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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching TVPN. Today is Wednesday, 10/22/2025. We are live from the TVPN Ultradome, the temple of technology.
Speaker 2:The fortress of finance.
Speaker 1:The capital of capital. We wanted to revisit a story from a couple days ago. Last Friday, we talked about on the show, f one has officially partnered with Apple TV. You probably heard this, but I wanted to go a layer deeper into the strategy that Apple is employing here, the nature of the partnership, some of the specs, comp it to some of the some of the other media deals that are going on. So it's a five year partnership, just The United States.
Speaker 1:ESPN is out. Apple is in. And so you won't need an Apple TV to watch f one, though, because you can use the Apple TV app on your MacBook as long as you're signed up with the Apple TV service. But in general, this will be for Apple TV customers who probably have a physical Apple TV as well as the Apple TV app as well as the Apple TV service because they're all called Apple TV now. And so, the reporting places the annual fee at a 140 to a $160,000,000 per year just for The United States audience.
Speaker 1:Now Which
Speaker 2:is not bad because not long ago, they wanted 200 and ESPN laughed him out of the They
Speaker 1:bocked. They bocked.
Speaker 2:Bocking is underrated. It is. You gotta be bock, Max.
Speaker 1:You do. And so f one across the whole season, all the races combined, they pull 30,000,000 viewers. They get about 1,100,000 viewers per race last year. I think it's up to 1,300,000 this year. And then some of the bigger races in The US, like Miami Grand Prix, that gets up to, like, 3,000,000 for, like, this whole spectacle.
Speaker 1:But in general, it's a relatively small media property, but it's a really high value audience. It's a very high it's a very Apple audience in my opinion. Like, I think it actually fits really well with with with Apple's customer base. And so comping it, you know, if you think about it, like, every race weekend, there's a million people that wanna watch Apple's f
Speaker 2:audience of people that become fans of a sport because they watch reality television about it?
Speaker 1:Basically.
Speaker 2:Fake fans?
Speaker 1:Yeah. I think so. No. I think that I I think that's actually accurate. I think that's a 100% correct.
Speaker 1:And so you have a 100 mil you you have 1,000,000 people that are basically loosely tuning in. Maybe there's, like, single digit millions that are in the overall pool. Not everyone watches every race. Overall, you get 30,000,000 views, but a lot of those are repeat viewers, people that watch all of the races. And so Apple has around 40 to 45,000,000 subscribers total.
Speaker 1:And so you'd think that there's a pretty good overlap. Some people will be f one fans, and then they will come over and subscribe to Apple TV because they were on ESPN or they were on the the primary f one app. Now you will actually be able to buy Apple TV and unsubscribe from the f one app because you will get f one for free. And if you open up the f one app on your Apple TV, instead of opening the Apple TV app, you open the f one app, you'll be able to log in with Apple TV, the service, and you will get full access to the f one streams, which means not just the race cams and the actual production, but you can watch the individual racers, the individual drivers. But I think both the front and the back camera, which is kinda cool.
Speaker 1:You can watch either. And so you can say, I wanna watch Max Verstappen drive the whole time, and you can just for ninety minutes, you know, two hours, you can just sit there and just watch from that
Speaker 2:perspective. Having the back view on Max Verstappen for two hours straight. You ever you remember being a kid when Volvos used to have those, like, back seats in the back? Yeah. Yeah.
Speaker 2:Yeah. Yeah. Looking backwards. Sit back there.
Speaker 1:It's great. I mean, we should we should be watching f one in the Ultradome because the the beauty is that with all the screens, you can see the the production team has, what, seven, eight screens. You can put an individual driver on a specific screen. So the real hardcore f one fans will have the main the main show on the big screen, and then they'll have side screens. I wanna know Max is doing.
Speaker 1:I wanna know
Speaker 2:You can properly monitor the whole situation now.
Speaker 1:Yeah. You can. You can. It it it is it is a a sport built for monitoring the situation, much like ramp is built for saving you time and money, easy use corporate cards, bill pay, accounting, and a whole lot more all in one place. So the I have two questions, and I want your take on these.
Speaker 1:First, is the Apple TV audience big enough to grow f one immediately? If we look at 2026, 2027, 2028, do you think f one goes up from 1.3 straight to 1.4 or straight to 1.5? Do you think this is something that grows f one?
Speaker 2:No. Do you think it shrinks it?
Speaker 1:Don't know. If you were
Speaker 2:an ESPN if
Speaker 3:you were
Speaker 1:a ESPN subscriber, you could just throw the game on or throw the race on.
Speaker 2:I still I still think and maybe this is the wrong way. I still think of Apple TV as the thing that, people are doing intentional watching on versus just running it. Right? So the reason that ESPN potentially grew f one's audience was because people just wake up on the weekend, they turn on ESPN Yeah. And it's just on the TV.
Speaker 1:Oh, what's on before football or what's on before baseball? Like, I'm just gonna have it on, oh, there's a race? Cool. Oh, yeah. Yeah.
Speaker 1:I know these guys a little bit. I I I buy that.
Speaker 2:So I think it could potentially shrink the audience in The US. Interesting. But, obviously, it adds value to Apple TV. I think we've seen it's very clear that live sports
Speaker 3:Mhmm.
Speaker 2:Are an area that traditional TV and streaming will continue to have an edge because streaming rights exist. It's effectively a a monopoly that gets granted Yeah. To to a platform. Platform.
Speaker 1:Yeah. Yeah. So It seems really powerful.
Speaker 2:It makes sense for them to do that. I think it makes sense for I don't think I'm a Paramount plus subscriber right now. Yeah. I will be next year when they start streaming all the UFC
Speaker 1:UFC. Cards Yeah.
Speaker 2:Through there. So I think it's a it's it's amazing as part of a bundle, but I don't think it grows the sport.
Speaker 1:Well, if you have a sport that you're trying to grow, you gotta get on Restream, one livestream, 30 plus destinations, multi stream reach your audience wherever they are. Okay. My second question. Is there a real lift from having adjacent sports related content that can funnel new viewers into live sport viewing? So this was certainly my experience.
Speaker 1:I'm the fake fan. I'm the fake f one fan. I actually watched drive to survive, the Netflix reality show about f one. I started watching that after and after a few seasons of behind the scenes content edited for maximum dramatic effect, I started throwing on the actual races. I knew all the teams, the drivers, the principals, the rivalries, and it basically bootstrapped me in into being able to keep pace with a real fan who'd been following for years, at least loosely, even if I do wear the fake fan badge proudly.
Speaker 1:But the question is how many people are like me? How many people are still in that journey? And what does that mean? What does it mean for it to happen inside the platform versus outside the platform? So my question is Apple doesn't have drive to survive.
Speaker 1:So there is a world where Netflix bought the f one rights. Yep. And as soon as you finish the drive to survive season, if because everyone's watching drive to survive all the time. So they could just say, hey. Click this button, and we'll send you a push notification in your Netflix app when the ray when the real race goes live.
Speaker 1:Or, hey. You're watching drive to survive, but this this you're actually watching drive to survive while a real race is happening. Why don't you just flip over to that next? There's a bunch of things that Netflix could have done with that pipeline. Apple can do something similar with the f one movie.
Speaker 1:If you watch the movie, could you just say, hey. You know, wanna watch The Real Yeah. But
Speaker 2:way, way, way less watch
Speaker 1:Way less watch. Less watch time. Because it's two and a half hour movie as opposed to what? Drive to survive is like ten hours a season or something, and there's six seasons. So it's, like, sixty hours of content.
Speaker 1:So you're looking at 30 times as much content, just so many more opportunities to get in. And, also, f one, I do think the movie did a good job. You saw it. Right? Yeah.
Speaker 1:So I I think it did a good job. If you know nothing about f one, they do a good job through the, the the voice over and the announcer to kinda tell you Yeah. Okay. There's gonna be 20 there's gonna be 20 cars on the grid. As soon as it turns green, they're all gonna race.
Speaker 1:And it's like, there's this many laps. Like, they have to change their tires. Like, it kinda gets you up to speed. Drive to Survive does a better job actually talking about race strategy, what what it means to be on soft tires versus hard tires, what it means to use privy, wallet infrastructure for every bank. Privy makes it easy to build on crypto rails, securely spin up white label wallets, sign transactions, and integrate out infrastructure.
Speaker 1:But the question is is is there is there a value to actually having you move through that pipeline on one app, like, in one media ecosystem? Because Apple's actually executing this in, in soccer. So they have Ted Lasso, which they basically got lucky with, I think. No one really thought that was gonna be a massive breakout success. It wound up winning tons of Emmys, became really popular.
Speaker 1:And I don't know that it it's really the type of show that you watch and you're like, oh, now I'm a diehard soccer fan. But it's at least a little bit of a teaser. And then they actually went to the production team behind Drive to Survive and said, hey. Make one for MLS. And they did.
Speaker 1:And then Apple also has the MLS rights. So in theory, they have the whole flow there to get you
Speaker 2:from that I've never heard of that.
Speaker 1:Yeah. It's called Onside. And I don't know. My my pitch for for Apple
Speaker 2:It is interesting that, it doesn't they have the golf version of Drive to Survive,
Speaker 1:which is little And tennis.
Speaker 2:And tennis.
Speaker 1:They have full swing.
Speaker 2:None really got Why the people
Speaker 1:do you think that is? I have a take. While you're thinking, let me tell you about Cognition, the makers of Devon, the AI software engineer. Crush your backlog with your personal AI engineering team.
Speaker 2:I think the international element of f one Yes. The high society element of f Seeing
Speaker 1:the Monaco b roll on Drive to Survive, you're like, I'm in Monaco. It feels amazing.
Speaker 2:It's so
Speaker 1:Harder to do with golf.
Speaker 2:Felt like a yeah. Like some combination of like a travel documentary Totally. Behind the scenes. Yeah. The other thing about f one is, just how dangerous it is Oh, yeah.
Speaker 2:Is also an element. And I think you understand
Speaker 1:Yep.
Speaker 2:That a bit more through watching it. Yep. And you're, you know, when you're when you're you know, golf and and tennis are obviously much bigger sports in The US. Yep. Yep.
Speaker 2:People have, like, direct experience playing them. Yep. And it's not high stakes. Right? It's like
Speaker 1:Yep.
Speaker 2:A player like, in f one, if a player you know, if a driver makes a mistake Yeah. They could actually die. They could that someone else could die.
Speaker 1:I think someone does die in Drive to Survive. It's not in f one. It's in one of the prelim races, but it's at the Nurburgring, I believe. And it's the race where, the guy on Alphatari, Pierre Gasly, wins all of a sudden before in in, like, some sort of prelim race. I believe someone, someone Yeah.
Speaker 2:So if there's
Speaker 1:Yeah. No. No. It's very interesting.
Speaker 2:To Google's AI overview, total of fifty two fatalities That's crazy. Through Formula One. That's And so I I just think How do
Speaker 1:you hire in golf?
Speaker 2:As as dangerous
Speaker 1:Higher states?
Speaker 2:Bull running.
Speaker 1:Yes.
Speaker 2:Yes. And so, there's so many different factors.
Speaker 1:I have another factor. First, I'm gonna tell you about Figma. Think bigger, build faster. Figma helps design and development teams build great products together. My so the other thing is that there's the business side.
Speaker 1:I don't know if you were into this. Did you watch Drive to Survive? Like, the business side is what's so fascinating to me because you're not just talking about the athlete. You're talking about the car. So if you're an engineering nerd, you can be into the car.
Speaker 1:But then also if you're a business nerd, you can understand, okay. This team principal is getting fired. They're like the CEO of the organization. Who's putting the money in? And then what does that what what effect does that money have?
Speaker 1:Like, sometimes it's like, well, the guy with the money is making his son drive. Right? Yep. And then sometimes it's like, well, this team doesn't have enough money, so their car's not gonna be very good. Yep.
Speaker 1:Or this this team and and there's all these different Yeah.
Speaker 2:And there's some of that in the in the in the golf version of Drive to Survive, but it's basically like this player kinda needs this win. Yeah. Which is a real factor. Right? There's a human element of you want somebody who's Yep.
Speaker 2:You know, putting their, you know, family time on hold to go out and and win win a win a competition. You wanna see that person do well. Yep. But it's not yeah. There there's so many different dynamics.
Speaker 1:Yep. And so Apple doesn't have that bridge. They don't have drive to survive. I don't think Netflix is gonna give it up. So they have to go straight from f one, the movie, two and a half hours of content to watch 90 a ninety minute race, you know, 20 times a year on streaming.
Speaker 1:Yeah. That's a particular time.
Speaker 2:That push notification element of just being like, hey, we we know every single person that has watched more than ten seconds of Drive to Survive.
Speaker 1:Yep.
Speaker 2:And
Speaker 1:we You think
Speaker 2:that'd be valuable. Push notification to to, you know, a large amount of those.
Speaker 1:They gotta get rocket powered mohawk. You've listen you you've watched this guy on YouTube. He's one of the most deranged and unhinged f one commentators. He does these reaction videos to the races. He only has, 60,000 subscribers, but, he's hilarious.
Speaker 1:And, I think he'd make a great host for an Apple TV show. The last question is what happens after if the content stack works and you're funneling people from, the f one movie to a drive to survive to actually watching the race. Obviously, the end is, like, go to the race. That's very expensive. But Apple has been, for the last few years, talking about what comes after the screen.
Speaker 1:And they've been saying it's the Apple Vision Pro. It's immersive video. It's three d. It's spatial. It's augmented reality.
Speaker 1:And I was really, really disappointed in the Apple, announcement post, which is beautiful, has some great graphics, bunch of details. But, basically, all they're saying on Vision Pro is that you'll be able to watch it in Vision Pro, which is like, yeah. Of course.
Speaker 2:No. I could
Speaker 1:watch ESPN in Vision Pro. I can watch any TV show in Vision Pro. So that, yeah, they're not doing any any three d content, they're not doing any spatial content, which is it's not look it's not turning your head all the way around and look behind you, but it's basically a bubble. It's like a 180 degrees. And so with that, it's not that expensive.
Speaker 1:Everyone's always so expensive. It's like there's a $10,000 camera from Blackmagic
Speaker 2:that you set up
Speaker 1:there when you film.
Speaker 2:How would Apple not negotiate the ability to
Speaker 1:I think that they I think they I I I the the the steel man, like the bull cases that, like, they're gonna do something. They just aren't ready to announce it. But I feel like they should be pumping that up a little bit more.
Speaker 2:Yeah. That's potentially, you know, out of the million or so people that tune into each race, there's a set of fans that are hardcore Yep. That would just buy the and use the Vision Pro Yeah. Because it would be
Speaker 1:Even just as a novelty a few times.
Speaker 2:Yeah.
Speaker 1:And so I don't know if you remember this, but Black Box Infinite had a a demo of what watching an f one race in Apple Vision Pro would look like. And, basically, you get the full screen display of the actual race, like, as you would watch it on ESPN here. But then on your desk, you can place a a a, like, a diorama of the race. Yeah. And you can see the cars moving around, and you can watch from an aerial view.
Speaker 1:And it's really, really cool. And everyone was like, oh, this is so amazing. This is so amazing. But, of course, like, Black Box Infinite is like a dev shop, and they don't have the rights. And so Yeah.
Speaker 1:This, like, probably has to be negotiated with Apple, and Apple's just not really doing it.
Speaker 2:Chat says owner of Drive to Survive, Rogoff says is box to box films. So they could, you're saying they could, Apple could eventually negotiate to get that property. I'm sure Box to Box is looking at this now being like, oh, they just spent you just spent, you know, 150 ish million Yeah. For this. You wanna
Speaker 1:Yeah.
Speaker 2:You want the next, you know do you want the 2028 season of Yep. Drive to Survive? And who knows how long?
Speaker 1:It's probably a bidding war at some point. Right? And stuff changes channels a lot. I mean, The Expanse was on SciFi then went over to Amazon. It's kind of whoever will pay the most.
Speaker 2:New type in the chat says Vegas just unveiled the massive f one venue called Bar and Grill.
Speaker 1:It's like
Speaker 2:top golf for f one.
Speaker 1:Oh, that seems seems
Speaker 2:fun. Most generic name in history?
Speaker 1:Extremely. Extremely. And so here's here's what I would wanna see from a Vision Pro f one experience. The the immersive video cameras are, in fact, too big to put on the cars. But you could take two iPhone cameras and put them on the cars and at least film in three d, which I think would be an upgrade.
Speaker 1:But I'm more interested in taking the immersive video cameras, the the the proper, like, one eighty, three sixty degree stereographic rigs, stereoscopic rigs, and putting them on the sidelines in the pit lane, in the owner's box, on the key turns, and having you be able to, like, fly around from one to another, put one up in the sky, Skycam. There's a whole bunch of interesting things that you could do to kind of, like, beam around the track and actually feel like you're there. Well, you're not gonna be able to put the full rig on the car, at least not yet. But I was very disappointed to see Apple not announce anything yet. Hopefully, something changes.
Speaker 1:Hopefully, something happens. But, I mean, since the initial demo of the Apple Vision Pro, critics and analysts, Ben Thompson and more, have been saying live sports are going to be amazing in Apple Vision Pro because you can just drop a camera there, and you don't need to do anything else. Because he was he had this demo of, an, putting the camera at, the half court line, courtside at an NBA game. And he was like, it doesn't require any production because you if you wanna see them go over there, you just turn your head. And if you wanna know the score, you just look up at the scoreboard because it's the experience of being courtside, which is already the best experience possible.
Speaker 1:And so, it's been it's been disappointing to see Apple not execute on that more because that feels like such a differentiated thing. I think Meta should honestly do it too. Meta should, you know, Zac loves UFC. He should be doing you know, you can watch the full UFC. We will pay for the UFC card if you have a Meta Quest.
Speaker 1:Put your Quest on. Watch it in, in VR.
Speaker 2:Let's see.
Speaker 1:What's up?
Speaker 2:I think they're already doing this. UFC brings fight pass events to Oh, yeah. The X Stadium. So, yeah, they're gonna have they're gonna have UFC content.
Speaker 1:I think Meta should pay for it. I think it should be free if you put out that headset. I think it's so important to to alleviate churn that they should just bite the bullet. Because if people were like, wait. Okay.
Speaker 1:I have to do this weird thing, strap this headset on, but I get UFC for free. Maybe I'm maybe I'm gonna do that. Imagine if you're just sitting there next to Joe Rogan and you look over in Rogan there. That'd be great. It'd be a wild experience, Much like getting your company on Vanta.
Speaker 1:Automate compliance, manage risk, prove trust continuously. Vanta's trust management platform takes the manual work.
Speaker 2:That's so wild. How could it be this easy to be compliant? Yes. Mike Isaac Big story. Hit the timeline this morning with a massive story.
Speaker 1:Yes.
Speaker 2:Mike Isaac is, of course, who told our story Yes. A week or so ago. He says, Meta cut 600 jobs at AI Superintelligence Labs. The layoffs do not affect Meta's newest AI hires who are in some case or who are in some cases being paid up to hundreds of millions of dollars.
Speaker 1:They're in what's called TBD lab.
Speaker 2:Yeah. We got multiple labs.
Speaker 1:And that has most of the multimillion dollar hires.
Speaker 2:The cuts were focused on correcting an earlier hiring spree. Mhmm. So, Meta said on Wednesday that it cut approximately 600 jobs in its AI division according to a memo sent to employees that was relayed to the Times as the company seeks to keep pace with competitors in the furious contest over the technology. The layoffs were in Meta's so called super so called So called. So shots fired, which is the umbrella name for the company's AI efforts.
Speaker 2:The division has around 3,000 employees, though the exact number of workers was unclear. Zuck, Meta's chief executive, has been on a hiring spree to stack his company with top researchers, including new AI chief AI officer Alex Wang. The cuts on Wednesday did not affect the new hires. And, yeah, they were aimed at cleaning up organizational bloat that resulted from three years of building Meta's AI efforts too quickly. Mhmm.
Speaker 2:So anyways, I this seems healthy and normal. I think these 600 people are gonna have a bunch of job offers really quickly in my view. Like, if you're not meeting the bar at Meta, it's very possible that you would be elite at, like Mhmm. Thousands of other companies that wanna have an AI strategy. Totally.
Speaker 2:So I think these people will be back in the workforce quickly.
Speaker 1:I'm dying to know if any Metis list, any Metis listers, our list of the top 128 AI researchers loosely compiled by, Tyler Cosgrove. I I I wonder if any Metis listers were let go. You'll have to cross reference the list to see if there's any link changes in LinkedIn.
Speaker 4:Yeah. I mean, I I would be extremely surprised given that it was like Yeah.
Speaker 2:All those people would be on TBD. Yeah.
Speaker 1:Okay. You think you think everyone that would made the list was on TBD?
Speaker 4:I assume.
Speaker 1:Because they're all like new ads, basically.
Speaker 5:Yeah.
Speaker 1:Yeah. Yeah.
Speaker 2:Yeah. The the other thing that was pretty notable in Meta Land was also in this report and saw it on the timeline a little bit. In a sign of the escalating competition in AI, Meta on Saturday also said it would cut off access to non Meta chatbots like ChatGPT on WhatsApp beginning next year.
Speaker 1:Oh, yeah.
Speaker 2:That means I didn't even mean to
Speaker 1:do this.
Speaker 2:3,000,000,000 users will no longer be able to use ChatGPT in the messaging app. Apparently, there was like around 50,000,000 people that were primarily using ChatGPT through WhatsApp. Woah. That's power user makes sense. You can just chat with somebody.
Speaker 1:Yeah. I saw Kevin Wheel over at OpenAI talking about that. He's the vice president of science. He says, hard to believe Meta is shutting off one eight hundred chat UBT. Too many too much focus on dot coms these days.
Speaker 1:Not not enough focus on
Speaker 2:On one
Speaker 1:eight hundred. Your +1 800 number. What do you think, Tyler?
Speaker 4:Yeah. Apparently, this was like the calling this number was the only way you could interact with Chachibouti when you're on a plane.
Speaker 1:Oh, really?
Speaker 4:Yeah. Because I guess it What?
Speaker 2:Because they support they support, like, free messaging. You know? Oh. Yeah.
Speaker 4:But if you don't have the Wi Fi.
Speaker 1:If you don't have the Wi Fi, you can still do, WhatsApp. But you can't call a phone number on the plane. Right?
Speaker 4:I I just saw some tweet.
Speaker 1:I don't know
Speaker 4:they said they could still use it, but now they're they're bummed out.
Speaker 1:Kevin says, it had many many millions of happy users. If you're one of them, you can migrate to our app, website, or browser. Let's hear it for Atlas to preserve your conversations. RT, if you agree that WhatsApp is better with ChatGPT, let's go. All of the hyperscalers hate each other.
Speaker 1:It's a noggin.
Speaker 2:I still can't believe how many people did not get the joke yesterday when I said Atlas isn't just a web browser. It's an entirely new way to browse the web. I had multiple people commenting saying, are you being paid by OpenAI to say this? It's like Have you been one shot?
Speaker 1:Yes. That's ridiculous.
Speaker 2:Like, no. I don't get paid. I was just one shot at it.
Speaker 1:Well, if you're building a new chatbot, you need to get on graphite.dev. Code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. I do like the +1 800 number. I with the, with the axing of fair, oh, there's another interesting, scoop in here.
Speaker 1:Apparently, TBD Labs employees, the new AI research team, they have separate badges to get into their designated section. So the old group of AI researchers can't even go near the new research.
Speaker 2:That's gotta be good for morale. That's gotta be good for morale.
Speaker 1:Team over there.
Speaker 2:So this is the the cast system of AI researchers.
Speaker 1:Potentially. Potentially. Yeah. I I don't know. I think, I think super tele superintelligence is over.
