Zack Kanter is a self-described futurist and the founder of Stedi, a modern electronic data interchange platform that helps companies automate their business-to-business transactions.
In this episode of Rule Breaker Investing, Motley Fool co-founder David Gardner brings Zack on to share his thoughts on some of the biggest innovation trends in the world today. Listen in to find out how autonomous driving will affect customers, insurance agencies, and big auto by 2025; why Amazon (NASDAQ:AMZN) is "eating the world"; how news sites filter their stories and why it matters; what Zack learned from working as a partner and supplier with Amazon; Zack's thoughts on commercial drones, Twitter (NYSE:TWTR), and optimism; and more.
A full transcript follows the video.
This video was recorded on June 7, 2017.
David Gardner: Welcome back to Rule Breaker Investing. I'm really happy this week to be joined by a special guest.
Ever heard of Zack Kanter? No? Well, I think this week's podcast interview with him will persuade you that you should have. And you might in the future with this Boulder, Colorado-based entrepreneur and future thinker. We're going to touch on autonomous cars, online news, and Amazon, among other topics. These are big, well-discussed subjects but here with some fresh and really intelligent perspective. I found Zack on Twitter as someone worthy of a follow, but with this interview I can now call him a friend...a friend of The Fool. So join us, stay a while, and listen.
Gardner: Zack Kanter is an entrepreneur based in Boulder, Colorado. He's presently the founder of his start-up, Stedi.com. That's S-T-E-D-I. After having previously started one company that he's still overseeing a little bit, he has his own blog at ZackKanter.com. That's K-A-N-T-E-R. He's impressed me with his independent thinking and foresight. His focus on the future. And yes, I do believe, maybe a Rule Breaker at heart, but I'll let him say. Zack, welcome to Rule Breaker Investing.
Zack Kanter: Yes, thanks for having me. Excited to be here.
Gardner: Zack, I think you first came to my attention with your blog post. It was two-and-a-half years ago. It was entitled, "How Uber's Autonomous Cars Will Destroy 10 Million Jobs and Reshape the Economy by 2025." You were deeply thinking through the implications of autonomous vehicles, and it's not just to save lives and the productivity gains for individuals, but it's many fewer vehicles, you were saying. Many fewer vehicles necessary. Lower car sales. Dramatically reduced urban parking needs. The potential disruption of auto insurance. The list goes on. Thank you for that. Zack, would you like to start there?
Kanter: Sure. I think in 2017, where we sit today, many of the thinking around autonomous cars has advanced a lot than where it was two-and-a-half years ago. I think many people, at least in the tech circles that I'm in, take autonomous cars as an inevitable future in the foreseeable near term, but back in 2015 or 2014 when I wrote that, I think it was less of a consensus view.
So yeah, the general idea is that you don't need to rely on people purchasing these $100,000-plus autonomous cars which are going to be quite expensive when they first come out due to the cost of all the centering technology and everything. What you need are people to be able to be willing to do on-demand autonomous ride-sharing.
So an example of that would be two years ago, I would have said Uber -- today, maybe Lyft or another company like Tesla -- operating these fleets of autonomous cars, and instead of me having to buy this car for $100,000, I'm buying a ride from Manhattan to Brooklyn for two-and-a-half dollars because there is no cost of driving labor.
Gardner: Zack, do you still think we're on track with the same time frame [of] 2025 that you had in mind two-and-a-half years ago?
Kanter: Well, it depends. I think the answer, and one thing I was thinking about there, is it depends on where you're located. I mean, if you're located in rural Alabama, it's probably not going to be 2025, but in places that have a reasonably high density...80% of the U.S. population lives in a major metropolitan area, so when you're talking about somewhere like San Francisco, Los Angeles, [or] New York, I think by 2025 there's going to be very few people driving in human-driven cars.
Gardner: I'd like you to ignite a little fear on this podcast, briefly. Pretend that I'm either Geico or Ford. What do you have to say to me about 2025?
Kanter: Oof! OK. I don't want to offend [anyone from GEICO or Ford], here, but I guess I'm about to. When it comes to insurance, the whole market is predicated upon the fact that a human is a fallible driver. Ninety percent of accidents that happen are due to human error and when you build an autonomous car, the common fallacy that people have is that an autonomous car needs to be perfect in order for it to replace human drivers. It actually just needs to be better than a human driver and it turns out that's not actually that difficult.
