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CalacanisCast 27


Special guest: Jeff Dachis

(Founder -- Bond - Art and Science; Co-Founder and CEO/President of Razorfish)


In this episode, Jason and Jeff reflect on the days before, during and following "the bubble", with and discuss Jeff's new company, Bond - Art and Science.











contact: cast at calacanis.com



Tyler: This episode of the CalacanisCast is sponsored by Godaddy, podtech.net and techcrunch20.com


Jason: Okay, welcome everybody to another CalacanisCast, this is CalacanisCast number… what’s so funny Tyler?


Tyler: Just the way you were stirring.


Jason: Just the way I was stirring the coffee? Interrupt my flow?


Tyler: Right.


Jason: We’re gonna keep this…


Jason: Welcome everybody to another Calacaniscast. Welcome to project X. This is Calacaniscast #26…maybe? 27? maybe?


Tyler: 27.


Jason: 27. We had a great last show with DIGG, Jay Adelson, CEO of DIGG and Fred Von Lohmann who is of the EFF and they were discussing the whole brewhaha, since that time the other shoe has dropped! The AACS says they’re gonna go take it to the mat and they’re gonna keep suing people. It’s gonna get interesting. They love big targets.


Tyler: What else are you gonna do, like sit back and…?


Jason: You know I thought it was a bad call of DIGG’s part and I told them that. Loved it, loved the guys but it was a bad call. As much as I don’t believe in DRM, why would you stick your neck out and have the company get a lawsuit because we saw this last time with Netscape and everybody else getting themselves absolutely devastated by lawsuits. So anyway, we have a really cool show today, we have a guest in the studio at project X. Everybody who knows Project X Studios a lot of banter on the Interwebs about project X in the intertubes in a series of pipes people are driving around talking about project X all kinds of things going on. I’m not going to comment on it until 7/14/07.


Tyler: Why 7/14. That’s when it’s ready.


Jason: 7/14/7. That’s it. Everybody knows I’m retired from Blogging until 7/14/07, which is Bastille Day. And it’s also 7/14/7. 7 minus 7, 14…anyway, I’m taking the month off from Blogging. Only because it’s become a real headache and I’m doing Twitter, I’m doing… so I’m just gonna try and do a month off., but our next guest, I’m going to look in the camera people complain about that, our next guest is one of my oldest friends in the internet industry. I met him in ‘95 or ‘96 when he was creating websites which in ‘94, 95, 96 was a very new thing to be doing in New York City, we were both very young at the time and him was starting a company called RazorFish and I was starting a magazine called Silicon Alley Reporter. And of course the rest is history so we’ll get a little bit into that history today, so welcome to the program Jeff Dachis the co-founder of RazorFish.


Jeff: Mahalo.


Jason: Mahalo... Well speculations crazy so how ya doin’ man? It’s great to see ya. De ja Vu. Déjà vu all over again. We would do this show at Suedo back in 97, 98, you’d be on the show ten years ago, can you believe its been ten years since that? It’s crazy.


Jeff: Ten year and ten pounds.


Jason: Exactly, I got ten more to lose.


Jason: So, lets go back in time and talk about the old days cause everybodys I’m sure wondering like gosh whats it like to go through what you went through, what I went through during the whole period of up and down cause there’s a lot of people now who are part of the Web 2.0 crew who were like us in that phase, 25 and 26 years old I had somebody in here the other day at Project X and they work at one of the like CA endeavor type places. He didn’t know what The Spot was, so I was talking about episodic stuff from the web and I said like The Spot and he said What? I said The Spot, you know like the first serial thing, webisodic thing, he’s like no I don’t know what that is. I was like oh my god how old is he, like 27. It’s like ten years ago he was in high school when we were working our asses off so looking back on it it’s been ten years or so since you founded RazorFish when?


Jeff: October 94.


Jason: October 94, and then the first websites came out, blue dot…


Jeff: Blue Dot, like January 95 or so?


