Pouring Champagne Onto Rap Stars
John:
Yeah, my default is not to ever accept any invitation to do anything social.
John:
So that serves me well at WRC.
Casey:
Hey, so you had an interesting week.
Casey:
A little bit.
Casey:
Anything happen?
Casey:
Where's your car?
Marco:
That's the interesting part.
Marco:
I don't have it yet.
Marco:
I might be getting it tomorrow or the next day or maybe this weekend.
Marco:
It's the same BS.
Marco:
Oh, it's in transit.
Casey:
So yeah, anything else happen?
Marco:
Yeah, I guess Tumblr sold.
Marco:
So you hear?
Marco:
So I hear, yeah.
Casey:
Any thoughts on that?
Marco:
Yeah, I mean, I don't want to rehash my blog post too much, but...
Marco:
I mean, what do you want to know?
Marco:
I don't know.
Marco:
Where should I even begin?
Marco:
There's a lot to cover there.
Marco:
There's practical aspects of who they're selling to, what they might be doing, why they might have sold, why this is good or bad, what this means for Tumblr, what this means for me, what this means for you, what this means for the animated GIF format.
Marco:
I mean, there's so many things.
Marco:
Where should I begin?
Marco:
All right.
Casey:
How about you start extremely selfishly and myopically, and you can blame me for this when you get a lot of flack for it, and then we'll migrate our way out to whether this is a good fit for the two companies.
Casey:
Does that sound fair?
Marco:
Yeah, it works.
Casey:
So you've bought how many yachts, how many helicopters, and I do believe I speak for John in asking, when is his Ferrari arriving and when is my Aston arriving?
Yeah.
Marco:
Well, first of all, I should also mention the other awesome thing that happened this past week, and that is that my wife and I visited the Syracusas at their house under that tree.
John:
He didn't park under the tree, though.
John:
I warned him off.
Marco:
No, no.
Marco:
We visited the house, and I stood under the tree.
Marco:
Did you get bonked in the head?
Marco:
I managed to stay conscious and dodge all the falling acorns.
Marco:
However, I did witness the destruction that they have caused on these cars.
Marco:
And I do agree with John that if he's going to park a car in his driveway, it would be a shame if it was a really awesome car getting all those dents.
Marco:
However, I will also say that one block away from John, I passed a brand new black F10 M5 parked on the street.
Casey:
So that's where your car is.
Casey:
Yeah, right.
Casey:
Somebody else has it.
Marco:
Exactly.
Marco:
And there were lots of nice cars in John's vicinity that were parked on the street.
Marco:
And so I think maybe street parking might be good enough.
John:
Well, you can do that for half the year.
John:
You can't street park in the winter because they plow.
Marco:
Oh, they don't allow it or you shouldn't?
John:
No, you can't.
John:
They don't allow it overnight anyway.
Marco:
Okay.
John:
Yeah.
Marco:
Although, how many acorns are there in the winter?
Yeah.
John:
Yeah, you know, something could be worked out.
John:
You weren't in my garage, but it's a small garage.
John:
I could wedge a car in there if I need to.
John:
But the thing about those cars, how they're both covered with dents, for the most part, all those dents were created early on before I got wise to what was going on.
John:
Certainly the ones on the Civic were all made before I realized what was happening, because...
John:
You just notice it.
John:
And then the Accord, it's like, well, try to minimize it, but we didn't care that much.
John:
If I had a fancy car, I would either park on the street all the time or tuck it into the garage.
John:
In both places, it would be totally safe.
John:
But the garage would be tough because you can't pull the car into the garage with kids because then they can't get out because they can't open the doors because the garage is too small.
John:
So like I said, I would need an entire new house to go with the new car.
John:
Maybe, like I said, maybe one of those things like the apartments in Hong Kong or something where the car comes up in an elevator and then you can look at it all day behind a big glass wall.
Marco:
There you go.
John:
Yeah.
Casey:
So the visit was good, though.
Casey:
I am very jealous.
Casey:
You and I had briefly colluded and I had thought about perhaps crashing your visit.
Casey:
But as it turns out, I had a very busy week of going to prom, amongst other things.
Casey:
Or weekend, I should say, of going to prom, amongst other things.
Casey:
And that's not a joke, and it's a story that I'm not going to bother telling.
Casey:
But I was very disappointed that Aaron and I couldn't join you guys.
Casey:
That would have been really awesome.
Casey:
But it was a good visit.
Marco:
I mean the original plan was that I would drive my new car there and that would be fun.
Marco:
New car didn't get here in time.
Marco:
And we were going to Massachusetts for other reasons.
Marco:
So we figured let's still visit the Syracuses even though I had my old slow car.
John:
Anyway.
John:
You had to drive the crappy BMW.
John:
It was like torture practically.
Casey:
It's terrible.
Casey:
First world problems.
Marco:
We should probably move on from that topic.
Casey:
So let's talk about how you're filthy, stinking rich and never have to worry about money except you do.
Casey:
Oh, God.
Casey:
Because it's not quite that simple.
Marco:
There's two things on this topic that were really good.
Marco:
Here, this is the link to one of them.
Marco:
I'll paste it in the chat.
Marco:
I'll put it in the show notes.
Marco:
It's by Dave Weiner from back in the year 2000, back when all the planes were supposed to fall out of the sky and that one guy got a really overdue blockbuster bill accidentally.
Marco:
So in the year 2000...
Marco:
It was basically an article about, you know, theoretically thinking about how much money do you need to, like, be set and be fine and be secure?
Marco:
And then how happy would that actually make you in practice?
Marco:
And he makes a number of good points.
Marco:
If you don't spend your money totally irresponsibly, if you only buy things that you'll actually use, so that rules out things like 15 different cars.
Marco:
You're probably not going to use 15 different cars.
Marco:
Only buy things you're going to use and don't be totally crazy about it.
Marco:
How much money do you really need before you can just live off the interest and be fairly secure?
Marco:
Yeah.
Marco:
And his point is that it's probably lower than you think once you start realizing, like, well, if you exclude things that you won't really ever use, then it's not that much.
John:
Why would you exclude things that you won't use?
John:
What's the whole point of being rich?
Marco:
Well, one of his points, which I thought was hilariously true, and I might need to think about it at some point, he said...
Marco:
He's like, then we get more practical buying things like second houses, third cars, vacation homes, big things that I wonder if most people would be comfortable actually maintaining.
Marco:
Three cars have to be registered three times a year.
Marco:
Your second home needs to be furnished and maintained even when you're not there.
Marco:
You say you can hire people to do these things for you.
Marco:
Ah, then you have to spend your life dealing with employees.
Marco:
Is this happiness?
Marco:
It might not be as happy as you think.
Marco:
And I think this is so true.
Marco:
It's like, I just sold my fun car because I didn't like having multiple cars.
Marco:
It was so inconvenient in so many ways that I'd rather just get one great car instead of having one decent car and one fun car.
Marco:
I'd rather have one bigger fun car and just combine the roles.
Marco:
And that's what he's saying here.
Marco:
If you start limiting yourself to only things that you actually would feel comfortable maintaining without being too much of a pain in the butt,
Marco:
then uh you know then then a you don't need as much money as you think to reach that point and b uh money won't make you happy by itself the chat room got it the same thing i was thinking it's like you have to break through that barrier so that you can hire people to deal with the people that you hire to maintain your other homes
John:
Like that's the breakthrough barrier of being rich is like, okay, well, no, I don't want to deal with the second house and worrying about it and dealing with employees.
John:
You have to get all the way through to the point where you can hire people to deal with the people that you hire.
John:
And then you just have to hire like maybe two, three good people and you're all set instead of having to deal with like incrementally as you buy more things, having to hire more people to deal with it.
Marco:
But I feel like that's a whole other level.
Marco:
It's the same reason why there's this ancient Joel on Software article that talks about enterprise software pricing and how there's very little software priced between $1,000 and $50,000.
Marco:
Because once you cross over that threshold of $1,000 or so,
Marco:
you need to start sending salespeople out to businesses and everything, and your costs go up tremendously by having all this overhead of convincing the business that it's okay to spend this kind of money, so you need to raise your price.
Marco:
There's this big price gap.
Marco:
I feel like, similarly, there's this big rich person management gap where you can't
Marco:
It would suck to hire a person to manage your vacation house for you.
Marco:
And in my opinion, it also sucks to maintain a vacation house.
Marco:
My in-laws have always had their regular house and their vacation house.
Marco:
And my mom, she used to have the same setup.
Marco:
Now she's back to one house.
Marco:
But maintaining two houses really does suck.
Marco:
Like...
Marco:
my my mom and my in-laws they they like doing it so that was fine you know they that was fine for them but you know maybe it's fine for merlin uh but i think like the idea of maintaining multiple houses like it's this for the same reason why i didn't want two cars anymore like i just i hate all that crap and and you're right yeah like i guess like i guess like the super rich will then have have tiers of people that are maintaining them but
Marco:
A, that's really expensive, and so you have to be substantially rich to even manage that, and B, even if I got that kind of money, I don't think I'd feel good about spending it like that.
Marco:
Like Tiff and I were talking, once the rumors started swirling about the Tumblr thing on, I think it was Friday night when the rumors first came out, we started talking like, okay, what if this is real?
Marco:
What will we do if we get a chunk of money from this?
Marco:
And we were talking through it.
Marco:
We're like, you know, I don't think we're really going to buy anything immediately.
Marco:
And I don't think we're really going to make any substantial changes in our life.
John:
You didn't tell her about the PCI Express SSD, I guess.
Marco:
I told her about that last night, yeah.
Marco:
It's installed for you guys.
Marco:
This is how much I like you guys.
Marco:
It's installed in my computer right now, and I'm not using it yet.
Marco:
Because the transfer would have taken too long, and I would have run over into this show.
John:
Yeah, so this is how much I like you guys.
John:
You decided to move your email and try to copy all your data at the same time.
Marco:
Yeah, the email was a separate issue.
Marco:
I was actually deleting 80,000 notification emails from PayPal from various Instant Paper subscription things over the years because every time PayPal does anything, they email you, even if it's something like that where an API would be a lot better.
Marco:
Nope, nope, somebody has to get an email.
Marco:
Oh, God, PayPal.
Marco:
Oh, they're so, so bad.
Marco:
Please, I pray to the gods of programming out there, don't let anybody ever use PayPal again.
Marco:
By the way, I know this is off topic.
Marco:
I guess we'll come back to it when it's launched.
Marco:
But this whole Square Cash thing looks really interesting.
Marco:
You see this?
John:
The white thing that your iPad goes into to make a point of sale?
Marco:
No, that's the register.
Marco:
Square is apparently beta testing or by invitation only testing a service where you can send anybody what appears to be an ACH payment for 25 cents, no matter what the amount of the payment is.
