more than the site.

Leo: No, I’m not sure I agree. I think it’s both. It’s both. Some people like to read. And some people like to listen. I like to watch. And I can watch a lot (laughing).

Ben: I have to like make my bed and take a shower.

Leo: I know. What is this? What is this? You actually have a stuffed animal or is that an actual cat.

Ben: No that’s my son’s. It’s a Santa Olaf stuff animal.

Leo: Perfect. Because your son isn’t culturally confused enough.

Ben: I wanted to humanize him for myself.

Leo: (Laughing) also with us my good buddy Steven Kovach from techinsider.io. He’s @techinsider. Or, no, you’re not @techinsider.

Steve: Yea, technically.

Leo: Are you?

Steve: Yea.

Leo: And @stevekovach. Nice.

Steve: You can see me at both. But @stevekovach is the best way to follow me.

Leo: What is the best pizza place in New York?

Steve: You know what? I have not read that story yet. I guess that would help.

Leo: I could tell you right now, it ain’t that pizza. Because it’s square.

Ben: You want to get into controversial topics, geez.

Leo: That is not pizza. Pizza’s round, not square.

Ben: It’s not New York values.

Leo: And it ain’t that pizza. Rizzo’s Fine Pizza? No I think not.

Steve: I’ve never even heard of that.

Leo: No, nobody eats there. It’s too crowded. Anyway great to have all 3 of you and let’s just real quickly congratulate, I can’t pronounce her name apparently, Tsai, for becoming the first female president. So what’s the story there? Is there a tech story, a tech angle there, Ben?

Ben: Tsai Ing-wen.

Leo: Tsai Ing-wen.

Ben: No, I think probably—

Leo: She’s the independence party, right?

Ben: Well I think that both parties are at least in their public positions much more toward the status quo. You know, no one wants to—you know, there’s always stories about instigating China or whatever. No one wants to instigate China against what China wants to do. Which is kind of forgotten in these stories. They have free will.

Leo: It’s like having a thousand pound gorilla over your shoulder breathing down your neck.

Ben: Yea certainly impacts the politics in all ways. I think the more interesting tech angle in Taiwan generally is there was actually an excellent story in the New York Times on Friday talking about the struggles of Taiwan’s tech industry and it’s kind of the old guard is still really holding on as far as like just from an executive position. And Taiwan really being, was tied so closely to the PC in particular and has had a very difficult challenge in kind of adapting to the new rule of order. And I think that that’s in so much that there is an angle that is the concern that in general tech won’t be the driver that it has been for a long time. And also that Taiwan needs to move beyond a sort of manufacturing sort of mindset and approach. And it’s a generational thing again. I mean I think the big thing that drove this election was discontent about things like wages relative to real estate for example. And there’s definitely a youth, much more of a component to this and a lot of disillusionment with the current government. I mean I’m not going to weigh in on either side because my job is about technology and not politics. But it was definitely a C change. The last two elections have been a real C change. Just the party in power basically almost wiped out and so it will be very interesting to see what happens over the next couple years.

Leo: There is a tech angle because Tsai is a cat lover.

Ben: Yes absolutely. She is.

Leo: So there you go. What more could you ask for? There also is a hashtag, Tsainami.

Ben: Actually, you want to get the tech angle, here’s a picture that I took. I took it the other day. But here it’s a roller coaster. This is a tabloid type magazine. It’s hard to see probably. It’s a roller coaster with Apple on the front and then all like a bunch of famous Taiwan component suppliers on the back and it’s saying “Look out below” sort of thing. You know, concern about as Apple goes, a lot of Taiwanese companies. But in general that’s, for better or for worse that’s still the tech angle that matters is components and the supply change and the hopes for Taiwanese branded tech companies like Acer and Asus and HTC obviously did not turn out. And there isn’t a great software industry and that sort of thing.

Leo: Hard to compete with a manufacturing giant of China. I mean that really is tough.

Ben: I mean there are still successful companies.

Leo: But Japan and Korea are both starting to feel this pressure, right?

Ben: Yea absolutely. I think anything that is, you have to compete by being very highly differentiated and the labor focused manufacturing. There’s very different parts of the supply chain. I mean everyone knows that phone are made in China but actually the value of China is like 6 or something. So if you look at an iPhone –

Leo: It’s assembled in China but really the software is American.

