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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching TVPN. Today is Wednesday, twenty September twenty fourth twenty twenty five. We are live from the TVPN UltraDome, the temple of technology, the fortress of finance, the capital of capital. The Wall Street Journal has a post because they wrote an article about Peter Thiel's lecture circuit on the antichrist. They write Peter Thiel, the billionaire investor in data, AI, defense, and weapons development technologies wants everyone to think more about the end of the world.
Speaker 1:They got me thinking more about capital allocation, honestly. This circuit, we've covered this a little bit. Teal has been on a lecture series that's now four parts up in San Francisco. Tyler, do you know why Peter is doing this?
Speaker 2:What do you mean?
Speaker 1:Do you know why he's doing this lecture circuit? He's supposed to say why questions are overdetermined. Oh, yeah. Yeah.
Speaker 3:That a layup. That was a layup.
Speaker 1:As always, why questions are over to Tommy. Tyler made this. Anyway, never ask why. Ask how to save time and money. Go to ramp.com.
Speaker 1:Easy use corporate cards, bill payment, accounting, and a whole lot more all in one place. They are not livestreaming this. They should be livestreaming it on Restream, one livestream, 30 plus destinations, multi stream, reach your audience, wherever they are. No. It is off the record.
Speaker 1:And if you go and you get a ticket Yeah. Saw somebody post about it, you get axed.
Speaker 3:Yeah. Somebody summarized the first couple and just immediately got a a comment from miss Stevens who said, you're banned.
Speaker 1:Yeah. They were running the Blake Masters. They were trying to run back the Blake Masters playbook. So if you're not familiar with the lore here back in 2012
Speaker 3:He was basically kind of making a run at I want to be the Blake masters of the anti crime.
Speaker 1:Yeah. Which is like a wild, wild thing to play out because the I mean, so let's give a little history here. Back in '20 He wanted his name twelve
Speaker 3:in the history books next to the section on the anti gray.
Speaker 1:Yeah. Exactly. Which is very different than what happened last time Peter gave a a set of lectures. It was at Stanford, and it became the backbone of the best selling book, Zero to One. The talks were focused on entrepreneurship, but it could be seen as a history lesson or political treaties or referendum on American culture.
Speaker 1:There was a lot that came into that lecture series, and there's a lot of facts in that book and a lot of stories in that book that aren't strictly directly applicable to just building a company even though the the the the course was literally called how to start a startup, c s one eighty three. Yeah. And zero to one kinda turned
Speaker 4:into the playbook that Founders Fund ran for a long time and still runs and has produced a
Speaker 1:bunch of alpha, the ideas of being founder friendly, the monopoly thesis, the definite optimist. Like, these tealisms became real investment strategies, for the following decade and are still holding true today. It was a bit shocking to it was always shocking to me that, like, the be founder friendly, don't fire founders stuck around as durable alpha for as long as it did. But VCs just love firing founders. It's just nothing
Speaker 3:That's can help.
Speaker 1:Yeah. I've never done it personally. But I imagine You've always wanted to. I imagine the thrill must be electric because even though tripping somebody from
Speaker 4:Yeah.
Speaker 3:Their creation.
Speaker 1:Yeah. And It must be because it clearly doesn't produce alpha. Because if you look at the companies that are founder led, they tend to outperform. So, you're sacrificing a lot of a lot of financial gain when you fire a founder, but the rush The rush. The rush must be incredible.
Speaker 1:It must be better than even returning billions of dollars to your LPs. But so this new lecture circuit is about the Antichrist, and the series doesn't fit neatly into the previous core Stanford course calendar. That's not listed as CS one eighty four, the Antichrist. You know? It's not a computer science course at Stanford.
Speaker 1:It's being put on by Michelle Stevens at Acts 17, and is much more focused on religion, specifically in Christianity. So The Wall Street Journal characterized one of Thiel's core theses this way. Thiel draws on a theory that the Antichrist could be an individual or entity that is incredibly charismatic but talks repeatedly about the end of the world, thereby convincing society to give it the power it needs to regulate the existential risks from science and technology. And there are lots of people that come to mind when you think about talking about doomerism. And Thiel cites Greta Thunberg.
Speaker 1:She said, our house is on fire. We must act like the house is on fire. She said also, we are in the beginning of a mass extinction. This is in September 2039. And all you can talk about is money and fairy tales of eternal economic growth.
Speaker 1:She told this too, I think it was reported by PBS at the UN Climate Action Summit. She's been very focused on climate.
Speaker 3:Her campaign to increase human suffering?
Speaker 1:It's been a mixed bag. But Eliezer Yudakowsky said other doomer things. He has a new book out. He's on a book tour. He says, if we go ahead on this, everyone will die.
Speaker 1:He's referring to AI, not climate change in this case, including children who did not choose this and do not do anything wrong. Sam Altman has also said some stuff that's sort of apocalyptic. You know, he told the US Senate in his testimony in 2023.
Speaker 3:$200,000,000,000,000.
Speaker 1:If I can't if I can't automate enterprise workflows
Speaker 3:If I can't get 500,000,000,000,000 million billion dollars.
Speaker 1:Billion $9.09 $9.09 $9.09 $9.09 $99,000,000,000. Yeah. Round numbers are out. You need to go to a VC and say, this round, we're raising $9.09 $9.09 $9.09 $9.09 $9, please. Yes.
Speaker 1:Yes. Don't make me choose.
Speaker 3:But Don't make me choose. Don't make me choose between curing cancer and free
Speaker 1:Don't make me choose
Speaker 3:I will do it.
Speaker 1:Will saving time and saving money. Just
Speaker 4:Save both.
Speaker 1:We can save both with ram.com. Anyway, no. But he he did he did give, you know, a bit of a doom or take. He was talking about how this could go wrong. He said, if this technology goes wrong, it can go quite wrong.
Speaker 1:Elon Musk also said something similar. He said, with artificial intelligence, we are summoning the demon. And the original SpaceX thesis was When
Speaker 3:did he say that, by
Speaker 1:the said that in, October 2014 at the MIT Centennial Symposium.
Speaker 3:And what did he mean by that? Because now he's got a
Speaker 1:He's summoning a daemon. I think he thinks that if you shape the daemon portal in the right shape, the daemon comes through and it's kinda friendly, maybe?
Speaker 3:Friendly daemon.
Speaker 1:Kinda nice. I don't know.
Speaker 3:Friendly daemon that increases enterprise value through business automation and increased efficiency.
Speaker 1:Hopefully. And and and vibe coding Three. Js apps. So that that's the demon that I want. But e even SpaceX, you can view as a as a rebuttal to the apocalypse.
Speaker 1:What would be apocalyptic? Humanity remaining on the Earth alone. An asteroid comes, hits the Earth. We're all done. But if we become multiplanetary, we are no longer a single point of failure.
Speaker 1:If there's humans on Mars and the moon and Earth, if something bad happens to Earth, humanity continues. The stakes that that Elon framed SpaceX in were world consequential.
Speaker 3:By the way, if you go to xai.com Mhmm. It's this random company called Unk AI. What? U n k
Speaker 5:a I.
Speaker 3:And they feature popular AI brands like Grok4, ChatGPT Okay. DeepSeek, and Xiaomi, and Unitree Weird. Seemingly a Chinese company Okay. Odd. That's using it to promote a range of products.
Speaker 3:Yeah. Anyways, very strange.
Speaker 1:So my question was, there's a lot of focus on, if you speak in millenarian terms, if you speak of apocalyptic consequences to not building your technology, you might be the antichrist. It might be bad. But at the same time, I'm just looking at history here and looking at these folks who have become popular and and thought leaders on apocalyptic scenarios, Elon, Sam, Yudakowsky, Greta. If you backed these folks as a basket, you would have done quite well. You're in SpaceX.
Speaker 1:You're in, you're in OpenAI. You you've done quite well. And and I'm wondering where the line is for, you know, using, speaking about apocalyptic consequences to the lack of technology, to the lack of not solving a problem, and then balancing that with, delivering something that isn't authoritarian but is actually just a really, really big ambitious project. So if you if you if you read into, you know, we're summoning the demon. We need to go to Mars because humanity could be wiped out on Earth is cooked.
Speaker 1:Right? There's one world where it's like, that is apocalyptic thinking. There's another which is just like, this is a reframing on the classic, like, I wanna save the world. I wanna change the world. We wanna make the world a better place.
Speaker 1:All those terms have kind of fallen out of fashion as as a lot of founders just kind of wound up, you know, building, automating manual workflows. Right? And so they they stopped saying, we're gonna change the world with a better database. But there's still something. If you're a VC and you wanna back a moonshot, you wanna back something that's either gonna be 0 or a trillion dollars that where I feel like you're you're Yeah.
Speaker 3:Justice is is a great example of this pitch because everyday people experience rain all the time. Yep. They're not necessarily like droughts or not something super tangible. Yep. Right?
Speaker 3:Because you just you turn the faucet and the water runs Yep. Regardless of if you're in a drought or not. Obviously, farmers feel this much more intensely. But he's come out and said, we need to be able to control the weather. We need to be able to increase precipitation.
Speaker 1:And
Speaker 3:you should fund me so that I can do this.
Speaker 1:Yeah. Yeah. There's something about these bold missions that rally employees. They rally investors. They rally media attention.
Speaker 1:You look at like, what Augustus is doing is deeply controversial, but he's on podcasts that are so much bigger than what a normal what is he at? Series a? Like, a series a founder typically is not on multiple million plus subscriber podcasts Yep. Doing a tour. Talk to a
Speaker 3:lot people. And talking to people that are are actively disagree with what he's doing.
Speaker 1:Totally. Totally. Yeah. Mean, we talked to founders all all day long who come on and, oh, they raised it a billion dollar valuation. Or they raised a billion dollars.
Speaker 1:We had five series e companies on Tuesday. Those folks are not getting calls from the biggest media platforms in the world on day one consistently on a regular basis. And I think it's because of the that they're going after more tractable problems. They're going after things that are less controversial, but, also, there's just something interesting about actually refocusing on tackling those really, really big issues. And so, there's something where I I'm I I feel like the fear of, like, targeting the Antichrist turns into, like, you know, Girardian scapegoat.
Speaker 1:You gotta find someone to blame everything on. I'm I'm worried about how all that shapes up, but, I am optimistic about this idea of venture capitalists returning to the super high risk. It's either 0 or a trillion dollars. It either is a completely useless company that doesn't get anything done or they cure cancer or they build a flying car or they build the rocket that goes to space. And even if Elon hasn't gotten us to Mars, we're not multiplanetary yet, he's still able to ship Starlink.
Speaker 1:It's great business. And then also keep everyone still motivated on how cool would it be if if they actually got to Mars.
Speaker 3:That's amazing. It's another twenty years. AI We to benefit humanity, very oriented around Yes. Safety. Right?
Speaker 3:This is a nonprofit. This is work that needs to be done that's not going to get funded through the capital markets, and then it turns into an Internet And for
Speaker 1:so I don't know what your time line is for SpaceX getting to Mars. It might be twenty years, maybe thirty years, but at least it keeps them focused on, you know, chopping wood and working hard to actually advance the underlying technology that we get a lot of value on through just satellites and stuff. And I think that the same thing could be true for the AI companies where, yeah, maybe we don't get the the AGI god, ASI, you know, super soon, but there's just like a ton of value, you keep working at it because, it's delivering value in the short to medium term, but you're able to keep the sites really, really, really high, and that drives just like, that's just what you need to actually marshal all the energy to go back something really huge. Anyway, Tyler, have you been following the, the the Antichrist Lecture Series vibes at all? What what what's your take?
Speaker 2:I I read I read the first, like, set of notes that came out by the person who I think got in trouble.
Speaker 1:Banned notes. You got to them before they were taken down off the Internet.
Speaker 2:Oh, they were taken down.
Speaker 1:I believe so. I I can find them.
Speaker 2:I don't think people are really missing anything because most of that stuff was like
Speaker 1:In other podcasts.
Speaker 2:Yeah. Most of it was in the Hoover Institution podcast with Peter Robinson.
Speaker 1:Yeah.
Speaker 2:So I don't I mean, the vibes are like, most of the stuff I've seen online were just like the the protests outside of it, which I thought were like, pretty funny.
Speaker 1:Yeah. But I it does feel like this is definitely in the in the early stages of act like, we like, it's it's he's definitely, like, working these bits out and figuring out where how all the pieces fit together into some sort of narrative or conclusion. But it's interesting, and not many other venture capitalists are talking about it. So at least it's different and fresh. Anyway, Privy, wallet infrastructure for every bank.
Speaker 1:Privy makes it easy to build on crypto rails, securely spin up white label wallets, sign transactions, and integrate on chain infrastructure all through one simple API. There we go. We got a little bit of a bear take from Jerry Newman over in Colossus. AI will not make you rich. I feel like AI is already making tons of people rich.
Speaker 1:I wonder, I wonder what's going on. Let's read through some of this. So Kick it off. Jerry writes in Colossus Mag, which you should subscribe to, of course. Fortunes are made by entrepreneurs and investors when revolutionary technologies enable waves of innovative investable companies.
Speaker 1:Think of the railroad, the Bessemer process. I don't actually don't know what the Bessemer process is.
Speaker 3:Tyler, what's the Bessemer process?
Speaker 1:Electric power, the internal combustion engine mass producing steel. Mass producing Or
Speaker 3:molten pig iron.
Speaker 1:Were there lots of steel startups at the time, I suppose? Interesting. Each of which, like a stray spark in a fireworks factory, set off decades of follow on innovation, permeated every part of society and catapulted a new set of inventions and investors into power, influence, and wealth, Yet some technological innovations, though societally transformative, generate little in the way of new wealth. Instead, they reinforce the status quo. Fifteen years before the microprocessor, another revolutionary idea, shipping containerization arrived at a less propitious time when technological advancement was a Red Queen's race and inventors and investors were left no better off for nonstop running.
Speaker 1:Interesting. I didn't know that about the containerization story. Anyone who invests in the new new thing must answer two questions. First, how much value will this innovation create? And second, who will capture it?
Speaker 1:Information and communication technology was a revolution whose value was captured by startups and led to thousands of newly rich founders, employees, and investors.
Speaker 3:Also called high technology. Yes. High-tech.
Speaker 1:Yes. I am I am very excited to see where he takes this because I feel like there are already, what, thousands of new millionaires in the AI boom Yeah, just exactly from secondary how
Speaker 3:the prices of starter homes in San Francisco.
Speaker 1:Yeah, like, it's happening. Didn't OpenAI just do a $10,000,000,000 tender offer or something? Like, there's liquidity flowing. People
Speaker 3:are Not doing to mention how many individual indie founders are making a lot of money Totally. Building various AI Totally. Apps and experience.
Speaker 1:Also, people that went long in video or have been buying, you know, calls on Nvidia at various times or Leopold, Aschenbrenner. Like, there's a bunch of people that have figured out different ways to make money. What do you think?
Speaker 2:I mean, yeah, there's that stat of the like, this was, like, maybe three years old or something, but about the Nvidia employees. And it was, like, 75% of them are worth over $1,000,000
Speaker 1:That's right.
Speaker 3:That's That's right.
Speaker 2:That's like probably 90% now.
Speaker 1:Yeah. And so I don't know. Maybe he has to argue for like collapse of everything. We'll see where this goes. Is generative AI more like the former, containerization, or the latter, IT revolution?
Speaker 1:Will it be the basis of many future industrial fortunes or a net loser for the investment community as a whole with a few zero sum winners here and there? There are ways to make money investing in the fruits of AI, but they will depend on assuming the latter, that it is once again a less propitious time for investors and inventors that AI model builders and application companies will eventually compete each other into an oligopoly, I believe that's true, and that the gains from AI will not accrue to its builders but to customers. A lot of the money pouring into AI is therefore being invested in the wrong places. And aside from a couple lucky early investors, those who make money will be the ones with the foresight to get out early. What do you think, Jordy?
Speaker 3:I mean, we gotta I don't wanna just start Okay. Just dunking.
Speaker 1:Keep reading the microprocessor.
Speaker 3:Yeah. So the micro but the main thing is, in venture, it's really hard to get out early if you're investing with real size. Yes, totally. You're writing a $200,000,000 check. It's not like at the next round, you're like, oh, nice.
Speaker 3:I got a 3x markup. I'm gonna I'm sell $600,000,000 in second
Speaker 1:or third.
Speaker 3:No, we're not. And this is this is something you see on the timeline. People people usually in on accounts saying like, oh, these multistage funds are just dumping on you Yeah. All this stuff. And it's like like, yes, at times, funds can exit some of their positions.
Speaker 3:Smaller funds can exit entirely. But by and large, if you led an early round, you're not able to just fully exit.
Speaker 1:And you might even be locked up post IPO. There's a bunch of ways. It would be very funny if you know how everyone's like, let SBF out of jail? He got a stake in Anthropic. Then There
Speaker 3:was something else he was sharing this morning. I forgot about this. But he bought almost 7% of Robinhood at
Speaker 1:And the there was like two other companies that he got that he nailed. He was like a fantastic trader. But did you see what Elon posted about Anthropic? He said, winning was never in the set of possible options or possible outcomes. He's like Did
Speaker 3:he say that?
Speaker 1:He said that on Axe yesterday, I believe. Elon is a gigabear on is a gigabear on Anthropic, saying that Anthropic is zero. And if Elon's right, then SPF looks bad again because he looked bad because he lost all the customer money.
Speaker 3:Was Elon
Speaker 1:Then he looked great.
Speaker 3:Something about SPF? No, no, no.
Speaker 1:Completely unrelated. Completely unrelated. Elon was just trash talking the other laps because he trash talks a bunch of the laps, right? But he was saying that, oh, Anthropic's not going to lose. He's not going to win.
Speaker 1:It's going to be a zero or whatever. He wasn't exactly saying it was going be a zero. But he was saying winning was never in the set of possible outcomes. And so it'd be funny if we round trip on
Speaker 3:everyone this that preyed on my downfall, pray harder.
Speaker 1:Yeah. Yeah. Yeah. I I I think it's kind of a silly silly
Speaker 3:I'll continue. The microprocessor was revolutionary, but the people who invented it at Intel in 1971 did not see it that way. They just wanted to avoid designing desktop calculator chipsets from scratch every time. But outsiders realized they could use the microprocessor to build their own personal computers and enthusiasts did. Thousands of tinkerers found configurations and uses that Intel never dreamed of.
Speaker 3:This distributed and permissionless invention kicked off a great surge of development as the economist Carlota Perez called it, triggered by technology but driven by economic and societal forces. There was no real demand for personal computers in the early nineteen seventies. They were expensive toys, but the experimenters laid the technical groundwork and built a community. Then around 1975, a step change in the cost of microprocessors made the personal computer market viable. The Intel eighty eighty had an initial list price of $360, which is 2,300 in today's dollars.
Speaker 3:MITS could barely turn a profit on its Altair at a bulk price of $75 each, which is 499.
Speaker 1:Donald Baud would have gotten it done in 1975.
Speaker 3:He could have gotten it
Speaker 1:Who would have been?
Speaker 3:Done. He would have been putting
Speaker 1:Gordon Moore, send me an Intel eighty eighty. You're unnoticed.
Speaker 3:He'd just be putting ads in the newspaper.
Speaker 1:He'd be writing letters to Gordon computers. And Bob Noyes, send me an Intel eighty eighty.
Speaker 3:But when MOS technology started selling at $6.65 $0.02 for $25 Oh. Steve Wozniak could afford could afford to build a prototype Apple sixty five zero two and the similarly priced Zilog Z 80 forced Intel's prices down. The nascent PC community started spawning entrepreneurs and a score of companies appeared, each with a slightly different product. You couldn't have known in the mid nineteen seventies that the PC would revolutionize everything. While Steve Jobs was telling investors that every household would someday have a personal computer, a wild underestimate as it turned out.
Speaker 3:The others questioned the need for personal computers at all. As late as 1979, Apple's ads didn't tell you what a personal computer could do. It asked what you would do with it. The established computer manufacturers had no interest in a product their customers weren't asking for. Nobody needed a computer and so PCs weren't bought.
Speaker 3:They were sold. Flashy startups like Apple and Sinclair used hype to get noticed while companies with footholds and consumer electronics like Atari, Commodore, and Tandy Radio Shack use strong retail connections to put their PC
Speaker 1:Look at this controversial ad that they ran with a naked man, Adam, holding an Apple computer. The original, clearly, maybe Steve Jobs was on to something with the viral marketing being controversial.
