Sunday Special Newsletter

Hey guys, I'm taking a break from article writing this week, but I do have a new podcast for you all to check out. I sat down with my friend Elliott and we discussed Fortnite's business model. He dropped a lot of great insights and it's definitely worth a listen. Anyway, I know I've been talking about Epic Games a lot. I promise I'll have something for you next week that isn't Fortnite-related. Happy Sunday y'all. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

A beginner-friendly conversation about what's going on in the cryptocurrency space. Sorry for the minor audio issues throughout (Comcast sucks). If you liked this conversation, check out our full article about the cryptocurrency crash. Also, subscribe to our weekly newsletter on business and tech. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

Nothing in this post should be considered financial advice and I am not telling you to buy any specific cryptocurrency. If you hate the idea of cryptocurrency, the last few weeks have probably been great for you. The price of Bitcoin, Ethereum, and joke currencies like Dogecoin have all tanked. You might feel like you have the right to laugh at your friends who fell for the hype and tell them that the whole concept of crypto is stupid and it's all just a Ponzi scheme by Internet nerds. Of course, it's important to take a long-term view of the cryptocurrency space. Just last year, the price of Bitcoin was around $9000. Even with the recent price crash, it's still worth around $35000. If you invested last May, you should be seeing 4x returns.Back then, the price of Ethereum was just around $200. Now it's worth around $2350. If you invested last May, you should be seeing 12x returns. So if you hate the idea of cryptocurrency, please recognize the fact that you've been repeatedly wrong before and that this “price crash” really doesn't prove your point. Because I'm a petty person, I'm writing this article to discuss why even if this crash in prices lasts several months, you people are going to be wrong again. The price of Bitcoin is a leading indicator The first time that I bought Bitcoin was back in May 2020. However, I'm embarrassed to admit that I didn't really start getting into crypto until the end of last year when Bitcoin's price started rising again. That made me do more research on Bitcoin and other cryptocurrencies like Ethereum and Chainlink. I'm definitely not the only person who became obsessed with crypto in the past few months. It's undeniable that the recent crypto boom has brought tons of new people into the ecosystem. As you can see the Bitcoin, Ethereum, and Cryptocurrency communities have all seen huge gains in subreddit members in the last few months, as the crypto market has become more and valuable. Notice the last time that these subreddits saw an exponential increase in new users? It's right around the end of 2017, which was the last time that Bitcoin saw a huge increase in price. There's a reason why this is important. Chris Dixon, who leads the venture capital firm Andreesen Horowitz's cryptocurrency fund, has said that the price of Bitcoin is a leading indicator in the cryptocurrency world. A rise in the price of Bitcoin means that smart people get sucked into the crypto rabbit hole and start building cool projects. Of course, it usually takes a few years for these projects to be up and running and attracting new users. Even though Bitcoin crashed in 2018, Andreesen Horowitz had faith that the crypto projects getting built would eventually revive the entire space. In 2019, the firm doubled down on their bet by buying more shares in a company in their portfolio, Coinbase. Meanwhile, other venture capitalists were desperate to get out of the investment because many of them believed the narrative that crypto was a fad and that its time had passed. As a result, Andreesen Horowitz was able to buy shares in the company for just $23 apiece. Now, Coinbase is a publicly traded company, and its shares are worth $236 each. In just two years, Andreesen Horowitz managed to make a more than 10x return on their investment. It all happened because while the media was saying that crypto was dead, the firm stuck to its thesis and recognized that it would take multiple years for cool projects to emerge from the 2018 price crash. They turned out to be right. Last year, we saw multiple projects in decentralized finance and NFTs finally came to fruition. We will see this same dynamic play out again. This time, even more people fell into the crypto rabbit hole and many of them have already started to build new projects. Why saying there's a crypto bubble isn't necessarily a bad thing...Cryptocurrency might be a new technology with no precedent in human history. Still, it's important to remember that we human beings are just as stupid as ever. Every time there's a new technology — we get overexcited and end up screwing ourselves over. It happened with canals in the 1700s and railroads in the 1800s, and it's happening with cryptocurrency today. If we look at bubbles in new technologies throughout history, we can see a pattern. Each time, there's a huge bubble followed by a huge crash followed by slow and steady growth. The bubble phase happens because people get excited by new technologies and start speculating. Eventually, the bubble pops and investors end up losing a ton of money. We've definitely seen this play out in the cryptocurrency space. It's been estimated that $12 billion worth of leveraged positions in Bitcoin got wiped out last week. People were essentially borrowing money to buy Bitcoin, and they were forced to sell just to limit their losses. Of course, this bubble phase can serve an important purpose — infrastructure gets built that ends up enabling sustainable growth later on. For example, during the dot-com bubble, telecom companies raised $1.6 trillion dollars to lay more than 80 million miles of fiber optic cable in the United States. Even though many of those telecom companies ended up going bankrupt when the bubble popped, their work became very important later on. This investment gave millions of Americans access to fast, reliable Internet. That set the scene for companies like Facebook and Google to thrive a few years later.Better infrastructure is coming… Just like the dot-com bubble set the scene for the tech companies of today, better infrastructure is coming for cryptocurrency as well. Let's take at two interesting subsections of the cryptocurrency space: decentralized finance and NFTs. Better infrastructure for decentralized finance I've written about decentralized finance in the past — these protocols give users the ability to take loans, earn interest, and make trades without having any traditional financial institution in the middle taking excessive fees from users. The biggest problem with these DeFi protocols is that they're hard for any normal person to use. Right now, they're only being used by hardcore crypto nerds. This might be changing in the near future. A couple of weeks ago, Coinbase announced a Chrome browser extension that will make it easier for Coinbase Wallet owners to connect to decentralized finance protocols. This is a big step towards making projects like Uniswap and Compound more accessible to normal people, especially when you consider that Coinbase has 56 million users. Better infrastructure for NFTs… Right now, NFTs have a big problem. There's not really a place that you can show them off to your friends once you buy them. That means that for many people, it's hard to justify an NFT purchase. It's kind of ridiculous to pay $69 million for a piece of digital art if you don't even have the opportunity to flex on your social media followers. Of course, the NFT boom has led to the creation of new startups that can help to solve this problem. Companies like Gallery and Mark Cuban's Lazy.com are building social media platforms that also serve as NFT galleries. If just one or two of these companies are successful, they'll provide sustainable infrastructure that will benefit the NFT ecosystem. If people have a way to show NFTs to their friends and family, they'll be more likely to buy them. That means artists can more reliably use NFTs to supplement their existing income. Why I'm still bullish on cryptocurrency The crypto haters might be rejoicing right now and calling the whole space a fraud for dorks who worship Elon Musk. Still, it's amazing to see how far crypto has come from the very beginning. Back in 2008, some unknown person who went by the name Satoshi Nakamoto emailed a small cryptography email list about a new digital currency he created called Bitcoin. It seemed pretty unlikely that the project would amount to anything useful or valuable. Now, Bitcoin is worth $659 billion in total, while blockchains like Ethereum attract thousands of developers who are interested in building decentralized projects. Crypto has been on a wild ride in the past thirteen years — but it's nothing compared to what's coming next. Anyway, if you liked this article, please sign up for our weekly newsletter. We send one article on business and tech every week, written for normal people and not Boomers who subscribe to Bloomberg. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

This is my conversation between me and my friend, Ben. He works in a front office for a professional sports team and he's an incredibly smart dude. He breaks down the data revolution in sports and why Tobias Harris gets paid almost as much as Lebron James. If you like what you hear, subscribe to our weekly newsletter on tech and business. We write so that it's actually something you'll want to read, not some boring Boomer shit like Bloomberg. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

The day the NBA's season was suspended because of COVID-19, my company's CEO sent an email saying that all employees were to work from home indefinitely. It was a really sudden transition — one moment America felt completely normal. Next thing you know, we were in the biggest global crisis since World War II. Back then, people were still deluding themselves into thinking this pandemic thing was going to blow over in a month or two. My boss called me the next day to let me know that belief was bullshit, and that COVID wasn't going away anytime soon. She also told me that by the time all of this was over, we would be living in a different world. At the time, I had no idea what she was talking about. Now it's been more than a year, and the end of the pandemic is in sight. More than 30% of Americans are fully vaccinated against COVID-19. Soon enough, we'll be having concerts and festivals again. It's easy to picture the world going back to normal, just the way we remembered it before the lockdowns started. Still, the more I think about it, the more I realize that my boss was right. As Peter Thiel said, 2021 might go down in history as the first year of the 21st century. We're not going back to 2019 Studies show that when human beings try to imagine the future, we're often biased to imagine it being very similar to the past. So it makes sense that when we imagine what the world will look like after the pandemic's over, we often imagine it as the way things were in 2019, except with a little bit more work-from-home. Of course, work-from-home policies can have a bigger impact on our world than we might realize. But before we go into that, we should talk about why it took so long for remote work to be commonplace. Why were we still in the past for the last 20 years? Back in the 90s, the Internet was mostly used by normal people only for email. Still, there were true believers that thought that the Internet could one day change the way people worked. At the time, they were mostly mocked. Here's an article from Newsweek back in 1995. As you can see, the writer mentioned how believers in the Internet talked about how “commerce and business will shift… to networks and modems”. However, broadband speeds at the time were so incredibly slow that the idea seemed ridiculous to the writer. Broadband speeds got faster and faster every year and the smartphone made the Internet a constant presence in people's lives. Of course, it didn't happen right away. The original iPhone was released in 2007 but it dropped calls all the time, usually didn't have reliable access to the Internet, and the original camera was so bad that it required Instagram filters to be invented just for pictures to be passable. Eventually, the technology got better. Over time, smartphones got better chips, better cameras, and better access to the Internet. As a result, the average person started spending significantly more time on the Internet. The Internet wasn't just for nerds anymore — it was something that literally everyone used constantly. That means if employees needed to get on the Internet for work, there was no learning curve they had to go through. At the same time, companies like Zoom and Slack built the tools that were needed to make work from home a viable option. Of course, even when Internet infrastructure was fully developed, the vast majority of companies still required their employees to go into the office. After all, that's the way human beings worked since basically the dawn of time. A CEO would have to be incredibly open-minded to let a large portion of the workforce not be in the office. Then, COVID-19 came around and changed everything. Almost every business in the country was forced to accept work-from-home, and many of them found that everything worked out just fine. Now, businesses have to ask themselves whether paying rent for an office is actually worth it. After all, a study by McKinsey found that 20% of American workers could work just as efficiently if they were working remotely 3-5 days in a workweek. The restructuring of American society Improvements in technology and the COVID-19 lockdowns have made the dreams of Internet nerds in the 90s finally come true. We're at a place where the Internet can enable people to work the way they want to. The promise of the 21st century has finally arrived. That means we might start seeing digital driving new settlement patterns all across the country. In the mid-20th century, air conditioning led to one of the biggest mass migrations in American history. As Steven Johnson wrote in the book How We Got to Now, AC got Americans to start moving to cities like Phoenix, which saw a 300% increase in population in just 10 years. The rise of work-from-home policies is already having similar effects. Since the beginning of the pandemic, we've seen huge increases in home prices in places like Lake Tahoe, where many rich tech workers from Silicon Valley have decided to settle. In the past year, home prices in the area have gone up by 54%. Lake Tahoe has always been a really nice place to live. It's a great ski destination and has tons of hikes to explore during the summer. Still, the city's population growth never took off because the area never really had any sort of industry other than tourism. While wealthy tech CEOs may have had 2nd homes in Tahoe, they needed to show up back in their office once their vacation was over. Now, the fact that there aren't tech companies headquartered in Lake Tahoe doesn't matter as much. If a tech worker has the option to work remotely, they can stay in the city as long as they want and spend their weekends skiing. Not every company is going to embrace work from home… Let's be real: working in the office isn't going to disappear completely. While companies like Slack and Twitter have given employees the option to work from home permanently, Facebook and Google are requiring that employees go back to work. Still, even having a portion of companies supporting remote work can have big consequences. As Peter Thiel pointed out in that video I linked to earlier, if just one partner in a married couple has the option to work from home, the whole family has more flexibility. Some couples were discouraged from moving because it's really hard for two people to find new jobs in a new city. The whole process becomes a lot simpler when only one partner is working from home and only one person needs to find a new job. We still have work to do… While Internet infrastructure is significantly better than it was back in 1999, there's still more work that needs to be done. It's been estimated that 65% of Americans don't have access to reliable Internet that can support video conferencing. Of course, help is on the way. Companies like SpaceX have already started to sell dishes that give access to high-speed satellite Internet even in rural areas. Where might the future take us? If the work-from-home really does change the way we live, it's going to have consequences beyond people choosing to live in new cities. Here are three trends that we might start seeing after we've reached herd immunity through vaccination. A new type of office  I always liked working in an office more than I did working from home. After all, I like being around other people and having the opportunity to socialize during breaks. But maybe I need to rethink my idea of what work can be. Maybe instead of just working with people from my office, I can be in a city hundreds of miles away from my company's headquarters, working in an office with people from hundreds of other companies. This sort of arrangement might be commonplace in the near future. WeWork offers monthly subscriptions that give workers access to hundreds of office locations around the world. It's a great way for remote workers to get the benefits of the office while also having the option to travel without having to take days off and meet interesting people from multiple different industries. Increased wealth inequality In the past 10 years, we've heard a lot about income inequality. It was one of the biggest themes behind Occupy Wall Street and Bernie Sanders's presidential run. In the past year, the discussion around inequality has only intensified. During the COVID-19 pandemic, we saw what some economists called a “K-shaped recovery”. People who had white-collar jobs in industries like tech, finance, and real estate generally did well, while blue-collar workers in industries like restaurants and hospitality saw unreal levels of unemployment. Even after the pandemic is over, it's likely that work-from-home policies will only increase inequality. Most blue-collar jobs cannot be done remotely. Plus, when wealthy tech workers move to cities like Lake Tahoe, workers in the tourism industry may end up getting priced out of the neighborhood. Big Tech's domination The conversation around the power of big tech companies like Facebook, Amazon, Apple, and Google has already started. Last year, the CEOs of all 4 of those companies got dragged in front of Congress and grilled on whether their companies were monopolies.  This issue isn't going away anytime soon. As our lives become reliant on digital, the power of Big Tech is only going to grow greater and greater. That means we need to ask ourselves if we want to have these companies to have so much power and influence over our lives. In the next few years, there's going to be more discussion of possible antitrust action against these companies. We'll also probably see more exploration of alternative platforms based on decentralized blockchain networks that won't be controlled by a few dudes in Silicon Valley. In conclusion I really can't wait for the day when Dr. Fauci gets on TV and tells everyone that there's no need for anyone to wear masks anymore and we can all start going back to concerts. I'm sure it's going to be a great time. Still, I don't know how I'll be doing my job when it's time for me to go back to work. Anyway, if you liked this article on the future of work, you should subscribe to our weekly newsletter. We send one article on business & tech every Sunday. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

