Episode Summary
Executive Summary: This episode centers on a strong Super Bowl earnings week, led by Amazon’s blowout results and a bullish discussion of cloud, ads, and subscriptions, followed by a more mixed Apple update and a skeptical take on Meta’s VR strategy. The hosts also explore ad-market bifurcation, cloud competition, Amazon’s potential breakup, and feature an interview with creator/investor Nate O’Brien on YouTube growth, personal branding, and launching Roadrunner VC.
Main Topics: Amazon’s blockbuster earnings (Priority: 5/5): Amazon’s Q2 results are framed as exceptional across AWS, advertising, and subscriptions, with the hosts arguing the company is firing on all cylinders and benefiting from multiple high-growth businesses. Cloud computing race: AWS vs Azure vs Google Cloud (Priority: 5/5): The conversation compares cloud growth and run rates, arguing AWS remains dominant but Microsoft is gaining fast and could eventually reach parity or even surpass AWS, while Google Cloud keeps investing to catch up. Amazon advertising as a hidden giant (Priority: 5/5): The hosts explain how Amazon’s ads work like native commerce content and why its shopping intent and product data make its ad business highly effective and increasingly large. Apple’s services strength and antitrust risk (Priority: 4/5): Apple’s overall growth slowed, but services remained a major profit engine. The discussion highlights Apple’s ad-like 30% App Store take and the antitrust concerns attached to that model. Ad-market bifurcation in a downturn (Priority: 4/5): The episode argues that search/intention-driven ad platforms (Google, Amazon, Apple) will hold up better than discretionary social platforms like Meta, Snap, TikTok, and Pinterest in a recessionary ad pullback. Skepticism toward Meta’s VR/metaverse strategy (Priority: 4/5): The hosts criticize Meta’s heavy VR spending as a bad strategic bet, arguing consumer demand is weak and that Apple’s platform power makes the effort even less likely to succeed. Creator economy, YouTube, and Roadrunner VC interview (Priority: 4/5): Rachel’s segment with Nate O’Brien covers building a large YouTube audience, using search-driven evergreen content, avoiding early monetization, and leveraging creator influence into venture investing.
Key Arguments: Amazon’s scale is so large that 30%+ growth in AWS and nearly $9B in ad revenue make it one of the most powerful businesses in tech. AWS, Azure, and Google Cloud form an effectively insurmountable moat because of the enormous capital required and the long replacement cycle for enterprise infrastructure. Microsoft is gaining meaningful share in cloud due to startup-friendly credits and a more generous ecosystem approach. Amazon ads are effective because they align directly with consumer intent and product discovery, making sponsored results feel like content rather than interruption. Apple is intercepting more searches on-device, which could further weaken Google’s and Meta’s position in ad targeting and user acquisition. The ad market will likely split: essential intent-based ad spend survives, while discretionary social ad budgets get cut first in a downturn. Meta’s VR strategy is viewed as a costly distraction that fails to solve a real consumer need and may harm investors through prolonged losses. For creators, long-term audience trust and search-driven evergreen content are better foundations than aggressive early monetization. Creators can turn influence into deal flow and venture access by investing in consumer-facing companies and leveraging their audience relationships.
Data Points: Amazon Q2 revenue: $121 billion - Amazon reported Q2 revenue up 7.5% year over year. Amazon Q2 net loss: $2 billion - The company posted a quarterly loss, compared with profit in the prior year. AWS Q2 revenue: $19.7 billion - AWS revenue grew 33% year over year. AWS run rate: $79 billion - Discussed as the current annualized revenue scale for AWS. Azure run rate: $55 billion - Microsoft cloud was described as growing 46% year over year. Google Cloud run rate: $25 billion - Includes G Suite, with growth of 36% year over year. Amazon advertising revenue: $8.7 billion - Q2 ad revenue, up 18% year over year. Amazon first-half ad revenue: $16.6 billion - Revenue generated in the first half of 2022. Amazon combined AWS + ads revenue pace: $104 billion annually - Projection discussed excluding retail and Prime. Amazon subscription revenue: $8.7 billion - Q2 subscription revenue including Prime and related services. Prime subscribers: 200 million+ - Subscriber base referenced during discussion of Amazon’s ecosystem. Prime price: $15/month or $140/year - Current subscription pricing cited. Apple Q3 revenue: $83 billion - Apple beat expectations, but growth slowed to 2% year over year. Apple services revenue: $19.6 billion - Services included Apple Care, music, TV+, fitness, and App Store-related take. Apple year-to-date stock performance: down 11% - Compared against peers like Meta and Google. Amazon's U.S. digital ad share: 10%+ - Host says Amazon hit 10% last year and may be closer to 15% now. MicroAcquire buyer base: 120,000+ buyers - Marketplace stats cited in sponsor read. MicroAcquire premium price: $390/year - Buyer-side subscription cost. Odoo app count: 40+ main apps and 16,000+ community apps - Used to illustrate its business suite breadth. Odoo credit: $1,000 off - First implementation pack offer. Nate O’Brien YouTube subscribers: 1.2 million - Referenced during the OK Boomer interview. Roadrunner VC pace: 2 to 5 investments per quarter - Nate described typical deployment pace.
Pivotal Quotes: "Amazon crushed it, Molly." — Jason: Opening the earnings discussion and signaling the episode’s main bullish thesis. "This is an unswimmable moat, right?" — Jason: Describing the cloud market as too capital-intensive for new entrants to challenge AWS, Azure, and Google Cloud. "I think Amazon is going to get broken up in the next five years. And I think that's going to double the price of everything." — Jason: Jason’s stated investment thesis behind his live Amazon J trade.
Implications: The episode suggests cloud and commerce platforms will keep compounding, while ad budgets shift toward intent-driven channels. It also warns that Meta’s VR bet may remain a costly dead end, while creators can increasingly convert audience trust into venture access and investing power.
About This Week in Startups
Jason Calacanis covers startups, tech, markets, media, and all the hottest topics in business and technology. He also interviews the world’s greatest founders, operators, investors, and innovators.