Transcript 0:00 [upbeat music] Disclaimers. One, the content shared in this podcast is strictly for informational purposes and should not be construed as financial or legal advice. 0:09 Two, the opinions expressed by the hosts and guests are solely their own and do not represent the views of their employers or affiliated organizations. 0:14 Three, none of the projects or companies discussed should be considered as endorsements or recommendations. 0:18 Four, while efforts are made to ensure accuracy, the information provided may not always be up to date or entirely reliable. 0:23 It is advisable to conduct independent research and seek professional guidance before making any financial or legal decisions. 0:27 Five, the hosts and guests of this podcast shall not be held liable for any consequences or actions resulting from the use of the information provided. 0:33 Six, all content, including text, graphics, and audio, is protected by copyright laws. Unauthorized reproduction or distribution is strictly prohibited. 0:39 Seven, any discussions on sensitive topics aim to foster inclusivity and respectful dialogue, but differing opinions should be expected and not attributed to the podcast creators or sponsors. 0:46 Eight, by listening to this podcast, you acknowledge and agree to these disclaimers, and you are responsible for your own interpretation and application of the information presented. Welcome everyone. 0:54 This is episode number three of the Intersection Four podcast. We have your usual crew here today. Uh, you have Hamiz, uh, founder of Fluid21. We have Brendan, founder of Athena Intelligence. 1:07 And you also have me, um, a random engineer and also just a random technologist, uh, reading a lot and, and exploring a lot of the frontier technologies and discussing with these fantastic brains that we have present. 1:18 We're gonna be talking about Threads, so the latest Instagram, um, Twitter competitor. Brendan has a house tour in 15 minutes, and I want, I want your input into the Threads, uh- Sure... discussion topic. 1:30 So let me share my screen. Um, so Threads, a Slack replacement for designed mor- uh, designed for marketers. I think it's just making a side joke here. This is actual threads.com. 1:42 It's different than Threads and Instagram app on the App Store, which is a Twitter, the Twitter killer, whatever, that we're gonna discuss. Mm. 1:48 But I think this company must have seen the biggest uptick in traffic that they've seen in their entire history. Yeah. So I just think it's like a really interesting... 1:57 And this happened too during the pandemic, where there was a Zoom, and there was a Zoom, Zoom Technologies for the actual Zoom company. Mm-hmm. 2:04 The Zoom, the, the other Zoom, had like a huge uptick in, in, in, in stock price because people were just confused. So- Yeah. I think this is kind of a funny- Their domain, their domain is probably worth... 2:14 Yeah, their domain- Yeah... is probably worth more than they put into that company. 100%, 100%. But, so okay, so- We need to watch this movie tonight on the right-hand side too. 2:23 They're probably getting a, a bunch of views. [laughs] Yeah. This drama war. [laughs] So Threads. So quick overview on Threads. 2:32 Uh, in case you missed, uh, the news and the fuzz over the last week, Instagram Meta, uh, Instagram's parent company, launched a new company or new product, should I say, called Threads, which is pretty much the same as Twitter. 2:44 It's the same idea of Twitter. It's a social media, text-based social media. Uh, the company saw... 2:50 The, the, sorry, the app saw 30 million downloads in the first 24 hours, and it reached 100 million downloads in the first week. This makes it, by like a lot, the most downloaded app in history. 3:02 Um, there's rumors, uh, there's this, there's this company called, um, sorry, there's this platform called Blind, which is like a platform for tech employees to discuss. I can, I can just share here in a second. 3:14 Um, but basically, there's rumors in Blind that Threads was built by a team of 10 to 20 people in a handful of months, which is in and of itself a huge deal. 3:23 Like, the fact that a company like Meta was able to build a full on product and there's some caveats that I guess we should mention later on about the, the, the, the quality of Threads compared to Twitter. Mm. 3:35 Um, but the fact that they were able to build something like this in a handful of months with such a small team is a really interesting changing phenomena. 3:43 And I think this is not the first time that something like this is happening, that a big company is starting to deliver, um, with smaller teams in a leaner and faster way. 3:50 I think this was started by, uh, when Elon took over Twitter, and then Twitter started shipping a lot faster, and Elon laid off a bunch of people, like 80% of the workforce was laid off. 3:58 I think it's really interesting to observe that big companies are starting to realize that you don't need teams of hundreds of people to, to, to deliver o- on product results. 