So when you have an autonomous car, the number of crashes goes down dramatically. And the other interesting piece is the whole question of what happens if an autonomous car does get in an accident. Who is liable? There is no driver driving, so is it the person who made the car? Is it the person who operated the vehicle? Is it the person who owns the vehicle? And it turns out that companies like Volvo, who are building these autonomous cars, have all stepped up and said, "Look, we're going to take on the liability of any unlikely crash that happens."
So now we've got a company like Geico. I think there's probably a number of good years left in the business, but as we get to these cities starting to be predominantly operated or serviced by autonomous vehicles, I think the bottom really drops out of the auto insurance market pretty quickly.
When it comes to Ford, the challenge that someone like Ford has -- and Ford's a great example, because they're actually one of the more forward-thinking companies when it comes to the impending autonomous and electric car wave that's going to hit us -- [is] when you look at Ford, the challenge they have is that an autonomous car is not a mechanical problem. There's very few moving parts in an electric vehicle.
The problem that they're looking at is a software problem, and it really comes down to a pretty well-known or well-accepted idea in the tech industry, which is that the most productive, the most brilliant software engineer might have a thousand times the value output of a standard software engineer. And if you're a top-tier, artificial intelligence, machine learning [software engineer], which is the type of fields that are necessary for building autonomous car software, you're not going to work for Ford.
And a big part of that is not that Ford isn't willing to pay the money. It's that the important thing for a person like that is working with the smartest possible people. And I'm sure there are a lot of smart people at Ford, but in terms of software development, it pales in comparison to working at a company like Tesla. Working at a company like Uber or Google where you're surrounded by the smartest minds in the world in terms of machine learning.
So I think even though Ford sees the future, the likelihood that they're going to be able to compete in this talent war -- and really, the talent builds the product -- is exceedingly low. So I am hugely bearish on all the publicly traded automakers with the exception of Tesla, where even there I think it's not a guarantee that they're going to be the Apple of cars, but I think they have probably the best shot of any of the public companies at present.
Gardner: Now another thing I remember from that blog post. You were talking not just about how all the best engineers might not be going to these companies, but manufacturers, themselves, might not be selling nearly as many cars because we may just not need such a large fleet on the highway given that a lot of our cars -- mine, certainly -- might just sit in a driveway or a garage a lot of the time. So do the math a little bit for our listeners, there, Zack.
Kanter: Yes, it's an interesting point. When you look at a car as opposed to a house, a car is usually the second most expensive asset that somebody is ever going to buy. And a house, you're utilizing eight or 10 hours a day, so it's like a 33% asset utilization rate. When you look at a vehicle, it sits unoccupied in a parking lot or in a garage something like 93% of the day, so you're talking about an asset that's just sitting there doing nothing.
I think what we're looking at, in terms of a future with vehicles, is approaching 100% utilization rate of vehicles. So you can imagine a vehicle that's currently operated by someone who's driving for Uber or Lyft is being utilized far more than my car is, which is currently sitting outside the office in a parking spot.
And as we start to utilize vehicles more and more, it means that the number of vehicles that need to be produced dramatically goes down. So when you look at a car that's going to be operated by someone like in Uber, it's going to be constantly in rotation except for the possibility of charging or refueling, which I think is likely to happen sort of on the fly with these hot-swapping battery stations, as opposed to sitting on a charger for eight or nine hours in order to refuel.
Gardner: And Zack, let me ask you a little bit about the idea that we will be renting or just sitting, like we are in an Uber or someone else's car that we don't own. What goes through my mind is my recollection of a bad experience I once had with Zipcar where I rented the car... I didn't rent the car. I was part of the club.
I picked up the car that I had tapped online that I was going to drive. When I got there -- it was going to be for a longish trip taking other people -- somebody had not exactly cleaned up the snack food on the floor of the back seat. And I think about the phrase "the tragedy of the commons" where there might not be that much incentive to keep a car that you or I don't own, especially being just autonomously driven, clean. Do you think that people who have appreciated owning a car -- and making their car smell good, and look nice -- might be a little bit bereft in an all-autonomous fleet world?
