Oct 9, 2014 · 42 minutes

This past Monday, Sarah and I hosted the very first episode of our call-in show, PandoLIVE. Much like it's predecessor, NSFWLIVE, the show was a healthy mix of great conversation, questionable music,  engaging calls and liberal use of the phrase "eye-fucking."

If you weren't able to listen live, don't fear. The entire thing is available to listen again (below), or you can just read the transcript and imagine what the music sounded like. Either way, don't miss next week's show -- Monday at 5pm Pacific.


Paul Carr: I'm just going to start out and say, "Welcome to PandoLIVE, the very first ever PandoLIVE." I'm going to start out by saying, "We have no idea A, if you can hear us, B, if this is even working properly."This is the first time we've been in the Rackspace Studio. We're very excited to be here. We'll talk a bit more about that, but first, I want to introduce, sitting to my right, Sarah Lacy. Hello, Sarah.
Sarah Lacy: Hello, Paul. Why is it important that I'm sitting to your right?
Paul: Just because I want...It's like theater...
Sarah: I mean, I am on the political spectrum.
Paul: [laughs] Because you're a free-market monster?
Sarah: Exactly.
Paul: Sitting to my right politically and actually. Because I want people to be able to imagine the scene as we sit here in this somewhat annoyingly echoey...
Sarah: Well, let me describe it. There are million wires. Paul's been ripping his hair out for two hours, because he's apparently the engineer, the producer, the star, and the person who's talked me into doing this, all rolled into one. Seriously, he looks like Frankenstein.
Paul: It's bad news.
Sarah: It's interesting.
Paul: It's bad news. It would be safe to say we are ironing out some kinks, but let me first start by saying that the caller number is 877-959-6739. If you are a Not Safe for Work Live listener, you will know that number by heart, 877-959-6739.Chris is on...
Sarah: I should say one of your old listeners said that he can indeed hear us and he hopes you can hear his disappointment that you didn't start with Taylor Swift.
Paul: I tried and Sarah vetoed it. "I'm the CEO, bitch. We're not listening to Taylor Swift." That's exactly what she said.
Sarah: I also suggested Jack White, which we didn't listen to, so...
Paul: We're going to. Now you've spoilt it. Now people will know what to expect.I want to start by saying we're going to be taking calls. Sarah, you know some of the topics that we're going to be talking about. Do you want to tee some of that up, because you've just published a piece that's probably going to get you killed.
Sarah: Yeah. I've just published a piece I've been working on for a few months. The 6,000-word cover of the Pando Quarterly, that's calling out the asshole problem in Silicon Valley.I pretty much alienate anyone who's backed our company and supported me over the years. [laughs]

It's a testament to how continually humbling the job of being a reporter is that, after 15 years, I still get really nervous pressing Publish on something that's controversial, that I've taken months working on.

Paul: In fairness to this particular piece, you are right to be nervous. It's pretty extreme.We're going to take calls on that. We're probably going to hear from some of the Pando team.

We're also going to talk a little bit about the downtown Vegas project which both Sarah and I, in different ways, have been involved in. Another one of our investors is going to be delighted.

Sarah: We're also going to talk about eye-fucking, so this would be a good time to note that any children should probably turn this show off.
Paul: Traditionally, you give the Not Safe warning before you say the phrase, "Eye-fucking," but I'm glad we're mixing that up as well. Before we even went on the air, we had a caller come in who was in the queue.We obviously started a bit late due to various technical issues. If you were that caller, do call back. If not, if you're just joining us, 877959...
Sarah: If it was the wrong number, that's cool too.
Paul: Just call back or repeat, we'll help you. 8779596739. Chris is on the screening, so if you want to chat to Chris, make yourself feel less lonely, that will be good too.
Sarah: [laughs] .
Paul: We're going to listen to some music, we're going to come right back with the discussion. I said to Sarah, "What music do you think most sums up the asshole problem in Silicon Valley? What's the douchiest piece of music that you could possibly imagine?"Sarah, what did you come up with?
Sarah: [sings][music]

[background music]

Paul: Michael Carney commented, "That's a lot of Smash Mouth." I think any amount of Smash Mouth...
Sarah: This is too much Smash Mouth.
Paul: I would argue that if you're going to have some Smash Mouth, then there's no amount that's too much. You're either in or you're out.Sarah, you've been laughing all the way through Smash Mouth, you can't have been enjoying it that much. What the fuck are you laughing at?
Sarah: You. [laughs] You're literally running around the studio like a feed looking in that wire. It's amazing.
Paul: Your microphone is incredibly quiet and I can't figure out why. Talk into your microphone.
Sarah: Hello?
Paul: Louder.
Sarah: That's crazy that I would possibly be quiet.
Paul: There we go. We are in the Rackspace studio, this is a good time to thank our sponsors. Rackspace is the reason we're able to do this show. They suggested they would give us a script to promote Rackspace, so they would give us key talking points.I said, "No, don't worry about it." What I'll do is, is in the few minutes before the show starts, I'll think of something clever and we'll talk about it. Unfortunately, I spent a few minutes before the show started trying to figure out why the technology of the show wasn't working.