4:09 You just need a core team of highly dedicated people and highly skilled people to deliver in a timely manner. And I also think that the, the, 4:17 the need for speed in tech has been resurfaced by the recent AI, uh, race that we're seeing. So everybody's realizing we gotta move faster, we gotta ship faster, and people are going leaner and, and, and faster. 4:29 So it's just kind of an interesting thread to see. Mm-hmm. 4:31 The last thing that I would point out here is, uh, the vast majority, and this is the, the screen that I'm sharing here, um, the vast majority of the news that I've seen is, um, related to Elon. 4:46 S- so, so it, it's interesting to see how the media is framing Threads as a better alternative to Twitter, not on the merits of the product, but on the merits of the founders, saying Threads is going to be a happy place and Elon is this extremist that nobody likes, and then we're going against Elon and we're gonna elevate Threads. 5:05 So it's just really interesting to see how, how the different perspectives are, are, are happening. 5:10 So as Twitter continues to implode, advertising pins their, pin their hope on, on Twitter or Meth- Meta Threads has Twitter on the ropes or, um... 5:20 Anyhow, just interesting to see the dynamic of how Elon is being framed, um, and how so many people in, in traditional media outlets is like Elon, and then the media is he- heavily favoring Threads as a better alternative to Twitter. 5:32 Mm-hmm. I'll pause here. I wanna get the pod's original thoughts on the- Yeah, go ahead Brendan... Threads launch. 5:39 My, my, my, my two quick comments about the, like, rise to, um, 100 million downloads as well as this 10 to 20 person team, I think is completely BS. And, and, and the reason for this is, is twofold. 5:51 One, what, what a download means today was completely different what a download meant a year ago, 10 years ago, 20 years ago. People are on their phones more, the whole, the whole world's connected. 6:03 So if you adjusted, like, like the same way we adjust for inflation, if you adjusted what a download looks like today versus last month, versus last year, versus 10 years ago, I think this was probably a run-of-the-mill product, if not a pretty average productAnd then when we think of, like, these 10 to 20 people that built it, I, I, I bet they're great engineers. 6:22 I bet they crushed it, and it went extremely fast. But you have to remember the scaffolding for them to do that was- Mm-hmm... built on the backs of Meta over what- Mm-hmm... 20-ish odd years. 6:35 Um, so they had-- they didn't have to do auth. That was captured by, by Instagram. Maybe it had an additional side auth or the, the entire scaling libraries. Um, probably half the UI was ported over. 6:46 So we say, like, 10 to 20 people built it. Sure, we can call it that, but I would like to, like, reimagine that as, like, 1,000 people built it over- Mm-hmm... 20 years, and then- No, I agree... 6:55 10 people, like, uploaded the latest, uh, app store- Yeah... uh, test bed. I, I, I agree with you. 7:01 I agree with that because I think, like, when you have the internet, to build the internet, you obviously go faster, right? 7:07 Like, when the first Facebook was launched, like, the only way people found out about it in the other schools is when a kid from this school went to the other school and talked about it, right? Yeah. 7:16 But now, the day that Threads was launched, the entire world knew about it, right? So when i-i-it was kind of like that- It had a lot of momentum. Yeah. I-it was... They already had an account. 7:25 It's kind of like how crypto, like, grew. 7:27 The, the, uh, the, the knowledge about crypto and the knowledge about these technologies, the reasons they grow so fast is because you have the internet to talk about the new things on the internet, right? 7:36 And so information just flows so fast, and that's why when you look at these charts, the charts are getting shorter and shorter and shorter. And not every two years somebody beats the target, right? 7:47 Like, six months ago, ChatGPT beat the target. Well, six months now, now these guys beat the char- target. 7:53 And I think Brendan's spot on that, and, and Sam as well, about the pace that you need to keep to do this, that adjusted for these things, it's maybe just a regular launch. 8:05 Uh, but you're gonna see this happen again and again and again the more that we get interconnected. Yeah. 8:12 And I, I also wanna point out that I've heard some people saying that, that Threads feels like a better, better UX and better app than Twitter, and I think that's, like, absolute BS. 8:21 I w- I actually found this, this discussion on, on Blind. Someone from eBay, uh, posted, "Yo, who built this app? Is it running on, um, EC2 Nano or something?" 