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Elon Musk's Business Origin Story with Zip2 · Elon Musk Podcast

• 0:01
  Hey everybody, welcome back to the Elon Musk Podcast.
• 0:05
  This is a show where we discuss. The Critical.
• 0:07
  Crossroads. That shape SpaceX.
• 0:09
  Tesla X, The Boring Company and Neuralink.
• 0:13
  I'm your host, Will Walden. Elon Musk started his
• 0:17
  entrepreneurial journey when he founded Zip Two and Online
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  Mapping and Directions company in 1995.
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  This early venture played a significant role in shaping the
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  development of online services and the Internet itself.
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  Now, Zip Two was established in Palo Alto, CA by Elon, his
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  brother Kimball Musk, and Greg Corey, and the company's
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  original name was Global Link Information Network.
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  Most people don't know about that, and it quickly became a
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  pioneering force in online city guides and business directories.
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  Now, Zip Two was among the first companies to provide searchable
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  online city guides in business directories, allowing users to
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  find local businesses and get directions to them.
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  This innovative approach laid the groundwork for modern
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  services like Google Maps and Apple Maps and online Yellow
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  Pages. At the time, and at a time when
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  the Internet was still in its infancy, Zip 2's ability to
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  integrate business listings with mapping data was a huge
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  advancement and this showed a lot of potential for practical
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  everyday use of the Internet. One of Zip 2's key contributions
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  to the Internet's evolution was enabling 2 way communication
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  between users and businesses. The software allowed users to
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  message businesses directly and receive fax messages from them.
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  Now, this facilitated online interaction between consumers
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  and companies, and this early adoption of online communication
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  channels foreshadowed modern business customer communication
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  methods, highlighting Zip 2's role in shipping the way
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  businesses interact with their customers online.
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  Now, Elon Musk himself was deeply involved in the technical
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  development of Zip 2, coding the initial system for calculating
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  directions. This hands on approach
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  demonstrated Musk's technical expertise and commitment to
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  solving complex problems, and Zip 2's mapping and routing
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  services were among the first instances of such technology,
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  making it a trailblazer in the online mapping industry.
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  The company's innovative features set it apart from other
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  early Internet services, contributing to its success and
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  influence, and their strategic partnerships with newspapers
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  significantly transformed the online city guide industry.
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  And by providing the technology and platform for newspapers to
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  create their own comprehensive online city guides, Zip 2
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  enabled these established media companies to quickly establish a
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  digital presence. Newspapers like the New York
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  Times partnered with Zip 2 to build online city guides,
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  leveraging their extensive local content in advertising
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  relationships to enhance the value and reach of these guides.
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  These partnerships shifted the focus from pure listings to rich
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  local content, integrating in depth community news, event
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  listings, reviews, and other localized information into the
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  online city guides. This combination of technology
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  and editorial resources expanded the reach and capability of
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  online City Guides, making them valuable tools for both users
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  and businesses. The collaboration between Zip 2
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  and newspapers demonstrated the potential of the Internet for
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  delivering comprehensive local information, paving the way for
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  future online services like Google Maps.
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  And Zip 2's approach to partnering with newspapers also
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  diversified its revenue streams. In addition to business listings
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  and advertising, Zip Two could offer supplementary services
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  like e-mail, calendars, and personalization features to the
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  newspaper partners now. This diversified business model
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  not only increased Zip 2's revenue potential but also
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  showcase the versatility of the platform.
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  And by catering to the needs of both the users and the
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  businesses, Zip 2 positioned itself as a comprehensive
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  solution for anything local online.
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  And the success of Zip 2 culminated in the acquisition
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  from Compaq for $307 million in 1999.
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  This acquisition was a significant milestone for Elon,
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  earning him $22 million for his 7% share in the company.
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  The financial windfall from the sale of Zip 2 provided Musk with
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  a capital and confidence to pursue more ambitious projects
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  in the tech industry, such as SpaceX and Tesla.
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  And the acquisition also underscored the value of
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  potential of Zip 2's innovative approach to online services,
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  validating Musk's early efforts now.
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  Zip 2's influence on the Internet's evolution extended
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  beyond its financial success, though.
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  The company's innovative features and approach to city
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  guides and business directories help shape the development of
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  many online services and business models that became
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  ubiquitous in the modern Internet era.
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  Like we said before, Google Maps, Apple Maps, anything with
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  a map. Zip Two was one of the beginning
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  software companies to develop that.