Anyone who listened to Not Safe for Work live before will understand that. Sorry, don't have anything clever to say, except that Rackspace is the only reason we're able to do this show. They provided us with studio space which we're still slightly figuring out.

They've also provided us will all the resources we needed to do the show.

Sarah: Money.
Paul: I was using, "Resources," as euphemism. They've given us a shitload of money. Without them, we wouldn't have a big pile of money.
Sarah: Like most of you probably listening we are a cash strapped startup. I told Paul we can only launch a new product that's going to take half of his afternoon running around if we're actually making some money from it. Rackspace stepped up.Frankly, it's pretty amazing, knowing what the old "Not Safe for Work" show was like, for them to say, "Yeah, come on in. Use our name. We'll pay you to offend everybody." In true form we decided to start out with something about assholes.

We should thank them. They're amazing. They're this awesome geekdom space for startups here. They sponsor Pandomon plays. I know they always say they're a big differentiator off of AWS is that they are built for companies who want to scale super, super fucking fast. Check out Rackspace.

That's you.

Paul: I'm also told reliably by Rackspace that they give free hosting to qualifying startups. If you want a chance to see if you're a qualifying startup rackspacestartups.com and you can find out if you qualify for free hosting.I don't know what the criteria is. I don't know whether there's an agility contest.
Sarah: I just pray you qualify.
Paul: Is that a Letterman joke?
Sarah: [laughs] Yes.
Paul: God, you're such a fucking nut.All right, let's talk about assholes. 877-959-6739 if you want to join the conversation about assholes.

Sarah, explain a little bit about this. Did you just wake up one morning and think to yourself, "I'm going to alienate..."

Sarah: I was pissed off. Yeah. I woke up mad...No, look, I've been thinking about this a lot. Actually I've been thinking about this whole weird dual thing with startups where everyone in the venture capital world says, "I funded this guy because he's a good guy.I fund people based on the "people first" and people I want to work with and a startup I should really work with." this constant lie that VCs say. The tension between that and a lot of the heroes of Silicon Valley-people like Steve Jobs and Larry Ellison and Jim Clark.

As I've thought about this and wrestled with this over the 15 years or so I've been covering the tech and entrepreneurship space I noticed over the last years we've been in this phase of frenzy deal-making. The celebration of the asshole mystique and the rules around funding it have just changed dramatically.

It got to a point where I was sick of the hypocrisy that VCs say that they fund people based on them being nice guys. It's just clearly not true.

I argue in this piece I'm not sure it should be true. I don't think it is a venture capitalist role to fund someone because he's a nice guy. I'm just sick of the lie around it.

I wanted to have a thoughtful, nuanced conversation about it because so often what we see is either people being really defensive and saying, "No. We should celebrate entrepreneurs and everything that they do. They are these bold experiments and they should never be questioned."

Or on the other side of the coin we hear people just saying, "Everyone starting a company is evil and greedy and awful and they're all assholes." That's not true either.

I'm hoping it is a very thoughtful, nuanced examination of what I think has been a big cultural shift in the valley.

Paul: Yeah. Do you think though that having a thoughtful conversation about assholes...I've noticed we have callers coming in. We're going to take some calls in a second.Do you think have a thoughtful conversation about assholes is just going to turn people off though. Because it seems to me like the conversations about programmers, I wrote that piece about Travis Kalanick, we've written about Secret, it gets a lot of attention when you go negative or when there's something negative to say.

But a thoughtful conversation about assholes...Are you concerned that people won't care?

Sarah: This is the curse about my writing. [laughs] I would say nothing ruins a clean story line like reporting. I've been talking to people about this all summer. I don't know. I'm happy for everyone who's wrestling with this, to read the piece, and have it not be a million page views if it starts the right conversation.Nothing I do ever drives the most page views from Pando, frankly.
Paul: I wondered what the curse of your writing was. I thought it was that if you've read it seven days later you die.
Sarah: [laughs] Seven days later I might die after publishing this.
Paul: Could I say, I love having a screener. Having Chris as a screener means I get useful information like, "We have a call from Dave from Brooklyn. I feel like a regular "call in" host.Dave from Brooklyn. Is it David Holmes? Is it just out Dave or is it a different Dave?

