The Newcomer Podcast

Firstmark Capital’s Rick Heitzmann is someone I turn to when I want to understand what public market activity means for private startups. Heitzmann’s got an ear to Wall Street from his offices in New York City, but he invests in private technology startups.So I invited Heitzmann on Dead Cat with Tom Dotan and Katie Benner. We tried to make sense of this sudden downturn. Everyone has seen it coming for years. We just never knew when the party would end. Building on my story “The Endgame” from last week, we talk about how rising interest rates — not a global pandemic — seem to be finally bringing the boom times to an end.“We’ve entered into a new normal,” Heitzmann told us. “We’ve entered into a new period where capital is not free, where it’s going to be more and more expensive.”Heitzmann reminded us why startup investors kept deploying money even as things seemed frothy. “In the last 18 months of a 10-year bull market, most of the money is made. That’s why people are always afraid to get off the treadmill,” Heitzmann said.We all marveled at just how long this bull market has run, and we speculated about which companies might come to represent the excess when the dust has settled and the retrospectives are written. “These quick delivery guys — that are all over the streets of New York, the Jokr’s, the Getir’s,” Heitzmann observed, “We saw Kosmo. We saw it didn’t work and then we just did the same thing with another $10 billion.”“We saw this movie. Everybody died at the end,” Heitzmann said. “Now we’re wondering why in the sequel we think there is going to be a happy ending.”Give it a listen.Read the automated transcript. Get full access to Newcomer at www.newcomer.co/subscribe

During the pandemic, the U.S. government relaxed rules that prevented doctors from prescribing controlled substances — like Adderall — over the internet. That’s created a bonanza for venture-backed companies like Cerebral and Done. Wall Street Journal reporter Rolfe Winkler has been chronicling these telemedicine companies’ prescription practices. Winkler — a friend and former bridge partner of mine — came on Dead Cat to talk to Tom Dotan, Katie Benner, and me about his stories.In March, with a colleague, Winkler documented how patients were getting Adderall prescriptions after 30-minute appointments. “All day every day, people were demanding Adderall,” a nurse practitioner for online mental-health company Cerebral Inc. told the Journal. “You can’t diagnose people in a half hour.”The Wall Street Journal reported:“Digital health startups that provide diagnoses and medications online for ADHD are following a familiar Silicon Valley playbook: They’re using software and the internet to remove the friction surrounding a service that is in high demand. Instead of a ride or groceries, this time it’s prescription drugs. Two of the most prominent new providers of these services for ADHD patients are Cerebral and Done Health, which now treat tens of thousands of patients online and have well-known supporters from the worlds of venture capital and sports.”Then in April, Winkler and another colleague reported that CVS and Walmart were blocking and delaying prescriptions for telemedicine startups. That same month, Cerebral’s former vice president in charge of product and engineering sued Cerebral over the company’s alleged focus on driving prescriptions.“When Cerebral determined that patients who were prescribed stimulants were more likely to remain Cerebral customers, the CEO directed Cerebral employees find ways to prescribe stimulants to more ADHD patients to increase retention,” the lawsuit said.This week, Winkler reported that startup Truepill, a pharmacy that until recently mailed some of Cerebral’s customers their Adderall medication, has decided to stop fulfilling schedule II drugs. In December, SoftBank’s Vision Fund led a $300 million investment in Cerebral that valued it at $4.8 billion.On Dead Cat, we talked about the tough questions these telehealth businesses have raised by applying the venture capital industry’s preferred independent contractor model to healthcare. At the 48-minute mark, we talk about Elon Musk’s effort to buy Twitter. Winkler, who has written about Musk’s Neuralink, offered a pretty rosy view (for a journalist) of the world’s richest man.Give it a listen. Get full access to Newcomer at www.newcomer.co/subscribe

Netflix’s stock price has been in free fall. The company was worth more than $300 billion late last year and now the stock market values the company at just $89 billion.At the same time, CNN’s buzzy streaming service CNN+ didn’t even get the chance to spread its wings. David Zaslav, now the CEO of Warner Bros. Discovery, pulled the plug on the nascent streaming service after Discovery closed its acquisition of CNN parent company WarnerMedia. On this week’s Dead Cat, Tom Dotan and I talk with Bloomberg’s Hollywood whisperer, Lucas Shaw, about Netflix’s struggles and the untimely demise of CNN+.Give it a listen. Get full access to Newcomer at www.newcomer.co/subscribe