Jason: Yeah and Blue Dot was the first website that had an animation on it.


Jeff: Correct.


Jason: And that was like one of the seminal moments in the history of the Internet was a blue dot that you guys were able to get move around and bounce around and that was all done with…


Jeff: Server push.


Jason: Server push. CGI animation, so this is I mean it was really interesting back then because there were no background colors, you were there when background colors came out you were there when you created the first push animation I mean all this stuff.


Jeff: It’s crazy how that can be considered revolutionary innovation.


Jason: Because it was like on CD-Roms it was already happening, but the fact that you could get it over your phone line at your place, like you created it, I remember you or Craig had just emailed me like Go Here and I was in the office and I went over the web, my dial up and was like wow that’s crazy! Like it’s animated! It’s in my browser and animated! And then of course the company grew to at the peak was it like 2,000 employees?


Jeff: 2,200 employees in fifteen cities and nine countries.


Jason: Wow. And like, what was the peak revenues? Fifty million or something?


Jeff: 280 million in revenue.


Jason: 280 million in revenue. Wow.


Jeff: Approaching that.


Jason: Approaching that yeah. That’s incredible. What was it like for you? I mean I knew you at that time, it’s like an incredible run up, I mean it went from like 2 employees to over 2,000 in the course of five years?


Jeff: Yeah about 70 months.


Jason: In about 70 months. I mean, what was that like? That ride? I mean when you think about it, look back, what was it like was it just exhilarating?


Jeff: Well, it’s nothing like the ride in that yellow Corvette out there!


Jason: Yes, that Corvette’s fast.


Jeff: I’m sure it’s nothing like that but yeah, you know, listen, it’s very humbling to be part of an experience like that where you’re in your living room one day and you’re traveling the world the next day meeting all new people that you’re working with, all the talented wonderful people. It’s a rush. Very cool!


Jason: Yeah and you guys IPO’d, one of the few companies to go public and…


Jeff: … took the company public and we seemed to set the stage for a lot of web integrators to be public.


Jason: Were you the first?


Jeff: Not the first I think NewIdeas was first.


Jason: NewIdeas was first and you guys … and massive consolidation, how many companies did RazorFish actually buy? like a dozen?


Jeff: We did twenty five transactions over a twenty month period.


Jason: That’s unbelievable so you were adding fifty employees a week or something to that effect and buying the company a month I mean just statistically. It’s incredible I mean, you compare it to what’s going on today, it actually makes what’s going on today seem very sort of slow. People are talking about it being a bubble today, but…


Jeff: It feels really bubbly now, it sort of does, but we’re not there yet, we got a couple more years of aggressive growth, it’s sort of like 1997 but its 2007 so in three years I think it’ll be bubbly.


Jason: What do you think made that moment so crazy and hectic and of course I have my own ideas because I was a journalist at that time, but I’m curious in your position when you look at it like did you make it go that fast, did you ride the wave you know how much was it you versus the moment, like, it did seem like it’s just a massive wave pushing everything, you know, and you guys were obviously on top of it. When you look back on it you know…


Jeff: It was a crazy time first, no one can deny that it wasn’t a crazy time. Evaluations were crazy there was a lot of money chasing so few of the labor resources. I think just to characterize in a weird way I never really felt it was really a bubble in many respects because the work we were doing was valuable people, were paying us to do it, we were delivering the goods and we were getting paid and there wasn’t ever any question about our business model. We had revenue we had profitability we had people and there was a demand for that stuff. I think the way I would characterize what happened was people got really excited in 1997 about this opportunity and then a lot of companies came in to capture that opportunity and too many in fact. And then venture capitalists came in and started funding companies and ideas to capture that opportunity, Netscape clearly went public I think in 1995 I mean we saw enormous marketing evaluations and so I think the finance community came in all the way from VCing companies to taking them public in investment banking communities so every stage of that finance chain and what I think happened early on was that too many companies with very little possibility to ever make revenue or ever make profitability got funded.


Jason: Right.


