Subscribe
Share
Share
Embed
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.
Watching TBPN. Little preview there for you. It's Wednesday, 05/20/2026. We are live from the TBPN Ultra, Temple Of Technology, Fortress Of Finance
Speaker 2:The capital.
Speaker 3:Capital Of Capital.
Speaker 1:We're both in suits today. I like it. It looks good. Some people they can't tell us apart. Is that what you're saying?
Speaker 2:That. Oh, okay. Anyway. But people have been saying I need something like a swear jar.
Speaker 1:Okay.
Speaker 2:When I don't wear a suit.
Speaker 1:Oh, okay. I'd
Speaker 2:like So so, yeah. Something something to consider. Yeah. It it should probably be a pretty big jar.
Speaker 1:$20 to the OpenAI nonprofit. That's what you gotta do. No. We were in unheard. We I mean, we can pull up the full the full post later in the show, but it was funny.
Speaker 1:I mean, it's a good good analysis of, you know, what we've taken from ESPN, what works about live streaming. This is from Alice Key. My latest for UnHerd is on why tech shows like TBPN are rerunning the sports media playbook invented by ESPN and why it's working. And they said, where where where is it? They're hard to tell apart in their matching suits and floppy haircuts.
Speaker 1:I don't know if that's good or bad, but we don't always have matching suits. Usually, Jory's the casual one. But yesterday, we were both casual. Today, we're both in suits.
Speaker 2:We do we do still get the brother thing a lot.
Speaker 1:But, yeah, I think it's a term of endearment. I think it's positive. Anyway, we have to react to Google IO. Of course, there's a whole bunch of announcements, some really exciting stuff, some stuff that people are having mixed reactions to. We'll take you through it all.
Speaker 1:But first, we need to watch this video about humanoid robot. Ramp? Why is ramp?
Speaker 2:No. I'm kidding. No.
Speaker 1:Sung Drip Wu says, I'm crying. Watch this video.
Speaker 2:Let's get some
Speaker 1:You gotta go to the beginning. You're spoiling it.
Speaker 2:Let's go
Speaker 1:to the beginning. Doing pretty well. Moving pretty quickly. Little bit of a oh, catches itself. Catches itself.
Speaker 1:Not bad. Not bad. Okay. Seems like a full recovery. Seems like you're ready to go.
Speaker 1:The one. I'm liking it. Yeah. Then Not good. And then I I wonder what it's thinking because you would think that there
Speaker 2:would Oh, they gotta program the music.
Speaker 4:They gotta Yeah.
Speaker 2:The music. Don't let the music keep playing while your your boy's down.
Speaker 1:It just gets carried off like this. It's so crazy. Just carried off like this. Like, this this seems solvable. This seems solvable.
Speaker 2:Kinda do in the middle
Speaker 1:of walk. Do teleoperation take over in that case or even just have like a if on the ground reset yourself by like doing a push up. Like you could sort of hard code that I would think. Like that was a weird I I understand that I can't dance and walk upstairs. Like that is tricky.
Speaker 1:I understand why it fell down. But I don't understand why it couldn't get back up after it fell down. Anyway, singularity delayed. Yeah.
Speaker 2:It is. It's possible that the robot died from embarrassment.
Speaker 1:Yeah. Or maybe it was damaged. Possible that like as it as it hit the ground, was just actually taken out. But I'm fascinated by this. I wonder how many like, this video was taken clearly in, the third row of an auditorium.
Speaker 1:Are people going to see robot dance shows? Was this an introduction to a tech conference? Like, I need so much more context here to really understand what's going on. Aaron Chen posted the full the the the first video, Aaron Chen AI. They had the chance to stop this when the robot almost fell, but then it really fell, but the show must go on.
Speaker 1:So who will dance on the floor in the round? Beware. Well, certainly solvable with enough time, but not quite there yet. If you're thinking of shelling out big dollars for a robot dance show, maybe make sure there's a refund policy in case the robot absolutely collapses. That would not be good.
Speaker 1:Anyway, Google IO. A bunch of different announcements. Brandon Grell on our team posted on the TBPN newsletter some reactions, sort of bucketed it into four key areas. Intelligent Eyewear, this is an interesting one. I want to go into this.
Speaker 1:Gemini Omni, we talked about the videos. We played a little bit of that yesterday. Upgrades to Gemini LLMs, those have been mixed reactions from developers. We'll go through that. And then Anti Gravity, which is an interesting place with an interesting history.
Speaker 1:So let's start with intelligent eyewear. If you had to pick, Warby Parker, Gentle Monster. Have you heard of Gentle Monster before? I've heard of Warby Parker. I know the story.
Speaker 1:I I I I'm a fan of
Speaker 2:Heard of it.
Speaker 1:Of the business story.
Speaker 2:Not super familiar.
Speaker 1:I I haven't worn glasses in a very long time, so I'm not really in the market. But the Warby Parkers, I've always I've always enjoyed the way they thought about the brand, and I've also been impressed by the way they built that business. They were early to the d to c boom. And then didn't some of the founders move over to Harry's? Is that the same team?
Speaker 1:Or is that a different Maybe. I'm thinking of?
Speaker 2:They were certainly when I when I think of d to c, I think of Warby. Yeah. I think of Allbirds. Yeah. I think of Everlane.
Speaker 1:Yes. But when you think of two the last two out of those three, the market caps are sub 100,000,000. Allbirds was trading at, what, 20,000,000 or something and then spiked because of the AI thing. But Allbirds, Everlane, not really sustainable businesses. Worry Parker, on the other hand, current market
Speaker 2:Allbirds has
Speaker 1:pretty much been 3 and a half billion.
Speaker 2:Allbirds has pretty much been down only.
Speaker 1:Down only. This is the pump, the AI pump. On there.
Speaker 2:Neo Cloud, no surprises there.
Speaker 1:Well, have they given us an update on how they are rolling out Kubernetes? How it's going, building their Neo Cloud? Did they get allocation? Are they racking Cerebras? Are they racking GB two hundreds?
Speaker 1:What are they racking? And how fast are they getting power?
Speaker 2:It would be it would be funny if Jensen ends up having to talk about Allbirds on their earnings call today.
Speaker 1:Didn't they
Speaker 2:There's a new
Speaker 1:Yeah. Didn't they also like fully rebrand the name? It was gonna be like Bird AI or All AI? Like
Speaker 2:Yes. They they were moving still all exists. Okay. But they basically kept the public Mhmm. Entity Yeah.
Speaker 2:And that's what they're building, the Neo Cloud there. So Fun. Well Lots of fun.
Speaker 1:Warby Parker, resilient. I mean, in 2021, it was a $6,000,000,000 company. Now it's a $3,000,000,000 company. Not the best scenario, but surprisingly resilient, I think, a time when a lot of people wrote off a lot of the stand alone direct to consumers, like either get rolled into a bigger company or go or like face the fate of the public markets. But Warby Parker has a deal with Google and Samsung.
Speaker 1:Google says, we're partnering with Samsung, Gentle Monster and Warby Parker on new intelligent eyewear. Here's a sneak peek at two designs from this fall's upcoming collections. And people are this is I like futurinomics from Sam. Kind of crazy that you can wear your favorite MAG seven on your face now. You can.
Speaker 1:The Gentle Monster one does a really good job of hiding the camera. I I imagine that it will have a light to tell you if it's recording, but if someone wore these from a distance also, Meta Ray Bans have done sort of the hard work of becoming the first face computer. So when you see Ray Bans and they're a little thick, you start immediately thinking, oh, should I be looking for a camera lens? Am I being recorded? But the Gentle Monster design, that silhouette, doesn't scream technology.
Speaker 1:It doesn't scream wearable face camera. And so these are gonna be a little bit more stealthy. Warby Parkers look nice. But the camera bump Yeah. On
Speaker 2:on Warby Parker you know, it makes a lot of sense that that that Google's and the metas have to go and partner on different silhouettes. Yeah. My expectation, my uninformed expectation is that Apple will just make Apple glasses. Right? They will probably I I it's hard to see them taking the route at least early on of partnering and allowing another company to influence the design language.
Speaker 2:But it makes a lot of sense that Meta would partner with Luxottica.
Speaker 1:Okay. Firstly, look look at the camera bump on this. If you zoom in as far as you can, I don't know if we can zoom in any further, but the the camera is actually not flush with the frames? It's actually protruding a little bit. Yeah.
Speaker 1:You can see it right there. Interesting design choice. I wonder how that will catch the light, how that will reflect in in in the real world. Is that true about Apple? I thought that they had a partnership.
Speaker 1:I thought someone I saw this on the timeline that Apple would be partnering with someone on frames. Maybe that was just a rumor. I don't know where it went. Okay. So, yes.
Speaker 1:I Apple has Carl Zeiss, which I guess is like a glass manufacturer. I don't know. Is do do they do they make glasses? Glasses?
Speaker 2:Karl Zeiss, a g German, manufacturer of optical systems. Oh, they make eyewear. Have an eyewear Founded in Germany in 1846.
Speaker 1:Okay.
Speaker 2:So By optician Karl Zeiss.
Speaker 1:The Zeiss eyewear collection. I don't know. But this is all from a joke from Aboukhad says, okay. So Apple has Carl Zeiss, Meta has Ray Bans and Oakley. Google has Gentle Monster and Warby Parker.
Speaker 1:Boring. Which company is going to be bold enough to slap wearable technology into some three m safety glasses? Would you rock these, Jordy? Three ms safety glasses? Know what you're talking about.
Speaker 1:Right? You're working with a buzz saw I
Speaker 2:do know.
Speaker 1:Dust in your
Speaker 2:eyes? But these these look cool. These are sporty. I'm I'm much more likely to just commit to the bit.
Speaker 1:Just go full full cyberpunk.
Speaker 2:Full clank.
Speaker 1:Full yeah. Full you you'd clank out. Full full cyberpunk. I think that's I think that might be the move. I don't know.
Speaker 1:For some company, a challenger company could potentially do that, maybe friend or something. Anyway, what else? So Warby Parker traded down on the news, which Shiel Mona was surprised by. Why is Warby Parker down 14%? They announced a partnership at Google IO that's been in the works for a while.
Speaker 1:Is it because they aren't available yet? And our friend, Rat King, Mike Isaac says, okay, Google AI glasses with Warby Parker are officially coming for Meta Ray Ban. Google also said it would bring Gemini to glasses this fall with Samsung Electronics and and the eyewear companies, Warby Parker and Gentle Monster. The glasses which work similarly to Meta Ray Ban smart glasses come with a camera, microphone
Speaker 2:Yeah. What point at what point does Google just buy Warby Parker? Right? It's a $3,000,000,000 company. It's actually done quite well over the last six months.
Speaker 2:It's up 43% in the last six months, although it's been almost flat this year. I would say I expect that smart glasses are gonna have product market fit among people that need to wear glasses first. Right? Mhmm. If you already have to wear glasses all day long for your vision, why not throw some smart features in there?
Speaker 2:It's gonna be harder to get someone that doesn't need glasses to add a new device to their rotation. Right? Yeah. And so, know, Warby Parker's, you know, done quite well. Yeah.
Speaker 2:And has been surprisingly resilient, but they have, you know, incredible distribution. And I wouldn't be surprised if they get sniped at
Speaker 1:some I mean, deeper integration into a traditional, I don't know, like workflow. Like like a lot of the Google IO, we'll get into this, but was talking about Spark, the personal AI assistant. When I think
Speaker 2:Since Spark. It's an AI.
Speaker 1:I know. Know. I know.
Speaker 2:Oh, just look at Omni.
Speaker 1:Yeah. There's a lot of names. It's Google. There's lot of products. You're referring to, of course, Nathan Clark's post.
Speaker 1:It's in Gemini. Just created an AI studio. Oh, it's for your personal Google account. For Workspace, you need Gemini Business. No.
Speaker 1:Not Gemini Advanced. That's AI Pro now unless you need AI Ultra. Oh, agents? You do that in Spark actually. No.
Speaker 1:Not Gemini API manages and it's the typical meme. But the the interesting thing is that I I do think meta Ray Bans, like, it was always like, okay, you have a deep integration with WhatsApp. You have a deep integration Instagram DMs, maybe Facebook Messenger. Some people are still using that. But, in terms of, like, wiring into your life, there are way more people that see Google Docs, Gmail as, like, the central node in their personal life.
Speaker 1:Like, peep like, people think of, like, my the all of the stuff I have saved on my the desktop of my MacBook is, like, my core repository. A lot of people think, okay. For the important stuff, I'll put it in Google Docs or Google Drive and then most things flow through Gmail. Most things flow through iMessage. There are some people that just are like, yeah, WhatsApp is the number one screen time for me.
Speaker 1:That's where I really organize things. But Meta doesn't really have this, like, knock on effect of like, oh, yes, you've you're it's not necessarily an enterprise level productivity suite, but there are people who are like, yeah, I'm using Apple Mail, iMessage. I save my files in Apple files, Apple, you know, the the cloud storage I use. My my camera roll is super important. So an an AI agent running through the Apple ecosystem can be valuable, and an AI agent running through the Google ecosystem can be valuable.
Speaker 1:The Meta smart glasses, it's a little bit trickier to go and do anything that because you're just like sort of bumping up against the walled gardens. Right?
Speaker 2:Yeah.
Speaker 1:But investor Nick doesn't like them for aesthetic reasons. He says, these Google X Warby Parker glasses are horrific looking compared to these meta Ray Bans. Someone is probably going to lose their job over this. I don't know that they look that much worse. I don't know.
Speaker 1:Ray Bans are a very iconic silhouette and they do look good. So we'll see. We'll see how the response goes. Think from a product perspective, there's obviously fertile ground. On the flip side, the red the the Wayfarer is just such an iconic it's more iconic than anything Warby Parker has produced and that's just sort of the reality of brand building over a decade versus a century or something like that, however long Ray Ban's been around, a long time, right?
Speaker 1:Anyway, Genie three. You can now simulate real places by grounding Genie three experiences with Street View imagery. Google is sitting on a mother load of real world data. I was always thinking YouTube was going to be so valuable for Omni and v o three, v o four maybe in the future. I hadn't considered Street View as a trove of data.
Speaker 1:Demis seems very data pilled. He seems a lot of the Mag7 CEOs seem very data pilled. There's that story about Mark Zuckerberg screen recording or logging all the computer use from all the Meta employees. These important trove of data are increasing in value and Street View certainly seems like it's one of them. This is cool.
Speaker 1:I wonder how interactive this will be. How how this actually instantiates into a game. It's a great demo. What does it take to
Speaker 2:build games on top of this?
Speaker 1:Yeah. I just think about, I don't know. I I mean, Dennis has a background in games and he was sort of alluding to the fact that he might go back into games at some point or or at least be able to like scratch that itch again. Famously, he wrote a programmatic code to generate vomit in a roller coaster simulator. Very fun story.
Speaker 1:But again, when I think about Roller Coaster Tycoon, was not, I think, I don't think he was actually working on that game. Was a similar theme park simulator, but we are moving back into the simulator world. But the mechanic is what is so enticing to gamers often. When I think about the games that I've spent a long time with, some of them have incredible graphics, AAA graphics. Some of them have two d graphics.
Speaker 1:But the mechanic is great. And so that is what gets me to feedback.
Speaker 2:The legend Bobby Chipman in the X Chat says, can't wait for smart glasses to fully replace my monitors.
Speaker 1:Yeah. Maybe you'll need augmented reality or something. Metaray Band display certainly going that direction. The Orion. I've I've been surprised.
Speaker 1:Wasn't the first episode we ever did we were talking about Orion? And they still haven't shipped it. Right? I mean, they shipped their smaller version, the Metaray Band displays, which have
Speaker 5:Yeah.
Speaker 1:Sort of the Call of Duty HUD. It's not full augmented reality. Was expecting I was We we we demoed the Orion headset. And it and in it has a bit of a narrow field of view, but it really can put a screen right in front of you. And I I assumed that, everyone was saying it's really expensive, it's clunky, it's not ready for prime time.
Speaker 1:But look at how fast things are going. In a year, maybe two, we'll get it. And maybe that's coming at the next Metaconnect. Maybe this summer we'll see it. But hasn't been that many rumbles on it.
Speaker 1:Then obviously the massive pitch shift to AI CapEx might have taken a backseat. I don't know. I'm certainly hopeful. I'd like AR and VR. I think think we're we're overdue for a new fun product.
Speaker 1:I'm still waiting for the next Apple Vision Pro. Apple Vision Air, something just lighter. That's all I want. Cheaper maybe, but lighter and same screen. Screen was great.
Speaker 1:Anyway
Speaker 2:We know, John.
Speaker 1:Gemini Flash 3.5 looks pretty neat according to Tenebrous and extremely fast, but still largely the sort of incremental progress we've come to expect from Google, generally a pretty disappointing IO. Now, what's interesting is that Gemini three felt like a new base pre trained, felt like it had some of that big model smell, felt like it was really delightful to talk to. And I think a lot of people were expecting Gemini four here. We're still waiting for the next iteration here. And also Yeah.
Speaker 2:We're still waiting for Pro.
Speaker 1:Yeah. Pro isn't out, but people are speculating that that 3.5 Pro won't necessarily be a new pre trained. And so, it seems like it's a there's a little bit of, you know, research being at odds with like the product cadence, like Google IO is scheduled probably like two years in advance. And whether or not the training run finishes on time is a little bit harder to package up and nail on a specific time. We see this with the independent labs or the OpenAI, Anthropic, the other labs, xAI, like they're launching models very much like when they're done and then they will like instantiate like something that looks like a conference around it or maybe a video or a blog post, a model card.