A couple of months ago, I wrote an article about non-fungible tokens, or NFTs for short. It got a lot of traction right off the bat. It's one of the most-viewed articles in the history of this newsletter. Since then, NFTs have really moved into the mainstream, especially after the artist Beeple sold one of his artworks as an NFT for $69 million. Still, outside of the crypto community, most people seem to really hate the concept of NFTs. Here's a Tweet that I saw the other day. It's not just Twitter. I've had friends and family reach out to me and tell me that they don't really understand the point of NFTs either. They also don't really understand why I'm so excited about them. So today, I'm going to do my best to explain why NFTs are revolutionary and why my friends and family should stop being concerned about me. A super-simplified explanation of NFTs Most NFTs are blockchain versions of art you can easily find online (that's the joke in the Tweet above). They might be jpegs, mp3s, or gifs. The blockchain does provide one benefit that normal jpegs, mp3s, or gifs don't have: It shows proof of scarcity and authenticity. Blockchain can show the full transaction history of where the NFT came from and provides evidence that the owner of an NFT holds one of the few “verified” copies of the piece of art.  NFTs are often compared to physical collectibles like trading cards, and they do share some similar characteristics. Recently, a holographic Charizard card from 1999 sold for more than $300,000. While anyone can get on their computer and print out a picture of a Charizard, it's been estimated that there are only 122 authentic copies of that specific card in the world. Personally, I'd never drop that much money on a Pokemon card, but scarcity and authenticity mean that there's some fanboy out there who would. What's interesting about NFTs is 95% of them are minted on the Ethereum blockchain. Ethereum is a completely decentralized crypto network, which means that there's no one person or one organization that's in charge of it. It's open-source and “owned” by the Ethereum community as a whole. That's a big deal: getting rid of the middleman can be a game-changer for creators. Why NFTs are great for creators During the weekdays, I work full-time as a marketer for a tech company. I can tell you that the biggest struggle for any marketing department in the world is figuring out how to build a direct relationship with your audience without having a platform like Google or Facebook in the middle. Relying on the kindness and compassion of the tech giants is dangerous — one small algorithm change might mean that nobody in your audience sees your content anymore and your entire business is destroyed. For years, creators have gone through a similar struggle. Artists, comedians, and actors needed to go to record labels, television networks, and movie studios just to make a living. Then, they'd be at the mercy of a few people who held absolute power over their hopes and dreams. Most of the time, these gatekeepers would end up taking most of the profits of the artists' labor. Nowadays, it's easier than ever for creators to get their work directly to fans. But they still aren't seeing the rewards for their art — middlemen and gatekeepers are. After Spotify and record labels take their cut, it's estimated that musicians typically get to keep just 10% of the revenue from the art they create.  What about Patreon? Right now, the best way for creators to get around Facebook, Google, and the other middlemen of the world and directly monetize their fanbase is through platforms like Patreon. The platform offers low fees in exchange for allowing creators to deliver exclusive content to their subscribers. It sounds like a great deal, but there are a few problems. Problem #1: No direct relationship Because Patreon is a centralized platform and a for-profit company, the same “middleman” problem that we discussed earlier still exists. At the end of the day, Patreon's biggest goal isn't to serve artists, it's to deliver returns for its investors. As a creator, you never know if Patreon will make a small change to Terms & Conditions that will increase its profitability but end up hurting your business. Problem #2: Pumping out content doesn't work for everyone Some artists do really well on Patreon. For example, the comedy podcast Cum Town, which features stand-up comedians Nick Mullen, Adam Friedland, and Stavros Halkias makes $81,610 a month. Every week, they release an exclusive podcast just for their subscribers. Obviously, what these guys do is incredibly hard — very few people are able to have hour-long conversations and make it hilarious on a consistent basis. Still, if you have the kind of talent that those guys have, releasing comedy podcasts doesn't take a ton of time. You sit down, you have a conversation, and you say funny stuff. Not every artistic medium works the same way. For example, musicians often spend months just working on a single song. That doesn't translate well to a platform like Patreon, where creators are expected to put out content regularly to their subscribers. One of my favorite musicians, Frank Ocean, took a 4-year gap between his debut album Channel Orange and his sophomore album Blonde. As a fan, I'm happy he took his time to deliver a great product. But if I was a subscriber to his Patreon, I'd be disappointed that I paid 4 years worth of fees for nothing.  It's kind of hard to find musicians who are doing as well as Cum Town on Patreon. Let's look at the house musician Yaeji, who currently has more than 1 million monthly listeners on Spotify. I do like Yaeji's music, but honestly I probably wouldn't pay for this. It's not that I wouldn't want to support her — I'm just not really interested in getting a new phone wallpaper or getting audio sample packs. Unfortunately, these are really the only benefits she can offer, because releasing exclusive songs for fans on a monthly basis just isn't viable. That means that her Patreon isn't getting the kind of traction that it should have given her fanbase — right now, it only has 53 subscribers.  Problem #3: Gated content means less reach If you're an artist who decides to get started with a subscription model, you are making a trade-off. When you release exclusive content only for your subscribers, you might end up making more money. However, your work will end up reaching fewer people, which may limit the growth of your audience. For an example, let's take a look at one of the biggest podcasters in the world: Joe Rogan. Before September of last year, his podcast was available on most podcast players and YouTube. Then, he signed an exclusive deal with Spotify, and his interviews were taken off every other platform. Google Trends data shows that searches for Joe Rogan declined sharply after this happened.  Look, I doubt Joe Rogan is too concerned about this since he got a check for $100 million — but it's undeniable that gating his content has reduced the size of his audience and given him less cultural influence. If you're a creator who doesn't have his fanbase, this can be a big problem. How NFTs can solve these problems What makes NFTs so exciting is that they can solve all three of these problems. Solution #1: No middleman Again, Ethereum is fully decentralized. There's no middleman in the Ethereum network who can snap their fingers and decide to kick you off the platform or change the algorithm to hurt you. If you're an artist, you have a connection with your fanbase that you can actually rely on. Solution #2: Artists don't need to pump out content If an artist is selling NFTs, there's no expectation for them to release content on a monthly or even yearly basis. Artists like Frank Ocean can take their time to release their work. They'll be able to monetize their biggest fans without having to worry about their subscribers begging them for more. Solution #3: NFTs can give artists reach & moneyRight now, artists have to ask themselves this question: Should I gate my content and limit my audience, or should I put it all out there and lose out on revenue? NFTs can eliminate the need for artists to make this choice. Let's think about this in the context of music: while Spotify exposes musicians to wider audiences, they get less than a penny every time one of their songs is played. Blockchain offers an opportunity: Artists can continue to keep their music on streaming platforms, but also sell their most popular songs as NFTs. This gives them the opportunity to monetize their biggest fans without compromising the size of their audience. The biggest benefit of NFTs: An ownership stake in your favorite artistsWe haven't even gotten to the biggest benefit NFTs have over Patreon: the ability for creators to give dedicated fans a financial stake in their success. Maybe in the future, musicians who need to get more money to buy more equipment and studio time don't need to only rely on working a day job. Instead, they can sell their works as NFTs to their early supporters. There's a reason why fans would want to get in on this action as well. If you buy an NFT from a musician you find on SoundCloud who later blows up, you'll be able to sell that NFT for a significant gain. You get rewarded for supporting the creator from the very beginning. There's also a huge marketing benefit for creators. Fans who own NFTs have a financial motivation to tell friends and family members about that artist. That can be a big deal for an artist struggling to get recognition. For an example of how this could work, let's look at Bitcoin. Bitcoin's total value is now worth more than $1 trillion, despite the fact that the cryptocurrency didn't have any marketing team behind it. It all happened organically. The original Bitcoiners were passionate about the network and evangelized it on the Internet and in real life. The fact that they had an ownership stake meant they actually had a real incentive to talk about it instead of just letting it sit on their hard drive and eventually forgetting about it (why do you think people who own Bitcoin never shut up about Bitcoin?) Side note: I own Bitcoin. If early supporters decide to sell their NFTs later on, the artist can share in that reward. NFTs can be set up so the original artist gets a percentage of every secondary sale. Overall, the entire relationship is a win-win for both fans and creators — without some middleman taking the majority of the revenue. Why pay so much for a JPEG?Alright, now it's time to answer the biggest objection people typically have towards NFTs. “Haha what's the point of paying so much for a JPEG, anyway?” We talked a little bit about how NFTs can be an investment asset, but that's not the only way that NFTs can be valuable. To understand how this can work, we need to understand why things have value in the first place. Let me give a simple real-life example. I own a Kanye West t-shirt that I bought at one of his concerts in 2016. I think it cost somewhere around $45. Do I really value the physical Kanye West picture on the back of the shirt $40 more than I would a regular $7 black t-shirt that I could buy at H&M? No, honestly I think it looks kind of ugly. Still, I do value the memory of me and my friends driving down to Los Angeles to watch the concert, I do value the connections I've made with fellow Kanye fans who started conversations with me over the years when I wore the shirt, and I do enjoy telling the story of how Kanye randomly decided he wasn't feeling it in the middle of the concert and left. All in all, I think it was a good purchase. If I can get all of those same benefits with an NFT badge that I could display on my social profiles, I'd be willing to pay for it. We've got to remember, fandom is part of our identities as human beings. The musicians, YouTube channels, and podcasts you like tell the world a lot about what type of person you are. It's also an opportunity to connect with others — there've been countless times when I've bonded with strangers about bands or rappers that we both liked. NFTs can make sure that you can display fandom in the digital space as well. Will NFTs go social? Right now, if you buy a piece of art, you can hang it up in your living room to show it off to any guests that stop by. You can't exactly do the same thing with NFTs. So then, we have to ask an obvious question: what's the point of dropping money on a work of art if you can't show it to anyone?Luckily, there is a solution to this problem: already, there are sites that allow fans to display NFTs that they own. In the future, we might see platforms like Instagram and Twitter pick up the same option if NFTs gain in popularity and social networks see it as a way to increase engagement. While the $69 million NFT purchases are what make the headlines, they aren't representative of how most people will use the technology. In a few years, maybe you'll see fans display NFTs from recent concerts, festivals, and events they've been to on their social profiles. If you're one of the first people to see a concert for a hot new artist, you can show that off on your Instagram to tell the world that you're an authentic fan.In conclusion Right now, the vast majority of the world thinks NFTs are a stupid distraction. But hey, they said the same thing about Bitcoin, and now that network is worth more than $1 trillion. Only time will tell whether NFTs are really the future or whether they're just digital tulip bulbs. Still, they represent the potential for artists to create stronger relationships with their fanbase than ever before. Anyway, if you liked this article on NFTs, you should subscribe to our weekly mailing list. We send one article like this on business & tech every Sunday. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

Summary One time in college, I told my housemate he should drop $10 on a Mario mobile game because “You've made stupider purchases than that.” He used this same reasoning to make progressively stupider purchases until he realized that he needed to change his ways. Smart people often make bad financial decisions when everyone around them is acting irrational. The best example of this is the dotcom bubble, where investors stopped caring about fundamentals and started pouring money into pretty much every Internet company. To avoid losing money in a bubble, be self-aware and try writing down the reasoning for your investment decisions. “You've made stupider purchases than that.” One time in college, my housemate walked into our living room and told me that he was thinking about buying some new Mario mobile game for $10. He thought it looked cool, but he wasn't sure that it was really worth $10. “I don't think it's a big deal man, it's just $10,” I told him. I was looking at my laptop and I wasn't really paying attention to what he was saying. “You've probably spent $10 on stupider things than that.”  “Huh, that makes a lot of sense,” he said. He ended up buying the app, but he didn't stop there. For some reason, “You've probably spent $10 on stupider things than that,” really resonated with him. He used that same framework to buy a bunch of other things on Amazon that he didn't really need. He ended up buying progressively stupider and stupider things until he found himself in his room, surrounded by a bunch of useless shit. He looked around, shook his head in shame, and wondered where his life had gone wrong. Apparently, he never even played that original Mario game that much. All of that happened because of my terrible advice. Anyway, I'm going to try to make up for what I did by giving you guys some good advice on how you can avoid letting bad influences (like the college version of me) convince you to make bad financial decisions. Why do smart people make bad decisions? There's a reason why the advice I gave my housemate was so terrible. Every purchase decision seems okay if you're comparing it to the stupidest purchases you've ever made. My advice can easily be used to justify purchases that give you a quick hit of instant gratification before you recognize that you made a terrible mistake. Next thing you know, you're dropping $175 on an Adventure Time Christmas sweater, not realizing that none of the fifty-year-olds at your office holiday party even know the show until you open the package. Now look, I'm not telling you this story to make fun of my housemate. All of us have held incredibly stupid beliefs at some point in our lives. Usually, we rely on other people to talk us out of whatever ridiculousness we currently have in our heads. Most of the time, relying on friends and family to stop us from being morons works pretty well. Of course, it doesn't work when everyone is being stupid. Sometimes, the entire market gets hit with an epidemic of people who are making really bad excuses to chase instant gratification. That's how bubbles happen. The dotcom bubble To get a better idea of how this works, we can take a look at the dotcom bubble of the late 90s and early 2000s. Back in 1999, the Internet was still relatively new and user numbers were going up exponentially. From 1995 to 1999, it's estimated that the number of global Internet users went from 16 million to 248 million. Those numbers made investors very excited. They started pouring huge amounts of money into any Internet company they could find. The demand for dotcom stocks reached unreal levels. During 1999, the average IPO closed 90% over its offering price on the first day of trading. It didn't matter how unprofitable or nonsensical your business was, the public markets were still happy to buy your stock. For example, Webvan, a company that promised to deliver customers groceries in 30 minutes, raised $375 million in a 1999 IPO. Let's be real — there's no way any company in the 90s could have delivered on that promise. Even today, Amazon doesn't offer 30-minute grocery delivery despite the fact they have the most sophisticated delivery operation in the world and own more than 500 Whole Foods stores in North America. Eventually, reality hit. The tech sector started crashing in the year 2000 when interest rates rose and Wall Street guys started actually looking at the balance sheets of the tech companies they were investing in. They quickly realized that companies like Webvan were unprofitable and didn't have any viable path to actually start making money. The NASDAQ index, which contains most tech stocks, lost 39% of its value that year. It wouldn't get back to pre-crash levels until 2015. As we can all know now, the Internet was a game-changer, and there have been many billion-dollar companies built on top of it. The problem wasn't that the Internet was all hype — investors who poured money into dotcom companies were just getting way ahead of themselves. While there were a few big winners in that era like Amazon and eBay, lots of other successful Internet companies were still years away. The infrastructure that was needed to actually make the Internet a great place for users and businesses wasn't there yet — broadband speeds were still incredibly slow in the 90s. Plus, the one innovation that made the Internet a constant presence in people's lives — the smartphone — wouldn't become popular until 2007 with the release of the iPhone. What can we learn from all this? Even though I was just a kid when the dotcom bubble happened, I can totally imagine what was going through the heads of investors at that time. It's not easy to stay rational and try to make reasonable decisions when you see all your friends becoming insanely wealthy in just a few months. You get jealous and then you want to jump in. Soon enough, the whole market is driven by the emotions of people who don't want to be the only person in their friend group who didn't get rich. Plus, it's important to remember that there have been bubbles around exciting new pieces of technology since the dawn of time. Just like the dotcom bubble, there was a bubble in canals in the 1700s and a bubble in railroads in the 1800s. All of these technologies turned out to be a big deal for humanity's progress as a species. Still, human beings got too excited each time and ended up losing tons of money. So how do you avoid losing money in a bubble? Here's a quote from William Bernstein, where he talks about what he would tell someone who's afraid of getting caught up in a bubble. I would ask them how empathetic they are. When they see someone around them happy, do they get happy? When they see someone around who is very sad, do they get sad along with them? And if you answer those two questions yes, then you really have to be on your guard, because that tells you that you're the kind of person who is going to feed off other people's investing emotions, which is death in investing.The trick is having as much self-awareness as possible. Personally, I've been trying to do that by writing down my investment decisions. Honestly, I could be better about it — I don't do it as much as I should. Still, it's the best way to force yourself to look at the reasons why you're making certain decisions. If you end up losing money, you can always come back to what you wrote to figure out where you went wrong. In conclusion My housemate wasn't the first person who got sucked into really bad financial decisions by the stupidity of the people surrounding him. He's definitely not going to be the last one either. We all get sucked into bubbles — it's just human nature. The only way out is through self-awareness. Anyway, if you liked what you read, sign up for our weekly newsletter. If you enjoyed hearing about my housemate ruining his bank account, you'll definitely enjoy our weekly articles on business, tech, and investing. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

