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TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays from 11–2 PT on X and YouTube, with full episodes posted to Spotify immediately after airing.
Described by The New York Times as “Silicon Valley’s newest obsession,” TBPN has interviewed Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. Diet TBPN delivers the best moments from each episode in under 30 minutes.
You're watching TBPN. Today is Thursday, March 26. We are live from the TBPN Ultra. I'm the tablet technology, the Fortune finance, the capital of capital. Let me tell you about ramp.com.
Speaker 1:Time is money. Save both. Easy use corporate cards, bill pay, accounting, and a whole lot more. Let me also pull up the linear lineup because we have a monster show. Jordy's back in the TBPN UltraDome.
Speaker 1:I know you missed him. We have Eric Goldman coming on to help break down the meta YouTube lawsuit.
Speaker 2:We're gonna
Speaker 3:By the way, yesterday was the first time we've been live that I was not on the air. Yeah. And so I was watching How'd
Speaker 1:I do? Here. We can drop the linear line up. Linear, of course, is the system for modern software development. 70% of enterprise workspaces on linear are using agents.
Speaker 1:Give me a review. How'd I do?
Speaker 3:I thought you did fantastic.
Speaker 1:Thank
Speaker 3:you. I was texting you in real time. I probably sent you, like, 20 something messages of, like, ask ask about this, ask about It
Speaker 1:was yeah. Somebody had a chat. I was free soloing TBPN, and it was great. Yeah. But we really bore down to our last few few associates here.
Speaker 1:Tyler was out. Jordy was out. Who else Nick was out. We we had we were on a what what do they call it? A shoestring or something like that?
Speaker 1:I don't know. But it worked out. It was a fun show. It's not the same show without the soundboard. I was gonna do this whole bit about like, oh, yeah.
Speaker 1:I got it dialed. You can just we don't need you on the show anymore. And then, of course, the fans would be like, no. Bring back Jordy. And I'd be like, yeah.
Speaker 1:Okay. He's back. But I can't even joke about it because we need the sound board. I only got It really is music.
Speaker 3:It really is. Imagine if you were I was waiting for you to just be spamming that.
Speaker 1:Just sitting there having a serious interview.
Speaker 3:Apparently, have some audio issues.
Speaker 1:Okay. We will
Speaker 3:bear work with us. We're working on it. This is the But I can go through I can go through a bit of our guest lineup today. We have Nima
Speaker 1:Some highlights.
Speaker 3:Friend of mine. He is a founder Salt and Stone. Yeah. Good person. Recently exited the business as A of this massive, you know, multi $100,000,000 deal.
Speaker 3:Very excited to get to understand the business better. We have John McNeill coming on. He's an author to talk about Elon Musk's five step algorithm for scaling Tesla. Then we have Karri from Linear Mhmm. On how Linear is evolving in the AI age.
Speaker 3:And then we have a bunch of different founders, including Mikey from Suno coming on.
Speaker 1:Then we got back to back Zachs. Zach Kanter. Zach Perret. Got back to back Zachs. That's what I like to see.
Speaker 1:Well, the big news of the day of the week, this has been going on all week, is that Arm, the intellectual property developer that creates intellectual property designs for CPUs, is now getting into the chip game, and they got a big ARM pump The chip. The stock market. So the company is up 15% over the last few days on the news that they will sell their own chips. This is new for ARM. ARM's a very old company.
Speaker 1:Fascinating history. I actually made a twenty five minute YouTube video all about the history of the company back in 2023, but we'll recap a little bit of it today. But they normally just license out their intellectual property, and that is a phenomenal business, 97% gross margins. 97 gross margins. Yeah.
Speaker 1:Let's give it up.
Speaker 3:There we go.
Speaker 1:Let's give it up. That's amazing. And it's a big business, dollars 4,000,000,000 in revenue last year, nearly $800,000,000 of net income. They're this new move, they're expecting to ramp revenue, to $15,000,000,000 by 2031. So they're expanding the market significantly.
Speaker 1:Now margins will be different, but the market cap for ARM is now around a $106,000,000,000. So it's a big company. It trades at a very humble
Speaker 4:high multiple.
Speaker 3:Billion last year, currently trading at a 165,000,000,000.
Speaker 1:But very, very high gross margins. So this is a big shift in strategy. ARM's not an AI loser by any means, but it hasn't gotten the attention that other GPU makers have received, like NVIDIA. CPUs are far from dead, though. In fact, we are in we are currently in what seems like a little bit of a CPU crunch.
Speaker 1:Intel can't make CPUs fast enough. NVIDIA is starting to sell their Grace CPU that goes with their hopper. So you get the h 100 and you pair it with the Grace CPU. You get the GPU and the CPU all on one system. Well, now you can buy the CPU by itself if you're CPU constrained.
Speaker 1:You So don't wanna just be GPU rich and CPU poor. You gotta be rich in both camps, and a lot of companies are jumping in to fill this gap. So agents and a lot of this is because of agents. Agents need CPUs. You need to fill the GPUs constantly with new data and tasks.
Speaker 1:Also, all of the agents use CPUs to make web queries, search the web, run Python, spin up web servers, interact with anything. We've just we talked to some folks at semi analysis about this. Like, uptime is going down for non GPU accelerated workloads. Like, you go to a SaaS product that is basically just a web server that's running on a CPU somewhere in a data center, and you're like, oh, this thing isn't loading today, or like there's downtime. And a lot of that's just because we're writing more software, we're using more software as a society, as a country, and we need more CPUs as well as GPUs, even though GPUs are like the hot thing to talk about.
Speaker 1:So ARM has a very interesting backstory. As I mentioned, you can go watch my twenty minute twenty five minute YouTube video about it to go all the way back and this all the precursor companies. It's a really long story. But you can think about it basically as a joint venture between three groups, Apple, Acorn Computer and VLSI. And so they needed to design a low power CPU for mobile devices.
Speaker 1:Before phones, you know what was hot, Jordy? PDAs. And have you ever seen a PDA, Tyler? No. You've never seen a PDA?
Speaker 3:Don't think
Speaker 1:so. So before the iPhone, you know, everyone had flip phones. But before
Speaker 5:not a pager?
Speaker 1:It's not a pager. You don't know what this is either? No. Wow. So there's something called a PalmPilot.
Speaker 1:And basically, it was, it was like a like a, you know, iPhone size screen and it has stylus and you could write on it and you could make notes and PDA stood for personal digital assistant. And I feel like that brand is just itching to come back in 2026. Like, that's what so many people are
Speaker 3:Everyone is working on a PDA.
Speaker 1:Yeah. Personal super intelligence assistance. There's a whole bunch of things. We're building PDAs, folks. They just live in the cloud, and it's not a physical device.
Speaker 1:But these PDAs back in the '90s were physical devices. This was post pager, pre smartphone, and it was the device that you carried to take notes and do things that you do today in apps you would do on your PDA. But it wasn't always on, Internet connected, none of that. It was a pump pilot, and this was like a fantastic business for a while. But there were a lot of problems with this because for the first time, you needed a CPU that could live within a plastics, like, shell, basically.
Speaker 1:These were, like, you know, plastic enclosures. You need to run a battery. You need to be do you need to needed to be able to do some things, not crazy compute. But the CPU industry in the nineties was very focused on mainframes, servers, desktops. There were a few laptops popping up, but there was not the mobile phone revolution that's happening now where you have Apple silicon chips, and those are, of course, based on ARM architecture.
Speaker 1:But that's where all this came from. The the people said, okay. We need a lower power chip that can actually run off a battery, not overheat and melt the plastic, do all of this, and it's can be somebody can be power a device that you carry with you as a personal digital assistant, a PDA. And so
Speaker 3:Chicken in the chat says PayPal started on PDAs.
Speaker 1:That's right. That's right. So PayPal started Originally, the idea was these PDAs had they didn't have like tap to pay or anything like that RFID. They had basically the same device that you'd see on a TV remote, so IR, and it would flash a light that could be seen by another sensor. And if you flash the light at a certain rate, you can send a message.
Speaker 1:You can basically it's like advanced what's what what's that SOS thing?
Speaker 3:Morse?
Speaker 1:Morse code. It's like a more advanced version of Morse code. And so you could send a specific packet of information from PDA to PDA. This was the original idea for PayPal. That's correct.
Speaker 1:That's a great, great piece of lore, tech lore. So the so, know, ARM starts to build these. Later, there's Robin Saxby, who was the CEO of ARM at the time. He wanted ARM to become the global standard for CPUs. And so in the nineties, there were lots of different CPU makers, lots of different architectures.
Speaker 1:There's this whole CISC versus RISC debate. There's the x 86 architecture that Intel pioneers. And slight differences in architectures can limit interoperability. You see this with what's going on with Mac where a whole bunch of applications have needed to be rewritten for Apple silicon because previously, you would have an Intel Mac before we got to the m one, m two, m three, m four, m five chips. Those are Apple silicon.
Speaker 1:Those are ARM based. And sometimes you'll go to a website and they'll be like, oh, do you want to download this for a Mac? Like, what do you have? Do you have an Intel Mac or do you have an Apple silicon Mac? Well, it's important because when you write the software that runs on the Mac, you need to use specific instruction sets.
Speaker 1:Now, are ways to abstract that and run on either, but there are lots of pieces of software that interact with the CPU at a low enough level that they need to be aware of the instruction set. ARM sets out to be the global standard for CPUs, and they create the ISA, the instruction set architecture, and that ultimately let Apple design their own chips but within the architectural guidelines set forth by ARM. So Apple pays a license for to ARM for every chip Apple sells. It's a very small license fee because Apple does a lot of design work. They do the manufacturing, the TSMC fabs it, and, like, there's a million other pieces of the value chain.
Speaker 1:But for this one little slice, they have to pay ARM and ARM just takes that and says, thanks. Like, cool. Like, you use our intellectual property successfully.
Speaker 3:Do know who else says thanks? Who? Masayoshi Son.
Speaker 1:That's true.
Speaker 3:Yeah. Huge arm own 90%, roughly 90% of the company. It was a full buyout in 2016. That's right. They bought the entire company for something around $2,530,000,000,000 Yeah.
Speaker 3:US USD Yeah. By the entire company. They still own 90% today. So their purse they're like Yeah. SoftBank's holdings Yeah.
Speaker 3:Just in that one company are somewhere in the range of 140,000,000,000 It's great. When I was looking at. It's the And of course, they've
Speaker 1:they've massively levered a 100,000,000,000.
Speaker 3:Well, and they've massively levered up against that position. Yes. Used they've they've raised debt against their holdings in ARM. Yep. But certainly, Mazda is somewhere out in the world seeing it go up 15% just
Speaker 5:Happy.
Speaker 3:Smashing a gong.
Speaker 1:Hope so. I hope so. And although everyone knows Apple, my my my clickbait for my YouTube video was like, did you know the iPhone is secretly British? I think it's funny because it uses ARM deep inside. But ARM licenses to a ton of different tech companies.
Speaker 1:So Amazon uses Arm for the Graviton chips. A lot of Android phone makers have Arm based chips. Tons of other tech companies license Arm's technology to build chips. But now Arm is going to be making the chips themselves, and they're going be working with Meta Platforms and OpenAI. This means a shift in the economics of the business.
Speaker 1:So 97% gross margins for just those licensing ISA contracts. This will be closer to 50%. But it but it is should be offset by the huge gains in market size and revenue potential. So the company has one of the highest multiples in semiconductors, roughly 90x forward earnings. So there's lot to live up to, but there's a lot of value coming from AI agents that have access to plentiful CPU resources.
Speaker 1:The industry dynamics are also particularly Ben Thompson pointed this out in Strathekari. So NVIDIA sells an ARM based CPU, that Grace CPU. And so there are NVIDIA's sort of competing with ARM. Jensen showed up and gave a remote talk at this ARM event where they announced this chip. And so they're competing, but they're also, in some ways, working together because they're challenging x86 options from Intel and AMD that are still really popular.
Speaker 1:And so if Intel is constrained, it's like they're like, if NVIDIA sells a bunch of chips for, you know, AI workloads, well, then that actually makes ARM more likely to sell their chips as well because whatever software is built for the NVIDIA ARM based chips will probably run on the ARM ARM based chips. So there's some sort of, like, integration there. And the x 86 moat is not as strong as the CUDA moat, but there's still this, like, dynamic of of NVIDIA and ARM are going up against Intel and AMD in the same way that different GPU makers are going up against the CUDA mode. So there's like this all these different interactions there. But it'll all be interesting to follow.
Speaker 1:Let's move on. The big news that drove this was, of course, Meta, engineering at Meta. Today we're announcing a new partnership with ARM to collaborate on the development of multiple generations of purpose built CPUs to support compute and AI infrastructure. Arm called it the Arm AGI CPU. What a great name.
Speaker 1:We love it. Let me tell you about Labelbox, RL environments, voice, robotics, data, evals and expert human data. Labelbox is the data factory behind the world's leading AI teams. And let me also tell you about Sentry. Sentry shows developers what's broken and helps them fix it fast.
Speaker 1:That's why 150,000 organizations use it to keep their apps working. So the The Wall Street Journal has another good write up of this story talking about how this the timing is good. It is there is a boom in CPUs right now, but the stock is already priced very highly and everything has to go perfectly because it's it trades at one of the highest multiples of all the semiconductor companies. So what else is going on in the timeline?
Speaker 3:Well, let's talk about this data center moratorium bill. Yes. I wrote in the newsletter today yesterday, Senator Bernie Sanders and AOC introduced a new bill, the AI Data Center Moratorium Act of 2026, that if enacted, would require all current and planned data centers to halt construction
Speaker 1:Mhmm.
Speaker 3:Slash production. It even it would even block upgrading existing data centers. So if you have an asset and you wanna make changes to it, in theory Mhmm. As as this bill is written today, it would be blocked. They they sort of like define data centers based on power demands Mhmm.
Speaker 3:Cooling capabilities Mhmm. Like how much power you can get to each individual rack. Mhmm. So they have been fairly specific, but trying to be like because
Speaker 1:I was was thinking I was fine with this. I was thinking like, don't need any more AI data centers at this point. We can freeze those. I just wanna build a g I data centers and ASI data centers. And so as long as I can just build tons of those, like, should be fine.
Speaker 1:But it is interesting that they they seem to have figured out the semantic loopholes that
Speaker 3:might happen if it's AI. Yeah. The bill would halt all new new data center construction and upgrades until more legislation is put in place to guarantee the following. And these will be tough to guarantee. So from Sanders' site, they want AI to be safe and effective preventing executives in the AI industry from releasing harmful products into the world that threaten the health and well-being of working families, our privacy and civil rights, and the future of humanity.
Speaker 3:The economic gains of AI and robotics will benefit workers, not just the wealthy owners of big tech. And AI does not increase electricity or utility prices, harm communities or destroy the environment.
Speaker 1:This stuff seems good.
Speaker 3:Yeah. All all generally good.
Speaker 1:But safe and ineffective AI.
Speaker 3:Well, yeah. And and and the bigger problem is is anytime you're creating well, I don't think we've created a technology ever that didn't have
Speaker 5:Some doubt.
Speaker 3:Some negative impact. So example. I'm sure this will be rewritten and debated and obviously, it has a long way to go before becoming law. Yeah. But the this set of requirements seems completely impossible to to to actually achieve.
Speaker 6:Well, it
Speaker 1:depends on how you definite how you define it. I mean, AI does not increase electricity or utility prices. Like, the ratepayer protection pledge and behind the meter stuff could actually pull that.
Speaker 3:I'm more talking about number one.
Speaker 1:Number one, safe and effective. I I mean, it's it's it's all in how you define that. Like, some of the, some of the, parental controls are a good example of, like, how to take that that overarching thesis and then boil it down into something tractable. And when I hear that, I think, like, oh, like, I don't know how we are defining safe. I don't know how we're defining effective.
Speaker 1:Like, this feels like this could be, like, some sort of very vague thing where, like, if the if one particular administration likes this company, they just approve it or not or whatever. Yeah. But then when we actually talk to lawmakers and you hear something like like, oh, yeah. We're going to, you know, require parental controls. So if your if your offspring has a an, you know, an AI account, you can say, hey.
Speaker 1:Like, they are this age. Don't show them anything that's inappropriate for that age. That seems good. Yeah. So I don't know.
Speaker 3:Overall, at least this this first bullet point preventing executives in the AI industry from releasing harmful products in in the world. Yeah. That feels like that you could end up having something like an FDA that's like every product you create needs to go through years of studies True. In order in order for the government. Yeah.
Speaker 3:And and it's like, hey. I just wanted to create, like, a slightly more AI native version of the SaaS tool. Yeah. Do I really? I wanna make SaaS.
Speaker 3:I just wanna make SaaS.
Speaker 1:Yeah. At the same time, like, the like, the the bull case, I mean, I I I think we're I think the FDA model would really slow things down based on how long the FDA takes to approve things. Yeah. At the same time, what is the definition of harmful here? Is it net harmful products?
Speaker 1:Because that is the goal of the FDA. They release drugs all the time that have side effects. You take this, it cures your cancer, but it's going to make you throw up or it's going make you lose your hair. People are like, yeah, I'll take that I'll take that trade. And so, you know, you if you went through the government and you said, okay, yeah, I'm going to give you this tool that can, like, write code, but sometimes it's gonna hallucinate and, like, you might get a code you might get some code that doesn't pass tests.
Speaker 1:I'd be like, yeah. Okay. Like, it speeds me up on on average. I'm I'm in. Like Yeah.
Speaker 1:That that's fine. And having some of those disclosures and same thing with knowledge retrieval. Like, I I I do a deep research report. I get something that's 99% of the way there. Maybe there's something in there that's like, oh, that's actually, like, misattributed or that number is I know that that number is from this report online that was wrong and they and the model doesn't.
Speaker 1:And so I need to fact check it. Like, I still see that as net beneficial, but there are, of course, flaws in every system. Yeah. And so, again, it's like, how does this get defined over time that's important?
Speaker 3:One thing I noticed from the announcement was that they are using AI leaders' own statements against them, and it's easy to see how this would resonate with their constituents.
Speaker 1:This is really powerful.
Speaker 3:So they on Sanders' websites, he included this quote. Okay. In December, Elon Musk, leads x AI, said he had, quote, a lot of AI nightmares and would, quote, certainly slow down AI and robotics if he could.
Speaker 1:It's so interesting because Elon doesn't talk about that with, like, the rollout of electric cars or the rollout of of space travel. He's not saying like, oh, yeah, like, you know, 2030 is too soon to get to Mars.
Speaker 3:Like, we
Speaker 1:need to we need to slow down on the on the race to the moon. Like, let's really figure out the the space suits first. Yeah. You know, he's like, let's just go.
Speaker 3:Yeah. And then another one. In January, Demis, the head of Google's DeepMind, said he would support an AI pause if he knew other countries and companies also paused development. In February, Dari Amade, the head of Anthropics, said he was absolutely in favor of trying to slow down AI development if other countries also slowed
Speaker 1:Yeah. Down. That was Davos, I believe.
Speaker 3:Both January and February. Continuing Yeah. I wrote. But the problem, of course, is that there is zero movement on getting other countries to slow down. I can imagine some companies that would be like
Speaker 1:There's already comments in the chat about like, yeah, let China win.
Speaker 3:Yeah. I I I'm not gonna name the countries that would be down to slow down, but I think we all know that that China, even if they agreed to something like this, wouldn't just automatically Yeah. Do anything about it. So But the problem of
Speaker 5:course Are
Speaker 1:there any countries that are like, yeah, we we definitely should. So we're ready to slow down. Like, we're France.
Speaker 3:Well, I think if you're way behind ahead. If you're way behind, there's
Speaker 1:kind of a benefit. Incentive.
Speaker 3:Elon Elon had said in 2023 that he supported like a six month pause. Yeah. And at that at that moment, that would have been awesome. Yeah. Because you hey, if I could just have six months Yeah.
Speaker 3:To, like, get my get
Speaker 1:I feel like I feel like if you
Speaker 4:pulled in
Speaker 1:the South Of France or or the Amalfi Coast, like, those folks would say we should just slow down generally. Like, AI, but also just slow down our lives, enjoy a glass of wine, hit
Speaker 3:the or even like a summer break.
Speaker 1:Just a summer break.
Speaker 3:Yeah. Four weeks.
Speaker 1:Yeah. Or even like during the work day, like taking a break, taking an app, just taking just slowing down I think I think there's a lot of people that are just in favor
Speaker 3:of Yeah.
Speaker 7:But okay. Jordy, like, if if you're saying Mhmm. Like, people who are behind should wanna, like, slow down, like, doesn't that mean that China should be more in favor of slowing down?
Speaker 1:That is interesting.
Speaker 4:Is I'm just saying,
Speaker 3:I can imagine in the same way that like for as many chips as we give them, advanced GPUs as we give them, you can assume they're still going to put an immense amount of pressure to kind of stimulate Yeah. The local semiconductor industry.
Speaker 1:Yeah.
Speaker 3:In the same way here, I'm sure they would love for The United States to just pause all new data center construction. And I think it's possible that they would like gen generally say like, yeah, like, this seems good, but then what would they actually do? They would just use that as an opportunity to
Speaker 1:Yeah.
Speaker 3:Catch up. Right?
Speaker 1:So my question is like, where does China actually stand on this? I'd be very interested to know. Maybe you could look it up. Like, has the Chinese Communist Party actually put out any statements about whether they want to accelerate or pause AI development? Because they're I I think that they might refrain from taking that stance because it would discourage local, like, indigenous development.
Speaker 1:Like, if the government is coming out and saying, like, we wanna slow down, then a lot of entrepreneurs are gonna be like, okay. I'll go back to ecommerce or I'll go back to manufacturing. Like, I'm not gonna work on this because the government doesn't want me to. And and so I feel like there's this tug in like, even though I agree with you, like, what we would be in their advantage to say, hey, we wanna slow down. Everyone should slow down.
Speaker 1:We're pro slow down. If they actually said that, it would have an immediate slowdown effect on the local AI progress. Does that make sense?
Speaker 7:Yeah. Like, it would slow down. Yeah. I mean
Speaker 1:Yeah. Because even even if they even if they if they just take that stance, because it's an authoritarian country, like there's like this the like like the the Bernie Sanders comment stands in opposition to other politicians who are saying like, no. Actually, things are going well and here's how we're going to, you know, like advance energy and to build more. And so but if you don't have that and it comes down as like a dictate or or, you know, like, this is the stance from the government, it's much harder for local entrepreneurs and local AI labs to, like, push back against that because it feels like they're all of a sudden in opposition to the government, I would imagine. I don't know.