Kanter: I think what you're touching on is a bit of an imperfect market. So when you talk about Zipcar, there are not that many people using it. I'm sure, in terms of an absolute number, there are a lot of people, but in terms of a percentage, there are not that many people who are doing it. And so you see a relatively low number of cars involved in this and a relatively low number of transactions.
Now, you can imagine people often are thinking in terms of the current model of Uber or Lyft where you're standing on the street corner in Manhattan. You press a button on your phone in order for Uber to schedule the ride and come pick you up. I don't think that's the future when it comes to autonomous vehicles. I think we're actually in a temporary period in between a taxi, which is actually very convenient. You just take any taxi you want. You walk up to the vehicle, you open the door, you get inside, and you tell the driver where you want to go.
In the future, when we have tens of thousands of autonomous cars in Manhattan and they're driving all around everywhere; instead of having to figure out which Uber is yours, you just walk up to any one of these vehicles, which is maybe queued up on the sidewalk somewhere. You jump into the vehicle and you now scan some sort of a QR code or you use an NFC chip in order to check in to the vehicle and then it brings you to your destination.
So in terms of the sort of circumstance that you're talking about, I think the likely thing is you open up the door and it turns out that the person who was in it before you was drunk, and had made a mess, and spilled French fries or worse all over the place. You simply close the door and press some sort of a button. That cues the vehicle for cleaning and you jump into the next vehicle in line. So tragedy of the commons aside, I just don't see it being a huge problem. I think that inevitably there's pretty easy ways to solve these problems.
Gardner: A really good point about once the utilization or the market is mature it's a different world. Thank you. And before we shift topics, are you still impressed by Uber?
Kanter: Ooh! That's a good question. It's one of those companies where you ask how many problems or mistakes can a company go through in a short period of time and still recover and come out on top. I mean, it's the question of is this the momentary dip before the end of the happily ever-after story, or have they given up enough ground for someone like a Lyft to gain traction?
I don't know the answer to that. I think it's certainly a worrisome trend, there. Three years ago I would have told you they're the indisputable leader in terms of ride-sharing and they're the likely winner in the autonomous future. That's a good lesson for me in that it's way easier to predict where the trends are going than who the winners are going to be. So that's sort of a diplomatic answer, but I am not as confident as I used to be.
Gardner: Well, Zack, I follow you on Twitter. Are you @zackkanter on Twitter?
Kanter: Yes. Z-A-C-K-K-A-N-T-E-R.
Gardner: So you're a fine follow. I think I recall a great tweet from you, that got a retweet from me saying, in so many words, you wish there were an online news site, somewhere, where you could filter the stories and only see ones that affect a great deal of people. In other words, it would filter out all the stories that tend to grab the headlines, like, well, let's just take today's story of some crazy guy who attacked a Parisian officer with a hammer. Am I right that that was your tweet? Maybe give us more than 140 characters on this.
Kanter: Yes. It's one of those things that if I had all the time in the world and parallel universes, I think that would be one of the companies that I would want to build. When you look at the news, even a relatively decent news aggregator like Google News, you go to it and the vast majority of the stories are about things that only affect a certain, very small subset of people.
So the hammer attack in Paris you could maybe say that that affects many thousands of people because it has terrorism implications. But how about a man [who] gets in an argument with his wife and shoots her and the family? I mean, that's the type of thing that I think there are horrible effects of being exposed to that. I'm sure there's people who could argue the other way, but in my sort of area of interest in news, I would love to see the things that are not gossip-related [or] not violence-related unless they're really, truly on a national or global scale and are going to be relevant.
Gardner: I grew up in Washington, D.C. I'm 51, and when I was about 17, regularly on the nightly news -- as still there is on the nightly news in so many cities -- the lead story would be somebody was shot in the city. And it happened enough back then, in the late 1970s, early 1980s that Washington was called the "murder capital of the world."
Over the last 30 years, I have watched the same kind of reporting on the nightly news, but what a lot of my fellow Washingtonians may not recognize -- but the facts are very clear -- is that there are about 20% the number of homicides today in Washington, D.C., than there were 30 years ago. Literally violent crime down 70%-80%. But it's hard to understand that or get that sense or realize that, darn it, we're much safer walking around the streets of this city, and this is not a Washington story. This is a nationwide story.