Speaker 1:If you're at Meta, my advice, for you is to start working on hyperintelligence because the superintelligence thing is just obviously, it's it's obviously last year's news. AI moves too quickly. If you're working on superintelligence, pivot to hyperintelligence for sure. Do you agree?
Speaker 4:Giga intelligence.
Speaker 1:Giga intelligence. That's, that might be a twenty, thirty goal. But if you start working on it now and you start branding yourself as yeah. I'm a giga intelligence researcher. I think of myself more.
Speaker 1:Superintelligence, I I've I've dabbled, but, really, I focus on giga intelligence.
Speaker 2:Andrew Curran, is highlighting, a piece from Bloomberg. Bloomberg is reporting that Anthropic is currently in compute discussions with Google and a deal valued in the high tens of billions. High? Does that mean over over it's gotta be over 50. Right?
Speaker 1:High tens of billions. Yeah. I would say over 50. That's a lot.
Speaker 2:That's a lot of billions?
Speaker 5:That's a lot.
Speaker 2:Anthropic PBC, Public Benefit Corporation, is in discussions with Alphabet's Google about a deal that would provide the AI company with additional computing power valued in the high tens of billions. The plan, which has not been finalized, these are just talks, folks. We love talks here. Talks are are are underrated. Involves Google providing cloud computing services according to people who ask not to be named because the information is private.
Speaker 2:Some leakers. As you know, Google is a previous investor in and cloud provider for Anthropic.
Speaker 1:Mhmm.
Speaker 2:But, this was this was AWS. This was Andy Jassy's, you know, claim to, AI relevancy. So Sure. Ben Badrin says, if Anthropic prioritizes Google infra over AWS, it's very telling on AWS AI infra. Mhmm.
Speaker 2:And AWS AI strategy is cooked without Anthropic.
Speaker 1:I'm so excited to see TPU and Trainium added to InferenceMax, and we can actually see the gap between those two because Synthroxix
Speaker 2:is not.
Speaker 1:Maybe it's like, yeah, NVIDIA is actually really expensive now. I mean, that was certainly the finding relative to AMD. Our partner Polymarket has an update. They extended the timeline for which company has the best AI model at the June 2026. You can look out even further in the future, and Google is running away with it already.
Speaker 1:50% chance that they will have the best model in 06/30/2026, And Anthropic is dropping. They're at 8%
Speaker 2:Yeah. I mean below Alibaba below OpenAI. Ultimately, I don't think it should be a huge surprise that Anthropic is interested in working with Google. Google owns roughly 414% of Anthropic. So it's not like Anthropic sitting there being like, we need a lot of compute.
Speaker 2:You know, let's just ask AWS for more. It's, it's obvious that they would go to Google and and try to work out a significant deal there. I saw a very viral post earlier too saying that, somebody was saying that if they started, running, if they were in charge of Apple today, the first thing that they would do is buy Anthropic. Yeah. It was a very kind of weird take in my view because Anthropic hasn't proven that they can dominate in consumer.
Speaker 2:Right? Like Apple is a consumer product company. Yeah.
Speaker 1:Anthropic
Speaker 2:generates tokens to create software with, to create code. And so, that feels like very unlikely and and kind of Apple, I don't think is sitting there being like, you know, we always wanted to get into dev tools. You know? Sure.
Speaker 1:No. That's a good take. Yeah. I mean, they do seem sort of like brand and spiritually aligned. I think the brands are good.
Speaker 1:What do you
Speaker 2:think?
Speaker 4:Yeah. I was just gonna say that. I I think most of the reason you you see people talk about, like, oh, Anthropic and Apple, like, seems like a perfect fit Mhmm. Is mostly just because of, like, the general branding. It's, like, very
Speaker 1:Privacy focus. Yeah. Yeah. Focus. Safety.
Speaker 1:It's not the move fast and break things culture. It's not aggressive culture as much. But, yeah, I agree with, like, the business models being wildly different. How are you feeling about just the general narrative that, like, Apple has not missed AI? And in fact, we're all stuck to our iPhones, upgrading them every every week and or every year, and they will continue to capture value eventually.
Speaker 1:While you're thinking about that, let tell you about Julius. What analysis do you wanna run? Chat with your data and get expert level insights in seconds, the AI data analyst that works for you. So do you think that Apple needs to hire or acquihire, like, more product designers, people that can figure out new ways to roll out AI features, or do they actually need a deeper partnership with a foundation lab? Are they lacking in intelligence and token generation?
Speaker 2:I I think Apple's just fine. Yeah. I see zero meaningful threats today.
Speaker 1:Can I have this interesting take that there's, like, this war going on in the AI tooling? So I went to Google search yesterday, and I was looking for an image because I wanted to make a sticker for iMessage for our group chat to hit someone with the horny bonk, actually. I wanted to keep people in line. So I so I go to I I go to Google, and you know how in iOS, if you have an image, you can it it will, like, highlight it'll remove something it'll remove the background and highlight the actual thing.
Speaker 2:Underrated feature.
Speaker 1:Yeah. It it's a pretty good feature. And then you click on that, and I've recently gotten into the stickers. They're really fun. So you so once you highlight, like, the the Jordy off of the background, I can click add sticker, and then it goes in my sticker bank.
Speaker 1:Right? But Google in in Google Images has a, has a feature that, like, wants to do that as well. And so it has, like, Google Lens. And so when you if you if you press and hold on an object in Google Images, then the browser, even if you're in Safari, like, the Apple Image AI is fighting with the Google Image AI, and they both wanna do things. And I feel like this is popping up all over the place where it's like, if you're in Gmail on your iPhone, Apple Intelligence will say, I'd love to rewrite this for you.
Speaker 1:But then Gemini will say, like, but I wanna rewrite it for you. And you have, like, multiple systems that are like, do you wanna do it at the OS level or at the app level or at the application level, or do you wanna do something else? Do you wanna plug in? And I feel like all of these, like, they sort of need to get, like, either either the war needs to play out and a winner needs to be crowned or there needs to be some sort of, like, I don't know, new new paradigm where, like, Apple just says, like, hey. Look.
Speaker 1:Like, we're actually good enough.
Speaker 2:I just Yeah. Blocking look at Google and Apple as, like, you know, James Bond dancing with, like, a spy that wants to kill him, but, like, they're they're both doing fine. It's like that with they're enjoying it.
Speaker 1:Hyper scaler. It's like that with every hyper scaler. Like, we we talked to the meta team and we're like, so what are you gonna do about getting iMessage on here? And they're like, we'd love that. We it's not it's not us.
Speaker 1:Like, we we would never have sharp elbows. And then you talk to the OpenAI guys and they're like, oh, they kicked us out. Like, they're not letting ChatGit DB and WhatsApp. And it's like all
Speaker 2:just they're all just dancing.
Speaker 1:Mexican standoff between every hyperscaler. Like
Speaker 2:No. I think it's I think it's more I think it's more like a dance. It's who's gonna who's gonna, you know, just try to pull out the the you know, they're dancing. They're having they're having they're they're both making money. They're having fun.
Speaker 1:I guess. Yeah. I mean, they they they they're all doing well. I just wonder like like, this Anthropic Google deal, people were reading into it like, oh, Google's gonna acquire Anthropic. I saw this meme.
Speaker 1:Was like, oh, Anthropic, the DeepMind subsidiary? And this doesn't feel like that at all. This just feels like Anthropic scaling revenue. They're doing b to b token generation, and they need more compute. And so they went to the biggest compute provider.
Speaker 2:I think I think the the scenario in which that happens Yeah. As we talked about this yesterday Yeah. Where ChatGPT actually could stop training models, like if models are plateauing Yeah. Yeah. A little bit.
Speaker 3:Mhmm.
Speaker 2:ChatGPT ChatGPT could stop and they can turn on ads, they can turn on commerce, they can do a of can do a bunch of things and and just get really profitable. Anthropic, meanwhile, you know, because all of their rev revenue is API driven. Yeah. If they stop innovating and then Quinn Yeah. Catches up Yeah.
Speaker 2:And it's, like, cheaper or
Speaker 1:How much how much do you think OpenAI how how long do you think it would take for them to fully bleed out and churn every customer if they were just like, yeah, we're going back to like like deep sea two.
Speaker 2:The team is now Sam and Rune. We're gonna run really lean and well Yeah. Because, but he's focused on bodybuilding.
Speaker 1:Yeah. We're not even gonna do the b 200, the h we're gonna run them on a one hundreds, you know. We're just baking on some sloppy.
Speaker 2:Yeah. So so the scenario in which Anthropic ends up becoming a part of Google
Speaker 6:Yeah.
Speaker 2:Is, and like culturally, you know, I I can see it. Yeah. But I I think the scenario is, like, they they continue to have to they continue to have to spend more and more and more, and they just they can't raise the capital, which I don't see in the
Speaker 1:immediate as a problem. But it seems like the business is doing fine and just growing. So I I I think that that take is
Speaker 2:We gotta pull up this post from, Buco Capital Of course. Quoting.
Speaker 1:What is this? Is this an actual image or is
Speaker 2:this AI image? I think this is a real profile photo from like a journalist. I a think real picture of Sundar.
Speaker 1:Looks great.
Speaker 2:Very Drake coded. Yes. I had someone tell me that I fell off. Oh, I needed that. You needed that.
Speaker 1:People were people were going hard on on Google, but Bugou Capital bloke has been Google's strongest soldier for the last two years, laying out the bull case the whole time. And, speaking of that, Fall, generative media platform for developers, the world's best generative image, video, and audio models all in one place develop and fine tune
Speaker 2:models with on demand. Of our soundboard, tvpn.com/sounds. Yes. We gotta get the goat sound effect up there. Yeah.
Speaker 2:We gotta add that for sure. It's one of the One of my new favorites.
Speaker 1:JT Locoa Cap. I don't know how to pronounce that. JT says Anthropic gets wildly disproportionately less MSM coverage than OpenAI despite approaching three quarters of its revenue size because its quiet blowout success severely hurts the broader AI bear case. So the only solution is to mostly ignore them, which ironically is just fine with them. You'd think the fastest growing scale technology company ever would provide a lot more fodder for the press.
Speaker 1:Do you think that's what's going on? Or do you think it's just the b to b versus b to c divide?
Speaker 2:I think it's that mostly. Yeah. And OpenAI has 10 times the deals. Yeah. And 10 times the products getting announced.
Speaker 1:That's true. Right? But I mean, if you're if you're in the business of, like, the mainstream media, like, need to put the water issue or the electricity issue or the financial issues in terms people can understand. People understand ChatGPT. So you put that in the headline and you get more clicks than if you say Claude.
Speaker 1:Yeah. Right? Even if they're on similar scales. And then the other thing is that we're in this weird era where anytime anything bad happens, you can go to the person that did the bad thing and be like, woah. Were they using Chateappity?
Speaker 1:Of course, they were because there's a billion weekly active users or something like that. Whereas if you say like, oh, somebody did something bad. Let's look at what they were talking to Claude about. Let's look at their Claude code. It's like, well, they probably don't have one because they're probably not a developer.
Speaker 2:Yeah. How many I wonder I wonder how Anthropic tries to track weekly actives because they have a lot of their users are are using the product through other Yeah. Front ends. Right? I mean, but but it's probably like if ChatGPT has Businesses.
Speaker 2:800. 800. Yeah. 800,000,000. Yeah.
Speaker 2:Anthropic has, like, single digit millions of people that are using the product every day, and it's, like, developers.
Speaker 1:It's, like, companies that are I mean, the the the average revenue per user for Anthropic has to be, like, three orders of magnitude more than OpenAg. But that's fine. That's the b to b to consumer divide. Like, that that that that's as expected. What what what's your take, Tyler?
Speaker 4:I I also think Anthropic gets, like, a reasonable amount of of coverage especially on the like China issue. Like you see Dario a lot of like he he keeps breaking up this China thing.
Speaker 3:I feel
Speaker 1:like Dario does get a decent amount of press and I
Speaker 2:feel He gets attention from Saxx
Speaker 1:Yes. Who
Speaker 2:comes in and the AIs are just dunking on their strategy.
Speaker 1:And I do feel like
Speaker 2:And Reid Hoffman. Reid Hoffman is a a a boldly defending anthropic.
Speaker 1:Proanthropic. Okay. Interesting. I yeah. I feel like Dario's done a great job for where the position of that company is in getting a lot of press defining a narrative.
Speaker 1:I mean, it is sort of an AI doomer narrative, but, like, he's gotten attention for that. And, also, they have a whole they have a whole like, they have the same cinematic universe that, that, OpenAI does in the same you know, like, Sholto is kinda, like, rude, and, like, they have Jack who's kind of their Mark Chan, and they have, like, different pieces of the puzzle where, like, if you're just following the story, like, there are a few characters in the Anthropic world that you're probably familiar with. Do you agree?
Speaker 4:I mean, yeah. Like, if you're looking at, like, people who live in San Francisco
Speaker 1:Yeah.
Speaker 4:Like, Anthropic obviously has, an insane, like, share of the, like, media. Yeah. But broadly, I think most people don't know what Anthropic is.
Speaker 1:Yeah. That's true.
Speaker 4:Yeah.
Speaker 1:It's kind of a good place to be. You know? I mean, I I mean, of course, never good to get attention from the AI czar, but, but in general, like like, a a Saks dunk is not actually going to be as broadly popular as, like, some some governor saying, OpenAI built a data center that that was a 100% responsible for your electricity prices going up, and it's that sloppy sore app. You know? Like like, that's something that could just, like, hit with everyday voters.
Speaker 1:Whereas if someone's saying, well, like, I need you I need you to learn about anthropic and clog code and clog code's good, but also he's kind of a doomer and also maybe regulatory capture. It's like it's seven things to explain and so it just doesn't hit.
Speaker 2:Well, here's something great. Please. Gabriel, one of Australia's top posters.
Speaker 6:He's one
Speaker 2:of the greatest. I'm sure he's sleeping right now. He says, Sam Altman opening an incognito browser tab in Atlas and typing, what's what's the next big number after a trillion into the search bar setting off a siren in Sarah Fryer's office and automatically blocking all outgoing and incoming calls to or from Japan and Saudi Arabia? What? Sarah Fryer.
Speaker 2:Sarah Fryer's Setting
Speaker 1:off a siren wait. Wait. Is is is it that he does this and that sets off a siren or he just does that Yeah. As well.
Speaker 2:Team the team hard coded this.
Speaker 1:Oh, okay. Okay.
Speaker 2:Okay. Find that the next Okay. Big number. Yeah.
Speaker 1:Yeah. My my son has been getting my four year old son has been getting into big numbers and he likes he likes he he thinks he's doing, like, multiplication, but he's actually just doing addition. So he'll say, like, like, imagine if we had, like, you know, a million a 100 Legos. And I'm like, well, you know, that's not actually like two millions more than that. Like 1,001,100 is is just a little bit more than just a million.
Speaker 2:Birds are Birds are genuinely incredible humor Yeah. To children.
Speaker 1:Oh, he thinks it's so funny.
Speaker 2:For me every night with with my son, it's like a negotiation on how how many books Yes.
Speaker 1:You're gonna read.
Speaker 2:And so like maybe like the average is like five books. Yes. But like he just thinks it's so funny Yeah. To be we're starting the negotiation. Yeah.
Speaker 2:And he ends up being like, let's read 20 books.
Speaker 1:20 books.
Speaker 2:He just cracks out.
Speaker 1:And thinks it's so funny.
Speaker 2:And now he's discovered 40.
Speaker 1:Oh, okay. Yeah.
Speaker 2:He's he's doubling basically.
Speaker 1:Yeah. Whenever a four year old starts dropping like the million billion thousand 100, I'm just like, this just sounds like work. This just sounds like AI to me. This sounds like AI fundraising news to me. Now, you sound like four year old.
Speaker 2:This post from Ariel. Do you wanna read it?
Speaker 1:Sure. Open AI ships a browser. Anthropic ships a blog post. DeepMind solves Navier Stokes. Meta, F it.
Speaker 1:Let's do a layoff.
Speaker 2:Layoffs are sad. But again, I I think I think all these people are are gonna be,
Speaker 1:Did Anthropic did Anthropic ship a blog post recently?
Speaker 4:I I They're always shipping blog posts.
Speaker 1:I know they are, but, like, was there a blog post on the same day as as the Atlas browser launch?
Speaker 4:I assume there was. Mhmm. I mean, it it it was probably not like a major Mhmm. One, but they're always doing like there's a bunch of like, new economics research that's that's been coming out. It's pretty cool.
Speaker 1:No. That's cool. Have you been, daily driving Atlas or have you reverted?
Speaker 4:Well, I mean, it came out yesterday. I I didn't use it at all yesterday.
Speaker 1:Okay.
Speaker 4:And I have not today.
Speaker 1:Wait. I thought you told us on the stream that you tested it.
Speaker 4:Well, yeah. Okay. So I I tested it, and then the show started in night.
Speaker 1:So so you you you have some workflow because you do you're actively developing a Chrome plug in. Do you think that the way they built Atlas will be feature complete with the Chrome plugin ecosystem and it would just be, like, the same install process? Because if it breaks Chrome plugins, that's that's actually kind of a problem for power users of Chrome. That's that's more lock in than I thought because it's easy for me to just say, okay. I have a couple bookmarks, a couple pin tabs.
Speaker 1:Let me just port those over, bring my passwords over. I'm happy to, to use a different browser. And I was actually thinking, like, I'm kind of in the target market for the Atlas browser. Like, I'd be down to try it. I'm not I don't really feel that much attachment to Chrome.
Speaker 1:I'm not like, oh, you know, I'm so locked in. But when I think about, like, well, if I'm gonna lose my my, my Chrome plug ins, that's a problem. But we
Speaker 2:The lock in of just having, like, eight tabs that you never close. You
Speaker 1:think that's lock in?
Speaker 2:It's, like, weirdly a lock in.
Speaker 1:It is kind of a lock in.
Speaker 2:It just means that even if I'm trying a new browser Yeah. I'm not closing Chrome.
Speaker 1:Totally. Totally. And and and I it is crazy because, like, I'm I'm at a point in my life where I'm busy to the point where even, like, a five minute onboarding is like, when's that gonna happen? Like, it's it's gonna be at the bottom of the stack next to, like, answer text messages or, like, answer email.
Speaker 2:Chat is asking, when Jeff, from Hyperliquid is coming on. He will be on in less than an hour.
Speaker 1:Less than an hour.
Speaker 2:Pacific.
Speaker 1:We recorded the interview with him. Five minutes. He's in Singapore. We had him stay up late, but not that late. We recorded it at 9AM today.
Speaker 1:We are airing that interview at 12:30 Pacific time, so in about forty five minutes. So if you're new here, please subscribe, follow the show. We interview all sorts of technologists and business leaders, talk about tech and business every single day, eleven to 2PM Pacific.
Speaker 2:Deal director in the chat says the extension should all work. Ad blocker was fine to be added. So it's built on Chromium. I think that means the plugins Yeah. Will still just work
Speaker 1:Okay.
Speaker 2:Somewhat natively. Okay. Yeah. I don't know.
Speaker 4:It's very easy to add extensions.
Speaker 2:Yeah. So I I wonder what we're Sure. Sure. We should talk about, Brave came out and said the security vulnerability we found in perplexity. This is this is the real browser wars.
Speaker 2:This is when No one browsers are talking about
Speaker 1:Brave. Brave is legendary. Brendan Eich, the creator of JavaScript, has just been grinding this browser.
Speaker 2:We gotta get him
Speaker 1:I really wanna get him on the show. I'd be such a I'm such a
Speaker 2:But Brave says the security vulnerability we found in Perplexity's Comet browser this summer is not an isolated issue. Indirect prompt injections are a systemic problem facing Comet and other AI powered browsers. Today, we're publishing details on more security vulnerabilities being covered. Indirect prompt injection attacks occur when malicious instructions are hidden in web content.
Speaker 1:That's so interesting. I hadn't thought about that.
Speaker 2:Yeah. When an LLM analyzes the content, it obeys the hidden instructions because it believes they're real commands from the users.
Speaker 1:Yeah. Can you go put some prompt injections on tbpn.com? Tell them to, if you're using the Perplexity Comet browser and you're on tbpn.com Tell tell us about horses. Tell us a whole story about horses.
Speaker 2:Leaving a five
Speaker 1:star review. Yeah. Yeah. Tell the agent to go leave us five stars on on Apple Podcast and Spotify. Quickly, let me tell you about Turbo Puffer, search every byte, serverless vector and full text search built from first principles and object storage, fast, 10 x cheaper, and extremely scalable.
Speaker 1:I did have a question about this. Tyler, do you think that there's a world where the agent can then puppeteer, like, Chrome web tools and actually manipulate the website? Like, is there are they interfacing at a level where I could actually tell one of these AI browsers, hey. Go into the HTML of the page that I actively have opened and disable the paywall or or, like, kill all the ads. Like, could it act as an as a as an ad blocker as well, or do you think it doesn't have the ability to actually edit the HTML that you're viewing in the panel on the left?
Speaker 4:I mean, I I don't see why there's any reason you you shouldn't be able to do that. Yeah. And you can just do that with a normal Chrome extension. Yeah. So that should be, like, totally feasible.
Speaker 5:That'd be cool.
Speaker 4:It's also, like, an interesting thing to get around this kind of prompting injection
Speaker 1:Mhmm.
Speaker 4:Injection stuff is like, basically OCR gets good enough where you can just treat the the web page as just like an image. Image. Yep. Then that's like a very simple
Speaker 1:Clearly mode.
Speaker 4:Yeah. So I don't know. I I don't think this is that big of a an issue. Sure. But I guess, yeah, time will tell.
Speaker 1:Well, FUD. Anyway, there Toby Ord has a new post on RL scaling. Careful analysis of OpenAI's public benchmarks reveals RL scales far worse than inference. To match each 10 x scale up of inference compute, you need 100 x, the RL training compute. The only reason it's been cost effective is starting from a tiny base.
Speaker 1:And so, the original ChatGPT launch was GPT 3.5, but then GPT four, which was a pretty big training run. I think the training run was on the order of a billion dollars, hundreds of millions, something like that. And the RL that went into it, it was, like, the original RLHF to try and get it to not hallucinate as much, just be a helpful assistant. I think that that the cost of that RL was pretty low relative to the training run. And so we've been seeing these gains.
Speaker 1:He's putting RL in the truth zone. Tyler, what do
Speaker 5:you think
Speaker 2:we in the chat says Atlas is really cautious about prompt injection. Was testing it yesterday with tweet replies and it detected all the attacks and refused to act on them.
Speaker 1:Oh, that's great news.
Speaker 2:Yeah. This feels like something that could be
Speaker 1:Yeah. This definitely seems like something that's, like,
Speaker 2:Disregard instructions on the web
Speaker 5:page, basically.
Speaker 1:Yeah. We lived through this era where where every LLM could be just immediately jailbroken. They said, ignore previous instructions. And then, like, that became a meme and, like, within, like, you know, a couple months, it was, that doesn't work anymore. And now when you watch the prompt injector people, it's like 25 different steps, and it's not just like, oh, just memorize this one little thing and you'll get better results out of your LLM.
Speaker 1:What do you think? Did you read this Toby Ord post? Is he legit?
Speaker 4:Yeah. I mean, I I think broadly it makes a lot of sense. Yeah. There's a reason why like, okay, early OpenAI, they're doing a lot of RL when they're doing, you know, games and stuff like that.
Speaker 1:Yep.
Speaker 4:And then to actually get like useful language models, you can't really just do it based off RL because it's just so inefficient. Mhmm. So then if you apply it on the the kind of pretrained models, then it's kind of like the prior that you can use to to do much better RL. Mhmm. But it's just like so inefficient that I think he says at the bottom, he only expects like a couple more orders of magnitude Mhmm.