Speaker 1:I'm very interested to hear how China's actually reacting.
Speaker 3:Yeah. Anyway, so so just to kind of finish my thought. Yeah. I all all these quotes Mhmm. Like, must go extremely hard if if you're not kind of acknowledging the full picture Totally.
Speaker 3:Which is that the AI leaders are saying, yeah, if you get other countries to agree to slow down, we'd be open to it. Yep. But that is like the big elephant in the room. They don't mention any even conversations or dialogue with other countries around slowing down and I don't think there's been any. So anyways, the act has a long way to go and it seems like the odds of it getting to law are low, but not zero.
Speaker 3:It's safe to say that as written, the requirements in the bill would be an incredible gift to America's adversaries and catastrophic for overall AI progress.
Speaker 1:Yeah. Could be popular though. There are already some candidates who have, you know, made pausing AI or data center like like, pausing data center build outs sort of like their main thing. And it does seem to be getting traction. I don't know how much of that's just on social media.
Speaker 1:We'll see how it shows up in the midterms. But Sagar and Jetty was tracking this for a long time. Like, it it's going to be a like a political stump speech that hits. Like Yeah. People are gonna be like, yeah.
Speaker 1:I don't like this stuff.
Speaker 3:Yeah. The the the question becomes, if anything like this were to become law Mhmm. What what are the what are the effects of that? Right? Space.
Speaker 3:Right? The the space data center people Yeah. Are are saying like Yeah.
Speaker 1:We were talking
Speaker 3:about Space data centers don't seem so silly now. Yeah. Right? Taking that angle. Totally.
Speaker 3:Although, I'm sure they would also be like, you can't put them up there either. We're gonna we're gonna try to
Speaker 2:Yeah.
Speaker 8:I mean,
Speaker 1:there's also there's also just, like, the globalization process that happened, based around environmentalism in, like, the nineties WTO Ascension for China. Like, the reason that a lot of the mining happened in China is because, like, we said, like, we don't want that here. Right? Yeah. It's dirty.
Speaker 1:It's gross. There's chemicals. There's pollution. And so, like, out of sight, out of mind, let's push it abroad. And we could do that again with data centers.
Speaker 1:We could just be like, they're all in Canada or Mexico or they're all in some, you know, Australia or New Zealand or like, you know, there there could be a receptive country out there that just is like, we would love we we are an ally now and we'd love to get all these data centers. And then you have to ask the question of like, what does that look like in thirty years?
Speaker 3:Data centers generate a they don't create a lot of jobs likely. They create a a meaningful amount of work during the Yeah. Development process. And certainly some jobs. They continue to generate massive amounts of tax rep local tax revenue.
Speaker 1:Yeah. I actually don't know how you
Speaker 3:tax the data center that we blocked Yeah. Think in New Jersey Yeah. Was gonna be generating like tens of millions of dollars Okay. Of local taxes.
Speaker 1:That seems pretty good. Yeah. Yeah. It seems That's real estate or I mean, yeah. Like one one medium ground here is like just tax that and then have and then use the tax revenue Yeah.
Speaker 3:The environmental concerns. Yeah. Think I think everybody should wanna make sure that if we're investing hundreds of billions of dollars Yeah. Into these things that that we're not destroying our lovely Mother Earth. Yeah.
Speaker 3:But and and the the energy costs, again Yeah. Real concern, but we're making we're making progress there. Yeah. So
Speaker 1:Well, let me tell you about CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. And let me also tell you about the New York Stock Exchange.
Speaker 1:Wanna change the world? Raise capital at the New York Stock Exchange.
Speaker 3:Do we wanna talk about this meta lawsuit?
Speaker 1:This minor headline on the front page of The Wall Street Journal. It says, Meta YouTube found addictive harmful. It's like one of the hardest hitting headlines I've ever seen on the front of The Wall Street Journal. For two companies that are usually relegated to the business and finance section, They made it to the front page because, they were found guilty or, you know, by California jurors. California jurors say the tech companies designed their apps to cause injury to kids.
Speaker 1:Very, very bad. But Brandon Guerrelle had a take and a write up and some explanation of what's actually going on here. And then we are, of course, having Eric Goldman from Santa Clara University come on and break it down for us in more detail. Because there is a lot of debate about this, and it's been very interesting watching it play out. The total damages are, I think, 3,000,000 each company, roughly 6,000,000 total.
Speaker 1:And I had a friend who's a lawyer who texted me and sent me the number and was like, hey, I'm predicting that it'll be like three three m. And I didn't read the m and I was like, okay, 3,000,000,000. Like, what will that do? This is not that big of a deal. And then it was 3,000,000.
Speaker 1:And I was like, that's extremely low compared to like the numbers that we normally see from big tech companies. But this has much broader implications because this is precedent setting and there will be a flood of other
Speaker 3:I did spend all of my free cash flow on data centers Yes. But if you give me another two seconds, I will have the cash flow to cover this. So just give me like two seconds.
Speaker 1:Yes. But it is it is a very important case even though this particular ruling is not changing the the the cash flow structure of these businesses because it has a lot of ramifications and there's a lot more plaintiffs that are in the queue. So this is what Brandon Guerrelle wrote in our newsletter today, which you can sign up for at tbpn.com. Yesterday, a Los Angeles jury found both Meta and YouTube. It's fantastic.
Speaker 1:I want a lot of soundboard for this. Both Meta and YouTube liable for a 20 year old woman's mental health crisis in a bellwether trial that treated platforms as quote defective products and potentially marks the end to the absolute immunity nature of Section two thirty. In the case, the plaintiff's lawyer, Mark Lanier, argued that Meta and YouTube built digital casinos that use neurobiological techniques similar to those employed by slot machines. Fun fact about ARM throwback, the first chip that the company, the precursor company ever built was a chip that went into a slot machine. They call them fruit machines in in England.
Speaker 3:Fruit machines?
Speaker 1:Fruit machines. They call them fruit machines because they have like the cherries and the strawberries and the bananas and you line them up.
Speaker 5:Got it.
Speaker 1:And and they needed chips to run those. So the iPhone traces its lineage and and Apple silicon
Speaker 3:and all all this This goes much deeper.
Speaker 1:It all goes back to literally gambling. Very fascinating. Anyway, so the jury found that specific features of Meta and YouTube are designed to be addictive. Infinite scroll creates an environment where there are no natural stopping points. Algorithmic recommendation feeds users, feeds users highly engaging content.
Speaker 1:Auto play removes users' agency in choosing whether or not to watch the next video. Notifications pull users back in by exploiting their need for validation. Instagram beauty filters contributed to the plaintiff's body dysmorphia. Features like the like button exploit users' biological need for societal approval. This is what the lawyer argued the plaintiff's lawyer argued.
Speaker 3:Shake Shack exploited my biological need for food.
Speaker 1:Yes. There is this question. There was, Taylor Lorenzen had some great takes here. She said
Speaker 3:So so Taylor has come out in the last like forty eight hours. Protech. I would say is like the number one defender of big technology. Yeah. She does have one of the top technology pod in the world.
Speaker 1:She she had a she had a take that was like, so does Spotify did Spotify addict you to music by playing like good songs for you on demand and and
Speaker 3:This DJ this this AI DJ is simply too good.
Speaker 1:It's basically mean, that's kind of the argument. They didn't obviously go after Spotify. They went after Meta and YouTube. But, yeah, there there's a question about like, you know, what UI features, what are dark patterns and how do we regulate those? And it's very interesting.
Speaker 1:But the decision has been made and these companies will have to pay $6,000,000 to the plaintiff in total damages. This is obviously a trivial amount of money for these companies but the bellwether nature of the outcome has significant implications for social media. There are over 10,000 individual personal injury cases, almost 800 school district claims, and 40 state level cases pending nationwide that are similar to KGM versus Meta and YouTube. More broadly, the social media industry's reliance on section two thirty, which has up to now shielded them from liability for user generated content, may no longer be enough to protect them from litigation Now, like to be clear, this case is not not attacking section two thirty because it's not making the argument that someone uploaded a video to YouTube that said, you should be sad. You should be afraid.
Speaker 1:It's over. And that made someone sad. That is the content that is user generated. That is protected under two section two thirty. You might be able to go after the individual creator of that video.
Speaker 1:If I make a video that says like, Jordy Hayes sucks and should be sad and then you get sad, you might be able to sue me, I think. I don't know. But that's that's a little bit more defensible because it's like me on you, but you won't be able to sue YouTube for for platforming that content, for putting that up in just general cases. But this is different because they went after the like button, the infinite scroll, the recommendation feeds, the features that are built by the platforms themselves. So if the decision makes it through appeals, and this might go all the way to the Supreme Court, we'll see, platforms may be forced to redesign their user experiences and algorithms, put up age verification, even deprecate infinite scroll.
Speaker 1:Obviously, like this would have an effect on both these platforms' ad based revenue models. Meta and Google plan to appeal the decision. It's not hard to imagine this one making it to the Supreme Court. Taylor's also been sort of sounding the alarm bells around age verification. It sounds very good.
Speaker 1:I feel like I'm pro age verification based on like I have kids and I don't want them seeing adult content. But she was worried about the the KYC and and needing to track privacy, tracking anywhere and and that is a good argument to be made. Well, let me tell you about Graphite. Code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster.
Speaker 1:And let me also tell you about Eleven Labs, build intelligent real time conversations Reimagine human technology interaction with Eleven Labs. We have to start apologizing to the schizophrenic community. There is a surveillance drone reportedly flown by infiltrator elements and disguised as a natural bird such as an eagle that has been spotted in Iran. This goes back to Taylor Lions because I believe she worked with the folks behind the viral stunt Birds Aren't Real that was sort of a commentary on the conspiratorial nature of the internet. And in that stunt, they make the argument that birds need to be recharged and they're all spying on you and no birds are real.
Speaker 1:Of course, that is very satirical and funny. But apparently, someone made a drone, some, you know, organization made a drone that looks like a bird so it can sneak behind enemy lines and spy during the the conflict, which is remarkable. But
Speaker 3:Do you think there will ever be video games that are effectively you're just remote piloting something in the real world? Yes. Like, do you think there would be demand for
Speaker 1:Yes. So I have heard of this years and years ago that there was something along the along those lines that would allow you to hunt remotely. So you go to a website and you control a weapon that can hunt an animal, which is crazy.
Speaker 6:I don't
Speaker 3:know if it's real. That's crazy.
Speaker 1:But
Speaker 3:Do they close the loop? Like help you actually get
Speaker 1:Yes. Meat? Yes. They so after you down the animal, they will go and ship it to you. So you can mount it on your wall.
Speaker 3:Thanks. Lot of people
Speaker 1:Sort of. Sort of. A lot
Speaker 3:of people are not gonna like that.
Speaker 1:I don't think Joe Rogan would approve. He he's a bow hunter,
Speaker 3:you know? Yeah. He wants connectivity with
Speaker 1:I think so. Think so. It's destroying just destroying the
Speaker 3:Now I'm curious. Is it is it like a is it is it like a is it a gun mounted to an ATV?
Speaker 1:Not an ATV, but sort of like a a two axis Oh, it's a
Speaker 9:Like a turret.
Speaker 1:Yeah. The sniper rifle on a on a turret with a webcam. Pretty crazy. I don't know if this is real. I heard about this like years and years ago.
Speaker 1:Anyway, the reactions to the Meta and YouTube trial continue. Ariel Grivner says or Gibner says, This is disgusting and I can't wait for the appeals. The precedent set by YouTube being liable for screen time addiction is kind of scary. Treating algorithms like a defective product opens the door to endless lawsuits over addictive tech. What's next?
Speaker 1:Books? Video games? Junk food? I mean, video games we gotta do something about. Those things are too too fun.
Speaker 1:Too fun. Truly, we gotta make them gotta
Speaker 3:Except except you you ascended. You beat your addiction.
Speaker 1:Yeah. I definitely did.
Speaker 3:You don't you don't game anymore. You actually did. No. I mean, it might be one of those things like you're still addictive addicted. You just
Speaker 1:Might have been playing a game earlier this week. Got a sneaky little forty five minutes.
Speaker 3:Really? Yeah. No. Yeah.
Speaker 1:It was good. No. Player obscura.
Speaker 3:I'm gonna go I'm
Speaker 1:gonna go look You gotta pull me out. I'm addicted.
Speaker 3:No. I'm gonna go look back at our text
Speaker 1:Yeah.
Speaker 3:And see like when did it take you forty five minutes to respond to something.
Speaker 1:Maybe it was like Tuesday night
Speaker 3:or something. Yeah. I'm gonna be coming after Eric Jorgensen Oh, yeah? For the book of ego Yes. Because that just came out and Eric did a fantastic job.
Speaker 3:Yes. And I think it's highly addictive.
Speaker 1:We gotta we can we sue this lawyer? Because this is one of the most interesting cases and I I actually can't pull myself away from it. And I feel like I'm just gonna spend hours and hours
Speaker 3:reading about this lawsuit.
Speaker 1:And and I I don't know. It's depressing. It's making me sad thinking about these these tech companies having to pay fines, and it just it's just ruining my mood entirely. And it was like you can tell that the that the the way the lawsuit was designed was designed to take an emotional toll on me, suck me in, make me read the all of the all of the transcripts from the court, all the all the reporting, all the research, and eventually, you know, talk to Eric Goldman from Santa Clara University on my show about this. Like, I just can't pull myself away from this.
Speaker 3:Dim loop.
Speaker 1:Yeah. I I I think I think should he be held accountable for what he's doing? I don't know. We'll see. But there might be loss.
Speaker 3:Meta, of course, trading down massively Really? Today, almost 9%
Speaker 2:Woah.
Speaker 1:Off of this.
Speaker 3:And, you know, it it there's some real concerns. Right? If they there's new legal risk, there's thousands of other kind of lawsuits floating out there, you might get more copycat, lawsuits, class actions. And then the real question is like, do you do they have to make any product level changes? Does that end up impacting time spent in the app which will impact the advertising business?
Speaker 3:Such an such a weird one because certainly certainly, I don't think back throughout
Speaker 1:The Nasdaq is also down 2% today. So there's a general sell off.
Speaker 4:But
Speaker 3:yeah. Yeah. General sell off but like, you know, Meta Meta down dramatically
Speaker 1:That's a lot. In the
Speaker 3:hundreds of billions of dollars. Mhmm. Yeah. This is a weird one on a personal level because like on one hand, my kids, I'm gonna keep away the infinite scroll machine as Yeah. Long as I possibly can.
Speaker 3:Yeah. Right? And will, you know, I don't I don't think back on the time that I've spent on social media and think, you know, wow, I'm so glad I I put in those those long hours and I really It's my birthday. Put in the work.
Speaker 1:Yeah. It just doesn't seem that addictive to me. I can pull myself away, like, anytime. It's not a
Speaker 3:big deal.
Speaker 1:It's just not a big deal.
Speaker 3:Hey, mister Beast. I We lost it.
Speaker 10:Walter Arnold, Panther.
Speaker 4:It just sounds like it sounds
Speaker 1:This place.
Speaker 3:In our pics are honeymoon. Okay. You just gotta get more
Speaker 1:I'll ask you a question.
Speaker 7:If you follow me, I'll double your bank account. Wait. On Instagram? Okay.
Speaker 1:I mean, is good kind. Yeah.
Speaker 5:Just follow me.
Speaker 11:This is the road you would have to take if you want to go to This
Speaker 1:is my subscriber. And this is my subscriber.
Speaker 4:This is such a such a
Speaker 12:Hey, Jimmy.
Speaker 3:This is such a good
Speaker 5:This is the final mystery box.
Speaker 2:Is so amazing. Yeah.
Speaker 1:It's fine. We're gonna get back to the show in a little bit. It's not a big deal.
Speaker 11:Not to surprise the college clash.
Speaker 3:It's fine.
Speaker 11:I grabbed 100 people.
Speaker 3:He was.
Speaker 9:He grabbed a 100 people. Okay.
Speaker 1:Actually, I've noted he he took he took people there ages one all the way to 100, and he's having them taste test lunchly. I gotta watch this.
Speaker 11:Largest LED floor.
Speaker 5:Okay. Is the is the largest LED floor? Is
Speaker 1:world's No. This is just my normal feed.
Speaker 5:The best TV
Speaker 1:What's yours like? Get by. I am scrolling this
Speaker 4:would be
Speaker 3:It's so it's so funny because it it it I I think I think whatever that was was completely inverted from, you know, a a meditation soundtrack. Right? It's just like
Speaker 1:It sounds insane. Anyway, let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just power AI.
Speaker 1:Don't just build AI. Own the data platform that powers it and let me also tell you about Cisco. Sorry. Critical infrastructure for the AI era. Unlock seamless real time experience value with Cisco.
Speaker 3:Never apologize. Well No. The the so so the funny thing the funny thing is how addictive are the apps themselves? Can they argue that the apps themselves
Speaker 1:Yeah.
Speaker 3:It's really not us. Yeah.
Speaker 1:Right? I've seen some people's channels not very addictive.
Speaker 3:Yeah.
Speaker 1:You know, like
Speaker 3:Yeah. In many in many ways, like our our content, right, we talk about niche subjects Yeah. Yeah. In technology and business. There's a lot of content on YouTube that is far far far more addictive.
Speaker 3:Yeah.
Speaker 1:But Yeah. No. I I I've I've generally had a good experience on social media.
Speaker 3:You know what else is addicting? What? High speed trains.
Speaker 1:Oh, you wanna skip to high speed trains? You don't wanna do?
Speaker 3:We can come back to that.
Speaker 1:Okay. We can come back to that one. What's going on with this? So in China, high speed trains have become a high sightseeing attraction. This is a good I would definitely go to this.
Speaker 1:I would 100% just go see the the the high speed train rip through the countryside. That looks amazing. I love it.
Speaker 3:Also, this is the most incredible video of China that I've ever seen. It's so beautiful. What is it? What is this mountain range?
Speaker 5:It's so beautiful.
Speaker 3:I think people are posting up there even if the train isn't there. Yeah. That's like one of the most beautiful
Speaker 1:You think that secretly everyone there is like boo, the train ruined my beautiful view. Because like they could just be sitting there watching the amazing sunset and
Speaker 3:And that guy's leaning forward as I
Speaker 1:think they're cheering. I think they're cheering. That's great. Where else do you want go?
Speaker 3:We can go back to this article.
Speaker 1:Okay. Okay. I I because I need to know where everyone stands. I need know where do you stand on shoplifting? Are you pro or anti?
Speaker 1:Are you pro or anti?
Speaker 7:I'm anti.
Speaker 1:You're anti shoplifting. Here we go. What about you?
Speaker 3:There we go. I had one moment as a kid when Yeah. I think I took a piece of candy Oh. And my parents immediately took
Speaker 8:me back.
Speaker 1:I'm gonna put you under citizen's arrest right now.
Speaker 3:Yeah. It's time for citizen's arrest. No. It took me back and it and it was like the most deeply embarrassing
Speaker 7:Yeah.
Speaker 3:Moment. That's like a core memory Yeah. Of telling them
Speaker 1:like to learn
Speaker 8:that.
Speaker 3:And I and I think it was it was at an age that I didn't really know that it was wrong Yeah. But still.
Speaker 1:Well, that's not what's going on, actually. So the Wall Street Journal wrote a piece about in free expression. Emma Camp wrote this op ed. And there's a new generation of it's the Campinator. There's a new generation of shoplifters who aren't children, who have who should have learned their lesson long time ago, but are actually fairly affluent and are just sort of sneaking out luxury good.
Speaker 1:I think that's a piece of it. Oh. But it was but she makes a very compelling argument for why this is a very bad thing.
Speaker 3:We need to make skydiving more accessible.
Speaker 6:Okay.
Speaker 3:If skydiving Yeah. Was was a dollar With
Speaker 1:a thrill. Okay.
Speaker 3:A dollar
Speaker 1:Okay. A
Speaker 3:dive. Yeah. I think a lot of people might say, I'm just gonna go skydiving today. I don't I'm not gonna steal anything.
Speaker 1:Well, I mean, Ben on our on our team is working on a new weather report Or
Speaker 3:jet ski racing.
Speaker 1:Of thrilling things to Yeah. If we
Speaker 3:could make jet skis more accessible, universal basic jet ski. I like that. I think a lot of people would say, I don't have time to steal. Yeah. I'm getting ready for the race.
Speaker 1:Yeah. My cortisol is super low. I don't need to spike it by by sneaking something out. So at least once a week, as I begin my commute from home from a Midtown Manhattan subway station, I some I see someone in a suit and tie dodge the fair. Well, isn't always a suit.
Speaker 1:Sometimes it's a chunky gray j crew sweater and ballet flats. Each time I see the fair evader slip through an an open emergency exit or casually hop over the turnstile. A wave of outrage bubbles within me, says Emma Camp in the Wall Street Journal, free expression. And I consider shouting out after the shameless thief. You should do it.
Speaker 1:I I am in favor of of yelling at fair dodgers in this case. But before I can work up the courage, he's melted into the crowd. It's tempting to give fair hoppers and shoplifters the benefit of the doubt and assume that they are all Jean Valjeans. Do you get that reference? No.
Speaker 1:Les Mis. You gotta see Les Mis. Jean Valjean is the pinnacle of morality. He steals a loaf of bread for his family because they're starving,
Speaker 5:goes to
Speaker 1:jail, gets revenge. It's a great story. You will love it. You should see it on the in a theater because it is of course a live stage production many times. But there's also a bunch there's also a great movie with Liam Neeson.
Speaker 1:The Liam Neeson one is the one
Speaker 3:you want to see. There you go.
Speaker 1:The Liam Neeson Les Mis is amazing. I think I have that right. But but that's far from the truth. Well according to 01/2025 survey and this was what was interesting about this article. The likelihood that someone would purposefully take an item at self checkout without scanning actually increased with income.
Speaker 1:So the rich get richer. The rich are stealing from the rich. A viral article in Curbed, a site published by the New York Times magazine, by New York Magazine paints a vivid picture of this kind of thief, a member of a certain subset of the city's wealthy ish as writer Nora Delighter puts it, for whom a little shoplifting on your grocery run has become about as mundane as jaywalking. This isn't exactly surprising. A report from the Council on Criminal Justice released earlier this year found that while reported shop leaf shoplifting decreased during the pandemic, rates have returned to roughly
Speaker 3:decreased because people were ordering groceries online?