And you're right. I think it would be great if there were that. Is there a site? Is there that site somewhere on the internet that you found that is a great news aggregator with good filters?
Kanter: Well, you're touching on the idea of availability heuristics and the recency bias. Directly after somebody drives a car into a crowd of people, if you were to ask somebody what's the likelihood of getting run over by a terrorist, they're going to dramatically overestimate the possibility that it's going to happen.
I think about that in terms of investing all the time. So I'm sort of at the other end of the spectrum, which is because I'm highly exposed to the tech industry, I generally dramatically overestimate how quickly technological change is going to happen, and that's because I'm in an industry that moves quickly [and] that adopts things quickly; so for me it's easy to forget about the long tail. The adoption curve. I fall prey to that all the time.
So when it comes to investing, and when it comes to various news sites, I think there's some very good sites in terms of viewing news that doesn't have all this riffraff in it. All the stuff that doesn't affect a huge amount of people. But it's really in a specific vertical, so I could name a few for technology. Maybe I could name a few for automotive. I could name a few specifically for software. I'm sure you could name some for investing. But when it comes to a broad-based news site, I can't really think of one that filters out the sort of unimportant news or not world-changing news in an efficient way.
It just reminds me of a tweet I saw recently, thinking about Twitter. I believe it was Naval Ravikant, who is the founder of AngelList. He said the news is a dish best served old. And I very much agree with that. I think that listening to breaking news -- whether it's on the radio, or TV, or reading the news on a daily basis -- is generally not going to be helpful. Your best bet is to wait a couple of weeks for a story to develop and you miss a lot of this time wasting of misdirection.
Gardner: So well put -- a Rule Breaker thought. You may not start it, I'm not going to start it, but somebody could start that site and I know one thing. I know your first two users, future entrepreneur whoever you are.
Zack, in 2011, venture capitalist Marc Andreessen famously wrote an article in The Wall Street Journal entitled, "Why Software Is Eating the World." In so many words he predicted that things like apps in our iPhones would render hardware like GPS devices or, heck, even just wallets irrelevant. [That] software is cheaper, more upgradeable, tweakable, ubiquitous, and just flat-out more profitable than slow and clunky hardware solutions.
This past month you wrote an article in TechCrunch with a highly allusive headline: "Why Amazon Is Eating the World." So let's start, Zack, with not why. Let's start with how.
Kanter: You know, from sitting in and following Amazon for some time...My first business was an auto parts business, and I had Amazon as a customer from a number of different ways: Both as what they call a vendor, where Amazon is cutting purchase orders to the auto parts business and the business is shipping products in bulk to Amazon's warehouses, and also through their Marketplace program, where any third party can sign up and sell products alongside Amazon.
So having been involved in those two programs and using Amazon's Web Services, which have gotten a lot of headlines in terms of their servers for rent, basically, I was astonished at the pace of innovation. And you think about Marc Andreessen's "How Software Is Eating the World" article. You see software moving at such an unbelievable pace, you have to understand that there's some sort of market force behind it. This is not just one person's will. And when I think about Amazon, I get a similar feeling.
So you look at Amazon from the outside. The sheer number of programs that they have in terms of commercial successes -- like Amazon Web Services, like Amazon Marketplace, Fulfillment by Amazon, Amazon Go, their bookstores, and their cashier-free retail locations, [and] all of these different programs they have -- you get the impression that it's a market at work. It's not just the will of Jeff Bezos sitting in a room and coming up with all these genius programs.
So the idea behind this post that I wrote is that the things that make Amazon very difficult to innovate against is not their broad advantages like Amazon Prime, or one-hour delivery, or their drone program, or any one of these individual things that they have going on. It's the fundamental structure of how they've built the business.
And in software we have something called the service-oriented architecture where you're basically opening up all of your services to be consumed by outside developers, and that's what Amazon's done from a business standpoint. What they've done is successively opened up every single piece of the business into a separate platform, which opens it up to outside competition.
And I'm happy to chat a little bit more on that because I know it's sort of an abstract idea. But when you think about something like Amazon Web Services -- which is Amazon's first foray into this service-oriented architecture -- [it was] when they were hyperscaling back in the early 2000s [and] these types of enterprise-class data centers were not widely available.