8:31 And it's, and, and it's actually really funny because when, when you go and you use Threads, it, it-- I do feel like it takes longer to load. I also feel like, well, you can clearly see that you can't search for topics. 8:41 You also, um, can't actually have a feed only for the people that you follow. 8:45 In the feed that you have, maybe just by design or maybe it's just, like, they didn't have time to implement a following-only feed, but in the feed you have a bunch of people who you never follow who are just, like, seeding your feed with content. 8:54 But it's just, it's just a funny thing to see here. "Totally rushed and half-baked. Shocked Meta would ship product at, in this stage. No chronological following only feed. Can't even search topics. It's called MVP. 9:04 The V part here is available." So just thought it was kind of a, um... Just a funny, a funny way to, to capitalize on- But, but you know there's a lesson here, right? 9:12 The lesson here is for all founders that if Meta can ship something like this and get that network effect running, you should not be spending nine months, like, perfecting the product, right? Like, 9:26 th-this is not, uh, the, the winner of these, th-this game, especially today, is not going to be the best product. That just, that's just what it is. 9:33 Unless it's some infrastructure, like, super technical solution, then maybe you win on the merits of your product. 9:41 But for the vast majority of businesses out there, you should be-- I say this to entrepreneurs all the time. You should be ashamed of the first version of your product. That's when you know you've gotten it right. 9:51 If it's, like, perfect and you love it and you're proud of it, I'm sorry, you waited way too long and somebody else got to market and did it faster. 9:58 So the lesson here is if a company like Meta can do this and put this out there with all the flaws, and they know the flaws. It's not that they're-- th-this has not been discussed internally. They know this is a problem. 10:09 But if they can put it out there, the startup has no excuse to drag along their development. 10:15 They need to get out there, get the network effects, because that's what's gonna drive the value, not how perfectly aligned your feed is. I would actually take devil, devil's advocate point here. 10:26 I, I agree with you totally on this. I just wanna make one point that goes against this. 10:30 I think we're starting to interact with some technologies in which taking that approach of shipping fast, um, and not accounting for all the use cases or not accounting fully for an entire product development cycle is objectively dangerous, and the easiest one is just AI. 10:46 I think we're-- especially when you're building foundational models, um, I think that big companies like Meta and, and other big companies shouldn't have, shouldn't be adopting this mentality of move fast and release early when it comes to technologies that we're still unsure how, how they're going to affect society at scale. 11:03 And I would even add crypto to a degree in, in, in that, in that point, right? It's like you don't really know how this technology that you're releasing in the world is going to impact the world. 11:12 Um, so I think some caution should be, should be implemented in the process of developing the product. 11:17 But I think for Twitter or, or for more, like, customer-facing products or social media products, it's not as important. And I think, like, I just saw this tweet as well by Jack Dorsey. 11:25 "We wanted flying cars instead, instead we got seven Twitter clones." I think for Twitter clones or for TikTok clones, speed is super important. 11:35 But when it comes to releasing the next Bard, the next ChatGPT, uh, the next automated drone system, I genuinely think that-... security and- And then, and- Thought- Thought put in is important... 11:44 yeah, I'm not saying release- No, but I, but I wanna, I wanna draw-... a weapon- I think it's important, though. Yeah. No, I, I- Without testing. Yeah... 11:52 feel like AI, AI, AI a lot of people wouldn't consider to be a weapon, right? Um, I think, like, the same, the same companies that are releasing some of these platforms, Meta is going to be releasing LLMs as well. 12:02 So if Meta takes the same mentality of, "Oh, we're just gonna release this super quickly the same way that we released Threads"I think that becomes a dangerous, a dangerous game to play. Yeah. 12:11 So just wanted to make that comment. No, no, no. I- I, I- I agree. And like, I would actually argue that, that social media is actually a very dangerous tool, right? 12:18 [chuckles] Like, it, it, it shapes, like, everything- Yeah... from politics to the military response to wars. Like, it shapes everything. So it's actually a very critical thing. 