The New American Power Center
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So Alex, are you upset that you're missing the PVA holiday extravaganza tonight? I am. I wasn't properly invited. You didn't want to pay for my ticket. I don't know how Alex would have played there. You know what? I actually think a bunch of people would have cornered him as an exotic. As an exotic? No, just like, you seem like you have something interesting to say and we're going to try to figure out who you are with that beard and dressed in black. I love it.

Also, another exciting development, Troy's come out of retirement with his newsletter. It's now a group effort of sorts. I still want to embed... So basically, everyone is listening. There's now a companion, a PVA companion, which is... Well, Troy, you explain it. It's going to be every... Is it Friday or Thursday? Well, do you mind if I start with a little bit of perspective on this? Okay.

I was getting right to the CTA. I would aspire, Brian, to write a great newsletter. It's really, really hard to do. And to me, a great newsletter. Yours was great this week. Like go to go to go to good.

It hasn't been that way lately, but it was terrific this week. I appreciate the feedback. And I love- I say that. When I say in the newsletter, please give me feedback. I love to hear it, but it's really, I like to hear the positive stuff better. But no, I appreciate it. Yeah. No, I mean, I think a great newsletter auteur is a thing of wonder, just like a great artist or a great musician. Like Tina Brown is a great newsletter maker. She is a gifted writer. That news items guy, John Ellis-

He's a gifted curator. He tells you the good stuff. There's too many in my email box that are just kind of moderate utility. So I would like it to, I would like PVA to be good. And I'm trying to figure out how to make it good without it taking that much effort and do it in a way that's repeatable. So that, that maybe is, is a big thing to consider.

to do. Alex has said for a long time, why don't you just make it like a companion to the podcast? But if you just make it like, oh, we talked about this and this and this, and here's a few links, I don't think that it does our readers much of a favor. So I would like it to expand now and then as we did this week.

This week I talked about nerd fashion and the impenetrability. That's not a word, Brian, help me. What's the word I'm looking for? Impenetrable? I think it's impenetrability.

And penetrability is a word. Just modern technology is becoming so hard to understand, but yet so massively impactful to how we will live. And I think that creates even more populist tension. Anyway, so we wrote a little thing about that. We wrote a little bit of Holding Company. And I'm trying to get Alex to verbalize, to be verbal.

to be written, like to actually make it. I'll write the thing, Alex. I just want you to sound off below it. Why don't we just embed Alex's voice note? Yeah, but he actually wrote a couple sentences this week as a comment, and it was a little nonlinear. I cleaned it up a bit, but it was good. It was good. I was happy he did it. I asked him for some links. He didn't bitch at me. He usually says I'm stuck in traffic. He's not going to do it every week. It's always how fucking busy Alex is. Alex.

Alex is so busy.

700 word paragraph, it says Alex dot, dot, dot. And I just added some words to it. I think the fact that it made any sense was kind of impressive. I would like people to know just about your process and how chaotic it is. And it just, it did turn out really well though. It did turn out really well. You got to get to start, Troy. Troy gave me the advice, get to start. When I take the hut and I hand it to Morrissey, he always, always gets a few yards. Yeah.

And it's nice. The point is this. I want the newsletter to work as an independent media unit to be useful to people, not just to be, you know, a light news sort of podcast companion. Last week, the last thing I'll say about this, last week I listened to our podcast and I thought, you know, it's a nice podcast. I like it. And it's good. And I think that it makes some people happy.

And so I want to keep doing it. And I thought, how can these things work together a little more symbiotically? I got a big list or a decent list, I guess, for like an old person. So that's what we're going to do. I don't know. What do you think? Should we keep doing it? Yes, we are. You got to commit to it. You got to commit. People reward consistency showing up. It's true. I like people.

People should check it out because I think what I like is trying to come up with some kind of more conversational format because as a companion to this, this is a conversation. I think it needs to have a conversational format. I don't think anyone has really nailed that kind of thing, but...

you know i think it should that's why it's important that we find a way for alex to be involved in the conversation even if it's his voice note i'm still i'm still into like alex contributing we'll try the voice note the problem with the voice note is you have to click out to get acted and there's some kind of arrogance with listening to alex pontificate solo i i just want him to type a couple sentences he can use uh uh some kind of ai thing to help him

It's cool to be literate, Alex. It's cool. I get it. I get it. He's post-text. I mean, it's fine. I was just on a board meeting and I don't like the smile and nod board meetings. I like them to be more confrontational.

I think that is better service to both the fellow board members and the management team. And we'll get into this more. The CTO was proudly displaying an AI sort of enhancement to the page, Brian, where you could query this vast repository of useless content on the site to answer questions. And I'm like, guys, for

First of all, ChatGPT can answer those questions. And like, I don't know that we should be spending more time talking about incremental page views anymore that we're going to get because we slapped AI on a page. Because that's not going to save this business.

And I just think that's sort of top of mind for me. So we'll get to that as well in this beautiful podcast. Well, let's start there then. We might as well start there. Because Time actually, I thought it was very interesting. Time came out with their person of the year. Trump rang, was down the street from me, and he rang the opening bell at the New York Stock Exchange.

And they rolled out, I think our friend Mark Howard was behind it. They rolled out a AI companion with scale AI that allows you to sort of, you know, an interactive experience. It's an AI toolbar. You can summarize it. You can have a shorter version. Alex, I don't think you're going to read the 10,000 word time article about Trump. Okay.

You can also have a translated- Oh, sorry. Is he person of the year? Sorry, I missed that. He's person of the year. Yeah. Trump is. Yeah. Who would you have named? I think that's right.

Yeah. I think it's strategically smart too. I'm sure Benioff... Anyway, maybe he did. Anyway, you can also use it to query the different sources involved. And I think we are going to see a lot of these experiments. Every, which is like a writer collective, had what I think is a pretty interesting one where you can use... There's an AI chatbot on the rail that you can use to query all of the different sources that the

Literally, who cares? I feel strongly about this. We're off to a strong start. I got to just interject here. Mark Howard is annoying me currently because he whined about not being invited to the party. I invited him to the party and then he texted me this morning and said, oh, I have to go to a Salesforce event. Like what? Next time I'm not inviting you. Secondly.