I am not a financial advisor and I am not recommending you buy any specific stocks or cryptocurrencies. Here's a summary in case you're too lazy to read. Summary Back in 2013, most “smart” people were dismissing Bitcoin as stupid. Peter Thiel pointed out that successful startups are built on assumptions that sound stupid to most people. Cryptocurrency is a great modern-day example of this. Even now, there a lot of people who think the whole thing's a scam. A great way to figure out whether a “stupid” technology actually is stupid is by looking at how it's progressing over time. Lots of people thought the Internet was stupid in the 90s, but it got faster and faster over time until it was really easy for anyone to use. Missing out on tendies The first time I remember hearing about Bitcoin was back in 2013, when I heard one of my high school friends talking about it. I didn't really have a strong opinion on it, but all the articles that I read online about it seemed to think it was stupid, so I didn't investigate it any further. That was definitely a mistake. Back then, I could've bought one Bitcoin for $100. That would be worth more than $57,000 now.I'm sure most of you reading this had similar experiences with Bitcoin. The lesson we should all learn from missing on those returns is that we shouldn't just be ignoring new technologies when most people are dismissing them as stupid. In fact, that's exactly when we should be paying close attention. What I learned from Peter Thiel One of my favorite books ever is Zero to One by Peter Thiel, who co-founded PayPal and Palantir. It's a great look into how his mind works and how he thinks about companies to invest in. The first chapter starts with a question that he asks anyone that he interviews. “What important truth do very few people agree with you on?” Thiel goes on to talk about how most people don't really have good answers to this question. They'll usually say something about how American education is broken or share some other opinion that isn't really that controversial. Those answers aren't really what he's looking for — the best answers are those that actually have a definitive view of what the future is going to look like and sound really stupid to most people.Those are the kinds of answers that great companies are built on. There's a reason why startups need to be built on ideas that sound stupid. If an idea is too obvious, there's a good chance that at least one of Facebook, Amazon, Apple, Microsoft, or Google is already pouring money into it. In addition, there are probably a ton of other startups who are trying to do the same thing. The odds of actually building a successful company when there's this much competition are pretty low. For an example of a startup that was built on an idea that sounds stupid to most people, we can look at Airbnb. The founders made the assumption that homeowners would be okay with random people staying at their house if they wanted to make some extra money. It seems obvious now, but back in 2008, most people didn't understand why hosts would run the risk of having a serial killer murdering them in their sleep. Now, there are more than 7 million Airbnb listings and the company is worth $112 billion. Is cryptocurrency colossally stupid? So what does any of this have to do with you? Well, if you're making investments, you can “beat the market” if you find a company or technology that most people think is stupid but actually has a lot of potential. After all, the fact that most people are dismissing it means it's underpriced relative to its true value. That's why I'm so interested in cryptocurrency right now. Crypto is built on one important truth that most people probably don't agree with, “A better financial system can be built through code and decentralization.” That idea was a lot more controversial 5 years ago, but it still seems ridiculous to most people over the age of 40. Even though Bitcoin is worth more than $1 trillion, many people still think crypto is a giant scam. Take a look at this guy right here. This guy is a total douche who's trying really hard to look like the smartest guy in the room. It's really not that hard to see why cryptocurrency-enabled services like decentralized finance are so exciting. After all, many of these decentralized finance protocols give savers significantly higher interest rates than they can find in any traditional bank. That being said, I do understand where this guy is coming from. Right now, the cryptocurrency landscape is really hard to navigate for anyone who isn't a nerd. As I wrote last week, these usability issues mean it's going to take a long time for cryptocurrency to reach the point where it's going to start replacing the traditional financial infrastructure.  Finding evidence for your stupid idea So maybe you came up with your answer to Peter Thiel's question and you have a view of the future that's different than most people's. Then, there's another question you should probably try to answer: Am I actually on to something or am I just a moron? To figure out how to answer that question, we can look to history. Here's how Jeff Bezos decided to make a decision that most people at the time probably thought was incredibly stupid, quitting his job as VP of a prominent hedge fund to start Amazon back in 1994. "I came across the fact that Web usage was growing at 2,300 percent per year. I'd never seen or heard of anything that grew that fast, and the idea of building an online bookstore with millions of titles--was very exciting to me.” Back in the 90s, most normal people only used the Internet to send email. Broadband speeds were so slow that loading an image took forever, and loading a video was basically impossible. That's why back then, lots of smart people thought the Internet was a joke. Nobel Prize-winning economist Paul Krugman said the Internet's impact on the economy would be no bigger than that of the fax machine. Bezos clearly saw things differently, and he was 100% right. The fact that the Internet was growing this fast when broadband speeds were still slow is incredible. The numbers showed that the concept wasn't all hype —the Internet was an exciting new technology. Jeff Bezos recognized this and decided he needed to make his move and build his company while the Internet was still young and the opportunity was still there. So what can we learn from this story? As venture capitalist Chris Dixon pointed out, there is a way to determine whether the stupid thing everybody is dismissing is actually going to turn out to be a big deal: paying attention to how the technology is progressing over time. While the Internet was incredibly hard to use in 1994, things got better pretty rapidly. It's been estimated that Internet speeds have gone up 10x every 5 years since 1990. It wasn't possible for most people to watch videos online in 1995, but by 2005 we had YouTube. Just like the Internet, cryptocurrency has become significantly less annoying to use over time. A few years ago, it was really hard for any normal person to buy Bitcoin and send it to other people. Nowadays, Cash App allows you to do both of those things really easily. With this rate of improvement, it's possible that within a few years, putting your money in decentralized finance will be easier than setting up a bank account. In conclusion It'd be nice if I could go back to 2013 and buy some Bitcoin. It would also be nice if I told myself to get better at basketball so I could actually score some points in some of the pick-up games I played with my friends during my freshman year of college. But hey, you can't redo the past — you just got to learn from your mistakes. I'm still trash at basketball, but next time I hear one of my friends talk about some new technology, I'm not ignoring it just because I read some negative article online. Anyway, if you liked what you read, sign up for our weekly newsletter. If you enjoyed hearing about me missing out on Bitcoin, you'll definitely enjoy other stories of me trying to make other money moves and failing really hard (with notes on what you can learn from those stupid decisions). This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

The dopamine hit of seeing a stimulus check hit your bank account hits almost as hard as the stress when you see it all disappear a day later. Anyway, here's a summary of the article in case you don't want to read. Summary Banks have screwed over their customers many times in the past, but nobody really has another option to store their savings and borrow money. Decentralized finance has the potential to be a great alternative because it cuts out the middleman with the help of blockchain-based networks. I tried getting started with decentralized finance and I was freaking out because I thought I lost $1200. Because of how hard it is to get started and how scary blockchain is to the average person, it's going to take a while for decentralized finance to go mainstream. A rollercoaster of emotions Today, we're going to sit down and hear the story of how $1200 of my money vanished in thin air. But don't worry, this article's not going to just be about me and my stupidity. We're also going to talk about an exciting new space called decentralized finance and the advantages that it can offer over traditional banks. Why everyone hates the banks It's hard to believe that anyone trusts the banking system. Going through every shady thing that banks have done in the past twenty years is kind of like trying to go through every crime that Jeffrey Epstein committed — so let's just focus on one recent case with Wells Fargo. Last year, the company had to pay a $3 billion fine to the Justice Department. From 2002 to 2016, Wells Fargo employees who realized they couldn't hit their quotas decided it was easier to just screw over existing customers. The employees opened up millions of accounts behind customers' backs and even transferred money out of their accounts. Plus, taking out a loan from a bank isn't exactly a fun process for anyone. To get a loan, you need a good credit score, but it's often calculated in a way that completely goes against any conception of fairness and common sense. The loan process is especially bad for Blacks and Latinos, who are less likely to get loans than their white counterparts. When they're trying to buy a home or start a business, they're often at the mercy of some Karen underwriter who spends her free time sharing Kamala Harris conspiracies to her 58 Facebook friends. The way out: decentralized finance No matter how much people hated the banks, they kept using them. It wouldn't matter if Wells Fargo employees were kidnapping the firstborn child of every customer  — banks still offered the easiest and most secure way to deposit money. But recently, a new alternative has emerged: decentralized finance. Decentralized finance protocols like Compound have the potential to provide better financial services to both savers and lenders. What makes these services so interesting is that they aren't controlled by any one company — instead, they run on smart contracts built on blockchain networks like Ethereum. That means there are no Wells Fargo employees standing in the middle who can manipulate your savings. The flow of money is determined by code. Savers can put cryptocurrency into the protocol so they can earn interest. Borrowers can put some of their crypto in as collateral and take out a loan if they're in need of some capital. The code does all the hard work of matching these two groups together. Because protocols like Compound have effectively cut out the middleman, they can leverage their capital far more efficiently than traditional banks. Right now, Compound offers a 6% interest rate for DAI, a stablecoin that's designed to match the price of the U.S. dollar. On the other hand, Wells Fargo offers an interest rate of just 0.01%. No middleman also means less potential for unfair discrimination. Instead of having your financial future controlled by some Karen underwriter, the underlying code and algorithms determine what interest rates you'll get based on supply and demand.Why I thought I lost $1200 I decided I was sick of the 0.01% interest that Wells Fargo gives me on my savings account. So I decided to give decentralized finance a shot. I found a mobile app called Dharma which would make it easy for me to put money on protocols like Compound and start earning interest on the crypto I already owned. I started things off by moving about $1200 worth of assets from my Coinbase Pro account to my Dharma account. I waited a few minutes for the transaction to process. I saw the money leave my Coinbase Pro account. But then it didn't arrive in my Dharma account. It looked like the money that I transferred just disappeared. I've read stories online of people accidentally transferring crypto to the wrong address. I wondered if that was what happened. It didn't make any sense — all I did was copy and paste the address from my Dharma app into Coinbase. I wondered if I somehow accidentally put in a stray letter and ended up sending my crypto to some random dude in Nigeria.  I don't really gamble or trade options, so I've never lost that much money in a few minutes. Honestly, I felt kind of embarrassed. I imagined my dad shaking his head when I told him how I lost my stimulus money, then telling me that crypto is for South American drug cartels. I imagined the voice of a thousand Boomers speaking in unison telling me to sell all my crypto and buy some government-backed bonds that will give me a 1.5% return over 10 years. I imagined some kid who bullied me in 8th grade telling me my newsletter sucks and that nobody actually reads it (not sure where that last one came from). I was freaking out for about an hour until I got in contact with Dharma's customer support team. They let me know that the money was there, it just wasn't showing up on my app because of some kind of technical error. Within a few hours, the problem was fixed and I had my money. Is decentralized finance the future? I'm not writing this because I wanted to hate on Dharma. Their Support team did a great job staying on top of the issue and I will continue to use the app in the future. I work in tech and I know that young companies have bugs — as long as I still have my money, I'm happy. I am writing this because I wanted to highlight that even though decentralized finance is an exciting field with a ton of potential, it's pretty hard to use at this point. I had to do a ton of research just to figure out how to get started and obviously, freaking out for an hour because you lost $1200 is not an ideal way to kick things off. Even though decentralized finance has a ton of potential, usability issues are preventing it from reaching the same scale as banks. Right now, Compound has $11 billion worth of assets locked up in its protocol. On the other hand, Wells Fargo has $1.97 trillion in assets. That being said, every new technology starts out being incredibly hard to use. Downloading music on the Internet used to require downloading some pirating app like Limewire. After that, you'd have a 50-50 chance of either finding the song you wanted or just getting a virus that made your whole computer unusable. Spotify and music streaming didn't come around until years later. Of course, usability might not be the biggest issue with decentralized finance. The #1 thing that's stopping mainstream adoption is probably public perception. Even though the total value of Bitcoin is now more than $1 trillion, there are tons of people who still hear the word “blockchain” and automatically assume it's just for drug dealers and scammers. It's going to take years for the average man on the street to trust services like Compound with their money. In conclusion Maybe one day I won't need to give my money to Wells Fargo because I'll be able to get better interest rates using Compound. Maybe one day, the average person can easily get a crypto loan. Decentralization has the potential to make capital work more efficiently than ever. Still, we've got to wait a few years before it actually becomes a threat to the banks. Anyway, if you want to read more about me trying to make money moves and failing really badly, sign up for our newsletter. We send one email like this every Sunday. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

Apple's M1X chips are coming soon. Here's what that means for the world. If you liked this conversation, sign up for our weekly newsletter. We send one in-depth article on tech and business every Sunday. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

Peter Thiel is one of the world's most interesting people. He's a billionaire who co-founded PayPal and was one of Facebook's first investors. He's a gay man who made a speech supporting Trump at the 2016 Republican National Convention. He's also on a quest for immortality and it was once rumored that he was injecting himself with the blood of young people to stop the aging process. This man's vibe is so out there that people literally thought he was some kind of Silicon Valley vampire, like if Dracula moved to Palo Alto and started trying to fund startups so he could steal the youth of some Stanford computer science majors. Anyway, the reason why I'm bringing him up is because today, we're going to break down one of his favorite theories.  Peter Thiel often talks about how there's been a slowdown in technological innovation in the past few decades that's affected every aspect of our society. Let's talk about whether innovation is actually slowing down, what shows like Black Mirror tell us about how we view the world, and whether things are going to change in the future. Is innovation slowing down? Peter Thiel often talks about how disappointing advances in technology have been in recent decades. It might be hard to believe considering how much smartphones have changed the world, but he does have a good point. Just think about how much innovation there was in the period from 1900- 1973. In the span of a couple of generations, you went from human beings mostly living on farms and achieving flight for the first time to actually putting a man on the moon. You saw most of the United States getting access to cars, electricity, and television. For most Americans, life went from extraordinarily shitty to pretty good (it was still pretty shitty if you were black). Then suddenly, the pace of innovation started slowing down. In the last few decades, there's been a lot of progress when it comes to software and the Internet. Still, it seems like we haven't seen the kind of rapid growth that we saw in the early 20th century. After all, we went decades making very little progress when it came to space exploration. Thiel said that one symptom of this slowdown in innovation is that Americans stop making bold bets about what the future was going to look like. Instead of actually investing in companies they believed were going to change the world, investors put money in passive index funds because “nobody can beat the market”. Having an optimistic and concrete idea of what the future was going to look like became a controversial opinion. What science-fiction tells usPeter Thiel also pointed out that science-fiction of the past showed that people used to have a very different vision of what the future would look like. Shows like Star Trek showed human beings exploring “The Final Frontier” of outer space and having cool adventures on different planets. Human beings aren't that good at predicting the future, we just kind of assume the future is going to be like what we've already experienced. The science-fiction of that era was a natural continuation of what was already happening. People saw how fast technology was advancing and probably thought that in a few decades, it was obvious that human beings were going to colonize Mars and venture even further into outer space. That didn't actually happen. Until SpaceX and Blue Origin came around, America's space program was pretty much dead. Just like that guy from your hometown who moved to LA to be a rapper but moved back home 6 months ago to stay with his parents, our dreams were over. Except America wasn't dreaming about getting on a song with G-Eazy. Instead, we stopped thinking about building a galactic republic and cut funding for NASA. The change in our mindsets led to a change in our media. The most popular science-fiction show of our era is probably Black Mirror, which has a very negative view of technology. One of the show's most well-known episodes, “Nosedive”, shows a world where people are ranked based on every social interaction that they have. If you cut someone off in traffic, they can give you a bad review and cause your overall rating to go down, which then hurts your opportunities at getting a great job and getting good housing. The science-fiction that exists now is nothing like the science-fiction that existed back then (unless it's a remake of a TV show or movie from that era). There's no Captain Kirk hooking up with alien girls - instead, the future is just a natural continuation of our recent past. We didn't get colonies on Mars, we just got Instagram and Snapchat. So it makes sense that modern science-fiction expects the technology of the future to be a stupid distraction that doesn't actually have that much of a societal benefit. Will the youth have a different attitude? But hey, maybe Peter Thiel was too negative about the future of technology. People might have pessimistic in recent years, but maybe that was just old people who were sad that the pictures of their grandkids they posted on Facebook didn't get as many likes as they thought they would. The writers for that Black Mirror episode were Michael Schur and Rashida Jones (Karen on The Office), who are both 45 years old. Maybe today's youth have a different attitude. Whether you think Tesla and Bitcoin are amazing innovations or just stupid, you have to admit that they're both big ideas. Tesla isn't just an electric vehicle company - eventually, their cars are supposed to have full self-driving capability, which might be the biggest game-changer in everyday transportation since the invention of the car itself. Bitcoin is a digital currency that makes it easier than ever for people all over the world to easily exchange goods and services with each other without the need for a central government. There's no precedent for that in history. While Boomer-run institutions shorted Tesla stock and laughed at Bitcoin for years, the youth have embraced both. Studies show that Tesla is Millennial's favorite stock (it seems like Elon Musk must be aware of this to some extent, which is why he posts so many memes on Twitter). Meanwhile, a study by the financial adviser DeVere found that more than ⅔ of their Millennial clients had put their money in Bitcoin. It's a very different view from what older Americans have. Warren Buffett, who was for a long time the patron saint of American capitalism, has publicly said that Bitcoin is rat poison and that he wouldn't invest in Tesla. Before we hit him with the “OK, Boomer”, we should note that it totally makes sense why he feels this way. It's probably pretty hard for a guy who grew up in Great Depression Nebraska to comprehend how software systems can actually replace human drivers and how a digital currency can function without the backing of a central government. On the other hand, it's a lot easier for kids who grew up on the Internet to understand the technological potential here. It's possible we've got a more optimistic view of the future because we don't see software as something to be afraid of. The way that we invest proves it. In conclusion Even though it's hard to match all the innovation that happened in the early 20th century, there's lots of exciting stuff happening in technology right now. Tesla has released a self-driving beta to a small group of testers. In the crypto world, decentralized finance companies allow borrowers to get loans without the need for any central institution to get involved. Maybe Boomers aren't excited about the future of tech, but I definitely am.Anyway, if you're looking to learn more about business and tech, sign up for our weekly newsletter. We send one email on topics like this every Sunday. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

