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Also, I did have Tesla that they invested in Tesla, and I have one other that is kind of surprising that they own a good bit of. A good bit of. Excellent. Do you know that one? Snap. Snap. Yeah, oh yeah. Tesla, there's. Tencent is everywhere. Welcome to season three, episode 10 of acquired. The show about technology, acquisitions, and IPOs. I'm Ben Gilbert. David Rosenfeld. And we are your hosts. Today we are covering a company that Wikipedia describes as a Chinese multinational investment holding conglomerate founded in 1998. Of course, this is Tencent. All of that and so much more. All that. And a bag of chips. And a bag of chips. And the 12% stake in Snap. David. We'll get to that later. Spoilers. Well, so what is Tencent besides that very long definition that feels conglomerate? Well, first off, they're notoriously bad at PR and they actually talk about this as a company. You probably don't have them in your mind as one of the world's most important companies unless you're in gaming or maybe social media. So starting off with that first, Tencent is the world's largest gaming company. They are a game publisher and they take most of their money from games. It's where they make most money as a company, but they certainly didn't start this way and we'll dig into that in a minute. Tencent rivals Facebook for the world's largest social media company. It is the world's largest music service that actually IPOed this week with over 800 million monthly active users. That music company that just IPOed on the New York Stock Exchange on its own has a $21 billion market cap of which Tencent owns most of it. They raised like $1.1 billion in their IPO, so just a little blip on the radar of all that is Tencent. Last year at one point before their stock fell, it had a market cap of half a trillion US dollars. In this year's WPP brand rankings, it has the fifth largest brand in the world even ahead of Facebook, David. The brand stock in one of those is falling right now. The other is, I don't know if it's rising, but it's not falling as much. This company is a juggernaut and I could think of no better way to wrap up not only our China mini series, but all of season three. There's going to be so much back and forth through this episode between Alibaba and its founder Jack Ma and here now Tencent and its founder Ponimah. They're very different as are their companies as we shall see. Well listeners, we want to let you all know about our latest limited partner bonus show topic. So last week on the LP show, the topic was the art of pitching your company for investment and how to craft the narrative. So we had a blast doing this. We got to share a bunch of personal experiences. Super fun, David, to be able to kind of branch off of the standard format and dive into topics like this. If you want to listen, you can become a limited partner by clicking the link in the show notes or going to Kimberlite.fm slash acquired, which is of course also on our website acquired.fm along with our Slack. We're turning into Tencent. We're a media empire of properties here. My gosh, I know. We got to start sub brands. We need to reach out to our QQ. Yeah, or maybe a penguin mascot. All right. Our presenting sponsor for this episode is not a sponsor, but another podcast that we love and want to recommend called the founders podcast. We have seen dozens of tweets that say something like my favorite podcast is acquired and founders. So we knew there's a natural fit. We know the host of founders. Well, David, Senra. Hi, David. Hey, Ben. Hey, David. Thank you for joining us. Thank you for having me. I like how they group us together. And then they say it's like the best curriculum for founders and executives. It really is. We use your show for research a lot. I listened to your episode of the story of Akio Maria before we did our Sony episodes. This incredible primer. You know, he's actually a good example of why people listen to founders into acquired because all of history's greatest entrepreneurs and investors. They had deep historical knowledge about the work that came before them. So like the founder of Sony, who did he influence? Talk to about him over and over again if you do the research. But I think this is one of the reasons why people love both of our shows and there's such good compliments is on acquired. We focus on company histories. You tell the histories of the individual people. You're the people version of acquired and where the company version of founders listeners. The other fun thing to note is David will hit a topic from a bunch of different angles. So I just listened to an episode on Edwin land from a biography that David did. David, it was the third, fourth time you've done Polaride. I've read five biographies of Edwin land. And I think I've made eight episodes of them because in my opinion, the greatest entrepreneur to ever do it. My favorite entrepreneur personally is Steve Jobs. And if you go back and listen to like a 20 year old Steve Jobs. He's talking about Edwin lands my hero. So the reason I did that is because I want to find out like I have my heroes. Who were their heroes? And the beauty of this is the people may die, but the ideas never do. And so Edwin land had passed away way before the apex of Apple. But Steve was still able to use those ideas and now he's gone and we can use this idea. So I think what requires doing what founder trying to do as well is find the best ideas in history and push them down the generations. Make sure they're not lost history. I love that. Well listeners go check out the founders podcast after this episode you can search for it in any podcast player. Lots of companies that David covers that we have yet to dive into here on acquired. So for more indulgence on companies and founders go check it out. Well, before we dive in David, I think we have a little bit of follow up from the netflix episode. Do we ever a glaring omission from our Netflix two parter. So do you do you want to do it? We're keeping everybody in suspense here. One of the coolest things about our our little mini Netflix series was learning about the spinouts from from the company. Of course, of red box and and Roku and several listeners wrote us after they listen to part two and said, guys, I was waiting for the third spin out quote unquote quasi spin out and it never came. Not not in the shareholder perspective, but in the people that left and were instrumental in building Netflix and now we're building something else and building something else. And of course, we were totally remiss movie pass. How could we have missed it? The only like the the meme, the company everybody loved to love and hate on in 2018 was founded and is run by Mitch Lowe who the one and only the one and only not only original Netflix executive, but then red box president. And now, see your own founder of movie pass in battled movie pass is founding just keep getting worse and worse. So I'm thinking maybe this should be the last one. Hey, I products market fit. I mean, customer demand is there. Yes. Yes. Boy, you can sell dimes for nickels at insane rates. Insane rates. Insane rates. So we apologize for leaving that fun bit out of the the history and facts for Netflix, but wanted to make sure to include it in the follow up. All right. So is it time? I think it's time. Let's get into 10th and I think starting with a couple of of thank yous to really great sources that we found for the episode and actually some some from listeners. I have three thank yous in particular. I want to throw out first to Bernard Liang in the slack in the acquired slack who is the host of the analyze Asia podcast also a great show recommend, especially if you've enjoyed our China mini series that you go listen to it. So he wrote us after we said in we released an episode of our LP show last week and in it we said we were going to be covering 10 cent today and he said, you really gave us a couple podcasts to listen to also said the canonical book on 10 cent is called 10 cent story. It's by Shoubo Wu unfortunately it's only in Chinese, but fortunately we were man we were able to find an English language summary on medium by Julia Wu. So huge thank you to Bernard to Shoubo for writing the book and then to Julia for writing a really excellent English language summary, which we will link to in the show. Then lastly on my end the China e-con talk podcast had a great episode with Matt Brennan is a we chat expert and analyst he was he was a guest on the show and just gave an unbelievable sort of blow by blow history of the development of we chat, which contributed to the research for today. And lastly friend of the show Brad Stone did an awesome piece in Bloomberg business week on 10 cent this past June. We got we have Brad back on for another show at some point David because he's he's a plus he is a plus. All right, so with all that let's dive in. So before we get to 10 cent and it's founder pony ma I think it helps a little bit like Netflix to talk about the geographical place where 10 cent is located and that is the city of Shenzhen, which is probably familiar to I would assume all listeners of the show at this point the quote unquote Silicon Valley of China. Yeah, anyone who's had an iPhone ship to them have probably seen this on their tracking. So in the China miniseries this season we covered Xiaomi, which is based in Beijing. Bidu is based in Beijing we haven't covered by do yet we covered Ali Baba, which is based in Hongzhou. But this is our first sent Shenzhen company so what's so special about Shenzhen and why is it the Silicon Valley of China. So it's in the south of China. It's very southern part of the country. It's part of the Pearl River Delta region named regional economic zone. It is located right across the Bay of Shenzhen from Hong Kong. So this is super important. The history is really interesting. So before the post-mau reforms in China and the kind of opening up of China and the introduction of the capitalist market system, the legend is that Shenzhen was just a fishing village. It was a little more than that. It was a market town but it was very small and fishing was one of the main industries there. The city itself had about 30,000 people and during the cultural revolution when things were really bad in China people go out to fish and they would just keep going in their boats and they'd go right across the Bay of Hong Kong, which of course was a British protectorate at the time. And never come back. Some people would even jump in the Bay and physically swim across. It was right on the border. I've kind of like the East and West and capitalist and Chinese communist party in the 60s and 70s. But after Mao during the reforms, of course, Deng Xiaoping takes over the party and he starts, this is probably the most radical transformation in world history, introducing capitalism to China. He calls it socialism with Chinese characteristics. You could argue this leads directly to acquire doing this mini series, which is the most important outcome of all. Of course we just. So Deng, when he wants to introduce capitalism, he wants to do it very, very slowly and in specific areas. And he picks Shenzhen as the first area where capitalism is going to be introduced in China. This is so special. Like think about if we try to do that in the United States, like, well, we're going to change this the economic structure, but we're only going to do it in this state in one city. It is only going to happen in San Jose or Bellevue. Like that is the equivalent here. It's pretty crazy. Yeah, I mean, it literally is like if you're familiar with the Seattle area geography, it's like Bellevue, right? Like there was Seattle, Hong Kong, and then across, you know, a body of water, there is Shenzhen. And so it becomes the first special economic zone where, you know, capitalism in the free market is not only allowed, but encouraged now by the government. And Deng has this famous quote about this where his concept is let some people get rich first. And that will kind of draw the rest of the country along. And that's what what starts Shenzhen on the path from 30,000 person kind of market and fishing village to, you know, people start flocking there from all over the country. First importing and exporting becomes a huge business there from Hong Kong and across the Bay. It's now one of the busiest container ports in the world. Then manufacturing obviously, which lots of people know about. And of course now, high tech. So today, there are over 12 million people that live in Shenzhen proper and then the Pearl River Delta region, which I think has about nine cities around it. It's all one continuous urban area has 60 million people. It's the largest continuous urban region in the world, which is nuts. It's like if you took all of California and you condensed it into like the Bay area or maybe the Los Angeles area is probably more comparable. It's great. So this is the soil that Tencent gets planted in. So in 1971, a boy named Ma Hua 10 is born in a small city in the province of Haidan, which is an island south of Shenzhen and Hong Kong. It is the southernmost Chinese