So what Amazon did was they built out their own technology infrastructure, and they realized when they turned on a new center data, maybe one-third of it was extra capacity that they weren't going to need for the next couple of years. So they figured they would open up a platform and sell that additional capacity to external developers. And it's turned into a huge business. It's turned into something that has a $14 billion revenue annual run rate which is bigger than many of the current software companies that are out there.
But the sort of revenue bonanza that's come from this is a footnote compared to the organizational insight that Amazon discovered, and that's that by carving out each piece of the company as a separate platform, they could future-proof themselves against inefficiency and stagnation because now, all of a sudden, they have customers for all their internal systems and they can't just sit there and let all that stagnate.
Gardner: Really great insight. Zack, what was your experience working as an effective partner or supplier, it sounds like, with Amazon? What did you learn from that?
Kanter: You know, when I think about a company like Apple, Apple has had like a dozen hit products in their run over the last 15 or 20 years -- of course, as long as you don't count each iPhone as a successive hit product. Each one of these categories has been a hit for them. And you look at Amazon, and they've done that almost an order of magnitude higher. They have dozens and dozens of products that are commercial successes, and I think it takes a company that's very willing to make mistakes and also that's willing to do things that many other companies are not willing to do.
I think about [their] program called Fulfillment by Amazon. And what that is, is as a brand of products...Let's say you're making water bottles. You can ship these water bottles to Amazon's warehouse, and Amazon will ship them. You own the inventory, but Amazon will ship them to your customers. So if you're operating a WaterBottle.com website and a customer comes and places an order, Amazon will actually ship that to your customer, even though they're not party to the transaction at all.
The interesting thing, there, is it's sort of the opposite of what many companies say. They say, "Hey, look, we have this moat. We have this whole fulfillment network. What we want to do is keep it proprietary and not let anybody else have access to it." And Amazon's done the opposite, which is to say, "We're going to open up all these pieces of our platform for anybody to use. We will learn something from it, we'll profit by it, and we'll own their services by doing so."
And you look at a competitor of Amazon, someone like a Netflix, because Amazon competes against them head-to-head with Amazon Prime Video. Netflix's entire technology infrastructure runs on Amazon Web Services, which would have been a very odd thing to consider 10 or 15 years ago.
Kanter: "Let's enable our competitors." But they're doing it and they're doing it very well.
Gardner: Zack, because you do spend a lot of time thinking about the future...And, darn it, we all should. As investors we benefit immeasurably if we can. We don't have to be right every time, but if we're just thinking [then] often we're asking the right kinds of questions and avoiding lots of pitfalls. So as a future-focused guy, do you want to make any predictions about Amazon?
Kanter: I think Amazon is certainly going to become the world's most valuable company when you look at what they've done. You know, many people think Amazon's overvalued. But when you look at the opportunity that's in front of them, one thing that comes to mind is Amazon's rumored to be starting an online pharmacy. And they have somewhere in the neighborhood of 350,000 employees. They have this enormous internal test-bed of customers, so they could, theoretically, spin up a pharmacy and have 350,000 employees who are already customers of it when they're ready for launch.
Another option would be something like payroll. If Amazon wanted to build out their own payroll company as a service, they could go head-to-head with someone like an ADP fairly easily. Of course, the ones that are more often talked about is someone like a FedEx or a UPS. I think it's very inevitable that in the next few years Amazon is going to get into small parcel shipping.
They are sort of thumbing through their income statement and picking off the biggest line items in terms of cost. One of those was servers. They turned that into Amazon Web Services. Another of those was warehousing, and they turned that into Fulfillment by Amazon. So I think that we'll see Amazon come as a head-to-head competitor with UPS and FedEx in the next few years.
In all these things you just realize Jeff Bezos always says Amazon's truly on Day 1. They still think they're a start-up. They still think the amount of revenue that they have before them is tremendous in terms of uncaptured revenue. And I think that's true not just from a retail standpoint, where only 15% of retail goods are sold online, [but] I think that comes to the services area, as well. I think there's just a tremendous amount of services that Amazon could still devour and that the upside is tremendous.