Speaker 3:Yeah. This is an insane
Speaker 1:We're looking for the most original use of an Apple since Adam. What what in the name of Adam in the name of Adam do people do with Apple computers? You tell us in a thousand words or less. If your story is original and intriguing enough, you could win a one week all expense paid trip to for two to Hawaii.
Speaker 3:Giveaways. Giveaways.
Speaker 2:This is
Speaker 1:What insane Apple lore. Steve Jobs is really on one.
Speaker 3:This this the logo too with it with the the Apple The stripes. Stripes. Oh, so good. So the market grew slowly at first accelerating only as experiments led to practical applications like the spreadsheet. Let's give it up for the spreadsheet.
Speaker 1:One of the best inventions of all time.
Speaker 3:Hit that horn. As use grow, observation of use cause a reduction in uncertainty leading to more adoption in a self reinforcing cycle. This kind of gathering momentum takes time in every technological wave. It took almost thirty years for electricity to reach half of American households, for example. And it took about the same amount of time for personal computers.
Speaker 3:When a technological revolution changes everything, it takes a huge amount of innovation, investment, storytelling, time, and plain old work. It also sucks up all the money and talent available. Like Kuhn's paradigms and science, any technology not part of the wave's technoeconomic paradigm will seem like a sideshow.
Speaker 1:Well, let me tell you about Cognition. They're the makers of Devon. Devon is the AI software engineer. Crush your backlog with personal AI engineering team at your fingertips in your Slack. Let's continue.
Speaker 1:The nascent growth of PCs attracted investors, venture capitalists, who started making risky bets on new companies. This development incentivized more inventors, entrepreneurs, and researchers. You don't hear enough about inventors anymore. Everyone wants to be a founder. No one wants to be an inventor.
Speaker 1:I want to show I want to meet some folks who just are like, yeah, I'm just working on
Speaker 3:a new Well, what about Riley Walls? He's kind of inventor coded.
Speaker 1:I think he's an inventor. You called him a rascal, something like
Speaker 3:that. Internet rascal.
Speaker 1:Internet rascal, which is, I think, fantastic. But
Speaker 6:I
Speaker 1:think of him as an inventor, which in turn, and all of this drew more speculative capital. Companies like IBM, the computing behemoth before the PC, saw poor relative performance. They didn't believe the PC could survive long enough to become capable in their market and didn't care about new small markets that wanted a cheaper solution. Retroactively, we gave the PC pioneers the power of profits, well, that's a lot of alliteration, rather than visionaries. But at the time, nobody outside a small group of early adopters paid any attention.
Speaker 1:Establishing media like The New York Times, didn't take the PCs seriously until after IBM's was produced was introduced in August 1981. In the in the entire year of 1976 when Apple Computer was founded, the NYT mentioned PCs only four times.
Speaker 3:Great.
Speaker 1:Apparently, only the crazy ones, the misfits, the rebels, the trouble makers were paying attention. This is a total mentions of personal computers in The New York Times over time and exponential growth from 1979 to 1984.
Speaker 3:Crazy that it actually peaked in 1984.
Speaker 1:'84? It
Speaker 3:started sorry. '94.
Speaker 1:It peaks in
Speaker 3:'84. Sorry. And then it was dropping throughout the eighties.
Speaker 1:Well, it's old
Speaker 3:news, you know?
Speaker 4:It's over.
Speaker 1:Yeah. It's over. Everyone has a PC. I mean, how many articles are there about social media today this year or smartphones? There just aren't as many as there were during the boom.
Speaker 1:That's the nature
Speaker 3:the story. Still the full New York Times.
Speaker 1:Yeah. But, I mean, there's just so many times when you can just, like, you know, it it just melts into the background of the story. But it's a good point. It's the element of surprise that should strike us most forcefully when we compare the early days of the computer revolution to today. No one took note of personal computers in the nineteen seventies.
Speaker 1:In 2025, AI is all we seem to talk about. Big companies hate surprises. You wanna continue here?
Speaker 3:Big companies hate surprises. That's why uncertainty makes a perfect moat for start Apple would never have survived IBM entering the market in 1979 and only lived to compete another day after raising a 100,000,000 in its 1980 IPO. It was the only remaining competitor after the IBM induced winnowing.
Speaker 1:IBM and Apple, they're the only two survivors. All these other companies, the Altair, the Amiga, the Atari ST all fell off. But the Mac and the I p IBM PC ripped
Speaker 3:business machines.
Speaker 1:We'd love to see it.
Speaker 3:As the tech took hold and started to show promise, innovations in software, memory, and peripherals like floppy disk drives and modems joined it. They reinforced one another with with each advance putting pressure on the technologies adjacent to it. When any part of the system held back the other parts, investors rushed to fund that sector as increases in PC memory allowed more complicated software. There became a need for more external storage which caused VC Dave Mark Market to invest in disk drive manufacturer Seagate in 1980. Seagate gave a 40 x return when it went public in 1981.
Speaker 3:Other investors noticed and some $270,000,000 was plowed into the industry in the following three years. Seagate's been ripping, right?
Speaker 1:All the hard drive makers because all the AI companies need to store a ton of training data, RL data. They're generating a huge amount of data, images, videos, all sorts of stuff. And all that needs more storage.
Speaker 3:Up a 109% in the I
Speaker 1:remember I I think we read an article about the hard drive boom, like, a year ago. And it was we're still early.
Speaker 3:I know. But That that was actually crazy. I remember it was, like, first, like, 10 episodes.
Speaker 1:Yeah. We were like, oh, this is kind of a boring story, but it's kind of interesting and it seems important. So we read about Seagate.
Speaker 3:Let's check-in with Western Digital. Hundred and eighteen.
Speaker 1:Another 100 another 100 bagger, little easy double.
Speaker 3:Yeah. Money also poured into the underlying infrastructure, fiber optic networks Mhmm. Chip making, etcetera, so that the capacity was never a bottleneck. Companies which use the new technological system to outperform incumbents began to take market share and even competitors realized they needed to adopt the new thing or die. The hype became a froth which became an investment bubble.
Speaker 3:Let's give it up for bubbles. The .com frenzy of the late nineteen nineties. The ICT wave was therefore similar to the previous ones like the investment mania of the eighteen thirties and the roaring twenties which followed the infrastructure build out of the of canals and railways respectively in which the human response to each stage predictably generated the next. When the dot com bubble bubble popped, society found it disapproved of the excesses in the sector and governments found they had the popular support to resort authority over the tech companies and their investors. This put a break on the madness.
Speaker 3:Instead of the reckless innovation of the bubble, companies started to expand into proven markets and financiers moved from speculating to investing. Entrepreneurs began to focus on finding applications rather than on innovating the underlying technologies. Technological improvements continued, but change became more evolutionary than revolutionary.
Speaker 1:Look at this chart. Technological waves over time, the industrial revolution, the canal mania. I wasn't even familiar with this. Arkwright Mill opens in 1771. The great would love
Speaker 3:to I would love to Then watch a documentary or or even a Canal mania.
Speaker 1:Yeah. This has the the Underrated mania.
Speaker 3:People always talk about tulips.
Speaker 1:Tulips. Yeah. Doesn't even count because it's not a real technology. So the actual technological waves that are highlighted here, the industrial revolution, steam and railways, steel, electricity, and heavy engineering, then oil, the automobile, and mass production from nineteen o eight to 1974, and then 1971 onward is information and telecommunication. And pretty pretty remarkable results from this.
Speaker 1:27% rise in real GDP through the twenty ten to twenty nineteen era. That's pretty good. Contrast, society did not need a bubble to pop to start excoriating AI given the backlash to tech that has been going on for a decade. This seems normal to us, but the AI backlash differs from the general high regard earlier in the cycle enjoyed by the likes of Bill Gates, Steve Jobs, Jeff Bezos and the others who built big tech businesses. The world hates change and only gave tech a pass in the eighties, nineties because it all seemed reversible.
Speaker 1:It could be made to go away if it turned out badly. This gave the early computer innovators some leeway to experiment. Now that everyone knows computers are here to stay, AI is not allowed the same wait and see attitude. It is seen as part of the information technology revolution. Perez, the economist, breaks each technological wave into four predictable phases, eruption, frenzy, synergy, and maturity.
Speaker 1:This is a new Gartner hype cycle. We need to know where are we on the curve.
Speaker 3:The Perez tech wave. I think
Speaker 1:we're right around frenzy. We're definitely past eruption, maybe going into synergy and maturity next. The middle two, frenzy and synergy, are the easy ones for investors. Frenzy is when everyone piles in and investors are rewarded for taking big risks on unproven ideas culminating in the bubble when paper profits disappear. When rationality returns, the synergy phase begins as companies make their products usable
Speaker 3:and productive. Everybody's scared of a crash. They're not eager for synergy.
Speaker 1:Yeah. So investing in the maturity phase is even more difficult. In eruption, it's hard to see what will happen. In maturity, nothing much happens at all. Nothing ever happens.
Speaker 1:The uncertainty about what will work and how customers and society will react is almost gone. Things are predictable. Everyone acts predictably. The lack of dynamism allows successful synergy companies to remain entrenched, see the Nifty Fifty and fang, but growth becomes harder. They all start to enter each other's markets, conglomerate, raise prices, cut costs.
Speaker 1:The era of the it feels like Microsoft's in that bucket certainly already. Companies frame this as a drive to win, it's really a fear of losing. Should we read about the shipping container wave?
Speaker 3:Yeah.
Speaker 1:Shipping containerization was a late wave innovation that changed the world, kicked off our modern era of globalization, resulting profound changes to society and the economy, and contributed to rapid growth in well-being. But there were perhaps only one or two people who made real money investing in it? That is insane to hear, if that's true.
Speaker 3:Yeah. And keywords here, investing specifically in that technology versus benefiting from it broadly. Yeah. Because if you were in any type of business that required shipping and and receiving goods from all over the world, you benefited directly from the technological change even if you weren't, like, investing in companies that were functionally creating it.
Speaker 1:Yeah. I would certainly agree. So they they marked the containerization wave starting the year is 1956. It was late in the previous wave, but that year, the company soon to be known as Sealand revolutionized freight shipping with the launch of the first container ship, the Ideal X or the Ideal 10. Sealand's founder, Malcolm McLean, had an epiphany that the job to be done by truckers, railroads, and shipping lines was to move goods from shipper to destination, not to drive trucks, fill boxcars, or lay boats.
Speaker 1:Sealand allowed freight to transfer seamlessly from one mode to another, saving time, making shipping more predictable and cutting costs. Both the cost of loading, unloading, and reloading, and the cost
Speaker 3:of So prior to this, you would just have, like, a wooden crate that would just get thrown on a ship. Yeah.
Speaker 1:And then you'd So you have to stack it, unstack it, figure out how you have to do a puzzle every single time. You wanna load Tetris. Tetris. Yeah. Now it's just stacking blocks.
Speaker 1:Jenga instead Yeah. Of Tetris. Much easier to play to play Jenga, supposedly. The benefits of containerization, if it could be made to happen, were obvious. Everyone could see the efficiencies, and customers don't care how something gets to when they can, where they can buy it as long as it does.
Speaker 1:But longshoremen loo would lose work. Politicians would lose the votes of those who lost work. Port authorities would lose the support of their politicians. Federal, like, regulators would be blamed for adverse consequences. Railroads might lose freight to shipping lines.
Speaker 1:Shipping lines might lose freight to new shipping lines, and it would all cost a mint. Most thought McLean would never be able to make it work, but he squeezed through the cracks of the opposition he faced. He bought and retrofitted war surplus ships, lowering costs. He went after the coastal shipping trade, a dying business in the age of new interstates to avoid competition. He set up shop in Newark, New Jersey rather than the shipping hub of Hell's Kitchen in Manhattan to get buy in from the Port Authority and avoid Manhattan congestion.
Speaker 1:And he made a deal with the New York Longshoremen's Union, which was only possible because he was a small player whom they figured was not a threat. What's interesting is that, yeah, I I I think it's like the direct investment might be very concentrated. But when I think about the rise of the sixties, the seventies, the eighties, like globalization, I'm thinking of Nike. And I'm thinking of companies that were built on the back of globalization, even the iPhone, Apple. Like, the these companies exist in part and are beneficiaries of containerization.
Speaker 1:And so it's not a direct investment in the the fundamental technology, it is enabled by it. Yeah. I don't think so.
Speaker 3:Yeah. We'll have to get through the article, but it's it's already feels like it's somewhat somewhat clickbait. Not clickbait, but to say like no one's going to make money on AI or you're not going to make money on AI.
Speaker 1:Yes. Let's skip to his conclusion about generative AI. He says, Let's grant that generative AI is revolutionary, but also that as is becoming increasingly clear, this particular new tech is now already in an evolutionary stage. It's towards the end of its cycle. It will create a lot of value for the economy and investors hope to capture some of it.
Speaker 3:This is the key point.
Speaker 1:Yes.
Speaker 3:I totally and Agree. And when, who, and how depends on whether AI is the end of the ICT wave or the beginning of a new one. Right? Yeah. Is it SaaS or is it God?
Speaker 1:Is it the final SaaS product and then we're stuck? Or is it something entirely new and we're just gonna start combating Yeah. Combating?
Speaker 3:Is it is it consumer software? Is it enterprise software?
Speaker 1:Is it
Speaker 3:something entirely new? Right?
Speaker 1:I don't know. If AI had started a new wave, there would have been an extended period of uncertainty and and experimentation. I feel like that's the last decade of OpenAI. I I feel like 2015 to 2025 was that period
Speaker 3:of uncertainty. Have to Is it is it people in 2015 that were trying to make chatbots, right, with no hype? Totally. And really no user. Not a lot of users.
Speaker 3:Right? Yeah. Or are you just counting like when OpenAI was like, okay, we can actually be a for profit company now and and we can productize this. But even then, there was like a pretty large gap between them deciding, like, hey, let's let's actually raise traditional capital for this Yeah. Before they could get out the API Yeah.
Speaker 3:Before they could get out ChatGPT.
Speaker 1:Totally. Yeah. And and also, like, there was this in in AI, the period of uncertainty and experimentation that was the the TikTok algorithm, the Netflix recommendation algorithm, Facebook's core AI investments. They have bought billions of dollars of GPUs, not for generative AI, not for LLMs, but just to make better ad recommendations, better content recommendations. And so there's I don't know.
Speaker 1:There's a lot there. We'll have to continue to dig in, but let's keep reading. He said, When thousands or millions of tinkerers use the tech to solve problems in entirely new ways, its uses proliferate. But because they are using models owned by the big AI companies, their ability to fully experiment is limited to what's allowed by the incumbents who have no desire to permit an extended challenge to the status quo. This doesn't mean AI can't start the next technological revolution.
Speaker 1:It might, if experimentation becomes cheap, distributed, and permissionless, like Wozniak cobbling together computers in his garage, Ford building his first internal combustion engine in his kitchen and Treveknech building his high pressure steam engine as soon as James Watts' patents expired. When any would be innovator can build and train an LLM on their laptop and put it to use in any way their imagination dictates, it might be the seed of the next big set of changes, something revolutionary rather than evolutionary. But until and unless that happens, there can be no eruption. Tyler, like, don't you think it's possible to build and train an LLM on your laptop and use it in any way your imagination dictates?
Speaker 2:Yeah. I mean, I I mean, I don't know about training a whole new LLM, but, like, people are getting a lot of value out of open source ones that they run locally.
Speaker 1:Llama, the deep sea, plain.
Speaker 2:Obvious. Yeah.
Speaker 1:Yeah. It it doesn't I mean, I I somewhat agree that we haven't seen that many totally new, crazy, like, unprecedented uses of l l LLMs where it feels like it's an entirely new category. Like, it's hard to point it like the Uber for AI where it's like this company would never have existed. It feels like a lot of the companies are kind of evolutionary. Like, we have site builders, and then we have vibe coding platforms that's sites on top of them, figma.com.
Speaker 3:Think they
Speaker 1:can build faster. Figma helps design and development teams build great products together, get started for free, use Figma Make if you want to develop a website.
Speaker 3:Yeah. A lot of times, companies come on TBPN to talk about what they're building. They're building an AI application.
Speaker 1:Yeah.
Speaker 3:There is a company started ten years ago basically doing the exact same thing.
Speaker 1:Yep.
Speaker 3:They just didn't position it in the same way. They weren't using prompts. And they weren't weren't using reasoning and and things like that. But still, it it looks and it looks and
Speaker 1:sounds like the same SaaS problem definition.
Speaker 3:It's like Yeah.
Speaker 1:The problem was like organizing information for lawyers Yeah. Or answering the phone. And we had a phone tree that was just deterministic, like robotic press 2 for, you know, customer support.
Speaker 3:Press 2 for you. Solve a problem. It's like Better. Product can be twice as good. Yes.
Speaker 3:Which is enough to to to kind of eat into existing market share. Yes. Maybe create new Yes. Markets. Right?
Speaker 3:I think the market for people that can create software has obviously exploded Yeah. Right? Which is why you see Vibe coding revenues just exploding to the billions of dollars collectively.
Speaker 1:But it does seem like the video games are getting more realistic. Video games are getting more realistic. The software is getting better. The spreadsheets have more useful tools. There's just a little extra helper everywhere.
Speaker 1:It's a lot of copilots. It's not a lot of entirely
Speaker 3:new then clients. You see ChatGPT, and it's the usage looks a lot like the way that people use Google Search. Yeah. It's better in many ways. But the the core value that's being delivered is quite similar.
Speaker 1:He actually talks about domain specific models. So first, he says economists are predicting that AI will increase global GDP somewhere between one to more than 7% over the next decade, which is 1 to 7,000,000,000,000 of new value created. The big question is where that money will stick as it flows through the value chain. Most AI market overviews have a score or more categories, breaking each of them into customers and industries served, but these will change dramatically over the next few years. You could instead just follow the money to simplify the taxonomy of companies.
Speaker 1:There are data infrastructure companies. There are model companies, user application companies, AI customers and consumers. But what the history of containerization suggests, if you aren't already an investor in a model company, you shouldn't bother. Sam Altman and a few other early movers may make a fortune as McLean and Ludwig did, but the huge cost of building and running a model coupled with the intense competition means there will, in the end, be only a few companies each funded and owned by the largest tech companies. If you're already an investor, congratulations, there will be consolidation, so you might get an exit.
Speaker 1:Domain specific models like Cursor and Herr Harvey will be part of the consolidation. These are probably the most valuable models, but fine tuning is relatively cheap and there are big economies of scope. On the other hand, just as Google had to buy Invite Media in 2010 to figure out how to sell ad sell to ad agencies, domain specific model companies have that have earned the trust of their customers will be prime acquisition targets. That sounds like another group of people who would be making money. I like, when you say, like, only OpenAI investors will make money, it's like, well, there are, like, 7,000, you know, people on that cap table in one way or another.
Speaker 1:Like, All the investors, all the LPs and the funds that are investors, all the employees, all the people that got in through SVVs, it's not just two people. Feel like it's a lot of people that are in the big winners, even if there's just a few power law winners.
Speaker 3:Yeah. Another way to look into this is like if you're investing in a series A at a $300,000,000 valuation
Speaker 1:Yeah.
Speaker 3:Assuming just crazy explosive growth
Speaker 1:Yep.
Speaker 3:It's very possible the company, even if it does well, would someday sell for a few $100,000,000, and you wouldn't have actually made any money even though you got an exit.
Speaker 1:Yeah. Here's here's a good, like, counters point to some of the companies that are potentially in a more precarious situation. He says, Well, it's too late to invest in the model companies. The profusion of those using the models to solve specific problems is ongoing. Perplexity, Inflection AI, Writer, Abridge and 100 others.
Speaker 1:But if any of these become very valuable, the model companies will take their earnings either through discriminatory pricing or vertical integration, launch their own competitors. Success, in other words, will mean defeat, always a bad thesis. At some point, model companies and app companies will converge. There will be simply AI companies and only a few of them. There will be some winners, as always, but investments in the app layer as a whole will lose money.
Speaker 1:The same caveat applies, however. If an app company can build a customer base or an amazing team, it might be acquired. But these companies aren't really technology companies at all. They're building a market on spec and have to be priced as such. A further caveat is that there will be investors who make a killing arbitraging FOMO panicked acquirers willing to massively overpay, but this isn't really investing, he says.