province. He eventually adopts the English name pony, which is a reference to his last name, Ma, which means horse. So he is pony horse. And when he's 13 in 1984, his father gets a job as part of this great, you know, rise of Shenzhen gets a job as a port manager at a shipping facility in Shenzhen and they move there. Now Ma is super precocious. He's like a great student, totally excels at everything. He graduates from high school in 1989. He does knocks it out of the park like for I don't know if he was technically first in his class, but like top of his class in his college entrance exams, he could go wherever he wants. But he and his parents choose for him to stay at home and go to Shenzhen University instead of going elsewhere to better schools in the country, because this is 1989. And if you know your Chinese history, there's something else going on in 1989, which is the student protests and unrest. And they decided it's better for him to stay at home and stay in the special economic zone. So he goes to Shenzhen University, but he's super precocious. He majors in computer science. Apparently he originally wanted to be an astronomer, but that wasn't offered at Shenzhen. So everybody, the sort of talk of the town is that just like Jeff Bezos and Elon Musk, we might see pony as he moves into the kind of second phase of his life, get into space and rockets and be a Chinese version of these US tech billionaires that get into space. One surprise me, he's already he's moved millions or I think billions of dollars into his private philanthropic work. So yeah. So instead he studies computer science. And while he's in school, he develops a little app and this company that he's interning for, he's interning for Leaming ends up buying this side project of his for 50,000 RMB, which is like three or four years worth of salary of a new college grad at the time, not a bad way to enter the workforce contrast him already with Jack Ma, who's like doesn't do well at math. There was nothing about technology and can't code and is like making a living as an English teacher. He's already sold his first company. He's still in college. And Jack Ma, I don't think he'd already done this by this point, but another interesting contrast is was obsessed with Western society and ended up spending a lot of time in the United States. Pony Ma does none of this and I think he'd ever visited the US or gone to Europe doesn't speak English. So he graduates a bunch of his friends who are also at the top of his class, kind of want to stay and go on to graduate degrees, but ponies like no, I want to get out into the working world. I've already sold, you know, kind of my first project. I want to go make an impact and build things that people use. So he goes and he works for a company called Shenzhen Runchen communications. I may be butchering that. But that's his first job. New works in R&D and they're sort of like a telecom company. And so he's working in all sorts of advanced tech. One of the main things that they do is they make technology for pages. Pagers are like really big in China at this point in time. They're big everywhere, but especially in China where like PCs aren't really a thing yet. Like lots of people are using pages to communicate. And so that's kind of his first taste of like communications tech. Again, remember Jack Ma he has to like go on this crazy trip to the US to get exposed to the internet. Pony is getting exposed to it through his work. So he's one of the very, very few people in China that like even know the internet is a thing let alone have access to it. So he gets really deep in the early BBSs on the internet like the bulletin board systems and amazingly a whole bunch of Chinese entrepreneurs come out of this. So like again, the only people who have access here like people who are super geeks working at tech and communications companies in China. So lay June the founder who of Xiaomi and the previous CEO of Kingsoft who we discussed in our Xiaomi episode. He's on there on the bulletin board systems. Pony is hanging out with him. Also Ding Lay who would go on to start netties, which is another huge Chinese portal that we've talked about on the Alibaba episode. He's there as well. And so all these guys there all like starting companies as they see the internet company. Is there like a future billionaires BBS that they all sort of totally talking about what planes they're going to buy. You know how many rockets they're going to build. 19,000 square foot homes. Yeah, which I think you're referring to Pony has a very private secluded mansion in Hong Kong. Yes, Ma is like super inspired. He sees Ding start net netties and like he's like man I got to get in this game. So 1998, I think he graduated in 93 so he's five years out of college he reunites with his old college friends who had stayed and done graduate degrees. And they're finishing up their studies needs like guys we gotta we gotta do this the time is now we got to start a company. And the initial idea that he pitches them on remember he's working on page technology. Well, he's like we're going to develop internet services for pages. So like all these people in China they have pages we're going to provide like a better like mobile internet on pages. But I don't know if you remember in the early days of like quote unquote smartphones before you know before blackberry before the iPhone in in the US like there was this mobile internet. Yeah, the carriers had yeah, WAP exactly. So I think this is what the idea is. WAPs required sort of like a I guess not necessarily a color screen, but some kind of like actual dot matrix thing that you could display almost HTML on right it was like some janky images and really locality gifts and text that you could scroll. So I think like it's it's like a slightly more primitive precursor to WAP. So they start the company they need to choose a name and they come up with a tongue shun I believe is how it's pronounced a tension tongue shun which literally in Chinese means galloping message. Of course, his name is pony pony pony mom. That's amazing. I didn't mess. Yeah, and I was doing all this research. I was like where does Tencent come from and I've always wondered that it is the westernized version of tension. So galloping message there you should I'll send you a galloping message after the show we can talk about how we thought it went. Yeah, on on our many communications platforms. You can you can page me. Perfect. Well, two other things about the incorporation of galloping message. One 20 mile was 26 at this time. So multi hundred billion dollar company founded by by 26 year old. Not exactly this sort of Mark Zuckerberg or Evan Spiegel crazy early, but still pretty pretty pretty young. Still pretty young and his co-founders of course had just finished their you know grad degrees. Right, right. The other interesting thing that I caught was it was incorporated in the Cayman Islands. I don't know if this is exactly the same structure, but if you remember from the Ali Baba episode Yahoo couldn't invest in a Chinese company. I think it was that the Chinese company couldn't have it a major international shareholders. So there was a Cayman entity set up for Yahoo to invest in that then had a contractual relationship with the actual entity of of Ali Baba in China. It's interesting to see probably a slightly different thing since they actually started it as a Cayman entity, but sort of interesting to see that structure here. I assume they did this because they intended on raising venture capital. It's kind of like how you and I always start these Delaware corps. Yeah, exactly. It's the Delaware Corporation of the Cayman Islands is the Delaware of. Yeah, we'll just call our registered agent down there and have him spend some of them. Yeah. So they do this. They're working on the page of software. Meanwhile, this is 1998 late 1998 going into early 1999. What's going on in the rest of the world on the internet? It's like the first wave of real consumer internet and social quote unquote, although people didn't call it yet that is blowing up. So you've got Napster in the US and of course you've got a well and then MSN and all sorts of other kind of portals and early instant messengers are popping up. And so the first instant messenger was this company called ICQ is really company. Oh, man, I used to live in ICQ. And that was the first PC based instant messaging client ends up getting acquired by AOL in 1998. So right before 10cent is started and really starts taking off entrepreneurs see the power of the network effect in these communications businesses. And now there's an exit in ICQ and they're like, okay, great. We're going to start building these things. So it's like, you know, the first example of what we would see later with messaging apps on mobile and ride sharing. It's like you have they start popping up all over the world. And so pony and his co-founders see this and they're like, okay, forget this page or software thing. We're going to go clone. Is the galloping messages over instant message. Yes, on a computer. And again, to be fair, like the page or thing wasn't totally crazy because people had them and what people did not have in China were their own, you know, personal computers. But what it was starting to emerge now was internet cafes and people would go and spend tons of time in internet cafes on PCs there. And so they realize we can still get distribution into consumers hands, even though they don't personally own PCs. We just get it into these internet cafes. People install our version of ICQ, which they call open ICQ very creatively. Oh, ICQ on the internet cafe PCs and we're going to access a huge amount of the Chinese market, which they do. Just to drive this point home about like when we say people in China didn't really have PCs in home. So in 1999, there were 50 desktop computers for every 100 people in the United States. It's about half people as you would sort of expect if you rewind it to 1990 think about that, you know, what you were observing around you. Well, in China at that same time, it was one home computer for every 100 people. The internet and even computing really hadn't come to China yet, particularly at home. But these internet cafes had and it works and people start spending a ton of time. I remember reading about this at the time thinking like this is crazy. Like I use the computer in my house, but in not just China, but Korea. I don't I don't think it was as much in Japan, but definitely in Korea. This whole internet cafe thing became a huge meme. The birth of the PC bang. I've been to one. Have you been to one? No, I haven't. I've read way too many articles to have not been to on. It's cool depressing, but cool. When I was at Stanford in business school, we did a, everyone has to do like an international trip experience in mind was to South Korea. And it was funny. PC bang was not on the official itinerary. So it was like one evening when we were free. I was like, I cannot not go to a PC bang. So I just wandered off by myself and like, is it like everybody playing Starcraft? Yes. That is exactly what it was. So within nine months of this pivot to OICQ to copying and it wasn't just copying and and ponyman actually he talks about this. And his 10th and has a reputation for copying others ideas as we will see multiple times throughout this episode. But he's like, it's not just copying you had to adapt it to the Chinese market like I see Q wasn't going to work or any of the competitors in China. A because it wasn't you know in Chinese, but also be like the way that like the market operator was different. Again, people didn't have PCs. They went to internet cafes. And so you just had to do a bunch of stuff in the with the product to adapt it to the local market. You couldn't make assumptions around this user is always logged in and stuff like that. Well, stuff like mailing a CD to your house, you know, that a well, of course, so famously used for distribution was different. Yeah, it makes sense. Yeah, like that's not going to work. So within nine months of the pivot, they have a million users, which obviously is a drop in the bucket compared to the whole population in China, but still like huge and huge enough that AOL notices them and notices this open I see Q that is taking off in China that they do not own when they thought they owned I see Q. So they serve them a lawsuit and demand that they take down the service or at least change their name. So now they're they're kind of up a creek without a paddle. They they have no business model. They're giving away all this for free. They're presumably having to pay something or at least you know, employ a lot of people to go get this service installed in internet cafes around the country. They have ballooning server costs. Yeah, I was going to say you actually have to build data centers and buy servers and rack them and have IT people that are you know, maintaining all that all this stuff. So they're like, okay, we're going to do a dual track process. We're going to try to sell the company. We're going to be you know, we're the I CQ of China or we're going to raise venture