Casey:
To any email address.
Marco:
To any email address.
Marco:
And then they log in and they claim it and then it gets deposited into their bank account.
John:
You mean their fee is at 25 cents?
Marco:
No.
Marco:
Yeah.
Marco:
And if true, that would make it substantially cheaper than almost any other easy way to send amounts of money larger than a few dollars.
Marco:
It would be very, very nice.
John:
Yeah, because Stripe does like 3% or 2.9% plus 30 cent minimum or something like that.
John:
Everyone has a percentage.
John:
So if you send someone 10 grand, all of a sudden it starts to be spendy.
Marco:
Right, exactly.
Marco:
And so if you're buying something for $1,000 or $500 or something online, and if the vendor, or if you are the vendor, if somebody's eating 3% off of that, that actually adds up to be good money.
Marco:
And...
Marco:
For the most part, there really isn't a good way to do big transfers like that, at least in the U.S.
Marco:
I know the rest of the world has all these electronic payments in very common usage.
Marco:
We really don't in the U.S.
Marco:
Everything here is backwards.
Marco:
And you can mail somebody a paper check, which I don't even know if people in the rest of the world even know what we mean by that.
Marco:
You would spell it with a Q-U-E at the end.
Marco:
um and it's it's like i feel like the rest of the world looks at the way we deal with money in the u.s with transferring money the same way like we look at our parents if all they ever used were those vacuum tube things they never used atms you know like it's just so backwards anyway
Casey:
but what else do you want to know about tumblr i forgot i lost track so you did not know in advance you were not briefed that's correct and so well so i can't actually this is not for the show this is just for me what happens when you're sitting at home on a friday night and you see holy god the company that i have at least a shred of interest in is going to sell for a billion dollars like what do you think how do you react to that
Marco:
Well, I was very cautious in my emotional response just because it wasn't definite.
Marco:
I didn't hear about it in any kind of official capacity until after the press release went out on Monday morning.
Marco:
So, like, you know, I learned in the press the same way everyone else learned.
Marco:
And... Did that bother you?
Marco:
Not at all.
Marco:
No, because, think about it, Yahoo's a public company.
Marco:
So, like, if I knew in advance, like, that could cause problems with some kind of, you know, trading thing.
Marco:
Like, I don't want to deal with that crap, you know?
Marco:
That's the last thing I want to do is get into, like, weird financial regulations and putting myself at risk or anything, you know, like...
Marco:
So I'm very glad that I was just as informed as the public on this.
Marco:
So I didn't want to mentally admit to myself that it was happening until I knew for sure that it was happening.
Marco:
And I'm still a little bit reserved in my head because the sale hasn't technically closed yet.
Marco:
I don't have the money yet.
Marco:
Yeah.
Marco:
That takes weeks or months of various paperwork and everything.
Marco:
I don't think I even know when it will close.
Marco:
I know it's going to happen eventually.
Marco:
I think once I actually have some kind of tremendous bank deposit, then it'll feel real.
Marco:
Now it feels almost real because it's been confirmed.
Marco:
But over the weekend, it was really just like, I think this might happen.
Marco:
Because the reports...
Marco:
They were from all things D, and there were multiple reports, and that's a pretty good sign.
Marco:
They're pretty well-sourced.
Marco:
And also, and I wrote a little bit about this in the post, from everything I know about David and Tumblr, the reports sounded extremely plausible.
Marco:
It was like O.J.
Marco:
Simpson's If I Did It book.
Marco:
Please say you guys heard about that.
Marco:
Yes.
Casey:
It took me a second to realize what you were talking about, but yes.
Marco:
It was like...
Marco:
If they were going to sell it, this is how it would go.
Marco:
So I knew, looking at these reports, this looks real.
Marco:
So I was pretty sure that they were definitely negotiating this.
Marco:
But just like everyone else, it was hinged upon the Yahoo board approving it, and then I didn't know if Tumblr was going to approve it because I didn't know what was going on.
Marco:
So I believed 100% that there were talks, but I did not know whether it would result in an actual sale or not.
Marco:
Because when you have a company that size, there's always talks.
Marco:
There's talks all the time with people.
Casey:
Right.
Casey:
Now, you didn't immediately start making a list of where you were going to buy a second garage and what cars you were going to fill it with?
Marco:
Well, no, that's the thing.
Marco:
Like this Great Dave Winter article, I don't really want to make any changes like that in my life because I've kind of been lucky in...
Marco:
in when I've made money in my life, if I can say that without sounding too much like an arrogant asshole.
Marco:
You know, I started out from a pretty modest background.
Marco:
And so I always...
Marco:
I always had a pretty good sense of money.
Marco:
I always had to work for my money.
Marco:
I always had to save my own money.
Marco:
Um, you know, I always bought my own stuff with my money.
Marco:
So, and that's why I have like on my side, I have things like reviewing the best, like trying to find the best headphones, trying to find the best light bulbs.
Marco:
Like that's, that's where that comes from in me.
Marco:
It, that, that's, that's the part of my personality that this all comes from is like trying to, trying to get a good buy, trying not to like waste money unnecessarily.
Marco:
Um,
Marco:
Stuff like that.
Marco:
So it helped that then with Instapaper and for a while having two incomes when I was doing Instapaper and Tumblr at the same time, I started getting some extra money.
Marco:
And because it happened gradually...
Marco:
And because I had come up from that background, I was never blowing money wastefully.
Marco:
I was never, I don't think, at least excessively, I was never being totally responsible about it.
Marco:
And so now that I have more than that, or that I will eventually have more than that...
Marco:
I'm kind of glad that I had those intermediate steps because you see when people win the lottery.
Marco:
Usually it's working class people who have never had excess money in their lives.
Marco:
They win the lottery.
Marco:
Merlin was talking about this in his show this week.
Marco:
They win the lottery and then statistically so many of them are actually not very well off a year or two later or not very happy or they have problems.
Marco:
There's...
Marco:
So anyway, I think no matter what I ever end up making in my life, no matter how much money I have or make in the future, I don't want to do things like have a day iPhone and a night iPhone.
Marco:
And by the way, I should point out I got a really nice email from Dave Morin about that.
Marco:
Oh, did you?
Marco:
Yeah.
Marco:
I've never met the guy, but I've emailed with him a few times.
Marco:
I really do think he's a decent person who just got caught with a terrible interview.
Marco:
I don't want to say what he said, because I don't know.
Marco:
I think it was private.
Marco:
But it sounds like he was definitely a victim of a sensational editor and writer that...
Marco:
Almost everything he said there was probably taken way out of context.
Marco:
He's not as bad as that sounds.
Marco:
There's things like that that I think are just unnecessary and wasteful.
Marco:
And no matter how much I have or don't have, I think I will always think that.
Marco:
And so, like, I already have most of what I want, because most of what I want is affordable.
Marco:
And I've been able to afford it.
Marco:
So I don't really, like, I don't, this is why this is not really going to change.
Marco:
Like, I'm really happy that...
Marco:
We bought our house back when I was working at Tumblr.
Marco:
It was a good job, but it was still a regular salaried job.
Marco:
So we bought a mid-priced house for our area.
Marco:
And we didn't go crazy.
Marco:
We didn't spend millions of dollars on some giant mansion.
Marco:
And I feel like if I didn't yet own a house and I suddenly came into a big lump sum of money, I might be tempted to spend a big chunk of it on a house.
Marco:
And now that temptation is gone because we already bought a house.
Marco:
We already have this house.
Marco:
And the idea of moving is so unappealing to me that it doesn't really matter if we come into big sums of money at any point in our lives from this point forward.
Marco:
We have the house we want for the foreseeable future, and so I don't need to blow all the money on a big house or something like that.
Casey:
You know, it's interesting to me that a dear friend of the show, David Smith, said in the chat, and I completely agree with him, independence is the virtue I value most, some of which money can buy, but moreover is about how you make choices.
Casey:
And I think that's very true, and I would build onto that, that everything is relative.
Casey:
And so...
Casey:
I think, I mean, I make a decent living.
Casey:
We're very comfortable.
Casey:
And I think to myself, man, it would be pretty cool to be able to go and just buy or lease whatever a brand new M5.
Casey:
I think that'd be neat.
Casey:
It's arguably within reach, maybe, but it's still a stretch, if not a little bit outside of the edge of my arm, if that makes any sense.
Casey:
And similarly, I'm sure there are people that would say, man, I would love to have a lightly used 3 Series.
Casey:
And then there are people that would say, man, I would love to have a lightly used Accord or whatever.
Casey:
And I'm not trying to say that we are ranked in any sort of way financially.
Casey:
It's just that everything is relative and everything is a choice.
Casey:
And I think I speak for both of you guys, because I feel like I know both of you pretty darn well, that
Casey:
We make choices about how we want to spend our money in such a way that we're not really longing for more.
Casey:
Of course, everyone always wants more money, but it's not the sort of thing where our lives would be demonstrably different if any one of us had, say, double the salary that we have today.
Casey:
I don't know, John, does that make sense?
Casey:
Would you agree with any of that or am I crazy?
John:
Mine would be different, but not in any important way.
John:
Right, exactly.
John:
But the unimportant way would still be cool.
Casey:
Oh, it would absolutely be cool.
John:
I always feel like I would be an excellent rich person, which is probably why I will never actually be a rich person.
John:
Amen to that.
John:
That's just, you know, but like when I see those stories, the people who win the lottery and do foolish things with money or like recording artists who blow all the money, you just like, man, like, you know, that money was wasted on them because they had no idea what they were doing.
John:
And just, you know, like, and I don't know what it is.
John:
I don't know how, if there's any connection at all between the people who end up getting rich and are smart with the money and the people aren't.
John:
I think maybe the only thing that I could come up with is that you mostly hear about the people who get a lot of money and screw it up.
John:
Whereas tons and tons of people get a lot of money and don't screw it up.
John:
And that's boring, so you don't hear stories about them.
John:
So, you know, they just have a nice life and live within their newly expanded means perfectly fine.
John:
And that's boring.
John:
And you only hear about the person who gets a whole bunch of money and does something foolish with it or whatever.
John:
But, you know, that's...
John:
And I don't know if there's anything you can do with it.
John:
Like, Mark, you said it's nice that you got money gradually so you could learn to deal with it.
John:
I don't think if you got it all of a sudden, you would have blown it anyway.
John:
Like, I think it's just a personality type thing where it's no amount of training with gradual... Because what you see with the gradual ramp-up of money, and I'm sure we've all seen this, is that, you know, someone graduates college or something, and they start their first job, and they get, like, a low salary, and they get an apartment, and they keep getting raises, and they get a nicer apartment, and then they get married and get a better job and have two incomes and buy a house.
John:
And, like...
John:
That can just continue to creep up and creep up where people – every time people get a little bit more disposable income, they're like, oh, now we can afford a better house.