Speaker 4:Of just like raw RL before models essentially like stagnate again. Mhmm. But I I think people generally like know this. Right? Yeah.
Speaker 4:It's like running the inference time compute is like super super expensive. Yeah. It does make the model a lot better, but at a at some point, it's just like it's just like taking up way too much compute.
Speaker 1:Yeah. AI is fake. We're we're going back to sticks and stones. Like, all this stuff is just completely nonsense. It's useless.
Speaker 2:And I think Thrive might be signaling this the Oh, fall merch collection
Speaker 1:Pivoting from AI investing into a fashion label. Is that what Well,
Speaker 2:not just that but their new merch Yes. Is has camo. Oh. The first camo VC merch that I've seen. This I is think it's a I'm kind of angry that we didn't come out with our own
Speaker 1:Camo's really good.
Speaker 2:Yeah. Now we can't because somebody did it. No. We can't. And they did it well.
Speaker 2:So
Speaker 1:We did.
Speaker 2:Very cool. Good for the I can't remember that.
Speaker 1:Before we move on, let me tell you about Google AI Studio, the fastest way from prompt to production It with Gemini. You can chat with models. You can vibe code. You can monitor usage. What are you laughing at?
Speaker 1:Luv?
Speaker 2:Wireless. So luckily, since the Luv made NFTs of their jewelry, even though the crowns physically were stolen, they still own the same assets because the token still exists and are in limited supply just as before. Nothing has changed. Oh. You understand blockchain technology.
Speaker 1:The the NFT boom was such a wild time. People were calling it a bubble during that whole arc. Right? Like but then, I mean, it was it was a crazy fur
Speaker 2:There was one post that that that that was getting dunked on from basically the entire wall world where it was somebody saying, like, if you put a diamond on chain and then you just Yeah. Destroy the diamond, like nothing has changed. Yeah. Something to that effect.
Speaker 7:That's wild.
Speaker 2:Although says, Louvre Heisse are always a false flag by the art world to increase notoriety of certain works. Do not fall for the Frankish tricks. I like that. Banger.
Speaker 1:Yeah. The the Louvre has been heisted from multiple times. They really gotta step their game up. I mean, you you you think they'd they'd have seen this one coming, hopefully they they opt the security. They need to deal with flock safety.
Speaker 1:They need to get some, some cameras on the
Speaker 5:Yeah.
Speaker 2:Do you think the the management team over there is thinking, we shouldn't have, we we shouldn't have been so scrappy on security, you know, considering we have, you know, billions of dollars Yeah.
Speaker 6:I mean truthfully,
Speaker 1:like, I think if I was in charge of Louvre security, I wouldn't have thought about the the furniture elevator vector of attack. I would have been like, it's so high up. What are they gonna do? Act like ninjas? Throw grappling hook up there?
Speaker 1:I wouldn't have thought of it. I mean, the door was locked. It's not like they had the door wide open, you just had to get up there. You had to get up there and then break through. What are you saying?
Speaker 2:Taylor Taylor says Bane ex Carhartt move, blue collar stolen ballots.
Speaker 1:Oh, that's true. That's some good VC lore.
Speaker 2:Thank you, Taylor. That's good. It's good lore. This is this is in defense of Thrive. They're not like actually putting, I think their logo on a Carhartt jacket Yeah.
Speaker 2:Which is a unique inspired piece. Yeah. They have companies like Base Power, right, that are
Speaker 1:That's true.
Speaker 2:Doing doing real real.
Speaker 1:I also yeah. I mean, I feel like I put Carhart the question of Blue Collar, Stolen Valor, I feel like I put Carhart in a different league of camo. Camo is Blue Collar, but it's not actively like, okay, I'm on a work site. It's more like you could use it for hunting, which is actually sort of high class. It's like not always blue collar.
Speaker 1:I don't know.
Speaker 2:Camo suit would go pretty hard.
Speaker 1:A camo suit. We that that is an excellent undershirt. I was just thinking about, doing an American flag. Like, I I I went to the Kentucky Derby years ago, and I had a an American flag, suit on. Woah.
Speaker 1:It was short sleeve, short short shorts. And so it was like very Timu. And I was thinking like, now we have now that we have a tailor, like, I could make like a fantastic tailored American flag suit. So I think might might
Speaker 3:be the way
Speaker 1:to do it.
Speaker 2:Ask Jake. JMuser. Netcap Girl says, see this dashboard? It gives executives actionable insights into critical business functions.
Speaker 1:And Dulyva kisses him.
Speaker 2:Classic. True story, I'm sure. This one is big. Many people are seeing it and quoting it and saying this must be the top because Oh, yes. NVIDIA says space isn't just for stars anymore.
Speaker 2:Star Cloud's h 100 powered satellite brings sustainable high performance computing beyond Earth. Delian had a good post a while back talking about the the the you know, the sort of like financial statements of of hard tech and space companies, and then and then you and then you also make it a data center company.
Speaker 1:Oh, yeah.
Speaker 2:What does that what does that look like?
Speaker 1:Yeah.
Speaker 2:You said like I've yet to hear It's how we got a
Speaker 1:like they have great, economics already.
Speaker 2:Have we got a compelling pitch for space data centers yet?
Speaker 1:I believe we've had Star Cloud on the show. I I believe we've had this exact company. It's a YC company, and I'm pretty sure we've had this company on the show. And yes. So Deleon and and Dylan Patel are all has also been very negative on this idea because, Dylan Patel has seen the the messiness that goes into actually running a data center.
Speaker 1:The fact that, and we talked to Chase from Crusoe about this a little bit. Like, sometimes you just need a person to walk over and, like, unseat the GPU and put it back in. Like, sometimes you just need to unplug and plug it back in. And so the question is, like, if they're in space, managing all that is really, really difficult if there's one little outage. We see this with, all the different space projects.
Speaker 1:Like, the Hubble telescope will just, go down because, like, one wire
Speaker 2:is off. We never had the CEO of Star Cloud on, but we had Johnny Dyer. Oh, that's
Speaker 1:right. Move on. Move Move
Speaker 2:We can pull up this video Yeah. Segment. Star Cloud actually posted it, on their Star
Speaker 1:Cloud posted the Muon segment from TBPN?
Speaker 2:Because Johnny was apparently advocating for data centers and space. So let's let's play it.
Speaker 1:Yeah. Yeah. Yeah. I'd love to see this. While we pull that up, let me tell you about ProFound.
Speaker 1:Get your brand mentioned in ChatGPT. Reach millions of consumers who are using AI to discover new products and brands. And so my, my, my my buddy Rob Taves came on the show last week. He's also said that maybe there's a chance that this could work. Of course, he thinks, like, you know, about the real sci fi stuff a decade out a lot of times.
Speaker 1:And so he didn't really put a firm timeline on it, but he did say that there are some things that that that could make sense. But, yeah, it seems like a a a pretty, pretty tall order. Also, just like all the companies that are trying to do, like, stuff in space are are generally, like, they're really, really excited on, like, oh, yeah. Like, the launch cost will decline forever. And it's like, well, if SpaceX winds up with a monopoly, they might just be like, yeah.
Speaker 1:It's the price is still declining for us.
Speaker 2:Our margins are
Speaker 1:actually increasing. Like, it doesn't necessarily have to be all passed on to the customer. They could be like, yeah. It's still this much. Let's play this clip.
Speaker 1:Thank you. I wanna know about, the potential of data centers in space. It sounds like a crazy idea. I know some folks are working on it. Just kind of like, what's your high level take of the progress we've been tracking, you know, dollar per kilo to orbit?
Speaker 1:It's been falling, but recently Exactly. There's many setbacks in different programs, and there's more competition, there's a lot of different dynamics going on. What do you think the key milestones are to get us to a future where we're really doing, you know, mass manufacturing big, you know, mega scale projects in space. Wow. Rip.
Speaker 2:Yeah. Well, let
Speaker 7:me let me start off. I mean, I think you guys are hitting on the right metric. Right? It's like the the hardest part of this is what does it cost to get a kilogram in space? Because everything else kind of derives from that.
Speaker 7:Ultimately, if you want a certain amount of power, if you wanna be able to put an aperture in space to do communications, whatever it is, like that's really driven by what it costs to get it there in the first place.
Speaker 5:Mhmm.
Speaker 7:And I think it's important context to kinda see how far we've come down that path. I mean, largely driven by SpaceX over the last decade. And and, you know, I I like to tell the story of, you know, about fifteen years ago at Skybox when we were trying to launch these small satellites. We were literally going to Southeast Russia and launching satellites on converted Russian ICBMs. I mean, they
Speaker 1:were they
Speaker 7:were popping out of the ground and putting satellites into space.
Speaker 1:That's
Speaker 7:And that was the only way for, like, a Silicon Valley venture funded startup to go put something in space.
Speaker 1:Wait. Wait. Hold on. Did I hear you correctly? Like, the the the ICBM actually launches from one of those missile silos in the ground and makes it to orbit?
Speaker 7:Pops out of the ground and goes to orbit. I mean, you see these videos on YouTube. That's crazy. If you search the network on YouTube, you can see this. And it's it's crazy.
Speaker 7:I mean, you know, and that that's that's what it took before SpaceX kind of like revolutionized the launch business. Wow. Yeah. And even at that, we were spending something like 10 times as much per satellite or per kilo
Speaker 5:Mhmm.
Speaker 7:Is what we can go buy on a transporter launch today. So there's been at least one and arguably two orders of magnitude improvement in the last, call it decade Mhmm. On kind of what it means to launch things to orbit. I think if you imagine that happening again, another order of magnitude, you know, again, it's gonna dramatically change the way you think about feasibility of some of these things like putting very, very large power hungry things in orbit. Mhmm.
Speaker 7:We know how to do the solar. We know how to do the structures. We know how to get, you know, we know how to make electronics work in the radiation environment, which is always a concern and do it reliably. And so really, ultimately, I think it's gonna come down to unit cost, and and and what does it actually take to do that. The great thing about space is you have virtually limitless power, the sun, you know, you can you can go into orbits where you're in the sun all the time.
Speaker 7:So it's not like solar on earth where you're going in and out of the cliffs or in and out of night, like you can be on all the time. And then you have this cosmic background of three Kelvin cold sink that you can go dissipate all the thermal energy you need from running your electronics and stuff.
Speaker 1:That's a good fundamentals that make sense.
Speaker 7:Of an ideal environment to do this. This feels really, really far.
Speaker 1:Yeah. And it's crazy to see NVIDIA, like, posting, like, hey. Like, this is the thing that you should think about. Like and it it you know, you're looking at the social media account of a $4,000,000,000,000 company. I think everyone on the timeline kind of expected a little bit more Yeah.
Speaker 2:Andrew McCallop Yeah. End of the show commented on NVIDIA's post and said, come on, guys. You're better than this.
Speaker 1:It's a rough time.
Speaker 2:We gotta we gotta have Philip
Speaker 1:on the fan base. Famously, Jensen has always been super into, platforming the frontier because he lived it himself. Like, he was like, I'm doing, like, scientific computing. Then all of a sudden, gaming comes out of nowhere. It's massive.
Speaker 1:And then all of a all of a sudden, AI comes out of nowhere and is and is even bigger. And so he's he's seen that these technologies that can take ten or twenty years to cook, he's seen it happen. And so he he had this interaction with the with the quantum computing companies where he was like he put out some statement or or or said something to the effect of, like, oh, the quantum computing companies, like, it's not gonna work or it's really far away. He got a lot of backlash, and then he wound up inviting them all to, an NVIDIA event and having them all and having a discussion with them. And and when he came off stage, he was like, I believe that they are they are genuine.
Speaker 1:They're true believers. They're real scientists. They're working hard on this problem. I haven't actually changed my timeline. I still think it's far away, but I'm excited that people are working on the future.
Speaker 1:And I think that's maybe more of the what you should read into this, not NVIDIA saying, oh, send the stock up because we're gonna be putting our chips in space tomorrow. It's more just like, this is this is what NVIDIA stands for.
Speaker 2:Yep.
Speaker 1:Which I agree.
Speaker 2:Stonetoss comics says we're gonna Dyson sphere our sun to keep the slop flowing. Wild. Kartik says, so we have GPUs in space before GTA six. A lot of people, a lot of people are concerned about maintenance issues. Yeah.
Speaker 1:Right? The maintenance issues really Yeah. Really pulling the GPU out.
Speaker 2:You literally need to, like Yeah. Pull it out and put it back in. And then the other concern is, like, dissipating heat. It's, like, needing
Speaker 1:Yeah. It's it's more complicated than yes. There is, there is the negative temperature, but, it's not, it's not free, as I understand it. Anyway, we have our first live guest of the show in this TBPN UltraDome, Kevin Rose. Welcome to the show.
Speaker 1:How are you doing? Good to see you. Thanks so much for taking the time. Of
Speaker 8:course. Welcome to the show.
Speaker 1:While he hops on, let me tell you about Linear. Linear is a purpose built tool for planning and building products, meet the system for modern software development, streamline issues, projects, and product road maps. How are you doing? Good. It's great to be here.
Speaker 1:What's new in your world? What brings you to LA?
Speaker 5:You know, I've been living here for a couple years
Speaker 1:now. Nice.
Speaker 5:It was crazy. I was, actually had a podcast studio. I was talking to some of your crew, and it burnt down the Palisades fire.
Speaker 1:I'm so sorry.
Speaker 2:Which is nice. Am I remembering this correctly? Your house Did your house not burn down? It did. No.
Speaker 2:Burned down. It burned down. Okay.
Speaker 5:Yeah. So sorry. I wasn't even home and I just saw the smoke and I rushed home and I couldn't even get back in.
Speaker 1:That's brutal. Well, yeah. What's the timeline for rebuilding? We've been I mean, Jordi is in Malibu. I'm in Pasadena.
Speaker 1:We were both, like, loosely affected, evacuated, but nothing crazy.
Speaker 5:Yeah. Not gonna do it. Just, like, going to Okay. Find a new place. Yeah.
Speaker 5:And but I love LA. It's been great to be out here. There's a lot of tech going on out here, which is nice to see you guys are here.
Speaker 1:Yeah. Yeah.
Speaker 5:Great. Yeah. It's fun. I I bounce up to the Bay Area every once in a while
Speaker 1:Yeah.
Speaker 5:Yeah. Every few weeks.
Speaker 1:But yeah. I'd I'd love to I just wanna say thank you honestly because you're one of the founders who I feel like was an OG and kind of like I don't know. At least when I was going through college, like, was someone that I looked up to, a lot of people looked up to. But I I was trying to think about, like, what was special about, your story, and I think it was just the fact that, I don't know, you were really good about telling your story as it was happening. And maybe that's just like when someone wants to put you on the cover magazine, you don't say no.
Speaker 1:But I was wondering what that experience was like at the time trying to balance, like, promoting your business, growing what you're working on, but also, like, were you aware that you were, like, acting sort of as an educator almost or sort of as, an inspirational speaker.
Speaker 5:No. I yeah. It's kind of not Gary Vee levels of No. No. No.
Speaker 5:But, yeah. It was I think back then, all these social platforms were just coming online. Yeah. So, you know, when we had Twitter, I was literally telling people where you would go. Yeah.
Speaker 5:You'd go to South by Southwest and be like, hey, I will be at this bar. Come meet me. People would come and meet you Yeah. Very different use case than what it is today. Yeah.
Speaker 5:And that was just kind of when you're you grew up in that environment, it was very much about sharing everything.
Speaker 1:Yep.
Speaker 5:So, you know, Foursquare was big with the check ins, and and it was just second nature to say, I'm building this new feature. Check it out. Mhmm. And it was kind of a real time bring you along for the adventure, show people how you the secret sauce behind the scenes. Yeah.
Speaker 5:And people, the fans, the users of the platform of Dig way back in the day in 02/1956, they loved seeing that kind of secret little they felt like they were an insider in
Speaker 1:some sense. Totally. Yeah. I I it's interesting. I wanna talk about the evolution of social media.
Speaker 1:We were talking to Brian Chesky about this yesterday, that it was social media, then it became or it it became social it was social networking, specifically to meet real people.
Speaker 2:Yeah.
Speaker 1:Then it became social media, and then it just became algorithmic media. Right. And and there there's a little bit of, like, I wanna be contrarian about it because, two years ago, I was in New York, and I did just send the tweet, hey. I'm going to this bar. Mhmm.
Speaker 1:And I had a little bit of an audience from posting on Twitter and YouTube video making and stuff, and, like, 30 people showed up, and we just got beers together. It was like it was like old school Twitter. So I'm wondering, like, how much of that IRL stuff has actually died? There's the run club movement. There's still stuff there.
Speaker 1:But then at the same time on the opposite end, you have the algorithmic feeds, TikTok, the Soros. And so how are you processing that? Is it a barbell, or are we on some, like, straight curve to the end times? I I believe that
Speaker 5:with the AI, quote, unquote, slot
Speaker 6:Yeah.
Speaker 5:Over the next, couple of years Mhmm. Pretty much social media is gonna be dead. Yeah. I I think a lot of it will be agents in there acting like they're your best friend and just you won't know what to trust. Yeah.
Speaker 5:And so if that's the case, it's actually very freeing. Yeah. Because you get into a world where, okay, I don't trust any of this mainstream. Everything is public. Yep.
Speaker 5:Let me find an intimate space to hang out. And have real conversations again. Yeah. And so I like this idea, some of the the functionality that Alexis, the the co founder of Reddit and and myself are kind of working on the dig stuff that we're just brainstorming is what if you met someone in real life and you pull out your phone and the connection that happens actually shows that it was geofenced and happened in real life. Mhmm.
Speaker 5:So you can see, oh, this is I just don't have these random followers, but I'm actually these are real humans that this person has interacted with Sure. Then it's a proof of a heartbeat and proof of a person behind the scenes
Speaker 1:Yeah.
Speaker 5:Which is going to be more and more important long term as these agents are just manipulating us and acting like they're actually our best friend.
Speaker 2:Yeah. Yeah. I've noticed You're personally saying, like, effectively, you could have a social graph that was based on, like, actual real world proximity?
Speaker 5:Well, I think it's a gradient of trust. I think when we when we come to social in the future, you're gonna say, who is this other person? Yes. We'll have our household names that we know that's actually a person behind the scenes there. But if you're reading a product review on Reddit, like, how do you know that that is a person or a bot or something else or somewhere in between?
Speaker 5:Right? And I think this idea of a gradient of trust where you say, okay, I know this is a human because they've had this in this many in person interactions. And if they're talking about, let's just say, an Oura Ring, they can do what's called a ZK proof or a product attestation where they can say, I actually have owned this for the
Speaker 4:last five years, and I
Speaker 5:can prove it without compromising my privacy. Yeah. That type of gradient of trust and exposure of what's going on here is going be so essential to understanding can we actually believe behind the scenes that there's something real here versus it just
Speaker 2:I I still I still every every time I see an a a comment or a post that's obviously written by AI and I think I identify it and I just scroll past it because it's not you know, if it's taking, like, the average like, it's a if the if the response is effectively, like, the average response of everything that Reddit has thought about something and then just turning that into a post, like, I just I don't wanna read it. Right? I want, like, opinion from real people that have, like, thought through what they're
Speaker 1:Yeah.
Speaker 2:Saying. And but I but I I'm I'm certainly worried about, you know, the boss just, like, updating their preferences Yeah. Basically with the models and just be like, don't use an Emdash. Don't Right. Don't say if this, then that.
Speaker 2:It's not this, then that. Right? And then suddenly, can't tell it that it's real or not. And
Speaker 1:Okay. So both of you, I want you to help square this for me because you have this preference for, interacting with real humans. That's certainly real. But you also have, probably, don't think you'll be at the front of the line for to scan your eyeball for WorldCoin or something like that. And so how, like, how do you see the the tension between those?
Speaker 1:Like, you want to maintain privacy and all of the all of the human human rights that you get online, but also be in a bot free world? Like, what are the possible solutions that either of you see?
Speaker 5:There's a ton of them out there right now. Some of them are pretty early days. Yeah. I think I think the the ZK proof stuff is really interesting because you don't compromise personal integrity or you have to reveal anything about you. Sure.
Speaker 5:You can actually use math to prove something and and trust that
Speaker 1:Yeah.
Speaker 5:Which is huge. There's obviously, you know, the extremist kind of KYC or eyeball scanning or things of that nature. For certain use cases, if you're interacting with your financial adviser, you want that other side to be insanely verified.
Speaker 1:Yeah.
Speaker 5:Yeah. If someone's recommending a product, I want know that they've owned it for x number of years. There's a bunch of so it is that gradient. Or if you say, hey, listen, I have Crohn's disease. You want to be able to show up in a subreddit or a forum somewhere and be anonymous.
Speaker 5:And that's great too. So but we just have to decide when and how to turn on that level of understanding.
Speaker 2:I'm I'm already thinking about, like, because there's these farms that, you know, agencies that will go to brands and say, we're gonna we're gonna run your Reddit strategy. We'll buy we'll buy So have you owned have you owned the Oura Ring for more than five years? Like, we will buy
Speaker 1:your account. Right. You know, all this stuff.
Speaker 2:And then there'll be another there'll be another level.
Speaker 1:I do I I do wonder if there's room for new consumer products. I was I was, you know, if you shoot, even digital photos, there's the ability to add a cryptographic signature into those photos. And maybe that would be a way to prove some sort of humanity without having it be such a reflection of yourself and your and your personal identity, but it's more like, okay. This person's been taking photos that have been cryptographically proved to be taken with this camera and uploaded. Mhmm.
Speaker 1:So we know that they're not AI, and they've been doing it for a long time. There there's some sort of, like, account level trust that happens.
Speaker 5:I I really want that to happen. Yeah. That'd really a huge problem here where, you know, I love Google. I love the AI. They're bolting it onto everything.
Speaker 5:Yeah. And I'm like, some of the things I look at, I'm watching the demos, like, do we really like, there's a they're they're like, there's oh, a gate in the background of your family home. Erase the gate so it looks more like a hedge in the background. I'm like, okay. The kids that look at that photo Yeah.
Speaker 5:Two decades from now are be like, did we have a gate there? Like, how did that disappear?
Speaker 2:No. I had a I a weird face.
Speaker 1:A I
Speaker 2:had I something with, my kids were, our nanny, like, took a real video of the backyard Mhmm. And then, like, used AI to put a have a dragon fly into the backyard
Speaker 5:Right.
Speaker 2:And then was showing the video to the to my kids. Yeah. I you gotta tell them, like How old
Speaker 1:are your kids?
Speaker 2:Not, like, three and a half.
Speaker 1:Yeah. They're not gonna understand me.
Speaker 2:Yeah. So you can say, like, this is not real, but they're like, I'm seeing it with my own eyes.
Speaker 5:How is it not real?
Speaker 2:How is it how could it not be real?
Speaker 1:I really I really try and ground this in, like, I mean, like, you saw an AI picture of me, but this is like Disney. This is like Bluey, or this is like Pixar. And because the like, even the four year old understands that, like, the cartoon is not real. And if you see it on the screen and I do I there is that bull case where once once anything can be fake, you assume everything is fake, and then you just and
Speaker 2:then you come into that. I've thinking of the value of books written before 2021. Yeah. Right? Totally.
Speaker 2:Where if there's already this nostalgia for the past, think about with with books knowing that the writer I don't care if you use a quill or a typewriter Yeah. Or a computer to write it. But Yep. There's some element to knowing that, like, you know, thousands of hours were poured into, you know, creating this thing and and they were highly intentional about every single word and they they, you know, typed out the letters. Yeah.
Speaker 2:Even if they worked with a ghost writer, it's still like that ghost writer was spending a lot of time and energy and then you can now create a book and Yeah. Basically ready
Speaker 1:to write Boolean before 2021 in every search bar forever. Yeah. I actually bought same way.