Jeff: To demand a lot of resources like serves, bandwidth, talent and created a frenzy for the market for those things and then as some of those companies got public because those investors wanted to get liquid they created this frenzy in the stock world where Joe Public was buying into what was already a set of circumstances that should never have been able to have been able to be invested in. VC’s should have never invested in these companies to begin with, investment bankers should have never taken them public and Joe Q Public shouldn’t have been able to invest in companies that had no revenue no profitability to begin with. And then when he saw a hundred of those companies going public in 97 and 200 of them in 98 and fifteen hundred of them over the course of through 2001 that was too much of what I called shit product in the market so you have basically investment bankers dumping cheap and low quality product onto the marketplace.


Jason: Unsustainable product.


Jeff: It was completely worthless investment product and the public bought a lot of it and then when the insiders of all of those companies that finally were getting public even 180 days when they’re lock ups expired after going public, they started to sell their shares and their investors started to selling their shares.


Jason: Right but it’s too much money not to take off the table.


Jeff: Absolutely, and so Joe Q Public ended up holding the bag for what was these companies after all the insiders basically fled and the stocks started to tank and then it became a self-fulfilling prophecy and a lot of that shit product got washed out of the marketplace. It took a year or so or two years or so for some of that to go away.


Jason: How many of your clients… I know you guys have a lot of the big clients like the blue chip fortune, one hundred two hundred companies but… How many of your clients- what percentage of the revenue was that sort of DotCom company for you guys?


Jeff: Less than five percent.


Jason: Really?


Jeff: I mean our client base was stable blue chip companies, almost exclusively, and I as a rule shunned most of the DotCom stuff.


Jason: People used to call me cause at the time I was covering you guys but lets face it we were hanging out a lot and we were all friends people would know I knew you guys and you guys were like rock stars at the time. People would call me and say, hey can you get me a meeting with Jeff Dachis or I didn’t get a call back and you know were doing the thing can they please go on my website. It was actually getting to be a RazorFish client was a very difficult task for people, incredibly an imbalance of supply in demand and that’s really what it was, you had all the bright people working for you and people needed to build stuff and their weren’t a lot of people who knew how to build at that time.


Jeff: Listen I’m the dummy for sure but I must say I surround myself with some very smart people and those people were focused on building great stuff for blue chip clients, so Charles Schwabs of the world or Ford Motor Companies of the world required an enormous amount of commitment and an enormous amount of resource and I’d much rather spend my resource on a client like that whose going to continue to sustain revenue over a period of time than somebody like Pets.com or something like that. We didn’t have any interest in building that stuff.


Jason: And so at the end of the day I guess RazorFish wound up merging with AvenueA or something, what was the outcome at the end of the day? You guys did survive but in a much smaller footprint.


Jeff: I went through a series of very painful and humbling downsizing as the market for the DotCom services went out the door a lot of the corporate clients that we had also said hey if they’re pulling back maybe we should pull back and if the stock markets going down maybe we should pull back.


Jason: Right, everybody wants paralysis.


Jeff: And that forced, correct, that forced us to have to eliminate some of what was our very strong talent base and after that I didn’t wanna be part of that organization that was gonna have to go through, I didn’t want to be the poster boy for what everybody was assuming was the downswing that wasn’t what I signed up for. So, we left in 2001, Craig and I, and then shortly after the stock was bought or the company was bought by SBI, which was a company out of Salt Lake City Utah and they combined that with the leftover assets, carcasses of … the leftover reminisce of what was the … companies, but with RazorFish as its primary base and then sometime a year or two later ended up selling that entity to AQuantive which is now the big dog in the house which is a stock I think was up three bucks yesterday trades I think fifty something times earnings and is the sort of poster child for what is now performance marketing-based web services.


Jason: Right, which is an evolution of building the site, you start by building the site and educating these people who need to have a website. Here’s why you need a website, here’s what you can do with the website and then eventually they learn what they need to do with the website and they learn what they need to do with the website start actually refining it and making it a science in some way performance is the evolution of what you guys did.


