Hi, I'm Eric Newcomer. And I am Madeline Rinbarger.
And this is the newcomer podcast.
Each week, Eric and I discuss the VC deals and the drama that
went down. Let's do it.
Here we go. Let's dive in.
Welcome back to the podcast. Happy new Year, Eric.
It's our first show of 2025. And Silicon Beach is on fire.
We're both safe in New York and comfy.
But it's pretty dystopian images to start off the new year.
Certainly our hearts are with everybody in LA.
You know, we make everything a tech story.
So we're like, oh, it's an important Tech City.
But obviously just a lot of friends in LA and it's, it's
tragic. So excited for these fires to
resolve. Absolutely.
Our heart goes out to our friends, you know, both in media
and in the tech community that are being affected even.
If you're not in tech, we care about what's happening.
To you, it's terrible. Yes, we we do care.
It is. It's really.
Especially our heart goes out to you know, but anyway, it's
terrible. But you know, it's also like, Oh
my God, what images? Yeah, it'll become a
disinformation story. I do.
They're like shouting about arson now, which I'm oh, my
skeptical. Anyway, I don't want it's been.
Going around everywhere. Yeah.
I yeah, don't want to speculate. You think there's Ars?
Yeah. I don't know.
We'll see. I.
We'll find out, but regardless, it's it's really tough and so
our hearts go out to everyone in the LA area affected by this.
Moving on to some different news, Waymo has hit parody with
Lyft. I feel like what's so crazy
about being in San Francisco is you're like you see these cars
and you're like, this is happening and the rest of world
is like, can self driving happen?
Yeah, when you're in San Francisco and at least for a
while when you've been because you got the early invite code.
So you've known it for a while, but it's around, it's happening.
And at this point, it is just the norm at this like it's, it's
surpassed one of the largest rideshare companies in.
Classic human emotional processing of new technology.
We have already moved past Oh my God, there's self driving cars
to I don't know, they're going to be a lot of problems and
you've been you've been talking to some of the Uber crew, the
the people who are used to human negative.
But I'm just laughing. But well.
That's the reporter angle, right?
Yeah, that's we always have to see what could go wrong, but.
So what could go wrong? I've been talking to some of the
Uber people who have had a little bit of of concerns from
their own experience scaling Uber in different cities and
communities that, you know, know this first hand that there's
things that come in when you grow like this.
You have, you know, the mass adoption of riderships.
You hit that pivotal moment. But but one thing that you need
to look out for always is the human element.
I mean, there's been an increase of reports of Waymo's getting
trashed. Obviously there was Waymo's
being set on fire in different parts of San Francisco before,
but just in general cleanliness is an issue if there's not a
driver in the car to maintain it, you know, how do you monitor
for that, You know, pro social behavior.
So that's just one factor. Waymo is becoming the ultimate
teenage hookup spot and drug drug.
I was completely private chauffeur.
That's like, Oh my gosh. People dreamed about it.
It's like, oh, you can have an office, you know, going when
you're on a long drive, you have your own private car.
But of course there are lots of other things people might want
sort of on demand private space for.
I mean, I think one thing that's interesting about the Uber
people's observations is just, you know, Uber obviously has
important technology, but in some ways the company succeeded
with operational excellence. That meant dealing with
regulators, but it also meant figuring out where the cars
could park and what what zones people could go into and how
they should handle sports, you know, like the baseball game
ending and everything, everything in between.
And so I think the message here is, OK, you figured out San
Francisco in sort of neat little zones when you're only letting
the elites on who are very studious about and very, you
know, it's on Team Waymo. Yeah, exactly.
You let the family on. Your team and so now the next
step is when you when you open it up even wider.
There's lots of new factors that you have to you know, control
for or not control for and figure out a way to deal with in
conversations with some people adjacent to the Uber world.
One thing I found interesting was is how the Waymo fleets that
are you know, launching in Austin and Atlanta later this
year are really partnering with Uber.
Uber is maintaining who's pretty much controlling the
infrastructure for that. And so I wonder if we'll see,
you know, more of these partnerships out of necessity
crop up at least in the near future is self driving.
That's clear. That's clearly a story Uber
wants. I mean, you know, they, they
want Waymo to be like, Oh my God, this is going to be such a
headache. Let's let's hand this over.
I think, you know, Waymo is in the power position.
