Dec. 3, 2020

Big Tech monopolies and the innovation chill

We know Silicon Valley is heavily populated by copycats, but what does that mean for the future of large-scale tech innovation?

At what point does “participating in a new format” turn into “stealing an idea?” In the world of Big Tech, the line is incredibly fine.

And given that we’ve deemed Big Tech the arbiters of morality in the modern business world, their decisions to borrow, steal, or innovate are incredibly impactful. What happens to entrepreneurship and innovation in a world that rarely gives credit where it’s due?

That’s what we’re getting to the bottom of today with Casey Newton, writer of the Platformer newsletter and expert on the intersection of Big Tech and democracy.

This is an important episode—Big Tech steals ideas from smaller upstarts in part as a means of insulation from competitive threats...because Facebook, as influential as it might be, has no guarantee of immortality. Don’t miss Casey’s insights.


Kinsey Grant, Morning Brew business editor and podcast host [00:00:08] Hi there, everybody, and welcome to Business Casual. I'm Kinsey Grant, and you know what I'm about to say. Let's get into it. [sound of a ding]


Kinsey [00:00:17] Last time I made an appearance in your AirPods, whether they were real or Amazon knockoffs, we were talking about the phenomenon of tech copycats. We've seen these copycats strike time and again. As soon as a scrappy young company finds some sort of artful product market fit with a new tool or a new feature, some tech titan swoops in and issues a nearly identical product. It's like Instagram Stories or Twitter Fleets, near-identical copies of the stories Snap pioneered in 2013. 


Kinsey [00:00:45] I spoke about this with Sonos CEO Patrick Spence in our last episode, and I was struck by how confident Patrick is in his efforts to swat away these copycats of his high-end, high-tech speakers using the legal system. He's pretty confident he can fend off imitators. But Sonos is a company that's existed for 18 years. It has the benefit of time and experience on its side. 


Kinsey [00:01:08] What about the younger startup? What about the company founded just a couple of years ago that finds itself being ripped off by big tech? How does that company survive? And if it doesn't survive, which is entirely likely, what does this tech theft mean for innovation as a whole? Might we see fewer innovative companies doing innovative things when they know launching means opening themselves up to the risk of being copied? So, let's find out. 


Kinsey [00:01:33] Casey, do you think [chuckles] you'll be able to help me answer some of these questions, parse through this tech copycat phenomenon? 


Casey Newton, Platformer newsletter [00:01:39] I know I can. 


Kinsey [00:01:40] You know you can. I love the confidence. [chuckles] You heard it here first, folks. Casey is going to help us do that. This is Casey Newton. He is—what I was trying to think of what I would compare you to in like, the tech media space. And I was thinking the Walter Cronkite of tech news. You're super-trusted, really well-respected, somebody people turn to when they want really great insight and analysis. 


Kinsey [00:02:00] You recently launched the Platformer newsletter covering big tech and democracy. It's incredible. I highly recommend it. And we're lucky to have you here on Business Casual. Quite the get for us. We're very excited. 


Casey [00:02:10] Well, thank you for having me, Kinsey. I'm excited to be here. 


Kinsey [00:02:13] Awesome. I think we should just jump right in. There's certainly a lot to cover here, a lot to get through, and a lot of big tech to try to better understand. So I want to start here, Casey. We know that tech companies lift ideas. We've seen it happen again. We have plenty of examples. If we want any evidence that this happens—even patents, you know, patented ideas that are being taken to court. But I have to wonder who's the worst offender? Is it really big tech that is the worst offender of this copycatting that we are referring to today? 


Casey [00:02:40] I think the company that gets the most criticism for this is Facebook. And I think that a good deal of that criticism is justified. But I also think that it is in the nature of these social products to copy each other. And maybe we can talk about why that is. But, just to run down the history. 


Casey [00:03:00] First, Facebook tried to copy Twitter. It got very jealous of the fact that Twitter was being used as this real-time news source. And so it put in a lot of features that were designed to kind of mimic it. And then Snapchat came along and started to eat Facebook's lunch and Instagram's lunch. And so Facebook tried three or four different times to figure out a way to disrupt Snapchat. 