We're approaching the 1-year anniversary of the day the NBA got canceled because of COVID-19, which is the same day when people all over the country started taking the pandemic seriously. As we all know, it's been an absolutely garbage year, so congratulations on making it through 12 months of quarantine without going insane.  Anyway, one of the saddest parts of the past twelve months is how much small businesses have suffered. In my hometown of San Jose, one of the city's largest Vietnamese malls is on the verge of closing. For years, it's been a cultural hub for the city's Vietnamese population and it's home to more than 100 immigrant-owned businesses. Now, it's lost 80% of its customer base and we just have to pray that America can distribute vaccines quickly before it's closed forever. It's not just San Jose — across the country, small businesses form the backbone of our culture and our economy. Not only are they become essential gathering places for the community, but they also employ 46% of private-sector American workers.Besides the lockdowns, there's another trend that's affecting small businesses: People are spending more time online than ever. The early days of the lockdowns saw a 40-100% increase in Internet usage, as people spent their quarantine browsing social media, working remotely, and making purchases on eCommerce stores. When the pandemic's over, we can expect customer habits to be permanently changed. Even Boomers who were resisting for decades were forced to finally learn how the Internet works. From February to March of 2020, the percentage of Boomers who said they bought something online went from 8% to 34%. Many small businesses are responding to these changed consumer habits by embracing digital. According to Visa, 43% of small businesses have started selling more products and services online during the pandemic. It sounds like these businesses are making a smart move, but they're facing a bigger problem that isn't going away with a vaccine. How my yoga studio is embracing digital Before the pandemic started, I used to go to a yoga studio near my house. When the lockdowns started, they started offering classes online. They've since announced that they're planning to offer a mix of in-person and virtual lessons once everything is back to normal. It sounds like a great idea. While I did love the in-person classes, there were a lot of times when I wanted to go to a lesson, but I just didn't want to leave the house to find parking by the studio. A hybrid approach would help lazy dudes like me get the most out of their monthly subscriptions. Once the studio gets started with the hybrid approach, there's a natural next step. They can build a mobile app that customers could use to purchase subscriptions, join video classes, and get notifications so they wouldn't forget about upcoming lessons. Of course, there is one thing that would stop the studio from implementing this: it would have to start handing over a sizable portion of its revenue to Apple. How the App Store works Before we go any further, let's talk about how the App Store makes money. Apple takes a portion of the revenue every time you buy an app or purchase something that enhances your in-app experience. That means that Apple gets a 30% cut when you're buying some Super Likes on Tinder. However, they don't charge anything for physical purchases - so they don't get any money if you get a ride on Uber or buy a shoe on the Nike app. There's no way for app developers to get around this fee if they want to reach iPhone users. While Android phones allow you to download apps without using the Google Play Store, the only way to download apps on the iPhone is through the App Store. Apple even has reviewers go through every app to make sure that nobody's cheating the system. Apps are rejected if they use an alternative payment system or tell users to go on the website to avoid the fee. There's also no way that any business can just ignore iPhone users. It's been estimated that almost 50% of Americans and more than 80% of American teenagers use iPhones. It's true that you could just build a website that iPhone users can visit on their browser. But let's be real: smartphones are built for apps, not web browsers. Apps are faster and give businesses the opportunity to send notifications, which leads to higher engagement. If you want to provide the best possible experience to your customers, you need an app — especially since the majority of Internet traffic is now coming from mobile devices. Now before one of you Apple fanboys comes after me, I will acknowledge there's a reason why the company has such strict rules for the App Store. Apple is trying to protect user security and privacy. If customers could download apps without the App Store, it would open up the door for viruses and potential data security issues. Still, it's hard to justify all the negatives that come about because of the fees.  Why the 30% fee matters For big companies, the 30% App Store fee is an inconvenience. For small businesses, it's like getting choked by Steve Jobs's ghost. Running a small business is already incredibly hard. You've got a lot of costs to worry about when it comes to paying your employees, paying taxes, marketing your business, and developing new products and services. That's why 50% of small businesses shut down within 5 years of getting started. Putting a 30% fee on top of all those other expenses makes running a profitable business even harder. Part of the reason why the Internet has been such a great thing for both businesses and users is that it's been built on open protocols. Anyone can start a website that can be accessed all over the world. While you might need to pay a small annual fee for a domain name, business owners don't have to hand over 30% of their revenue to Comcast or AT&T. Unfortunately, the same can't be said for the app ecosystem. I will give Apple some credit for giving small businesses temporary relief from the 30% fee. Because of the pandemic, Apple has waived the commission for in-app purchases for businesses offering virtual classes until June 2021 (it would have been a terrible look if they didn't do this). Still, we need to ask ourselves what happens once this date passes. Consumer habits have changed permanently and people are more comfortable than ever making purchases on digital. Small businesses all around the country would be able to better serve customers if they could embrace a hybrid model but the App Store's policies are standing in their way. In conclusion Small businesses are an essential part of communities all across America. Unfortunately, many of the businesses that want to be able to offer services designed for customers on mobile devices are going to need to hand over a huge portion of their revenues to a company that's already worth $2 trillion. For a long time, the only thing those small businesses could do is just sit there and pray that Apple would show mercy and extend the waiver even further. But now, we might be seeing some action from the government. Arizona's House of Representatives just passed a law that mandated that both Google and Apple allow developers to use alternative payment systems. We'll have to see if the Federal Government decides to take similar action. Anyway, if you're looking to learn more about business and tech, sign up for our weekly newsletter. We send one email on topics like this every Sunday. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

Hey guys, if you don't want to read, please check out the podcast above. It's a discussion I had with my friend about NBA Top Shot and blockchain technology. We cover a lot of the same subjects that I wrote about in this article. You can listen on Apple Podcasts and Spotify. I've been a basketball fan since 2007, when my favorite team, the Golden State Warriors, somehow pulled off an upset against the 1st seed Dallas Mavericks in the first round of the NBA playoffs (I'm just saying this so nobody accuses me of being a bandwagoner).  The saddest day of my life was probably June 19, 2016. It was Game 7 of the 2016 NBA Finals, and it was the day I saw this play. Even though I felt absolutely depressed when I saw Lebron James come out of nowhere to help seal the NBA Finals win for the Cleveland Cavaliers, it's been five years — so watching this highlight doesn't make me want to lock myself in my room and listen to My Chemical Romance anymore. I can now appreciate it for being an unreal athletic play that came at a clutch moment. While this block might have crushed my soul, there's a whole city that celebrated when it happened. With this play, Lebron James helped to bring the first major sports championship to Cleveland in 52 years. I'm sure that there's some sports fan from Ohio who suffered through decades of absolutely garbage teams in football, baseball, and basketball who will treasure that moment forever. Soon, that guy can have a permanent digital reminder of that blocked lay-up with NBA Top Shot. How NFTs work NBA Top Shot allows basketball fans to trade highlights from NBA games just like virtual sports cards. The marketplace was built by Dapper Labs in partnership with the NBA and the NBA Player's Association. Right now, that Lebron block isn't available because the marketplace is still in beta and only has highlights from the last two years. Of course, hasn't stopped Top Shot from blowing up. After endorsements from celebrities like Mark Cuban and Gary Vaynerchuk, highlights on Top Shot now have insane levels of demand from fans. According to the site's homepage, there have been $200 million of transactions so far. Right now, the top Warriors highlight is this three-point shot by Steph Curry. The minimum price to buy it is $75,000. Part of the reason why NBA Top Shot is so successful is that it's built on blockchain technology. These highlights are a type of digital asset called non-fungible tokens, or NFTs for short. I'm not going to bore you all by going through all the technical details of how this works — all you need to know is that the tokens are verified via blockchain and set up so that they're artificially scarce. That means there are just a few trading cards available for each highlight and that nobody can copy them and create more.  The limited number of cards is part of the reason why thousands of people are rushing to pick up highlights as soon as they're dropped and why prices are going so high. It's just the law of supply and demand in action. Why are people paying so much for GIFs? I'm sure some of you are wondering why people are dropping enough money to buy a new Mercedes on a highlight that you can easily find on YouTube. Well, it's also pretty ridiculous that people pay thousands of dollars for basketball cards, which are just pictures of players printed on a piece of paper. Still, the sports collectible market has been going strong for decades. At the end of the day, these trading cards - both physical and virtual - are valuable for emotional reasons. Fans build a sentimental attachment to certain players and certain plays. I'll never forget Klay Thompson splashing shots from near half-court to beat the Oklahoma City Thunder in Game 6 of the Western Conference Finals. While I probably wouldn't spend thousands of dollars to remember that moment forever, I'm sure there are plenty of Warriors fans who would. In addition, Top Shot is an opportunity for people who might not be interested in the stock market to start investing. Buying a highlight from a promising rookie can be considered the equivalent of buying stock in that player. If they become an All-Star in the future, that highlight might be worth significantly more and can be resold for a huge profit. All of this is incredibly exciting. Of course, it's important to remember that Top Shot is just one potential use for NFTs. There's another use-case that might have even more potential: helping artists monetize their work. Why the rise of the Internet hasn't been great for artists We all know it's incredibly hard for artists to make money. The digital age has made it even harder. Just think about what happened to the music industry back in the early 2000s. People didn't need to buy CDs anymore, so they went ahead and pirated music on platforms like Limewire and Pirate's Bay. Even though piracy isn't as big as it was fifteen years ago, musicians still aren't doing nearly as well as they were in the 90s. Streaming services might have enabled them to reach larger audiences, but artists still aren't seeing much of the revenue. Spotify only pays artists between $.003 and $.005 every time one of their songs is played. Even as late as 2015, musicians were getting more money from vinyl sales than they were from streaming. How NFTs can help artists make money NFTs could offer a new route to monetization for musicians in the Internet era. The technology is already giving all types of artists the opportunity to get fair compensation for their work. The artist Beeple had one of his works sold as an NFT for $6.6 million. The YouTuber Logan Paul (I know I'm stretching the definition of “artist” pretty hard) sold $5 million worth of cartoon images of himself designed to look like Pokemon cards. In the future, musicians will most likely get in on this action as well so that they don't need to rely on the scraps they get from streaming services. They can sell a limited number of NFTs of their songs to hardcore fans who want to own a piece of their favorite album. Again, I'm sure some of you are wondering why anyone would buy an NFT of a song they could easily find online. Well, why would anyone buy a signed Prince vinyl when they could also easily find that same album on any streaming service? The answer is that fans value the authenticity of a signature from their favorite artist. Just like Top Shot highlights are the digital equivalent of basketball cards, NFT songs can be the digital equivalents of vinyl records. Blockchain verification can provide the digital version of a signature. Musician NFTs can also be a way for fans to “invest” in their favorite artists. If these musicians end up blowing up, the NFTs of their songs may be worth a lot of money. What's even cooler is that if the fan goes ahead and sells the NFT, the technology can make sure that the artist is fairly compensated. The assets can be set up so that the original creator gets a percentage of all secondary sales. Even though the rise of the Internet hasn't been great for artists, NFTs can change that. The technology can make sure that it's not just the Drakes and the Travis Scotts of the world who are getting fair compensation for recorded music.In conclusion I asked one of my talented musician friends if he could sell me one of his songs via NFT. In response, he said, “What is an NFT lol.” While NFTs are getting a lot of traction, we're still pretty far away from mainstream adoption. Still, NBA Top Shot shows that people are willing to spend real money to have verified ownership of virtual objects. While we're still in the early days of blockchain technology, it's impressive what it's enabled already. But that's nothing compared with what's to come. Anyway, if you're looking to learn more about business and tech, sign up for our weekly newsletter. We send one email on topics like this every Sunday. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

Here's a conversation I had with my buddy Karanbir Bains about Starlink. We also discuss Tesla purchasing Bitcoin and why SpaceX might want to spin off Starlink. If you liked this conversation, join our mailing list. We send one email every Sunday on tech and business. We write them for normal people - they aren't in some weird Boomer corporate speak. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

I was in high school when Steve Jobs died. Being in Silicon Valley, some of the people around me acted as if Jesus had just been crucified for the second time. But the feelings of sadness weren't just limited to the techies. Even normal people seemed to recognize that something big had happened. Everyone had an iPod or an iPhone, and now the same guy who got on stage and introduced those products to the world was gone. Jeff Bezos stepping down from Amazon might just be as big of a deal as Steve Jobs stepping down from Apple. After all, Amazon has just as much impact on people's lives as Apple does. Millions of Americans shop on Amazon Prime and visit sites like Netflix that are powered by Amazon's AWS on a daily basis. Still, Bezos is not going to be celebrated by the masses the way that Steve Jobs was. Bezos's legacy is going to be debated for years to come. Some may call him the modern-day John D. Rockefeller, a robber baron who made billions while his workers suffered. Others might focus on the thousands of independent bookstores that closed because they couldn't compete with Amazon. Look, I'm going to do some deep-dive into the morality of Amazon's business practices - this isn't some ethics newsletter that your philosophy professor asked you to subscribe to for extra credit. Instead, I want to talk about one aspect of the Bezos legacy we can all celebrate: his capacity for YOLOing. Let's talk about some of Jeff Bezos's boldest moves and break down the lessons they can teach us. Jeff Bezos's 1997 letter to shareholders Jeff Bezos set the tone for what kind of company Amazon would be in his famous 1997 letter to shareholders. In it, he talked about how his biggest priority was moving fast and making Amazon the leading online retailer while the Internet was still young and the opportunity was still there. He also emphasized the company's commitment to making big bets to reach this goal: “We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.”For most companies, this type of language is just PR bullshit. Even CEOs of companies like Intel talk about being “bold”, while their products can't keep up with the times and they fall hopelessly behind the competition. But Jeff Bezos wasn't all talk. Being bold was a way of life for Amazon. Jeff's biggest W: Amazon Prime In 2005, Jeff Bezos announced what may have been his biggest YOLO: Amazon Prime. For just $79 a year, customers could have unlimited 2-day shipping. It seems like an obvious idea now, but back then, even Amazon employees thought Jeff Bezos was literally insane. Some critics believed the only customers who were going to sign up for Amazon Prime were people who already made a ton of purchases online. They would then just abuse the free shipping until Amazon went bankrupt. Amazon didn't end up going bankrupt. Instead, Amazon Prime helped it become the #1 choice for online shopping. Amazon Prime customers had zero reasons to look at sites like eBay to compare prices - they knew Amazon was going to give them the best deal. Bezos made a bold move and it paid off in a big way. Now, it's estimated that Amazon Prime has 126 million subscribers in the US alone. The company gets a recurring revenue stream from the majority of American households, which it can use to make even more bold bets. Jeff's biggest L: the Fire Phone Of course, not all of Jeff Bezos's YOLOs have worked out. Back in 2014, he probably had one of his biggest failures ever (other than having his nudes leak): the Fire Phone. The Fire Phone was Amazon's attempt to get into the luxury smartphone market. It was priced at $650, the same price as the iPhone 6, which also released that same year.  Amazon really never had that much of a chance. By that point, everyone had pretty much decided whether they preferred iPhones or Androids and didn't really want to try out a new phone. Plus, the Fire Phone had its own problems. It was filled with gimmicky features that nobody was really asking for. Since it was new, it didn't have nearly as many apps as iPhones or Android devices.The Fire Phone wasn't a serious threat to the iPhone at all. Apple got 4 million pre-orders for the iPhone 6 within 24 hours. On the other hand, the Fire Phone didn't even sell 35,000 units in 2 months. Eventually, Amazon was forced to sell the phones off at just 99 cents. Even though Amazon lost really big with the Fire Phone, the whole episode might have been a good thing for the company overall. Amazon admitted its failure almost immediately and took a tax write-off for the cost of making the devices.  Many of the employees who worked on the Fire Phone team took what they learned and applied it to Amazon's next big product: the Echo. Amazon might have lost embarrassingly badly to Apple when it came to smartphones, but they won big when it came to voice-activated devices. Right now, the Amazon Echo dominates the market, while the Apple HomePod is way behind. What the YOLOs mean for Amazon For most big companies, it's hard to stay innovative. Once a company reaches a certain size, it gets wrapped up in rules and bureaucracy and is more focused on preserving its current revenue streams than building for the future. But Amazon is different. Jeff Bezos once said, “If you have a 10% chance of a 100x return, you should take that bet every time even if it's going to feel bad 9 out of 10 times.”  Some of his bets worked incredibly well, like Amazon Prime. Some of them failed incredibly hard, like the Fire Phone. Overall though, Amazon's strategy of making big bets has paid off. The successes like Amazon Prime, AWS, the Kindle, and the Amazon Marketplace made up for the failures. This past year, Amazon saw 44% year-over-year revenue growth, which is pretty much unheard of for companies that are that big. What Jeff Bezos can teach us about YOLOs Look, I'm not telling you this just to show how awesome Jeff Bezos is. There's a good lesson that we can all learn here about the importance of making bold bets. One of the best financial decisions I ever made was investing in Tesla back in the summer of 2019. Back then, the company was taking some serious heat from the business press. Tesla was missing its sales targets and people were wondering whether the pressure was getting to Elon's head.Betting on Tesla was kind of a YOLO decision for me. Even though Elon's tweets kind of worried me, I love the product and I strongly believe that electric cars are the future. I didn't put down my entire life savings because I knew there was some risk, but I made an investment. Through insane luck and zero skill, I've made a 1717% return so far. I'm happy I took the bet, and it's paid off for me in a big way. Look, I'm not trying to tell you to risk everything you have through badly-thought out YOLOs. Nine bad bets can leave you broke if you're not careful. Remember: Amazon didn't bet all of its money on the Fire Phone, the company was going to be fine either way because of the profits it makes from Amazon Prime and AWS. It's important to take calculated risks. In conclusion Whether you think that Jeff Bezos is the greatest innovator of our time or just some dude who should pay more taxes, there's a lot we can learn from how he ran Amazon. No matter how you feel about its founder, there's a reason why the company's become an essential part of the lives of millions of Americans. Anyway, if you're looking to learn more about business and tech, sign up for our weekly newsletter. We send one email on topics like this every Sunday. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

