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TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays from 11–2 PT on X and YouTube, with full episodes posted to Spotify immediately after airing.
Described by The New York Times as “Silicon Valley’s newest obsession,” TBPN has interviewed Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. Diet TBPN delivers the best moments from each episode in under 30 minutes.
You're watching TBPN. Today's Tuesday, 06/16/2026. We are live from the TBPN Ultra on the Temple of Technology, Fortress Finance, Capital Capital. Let me tell you about ramp. Time is money.
Speaker 1:Save both. Easy to use corporate cards, bill pay, accounting, and a whole lot more all in one place. Sorry about the delay. We had a little bit of a technical issue. Glad everyone's here.
Speaker 1:Thank you for tuning in. It's YC demo day.
Speaker 2:Thank you for never doubting.
Speaker 1:Never doubt us ever. No. It's okay. Every once in a while.
Speaker 2:You can You can doubt us a
Speaker 1:little bit. Pop off in the comments, pop off in the chat. But we have YC demo day. We have one, two, three, four, five, six, seven YC founders joining, then three YC partners, and then we're going around the horn talking to some other folks. Threads just hit 500,000,000 monthly active users.
Speaker 1:We're having Connor Hayes back on the shelf with that. Luke Burgis is here. Burgis is here with his new book, The One and the 99. And so we'll go through that. Not a lot of time for the news, but we'll take you through it anyway.
Speaker 2:And in the middle of guests, we'll jump in for a little news.
Speaker 3:Exactly.
Speaker 2:We love
Speaker 1:Exactly.
Speaker 2:Love the news. The big news
Speaker 1:Big news, George.
Speaker 2:Is that SpaceX ran like absolute crazy after hours last night. I I kept getting push notifications and thinking that that can't be right. And then I would double click in, check a little bit, and I say
Speaker 4:Yeah.
Speaker 1:The headlines are crazy.
Speaker 2:So, yeah. So the big one is just
Speaker 1:like it's passing this company, passing this company, passing that company. You're like, woah. This is a crazy, crazy
Speaker 5:time.
Speaker 2:SpaceX Bigger than Amazon. Comfortably in the top five Five. Company.
Speaker 1:Got NVIDIA 5,000,000,000,000
Speaker 5:Pass
Speaker 1:Alphabet and Apple right around $4.04 and a half. Then Microsoft and SpaceX neck and neck just shy of $3,000,000,000,000. And it basically makes their their Cursor acquisition free. They paid 60,000,000,000 in new stock for the company and their market cap, SpaceX's market cap, more than quadrupled and added more than 4x the price of a cursor
Speaker 2:acquisition. I believe they had until q four to actually pull trigger on the cursor deal. Yeah. Like they built in a window.
Speaker 1:They did now?
Speaker 2:I bet you I bet you there were some terms that weren't public that that Cursor would have wanted to make sure that they got in as quickly as possible.
Speaker 1:Sure. Sure.
Speaker 2:Really well. Yep. Who knows where SpaceX will net out? I mean, I thought I thought we'd be at 2,400,000,000,000 by by the middle, by basically the last hour of trading on Friday. Yeah.
Speaker 2:I was incorrect at the time, but it's obviously, you know, continued to run. And there was another scenario where SpaceX could have effectively acquired Cursor at an even higher at an even higher valuation, but I think it's a great fantastic outcome for the Cursor team. Obviously, know, OpenAI is a big Cursor investor, Thrive, a sixteen z, CodeTwo, and and others that that I'm unfortunately forgetting. But
Speaker 1:Who's Rembrandt saying about this? He said it's the biggest the biggest VC backed in the past five days, we've seen the biggest VC backed IPO ever and the biggest VC backed strategic sale ever. We've never had a an m and a of a VC backed company, young start up, north of 50,000,000,000. Like, billion is so, so big. We sort of lose sight of it because we're talking about a trillion dollars for this company Yeah.
Speaker 1:3,000,000,000,000 for that company. But 60,000,000,000 is beyond a home run. Yep. And it happened in an m and a, which is crazy. And
Speaker 2:Yep. There's I I would assume a a large number of the retail investors invest investing in SpaceX Yeah. Were not necessarily even that familiar with Cursor up until today.
Speaker 1:I did see that.
Speaker 2:If you're waking up today, you're like, wait, SpaceX just acquired one of the hottest AI Coding companies in the world Yeah. With billions of dollars in revenue. Yeah. Like, this is so bullish. Obviously, a lot of the more institutional investors or people that that had been following the company privately were well aware that they had the option to do this Yeah.
Speaker 2:That they would almost certainly take it. Yeah.
Speaker 1:The takes are all over the timeline. Quinn Thompson says, this is brilliant corporate finance. Use your newly printed low float retail inflated currency to acquire real businesses ahead of the lockup expiring, probably the most creative, accretive way to sell as much equity as possible into IPO pump. I wonder what acquisition is next. That's very interesting.
Speaker 1:Nick Carter fights back fires back and says, you think the people buying the equity would also be aware of this, and that's a good point. But, the question is, like, are there more acquisitions in the pipeline? Because Tesla has not done a lot of acquisitions. Elon's always been a build, not buy operator or founder. Tesla itself.
Speaker 1:Yeah. That's a very different scenario. What I'm talking about is, like, there there are companies. Meta is very acquisitive, Google, Apple. Apple's, like, on the smaller side, but they still do deals more frequently.
Speaker 1:It would be very interesting if we're seeing, you know, one deal a month, and he's sort of putting together the pieces of buying up NeoLabs and compute capacity and NeoClouds and rolling everything up. That would just be a completely different operating philosophy. But given where the stock is, given how smooth this deal went and where the where where the market cap of SpaceX is, it's not the craziest thing. It would be a big pivot in his in his strategy, though. Business Insider has a deep dive on Cursor's wild ride.
Speaker 1:Michael Trull didn't pay himself for years. Interestingly, Cursor once made up 40 to 50% of Anthropix revenue. That is a crazy, you know, gyration in the market. Just shows you how quickly things are changing. Went from, you know, it's all Cursor.
Speaker 1:That that business is bundling to Cursor. Cursor is the front door to this business. Then it's like, oh, it's all these hyperscalers that are spending a billion dollars, half $1,000,000,000 a month. And so the the whole the whole landscape is changing. Nothing nothing tells that more than telling Cursor that Claude Code was just a research effort.
Speaker 1:This goes back to the Dylan field, like, where they consistently can it or maybe they really just did think, hey. Yeah. This is just a research effort. Like, you do you. And then realized later, woah.
Speaker 1:Woah. Woah. We well, we need to be a player in this. We cannot be in the middle of this situation, so we gotta do our
Speaker 6:own thing.
Speaker 2:Owning the end customer relationship. Yeah.
Speaker 1:And so wild wild ride.
Speaker 2:Yeah. Similar similar to I I think the messaging to Figma Yeah. Canva around
Speaker 1:Yeah.
Speaker 2:The Dropbox design tool.
Speaker 1:Yeah. It's tricky. Every AI company is is a general use technology. They're using it for everything. There's there's, you know, questions about like, will you maintain value if you're in the token path?
Speaker 1:Do you need to be like, do not build a company that depends on the models getting better. But if the models get really, really good, like, what can't they do? And so constantly, we see every company competing with every other company as every hyperscaler has an LLM at this point, and every SaaS product has other products because they can launch features faster. And so the the competition is heating up across all these different companies.
Speaker 2:Next time we have Michael on the show Yeah. We got to ask how he paid the bills for all those years.
Speaker 1:Doing? Crashing on couches or something?
Speaker 2:Gotta ask.
Speaker 1:I don't know.
Speaker 2:Taking out massive loans against the company maybe.
Speaker 1:Anyways, let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI. Own the data platform that powers it.
Speaker 2:And also has some big news today. We're gonna get to it.
Speaker 1:We'll get to that after our first interview with Andrew Lee from Tasklit. He's the founder and CEO. Andrew, welcome to the show. Thank you for the patience and joining us on such a busy day. How How is demo day going?
Speaker 1:How are you?
Speaker 4:I'm doing great. Thanks for having me. I wanna be upfront. I can neither confirm nor deny the SpaceX acquisition rumors.
Speaker 1:Oh, okay. Flying around. They're
Speaker 2:flying around demo day.
Speaker 1:Elon Elon's probably there at demo day, shaking hands, trying to scoop up, roll up the entire batch maybe. Who knows? He's got stock to do it.
Speaker 4:No comment. Demo demo day is great. We're we're we're having a good time. There's a thousand people here. There's 200 companies.
Speaker 4:Wow. It's it's a good time.
Speaker 2:Amazing. Did you did you pitch already? Or is that ahead of you still?
Speaker 4:Not not yet. We're in we're in group four, which is gonna be this afternoon. And it's actually my cofounder who's gonna be up on up on stage giving the
Speaker 1:talk. Cool.
Speaker 4:I'll just be the pretty face over on the side.
Speaker 1:Okay. Well Perfect. Give us some backstory on yourself and tell us about the business.
Speaker 4:Yeah. So as background, I was the thing I'm probably best known for is I was one of the founders of Firebase.
Speaker 1:Oh, yeah.
Speaker 4:So this is my second time through YC. I did the summer two thousand eleven batch. Yeah. We sold that company to Google in Yeah. '20 I was there for about three years.
Speaker 4:This this company has put a very interesting story. We actually started in 2020 as a better Gmail. Like we tried to build a new email experience. Raised a bunch of money, hired a team
Speaker 2:So you quit Google to try to to to try to eat Gmail alive.
Speaker 7:Yeah. I
Speaker 4:I had already left Google a couple years before but I saw them shut down inbox.
Speaker 1:I was
Speaker 4:like, man,
Speaker 8:what are these This is
Speaker 4:a huge huge product. Like, are these guys doing? We should do a better job. Yeah. This is a terrible idea.
Speaker 4:Don't do it. Don't invest in it. But just as we were getting ready to shut that thing down, LLMs got good. And we're like, holy crap, we can take all of this data that you have and we can feed into a language model and we can draft emails for you. We can do interesting types of search and we can do categorizations.
Speaker 4:So we started kind of pulling that string. And around about this time last year, we had this really good agent inside our email client and we had a bunch of users being like, Hey, I love your product, but could you just get rid of all this inbox crap? Like the UI is getting in the way. And so we spun it out and we had a that's a totally new product, totally new code base and this is Tasklet. And we launched that in October and that's gone super, super well.
Speaker 4:And that's why we're in YC. And that's gone at the beginning of the year, we were at about a third of a million of run rate. We're at a $7,000,000 run rate now. So it's like a
Speaker 2:nice Woah.
Speaker 4:Nice fast ramp. And
Speaker 2:Is that the bar now? Like is have have is there you know, are you meeting other companies in the batch that are that have been able to ramp that that quickly?
Speaker 4:I I think we have the highest revenue of the batch.
Speaker 2:There we go. Let's go. There we go. Well, why don't we go hit the Gong? Oh, yes.
Speaker 2:And then then we can Boom. That's for you. Love that. So feels like day. So we were we were looking at at at our little summary here.
Speaker 2:AI agents that connect across work tools run twenty four seven and take ownership of recurring workflows.
Speaker 1:Does big tech hate you? Like, he is I feel like the the whole point is walled gardens. That what that's what creates value accrual. That's what keeps the value accruing to the work tools that, you know, big company CEOs love and extract a lot of value from. And, you're coming in here and digging a hole under the wall of the garden and throwing a ladder over the top and digging a hole right through the the walled garden.
Speaker 1:Absolutely. How do you, like, maintain those integrations if if if the actual platform is maybe, like, hostile? We've seen reporting about this where different companies have tried to sort of integrate across and then they've wound up with sharp elbows. I think a lot of them have figured it out. But, like, how do you think about working copacetically with the the work tools that you integrate with?
Speaker 4:Totally. So so AI has totally changed the game. You know, two years ago, if you want to integrate with a bunch of stuff, you had to hand code a bunch of integrations. And there were companies like AnyDan and Zapier that just did that. And that was their moat.
Speaker 4:And our secret sauce is that we can dynamically generate the integrations with AI when you need them. So we have a bunch of canned integrations. Some of them we've hand coded and made them really, really nice. But even if you ask for an integration we don't have, the AI can generate one for you. And this is super powerful, not just because it lets you go outside the walled garden, but because it lets you connect to things that not be public at all.
Speaker 4:So if you're a company, a lot of times you have internal APIs and you're like, hey, want have some integration that hooks up to Notion and HubSpot and Gmail, but then also my random bespoke internal API. And you can't do that with any of the products from big tech. You can't do that with Yeah. You know, Claude or or OpenAI. Yeah.
Speaker 4:But our product yeah. Sure. You can integrate, you know, via API with this thing, with MCP, with this thing, with a a pre canned connector with this other thing, and they can all work together.
Speaker 1:Mhmm. What's the state of search these days? I feel like we've seen incredible progress in AI and agents. And then when I have the same frustration that you had when you were thinking about working on email, I'll type in some keyword, you know, like y c. And I will get some cookie, some string that's stuffed in a receipt from some coffee shop, but it has nothing to do with Y Combinator.
Speaker 1:The context isn't there. Apple intelligence rolling out. It takes, like, five days just to index everything into some sort of rag database. Like, why are we falling behind there? Is that a key is is that key to your strategy, or is it something that it's a it's a problem for someone else to work on?
Speaker 4:So I think agents, again, have totally changed the game here. So in shortwave, our email client. Yeah. The way we did search was the vector database approach, right? Embedded all your emails.
Speaker 4:We stuck them in a vector database. We had this interesting search stack and the goal there was to have like the search results be good.
Speaker 1:Yeah.
Speaker 4:And it turns out with, if you have a really smart model and you have an agent, you don't actually care that much if the search results are good as long as you can run lots of searches. So what we found in Tasklet is we don't need to like ingest all your email and index it. We can hook up to the regular APIs and just run a whole bunch of queries in parallel, look at the results, adapt, iterate.
Speaker 1:And just keep refining.
Speaker 4:And so the results are are are almost as good without any infrastructure. So it's a lot cheaper. You can connect to more stuff. So Yep. I think if you find use Tasklet, you can kind of hook it up to anything.
Speaker 4:Yeah. And you'll get surprisingly good search results without any special back end
Speaker 1:support. I imagine that that's sort of slow right now. And for a company like Google to roll that out to a billion users, you know, for free immediately, that's going to be really expensive. So that's still a ways out. They need to actually chop through that.
Speaker 1:But we could expect that search will get faster and better over the next couple of years.
Speaker 4:Yeah. I think I think that is the big drawback. And like as an example
Speaker 1:Yeah.
Speaker 4:For prep for Demo Day, I wanted to make sure that I chatted with the folks that were here that had reached out to me. I've had people reaching out for a period of months. So I took Fable five back when that was still a thing. Sure. And I pointed that at my Gmail and I said, Go find everyone who's who has cold emailed me Mhmm.
Speaker 4:In the last ten months who might be at demo day and like give me a spreadsheet with those folks. And it spent like and and and stack rank them. Right? Like I want to know who should I
Speaker 5:talk to first and
Speaker 4:so on. And it spent like half an hour. It spent like $60 running this thing. Right? But the end of it, I had this spreadsheet of like a 100 plus folks that was like carefully researched and like ordered and like it found every like there was no one I could think of that it that it didn't find in that process.
Speaker 4:So So if you're willing to spend $60, if it's worth it to you, like, great.
Speaker 2:I love it. Are you last question. Are you capital constrained? Like, I'm assuming you have a bunch of offers. Maybe you already finished your fundraise.
Speaker 2:But why even raise? It feels like you guys seem to be making I I would imagine with that kind of revenue ramp, it'd be hard to not be making money right now.
Speaker 4:We we are we are not capital constrained. We actually already closed a $20,000,000 round in April with There you with USB and Lightspeed and some other folks. But they're you know, we're competing directly with Anthropic and OpenAI. They've obviously raised a lot more money and I think we can put it to use. So we are we are raising more money now.
Speaker 4:We're probably a bunch
Speaker 2:of reps. Just I like just saying the actual reality because there's a lot of founders that would come on and be like, well, actually like Yeah. We do something that like, you know, and it's like, no. Everyone is competing all the time and it's better to just accept it and play the game. So
Speaker 4:100%. And I think Corgi set a new bar with, you know, three weeks from from was it series b to c or whatever they did there. So, you know, why wait?
Speaker 2:Three days. Do it in three days.
Speaker 1:Three days. I love it. Awesome. Thank you for coming on.
Speaker 2:Yeah. Great to meet you, Andrew.
Speaker 1:Congratulations. Congrats
Speaker 2:on all
Speaker 1:the We'll talk to you soon.
Speaker 6:Talk to you soon.
Speaker 5:Thanks for having me.
Speaker 1:Have a good one. Cheers. Me tell you all about the New York Stock Exchange. Wanna change the world, raise capital at the New York Stock Exchange. Our next guest will be sitting in that same seat slotting in in just a second.
Speaker 1:We have
Speaker 2:Stamatios will be working
Speaker 1:on Eden
Speaker 2:Robotics. The microphone.
Speaker 1:Oh, yes. Yes. Yes.
Speaker 2:Good Alexander says, I pay for Starlink. It's a great product. Cursor is also a great product. Codex is a great product. And Claude with Fable is ridiculous product.
Speaker 2:That's the main difference between now and 1999. All this stuff is awesome.
Speaker 1:So total white pill, then read the follow-up.
Speaker 2:I don't think you can really compare this to 1999. I think it's actually unprecedented. If AI doesn't work, the global debt bomb explodes, and there's a great depression.
Speaker 1:The
Speaker 2:1999 So did Edson say popping. Things were generally fine.
Speaker 1:Yeah. So it is higher stakes, but it's more impactful. So he's he's I mean, it's a good point to not try and draw too much comparison to 1999 just because it's it's it's technology. It's a technology driven boom. It is very, very different in terms of the the financial structure and also the the impact, the revenues, the rollout, the opportunity.
Speaker 1:All of these things were just in higher stakes territory, I suppose. Anyway, we have our next guest from Eden Robotics in the YC Demo Day stage. How are you doing?
Speaker 7:Welcome to the show. Hey, guys. All good. How about yourselves?
Speaker 1:We're doing great. Thanks. Great to meet you. Much. Introduce yourself and the company.
Speaker 7:Yeah. So I'm Stam, CEO and co founder of Inno Robotics. We're making general purpose robots for manufacturing warehousing initially and everything else right after that.
Speaker 1:How general? Are we going humanoid? Are we going wheels? Are we going
Speaker 2:Semi humanoid. What does that mean? Centaur? Yeah. Centaur.
Speaker 2:So the body, the legs are there's four legs like a Human
Speaker 1:yeah. Semi humanoid. What what does that mean?
Speaker 7:So that means it's a wheel based robot. It has wheels but it has two arms which are placed like a human in our shoulders same way we have and it also doesn't have Dexter's hand. It has grippers.
Speaker 1:Mhmm.
Speaker 7:Which fun fact can do more than 80% of work in industry.
Speaker 1:Interesting. What about the the wheels are important to decide? Like, a lot of manufacturing facilities have very flat floors, so I imagine you don't need really any stair climbing ability, which some wheeled robots can do. But do you need to be omnidirectional? Do you need to change path?
Speaker 1:Is it just about optimizing battery life? Like, what are the trade offs that you decide when you're building the base?
Speaker 7:Yeah. So so when you're building a base really, when you're going with wheeled, it's not going to be as general purpose as legs. Yeah. Like legs could go anywhere. Yeah.
Speaker 7:But it doesn't have to be and you have a massive gain in both cost and energy. Yeah. Legs are extremely expensive in terms of energy Yeah. And also in terms of like simply cost.
Speaker 1:And also, I imagine you can put way more battery pack on top of like the wheel base. Right?
Speaker 8:Yeah.
Speaker 4:That's Half our half
Speaker 7:our base is just the battery. Yeah. So half the base is just the battery and then the other half is the compute. Yeah. And that's
Speaker 1:it. So how how long is there some sort of, like, sweet spot for once you have a robot that can roll around and do work in a manufacturing plant for six hours without needing to recharge? That's the sweet spot. You know how, like, 300 miles of range was like the sweet spot for electric vehicles and under that, you start getting range anxiety?