Speaker 1:But if you're grinding towards a specific date and the specific model isn't quite ready, you come out with something that looks a little bit more incremental. People were really, really honing in on the fact that the cutoff date was January 2025. Right? Was that the was that the date? That or was it December 2025?
Speaker 1:Either way January. Yeah. I I don't know. I don't know how much cutoff time cutoff dates matter because, you know, all these models, you know, can query the web and and get team
Speaker 2:Overall reactions from Yeah. Developers across the board were not good. Not good. Yeah.
Speaker 1:Akhund, Cursor
Speaker 2:ranked it on CursorBench. It is below Composer two.
Speaker 1:That is that a fair thing? I mean, I'd like to see you rank another another livestream on TBPN bench. It doesn't match up. Know? It's like
Speaker 2:No. I mean, they have they have all they the have all the other frontier
Speaker 1:And some of them are ahead of Cursor's own models on Cursor's
Speaker 2:It's data just point. But yeah. Yeah. But here's the other thing. Four times it costs four it underperforms Composer too even though it's roughly four times more expensive.
Speaker 2:Interesting. Interesting.
Speaker 1:Yeah. I I feel like for a long time Google's positioning was, you know, frontier or near frontier but best possible pricing. And this marks sort of a shift in the strategy perhaps.
Speaker 2:Yeah. Overall, starting to make more and more and more sense
Speaker 1:Mhmm.
Speaker 2:Why Google has put so much capital and resources behind Anthropic. Yeah. Right.
Speaker 1:Prakash says, seems to indicate that DeepMind is constrained by data rather than compute for what they intend to do, hence the TPU sales. Rest of Google now shipping their org chart. Ben Thompson talked about that a little bit. And there was some context on like, you know, we were asking the question like, will there be AI fatigue from stuffing AI in every product surface area? Allie Kay Miller shares one of the loudest applauses in the entire Google keynote.
Speaker 1:Nishtha put on the Gentle Monster plus Gemini glasses, tapped the side to summon Gemini, and all in one prompt said, take a photo and put a cartoon blimp in the sky that says Google IO twenty twenty six. And within seconds, the preview of the edited photo from Nana Banana appeared on her watch. I want to spend less time on screens. AI is really coming everywhere. And so much is driven by Voice AI as the interaction mode.
Speaker 1:Very cool demo, impressive technology, but Greg's gadget says these companies truly have no idea what regular people want because, yeah, that is a little bit of a niche use case. You need to be more creative with it for when you would actually use that because this is a very it's a perfect demo of the product and the functionality, but it lacks that like creative spark of like, yes, I did want a picture of that on my wrist at that key moment in time. Like if you're not doing a demo, I don't think his point is that regular people would not be excited about that particular feature. Right? Anyway, you want to move on to something?
Speaker 1:Where do you want
Speaker 2:go? What next?
Speaker 1:IPOs? SpaceX IPO? We're getting more details by the day.
Speaker 2:The other the other thing The thing that is
Speaker 1:Yeah.
Speaker 2:Was going pretty viral last thing on IO was that the Google anti gravity team flashed a codex folder
Speaker 1:Oh, yeah.
Speaker 2:In their in their actual demo video. Gurgley says, I had to do a double take in the second minute of the launch video for Anti Gravity. You can see people use Codex on the Anti Gravity team. Did no one double check the launch video at the very least. Not a huge surprise.
Speaker 2:Obviously, anti gravity looks a lot of people were saying looks quite quite like Codex. So clearly
Speaker 5:More than I
Speaker 1:feel like it would be like a they would have just rebuilt Windsurf. Don't know. We'll have to see.
Speaker 2:No. So but but anyways, this isn't a huge surprise. Right? Mhmm. Google's been using a bunch of anthropic models.
Speaker 2:Mhmm. Clearly, they're using a ton of different models and products internally.
Speaker 1:The drama with Steve Yigi going back and forth with Dennis about like what what teams are using, what models and stuff. There was a big back and forth, big dust up on the timeline in like a month ago about like whether or not Google's employees were deploying AI efficiently or broadly. Some of them aren't and some of them are. And Dennis chimed in and said, like, this is just complete wrong and everyone's using AI. I don't know.
Speaker 1:It goes back and forth. There's also people are benchmarking OmniFlash which looked amazing when we saw the videos. There was a there there were a few like little quirks. Some people in the chat were saying that the firing order of the v eight was not correct. Maybe it was only a v six.
Speaker 2:Yeah. It was missing two cylinders.
Speaker 1:It was missing two cylinders. But it looked good to me. I don't know. But now people are actually comping it to Sea Dance two point o which obviously has much looser content restrictions because I I guess just like Hollywood can't file a lawsuit in China. I I'm not exactly sure how that works because C Dance seems to be available in America.
Speaker 1:It it seems like maybe
Speaker 2:Oh, I think I think Chinese businesses have been relatively immune to US copyright law for a very, very, very long time.
Speaker 1:And it also might just take like years to file a lawsuit, do discovery, actually go through and litigate.
Speaker 2:Oh, yeah. You you can just go like there's malls in China where you can go to a Nike store Yeah. And Nike has nothing to do with it Yeah. And yet all the products
Speaker 1:They've been selling Swatch APs over there for decades. Yeah.
Speaker 2:Yeah. Just ask just ask Rolex and Patek how they're
Speaker 1:Sure. Yeah. I I've heard fake cars too. Like you can get a full replica of like a G Wagon that's just made in a factory and then you could buy it, bring it over here and you take it to a Mercedes dealership and they're just like, this is not a Mercedes. But it looks like one, like like, you know, to the millimeter from the outside.
Speaker 1:Yep. Internally, it's just it's just frauding. Anyway Anyways. Cdance two point o looks great. OmniFlash looks great as well.
Speaker 1:These are both, like, super useful. We'll see how they actually play out and how they get implemented, how they get used. The interesting thing will be like like at what point like, it still takes a long time to generate videos. Very hard to get them right. The last 90 like, we're at 99% fidelity, but when you click in, you start noticing little details.
Speaker 1:When will we be in a paradigm where you ask a question and you actually get an explainer video six minutes, ten minutes like you would on YouTube? Very computationally expensive, very difficult to maintain logic. Like what is the deep research report of OmniFlash? These eight second, ten second, twenty second videos are impressive but not perfectly substitutable for a twenty minute YouTube video because of the time and the level of detail that you can go into. Some people that are looking for information about a V eight engine, they want a breakdown that lasts twenty minutes.
Speaker 1:And so that's the next benchmark. We got to move the goalposts. Anyway, SpaceX IPO. The prospectus is incoming according to Zero Hedge as soon as May 20. That's today.
Speaker 1:We will see Goldman lead left. This was a surprise. Michael Grimes has worked with Elon for a long time at Morgan Stanley. There was some back and forth. He went back to Morgan Stanley.
Speaker 1:There was a question about whether or not there would even be a lead left because it's such a big IPO. Maybe they all share equally. Obviously, they're all gonna make a ton of money off of this. So good news from start to finish, but it is interesting that Goldman was selected. Do you have a soundboard cue you wanna play?
Speaker 2:I'm always ready, John. Okay.
Speaker 1:Katie Roof has a scoop.
Speaker 3:The scoop athlete of the century, Katie Roof.
Speaker 1:Has a scoop on the biggest venture returns ever. Founders Fund and Valor are set to make more than 60,000,000,000 in gains on the SpaceX IPO. Sequoia, more than 20,000,000,000.
Speaker 2:Was this was this somewhat of a reaction to D1 getting a lot of credit earlier in the week. Right? They they're they're set to to generate roughly 20,000,000,000 in returns. And maybe some of these other funds thought to put their hand up and say I
Speaker 1:don't think. I think that at this scale, like there are so many LPs in these funds that are getting updates and they've been they've known the numbers for a long time. They've known the ownership, the holdings and you do some back of the envelope and you get some pretty huge numbers. Will be very interesting. Huge for Sean Maguire, huge for Luke Nosek and a lot of other folks over at Founders Fund and Antonio Gracias at Valor and all the other Founders Fund folks.
Speaker 2:Yeah. Sequoia Founders Fund.
Speaker 1:They needed to win.
Speaker 2:They needed
Speaker 1:win. I mean, you go back like, you know, these investments were made like 02/2010. Like it was not obvious. Certainly, was no Starlink narrative when these were made. There was no space data center narrative.
Speaker 1:This was a rocket company that was blowing up rockets left and right and not quite getting to you know, massive business. So you really had to believe be a believer and they were.
Speaker 2:It's gonna be benefit. Packy was having some fun on the timeline. He
Speaker 4:said Megaphones are too big to generate returns. They're basically just be collectors.
Speaker 2:And of course, they're printing. Yes.
Speaker 1:They are printing. Well, we have a very special guest joining us today, the CEO, the founder of Figma, Dylan Field, in the waiting room. Let's bring him into the TV and up here. Dylan, great
Speaker 2:to see you. Hey.
Speaker 6:Great to see you. Thanks for Too having me
Speaker 2:long. Great to see you.
Speaker 1:First question. Are you alive or are you dead?
Speaker 6:Very alive. Think you are too. Yes.
Speaker 1:It is such a white pill. Why well, I I mean, how have you processed all this? I guess I I we can go into the business and the product and the financials, but I'm more interested in just like the mindset, the emotional journey, like how do you stay sane? Is it an advantage to have been building this business for so long that you can draw on other experiences? Like, what what has the process of going through all of this been like for you?
Speaker 6:I mean, what's the quote? When in the age of AI, those who say sane win.
Speaker 1:Oh, I like that.
Speaker 6:Who's quoted pretty accurate. And
Speaker 4:You should you should you should own that.
Speaker 1:Gonna attribute that to you.
Speaker 2:Yeah. We're gonna attribute that
Speaker 6:to Not mine. But but but really, I think it's super important. You have to have a even mind about it and, you know, I I know that you guys know this but social media not reality.
Speaker 1:It is. It is not reality. We see this all the time. Yep. All the time.
Speaker 2:But Yeah. And the the thing that I've been thinking about this week is how AI generated design is seemingly becoming as easy to clock as the as AI text.
Speaker 1:It's not this, it's that.
Speaker 2:This and that.
Speaker 1:Yeah. Right?
Speaker 2:I feel like people kind of like right now, the I mean the entire market is just going through like rolling stages of AI psychosis and everyone's having it in different ways. Right? So like if you do like equity research, you're obviously gonna go through period of AI psychosis because you can just like type in a few words and get like what what looks like, you know, days, weeks of of, you know, really really great work. And sometimes it is great work. And if you're a designer, web designer and you can do type in a few words and get what looks like a great website instantly, you're also gonna go through that period and and you can just see these sort of like pockets of of AI psychosis all around the industry industry broadly.
Speaker 2:Broadly. Mhmm. But it does sort of like fade at some point and then if you're able to stay sane, you know, through those periods and not let yourself succumb to it, you can get excited about the potential and benefit from it but not lose your mind in the process. And I think like we were seeing that with, you know, early on with ChatGPT and like writing. Right?
Speaker 2:Before Mhmm. It was super obvious to clock. And then we were seeing that with design specifically where yeah. When you can just go and just generate stuff design that looks like good design. I'm not saying it is good design.
Speaker 2:And and I think we're kind of coming out of that now where you can just instantly clock when something was was generated and sometimes for a specific type of asset or use case, it's totally the right move to just generate something quickly. But I think we're already in a period right now where I if I go to a startup's website and it's clear that it was just like a one shot, you know, prompt, like that says something about the company. Could be good, could be bad. We don't know.
Speaker 6:Jordy, I think you're absolutely right. But seriously, I I mean, this is the the balance oh, thank you. I I use the balance we had to strike with the Figma's design assistant design agent launch today. Yeah. And what we tried to do was make it so that we can really help you bring the context from your file into the agent's context window.
Speaker 6:And with that, two things that maybe are what will be most helpful for the designer in the moment, spawn agents to do explorations variations, do the the sort of rote tasks that are more boring. So things like design system maintenance, for example, how do we make it so that you're able to do that way faster with Figma's design agent than you would if you're just manually clicking on all these variable names or or manually change a bunch of components or text translation or any number of things. And so, you know, it's been really fun to kind of explore how does the design agent work and where can we make it better because there's so much more we can do to handle more of these tasks that, you know, designers are able to elevate themselves and work at a greater level to actually push aesthetic past AI slob, to actually push past, you know, the cliches and get to real innovation, solve real UX problems for users rather than making it so that you just have to go do this boring these boring tasks to just get through and unblock people or unblock your team. And I think that the design agent will really help there and bring more of it into the canvas where then you can share and collaborate with your team or with other agents.
Speaker 6:So I'm excited for where it goes, and I think today's really big and kudos to the team because they've been working really hard making so that we're able to take all all the advances with models and LMs and apply them to design. Getting these models to speak design well has been nontrivial and very cool.
Speaker 1:That's awesome. I I feel like a lot of a lot of software engineers who are interacting with coding agents are experiencing like incredible amounts of like bloat in the code and there's questions about like are you introducing are are are you like laying really shoddy foundation that will come back to bite you later and a lot of people say the answer to slop is just more slop. But in the design context, are you feeling pain from Slop. Figma where design systems or are you at least designing the agentic design tool in a way that is aware of that potential pitfall in advance because there is a world where, you know, oh the drudgery is taking my website and you know, doing design iterations for every single possible viewport or device. And if that gets out of sync that can be very complex.
Speaker 1:At the same time if you wind up you know, instantiating all that and then it doesn't tie together, you could wind up with some sort of, you know, misalignment and, like, it it could be very difficult to manage in the long term and you could wind up with, like, bloat.
Speaker 6:Yeah. I mean, look, I think that it's different context for sure when you're in a sort of code base and you're using COD and it's overclaiming and making stuff up Mhmm. Or you're using, you know, OpenAI's ChatGPT models. 5.5 is amazing, but, like, definitely overcomplexifies things. And, you know, these these teams will deal with the sort of problems that are being identified, and they'll fix them and figure them out.
Speaker 6:But, overall, I think it's a different sort of class of problem than, like, when you're in a design file, and, really, part of your mode is exploration. If we can help you with that exploration, that can be useful for the user. And in terms of semantics, I mean, the way that you represent a a component or, you know, you the way you apply auto layout even, these are all examples of things that we've had to get more rigorous around how we build evals for this Mhmm. To make sure that we're doing things in a way that is both clear and opinionated, but also doesn't get in the way of the user. Mhmm.
Speaker 6:And I think the worthy year for us has been evals and probably for the industry. And so there's so much on the eval side that, you know, we have to always be improving on. And part of the feedback that we'll get from this beta will be towards where have we missed the mark and what we need to do better. And I think there's lots of room to grow there. I'll also say that I think that when you look at products like Weave, there's so much potential to not have necessarily this pile on effect, but rather to explore more with AI.
Speaker 6:The outputs of the models are like clay you can mold.
Speaker 3:Mhmm.
Speaker 6:And, you know, it's like, how do you take stuff? I mean, that might be a one shot slop that's generated, but then actually apply it across multiple models in a pipeline in order to actually figure out a way to make it into what you want. And sometimes the best way to do that is to get on a canvas and use your hands. Sometimes the best way to do that is through a workflow you define. Other times, it's by going back and forth with an agent.
Speaker 6:I think you have to be very smart about what you do when, and it's our responsibility as a tool creator to give you all the options.
Speaker 1:Mhmm. Jordy?
Speaker 2:What are you excited about in terms of using AI to help augment the creative process. Because when I think of part of what I think is exciting about this moment is like I don't right now right now it's hard. Like a human still has to have like the fundamental kind of idea. Right? And and and you we know that because you have to like type it into a box.
Speaker 2:Right? You need to you need to do the typing still. So we we we're still we're still necessary there. But when I think about like iconic like startup brands, think of Linear. I think of some of what like Cursor has done over the last couple years.
Speaker 2:I think of like Figma's brand where there's so much work that went into just like coming up with that coming up with like the concept and and the look and feel of the brand. And then like way way way more work in terms of like instantiating that brand across every possible surface area. And part of what I think is exciting about this moment is like we're potentially entering into a world where you can spend more time just doing that like heavy creative work coming up with like a concept that can stand out. And then once you create a system, then you can like much more rapidly scale it across, again, all these different surface areas, whether it's like digital products, web, you know, email, ads, etcetera. How are you thinking about like augmenting and giving creative superpowers on that on that, like, brand building process when you're kind of coming up with coming up with, like, the idea?
Speaker 6:Yeah. I think there's so much we can explore and do there, and using design systems effectively is hard. We sure certainly have not perfectly nailed that. I think we've done much more on the maintenance side, and we have a lot more coming on the execution side of how do you put the design system you've created together so you can fully productionize that. And it's one of the things that, you know, we are looking at from so many angles, and it is critical context to be able to figure out across code, across design, how do you use this effectively.
Speaker 6:But brand, I think, is, I mean, where on the Weave side, we see even more exploration with these workflows and people being able to define workflows that are more canonical and then branch out from them. And I think we'll see the same with Assistant and with Figma's design agent as well. And the I I I also think that this idea bank, content bank can be established and added to over time and by more people. And what we're seeing with the last quarter results that we announced is that more people are starting to use Pigma in the organization. Thank you.
Speaker 1:They're fantastic results.