Right now, the whole world is focused on one company: GameStop. It makes sense why it's grabbed the world's attention. Everyone's captivated when they see people on the Internet become millionaires overnight, somehow beating some of the world's biggest hedge funds. It's better than watching Luke Skywalker take down the Death Star. We haven't seen this type of win for an underdog since a 12-year old Bow Wow pump-faked Vince Carter to beat the Toronto Raptors. GameStop has had a wild week and the story's not over yet. GameStop stock is still trading at a relatively high price and on forums like r/wallstreetbets, retail investors are encouraging each other to “hold the line” to beat the hedge funds at their own game. Like all great wars of history, we need to take some time and understand the roots of the conflict to really understand what's going on. So let's talk about why GameStop is going to the moon and why Robinhood has taken some huge collateral damage. The trends that led up to this Nothing like the current situation with GameStop has ever happened. Judging by what happened this week, hedge funds seemed to think the scenario was as likely as your friend pulling all five pieces of Exodia on the first turn when you're playing Yu-Gi-Oh with him. It's important, however, to realize the trends that led to this war have been going on for a long time and only came together just this week. The democratization of finance For decades, the stock market was mostly for the old and the already rich. It's estimated that 84% of stocks are owned by the wealthiest 10% of Americans. There was a reason why it was hard for the middle and lower classes to get started. If you wanted to buy stocks forty years ago, you'd have to go into a physical brokerage and make trades through a broker, who'd make commissions off of every trade. In addition, it was pretty hard for the average person off the street to understand how to make informed investments and read a company balance sheet. Those days are done. Nowadays, apps like Robinhood make it easy for any user to get started with zero upfront commissions and a user-friendly interface that anyone could understand. These new platforms have helped to cut the investment gap between whites and African-Americans almost in half. It's also easier than ever for stock traders to share tips and tricks with each other instead of needing to rely on a financial advisor.  Forums like Reddit's r/wallstreetbets have millions of users and posters can break down their reasons for buying and selling different stocks. Anyone find the information they need to make informed investment decisions. A backlash against the elites  Anger at the elites has been building up steadily since the 2008 recession. When the economy crashed, the banks got a bailout from the federal government. Meanwhile, the millions of Americans who were unemployed didn't find anyone coming to save them. Feelings of anger and resentment at the upper classes were shared by both the right and the left. Donald Trump got elected president by promising to “drain the swamp” and saying that he wasn't a “typical politician”. On the Democratic side, Bernie Sanders got more votes and more attention in the presidential primaries than anyone thought a self-declared socialist could ever achieve by promising to fight income inequality. COVID-19 only amplified the anger people were already feeling. The pandemic has been terrible for poor Americans. The unemployment rate has been as high as 15% and it's estimated that 12 million Americans are on average $5850 behind on paying rent. On the other hand, the rich are doing just fine. The capital markets have gotten trillions of dollars from the Federal Reserve, which means the stock market has been hitting new highs even as millions of Americans remain unemployed. Meanwhile, normal people have gotten just $1800 in stimulus checks over the past 10 months. Sometimes when millions of working-class people are angry enough, they'll overthrow the government and start sending elites to the gulag like in Russia in 1917. We're not quite at that stage yet. Instead, retail investors took up the banner of class warfare on Reddit and Robinhood. u/deepfuckingvalue: The modern-day messiahIt's hard to believe that this whole thing started from a random post on Reddit. But that's exactly how it happened. About a year and a half ago, a Redditor named u/deepfuckingvalue (We'll call him DFV for short) posted a screenshot that showed that he dropped $100,000 on GameStop calls.   It was an incredibly risky trade for a few reasons. Retailers in general are dying because of eCommerce companies like Amazon. The video game industry specifically is starting to trend towards digital downloads. Most people believed that GameStop was headed for bankruptcy. Just like most other prophets who end up starting a movement, DFV was not well-received by the public at first. Most of the comments essentially called him a clown for betting so much on a struggling company. For some reason, DFV was unfazed by the initial negative reaction. Wiping the spit of the Pharisees off his face, he kept posting his updates about his GameStop calls.Eventually, DFV's posts started getting more attention. GameStop's stock price went through some wild swings during this time. At one point, the value of DFV's calls went up to $2 million. For some reason, he didn't sell. Redditors admired him for his persistence. The more DFV posted, the more Redditors realized that there was actually a solid case to be optimistic on GameStop stock. Former Chewy CEO Ryan Cohen bought a ton of GameStop shares and pushed the company to close down unprofitable stores and start making moves to win in eCommerce. Plus, a few hedge funds like Melvin Capital had aggressively bet on the failure of the company. All the right conditions for a short squeeze had been set up. Short squeezes explained Now is a pretty good time to explain why people short companies. It works like this: If you're confident that a stock is going to go down, you can make money by shorting it. Let's say there's a stock that's worth $5 that you're sure is going to go down to $1. What can you do is borrow 500 shares in this company and then immediately sell them off. If you're right and the price does go down to $1, you can then buy back those 500 shares and return them. You should come out with $2400 in profit.  Of course, shorting comes with a huge risk. If the price of the stock goes up, you're going to lose money because you'll need to buy it back at a higher price. Big increases in stock prices mean huge losses. If you short a stock that's originally $5 and then it goes up to $700 - you're pretty much fucked.If a lot of people have a short position on a stock and they see the price increasing rapidly, they might try to quickly buy back shares so they can return them and limit their losses. If many short-sellers do this at the same time, they'll push up the stock price even higher. That's a short squeeze. Short squeezes are not new - they've been going on for centuries. Way back in 1862, Cornelius Vanderbilt cornered the market on Harlem Railroad stock and engineered a short squeeze. What's different is that now rich dudes like Vanderbilt aren't the only people who can do this. While an individual trader might not have the type of money that Vanderbilt had, they can do something he couldn't: Get on forums like r/Wallstreetbets and encourage other traders to make the same bet. GME to the moon Earlier this week, Redditors started buying up more and more GameStop stock, which started the short squeeze and started pushing up the price to insane levels. Then, they started to get some help. Famous billionaires like former Facebook executive Chamath Palihapitiya and Tesla CEO Elon Musk both encouraged the short squeeze on Twitter. GameStop's stock price climbed higher and higher. Redditors who bought GameStop early were putting up unreal returns. DFV posted an update a few days ago on Reddit. His original position is now valued at $43 million. He's now pretty much the messiah on r/Wallstreetbets.  But at this point, buying GameStop stock was more than just about making money. It was about fighting a war against the same hedge funds who made all the rules and got all the money while regular people suffered. Retail investors who were betting on GameStop wanted to see the big institutions lose, and that mattered more than just making gains. It's important to remember that this narrative of retail investors vs. hedge funds isn't entirely accurate. There are big institutions on both sides of this trade. One of GameStop's biggest owners is BlackRock, one of the world's biggest hedge funds. Still, it's undeniable that retail investors did real damage to the hedge funds that were short on GameStop.Seeing what they did with GameStop, r/wallstreetbets decided to ride the hot streak. They found other stocks that had huge short positions like AMC and Blackberry and tried playing the same game. Very quickly, these companies' stock prices started increasing too. But on Thursday, something happened that changed everything. The suits strike back On Thursday, Robinhood and other trading platforms restricted the trading for 13 different stocks, including GameStop and AMC. Users could no longer buy these stocks - they could only sell them. That same day, GameStop's stock price tanked. Since Robinhood at first didn't make any kind of public statement on why they decided to do this, people speculated that Robinhood was doing a favor for its friends at the hedge funds. To understand why people drew this conclusion, it's important to understand how Robinhood makes money. When you buy a stock on Robinhood, the app doesn't actually execute the trade. It sells the order to a hedge fund that acts as a middleman, executes the orders, and takes a few pennies off of every trade. Over time, the hedge funds make pretty good money off this arrangement. A lawsuit filed by the SEC against Robinhood estimated that this practice cost users $34 million. A hedge fund called Citadel happens to be Robinhood's biggest customer when it comes to buying these orders. Citadel also put billions of dollars into Melvin Capital, GameStop's biggest short seller. If you make the obvious connection here, it's easy to see why Robinhood users were pissed off. Is there actually a conspiracy between Robinhood and Citadel? Robinhood and the other brokerages that restricted trading were met with pretty much universal condemnation for their actions. On Twitter, Congresswoman Alexandria Ocasio-Cortez called what the app did “unacceptable”. For maybe the first time ever, Ted Cruz agreed with her. Eventually, Robinhood CEO Vlad Tenev had to respond to the beating his app was taking online. He went on every news network that same night to say that there was no collusion and that Robinhood was just trying its best to comply with regulatory requirements. We don't have any proof that Citadel or any other hedge fund made a direct request to Robinhood to stop allowing traders to buy GameStop. Still, if Robinhood is telling the truth, they should've told users about what they were doing from the start. Plus, they handled it in the worst way possible. If the app restricted trading on the stock entirely instead of only allowing the option to sell, it wouldn't have looked like Robinhood was artificially trying to bring the stock price down. I'm not going to make any accusations here, but Robinhood unquestionably fucked up. At best, the app made a really stupid move without properly explaining why it was happening. At worst, it colluded with hedge funds to screw over its own users. The situation is even worse when you remember that Robinhood has been the preferred platform for young investors and the sorts of people who typically spend time on r/wallstreetbets. In the past, I've defended Robinhood by talking about how it's brought a whole new generation of investors into the market. But now, those same people are incredibly pissed off. The house always wins People are expecting GameStop stock to fall back to reasonable levels, but it hasn't happened yet. While I'm writing this, GameStop stock is still at $325. It's been estimated that so far, short-sellers have lost $19 billion. I have no idea how long this is going to go on. What I do know is that the 24 hours when brokers restricted trading of stocks like GameStop gave hedge funds time to close out their original short positions. I want to believe that a bunch of dudes on r/wallstreetbets can win big against giant hedge funds, but all the odds are against them. It looks like Wall Street is taking steps to ensure that a short squeeze will never be coordinated on forums like Reddit again. NASDAQ CEO Adena Friedman said that in the future, the exchange could restrict trading on stocks that have excessive mentions on social media. Friedman said that the purpose of this move was to avoid “market manipulation”. This is complete bullshit.  In this case, posters on r/wallstreetbets didn't spread false or misleading information - they just told other Redditors about the moves they were making. A few hedge funds took massive amounts of risk by shorting GameStop stock to an excessive degree - r/wallstreetbets noticed and took advantage. I don't see how that isn't just the free market at work. Meanwhile, hedge funds routinely get away with giving false information to the press just to make a quick buck. If you don't believe me, check out this video of Jim Cramer breaking down common manipulation tricks by hedge funds. The fact that the NASDAQ even feels the need to get involved only in this case proves r/wallstreetbets's point - the game is rigged. In conclusion I've heard a few people say the stock is going to come crashing down and retail investors are going to be hit the hardest. I'm not sure I agree. The long-term impact of this situation might be a big positive for retail investors. While Robinhood might have lost the trust of its customers, we can probably all still agree that its mission to “democratize finance” is a good thing. That's happening more than ever this week. Some of my friends bought stocks for the very first time during the GameStop War. None of them are betting their entire life savings, but many of them are just now starting to pay close attention to the market. r/wallstreetbets even had to go private for a few hours because they were having trouble dealing with all the new members. I'm really not joking when I say that u/deepfuckingvalue is a messiah. The GameStop War probably will end up bringing hundreds of thousands of new investors into the market, and all it took was a few hedge funds losing a few billion. Anyway, if you're looking to know more about business and tech, sign up for our weekly newsletter. We send one email on topics like this every Sunday. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