John:
Oh, now we can afford a better car.
John:
Oh, now we can afford a better this.
John:
And they just – they never are content to live within their means, and they just chase their income to the point where they're like, boy –
John:
I need to be making 300 grand a year just to maintain my lifestyle.
John:
And my wife needs to also make 300 grand because now our lifestyle requires 600 grand a year just to get by, just to pay for all the cars and houses and private schools and fancy clothes and vacations that we're now accustomed to.
John:
And any decrease in my income is now a sacrifice in my lifestyle.
John:
And that's the trap of gradually ratcheting things if you're not smart about your money is that you just constantly, as soon as you get some more disposable income,
John:
You want to upgrade everything in your life.
John:
So that's like the more insidious version of the, oh, I'm just going to blow it all on, you know, fast cars and women and be broken a month.
John:
And I don't know if I definitely know people who are like that, who they're living within their means, but always just.
John:
And that is a foolish way, a foolish way to live.
Marco:
With me, I also have some personality traits that keep this in check.
Marco:
One of them is that I hate any kind of debt.
Marco:
I prefer to not have any debt if I can.
Marco:
Fortunately, for most of my life, I've been able to maintain that.
Marco:
Actually, that's not entirely true.
Marco:
I had a car payment back.
Marco:
Anyway.
John:
It's a tax shelter for your mortgage interest.
John:
Right.
John:
You want to keep that one.
Marco:
Right.
Marco:
But also, I have a pretty boring lifestyle by most people's measurements.
Marco:
I don't go out and party.
Marco:
I'm not going to be buying a $1,000 bottle of champagne to pour onto Rap Stars or anything.
Marco:
I don't know.
Marco:
You know, I'm still, like, no matter how much money I ever have, I'm probably always going to wear jeans and a t-shirt most days.
Marco:
Like, look at Steve Jobs, the way he lived.
Marco:
He had a ridiculous car that he got a new one every few months so he wouldn't have to have a license plate.
Marco:
But he lived in a pretty normal house.
Marco:
Like, it was a nice house, but it wasn't like some kind of tremendous estate, you know, with horses and tennis courts and everything.
Marco:
It was like a regular house in a neighborhood.
Marco:
He wore regular clothes.
Marco:
He wore regular shoes.
Marco:
You know, he had nice computers, but that's, you know, understandable.
Marco:
And that's also not that much money, relatively speaking.
Marco:
You know, like, I feel like...
Marco:
I feel like in the way that, John, you say you'd be a really good rich person, I think I'd be a pretty terrible one.
Marco:
Because I don't do any of those things that you think of as rich people doing.
Marco:
And I have no desire to.
Marco:
Like, I don't intend to join a country club.
Marco:
I would have to kick my own butt if I joined a country club.
Yeah.
Marco:
I don't intend to even golf, although my wife actually enjoys golf quite a bit, but I don't intend to do that myself.
Marco:
The idea of even, I don't know, I don't want to do anything that would cause the rest of my working class family to think I'm a dick.
Marco:
you know like if that makes sense like that's the the sensibilities of regular people have been so baked into my personality that i never even though i have the ability to blow any amount of money on some particular thing i don't want to do it because i don't want i don't want to do it myself i don't want to know that i did that and i don't want my family to find out and like think i'm a dick for it
Casey:
Yeah, and the thing that struck me was, I don't remember what day it was, but I noticed either Friday or over the weekend, or maybe it was Monday night, one of you guys, either you or Tiff, posted a picture from the restaurant that the four of us have been to a couple times that's right near you.
Casey:
And I thought to myself, you know, if I had had some amount of windfall, be that $1,000, $10,000, whatever, it doesn't matter, but some amount of windfall,
Casey:
I think what Aaron and I would probably do is go to a nicer dinner, you know, a nice steakhouse or something like that.
Casey:
Not something absurd, not thousand dollar bottles of wine or whatever, or champagne or whatever, or what have you, but a nice dinner.
Casey:
And here it is that you guys have ostensibly just earned a...
Casey:
some significant amount of money granted it's not there yet but in principle you've earned a significant amount of money and here it is you went to the same restaurant that the four of us have gone to i think every time if not every time we visited you then nearly every time and it is not a bad restaurant by any stretch but it's a average american restaurant yeah it's a casual family pub you know like an entree is like 10 bucks you know like it's not yeah and you know why we went there
Marco:
Because we have a one-year-old.
John:
I don't like them at fancy restaurants.
Marco:
We used to go to this place like once a week, and ever since we had the kid, we now go there like once every five months because I so don't want to be that guy whose kid just screaming in the restaurant and throws everything on the floor.
Marco:
I'm so afraid of being that guy that we hardly ever go out to restaurants anymore.
Marco:
Yeah.
Marco:
And so, yeah, that's how I spent that day.
Marco:
I didn't shower until right before we went to the restaurant.
Marco:
I was in a crappy white t-shirt.
Marco:
I swept my patio because there were flowers from a tree all over it.
Marco:
I'm a regular person.
Marco:
I'm doing regular things.
Marco:
My day-to-day life is not going to change.
John:
Regular people shower before they go to work in the morning.
John:
Well, okay, that's true.
Casey:
Nicely done.
Casey:
Do you want to do a sponsor?
Marco:
See, I've been showering inappropriately late times of the day for like a year and a half now.
John:
Yeah, unemployed people do that too.
Casey:
Oh, my God.
Casey:
Why don't you do a sponsor, and then we'll ask you about Yahoo and Tumblr.
Casey:
Great idea.
Marco:
Our first sponsor this evening, well, I guess I don't know when you're listening to this, but for the live listeners, our first sponsor this evening is Squarespace.
Marco:
This episode is once again brought to you by Squarespace.
Marco:
They're the all-in-one platform that makes it easy to create your own website.
Marco:
For a free trial and 10% off, go to squarespace.com and use the offer code ATP5 for Accidental Tech Podcast in the month of five.
Marco:
Squarespace is constantly updating their platform with new features, new designs, and more support.
Marco:
They have beautiful designs for you to start with, tons of style options for you to adjust.
Marco:
You can really create your own space online.
Marco:
Squarespace, they take care of hosting, SEO.
Marco:
They even make sure your site automatically looks great on any device with responsive designs.
Marco:
It's incredibly easy to use.
Marco:
But if you want some help, they have an amazing support team that works 24 hours a day, seven days a week.
Marco:
Squarespace starts at just $8 a month.
Marco:
That includes a domain name if you sign up for a year in advance.
Marco:
So anyway, as we said earlier, you can try Squarespace for free.
Marco:
There's no credit card required.
Marco:
This is a real free trial where you don't have to give them a credit card.
Marco:
And then if you forget, they'll auto bill it.
Marco:
No, you don't have to give them a credit card.
Marco:
It's a real free trial.
Marco:
And then if you purchase it, make sure you get 10% off by using our coupon code ATP5.
Marco:
Thank you.
Marco:
That'll support the show.
Marco:
Squarespace is everything you need to create an exceptional website.
Casey:
Cool.
Casey:
Thank you for sponsoring us for like the 95th time.
Marco:
Can you imagine how much the podcast world would suck if Squarespace didn't sponsor so many of them?
Casey:
Oh, God.
Casey:
It would suck so hard.
Casey:
It would be terrible.
Marco:
They're seriously supporting like half the podcast industry.
Casey:
Yeah, it's absolutely true.
Casey:
And I don't know how they do it, but I'm glad they do.
Casey:
And not just for this show, for all the different shows they sponsor.
Casey:
So I'm going to start by asking John, and I want to hear, Marco, you kind of wrap this up.
Casey:
John, what do you think about the idea of Yahoo and Tumblr being one, sort of, but not one?
Casey:
Does that make sense to you?
Casey:
Does that fit?
Casey:
Is that a good marriage, if you will?
Casey:
Or does that make no sense?
John:
It makes sense in the cynical way that these acquisitions make sense in that Yahoo is clearly like, I don't know, in turnaround, I guess you'd call it, you know, with a new CEO, you know, bold new strategy, cut the fad, reconcentrate on the, you know, the good things or whatever.
John:
So it's in the mode where it's trying to turn itself around.
John:
And it used to be the hip cool thing, but isn't anymore.
John:
Yeah.
John:
And it makes sense that it would be out there shopping for something that is hip and cool and something that has a lot of users.
John:
And Tumblr, on the other hand, is insanely popular, tremendous growth, but very little, but in a way of, you know, a ways to turn all that popularity into money.
John:
They did what they did.
John:
They sell premium themes and some sort of promoted post stuff, but like not the type of, you know, they have all these users and they want to monetize them and they haven't quite figured out how to do it in a way that scales, uh,
John:
with the size of their business so they're more than happy to take yahoo's money and yahoo is more than happy to give it like what does yahoo need lots of users and cool and hipness what does tumblr need money because it hasn't figured out how to make enough on its own so in that sense the marriage makes sense but then when i think about okay what are we left with is this combination is tumblr going to help yahoo as much certainly yahoo is going to help tumblr with money uh
John:
But is it just like, OK, well, now we have a sugar day and we can continue to be Tumblr and continue to be cool, but also continue not to make money?
John:
That's not really a great outcome.
John:
I mean, I guess that's kind of neutral for Tumblr, but it's not great for Yahoo.
John:
So I wonder how much Tumblr is really going to help Yahoo.
John:
Are they going to figure something out together to become more than they were individually?
John:
And that remains to be seen.
Casey:
I completely agree, and I just don't understand how this really benefits Yahoo, or at least in the near term, in any way other than, hey, look, that company, that website that all the kids these days really like, yeah, that's ours, baby.
John:
Well, they get all the users, too, though.
John:
Now all of those users are their users, and...
John:
When you have that number, maybe Marco knows.
John:
I saw some graphs on it.
John:
How many millions of people are on Tumblr now?
John:
I don't know.
John:
It's a big number.
John:
It's a lot.
John:
Even if those people are like, well, they're not Yahoo.
John:
You have access to them in some way.
John:
You have a shot.
John:
They're yours.
John:
They're captive.
John:
If you come up with some great new idea for some new property or something, or even if you just want to promote the new Flickr to them or something...
John:
suddenly you can do that and you don't have to pay tumblr to put like one little hey check out the new flicker thing in the upper right hand corner that you can just do that really easily that's a stupid example but like having access to those people it's like oh that's it is a big try making if yahoo tried to say we're going to make a new service and it's going to become as popular as tumblr good luck with that right but so just getting tumblr you get those people so you still have to figure out how to make money from them and how not to piss them off and all those other things but at least at least they're there you know and that that equals a billion dollars i guess
Casey:
Yeah, and a friend of the show, David Smith, just said 300 million monthly unique visitors and 120,000 signups every day.
Casey:
David Smith is basically our real-time follow-up guru whenever he's here.
