Paramount CEO Ouster, Microsoft and Alphabet Earnings, and Guest Jan Sramek
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Yeah, stop chewing. Oh no, he just put something else in his mouth. We just said stop chewing and there he goes. All right, you ready?

Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher. And I'm Scott Galloway. Where are you, Scott? You're eating grapes or something. I'm in my favorite place, or my second favorite place in the world. I'm in the Faina Hotel in South Beach. Oh, nice. What are you doing there? I have a book event tonight. I was in Palm Springs for Stagecoach this weekend, and then I was in L.A.,

And then I was in New York. Yeah. So tell me, I saw, how was Bill Maher? How'd it go? You know, it was great. I felt really grateful. I liked the team there. I really liked the producers. It's so much fun for me. I went to UCLA. I get to invite my friends. They bring them backstage. They're totally cool to them. I get to rub my success in my friend's face. It's wonderful. Yeah. Did you get a vest? There's vests. There's vests. You just had to do that, didn't you? There's vests.

I did not know they were best. I gave it to Justin Theroux, my friend. Oh, I finally went on a man date with him last week. I'm going to steal him back. How was it? How was it? Yeah, there's no way. He's as advertised. He's this really thoughtful, handsome guy. Did you know he wrote Tropic Thunder? Yeah. Yeah. Yes, I'm aware of that because I am invested in our relationship. Yeah.

Anyway, you had a gun show. Did you have a gun show with him, the two of you? No, I would lose that. He's very, no, he's a different species. That guy is like... So tell me how Bill Maher went, in any case. How did that go? I have trouble processing in the moment. I think it went pretty well. I haven't watched the show. Yeah.

But it felt pretty good. I was with Don Lemon, who I really like. Bobby Kennedy was on. I was hoping he would be on the panel, but he didn't come on the panel. Oh, of course not. Yeah. I met him. He's very handsome. He seems like a reasonable guy to me. I don't. But he's not. But he's not. Okay, look.

Okay, let's just get that out of the way. I don't know. I watched his interview. I didn't think he did himself any favors, quite frankly. No, but he never does. It doesn't really seem to matter. People just want an alternate, right? That's the thing. How is LeMond? I don't care about RFK Jr. I think he's a crank. D. LeMond? D. LeMond, yes. He's as advertised. He's a super nice guy. And

Never sit next to Don Lemon. I kept thinking when I saw the clips on YouTube, I'm like, Jesus Christ, I'm not that fucking ugly. And I'm like, well, no wonder I'm sitting next to Don Lemon. Yeah, he's a handsome man. But he and I hung out a little bit, which was really nice. It was very rewarding. Thank you for asking. Good.

Um, anyway, we've got a lot to get to today, including what Alphabet and Microsoft's latest earnings say about the AI race. Interesting, different things and more drama at Paramount. Boy, what a frigging mess that is. Plus our friend of Pivot is Jan Schrammeck, CEO and founder of California Forever, the company that's trying to build that new community in Solano County, California. Looking forward to that discussion. Um, he really wanted to come on here and talk to us about it. Um,

This weekend, the White House Correspondents Association undertook center stage of the presidential election this weekend. President Joe Biden took the opportunity to jab at former President Donald Trump. Let's listen. I had a great stretch since the State of the Union. Well, Donald has had a few tough days lately. You might call it stormy weather. What the hell? Trump's so desperate, he started reading those Bibles he's selling. Then he got to the First Commandment.

You shall have no other gods before me. That's when he put it down and said, this book's not for me. I thought he did pretty well. He did really well. He was very sassy and funny. It was a good opportunity. SNL's Colin Jost was the comedian of the night. He also took plenty of shots at Trump. But he also gave touching remarks about his grandfather who recently passed. Let's listen. My grandfather, a Staten Island firefighter, voted for you, Mr. President.

He voted for you in the last election that he ever voted in. I mean, I'm sure someone else will vote twice in this election using his name, but that's just how the democratic machine works. He voted for you, and the reason that he voted for you is because you're a decent man.

So that's pretty good. I thought it was pretty good. The New York Times, for some reason, got all tetchy with Colin Jost. I thought he was good. He was very strong. And they got all tetchy maybe because of the Wordle joke, which was very funny. I thought it was – I went to a bunch of the parties. I went to a puck party. I went to a politico party. I went to a NBC party. What was the best party? What party had the hottest people?

Oh, you know, hottest people, it's Washington. So I think that's it. Actually, there's some great look at people dressed, some of the dress, they had a thing at the Washington Post of the dresses. And actually, some people look just fantastic. Some of these anchors like Abby Phillip and

Rachel Scott and what's his name? Lester Holt looked really good. Anyway, there were a whole bunch of people, but it was, they were all good. There was one yesterday, a tea party at the British Embassy. I had been to an evening party there too. The food was the best at the British Embassy. I have to say there were crumpets. There was other things. And the night before there was

Curry, that was good. And I thought the Puck had a nice party. And then Axios had Jelly Roll at an event at the Organization of American States. They were jelly rolling. And I saw Paul Ryan there listening to Jelly Roll. That was weird. I like Paul Ryan. Yeah, he was interesting. I said hi. It was good. It was really good. I actually thought Colin Jost was good. And it was nice. It was nice. He was okay. I mean, he was okay. He was fine. What do you mean? They're never...

going to be like Michelle Wolf was like amazing but that's usually agreed but that's not

What it is. He did a nice job. And I actually think it's interesting because a lot of people in the room thought it was excellent. Maybe playing it back didn't sound as well. So it just, you know, I think they're never going to be like the most. You played in the nicest moment. The moment about his granddad was really, was very nice. I don't care. I have trouble taking Colin Joe seriously. He looks like my paper boy. The guy looks 14. Yeah.

Well, he was with Scarlett Johansson, his lovely wife. You know what it was? It wasn't that it was good or bad. He took it to a different dimension. You know, the comedian's job is basically to be as insulting as possible to get away with it and to be as cutting and as biting. And that's difficult because it's become so politically charged. So the thing I like most about the frame through which he did this was he just took the temperature down. He's like, oh, I'm going to be civil and nice.

Yeah. Yeah. Yeah. As I think about it. Good for him. It was actually very nice. It was apparently very tight. I didn't go to the dinner. I never go to the dinner. Anyway, it was nice to be around Washington. The weather turned out to be beautiful by Sunday. So anyway, it was lovely. It was a very nice time. Next, the FTC is accusing Jeff Bezos and other Amazon executives using disappearing message apps to conceal potential evidence relevant to antitrust. An FTC document alleges the executives opted to continue deleting messages from

about sensitive business and antitrust after receiving notice of an investigation. Bezos reportedly started using the app Signal to communicate with Amazon executives in 2019. This was soon after he was hacked, as you recall. Amazon says the claims are baseless and that it first disclosed the use of Signal to the FTC years ago.

And Google gotten a little jam with this is deleting stuff. I suspect the answer is somewhere in the middle, but I don't know if it's that fishy they're using Signal, but they are a public company, so probably they shouldn't be using that. And then at the same time, he was hacked, so I don't know what to say. What do you think? I think people in a professional setting have the right to secrets. You said this once, and I love it. You said that people have the right to have secrets. And

Now, I just draw a bright line. I think if somebody wants to send personal or professional messages, they get to choose their medium of communication. And if a medium of communication deletes your messages, I think that's their right. If they were personal. The FTC is alleging they were just blotting amongst and between each other. Okay. But we're in national laws. If they send out something saying...