Speaker 7:Yeah. So I think six hours is too low. Mhmm. Right now, our robot is using a car battery. It can run for twelve hours.
Speaker 7:But with our own
Speaker 1:Not an electric car battery, just like one of those like bricks Yeah. That's a car battery.
Speaker 7:Exactly. One of Wow.
Speaker 9:Just a
Speaker 7:just a really big car battery. Yeah. And with our own car battery design, it can go for twenty hours and optimize charging for like these four hours and Yeah. Not have to like stop for four and work for twenty but like optimize throughout the time to charge enough.
Speaker 1:You got a car battery in there. You're thinking about putting a v eight in there maybe? Why not? Probably not. So one
Speaker 2:of the you know, we've had a bunch of robotics founders on. Mhmm. I've been trying to understand what what some of the kind of like economic challenges there's gonna be to rolling out, you know, humanoid esque robots. When I see some of these humanoid form factors, I'm thinking like, look how many different motors it has, how much wear is each of each of the motors gonna be taking at any at any given point. And then like trying to run the number on the run the numbers on like the what is the cost of the unit?
Speaker 2:What is the depreciation gonna look like over the year? How often are you gonna have to be repairing different components to actually make it competitive with a human which you can hire for let's say 30 to $40,000 a year depending on minimum wage in a, you know, a certain area or type of role. Because like the the, you know, aside from humans being like cool and funny, they also go home after work and they feed themselves and they repair, you know, they they sort of are repairing them, you know, repairing themselves while they're sleeping. Right? So that's like sort of off balance sheet sort of like activity that's happening that ultimately benefits the business because somebody goes home, eats, sleeps, and then they come back to work refreshed, ready to go.
Speaker 7:That's a crazy way to describe human workers. But
Speaker 1:I get it.
Speaker 2:But but but yeah. I'm just like comparing comparing these two things. A robot, it doesn't go home at the end of the day. It might need to be repaired. It might need to be updated.
Speaker 2:And it doesn't happen unless unless the company actually pays for it.
Speaker 7:So the biggest kind of like hardware risk factor is just the actuators. Really nothing else would require maintenance. Everything else would be able to last pretty long time. Right now, we're at this point where you have actuators that are actually good enough to last like three years and last this over usage. It used to be that these actuators would overheat very quickly, and you would be able to run for a very short amount of time.
Speaker 7:And there are some humanoids today. Like, example, unit three robots, they're very famous for overheating very, very quickly. But there are actuators in the market and we are using such actuators that actually can sustain long hours of operation. We're running for example for ten hours during alumni demo day. It didn't there was no hardware issue when it came to the actuators and it it went pretty reliably.
Speaker 7:We expect that these kind of actuators would have a useful life of about three years. And in the case of the maintenance so the our whole thing, by the way, is we're not selling these robots. So we're selling the labor. And in fact, we're not even leasing them on a monthly basis. We're charging per hour.
Speaker 7:So we're charging a $10 per hour, which is actually found that customers love that idea much more than they love the lease idea because they have no mental framework. Right? Mhmm. They have the mental framework of a human worker. Mhmm.
Speaker 7:And so the the maintenance would go is if a customer has a robot somehow breaks, there's a problem with it.
Speaker 2:And sorry.
Speaker 10:Is it is it
Speaker 2:per hour that the robot is actually running?
Speaker 7:Yes. So it's per hour.
Speaker 2:Okay. You're not just saying I'm gonna charge you twenty four hours a day for this period. It's like they're you're they're only paying if they're getting actual
Speaker 1:You're used to paying Yeah. $20 to get across town. You pay Yeah. $20 to get across town.
Speaker 7:Exactly. We do set minimums, obviously, because we need to keep the hardware at the facility. But it's just whatever is enough for us to keep the hardware there. Everything else is adapting based on usage.
Speaker 1:Mhmm. Mhmm. Well, congratulations. Thank you so much for coming.
Speaker 2:Did you did you already get the round done?
Speaker 7:Not yet, but we're very close.
Speaker 1:Good luck.
Speaker 5:Love it.
Speaker 1:Good luck.
Speaker 2:Great to meet you. Come back on soon.
Speaker 1:Have a great one. Thank you.
Speaker 7:Have a good one.
Speaker 1:We'll talk to you While we bring in our next guest, let me tell you about Figma. Agents meet the canvas. Your AI agents can now create and modify your Figma files with design system context.
Speaker 2:Breaking from semaphore. Yes. Netflix lost out to Fox in in pursuit of Roku.
Speaker 1:How is that possible? I mean, yeah, it is interesting the lore there. Netflix sort of created Roku. But the real question is like, why would Netflix want to buy Roku? Like the boxes?
Speaker 1:That just that seems like it makes so much more so much less sense. So in terms of lost out, I can imagine
Speaker 2:They sit as an application Yeah. On on a platform that represents like 40% of connected streaming hours.
Speaker 1:I don't know. I I I'm I'm not surprised they lost out because I would be surprised if Netflix like, net when Netflix was bidding for Warner Brothers, that made a lot more sense to me. More library, more studio production for Netflix to distribute. But finding a second distributor when they're already competing in the ads based model, they're moving towards a cheaper distribution thing. They're already installed by default on most connected TV
Speaker 2:I just think I just think it's a way to it's a way to expand like overall engagement, watch hours. They're already getting into ads. Yeah. Why would they not wanna have like more basically, more watch hours to monitor?
Speaker 1:Maybe. Maybe. Maybe. It seems like way in Roku is in way better hands with Fox than Netflix. So it makes sense why the deal broke that way.
Speaker 1:Anyway, let's bring in our next guest, Hugo Frisk from Tenet Industries. He's the cofounder and CEO. Hugo, how are doing?
Speaker 8:What's going on? I'm doing great over here.
Speaker 1:Yeah. Thank you so much for taking the time. Introduce yourself and the company. How are doing?
Speaker 8:Yeah. So I'm Hugo. I'm cofounder of Tenet Industries. Mhmm. And we're focusing on mass producibility and low cost for the defense system, basically commoditizing it.
Speaker 8:Mhmm. So I'm from the electronics manufacturing industry. Mhmm. And my cofounder we're three cofounders, but the one of them is from the automotive industry. Mhmm.
Speaker 8:So basically taking this, like, mass producibility, those concepts Mhmm. And bringing them to the defense industry.
Speaker 1:How low cost how low cost do you wanna go? I mean, we're all familiar with, like, the couple $100 price point for a DJI product. Where do you wanna sit?
Speaker 8:Yeah. That's about it. It depends on the customer really. But, yeah, we want to match. Shipper than China is our slogan.
Speaker 1:Okay. Then and then how how are you thinking about the actual product? We've been hearing a lot about the fiber optic controlled drones that don't need to deal with wireless jamming or anything like that? Like where is the demand for the next generation product? Or is it just what we know from a DJI quadrotor, what we saw there?
Speaker 1:Are there any specific demands for the defense context that make it a little bit different than what's already out there?
Speaker 8:Yeah. There's the the main factor is the range, basically. Mhmm. It's it's range and the lift power. How much can you lift?
Speaker 8:What's the payload weight? So it's all about increasing the range. And the main limiting factor for the range is oftentimes the radio. Right? Mhmm.
Speaker 8:So what you want, that's why they're using like this fiber radios or these fiber optic cables because then you get longer range without getting jammed. But unfortunately, I think the fiber market, it's kind of only relevant for this bubble in time because to increase the range, which is the main like, what customers want, they want you can do either a better radio, basically. You can develop better radios.
Speaker 1:Yeah.
Speaker 8:And that's maybe maybe the first step. The next step is doing autonomy. Right? Mhmm. If you have autonomy, then why do you need any contact at all?
Speaker 1:Sure. Yeah. Everything. How how are you capable or do you think it's gonna be possible to do on device autonomy on a drone that size, two kilograms, that's not enough to run some serious GPU. But what what is possible these days?
Speaker 8:No. Exactly. You can put an immediate Jetson on it. But the immediate Jetson, it's like five times as expensive as the drone itself.
Speaker 3:Sure.
Speaker 8:So then it's not really a one time use kind of deal. Yeah. So but there are these embedded chips Okay. For for AI. It's just you can't run an LLM model on it.
Speaker 8:You can do some visual recognition, and maybe you can do some, like, prioritization of different targets. But the main main factor here about the autonomy is is not really the the vision model. That's that's like a solved problem. This is possible. The main problem there is is navigation.
Speaker 8:How do you get to the the near vicinity to your target? How do you arrive in like, navigating for 20 kilometers without the GPS? Because you can't use a GPS on the front line. It's not possible. It's jammed out.
Speaker 8:It's super easy to jam out GPS and to spoof it. They will say that you're in in China or something while you're in Ukraine or you're in Sweden or wherever. So that's the main problem. How do you navigate without the GPS? Because the the last mile, which is basically targeting, that's a solved problem that was solved in the sixties with missiles.
Speaker 8:I don't get the companies that are pitching that.
Speaker 1:What's I'm sorry.
Speaker 2:What is your what is your business model going to look like? Or what what does it look like today? You're trying to commoditize the category, push push pricing down as much as possible. But what are your margins going to look like? And how do you expect to structure deals with different buyers?
Speaker 8:So right now, kind of this pipeline. How do you scale a defense company? Because it's not really possible to get this as a new startup as deal straight to the state, at least not where we're looking in Europe. But so what you want to do is you start with the private companies, you sell to them. So we're selling to this counter US companies.
Speaker 8:This month, we went from five orders to three fifty orders. And then you start selling to this subprime, it's called, like basically you're selling to a company that's selling directly to the government. Mhmm. And those are really interesting because they have already the channels to sell to these governments. And then once you have established like your manufacturing line and your capability and people trust you, then you can sell directly to the governments.
Speaker 2:Chat asked Yep. How does how does their drone survive high power microwave machines like Leonidas? Is the answer that it doesn't but you can produce at such scale that you can kind of Or they're just these high powered microwave machines rolled
Speaker 1:out everywhere. But what what what is your take on microwave as a counter UAS force right now?
Speaker 8:I think microwave is like, we've tested with these people having shotguns and shooting down our drones with shotguns like radar controlled shotguns basically. Oh. And it's a short range system. It only reaches that system only reaches a 100 meters. I don't know about this this microwave.
Speaker 8:How how long is the reach that there, but I would guess it's pretty small. Yeah. So then you need a lot of these systems, and people don't have that. They don't have these systems every 100 meters.
Speaker 1:Yeah. Yeah. Yeah. Not every military installation or unit is going to have every possible counter UAS, so it's sort of a game of rock paper scissors on the battlefield these days. Makes sense.
Speaker 1:And then
Speaker 8:the other thing is, like you said, like, just send more.
Speaker 2:Yeah. Yeah. That's that's what I that's what I was saying. It's like you have, you know, your five exquisite systems. Well, we're gonna, you know, out produce.
Speaker 1:Yeah. Is everything hand built right now? Are you already working on automation? I imagine that low cost manufacturability means more on supply chain and design, but what does the actual rollout look like over time?
Speaker 8:Yep. So when we started this, we were we wanted to produce with robots, still do. But basically, what we our our background is this manufacturing background. So we're really good at designing for manufacturing Mhmm. Designing it so it's it's really easy to assemble.
Speaker 8:So we designed it. So how would it be easy for a robot to build this? Mhmm. Well, then it needs a few parts and it needs a few screws and no soldering and it needs to be assembled all from one side. Mhmm.
Speaker 8:So that was the starting. And then it turns out once you do that, it's very, easy to assemble. So it takes two minutes for a human to assemble it.
Speaker 1:Wow.
Speaker 8:So then why do you need a robot?
Speaker 1:Good. Well, batch mate will have to make a pitch for you.
Speaker 2:How's investor interest so far? You've been busy the last couple weeks or are you starting a process now?
Speaker 8:Yeah. Yeah. Super busy. It's actually my co founder, Emil, who's is doing that. Mhmm.
Speaker 8:So he's always on call and I'm doing customer demos and stuff. Yeah.
Speaker 1:Very cool. Awesome. Well, congratulations.
Speaker 2:Great to meet you, Hugo.
Speaker 1:Thank you so much for taking the time to come on the show.
Speaker 2:Congrats on all the progress.
Speaker 1:We'll talk to you soon.
Speaker 8:Yeah. No problem. Cheers.
Speaker 1:Bye bye.
Speaker 2:Ryan Peterson says with yesterday's 20% SpaceX pop, Elon made more money than Warren Buffett made in his entire career.
Speaker 1:These headlines are going to get crazy because I I mean, I I see some of them getting community noted, but it's like a single day will move more than like all of Bill Gates' currents net worth, that type of thing. Those headlines are gonna pop off consistently. The crazy one is like it's there's going to be down days. Like, there's going to be just
Speaker 2:random Elon lost more money today than any person
Speaker 1:in the industry combined. He lost more money than Brazil makes in a trillion years, you know, and because, like, whenever the big numbers get contextualized, it's always very entertaining. It was up another 14% after hours, though. But the numbers are staggering when you're in the $1,000,000,000,000 club.
Speaker 2:JB says, is this everyone's first IPO? It's silly now as it approaches Amazon valuation. Well, we passed that. But the float is low until the lock of a nearly every retail investor on earth wants to be involved. You're gonna get stupid moves.
Speaker 2:Then the float opens up and all the retail people are stuck for years.
Speaker 1:What does that mean?
Speaker 2:Just say good time. Just say you haven't seen the mass driver demo, buddy.
Speaker 1:Or or the next data center. I mean, that's the really interesting thing with Cursor. There's all this debate over like, have a deal with Anthropic. They have a deal with Google. Cursor obviously wants to compute.
Speaker 1:But talking to Gavin Baker, it sounds like there might be a lot more terrestrial compute coming online in the very short term, and that is valuable. They're monetizing this very effectively. And so you could see a short term revenue ramp just driven from sort of the boring neo cloud stuff that monetizes really well. And then that provides you know, it's like the model three. It's it's it's gonna be the economic engine that provides the capital for data centers in space, mass driver on the moon, all that stuff needs fuel for the fire.
Speaker 1:Anyway
Speaker 2:Ad Ludlow has some data. SpaceX, the current approximate price to sales is 150
Speaker 10:Mhmm.
Speaker 2:X. Amazon is 3.6. Microsoft, 9.2.
Speaker 1:See, people read this as a bear SpaceX take, but imagine if Amazon started trading at SpaceX's price of sales.
Speaker 2:Yeah.
Speaker 1:Be probably be like a $100,000,000,000,000 company. Anyway, our next guest might be building the next $100,000,000,000,000 company. We have Payton Case from dispatch here, building reentry vehicles. We're returning space manufactured payloads in semiconductor biotech and pharma. Welcome to the show, Payton.
Speaker 1:How are you doing? Oh, wait. Sorry. Do I have the wrong person?
Speaker 5:Wrong. I think that was
Speaker 1:a mix up of this. Oh, we switched around. Efraen Torres. Efraen. Thank you.
Speaker 1:Please introduce yourself for us so we get it correct.
Speaker 5:Yeah. So, hi. My name is Efraen Torres. We're from body mobile MRIs for cancer screening.
Speaker 1:Amazing. There we go. Are there any downsides to constantly getting MRIs?
Speaker 5:No. So MRI is non cancer causing radiation.
Speaker 1:Okay.
Speaker 5:CT and x-ray, there's limitations.
Speaker 1:Got
Speaker 5:it. But MRI, I mean, I I've scanned myself thousands of times.
Speaker 1:So Are you the
Speaker 2:most scanned person in history?
Speaker 5:No. My professor takes that one. He he's he likes to tell he's the most scanned and published brain in the in the history of Mankind.
Speaker 1:Five times a day or something?
Speaker 5:Yeah. That's how you get it. Yeah.
Speaker 1:How how mobile are we talking? Are we talking mobile like, it can be in a truck that comes to the town and you go, like, getting your body fat measured in a water tank? Or are we talking, like, Fitbit? I clip it to my my waistband, and I'm constantly getting MRI.
Speaker 5:Yeah. No. We're talking trailer. So we bought, like, a Ford three fifty, shows up outside of a clinic.
Speaker 2:Just give it a
Speaker 1:I like the Ford three fifty.
Speaker 5:There you go. Right? We we actually calculated it just for that. Yeah. Okay.
Speaker 5:This whole body screen
Speaker 1:Yeah.
Speaker 5:$250, and there you go.
Speaker 1:$2.50. Okay. Okay. So what So what And I'm getting a little feedback here right now. Can we deal with that?
Speaker 1:Thank you. So yeah. Sorry.
Speaker 2:What does a normal MRI cost?
Speaker 5:Yeah. I mean, Pernuvo, if you look at their pricing, they're $2,500. Mhmm. And it can go up to $3,500. We're around 10 times cheaper
Speaker 1:10 times cheaper.
Speaker 5:Than everything on the market.
Speaker 2:And what is driving that?
Speaker 5:Yeah. So there's two things. The first thing is our technology. Like, our system is 80% lighter Mhmm. Consumes 60% less power.
Speaker 5:It's actually eight times quieter too. Mhmm. And all of this lets us have the operational gains. So we don't sell the systems, we sell scans. So it makes our internal operation costs really low.
Speaker 5:Interesting. And the shelf life of these systems are ten to twelve years. So we can charge $2.50 a scan and actually our gross margin actually ends up being 55% because of how long these systems last.
Speaker 1:Do you have to go through medical device approval with the FDA?
Speaker 5:Yeah. No. We're we're going through medical device approval next year as a class two five ten k.
Speaker 11:Got it.
Speaker 5:It's a fairly straightforward path because of the fact that there's a lot of regulatory precedents.
Speaker 1:Yeah.
Speaker 5:Where there's the regulatory risk arises when you're like the first MRI Yeah. First therapeutic and things like that.
Speaker 1:Well then, what about Okay.
Speaker 2:So what's the backstory on the on the company and the IP? Did you cook this up with your professor? Is he is he involved with business? What's what's the history?
Speaker 5:Yeah. No. Not the professor. He's not involved. So me me and my co founder, we've known each other ten years, went to grad school together, specifically to spin out a startup MRI is the industry, if you think about it.
Speaker 5:And so we developed an IP in grad school, got that patent issued, Adelante has exclusive rights to it. And yes, it's been it's been cooking for a good bit here. But MRI is a hard problem to solve and that's why it's it's taken us yeah. Doing well.
Speaker 2:So Very cool.
Speaker 1:You're so you're going through FDA approval. Can you actually sell the product at in some advanced form yet, or is it just, like, demonstration for medical for, like, research purposes at this point?
Speaker 5:Yeah. So I love this question because it's got to one of the the creativity of of our company. We are deploying this year based of traditional MRIs. Oh. The traditional MRIs, we're gonna put them in semi trucks and it's all FDA cleared.
Speaker 1:Okay.
Speaker 5:We can go to our customers. We have 11 LOIs already, 19,750,000
Speaker 1:Mhmm.
Speaker 5:And start building that distribution channel now.
Speaker 1:Yeah.
Speaker 5:And over the next year, right, we're gonna get five to 10 of these trailers out there
Speaker 1:Yep.
Speaker 5:All breaking even. But then come q one twenty twenty eight when our product is cleared, you just switch it and it's like a lever to profitability.
Speaker 1:That's amazing. Wow. Congratulations. You're
Speaker 5:Thank you.
Speaker 1:How's the fundraising been going?
Speaker 5:It's been going well. Have we only have a small amount of allocation left of our non leads and having a lot of exciting conversations with potential leads.
Speaker 1:Are you more are you seeing more interest from investors who have invested in health tech, medical tech, FDA approved devices, that crowd? Because or or or are there tech investors who are sort of exhausted with the AI stuff and wanna broaden their horizons?
Speaker 5:Yeah. Honestly, we're getting a lot of interest from deep tech, generalists, and just tech. Yeah. Because MRI is very well known in this space. You have Purnubo.
Speaker 1:Yeah.
Speaker 5:Everyone has a story of someone that didn't get an MRI in time. Mhmm. Whether it be from like a sports injury to something more severe like the cancer wasn't caught in time. Mhmm. And so we're we've had interest from deep tech Cool.
Speaker 5:Tech investors, generalists, health tech as well.
Speaker 2:Well, congrats Where's the name from? I gotta know.
Speaker 5:Yeah. So so call credit goes to my wife. So Adeelante stands for a couple of things. Our scientific approaches are known as radio frequency adiabatic pulses.