Ben: Well if you go through and you calculate the value of the parts that go into an iPhone, actually the United States is actually first, I believe South Korea, Japan and Taiwan—

Leo: Because Samsung makes the chips.

Ben: And the memory also. And there’s different parts. But then like for example like the camera. The sensor’s made in Japan. The actual lens module is made in Taiwan. Taiwan I think by volume might have the highest number of suppliers of the iPhone or it’s somewhere up there. And so the made in China, there’s lots of parts that go into making a phone. It’s assembled in China would actually be a more appropriate term.

Leo: The TSMC, the big Taiwanese manufacturing company is 2nd source now for the chips, the CPUs in iPhones, right?

Ben: Well they’ve been the sole source at times. Kind of back and forth. I think right now it’s split. I believe that people suspect that Samsung’s going to get it back next year. Samsung just got Qualcomm contract which is a big deal. But yea, TSMC is the largest chip manufacturer in the world.

Leo: Wow. Hey if you have a Nest Thermostat you might have been left in the cold literally this week. That’s what Nick Bilton said in his New York Times article. The Nest Thermostat which is of course owned by Google as the entire Nest company is, had a mysterious software bug. Apparently there was a firmware update pushed a couple of weeks ago that drained its battery and sent Nick’s home into a chill in the middle of the night. But Nick wasn’t alone. Many, many Nest owners will. Now Nick has a newborn. He said he was woken by the baby crying at 4:00 AM. The Nest was off. His room was 64 degrees and dropping. Apparently this was quite a bug. And not so much if you live in Los Angeles as Nick does but very much so if you used a Nest in your vacation home in the Rockies for instance and your pipes are frozen. There is a fix but you have to take your Nest off the wall, plug it into a computer via USB, push a bunch of buttons. It’s a 9 step process to reset it. It takes at least an hour. And meanwhile you’re freezing cold. It’s not a good thing. Nick says a number of his friends did the easy thing which was go out to the hardware store and by a $25 not so smart thermostat that actually worked. Kind of a black mark for Nest but even maybe more importantly a black mark for the internet of things.

Tim: This is one of those things that you want to always work, especially if you were away on vacation and that kind of thing happened. You know if you were away for 2 weeks and it was below freezing, absolutely. Your pipes could be burst and you could be in a lot of trouble. These are things that absolutely have to work all the time. Just like the Nest Protect. That was another big bust.

Leo: You waved at it to turn off the sound but it turned out it also turned off the smoke alarm. Permanently (laughing). Not such a good thing if you have a fire. In fact we were talking about this with Jason Calacanis about this yesterday on The New Screen Savers. And he is of the opinion that Nest is struggling a little bit. He thinks there are some defections from Nest. People don’t like working for Tony Fidel. And that some of the Nest technology is not doing so well. And he made this point which I thought was interesting. By separating Nest out from Google, making it a separate division under Alphabet, yes, there’s more autonomy, yes the company can be run more independently but it also means you can’t hide failure. And it actually could, if the company is struggling like this, could hasten its demise.

Ben: Yea this is a pretty brutal failure I think by Nest. I’m actually, I think, it seems like they’ve skated by relatively unscathed. I mean fortunately, I thought there’d be a couple pipes bursting stories to Tim’s point. I mean there you’re getting into tens of thousands of dollars potential worth of damage. But I mean the big challenge with selling something that’s way more expensive than the standard is it’s all about the delta between what you already have and what you’re going to go out to get.

Leo: Yea, it’s already four times more expensive or five times more expensive.

Ben: Right. So this has offered all these upsides but if you have this big potential down side in buyer’s minds. Like know that compresses the delta just as much as any feature can expand it.

Leo: Nick points out by the way that deep buried within the Nest agreement is a requirement that you use arbitration. So if you did suffer some damage there are limits to the damage you can specify and you have to go to San Francisco for the arbitration.

Ben: The advantages of software.

Leo: And you have to keep it confidential. Blah, blah, blah. We’re seeing a lot more of that, right, those arbitration clauses.

Steve: And everyone reads them before they agree to them.

Leo: Oh yea, right. Yea, fine, whatever.

