Hey everybody, welcome to the random show.
My name is Kevin Rose.
Tim Ferriss.
Cheers.
We are in Cabo and we are lucky bastards.
Because we got invited to our friend Daniel Burka's bachelor party, my first bachelor
party.
Your first team here dude?
No way.
At a crazy drug lord compound.
Not literally a drug lord compound, but it looks like something that might be a combination
of Dr. Evil and Scarface.
It's insane.
I mean multiple pools, like a gym, a putting green, shuffleboard, no more than that, like
20 bathrooms.
It's insane.
We have 20 people on the record.
Yeah, 20 people.
So we are here in Cabo, it's been a couple days, we're just kind of hanging out, relaxing,
enjoying the sights really.
And you know there's a lot of things to see here at Cabo, there's great jet skiing, there's
dune buggies, dune buggies, dune buggies are awesome.
We did that yesterday.
Yeah, which I expected to be up and down dunes, and we were actually on single track.
It was like a rally race.
And we had a few people who couldn't drive stick and I would not recommend learning
to drive stick for your first time on a single track in dune buggies.
We did, we did drive.
And he was like, I got to drive halfway out and then you drove the way back and it's
a lot of fun.
I think you're going to tip, but I asked the guy, no one's ever tipped over one person
but they just went up a hill and then flipped over back.
In slow motion at about five miles an hour.
And then started screaming like 12 year old girls.
But for those of you who might be interested in replicating this experience, we are in
Pedregal and perhaps we can give some more details on this amazing compound.
Well we can say the name of the house actually.
Via Torquesa.
Via Torquesa.
And you can search for that.
It's actually available for rent to anyone.
It's not cheap, but we got 20 guys to split it.
I think with 20 guys splitting it, it was like 250 nights or something like that.
For a once in a lifetime bachelor party.
As you would hope.
Yeah.
There's plenty of room.
It's got surround sounds.
I mean, it's awesome.
And they're not paying us to sit.
Oh, the chef is amazing too.
You have the chef that's paying us for it as well.
Anyway.
So what else is going on?
We're going to wing it.
This is the nature of the random show.
Yeah, we didn't really have anything scheduled.
But we've had enough alcohol.
Yeah, we've been drinking all day and we're like, let's shoot a random show where this
is random.
And we're drunk.
So why not?
So here's a random point.
This is Astaxanthin.
And I've been experimenting with this because I don't like using sunscreen for a number
of reasons.
One of which is sunblock can only be categorized as such if it includes a number of specific
ingredients.
I believe zinc oxide is one of them.
So so-called natural or non-pharmaceutical products can't be labeled as sunblock.
And I decided to practice internally protecting myself from the sun using a double dose of
Astaxanthin.
So this is one to three capsules.
I'm taking six.
Of course, I would recommend you follow the label instructions.
But so far, a couple of hours in the sun, no burning.
And I'm not saying a one stretch.
Is that what this does?
It is a very powerful antioxidant.
And so how does it stop you from burning, though?
That doesn't make sense to me.
Well, it would have to do with both ultraviolet sensitivity, the different spectrums or the
different wavelengths on the spectrum, and then also your ability to deal with reactive
oxygen species.
So of course, doctors orders with beer naturally.
You know what?
Every time I eat my vitamins, sometimes when I'm out drinking, I forget I can put my vitamins
in my pocket in the morning.
And I'll go out with some friends and have a few beers.
It always feels so horrible when you take your vitamins.
Oh, yes.
Oh, yes.
It'll protect you from the sun.
We all need scum protection.
Sun protection.
Sun protection.
Neurons.
And male brands.
Cheers.
Cheers.
Moving on.
So, IPO fever.
What's going on with this?
I was just going to say, I feel bad when I take vitamins.
Vitamins with alcohol.
It just makes it feel like shit.
I don't recommend it.
You feel like a dumbass.
Anyway, IPO fever.
It's been crazy lately.
Zanga just got priced a couple of days ago, yesterday, I think.