Speaker 1:I think so. I think so. If you're not in the store, can't steal anything. You gotta you gotta hack the system or something. It becomes a cyber crime to steal from DoorDash.
Speaker 1:The rates have since returned roughly to pre pandemic levels. This New York Magazine profile in Curbed profiles several several shoplifters who were caught stealing from Whole Foods. None were acting out of necessity and most stole what can act what can accurately be described as luxury goods. $30 eye cream, strip steak, fancy organic chocolate. None expressed guilt and no one and one explicitly justified her actions as being in a card of a kind of artist's subsidy.
Speaker 1:Petty theft is a vice for a certain kind of loser. Go camp. I love this. Many of those profiled in this article are are creative types, photographers, graphic designers, sculptors and musicians. Presumably, these people are highly educated but down downwardly mobile.
Speaker 1:They steal because they feel entitled to the kind of life where they can thoughtlessly drop $50 on French cheese and sushi rolls while paying Manhattan rent. They can't That they can't indulge in such luxuries feels to them like a moral outrage, one that can be rectified in some small ways by taking what's owed to them. When shoplifters justify their actions online, they make themselves out to be Robin Hoods. They claim it's good to steal from large and therefore evil corporations. This is a teenager's leftism, one in which fighting the man means ripping him off.
Speaker 1:It's a post hoc justification for a baser impulse, the belief that everything you want should be free. This motivation is made particularly clear when people justify fair evasion given that public transportation is inherently not a big private enterprise. It's not a mega corp. It's it's, you know, taxpayer dollars that you're stealing from. Even when we grant even when we grant the assumption that large companies are inherently evil, which for the record I don't, says Emma Camp the Wall Street Journal, that doesn't justify stealing from them.
Speaker 1:If thou shalt not steal doesn't work for you, consider another argument. Petty theft damages the institutions and businesses in a community making them materially worse for your neighbors. You may think you aren't hurting anyone. Actually, you're hurting everyone. Businesses hike prices to make up for shoplifting losses.
Speaker 1:Have you heard of, like, loss? It's called, like, loss rates or something. Like, every retail store just assumes that they're going to get 20% or 5% or some
Speaker 3:Yeah. Don't think it's
Speaker 1:It could be high. Probably. It could be high in some stores. Like significant amount of merchandise just like gets loss prevention is like the term that they focus on, but it's like a constant problem for these businesses. And they have thin margins.
Speaker 1:People don't realize I think people think like grocery stores because like you go and check out and it's a 100 or something, it's like they're making a ton of money, but like the margins are very, very thin on those. It's not it's not it's not arm. They're not licensing IP to Apple. They may even close. Public transportation crumbles without sufficient revenue from riders.
Speaker 1:As journalist Kelsey Piper put it in a post on X, when you shoplift, you directly and unambiguously impoverish your community. That bar of chocolate you swiped isn't nothing. That little pot of eye cream you slipped into your purse is more than a rounding error on a corporate balance sheet. What you're doing ultimately creates a worse, less functional, less trustworthy society, and even shoplifters need a place to get groceries.
Speaker 3:Yeah. The comment section is agreeing with He said, well said and I'll extend it but beyond just shoplifting to include things like buying something with the intent of returning it after using it for a few days. Remember someone buying a grill at Lowe's with the intent of using it for the weekend and then returning it, which Okay. They Yeah. Just didn't steaks didn't really come out that well.
Speaker 3:I don't think it was me. I think it was the grill.
Speaker 1:I'm not a I'm not a big returns guy. Costco does have a huge return policy that
Speaker 3:Yeah. It's so it's so interesting. The Kugen or the Hayes mind cannot comprehend the return. Like it's I I've maybe returned Yeah. Two things
Speaker 1:Yeah.
Speaker 3:In the last ten years. It's just not an impulse that I have.
Speaker 1:You're in touch with everyone. So funny.
Speaker 3:Anyway, we can
Speaker 1:Okay. Let let me tell you about TurboPopper. Serverless vector in full tech search, built from first principles on object storage, fast, 10x cheaper, and extremely scalable. And let me also tell you about Gemini 3.1 Pro. With a more capable baseline, it's great for super complex tasks like visualizing difficult concepts, synthesizing data into a single view and bringing creative projects to life.
Speaker 1:And thank you. The clapping in the studio is at an all time high now that we're back to full strength in the TBPN UltraDumb.
Speaker 3:So That's right.
Speaker 1:Will Minitis is giving some more context around anti AI backlash. He says, in case you're skeptical that anti AI backlash will become a central issue in the next election cycle, Sanders just introduced a bill to halt all new data center construction and require the federal government to review and approve AI products before release. Interestingly, this idea of an AI FDA, the first time I heard about this concept was on the All In podcast. I believe Chamath Paliapatthia was making the point that an AI FDA was something worth considering. I think he's evolved his position, but it it was something that, you know, the first time you learn about like the possibility of a fast takeoff, the possibility of AI doom, it seems really rational to say, well, let's review everything beforehand.
Speaker 1:But then there's natural effects and there's limitations to the models and we can't even do a puzzle on our KGI. So maybe there's a little bit more work to be done. Maybe there's a few more data centers to build before we actually get good things out of these models. But
Speaker 3:Noah Smith wrote a piece that I think is relevant to the Yeah. Data center moratorium which is AI has the worst sales pitch I've ever seen.
Speaker 1:That's rough.
Speaker 3:And he his quote, our product will make you economically useless and possibly kill you. It's not says it's not a value proposition. AI leaders need to change their public messaging and fast. We don't need to read through all
Speaker 1:this read this quote. He opens this quote. Hi. Do you have a moment? I'm from the Cursed Microwave Company.
Speaker 1:Our product is much better than a traditional microwave. Not only can it automatically and perfectly cook all your food, it also microwaves your whole body so you and your family are paralyzed and unable to work ever again. Don't worry though because when everyone has a Cursed Microwave, our society will probably implement universal basic income and you and your children can just go on welfare. Oh, by the way, we estimate that there's a two to twenty five percent chance that our microwaves will put so much radiation will put out so much radiation that they destroy the entire human race. If a door to door salesman came and gave me this pitch, I would gently see him out the door and then quickly call the FBI.
Speaker 1:But this is only a modestly exaggerated version that the pitch of the pitch that the big AI labs, OpenAI and Anthropic are making to the world about their technology. And I completely agree with this. It's very it's very important that AI lab leaders, you know, focus on the actual tangible benefits of the of the technology right now. Like, I think there's this you you keep you keep identifying this disconnect between like like people are afraid of AI and there's so much fear based marketing, but then like every single person, like a billion people are just using ChatGPT to like get answers. Yeah.
Speaker 1:And and every person you talk to, no matter how they they can they can tell you for twenty minutes, lay out a very like cogent thesis of AI doom, what might happen, Terminators. They can take you on this very reasonable scenario. And then five minutes later, the topics changes and they'll tell you how they use Try GPT to, like, you know, plan their vacation or something like that. And and this disconnect just, like, cannot last.
Speaker 3:Yeah. Yeah. I wrote on January 9. The phrase techlash was originally coined by Adrian Waldridge and The Economist in 2013. He correctly predicted that the big developments of 2014 will be the growing peasants revolt against the sovereigns of cyberspace.
Speaker 3:Mhmm. The Silicon Elite will cease to be regarded as geeks who happen to be filthy rich and become filthy rich people who happen to be geeks. Over the coming years, the world experienced the Cambridge Analytica scandal, fear around the mental health impacts of social media on young people, and growing concerns around monopoly power in our digital world. The Internet and the platforms that dominated began to test the core foundations of our country and the free world, privacy, democracy, censorship, and more. The second tech clash has begun, this time because the average American believes that technology, AI, is now a threat to their very way of life.
Speaker 3:Starting at the bottom of Maslow's hierarchy of needs, Americans have heard that data centers use a lot of water. They heard their power bill is probably gonna go up because of it or already have. They've seen the movie Terminator and have imagined how that might go from science fiction to reality.
Speaker 1:Watch Terminator.
Speaker 3:You still
Speaker 1:haven't seen it. Right?
Speaker 3:No. I have seen Terminator.
Speaker 1:You have? Have you seen Terminator two?
Speaker 3:Probably not.
Speaker 1:You're killing me.
Speaker 3:John, it's enough to ask me to finish plot movie. Now you're like, oh, you gotta
Speaker 1:see Two this is two is the best one, I think. But the end of Terminator, it's a good ending. The humans win and we beat the robots. Yeah. It's a good outcome.
Speaker 1:You got a pushback on that?
Speaker 7:No. Was I was gonna add earlier we're talking about like China and like how is China thinking about some stuff Oh, yeah. Yeah. Found
Speaker 1:some Okay. Tell us.
Speaker 7:Tell us. And it goes. So Xi Jinping is like, if you basically compare like Chinese government to US government Okay. Chinese government is probably like much more concerned about safety than The US is.
Speaker 1:Okay.
Speaker 7:Interesting. Like there's always things like, so Xi Jinping
Speaker 3:We don't want us we don't want other people to be able to do surveillance as well as we there's
Speaker 7:always like the the take which is like Yeah. You know, if you're super concerned about safety, well, what does that mean? You you need these the oversight over everything. Right? Mhmm.
Speaker 7:Which is like,
Speaker 1:if you're
Speaker 7:China, you wanna be a volcanic, that's like the thing you're gonna do. Yep. But basically, he was like he he chaired this, it was from time, a rare Politburo study session on AI warning of unprecedented risks. Mhmm. It's listed AI safety is listed alongside pandemics and cyber attacks in their national emergency response plan.
Speaker 7:He also said he stressed the need for monitoring early risk warning and emergency response. Right? So it's like, sure that's like about safety, but also Yeah. You know, monitoring. Right?
Speaker 1:No. No. No.
Speaker 7:It's kind of wonder
Speaker 1:I wonder how this interfaces with the Bernie Sanders position. Like, will there be some sort of, like, open discussion? You know, Bernie's going around doing a lot of different conversations. That would certainly be, like, the next step if he wants to get through the, you know, the geopolitical pushback.
Speaker 7:Even when you talk to a
Speaker 3:lot of,
Speaker 7:like, the Pause AI people, very few of them are are like ever really say The US needs to pause regardless of what China does. It's always like we need to have international, you know, agreement on. Yeah. Because otherwise like it obviously doesn't work.
Speaker 1:Totally. Totally. Yeah.
Speaker 3:Yeah. If everyone could just give their GPUs to Tyler, he will watch after them.
Speaker 1:He can be trusted.
Speaker 3:He can be trusted.
Speaker 1:He can be trusted.
Speaker 3:Cluster. Yes. Anyways. Yeah. So this story will continue to evolve.
Speaker 1:That's good info. Thank you.
Speaker 3:Rune hit 300 k. He says time to docs on TBPN. Okay.
Speaker 1:Let's do it. 300 k of those houses. Let's go. Congratulations.
Speaker 3:Boom. Boom. Boom. That's four sets.
Speaker 1:We hit the gong at two fifty two. Every every time every time there's a ruined milestone, we must celebrate it to the fullest of days.
Speaker 3:Four sets.
Speaker 1:Really quickly, let me tell you about Cognition. They're the makers of Devon, the AI software engineer. Crush your backlog with your personal AI engineering And let me also tell you about Console. Console builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution to access requests and password resets. Continue.
Speaker 3:Let's pull up one of the greatest videos created in the last year.
Speaker 9:Oh,
Speaker 3:yes. Spore says, r I p sory, you gave us the greatest AI video of all time. Yes. Let's play it.
Speaker 1:This was a great video. I did enjoy this one.
Speaker 3:Sound, please. Yeah. You Stop that.
Speaker 1:It's midnight. Give me that. No, sir. No more fiddle tonight. Got it?
Speaker 9:No more fiddle tonight.
Speaker 2:Go home.
Speaker 1:Wait. What did I say about the noise? It's the middle
Speaker 3:of the night.
Speaker 1:No more stints on the porch. The door cam.
Speaker 3:I'm taking inside.
Speaker 1:The SOAR model, I don't know what they what was in the training data, but it nailed this, like, doorbell footage. Like, the graininess really leans into the flaws, and it it hides the flaws in the model. When you try and do something that's photoreal, it looks a little waxy still, but this is just perfect. And it's too it's too low res to detect, like, oh, the finger's perfect or whatever. That's a good instrument.
Speaker 1:That's fun. Been nice. Yeah. She really she really hits the cat with that door. Absolutely insane.
Speaker 1:Yeah. Well, the didgeridoo? Hey. Not chat. It's midnight.
Speaker 1:Give me that
Speaker 3:Here's the thing. Here's the thing. Human.
Speaker 1:You hear me?
Speaker 3:Creativity. Yeah. You had to string all these together. This was not one shot. This is like No.
Speaker 3:No. No. This is like, you know, 10 prompts.
Speaker 1:I've done it. I I I've gone to ChatGugi and said, like, think of a funny prompt and it doesn't come up with something as novel as this. Otherwise, I would be the creator of that. Hey. That's our Gong.
Speaker 2:Knock it off.
Speaker 1:Sing it. That's literally our Gong.
Speaker 3:Or her former Gong. Our former Gong. Yeah. It's nice. We made it into the training data.
Speaker 3:Hey. Aerobics now? Aerobics? Board is shaking.
Speaker 1:Volume down, pause off the neighbor's nerves.
Speaker 3:Silent disco.
Speaker 10:Cool down
Speaker 1:before 3AM. Okay? It's good. I love it. Yeah.
Speaker 1:The SOAR the SOAR news is interesting. I mean, obviously, good to as a reflection on, like, okay, your era of focus. We heard that news from, a week ago. This is, like, a very clear step in, like, refocusing. There is a question about, like, the value of models.
Speaker 1:Like, Sora jumped ahead of Meta Vibes very quickly. Meta Vibes launched, like, a week before. And when Sora came out, the consensus was, oh, wow. This is, like, definitely a step above of what you can do with Vibes, which was much more like an animated picture from mid journey. It had cool cool aesthetics.
Speaker 1:But it was it was way less like, it was it was very constrained in terms of what you could do with Sora. You could you you you could automatically insert different cuts, generate something that looked a lot more like a native real even if there were sort of rough edges. But the question with every model is, you know, you spend money to train it and then it has ongoing inference costs, the cost of a video model. It feels immense because I went back and looked at some of the first Sora videos that I generated. I'm thinking of me in the orange and white suit.
Speaker 3:Yes.
Speaker 1:One of the greatest AI videos. We'll have to play it at some point. But that one felt like it had about a thousand times as much compute allocated to it than the last one that I generated. Because I generated Asura like a week before this announcement. And it did it does feel like they had they had shifted the GPU workloads to other to maybe codecs because that was the product that was taking up.
Speaker 1:What do think
Speaker 7:about it? There were some rumors where they were spending something like $1,015,000,000 dollars a day on compute for just for Soa, which is
Speaker 3:like That's
Speaker 7:a lot. You know, like 3 and a half billion a year or something Yeah. Something in this range.
Speaker 1:Yeah.
Speaker 7:It's And like much compute just on inference and it's like, yeah, what's the actual value of it?
Speaker 1:Yeah. Yeah. And and if it's not monetizing with crazy ad rates immediately or crazy API costs. Like, you just you're just in GPT two territory where Greg Brockman came on and told us that, you know, I don't know, they spent probably millions of dollars training GPT two and they were like, we had to pay people to use it. Like, every dollar of inference was negative margin.
Speaker 1:We were losing money on every token generated. And then GPT-three was in a similar boat. It was like almost there, but they weren't really making any money for it. Then the GPT-four training run happens. And that I mean, looking back, that has to be an incredibly profitable model because I think it maybe cost a $100,000,000 to train and then the inference cost cut like like they distilled the model pretty quickly, got to a place where I think that was very, very ROI positive based on the subscriptions during that time before they rolled out five.
Speaker 1:And then, you know, you're always facing this battle of, like, you know, a little bit of a Red Queen's race, training the new model, you know, depreciating the model across whatever the the inference margin you get during the period where you have the best model.
Speaker 3:Mitchell Green went on invest like the best.
Speaker 1:Thank goodness. Patrick
Speaker 3:Patrick pulled out one of lead lead he said lead lead edge is probably most famous for this letter. Mitch Mitchell calls it the hierarchy of BS. It's his way of distilling what he learned from cold calling 10,000 companies. And I will go through it. If companies have good cash products profits, they report those.
Speaker 3:If companies don't have good cash profits, they report on adjusted profits. If companies don't have good adjusted profits, they report on gross profits. If companies don't have good gross profits, they report on revenue. If companies don't have good revenue, they report it on adjusted revenue indicators like GMV. If companies don't have good GMV, they report on monthly active users.
Speaker 3:If companies don't have good monthly active users, they report on subscribers. If companies don't have good subscribers, they report on downloads. If companies don't have good downloads, they report on page views. If companies don't have good page views, they report on what they were voted. The best place to work in X Y Z City.
Speaker 3:Right now, this It's very
Speaker 1:funny because the only news that we've shared from TBPN is that we're like the forty second most innovative company recently, but we're not a public company. If you wanna trade a public company, go over to public.com. Investing for those three seriously. Stocks, options, bonds, crypto, treasuries and more with great customer service. On this.
Speaker 3:People that that at Flex, how many lines of code they're writing. Oh, yeah. Like if your product doesn't have any if your product doesn't have any users or revenue, you Yeah. Just report on lines
Speaker 11:of code.
Speaker 1:Lines of code per year run
Speaker 3:rate is a crazy one I saw recently. LOCRR.
Speaker 1:That's an insane stat. But we have the solution. It will be released soon. Do you have a general update?
Speaker 3:Yeah. What's the timeline,
Speaker 1:Tyler? Traveling.
Speaker 3:Did you when on when you went on the road, did you stop
Speaker 1:walking in?
Speaker 7:Work. The project is will can be done today, tomorrow.
Speaker 3:Really? Does it have sound effects yet? It does not yet have sign in a day
Speaker 1:or two.
Speaker 7:Just one more fundamental mechanics. Yeah. Was fine tuning tomorrow
Speaker 3:at 12:07 chat. Jordy, it's Ask Tyler The project. Status of the product.
Speaker 1:The project is not done yet, but I talked to Tyler and he said he's he's generating 25,000 lines of code an hour in advancing of this project. So, I mean, he's doing he's clearly putting out a lot of code and that will translate to a great product eventually.
Speaker 3:The best entrepreneurs I know
Speaker 1:Yeah.
Speaker 3:Are generating millions of lines of code daily Yes. Just to Yes. Keep their about page Yes. Up and running.
Speaker 1:About page. Rough. Well, let me tell you about Restream. One livestream, 30 plus destinations. If you want a multistream, go to restream.com.
Speaker 1:Just do it. Gwen Shotwell is on the cover of Time Magazine. SpaceX is racing to build the most powerful rockets yet with the goal of returning humans to the moon. Gwen Shotwell is leading the charge alongside Elon Musk. This is a good deep dive.
Speaker 1:Let's go check it out. Go. My the first YouTube video I ever made that went viral or like broke out because when you have
Speaker 3:Was why is no one talking about Glenn Shotwell?
Speaker 1:Literally. Literally. That was not exactly the title.
Speaker 3:So not literally.
Speaker 1:But it was it was that that was the whole premise. That was the whole premise. Yeah. And and normally, I think I had a thousand subscribers and so getting like a thousand views was like, okay, this is great. And if you can get more views than subscribers, that's like a banger.
Speaker 7:What was it called? The title was The Only Reason SpaceX Works.
Speaker 1:There we go. That I I might been retitled that a few times, but you get the idea.
Speaker 3:Anyways, no surprise that Gwen shot well Yes. Running Yes. Running a company that is shooting
Speaker 1:Shooting rockets into the atmosphere.
Speaker 3:No surprises. Well. Feet has some reporting Mhmm. On the SpaceX IPO. Bankers involved are toying with the idea of allowing existing shareholders to sell out of their positions on day one, two of the people said.
Speaker 3:Wow. That would do away with rules to prevent insiders cashing out or trading shares which are imposed for a hundred and eighty days after
Speaker 1:Normally there's a lockup. I would think there would be rolling lockups.
Speaker 3:A third person said SpaceX is considering a so called staggered lockup that would allow initial investors to slowly sell down their stakes over the course of several months. The deal is quote too big of an IPO to just unlock. Yeah. Musk's influence over the size and timing of the listing has been highly unusual, said one investor close to a banker on the deal. It's kind of scary how Elon is setting the price.
Speaker 3:It's not being done formally.
Speaker 1:Oh, interesting. It's not it's not a full auction format. He says, this is the price, and you can either buy or not. And hopefully, you buy. Yeah.
Speaker 1:Interesting. The the the staggered lockup, it feels like it makes a lot of sense. You could just see, okay, this person's held these shares for twenty years. This person's for ten years. They get hundred and eighty day lockup, a ninety day lockup, a two, you know, two hundred and seventy day lockup, whatever you want.
Speaker 1:I don't know.
Speaker 3:Just imagine how much money the lawyers are gonna make from unwinding all different entities and the SPVs and the SPVs and the forward contracts with the SPVs and the forward. It's gonna be
Speaker 1:Full employment for lawyers for sure.
Speaker 3:XAI co founder, Krois.
Speaker 1:Krois. Are you Australian now?
Speaker 3:Manuel Krois. Okay. He's departing the company, which is I think officially the last cofounder
Speaker 1:Wow.
Speaker 3:Remaining outside of Elon. So
Speaker 1:That's remarkable. Well, it'll be interesting to see what the next what the next run, the next version of Grok does. Is there is there a new 4.2 came out. Is that right?
Speaker 7:Yeah. I mean, that was a while ago.
Speaker 5:That was a
Speaker 1:while ago. So we're expecting, like, a five or a 4.3 soon.
Speaker 7:But Yeah. I I don't know if anyone expected super soon. Yeah. Right? Because they're kind of revamping the whole thing.
Speaker 1:Yeah. I wonder what they'll try to do with r k g I v three because they were the fourth lab that tested and they were the only lab that got 0%. Although, I don't know how much worse that is than getting point 25%. But, certainly, it'll be interesting. Orion Peterson had an idea for Elon Musk.