Casey:
Naturally.
Casey:
Naturally.
Casey:
But I agree.
Casey:
Well, I said I agree like 13 times this show, which is not surprising.
Marco:
I agree.
Casey:
Thank you.
Casey:
I don't see how Yahoo can really capitalize on having all these users without ticking off all these users in the sense that if I were a devout Tumblr user, and I do use Tumblr in my blog that I write on once every seven years these days.
Casey:
is on tumblr but that being said if i were if i didn't really know the backstory and i just heard in the news oh yahoo now owns tumblr and all of a sudden i start seeing links to all these yahoo properties immediately i'm starting to throw my hands in the air and saying oh they sold out now i feel like i'm just another eyeball to shove to their other properties
John:
Well, they don't have to do it in a crappy way.
John:
Think of the newly revised Flickr, right?
John:
Flickr was a much beloved service that seemed to stagnate, and now they've revised it, and the revision is mostly getting a thumbs up, right?
John:
Think about this.
John:
Wouldn't it be great if you could very easily post pictures from Flickr to your Tumblr?
John:
Does that hurt you as a Tumblr user?
John:
No.
John:
Now it's maybe easier for you to get access to pictures.
John:
Maybe you didn't use Flickr, but you're like, oh, well, since it integrates so well with Tumblr now, maybe I'll sign up for the Flickr thing.
John:
And you suddenly become a Flickr user.
John:
Flickr does have a business model, maybe perhaps not a great one or a self-sustaining one, but it does have some way to collect money from you.
John:
And it's kind of, you know, it's like a halo effect type thing where you like, oh, well, it was free and it's well integrated with Tumblr and I'll sign up for it.
John:
And now you start, you know, Flickr is actually pretty cool and you start using it.
John:
Like you didn't feel like it was shoved in your face, but merely because they're under the same umbrella, they can do deep, you know, really cool integration that wouldn't be possible just if they were just talking to each other through an API over the Internet as two separate companies.
Yeah.
John:
That's one small example, but I think it is possible.
John:
Think of the way that all the Apple stuff is integrated with each other.
John:
It is possible to do integration in a way that customers see as friendly and beneficial and not as shoving these other services in my face.
Casey:
And then that makes me wonder, is it really worth a billion dollars for that potential integration and that potential way of making these eyeballs look in these other directions?
Casey:
And I would guess Marco says yes.
John:
What does that come out to per user?
John:
You know, like, divide it up.
John:
What is it?
John:
The cost of acquiring new customers.
John:
You could do the math.
John:
How many new potential customers did Yahoo just grab under its umbrella and how much did it pay for each of them?
John:
Yeah.
John:
You know, things are worth what people are willing to pay for them.
John:
And so, you know, that's just how capitalism works.
John:
So if someone was willing to pay a billion, then it is, by definition, worth a billion.
Casey:
Yeah, and it certainly, I found it refreshing.
Casey:
And Marco, I promise I'll give you a chance here in a second.
Casey:
But I found it refreshing, although odd, that their press release was so self-deprecating.
Casey:
As a self-deprecating guy, that made me happy to see somebody else kind of talk the way I talk.
Casey:
But...
Casey:
It was odd to see that in a press release that, you know, I think the second I tweeted something like the second line of the official press release.
Casey:
This wasn't the thing that that David posted on Tumblr.
Casey:
It was the official Yahoo press release.
Casey:
The second the sub headline was promises not to screw it up.
Casey:
And I thought that was so remarkable.
Casey:
And it was it was awesome.
Casey:
I thought it was awesome anyway.
Casey:
And and that was to me, that was a very good sign that that that.
Casey:
that they know not to screw it up.
Casey:
But on the other side, don't you kind of by definition need to screw it up in order to get any real tangible value out of it?
Casey:
And John, I think your point a minute ago was a great counter-argument that no, maybe if you just...
Casey:
do a really good and subtle job of integrating with your existing properties.
Casey:
Maybe you don't need to screw it up in order to get your money's worth.
Casey:
Maybe I'm just not imaginative, but it's a very big leap for me to see how you can really get a billion dollars worth
John:
Yeah, well, Tumblr is a little bit of a puzzle because Tumblr had a long time on its own during which it could not figure out how to get its money's worth out of its tremendous number of users.
John:
I don't think that's true.
John:
Twitter has the same situation.
John:
They got surely enough money to keep themselves going and everything like that, but it's just like, man, this is just so many people.
John:
How do we get the money that we know is there?
John:
These people like our product and they're using it, but they're probably not willing to pay for it, but there's just got to be something locked up in there.
John:
It just didn't feel like Tumblr ever figured out how to get...
John:
The amount of money that it thought it should have out of there.
John:
Maybe Yahoo doesn't need that kind of money out of these users because the users themselves, just having them happy and using something that Yahoo owns is in itself worthwhile, so they don't need to get more money out of it.
John:
I don't think you can just suddenly turn on the money faucet from Tumblr and say, now we'll just bleed these people dry because that will piss them off and they will go running away.
John:
And you're never going to get that kind of money out of these people that you think you should just because there's so many of them.
John:
They're not going to pay to use Tumblr, not that many of them.
Casey:
All right, so Marco, let us have it.
Casey:
What do you think?
Marco:
Well, I should preface this, first of all, with a tremendous disclaimer that I don't have any inside information here, really.
Marco:
I left Tumblr in 2010.
Marco:
Even then, I hadn't gone to the board meetings in years.
Marco:
I really wasn't that familiar with the finances of the company or even the growth at that point.
Marco:
I was focused entirely on just my job of server stuff.
Marco:
But certainly since 2010, I've...
Marco:
I've had minimal contact with them.
Marco:
I see the people there here and there socially, but we don't really talk business.
Marco:
And I haven't even really used Humble that much since then because I wanted to write my own blog engine and stuff like that.
Marco:
So anyway, I should preface this a lot by saying that this is not based on any kind of inside information of either company.
Marco:
And I'm still a little bit nervous to even comment on this, but I'll do my best to give you some kind of content without getting myself into any kind of trouble.
Marco:
I think in very general terms, I think that Yahoo has a lot of money, but they don't have a lot of relevance.
Marco:
And Tumblr has a lot of relevance, and they don't have a lot of money.
Marco:
And so I think if you look at...
Marco:
I think ignore the dollar value for a while because I don't think the dollar value matters that much for looking at why these companies benefit from each other.
Marco:
I think Tumblr – first of all, the discussions on whether Yahoo is going to screw it up –
Marco:
I think you have to consider, first of all, that the alternative is not Tumblr existing as it exists now forever.
Marco:
The alternative would be Tumblr screwing it up or Tumblr not screwing it up.
Marco:
And so you can look at something like Twitter, where Twitter had a similar growth pattern as Tumblr, but about a year and a half before it.
Marco:
And rather than get acquired in some kind of massive mega deal like this, Twitter has elected to just keep going independently and try to make a profit reliably and maybe eventually have an IPO.
Marco:
Who knows?
Marco:
But you can look at what Twitter's had to do to pull that off.
Marco:
And it's really angered a lot of people, us included.
Marco:
So...
Marco:
you have to consider also, you know, what if Tumblr didn't get acquired right now?
Marco:
What would the next few years of Tumblr look like?
Marco:
And the company was growing so quickly.
Marco:
And as a result, of course, I'm sure, again, this is not based on inside information, I assume their costs were growing a lot too.
Marco:
And
Marco:
See, the problem is, right now, Facebook's IPO was a huge disappointment.
Marco:
Before that, Zynga's IPO was a huge disappointment.
Marco:
And there's probably been a few others that I've forgotten about because they've been huge disappointments.
Marco:
Big consumer web tech companies having IPOs have not done very well recently.
Marco:
And so when your company gets really, really big to the point where almost nobody can afford to buy you anymore, like Twitter is a great example.
Marco:
When you think about what those companies have to do, if they have to keep raising money from investors, those investors are going to have to start thinking about, well, what's the exit plan here?
Marco:
How are we ever going to get a good return on this money if we're going to be dropping hundreds of millions of dollars into your company?
Marco:
If the IPO market isn't very good, if our possible outcome is what happened to Facebook with their crappy botched IPO, then that's not very good for the investor.
Marco:
So I think...
Marco:
It's probably hard to raise money when you're that big of a company on any kind of reasonable terms.
Marco:
And that's why I think we see what Twitter's been doing this past year or two is trying to make a lot of money as quickly as they possibly can.
Marco:
So, again, this is not based on inside information.
Marco:
This is speculation.
Marco:
But I think it's probably worth considering whether Tumblr would have reached that point, and if so, when.
Marco:
And now that Yahoo has bought it, if they were going to be anywhere near that point, they probably wouldn't be anymore.
Marco:
Or at least the pressure would be significantly reduced and the timescale would be significantly more flexible.
Marco:
Not to say that Yahoo has bottomless pockets.
Marco:
But Yahoo can afford for this unit of their business to lose money for a few quarters or for a few years before it starts making money.
Marco:
Whereas an independent company can't really do that very well.
Marco:
You can, but then it messes up your finances.
Marco:
So...
Marco:
This is not a great time to be a company like Twitter where the hope of an IPO making it big is pretty low and you're so big nobody can buy you and you can't really raise money on good terms anymore.
Marco:
So that's why Twitter kind of had to do what it did.
John:
Twitter could be bought.
John:
Twitter's not too big to be bought.
Marco:
Well, I didn't say they're not too big to be bought, but most people couldn't afford it.
Marco:
Most people who were likely to want to buy Twitter would have a really hard time justifying that kind of purchase.
John:
Well, I mean, at this point, Twitter doesn't want to be bought.
John:
Like you said, that was their decision.
John:
So that's different than not being able to.
John:
I mean, Facebook, the same thing.
John:
Facebook is the classic example where Yahoo, speaking of, wanted to buy Facebook for tons of money at various points, and Zuckerberg said no.
John:
And so that was, you know, that was his call and it seemed dumb at the time, but now Facebook is much bigger than they were then and, you know, worked out for him.
John:
Twitter seemed to follow the same playbook.
John:
People wanted to buy them.
John:
They said, no, we want to go it alone.
John:
We're going to be the next Facebook.
John:
And now we're waiting to see if that's the case.
Marco:
Right.
Marco:
So, yeah.
Marco:
So anyway, so I think you can make a pretty good case for why Tumblr benefits from Yahoo.
Marco:
Because...
Marco:
there's this whole set of massive financial pressures that... Not to say that all pressure will be off them, but now they have a lot more flexibility in that, presumably.
Marco:
And plus, you look at what Tumblr has.
Marco:
Tumblr has...
Marco:
All these users and all this relevance and all these cool people and all this hip content being created, all this engagement, and they don't really have much of an ad sales force yet.
Marco:
Whereas Yahoo has a massive ad sales force, and they're kind of desperate for users and engagement.
