This week we’re talking about a different Billionaire, Sir Richard Branson, successfully voyaging to space with 5 Virgin Galactic employees just days ahead of Bezos. Brad’s alma mater Brookfield entered a JV with Digital Realty to enter India and more.
This week we’re talking about a different Billionaire, Sir Richard Branson, successfully voyaging to space with 5 Virgin Galactic employees just days ahead of Bezos. Brad’s alma mater Brookfield entered a JV with Digital Realty to enter India and more.
It's the Next Wave Podcast, Episode 41. I'm James Thomason here with co-host, Dean Nelson and Brad Kirby. This week we're covering the news. And there's a lot to talk about. Richard Branson has gone to space. Richard Branson goes to space. That sounds like a children's book. That's what the headline says. This was pretty cool. Did you watch the video?
Dean Nelson:Yeah, I did. I did. I watched actually an interview afterwards with him. And also talk show host, Stephen Colbert. Stephen Colbert, thank you very much. Yeah, they had pictures and they were showing different things. But it was really cool. I got to say, you know, I met Richard Branson, two years ago, and he's the fittest older guy I've ever met.
James Thomason:So you might add he met him on Necker Island.
Dean Nelson:Yeah, I keep bringing him up, but actually did meet him there. He's awesome. But man, the dude is fit too he could kick my butt. I forget how old he is. He's got to be 70, 70 or 80 years old, right?
Brad Kirby:I think he's 70. I think 70 on the dot. He's definitely in his 70s.
Dean Nelson:So he was talking about when the thing was going up, he goes it's really the first part because those Gs, you're either gonna be okay, or you're gonna throw up, he goes, it just would be really bad form to throw up on national television, inside my capsule with all my other people that are going with me. That was actually a really cool interview with Steven Colbert.
James Thomason:Yeah, then you're stuck in space with puke smell. Have you ever if you've been on an airplane where someone puked? Like near you?
Brad Kirby:Yeah, I've picked on an airplane and it was like a Cessna. Little two or three seater. So, as a kid I puked all over, so I've been the pukee. Number one.
James Thomason:There's a famous Goldman Sachs story that has circulated the internet for a few years about a particular number two incident on a private Goldman Sachs jet and it is hilarious. I recommend everyone to look. I'm not gonna talk about it. But it is hilarious.
Brad Kirby:Imagine doing that in no gravity, that would be a tricky one.
James Thomason:That one long story short, you know, a Goldman Sachs executive had to poo on one of those very small planes where you know you there's no private bathroom. There's just sort of a curtain that you kind of look over while you're doing your business. And it was a was a dire situation. You just have to read this story. I don't want to ruin it. It's read the story.
Dean Nelson:There's some stories I will not read James and that's probably one of them. I appreciate you sharing though.
James Thomason:No, you've got you've got to read it. The way it's told it's hilarious.
Brad Kirby:So what happened on the Stephen Colbert show that was so interesting?
Dean Nelson:Oh, yeah. This is great. So, okay, remember the tweet that went out with Elon Musk he was standing with Richard Branson. Well, the thing that that everyone was like,"Oh, that's so great. Those guys. It's not really you know, a competition. It's really cool." But then they said,"Elon, you don't have any shoes on." So then that became the talk. Well, apparently, there's a shoe fetish, or sorry, foot fetish, I guess, or something like that. And there's a site called wiki feet. So they talked about this on Stephen Colbert it was hilarious. So first off, you know, they picked up and saw Elon's feet. Then they said, well, Elon Musk's feet are rated at 2.65 out of 5. I don't know how their criteria is put together, whatever it was. And then Stephen Colbert was saying,"Well, hey, you know, what, what were the other ones? We looked it up so we're gonna share with you." And then they said, "Well, it looks like you've actually you've beat Elon Musk because your feet Richard are 3.33 rated." So by the way, Richard walked out onto the show barefoot because of this too. And then he put his feet up on the table when he asked him about it. And then of course, he had to dig in and he said, Look, Jeff Bezos is only 3.15. So you've not only been in the space, you beat his feet on wiki feet.
Brad Kirby:Well, the video camera has an algorithm that automatically calculates it based on certain factors like set criteria, right? There's AI for you.
Dean Nelson:Brad, do you actually have an account onwiki feet is what I'm hearing?
Brad Kirby:No, I'm just making that up.
James Thomason:If any investors are looking for a new venture: Brad Kirby creator of Feet AI.
Brad Kirby:I have never heard of wiki feet. I do not. I have not brought up an adult oriented site. It's Dean's first time. And he was just watching family programming. So...
Dean Nelson:I was and by the way, it's not an adult site because they have rules on there. Apparently they were talking about it; nothing about this one. It's just the shape and their perspective I'm like, give me a break. But also Stephen Colbert's though. Okay, thanks for clarifying Brad. Stephen also brought up something else he goes "you know, you may be you billionaire is doing your thing. But he goes my feet were rate of wiki feet and I got 4.65." So BAM. He beat the billionaires. By the feet.
Brad Kirby:e might know the c ders too, maybe he knows t e coders. "Compare to my
James Thomason:So Beezos is about to go to space Bezos? Beezos. Bezos. Beezos is about to go to space any moment now.
Dean Nelson:There we go again.
James Thomason:By the way, if you haven't watched that, that document on Netflix, the guy who stays inside for a whole year as comedian and just records himself, he sings a song about Jeff Bezos, which is hysterical. And it's been making its way to Tik Toks and other videos and memes. And I mean, this is a family friendly show, so we can't quote the lyrics, but you get it. The title of the song is"Bezos I".
Brad Kirby:And I just want to say something, though, that I did do the research and the Washington Post clarified in 2013, which, which Jeffrey owns that his name is, in fact, Bezos without any. Okay, so that is an that that is from the Washington Post from 2013. And that's him saying that his name is Jeff Bezos. So on top of Alexa saying that's his name and how it's spelled. Yeah, I think it's undeniable, at this point, but I think because,
James Thomason:It's my Scandinavian heritage. You know, besides just it comes out, rolls off the tongue. I think it's a better pronunciation beat. I like it. It's too serious.
Brad Kirby:I like those two. Alright, so now Spanish,
Dean Nelson:I think it's officially the I'm going to be Jeef Bezos. Is that better? It was called Jeef.
Brad Kirby:Jeef it is. Yes.
James Thomason:That's beautiful. Sounds more like, you know, that like Ramona and Beezus. That adorable children's book series? Yes. Where Robert Adams, a billionaire tycoon and takes over the world, launches yourself into space. That's a great series. You should read it. Read to your kids at night. Okay, so Bezos is next into space. And he's taking with him. This is kind of cool, right? He's taking with him an 82 year old woman who was supposed to go to space 83 year old woman who was supposed to go to space back in the day she was qualified to go to space. She was a pilot. Yeah, they basically didn't send her to space because she was a woman. I mean, I that's kind of what I took away from the like,"we can't put women in space, that's ridiculous!" So it was at that time early in spaceflight. And he's also taking an 18 year old kid with a Yeah, so the simultaneously the youngest, and the oldest astronauts, is that right?
Dean Nelson:Yeah. So which I think is really cool. And by the way, you hear the story about how he got selected for that?
James Thomason:I heard that someone else gave a they spent millions of dollars in the head of scheduling conflict, like I'm too busy to go to space this week, because of scheduling conflicts. Or like, a priority$28 million to fly on it. You know what that is that's called chickening out. That's exactly what that is. I never thought this was actually going to happen. So I chickened out and have a scheduling conflict.