Wait. Where did Dave from Brooklyn go? He was right there. Dave

Dave: Hey. Can you hear me now?
Paul: Is it our Dave? Is it Dave Holmes?
Sarah: It is our Dave. It's Davy Holmes.
Dave: This is your Dave. Yes.
Paul: Davy Holmes. I got from Chris, "Dave from Brooklyn." I was expecting a cab driver. I hit [inaudible 10:02] a cab driver.
Sarah: He would have views on Uber.
Dave: Yeah. I just got on Uber. Exactly.
Paul: Are you a long time listener?
Sarah: I was going to make the same joke.
Paul: What, the long time listener?
Dave: Yeah. I'm a long time Pando Live listener, I did seven minutes now for the whole rest of the show.
Paul: The entire duration? Dave from Brooklyn, you're in Brooklyn. So assholes...
Sarah: Also, Holmes wrote one of the smartest things that we've written on programmers and actually changed the way I think about it. It was that week when there was the guy from Rap Genius and the Snapchat emails and a few other things.You were one of the first people to write about, "Hey, this isn't so easy to just call this sexism." Do you want to talk a little bit about your view on those things?
David: Absolutely. I have to give credit where credit's due. What really made me rethink the way I think about programming and sexism, et cetera, it came from an article by Kate Loss about how programmers, in a lot of ways, become -- for lack of better word -- a false flag.By calling anybody in Texas an asshole, a programmer, you risk saying that, "The only assholes, in fact, are people who wear Ed Hardy shirts or who talk about crushing [inaudible 11:29] while crushing code," and things like that.

When, in reality, there's a far more insidious sense of assholedom. And if we're talking about sexism, sexism that is really pervasive throughout the tech community and not just with people who you thought might have ended up in a frat house, like Evan Spiegel or somebody like that.

You've got people who maybe they were the kids that were beat up by the frat boys. So they don't think of themselves as the problem, they don't think of somebody that could ever possibly be engaged in sexism whether conscious of it or not.

It's almost like those are the people that are almost causing more of the problems in sexism, because they're blind to the fact. There is reason why the statistics with companies like twitter and Facebook are so heavily in favor of white men.

There are pervasive sexist reasons for that, and I worry that the people who are not the frat boy type, they don't realize that they could be...

Sarah: Easy targets.
David: Yeah. They could be just as much as this problem as the frat boy Evan Spiegel. Or, the Evan Spiegel-type might not be sexist at all. There might be very little correlation between those two things.
Sarah: One of the things I write about in the piece is that this isn't all about misogyny, but, certainly, misogyny is a big part of it.I've written recently, but I think even as woman are getting more of a voice in the start-up world and there's certainly more on-the-surface focus demanding to know the numbers of women in companies and talking a lot about it, I actually think the misogyny has gotten worse.

It's interesting that we saw things like Paula Deen's comments and very big repercussions she had from that, Sterling having to lose an NBA team because of racist comments.

Yet, Evan Spiegel writes the things he did in college emails -- which, by the way, was not that long ago -- and we somehow think, "Misogyny is something that guys grow out of. It's something that's OK for them to do in college."

I feel if a lot of those emails and things that were written about women were written about other minorities, the person would be fired, hands-down. It's interesting that there is this, "Misogyny is a phase we all go through," where you don't think racism is a phase thing people go through in college.

Paul: To me, one of the issues as well is this idea, "If you're one way in college and you're one way when you're out of college." That used to assume that there was some sort of buffer zone when you went out of college, you got an entry-level job, you spent a few years paying your dues.And by the time you go into a position where you're running a million-dollar company -- let alone a billion-dollar company -- you would have had some years under your belt to grow out of things. We saw this with the Ayn Rand obsession, like everyone's into Ayn Rand for a week in college.

But usually they have enough time to become a fucking fully functioning grown-up before they're in charge of people's destinies. We're seeing this tiny gap now between college -- if there is even a gap -- and being the CEO of a billion-dollar company.

Even if you did grow out of misogyny, even if you did grow out of racism -- which you can argue you don't -- there's no growing-out-of time. You're going straight from your college world to your...

Sarah: And because of the capitalization, these guys have such a stranglehold on the company, and these companies are getting hotter so much faster because the consumer web is so binary and the rapid spread of mobile that there's no reason for them to answer to anyone.David, I think you were going to say something which is a dangerous position between Paul and I.
David: [laughs]
Paul: Before you do, good luck to anyone trying to get a word in between Sarah and I. 8779596739. If you would like to try to get a word in between Sarah and I...
Sarah: We dare you.
Paul: If you, yourself are an asshole, if, in the unlikely event you have existed in the tech world and encountered an asshole, do let us know. 8779596739. The call-in idea, I'm hoping that not everybody who reads Pando is a natural tweeter in emails.We have a bunch of tweets, I'm going to read some out in a minute. We're getting some emails coming in, but I would love to get a bunch of calls as well because, to me, the best way to have a conversation is person-to-person. 8779596739.

Chris will explain the ropes when you call in, you won't be stray on the air. So don't panic. Also, Sarah, you said we were going to give special fun prizes to callers?

Sarah: We do have a special prize, but let's let David talk.
Paul: You'll just have to guess what the special fun prizes are.
David: You want me to talk over the prizes part, really?
Sarah: No. [laughs]
Paul: You talking is the price, David. Everyone's a winner. Carry on.
David: All right, pressure's on. You were saying about the difference between racism and sexism. If Evan Spiegel had said those racist comments, the reaction might have been much, much different.With that in mind, one reason why that might be is it's something that you can look at with this...I know I'm going to talk about Gamergate, so, hopefully, you'll not get a lot of people calling and saying all sorts of things.
Paul: [laughs]
David: With the Gamergate controversy, what you found is that you have this -- and it's scary -- organized community that is heavily informed by misogyny. They actually have power, they just got Intel to remove an ad from a website.I don't think there's any equivalent of that for racists, and it's scary that there are these communities that go online and are able to bully women and are able bully companies that otherwise have a very good record on diversity to basically bend to their will.