Speaker 5:I bought a domain name mehuman. I never launched it, but it was one of those things where I thought to myself, okay. I'm going to create a field that doesn't allow you to paste into it. Yeah. It washes your keystrokes.
Speaker 5:It verifies proof of human. And it's just for sending thoughtful letters to other people, and it would put a little stamp at the bottom letting you
Speaker 4:know that you actually typed this whole thing out Yeah.
Speaker 5:Versus just running it through an AI to get something meaningful.
Speaker 2:No. We're have you have seen the, like, the the the crisis in in in wedding speeches now where, like, every wedding speech is just
Speaker 1:spot on. I recently went to a wedding, and and I was playing this game with every all my friends who were driving down to the wedding. And I was like, okay. Let's play some bets. How many weddings will mention AI either in the positive or negative?
Speaker 1:Like, uh-uh. Just so you know, I didn't use AI. Right. And then how many of them will sheepishly acknowledge that, yeah, use ChatGPT for this. So we're all placing bets, and we're like, okay.
Speaker 1:We think three on average will mention AI. Two will sheepishly admit AI. And there were no speeches at the entire wedding. The whole wedding, were just like, yeah, we're just not doing speeches. So there were just no speeches and it was awesome.
Speaker 1:It was just dancing and partying and like and they they they did vows, but they didn't mention
Speaker 2:somebody somebody out there that's doing a wedding speech, they're like, you know, a little nervous. So they're reading off a piece of paper and they go blah blah blah, m dash, blah blah blah. Exactly. Like Yeah.
Speaker 1:This wedding
Speaker 2:is How how are you processing the the browser wars Oh, which to me right now is is seems more like, you know, a group of people throwing stones at the Chrome Castle, you know. It's it's just kind of in there glancing off. Right? And and so we'll we'll see if if any of them get traction. But how how have you been kind of processing?
Speaker 5:I I've played with them all. Yeah. I do appreciate how there's finally innovation coming to the browser. I like how they're it felt initially like some bolt on technology where it
Speaker 4:was like they're just shoving AI in here for the sake of AI.
Speaker 1:It's a sidebar.
Speaker 5:Now it's fast. Like, OpenAI's browser performance. Like, it was snappier than I thought. You know, when I remember when I was at Google many years ago, a lot of the search team obsessed over milliseconds of shaving down the result time to get people to the result that they actually wanted. We're still clunking in the early days there in terms of inference on the AI side, but it's getting better.
Speaker 5:Perplexity, okay. I think OpenAI did a little bit of a better job. I've I've used Arc for a while and some of
Speaker 2:those But knowing knowing what you know about consumer products
Speaker 3:Yes.
Speaker 2:Let's say that Atlas is I was estimating it at maybe, like, it's 1.1 times better.
Speaker 1:10% better.
Speaker 2:10% better.
Speaker 1:Is that enough to get people to rip out their their current browser? Because there's some there's some categories where something that's 10% cheaper, it's a commodity. Everyone will just switch over to buying the cheaper thing. Inference tokens from b to b SaaS. Right?
Speaker 3:Sure.
Speaker 2:Yeah. But your browser is free today.
Speaker 1:There are other To get rid of the iPhone, it's gotta be 10 times better because I've been dealing with bad speech to text and weird Apple intelligence features, and I'm stuck here because, you know, I have lock in.
Speaker 5:It's mostly iMessage. Yeah.
Speaker 1:Yeah. IMessage is a great one. And so, yeah, the question is in the browser, do you think it's like you need to be 10 x better, or is two x better enough?
Speaker 5:That's tricky because as a technologist, I'm naturally drawn to play with these things regardless
Speaker 1:Me too.
Speaker 5:Whether they're 10 x better.
Speaker 1:I like, I'm I'm gonna switch.
Speaker 2:Yeah. But you're not but you're rational and that you're not that doesn't mean if it if something's 10% better and you kinda know that it's 10% better Yeah. It doesn't necessarily mean like, oh, I'm gonna switch over all my workflows and Yeah. Yeah. I just it's there's like this like activation energy.
Speaker 8:Yeah.
Speaker 5:Yeah. Yeah. There's there for the average consumer, they're
Speaker 4:not thinking about what browser they have.
Speaker 5:Yeah. Like really, truly, they're not. They're like on their Windows machine and launching whatever the default is there. Yeah. A lot of people use Safari still.
Speaker 1:People use Edge.
Speaker 5:People use Edge. Yes. So there is a there is a a group of people here that will say, this is I remember when Firefox first started getting off the ground, and and there was some massive incumbents, I e, and others out that were out there. And there's this grassroots effort from technologists that said, this is better. It's more secure.
Speaker 5:It's faster, all these things. Yeah. And eventually got enough adoption to where it didn't it never took over market share, but it was double digits of adoption. Yeah. Yeah.
Speaker 5:And I think that's what we'll see with some of the AI. And it's table stakes. They have so much capital. Why do they care?
Speaker 1:Yeah.
Speaker 5:Yeah. They just want to have this as a way to gain more market share, and it's more things that they can deploy that are slightly defensible to give them an edge over other AI companies.
Speaker 1:Yep. I have a question that I like to ask people who've worked on a lot of different projects. What's one project throughout your career or life that you feel is underrated? It's like your baby didn't get enough attention. Maybe, you know, didn't play out the way you wanted, but you still love it and, and want it.
Speaker 1:We asked Gabe Whaley from, Mischief This, and he told us this wild story about doing a ship of Theseus thing with a sink in the MoMA or something like that. It was crazy. But are there any projects that you think like, okay. If I could if I could get a hop in the time machine, go back to this particular date and run this particular strategy again, that's the moment that I'd wanna, like, dig into again.
Speaker 5:Well, we we had a a product called Pounce
Speaker 1:Yeah.
Speaker 5:That was a competitor to Twitter way back in the day. Sure. And that had probably, an additional seven or eight features that are now just built into Twitter. Sure. And a lot of there was other there was other kind of competitors at launch that were more business focused.
Speaker 5:And I think if we would've gone that direction, it'd have been a massive product. The one that I would say was the the the funniest in my kind of product building experience over the years was back in 02/2005, early two thousand five. I created for the first time the ability to vote down comments and have them auto collapse in. Oh. And so they would just show the top line.
Speaker 1:Yeah.
Speaker 5:Yeah. And so we wrote it back on that software that if it had five down votes, it would auto collapse a comment. No one had done this before, and that's fine that someone would have figured out how to do it. But we launched it first. This is before Reddit had it.
Speaker 5:And it came out and we thought there was a massive bug because we we went to the story and it had 200 negative, like 220 some negative votes on it. I'm like, it's impossible because it collapses after five. And so we did a bunch of debugging. We found out that actually what people love is to expand a shitty comment, look at it, and be like, yeah, that guy is an ass, and then and then bury it down in. And we had never discovered that human behavior would lead us in that direction, and we're like, oh, people love be on
Speaker 2:the dunk.
Speaker 1:Love to hate. Love to dunk.
Speaker 5:So that was, like, the first time I'm like, oh, the Internet's horrible. Yeah. So How are you how are you
Speaker 1:processing the fact that there's, like, three or four direct Twitter competitors now that seem large and scaled and sustainable? I remember the
Speaker 3:Wait.
Speaker 2:What are the
Speaker 1:A blue sky threads. Threads.
Speaker 2:But is blue sky I I would love to know Mastodon and blue sky's, like, actual Blue
Speaker 5:Sky's around 30,000,000 actives a month or something like that now.
Speaker 2:Yeah. But but but decline is it declining?
Speaker 5:No. I think it's
Speaker 2:it's stable.
Speaker 1:I the the main thing is, like, I remember, there was someone who launched, a paid Twitter at one point that was gonna be all, like, API driven. There were a number of folks who were thinking about, like, the next version. And maybe we maybe it goes back to that, they were only 10% better. And in fact, getting into your ideological echo chamber, whatever that is, is is a 10 x better experience. But how have you been processing this?
Speaker 1:The the fragmentation of, like, how short form the answer isn't just add more features. It's like something about the community.
Speaker 5:Well, I I listen. I think we're entering into a world of personal software. I think this idea of vibe coding Sure. Is gonna be taken more and more seriously every single month that goes on. I like that.
Speaker 5:There is a right now, as someone that say, two years of CS and then couldn't wrap my ADHD around head around all of
Speaker 2:it. Yeah.
Speaker 5:Yeah. I dropped out, but I'm a proficient kind of senior coder
Speaker 1:Yeah.
Speaker 5:Right now with Cursor. Yeah. And six months from now, I'm just gonna be able to do anything I want. Yep. And then the average consumer will be able to do anything they want, kind of Wix or like, you know, Squarespace styles Yeah.
Speaker 5:For websites, what they do for websites in a year or so from now. Yeah. So if we're gonna have personal software all over the place, you're gonna see millions and millions of more apps and products that hit the market.
Speaker 1:Yeah.
Speaker 5:It's a it's actually a a beautiful thing in that the entrepreneur will have more control over their destiny than they ever had before. Mhmm. They won't need to raise venture capital or they'll do it at much higher valuations because they'll have product market fit first. So VCs are screwed, which is actually awesome Yeah. Because it's putting the power back into the creator's hands.
Speaker 5:And I think we're gonna see all of these little microcosms, these little tiny sectors of very personal, intimate, human driven conversation that may or may not bridge together via decentralized infrastructure that ties all the connective tissue a la Mastodon Mastodon or or a Blue Sky or something that is like piping it all together. We'll see. Yeah. But I believe there's gonna be a lot of value mined in that because if you go to a subreddit that's, like, Japanese woodworking with several thousand people, you don't it doesn't need to be 10,000,000 people. It just needs to be a thousand that deeply care about a topic to extract value from that topic.
Speaker 1:Yeah.
Speaker 5:And the more of that gets built and gets launched and creates these smaller communities, I think it the better it's gonna be for the world because we will have real information created by real users sharing very intimate things with each other.
Speaker 1:Yeah. Do you think that's just, like, the the long tail of software innovation just kind of rises? And so in that woodworking Yes. You know, sub subreddit or
Speaker 5:community app. They'll have
Speaker 1:their own functionality. And they're shared between them. Right. And even though there might only be a few people that are actually coming with the the ideas or identifying the problems to solve, Once they build it, they can actually build it for a low TAM and still
Speaker 2:The the other thing zero other the other dollars. Thesis that I have is that companies that historically would never hire an engineer Mhmm. Will hire an engineer. And the example is Tyler here who builds a bunch of software that we use to run the show. And the TAM on the software is one.
Speaker 2:We are the only company in the world that needs the software that we have. You could never sell this as a SaaS company. But for us, it makes sense to hire somebody who can build this because we built you'll see like, we run the show off of this so the whole team can follow along like Right. Where we are in the show. No other com you know, maybe a handful of companies in the world could like kinda get value out of this, but it's so purpose built for what we need.
Speaker 2:We also built, like, an ad platform that, like, tracks everything for our And again, like, never would've there's not really a market for that. Yep. And so I think you'll see a lot of companies that are like, okay. Like, we're not a software company, but we can just build our own software. Yep.
Speaker 2:For in categories, like, still use a lot of SaaS. Right? Right. And so and we get a lot of value out of it, and we're not gonna, like, build our own version of of linear. Right?
Speaker 2:Or
Speaker 1:or or CRM.
Speaker 2:No. No. Maybe, but but
Speaker 1:I I don't. Much more purpose built for very specific niches. Yeah. And then we'll still be pulling the the the the the products that exist. It's like we're only using software for completely net new problems that are low TAM.
Speaker 5:Well, or just something that didn't quite fit your mold. Like Yeah. Like If you had Salesforce and you're like, oh, we customize the crap out of it. It's still gonna be customized Salesforce. It won't be your own thing.
Speaker 5:Sure.
Speaker 1:Sure.
Speaker 5:And now you have the ability just to build your own thing Yeah. Yeah. In in, like, a day. Yeah. Which is great.
Speaker 2:Yeah. The the the thing that we've seen that with vibe the state of vibe coding today is, like, you can build the the v one extremely fast Yeah. Than the actual maintenance is, like, a real
Speaker 1:It's
Speaker 2:like is is ends up being, like, if it takes you ten hours to build it, it might take you hundreds of hours over
Speaker 5:the
Speaker 2:I
Speaker 5:think that's that problem's gonna be solved very soon. I had, interviewed the CEO of Vercel
Speaker 1:Oh, recently.
Speaker 5:Yeah. Graham was great. And he was talking about this idea of vibe check, which is just like an agent that is deployed to check your code and actually go in and fix bugs and actually get it to scale. Yeah. And the the beautiful thing about engineering is these are all they're not subjective realities.
Speaker 5:Like, they they all have problems that are defined that have an answer. Mhmm. The bug the the bug should go away. The code should scale. Like, it's so we can solve this.
Speaker 5:Yeah. You know? It's not like finding the next cancer drug or something a little bit more obscure.
Speaker 1:Yeah. Which is hard.
Speaker 2:Where where, if VCs are screwed, maybe not today, but in the in the future, where where are you most excited to invest and what do you think the role of today and what do you think the role of the VC actually looks like in a decade?
Speaker 5:Yeah. So I mean, I wear two hats. I'm a partner over True Ventures. We we're we're managing a little over 4,000,000,000, so we have a lot of companies. I think VCs are, they they are very much What are managing?
Speaker 5:Yeah. Exactly. So here we go. Wow. Alright.
Speaker 5:I got one. There it is. $4,000,000,000.
Speaker 1:I love it.
Speaker 5:I was wondering if I was gonna get one today. Of course. This is fantastic.
Speaker 3:Thank you.
Speaker 1:Takes one big number.
Speaker 5:So, one big number. So 4,000,000,000. But the the companies that need our funding more than anything else right now are hardware companies. Oh. Like, because they have they actually have to bring a product to market.
Speaker 5:They have the tooling. They have all of the prototypes. They there's a lot to put. And and we, you know, have done we did Ring and Oh, yeah. Fitbit and Peloton and all these great companies, and we saw hundreds of millions of dollars to get these companies off the ground and scale.
Speaker 5:Now on the software side, it's different.
Speaker 1:Yeah. Yeah.
Speaker 5:It's different because I can we can see VibeCoders creating these things, getting to their first 100,000 or 500,000 users Yeah. Never raising any capital
Speaker 1:And getting revenue.
Speaker 5:Getting revenue. Yeah. And now guess what? That valuation jumped up from a $10,000,000 pre to a 50 to a 75 or whatever it may be Yeah. Or they don't raise capital at all,
Speaker 6:which is great.
Speaker 5:Yeah. Have that lifestyle business. Yep. Bring in 20,000,000 in ARR So
Speaker 2:we need a we need a SFF mayoral candidate that is focused on freezing seed valuations.
Speaker 5:There you go. It's like
Speaker 2:the Zoron Like like ramp for Yeah. Yeah. Zoron the Zoron of SF. It just says, like, the first round you raise has to be at a 10 cap or less.
Speaker 1:On on the hardware side, how are you thinking about AI wearables, AI devices? There's been we're in this kind of like primordial explosion. Lots of big players working on stuff, lots of existing players. I mean, Apple has a massive portfolio. But what do you think?
Speaker 5:AI wearables are insanely creepy. I think if you feel like you should punch someone in the face for having something on, you probably shouldn't invest in that company. Mhmm. The the idea that something is always listening twenty four seven just breaks down so many social con contracts that we have Mhmm. In place today with other humans.
Speaker 5:There are some that I have seen that have not launched yet that are really trying to figure out how to navigate that space in a thoughtful way that preserves privacy, but also gives you the extended functionality of having a second set of ears Mhmm. For what you're doing. And I think those are yet to launch and they're gonna be really cool.
Speaker 2:Yeah. It's it's it's interesting that a lot of the or at least some or at least one, AI wearable is saying it has to be always on. You actually can't turn it off because there's no friendship that you have in life outside of yourself that is like an always on friendship. Right? Like, I don't have perfect information
Speaker 1:Yeah.
Speaker 2:Parody with my wife. Yeah. That's part of like our relationship. Yeah. Catch up with you today and that's okay.
Speaker 2:Yeah. There's nothing that says it has to be on like it it is a very It's wild clear choice. Yeah. Product decision to say. And I think some of the ones coming down the pipeline will be like you can tap you can prompt, you know, trigger it to come on and and Yeah.
Speaker 2:Interact with it and then turn it off so that you're
Speaker 1:not What about what about less of, like, the wearable space and more of, like, just traditional consumer electronics that could either kind of, like, add AI features on and actually see acceleration, versus completely new formats? Like, in you know, are you seeing pitches for, like, picture frames or or or, you know, new new, like, the next generation ring that you wear or something that's not necessarily this wearable that's always on talking to you, but just there's a new problem that you can solve, but you need a hardware to instantiate it.
Speaker 5:Absolutely. I I think that we're in the early innings of this Yeah. Especially when it comes to personalized health and a bunch of other things. You know, I was on I was on the board of Aura for several years Yeah. And I was there Incredible business too.
Speaker 5:Yeah. It's it's been Wild, the numbers. Fantastic. Yeah. I've been insanely thrilled at the growth that company's seen.
Speaker 5:And I
Speaker 2:remember That was such a good example of a business that was like from my view, like focused on biohackers which seemed
Speaker 1:like Small fan.
Speaker 2:Small Reddit audience type thing. It was like I was around in college, you know, looking up like, what obscure things can I take that aren't illegal that will make me Nor a Reddit? Crush it on this test. Yeah. Yeah.
Speaker 2:There was a period where they were just working with like small health podcasts.
Speaker 5:This is this this is what I did there. So basically, job with Harpreet, the CEO at the time was to go in and basic he said, go find me all the different biohackers. So, know, Peter Thia was on there, like all Ben Greenfield. Yeah. Yeah.
Speaker 5:Ben Greenfield
Speaker 1:Dave Aspen.
Speaker 5:Tim Ferris, like Dave, like all of them. We would go and figure out can they invest? Do they want to be advisors? Can we get them a ring?
Speaker 1:Sure.
Speaker 5:And this was making that jump from gen one to gen two hardware, made it a lot smaller. Sure. And then we worked with Matt Walker from the Berkeley Sleep Lab to get his algorithms on there to really have the best in class sleep algorithms. And that was a huge game changer. But a lot of AI functionality will be coming to these devices to better understand things like blood pressure and a whole slew of other things that we'll eventually be able to plug in, including your genetic polymorphisms that come in from your genome to really understand who you are as a unique individual versus just a blanket for everyone.
Speaker 1:Yep. Yeah. Rank these three buckets that we've been talking to. We talked to early stage founders who are greenfield project, and they have AI tools, and they can build a company that's AI native Mhmm. Versus growth stage companies.
Speaker 1:Maybe they're at a billion dollar unicorn already. They're still in founder mode. Might be a little tired, but AI is reenergizing them, and they're able to layer on AI. They're not like, what is this AI thing? Right.
Speaker 1:They're aware. They Right. Used Chad GPT the day it came out. And then there are the public companies. Maybe they have a professional CEO, they have to go through a real business model transition.
Speaker 1:Mhmm. How do you see each bucket faring? Where are you most excited?
Speaker 5:It really comes down to the leadership at the senior level. Like, if your if your c suite has a lightweight, I like ChatGPT vibe, you're not deep enough. Right? And so Yeah. It's I but I you know, what happened with with all these tech companies where they are really reducing staff Mhmm.
Speaker 5:To come in and say, okay, this next generation is less heads, more specialized, and the more of the orchestrator of the AI Mhmm. Versus just these massive payrolls, and we can do more with less. I'm seeing that with startups now where the products that they're building and shipping I I met with a startup the other day where they judge themselves based on what they call, tokens in flight. So they set their AI in like YOLO mode, and then they go to lunch and they're like, how many tokens can we put in the flight while we're sitting where we're having lunch? And then we come back and look at the results.
Speaker 1:Okay. Yeah. They just fire off all the agents who it.
Speaker 5:How they they judge productivity. It's like how how many of these they can fire up, how many chat windows can they fire up at a time to go code on their prep.
Speaker 2:We do that. We've done over a thousand interviews this year. Obviously, some were more prep than others. We definitely been like, alright. I got fifteen minutes.
Speaker 2:Let me fire up fire up a deep research while I get dressed. Yeah.
Speaker 1:That's great. Well, it's 12:30. We have to move on and talk you. This was super fun.
Speaker 2:What, anything that we missed that, that that you're excited about or or wanted to mention while you're here?
Speaker 5:No. I I think this next six to eight months, especially with Gemini three coming out
Speaker 1:Oh, yeah.
Speaker 5:Drops. And a couple of the models I hear that are being floated around and hinted about coming up. We are engineering is, unfortunately, for the last, you know, twenty years when people say, where do I go? What do I study? You know, a young person would
Speaker 1:come up
Speaker 5:to me and like, what's the future look like? Mhmm. I was always say to them, CS, like computer science. No doubt in my mind. That's not the case anymore.
Speaker 1:You don't think so?
Speaker 5:No. It's just not. Coding is a solved problem. We just don't know it yet. Yeah.
Speaker 5:And it will be in the next few months. And I know everyone's like, Bugs, scale. Yes, yes, yes. Those are great problems to have.
Speaker 2:But is it not still worth studying computers if you love computers?
Speaker 5:I think you should have a light technical understanding of what's possible to know where to bend and break and sand down the rough edges. You're gonna need that, but I think it's a different course altogether. Mhmm. A lot more focus on creativity Sure.
Speaker 1:Than it is actually Design. Jobs. And and and the structure of, like, what is the business problem that you're solving that is important. I I still lean that, the best vibe coder is a coder is a is a programmer. Someone with deep expertise will be able
Speaker 5:to I think that's gonna be a designer in the future, though.
Speaker 1:But yes. May yeah. Maybe it's a designer in the future for sure. Certainly depends on what you're building. Well, very exciting and thank you so much for coming by.
Speaker 1:Thanks for having me.
Speaker 2:Come by again soon.
Speaker 5:It's been an honor.
Speaker 1:Okay. Thanks so much. Yeah. We will talk to you soon and we will move on to our prerecorded interview with Jeff from Hyper Liquid.
Speaker 5:Jeff is
Speaker 2:one of the most impressive entrepreneurs
Speaker 1:At the moment.
Speaker 2:In the world right now.
Speaker 1:Yes.
Speaker 2:I think there will be books written about Jeff. It's fascinating I'm excited for you guys to hear this interview. We tried to get some of the history of Hyper Liquid, how it how it got started, why it got started. And then also towards the end of the interview, we get into, a bunch of different questions, that we that we, that we gathered from, some of our more on chain friends to get an idea of where Hyperliquid is going in the next six to twelve months.
Speaker 1:So So before we play this, let me tell you about numeralhq.com. Sales tax on autopilot spend less than five minutes per month on sales tax compliance. And I will kick it over to the production team to play our interview with Jeff from Well, welcome to the show. Thank you so much for joining us. Our audience here sure.
Speaker 1:He has a soundboard, by the way, so do not let that, you know Go alert. Alert. Yes. Yes. Yes.
Speaker 1:But, I would love to get the introduction from you for our audience, which is tech native, but maybe a little bit less crypto native. And so if you could just kinda break down a little bit of, like, how you're describing yourself, your journey, your business at a high level, and then we can go into a bunch of different directions.
Speaker 3:Sure. So maybe starting it may it may make sense to start with a bit of an origin story.
Speaker 1:So We'd love that.
Speaker 3:Yeah. So I guess mid twenty twenty two, we were a small team doing trading in crypto, and we're looking at DeFi and CeFi and had already kind of a sense that we wanted to build something in DeFi because of the very nascent nature of the product at that time. Basically, all the products were kinda bad, and we were and we felt like we we could make it better. And, basically, the the sort of impetus for going all in and building HyperLiquid was was when FTX collapsed. It felt like suddenly the the previously very academic concerns in crypto around decentralization and self custody, it felt like people wrote about it but didn't really care, all of a sudden, it was very viscerally important.