Ben: It’s interesting. This is an advantage of software for the companies that you have to, like there is a capacity to click a ULA. If you can’t click a ULA in your Honeywell thermostat that you get for $25 bucks at the software store. And so I think the validity of ULAs is I think a little bit of a still open question. But generally it’s been supported because people are actively clicking accept whereas something like, “Oh it was in the box and you implicitly accepted it” is you know much more difficult. And hey, Nest took advantage.

Leo: This is not the only internet of things failure in the news this week. One of our sponsors, Ring, makes the video doorbells had a problem as well. There was a post from a security blogger who had figure out that if you take the Ring Video Doorbell which is a doorbell that’s tied to your Wi-Fi as a camera, microphone and speaker, if you take it off, plug it into your computer you can fairly easily extract the users Wi-Fi login and password. And I tweeted “Gee, I be much more worried about losing my $200 doorbell than that.” But the point is you could put it then back on, you do this in the dead of night, put it back on, hope that nobody noticed when you removed the Ring and then you’d have the password and you could continue on with it. Ring however had a better ending to this story because it turns out that the Ring Video Doorbells are updatable automatically. They are on the Wi-Fi. And Ring was alerted of this security flaw, developed a solution and pushed it out to all active Ring devices 2 weeks ago. So at this point no Ring Video Doorbell is vulnerable. But it points out, this is just the beginning of a lot of stories. Because all of these internet of things devices whether it’s your Samsung refrigerator with a camera in it or your doorbell or your thermostat or your car, they’re all tied to your Wi-Fi and if security practices on these products aren’t good, it could lower the total security of your network.

Ben: I saw a great tweet today. I can’t find it right now. But I think it was something like, “In 1995 our houses were full of digital devices blinking 12 o’clock. In 2025 our houses will be full of digital devices with the password admin.”

Leo: (Laughing) well you know one thing that Ring did right which is they put in a mechanism for automatically updating the firmware instantly. And that got them off the hook for this one. So they did do that right and I think that that points the way for the future. A lot of these devices are not updatable or they don’t have the mechanism to do that. And that’s a problem. That’s going to be a problem. I wonder, the Nest can be updated over the air. In fact was updated over the air. I think that was the problem is that they pushed a firmware update which then 2 weeks later caused this Nest problem. And once it’s dead you can’t update it. It’s too late. Let’s see. Facebook Mentions for Android. Big deal. I did though have to do a live stream immediately just to see if it worked. Facebook Messenger apparently an app for Mac on its way according to photo evidence TechCrunch got from somebody. A U.S. widow is suing Twitter saying that Twitter gave voice to ISIS. Her husband was killed in Jordan and she says, Tamara Fields, she says that when her husband Lloyd died in a November 9th attack on the police training center in Amman, Twitter let the militant Islamic group use its network to spread propaganda, raise money and attract recruits. This is a tough case.

Ben: No it’s not. It’s not a tough case.

Leo: Why not?

Ben: Because one—

Leo: She wants triple damages. Twitter violated she says the Federal Anti-Terrorism Act. Hard to prove.

Ben: Yea and needless to say I think it fails, I’m not a legal scholar but I would hope it fails from a legal standpoint not just the obvious common sense standpoint. That said I mean it’s certainly you can make the cast that Twitter’s definitely significantly increased regulation of what is allowed and isn’t has opened them up to this more than they might have been in the past when basically anything was allowed. But certainly.

Leo: They need to have knowledge or willful blindness for it to satisfy the legal standard. In this article though from Reuters they do mention that a couple of years ago a lawyer convinced a Brooklyn New York jury to hold Jordan’s Arab Bank liable for handling transactions for a Palestinian Militant Group Hamas. And while that bank settled in August it maybe provides a precedent. This is a tough one for Twitter just in general. I don’t know what to do. Are you responsible for every bit of stuff that’s on Twitter?

Steve: Not even close. Again it’s the willful thing. And they’ve been shutting down accounts left and right from ISIS as soon as they get alerted.

Leo: But you can’t permanently shut down a person because they just create a new account. It’s too easy.

Steve: Yea. And then what you going to do, sue the entire internet? There’s no case here.