I like all this drama. Jess was invited. Yeah, Jess also has to go to the party. That's Mark's wife. Do we know who these people are? Jeff and Mark. Jeff and Mark, everyone. Jess, Jess. Jess, sorry. Okay, Alex. So do you remember? She was on this podcast. Oh, yes. Was she? Okay, yes. Sorry. You complained about it, actually, because you thought it was like branded content. It was. It was. It was great.

Yeah. Okay. Alex, do you remember when we were like all scrambling to add the share widgets on web pages and we were really excited that it would increase distribution? Yeah. All those companies. Right. Wow. And one of my clients is Gigia's former CEO.

Great. I hope he spends lots of money with you. Keep spending my friend. Now, you know, the promise of incremental distribution or more time on the page or another page or whatever, putting web pages are too hard for people. They're too hard back and forth and they're clumsy and they're filled with ads. And now we're going to put another toolbar on top of them that allows you to summarize it. Wait, I can summarize it on my browser.

I don't need that. Oh, it can read it to me. I can, I can do that on my browser too. I don't get it. I mean, I think it's, you know, maybe if it took your tech team and some, another per like another like parasite in the middle of the publishing business, it's going to take economics from you. That's going to give you the toolbar and say, we're going to make you AI, blah, blah, blah. Great. Great. You know what? It's not going to do anything.

It's just not going to do anything. It's not going to do anything for Time's business other than give them something to walk out in the market with this week.

But what do you do? What do you do then? I just feel like I'm like you then. So what do you do? You can't give up on the webpage. It is still where a lot of the action is for these businesses. So what do you do? Well, media is a business of bridging past to future.

You always got to have one foot in the past and one foot in the future. And what I would say is you got to take a little weight off the one in the past.

And what does the future look like? I don't know, Brian, you're inventing it. I mean, do you have to do audio? Do you have to do short form video? Do you have to find ways to monetize that? Do you have to create something that feels dramatically unique in the way that you create it, partner it, distribute it, that abandons, you know, all of our preconceptions about the webpage? Yes, you have to do that, right? Might that be a different business? Of course.

But I have thought about this since, like I wrote a post about it, I guess, a couple of years ago about the web page. And when I talk to the next generation or people that think like the next generation, dare I say, Alex, they're like, I don't like web pages.

There's too much friction. Now, that doesn't mean you don't read an article now and then I get it. Nothing is everything. But like that format of information delivery, I just think it's getting more difficult. And I don't think slapping an AI toolbar on there is going to make a difference. No, I mean, you either need your content to be unique enough or the utility you provide to be unique enough. And if you're just...

you know, putting an experience, which is at the end of the day, always going to be worse than the one chat GPT is offering on top of your content. I think a lot of these folks think that probably, yes, but we're the only ones that can access that content. I think what we're seeing now is that if it's on the if it's on a web page and if it's accessible by a human being, it'll be accessible by their agent. Hey, Alex, now that now that chat GPT seamlessly connects to the Web index, everything's there.

I mean, I have talked to numerous people just this week that said that they have now fully switched over from going to Google first to going to ChatGPT first. And it's either by changing their search engine or having their app on your desktop and on your phone. Overnight, you'll lose at least 30% to 40% of what you did on Google.

I think everybody, I've surveyed people about this. Yeah. And so I think that now, you know, Google has released a version of Chrome, which has a little tool on it. Well, it's a test. It's research and it's out of deep mind. But yeah, go on. It's called Project Mariner and it's the browser being able to do stuff on websites, right? And it's very slow and it's very much a research project. But this shows like where the browser's heading is that

The computer is just going to do stuff for you. I always think that. So like, you know, the old, I think, you know, example is I'm going to San Francisco. I need to like get a hotel, et cetera. You got to do all these different things, right? Yeah. I think that's the example people show. It's kind of like a complex example because people have all sorts of things that they like to do, like picking the right seat and using the points in a certain way. A lot of use cases just like compare these 10 hotel rooms, like literally like,

I don't understand what the difference is between these different rooms that are around the same price. Go out, do the research, and make me a table of comparison. Entire businesses are kind of dependent on that. Find me the actual cheapest prices. Go into the Amex travel portal, and Expedia, and the website, and find me the actual cheapest price.

Like these are, you know, hugely disruptive interface shifts, right? Interface changes. And at the end of the day, we're going to be lazy. And I think that the final expression of the computer is more or less the Star Trek computer, right? Where the captain says, computer, do this or that, or give me this information. And the computer just gives it to you. And so we're heading forward really quickly. Do you think they'll ever say, computer, give me a banner ad?

No, that's the thing, right? Computer, give me a recipe that has like, you know, 900 words in front of it or computer, you know, I think that it's going to be really interesting to see where you can kind of find value and define your value in a world where you'll be able to access all this stuff. And you know what? I heard...

The last Verge cast was kind of frustrating to me because I felt that the hosts were very, you know, nearly calling AI vaporware. There's literally, I think, at some point somebody says, yeah, you know,

People are trusting these things, but they're wrong 90% of the time. That's just not true. Like, I think sometimes like the media, because they feel so threatened by AI is- Oh, no, we're not going back to the media. Come on. The media doesn't exist anymore. Well, okay. The tech writers- I love it. It's like, well, we'll get into this later, but all the tech people are still trying to blame the media that they've made irrelevant. All this stuff about Luigi is coming from the you as the media. The media is not doing this. It's not true.

What I'm saying is that I'm seeing a disconnect between people's fast-changing daily habits and the way sometimes people

people write about AI as being something that's so wrong, so useless all the time. How can they put this product out into the world? However, if you ask most people, they're pretty happy with the results. They're fine with it. They'll tell you like, you know what, going through a website, I find a lot of wrong stuff too, but I can ask the AI what's the best TV to buy and it'll give me a thing and I'll buy that TV. There's a long history of this in media consumption, Alex, and it's like it reminds me

of the first time like this is like i don't know 15 years ago when i got serious in my car and i got used to not having interruptions constantly because there's no advertising and you're like there there's no going back as soon as you get a taste of that there's no going back and i think that interface analogy is a pro for for for open ai it anybody that

I think that there's a little bit of punditry going on and it's like, oh, is it really that useful or does it make mistakes 10% of the time? Use it, man. It's incredible. It just is. It's incredible.