Brad Kirby:Say his dog is sick. Yeah. Yeah,
Dean Nelson:I'm sure that's it. I'm sure that's got to be it. Because of the quote unquote, scheduling conflict that this top bidder had, because he did pay 28 million to have that seat with Bezos going up. He said, You know, he can't. So they went to the second highest bidder, which happens to be a private equity guy. And he had bid for his son, his name is Oliver Damon. And he's 18 years old. 18 years old. So think about that, man. He's gonna be the youngest guy in space ever. So the whole way...
James Thomason:"Daddy I want a rocket ship. And I want it now!"
Dean Nelson:Yeah, he said they didn't pay anywhere near the 28 million, but they had to paid something pretty large to be a second on that, that oxygen list. I mean, the good thing is, it's all going to charity. And it's going to charities that are supporting space research, right? Diversity, all types of things. It's really good, like money going to the right place. Talk about getting on the world stage immediately. His name is everywhere on the internet now. So
James Thomason:And yet, Wally Funk isn't which I find interesting yet again, right? True. So 80 to 83 year old astronaut, she was a test pilot? I think she was a jet pilot. And she's always wanted to go to space and so it's like a lifelong dream. come true. Yeah.
Dean Nelson:Yeah, it's really cool. That says so much. First off about how messed up we have been in right from a gender diversity standpoint. Because what was that other movie with all the math about going to space? The ladies that did the engineering Oh, that
James Thomason:was a great movie.
Brad Kirby:It was called Hidden Figures Hidden Figures.
Dean Nelson:Hidden Figures. Yeah. Yeah, yeah, I just and how all that work was just overshadowed completely and you know, because quote, unquote, the man had to go to do this, but yet the women are behind that it blowing through all the math to make it work. So great movie. Yeah. So that's really cool. Wally Funk, there's another name so we got two new names on the public stage. Oliver Damon and Wally Funk.
Brad Kirby:And Veruca Salt.
James Thomason:And Veruca Salt. Daddy, I want a rocket
Brad Kirby:I want it now!
Dean Nelson:There's 4 people going up.
James Thomason:I don't know anything about those kids. That's mean to me. Yeah.
Dean Nelson:He seems like a really cool guy. By the way. If you watch the videos, yes, he's Think about it. You're 18 you're going to space right with one of the richest men in the world. He's just over the moon. Haha. But thank you. Thank you. The One thing that that is a bummer is there's a fourth person that person on this flight. No one's talking about him, but isn't it like Bezos' brother and brother in law or something?
James Thomason:Oh, that's right. Yeah. Yeah, yeah. Bezos invited him to go. "Serious?""Yeah. I'll go."
Dean Nelson:Can you imagine that? How do you select from all your friends and your family like who's gonna be in that seat? And
Brad Kirby:I'm also curious who's gonna attend the launch party because with Richard Branson's like Elon was there, obviously. And yeah, and Mark Cuban's a big Bezos fan, so I'm wondering if he's gonna show up because he hates Richard Branson, like with a passion, so just curious, I'm curious to see if he's gonna poke his head and be there clapping and cheering I bet I bet he will.
Dean Nelson:Yeah, as long as he is barefoot. And so we can see Mark Cuban's feet on wiki feet. I want to see that rating.
James Thomason:I don't want to see that. I don't want to see any of that. I'm never go into that cycle. That literally putting in a blacklist on my computer right now. I will never go.
Brad Kirby:Mark Cuban owns a house on barefoot beach and Cayman Islands actually go on barefoot beach. So let's go. Fun fact. All right. I met actually met him. I met him in Cayman. So you know,
Dean Nelson:You met a billionaire.
James Thomason:I'm outside. He's like, what are you Who the hell are you? And you're like, Well, look, listen, at a bad day at the hockey rink and you're touching
Brad Kirby:I was with the hockey guys that Cowan knows too. He was at Calico Jacks in Cayman when we met him having a drink. Just a cool guy sitting at a patio on the beach.
Dean Nelson:Hey, James,what billionaires Have you met? Brad did we just one-up James is that
James Thomason:You might have!
Brad Kirby:Bruce Flatt, Jack Cockwell, Prem Watsa
Dean Nelson:nevermind. Okay, hold
Brad Kirby:on. Conrad black.
James Thomason:I have a billionaire on my board. And I have other accounts because I have you know, I have a mentor Jagadeesh who's probably a billionaire, but he wasn't what I knew he was a paltry 100 millionaire. But he's very close. Yeah. I don't know if you let me check my Robin Hood account? No, no, neither.
Brad Kirby:So when I was at Brookfield in a room of 20 people, four of them were billionaires. So I was kind of sitting across from them when they became billionaires when I was sitting there, like, you would never think they don't act like they became billionaires.
James Thomason:When he was sitting there. Like right then?
Dean Nelson:Just because of Brad.
Brad Kirby:I watched it on the Bloomberg terminal like. And Bruce was on the cover of Forbes billionaire list. So your humble Canadian CA from Winnipeg, Manitoba that worked at Deloitte and now a billionaire.
Dean Nelson:What are we doing wrong? By the way? Well see zero net worth.
James Thomason:This leads me in the right place at the right time and still be stupid. I mean, that's
Brad Kirby:There is a right time, right place/right time concept to it, for sure. (There you go). He's there. Also brilliant. I would say like there's some of the smartest people I've ever met.
James Thomason:Speaking of your old job in Brookfield, they just entered a joint venture with DRT digital realty trust right to enter the Indian market. So they're expanding through a joint venture. Brad, tell us about this. You know about this?
Brad Kirby:Yeah, so it's their second joint venture with DRT. The first one we talked about was in Brazil when they acquired Ascenty. So that was like a JV by acquisition. So this one is called BAM Digital Realty. They're really creative at naming over at Brookfield
James Thomason:BAM! Like Emeril.
Brad Kirby:BAM is Brookfield Asset Management. That's the parent, corporate company. So it's the public co. that owns all the other codes and Yep, there's in the boardroom there there's a big BAM like comic book picture and executive boardroom there. They have a picture of it.
Dean Nelson:Brad, do you know do you know Emeril? Have you heard of Emeril?
Brad Kirby:Emeril Lagasse?
Dean Nelson:James is making this reference beside me this
James Thomason:Reference to him and it's completely over his head. They don't have Emeril in Canada.
Dean Nelson:Yeah, he's he's a chef that all he does.
Brad Kirby:Yeah, Emeril Lagasse, yeah.
Dean Nelson:He does know, see? Alright.
Brad Kirby:Yeah. I said Emeril Lagasse. Yeah.
Dean Nelson:Oh, you're just ignoring James that was the point.
Brad Kirby:I met him.
Dean Nelson:Did you really? Look at you name dropping.
Brad Kirby:At the Cayman Cookout, Eric Ripert. My brother's a chef.
James Thomason:You met Emeril Lagassi?
Brad Kirby:Yeah. With Anthony Bourdain and Eric Ripert at the Cayman Cookout. My brother's hero is Bourdain. So in 2012 my parents bought him a flight to Cayman for his birthday. And they have to have the cookout every year, or they used to. And Eric Ripert and Anthony Bourdain hosted a week long event in January. Yeah, he was there with his family. It was a four hour brunch and have a picture with took a picture with my brother and Anthony and o yeah, I know who Emeril is.
James Thomason:The danger of the celebrities or when they're writers you feel like you know them. So you feel like you know, I always felt like I knew Anthony and yeah, we should definitely hang out and drink together. Because at least we have that in common. We know that that's gonna go well, right. We like drinking and fine dining. I mean, what? Two of our favorite things so we're definitely getting along? Yeah.