Casey [00:03:20] Eventually succeeded when they created a pretty good clone of stories inside of Instagram. And then TikTok came along. And now Facebook is hard at work on cloning TikTok. So everywhere you look across the Facebook landscape, you're going to see ideas that were borrowed from elsewhere. 


Kinsey [00:03:34] Yeah. It certainly is the one we point to all the time when we think about this. I think that Instagram Stories really has to be the [laughs] biggest example of this. And to the earlier point that they created this kind of more used, better product, I use Instagram Stories way more than I would Snap Stories. [laughs] My attitude is like, I'm not in college anymore. I can't use Snap. [Casey laughs] But that is what we used to use all the time. 


Kinsey [00:03:56] I want to touch on what you mentioned when you started this answer, that this is kind of in their nature as social companies to participate in this kind of borrowing or ripping off or knocking off, whatever you want to call it. Why is that? 


Casey [00:04:08] Well, when you think about what a social app is, it's a way for people to communicate. But the way that the app stands out is by creating a novel way for us to communicate. Twitter introduced this kind of constraint about the post had to be really short, but they were going to be in real time. Or Snapchat invented the idea of messages and stories that disappear. And those novelties attract user bases. 


Casey [00:04:33] And so if you've created one of those previous novelties, like Facebook, which created the news feed, which was a really early example of that sort of thing succeeding, you're going to start to get not only jealous, but you're going to start to feel an existential threat. Like all of a sudden this company that I never even used to think about is siphoning away time from some of my customers. So I need to go and get them. 


Casey [00:04:54] And you have two choices. One is you can try to invent a brand-new thing that sort of siphons all the attention back, or you can just copy what you know already works. And if you're a big public company and you're a little bit less risk—you're a little bit more risk averse maybe than you would have been when you were younger, you're probably going to do the obvious thing, which is just a copy. 


Kinsey [00:05:15] Yeah, absolutely. I have to wonder what the importance of differentiation is for these tech companies. From the perspective of a user, you go to Twitter for a very different reason than you go to Facebook, and you post on Twitter for an even more different reason than you might post on Facebook, if people are even still doing that. Do these companies take that into account? That you use Twitter in a different way than you use Facebook, than you use Instagram, than you use any social platform? 


Casey [00:05:40] They do. I remember before Instagram launched Stories, I went down to headquarters and I met with Kevin Systrom, the co-founder of Instagram and the CEO at the time. And after he sort of showed me and surprised me with this big copy of Snapchat that he had just put the finishing touches on, what he told me was we don't see this as a feature. We think of this as a format. 


Casey [00:06:01] Like, we think that you are going to see disappearing stories and all sorts of different apps. And so we want to create our take on it. And I think to Instagram's credit, if you look at its version of Stories today, it actually is pretty different from Snap. You can, for example, go live from Instagram. You can't do that on Snap. 


Casey [00:06:18] And we could name a bunch of other features. So I think when copying works best is when a platform figures out something that it didn't have before but that it can put its own twist on. And I do think we've seen some instances of companies doing that pretty well. 


Kinsey [00:06:34] How do we draw this line between feature and format? The Stories example is a useful one because it's so obvious. But, I think that really capitalized on this trend of ephemeral content. People liked disappearing content. It took the pressure off. How do we say, oh, we're just capitalizing on this trend versus we're perfectly ripping off a feature that you launched years prior to us? 


Casey [00:06:55] I think the way I would think of it is like, a feature is maybe just a tool. So like, adding a sticker to a post might be a feature. I think a format is some different kind of media that you can imagine infinite variations. So, for example, on TikTok, the idea of shortform video, you know, it's maybe a minute long. That's a format. But within TikTok, you have all sorts of different tools that you can use to create different kinds of videos. 


Casey [00:07:26] So, the other thing I would say is that there are a lot more features than there are formats. And when one of these new formats is discovered, and turns out to be really popular, that tends to be a kind of inflection point in the industry, where everyone all of a sudden says, oh, gosh, we need to go figure out this new thing. 


Kinsey [00:07:43] Why do they feel such a drive to go figure out that new thing? What's the main impetus behind this effort to take what [chuckles] other people are doing and try to mimic it in your own way? 