It is a very useful daily tool. I cannot imagine doing anything without OpenAI right now. Honestly. Yeah. Yeah. Honestly, me neither. I would pay, you know, they just announced this $200 product. If they had changed their price to $200, I would pay for it. $200 a month.

Yeah, yeah. But that's for like the smart kid. You don't need the smart kid. You're good with it. No, no. But what I'm saying, it provides me so much value. Like I don't even think about paying for it. I think that's really, really interesting though. It's like, yeah, people are going to pay a lot for the smartest thing.

that you can buy with money. It's not just like, is it one price for everybody, you get access to a thing? No, you're going to use more CPUs, you're going to have more cycles to solve increasingly complex problems, and people are going to pay a lot for it. A lot. I think that there's sometimes, we're getting lost a little bit sometimes in the...

And the AI companies are responsible for that in that like, you know, the kind of like, you know, God intelligence, we're going to create like generalized intelligence. That's the goal. And, you know, you know, imagine jump from chat GPT-3 to chat GPT-4. That's going to be the jump from chat GPT-4 to chat GPT-5. And.

And even if you pause things today and you look at the environment that we have, where you have open source models that are incredibly capable like Lama, you have a wide variety of models competing with

You know, for kind of developer access and developer tool stuff. You have engineering tools that essentially can build programs by themselves. Even if you paused everything today and you just let the environment of people who are building software and thinking of new stuff just figure out what to do with the stuff that exists today, we're going to be in a very different world one or two years from now.

Right. Yeah. The applications are not keeping up with them all. No, no. And I think that going back to the article page, it is the laziest, dumbest thing to just say, oh, look, there's an article. I can slap a chatbot to it. Anyone can do that. Therefore, it has no value.

Right. You're just adding a layer of abstraction and saying, hey, this is a worst version of the thing you're used to. We're just going to apply it. It's like it's like when people were creating their own comment systems, you know, in articles. If you remember that, that used to be a big thing. Right. And instead, people just wanted to communicate about this stuff on like.

So I want to actually bring this into what Troy wrote about in the lead item of the PVA newsletter, which is this is all part of, you know, tech has become the overwhelming power center. Now, publishing always goes first with all of these changes, right? But this is coming to every industry.

If you look at how Tesla is going to dominate, it looks like, auto, transportation is going to be dominated overall by technology. Defense is being dominated by technology. Northrop Drummond, whatever they've grown. Those guys are not going to be building the future, probably, of defense. It's going to be done. Silicon Valley is very involved in this. As it gets into hard tech, you look at Bitcoin and crypto is growing.

could possibly take over finance ascendant ascendant maybe yes

Yeah. And I think it's really interesting though, to think about this like populist time and how tech threads that needle. This is not a great time to be an institution. And a lot of people who are loud in the tech community, I don't know how reflective it is, have co-opted the populist movement. And like, it's a little weird that the world's richest

person is using populism. And obviously we saw here in New York with the assassination of the United Health CEO, these populist passions can absolutely spill over. In my neighborhood today, there are postings up of various CEOs. I think I'm the CEO of the rebooting, but I was not up on one of them. And this is... Stay away from me. I didn't do anything.

Yeah, well, I don't know what happens with tech because it is such a power center and it is...

increasingly that is what American exceptionalism is. If you look at our dominance of the world, a lot of it really comes down to the dominance of the tech industry. Because compare it to Europe. It's something like of the seven largest US tech companies, they're 20 times bigger than Europe's seven largest and generate 10 times more revenue.

And if you look at the resources required for all of the stuff you're talking about with AI, and then we'll talk about quantum computing, whatever it is, I don't even understand it.

It's pretty clear that this power is not going to go in the opposite direction. What does it all mean? Well, I mean, look, American banks are also bigger than all European banks. I think JP Morgan is bigger than all banks combined in Europe. So America is doing pretty well. Yeah, it's crazy. When you look at the valuation of those tech companies, I think...

When Enron collapsed, I think it was the seventh most valuable company and it was valued at $70 billion. Now, even with inflation, right? Like the seventh most valued company today is what is probably Meta or something, valued at like trillions. These companies have just become so big. They are...

Generally well liked. I mean, even if we're hearing lots of complaints about meta and things like that,

People generally like the Googles and the Apple in their lives. They use these products every day. And, you know, a lot of their origin stories since the beginning of Silicon Valley was like, you know, like dude in a garage. It's like none of the people that made it big. So they're really aspirational at the same time. I think that's going to wear out. Of course it's going to wear out. And I think it's also like this, the populism right now,

the type of populism has been really attached to

to culture war, which culture war is great because David Sachs can participate in that culture war and feel like he's part, you know, that you're part of. He's one of the guys, you know, that's like living under the poverty line. You're like along for the ride with David Sachs. The second that starts shifting to a class war, then it becomes a little harder to talk about this stuff. So that's going to be interesting. And yeah, I don't know. I don't know. I think it's. Maybe I'll try to steer this in a little bit different direction. I want you to know, Brian and Alex, that

that segment originally had come from, I wanted to create a new segment for us and maybe a new platform for PVA. And I'm just going to call it YouTube BFF.

And it was because I really like YouTube and I wanted the world to like it with me. And I wanted to sort of cut it open every week and make an observation and kind of create part of our show around that or whatever. So I set that out as the goal. And then I was and as I was consuming YouTube, I realized that's where I came about this observation, which is the.

It was watching the new OpenAI 12 Days of Christmas thing that releases a new product. They're releasing a new, you know, enhancement to their platform for 12 days. And it was about, it's these sort of smart kids at the OpenAI office. It looks like a nice office, by the way. It's very tasteful, very San Francisco. And, you know, talking about, you know, this is, we can't wait to see what you're going to do with this technology. And they talk like Steve Jobs because that's where all that comes from.

And I found it annoying. And I imagined a couple of things. First of all, that to me, the first thing I imagined is that the most powerful people in the world are A, owners of capital and B, tech executives.

And they all dress in certain ways. Some of them have little quirks and stuff. So the first observation was about this power aesthetic. You know, some people are a little more like cashmere hoodie and some other where, you know, Lucker Palmy wears Hawaiian shirts and, you know, Elon has a big Texas belt now and an aviator jacket. So I love that this new kind of global power center doesn't wear suits anymore.