Speaker 1:Mhmm.
Speaker 5:And my my my parents saying is which in Spanish is keep going forward. Also tattooed on my forearm here.
Speaker 2:There we go.
Speaker 5:And so Adeelante is very close to Adelante, which means go forward in Spanish, and it kind of goes that no matter what happens to us, we're just gonna keep on making progress every single day.
Speaker 1:Very cool. Thank you so much for coming on the show.
Speaker 2:Logo. Logo. Logo. Piece.
Speaker 9:I'll
Speaker 1:speak soon. Yeah. Talk soon. Have a good one.
Speaker 5:Likewise. Yeah.
Speaker 1:Up next, we have a good buddy of mine, Russell Smith from nine mothers. He's back in y C. I went through Y C with him in summer of twenty twelve, fourteen years ago. Overnight success. There
Speaker 2:we go.
Speaker 1:But I'm excited to catch up with Russell Smith, introduce him to everyone.
Speaker 2:Tyler was was what? One or two?
Speaker 1:He was probably
Speaker 2:He was seven years old or something. Just a boy.
Speaker 1:Years old. Yeah. Just a boy. But he's working on AI mission systems for
Speaker 3:Can we get
Speaker 2:Tyler in here?
Speaker 1:Focus on counter drone protection. Yeah. Yeah. In between the next steps, let's slot in some Tyler for sure. Anyway, we have Russ Smith from Nine Mothers in the TBPN UltraDome in at YC Demo Day.
Speaker 1:How are doing, Russ? Hey.
Speaker 3:Good to see you. It's been a long time.
Speaker 1:Been way too long. Thank you so much for taking the time. I'm glad we can make this happen. For those who don't know you, introduce yourself. Give us a little bit of the the YC history, the entrepreneurial backstory, how long you've been an entrepreneur, and then take us through the current company.
Speaker 3:Yeah. I mean, I was an entrepreneur before I did YC. So like in in The UK. Yeah. But got into YC in the same batch as you.
Speaker 3:Yeah. That's how we met in summer twelve. Yeah. The batch that basically broke YC at the time and made them rechange it.
Speaker 1:70 companies looks 30. Yeah. Yeah. You can can tell it.
Speaker 3:Yeah. It scaled and then they decided to change how it worked and it's the genesis of how they do groups now. Right? It was basically a free for all at the time where the loudest companies or the most like intense ones would get the most well, deliberately the most attention, but would would
Speaker 7:Yeah.
Speaker 2:It's sort of natural.
Speaker 1:Yeah.
Speaker 3:Yeah. Get the most love.
Speaker 1:Right? It's funny because it was the YC batch that broke YC. Everyone said, oh, YC's over. It's it's, you know, it's gotten too big. It's and then it was like Coinbase, Airbnb, or Coinbase, Instacart, Zapier, couple other companies that came became huge.
Speaker 1:Clever. Clever. Yeah.
Speaker 3:Benchling. Benchling. Benchling.
Speaker 1:There were a bunch of great companies.
Speaker 3:Bunch of decacorns and unicorns
Speaker 1:in that batch. Was good.
Speaker 3:So And soy one as well. Right? Yeah. Yeah. As in I remember going to your going to your Tenderloin office and carrying bags of your early product out in little bags.
Speaker 1:1,500 a month for three people live in San Francisco.
Speaker 2:Oh, it's hard to remember. Remember that. It was guys a bargain. Didn't you move in there when you had like $818 or something?
Speaker 1:Yeah. I think we had like $20 left in the bank.
Speaker 2:And you're like, good. It's the last us like eighteen months.
Speaker 1:Yeah. Yeah. Yeah. We paid our rent a year in advance, owned our laptops. We just had to pay internet and food and that was it.
Speaker 1:It was pretty
Speaker 3:And then that's where Soylent came from. Right?
Speaker 1:Yeah. It's
Speaker 3:like Just eat that. It's cheaper.
Speaker 1:Anyway, we're not here to reminisce about the old times. Tell us about Nine Mothers.
Speaker 3:Yeah. So we make AI mission systems for the DOD, and our first product is Counter Drone. Okay. And we make a very small robot. So it's 35 pounds.
Speaker 3:We sell it for about a 150 k.
Speaker 7:Okay.
Speaker 3:And it's capable of defeating multiple fast moving drones day or night.
Speaker 1:Kinetically?
Speaker 3:Kinetically defeat. So yeah. It's basically a gun on a robot. Okay. And then we build all of the models for day, night, builds acoustic sensors, build models for that, and then basically capable of shooting down small fast targets.
Speaker 1:Interesting. Is it Can we pull up
Speaker 2:the video? Because I have no idea what this robot looks like.
Speaker 1:Yeah. Let's pull up the video. You know, put it
Speaker 3:with you. Narrate it. I have it.
Speaker 1:Oh, yeah. Yeah. We'll we'll we'll have the team pull up the video. I'm curious about the decision around acoustic models versus video models. There's so much energy around We do
Speaker 3:all of it.
Speaker 1:You do
Speaker 3:all And of so like the the key here is that no sensor is perfect. Right? Yeah. And so multiple sensors gives you more chance of Yeah. Finding something.
Speaker 3:And then for instance, acoustics is bad on some of the projects we're doing that are around turbines
Speaker 1:Yeah.
Speaker 3:Right? On Chinooks or other vehicles because it gets drowned out. But then radar is bad in some environments, and vision is bad in some. So the fusion, the ability to fuse all that together into coherent picture and also adapt to new sensors means that we can stop more things.
Speaker 1:Right? Yeah.
Speaker 3:And the key here is that this is kind of like the same problem that you saw in Iraq with or Afghanistan with IEDs. These are just now flying IEDs and all the demos you've seen, existingly, almost all of slow moving targets. So like sub 10 meter a second, sub 10 mile an hour, in some cases drones, people are struggling to shoot down. Mhmm. And that's just not reality.
Speaker 3:Right? As in we we've been shooting and demoing, as in we we shoot faster internally, but demoing 65 mile an hour small drones repeatedly. Like and that's way closer to reality, if that makes sense.
Speaker 1:Where does the name come from?
Speaker 3:Dude, it's it's North Norse mythology. Oh. So we're we're nerds and then our our product names are all around the same mythology. Okay. I like it.
Speaker 3:And so naming's hard but, yeah. That's that's where it came from. That's the story.
Speaker 1:That's good. What what does it actually shoot? Is it shooting like five five six like some commodity round?
Speaker 3:We can adapt to anything. As in we can do five five six. But the the thing that works the best is 12 gauge. And so we make our own we use a gun off the shelf at the moment. Mhmm.
Speaker 3:We're also developing our own belt fed shotgun system, like, as in the world's first belt fed. And that will be first firing in the next three weeks. Yeah. We also make ammo. Right?
Speaker 1:You make ammo?
Speaker 3:Yeah. That it's basically closer to match grade, which is like tighter tolerances Sure. And then slightly higher pressure. Oh. But owning everything, like the full stack, that means it means we have better results as a
Speaker 1:short version. So where races
Speaker 3:and blades for defense. Right?
Speaker 1:I mean I mean, you're you're obviously a very experienced founder. Where's the company right now? Do you already have facilities set up, a staff hired? Like, I imagine that you're pretty far along.
Speaker 3:For YC, we're a little later on.
Speaker 1:Yeah. So
Speaker 3:we are we've sold like $1,600,000 of stuff to the DOD as in direct sales of units, not not research and dev stuff Sure. Like actual sales. Delivered units to DOD, and then we're expecting to sell over a 100 units this year and a thousand next year. Have multiple believable parts to both. But, yeah.
Speaker 3:Aim is to do over a 100 mill of rev next year, and it's looking completely believable. Should hit 50 this year.
Speaker 2:There we go. Super impressive. Question for you. How let's say let's say there's a frontline Mhmm. And you set up a you know, I imagine, you know, let's say US Military sets up a bunch of these drones are flying over.
Speaker 2:How do you manage friend like It's a friendly fire. Like let's say a drone passes the line, there's actual troops back here and you wanna take out the drone but you're effectively shooting rounds into the air.
Speaker 3:Great question. And the the it's a complicated answer. And it depends on the mode the system's in. We can ignore stuff that's flying away from us and only prioritize stuff that's coming towards us. We can also take signals off networks they have if they know which drones are theirs.
Speaker 3:Really, the the common thing is that they don't actually have that kind of data. And so the operator can choose to not run it full automatic and then choose which targets. But mostly they will shoot them because of blue on blue risk. If it's not drones, they are physically flying in the same group.
Speaker 1:Mhmm.
Speaker 3:Right? It's that's the problem is is it a friendly drone that's misidentified you or not? If it's on a network and we know it's not, has it still misidentified you? That's where you get into the problem of this at this kind of range. Right?
Speaker 9:Mhmm.
Speaker 1:Well, congratulations on the progress. Exciting growth. Great to
Speaker 3:catch Congrats to you on the Come back on
Speaker 1:our show, and we'll talk more soon. Have a great one.
Speaker 6:Yeah. See you. Great to catch up.
Speaker 1:See you soon. Goodbye. Let me tell you about CrowdStrike. Your business is AI. Their business is securing it.
Speaker 1:CrowdStrike secures AI and stops breaches. Our next guest is Payton Akshay from dispatch. I accidentally introduced him a little bit too soon, but we got him sitting down in the YC demo day. What's going
Speaker 2:on, mate?
Speaker 1:How you doing?
Speaker 12:Yeah. It's good to be here. Good to see you guys.
Speaker 1:Good to see you too. Introduce yourself. Introduce the company. Us what you're building.
Speaker 12:So I'm Payton. I'm the founder of Dispatch Space. We build satellites for manufacturing products in space. Mhmm. And these are for the most advanced materials in the world that can only be made in microgravity, and we bring them back down to earth.
Speaker 1:What specifically are you building? Because they're like, the space economy has gotten so fractured at this point. There's, you know, multiple launch providers. There's satellite bus providers. There's impulse space.
Speaker 1:Tom Mueller has a extra propulsion system that you can bolt on. Like, what is the key product that you're focused on for this early stage of the company?
Speaker 12:Yeah. We build the reentry vehicles. So this is the satellite is in space. You've made your product and now you need to get back down to
Speaker 3:earth. Mhmm.
Speaker 12:You're flying at Mach 25. You're surrounded by a plasma that's 3,000 degrees. Mhmm. We build the heat shields and satellites that can survive that environment.
Speaker 1:Mhmm. Who is doing stuff in space? Like, I live in the world of Varda very closely. Yeah.
Speaker 2:Yeah. Seems like elephant in the room is that we are we are very familiar with Delian because Delian's our friend.
Speaker 1:And and it seems like obviously they're going vertically integrated building the reentry vehicle and also doing the contracts with biotech companies and pharmaceutical companies. But it does seem like the industry is expanding. So who are the other buyers that aren't working with Varda that you have an opportunity to to work with?
Speaker 12:Yeah. The biggest players are semiconductors, pharmaceutical, and biotech. Varda is very vertical
Speaker 1:Yeah.
Speaker 12:In that pharmaceutical application.
Speaker 1:Mhmm.
Speaker 12:We're big we're the biggest bulls on the semiconductor space. Think that the regulatory environment makes it so that you you can come to market a lot faster and the applications of growing those gallium nitride and indium selenide crystals in space are massive. And that's where that's where we're bullish on it.
Speaker 1:Massive. I'm I'm down. Semi everything that touches semiconductors is massive. You say semiconductor, you're a trillion dollar company. But timelines, the timelines, like, it it it feels like we're a decade away from making a chip in space, making a chip on the moon.
Speaker 1:Like, even
Speaker 2:Yeah. But
Speaker 1:even the big SpaceX bulls are saying, like, okay. Actually, doing the mass driver, that's maybe more than ten years away. Let's focus on the
Speaker 2:stuff. Like, what traction are you talking about this demo day? Yeah. Yeah. Yeah.
Speaker 2:So
Speaker 12:we have a pilot mission that we're flying with a paying customer to grow semiconductor crystals in space.
Speaker 1:Oh, okay.
Speaker 12:And we're not talking about doing like the lithography or assembly of iPhones in space. It's about it's earlier in the supply chain. So wafers Wafers. Wafers actually come from these cylindrical crystals.
Speaker 1:Oh.
Speaker 12:And when you grow those in microgravity, you get up to a thousand times fewer defects. So you grow those crystals in space Okay. Bring them back down to earth, and then you cut them into wafers. And that is actually happening now on the ISS. These companies are looking to scale.
Speaker 12:Okay. They just don't have the vehicles to do it.
Speaker 1:Oh, very cool.
Speaker 2:How did you make your first dollar?
Speaker 12:The first dollar was deposit on the pilot program.
Speaker 2:No. No. No. In life. In life.
Speaker 2:I want I want the I want the founder origin.
Speaker 12:Oh, yeah. It was probably working in a smoothie shop that I totally loved the smoothies of, wink wink. I I was, you know, I made a few tips and that was that was about it.
Speaker 2:You realized you weren't cut out for smoothie business.
Speaker 1:Gotta go in the semis.
Speaker 2:It's meant to go to the heavens.
Speaker 12:Yeah. Yeah. Fab fab fabs in space are a little easier than getting tips at a smoothie shop for me.
Speaker 1:That's amazing. What's the state of the the space investors that have attended demo day? Are you seeing traction? How's the fundraise going?
Speaker 12:Yeah. The fundraising is going great. Obviously, IPOs are very useful for us. Oh, sure. So that's been great indicator of where the entire market is going.
Speaker 12:We're getting close to closing out that round, which is super exciting for us. And, like, really, that goal is getting back to work as quickly as possible and using that money to go build great things in space.
Speaker 1:That's fantastic.
Speaker 2:Dan in the chat said, from smoothies to a smooth opera.
Speaker 1:I like that. Well, thank you so much. Great
Speaker 2:to meet you, Payton.
Speaker 1:Coming up soon.
Speaker 2:Congrats on all the progress.
Speaker 1:Have a great one.
Speaker 12:Thanks so much.
Speaker 1:We'll talk to you soon. Cheers. Goodbye. Our next guest is Akshay from Madrone, building cooling systems for data centers.
Speaker 2:He is working working on
Speaker 1:and what?
Speaker 2:I'm assuming he's working on reducing water consumption in data centers so that almonds can
Speaker 1:Oh, yeah. Water. Yeah. Yeah. This guy's an almond industry plant for sure.
Speaker 1:Anyway, let me tell you about Railway first. Railway is the all in one intelligent cloud provider. Use your favorite agent to deploy web app servers, databases, and more while Railway automatically takes care of scaling, monitoring, and security. Thank you, Jordy. Let's bring in Akshay from Madrone.
Speaker 1:How are you doing? Welcome to the show. Thank you for taking the time.
Speaker 6:What's up? Hey, guys. Huge fans, so appreciate the opportunity to talk to you guys.
Speaker 1:Fantastic. Great to have you on the show. Introduce yourself. Introduce the company. I have tons of questions, but let's start with the basics.
Speaker 6:Sounds good. So I'm I'm building my drone. We're building hyper efficient cooling for data centers. Mhmm. So specifically, we've engineered a thermodynamic process that works really well in hot and dry climates, which is where most hyperscaling is happening right now.
Speaker 9:Okay.
Speaker 6:And, yeah, it's we have our demo that's running live at demo day today, so we're actually really excited to show people in person. But the big problem really is that data centers are limited today by power and not by chips or land. So cooling and power are two sides of the same coin. If you can save power on cooling, that's more power for your flops, and that's where our real value unlock is. So people can install more GPUs given the same grid permit, which takes years to get.
Speaker 6:To give you a sense of the scale of the problem, last year in Texas, Semi Analysis said that there were a 150 gigawatts worth of load request to the Texas grid. Texas grid on a good day is 60 gigawatts and only 1.5 gigawatts worth of those requests were actually approved by the local utilities. So it's a crazy scrambling time. Like, Elon Musk was probably the first person to kinda come up with a method of putting engines on the back of trucks, rolling them onto data centers for power. You know, Boom Supersonic, whose ultimate goal is to be building jet planes, has had a slight pivot to selling supersonic jet engines, and apparently, they're crushing it.
Speaker 6:So it's it's a crazy time, and it's a it's the first time in a long time where a new company come could come into the market and and build a thermal industrial company.
Speaker 2:So what is the bottleneck for for you? Is it figuring out where your system, you know, what data centers your system can fit in? Is it actually just how you have the demand and you're trying to meet it? Like, what does your supply chain look like? Like, what's standing between you and let's say, not this round right now, but, you know, the next Yeah.
Speaker 6:It's a great question. So we actually scaled our one kilowatt prototype a 100 times during the batch to a 100 kilowatt prototype. We're gonna be deploying our one megawatt version very, very soon. Mhmm. The 100 kilowatt prototype that's actually running live at Demo Day right now is gonna be running our first pilot in two months.
Speaker 6:Mhmm. So really, it's gonna be between the 100 kilowatt and the one megawatt prototype, it's gonna be figuring out how to elongate it and make it taller. So we've done the really hard work so far, but really it's just building a physical big version of it so that we've talked to hyperscalers, their feedback because they just want a bigger version so they can because they have such a huge demand. They're not really interested in a 100 kilowatts. They're interested in a 100 meg one megawatts.
Speaker 1:Yeah. And
Speaker 2:Okay. So one megawatt will be enough to get your first real, you know, orders, revenues with hyperscaler type customers.
Speaker 1:Yeah. All the data center campers campuses would say, I'll take 10,000, please, because I'm building 10 gigawatts. I mean, basically, you chain them together. Right? But this is I mean, we saw in the video, it looks like a shipping container.
Speaker 1:And essentially, the the input output the output is just cold water. It takes in water. So you are agnostic to the design of what happens in the data center, I imagine. You're not you're not dependent on any particular chip or rack design. Yeah.
Speaker 1:But then what energy is actually going into your system?
Speaker 6:Yes. Exactly. It's a great question. So are the energy is used to be the fans and the pumps. So actually circulating the fluids through the system.
Speaker 6:If I may brag about my cofounder a bit, we don't just design the the physical box. We actually he actually designed the thermodynamics, the mechanical structure, the electronics to power it all, and then also the software to control it. We do this all in house. We're big Tesla fanboys. All our competitors are outsourcing every single level of this engineering out, and they're just integrating that and selling that as a product.
Speaker 6:So been able to get a lot of efficiency gains by just designing this all in house with two people so far. Mhmm. We're fundraising, and we're gonna hire some more people, hire our friends in the Bay Area and building the one megawatt one with our own hands.
Speaker 1:Fantastic. Amazing. And so there there there's already a lot of energy on these campuses that you can draw from. So whether it's natural gas powered, powered from the grid, powered from nuclear or solar, whatever's going on, you're drawing from that. But your goal is to just draw more efficiently and take less of the power so that can probably just go into the chips.
Speaker 1:Right?
Speaker 6:Exactly. Yeah. You get a lot more inference value out of redirecting that power to your flops.
Speaker 1:Okay. And then in terms of how you're pitching yourself at at Demo Day, are you on the path to LOIs with hyperscalers? Are you working backwards from or are you doing business with neo clouds? Like, what's the walk crawl run to actually create the economic flywheel to raise money and then go build this thing?
Speaker 6:Yeah. Great question. So we've already started conversations with two hyperscalers. We're actually talking to a third one this week after demo day, which I'm super excited about. Let's go.
Speaker 6:One of our investors actually, we closed the check today. They're actually building $20,000,000,000 worth of data centers in Texas. So that's been really nice. The really first yeah. Fantastic.
Speaker 6:The first thing for us is really gonna be focusing on that pilot, just demonstrating that we can plug into an AI data center at scale, do it reliable reliably, and at scale with our investor that we just partnered with today.
Speaker 1:Yeah. And then what type of efficiency number actually
Speaker 8:Yeah.
Speaker 1:Draws the attention of a potential buyer? Are we is 1% enough? Is it 10%? Is it 50%? Like, what what what's reasonable?
Speaker 1:Because I imagine we come we're 99% more efficient. Everyone's like, yeah, that's not real. But is is one per are we doing basis points here? Like, how Yeah. How how much of an impact do you need to have to actually move the needle?
Speaker 1:Because some of these projects are so big, their bill for electricity might be, you know, hundreds of millions of dollars.