Speaker 1:He said, if Tesla makes a car with three rows of seats, each with its own pair of doors so nobody has to climb over everybody else to get in their seat. They will create a bite a baby boom, the likes of which we haven't seen in in eighty years, and Elon Musk says noted. Would you buy a car with three sets of doors? It would look extremely odd. It wouldn't be the very iconic, but that's sort of Tesla's thing and the Cybertruck stands out on the road.
Speaker 3:Model y s l.
Speaker 1:S l.
Speaker 3:Size lord.
Speaker 1:Size lord. Okay. Well
Speaker 3:Yeah. So so the y l Yeah. Has three rows.
Speaker 1:Yeah. But it has two sets of doors. Yeah. Four doors.
Speaker 3:Don't know how big. I don't know.
Speaker 1:Someone has to have done this at some point. A six door
Speaker 3:Having a kid jump in and just crawl to the back, we did that was when in my day
Speaker 1:Back in your day?
Speaker 12:It was
Speaker 3:up when you climbed in that door Yep. It was uphill to the third row
Speaker 4:Yep.
Speaker 3:Both and then and then uphill on the way up.
Speaker 1:Okay. Yeah.
Speaker 3:So it was a nightmare.
Speaker 2:It was
Speaker 1:a nightmare.
Speaker 3:We did it.
Speaker 1:Yeah. But it made you who you are.
Speaker 3:Into the man I am today.
Speaker 1:Yeah. And so you don't want you don't want easy street, extra doors
Speaker 11:No way.
Speaker 1:Back. No way. Your kids are gonna be climbing. They're gonna be climbing all over the seats.
Speaker 3:Yeah. It's interesting. It it feels like Tesla's entire strategy from a merchandising standpoint has just been to make like more and more as much as possible, just make the the the the lowest number of cars. Yeah. And so he's getting all this feedback, but they already have like a six seater coming Okay.
Speaker 1:Someone someone shared an image. Yeah. This is the data that the Ambruster Stageway. The Ambruster Stageway, the world's oldest and largest manufacturer of custom multi passenger vehicles. And it's a Suburban that was converted, and it comes with six or eight door models.
Speaker 1:So you can have rows and rows. I don't know if you can scroll down and find it from Talos Dreams in the replies there. But I don't know. Anyway, we're doing this.
Speaker 3:Meek Mill says I'm getting $2.50 for a tweet.
Speaker 1:Oh, interesting.
Speaker 3:I I was fascinated because he's gone on like this big of like promoting AI. Yeah. Specifically, Claude. Mhmm. And so What
Speaker 1:is Nikita Beer gonna say about this if he's getting Yeah.
Speaker 3:Like, is he basically just saying like I'm I'm doing on Spot on. Undisclosed paid promotions?
Speaker 1:I don't know.
Speaker 3:Because he's certainly getting more than 250 likes.
Speaker 1:Likes? Yeah. I don't know. He got about 250 retweets on this. 295.
Speaker 1:So I don't know. It's possible. Let me tell you about Okta. Okta helps you assign every AI agent a trusted identity. So you get the power of AI without the risk.
Speaker 1:Secure every agent. Secure any agent with Okta. And let me also tell you about Lambda. Lambda is the super intelligence cloud building AI supercomputer for training and influence that scale from one GPU to hundreds of thousands. And I believe we
Speaker 3:Last last last thing before we go into our first guest. Sure. We have to pull up this post from Peaceland. He says, I've seen some fire fits in China, but I've never seen a jacket this hard in my life. And the guy the back of this guy's jacket just says, mister enjoy the money.
Speaker 1:M e d m? M e
Speaker 3:d m. Mister enjoy the money. This
Speaker 1:is Apparently, that's a that's a legit brand. That is very tough. I like it. Mister
Speaker 3:might be the new meta.
Speaker 1:This might be. The puffer jacket with the the stitching on the back is very nice. There's a lot of fun examples of other little swag in the reply as well. Without further ado, let's bring in Eric Goldman San Diego University. He's the associate dean for research and
Speaker 4:a professor there. Eric, how are you doing? What's going on?
Speaker 6:I'm alright. Thanks. How are you?
Speaker 1:I'm good. Thanks so much for joining. Please, since this is the first time on the show, I'd love a little bit of an introduction and then of course I want to go into the case today.
Speaker 6:Sure. I'm Eric Goleman. I'm a professor of law and associate dean for research at Santa Clara University School of Law. I've been doing internet law for over thirty years, teaching, researching in the area And my area of specialization includes how users talk to each other online.
Speaker 1:Okay. And when did you start tracking the Meta YouTube lawsuit? How long has this been going on? And then I want to hear about your expectations for the case, your interpretations of the case, how things played out.
Speaker 6:So I started tracking the cases when they were filed. Mhmm. I had can set up the electronic alerts to notify me of new filings of the cases. And I had to give that up after a while. These parties were just beating each other up in court with an enormous volume of very decaying filings.
Speaker 6:So I stopped tracking at that level Okay. A while ago. It's hard to track the state court cases. There isn't an electronic tracker for that, so it's been a little bit harder to get the information in that case. Mhmm.
Speaker 6:And this has been going on for a couple of years, and many millions of dollars have been spent by both sides in these cases.
Speaker 1:Mhmm. So take us through what actually happened, how we should be interpreting the the verdict, and and then we'll go into where we go from here.
Speaker 6:So let me just step back for a moment and let me lay the describe the landscape and then we'll see how this case fits into it. Yeah. Yeah. In California state court in Los Angeles, there have been hundreds of, plaintiffs who filed lawsuits against the social media services. These cases have been joined together in a proceeding, but they're not a class action.
Speaker 1:Mhmm.
Speaker 2:So
Speaker 6:there's hundreds of parallel lawsuits all sitting next to each other. Mhmm. A similar lawsuit is also pending in federal court in Northern California. It's called a multi district litigation or an MDL, and there are thousands of plaintiffs in that case as well. Similar format, they're sitting next to each other, it's not a class action.
Speaker 6:That case also includes entities like school districts and native American tribes. So there's other entities in that as well. Mhmm. And then there have been individual filings across the country by state attorneys general and others in the lawsuits. So there's basically just a litigation mania taking place across The United States.
Speaker 3:Yeah. And what it actually take to qualify a plaintiff? Do they just look at their screen time and say like, oh, you used social media for five hours last week, you're addicted, and then they kind of figure out how to
Speaker 5:Mhmm.
Speaker 3:How to kind of, you know
Speaker 1:Turn in the face lawsuit?
Speaker 6:Is no screening for who gets named as a plaintiff. They just raise their hand and say, I think I qualify. Okay. And they've been joining these lawsuits. The lawyers of course are helping them and each trying to, each lawyer is trying to add to their portfolio of plaintiffs that they have, that they're representing.
Speaker 6:So, but whether they're actually going to get any recognition from the court or money, they'll have to make their case eventually. So that's part of why the the trial was held that that led to the verdict that came out this week. What they did in the California State Court case is they said, we're gonna pick three plaintiffs, and we're gonna do what are called bellwether trials. We're going to let the parties make their case to the jury, and we're gonna see what the jury thinks. The goal was to do three, not just one, with the idea that plaintiffs have so many different stories.
Speaker 6:The victims are each in their own unique situation that we wanted to get multiple data representations from the pool of plaintiffs to start to be able to estimate the overall value of the case. So the first one came out and the jury agreed with the plaintiffs, did not agree with the defendants, and awarded $6,000,000 of damages. Mhmm. Now this is just the first data point of what's expected to be three just in the state court case. There's lots of activity taking place throughout the country.
Speaker 1:So how how should we think about the actual ruling? The Wall Street Journal has a headline, Meta and YouTube found addictive and harmful. What how how are you interpreting the nature of what the plaintiff attorney proved?
Speaker 6:At the core, the plaintiff's lawyers had to make a number of novel arguments both to the judge to get to the trial, and then in front of the jury, they had to convince the jury to recognize the harms that the victim suffered, and attribute them back to social media services. And the jury agreed with all of that, and so the way to I think to interpret this verdict is that we've now heard from some ordinary Americans. I don't want to say, you know, metaphorically picked off the street. Mhmm. And asked them how do they feel about the accountability of social media services for the harm that their of their users.
Speaker 6:And the jury said, we think that the social media services should be responsible, and we should assign some pretty significant dollar values to that responsibility.
Speaker 1:Is is that is is 6,000,000 seen as a significant dollar value in the courts? Because these companies are so big, but again, this could just be Well, have to
Speaker 3:multiply it by potentially thousands.
Speaker 1:Yeah. So so where does this go in terms of the the the damages as they snowball? Will there be a class action, some sort of master settlement that that goes way bigger?
Speaker 6:Just about the numbers for a moment. $6,000,000 is far less than what the plaintiffs requested. It's far more than I think the defendants had hoped. Mhmm. And as you were pointing out, if you multiply it times 3,000 potential plaintiffs that are already in the queue Yeah.
Speaker 6:That translates into something on the order of like $20,000,000,000. Yeah. Again, maybe numbers that Meta and Facebook and Google have, but TikTok and Snap, if they're also gonna be coming along for the ride, it's maybe they don't have that.
Speaker 3:Yeah.
Speaker 6:Maybe that becomes uneconomic. Mhmm. So the numbers grow, I think, really rapidly because not only is it the people who've already filed, it's all the other potential users who will say, just like like you were suggesting earlier, who will say, you know, I've been addicted for five hours on my site. There could be tens of thousands of more plaintiffs coming through. Mhmm.
Speaker 6:The numbers on this could get extraordinary. Now remember, this is only one data point. The other two bellwether cases could establish no liability Mhmm. Or they could assign much larger damages. Yeah.
Speaker 6:And so we'll see if that 6,000,000 is even the right number for the parties to start estimating the settlement.
Speaker 1:Sure. So, will those other bellwether cases, for sure resolve before this gets appealed? Do you anticipate that this ruling will get appealed all the way to the Supreme Court? How do you think about the interaction between the bellwether cases and then other legal proceedings?
Speaker 6:And so my I believe that the appeals are gonna be lodged now. Mhmm. But I would expect that by the time that the appellate court is ready to hear the appeals, the other two cases will have been resolved. Mhmm. And ideally, they'll be all handled together.
Speaker 6:Whoever doesn't get the results they want in the other two bellwether trials would go ahead and appeal those as well. Mhmm. All these cases are gonna be appealed until there's some kind of definitive resolution, and I would expect the appeals to go up, all the way as high as the court will take them. The US Supreme Court has discretionary reviews, so they may not take it, but I expect the cases to be appealed to them. Unless there's a settlement, and you did ask about that, and let me just close the thought.
Speaker 6:The difficulty with the settlements, because they are not class actions, the defendants cannot settle against all the potential plaintiffs. They go and settle against the ones who've already expressed who've already signed up to the case. And so one of the tricky aspects of this case is how could they price the settlement to pick up all these other potential plaintiffs who are waiting in the wings. Mhmm.
Speaker 1:Are there any other countries that have gone through this process of litigating social media addiction? It feels like uncharted territory. When I see things like the effect of the like button or endless scroll or feeds, there's been a conversation about the effect of those technologies for a long time. But this is the first time I've seen them actually been, you know, in the court of law.
Speaker 6:That's a great question. I don't actually know if there's been any trials on these questions in other countries. Yeah. And other countries don't always have a jury system like we do. So I do think we are in some new ground here.
Speaker 6:Yeah. Having said that, other countries often can regulate the specific mechanics of online publishers in ways that the first amendment may not protect Sure. Or permit here. So the other countries might very well have already dictated that certain things cannot be done that are part of the litigation now.
Speaker 1:Yeah. So do you think that there's a hope for sort of new federal regulation alongside what is going on with Section two thirty that sort of sets the rules of the road at a national level that then if you're in compliance to, you can't be held guilty of, you know, this these all these lawsuits.
Speaker 6:It's possible that we could get some kind of federal legislation that provides some kind of security or safe harbor for the defendants. Yeah. Yeah. That would also preempt any of the state laws that would conflict with that. I don't see that anywhere in the Overton window.
Speaker 6:Okay. You know, the window of what's actually being debated today. Yeah. But maybe if the services are feeling the pain, they would be willing to to pursue that. The reality is today, the states throughout the country are passing laws that govern the same issues that are at issue in the litigation.
Speaker 6:Mhmm. And so, unless there's some federal preemptive laws, the the defendants, the social media service are gonna have to navigate this ever growing stack of state legislation.
Speaker 3:Mhmm. Jordy, please. Do you think we get to a point where when you open a social media app, it has like an addiction warning like you might see on a cigarette on a on a cigarette box. Is that is that where this is headed? Or if this goes far enough, are we are are the platforms running the risk of, you know, needing to remove the like button because it it hurts people's mental well-being or or eliminating the the infinite scroll or or app level usage limits?
Speaker 3:Like, what are what are kind of like the Mhmm. Extreme sort of downside scenarios for the platform?
Speaker 6:So there have been some states that have enacted, mandatory warning labels like you're describing. Those are gonna be subject constitutional challenges. It's not clear to me that they're actually constitutionally permitted. For example, Texas' law has I believe been enjoined on that very point. So the warning label approach, don't think is likely to be the final resolution in any of any of the disputes here.
Speaker 6:I think that that's gonna be an effort that probably isn't gonna either solve a problem or be constitutional. Mhmm. It is already the case that states have passed laws that have done things like try to ban auto scrolling or infinite scrolling or autoplay or the like button or like counts or whatever. States are gonna get to that level of granularity, and they're already doing so.
Speaker 1:Mhmm.
Speaker 6:Many of the things that are already part of social media features today are regulated by state laws that are on the books, but possibly being in the process of being challenged. And I think the bigger question isn't will we, you know, lose our like button or will we lose infant scrolling. I think we would consider that for those of us who are aficionados of social media, who think that there's some value to them, we would consider that to be maybe the best possible outcome. I think the more serious outcome is what social media services drop out of the industry entirely, what social media services add barriers to user populations having access to social media, and how much we see the circumscription of social media conversations entirely. In other words, I don't think we should assume that social media will exist in its current form in the future.
Speaker 6:The question is whether will he even have social media in the future. That I think are the stakes of the cases and the legislation.
Speaker 1:Yeah. Yeah. It's fascinating. What other industries have been through this type of pivotal moment and where should we be drawing analogies or where should we avoid drawing analogies? People have said social media is the new cigarettes.
Speaker 1:Jordy was making a point about the warning labels on cigarettes. It feels like that might not be the actual best analogy. I was talking to Tyler and our team about the risks associated with driving a motorcycle. And I was making the point that there's an instruction manual that you buy that you get with a motorcycle that you know puts a lot of the risk on you if you choose to
Speaker 3:Yeah. Transport If this really progresses, like unprecedented set is like, okay, fast food companies shouldn't be able to use bright colors in their Yeah. Logo. A lot
Speaker 4:of different stuff.
Speaker 3:Musicians shouldn't be able to play hooks that are just too catchy.
Speaker 9:Too
Speaker 1:catchy. Maybe. I don't know. Yeah. But but where do you think the the best analogies are?
Speaker 6:I'm not a fan of analogies between online and offline Sure. Activities. And in particular, I don't like the analogy to tobacco. And let me make clear why, and I think that'll start to enlighten where the risks and opportunities are. Tobacco, we would generally say there are no health benefits to consuming tobacco.
Speaker 1:Sure.
Speaker 6:Nobody is healthier because of that. It's just either neutral or negative.
Speaker 2:Mhmm.
Speaker 6:But social media consumption has many social benefits. There are many communities that that are thriving online and who are, you know, I think justifiably concerned that their benefits are at risk in this litigation without them even having a say in them. Mhmm. So unlike tobacco, social media is a mix of potentially very helpful things and things that could potentially be harmful for some of its consumers. And those kinds of mixed uses technology that have both benefits and potential detriments are really, I think, a better analogy than tobacco.
Speaker 6:And I don't know that we have great circumstances where we can point to where mass tort litigation has targeted and potentially removed from the industry these mixed use scenarios. Mhmm. And in the end, the things that people are being addicted to, or they're allegedly causing harm, are people talking to each other. Yeah. And that kind of speech related theme is unlike almost any physical product that we might draw an analogy to.
Speaker 1:Mhmm. Yeah. That it's a fascinating case. We really appreciate you taking the time to come chat with us about it. I hope you have fantastic rest of your day.
Speaker 3:Yeah. Come back on as there's more news.
Speaker 1:Yeah. We'd love to talk to This you again in the is
Speaker 3:just scratching the surface.
Speaker 1:This was really helpful.
Speaker 6:Been great talking to you. Thanks for the opportunity.
Speaker 3:A great
Speaker 1:rest of We'll your talk to you soon. Our next guest is in the TBPN UltraDome. First, let me tell you about Railway. Railway is the all in one intelligent cloud provider. Use your favorite agent to deploy I got say services, databases, and more while Railway automatically takes care of scaling, monitoring, and security.
Speaker 3:We gotta make it illegal. If I drop a good one liner Okay. In a group chat
Speaker 1:Yeah.
Speaker 3:It should be illegal for people not
Speaker 1:to chime
Speaker 3:in, react. Hopefully That's get get some laughs.
Speaker 1:Yeah. The light button's just gonna be like a circle, whatever.
Speaker 3:It's nice have you here, dude. Nice to Good to meet you.
Speaker 2:Nice to
Speaker 1:meet you. How are doing? Introduce yourself for those who are not familiar since it is your first time.
Speaker 2:My name is Nema Jalali. I'm the founder of Salt and Stone. Okay. And founder and CEO.
Speaker 1:Yeah. Take us take us back.
Speaker 3:And and I'll I'll give some context. So I met Nema recently moved into into my area and I think we met within like a week of of you moving in and so I haven't I haven't even gotten like the full story even though we've been hanging out the last couple weeks. Cool.
Speaker 2:Yeah. Full story. Was yeah. Pro was a pro snowboarder. I heard you're from Pasadena.
Speaker 2:Yeah. Is that right? Yeah. So I'm from La Canada.
Speaker 1:No way.
Speaker 2:Yeah. That's awesome. And so grew up there. I was obsessed with skateboarding Yep. Then got into snowboarding and started going to those local mountains
Speaker 3:high, big bear.
Speaker 2:No. Like Mount Waterman and Yeah. It used to be called Craca Ridge.
Speaker 1:Sure.
Speaker 2:Have you heard
Speaker 1:of that?
Speaker 2:Yeah. Yeah. And so, back in the day, you know, when I was in high school we had, you know, El Nino winters.
Speaker 1:Yeah. Yeah.
Speaker 2:It's like a ton of snow and they would actually operate. They don't operate anymore. Yeah. And so I just I would just get out of school at twelve every day and go up there Mhmm. Five days a week.
Speaker 1:Yeah.
Speaker 2:And I got good and went off and turned into a pro snowboarder.
Speaker 1:What does that mean? Does that mean like speed competitions, trick competitions? What are you doing? Because there are there are multiple
Speaker 6:there are
Speaker 1:multiple ways to become a professional snowboarder. Correct?
Speaker 2:More more like freestyle.
Speaker 3:Yeah. There's there's there's basically like two paths. There's like think like lifestyle guy Okay. Just like going around making movies all the time. Okay.
Speaker 3:And then there's like the competition track Yeah. And then there's some crossover. Yeah. Generally, there's like you're you have sponsors in both departments Yes. But one one person focused on like winning contests, going to the Olympics Yes.
Speaker 3:Going to the X Games
Speaker 1:Yes.
Speaker 3:Doing things like that. Yeah. And then there's then there's the more like guys that might do backcountry or Sure. Street or park but they're focused on producing Yeah. Like parts, basically.
Speaker 1:Got it.
Speaker 2:I didn't know you knew so much about it.
Speaker 3:I know a lot. Yeah.
Speaker 2:Yeah. So I wasn't the contest guy.
Speaker 5:Okay.
Speaker 2:I was more in movies and in magazines Oh, and stuff. Yeah. Okay. So I went off and did that.
Speaker 1:How long were you doing that?
Speaker 2:Pro for about ten years. From about from about twenty to thirty years. Years. That's awesome.
Speaker 9:Yeah. Yeah.
Speaker 2:It amazing. Mean, that was like my college really.
Speaker 1:Yeah. That must be so much fun.
Speaker 2:It was fun.
Speaker 3:What is the what I feel like entrepreneurs can probably resonate with what like a pro snowboarder is doing where your job is to basically produce, right? Like a banger part Yeah. A season potentially multiple and there's like this prep where you're basically like What is part? Like that's like a five minute video Okay. That might be released independently or as part of an entire movie.
Speaker 1:Okay.
Speaker 3:And so your job is to do enough tricks Yeah. Yeah. Yeah. Stomp them
Speaker 1:Yeah.
Speaker 3:As Nemo would probably stomp
Speaker 2:them. Yeah. It's a lot. There's a lot. I mean, there's there's like you pick out a song, you you know, that you wanna have in your part.
Speaker 2:There's first part and then the most prestigious is being in the the last part, you know, in the Like, everyone So it's like, you got this video and everyone's supposed to be on the same like, kinda like, team to make this best video. There's like probably 10 snowboarders going after and doing it.
Speaker 7:Yeah.
Speaker 2:Yeah. But there's a little competition within that because everybody wants to get last part. Yeah. You know what I mean? Yeah.
Speaker 2:And so it's Cool. It's not a team sport. Yeah. You know? You're really out for yourself.
Speaker 2:Exactly. And like, there there are a lot of lessons that you learn especially growing up skateboarding, you know, where it's like fail fail fail fail. Like trying like to learning how to kick flip takes you six months of just failing and then and then you figure it out. And so
Speaker 3:Yeah. Then the other the other thing is these parts come together. It might be like four or five minutes, right? It's just one trick after another. Mhmm.
Speaker 3:But you're missing sometimes they'll include it, but they're missing like the blooper reel which is like sometimes you have to fall really really hard 20 times in a row Yeah. To land the one that you make it look easy Sure. And that gets cut out. So I feel like there's so many there's so many lessons out of that. Yeah.
Speaker 3:You know, a lot of successful entrepreneurs would have would have Yeah. You know, miserably for years and then they have that breakthrough Yeah. Kind of like product or feature or whatever it is. And snowboarding, it's happening on like a day to day basis Yeah. Where you have like one season Yeah.
Speaker 3:Right, to put together your part and you're kind of like racing against Yeah. Mother nature in some sense.
Speaker 1:Can you chase the winter into the Southern Hemisphere effectively?