And I have this friend, a really good friend of mine who works at a big law firm. And he says, I'm just service class. I'm not an owner of capital and I might make good money as a fancy debt attorney, but I really just serve rich people. And so I just sort of had this contrast of the sort of cashmere hooding wearing West Coast tech executive and the suited service worker.

But really what I was thinking about was, oh my God, these high priests of technology now understand things that none of us, many of us will never understand that are changing our world.

And the, like, qubits are weird. I don't really understand how they work. I don't understand quantum computing. I don't understand it. But the stat from this new chip from Google called Willow, the stat was it could solve complex problems in under five minutes that would take...

supercomputers, today's supercomputers, 10 septillion years to complete. What is going on? Do you even know what septillion is? I can tell you it's a trillion trillions because I asked ChatGPT. That's essentially saying it can do things that we would have never been able to do before. But what do you want it to do, Alex? Do you want it to understand your molecular structure?

What do you want it to do? Do you want it to model the entire biological ecosystem at a cellular level or at a molecular level?

I mean, we don't... It's crazy. We don't yet know if it's useful. And I think even the people working on it have ambitions and believe that it can be useful. And I think we can... Well, it's probably more useful than a webpage. I'll tell you that. Yeah. Wait till ad tech gets its hands on the quantum. I mean, you know, like the... Wait till you can put quantum computing on top of a time article. Google will definitely use it to optimize ads. Number one is going to be optimized ads.

Yeah. So the quantum computing, I mean, the main thing is that it's just a new type of processor when a processor has kind of like these binary switches. The quantum computer uses quantum entanglement and superposition

And it can process information in ways that don't make a lot of sense unless you understand quantum mechanics. And I don't. That being said, you know... Is this Tech Corner? Have we just slid into Tech Corner? I mean, I think with everything, I can tell you that a lot of these tech leaders don't also truly understand how quantum computing works. But... We're going to make ourselves extinct. That's my take on it. I'm telling you, when the AI grows arms and legs...

And we don't really know how it works. I mean, and there's a few people that take all the money and know how it works. We have the real populist revolt then. Well, I mean, what I was going to say is that

At the end of the day, what we're building right now is a series of tools, and we don't really know what's going to come of them. And on a more optimistic note, I think you could see someone using AI tools that use quantum computing that can kind of invent all sorts of new things and cures diseases and things like that. And these could be done by

people who are not yet rich and wealthy. Like, I think we're talking about this. Hold on, wait, wait just a minute, Alex. Brian's annoyed with what you just said. I'm annoyed. I am. I mean, mostly because like it's the naivete that has gotten us into pickles as a society that comes from these techno-utopian like ideals, idealists.

Because you never see the downside of this. It's going to be used for weapons systems. I don't even know what it is. It's going to be used for weapons systems. It's going to be used to optimize advertising. It's going to be used to manipulate. It's going to be used for all kinds of the downsides that none of this, we have gone through generations of this where all of the potential downsides have been either ignored or papered over and ignored.

And then all the problems get created and then like, okay, tech comes with solutions to the problems that they created. I'm not denying that new tools come with new problems, but like, you know, if you believe that we're a species that uses tools and that technology has brought us to where we are and we're going to keep developing technology. I mean, why do we stop here? Like, why didn't we stop in the 90s, right? Why did we stop gene splicing and all that stuff? Remember that like sheep?

Like that stopped. Shit. That's too bad. I mean... Dolly? What happened to that? Like we were like breeding like things that are like we were messing with species and that got shut down. I think there's just better technologies. I think CRISPR and things like that. No, they're still doing it. They're still doing the sheep thing somewhere. Yeah. Somewhere there's an island with sheep people. I...

No, but I think... I don't know. I mean, I don't know what to tell you, right? It's like with any technology, this stuff...

That's our trajectory. We figure shit out. We figure more shit out. If you're looking at it as an industry, however, a lot of the tech CEOs that we see today have become these kind of billionaire powerhouses because of technologies that emerged in the 90s and early 2000s. Well, I'm interested in power. I like power. I like thinking about power. I like examining power. And I'm interested in how this –

changes power. Because one of the naivete that I find is that a lot of tech people don't think that there are other power centers in society. And there are power centers. Government's a power center. Finance is a power center. The quote unquote, the people are a power center. I mean, if the people start, like I said, if populism switches from culture war to class war, then they're going to feel a hell of a lot less powerful. I

I don't know. I do think right now, where I'm trying to frame this is that a lot of these people are actually competing against each other. They're not a monolith. Meta is competing

forcefully with open AI on a completely different business model where they're trying to push their open source models, which can compete, right? Microsoft is competing fiercely with Google and Apple. Apple is in trouble because Apple used to make, you know, Apple's entire DNA is around making beautiful things that are really beautiful to use. And once the thing doesn't need to be beautiful and it doesn't even need to be seen, like what does a company like Apple do? Like these, a lot of things are shifting.

This is not a static state. And they're shifting in part because there are, they will shift in part because there are all these tools. And like I said, even if we stop today, in two to three years, we will see brand new companies emerge from this and brand new power centers. And of course, this stuff is going to be used in a war. And of course, this stuff is going to be used for all sorts of nefarious purposes. But yeah, the internet created internet advertising and we're all still surviving.

You know, was that a net benefit for the world? I don't know. You came out of it. We got pop-unders. Some are even thriving, Alex. Some are even thriving. Sure. There was retargeting. Retargeting was a great era. Are you guys following the drones off New Jersey?

I saw that. On New Jersey, there's swarms of drones that nobody knows what they are, apparently. The government says that they're not from an adversary, but they're also not from the government. They're not from Amazon delivering toilet paper or something like that? No, drones are one of those technologies that I feel like got dismissed and is actually now living up to all of its hype.

I mean, I never dismissed drones. Remember when Jeff Bezos did that 60 Minutes interview where he was like, yeah, you're going to get your packages delivered by drones. And it was like, give me a break. I mean, the second you saw drones and you thought like, okay, they're going, if they can make these bigger and they can carry stuff. Like everybody's freaked out about like some humanoid robot taking over. It's drones, man. Like I just bought one.