Speaker 6:Yeah. Exactly. Like, guys, it's so crazy. My competitors are 100 year old companies that have been designing the same thing for decades.
Speaker 2:There's this
Speaker 6:thing called the mechanical chiller. Yeah. It's literally the same thing as your refrigerator at home and it costs $500,000,000 per gigawatt. So people are really desperate to get away from these chillers and look for different types of cooling Mhmm. Because that's actually eating up your grid permit.
Speaker 6:So that's a thing that actually costs 30% of your grid permit. And we can do it for cheaper and we can actually have better OpEx as well. Mhmm. So really any percentage is okay. I think that like, you you can't quote, like, 0.1% gain, but, like, you know, people are thrilled if you have a 10% efficiency gain.
Speaker 1:And then also, we're just in a supply crunch. So even if you just said, hey. We're we have the exact same thing, but it actually will ship in the next couple months, a lot of people might jump at that. So that's the benefit of being in the problem
Speaker 2:What what were you doing before this?
Speaker 6:Yeah. So I was actually scaling manufacturing at QuantumScape. I was doing computer vision, working directly under the CTO, Tim Home. I was founder CTO, took it all the way from inception to IPO. And I also did grad school at Berkeley studying material science.
Speaker 6:There's a material source of this company I we didn't get to talk about today, but we're we're doing something cool.
Speaker 1:Very cool. Very cool. Well, thank you so much.
Speaker 2:After you raised, and it was great to meet you.
Speaker 1:Yeah. Fantastic. Thanks, guys. We'll talk soon. To We're gonna bring on some YC partners in about four minutes.
Speaker 1:Stay tuned. In the meantime, we can go back to the timeline back
Speaker 2:to the news.
Speaker 1:Talk about specs. This is from Evan Yes.
Speaker 2:And the government reporting was SNAP specs are official. Mhmm. February all in one AR glasses that Evan Spiegel has dubbed the next computer.
Speaker 1:$2,200. That's almost Apple Vision Pro numbers. That's expensive. It's gonna be a lift. I feel like it's a lot.
Speaker 1:It it it seem it seems like a lot of money. It's gotta be Pro
Speaker 2:starts at $3,499. Yeah. So a bit of a jump. But but this is a product that seemingly is trying to compete in the realm of like a it's a it's a mobile device. It's naturally a mobile device.
Speaker 2:Yeah. Unlike the Apple Vision Pro which obviously, some viral images on launch of people walking around with it.
Speaker 1:I'm just thinking about like like there are a lot of Apple fanboys who buy every
Speaker 2:Get this. What? Get this guy on right now. What? Pull him up.
Speaker 1:Hey. What do you Hey. Are you buying the Snap specs $2,200 are you spending your paycheck on that?
Speaker 2:I mean, they they I think they actually do look really cool. Yeah. I I don't know like, I was looking at some of the product demos earlier. Some like the game features look really cool. There's like ping pong.
Speaker 1:Yeah.
Speaker 2:$2.2.2 k is like a little pricey personally.
Speaker 1:But if you can watch Lawrence Arabia
Speaker 2:bought it If we traded you your phone for a pair of
Speaker 1:these for a week,
Speaker 2:would you for a week? No phone. No phone. Would you commit to texting on it? Can you call?
Speaker 1:I think you don't need a phone.
Speaker 2:You can go without texting for
Speaker 1:a week. You have Lawrence of Arabia. You don't need
Speaker 10:a phone.
Speaker 2:That's true. Can watch Lawrence of Arabia like, you know What's the battery life?
Speaker 1:What is it? Snap, specs, battery life. Specs, battery life. I gotta I gotta So
Speaker 2:what happened? Wasn't there some conversation that SPACs might spin out?
Speaker 1:Up to four hours. That's Lawrence of Arabia right there with a little
Speaker 2:intermission. I remember correctly, there was some like rumors Yeah. That that specs would be spun out. Yes. One Yes.
Speaker 2:Article. That has not happened.
Speaker 1:I don't think so.
Speaker 2:And so the stock is down 7% today. Mhmm. I don't know.
Speaker 1:The the the trick is that you have Apple fanboys who of, you know, they have a lot of Apple fans, but some of them are wealthy. Some of them buy every product. They buy a new phone a new iPhone every year. They buy the top of the line MacBook. They have the Mac Studio and the Mac Mini just for fun.
Speaker 1:And, like, that's a whole class of consumer for Apple. And so when they come in with something that's a little crazy, like a $10,000 gold Apple Watch, like, they'll sell a couple of them when they come in with a $3,000 VR headset. Like, a couple people will just be like, yeah. I'll give it a try. When you're talking about a new company entering hardware, Meta, I think, did a better job coming in with, like, yeah, it's just a pair of sunglasses.
Speaker 1:You need a pair of sunglasses anywhere, anyway.
Speaker 2:Camera in it.
Speaker 1:We put a camera in it. It's a $100 for the version that you know and love, the Ray Ban Wayfarers that don't have a camera in them. Ours are add a couple 100 extra bucks. It's still something you could give as a And
Speaker 2:then you can afford to lose money on every single device effectively forever. Totally.
Speaker 1:Yeah. And so and so it's a lot easier to get into that, like, meta ecosystem just saying, yeah. Throw a camera on my on my Ray Bans. I'll give it a try. Maybe I'll churn.
Speaker 1:But if it's collecting dust in the in the cabinet or in the in the sock drawer, you're a lot less like, oh, I really got burned. And and like the Apple fanboys that, you know, a lot of them took them back, but they're like, yeah. That was still like a cool experiments mix up me because I I gotta watch.
Speaker 2:Well, Tyler, once you're back in town
Speaker 1:Wait. What was that? Lord Tom
Speaker 4:rings extended cut. Oh.
Speaker 1:I think
Speaker 10:that's Is that even longer
Speaker 1:than hours? Arabia. You can't watch the whole thing.
Speaker 2:Let's do this. Once you're back in town, let's pick up a pair. Yeah. Tyler can live with them. We won't say a week.
Speaker 2:We'll say forty eight hours. Exclusively. Exclusive. Your Do
Speaker 1:everything.
Speaker 2:We take
Speaker 1:I think you need the phone to to to do anything. I think a lot of the compute
Speaker 2:hours, I I think is actually like not very hard.
Speaker 1:That's just a digital
Speaker 2:weekend. You're down? I could do a week. I could do a week.
Speaker 1:That's like 10
Speaker 2:showings asking you to do a week. If you wanna do we we can do it. Okay. He's doing I'm here in I'm here
Speaker 1:in four weeks. I'm here in a full month now. Four weeks.
Speaker 2:Alright. It was great to see you, Tyler. We miss you.
Speaker 1:Great to
Speaker 2:see you. I'll without you. Yeah. It really is John and I were kinda messing around
Speaker 1:Not quiet in here today.
Speaker 2:And we realized when Tyler's not here, there's there's nobody super close by to laugh at our Mhmm.
Speaker 1:Our
Speaker 2:bad jokes. Yeah. Spiegel called
Speaker 1:the specs both very very wearable and highly capable, which he said gives Snap an opportunity in a market focused on either very large and clunky headsets that are super capable or very lightweight glasses that really don't do much. So it is interesting. I was reading the coverage of of in there's some videos here in Upload VR, and it shows sort of the the process of this. The HoloLens one from Microsoft 2016 was 580 grams. Snapsbacks are 132 grams.
Speaker 1:So they are light. Now the Meta Ray Ban display is 70 grams, so about half as heavy. So these are heavier, but they're nowhere as heavy as a hollow lens or a real VR headset. And it checks a lot of the boxes on field of view, and we'll see. We'll see what the developer ecosystem is like.
Speaker 1:I hope someone comes up with some interesting thing. I hope that there's a YC company that builds on top of this exclusively and and has some sort of breakthrough user interface experience, some some killer use case that comes from the community.
Speaker 2:Yeah. Gotta wait see how many of these sell.
Speaker 1:Yes. That will be that will be great.
Speaker 2:Need I mean, even with a million a million sold, it's not a very big user base.
Speaker 1:It's a lot of money. Let me tell you about Console. Console builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password resets. And without further ado, let's bring in Diana Taggar from YC. She's a managing partner.
Speaker 1:Diana, welcome to the show. How are you doing?
Speaker 13:Good. Thanks for Thank having
Speaker 1:so much for taking the time.
Speaker 2:How is today?
Speaker 1:Yeah. How's demo day going?
Speaker 13:The energy and vibes are immaculate.
Speaker 1:Mhmm. What is it how does it compare to your YC experience, your entrepreneurial journey? Tell us a little bit about that and then take us through how you're talking to today's entrepreneurs about what's changed, what's the same.
Speaker 13:It's kind of fun that you were just talking about Snap because my company was building augmented reality SDK Yeah. For game devs back in the era of HoloLens.
Speaker 2:Yeah.
Speaker 13:So my company went through the batch back in summer seventeen. And back then, the it it was different. It's way smaller than what it is now. And AR still taking time to get to the headset. And when we went through it, demo day was back in the computer history museum back in That's Mountain right.
Speaker 13:And now we got our campus here in San Francisco and have way more investors and companies are raising a lot of amount that probably was more series a Mhmm. When I was doing when I was running my company.
Speaker 1:Yeah. So What was the what was the mood like around, like, platform risk, building on top of something else? Obviously, a lot of the augmented reality companies like Niantic built on top of the iPhone, on top of smartphones. They and then now we see AR sort of, you know, trying to break in through new devices, specifically spectacles, headsets, wearables. But was that a risk factor that came up in pitching VCs?
Speaker 1:Or was there sort of like, okay, there's enough of an ecosystem here. There's enough of an enterprise play that you'll be able to, you know, be a winner no matter if there's one platform that breaks out?
Speaker 13:I think it's a very good question. I think it's the same question right now that a lot of the AI companies are wondering whether they're on the path of the roadmap for the big labs. Yeah. We had the same issue when one fun fact, maybe not so fun, but on the first day of the batch when we went through it, we basically had built the same platform that Apple ARKids released. Yeah.
Speaker 13:Exactly same. It was the same SDK. Oh, no. And on that first day of the batch, we actually freaked out because you have this giant company that Yeah. Have infinite amount of money that could just crush you.
Speaker 13:And I think what that forced us to do was to really accelerate a lot of our roadmap because we had thought of building basically this SDK that would enable anyone to build code once and run on any hardware. So we were the first SDK that could enable running it across you you build the code once and it was shipped on Android and iOS and eventually also got it to headset. Then later on, our company had an exit and got acquired by Niantic, the makers of Pokemon Go Yeah. Which was the biggest user of AR back then. And then I ended up running a lot the AR and engineering teams for for Niantic.
Speaker 2:We had Andrew Lee from Tasklet on first and I really appreciated how he just straight upset. He's like, yeah, we are in the path of Oh, yeah. Nootropic and AI and we're just we're we're we are but just sort of accepting that and and workflow automation, what what they're doing, such a big category, can obviously, with great execution, build a build a big company even even despite of that. What are some of the key themes for the batch? How does this batch compare to the last batch?
Speaker 2:What kind of trends are you seeing overall?
Speaker 13:I think this batch is following a similar trend to the winter twenty six batch where things that have been happening a lot of these companies are the first one that are basically riding the wave with agentic coding working. Mhmm. It is it has become the norm where company well, the norm. It's become more common that companies can go to 0 to 7 figures in revenue within just three months. Mhmm.
Speaker 13:Which when I did the batch, that would have been impossible. I don't think any companies did that. The best companies back then would grow, let's say, 10% week on week, which is what, let's say, Airbnb did back then. And that would get them to couple 100,000 in ARR, which is a very good very very very impressive accomplishment back then. But now, companies get to 7 figures because the companies are able to build a more mature product a lot quicker with with agentic coding.
Speaker 13:If they find the right user and customers and sales and nail nail on that, people can really speed through this right now.
Speaker 2:How how often how often do you do you find yourself talking to a company in office hours that you think shouldn't be optimizing for that? Because there's a lot of companies that, you know, we've talked to today like Madrone, for example, like very important sort of product category, clearly massive TAM, and they should go as fast as possible. But if they just optimize for revenue traction right away, it would take them on the wrong path, I imagine.
Speaker 13:Oh, absolutely. So this is where we give very customer advice depending on the type of company. If you're building, let's say, core infrastructure or defense type of applications, it's more important that you deploy deeply into few customers. And it doesn't matter if the revenue is small, but it has a lot of opportunity for growth. And it it really depends on the journey.
Speaker 13:So this is not advice for all the companies, for for some of them.
Speaker 1:The YC has gone through waves of, like, consumer boom in the early days with Airbnb and a lot of consumer companies and then sort of swung to business to business products and companies. And there's been demo days that we've been to where it's a lot of stuff that's deeper in the token path, which is a great place to be, enabling agentic workflows deeper in the stack. There's a lot of hard tech this time. But I'm wondering how you're viewing the opportunity in consumer, in gaming. We're just seeing so many vibe coded games that are remarkable demos, and it feels like with a YC team on an actual deadline to get to real functionality, real adoption, revenue traction, the tools are there now where previously to make something that looked anything like a breakout game, you'd see these companies and you'd and you'd hear, oh, well, you know, Epic Games was grinding in the dark for five years building their engine before they released a game or, you know, so many companies, Roblox, it took a long time.
Speaker 1:Now it feels like you can move faster. And that might make it more the the end state might be that all of this turns into, you know, there's no fundraising at all and it's all just indie devs. But it does feel like there's an opportunity here. But how are you seeing consumer either in gaming or just broadly develop over the next couple years at YC?
Speaker 13:I think it's still very early. We haven't seen these companies break out yet.
Speaker 1:Yeah.
Speaker 13:I mean, this whole era of AI right now, which is one of the most fun areas in tech right now, there's still so many patterns that we're figuring out. And with regard to consumers, I think there's going to be a lot of big category winners that we don't know what the shape of them could be. Sort of like trying to predict the Airbnb or DoorDash back in the twenty tens would be very hard. And with regards to gaming, having worked in gaming myself and know a lot of these triple a studios that you mentioned that take a long time to get game out there because they build the engine and there's just so much technical complexity. A lot of that, yes, the barrier of that is entry is lower.
Speaker 13:But I think the thing that's still in short supply is the ability to encode fun. The thing why you could build lots of games today, which I've tried and and and by coded some games, but it's hard to build actually game loops that Yeah. People keep coming back and have fun. And those are new patterns that we haven't discovered. I mean, you could imagine now in the era where a lot of games could be in an agentic loop and based on a lot of the metrics of the usage, they could self improve.
Speaker 13:And it could be more fun, but I don't think people figure out how to build those Because you you have to be able to measure fun which I'm not sure if there's a easy way to do that. It it really depends game per game.
Speaker 1:Yeah. Yeah. Yeah. Makes a lot of sense. Anyway, thank you so much for taking the time to come chat with us.
Speaker 1:Have a great
Speaker 2:great work this batch. There's lot of fun companies.
Speaker 1:Yeah. We'll talk to you soon.
Speaker 13:Alright, guys.
Speaker 12:Have a
Speaker 14:good one.
Speaker 13:Good to
Speaker 3:see you. Cheers. Bye.
Speaker 1:Well, Manitis is getting himself in trouble for debating the world's population. He says population is max 500,000,000 global. Earth is max 15,000 years old. People are asking if it's bait. He's going back and forth with a bunch of people.
Speaker 1:He he's he's pointing out that there are some economic incentives to certain countries to misreport population numbers if they're getting if they're getting economic incentives or distributions based on that. He's having fun on the timeline. You can go dig into his post and make a make a call for yourself. Anyway, over in China, one of the most populous company countries in the world, allegedly, The final boss of ADHD has been spotted. The guy is simultaneously watching TikTok, chatting in a messenger, and playing a game.
Speaker 1:This is what a foldable smartphone is for. There's pushback against smartphones now. Imagine what foldable smartphones will do. Is it is it gonna be even worse? Who knows?
Speaker 1:This is an absolutely crazy setup to be rocking. And is he paw is this a single player game that he pauses or
Speaker 2:Yeah. It kinda seems like he's larping.
Speaker 1:Yeah. This seems performative. Right? This is a larp. This is a larp.
Speaker 1:Yeah. A larp. I don't think this is real. I got in trouble for my game knowledge. I I apparently used min maxing improperly.
Speaker 1:Although, there was some debate over whether or not min maxing has has transformed into the definition that I used, whether I was using a more modern interpretation of that term. But anyway, you can go and dig into Sutrini's post and make your own justification on where you sit on token maxing, token minning, token min maxing. The clear point is that you've gotta focus on ROI like any other business process.
Speaker 2:Andrew Gao sharing some data. This is our very cognition. He says, this isn't public but Stanford CS degrees dropped 42% year over year. Berkeley down 61%. All of the propaganda, like, don't need you don't need to learn to code anymore
Speaker 1:Yeah.
Speaker 2:Seems to be working.
Speaker 1:I mean, it's gotta dramatically change the experience and, like, the fun of being like, part of the fun of taking a computer science course is doing an exercise and working through the code and, like, solving the puzzle that is the code challenge. And when you can just one shop that with any frontier model, it gets a lot less fun. And so, you have to imagine that people moved over to other more amorphous, more rewarding disciplines. But it does seem silly because I'm sure that if you if you go really deep in a CS degree and you're AI enabled as well, you can both find a job and also have a really, really interesting and and rewarding experience. But certainly a reaction to the fact that the the the existing path of just, like, like, someone tells me exactly what to implement, then I go and implement that, and I make 6 figures forever is is less and less clear.
Speaker 1:And so people are reacting to that by going to other places. I wanna see the data on where where these students went. What are they what are they studying? Yeah. If not CS, did they did they bleed into everything else?
Speaker 1:Because sometimes you read these and it's oh, they're not studying computer science anymore. They're studying computer engineering. No. And it's like, yeah, that's kind of the same thing. You saw that like computer programming declined but computer science jobs increased or something like studying Yeah.
Speaker 1:Yeah. I mean, a lot of the AI track has always been symbolic systems anyway, not CS, at least at Stanford. That's what a lot of the early Facebook employees and lot of those folks studied. There's a lot of other folks that study physics or math or all sorts of things. And it's gotta be more fun to study a really hard topic like physics or math because you have an AI tutor and you can use AI to to close that gap, to bridge that gap.
Speaker 1:But we we should ask Harsh Taggar from YC. He's ready to chat with us. We can ask him about what you should major in if you wanna build the next great company. What do you think, Harsh? Did you study computer science?
Speaker 1:Did you what
Speaker 9:was question? Actually as an undergrad. I I started in law school, then I dropped out. Then I took myself to program.
Speaker 1:A lawyer becoming successful. Anything is possible. Yeah.
Speaker 9:It's true. That is a bad start, but it ended up remarkable.
Speaker 1:Yeah. No. No. Obviously, it's a fantastic background. It speaks to the the the diversity of of backgrounds that lead people to success in Silicon Valley.
Speaker 1:What what what do you make of this decline in CS degrees? What are you seeing in the y c founders that join the latest batches? Is there is there are you experiencing more diversity of backgrounds? It feels like y c has always been pulling from all over the place. The best case in point is Airbnb.
Speaker 1:It's a bunch of design students, and and that was not a feeder school for it was not a unicorn factory, RISD, and yet we got Airbnb out of it. So what's going on at YC in terms of educational background these days?
Speaker 9:It's good. You know, it's actually this weekend was with a group of college students that that we were meeting and, you know, hopefully hopefully, they'll do YC one day. And this was definitely something they said is that they are seeing their smart friends enrolling in computer science less. People want to do more physics and math and first principle stuff. Yeah.
Speaker 9:So that definitely I think that's a leading indicator. So I would definitely expect over the next few years, we might see more of the smart founders come in with like a math or some sort of like thinking STEMI background that's not pure CS and then, like, I don't know, use the coding models to actually write the code.
Speaker 1:Yeah. Yeah. It doesn't there's one read on this where it's like, oh, no one's going into tech. And I think it's like, no. People are gonna be, like, even sharper about using these tools and even more, you know, ground truth in what matters, in what's not changing, in the math and physics stuff.
Speaker 1:Anyway, other trends that you're seeing.