Speaker 6:Thank you. But the breadth, I think, of the usage expanding is a huge part of that. And the more that you can get it to a point where people can come in with their ideas, contribute to the conversation on a canvas, collaborate with others to refine, doesn't mean that, you know, these, like, sort of nondesigners who don't know all the conversations that are being had about the UX or the brand are going to be the ones that are bringing the idea as the idea they're gonna ship to the table right away. But I do think that bringing more voices into that conversation, more viewpoints only helps.
Speaker 1:How do you think about the concept of Gelman Amnesia in, like, the in the context of, like, say staying sane in the age of AI? Like cause there's probably nondesigners who use the Gen AI tool and are like, oh, wow. Like, designers are cooked. And then there's real designers who use the Gen AI tool and say, oh, there's, you know, yes, it's maybe 99% of the way there. But the battle is to get to 99.999, maybe a 100% of what you can do.
Speaker 1:And it feels like
Speaker 2:Yeah.
Speaker 1:This is
Speaker 2:Yeah. All all outputs. Right? If you ask if you ask AI to generate you something around a topic you know really, really well Yeah. It's a different feeling than a topic that you're just learning about.
Speaker 6:Yeah. Yeah. I mean, I think that basically, folks are in a place where they learn by comparative cases. And Sure. The more that they see great examples next to sort of output that's not as good and they can learn why, that's ultimately where you see folks then push further.
Speaker 6:And, you know, they can then take it on to to do more in area and evolve their skills and their judgment and their their sort of taste or not. But I I do think it's really important to have those conversational loops going, and also, get your arms around as a design leader, what is happening in your organization? Because what we're seeing is more people prototype things, and then, you know, there's, like, this latent fear of, oh, no. What are we gonna ship? And is it the thing that is sort of like a random exploration that someone thought was real, or is it something that is, like, gone through our cycle and is ready to go and is, like, very well thought out?
Speaker 6:And in general, the other thing that I'd mention is it feels like there's a lot of tunnel vision right now. Mhmm. You know, I I think that there's certain models that kind of went, oh, let's learn from four o And Mhmm. You know, are sort of sycophantic. And doing that in especially for engineers and get very latched onto an idea, and then it's kind of like the AI psychosis sets in, you're like, this is the best idea ever, and you're fully tunnel vision towards creating it.
Speaker 6:And you can show massive progress, but, like, are you going the right direction?
Speaker 1:Yeah.
Speaker 7:And I
Speaker 6:think it's really important to steer and to actually be building what you need to build and to think, not just wear a thinking cap. So that is something that I think is critical right now.
Speaker 1:Yeah. I completely agree. Yeah. There's been a bunch of great takes about that. Help me if I meet someone and they and they have the next great app idea and help me pitch them starting with Figma as the front door to the experience.
Speaker 1:If they're a nondesigner but they're also nontechnical and they're hearing about Codex and ClaudeCode and those like cogen tools versus starting with a design, starting and having the design be the place where the idea person sort of instantiates their their app or their product. And then, yes, there are agents and they might use different tools for, you know, spinning up back ends and doing other things. Why should Figma be the front door to building?
Speaker 6:Yeah. I think that as you're exploring an idea, part of it is thinking it through Mhmm. And actually understanding what is it that I wanna build. And you should not just start in a Figma. You should go talk to users.
Speaker 6:You should go think about, like, what is it that I'm trying to build? What are my goals and the problems I'm trying to solve? Yeah. So that might look like starting a sketchbook or a doc Yeah. Or in live conversation.
Speaker 1:I think there's a lot of people that have not asked that question to the LLMs and jump straight to, oh, I spent seven nights staying up all night. I'm cutting this thing and
Speaker 6:earning for a It's fun. It's addictive. Inner's box effect of like Yeah. Will it Right this time or not? Yeah.
Speaker 1:Variable reward.
Speaker 6:Yeah. Variable reward. Box. And so but then I think going from there to be intentional about, okay. I know what problems I'm trying to solve.
Speaker 6:Let me think through the solution. Figma provides an excellent spot to do that with Mhmm. In conjunction with, you know, brainstorming tools like FigJam Yeah. Or, you know, document editing.
Speaker 1:Yeah.
Speaker 6:Spec editing. And from there, I think when you've got your direction, you know what you wanna build, it's a great time to use our MCP. Go bring into code or go bring into Make. Yeah. And Make itself, I well, you'll see a ton of evolution on Surface ahead.
Speaker 6:We've already had a lot that we've improved, and you'll see even more in the weeks and months coming. And then I think that's a great spot where you can go back and forth because sometimes as you build it out, you realize that actually there's more to explore and define on the design side. Yeah. So use the best tool for the job, but I think don't be tunnel vision about there's one direction and that's the only thing that can work. That's where you'll fall into traps.
Speaker 1:Yeah. Last question for me. Huge revenue growth, massive success in the financial side. I'm interested in going a click deeper and trying to understand what is working the most because it seems like there's great retention among big clients and customers that are using Figma at scale across a huge organization. There's also new entrepreneurs that are a team of one, and they might be using Figma.
Speaker 1:There's
Speaker 2:Yeah. It's notable. It's notable that the heaviest cases The heaviest users of of coding agents are heavily using Figma Yeah. Because they're making more software.
Speaker 1:And they need to add stuff to it. I mean, I look at some of the stuff we've vibe coded, and I'm like, okay. Like, we it's time to level up and have Figma in the flow if it's not already. Even because you don't want some even like the dashboards, like, things need to be designed at some point. They need as they grow and scale.
Speaker 1:The the the the first, like, most basic thing, it could just be a CLI. But as soon as we start building UIs and multiple users, like, it gets more complicated. But but what is driving the growth? Is it both? Is one more of an opportunity for you over the next few years?
Speaker 1:Like, what are you most excited about?
Speaker 6:I mean, I think we're seeing growth kind of across the board right now, and we're very thankful for that. But our eyes are always in the future. And, you know, the same things that I've said when I've been here in the past and, you know, I think have become their own memes around design being the differentiator and design as the layer above code as code commoditizes more and more. Design is, I think, increasingly the battleground. This is where everyone is going to really duke it out to figure out what the direction is that they should explore and what they should go build.
Speaker 6:And we need to build for that world, a world where design representations, code representations can live together, and a world where, you know, you don't have to make these false trade offs between direct manipulation and AI or, you know, being able to explore broadly or make fast progress.
Speaker 1:Like Yeah.
Speaker 6:Both is the answer and so that's what we're really building for right now.
Speaker 1:Exciting. Well, thank you so much for taking the time to come on the show. Have a great rest of your week. Great to see you.
Speaker 6:Good to see you all.
Speaker 1:Thanks for talking to soon. Talk to
Speaker 2:See you.
Speaker 1:Up next, we have Feross from Socket back on the show to discuss and Series C by none other than Thrive Capital will bring in Feross from Socket from the waiting room to the TBPN UltraDome.
Speaker 2:Get that going ready.
Speaker 1:Welcome to the show. How are doing? What's up? Good to see you How's it
Speaker 8:going, guys? Thanks for having me back.
Speaker 1:I I think last time you were on, I will see you soon and here you are. Give us the news first. What happened?
Speaker 8:Yeah. So Socket announced its $60,000,000 series c
Speaker 2:at a billion dollar valuation again and again.
Speaker 1:It led by Thrive Capital. Congrats.
Speaker 8:And it's a big day for us.
Speaker 1:Absolutely massive.
Speaker 2:Is what you do important right now?
Speaker 8:Yeah. You know, you couldn't have really asked for a better, you know, perfect storm. You know, you have just the confluence of, you know, AI, cybersecurity, and all the different attacks we've been seeing, and we kind of built the perfect product for this moment. And it's been something that we've been building towards for you know, it seems like it's okay, you know, we just we we had the right thing right now, but the reality is, you know, we've been building towards this for, you know, four years plus. Yeah.
Speaker 8:And so, you know, it's an overnight success success that took four years.
Speaker 1:Right? Overnights success. I love it. Yes. What was the key unlock for the new round?
Speaker 1:Growth needed the capital for specific expansion, just the broad tailwinds of the industry, people looking forward to more demand? What's changed in the business?
Speaker 8:So the business is just inflecting. Every year I feel like, okay, this is great. Certainly, we're going get like a regression to the mean or something, but it just keeps accelerating. So over the last while, we've had 500% plus ARR growth over the last twelve month period. And it keeps going.
Speaker 8:I think we're seeing kind of three forces converging all at once here. We have this kind of like perfect storm between AI generating more code than ever before. You got developers and increasingly non developers too that are pulling in open source dependencies and third party code at unprecedented velocity, and you have more code being written than ever before, both by humans and AI agents. And the kind of maybe counterintuitive thing is it actually brings in a lot of third party code, and that code is is really vetted less than it's ever been before.
Speaker 1:Yep.
Speaker 8:And and that's kind of like the first thing. The other thing is you got the the the frontier AI models like Mythos that are that are finding, you know, thousands of high severity vulnerabilities across, every major operating system and open source library. So the total volume of vulnerabilities in code is exploding right now and it's going to keep going as we start to throw these models against you know, this backlog of code that's been out there for a long time and has a lot of vulnerabilities. And then kind of the third the third piece is that the the attackers have really started kind of realizing that they can exploit the software supply chain to get into companies. So they're not really like coming in through, you know, finding vulnerabilities, but they're actually kind of realizing if we go into an open source component, that's actually an easy way to get into an organization and not just one, but usually thousands of organizations that all use that same component.
Speaker 8:So it's this like perfect storm of all these factors right now.
Speaker 1:So walk me through how your business model interacts with the open source community. Because when we see things like Mythos, finding a bunch of bugs in open source repos, you know, we we hope that everyone will just submit bug reports early for the good of the world. But I'm interested in like the economics of patching open source if there's a really important package out there that maybe doesn't have a Linux foundation behind it. Like how at some point, like, at the very least, there's inference costs. Who's paying to patch all of the open source software that so many different companies rely on?
Speaker 1:If you go to a big company, they pay you. They might patch like their dependencies, but how does this all flow together into an actually safer Internet?
Speaker 8:Yeah. Well, I've been in open source for I think over fifteen years now, and I maintain bunch of open source packages and, you know, have a a real soft spot for the open source community. And so let me tell you, they were suffering under an enormous burden even before the current, you know, AI Yeah. Trends have kind of made it even worse. You know, they don't get much support whether financial or just in terms of, you know, the number of people working on this really critical infrastructure is super low for for how critical it is.
Speaker 8:And so, you know, we started seeing a lot of AI tools being used to create these slop PRs Yep. SLOP issues, and that was already kind of causing a burden. And then now you have the various frontier labs that are finding with with their models are finding a lot of vulnerabilities that were there, were always there, but the community didn't know about. And I will say they're doing a good job of providing a patch along with bug that they've identified, so they're doing a lot of the work for the maintainer, but it still takes effort to review the PR, and the thing that people don't realize is when you accept a pull request as a maintainer, you're not just kind of it's not this one time cost. You're actually accepting the burden kind of indefinitely into the future to maintain that code and make sure that that code is is secure and, you know, is kept up to date with all the other changes.
Speaker 8:And so I think what we're going to see and we're already starting to see is despite the kind of best efforts of the Frontier Labs and they are making good effort, you know, maintainers are going to fail to actually accept these patches. And so we're going to see a lot of libraries that may have a vulnerability in them that literally have effectively code sitting on GitHub that anyone can look at and use to generate an exploit against that vulnerability, and that's there's not going be an easy path for companies and for developer teams go and actually patch their libraries because there's no version they can upgrade to. Because the maintainer is just sort of sitting there on that patch and hasn't hasn't accepted it. So it's just creating this real risk where, you know, like there's more homes than ever before and there's not really like easy paths. And so this is actually something we try to solve.
Speaker 8:So we built a solution to this called certified patches. And what this is is basically kind of a deterministic way to, in kind of one click, make your vulnerabilities and your open source code go away. So we use we use a whole bunch of AI and kind of produce these patches that make the VULN go away without any work on the on the part of the developer. There's no kind of burden of of upgrading packages. You just sort of in a click the Vault is gone from your dependencies and you can kind of keep the rest of your code and your application the same.
Speaker 8:And so it's really kind of a quick fix to the problem that we hope is going to be part of the solution. And by the way, we're giving away all the critical patches to the community for free so we can try to disseminate this widely to as many people as possible.
Speaker 2:Are there are you able are you finding any companies that are completely asleep at the wheel or is everyone like giving this an
Speaker 1:Who should I hack today?
Speaker 2:No. Just want like I imagine like part of why the business is growing so quickly is this is like a hair on fire Yeah. Problem, concern every single day. Right? You're seeing these like vulnerabilities or issues pop up.
Speaker 2:And so I would have to imagine that every every software company online where the technical leadership there uses the Internet, which which I would imagine is all software companies are like pretty like leaning into this problem. But do you ever do you ever like I'm curious even from like an outbound sales marketing standpoint, are there people that are like, oh, this is just like not that important for us right now? Or or or would like a no be like, we we have a solution, it's with someone else?
Speaker 8:We we okay. So we've met one company that has literally no software. They produce toilet paper and they didn't
Speaker 1:have Christopher, no one of of business. No Yeah. Smart
Speaker 8:I I think yeah. I think that it's it's become a universal problem. When we started, it was kind of this, like, maybe more niche problem where people said, okay, you know, I got a lot of other problems that are more important than this. And we we initially had a really good uptick uptick of the product in the cryptocurrency community because they have a lot of software supply chain risk and when when these hacks happen, it's kind of an irreversible thing for them where they, like, lose all their their funds. And then I would say kind of AI labs were the next to pick it up and sort of, SF tech companies realized that the kind of people that are ahead of the curve.
Speaker 8:And now it's become, I mean, it's like a top, I'd say top one or top two concern at like nearly every company we talk to. It's a it's a board level concern a lot of the times now, and CSOs and heads of engineering are being asked to figure out, like, what is our solution to make sure that next time one of these things happens, we're protected. And the next time is probably going to be, like, you know, tomorrow. Like, it's so it's it's become so it's literally like, you know Yeah.
Speaker 1:Every day.
Speaker 8:Yeah. Literally, our end of quarter was, you know, the end of last month. We, you know, we already were super busy and then there were three major software supply chain attacks that happened that same day. It's it's wild. It's it's like more than we've ever seen and it's totally unprecedented.
Speaker 1:Was the GitHub issue that I saw a supply chain attack or was that something else? I saw like a couple posts but I didn't get to dig into it.
Speaker 8:So I I don't think they've released that information yet. Yeah. There's definitely been some speculation. Mean, the the timing right now, every time a company gets popped or their source code leaks, it's it's it's the first question that people think of now.
Speaker 4:Yeah.
Speaker 8:And the group, I believe that claimed responsibility is this team PCP group that has been responsible for a lot of the attacks. And so, you know, I wouldn't be surprised if that's what we learned, but I I don't think, you know, that's something that we know right now and I wouldn't want to speculate.
Speaker 1:Yeah. I wonder if there will be movements to find, like, the compute infrastructure for team PCP at some point or like the hackers because at a certain point you would imagine that they're
Speaker 2:Well, they don't. I mean, some of this a lot of this is still social engineering. Right? So it doesn't doesn't they don't necessarily need, you know, a country of geniuses
Speaker 1:Yeah.
Speaker 2:Data center. Can just
Speaker 1:couple dudes with phones. Who knows? Well, congratulations on the progress.
Speaker 2:Yeah. Incredible
Speaker 1:coming on the show.
Speaker 2:Thanks for keeping us all safe.
Speaker 1:And we'll talk to you soon.
Speaker 8:Cool. Thanks, guys.
Speaker 1:Have a good one. Goodbye. Up next, we have Tae Kim from KeyContext, the hottest substack on the Internet. We have Tay Kim in the waiting room. Let's bring him in to the TV and Ultra Home.
Speaker 1:Tay, how are doing? Hey, guys. Awesome. Here we go. Kicking it off strong.
Speaker 1:Oh, good. Good fit. That you know what we need to do? We need to figure out how to do a, like, real time real time recognition of the face face tracking and then land your glasses on the correct on the correct face.
Speaker 2:For next For next
Speaker 4:AI. I'd like that.
Speaker 1:Yes. And maybe before we get into AI and and different companies, I'd love to just know how a key context is going, how like, what what it's been like since we last checked in. How is life?
Speaker 4:It's much better. It's going great. I think the last time we talked was March 30 and the market was right at the bottom.
Speaker 1:Yeah. That's right.
Speaker 4:Weary. Everything was going terrible.
Speaker 2:Yeah. You never worried though.
Speaker 4:I did not.
Speaker 6:I Trust her.
Speaker 4:Tripled, quadrupled down on here and said CPU shortage Yeah. Five CPU, five memory, Yeah. All those ideas are up 50 to a 150%.
Speaker 1:Oh. That's
Speaker 4:pretty good. I said I think 13 out of our 14 ideas are solidly in the green. I I joke that like Shoei Ohtani numbers with like three It's $4 not gonna last, but it it worked out. I
Speaker 1:mean Yeah.
Speaker 4:We trusted in the actual would love memory stocks.
Speaker 2:Yeah. Right? I think
Speaker 4:he would. I'm sure he his his financial adviser's long HBM stocks. I'm sure
Speaker 1:Yeah. Yeah. I read some I read some report that in in South Korea, there's folks who are liquidating insurance plans to go long SK Hynix. It's a huge, huge moment over there in South Korea.