You're being investigated and you're part of a case. Do not delete any potential evidence. That's a law. And if they did it after that, they have broken the law.

But until there's a law that says anything that's quote unquote professional has to be on a digital platform that we can subpoena, they have the right to have disappearing messages. One of the things that I recall in the very early days of Google in particular, they were very sloppy in their communications with each other. Right. So was Microsoft back when. Right. Because you didn't think, you know, if you were typing something out on a letter, you're not sloppy the way you are.

And I think it just engenders a very sloppiness on the behalf of companies and what they say, right, that they shouldn't be saying. And it never goes and it's just there forever. Same thing with, you know, the Trump people and a lot of the stuff that goes back and forth. I think he's going to get

hoisted by some of the communications. Now, he doesn't use email. It was interesting, his assistant was talking about she uses email and digital means for him, and probably because he thinks he's guilty all the time, so he knows he's like a mobster. But it's an interesting, it'll be interesting to see if they did this. I think what they have to focus in on is

The case itself, the case itself. I'm not so sure there was tons and tons of secret information in this back exchange between people. And there is the excuse of him being hacked. So who knows? Who knows? Yeah, I don't. I mean, I remember once we did, we're very analytically driven in my last email too, and we tried to do some analysis of

who are the high performers and what do they have in common? And we found that it was three things. We found that, you know, women, we had a lot of young women who were just outperforming the men. And then two, they came from elite colleges, which you don't like to admit. And then three, they had had sports in their background. And immediately someone in the firm goes, delete all these emails, delete all these. It's like,

Well, at some point, when you're so paranoid and you have to delete every email, it reduces productivity. So I don't know. I don't like – I'm starting to live that way. I'm deleting every email. I'm deleting every – and it's just – it's sort of – not every email, but when I get something from someone – We've got a lot of track record from you, Scott Galloway. We do. I do. Well, pretty much everything I've done is on tape now, but –

You do start to think that way when someone sends something about anything. You think, okay, does this need to be public record? Mm-hmm. Mm-hmm. Well, it's interesting. Speaking of public record, just very briefly, Kristi Noem and the dog and goat killing is just splendid social media information. I don't know. I know, but I'm just thinking, do you have a thought upon that, what was happening there? Like, anyone who has a dog...

You just like these. I'm actually thinking I'm not I'm just considering this. I am trying to eat less beef because I have this beast in my house. You've spoken of this. Yeah, you've spoken. I have this Great Dane and this Great Dane will go in and get in bed with my 13 year old to try and wake him up slowly. And when my his parents come in, he's inclined to like scream at them. And my dog will like wait there, lay our Great Dane will wait there, go in and

And, I mean, these are just such loving, beautiful, sensitive creatures, right? And so I thought, and then I've seen all these TikToks with people and their cows. And I'm like, okay, a cow can't be that different than a dog. And when I think about what we do to these animals in industrial food production, it's now got me thinking, maybe it wouldn't be a bad idea to stop, you know, to start, you know, eating less beef. The fact that an individual would even...

be this insensitive to these such just beautiful beings. I mean, I can't, I don't know. You had dogs growing up, right? I did. Yeah, I do. Yeah. I mean, they're just, they bring so much joy. They're such emotional, wonderful creatures. I don't know. I just think this, okay, character matters. At a minimum, we want decent people. And it's like, it just outed her as like,

you're not an especially decent person. Now she's saying she's being irresponsible. She's trying to, she's really screwed herself. Honestly, the way she told it, acting like it was fine. There's nothing fine about what she did. It's just stupid. It's just dumb. She could have given the dog away, all kinds of stuff. And then she said, oh, well, we killed the horses and

Who knows? It just seems so ridiculous. One of the funny things, though, I have to tell you, social media is just all the governors saying to do a picture of yourself with a dog that you didn't shoot and throw in a gravel pit, which was like Governor Whitmer did it. Governor Waltz started it. All these governors are taking pictures doing that. So it became kind of a social media phenomenon. And then my favorite one was, why is nobody talking about the goat? Because she also shot a mean goat, which was kind of funny.

In any case, you're right. Yeah, I don't. Yeah, I thought this would affect you, like, because you're such a dog man. Well, I can't even. It feels just so out of bounds. This, to me, anyone who has a dog and sees the joy and the love and the affection and then hears this story, all right. Is this someone you want figuring out child welfare? Yeah. Okay, let's get to our first big story. ♪

Scott, you predicted last week that the Alphabet and Microsoft Q1 earnings would be amazing, and you were right. Let's start with Alphabet. The company reported revenue of $80.5 billion last week, a 15% increase from a year earlier and the fastest growth since early 2022. The company's

Profits climbed 36% to $23.7 billion, well above analysts' estimates. Alphabet also greenlit its first ever dividend, as well as a $70 billion buyback, stock buyback. That's interesting. The company's market closed value closed above $2 trillion level for the first time on the heels of all that news.

Microsoft also had strong numbers with their Q1 earnings. Revenue was up 17% from a year earlier. Net income grew 20%. Microsoft is crediting some of the success with this investment in AI. The company said sales of its cloud computing product, Azure, grew 31%, very strong in the last year, with the fifth of that coming from generative AI services. So what do you think? And, you know, Facebook got slapped a little bit because of the spend on AI services.

And these guys got benefited. There was a great article in the journal about this. And just briefly, Snap had its latest earnings. Revenue was $1.2 billion in the first quarter. A 21% jump from a year ago. Daily active users rose 10% to $422 million. I think they've stabilized. They'll probably benefit from the TikTok, whatever happens to TikTok. But thoughts on all these and start with the two biggies, obviously. Well, you know, my stock pick for 2024. Mm-hmm.

I mean, do you remember what it was? You don't really follow me. I don't. I don't. I don't care about stock. What was it? Alphabet. It was Alphabet. Yeah. Look, they're firing on all cylinders. It's a monopoly. Always bet on up and to the right with these companies. They own 93%. And also to their credit, their cloud business is doing really well. It's really well managed. I think that the scare from AI has been good for them. I think they've been looking at

tightening costs. They have, in my opinion, the premier data set for AI. They not only have the most human capital, but with access to your calendar, with access to your video habits, with access to your email, they're just going to, in my opinion, they're going to be able to do a bunch of very boring things that will move the needle from a share. I think they'll be the first real company that brings kind of AI into every day. Mm.

Mm-hmm. It's already there. When I was using it, they had just – I searched for something, and they had a summary of everything at the top of my search now. It's not the search results. It's actually – I forgot what I was asking about. I think it was how do you integrate something into something. And they had the answer right there. I didn't have to click in anywhere. It was interesting. But go ahead. Yeah.

I mean, the thing that was also interesting is the announcement of a dividend and a stock buyback. Yeah. What do you think about that? Well, it's interesting. I think they realize that they can't make acquisitions because they're under so much FTC scrutiny. And basically, when you do, to a certain extent, when you issue a dividend or do a stock buyback, you've kind of said, we're producing more cash than we know how to deploy. And that's a sign that a stock has kind of grown from being a teenager to an adult. I think this is directly a function of their CFO, who is an adult.

But it kind of signals a new, it kind of signals a recognition. They're no longer, quote unquote, a growth company or a teenager, but they need to start returning capital. They're moving in the Microsoft direction. But they're, I mean, Jesus Christ, their earnings was up.

The earnings were up 62%. What about Microsoft? And both of them benefited in the way Facebook didn't on the stock appreciation. Well, okay, Microsoft revenue was up 17%. Both companies saw their cloud businesses accelerate. The Microsoft DPS was up 20%. Their cloud revenue reached $35 billion, up 23%.