Maybe it has something to do with those communities, there are certain men's rights communities that gather on Reddit and some other sites. I don't know, maybe that's a reason why there's less of a...

Sarah: Those repercussions.
David: The way that we treat misogyny online is different than the way we treat racism, possibly.
Paul: I should say, unsurprisingly, people did want to talk about assholes. I see three calls in the queue, we're going to hear from Michael Carney from Pando over here.
David: Then I'll let go.
Paul: No, you carry on. I'm just saying Chris is dealing with weeding out the weirdos.I noticed you just said about the boycott or the trying to drive advertiser out, I didn't realize that was a thing. I noticed early today, on twitter, some crazy Gamergate fucker was trying to mention Smartling -- which is a Pando sponsor, was trying to point it to your piece about GamerGate or you mentioned GamerGate in a piece.

There was a Smartling ad next to it, and they were trying to at Smartling, as if to assume and hope that they would not. I don't think one person doing it hugely effective, but it does seem a little troubling, the idea of...I don't like those kind of boycotts. I don't like those kind of...

Sarah: I do think that's one of the issues that makes me so conflicted about this asshole topic. I do think there are assholes who produce amazing things in the world, that good is done despite them being an asshole. There are musicians like that. There are authors like that. We should not say that there can't be creators of companies like that.Paul and I disagree on this, but I think Uber is a fantastic company, and I support it financially. I'm thrilled it exists, even though I do think Travis Kalanick is an asshole.

I think that things can do good in the world, even if an asshole creates them. I don't actually think no one should ever be funded. I'm not sure I believe that Evan Spiegel should have lost his job.

I think it's worth pointing out some of the hypocrisy and disconnect, because I think the valley needs to examine what's going on with this culture. That was my message.

Paul: Do you know the big difference for me? Pat, we're going to bring you on in a second. Pat wants to talk about Sarah's post. The big difference for me, you said there are musicians who are assholes or authors who are assholes. I pride myself on being one of those.The difference to me is those are not people who employ hundreds, sometimes thousands of people.

The thing with entrepreneurs is, to me, they employ people, and they employ people whose livelihoods will be affected if they're assholes. Uber's asshole CEO affects thousands of people who drive for Uber and potentially millions of people who get in Uber.

Sarah: I think he has investors who would say the reason he is able to pick fights with city after city after city is because of that personality type.I think you could make an argument that the fact that they do employ thousands of people is why, maybe, they get a pass for being an asshole.
Paul: Maybe, but I think if I was an employee at Uber, I wouldn't want him getting a pass. We're going to bring in Pat. Pat is the founder of Trustev. Did I pronounce that right, Pat?
Pat: Hey, Paul. How's it going?
Paul: Hey, good. It's Trustev. Is that how you pronounce it?
Pat: Trustev. Yes.
Paul: It's an Evan Williams fan site?[laughter]
Paul: That's the best joke of the night, folks. You can tune out now. All I know is you want to talk about Sarah's post. What do you want to say, Pat?
Pat: I really liked it. Just going at global business here. Just moved to New York from Ireland. We met many years ago [inaudible 20:38]
Paul: Yes. Pat, Pat Phelan.
Pat: Yeah, that's it. The very same.
Sarah: Hi, Pat.
Paul: We know you.
Pat: How are you?
Paul: We're very well. We'll catch up in front of a live audience. Pat, carry on. Now I'm excited. It's Pat Phelan, everyone. I wish we had a round of applause sound effect.
Pat: [laughs] I suppose we're growing rapidly, and I just moved to New York a couple of months ago. I said, "Well, the question is really you have to be an asshole to get forward."
Sarah: I hope not, or Pando's fucked, because I'm getting nicer and nicer.
Paul: It's half-fucked, because I'm becoming more of an asshole. We just have to keep the balance.
Pat: Hard to break the habits of a lifetime, Paul.
Paul: Quite so.
Sarah: I think there are many nice guys who have succeeded in Silicon Valley. I talk about how some of the earlier wave of social media companies actually were dominated by nice guys. Reid Hoffman is an incredibly nice guy.LinkedIn is an amazing company. One of the issues with Evan Williams -- who your site is named after, apparently -- was that he was non-confrontational.

This was a guy who, when Odeo didn't work, he bought out his investors, rather than just throwing his hands up and walking away.

Even Mark Zuckerberg, while he is competitive, he is intense, I knew him in the very early days of Facebook. He was not an asshole. He was very concerned about what other people thought about Facebook and how they interacted.

He was blind to things, and maybe someone I wouldn't set up my best friend on a blind date with, but wasn't really an asshole. Some of these guys are nice guys.

I think the issue, though, is to recognize that they didn't get ahead and they weren't funded because they were nice guys. I think that's the misconception that a lot of ECs want to spread.