On the latest episode of Dead Cat, we throw our weight behind Elon Musk’s bid for Twitter.Katie Benner, Tom Dotan, and I make our predictions about whether Musk is going to succeed in his mission to acquire Twitter. (I’m betting against.)Dotan offers Musk a Plan B: Musk could buy the beleaguered photo pin board company Pinterest for a measly $15 billion.I celebrate venture capitalist Marc Andreessen’s recent Easter absolution: He inexplicably unblocked me on Twitter.Meanwhile, Benner, who gave up Twitter for lent, brings us the good word about what life looks like post-Twitter — a reality we could all one-day face if Musk is able to bring the company crashing to the ground. Give it a listen. Get full access to Newcomer at www.newcomer.co/subscribe

Of all the sectors, I would never have guessed that one-click checkout companies would be the nexus of startup world drama. And yet that is where we find ourselves.The industry leader Bolt was co-founded by a man who seems desperate to win some sort of commendation for his conspiratorial tweetstorms.Meanwhile, rival Fast flamed out hot and, well, fast. The startup, which raised money from Index Ventures and Stripe, generated just $600,000 in revenue from its checkout service last year. The company was burning through as much as $10 million a month. Those figures come from the reporting of Kate Clark and her colleague Malique Morris at The Information. The duo have chronicled the fall of Fast, which had raised more than $100 million in funding.Tom Dotan, Katie Benner, and I spoke with Clark about Fast’s implosion. We also talked about Tiger Global renegotiating deal terms and Peter Thiel’s strange speech at Bitcoin 2022.Give it a listen. Get full access to Newcomer at www.newcomer.co/subscribe

On the Dead Cat podcast, Tom Dotan, Katie Benner, and I talk about Apple’s WeCrashed, Hulu’s The Dropout, and SHOWTIME’s Super Pumped — the TV shows about Adam Neumann, Elizabeth Holmes, and Travis Kalanick respectively. (Spoilers: If you believe that real events that have already transpired can be spoiled.)This morning, I emailed Fawzi Kamel, the Uber driver whose confrontation with then-Uber CEO Travis Kalanick went viral when I published it at Bloomberg. The video captures Kalanick — at the peak of the scrutiny around his leadership — telling Kamel, “Some people don’t like to take responsibility for their own s**t. They blame everything in their life on somebody else. Good luck!”I wanted to catch up with Kamel to see if he had seen himself on TV. He’s a character in the SHOWTIME television series Super Pumped, played by actor Mousa Hussein Kraish.Kamel called me back: He hadn’t watched the show. The fictional version of Kamel gets rid of his car, consults with a lawyer and his wife, and then posts the video online. The real world Fawzi Kamel was far bolder.Kamel was still driving for Uber when he sent me an email with the subject line “About uber.” He wrote me from his iPhone on Feb. 22, 2017: I started driving for uber in 2011So I know the company from the beginning and I can introduce you to drivers who started in 2010 under Ryan grave . We all know the dirty uber thief .Last Sunday , I picked up Travis and I told him that non of the drivers trust him  anymore . Cause he  cheated the drivers who promoted his  idea at the beginning and made him  who he  is  todayHe got mad and slammed my car doorThe point I'm trying to make is the answer of uber CEO after I told him that I Bankrupt because of him  . Didn't seem as an answer of a CEOAnyway , I have all this in video , be my guest to see itI just want it to go viral , cause the CEO is an a*****e arrogant peace a shitThank youFawzi kamelI replied 13 minutes later with only four words: “Send me the video!”After some emails back and forth, Kamel sent me the video under the condition that I couldn’t publish it without his permission. (Unlike on TV, he hadn’t consulted a lawyer and wasn’t married.) I watched it and knew that the video would captivate a world obsessed with Uber’s brash CEO.I spent the next couple of days trying to convince Kamel to let me publish the video at Bloomberg, where I was covering the Uber beat. Kamel was a hard man to reach — in large part because he was still driving for Uber to earn a living. Eventually, Kamel gave me the greenlight — even though Bloomberg couldn’t pay him for the video. It went viral almost immediately. Kamel told me over the phone this morning that I was the only reporter who had replied to his message about the video. I learned this morning that the dashcam video that he’d recorded wasn’t actually stored on his camera. So he’d had to go pay a company $60 for access to the video after a friend of his convinced him that it was worth the trouble.Ultimately, Kalanick and Kamel sat down, and Kalanick paid him $200,000 as a make-good. The money helped Kamel pay off some of his debts.Kamel is clear about one thing: He’s not driving for Uber anymore. “I will never drive again,” he says.I offered to share my SHOWTIME password with him, but he didn’t seem interested.Instead, I sent Kamel a cell phone video of the Super Pumped episode, so Kamel could at least watch a recording of another man acting out a recording of himself. These days, Kamel says he’s spending his time buying and selling stocks on Robinhood. He doesn’t hold that company in particularly high regard.Kamel has actually softened his tone on Kalanick.“Travis is actually someone — if you confront him — he’s a very good guy to talk to,” Kamel says.“Firing Travis was a big mistake because if they didn’t fire him, Uber could be way more today,” Kamel says. “That’s all I know.” Get full access to Newcomer at www.newcomer.co/subscribe