Speaker 2:Yeah. Yeah. I wanted to get into like the psyche of this batch. If you zoom out, so many companies are are having like this sort of like often, you know, if they're a later stage company, midlife crisis, if they're a younger startup that's kind of in the path of the lab, they're wondering. It feels like even the last, you know, few weeks, like the narrative is kind of flipped and we're seeing like a lot of the application layer companies say like, hey, we have an opportunity to sort of orchestrate a variety of models and maybe get efficiency for companies that we're we're token maxing.
Speaker 2:So what is the psyche of the current batch? Where are they finding opportunity? I'm sure you had a few office hours where founders were saying like, is it over? Should I just pack it up and join a lab? But and and of course, the YC way would be to say, like, no.
Speaker 2:There's always gonna be opportunity for, you know, smart, focused people. But take us through it.
Speaker 9:Yeah. I mean, it definitely ebbs and flows. I would say when Claude Code first launched earlier this year, I feel like it really did flow towards the, oh, wow, like the labs are going to take way more of the value and like, are they just going to own everything? And I think that was a little bit in the psyche. I feel like now it's flowed back towards you don't you want to try and have a little bit of thought around, are you going be in the path of labs or not?
Speaker 9:But mostly, just think the founders here are doing their thing and they're not currently like worried about that as much so much more. And I think like largely they're trying to figure out what are kind of maybe the boring but valuable things that the labs are just not going to focus in on. And I think there you see a lot of it's funny. It's like we used to talk about like making stuff that people want. Now I feel like it's a lot of making things agents want.
Speaker 9:And so especially at like the infrastructure level, it's like how you set up sandboxes for agents that go into the nitty gritty detail of giving them all the tooling that they need to use to actually perform tasks and actually to do things. And it's the kind of stuff that the labs themselves are just unlikely to go into into depth on.
Speaker 1:Yeah. It's funny that somewhat of it's like somewhat a new framing. Think about what the big companies aren't aren't gonna do is too off the beaten path for them. But if you go back, I'm like, well, the hotel industry wasn't thinking about Airbnb and the the the big banks weren't thinking about Bitcoin and you get Coinbase. And so there's something there that's like always been true and is just sort of resurfacing and is actually maybe a ground truth that you need to pull back to constantly.
Speaker 1:But it but but it is it is potentially more relevant than ever. Has the has the Gavin Baker meme of being in the token path taken hold this batch, this idea that you wanna be deeper in the bottleneck that if you're if you're not in the in the downstream path of the labs, the safest place might be upstream, deeper in the supply chain. We talked to a founder who's working on cooling for data centers. That's clearly something that's very aligned with the broad trend. But what's happening there in terms of token path thought?
Speaker 9:I don't I don't know. At least I don't think that has trickled down to, like, the founders starting these companies and figuring out what ideas to work on. I do think some of that framework fits. Like you're certainly seeing things further into like the physical world, like actually building physical things. But I think that's actually more to do with being inspired by Elon and Palmer Lucky at Anderil on the founder side that people want to work on like physical, like work in atoms.
Speaker 9:So we've got a team in this batch building like a nuclear reactor like That I think is just inspired by, hey, like we want to build real things. And then I think on the other side of the marketplace, investors typically really didn't want to invest in hardware companies. So we used to see this. I always used to brace the hardware or the hard tech companies, hey, you're going to have to like be ready for it because no one's going to want to invest in you. You're going to have to grind it out.
Speaker 9:It might be years before you raise the money that you need. And now I think, again, since Claude Code, there's been this real shift of, like SaaS is dead, maybe software is not going be as valuable. Suddenly investors all want to invest in the hard tech stuff, which is, you know, I'm happy about it, but it does also just show like how fickle that side of the marketplace can be as well.
Speaker 2:Have you seen any change to average burn rates with or anyone in the batch token maxing so hard that you have to say like, hey, you should probably, you know, I I expect you to raise, you know, after demo day, but, you know, maybe maybe don't
Speaker 1:spend Sure.
Speaker 13:No. Not
Speaker 9:yet. You know, I'm a bit reluctant to say this. I don't want it to change, but I I don't think I have that much control. Like, I actually think on the ground, the founders feel like the the subscription plans from the big lab companies are actually very generous. And so they're able to actually get as much token usage as they want largely out of those plans sort of being what I've seen.
Speaker 9:We do internally talk about this. Like we do wonder if there's some training we need to do to like push the founders to spend more on tokens and that maybe they're thinking about tokens as something you should conserve spend on. Whereas like I think I and a bunch of the other YC partners really think about it, it's a lot more like rent. Like you don't say I'm not moving to San Francisco to build my tech startup because the rent's expensive. Like, yes, it's expensive, but it's the place to be.
Speaker 9:Like you don't conserve on that. You like want to be you actually want to spend money on that. There's other things you save money on. And so it I do feel like because so many of the founders, especially if they're younger, they just don't have the budgets to use the latest models and be like cost insensitive and token max. So they're just used to conserving and trying to do more with less.
Speaker 9:And I I think that that may well change. But at least currently, I I am I don't feel like the burn rate is going up because people trying to get to product market fit are spending way more on tokens.
Speaker 2:Yeah. It's interesting. It's like, you know, maybe you don't you can delay hiring the incremental engineer which actually is can be very good because it's way easier to pivot if you have just the founders. Right? Versus like, you know, once you start adding.
Speaker 2:What about trends on the business model side? You know, last year, I feel like the, you know, classic VC blog post would be like sell the work, not, you know, the product. We've seen some companies get to the point, let's there's like, you know, a legal startup that that's like actually just doing the doing the contracts. They basically, they sell executed contracts effectively. But it hasn't maybe been as popular as I think a lot of people had imagined, at least so far.
Speaker 2:But what are you seeing?
Speaker 9:I don't think the business models are fully switched over to like sort of paperwork yet. It's certainly paper usage, but I don't think it's paper work yet. And I think that's just because the agents as yet haven't quite been good enough to actually consistently deliver like the final contract in a way that makes the startups feel good about charging that way. I do think we're right on the cusp of that changing though. Like this batch really does feel like one where it's not just sort of agents to review things or human in the loop or getting stuff teed up.
Speaker 9:It's really starting to be more end to end and you're getting to the point where the agents are just doing all of the work. And at that point, yeah, you may well switch over. But I I feel like maybe that's gonna be a a batch or two away.
Speaker 1:Is the are we gonna see a revenge of the of the network effect? It feels like in a world where, you know, software is mutable and and maybe, like, the million lines of code that you and your team built are not as defensible as you thought, the original SaaS pocalypse thesis, network effects businesses should do really well. I don't know if more founders are talking about that. But what what's your interpretation? Because it is sort of the hardest moat to construct, happens sort of randomly sometimes.
Speaker 1:But if you can get it done, it feels like you'll be very you'll be in a very strong position.
Speaker 9:I'm you know, you mentioned like the late stage companies having like maybe midlife crisis. That's where I I I hear network effects talked about more, honestly. It's like some of those company, if you're whatnot or Cauchy at the moment, like, yeah, or Coinbase, like you're feeling pretty good about the fact that you are a marketplace business with real knock on network effects and you're not worried about sort of someone vibe coding a So competitor to I think that's where I hear it. I will say like, yeah, again, on the ground floor here on the batches, I don't we haven't seen as many founders like build pure marketplace businesses as you would expect based on that thesis. And I think it's just because obviously people are really excited to work with AI and build AI tools.
Speaker 9:They're not really thinking about it as, hey, like, what's like a what's got like a network effect mode and how can I build that business?
Speaker 1:Yeah. What about gaming? We talked to Diana a little bit about this, but it feels like we you were seeing incredible demos of vibe coded games. When I see them, I'm like, I would love for a team of YC founders to work on that for three months to get it actually to a place where it's a real game instead of just a demo. And but the underwriting for the game industry has always been different than the traditional SaaS venture capital flow.
Speaker 1:Is there a world where YC is more open to just pure games companies? We're just gonna make a hit game. We're gonna scale it into a triple a game studio. We're gonna develop IP. That's a very different motion, but are you open to that?
Speaker 1:Is there is there momentum there, or is that something that you think is farther off?
Speaker 9:Yeah. I mean, we would totally be open to it. Diana's definitely got the the gaming background, the gaming expertise there. But, yeah, I think we would be totally open to it and just like, the reason you typically, as a startup investor, they wanna invest in games is that it's so hits driven. Even if you get one hit, how do you know you get another one?
Speaker 9:What's replicable? But, yeah, like, you know, these days, like, if you can if you can build some recipe for actually consistent producing games and and I feel like Zynga, we've got closest to that. Though arguably, was more about, like, they sort of productize the the distribution mechanism and the viral mechanics more than, like, the the gameplay. But I I know that seems plausible in AI. It seems like you can if you can actually build an AI or an agent that can consistently produce high quality games and also you just be able to run so many of those experiments in parallel or so many more experiments in parallel than you could before.
Speaker 9:I think that'd really interesting. Again, with us, it's the same thing. We need to see founders who seem like they've got some insight at that level. Like they're thinking about it beyond just, hey, I really love playing third person shooters and I wanna build like a really cool third person shooter game. We'd probably have to hear that in the interview.
Speaker 9:Like, hey, like, I'm thinking of how this would like generalize and build out and here's like where the the technology could be interesting.
Speaker 1:I'm wondering if I mean, I'm wondering if there's a lesson from I mean, Hollywood is probably behind YC in terms of the forward lookingness, but there's this interesting case study with backrooms and obsession, these YouTubers who went and made, like, classic Hollywood films, low budgets, but real budgets. And they put up huge numbers in their in their in their massive successes in in Hollywood now driving a lot of attention. And and it's interesting to think about, like, what is the next category that gets unlocked that's more of like indie dev world but now has the ability to scale through like the YC venture capital model.
Speaker 9:Yeah. I think yeah. I think that's gonna be really interesting. I think that's where you might end up seeing it. I don't know if we'll see like the one person well, you might see the one person unicorns, but you certainly feels like you're gonna start seeing the one person like $100,000,000 revenue companies in like a bunch of articles because you've just got like agents doing the core business functions.
Speaker 2:Yeah. Have you ever had office hours where where a founder comes in and they're like, alright, like I think I'm I think I'm that company. I think I'm the one person $100,000,000 company. Because like everyone's been talking about this forever but like there's such a much stronger incentive to just like hire the incremental person if it can make you Like I just don't know that it will ever I guess, like, may it it
Speaker 1:You just want a buddy.
Speaker 2:But, yeah. There's such a strong incentive like Yeah. Do I want do
Speaker 1:I want to But I gotta have a friend around.
Speaker 2:Yeah. Like, do you do you wanna be the like company that gets an award that doesn't matter or do you wanna Yeah.
Speaker 10:Good point.
Speaker 7:Or not even
Speaker 2:a real award. It's just like it's it's something that you can say on the Internet and then people will debate it and be like, well, hired this freelancer or like Yeah. Yeah. You know, you have a lawyer. Does that really count?
Speaker 2:So like, I feel like it will never actually happen because it will already always be debated and
Speaker 1:Sure. Sure.
Speaker 9:I personally have not worked with a founder who's like come in with the dead set like, I never wanna hire anyone. I kinda wanna only work for myself. I mean, my guess is someone like that is not gonna gravitate towards like a a community product, which is essentially what YC is. And so it could happen, who knows? The thing that I'm seeing over 100%, you can get to you like Series A, you can get to a million or $2,000,000 of revenue without hiring anyone and being way leaner than you've ever seen before.
Speaker 9:But after you've raised the a or the b, it does seem like hiring is essentially the same as it's always been. Like Mhmm. Who knows whether that's because like there's just more work to do or whether it's just like it's like once then you have like your investors and they're like running the same playbook. But I definitely am not seeing any evidence yet of like those companies really slowing down on hiring.
Speaker 1:Mhmm. Can you give us the lore on the Paul Bootkite $100,000,000,000 question? That's a funny that's
Speaker 9:yeah. For sure. I mean, what's the law like? You know, we did this thing at YC called group office hours where it's just sort a couple of partners and a group of the startups and you kinda it's sort like a I don't it's sort of like a group discussion. Hey, like what's going on?
Speaker 9:What are your problems? And sometimes we'll prompt with, hey, like, let's think about this. Again, everyone could like chime in. And Paul always had this great prompt, which was don't just think about how you're going to be like a billion dollar company where get you to like a $100,000,000,000 in revenue. Think about like, what's the next act from that?
Speaker 9:Like how do you get to a $100,000,000,000? Like Google started off with search and then became so much more meta is the same. And so it's sort of like a mind expanding exercise and it's useful to do at this stage because you get a sense for how much ambition and vision do the founders actually have. And sometimes it helps them get more excited about their own company when they realize, oh, wow, like this is like, you know, I was thinking about it as like, how do we like build this one product that gets us to like, you know, a 100,000,000 revenue, but I actually didn't even realize there's six other things we could do. I just have to like get there.
Speaker 1:Yeah. Is it too small? Do you need a 10 x? We got trillion dollar companies now.
Speaker 2:Inflation. Even Eli even Elon. Small time.
Speaker 1:YC just wants to sit around just knocking base hits to a 100,000,000,000.
Speaker 9:Yeah. Elon
Speaker 1:Are you swinging for the fences or not, Harv?
Speaker 9:Maybe maybe I'll bring it back and call it the trillion dollar.
Speaker 1:It has a nice ring to it.
Speaker 9:I'll press it with my pink.
Speaker 1:You should. You should. Sorry, PB. Jordy, what was the last thing?
Speaker 2:Elon was saying on Sunday, he's he would be surprised if they don't have a trillion of revenue by 2031.
Speaker 1:I agree. I agree. What's the path?
Speaker 9:The market the market's space time, so he can't beat that.
Speaker 1:Yeah. That's right. Anyway, we're gonna hop on with Gary. Thank you so much for hopping on the show. Yeah.
Speaker 1:It's great to see you again. Congrats on day. We'll talk to you soon. Cheers.
Speaker 9:Will do. See you guys in the end.
Speaker 1:Let me tell you about public.com. Investing for those who take it seriously. They got stocks, options, bonds, crypto We've and more with great customer service. Absolutely. We gotta hit Garry with the flash bangs
Speaker 2:Right away.
Speaker 1:As he comes in. Gary, how are you doing? Welcome to the show. He's now here. It's demo day.
Speaker 1:Watch out. It's flashbang. Great to see you. Great to see you. How are you doing?
Speaker 1:Take us through it.
Speaker 2:How's the day been? Too long.
Speaker 14:Oh, it's awesome. I mean, it's always the big show here in San Francisco. Yes. Mean, it's a beautiful gorgeous day and, you know, who doesn't like to go check out a nuclear reactor in our back parking lot? No uranium, don't worry.
Speaker 1:Woah. This is like the second or third nuclear company though. Right?
Speaker 14:I mean, I think we need we kinda need all of them.
Speaker 2:Right? Let's do all
Speaker 14:of them.
Speaker 2:What's stopping them from going critical in the in the parking lot?
Speaker 14:Oh, well, luckily, no uranium. No uranium. No geyser counter needed. You're all good.
Speaker 1:That's great. Is how much is hard tech booming? Do you have any, like, stats? It feels like every year, there's a slight slightly more people taking the the hardware isn't that hard. They say hardware is hard, but I'm gonna try it.
Speaker 1:And it feels like that's been a trend that's been growing steadily. Am I am I correct to read that into the trends over demo days over the last couple years?
Speaker 14:Yeah, man. I gotta call out my buddy Brett Gibson over at Initialized Capital. I mean, right when CodeGen first started happening, Brett was my first friend who said, you know, obviously, you gotta, you know, fund the bangers and it's not like they stopped doing b to b SaaS.
Speaker 9:Yeah.
Speaker 14:But, you know, Initializ was one of the first people to do the pivot. Yeah. To say, know what? Like, hard tech is the way it's gonna go and, you know, things like flock safety were sort of the first things we did that really really became huge. And, you know, computer vision is in.
Speaker 14:And then now with AI, like, everything is open. It's so much easier. I mean Yeah. You can do mechanical engineering. You could do electrical engineering.
Speaker 14:If you don't understand it, you can build it. You can find every vendor. Like, the supply chain management can happen right there. All in OpenClaw now. Sure.
Speaker 14:I mean, there's I mean, we're just in a new age.
Speaker 2:Yeah. I mean, we've even seen people like like optimizing their home Wi Fi speed Oh, yeah. Like, you know, different
Speaker 1:It's crazy. A lot of the hard tech boom, I feel like, has been driven by Elon, Palmer Lucky, just sort of breaking the glass on, like, it's possible for this to happen. And that's led to a lot of, like, defense tech startups. But I'm interested in the intersection. What are you seeing, and how much how much conversation is there around hardware and AI, data centers, stuff that's in the token path but not in the direct path, not one shot able by a by a frontier model?
Speaker 14:Oh my god. I mean, honestly, you should probably get Ash. Ashton Kutcher's here today. You should go talk to him. He's got a whole thesis around AI, solar, you know.
Speaker 14:He's actually pretty bearish on fusion, which is interesting. You should ask him about that.
Speaker 5:Okay.
Speaker 14:Yeah. I think
Speaker 2:That's that's news. That's gonna Yeah. Ashton Kutcher, bearish on Fusion. We love Ashton.
Speaker 14:He is like really He went all the way like, he met everyone. So Yeah. I mean, Ashton has been an incredible investor, especially for Hard Tech. But anyway, I mean, I think what we've been seeing, there's, like, more there's more defense here in this batch than the entire last year.
Speaker 2:Yeah.
Speaker 14:And then
Speaker 1:But there's also more geopolitical conflict. So there's more energy to purchase and the government's sort of changed a lot of the ways stuff is procured. And so the old adage Yeah.
Speaker 2:The Carps app. Software singularity Yeah. And then hardware Who
Speaker 14:am gonna hand it up to? Who? So it's Emil Michael and Oh, it's our friends who are actually in the Trump administration Sure. Who are like changing everything like the DIU, like it's a new department of war. Like this is never you know, I think that there is actually an awareness that cost plus you know, cost plus was originally designed to be something that created more innovation.
Speaker 14:And, you know, here we are fifty, eighty years later, and what was needed for fifty or eighty years ago, it's the wrong thing now. You have the defense primes that are just not actually innovating. They can't. Like, it's sort of structural. There's sort of these, you know, it's the equivalent of big tech bureaucracy.
Speaker 14:Like, I think, you know, I think of iPhone, how stupid Siri is and how terrible it is. Or even like Alexa over at Amazon. Like unbelievable. Shot fired. How incompetent.
Speaker 14:Yeah. I mean, these are very competent people put into a system that is structurally unable to deliver technology that is actually what people really, really want. And so when you talk about consumer technology, like, you know, it's not that big a deal. Like, you know, my life is 20% worse, 10% worse because I can't use a Siri that actually uses large language models properly, you know, years after it was designed. And I usually you know, when I go to DC, I like to tell politicians that.
Speaker 14:It's like, hey, like, here's this thing that doesn't make sense in society. But, you know, it's consumer tech. It's it's no one's gonna really like probably very few people have died because of it. But when I really what makes me mad though is when you think about like there are service members who are going to die in in service of our country
Speaker 1:Mhmm.
Speaker 14:To defend liberty, and they're giving their lives because defense primes are not doing the job that they're supposed to do. Sure. Right? They're not innovating. They're not bringing these new technologies to fore, and it's structural.
Speaker 14:And it's not like individual people trying to do it. It's structural. Right? Like Yeah. Just as the people who work on Siri like, actually, we funded a number of them who have come in D NYC.
Speaker 14:Delightful, wonderful people. Like, the people who work at these companies are incredible. Yeah. I never want to attack engineers working on this stuff. It's actually structure.
Speaker 1:Yeah.
Speaker 14:Like, you have big tech and you have, you know, big anything.
Speaker 1:Yeah.
Speaker 14:Right? It becomes structural where here a thing that should happen, it does not happen. Why? You know, I think cost plus is one of those Yeah. Like, it's just systematically, instead of trying to create something that's better, it's like how do we maximize shareholder value?
Speaker 14:Yeah. You know, I get it, but also, why are we doing it this way? And so, you know, credit to the Department of War. Like, they are actually, for the first time in, like, decades easily. Like, they're actually open to a team of 10 or 20 people, whether it's, you know, in Boston, in Austin, even down the street in San Francisco, in in Gundo.
Speaker 14:Shout out to our Gundo bros out there.