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  And by demonstrating the potential of the Internet for
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  businesses and driving the adoption of online advertising
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  and services, Zip 2 played a pioneering role in the early
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  development of the Internet. Google's online services with
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  advertising is partly due to Zip 2's innovations, and one of the
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  last impacts of Zip Two was his pioneering role in the Software
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  as a Service, or SAS, model. Rather than selling its service
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  directly to consumers, Zip 2 licenses software to newspapers
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  and companies. This early example of the SAS
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  business model became prevalent later in the tech industry,
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  influencing how software services are delivered and
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  monetized. Think your Netflix subscription.
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  You don't pay a one time service to get Netflix, you pay on a
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  subscription basis, and that's what these newspapers and
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  companies were doing. This innovative approach was new
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  at the time. I set a precedent for future
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  tech companies, and the early success of Zip 2 provided Elon
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  Musk with invaluable experience and insights that carried into
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  his subsequent ventures. The lessons learned from
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  building and scaling Zip 2 informed Musk's approach to his
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  later companies such asx.com. Not the current x.com, but the
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  one back then, which became PayPal.
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  Also, SpaceX and Tesla and the technical challenges and
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  business strategies have navigated during this time at
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  Zip 2 helped his entrepreneurial mindset and prepared him for the
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  more complex challenges he would face in the future.
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  Now, Zip 2's legacy is evident in the online services and
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  business models that followed in its footsteps.
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  The approach to integrating business listings with mapping
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  data, enabling online communication, chat between the
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  businesses and the people, and partnering with established
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  media companies set a new standard for future online
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  platforms. So Zip 2's impact on the
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  internet's development is a huge one, and Elon's technical
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  expertise and hands on involvement in Zip 2's
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  development was crucial. If it wasn't for Elon Musk to
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  push this forward, it would have never been done, and maybe the
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  Internet that we have now would be completely different.
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  Musk's work at Zip 2 demonstrated his potential as a
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  tech innovator and set the stage for his future advancements in
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  the tech industry. Partnerships with newspapers
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  like The New York Times showed the potential of this sort of
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  technology between startups and established media companies.
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  These partnerships allowed Zip 2 to rapidly expand its reach and
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  lend credibility to the online City Guide concept, and the
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  success of these collaborations highlighted the benefits of
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  combining technological innovation with traditional
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  media. Now, Zip 2 facilitated the
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  transition towards a localized online advertising model.
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  Think of Google ads or even Facebook ads.
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  They are very localized to the person actually.
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  And Zip Two was one of the first companies to facilitate that
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  transition, though it was at a broader scale.
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  This is one of the first places to do that now.
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  They combined business directories with local, rich
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  content. Zip 2 enabled targeted local
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  online advertising. Now that the Internet modern
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  giants use the same technology, Zip Two was their first.
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  The strategic approach to monetizing online services was a
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  key factor in Zip 2's success and influence on the Internet's
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  development. Zip 2's features such as the
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  early adoption of mapping and also routing was crucial for the
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  Internet practical and it gave value to the users that wasn't
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  just reading an article at the New York Times.
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  You could get something out of it other than learning
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  something. You could learn about a new
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  business and also become a patron of that business because
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  of and you could communicate with them and their their
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  ability to combine the technology with practical
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  applications. Like I was saying, set a
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  standard for future tech companies.
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  And the success of Zip Two was a pivotal moment in Elon's
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  journey, providing him with the financial resources and
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  confidence to pursue more ambitious projects.
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  And something like SpaceX, something like Tesla or even
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  x.com, which we have now, wouldn't be available if it
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  weren't for Zip 2. This is the beginning, sort of
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  the the origin story of Elon Musk's entrepreneurial journey.
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  Now. It played a significant role in
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  shaping everything we have on the Internet today.
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  City guides, think Google Maps, business directories, think
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  Google Business. Or on Google Maps, you can get
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  all the business information, partnerships with newspapers,
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  partnerships with online media. The pioneering role in the SAS
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  business model set a precedent for future tech companies.
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  All the tech companies that are available now are because of Zip
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  Two and some of the SAS models that they've used.
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  And it set a foundation for Elon Musk, of course, demonstrating
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  his potential as a tech innovator and an entrepreneur.
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  Hey, thank you so much for listening today.
• 10:54
  I really do appreciate your support.
• 10:56
  If you could take a second and hit the subscribe or the follow
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  button on whatever podcast platform that you're listening
• 11:01
  on right now, I greatly appreciate it.
• 11:04
  It helps out the show tremendously and you'll never
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  miss an episode. And each episode is about 10
• 11:10
  minutes or less to get you caught up quickly.
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• 11:16
  to patreon.com/stage Zero. And please take care of
• 11:21
  yourselves and each other, and I'll see you tomorrow.