A while back, I visited a friend at his apartment. He didn't really have much furniture and his apartment could have been cleaner, but he was really proud of one thing he did have. We had this conversation: Him: Hey, check it out man. I got a HomePod. Me: Oh, nice! Him: Nice? That's what you're going to say to the owner of a HomePod? There's a reason why I wasn't that impressed. In case you don't know, a HomePod is Apple's voice-activated home device. While I usually like Apple products, even I got to admit Apple fucked up with that one. It's a solid product and it's got a great speaker, but it came out in 2018 - which was way too late in the game. Amazon's Echo, on the other hand, came out back in 2015, and now it pretty much dominates the smart home market. Anyway, you might be wondering why an online store like Amazon wastes time on something that seems so unrelated to its core business. Well, there's actually a pretty good reason for that. Let's talk about why Amazon invests so much into the home and why that might be a problem for customers. How Amazon can make your house smarter An Amazon Echo is a voice-activated device that you can use to play music, listen to Audiobooks, order pizzas, or ask questions - even if you're incredibly lazy and don't want to get out of bed. All you have to do is say something like “Hey Alexa, why did my girlfriend leave me?” You probably won't get an answer that fills the hole in your being, but the device will tell you something. Side note: I asked this to my Echo just to see what would happen. It said, “Sorry, I'm not sure.” Amazon's technology isn't just limited to its own devices - it's free-to-use for third-party manufacturers. Many of them were excited about the opportunity to make their devices voice-activated. Now, there are more than 140,000 products that work with Alexa such as lightbulbs and thermostats. But Amazon's ambitions didn't stop there. Back in 2018, Amazon bought the smart doorbell company Ring for $1 billion, which allows customers to look at who's at their door through their smartphone. It was another way for Amazon to ensure their dominance over the smart home market. Amazon's opportunity Back in September, Amazon had a product event that showed off some big improvements in Alexa. Now, it won't speak with the awkward pace that virtual assistants typically have. Instead, it can match the tone you're using and sound like it's taking more natural breaths and pauses. Also, Alexa now uses AI to make sure that when you ask it to do something like turn on a light, the delay is as short as possible. There's a reason why Amazon is investing so hard in improving the product. When the pandemic's over, our lives aren't going to be the same as what they were before. Companies all over the country are going to be more comfortable with hiring remote workers - which means people are going to be spending more time at home and less time at the office. When people like my buddy with the HomePod are spending more time at their apartments and realize how empty and dirty everything is, they're going to invest in upgrading their space. That's already happening in the home decor market. Right now, customers are making more purchases at companies like Home Depot and Restoration Hardware, which both saw big increases in their stock price in 2020. It's possible that these same customers will also invest in products that integrate with Alexa. What's Jeff Bezos's end goal? Even though the smart home market is growing, Amazon is just breaking even on Echos or even selling them at a loss. Obviously, Jeff Bezos isn't doing this out of the kindness in his heart. He's doing it because there's a couple of ways that the company can profit in the long-term. Making money on Amazon Skills Every time you buy an app on the App Store, a cut of the money is going to Apple. It's a highly-profitable business for them. 3rd-party app developers do the work. Then, Apple does a quick review to make sure there are no viruses and no way that the app can get around Apple's payment system. Once it's approved, Apple gets 30% of the revenue every time someone pays for the app. While Amazon's attempt to create a smartphone failed really badly, they did find a way to get in on this action with Amazon Skills. These are apps created by 3rd-party developers that integrate with Alexa. You can use these Skills to do things like play Jeopardy with your Echo device or order some pizza from Domino's. Just like Apple with the App Store, Amazon gets a 30% cut every time somebody buys a Skill on Echo. More personalization and more purchases  Part of the reason why the Amazon shopping experience is so great is that the company uses data to give customers more personalization. When you make a purchase off Amazon, you'll see recommendations for related products that can be scarily accurate. That happens because these recommendations are based on the data from the purchases of millions of other customers. Amazon knows exactly what customers with interests to similar you are buying and will recommend the same items to you. Alexa is an opportunity for Amazon to collect even more data. If Amazon has access to what customers are saying to their Alexa devices, they can better understand these customers' wants and needs. That means Amazon can make their recommendation engine even more personalized and push these customers to make more purchases. Plus, when you've got so many voice-activated devices around, it's easier than ever to make a purchase off of Amazon - which means more revenue for the company. All you have to do is say “Hey Alexa, I'm out of soap. Buy me some more.” Then, your Alexa device places an order on your Prime account. Amazon's even taken steps to encourage people to do this. For a long time, if you tried to buy Amazon products off of Alexa, it would give you cheaper prices than anything you could find if you just went on Amazon.com on your smartphone or laptop. It was a genius way of getting people to start making voice purchases a habit. The privacy concerns behind letting Amazon into your house Amazon devices might make it easier than ever for you to be lazy and never have to leave your couch, but some people are understandably pretty uncomfortable with the idea of a Big Tech company knowing what's going on inside their homes. This isn't some nonsensical conspiracy you heard from your buddy who's a hardcore Joe Rogan fan. Amazon has thousands of contractors who comb through voice and text transcripts of Alexa devices. While this does help Alexa deliver better responses over time, lots of customers don't want total strangers looking through personal searches and purchases. Some of these transcripts aren't wiped from Amazon's servers, even when a user deletes the conversations. That's not the only privacy issue that Amazon's faced recently.  Ring, Amazon's smart doorbell, took some heat recently for its partnerships with local law enforcement. The company is sharing the footage it gets from its cameras with police departments. That's an idea that sounds like a good way to stop crime on paper, but may just lead to mass government surveillance of private citizens. In conclusion Getting into the home was a fantastic move for Amazon. Now that it's happened, we all got to ask ourselves some questions. How close do we want our relationships with Big Tech companies to be? What kinds of regulations should we pass to protect our data? With people spending more time at home and more time with Alexa devices, it's becoming more important for us to figure out the answers. If you liked what you read, please sign up for our weekly newsletter. We send one email like this on tech and business every week. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

One time in college, I spent lunch trying to convince my roommate that 9/11 wasn't an inside job. If I'm remembering this correctly, he literally listened to one Joe Rogan podcast with Alex Jones and got into a weird social media rabbit hole after that. He was telling me that I had to admit there was a possibility the whole thing was a conspiracy, while also treating me like I was a sheep for not agreeing with him. To this day, I'm really not sure why he thought listening to one podcast and maybe reading a few Reddit posts made him smarter than every scientist in the world. Anyway, the reason why I bring this up is that social media is how 1 in 5 Americans get their news. What they see on Facebook and Twitter shape how they see the world. That means it's important to think about how these platforms regulate or don't regulate the content people see. So today, we're going to talk about a social media platform that had an alternative approach to regulating content and failed really badly. What is Parler?  There's a lot of incredibly stupid content on social media, but most of these posts aren't removed unless someone reports them and it's found that they actually went against the site's Terms of Service. Often, a human moderator has to make a judgment call on whether a post is bad enough to get taken down and even get the poster suspended or banned. A lot of the time, these judgment calls are tricky and require some degree of subjectivity. Somebody who tweets something like “One week in quarantine and I already want to kill my roommate” might be an actual insane person making violent threats or just a normal dude venting. It's up to the moderator to try to figure it out. For a long time, Republicans have hated the big social media companies for a simple reason: The majority of employees at companies like Facebook and Twitter are highly-educated and live in Silicon Valley, which means they're usually liberal. That means when moderators are making judgment calls that relate to politics, they're more likely to be biased against conservatives.So conservatives decided that instead of posting on liberal social media platforms, they'd create their own site: Parler. It was supposed to be a free-speech alternative to platforms like Twitter that would allow users to post anything that was allowed by the First Amendment. The platform took off after several big-name conservatives like Ted Cruz starting using it. Now, it's estimated that Parler has around 4 million monthly active users. That's pretty small when you compare it with Twitter's 330 million monthly active users and Facebook's 2.2 billion monthly active users. But still, it's a pretty sizable number of people. But in the past couple of weeks, something happened to Parler that put its entire future at risk. Big Tech bans Parler This month, Parler got banned from both the App Store and Google Play. Amazon's AWS, which hosts most of the Internet, stopped allowing Parler to use its services. Why did all these companies feel the need to stop doing business with Parler? Much of the violence that took place on Capitol Hill on January 6th seemed to have been planned out on the platform. One of Trump's lawyers, Lin Wood, even used Parler to call for Vice President Pence to be brought in front of a firing squad and executed (He later tried to claim that this was just a metaphor). Big Tech said that Parler wasn't taking the right steps to curb this violent content. As you probably would expect, conservatives absolutely hated this move and said that it was Big Tech working together to suppress free speech. Here's a comment I found under a random YouTube video. Alright, let's ignore the awful grammar and the random Caps Lock. We got to ask ourselves a couple of questions: Is this YouTube Boomer actually right? Is Big Tech banning Parler a sign that we're moving towards an authoritarian society with Mark Zuckerberg controlling the media? Why Big Tech suspending Parler is totally valid While Parler claimed to be a free-speech platform, it actually censored users just like Twitter did. There were plenty of users who got banned from Parler, most of whom seemed to be left-wingers who showed up specifically to make fun of conservatives. The dudes on Parler were trying so hard to fight the system that they became the very thing they hated the most: snowflakes in a safe space. The fact that Parler was willing to ban people shows that it wasn't really a “free speech” platform. The company had a content moderation strategy: It was just really shitty. So Big Tech banning it until it could come up with something better is completely valid. Apple's CEO Tim Cook even said that Parler was just temporarily suspended from the App Store until it could show that it could properly moderate posts. We should also keep in mind that Big Tech had a perfectly legitimate complaint here. Again, Lin Wood's comment about Mike Pence was a clear incitement to violence, which is the type of speech that isn't protected by the First Amendment. It's especially clear that it caused real damage when you have videos of rioters who were literally chanting “Hang Mike Pence”. The free market means that businesses are free to associate with whoever they want, and in this case, it's pretty clear Parler could have taken more action. Can the free market save the world from Mark Zuckerberg? Look, I'm going to try to compromise with the YouTube commenters here. Mark Zuckerberg pretty much has unaccountable power over what billions of people see every day, and it's totally valid to be worried about that. It's also totally valid to try to build alternative companies to try to break the monopoly Big Tech has on the public discourse. Of course, if you're going to build a “free market” solution, you have to make sure it's actually a good product. Parler was not a good product. Before it was kicked off AWS, some hackers downloaded almost every post that was ever posted on the platform. This wasn't some insanely technical hack that took a lot of skill to accomplish. It only happened because Parler didn't take basic steps to protect user security.  The problem here seems to be that most of the people who joined Parler were mostly motivated by hatred of Big Tech liberals. That by itself isn't enough to create a successful social platform. A famous article from Harvard Business Review said that in order to get customers to switch, new products have to be 9x better than what's already on the market. I'm not saying there can't be an alternative social media platform for conservatives, but it's got to be based on something more than just pure resentment. Every successful social media network of the past few years allowed people to connect in new and interesting ways. TikTok made it easy to sit back and let an algorithm show you funny videos from people all around the world. Snapchat made it easy to send disappearing posts to your friends. Because you couldn't do the same thing before these two platforms existed, you could say that they were both 9x better than the competition. On the other hand, Parler was just a shittier version of Twitter.  What can we learn from Parler? Whether you're on the right or the left, nobody should be comfortable with the amount of power that Mark Zuckerberg has over the public discourse. While it's true that the First Amendment is meant to apply to the government and not private businesses, we're living in a new era. There used to be thousands of newspapers with different views all over the country, but most are dying. Now, it's just a few platforms that shape people's perceptions. As a society, we need to figure out a solution to this problem. Maybe it'll come from government regulation. Maybe it'll come from alternatives emerging on the free market. But it probably won't come from Parler. If you liked what you read, sign up for our weekly newsletter. We send one newsletter about tech and business every week. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

About a week and a half ago, I took some days off work and went through all of The Mandalorian on Disney+. Even though I grew up on Star Wars, I had low expectations because the sequel trilogy was incoherent garbage. I didn't even bother to watch the last one, but I read the plot summary on Wikipedia and it seems like it makes 0 sense whatsoever. But The Mandalorian actually turned out to be the best show that I've watched in a long time. It was so good it actually made me get back into the Star Wars universe again and I started watching the animated Clone Wars TV show that used to be on Cartoon Network (you can actually find the whole thing on YouTube). Obviously, it's not just me who got on the bandwagon. The Mandalorian is one of the biggest shows of the past couple of years, with Baby Yoda memes all over social media. This one show helped to put Disney+ on the map. While streaming companies like Quibi crashed and burned within six months, Disney+ is killing it with 86 million subscribers.  Netflix didn't get those types of numbers until 9 years after it first launched streaming. Still, even though I love The Mandalorian, I was honestly pretty confused as to why Disney+ was doing so well. I scrolled through every other TV show and movie the platform had and there wasn't really anything else I'd want to watch. But the more I thought about it, the more I realized I was missing the point. Cheap prices: Good for customers and good for Disney First off, we've got to remember that one reason that Disney+ took off the way it did was that it's cheap. Right now, a monthly subscription is only $6.99. Disney also had a few promotional deals when the service was just getting started. If you used Verizon, you would get six months of Disney+ for free. If you signed up before the launch on Disney's site, you could get 3 years of Disney+ for $3.25 a month. Meanwhile, a Standard Netflix subscription is currently worth $13.99. You might be wondering how Disney even makes money when it's prices are so low. The answer is that Netflix and Disney are two entirely different companies. Netflix is a streaming business. Their revenue comes almost exclusively from subscriptions. To grow, they either need to raise prices or gain more subscribers. But Disney is an empire. Streaming is just a small part of a much larger business. In 2019, the segment “Parks, Experiences, and Products” - which includes hotels, cruise ships, toy lines, and comic books - produced 40% of Disney's total revenue.  At the end of the day, Disney+'s purpose isn't to make money on streaming. It's just a way to support the part of the business that's generating more revenue. Low prices make sense because what's really valuable for Disney is direct access to fans. Once someone is signed up for Disney+, the company can see the shows they're watching and send them relevant offers like trips to Disneyland or Spiderman toys for the kids. Disney's advantage: The biggest entertainment franchises in history But obviously, low prices alone don't explain why Disney+ has been so successful. After all, Quibi offered users a 3-month free trial and still managed to shut down in 6 months. To really understand Disney+, we need to remember that Disney owns the biggest entertainment franchises the world has ever seen. Disney bought Marvel Entertainment and Lucasfilm for $4 billion each, giving them the rights to the Marvel Cinematic Universe and Star Wars. This intellectual property gives Disney a huge advantage when compared to competitors. In 2019 alone, Netflix released 371 original TV shows and movies. But obviously, only a small percentage of those releases end up having a real cultural impact. For every Tiger King, there are probably 10 garbage shows that you've never heard of. Side note: Not really related, but I never got the hype about Tiger King. If I wanted to see some rednecks going around saying stupid shit, I'd watch footage of the Capitol Riots. But there are tons of loyal fans out there who'll watch anything in the Star Wars or Marvel Universe. In the next year and a half, Disney is going to release shows about characters like Boba Fett, Hawkeye, Obi-Wan Kenobi, and Loki. Anyone who ever liked Star Wars or Marvel will probably at least want to check them out. That means it's way more likely that these shows will be culturally relevant than new shows on Netflix which are based on new concepts and don't have existing fanbases. Plus, Disney's empire is so big that it can also keep you engaged with the universe in other ways. If you're a Star Wars fan, Disney+ can ask you if you want to buy some Star Wars games, some Star Wars comics, or some tickets to a Star Wars theme park. Disney+ isn't really for guys like me I might not really be that impressed when I'm going through Disney+'s library, but that doesn't really matter. I'm probably not in Disney's target market right now. But I might be ten years from now if I have kids. Like I said earlier, Disney+ doesn't have that much content, especially when you compare it to Netflix. But what Disney+ does have is every Pixar movie and almost every Marvel movie. If you're a parent who's tired of taking care of your kids and you just want them to shut up for a while, there's more than enough material they can go through. That's why around 50% of Americans who use the Internet and have children under 10 are subscribed to Disney+. If you compare Disney+ to what parents had to spend for home video when I was a kid, it looks like a great deal. Back then, my parents had to buy VHS tapes to keep me and my sister quiet. In the 90s, just buying a tape for one new movie used to cost around $20. So paying $6 a month for unlimited access to Disney's existing content library as well as instant access to any new TV shows and movies really isn't that bad. In conclusion  Disney spent a lot of money to acquire the most profitable entertainment franchises in history. Right now, they have a platform that pretty much gives you all the content you need if you're a parent. Pretty soon, it will also have all the content that a Star Wars dork like me would need. If you liked what you read, sign up for our weekly newsletter. It's tech and business for regular dudes, delivered to your email every Sunday. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