Casey [00:07:53] Yeah. It's really interesting because I think a lot of average people and certainly reporters, we just sort of take the existence of these big companies for granted. We assume that Facebook is as eternal as the sun. And yet if you work inside Facebook, you don't feel that way at all. You think we're only one bad quarter or one new competitor away from disappearing completely. 


Casey [00:08:15] And in fact, new employees, when they start working at Facebook, are given a handbook that says something to the effect of if we don't build the next version of Facebook, somebody else will build it for us, and we won't exist anymore. So they really kind of have this paranoia inside the company that they always have to be alert to the next threat on the horizon. 


Casey [00:08:34] And so something that happens to Facebook—in particular, in June—is this research that comes out that says that kids under the age of 18 are spending 80 minutes a day on TikTok. And think about it—if you're Instagram, you want those kids to be using Instagram. And if TikTok already has the younger generation and they're already spending over an hour a day on that platform, that really does become an existential threat, because that gives TikTok a base from which it can build a million other things. 


Casey [00:09:02] So, on one hand, it is true that Facebook is a huge monolith and it's not going away anytime soon. But on the other hand, it's true that they do have competitive threats and they have to fight them. 


Kinsey [00:09:12] Right. I wonder, though, about this ebb and flow of tech trends. You know, there was MySpace before—I mean, well, [chuckles] people used MySpace a lot before they used Facebook at the scale that they do today. And eventually, MySpace's day in the sun came to an end. It met its demise and people migrated to another platform that then sucked up all their money and all their time and attention. 


Kinsey [00:09:33] And that was the natural progression of trends. And that was the way things went. With this sort of idea of, well, I own Instagram now, I'm gonna mimic what kids are spending 80 minutes a day doing [chuckles] on this platform, does that throw that ebb and flow off-kilter? And is that a problem? 


Casey [00:09:51] Um, you know, it's a good question. I think that we can have opinions on whether it's good or bad. [Kinsey laughs] To me, it's like sort of having an opinion on whether gravity is good. [Kinsey laughs] It's like, well, you know, it has some benefits and some drawbacks, but at the end of the day, it's not going anywhere. 


Casey [00:10:09] And I just think the incentives that are built into capitalism mean that whenever the hot new thing comes along, if it starts to eat my lunch, like, I'm going to build a version of that. Now, where I think, you know, you can have a really productive discussion is what kinds of competitions should be allowed. And right now, we see the U.S. government is starting to take a really active role in working through that. 


Casey [00:10:32] There's already been an antitrust lawsuit that's been filed against Google. And what it has said is you are illegally using your market position to crowd out competitors. You're paying Apple billions of dollars a year to be the default search on the iPhone. And that does prevent the kind of natural ebb and flow of companies rising and falling. You're essentially paying Apple to ensure that no one can ever come in and steal your spotlight. 


Casey [00:10:56] So there are definitely things that companies can do that are anticompetitive. And I think the government has a role to play in making that playing field more fair. 


Kinsey [00:11:06] Now, I have to ask what role the government plays here. Have legislators basically decided that there will be winners and losers in this space by not really making any decisions at all? We hear about the hearings and we watch them and we make fun of Mark Zuckerberg drinking water in front of the Senate. But at the end of the day, these companies are still trillion-dollar companies in some cases. So it makes me wonder if legislators really have already drawn the line. 


Casey [00:11:31] Yeah, you're totally right. We had no meaningful antitrust enforcement in this country for almost 30 years. And I'm sorry, 20 years is what I should have said. And we paid a price for it. But the government is starting to pay more attention now. I think the closest that the government came to picking a winner in the modern era was when Trump tried to ban TikTok before forgetting about it. 


Casey [00:11:52] But that move would have likely made Facebook and Instagram the most successful and dominant social app for another generation. I don't mean 20 years, but like whatever the social media increment of years that would have been. Like, that would have been picking Facebook as the winner, sort of by default. Now I think TikTok will probably survive in a different form. 


Casey [00:12:13] And I think TikTok really is looking like it is going to be the defining social app of this era. And I have to say, that caught me by surprise a little bit. I'm somebody who's written a lot about how little competition we have in social networks in particular. And oh, look, lo and behold, here comes a real competitor, and it's giving Facebook a really hard time. 