12:25 Uh, the, the reason I was drawing that contrast was to show that if you're a five-person team and you're not moving at least at the pace of a 50,000-person team, then you are doing something wrong. 12:38 I was not saying if you can get 100 million people, if you're creating a product that can affect the lives of 100 million people, you should not be careful. 12:45 Like, I think actually at that scale, it's your responsibility to be careful. 12:50 But you will find that there'll be a five-person team that will spend two years to build a product just like Threads, and there's just no e- explanation, no justification for that, right? Yeah, yeah. Totally. 13:00 Because Threads is gonna go out there, and all this, uh, all, all this hate that they're getting is actually feedback from customers, right? Like, that's what you want to... 13:09 You want to hear that quickly, and you want to iterate really fast. And so the... I, I completely agree with you. 13:15 Like, there's things that need to be done when they are affecting a lot of lives and when they're, they could affect them very negatively. 13:23 Uh, but for, uh, I see pre-seed startups [chuckles] that take five years in development, and that's just not necessary, right? Like, uh, it, it, it's not the right approach. 13:33 So strategy-wise and market-wise, what is, what is your analysis of this? Like, what's, what is the strategic analysis of, of the Threads launch? What do you make of it? 13:41 My, my, my learning is, uh, the same one I've had every few years when it comes out of Meta, is just keep copying. Just what... Don't, don't reinvent the wheel. Copy everything, and then you just- Okay. I, I-... 13:52 build on top of it... I do have a few points to make there. I have a few points. No, no. No- But I, but I wanna let you finish. Go ahead... real quick. 13:57 I wanna show one more launch that happened two weeks ago, which kind of went under the radar. So Keith Rabois, um, super prominent investor over at Founders Fund, founded a company about three years ago, OpenStore. 14:09 Uh, allegedly they were gonna go out to compete with Amazon, or somewhere in that flavor. They actually just launched, uh, on the 26th, and they got tons of, we'll call it feedback. 14:21 Um, effectively the, the, the takeaway was: What is this? Um, this looks like the most ghetto version of Amazon. [laughs] And it was really cool, because someone who, like... 14:32 Someone who had every opportunity maybe to, like, hold off. He has the money. They took a billion dollars in funding. 14:39 Like, they could have waited, like you said, Hamiz, three, four years before they launched, and could have fully tried to copy Amazon. 14:45 Um, basically the takeaway is he's coming out and saying, "I'm gonna stand up for an MVP that I need to launch. Um, it looks kind of funny, but who knows? 14:55 We, we might all be laughing in a, a year's time when, uh-" I think- "... Twitter folds and we all move on to the next thing." Yeah. I, I actually like their approach. 15:02 I think what, what's, what's unfortunate that's happening is regardless of all the flaws, you know, Twitter was supposed to start going in the direction of being more open and less censored, right? 15:12 And we're actually going back into, uh, the, the path of, like, more censored and more controlled, and that sits better with the news media. That's why they're all over it. Yeah. 15:22 That sits better with, uh, the advertisers. That's why, you know, Meta's doing it. Um, and same thing here. You know, every time we have a competitor to Amazon, that's a way for us as consumers to get more choices. Yeah. 15:34 But we wanna shoot ourselves in the foot and back the people that give us fewer choices. Um, and that's just unfortunate, but that's how it is. All right, boys. I gotta hop off. Brendan, do you have your horse up now? 15:46 Okay. Yeah. Good to have you. Let's just wrap up here. Good seeing you all. Good to see you. Peace guys. I wanna, I wanna show this real quick, uh, to the two of you guys. 15:54 This is probably the best analysis that I've seen so far on Twitter. Uh, this is a friend of mine, Alex, also, um, based here in, in the, the greatest city in the US. 16:03 Um, good friend of mine, basically just made a, an interesting thread on, uh, his prediction and his analysis of, of Meta. So it goes basically like this. I'm just gonna walk you through, uh, this quickly. Mm-hmm. 16:14 So basically saying Zuck launched this because many people hate, um, hate Elon. 16:19 Um, there's a, there's a lot of debt at Twitter, um, that is limiting its options, and there's been some recent issues with Twitter and Twitter changes and, and the way that, uh, that Elon is handling Twitter. Mm-hmm. 16:31 So he believes that he's gonna achieve the following. He can reach n- new revenue streams, more locking from brands, and this is something that I'm actually seeing a lot of people speculating on. 16:40 They're thinking that the reason why Zuck was launching Threads is because he, he wants to start generating a lot more text to be able to train, uh, Meta's large language models on. 16:49 Because if you think about it, Meta is really good at, um, image data, really good at video data, but they're lacking, and they've been lacking for a minute. 