Then now about two-thirds of Fortune 500 companies use Azure OpenAI service and almost 60 percent use Copilot.

But why did the shares of Microsoft and Alphabet spike while Meta's fell, even though they were talking about similar investments? Because this is going to be multi-trillion dollar investments. Because both Microsoft and Alphabet have figured out ways. Their path to monetizing AI seems pretty obvious because, one, they're starting from a lower base. And Meta's acceleration, Meta's at 4x.

The reason why I think meta, everyone's talking about meta, you know, stock decline. Okay, now it's only up 410% in the last 18 months. One, I think the stock had just gotten out a little bit over its keys and the market was looking to check it back a little bit. But also, I wonder if it's PTSD. The last time Mark had a big vision for the future and said, we're going to spend a lot of money, it was the metaverse and the headset. Right.

And that was literally, I mean, at some point someone's going to acknowledge that it's been a fucking disaster. It didn't make any sense. So when they hear him going all in on AI and saying they're going to be the biggest spender on GPUs, I think the market has a little bit of PTSD around Mark's big visions. Whereas it feels like Satya, who is now the largest investor in AI in history and has already been able to monetize it with Copilot, Bing is a thing again.

And Google, with their cloud service and Azure, I don't know. I think you're 100% right. We don't know what kind of business Mark can make from all his data. And then if Google signs a deal with Apple, that'll send it up. There's a lot of discontent at Alphabet, whether Sundar is really being as aggressive as he needs to. But I think he's one of these plotters that tends to get there. There's a lot of plotters that do really well. I would say...

You know, like Satya, Andy Jassy. I have a feeling they're going to be better. Tim Cook was seen as that and did an amazing job. I think some of these second-gen CEOs are much better suited for the next phase of these companies, if you think about it. And I'm using the term plotter in a negative way, but it's not. I don't mean it that way. They're just...

They sort of are like, I'll be interested to see who the CEO of Meta is someday, who's going to take all this and turn it into something probably more valuable even. God, who knows? And also the little engine that kind of continues to show that it maybe can is Snap. Their shares were up 28%. Yeah, good product. Revenue up 21%. That's a big deal. Also, I just want to highlight.

Snap had this product that basically gave you a visual depiction of where you lie in your friend's world in terms of currency. And it ended up that it was really upsetting kids to find out that, oh, actually, I'm not very good friends with this person. I don't play a large role in their life.

And they got rid of it. Yeah, they do that. They move fast on their stuff. They had an AI problem. They changed it right away. He's a very, if I had to give most improved CEO as a person, I would give it to him 100%. He's a very thoughtful person now in a way. And I mix, you know, he makes a good product. It's a really good, it's not good. It's not huge. If I was one of these big companies, I'd buy Snapchat. It's such a good product.

And the people love it. My kids still use it regularly. They like it. It's their phone. It's their telephone. I don't know what else to say. You know what I mean? It's their communications product. And...

And then they consume elsewhere, like whether it's on Reddit or YouTube. I would say those three things for young people are the three, the troika of popularity. And a lot of kids use Instagram and TikTok, obviously, but in any case. But these, I mean, just some numbers here. Microsoft, Meta, and Alphabet have spent more than $32 billion on...

on data centers and other capital expenses in just the first three months of the year. Yeah, they're going to own everything. No one else can keep up with that. No one can keep up. Microsoft also noted they plan to spend $14 billion quarterly on AI infrastructure, citing early returns from services. Satya Nadella is a badass, I'll tell you. So these guys have said, these guys, I mean, this is the difference. They're like, AI is working for us.

And we're going to lean into our advantage. What's our advantage? We have more money than anyone else. Whereas Meta said, oh, I'm not afraid to spend a lot of money even before I've connected the dots around how it's going to help us. And the market said, OK. I think what the market was hoping for from Facebook was he was going to say, oh, I've laid off another 20 percent of my people and my earnings are about 300 percent. Yeah. Yep. Yep. Yep. Although his ad business is doing great. His ad business is doing great, as you know, in that regard.

All right. Let's go on a quick break. When we come back, Paramount makes a big move in the midst of merger talks. And we'll speak with Jan Schrammeck about what exactly he's building in the farmlands of Solana County near Vacaville.

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Scott, we're back. Paramount is parting ways with CEO Bob Backish. The company announced Backish's departure on Monday. All this is happening as Paramount and Skydance continue merger negotiations. The two are on exclusive talks until May 3rd. If the deal goes through, Skydance intends to name its CEO David Ellison to run Paramount, according to CNBC.

Redstone reportedly wanted backish out before Paramount's carriage negotiation with Charter Communications. Impact we'll see on a merger. Skyden's apparently proposed a revised offer on Sunday that would give non-voting shareholders a premium in the merger. They needed to do that, that's for sure. I don't know if the CEO drama matters. We're recording this episode a few hours before Paramount reports its Q1 earnings. Any thoughts? And this seems like an unnecessary question.

drama like it's happening. I ran into a lot of CBS people this weekend and they're losing their minds. I was like, they don't care about you, CBS. I was like, CBS isn't really the game here, but thoughts? This is a company in sheer chaos. Board members resigning. The CEO doesn't leave in the midst of an acquisition. I mean, when you're about to do a deal,

You keep everybody happy. It's like, okay, we don't need moving parts here. We don't need any reason to give the acquirer the ability to take the bid price down. We need to pretend we get along. We need to speak with one voice. Board members resigning? The CEO leaving in the midst of a deal? Sherry is clearly...

Quite frankly, demonstrating what I would argue is every rich parent's fear that their kid ends up being an entitled jerk. She's clearly an agent of chaos. She wants a different price for her shares. The board is like, I'm not cool with that. I'm going to resign in the midst of an acquisition. Well, they're worried about litigation, presumably, correct? I mean, that's really... Yeah, but they're the board. I mean, this is total...

Yeah, you don't want to be. There's a big story. It's right now on the front page of the Wall Street Journal, on the front page and also the top. A media heiress has bid to sell sets off mayhem, mayhem inside pyramids. That's not good. That's not good. And she wants to cash out so that she can, she has an interest in Israel. She's got, she wants to do other things, right? And she knows this is in her area of expertise. I mean,

This is not what you want. This is not what you want at all. And I think, you know, it's already, you know, as you call it all the time, these companies are all melting icebergs, right? Right.

And so you're in the midst of that, too. I mean, this story is really is not what you, you know. So when David Ellison, CEO, she began to feel the pinch of the entertainment giant's decline when the management cut dividend that had supplied income to the Redstone family for years. She showed friends photos of the house she was building in Turks and Caicos.

The October 7th attacks on Israel left her motivated to spend more time fighting anti-Semitism. People close to her said, so when David Ellison, the CEO of production company Skydance Media and the son of billionaire Larry Ellison raised the idea of a merger, Redstone was ready to hand over the media, however, family's controlled for nearly four decades. If only it were that easy. And then it goes on to like, oh, yeah. So what happens here? What happens? Oh, I've gotten this wrong. I thought it was going to be Apollo. Now it looks like it's going to be Scott. Here's the problem. He's got to give the...

non-voting shareholders more money, that's for sure. And which means the economics here are probably very problematic going forward. But go ahead. It's an automatic lawsuit when it's like, oh, because Sherry has leverage, we're going to pay her 30 bucks a share, but all the other people in the back of the car get $20 a share. And also the board members who are pretty thoughtful people have probably said, my job is to represent all shareholders.