Ben: Well I think it is a challenge for Twitter. There was the controversy, controversy a couple of weeks ago about the Gamergate guy getting his verify check removed.

Leo: @nero

Steve: De-verified.

Leo: De-verified, yea.

Ben: Which is interesting because I think that actually—

Leo: It had the complete opposite effect, right?

Ben: I’d really rather not wade into it but—

Leo: No, because we’re just publicizing the guy and his feed.

Ben: Well I think in general it’s the exact opposite direction Twitter needs to be going. There are absolutely, and I acknowledge strong arguments for allowing anonymity. On the flip side there are very real problems with anonymity and I think that Twitter should generally be moving towards more verified accounts and less, and having less room for this sort of drive by sort of abuse that is unfortunately much more suited to Twitter than almost any other network. I mean the beauty of Twitter is I can reach out and have a conversation with anyone on the planet. They maybe not reply. One of the problems is that anyone on the planet can reach out and have a conversation with me and sometimes that’s not particularly pleasant. Now for me I don’t really have a problem because I’m fortunate to one have great Twitter followers, thanks guys, I love you. And also to be a, to be frank, a white male, just don’t have to deal with that. There’s others that aren’t as fortunate. And I mean not as fortunate as Twitter mentions. They’re perfectly fortunate as human beings that have to deal with a significant level of abuse. And the problem for Twitter is at what point is that worth it? At what point is it worth it to have drive by callouts that you didn’t ask for? And that’s a, what’s the word? It starts with an E. That’s an existential problem for Twitter. Like people just not wanting to be there, not wanting to be on the platform. And I think there’s like the whole free speech sort of thing. Like there’s different aspects of free speech in that one, Twitter’s not a government and free speech is a guarantee that the government supports free speech, not a cooperation. But two, allowing abuse and which by extension drives people away and makes people not want to be part of the conversation, you are in aggregate limiting speech arguably even more than just legislating against hate speech specifically. As hard as that is to regulate. And I think this aspect of private corporation allowed speech, it gets looked at as such a black light issue that is how free speech works, not when free speech versus controlling abuse are not necessarily in opposition. Because there’s a very real cost to speech that comes from unfettered abuse. And it’s more of an opportunity type cost. It’s sort of people and conversations that disappear. And there’s not an easy way to track or measure them. And I think that’s a thing a lot of people tend to undervalue that.

Leo: Let’s take a break. I wanted to do some final thoughts in just a second. But I do want to mention in this world of stress and strain, there is a place you can go for a healthier less stress life, into your head, with Headspace. I am a big fan of meditating, have been using Headspace since July just a few minutes a day. And everything just gets a little bit better. I love every time I hear Andy Puddicombe’s cute little British accent I just, kind of my heartrate slows, my blood pressure goes down. I’ve become a huge fan. Maybe you say Andy’s TED talk, 5 and a half million views. He leads all the meditations in Headspace. He was a Buddhist monk for 10 years. This is really good stuff based on thousands of years of tradition but also many, many modern scientific studies that show the positive effects like improving focus, relationship harmony, decreasing anxiety and stress. I love Headspace. I was so happy when I discovered it. And I want to invite you to try it for free. All you have to do is go to Headspace.com/TWiT. They have a thing they call their Take 10 Programme. Because if you do this just for 10 days and I just invite you to try this 10 minutes a day for 10 days. It’s not even 10 minutes initially. It’s very brief. You will really see its benefits. And you can then decide if this is something for you. Do me this favor. I think it is awesome. Headspace.com/TWiT. 10 free meditation sessions. I almost don’t want to use the word meditation. We need to come up with another word. The magic mindfulness session of something. But it really does the job. Headspace.com/TWiT. You’ll sleep better. You’ll feel better. You’ll be more relaxed. And because it’s on your computer or your phone or your tablet you really can use it anywhere, on the train, anywhere. Hey, here’s some really good, by the way thank you, Headspace for your support of This Week in Tech. Thanks to all of our sponsors. Thanks to all of our hosts today too, our contributors, really you make a huge difference on the show. I’m going to end on a happy note.

Ben: After you tricked me into talking about both politics and Gamergate.

Leo: Man, you brought me down. But the good news is the Puppy Bowl this year will be in VR, ladies and gentlemen.