Can it lift you? No, but it's like you can buy a drone right now that flies really well. I bought one for my son. It's like $24. I mean, it's quite incredible that we have these things that can be kind of semi-autonomous, flying around, battery life is becoming better. I own a drone. I mean, the little buzzing. Of course, they're annoying. They're annoying, but they can also like...

You can also strap a gun to them. I don't know. They didn't really annoying. Guys, I don't know we're doing our audience a service today.

What is the drone doing, Brian? Whose drones are they? It's unknown. There's just all these reports. Have you seen the videos? There's tons of videos going around. It's like a UFO drone. No, but surely they've alerted the authorities. Yes. What do we know? Nobody knows where the drones are. They're not saying... The government says no comment, basically. I think that's what it looks like. So the government either doesn't know... Some congressman came out and said they were from a mothership that Iran has...

deployed off the coast and is sending them a carrier. So we're not shooting, they're not going to shoot them down? No, they're these spherical orbs that like change, like it's...

I don't know, maybe it's the stuff I'm seeing. It definitely seems very UFO-ish. I don't want to be conspiracy-like, but there has been- Wow, this is where we turn into- Conspiracy corner. There has been a drip drip that you could say has been preparing the public for the reality that there is some other life forms or forms of intelligence that are among us. That would be a new power center. That's definitely one.

Yeah, yeah, yeah. Let's talk about the ad holding companies. Nice.

I don't know. That's such a smooth segue. Just an update here. The FBI is investigating, as is the FAA. They're six feet in diameter, Brian. Shouldn't they know this? Shouldn't they know this? We spent a trillion dollars on defense. Wait, they're six feet in diameter? Yeah, they're big. Oh, wow. Okay. And the FBI is requesting assistance from the public.

urging anyone with information, photos or videos to come to the aid of the investigation. Well, it took the McDonald's manager to capture Luigi, not the NYPD, which I think also has like a trillion dollar budget. They weren't able to do that on their own. Go figure.

Anyway, let's talk about the ad-holding companies for a little bit. Because I do think this is part of, look, I know, and I'll just be like, this is boring. They're dead. They're dinosaurs and whatnot. But as Rashad Tabakawala says, they are the cockroaches. They always find a way to survive ad agencies.

Two of the biggest ad holding companies are merging, basically Omnicom's buying IPG. This is going to create a bloated, I guess you could look at it as like a monolith. It's going to create, what, 100,000 employee company, which is just shocking to think of an ad holding company with all of these things. But I think it is...

I think on the front end they're saying it's all about bringing together data and it's like all about like driving outcomes and trying to compete with Google and Meta and whatnot. And then you get down to it's all cost savings. Like they say they're going to save like $750 million in costs. Advertising agencies do not have factories. So I think we all know where those cost savings are going to come. Trey, what's your take on this? I thought you were going to ask Alex.

Well, they used to buy agencies in the old days because they needed to string together networks of capabilities to serve global clients. So BBDO would be acquired and then, you know, they would acquire a firm in London and in Germany and put, you know, networks together to tap global advertising needs and budgets. They also used to buy, you know, the exquisite sort of, you know,

agency people and capability. And there was a time when, you know, agency people were revered. They were revered as, you know, just amazing creative business people.

And as were the, by the way, the holding company and the notion of a holding company is you hold a whole bunch of independent agencies so you can sell across conflicts so that you can service a client with, you know, direct marketing, media buying, creative services, PR, all that stuff. And they became these, you know, colossal, colossally large, you know, companies. And it was really a financial instrument essentially to,

enable someone to build a services firm and get them on a four-year earn out so they could cash out at some point. And essentially the hold codes were the banks for the industry.

And John, I think, will go down as being John Wren, that is, who's the CEO of Omnicom. He's a bit of a king here because he built Omnicom for 40 years and now they were more driven by organic growth than the others, less acquisitive, and now goes out with the biggest, baddest holdco in the world. But the

The more interesting thing I suppose for me is they're not really holding companies of agencies anymore. They're sort of platform capabilities to square off with the big tech platforms.

And what Omnicom needed was, you know, the data management capabilities in Axiom, which is owned by IPG. They have a kind of media management platform of their own called Omni. They just bought Flywheel, which is a retail media advertising company. And together they can kind of, you know, be a, you know, kind of data driven platform that can exercise, you

You know, campaign execution with the complexity that the modern world needs. And interestingly, at the same time, they're just kind of mashing these old, you know, wonderful, you know, eponymous agencies that no longer have a role in the world like the TBWHC at days together in something called like Omnicom Advertising Group.

Right. So the people that used to be the kind of madmen, madwomen live inside of this kind of, you know, hold hold co-named service entity that looks more like Accenture. And that's kind of the way way of the industry. So, you know, it certainly is is not the kind of romantic, you know,

left brain, right brain world that it was when I was growing up. I remember when I first walked into an ad agency as a young person and saw the creatives putting in the hallways, I thought, this is a great place to work. You can be a creative person and write a print ad once a week and play golf in the hallways.

And, you know, that world's over. Alex, in a different era, you could have spent your career. He had an agency, actually. I know, but you could have spent your entire career if you did not in, like, ad agencies. You could have worked for, been one of 100,000 employees at an Omnicom agency. I mean, talk about service work. This has been, like...

Something that I've seen, I had friends who run agencies. There was always this talk of when you had a creative agency that was getting traction.

And you reached like 50 people or something. You knew that you had to either stay small or shut it down or scale to a couple of hundred people so you could sell it to one of these holding companies and then kind of quietly exit a few years later. Squeeze it for three years. Yeah, yeah, yeah.

Secretly, I think a lot of folks didn't want to work in agencies. A lot of creatives want to do their own stuff. And also at Airbnb, we've had a few incredible agencies come through the door. And I kind of witnessed, at some of these agencies, I was literally excited to work with because I respected them so much and it was such an honor. Wait, wait, wait. Who did you... Did you respect the people or did you respect the agency?

I mean, I respected the agencies and the past work that I had done and the people that were involved in it. I mean, you know, they're all kind of linked together. There was a cachet around some of these creative agencies. But I saw like how much... There was definitely, Alex, huge actually. Yeah. But I noticed how...