And when you try and run roughshod over us and create this Frankenstein-like deal that cedes advantage to you and takes capital away from the other 80% of shareholders, we're not going to allow it. And she's clearly like pushed back and they've resigned from the board. And here's the bottom line. What she doesn't get is...

Chaos does nothing but cede value to the non-chaotic acquirer. Right, right. 100%. And one of the things, this is really interesting. Remember they were trying to sell off Showtime? Redstone held out hope that a big buyer, maybe a technology giant, would emerge to take the whole company off her hands, including fast deteriorating cable channels. That didn't happen.

And the hope for any company in this space is that Apple will come out and buy them. But that's not a strategy, said Robert Fishman, an analyst at Moffitt & Nathan's. I think that kind of says it all. But that's what they were hoping. I know they're hoping it, but here's the thing. Tim Cook...

Tim Cook's like, I don't want to get involved in that bullshit. I don't want to have to deal with a rich kid who clearly doesn't understand her responsibility to shareholders and the CEOs just left and a bunch of board members who are lawyering up and another billionaire son trying to, you know, the Ellison kid strikes me as very thoughtful and very smart.

The Apollo folks are grownups. The last, Tim Cook's like, life's too short. Well, it also is a comma to them. It was so interesting because the CBS people are like, well, who's going to buy us? I'm like, I don't know, nobody. Like somebody, some hedge fund. Like I literally was like, you're not the game anymore in a lot of ways. A lot of these networks are not. You know, I was talking to ABC people. I'm like-

That's not the focus right now, and especially these tech companies. And in a weird way, if David Ellison wins here, it values his company at a ridiculous... The numbers they're putting out are very enthusiastic, I would say, of what they're going to do, which is always a problem in Hollywood, right? When you're saying, I'm going to go from $30 million to $4 billion, and you're like, oh, okay. And I think one of the things is,

You know, when they were talking about, like, the Ellison group, and I do like David. I've interviewed him, and he's a very talented maker of those big blockbusters. I said, you know, Larry Ellison's going to own you now. That's who's going to own you. Larry Ellison is the owner of CBS, if this happens, ultimately. So I was like, put that in your pipe and smoke it. Like, he's, you know, anyway, we'll see. This will be...

I mean, keep in mind, in the midst, this company has been in play for the better part of a year. Yeah, more because it was pieces we're going to get sold off to, if you remember. But go ahead. When a company is in play, it usually elevates the stock price because typically someone has to come in and pay a premium. OK, Paramount's off. I believe it's off. The stock has dropped nearly 50 percent in the last year.

Because people are worried that Sherry and all the moving parts here are going to result in a deal not getting done from the only two people who have invested so much time and energy in trying to make this deal happen. If one of them drops out, one of them, there's a decent chance one of them goes, you know, thanks, we're folding our tent, we can't figure this out. And then she's negotiating unilaterally with the only buyer in the world, which is going to cede a ton of advantage to

And this is what Sherry and the folks in media and journalists covering media refuse to acknowledge. They are now the Yellow Pages. And that is, there's a lot of people who still read the Yellow Pages. There's a shocking number of homes that get a big fat book on the doorstep and use it to find a plumber or a locksmith.

It's fewer and fewer homes, and it's not the people you want to reach. I don't mean to sound snarky. Like, I didn't even know CBS was still around. I'm trying to think of the last time I had the CBS logo anywhere near anything I ever did of any importance. And it's too bad because they are very talented journalists.

But it's like saying they're pilots. They're very good at what they do, but they're working for Pan Am in the 70s. Yeah, they've got to rethink. That's what I was telling a lot of these. I was like, you just have to rethink it. It doesn't mean it's over. It's just another business. It doesn't mean you have to die. You think it means they have to die. No, no, it's not that they have to die. One of my best investments ever

Wasn't a Yellow Pages company. Dex Media. Yeah, I was doing great. One of my one of my great CEO, a guy named Joe Walsh, really talented investor, a guy named Jason Mudrick. And but here's the thing we realized we're no longer teenagers. We're in a business and structural decline.

So we're going to manage it well. What does that mean? We acquired other Yellow Pages companies, and then we look for efficiencies, which is a nice way of saying we laid off people. And as long as you can cut costs faster than the business is declining, these companies hemorrhage cash.

But you have to acknowledge you're no longer a teenager, that you're a baby boomer going into your retirement. This will be whoever ends up with this thing, I think it's actually going to make a lot of money because they will go acquire other distress cable assets. They will be adults. They will stop the bullshit of like, oh, we're 18 again and pumping their face full of fillers and human growth hormone. And they'll say, no, we're going to make Nana and Pop-Pop comfortable. And we are going to rationalize this business through cost cutting and consolidation and

And as long as you can cut costs faster than the decline in the business, you make money.

You also can do things with the content assets always. I always think if you're a great story, there's always like you can experiment around the edges of what's interesting at the right cost. I literally was saying to every one of these TV people, I'm like, let me give you just a quick lesson. Costs need to meet revenues, like be less than revenues. That's really pretty much where you are. And you all, I don't know why you earn millions of dollars. What's your value? And so it's interesting. One of the other things I'll read from this story, because it was quite good in the journal, which was

Redstone, who thought scale would help the company thrive in the Netflix-dominated media world when she reunited Viacom and CBS, merged the two companies, even though people said not to. Redstone would have been better off if she had sold the entire company or pieces of it back when she took control, said Chris Marengi, co-chief investment officer at Gabelli Funds, which is Paramount's second voting shareholder. She did have a chance.

to sell it if she hadn't merged the companies. And she probably would have done a whole, it was worth a lot more. There was interest from Apple and Paramount. There was interest from AT&T and CBS. I'm sure Ted Sarandos apparently had expressed interest in the studio, didn't want to do that. And so that's, you know, there was a moment where

that they could have done well here. But we'll see what happens. But everybody hold on. This is going to be, and listen, David Ellison's not going to have a nice time either. This is, you know, up and to the right is not where these companies are headed. Except if you're, you know, if your dad is Larry Ellison, I guess that's something you don't have to worry about quite as much as other people. But he still does. He's a very good business person. So he's got to be thinking. He doesn't want to be known as the person who spent all his dad's money, presumably. Yeah.

I don't know. I'd like to be known as that person. Would you? I'd be so good. I stayed at Larry Ellison's resort in Palm Springs. The sunset, it's spectacular. Yeah. That guy's enjoying himself. Yeah. If this doesn't happen, she's going to have to...

Merge it into another entity. She's going to have to carry business as usual. There's the annual advertising sales thing is going to get underway soon. Who's going to go on this board? Who's going to run the thing? What if you're, there's a bunch of talented people in the CBS newsroom. You don't think they're going to start returning calls? I mean, this is chaos. It's total chaos. Sherry, get it together. Anyway, we'll see. All right, let's bring in our friend of Pivot, Jan Rapp.

Shramak is the CEO and founder of California Forever. His company, with the help of some Silicon Valley billionaires, has acquired 62,000 acres in Solano County, California, which is north and slightly east of San Francisco, over the last few years with a goal of building a new community. ♪

Welcome, Jan. Thank you. It's good to be here. So we've wanted to have you on for a while. We have so many questions. Scott particularly has a lot of questions, but there's been a lot of mystery around California forever. I need you to

I need to explain exactly what you're planning. And I get a sense of why it was secret at the beginning because you were buying up 62,000 acres in this area just northeast of San Francisco, centered in Solano County. So talk a little bit about what you're doing for people who don't know. We are trying to get California to build again and solve this problem that we have created

It's still the center of innovation. It's still this economic engine for the whole country. But it's the first time in the history of the country where people are moving out of a place like that. And we're doing that by building a new community in Solano County, about an hour north of San Francisco. And in some sense, this should be the...