They're going public.
Facebook, I've heard, is scheduled for early next year, like Q1 next year.
We've got potentially Twitter now.
I mean, there's a lot of really hot tech IPOs lately.
The cool thing, there's a couple problems with this that I see personally.
A lot of aftermarket, secondary market trading is going on with these stocks.
And so the problem with that is that a lot of like, you know, back in 2000 or back when
there was previously like tech IPOs, even before that, like let's just say Microsoft
or Novel Networks or whoever it was, some of these stocks started off at just a few
dollars a share and then over the course of like 10, 15 years, all of a sudden you have
this amazing stock.
There's this famous story that if you would have put $10,000 into Dell during its IPO,
you would now be like a multi-millionaire.
And so the problem though is that a lot of these companies are raising a lot of venture
capital.
They're staying private for a very long time.
And a lot of the valuation is baked into the company already, especially in the secondary
shares market that all this trading is like building up the valuation.
So you know-
Right, because they're still on the market to potentially raise additional capital.
Right.
Even though their shares are being traded.
Well, and the problem though is that by the time they go IPO and the general consumer
can actually get to the stock, you know, I don't know how much upside there is there.
So like, for example, let's just say Facebook, you know, they have valuation right now of
I don't know, 75, something like that, somewhere around there.
It's like 85, yeah.
It's depending on who you ask.
So let's just say the 85.
So my bet is that they're going to announce a billion users before they go IPO, before
they're a quiet period.
They'll go quiet and then they'll IPO.
Probably IPO at around 100 maybe, 100 and change.
And then let's say it drives up to 125, you know, like how much room is there for anyone
to really make some serious cash.
And a lot of these people aren't going to trade and the price jumps up even before anyone
can buy any of the shares.
So like, for example, when LinkedIn went public, when Pandora went public, these are companies
that, you know, they had, their IPO price was pegged at, you know, let's just say it
was 30 bucks, you think, oh, great, I'm going to go in, I'm going to sign on my freaking
E-Trade and I'll get $30 per share.
By the time you can actually physically touch the stock, it's at like, you know, 55, 65
bucks.
Yeah.
I learned that the hard way with precious metals.
If you put in an order, you don't have a stop.
You can end up buying things a lot more.
This is just before the crash, right?
What was that?
This is just before the little crash happened.
No, no, no.
It was after Silver's dive and then I bought, this is not intended as investment advice,
but little play money, yet none of it is, bought some gold, but via miners, so larger
and smaller miners, palladium and then platinum.
Palladium is done very well.
It's involved with manufacturing of computers and also catalytic converters.
So I think for the, for the short term, it could be very interesting, but IPO fever,
very interesting.
If you look at second market, it's also astonishing just to look at the valuations get blown up
to the point where a lot of these companies, if there's even a slight dip in the public
markets, their only option really is to IPO.
Because they become so expensive for the investors to get the type of return that they want.
The field of potential acquiring companies suddenly shrinks from 12 down to two.
Oh, for sure.
I mean, look at Twitter.
Twitter is in the same spot right now.
You look at that company, they're arguably a six, eight billion dollar company.
Who are their potential acquires?
You got Microsoft, maybe, potentially Google, and that's kind of about it.
Look, there's not many other people that can kind of write that check.
Unless there's a big bubble China company that comes in, wants to make a nice offer.
Because if you look at the price, I'm sorry, the price to earnings ratio on the stocks
here, people think they're, some people think, not all people, they're some very smart people
who very publicly do not believe that we're in a bubble, including Andreessen and Horowitz
of Andreessen Horowitz.
And they have some very compelling arguments.
But if you look at the numbers and the multiples in China, it's actually far beyond anything
here.
Yeah.
I mean, well, if you look at Apple, what was Apple?
I don't even know.
I'd have to go back and look.
But compared to Apple, something like an Apple stock, price to earnings to like a Baidu,
I mean, it's just insane.
Baidu's like 80 or higher, and Apple's in the 40s or 30s, and maybe 20.