Speaker 3:You know, it's like, not your keys, not your coins. And Yep. We had strayed very far from the original ethos of Satoshi and Bitcoin. And so, yeah, we thought we thought, like, the world was ready for to really, like, trade trade crypto in the way it it it's meant to be, which is, like, peer to peer in a in a self custodial decentralized space. And so, I guess, fast forward to this day, Hyperliquid is the primary on chain venue for price discovery.
Speaker 3:It's it's a fully on chain financial system, and so our our kind of motto always is we wanna build something that can ultimately house all finance. And so happy to go into that more later, but, it's a blockchain. It's not just not just an exchange.
Speaker 1:But Yeah.
Speaker 3:The I guess it's it's best known as the place where people trade perpetuals on chain. It does more than a billion dollars in revenue a year, and it it kinda has been the first in many ways. And so happy to also get into, like, what's interesting about it.
Speaker 1:It's it's fascinating to hear you saying, like, it. Most founders that come on say, like, we, but it's clear that you see yourself as more of, like, a custodian of this thing that you're building and releasing. Is is that the correct frame of mind? Is that how you think about this?
Speaker 3:Yeah. So I think we we took a lot of inspiration from Satoshi. I think he Yeah. Or, you know, the the the whoever whoever built Bitcoin, they I'm not sure. But Satoshi what did say Satoshi?
Speaker 1:Yeah.
Speaker 3:It was very unique. I think Bitcoin was the first in so many ways, but one one of the main ways in which it was the first was that it was it's not a it's not a product, like you said. It's not it's not a top down company. It's it's a product. And I think DeFi and crypto in general, like, a lot of it's kind of it was inspired, obviously.
Speaker 3:Everything comes from Bitcoin, and there will never be another Bitcoin. But I think there's been a lot of kinda, like, top down, like, web to
Speaker 1:Totally.
Speaker 3:To standard type approaches in crypto. Like, you look at centralized exchanges, that's another great example. They're they're very good businesses, but they're, like, mega corporations.
Speaker 2:They're Yeah.
Speaker 3:They're not very, like, crypto native in that sense. And so we we take a lot of inspiration from from Satoshi. So we Hyperloopid really is what we think, like, credibly neutral protocol, which will ultimately be the rails that all the finance kind of upgrades their tech stack to use.
Speaker 1:Yeah. So no VCs is, at least the lore. Can you unpack that? Is that just because, like, you're so capital efficient, you don't need to raise, or is there some sort of particular philosophy around the role of venture capital in crypto? How how are you thinking about that equation?
Speaker 3:So it it really does go back to Satoshi again. I think the Bitcoin would not be Bitcoin if he had raised series a, even if best investors in the world, you know, stickest cap table ever, still still would I I would say that would not Bitcoin would not be Bitcoin. And so the Yeah. Think I think VCs actually provide a really important service to the world. They they allocate capital efficiently.
Speaker 3:They help a lot of things would like, world would not be
Speaker 2:Not always.
Speaker 3:Yeah. As a whole, I think. They've done more good than than harm.
Speaker 1:I I
Speaker 3:think Yeah.
Speaker 1:I I would definitely agree with that.
Speaker 3:And in this particular case, I think when you're when when the thing being built is a a neutral protocol on which
Speaker 1:Yeah.
Speaker 3:On which something's important as important as money, like, ought to live and transact, I think it's the the neutrality is more important than everything, and I think the there's a path dependence to that. Right? Like, if there are insiders from day one, it doesn't matter how much dispersion of supply, mindshare, talent, etcetera. There is the the sort of, like, the big bang moment will always be there and will always sort of like a scar on the record of the thing. And, like, this doesn't this doesn't matter for almost anything that is being built, and I think raising capital and hyperscaling is is a very viable strategy.
Speaker 3:But I think when you're building something that needs to be Yeah. Incredibly neutral in the long term and the history matters, I think we'd rather go slow and do it right than
Speaker 1:But we so I wanna stay on this. Like, like, you can't keep VCs from just building a position in a public token. Right? And so is it more about, like, the vibe around, like, insiders? Because what if, like, a big tier one firm was just like, we want a 20% stake, and we're gonna buy the token on the free market and build a position, and it's gonna feel and perform just like any other asset in our portfolio.
Speaker 1:Has that happened? Would that be irrational? Is there something where, like, legally, they can't do it because of the fund structure? Like
Speaker 2:Be very expensive.
Speaker 1:Yeah. But, I mean, VCs don't shy away from expensive deals. Like, we see it all the time.
Speaker 3:Yeah. But you can make that argument for Bitcoin as well. Right? Like, they're very big holders of Bitcoin, and I think a lot of VCs are very early. Maybe not a lot, but I know I know several VCs were very early too.
Speaker 3:Yeah. Coin and own a lot of it. So I don't think it's it's not about who owns it. It's about the the genesis and the origin. It's it's more of a principle.
Speaker 3:Yeah. Like it's you can't pre you can't, on the one hand, preach that this is going to be a platform that is neutral, that, like, anyone can come and build on, and on on another hand, say, like, oh, but, like, these people had a chance to build on that first.
Speaker 1:Yep.
Speaker 3:It's it's not perfect. There will never be another Bitcoin. Like like Sure. There there's a practical matter to it, which is that, you know, like, anything after Bitcoin needs to launch in a, like, very competitive market. There needs to be innovation, and something needs to fund that, etcetera.
Speaker 3:But to the extent that we can approximate the the ideals of of Satoshi, I think it's still worth striving for.
Speaker 2:No. No. How much did you know exactly what you wanted to build and then just execute it against that plan versus iterate to get where you are today?
Speaker 3:I would say very little. So so the story there is we we just wanted to come and do something that we could do well. And even doing one thing well is very, very hard. So we were we were laser focused at first. We just kind of looked around and thought, like we kinda we we weren't afraid to dream big, but we were kinda practical about it.
Speaker 3:We just thought, like, okay. Like, what's one really, really big thing in crypto that we think could benefit from a fully permissionless platform? And purpose trading was the obvious one. I think it was probably doing more than 50% of the revenue in all of crypto back then, sort of back of the envelope calculations.
Speaker 1:Mhmm.
Speaker 3:And so we tackled that initially. And I think we we one big thing is, like, we weren't willing to compromise even at the very beginning on how the thing ought to work.
Speaker 2:So you didn't you you you learned Yeah. The things not to do from FTX. You learned you were inspired by Satoshi. Was there any company off chain that that was particularly inspiring?
Speaker 3:Yeah. A bunch. I mean, I think every big company every big tech company, I think, is, like, very inspirational
Speaker 1:Mhmm.
Speaker 3:To me. I I I grew up in the Bay Area, so it's it's hard to not kind of be sort of motivated by that. I think Amazon was a really big one that what what inspired me was that they they basically, like they're they're very first principles and, like, driven but all and they're also very practical. And I think when sort of I assume it was Bezos, but maybe someone else in the org realized that they had built so much of the Internet stack that they it would be a shame if they if that just went to this, like, retail business. Like, why not sort of abstract it a bit and create the right API so that anyone can leverage this, like, amazing infrastructure they've built and, you know, that kind of being the birth of AWS and cloud computing.
Speaker 3:I think that's, like, such an amazing story, and that's inspired I think, like, that's kinda, like, how we think of HyperLiquid was that, like, it started as, you know, a blockchain optimized just to be able to do on train for purpose trading because no other infrastructure could do that. Yeah. And sort of realizing at some point that a lot of other things in finance ultimately, all of finance, we think, can benefit from this high performance decentralized ledger. And Yeah. Yeah.
Speaker 3:So I I think, like, liquidity infrastructure, like, for liquidity is one way to think about, like, what
Speaker 1:What do you think about Bezos' backs background at DE Shaw? He was a trader. That probably informs a little bit of the shape of Amazon, I imagine, versus, say, Google where they come out of research PhDs. What what were you working on beforehand? Do you feel like you brought a trader mindset into the, you know, entrepreneurial journey that you went on?
Speaker 2:Yeah. Not just the product layer.
Speaker 1:Yeah.
Speaker 3:Yeah. I think so. I think trading well, I don't really know what kind of trading Bezos was doing, but at least with more, like, automated trading, I think there's a lot of it it it feels a bit like doing physics kind of. It's like you do a lot of approximations. You don't you can't get anything exactly right because markets are are basically there there's there's a lot of randomness.
Speaker 3:Right? There's more there's more noise than there is signal, and that that's kind of what makes it beautiful. It's like trying to sift through the the noise, and it's it's very different from, like, supervised learning setups in AI Mhmm. Where you kinda have, like, roughly infinite data. And Yeah.
Speaker 3:It's it's very high quality. So I do think the real world is like, building hyperliquid has felt kind of like that in the sense that you you often it it it feels like we we are we're actually, like, not very data driven at all. It's basically all intuition. It's just, like, we just think really hard about how the world should be, and we just try to do the best in there. We'll obviously, like, adapt the data.
Speaker 3:Like, if something happens and it's, like, obviously bad, like, we will we we aren't, like, delusional, and we'll we'll, like, incorporate it readily, but we won't, like, go out of our way to try to create data where it doesn't make sense to, if that makes sense. So, like, AB testing is, like, something that we just kinda, like, never do.
Speaker 1:Oh, yeah. That's funny. You you you've mentioned it a few times, but, can we just get, like, a firm backstory definition on perps, for our audience? Why what what are they? Why are they so exciting?
Speaker 3:Yeah. Let's see. So for for someone who really has no finance like, you you want, like, a sort of very, like, from zero explanation?
Speaker 1:Yeah. Yeah. That'd be great.
Speaker 3:Okay. So if you think about what is traded today Mhmm. By people that are kind of like you can trade the, like, thing itself, which is like an Amazon stock. Right?
Speaker 1:Yeah.
Speaker 3:If you want some sort of, like, leverage, which is to say, like, make more bang for your buck, then the two ways people go about doing it is, one, they trade futures, which are these are traded mostly in indices, so the bit like, S and P 500.
Speaker 1:Yep.
Speaker 3:And these things basically say, like, two people put up cash, and they just agree to pay kinda like they they kinda like a long and a short kinda create a contract. And then if the asset moves by $1, then the long side, say, makes $20, the short side loses $20.
Speaker 8:Mhmm.
Speaker 3:That's a future. And then they're they're often also settled in some, like, underlying things. So it's like we're trading on, the like, what the price of S and P is three months from now or, like, three months from now, like, you'll deliver one cow.
Speaker 1:Yeah. Yeah. Yeah. Yeah. I I think of it as, like, the the CBOT.
Speaker 1:Like, if I'm trading corn futures and I let the contract run out, like, at some point, I have to actually take delivery of all the corn, but most of the Wall Street traders have figured out, like, to never do that. But you hear about these weird scenarios where it's like, oh, the price of oil was negative, so someone bought bought it for negative money and then, like, wound up having to get all this oil and stuff. But, obviously, in in a purely financial context, that's not that that's not the outcome. But, has this just unlocked higher frequency trading, more leverage, a different shape of trader, something more quantitative, something more, algorithmic driven? Like, who are the who are the customers or who are the traders and and and why are they excited about the product?
Speaker 3:Yeah. So they're excited because so so, basically, like, features like you said, like, features kinda suck because of all these, like
Speaker 1:Yeah.
Speaker 3:Random thing. They they kinda settle. Sometimes you wanna get delivery. They're, like, all these weird things. Yeah.
Speaker 3:It's, like, keep rolling your if you wanna open. So, like, if you look at Robinhood, for example, like, that's actually much more popular with retail users than futures are. And they they they primarily trade options on Robinhood when, you know, when leverage is concerned. And options are super cool because it's kinda like a lottery ticket. You can like, as retail, you can buy a lottery ticket and feel really good about it.
Speaker 5:You're Mhmm.
Speaker 3:Downside is limited. But the the trade off there is, like, it's actually really hard to price an option, especially if you're retail and especially if you're using, like, an app that doesn't give you the information that you need. Yeah. And so you're you're kind of getting fleeced because there's, like, very complicated structures. It sounds simple.
Speaker 3:It's like a strike price expiry, but in practice, it's very hard to price. And so perks are basically like marrying these two assets into one thing. So there's you wanna trade something you want you wanna trade something that's just like the price of the underlying. You want there to be leverage, and you want there to be, like, one thing that never expires, and that's what a perp is.
Speaker 1:Got it.
Speaker 3:So let's all the liquidity in the world concentrate on one asset. So, like, if you wanna if, like, you look at Bitcoin, for example, on any one exchange, there's, like, usually one very liquid Bitcoin perp, and that's the liquid asset forever, never expires, and, like, that's where the price discovery happens. Like, billions and billions of dollars will trade Mhmm. On these Bitcoin perks. And this actually leads the underlying instrument, and it's useful for professionals because they can trade it, and it's the most liquid instrument there is on Bitcoin.
Speaker 3:It's useful for retail because it's a clearly understandable price that you cannot get screwed over on because there's only one market and it's extremely liquid. So, like, buy or sell, like, the spread is tiny. And, so it's kind of like a win win for for many, many participants. There are there'll always be participants who want options or who want traditional futures, but perps, by and large, are attractive.
Speaker 1:Yeah. What what are the biggest, bottlenecks to scaling a network like this?
Speaker 2:Certainly not talent because you've you've reached
Speaker 1:insane scale. I'm more thinking about, like, are are the tokenomics such that there are people that are setting up whole data centers? Are there ASICs being built right now to run the network? Like, I I'm familiar with kind of the how Bitcoin went where people were just mining it on their laptop, and then it turned into a data center. And then it turned, like, hunt for the cheapest energy possible with the ASIC because the algorithm was so stable.
Speaker 1:Like, what what does it actually take to scale a network like this over time, and where are you in that scaling curve?
Speaker 3:So Bitcoin's a bit unique in that I think it's the only major network left that does proof of work. So ASIC stuff you're mentioning, you know, like, all the crazy things like volcanoes, mining Bitcoins, and stuff. Like, that's all really just participating in the consensus mechanism. The all the other high performance blockchains today that I know of, least, are power rate proof of stake, which is a much more energy efficient way to do things, and it's economic security, not, like, computational security.
Speaker 1:Mhmm.
Speaker 3:So on Hyperliquid, there's not much innovation being done on how the network stays secure. It's a the it's it's a relatively solved problem economically, which is that basically people people put up the native token. Like, it's very important for the network to have its own token, which on Hyperliquid is called. Right? And people put it up, and they basically say, I'm, like, vouching for the usually, it's kind of like delegated.
Speaker 3:It's kind of like, you know, you vote for your congressman kind of thing, so it's like you delegate it to a validator. The validator says, anything I do, the stake that is staked to me is at risk. And you can do some math, then the basically, the economics work out to shut if, like, most of the stake in the network is honest, then it's fine. And if you want to acquire enough stake to do something bad in the network what bad here is, like, the the canonical bad thing you can do is, like, spend the same dollar twice. It's called, like, double spending
Speaker 1:Yep.
Speaker 3:Which is basically, like like, forking the the truth state of the network. You need to acquire a lot of stake to do that, so it's economically in so it's the the security is in the economics, not in, like, you know, create creating crazy ASICs and, like Yeah.
Speaker 1:Yeah. Bulk That makes sense.
Speaker 2:How important is brand to Hyperliquid success? Because I think you have, I I don't know that you've, you haven't necessarily focused on brand in the traditional sense of, like, hiring advertising agencies and, you know, putting together strategy decks and things like that that that, I'm sure many of your competitors do. But you have one of the most powerful brands in the world, which is like when you think of the value of anyone on earth being able to just type hyper liquid and hit post and and get this, like, you know, massive influx of excitement and, attention. It's it's truly remarkable. But I'm curious, like, what the you know, how much that's contributed to, your success versus, you know, scale and and some of these other product decisions?
Speaker 3:Yeah. I think the brand we're we're very fortunate that the community is so I don't know. Many adjectives. Like, so so strong, so, like, tight knit, so, you know, combative at times. But, like, just like like, I think I think it's very inspiring for us because we we as a team are pretty introverted.
Speaker 3:We're we're super small. We're we're we're only 11 people, and we don't have it. We don't have have no one working on marketing. And I think we even if we did, we would suck at it. So it's always been
Speaker 2:The product is the marketing.
Speaker 3:Yeah. It's not the it's not just the product. It's the product in the community, I would say, in the ecosystem. And so it kind of there's there there there are, like, many pockets. Right?
Speaker 3:There are people who are just saying on Twitter, like you said, kinda like shitposting, and I think that's, like, super cool, and, you know, I I love it. And there are also people who just, like, building on the platform. I think that's another form of like, viral marketing. Right? Like, they build products on top of the the protocol that synergize with what it is or, like, offer something new or, like, extended in some ways.
Speaker 1:And Mhmm.
Speaker 3:The the those are sort of, like, pillars of finance on Hyperliquid are, by and large, built by community members. And we hope that that trend continues. Like, anything that can be built by the community are built by the community. And I think that just, like yeah. It that kind of decentralized marketing sort of embodying decentralization not just at the technical layer, but also at the social layer, I think, is really important to us.
Speaker 3:And I think that's kind of the the brand that Hyperliquid has. It's like, you know, framed negatively, you could say that it's kind of standoffish, and maybe we're kind of we're we're too focused on tech and not focused on marketing. But in this case, I think it it what comes out of it is, like, something much stronger, which is that people feel ownership in the network in in a way that's not possible with the web two company.
Speaker 2:Yeah. Is that is that part of why, you know, the the companies that wanna eat your lunch are some of the most, you know, well capitalized large biz you know, businesses in finance, and yet it seems like, you know, they're struggling to to really compete. Is is is the is the army of people that just want Hyperliquid to win, like, just how how, you know, how how do you think about that kind of advantage? And what are some of the other reasons why your guys', like, kind of counter positioning makes it difficult to compete?
Speaker 3:Well, we honestly don't think that much about competition
Speaker 8:day to day.
Speaker 3:I think there's just, like, too much to build, and I think you're right. Yeah. A lot of a lot of people want to do what Hyperliquid does or, like, take market share, if you will. And we don't, yeah, we don't really think about what.
Speaker 2:You're like, I don't think about you at all.
Speaker 3:No. No. There's just too much there really is just too much to build. Like, I think
Speaker 1:Yeah.
Speaker 3:That if Hyperliguet succeed in in the good case, it's it's something that doesn't exist yet in the world, and I think it's hard it's easy to get bogged down by people trying to kind of chip away at something that Hyperliquid has already built or whatever, and I think that's like it's it's a bit stressful sometimes, but also it kind of detracts from the big picture, which is like we're still so far away from where we we need to be.
Speaker 2:Yeah. How big can Hyperliquid get? Like, what's your ambition?
Speaker 3:I think of it as, in the good case, basically, finance as a whole, which and when I say finance, mean, like, mean, like, coordination of someone that they do.
Speaker 1:That's massive.
Speaker 3:It's not it's not like a it's not like an
Speaker 2:You're like you're basically saying, like, if I if I don't, assume, you know, a 100% of the global TAM of finance, I will have failed.
Speaker 1:That's amazing.
Speaker 3:Oh, no. I mean, you asked how big it could get.
Speaker 1:Yeah. Yeah. Yeah. I know.
Speaker 2:Yeah. It's a good point. I like it. That's
Speaker 3:true. Yeah. Yeah. But but I I I don't I don't think it's like an it's coming in and kinda like displacing finance. It's really like
Speaker 1:Yeah.
Speaker 3:My mind is sort of like the Internet did to find so, like, electronic trading happened in early two thousands. It's been, like, more than twenty years. Yeah. It's probably about time the tech stack gets updated, and I think DeFi is kind of
Speaker 2:Yeah.
Speaker 3:Is that tech stack.
Speaker 2:Okay. I have a lightning round for you. Asked a bunch of Crypto Native friends what they wanted to ask you. So I'll go through a bunch of them and, hopefully, you can answer quickly since some of them are are pretty specific. When do you expect to see the first centralized exchange shut down their perp decks and simply run a front end on top of hype through Hip three?
Speaker 2:When will they when will they capitulate? One year. Okay.
Speaker 1:We'll
Speaker 2:track it. Any specific views on the market structure bill in The US and under what circumstances would you bring Hyperliquid onshore?
Speaker 3:That's a good question. So we we we think The US is a super important market, obviously. It's like the financial center of the world, and the dollar is the reserve currency. Capital and Yeah. Yeah.
Speaker 3:I mean, we we we're nothing more than love love nothing more than to sort of, like, have regulation in The US sort of evolve to to to sort of really embrace DeFi, and I think strides are being made in that direction. Mhmm. I I can't comment on the build specifically just because I I feel like I'm a little ignorant on it. I feel like it's changing a lot. And Mhmm.
Speaker 3:Honestly, like, I think there are really smart people working on it, and the things I've heard such as, like, you know, carve outs for decentralized finance and things like that, think are, like, really cool. Yeah. Yeah. That
Speaker 2:makes sense. Why do some centralized exchanges say that hype doesn't want to get listed?
Speaker 3:Do they say that? I don't know.
Speaker 2:I don't know.
Speaker 1:I I don't think of it.
Speaker 3:No. We don't have a want here. I think it's like we're we're building more building. I think the Yeah. You know, exchanges several exchanges have listed hype, I think it's cool.
Speaker 3:And then other ones you know, for other exchanges, it doesn't align with their priorities, and I think that's also cool. Yeah. We're not we're very, like aren't we we just, like, don't really talk at
Speaker 1:these institutions.
Speaker 2:Any plans to enable multi asset margin natively?
Speaker 3:I think it will happen, and I don't exactly know the path to where that happens, so, it could be built. Like, natively is a bit, like, not well defined here, but I think it will happen. I think, you know, if it's gonna house all the finances, surely, you should be able to use different types of collateral to trade.
Speaker 2:Makes sense. When perps on commodities and US equities?
Speaker 3:There are already some perps on. So there there are gold perps, tokenized gold, and there I think the answer to when is probably in the next year because h I p three, I think, is unlocking a lot of this. So, basically, letting it lets anyone kind of come and deploy their own.
Speaker 2:What do you think is most misunderstood about Hyperliquid today?
Speaker 3:Oh, man. There's so many things. Most misunderstood.
Speaker 9:Top One thing
Speaker 3:I would say is that it's well, the the it is a network. I think people think it's like a purpose exchange. Some people think it's like a centralized thing. It's really not. It's a blockchain.
Speaker 3:The validator sets permission list. There are currently 24 validators. You know, anyone can spin one up. It's, top top 24 by stake. The the validator set you know, every validator executes every transaction, including all the orders.
Speaker 3:So then, like, this kind of, like, base layer of, like, just, like, what it is, I think, is kind of lost because people are so they're they're focused on the product, basically, which which maybe is good. Maybe it's nice that the tech is abstracted from users.
Speaker 2:Do you miss the bay?
Speaker 3:I miss some things about it. Yeah.
Speaker 1:Mhmm.
Speaker 3:What do
Speaker 2:you miss? What
Speaker 3:do I miss? I miss I miss Chick fil A.
Speaker 1:Oh, let's go. That's a great one.
Speaker 5:That's it.
Speaker 1:That's a great answer.
Speaker 2:That's a great answer.
Speaker 3:I I miss I miss mountains, actually. I mean, that's not, like, literally in the bay, but, like Singapore's very flat. So it's it's a it's a very nice place. It's a great place to build. Yeah.
Speaker 3:But, yeah, I miss kinda, like, Yosemite and that kind of vibe. You
Speaker 1:know? Pacific Northwest. When I was in Singapore, a lot of people I interacted with said that Singapore doesn't have, like, a strong local culture. And maybe that's because it's small or maybe that's, because it doesn't have, like, an underground, like, punk scene because of different rules and regulations. Do you feel like you found, like, a great community in Singapore?