This is the oldest kind of business model in the world. We run out of houses. We should find some land that is not prime farmland, that is not sensitive ecological habitat and build a complete community there. And then I think

What's different is we're not building a subdivision, we're building a complete community. And so we're building something that someone who grew up in an old neighborhood like Noe Valley or the Marina built 100 years ago will recognize. A complete community with homes and apartments and schools and shops and jobs and churches. And...

We believe that this can be a really unique economic engine for Solano County, which is a part of the Bay Area that has been left out of the prosperity that's happened here over the last 20 years. So most cities just happen, you know, they just sort of occur and then cities build on top of cities, right? That's the whole concept is like Rome has 10 different versions of itself depending on the era.

Creating something of nothing, a lot of cities that do this in the history have not worked out well. In Brazil, I was thinking lots of different things. They've been trying to create the perfect city. Right.

Why did you, besides California needs more housing, which obviously is a big deal, why do you think it'll work by just creating it out of nothing, where people weren't naturally going to build themselves or settle themselves? Yeah, I mean, I think that, first of all, it's a... I mean, in America...

It's a fairly young country, right? And so almost all cities are new cities. And we have really good examples of cities that were started by a person or a company that turned out to be spectacular. Some of our most beloved cities in America were started this way. I mean, Savannah, Georgia, Philadelphia, Irvine in Southern California. We have a lot of really good examples of places that were basically started by a company. And I think what's...

The other part of it is we're building in an area that actually people have said before should be built.

the US Commerce Department, the US Army Corps of Engineers, the Association of Bay Area Governments all said in the 50s, 60s, 70s that sometime in the 2020s we are going to run out of space in the Bay Area and we should build somewhere. And they all concluded that this was basically the best place to build. That by that point we will have run out of space in the inner Bay Area and this would be a really good place to build. And so there's a lot of precedent for why this would happen. And I think

The cities that have, the planned cities that have failed, I think they failed for two reasons. And I spent two years before I started working on this kind of going back and reading the history of all of these projects, Brasilia and every project that you can name. And I think they failed in one of two ways. Either people were building them in a place where there was no demand,

which is not the Bay Area, or the developers came in with some kind of singular vision they were going to impose on the city and it's going to be this perfect kind of master plan. And our approach to it is very, very different. Our approach to it is very similar to how a place like San Francisco or New York were built, or indeed kind of locally, Rio Vista or Benicia or Vallejo, which is you lay down a street grid,

And you do a really good job doing that. And then you think of the city as a platform. And it's, you don't say the houses are going to be beige and they're going to have these windows and this is where the residential is going to go. And this is where the small houses will go. And this is where the big houses will go. Instead, you do the bare amount of

correct planning in the beginning and then we let the city kind of emerge out of that and a lot of different people and builders and architects and companies and residents come and they build their lives and and I think cities are this unique invention that we have where

particularly in the society that we live in today, and there's challenges now, but I think cities are still the place where people with a lot of different values can come together and build something really special. And out of that disagreement and chaos and conflict, something really special emerges. And that's what we're trying to do here. Nice to meet you. So I want to try and, if I can, describe the tension around what I think some of the tension you're facing are the questions here.

So when I first heard about this, I love the idea of creating massive housing such that young people finally have their shot, right? I think that slowly but surely, homeowners have weaponized local governments to restrict housing permits. And the American dream, if that's buying a home, is increasingly sequestered from young people. So I like the innovation. I like the idea that they're doing something similar in Florida where they're incorporating a city, tons of new housing units. I love that.

The thing I think that sent chill down my spine or chills down my spine was when I read some of the comments from Balaji Srinivasan. And I think people are worried that is this new techno neoliberalism where people who are very blessed want to start their own, want to basically secede from the nation, want to create their own government, want to create an...

You know, everyone has the right to create local politicians. But I guess this is my question is, is this rooted in opportunity for young people that haven't participated in the spoils that a lot of these people have enjoyed? Or is it a vision for a different type of society, which quite frankly, just

Makes me very kind of scares me a little bit. Can you can you walk us through that? I'm going to just put some update for Scott was just referring to former Andreessen Horowitz partner. This guy is calling for something like tech Zionism. He said his vision is to ethnically cleanse San Francisco liberals. He has some scheme around colored shirts that people wear. It's terrible.

demented, actually. But a lot of tech people are trying to take over San Francisco government with donations and their own mayoral candidates, which is their right to do so. Although some of the things that pop out of their mouth are just so heinous and stupid at the same time, which is very hard to do.

So talk about this because a lot of people feel like given some of the investors, which I think does include Mark Andreessen, who is a big backer of Polygy, California Forever's connection to a movement that wants to build a place where tech elite can live under their own rules or the idea that you're trying to do a different kind of governance, new kinds of governance. And I know Mike Moritz, who has been an investor, has talked about that, the idea of a new kind of governance. So talk

perhaps separate yourself from that or not, or just say what we're trying to do here is blank. Yeah, no, I mean, I think we're not trying to do any of that. And I think there's a lot of baggage that tech has created in building new cities that unfortunately we had the receiving end of it. But my interest in this from the beginning was very simple. I really care about the built environment. I really think that walkable

dense places are special. I think walkable cities have amazing impacts on the sense of community and creativity and human health and knowing your neighbors and all of these things. And so for me, the primary interest has always been how do we build more housing so there's more opportunity? And then how do we make the place walkable? Because if you look at these old neighborhoods like

big parts of San Francisco or Georgetown or the West Village. It's clear that a huge proportion of Americans love them, but they've become these oasis for the rich because we've stopped building them. And so these walkable communities today, working families just can't afford them. And so for me, it was about building a place like that

I have very little interest in innovating on, in particular, two things that tech has done. And the first one is, there's this tech libertarian kind of floating cities, network states and so on. I have zero interest in any of it. Balaji is not an investor. And there's also this kind of smart city component of it, what some other people have tried to do. And I have zero interest in that as well. I mean, we're building a place that actually is

From that perspective, really, really boring. We're building a place where if all we did was build a great combination of some of these old neighborhoods I mentioned, like Noe Valley and Marina and Mission and West Village and parts of Philadelphia and Georgia. That are presumably more affordable, correct? More affordable, absolutely. Because they are expensive because we don't have very many of them.

If all we did over the next 30 or 40 years was build something that people looked at in 50 years, the way that they look at those places, I would be over the moon. We don't need to do anything else. But you are going to get saddled with that tech thing. Because given some of your investors, you know, they're very among the wealthiest people on earth. So and, you know, some of them have their nonsensical, I'm moving to Australia. Some of them, I'm going to go in space. Like that's a Jeff Bezos thing, the floating city. That's his dream of the world.

Of course, in sci-fi, that's always a bad dream for most people and a good dream for rich people. So you're going to carry that baggage no matter what, like no matter what, given your investors, right? One. Two, they feel anti-democratic in a lot of ways. So presumably the governance here, even when Mike and I happen to like Mike Moritz,

talking about new kinds of governance, presumably democracy is at the center of that, correct? It's not, what's a new kind of governance? I don't even understand. I think what Mike was referring to in that email, I think it's an old email from 2017, was new kinds of governance when it comes to making it easier to build.