Brad Kirby:But he is very relatable key friends. Yeah, me too. I've always felt that way too. And yeah, I'm sure you would. So back to the Brookfield story like it's
James Thomason:BAM!
Brad Kirby:So they're now over like they're over $20 billion of assets under management in India in renewable power, real estate.
Dean Nelson:Just in India?
Brad Kirby:Just in India. Yeah, they're like over 500 billion global holy crap. They're the largest real estate company, it's like second largest infrastructure, second largest renewable energy. Blackstone might be number one, they kind of flop back and forth, but they built you know, BlackRock is more of like, like the iShares asset manager. I'm talking about actual real estate.
Dean Nelson:Real estate, so Okay, all right, but CBRE's very large
James Thomason:real estate all over. Yeah, there.
Brad Kirby:I think Boston's 3rd. Like Brookfield actually built the electrical grid back in the late 1800s from Rio to Sao Paulo. They owned the Montreal Canadiens in the 70s when they won 5 Cups in a row and then sold them next year to the Molson family, like the alcohol company. So they've invested in everything. And so when you see them making this kind of investment in the data centers, it's Yeah, you know, that they, they've been onto this for a while.
James Thomason:Okay, I know that's taking data centers up a notch. Totally BAM! That's another Emeril reference.
Dean Nelson:You're really bringing it James (sorry). Bring it you're bringing it today.(Sorry). Yeah, you're feeding us. Problem. Okay, so a total aside on this one -
James Thomason:I'll never out-dad joke Dean Nelson. That's never gonna happen. But
Dean Nelson:Not a total aside. I was in Utah a few weeks ago, and I went to this real estate dinner put on by the Urban Land Institute. I think it is ULI they're kind of a global organization. There was a guy there and his name was Brandon Fugal. So he runs Colliers for Utah, and Colliers is another massive real estate company. Right. But but just complete aside here. He owns skinwalker Ranch.
James Thomason:He familiar own skinwalker Ranch.
Dean Nelson:Yeah, he bought it like three to four years ago. Yeah. And so he is
James Thomason:Every conspiracy theorisst is familiar with Skinwalker Ranch, yes.
Dean Nelson:Oh, yeah. So he bought it from a reclusive billionaire in California. And, and he bought it to disprove it. And so and then the billionaire told him, right, so James, you're gonna love this billionaire goes, "you just go there. It's going to change you." And he's like, Yeah, right, whatever, whatever, whatever. So he went and got scientists to get reporters, he got tons of technology, everything else and started doing that. And then this is this Netflix show? That's on right. Is it on Netflix? I think?
Brad Kirby:Yeah. I haven't seen it. I have
Dean Nelson:yet. So So I saw a few episodes on alchemy. This is hype or whatever else. Anyways, at the dinner, he goes, you're gonna think I'm crazy now. But he goes, I've seen things now that I cannot explain. And he goes and we've captured and we proven like, okay, now I gotta go watch skinwalker Ranch. But here's this real estate executive right from Colliers, who bought that he was he's, and he had this reporter coming out, they're going to be doing flyovers and everything into skinwalker Ranch The next day, to do a big episode on it. Right about it. Right. So I don't know, James, maybe we should just get him on. Because you
James Thomason:secure an invitation to the ranch. And that's that was my expectation. Dean, you will get us.
Dean Nelson:What he did explain is there is one road in and that's it. And he goes and I own that road. Nobody else can go on that property. So he's got military, he's got everybody on the on the property, protecting everything. But I don't know. It's just it was really intriguing to hear about that, you know, because you see it on TV, and I'm like, wait, so you bought it and that, what were you doing? Then he explained? Yeah, I'm gonna disprove it. And he goes, I now believe, like, oh my god.
Brad Kirby:So for the people that don't know what skinwalker Ranch is, what's the paragraph on this? So,
Dean Nelson:James, would you be so kind as to share?
James Thomason:Okay, well, first off, I think there's a series on Netflix, which is the secret of skinwalker Ranch that's been running for a couple years, it's a 512 acre property. the surrounding area has been a hotspot of UFOs and this sort of mythological creature known as the skinwalker. You should watch this show. It's intriguing. It's intriguing, But to your point, Dean that's been going on for like, decades and decades, people been attracted to this site investigating this site. It's just one of those hotspots zones for for weird and presumably paranormal activity or alien activity. What have you, and I think they should bring me because I'm a magnet for weird stuff. a magnet for two things. Lightning strikes, and weird stuff. You put me in a thunderstorm you're gonna get you're gonna die from a lightning strike. Don't be anywhere around me. I'm like, even see that movie powder? Yeah, thinking about the 90s the guy he's just like, whenever he's outside and there's a thunderstorm he gets gets struck like 20 times by lightning. That's me. Don't be anywhere near me. I think it's either my height or my my weight my mineral content. I don't know what it is. But since childhood since I was a little kid, I draw lightning strikes they hit the house and the trees around us it's terrifying. And then weird stuff like this. So they need to invite me because, huh? They to invite me in a thunderstorm to skinwalker ranch and we're gonna see something so the technology
Brad Kirby:is doing the research called Satan. Aliens for short. It's Sentinel assignment, telemetry and notification Satan that's the tech it's that's what they used to do their research functions as the hub of the technology for all Skywalker Ranch. So this is a fascinating story. Yeah. Yeah. In Walker.
James Thomason:Walker Ranch, that's Disney.
Brad Kirby:Yeah. That would be like Jesus, you're like God or the opposite of Satan.
Dean Nelson:Okay, so it sounds like yeah, there we go. God ranch. That sounds like we need to get either an invite to skinwalker Ranch. Or we also need to bring this guy on to the show. Give him a show. be fun to bring Brandon. Yeah. All right. All right. See, we could do. Oh, yeah. That'd be fun. He's, uh, by the way, he's the kind of guy that just never sleeps. So he he's just on and the same stuff that we you know, we talked about all the time, but at the dinner the guy drank like seven died, Pepsi's stomach. He just kept going down the diet Pepsi's. Right? interesting guy.
Brad Kirby:It's just got a nervous tic. He's just he's seen the devil. So I mean,
Dean Nelson:he has invested in Satan. So
James Thomason:he owns the portal to hell and or other dimensions. So what are you gonna do?
Brad Kirby:that's a that's a cool story.
Dean Nelson:Okay, back to India. Let's talk about this steel. Remember? What was his name to render a Singh? So way back in Episode Five. I think it was right.
James Thomason:Future data center tycoon? Yep,
Dean Nelson:there you go. So, so to render games is in Denver. Yeah, I know where I was. But anyways, he was in he was in India. And he was talking through growth that was going to be there. Matter of fact, we met him right before the pandemic is February 20 2020.
James Thomason:episode five kids.
Dean Nelson:Bam. So he predicted a number of things there. cooking it up. Here we go. Chuck James, there's another one for you, Mr. Lightning Strike. But he was talking about to the entire country had 400 megawatts of capacity total or something. So if you think about this joint venture, then you think of Adani group that went in with edgeconnex. There's just the money is flowing in India, like we were hearing about over a year ago. Now. It's really it's really turning up.
Brad Kirby:Yeah, there was a report. I think that I think jL put it out. They projected it to be one gigawatt by 2025. So like over like 21% guy here for a year per year,
Dean Nelson:which doesn't make sense to me. Think about that. If it Okay, 400 megawatts today. A gigawatt by 2025. We'll have a gigawatt next year. No, no,
Brad Kirby:I it's gonna it next
Dean Nelson:year. Yeah. Right. How can it not be at those sizes? When you have these kind of companies coming in? I mean, digital is the largest data center portfolio in the world. Yeah. And then right. And if you think about who else is going at, well, Google, Microsoft, Amazon, Apple II, they're all going into India, with significant capacity.