Speaker 1:And so, again, it's another group of people that will get rich, but it's maybe not a durable source of alpha, which is an interesting thought. Where else? Let's keep going. This is a very long article. You should go read the full thing.
Speaker 1:So let's close this out by reading his conclusion. And of course, if you want to read the full piece, you can head over to Colossus Mag. There is nothing better than the beginning of a new wave, when the opportunities to envision, invent and build world changing companies leads to money, fame and glory. But there is nothing more dangerous for investors and entrepreneurs than wishful thinking. The lesson learned from investing in tech over the last fifty years are not the right ones to apply now.
Speaker 1:The way to invest in AI is to think through the implications of knowledge workers becoming more efficient, to imagine what markets this efficiency unlocks, and to invest in those. For decades, the way to make money was to bet on what the new thing was. Now, you have to bet on the opportunities it opens up. So Jerry Newman. He's a returning venture investor.
Speaker 3:Totally totally agree with this conclusion. Right? Like, I think if you come in with a with a $200,000,000 venture fund right now and are just investing at at crazy multiples pre revenue, investing in new foundation model labs, you're gonna have a really tough time. But that doesn't mean and and I don't know. I think I think saying like the app layer as a whole will lose money, at least when you look at private markets.
Speaker 3:Right? The whole point is that a lot of the companies can go to zero and like a handful of them will create enormous value and that's okay.
Speaker 1:Yeah.
Speaker 3:Right? So not that bearish. But I do think it's it's not a, you know, at at this stage in the market, spraying and praying is gonna lead to some bad outcomes. Yeah. Really understanding the opportunities, really understanding that, hey, maybe this is a lot of the winners here are gonna look more like traditional software.
Speaker 3:Yeah. And that's okay. But it just means you have to be You know, I think the the company we had on yesterday, FileVine Mhmm. A good example of this, started as enterprise software for law firms.
Speaker 1:Yep. Already has ton of clients.
Speaker 3:Now, you know, they have a 100,000 lawyers actively using the product every day in a really good position to vend in a variety of different models. Yeah. And they will, depending on how they execute, prove to be a big challenge for new AI native companies that will have to decide, do we wanna be sort of a ancillary product or do we want to own the workflows? And if we want to own the workflows, we have to rebuild all these different products that help a firm run
Speaker 1:Yep.
Speaker 3:And and do that with maybe a ten year ten years behind other players in the category.
Speaker 1:Yeah. I mean, venture's always been the game of pick the winner in the category, but it feels like it's more important than ever to actually define the category because and and understand, is this particular category gonna have one winner or three winners or two winners? Is it gonna wind up being a duopoly or a oligopoly?
Speaker 3:I'm excited to talk to Is this Taylor about this. He's building you know, he's the eight hundred eight hundred pound gorilla
Speaker 1:Yes.
Speaker 3:In AI for customer experience. Yes. Right? But it's a category that has act an active capital war going on. You have heavily funded new players like Sierra and Decagon.
Speaker 3:You have the intercoms of the world
Speaker 1:that Our partners are taking fin dot ai, the number one AI agent for customer service. We're going to ask Brad Taylor about his performance benchmarks, his competitive bake offs, his ranking on G2. Because we we are obviously supporters of Finn, but interested in following the the the fight. And I'm I am very interested in how oligopolistic will that particular market be. There are certain markets that have just kind of run away.
Speaker 1:It certainly feels like just in terms of knowledge retrieval, we could be looking at a monopoly with OpenAI and ChatGP or a duopoly with Gemini. But it doesn't seem like there's going to be 10 search engines and 10 default chat apps that people are going to. It's certainly not Or gonna 10
Speaker 3:deep research APIs. Exactly. Right.
Speaker 1:Yeah. It feels like there's gonna be one or two that kinda compound and people get comfortable with and they stick with.
Speaker 3:Yeah. Well, in other news, Emmett says, I'm excited to share Aurora Water is the official partner of Huberman Lab for water. Aurora is, of course, company I co founded a while ago and worked on this partnership with the Huberman Lab team, Rob and Andrew, for a very, very long time at this point.
Speaker 1:Yeah. We
Speaker 3:So started talking about it probably A year ago. Couple well, started talking about it maybe a couple years ago. Yeah. Actually got them product over Nice. About a year ago.
Speaker 3:They used it a bunch. They tested it a bunch, and finally launched this partnership earlier this week. So absolutely thrilled to get this across the line. And yeah, big vote of vote of confidence from the Huberman team.
Speaker 1:And I love it. And in other Huberman world news, his his network, SciComm Media, is working on a new show with none other than David Senra.
Speaker 3:It's David Senra by David Senra.
Speaker 1:Yeah. The show is called David Senra. And interestingly
Speaker 3:Hosted by David Senra.
Speaker 1:Yeah. They picked David Senra as the host of the David Senra show. Yeah. And so we will watch the launch video that he put out on X yesterday.
Speaker 3:Pull it up.
Speaker 1:Is nine years ago. I launched Founders. Today, I'm launching a new podcast called David
Speaker 7:Nine years ago, I launched the Founders Podcast. On Founders, I tell the stories of history's greatest entrepreneurs and extreme winners. This week, I'm launching a new podcast called David Semmer. On this show, I sit down for conversations with the best living founders
Speaker 1:in the world. I'm ready when you're How many camp you got three camp?
Speaker 7:People like Daniel Ek, Michael Dell, Brad Jacobs, Todd Graves, Michael Ovitz, and many others. My goal with everything I do is to obsessively study the greats and find timeless ideas that you can use in your work.
Speaker 3:We have to change
Speaker 1:or we're gonna go out of business.
Speaker 7:And now you can learn directly from these legendary founders.
Speaker 5:You know what I see
Speaker 7:the most common core of all the people that are successful for me is I've never satisfied. You said something interesting. I like the pressure. I do. Thrive on it.
Speaker 7:Founders will still come out every week. And this new show will now have episodes dropping every other Sunday on all platforms like Spotify, Apple Podcasts, YouTube, X, and everywhere else that you find your podcasts.
Speaker 6:There are parts of me that still live in the valley.
Speaker 7:When did you know you were good?
Speaker 5:I don't know that I'm good. I know
Speaker 7:I'm different. And I'm out there for this chicken finger dream.
Speaker 6:Failure is not an option.
Speaker 1:Chicken finger dream?
Speaker 7:Nothing was gonna stop me from doing it. It's binary.
Speaker 3:There's We need a we need a wall set up here and run through.
Speaker 1:Great. Dan
Speaker 3:Dan in the chat says, the market is not ripping. What are the white suits for today? Bitcoin is up one
Speaker 1:and a half percent.
Speaker 2:It's a
Speaker 3:bright spot.
Speaker 1:It's a it's a bull market in Podcasting. Of volatility. If you were short volatility, you've done very well today. Right? Because it's not a volatile market.
Speaker 1:There's always there's always bull market there.
Speaker 3:It's a it's a little rough out there.
Speaker 1:It's just a it's just a fun day to put on a white suit. We just feel like we're feeling some optimism. We're, you
Speaker 3:know The fun. We just had some good energy in the studio this morning. We wanted to we thought maybe if we put on the white suits, the market
Speaker 1:Yeah. We'd be able to materialize a bull market. Let's make it happen.
Speaker 3:You're trying to send it.
Speaker 1:Anyway, before our next guest hops on, let me tell you about Vanta. Automate compliance, manage risk, improve trust continuously. Vanta's trust management platform takes the manual work out of your security compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex program.
Speaker 3:Did you see this post from Shiel? He said, interesting. We might see in New York Stock Exchange IPO where the underlying asset is a bunch of paintings. Woah. Billionaire Thomas Kaplan is exploring taking his widened collection
Speaker 1:17 Rambrans, a Vermeer, etcetera.
Speaker 3:Worth 1.5 to 3,000,000,000 public. Is next generation
Speaker 1:of the digital asset treasury, the DATs. You have the physical asset treasury, the PATs. And these will be you'll be able to invest in art. There's been a couple of companies that will allow
Speaker 3:you to in
Speaker 1:art. There was an art platform for a while that was doing that.
Speaker 3:Yeah. I mean, I I, in general, taking art highly I mean, is liquid but not at at sort of like market prices. Yeah. Right? So if you wanna sell art quickly, you have to sell it at a at a massive massive discount.
Speaker 3:Right? You need to be super patient. Yeah. If you have a big collection and you're holding it, especially if you have the a bunch of works from a single artist, if you bring 10 pieces online Yeah. Right?
Speaker 3:At the same time, you flood the market with supply. Prices will come down. So it's a very weird thing, but this makes sense if Thomas wants to be able to get out all at once or or get
Speaker 1:get out.
Speaker 3:Get out partially, get some liquidity. This is probably more effective than than selling, you know, just selling it selling it piece by piece. He gets to hold on to the art too. That's the other thing.
Speaker 1:Oh, mean, he could still store it.
Speaker 3:Probably keep keep some in, you know, different properties, etcetera.
Speaker 1:Well, we have our first guest of the show, Brad Taylor, coming into the from the Rooster Intermediate Room. Brad, how are doing?
Speaker 4:I didn't get the wardrobe notice.
Speaker 1:Yeah. We normally wear white suits when the market is ripping, and and we're celebrating
Speaker 3:But Sierra's ripping.
Speaker 1:But Sierra's ripping, so we're celebrating them for you. We're wearing them for you.
Speaker 4:Thank you for celebrating our growth. I really appreciate it.
Speaker 1:Yeah. It's been fantastic. Give us give us the brief history, the the founding of the company to the news just last week.
Speaker 4:Yeah. So at Siro, we help companies build AI agents for customer experience. So think, maybe it's on a website, maybe it's answering the phone, no one likes to wait on hold. Now you can chat with an AI agent. We're helping do everything from originate mortgages to help you get a better rate on your SiriusXM plan to help in, you know, when your ADT home alarm system doesn't work, you'll now chat with an AI agent to fix it.
Speaker 4:We're a couple years old. We're the leader in this space. We kinda uniquely have run towards, I would say, larger enterprise businesses. We're trying to help companies that candidly it's hard for them to deploy AI because they've got lots of legacy systems. Maybe they're in a regulated business like the health insurance market or banking with the whole hypothesis is if we can help them be successful, there's just a ton of value and leverage in that.
Speaker 4:So as you mentioned, a couple weeks ago, announced a recent round of financing, which is we're proud of just a milestone on the path, but I think kinda recognizes our leadership in this space.
Speaker 1:You're the chairman of OpenAI. How should I think about application layer versus model layer? I'm sure you get this the time. There was a meme for a long time about, oh, OpenAI is going to go on stage at Dev Day and just steamroll a bunch of companies. You seem to have good information on what they're going to steamroll and not
Speaker 3:the other thing is there were so many two years ago, so many different companies that that had thriving businesses doing customer various customer service platforms.
Speaker 2:Sure.
Speaker 3:And, you know, many people would have said, these companies are just gonna move quickly on AI. Get this. You know, they have the customer But you clearly saw it differently and have proven that that that Yeah. Hasn't been necessarily the case.
Speaker 4:I'll answer both. I'll start with the foundation models. My my theory of how the market plays out is that the foundation model market will look a little bit like the infrastructure as a service market where it, you know, primarily provides technology, low level technology to a lot of applications companies. And then there's all the adjacencies, you know, like if you look at Amazon Web Services, they've got some developer tools. If you're kind of in the area like Snowflake and Databricks, there's probably an Amazon product that competes with you.
Speaker 4:The farther you go towards serving a line of business, you know, like ERP systems or CRM systems, the less likely it is that you're gonna run into an infrastructure provider competing with you. I think the same is roughly true in the AI market. If you think about what's required to make AGI, it's a lot of like training stuff but it's also maybe software engineering agents. So that's probably sort of in the the the target of these foundation model companies. The closer you get to, you know, Harvey doing legal AI or Sera doing customer service AI probably doesn't seem in the core of these, you know, research labs, you know, primary functions.
Speaker 4:The reason I think that the applied AI market is exciting not just for Sierra, obviously, I'm a you know, I'm very loyal to my own company. I don't think most companies wanna buy a bag of floating point numbers and then figure out what to do with it. Know, they wanna buy a solution to their problem. And if they can, you know, turn on Sierra and it will answer the phone and bring down their customer service cost by 50% overnight, they're gonna do that, not try to, take these models and try to do it from scratch. So they can buy Harvey and get an antitrust review for one tenth the cost, they're gonna do that.
Speaker 4:And I think, you know, I also I was talking to Toby Lukey at Shopify one time and he was joking how many people come up to him and me and like, aren't you just a database in the cloud? And you're like, yeah, I guess so. But there's a lot more to it and it turns out these workflows are valuable. So I'm I'm really banking our company that there's a lot of value in these agents. And I but going to the second question on the incumbent software providers in this space, it's very hard to disrupt your own business model.
Speaker 4:If you're licensing customer service software per seat and you have to make an AI agent that will actually cannibalize your own business to realize the value of this new technology, that's not just a technology problem. Right? That's a business model transition. And the history of technology is littered with companies that saw the slow motion car wreck of their business model being hurt by a technology trend and not really being able to respond to it fast enough. And I have so much respect for people like Satya who navigated those transitions, but, you know, candidly, there's a lot more companies in history that didn't navigate transitions like that.
Speaker 4:And I think that's candidly just a simple reason why it's hard for a lot of the incumbent companies to to respond to this new technology trend.
Speaker 1:When you were thinking about starting this company, did you did you like, how methodical were you about map mapping the market? Is there, like, a whiteboard picture of you looking at maybe I should do ERP. Maybe I you know, was this one of a few options that you narrowed down once you studied the market, or was it something that just came to you in a fugue state or something?
Speaker 4:Yeah. It's such an interest you said that. We actually did call up some, you know, potential customers. We started those conversations just saying, hey. If you could put us on one problem, what would it be?
Speaker 4:And by the end, we had a pretty clear picture of the available markets. I don't think any of it was particularly surprising in some ways, you know. It's like software engineering, customer service, content marketing, you know, all these things that come up when you think about if you have a technology that can see and understand text and voice that can reason, you know, what are the direct applications. But kind of the to the the thing that we're most excited about is not where we are today but where it might head. And our whole theory is that your AI agent will end up more important than your website or your mobile app in the future.
Speaker 4:Mhmm. And as a consequence, we think the addressable opportunity here isn't just customer service which is really compelling and interesting but saying, you know, how can you actually drive more sales? How can you actually create a personalized concierge for your your brand? I mean, just to give the math of it, if you actually have a phone call with a human being, it probably will cost on the order of $20 at least. And it really depends whether it's onshore or offshore.
Speaker 4:If you think about running a large scale consumer brand with an ARPU of $20, you know, how do you afford that and you can't? And as a consequence, it's almost impossible to talk to most consumer brands. You bring down that cost to 20ยข or even 2ยข over time. You just think about the dynamics. Let's say you're a large mobile phone carrier and you're fighting for retaining your subscribers, you're not just gonna recoup cost savings and customer service.
Speaker 4:You're gonna say, how many phone calls can I have with my customers so that I retain this subscriber for five more years? Think about the impact on your lifetime value of your customer. So what's exciting about this, like so many new technologies, is like the first order effect is obvious, which is saying, hey, let's reduce the cost of customer service by, you know, 50%. The second order effects are almost more exciting, which is the companies that lean into this faster will actually grow their top line faster than their competitors. So that's what's so fun about technology disruption.
Speaker 4:Right? Is that, you know, you can end up sort of upending, you know, sort of the incumbent versus insurgent dynamic. At the same time, the value proposition to the companies using Sierra is more than just cost reduction. It's saying like, how can we actually give you a competitive edge by moving faster in this new world of AI?
Speaker 3:How are companies actually you know, you're you're going and and landing some of the probably just crazy logos. Right? And and these are, you know, massive companies with, you know, operations all over the world. How are they actually rolling it out? Are they are they giving you specific sort of segments, regions?
Speaker 3:You're proving it out at a smaller scale or or what does the actual rollout look like?
Speaker 4:Yeah, so starting, you're right. One of the things I'm most proud of is the scale of some of the companies working with us. Over half of our customers have over a billion in revenue, over 20% have 10,000,000,000 in revenue or more, which is pretty, I'm just really proud of that. And I think it shows you do not need to be a small startup to deploy AI successfully with Sierra. On the rollout, it's a very kind of a variation of what you said.
Speaker 4:Some companies start with us on a use case or two. We're going live with one of the largest healthcare companies in the world and actually replacing their IVR system. And it was just in a handful of months to do that. So it can really I think it's really up to the customer how assertively or aggressively they wanna roll out these new technologies. And the thing that I've been most pleasantly surprised is some of the largest, most well regulated companies in the world actually wanna move faster.
Speaker 4:I was having a conversation with my cofounder Clay about one of our largest clients and kinda being awe inspired about how fast they're moving. And I said, now I know why they're big. You know, now I know why they're successful because they're moving faster than some of their smaller competitors that we also work with. And you kinda you really learn to respect the, I say, intentionality, assertiveness of a lot of these really well run companies.
Speaker 1:What's the sales process for a huge company like that? Is that you meet the CEO at a fancy conference and start pitching? Or I mean, it feels like an advantage of having a career like yours and the Rolodex that that's sort of the unfair advantage here.
Speaker 3:Yeah. In many ways, you're doing what you guys have done in two years is incredibly impressive. Yet at the same time, it's what I would expect of the team.
Speaker 1:Mean, just like Palantir and Karp. He's just so fun to talk to. He's in all these interesting places. And it's like, yeah. I could imagine that some big Fortune 500 company just wants to hang out with Carp and, like, talk to him.
Speaker 1:And then, yeah, they do a deal together. Is that how it works?
Speaker 4:Well, it's funny when you said this is what I expected. This is like why it's hard to start multiple companies. Like, yeah, of course it's gonna be successful.
Speaker 1:I'm like,
Speaker 4:have you ever started a fucking company? It's hard. You know? So but
Speaker 3:Yeah. But I mean, it's it's and I and I and I say that as like a as a compliment where it's like it's Yeah. Yeah, going from zero to a $10,000,000,000 company having, you know, this crazy, you know, list of customers is incredibly difficult. But I like when people have a lot of advantages through what they've done in their career and their network and then they just put on an absolute master class. Yeah.
Speaker 3:Like, it's it's very satisfying.
Speaker 4:Well, appreciate you saying that. You know, it does all have to start with the product though, you know, because certainly I would say my guess is the way I think of Sierra is we have the best product but because we have a founding team that's sort of been there and done that, we're not like a hugely risky bet. You know, we know how to work with large companies. We're not gonna show up and be learning from, you know, first principles how to engage with a large bank or a large health insurance company. And that's a unique value proposition because right now most of the incumbent technology platforms, their products don't really work.
Speaker 4:And so you really wanna use a best of breed product right now. And I think our value proposition is we are a best of breed and I believe the best of breed product in this space. But we also know how to like work with complex companies. Know, we're gonna show up with as many people necessary to help you be successful as opposed to just throwing a product over the wall and saying good luck to you. And so that I think I, you know, certainly our reputation helps but at the end of the day it's the quality of the product that really matters here.
Speaker 4:And just, know, think about it this way. If you have 400,000,000 phone calls a year, the difference between having an AI answer 100 or 300,000,000 of them is probably measured, you know, and, you know, at least eight or nine figures, right, in terms of like the impact on your business. And so we always start with the product and as you said, take advantage of our unique unique advantages as a company, which fundamentally means we know how to work with you. It's sort of interesting, like, it just turns out that, you know, there's lots of different stakeholders between a business team, a technology team, a compliance understanding and just like the constraints that a company is dealing with. We just try to show up with a ton of empathy and, you know, show up recognizing this isn't just a technology problem.
Speaker 4:You know, it's sort of a kind of bureaucratic word but it's a change management problem. You know, how do you get from point a to point b when your auditor and your regulator is scrutinizing everything you do? Well, we understand that. Like, we're gonna help you with that problem, not just the technology problem.
Speaker 1:What do you think the steady state of commerce interactions look like? Because I imagine that companies will be using AI to interface with their customers. But then customers will be using AI agents to negotiate on their behalf and select products. And without leaking too much of the OpenAI road map, I think we're all pretty convinced that some sort of agentic commerce thing is going to happen. I'm already seeing pop ups for, you know, links to products.
Speaker 1:When I, search for things, I'm gonna be able to say, hey. Go get me the best option, the best price. Is the future voice agent talking to another voice agent? Or do they just interact at some lower level API level at some point? Like, how does that all play out when you get agent on agent warfare?