Speaker 1:Yeah. We talked to Dan Durskel about just, like, having range days where any startup can come and pitch and they'll just buy the best product right there. It feels like it's an entirely new day in terms of procurement. Switching gears to software is like, I could prompt that with one with one prompt. I could build that or it's just directly in the path of the labs.
Speaker 1:It's so easy to build. Is that the new, like, what if Google builds it? Like, I I I have a suspicion that we might have over rotated on the on the, oh, like, it's easy to build that particular product or vibe code that particular product. And it's like, yeah, but you didn't. And then this team did and they went and did all the other hard things to get customers and understand the user and actually build a great product.
Speaker 1:And so, yes, you could clone it, but they have momentum. And so maybe they won't be a trillion dollar business, but there might be some beautiful businesses that are accelerated and they look like SaaS and they look like they could be cloned, but there's something secret there that's still going on. How do you think about that? Do you push back or do you agree?
Speaker 14:No. I think that, you know what, like, being in San Francisco and being friends with people at the labs Yeah. And being able to see, like, the inside, like, you know, being able to see the inside of, like, you know, what Codex and ClaudeCode is going to be incredible. Right? And then these are all 200 IQ people building 200 IQ models.
Speaker 14:And, you know, it's gonna keep going. I mean, it's it's gonna be, you know, true AGI. The takeoff is happening. Sure. And the thing you have to realize is like everywhere else, well, those 200 IQ people can't really interface the way that they need to.
Speaker 14:It's with the 150 IQ people and the one thirty IQ people and the 100 IQ people and humanity.
Speaker 1:Room temp. Need a room temp guy to build a great business. No. You talk to a lot of entrepreneurs and it's like, yeah, this person just worked really hard and found an interesting niche and just deliver it.
Speaker 2:Down to my level. Room temp.
Speaker 14:But like That's great. We're Yeah. Joking, but I on the, you know, on the other hand, like, the world actually cannot interface with these. Like, the models will be too complex.
Speaker 1:Totally.
Speaker 14:The UI will be too complex. Like, you know, the more complicated you make any given solution, the less likely someone's actually gonna be able to take advantage of it and implement it and use it. Yeah. And so, you know, that's where all of the value is in business. It's like, how do you take this new tech that nobody has, that very few people understand
Speaker 1:Yeah.
Speaker 14:And then bring it to them in a way that actually helps their lives. And Yeah. You know, I mean, obviously, on a five or ten year basis with super intelligence becoming what it is, you know, all bets could be off Yeah. On like a long enough time frame. But certainly for the next like eighteen, twenty four, thirty six months, that's not happening.
Speaker 14:And for now, hey, man, I we're gonna fight for the little guy and for, you know, the person who has nothing sitting in front of a recycled MacBook Pro to be able to make anything, to make prosperity happen. Like I love that. That's what that's what this logo is. Right?
Speaker 2:I love it. Yeah.
Speaker 14:That's what that's what we're about. Like, this
Speaker 1:is Yeah.
Speaker 14:You know, as long as this is a flag that flies, like, I I will, to my dying day, will fight
Speaker 2:I love it.
Speaker 14:For the startups and for startup founders and for people to be able to create something from nothing.
Speaker 2:Yeah.
Speaker 14:And, you know, I think it's gonna be a while before we really have to worry about, like, are there gonna be jobs and things like that.
Speaker 1:No. I completely agree.
Speaker 2:What out of the current, like, request for start ups is there any category that comes to mind? Are you working on a new on a new request for startups list?
Speaker 14:Yeah. Absolute I mean, we're always doing that. I don't know. I'm I'm trying to convince Ashton to do the, you know, the call for solar and re industrialize America with me, so maybe you'll see that. Joe Gebia, chief design officer Oh, of The United States, he he, you know, sent me the one about agriculture, you know, where I I think that we're realizing that, like, YC has a real convening power, and people really shouldn't have to just go and work on an you know, nothing wrong with b to b SaaS and we love it.
Speaker 14:Yeah. But also, like, you know, if you've got something in you that isn't that, like, we can actually try to harness, like, all that brain power Totally. And all that AI power into basically everything. I mean, that's my the the number one philosophy that I think people have not absorbed yet enough and that I want everyone to hear and I will shout from every hill is that it's time to boil the oceans, guys. Like, everyone else is out there trying to figure out like, oh, let me like lay off all these people and like, the machines are better than humans.
Speaker 14:I was like, you know, we live in a broken, completely just it's like a backward world. Right? Like, if we could accelerate technology fast enough, it would solve a lot more problems, people would have a lot more prosperity. And now, like, the biggest one of the biggest things, the blocker is not even money. It hasn't been money for some time.
Speaker 14:It's definitely not right now. Like, it's just pure agency. Like, do you have an idea? Like, can you prompt it?
Speaker 1:Like, do you actually do
Speaker 14:you actually know how to use this stuff? What do you want? Like, what do you want to manifest in the world? And if we do that, and we do that like 10 or a 100 times or a thousand times more than we have been, and we have you know, and then going back to what we were saying earlier, like, it's actually about the systems. Right?
Speaker 14:A startup is the defining system where either you do it or you don't. Like, either you have a customer that loves it or a customer that like doesn't buy it. And like most of the time, frankly, like people love to bag on startups, it's because those startups don't make something people want. Right? That's why our t shirt is literally make something people want.
Speaker 14:It's not more complicated than that. We actually give away the secrets on our freaking t shirts. A great t shirt that you get on your first day at YC. But like, it's surprising how hard it is to do that. And then but if we did that, you know, instead of trying to replace jobs, instead of trying to say like, you know, I could like lower my cost by 90%.
Speaker 14:Like, the thing is, that's why I love markets. Like, if you have you know, just to take it take like a big tech swing again, when you have a moat that is so unassailable, that is basically like regulatory capture. Like, you basically if the government says like, actually, Apple, you can just not have multiple app stores, then you know what the government just granted? The government is okay with a monopoly. Mhmm.
Speaker 14:And when you have a monopoly, you have no choice, and then that's what we have. Like Mhmm. We do not have choice about what messenger we use. Like, why is iMessage so stupid? If you had LLMs embedded in that, you would have so, you know, we could actually literally save time by having that level inside our phone.
Speaker 14:But I guarantee Personally,
Speaker 2:I like when I'm searching for like a very specific message that I know I sent and I can't find it. Personally, I just
Speaker 1:Where where is the bar for big tech now? Where where where is the bar for big tech? Because SpaceX is now a $3,000,000,000,000 company. If you're just hanging out of just 1,000,000,000,000, are you little tech now? Are are you a $100,000,000,000 little tech company?
Speaker 14:Toddler. I mean,
Speaker 1:where where where is the line?
Speaker 14:Honestly, it's like after people are like $10,000,000,000 valuation, I'm like, God bless you. Okay. Please don't please don't, you know Steep them all everyone. For the next yeah. Please don't Steep them all.
Speaker 1:Next generation. Decacorn is the graduation.
Speaker 14:That's my experience.
Speaker 1:Yeah. No. That makes sense.
Speaker 14:Become a Deckar Connor, you start hiring these Google PMs who come in and, you know, the same people who closed off the platforms on App Store, things like that. You start hiring those PMs and then it's over, guys, you know.
Speaker 1:Oh, wow.
Speaker 14:Which is fun. Like, as long as the thing is like, as long as there are markets, as long as there's choice.
Speaker 10:Yeah. Of course.
Speaker 14:There's gonna be a check on that. Right? And so that's that's my fractal. I'm like, hey, man.
Speaker 2:No. I've always been drooling the
Speaker 14:oceans. Agenda.
Speaker 1:I think it's
Speaker 14:Let's make so many more people. I mean, it's you wanna get political? I don't know. I I have a thing about that.
Speaker 1:Not particularly.
Speaker 14:Okay. No politics
Speaker 8:today. No
Speaker 14:politics today. I I No politics today.
Speaker 1:I would rather talk about gaming
Speaker 2:You're running. That's it. You're running. For president. For president of The United
Speaker 14:I'm Canadian. Sorry, guys.
Speaker 1:Oh, interesting. I I I wanna I I didn't know that for some reason.
Speaker 14:I was born in Winnipeg. I'm naturalized though. Yeah. You know, God bless America.
Speaker 1:Talk I I what what I actually wanna know about is G Stack. I wanna know Yeah. Of course. About G Stack in the context of LIC. I feel like YC, the whole goal, the whole system is built to allow the founders to talk to their customers, to build something people want.
Speaker 1:And that's why there's book face with investor reviews because you could see a founder getting distracted and being like, I need to optimize my fundraise, and so I should go build a database and interview everyone about what funds are the best. They don't need to because it's been done for every y c company And that's gone through the is there a lens where I can view some of the research, some of the work, some of the experiments that you're doing around vibe coding, around g stack as let me sort of like do the unhobbling but fall on the sword of like optimizing systems and experimenting so that that burden doesn't go on to every single y c founder that's token maxing
Speaker 3:Yeah. In the
Speaker 14:Absolutely. Okay. So g stack was sort of my project from like January through March. I'm still maintaining it
Speaker 1:Yeah.
Speaker 14:Fixing it. But like, my new thing is g brain, which I Yeah. Want it to be like the Postgres for agents.
Speaker 1:Oh, okay.
Speaker 14:So the thing I realized
Speaker 9:Yes.
Speaker 14:Is that like, you know, when an agent you know, a human can only keep like seven plus or minus three things in their head. Right? Like a phone number is about it. Right?
Speaker 2:That's generous.
Speaker 14:But yeah.
Speaker 1:I can keep hundreds hundreds of things, but yes, I understand
Speaker 14:That's very nice. Some of us are special. John, you're very special. And but a computer with an LLM, it can keep about three Harry Potter books in their head. And so That doesn't sound like person would say
Speaker 9:it that way.
Speaker 14:I mean, it's I mean, like a stack of
Speaker 1:better when you say like it it it can contain like 75 A million. Parrot ish problems or like some
Speaker 14:That's right.
Speaker 1:Complex math. Harry Potter and But like yes, I understand. The the the context window is is significant and and compared to a human.
Speaker 14:Yeah. And then when you think about like what most computer systems are, like, actually, you should think of like the Library of Alexandria.
Speaker 1:Yeah.
Speaker 14:Right? Like thousands of books, tens of maybe millions of books. Like actually, it's even bigger than that. It's like the whole Internet. Right?
Speaker 14:And then that's what like sort of like Karpathy's knowledge wikis are, people talking about company brains.
Speaker 1:Yeah.
Speaker 14:Like, you could basically take all of the relevant info about customers everything that you've ever any any person that like any one of the company's ever even met. Like, that's what a CRM is. Yeah. You can have that in like a 100,000 or a million markdown files that like comprises everything that that business is. Yeah.
Speaker 14:So that's basically what g Brain can do. Yeah.
Speaker 1:It's like People misunderstand that like YC has been building software to help batch participating companies for over a decade at this point, I Probably longer, maybe fifteen years. And so that is in
Speaker 14:the building that in.
Speaker 1:Yeah. Exactly.
Speaker 14:I mean, actually, I think, you know, now we have all these tools that are gonna be built directly into YC Bookface.
Speaker 1:So Yeah.
Speaker 14:You know, you're gonna wanna be a part of the community.
Speaker 1:Yeah. I've been seeing it's been getting better. Like, the the pace of the pace of software development on Bookface and YC's internal tools is accelerating. It's been Yeah. Refreshing to see that that it's people often have a window into it and they see like, oh, there's this demo, but there is an internal product that is evolving and getting better, which So is
Speaker 14:so the magic moment for is basically like being able to take any book that exists in your entire business and then making sure the three books that really matter for the thing you're trying to do are loaded. Yeah. And then that's basically ASI. You don't have to write software anymore. You can just straight up use Hermes Agent or OpenClaw plus this.
Speaker 14:I am trying to make it work with a Codex and Okay. You know, CoWork. But honestly, I think that those are like Hondas. And honestly, I mean, open man. Okay.
Speaker 14:It's still the Ferrari, but, you know.
Speaker 2:Open. Yeah. That's good.
Speaker 1:Yep. Very, very fun. What what are the trends that you're seeing in applications? Are applications increasing in the age of AI? More people wanting to do startups?
Speaker 1:Or are people coming from big tech?
Speaker 2:Applications as in like people
Speaker 1:Applications too wisely. People trying to start companies. Like feels like in all this anxiety of like big tech layoffs and stuff, like the flip side of that is that there's more entrepreneurial opportunity because we
Speaker 2:just pointing people to the YC website Yeah. When they're when they're maybe they're not a software developer and they decide to build their first app in the last six months Yep. Which there's been many. I'm just like, go follow this even if you're not gonna apply. Like, this is this is this is what works.
Speaker 14:Yeah. Did you see PG came out and said it? He's like, if you're nontechnical, just stop calling yourself that.
Speaker 1:Yeah.
Speaker 14:Because you should I mean, why why limit yourself, actually?
Speaker 1:I completely agree.
Speaker 14:I completely agree. I don't know. I think we're seeing
Speaker 1:Non technical was always like because obviously, like, it's not a binary. Like like, I learned Python and a little bit of c plus plus and I could, like, sort of deploy a website. But, like, I'm, like, levels below, like, a true, like, you know, incredible computer scientist who's, like, creating Python. And but I would just sort of like be like, yeah, okay. I'm technical because that's good, but it's like there's obviously levels to these things.
Speaker 1:And the more you can like, you know, get away from
Speaker 14:that If sit you sit in front of Cloud Code
Speaker 1:Yeah.
Speaker 14:I guarantee you you could fix some bugs in Python and submit a PR that would be accepted. Yeah. Everyone that wasn't true a year ago.
Speaker 2:Personally, I think John could solve continual learning.
Speaker 4:That would be great.
Speaker 14:You could do it. You just it's just a matter of will.
Speaker 1:I got a podcast to run. I'm I'm trying to be low agency, low taste right now.
Speaker 2:Low taste.
Speaker 1:Low taste. Anyway, thank you, Garry. Congratulations on demo day.
Speaker 2:Yeah. Great to see you. Catch up.
Speaker 1:We'll talk to you soon.
Speaker 14:Catch you guys.
Speaker 1:Have a
Speaker 2:good rest of your day.
Speaker 1:You see
Speaker 2:I like the all black.
Speaker 1:All black. I like the all black. He's looking good. Did you see the Rolex open a new boutique on the Swiss Alps in inside of a former telecommunications tower? It looks like a Modern Warfare two map.
Speaker 1:Look at this building. This is an incredible place to hold a boutique. I guess you have to hike up here. But look inside. This is a Rolex boutique.
Speaker 1:You go in there. They show you some watches. But this looks like Modern Warfare too.
Speaker 2:Carter says, imagine being told they have nothing in stock here. You both know very well they have watches in stock. Yes. What actual resort is it on?
Speaker 1:I don't know if this is a resort. I think this is a a telecommunications tower. But I gotta know more about this. We gotta we gotta get someone to call in from this particular boutique because this is an absolutely wild wild wild scene. But what a great like brand activation.
Speaker 1:It does have a Bond villain aura.
Speaker 2:Threads
Speaker 1:from here. Imagine posting threads. You know what? Every time Connor Hayes comes on the show, he's like, you guys don't post on threads. I posted twice about this interview.
Speaker 1:So Connor Hayes, get in here and tell us what's new with threads.
Speaker 10:What's up?
Speaker 1:What's up? Good to see you again.
Speaker 10:I'm doing great, man. Yeah. I do I appreciated the post today, John.
Speaker 1:I love it. I love it. We have been getting better. We've been posting a lot more on threads. We're having fun.
Speaker 1:And also, the the this is the weird thing is that, like, I think, and you'll tell me, but I think what's driving thread success and the growth is the differentiation. Like, I go there for car community. I go there for all sorts of different sub communities around TV shows and different things that aren't real it's not work for me when I'm there. When I'm on Yeah. X or YouTube or even Instagram now, my Instagram, my personal Instagram is just my personal brand, my work product, but threads has it's more fractured, but in a good way, if that makes sense.
Speaker 1:But you tell me, what's what's driving all the growth?
Speaker 2:First of all, can we just can we just hit the gong or I was billion.
Speaker 10:That was a big swing too.
Speaker 2:That was a big swing.
Speaker 1:It's a warm up swing. Big swing. Coming later in the show.
Speaker 10:Don't show it. So we announced 500,000,000 Huge. Monthlies today.
Speaker 1:Huge.
Speaker 10:Mean, the bit the John, I'll get to your to your question in a second, but the the other thing which I know we've talked in the past when I was on the show about growth coming from promoting the app in Facebook and Instagram. Yeah. You know, another thing that we were sharing today is the proportion of people that are coming to threads not from those promotions has been going up quite a bit in the last year, and that's been a big focus for us. And we're doing it while deepening engagement. So we're up like a 130% year over year on time spent in Japan, 80% year over year in Korea.
Speaker 10:Part of the playbook that we've been running is to pick these verticals and communities kind of one at a time Yeah. And just blitz them from a go to market perspective and a product perspective altogether. I'm sorry if you guys get background noise. I'm literally like at a team
Speaker 1:I love
Speaker 10:party for this right now.
Speaker 2:Huge. Amazing.
Speaker 1:So we got, you know,
Speaker 10:the entire threads team surrounding me while I'm talking.
Speaker 1:Non family of apps referral traffic, is that links being shared on the open web? Is that screenshots? Is that referral like invite your friend or share a link in a DM?
Speaker 10:Yeah. Often, actually, the initial new user install comes from those. And then what we try to do is get people to come back to the app without a promotion the second time or third time, etcetera.
Speaker 1:Got it.
Speaker 10:So that's been the thing that we we've been most successful at. And And that's just through like making the content better, getting you better connections in the app, launching messaging which sends you notifications when you get DMs, and just having good content based notifications too.
Speaker 2:Yep. Yeah. Every I've I've I've transitioned from someone maybe a year ago that would click over to threads when there was like was almost getting click baited by by something just like a a lurker because there's like Yeah.
Speaker 1:Good Oh, he's in the lurker category.
Speaker 2:I'm in the lurker category.
Speaker 10:Transition from a lurker
Speaker 2:to every every every reply guy starts as a lurker. Yeah. I have to build up I have to build up the the confidence to to move into that. But Yeah. No.
Speaker 2:It's been it's it's seriously impressive and and yeah. The car the car stuff is what I've been following most closely.
Speaker 1:Yeah. Yeah. Oh, that's so cool
Speaker 10:to hear. We've been doing a bunch with the f one too. I don't know if you guys are f one fans, but Yeah. We have this new feature called live chat. So we're trying to do like One of the things people love about Threads is they call it the Quiet app.
Speaker 10:Like you're in a world right now where you every single app you go to is like a sound on video feed.
Speaker 1:Yep.
Speaker 10:You go to Threads, you can just like quietly scroll, read things that are going on. One of the things that we're trying to do is make Threads the live second screen that is still quiet while you're watching something on TV. Yeah. So we had a, like, a q and a with Lewis Hamilton and Ferrari last week. There's, like, him and a bunch of fans in a chat that thousands of people can follow along with, react to the messages, asking questions.
Speaker 10:We've done this for NBA finals. So, yeah, it's it's we're we're just trying to be the best platform for public conversation and that just means we have to lean into these live events.
Speaker 2:Yeah. So it's you're basically taking like what's great about the chat on let's say like a Twitch livestream.
Speaker 1:Mhmm.
Speaker 2:Right? It's like this real time flow of information and ideas, but then making that, like disconnecting it effectively from the programming.
Speaker 10:Yep. Tie it to a live event and put like authoritative voices in charge of it. We were talking, John, I think a little while ago about how well we've done with reality TV. Yeah. I don't know if you guys are into the summerhouse lore, but that kind of like lives on threads
Speaker 2:right Mike Solana?
Speaker 1:I saw yeah. I saw Mike Solana on threads discussing some reality TV show. Maybe it was the the the traders or the is that the one where they play like Mafia? Yeah. There's a couple of these.
Speaker 1:And it's just so interesting when you bump into someone who you know in a different context, and they're on threads, and they're just, like like, they're sort of, like, wearing a different it's a more casual outfit, basically. And, like, the the the posture can be very political on other apps or very defensive or very aggressive, or maybe they're a particular influencer, and they're always, you know, this just killed this on LinkedIn, but then they come over to threads and they're just sort of just being a normal person in some ways, if that makes sense.