The point that Ben Horowitz made was, and you can look at this argument or debate, rather,
we had a debate with Steve Blank, and it was, it's on the Economist, so Economist.com.
And he looked at the price to earnings ratios of some of the tech stocks, like Apple, compared
to the industrials, the traditional big cap, large cap industrials that are always super
tiny.
No, no, no.
But the multiples were actually more attractively priced from a value standpoint for some of
the tech companies.
Really?
Yeah.
Yeah.
Historical lowest for a lot of them.
We should like tech companies, though.
I would have to look back at the actual debate, but this was only a few weeks ago, highly
recommended people checking it out.
Yeah.
You know, typically when I research some of the like bigger, large cap, you know, Fortune
500 companies like GE and others, they have the extremely tiny, small price earnings,
you know?
Yeah.
It's so weird.
The stock market's such a weird thing.
Especially when you can afford not to pay or manufacture or engineer a situation where
you don't pay any corporate tax.
Right.
Which I think is the case with GE.
So speaking of public stocks, again, none of this isn't attended as professional or
investment advice, tax advice or otherwise, but what public stocks do you own or are you
still bullish on at this point in time?
So I don't own a whole lot.
You know, I have some Baidu.
I don't know that Baidu is one of those ones where I'm sitting there and I'm like, I've
made a lot of money on it.
Yeah.
And I'm like, Chinese search engine, you know, I'm not sure the ethics there totally
agrees with where I stand and I don't know if I should continue to own it.
It's weird.
You're sitting there and you're making cash.
A party is like, I'm making cash.
A party is like, I know they're censoring certain types of data.
It's like, ugh.
Yeah.
I think there's a ton of Apple.
I think that Apple is going to continue to grow.
I'm hoping that they're actually, I've heard rumors of them and this is, you know, not
insider trading because I'm not buying on the rumors, but this is stuff that's in the
public anyway.
But I've heard rumors that they're actually building a physical television with their
integrated iOS software.
It's not anytime soon.
My guess is probably another year, year and a half before we'd see something like that.
I think that could be a whole nother realm for them to get into.
You know what I mean?
Yes.
So anyway, Apple, Baidu, gosh, you know, when Facebook does IPO, we both, we both are bought
at the same time.
And just for the record, when you do that, you tend to have certain restrictions.
So it's not like buying your stock just before it pops and then being able to sell 24 hours
later, the typical restriction period is six months.
Yeah.
Six months.
You better be in it for the long haul compared to a lot of the frenetic trading, a lot of
the frenetic trading.
A lot of the long haul is six months.
But I mean, it's a lot easier in some cases to, let's say, predict how the mania will
affect the price in the first 12 to 24 hours, but six months out, that's a different story.
I think that Facebook's going to be pretty solid for a while.
Oh, I'm very bullish on Facebook.
I think that if they start doing payments, you know, their Facebook Connect is just like
a, it's a clever way to have integration in all these sites and if they just add payments
on top of that.
If I could go to a store and don't have to put in all that, you know, payment information,
it's just like, pay with your Facebook Connect, and my credit card's already there.
I'd just be like, done, done, done, ship, and it would just be huge.
It comes to the driver's license and credit card of the internet, which would be nuts.
So you know the only stock that I own, right?
I only own one public stock at the moment that I'm aware of.
I have like a handful of dollars and some funds that I've just been too lazy to get
out of.
I don't know.
Amazon.
Oh, really?
Yeah, I own some of Amazon as well.
I'm definitely in Amazon.
I'm very, very bullish on Amazon.
Although this recent California stuff has kind of freaked me out.
Yeah.
I mean, let's talk about that because that was a big freaking slap on the last Tim's
face.
I get a lot of those, but this one in particular.
So for those of you who don't know, Amazon, and the rumor is, and it may be a confirmed
fact, that some of the big box electronics stores, among others like Best Buy has been
named, have been lobbying to have certain types of sales tax levied against Amazon to
try to hurt their mail-order sales.