The year's almost over, which means it's a good time for you to reflect on everything that happened since January 1st. Because I'm not your therapist, we're not going to reflect your friends or your relationships or any bullshit like that. Instead, we're going to talk about how Big Tech has become more dominant than ever in 2020 - and what that means for the world. Big tech is more powerful than ever Facebook, Amazon, Apple, and Google already looked insanely powerful before COVID. Each one of them only became more valuable during the pandemic. Let's talk about why each one of these companies got more powerful this year. Facebook: When people can't spend time with their friends, they spend more time aimlessly scrolling through their feed. As a result, Facebook's usage and ad revenue have gone up in the past few months. Amazon: Obviously, when people are scared of shopping in-person they're going to spend more time shopping online. Plus, Amazon's cloud computing business AWS helps power platforms like Netflix and Zoom, and their service became more essential as these companies grew over the last few months. That's part of the reason why Jeff Bezos got $90 billion richer during the pandemic. Apple: iPhone sales went down last quarter, but more people staying home also means more people are buying Macs and iPads. The company also released its Apple One bundle which means you can pay a subscription for Apple Music, Apple TV+, and Apple Fitness+ in one place. (When this was announced, Spotify immediately complained that Apple was abusing its dominant position in the market)Google: At first, the pandemic caused Google's ad revenue from search to go down for the first time ever. But the company quickly rebounded. Last quarter, YouTube had more advertising revenue than ever. Also, Google Cloud (Google's version of AWS) grew 44% year-over-year. Why the domination of the big four matters Why does any of this matter for you? Well, these four companies hold massive amounts of power both over the public conversation and the fate of millions of small businesses. Let's take Facebook as an example. In addition to the core Facebook platform, the company also owns Instagram and Whatsapp. The three apps together have about 3.14 billion monthly active users. That's about 40% of the world's population. Facebook also has unprecedented power over the public conversation. Since 52% of Americans get their news from Facebook, their algorithm plays a big role in shaping people's opinions on news and politics. What's makes this scary is that Mark Zuckerberg has unchecked power over Facebook. For most companies, the shares that are available to the public give you voting rights that allow shareholders to vote on decisions that companies are making. But Facebook has a dual-class structure. What that means is that the company's founders hold all the voting rights. So Zuckerberg basically holds the keys for what billions of people around the world see in their News Feeds.But it's not just Facebook that has that kind of influence on the world. 28% of Americans say that they get their news from YouTube as well. Meanwhile, millions of small businesses rely on the Amazon marketplace, the Apple App store, and Google Play to reach customers. More power, more problems The more powerful you get, the more people pay attention to you. And in 2020, more people are paying attention to Big Tech than ever before. The documentary The Social Dilemma highlighted issues on how social media platforms are causing teen girls to cut themselves at higher rates than ever and helping to radicalize young men. Meanwhile, politicians like Bernie Sanders specifically took aim at tech executives like Jeff Bezos for making billions of dollars and underpaying workers while much of the country was struggling and unemployed. While people usually expect Republicans to defend corporate power in times like these, Big Tech even managed to piss them off. Since most of the people who work for tech companies tend to be liberal, right-wingers complain that Facebook and Twitter actively silence conservative voices. After Twitter started putting warning labels on Trump's tweets this year, Trump tried his best to get rid of the protections that allow social media companies to moderate their own content. In years past, anti-tech sentiment pretty much led to nothing except angry social media posts from dudes who were mad that their Twitter account got banned. But now, the government is taking action. Both Google and Facebook have been hit with antitrust suits. While these typically years to resolve in the courts, it's a sign that times are changing and that one way or another, these companies are going to be regulated. What should we do about Big Tech? Whether it's rising rents, your favorite political candidate losing an election, gentrification, income inequality - everyone somehow finds a way to blame Big Tech for their problems. The most ridiculous example of this is Republicans and Democrats both claiming that Mark Zuckerberg is a puppet for the opposing party. It's easier to just say that it's Facebook's fault instead of admitting that the candidate you ran just sucked. That's not to say that there are no problems with these companies and they shouldn't be regulated. We talked earlier about how Facebook's dual-class shareholder structure means that Mark Zuckerberg has huge amounts of unchecked influence over what billions of people see on their News Feeds. As Kanye once said, no one man should have all that power. Still, if we want to have good regulation, we need to take time to identify what the real problems are instead of using tech companies as a punching bag for our frustrations. I might sound like a brainwashed corporate drone here, but let's be real: It's easy to be negative about these companies, but we all use them every day. I write these articles on my MacBook Pro, and I do all the research through Google. I promote this newsletter through Instagram, and I bought my podcast mic stand on Amazon. The fact that these companies are such a big part of our lives means that it's important they're regulated, but it's also important that these regulations are done carefully. In conclusion 2020 might have been good for these four companies, but we all know it sucked. But let's look on the bright side. If you managed to avoid catching COVID or getting your house burned down in a California wildfire, you did well. If one or both of those things happened to you, you still managed to stay well enough to read this newsletter, so I guess that's still a win. Anyway, thanks so much for being a subscriber and supporting this newsletter in this shitshow of a year. See you in 2021. If you liked what you read, please sign up for our weekly newsletter. We send one email like this every week. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

I first downloaded Robinhood back when I was in college and I told one of my friends that I wanted to get into investing. I'm not sure what inspired me to do that because back then I barely had any money and I barely knew anything about business. I'm pretty sure I was intending to YOLO all my money on Tesla stock as soon as I had some (I didn't do this, but it would have been a good decision). Anyway, my friend told me that he knew about an app that was founded by two college kids that were sick of brokerage companies screwing everyone with commission fees. He said if I signed up with his referral link, we'd both get a free stock. So, I decided to check it out. If you ever watched Silicon Valley, you know that every startup in the world, no matter how stupid their business model, somehow finds a way to talk about how they're “changing the world”. But I can say that the decision to download Robinhood actually did change my life. I probably wouldn't have as much money saved up as I do now, I probably wouldn't have started reading so much about business and tech, and I probably would never have started writing this newsletter. I'm bringing this up because recently, Robinhood has faced a lot of controversies. Just this week, the company got hit with a fine from the SEC and a lawsuit from the Massachusetts Security Exchange Division. So today, we're going to talk about this legal action - and ask whether Robinhood has been a good thing for the world in general. How Robinhood changed the game Robinhood was founded by two former Stanford students back in 2013. The app's goal was to “provide everyone with access to the stock market, not just the wealthy”. From the beginning, Robinhood did things differently than other apps that allowed you to buy or sell stocks. While most brokerage companies targeted their advertising towards Boomers who were more likely to already own stock, Robinhood targeted millennials who probably didn't know anything about trading beyond what they saw on Wolf of Wall Street. While apps like E-Trade charged users every time they bought or sold a stock, Robinhood had zero commissions. Robinhood's strategy paid off, and the app started growing quickly. By 2016, Robinhood had a million users. By 2019, pretty much every brokerage company out there was forced to eliminate commissions to compete. The app's growth accelerated even faster after COVID hit and dudes who couldn't bet on sports anymore decided to try betting on the stock market instead. In the early part of 2020, Robinhood added 3 million new users in just 4 months. Robinhood has made investing easier than ever before. Back in the 1980s, you'd have to physically go into a brokerage company if you wanted to make a trade. Now, anybody can get started just by downloading an app on their phone. But making trades this easy does come with negative consequences - and being a big company means that you're going to get some attention from government regulators. How Robinhood got in trouble with the SEC This week, the SEC fined Robinhood $65 million for misleading users about how it made money. For a while, Robinhood used to tell users it made money mostly from premium accounts. But it's been estimated that 80% of the money that the app makes comes from “payment to order flow”. If you have no idea what that means, it works like this: Robinhood takes the user's stock order and gives it to a trading firm. The trading firm then makes the trade, buying the stock at a slightly lower price than what users pay. Robinhood then gets a cut of the profit the trading firm makes. While users might just lose a few pennies per trade, this makes a big difference over time. The SEC estimates that this practice cost Robinhood users around $34 million. Robinhood was supposed to change the game because it was the first app that offered zero commissions for trades. But “payment to order flow” is basically the same thing as commissions, except users didn't know about it. For a long time, Robinhood didn't tell users they were doing this. For years, nothing about “payment to order flow” could be found on Robinhood's website. It was like your little brother telling you he bought a new skateboard with money from your parents when he was actually stealing from your wallet when you weren't looking. Why Robinhood is getting sued by Massachusetts In addition to getting fined by the SEC, Robinhood also got sued this week by the Massachusetts Security Exchange Division. Their suit makes a few different accusations against Robinhood. It says the app uses young actors in its commercials to attract inexperienced investors.  It talks about how Robinhood showing confetti on the screen after every trade is completed makes investing seem like a game.The suit did point out some real problems with the app, like how investors with zero experience often get approved for options trades. This isn't the first time Robinhood has gotten in trouble for this. A few months ago, a 20-year college student named Alex Kearns started using Robinhood because he was interested in trading. After a series of risky options trades, the app told him he had -$730,000 on his account. Alex was confused as to how the app even let him lose that much money. Horrified that he was going to be in massive debt forever, he took his own life. The most fucked up part of this was that Alex wasn't even in debt for that much money. It was just an error on the app's interface. The death of Alex Kearns is a horrific tragedy, and it's a horrific failure by the team at Robinhood. To be fair, the company did all the right things after it happened. They reached out to Alex's family, made changes to the app's interface so that kind of confusion wouldn't happen again, and upped the requirements for getting started with options trading. But obviously, this never should've happened in the first place.  I can't defend Robinhood for the lies and mistakes like these. But I do think that some of the complaints in the Massachusetts suit are just Boomers not understanding the app. Defending Robinhood from the Boomers For years, the stock market has been the territory of the old and the rich. That's part of the reason why you'll hear Bernie Sanders talking about how stocks going up doesn't really matter, because the stock market isn't the economy. It's been estimated that 84% of stocks are owned by the wealthiest 10% of Americans. Robinhood is starting to change that. I'm sure many of us have friends who want to invest, but just have no idea where to start. It totally makes sense: buying stocks is intimidating at first. You have no idea what makes a stock go up or down, or what an index fund is and why that might be better than buying an individual stock, or what a P/E ratio is. Traditional brokerage apps didn't really have a good solution to this problem. E-Trade's interface looks incredibly boring and intimidating to anyone who's never invested.  On the other hand, Robinhood is simple. I can show the app to a friend who's never used it before, and they can understand it right away. That makes it more likely that new users can get started on the app and start building wealth over time. The fact that Robinhood is so easy to use means that people who typically wouldn't invest are coming into the market. For years, fewer African-Americans and Hispanics owned stocks than their white counterparts. But apps like Robinhood have cut that gap in half in the past four years. So before we throw accusations that Robinhood is manipulating its users, we should remember that making it easy for new investors to get started is a good thing. What one person might call “manipulation”, another person might call “making the app less intimidating for beginners”. Also, it seems like a huge stretch to say that seeing some digital confetti on your screen is going to make you addicted to day trading. I'm also not sure why it's so wrong to market the app to young people. At the end of the day, these are grown adults who are responsible for their own financial decisions. I can tell you right now that every person I know who trades and is my age does it through Robinhood, and most of them got started because of the app. The vast majority of them are making responsible investments and aren't blowing money on options trades. In conclusion Robinhood's public profile is higher than ever. The company's planning to go public next year with a rumored valuation of more than $20 billion. That means that it's going to get more scrutiny from the media and from government regulators, some of it for good reason, and some of it just because it's so different than how people traditionally invest. But look: even with all the controversy, it's still the easiest way to get started buying stocks. I doubt any of my friends are switching away from it any time soon. If you liked what you read, please sign up for our weekly newsletter. We send one article like this every Sunday. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

For years, people across the political spectrum have called for a break-up of Big Tech. Those cries were mostly ignored, much like the advice everyone gave to you about your first girlfriend. But now, without anyone wasting money on a 6-hour Greyhound to see someone who doesn't want them, it looks like this breakup might actually be happening. This week, the Attorneys General of 46 states plus Guam and the District of Columbia filed an antitrust suit against Facebook. The suit alleges that Facebook has been participating in anti-competitive practices and seeks to break up Instagram, Facebook, and Whatsapp into separate companies. If Mark Zuckerberg's face was capable of displaying human emotion, he'd probably look just like he did at the end of “The Social Network”: totally destroyed. Just a few years ago, Facebook bought Instagram for $1 billion and Whatsapp for $16 billion. Now, it's possible that the government might undo both of those purchases.Now look, this is a complex issue. Much like a divorce, it's going to take many years and a lot of money in legal fees for this to get resolved - and probably some family counseling for the kids.  So today, I'll just focus on one thing: Facebook's acquisition of Instagram back in 2012. Let's talk about how the deal happened and whether it was a good thing for us, the consumers.Mark Zuckerberg's billion-dollar power move Back in 2012, Facebook bought Instagram for $1 billion. Nowadays, it's easy to look back with rose-tinted glasses and say that Facebook got a steal at that price. After all, Instagram generated $20 billion in revenue in 2019 alone. But back then, most people thought this acquisition was an incredibly stupid move by Mark Zuckerberg. It was like playing To Pimp A Butterfly to a room full of sorority girls: nobody got it. On Verge's discussion portal, a commenter named Cybergrimes wrote “how does a company that has never made a dime sell for 2x its recent valuation? I just don't get it.” It makes sense why there was so much confusion: No mobile app had ever been valued at a billion dollars before. At the time, Instagram was growing fast, but it wasn't making any money and only had 13 employees. But when it comes to social networks, there's a winner-take-all effect. The company that ends up getting the most users early on is the one that wins. The whole point of using social media is to connect with your friends, and nobody is going to switch away from an app that all their friends are using unless somebody offers a significantly better experience.By 2012, Instagram was the dominant photo-sharing app built specifically for mobile devices. By the time Zuckerberg got there, hundreds of thousands were already posting their boat shoes and G-shock watches on the feed. With Facebook's infrastructure behind it, Instagram was in a great position to be the dominant app in its space. By making the acquisition, Zuckerberg positioned Facebook to win in a whole new category and eliminated a potential competitor. Nowadays, people argue that the government should not have approved the deal. But the FTC probably couldn't have blocked the acquisition even if they wanted to.  In the United States, antitrust laws are enforced if it can be proven that there's going to be a negative effect on consumer welfare through price, quality, or innovation. But proving there's going to be negative effects on quality and innovation is pretty hard to do in a court of law since there's some degree of subjectivity involved in both those factors. So usually, antitrust cases focus on price.  Facebook wasn't raising prices on anybody, since both Facebook and Instagram were free. It looked like the government really didn't have much of a case. But it's possible that just like children growing up with overbearing parents, there was real damage for the customer. It just wouldn't be apparent until years later. How Instagram has changed When the acquisition was first made, Mark Zuckerberg promised Instagram CEO and co-founder Kevin Systrom independence. Systrom was told that he would be able to do what he wanted with Instagram with minimal interference from the Facebook team. But as time went on, Zuckerberg started tightening his grip and taking more and more control. Eventually, Systrom and his co-founder Mike Krieger ended up leaving the company in 2018 because they realized that they didn't really run Instagram anymore.  This mattered for one reason: Systrom and the original Instagram team envisioned the app to be very different from Facebook. While Facebook always sent notifications to users to get them to use the platform more, Systrom didn't want to annoy users and resisted doing the same thing. Facebook is always trying to add new features and nowadays has a fairly complicated platform, with Groups, Pages, Events, Dating, and much more. On the other hand, Systrom always tried to keep things as minimalist as possible. If you use Instagram regularly, you might have noticed a change in the past couple of years after Systrom left. The app now sends significantly more notifications. It's also a lot more complicated than it used to be, with separate tabs for Instagram Reels (a rip-off of TikTok) and Instagram Shopping. How the acquisition hurt usersSpeaking as a consumer, I really wish that Systrom had stayed the CEO of Instagram. The constant notifications are very annoying, and the Shopping and Reels tabs feel like a huge diversion away from what the app was originally supposed to be. Part of the appeal of Instagram was that it was so different from Facebook. But now, Zuckerberg is using the same tactics for both apps, making them more complicated and using cheap tricks to get people to use the platforms more. Instagram was a very different type of social network than what existed previously. But now, customers have less choice in getting the kind of social media experience they want, since both of the apps are more similar than ever. In an alternate universe where Instagram was never acquired, maybe we would have a more diverse social media ecosystem today. Is Instagram going to become a separate company? So at this point, we should ask the question: Will the government be successful in breaking up Facebook? Enforcing antitrust law is pretty difficult in the United States compared to other countries. You need to prove that “consumer welfare” was hurt, and again, that's not easy to prove in court. There's no way we'll ever know for sure what the world would've looked like if Facebook never bought Instagram. Zuckerberg would probably say that Instagram would not have become what it is today without Facebook's help and that the acquisition actually benefitted users. After all, other social networks that were popular at the time like Tumblr fell apart within a few years. Personally, I think Instagram is a great product that would've been successful regardless, but there's no way I can prove that beyond a reasonable doubt. But look: Even if the government is successful in making their arguments, breaking Facebook and Instagram up into separate companies is going to take a very long time. Antitrust cases can take many years to resolve. Plus, Mark Zuckerberg has already taken defensive action. If you've used Instagram recently, you've probably noticed that the app keeps asking if you want to integrate Instagram messaging with Facebook Messaging. When all these platforms are tied together, it's going to be a lot harder to separate them. It's yet another power move by the greatest evil genius of our generation. If you liked what you read, please subscribe to our weekly newsletter. We send one article on business and tech every Sunday. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