Kinsey [00:12:31] Yeah. It's so interesting to think about the timing aspect of all of this. Because these companies that we're talking about stealing good ideas and trying to use them to crowd out innovators and younger companies, they themselves haven't really existed for all that long in terms of the history of capitalism [laughs] in the United States. We're talking about two decades at the most, and in some cases, a handful of years. It's really, really strange to think what this might look like in, say, a Facebook lifetime from now. [laughs] We have kind of no idea. 


Casey [00:13:02] Yeah, it's really true. You know, I don't know. I do think that looking back, it was unwise to let Facebook acquire Instagram and WhatsApp in particular. I think that we did lose out on a lot of innovation in the market. It's probably not a coincidence that when a competitor did emerge, it was in China—just a different market with different expectations. But the fact remains that the competition did show up when maybe we weren't expecting it. 


Kinsey [00:13:33] OK. We're going to dig into this innovation aspect in just a second. But before we do that, we're going to take a short break to hear from our sponsor. — And now back to the conversation with Casey Newton. 


Kinsey [00:13:44] Casey, let's dig in, like I said, let's dig into this innovation. Let's understand how innovation is at stake when we think about these, quote unquote, tech copycats here. Does this squash innovation that these companies are rolling out new features or formats, however we want to interpret them, that might rip off new ideas from younger companies? What happens to innovation when this is the norm? 


Casey [00:14:08] I was talking with a big tech CEO in the past week, and he was saying to me that he actually thinks that U.S. firms don't copy quickly enough, and that if you go to China, the level of copying there is just on a completely different level. And if there is an even moderately successful feature in one social app, it will be in every other social app within days because that is just how ruthless the competition is there. 


Casey [00:14:35] And his point to me was this has a lot of consumer benefit. Because when everyone is copying, they can't help but introduce their own little quirks into the process. They can't help but try new things along the way. And that's usually where we get benefits as consumers—is from that competition. That's why I like banging the drum about competition. 


Kinsey [00:14:55] Yeah. 


Casey [00:14:55] It's selfish, right? Like, I want more cool stuff to use on my phone. So, his point was, if you just encourage more competition and people copy faster, we might get further down whatever road we're traveling down than this sort of slower approach. I think that, like, Chinese consumers might look at the way we talk about competition here, which is often to suggest that no one should ever copy each other, and they would just sort of laugh at that as impossibly quaint. 


Kinsey [00:15:22] OK, I have two questions. Number one, which tech CEO was it? 


Casey [00:15:27] Technically, I'm not supposed to say, but I can tell you it was—I'll tell you, it was a man. 


Kinsey [00:15:32] Oh, my gosh. [laughs] Let me guess. [Casey laughs] A white man. [laughs] 


Casey [00:15:37] That is also correct. You're good at this. 


Kinsey [00:15:40] OK. Well, I will leave the guessing to our audience here. [Casey laughs] But my next question is, this brings to mind something of a sort of incremental innovation and what role incremental innovation should play versus broad, giant, entirely new ideas kind of innovation. 


Kinsey [00:15:56] Like wiping the slate clean and doing something totally different versus making small, incremental changes that, of course, are innovative and create a better product for the consumer, but maybe aren't taking the big picture approach that we might require for something like Facebook to come up with a news feed. That wasn't incremental. 


Casey [00:16:14] Yeah, and this is always a question of how do companies balance the kind of day-to-day innovations/copying that they need to do just to keep the lights on versus carving out time to build the truly next generation products. And, you know, companies have a mixed record on this, but that's what we would expect, right? If you're really trying to build a future, you're probably going to strike out more times than you successfully connect. 


Casey [00:16:38] I think Google really created the template for this with its X Division, its Moonshot lab, which is mostly failures, but also seems like it advanced the cause of autonomous vehicles by many, many years. I think that will probably be one of Google's lasting contributions to humanity, even though it had nothing to do with the core search business. 


Casey [00:16:59] But what Google had to do to get there was set up an entirely different division, spend billions of dollars over many years that returned nothing to the company, just in the hopes that maybe by the middle to end of this decade, we will have robot taxis in at least some cities and at least some conditions. 