Marco:
So again, I think it makes a lot of sense why these companies go together.
Marco:
And then you look at it from Yahoo's point of view –
Marco:
And as an outsider, I look at Yahoo and think, here's a company that nobody pays attention to anymore.
Marco:
And I think on their earnings call, they said that their average demographic is getting older.
Marco:
And that's not good for ad money.
Marco:
So you see this company kind of losing relevance.
Marco:
And if Yahoo launches a new service, hardly anybody even talks about it.
Marco:
Nobody blogs about it.
Marco:
None of the geeks like us even try it.
Marco:
And so...
Marco:
They have to make drastic moves to get more relevance and to get back on track.
Marco:
They also need a social network.
Marco:
Google has Google+, which might or might not be actually used, but they at least have it.
Marco:
They have some kind of database table somewhere with a lot of IDs in it, so they call themselves users.
Marco:
Facebook has itself.
Marco:
Does Microsoft have anything social, really?
John:
Xbox Live.
Marco:
Okay, that's something.
Marco:
Skype, sort of.
Marco:
Sort of.
Marco:
Okay, they have a few pieces here and there.
John:
Xbox Live is not a piece.
John:
That's full-fledged social.
Marco:
Yeah, a little bit.
Marco:
I don't know.
Marco:
I think it's a little bit different, but they have some good pieces.
Marco:
I think Yahoo needs something like that, and so now they have it.
Marco:
You can look at all these things.
Marco:
There's a lot of reasons why these companies benefit from each other without even considering the money aspect of how much they bought it for.
Marco:
Because how much they bought it for, I have no idea what that's based on.
Marco:
You have no idea what that's based on.
Marco:
It doesn't really matter, honestly.
Marco:
It matters to the shareholders, but it doesn't really matter to the world how much Yahoo paid for it.
John:
It would be fun to see the slides, though, because you know there is a slide that says, we project the value of our people over this amount of time, this amount of money, so we feel that buying this company, you're buying their future.
John:
You know there's a BS graph explaining why 1.1 billion is the number and it's not 1 billion.
John:
Right.
John:
900 million, but all those are... And all those graphs along the x-axis, the thing at the left edge is like the current year, and everything else is the future.
John:
So it's just like projections of a fantastical future that may or may not come to pass.
Marco:
Well, also...
Marco:
Keep in mind, too, there's also a lot of value here.
Marco:
There's value to Yahoo in buying this particular social network slash publishing thing because they didn't have a social network, and there aren't that many that are meaningfully sized that they can afford.
Marco:
So that's one big problem that they have, why they really kind of need a Tumblr.
Marco:
One reason why Tumblr might have needed Yahoo in particular to be the buyer if they were going to sell...
Marco:
is that Yahoo is in this place of humility and change and progress.
Marco:
And I know David pretty well, and David is not somebody who wants to be told what to do with his product constantly.
Marco:
He's going to want his own say.
Marco:
And from all the reports, it sounds like he and Marissa Meyer see eye to eye a lot, and he's locked in to work for them for a little while, and...
Marco:
And she was apparently promising some kind of autonomy or at least giving him a good amount of authority.
Marco:
So it matters who buys you.
Marco:
If you look at one of the reasons why you might want to sell to Yahoo instead of, say, Google, is because Google has not shown that it's a very good acquirer.
Marco:
There's so many things that get bought by Google and then either get stagnated or they get shut down or the people get annoyed about internal stuff and they leave.
Marco:
It matters who buys you.
Marco:
If you care about your future happiness and the future health of your product, you've got to make sure you sell it to somebody.
Marco:
I had the same thing with Betaworks.
Marco:
You've got to make sure that you sell it to somebody who you trust to be decent to work with and to do well by the product.
Marco:
You can't just sell it to anybody willing to pay a good price.
John:
Yahoo would have been much better off, though, buying the Tumblr as it existed several years ago.
John:
What you really want, ideally, is to buy the hip new thing just as it's kind of breaking.
John:
Because I almost feel like Tumblr, not that Tumblr's time has passed, but...
John:
tumblr has already gotten to the point where you need to spend a billion to get it right because if you look at the graph of their user growth you would really love to have bought it before the little knee in the in the graph right right and then you'd feel like you got in on something at the ground floor and it just takes off while you have it where the worst case scenario for tumblr is it's massively popular now it was a big thing everyone has a tumblr it's really popular and then just like tapers off like you bought at the top of the market no
Marco:
like draw something yeah well that i mean that was that was an example of also being bought by a by a terrible acquirer that everybody hates that screws everything up that's why we can laugh at it because yeah like who cares if zinga loses money like there's such there's such horrible people who run that company like nobody cares if they lose money
John:
In this deal, you had to think in this deal, Marco's stake in Tumblr aside, would you rather be Yahoo that now owns Tumblr or would you rather be the investors or employees of Tumblr?
John:
You'd much rather be Tumblr.
John:
It's hard for me to look at this in any way other than the Tumblr people got the better half of this deal.
Marco:
But see, I don't know.
Marco:
I really do think that... I think Yahoo needed this too.
Marco:
I think both companies are doing quite well as a result of this.
John:
But Yahoo now has to deliver, whereas Tumblr made an amazing product.
John:
They got really big.
John:
They got sold on terms of where it seemed to be very favorable to them.
John:
And they are a success story no matter what happens from now on.
John:
And Yahoo...
John:
It remains to be seen.
John:
Their future is still to be written, and the pressure is now on them to, as they said, not screw it up.
Marco:
Yeah, that's certainly true.
Marco:
But just looking at who got their money's worth here, it looks like a pretty good mutual benefit.
Marco:
Anyway, speaking of business terms, our second sponsor.
Marco:
This is actually pretty cool.
Marco:
Our second sponsor is Windows Azure Mobile Services.
Marco:
Now, because you're all probably nerds like us, you probably heard this advertised in other nerdy podcasts and other nerdy blogs.
Marco:
But this is interesting.
Marco:
Windows Azure Mobile Services by Microsoft.
Marco:
Yes, Microsoft.
Marco:
Okay.
Marco:
They make it faster and easier to build a cloud-powered iOS app.
Marco:
So it's basically a cloud platform.
Marco:
You write the code in JavaScript, actually.
Marco:
I believe they have a Node.js interface as well as, I believe, a couple of languages.
Marco:
Sorry about not knowing that offhand.
Marco:
That wasn't part of the script, but I've heard it, so it was pretty cool.
Marco:
They take care of the glue code necessary for storing data in the cloud and authenticating users via Facebook or Twitter and even sending Apple's push notifications.
Marco:
And if you've ever written push notification code and having to deal with all those various certificates and everything, you'll know that this is great to have somebody else do this for you.
Marco:
Um...
Marco:
So anyway, mobile services, you can add push to your app.
Marco:
It's a single command, push.apns.send.
Marco:
You can see the API.
Marco:
It's pretty awesome.
Marco:
You know, you shouldn't need to build your own massive server infrastructure if you don't want to.
Marco:
You know, it's nice to have options.
Marco:
We've talked about this in the show in the past.
Marco:
And one of the people who's blogged about this before, who we've talked about, is Brent Simmons.
Marco:
And Brent Simmons actually is kind of a spokesperson for Windows Azure Mobile Services.
Marco:
He did a few videos for them.
Marco:
You can see, if you go to the site, go to windowsazure.com slash iOS, and
Marco:
And you can go see Brent talking in videos, showing you how to do this and what this can do.
Marco:
It's pretty awesome.
Marco:
We think of Microsoft as being this company that we as Mac people can kind of ignore.
Marco:
But they're getting into the server business and the services business pretty well.
Marco:
And I'd say this is really worth looking at.
Marco:
I've checked it out myself, and it looks pretty interesting.
Marco:
So anyway, if you're looking to build an iOS app or to connect an app you already have to the cloud, take a look at Azure Mobile Services.
Marco:
You can get started today for free.
Marco:
So go to windowsazure.com slash iOS.
Marco:
And thanks again to Windows Azure for sponsoring the show.
John:
Remember when it used to be like when these things like EC2 and other services first came out and it was like, oh, well, this is great.
John:
You know, I won't have to set up my own server and I can try this thing.
John:
But people will go, yeah, but if you ever want to be like a real player on the internet, you have to do all this yourself.
Marco:
Now all the real players use EC2.
John:
Right.
John:
And now, like I was just reading recently, you know, some tweet or something saying that Netflix has something like 20,000 EC2 instances.
John:
Like there's no...
John:
There's no one like, well, if you want to play with the big boys, Netflix is a big boy.
John:
They're like a third of all internet traffic at night or something, whatever that stat was.
John:
They're running an EC2.
John:
Back in the 90s, you get Marc Andreessen or whatever saying, in the future, we're all going to buy computing services at retail and
John:
buy compute and storage in the cloud and like yeah yeah yeah right and then like without us noticing that it's basically happened so things like windows azure and everything like i think a lot of people who are at least people who are my age look at it and like that's fine and everything but like
John:
I really want to my my iOS app is going to be like a serious app.
John:
So I'm going to do this myself because, you know, those things are just for people who are just starting out.
John:
No, like the biggest companies in the world are using these type of retail infrastructure services.
John:
If they're good enough for Netflix, believe me, they're good enough for your iOS to do app.
Marco:
Yeah, I feel like a lot of this – we talk a lot about this stuff in development whenever technologies kind of move up the stack and get further away from the bare metal in some kind of way.
Marco:
You see it with languages going from assembly to C to higher-level stuff and memory-managed stuff.
Marco:
There's always these arguments about, oh, this new thing is only for –
Marco:
you know, X small segment or only for, you know, new people to programming or whatever.
Marco:
And then you see those things always slowly become mainstream because, like, you know, it actually, like, you know, you start realizing, well, these days it really isn't worth it for almost anybody to write assembly language.
Marco:
And, you know, stuff like server-side stuff, you see, like,
Marco:
it's already almost not worth it for anybody to co-locate a server, to actually buy a physical server and put it somewhere.
Marco:
That's worth doing for almost nobody.
Marco:
And even dedicated servers now.
Marco:
I mean, I've been a huge dedicated server fan for years and years and years, just leasing a dedicated server somewhere that the hardware is maintained by somebody else.
Marco:
Even that, though, is really hard to justify today because VPSs are so good and cheap.
Marco:
And now you have all these other platforms.
Marco:
You have Azure, you have things like Heroku for Rails, and you have EC2 at a lower level, and things that are built on EC2, like I think Heroku.
Marco:
But you have all these new cloud platforms where you don't even have to manage server instances anymore.
Marco:
You don't even have to manage virtual servers anymore.
Marco:
Even these things are getting abstracted away.
Marco:
And
Marco:
And it's gone way beyond tinkering hobbyist territory to the point where, as John, you said, there's a lot of serious stuff that's built on this.