Brad Kirby:Yeah, yep. Boom. So that's an underestimate.
James Thomason:Okay, so speaking of building out infrastructure, political ran an article saying can 5g pay for infrastructure, there's been a few of these deals in the past where they've auctioned off spectrum somewhere and for a few billion dollars here and there, then use that to pay for some part of a spending package. And they're contemplating that now, I guess, with the so called infrastructure bill, which I can't keep track of anymore. First, it's 500 billion, then it's 693.2. And I don't know, it's gonna be around a nice round number between half a trillion and a trillion dollars of, of infrastructure stuff. I think when it gets all done more than a James a suggestion is, it's more than 1 trillion or we know this stuff. It's Yeah, it's over 2 trillion. Just 2 trillion, but the infrastructure stuff actually isn't. It's like it's okay. Okay. It's half a trillion plus a whole bunch of work for other things. It's a pork. Yeah. Yeah, a whole bunch, a whole bunch of stuff that has nothing to do with infrastructure at ait. So calling it the infrastructure bill really is kind of a misnomer, as should be. The other stuff, but also infrastructure bill. Okay. So the problem with this is like you it's a one time deal, if you actually spectrum you get a few billion dollars, and it's a one time deal. I think they're sitting on a resume, all government, all the feds and all the municipalities are sitting on a vast, untapped trillion dollar reservoir of revenue, and it's called data. So I kind of wish we would stop screwing around with things like license fees that just create barriers to entry into markets, and just start figuring out how like who's going to own this reservoir called data? So when it when a tax dollar gets spent on a piece of infrastructure for a municipality, who owns that data? Is it the taxpayer? Do we have rights to it? Is it the municipality is it the federal government like where are the line is drawn and this is raised the series one of the biggest problems that's impacting the Smart Cities landscape is this data ownership problem and data governance and and who can get access to it but in In short, if cities states and the feds can figure out how to monetize it. The data is so rich, and they're the only because they're the only ones who have access to it. I think it's maybe we could forget about taxes after maybe two decades from now, the government will just monetize infrastructure and data and not have to tax anyone, would that be nice?
Dean Nelson:That'd be pretty good.
Brad Kirby:I didn't expect that to come out of your mouth. To be honest, that's something like, I don't disagree with you, as usual. But this is like what China's doing, right? Like, they're obviously controlling data and monetizing it. And at the same time, if they have access to data, then you have all these privacy issues, and you get the big brother conspiracy theories coming in. I completely agree with you at the municipal level, though, like cities should be monitored, like they should be in charge of that it's within their jurisdiction. And all of the aspects and we talked about this on previous episodes in terms of how they can monetize it. But at the same time, you don't want them to impede growth or or innovation. So how do you how do you find that balance? Where, yes, there's that, that oversight. But I mean, I think my data that I generate is mine, I should own it. So there's that aspect of it as well, and I should be able to sell it. That's Zuckerberg
James Thomason:agrees that your data is his and he should be able to sell. That's not what you said. That's not what you said.
Brad Kirby:He makes you think that because you can download it in a click all the social media platforms,
James Thomason:the pataky pataky. Is that Do you see any sort of blurted out in a news conference the other day? offhandedly? That Yes, they were working with Facebook to censor data that they didn't like, which was a major trigger warning for the free speech loving people of the world, like myself and others is like, did you Pardon me? Ma'am? Did you just say that you were you're using Facebook's web experience to flag content that the government finds objectionable and have it removed from Facebook? Oh, you did say that? You did say that. And this was in a discussion about potentially misinformation around topics concerning COVID but we know how this goes right if you can censor one topic and find one topic that objectionable then you can censor whatever you like. So I was unsurprised yet also deeply disturbed that they just, that's just all on the table. Now, you know, we are actually censoring basically, Facebook's of the vision of the government. And they're allowed to continue to operate because they do things like make it convenient to censor content. Okay. Having dispensed with that, did you guys see that? No, I didn't
Brad Kirby:know. I know there's been a lot going on with with Biden and disorders. And some Sherm is all interrelated with the cocktail and big tech. But that's definitely counter intuitive to everything that we saw
James Thomason:the press, the press secretary is littered with actual quote was, were flagging problematic posts for Facebook that spread disinformation. Waitwait is an incredibly dangerous thing to do.
Dean Nelson:Hold on. That's a little different than what you said, though, isn't it?
James Thomason:I gave a quote, I wanted to make sure that I, you know, didn't know what she said, I want to give her actual quote. But that is that is the actual quote, this is a video clip of this, I think was pretty well spread around as a White House press briefing. I think it was yesterday, around this time. It was making the rounds on social media. But that's what she said. She said she was flagging various agencies are working with Facebook, and flagging problematic posts, as she was speaking in the context of disinformation around COVID. Right,
Dean Nelson:right, right. Right. Okay. But what you're saying is you extend that out and say that if they can flag something that they find as as not correct, then that could be spent
James Thomason:on the same side with problematic is they do well, it's okay.
Dean Nelson:It's the judgment, then.
James Thomason:No danger of politics creeping into that. Right. I mean, or other agendas, like creeping into that. So I, I find that's a very dangerous thing, potentially dangerous thing to have going on, right in front of us. So it's kind of akin to saying, well, the New York Times has given editorial control to the government. That's what it is. The New York Times has given that story. I mean, if you saw that, we saw that headline, you probably be more concerned by the New York Times has given editorial control to various government agencies, just to make sure that there's no disinformation or anything else that we find problematic in the New York Times journalism,
Dean Nelson:I think there's there's one distinction there. editorial control means that they are the decision maker. So who is the decision maker? When it comes down to the information that's going on? Or not going on on Facebook? Is it the government? Is it Facebook?
James Thomason:That's that's a great question. And, and a muddy and a muddy one, too. And I know, I don't know the answer, because I know that Facebook has its content committee, and I don't think that this type of decision is something that get raised gets raised to the content committee. So there's another process in effect here where they're able to flag content in some way and have Facebook review at probably right right. And they're they're mutually agreeing, wink wink, you know, to censor things that they find problematic. And I've brought this up on the podcast before it really is. Facebook has control over billions of eyeballs, they have unprecedented control over media. We've never seen anything like this in the history of humanity. And so I find it deeply disturbing that there is a special web portal or whatever interface to go in and for the government to flag things that they find problematic. Just as I would be if they were flagging problematic content on a New York Times, or Washington Post or pick, pick your news outlet of choice. I find that deeply problematic.
Dean Nelson:With great power, bam, comes great responsibility. Bam.