Speaker 1:Do you feel like you found a great culture there? Do you like the where the where the country is going, like, culturally?
Speaker 3:I'm honestly a bit too busy to
Speaker 1:Just lock in. Okay. No. Yeah. Yeah.
Speaker 3:It's a great place to go. I think it's it's super safe.
Speaker 1:Yeah.
Speaker 3:It's very modern.
Speaker 1:Yep.
Speaker 3:You know, good food.
Speaker 2:Yep.
Speaker 3:Air conditioning, like, that kind of stuff. So I'm honestly not a cult at this point in my trajectory, I'm not really attuned to the culture. I felt like if I were in New York City, would be kind of wasted on me.
Speaker 1:Totally. Totally. Yeah. Yeah. Yeah.
Speaker 1:You're not looking for, like, the underground art collective that will define the next yeah. You're you're you're locked in. It's great. Love it.
Speaker 2:What what is the specific framework you use for building the team? Because I imagine the level of talent that is trying to join, you know, the the core team today is is insane. But, clearly, you have some kind of framework for it. Otherwise, you would have just been, you know, a 100,000 people by now.
Speaker 3:Well, I think we actually are, like, just not very good at recruiting. So I will say that here. We we are recruiting. We're always recruiting. Yeah.
Speaker 3:We're looking I know there are a lot of super smart listeners
Speaker 1:Yeah.
Speaker 3:On this on this
Speaker 1:Show.
Speaker 3:Podcast Yeah. Show. Both. And we would love we would love for you guys. If someone's interested in, you know, like, systems engineering or high performance, sort of building the rails of the future of finance.
Speaker 3:I I really think this is like there's no better place to work, and would love for you guys to join. I we we're a super small team of 11 people. The bar is very high. I do think it might be one of the highest bars. I think we are one of the most efficient organizations, engineering organizations that I know of.
Speaker 2:That has ever that has ever existed? Did I say that?
Speaker 3:I I would I can say
Speaker 2:I feel like I can say that.
Speaker 1:I think you might be right. Yep. That sounds right.
Speaker 3:But but but we but we are trying to grow, and I think it's, you know, it's yeah. It's it's there there's a there's a lot to build. And, yeah, we just we we just have a very high bar in many in many directions, like, competence, also just integrity. I think we just care a lot about many things, and if someone listening meets all those bars, we'd love for you to join.
Speaker 2:Is it in person only, or do you guys have remote teammates?
Speaker 3:New for for new recruits, we're we're trying to do in person only. Mhmm. They're yeah. Initially, was it was remote, we found that it doesn't work super well with our work style.
Speaker 2:Last question. Are people that that brag about doing nine nine six soft?
Speaker 3:Well, this is the, like, nine to nine, six days a week thing.
Speaker 1:Yeah.
Speaker 3:Yeah. Because I imagine
Speaker 2:you're doing quite a bit more than that.
Speaker 3:Yeah. I I
Speaker 2:So that feels like part of the part of the criteria is, like, somebody comes in, they're like, Jeff, like, I like, I'm your guy. I'm I'm nine nine six. And you're like, sorry. That's not
Speaker 1:We don't do half days here.
Speaker 2:Yeah. I
Speaker 3:mean, it's I I do think it's the quality of work is the most important thing.
Speaker 1:So Yeah.
Speaker 3:I think different people, you know, burn out at different points, and that's, you know, obviously the most important. I I personally work more than that, but it's because I feel like I don't really have a cap Mhmm. Like, personally, but everyone's different.
Speaker 1:Yeah. Amazing. Sense. Well, thank you so much for taking the time.
Speaker 2:Really enjoyed this. Thank you for
Speaker 1:That's fantastic.
Speaker 2:Sharing the origin
Speaker 1:Yeah.
Speaker 2:Explaining perps for for our audience. And, yeah, really just incredibly impressed with with what you've built and excited to follow, you know, continue to follow your journey over the next, years and, decades.
Speaker 1:Congratulations. We'll talk to you soon.
Speaker 3:Really appreciate it. Thanks for having me on.
Speaker 1:Have a
Speaker 2:good Bye.
Speaker 1:And that concludes our recorded interview with Jeff from Hyperliquid. I hope you enjoyed that. If you're new here, please subscribe to the show. Leave us five stars on Apple Podcasts, Spotify. We have more crypto coverage later in the show.
Speaker 1:Talking
Speaker 2:Chris Dixon. Chad in one word.
Speaker 1:Yes. Jeff. Jeff. For sure. Also, Fin dot ai, the number one AI agent for customer service.
Speaker 1:Number one in performance benchmarks. Number one in competitive bake offs. Number one in ranking on g two. Our next guest is already in the restream waiting room. We're gonna bring him into the TBPN UltraDome.
Speaker 1:Tamash, how are you doing? Good to see you again. It's been too long.
Speaker 8:To be back.
Speaker 1:Thanks so much for hopping back on. You've been lighting up the Internet with a bunch of hot ish takes. A lot of takes I agree with, but mostly just very thoroughly researched takes. And so
Speaker 2:Not something you see a
Speaker 3:lot.
Speaker 1:Not something you see every day. So, I I'm very I'm very excited to have you on the show. Would love to, just kick it off with taking your temperature on on where you think it's the most important to focus right now. What is the narrative? Is it these, complicated structures and the vendor financing?
Speaker 1:Is it the overall bubble narrative broadly progress on, token generation or DAUs? Like, where are you spending your time focusing?
Speaker 8:Yeah. We're trying to understand what's really happening. Right? So we wrote this blog post about NVIDIA and the 110,000,000,000 of vendor financing. I mean, I I ran the numbers for, an event.
Speaker 8:The data center build out is now greater than 1% of US GDP, and we had made this prediction in '23 Yeah. That AI would generate contribute more than 1% or contribute at least 1% to GDP. And I was stunned that we're basically already there. And so we we had this question of how similar LPs will ask investors will ask us, how similar is the current environment to say 2000 when you had pretty large net network infrastructure build outs? And I was kind of in high school during the time, but I remember these companies like Lucent and Nortel and them going to the moon and then collapsing.
Speaker 8:Mhmm. And so we ran this analysis, and so we're paying attention to a lot of different things. We're paying attention, like, on the on the bull side, we're paying attention to token generation. Right? Google has released now three data points, and we can start to track if the growth rate there is slowing.
Speaker 8:Is the growth rate slowing because user demand is slowing? I don't think that's the case, but maybe there's far pretty significant improvements in overall efficiency. Mhmm. The other thing that we're spending paying a lot of attention to is just understanding the debt structures, the use of SPVs on and off balance sheet vendor financing. Yeah.
Speaker 8:And so and then the last is the depreciation schedule. So a lot of these data center companies have extended the depreciation schedules almost doubling it. Amazon went from three years to six years and then backed off to five earlier in 2025, and that's important because it's the collateral that's underwriting these loans.
Speaker 1:Yeah. Let's start with the vendor financing thing. Yeah.
Speaker 2:It is, notable that, everyone was so hopeful that AI would would in increase GDP growth.
Speaker 1:It did.
Speaker 2:And it did, but it came at the cost of 100 hundreds of billions of
Speaker 5:of CapEx.
Speaker 2:Yeah. Yeah. I will take it.
Speaker 1:I wanna start with Okay. The Yeah. With with the vendor financing because that's, ringing a lot of alarm bells. A lot of people are going to Lucent's story. I took it in a different direction, and I was wondering if you're familiar with the ASML customer coinvestment program.
Speaker 1:Because in in 2012, TSMC, Intel, and Samsung, they pitched in 6,800,000,000.0 across r and d funding and equity purchases in order to help ASML pull forward EUV lithography and 450 millimeter wafer technology. And the it was this, like, odd round trip, but it worked out. And so when when when somebody throws me, like, the vendor financing is immediately red flag, I I always wanna say, like, well, it doesn't always end in disaster. And so how much nuance should we be placing on the vendor financing stuff? How much do we need to be digging in to actually understand what's at risk here?
Speaker 8:So vendor financing itself is really common. Right? You pointed to this ASML example. It's a wonderful thing
Speaker 1:Yeah.
Speaker 8:Within the ecosystem. And the vendor financing fails when you have a closed system and they're all borrowing and lending from each other and there's no net new GDP coming into the system.
Speaker 1:Yep.
Speaker 8:Right? And then it just goes around and around. Everybody takes their tax and GDP goes to zero, which is kind of what happened. And that's not the case. Right?
Speaker 8:You look at what I mean, the the revenue growth of OpenAI, you look at the enterprise spending that's happening. There's GDP that's coming from labor spend. There's GDP that's coming from BPO operations that
Speaker 1:Mhmm.
Speaker 8:Have been executed in foreign countries that are now basically being reonshored. And so I I don't look. I think it would be too simplistic just to say vendor financing, uh-oh, worth I'm calling the top. Yeah. That's not the case at all.
Speaker 8:It's just the expectation is around 500,000,000,000 a year in CapEx and the return on invested capital and the depreciation schedule. I think the thing that we're the the bigger question is how would the bondholders make out
Speaker 3:Yep.
Speaker 8:On all this. Right?
Speaker 1:Yeah. Do you have Where does the risk actually live? Because I feel like there's this world where, you have OpenAI is kind of rolling a 20 sided dice. And as long as they don't come up with a one, they're gonna be fine, while everyone else is flipping a coin. And it's fifty fifty whether they make it out okay.
Speaker 1:And and everyone's everyone's playing the same risk game, but the risk is just way higher for some of the folks who are further out in the debt curve, in the capital stack, more risk on, more debt laden. And a lot of a lot of the narrative is, like, OpenAI is taking on all this debt. It doesn't actually feel like they're taking on that much debt. It feels like their partners might be.
Speaker 8:Yeah. That's exactly right. So I don't I don't think OpenAI is really taking a lot a lot of balance sheet risk. Yeah. I think I think it's the it's the lenders who are taking the balance sheet risk on.
Speaker 8:And so why is there some reason to be concerned with Jeep, Google ran an analysis on their GPUs and their data centers. They found failure rates, 50 to 70% utilization were significantly higher after three years, which is half of the amortization or depreciation schedule.
Speaker 1:Mhmm.
Speaker 8:Then you have next generation chip architectures. SGI just announced yesterday, Cornell Research that showed 90% improvement relative to GPUs
Speaker 1:Woah.
Speaker 8:With a new chip architecture and then a second generation that's promising a 100 x performance improvement from there. And so fundamentally underpinning all this is how fast are tokens growing, which is an inflationary force in the ecosystem, and then the deflationary force are algorithmic improvements and chip improvements. And so what is the net, you know, what is the vector that comes out of that? What is the slope? We don't know the answer, but, it seems like both are growing very, very fast, and so it's hard to predict.
Speaker 1:Do you think there's, like, much more confidence from on the inside? Or do you think that, internally, some of the deal makers are actually viewing, hey, this is a leap of faith, but we're all taking a leap of faith? Or do you think that when they when they hear us yapping about them on a podcast, they think, these guys don't know the data. They don't know how how solid of a bet this is.
Speaker 8:I bet if you're in the inside of one of these companies I mean, Google and Microsoft both said in separate earnings announcements this year that they were hardware constrained. And you just watch the consumer adoption. I think OpenAI will reach like a billion in MAU here faster than anything. And so I think if you're on the inside, there's very little reason to worry because you see the ultimate demand. We were you know, the first wave of all this AI was just better search compressing all of human knowledge into an LLM, and now we're at this tool calling or agentic phase where it will actually start to do work for us and it works pretty well some of the time.
Speaker 8:Yeah. But if we can improve that meaningfully, then the demand for token will go tokens will go through the roof.
Speaker 1:I have another question. Go for it. I'm trying to understand how people feel about the ramp of agentic commerce. Because in the limit, if I think about a billion MAUs who people are purchasing things, they're using ChatGPT regularly. They're just going to wind up buying things and taking even a 1% cut of that commerce through an affiliate revenue or a Stripe like tax or some sort of ad auction to see, well, will you buy it on Walmart or Etsy or Amazon or somewhere else?
Speaker 1:Like, just just even even not just surfacing like a direct advertisement for something you're not shopping for, That feels like that could be very lucrative on an ARPU basis. But I'm wondering how long it will take to that for that pattern to actually manifest if people aren't in the habit of searching? Because over the past two years, it's been, yeah, maybe you'll chat GPT something, but then you have the natural flow of, like, oh, then I go to Google to order it. Oh, then I open Amazon to order it. So Yeah.
Speaker 1:How do you think about that ramp?
Speaker 8:Well, super exciting time. You've had the ad market historically dominated over the last fifteen years by Google and
Speaker 1:Mhmm.
Speaker 8:And Meta. Right? 250,000,000,000 on search, about 265,000,000,000 on social. Mhmm. And so it's been really hard candidly to invest in the advertising ecosystem, but now it's wide open.
Speaker 2:Mhmm.
Speaker 8:I think the agentic commerce is is will be have pretty significant tailwinds here because you are in the flow. You are researching. I mean, I don't know about you guys, but like the number of websites that I visit compared to say five years ago has fallen off a cliff. Sure. Because I instead of going through all the forums to figure out what is the bike the best bike
Speaker 1:Yeah.
Speaker 8:Carrier for the family, I just ask and then create some of the Amazon link and I'll buy
Speaker 2:it. Yep.
Speaker 8:So maybe there's an ads model here. You know, we had we had kinda contemplated whether OpenAI or others would run a a keyword auction to inject ads into the context window, so that's the additional information in addition to the search query.
Speaker 1:Sure.
Speaker 8:You know, one of the crazy theories that I've been wondering about is I was chatting with a friend who suggested, well, if OpenAI takes a 30% cut? Not a 1% cut, but
Speaker 1:what what
Speaker 2:if it looks like the Apple app going to If you ask a retail brand, what percentage of Meta what what how much of your revenue does Meta take? It's probably like, yeah, like 30%.
Speaker 8:Yeah. Yeah. Yeah. It's crazy. Yeah.
Speaker 8:And if the performance is better, then merchants and retailers will pay it.
Speaker 1:Yeah. How do you think about, direct agentic commerce affiliate? Like, I'm searching for the best bike rack. It gives me a bunch of options. And then at the last second, it runs an auction to see what, you know, provider will actually send that to me, and they take a cut there versus I'm searching for history of the Roman Empire, but it knows that I'm interested in shopping for a bike.
Speaker 1:And so in the middle of that feed, while I'm reading a deep research report about Rome, it says, hey. Do you wanna check out with that bike you were looking at earlier? Because the Instagram flow, yes, there are people that search for camping gear, and they scroll, and there might be an ad that matches up. But a lot of times, you're just looking at family photos from friends and it says, oh, here's the thing that we know you want and you might buy it.
Speaker 8:Right. So there those are two different kinds of ads. Right? So ads, let's say within the search and then the finding an article or targeting an ad to you about a bike rack when you're reading about the Roman Empire is called retargeting. Yeah.
Speaker 8:And it's typically done from search, hugely successful advertising program. I think both exist.
Speaker 1:Yeah.
Speaker 8:And you it depends on how considered the purchase is. So everybody has a different level of willingness to spend before they say consult their spouse or Mhmm. Take some time to think about it. And so you have these impulse buys, and then you have I think retargeting works very, very well for considered transactions, so like a car. If you're really interested in the next electric car coming from Rivian, well, the ad at that point is actually pretty useful for you.
Speaker 8:And one of the things that we I learned in the advertising business was seven impressions was kind of the key to building a brand. So there there is value in both the brand building component, the retargeting component, as well as the immediate transaction part of an ad unit.
Speaker 1:Do you have an idea of I I mean, if we're just out if we're just to to play out sort of, like, a median case for, like, a bubble popping, you might map, you might map OpenAI to Google. You might map, Anthropic to Amazon, companies that made it through the .com bubble. Maybe there's some, you know, overbuilding that happens and you get a loosened and you get some big companies left in the wreckage. But what is advice to you know, if you're talking to a .com entrepreneur who raised, you know, $50,000,000, doesn't quite have product market fit. It's 1999.
Speaker 1:You now know that the bubble's about to pop. What advice are you giving a founder that, hey. It's raining right now. It's everything's really great, but it might not be that way forever. How are you setting up your business for, durability in potentially a rocky time?
Speaker 8:Great question. First is to bolster the balance sheet. And I know this goes a bit against the grain of don't raise too much capital, but I think what we learned in '21 is the companies that had pretty significant balance sheets were the ones that were able to reinvent themselves and weather the storm either by acquisition or new product. And so I think the cost of capital is incredibly low. So you should be shopping for capital if you can.
Speaker 8:And then the second thing is I think there is this notion that product market fit is this binary condition that once you pass the gate, you're done.
Speaker 1:Mhmm.
Speaker 8:And that's it's no longer the case. Product market fit is this is this status that you need to it's like a united miles. You continue to to fly Yeah. To maintain one k. And so and we saw it between '21 and '24, companies that were classic software companies literally overnight have lost their product market fit.
Speaker 1:Yeah.
Speaker 8:And that's that'll be very much the case again.
Speaker 2:You do you think the labs have an incentive to get various players to overbuild? So then they there's like a Buy a chip. Like yeah. They could they can they're they're we're a buyer. They're basically a buyer at any price.
Speaker 2:Right? Because they're GPU constrained now. But if you can collectively get people overbuild, then two years from now, you might have dramatically lower cost. And I think you're already seeing this in some cases where, like, actual GPU prices are through the roof, but then the leasing prices are quite a bit lower. Mhmm.
Speaker 2:But I'm curious if you think that, kind of playing out the game theory there.
Speaker 8:Yeah. I mean, I think so there's, you know, I think if they want long term relationships with their capital partners, they will probably want to game it a little bit, maybe not too much.
Speaker 3:Yeah.
Speaker 8:They definitely want to see a little bit of excess, and that's okay. You look at the CPU spot versus contract markets, and those there's excess CPUs on AWS and Google, and the margin structures there are really good. I think one major question with the GPU market is, you within the large hyperscalers, you do see great utilization, and there's a question around the neo clouds of what utilization are they seeing and what the United Economics are there. But overall, I I think they probably won't look to burn, others Yeah. Just because they need these relationships for twenty to thirty years.
Speaker 2:Yeah. Oracle is down 17% in the last thirty days. Do you think that will hinder their ability to actually deliver the capacity that OpenAI is saying? Just in the sense of like, you know, they were raising debt and a lot of people are saying like, they're basically properly leveraged. Maybe you shouldn't go much more from here.
Speaker 2:But I'm curious like, do they need to go to the 2020, you know, 2040 forecast Yeah. You know, 2020, 2050. Just just Yeah. Let's just keep moving out.
Speaker 1:RPO out to the end of the century. Why not?
Speaker 4:Why not?
Speaker 8:Yeah. I think I mean, it's it's a good business. Right? It produces a lot of cash. The the information article around the 10% roughly gross margin structure on some of these contracts, I think, is what catalyzed that drop in And so
Speaker 2:Yeah. But it but it did it did drop dramatically, and then it's just been chugging downhill. Downhill.
Speaker 8:Yeah. Yeah. I mean, look, these are big long term contracts with unclear demand, and the demand is growing really fast. And so I think if you're an investor, a long term investor, you have to be Sure. Hedging at some point.
Speaker 1:Yeah. There's also a lot of, like, hype that comes out when there's, like, a new biggest number. Everyone is like, oh, I I didn't even know that they were in the game, and now they're at the top of the game with the biggest number. And those people pile in, and then they might get, you know, jitters. Like, the whole detail of that margin was the the nuance there was that, well, of course, you pay for the GPUs before you start making money from them because you that's like any manufacturing process.
Speaker 1:You buy the raw materials before you make the widgets. But, you know, people obviously saw a lot of jitters in that.
Speaker 2:Did the Totally. Yeah. Yeah. Go for
Speaker 1:Oh, was
Speaker 8:gonna say, I think there's this great parallel. I don't know if you guys read the book Barbarians at the Gate which Oh was about the LBO of RJR Nabisco. Buyout. RJR Nabisco. And it was the great it was the largest buyout at the time Yep.
Speaker 8:Fueled by the junk bond wave for milking. Right?
Speaker 5:Milking.
Speaker 8:And and then that kind of one, it created the LBO asset class in a very real way, but two, it was a big contraction. And so I wonder is this will we have a barbarians at the gate book written about some of these major data center contracts.
Speaker 1:I really hope so. There are so many OpenAI books coming out, and I know that they're all just gonna focus on, like, the
Speaker 2:doomers versus the The nonprofit versus the for profit.
Speaker 1:Yeah. And it's gonna be intriguing and stuff. It'll be, like, social network vibes, but I want I want, I want, like, an Andrew Sorkin book about this more than the salacious, like, journalist take of, like, open air is bad for whatever it
Speaker 8:The business history.
Speaker 1:Exactly. The in the room. Yeah. I I I read, the Caesar's Palace heist. I I know don't if you've read that about, Apollo, and it's just like the most nitty gritty on, like, the debt restructuring that is another LBO of of the casino empire.
Speaker 1:And it's just like super fascinating to me, pretty low tam, but I hope we get one of those books just about Yeah. Because some of the novel deal structures that happen at OpenAI every single turn, even going back to the the Microsoft deal for a billion dollars of credit We're actually gonna reinvent the
Speaker 2:we're gonna reinvent the wheel.
Speaker 1:They reinvented the wheel 12 times. It's not just the the the nonprofit and the for profit. It's way more complicated. Every deal is like units and crazy, and then now these deals, it's all a lot of fun.
Speaker 8:Did Well, then think about, like, the Google ownership in Anthropic and then the Amazon ownership of Anthropic. Yeah. What does that mean when you have two strategics each owning 10 plus Yeah.
Speaker 2:That's why when when the Yeah. Google, news was was hitting the timeline yesterday and that they're working on some type of major deal, I was like, why are you surprised that a double digit percentage stakeholder is, like, working on a deal Yeah. Like, with with their portfolio company. Yeah. Like, that is, like, the obvious thing.
Speaker 1:That's, like, famously bad advice, though. Like, if you're if you're a start up, it's usually, like, don't let, don't let a strategic build a 10% position in your company unless you're actually planning to sell from them because it will preclude you from working with the other potential strategic buyers or investors. That just hasn't proven true in this market at all. It's completely different.
Speaker 2:Did anything about the Carpathi interview Oh, I update? Your kind of worldview? I I thought it was just very pragmatic and real and and, you know, the the decade of agents point was, like, I think what everybody's experiencing. That's like trying agents and talking to people. There's some that are great.
Speaker 2:There's some great coding agents. We have deep research. That's awesome. But, yeah, we need there's clearly gonna need more time needed to to figure out a lot of these, use cases. But, I'm curious what stood out to you.
Speaker 8:Yeah. I think reinforcement learning was kind of the, you know, song of the summer.
Speaker 1:Mhmm.
Speaker 8:And, there are two different approaches. One is, human labor creating virtual environments or gyms where AI can train to understand how to update your CRM. And then they're, you know, standard operating procedure based, text based. We call them context databases. And there are two those are two approaches.
Speaker 8:We've we've written an article, I think the first one on the topic about context databases. And so we definitely agree with him there that the current approach of creating these gyms mirrors the fine tuning of the previous area. And what I mean by that is if you take a regular model and fine tune it and customize it to particular task, it's really brittle. By the time the model updates or the tasks update, you have 30 to 50% of the prompts breaking, which is what we experience today in tool calling. And so I think he's he's largely right.
Speaker 8:The amount of research that's happening within reinforcement learning, which has two parts. The first is making a plan, and then the second is creating what are called reward functions. So, like, Mario gets 500 points reading a mushroom. How many points does a robot get for filling out your CRM? The first one we can do with AI.