They started butting up against just like the quality of people that we could hire internally. The fact that they were losing talent. And so the talent that was often left there wasn't the best in the industry. And so while I think in the past it would have been like a company would have gone to one of these agencies for strategy or creative work.

that they couldn't get themselves, it is not pretty clear that, you know, that's no longer the case. And it was no longer the case. But aren't they, I mean, creative work doesn't make money. I mean, they just like give it away, right? I mean, the way that these companies make money is they've given up being agents and they've become principals. And it's all through media buying. The clients don't pay them enough. There's no margin. They have zero margin like deals. It's like, how do you make money? So they're like, okay, we're going to kind of turn a blind eye to the fact that you're

obviously violating being an agent by being a principal. I think they could, if they provided the entire strategic and creative... The strategic and creative relationship was the relationship you had with the CEO and the CMO. The media buying was essentially just

the infrastructure of the way that was working. But as it becomes clear and clear that it's just media buying, I don't think that you can command the same amount of margins from that at some point. When you look at the market and how the market values these companies, and it's really striking. Terry Kawaja, who is a comedian but also an investment banker, had an interesting article in AdExchanger recently.

That is actually a very modern Venn diagram, right? You got to be something and something else. Yeah, exactly. And Terry makes these parody videos and everything. Anyway, if you look at what they're trading at, most of the holding companies are... WVP is down to 1.1x net revenue. The average is like 1.2. Publicis is the one sort of standout. And I think this merger...

is sort of a recognition because a few years ago, Omnicom had a merger deal that fell apart. The publicist has actually executed much better than the other agencies in becoming more centralized, having a platform that will allow them to sell outcomes versus this FT cost plus model. So I think it's a little bit of a recognition.

Biomnicom and IPG that, you know, they've kind of become also rams a little bit to publicists in this area. Yeah, it's going to be grim. I mean, I think it's going to be grim. That's all right. I still don't fully understand. Like if I, if I, I'm wondering that if I made a business that became successful and scaled, would I ever pick up the phone and call any of these people?

I don't think so. Okay, there you have it. Look, we did that session at Rashad's event. Look, if you look at where things are going with AI, et cetera, the different tools, you do not need the like,

100,000 people in these companies. And that's why they're going to get rid of so many people because you're going to be at the independent agencies to me are the winners out of this because you can just the same way as like big publishers are mostly doomed. There's going to be a ton of like small publishers that do fine. And I think very creative people can spin off and have, you know, smaller businesses, but very healthy, profitable businesses that are

aren't going to look like these massive agency networks that were mostly needed for distribution across all kinds of different geographies. I agree. I mean, that's promising to me. We covered it. Yeah. We did it, Brian. What else we got? What else are you going to hit on out of the five?

I want to hit on a little bit. We got to do a little bit about- Luigi? Luigi and the assassination. Look, disclaimer, none of us in this endorse the murdering of anyone, no matter what their role is. Obviously, it's a personal abomination. I don't think that has to be said. To me, the most striking part of this has been what appears to be a groundswell that has originated in what I like to call the information space of

that has used this horrible act, et cetera, to really vent a lot of frustrations and anger at a particular power center, which is the healthcare industrial complex, in this case, the insurance industry.

And this was not stoked by mainstream media. I don't care what tech bros or Republicans say. They can't pin it on that. This is what happens when you have... It was a groundswell, if anything. Yeah, and if you look at it, the New York Times, you had said this, New York Times is telling its editors they don't want to put the mugshot on the homepage and stuff. Guess what? That doesn't matter. Like in the old days, you could basically...

Kind of tamp down these kind of stories because it is a very dangerous thing when you start to talk about Assassinations on the street of New York or other cities just don't want to get into that situation. I think as a society But once you let the genie out of the bottle, it's a really hard to control, you know, I don't know What was your takeaway not from the murder but from the reaction in the information space Troy I'm gonna start

I would actually pass it to Alex here because he's been the most vocal about this. And I think he has something to say. I mean, yeah, I felt like they were. And I told you this because we butted head a little bit. I was like, that is interesting. That feels like it feels different. Yeah, because you were just like.

Yeah, yeah, yeah. I think you were... Summarize what I was. Well, I think you weren't wrong, which is like, you know, like, we shouldn't be glorifying murder. It's just somebody that has a mental illness went and took somebody out. This is not a movement.

And I felt that it felt different because especially like the messaging on social media wasn't, you'll always get like people that come out and say crazy shit when something like that happens, right? You'll always get the trolls. It's either trolls or people are like incredibly, you know, extreme. But this time it felt like it was just like a sense of like, it was okay to talk about this. Yeah.

And there was a sense of like, yeah, well, you know, that's, that's, you know, retribution. And, and there was also a sense of like the Luigi guy was, was like kind of like charismatic. And as more of his mug shots came out, like people started getting a little, like he became a meme. He's extremely meme-able.

He's like Trump. You got to be memeable. And it got to a place where people weren't even proclaiming, look, this was wrong. But they were just saying they're celebrating the guy. And I think that is a – and it seems to be coming from both sides. And I think some people are caught unaware, surprised that people would be –

So against, you know, the healthcare CEO, but like everyone in this country, I think has had a bad experience with healthcare. Like, and I think the poorer you are, the worse it is. And I think it struck a chord and it's ugly in so many ways because somebody died and you don't want to see that violence, but I feel it does feel different. And it does feel like that does feel like a class movement.

What it feels like to me is my reaction to some of the things you were saying was a little bit defensive and negative because you can't have a rule of law breakdown.

But this to me is- By the way, just to be clear, because I never said there should be, right? None of the things I was saying- No, you were like burn it all down. I did a disclaimer. I did a disclaimer. All right. No. This is safe space. So this is classic internet cosplay fueled by something we all hate. We get that, right? We've all had bad experiences with sort of bureaucratic entities, particularly private healthcare insurance companies.

I realize how different it is because like my son is a sensible, smart guy. And he's like, you know, he's kind of an interesting guy, Luigi. He's the kind of guy that I like online. He's a good tweeter. You know, he's not as kind of strident lefties, a gamer. He has some interesting things to say. So and, you know, that combined with all of the folklore around him and this whole kind of journey that we've been on, you know, the game.