Speaker 10:It worked. I mean, it's it's I think a lot of it is just those people wanna wear that hat sometimes. Yeah. When you were talking about it, it was like your stuff too. Yeah.
Speaker 10:There's something very like human about building an app that's for conversation and leaning into that. And I think in a world where like increasingly so conversation is just very hard to have or the person isn't human Mhmm. You know, we're trying to make that the case on Thread. So that's fine.
Speaker 1:What what is the KPI culture like? Like because you're the Quiet app now. It's working. It seems great. But like it feels like there's gonna be a moment where it's like, okay.
Speaker 1:Well, let's a b test vertical endless scrolling video and it's gonna outperform and you're gonna be like, yeah. We're no longer the client app. We're actually just like the second Instagram and like and it just maths out. But like, it feels like that's not the mission. That's not the goal.
Speaker 1:But like, how how do how will this actually play out?
Speaker 10:I mean, I think that's that's the difference between metrics and goals. Okay. Like, it's the you know, the goal is for us to be the best app for public conversation. Yeah. I know that I could I could tomorrow pump time spent on threads by putting more video on the feed.
Speaker 10:Sure. But that wouldn't make us the best app for public conversation. So we try to find metrics that give us as best the possible proxy for that goal. Yeah. And a lot of times actually it is like how much is their back and forth reply happening on a top level post.
Speaker 1:Yeah.
Speaker 10:You know, in terms of growth, the the the main KPI that the team works on is what we call threads driven now. It's like people that are coming back not because they saw a promotion. Sure. So my, you know, my job is to, like, set those goals, give them the best incentives possible, then but just know that the metrics are gonna be imperfect. And sometimes I need to, like, come in and, you know, make a strategic decision to do something that might be against the metric, like, your point with vertical video.
Speaker 10:We're not gonna do we're not gonna do a vertical video tab in threads. Like, that's not part of the plan.
Speaker 1:It's gonna be a horizontal video. You will turn your phone to see and it will be the entire Lord of Rings extended edition. We're getting ten hours. It's gonna be Yeah.
Speaker 10:Nineteen ninety six NBA finals game four front to back.
Speaker 1:We will
Speaker 2:How how how do you think about building your own kind of culture within Meta? Like, is that is that a thing? Is that something that's encouraged? Or is it or or is it like, you know, all big, you know, one big team? Or are there do you guys like do you guys have like a nickname for for people working on threads?
Speaker 2:Like They're
Speaker 1:not metamase, they're threaders.
Speaker 10:Threads. Okay.
Speaker 2:Threads.
Speaker 10:We we have a very unique culture. I mean, I I think like all good cultures, it kind of like happened on its own based on the people that were excited to work on the app. Because I think if you're coming to work on threads, you want to be on a smaller scrappier team. You probably care a lot about culture and, you know, pop culture and the types of things that we spend our time on. We just had, you know, actually, a team of people in here talking about, like, how we do that.
Speaker 10:So I would say it's encouraged in as much as you're, like, building value around the culture, but, like, it's really important for us to not build the culture around the idea that we're different and special because we get so much value from being at Instagram and Meta. Like Yeah. All of the infrastructure that we use, all of the integrity teams that we leverage, the monetization that we do comes from an ad seamless inside Instagram. And so it's like you're trying to strike this balance between making sure people feel like they identify with the app and the stuff that we're doing, but appreciate, you know, being inside the bigger company where we just get so much value.
Speaker 1:Instagram Pro recently want launched $3.99 a month, I believe, for some pro premium features. I upgraded in instantly. Some fun details I haven't
Speaker 10:even dug into. He's viewing your story twice.
Speaker 1:Oh, yeah. That's one of the features that they show. I like the fact I don't post on my story that often. I like the fact that I can extend it to forty eight hours because I'm not a daily story person. I'm only sharing, like, news about the show on there when someone else tags me.
Speaker 1:And so just extending it a little longer, that felt like a valuable feature. But are you looking to that for premium subscriptions there? Are you more focused on the ad product on on the monetization side? Like, because it's a new surface area. It's sort of unexplored.
Speaker 1:Where do you want all that to go?
Speaker 10:More focused on ads. Like, we're we're not currently working on
Speaker 1:Thank you.
Speaker 10:Threads as a part of the meta subscription. We love that. That's a really good high margin business.
Speaker 1:I I completely agree. No. I I I like the subscription too, but I see it as a yes and for sure. Yeah. Because the ad business should be so good.
Speaker 10:I think if threads gets big enough and and we have good offerings to people for something like a subscription, why not? But Yeah. It's not something we're working on right now.
Speaker 1:Yeah.
Speaker 10:We did we launched ads globally four months ago and have just been like slowly scaling it in line with the engagement going up, you know, just trying to be careful about it.
Speaker 2:Yeah. Yeah. What what is different about a conversational or kind of a news driven platform like threads Yeah. Like acts versus like a more passive product like, you know
Speaker 1:People say lean forward
Speaker 2:versus lean back. Question is like the like the question that people have always had with Twitter and X is like, why wasn't the ad product like amazing for Yeah. Advertisers? Why did it never really maybe scale to
Speaker 1:Like was it an ad matching problem or was it a behavioral problem?
Speaker 2:There's been this like, you know, the audience on Twitter historically was like so valuable. Yeah. The user base was always smaller but, know, some of the most important people in the world are on there as like their primary
Speaker 1:Yeah.
Speaker 2:You know, application. And so the big question was, like, why was it never a great ads business? Do you have any theories? Like, you know, one, you could Mhmm. Say it was execution
Speaker 1:I get
Speaker 2:or I could say that.
Speaker 1:I won't You could you could not Connor
Speaker 2:Hayes says
Speaker 1:Connor Hayes doesn't disagree with Journey.
Speaker 10:He sat silently. Yeah. I don't think it's the format because, you know, we know from years and years of experience. I mean, think about Facebook ads before the app was so video centric. That feed format is kinda similar to what you have in like a Threads or an X today.
Speaker 10:Yeah. And that was one of the most efficiently monetized surfaces ever in the history of technology. So I'm pretty confident that we'll be able to get the ads. I'm pretty confident that we'll be able to to get Threads ads into a a really good place there. The other thing that matters is, you know, you obviously, it's like how much attention are people paying to the content that they see in a feed, but also how much content do they view.
Speaker 10:Like, the more shots you have to show them something relevant, the better you're gonna do. So you're gonna monetize more effectively if people are viewing a 100 things a day versus 50 things a day. Mhmm. So, you know, to your point on KPIs, John, like, one of the big ones that our team has is just like, how many impressions of content do people have in the app? Yeah.
Speaker 10:And then we try to make that as deep as possible by giving them more relevant stuff. And eventually, some percentage of those will just be ads that hopefully are really good as they come from the Instagram and Facebook ad in. Like, advertisers can just opt in to their demand going to our surface. It's a checkbox in the flow where they create all the IG and Facebook stuff. So I don't know.
Speaker 10:I think we're set up for that to do pretty well, but we're just, again, trying to be careful and not scale it too quickly while we're still making the products great. It's been under three years at this point. So I think sometimes people lose sight of the fact that we're still a bit of a young app in the in the ecosystem.
Speaker 2:Totally.
Speaker 1:Will AI generated ads be more difficult to crack on threads? I'm thinking that if I'm on Instagram and I have, you know, maybe it's Manus or some MSI or MSL like agent that can go take screenshots from my website, reinstantiate them, and put that in an Instagram flow. Like, you're showing me the product. Job maybe finished might convert well. But if I'm advertising advertising on on threads threads and I need a really punchy hook and I actually need to think about like a 140, 280 characters that are really, really high skill ceiling type writing, that historically has been hard and that's why like brands come off as, like, cringey often on these short text based mediums.
Speaker 1:And I'm wondering, even though we have all this crazy acceleration in AI, I haven't followed an account where I'm like, oh, yeah. Like, this model is really good at writing tweets or posts that are a 180 characters. They're honestly better
Speaker 10:than deep research. Keeps us Yeah. That's part of what keeps us us popular, I think. Yeah. You know?
Speaker 10:Like, if there's especially when you're optimizing for conversation, it's at least right now, humans are pretty good at telling when they're conversing with another human. And also there's a lot of metadata. Right? They have a profile. They have a username.
Speaker 10:They might be verified. I think for ad creative, you know, on on the organic side, posts with photos in them do really well on threads. It's a pretty high percentage of the our top performing content. I think it's probably similar on x. And so my sense is that as AI generated ads get more prevalent, it'll probably be through the image pass more than the the text path.
Speaker 1:Sure.
Speaker 10:And I don't know. I I'm not pulling off of any data besides personal experience on this, but, you know, usually for me, the image is the hook when I'm thinking about buying something or getting, you know, more fond of a brand. Obviously, the content matters at some point, but I think the image is gonna be what pull people in.
Speaker 2:Jordy? How how much do you think about what Starlink will do to global connectivity? There's a bunch of people that don't have Internet today that are gonna have, like, reliable, fast Internet over the next ten years, people coming onto the Internet for the first time. Is that something that you're thinking about, or is there just enough people that haven't tried the app yet that that are that are obviously taking more of the focus?
Speaker 10:I think probably more of the latter. Like, we're we're not at the point with growing threads where we're worried about, you know, lacking more opportunity at the top of the funnel for people that are already online or maybe even already online and using similar services. The other thing is we tend to be pretty market focused. Like, we like I was mentioning before, have been really focused on Southeast Asia. Japan, Korea are two of the biggest ad markets in the world.
Speaker 10:We are very US focused. And so in these early stages, I think it's actually really easy, especially if you track a top line global number, to see that go up, but not actually build an app that's, like, meaningful and makes sense as a big part of people's lives every day in a country. So I look at success more as, like, tipping individual countries into threads being the app of record for public public conversation. Right now, that's starting to happen in Southeast Asia, and then The US is our our biggest focus outside of that. So from that lens, I I think in those countries, the connectivity is quite high at this point, so we we worry less about that opportunity.
Speaker 1:What's the plan to get at Connor on threads? You got an underscore sitting there. How did you get sniped? You're the head of threads.
Speaker 10:Craziest part about this is the, the Connor is an Instagram employee, I think, where he was at some point. Yeah.
Speaker 1:So he's locked down. Wow. Johnny come late late on our platform. Yeah. That's hilarious.
Speaker 2:It's over. It's over. You're never getting it.
Speaker 1:Walk me through walk me through the process of spinning out spinning up a little like I don't know if you call them like micro features or something. Like the a year ago, you launched sort of like disappearing ink text, sort of glows Oh, spoilers. Yeah. Spoilers. And these little features are they seem so simple.
Speaker 1:They're probably getting easier to build because of AI tooling. But at the same time, like, your code base can be kind of a mess. 25 people wanna do different things with text at the same time. Like, how do you think about those? What's the importance of that in terms of the growth?
Speaker 10:So we we have actually, like, done a bunch of work to get the process on this right. Mhmm. I think, like, social products often you know, there's so much work that is just, like, getting the details right, executing well. But there's a bunch of work that's just like a hits business. Like Yeah.
Speaker 10:You know, look at Instagram, getting Instants to work. It's just you gotta take a bunch of shots on goal with small creative teams. So a lot of the stuff that you see in the app that feels like a little bit more fun, the music attachment feature we did, animated stickers
Speaker 1:Mhmm.
Speaker 10:These are like pods of three or four, you know, technical but creative people that we just give a bunch of space to. We talk to them, like, once a week or once every two weeks about the ideas they have, give a bit of feedback, and then they've just been coming up with hits. So the way that and and your point about AI making that easier is true. I mean, they the I think one of the fun things that we've seen is that design talent has been getting more technical Sure. Which has made these things easier to build.
Speaker 10:Yeah. So whereas in the past, you would have two people sparring over how to build a feature, now the really creative designer with great taste can actually develop the thing on their own.
Speaker 1:That makes a ton of sense. Well, congratulations on hitting 500,000,000 monthly active users.
Speaker 2:Fantastic. 500,000,000,000 soon. 500,000,000,000 soon.
Speaker 10:Hey. With Starlink, you never know.
Speaker 1:Economic imperative. Solve the fertility crisis because we need more users, and that's the fastest way to get more. Everyone should be having 10 the 10 child policy rolled out globally. Yeah. For Threads.
Speaker 2:Great to see you, Connor. Congrats to the whole team.
Speaker 6:Thank you.
Speaker 1:We'll talk to soon. See you
Speaker 8:the update.
Speaker 2:Great work.
Speaker 1:Have a good one. Incredible. AI futures does it again. This is a post from Bronson Shalin. It says mid twenty twenty six, France wakes up.
Speaker 1:Europe's leading lab releases, their latest open source frontier model. It's state of the art. The US and China scramble wildly to catch up. The mainstream narrative around AI has changed from maybe the hypo blow over to a guess this is the next big thing. The US enters talks with France to hopefully gain access but without much success.
Speaker 1:I like a little twist on the China wakes up from AI twenty twenty seven. A funny copy pasta at this point, but still, again, congrats to Mistral on launching Le Chateau Fat.
Speaker 2:This is important before we're joined by author
Speaker 1:What's this?
Speaker 2:Luke Burgis. We have a safety alert Okay. From the US embassy in the South. Mhmm. Ambassador Herschel Walker has an important message for American visiting The Bahamas.
Speaker 2:Ski jet ski rentals pose a serious risk of injury death and death. US government employees are banned from renting them. That's how serious they are.
Speaker 1:Wow.
Speaker 2:And you should avoid them too. Really taking shots at the jet jet ski industrial
Speaker 1:A lot of people were surprised to see Herschel Walker. He's a famous football running back. This is how they found out that he is in fact the ambassador.
Speaker 2:But fun story. I is the risk worth it?
Speaker 1:Jet ski? I don't know.
Speaker 2:Are you a big jet ski guy?
Speaker 1:No. Not really. I'm fine. I prefer scuba if I'm on the water.
Speaker 2:Every every time every time I'm on a jet ski, euphoria.
Speaker 1:Good.
Speaker 2:You like it? It's yeah. It's it's incredible.
Speaker 1:They're fun.
Speaker 2:Under I think there's I think they're underrated.
Speaker 1:For them.
Speaker 2:I think they're underrated.
Speaker 1:They feel like very highly rated.
Speaker 2:No. I mean, highly rated but but are people organizing their life around jet skiing at scale?
Speaker 1:It is nice that it's sort of the experience of a motorcycle with a lot lower stakes. Right?
Speaker 2:Gold Rock says jet skis and vibe coating are a golden combo.
Speaker 1:Yeah. Anyway, let me tell you about Cisco. Critical infrastructure for the AI era. Unlocks seamless real time experiences and new value with Cisco. Our next guest is the author of The One and the 99 Forging Identity in the Age of Social Contagion.
Speaker 1:Ben, welcome to the show. How are you doing?
Speaker 11:Hey. What's up, guys?
Speaker 2:What do you think about Jetskis? Gotta start there.
Speaker 10:We gotta start with Jetskis.
Speaker 11:As as one who spends his summer literally on Lake Michigan, I'm offended by that warning, big time.
Speaker 1:Oh, Jetskis. You love Jetskis. Need to generate
Speaker 11:some positive mimetic desire for skis. Okay.
Speaker 1:Here we
Speaker 2:go. See? Yes. I got it. I think they're still underrated relative to buy one, though.
Speaker 11:Rent them. Buying a jet ski is idiotic. Rent.
Speaker 10:Rent.
Speaker 1:Okay. $50. Wait. Wait. Wait.
Speaker 1:Why? I feel like I feel like when people say don't buy, they say don't buy the boat because the boat requires so much maintenance. Feels like the jet ski, you just pull it out of the water. It's not it's gonna dry out. It's not gonna need a million dollars in maintenance of
Speaker 2:It's your like a boat. It's like a boat.
Speaker 11:I mean, it's just what everybody it's still a relatively large piece of equipment that I don't want in my garage.
Speaker 1:I guess I guess you don't want own it because you're probably not organizing your life around jet skiing. But if you are and you're gonna be jet skiing two hundred, two hundred and fifty days a year, three hundred days a year, then you might want to own. I
Speaker 2:reckless criticism of Malibu Yeah. Is like lack of jet ski launch points. Okay. Like it's makes it makes it like it's it's good for the natural environment that there aren't, but it's tough to be
Speaker 1:You catapult from the bluffs to just be launching straight in.
Speaker 2:Anyway, more important. Let's talk about book.
Speaker 1:Give us the thesis. But first, I mean, can you explain what you mean by social contagion? What are some examples why that phrase?
Speaker 11:Yeah. Mean, well, first of all, my the book that I wrote four years ago was about memetic desire. So I want to congratulate both of you for doing more than anybody in the history of media to generate memetic desire by talking about founders and who's investing and who and the size of exits. I don't know if you
Speaker 1:Yeah. The Gong.
Speaker 11:Built your business that way, but in the Gong. So you literally are a memetic machine.
Speaker 1:I did work at Founders Fund so maybe some of it rubbed off. Who knows?
Speaker 2:Yeah. The the the, you know, people ask us like, you know, how do we book so many guests and and early on we saw a pretty extreme flywheel. Right? It's like people see someone they know or someone they like or a company they like and then it just created this really crazy flywheel. And now it's been for the last, you know, year and a half, it's been more about like managing
Speaker 1:Perpetual motion machine.
Speaker 2:That's right. Basically. Yeah. Yeah. Yeah.
Speaker 1:Take us through it.
Speaker 11:So this this book, mean, in Wonton, I had one job. And my job I think was to explain the ideas of this obscure French thinker in an accessible way to the world at like an eighth grade reading level. And I think I did my job. Mhmm. But it meant that I I had one thing to do and there was a lot of things that didn't make it into the book unless my publisher was you'd be very mad if I wrote a, you know, 600 page book.
Speaker 11:So I took that, all the things that didn't make it into that book and I applied some of the ideas of mimesis and mimetic desire to the family, to the education system, to technology, to politics, and to religion. Right? And one of the most interesting things about and what is social contagion you asked me? Social contagion is just the unconscious way that we catch the desires of other people, the ideas and beliefs and emotions of others, and we integrate them into our sense of self and the way that we move through the world without really realizing that we caught these things from other people. It the most important one.
Speaker 1:Yeah. Is contagion bad? Because it feels like contagious. It feels like I caught a cold or a flu. It feels like a negative negative twist on mimetic desire.
Speaker 1:Desire feels like something that could take you in a bad place but also could be good. And just this idea of of pulling something you want what someone else wants, like that can be good. Someone else wants to go to the gym, be healthy, do something like you want to do that too, that's probably fine. But contagion feels like it's memetic desire but only in the negative. Is that the way I should be thinking about it?
Speaker 11:No. No. No. I mean, I'm very clear in the book like there's there's such a thing as good contagion. Okay.
Speaker 11:There's there's things the desires that I want to catch. Right? Yeah. Like if I want to be more ambitious and take more risk, maybe I should move to Silicon Valley.
Speaker 1:Right? Yeah. Yeah.
Speaker 11:So I think there's there's definitely good good contagions out there.
Speaker 2:So it's not all jazz. More, maybe you move to The Bahamas.
Speaker 11:You wanna you you move to The Bahamas. Right?
Speaker 1:Or or
Speaker 11:get Move move next Yeah. Door Yeah. Totally. So and one of the interesting things about AI or Mhmm. In in the book is I'm wondering if it's actually contributing to Contagion and Mimesis in a way that we don't fully understand.
Speaker 11:Right? Like it's did you guys see that Tim Ferriss blog about what what's happening to his non fiction books?
Speaker 1:Yes. Right? I know exactly what
Speaker 11:you're talking about. Yeah. Like he had an 80% drop in sales of his book. Yep. And it coincided with like 2022 when ChatGPT came out.
Speaker 11:And he's saying like, why would somebody read prescriptive how to non fiction when they can go to, you know, ChatGPT or a chatbot and ask, well, here's my life. Here are all the things that are going on for me. Apply like, what should I do? And by the way, like summarize Tim Ferriss' book Yeah. And make it highly personalized for me.
Speaker 11:Like, why would you read the book? Yeah. You get instantaneous, highly personalized customized advice. So I I wonder though if that is actually going to lead to a form of contagion that we don't even understand because there's something happening in in in the AI. Even the engineers don't fully understand what it's doing, and it's giving us back something that feels really personalized to us.