Speaker 4:I I think you're right about your intuition but it's also as you were sort of alluding to, the future is not perfectly clear even for people in the middle of it like me. But I I think in general, I think a lot of intent has already gone from search towards ChatGPT. Especially for the more considered the purchases, the more you're likely to use something like AI. You know, when I was traveling this past summer, I used ChatGPT to plan the entire trip. If you think about something serious like purchasing a home or, you know, I you I've talked to so many friends who are using ChatTPG to figure out how's the school district in this area, what neighborhoods are good, you know.
Speaker 4:And you think about that just from a commercial standpoint, that is extremely qualified intent at the very top of the funnel and so much research has already been done there. But as you alluded to, the thing that's not happening is you're not kicking off your agent to go fulfill that transaction. It sort of stands to reason to me that that will likely happen at some point. And then the question is for a lot of our customers are sort of on the other end of that is, how do you wanna show up in that new world? How do you ensure that your goods and services show up in the right way when you're engaging with an agent?
Speaker 4:How much do you wanna directly engage with consumers? How much will you be able to directly engage with consumers? I don't know all the answers but step one is make an agent. You know, step one is, you know, make an agent so that whatever inter agent protocols emerge, you can be present and do business in that new world. And that's one of the main value propositions Sierra provides its customers is like, we don't know exactly where the world's gonna go but a prerequisite is to technically be able to interoperate in that new world.
Speaker 4:Yeah. Think it's gonna impact different industries differently. Sorry about Do
Speaker 3:the form you will generally die? Whether there's certain businesses Mhmm. Out there that sell basically sell product. Let's say like a a company that makes aircraft. Right?
Speaker 3:If you go to their website, you're not just, browsing inventory and checking out. It's, like, you
Speaker 4:just Add to cart?
Speaker 3:Yeah. You're not adding to cart. Tesla's likes to do add to cart buttons on, you know
Speaker 1:Most, yeah, many companies out there.
Speaker 3:Let's say somebody
Speaker 1:It's contact sales.
Speaker 3:Aviation enthusiast wants to buy a small plane. They've got a contact sales. And then, like, the second you get to the form, so much, like, so many leads just die at the form. And something I've been doing with LLMs is just ask talking to them about like the pricing of different products. Because I don't wanna go to the form and like get a sales rep to call me.
Speaker 3:I don't wanna be waiting or don't wanna just get a callback at a random time. I don't really wanna go through that. But but I wanna kind of understand. And so it feels like the form is something that fundamentally could just potentially go away. And it's you go to a website, you talk with an agent.
Speaker 3:Mhmm. Maybe you give them your information because you do wanna hear more. You do wanna talk to somebody at some point. But it feels like feels like that could be going away.
Speaker 4:I agree. I mean, you just think about qualifying a lead, which is basically what those forms are, why not ask follow-up questions? Why not collect enough information so that when that great salesperson does follow-up, 80 of the work is done and it's just the the human touch part of it. You know, agents are already doing outbound sales, debt collections for credit cards, processing payroll for small businesses. These agents are already doing sales and I think that, you know, the best salespeople the reason why they're the best paid people in most companies is because they're worth their weight in gold.
Speaker 4:But what about the median salesperson? And then my guess is you could make an AI agent that's actually quite a bit stronger than most, you know, just because you're standardizing the best practices really really fast. You can run AB tests on AI agents. It's hard to run AB tests on people, you know. And there's so many advantages as you said to not only just forms but really thinking about agents as not stuck in one part of your customer life cycle but really managing the whole thing.
Speaker 4:And let's just take I don't know much about airline, you know, buying an airplane for a hobby pilot but imagine this AI agent sort of the concierge to the whole experience. So you're browsing around airplanes, you set up an appointment, you know, what if it's collecting a bunch of information before you get on-site after you I don't do you test drive an airplane? But let's say you do that, know, afterwards it's asking you questions, maybe helping you with financing. I think that's the future where these things are going which
Speaker 1:is Yeah.
Speaker 4:There's something Whether or a person's involved, it's a concierge helping you through the whole process.
Speaker 3:Yeah. There's something about, you know, the the consumer being proactive, engaging for information but then, yeah, using the the the the airplane example. Let's say they don't have something in stock, know, the the agent At at what point are you guys already thinking about agents being proactive and and reaching out to to a customer after they already engaged? Like, I imagine a lot of the core of what you're doing today is just reacting to customer needs, inbound questions, things like that or or problems with the product, whatever it is. But then at some point or another the the agent is going active and actually going outbound.
Speaker 3:But how do you think about how do you think about that?
Speaker 4:That's exactly right. I almost think of it as like Maslow's hierarchy of needs of agents. Yeah. Step one is answer the phone, you know, when your customers call. Step two is can you actually get in front of of customer issues?
Speaker 4:I noticed the ramp logo on the top right. They're they're one of our customers and, like, they have, like, the coolest implementation of our platform. The it's, you know, not only doing service, but really, like, I love their ask AI function and their product. It's just one of the coolest experiences. And it's just it's not service, right?
Speaker 4:It's basically a conversational experience around one of the best design technology products in the world. And I think, you know, Ramp is obviously one of the best engineering teams in the world but can every brand do that? You know, can every brand make their their agent proactive, offer a conversational experience? I look at if you've ever visited like Brazil or India and you look at the impact of WhatsApp, it's like, well, can you be present there in a way you weren't before? Well, yeah, you can.
Speaker 4:What an awesome opportunity for agents. So it's new channels. It's proactive. And this is really where we're trying to to guide our customers and I think, you know, kinda represents the future of our platform in a lot of ways.
Speaker 1:The the latest round, I think it's $3.50 on 10,000,000,000. That feels low on the dilution side. How did you think about the amount of money you need to raise, sizing that? I mean, you've been part of so many interesting financings throughout your career. How'd you land on that?
Speaker 1:And what does it say about the the usage of that fund, how in capital intensive your business is, the state of the markets right now? Just take me through the the thesis for the round.
Speaker 4:Yeah. I always think of rounds in pretty simple ways which is what valuation are you raising at? What do you need to fill in that valuation so that if you need to raise another round or if you're going public that you've more than filled out that valuation with fundamental business metrics like in your revenue and growth rate. And then you start and then you say, okay, how much capital do you need to reach that milestone? And so that's kind of how we reached it and that three fifty number, it's obviously there's a lot of precision involved but it is a bit of an art form because you're making a lot of assumptions about the future which is what are the capital that we need to reach the revenue scale where you know, we can reach the next milestone in our business.
Speaker 4:So that's how we think about it. I I'm I'm pretty methodical about it. You know, I think a lot of entrepreneurs make the mistake of raising too little or too high of evaluation and they end up sort of sort of walking sort of a zombie company just because they've they don't have the capital they need to to reach the next milestone but they've but their valuation is such that they've sort of priced themselves out of the market. So that's the main sort of thing I'm paranoid about and I feel really good about how much we've raised. But more than anything too, feel great about the investors we have around the table, benchmarks here at Green Oaks, Neil Mehta at Green Oaks is just remarkable.
Speaker 4:And so love love our board and and in particular, you know, I think about who do you wanna be on the journey with to get to that next milestone and and really happy with the folks we have around the table.
Speaker 3:How are you thinking about IPO timelines just generally? Do you think Sierra is gonna be another Stripe or Databricks where you just stay private forever because you can and it's probably allows you to to, whatever, take more risk, think long term, etcetera? Or given that you've been, you know, done your tour of duty on the public side in the past, I'm curious how you think about it.
Speaker 4:Yeah. I don't think we're Clay and I've talked a lot about this. I think our intention is to eventually go public. You know, we there's a lot of advantages to staying private. I also think there's a lot of advantages to sort of having liquidity for your employees, you know, that access to capital.
Speaker 4:You know, I really admire the way I know the Stripe founders pretty well and, know, they're in a really unique position. I respect what they're doing. I think we'll probably take the more traditional path though. It's far enough in our future, you know, that's just more our philosophy because I think that's where you're going. We don't have reticence to do it eventually and we'll probably more take the traditional path.
Speaker 3:That makes sense.
Speaker 1:How do you think about the Sierra fundraising process versus what's happening at OpenAI? Is it just so much simpler to underwrite business? Zeros? Have you have you learned? It's not it doesn't feel like it's just add a couple more zeros.
Speaker 1:Like, the OpenAI stuff, it seems deeply complicated. Is it refreshing to have more of a simpler business to underwrite? Or are there at least lessons that you've ported over? Have you learned something from OpenAI that you brought back? I'm interested.
Speaker 3:They're like c corp traditional equity financing. It's pretty works pretty well.
Speaker 4:Open eyes are just a really I mean, they're it's a one of one business as you all know really well. The thing that's just so different about building the AGI versus building a PlayAI company. They're just so different from a capital standpoint. You know, as Sam has articulated better than I could, AGI will fundamentally in some ways be driven by compute. And so much of the capital strategy that Sam has articulated is really how can we have the best compute infrastructure and the most resources available for both training and inference especially with these reasoning models and and meet the scale of demand there.
Speaker 4:And when you have something that capital intensive, it just changes your approach to fundraising and partnerships. And I really admire what the management team of OpenAI has sort of orchestrated there just because I think it's the company that is best positioned to essentially build the the best computer or the largest computer in the world and have the best research team, which I think if you're saying what are the ingredients to winning in that market, I think they've checked both those boxes. In some ways, the applied AI market I I I'm not sure other founders in this space would agree. Like, I don't think, you know, we're like an AI company. I mean, we're using AI to solve business problems but
Speaker 3:Well, that's what that's what I what I love about kind of the whole approach is that we, you know, we talk to a lot of companies that say, we're an AI agent company or we're an AI company. And then you look, you ask a few questions and you realize like, you're building enterprise software. There's a bunch of thing there's a bunch of things that
Speaker 1:There's no shit about
Speaker 3:and there's nothing bad about that. We love enterprise SaaS more than anyone. Software. But, you know, if you forget that and you get fixated on, you know, we're we're building, you know, we're just building agents. It's like you're gonna just your customers will eventually ask you for a feature set that looks like traditional software, although maybe it's a different workflow.
Speaker 4:Or you might burn 20,000,000 of capital training a model because it makes you cool at a San Francisco cocktail party and lose sight of why Yeah. Your customers are hiring you to do the job that you're doing. And so, you know, to some degree I as you said, I'm we're unashamed of being an enterprise software company. And more than that, I think the way we invest our capital is very different.
Speaker 1:Thank you. Thank you.
Speaker 3:How do you what's your framework for understanding SaaS companies in the public markets today? What what percentage do you think will be it feels like everybody will have to transition at some point from traditional seat based pricing to value based pricing. You guys have the benefit of starting out with value based pricing and saying, how many phone calls do you get? How many how many how many individual reps do you have? You know, what what percentage of that can we, you know, augment or replace?
Speaker 3:But just feels like doing that transition on a on a on, you know, a quarterly reporting cadence feels completely, you know, miserable.
Speaker 4:Yeah. My high level premise is it's easier to transition your technology than it is to transition your business model. And it's especially if you're public. Mhmm. Just because if you just think about let's say you have your I'll just pick an ERP company and you have an enterprise license agreement for some number of seats, you know, and or, you know, ITSM or something like that.
Speaker 4:And they say, okay, we're gonna make an agent to automate 70% of what this platform does. That's easy in theory but what happens in the next renewal, like in six months? Maybe your AI agent platform isn't quite mature enough to actually, you know, make up for the difference in lost seats. So maybe your sales rep who's incentivized on increasing the size of that contract goes and it says, you should buy both. You know, buy the same number of seats and an AI agent.
Speaker 4:And all of a sudden, the CFO of that company is like, wait, I thought this was supposed to reduce the cost. You know, like, what's going on here? And so I think the I I think all these incumbent SaaS companies have an opportunity to come out strong in this market but they have to really transition their business model and their technology model at the same time. And anyone who says it's easy has never been a public company CEO because it's it's really hard, you know, because you end up having to tell a story to your investors, to your customers, to your employees. You have to go through a trough of despair probably.
Speaker 4:And you know, if you look at Microsoft's transition to the cloud and it was really complicated to go from Windows revenue to Azure revenue, now Satya is a hero for having done it. But at the time there's a lot of people including me who wrote them off. And then afterwards you're like, wow, props to them for making that transition and coming out so strongly. But for every Microsoft, there's a Siebel Systems who didn't make a transition, you know. And for those of you online who don't know Siebel, that was the company that Salesforce beat in the transition to the cloud and now you probably don't know their name because they didn't sort of make it through that transition despite being the market leader in the on premises software era.
Speaker 4:So I think all these companies have an opportunity and I think that it really takes leadership. I think it's very hard to do as a public company just because it's very hard for investors to sort of see through the quarterly earnings to see because you can, it's just hard. It's just like, is this company mid transition to something great or are they just dying? You know, and like, it's easy and it's like and a lot of it a lot of it is ambition and storytelling. And so it's just a complicated time in software.
Speaker 4:I think it's really gonna come down to leadership both like stakeholder management and technology leadership for companies to make this transition.
Speaker 3:Are you getting a bunch of calls yet from AI application companies that haven't found product market fit and need to find a soft landing or do you think that's a few more quarters out because those companies are still well capitalized?
Speaker 4:We are. There's definitely the, you know, just given the amount of revenue growth for the ones that are working, it's pretty clear the ones that aren't. There's some good teams, some good technology there too. So we try to look if it makes sense at all of them, if there's a good team that could contribute. We actually did a start?
Speaker 4:When did About six months ago.
Speaker 3:Okay.
Speaker 4:Yeah. What's your I assume it will accelerate.
Speaker 1:Yeah. We're having Hamant from General General Catalyst on the show Friday. What's your reaction to his sort of hot take? I don't know how much it was taken out of context, but this idea that triple, triple, double, double, double is kind of dead. You need to be 10x ing every day.
Speaker 1:Not interesting unless
Speaker 5:you're 10x.
Speaker 1:10x ing. Is there something there where like the power law is getting steeper? There's a there there are more winner take all markets, more faster growth companies, but then also just some that are, you know, triple triple but then gonna be nothing.
Speaker 4:Yeah. So I have a complicated opinion on this one. So first I'll say the faster you grow is sometimes correlated with a lack of a moat just because what enabled you to grow fast might enable your future competitors to grow there as well. You see this in some social services as well. You know, you'll have these social services grow from zero to whatever million users overnight based on a social mechanic and very few of those have ended up durable.
Speaker 4:Some of them ended up incredibly valuable like TikTok but there's like, you know, the cloud Yeah.
Speaker 3:But TikTok also spent like billions of dollars on user acquisition.
Speaker 4:Exactly. Exactly. In enterprise, I do think that growth is greater in agents in part just because there's more value in agents than there is in software because you're, you know, essentially doing things like that where people were doing before. So you're you're just achieving more valuable outcomes than just slight productivity enhancement. The reason I'm cautious on it is I think growth can sometimes be artificial, you know, so you can basically juice the numbers.
Speaker 4:And and the question is, are you creating a durable business? And, you know, we talk a lot about, like, in our board meetings just about first mover matters and there's definitely like a green field right now. But what matters is where you are ten years from now. So, like, are you creating a machine to make happy customers at scale? And so many of these businesses can grow to like, you know, 50 or maybe even a 100,000,000 in ARR and plateau.
Speaker 4:And you saw this with a lot of different businesses actually. I mean, it was and so the question is what is your addressable market? What are your product advantages? What are your go to market motion? And can you scale to add to the next zero?
Speaker 4:Can you grow to the next order of magnitude? And I the only reason I I think it's a smart I thought it a smart point that growth has definitely accelerated in this world of agents. But as an investor in particular, you're you're really worried about can they get a billion in revenue? Can they get 10,000,000,000 in revenue? And it turns out that, like, growing really fast to 20,000,000 is, like, loosely correlated with that.
Speaker 4:You know, it certainly means there's product market fit. But the question is like, was it with a very small niche of startups
Speaker 3:or selling tokens at a loss and you're just Yes. Exactly. Subsidizing it. Right?
Speaker 1:Yeah.
Speaker 4:So I'm I'm a huge believer in quality annual recurring revenue and very happy customers. And my view is if you can do that quickly like we have, that's great. If you had someone growing more slowly but it was very high quality revenue from very happy customers, I'd probably bet on them over just the fast growth rate because to me that's a more durable business over time.
Speaker 3:Do you think do you think ex like just raw execution can be a moat? Because some of those things you were saying earlier, it's not like you guys have access to different LLMs that someone else in your category might not, but it's just this kind of like know how of selling into the enterprise and being able to do that at, you know, just with with pure excellence that feels like it's separated you guys from
Speaker 4:I'll say it's a I think it's I think it's all of the above. You want the best technology, best product, best go to market. But I think right now because the technology is changing so fast, execution compounds over time, you know. So if you had a great product today but you weren't executing well, you will not have the best product a year from now. So that's where I think execution is maybe the main thing we focus on because it's basically the pace of innovation in your product and the pace of reaching and making new customers successful.
Speaker 4:And we wanna have the best pace because I think what we want, if I come on this show a year from now, I wanna be farther ahead of our competitors than we are now and that is all a function of execution.
Speaker 3:Last question I have. I know I know we're a few minutes over. So hopefully you don't have to jump. But how how are you thinking about the evolution of the cloud market broadly? You have companies like Oracle waking up and getting extremely aggressive.
Speaker 3:You also have a bunch of neo clouds. I'm sure all of these different players are calling you every day. Hopefully not sending you AI chat gbt generated cold emails. But but I'm I'm curious like, you know, where expect to be and and what kind of vendors you expect to be using on that side over the next five, ten years.
Speaker 4:Yeah. The Oracle story is pretty incredible, isn't it? I don't like who would have predicted the
Speaker 3:What's your backlog? If if you were gonna you do you
Speaker 4:have amazing. What's really impressive too just because it sort of shows you, you know, sort of like a founder driven Mhmm. Big view of the market. It's super impressive. And and I've just, like, kinda I just I love stories like that just because it's, like just what I mentioned in Microsoft story where so many of us have written them off and, like, it's just super impressive, the level of execution and clarity that Larry brings to that business.
Speaker 4:Broadly I think the things that change in cloud is just the shortage of supply of GPUs and the demand for compute. And I think that is bringing a lot of there's a geopolitical angle too where are these data centers built, data sovereignty, all of that as well. So I think we're in this new era of cloud infrastructure where the CapEx is getting larger. You're seeing like the market crediting boldness in a lot of ways because if there's truly a scarcity here and I think Sam has been articulating, it's like whoever has the best infrastructure will really contribute to this world of AI in different ways. And so I do think we're definitely in a new chapter there just because it's like different players are making different bold bets.
Speaker 4:And one of the things that's been really fun to be involved with OpenAI is just seeing sort of OpenAI's influence on that as we try to pursue our mission of ensuring AGI benefits humanity and a huge part of that is related to cloud, right? If you don't have the right computer, you're not gonna achieve that mission.
Speaker 1:Makes a lot of sense. Well, thank you so much. Sorry. Can move over. And we'll talk to you soon.
Speaker 4:Yeah. Thanks for having me.
Speaker 3:Cheers. Enjoy the rest
Speaker 1:of your day. Let me tell you about graphite dot dev code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. We are joined by Joe Lonsdale next. We are going to welcome him from the restroom waiting room into TV and UltraDome.
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Speaker 1:You look younger than ever. You're aging in reverse. The camera is helping as well.
Speaker 6:The young the young six young kids, I guess, Keeping me young, running around with them.
Speaker 1:My one
Speaker 6:and a half year old was your competition for this. He was angry. Wouldn't drive him in the car. A little baby car.
Speaker 3:Do you have the most kids of any
Speaker 1:Capital allocator?
Speaker 3:Top GP? Anybody got you beat that you know? Six? Six is
Speaker 6:I'm sure I'm sure some have more. I probably you you know, my wife and I are pretty traditional, so they're just with her, which makes it tougher to make a coach
Speaker 1:65. I think we're gonna get there eventually. I wanted to ask you about this Trey Stevens post. He said he found a Palantir branded iPod Touch generation two that he had custom engraved back in 2009 while digging through a box at my house. Did you get one of these?
Speaker 1:Do you know the story of this? Is this a Tray Stevens exclusive?
Speaker 6:Touch from 02/2009. Actually, I I I I have a lot of early panels here kind of gear. Most mostly, I have these, like, giant things we used to carry around, like, these big computers and Okay. Whatever their cases are called. They're usually usually for guns, but use them for computers.