Pat: That's the thing I see. I pride myself on, when things have to be done, I have no problem making hard decisions. I pride myself on being pretty fair and being a nice guy. You're worried, will you end up as the runner-up for not being a prick?
Sarah: One of my favorite quotes about being a founder came from Naval Ravikant of Angel List. He said, "Companies fail for only one of two reasons. Either they run out of money or the founder gives up."There is something in that refusal to give up when you are hanging by fingernails off a cliff that forces you to have sharp elbows, a lot of times, and forces you to be pretty tough.

Look, there are people I've had to fire who I'm sure would tell you I'm not nice. To some degree, there are things that put you in uncomfortable positions when you are building a company, by definition.

I think some of this is subjective. Ultimately, though, there are overarching personalities of companies. That's one reason that it's great that companies take a long time to build.

I think people's true colors increasingly will come out.

Pat: I won't stay much longer, but it was a brilliant post. I really enjoyed it.
Sarah: Thank you so much.
Paul: Thank you, Pat. Good to hear from you. That was Pat in New York, founder of Trustev. We have another caller. This is a classic, long-time listener, first-time caller to PandoLIVE. Dr. Sbaitso, of all people. How the devil are you?
Dr Sbaitso: Hello, Paul.
Paul: Hello. Now, I understand from Chris's excellent screening notes that your copy of "Pando Quarterly" arrived today.
Sbaitso: It did. I received it today when I got home from work. I have not had a chance to dive into the actual words yet, but I can comment that the paper stock and the illustrations are marvelous.
Sarah: Thank you.
Paul: I completely agree. I have a challenge for you. Do you have your copy within eyesight?
Sbaitso: I do, indeed.
Sarah: That's great.
Paul: First of all, can you describe to the one listener at home the cover of "Pando Quarterly?"
Sbaitso: The cover of "Pando Quarterly" has a bunch of assholes on it.[laughter]
Paul: Are you sure you haven't picked up a copy of "Not Safe for Work, Issue Five" or whatever it was?
Sarah: I was very clear to Brad that I meant metaphorical assholes.
Paul: Sarah was very clear. She didn't want any actual pictures of assholes on the cover. There's a gaggle, a group, a pride of assholes, probably. A rant of assholes on the front of the issue. Now, I can see one, two, three, four, five.
Sarah: There are seven guys, all wearing sweaters that spell "asshole."
Paul: Can you identify, Sbaitso --and bear in mind, I got about three -- can you identify the assholes? Any of the assholes on the front cover?
Sbaitso: I am afraid that I cannot, off the top of my head. The guy on the far right with the E shirt, he looks like...The name just escaped me.
Paul: Which guy? Which letter?
Sarah: The E.
Sbaitso: The E.
Paul: I will give you a clue. The guy in the E has been portrayed in a movie.
Sarah: [laughs] That's not obvious at all.
Paul: It could be anybody. It could be Erin Brockovich. That guy. This is a crap game. I had a sound effect, as well. I was going to play it for everyone you got right.You've really let me down. I was going to play the "ching" noise from Not Safe for Work. Thank you for calling in to comment on the paper stock.
Sarah: Do you have anything else to add?
Sbaitso: I wanted to congratulate you on the new show. I'm very happy to have it back.
Paul: Thank you. We'll get there.
Sbaitso: [inaudible 26:05] make my week a little bit better.
Paul: That's sweet of you. I'm sorry to hear your life is so empty.
Sarah: I'll allow him to play Taylor Swift for you once or twice.
Paul: Is that who complained?
Sarah: Yes.
Paul: You complained that we didn't open with Taylor Swift?
Sbaitso: Not a complaint. Just disappointment.
Paul: We will close with Taylor Swift, just for you. We should move on. We have another call. Sbaitso, thank you so much. It wouldn't have been a show without you. We'll hope to hear from you next week, as well.
Sbaitso: Thank you. Best of luck.
Paul: Thanks. We have another call. Ryan Cox from Indianapolis actually is going to bring us into our next conversation.
Sarah: Wait, should I tell them the prizes first?
Paul: Ryan, are you there, Ryan? Do we have Ryan on?
Sarah: Wow, this is just like a call-in show.
Paul: Ryan is there. I'm going to return him to the queue. Hopefully, he'll come back. You can talk about the prizes while we get Ryan back.
Sarah: It's the "Frozen" prizes, right?
Paul: Absolutely. There are two sets of prizes. If you call in -- and Sbaitso, you're eligible, and Pat Phelan, you're eligible -- if you call in, we will send you a copy of "Pando Quarterly" that Sbaitso doesn't need, and a Pando t-shirt, right?
Sarah: Yes.
Paul: Anyone who calls in gets a Pando t-shirt and a copy of the current, asshole-covered "Pando Quarterly." There is a second game that is a meta game that is going to go on throughout the entirety of PandoLIVE.
Sarah: It might even branch into Southland and "Pando Monthly."
Paul: We may just do it everywhere we go.
Sarah: We do it in life.
Paul: We're calling it the "Sarah has watched too much 'Frozen' with her kids" competition. Sarah, what are the rules?
Sarah: The rules are if I work a quote from "Frozen" into conversation and you catch it, we will give you a free, year-long subscription, as a member -- what do we call them? -- to Pando. That gives you all kinds of things. Big discounts on Southland, free entrance and live-streaming of "Pando Monthlys." The magazine.It's a $300-something value, all for if you are working parent out there who has watched "Frozen" as many times as me and know if I were to say something like, "People are better than reindeer," and work that into conversation, that I am channeling my sleep-deprived, working parent self.
Paul: I can feel the radio awards heading towards us as we speak. This is going to be great. If you identify Sarah sneaking a "Frozen" quote in, I will play the Not Safe for Work "ching" sound, and you will get your astonishing prize. That's the noise to listen for.That means that somebody has correctly identified one, either through @pandodaily on Twitter, studio@pandodaily.com, or 877-959-6739. We're going to try and get Ryan Cox back. Ryan, call us back if you can, because our next topic -- and we are going to rattle through these -- our next topic, Sarah, is...
Sarah: Is everyone leaving downtown Las Vegas?
Paul: Is everyone leaving downtown Las Vegas? We were in various different capacities part of the downtown project. Sarah's husband is still part of the downtown project. Not Safe for Work Corporation, my company, was vested in by downtown. I lived there for a long time. Not Safe for Work was based there. We got the fuck out by going out of business. [laughs]
Sarah: We bought you, technically. Or you went out of business.
Paul: We were almost smacked into the ground and Sarah scooped in with her big, generous hand and saved us. Vegas Tech Fund is also an investor in Pando. When we come back after this, we are going to talk about what the fuck went terribly wrong in downtown Vegas.[music]
Paul: 877-959-6739. This is PandoLIVE.[music]
Paul: That's quite enough Sheryl Crow. You are listening to PandoLIVE. 877-959-6739 is the number to call. We are going to talk about the Vegas downtown project.Disclaimer, if you're an investor in Pando, I don't think you're going to think we're being too nice to them. I suspect this won't be one of those times where you go, "You wouldn't say that if they weren't an investor."