James Thomason:And while we're straying into politics, Biden's antitrust executive order is being called a wake up call for the tech industry and big tech companies. I'm not sure how much teeth it actually has. But one of the things that's embedded in here that kind of caught my eye was a whole section on right to repair, the administration is calling out the right to repair your devices and technology as a burden that is disproportionately felt by the economically disadvantaged in the country. And I sort of feel like, okay, but how does right to repair even work in a world where the components are soldered to the board. Now, in the good old days, if your RAM module went bad in your PC, while you just open up a chassis, pop out the chip, pop in a new chip and call it a day? Now, if your crappy laptop has bad memory, well, your your SSL, I mean, the whole board has to be completely replaced. And you're gonna have to source that original component from Apple. So I'm not sure that there's a cost savings in intermediary, you know, doing the doing the parts swap out, or you're different than Apple's dealer network or already licensed repair network, right. And that's, that's a pretty specialized thing to go do to swap out an entire board like that. And a component that's really easy to break. I don't know if you've ever opened up your newer MacBook Pros, but like, it's not all that difficult to sort of screw it up and destroy a ribbon cable or force open the chassis in a way that the denzin devices that I'm not sure that we can repair this stuff anymore, like I can't even repair, I've looked under the hood of your car recently, is it I've got a car that's a BMW that right now intermittently won't start eight out of 10 times you get in the car and crank it up, it'll start up two out of 10 times it won't start and you have to go away if they get physically away from the vehicle. Because the RFID sensor in the key enables the fuel injection system through proximity. So you can even be near the thing that continues completely resetting go dormant for you come back to it. And this is a problem that is in one of the control units in the car, of which there are like a dozen. And so this thing has been announced in and out of dealers and mechanics for weeks. And nobody I mean, nobody knows what to do. Other than maybe push it off of a cliff and hope that the insurance company picks up the tab because each one of these control modules is like 1000 to$4,000 just for the component. Yikes. Nobody knows which one it is so
Brad Kirby:enchanting. The Grand Tour guys would empathize with you you know the guys from the Grand Tour like Jeremy Clarkson and company they didn't they didn't episode on electric vehicles and how things were broken in them no idea how to fix Well,
James Thomason:that's exactly where I was going. Like how does right to repair work with like Tesla?
Brad Kirby:Yeah,
James Thomason:what are you gonna do? Exactly,
Dean Nelson:I guess I'm kind of confused when it says right to repair explained more to me what that actually means.
James Thomason:Okay, what they're saying is that right now, if you do a repair outside of the manufacturers restrictions, which are I agree, somewhat arbitrary, they will void the warranty for something. Okay, if you break let's say you break in streaming the extreme example let's say you break the screen on your iPhone and go take it to a strip mall to get it repaired. You know, Apple could maybe void your warranty for getting it repaired outside of Apple's official sure official network. That's I think the initial focus but it's getting, it's getting to where like all these other repair shops and stuff has kind of disappeared off the face of the earth because you can't really fix anything anymore. I was using my car's history. I can even fix my my damn car, much less a Tesla. I don't know what you would do do something that's deeply integrated.
Brad Kirby:The Grand Tour guys got sued by Tesla for the first time they said something negative about
James Thomason:well, the next week podcast I'm sure we'll be getting a call from now. That's okay. Like it's Richard Hammond with Dr. evil's legal team.
Brad Kirby:Yeah, we don't have 5050 we don't we don't have 50 million viewers either. But
James Thomason:Mr. bigglesworth I don't like what the next wave is saying. Mr. Big Oh
Dean Nelson:yeah, I just just to help out with that one. I love my Tesla. It works great. So I work yeah, that helps. Okay, yes, we are we endorsed
Brad Kirby:his second review. He had five lawyers in the back of the Model X while he was doing a review and they were there to stop it. Episode You got to watch it.
James Thomason:No matter what. You go to North Korea and they give you a minder to keep you out of trouble. And you're like if I take a photo and the guy shakes his head? No. Yeah,
Dean Nelson:I do know what's wrong with it. I do know what's wrong with your BMW though James.
James Thomason:It's not a Tesla. No, no,
Dean Nelson:no no it has to do with I think that you go up and shock it every time because you get lightning strikes so you know you just walk out of the car and it fries the board so it's you, you are that you are the magnet.
James Thomason:I do have a massive amount of ESD I've always had to ground myself when working with circuitry because I will zap it
Brad Kirby:you need to share it you need a Faraday cage you gotta work inside one of those gonna be gonna be well grounded or like
Dean Nelson:something that dissipate the energy of James Thomason that's what it is. He needs a
Brad Kirby:grounding cage with like a gloves yeah grounding rod I can use
James Thomason:Okay, so headline at&t and Boingo are expanding millimeter wave 5g at us airports. I think we should talk about this a little bit because I want everyone to know that doesn't know already that 5g is basically a lie. When you go buy a 5g phone, what you're paying all those extra hundreds of dollars for is like a logo that shows up on your phone. It's really running LTE in the background, but updated to give you a 5g logo. That's basically the difference. If you get a higher bandwidth, you're getting a higher LTE bandwidth. There are preciously few 5g sites that are actually running millimeter wave meaning a higher frequency higher radio frequency which facilitates the lower latency and higher bandwidth. So unless you're in one of the handful of locations with millimeter wave, your 5g is basically live at so at&t, I think calls that 5g Plus is that 5g is 5g plus way of saying that it's really just 5g.
Brad Kirby:Okay, but I mean Coover, but I'm in downtown Toronto. I've never seen 5g. I only have Lt. Yeah, so daba downtown Vancouver when I when I got this phone last month, it said 5g but it was not 5g speeds. So there we go. Depends on the towers by the tower and
James Thomason:exactly by the tower itself.
Dean Nelson:And this was not a 5g on my phone, right? The at&t phone. I've been a customer for 25 years. And when I'm in the Bay Area. Oh, yeah, by the way, I'm not the Bay Area. I'm in Hawaii. When I'm in there. It's always that I know it's a terrible life 5g. We talked about this a podcast before, right? Yes, we did a complete farce that that's like 5g, it's basically the E is for experimental. And they put it out before 5g was even lit up anywhere. Right? It's just so that's what you're talking about. James is what's really behind that is is LTE. Right, but their experimental
James Thomason:protocol changes. Yeah, that there. It's that entire inverted pyramid of Baroque legacy protocols.
Brad Kirby:And to quote john Cowan, who
James Thomason:was quoting someone else, San Francisco and San Jose, both have on at&t, for example, they both have what they call 5g plus sites, but they're precious and few and far between. And we're talking like trillions of dollars of infrastructure that still has to be built and spent. So I wanted everyone to know that that's just a lie. And but when you see these things like these announcements like the one from at&t that says that they're going to go together with blingo. I do 5g enabled sites, I think those are actually going to be 5g Plus, right. I hate calling 5g, just real 5g real sites that are fast because Boingo has all these hotspots. They have a pre existing relationship with at&t. I think that's pretty cool. And by the way, Boingo is kind of a sleeper company in the edge arms race. In my view, they've got I think 30,000 plus locations, and quite a quite a significant footprint. I mean, in theory, edifying those edge washing those with computing and other resources, and enabling with 5g that's that's got to be on the roadmap, clearly has to be on the roadmap. So sleeper stocks won't go
Brad Kirby:public. Today, probably north of the border, the largest ever spectrum sales going on auction, it's expected to raise $8 billion, which the equivalent sale in the US raised 80 billion. So on a populist basis, it's about the same extent. So part of it is they don't even own the airwave to put even if they had the tech installed, the spectrum isn't, can't utilize it yet,
Dean Nelson:hasn't been so this has always been the question for me. So there's the you think of radios and the equipment that's actually going to be at the locations and then you think of the spectrum that's going to enable those things to be able to have the performance that everybody talks about? And then you think of the sales of that spectrum. That's what you're just touching on Brad, right? Yep. And the government is, is sitting on a huge amount of that spectrum from what I understand. But if you think of T Mobile and all these folks that have these commercials out about the most 5g coverage that that have, like, when you say it's a lie, James, right, there has to be something is it just that they've gotten this stuff installed to a certain point, but they don't have the spectrum and they plan to expand the spectrum or basically turn up the spectrum to be able to do that? Or what is it that's going to now say this moves across into truly having ubiquitous 5g capabilities
James Thomason:live? We're talking about radio swaps here. I mean, that's in different different antennas and also just densification Yeah, cuz these these higher spectrum stuff doesn't flat out doesn't work to penetrate buildings and sometimes even play glass. So there has to be additional infrastructure put down really at street level to densify. The coverage. They're also opening up new spectrum. So that's happening as well. But it's really an infrastructure build our products account, it's a capital problem. Because the densification is to really make it work is astronomical in terms of the overall cost and we want real under 5g like real 5g millimeter wave for like decades.