Speaker 1:Sure.
Speaker 3:I'm not
Speaker 6:sure about the iPod Touch.
Speaker 1:The Pelican case. You probably
Speaker 6:The Pelican case. There's like
Speaker 1:It's great.
Speaker 6:The really serious ones. And I the very first time I brought it to DC, we had a rental car. It was like 2,005. And I went to the address we were gonna stay at. And then there's this very nice black man.
Speaker 6:He's like, you boys are on the wrong part of town. And I'm like, oh, what's this Northwest Southwest thing? You know? So I'm Pina DC.
Speaker 1:What was it like early in the Palantir days? Gary Tan tells the story about, you're not selling Holiday Inn software. You gotta stay at a Four Seasons. I forget exactly what hotel chains he mentioned. Is that apocryphal?
Speaker 1:Is that true? When you traveled for business, would you stay at the top tier place?
Speaker 6:I think the very top of the company would stay at, like, relatively nice places. We weren't upgrading to the nice rooms, but there is it's probably like $6,700 versus $200 a night sort of thing, which, you know, in retrospect, I think there's multiple ways of running a company. I do think when you're meeting important people, you had to sure you're not meeting them at the holiday and that would be probably not be a a good idea for trying to to network with the very top people in these in these contexts. So I I think that's listen. I think a lot people waste too much money when they're starting companies, so I don't wanna set a bad example.
Speaker 6:The I I I was I was actually a top trader at Peter's Fund and I, like, brought on my friends to, like, start this with me. Because a lot of them, I brought on to the to the hedge fund, and it turns out they didn't really like finances, we ended up building out this company. And and and the fund, part of our comp was you can basically spend whatever money you want if you're one of the top guys there. So it was like a very kind of bad place for me to start from in terms of being spoiled already, because we have to be honest here.
Speaker 1:Thank you for being honest.
Speaker 3:Where should we start? There's a bunch of stuff.
Speaker 1:I mean, were just talking to Brad Taylor about this. Hamant over at General Catalyst was saying that, like, the world has changed. Triple, triple, double, double, double for revenue growth is no longer interesting. The only thing that's interesting is 10x ing revenue every year, something crazy. The power law is getting steeper.
Speaker 1:I would love your take on just what it takes to be interesting as a start up in the era of AI, where if you are in the right market or you're indexed to the right thing or maybe you're selling tokens at a discount, you can get to a crazy revenue run rate very, very fast. What are you watching out for? What are you optimistic about? How does all that play out?
Speaker 6:I mean, listen. It's definitely a very different world right now because there's so many new possibilities. I think we were looking at something I I wanna out the person because I'm not doing it. But I was looking at something that was, like, going zero to five this year, and I thought I could easily have gone to at least 15 or 20, if not more next year. But thought the team was kinda like a b b plus, and it wasn't like the very, very best people.
Speaker 6:And and that it's just insane. By way, that that two those two things combined, you can grow that fast with something that was like maybe not the very best people having trouble hiring. And and I mean, the bar is just a lot higher right now. And by the And to
Speaker 3:be clear, that that round will probably get done at
Speaker 6:Oh, yeah. Like a couple 100 at least. Exactly. And and and I'm I'm pretty sure it will. And it's like it's it's it's yeah.
Speaker 6:It's it's like it also raises the bar for everything else. We were looking at this really cool thing in bio infrastructure that could be very important for the future of humanity and for what it could do in the bio world. It's just gonna take three or four years, and these things in bio, as you know, are just hard. And and it's like, you know what? Even though this is so important, like, we we have to on the on the margin, you have to be in, like, the green fields right now with the very, very top AI teams are just so far ahead of everyone.
Speaker 6:So, you know, I I do think there's, like I mean, what Hamad says to to me, it's not as much about, like, exactly the metrics. I think I think some people, like, live in metrics and they should and my one of my partners does too. And, you know, my view tends to be, like, who are the very best talent in the world? Who has the very best cultures? I mean, you see something like Cognition with, you know, 20 gold medal winners or whatever Scott used to work for me to add a part after winning, you know, programming, you know, competition globally three times in a row.
Speaker 6:And obviously, that's the extreme. But the extreme works in AI. Right? So I think for me, it's more about what is the very best talent? And then let's build something that no one else can build.
Speaker 6:And of course, yes, if it works, it's to grow insane speeds.
Speaker 1:Tell me the story of finding Scott, identifying him, recruiting him. It seems like one of the greatest talent acquisitions of all time. You've developed a business relationship over a long time now. How did you even think to back him early, work with him early, any of that?
Speaker 6:I mean I mean, to be honest to be honest, like, Scott is a really special and amazing person. But, you know, I I hired most of the first 200 people at Palantir. Atapar had eight kinda gold medal winners along with Scott who came in at the same time with my friend Vlad Novakoski who was helping me at the time. Amazing guy as well. Just give away all my secrets here.
Speaker 6:We're gonna go go get his help now. But, you know, gotta hide some of these names from you guys.
Speaker 1:This is dangerous.
Speaker 6:But but, you know you know and then and Scott was one of eight that year, and I think another one of them was Alex from Scale, and he was an intern there too. And and, you know, it was actually very funny. I mean, to and I both both amazing people. I think I think Alex left in a way where we didn't stay as close, Scott left in a way where we did stay a little bit closer. But even Scott, I think he he was running around the world.
Speaker 6:And and I I'd I'd been in touch. I actually invested in his new thing after that, was not cognition. I was just a little bit because I thought it was a terrible idea. By the way, this is a very good idea. When you have the smartest people in the world, you should invest in their terrible ideas.
Speaker 6:Just as a as a sidebar, we went back to 2022 and we met these people who were doing something really dumb. And, like, we kinda wanna give money anyway, and we didn't. It was out of MIT and ended up pivoting into Cursor. There's other people there's another one where it's like, I have this chain from yesterday where Coley, my my partner, is, like, forged it to me. And it's like, these guys are really good.
Speaker 6:They're raising 7,000,000 at, like, 40 posts. It's 2022, and I'm like, oh god. It's just we all think it's a dumb idea. I'm like, we can't we can't keep doing dumb ideas, guys. And it turns out they pivoted and they're raising a 5,000,000,000 post right now.
Speaker 6:I'm like, oh god. We just need to like I just need to give smart people money. It's just like it's just
Speaker 5:like, oh, what you have
Speaker 6:to do is so annoying.
Speaker 3:But Yeah. There there there's there's like the the bell curve. It's like, you know, on one end, just give smart people money. On the other end, give smart people money. And in
Speaker 2:the middle, it's like, oh,
Speaker 1:like Oh, what's the idea? What's the attraction?
Speaker 6:What's the Yeah.
Speaker 1:Exactly. Exactly. They just like
Speaker 6:even though it's like actually actively a bad idea, like, them money. And by the way, even the thing that was a bad idea, like Vlad let's be using Vlad now. Vlad's in charge now that he's pivoted to something that's working. It's probably it's also a unicorn. It's like they've they've figured it out.
Speaker 6:So it's it's just insane. Like, it's just all about talent. And so I lost I lost touch with Scott a little bit and I got back in touch with him. Unfortunately, I've been in the last few rounds of cognition. I wish I wish I'd say this is his best friend.
Speaker 6:It's hard it's hard to keep in touch with all the smart people you admire flying around when we're when we're busy. But it's mean, he's someone I really enjoyed getting to know. And he's he's someone you know, he's really grown as a leader more than I expected. Sometimes, you know, people when they're, like, 18, 19, 20, 21, and and you get one impression of them and then you're so impressed, but but, like, was not, like, the leader personality. And now he's just such a, like, a fierce leader personality plus plus, you know, the the global champion thing.
Speaker 6:So, mean, that's pretty amazing. He's doing he's doing good work.
Speaker 1:Yeah. We read a Wall Street Journal article about the latest IMO gold medalists. And I was surprised because I was texting with a GP at a big fund, and they were not tracking it. They were not our joke on the show was, like, every single one of these kids mentioned in this Wall Street Journal article that beat both DeepMind and OpenAI and got the full score on the IMO. They're gonna be getting term sheets.
Speaker 1:But people weren't tracking it as closely. Yeah.
Speaker 3:It seems like when you were hiring these IMO winning folks back with Atapar and and maybe a Palantir. The meta at the time was like, you you wanna invest in the kid who's, like, sleeping on a mattress on their floor, like, sleeping in a closet in San Francisco. Maybe it was, like, somewhat of a near like, a different different track then, even though you can see it becoming consensus now because Yeah. Scott has, you know, shown
Speaker 4:No.
Speaker 6:It's it's Scott it's Scott and Alex and a few others. But listen, I don't think there's too much alpha left in that in the sense that, like, when you have all these people at OpenAI and Anthropic and they've raised infinite amounts of money, like, you know, it was a problem for me in Palantir in 02/2008, 2009 when Meta and Google it doesn't even call Meta at the time, started giving a 100 k bonuses to these kids out of the top schools because we had, like, a monopoly on on just the playbook for the top 20 universities. Mhmm. And they started just, like, giving them, like, a 100 k bonus. That's insane.
Speaker 6:And, now it's literally, like, a 100 times that. Right? So it's it's and and and it's and for these it it is I mean, there's maybe there is some alpha. I'm not gonna tell you all my secrets in this
Speaker 1:show unless
Speaker 6:I'm, like, required to. Tell me.
Speaker 1:Don't know. Oh, you are required to.
Speaker 6:Alpha left, but it's like but it's like it's like I don't think they are.
Speaker 3:If you wanna tell every investor
Speaker 1:Yeah. Yeah. Still have
Speaker 3:to vouch.
Speaker 1:Tell everyone. Be great. No. You can text us after the fact the real secrets. Alright.
Speaker 1:And we'll keep it private.
Speaker 3:How are you how are you thinking about, you know, you've obviously had numerous plays in traditional enterprise software. It feels like a lot of public SaaS today is has this challenge of transitioning from the traditional seat based model to something more like Palantir, the sort of value based pricing. How are you think are you just bearish on public SaaS broadly? Do you think some of them are gonna be able to transition? Brett Taylor just said it's easier to, you know, do a a transition your tech your tech Business model.
Speaker 3:Your tech than your business model.
Speaker 1:Especially in the public markets.
Speaker 6:It's it's so funny to live in this world because it's like I woke up in opposite land where I was like, people just beat the shit out of me for like a decade for doing the wrong thing,
Speaker 1:the wrong model.
Speaker 6:And suddenly suddenly, like, how did everyone do that model? Like, that's great, I guess. I I I I don't I don't actually know if everyone needs to do a change in model, if overall. I I guess I think the more interesting question is, like, which of these SaaS companies owns important infrastructure and workflows that are juxtaposed to other value they can capture with AI and then also still has a technical culture to do that. So this is like a motion at Atapar I'm working on really hard as an example.
Speaker 6:I started Atapar fifteen years ago. It has over $8,000,000,000,000 in the platform. The core infrastructure business is still growing. Infrastructure SaaS business is still growing at, like, you know, 25 plus percent, just that core. There's all these things on top of it starting to grow because it just touches everything when it provides value for wealth managers.
Speaker 6:And so, like, I think to get that business growing 40 or even 50% potentially, it has to, like, build really strong AI teams and workflows that take advantage of where it is. And I think there's going to be a bunch of SaaS companies that do figure this out in the next few years, and those are gonna be really valuable companies. And then the ones that don't figure it out at all, there's probably some danger that they even lose the motive of their core thing to begin with because it's gonna be too easy to copy or something if they're not if they're not, like, scaling it. So so so I I think I think I, again, think it's like a power law thing where some of these are actually worth a lot more, And then most of them don't have the talent to
Speaker 1:do it. Yeah. It's been fascinating watching the narrative shift from the foundation model companies are going to eat everything to the foundation model is going to commoditize. There'll be a couple application layer companies to The the idea that AI would be sustaining in enterprise SaaS because you actually even if you have a semitechnical culture, you don't need to train a foundation model. You can just go grab an OpenAI API and and implement that.
Speaker 1:But there's this business model tension now. And if you're stuck in your business model, there's gonna be a lot of startups that are counter positioning against you, and you're gonna be kinda screwed.
Speaker 3:How are you
Speaker 1:thinking about
Speaker 6:It's it's it's it's interesting because I do think if you own the customer really well, you cut out these things much more easily, but you're gonna have to go faster. The startups are gonna eat it away. There's so many areas where we're
Speaker 1:kinda Or the system of record or some sort of database. Some sort of relationship
Speaker 6:This is right like Seco Socotra as a company I mean, that's like a great system of record for the insurance space. And
Speaker 1:it's Yep.
Speaker 6:Took a long time to build. It's a bunch of talent. They're really coming into their own system of record now, which is very slow. And then they're trying to add the AI in before all the new AI things that Sure. People are funding.
Speaker 6:It's it's I I think it's pretty interesting. I think the system of record has a very good chance of winning, but that's a question.
Speaker 3:Yeah. How are you thinking about macro broadly? I feel like everybody's I mean, every asset, all time highs
Speaker 1:Gold, Bitcoin,
Speaker 5:the I like I like the I like
Speaker 6:the meme I like the meme that says printer is coming with, you know, he's dressed up as as as Lord Stark of the
Speaker 1:North. It's like Printer is coming. Yeah.
Speaker 3:But but but for your angle, it's probably generally better use of your time to, like, think about, you know, the opportunities at the early stage today. You could incubate a company. You could fund a company. What what is the way
Speaker 6:I I am. I'm incubating a lot. Listen, I started incubating a lot more in 2021 partially because I was just so annoyed that everything was, like, insanely unreasonably expensive. And then I have
Speaker 3:And you kind of have a monopoly on the first couple rounds. Right? Is the
Speaker 6:Yeah. We probably were too generous letting friends in. I'm always just like, I have these business friends who are just like much more hardcore than me and just like just, like, very sharp elbows and kind of even a little bit nasty. And, I'm I'm I'm, like, I tend to, like, just like everyone around me to make money. So I probably should have taken just only myself the first two rounds.
Speaker 6:That's especially Cyronic, I should have done that. But whatever. We still we own plenty of it. It's it's fun to start things that are important for the country and that win, and we we make enough money for everyone. But, no, we we we do do the whole, like, big first round ourselves now just because that's the right thing to do for the fund, and then, like, do a lot of the second round.
Speaker 6:And this I think building is still the I mean, even right now today, you guys tell me I'm seeing AI rounds where, like, I'm really happy if I get 15% in a series a of a really hot AI company right now. Think I got 16% something the other day by overpaying. I I think it was the right thing to do. And it's like but but I mean, I've seen a lot things where I get five percent and I'm or 6%.
Speaker 1:Like, actually you just talked to Brad Taylor. He raised $350,000,000 at $10,000,000,000 valuation. Like, that's not a lot of dilution. It's gonna be hard to build a huge position in that company. And that's a one year old company.
Speaker 1:Like and these are happening all the time. I mean, he's special. But, yeah, it's still it's still a
Speaker 6:huge There's a special the specialist ones. I mean, I only have two or 3%. I'm really happy because I think they could be a $100,000,000,000 company. So it's it's very weird. It's different than it was.
Speaker 1:Talk to me about the the early stage start up market in Texas. Obviously, you were in San Francisco for a long time, buddies with Gary Tan, coworkers at some point. Gary's leading a revitalization of Y Combinator. Is there something adjacent? Like, if I wanted to go talk to 50 young people building startups, the next stop in Texas, like, where would I go?
Speaker 1:Who would I be talking to?
Speaker 6:So and and I've been fighting for California to fix itself for a long time. Gary's an old friend, obviously, from our fraternity days through Palantir. And I think he's come more to my point of view on these things, which I really appreciate. He's doing a good job. We used to argue a lot.
Speaker 6:You know, it's yeah. There's a lot of history there, though. He's Gary's Gary's crushing it. The the thing about Texas, there's a few things. I'd I'd say if you want to build, like, the very top AI startup in the cloud application layer model, whatever, like, doing something really hard new there, you probably should be in San Francisco today.
Speaker 6:Like that that's just where the talent is. It's a very strong network effect. I would love it if it wasn't, but Yes. It is. And and it's there.
Speaker 6:And that's it. So so so why what do you do in Texas? Well, I think we have we like I mentioned earlier, I think if you're building in the land of atoms, if you're manufacturing, I think that's probably the most important company in the country for the US Navy as as well as doing very hard things in robotics, very hard things in in software around it as as applies to defense. We do have, like, you know, 10 or 15 of the very best AI software people for that there. So I think what you're seeing in Texas is it's a really good place to manufacture.
Speaker 6:You have a lot of the best people, like Boring Company, a lot of top SpaceX talent. Others are coming out here. I think you have a lot of things that go really deep in health care here. Obviously, MD Anderson in Texas is one of the probably best cancer center in the country alongside Memorial Sloan in New York. And you have just a lot of other really deep health care research, health care services groups, health care services.
Speaker 6:There's multiple, multibillion dollar new companies in health care here there. So and and and I and I do think, like like, when I was talking Reid Hoffman, I was trolling because we have different politics. Like, where do you test your, like, self driving trucks? And of course, he tests them in Texas. I mean, if you're trying to, like, do things Yeah.
Speaker 6:You know, if I'm trying to, like, automate, like, of our companies that I'm really bullish on is bunch of ex Waymo guys and they're automating construction with excavators and they're gonna, like, automatically run all sorts of construction and quarries and other things. And of course, they're doing it in Texas. So so Texas is just like a great center for industry, for building things in the real world, for robotics talent, for defense talent, for health care talent. It's it's it's it has great AI talent, but it's not gonna compete with like the next new AI models in San Francisco. San Francisco right now is is just is just obviously an awesome place for investing for that type of stuff.
Speaker 1:My current, like, understanding of the start up, like, micro worlds is that you're still probably going to be doing a road show on Sandhill Road or in San Francisco. When you're a later stage, you're going to be talking to crossover funds in New York. You're going to be in D. C. If there's a lobbying component.
Speaker 1:But then you're going to need to build your company wherever makes sense. And for certain industries, Texas makes a ton of sense. And
Speaker 6:For for a lot of things in in the real world, a lot of things in health care, Texas is by far the best place to do it. It's it's it's it's listen. I love you can go to the government. It's not like they agree with me on everything, but you can go to them and you can talk and they're reasonable and they respect you and you go back and forth. And you don't have to be Republican or Democrat to do it, by the way.
Speaker 6:Like, they actually it's like you can't they actually care about business succeeding. It's very cool. It's like it's a new idea to me to have a government that has a group. Like, well, how do we help business succeed? It's really great.
Speaker 6:And then you can get things done and it's reasonable. So I definitely like building things here.
Speaker 3:Jordy? Without giving away too much alpha or feel feel free to put people down the path.
Speaker 1:Give out a call.
Speaker 3:But what do you
Speaker 1:think is
Speaker 3:the most under under hyped trend adventure right now? Obviously, AI is just drowning everything out, but feels like could be at the, you know, beginnings of a new robotics wave. But how how are you seeing it?
Speaker 6:Yeah. I'm I'm really interested you say robotics. I'm really interested in the stuff going on in the real world using AI, which I think is like a whole new area that it's still early, but I think you're gonna I think it's just like a much bigger part of the economy than people realize. So for example, if you can do a certain part of construction automated with Bedrock, like, I think people don't understand, like, that means you can run a quarry better. And there's a $100,000,000,000 of quarries.
Speaker 6:And if you can make quarries have higher cash flow, that's worth, like it's worth tens or hundreds of billions of dollars. I mean, it's just like and there's like there's like so many things like this where the real like, the real economy is, like, 85% of the capital, and that's all about to be transformed. And I think people underestimate, like, how much we're gonna need in credit to do that, how much just like just like just like how much big stuff's going to happen that you can create in the economy in the twenty thirties there. So, you know, even stuff like Boring Company and, like, and, like, automating that and making it much, much, much better is obviously using modern AI and other modern technologies. They iterate with engineers on it.
Speaker 6:And it's just really impressive how much cheaper you could do things, how much better you could do things. So I think that's under hyped and misunderstood because it it takes a couple years longer to really get out there and start spreading quickly. But I think I think it's just, like, much bigger than people realize, and that's one of my favorite areas. I guess the other one, you know, I think in general, people spend too much time on, like, the super giant companies. Like, people call them the infinity stories or the things that could be worth trillions.