Casey [00:17:17] So it's a really long, hard slog and most companies can't afford it. But, look at how much these companies are spending on research and development. They do report that publicly. And for all of them, it's billions. I can't remember what the figure was, but I think Apple spent a record amount on R&D in the last quarter, and it sort of made me wonder, gosh, what are they working on? 


Casey [00:17:40] We know they've worked on a car. We know they're building an augmented reality headset, and who knows how far along those things are. But if they arrive, we'll be glad that they did. By the way, that's the sort of thing that only a tech giant or the government could typically fund. That's not something a startup typically can go after. 


Kinsey [00:17:58] Yeah. I don't want to sound like a big tech apologist, but that's so true. Like, this is the only kind of company that could make this happen. It's a trillion-dollar company that can spend billions. Facebook spent, I think, like 17 billion or something. I had a number in my [chuckles] interview with Patrick that they spent so much money on R&D and they're really pouring money into things that, to at least Google's situation, they have no guarantee that are actually going to work. 


Kinsey [00:18:21] In fact, the cards are stacked against any of this actually working. So there is a role for these big tech companies to play. And I don't want to come off as saying that they have totally destroyed society and everything's worse off because of it—certainly in some ways, but not in every single way. [laughs]


Casey [00:18:36] Look, I mean, we have to check back in 50 years [Kinsey laughs] to see whether they destroyed society. There is still a chance. 


Kinsey [00:18:42] [laughs] That's true. We'll —


Casey [00:18:43] We can't let him off the hook in the middle of it. 


Kinsey [00:18:45] Yeah, yeah. We'll have to come back and rerecord this in five decades, see what's up. Maybe podcasting will be totally innovated. 


Kinsey [00:18:51] This also kind of brings to mind, when we think about the ways that big tech has kind of degraded society in a certain respect, when we copy tech that doesn't always work the way that it should, are we just kind of proliferating these bad ideas and these bad practices and these bad content moderation rules by just copying what exists instead of making something that's better? Different, but better? 


Kinsey [00:19:13] Facebook has a problem with misinformation. If we're copying what they're doing, are we just making it worse? Are we magnifying it? 


Casey [00:19:20] Yeah, I mean, I think it depends on what you think the problem is. If you think the problem is that social apps in particular are engineered to be addictive and to distract us, and you're going to copy the most successful aspects of one product to create your own, you know, addictive, distracting app, then, yeah, that's not awesome. 


Casey [00:19:39] And I think it's always interesting to see how these companies, even as every company becomes a version of every other company, how they try to advocate for some noble mission, which is often, like, very vague. [laughs] And it sort of speaks to the fact that, well, you know, at the end of the day, we're just kind of cranking widgets over here for money. 


Casey [00:20:00] I don't know. I mean, I think, you know, if you're a young startup founder and you want to do good in the world, you should try. But you should do it with humility because we know what the road to hell is paved with. And we have seen many companies make that mistake over the past decade or so. 


Kinsey [00:20:17] Yeah. It's exactly right. This has been such a—I don't want to say difficult, but maybe, yeah, I'll say difficult—it's been a difficult concept to come to terms with in making these episodes especially. But even in just covering big tech and talking about big tech on the whole, that we have this sort of expectation—a moral expectation—that companies are going to do the right thing, that the leaders of these companies are going to try their best to have good intentions. 


Kinsey [00:20:40] And often we fault them for things that might, in any other scenario, be perceived as human mistakes. But we have this idea that they should be held to a higher standard. And in some ways, they absolutely should. But, I think to expect that every corporation out there and every leader of every corporation out there is going to always have the best intentions, and to always operate by this code of responsibility, is pretty unrealistic. 


Casey [00:21:05] Yes. I think—here's my basic belief, which is that if you are looking to your biggest corporations for moral leadership, [Kinsey laughs softly] then something has gone terribly wrong in your society. We should be looking to the elected leaders of our democracy for moral leadership and the companies to just, like, hire people [laughs] and pay them money. But it's the government that should really be taking care of us and protecting us. 