Steve: Yes!

Leo: Yes!

Tim: My Oculus doesn’t come until June. This is a terrible world.

Leo: Can you wear Cardboard for it? I hope so. It will be on YouTube and on Animal Planet’s website. You can see it in Samsung’s Milk app if you have the Gear VR you’ll be able to use the Milk app. Strap on your Cardboard, folks and be able to—I’m actually a big fan now of 3D video. And thanks to the fact that YouTube and Facebook support it and you can just do this with your mouse you know and mouse around.

Steve: It’s fun on Facebook when they do those videos.

Leo: Did you see my videos from my vacation? I did 3D videos of my cruise ship.

Steve: Cool.

Leo: This actually is much higher quality. I was using the Theta which is the Ricoh Theta S which is inexpensive, $350 bucks, very easy to use. But this is really, looks high quality. They’re probably using something even better. Nikon’s now has a really interesting high quality 3D camera at CES. I don’t know if any of you guys got to see it but I’m kind of excited about this. I want to do TWiT this way. Won’t be as exciting as the Puppy Bowl.

Tim: It definitely seems like the next generation of action cameras will be using this 360 footage which would be an interesting thing when HDTVs came along and now 4K there was a real glut of content. And it’s been one of the things that people were skeptical about VR because there’s such a small amount of content available. But if these, you know, 360 action cameras become popular, maybe that will be, you know, how a lot of people are consuming this content. And maybe that will build that until we have more cinematic quality content and that kind of thing.

Ben: And I think the 360 stuff is more interesting than the 3D stuff.

Leo: Oh, much more, yea.

Ben: The one thing that people, like TV manufactures I think you know, always pushing for 3D and pushing for 4K and this sort of thing fail to appreciate is that a big reason why people bought HD TVs was not for HD. It’s because the TV set itself was physically such a better object, to have this thin thing instead of this big massive box. And I think that with VR, the immersive aspect is such a, like that’s just as important as the content itself. That it is a physically different sort of experience as opposed to the 3D or even the 4K sort of thing.

Leo: I love this. This is a video from my vacation with the Theta S. I’m on the back of the boat and what you can do, it’s like a blog where you see me talking, but you can look around. You can look at what I’m looking at. You can look at what’s going on. You can look at the sky. You can look at the ocean. You can look at what’s going on behind me. And this was a cheap $350 dollar camera. I take it with me everywhere now because I feel like this is a really interesting way. If you’re just talking like we are I don’t know if there’s much value to it. But if you’re in somewhere interesting, the ability to look around is kind of neat.

Ben: Right especially when you can do that just by moving your head instead of having to—

Leo: Well you can. If you had Cardboard, I mean obviously—but if you have Cardboard or you’re doing it on your phone, even as you, you can move around with your phone with YouTube and Facebook it senses your accelerometers and it actually does move around with you which is kind of neat. I feel like this is, this is a surprise technology that came out of nowhere. Do you think this is why Hero’s struggling a little bit? GoPro? Didn’t GoPro, aren’t they going through some stuff?

Steve: They’re in big trouble, yea.

Leo: Yea, what’s that panel about? The stock is tumbling.

Steve: They’re laying off like 7%.

Ben: It’s all about the history of every single non-software differentiated hardware company ever. I mean they sell like, the story is it’s all about the community. The reality is there is no pure hardware company that doesn’t have differentiated software that has been able to maintain sustainable profits.

Leo: That’s a really good insight. It’s just too easy to copy them.

Steve: The CES floor was littered with just dozens and dozens and dozens of GoPro clones. And they look the same, these Shenzhen based companies just pump them out. Same, it’s the same gadget.

Tim: But it’s always been that way and GoPro always been able to elevate them above the herd by having this brand image, you know these silly looking silver cameras on the helmets of all the pro motocross racers and everything else that you want to be. But definitely these things are becoming more and more commoditized. It’s going to come more difficult for them. They’ve got to stay progressive. They’ve got to say ahead of the curve and right now they don’t have an affordable 360 VR option. They do have the high-end Google thing that we saw at IO last year but that’s $10,000 dollars or something like that. They need a 360 camera and they need a drone in the market really soon. And certainly there’s all the talk that those things are coming but they’re not here yet.