Listen, the Internet and modern media is a place that invites you to come in and participate. And that's what this gives us an opportunity to do. It's crime plus participation. And the question is, I think, is does it snowball from here?

Does it pervert in ways that convinces the next lunatic to go kill a CEO? Does the cosplay kind of like seep into a longer term...

like criminal activity where people put posters up of wanted CEOs in your neighborhood, Brian, and then some wingnut actually thinks that life is so shitty or they're so fucked up that it's worth sacrificing their life to become infamous. I don't know. I really, really hope it dies out. I really do. And that if I was hopeful about its positive impact,

I think that it raises awareness about the perils of the system that we live in. By the way, I lived in a different system where the government controlled both the insurance and employment of all the people in the healthcare industry in Canada and healthcare.

I could walk into any hospital or doctor's office and never think about payment. And it was wonderful. You were just entitled to that care. That seems civilized to me. When I came to America and had to navigate the paperwork nightmare of health care in America, I thought this is a disaster. The difference is my mother cannot get care in Canada.

Yeah, you have to ration care. And we ration it a different way. It just so happens that we do it in the most capitalistic, like brutal capitalistic way in which these insurers make a ton of money.

My mother can't get care. I just want you to understand that. No, I understand that. But I think, I think, and I'm sorry to hear that. And I think like healthcare is pretty terrible anywhere. But in most countries with subsidized healthcare, you can also supplement it with commercial healthcare. It's actually hard to supplement it unless you're really wealthy. Like my wife's parents fly to the Mayo Clinic to get checked.

Yeah. But I mean, I think in no, I can tell you, I've been around. I don't think the American system is better. I think it's very much worse. I think for like- Yeah, the average person knows this. They don't need to know the details. They know it's messed up. Like, I feel like a lot of times politicians and like elite people, I'm going to sound like a populist myself now, really think people are dumber than they are.

Like, they really just think they can pull the wool over their eyes. Like, of course they know it's screwed up. Of course they know it's a scam. The one thing is like irrespective of what it is and it's insurance- Because their interest, it's very obvious. Every insurance company, I always go back, I can't, it's so hard to get insurance in Florida, like home insurance. It's just so hard. And, you know, there's a reason that Warren Buffett, like his biggest holdings are in insurance. They find every reason not to pay you out. Nobody likes the insurance companies.

Right. And I think what, and I think it was, there was, there was just this non-action around it and it took, you know, this type of thing to make it, I mean, today on NPR, there was like, on the news, they talked about, you know, they didn't, they didn't relate it to the, to the murder, but they were talking about like, you know, how people view health insurance in the country. Like it's definitely become part of the dialogue and it's, and, and, you know, that's, you know, that's populism too, you know, like,

In France, we're pretty used to the fact that whenever the government tries to change anything, people burn down Paris. And we haven't really experienced that here, but this is the type of shit that can happen. And it was interesting to actually see that it was entirely born on social media.

I think the media itself didn't at all. Well, I think what's going to be really interesting is whether this is like an extremely online, in quotes, thing, or whether this now is extremely online a reflection of the real world. Because there's always been this thing of, and I always feel this, I'm like, this isn't really a reflection of the real world. Things that are going on on X or different social media platforms.

If you walk down an airplane aisle while you're taxiing or something like that, everybody's on social media all the time. I mean, there's nobody that's extremely online. It's just like, that's crazy. There's just some deep recesses of weird shit and people always feel like, oh, the kids are into this thing. But like...

There's just like multiple pockets now. So it's impossible to see. And then some things like break through into the mainstream. Like I think this did, but everybody's extremely online. This is not an extremely online event. This is like a real world. It's, it's, it's broken. It's broken through. And I don't think extremely online even means anything. I think you're right. I think we should go on to good products after that. After this. Okay.

Well, I kind of had a call with a listener this week who said that good product had become slapdash. He said that I hadn't thought through my recommendations very well and that it's not very cool to get to the end of a podcast and do all the work and then have a shitty good product, which made me reflect on what we're doing here. Wait, when we say it, it doesn't count, though.

What, the slapdash nature? It wasn't you. You better not come with cherries then or something. No, but I don't really know what you guys want. I think that there have been times that good products showed real insight. It's not a leaf blower, and it's not a floss lamp, and it's not a stone polisher or an air fryer. It's just a leaf blower.

If that's what you're looking for. Like you want me to go toe-to-toe with someone like on features? You want to talk features? I want something that's shoppable for the newsletter. Well, I think the good product is the newsletter. Okay, great. No, which is to say that I actually, I'm a little empty-handed this week. That was quite a build-up. Oh my God.

So wait, this person said it was a little slapdash. And so you came with nothing? Well, no, but I got all caught up in making sure we got this newsletter out and trying to get something out of Alex. And I didn't spend enough time really analyzing my journey this week, wondering what I truly loved.

Did you love anything this week, you guys? What did you love this week? I'm deferring now, of course, but... Oh, wait. So you're responding to somebody complaining about you being unprepared with the good product by asking us if we figured something out? I guess so. That's one way to look at it. Man, that's rebellious. That's a big fuck you to whoever complained. It's just like, you know what, Will...

We'll do it worse this time. No, I mean, I was listening to that Verge podcast where they were kind of, you know, trashing chat GPT. I think that they're actually becoming better at making products and that the little piece of Mac software that you can install and then you can kind of option space. Very good product, actually. It's a very good product. It changes the way you use your computer. So wait, what is this? I have to get this. I don't have this.

So it's a Mac app. And I don't know if there's a Windows app, but it likely is. I don't have that. That's what you tell me to say about me. No, but for our listeners. And once you have it installed, you can press Option and Space, and then it just pops up a little message. And then you can type your thing in there, and it just gives you the answer right there. Like right now, I could ask it anything. I don't need to leave my window, my work.

And it really kind of shows you how the interface is changing and how more and more the computer is kind of getting in the way and the operating system is getting in the way and the hardware around it is getting in the way. And you just want a thing that gives you answers for so much of your life. Let me ask you this. Does ChatGPT have like a strong brand, do you think?

With kids, yeah. Kids call it Chat now. Like, yeah. It's a terrible name. Yeah, it's strange. It's Kleenex. They didn't want to launch it because they thought it would look bad because it got things wrong. And this was not – they stumbled into becoming a consumer product company. No ad agency would have, like, recommended calling it ChatGP to you. I can tell you that much.