Speaker 6:And I talked to some of my friends who are running running very big funds, and they're really only interested in something that could be worth trillions of dollars and have all the top talent. And it's it's almost like I think I think one of them is a is a good guy, but he said to me, you know, I wanna be in the room with the powerful people doing the most important things. And I think that's that's like an instinct of a lot of our top investors right now. And actually, think there's going to be literally like a thousand, like 5 to $50,000,000,000 companies and, so many niche application areas Mhmm. That do need you to build out the workflow, do need you to build out the operations, and do you need to kinda go after the different service areas of the economy.
Speaker 3:Yeah. What about it? It feels like, you know, when you look at, like, Palantir, Atapar, OpenGov, it feels like you've had a lot of success with companies that were very under you know, not didn't have a ton of, like, crazy hype and and did the kind of, like, behind the scenes heavy lifting to get to the point where you could have a massive outcome or or be really critical to an industry. Are you do you think there's not enough of that? Like, it it feels like a lot of every company gets hyped, know, incredibly quickly now if they're talent dense.
Speaker 3:And are you still, like, trying to find opportunities where you can just kind of quietly build in a category for four or five years?
Speaker 6:Yeah. I mean, I think I am building a bunch of stuff that's not really that hyped right now that's using AI that's that's gonna change these different categories. And there's this, like when you look at the talent out of Palantir, it's a lot like the talent out of PayPal except on a bigger scale in a lot of ways because Palantir have many more years to compound with a very top talent. And so you you have things like and just, random things. Like like, Candid is just, like, probably do I don't know.
Speaker 6:I mean, they don't want me to get their numbers on public on this show, I guess, but it's like they're doing they're doing health care billing. They're growing really fast. They're gonna do, you know, they're gonna get into the billions of of of revenue, like, within the next few years probably. And and and it's just like just like, I guess, you know, it's a $280,000,000,000 space and there's not that much hype around it.
Speaker 1:Mhmm.
Speaker 6:And it's just like, wow. This is like this could be absolutely this could be like a $100,000,000,000 company in the early twenty thirties and and almost no one will have heard of it. And it's like, there's just so much stuff like that right now, which is is pretty fun. So I mean, I I I think I'm pretty bad at hype. Think Palantir eventually got hyped, like, despite being us being bad at it.
Speaker 6:I should say people
Speaker 3:Well, yeah. I'd say, like, Cyronic's an example of something that, you know, got a ton of hype, ton of capital, ton of attention really quickly.
Speaker 6:That that that that that did. I I I we did get a lot of the right talent and we're kinda at the right place at the right time
Speaker 1:Yep.
Speaker 6:Where there's no one else who was doing this for the Navy and had, like and no one else who had, like, that density of of talent and operational. Dina's just such an amazing and such a fast CEO, he brought in kind of other cofounders who were also really top people. So I think, like Andrewll, they just had so many of the best people right place, right time, going hard. So I guess that got hyped earlier than I would have expected. That's fair.
Speaker 6:But most of the things I'm doing are not like that.
Speaker 3:Yeah. That makes sense. Do you
Speaker 1:think there's any positive knock on effects of the insane CapEx that's going into the AI foundation model world? Like, we saw Sam Allman say he's gonna build 10 gigawatts. Mark Zuckerberg saying he's doing a gigawatt. Elon just did Colossus two. It's a gigawatt.
Speaker 1:And the interesting thing to me is, like, this is in some ways, like, the like, you know, Cyronic, Palantir, Andoril, SpaceX. Like, those are American dynamism companies. But I if you were talking about reindustrialization and just making big things in America, doing stuff that requires government approval It's good. Like, Elon's, like, Colossus two across three different states. Like, that feels like that unblocks some crazy stuff, and then it's gonna be easier to work on health care or work on automated trucking.
Speaker 6:Tell me very, very good. No. You're a 100% right. Whether or not it's a bubble and whether or not they should be investing this much money, I'm not even gonna comment on it because I think it's just, like, really good for America Yeah. That they are, like, practicing building these things at this scale.
Speaker 6:You're a 100% right. They have to fix some of the permitting stuff.
Speaker 1:Yep.
Speaker 6:They have to create all this infrastructure we can use now for advanced manufacturing. We can use the advancements to make things cheaper to do at scale for building related things in America. We're gonna build a ton of stuff on top of this. I mean, for me, I just love it because Yeah. You know, I talk about the different levels of AI investing where it's like zero is energy infrastructure, one is chips, two is data centers, three is the models, four is software infrastructure, five is apps and services.
Speaker 6:And like, I'm mostly doing things at five and some four. Yeah. But but by people doing all those stuff at the bottom with insane amounts of money, that makes my life very easy. It makes everyone else's life easy too. So this is great for America.
Speaker 1:Yeah. For so long, we've we've heard, like, oh, America, we can't respond to DJI. GoPro got roasted. Oh, we can't respond to Unitree. Maybe Elon will figure it out.
Speaker 1:And it's like, I feel like we're getting close to, like no. You can actually marshal $10,000,000,000 of capital, set up a massive facility in a couple months and get approvals and do the thing that you need to do to build a ton of stuff in America.
Speaker 6:So I think I think this is really, really good. I'd love to see a wave like this for bio decade as well because right now, our bio regulatory apparatus is completely f'd up. There's been some really strong hit pieces in the journal recently or some huge messes there. But it's the same sort of thing where if you could, like, take this energy, apply it to that infrastructure.
Speaker 1:Yeah.
Speaker 6:And and and, you know, hopefully, apply some breakthroughs we're gonna see there to own it. Like like but it's the fact that America's can still do this, these companies can still do this, it's it's awesome. It makes us very bullish.
Speaker 3:Yeah. You had a pretty viral post yesterday responding to Nick Huber who was taking taking shots at the great citizens of Austin. He's going
Speaker 6:after Austin.
Speaker 3:Yeah. Yeah. Yeah. Him. Yeah.
Speaker 3:And it turns out the photo was from, like, after school ended. So, like, very clearly
Speaker 6:I'd see. I could totally tell it was a joke photo.
Speaker 3:Yeah. Yeah. Yeah. But but I wanted to ask something. You said, sorry, Nick.
Speaker 3:Many but many of these people relaxing in the nice weather in our hometown are the spouses, mistresses, and children. Where did where did you where did you get
Speaker 1:Where'd you get number two?
Speaker 3:Met number two there. Where did
Speaker 1:that come from?
Speaker 6:He was trying to his whole post was like, these people are lazy. I'm gonna outsource them for $5 an hour jobs to The Philippines. And and it was like an anti American kinda like negative post. Yeah. And then so my clap back is actually our US employees are are so wealthy and so successful and they build things so much bigger than anything you're doing that they can afford to have their families relaxing and
Speaker 3:And mister Shits.
Speaker 6:The joke the joke of mistresses is they're so wealthy that maybe they have mistresses relaxing in the sun while they're working because they're creating so much wealth. We don't need to outsource to throw a rolled slop. We can we can have great wealth in this country and great success and don't make fun of my city. So it was it was obviously a joke but some people some people got really sensitive about that.
Speaker 1:So Your masterful poster.
Speaker 3:Yeah. He used his own tricks against it.
Speaker 1:You did. You did. I was a strong ratio. I appreciate it. No.
Speaker 1:Yeah. I I
Speaker 6:it was like this is so it's it's a Jewish New Year. Okay. And I I was like stepping out of it. The the synagogue service and I was just like, I probably should have stayed in a synagogue and put on my phone and snoop
Speaker 3:it on my phone.
Speaker 1:So it's
Speaker 6:dangerous when you when you give me, like, a little bit too much free time on a day. It's dangerous when I this.
Speaker 1:Yeah. Well, never stop posting. Never log off, Joe. We enjoy your posting. We've enjoyed your appearance.
Speaker 1:Thank you
Speaker 3:so actually like I think X would like it broadly if every time Nick Huber posted, you just quoted it and dunked on him because Please. He's always leaving something open
Speaker 1:Oh, yeah. For his
Speaker 6:I I worry that I hurt him because he, like, has these really angry replies. And I was I I thought it was kind of a joke slapback, but I think he was, like, pretty offended. I saw if he's listening. I I didn't mean to be offensive. I appreciate his hustle porn even though I disagree with attacking America.
Speaker 1:He he he knows what he's doing. He's getting in the
Speaker 3:purely it's just
Speaker 1:this rolling around in the mud. He's gonna get a little dirty.
Speaker 6:It's gonna happen.
Speaker 1:Good. But thank you so much for taking the time.
Speaker 3:Come back on anytime. See
Speaker 1:you guys. Good. Have fun hanging with your kids. We'll talk to you soon, Joe.
Speaker 6:Alright.
Speaker 1:Cheers. Bye to you. Let me tell you about julius.ai. What analysis do you want to run chat with your data and get expert level insights in seconds, loved by over 2,000,000 users and trusted by individuals at Princeton, BCG, Zapier? I got the name right this time.
Speaker 1:Did you see the Carhartt jacket that Turner Novak says? If a VC shows up to the meeting wearing this, you should sign the term sheet immediately. Is this a callback You ever Didn't Bain Capital do a Carhartt collab for merch, and they got some backlash from them? Soleyn dollar allegations. Allegations.
Speaker 1:VCs keep it in the I mean, there's nothing wrong with putting on a suit. You saw Joe Lonsdale just came on the show in a beautiful suit. Nothing wrong with the suit. The the what's the with the Patagonia vest, that's very iconic VC attire. You throw on the this looks like Han Solo.
Speaker 1:Like, this this jacket looks like something Han Solo would wear. It looks good, though. Anyway, in other news, YouTube restored some some suspended accounts. Ben Thompson has been breaking it down. He said that, he gave kudos to the information for their headline, which is YouTube to Reallow Accounts Banned Over COVID nineteen Integrity Election Violations.
Speaker 1:And Ben says this stands in marked contrast to other headlines that that characterize it as people who spread COVID misinformation, and he's quoting The Verge on that case. And he says, it's true that there was some misinformation, but there's no question that not just that not just legitimate, but in retrospect, true content was censored, and its and its creators kicked off the platform. Google, in in that letter to Jordan, who is rep a a Republican legislator, said that they placed the blame squarely on the Biden administration. Google is saying the Biden administration Yeah. Twisted their arm.
Speaker 1:And so this obviously goes back to the discussion about what's happening with Jimmy Kimmel, what is the role of the government in free speech. I think it's that the government shouldn't be involved at all, actually, and that no government should be involved in this stuff. There's been debate over what level of involvement
Speaker 3:person that didn't spread at least a little misinformation during that era. Right? For sure. Whether you're a government, whether you're some schizo conspiracy theorist. Right?
Speaker 3:Everybody was
Speaker 1:that's what makes America great is that We we're in the COVID were suffering through the same pandemic that China was suffering through, but we, you know, supposedly had free speech. And so we could talk about it and throw out crazy ideas and pitch all sorts of different solutions and debate them in the in the great online marketplace of ideas. And so this seems like a positive shift. More speech is probably better. More free speech is probably better.
Speaker 1:Ben says his concern on stratechery is more narrow, and that is how tech companies should have approached challenges like these over the past years and how he hopes they approach them in the future. And so he says Google and YouTube were obviously not the only tech companies under pressure during the COVID era. Meta CEO Mark Zuckerberg said the same thing a year ago. Another was Spotify and Joe Rogan, which Ben wrote about at the time. And he got a lot of angry responses to, his take on how Spotify should have handled the Joe Rogan situation, the pressure on Joe Rogan during the COVID pandemic.
Speaker 1:And Ben says, but I think in the re in the revelations of the intervening years, and I might add, a lot of those headlines I complained about above prove my point. And most disturbingly, we have just this month seen some of the most discouraging and devastating consequences of losing the cultural value of free speech. Still, that wasn't the part of that update. Rather, I was writing directly to Eck and other tech CEOs declaring an adherence to free speech was not a get out of jail free card in terms of avoiding criticism for content hosted on your platform. And in that light today, I don't have so much advice as I have an extore an exhortation.
Speaker 1:Tech platforms need to lead the way in reestablishing the cultural mores around free speech and not just to get their get out of jail free card back. Tech is dominant culturally in a way it wasn't when the cultural mores around free speech were established, of course, centuries ago, and the most generous interpretation of their actions over the last decade is that they were afraid to assert their power, bowing to the wishes of the loudest voices in the media and in their own companies. In fact, the best way to avoid partisanship is to be the natural arbiter of all the platforms say they want to be is to decline to take positions on all issues but one, the importance of free expression. That is the key enabler of finding a path forward on all those other issues and is the foundation of a free society. That, in a nutshell, has been Stratikori's approach to politics, and it has served me well.
Speaker 1:I think it would scale just as well to the largest companies in the world. He says, take a page out of my book. It's working for me.
Speaker 3:Page out of the First Amendment.
Speaker 1:Page out of the First Amendment. Potentially the first page. The first page of the of the list of amendments.
Speaker 3:Did you see this post from Lachlan Phillips? He said
Speaker 4:I did. This
Speaker 3:is this is Kugen thought. The most toxic trait is the belief that instead of jailing Elizabeth Holmes, she should have been placed she should have we should have placed her under YC arrest under the watchful supervision of Gary Tan and forced her to rebuild and rebuild her device over and over again like Iron Man for the next eleven years or until she gets it working.
Speaker 1:I love it.
Speaker 3:I would And this is what you wanted to see. We instead of the the kind of shit posting that she's doing be Yes. Great if she was like, guys, I've I'm I'm I'm I'm I'm figuring out what went wrong before. Here's a more narrow solution that we could create.
Speaker 1:Yes. I mean, it doesn't even need to be I mean, I understand that from prison, are not going to be able to build a device that tests your blood. Like, she's just not gonna have the equipment for that. But she could be reading papers. She could be she could be reading the analysis and giving thoughts that over time could look very good.
Speaker 1:Like, you see it today with the news of Donald Trump and RFK are talking about Tylenol that's being hotly debated. The administration is taking one position. Different media figures and health experts are taking different positions. I'm sure Andrew Huberman will comment it on comment on it at some point. Right?
Speaker 1:But she has the opportunity to read all the research, comment on it, and then we will see in a year or two or maybe more how those predictions panned out. And that's what we've been seeing with Martin Screlly, where he has made a bunch of bets on he's very bearish on quantum computing right now. We'll see what happens. We just get to wait, and we will remember, wow, he was correct about his bear call on quantum computing. And so that updates us to think that he is an interesting thinker on the valuation of new technology companies.
Speaker 1:Right? Whereas right now, she's kind of just leaning into this character of, oh, wow, she's posting from prison. I think that novelty will
Speaker 3:That's wear true. Fun.
Speaker 1:I think that novelty will wear off, we'll wanna see something more meaningful.
Speaker 3:I mean, it's definitely broadly changed people's, like, general feelings towards
Speaker 1:For sure.
Speaker 3:So For sure.
Speaker 1:Anyway, Fall, generative media platform for developers, the world's best generative image, video, and audio all in one place, develop and fine tune models with serverless GPUs and on demand clusters.
Speaker 3:Head over to tbpn.com/sounds, which is brought to you by fall.
Speaker 1:Printer is coming. Amit in in is investing. Right? From Besant, we are going into an easing cycle, and we'll see a massive decrease in mortgage rates. Powell should have signaled a 100 to a 150 basis points of cuts, not just 75 points.
Speaker 1:We'll begin Fed candidate interviews next week looking for someone with an open mind.
Speaker 3:Looking for someone with an open mind.
Speaker 1:Open mind to low interest. So what
Speaker 4:we want.
Speaker 1:Potentially. We'll see. I would I would love to see mortgage rates come down. I would love to see the cost of housing come down. I still feel like the opportunity is probably in just building more housing, building a lot more.
Speaker 1:But Love when they're
Speaker 3:when the rates are low. Hey, when
Speaker 4:they're high.
Speaker 1:It certainly helps. But, of course, that that ten year isn't really behaving. Yeah. It's gotta you gotta whip it into shape.
Speaker 3:Jim Jim Jim Kramer with that ten year better start behaving.
Speaker 1:It's great. There is a fantastic profile on Jim Kramer in the news today. We should take a gander through this because it's a fun one. This was brought to my attention from let me find it from Joe Wiesenthal. He says, great profile in Business Insider of a guy who was on the Odd Lots podcast who wakes up at insane hours every day to cover the markets.
Speaker 1:Did you see this? So I did not. Jim Cramer is a busy man. The Mad Money host known for his emphatic delivery and bold stock calls on the air gave a rundown of his hectic schedule when speaking on Bloomberg Odd Lots podcast last Monday. Here were the highlights of his routine.
Speaker 1:And get ready to be mugged, Jordy. He wakes up. He kicks off his day at 03:15AM. 03:15AM. Do you know what time he goes to bed?
Speaker 3:Six?
Speaker 1:11PM.
Speaker 3:What?
Speaker 1:He gets four hours of sleep a night.
Speaker 3:Just doesn't need to sleep? Does he nap?
Speaker 1:There's no competing with this guy. This is insane. I I I like, we try so hard. I feel like we do a really good job. But we're putting up eight hours of sleep a night.
Speaker 1:How did you sleep last night? Go to 8sleep.com. Get a t you get a Pod five Ultra. 30 night
Speaker 3:whisper I wish that I could
Speaker 1:I got a 96 last night, but I slept for seven hours and forty one minutes. That's about four hours more than Jim Kramer slept.
Speaker 3:I got a ninety seven hours twenty three minutes.
Speaker 1:Oh, I win again.
Speaker 3:You win again. You yeah. I just So I guess I gotta go to bed.
Speaker 1:So Kramer wakes up at earlier. At 03:15AM. The first forty five minutes of his day are on, quote, a tight schedule due to his 4AM workout. We're getting into the gym at 06:30 at best. He's getting in two and a half hours ahead of us, and he's on East Coast time.
Speaker 1:This man lives in the future compared to It's remarkable. Crazy. Before the hour, he brushes up on the market by perusing the Financial Times, Bloomberg, The New York Times, The Wall Street Journal, and CNBC. I get two of those done. He's doing six.
Speaker 1:Okay. He's ahead of me there. Kramer also said he sifts through stock research in his inbox, combing through about 700 emails a day. That's remarkable. Amazing.
Speaker 1:I read everything I think is relevant. I'm looking for something to say. I have a memo that comes out, 10 things I'm looking at. I do one thing I'm looking at. He does 10.
Speaker 1:I try and just do the current thing, and he's got 10 of them. He's an absolutely an absolute beast. Kramer said, referring to his weekly weekday morning newsletter for CNBC's Investing Club, he said, so that's my overlord, he referred to the newsletter as. I'm starting to feel that the newsletter's my overlord. I I I respect it.
Speaker 1:Yeah. Go subscribe. Tbpn.com. Throw your email in there. You will get the, TBPN run of show every week, the current thing, my newsletter.
Speaker 1:Then, Kramer appears on CNBC's Squawk on the Street, begins writing Mad Money, his flagship show on the network, in the mid morning. Throughout the day, Kramer spends a huge amount of time reading up on company news and earnings reports. He finishes taping Mad Money around a quarter to six. We saw him there doing that.
Speaker 3:Zach Meyer in the chat says, this guy does not go to the gym at 4AM. Look at him.
Speaker 1:You think he's hiding?
Speaker 3:I I I think it's more like he's not working out for physique. Right? He's he's I mean, we we got to hang couple weeks ago, we got to hang with Kramer for about twenty minutes. It's end of the day. He had a ton of energy.
Speaker 3:He was incredibly locked
Speaker 1:in. Did have a lot ton of energy.
Speaker 3:This was at, like, probably
Speaker 1:five doing something low impact. But I like to imagine him benching three plates, squatting five, throwing up some some 200 pound hang cleans, some clean PRs every day. PRs every day. Getting getting aerobic, getting athletic with it.
Speaker 3:Throwing on a stringer?
Speaker 1:He'll fit it. Yes. Absolutely. We yeah. We get get a get a Gigachad Mass Monster Kramer photo up ASAP.
Speaker 1:I need to see that. He finishes taping Mad Money around a quarter to six and comes home. He'll go out to dinner around 10PM and then say goodnight to his wife before tucking in. Kramer acknowledged that the intensity of his schedule puts a strain on his marriage. I have a great marriage.
Speaker 1:I put that out first because I wreck it every day. I go to bed at eleven. She goes to bed at, a normal time. So that's where I re when I really wreck the marriage. That's not the plan.