Casey [00:21:32] But because we have been through such a crisis in recent years and because so many institutions that we depend on are under attack, we have increasingly turned to the big tech companies for moral leadership. We want to take a stand on this issue. And I'm glad the companies have been around because they actually have served as a check on some really bad things that could have happened. 


Casey [00:21:54] But the fact that we expect these companies, which, you know, often exploit labor and have really negative externalities, I think reflects very poorly on our country. 


Kinsey [00:22:05] Does that happen in other countries? 


Casey [00:22:07] To some degree. I mean, I would say there are probably some countries that had a more functional society over the past four years than we did. But they also don't have the biggest companies in the world there. If you're like, I don't know, Norway or Sweden, you know, maybe your democracy looks a little better, but you haven't grown an Amazon or a Facebook in your backyard. So, yeah. 


Kinsey [00:22:28] OK. So speaking of this kind of bigger-picture role of technology in society and in business in general, why is it that when we think innovation and when we're having this conversation about the ways that tech companies interact with one another, big versus small, big versus big, what have you, it is centered so frequently on innovation? 


Kinsey [00:22:46] How come this is where we expect the next big thing to always come from in our society? But I think also the world [laughs] more broadly. It's always the expectation that tech will change the world—or big tech will change the world. 


Casey [00:22:59] So two things. One is not every company is a tech company, and so, I think it's almost just become a shorthand for business right now. I do think there's a world where we could invest more in science and education and we could expect a lot more innovation to come out of that. But that's considered, I don't know, communism in the United States, and so we don't try that, and we leave everything to the invisible hand of the market to figure everything out. 


Casey [00:23:27] The second thing, though, is that companies set this expectation. Every time a Jeff Bezos or a Mark Zuckerberg or a Tim Cook talk about what they do, it's never I made a phone or I made a smart speaker. It's we have built a bicycle for the human mind. It's we are pushing the human race forward. And so they're constantly selling us on that idea and it does set an expectation that we can hold them to. 


Casey [00:23:56] Now, hopefully you're out there taking that with a grain of salt. It is also true that they build useful tools that do incredible things for us. So you have to just sort of keep all of these ideas in your head at the same time, I think. 


Kinsey [00:24:08] Yeah, absolutely. All right, Casey, we've gotten a really fantastic handle here on the role of these big tech companies in society and in the tech space. More specifically, we're going to take a short break to hear from our partner. And when we come back, I want to hear your perspective on the startup's role in all of this. So a quick break and we'll be right back. —


Kinsey [00:24:29] And now back to the conversation with Casey Newton. Casey, let's take some time here to consider what this all means for the young, enterprising, college student who wants to start a company and actually is endeavoring to change the world—has those good intentions we were talking about before. Do you think that this idea, that big tech might steal your concept or your feature at any given moment, prohibitive for people who might actually want to start a business and try to be innovative? 


Casey [00:24:58] I mean, look, there are definitely reasons to be concerned. There are incredible stories of entrepreneurs who go in to meet with a tech giant, show them what they're working on. Maybe there is a discussion of an acquisition. The acquisition doesn't happen. And then the tech company turns around and just builds a version of that product. 


Casey [00:25:16] Like, you just Google that basic idea and you'll find plenty of examples. And so I do think that some caution is warranted there. But I also don't think that the mere prospect of a tech company copying the thing that you built or trying to should be enough to dissuade you from starting a business. 


Casey [00:25:36] Ultimately, if you're confident enough in your idea, you should be confident that you can outwork and outhustle the big guys, because often your smallness gives you an advantage. It makes you faster and you have more control and more agency than a company where everything has 19 layers of legal review. 


Kinsey [00:25:55] Right. Yeah. There is a role for the small business, certainly. But I also want to say that I think it's important to recognize that the kinds of people who are starting businesses, at least here in the United States, by and large, are the kinds of people who think that they can take on Google. [laughs] 


Kinsey [00:26:09] These are the kinds of people who are very confident in what they're doing, who often have the backing to make that happen, have the ability to take a chance and fail. And that means something. 


Kinsey [00:26:20] I also, though, see in some regards, the ways that it might feel impossible to compete with big tech when you think about not only the money that they have and the budgets they have for R&D, but also just the data they have [chuckles] on the people around them and the talent that they have. How should we consider that when we think about what the startup can do to compete? 