16:59 The only source of, of text data that they have is through captions or WhatsApp, and there's some, like- But WhatsApp is huge-... essentially... Sam. Like, WhatsApp- It's, it's huge. 17:07 It's huge, but I- People, people spend, people will spend more time on WhatsApp than they ever do on Twitter, right? Like, I, I will spend... 17:14 Uh, I will probably send 1,000, uh, lines of, of text for every one line of, uh, on WhatsApp for every one line of text that I send on- But the comment that I was gonna make on WhatsApp- WhatsApp... 17:23 is that I think there's some concerns about using that data- Yeah... because that's, like, far more private data than a public post that you make on Twitter, right? 17:29 So maybe there may be some concerns with using some of that data to train large language models. He doesn't care about privacy. Uh, I mean- Zuckerman doesn't care about privacy... he may not. 17:36 He may not, but the public may, right? Mm-hmm. 17:37 If, if, if a huge LLM comes out that is superly well trained and there's no text, uh, data to be found in Meta other than in WhatsApp, people are just gonna figure, "Did you just train- Mm... 17:46 this, this model with WhatsApp, um, L- with WhatsApp data?" And I think that could be, like, a concern that is gonna reflect in the stock price, and then, uh, therefore the board would care about this. Mm. 17:56 But I think there's a really interesting take here that this is... A- another play here is to generate a lot of text for, for Meta. But he says, um, however, this is an asymmetric bet. 18:06 It's a negatively asymmetric met- bet for Me- MetaAnd he's saying-- He compares the revenue that Meta has generated over the last couple of years, and he compares that with, uh, the revenue that Twitter generates, and he says, "Even if Meta can completely over- overthrow Twitter and take over the entire market share, it would only represent a 4% revenue increase, uh, for Meta's numbers." 18:30 So he says the opportunity is not big enough for Meta to be doing something here. 18:33 They would have to, like, be better than Twitter and buy a lot to be able to actually have a representative, a, a representative, uh, impact in, in Meta's revenue, which is debatable, but I think it's interesting. 18:43 But then network-- You know, yeah, but, but the, but the, uh, network effects are far greater than Twitter ever got, right? 18:48 Yes, but that's also, that's also another point that he makes, the network effects here, and saying, yeah, you already have millions and billions of people on your platform, but taking those people away from your platform onto a new platform is actually gonna be hurting your revenue. 19:01 Because if you have a user that starts spending five minutes more on Threads as opposed to Instagram and consumes X less ads while they're on Instagram because they're now on Threads, that's gonna be hurting Meta's revenue. 19:13 So he's also making the argument that this is gonna be cannibalizing into, into, um, into Meta's or Instagram's core revenue, which is an interesting argument as well to make. But I agree with you. 19:24 The network effects here are infinitely bigger, and there is the opportunity to reach a lot more people. 19:28 But unless they figure out a clever way to monetize Threads immediately and not have that cannibalize against their other products that already drive a lot of revenue- Mm-hmm... then this is gonna be an issue. 19:37 That's actually what's, like, uh, working for them right now. 19:39 At the same time that Twitter is becoming uncool because it's starting to charge for things and putting limits on things, people can move over to Threads and it's still cool. 19:49 There's no ads, there's no subscriptions, there's no nothing. On one side, you have a, a, a levered buyout, right? Like, and they need to pay their interest. 19:58 And it doesn't matter whether Elon Musk wants to do it or not, he has lost 60% of his revenue in the last year from advertising, and advertising made up 90% of their revenue before this. 20:09 Now what he's trying to do is, in the middle of, you know, this, this bullet train, like, he wants to take his revenue from being 90% based on advertising to only 50% based on advertising, and he wants the rest of it to come from subscriptions. 20:23 Now, that's a tough sell that makes your platform look uncool, right? And y- people are coming over here to Threads, there's no ads, there's no nothing. That's just like a cleaner, better, uh, Twitter. 