Speaker 1:I didn't set out to do that, he said. Kramer's routine doesn't seem to have much changed. In 2015, he told Business Insider that he followed a similar schedule. He's been saying this. He's been waking up at 3AM, tweeting about stocks and puppies in the morning, making a pit stop at the headquarters of the street which he co founded in 1996.
Speaker 1:What an absolute run for Jim Kramer. Anyway, Turbo Puffer, search every byte, serverless vector, and full text search built from first principles on object storage, fast 10x cheaper, and extremely scalable.
Speaker 3:This little turbo puffer is used by Notion, Linear, Cursor and many more.
Speaker 1:I wanna go through VCs to AI startups. Please take our money in the in Bloomberg. This is from Kate Clark. She says, private jets, box seats, and big checks. Investors are doing whatever it takes to get into top AI deals.
Speaker 1:Jordy, would you mind reading the first few paragraphs of this I'll
Speaker 3:to catch up to this article.
Speaker 1:It's page 90. Raising venture capital money has been a breeze for Decagon AI. We're all over the place with the the customer service
Speaker 3:AI. Startup.
Speaker 1:It's a very hot industry. Decagon's doing well. Finn, our partner, is doing well, and Bret Taylor's doing well too. Decagon's two years old. They're developing artificial intelligence tools for customer service.
Speaker 1:All four of Decagon's funding rounds totaling more than $230,000,000 were preempted, meaning firms like Andreessen Horowitz offered to invest before the company started fundraising. Now just three months after a round that valued it at $1,500,000,000 we have the founders on when they announced that round. Decagon is fielding unsolicited offers at valuations as high as five
Speaker 3:Give it up for unsolicited offers. They're some of the best offers.
Speaker 1:For Decagon and a few other AI startups, the fundraising script has flipped. Instead of pitching venture capitalists up and down Sandhill Road, VCs are pitching them, hoovering them with gifts and favors in hopes of leading their next round. Can you catch us up on the rest of the cycle? And I wanna go into some ideas because I think the VCs aren't thinking big enough.
Speaker 3:Big enough. We'll get you back in a second. So Jesse Zhang, the 28 year old cofounder and chief executive officer of Decagon, says investors hoping to back him have offered him everything from tickets to Golden Gate Warriors games to an autographed poster of MMA legend, Khabib Nurmagomedov. John would not know who Khabib is, but I'm sure many of you do. One investor even folded origami cranes into a mosaic of Decagon's logo and hand delivered it to to the company's San Francisco office with a term sheet hidden inside.
Speaker 3:Decagon took the deal, so that's that's a good one that works. Investors are emailing term sheets. They're giving verbal offers. They're inviting founders to sports games. They're inviting founders to race Ferraris.
Speaker 3:And they're inviting them on private jets. Says Bennett Siegel, a co founder of investment firm A Star and an early investor in Decagon. What you tend to see is the best companies are getting preempted every round and the time between rounds is shrinking. The lavish VC overtures are part of a larger Silicon Valley frenzy for AI driven by startups astonishing revenue growth and investors belief that these companies can dethrone tech giants. US startups have raised around 200,000,000,000 this year so far according to PitchBook data, but 41% of that went to just 10 companies highlighting VC's relentless focus on a small group of AI front runners like OpenAI and Anthropic.
Speaker 3:Last year, the share of funding that went to the top 10 companies was less than 10%. A few smaller AI startups have also emerged as investor favorites drawing outsized attention in capital. Among the rising group of hot companies, legal startup Harvey, customer service firm Sierra, and coding company Cognition, all of which have drawn big offers from VC firms. AnySphere, the maker of AI coding tool Cursor, has become a central example of the rush to fund newer AI companies. It's kind of funny that
Speaker 1:I heard you talking trash, by the way. I do know who Khabib is. He's an athlete.
Speaker 3:There you go.
Speaker 1:Nailed
Speaker 3:it. You know everything.
Speaker 1:What else is there to know?
Speaker 3:What else is there to know? He he he punches and he
Speaker 1:He kicks. Kicks. Does he does he do kicks?
Speaker 3:He does kicks.
Speaker 1:He does kicks as
Speaker 3:He does kicks.
Speaker 1:He's into kicking?
Speaker 3:And wrestles. So isn't it any this trend of companies having like one name and then the product name being called something else. It's Yeah. AnySphere and Cursor, Windsurf had the same situation. Right?
Speaker 1:Yeah. So there's this story about Decagon. One investor even folded origami cranes into a mosaic of Decagon's logo. I saw a picture of this and I was confused because a Decagon is just a 10 sided shape. And so it's actually like extremely easy to fold something into a Decagon.
Speaker 1:But I guess they did cranes into the shape of a Decagon or something. Because like It's cranes. Imagine if you're like, oh, I really want to invest in square. I'm going to fold you a square. Going to take a piece of paper.
Speaker 1:I'm going turn the term sheet into something square. It's like, I want to see true origami mastery from a VC if you're gonna try and preempt around.
Speaker 3:Yeah. Yeah. Absolutely. I I mean, I think I think investors should be thinking of it as as what is the right kind of effectively bribe at each stage. Yes.
Speaker 3:Right? So
Speaker 1:What's the budget? What's the what's the math that you should be doing? How much should you put towards the bribe? Towards the tip?
Speaker 3:Take Yeah. It's a tip.
Speaker 1:There's no tax on tip.
Speaker 3:It's a tip. Yeah. I don't know. You know, it depends on the round. Yeah.
Speaker 3:But if it's really competitive, maybe thinking about 10 putting 10% of the check size
Speaker 1:Yeah.
Speaker 3:And then paying out of your own management fees for some type of experience. Right?
Speaker 1:Yeah. I mean, if you're just paying 10% over, if if there's a $300,000,000 round and it's between you and another firm and you just take just 10% over, that's not gonna hurt your returns. Like, if you win the round, it's gonna be, you know, 10 x. And so 10 x on 300 as opposed to $3.30
Speaker 3:Just making make insane
Speaker 1:assumptions. Just take it 30 mil.
Speaker 3:All math out.
Speaker 1:Buy a McLaren f one and be like, I see you as the next Elon. I see you as the next Sam Altman. They drove McLaren f ones.
Speaker 3:You should drive one.
Speaker 1:You should have this car. It's yours.
Speaker 3:Take it. Or keep a fleet of supercars
Speaker 1:Yeah.
Speaker 3:At Sandhill and say, can have this from between the a and the b. Right? Yeah. So it's and you could have an adverse effect of founders being like, I like this p one. I don't really want
Speaker 2:to raise my p.
Speaker 3:I'm enjoying daily it. But in general, I think it should work out. So I think it should be like writing a two fifty ks flyer. Why not get a founder a long weekend at an Amman property of their choice? Something straightforward,
Speaker 1:I think. Do do just a weekend? I feel like
Speaker 3:A long weekend.
Speaker 1:It's a couple weeks. A
Speaker 3:couple weeks.
Speaker 1:Like, at least you
Speaker 3:could I know. But you're getting well beyond that 10% mark.
Speaker 1:Two days in Amman is two weeks out of Four Seasons.
Speaker 3:Yeah. So I I think you you kind of going going up the ladder.
Speaker 1:Yeah. What's next? If I'm trying to win a $20,000,000 Series A, what should I budget for the tip, for the bribe?
Speaker 3:For the tip. Tip tip sounds better than bribe.
Speaker 1:Okay. Yeah. Tip. We're sticking with tips.
Speaker 3:Yeah. It is you know, we are coming up into VC tipping season. So Yeah. Founders gotta be thinking about what kind of tip makes sense For for each person on your cap table. We've we've talked about this before.
Speaker 3:But but yeah. How can you take it up? How can you take it up a notch? You know, racing Ferraris, private private
Speaker 1:You got it.
Speaker 3:But but I I I I think these like one time offerings are super weak.
Speaker 1:Yeah.
Speaker 3:You know, it's like race Ferraris for a day.
Speaker 1:Yeah.
Speaker 3:That's not that interesting. No. Founders doing $9.09 6 are like, I don't wanna go to your racetrack.
Speaker 1:Yeah. So I think Buy the racetrack. I think the thermal club was up for sale.
Speaker 3:Or a lot of or or or saying, you can use my jet one time. No. One time.
Speaker 1:One time.
Speaker 3:One time. It should be Here's
Speaker 1:the full jet. Jets It's
Speaker 3:yours. Should live with you until the IPO.
Speaker 1:Toss them the keys.
Speaker 3:Until the IPO.
Speaker 1:Yeah. Then you get your own jet?
Speaker 3:Yeah. Yeah. Until you're in the position to be able to get your own
Speaker 1:Tyler, what would get you to sign a term sheet? What would stick out to you if a VC came to you and said, I got to do this deal.
Speaker 3:Look at this. I think look at this picture.
Speaker 1:I like that you're you're David Senora fan. You have a framed photo of him.
Speaker 2:I think something compatible, like, if the founder is doing nine nine six Yeah. Right, there's this thing, you know, the the current vibe is stakes. Right? So maybe you buy, a cattle farm with very high quality cows, like, you know, Zuck's Island.
Speaker 1:Zuck's out on his island. Yeah. For sure. Gold Rock said, I I had a VC try to take me hot air ballooning. That's a wild one.
Speaker 3:Don't Are you would you go in a hot air balloon?
Speaker 1:I would absolutely go in a hot air balloon.
Speaker 3:Okay.
Speaker 1:It's extremely aristocratic. Yeah. It's fantastic.
Speaker 3:I saw a video of a hot air balloon crashing from somebody that that took the video inside the hot air balloon.
Speaker 1:Was Okay. You?
Speaker 3:It wasn't super appealing. Oh, got Tyler on the big screen now and we got Senra here on the big screen.
Speaker 1:That's good.
Speaker 3:There we go.
Speaker 1:I feel like that's a skill issue.
Speaker 3:Skill issue? Just
Speaker 1:Just hit ChatGPT. How do I fly a hot air balloon? Get up to speed. Summarize that for me. Don't make mistakes.
Speaker 1:And then we got a little inception going here.
Speaker 3:I like that. That's a good start.
Speaker 1:Anyway, ProFound. Get your brand mentioned in ChatGPT. Reach millions of consumers who are using AI to discover new products and brands. Maybe that's what the VC firm should do. Get on ProFound.
Speaker 1:When people when founders type in, who should I raise money from? I'm building this. Show up and check
Speaker 3:the I think founders should just ask. I don't want you to just join the board. I want you to actually become a BDR at my company for the next two years.
Speaker 1:Yeah. I mean, you're joking. But that's sort of I've seen that happen with Elon companies, where to win allocation, you're going not BDR, but recruiting.
Speaker 3:Yeah.
Speaker 1:So come in and import your entire network. Everyone you know who's an engineer who could work at this company, come and work basically full time for like a month to really do everything you possibly can. Because there's always you write the check, and then you're like they hit you with like, oh, do you know any software? It's very different from being like, I'm doing three full time weeks of just actually racking my network, actually making calls, catching up with everyone Not who'd just making
Speaker 3:two most convenient networks.
Speaker 1:No, no, no. Going really deep into the actual into the Rolodex. Does the Hindenburg count as a hot air balloon? I don't think so. It was a dirigible.
Speaker 1:It was a it was a blimp. But anyway, numeral. Sales tax on autopilot. Spend less than five minutes per month on sales tax compliance.
Speaker 3:Let numeral worry about salestax.com.
Speaker 1:Google just killed Dingboard. You saw this. Do are you familiar with Dingboard? Yaksine's project?
Speaker 3:They just killed it? What do you mean?
Speaker 1:Have you seen this? You you Of course. I know Dingboard. Did you were you a subscriber?
Speaker 2:I was very early on. He gave me I was, like, really on. I I I DM'd him for some reason, and he gave me a code.
Speaker 1:I love the product. I thought the product was amazing. I it it wasn't it didn't really work that well on mobile.
Speaker 3:Yeah.
Speaker 1:But it was it was super cool. You could, like, go in with AI, remove backgrounds, merge images, blend things together. It was a fantastic product. He goes to work with that
Speaker 3:kill it.
Speaker 1:Well, because Google Labs just launched MixBoard, an experimental AI powered concepting board designed to help you explore, visualize, and refine your ideas powered by our latest image generation model, of course, Nano Banana. And with Nano Banana and, you know, basically, it's not that they killed Dingboard. It's just that they launched a product that is clearly inspired or or lives in the same kind of work stream as Dingboard where you can remix images, bring things in. Very, very cool product. I would love to see this on an app for sure.
Speaker 1:I've always may when I'm making images and memes on my phone, I'm always going back and forth between, Photoshop Express and ImageFlip and a few different sites. There's not a lot of stuff. I I is a great product, and I hope someone can take it across the finish line. Obviously, Yaxin had to go work at X, and now he's working on robots and stuff. But
Speaker 3:What do you think of Stillers? Stillers? Soda. Ben Stillers soda company.
Speaker 1:I have no idea. Does he have that type of audience that's, like, ready to rip soda?
Speaker 3:From Walmart?
Speaker 1:Yeah. It's it's interesting. Like, I I guess, like, we were talking to John Shahidi about this. Like, Ben Stiller is the type of person that could probably call the CEO of Walmart and get a meeting. Right?
Speaker 1:Like, he's so famous. If if if if you're a if you're a CEO of a big retail chain and you hear Ben Stiller's on the line, you're gonna take that call. Right? So maybe it advances your, you know, distribution quickly. Stiller's is also just a great name.
Speaker 3:Like, I I do. That's
Speaker 1:that's a name is great. And and when I saw it, I was like, oh, that's cool Stilers. I'll take a Stilers. That's a great name. Is that related to Ben Stilers?
Speaker 1:Then I found out it was. So I could see it working. I would love to do a taste test. We'll have to actually see, is the product good? Because if he has great product sense, kinda doesn't the distribution and the celebrity will take care itself.
Speaker 3:Copy is a little millennial coded. Sure. It says made by 100% real human celebrity people.
Speaker 1:Okay. Yeah. That's a little
Speaker 3:And they and the and the the copy on it says no fake stuff. And crowded category
Speaker 1:Yeah.
Speaker 3:Just they're competing with Olipop and what's the other one.
Speaker 1:There's been a huge lineage of trying to find a make a product that's free of. Free of sugar, free of fat,
Speaker 3:free would of carb. Say I have been incredibly bullish on this company if it launched in 2019. Yep. But launching into a category that Pepsi is already gonna buy their want. I'm sure Coke will eventually
Speaker 1:I mean, I believe Pepsi already has Poppy,
Speaker 3:which was a direct competitor to Peppy.
Speaker 1:Wait. There's Poppy, but then there's
Speaker 3:Pepsi bought Poppy. You could imagine Coke buying Olipop. Yeah. And then that's then it's kind of over.
Speaker 1:But then there's a there's another there's another company that's a seltzer that's it's Bubly. Bubly. Do you know Bubly? Bubly sparkling water? Who owns Bubly?
Speaker 3:Yeah. Well, we should get Ben on the show to talk about Stillers. And we should get Tyler
Speaker 1:just order some Stillers by
Speaker 3:We're gonna we're gonna Yeah.
Speaker 1:Bubly was incubated incubated by PepsiCo to compete with, like, the spindrifts of the world. And remember the big boom in in seltzers? There there were a whole bunch of Topo Chico and a bunch of other products that were really popular in in offices in, 2017, corporate offices. People would be drinking LaCroix all day long. Bubly was like their answer to that.
Speaker 1:I don't know how it actually panned out, but that's kind of interesting. But in much more interesting news, OpenAI, SAP, and Microsoft are launching OpenAI for Germany, a partnership to bring frontier AI
Speaker 3:to humans.
Speaker 1:You've all Germany's public sector through a sovereign certified cloud environment. We haven't rung the gong enough on this show. Let's ring it for OpenAI for Germany.
Speaker 3:There we go. And we gotta hit it for Claude getting into the Microsoft ecosystem. That also happened. We love it. Well, without further ado, I think we have our next guest, Riley Walls in the Restream waiting room.
Speaker 3:Let's bring him in. He has been being a rascal the last forty eight hours. Riley, welcome to the show.
Speaker 1:How you doing?
Speaker 5:Thank you for having me.
Speaker 3:The most viral man on X, the the the current thing.
Speaker 1:Yeah. Take us through the current thing, the current project. What'd you build? What inspired it? What's the reception been?
Speaker 1:Is there are those GPUs on fire? Are the servers on fire? Is it staying up? Walk me through it all.
Speaker 5:Yeah. I was gonna project kind of going on. Yesterday's project was I I figured out you could scrape the parking ticket system in San Francisco to reveal more or less the real time locations of of parking officers as they wrote tickets.
Speaker 1:Okay.
Speaker 5:So I made a website called Find My Parking Cops. Looks very similar to Apple's Find My Friends.
Speaker 1:Yeah.
Speaker 5:And, yeah, you could see where where the cops are the as they as they traveler around SF.
Speaker 1:Take me a level deeper
Speaker 3:on technical What inspired this?
Speaker 1:Oh, yeah. Did lot of you get tickets? Is that what inspired this?
Speaker 5:Actually don't even have a car. My roommates, all my friends have cars and yeah. Yeah. I mean, you hear a lot about tickets. It's pretty notorious in the city.
Speaker 1:So Yeah. Yeah. Take me through, one layer deeper of the technical side. Did, is this just a function of, the SF parking ticket office integrating with some sort of, you know, IT or ERP system that basically as soon as the ticket's written, it gets loaded into a database. And then is that is there a public API?
Speaker 1:Is this stuff that you can just look up on the on, like, an actual website, or are you finding, like, an entirely private API?
Speaker 5:Yeah. It's all it's all public. The magic is right when they write the ticket, it goes up online and, you know, you have to enter the ID number to be able to see the ticket. Like, there's a website you can you can pay your ticket.
Speaker 1:Yeah.
Speaker 5:And when you pay, you can see a copy of the ticket. So I I figured out that the ID numbers for all the tickets were predictable, meaning that, like, there's a there's a pattern to it. So I could, I I knew kind of the pattern, and I could see, okay. Like, this ticket just simplified a lot. Like, if, like, ticket number, like, 83 was just written, I know 84 is gonna be next.
Speaker 5:So I just keep checking for the next one. There's a little a little more technical than that, but, like, you know, it's it's pretty magical when predictable IDs are a thing. Like, there's so many cool ideas you can you can scrape knowing that. So
Speaker 1:Talk to me about your actual workflow. Is there are you using vibe coding tools? Is this
Speaker 3:Well, before that, what was the what's the current state of things? Yeah. SF, obviously
Speaker 1:Oh, yeah.
Speaker 3:You you could potentially really you know, if enough people in SF started using this, there would be could
Speaker 1:I would hope that the mayor would write you a letter of of recommendation for this. Like, you should win a medal
Speaker 3:for this. Yeah. Yeah. You should
Speaker 1:This is this is the highest calling. Yeah. You should get the key to the city for this. But what's the actual response from SF been, if anything?
Speaker 5:Yeah. So I I I do websites like these that are provocative a lot, and I think a lot about framing it and, like, how I wanna present it to people. So I thought this would be maybe a little, like, you know, mildly viral among people in SF, but it actually went pretty viral, like, around the world yesterday. Within four hours, the the SF government mobilized, and they changed their site to prevent me from getting the data. Like, only four hours, took for them to prevent me from, make the site useless.
Speaker 5:So, yeah, the the site is not up anymore because they changed the way
Speaker 3:that those data Those four sweet hours though were was free
Speaker 1:of free of parking tickets.
Speaker 3:It actually is if if if if it had gone less viral and not and people hadn't, you know, if they hadn't noticed so quickly, I can imagine this being highly somebody's pulling up. They wanna grab a coffee. You know, they're like, they just check the map. They can run-in and out. It's not a not a not a, I I can see it actually being pretty valuable.
Speaker 1:Yeah. Walk me through some of, like, the how you like to build these projects, how you like to host them, what what problems you typically run through. We'd love to know just a little bit about your stack these days.
Speaker 5:Yeah. I mean, you say I a lot. It makes things so much faster. I have, like, a gazillion ideas. These are all sticky notes for different, like, data ideas I wanna make.
Speaker 5:So I just kinda we can all try to knock one off Yeah. In my free time. I you guys talked about you saw the other one I made, Panama playlist.
Speaker 1:Oh, yeah. Oh, you did that.
Speaker 3:You did that. Okay.
Speaker 1:We're we're on that. You scraped my data. I'm glad glad you're was wondering, like, how did I make the cut on this? Like, these are some big people on on there. Yeah.