Speaker 4:And everyone's making fun of these Koreans for being long memory stocks, but, I mean, we're talking single digit PE multiples.
Speaker 1:Wow.
Speaker 4:Probably going to lots two, three two to three more years Mhmm. Triple digit growth. I mean, I I quoted this Michael Dell thing where he spoke to a Wall Street conference. He said, it's twenty five twenty five. That's the thing you need to know about memory stocks.
Speaker 4:AI accelerators gonna have 25 times more like, AI GPUs from NVIDIA, two years from now, gonna have 25 times more memory per GPU.
Speaker 7:Mhmm.
Speaker 4:And there's gonna be 20 a need for 25 times more GPUs. Wow. So he said, multiply 25 by 25, you get 625 more revenue, etcetera. And you layer onto the fact that four years ago, all these memory companies saw their revenue, you know, get cut in half. So they didn't expand capacity.
Speaker 4:It takes three to four years to expand capacity. So Mhmm. We're gonna see, like, mega pricing power. Like, we haven't seen anything yet. These stocks are gonna go keep going higher, and their revenue revenue rates are are gonna be astronomical.
Speaker 4:So everyone makes fun of these Koreans Yeah. For piling into single digit PE stocks growing at triple digits. And this cycle is different because there are only three companies that can make make the HBM memory.
Speaker 1:Yeah.
Speaker 4:So don't make fun of the Koreans. They're
Speaker 1:right. Don't. Is the the the pullback that you pushed to that you mentioned, like, the when they were beaten up, was that the post crypto slump when semiconductor equipment and and GPUs were being used to mine crypto, and then there was a pullback there. Is that what you're referring to? Like, what is the prehistory?
Speaker 1:Why were these stocks beaten up?
Speaker 4:So in 2022, like, we had a kind of a a tech recession.
Speaker 1:Mhmm.
Speaker 4:Like, everyone's all these tech companies were laying off people. Yeah. Even Intel and NVIDIA had these 50% drawdowns. Yeah. The whole you know, everything was it's almost like the the post COVID kind of overhang Yeah.
Speaker 4:Where people bought too many digital computers, electronics Yeah. And there was too much overcapacity.
Speaker 1:And so what yeah. What was
Speaker 4:is different this time, really?
Speaker 1:What was NVIDIA doing during that 50% drawdown? Were they buying the stock back?
Speaker 4:Not not really. NVIDIA's if if they buy
Speaker 5:a little
Speaker 4:bit of stock Okay. Back, but not not really. And back then, this is a different NVIDIA where, like Yeah. Data centers 10% of the revenue and gaming is 89%. Now now it's Yeah.
Speaker 4:Yeah. Where data centers nearly everything. Yeah. What happened with NVIDIA back then is everyone's mined their GPUs to mine Ethereum. Mhmm.
Speaker 4:And then Ethereum did the whole proof of stake group of work thing, so demand for GPUs collapsed.
Speaker 1:Mhmm.
Speaker 4:And NVIDIA had like a terrible quarter. They where they missed by like 2,000,000,000, which was a big number back then for that.
Speaker 1:Now That's a rounding error.
Speaker 4:Back then, it was 20% of the revenue, and the stock got hit hard.
Speaker 1:Yeah. So what are you looking forward to from NVIDIA this quarter, this year? What are you watching?
Speaker 4:So we had, like, two unbelievable quarters the last two quarters, and I expect another great amazing quarter. I mean, Jensen is out there saying GPU consumption is through the roof. On Monday, he said AI demand is far exceeding supply and capacity. So I think the numbers are gonna be great, and this is without even China. So, I mean, the absolute scale of these numbers are mind blowing.
Speaker 4:We're talking, like, 80% growth on $80,000,000,000 numbers, 79 or 80,000,000,000. Just think about it in three months. Right?
Speaker 1:Yeah.
Speaker 4:So the absolute scale and the stock is, like, almost as cheap as it's ever been. Like, it's trading at 19 times forward, below the, S and P 500, which is growing at, like, 10%. Yeah. NVIDIA is growing at 80%. So this this dichotomy where NVIDIA is becoming more and more undervalued Yeah.
Speaker 4:And we could talk about why.
Speaker 1:Yeah. Yeah. I'd love to know. Is that just because they're the largest company, 5,000,000,000,000. It's hard to wrap your mind around a $10,000,000,000,000 company.
Speaker 4:So every year we go through this cycle, the last three years during this whole upswing up, everyone says peak is here. Right? NVIDIA can't grow anymore. Mhmm. And NVIDIA keeps growing at some ridiculous growth rate.
Speaker 4:So the the skepticism the only reason why it's trading at below market multiple is that the AI skeptics believe that the peak year is near. Right? There there's gonna be a no growth
Speaker 2:AI is it AI skeptics or is it TPU and Trainium enjoyers?
Speaker 4:That too. They believe competition is coming and they're gonna gain market share. Yes. I I kinda laugh at that and the numbers that people, you know, put out there for the competition, it's it's like a rounding error. It's like a small single low single digit number compared to what NVIDIA's gonna grow the next few years.
Speaker 4:And what people keep forgetting is, like, if you actually look at the numbers
Speaker 1:Mhmm.
Speaker 4:I mean, NVIDIA has a trillion dollars in orders. Right? They're the ones that have locked down all the memory. Like, I I met someone guy guy at GTC. He he he's the optical startup, and NVIDIA locked up all the capacity for lasers and optical.
Speaker 4:Right?
Speaker 1:Mhmm.
Speaker 4:So NVIDIA has the supply components with memory, wafers, optical. So they're pretty much the only game in town if you want to actually buy AI GPU capacity. Like, TPU gets headlines, but, I mean, $5,000,000,000, like, is nothing when you you look comparing it to a trillion dollars. Right? So they have the volume.
Speaker 4:They have the the great power, you know, power per watt numbers and metrics that basically if you're doing inference, NVIDIA GPUs, even they cost a lot more upfront, when you actually do the inference, performance per watt is excellent with these Dura Rubin $4,500
Speaker 1:Yeah. Dollars How did you grapple with the question of whether or not NVIDIA is a car? There are competitors. You said low single digit percentage of the market, but AMD is getting its act together. Intel's maybe back in the game in a few years.
Speaker 1:You have Tranium and TPU. Competition is rarely a good thing. Is NVIDIA a car or not?
Speaker 4:Okay. Obviously, it's not a car. We're talking about how,
Speaker 1:you know
Speaker 2:I would've loved to I would've loved to be in the room with you while you saw that segment. You're just, like, taking your computer, smashing it.
Speaker 4:I I think I was tweeting about it. I think I wrote a piece on it. I I wrote, like, you know, four or 500 words about that Sure. Podcast. I don't know if we wanna go into that on that.
Speaker 4:They they you know, they're gonna be 90% of the market. Maybe they'll lose 10% of the market share in two, three years. Mhmm. But 90% of a market that is growing, you know, 70% a year and the hyperscale or CapEx numbers went up huge. There's like 780,000,000,000 going to a trillion dollars next year.
Speaker 4:Yep. Like, the market believes with NVIDIA's valuation that NVIDIA's going stop growing within the next year or two. Mhmm. But the overall market, I think, is going to keep growing at 50% at least. If it grows 50% in the next two or three years, NVIDIA's going to grow.
Speaker 4:Even if they like maintain market or, and I don't believe that's true. I think they're they're actually gonna maintain or even increase market share. But even if market share goes down 10%, I mean, the numbers are just insane. And I don't think Nvidia's gonna trade at, like, ten, twelve times earnings when they're growing at 50%. I mean, that that doesn't make sense to me.
Speaker 4:So I think it's gonna be rate higher. And then the key thing here is the stock, stock buybacks.
Speaker 1:Yeah.
Speaker 4:Because that's like, if you guys remember during the whole iPhone, like, when when the iPhone five and six came out when they actually had the large screen iPhone, Apple was trading at PES seven. Wow. Like, x cash. Like Yeah. People thought Android was gonna almost look at the same thing.
Speaker 4:Like, Androids come in and destroy the iPhone market share when iPhone went on this generational run Mhmm. With the large screen iPhones. Right? Mhmm. But a big thing that Apple did was they started buying back stock, and that's when their multiple started going from single digits to 15 to 20 to 30 times.
Speaker 4:Mhmm. And I I think what and they already kind of hinted at it, but I think NVIDIA is gonna start buying stock buyback in size. They they said 50% of their free cash flow in the next twelve months. They're a little bit cryptic on if that was after or before prepaid the prepayments they have for the inventory and suppliers. I But think we're gonna get some more clarity tonight.
Speaker 4:And if they if they actually put numbers, maybe it's this quarter or next quarter. If they actually put the actual you know, we're gonna buy x hundreds of billions of stock, you know, in the next twelve months, I think the the the PE is gonna rerate much higher.
Speaker 1:Yeah.
Speaker 4:So, you know, as soon as we get visibility that next year is gonna keep growing at 50% or higher, I think it's gonna be higher. And the year after that, you know, stock that stock should go on top of the rerating from the capital returns.
Speaker 2:Gavin Baker was on our friend Patrick's show this morning. He was making the point that it's possible that t s m TSMC could prevent a bubble just given that they are not investing in in CapEx as aggressively as, let's say, Jensen might want them to. He said, you know, basically said what you're saying, which is NVIDIA could sell a trillion dollars of GPUs, you know, pretty much immediately if they if they had the supply. What what's your what's your read on that? Do you think that TSMC well, is
Speaker 4:so I think I've been I mean, I've been following Chip, the industry for, you know, thirty, forty years. So, you know, I I I'm very good at reading I'm very good at reading the tea leaves, and I've noticed that Jensen and what TSMC, what the CEOs have been kind of hinting at, that their tone has changed in the last two, three months. Yeah. So TSMC just reported, their q one earnings. And, you know, if you read the transcript, there it's pretty obvious that they're just gonna raise CapEx on on a different order of magnitude for the next year and the year after.
Speaker 4:They said their CapEx is going to be much higher over the next three years than it was the last three years. And basically and all the stuff they're saying, you know, they're saying and Jensen's been going out there during these speeches and q and a's. He's he's confidently saying the supply issues in two, three years are going to be on a different level. Like, even with memory, he's he's saying all these component issues that we have now in two, three years I think he even sat down the podcast interview. Two, three years, this all will be, like, less of an issue.
Speaker 4:So I'm confident that TSMC memory might be a a little problematic, but TSMC wafer wise, you know, it's gonna be dramatically higher over the next two,
Speaker 1:three years. Even if they raise capital, it feels like there might be, like, a, I don't know, a speed bump essentially. Because if they if they triple capacity and that takes two years, but everyone's sort of pricing in or expecting 10 x a year or or half an oom a year. So so that's there's a mismatch there. That's that that
Speaker 4:they What I'm saying is right now right now, the NVIDIA valuation is trading like it's growing at 10 it's gonna grow at 10% the next year
Speaker 1:or two. Mhmm.
Speaker 4:Right? They grow at 50% the next two years. Yeah. I mean, that's definitely, you know, like, TSFCs is gonna raise our CapEx Yeah. Yeah.
Speaker 4:The next so it's like an the numbers are way off.
Speaker 1:Yeah. Yeah. I'm more just thinking from
Speaker 2:a Yeah.
Speaker 1:I mean, we're not gonna get perspective.
Speaker 4:The 10 x is not gonna happen. Yeah. But, you know, 50 to 75% the next three years, I think that can happen. Yeah. And stocks will go much higher if that happens.
Speaker 1:Yeah. Yeah. No. That makes sense.
Speaker 4:That 10 x is, you know Yeah. It's not software. I mean, this you know, you have to actually move physical and animals.
Speaker 1:Yeah. That makes sense. How do you how do you think NVIDIA will be positioning China exposure, China opportunity? That that was an interesting point of debate on the door cash episode.
Speaker 4:I mean, I I've given up on China. I mean, at GTC, Jensen said, you know, he got approvals on both sides, and then weeks later, like, that, you know, fell through again. Like Mhmm. It it's forget China. It's it probably isn't gonna happen.
Speaker 4:There was also another report that gaming GPUs were incrementally banned in China. Like, I I just think, like, we you you can't rely temper your expectations. I don't think China's gonna happen.
Speaker 1:Now relevant to the business case or the valuation,
Speaker 2:but
Speaker 1:potentially important to, like, the geopolitical story?
Speaker 4:I I think it's just gonna be the status quo where NVIDIA is not gonna be able to sell to China. And and anything that happens is incremental upside, but it's not gonna be a huge number anymore. Even the stuff that is allowed is is a limited number. The the way The US has, you know, approved the licenses, it's China is the one that's saying, no. We're not gonna let you sell right now.
Speaker 4:Like, it's been going back and forth between China and The US, you know, who bans what and whatever. Yeah. But even the incremental numbers, even if China starts approving it, it's it's not a huge number the way it was in the past. So I would temper expectations on China. It's just it's been so back, you know, so back and forth and unreliable the last last couple years.
Speaker 2:Yeah. What was your reaction to Google IO?
Speaker 4:I'm actually pretty negative on Google right now. And they're, you know, they're basically nonexistent in the whole coding agent stuff, which is like the one that's gonna that's growing exponentially right now in terms of coding agents and everyone's paying tens of billions of dollars to Anthropic. And now Codex for OpenAI, you know, they're adding a million users every few weeks. Google anti anti gravity is is nowhere to be found. You know, no one's talking about Twitter.
Speaker 4:Every anyone that talks about it says they don't like it. Mhmm. So the hardest thing, is coding agents that's gonna, you know, that's gonna automate things and do actual work for an enterprise is the biggest market that's taking off like a rocket. Google isn't there. So I mean, Google Cloud is doing great, you know.
Speaker 2:Yeah. Did did seeing yesterday, did it start to make more sense to you why Google had been committing so much so many resources to Anthropic? Like, do you felt do you feel like Yeah.
Speaker 4:Yeah. So so I think they
Speaker 2:At see a time the lot of at at, you know, at the time, everyone was like, wow, I wonder how Demis feels feels about this. Of course, Demis is an angel in Anthropic and and obviously, you know, thinks they're a great company and they have a good relationship. But at the time, it was like, wow, what like, they have this new model incoming. They have this massive compute advantage. They have this massive distribution advantage.
Speaker 2:They have massive data advantage. Like, they have every single advantage. They had this huge head start.
Speaker 1:And bend to the transformer.
Speaker 2:Vend it in everywhere on all these platforms from Google Workspace which is like a massively, you know, underrated distribution point to the Google, you know, docs and and sheets and basically everywhere. Like, single possible advantage in an incredibly talented team and exponential demand for tokens. And it was still, you know, somewhat surprising to see them, you know, invest invest that much in in a competitive lab.
Speaker 4:And they're benefiting, you know, with Google Cloud at getting that business. But I think long term strategically, I think Google has to be very careful. And I think Microsoft's experience this with OpenAI is once the value accrues to Anthropic and OpenAI, they're gonna be the power players, you know, four or five years from now and be able to push people around. I mean, we saw that when Yahoo literally used Google as their search engine. Right?
Speaker 4:Google was nobody.
Speaker 1:Oh, yeah.
Speaker 4:And Yahoo put it on their on their homepage and powered their search engine, and then Google became the power player in a few years. Same thing with Netscape and Yahoo. I mean, is like history repeating itself. Netscape was everyone used Netscape. I don't know if you guys were around then, but Netscape was the browser.
Speaker 4:Right? And the reason Yahoo became powerful is because what you you clicked on that little thing on the right on the homepage and it drove people to Yahoo, the portal. Yeah. Then Google, you know, took off because they started using Google the Google search engine inside yahoo.com. Yeah.
Speaker 4:So I I think all these companies have to be be careful. Like, if you if you help OpenAI and Anthropic become super powerful and they have the best models and, you know, this thing is all a flywheel. Right? Mhmm. The more people that use it the more people that use Cloud Code, you know, Anthropy's gonna get smarter and make the better version of Cloud Code.
Speaker 4:Same thing with ChatGP. And if you let Gemini kind of, like, lose the market right now
Speaker 1:Yeah.
Speaker 4:Like, and Anthropy gets all the business and all the revenue, like Google starts losing power in the whole tech ecosystem.
Speaker 2:Yeah. It's almost like the whole industry is on a merry-go-round, but they're you know, it's like a Spider Man meme with like, you know, guns. Everyone's kinda just like going around. Yeah. Very, very
Speaker 1:What are your expectations for the SpaceX IPO? What does that do to the market? They sort of jump straight into the mag seven in terms of valuation. Are they gonna suck up liquidity?
Speaker 4:Call. It's really it's really tough to tell without that that s one. Yeah. We'll see it first and, you know, all we have is like these spot leaks and
Speaker 1:Yeah.
Speaker 4:You know, Darling can now with the, you know, selling the the the AI compute classes Mhmm. To Anthropic. I mean, the valuation is extremely extremely high. Even even the d one capital guy who who's up, you know
Speaker 1:Dan Sunheim.
Speaker 9:On Facebook.
Speaker 4:Yeah. He he was interviewed on on on Oshana's.
Speaker 1:He's Yeah. Show.
Speaker 4:You could tell if you just read his body language, he's like, wow. This is a really high multiple. I mean, go back and listen to it. Even he even though he's gonna benefit from it, like, he's like, wow. This is really high.
Speaker 6:Yeah. So
Speaker 1:I mean, a lot of SpaceX investors were happy with, you know, investing that 60,000,000,000 when it was doing 10,000,000,000 revenue and had great margins, and it's a completely different business. Both have evaluations side.