Speaker 9:Yeah. Yeah? Yeah. So you would
Speaker 1:be how many days would you actually be snowboarding Over a year?
Speaker 2:I mean, five days a week. Like, I I ended up I would live I lived in Tahoe, Mammoth, Utah and all that, but I I ended up landing in Big Bear just because it was like, the weather's always good Yeah. For if you wanna just snowboard every day and and train. Yeah. The weather's always, you know, sunny and nice Sure.
Speaker 2:And it's not like icy or cold.
Speaker 3:Cool.
Speaker 2:So I would just go there
Speaker 1:Yeah.
Speaker 2:And snowboard every day and then fly out of LAX to wherever I needed to go.
Speaker 3:And Big Bear Big Bear is like basically one lift that you're just going around and around and there's You just practice like
Speaker 2:The best snowboard
Speaker 3:part. Fifty fifty features
Speaker 2:Oh, really?
Speaker 3:You can hit on one. So you like go, you might be hiking like a little bit on one feature. Yeah. But you're basically lapping it. So people that like don't like park go there and they're like, this is the worst mountain ever.
Speaker 3:Like Sure. You're used to skiing in Mammoth Yeah. Tahoe or Colorado. Yeah. But if you just wanna ride park Got it.
Speaker 3:Big bears. Incredible.
Speaker 2:Jordy, we're gonna
Speaker 12:have to go, man.
Speaker 1:I know. Yeah.
Speaker 3:I know. No. I went I went through I I did I did almost like fifty days, I think my junior year of college a lot at Big That's lot. I would just go up and lap lap the park. Nice.
Speaker 3:Nice. Lot of good memories.
Speaker 2:Yeah. So it's a project.
Speaker 1:It's a
Speaker 2:project that What's you're that?
Speaker 1:Where do you ski in the Southern Hemisphere? If it's if it's summer here Yeah. I imagine that even Big Bear, there's no snow, and so you have to go to the Southern Hemisphere.
Speaker 2:The only time I snowboarded in the summer was going to Mount Hood where it was like there's a glacier.
Speaker 1:Oh, okay.
Speaker 2:Do you know about that?
Speaker 1:It's still snow. I don't.
Speaker 2:There's still snow. So it's in Hood and and they have like the summer camp.
Speaker 1:Okay.
Speaker 2:And so all these kids go and a lot of pros go But and honestly, during the summer I would just skate. I would skateboard. Yeah. Okay. Yeah.
Speaker 9:That makes sense.
Speaker 3:Yeah.
Speaker 10:Okay.
Speaker 3:Okay. So the reason you're here
Speaker 1:Yeah.
Speaker 3:Is because you built Salt and Stone over the last eight years, exit partially exited this week. I don't know I don't know which I know the numbers. I don't know what numbers you're you're disclosing. But but yeah, take us through what what was the transition like? I'm assuming you didn't just like retire and immediately start Salt and Stone or was it effectively instantly?
Speaker 2:So I I had a couple ventures within that industry, like the the surf, skate, snow world. And then, you know, Salt and Stone was this idea that I've that I had had and
Speaker 3:Which is like I don't know if you can give any context Yeah. On that, but like brutal industry because every single pro and everybody adjacent also wants to start ventures. Yeah. Within the industry.
Speaker 2:Yeah. Yeah. That's true. And but I mean, there's just such a ceiling in that world, you know. Unless you're like end up being a Burton or a Quicksilver or something like that.
Speaker 2:Right?
Speaker 3:Brands have struggled.
Speaker 2:Totally. So I knew I knew I wanted to do Salt and Stone and, you know, I wanted to do something on my own, to be honest with you. I had, you know, just I had business partners and everything and and I wanted to just see how far I could go if I just went like all in 100%, like not have to, you know, worry about waking up at two in the morning and doing, you know, emails and just just going so hard and and just I could justify that if it's just like all me and I'm just like going for it. And so, yeah. And so transitioned over to that full time and it's been just the rocket ship, man.
Speaker 2:It's been such a great such a great Yeah.
Speaker 3:You guys did a 165,000,000 last year Yeah. Scaling still. What was the first product?
Speaker 2:The first product was sunscreen, actually. Okay. Yeah. So sunscreen is
Speaker 3:like a I would say like from my perspective sunscreen is like a brutal category because like a lot of people use it throughout the year Yeah. But like much fewer people actually are using it enough to like need to even be on a subscription And then oftentimes you're buying it like just in a random hotel like, you know, retail store because you're on vacation. Anyways, but
Speaker 2:Yeah. I I've always wanted to do deodorant and and sunscreen was the it just it just happened faster as far as searching for the perfect, you know, chemist contract manufacturer and and all that stuff to bring it to life. And so sunscreen came out. The the brand was profitable from day one. And then when we launched deodorant
Speaker 3:How did you sell were you just selling it? Do you see or
Speaker 2:So we had some retail on day one. So I had retailers lined up. We had, I think, about 40 to 50 of them. And so, as soon as we were shipping orders, we were collecting payment. And so, you know, I funded it out of my own pocket to start.
Speaker 2:Yeah. But but I was able to pay myself back pretty quickly and and, you know, the business 40
Speaker 1:or 50 stores? Were those individual stores or chains
Speaker 2:or They were individual stores. Individual
Speaker 4:stores. First
Speaker 2:part. Yeah. Wow. Yeah. Then it was when we launched deodorant was really when it
Speaker 1:Yeah.
Speaker 2:You know, stores started coming us.
Speaker 1:Yeah. What's the what what are the economics of, like, getting one sunscreen product? It sounds like one SKU into one of those stores. Are they buying, like, a $100 box
Speaker 4:or Oh,
Speaker 2:there was a minute. There's a minimum,
Speaker 3:you know.
Speaker 2:Like, and I from my memory, think it was, like, a case pack of 12 sunscreens came out to like $300
Speaker 1:or something. Okay. Yeah. Yeah. And then you can sell it at a markup and then Yeah.
Speaker 1:SRP.
Speaker 2:That's right. Okay. That's right.
Speaker 3:How how quickly did you realize that like my my experience having invested invested in in CPG CPG over the years is the number one the number one factor that leads to success is not like operational excellence. It's not always just the team. It's just like how good is the product. And I've seen a lot of like exceptional teams that have like all the operational chops, that have all the experience come out with a product that might be fine or pretty good, but they just don't go anywhere. They can never reach escape velocity because the product fundamentally like doesn't really sell itself.
Speaker 3:Like you can sell it, it might cost a lot to acquire customers, the sell through is not that great, retailers don't really love it. And when I first tried your deodorant after trying probably like 20 different like better for you deodorants, I was like, wow, this product is like incredible. And I've like retained across years even though I I don't even know that I've I maybe bought it on the website once, maybe bought it on different stores online or I just buy it in the grocery store but I'm like permanently retained because I tried everything else and this is just the best. It like goes on well, it smells good. And so I was just like sold off of that and you didn't need to be like the best at like email marketing to me or like Yeah.
Speaker 3:Have the best like retention flows because I was just like, it's a good product. I've tried everything else. And so I'm I'm wondering like how you how how quickly you realize that from like a product development standpoint? How much of like what is your ethos around product development? When is a product ready to actually go to market versus just still on that kind of testing phase?
Speaker 2:Yeah. And that's why we launched sunscreen before deodorant because we were just trying to get everything perfect. Right? And so we did something in deodorant that hadn't been done before, especially in clean deodorant, you know. Deodorants before didn't smell the way I wanted to.
Speaker 2:Right? Like, they they weren't they didn't have these sophisticated scents and clean deodorants didn't work or they weren't really like a pleasurable experience to use and they certainly didn't look good like Yeah.
Speaker 3:Countertop. They'd be like mint. Yeah.
Speaker 2:Yeah. It's like, you know, why shouldn't it smell as good as your perfume or cologne, right? And so just hitting it on all cylinders and making sure it's, you know, perfect. And for me, I was really making it for myself. Right?
Speaker 2:Like, what do I want? And it turns out what I wanted was what everybody else wanted. So
Speaker 3:Yeah. Did the company ever almost die? No. I love this story.
Speaker 2:It's a dream come true right now.
Speaker 3:Been fun. It's so funny because because like the the classic philosophy and and it's like, here's this time, we almost died and and in talking to you like like getting to know you just just recently, it just kinda seemed like it was just like permanently up up into the right and you you you told me one story that was like not like kind of annoying around on on the on the capital side but nothing that was like I didn't feel like you experienced that much hardship. You kinda just one shotted entrepreneurship. That's amazing. And it's so crazy because I know I know so many you started the company at like the peak of the D2C boom.
Speaker 3:Like this was the time this was 2017. Right? And so this was the time that like everyone was like Red Antler. Red Antler, Gin Lane. Red brands.
Speaker 3:Yep. So much capital flowing
Speaker 1:You should was competitors.
Speaker 3:There was like a
Speaker 1:BC backward.
Speaker 3:Yeah. There was a school on the East Coast. I forgot I forgot the name of it, but they had like an MBA program that was every Harvard. Single Not Harvard. It it was one
Speaker 1:No. There were a lot of there were lot of MBAs.
Speaker 3:Were Yeah. There was like just every person in an MBA program would be like, I'm building a d to c brand. And they were just picking
Speaker 1:there were some really good outcomes that people were tracking against like Dollar Shave Club and Harry's. And there were a number of companies where it was like, oh, they did Warby Parker. They raised money. They did the VC playbook, and it sort of penciled out for everyone. But then later people realized like, oh, those were more like one off exceptions to the rule where you get a Unilever who gets excited and buys a Dollar Shave Club for a billion dollars and maybe doesn't wind up realizing a billion dollars of value because it's just a young company.
Speaker 1:So Yeah. Tricky.
Speaker 2:I mean, honestly, it's I I feel like it's just the power of of a founder who's just gonna be relentless and Mhmm. And go up against the big guys. Right? Because I interview people from the big guys all And the I'm shocked at like how sleepy some organizations are.
Speaker 1:Right?
Speaker 2:And so if you even have a team of three people that are just relentless, and you guys know from like what you guys do.
Speaker 5:Yeah.
Speaker 2:Totally. It's like you can't compete with that.
Speaker 9:I don't
Speaker 2:care how much money you have or Yeah. What incubator you're in or
Speaker 1:Yeah. Yeah.
Speaker 2:What VC's, you know, starting you. It it's if you have a founder who's just gonna be relentless and and
Speaker 3:How did how did the approach to funding evolve? Like, because you you said you were like profitable from day one. You did raise at at a couple different points a little bit of money, but did you did you care about maintaining profitability or did you ever go go through periods of growth where you thought, okay, we can we can burn a little bit here to get to
Speaker 2:the We've next always been profitable. That's always been important. Right? I just wanna make sure the bank balance is growing. The the raises were were secondary.
Speaker 2:Right? It was me sort of taking chips off the table. The business has just been so profitable that we didn't really need to inject it with with with money, you know. So it's it's a healthy business, man. I'm blessed and
Speaker 1:and Rich capital? Not really my cup of tea. No.
Speaker 3:It's just so it's so crazy. I mean, just goes back to you guys nailed so many different elements of product and yet I know I know people that started deodorant brands during that same period that just didn't they just didn't didn't go anywhere.
Speaker 1:It's very team like?
Speaker 2:The early team?
Speaker 1:Yeah. Yeah. So so you have the idea, solo founder, but and you mentioned co packer. Did you work with a formulator? Did you hire a salesperson first, operations manager, somebody just to help you, personal assistant?
Speaker 1:Like, was the stack?
Speaker 2:Yeah. So first two first three years was myself. Just Okay. Just myself. Right?
Speaker 2:And and then for for that, it was really working with contract manufacturers chemists, but also, you know, bouncing off my internal network on like, hey, I got this deodorant sample. Like people I trusted, their taste and what, you know. Yeah. Here's the goal. This is what I'm trying to achieve here.
Speaker 2:Like let's let's test it.
Speaker 5:Yeah.
Speaker 2:So so that, myself, you know, my wife like constantly were smelling each other's underarms, you know.
Speaker 1:Is it working?
Speaker 3:In the lab?
Speaker 2:Yeah. You know, was just relentless, man. It was like we we know what we want in a product. We see what else is out there. We have all the other products on our shelf.
Speaker 2:Right? Yeah. Like to just see what what they're like.
Speaker 1:Yeah.
Speaker 2:Let's make something better.
Speaker 1:Yeah.
Speaker 2:Right? And so and then three years in, I hired I hired somebody who really took on all the ops. Mhmm. All that stuff off my plate. That's not where I excel ops and like finance and like all that.
Speaker 2:I'm more brand product. Yeah. Anything the customer sees that's what what I love. And so when she took all that and she really excels at that stuff and it was me and her for like three years, four years after that. Wow.
Speaker 2:Or like like two three years after that.
Speaker 3:Still just a couple of people.
Speaker 1:Wait. This is just
Speaker 9:the two.
Speaker 1:Yeah. And you're still two people?
Speaker 3:No. It
Speaker 2:was like yeah. Sorry. Four years or yeah.
Speaker 1:Three years with two people and six
Speaker 2:years No. Yesterday. Then we started hiring. So she came on board and and it really I saw how how it would really excel the business and I got to Yeah. Focus on what I like to do.
Speaker 2:Totally. She came in and crushed it way better than I could do on the other stuff Yep. Three p l logistics, all that stuff. And then I saw power of team. And then from there Yeah.
Speaker 2:We just started hiring people hiring people and then and then just got the confidence to keep hiring as Yeah. As you know, because the more we hired
Speaker 1:Yeah.
Speaker 2:You know, we hired the right people, then the business kept growing and growing and growing and then all of a sudden it's Sure. $106.06 and we're the best selling deodorant Yeah. Amazon and
Speaker 1:How big is the team now?
Speaker 2:Fifty fifty five.
Speaker 1:It's still really tight.
Speaker 2:It's really tight. It's really good. We have a high bar
Speaker 1:from what
Speaker 2:we bring in. Yeah. Like it's, you know, we'll interview people and I'll know within five minutes like
Speaker 1:Are you in the office or remote?
Speaker 2:No. No office. All remote.
Speaker 1:All remote.
Speaker 4:All remote.
Speaker 3:Yeah. This is like the most insane the most insane story. It's like most most of the time you get to this moment and just like the battle scarred founder.
Speaker 2:I'm telling you, man, we're blessed. It's it's been a fun run.
Speaker 1:Okay. So walk me through the product portfolio expansion, how that happens. And then are you subdividing sales reps by region or vertical or channel?
Speaker 2:We don't have sales reps.
Speaker 1:You don't have sales? No.
Speaker 2:No.
Speaker 1:Sales reps never never
Speaker 2:So here's here's the thing. Like, you gotta create a brand that the Yeah. Retailer wants. Yeah. Right?
Speaker 2:Like, all You don't wanna go and just like push something down a retailer's throat and have your sales guy knocking on the door and Yeah. That stuff. Yeah. So that was it. Like, really focusing.
Speaker 2:Like, this wasn't all just, oh, it's just happening. It's happening. It's like an obsession.
Speaker 1:Right? Yeah.
Speaker 2:Like I got I turned into an advertising expert for Okay. Like six months. All I did was want us to have the best ads, the best digital presence.
Speaker 1:Okay.
Speaker 2:Right? And I create a brand that
Speaker 1:Yeah.
Speaker 2:The retailers needed to have. Yeah.
Speaker 8:Right?
Speaker 2:And then from there, then those retailers
Speaker 1:Yeah.
Speaker 2:Need to have you
Speaker 1:What
Speaker 2:was knocking that on the door.
Speaker 1:What was that advertising process like? Were you looking? Were you reading Ogilvy? Looking at the greats?
Speaker 2:It's just looking at all Watching everything. At all the competitors
Speaker 1:Yeah.
Speaker 2:Seeing how they do Okay. Right? And and really it's like not looking at the other indie brands, like looking at the big brands.
Speaker 1:Sure.
Speaker 2:Like I've always want to take inspiration from the brands like Yep. Like the Nikes of the world that gonna be here in a hundred years. Because that's what I want this brand to be. Right? I don't want this isn't some like influencer brand.
Speaker 2:I'm not an influencer. Right? I'm not in front of the camera like Yep. This is something that I I want to be a legacy brand that's here long after I'm gone. Yep.
Speaker 10:And so
Speaker 2:those are those are the brands I look at for inspiration. And
Speaker 1:then how are you actually instantiating your learnings? Like are you directing photo shoots? Are you casting models? Are you
Speaker 12:Right now?
Speaker 1:Writing copy? No. No. Once you go through that that six month Yeah. Brand exercise, you become the expert.
Speaker 1:Are you are you like, you know, taking a project, a brand project from start to finish or are you picking an agency or hiring
Speaker 2:It was it was start to finish. So there was a time where I was picking out models, picking out photographers Yeah. Videographers Yeah. Helping with the edit Yeah. Like all that stuff.
Speaker 1:Yeah.
Speaker 2:Edits here. Yep. And then go in
Speaker 1:Give feedback.
Speaker 2:Yeah. And if there's static like still photos, I would go in Figma, drop text overlay Wow. Figure out what to say, like all that stuff. And, yeah. Mean, I just threw everything at you.
Speaker 2:And all I did, I gave up all like everything. All my hobbies Yeah. Like snowboarding Yeah. Skateboarding, like all that stuff.
Speaker 1:Yeah.
Speaker 2:Like I got into golf for a second, all of it ended. Yeah. Was just like, I'm going to go in on this. But like when you get a signal that the thing is working Yeah. Then you want to
Speaker 1:because the bank balance is going up.
Speaker 2:Bank balance is going up. You're having fun. Yep. It's like really your purpose. Mhmm.
Speaker 2:It's just like nothing else I want. Like I want to build I want to build it.
Speaker 1:What do you think about international expansion?
Speaker 2:What do I think about it?
Speaker 1:Yeah. How has your thinking evolved? What's the strategy? Is that something that a lot of companies go through this moment where they're like, maybe it's so operationally complex, it'll change the business, so let's put it off. Let's maybe wait until we're at a point where we can team up with a bigger company and through a merger acquisition Yeah.
Speaker 1:And let them bring their operational force so that you don't need, you know, a person in every locality because they will bring that to bear and you're set up for success.
Speaker 2:Yeah. No. So we've already expanded internationally and and
Speaker 1:As I
Speaker 2:you know. Sephora Canada, Sephora UK, Spacing K in The UK, Yeah. Sephora Europe we just launched. Yeah. Middle East, Southeast Asia, so on and so on.
Speaker 2:That being said, there's a lot of a lot more opportunity. Mhmm. And that's one of the reasons I chose Advent to be to be the partner here It's because they have a strong expertise in international. I feel really great about them. I mean, my my goal Yeah.
Speaker 2:Was never to just exit out Yeah. Fully and just put it in somebody's hands and let it go to shit. Like, that's not what I want.
Speaker 1:Yeah.
Speaker 2:I want the brand to I want I want my grandkids to look at this thing and be like, oh yeah, that's what my grandfather built. You know, I want it to be around. I want it to be, you know, what it was always meant to be and not turn into some, you know, discount brand.
Speaker 3:So Yeah. What what was the how how many did you have a bunch of opportunities to sell prior prior to this moment? I'm assuming people were just like kind of seeing public metrics and sell through and all these things and hounding you at different points. What was the process of like knowing when the time was was right?
Speaker 2:We had a lot of private equity reaching out. A lot of people reaching out in general. And so I I worked with Raymond James who who I love and I would just forward it to them and they told me when it was time and it was like, let's go let's go explore. Let's go
Speaker 1:Let's go.
Speaker 2:Explore the market.
Speaker 1:Yeah. Mhmm. So this was not a story where you met your acquirer like years and years ago?
Speaker 2:We we've been talking for about, you know, for several months
Speaker 1:Mhmm.
Speaker 2:Six plus months, you know. And I I really really like them, you know. And for me it's when I did the deal with Humble Growth two years ago
Speaker 1:Mhmm.
Speaker 2:I, you know, we had like 15 private equity funds to choose from. And I like them because of who they of who No. We had a lot. We a lot of bidders,
Speaker 3:you know. Yeah.
Speaker 2:Just said
Speaker 3:this is
Speaker 1:You know
Speaker 2:you know how
Speaker 3:If you were looking for, you know, the the hero's journey of founder stories, this isn't it.
Speaker 1:You turn it off.
Speaker 3:I mean it is it is it is in a way. It's missing some plot points.
Speaker 2:Yeah. There's a lot more to Yeah.
Speaker 3:Of
Speaker 2:course. But yeah, mean, it's it's just I choosing good people to work with, right? Yeah. People who can do it with integrity and and that I want to work with, and that like are aligned vision wise on like what the brand is going to be Yeah. In the future, and and let's go build that together.
Speaker 1:Yeah.
Speaker 3:What what advice have you been giving to people that wanna follow in your footsteps that this is like kind of what I feel like every CPG founder imagines. It's just like, yeah, I'm gonna be building for like eight years and I'm gonna sell for, half 1,000,000,000 to 1,000,000,000 to a strategic. And yet, the hit rate is obviously something probably like 11%, right? And over the last year, there's I feel like there's actually been a dip in new brand formation.
Speaker 9:Mhmm.
Speaker 3:At least that's what Sean Frank was was I think mentioning Yeah. On a on a I think at the end of last year. And his point of view, he's the founder or the CEO of Ridge and he's like, okay, in two years are people gonna want new brands to choose from? And his point of view is like a 100%. Right?
Speaker 3:Like there's constantly a desire for newness and that kind of, founder led product development approach that made Salt and Stone what it is today. So, yeah. What what advice are you giving?
Speaker 2:I mean, honestly, like I didn't read any entrepreneurial books or really listen to any like entrepreneurial podcasts or anything of it until recently. I just went off instinct.
Speaker 1:Like you
Speaker 2:got to fight, we're fighting for our life. My advice would be would be to go all in. You can't you can't go and be like work life balance Yeah. And like, I wanna, you know, check out at five. Because like there's gonna be someone right behind you that's gonna come and take take your place and be that brand that comes in and does what you wanna do if you're gonna just chill.
Speaker 2:Yeah. So it's like you gotta you gotta make sure you love it. You love it because that's the way you're gonna be able to, do it, you know, basically around the clock from the moment you go to sleep to wake up, you know. It's it's, something you gotta love to do and it's gotta be your passion. Right?