Casey [00:26:39] There are just a lot of businesses I wouldn't try to get into. If you, like, wake up one day and you're like, the iPhone's cool, but I can build a better phone and operating system, like, that's just going to be really, really hard. [laughs] It's probably not where I would start. 


Casey [00:26:54] On the other hand, if you look at, before the kind of recent VR boom, the Oculus founders figured out some ways to miniaturize some technology and put it together in like kind of a broken rig, but used Kickstarter to get some attention and crowdsource it. And they were able to put together a pretty respectable version one of their product. And eventually Facebook bought it for a couple billion dollars. 


Casey [00:27:16] So, you know, sometimes even things that look like they're going to be way too expensive for you to pull off, if you can have some sort of technological breakthrough, you may be able to do more than you think. But I think in every given moment, there are just going to be some startups that are easier to do than others. 


Casey [00:27:34] Like for the past five years, it's basically all been enterprise software tools. People are trying to figure out what parts of the economy still haven't been digitized yet, which is why, when I get press releases about new startups, it's like, well, we've figured out AgTech and it's like, yeah, I understand why this was probably the literal last thing that Silicon Valley disrupted. 


Casey [00:27:55] But like, we're getting that low into the barrel, [laughs] right, where it's like, now farms are going to get tech. So, look, this is what entrepreneurs do. Entrepreneurs are awesome at scratching their own itches. Human beings are beautifully dissatisfied with everything all the time. And, I don't think there's ever going to be a shortage of ideas that can be turned into businesses. 


Kinsey [00:28:17] Right. Do you think in an ideal business world, which I know is a dangerous world to imagine, but an ideal business world where the government played the role that was appropriate to ensure that competition was healthy and beneficial for the consumer, for the producer, for the enterprising young startup founder, do you think that we should be able to wake up one morning and say, hey, I want to create a better iPhone, or is the only reality that we're going to have to focus on [chuckles] like AgTech because that's all that's really left to try out. Like, do we want a world in which we could try to compete with the iPhone? 


Casey [00:28:50] Yeah, of course. But at the same time, there are always going to be constraints on what you can build. If you wake up tomorrow and you want to build like, a better intercontinental ballistic missile, there are just going to be challenges. If you want to build a better airplane, there are going to be challenges. But they're not impossible. 


Casey [00:29:08] You know, something that you've seen is someone will go work for the big guy and then they'll take the smartest engineers and they'll go raise a bunch of money and they'll do their own thing. This has happened a bunch with autonomous vehicles, by the way. People will work for Google, for Waymo, or they'll work for like, Uber's autonomous division. 


Casey [00:29:24] And then they'll just grab the five smartest engineers and they'll go raise a bunch of money and do their own thing. And some of those entrepreneurs have already had successful exits. So I think the path is not always three persons in a room doing a startup. Sometimes the path is go work for the giant, get trained up, get some good ideas about what could be different, and then go try to raise money. 


Casey [00:29:47] And by the way, there is so much money sloshing around in venture capital right now because we have incredible inequality in this country. The richest people literally have more money than they know what to do with. And so I think it's easier for talented people to raise money now probably than it has already been. 


Casey [00:30:03] The giant asterisk there being the historic inequalities in venture capital funding. But still, I still think you have better odds today at raising venture capital than you probably ever have had in human history. 


Kinsey [00:30:15] Yeah. If we could solve the inequalities of the ways [chuckles] that these VCs allocate their funds, then — 


Casey [00:30:20] Yes. 


Kinsey [00:30:20] We could really eat the rich. [laughs]


Casey [00:30:23] Yes, 100%. 


Kinsey [00:30:23] We'll save that one for a different podcast. [laughter] But speaking of problems that are certainly prevalent in America, we talked about this before about the rollout of Instagram Stories—how Kevin brought you in and surprised you with this new feature that they were going to roll out that looked eerily similar to Snap Stories. 


Kinsey [00:30:40] And you wrote this about Instagram Stories at the time. "It was a brazen move, particularly by the standards of American business." Why particularly by the standards of American business? Do we have different standards here in terms of business strategy than there might exist in other countries? 