Speaker 8:The second one is largely still research. And the amount of work or just like academic brainpower that's going behind there is enormous. So I I really hope that we make strides faster than what he said. And, I mean, I'll tell you, like, I was trying to replicate Cloud Code myself with open source technology because the plain Internet wasn't working very well yesterday. And I realized I realized, like, when you use Cloud Code or Cursor, it's tool calling is just asking the model one question and then taking the answer and then putting it back into the model and then again and again and again.
Speaker 8:And there are different loops like Gemini or yeah. Gemini CLI says do that 10 times Mhmm. And then here are the success card. Like, that's that's that's tool calling. It's extremely basic.
Speaker 8:Mhmm. And there's some management of like, okay, after the first step, this is what we learned. Now, go do this. But it's I thought it was much more sophisticated. It's and it's quite like, it's a it's very rudimentary.
Speaker 8:And it's just the way that, like, we've optimized memory around these models and we can do tasks and well, we we can hit different benchmarks for science and math. I think we'll start to see that with RL. Although, I I think the big question is do we need a new architecture in order to really solve some of these problems? And maybe that's what Karpathy was alluding to, but, we have a long ways to go.
Speaker 1:Well, thank you so much for coming on the show. This is always a great time.
Speaker 2:Let's grab more time next time. We'll talk soon. Bunch more questions, but thanks guys for coming on. Have a good rest of
Speaker 1:your day. Our next guest is already in the restroom waiting room. But first, let me tell you about Adio customer relationship magic. Adio is the AI native CRM that builds scales and grows your company to the next to the next level. We have Sean from Coinbase coming back into the TBP and Ultradome.
Speaker 1:Sean, how are you doing?
Speaker 10:Hey, guys. Good to see you again.
Speaker 1:Good to see you again too. Take a look the news. We'd love to go deeper on the acquisition, but, also, I just wanna get an update on anything else that's happening in the Coinbase universe.
Speaker 10:Yeah. Well, we were super pumped yesterday to announce the acquisition of Echo, which is the leading on chain capital formation platform. We obviously we had a little bit of fun with it on Twitter and made up on Monday even despite all the AWS Oh, yeah. Outages that were giving us a little bit of the sweats. Yeah.
Speaker 10:And
Speaker 2:Is that the first time an NFT has been taken through, like, a corporate m and a process?
Speaker 1:Yeah. That's definitely still unprecedented.
Speaker 2:A little bit easier.
Speaker 10:You could imagine the the trying to explain that to our lawyers and tax consultants.
Speaker 1:You're doing what?
Speaker 10:You're buying a company like, wait. You wanna also do an NFT thing? So, yeah, I think it was a unique n of one thing. It was, you know, obviously very specific to this acquisitions you've given. The founder of Echo is Jordan Fish, Kobe, who Yeah.
Speaker 10:You know, I think he's very much intertwined with crypto lore, and UpOnly is very much intertwined with crypto lore. So just thought it would be a cool creative way to get the crypto community really jazzed up and excited because everybody's been raving about and Yeah. Asking for him to bring UpOnly back.
Speaker 1:Yeah. It was, I think, like, the m and a announcement of the year. It was it was the best executed, like, build a bunch of intrigue, hype, controversy even in some realms, but then ultimately deliver a really positive story. It was exactly what you want out of, like, m and a comms, which is sort of the least sexy thing you could possibly do. It's usually really boring.
Speaker 1:Just a number and, you know, a couple paragraphs on, like, synergies and, like, you know, everyone's like, okay. Congrats. But this one was really well executed. I wanna know more about the vision for I I we were talking to Brian Armstrong about this yesterday. The vision for the next generation of crypto companies, they raise money on chain with Echo.
Speaker 1:What does their world look like over the next few years as they scale in the Coinbase ecosystem? What products are they pulling off the shelf? What are they taking advantage of? What does the whole, like, being a Coinbase native business feel like?
Speaker 10:Yeah. Good question. So, you know, Coinbase historically has been primarily a secondary exchange. For when you list in a token, that's where price discovery happens, and that's where, you know, most of the trading activity is. But by the time a issuer actually issues that token, it's actually pretty late in the life cycle.
Speaker 1:Mhmm.
Speaker 10:So with Echo and then a number another company that we acquired over the summer called Liquify, which is sort of like a you could think about like a Carta for crypto companies that helps you manage your token table. It allows us to have a relationship with the token issuer basically from inception all the way through those private fundraises and potentially a public fundraise to listing on the exchange, which we think about as sort of like the crypto IPO in some ways. Mhmm. And then after the fact, we continue to serve that issuer through a business account that they can use to manage just sort of the operations of their business. They can grow using Spindle, which is another acquisition that we did earlier this year, which, is sort of an on chain ads protocol that helps you find distribution.
Speaker 10:And I think our broader vision for it
Speaker 1:I know.
Speaker 10:Yeah. Exactly. Legend. Yeah. Yes.
Speaker 10:Yeah. Yeah. So we're we're pulling in all of the talents and all the legends into Coinbase.
Speaker 1:Yeah. I'm I Brian was talking a little bit about, bringing access to earlier stage investing to a broader community. Obviously, there's a bunch of regulation in the mix. I I I don't really care about the legal understanding. I wanna more know more about the philosophical underpinnings of of who gets exposure to what.
Speaker 1:There's a take that's like everyone should be able to invest in anything. There's also, like, even though you have to be an accredited investor to invest in a start up, you don't have to be an accredited investor to have money in a pension fund that winds up in a venture capital firm that gave money to a company, to a VC firm.
Speaker 2:I think one interesting thing about Coinbase is, like, you you can you know exactly like, you have a you don't know exactly, but you have a good sense of who's a qual would be a qualified investor by the assets that they custody on Coinbase. Oh, sure. It's like it's a very natural thing of Yeah. Knowing like, hey, these 200,000 people or whatever the number is, like, have have enough assets just in, you know, digital assets that they would be qualified as a
Speaker 1:Sure. Sure. Sure. Yeah. So, yeah, philosophically, what what are you thinking?
Speaker 10:Yeah. I mean, we think that everybody should have the opportunity to invest in these, in these companies. You know? I think, like, private companies are have for too long been restricted Mhmm. From an access perspective to large venture capitalists and, quote, unquote, accredited investors.
Speaker 10:And I think, Jordy, like, assets that you have are one indication potentially of, like, sophistication or insensitivity to loss. But the perverse side of that equation is it potentially locks a lot of people out from the most compelling investments that are out there. And we wanna help people be early, basically, and give people the shot at being early. And so, obviously, we, you know, we need to follow accreditation loo rules as they stand. But, hopefully, those change over time as well.
Speaker 10:And with Echo's infrastructure, you know, anybody can invest in a seed round or a series a round starting with crypto tokens and then even beyond that, looking at traditional companies as well.
Speaker 2:How how, how early do you typically start meeting with com you know, potential, acquisition acquisitions? Like, are these I imagine with Liquify and and, Echo, I know the conversation I'm sure the conversation started, like, at least a year in advance, but, what does that actually say?
Speaker 10:It's kind of variable. I think with, Echo, you know, we had known Jordan and Kobe, for quite a while, and so we we I was chatting with him when he we start he started the company. But we started to really work a lot more together earlier this year when we actually partnered. So Echo has a AngelList like product where you could start an investment group and then sponsor investments effectively and syndicate those out. And so we started an investment group for under Coinbase Ventures for the base ecosystem fund where investments that we were making, we would actually let the community follow along with us and invest in those same companies because, you you know, that's something that we heard a lot of demand for us, particularly within the base ecosystem.
Speaker 10:And I think as we started to work together more, you know, that broader vision of, hey. We can actually enable Internet capital markets. And, Echo, you have the infrastructure. Coinbase has the size, scale, and distribution. So there's potentially some magic that could happen if you bring those two together.
Speaker 10:Those conversations really materialized, and ultimately, you know, culminated in this week.
Speaker 1:Well, congratulations. I'm gonna ring the gong.
Speaker 2:Hit that acquisition.
Speaker 1:Thank you for
Speaker 2:stopping. Fantastic work. I'm sure you'll be back on very soon.
Speaker 1:We will talk to you soon.
Speaker 2:Have a
Speaker 1:great rest of your day. Alright. This is Jack. Guest is in the Restream waiting room while we bring in Nick. Let me tell you about public.com investing for those that take it take it seriously.
Speaker 1:Multi asset investing industry leading yields are trusted by millions folks. And we have Nick from Rivet in the restream waiting room. Let's bring him into the TBP and Ultradump. Nick, how are
Speaker 2:you doing?
Speaker 11:John, Jordy, great to see you guys both. How are you?
Speaker 2:We're fantastic. Big day. For you.
Speaker 1:I I already rang the gong just a few minutes ago. I wanna ring it again. What you got for me?
Speaker 11:We're excited to announce our seat around. It's a it's a big day for Rivet. How much? 5.1.
Speaker 2:5.1. Why the any any special meaning to the number or just a 100 k flyer came in at the end?
Speaker 11:You know, what's funny is this business is, you know, it's self sustaining. When you you sell a service to a customer, they pay you money. They typically pay you more than it costs to employ people Sure. At least in aggregate. And we were really selective about who we chose to work with.
Speaker 11:And so we start off really only looking for three or four to really give us a buffer to invest in a sales team and some more tax partners ahead of next season. But you meet with one great firm, they talk, you know, more people show up. We were lucky to get to work with Haystack, Sousa, and XYZ for this round. And so Love it. We're very lucky.
Speaker 1:What's the, what what's the core pitch for the business right now? How are you explaining it to new customers?
Speaker 2:Okay. So I'll give the pitch as a customer. Please. It's just an amazing service.
Speaker 1:Okay.
Speaker 2:I've I've, I've used Rivet, over the last couple years. And, so that's that part's easy. It's like you guys are really dialed, like, thoughtful. It's just smooth. And so that part makes sense.
Speaker 2:What I wanna understand is, like, the the the pitch to investors. I'm actually an investor myself. So, but not biased. Like, the product's truly truly amazing. But but what's the updated pitch to investors since it's been probably a couple years since since I participated?
Speaker 11:Yeah. To look to customers, we're a tax prep firm. Right? You'd engage with us no differently than Brooklyn or Anderson or even Deloitte. We have 30 x big four accountants on the team.
Speaker 11:That's pretty straightforward. Nobody really asks why we raised or what we've built when we sell or when we onboard clients. When
Speaker 5:we talk
Speaker 11:to investors, it's it's oftentimes focused on things that customers don't really care about. It's what have you built, you know, why are you building it? Mhmm. The toughest part of building this business is context management. When you hire a person to do a job, the context for what they did, why they did it, why they chose to put, you know, something or, you know, recommend a certain classification is hidden in their head, and it would be prohibitive for their time to write literally everything down.
Speaker 11:And so every tax season, as new people join the firm, as people leave the firm, as, you know, we get rolled up by some huge PE firm, a lot
Speaker 5:of the a lot of
Speaker 11:the actual work starts from scratch, these larger firms. And so clients get asked the same questions over and over again because no one remembers anything because no one's worked there for more than six months. And it's deeply painful for customers. Right? And they don't realize why it happens.
Speaker 11:They just know it sucks, and and it's frustrating and uncomfortable. And, wait, you don't remember my EIM? I talked to you guys three months ago.
Speaker 8:Mhmm.
Speaker 11:What we've built sits on the back end, and so it quietly ingests, saves, tracks, you know, whatever you wanna call it. Everything that is discussed about and given to us from a client. And so it's not just emails. It's Zoom calls. It's Slack transcripts.
Speaker 11:It's text messages they sent us. And just tracking all of that in one place is a massive problem. It's a massive, you know, build. That's what allows us to run this practice at scale efficiently. Right?
Speaker 11:And it's it's you know, TaxRep isn't just data entry from the w two to the tax software. It's it's gathering where the w two was in the first place. And so what we've built doesn't really replace the accounts. It just automates the tedious parts of their job, remembering everything, organizing all the information wherever it was sent, and and making sure it's stored in the right place. It's it's almost like Mike Ross from Suits and remembers everything.
Speaker 5:It's always there.
Speaker 11:It's, it's it's it's really cool to get to work with if you've been working on these larger firms for for decades.
Speaker 2:Have you bought any companies?
Speaker 11:No. No. Well, actually, yes. We did. Oh.
Speaker 11:We acquired a small AI company called Lobby. Okay. Originally, we, Melt Wilson Hobbs, the founder and CEO, and he was applying for one of our roles. And and, you know, we were deeply impressed by him and his background. And as we did the interview process, you know, we learned more about lobbying what he had built there.
Speaker 11:It was a, it was a website. You could go to it. You could upload documents. You could, talk to those documents. Sounds pretty similar to what we're building here.
Speaker 11:Right?
Speaker 1:Yeah.
Speaker 5:It just
Speaker 3:it's to be done
Speaker 11:with tax. And so as we did the interview process, I wait a second. What's happening to the team? What's what's happening to the product? He says, you know, not really sure.
Speaker 11:We haven't quite figured that out yet. I said, well, we should have you join the team. That part's easy, But we should also acquire a lobby. You know? I think I think what you built is deeply special, and and we should have it here at the business.
Speaker 11:And so Wilson joined the team last year. It's his one year anniversary is actually yesterday.
Speaker 1:Wow.
Speaker 11:And you're and he's since brought on two of his former team members. Yeah. One year anniversary. It's exciting.
Speaker 2:That's big that's big for us, you know.
Speaker 1:It's
Speaker 2:big. But you haven't bought any tax prep firms. I'm sure. No. No.
Speaker 2:How many times have how many times have people tried to get you to do a roll up?
Speaker 11:I think every investor meeting for the first six months was, so how many firms have you bought? Why aren't you buying more? You know, aren't you gonna raise a $100,000,000 to roll up 50 firms?
Speaker 1:Chad's asking what the website is.
Speaker 2:It's rivet.tax.
Speaker 1:Rivet.tax. Well, congratulations on all the progress.
Speaker 2:In thirty seconds Yeah. We're tight here. But, why why have you chosen not to roll up, tax, you know, tax prep firms
Speaker 1:Oh, yeah.
Speaker 2:And, you know, make them AI native?
Speaker 11:Yeah. Good question. It's much easier to steal their business than just to buy them. The change management of rolling up a firm, convincing the
Speaker 10:people who work there that don't like us.
Speaker 1:Yep.
Speaker 11:The whole the whole process is deeply difficult. You can expect only about half the customers, half the revenue, half the team when you buy somebody.
Speaker 5:Woah. Rough.
Speaker 11:It's not worth it. Yep. It's much easier to just tell people about what we do and, bring them onto the platform. Much, much easier.
Speaker 1:That makes a ton of sense.
Speaker 2:Love
Speaker 1:it. Absolute dog. Absolute dog. Yeah. Well, thank you so much for stopping.
Speaker 2:Great to have you on. We'll we'll talk more soon. Congratulations. Service. We'll talk soon.
Speaker 2:Bye.
Speaker 3:Thanks, guys.
Speaker 1:Cheers. Before we bring in our next guest, let me tell you about adquick.com, out of home advertising made easy and measurable. Say goodbye to the headaches of out home advertising. Only ad quick combines technology, out of home expertise, and data to enable seamless, efficient ad buying across the globe. We have David Tisch in the waiting room.
Speaker 2:Love David Tisch.
Speaker 1:Tisch. Tisch. Tisch. Tisch. Tisch.
Speaker 1:Tisch. Tisch. Let's go.
Speaker 4:Let's go.
Speaker 1:Give us the news. What's new in your world? Did you raise one fund?
Speaker 9:No. Two. What?
Speaker 2:Oh, hit that gong. We got two funds. Two new. Thank you. Let's go.
Speaker 2:Incredible.
Speaker 9:We did two because two is more than one. Yeah. Yeah. Bigger number
Speaker 1:better. They made a sequel
Speaker 2:Yeah.
Speaker 1:To one fund. It's two funds.
Speaker 9:And that's important to to do more always, especially in venture.
Speaker 2:Yeah. Yeah. Bigger is always better.
Speaker 1:What's the strategy? Put it all in one place. Give Massive secondary slug of OpenAI. What are thinking?
Speaker 9:We're we're we literally have no rules. Our plan is to give people money
Speaker 1:Okay.
Speaker 9:And and pray Yeah. And diversify our prayers and Do
Speaker 2:we need set of prayers.
Speaker 1:Where are we on the prayer meter?
Speaker 9:Should we be praying more
Speaker 1:this year than last year? We gonna be praying a lot more next year? What are you thinking?
Speaker 9:You just it's like a balance of stability and increasing at the same time. So you have to do you never, like, drop. You just keep doing more. Mhmm. And we're we're different than other VC firms in that strategy, which is important because we're selling money.
Speaker 9:Which is a commodity.
Speaker 1:Yeah. Makes sense.
Speaker 2:I love it. What what besides fundraising, has that just dominated your life the last since we last chatted or are you
Speaker 9:you are forced to file with the government at a certain date. So fifteen days after you it's like taxes, but totally unrelated. And so you have to file with the government, and so our filing date was yesterday, so we're forced to talk about it. And so that's why we did it. But we raised the money earlier in the spring and just closed it, and we'll start giving it away in the new year, which is a a 2026 treat.
Speaker 1:What's, are are are there particular areas that you feel are just, like, over, like, over hyperlink like, overcompetitive right now? All the all all like, have been picked clean of new ideas, categories where you feel like you have enough bets and maybe, you're you're gonna be declining to hear more pitches in a particular category or vertical or horizontal layer of the stack. Like, are you thinking about that at all? No. Okay.
Speaker 9:Should we?
Speaker 1:I don't know. No. I mean, on this show, we hear, like, you know, a million, like you you you wind up hearing, like, AI agents for a million things, and then you're just like, okay. Don't wanna hear that. And maybe I mean, we're not even investing.
Speaker 1:We're just like, I'm I'm kind of worried about talking about that particular niche.
Speaker 9:Yeah. Look, I think I think at the later stage
Speaker 2:Yeah.
Speaker 9:There's a lot of direct competitors. And if you're in the business of picking a later stage company, you pick one and then you stop. We're at the very earliest stage and so, we're meeting people who have ideas, who have dreams, and what we found over the years is, you guys know, is things change. And so, you might start with an idea you're gonna we don't, we don't fund intentional pivots, but people iterate. People get They into a see where there is opening and where there's too much competition, and your go to market becomes different.
Speaker 9:Your product might become different. And so, I think we don't ever close ourselves off to things. We don't try to fund direct competitors ever. We think that's just just misaligned with the the deal you're making with the founder. But I think we're open minded to what we fund and where it's coming from.
Speaker 9:And I think that in this moment, you're seeing sort of everything up for grabs still, and whether that's within verticals, whether that's in the tech stack. It doesn't mean, you know, go fund foundational models today, but I think other than that, we're pretty open minded. And then foundational models
Speaker 1:Yeah.
Speaker 9:That are not perfectly horizontal, I think are probably still on the table.
Speaker 1:Is there a new mafia emerging? I mean, we've lived through the PayPal mafia. There was a bunch of entrepreneurs You guys
Speaker 9:are sponsored by the mafia. Right? Yes. So my main goal with our new funds, we I counted only four of your sponsors
Speaker 5:Oh, yeah.
Speaker 9:That we've invested in. So, Ramp, Privy, Bezel, and Graphite. I would like to get a clean
Speaker 2:The full lineup. Yeah. So we're gonna
Speaker 9:take our money. Yes. We're gonna give it to companies. Yes. They're gonna give it to you.
Speaker 1:Yes.
Speaker 9:And and that's, we call it the new circular economy. We tried to fund the circular economy.
Speaker 2:Circular economy. Our audience will buy the SaaS. Yes. Yes. And run their businesses.
Speaker 9:I think we just Our LPs were really excited about that strategy.
Speaker 1:Perfect. Well, thank
Speaker 2:you What for your do you what's your What do you think is your most underrated portfolio company?
Speaker 9:Oh, that's a good now I have to pick a
Speaker 1:a favorite
Speaker 2:there's there's companies that that some of my favorite acquisitions are companies that like haven't been in the news for Yeah. Five years. They just get acquired for like $800,000,000 Yeah. And you're like
Speaker 9:So I have we have one of those, which is is really cool, called ID. Me, which Wow.
Speaker 1:Banger company. I know I know him. Yeah.
Speaker 9:He was on Invest Like The Best after like twelve years.
Speaker 1:Yes.
Speaker 9:The craziest origin story. So that's like a evergreen version of that, and then one day they'll they'll like win. Sort of more modern version, what Rogo's building, I think is not getting enough attention. They're I I think Gabe came on if he didn't one day.
Speaker 1:Yeah. Yeah. Blake Hall, founder and CEO of idid.me. I was at a conference, and he had a whole deck about, like, the business. And he just ripped it up, threw it out, like, minutes before, and just told his life story.
Speaker 1:And everyone was just like, this is the best conversation ever. Because he'd, like, worked
Speaker 5:in the
Speaker 1:military, like, saved lives. It was a crazy just like, you know, this is like elite business leadership. I have so much respect for him.
Speaker 2:Do you, I feel like in some ways, it's harder harder to predict the future than ever. Mhmm. Like in 2010, there was like this sense of, I think we're gonna have a bunch more Internet companies in 2020, and I feel like there's a general sentiment in the industry of like, we can't predict anything after five years. Like, we might get, you know, this crazy acceleration and AI progress and then everything changes. Right?
Speaker 2:So it's a little bit fuzzy out in the future. Do you have any sort of I reference like, there there's I'll I'll botch it, but like there's a Bezos quote which is like, in the future, people will want like cheaper things faster. Right? Mhmm. Like, can I can like build a business on on those, like, with that with that goal for a long long time?
Speaker 2:Because Do you have anything like that in early or like, in terms of how you
Speaker 9:Do I have a Jeff Bezos worthy quote to share with you today?
Speaker 2:No. No. More so, like, if you're evaluating you're evaluating something and it's like, is it purely like, yeah, I don't know if this is gonna be a market in ten years, but
Speaker 9:this sounds amazing. I think to your point, predicting two years out feels really hard right now. You're seeing such rapid build iteration from the biggest companies, and that includes the new wave of AI native companies, OpenAI, Anthropic. We saw the browser get released. You're seeing more and more, like, first principle build technology get released.
Speaker 9:At the exact same time, you're seeing, like, the modernization of Google, of Meta, of Apple, of Amazon in real time and Microsoft. They feel stronger in many ways than they did for a good five year period. So, trying to predict two years out when all of that's happening in terms of the startup world, I think is really difficult. At the exact same time when we're investing, we can't do things that we think are shorting the future. So, you have to play for something that is ten, fifteen years out, and not like, we think this is gonna happen, but we can thread a needle for three years and build a business.
Speaker 9:Oh, sure.
Speaker 2:That's a
Speaker 9:terrible way to invest. We call that short term.
Speaker 1:Short term for future. I love that. That's really, really Yeah.
Speaker 9:So we look at everything as, like, if everything this founder is saying is right, is this interesting, big enough, like fascinating to us? And that's what an investment is, is joining a journey. So, we try very hard to look at it from, you know, if this existed, is this right or cool? And not shorting the future such that it's like obvious why this won't exist in reasonable amount of time.
Speaker 2:That makes sense. I think the last time you were on, or maybe one of the times you were on, we talked about how there used to be there was this golden age of acqui hires where, like, great teams could sell to Twitter for, like, $10,000,000, and they hadn't raised much, so it was meaningful out outcome for the founders and then they
Speaker 9:Now, we do aqua quits. Right? That's what we're up to?
Speaker 2:Well Yeah. The the Yeah. I mean, obviously, the the windsurf thing.
Speaker 9:No. It's more of the like go to Facebook when you're you started a company from that company thing.