Marco:
And it's no longer just for newbies to programming.
Marco:
But it happens to be really nice if you are a newbie because you don't have to deal with all this crap.
Casey:
Well, it seems to me like with every movement up the stack, all the old timers say, oh, you whippersnappers and not having to worry about memory management.
Casey:
Oh, you're a bunch of wimps.
Casey:
And then eventually everyone realizes, you know what?
Casey:
Worrying about memory kind of sucks.
Casey:
And I don't want to do that either.
Casey:
Exactly.
Casey:
And so this is just another example of that.
Casey:
And Azure in particular, Gruber posted a linked list post earlier tonight about how
Casey:
If you think of, and I'm heavily paraphrasing, but if you think that Microsoft needs to go forward and it needs to do so in arguably two categories, one is services and one is devices, well, you could easily argue that Azure is the services component and
Casey:
And as a hopefully decent segue into our next topic, the Xbox is very likely going to be the device that brings Microsoft into the post-PC era.
Marco:
Are you talking about the Xbox One, the Xbox 360, or the Xbox One?
Casey:
Yeah, exactly.
Casey:
I'm talking about the good one that's $359 less than the previous one, but it's still good.
Casey:
In fact, it's supposed to be better.
Marco:
I like the Xbox one, despite what John thinks about it.
Marco:
I think it was a great system.
Casey:
The first Xbox one.
John:
The Ferrari LaFerrari.
John:
They could have called it the Xbox U. It could have been worse.
Marco:
By the way, before we get into that, do we want to talk about the Wii U's abysmal performance at all?
Casey:
What, that it hasn't sold any of them?
Marco:
Yeah, they're having major problems over there.
Casey:
John has one, but nobody else, right?
Marco:
Yeah, I think John has the only one.
Marco:
I was thinking maybe it'll be a collector's item.
Marco:
That actually is a decent point.
Marco:
I did notice in John's living room that not only did he have the two Wiis, of course, still set up, because I believe you mentioned on Hypercritical, second to last episode, why you're keeping the old Wii for some kind of controller issue, but then on top of your TV, you had both sensor bars perfectly stacked on top of each other, centered exactly.
Marco:
Yeah.
Casey:
That is not surprising.
John:
Yeah, it would be nice if you could share them, but, you know, stacking throws off the balance.
John:
I liked it better when there was just one.
John:
I'd deal with it.
Casey:
First world problems.
John:
Yeah, now, the Wii U, Nintendo just built the wrong thing, so it's a bummer for them.
John:
But the one thing, two things Nintendo has going for it.
John:
One, it is...
John:
owned by people who are not hasty and foolish and like they're not at the whim of like greedy shareholders who if there's one bad quarter it's time to sell the whole company and start making you know fried dough instead or something right and two they have a lot of money in the bank i don't know is nintendo privately held someone in the chat room can tell me
John:
But it's not like, you know, US companies where like, you know, Apple, for instance, oh, my God, your profits didn't grow at the rate you said they were going to.
John:
And now you're doomed and you need to change something and everyone panics and everything and they get slammed.
John:
Right.
John:
That's not the way it works.
John:
I mean, if that was the way Nintendo would have sold to a larger company years ago, if they thought it that way.
John:
But they don't.
John:
They're sort of, you know, very proud, in it for the long haul, not likely acquisition targets, and have money in the bank from all the good years.
John:
So hopefully they weather this storm, do terribly this generation of consoles, and come out the other side with some better ideas.
Casey:
So what do you think about the Xbox One, the second Xbox One?
Casey:
The Xbox One 2, is that what we're calling it?
Marco:
Or 3, but you can't say it.
Marco:
It's the third Xbox.
Marco:
3 sounds like 360.
Marco:
Yeah, you're going to say Xbox O&E.
John:
That's easy.
Casey:
Oh, yeah, that's very easy.
John:
Really easy.
John:
Yeah.
Marco:
You can pull an Apple and call it the Xbox 2.
John:
Someone showed, like, you know, it was a Bing search, I think, but like a Google image search or whatever for Xbox O&E, and all you see are pictures of Marco's beloved bloated black and green thing.
John:
that system was awesome yeah but anyway that's what that's what comes up because it's like oh i see you're trying to type xbox one well that's this thing right no actually don't john don't get them started don't do it man don't do it all right so for your framing for your framing of this topic with the whole you know like
John:
You know, the future of Microsoft being devices and services.
John:
The only reason that that framing comes up, I think, is because Microsoft has done so badly with its desktop windows and, you know, and the mobile space like Windows Phone or whatever, because...
John:
that that's why like oh well okay so microsoft has shown that they've kind of people losing interest in the desktop in general and so microsoft strength there is no longer interesting and in mobile microsoft has flailed for years and continues not to get traction despite the fact that they have a reasonably good product right so it's like everyone's looking elsewhere okay well so never mind about that stuff microsoft what have you what else have you got that might be good xbox you're selling a lot of those those are good and azure that's really good you know so it's like the younger products that are actually doing well
John:
pushed to the forefront mostly by their complete failure to make a crack in the mobile market and the diminishment of the desktop market so that's I guess a positive spin on it is that like those are the future of the company but I see it as a negative it's like man shouldn't
Casey:
shouldn't they be right in there slugging it out with android and ios instead of like a distant third or whatever they are that that's kind of sad and depressing yeah but do we know to go back just a moment do we know that azure is making money like xbox i think it's probably safe to say they're making some good money off that but is azure making money or is xbox windows and office basically carrying all of microsoft
John:
Well, Azure looks like an investment kind of like EC2, where in the beginning, like you're investing in the future, thinking like this business of, you know, retailing services is going to be a good one.
John:
And by all accounts, Azure is a good product and people like it.
John:
And it is providing something that like that market is not that crowded.
John:
How many people have the ability to provide what Azure provides?
John:
You can't just start to start up in your garage and provide what they want.
John:
What they do, because it especially in their case, like it requires such tight integration of like they control the OS and like the the meta platform that weaves it all together.
John:
And you need data centers and you need all that stuff.
John:
Amazon bootstrapped its thing by having a very successful, very, very high revenue, if not high profit.
John:
uh online store and that let them build ec2 because it helped them build their thing azure i'm sure has been funded by all the profits from office and windows and all the other places microsoft makes their money but it's a good investment in the future so i don't think microsoft is like oh man when is azure going to make money i think they are just like just make the product better get people to use it because this is clearly a thing that people want and very few other people are providing it so if we can make a good product in this space and there's only two or three other people in that space we feel good about it so i i think they're okay with that
John:
okay so is the xbox one two two one xbox the new xbox is that any good does that excite you at all or not so much um it's kind of boring that all of the predictions about what the current generation of console would be came out to be true but you know that's the day that's the world of the internet we guess what everything is and we're right uh
John:
the spec leaks and all that stuff so it's exactly the box everyone thought it would be it's got the specs everyone thought it would have the the speculation of why does it have uh these specs like way back when i was like why does that have eight gigs of ram uh when the ps4 supposedly has four this is when people thought the ps4 was going to have four
John:
before the actual announcement that it also has 8.
John:
And I said, oh, well, the reason that the new Xbox is going to have 8 is because it's not just going to be a game console.
John:
They're going to also want to integrate all sorts of home entertainment and TV type functionality in it.
John:
And that totally made sense because Xbox...
John:
It's not the most popular Netflix platform.
John:
I think PS3 is actually more popular than it.
John:
But, like, Microsoft likes to sell you stuff through the Xbox.
John:
They'll sell you, you know, you can rent movies.
John:
And I don't know if you can buy movies and music and all sorts of other things.
John:
I believe you can.
John:
Watch your Netflix.
John:
Like, it's a gateway to do things that are not gaming.
John:
So...
John:
it made perfect sense that Microsoft's next console would go further in that direction, because why wouldn't they?
John:
They have a popular service that people like, that they can sell you things through, and it also happens to play games.
John:
They would clearly go forward with that.
John:
So, like I said, as it turned out, both the PS4 and the Xbox One have the same amount of RAM.
John:
But, as predicted, the Xbox One...
John:
Does all tons of TV stuff, you know, integrated TV experience with like Skype overlaying on the side of your television and being able to have an electronic program guide and all sorts of other things.
John:
And that's what like this, whatever this was, press conference.
John:
That's what they were promoting.
John:
They said, we'll tell you more about the games at E3, which is, you know, the gaming focus conference.
John:
Today, we're going to tell you all about all these great TV features.
John:
And they did.
John:
And I mean, if you look at the thing, the thing looks like an HD TiVo, like it's a big rectangular square looking thing.
John:
It does not look like a dedicated gaming system because it really isn't.
John:
It's a game console that also does a whole bunch of other things as well.
John:
I'm kind of happy that the snail phase of console gaming is over, I'm hoping is over, where everyone had to make their console shape like some weird thing, because boxes you can stack on top of each other.
John:
But if everything's shaped like a snail, you've got to find some place to wedge the things in, like if it's sideways or vertically.
John:
But you can't put two 360s, a 360 and a PlayStation 3, and, well, the Wii is kind of still box-shaped, all on top of each other.
John:
So hopefully the PS4 is also rectangular-shaped.
John:
Then we all have a fighting chance of sticking to things in our home entertainment centers.
John:
But, uh...
John:
But for the most part, because it's what everyone predicted, now it's kind of like a wait-and-see type thing.
John:
Okay, well, can you sell millions and millions of these things?
John:
Because if you can, and if it works as advertised, now you have a successful game console and a way to sell stuff to people through your little gateway.
John:
And that sort of leaves the ball on everyone else's court.
John:
We're saying, okay, well, Google, you tried to do Google TV, and it sucked, and no one bought it, so tough luck on that.
John:
Apple, you keep... There's these rumors about television stuff, and you have Apple TV, but so far...
John:
There's no apps for that, and the things you sell through it are you sell things from the iTunes store, and you have Netflix, but it's not quite the same thing as it could be where you're taking over the entire television and providing a program guide and being a gateway for everything else.
John:
The Xbox One has HDMI input.
John:
If you had to express its philosophy in terms of one hardware feature, that's what it would be.
John:
It doesn't just send a signal to your television where you can see the output.
John:
It takes input.
John:
It wants to be
Casey:
the center of your television watching experience did you see the um super cut that somebody did of the press conference where it was like a minute and a half long and it was just every time they said the word tv or television then it was every time they said sports i believe and then it was every time they said call of duty and it lasted like a minute and a half and it was hysterical
John:
Yeah, I was trying to watch the actual thing before I saw the supercut.
Casey:
Well, now for a spoiler alert.
John:
Yeah, but, like, if you're a gamer and you're watching it, oh, tell me about the games, right?
John:
But, you know, Microsoft clearly thinks that it's not – the gaming part of it is only perhaps equally important to the non-gaming parts of it.