20:35 So, uh, it's actually something that, uh, in, in the social network, like, uh, if you remember, like, Mark Zuckerberg was fighting back against his, uh, CFO, I forget his name. 20:45 Um, and the CFO wanted to run ads, and Mark Zuckerberg was like, "No." Like, the reason Facebook works is because it's cool. We're gonna run ads once we already get to those numbers. So I think 20:56 Elon Musk can't afford to not monetize the platform. Uh, Meta can afford that, right? And can afford that for many years. And once they've consolidated the market, then there's nobody left. 21:09 Like, there is no competitor, uh, when it comes to, uh, video, uh, when it comes to text, when it comes to, uh... 21:17 Like, then you really don't have a competitor, and then you can really squeeze the lemon and, and make the returns on the back end. I actually disagree with you. 21:24 I think, uh, Meta can't afford to, to keep Threads unmonetized for a very long time. I think we're gonna see ads on Threads by the end of Q3. Mm-hmm. 21:34 Maybe, maybe Q4 tops, um, because, like, the, the point that I-- the, the point that Alex is making, which I actually agree with, this is actually gonna be cannibalizing, um, Instagram and, and Facebook's usage and, and time spent on the platform, which is the most important metrics for this social network. 21:50 Um, I, I do think that for this to succeed, uh, Threads needs to just start pulling users from Twitter that, that wouldn't just be only Meta ecosystem users. 21:58 Um, and I think that's, that's fair, but I-- this is Alex's argument that I somehow agree with, and you al- you almost feel it as well. 22:05 Like, the thing that you use Instagram for is so different than the things that you use Twitter for, at least us, I feel like, in, in, in our line of work. 22:13 I feel like we use Twitter for intellectual discussions, um, sometimes engaging with politics, engaging with, like, thought leadership and so on and so forth. And you use Meta, Twitter-- Uh, sorry. 22:23 You use Meta and Instagram and Facebook for social things, right? Social things. Right now, the bulk of the users in Meta, uh, in, in, in, in Threads are coming from the current Meta user base. 22:35 So it's all people who already use Instagram, because the Instagram sign-up flow was super simple, a couple clicks and you had the app and you were ready to go. 22:42 So, definitely the bulk of the Threads users right now is Meta-based users, or Instagram mainly, um, users. 22:49 To start pulling in people from Twitter, I think Threads needs to start catering for a different group of people, and I think Twitter does this really well. 22:58 Twitter, I don't know if naturally or deliberately, became the place for this type of discussions here. 23:04 It became the p- the place for intellectual content, in-industry leaders, for add-ons to basically just express themselves, for a lot of nudity and a lot of creators, and for a lot of political and, and free speech-based de- uh, debate. 23:16 Mm-hmm. A lot of that I don't think is gonna be moving to Meta or to a Meta-based platform anytime soon. 23:21 So I think Threads is going to struggle significantly to be able to capture marketplace, uh, uh, market share from-- market share and users from Twitter. 23:29 But they, they don't, they don't need to actually do much to really put, uh, Twitter in a really tough spot, right? Like, Twitter was bought- For sure... for, what, 44, 45 billion. 23:40 The estimates are, like, after you lose 60% of your ad revenue, which is essentially all of your revenue, like, you're not worth more than 10 or 15 billion now, right? 23:49 And this was all before this whole thing started, right? 23:53 So even if they just siphon off 10 or 20% of the, the core Twitter users, right, like they will hurt Twitter enough where it co- it will continue to be a 200, 300 million person platform. 24:07 It will continue to have, like, something like that. But the dominance that it has today on the text-based kind of interaction, I don't know if it'll ever be able to reach that again. 24:17 Because even if they are only slightly successful at kind of splitting up that market, they would still hurt Twitter quite a bit in that process. 24:27 And, and, and the way that it stands today, Meta has far more financial capital to go fight this fight, right, than anybody else. Yeah. Um, but- No, I- Yeah, let's wrap it up. Uh- Yep. 24:40 I just wanna give a shout-out to Alex. Thank you for the thread. It was super insightful. Uh, huge shout-out, and you guided the discussion to the point here. But- Absolutely... yeah, let's wrap it up. 24:48 Time will tell what happens between Threads and, and, uh, and Twitter. But yeah, thank you folks for, for joining us in this interesting discussion, and we'll see you all in two weeks. Mm-hmm. Take care. Thank you all. 25:04 [outro jingle]