I see. The thing that we've been obsessed about since the beginning is why does it take two years to get a permit to build a small apartment building in San Francisco? I just added a door. It took me forever in San Francisco, but go ahead. Exactly, exactly. And so if you look at the ballot measure that we proposed, the only innovation, I mean, it's an 80-page ballot measure.

And the only innovation on governance that's in it, the only one, is it says, it should be easy here to build buildings. We're going to do an environmental impact report on the whole community. We're going to study all of the impacts. And then we're going to say- And safety is important because it's San Francisco. Exactly. Because it's California. Exactly.

As long as you're building something that fits in here, you should be able to get a building permit in 60 days. And so that's the only kind of governance innovation that we have. But the governance is democracy, correct? I mean, it's not like you're not going to innovate on some, let's have a king or let's have, you know, Marc Andreessen be king for a day or whatever. Let's not have him be a king any day. But when you were doing this at the beginning, you had to be very secretive. And obviously there was a lot of back and forth with local landowners, right?

Did you talk about why you did it that way? Presumably because you didn't want the prices to go up like crazy, like, oh, rich people are here with their money bags. And you also filed a lawsuit against accusing 40 Solano farmers of price fixing their land, which they've denied. So talk a little bit about that, because you've got to get the support of the community moving forward, too, and the elected officials that are there.

now yeah i mean on the on the buying the property quietly um we we've done the same thing that um for example disney did when they were buying the property in florida for for disney world which um is just standard practice i think for us it was partially about the prices but it was also we felt that you could design a really great community here but someone had to

basically control a large amount of the land so you could place things correctly. For example, one of the things that we did in the ballot measure is we're doubling the security buffer around the Air Force Base here. And we would not be able to do that if there were 40 different landowners trying to build a project in the community. So that was part of it. And then... Just so people don't know, there's a big Air Force Base nearby for people who don't know. Right, exactly. Which, by the way, one of the biggest challenges for the Air Force Base

Number one, the people who work there are struggling to afford to live here. And number two, their spouses often commute one and a half hours every day to Palo Alto because there's very few jobs here. And so we've had an amazing response from many of the people who serve on the base saying, you know what, actually, this is the best thing that's happened to the base.

And then on the lawsuits, I mean, the main thing I would say is we've settled the majority of them. There was a recent ruling in the case from the court that basically said there is evidence that this happened, but we've been very reasonable on settling it and we hope we'll be able to put that behind us soon. Because you just want to build something. We don't want to build something, absolutely. Scott?

So first off, I find your comments really heartening. And I also want to point out that masking your identity when you're a buyer is common practice. NYU does the same thing. Because anyways, for a lot of reasons, you don't necessarily want the seller to know who you are. Get our greed glands going. Young people have been held out from the American dream of buying a home. What do you envision? What does victory look like in 10 years out in terms of the price of the home and

the amenities, paint the vision here for why this will be a net positive for society. Yeah, that's a really good question. In terms of the win for young people, I think affordability was a really big criterion for us from the beginning. And we designed the whole community with that in mind. And the biggest component of that is if you look at what developers are actually building today, we've basically stopped building starter homes.

And that's a big part of the problem. If you talk to people who've bought a home in the Bay Area in the 70s or 80s or 90s, their first home would be 1,000 square feet, 1,200 square feet, kind of three bedroom, one bathroom, small single family home. And then they would build equity and they would grow in it and eventually trade up. For all kinds of reasons in the real estate business, we've stopped building those homes. The community we have is unusual, that kind of we propose is unusual in that

California has a standard that says affordable by design. And what it basically says is if you can build a walkable community where you have row houses and ADUs and small apartment buildings, they can be affordable by design. You can actually build units that you can buy that are not deed restricted from the beginning. And so I think we would have homes or apartments starting at $1,000.

probably $400,000, which even by Solano County standards is really affordable. I mean, you can't buy a new home here for $400,000. And we do that by really innovating on what we build and the density and then using the land much more wisely in a much more compact footprint.

So you want to get this built, presumably, correct? What do you think the timing is on this and how it's happening? And is there a chance it wouldn't happen and that it couldn't happen? What do you need to succeed to go forward? Certainly there's

interest in more housing in California. That said, a lot of people are, in fact, moving back. All those people who insulted California on their way out are now, AI is back. You can see it in San Francisco and the Palo Alto area. There's real growth. And Google killed it. They haven't moved anywhere. There's other things. So there's a little more excitement around

living in California than there was a year ago even, or two years, a couple years when you started this. What is the prospects and what's your biggest challenge? And if you had to go back and repair a mistake you made...

what would it be? - Yeah, I mean, first of all, I started this eight years ago, not two years ago. - Right, that's right. - I've been working on this for eight years. And so we've been through the whole cycle in California of excited, people are leaving, people are coming back. I think to your point of people are coming back to California, that makes the need for this even more prescient. Because if the AI boom continues and the salaries continue,

in the Bay Area, that's going to just increase the pressure on the housing market. And it's going to be harder and harder and harder for working families to stay in San Francisco or in Palo Alto. And so I think the AI boom is just another huge reason for why this needs to happen, because the Bay Area needs more housing. Otherwise, it's just going to be an oasis of the rich.

In terms of what we would do differently, I think we would have liked to introduce the project to the community differently. We were preparing for that when Connor wrote the article. We were probably a month away. This is a New York Times reporter. Yeah. Exactly. And so we were about a month away from wanting to talk about it.

I also wish that some of the elected officials had kept more of an open mind instead of condemning the project in the beginning. I think it's totally fair for people to say, you know, this looks like a really big idea. I'm not sure it works, but I'm going to stay open minded and I'm going to look at it when there's more details. I think a lot of people rush to conclusions.

without merit. And I think that's particularly concerning when they have presided over the situation getting worse and worse and worse for working families for the last 20 years, and they haven't been able to do anything about it. And I think we should be a bit more open to Scott's point about new solutions, because whatever is it that we're doing, California is no longer working for working families.

Yeah, I think that's a very good point. I just think when you're coming in hot with a lot of rich people and you've already experienced some of their behavior, you don't trust them necessarily, even if it's a good idea, which I think this actually is. Scott? Do you see this more as the folks who are funding this, and there's nothing wrong with the profit motive, but do they see an opportunity to...

find a place where there's less zoning requirements and they want to be in the business of development? Or do they see this as an opportunity? And the two aren't mutually exclusive, a social ill. How important is it? Is it a new form of governance or just bringing housing prices down? What are your investors up to here? When they sit down with you, what does success look like for them? Because these guys have enough money. That's ridiculous. They always want more money.

What do you think their objective is? Do they see this as a social good, or do they see this just as a great economic opportunity? - I think it's both. And I mean, we've been very clear from the beginning that it's a for-profit investment. And over the long run, this can be a pretty good investment. It does require kind of a 20-year time horizon, which is part of the reason for why I went to the people that I went to to raise the capital. It's much longer term, much more patient capital.

I think for all of our investors, it's a, I've started to say profit plus investment. And so if you look at the people who've invested in it, they all have causes that they really care about. And I think if you ask them, I can't speak for them, but for someone like Lorene Powell Jobs, I mean, a lot of her work has been about economic opportunity and economic mobility and sustainability. And whenever I talk to people

her or the team, those are the questions I get asked is how do we make it more sustainable? How do we make sure that teachers can live in the community? - The way you build it. - The way you build it. How do we make sure that we have, that it's not a food desert? How do we make sure that there's really high quality food available for kids in the schools?