So does that make it impossible for something like Claude to compete? I'm kind of rooting for Claude. A lot of people say that the...

weakness with Claude is actually their Mac app and I can totally understand that. People like the LLM and the response is better but the interface to it isn't as good. Claude is actually I think a better writing helper than Chachi PTS. Either way, I don't think we can call any winners or losers here because

Chat GPT is burning through money. These tools are just like incredibly expensive to run. If you actually look at capabilities of the core LLM, they're all very similar. You know, the open source Lama one is similar. So brand width. Agrox still sucks, actually. Brand and distribution. Yeah, but it's based and cool and funny and it doesn't care about your feelings. Troy. I'm not going to my chat GPT for funny.

That's why I call you. So there's actually a lot of parity on a lot of things. But ChatGPT also released Sora, that video rendering thing, which is really impressive. But then they stopped the downloads. I don't trust that guy. Does that matter with the brand? Like Sam Altman. Everything comes out just seems disingenuous to me. I'm not a big fan of Sam Altman, but I don't think people care. He's in my pantheon of least trustworthy people.

I think ChatGPT is moving quickly and building good products. I think that there's still a lot of things at play because at the end of the day, I think the people, the ones that can build it straight into the operating system or straight on the browser, that's going to be what's going to happen. Yeah, people get gaga about shit like video generation and I understand on some level why it can be important. I think it's mostly a waste of time right now unless you want to make a screensaver or a shitty Kanye music video.

Yeah, because I think people will soon notice that what we really value is some sort of human connection. And that's why when we see Tom Cruise nearly killing himself, attaching himself to an airplane, it's more compelling than if he was a computer graphic that looked exactly the same. But what I think about, I always bring it back to like the information, how we get information. But I think about how...

Earlier this week, I think it was yesterday, actually, I was on LinkedIn like I usually am, which we're still not connected on there, Alex, which is really strange to me.

But I got an ad from Ozzy about a documentary that Carlos Watson, who was convicted of crimes relating to Ozzy, this digital media startup that BuzzFeed actually was looking to acquire at some point. And he made his own documentary with his spin on what happened.

to him at Ozzy and he was like going after Ben Smith and Jonah Peretti and the judge and everything. And when I ended up thinking, I was like, this is just going to be the norm. Like everyone is just going to make documentaries of their, their view on everything.

Isn't that inevitable? No longer is it going to be the media's view because anyone can make their... And it looks professional. Yeah, anyone can print a pamphlet on a piece of paper. And that used to be only a few people could do that, right? But now if you go around sticking a photocopied piece of paper onto the side of a lamppost...

Nobody gives a shit. It's just hard for us to fathom that happening to video or that happening to things that are like high production value video. Like I think there's, we still believe that there's this like magical moat that exists around stuff. But once that stuff gets removed, it just means that this type of content on its own, just the production value of it,

is not what's valuable, right? Like you could get people into the theaters by just planting a camera and watching a train go by, you know, a hundred years ago. Today, you need all sorts of different things to get people into the theater. And I think that like, you're just chipping away at the things that are moats, but it's going to be hugely disruptive when you can just tell an LLM to turn the guy into a zombie. There's thousands of people in Hollywood that are hired to

to do makeup that are you know going to lose their jobs like it is going to be massive destruction of jobs around Hollywood around this stuff for sure like crafts people are the first ones that are going to get hurt just to start to wrap this up a little bit guys did you like this good product was it well structured

I think that in defiance of our critical listener, we actually turned good product into a nice segment this week. So thanks for going along with that. I am grateful to a PVA listener, Nick Shelton, who runs and owns Australian ad or media business called Broadsheet, which is local, local information focused on the five cities in Australia. Okay.

who has reached out and wanted to get together. And Brian and I did a mini meetup with him. I just want one observation from that. This gentleman aspires to take his brand around the world and become a better executed media operation delivering on local media in London and hopefully in the US.

And he thought he was coming to the Oracle. And what he actually encountered was a couple of dopes, me and Brian. And he bought Brian a bacon and tomato sandwich, which is nice. Yeah, there's lettuce too. It's called the BLT, the good product of it.

And he kept coming back to some, you know, like I was like, what are you going to do? And he's like, well, we're going to do what we did in Australia, but we're going to do it in New York and London. And, and I felt like I didn't have a good answer for him as to why that was going to be hard. I thought you were really, that was a nice meetup. And it was good because I got to see like, I think you're really good at like finding like the root of like the one thing.

the important thing. Sometimes it can seem simple, but I think that's a mark of... It's a good thing to have. You ask the one penetrating question, it's like, what makes you different? Basically, why? Why are you going to win? Sometimes people get caught up, I feel like, in a lot of... Media is a fairly simple business to me. And

People get caught up in a lot of the little details. So, yeah. The guy makes local web pages with a lean cost structure. And I don't know if that's enough next. And I'm pretty sure it's not enough in New York. It might work in Melbourne. Wait, what about if you slap a chatbot on it, though?

If there's anything people learn from this episode, is that just slap a chatbot on it. All right. The amount of times I'm gaining from using AI in my work life is completely lost from clicking, closing pop-up windows that ask me to use new AI tools with every single update I make. It's becoming ridiculous. Every time I update a piece of software, it's just like...

Do you want to do this? I don't. I don't want to do this. Guys, I got to go. I'm late for a sales call. I just got a text about it. And guess what? The person is insulted that my AI agent went and I'm not there. He just texted. He's like, you say? Jesus. I'm going to lose a deal because of it. That's funny. So anyone who wants sponsorship, I have extra slots available. Brian, a listener came up to me at an event this week and

very happy about the music recommendations that happen infrequently on the podcast. Someone mentioned this to me, actually. The man just said he was late for a meeting and now you want to talk about music? Well, no, I only want to say there's a melody I haven't been able to get out of my head for four days. Like, I cannot get it out of my head. And that is the mark of a great melody. And it's in a song called Candy. Candy.

by McGee and it's so good. I think we should end the podcast with a clip. Okay. As long as it doesn't get flagged. See you. See you tonight. Bye.