Dean Nelson:Okay, and explain that a little bit, though, when we don't have real 5g. What is the difference between that and what we will have in the interim?
James Thomason:Yes. So what's happening is that they are, they're making LTE faster in various ways. And calling it 5g, you know, because it's a next generation speed, it is a speed boost. But it's still LTE, its LTE plus, and it's running yet it's running on that's running on a lower frequency. Okay, it's not millimeter wave. And so you're not. And one of the ways you'll notice the difference apart from just bandwidth is that the latency of course, is higher on the on the lower frequency. Sure. So you're not gonna get true latency without millimeter wave laws of physics apply, right? So you're not going to get a whole lot of bandwidth without going higher in frequency as well. So again, avoiding the laws of physics, so
Brad Kirby:so I don't think you actually need a 5g. Last episode, I talked about how there was some innovation, you could take a 4g phone and use a backscatter radio connected to that infrastructure, that's densified. And that would in itself, Creek give you 5g speeds, right? So I don't care what the technology is. But as long as I get those speeds,
Dean Nelson:but it's it, there's a combination of things here, you've got the speed, the bandwidth itself, yes, I should be able to get 100 times more bandwidth, right? When it comes down to it, but you need 10 times more towers. And that's because of that, right? frequency, correct. Right? So and that's running
Brad Kirby:into higher cells and those cells and
Dean Nelson:right and so and then from there, those are the ones that have a problem penetrating concrete and everything else. So So you've got to have this stuff distributed out. And we I mean, we're working on stuff on this right together with the economy is doing this stuff at the edge. So you will be able to have these, these things out there. But you know, I've had these conversations around, you know, you can turn up an LTE radio antenna and just create your own private LTE environment today. And that's not a, that's not a heavy lift, like that's a pizza size box thing that would be able to cover, you know, a pretty good city block with LTE. But again, it's only at that frequencies speed. And it's only that many concurrently connected devices comparatively to what 5g will be. So what I'm curious about though, is that we have so the stuffs starting to roll out there are people putting ads things everywhere. There are carriers investing lots and lots of money to in this edge race, this arms race of who's going to dominate within the network space. I'm challenging a bit James on this one, when it's a lie. I'm just wondering, what is it that's actually not there? And when will it be there? I'm not clear on that.
James Thomason:It's not just me. And by the way, I mean, the Washington Post called 5g li directly I mean, it was literally said 5g is why the Wharton School Professor Kevin werbach said the race to 5g is a myth. There's a lot of other people who've looked at it technologically and just realize that basically, this is a relabeling of today's infrastructure is something new and revolutionary when it's not. And a lot of cases in an area where if you're running 5g and you're seeing I look, I'm getting a couple 100 megabits download. If you switched over and use the 4g LTE phone, you do the same thing. It's the same exact infrastructure, right. So true 5g requires new radios, antennas and devices. It requires different protocols and standards that relate to how the signaling is carried out between sites and where it also relates to how data is back also today. Like in the 4g networks, data is trombones, meaning, you're basically backhaul over a VPN to a central data center or egress point. And which also slows down your your traffic, right? Because you might conceivably take a more direct route from source to destination traversing the internet, if you were able to address the network right then and there, where you're where you're standing, sir. And that kind of traffic routing doesn't even really become possible until you've swapped out the old stack for the new stack. In some places, they're running both stacks in parallel, but in all cases, you know, going millimeter wave as new as new infrastructure, new metal, yep, new antennas. That's the lie, right is like it isn't like in the when, when we saw a 4g rollout, right. It was a lot closer to customer expectation, like this was new gear in the same towers. Right. But because of the densification problem, this is more about having to bring the Pico cell sites down to street level. And so if you go into a city where there were real 5g exists like San Francisco, Los Angeles. And by the way, not the whole city, just certain areas of the city, you can see the densified infrastructure, you'll see it because it's heinous, you know,
Dean Nelson:it's ugly. Since NRA
James Thomason:is being mounted to telephone poles, it looks kind of like it's reminiscent of when the utility infrastructure was new in the United States in the last century, when electricity was new, and how, how ugly that was, and beautification. And standardization of the stuff is a big concern for municipalities, they're very worried about infrastructure sprawl, and how it's how this is all going to look. And when you look at 5g, like it is ugly, I mean, it is noticeable. And so I just, it's gonna take a long time, really, because of the capital required to deploy that new infrastructure. And that's, we know, obviously, a part of the projects we're working on, solving the capital constraints, technologically is something that has to be done as well, and no one has, no one has $60 trillion dollars laying around to go repave all the infrastructure and properly densify, it's going to have to be done through shared infrastructure by creating economic opportunities that don't exist today. There are technologies like neutral hosts I've ever heard of. I know you've heard of neutral host, probably the audience doesn't know what neutral host says. But this pertains to 5g, it basically allows increasing coverage in areas where towers that are owned by your carrier network may not be available. And so you use a private party, let's say, as a private entity could stand up wireless infrastructure, and the rest of the subscribers could Rome's your infrastructure. Yeah, so that's neutral host is starting to get widely used in Europe, but it's not being used at all in the United States yet. And that's because of the effective monopolistic nature of the carriers here in the US and Canada since the government actually ordered because of the oligopoly that exists here is exactly that. And so that's what's going to take, that's what it's going to take here, as well as to say, hey, look, you guys, you're starting to remind me of ma Bell a little bit. So let's go ahead and use neutral host and get get this infrastructure built. I think part of the I haven't seen anything in the infrastructure spending package yet, but I have a feeling based on the executive orders that have been coming out that this issue is going to become a heightened awareness of this issue in like in the next year, because it's really a blocker to 5g. Yeah, this
Brad Kirby:happened around 15 years ago in Canada. I was working at Rogers when it happened still, I think it was 2005. And I remember exactly what happened because I was selling. So selling at the store and that and then all these little carriers come out and salt. So it's a bunch of neutral hosts now. And the government actually sets aside spectrum for smaller players as well. And these auctions.