Casey [00:30:57] I think there has been. The caveat here is that all of this is relatively new. There weren't apps 20 years ago, and so these norms were kind of emerging. But I started writing about tech in 2010, and at the time, there were obvious dumb clones. 


Casey [00:31:15] But, if you were sort of in the Silicon Valley club and you raised money from the respectable investors, I do think there was kind of a gentlemen's understanding, which is like an unfortunately, like, gendered way to think about it, although most of these founders were male at that time. There was this kind of this understanding of, like, you do your thing and I'm going to do my thing, but like, we're not going to do the same thing. 


Casey [00:31:41] There's the famous story about Steve Jobs flying into a nuclear rage when he found out that Google was building Android smartphones. He just viewed that as a horrible betrayal. And I think it's that kind of attitude that really pervaded the industry. Like, you stay in your lane, I'm going to stay in my lane. And so that extended to the social apps. 


Casey [00:32:03] But, as we sort of mentioned earlier, in China, none of that ever pertained. It was just kind of like it's every person for themself. Go do your own thing, and copy whatever you want to copy. And may the most ruthless business win. 


Kinsey [00:32:19] Yeah. I think unless your gentlemen's agreement is written in a contract, [laughs] then you can't rely on that. You would think that some of the smartest minds in business of this last 50-plus years would maybe recognize that that was not exactly a reliable means of building a moat around their business, which I think points in some regards to the importance of actual antitrust and pro-competitive behavior regulation from the government, which we just kind of have failed to really meaningfully see. 


Casey [00:32:48] And we should also say that patent trolling is a real thing. And there are plenty of companies that have weaponized patents to try to stop people from copying not only the actual copies, but anything that seems remotely similar to what a company was doing—which I think has been really toxic in the market generally. 


Casey [00:33:07] I hate patent trolls. One of the reasons why so much of the copying that we've been talking about today that founders have been able to get away with it is because you can't really copy [chuckles] an idea like Stories. And even if you could, often these companies don't want to get involved in protracted litigation because they would rather just kind of slug it out among the user base. 


Kinsey [00:33:28] Yeah. I'm curious to hear what you think has been the most egregious rip-off of recent memory. Like, which was the most [Casey laughs] in violation of this kind of like, code of conduct, and which was the most like, wait, what? [laughs]


Casey [00:33:48] [sighs] [Kinsey laughs] When LinkedIn added Stories, it was like, you have no ideas at your company. Like, shame on all of you. Like, no one who uses your site wants this and you are just building Facebook in slow motion, you know? 


Kinsey [00:34:03] Yeah. 


Casey [00:34:04] So that was one that really just kind of made me laugh. You know, there have been a lot of apps that have built Stories that I think probably don't belong there. Tinder has Stories. Like, with all of these things, you could make a case for why theoretically you might want to add them, but often once you see it, you just think, hmmm, you are chasing a fad. But you were way too slow and you didn't know why [laughs] you were chasing this fad. 


Kinsey [00:34:32] [laughs] Yeah. Now the story is not like, Tinder adds Stories—this is so innovative and exciting. It's like, Tinder finally decided to [laughs] add Stories [Casey laughs] to its platform that no one will end up using. [laughs]


Casey [00:34:43] Right. Also, you know who I don't want to give like, a raw, unfiltered look at my everyday moments? It's people I might match with on Tinder. Like, come on. 


Kinsey [00:34:54] I could not agree more. [laughs] All right. Well, Casey, this has been incredible. I have had so much fun talking to you about all this. I honestly think that I could talk to you for hours about all this stuff. But I know we both have things to do, newsletters to write, people to see. So thank you so much for your time and your insight and all this awesome analysis. I really, really appreciate it. 


Casey [00:35:14] Well, it was my absolute pleasure. Thank you for such a fun conversation. 


Kinsey [00:35:26] Thank you so much for listening to this episode of Business Casual. Casey was a fantastic resource for big tech insight and analysis and news. That said, I would love to find the Casey Newtons of other industries from, you know, retail and finance and energy—you name it. 


Kinsey [00:35:41] So send me your recommendations for the best and brightest of every space to my inbox. I am at, and I'll see you next time. [sound of a ding]