Speaker 2:And so you gotta just just go relentlessly and know I would say like forget the work life balance stuff, you just got to go Mhmm. Hard, you got to go all in and just use your instincts, you know. You just got to you got to be competitive and go after the big guys and don't be afraid and just go you got to go for it. Go all in.
Speaker 3:Yeah. Yeah. I like to focus on on the actual incumbents. Like a lot of people will focus too much on like, okay, who are the other new brands in my category and just actually studying like, okay, what what makes the big players actually successful? It's like, okay, massive retail distribution
Speaker 1:Mhmm.
Speaker 3:Like actual like IP on the product side, all all these things.
Speaker 2:Yeah. I mean, for for us it feels like in beauty there was such a playbook. Like every brand looked the same. All the content was the same. It was like pay the influencer, have the influencer talk about the product, post it on your social like over and over again and that's the playbook.
Speaker 2:And I I didn't want it. I didn't even know anything about beauty, really. Like, I'm not I don't come as skateboarder, you know. I don't come from beauty. I I like I like fashion brands.
Speaker 2:I like, know, lifestyle brands. And so coming in and just being inspired by, you know, the Nikes of the world, the the big brands, instead of looking at beauty, I think played in our favor. Because we came out and it was like, oh, this is different, you know.
Speaker 3:Did you do any like community marketing? Because sometimes there's a brand that I love, let's maybe it's like, I would say like if a deodorant brand was putting together an event, I don't think I'd be like, I wanna I gotta be there. But did you did you do anything that like worked, that broke through, that like was material to the business? Because I feel like sometimes it's very distracting for brands to like do IRL marketing early on because I'm I like usually will ask a founder like, okay, how many units have you sold in the last month? And they're like thousand.
Speaker 3:Thousand. I'm like, okay, then don't spend $30,000 on like some activation. Like you should just like make a product that actually sells well and then you'll have opportunities to do things.
Speaker 2:Yeah. I mean early on that was my philosophy too. It's like why are you gonna go waste money on something that you don't know is is gonna move the needle. So it's like spend it, like if our ads are going well, like, let's just pour more money into that versus like doing some pop up somewhere. But now we're at the point where those IRL pop ups, it's I think it it's good.
Speaker 2:It's good brand building, you know. And so we we do that now. We do pop ups
Speaker 3:are, I would say, different than like a lifestyle event that is just like a bunch of people hanging out.
Speaker 1:Yeah. What about owned retail, like flagship store? Have you looked into that?
Speaker 2:We're looking into it. Okay. So, yeah yeah yeah. So so we're looking at we're looking right now. Yeah.
Speaker 2:Yeah.
Speaker 11:So
Speaker 2:I
Speaker 11:would I
Speaker 1:mean, says a lot that you didn't jump into that in year two, for example.
Speaker 2:Yeah. I mean, it's, you know, it it would be tough to do that and maintain profitability. Right? And so it's like you're fighting for your life. You wanna make sure it's it's profitable.
Speaker 1:Yeah. It's balancing act. Like, you need enough awareness that you're actually gonna get upside, but then if you have complete awareness, it's probably like you're already stocked everywhere. It needs to be in the sweet spot.
Speaker 8:Yeah. Makes sense. Interesting.
Speaker 3:Such an amazing story. Honestly, it's like it's like a very unique It's amazing because it's like it's exactly what people set out to do and yet it's so uncommon to just like go up into the up into the right every month. It's
Speaker 4:like very refreshing.
Speaker 1:It's like work hard and don't get caught up in a bunch of
Speaker 3:stuff that doesn't matter.
Speaker 2:Do the things that matter.
Speaker 3:Right? And gone.
Speaker 5:You're going
Speaker 3:to be relieved. He's now a David Senra enjoyer.
Speaker 1:Oh, really?
Speaker 2:Love his podcast.
Speaker 3:He's fantastic. Yeah. He's he's getting to enjoy David Senra after climbing the mountain.
Speaker 1:That's amazing.
Speaker 2:That's funny. I hear that. It's like I hear the hustle stuff and like you gotta do this and you gotta go all in and I'm like, yeah. Like I naturally kind of do that, you know. Makes me
Speaker 3:Yeah. It works. Yeah.
Speaker 1:It's cool. But but even yeah. Mean David talks about this a lot where like even like a lot of his audience members are not listening to it and saying, oh, I never considered working hard. They're saying like It's a reminder. It's a it's a meditation on their current philosophy and then it's a bunch of other examples and just confidence to continue being different because there's a lot of people as simple as like as like focus is, there's a lot of people that feel pressure to continue their
Speaker 3:to have this super complicated seven part
Speaker 1:and then also just like the work life balance thing, like there's a lot of pressure to not be that person who's not who's who's turning down invites to the golf trip. Right. And that's and and so the Founders Podcast definitely like reinvigorates you to like add more confidence that you're not crazy. You're not the only person doing this on Earth.
Speaker 2:A 100%. Yeah. I love I love his passion.
Speaker 11:It's great.
Speaker 3:I'm gonna I'm gonna introduce you guys. You guys are gonna have a lot of Yeah. A lot
Speaker 9:of fun
Speaker 1:coming will
Speaker 3:be great.
Speaker 2:Brand wise though, we're just getting started. Honestly, it feels like that, you know? So this partnership's exciting and I can't wait to keep building this thing.
Speaker 3:Yeah. Amazing, dude.
Speaker 1:Congratulations. Thank you. Yeah. Thank you so much for taking the time to come to town.
Speaker 3:See you back at the ranch.
Speaker 1:Yeah. This is great. Let me tell you about Phantom Cash. Fund your wallet without exchanges or middlemen and spend with the Phantom card. And let me also tell you about Vanta.
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Speaker 3:Back to Our guest. A lightning round guest of sports.
Speaker 1:Yes. We have John McNeill, the author of The Algorithm in the Rooster in Waiting Room. Get a movie watch.
Speaker 3:What's going on?
Speaker 1:My IEM's back on. How are you doing, John? Hi, guys. Hey. How are you?
Speaker 1:I need to adjust my headphones.
Speaker 3:Great to meet you. Great to have you on the show. We're we're having we're having a lot of fun over here. We just had a friend of mine, Nima, tell a story. He just exited.
Speaker 1:He has sort of a one step algorithm.
Speaker 3:Yeah. His algorithm was just like focus, work hard and he one shot at entrepreneurship. He was like, I think I'm gonna just be a solo founder then I think I'm gonna build remote and scale to a 165,000,000 of revenue in eight years profitably and then
Speaker 1:asked him like, does the company ever die? He's like, no. We were all
Speaker 3:Did it ever almost die? Did come
Speaker 1:close to dying? He's like, no. No death scares.
Speaker 3:No. It was like the opposite of Elon.
Speaker 1:Yeah. Yeah. Yeah. But you know, that's the beauty of the show. We go all over the place.
Speaker 1:We like to talk to, you know, entrepreneurs who have all sorts of different paths. And fortunately, we have someone here who can tell us about Elon Musk's journey, which has been much more tumultuous. But why don't you start with the introduction and how you got to a place where this was the book that you wanted to write?
Speaker 4:Yeah. I wanted to tell the story of how, like, Tesla and SpaceX, to a certain extent, work on the inside. Like, there's and I asked Walter Isaacson when he was writing his book on Elon, like, why don't you tell the story of, like, how Jobs runs his runs Apple? Because there's a really specific way Jobs ran Apple and his, his other companies.
Speaker 1:Yeah.
Speaker 4:It's the same with Elon. There's a really specific, like, operating system and way inside of Tesla. Why don't you write about that? And Walter said, I don't write business books.
Speaker 5:Yeah.
Speaker 4:And I write character books.
Speaker 1:Character books. So he turned
Speaker 4:to me and said, you gotta write that book. Yeah. And so that's the short answer. When Walter Isaacson tells you to write a book, you
Speaker 9:write a book.
Speaker 4:You're to listen.
Speaker 1:Okay. So I I talk to me first about the process of distilling the work philosophy, how Elon works inside of Tesla, and then and then actually take me through the algorithm, the steps. Because people hear things like first principles, engineering But I think all of that is pretty vague, I think you can concretize it for us pretty well.
Speaker 4:Yeah. So basically, this framework came from two things. One was all the mistakes we made. Yeah. So you talk about tumultuous.
Speaker 4:A lot of that was self cost.
Speaker 1:Yeah.
Speaker 4:And we would do postmortems
Speaker 8:and say,
Speaker 4:how the heck did we get ourselves in this situation? And let's not do this again. And so what's the principle that would keep us out of the ditch? Mhmm. And so that's how the algorithm got developed.
Speaker 4:And it was with the goal of pushing decision making out to the edge. Yeah. And so we wanted two way door decisions, make those at the edge, here's the framework you can use. And it turned out the framework drove innovation too. And so it starts with, no surprise, simplifying.
Speaker 4:And the the the first three steps of the algorithm basically are you gotta simplify. So the first one is you question every requirement you're given. Is it a requirement of physics? Is a requirement of safety? Is it a requirement of law?
Speaker 4:Mhmm. And If you can't answer yes to those questions, then you've to consider deleting that requirement. An example of that is we were trying to sell $100,000 things online. Nobody had done that before, sight unseen. And it took 64 clicks to buy Tesla, and 44 of those clicks were in the auto loan and auto lease documents.
Speaker 4:Woah. And it turns out an auto loan document is 12 pages of paragraph after paragraph after paragraph Yeah. Of how the bank's gonna the bank's gonna basically kill you if you
Speaker 3:don't pay. Yeah.
Speaker 4:And and so I asked the lawyers, can you come back to me and tell me how many of these paragraphs are a requirement of law or regulation? Mhmm. They came back not much longer, not much time later, they said none. Woah. And I said, what do you mean?
Speaker 4:They said none. All of this stuff, all these paragraphs were inserted by well meaning corporate lawyers who are trying to save their company's necks. Mhmm. And none of this is a requirement of law. And I said, literally, I could get down to a one page or maybe a one paragraph loan that said, here's how much the car is.
Speaker 3:Yeah.
Speaker 4:Here's how much the interest rate is. Here's the time period. Here's the monthly payment. That's four sentences. And so, like, we did goofy stuff like that.
Speaker 4:We would question a loan doc.
Speaker 9:Yeah. And it
Speaker 4:turns out that if you eliminate eight forty four clicks, you sell a lot more of these $100,000 things online.
Speaker 1:Yep.
Speaker 4:And so that's the first step of the algorithm is just question every requirement. Second is that you make it you make the new the new thing or the new product as simple as possible, fewest steps, delete everything that the customer doesn't pay you for.
Speaker 1:Yeah.
Speaker 4:And then you speed it up. And because speed reveals all kinds of warts. And if you can make something go fast, it's gotta be simple and it's gotta be really good. So good, fast, and cheap is actually false. You can get all
Speaker 5:three. And
Speaker 4:then this is this sounds nuts coming from a Silicon Valley perspective, but you automate last. Mhmm. And it's not so nuts when you consider, like, how DoorDash started five Stanford CS majors in a dorm room. They put up a PDF with a phone number so that they could figure out the workflow of the business before they automated anything. Same with the Amazon guys.
Speaker 4:They were they put up a web page to order books, but they had no fulfillment capabilities. So they ran down the street to a bookseller, bought the book you ordered, dropped it in a box so they could learn the business. And we found this time and time again. When we automated first, like the auto the model three production line, we automated it first and it never worked. And so the only way we could save the company was build a tent outside the factory and start building Model threes by hand.
Speaker 2:By hand.
Speaker 4:And we learned automate last over and over and over again, and it became religion. So that's the five steps to the algorithm.
Speaker 1:Yeah. There's been a lot of speculation about the next Tesla vehicle. Somebody was proposing a threes a car with three sets of doors for big families.
Speaker 3:That does sound simple.
Speaker 1:Roadster that flies. There's the cyberbond, the sir the Cybertruck turned into a Suburban.
Speaker 4:Yeah.
Speaker 1:What's the product that you want?
Speaker 4:I do want the Suburban.
Speaker 1:Yeah.
Speaker 4:Here's why. Like like, when you go to when you go to Tokyo or you go to China, they have these, like, really tricked out minivans.
Speaker 1:Yeah.
Speaker 4:And they have every feature. It's like sitting in the best man cave ever.
Speaker 1:Mhmm.
Speaker 4:And I want that car.
Speaker 1:Yeah. I think that'd be a good one. Yeah. What do you think translates from a hardware company with very, very sleepy incumbents, thinking of the car industry, the space industry? What translates to software development, artificial intelligence, app building, social networking?
Speaker 1:What's going to transfer of the algorithm of the Elon way of working and what might not?
Speaker 4:That's a really good question. I think what transfers these these principles transfer of, like, simplify and kinda go slow to go fast Mhmm. As you're developing, like, the software. Basically, your first your first architecture, what the software's gonna look like and what it's gonna do. Mhmm.
Speaker 4:And really determine, like, what are the key what are the key features or value we're going to ship? Mhmm. And just concentrate, like, heck on that. Like, keep it simple first. And and and a lot of people have talked about this as a minimum viable product, but I think that's still really true.
Speaker 4:And then try to make the product as perfect as possible. Yeah.
Speaker 2:And like
Speaker 4:the like you take Claude right now. The reason Claude code is winning is because it is the best. And that came out of long discussions about how to simplify the architecture so it could actually do things that codecs can't do, that cursor can't do. And and I think that's the piece that translates. Like, simplify down to the two or three things you absolutely have to crush and then literally go crush those.
Speaker 1:Yeah. Within Tesla, is there a a noticeable bifurcation between the software and engineering orgs and the hardware engineering orgs?
Speaker 4:No. One of the things that Elon believes in is hiring what he calls orthogonally, which means basically that nobody has any experience in the industry. Because he doesn't want you coming in with a preconceived, like, set of frameworks or preconceived notions. And so we were all software people. Like, I was a six time software serial entrepreneur.
Speaker 4:And I we didn't know I didn't know anything about hardware. I'd never been in it before. Mhmm. And so we approached every problem from a software first perspective. So an example of that is, like, if you say, okay, to your last question, like, what do we have to crush in the car business?
Speaker 4:Well, we've to get an autonomous car. Okay. To run software in an autonomous car, the requirement of that is we have a single chip. Because if you have more than one chip, now you've introduced latency and syncing and all the sort of stuff you have to do. So we could only have one chip.
Speaker 4:And that's the software first kind of mentality. We're competing with people who are hardware first, who have 18 to 36 chips running in their car, which means they can never deliver autonomy because they're not thinking about software first. And so that software mentality gives Tesla an edge kind of every day of the week. Mhmm.
Speaker 1:A lot of people have been speculating about demotivation from SpaceX liquidity as the company goes out at a 1.5, maybe $2,000,000,000,000 valuation. There's a lot of engineers who are great. They're about to have a lot of liquidity and maybe they will decide to retire is basically the thesis. But we've sort of run this experiment with Tesla. Was it like post IPO?
Speaker 1:What do you have a read on how the culture changed? Did did everyone remain interested in the mission? Or were there some people that actually did choose to sort of step step step back?
Speaker 9:Yeah. I think
Speaker 4:the majority of people that were there for the mission, they're mission oriented and and the size of their bank account over time grew, but it really didn't matter
Speaker 1:Yeah.
Speaker 4:To them. They were showing up every day to solve just to solve the next thing that was There in the were some people that cashed out along the way, but they were kind of the minority. Sure. And one of the things that Elon did was something that I had done in each one of my startups and a lot of entrepreneurs do, which is you kind of starve the balance sheet. You raise only as much capital as you need Mhmm.
Speaker 4:Because the the first principle is you don't want your company to go soft. And when people see a big number on the balance sheet, you're not close to death and people aren't like really really moving as fast as they can or aren't as motivated. So even after we were public, we operated Tesla on a quarter's worth of cash, believe it or not. Woah. And I kept saying to Elon, like, I would like a little breathing room.
Speaker 4:He's like, no. No. Like, we gotta like we gotta think about this, like, when we're young entrepreneurs, like, if you're close if you're two steps from death, you operate differently. So but I was like, man, we have a quarter's worth of cash, but we have seventy days of payables. That means we have less than three weeks of cash.
Speaker 4:Like, this is tight. But that kept everybody sharp. And what we started to worry about was post, like, model three and model y when we actually started to generate cash on the balance sheet, like, how we could how we could make sure the company stayed sharp. Mhmm. And SpaceX has had
Speaker 1:this
Speaker 4:advantage of that for a long time, and Gwen and Elon are gonna have to manage this now post IPO. But my sense is most people are there for the the experience of working in a Musk company is that you are literally on the biggest challenge you've ever faced in your life and with the best people. And you are you're doing the best work of your life. And so that's what keeps most people engaged. It is not the balance in their Yeah.
Speaker 4:Bank account.
Speaker 1:How do people stay engaged and so laser focused on like a singular mission when Elon has like a new hot thing every six months maybe and there's like it feels like if he were to share that cultural tenant of like try and solve every problem that humanity faces with the rest of the organization, you would have a very scattered organization. But that's not what we see. So how does that dividing line happen?
Speaker 4:So like I I started to get the entrepreneurial itch a few years in. And so I went to him and said, hey, look, you know, you're you're starting OpenAI, you're starting Neuralink, you're starting The Boring Company, like, gotta scratch this itch too. Yeah. And he basically said, you can't because because I gotta have you focus so I can go do these things.
Speaker 5:Sure.
Speaker 4:But then it was pretty cool. Like, we designed this way that I could scratch my entrepreneurial itch, which was just doing it inside of Tesla. Yeah. So we invented mobile service. Mhmm.
Speaker 4:We invented insurance Right. Inside of Tesla, which now is a third of the cash flow. So I got to I got to scratch those itches, but you start to learn, like, Gwen's job is keeping SpaceX focused. My job was keeping Tesla focused Yeah. So he could go exercise that da Vinci side of his personality.
Speaker 1:Yeah. Yeah. That makes sense. Jordy, do you have anything else? This is great.
Speaker 3:Where where are you investing mostly these days outside of the Elon orbit?
Speaker 4:Yeah. So we start companies from scratch at my venture firm and we're investing in, I would say, the intersection of AI in the real world. So what that means is, like, we pulled this amazing team out of Tesla that did the supply chain automation and optimization, and they've created a business called Atomic that is just slaying it. We create we created this really cool platform for restaurant hospitality where at any restaurant, you can get up and walk out without having to pay the check Mhmm. Because it already knows who you are and what you eat.
Speaker 4:Yeah. So every restaurant becomes like a London supper club. We're so we're we're deploying AI
Speaker 3:Which company which company is that?
Speaker 4:That's called Zumie.
Speaker 3:Okay. I I know a friend of mine has another company competing in that in that category. Same same pitch.
Speaker 4:Yeah.
Speaker 3:And Yeah. But I'm sure he'll be devastated to know that a Musk adjacent company is.
Speaker 4:Yeah. There's room for more than one of us. I like having competition. And that's a really tough technical solve, actually, to be able to pull that off. So it'll be protectable if your friend's company's working on it and there's room for both of us to swim in that big ocean.
Speaker 3:What's your advice for American auto manufacturers? Because it feels like they're just, you know, they're behind in autonomy, they're behind even from a feature standpoint with a Tesla or BYD.
Speaker 1:BYD. I see these electric cars out of China where it's like has 1,500 horsepower. It's as big as a Suburban and it drives itself and and then you're like and it'll cost $35,000. You're like,
Speaker 4:that is impossible.
Speaker 1:How can we possibly compete with that? So, yeah, what should American automakers broadly do?
Speaker 4:Well, this is a real it's a real challenge that I that I'm a part of because I'm on the board of GM now trying to help them navigate this. And and so, like, when I walk around the streets of Tel Aviv or Mexico City or Paris, you see all the BYDs. Yeah. It's your point. These are these are not crappy cars.
Speaker 4:These are really good cars and at a really good price point.
Speaker 3:Yeah.
Speaker 4:They're at that price point because the government subsidizes the heck out of that business in China. You get free factories, free labor, free parts basically. So so you can sell stuff super cheap. Mhmm. But that is
Speaker 3:What a real is their to your knowledge, what is the long term thinking there? Is it effectively like an employment program where they just want Yeah.
Speaker 1:Or are they looking at it like CAC where they're like, we'll lose money for a decade, then we're gonna make it money for
Speaker 3:four Or like, what what are the kind of pillars do you think of their strategy overall?
Speaker 4:It's a combination of both of what you guys just said. So on your point, Jordy, it is the way that you keep a single party system in power is you provide jobs. Mhmm. So job
Speaker 1:Yeah.
Speaker 4:Job growth is the is the one metric that every level of government gets bonus on there. You imagine, like, the American government, everybody gets a bonus that doubles their base salary, and that one metric is GDP growth? That's what you have in China. So they start with that framework, and they say we gotta provide jobs. And the way we're gonna provide jobs is every five years, we're gonna announce five industries that we're gonna enter and dominate.
Speaker 3:Mhmm.
Speaker 4:And and the second well, the third pillar of that is then that they subsidize a 100 market entrants to come in, and then they let evolutionary biology take take its place. And may the best person win. And so they get down to the top three or five competitors that are winning. So in this case, it's like BYD, Geely, Neo. And they say to those competitors, now we're gonna consolidate all of the capacity that we've created with these 100 companies under you three.
Speaker 4:You get it for free. And your job now is to export and dominate these markets. So they've gotten subsidies to get started, subsidies to operate, and now they're getting capacity for free. And they've proven themselves as the winners in a hypercompetitive market. And now they go enter the rest of the world where the competitors aren't are soft.
Speaker 4:And and that's their formula. And they run this formula across all kinds of industries. They run it in solar panels. They run it in TVs. They run it in bicycles.
Speaker 4:They run it in electric cars. And and it's a very powerful flywheel they create. But those are the four pillars.
Speaker 3:Mhmm. They're also starting to buy legacy brands. Have you have you seen this? That that's where that's where it gets really interesting.
Speaker 1:I feel
Speaker 4:like Volvo.
Speaker 1:I feel like
Speaker 4:Volvo. Yeah. So like people talk about are Chinese cars coming to America? And my answer is they already are. It's called Volvo.
Speaker 4:Yeah. Yeah. Volvo is owned by Geely. That's right. Yeah.
Speaker 4:And Zeeker is providing now the new the new Waymo's that are hitting the road because Jaguar stopped the I PACE production, so the new cars you're gonna see are Zeekers. So we already have two Chinese cars that are that are on the roads in America. This is not like a theoretical. It's an actual thing that's happening.