And there was an email sent out to every California Amazon associate, so someone who uses affiliate
links on Amazon that has a domicile or principal residence in California saying, we're discontinuing
the program.
Done.
End of story.
Because otherwise they'll have to start charging sales tax in California.
I don't know the exact mechanism because it gets a little confusing.
But that's why they're doing it, right?
But there's an economic reason for it, of course, financial reason.
But that puts a lot of companies out of business, a lot of bloggers, and we even talk about
how much you were making.
Yeah.
Well, I have 300 plus posts.
I don't put things up simply to refer people to Amazon, but if it so happens that their
X number of places to go to it, and it's the cheapest on Amazon.
Dude, it's most likely going to be cheapest on Amazon, and it's like, why not?
Dude, this is what I hate.
You're being very defensive about that.
I understand we have to, as like anyone thing, like, hey, I don't just do this to sell.
But you know what?
If you're writing a good blog post and there's a product that you recommend and you put affiliate
link to it, dude, I'd be happy to pay you some freaking cash because you took the time
to write the post.
Yeah.
And you know what?
I've actually tested.
In a couple of my posts, I've put underneath the product, instead of linking the product
itself, I've put click here, click here for affiliate link, click here if you prefer
not to give me a commission.
And the vast majority click on the affiliate link.
Yeah, absolutely.
I'm taking the time to do the homework.
But in any case, that adds up to, in some cases, in a few cases, mid to high, five figures
a month.
That's insane.
It really adds up.
Or like this equivalent to like a half night in Cabo.
Yeah, exactly.
It's pretty nice for you.
And that was just canceled, eliminated overnight.
Oh, Glenn's here, by the way.
Hi, Glenn.
Hey, Glenn.
Hey, Glenn.
That sucks, man.
That's a lot of cash down the drain.
Yes, but I think a lot of companies will run into that, who have traditional meaning brick
and mortar competitors.
So I don't think Amazon's alone in that.
But Amazon, if you took away, the way I look at Amazon, partially, and I know something,
I'm not going to name them, but a couple of billionaires, at least on paper, who also
own Amazon is one of their, let's say, two or three sole public holdings.
And their reasoning is strictly Amazon web services.
They don't even care about the rest of it.
Whereas I'm coming from a publishing standpoint, I'm also looking at the growth of eBooks.
I know my own numbers, and I know the numbers of friends of mine.
And I'm also looking at just physical distribution.
Despite a digital world, or the growth of digital products in the world, there's still
a lot of physical.
Oh, for sure.
And I have an Amazon Prime account.
Oh, Prime?
If I want toilet paper or whatever, rather than run around and try to do that in the middle
of the day, I do a lot of it through Amazon Prime.
Absolutely.
You are pretty sure you're the choir.
I love Amazon Prime.
It's because, dude, when you're really busy and you got working, got all this other crap,
yes, I can go to Walgreens, yes, I can go to Target or wherever else, Walmart or whatever
to get my miscellaneous stuff around the house.
But it's like, dude, I can go on there in two seconds to be like, add to cart, add to
cart, add to cart.
Free two-day shipping, and it just shows up.
That is so awesome.
It comes to my work, and then I put my car in and take it home.
It's awesome.
Oh, and they're testing local same-day delivery in Seattle right now.
That is going to be huge.
When you can go on Amazon and be like, you know what, I really need this, blah, blah,
I'm out of whatever it may be, paper towels, and I hit local delivery, bam, and they just
show up at your door.
That was like the promise of like web band from years ago, and finally it's happening.
Oh, no, I think they're right on the cusp, and the other bit which I think has been under-appreciated
is that Amazon put 135 million, if I my numbers are right, into living social, which is number
two behind Groupon and the daily deal space, and they haven't even begun to exploit that.
So you can imagine once they start to use scarcity and countdown timers and so forth
for items on Amazon that might be recommended.
In any case, very, very interesting company, but so that's IPO craziness and so forth.
Yeah, let's talk about whatever you got.