capital and what will see what happens. This this flexibility was shocking to me the fact that pony ma's like look, I have a clear vision. We're going to bring messaging to China and like it's not as important to me to do it in a way where I you know maintain control the whole company. And like I just want to see my mission through and of course I'm sure everyone had a profit mode of there. But like it was really about like we have an opportunity to make this thing huge and I'm open to whatever process gets us there. Just like Netflix right like you know they tried to sell Netflix. I think what three times. Yeah, wants to blockbuster for $200 million or something. Yeah, well first to Amazon and it was like I think base us offered like nine million or something like that. And it was too low anyway. Listeners, it's amazing how quickly David and I have about a nine hour span where we can actually do an episode where we have enough of the information in our heads and like the notes collated in such the way where we can actually do the episode. And then it all just like jumbles after that. So it's good that we get them out when we do. Yeah, totally. It's a problem with getting old. So nobody wants to buy the company. But in 2000 they do have two people who are interested in investing. So one is IDG venture capital, which is one of the most prolific at least kind of first wave VCs in China. It was a US VC. I believe IDG I believe it's a publishing group. I think it was like a they did a lot of the early trade shows and kind of like computer trade shows and sort of like Internet 1.0. And they had a venture arm that was very successful in China. So IDG wants to invest in this particular fund. I believe was quite small. Think about it like a much much smaller than you would think about a seed fund today, which will be important in a moment, which is probably why they need to bring in extra capital. So they bring in one of the companies owned by Lee Ka-sheng, the very famous Hong Kong based billionaire investor telecom investor. So the two of them as a syndicate are willing to invest and they are willing to invest 2.2 million USD for 40% of the company. So 5.5 million dollar post money valuation for a business that has a million users in a million users back then. So that's a lot of the hard terms man. That's a lot of the company to give up. I know. I know. Well, you know, the VCs they want their 20% and in this case they both want their 20%. But Pony and Tencent they kind of have no choice. They take the money. They sell the 40% of the company. Immediately afterwards they lose the judgment in the matter with AOL. I don't know exactly what jurisdiction it was in. It was international law. But they're ordered to stop using the open ICQ name. So they're trying to figure out like how can we rebrand this thing? Supposedly, a Tencent employee is on the bus one day in Shenzhen. And he hears a couple of users who use the service just talking about it on the bus. And they're referring to it as QQ as like a cute kind of diminutive of OICQ as just QQ. And he's like, hey, we need something. A star is born. A star is born. So not only do they rebrand OICQ to QQ, they fully embrace the cuteness. And they design and adapt the cute little cuddly penguin that if you're familiar with with Tencent and with QQ, you probably know of as their mascot. Which I didn't know about till doing this research. And thank God I did because then I got your penguin jokes earlier. Well, and I think what that means probably most of our listeners didn't get the penguin jokes. But now you get the penguin jokes. Now, I think I wasn't totally able to confirm this because like, you know, the internet way back machine doesn't really work in China. But I believe not only before this switchover, were they using OICQ as their name and ripping off of that. I believe the default avatar images for users on the service before were straight up ripped Disney characters like Mickey Mouse and Donald Duck. It's like, wait, wait, we should get away from this trademark infringement with I.C.Q. So bring in Mickey Mouse. I heard they're now just. No, that was that was before. I think now they're afraid of international litigations. Like we got to clean up everything. So I think this is also where the penguin comes from is we got to replace Mickey Mouse and Donald Duck. Let's use let's design our own Q for a little animal. It is worth noting at this time. So doing a little bit of research on IDG. So I thought I knew the name from somewhere. They they run Macworld. So they own Macworld, computer world, PC world, all those things. They also they're really old. They were started in 1964. Like this has been a publishing group for a long, long time and they run all these expos and skipping ahead to tech themes. But how often we see these immensely successful sort of spin off funds of companies such as soft bank or IDG getting in the ground floor of something huge. Like this is the global instantiation of our theme from I forget what episode it was probably a year or two ago now about like how at this point in time in tech and on the internet. There were like 11 people in the whole world working on it. Right. It's crazy. You know, and a bunch of characters who we have seen before are going to pop up as well as some new ones as we go along here. Okay. So they raised the money. They changed the name to QQ. They've settled the lawsuit. But they still have a problem, which is that they don't really have a business model. They're giving away the software for free. They're making some revenue from telecom carriers for delivering QQ messages to pages. Like the major thing is still part of the company, which actually makes sense. You know, you're not an internet cafe. Somebody sends you a message. You want to know about it. You get it through the page. You're like, okay, I get it. The other thing that happens in 2001, of course, is the dot com crash happens in the US. And that cools, you know, the venture financing market globally, the company's still growing like a weed. They're adding 500,000 users a day in 2001. They searched past 100 million users. Like this is crazy. And again, remember internet cafes like nuts. They're beating the bushes, though. They're they're they're still trying to sell the company because they're like, okay, great. We've got a hundred million users. We're super valuable to somebody. You know, we've cleaned up all these legal issues. Somebody is going to have to want to buy us. And from a shareholders perspective, IDG doesn't have any ability to do follow on capital because they're in that kind of very small fun. They syndicated just that $2.2 million around. And IDG is starting to feel like, you know, this company that we have that is growing. That's great. But we're a little skittish post.com bubble. Like let's let's liquidate some stuff. As is Lee Cushing. Now, I don't know. I didn't do enough research to know here for sure. But my understanding of Lee Cushing is his he made his fortune in the telecom industry. And the one industry that was heard harder than tech in the internet in the.com bubble bursting was of course telecom. He's probably hurting and needs liquidity. So he's looking to get out of his investment as well. So they meet throughout this process. The Tencent and pony meat and ponies co founders meet the most incredibly random group you could even think of. They meet the investment arm of nasper's which is a big South African media conglomerate. This is like the like the news corp of South Africa. So like there, you know, a Shenzhen based Chinese company that stole their original name and product from an Israeli company that's being affected by the US.com crash. Sure. South African media company. Why not. And there are people out there who are listening who have definitely heard of naspers in this day like in in 1999 when this is all happening. You would not have heard of naspers like it's it's not something where you're like, oh yeah, no, I don't know much about it. But it's kind of this big international thing not a big international thing yet. No, no, no, and yet now well known tech investor because of what they're about to do here. So they say, look, we don't want to buy your company. But we've got capital. We're looking to diversify out of the media. I believe I believe mostly print media business in South Africa. We will invest and not only we we want to invest, but we want to invest. We want a meaningful ownership stake. We're willing to buy out your existing investors. So like echoes of the Alibaba episode here. We'll take that 40% the Goldman investment that gets bought out. Yeah. So not only are they willing to buy out existing investors. They're willing to do so at a 60 million dollar valuation. So remember just a few months ago this company was valued at five and a half million dollars post money. The existing investors are trying to get liquidity. They're like great 11x 60 million dollars. I'll hit that. I mean gosh couple of years that feels really good to me. Let's do it. Yeah, let's do it 10x there 10x returns. Oh boy. Oh boy. So Lee caching sells his entire 20% stake. Fortunately for IDG, they sell only 12.88. Only 12.8% of their stake. So they retain 7.2% of ownership in 10.7. Naspers acquires 32.8% of 10.7 in total just under a third for 20 million dollars. We're going to get to grading in a little bit. And well, this will come back up. But this was to say this was prescient would be the understatement of the century. Yeah, and listeners just to plant the seed now we're not going to be grading like that. We call this episode 10 cent like we called Tesla Tesla or like Alibaba Alibaba. This isn't really going to be about sort of the 10 cent IPO because it's part of a much longer journey. But this is acquired and we have to grade stuff. So we're going to end up grading this particular investment against other sort of very successful investments. You might imagine which ones. Okay, meanwhile though, the company is still not really making any money. Yeah, but David, they have a lot of eyeballs. So I mean they have a lot of pick exactly. And not only that, but this transaction that happened, the company didn't get any money like the investors just cashed out. So yeah, funny thing. So they got to figure out a way to survive here in 2002, a PM who's working at the company. Here's about this Korean company that is selling quote unquote digital goods for their users to customize their, you know, avatars on this, you know, digital service. And yeah, people are like laughing about it. Well, people aren't even laughing about it in the world. People don't even know about this yet. But apparently it's doing pretty well. And so 10 cents like well, we got to do something. Let's try that. So they once again copy this business model and they launch what's called they call QQ show as part of the QQ platform. And it's basically a customization for your avatar on QQ you can buy digital articles of clothing digital avatars hair, you know, all sorts of stuff to make you have a different appearance. And it takes off like wildfire. So within six months, they have over five million users on the QQ platform that are paying an average of five RMB a month. So that works out to a 300 million RMB annual run rate. So that's about 50 million dollars in USD within six months. And this is 2002 in the lake, you know, the nuclear winter of the internet. And so fascinatingly, I mean, American companies won't catch up to sort of micro transactions for, you know, a while there's portal games like on MSN and AOL, which we use it a little bit. But it's not really till you get into sort of the Facebook and single world and then really the mobile world in sort of 2008 to 2012. And Riot Games and League of Legends, which we're going to come back to you know, but here 10cent is understanding the power of this super early. They're not a gaming company yet, but they understand the power of micro transactions and of virtual goods and it's 2002. And I want to just flash forward to something that I read today is a Wall Street Journal piece about the 10cent music IPO. And they mentioned the sort of differences between Spotify and 10cent music and they say 10cent music's main revenue source isn't actually music streaming instead it generates billions of dollars from selling virtual gifts with which users can tip entertainers who stream live performances in its apps. And so 10cent like this is a completely formative moment for the company that will dictate future business models across verticals. Totally and this is the business model of 10cent as we'll see 10cent grows into having so many different products and portfolio of things that they're in but this is the common thread that they figured out and they know more than anyone and I didn't have time to actually read the full Wall Street Journal article but my from what I did read I think they were sort of dismissive of this as like well 10cent music isn't as you know isn't as good as Spotify because people don't actually pay it's this and it's like. It's like no come on like this is a better business model like if you guys heard of twitch like you