Disclaimer: Please do not make investment decisions based on these newsletters. Also here's a summary if you're too lazy to read. Summary Right now, Palantir has become the favorite stock of r/wallstreetbets and is doing great. The company is dedicated to working with government agencies to protect Western values around the world. Activists think the company is evil for working with police departments and ICE. Palantir CEO Alex Karp believes that policy decisions should be made by courts and voters, not for Silicon Valley. Part of the reason Palantir has become a meme stock is because of its science-fiction aesthetic. Palantir to the moon. If you're like me and you browse r/wallstreetbets when you're bored, you might have noticed that the subreddit has a new favorite stock: Palantir. It's interesting because just a few months ago, this was a company that pretty much nobody knew about. But now, the company's stock is killing it. It went public at $7 back in September and it's now trading at $23. If you bought this stock back then, congrats. I wish I made that move. Anyway, let's talk about what Palantir is and why the stock has become so popular. What is Palantir? Palantir was a company co-founded by former PayPal CEO Peter Thiel, who realized that the same software that was used to detect payment fraud from Russian gangsters could also be used to fight terrorism. On paper, Palantir was meant to help government agencies model and analyze data and prevent the next 9/11 from happening. The company has been working with the government from the start. One of the company's first outside investors was the CIA. Palantir's platform was used to map out terrorist cells in Iraq and Afghanistan that soldiers previously had to draw out by hand.  It's also been rumored that the company's software was used to help catch and kill Bin Laden.But Palantir doesn't just go and work with any government that wants to use its platform. The company's mission is to give America and its allies the technology they need to win wars and protect Western democracy. It doesn't sell its software to countries like China that are opposed to American interests.On the other hand, Palantir does work with private companies. The same software that's used to find terrorists can also be used by big businesses to spot unusual patterns in their datasets. For example, Chrysler uses Palantir to identify potential problems with their car parts. In recent years, Palantir has done well in both the public and private sectors. In 2019, Palantir put up $742 million in revenue. But the company also faced one big problem: public perception. Why people think Palantir is evil Palantir's work with the government has made the company pretty controversial. If you're worried about law enforcement abusing power, you should probably be scared that cops have access to Palantir's software. Palantir helps law enforcement agencies collect information about suspects more easily than ever. Cops who use the company's tools just have to type in the suspect's name to find information like bank accounts and family relationships. By looking up their license plate number, they can get an idea of the suspect's travel history. While some people probably would argue that it's good for law enforcement to have the best technology available, it is scary to imagine a future authoritarian regime having access to this information. Palantir also works with Immigration and Customs Enforcement, probably the most controversial government agency out there. The company's tools have been used to catch and deport undocumented immigrants. Even when Palantir was hit with protests by both outsiders and its own employees about this, the company doubled down and renewed its contract with ICE. Since most people who work in tech tend to be liberal, tech companies often refuse to do this kind of work. After the protests over police brutality this summer, Amazon put a one-year pause on letting police departments use its facial recognition tool. But Palantir isn't a typical tech company. Palantir's CEO Alex Karp has said over and over in interviews that he doesn't agree with everything the US government does. But he's also said that these issues should be decided by voters and courts and not by a few engineers in Silicon Valley. So he refuses to cancel Palantir's contracts and bow down to pressure from activists.  In a time when more and more people demand that companies take stands on social issues, that's a controversial opinion. But the controversy hasn't stopped Palantir from becoming popular with Robin Hood traders. How did Palantir become a meme stock? For reasons that nobody fully understands, certain stocks just become super popular with the youth and Internet culture. Tesla is probably the best example of this. While the company has a great product, Elon Musk has also spent a ton of time cultivating his public image with really stupid memes on Twitter. That means for many kids who are just downloading Robin Hood for the first time, Tesla's the first stock that they buy (I also did this when I first downloaded Robin Hood). Tesla's popularity with retail investors is part of the reason why the company's stock price has gone up by almost 800% in the past year. So why is Palantir's stock also so popular? There are definitely multiple reasons for this. One of them is that Palantir has a big opportunity because of COVID-19. The company's software is going to be used to help set up vaccine distribution networks across America. But I don't think that's the only reason why Palantir's stock is going to the moon. We're all human beings and we all make decisions for stupid reasons. It's just like how Elon Musk's tweets make him seem like a fun, relatable bro. The kind of data analytics that Palantir helps law enforcement do is the kind of shit you would see in movies like Minority Report. That makes it a cool stock to own. That doesn't mean that Palantir isn't a solid company. All it means is that kids with Robin Hood accounts are probably more excited about owning Palantir stock than some Boomer company like AT&T. In conclusion Tensions with China are rising. Tech workers in Silicon Valley are becoming more activist than ever. More and more young people are downloading Robin Hood and trading stocks. I have no idea what the end game for all these trends is going to be. But Palantir is right in the middle of all of them, and right now the company is thriving.Anyway, if you're looking to learn more about business and tech, sign up for our weekly newsletter. We send one email on topics like this every Sunday. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

Disclaimer before we get started: I own stock in Facebook and Google. Also, this article turned out longer than usual. If you don't want to read the whole thing, you can read the summary, or hear me read it out on Apple Podcasts and Spotify. Summary I listened to a Freakonomics podcast that talked about why digital ads might not be effective as people think. It was really misleading. Ads from Facebook and Google provide better audience targeting than what existed in the past. While big brands like eBay might not benefit from paid ads, Freakonomics should've tried to look at small businesses and startups. Despite what an expert quoted on this podcast says, Facebook and Google make it really easy for businesses to track the results they get from ads. The same expert acts like he's smarter than the entire marketing industry while he cites facts that everyone in the marketing industry knows. Does advertising really work? The other day, a friend sent me an episode of the Freakonomics podcast titled “Does Advertising Actually Work?” It talked about how digital ads on Facebook and Google might not be as effective at helping businesses attract new customers as people think.If the premise of this podcast is right, there are big implications. It means a lot of businesses are wasting their time trying to optimize ads that have 0 impact on anything. It also means that Facebook and Google are probably hugely overvalued since the vast majority of their revenue comes from advertising. I listened to the podcast and thought it was well-produced and definitely made some interesting points. But I also thought it was incredibly misleading. So today, I'm going to talk about what the Freakonomics podcast got wrong about the digital ad market. We'll also discuss how digital ads work and how they're used to help businesses attract customers. How digital ads work Before the Internet, businesses might have advertised themselves in newspapers or billboards, because those were the best way to reach potential customers.  But Facebook and Google offered something that these mediums didn't have: targeting. For a better idea of how targeting works, imagine that you're a UFC gym who's looking for new customers. You could buy newspaper ads, but chances are that most people who see them probably have 0 interest in your product anyway. But digital ads can make sure that you're reaching potential customers who would be most likely to actually come to your gym.  You can use Facebook Ads to target males 18-25 in your area who like MMA. The ads will then show up in the News Feeds of these users. Google Ads also help businesses reach targeted audiences, but they work slightly differently. For example, if someone in your area is searching for “UFC gyms near me”, you can buy an ad to show up on the top of Google's results. Since most people don't go past the first page of search, it's an easy way to make sure that your business is immediately visible to interested customers. The shitty ad company that worked with eBay The podcast starts off with a story of a UC Berkeley Economics professor, Steve Tadelis, who did some work with eBay. He talks about a time when he was on a call with a paid search consulting firm that worked with eBay. He eventually figured out that the consultants were just using jargon to hide the fact they had no idea what they were talking about. When he tried asking them questions about some of the terms they were using, they pretended that the call was breaking up to avoid answering.  This is a pretty hilarious story. Without a doubt, there are definitely scam artists in the paid search game. Almost all the YouTube ads that I get are some random dudes telling me that I can be a millionaire if I just take their course on Facebook Ads. But beginning the podcast with this story makes it seem as if the entire paid search industry is made of scammers. There are lots of people who've used paid ads to drive real results for businesses. It's no different than me making a podcast called “Can music festivals be trusted?” and starting it off with a story about Fyre Festival while providing no counterexamples. It's pretty misleading for someone who doesn't know about the industry. The eBay study on digital ads After Tadelis shares his story about the scam consulting company, he talks about a study that eBay did to measure the performance of their search ads. The company turned off all their keyword-search ads on Bing and saw that there was a very low effect on overall sales. With no context, this seems like solid evidence that paid ads might not work at all. Why the eBay study isn't solid evidence that paid ads might not work at allThe podcast ignores a very important fact: everyone already knows eBay. It's an established and trusted website for buying and selling products. Search engines like Google and Bing recognize this, which means that eBay is more likely to show up in organic search results. So if eBay doesn't pay for Google Ads, there's still a good chance they'll be on the first page of search anyway. Ranking high on search might be easy for a company like eBay, but for the vast majority of startups and small businesses out there, it's incredibly hard. It takes a lot of time and effort to optimize your website for Google. That's why many small businesses instead buy Google Ads, which puts them on the top of search results right away. Tadelis himself talks about how the ads actually did work well for people who weren't frequent eBay shoppers and probably weren't going to the site anyway. That naturally implies that ads actually do have a lot of value for startups and small businesses, since most people probably haven't heard of them and probably aren't going to these businesses on their own. But for some unexplained reason, Freakonomics doesn't take any time to interview any startup employee who works with ads or any small business owner. It's not as if these companies only make up a small part of the digital ads market. Facebook's top 100 advertisers only make up 16% of the company's ad revenue, so the vast majority of advertisers on the platform are small businesses. I really have no idea why Freakonomics's producers overlooked something this simple.The digital ad bubble guy Instead of interviewing anyone who regularly works with ads, the podcast interviews a former Google employee named Tim Hwang, who claims that the digital ad market is a bubble that's about to pop. Before we go any further, I do want to say that Tim didn't work in the ads department at Google, he worked in Public Policy. He drops this quote: “When I started to do research, I very naturally started to talk to a couple of friends who work at these big tech companies… they would be like, “Oh, ads definitely work. But we can't tell you how or why or give you any evidence for it.”This is totally false. If you buy Facebook ads, you'll be able to see the demographics that were targeted. You can see how many people saw the ad and how many people clicked on it. If you have the right tracking set up, you'll be able to see how many of those clicks turned into actual purchases. From there, you can easily calculate your return on investment for your ads. I'm not sure what else this guy wants. Maybe people at companies like Facebook or Google are secretive about the exact mechanisms they use to identify target audiences. Maybe they don't want to give away results that businesses have seen. Maybe there are some businesses out there that don't have tracking set up and haven't done the math on the return on investment they're getting from ads. But it's fucking nonsensical to claim that there's no evidence how and why ads work. More top-secret knowledge from the same guyHwang goes on to talk about some other reasons why ads don't work: most customers don't click on ads, more customers are using AdBlocker, and some ads aren't even seen because they're on weird parts of the page. Again, all of this is supposed to be proof that we're in a digital ad bubble that's going to pop at any second as if this is secret knowledge that most marketers aren't paying attention to. Let's be clear: literally all of this is common knowledge for marketers. Every marketing team in the world constantly looks for ways to build organic traffic to their website and reduce their dependence on paid ads. Everyone knows that ideally, you shouldn't be reliant on Google and Facebook to reach your customers, but businesses do it anyway because it's the easiest way to reach target audiences fast. I'm not sure how the digital ads market is supposed to be a bubble when most of the people who participate are aware of all of the weaknesses that paid ads have. But again, for some unexplained reason, Freakonomics doesn't try to talk to anyone who actually works with Facebook and Google Ads to clarify this. In conclusion Now look, the podcast did bring up some interesting points. It's definitely an open question how useful paid ads are for big brands. But it seems like the producers of Freakonomics were trying so hard to prove how much smarter they are than the entire marketing industry and every stockholder of Google and Facebook that they forgot to do some basic research. If you liked what you read, subscribe to our weekly newsletter. We send one article like this on tech and business every Sunday. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

This is a podcast version of an article we previously wrote about Quibi. You can check out the original article here. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

Hey guys, I started recording a podcast version of these articles, in case you don't want to read. You should be able to find us on Apple Podcasts and Spotify. LinkedIn Stories and Fleets Earlier this week, Twitter released “Fleets”, temporary tweets that are only up for a day. It's supposed to be Twitter's response to Stories on Snapchat and Instagram (and it only came 7 years late). Just last month, LinkedIn introduced the same feature. People are understandably pretty annoyed by every social media app copying one another. But some extreme left-wingers on Twitter are using it as an opportunity to attack capitalism. Here's a Tweet I saw earlier this week. If you look up the phrase “capitalism breeds innovation” on Twitter, you'll see a hundred other far-left accounts make the same joke. So it looks like socialism doesn't breed innovation either. Let's be real: It's pretty ridiculous to see all these companies hop on the Stories bandwagon to try to boost engagement. Also, I don't think anyone in the world was asking for LinkedIn Stories. But still, these random Twitter accounts are ignoring that really stupid ideas are actually part of what makes capitalism great.  So let's talk about why even though it does produce incredibly stupid shit like LinkedIn Stories, capitalism is still a productive force that helps move the human race forward. Most new business ideas are garbageLet's be real: Most new business ideas are really bad. I'm sure some of you have had the experience of listening to a friend talk about some new app they thought of. Meanwhile, you're sitting quietly and not telling them how stupid it is just to be polite. To be fair, bringing any type of creative idea to life is really hard. Even ideas that sound solid on paper might not actually work that well in the real world. For example, think about a company like Quibi, which was supposed to provide premium content for your “in-between moments”. On paper, the idea's not that bad. People love video content, and lots of people have random moments in their day like waiting in line at the grocery store where something like this theoretically could be helpful. But in the real world, nobody really wanted to pay a subscription when you can watch YouTube for free, Also, nobody considered Chance the Rapper doing a remake of Punk'd to be “premium content”. Quibi had $1.75 billion in funding and still shut down within 6 months. But this kind of massive failure is a feature of capitalism. Studies show that 90% of new businesses end up failing.  It's just one step in the process of finding solutions that actually work. How markets can help us find good ideas Even though there are lots of stupid business ideas out there, almost every revolutionary innovation sounded pretty stupid when it first started. It might be hard to remember now, but people considered Airbnb to be insane at first. Having random people staying over at your house was a pretty radical idea, and it sounds like a great way to either have your house trashed by some local teenagers trying to party or get murdered by a serial killer. But against all odds, Airbnb managed to build a global community of both guests and hosts. In the process, it's made the world a better place. It's now easier than ever for people to travel to destinations across the globe and it's easier than ever for homeowners to make some extra money on the side. How do we identify the actually revolutionary ideas like Airbnb over the ones that are actually just really stupid? The only method that works in the long-run is letting people try out their stupid ideas and see which ones actually end up working. That means having a decentralized marketplace where people can start new businesses and see what customers are willing to pay for. Because there are so many different people trying so many different things, you'll see more innovation than you'll see in centralized economies like what existed in the Soviet Union. Of course, most of these businesses are going to end in humiliating public failure like Quibi. So to make sure that people keep trying to innovate, entrepreneurs that take the risk and somehow succeed need to be rewarded. That's why Airbnb co-founder and CEO Brian Chesky is now worth $3.1 billion and will probably be worth more after the company goes public next month. Why copying competitors' features actually isn't that bad Like I said earlier, LinkedIn Stories are incredibly stupid. On the other hand, it's not wrong for businesses to try creating their own version of their competitors' successful products. For example, let's think about the most successful innovation of the last twenty years: the iPhone. It's not like Apple was the first company to create a smartphone. But Apple made big improvements on what other companies were doing.  Most smartphones that came before 2007 had keyboards that made them inconvenient to use. The touchscreen on the iPhone was a big step forward. After all, using different apps means that you need flexibility. It's nice to have the keyboard when you're texting your friend, but you also want it to disappear when you're watching YouTube videos. That's why just two years later, every other smartphone company copied what Apple was doing and also started using the touchscreen. I am definitely not trying to suggest that LinkedIn Stories or Fleets are going to be the next iPhone. But again, a decentralized market means there's going to be a ton of failures. Most of the time, you're just going to get really stupid copies of competitors' products. But occasionally, you'll see big improvements that make the whole ecosystem better. In conclusion Look, I'm not trying to suggest that we should have some crazy deregulated form of capitalism with no restrictions and no taxes. But despite what dudes on Twitter tell you, free markets have led to great innovations that have helped improve the lives of billions of people worldwide. If living with that means I also have to deal with LinkedIn Stories, that's a trade I'm willing to make. If you liked what you read, sign up for our weekly newsletter. We send one email like this every Sunday. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com

Check it out, guys. We got a podcast. This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit sundayspecial.substack.com