When I talk to someone like Reid Hoffman, for him, Reid is an eternal optimist. He believes that we can solve things, he believes that technology can solve them, and he believes that a lot of the innovations coming out of the Bay Area have really made the world better. And so he asks, how do we make the opportunity as broad as we can possibly make it?

someone like Nat Friedman or the Collisons, they are really passionate about high quality walkable places. And so we talk about design and how do we make this an amazing place? I think Mike Moritz has been extremely invested in improving things in the Bay Area. I mean, he spent hundreds of millions of dollars in philanthropy in San Francisco trying to make it better. And so

When I talk to Mike, it's about how do we create homes that people who work in the Bay Area can afford and how do we make it... The last discussion I had with Mike about can we help nurses be able to live here instead of flying here from Idaho? I mean, that started to happen. It's so expensive to live here that nurses are flying in from Idaho.

Yeah, I think it's, you know, I think it is easy to be suspect of some of the people and intentions of them from the get-go because of past behavior. But, you know, I think a lot of, I think that at the heart of the good part of it is believing in California and California.

You know, one of the reasons I call my book a tech love story is because I do believe in the great possibilities and I hate what they've done to the place. So why don't they use the better parts of their nature to do things, which is I'm glad to hear you saying it's not going to be some demented smart city. You know, I hate the term. I hate the term. I've banned the term internally. Cities aren't smart. That's why they're great. That's why they're great. Exactly. Exactly. And if I can just comment on the investors, you know,

I think when I started working on this in 2016, there was this popular narrative that kind of venture capitalists and billionaires in general are wasting the capital they have investing in dumb messaging apps. And they should really do something in the real world to make life better for working families. And then three or four years ago during COVID, the popular narrative was how dare all of these people who've made their fortunes in California take the money and go to Texas and go to Florida and just take it away.

And I think we found a group of people who really believe in California, who really want to double down, and they did exactly what people have been calling for. Invest in hard things in the physical world with an uncertain payoff that requires 20 years patience and

that doubles down on california and so i'm really proud of the cap table that we have and i know why people um kind of see this as controversial but these are just people who left the bay area and they wanted to work for everyone i just want to say i i that's not even a question it's just that's a great point and some of the people on your cap table i do not think a great deal of but i i think

I think what you're doing here, assuming that you're being honest about this, you're exactly right. They're not going into space. They're trying to make this place more habitable. I think it's a really excellent point. If you could say anything, what is the level of cooperation or non-cooperation from either the state government or the federal government? Have they embraced this as another signal of innovation that will bring more people to California, or are they suspect of it and feel threatened by it?

You know, the state government and the federal government is not a unitary body. There's a lot of different stakeholders in there. But I think what we've seen in general is people are really excited.

Housing used to be a priority for the California government. To your point, Scott, it's become a priority for the federal government because house prices across the country have just gotten so crazy in the last five years. And so what we've seen is a lot of excitement from people saying, boy, if you can get the buy-in of the local community, we would love to help. And so I think the opportunity for Solano County, which is

which is a part of the Bay Area that really has been left out. One data point that is incredible, in 2002, the average household income in Solano County was 90% of the rest of the Bay Area. It was about $6,000 a household less. Over the last 20 years, the gap has widened to 30%. The average household in Solano County makes $40,000 less than anyone else in the Bay Area.

And the county hasn't gotten its fair share of employers. It hasn't gotten its fair share of tax dollars, infrastructure dollars. And so the opportunity that we've seen from state and federal government is to say, if you can get the buy-in of the local community, we would love to help. And I think there's a real opportunity to bring a lot of state and federal funds to Solano County.

and really make the county better for the people who live here. And it's a really special place. I mean, I moved here with my wife and two kids. We live here. We've made so many friends in the last year that we've been here. And I personally

really care about it getting its share of the economic opportunity in the Bay Area. And I think we have the most credible plan to do that that's been proposed here in the last 30 years. But what about the cows? What about the cows? One of the main towns there was Vacaville, which means cowville. That's true. You know, we have... I'm teasing. It's a good question. Just don't let Christy know I'm near anybody. Yeah, just bring in Christy. She'll take care of it. Yeah.

We're going to build an amazing place for the cows in the Greenbelt. You know what we're doing now? The community is going on about a third of the land that we're building on. On the rest of it, we're building solar farms. It turns out that the sheep really like grazing underneath the solar panels because they don't have to stand in 105-degree heat in the summer. It can be hot out there. That's the other thing. Yeah, exactly. And it's hot out in Solano County, much more than people realize how warm it is because the Bay Area seems like a cooler place.

environment, not out there. It's warm. You know what's the most special thing about designing this, right? It turns out that it's windiest in the summer. And so if you design the street grid correctly and you orient it correctly, the wind can cool it off kind of like it does on some of the islands, for example, in, say, Caribbean or the Mediterranean. Yeah, it's beautiful land out there. I love it out there. I think it's so beautiful. Well, in any case, Jan, thank you for coming on and answering questions. We'll be watching it carefully.

You know, you're right. You're 100% right. Bugging them to do bigger things is what I've been doing. And this is definitely a bigger thing. And they're not building space colonies. That's always a plus. You should come and visit. I'm going to. I'm coming out soon. I'm coming out in a couple of weeks. You're going to give me a tour. Okay? All right. Let's do it. All right. I'll see you then. Jan Schrammeck, thank you so much. Thanks, Jan. Nice meeting you. Great. Same here.

All right, Scott, that's kind of cool. Yeah, I think there's just a little too much secrecy around it. And some of the owners are kind of terrible people, but some of them are great. We'll see. I have a checkered history with some of the bigger players here. I think this is assuming he's being genuine and he sounds genuine. We need this. We need more housing. We need more innovation.

We need to restore the American dream, and a lot of it has been sequestered from young people because as soon as someone has a house, they become very interested in traffic and start making it impossible to have new housing. And with interest rates going from 2.5% to 7.5%, the average mortgage has gone from $1,100 to $2,200. In four years, we've gone from two-thirds of Americans being able to afford a home to one-third.

Yep, starter homes. That's what he's talking about. Anyway, we'll see where it goes. There's a great story in the Chronicle about to be rich in California. To be rich in the United States is $400,000. In California, it's $800,000 or $700,000. Anyway, we'll go on one more quick break. And by the way, San Francisco is coming back, and it's just going to get more expensive. Anyway, we'll be back for wins and fails.

Okay, Scott, let's hear some wins and fails. I think I shall start, if you don't mind. I think there's a story, just Jeff Skoll has closed down his participant media, which made a lot of cool films over time. And I felt sad about that. They've created a lot of amazing movies, Inconvenient Truth, Roma, and a lot of other movies.

Green Book, all kinds of stuff. And he was a former eBay executive. I've known him for a long time. He was going to do things addressing issues like climate change, civil rights, democracy-free press, and they're dissolving it. It just doesn't make money, that's all. And I think, you know, basic math, rich people don't like losing money eventually. But he was a progressive social change...

It had a double bottom line, but they just had to make money. Of course, they also made the Oscar-winning Spotlight, by the way.

So serious movies. He was making the very serious movies, but moviemaking is a profitable enterprise on most good days. So sad, sad to see. Glad he spent his money. But unfortunately, the numbers don't go out. So that's my fail. It's sad. My win is I thought President Biden had a good week in terms of a lot of stuff happening. And it also seems that there's a little more...

Even though it seems like the stuff, all the protests are getting worse, I think they are moving towards discussion, which I hope they do over the next couple of weeks in terms of people sort of talking instead of past each other, talking to each other.