know have you seen 10cent like this is how it works you know it's a better business model. It's at least it's at least different and powerful and and could could be better for different yeah you know this isn't as egregious but this is reminds me of you know the 7-11 blockbuster CEO coming in and be like I don't believe in internet businesses like I don't believe in micro transaction but no like yeah they work. Dev you played Fortnite Fortnite which somebody might own most of who would that be spoiler it's 10cent everybody around the table is like high fiveing now and especially nascar's leasing is not high fiveing 11x baby what do you want yeah nascar's pays 20 million dollars and then within like a matter of months they own 32 33% in a company that is at a 50 million dollar revenue run rate and growing like gangbusters and not just 50 million dollar revenue run rate like think about the margins on this like there's no cost of goods sold when you are selling digital goods pretty good business model. Okay 2003 the next year they do over 100 million USD and revenue they start thinking about two things one going public and two what else they can apply this new business model that they figured out of freemium goods and digital goods and micro transactions what else they can apply this to around their core kind of communications and I am platform that they own with QQ before there they take the plunge into doing what what I think you're about to say they really enter the portal market like if you look at what a well was doing what I'm a sandwich who was doing you know there's all this content that flows through them like they get to own distribution to customers and QQ is blown up to the point now where they say you know what we're now a portal to and we're China's portal. Yep they're thinking about a portal they think about what else can we add to the QQ platform and there one thing that the company is really good at to this day is like they are very very good product organization and so they go and they spend time with people who are using QQ with users and they realize that the segment of people are using QQ to chat with each other in these internet cafes while they are playing games on the PCs playing online games of all types and they're like that's interesting what if we added games to our platform to our portal it's kind of like you know discord like like finally figures this out well discord figured out like this product insight you know many many years later in the US like it's amazing how far behind we are here like this is the Tencent business model like games okay they start adding games to the platform they go out they start acquiring some games they start studios in house developing their own games adding them to the QQ platform within the year it adds another fifty million dollars of revenue to the company so huge success not to success like the core virtual goods business on QQ is growing like crazy now they haven't even faster growing games business that's also part of the portal that they've added so in the process of realizing all this they're like okay couple things one we got to get public because this is like a business to you know all the founders are computer scientists there's one founder who had some sales expertise but it was still kind of from the telecom world they like we need some like real you know business folks and pony like is great is a total visionary product visionary but like as you said Ben he's fairly reclusive he doesn't speak English very well they realize now they need to be going out doing deals around the world acquiring these games bringing them to China they need their equivalent of Alibaba's Josie and I mean in addition to sort of the business development skills you really need someone here who's a great capital allocator who sort of understands like because by putting all these games on their platform some they're buying some they're investing in like there are these sort of starting to take a conglomerate form though all of the things do feed into this portal they've created so they look around and they're like well we kind of have somebody who fits that bill who's been hanging out with us a lot and that's our maker from Goldman Sachs who's working on taking us public whose name is Martin Low Martin is super interesting just like Josie in in Alibaba he's a TMT banker a Goldman in Hong Kong his parents are Chinese but he was educated in the US he went to Michigan for undergrad studied engineering got an engineering masters from Stanford did an MBA Kellogg then worked at McKinsey and then he went to Goldman over in Hong Kong and so pony is like dude Martin you got to like forget this banking thing like this is where the this is where the future is you got to come work with us Martin declines at first it's sort of similar to you know it reminded me of when Josie you know declined the first offer from Alibaba and it's like I got my wife come over and meet you guys like very similar he declines he's like this is kind of a conflict of interest like I'm your banker I'm working on taking you public he's like let's get the IPO done first they get the IPO done in June of 2004 they go public on the Hong Kong stock exchange there was $180 million and pretty shortly afterwards loud like okay this is a really special company I'm gonna I'm gonna we've Goldman and I'm gonna join so he becomes the chief strategy officer in charge of investor relations and importantly M&A which is like kind of a like they're not many Chinese internet executives that are in charge of M&A at this point allows really like blazing a trail it does really well totally gels with the team 2006 he gets promoted to president of the company and he's really the one who starts driving this idea that like Tencent is now this platform and Tencent is this business model they can go around and bring all of these types of various types of content and experiences into the both the QQ platform and and use this business model to create you know amazing businesses so they launch QZone which is a kind of a more even more full fledged social network by 2011 so a few years later Tencent now operates for the five top games in China and they do a pretty important thing that we will come back to in 2011 deal they acquire a majority stake in riot games based in LA maker of League of Legends little little game in the esports world but not super well known in 2011 in the west but enormous in China and I mean big around the world I think Tencent was their publisher in China where they were able to riot didn't really have the capacity to reach customers in China though the game was going to be beloved so partnered with Tencent to be the publisher there yep so they're the publisher already in China they're seeing and of course for listeners who aren't familiar League of Legends was natively built with the Tencent business model so it's free to play cost nothing anybody can anybody can play in the way the game monetizes is through people buying digital goods for their characters both characters and then goods to put on the characters that have no effect impact on gameplay so the playing field is level for everyone but people just want to customize their their characters and it works amazingly well in China just a couple days ago riot released the 2018 League of Legends esports by the numbers they had 99.6 million unique viewers just watching the world's finals the world championship finals I mean this is 44 million viewers tuned in concurrently at peak like this is one of these really insane global phenomena that was not quite like this when when Tencent bought them I mean this is we may be foreshadowing that be fun to do an episode on this at some point and Dave and I are smiling at each other Notting and agreement yeah most of the growth of League of Legends has happened in China and under Tencent's watch and so they're really sort of to credit for the growth of this global phenomenon I think we will have much more to say on a future episode about this but I believe they paid 300 million dollars is that right? 3 or 4 yeah 3 or 400 million dollars for like a 90% ish stake in in riot games the maker of League at this point absolutely crazy crazy pressure and investment the other thing they do the next year in 2012 and then we're going to take a step back from the gaming part of Tencent for a minute this is going to come up they acquire a 40% staker in North Carolina based epic games which made this like unreal tournament which was beloved by a small group of people the unreal engine which was used by a bunch more people but it's not not a global phenomenon it was more of like a more like an infrastructure play and like who knows what they were thinking but they're like maybe this is a way that like we can start to compete with Valve and steam anyway let's park that to the side for a minute the other thing let's let's move back to the core Tencent platform and QQ and kind of the engine that makes all this possible is all the attention and communication and network effect that they have of their users yeah because remember Tencent is a social media company or a social networking company that started with the messaging platform QQ and of course their most profitable area is gaming which we've sort of caught up on but there's a thing that happens at Tencent in the social networking world and the communication world that really dominates them today that we haven't talked about well so IPO happens in 2004 basically from 2004 till 2010 2011 like growth is rampant QQ is dominant they're like unassailable growing to hundreds and hundreds of millions of users throughout China but as 20 you know when we get to this time frame there's this thing called mobile that's happening and people are starting to realize this is not just like the next big wave in tech globally but like particularly in China we talked about this a bunch on the Xiaomi episode and remember Lajun the founder of Xiaomi is is Pony Mazel buddy from the bulletin board days Xiaomi's already started at this point Lajun sees like he realizes that mobile like China Internet users are going to jump directly from using PCs in Internet cafes and not owning PCs to owning mobile phones and this is going to be a complete product and business model paradigm shift for the way Chinese users interact with the Internet and their personal relationship to it as you'll remember on other episodes acquired such as the Facebook IPO there were companies that had an existential moment where they either missed mobile or almost missed mobile and it was company defining and for Facebook it was actually sort of behemoth creating and so a Tencent is about to hit this very same cliff where they have their moment where they go oh we need something on mobile because QQ you know for all of its greatness it's for those of you who are big on AOL and St. Messenger do you remember when the aim app came to the phone and how it was kind of garbage and it wasn't made for the phone and native to that platform well they need an answer to that this is happening and they realize this two years ahead of when Facebook realizes this so they do they have the whole management team at Tencent they know they have to deal with this they call a big off site strategy retreat for the top management they call it the conference of the gods unclear if they call it this themselves or if the other employees of the company call this the conference of the gods they come out of it they decide that like this is wartime we got to go all in on mobile we have to solve this problem like we need our equivalent of what Facebook two years later would get with Instagram so what do they what do they look at what do they decide to do what's the landscape here if we rewind a little bit in summer 2009 at WWDC apple launches push messaging and this is what the moment that really enables this so like before this you could have apps on the phone but like there is no way to know like that something happened in the app so a messenger app was useless out of no way to know that you know somebody had sent me a message with push messaging now you get the little red you know notification badge and I know like oh there's something here waiting for me to check so a group of students in Canada at the University of Waterloo they see this and they're like oh cool will build a mobile messenger app and they call it kick KIK still around today raises a series a from Red Wilson Union Square Ventures gets a bunch of traction starts adding users like crazy I want to take a pause just because one of the things that's heralded is added users like crazy it's you know it's almost like virtuous how fast they grew and how it is great product market fit do you remember the first time you installed kick on your phone what happened David like did you ever go through this this user experience I remember being a total early adapter loving it it was so much better in text messaging and getting all my friends and family to sign up for it well that's the thing is I didn't intentionally get all my friends and family to sign up for it they like far worse than LinkedIn oh no like way worse with your phone