They've got the technology. So they can say, all right, and
this city will do it. And this city, you do it and
let's see if you're really so much better.
So I think that will be an interesting experiment to, to
run. I mean, my question for you is
how much do you think this is all going to slow down the
deployment? Because I think the real
question is how much of the work that Waymo did in San Francisco
is specific to understanding the streets of San Francisco versus
they now have a playbook to roll out in other cities.
I mean, do you have a point of view on that?
That's a. Good point San Francisco has a
pretty unique setup, right? It's it's dense, it's narrow,
there's not as many, you know, factors of constant jaywalking
and the degree that you experience in a mega city like
New York, you know, and I think that they'll need to maybe take
a play by play city by city approach as they go forward.
Obviously western cities involve a lot more highway driving.
Self driving around cities is one of the hardest hurdles to
get across. And if you're in other urban
environments, especially in suburban ones with these self
driving trucking companies that are popping up for Hwy. driving,
that'll be a host of different problems, but presumably more
controllable factors than sort of all of the abnormal edge
cases that you have to account for in city driving.
As someone who used to be like oh self driving cars are way
overhyped, I think these are small speed bumps relative to
developing the technology. I mean first of all.
Oh you're bullish. Okay, you've done a full you've
jumped Yeah, I'm. Totally bull.
I've been bullish on self driving at this point.
I mean, I was bearish, you know, like, I don't know, five years
ago, you know, but when Uber was doing it, I was extremely
embarrassed because I saw how many interventions they had.
Once I was in way MO without a driver, I became extremely
bullish. But but my point is just that,
like they can restrict who gets on the network, you know, to to
worry about the quality. You can penalize people.
I mean, they're going to they have cameras looking in the
cars. They're going to know exactly
what happened. They can use AI.
To me, the most, the pro Uber Lyft case that I believe the
most is the sort of liquidity of the network or this issue of
when you actually have to pay for what way most cost.
And that's what we don't really know.
Will it make sense to have way MO's at the density that you
need so that you're ready for rush hour traffic versus right
now way MO can sort of be we're there when we're available and
if not, you'll take an Uber, you know what I mean?
They're they're sort of not a service that can exist, just
like to, to meet the flexible demand.
You know, Uber and Lyft's innovation was the incentivize
drivers to work when there was a lot of work to be done and not
when there wasn't. And way MO doesn't have the same
mechanism besides just, you know, parking the car.
Yeah, right now way MO is also top down to part of the Uber and
Lyft mechanism is that it's the driver's car, right.
And so that's another level of overhead that some people that
I've spoken to have said can be really difficult with scaling
going forward that you might need to find a way to handle
that that's not fully controlled by the company also
manufacturing the self driving software.
Yes. A recurring theme is always if
you give something away for less than it costs you to produce,
that will be a very popular product.
And then once you have to get the margins right, who knows how
things will sort out. And so how much is Waymo heavily
subsidizing this to make it work?
And can they find a model where they can deliver it
competitively? If they can't, they're going to,
you know, it's going to struggle.
Well, traditional, I mean traditional transportation
companies also typically have, you know, razor thin margins as
is like it's, it's a tough, it's a tough model.
Waymo is such a superior product to driving like that to me is
the case. They also have the leverage.
They can decide, do we work with automakers or do we do it
ourselves? Do we work with Uber or do we do
it ourselves? Like I would much rather be in
the way MO position. And I just think fundamentally
the the other piece of it is that they, if it's a network,
they get to coordinate all their cars together and sort of learn
things from each other versus of all the, you know, the car
companies are doing their own technology anyway.
I I think way MO remains in a super strong position.
People counted Google out forever and this thing in a
decade is going to be like transformative.
And I think I it's a question of when the first city says we only
want self driving cars, no more of these crazy human drivers.
Do you agree disagree. I mean, that's very, you're from
Texas, aren't you? You know, you don't have a
little bit of real American like we're never going to let get rid
of cars. It's like guns, you know?
No, I mean, I feel like it's it's the, you know, there I have
to speak to my Texan roots. There's some individual myth of,
you know, being the man behind the wheel, if you will, that I
think is going to be hard to give up in my in my counterpoint
to you, nothing rational entirely vibes, but.
That's what Texas is for, you know, the guns and cars can be
in Texas and the dense metropolitan areas will have no,
no human drivers and hopefully no guns.
But. What do you do when there's a
city in Texas where the whammers are?