Jeff: Yeah and its an interesting evolution, its an interesting space, it’s clearly marketing it’s marketing services, it’s a great business, they do a great job over there and the analytics are great. I feel very proud to have the legacy of what is today the RazorFish that exists in the marketplace and it’s a great company and I’m proud to have been the…


Jason: And you did okay at the end of the day, you didn’t get totally destroyed.


Jeff: No, no, no. I did just fine.


Jason: So now what, now you’re doing Bond?


Jeff: Yeah, it’s called Bond Art and Science and in the end what we’re doing with Bond is, what we realized with Bond is that people are wanting to access their data across multiple platforms and multiple devices and multiple networks and that experience today is really kind of confusing for consumers, my calendar doesn’t really sync up with everything, I cant really access my music on every device I want and these new digital ecosystems that are in the marketplace need to have a simple and easy to use taxonomy and information structures so that people who are willing to pay to use them and that’s what Bond is where you design and develop these new great information services for the digital ecosystems.


Jason: And it’s a relatively new company or have you been doing it for like a year or something?


Jeff: A little under a year.


Jason: Is it big like Razorfish are you on pace? Is the aspiration to become a big webshop or is the aspiration to become a boutique.


Jeff: A global boutique, we’re again as we see consumers adapting different platforms and networks as their network access point for example you have the entire gaming universe for people are XBox living and communicating with each other and doing transactions. You have the Second Lifes of the world, you have the web-based environment, you have mobile phones which in developing markets their going to be the primary access point. When you see a billion sell phones and a billion mobile phones come online in China in the next year, those consumers are going to be demanding more robust information services. So we see a very strong need to develop user experiences and information architecture to support all those new information services that are coming online on all those different platforms and hopefully have them all talk to each other.


Jason: So you’re not gonna be building a product per say, you’re going to be doing services.


Jeff: It’s service. Strictly professional services, we know the business well and…


Jason: Not over scale it, not get too big.


Jeff: No and again to that point, RazorFish really was never over-scaled or too big, we thought we would grow to be five times bigger than we were and had the market not sort of imploded on itself for reasons that we described a few minutes ago I think it definitely was a sustainable model and a sustainable space so I’m really confidant in our ability to service what I think is a HUGE versioning market for information services and development.


Jason: So what impresses you these days I mean you’re going around a talking to clients, that’s gotta actually be sort of a trip, it’s 2007 and maybe you’re talking to clients from 95, 96, 97 is that occurring the same people or different places?


Jeff: It’s different. It’s different now. It’s definitely different. We had sort of the cat- bird seat before.


Jason: Yeah.


Jeff: There’s a lot of people who know a lot about stuff that I used to do and nothing really special about me in that marketplace, but I think the talent base we put together for Bond is unique and its over 10 years of experience in doing this stuff and being I think reasonably good at it has given us a market positioning and enables clients to feel really confident that when they’re hiring Bond they’re gonna get…


Jason: Who are the clients? Are they clients who are public?


Jeff: The stuff that we’ve announced is there but, you know…


Jason: People like to keep it quiet I guess.


Jeff: Yeah and that’s the nature of the business. We’re very strategic for the companies that we’re working with so to the extent that they wanna talk about it.


Jason: Yeah, that’s their prerogative. So what impresses you these days?


Jeff: That car is very impressive.


Jason: Put it on the internet! Yeah exactly, what’s left of it!


Jeff: What impresses me? I’m impressed by the wave of development that we’re seeing in the marketplace for these web 2.0 companies. It’s very interesting to see all the stuff that people are coming up with. It seems a lot a derivative stuff. It seems there are a lot of derivative stuff out there.


Jason: A second version of a lot of stuff in the dot com graveyard you know. These people, somebody’s doing a cosmo.com type of thing in San Francisco which is kind of funny it’s getting kind of popular, you know Flicker and YouTube was like … and other things that were out there and it’s a lot of the same, Digg is like SlashDot so a lot of the same might be as made faster and more efficient, the thing that I find fascinating is the great reduction in cost in building a start-up today.