book for the first time before apple had a question for missions and I remember this thing where I sent a an invite unknowingly to every single member of my contactless inviting them to kick like they they were the the champions of the sort of exploit an abuse and then apologize later strategy all your professors that always you are getting was kicking but the good news was there were several other people that like I got that same spam from lots of people so I was like I see what's going on here but oh man I forgot about that shoot actually maybe I never knew maybe I spammed about the people never knew it David alone invited millions of people to kick and it grew and press net and rate well unfortunately for kick they basically become the I CQ of the of the mobile messenger market again they're still around they're doing but they're they don't win because a lot of other people around the world see that like this is the future kick his show us you know the blueprint of step one and we're just going to go do the same thing for our local market and this is this is like the hey day of Chinese cloning era the theme on acquired this season is very much about sort of like how a lot of these companies innovate in their own way and how the these Chinese companies are created sort of China native and have a different strategy but famously like this was not yet the case no this was a straight up clone but as we'll see as you know as the pony my quote from earlier in the episode like it's cloning but it's also like cloning in a way like if kick had just come to China like it would not have worked so Tencent realizes they need to hop on the bandwagon that they're going to build a kick clone as well they have the perfect person to do it so back in 2005 Tencent had acquired a product called Fox male and Fox male was this product in China created by this incredible incredible engineer called Alan Zhang is a super visionary fantastic engineer like I said in Fox male it was a web male client and like one of the biggest in China and at the time even like hot male and Yahoo male and the US internet portals they were copying a lot of their feature roadmap from what Fox male was doing in China Tencent acquires this thing late 2010 now as this you know kind of like we're at war we're shifting to mobile is going on Alan is still working a Tencent and he emails pony and he's like let me let me handle this like this is like you're like you know most like you're most trusted lieutenant is like volunteering to like go to battle here I don't know where in the timeline this happened but wasn't there a competing group with in Tencent also looking at mobile messaging yes I believe I don't know all the details but what I believe is that yes they're coming out of this like conference of the gods there was like a task force you know working on this and I believe it could be wrong here listeners correct as if you know otherwise Alan is he just emails pony one night and he's like let me do this forces give me yes give me the power and apparently my likes to stay up really late at night and he sees the email he writes back right away and he's like do it and so supposedly Alan takes a small team they go lock themselves away in I think pony refers to it as like a black room it's like a room with like blackboards and like no light and like they work for two months straight and they build an app and then they take it out and they show it to pony and Martin Lowe and they say they're going to call it we should which in English translates to we chat and they're not the only ones doing this I mean we mentioned the cloning there's also debuting right around this time is me talk from Xiaomi which is before Xiaomi made phones which is the craziest thing remember when we were saying they were doing all this research by doing mobile software and an OS before they they built me talk so we chat has a billion users that's that's a huge lock-in component for 10 cent that could also be Xiaomi's but that's not how history played out and me talks adding a ton of users like they've got a head start like they're off to a really good start in the market there like lots of people are going after the Chinese kick opportunity another company that's doing this a Hong Kong based start up right across the bay called talk box that's going to come back in a minute so they release we chat and it does well they import the social graph from QQ so that's like you know major lay-at-feeding it's like oh you know me talk that's nice you have these like you know bulletin board internet forums with your early adapters we have 900 million QQ users that we're just going to import here but it like it does well that's a huge advantage but it doesn't do that well like the other apps are still in the mix here including talk box Allen and team they go back to the drawing board they're like okay what's not working here they realize that there's there's one thing that talk box is doing and that I think me talk has copied at this point too that's pretty important the reason it's called talk box is in addition to text messaging they also have a walkie talkie feature so like you can record a short voice message like Apple's been trying to add this to i-message for years adding it in strange ways in the UI that they're in a strange way but again to like localization for the your market you know in Chinese the characters are like really complicated there are a lot of them sometimes it's harder to express yourself with typing quickly when you just want to send a short message much easier to just say something that's why talking and these this walkie talkie feature becomes like really important for this class of apps and again you don't have a keyboard like you would have with instant messaging this is like the next telephones from the 90s that like had that first and I think even there was a product called Viber that did this for a while yes and a boxer I think too yeah yeah yeah I think maybe that's actually the vibe I think was based in Israel I want to say I don't know and I think it was based either in Israel or Asia this is before the great messaging wars were settled oh the other thing we should point out this is a key becomes really key in the messaging wars everywhere there's the mobile operating system wars are also going on at this point in time there's iOS and Android everybody's duking now one of the really key things about a messaging platform that people start to realize is you have to be able to work seamlessly between iOS and Android and this is a key thing that me talk falls down on they don't have an iOS app for a long time they only have the because on the me OS like remember the whole thing is to be building the me phone and building Xiaomi so this is part of what helps Tencent catch and we chat catch up as well as they come out with an iOS app first and then an Android app so they add the walkie talkie feature that helps a bunch the other thing they add in this spring v2 update in 2011 is this innocuously named feature called friends nearby that also you know sounds like that thing that Apple's been trying to add to your phones you know find my friends it sounds like that but it sounds like that but it's not that it's not it's not friends in the sense of like friends who are already in my contact book it's more like friends in the sense of people that I might be interested in meeting for a variety of reasons yeah maybe maybe people who you could with certain characteristics that you could filter for like gender you might be interested in yeah like gender or you know other things that you might be interested in meeting and they might be interested in meeting you in the right circumstance so Tencent Invent's Tinder yes uh basically that is the moral of the story and this is 2011 2011 yep so do you know one other fact about pony ma that mayor may not have inspired this I don't go for it can you think of anything so I don't I don't know any facts that this this uh inspired this but pony in 98 99 somewhere in there he met his wife on qq and they corresponded for three months on qq before meeting in person I did not know this yeah wow man talk about like intimate you know solving your own problem with the product so the spring 2011 update to wechat uh has both of these features it has walkie-talkie and it has tinder it just is like pushes it above everyone else in the market they start like zooming past everyone by early 2012 wechat now has a hundred million active users um by the end of 2012 they have three hundred million active users today they have just under a billion so like basically every single person in china uh well I can't say that for sure listeners may like correct us I'm sure there are parts of china that that don't use wechat yet but like essentially the entire population of china is on wechat at this point that's crazy in and of itself this is even crazier so the average time spent for the average user this is average average across the entire user base of wechat average time spent on wechat is four hours a day that is more than every single social app in the us combined facebook instagram twitter snapchat everything vastly more interestingly it's more time than I spend on my phone per day so I think that speaks to two things one it speaks to of course I'm not an zero with it speaks to I'm not an the average of the United States but people in china that's their computing device and I think my laptop is my computing device primarily and I think my phone time is somewhere between like two and three and a half hours depending on whatever you also start to get the foreshadowing here that messaging isn't just messaging messaging is more like the way we think of the operating system though wechat app is actually the platform upon which other things can be built and you don't actually need to spend much time outside wechat this is sort of foreshadowing the launch of wechat official accounts yeah it is well well there's two things here one one is that which we're going to get into right now but before we do the other important thing here and like again this gets back to like the local having the product right for your user base in your market email never really became a thing in china like Foxmail like was big and 10 cent acquired it and like hotmail and Yahoo mail ripped off a bunch of its features but like people didn't have like they have email accounts but they don't really use email even in work settings that's very different than the US what wechat has become it like it's the communication platform for like imagine your i-message or you know whatever your your messaging app it what's app whatever you use that plus your email plus your slack for work like it's all it's all there so like all of your communication is going through this platform and again because of that all your communications going through and here's where Alan Alan Zhang is is is like such a huge product visionary and he starts to separate wechat from all the other messengers around the world not just in china they launch this concept of official accounts so what are official accounts official accounts are a lightweight way for a business or an entity not a person to interact with users who want to interact with them on the platform sounds you know simple enough but this becomes enormous it's kind of like a souped up Facebook page right it's that's exactly what it is but it allows like the account that the the business or whatever entity controls to message and interact with with lots and lots of users so people start buying stuff through this and like it becomes a commerce platform and of course you know it tends and is already very adept at e-commerce through all of the micro transactions that they had done through qq they build wechat pay we pay into into the platform not just e-commerce ride sharing like dd basically gets built on wechat meal ordering and meal delivery and may twan dung dumping gets built on wechat they also introduce in conjunction i think shortly thereafter with official accounts is the moment's newsfeed and this is something that's it's really you know we know this in in Facebook it's really a publishing system for for content but it's also importantly they do a really aggressive push to force users to use this in a way that is decentralized among smaller groups and so you can easily sort of share things from your romance newsfeed into groups publishers or individuals who are publishing can publish two smaller groups it becomes the largest content ecosystem in china and as you're alluding to david you can buy or book things on on the official accounts sort of through the moments newsfeed and another sort of important thing to know about the moments newsfeed is you know we keep talking about tencent as a business that makes money on micro transactions and gaming but is a social network and in the u.s social network is synonymous with advertising company well there's not actually a lot of ads in the moments newsfeed and they wait a very long time before introducing them and even then they they do it in a very lightweight way and so you know it's really all about sort of the facilitating the attention