Leo: Wouldn’t you love to have—

Ben: There’s two things. I mean one, yea, those points are both well made. But two, a brand ultimately has to be based on something. And GoPro not being different is a problem for the brand in the long run. And three the reality is the brand that matters as far as community and content when it comes to this sort of sports that GoPro focuses on is Red Bull. I mean Red Bull has occupied the position that I think GoPro was striving for. And so they’re a nice secondary brand, but that’s a secondary brand based on an increasingly disappearing brand value. And brands, that’s why brand’s fade. The reason why the Apple brand for example, Apple doesn’t succeed because—Apple absolutely does succeed because the Apple brand but that brand in the long run, if Apple stopped innovating, if Apple stopped having interesting new features and new products, the value of that brand would fade as all brands do. And how does Apple stay differentiated? By having software differentiation. Like that’s how they differentiate their products is the key is iOS and that sort of thing. And GoPro by lacking that, again, this is just what happens. This is all unexpected and again the challenge as far as making stock stuff goes is timing. Although this is one that probably would have been easier to get right than others.

Leo: I don’t know what Nikon’s 360 degree action camera will cost or when it will be available but having had such a great experience with the Ricoh and knowing how much more could happen with higher quality images and better audio and so forth, I’m very excited about this category. This kind of out of nowhere category that does transform the action cam because, well, wouldn’t you, Tim, when you’re doing your ice racing in your truck, love to have a 360 degree view? You could talk and people could watch you but they could also look out the window.

Tim: Yea, I’m excited about trying this stuff on my motorcycle in the summertime. I usually have a camera mounted on the tail of the bike but it’s difficult to position cameras because if you want to see forward or backward, now you can just have one and see in every direction.

Leo: Yea, you don’t have to worry about it. In fact it took me a while when I’m shooting these to remember it doesn’t matter. I don’t have to point at myself. I don’t have to point at anything. I just hold it and it’s getting it all. I would start aiming the camera and realize oh, what am I doing? I don’t need to. I’m just confusing people by moving it around.

Ben: Hey, Tim, does that, there’s that video and I think they’re coming to market soon, the drone that like follows you? Does that actually work well? Yea, yea, yea, does that actually work?

Tim: One of those just imploded. Is that the company?

Jason: I think it was Lily, yea.

Leo: Oh, no.

Steve: Intel has a really impressive one they showed at CES. It’s like $1,200 bucks and has that real sense camera that can dodge obstacles and all kinds of stuff. It was really impressive.

Ben: Yea, well they have to make it to market though, right?

Leo: That’s the problem.

Tim: The Crowdfunding one is not going to happen I believe which is a shame.

Leo: Was that Nixie? Which one was that one?

Steve: Lily.

Leo: Lily? Nixie’s the one that you wear, it’s a wristwatch you wear and you take it off and it flies around. That was so weird. And it just didn’t feel like that was going to go anywhere. I don’t know (laughing).

Steve: God. Oh my God.

Jason: I think that went onto HPs or Intel’s award.

Leo: They’re not out of business anyway. I mean they’re still around. Yea, there it is, Intel. They had a demo at their CES keynote.

Steve: So it’s not just a CGE innovation.

Leo: Apparently not. Well, you wouldn’t want to wear that prototype but.

Ben: I mentioned before that the mistake technologists make is thinking too much of the technology and not enough of the go to market angle. Well, the only thing easier than thinking about technology relative to going to market is thinking about, is building concepts versus actually building. There’s drawing board, easy. There’s concepts, harder but still easier. There’s prototypes. There’s actually producing something at scale which is, there’s the huge leap. And then there’s actually finding a market which is actually even bigger.

Leo: And distribution, yea.

Ben: And the focus, what people think about and the focus of the press in general and stuff, tends to be completely backwards relative to what matters.

Leo: All you have to do is look at my sad graveyard of supported Kickstarter projects to realize.

Tim: (Laughing) mine too.

Leo: (Laughing) it’s very hard to get these things to market.

Tim: The Oculus is, that’s going to pay off pretty soon.

Leo: Yea, I can’t believe I get a free one.

Ben: It’s the portfolio. It’s the portfolio.

Leo: Portfolio.