Speaker 4:To them. They saw stuff that they'll mean, like, you know, the launch costs going down and it's and Starlink coming out of nowhere and adding billions of, you know, unbelievable telecom business total Yeah. Custom market. It's great. But, like, 1.5, 1,750,000,000,000 off those Starlink
Speaker 1:revenue numbers. Like Hey. What what what was this? From Gavin Baker. He was saying, like, Elon has just always delivered for shareholders, and that means that he can marshal unlimited capital at all times.
Speaker 1:And And it just
Speaker 4:continues. You know, I'm just hesitant. Like, you know, at those extreme valuations, that's less upside for a retail investor.
Speaker 1:Oh, sure. Yeah. Yeah. Yeah. Hard to imagine, like, the the the test loss scenario.
Speaker 4:Yeah. The passive indexes, if they go in at that price, that valuation, like, on the next downturn, it's just I just I just wish Anthropic went out first.
Speaker 1:Sure.
Speaker 4:Right? Because the numbers are dramatically real. I mean, OpenAI probably is accelerating now with Codex too. Yeah. Yeah.
Speaker 4:And, that that will help things a lot better than, you know,
Speaker 1:you know Than SpaceX. Oh, sure. Sure.
Speaker 2:Sure. Yeah. Interesting thing right now looking at the valuations of the Mag seven and then you add SpaceX in there and then you add, you Anthropic and OpenAI and SpaceX will look potentially make Anthropic and OpenAI look cheap on just like a But multiple then it still looks very expensive versus let's say like a meta, right? Yeah. Sitting at 1 and a half trillion Yeah.
Speaker 2:With with one of the best businesses of all time. Yeah. I did I did wanna ask you about Meta, your kind of updated mental model. They obviously had a big painful round of of layoffs today to be able to afford their inference bill. I'm I'm joking there but it does seem like, you know, they're effectively whatever they're saving on on comp, they're just sort of reinvesting into AI.
Speaker 2:AI, both CapEx, but also their their inference bills. How are you
Speaker 4:I I you asked asked me the same question, you know, six, seven weeks ago and, you know, I think reported an unbelievable quarter. I mean, if they're growing at 33%, like, crazy amounts of profits, like, there's market set skepticism that they could do well in AI models, but, you know, there's also the plan b. Like, you could say the same thing about what happened with Elon and x AI. Like, they were able to there's so much demand in this megatrend hypercycle
Speaker 7:Mhmm.
Speaker 4:That even if they falter a bit, they could sell compute capacity to to the highest bidder that's out there. So I I wouldn't count Meta out. I actually think, like I said, their core advertising advertising business is more durable than the Google search engine right now, which if you go, you know, it's filled with ads everywhere, it's not it's not a great experience. And a lot of that a lot of that traffic is gonna shift over to AI chatbot. So I if you actually look at the numbers, Meta is is their core business is very durable, has competitive advantage.
Speaker 4:It's growing still growing like a weed. I I I just wouldn't count them out.
Speaker 2:Yeah. Yeah. Basically, as soon as they either have an AI breakthrough or they pull back on AI, the stock has to rerate. Right?
Speaker 4:Yes. Yes. I mean, that's the same thing happened with with with the the metaverse stuff. Yeah. As if they start cutting back spending, you rerate rerate higher because Yeah.
Speaker 4:All all those losses don't don't hit the income statement.
Speaker 1:They look tiny now.
Speaker 2:Yeah. It'd be so it'd be so wild to think about what Meta's stock would be doing right now if the metaverse debacle had never happened. Mhmm. Because the metaverse was like this high conviction bet on a category that was just way too early and yet AI doesn't I think you're right. And yet they feel like late on AI.
Speaker 2:I think Mark felt late or at least clearly felt behind enough to to to sort of, you know, 10 x the seriousness. So
Speaker 4:I I think it's just yeah. I think they're a little more skeptical because of what happened with the metaverse where they spent tens of billions of dollars Yeah. That has pretty much gone.
Speaker 1:Yeah. Yeah. Becoming a Neo Cloud is a weird outcome for a hyperscaler that could totally have a cloud platform but has not historically. And you would imagine that there's a whole bunch of hard won lessons that Azure, GCP, AWS went through, organizational decisions, structures, just key people in place. It feels hard to spin up immediately.
Speaker 1:At the same time, there's neo clouds that are scaling revenue extremely quickly every day. So I I I agree with you that it is it is a possibility, but a whole set of new challenges if that's the direction you
Speaker 4:guys the worst case scenario. Right? Like, they they they wanna use the AI compute capacity to make their internal businesses better with Yeah. The all the ad personalization and monetization and create this stuff. And and actually, I've been playing playing around with OpenClaw for the first five a few weeks ago.
Speaker 4:And, yeah, I've been using WhatsApp and that's the future. Everyone's gonna have a digital assistant. It's like so amazing. I ask it to give me the top 20 stories. It's powered by the latest version of Codex.
Speaker 4:Yeah. It goes out there, searches every day for me, and emails me the top 20 stories I should read.
Speaker 1:That's cool.
Speaker 4:It's really smart. Yeah. You guys should try it. It's actually amazing. Yeah.
Speaker 4:And the thing I'm thinking is like, why can't Meta do this? I mean, have this Meta AI that's
Speaker 1:not powerful. But,
Speaker 4:you know, having this little channel for my little t bot, I call it, t bot. And and all he does is WhatsApp it and say, do this. Do this. Find this for me. Find this for me.
Speaker 4:Everyone's gonna have this.
Speaker 1:This is
Speaker 4:the basic thing.
Speaker 1:Yeah. And I'm using WhatsApp. Big the the big headline token were from Google was that they seven x token production across all of their services. That actually seemed a little low to me given how broad the the surfaces are and how crazy the models have gotten in the last year. But I would expect to start seeing that out of Meta because now when you go to Instagram and you search, it gives you a little AI overview.
Speaker 1:And obviously, have the Meta AI app, and I would imagine that there's more AI hydration happening across the ecosystem.
Speaker 4:Anyway And this digital assistant thing is gonna be like, OpenClaw, like, I was skeptical until I tried it. I'm like, oh
Speaker 1:my gosh.
Speaker 4:So Meta should be all over this because it's on their
Speaker 1:And probably with the Ray Bans, they'll do it. Well, thank you so much for coming on the show. Always great hanging out.
Speaker 2:Great to see it. It's a what do you do for NVIDIA earnings? Do you do you just like turn off all the lights in the room and and like just like sit case
Speaker 1:of beer, nachos, big screen TV.
Speaker 2:Super Bowl? Is it more like a Super Bowl or like a No.
Speaker 4:I I wish like we should bring back those bar crawls like Yeah. They had it they did it once. Okay. And then it stopped. Like, we should bring that back.
Speaker 2:Too much of a top signal.
Speaker 4:Is gonna be the number one most valuable company for a long time. Yeah. Like, sorry, alphabet. It's not gonna happen.
Speaker 1:Yeah.
Speaker 4:So we should bring those those bar earnings parties back.
Speaker 1:That sounds great. Well, we will talk to you soon. Have a great day.
Speaker 2:See you. Alright.
Speaker 4:Thanks, guys. Good to
Speaker 2:see Before you
Speaker 1:we bring in our next guest, I wanna actually pull up this Wall Street Journal article, see how SpaceX is about to eclipse every other blockbuster IPO. Scroll down on this because they have a beautiful visualization of IPOs over time. You can see the first graph. The these are IPOs over the last seven years ranging from $0 raised, probably $10,000,000 $100,000,000 all the way up to $2,000,000,000 Continue to scroll down, and you'll see what happens as the blockbuster IPO starts stacking up. You get Airbnb, who we're talking to the founder of just in a few minutes, ARM, Cerebras, Uber and Porsche.
Speaker 1:And then as you keep going, Saudi Aramco comes in at $25,000,000,000 if you keep scrolling down. And then eventually, SpaceX comes in to dwarf them all at 80,000,000,000 to make everything else look like a flat line on the chart. Absolutely blockbuster IPO and should make for a ton of great takes and analysis, and it'll be a fun fun day on the timeline when SpaceX goes goes public soon. We're getting the s one any day now. Well, our next guest, Ahmad from Mercury, is here with a big funding announcement.
Speaker 1:So we'll bring him in from the waiting room into the TBPN. I'll throw him a mod. How are you doing? Here he is.
Speaker 7:Yeah. Great to be here. Am I not gonna get the dong?
Speaker 1:Oh, you'll get the dong, but you gotta give us the news. Tell us what happened.
Speaker 2:Be patient. You gotta give
Speaker 5:us what happened. Alright.
Speaker 7:Juffy Jaw. There we go.
Speaker 1:How much did you raise?
Speaker 7:Yeah. We just raised 200,000,000. Wow. $550,000,000. There we go.
Speaker 7:TCB is leading. So excited about the announcement today.
Speaker 1:That's fantastic. What it was the traction that unlocked this new fundraising round? What was the catalyst?
Speaker 7:You know, we've just been kinda grinding away for the last what is it? Seven years since we launched.
Speaker 3:Super Night success.
Speaker 7:Seen a lot of growth in q one, especially about 2.5 x our q one last year in terms of applications. I don't know if you've seen the stats, but there's been a lot of new business formation. Yeah. A lot of, you know, companies being built using AI. So obviously, we we hear about, like, these big startups in AI, but there's also just like normal businesses being built with AI being a big catalyst.
Speaker 7:And we saw, yeah, big increase, 2.5 x over last year, which and last year was a big year for us.
Speaker 1:How are you reaching those customers? Like, are the key funnels that draw in these new businesses? You know, the other it's hard to reach out to them before you have to be very aware.
Speaker 7:The other crazy thing for us is we most of our growth is organic, but that even the percentage organic has been growing for us. Even though we're growing, we're getting more and more organic, which, you know, is unexpected. And the other big channel for us is LLM recommendations. So if, you know, you go into Yeah. Your favorite LLM and you say, you know, what bank should I use for my startup?
Speaker 7:Mercury is often the recommendation.
Speaker 1:There you go.
Speaker 7:That's the yeah. We try to deliver the best customer experience possible and, you know, because people really love Mercury, they tell their friends about it and that's Yeah.
Speaker 2:Like a nice idea for us. What what is is like 90% of the reason that you guys are recommended so highly by LM's is just because people recommend Mercury Like, so I I I can't be I I I I'm just trying to get at is it like your team was like, hey, we should really optimize this or it was just
Speaker 7:think it's really hard. Like, there's a whole thing called GEO which is like all about optimizing for LLMs. But at the end of the day, you know, if it's on Reddit, it's on X, like, if all the content is recommending Mercury, then that feeds into the algorithm.
Speaker 1:Yeah. It helps to have been doing press for years. There's a huge advantage to being in business seven years. Not so long that you're the the articles are about the downfall or like the the how you're a dinosaur. All the coverage is that it's new and interesting and valuable and worth checking out and so that services.
Speaker 1:How are you thinking about going deeper in those LLM recommendations and sort of like the agentic commerce of actually opening an account? Is that something that's on your horizon to integrate that?
Speaker 4:So kind
Speaker 7:of interesting thinking about, like, the LLMs using Mercury. So we actually launched Mercury CLI. Sure. We launched that was a month or so ago, we launched an MCP actually in December. Yeah.
Speaker 7:And our growth on, like, those is, like, through the roof. So in terms of people are using Claude Code or Cowork or ChatGPT to connect to Mercury and then, you know, I think the well, not for everyone, but for a lot of people, they've kind of running their whole business and their life in AI now. And, you know, if you can pull in creating an invoice or like approving a payment and it's all done within your an existing workflows, that's really powerful. And I think if you there's a flywheel between like if you build great tools that AI can use, it actually recommends those tools even more. I mean, that's partly why like, you know, people like Superbase and Yeah.
Speaker 7:Like those kind of tools
Speaker 1:that run with. How do you how do you deal with the tension of, like, you could build a dashboard visualizing payments that are made into a bank account over a period of time. You could also expose an API that allows me to suck out all the data and vibe code my own dashboard the way I like it. There's probably demand for both. Do you just have to do both?
Speaker 1:Do you pick a lane?
Speaker 7:I I think for us it's like do both. So we're building both kind of the CLI and we we have a whole team that's improving all the features available via the API and Yeah. Those those services. But we also have another team that's working on and we just launched Mercury Insights which, know, summarizes your transactions, gives you like kind of AI insights on end, lets you talk to your transactions. Then later this year, we're launching Mercury Command where you can do kind of complex workflows like, hey, I just hired someone, set them up in payroll and create a card and do all of that without me having to kind of click around all the kind of mercury surfaces.
Speaker 7:And I think number one, I don't know exactly where the world is going to go. Right? Like, maybe maybe everyone is going to be using AI assistance to do everything or it's going to be a combination. So we want to service both of it. And b, you know, if you think about like the gap between us and kind of these incumbent banks, yeah, even whether it's like a mobile app or like searching for all your transactions, whatever it is, you know, Mercury has been far ahead.
Speaker 7:But if AI keeps changing the world and, like, you know, the people's expectation of interfaces and things like that changes, we want to be at the forefront of that and, you know, that's gonna increase the spread between, like, what people get from Mercury versus, like, what they get from the incumbents.
Speaker 1:Yeah. I was reading an article in The Economist a couple weeks ago about stablecoins going through a boom last year and then going through a bit of a winter or like a maybe just a, you know, stable volumes through the earlier part of this year. What are you seeing in terms of demand or tickets or usage of stablecoin related features in fintech broadly?
Speaker 7:Yeah. I think it's a lot more important on like a global basis. Mhmm. I think if you're in The US and you're sending money to a US business or you can US consumer, you know, why is ACH all of the cards, all of that works pretty smoothly. Yeah.
Speaker 7:If you're paying money internationally or, you know, you don't you're in The US and you want to have like a stable currency Mhmm. That's where USDC and these other stablecoins are doing really well. So, you know, we don't currently support it natively, but lots of our customers use, you some know, of these kind of Stablecoin services. And we'll probably have kind of at least payment features that are based on Stablecoin, especially for those kind of international payments where it is particularly useful. So I don't necessarily see it as a replacement for The US banking system in The US.
Speaker 7:I think it's it's more of like this kind of global connectivity layer.
Speaker 1:Is oh, sorry. George.
Speaker 2:Why why was this year the right time to get into payroll?
Speaker 7:You know, we've been expanding our services. So obviously, we're known best for banking, but we've had a corporate credit card for three years and that's growing really fast. We have a bill pay and invoicing solution. And, you know, over time, I really want Mercury to be the place that you do most of your business finances. Right?
Speaker 7:It's kind of annoying. Like, if if the money is here and your users are here and your finance team is here, you know, you want to have all of that kind of in in one place. So, yeah, we made an acquisition in payroll. We acquired a company called Central. They're running you know, we're continuing to run them, and we're gonna gonna over time make it more like a fully integrated Mercury payroll solution.
Speaker 7:But, yeah, payroll is like a big category. You know, it's kind of annoying right now when you're using a payroll provider. You have to send money. It's kind of sits around for four days before it shows up on your employees. And, you know, Central has done a really good job with kind of AI first.
Speaker 7:Like, they have this whole interface where you can do a ton of things in Slack and, you know, we're we're kind of taking some of that learning and and putting in our own kinda command launch.
Speaker 1:Yeah. Is is the AI boom helping you sort of rethink product road map expansion differently than a few years ago? Like, when I think about neo banks, fintech, modern technology enabled banks, I I think like you could eventually do auto loans, mortgages, consumer. You could do all sorts of the insurance. There's so many different products in the financial technology world.
Speaker 1:I know that there's incredible value to focus. At the same time, there's this foundational unlock in being able to move very quickly into new markets. How are you wrestling with that tension?
Speaker 7:I think, number one, we want to talk to our customers and see what they really want. I don't want to invent things that they might want kind of thing. It's definitely accelerating. I think the two vectors are like, a, it accelerates software development. It doesn't necessarily make like kind of the more financial like it doesn't make lending that much better, faster or whatever.
Speaker 7:Maybe you could underwrite a little better, but there's still kind of limitations. But you can build software, especially new software, much quicker. So definitely thinking about that and like we're already seeing an acceleration in kind of new software launches we're doing. I think the other thing that's kind of interesting is interfaces tend to get cluttered over time, but AI has a decluttering effect. Like you can kind of personalize it to someone's need.
Speaker 7:And like, I really think the future is people are not trying to do a specific thing, but they kind of just talk about a problem. They're like, hey, I just need to make payroll, like, you know, help me think it through kind of thing. So you can go like a level above, like solve the problem rather than like be like a feature Mhmm. Which I think like has a decluttering effect to interfaces.
Speaker 2:That's good. Yeah. It's so it's so amazing. I just think back to, you know, ten years ago at this point like starting to to build companies and just seeing how many things I expected to be intuitive. Like I expected my bank to be able to help me pay my employees because like the function of a bank is to like Yeah.
Speaker 2:Hold money and let you do things with it and yet obviously, you know, it took took some time for you guys to enter payroll and then all these all these other things like just just the concept of getting getting an invoice, wanting to pay it, like you really should be this simple as like dragging it somewhere and then that's it. Yeah. Right? And so there's all these things that like right in this moment, there's gonna be an entire generation of entrepreneurs that like only knows this like completely frictionless business finance and I'm very happy for them. Yeah.
Speaker 2:And I'm happy for all of us that that had to go through do it the hard way for for so long.