So that would be my win, hopefully. That's my hopeful win. I don't know if it's going to happen. Yeah, look, there's a lesson there to young people. The sexier the industry, the lower your return on invested capital. There's just too much capital. Rich people. Whenever I meet someone who's a documentary filmmaker, I'm like, oh, so your spouse is rich. It's just the amount of money and storytelling is important. And I don't mean to be snarky. I think I know a lot of wealthy people are making a huge difference in the world because storytelling and creativity is a great way. Art is a great way to

to communicate on social justice issues. But kids, be careful. If you're not in the top 1%, don't go into the romance industries. It's going to be really hard, including this industry. The richest people can't figure out how to make money in this industry oftentimes. Anyways.

By the way, I'm still owning the dispensary in the whorehouse in that new Solana town. Can you call Jan and say that I absolutely want to be? You and I are going to retire there. I'm going to move there with a Filipino nurse with well-moisturized hands named Manny, who's 300 pounds. I'm going to be the little finger of the whorehouse and I'm going to have a dispensary and everyone will love me.

Everyone will love me. Oh, best little whorehouse. They could call it Scottsville. Scottsville, there you go. Okay, so my fail, I can't help it. I hate to give this guy any oxygen. This tech Zionism bullshit is...

I know. I've wrangled with this fellow. Balaji Srinivasan. And I wouldn't bring it up, except he has a huge following in the tech community. He does. Mark Andreessen called him having the highest velocity of genius ideas. I just want to read this because I don't, I think this shit is so fucking strange and weird. I want to make sure I don't get it wrong. He says, what I'm really calling for is something like tech Zionism, he said, after comparing the movement to the start of the biblical Abraham, Jesus Christ, da, da, da, da, da.

Balaji then revealed his shocking ideas for a tech-governed city where citizens loyal to tech companies would form a new political tribe clad in gray T-shirts. And if you see another gray on the street, you do the nod, he said during a four-hour talk on the Moment of Zen podcast. You're a fellow gray.

The gray shirts would feature Bitcoin or Elon or other kinds of logos. Y Combinator is a good from one of the city of the San Francisco in particular. Grays would receive special ID cards, providing them access to exclusive gray controlled sectors of the city. In addition, the grays would make an alliance with the police department, funding weekly policemen's banquets to win them over. Grays should embrace the police. OK, all in on the police.

said Srinivasan. What does that mean? That's, as I said, that means every policeman's son, daughter, wife, cousin, you know, siblings, whatever, should get a job at a tech company in security, and then they could overnight ask them to switch to their loyalties. To be clear, he has the right to say what he wants, but he should have greater fidelity to the meaning of the word. Zionism is people who support the creation of

and survival of Israel. This isn't tech Zionism. It's tech fascism. Get your words right. Your own police force, and then people who sign up for this techno-worship only have access to certain areas, and a slow creeping takeover of our police force, that's called fascism. It's happened before. You have a model for it. Tech's doing just fine. It has nothing to do with Zionism. But this shit is just...

It just strikes me that the most blessed people in America are the least patriotic. And also just constantly angry about something. They're just they this guy, I don't even want to go into it. We had a number of rounds with him at Recode and he was just always, as far as I was concerned, just angry.

I don't know what else to say. He'll come at me again. I don't care. Fuck you. So my win is actually, I do believe there's been so much media around what has gone wrong on campuses. I do think that some campuses are doing their best and getting it right. My win is President Linda Mills at NYU.

When I went to NYU and saw the protests, and also I genuinely believe, and unfortunately because it doesn't make for interesting media, that 95 plus percent of these protests are exactly what they should be.

They're peaceful. They're respectful. Students have the right to explore the boundaries of their intellectual thoughts and say things, even if they're vile, even if they're mean, even if they're whatever it is. They have that right as long as it's peaceful and as long as it's not in any way intimidating or harassing other people. And I do believe that the majority of these protests are

are that. It's just not interesting to cover when they're that. What Linda Mills did was when someone sets up a camp on private property, she removed them. When someone in any way intimidates anybody, she has them moved out and arrested. And to be clear, arrested is a really strong word. Almost all of them have their records expunged and they can come back to campus. They bring, as they should be, they're cutting a wide berth for young people. Where I want to draw sharp relief from

is I do not buy that professors have a First Amendment free speech right to go down and sow chaos. We are paying them. And if you are not helping take the temperature down, or you lack the critical thinking to not support an ideology where the gay students on campus, the Christians on campus would be summarily executed,

I agree you have a right to free speech, but try going into Walmart in the lobby and screaming white power. We have the right to fire you. And I think more faculty should be held to a much higher standard than being held right now. I think it is ridiculous that these faculty are claiming First Amendment or free speech rights at a private employer where they are at-will employees. But my win, I do think a lot of university administration who are in an impossible position right now

are in fact threading the needle and allowing kids the right to aggressively express their views regardless of whether or not we agree with them. That shit does not get coverage when there is a polite civil protest. What gets the coverage is when things spin out of control. But I think, anyways, I do think a lot of university leadership, and I'll use President Linda Mills as an example,

are doing their level best and striking the right balance or attempting to strike the right balance. Also, you're starting to see universities take a heavier hand sometimes and say, we have zero tolerance for anyone who intimidates or threatens another student. They have rights too. Yeah, yeah.

I agree. I fully, I think sometimes kids can say stupid things and I think they should be allowed to. Work, I agree. I had an interesting sort of demand about this and we actually both agree. It's like, if you work at work, you can't walk into work and do this. You can do it. You can just get fired. And you may not like it, but work somewhere else where you can do it. And by the way, First Amendment and free speech means the company can't prosecute you for it. Good. But they can fire you. Yeah.

Yeah, that's true. Anyway, I think we agree on that. But I do think students say stupid things. It's called youth. I have a, you know, I was, no, I get it. I was arguing, I was talking to a friend of mine who's, you know, who's very, very moderate and even liberal Jew. And he was saying, I just can't stand hearing the Intifada thing and this and that. And I said, I said, it's kind of reminded me when I was younger when they were there.

the straight people of Georgetown University would yell at all the gay people and say terrible, heinous things. And I remember thinking, was I unsafe or just fucking annoyed by these assholes? And I probably did feel unsafe at the time. Maybe I didn't. But it was, and I thought, even today, I'm like, I'll let them say their stupid shit because they ended up being wrong. So I don't know. It's hard. It's difficult. But it's very difficult to hear those things and kind of heinous for them to say it. Anyway.

Including what these tech fascists say, and that's what they are. You're right. Anyway, before we go, we have a Listener Mail episode coming up. We want to hear from you. Send us your questions about business, tech, or whatever's on your mind. We love Listener Mail. Go to nymag.com slash pivot to submit a question for this show or call 855-51-PIVOT. Sometime we'll bring the listeners in again. I've met a couple of them. They've come up to me at book events who are on our Listener

male call-in show, which was great. Okay, Scott, that's the show. We'll be back on Friday for more. Today's show was produced by Lara Naiman, Zoe Marcus, and Taylor Griffin. Ernie Natad engineered this episode. Thanks also to Drew Burrows and Neil Silverio.

Nishat Kerouac is Vox Media's executive producer of audio. Make sure you subscribe to his show wherever you listen to podcasts. Thank you for listening to Pivot from New York Magazine and Vox Media. You can subscribe to the magazine at nymag.com slash pod. We'll be back later this week for another breakdown of all things tech and business. On the menu today, fisting from a former New York Times number three bestselling author. That's right. Welcome to the dog pound here at Solana Ho House. Welcome. Welcome.

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