Sarah, what went wrong?

Sarah: Well, God, where to start? I think the one thing is there just wasn't enough discipline. Sometimes, you can overreach on some of these truisms of start-ups. One of them is you don't want anyone who has any experience doing this, because they don't have any of the preconceived notions. They're not bought into the way things were done in the past.I think when you're doing something like rebuilding a city, when you're dealing with zoning, when you're dealing with civic planning, transportation, very real world, hard to navigate things, staffing it with people who have never done those things is not, in and of itself, a virtue.
Paul: I should just say Ryan Cox has just tweeted. He had to take his kid to bed. That's nice.
Sarah: I know, he would get a "Frozen" reference if I had made one.
Paul: Send him a tee shirt, anyway, because he did at least try. He said he was going to discuss the "What the Fuck Happened in Vegas." He said his stance, he's decided, "Who cares? Wealth doesn't equal happiness," he said. OK, thanks.No, it's not that. He wants to talk about the What's App CEO. Sorry, he said in the queue he wanted to talk about Vegas. He wants to talk about the What's App CEO paying himself a one dollar salary. He says he doesn't care.

He was calling in to say he doesn't care about the story we're not talking about. Should we send him a tee shirt anyway?

Sarah: Yes. [laughs]
Paul: Back to Vegas. I'm sorry, Sarah, you were saying?
Sarah: I also think there just wasn't enough discipline. We saw two years ago, and, frankly, if you go back and re-watch the Pando monthly I did with Tony Hsieh, we talked about a lot of the same issues that we wrote about last week.I think everyone connected with the project saw these things happening two years ago. I think there wasn't enough discipline to course correct. I think there are a lot of friends. I think there was this whole cult around happiness, but it was a very specific definition of happiness.

One of the most damaging things was there were a lot of big promises and vision that were made. Good for Tony and his team. That's what you do as an entrepreneur. Certainly my first post I said Pando was going to be everything to everyone in the startup world probably, but no one in the national press questioned it.

Everyone went there and did their story of how great it was. We saw this on Rico the day before. Hook, line, and sinker, swallowed every single big mission thing they said. Unfortunately, a lot of this backlash is a natural pendulum shift.

I think there's a lesson for startups out there. You don't want someone to buy your marketing message as hard as they bought that one. I don't care what you're building, the reality is always harder along the journey.