Speaker 3:We interrupted you as you were explaining, like, you know, how you're kind of advising GM and and what what American manufacturers need to do to to actually
Speaker 1:Or or even America broadly.
Speaker 3:Yeah. Considering they're coming for every every physical
Speaker 1:Like, should we fight back or is this like Happy Meal toys where it's like not that big of a deal that they're up there? I think it's big deal.
Speaker 4:It's like I
Speaker 1:think it's a big deal.
Speaker 4:So the auto industry is 5% of GDP in The US but let's like consider you're in Germany, it's 29% of GDP or it's close to that in Like you can't let your car business, your car industry go because there's so much GDPs tied up in it. So that means we gotta compete and and competing means we gotta have like super compelling product and we've gotta have super low cost manufacturing. And what's a little scary is like Amazon invented this thing called the lights out warehouse. And it's lights out because the warehouses are so automated, there's no humans, so therefore you don't have to turn on the lights. The Chinese already have lights out factories.
Speaker 4:So, like, Xiaomi has a lights out factory where raw materials come in one end of the factory, there are no humans in the factory, Finnish cell phones come out the other side.
Speaker 3:That's crazy.
Speaker 4:And there's like a couple of electricians and plumbers keeping the thing running, but the plant manager is actually an AI that's running the plant. Yeah. That is something America's got to get ready for. And to get ready for it, we need a bunch of manufacturing engineers. And Tim Cooks says this all the time, you could gather the best manufacturing engineers in the country and they would fit in the auditorium at Stanford.
Speaker 1:Yeah. If
Speaker 4:you gathered all the manufacturing engineers in China, they would fit in three in three Stanford football stadiums. Like, the we we are so outgunned on the manufacturing engineering and that's where we've got to, like, shift this fast. But that's gotta be a demand pull from places like GM and Ford and others who
Speaker 1:are Yeah.
Speaker 4:Moving diligently
Speaker 1:And in this is the answer like literally Stanford? Like does Stanford need to be training those folks specifically or is it more money for trade schools or online
Speaker 4:courses? All the above. Like yeah. It's all the above. Like, Stanford needs to be training them, so does Purdue, so does Illinois, so does Michigan, so does Penn, etcetera.
Speaker 4:Like, we gotta, like, we gotta put a focus around this and really bring supply chains into The US Mhmm. So that we can have a fighting chance of not only building super automated factories, but but super efficient supply chains next to
Speaker 5:them. Mhmm.
Speaker 1:Well, hopefully, we can execute. Thank you so much for letting us laying down the algorithm and showing people how it can be done. And we appreciate you taking
Speaker 3:the time Yeah. Fantastic. Nice to meet you, John. Feel free to pop on the show whenever you feel like it.
Speaker 1:Yeah. We'd love to talk
Speaker 4:to all. Same, guys. Really good to talk to you. I'm a big fan, so thanks for having me
Speaker 1:on. So much. We'll talk to you soon, John.
Speaker 3:Great hanging.
Speaker 1:Have a good one. Let me tell you about Plaid. Plaid powers the app to use to spend, save, borrow, invest securely connecting bank accounts to move money, fight fraud, and improve lending now with AI. And without further ado, we have Karri from Linear in the Restream waiting room. Let's bring him into the TV and Ultragon.
Speaker 1:How are you doing?
Speaker 12:What's going on? I'm doing great. How are you guys?
Speaker 3:We're doing well. You've been stirring up the Internet this week.
Speaker 1:Cooking.
Speaker 12:Cooking. It's my favorite hobby. It's like it's definitely like something I like to
Speaker 8:do. Yeah.
Speaker 3:Well, we're excited to we're excited to talk about it. So Yeah. Take us through kind of the the announcement this week Yeah. What led to it Yeah. All that stuff.
Speaker 12:Yeah. So so this week at Lunar, we we kinda like wanted to share more about like what is our thinking and kinda read on the market and and in our category which which kinda historically has been this issue tracking project management. And like I wrote this essay that kind of like tries to like talk through some of these topics and it starts with this somewhat like controversial statement saying like issue tracking is dead. And I think what I was trying to do with it is to really like shake industries and everyone's thinking around this. And I think what still is happening is that how companies and software companies operate, they still are operating with these old assumptions and, like, kind of processes that are built around the old world, like, the world before AI agents and and and that kind of development workflow.
Speaker 12:So I think, like, historically, user tracking has been this ticketing task system for engineering. So, basically, engineer doesn't do anything unless there's a ticket. And then, like, you have to, like, create the ticket. Someone else creates it. It goes goes to engineering.
Speaker 12:There's some negotiation happening. Eventually, the engineer does something with it. And it's kinda like a it's almost like this line cook system where it's like someone yells, we need fries and and steak, and then then in the kitchen, they start cooking it. Yeah. And it's it's kinda dumb, and, like, I I always thought it was dumb, but it's it's, like, how a lot of companies tend to operate.
Speaker 12:And the second problem, I think, is that these legacy platforms, vendors have kinda, like, created this this kind of idea that it it should be complex, and, like, they kinda encourage the complexity and the overhead of this process. So we have customers coming for to us and, hey. We wanna switch to linear. But then they say, like, oh, we have this, like, bug tracking process, which is 40 different states, and the bug report needs to have these 30 different custom fields. And then they asked, like, can you do that?
Speaker 12:And we our answer is, like, I don't think you we should or you should we shouldn't either. Like, the point of moving to linear is actually rethink some of this stuff, like
Speaker 7:Yeah.
Speaker 12:Is this still necessary? Yeah. And I think, like, this becomes even more clear now is that if the agent can fix the bug in five minutes, but your bug reporting process or the the process of running through that process takes a week, it starts to be look pretty silly that, like, the actual work takes a lot less time than actually running through the whole process.
Speaker 3:Sitting here being like, I don't wanna be, like, part of the bottleneck.
Speaker 12:Yeah. And so I think, like, my thinking here is, like, I think we can start kinda compressing and simplifying a lot of these workflows. Even I know that companies do need some process where it's like compliance security or some some other reasons that you just can't remove. I think, like, the agent can, like, really handle that. But, like, this this statement was really for us to say that we I think we should all, like, kinda look into mirrors, like what are we doing here, and like why, and do we still need to do these things?
Speaker 12:And from our perspective, our perspective we don't. I think we should start looking into different problems, and the different problems is like, yeah, like how do you work with the agents? And I think the problems I noticed today is, one is like the context problem, like how does the agent know what to work on, or like how do you set up the agent to work on with the right context? And we think like Linear can be that or is already that contact system for humans, so it can also be the contact system for the agents. So Linear collects custom like, user bugs.
Speaker 12:It collects, like, user feedback or customer requests. There's also kind of all kind of projects. You have goals, initiatives. There's a lot of context of, like, what is your product? What is the state of your product?
Speaker 12:And also, like, what is the future state of the product? And then if you can bring that into the agenda, like, workflow, I think the agents can work a lot better. So I think at Clean Air, we wanna, like, look into that category of, like, context problems and try to, like, find solutions there. And then the second thing second second problem, like, I noticed is the the agency part that a lot of the systems historically have been quite static, like it doesn't do anything unless you move that thing from one state to another. And we think like now the system should be, with this right context understanding of what you're doing and what your team or product is doing, it could start moving the work on its own, like it should become more self driving.
Speaker 12:And so, for example, this bug reporting example is like, that if the bugs get reported in linear, they should just like, the linear agents should look at it, like start debugging it, connect to other tools, make a fix, then eventually at the end, like, in a human to like, hey, can you authorize or verify my fix? And so then this like 40 state bug tracking process is now like one state because the human only has to like verify it. And even if it's not correct solution, you still have the option to fix it and work with the agent, so I don't think we can one sort problems all the time, but that's just like the direction we want to go. It's like, is there work that Linear could do automatically that the humans don't even have to look at, at least at the very beginning of the state, and Linear could start doing it for you. And the last thing I'll say, like, I think that we are launching several things over the weeks that we launched this, like, Linear Agent, which is an ex antic surface for Linear, you can ask things, you can, like, how I use it is I get feature requests from people, then I go there, it's like, I wonder what other customers are saying about this problem, and like, can I understand the underlying need?
Speaker 12:Mhmm. Because I think the problem today starts to become, like, if you can build anything fast, the problem is not building things anymore, the problem is deciding what to build and why, and even understanding what is the problem. So I think like linear can be a system where you can understand the problem, shape the problems, and then pick a direction or solution, and then start working on the the the, like, have the agent work on it with that, like, correct context and direction. And then, like, in the in the future, we'll also, we're working on our own coding agent, which I think there was some, like, confusion about it, and I think, like, the goal there is, like, it's it's it's more like a wrapper around this existing coding agents. Mhmm.
Speaker 12:And what do we do there is, we can, like, dog food our own platform, which we have this, like, agent platform that third parties, like Codex and Devon and Cursor have participated in and, like, they have their agents in there. But, like, because we are building our own, we can kinda, like, create the capabilities and the tooling and the hooks or whatever we need better because we also notice the opportunities as we build these things. And we also just generally see that there is probably like situations where the linear coding agent can be better than some of the like generalized coding agents.
Speaker 3:Yeah. I I think I think it's I think it's really smart to to you know, if if Linear had been started, you know, ten years prior, you would have been able to just, like, add like, do the the legacy the legacy SaaS playbook of, like, let's just try to add a lot of seats every month and compound forever. And that was a beautiful existence. And now our entire industry is like disrupting
Speaker 1:Sure.
Speaker 3:Itself. And so you can choose think Toby Lutke on David Sendra's
Speaker 1:show Yeah.
Speaker 3:Was talking about like every category is up for grabs. Yep. There's gonna be an AI native company in every single category. You can wish that this wasn't happening or you can decide to be that company and the mature hard thing to do is like admit that things are changing, embrace it, rally the team around it, rally your customers around it. Yeah.
Speaker 3:I think it makes a lot of sense. How do you think taking a step back, like, how do you how what's your view on how, like, enterprise software categories are evolving? Because I think a lot of people are are kind of, like, waking up to this idea of, like, everybody wants to be at least in software development, in the in the pipeline of tools, everybody now wants to be the same kind of like the same thing. You wanna be the place where people go to, you know, encourage the machines to do things. Right?
Speaker 3:And kind of Mhmm. Do that. And so and how do you see Linear's role evolving? You know, you've been very open to different agents leveraging the platform. I'm not sure, you know, you you'll continue to be.
Speaker 3:But, but, yeah, how how are, like, software categories evolving in this era of, like, you kind of need to be selling. Everyone's trying to sell work.
Speaker 12:Yeah. I don't I don't think I have the complete answer there. I think there's a lot of nuance, and it's, like, depends on the markets. I I do think, like, that's that feeling of everyone's building the same thing. It's I think partially comes from a lot of people are noticing the same primitives and and from, like, the same kind of blocks or pieces of this puzzle.
Speaker 12:And then they're trying to, like, figure out, like, what is the right setup for that, or, like, what is the right order of those things, and, like, who is actually the best thing the best the best one to, like, own part of that puzzle. And I think that's, like, the the feeling probably there. But I think, like, my feeling my my thinking is that it's similar to earlier software days too. It's like it's like when people invented databases, now everyone's like, why is everyone making databases? Yeah.
Speaker 3:Like, well, everyone system of record. Yeah.
Speaker 12:Yeah. So I think there is like a lot of, like, there can be a lot of shared primitives across products. It doesn't mean that every product still like has the same outcome or like the same advantage or something. And I think like we don't know like how this will all play out. And I think the other sentiment I'm seeing is that there's this like idea of like let's throw everything out, like no sass at all.
Speaker 12:And I think that's an option, but I I think, like, you can do that, and then you start, like, inventing stuff back from that first principles, and you maybe end up, like, in the same spot again. And I think, like, that's what we've seen in our space. It's, everyone's running their agent, and now they have 10 agents running. So then they put them on a Kanban board, which Linear has, and then it's like, oh, now I invented the agent orchestration. Like, no, you invented the Kanban board, which has been around for thirty years, but you just put the agent on the Kanban board.
Speaker 12:So, like, kudos to, like, connecting those two topics, but, like, it's not like that some things don't need to be reinvented. Like, some things can still work, but, like, if you just throw everything out, you kinda, like, start from the beginning and then I think it's a long journey to like figure everything out again.
Speaker 3:Yeah. I got a I got an investor update last year that was just like, workflows have been rebranded in the product as agents. And that was a funny moment because I was like, okay. Some of this stuff is is, you know, very new approach to software, but some of it is just kind of re some of it is just repositioning.
Speaker 1:I have one more question, but first, we gotta give a shout out to Russell Smith from Y Combinator summer twenty twelve. We're not beating the YCS12 mafia allegations on the show since I believe we all went through that one. But my last question is in we talk about linear every day on the show. 75% of enterprise work enterprise companies are using agents. Have you talked to the other 25%?
Speaker 1:Like what is unique about those businesses that they haven't jumped in? Are they just like asleep at the wheel? Or is there something unique about their business where they're sticky and for security reasons or some other reason Or they're
Speaker 3:using agents but haven't integrated them Maybe.
Speaker 1:I'm just able Yeah. To take because It feels like, you know, this is such everyone understands how powerful agents are. Why is it not a 100%? That's always an interesting question.
Speaker 12:Yeah. And to clear the status, like 75, 77% of, like, linear workspaces have cloud agents.
Speaker 1:Okay.
Speaker 12:So as a there's a difference between cloud agents and the local agents. So we don't track the local agents.
Speaker 1:But Okay.
Speaker 12:So I think the couple things, like the cloud agents are still somewhat like less developed today. There's like environment problems where, like, if you have a massive system or some kind of large company system, the environment starts to become kind of complicated and the industry hasn't fully solved it yet. I think it's a solvable problem and many companies are kind of like solving it with the sandboxes of, like, you start a sandbox, the agent has the right environment and can do the things. So there's like, just like a timing piece. A similar timing piece, not everyone has like decided to do this and like go into the cloud agents.
Speaker 12:The third piece, is kind of the stupid reason, is the policy. So companies are still procurement, IT and securities, they'll run a lot of like decision making when it comes to tooling in companies, and there's a lot of companies that like, employees ask, can I use the agent? And they say, no, you can't. And they don't have, like, a reason for it or, like, we have to evaluate it. And that evaluation takes months.
Speaker 12:And I think, like, what the companies need to look into here is, like, what this has to change. Like, you can't, like, like, the the industry is moving so fast, so you cannot have, like, a month long like, many month long processes to evaluate every single new tool. Up to, like, I think, like, the the security standpoint is, like, valid, but, like, you you kinda have to, like, figure out a new way to think about the security and not, like, block new tools. So I, like, wanna hack to this. I've seen in some companies is, like, they have this friction form.
Speaker 1:Mhmm. Oh.
Speaker 12:So engineers that wanna use, like, feel friction Yeah. And that they wanna use new tools or AI, they form a fiction form, like, file a fiction form, and then that escalates it
Speaker 3:Mhmm.
Speaker 12:To the higher leadership. Mhmm. And then it makes a SLA that has to be resolved in a week or in ten days or something. Yeah. And so you force the hand of this, like, procurement IT and security people to, like, do something about it.
Speaker 12:Because the incentive, a lot of times for these jobs, it's like you don't wanna rock the boat, so you don't wanna change things if you don't have to. Yeah. So so then, like, the companies do I think that leadership should recognize that, like, we do have to, like, allow people to to use new tools, Otherwise, we'll Yeah. Kinda fall behind here.
Speaker 1:Well, thank you so much for taking the time to come and give us the update. Always good to hear from you, and we'll talk to you soon. Have a good rest of your day.
Speaker 3:Awesome. Awesome progress.
Speaker 1:We'll talk you soon. Goodbye. Yep. Bye. Let me tell you about Gusto, the unified platform for payroll benefits and HR built to evolve with small and medium sized businesses.
Speaker 1:And without further ado, let's bring
Speaker 3:in our next guest. Yeah. It sounds like a lightning round.
Speaker 1:Yes. This is the land of lightning round. Tell me.
Speaker 3:What's happening?
Speaker 1:Good to meet you.
Speaker 3:You're here with us. This is TBPN.
Speaker 1:Please, introduce yourself and the company because
Speaker 3:not only have
Speaker 1:we not heard of you, but I think you're coming out of stealth. No one's heard of you or at least this company.
Speaker 13:No one has heard of us. I'm Demi Klari. I'm the cofounder and CEO of a company called Neon Bio. Yeah. In a nutshell, what we do is we genetically engineer chickens
Speaker 1:Okay.
Speaker 13:To produce medicines inside their eggs.
Speaker 1:Wow. How did you get into this? What's your backstory?
Speaker 13:So I'm an aerospace engineer, so naturally, I went into biotech. Yeah.
Speaker 5:Good luck
Speaker 1:in chickens.
Speaker 13:My my cofounder is an evolutionary biologist as well.
Speaker 1:Okay. You know,
Speaker 13:I've always been involved in manufacturing of complex things.
Speaker 1:Mhmm.
Speaker 13:Planes are are sort of one complex thing.
Speaker 12:Mhmm.
Speaker 13:These proteins, these medicines are also similarly complex in different ways. You know, as as some of the the problems facing drug drug pricing and Yeah. Sort of the onshoring of of of manufacturing had come to bear over the last few years, seemed like a good place to hone my my skill set.
Speaker 3:So what do you think? Yeah. Where where did the original kind of concept come from? Did it did your was your cofounder you know
Speaker 1:Making an omelet. Hanging out. Like, this will cure cancer.
Speaker 13:You know, we They're like
Speaker 3:These lay these chickens, they lay eggs every day. We gotta put something in them Yeah. Outside of
Speaker 13:You're not far off. I mean, we all know chickens to be sort of incredible sources of edible proteins, you know, the ones that make your omelet. Most new medicines today are complex molecules. They are proteins themselves. Mhmm.
Speaker 13:And so the way they're manufactured today, you know, prior to Neon Bio is, you know, that it's expensive. It's sort of reliant on these complex, fragile global supply chains, and and it sort of makes these drugs inaccessible to most people. But chickens happen to be the universe's best protein factory. You know, they've been honed by two hundred and fifty million years of evolution to efficiently turn very simple inputs, grain and water, into complex outputs, these proteins inside their eggs. And so we harness that same system to produce, you know, some of the drugs you might see advertised on on TV like Humira or Keytruda.
Speaker 13:Wild.
Speaker 1:So so, I mean, how far away are you from actually doing a partnership with a biotech company that owns intellectual property around a particular protein? It feels like there's this dance between like you need to genetically engineer the chicken, make the chicken, get the eggs, extract the protein, like actually get into the drug that sounds like years, but then there's only there's ticking clock on every drug that's out there in the IP landscape. So how do you marry those two?
Speaker 13:Yeah. So one of the things we announced today really is, is this large commercial deal that we signed, with a partner to bring up to three drugs to market.
Speaker 1:Up to three drugs. Okay.
Speaker 13:And and and the drugs that we're focusing on to start with are are known as biosimilars. So they are drugs that, you know, have existed. We know they work. They're on the market. They can cost in the thousands or tens of thousands per dose.
Speaker 13:Mhmm. You know, that that's super expensive. We are starting with those because they're they're known molecules. We're not taking on molecular risk there. Mhmm.
Speaker 13:Over time, we're developing technologies that will make this process way faster, much more efficient, increase the yields. But for now, we have a very good market in in in the biosimilar space where Mhmm. There's huge demand for these drugs. Coupled to sort of the cost aspect, which is a sort of a big part of big part of our value proposition is that our What?
Speaker 3:How many doses from an egg? Are we talking what is it? Single shot or can you get potentially multiple doses and then because I'm I'm just thinking at some point you're just scaling a facility that has chicken in it.
Speaker 13:Chicken. Yeah. We we scale by breeding chickens. That's one of the advantages here. Right?
Speaker 13:It's it's pretty linear, and we know how to do that. To just give you a sense for scale, you know, with a few thousand birds, and and to give you a sense of what that means, you know, a small farm is anything below 25,000 chickens. Wow. So with a few thousand, we can produce the global supply of a drug like Humira. So a chicken can treat, you know, depending on what the what what what what the medicine is, anywhere between 10 to a 100 people in a year.
Speaker 1:Wow. That is remarkable.
Speaker 3:That is insane.
Speaker 1:Do you not have a chicken sound effect
Speaker 3:on to text the team.
Speaker 1:We need
Speaker 3:chicken sound effect.
Speaker 1:Play the rest of the barnyard.
Speaker 3:We got the ball.
Speaker 1:We'll we'll ask. Is there a plan to make horses work for us? Goats for us? Sheep? Yeah.
Speaker 1:Are you staying in chickens forever, or will there be other animals? Okay. Eventually. Okay. Well, call us back.
Speaker 3:We need horses to save to save us from other from other ailments.
Speaker 1:There are actually drugs that come from from horses as well.
Speaker 3:My my you know where my mind's gone?
Speaker 1:Premier Inn.
Speaker 3:Partnership with Varda. Varda. Yes. Space chicken.
Speaker 1:Space
Speaker 3:Space chicken.
Speaker 2:I mean,
Speaker 1:there's a I I was thinking about that when when you said air aerospace to bio, there is an there is an interesting overlap there. Well, thank you so much for taking
Speaker 13:on the line.
Speaker 3:Yeah. Thank you, guys. Yeah. We're we're having a lot of fun, but this is this is very this is one of the craziest pitches.
Speaker 1:I think I think Caffeinated Capital is I think an investor in both companies as well. Right?
Speaker 13:That's right.
Speaker 1:Okay. Right. Raymond Raymond loves making making drugs in difficult ways but potentially extremely valuable ways.
Speaker 3:No. That's very cool, Demi.
Speaker 1:Very cool. Thank you so much for coming on.
Speaker 13:You, guys.
Speaker 1:This is great. We'll talk to you later. Bye. Let me tell you about vibe.co. We're d to c brands, b to b startups and AI companies advertise on streaming TV, pick channels, target audiences and measure sales just like on Meta.
Speaker 1:And without further ado, our next guest Mikey Shulman from SunO. He is the cofounder and we cannot wait to talk to him about AI generated audio. Let's bring Mikey in from the Restream waiting room into the TBPN UltraDome. Mikey, good to see you again. Thank you so much for taking the time.
Speaker 3:Welcome back.