Gardner: Potentially the most valuable company someday. Right now still $200 billion behind Google, or Alphabet I should say. Alphabet at about a $680 billion market cap. Amazon tipping the scales at $480 billion. Apple at just over $800 billion. Probably the world's most valuable public companies, so still a lot ahead for Jeff Bezos.
And before we totally move away from Amazon, I have to ask you. What about Amazon Prime Air and drones? Are we going to have drones delivering us packages whether we're in rural Alabama or Boulder, Colorado? And if so, when?
Kanter: When it comes to drones, I think we're far more likely to see that happening in rural areas than in urban areas. When you talk about Amazon building out their version of a UPS or FedEx, they're going to go after the densest areas first, which leaves all of these rural areas that need to be serviced by a FedEx or UPS, and that cost is going to be going up, because Amazon's overall spend with them is going to be going down.
So I think that drones are sort of a nice option. The technology is getting there. I think there's a regulatory framework that needs to come in, in order for there to be the right airspace. In terms of an altitude that they can fly at. But I could certainly see, in 10 years or so, Amazon utilizing that for some of their rural deliveries. [If] you live in a 30-floor apartment building in Los Angeles, the chance that a drone is going to fly up to your window I think [is] a lot lower.
Gardner: Zack, let's talk briefly about you as an entrepreneur. Stedi.com I mentioned earlier (S-T-E-D-I). And having clicked over to your site and seeing it's a beta site right now, I recognize EDI, that part of your Stedi, as the phrase "electronic data interchange," which I have to admit I didn't really know. That didn't come trippingly off the tongue or quickly to mind for me, even though I do like learning about technology and I'm an investor. Can you break that down for us and give our listeners the two-minute elevator pitch that you would want to give a venture capitalist?
Kanter: Sure. When you look at EDI, EDI is a framework for exchanging everyday business-to-business transactions such as purchase orders, invoices, ship notifications between retailers and their suppliers. So as an example, if you're a company like Fitbit and you're doing business with Amazon and Best Buy, the only way to automatically receive purchase orders and send ship notifications and invoices to these retailers is via a framework called EDI.
EDI is a technology that was developed in the 1980s, or was really popularized in the 1980s by Wal-Mart, and so many of the EDI service providers, today, are 15 or 20 years old and operate on this archaic technology stack that makes it very expensive, very difficult to implement, and very painful to use on an ongoing basis. So we're basically building a modern EDI platform that allows any one of Amazon or Wal-Mart or Best Buys' tens of thousands of suppliers to automate all the order flow back and forth. We're making it 90% faster to implement and 50% cheaper to operate on an ongoing basis.
Gardner: That's sounds pretty compelling. Paint a picture for us, Zack, about how things used to be in the 1970s using, let's say, a fax machine and then what's happening now in the 2000 teens.
Kanter: When you look at how things used to work in the 1970s, you're exactly right. I think a fax machine was probably a pretty big competitive advantage back then. People were receiving purchase orders by faxes, even by mail. EDI was originally developed with this sort of mainframe-to-mainframe connection that would allow companies to send orders between their business systems -- that might be like an SAP, or an Oracle, or a NetSuite -- without having to manually key any of these orders.
And how things work today is much the same. The same providers who popularized this stuff in the 1980s are the major players now, and they're processing hundreds of billions of dollars' worth of retail transactions on their framework and because of that, they're not really able to make changes on an ongoing basis. It's similar to how the airlines operate on these archaic data centers and green-screen systems because they don't have the time to stop and rebuild things from the ground up.
So the difficulty of implementing EDI today -- let's say you're a Procter & Gamble and all of a sudden you start onboarding a new retailer like Amazon. The difficulty of implementing EDI could take 12 months for an implementation, it can cost a huge amount of money, and it can still involve a lot of manual entry. So you wouldn't believe the scale of companies that we talked to who still have people, full-time, hand-keying orders and tracking numbers in all day long.
And so the dream of what we're doing is eliminating all of that time-intensive, capital-intensive, and error-prone entry of orders and entry of tracking numbers and invoices in order to free up companies to spend their capital on things that are going to generate money instead of just burning money on their income statement.
Gardner: And so the future is computers just talking to each other with pre-agreed, templated versions of invoices and things, and just exchanging information, whereas still today we have people just sitting there having to read an email and having to process an order and send it off another email or still type out a piece of paper.