Paul: I have to say, there were a lot of people writing about the Vegas project, basically rewriting the Tony press release. There's always the picture of Tony on the balcony with Fremont Street behind him. Is he the savoir of Vegas? Is this the next happiest city on Earth, etc.?I would like to congratulate Rico, though, for the fastest 180 on the story.
Sarah: [laughter]
Paul: Most people a few months ago wrote that Tony was the messiah. Insert your own Monty Python quote there. Then a few months later they were like, "Well, I never really believed it. It was always a bit suspect." Rico did it in about 35 minutes.Their day one story was, "He's the messiah. He's going to change the way everyone works. This is part one of a five part Rico series on what an amazing human being Tony Hsieh is." In the interim on day two it was announced that Tony was stepping down. There were a lot of layoffs.
Sarah: It was not announced that Tony was stepping down. Other people reported that he was not running day to day. He, in fact, says he never stepped down because he never was that, we should say.
Paul: We learned that, unbelievable, Tony Hsieh never existed. He was a fictional character. He was more of a mascot, if anything.
Sarah: Yeah, Rico did a 180. Then they came back and said he was awful.
Paul: They then came back that almost he personally was responsible for three people killing themselves. They did the sharpest 180.
Sarah: Yeah, ridiculous.
Paul: I just hope Kim Kardashian doesn't do anything bad halfway through Kara's interview with her at Mobile Rico, because Kara is going to get up and stab her in the face.
Sarah: I want the old Kara to do that interview, but that's another topic. Paul, what do you think went wrong? Then I want to get Michael Carney into this conversation, because he spent a lot of time in downtown Vegas as well.
Paul: I think they made the classic mistake of not listening to us. If we're sitting there saying, "No, this is all going to go horribly wrong," we're always right. I think what went wrong is basically what you just said. They wanted to create this bubble of not having to leave college.They wanted to create a bubble where it was all about a cultural fit, which meant drinking, basically. It meant going to South by Southwest or Burning Man and occasionally wedging some work in there.

Then you had Tony and some other people traveling the world. Anytime they saw a good TED talk, they said, "You should come to Vegas. What is it you do?"

That person would say, "I make origami swans." He said, "That's incredible. Vegas is going to be the origami swan capitol of the world. You should come and head up our origami swan business."

That person would go, "I've never heard anyone wanting to fund origami swans before. This guy seems legit. He founded Zappos," which he didn't.

They would then fly to Vegas and discover that, actually, no one wanted origami swans. Tony would say, "Oh, I've actually moved on. Today we're the knitting capitol of the world." I think there's just a lot of big picture over promising and there's a lot of individual over promising.

You just said very briefly, Sarah, there were a lot of friends. We unpack that a bit. There were a lot of people who were given jobs who were friends of Tony's or who were family members of people involved in the project.

There was a lot of, "We want people to come here. What job can we offer them?" rather than, "We want a certain type of business," a school, a library, a grocery store, whatever it is. "Who is the best person to run it?"

Sarah: I think that's very true. In defense of Tony, I think his ambition was very laudable. I think he genuinely did want to create a great sense of community. It is hard to say he has not left downtown Vegas better than he found it.He has certainly funded some good companies. Order With Me, the Disrupt Beijing winner, is an amazing company that should be based in Vegas based on what they do. I do think there's a lot of bitching in downtown Vegas.

I think a lot of people expected he was the new mayor and he was going to solve all of their problems. They had unrealistic expectations.

This is someone investing his own money and wants a business outcome at the end of the day. I'm not so far on the extreme as Paul is, per usual, but I think there are a lot of people who are now looking at it and saying, "Well, I wasn't given all the support..." It's like a lot of these people just didn't want to work hard.

Paul: I want to bring in Michael Carney, because Pando's Michael Carney is on the line. Hi. Michael.
Michael Carney: Hi, guys, good evening.
Paul: Good evening. You, Michael, came to Vegas at least a couple of times that I know of.
Michael: I've popped in there a half dozen times, I think, since Tony started the project.
Paul: You've seen more of it than most people have, but you weren't part of it in the way that Sarah and I were. I'd love to get your take on this, what you think they did right, what you think they did wrong, and where you think they go now.
Michael: Yeah, absolutely. Even had I not been there, I think from everything I've read and heard and things I know about Tony, this actually provides an interesting counterpoint to the last discussion we were having about assholes.It almost seems like Tony was too nice. He was too idealistic. He was too hopeful that a bunch of money and a bunch of people with the right intentions would just get things done.

The way Sarah pointed a moment ago, being a CEO and building a company against very long odds puts you in some awkward positions and inherently forces you to have sharp elbows at times.

It seems like, for whatever reason, nobody on the downtown Vegas project realized that was necessary or had the ability to do that when necessary, to say no or to fire people or to make tough decisions. It seemed like a lot of people were hoping for the best but not really doing a lot to insure that that happened.

Sarah: I think that's an excellent point. One of the things that's been pointed out to me a lot by outsiders and people who were investors or along when they were building Zappos is this the first thing that Tony has done without Alfred Lin, who is now a Sequoia partner and ran a lot of the operations at Zappos. I think he was probably CFO, something like that, maybe COO.He has been an amazing operator in company after company. As it's been described to me, Tony was the visionary and the guy who saw a lot of promise and a lot of hope and believed the best in people. Alfred was the guy who was a little more cynical. That was a really great balance.

That's why Zappos turned out to be this crazy combination of ruthless operators that could build a billion dollar E commerce company but also really did have this wacky culture around happiness. I think that was the missing ingredient.

I think Tony's part of it, the weirdness of downtown Vegas is the same thing that made the weirdness of Zappos work. It's that you didn't have the counterpart. You're right, being a nice guy who says yes to everything isn't great either.