Hunter Walk, co-founder of the venture capital firm Homebrew, is a staple of tech Twitter. Walk worked on Second Life and at YouTube before founding his own venture fund along with Satya Patel.A month ago, the duo announced that they were dramatically changing their strategy. The firm had previously raised three funds from limited partners — $35 million in 2013, $50 million in 2015, and $90 million in 2018 — and invested in companies like Chime, Plaid, and Honor. Then, late last month, Walk and Patel announced that they had decided to change course and start investing their own money.That strategy shift will drastically reduce their pool of capital. And it will mean forgoing lucrative management fees that provide a guaranteed income as they wait around for their portfolio companies to mature. Walk came on Dead Cat to explain the decision to embrace an “evergreen” capital model. We chatted about founder archetypes and what types of founders he’s looking to invest in. In the second half of the conversation, we talked about how his views on content moderation have developed since his time at YouTube. And he bristled at the idea that I saw his brand as a “good liberal” VC. Give it a listen. Get full access to Newcomer at www.newcomer.co/subscribe

On this week’s Dead Cat, Tom Dotan and I reflect on this year’s SXSW. We take stock of the Austin tech scene and ponder what storylines emerged from the mega conference.At the 19:24 mark, VC Jeopardy starts. You can listen in as I host four venture capitalists in a fierce battle of startup-world trivia. Our contestants were Deena Shakir at Lux Capital, Charles Hudson at Precursor Ventures, Julian Eison at Next Ventures, and Steve Brotman at Alpha Partners. You can also play along yourself:Here’s a link to the first round questionsHere’s a link to the second round questionsThanks to my dear friends, Max Child and James Wilsterman at Volley for hosting the SXSW event. Wilsterman wrote the Jeopardy questions with some light oversight from yours truly. Volley is a San Francisco-based startup that creates voice-controlled games. The company just announced a partnership with Sony Pictures Television to produce a Jeopardy! game for Amazon’s Alexa and for Google smart devices. Great to see everyone who made it out to the event. Let’s do it again next year!Give the episode a listen. Get full access to Newcomer at www.newcomer.co/subscribe