Yeah.
John:
From my perspective, as someone who hates all boxes connected to TV, the Xbox One comes maybe 50% of the way to what I've always wanted in the box that no one will ever make because it doesn't make any sense economically for them, but it would be great for me, is my omnivorous box where...
John:
I want it to take all the millions of places that entertainment can come to me, send them all into this one box, and provide me with a single unified interface to all those things.
John:
So I don't have to change 50 different inputs and have seven different remotes and deal with all these different services.
John:
I just want something to paper over that mess for me.
John:
Actually, modern home theater receivers almost do that.
John:
They don't paper over it.
John:
They just provide you a way to automatically switch inputs and do all sorts of like I wanted to provide a, you know, a single unified, really nice interface to hide the fact that these are totally disparate services owned by competing companies that hate each other and that have varying degrees of competence in creating their hardware and their software.
John:
just hide all that from me because like you know you want to solve the meta problem like wouldn't it be great if you didn't have a billion different sources for this crap and they didn't all suck it's like okay well we can't solve that how about this how about this everything else still sucks and there's a bazillion wires behind your TV but they all go into this one awesome box and it makes it look beautiful and Google TV kind of tried to do that but sucked and Xbox One
John:
That's half of that.
John:
It like, it tries to say, okay, well, if you want to watch TV, don't go through your TV.
John:
In fact, your cable box input is going to go into the Xbox one and just talk to your Xbox one or use the remote on your phone or whatever, you know, just say what you want to watch and we'll switch to it.
Uh,
John:
That's good.
John:
You're trying to unify the world of crap I have.
John:
I have a cable thing that I have to pay for.
John:
I pay for Fios TV, and it goes into the back of my Xbox One, and it lets me control watching TV.
John:
But no DVR functionality in the Xbox One.
John:
So if you want to watch something that's not on right now, what if I have a DVR?
John:
Could you put the DVR back into the thing?
John:
Well, now you don't really have control of the DVR through the Xbox One, and...
John:
So now you have to at least have two inputs for live television and then you recorded stuff.
John:
Netflix, they're assuming it's an application.
John:
But what if you use a different streaming service?
John:
What about the Amazon streaming service?
John:
What about Hulu Plus?
John:
Xbox One is not omnivorous.
John:
It's a picky eater.
John:
It will take a couple of select inputs and unify them in a particular way.
John:
But I can't imagine anyone who's in the market for an Xbox One, especially who's going to buy it on launch, who is not still going to be switching inputs to get the things done that they want to get done.
John:
So it's a step in the right direction, but the lack of time shifting in particular makes it a non-starter for me.
John:
Like, it's not going to unify my life.
Casey:
And the thing that struck me about what you just said is that when you were describing this omnivorous box that consumes all these different services, for a flash, I felt like you were describing the Apple TV.
Casey:
And I know I'm oversimplifying, and I know Apple TV doesn't consume traditional terrestrial TV, and it doesn't play games or arbitrary apps that you may want it to do, but...
Casey:
To a large degree, I almost feel like the Apple TV is trying to do exactly that.
Casey:
If you look at the fact that it has Netflix, it has Hulu Plus, it has MLB TV, if I'm not mistaken, it has NHL TV.
Casey:
It has all these different things, and it's one interface that will expose all of them.
John:
But that's like a quarter of the stuff, though, because the vast majority of my television that I watch comes through my stupid bundled cable, even though it's Fios, subscription.
John:
I pay for all these premium channels.
John:
I pay for HBO, pay for Showtime, and all that stuff.
John:
And the Apple TV doesn't even have an input, a video input.
John:
It is purely an internet play.
John:
And that's what I was talking about.
John:
Well, the real solution is not to have the programming spread all over the place.
John:
And have these stupid cable TV cartel bundling deals that just force you to have all these channels.
John:
Like, yes, that is the real solution.
John:
The real solution is to get rid of all these huge entrenched interests with, you know, infrastructure and contracts.
John:
But, like, it's not happening.
John:
It's hard to get rid of them.
John:
So in the interim, while we're waiting for the world to realign, it would be nice if someone would make something that would just tackle the incredibly hard problem of taking in all these things and unifying them and providing me a better experience, you know?
John:
And maybe that's just never going to happen.
John:
Maybe the Apple TV is the only possible play.
John:
It's like, if it's not on the internet, you deal with it yourself.
John:
But if it is on the internet, we'll try to bring it through.
John:
And the Xbox One is like, okay, well, we'll have our own internet services we're going to sell you.
John:
And we'll resell Netflix and everything through you.
John:
But I don't think they have a deal with Hulu.
John:
I don't think they have a deal with Amazon.
John:
And they'll take in your cable boxes output.
John:
But I don't think they have any control over your DVR.
John:
And I'm not sure how they integrate if you have a DVR with your cable system.
John:
And it's...
John:
It's just one more complication.
John:
It's not a simplification of anyone's life, I don't think, especially with all of the gestures and voice control and stuff like that.
Casey:
So what you're saying is you want a company...
Casey:
to take something that's extraordinarily complex make it really really simple and make it pretty do we know any companies that may be interested in well i back in 2005 or 6 i'm like boy you know apple you
John:
TiVo has really fallen down here.
John:
I would love it if you would make something like this.
John:
But then Steve Jobs went to the All Things D conference, and I think it was 2008 or something, and someone in the audience asked him a similar question, and he said, flat out, we're not going to make that thing because the business model makes no sense.
John:
And I agree with him.
John:
His reasoning was perfectly sound.
John:
That's the reason this thing doesn't exist.
John:
One, because it's super hard, and two, because...
John:
In the U.S.
John:
anyway, it can't be done with all these cable companies are not going to give you their programming and the cable companies buy the programming in these big bundles that you can't afford to match the price of if you're going to sell this thing to people.
John:
It's just...
John:
It just can't be done in terms of the money.
John:
So it's like, well, why would we ever make that?
John:
We would lose money on it, and it would be really hard to make work right.
John:
And we would be basically trying to usurp the value from companies that hate us and that have the ability to screw us by changing how they do things.
John:
You know what I mean?
John:
So that's why that box doesn't exist, right?
John:
That's why TV is a big mess, and that's why we're all hoping for something better.
John:
And so this Xbox thing is a move in that direction, but...
John:
I don't buy the simplification they were trying to sell.
John:
The reason there's a one in Xbox One, I'm assuming, is because in some meeting when they're talking about the name, they're like, well, I know this is crazy, guys, but what about Xbox One?
John:
Everyone said, what do you mean the first Xbox?
John:
People called that.
John:
No, just listen, listen, because this is one box that will unify your entire television experience, right?
John:
You'd be able to do video conferencing, browse the Internet, look at Netflix, play games, watch live TV.
John:
One box does everything.
John:
That's where I assume the one is coming from.
John:
I haven't finished watching the press conference thing, but I assume they're going to lean on that.
John:
And it falls short of fulfilling that dream.
John:
It is not one box to do everything.
John:
You will still be changing inputs just because the world of content that you watch on your television is so Byzantine that it's almost impossible for one box to do everything for you.
Casey:
Yeah, I guess the point I'm driving at is even though it doesn't make business sense to potentially get an antagonistic relationship with content owners, it doesn't make business sense to try to conquer all these disparate systems.
Casey:
On the other hand, you take a company like Apple that is used to selling what most would consider expensive products.
Casey:
And if Apple said to you, John, for $1,000 or for $1,500, we will make all those devices, the TiVo and the Netflix and all that, they will all be consumed by this one box.
Casey:
And by the way, you can run apps on it.
Casey:
So no, you may not be able to play Halo on it, but you'll be able to play real racing on it.
Casey:
Would you pony up $1,000 for that, $1,500 for that?
Casey:
And I know I'm oversimplifying.
Marco:
Well, I think that's the wrong question.
Marco:
I mean because I don't think Apple could actually do – like if you think about what Apple is really good at, Apple is really good at editing what's possible, deleting options, saying no to things to make something that's overall great but limited.
Marco:
in some way.
Marco:
Those limits make it great or enable it to be great in other ways.
Marco:
With the TV business, the TV industry, whatever this is, if you say no to anything, you're out.
Marco:
You're irrelevant.
Marco:
Imagine if a cable company launched without supporting ESPN.
Marco:
There's no way it's going to succeed.
Marco:
People aren't used to
Marco:
not having everything with TV.
Marco:
Most people have cable TV and they have a billion channels and if they want to connect anything else to it, they just plug it in and that's fine.
Marco:
If Apple were to come together and say, here's a box that does 80% of that,
Marco:
no one's going to buy it.
Marco:
Or people already will buy it, but only people who want just what Apple provides.
Marco:
That's what they already sell.
Marco:
That's the Apple TV.
John:
That's the play if you're Apple, is you want to shift people away.
John:
You want to shift the value away from these cable packages.
John:
Cable companies have not so much monopolies, but duopolies.
John:
There's maybe one or two choices for cable companies, and they have all this money in infrastructure, and they're hard to displace.
John:
But if you can...
John:
Their worst nightmare is to become dumb pipes for internet connections, and that's what Apple wants to do and all these other companies.
John:
Like, we'll just shift the value away from those premium channels and towards content that's available over the internet because the internet, you know, is free for everybody or whatever.
John:
It's not tied up with these, you know, so if we can just get, like, you know, House of Cards made in Netflix first, and if we could...
John:
have netflix on our box then we've got house of cards and that's popular content right and hbo well that's you know they can get hbo go and finally we can airplay it to our television but still you need a cable subscription to get it and all like they're trying to pull the value out of the hands of the cable companies into the realm that they control rather than trying to say okay well we accept the fact that right now cable companies have this valuable content and you have to deal with watching one thing in one place one thing another so let's try to make a box in front of it and marco's right that's not the apple philosophy apple philosophy is not
John:
This world is a big mess and we will try to hide that from you.
John:
It's we're going to envision a new world that isn't a mess and we're just going to go there.
John:
And yeah, we'll be out there ahead of you and not a lot of people will follow us, but hopefully we'll be able to slowly draw the value out of that ecosystem.
John:
And then one day cable companies will wake up and realize, hey, wait a second.
John:
if we don't have house of cards or whatever the popular netflix thing is uh we're screwed and people don't want to buy our cable package because they say hey what about the popular show they're like oh that's only available over some internet tv thing you know like it's a battle between you know same thing with like apple and the phone carriers like everyone wants everyone wants the carriers who suck at everything to be dumb pipes except for the carriers themselves right so cell carriers cable companies
John:
None of them want to be like utilities where you just, oh, we just bring you the internet over a pipe.
John:
And every other company in the entire world says, please, just be a company that brings me fast internet over a dumb pipe and let everyone else compete with content with apps and channels and stuff like that.