Paul: We don't have a huge amount of time left on the show, but I would love to hear if anyone listening is part of the Vegas downtown project or has visited...
Sarah: Can we let Carney do a 60 second defense of Evan Spiegel first?
Paul: We can in just a second, but I want to make sure that people can call in about this if they want to. 877-959-6739 is the number to call. We've got some tweets I want to read, but I want to have calls on this.I would love to hear from anyone who is part of the Vegas downtown project or has visited and been part of that. 877-959-6739. Carney, you want to defend Evan Spiegel?
Michael: Defend might be a strong word, but at least make a distinction between Evan and a few of the other people on the list. It came to my mind, a couple of things when I was reading Sarah's post.One is that, as abhorrent as his emails and his behaviors were in college, as recent as that was, as you pointed out, I think that there's a distinction to be made between the behavior that was exhibited prior to running a multi-million or multi-billion dollar company and one that's exhibited while in that position.

Whether it's Secret or Uber, just the very fact that you've raised money, you are now employing people, and you are the face of a company, I think any behavior that kind of happens after that line should be viewed slightly differently. Not that one is necessarily acceptable, but there's a distinction.

The other thing about a few of the companies on that list that I thought were interesting, and I don't think that SnapChat falls into this category, Secret, Tinder, maybe, would fall in this category. A few of the companies were created really with fairly ethically ambiguous purposes.

There's not really a good argument for why Secret should exist and serve a great purpose. Tinder, as Sarah wrote, exists to kind of objectify men and women. It's a pretty superficial app.

SnapChat, at least, seems like it serves somewhat of a utility. It got pigeon holed early on as a sexting app. I think they've done a great job evolving the product, and it actually does serve a purpose.

Sarah: I totally agree with you. The thing I love about SnapChat and the thing I love about Evan Spiegel, as much as I actually do think those emails or not, he is a dick. We can get into that in another show. I've heard bad behavior around him, and, frankly, he's treated me with bad behavior since founding SnapChat.I agree with your point, but it has certainly been backed up. I don't know anyone who has funded that company or who works there who would not nod and say, "Yeah, he is a little bit of a dick," the same way with Travis Kalanick.

That said, I think you're right. The thing I love about Evan Spiegel's ego is that he didn't sell his company for three and a half billion dollars. We cannot have every single hot social networking app selling to Facebook and going and being part of the Facebook mobile messaging Hunger Games. That is not good for this industry.

If you have to be an asshole who thinks you're the king of the world and the attitude we see behind some of those emails to do that, again, I'm conflicted about SnapChat. I still use it. I'm horrified at what he said. I didn't do what Paul did with Uber and stop using it.

I grant your points, except with the emails. I think when the emails are that bad they should be considered. Paul is giving me the wrap-up sign.

Paul: I want to go back to Vegas, because we're getting loads of things on Vegas, and I'm worried they'll get it dragged back.
Michael: I'm going pop the call then, guys.
Paul: Carney, thank you so much. I appreciate you calling in. We have a ton of people who want to talk about Vegas, so I don't want to leave them hanging.Tom Maxwell says on Twitter if you want to contribute at PandoDaily, "I'm funded by Vegas tech fund. I go to Vegas, and I agree with everything they said," we said. "They throw money at whoever will show up." That's from the horse's mouth.

We have Greg from San Francisco who I'm reliably informed has interesting ties to downtown Las Vegas. If that doesn't sound like a mob euphemism, I don't know what does. Greg from San Francisco.

Greg: Hi.
Paul: Hi, Greg.
Greg: Hi, happy to be on.
Paul: So you have interesting ties to downtown Las Vegas.
Greg: I do. The Pig Poop Crew owns...
Paul: Is this a crank call, Greg?
Greg: ...you're a belligerent hack, Paul.
Paul: Is this a crank call, Greg? Oh, he hung up. That was sad. I think that was a crank call.
Sarah: I love that we get live trolls on a call in show.
Paul: That was rubbish, though. He didn't really say anything. He called in and said he had ties to the downtown project, and it was just a crank call. He didn't even respond. That's sad. Pig poop or something. Thanks, Greg. 877-959...
Sarah: I don't think he knows we can actually swear on this show.
Paul: Yeah, was that what was? He was like, "I'm going to say something..."
Sarah: I don't know.
Paul: If pig poop is the best swear word...I think your three year old son just called in.
Sarah: [laughs]
Paul: That was actually a confusing crank call. We're going to have to have some ground rules. Crank calls are very welcome, 877-959-6739. We need your swearing to be at an eighth grade level or above. If you say "pink pig poop," that's nothing. That's rubbish.
Sarah: If my three year old could say it without being sent to his room...
Paul: At least call me a [inaudible 44:34] if you're going to call in. That's all I'm saying.
Sarah: No, no, no.
Paul: 877-959-6739.
Sarah: No, there's....
Paul: 877-959-6739 if you would like to crank call us with an eighth grade swearing level or above. Speaking of dicks, we're going to talk about something...