James Thomason:Yeah. If you just think about, okay, well, how many carriers are there? Well, minimally, we have Verizon at&t T Mobile dish, right? So if all of those need to densify if all of those companies think that they're going to put new antennas and different frequency, right, up and down the streets every few 100 feet, right? Every 1000 feet? What what would the cityscape look like if that really happened? And so it looked like Blade Runner? Yeah, absolutely. Yeah. So technologies like neutral host app are absolutely necessary to facilitate the real 5g. Okay to G however many G's you want to when we get to 5g, they'll probably call it a G or something. But right,
Dean Nelson:somebody's going to go to 10 g just just to be different. But the reason I was pushing on that a little bit is just just to help the audience understand here that there's a transformational type thing that has to happen. Like you said, the technology blight that's out there, it's going to be coming because of exactly what you just walked through, can't happen. And cities aren't gonna let that happen. Because you're not gonna have 13 cameras on top of every one of the poles, right, and all the other boxes all over the floor, or on the ground, you've got to consolidate this. And this is again, why we talk quite a bit about the autonomy Institute and the standardization and what pins look like because it now weaves into the land, the public landscape, right on the city landscape. But I think the thing that will do this is that public private partnership, you talk about the money, somebody's got to invest who's going to invest in what like the cities are gonna play a huge part in this. They have to it's their, it's their land for sale, right. But then it's the city side, you talked about data Jas, where I think we've talked about this before, too. They don't want to manage the infrastructure because then you've got the data access rights, and they don't want to be in the middle of that they want to be served by somebody to do that. So they can remove that. Yeah,
James Thomason:they also just doesn't just can't in most cases, I mean, they need the infrastructure. In a city if you look at something like the ITS, the traffic systems, even the water and electrical systems, these are all subcontracted through other monopolies or oligopolies, right? And what they are doing is using their administrative purview to set the standards by which those utilities may be provided within the city. Right and what the standards for those utilities are. And so you know, in California, we have the the CPUC, which is arguably a useless governing body with pg&e, everyone's favorite company, pg&e when they burned down the state. But, you know, these standards for which you make EPA participate in the grid, they're governed by CPUC. And the standards and rates for which you can sell those utilities, consumers, but then each municipality separately, you know, sets the regulations and standards for what this stuff has to look like. And you'll notice it when you drive around, say, the Bay Area or to Las Vegas, I mean, the infrastructure looks different, right? So it's, it's a complicated world to get this stuff working. But you really, and me, being a small government, libertarian minded person, this is one of the rare areas where I see government having a particularly important role, because there really is no other structure for everyone to reach agreement on these areas that involve all of us that you know, that all affect all of our property, values, quality of life, etc, etc. Right? So it's, it's one of those areas where I think the government has to take the lead. And by the way, I would
Brad Kirby:Go one level higher and even say, like, IESO if you look at the PNJ, like Pennsylvania, New Jersey, area, like that's IESO and even in Ontario here, they converted to IESO from Ontario Power Authority. So it's all interconnected on in terms of standardization and being on the grid, because you've seen the rolling blackouts that have occurred up here in the Northeast? Obviously, you guys are familiar with them down in California as well.
James Thomason:Rolling blackouts? Ya we did!
Brad Kirby:Those don't exist. Those don't exist anymore here. So it's almost an international collaboration that involves all levels of government.
James Thomason:I can't believe that we live in the United States and great companies like Generac are making a killing selling secondary power systems to home consumers, because people are losing their power in the summer here in California due to the extreme heat and the fragility of our grid. But any case, it's gonna take decades to see real change in 5G, it's gonna happen in major municipalities quick.
Dean Nelson:Right, right. Everybody wants this, you know, but I guess that's what I'm asking. James is like, so when you say decades, I agree, there's gonna be a ton of money, that has to rollout and a lot of trenching and building and everything else to make this happen. But the Smart City initiatives, the technology itself, and then this public private partnership and the demand, all these things add up into acceleration. Right. Would you agree as long
Brad Kirby:As long as it's not burnt and spent on infrastructure that goes nowhere because the FCC defines broadband at 25 down and 3 up? That's the definition of broadband internet.
Dean Nelson:Shoot me in the head.
Brad Kirby:That's... it's like horse and buggy sht, right? Sorry, pardon my French but like, that's insane. We all have gigabit download, right? Like,
Dean Nelson:Not all of us, Brad.
Brad Kirby:Anybody. It's on fiber.
Dean Nelson:Remember, I live in a third world country in Silicon Valley. And I get my 25 megabits. Yay.
Brad Kirby:You're up in the hills. Oh, come on.
James Thomason:You can even upload the podcast.
Dean Nelson:Yeah, it depends
Brad Kirby:I haven't been to your house!
James Thomason:Yeah, well, other times he has to drive us to drive it to me on a USB drive. It's really it's really sad.
Dean Nelson:Yeah, it's a lot of floppies actually. But
James Thomason:I agree that the the impetus is there, the desire is there, where there's a will there's a way where there's money, even more so. And there's a lot of what's going to Genesis, this really is there's a lot of money in this for everyone. It's a brave new world of spending when it comes to rebuilding this stuff. But the other thing is that, increasingly, this is a national security concern. Yeah, a lot of our infrastructure was fairly hardened, because it was non digital. And the moment you take it to digital, it becomes an attack vector, as we're seeing with the ransomware attacks, the oil pipeline shut down. And as always, security is like the very last thing people think of once they've they've built something as they go, we should have probably made that real secure, the security landscape is getting worse, right? So I think the remember, I don't know, five or six podcasts ago, after the election, I said, well, Biden's gonna get an office immediately kill the Trump clean network initiative. But they did they just but they basically just took down the website and the clean network initiative is alive and well. It's just not called that anymore. And whatever they're gonna call it has not been unveiled to my knowledge yet. I keep keep looking for it. But I think it's going to be part of this. As soon as this infrastructure Bill is passed, I guarantee you a huge piece of is going to be securing our critical infrastructure against our military adversaries. That is a huge wedge to drive over all the municipalities so once there's a federal mandate, both to digitize and to secure and there's federal dollars sitting here that's what's going to, I hate to say it, you know, that's what's going to swing the pendulum. But that's and I hate to say it. I think it's gonna cost I think it's happening this year, I think Yeah, when this package goes through, I think that a lot of the red tape is gonna get cut because it's a use it or lose That situation and you got to get those precious infrastructure dollars. Right? Right. And if you're a municipality and you want those federal dollars, you're going to have to get on board with the program, so to speak. But it really is chaotic. I mean, just working with the standards bodies, and all the projects were tied into, at EDJX, it's, it's really chaotic still. So I don't see that changing. The will is there right. And again, they'lll spend money and get things going. But it's just going to take the better part of a couple decades to conduct this transformation.
Dean Nelson:Unless there's a forcing function. And that forcing function for me is going to be money to be made. And so lots of people are going to now start to drive things for that because we keep talking about white flag moments, right? This is a land grab. So as you start rolling into these cities, whoever is going to start to go there is going to have a very unique position, it's kind of like having that corner store for a Starbucks, you're in the right place for the right things. And so this infrastructure starts to land doesn't matter if it's 5g, right kind of spectrum, or it's going to be computed on the edge, etc, you're in the right place.
James Thomason:So you're there for a long time, it isn't like they're going to rip and replace you, you know, a year later because the better technology came along, or for whatever reason this is, and that's one of the reasons it's so important. But also because proximity is important. So unlike, unlike the cloud, we all know and love proximity is increasingly important to reduce the latencies increase the bandwidth to do all the digital things you want to put out there. That requires real estate location, as they say, in real estate, location, location, location, location. And once you're there, you're there, the truck roll to get something off a light pole is impossibly expensive in the first place, much less than second place. Yeah. But it's a really exciting time. But it's interesting to see the confluence of all the different industries facing the exact same problem, like every, it's not just the 5g, the telco carriers that face the problem. It's every sort of digital transformation thing. So if you look in ICS, every vendor and ICS thinks they're gonna come into a traffic intersection and bolt something to a pole and install a computer in a cabinet. Right? Well, the cabinet has six amps of power and two rack units. So how's that gonna work? inside? It's flat out not gonna work, right. So you see, you see that mirrored and everything is like the push to build up, put up the critical infrastructure. And to make everything digital. Everyone is stepping on everyone else.
Dean Nelson:Yep. But it is, to quote Jeff DeCoux, the biggest infrastructure build out in history is upon us.
James Thomason:It is in the works. Everything that phenomenal. As I'm fond of saying, I told I told my wife, I would never start another infrastructure company. And there I am, because it's the biggest change. It'll be it'll be utterly transformational to every aspect of modern life. Yeah, I agree in the way that the electric grid was transformational in the way the telephone was transformational. In the way that the if you think if anything was something to see the internet and everyone getting a mobile phone in their hand, wait until everything around you is connected all the time. And I don't know. I don't know if it's dystopian, you know, I don't know. The Chinese seem to be going for a dystopia. I hope moping around here. You know, we steer the ship slightly differently. I don't know Pataki's controlling my Facebook posts, probably no one will. Yeah, I do. BAM! Okay.