Patreon CEO Jack Conte took the stage at my first ever SXSW event with a beer in hand. With Dead Cat co-host Tom Dotan, we discussed crowdfunding, OnlyFans, Substack, NFTs, Ukraine, and whether creators are brands.Speaking from the stage at the Volley Game Room at SXSW, Conte explained why his company wouldn’t compete with the likes of Twitter and YouTube to build audiences for the creators that it works with. “Patreon set out to solve a very specific problem. The specific problem we were solving was, there are creators who are getting millions of views, creators who have incredible reach, but they’re being undervalued by society,” Conte said. Conte said that he didn’t think Patreon could compete directly with large social media companies. “I actually don’t know that that’s a war that we would win. Those businesses are solid businesses. They have moats. They have network effects that make it very difficult to break into those worlds. I think Patreon’s best bet at solving this problem of creator payments is focusing very specifically on the problem of creator payments.”Conte seemed to be interested in exploring NFTs but was reticent to say that the company was specifically considering embracing them after receiving backlash on another podcast for even asking a question about NFTs.Toward the end of our conversation, Conte disagreed with journalist Taylor Lorenz’s stance that reporters should worry about their brands. Conte objected to the idea that creators of any sort should be thinking too much about their “brand.”For context, earlier this month, Insider quoted Lorenz in a much-discussed article.“When you think about the future of media, it’s much more distributed and about personalities," said Taylor Lorenz, a former Times tech reporter who recently left for The Washington Post. “Younger people recognize the power of having their own brand and audience, and the longer you stay at a job that restricts you from outside opportunities, the less relevant your brand becomes.”A bunch of political reporters — including the New York Times’ Maggie Haberman and Washington Post reporter Jacqueline Alemany — seized on Lorenz’s comments to take issue with the notion that journalists should shape their “brand.”Conte seemed to agree with Lorenz that journalists can increasingly operate independently of newsrooms, but he took issue with the idea that journalists should mind their brands.“Can journalists develop independent followings?” Conte asked rhetorically. “Of course they can.” “Do journalists need to be a part of larger institutions and leverage those institution’s historical reach?”“No, obviously, that is changing.” “But the more interesting part of what you just said is the distinguishing characteristics between this concept of a brand and the concept of a creator,” Conte said.“What I would argue is that those are very f*****g different things. Very different.” “A brand is consistent. It has brand values. It builds trust. It has decks of like its style and its voice and what it sounds like. And if it were a person, what kind of jeans would it wear?”“Like that’s what brands are.”“Brands are not human beings,” he continued. “They’re not.”“Creators are f*****g people. They’re inconsistent. They’re human. They're beautiful. They’re frail. They’re smart. They’re stupid. They’re strategic. They’re impulsive. They’re human beings.” Conte said, “We’re all trying to behave like brands today. And brands are corporations. Like we don’t have to behave like brands.”“When you watch a Prince music video — that f*****g guy is just himself, no matter what. And I don’t want him to behave like Walmart. I want him to be Prince. And my favorite creators, I want them to be themselves and I want them to feel human and I want them to not feel trapped by their brand values. I think it’s a mistake for everybody to think, ‘I need a personal brand. I need to create a brand.’” “Just be yourself.”Next week, look forward to VC Jeopardy with Deena Shakir, Julian Eison, Charles Hudson, and Steve Brotman. Get full access to Newcomer at www.newcomer.co/subscribe

Suddenly, Silicon Valley is worried about its Russian ties. I’m getting messages from sources about potential Russian-connected venture capital firms and software companies with inordinate numbers of Russian customers. Companies like Netflix, Disney, Samsung, and TikTok are cutting at least some of their services in Russia. Meanwhile, Russia is restricting access to Facebook.There were echoes of this moment, in 2018, when Silicon Valley was forced to reckon with its addiction to Saudi Arabian oil money after the brutal murder of journalist Jamal Khashoggi. Investors started to wonder if they should feel guilty about the transgressions of their limited partners.But then the spotlight faded and the business world moved on.This time seems different. Most importantly, the U.S. government is expressly putting pressure on wealthy Russian elites. The ethical questions are taking a back seat to the foreign policy objectives of much of the Western world. So even in cases where people can justifiably separate the individual from the country, there’s intense pressure to hurt the Russian government by cracking down on individuals and institutions tied to Russia. There’s perhaps no more prominent Russian-born investor than Yuri Milner. Puck reporter Teddy Schleifer asked this month:“What is Yuri Milner thinking? That’s the question I posed last week to Milner’s spokesman, after Russia launched a full-scale invasion of Ukraine, and then again on Monday, after Western governments responded with crippling sanctions. Milner, after all, is easily among Silicon Valley’s most prominent Russians, having made billions of dollars as the force behind DST Global, the venture firm that placed historic bets on Facebook and Twitter, among other Bay Area landmarks. But it was Milner’s embattled friends that put him on my mind: The Russian provenance of DST’s early capital was supplied in large part by Alisher Usmanov, a Russian oligarch who made his fortune in metal and mining before teaming up with Milner in 2008.”In the latest episode of Dead Cat, Tom Dotan, Katie Benner, and I talked to Schleifer about Milner’s public silence on the Russian invasion of Ukraine. We discussed the abrupt transition from a globally interconnected financial system to one that is suddenly looking to root out Russian money. (A DST spokesperson told Schleifer that Milner hasn’t taken money from Russian limited partners since 2012.) We also talked to Schleifer about his list of American oligarchs. He ranked Reid Hoffman and Eric Schmidt as the most important political donors of the moment on the left, and Peter Thiel and Larry Ellison as number one and number two on the right. Cheekily, Schleifer gave Chamath Palihapitiya the number four spot — on the right.We also delved into philanthropy. Schleifer told us about one of his favorite donors — crypto billionaire Sam Bankman-Fried — and floated the possibility that donor MacKenzie Scott’s rapid-fire giveaway project ends in disaster.Give it a listen. Get full access to Newcomer at www.newcomer.co/subscribe