Speaker 7:Yeah. When I started Mercury, that's actually got what got me excited that like after you build a bank account, there's so much more to do after that. You know, I really didn't wanna this is my fourth company, so I really didn't wanna do like this thing where you build a thing and then all you do is like incrementally improve it a little bit over like a decade. Like I really wanted to do something where like the start is just the start and it's kind of a platform to build a lot. So Yeah.
Speaker 7:I'm exciting excited that we're like finally like getting to build build that kind of multiproduct strategy.
Speaker 1:Last question. Deployment pace for angel investing. Are you accelerating it? Are you decelerating? What are you doing on the
Speaker 7:angel Maybe investing I'm a little old school, but like when I think when the valuations are the highest and the hype is the highest, you should like not accelerate. You should like, you know, we saw 2021. Like, I'm trying to keep like a continuous pace. Like, I think it's total Don't
Speaker 2:you know this time is different? Yeah.
Speaker 7:I you know, I think that that that like, there's a reason for the hype and there's really exciting companies being built. But I think it's gonna be even more fun when the valuations come down after the hype dies down and you can like then deploy, you know. It was crazy no one was deploying in 2022 and 2023 when like Yeah. It was the same companies at like a massive discount.
Speaker 1:Yeah. Yeah. No. I mean, the smart funds were and a lot of great companies made it through, grew even bigger and are bigger than they've ever been as you are. So congratulations on all the progress.
Speaker 1:Thank you for coming on the show. Will talk to you soon. Yeah. Have a good rest of your day. Goodbye.
Speaker 1:There have been a number of AI images hitting the timeline. One was of Peter Thiel eating ice cream in Buenos Aires. He has been spotted at a chess match. I think that image was not AI. This one is AI generated by Cat McGee, but it still sparked a bunch of funny reactions.
Speaker 1:One of them, the question you need to be asking is what delicious ice cream is almost nobody eating? Of course, the Is
Speaker 2:mint chip properly rated or underrated?
Speaker 1:Mint chip might be underrated. I think it gets thrown in with the chocolate category. It's sort of a second fiddle to the vanilla strawberry chocolate.
Speaker 2:Always I a mint chip
Speaker 1:I like mint chip. I I was always strawberry. I like I like strawberry ice cream. Question. But I think as as you zoom in on this AI image, you can tell that it's AI.
Speaker 1:It's just too crystal clear, too well lit for, you know, someone to snap a picture unnoticed in Buenos Aires at a at a at an ice cream parlor. This would be this would require professional lighting to get something like this out of a camera on the fly if you saw someone. Zero to yum is what they say. Anyway
Speaker 2:Question Yes. John What? That I was asking you this morning. Yeah. Do you think it's better to rest on your laurels
Speaker 1:Mhmm.
Speaker 2:Or sleep at the wheel?
Speaker 1:I think
Speaker 2:have my answer but I hear I
Speaker 1:think in the modern era, sleeping at the wheel is increasingly safe because of self driving cars. That's right. You can be you can be sleeping in a Waymo. You could be sitting in the front seat. I don't know.
Speaker 1:Do they let you sit in the front seat of a Waymo?
Speaker 2:I don't think so. Maybe if there's a fourth. Yeah. Can you can you not not behind the wheel.
Speaker 1:Not behind the wheel. If not But what if I'm in the back and I wiggle my body through the front two seats, sit in the front, it'll stop the car?
Speaker 2:They're gonna come on the phone.
Speaker 1:They're gonna They will. Stop. Okay. Well, then it seems like it's increasingly difficult to sleep at the wheel and so perhaps resting on your laurels would be the better option.
Speaker 2:Think so because it allows you to one one, it's obviously comfortable Yes. And quite relaxing. Yes. But but just because you're resting doesn't mean you can't get back in the game.
Speaker 1:Yeah. Also resting on your laurels implies that you have laurels to begin with, whereas at the wheel, you just have a car.
Speaker 5:Yeah. It
Speaker 2:could be might not even be your car. It's also very Lindy. Right? People have been doing this for thousands of years. Can imagine a Roman emperor
Speaker 1:Resting on laurels. Resting on their laurels. But they weren't sleeping at the wheel. They hadn't invented the wheel. They barely invented the wheel.
Speaker 2:I think they had the wheel.
Speaker 1:Well, would ride on top of wheels.
Speaker 2:They had planning they to reinvent the wheel.
Speaker 1:But no one had a a wagon that had a wheel that would steer the wagon. True. You had reins. They would take the horse by the reins. That's isn't that the phrase?
Speaker 1:Take the bull by the horns? What's the reins idiom? There's some sort of reins idiom. Anyway
Speaker 2:Yeah. No. I think I think personally
Speaker 1:Resting on your laurels implies that you have laurels to rest on. Sleeping on the wheel means that you just behind
Speaker 2:the You could be in a sudden death situation.
Speaker 1:Much much riskier.
Speaker 2:High risk. High risk low reward. Yes. Almost very very
Speaker 1:Plenty of people rest on their laurels and just fade into obscurity. They aren't met with a with a true downfall if they're resting on their laurels.
Speaker 2:But sometimes you just rest, recharge Yep. And get back in
Speaker 1:the game. But ideally you avoid both. Ideally you avoid both sleeping at the wheel and resting on
Speaker 2:your laurels. Imagine just a bunch of laurels in your driver's seat and you're just sitting You
Speaker 1:could be doing both at the same time.
Speaker 2:You could doing both. That is the riskiest possible scenario because you're gonna be the most relaxed. Yeah. Highest likelihood of, you know, careening off the road.
Speaker 1:You wanna avoid both. You wanna avoid both. What do you think of this desk? Herman Miller launched a gaming desk. People are saying it's tasteful.
Speaker 1:A tasteful gaming setup for once. They thought it was impossible.
Speaker 2:You personally find pretty much all gaming setups tasteful. Extremely tasteful. A big part of your culture.
Speaker 1:I love I love a gaming desk. I don't know. The the the thing is that I I don't know. This watching this video of the Coil gaming desk, it doesn't scream that tasteful to me. It seems like a minor upgrade.
Speaker 1:Probably the best gaming desk out there. Seems very functional. I also I don't know why there's a back panel there. I don't know what that's for. Is that for, passing wires through perhaps?
Speaker 1:But, how would you rate this gaming desk? Is it tasteful?
Speaker 2:I like it. I like the red coil. I like a pop of color.
Speaker 1:Okay. A little color in there.
Speaker 2:I love that's that that Good. Color
Speaker 1:red is one
Speaker 2:of my favorite colors. Yeah. I think I have a I have a
Speaker 1:What is the coil for? Oh, it it takes the cable down so you can plug it in because it's adjustable.
Speaker 2:Almost certainly power.
Speaker 1:I feel like they could just thread that through the leg and it wouldn't even be there. But I guess it adds a pop of color.
Speaker 2:Chad is saying
Speaker 1:Overdesigned. Overdesigned. We'll see. Herman Miller Herman Miller has a whole gaming division, I suppose. Anyway, you gotta remember this is from Will DePue.
Speaker 1:You gotta remember that there's some guy out there who's the Michael Jordan of steel processing. He's on a generational run right now. Everyone sees their niche as the center of the world. So many greats you'll never hear of. The Michael Jordan of steel processing, we gotta find him, dig him up, get him on the show.
Speaker 1:We've had the Michael Jordan of acquiring rare parcels of land in Montana on the show.
Speaker 2:We gotta have him back. We should He's gotta be pretty excited for this upcoming round of IPO.
Speaker 1:Data center build outs?
Speaker 2:A lot of
Speaker 1:I don't know.
Speaker 2:Anyway Lot of those IPO.
Speaker 1:We can come back to the land the land strategies because we have our next guest here Brian Chesky from Airbnb back on the show. Only a few weeks since we talked to you last. Welcome back. Thank you so much for taking the time. How are you doing?
Speaker 9:Hey guys. How are doing? Great see
Speaker 2:you. We're not in I'd be better if we were in a blimp
Speaker 8:right now.
Speaker 1:It'd be better if we were in a blimp, but Coming soon. Show closer to hanging out on a blimp together. Give us the update. What's going on in Airbnb world?
Speaker 9:So we announced a few things. The first thing we announced is a whole bunch of new services Mhmm. Probably starting with grocery delivery. A lot of people love that Airbnb's have kitchens. So now when you book an Airbnb, you can have groceries waiting for you in your Airbnb.
Speaker 1:Oh, that's great.
Speaker 9:A number of people tell us that if you go to Rome, it's hard to get an Uber. So now there's gonna be someone that can welcome you at the airport and pick you up and take you to Airbnb. We also announced finally car rentals. Oh. A long time coming.
Speaker 9:And so now you can get a car rental on Airbnb. Right. And we also announced that we have now boutique and independent hotels. If you book a boutique or independent hotel, we are creating a price match guarantee.
Speaker 10:Mhmm.
Speaker 1:So if you
Speaker 9:see a lower price anywhere else, we will give you the difference back in Airbnb credit, and we'll give you another 15% towards the next booking of anything on Airbnb. Mhmm. So those are just a few of the things that we announced. Really, the basic idea is just continue to listen to customers, continue to listen to our guests, listen to our hosts, and just keep them expanding and perfecting the service, and trying to make Airbnb a bit of an ecosystem Yeah. Of other developers and other apps.
Speaker 1:Yeah. This feels like the fruition coming to reality of, like, a lot of the pitch that you gave last year. What was involved in actually getting to this point? How much of this is predicated on new software development, new product initiatives versus partnerships with existing areas? Like a lot of these feel like they touch the real world.
Speaker 1:So it's not just an extra line of code or an extra panel or button in the app.
Speaker 9:Yeah. I mean, it's a good question, guys. The app that most people see is maybe something like 20% of Airbnb. There's also a host app. But again, most of the work about Airbnb is what happens in the real world.
Speaker 3:Mhmm.
Speaker 9:And I think I said last time that we spend a lot of time imagine like you're living in a one story house and then suddenly a bunch of people want to move into your house and you have to add like a second, third, fourth floor. Yeah. But you didn't build the foundation for a four story building. And so what we had to do over the last few years was kind of rebuild the foundation. It really was only built for homes.
Speaker 9:It was not built to do other things. Amazon had this problem in the late nineties. They were built on ISBNs for books. And they had to basically take their website and turn it into a bunch of primitives. So we basically already done that work.
Speaker 9:To give you an example, it took us sixteen years to finally expand beyond homes. It took us two years to develop service experiences. It took us eight months to develop groceries, and it took us only two months to develop luggage storage, airport pickups, and car rentals. So basically, looking at the time to launch from conception to launch, we can now have an idea and put it into a market sometimes within like a couple weeks to a month. And what that should mean is instead of announcing one or two things a year, eventually we can announce dozens of things a year.
Speaker 1:Yeah. I
Speaker 2:Sorry. Cars. Why obviously, a hard thing to do, but I'm sure people have been asking this to for for, you know, a decade now. Yeah. Why did you choose at some point not to maybe listen to your customers?
Speaker 2:Why are you why are you making those why was, like, why was now the right time? Because it just feels like such such a, you know, such an obvious thing. I'm booking a trip somewhere, you know, give me one click to to add a car. Obviously, there's more that needs to happen on the back end, but why?
Speaker 9:Yeah. Another great question. And I asked myself that, like, why didn't we do certain things sooner? And if I could, I would have. You know, I remember that one of my early investors said starting a company is like jumping off a cliff and assembling the airplane on the way down.
Speaker 9:Never realized when I started a company that never realized I thought if you hire thousands of people, suddenly you have all these extra people to do all these extra things. Yeah. But when you're when we are in hyper growth, we basically just had most of the people just trying to keep the lights on. And we really struggled in the 2,000 during our hottest moment to really expand beyond our core business. We tried in 2012, didn't really work.
Speaker 9:Tried in 2016, didn't really work. We finally thought we cracked it in 2019. And then suddenly the pandemic hit. We lost 80% of our business in eight weeks. We said, oh, man, we don't have time to do this right now.
Speaker 9:We got to go back to our core business. So we've kind of had three different starts. And we tried it before, we just never really were able to stick the landing. I think this time we finally can. So yeah, people have been asking for us for more than a decade, in fact, fifteen years.
Speaker 9:2011, we began thinking about it. And now, I hope I'm happy to say that, hopefully, going forward, we won't have to wait fifteen years for another service. So we'll be they'll be coming really fast now.
Speaker 2:Yeah. And and how how is it working under the hood? Are you partnering? Like, is this a also kind of like sharing economy play? Are you partnering with car rental services or both?
Speaker 2:I imagine you want to Yes.
Speaker 9:It's going be a mix of things. There's not really a lot of global providers. So we're going to be working with a number of different partners that be able to that can fulfill this. Some of the services like Bounce, like we don't do luggage storage, they have 15,000 locations, almost as many of them are Starbucks. So that's more like an app store integration.
Speaker 9:And then sometimes we have to build the services first party with their own host because they don't offer it. With car rentals, we're basically able to partner with a bunch of companies. No one company covers every geography in the world. We're in more countries than Coca Cola. So you have to patch a bunch of things together.
Speaker 9:I think over time
Speaker 2:more countries than Coca Cola?
Speaker 9:I think that. Like, we were at least last time we checked.
Speaker 2:What is what is Coca Cola doing? They're asleep at the wheel.
Speaker 9:I know.
Speaker 1:Come on. I think we're
Speaker 9:in every country but North Korea
Speaker 1:Yeah.
Speaker 9:Iran
Speaker 1:Yeah.
Speaker 9:Syria, Russia, Belarus. Maybe there's one other. So we're just about every other country.
Speaker 2:Yeah. The other thing with cars that and and as I was just like thinking about that, as as kind of Turo came on the map, the one of the and I love cars. So it was always I I I thought very briefly of, maybe I should get a bunch of cars that I like and maybe turn it into a little business. I quickly realized that, like, it's, like, fundamentally a a wildly different business because if I have a property and I put it on Airbnb, even if people are staying in it three hundred and sixty five days a year, if I buy at the right price and in a great market, it will continue to appreciate. Cars are the exact opposite.
Speaker 2:Mhmm. And it's just like a wildly different financial equation. And so it may that always made sense to me just from that lens where the supply side is like incurring some like heavy heavy costs associated with actually like supplying, you know, providing that supply versus on the Airbnb side, you know, again, you're you you can get a bunch of rental income and not not occur any, you know, significant losses associated with the asset.
Speaker 9:Yeah. I mean, I think that's a really, really good point. And usually, people's second biggest asset after their home is their car. Sure. And so I think now we have people's time, we have their homes, we have their cars.
Speaker 9:We would like to move to a lot of different other categories. Over time, I think you'll see a couple dozen other categories coming over the next year or two on Airbnb, essentially building this entire ecosystem of services. But you're right. I mean, think maybe one way to think about Airbnb is like just getting more capacity utilization out of assets. You know, anything that's empty, it could be further monetized and the world could be a bit more efficient.
Speaker 9:It could be cheaper to own a car. It could be cheaper to own a house if you could defer the cost by sharing with other people. That was basically how it started. I couldn't afford to pay rent, But that doesn't limit itself to homes, as you mentioned. It could be anything.
Speaker 9:Cars. It could be boats. It could be equipment you have laying around. It could be kind of anything.
Speaker 1:How do you think about the the previous services that have tied into Airbnb? Was there ever a power law distribution in those any few services? We've talked about fitness trainers when you're in a town or private chefs or anything that can add to an experience, a kayaking tour, a hiking tour. Was there a power law distribution in those? Are you seeing breakout successes in those?
Speaker 1:Like what's the shape of that side of the business these days?
Speaker 9:Yeah. So basically, we learned two things with these services. I'll talk about service and experiences. Yeah. There are three services.
Speaker 9:We launch a ten, three breakout hits. Mhmm. The three breakout hits are photography. A lot of people want photos on their vacation. And obviously, if you're a family of four
Speaker 1:Yeah.
Speaker 9:Like, one of you is not in the photo or you're giving your camera to someone else and, you know, you wanna remember these trips. So having a professional photographer take your photos for thirty minutes
Speaker 1:Yeah.
Speaker 9:Is pretty reasonable cost. Yeah. That's very popular.
Speaker 1:Yeah.
Speaker 9:Chefs chefs are not as popular in very urban areas, but like, let's say go to Lake Tahoe. Yep. You have a big kitchen, maybe you have groceries, maybe you don't wanna cook. Yeah. A chef could come over.
Speaker 9:There's not a lot of restaurants there. And then the third one's massage, especially again, in vacation rental or villa massage is very popular. Other than that, it's really geography by geography. So we see like in Salulita, it's a different kind of experience than say in like The Caribbean. So it really depends geography by geography.
Speaker 1:Mhmm.
Speaker 9:With regards to experiences, we're seeing a couple of things. Number one, no surprise landmarks. People the first time you go to a city, you want to see a landmark. But the thing we learned is the second time you go to a city, you don't want to see a landmark. You want to experience food.
Speaker 9:And the third time you experience a city, now you want to get inside access. So a big thing we learned is, is this your first, second or third time to the city? Or do you live there? And depending upon the answer to the question depends on the type of experience we offer you. This is a nuance that we didn't really appreciate the first time around, and now we do.
Speaker 9:And I think my prediction is the thing that will make service experiences really big is people will start booking them in their own city. That's when the TAM goes by a factor of 10. And not to say it'll be every day, but it just makes it a lot bigger TAM.