Dean Nelson:I was thinking the same thing.
James Thomason:Well remote work has been the trend since COVID. We're a remote first company. I know a lot of startups were also remote first companies. And we have no plans to change that. Yep. And I've sort of been wondering what would happen. I used to say that when a company builds a headquarters, it sort of signals their downfall. And I think it's just it's a moment in time when a company has so much money is so cash rich, they feel that they can spend an obscene amount of money on a building because they have literally nothing else to do with their capital, nothing better to do with their capital. And Apple reached that moment, a couple years back when it built a spaceship. That's Apple's huge massive headquarters, which looks like a UFO in Silicon Valley. It's a very cool building. It cost in $5 billion to build, and it houses 12,000 employees, that's a way of saying that Apple didn't have any better use for it's capital than to spend $416,000 per employee on office space for them to troll around in. And then of course, COVID came along and they haven't even been using it. So the headline out of The Verge today was "Apple employees are saying it's getting harder and harder to request remote work requests, and the company is cracking down and demanding everyone get their arses back." Their sweet little arses is back in the office. And I guarantee you anyone who's built a headquarters in the last 10 years, that's how it's going to be. If you're a big tech company, you have a big headquarters or any of these companies have put all that capital out you can expect your little bot is going to have to be in a seat at work no matter what because they've sunk that cost nothing else to do with it. What are you going to do with a spaceship? There's there's basically one use for it and it's it's Apple's employees so there's there's nothing else to do.
Dean Nelson:I live in Saratoga and when I do my walks every day I go climb the mountain. At the top of the mountain. I can see the spaceship the Apple spaceship clear. It's So big. So I agree with you. I just remember Uber, Airbnb, Pinterest a whole bunch of the companies that have done, you know, big real estate deals in San Francisco, they bought out of all the leases when the pandemic hit because oh, yeah, I think they realized a couple things. First was that getting back in the office, the way it was, is going to be very difficult, even if it starts to shape up which is doing it now, you know, people are starting to do that. But also the surge of trying to find talent, if you do not have this option, you're going to lose that talent, the brand will only go so far. Because I would just say for Apple, if that truly is what's happening, there's a huge risk, because people can go to all the competitors that are great big brands as well and do some really cool and disruptive things. Because they have a flexibility in their quality life is better. That's a huge, huge thing to consider. Because I mean, the company is nothing without the intelligent. Right? Right, you know, the talent, who cares about the products, because the talents are the one that makes it happen. So you got to make sure that that talent wants to be there. And this is one of those factors, that's very different post pandemic.
James Thomason:So I think there's going to be a sharp division between remote first and non remote companies. And that's going to be like a major factor in your decision making when you decide to work at a company or not. And it'd be the first first question on the lips of many employees is like: Do you allow remote work? Do you encourage remote work? Is this remote first? Or do you expect me to spend two hours in my car each direction every day and sit in an office where I'm in a giant warehouse where I'm distracted from what I'm doing? Which is I guess my perception of going to an office? Interesting times, if you like remote first companies?
Dean Nelson:Yeah, there you go. On this actual podcast. Yep, you know, matter of fact, I was in Utah just a couple weeks ago, and I met my team for the first time. And we started from zero
James Thomason:Face to face?
Dean Nelson:And we actually had it but we have an office in Utah. But it's a shared office. And it was awesome. Wait, there's conference rooms, there's, there's everything, you got to feel like it was in a tech startup, you know, a Google office in Salt Lake City. But there's four of them all around the city, and you can just land and reserve what you want. So it's like, it's like a really good start. There you go. It's like a really good Starbucks with conference rooms. Like everything, everything you want there, right. But you can reserve that. So for us, the pandemic has been very valuable, because I now can go back and hire the talent. I don't care where they are, hire the talent. And the talent likes that because they can go get their balance and work on the East Coast, right? Or in Chicago or back in California, wherever they want to be. That's a huge attraction.
James Thomason:So I wonder if now, ironically, terribly, ironically, the WeWorks of the world would finally have their moment, right? Because
Brad Kirby:I think this is it, ya.
James Thomason:When WeWork was taking off. I mean, I sort of pointed to the obvious problem with their business, which is they have a duration mismatch. Yeah, they lease a building for decades. And they turn around and sublease it to someone for a day. Well, in that kind of situation, your customers can vaporize, and you're left with your 20 year lease. Right. So that's a massive risk of that business is the duration risk. I had said, when you're just looking at their financials that that they were swiftly on the way to bankruptcy several years ago, I guess 20..?
Brad Kirby:You and I were talking about it. Yeah, it was... 2018? Yeah, it was 2018. Or maybe early 2019?
James Thomason:Maybe it comes along and fixes the duration risk, like whatever landlord, whatever big corporate land owner BlackRock, or whoever comes along and fixes the duration risk for where these companies can expand a contract as they need to enter the space is going to solve a huge problem. No, I think it's gonna exist.
Brad Kirby:I agree. And I remember pulling up their S-1 and saying just that, the exact same thing, right? On that night, and the next day, I said, they're going bankrupt. Like, this is real estate financing 101.
James Thomason:We face the same thing in the data center industry, right, as data centers are the same, right, you have duration risk in data centers, where I think a lot of maybe data center retail investors don't realize that there's duration risk in that, because you can have a little company that signs a two year contract or a 10 year contract, but they can also just vaporize, in which case they leave your equipment in the colo and now you have to clean it up. Now you have in addition to a duration problem, you have an IT asset disposal problem on your hands. We certainly face that back in the dot com bust where Exodus Communications, my company went bankrupt, because we did not anticipate the duration risk and that's that's very real in the data center space. But a lot of this has to do with just the legacy way that people contemplate building leases and stuff and what if what if WeWork wasn't what they are today was just kind of like vertically integrate where they're taking the duration risk and paper? What if they could just manage the space? You know, so like, what if we work with like a next generation CBRE or something where what they do is they Maintain the building in a flexible state for the owner. And they maximize the revenue of the building by allocating the resource effectively, but they don't themselves face duration risk. And I think that's whoever does that is a genius. If it's CBRE if it's one of these other big companies that transform JLL, yes JLL,
Dean Nelson:Well, this comes down to I think they need to cloudify real estate. They the whole point is you can go spin up, spin down, whatever, but the bulk of all those makes for really, really profitable business.
Brad Kirby:And that's how they got the valuations they did.
Dean Nelson:And one challenge on that James, boy I'm challenging you a lot on this podcast, the difference today from the dot com bust is that there was so many small companies that with with ideas that just didn't make any sense that had massive amounts of money behind them and buying tons of things and signed up for these contracts.
James Thomason:MyToothpaste.com?
Dean Nelson:yeah, WebVan.com? I mean, anyways, the whole point is there was a huge influx of that irrational exuberance and
investment and all of a sudden:Pop! There it went, the bubble burst. Today, half the capacity in data centers is cloud-based. And so they want 10 to 15 year contracts. So there's that that's the anchor for so many of these REITs. But that's also the limitation for those REITs, in the real estate structure, they have to have long term contracts, and they have to have occupancy for what that is. That's not flexible. So whether it's office space, or whether it's data center space, providing that flexibility is going to disrupt the other players, mark my words.
James Thomason:I totally agree. Yeah, I totally agree. Yeah. Well, folks, we're at the end of our hour and we thank you so much for listening. If you enjoy shows such as this one where we talk about the latest trends, news, and technology, please do give us a like it helps us grow our audience. We are sponsored Of course by infrastructure masons uniting builders of the digital age, learn how you can participate by going on the web,
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