Jason: You can use free software, hosting is free, bandwidth is essentially free. Compared to the old days where you basically had to punch your ticket at Oracle with a half million dollar license, punch your ticket at some server farm for a million dollars a year, punch your ticket for twenty five thousand dollars to have your internet connection at your office now it’s like I have service that costs a thousand dollars a month or five thousand dollars a month, that’s peoples server bill and everything’s open source software and the open source software now seems to scale better than anything you can pay for.


Jason: Why would you use any but MySQL? or PHP? or Linux? none of the stuff, you know, the paid stuff beats it I guess. So, it is amazing how you get when everything becomes so commoditized it actually puts more focus on the products.


Jeff: Yeah, that’s always been the case, I think, where we can get inefficiencies in the marketplace and technology can become commoditized. The thing that really is important rises to the top. I think the thing that’s impressing me most in this marketplace today is how many great young talented people are out there, It’s really exciting to see so much talent and they’re coming out of the woodwork, it was a very dry period of time 2001 and 2002 and 2003.


Jason: Nobody wanted to be in the business, it was tough.


Jeff: I agree. And now it’s like, it’s just very exciting; the energy is just really great. Lot of young folks, 26, 27, they were in high school when we did the first round and…


Jason: They watched, they knew about it to. They may not know all the stories, but they know that the DotCom boom happened and we were gonna do it a little different.


Jeff: Yeah, I don’t know how many of these ideas are gonna make money, but clearly the Google, YouTube kind of deal validates some of the ideas that don’t make money. It’s interesting in 20/20 hindsight to think that the bubblesque element, this idea of funding companies that don’t make any money, the idea of how those companies are gonna get liquid and gonna get bought out for valuations that have no direct correlation to anything.


Jason: Except when all the wrong people are offering to pay for it, when people are scared of losing it to a competitor.


Jeff: But is that actually valuable? Is someone creating value or are they really creating investor liquidity for investors and no real value to the consumer? We’ll see, I don’t think the greed factor has gone away, I think that may be a pitfall to look out for to avoid the scenarios where people are just putting money in to work.


Jason: It seems that the second half of the problem that was in the first place is the public markets have been soft. The public markets are so brutal on companies now like Vonage went public just basically got their ass kicked you know and like nobody want to go public it’s just getting taken up before so you don’t have the possibility of individuals running up the price.


Jason: The second part of the problem. So you could have a run up of too much venture funding, but venture capitalist will invest at some point and they only have so much attention I think you might have a lot of these companies where they get the $500,000 dollar investment or million dollar investment, but never go anywhere. They’re not gonna implode because they have like 500 employees and you know, ten million dollars in leases a year or twenty million dollars on leases and they need that next venture round to pay their lease. I mean that certain part of RazorFish you guys had so many offices I mean real estate must have been a large part of the budget.


Jeff: Same portion, but a big number.


Jason: Yeah it gets to be a big number and then all of the sudden things fall back it’s like what are you doing with all this office space. I think this time around everybody’s doing it virtual their so small I mean smaller teams to make higher-impact products. I think it leads to less chance of a…even if you have a major meltdown at Digg and Digg went out of business how many people were effected, 30?


Jason: It’s not like the old days where Pets.com goes down and 500 people lose their jobs or Priceline downsizes and a thousand people lose their jobs wherever it was, it’s nowhere near the level of impact when things go under.


Jeff: Yeah and it seems like nowhere near the level of revenue either or revenue potential.


Jason: That’s true, people do think kind of small… today. They kind of think like, maybe a little business and a lot of people don’t want to sustainable a business they just wanna make a business and pay their rent, do the lifestyle of business which is cool.


Jeff: That’s where I think the democratization of the web and the ability to do stuff over IP networks, multiple devices, multiple networks again is creating these very sustainable one and two-man or ten-person businesses that can like Hot-or-Not guys.