Speaker 2:Yeah. Yeah. Just just clicked for me that, you know, one of the challenges of all the marketplaces like photography, chef marketplaces, massage, all of them I can't even really think of their names even though there was like venture funded companies in those categories because the second you hire a chef, they're literally preparing you food. You immediately develop like trust and a relationship. And so in if you book find a chef in your hometown
Speaker 1:You're talking about disintermediation.
Speaker 2:You're gonna have this massive disintermediation
Speaker 1:also, like economies of scale, if you're just the private chef booking company, very hard to support Yeah. The entire operation, the back office. But Airbnb is a big company. This can be one of many features and the
Speaker 2:the Yeah. It's like, yeah, want a photographer here. Yeah. I want a chef here.
Speaker 1:Yeah. Yeah.
Speaker 9:You bring up two points. I'll I'll bring up both points. So one thing is most services, there's not even one app in the world. Yeah. So if you want to get a massage in The United States, you might use an app like Zeel.
Speaker 9:But if you want to get a massage in Korea, I don't even know the app. It's probably a Korean company. And if you want to go to Brazil, it's gonna be a different company. Mhmm. So it's not even possible for most people to know which app to use in which country.
Speaker 9:And so being able to aggregate all that demand is great. And these apps, these developers love it because we basically are their international expansion strategy. Another most of these companies, the hardest challenge they have is growing internationally. And we say, well, we can introduce your brand to a global audience. Well, now let's talk about locals.
Speaker 9:Yes. I don't if you're going to do a repeat service, we don't want to charge 15%, 20%. Mhmm. We're going to have to decide a business model. And maybe there is no commission or it's a very, very low commission.
Speaker 9:And maybe the value there is this, we make your life easier. And I don't I think this brings up a larger point, is we don't need to monetize every experience on Airbnb. The best thing is to have a great relationship, add value, and know that there's enough high value assets we can make money on, and we don't need to try to get every last dollar. We just really want people to love our service. And as you know, we generate quite a bit of free cash flow.
Speaker 9:We're one of the more profitable companies as free cash flow standpoint. So we are able to pass a lot of value on to customers.
Speaker 2:Yeah. I think I think, you know, that that framing as like a concierge for the world where like if you're staying if you're staying at a hotel, like the concierge is not always thinking like, okay, this person wants something to do today. How do I get the maximum amount of value out of them in this moment? Right? Because then you'd always send them to, well, why don't you eat at this restaurant on the property?
Speaker 2:Or why don't you do this thing on the property? But just like actually taking a a positive sum view and just know that like you wanna be core to someone's experience wherever they are in the world, think is
Speaker 9:I like concierge for the world by the way. That's like a very good slogan actually.
Speaker 1:Coinage. I love it.
Speaker 2:It's all yours. It's
Speaker 1:all So maybe this is a random pivot but the total solar eclipse is happening 08/12/2026. Oh. I wanna know it feels like it's driving a lot of travel broadly. And I wanna know like do these special events
Speaker 2:First of all, like I feel like every time there's like one of these things Yeah. It's like this will never happen again for for six hundred years and then it happens in like two years.
Speaker 1:No. No. No. No. It's a very specific
Speaker 9:happens every two years,
Speaker 1:but there's a
Speaker 9:lot of things.
Speaker 1:Yeah. So a couple of years ago, it happened in Texas. And and this time, it's happening in Greenland, Iceland, Portugal, and Spain. And so there is a lot of travel, I've heard stats from other companies. And I'm just wondering about these, like, big events.
Speaker 1:First, like how much do they show up in the data? How much do you see them? And then second, like what are you doing to like amplify and get the most out of these, let your customers know? Because you frame this as like sometimes the best experience is like when you know it's the first time visiting a place, second time, third time. But at the same time as a user, there's this tension between I love it when a company knows something about me before I have to fill out a form, But also it gets a little creepy if they know too much about me and this like this weird tension where I want you to know but I don't want you to tell me that you know and I don't want to fill out the form but I don't want you to spy on me but I sort of do want you to spy on me.
Speaker 1:So walk me through all of that.
Speaker 9:Okay. So yeah. Two parts. I'll do the solar eclipse and then we'll talk about Sure. Essentially personalization without being creepy maybe is the point.
Speaker 1:Yeah.
Speaker 9:Okay. So on the solar eclipse, in 2024, I think it was the spring or I don't know when it was in 2020 we were able to see a heat map. So, yes, you saw in the data and we're able to see a heat map of the exact path of the solar eclipse and you could look at a heat map of all of our bookings and anyone that was in that line of the eclipse, you saw a massive increase in bookings. Mhmm. When the Taylor Swift Era's tour came out
Speaker 1:Oh, yeah.
Speaker 9:You could literally follow the tour from the data on Airbnb. Mhmm. When the World Cup came in Paris I'm sorry. The Olympics came in Paris, 700,000 people stayed in Airbnb. That's like eight, nine Olympic stadiums worth of people.
Speaker 9:In Milan, 200,000 people stayed in Milan and Cortino for the Olympics earlier this year. The World Cup's coming up in Mexico, US, Canada. We're expecting that to be the biggest event in Airbnb history. You're actually hitting on a really key point. The only maybe the reason Airbnb exists is this weird phenomenon where people list their homes for an event.
Speaker 9:Most people have only intention of listing one time, but about 50 of the people continue hosting. Yeah. And so it's kind of a hook. And a lot of people are like, don't want to host, but they do it once. They make a bunch of money.
Speaker 9:They realize it's not weird and they keep doing it. If it wasn't for this phenomenon, there may not have been an Airbnb. We used events to grow. So that is basically a core part of our strategy or Lollapalooza.
Speaker 2:Airbnb futures. I should be able to go buy buy I should be able to go, you know, see events that I know are gonna happen, Olympics, World Cup, and basically buy and then resell. I'm kidding.
Speaker 9:Oh, and then I wanna I wanna answer the second part of I think John's question which is personalization without being creepy. So right now, I think most websites and most apps don't really ask you questions. They infer things. Right? They think that if you ask somebody a question, that's friction.
Speaker 9:And so for twenty five years, this is Amazon, this is Instagram, this is basically every app, including Airbnb, we're mostly just looking at what you click on, what you book, your prior behavior, and we try to infer based on that what you want in the future. I think going forward, we're going to go beyond that. We're going to do two things. The first thing we're to do is we're going to ask you questions. That's what an agent does.
Speaker 9:An agent asks you questions. So your concierge for the world should ask you questions. You went to a travel concierge, but they they didn't ask you a question. That'd be pretty weird. So I think that's the social contract of the app is more conversational.
Speaker 9:We're gonna get more information. But the other thing is designing preferences. We found that people are fine giving us their information if they know why, where it's going, that it's vaulted, and what we're going to do with it. So we're going to develop a preferences panel. Like we announced today, one of the things I'm most proud of is the design of our privacy page.
Speaker 9:Most people, they either don't care about the privacy page and like the people that it's like their entry level work or they make it sometimes they make it purposely hard. But then I ultimately, that erodes trust. So we're making preferences. I want to basically build a preferences library where we show you, here's all the stuff we know about you. Do you want to edit anything?
Speaker 9:Do you want to add it? And here's what we're going to show to whom. And you can say, show this to the host. This is only available to an agent. This, no human can see.
Speaker 9:It's vaulted, but the app can see it and then eventually maybe it's encrypted. So that's kind of where we want to go.
Speaker 1:Mhmm. Twenty thirty four total solar eclipse in Egypt. You can stand at the pyramids and watch a book here every year and be future
Speaker 2:for cash today. You should start buying property
Speaker 1:all over
Speaker 7:I love
Speaker 1:it. Egypt and
Speaker 2:Last question. What what's the last major fitness or health unlock that you've had? And then we'll let you go. Interesting.
Speaker 9:Oh, very good question. Fitness or health unlock.
Speaker 2:Could be a habit, could be a supplement, could be anything.
Speaker 9:Great question.
Speaker 2:Sleep protocol.
Speaker 9:Actually, okay. If you're sleep I've been taking creatine five grams since I was like 17. But I read that they did some studies that if you didn't get a good night's sleep, you can take up to twenty grams of creatine and you are nearly as alert as if you got a full night's sleep. And I don't know seems to work. So
Speaker 1:If don't
Speaker 9:get a good night's sleep, instead of taking a normal dose of creatine, take a much higher dose. The only other thing I'd say is for those listening, I'm a big fan of compound movements. I think the most important exercise if you only do one is
Speaker 3:a squat.
Speaker 9:And I Sorry,
Speaker 2:Brian. I I don't mean to laugh at you. We have these sound effects. So John, talk
Speaker 1:sound like this. Can you push it?
Speaker 3:Makes my voice sound like this. Johnny was doing it to you during that last bit. And it sounds ridiculous.
Speaker 1:So you said Yeah.
Speaker 3:I really like compound lifts.
Speaker 1:Compound lifts.
Speaker 9:That's that's good. That's exactly how I'd wanna be able to say it when I'm saying talking about the clock. By the way, before we go, I just wanna tell you something. Please. Are you guys still interested in doing the Olympics
Speaker 2:100% ready. We're ready. We packed
Speaker 9:our we've been talking to people and I want you to know that we're gonna make this happen.
Speaker 1:I I'm very excited. We're gonna make it happen. The team is pumped up right now. Everyone's fired up.
Speaker 2:We're fired up. Congrats to the whole team on the on on all the new releases. Great progress.
Speaker 1:It's fantastic.
Speaker 2:Always fun.
Speaker 1:Have a great rest your day. Congratulations. Goodbye. Yes. So the
Speaker 2:chat guest, very fitting. Yes. So unfortunately, the chat effect the
Speaker 3:Guest cannot hear it.
Speaker 2:Only only you can and the two of us. But we're gonna keep using it strategically.
Speaker 3:It's really good effect. I was so skeptical when you launched these buttons. I was like, can we get the comedic timing to work? Will it hit? We can.
Speaker 1:Yes. It's working beautifully. Well, our next guest, get that button ready because I think we're gonna be using it again. It's Marcus Milione from Minted, New York. Did I say your last name correctly or did I mispronounce that?
Speaker 1:Bodged. It's Milione. Milione. I'm sorry.
Speaker 5:Yeah. I've been getting Milione my whole life. So it's fine. I'm used
Speaker 2:to it.
Speaker 1:It was it was it was written sort of tiny on my sheet but
Speaker 2:Dude, it's it's incredible. It's on
Speaker 1:the show.
Speaker 2:Way way overdue. Yes. I've been following your Yeah. Thanks for having me.
Speaker 1:For
Speaker 2:a long time now. You've been absolutely on a tear and yeah, we're we're excited to have you. Since it's your first time
Speaker 1:Yeah. Zoom out for us.
Speaker 2:Out for Background. You know, all that stuff.
Speaker 5:Alright. So I don't know how far back do you want me to go. Just go
Speaker 2:all the way to the lax days at least.
Speaker 5:Alright. So I played lacrosse in college. I played at Saint Joe's University in Philly. Then moved to New York. After I graduated, I was working at a smaller regional bank doing commercial real estate debt
Speaker 1:Yeah.
Speaker 5:Until, like, a year or a few months into COVID. As COVID started, Minted kind of spawned after I I was posting on social media, Instagram, TikTok. Were you just doing accounts
Speaker 1:first or or were you like, I'm gonna I'm gonna build something or was it experimental? Like, was the actual flow?
Speaker 5:Well, I was a little bored during COVID. I was at my parents' house.
Speaker 1:Thought I
Speaker 2:was You didn't love regional banking? What's Yeah. We love regional banking here.
Speaker 5:Yeah. So I thought I was taking a long weekend at my parents' house and COVID would like blow over over a long weekend. And then so I just started posting about things I liked, mainly around like fashion and fitness on on Instagram and TikTok, and then
Speaker 7:Mhmm.
Speaker 5:The brand kind of spawned out of that.
Speaker 1:Yeah. What was the first format? Direct to camera, like scripted, unscripted just yapping, get ready with
Speaker 5:Phone in front of my face Okay. Yapping. Yeah. I guess that was mainly TikTok. And then Instagram was more just like outfit photos.
Speaker 1:Okay.
Speaker 5:Like I like putting outfit outfits together.
Speaker 1:Yeah. Yeah. And then what was growth like linear? Was there a was there a key turning point? A lot of times like with my YouTube I started a YouTube channel during COVID, very similar story.
Speaker 1:And for the first year it was like a thousand views and then I cracked the code on one video, correct structure and it started it went I think it got 60,000 views which was like an insane takeoff by comparison to the thousand views that I was averaging. And I credit that a lot too. I had the editing dialed. I had the script out. But I really got like the structure and the title and the thumbnail all, like, packaged up so it, like, could fly.
Speaker 1:And I'm wondering, like, what the what the process was like for growing on on TikTok and Instagram.
Speaker 5:I mean, I kind of viewed it as a reps game. Yeah. I told myself, at least on, like, the short form video stuff since I had no background in it, I was like, I'll just do three videos a day for three hundred sixty five straight days.
Speaker 1:And by that point, you know, you start
Speaker 5:to see you get feedback from, like, the analytics. And so after a certain point, you're like, okay, well, this did well here. Let me like, you know, try some variation of this next time. But really, yeah, it was just like a reps game. I would try any sort of video style, but a lot of it was just talking.
Speaker 5:I think at that time, there was a lot of like it was still a dancing app, right? Like people were just doing dances, and I wasn't doing dances. I was trying to just provide some form of value to the viewer. And you see it a lot more now, but at that time, it was kind of like not as prevalent. Yeah.
Speaker 5:I think it
Speaker 2:I think of you I mean, think of you as like the the a new generation of like founder led company which there was like, you know, great companies have almost always been, well, every company started by a founder. But but you're like the first generation that was just like hyper online. You're in public. You're
Speaker 3:you're building your personal brand.
Speaker 2:You're building your personal brand as well as like, you know, are following along building the company. Also like your own journey as like an athlete and doing those things together and just having this like hyper presence where historically a founder, even if they were pretty online, they might pop up and do like an interview every few months and people would be able to tune in there. Or they might post like post a little, you know, somewhat actively on Instagram but it wasn't like three video three like medium form videos a day for a year kind
Speaker 7:of thing.
Speaker 2:And I just feel like that built so much momentum because there was, like, multiple things to latch on. People could latch on to, like, how are you how's your how's your actual running going? Like Mhmm. I I, you know, remember video after video where you're, like, pushing yourself super super hard. And then there's also like some people can latch on to the business side, which you're like giving people behind the scenes and really making people feel like a part of building that which has ultimately led to where you're at right now.
Speaker 2:You had this drop this week that I hit you up yesterday. Must have been extremely chaotic. You guys sold out so quickly that you were you were going back through like trying to identify like bought, like people that were botting it to resell. Yeah. Yeah.
Speaker 1:Take us
Speaker 2:take us through but like before we get there Yeah. Like kind of the key moments along the journey. You start out, you're just making videos. At what point were you like, oh, I can quit my like when did you quit your job?
Speaker 1:I gotta make some money this.
Speaker 5:Yeah. So it was like month eight of kind of after we started. It started January 2021, and then by month eight, we had kind of had four large releases under under my belt, and it was starting to become too much to try to juggle between real work and not like letting anything like slack there because obviously that paid the bills. But I remember talking to my dad and trying to figure out, okay, what's, you know, a good exit plan? And so we came up with like a revenue number that we would hit over the next three months.
Speaker 5:And if we hit that, then you know what? We're gonna take the jump and and quit our job. And so then very next release, we hit it in like five minutes. And I remember I remember being at home and being like, well Yeah.
Speaker 1:I guess we're just gonna
Speaker 2:Well, that was nerve wracking quitting, right? Because it was a drops based approach and so Yes. You have super spiky revenue so it's, you know, you're thinking like, okay, well, if this drop goes well and this drop goes well and this drop goes
Speaker 1:well doesn't feel like a paycheck every two weeks.
Speaker 2:Yeah. Doesn't Yeah. Doesn't feel like it's streaming in.
Speaker 5:No. I mean, you're also you're betting the farm like the entire time. Every single drop, I would just run the bank account to $0 on production and hope that it went I guess at any point, like, it could have blown up in my face and gone to zero.
Speaker 2:Yeah. So that that happens. What what when when you when you're looking back, what was the next like significant moment? You're like, okay, this seems like a real business people like what we're doing
Speaker 5:I would say that that following Christmas, like that December, so twelve months in, we had like the largest release of of the company's history. It was like going into Christmas season and holiday season, and we released. And I remember being like so blown away by the number on the screen, but then also realizing like, okay, all this inventory is in my parents' garage, and we have to ship all this out as fast
Speaker 2:as possible.
Speaker 5:Yeah. So I need all hands on deck. I've got like I've got my brother, my sister, my mom, my dad, like everybody is there packing, and I'm like, this is going to take us two days. It's like no problem. And it took us like six days of packing every day, like through Christmas.
Speaker 5:Might have ruined Christmas, I'm not even sure. But it was so new. Everyone was so excited that like, I mean, obviously toward the end we were definitely getting on each other, but it was so new and exciting for everybody that, yeah. It kinda just it was a blur.
Speaker 2:And then and then this whole time, like running is blowing up. Running got running got cool. You you clearly thought it was cool before you started the brand, but I think a lot of people realized that maybe it was cool, you know, around 2022. Is that like when it when you felt like it was really becoming part of popular culture in in a bigger way?
Speaker 5:It was I mean, yeah, it was really becoming part of my life then too. I think I probably started in '21, and then really picked up and wanted to start racing racing.