Speaker 1:What was the secret to that? Because it only Yeah. Was there
Speaker 3:any was there any strange fallout? I mean, it's hilarious to read into people's music taste. I don't you you wouldn't have noticed this but my that the playlist that I had public that you featured was like seven songs I found that had like obscure references to venture capital. So when I saw it I was I don't listen to any of it. When did I make this playlist?
Speaker 3:I don't listen to any these. In, like, 2021, I just started collecting Yeah. Or whatever.
Speaker 5:Yeah. I don't It was just kinda trying trying to highlight, like, how much data is out there on Spotify and, like, people just forget about it. And, yeah, sorry you guys were part of it.
Speaker 3:But No. It's fine. I thought it was I thought it was hilarious.
Speaker 5:Anyway, I think it was it was pretty amusing. I think a lot of people had a kick looking at it.
Speaker 1:So Yeah. What was the what was the reaction from either the people that were in it or Spotify directly? Has there been a change to the API? We saw this even during the last election, like the Venmo public records. People forget about this stuff all the time.
Speaker 1:There's kind of a question about how tech platforms deal with default privacy because there was an era when everything was public and then people started closing things down, becoming a little bit more private. But it's a it's a it's an interesting, like, user design problem for the big companies to shift.
Speaker 5:Yeah. Yeah. In case your audience didn't see that, I I scraped, like, the public playlist and listening data of of notable figures on Spotify. And, like, they're like, you guys were on it. Like, Sam Walton was on it.
Speaker 5:A bunch of politicians like Mike Johnson and JD Vance and, like, so many people just have stuff open on there. They haven't changed stuff yet. I feel like Spotify probably will change, like, the default behavior of playlist because right now they're public by default, which is kinda crazy. Yeah. But yeah.
Speaker 5:I mean, was it was a lot of people took their playlist down.
Speaker 1:Sure.
Speaker 5:Kind of was a yeah. Interesting to see, like, kind of a lot a of people embraced, like, Palmer Lucky. He was like, yeah. These are my songs, and I love them.
Speaker 1:Yeah. It's great. Yeah. It's great if you could Wait. So did you have to guess some sort of code, or was did you just literally just search my profile and then it was there?
Speaker 5:Yeah. Before you guys, a lot of it was just like real names. Just searched your name and then Yeah. Like, found a profile with your picture and like, probably a Sim because then I can see like, you guys follow each other or something probably Yeah.
Speaker 1:Yeah. Okay. Probably done.
Speaker 3:What's us through some of the some of the other Yeah. Stuff you've done recently. And then I wanna talk about
Speaker 1:Yeah. Specifically, what's the most underrated project or most underappreciated project you've worked on where you love it, it's one of your dearest children, but you feel like it hasn't gotten enough love?
Speaker 5:One, like, interesting one was a few months ago, I I I this was also very how much out there, but, you know, you guys know LOOKS maxing. I I mean, it's like a LOOKS mapping where I I scraped the Google Maps reviews of restaurants in New York, SF, and LA, and then I ran the profile pictures of the reviewers through a very jank attractiveness model. So then I then I mean, aggregate map of, like, all these restaurants. Like, okay. This restaurant is usually composed of, like, sixes or whatever out of Very off on the idea and premise, but it was kinda funny.
Speaker 3:That that I'm sure that you can wouldn't make anybody mad.
Speaker 5:Yeah. You can you can you can glean a lot of just information because I also I also had an age map. You could, you know, get their age from the pro picture roughly and and gender too so you can see which restaurants had, like, the most men or women in in in a city. I I don't
Speaker 3:know. Was just a of stuff. Kind of pattern like, how much did it track with just the general hype around restaurants? Like, what what did you notice?
Speaker 5:Yeah. I mean, like, the oldest restaurant in SF is not a country club. Like, the most, like, male restaurant is a gay bar. The most female one is like a brunch spot. Like, it all kinda fits
Speaker 1:when you look at it. Predictable. That feels like a product that maybe it needs a little polish, but could just be something that would actually add value to the Google Maps experience. Yeah. Has have big tech companies reached out to you and said, hey.
Speaker 1:Come work for us?
Speaker 5:Not for that. There's been a couple, like, smaller maps reps that are like, oh, we should maybe add this. I I think they should. Yeah. I think this should be cool to I feel like it's too closely risky for Google, but, like, definitely a smaller setup could do it, and it'd be useful.
Speaker 1:Yeah. I feel like even if you dialed back some of the framing on what you're building, like, there's there's there's product insight there, and there's, like, novel features that would surprise and delight. And I feel like that's kind of what what what a lot of these projects, like, put on display.
Speaker 3:What were you doing what were you doing before all these experiments?
Speaker 1:Yeah. Does this pay the bills? Do do you have a full time job? Like
Speaker 5:I did not. Yeah. I I I have a full time job doing, data stuff that's more
Speaker 1:Oh, cool.
Speaker 5:Commercially reliable. I also I mean, like, I you guys talked to Gabe Whaley of Mischief. Yeah. Yeah. I was an intern there
Speaker 3:Oh, in 2020. Science. Okay. Maschief.
Speaker 5:Which was, like, very I mean, you guys can kinda see, all this is very inspirational. I mean, we're inspired by Mischief.
Speaker 1:Yeah. Yeah. The chat is literally saying, he's like Mischief for tech projects, l o l. Like, people Yeah. Have clocked it for sure.
Speaker 5:Yeah. At first hand, I got to see up close how they they operate. They're like incredible people. Yeah. Oh, totally.
Speaker 3:So you're at Mischief and you said I need to pursue data science.
Speaker 5:Yeah. That was my calling. I I think data's like really cool. And it's cool that you can combine it with like Mischief elements to make like weird things like this parking lot.
Speaker 3:What are let's let's I don't I don't it feels like you could talk through some ideas you have without giving away too much alpha just because a lot of I don't know if I I doubt people would would steal your ideas since a lot of them are like don't make or you're not doing this to make money but you wanna talk through any work workshop any with us?
Speaker 5:Yeah. Let me see. Oh, yeah.
Speaker 1:What you got on the board?
Speaker 5:I was like, one one, like, terrible idea that I'll probably never build because it's awful. It's, there's a, OpenAI has, like, a, API endpoint for, like, how, like, a moderation point for how bad a piece of text is. It will, like, return back, like, a string of, like, you know, is this harassment or is this, like, racism or whatever. I don't know. Yeah.
Speaker 5:The horrible idea is, like, somebody should make a leaderboard where you can, like, after typing a string of text and you wanna, like, actually hit every single one of these categories. It's like
Speaker 3:Say the most offensive As
Speaker 5:you capable. As possible.
Speaker 1:You have to create the most offensive string of text in history.
Speaker 5:And as few characters as possible
Speaker 4:Yeah.
Speaker 5:Defend as many people as possible. Yeah. Horrible. But
Speaker 1:Horrible. But I
Speaker 3:Certainly, I I think
Speaker 1:You might not need to disclose what it was actually said. You could have it be anonymous. But Exactly. You know, you'd it would certainly spark creativity. I mean, Rune was talking about this how there are certain strings of text that just go viral every time they're posted, no matter when they're posted, no matter who posts them.
Speaker 1:These little insights, we did this project banger archive where we took the best post by certain people, just screenshotted them and just said banger. And they would get another 10,000 likes every Yeah.
Speaker 3:We had posts that would get 50, you know, an order of magnitude more likes than the original post.
Speaker 1:And it was like a a Naval post about, like, you should work like a lion. Like, you know, take rest and then work really hard. And it's just, like, these universal truths that, like, just continue to deliver value.
Speaker 3:What else what else
Speaker 1:you got?
Speaker 3:What else you got?
Speaker 1:What else is on the board? Give us some other stuff.
Speaker 3:Because I feel like 4chan would, like, one shot your leader. They'd figure out there's, like, there's four words. You put these together, and then Yeah. Make every person on Earth mad.
Speaker 5:Yeah. No. It'd it'd be terrible. One idea this is something I asked you with parking tickets here. I I also found out that, like, vandalism citations have have, like, a similar setup in the city.
Speaker 5:So I I I was able to scrape, like, half a million pictures of of graffiti that cops took.
Speaker 1:Oh, interesting.
Speaker 5:So I
Speaker 1:think it'd be
Speaker 5:cool to make an episode that shows graffiti art through the lens of a of a cop in San Francisco.
Speaker 1:Yeah. They'd be cool. They took
Speaker 5:by them they took on their on their phone themselves.
Speaker 1:Yeah. It feels like a lot of your projects touch on touch on, like, public works projects, public, like like, cities, like, data in cities. And I'm wondering if you have a view on, like, should cities be more open to the hacker culture, actually embrace some of this stuff? Like, some of the stuff that you're building is, like, very close to just, like, a tool that would make life in a particular city easier, and yet cities are notorious for long lines of the DMV and and not being the most tech forward organizations or entities. Yeah.
Speaker 1:How do you think about actually, like, how cities deliver tech services?
Speaker 5:Yeah. I think there's a lot there. Like Yeah. I think the the ASF government actually has a pretty good handle on this. They have lots of datasets that they publish Mhmm.
Speaker 5:Pretty frequently, and there's a lot to work with there. Like, they they publish, like, 911 calls with, like, a ten minute delay. You can see kind of, like, anonymized dataset of what people are calling 911 for, which is kinda cool. Like, there's a lot of lots of things like that nobody really knows about, but there's things there.
Speaker 3:Would you like in a perfect world in a in a perfect world, would one of these you do it for fun and then and then you discover some, like, enduring business, or do you like just doing one idea after the next?
Speaker 5:Yeah. I mean, all these ideas are just things I find interesting to myself, and, you know, usually, that means somebody else will find interesting too if I post online. I think it's just like an outlet to be creative, and it's nice to have distinct, like, work work and, like, this is more fun work. But yeah. No.
Speaker 5:Definitely, it'd be it'd be cool if something like that happen.
Speaker 3:Any any ideas? Are you are you capital constrained on anything? Like, if you had $25, you would you would do because I feel like at this point, there's enough people, our ourselves included, we would we would Yeah. As long as it was not offensive, we would happily chip in to to make possible.
Speaker 5:There is yes. There I I I need 33 k for a project next May, for a very fun stunt in San Francisco.
Speaker 1:Okay.
Speaker 5:If anyone likes to We should talk malls.
Speaker 3:Yeah. Yeah. Let's We'll talk offline. We don't wanna we don't wanna spoil it.
Speaker 1:Last story I wanna talk about. I I didn't real I didn't put it together until just now that you're the person behind New York's hottest steakhouse that was fake. Tell me that story because Yes. I remember it happening, and I didn't put it together until just now.
Speaker 5:You talked to the the my co conspirator Moran, the the archaeology guy, if
Speaker 1:you Yeah. Oh, there's no way.
Speaker 5:Wow. Yeah. No. That was an incredible like, one the best nights of my life. We had so many things go wrong, but, like, somehow it just happened to go right.
Speaker 5:We we, long story short, we lived in a house together in New York. Mehran made steaks, and then we made a Google Maps listing called Mehran steakhouse. And then all our friends started writing these bizarre five star reviews. Like, you know, I converted out of, like, Hinduism so that way I could try some of his beef or, like he came in, like, drenched in blood from Upstate fresh with a fresh cow. Like like, really bizarre reviews.
Speaker 5:People in New York thought it was real because the dining culture there is crazy.
Speaker 1:Yeah. And we had this huge wait list
Speaker 5:over a couple years that we built up. We So actually opened it for one night. We opened a real restaurant, fully permitted. I was, like, licensed by the government to actually open a restaurant.
Speaker 1:Wow.
Speaker 5:We had a 120 guests come thinking it was real. It was, like, humongous operation, legit six lines, but it somehow ended up well. We did not get How
Speaker 3:the guests how did the guests take it? Yeah.
Speaker 1:What were the what
Speaker 3:were the reviews that joke.
Speaker 5:Most of them were pretty good. Like, I don't think people really realized it was fake. We we wanted people to find out it was fake in the Times when they read
Speaker 1:it about the article. New York Times.
Speaker 5:And a lot of people did it.
Speaker 3:They thought
Speaker 5:it was kind of a weird restaurant, but they thought it was like, okay. This is just how things are.
Speaker 1:It's like cool and avant garde. Right? It's like edgy, new, and different, and pop up.
Speaker 3:What is it? Did you guys break did you guys break even on it? Like, did you did you end up did you sell enough stake to to
Speaker 5:No. No. We we we spent, like, 16 k and then made, like, 13 k. So we lost, like, 3 k. So for the amount of attention we got, like, it was it was viral everywhere.
Speaker 3:But that New York Times piece is forever.
Speaker 1:It is. Yes. Yeah. Yes.
Speaker 3:And the great lady. Amazing. Alright. Well, we will we'll message you. We'll we'll figure out how to how to make this Yeah.
Speaker 1:We'll talk we'd love to talk about SF stunt. That'd be fantastic.
Speaker 3:Happen, and up the great work.
Speaker 1:Fantastic. We'll talk to you soon, Riley. Thanks
Speaker 3:for joining. Cheers.
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Speaker 3:OpenAI says, more compute in the making, announcing five new Stargate sites with Oracle and SoftBank, putting us ahead of schedule on the 10 gigawatt commitment we announced in January.
Speaker 1:Let's go.
Speaker 3:Ahead of schedule.
Speaker 1:Massive. Stripe's also buying back shares from its VC backers at $106,700,000,000 valuation. Sequoia bought $861,000,000 worth of shares in 2024 at a $70,000,000,000 valuation, so they're getting a markup. And amend and pretends is live shot of a swath right now. He's talking about a swath demodrine who is obsessed with valuation, specifically liquidity premiums, illiquidity premiums.
Speaker 1:And it's just interesting that Stripe continues to find ways to stay private basically forever. And they've been on a tear, the Collison brothers. Well, this we saw this we talked to Joe Lonsdale about being in the same fraternity at Stanford And with Gary you can zoom in on this photo and see a young Joe Lonsdale and a young Gary Tan hanging out at Stanford back in 02/2003. Pretty remarkable piece of tech lore. I wanna know what are what is everyone else up to?
Speaker 1:We gotta go through this list because there's probably some interesting folks in here. I wanna know what Michael Calhoun's up to or Justin Reynolds or Adam Rodriguez. Gotta figure it out.
Speaker 3:Bunch of lads.
Speaker 1:Gotta get on public.com, investing for those that take it seriously. They got multi asset investing, industry leading yields. They're trusted by millions.
Speaker 3:And we got anything else
Speaker 1:Tyler Cowen is talking about the potential for stagflation, economic stagnation. No one wants that. No one wants that. Tyler says it seems increasingly likely that the American economy is sleepwalking towards stagflation. In case you're wondering, that is not a good thing.
Speaker 1:Stagflation means an economy experiences excess inflation and excess unemployment at the same time. This was one thought to be impossible, but the OPEC oil price shocks of the nineteen seventies triggered both high inflation and high unemployment. And voila, we were suddenly we suddenly had a new unhappy economic phenomenon. If I had to guess, I think there's a decent chance that eighteen months from now, America could well have an inflation rate of 4%, up from last year's 2.5%.
Speaker 3:Well, John, we got some breaking news in the chat.
Speaker 1:What do we have?
Speaker 3:China agrees to terms of a US TikTok deal.
Speaker 1:Wow. Thank you, Bobby Cosbank, for breaking the news. Thank you. Hello. Hello.
Speaker 1:Thank you, everyone in the chat, for keeping us up to speed.
Speaker 3:Is this not a little worrisome that they're agreeing with? You know? This pretty historically had a pretty hard line.
Speaker 1:Well, pull up any more information while I talk about adquick.com out of home advertising made easy and measurable. Say goodbye to headaches of out of home advertising. Only add quick and biased technology out of home expertise and data to enable efficient seamless ad buying across the globe. I wanna tell you how Steven Spielberg works. He says Steven Spielberg says before he goes off to direct a movie, he always looks at four films.
Speaker 1:Can you guess what films he watches Thank before he goes out and directs a film?
Speaker 3:Seven Samurai, Lawrence of Arabia. Borat. Borat.
Speaker 1:Dark Knight.
Speaker 3:Dark Knight.
Speaker 1:What was the Mountain Head and Office Space. Those are the movies you've seen?
Speaker 3:No. No. Does. No. Seven Samurai, Lawrence of Arabia, It's a Wonderful Life, and The Searchers.
Speaker 1:Have you seen any of those?
Speaker 3:Lawrence of Arabia.
Speaker 1:Lawrence of Arabia is a fantastic movie. Tyler, have you seen any of those?
Speaker 2:I've seen all of them but The Searcher.
Speaker 1:Same with No.
Speaker 2:I have seen it.
Speaker 1:You've seen The Searchers? I have seen it. Yeah. You need to give us a review on that. I need to check that out this weekend.
Speaker 1:Seen Seven
Speaker 3:Seven right. Since you've seen it, name every scene. Desert. They're just in the desert.
Speaker 1:Is there a tech equivalent of this? Before you start a new company, study the greats. Listen to these four Founders Podcast episodes. Who are you listening to? Pick four.
Speaker 1:Top four. Edwin I'm going Edwin Land, Steve Jobs, Gaston Glock, and That's probably Rockefeller. You gotta you gotta throw Gaston Glock in there for
Speaker 3:sure. Underrated.
Speaker 1:And the chicken finger dream. You gotta get up to speed on the chicken finger dream before you start your next company. I think every founder should have should have four founders podcast episodes in the chamber before they go out to raise, before pump up speeches.
Speaker 3:Or if they need to run through a brick wall.
Speaker 1:Yeah. If you need to run through a brick wall, then you need to have your top four Founders podcast ready to go. So when you hit the road, when you check into the Rosewood for your Sandhill tour of pitches, you're ready to go. And you're also wearing a fantastic timepiece on your wrist that you picked up from getbezel.com because your Bezel Concierge is available now to source you any watch on the planet. Seriously, any watch.
Speaker 1:In other news, Palmer Luckey says that Mod Retro has teamed up with Ubisoft to rerelease some of their greatest classics starting with Rayman. It has some of the best graphics of any Game Boy Color title. Late cycle developers truly mastered the hardware. It shipped months after the Game Boy Advance was announced. So congrats to Palmer Luckey on a new deal for Mod Retro.
Speaker 1:Company's been on a tear. Very excited.
Speaker 3:Palmer Lucky. M six Also hit the timeline yesterday quoting a Meta post. Yes. See how US national security agencies are using Meta's Lama models to develop bespoke tools for America's military and intelligence professionals. It is crazy how much the vibe has shifted that Meta would have imagine if Meta posted something like that in
Speaker 1:2016 when Palmer was there for a couple months. Yeah. It would And have been
Speaker 3:Palmer says, added to the quote from the announcement, we're also supporting US national security through our work developing augmented and virtual reality technologies. Through our partnership with Androl, we are developing a range of wearable products to help maintain America's technological edge.
Speaker 1:You know what I've missed recently? Singing. There hasn't been enough singing on this show, so we gotta bring it back.
Speaker 3:Find your happy place. Find your happy place.
Speaker 1:Book a wander with inspiring views, hotel great amenities, dreamy beds, top tier cleaning, and twenty four seven concierge service. It's a vacation home, but better. We gotta get Tyler to chime in when we're singing. We can close on this on this post. Vinny Daniel says, I'm seeing parallels between NVIDIA and the Medici Bank failure of the fourteen nineties.
Speaker 3:Who isn't?
Speaker 1:People are having fun drawing comparisons. Lots of the .com boom. Not so much to the fourteen nineties, but fire up open crack open history book.
Speaker 3:Should we do a should we do a deep dive on the fourteen nineties?
Speaker 1:For sure. We should definitely read about the Medici bank failure. Tyler, are you in? Get out the red string.
Speaker 2:I was going say, I see a parallel between NVIDIA and the rise of the Roman Empire Okay. Early Okay. Taking over everything.
Speaker 1:Okay. Is Gensen? Is he Caesar?
Speaker 5:Or the
Speaker 3:rise of Genghis Khan, the Mongols.
Speaker 1:Maybe. Maybe.
Speaker 3:Maybe. Anyways, that's a fun show, folks.
Speaker 1:Thanks for tuning in.
Speaker 3:Hope you Have
Speaker 1:a great Wednesday.
Speaker 3:A fantastic rest of your day. We'll be back tomorrow, and I cannot wait.
Speaker 1:We will talk to you soon. Cheers. Bye bye.