Jason: Or: Iminlikeyou, Twitter… absolutely is just making big impact and stuff.


Jeff: Yeah or even making small impact, the long-tail niche network idea, there’s money to be made there and there is. It doesn’t have to be massive money and it doesn’t have to be VC-like returns on money, just enough to pay ourselves. Which is all we really wanted to do anyway.


Jason: That’s the irony of it, I always tell people that! Everybody sort of likes to beat up on the dot-com bubble and everybody who was involved in it, but the truth is nobody went into it, not you not me not… Nobody went into it thinking they would make any money.


Jason: In fact it was like let’s just make cool shit and it was all about hit the refresh key, I always tell people that. People would call you on the phone and say okay now hit the refresh key. Hit the refresh key. It was that addiction to trying something new and to create something new and the excitement of it and sharing it and you know people got caught up in it but it wasn’t like anybody who was part of the original crew ever did… these people who were around Phillip Kaplan. All were around trying stuff out ****** it was just about the fun of it, you know, a little band of people experimenting and trying new things with the new medium and I put the blame on the public markets and people who brought all these companies public without really like you’re saying, where’s the revenue, there was no question as to should this be a public company… You had a company that was making nine figures in revenue deserved to be public. Some of those companies that go public -- it’s just like wow you’re losing fifty million dollars a year and you’re going public I don’t understand.


Jeff: And then the baby with the bath water and that’s unfortunate, it’s unfortunate for a lot of people who lost their jobs in unfortunate for a lot of people didn’t get liquid, but it is what it is and you live and learn.


Jason: If you take that sort of spike of just got too big, got too small and then where it is now I bet you it makes a nice curve. If you look at the advertising revenue, that makes a nice, it’s not too spiky where user adoption, not too spiky, all the hours online not too spiky all that is eCommerce nice line. It’s just evaluation and the companies and people participation then on an economic level it’s just like Pshht!


Jeff: That’s what, I mean if you look at any new adoption of technology or new industry trend or any of that stuff you see the same kind of stuff, you saw several hundred automotive companies when the automobile first came out and the market flushed them out.


Jason: So, the largest day for me in terms of laying off employees, I think I laid off 12 people in one day. I remember this being one of the worst days of my life I’d bring `1 people into a conference room one at a time and lay them off. What is the largest number of people you’ve had to lay off at once? What was that like for those couple of days? Did you have a pit in your stomach like oh god this sucks? I went from 70 employees to 15, you had to lay off a hundred people in one day at some point.


Jeff: I had a strong commitment to not lay-off people.


Jason: I remember that actually, you really hung on.


Jeff: When it was required for the business, I was probably the most vigilant about laying-off the most people. There was a point in time when I wanted to go very, very deep with that business and I got a lot of push back from a lot of my management team on that issue.


Jason: You could have laid off more people.


Jeff: I would have, I would’ve laid of quite a few more.


Jason: That was my mistake, I should have laid off fifty people like the first lay off round and I waited like a year and did it over time and wound up it was like a million dollars probably in salaries, probably much greater than yours, but I shouldn’t have acted more decisively, it’s a very interesting lesson having lived through it I think.


Jeff: From my perspective I always maintained that bubble thing that was going on was in aberration and that with enough cash in the bank we’d have weathered the storm. So had we done a secondary and raised money at our peak we would have just kept all the staff on and wrote it out.


Jason: Which is what DoubleClick did, DoubleClick took their secondary down some other people didn’t and the people who got their secondaries down.


Jason: Have enough cash.


Jeff: They coasted and they got through it. It really is a lesson to people when you can raise money, raise money, when you can.


Jeff: Yeah I was very protective of the equity and we didn’t want to sell and we should have. From that inevitably, there are a lot of lessons to learn from it, but the idea that we would lay off people was just not in my DNA. I believed the company was going to do what we were saying it was going to do. People who call me arrogant, in my soul I believed it in my soul. A hundred percent of the time until I left the company.