there but the business model ends up being way different you know we talked about on the alibaba episode that alibaba is like amazon plus google together you know in this way tencent becomes like facebook plus amazon or facebook plus uber you know facebook plus uber plus airbnb plus all of these commerce platforms you know all together and this totally plays to the company's strengths product wise but also executive wise remember martin lao you know he's been he was the banker from goldman he brings on a few other folks james mitzl notably from goldman also was a tech banker i believe also in hankong i believe he doesn't even speak mandarin he comes and he joins as chief strategy officer and what they do is they realize all these companies are getting built on the wechat platform let's start investing in them and like helping them succeed on the platform so they do so tencent is a major investor in dd in meituan jumping in pinduo duo all of these huge you know now current generation chinese companies that are all built on the wechat platform they're not just built on the platform tencent owns a meaningful stake in these businesses and so they're benefiting from that too and then the other thing and this is just just happened uh recently happened but is now in the news so the official accounts thing it's very basic like very very basic very lightweight in early 2017 they essentially turn official accounts into this slightly more advanced thing called mini programs which which were mini apps but apple didn't like that so now there are many programs like that exactly exactly and supposedly i don't know what the chinese words are but mini program sounds better in chinese than it does in english so it's not as weird um but uh this this now unlocks actual like more functionality from like programmatic like actually you know building a tech enabled experience for companies think about it like if you were looking to book a flight through expedia and you were previously trying to do it on the expedia's facebook page that would be super Yeah so the company that just my public here in the us it's like two years old is you know dude and we'll have to cover it next season like you know thirty billion plus market cap i believe and David what does pin do oh do do it is a mini it's a mini program it's a shopping experience I've seen videos, I haven't actually done it, but so I may be butchering this listeners correct us if we are, but it's a sort of like gamified shopping experience that is all conducted through a mini program on WeChat. And what's great about that is like the friction, the distribution friction to get this in front of people is zero, you know, and that's important because like this, the target market for Pindu Oduo is people in third and fourth tier Chinese cities who are not already well served by Alibaba, by JD, by all the existing commerce players, but they have WeChat accounts and like they can interact, so they don't have, you know, JD accounts, but they can interact super seamlessly just through the moment's news feed and a mini program with Pindu Oduo. Makes a lot of sense. There's a couple things I want to revisit in this sort of evolution of WeChat that I think are interesting and important. Do you know about QQPay and sort of what that was before WeChat pay? Not in any depth. So apparently, I didn't realize this. So early on, Tencent sort of thought about doing this transaction platform on QQ before they had done WeChat, which started to pick up steam, but people started using QQPay as a replacement for the RMB. And the Chinese government freaked out, this is like before Bitcoin and decided, no, no, no, no, no, they shut it down. So it's interesting that when the time was finally right for WeChat pay, I mean, I'm sure they had sort of worked it out with the government where it made a lot of sense for them to do that and wouldn't get shut down like the previous time, but they were actually well ahead of the curve in sort of establishing that digital wallet, which makes a lot of sense as you sort of evolve from micro transactions as your roots to then thinking about peer to peer payments instead of just buying virtual goods on your platform. Another thing that came out of this, do you see anything about lucky money? Oh yeah, oh man, this is a rabbit hole. I didn't go too far down, but. So I'm not gonna go into the whole thing. It was kind of like a fun game where you could win money, which we won't dive too deep into, but you could win lucky money without ever connecting a bank account. And so what was happening is people were winning. Seated people's accounts, right? And so they ended up with just a little bit of money in their account, but not necessarily needing to ever send it out anywhere. And so the thing that bootstrapped their WeChat payment platform was that street vendors and other people started accepting your sort of winnings from lucky money as a way to pay for stuff in the real world. And then suddenly that was once you get sort of merchants then on the network, then there's sort of this like, oh, I should connect it to my bank account so that I can use this thing to pay. It's a brilliant strategy. Well, of course, this is all tied into the Chinese custom and I believe around the New Year of Red envelopes and gift giving and giving money. And we've already talked about Deng Xiaoping and the cultural revolution here. So we're not gonna go too that much farther deep into history and Chinese history and culture, but. I don't think we should, but there is one other thing that I do wanna talk about in WeChat pay before going back to gaming, I think is where we're gonna go next. So this one relates to the Venmo episode. One thing that we determined on the Venmo episode was the real business in what Venmo is doing and where peer-to-peer payments companies like PayPal end up going is in paying merchants because peer-to-peer payments have no fees because people don't expect that when you and I are just giving each other digital cash, we should have to have fees associated with that. In the US, if you can win over Visa's business, like if you can get merchants to accept Venmo, then you get to play in that sort of 3% interchange world where you get to make 3% on every transaction that's hugely profitable business. So of course, Venmo's going there with Pay with Venmo. Of course, PayPal went there. In China, WeChat pay is actually not very profitable because instead of a culturally accepted two to three percent interchange fee, it's like 0.6%. And so WeChat pay isn't really the golden goose that you would think it would be. That's really just about sort of additional lock-in and additional sort of loyalty to the platform so that they can make money in other ways. It's the glue that, or the connective tissue that enables the whole ecosystem of businesses to get built on, on WeChat, interesting. Okay, so that's WeChat. A few kind of miscellaneous fun things along the way to catch us up to today that also happen at Tencent corporate. In 2013, right around the time that Facebook was trying to buy Snapchat, Tencent desperately wants to either buy or make a strategic investment in Snapchat. Remember, they figured this 2013, two years earlier, they had already on the road, they figured out how messaging can build an amazing, huge business around it. They view Snapchat as an opportunity to do that in the US. They think they have the right playbook, they can bring it to Snap and do it here. They're in talks to do a big strategic investment in the company. Instead, Evan's fee-go-rejects it decides to pursue his own vision for the company as a camera company, not a commerce and business empire, platform empire, and the deal does not happen. We covered that on our Snap IPO episode. But what has happened since then is after the Snap IPO, Tencent has started buying up shares on the open market. So they now own 12% of Snap. Very interesting. Apparently, according to all parties involved, there's a good relationship, mutually beneficial relationship. What's interesting about that though, if you remember from our long ago Snap IPO episode, Snap IPOed with a very interesting governance structure. By interesting, you mean multiple classes? No governance structure. There's multiple share classes in public US tech companies is not Facebook has it with super voting shares that the founders control, I think. Did Google Pioneer it? Google Pioneer, did I believe? It was a media company thing actually from back then. The New York Times has it because the family votes differently than... Yeah, the argument was that media companies needed independence from the political and economic landscape because they needed to cover these companies. So thus, if there were a mechanism that somebody could buy up voting control of a media company, then it would be like, bad for democracy. Anyway, tech has kind of perverted this. Well, as we know, since Facebook is not a media company, I mean, they don't... Right, right. Anyway, Evan Spiegel takes this to a whole new level of not only just getting super voting shares that he and his co-founder is gonna keep the shares they sold to the public get no votes, zero. So if you own Snap shares, you have zero voting control. So, you know, Tencent can buy as much of Snap as it wants. There's no actual teeth that it has in doing anything with that, which is interesting. We should make up like a best of when David says things are interesting and he means terrible. Well, it depends, you know, what side you're on terrible or great. That's what makes it interesting. Well, look, even if you have all the voting shares, you still want the stock price to be a lot higher than it is right now, so. Right, right. So interests are aligned on that front. Other very interesting acquired related trivia here. In early 2014, Tencent starts talks to acquire WhatsApp and apparently they're in pretty deep talks and the price tag was kind of somewhere around 10 billion, I think less than 10 billion. Which would have been crazy. Like that would have been a crazy high price for that time. Like the world went nuts with Instagram going for a billion. Like this would have been a bananas number. Totally. And the Facebook, the rumored Facebook offer for Snapchat was three billion. So this is great. But again, you know, Tencent recognizes the power of WhatsApp and they see like, man, this is our gateway to Europe of doing running the same playbook there. Progress on the deal though apparently gets delayed because Ponuma has to have back surgery. And so he's kind of out of the game and like there are supposed to be meetings that were going to happen in California. He had to delay them in the interim while he's having back surgery, Facebook swoops in, Zuckerberg swoops in, buys the company for $19 billion, you know, weekend. And you cannot, I don't know, I wasn't there. I think we weren't there for the conversation. But I have to imagine that the prospect of Tencent owning WhatsApp had a lot to do with both the speed and price that that deal got done. Other couple of interesting things. Shortly after that in kind of late 2014, early 2015, Tencent asks Riot to make a mobile version of League of Legends. And Riot, they're like, purists. They're like, no, we can't do that. Like, League only works on desktop. We can't make a mobile version. Tencent's like, all right, fine. We'll just do it ourselves. Tencent decides that we will do this in one of our internal studios. And they agree on some kind of revenue share with League of Legends because they, if I remember right, they hadn't agreed on a rev share yet. So they have their studio start going and building, what is effectively a clone of League of Legends, which they own, but don't have enough sort of power and coercion over Riot to get them to do this thing. They own like 93%. I think that a company and the Riot founders have retained a small stake, but they have control of the company. They operate in control. Interesting. So they start working on honor of Kings internally and they end up releasing it. And it's all Riot IP. Like Riot goes to them and they're like, you have all of our champions in here. I believe I read that honor of Kings does two billion. Annual revenue in China. That's crazy. I mean, it's the most popular mobile game in China. Maybe the most popular mobile game in the world. I think it is the most popular mobile game in the world has 200 million monthly active users, almost all of which are in China. So basically one fifth of the country plays honor of Kings. Think about that. Like that's crazy. Totally nuts. And as you can sort of read between the lines here, the relationship between 10 cent and Riot is a little strained. Well, especially because Riot's like, oh, I'll never work on mobile. The other thing, they do a couple of other things in the gaming world in 2016. They buy Supercell, the finish maker of Clash of Clans. So for $8.6 billion, they now have the largest mobile game in China. They have the largest mobile game in Europe. And of course, it's also huge in North America too. They don't yet have like the crown jewel in North America yet. I mean, they have Riot, but Lee is not unbobled. Well, fast forward to recent times. When did PUBG come out? 2017 or 2016? I'm not sure, but last few years. Last few years, PUBG, this Korean game maker, Blue Hole. Player unknown battlegrounds. Player unknown battlegrounds releases a beta version of a game called PUBG Player unknown battlegrounds with this concept of battle royale. And it takes the world by storm, particularly North America, but the whole world. 