We should get back to the bachelor party since we have 20 of our guy friends here, but you
have one other thing you want to talk about?
I see you have a TED thing there.
I was just carrying this.
This is TEDx Medellin, so Medellin is a-
I build on this, too.
I wish I was going next week, right?
No, I just did it.
This is a few weeks ago.
Oh, you did?
Oh, I was supposed to go to that.
So Medellin is a city in Columbia, and-
How was it?
Wonderful.
I went to Medellin.
I've had a fantastic time.
It's called the City of Eternal Spring because the weather is so good.
It's at high altitude, absolutely gorgeous.
And it's becoming very, very popular in a certain group of expats because on some level
it's neglected.
It used to be run by Eskobar, who was a drug lord, and it was one of the most violent cities
in the world.
Buses were blown up.
There were murders left and right.
It was a disaster of a city.
It was the center of the cocaine trade, effectively.
And that has since changed.
Eskobar is no longer, and it's exceptionally safe.
In my experience, there are places you don't want to go, but I would highly recommend looking
at places that were famous for being dangerous, let's say three, four, five years ago.
In many cases, they're extremely cheap.
The people are very friendly because they've never really had tourism, and it's safe.
Because there's been a really solid crackdown.
And if you like attractive ladies or salsa, Medellin is famous within Colombia for both
of those things.
And then Colombia is famous within South America for both of those things.
It's very meta meta.
Meta meta.
Amazing.
But I had a blast.
I'm a really big fan of Medellin, so if you have the chance, you can go there, do a day
trip to Guatapé or Cartagena, it's a really, really nice spot.
So, what else is new?
Anything else to announce?
I just got back from Vegas to the Future Web Apps conference to talk out there for that.
What did you talk about?
Just everything from angel investing to starting milk to philosophy on building culture, you
name it.
And then also did something called Startup Weekend, which was a local startup competition
in Las Vegas where a bunch of tech entrepreneurs got together and pitched their ideas.
It was actually pretty cool.
It was a judge with Tony Shea and Tom from MySpace.
I got a chance to hang out with Tom, everyone's first friend on MySpace.
Really cool dude.
I'm blown away.
You know how you hear about people and I chatted with him a couple times in the past for various
different things back when MySpace had some issues with my account or something like that.
And then we finally got a chance to spend a day together and just such an awesome dude.
Really down to earth, just taking it easy from tech for a little while, had a big long
run at MySpace and he's enjoying Vegas, he has a house out there and he's doing some
cool things out there.
And it's nice, it's cool to connect up with other tech people.
But it's cool to see Las Vegas actually building a little bit of a tech scene, which they never
had before.
Do you think that'll actually take hold?
Yeah, you know Tony's pushing really hard because Tony is CEO of Zappos, he's moving
to downtown.
They're moving their location, they're taking over city hall, they're going to build out
a bunch of shops.
He wants to make it like a combination of like Austin, like kind of like the cool bar culture
that's in Austin with all this stuff down there, he's going to do a little tech incubator
down there.
So I think it has a real shot.
His tech incubator has worked out in the past with Zappos, so Zappos was one of several
companies within Frog Ventures.
Yep, Venture Frogs.
Venture Frogs, even better.
Thank you sir.
Glenn.
Anything from you?
No, I haven't really thought about anything.
All right.
The one observation I'll make about Glenn is that he looks like 18 most of the time,
he's very young, young handsome fellow.
He's a vegan skin.
It's a vegan skin, but when you have more than like four drinks, you look like Al Pacino
the next morning.
We saw that in China a little bit.
Yeah, that's true.
We're going to have a good time here in Cabo.
All right, so we should probably get back to the party I think.
Yeah, so highly recommend it, come out to Cabo, we'll put links for this place if you
want to rent it out.
Do you know what guest date here like two weeks ago?
Sign the chefs.
Sign the chefs.
Shoulder.
Yeah, that's pretty cool.
He's on his uniform.
Anyway, cheers everybody.
All right, cheers.
Bye.