Jason: You bought shares in the company when it was at the worst time.


Jeff: When we were tanking I put several million dollars to work of my own cash buying the shares in the open market to show our employees and the investment community that I believed in it and I did. But there came to be a point where my perspective shifted and that’s when I would have fired a lot of, not fired but laid off …


Jason: Interesting times.


Jeff: And yet, you learn. You hope to learn on your own nickel and not on anyone else’s or I guess individually you’d hope to learn on somebody else’s nickel. Our investors made a lot of money and to the extent that that’s what the goal is to have your investors make money…


Jason: Increase your holder value is the goal of business.


Jeff: Absolutely.


Jason: So now, mobile devices anything anywhere, I guess that includes all the IPTV stuff. What do you think of Apple TV and all that kind of stuff ? How much of TV is going to be watched by people over IP?


Jeff: A lot. I think Ethernet equipped TVs that are coming on the market in a couple years are going to be a big deal and I think the information services that are gonna be delivered to those TVs is something that we wanna be developing. I think that the Apple ecosystem for consuming your data whatever that data is I think is a really good. The effort that the user experience…


Jason: It really does work well when you hit the menu key on those little remote controls, I was doing it this morning on my treadmill and I was like oh there’s a podcast, there’s a video podcast BOOM. It really is cutting into my TV viewing time.


Jeff: And it’s going to cut into what I think is going to be cable recommended. As you see, IPTV and what I think is gonna happen is it’s gonna force the cable companies to open up the set-top box API, so that we create new breads of information services that sit on top of the cable box.


Jason: People are not going to want to have a closed box, people are going to want to download the new version of Digg from their TV. Digg Nation that’s interactive or an Engadget video.


Jeff: You’re gonna want to have all the IP services that you get. The cable companies are already providing you the bandwidth I already get my broadband from.


Jason: So they would make the top set boxes open.


Jeff: Open and have the developers be able to develop lots of applications and services for that and then link that to what is your web based interface so I can go onto the web and program what I want to download when I want to download it.


Jason: And then step back five feet.


Jeff: And then have it send an alert to my phone where there’s a new NAScar race on that I wanted to watch and then when I go home it’s already DVR’d it for me and I can go into what is a rich application environment on the set top box. If that doesn’t happen the IPTV routes going to happen where I buy my Sony TV and what do I know…buy my Sony TV and when I turn it on it’s going to go to Sony.com and provide me a whole rich menu of Sony-related stuff to do and skip the cable box.


Jason: I think Apple, now that they’ve made the cinematic displays I am guaranteeing right here on the CalacanisCast, they will make a TV, by the next year there will be Apple 42’, 52’ LCD’s that have the Apple TV built into it, Ethernet built into it, camera built into it, video conference with your entire family, get full 50’ TV from your couch, DVD player, Done. Why wouldn’t they? They already decided to get the Apply TV out there. They went to Ipod, they’re home networking, it’s like the natural evolution. What’s the difference between a 30’ LCD and a 42’?


Jeff: I agree.


Jason: 12 inches. Apperently?


Jeff: Haha, I don’t know, that’s a commodity business. The components are gonna come down and it’s gonna be a tough business. Circuit City and Best Buy are having a hard time, well Circuit City is. So, I think Apple’s gonna maintain their sort of high-margin profile.


Jason: So that’d be an argument against them.


Jeff: What you’ve seen consistently that Apple would be able to do and do well is to create different modules for their eco-system, which creates the value for the whole eco system.


Jason: So maybe I’m willing to pay the extra 500 for my TV because it’s so seamless, but my IPod cradle on the top of the TV.


Jeff: Maybe that would drive component sales for the rest of the eco-system.


Jason: So you break even on the TV.


Jeff: A little Ipod cradle on the top so you need to know how to manage an Ipod.


Jason: Absolutely. I told myself to buy Apple stock a year ago and now it’s like a kinda think that they are gonna start impacting peoples, I think they’re going to impact the desktop business cause at project X I bought 40 new computers and all 40 were 24” IMacs.