10 cent, of course, negotiates for the rights to publish PUBG in China, which they do and they get a small equity stake in the company. Now, meantime, remember, an hour ago, we talked about 10 cent acquiring a 40% stake in a well-known in the gaming industry, but not well-known outside the gaming industry will accompany in North Carolina called Epic Games. And Epic, of course, the maker of Fortnite had Fortnite out at this time when PUBG is taking the world by storm, but did not have the battle royale mode. So it was just a sort of regular sort of spacey fantasy first-person shooter. They did have all of the battle royale stuff in development. So it's not like they just saw PUBG or like build that. This is going to merit its own episode at some point for some excuse to do an episode. We all know what happens, Fortnite, Pippets, and becomes all about battle royale. And is now, I believe, by far, the largest game and mobile game in North America. And so now 10 cent controls the largest mobile games in basically every major mobile internet using content in the world. Yeah. The biggest company, the most important company that's not a household name. On the non-gaming side of the house, they're up to plenty of interesting things there, too. In 2017, they acquire a 5% stake in Tesla. Now, I'm not exactly sure how this came about, but Tencent is, I believe, now the third or fourth largest shareholder in Tesla. Super interesting, especially given Tencent, as we talked about at the top of the episode, located in Shenzhen, which now thanks to Tencent is really Silicon Valley and the modern Silicon Valley sense of all things tech. But of course, it has its roots in hardware and manufacturing. And there are a number of electric vehicle startups and established companies in Shenzhen. And of course, rumors are out there that Tencent may be interested in getting in to that game themselves. And then, of course, there was yesterday's, this week's event of the Tencent Music IPO, which happens. And they float Tencent Music publicly. As a $21 billion market cap, I believe Tencent still owns 95% of the company, as we were doing the research, some people out there are starting to refer to Tencent and his management team as the Berkshire Hathaway of tech, not just Asian tech, but tech period. These guys are so precious. And before we drift too close into tech themes here, it is worth pointing out the very recent things that have happened with the company. So last year, 2017 was an insane year for Tencent from a finance perspective. Their stocks started the year at $25 USD and ended the year at $60 USD. Like, this is a company that went from, I think it was like a quarter trillion dollars to a half trillion dollars in market cap in one year. In the last few episodes, we really talked about sort of value creative companies. Anormous company doubling in size, more than doubling in size, wild. 2018, the exact opposite story. They've wiped out almost their entire run-up from 2017. And there's been a couple of interesting things that I think, are you ready to call it tech themes? That mentioned them and go into tech themes a little bit? I, let's do it. With the one, I was thinking about what to do and what would have happened. Otherwise, I think we basically covered it. The most interesting thing to me is what if Xiaomi had built, which if MiTat had succeeded? But again, I don't think it could have because of the iOS Android, like the cross-platform aspect. And the network graphed. Yeah, and the network graphed. I like that. I like that. Let's build that however you want. 2018, the stock is sliding. What's going on? There's a couple of interesting things. One is people are very worried about some gaming regulation that China has right now, where we're not going to get fully into it. But people are worried about, right now, China has an approval process for being allowed to release and distribute games. And so there's a big hold up on popular titles that Tencent can't release right now. And then secondarily, on top of that, there's also a restriction on what you're allowed to monetize. So people are worried, wow, Tencent may, in fact, get to have their games out there, but they won't be able to monetize them. And before getting into the second competitive thing here, I just want to point out, and other very smart people have pointed this out. Ben Thompson has pointed this out, and Matt Brennan has pointed this out, that if this regulation is here to stay, it tends to protect the incumbents. And so there's a lot going on right now, where people are really worried about, gosh, Tencent's business is really going to be hurt by this, probably not. Like, Tencent's probably the one that's going to be able to have their most solidified by all this regulation that comes in and prevents due to sort of distribution and pure expense of going through the regulatory process, future startups from succeeding in gaming. And so, not just future startups, but again, think about how global this business has become, who else but Tencent could bring non-Chinese developed properties to China now, if like there's a ton of, like, you think Epic is gonna like do that directly with the Chinese government, like no way. Yeah, you don't get to enter China without a partner like Tencent. The other company that I think we should talk about is Bite Dance. And David, what is Bite Dance? Oh, man, what is Bite Dance? Well, okay, so Bite Dance is probably the, we've painted a picture, I think very justifiably so, of a very rosy picture for Tencent. They've accomplished incredible things. They look like they are unassailable in China or really anywhere else. And they own entertainment, right? They own entertainment in China on the game side and on the social networking side. Yep, Bite Dance is the biggest threat to Tencent out there right now. And it is a very, very real threat. It's so interesting, like, you know, the tech thing we've talked about a number of times about things, I think this is originally a Paul Graham idea of like things looking like toys when they start and then becoming much more than toys. So Bite Dance started a couple of years ago. I believe it was a news aggregator app, Tohtiao, to start of a aggregate in content and news into a reader on, you know, on mobile devices, has morphed and changed into that plus video aggregation and micro video production. They acquired musically, which was, folks in the US probably remember, was a big kind of music video lip syncing sing-along app, co-developed here in China. That became part of Bite Dance with that. All that has gotten merged into TikTok, which is crazy if you haven't tried it. Like you guys all need to download TikTok and be prepared to be confused and have your mind blown. And, you know, has kind of become like, I don't know what the, what's the best way to describe it? Like kind of like YouTube, right? Like all types of video algorithmically surfaced for you based on what you love, both from your friends and official accounts. It's very like synchronized to music. Yeah, I don't know why the content is so different, but they're really wacky videos and they're short form and they're all sort of synchronized to music. I don't think we've ever sounded like older. We are actual grandpas. Then at this moment, oh, the fact that, but take our word for it from a business model perspective. This is a huge threat to Tencent, which the key to making all of this work is the four hours a day that people are spending on, which at and Tencent properties. If that starts getting eaten away by something else, then the opportunity for building the ecosystem and serving them goes to where those eyeballs are. And that is why bite dance, a company founded, David, he said a couple of years ago, just raised capital at a valuation of $75 billion. Yes, and I believe that makes it officially the world's most valuable private startup. Because I believe Uber's still held at 70 or slightly below. Yeah, and their last share tender was in the 50s or 60s. So what? Like, yeah. OK. Incredible. So count that as the major credible threat if bite dance is able to turn into a platform company the way that Tencent had. Yeah. When I think for me, I guess I already said it, but what that highlights for me in tech themes is the power of the business model that Tencent pioneered of this freemium microtransaction business model. This is a huge development for business period and tech-enabled business globally. Think about things like Kimberly, our LP program. It's a direct result of this. In the old world, podcasting is a perfect example. People have been trying to make advertising in the traditional US-centric way of adding supported content, work, and it hasn't worked, and it hasn't worked, and it hasn't worked. This other approach has worked at least equally well for Tencent, and we're starting to see it elsewhere. And it'll be very interesting to see how bite dance starts to build their monetization and business model around what they're doing. So Tencent's core products do well in China. And to the extent that they aren't doing well in China, or they're doing well outside of China, it's with either sort of expats or people that do business with Chinese, but I don't use WeChat. I mean, the core. Not their investments, the things that they've actually, yeah. Those things do well in China. The way that they've gone to the rest of the world is through investments. And I'm sort of wondering, do you think their future is really more as an investment company than you alluded to the Berkshire Hathaway thing? I'll go out on a limb and say Tencent's core products or copies of things that were doing well elsewhere, sort of fitted to make sense in China and nail the timing and the distribution in China. And then they were able to grow tremendously by investing in companies elsewhere. Are they an innovative company? Or are they sort of a very good, sort of ruthless cutthroat investment and copying company? Both, of course. So, okay, this was my other tech team too. This is such a great question. I'm so glad you asked it and that it's come out in this episode. This is a core question that people have asked for years about Tencent. Don't they just copy everything? And I think we've tried to paint the picture throughout this episode of going back to that pony mock, one of his few public quotes of like, yes, he starts it with like we stood with the Isaac Newton quote of like we stand on the, we see so far because we stand on the shoulders of giants, IE, we copy things. But like it's not just the copying, like you have to adapt it in the right way for the right local market. And I think that's the nuance here. And that's why we chat is so powerful in China and it has never worked anywhere else. That's why what's happened is so powerful in Europe and it doesn't really work in the US and all the things that work here. Like they're just these element, like take the US for example. IMessage is, the market is so fragmented because IMessage is so baked so deeply into iOS and iOS was the first smartphone available here and the US and has a toehold, an unassailable toehold on at least the high end part of the market. Thus something always needs to be like, there's enough of a network there among IMessage that it's viable, you know. Those dynamics are not the same in other markets. What's interesting is as you think about network effects and monopolis, like everybody's always asking, when is Tencent going global? Why aren't Tencent's products working elsewhere around the world? And this is it is that like they can't, you know, like there are elements of these markets that you can have a monopoly in the local market and the local markets can be enormous. They can be the size of China or the size of Europe or the size of North America. But like what is the right thing to unlock? That market is not necessarily the right thing to unlock another market. You see this in ride sharing too. Like the way D.D. works is super different than the way Uber works in the US. Is different than the way the Indian ride sharing companies work. Like you need to accept cash in India. Like you would never use cash with Uber in the US. Sometimes the company can like see around corners enough to or be visionary enough to serve, create different versions of the product to serve those different markets. But it's really hard. And that's why I think more often than not, you get these local monopolies. So you're asserting that for many of these products, it's actually not a global market that's addressable to them. That's a conglomeration of local markets. Some of what you're going to be very dominant others you're going to be fighting for scraps and others you're going to have