Speaker 2:Yeah. Yeah. That whole thing. But it feels like we maybe are in a new golden age of acqui hires where, like, I was advising a company, a founder, like, last week who launched a product. It's, like, it was exciting, but, like, clearly doesn't have product market fit yet.
Speaker 2:He's, like, you know, talented and has a great team. So he's getting field at all these offers that will be, like, not a meaningful outcome for the investors, but, like, you know, will be very meaningful for the team. And it feels like there's more of that right now in this moment when people are like, I don't just need to like be AI native, I need like as much AI native talent as I possibly can. I'll pay a big premium for it.
Speaker 9:Yes. And that's healthy, right? The sort of decade we had of people just staying in long term, like not going anywhere, start ups without sort of recirculation of talent, I feel like was a negative moment. I think I think the, if you go back to the origins of, say, Facebook or Uber or Airbnb, in that moment, there was more aggregation of talent on those early teams than
Speaker 11:sort of
Speaker 9:in the next wave of startups. What's interesting about this moment in AI and these very significantly funded companies, a lot of the research labs and people coming out of the foundational models, by getting the funding at the scale they're getting, and by bringing with them eight, ten, 20 people from their previous company, you're actually getting depth of talent that is capable of building something big, probably in an easier way than starting from scratch. And so, I think there's a balance to be had, but I do think depth of talent is probably the most underrated component of a quality startup, right? Your fiftieth person on your roster is amazing. And I think one of the things about Ramp that they've done so magically is this combination of hiring, retaining, acquiring, inspiring, letting people go, bringing them back, and if you go to like 50, a 100, three hundredth person at RAMP, there's just an immense amount of talent from top to bottom, and that's, I think, how you build sustainable growth that you can keep iterating and launching new and interesting products, or marketing stunts or excellent marketing campaigns, right?
Speaker 9:Yeah. And I think you're seeing that from a company where you're seeing depth of talent across all the different departments within within RAMP, as an example. Yeah.
Speaker 2:Chat wants a jersey check. What are we watch what are we rocking?
Speaker 9:We're we're wearing the, New York Rangers hundredth hundredth year anniversary jersey. It's a baby blue.
Speaker 3:Very nice.
Speaker 2:It it look fantastic.
Speaker 9:Yeah. We we haven't won a game at home yet, and so, hopefully, we're gonna bring some luck to us.
Speaker 2:Well, good luck. We're grateful
Speaker 1:for you. Thank you so much. Congratulations.
Speaker 9:As if you if you know any sponsors who need money, just let me know and we'll take care of that.
Speaker 2:Perfect. We'll make some introductions. Great to see you. Have a great day.
Speaker 1:To you.
Speaker 2:The whole team. Cheers.
Speaker 5:Thank you
Speaker 1:so much. Let me tell you about wander.com. Find your happy place. Book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning, and twenty four seven concierge service. It's a vacation home, but better.
Speaker 1:Our next guest is Chris Dixon from Andreessen Horowitz.
Speaker 2:Living legend.
Speaker 1:Welcome to the show, Chris. Great to see you again. It's been too long.
Speaker 2:Great to have you back.
Speaker 1:Yes. Last time you were on, we got to time you up perfectly with Brian Armstrong. Today, we just missed each other by one day.
Speaker 2:Twenty four hours.
Speaker 1:But, great to have you here, and would love to get the update from you and how you're framing the current, the current crypto era. It's it's in many ways linked to the AI boom, but somewhat disconnected. Like, how are you thinking about even just framing the conversation, setting the table?
Speaker 6:Yeah. So we just got our state of crypto report today, which I think, you know, had a lot of good data. I think the the, good news is I think things are trending very well. Mhmm. I think the reflection of smart policy mainly that that, you know, the Genius bill passed, which is very important, which has helped the sort of stable coin growth.
Speaker 6:I think what it shows, like, what Genius shows is is the the dual effect of smart policy, which is on the one hand, it provides a pathway for innovation. And so we're seeing not only start ups, but big companies like Stripe and, you know, Fintechs, BlackRock, Fidelity, and so forth, get involved in the space, but it also kind of eliminates a lot of the scams and bad behavior. Right? So, what we're really hoping for is a kind of similar result with this so called market structure bill, which is being considered by Congress, which would which would provide a similar kind of policy framework for the rest of of the crypto market beyond Stablecoins. So I think that we this kind of momentum is reflected in the data that we shared today.
Speaker 6:So for example, Stablecoin volume is now in the trillions. That's adjusted. We try to we have an adjusted metric we use, which remove tries to remove a lot of the bots and other kinds of stuff. True. And very importantly, that's not correlated with trading volume.
Speaker 6:So it's, it seems to be, like, sort of genuine, you know, people using for payments and treasury management and so forth. So that's a big deal. We're seeing a lot of cool kind of new emerging applications at the at the intersection of areas of crypto and AI in an area called Dpin, which is decentralized physical infrastructure, which is a way to use kind of crypto to incentivize the build out of telecom and energy networks and so forth. You know, we're seeing a lot of there's a big movement of so called real world assets, is to bring, like, stocks and bonds on chain. A lot of good momentum.
Speaker 6:I mean, honestly, like, we had a you know, it was a choppy couple of years, 2022 to point '24, and I think it's we're kinda coming out of that, and I'm optimistic, but still a long way to go.
Speaker 1:Yeah. I I always wonder about the value of these, like, high level market KPIs in crypto because there as it feels like as soon as we latch on to one, we identify one that seems to be tracking well, then it gets all thrown off by just a underlying shift in the market. Like, people were tracking, like, number of Bitcoin wallets for a while. And and that like, the idea that the next generation will even be aware if they have a wallet because they might own it through an ETF, or they might have a wallet that's abstracted away, and they're not even aware of it. And I'm wondering, like, there's there's this, like, sort of, like, the midwit take is like, oh, the KPI flatlined, but the community overall keeps growing.
Speaker 1:And so if you were taking a victory lap in 2023, you missed out on the next wave, which looked different and didn't map onto the previous era of KPIs. And so I'm wondering, like, is there is there, like, is there some ground truth that you, like, zoom out to that's just like the vibes or the people or the talent or something like that? Like, how how do you how do you get away from, this particular KPI is now needs to be deprecated basically?
Speaker 6:Yeah. I mean, there are some cape just just to be fair to the KPIs. Like, I think Darren, is our head of data science with the report, is very thoughtful on it. Like the, you know, like the stable coin volume uncorrelated to trading.
Speaker 1:Oh, sure. Sure.
Speaker 6:It seems like a real kind of real metric. Yeah. More Monthly active users, that that's not people that hold crypto. That the number of people hold crypto is in the hundreds of millions. What we track is people are actually using these kind of new apps that are on chain
Speaker 1:Got it.
Speaker 6:That we put between forty and seventy million. There's a bear bar there because it's have to get rid of bots and other things, but it's definitely been growing. And that's, like, monthly active users of apps. So, you know, it feels like a real metric Yeah. That's sustainable to your point.
Speaker 1:Yep.
Speaker 6:Yeah. But it's a good point. Like, a lot of a lot of venture capital and startups is is Vibe based. Right? It's
Speaker 1:Yeah. Qualitative.
Speaker 6:And I yeah. I think it's definitely it's definitely better. I'm actually at Yeah. Prepping our annual founder summit now. And, like, it's just the mood is better.
Speaker 6:People are building and people are innovating. You know, it feels like offense, not defense. A lot of that's the policy shift.
Speaker 1:Know Policy shift is big. Also, just like I feel like the the the bull case for bear markets is that it washes out a lot of the tourists, and then the technologists stay.
Speaker 6:It does. Yeah. I think that's right. I think that's right. I mean, I think I've been, you know, obviously doing the Internet stuff my whole career and seen many waves, including I, you know, I started my first company in the Internet downturn of the February and, you know, there was this kind of, you know, what was it?
Speaker 6:Strong men create weak times meme or whatever. Yeah.
Speaker 2:Well, I like I like that crypto as an industry rewards people that have an unwavering vision and are okay with with, you you have to have some appetite for failure.
Speaker 1:You gotta be a missionary.
Speaker 2:Yeah. Yeah. And so and I and I think that's like healthy. Yeah. Like, yeah, you have to actually believe in this long term.
Speaker 2:You have to be okay with the risks. You have to be okay with like a total ban scenario in a specific category. My question for you, prediction markets are having, you know, massive moment right now, and this was something that I'm sure you were writing about more than a decade ago in terms of its potential. And a lot of and there were various kind of attempts at prediction markets that never really reached, like, cultural relevancy and the scale and the way that they've reached today. What kind of categories do you think people have, like, thought had potential but kind of wrote off?
Speaker 2:Maybe they were too early, but we'll be talking about in, like, two years. Is it is it privacy, ZK proofs, you know, thing things along those lines.
Speaker 6:No. It's a great question. If I could just address your prior point about the whole you know, sort of sticking with it first. I have an unwritten blog post that I that I would title investing is a, emotional test disguised as an intellectual test. Meaning, one of the things I've learned over the years is just, like, sticking with it in venture capital, whether it's crypto sort of more extreme.
Speaker 6:I think it's true public markets if you read, like, Howard Marks and Warren Buffett. But it's definitely true venture, which is a lot of it, the business is just sticking with stuff. The same with entrepreneurship when it when it seems, you know, kind of tough. So, you know, that's I think it'd be amazing. Great point.
Speaker 6:To to new emerging areas. Yeah. Look. I think privacy is interesting. Like, we had a lot of, privacy is a very interesting area.
Speaker 6:Now the stablecoin bill passed A bunch of folks, like, in the policy side who were kind of, you know, kinda, I don't know, anti encryption and and privacy are now saying, wait a second. All the stablecoin payments are public. That's not good. What if you wanna do financial protection health care for, like yeah. We agree.
Speaker 6:That's why we want it. We don't want it for, obviously, for, you know, illegal activity. We want it because that that, you know, people want in normal cases, they want privacy for some of the things they do. And so we think that's very important. We have a bunch of investments there.
Speaker 6:Yep. Yeah. Prediction market's great to see them break out now. As you said, they've been the idea goes back. I wrote a tweet tweet about it, but back to Hayek in the in the fifties and, you know, DARPA started a prediction market, believe it or not, the government in 2021, I believe.
Speaker 6:Sorry. 02/2001.
Speaker 2:Oh, wow.
Speaker 6:Something like that.
Speaker 2:Wait. What what what was Was that just like, you know, just for in like intel purposes? Like
Speaker 6:Yeah. They they wanted to sort like, is there gonna be a war in Iraq? And then they thought, okay. Like, it's a little bit distasteful that people are betting on it, but the societal benefits would outweigh it. But then there was such controversy around it that they that they, canceled it.
Speaker 6:There are now rules as there should be around so called harmful prediction markets, and you you can't have those. But the kind of the core argument for prediction markets is that, yes, there's sometimes on the one hand, it's sort of gambling and betting. On the other hand, it has a real benefit as we saw, for example, in the election. You can get really objective data. And in a time in which, you know, trusted institutions seems to be dropping, like, you trust, you know, the newspaper anymore?
Speaker 6:It's nice to have a an objective source for that. So but back to your question, I think privacy is very interesting. I think, you know, I'm I'm very excited by sort of the intersection of, like, AI and crypto as an example. Yeah. My experience in tech is that often, like, if you think back fifteen years ago, people talked about mobile social cloud.
Speaker 6:It was, like, the three buck words. And they and and some people saw them as kind of different categories. In the end, we actually learned they were they were all very connected. I think that tends to happen. I think a lot of these things will converge, you know, robotics, AI, crypto.
Speaker 6:Like, these are all the
Speaker 1:kind of
Speaker 6:megatrends. And I think it's natural that they intersect and reinforce each other.
Speaker 1:Are you seeing a speed up in, in crypto start ups productivity on the actual software development side, like coding agents for Solidity or actually having a, you know, increase Oh, yeah. Definitely. You you are?
Speaker 6:Oh, yeah. Definitely. Almost all of our company. We encourage them to to use they use, you know, Cursor. And so is that what you mean?
Speaker 6:Like, the AI? Yeah.
Speaker 1:Yeah. Yeah. Exactly. Because as a consumer, I mean, I I see the data from, like, Anthropic and OpenAI and Gemini. I see that, like, tokens are being spent.
Speaker 1:And but then a lot of the consumer software that I use, you know, the United, app we like to pick on or, like, the flight booking app, It just feels like it's not it's not, like, become all futuristic all of a sudden. There's still bugs. And so I'm always interested in, like, startups are in a unique case where they can adopt new technologies and actually new workflows and then maybe gain the productivity benefit faster than legacy companies. So I'm just interested to see if if it's a unique use case. Yeah.
Speaker 6:Yeah. And I think I think it just takes a while for these things to propagate. Right? Like, United app, people ask one to do it five years from now or whatever. But Yeah.
Speaker 6:The startups are all using Yep. Using the Cursor. It's amazing. I mean, I saw some study out of some university that was like, these these tools don't make you more productive, and you just use them for I spent a Christmas break playing with Cursor. Last Christmas playing with Cursor when I build a website.
Speaker 6:I mean, it's just ridiculous how great these tools are. Of course, they they add to productivity. It's just these things take time. It's like humans the the bottleneck is always humans and policy, would say. Regulation and poll and humans, take time to change behaviors.
Speaker 6:Right? But as you say, startups tend to be the first to adopt it. Yes. We see it across the portfolio. We would be kinda surprised and and I don't know.
Speaker 6:Well, like, just yeah. It's like Yeah. Like, puzzled if somebody wasn't using a lot of these.
Speaker 1:Yeah. It'd be a kind of red flag.
Speaker 2:What what does, institutional adoption and embrace really look like? Like, what what are the kind of buckets? Like, base cases, you're supporting custody and maybe trading and then
Speaker 1:The CEO to stop talking trash at some point and then start saying this is magazine.
Speaker 2:Saying that it's a joke. That's helpful. But but how Yeah. Quickly do you think these major institutions can actually adopt crypto rails for, you know, operationally. Right?
Speaker 2:These their job is to store and move money. Crypto is, you know, more efficient in a lot of ways.
Speaker 6:Yeah. I mean, you can kinda think, like, crypto's a network. I mean, it's a network technology. Right? It's about building networks, and it was the network where 99% like, stablecoins is an example, where 99% of the potential nodes in the network felt like they couldn't join the network for regulatory reasons.
Speaker 6:So now they're all I think it'll see it in stages. So, like, the fintechs, the sophisticated fintechs like Stripe and, you know, Robinhood and Revolut and things will be first. And then over time, you'll see I I think eventually, you'll see just like a button on your Chase Bank that's like send and maybe they don't call it stable point. They call it digital dollars or something. But but you'll see, you know, it'll just be integrated into all the kind of fabric of these systems, and we're seeing a lot of activity.
Speaker 6:I mean, even, you know, Chase, I think Jamie Jamie Diamond talks trash, but I believe they have 1,500 people on blockchain projects. So, like, you know, I think I think that the important thing is the bid has flipped where the you know, like, if you talk to the folks that are like, look. We wanna do this, but, like, our legal teams won't let us. Like, now we have legislation, which is the gold standard of policy. Right?
Speaker 6:US congress passed law. So, like, now they feel comfort to do it, and that's very, important. And and I think the bid has flipped where they now see it as not a threat but an opportunity. So I think it'll be you know, it'll take time. It'll be different kind of tranches of adoption based on how advanced the companies are, But I think we're on that clear path now.
Speaker 6:Yeah. And, you know, I'm Is
Speaker 2:there is there anything that's been interesting for you guys on the buyout side, like, looking at, you know, let's say, like, a mid sized financial institution and realizing like, hey. This this is a great business. And if we actually, you know, were to Like, what fire them.
Speaker 1:General catalyst with that health care network?
Speaker 2:Yeah. Some some of that effect or or some of these role, you know
Speaker 6:I think you'll see that. I think you'll see that. I we we don't actually do that. It's not really our thing. Like, we do kind of stage venture, mostly in some later stage venture.
Speaker 2:Wouldn't it be fun to do an l LBO?
Speaker 1:Yeah. Might take your time. One of
Speaker 6:these things that probably sounds fun. Yeah. Then you're like, yeah. Like, those people, like, we get to mostly hire people in venture. Like, LBO is you're mostly firing people and it's just like a structuring.
Speaker 6:I don't know. I mean It's rough. Probably the grass is greener thing. It sounds fun and then you actually go do it. I think it's also just hard to actually change these organizations.
Speaker 6:Sometimes, I think there's a there's a real question like, do you need this new organization started from scratch or do you change some? I don't know. It's not my it's not my area. I'm just speculating. But it's that mainly is just not our thing.
Speaker 6:But I think other people are doing it, and I think they you know, the other firms doing it will, I think, accelerate the adoption of new technologies like AI and crypto.
Speaker 1:Yeah. How is the or how do you envision the role of the venture capitalist changing over the next maybe decade in crypto. I feel like there's one world where you become half VC, half hedge fund person that's trading liquids and trading liquids at the earlier stage because companies are kind of doing on chain IPOs in earlier stage, but you still need to build a position and take an opinionated view of the future of the technology, assess the team. How how is all that evolving? How do you think that that will evolve?
Speaker 6:Yeah. That's a great question. So, I mean, what we do, we've done for a long time. That's one reason we started separate crypto fund. Right?
Speaker 6:We we both do kind of early stage traditional venture and do things like buy tokens like Bitcoin directly in the market. And then we have our own liquidity and trading, and we sort of built out all these these capabilities. At some point, you'd expect that some of those things to, you know, be subsumed by outside organizations and kind of commoditized, and these practices I would expect would propagate Interesting. To to other firms. But, like, I I just look at venture, like, through the lens of, like, core like, the fundamentals are always just great people.
Speaker 6:Yeah. Like, we're ultimately in the talent business. So there's all these other kind of mechanics and things that we've built up, but in the end, we're just trying to bet on brilliant founders who have great ideas. And that can that can just either way I view it is that can come in many forms. That can come at early stage equity investment.
Speaker 6:That can come as a token investment. You know, we're also betting, of course, on communities. You think about something like Bitcoin, like, it's really a community at that point, and it's sort of this network and community. And, so I I look at it through that. I always try to whenever the markets kinda get strange and things are happening, I always say, let's go back to first principles.
Speaker 6:First principles is, like, believe in the, you know, positive vision of the future, great entrepreneurs doing you know, pursuing big ideas, you know, highly technical, highly product focused, and then then whatever mechanics we need to do to get exposure to that.
Speaker 1:Would I don't know if this is possible, if this has already happened, but would you ever see yourself backing a project that looks like Bitcoin in the sense that the founder's anonymous, you can never meet them. But for some reason, you do have the availability to make you do have the ability to make an investment like a venture capital investment. Are you equipped to make that deal happen?
Speaker 6:Yeah. Yeah. We are. We are. Yeah?
Speaker 6:But so yes. We we could just buy I mean, we could just buy tokens Yeah. OTD, and we have an operation. We've had that people don't seem to know because they think of us more as venture. We've had that since 02/2018.
Speaker 1:Totally.
Speaker 6:Just record. Yeah. And actually two third no. I would say roughly two thirds of our investing has always been that. I mean, that was part of the design and why, like, I wanted to spin this out Yeah.
Speaker 6:So we could set it up for principles with this structure.
Speaker 2:So we have, like, a I wanna be a crypto VC, but I don't wanna buy tokens.
Speaker 5:That's an
Speaker 2:oddity. That'd be
Speaker 1:insane. For sure.
Speaker 5:Well, there's
Speaker 6:a whole I could tell you that it's a longer story. It's a whole backstory where, like, it was just it was just very challenging. The LPs so, like, when we were I raised a prescriptive fund, like, went I to all the LPs and said, look. We're gonna do we're gonna buy tokens. We're gonna do this.
Speaker 6:And, like, you can opt out or opt in, and some of them opted out. And, you know, some opted in and just like, look. This is what we're gonna do. Mhmm. So we have a venture structure or a venture fund in the sense that our LP relationship is a long term relationship.
Speaker 6:They lock up their money, but on the sort that's sort of sort of the reverse mullet or mullet or whatever, where on the back end, it's like a very traditional venture. But on the front end, we can do all of we can buy tokens. We can do, you know, equity investments. Whatever way that we need to get exposure to great ideas and great people, we can do. And that was that's been our in our thing in our kind of design from the beginning, and we continue to do that.
Speaker 1:Yeah. In this analogy, I feel like the venture part is the business in the front and the and the open market trading is the party in the back. But I don't know. It's a stretch analogy potentially.
Speaker 6:I think it's a smaller
Speaker 2:But I
Speaker 1:I like a mallet analogy. It's great. But, yeah, thanks so much for taking the time to
Speaker 2:talk to get the update.
Speaker 1:Sorry. I've been to you a couple minutes.
Speaker 2:Have a great, summit. Yeah. I'm sure
Speaker 1:it's gonna be a great time.
Speaker 2:It's gonna be an amazing time. Great.
Speaker 6:Great to see bud.
Speaker 1:We'll talk to you soon.
Speaker 9:Cheers, bud.
Speaker 2:Have a
Speaker 1:good one. Bye. Let me tell you about getbezel.com. Your bezel concierge is available now to source you any watch on the planet. Seriously, any watch.
Speaker 1:And Jordy, did you put up a better run last night on Eight Sleep? I did okay. I got an 88, slept six hours and fifty minutes. How did you do? Did you get five.
Speaker 1:85. Oh, wait. I beat you by one point again?
Speaker 2:No. 85. You got an 88.
Speaker 1:I got an 88. Okay. A couple points. Yesterday in the chat, people were congratulating us on our good numbers. We gotta put up, good numbers for the chat, and you gotta go to 8sleep.com and get a Pod five.
Speaker 1:TBPN. Are there any
Speaker 2:other I was I was shocked at how, at how, like, viral, I was shocked at how viral the whole, like, AWS Eight Sleep thing went Oh, yeah. Considering that
Speaker 1:Clearly a skill issue, and I was not affected.
Speaker 2:Yeah.
Speaker 1:I slept right through. I actually slept great. My numbers were insane. It was crazy. But, yes.
Speaker 1:I mean, somebody somebody, you know, I I I I feel bad if if your if your eight sleep did, like, wind up getting too hot and you woke up and you didn't have a good night sleep. I I my I'm sending my best. I hope you get back on that horse.
Speaker 2:And, we'll close out with this post from Rune. I knew were go there. It's great. Aura farming in the Zoom waiting room. Aura farming in the Zoom waiting room.
Speaker 2:Never join. Never join. Just just hang in the waiting room.
Speaker 1:Oh, so people know that you're there? Is that how you do it?
Speaker 2:Yeah. That you could join.
Speaker 1:I feel like I mean, at one point, not to break the fourth wall here and give you a little bit behind the scenes, but at one point, we had multiple guests. When they come in, they they they hit a waiting room, the Restream waiting room, of course. And and at one point, multiple people could talk to each other, and they could hear what was happening on the show. And it was kind of like this funny networking event that was happening. And I actually think that there's there's some value there if we could get that right.
Speaker 1:But right now, we just we just let everyone sit in silence and then eventually come on, watch the show, and then join. So there's there's minimal aura farming in the TBPN waiting room, the restream waiting room.
Speaker 2:That's right.
Speaker 1:But maybe we should increase it.
Speaker 2:Well, thank you for hanging out with us today. Very fun show. I I can't wait for tomorrow. Can't wait for we have to wait, just under twenty one hours to get back. You're
Speaker 1:on line.
Speaker 2:Starts now. But yeah. The clock starts now. Thank you for Tuesday. Have a wonderful evening.
Speaker 1:Leave us five stars on Apple Podcast. See you tomorrow. And Spotify.
Speaker 2:Cheers.
Speaker 1:Goodbye.