Speaker 11:But the inputs are obviously being drawn by what, you know, large language models and what other people are putting into it. So I wonder if it's we're entering like a pluribus, you know, the the Apple show kind of situation where the AI is actually, whilst seeming highly personalized, it's actually sort of contributing to some form of social contagion.
Speaker 1:Yeah. I feel like we are in the sort of like we're just starting to diagnose the social contagion that breeds on social media. And we're just starting to understand the effects of what seeing certain videos or political biases or even memetics just like you see a sports car and you want a sports car and that changes your perception of things. And with AI, it feels like we're in this unknown unknown period where it could it could wind up creating more of the pluribus. It also could wind up being more personal and so everyone sort of goes into their own world.
Speaker 1:There's this weird stat where, like, the I think it's like over 50% of high school students are a super fan of some creator that none of their friends know about. And so they are in this like niche Internet micro celebrity world, Nim sells, where they know everything about this one Instagram or this one TikTok or this one YouTuber's life, their repertoire, their whole catalog of work. And they talk to their friends and they're like, no, I've never heard of, you know, Markiplier or whoever is like their choice or you're you're a Doug DeMuro fan and you run into a car fan and they're like, I've never heard of Doug DeMuro because you're in this like niche world. And, but at the same time you do have this like, you know, like ideas do spread extremely quickly and we're just starting to diagnose that and with AI it's somewhat similar where, but potentially even more removed because you might be getting fed Tim Ferriss insights but it's sanitized of Tim Ferriss' name and so it feels like it's
Speaker 9:Yeah.
Speaker 1:Personalized to you but you're actually doing what everyone else who's asking the same question is. It's very hard to diagnose. It's very hard to track the actual outputs. What do you look for in the book in terms of like just level setting on like how things are going in America, the state of things, whether we're on the uptrend or downtrend on a particular category or even just like the level of mimesis. That's something that I can't really I don't have an economic factor for.
Speaker 1:I can't trace it to GDP or or incomes or anything like that.
Speaker 11:Yeah. I mean, it's it seems like the book is basically about the relationship between the self and groups in various communities, right? And to what extent can we be in something without becoming completely of it? Whether that's a political party or a city Yeah. You know.
Speaker 11:If I live in, you know, Vegas, which I did, there are certain things that I really like about living in Vegas, but there's other parts of Las Vegas that I don't want to, you know, permeate me. Sure. So it's like how how do we be part of something and take the best from it and give our best without without it completely forming us and determining everything about us. So when it comes to the state of The US, I mean, I'm finding that maybe it's because of social isolation, but I'm finding people over identifying with various communities, whether it's like, you know, national level politics. Yeah.
Speaker 11:It seems like when people don't have like a solid sense of self, which is a term that I use throughout the book, like a solid sense of self as opposed to a pseudo self that is constantly adapting to expectations and conforming as we walk into different rooms and move to different cities. It's kind of the malleable version of ourselves. It seems like, you know, to the extent that people don't have a solid sense of self, they're much more likely to be sort of liable to capture by the first group party, whatever company that comes to them and tells them how special they are. And I I, you know, I I sort of noticed this over identification. Right?
Speaker 11:That worries me quite a bit. And it's like groups want everything from us. They want complete loyalty, which, you know, like right from the very beginning. Right? It'd be like meeting a girl at the bar and like, you know, she's asking for, you know, a full commitment right in the beginning or else you don't love me kind of a thing.
Speaker 11:It's like, no. We actually need to take time to like test things and get to know each other. And it's probably not a good thing to completely identify. We we like to situate people and people like to situate us. And some people own those labels and some people are kind of repelled by those labels.
Speaker 11:So the book is kind of looking at identity and the way that we how easy it is to situate people and how we can become, you know, how can we become a little bit immune from being overly situated ourselves. And the most interesting people to me, I don't know, like a like a Taleb kind of a figure, are those people that are really difficult to situate, like, politically, that you never quite know what they're gonna say. They're the most interesting people for me to follow.
Speaker 1:Yeah. Renaissance man maxing. What do you think is the maxer culture? Because that feels like the so in in many ways, like, the worst case scenario of what you're describing where whether it's looks maxing or fitness maxing or whatever maxing you're doing, it's like everything else about the identity has to go by the wayside. And we saw this very interesting clip with Clavicular, the the popular looks maxer where they ask him about politics.
Speaker 1:And he doesn't even have a read on any politics whatsoever because it's completely irrelevant to what he actually cares about which is just looks. And it feels like there's the inverse of that which is someone who's politics maxing or left wing maxing or right wing maxing, and they don't have an opinion about anything outside of their political domain. And if you ask them about health, they would have to toe their particular party line. And that it feels like in the competitive sphere, maybe that's something that's going on with maxing. But how have you been processing that that trend of maxing?
Speaker 11:Yeah. Yeah. My my colleague and friend Jordan Castro did a whole thing on clavicular. He who you've seen on the show and Yeah.
Speaker 1:He's great.
Speaker 11:Which is worth watching. I I mean, my book is is an anti maxing book and I think maxing is evidence of exactly what I'm talking about. Because when you max anything, like what are you giving up in order to do that? Like you can't max everything. Right?
Speaker 11:Yeah. So I'm I'm pro like max ing in my marriage. I'm pro maxing love. Yeah. But apart from those things, like there's really nothing that I want to max because it turns me into an individual that I mean, what's interesting to me is that there's some people that just max one thing and then they get exhausted and then they just look for another thing to max.
Speaker 11:Yeah. And that was me throughout my twenties. Right? I was maxing on a company so hard that I didn't even and I didn't even like it. Right?
Speaker 11:Yeah. And I would get bored with it and then move on and start another one and max on that one. It's like maxing cannot be an end
Speaker 2:of I I went through this with with health. Like, there was a period of my life in college where I would I it felt like 80% of my attention and energy was just going towards being healthy. And I eventually got to the point where I was like, okay, the point of at least for me, the point of being healthy is so that I have energy to do other things and I and I can feel good day to day, hopefully live a long time. And I just went from the I I went from like 80% down to like 10%. And I probably got a little bit less healthy, but it just freed up all this energy to do other things.
Speaker 2:But the benefit of going through that maxing period is I learned like a lifetime's worth that I now still get the benefits of. That's part of what probably keeps me higher from a health standpoint than my than my previous baseline. So I would say for me it's like going through periods of obsession has been healthy, but it's like how do you how do you remove your how do you eventually figure out the time to remove yourself?
Speaker 1:So it's fun to grind, but you don't wanna get lost in the sauce.
Speaker 11:Periods of obsession is the is the keyword there. Right? Periods of obsession. I don't know if anybody's done some kind of empirical research study on this, but I would guess that a very low proportion of hardcore maxers have children. So you know what I mean?
Speaker 11:No. Know. I That's been a game changer
Speaker 1:for me. Instinctually, I I think everyone agrees with you. It makes a lot
Speaker 2:of you had to turn your book into a a Tim Ferriss style self help book that would then be summarized by an LLM, what would the output say?
Speaker 11:Well, it's not a prescriptive how to book, first of all. I believe the alternative if it were.
Speaker 2:No. But but but to me like periods of obsession Periods of not getting lost in obsession.
Speaker 1:Well, maxing and Renaissance man I
Speaker 11:mean, would it would probably tell you know, I think that we're really bad at leisure and especially like ambitious entrepreneurs and founders and I've been one for most of my life. So one of the things that it would probably tell people to do is actually think of leisure as a skill that you actually have to get good at. I suck it. I remember being on a beach in Thailand when I was starting in one of my companies and I could not rest, I could not sit still, I could not have any fun at all. So one of the things that we do at the Clooney Institute which Jordan and I run together is we quite literally offer really busy founders and people the opportunity to come on like humanities retreats and chill out for a couple of days and think about the human person and think about important questions with the promise that they're gonna go back refreshed and with a better sense of what they actually want.
Speaker 11:Might wanna max out on for a couple of days actually. Like like leisure is not a is not a popular thing to talk about in in this world, but, you know, learning to do it well has been one of the most important innovations in my life.
Speaker 1:All ties back to the jet ski. I do my best thinking on
Speaker 2:the jet ski. Yeah.
Speaker 1:You gotta be able to turn off. It is really, really hard. Where do you stand on, on digital detoxes, dumb phones, black and white screens, those sort of like dopamine, like dopamine fasting little mini techniques that people like. Sometimes they can go they can become their own their own pursuit and their own obsession. But where do you stand on all that?
Speaker 1:Like, what what is the secret to, like, unplugging, I guess?
Speaker 2:Yeah. I mean,
Speaker 11:I think you've gotta know yourself. The micro mini little tools have never worked for me because I'm I guess I'm like an all or nothing kinda guy. So I have to, like, go hike the community Santiago for thirty days to to witness any change whatsoever. Right? For better or worse.
Speaker 1:That's just
Speaker 10:like the kind of
Speaker 11:guy I am. If there's like some incremental n plus one change Yeah. That I'm making to, like, you know, I don't know, the background of my screen, it doesn't do anything for me. So, like, but to each to each his own on that
Speaker 7:stuff. Well,
Speaker 1:thank you so much for coming on the show. The book
Speaker 2:Thanks for sending
Speaker 1:is The One and the 99. Go pick it up wherever books are sold. Thank you, Ben, for coming on the show.
Speaker 2:Again soon.
Speaker 1:We gotta do this again soon. This is a really great conversation. We'll talk to you soon. Have a good rest of your day. And let me tell you about Shopify.
Speaker 1:Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents. And without further ado Speaking of agents. Our final guest of the show, Amda Greshka from Notch. He's co founder and CEO, Anda.
Speaker 2:What's going on?
Speaker 1:Welcome to the show. How are you doing? Great to see you.
Speaker 15:Hey, guys. I'm good. Good to see you too, Jordy. Good to meet you, John.
Speaker 1:Good to meet you.
Speaker 2:It's an honor to have you on the show on a big day. Thank
Speaker 1:the news. But for first, introduce yourself for everyone. Introduce the company a little bit.
Speaker 15:Yeah. Thank you. Hey, guys. My name is Anda. I'm the cofounder and CEO of Notch.
Speaker 15:Notch has been the leading digital intelligence and optimization platform for Fortune 500 brands for the past six years or so. And our news today coming live to you from the Guggenheim, actually
Speaker 1:The Guggenheim.
Speaker 15:Where we've taken over the Guggenheim for the day is that we just announced ACE, which is infrastructure that makes websites convert both humans and agents.
Speaker 1:Okay. So what what is the what what was the first big client that you brought on board, the first big logo? What did you actually try and move the needle for them? How much of that is focused on ecommerce conversion versus brand building, broadly marketing? Like, how where's the surface area of the impact of the product?
Speaker 15:So when we started going to market, we actually moved from Silicon Valley to New York, with my cofounder, and some of our first clients were the biggest banks. They still are. If you can think of the biggest bank in the in the world, they're our client. Our surface area of your impact look. We we track our audiences journey through digital experiences, and we help brands understand what's resonating with these audiences, what's not, and how they can ultimately gain more customers by making better content and better digital experiences.
Speaker 2:With with Ace, this feels like a product that people have realized that they need really acutely over the last year. We had Matthew Prince on. I believe it was maybe the middle of last week and he had recently shared that there's more web traffic from agents now than humans. That flip came even faster than he was expecting. And so now there's a bunch of Fortune 500s that you guys are working with that are kind of waking up to this, realizing that they need a solution.
Speaker 2:But I guess talk about kind of the origin of the new product.
Speaker 15:What we saw across the biggest Web sites in the world, which we measure with Notch, what we saw was the same thing. There were more agents starting to come to Web sites than humans. And about a year ago, every single CMO became obsessed with GEO or AEO, which is how do I make my Web site readable to agents. But, ultimately, LLMs cannot be gamified. And the tricks of GEO, which is publish another 100 blog posts and 10 other product FAQ pages and whatever, it ended up really destroying the human experience.
Speaker 15:So in the last six months, we've actually seen crazy high immediate bounce rates. Like, human beings that actually arrive to websites are getting a horrible experience because they're presented with this agent ready, agent first content. So Ace, the origin story was really how do we build a system that can personalize for each of these audiences without taking away from the experience of the other?
Speaker 2:And that's making the agent side invisible to humans and and vice versa? Like, how how does it actually work?
Speaker 15:Yeah. So let me tell you how it works. So ACE is first of all, we have to ingest all of a brand's knowledge from currently, it's sitting in silos. The web site is just one area where that knowledge exists. We ingest that knowledge alongside brand guidelines, governance, etcetera.
Speaker 15:That knowledge gets vectorized and atomized, and then it gets semantically tagged. This step is really important because what you want is to enable both the humans and the agents to retrieve this information through natural language. Then we start to reassemble the information based on implicit inputs. Like, these are kind of the data signals that we've been capturing through Notch for the past six years, And that reassembly enables for a really personalized human experience as well as a person agent experience. So, for example, I'm a mom.
Speaker 15:I've been looking for an electric car that doesn't look like a mom van, and I've been doing my research in LLMs. And I know nothing about cars, unlike my husband. And so I type in electric car that doesn't look like Mom Van, and it's telling me to go to, you know, gm.com, rivin.com, etcetera. When I get to that website, which I will still go on because I want to validate the information, I wanna see, like, is this brand the brand that represents me, what I get is really static, really generic, essentially a dumb website that doesn't actually speak to me. And so it's a very jarring difference.
Speaker 15:And LLMs have really conditioned us to expect conversational experiences and the ability to really command these experiences through semantic intent. So what we've built with ACE is the ability to give GM the, capacity to allow people to just copy paste their research from an LLM, put it on the site, or just simply say, I'm here to, you know, find an electric car that doesn't look like a mom van. And then the site reassembles with dynamic atoms in response to what you just said. So the whole website comes to the to the homepage. There's no more pages.
Speaker 15:It's really just dynamic reassembly based on your semantic input. When an agent shows up, the same thing happens. It's the same knowledge base. It's just visualized differently. It's a different modality.
Speaker 15:It's really just code.
Speaker 2:Very cool. Yeah. There's so many people talking about like generative software, software that's created on the fly. But forgetting that like websites in their current form mostly have just been like effectively digital catalogs Mhmm. That are kind of there's just one one version of it.
Speaker 2:But that's very cool. I wonder Yeah. The the idea of like, you know, it it And that's that's like I've In some ways, I've like stopped going to a lot of websites because I know it's easier to get the information that I really want. But the thing is like then the brand is losing like full control over how they're being displayed. Maybe they wanna be showing like images at different points that and and obviously, the the the chat app or whatever consumer's using is, you know, they don't have any control over kind of that whole service area, which is rough.
Speaker 15:Yeah. They really don't. I think the website as we know it to date is definitely dead. I think we have to replace the word too. Like, I'm I'm starting to play with knowledge site because I think what really matters in tomorrow's world, whether or not humans still come to your experience.
Speaker 15:Right? What matters is that you have that knowledge in a knowledge base that can speak to agents. Right now, what brands are doing is they're just cramming a bunch of crappy content into the same website, and it's not personalized for humans, and it's not personalized for agents. And so the experience, of course, is going to turn people off and people are going to stop going to websites. So we've got to enter a new era where websites are dead and long lived a knowledge site.
Speaker 1:What's the long term Oh,
Speaker 2:yeah. No, my immediate thought is like you want the want like the source of truth Mhmm. And then you want to be able to effectively just prompt the, and be able to get the information that only matters to you. But what were you gonna say, John?
Speaker 1:I was gonna ask about, just the the obviously, you've seen a ton of success in the enterprise. Are you thinking about going down market? How do you think about that? What are the decisions that would lead you to work with smaller companies? Or is there just so much valuable so much value in such a unique problem in the enterprise that that's where the company will be firmly placed for the long term.
Speaker 15:We're gonna go everywhere, John. We have big ambitions. I think this product that we built can serve everyone. And actually, if you go to our website, it's running on ACE now, and we've built it in the past forty eight hours because, you know, we're a startup, so we leave things last minute. If you go to our website and start start prompting it, I'm sure, like, I just said this, and so many people are gonna go try to break it.
Speaker 15:So, you know, knock yourself out and send us feedback if you manage. But, yeah, I believe that any company needs to have a knowledge base that's accessible, by agents that they can control and maintain in a really structured, governed way. Mhmm. I also believe humans are not going away. Like, every time there's been a new tech trend, whether it's social media or something else, we've always been like, guys, this is it.
Speaker 15:All we need is a Facebook page. I don't I don't believe in zero click marketing. I believe humans like choice. I believe especially for high purchase high high intent purchases, we really like to do our research. And so I believe websites are going to be around because it's kind of a yes and situation with marketing.
Speaker 15:It's always LLMs are just another channel ready to optimize for.
Speaker 2:Yeah. I just went to notch.com, as you said, and tried it. And very cool to have the the bar on the bottom. You can just and then and then they basically just creates a section that's just like effectively generating whatever information you want which is like John's talked about this before like ramp, you know, who we work with. Like, it's nice to have access to language models within the application.
Speaker 2:Right? You don't Sometimes you wanna take it Totally. You know, back to your preferred agent. But having intelligence where you are already makes a lot of sense and I and I wouldn't be surprised if this is like, you know, hopefully you guys capture as much value as possible with this like new paradigm, but I'm sure a lot of other people will will happily follow suit.
Speaker 15:Yeah. Well, Jordy, I think there's actually a great use case for TBPN as well. So if you guys wanna be customers, I'm I'm all ears. Mean, you guys created so much great content and you're truncating it in a really great way, making it accessible
Speaker 1:Yeah.
Speaker 15:In a way that enables you guys to, you know, just give people the information they really came there for would be cool too. So Yeah. Let's talk.
Speaker 1:Totally transcript. Let's do it. I love it. Well, thank you so much. So great to finally have you on
Speaker 2:k. The
Speaker 1:Go check it out and get the demo today. Thank you so Thank much coming
Speaker 15:you guys.
Speaker 1:It's all
Speaker 10:good to you.
Speaker 15:Me on. Bye.
Speaker 1:Have a great rest Let of your me tell you about Codex. Codex is a powerful workspace for getting work done with AI agents. Whether you're writing code, analyzing data, creating content, or automating business workflows, Codex helps you move projects forward from start.
Speaker 2:Over on x, Daniel's advocating for banning social media for 60.
Speaker 1:Yes. Yes. The inverse of The UK's project or The UK's initiative to ban social media for under sixteen over sixty five. I think that would ruffle some feathers. That would probably be pushed back on more by the social media companies because the purchasing power from 65 onward is so high.
Speaker 1:There's so much wealth with the boomer generation. That would actually be very devastating to Facebook and YouTube and TikTok even. The young folks, I think all the social media companies have an incentive to get those users as early as possible, keep them on the platform. But I think more than anything, want a level playing field. So Connor Hayes can duke it out with every other social media, site as soon as someone turns 16, try and acquire them, try and get them on board.
Speaker 1:But we'll see as that rolls out and where the guardrails are set.
Speaker 2:We'll close out the the show with Sean Frank. Is doubting Meta. Spenders are mad at bugs and model changes. Investors think they're missing AI, like the AR saga all over again. But as a large ish customer who will spend something like a $100,000,000 with them this year, Meta is working and no ad space comes close to their level of scale.
Speaker 2:Don't doubt the Zuck. It the fact that you can buy that that you could have one SpaceX or two Metas for the same price is pretty unbelievable and certainly not something that most people would have guessed even a year ago.
Speaker 1:Yeah. It is a crazy, crazy situation. At the same time, rockets, they're inspiring. And social media is
Speaker 2:so Totally. I mean, I can see I can see what we got here.
Speaker 1:Yeah.
Speaker 2:But it's still surprising.
Speaker 1:But, yeah. Obviously, fantastic business. And, yeah, people are probably need to, you know, reality check with Sean Frank because he's in the trenches. He understands the business better than most. So go pay attention to him.
Speaker 1:Anyway, thank you for tuning in to TBPN today.
Speaker 2:We'll see you It's been an honor and a privilege.
Speaker 1:Leave us five stars on Apple Podcast and Spotify. Sign up for our newsletter at tbpn.com. We'll see you
Speaker 2:Love you. Tomorrow. Goodbye. Cheers.