nothing. Yeah, I mean, I think that the one example I can think of that is very, very clearly an exception to this is Airbnb. Because there's such significant cross market network effects. Like you travel to another place and need to have that platform there. Like I don't really care that Europe is based on what's app if we're messaging and that China is based on wechat. And when I need to interact with people that are in those networks, I just download that app. Like that's fine, but I'm not going to use it day to day. Whereas the whole value prop of Airbnb is like, I'm traveling there. So I want one global network that like everything. And I think this is why Airbnb is, I believe it's exceeding to a greater extent than other Western companies in China. Because of this pressure to like make it all one network. Well, speaking of networks, my last, I think we touched on this a lot, but my last real theme to think about here is when you are already a power having the hundreds of millions of users that they had on QQ, if you have the product right, or even if you have the product within spitting range of the market leader, you really can just kind of go win in that category too. The way that they encouraged aggressively all the QQ users to become WeChat users, and you just see it time and time again with Facebook today. I mean, they could have bought any number of the Instagram like services and probably promoted it to the point where it became the winner. Instagram was definitely the best product, and definitely had the most users and the most growth at that time. But there's a pretty interesting thing going on now with these like social networks where you really can sort of promote something to the point of being successful. If you're able to successfully move users over. And I think shy of the platforms changing that in a big way, like making it so that you could imagine like a way that Apple or Google could make it impossible for Facebook to so aggressively leverage your use of the Facebook app to get you to download Messenger and become the dominant messaging app in the US. I don't exactly know how that would work, but shy of something big in the product at the platform level changing like that. We're going to continue to see this where since the, when the platform wars were sort of settled in a market by market basis, that's who gets to decide what the next product on that platform is. Part of the core of what Ben Thompson has talked about for years now of that Facebook should never been allowed to buy Instagram because that's like now in retrospect such a clear example of basically anti-competitive warping of a market that is clear that that is what happened from a business dance but legally like the laws aren't set up yet to address such a situation. All right, well, we're setting records here on the episode length. Do we want to go to grading? Yeah, let's do it. All right, so the way that we decided to grade this one is to do the big reveal on what NASPR's investment in 10cent turned into. And then talk about it in the context of other potential candidates for the best investment of all time. So here it is by the numbers. 2001, NASPR's invests $32 million. In March of 2018, when they still owned 33% of the company, that was worth $175 billion. They sold 2% to get liquid on that 2% and also March of 2018, pretty good time to sell some 10cent stock. At that time, it represents a 5,500X from the 32 million to their 175 billion dollars of shares in 10cent. I'll take it. Was it 32 million they invested initially or was it 20 million? They owned a 32.8% stake, but I think they initially purchased it for 20 million. Maybe they did another round or something because at some point here I have a 32 million dollar investment for roughly 47% of the company and then they got diluted down to owning about a third of the company. So I think they may have done another. Maybe they bought more ahead of the IPO to avoid delusion in the IPO. Well, anyway, whatever. At this point, talk about rounding errors. And one other note on that, which is just interesting and very reminiscent of the Yahoo episode with Altaba, that investment makes NASPR's the most valuable company in Africa. But, so remember, I just said that in March, it represented 175 billion dollars of market cap. NASPR's itself is actually valued at $122 billion. Significantly less than their share in 10cent, which does two things. Basically, assigns no value to anything else that NASPR's does, but also of course it has that discount because there's uncertainty in the ability to get liquid on that. While NASPR still owns 31.2% of 10cent, their investors do not look at anything they do other than that ownership as valuable. Sort of like Altaba. Like, let me talk to about in the Alibaba episode, there are two ways that you can invest in 10cent. Like you can go by 10cent stock on the Hong Kong stock exchange or you could go by NASPR's stock. Like they still own 32% of the company. So David, what else is a candidate here? Well, I think the most direct candidate, and this is perfect for acquired and closing out season three here, is the Softbank investment in Alibaba of 20 million for 20% of Alibaba. There certainly are other candidates are Excel's investment in Facebook, which was, gosh, what was it? It was like 10 million for just under 10% of the company or even Peter Teal's angel investment before that. Of course, great investments. What I think is interesting here and my grading criteria is gonna be heavily influenced by holding times and exiting the investment because Softbank, I believe, they came back to the Alibaba episode, they start exiting some of the Alibaba stock, right, along the way. And certainly Yahoo, when they had come in and invested a billion dollars for 40% of the company, they exited along the way. What's interesting is like, NASPERS still owns 32% of the company. And Excel, of course, because they had to do this as the way BC funds work, when Facebook went public, of course, they distributed the shares. The fact that this may be the greatest deal of all time is also an artifact of the fact that NASPERS is not set up as a fund, so they don't have to distribute the shares. It's an A, it's an A plus. The question is whether it is the single greatest investment of all time. I don't know, I think there's a very strong argument here. I'm probably biased because we've just finished two hours of talking about Tencent, but this is incredible. I think I'm gonna go with this as no number one. Please drop it in the Slack or hit us up acquired at FM at gmail.com if you have other opinions, but it's hard to imagine, hard to imagine a better investment. I don't know what NASPERS govern its structure is, but that they've held it for so long and still do. That's amazing. Any other type of governance structure, organizational dynamics, along the way, of course, people would be like, we gotta at least take some money off the table here. A plus, but weird criteria. I think it's the best of all time. I do think so, yeah. Yeah, yeah, I think so. All right, Karabats. Yeah, so mine is President Barack Obama as one of the first podcasters ever. So there was an amazing, I can't even remember where I found this, maybe Reddit on Barack Obama's US Senator for Illinois page that was hosted on, I think it's senate.gov, obama.sentit.gov, which of course doesn't exist anymore. He produced an RSS feed that had a bunch of MP3 files in it starting in September of 2005, which is three months after podcasting launched on iTunes and submitted it. The amazing thing is that the wayback machine preserved it. So we'll put the link in the show notes here to click through and look at it. But there is a page that has, I don't know, 20 or so episodes of obama just kind of check it in with the good people of Illinois. And he's, hey, I want to talk to you today about Hurricane Katrina relief efforts. Hey, I talked to some people recently about avian flu preparedness. I want to spread that information to you. It is so interesting to get a look at number one, what he was thinking in 05, three years before he became president. And also, him honing his voice a little bit. He wasn't quite as presidential. And also what he was doing is just very innovative. I mean, there were so few podcasters then. If you look at the growth over time, of course, there's 600,000 podcasts now, the growth has been exponential. And so over the first few years, it was just a dribble of people here and there. It was a kluji thing to do. You make this weird RSS feed thing. I guess it's still a kluji thing to do. Still you make a weird RSS thing. And nothing has changed. And if you look over on the right sidebar, it says subscribe for free. You can see this button that says podcast RSS, which I think just literally takes you to an XML file. And then there's a third button called odio. Yep. Oh, no way. Oh, I got a hand-seeing that. That's incredible. That's incredible. Well, you know what company we still haven't covered on this show? Odio. Indeed. That's what we should do, though. We should title the episode odio. Ville in joke. All right, my carveouts, I have two, which I know is against the rules, but A, we skipped carveouts a couple times this season. But B, because this is the last episode of the season, I have good reason here. The first is timely, so it has to be now. It may already be a little past, but let's revive it. Go listen to Kara Swisher's interview with the Google walkout organizers. Friend of the show, Kara Swisher. Yes, friend of the show, Kara Swisher. Incredible. And you know, that is great about Kara is on display there. So important, you know, as in the moment we are in here at the end of 2018 and tech and everything going on, just really, really great. In true style, you know, she is of course opinionated, but she brings out like from six people all at once. I can't imagine interviewing six people, remote, some in person, some, you know, remote brings out their stories and the purpose of the Google walkout and everything behind it in a way that like is just masterful. So everyone should go listen to that. On a later note, since this is the end of the year and the season finale and people have holiday travel coming up, an incredible one of the best long read articles I have read in the past few years that came to me as I was just browsing Twitter. Sometimes every now and then I'm like, Twitter, like this is just like a cesspool, I'm ready to give it up. And then like they hit you with the gem, Alan Iverson, a wrote, I'm really amazing. This is my gem, Alan Iverson. It's a gem, I'm not kidding, this is like an incredible gem. Alan Iverson writing for the players Tribune, right? An incredibly long piece just about him and his story and like it's so cool. I grew up in Philadelphia like watching Alan Iverson, you know, play and like everything, of course at the basketball player, Alan Iverson, he changed so many things. Like there would be no, you know, everything about what the NBA is today comes from Alan Iverson and like in some way it's so different from what he was, but like he makes the point in this piece, which is so good on so many levels that like everybody called him a thug, everybody called him like whatever, you know, all the stuff and it was like he was being him, you know, and like that was the thing that like he wanted to be an amazing athlete and like he was so intense and such a so dedicated to the game despite the whole practice thing. He didn't wanna like not be him, you know, now all these NBA players are empowered, like, LeBron is being LeBron, you know, and staff is being staff like it's so good. Can't recommend it enough, even if you're not like a huge basketball fan, like it's just so cool to see somebody who like was so important to their industry in a way that like was misunderstood in so many ways at the time, then 10, 20 years later come back and like be able to write about it and hear it from his perspective. Awesome, well adding to my Insta paper. All right. All right, well listeners, if we don't talk to you again, have an excellent, excellent holiday season. Thank you for being with us on this journey in season three. If you aren't subscribed and wanna hear more, you can subscribe from probably wherever you're listening to this. If you like the show and you want more, you should totally become a limited partner. We would love your support. We're stoked that the program's going well and that's making sort of a meaningful impact on acquired and what we're able to do as far as like travel to guests and being able to promote the show more, bring on more listeners. And really it's kind of funny, like we cover all these companies, capital can sort of equal quality. And so it sort of justifies us being able to go above and beyond and make the show better in a bunch of different ways. So click the link in the show notes, join and become a limited partner. We seriously appreciate it. And we hope you get a ton of value out of the bonus shows that we're doing. I know we have a bunch of fun doing it. So. Indeed, indeed. Well, thank you all as always. Happy holidays. We'll see you in season four. Yeah. Amen.