Episode Summary
Executive Summary: The episode centers on the Russia-Ukraine war and how tech companies, platforms, and sanctions are being pulled into the conflict, with strong emphasis on social media, censorship, crypto, and corporate responsibility. It then pivots to a startup spotlight on Backbone and closes with a wide-ranging interview with investor Joel Greenblatt on valuations, speculation vs. investing, antitrust, China, and the long-term resilience of U.S. capitalism.
Main Topics: Tech industry's response to the Russia-Ukraine war (Priority: 5/5): Jason and Molly discuss how companies like Meta, Twitter, YouTube, TikTok, Netflix, Apple, Google, Coinbase, and Binance are being forced to choose sides through sanctions, content restrictions, and service decisions amid the invasion. Information war, propaganda, and social media (Priority: 5/5): The hosts argue that social media has changed warfare by making atrocities instantly visible, weakening propaganda control and helping Ukraine shape global opinion through Zelensky's communication strategy. Sanctions, crypto, and network control (Priority: 5/5): They debate whether sanctions should extend to crypto exchanges and even internet infrastructure, including Ukraine's request to ICANN to suspend Russian domains, while weighing collateral damage and escalation risks. Corporate leadership and moral positioning (Priority: 4/5): Netflix is praised for refusing Russian propaganda channels, while Apple is criticized for not taking stronger action. The discussion frames some actions as necessary moral choices rather than neutral business decisions. Backbone startup spotlight (Priority: 3/5): The show highlights Backbone, a hardware startup turning iPhones into handheld gaming devices, noting its strong funding, celebrity investors, and fit with the mobile gaming market. Joel Greenblatt on markets, speculation, and capitalism (Priority: 5/5): Greenblatt analyzes the 2021 growth-stock crash, argues that most retail trading is speculation, defends long-term capitalism and consumer welfare, and warns against central planning in antitrust and markets. China, Russia, and rule of law (Priority: 4/5): Greenblatt and Jason argue that authoritarian systems undermine investability because property rights and rule of law are unstable, making Russia and China fundamentally different from the U.S. for long-term capital allocation.
Key Arguments: Social media has made it much harder for aggressors to control narratives; images and videos can shift global sentiment faster than state propaganda. Ukraine's communications strategy, especially Zelensky's direct messaging, has been unusually effective and may be a major strategic advantage. Sanctions are intentionally painful; their purpose is to create enough economic pressure that citizens, oligarchs, or insiders force political change. Tech platforms are not neutral in a war of aggression; restricting RT, Sputnik, and disinformation is presented as a moral and practical necessity. ICANN-level action against Russian domains would be an extreme, potentially destabilizing escalation with long-term implications for internet governance. Netflix made a clear leadership call by refusing Russian propaganda channels, effectively sacrificing the Russian market. Apple has a larger footprint and should consider whether continued operations in Russia are defensible given the war. Greenblatt argues that market outcomes are best judged by long-term consumer benefit, not by speculative attempts to prevent hypothetical future concentration. Most retail investors are not investing but speculating; true investing requires valuing a business based on future cash flows. SPACs and retail access democratize opportunity, but most participants will still lose money if they treat them like lottery tickets rather than portfolio bets. China and Russia are poor long-term investment environments because rule of law and property rights are weak or subordinated to regime survival. American capitalism remains unusually dynamic because failure, competition, and at-will labor markets allow rapid reallocation of capital and talent.
Data Points: iOS market share in Russia: 23% - Jason cites iOS's approximate share of the Russian smartphone market as a reason Apple would have meaningful leverage. Russian smartphone users: 95 million in 2021 - Used to illustrate the scale of the Russian mobile market and Apple's footprint there. Apple iPhone share in Russia: about 25% - Jason estimates Apple's share to show the potential impact of a withdrawal. Ukrainian requested domain controls: .ru, .рф, .su (and possibly others) - Described in the discussion of Ukraine's appeal to ICANN to suspend Russian internet domains. Backbone Series A: $40 million - The startup spotlight notes Backbone's funding round. Backbone valuation: $374 million - The valuation attached to Backbone's Series A round. Backbone device price: $100 - The hardware controller that turns a phone into a handheld gaming device. Gun.io offer: $250 off first hire - Ad read for Gun.io, a developer hiring platform. OpenPhone offer: 20% off - Ad read for OpenPhone business phone numbers. Boast offer: up to $250,000 cash back - Ad read describing R&D tax credit claims for startups. SP500 valuation percentile: 13.5th percentile cheapness / 86.5% of the time cheaper - Greenblatt says the S&P 500 is expensive relative to its 30-year history. Value portfolio valuation percentile: 70th percentile cheapness - Greenblatt's diversified value portfolio appears relatively cheap historically. Expected 1-2 year S&P returns: about 8% to 10% - Historical forward returns when valuations have been at similar levels. Expected 1-2 year value portfolio returns: about 44% - Historical forward returns when Greenblatt's value basket has been similarly cheap. Corporate taxes share of revenue: about 7% - Greenblatt argues corporate tax changes have limited impact on the overall budget. Youth unemployment in Europe: about 25% - Used to illustrate how labor market rigidity can reduce opportunity and hiring.
Pivotal Quotes: "I need ammunition." — Zelensky: Referenced as a defining example of Ukrainian resolve and effective wartime communication. "The purpose of sanctions is to cause pain and suffering that is significant enough to stop the pain and suffering that is greater of a murderous invasion." — Jason: Jason explains why sanctions necessarily affect civilians and why that collateral pressure is intentional. "The intelligent way to invest is to be able to value that business, divide by the number of shares outstanding, and decide whether you're buying it at a discount to your expected value." — Joel Greenblatt: Greenblatt defines investing in contrast to speculation.
Implications: Listeners are urged to see tech, finance, and media as active forces in geopolitics, not bystanders. The episode argues for principled corporate action, skepticism toward speculation, and renewed confidence in U.S.-style open systems over authoritarian ones.
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.