Tim: There you go.

Leo: I am supposed to get my Robin Smartphone soon. I don’t know if I’ll ever get the, I bought a modular smartphone case which I still haven’t gotten. But the problem is by the time I get it, the smartphone it’s designed for, I’m not going to be using that. So, crikey. You just can’t win. $9 computer? Might get that. Smartphone? Supposedly I get that next month. I hope I get mechanical pencil someday. Ladies and gentlemen, I thank you so much for joining us. Thank you, Tim Stevens. I hope the lake freezes soon.

Tim: (Laughing) thanks very much. Yea, I hope so too. It will be hard to ice race without the ice.

Leo: Yea, it’s great to have you and congratulations once again on The Roadshow. Theroadshow.com. If you’re into cars and what’s happening with cars, you couldn’t have picked a better time to do it or a better person to do it. Tim Stevens, congratulations.

Tim: Thank you, Leo.

Leo: Thanks also to Steve Kovach. Techinsider.io is the new site. Not that new, 6 months old but I feel like it’s new in tech terms or something. Great stuff including the best pizza in New York and how gravitational waves can change physics forever, right next to each other. What other site’s going to give you that?

Steve: It’s a good mix.

Leo: It’s a great mix. Yea.

Steve: How could you not want to scroll through that forever?

Leo: I’m going to bookmark. I’m going to make you my homepage.

Steve: There you go, perfect.

Leo: I don’t want to miss a single—by the way, just real quickly, Making a Murderer. Did he do it or not?

Steve: No spoiler. I’m not clicking on that.

Leo: Don’t click on that! Don’t click on that! No! The hottest Netflix show ever. Well I have some strong opinions. We’ll talk. And you don’t have to worry about it because you’re in Taiwan and you get Netflix but you only get 4 movies and they all have Bruce Lee in them.

Ben: Actually I’ve had Netflix for—there are ways to getting Netflix.

Leo: No, they’re going to crack down on it, dude. Did you see that?

Ben: Well they, yes, well they’ve cracked down on it before to varying degrees of success. But I think they’re more motivated now that they launched, they officially launched in Taiwan as part of the 130 countries that they launched in Taiwan.

Leo: What movies? Is it a pretty good collection on Netflix Taiwan?

Ben: I don’t know. I mean I mostly, I subscribe for, which I think is their goal, for their shows.

Leo: Right.

Ben: Which, although they don’t have in the US, House of Cards. Or they don’t have it in Taiwan. They don’t have House of Cards in most markets. Part of the reason is when they created it, one of the reasons it got off the ground was actually it was a joint deal where Sony actually kept the international rights. It actually aired on TV in Taiwan a couple of years ago.

Leo: Well do you have To Make a Murderer because that’s a good one too.

Ben: I do. But I haven’t—for me signing up for things like Netflix and HBO is mostly aspirational.

Leo: Yea, someday I’ll get to watch TV again.

Ben: All these shows that people talk about that I say I’m going to watch and then I don’t.

Leo: You thought it was a good idea to have your own business.

Ben: I’m drastically behind on, yea.

Leo: (Laughing) well we’ll let you go because you’ve got to go to work. Hey, thank you all three of you. Really a pleasure. Thanks to all of you for watching the show. We love having you live because then you’re in the chatroom and I know you’re out there and I can feel your presence. 3:00 PM Pacific, 6:00 PM Eastern Time, 2200 UTC on TWiT on Sundays. We also love having you in the studio and a great studio audience today. We appreciate you coming. If you want to be in the studio audience—Mark Zuckerberg’s here. It’s nice to see you with your wife Pricilla. Great to see you. All you have to do—you do look a little bit like Mark. Has anybody ever told you that? No? All right. No, first one. Just email tickets@twit.tv and we’ll make a seat out, put a seat out there for you. Don’t forget our newsletter, twit.tv/newsletter if you’d like to be in the know, the insider, get that regular weekly newsletter. We promise to not do anything else with your email address ever, ever, ever. I take that seriously. And tomorrow, Jonathan Haight. It’s going to be a great Triangulation at 11:00 PM Pacific, 2:00 PM Eastern time. Thanks for joining us and we’ll see you next week! Another TWiT is in the can. Bye-Bye.