Speaker 2:What were you running from?
Speaker 5:Honestly, a lot of different things probably,
Speaker 7:now that I
Speaker 5:think about it. But Yeah. I mean, like it started like everybody else. You sign up for a half marathon, you're like, okay, I gotta train and I'm gonna give myself a time goal. Then like anything else, it's a sickness and then it just gets worse and worse.
Speaker 2:Did you start do you still feel pressured? Were you feeling pressure to be the best runner out of your customer base? Like, mean, like, I feel like you're you're you're you're kind of running two races, you're building a business, and then I can imagine it really gets in your head because you start sharing some times that you're running and then Yeah. You're competitive and you want to improve. Walk us through that that journey.
Speaker 5:Yeah. I mean, the beauty of posting on the Internet is that you get to hear commentary from everybody on the Internet. So I always approached it as if we're going to make a performance running apparel, I better have some half respectable times. I'll never be elite. I may never be sub elite, but I at least put in the time and effort and try to run fast.
Speaker 5:Yes.
Speaker 2:And then, at what point did you start getting approached, to do, you know, big partnerships like this drop this week? Because these type of things are typically, you know, you you brands need to like meet in the middle. The best Mhmm. The best partnership, right, is like a win for, you know, sort of like legitimizes the rising brand and then makes the the this maybe the more legacy brand like, you know, cooler and more relevant and and, but timing matters a lot for these things.
Speaker 5:Yeah. I I think it was toward the 2022. So we you know, coming to the end of our second year, I got an email from Jason over at Saucony who kind of heads their it's called energy, but partnerships. And it was really cool. I mean, they the email started out just lifestyle because at this point, the brand wasn't as heavily focused on the performance running piece, it was a lot more menswear and jewelry and stuff like that.
Speaker 5:So he wanted us to work on a lifestyle shoe that kind of fit into that world. And then when they brought us up to Boston, I kind of pitched the idea of, well, we should do a running shoe too because we run and we're also making performance apparel. And so it was lifestyle first, then the running shoe came, and then now we've had two running shoes.
Speaker 2:And then and then how are you thinking about beyond beyond running? Like what are there other are there other categories that you're particularly excited about? Or do you want it to be a brand that can exist anywhere that your kind of like idealized customer goes?
Speaker 5:Yeah. I look at I mean, an athlete spends a lot of time outside of sport, and so I think that being able to provide products, like, as I call them, off court is important. But from, like, a performance sporting side of things, I think we're really focused on running right now. But I'm I'm interested in a lot of the endurance sports. You know, cycling is very interesting.
Speaker 5:But for right now, just just the running piece.
Speaker 1:How are you thinking about, like, growing the business? It's such an interesting, like, origin story because it's not, okay, I was in business school. I raised money. I went to a design firm and set up an eDTC website. Like, that era existed.
Speaker 1:And there were a couple companies that made it through, a lot of companies that we've talked about that didn't quite make it or wound up selling off at a at a discount. And it feels like at some point, if you're not already there, there might be like a crossroads of like Mhmm. Are you gonna take a run at being, you know, the next Nike, raise as much money as possible, retail footprint all over the world, like go crazy? Or, you know, more, you know, family business, compound slowly, grow, grow, grow, do things tastefully. And there's obviously like a whole, you know, a whole gradient of pathways in between.
Speaker 1:But what feels natural to you?
Speaker 5:It's hard to say. I mean, since like, we're bootstrapped now in year five. And obviously, like
Speaker 2:Take it all the way.
Speaker 1:Was it
Speaker 2:the gong? Take it all the way. We're hitting the gong for that.
Speaker 1:The gong for the anti funder. You love love to see it.
Speaker 5:So so obviously, like, you know, it it caps what you can do and how big you can do do certain things. But Yeah. I mean, in my mind, I want the brand to be as big as possible on, like, a global scale. I don't think when you're trying to build something like that, going slow and building a really strong foundation is a bad thing. You know?
Speaker 5:Yeah. I don't think us being almost handicapped in the bootstrap way from from a money standpoint is Yeah.
Speaker 2:Look at look at the last look at the last, you know, month. You had Airbnb pivot to being or sorry, Allbirds pivot to a Neo Cloud. You have Everlane, you know, sell to Sheen. Examples of high growth? If you're doing anything like cool in apparel and you're executing well, you're gonna go grow quickly, but high growth appears to be entirely at odds with like building a lasting consumer lifestyle brand.
Speaker 5:Yeah. I mean, I think the there's a playbook where you just turn on the meta ads faucet and just like throw money at it. Right? But I mean, we do very, very, very little advertising at all. I mean, we're really just, I would say, 99.5% organic.
Speaker 5:Mhmm. And that feels like a really nice strong foundation where if we want to turn on the paid advertising, it it just makes our life a little bit easier because we're building a brand that people know and you're not just like getting fed ads all the time and then you end up buying it and you're not you have no real like affiliation with the brand.
Speaker 1:Yeah. And the worst CPMs you'll ever have are when you're you know, there's no brand awareness. Like, every year you delay that, it gets the economics probably get stronger and the TAM gets even bigger. Mhmm. How are you thinking about bots?
Speaker 1:What what what is a do not buy decoy listing? Explain to me like how all this fits together in the modern era.
Speaker 5:Yeah. So, I mean, when when their shoe is anticipated in that way, like we saw it with the Speed four, which was the first shoe we released. We got slammed with the bots. And, you know, it's people submitting orders for 30 pairs. They want to resell them a lot of the time.
Speaker 5:And so this time, I took to Twitter before the release and and called upon people who either like bought it in the past or are current botters to try to get a little focus group together to figure out how I could jam up the bots. So I'll give you the sauce on what I did. I had those two decoy listings on there because I guess, you know, the bots don't look at the screen. They're just going right to checkout. And so I had those be the correct listing, naming structure, everything.
Speaker 5:And then the real listing, the one with the green border, had none of the real terminology associated with the shoe on the listing or in the the kind of like the metadata. And it seemed to work. I would say, you know, like 99% of the orders were manual. Some people did bought it, but it was very easy to catch and then go ahead and cancel those orders.
Speaker 2:Wait. What was on the decoy pages though? You should've you should've sold like sand for like 1,000, you know, like had
Speaker 5:it so that the the shoes were like 10,000 pounds. You couldn't get a shipping rate because they were so heavy.
Speaker 1:Oh, interesting.
Speaker 4:So you would get
Speaker 2:to check out and
Speaker 5:then the whole thing would break.
Speaker 2:Oh. Is brilliant. It's really clever. I feel
Speaker 1:like this cat and mouse game is gonna go on forever.
Speaker 2:Yeah. It's such a it's such a yeah. Having having like hype and and way more demand than supply is like the you know, it is a is a blessing for for a brand. But it is such a, it's such an interesting challenge because you wanna get your product you don't benefit at all from shoes selling at two, three times whatever it is in the secondary market. And so, like, your entire focus has to be on, like, how do you get the shoes to the actual people that are a part of building this brand with you?
Speaker 2:And it's there's probably, like, a has anybody built, like, software to help with this? It's a pretty niche problem because most brands are like, we'd be happy to sell out with bots immediately. But it feels like there's like a software product there.
Speaker 5:You can go the raffle route where like, you know, you can collect entries and like pre charge cards a dollar, and then if they win the raffle. I think like people like the idea of first come, first serve, and if you get in there, you enter your card information, you get past the age captcha, like you are rewarded with the shoe. And the the raffles I've I in talking to a bunch of people who buy sneakers and are a part of of that stuff, they it just takes a lot of the fun away from releases like that. So try to keep it as pure as possible.
Speaker 2:How are you thinking about NVIDIA earnings? Know? John John, you're you're you're laughing, but Marcus has a dedicated account where he just talks about Marcus.
Speaker 1:Yeah. But he's been live with us while the earnings dropped. I don't know.
Speaker 5:Does anyone have any numbers? Yes.
Speaker 1:Being on top line and bottom line, EPS of $1.87. Revenue came in at 81,600,000,000, double b, and the stock's down 2.4%. No. It's popped back up maybe. I don't know.
Speaker 1:It's jumping around. Just
Speaker 2:as Taycan predicted.
Speaker 1:PlanTrust are over there. NVIDIA earnings live. Are there any IRL events that are small right now that you think have the the seeds or showing promise of becoming the next, you know, run club? Like, we went through, like, the Padel and pickleball booms and the the I'm I'm wondering if you're tracking anything that feels like could be a source of communities in cities, something outdoors, or I I don't know. Anything in that realm that's, like, run club shaped that's really small right now but shows like, oh, there's some deep interest there.
Speaker 1:I I that might go somewhere. I don't know where, but it's at least showing popping up on your radar now.
Speaker 5:You know, I I don't know if I'm, like, the best answer to answer that question. I I'm not too sure. I stick to running.
Speaker 1:Yeah.
Speaker 5:I see people go on group bike rides, and they seem like a lot of fun. You know? You go on a 50 mile ride, you stop halfway, get a coffee and a donut with your friends, and then you bike back, and it's like, you know, you're exercising. You're out in nature. That I don't have a bike, so I can't participate.
Speaker 5:But Yeah. If I were to do another group activity outside, it would probably be that.
Speaker 1:Jordy's been getting really into the LARPing, the live action role playing where you dress up in a
Speaker 2:park. Go to the park.
Speaker 1:Suit of armor, each other with swords and flails.
Speaker 2:Haven't been getting into it personally but I've been sending you videos of There's some I'll send I'll send you after this. There's there's a Yeah. John has a helmet. He's ready to larp. There's this account where they they have like LARPing like pretty high pretty high skill LARPing going on.
Speaker 2:Yeah. Where they're hitting each other legitimately so hard. I'm like, you you you're gonna give each other concussions. But it seems like it's fair
Speaker 1:this helmet on. I'm good to go. I
Speaker 5:think I've seen some of that stuff. That might be a good maybe we get like a little tech version of that going.
Speaker 2:How big is the team these days?
Speaker 5:Three people. Then my sister's part time.
Speaker 1:That's a
Speaker 5:she does the customer service and she's the GOAT. But yeah, three full time.
Speaker 2:That's amazing. Three full time and all all in house, like in in in in New York. Yep. How how like, what is how are you thinking about supply chain? Like, are you making a lot you're making some stuff in New York from from what I recall, but imagine you're making it all over.
Speaker 5:Yeah. A lot a lot of the performance stuff is made over in China. You know, the shoes were in Indonesia. That's a Saucony factory, so that's not us. Jewelry Italy.
Speaker 5:I mean, we're kind of spread out, but we have a lot of good manufacturing partners. I would like to bring some more of those pieces here to The US. I think it's just we're not super agile, you know, as a company, so switching a factory overnight isn't really possible, and there's a whole, like, resampling and and reproducing process that would need to go into that. So we're we're focused on, like, catching up to the fashion calendar right now because right now, we've been behind since day one. We've been behind, and we kind of release when we can.
Speaker 5:But we're Got it. This year, we will catch up to the calendar and be, know, releasing products in the proper weather.
Speaker 1:Is that a double edged sword? Good. I mean, I
Speaker 2:I It's like, hey, we have a winter coat
Speaker 5:in
Speaker 2:our
Speaker 5:Oh, we've done it. I've done hoodies in the August.
Speaker 1:Yeah. Wait. But is that a double edged sword where, if you're the only hoodie that's going on sale in in the summer, like, at least it's, not a noisy time and you're not getting crowded out and so maybe there's a benefit or silver lining.
Speaker 5:No. It feels bad. It feels bad. It feels bad. Yeah.
Speaker 5:Yeah. You don't wanna do that.
Speaker 1:You don't wanna do that. That's funny. When you say like the the the calendar, are you just talking about the seasons or are there specific moments where all the brands, you know, sort of coalesce around, this is the day or this is the week when, like, fall collections go on sale? Or, like, how how how precise are we being? Because I know that there's a whole fashion runway show circuit, but I'm not tapped in enough to know if there's a real cycle to it or a logic.
Speaker 5:Yeah. It I don't think it's that crazy for for, like, the performance stuff. I think you wanna hit, like, spring, summer, fall, winter.
Speaker 1:Yeah.
Speaker 5:And even that is a little more relaxed. Like, can kind of do it based off when people start training for certain things
Speaker 4:or Sure.
Speaker 5:Or how the weather is shifting. But, you know, there are times if you want to do stuff around the the world marathon majors, then you kind of have to like prep for that. And a lot of those start, you know, November, October, November. Yeah. So yeah.
Speaker 5:I mean, depending on what you wanna hit from, like, an event standpoint, that kind of shifts shifts stuff because it does get cooler then, but you're still releasing, you know, obviously tanks and stuff that you're running in to stay cool. But, yeah. I mean, spring, summer, fall, winter for the most part is is good enough.
Speaker 1:Yeah. That makes sense.
Speaker 2:Are you a nominative determinism guy?
Speaker 1:The chat thinks you're basically a millionaire. Marcus Milioneer.
Speaker 2:Marcus Milioneer.
Speaker 5:Yeah. I don't know.
Speaker 4:There's fate.
Speaker 5:I guess on paper. Yeah. The company would be worth worth
Speaker 1:yeah. That's fantastic. Congratulations Downs. On all the progress.
Speaker 2:Yeah. Great to finally have you on the show and yeah. Just congrats to your to your team of three on accomplishing what what what would be difficult for for even a team of 300. It's super impressive.
Speaker 5:Yeah. Thank you. I appreciate both of you. Thanks for having me on.
Speaker 2:Yeah. Great to see you.
Speaker 1:Thanks for hopping on.
Speaker 2:Talk soon, dude.
Speaker 1:Talk soon. Congrats again. Yep. Yeah. Jensen Huang talked about the quarter that NVIDIA just had.
Speaker 1:He said the build out of AI factories. Boo. The largest infrastructure expansion in human history. Yay. Is accelerating at extraordinary speed.
Speaker 1:Yay. Not a fan of the AI factory terminology, but good that there is progress being made. Agentic AI has arrived. He says doing productive work. True.
Speaker 1:Generating real value. True. And scaling rapidly across companies and industries. Also true. Lots of good stuff.
Speaker 1:NVIDIA net income, it rose to 42,960,000,000. They almost hit 43,000,000,000. Not too bad. A year earlier, they were doing just 18,800,000,000 in net income. Huge, huge increase.
Speaker 2:Really wild. Really wild. Printing. Definition of printing.
Speaker 1:All good news. The stock is sort of up and down, basically flat, but NVIDIA revenue jumped 85% to 81,620,000,000 from 44,000,000,000 last year, the company said.
Speaker 2:Shocking.
Speaker 1:Yeah. Great stuff. In the timeline, you know who I mean, Steve Wozniak crushed the crushed his commencement speech. We'll we'll we'll have to debate this to see did was he actually a good communicator? Is he setting the tone correctly?
Speaker 1:But we should still play the clip of Steve Wozniak, the cofounder of Apple at Grand Valley State University because he talked about AI. And unlike Eric Schmidt, he did not get boo off booed off stage. He actually got cheered for his Wait.
Speaker 2:This was who was it, Tyler? Steve Wozniak? No. No. No.
Speaker 2:Sean I'm a big fan of Sea Wozniak.
Speaker 1:I love the wasp.
Speaker 2:Shot's fired.
Speaker 1:Let's play the clip from Grand Valley State University on Instagram here. Can we play this from the beginning? It might loop back, but he's doing bits. He's getting laughs.
Speaker 10:You all have AI. You all have AI. Actual intelligence.
Speaker 1:Oh, mic drop. Knee slapper. Hey. Play into the crowd. You're gonna need a He big knows the audience.
Speaker 1:He knows the audience.
Speaker 10:We're trying to figure out how to make a brain. Software, hardware, synapse chips. And I was at a company where the engineers figured out how to make a brain. Takes nine months.
Speaker 1:Yeah. Knee slapper. But he knows the audience. He's delivering the right thing. Is he AGI pilled?
Speaker 1:Is he super intelligence pilled? Probably not. But it is regardless, I think it's it's potentially the right framing for the crowd. It's knowing the audience and and and that is a way to bridge to a broader conversation about AI, a broader conversation about how humans fit into a post AGI world. I don't know.
Speaker 1:We'll have to go watch the full
Speaker 2:clip eventually. Let's close it out with this video from Tyler that we can pull up.
Speaker 1:Okay. What is this?
Speaker 2:This is the video I was referencing with with Marcus. I'm very concerned about these gentlemen
Speaker 1:Okay.
Speaker 2:And what they're doing. Pull it up. Pull it up.
Speaker 1:What's happening? Let's get
Speaker 2:like, this is this is insane contact. I mean, the helmet is getting dented. I think this is breaking.
Speaker 1:Issue. Skill issue. They really hitting that, aren't they?
Speaker 2:Run it run it back one more time. One more time. He's just this is just wrong. They're taking it too far. I don't I don't see how you leave this without a concussion.
Speaker 1:Mhmm.
Speaker 2:But we'll try it out after we We
Speaker 1:have the gong mallet.
Speaker 2:Yeah. That that
Speaker 1:seems like it would do some damage.
Speaker 2:Thank you for tuning in with us today, folks. It has been an honor same boat. Of lifetimes to podcast with you today. It's been great. We hope you have an incredible evening And we'll Leave
Speaker 1:us five stars on Apple Podcast and Spotify. Sign up for the newsletter at tbpn.com. We'll see you tomorrow. Goodbye. Cheers.