Jeff: You know me I’ve been a Mac evangelist for years. And you were a staunch…


Jason: Totally a staunch Windows guy up until a year ago.


Jeff: And we battled about this.


Jason: We battled about it, long arguments and you know what tipped it for me is when they moved to the Intel chips and they got OS X out there. It really boots quickly and the machines are fast and I always had a problem with Macs with the speed like sometimes they would lag and they would take a long time to boot up and the operating system would seem a little sqoogy. I’m not saying Windows isn’t. Now the operating system is so much superiors, the speed and the design, so much better, so much more stable and if you need to get on some Windows program you can parallel. It’s like why would you possibly buy a Windows box, makes zero of sense and I for 40 IMacs at project X and here at project X we have not one IT person. No IT staff, cause you don’t need any and if there’s a problem with it you just replace the machine and you reboot the thing but that’s it you’re done so you just and you never have to worry about viruses, updating the software, applications, video cards, memory that’s just all works. I love you.


Jeff: I love you too.


Jason: They gotta come up with the subnet notebook. I’ve got inside information, that I think is pretty good. I have the little bit of inside information. I get fed some stuff. This is fed from actually two very reliable sources and you know a small Mac laptop. Solid-state laptop, no hard drive, all with those RAM chips or whatever. Like the compact flash cards so like you can boot up all in RAM and it’s super fast and when you put it into sleep mode BOOM no energy consumption BOOM so like the battery could go like fifteen hours or something ridiculous, no heat problems on the hard drive and the mechanics of the hard drive, of course if the thing gets flashed by lightening shorts the up the memory or what have you.


Jeff: I think things are moving generally into solid-state hard drives. As the size of the memory increases the size of the drive decreases.


Jason: Just plug in a G drive, like I had you know that little G drive one hundred gigs so if you need that extra space you put that on it *********


Jeff: I think isn’t the new IPhone?


Jason: I don’t know, I think it is. And there’s a drive on that?


Jeff: There’s a drive on that.


Jason: So anyway, very interesting conversation, thank you for coming on the program, thank you for everyone tuning into CalacanisCast as you know sponsored by GoDaddy, go to GoDaddy, use the code Jason1 and you get 10 percent off. Thank you PodTech.net for sponsoring and everybody knows all the sponsorship money that’s raised by this program over a hundred thousand dollars this year, we’re halfway through the fifty episode run, we’re doing fifty episodes of this, all of the sponsorship money goes to Bay Ridge Preparatory schools opportunity fund in Brooklyn.


Jeff: Really?


Jason: Yep.


Jeff: Is that your Alma Mater?


Jason: I had a teacher in high school who started his own school, it’s a small private school. It’s not cheap it’s like 12-15 grand a year which actually for New York is not too expensive, but it’s still expensive, so he created this opportunity scholarship fund which goes to disadvantaged kids like foster kids and stuff like that, people who could never afford to have this education and also kids who maybe haven’t achieved yet. So they don’t have killer SAT scores, they don’t have some crazy aptitude. They have potential.


So you basically really try to help somebody who maybe they haven’t excelled in school yet maybe they’re in foster homes, maybe they’ve changed homes a couple of times, and know they’re in private school -- maybe 15 kids in the class. It’s really cool thing and they’ve already got one student who got a scholarship of 5 years based on this program so it’s awesome thank you to GoDaddy for doing that.


Jeff: Mahala.


Jason: Thank you for tuning into CalacanisCast we’ll see you again next time. No blogging until 7/14/07. So I want you to put on the program Tyler in the beginning and the end 7/14/07. As a matter of fact, maybe take up the whole screen. 7/14/07. You found the thing here 7/14/07, everybody mark it on your calendars, Bastille Day, that’s when I’ll be Blogging again that’s when you’re gonna want to check Calacanis.com. We’ll see everybody next time on CalacanisCast.


Take Care!

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