John:
So in this transition stage, we just all suffer.
John:
And I don't know who's going to win that battle, but I really hope it's not the carriers and cable companies.
Marco:
Going back to the Xbox One for a second, one conversation I'd love to have is just the timing of this and kind of the generational aspects of this.
Marco:
Like, if you look, the Xbox 360 came out in 2005.
Marco:
And if you just think about what kind of world this was in 2005, you know, think about, like I said on Twitter, like, that was before Tumblr was started.
Yeah.
Marco:
So it seems like Tumblr's been around for a while, but the Xbox 360's been around longer.
Marco:
And that was before the iPhone came out.
Marco:
That was before the entire smartphone revolution.
Marco:
Smartphones existed, but only rich business people had them because they were really expensive and they sucked.
Marco:
So like this, it was such a, that was so long ago that this system was envisioned.
Marco:
This was before Netflix streaming existed.
Marco:
Um, it's before almost any streaming service for video existed.
Marco:
I think certainly before many people used them.
Marco:
And, uh,
Marco:
It was before all of these massive changes in how we entertain ourselves, how we get our video content, how and where we watch videos and play games.
Marco:
And that's what we've been using all this time.
Marco:
And what we'll be using... That's the game console type.
Marco:
That's how game consoles have been designed for a long time.
Marco:
And Microsoft has been pretty good about jumping on...
Marco:
stuff with the Xbox that they need to jump on quickly and well.
Marco:
Xbox Live was the first good online play service for video game consoles and might still be the only good one.
Marco:
I don't know if the PlayStation one's gotten better, but certainly Xbox Live is really good and people love it and people use it all the time.
Marco:
And then once you get Netflix on devices streaming...
Marco:
The Xbox was on that, and they had that very early on, and it is very, very common.
Marco:
And if you think about how people are entertaining themselves now, how many people are getting these things, using the 360 as a Netflix streaming device...
Marco:
is an extremely inefficient use of the hardware.
Marco:
And you're sitting there, you're hearing the big fans, and it's drawing God knows how many watts, and it's slowly burning itself out, so you get to the red ring of death, and Microsoft has to replace it, or you sue them.
Marco:
There's all this whole mess of using something of that power level to do something relatively simple, like what Netflix is.
Marco:
But people are sitting there for hours a night doing that.
Marco:
And so obviously the previous type of console was designed in a way that doesn't really mesh with how people do things in this day and age.
Marco:
And this has been a very long console generation.
Marco:
So it's interesting to see Nintendo with the Wii U attempted to modernize it a little bit and just didn't really go far enough or just didn't do it well enough or in a compelling enough package.
Marco:
I think Sony has done pretty well with the PS3, and it looks like the PS4 is going to be really interesting, but we don't know how they're going to execute yet.
Marco:
I would say Microsoft looks like they're in the best position to take the next eight years and actually have this console be strong, be relevant, be well-liked, be well-bought.
Marco:
I would say looking at these three, we don't even know that much about the PS4 yet, but just looking at, like for instance, there was this great hardware analysis today on Antec, which we'll link to in the show notes as well,
Marco:
about the Xbox One announcement and what it means, and they were comparing it to the PS4 announced hardware, and it looks like, in general, the Xbox One will have way less GPU power, but will then also almost definitely run way cooler and quieter as a result.
John:
Well, I mean, the thing about the power usage is that the Xbox One is meant to be turned on all the time.
John:
Exactly.
John:
Right.
John:
And so they wanted to have lower sort of idle power, whereas the PS4 is still, for the most part, a pure gaming console.
John:
And the PS4 has a super low power mode where it looks like it's basically off, kind of like PowerNap on a Mac.
John:
Right.
John:
But it still does stuff like download updates in the background and stuff.
John:
So the PS4 usage pattern is you go to use it, you turn it on, you do stuff, you turn it, quote-unquote, off.
John:
And it's not really off, but it's basically completely dead silent, no fans, anything like that.
John:
And that's its sort of mode to be like, oh, well, the overall power usage, I think, for your PS4 will be lower because you have it in that fake off mode most of the time.
John:
Whereas the Xbox One is supposed to just be off.
John:
on all the time like on on you know anytime a television is on that thing is on because aren't you supposed to be watching your television through it so it can't it can't be like the ps4 uh where it's in some super duper low power mode it's always got to be on in at least some state and both of these things as the anon tech article said you know are made with modern system on a chips that have power gating in the gpu as well where they just turn off execution units and cores that are not running so they should all have much better kind of not idle power but you know power when they're not being asked to play
Marco:
Well, but the Xbox One has this kind of like mid-level thing where it has this stripped down OS for lower power stuff like watching streaming video.
Marco:
And I think that's kind of an acknowledgement that the way people use these things really often these days is not for playing games for hours and turning it off and that's it.
Marco:
It's like maybe playing a game for a little bit, but then every night watching an hour of Netflix.
Marco:
That's such a common use case now that I feel like it's really, really smart for Microsoft to be optimizing for that.
Marco:
And Sony's background mode seems like it's more for downloading game content.
John:
Yeah, but the thing is basically off at that point.
John:
It's like auxiliary chips are doing all the work, whereas the Xbox One, the whole system on a chip is powered up and the thing is on.
John:
And it's running the two OSs plus the hypervisor and everything all the time.
John:
And if the game OS, you're not playing a game, the game OS is not doing anything interesting there.
John:
But it's all on.
John:
Everything is powered up and running.
John:
You're just relying on the fact that you can shut down six of the eight cores without currently being used.
John:
And if you're not doing anything with the GPU, most of that is in idle state as well.
John:
So you're getting your power down.
John:
But it's not the same as...
John:
the PS4, which has auxiliary... It might even be like an ARM chip or something.
John:
Some other little wimpy chip on the motherboard that runs and does the little wimpy background stuff when the thing is basically off.
Marco:
Yeah, I don't know.
Marco:
I feel like... You know, time will tell, but I feel like history will look back on the Xbox One's design as being smarter than the PS4's design for how people actually use these things.
John:
It's like someone said on Twitter today, or maybe it was in an Attack article.
John:
It basically depends on whether you think...
John:
the console for high-performance... The market for high-performance game consoles has peaked or not.
John:
Because if it peaked, then it's a smart move not to make one that is, like, super-duper powerful, but instead start going off in the new direction, which is to this TV box.
John:
But if it hasn't peaked, the PS4 is a better game console if all you hear about are games, right?
John:
And that's the bet Microsoft is making, that...
John:
Games are not enough anymore, that having a super duper awesome game console is not a sufficiently compelling product and that you need to have something else.
John:
And by having something else, people will more than forgive the slight, slightly lower game performance because of all this other stuff.
John:
I think that definitely remains to be seen because I think both of these devices, because the Xbox One is not as simplifying and as unifying as Microsoft thinks it is, I think it will still appeal mostly to not just hardcore gamers, but kind of like geeky type people.
John:
I would give my parents an Apple TV, but I would not give them an Xbox One.
John:
So I think both of these things are going to end up targeting...
John:
game console type nerds and early adopters and in that race between them i think it seems like it's probably going to shake out exactly like this console generation did the microsoft's going to win and they're going to sell more uh but that sony will do pretty well and i don't think the television integrated stuff will save microsoft and give them sort of a runaway success and just bury the ps4
John:
We've all just agreed that Nintendo is screwed.
Marco:
Yeah, I think you're right about that, too.
Marco:
I don't see Sony having as rough of a time as Nintendo at all, because obviously they have a big following, although so does Nintendo, but I think Sony is making...
John:
almost the right kind of system and i think it'll be good enough uh to be to be successful i think nintendo unfortunately is still making the gamecube there's also execution because like how many people are nervous about getting the first xbox one like all the poor red ring people like how many people it's totally unfair because of all the companies in the world the one that is probably the most careful about heat in its game console is probably microsoft for this generation because they've lost so much money on the 360 warranty repairs and stuff
John:
But the past generation is like, well, Sony made this insane machine with this crazy CPU, and they should have been the one overheating all the time, but their hardware has been really reliable.
John:
You can say, well, I guess Sony really knows how to make consumer electronics.
John:
So right or wrong, coming into this generation, I feel like I have so much more faith in the reliability of whatever the heck the PS4 hardware is going to look like.
John:
Maybe we'll all be proven wrong, and maybe the PS4 will be the thing overheating and screwing up.
John:
But going into it, I think Microsoft has a lot to prove, especially considering how humongous and ugly and mutant this thing looks.
John:
It just looks like it should overheat.
John:
It almost certainly will not, right?
John:
But it's just like, oh, Xbox is huge, lol.
John:
Law.
Marco:
All right, with that, let's wrap it up.
Marco:
Thanks to our two sponsors, Squarespace.
Marco:
Use coupon code ATP5 to get 10% off at Squarespace.
Marco:
And Windows Azure Mobile Services.
Marco:
Go to windowsazure.com slash iOS to learn more about that.
Marco:
Thanks, guys.
Marco:
Thank you.
John:
Now the show is over.
Marco:
They didn't even mean to begin.
Marco:
Cause it was accidental.
Marco:
Oh, it was accidental.
Marco:
John didn't do any research.
Marco:
Marco and Casey wouldn't let him.
Marco:
Cause it was accidental.
Marco:
It was accidental.
John:
And you can find the show notes at atp.fm.
Marco:
And if you're into Twitter, you can follow them at C-A-S-E-Y-L-I-S-S So that's Casey Liss, M-A-R-C-O-A-R-M-E-N-T-M-A-R-C-O-R-M-E-N-T-M-A-R-C-O-R-M-E-N-T-M-A-R-C-O-R-M-E-N-T-M-A-R-C-O-R-M-E-N-T-M-A-R-C-O-R-M-E-N-T-M-A-R-C-O-R-M-E-N-T-M-A-R-C-O-R-M-E-N-T-M-A-R-C-O-R-M-E-N-T-M-A-R-
Casey:
All right, titles.
Casey:
I do like David Smith's leading title, Champagne to Pour on Rap Stars.
John:
I like it.
John:
It's a little long, though.
John:
I don't understand why you're pouring it on.
John:
The rap stars don't pour it on themselves.
John:
It doesn't make any sense.
Marco:
It's a joke, John.
John:
I know, but it's like... Turn on the emotion chip.
John:
Why would you pour it on, like, the rap stars?
Casey:
Oh, you're so hypercritical, man.
Casey:
Who would you pour it on?
Casey:
God.
Casey:
Oh, Lordy, I gotta hang out.
John:
It was really expensive.
John:
I wouldn't buy it.
Casey:
God, I love you so much.
John:
It was like $1,000 a bottle.
John:
Like, nothing is worth $1,000 a bottle except printer ink, I guess.
Casey:
Precious printer ink.
Casey:
John, I love you so much.
Casey:
I can't wait for... I cannot wait for June.