Kanter: Yes, that's exactly right. And it's funny to say, but I'll say the future, which Stedi is trying to bring, is probably what your current listeners imagine as the present being. Nobody imagines that Procter & Gamble hand keys their orders, but it still happens. They say the future is already here -- it's just not evenly distributed. [That's] the famous William Gibson quote. We're basically trying to evenly distribute that future today, and then obviously we have a huge road map for innovating on top of that a few years down the line.
Gardner: Really well put. All right, let's close it out with one or two questions about the future. Let me ask you, Zack. Are you an optimist?
Kanter: Yes, I'm certainly an optimist. I think that we're living in the most exciting time in the history of the world. I think there's more opportunity today. I think it's easier to start a company today and be successful today than it ever has been. I am not very optimistic about most of the publicly traded companies that are out there, but I'm hugely bullish on the start-up world in general.
Gardner: And are you a stock market investor? Do you ever pick a stock?
Kanter: Yes, although I'm generally more likely to be short than long. I think it's way more difficult -- at least from the position that I sit in -- to predict who's going to be the future in the automotive industry as opposed to predicting who is not going to be in the future, so I'm short a number of stocks and I've done pretty well there. And I'm long Amazon and Tesla.
Gardner: Wow! And what about Twitter?
Kanter: Twitter! Oh! I would love to be a Twitter optimist. I think it's an unbelievable tool. For me, it feels like taking a sip from a fire hose in terms of real-time information. The ability to learn and connect with other smart people. I mean, I think the likelihood that you and I would have ever connected on Facebook is very small, so I think Twitter is an unbelievable tool, but they seem to have a difficult time turning that into a company that's increasing in value.
And it's funny. You talk about Twitter and they always say, "Well, the user growth has stalled out." Maybe Twitter isn't meant for everybody. I think that maybe Twitter is more of a niche tool. Maybe it's a tool for a different type of person who's addicted to real-time information and addicted to learning about all the latest things that are going on. And I don't mean in terms of pop culture. I mean in terms of whatever vertical interests you, whether that's gossip, or technology, or investing, or whatever it might be. But they do seem to have a hard time turning that into increasing dollars.
Gardner: I agree with you it's a niche tool and, at least, relative to Facebook, it's a niche company. Twitter today worth $13 billion and Facebook worth $447 billion. So it's not even close, but I certainly do use Twitter a lot more than Facebook. Perhaps you do, too.
Zack Kanter, thank you so much for joining us on Rule Breaker Investing. We'd love to have you back in the future. Anytime you have something interesting that you're thinking about or want to talk about, we'd love to have you back.
Kanter: I'd love to be back. Thanks so much for having me.
Gardner: Well, I hope you enjoyed that as much as I did. Next week... Well, I'm not really sure what we're going to do next week. I have three different ideas. I guess we'll just see what happens.
You can check out past episodes of Rule Breaker Investing and all The Motley Fool's podcasts at our podcast center. Just go to Podcasts.Fool.com.
I have to tell you. I listen to pretty much all of our podcasts, but I want to put in a special plug for my friends at Industry Focus. They did a really enjoyable episode. The date is May 29, 2017. If you want to download that and listen to it, you're going to hear all five of our different analysts internally come together for one show. I like to call it the Marvel Avengers version. It's the first time they've done it. I had a great time and laughed out loud at several points hearing from my friends over at Industry Focus. I think you'll enjoy that.
So Podcasts.Fool.com and, of course, while you're there, you can check out our flagship service. That's Motley Fool Stock Advisor. A new issue of Stock Advisor comes out the third Friday of the month with two new stock recommendations from me and my brother, Tom Gardner. So check all that out. Podcasts.Fool.com.
All right, well, to the future! Fool on!
As always, people on this program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Learn more about Rule Breaker Investing at RBI.Fool.com.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. David Gardner owns shares of GOOG, GOOGL, Amazon, AAPL, FB, FDX, F, NFLX, and TSLA. The Motley Fool owns shares of and recommends GOOG, GOOGL, Amazon, AAPL, FB, FIT, F, NFLX, TSLA, and Twitter. The Motley Fool owns shares of ORCL. The Motley Fool recommends FDX. The Motley Fool has a disclosure policy.