What's the American experiment? But anyway, very exciting.
It's exciting news I think as someone who's really excited
about self driving like to see them hit this critical mass in
San Francisco and it they're expanding into more cities.
So we'll have this experiment play out again and again.
Moving on to the deal of the week, the live shopping platform
what not just announced in up round 265,000,000 Series E
fundraise Co led by Graycroft, DST Global and Avra Capital
which brought its valuation up to around 5 billion which is up
from it's last funding round in 2022.
Eric, you have been mixed signals on the live shopping
market, but. You know, I, I've read them off,
I think I mean pop shop, you know, is a disaster.
TikTok is ubiquitous. I did pull up the Google trends
and whatnot, you know, held strong and then recently had a
strong uptick, though strong upticks around funding rounds
are always extremely suspicious, but it it still feels resilient.
It's not a company that's sort of like falling away from at
least my quick Google trend search.
I mean, you were making the what I thought was the most
interesting point about what happens if TikTok gets banned.
Right. Well, TikTok.
So as a avid TikTok user, Full disclosure both.
Of us are obsessives, I think. Regret, regretful obsessives, if
you will, the shopping feature on TikTok.
The TikTok Shop offers some live shopping features and live
shopping is something that obviously has taken has some
audience in the United States if Whatnot is raising this great
round, but it's not. It's much more popular in Asia
and other countries. TikTok Shop does offer some live
shopping, so Whatnot does compete with them in some way.
Right. TikTok was subsidizing their
shopping like a ton I think like over Christmas.
Absolutely. The deals on there were
unethically low. Yeah, well, they just want you
to do 1. And then, you know, maybe I mean
that it makes you wonder, right? Like why?
Why does Whatnot need this much money?
And like, maybe one of the answers is they need to be able
to discount at the level of TikTok to get people to try it.
I assume there's some social media spend, but it is, it is
crazy in a moment where we're sort of in a downturn outside of
AI where and. Particular.
Has been so hard, yeah. Yeah.
And people are saying, oh, you can run your company with, you
know, just you and, you know, Chachi BT that that, you know, a
marketplace would raise this much money is amazing to me.
Well, Whatnot does compete with TikTok, particularly on the
TikTok Shop feature. If TikTok does end up getting
banned at the Supreme Court, then Whatnot would be in a
position to take up some of that market share.
So a degree of this funding round feels almost advantageous
that it's coming at this moment. I think the management's like,
hey, you know, there's what, 20% chance TikTok gets banned.
You get to get great investment if that if that happens.
It's trending. It seems a little more uncertain
than maybe it did a couple months ago that the ban is
actually going to go through, but.
Obviously, you know, one of the largest Trump donors this cycle
was also one of the biggest shareholders in TikTok.
And I think everybody thinks that's going to have a big
influence on it. It would be funny if you know
Marc Andreessen, who's Andreessen Horowitz is an
investor in this round and an investor earlier and whatnot
tried to pull strings to the opposite.
But I I doubt it happens and I I bet TikTok stays stays and
whatnot has to fight a fair fight to win over video
shoppers. Eric, you bet TikTok lives
another day. Is that your 2025 prediction?
Yeah, I mean, just like, man, I, I, I, my position, which I stand
by, is that the US should enforce reciprocity with China.
And it's not about being Chinese particularly manipulating the
US, but it's just like, if they have companies here, we should
have social media companies there.
If they can manipulate us, we'll manipulate you.
And it's the lack of reciprocity that is my issue.
So at the current moment, I support a TikTok ban.
That said, it would be a political disaster.
I feel like politicians understand this, and they're not
even quite in touch with the demographic that would go insane
if TikTok were banned. We're yeah, we're, I mean, we're
excited for the new year. I think it's gonna be a busy
year for us. We're planning our event
schedule. This is like the, you know, I
feel like this is the first year where just like as a business,
I'm like, Oh my God, every passing day is like a day less
to get everything done. We want to this year, which is
sort of a different feeling than I guess that's a good.
Problem to have, Eric. That's great.
It's a good problem, but it is also like I was complaining on
Twitter. I'm, I'm, I'm going to become
like one of these grind people or grind mindset people.
I'm like, I can't believe like the first full week of the year
is like January 6th because that means nobody was answering my
emails on like January 2nd and 3rd, you know, So all right,
good luck now everybody in LA and yeah, we'll see you next
week. Thanks so much.