Speaker 1:One of the most interesting do you call yourself a NeoLab? Is that a fair characterization?
Speaker 8:Great to be back. Thanks for having me. We definitely do not think of ourselves as a NeoLab.
Speaker 1:Okay. But you are training models. You're doing AI, but you're a product company. Are you a consumer company? How do you think about yourself?
Speaker 8:We're we're a consumer company. We're an entertainment company. Entertainment. Consumer entertainment doesn't seem so hot right now. Yeah.
Speaker 8:Not exactly sure why, but being entertained and fulfilled is like a basic part of being a person, and so often underlooked part of the market. Yeah. Yeah. We're we're like the word we use here is creative entertainment.
Speaker 6:Sure.
Speaker 8:We are giving people the best, most fulfilling creative experiences of their lives.
Speaker 1:Yeah. I mean, that sounds maybe broader than music one day. Have you thought about video? Are you thinking about I mean, when I'm on Spotify, a lot of times, the video will pop up alongside the the the music. Are you thinking about expanding or continuing to refine the music model itself?
Speaker 8:It's a great question. I think there's a lot of reasons why this is going to work really, really well in music. Least of which is we love music. This is like really the DNA of the company. Yeah.
Speaker 8:But I think creative entertainment is coming everywhere. Mhmm. And I I think about it like this, like, I think even Claude Code or all of its competitors are creative entertainment. I don't know how much you guys play around with it but it's like really fun to build things
Speaker 5:Yeah.
Speaker 8:And it's really fun to use what you build. Yeah. And there's a huge allegory there for music too.
Speaker 1:Sure. Yeah. Yeah. That makes sense. The tinkerer mindset.
Speaker 3:Let's talk about progress since the last time you popped on. You guys Yeah. Grown revenue at all. What metrics can you share?
Speaker 8:I had heard some rumors. Yeah. So growth has been great. You know, a lot of things have compounded, a lot of hard work from the team Yeah. And kind of some big step changes in how people engage with the platform.
Speaker 8:Yeah. So since our last model release yeah, recently we we kind of announced that we hit 2,000,000 subscribers, 300,000,000 and we're like, one at home.
Speaker 3:Sorry, man. And you got cut off a little bit, but it's 300,000,000 of ARR, you said. Right?
Speaker 1:That's remarkable. That's wild.
Speaker 3:Insane. Much have you appreciated how much have you appreciated the all the other the the labs just slugging it out? Like, while while you guys kind of stay stay in your niche focus and and go after what what clearly is a massive opportunity, but but maybe it's stays kind of off the radar for some of these other labs long enough for you guys to just run away with it.
Speaker 8:Truly, I like wake up six days of the week and I think this is great. We're the only ones really playing in consumer entertainment and I'm really really excited. And then the seventh day of the week I wake up and I say like, we must be missing something that all these other giant companies know, you know. But I I think, it's what it's what I said before, like, being fulfilled is a much elevated state than utility and everybody is focused on utility because it's straightforward. But eventually, like, you need something more than that.
Speaker 3:This is like
Speaker 8:a basic part of of what being a person is all about. So we love to focus on it. I love watching people slog it out in other domains where scale and compute and dollars are honestly bigger weapons than they are in music.
Speaker 3:Yeah. We've been I've we've been been enjoying Suno a lot Yeah. Throwing on making making making songs for the team. Yep. It's just a it's an amazing thing to just like be joking.
Speaker 3:And in our use case, we're just, like, joking around about something. Yeah. And I'm just like, alright. I'm gonna turn it into a song. Yeah.
Speaker 3:It's a it's a lot of fun. But, yeah, talk about the updates on the on the product side, the new voices, functionality, all that.
Speaker 8:Yeah. It's a really exciting launch. We, a couple hours ago, released a new model. It's our best model yet. We'll make the best music.
Speaker 8:But I think most excitingly is really gets personal. So you can use your own voice to make music that sounds like you, and if you're not the best singer, it actually sounds like a better version of you, and so there's something beautiful about that.
Speaker 3:Auto tune?
Speaker 8:Yes. Yes. And without sounding too, like, artificially auto tuning. Go go try it out. I've I've learned not to try to demo this for people in large groups.
Speaker 8:People don't like singing in front of their friends. So I'm I'm not I'm not going to try that here. And then some other personalization features on the creation side about how you really kind of tailor the system to really know everything that you love. And then also really exciting is the ability to upload a bunch of tracks from off platform of your own that you can kind of inspire the model to be more like those, and we've seen some amazing things happen from everything from, like, musicians, film composers, producers to, like, uploading tracks there and getting the model to really kind of follow their leads. So it's like an incredible way to fall in love with a particular thing that you already love.
Speaker 3:Mhmm. I'm I'm super excited to play around with it, John.
Speaker 1:Yeah. Is there I'm I'm interested in like top feature requests and what we can learn. I don't you know, obviously, you don't want to spill your entire road map. But some of the interesting things that happened in image models where you could at a certain point take an image and basically just replace the background and it wouldn't sort of regenerate your face. And I feel like there's a lot of opportunity if artists opt in or I have music to say, okay, I want to keep the song exactly the same and just change out the lyrics to do sort of a remix or keep the lyrics exactly the same and change out the style, style transfer.
Speaker 1:And I feel like all of those are maybe it's going to be more of a a lift on like the business development side to figure out how to do that. But but what are you excited about in terms of increasing the level of control from the creator or the user?
Speaker 8:A lot of what you said is is coming soon. Yeah. I think unlike other media, music has like a very rich history of basically derivatives Really? From covers to samples to remixes to mash ups, and people riffing off one another is a way to spark creativity. Yeah.
Speaker 8:It is a way to keep old works alive, and so you'll see you'll see a lot of that come in in the not so distant future.
Speaker 1:Yeah. That's Some of
Speaker 8:it's already on platform, you
Speaker 1:know. Yeah, of course.
Speaker 8:Some something people don't know is, like, almost a quarter of all songs made on platform are derivatives of other songs on platforms, like a lot of covers, basically. And so there's a a kind of a social ecosystem around these things.
Speaker 1:Yeah. What's the b to b side of the business like? I I we we talked to a lot of AI video generation platforms and it seems like there's a lot of just ad creative, like ad agencies basically that are using the tool at volume beyond the creativity and just the fun of making a an AI video for themselves. They actually see it as a way to accelerate creative works on their ad side. And I'm wondering if you're seeing pull from ad agencies saying, hey, we we need, you know, a new song for this campaign.
Speaker 1:We have some AI generated video, and we're going to partner with Suno on that.
Speaker 8:We've definitely had a lot of outreach. Honestly, it's just not a huge focus for us right now. Like, we want to delight everyone. Yeah. Like, just regular people who love music.
Speaker 8:Yeah. And we're honestly, like, a lot of the company's DNA is not being not trying to do the same thing a little bit faster or a little bit easier, but actually to try to do something that is entirely new and, like, that is changing how people entertain themselves. So there's probably a big business to build helping people make songs for ads or jingles for companies. Maybe we can work together on a jingle as a side project. But for us, that'll be a side project.
Speaker 3:What global superstar has embraced AI music the most?
Speaker 1:And is it Meek Mill?
Speaker 8:The most? Oh. I don't know. There's there's
Speaker 3:because you kind of have to go on like a villain arc. Soulja Boy
Speaker 1:didn't AI.
Speaker 3:Like, like, there there's there we again, the last time we were here, I was telling you, somebody I know in the music industry is like, every artist is using the the SUNO. Every artist thinks it's amazing. Nobody wants to talk about it yet because they're kind of scared of the reaction from the world and the creative industry and all this stuff. And so it feels like the first one or two people to go in a huge way will get some pushback and then over time, it just is normal.
Speaker 8:I I think it's slowly changing. I don't want to out anyone, but this was this is a quote that is attributed to me, but it's actually not mine. I'm not this clever of everything that you just said ascribing this as the the GLP one of music. It's like everyone's on it and no one wants to talk about it. Yep.
Speaker 8:And I think these things just take time. So I'm not I'm not gonna I'm not gonna add anyone just yet.
Speaker 1:Okay.
Speaker 8:It feels like things are changing.
Speaker 1:Final question from the chat. Are there deep cuts on Suno? I don't know. Deep cuts?
Speaker 3:What is what what You
Speaker 1:know what deep cut is? Yeah. Deep deep deep cut is like deeply underrated like from deep cuts in the vinyl, like everyone knows
Speaker 8:I I understand, but it's not it's not for me to say Sure. Like what is good and not good. Like we we never want to be the arbiters of good music and bad good music. Yeah. And like like I have deep cuts of my own that you're going hate, like that I made.
Speaker 8:I promise you'll hate them.
Speaker 1:I guess to quantify the question it would be like, do you think the listener, the the the the the plays are less power law distributed than on say Spotify? Where Spotify probably has like Taylor Swift Taylor Swift Taylor Swift at at the tight tall end that's driving a ton of consumption. Do you think that your curve of consumption is a little bit more even?
Speaker 8:For sure. For a couple of reasons. One is that the whole purpose of the platform is actually to enjoy creation
Speaker 1:Yeah.
Speaker 8:And not necessarily to go and browse for other people's music. It's actually to get inspired to make your own music. And so Yeah. We actually see people falling in love as much with their own music on platform as they do with other people's music, which is Yeah. Amazing and new.
Speaker 1:Yeah. So it's more it's so the answer is more deep cuts. It's all deep cuts.
Speaker 8:More deep I get deep cuts. Okay. But in that in that lens, it's
Speaker 12:all Yeah.
Speaker 8:Deep cuts on sports.
Speaker 1:I love it. I love it. Yeah. No. I mean obviously not to paint it into a corner.
Speaker 1:There there's a million ways to think about this. But thank you so much for taking the time to come chat with us.
Speaker 3:Yeah. Was talking you. Excited to play around with the new model.
Speaker 1:Congrats on the progress. Congrats. Talk to you soon.
Speaker 3:Thanks guys.
Speaker 1:Have a good one. Let me tell you about Figma. Agents meet the canvas. Your AI agents can now create and modify your Figma files with design system context. It's in beta starting today.
Speaker 1:And our next guest is Ida Baradari from D Valence, the anti surveillance company. What's going I'm very excited to talk to you. Congrats on the viral sensation. But since it is your first time on the show, please introduce yourself and the company.
Speaker 10:Definitely. Thanks so much for having me. Hello, everyone. I'm Ida. I graduated with a degree in physics from Harvard, and now I'm building the Valence, a company that's protecting your freedom.
Speaker 1:How does it work?
Speaker 10:Great question. So basically, we're building on top of existing ultrasonic jammer technology, but what we're integrating here is that we're making it a smart device, takes in information from nearby environment and then targets our distortion signals into the direction of where we detect smart devices. Interesting. And then simultaneously, we also have an AI algorithm that makes sure that the distortion signals that we send out use artificial tones and voices that make it hard to decode.
Speaker 3:Oh. Okay. Let's take it one one more step back. What's What is the actual problem that people are experiencing today and may not even be aware of it?
Speaker 10:Yeah. No. I love the question. So in at the beginning of 2024, we saw a huge rise in AI variables. I mean, I think everyone in the Valley probably knows about Friend, about Omni, all those, you know, promising technologies.
Speaker 10:The problem there becomes, well, when you have a conversation, for example, you just forget to turn it off, a lot of confidential information and private information can be used to train AI models that you might not necessarily want to be trained on it, And people already have this problem who deal with a lot of confidential information in their everyday professional lives, so that can be people working in, you know, in jobs that deal with IP with other sensitive info. And this issue is way broader than just, you know, audio recordings. We also see this with meta Ray Bans happening, like, there's a lot of unwanted recording happening there, a lot of freedom for people to just, you know, go out and do whatever they want, And simultaneously, of course, digital data collection has been a thing for a long time, and the way that it's used in recommendation algorithms, for example, is another thing. So cognitive security is also a big part of this.
Speaker 1:Mhmm. How do you not disable someone else's device if you're okay with them using it? I was I was skiing and a friend had met at Ray Bans and he was talking to them and it didn't I was sort of eavesdropping on the questions he was asking. He was sending texts to friends and whatnot and he was fine with me hearing it. If I was wearing this device, wouldn't he just not be able to use his device?
Speaker 10:In this particular case, I mean, if you don't mind, then you can just turn it off.
Speaker 1:Okay. That makes
Speaker 10:sense. So it's very easy. It's like an on off thing Yeah. For you to, like, genuinely be in full autonomy over it.
Speaker 1:Okay. And then what's yeah. Obviously, it it sounds like you launched pre orders. Who has been buying? Is this corporations that want to make sure that they're because you could imagine, know, cell phone jammers exist and and Faraday cages exist.
Speaker 1:Like, there are ways to secure a property. Is this just privacy conscious individuals? Is this a direct to consumer product mostly?
Speaker 10:So for the preorders Mhmm. It's been mainly consumer facing Mhmm. Which means that a lot of people who have pre ordered it are in the range that, you know, the price point allows, but we are working to, like, make it accessible and affordable to everyone Yeah. Because we really believe in the mission that everyone who wants autonomy, really, and agency over the day that they should have it. But we also are working on a version that is for more, like, organization based because they usually have different requirements.
Speaker 10:Yeah. So we're also working on that.
Speaker 3:Why is We TJ gotta one of these. Oh, yeah. We should gift him one. Our friend TJ Parker absolutely hates meeting meeting, recording, and all these things that are just
Speaker 1:Can you make it into a watch? That would be the killer of he's watching
Speaker 10:there's there's a lot of cool stuff with the form factor that we're experimenting But
Speaker 1:what are you gonna be in a little bit of like an economic war here? Because $1,000 product to counteract something that costs a $100. There's just a there's a so there's an economy here that's sort of misaligned. I'm also interested to hear about how on earth can a recording device cost a $100 while an antirecording device cost a thousand dollars. I imagine that you you think the price will drop over time, but what is in the device that is expensive?
Speaker 10:Yeah. There's a lot of processing that's going on because we have certain algorithms that require a lot of power in order for it to, you know, work. Yeah. So that is honestly a big component
Speaker 1:Mhmm.
Speaker 10:Of the cost that's Maybe driving
Speaker 1:even a more powerful chip than what would just be in a passive audio recorder.
Speaker 10:Yeah. I mean, passive audio recorders, they are usually not as complicated to build, right? You basically just need a mic and then you you can just detect the stuff, right? But in this case, you wanna, for example, you wanna, like, find nearby devices, then you also want to make sure that they're blocked. Yep.
Speaker 10:And then you also wanna make sure that the way that you're blocking them is not just reconstructable in post processing.
Speaker 1:Sure. So
Speaker 10:there's like three different tasks here that make it way more expensive, unfortunately. But we're working on it.
Speaker 1:What are the what are the laws around this right now? I remember the backlash to Google Glass and then everyone had a phone and it just seemed like if you're out in public, people can just take pictures of you and record you.
Speaker 2:Yeah.
Speaker 1:Is it legal to block someone from recording me? I don't know anything about this.
Speaker 10:Yeah. That's a that's a good question. In terms of recording, there's one party and two party consent states.
Speaker 12:Sure.
Speaker 10:So in but nobody really follows that I feel.
Speaker 1:Yeah. What's the two party is California two party?
Speaker 10:I believe it's two party, yes.
Speaker 1:Certainly doesn't feel like it when you walk around.
Speaker 10:No, definitely does not feel like it. Exactly. That's what I'm saying. Nobody really follows it or it's not really enforced by folks. And then regarding the blocking, so certain blocking is not allowed.
Speaker 10:So for example, blocking from RF jamming is not allowed because you can get in the way with emergency services, but unless you don't do that, there's certain areas in which we can work in.
Speaker 1:Okay. Yeah. Very interesting. Well, where can people find it? Where can people preorder if they're interested?
Speaker 10:Go on our website. It's steveillance.com. Okay. That's where you can find it. Otherwise, I mean, in general, we're gonna be posting a bit more also about the development process Yeah.
Speaker 10:And the general vision and mission behind the company on our social media platform. So on x, we're on b and Audible, and then my personal x account is just my name.
Speaker 3:I need a little jammer for John's mic. Sometimes he he'll just keep talking, you know, and and no. I'm kidding.
Speaker 1:Well, thank you so much for coming on.
Speaker 3:Yeah. Great to be. Very, very cool that the chat is in a positive way saying that it feels very Harry Potter coded to have this sort of magic device that Oh.
Speaker 1:I like that. That's a good one. High It's praise. Yeah. Become invisible.
Speaker 1:It's the invisibility cloak for the modern era. Thank you so much. Congrats on the progress.
Speaker 3:Thanks for having me. All along.
Speaker 1:Have a great one. Let me tell you about AppLovin. Profitable advertising made easy with axon.ai. Get access to over 1,000,000,000 daily active users and grow your business today. And without further ado, we'll bring in Zach Kanter from Steady.
Speaker 1:Zach, how are you doing?
Speaker 3:What's going on? No no audio. You look fantastic. Have many books.
Speaker 1:This lighting is fantastic and the bookshelf is fantastic. This is of course Zach Kanter. He is the founder and CEO of Steady.
Speaker 9:How about now? Can you hear me now?
Speaker 1:We can hear you now. How are doing?
Speaker 9:Here we go, guys. Thanks for having me.
Speaker 1:Thanks for hopping on.
Speaker 12:Great.
Speaker 1:I feel like I'm surprised I feel like I've never met you in person but I know you from the Internet for so so long. So good to finally meet.
Speaker 9:We're Twitter friends, you know. Yeah. It's how I meet many of my reputable and disreputable friends.
Speaker 1:Exactly. But for those who haven't been following you in your journey since it is the first appearance, please introduce yourself and the company.
Speaker 9:Sure. I'm Zach Kanter. I'm the founder and CEO of Steadi. It's spelled spelled s t e d I. Mhmm.
Speaker 9:The we're a health care clearinghouse. So if you're not familiar with the world of of health care, you know, we exchange the administrative transactions that power all of all of health care.
Speaker 1:Mhmm.
Speaker 9:You probably heard stats like this before that health care is 18% of US GDP, so it's a pretty meaningful chunk of the of the ecosystem. But, you know, you go into your doctor's office, they ask you for your driver's license and your insurance card. Mhmm. And then they tell you your co pay is $20 and you have three visits left and all those details. That's a transaction called the real time eligibility check that happens under the hood.
Speaker 9:Mhmm. We process those. We process tens and tens of millions of those per month. And then when, you know, you finish the encounter, whether it's a surgery or a or a, you know, teeth cleaning, whatever it might be, they have to send a claim. There's a series of messages that come back.
Speaker 9:So there's an adjudication message that comes back saying the claim is rejected or accepted, and then the claim gets paid somehow. You know, you get those things in the mail that say, This is not a bill explanation of benefits. Your doctor gets one of those as well. They can get them via paper, but they can also get them electronically. And basically, we process all these transactions back and forth.
Speaker 1:Mhmm. And why can't a registered nurse just vibe code a system to do this for them? I'm just kidding.
Speaker 9:Well, it's a funny question. Like, know, it's interesting. So we we primarily, you know, we think about our business as selling to other technology companies.
Speaker 11:People think
Speaker 9:about us as like the the stripe of of health care. Yeah. The but we've seen a surprising number of of these small and medium sized doctors and dentists' offices that are that are signing up. And so we we recently did an analysis and spoke with a bunch of these places, and it turns out that indeed doctors are vibe coding
Speaker 1:No way.
Speaker 9:Revenue cycle management systems. So, you know, thousands of them but it's it's dozens of
Speaker 1:It has happened. That's amazing.
Speaker 3:That's very cool. Yeah. What what what have been the key milestones for the business? You're raising new money today. Your name is Steady.
Speaker 3:Yes. John was saying how he's known you forever from the Internet. I feel I feel just steadily
Speaker 1:Here we go.
Speaker 3:Chugging along. But but yeah, what what does this milestone represent?
Speaker 1:Mhmm.
Speaker 3:Like, what did it take to get here? Health care, every health care founder will tell you that that obviously there's a big massive market, but but, you know, it doesn't move as fast
Speaker 1:and Yeah.
Speaker 3:And it can take, you know, years to make progress that another industry might might happen in a quarter or
Speaker 1:something like that.
Speaker 9:Yeah. It's it's interesting. So, you know, we didn't start in healthcare. I don't come from a healthcare background. I previously started a brand of auto parts.
Speaker 9:So I manufactured auto parts in Taiwan and China. Cool. And, know, follow the typical auto parts to healthcare pipeline as many companies do. And in building that business, you know, I sold to O'Reilly Auto Parts and Amazon and these different retailers. And I had to, at some point, it was probably in like 2011, the transaction volume got such that it wasn't feasible to have these things manually entered anymore before AI.
Speaker 9:Yeah. And so I reached out to all the different retailers that I was selling to and asked them to send me the API spec for their purchase orders so I can automate the transactions. And, you know, over the next two weeks, they all wrote back and they said, what's an API? Yeah. And so, you know, things got a little bit better since then.
Speaker 9:But what I found out at that point was that this whole world of of retail logistics supply chain, transportation, etcetera, manufacturing is powered by a technology called X12 EDI. And so if you see, STEDI is spelled s t e d I. It's because we started with this underlying EDI technology. And, you know, long story short, maybe long story long here, I got so frustrated with the various EDI systems that were out there. So like, look, what I wanna do is I wanna receive purchase orders in.
Speaker 9:I wanna get them into NetSuite. I wanna have those automatically sent to a warehouse. I want the warehouse to ship the order. I want the transaction to come back. I want when things come in via Flexport.
Speaker 9:I want those things to, you know, get automatically pushed into my system. This can't be that hard. Kind of famous last words. And I was I got so sick of the the solutions that were out there that I ended up having my own system built. And then, you know, I ultimately sold the auto parts business to a private equity firm when I started to study.
Speaker 9:And, I you spent like $50 on which was, you know, it was a bootstrap business, so spending $50 was a lot of money. $50 on building this homegrown platform. And I was like, you know, it's gonna cost like 10 times as much to do this for everybody for all transactions. I was like, but to be safe, you know, as margin of safety, I'll I'll raise a million dollars instead of 500 k. And, you know, now we've raised a $142,000,000 total, and I think we we, you know, still
Speaker 4:have It's gong time.
Speaker 3:It's gong time.
Speaker 1:There we go.
Speaker 9:Hey, Mike. Thank you. Thank you.
Speaker 3:What what's your favorite car?
Speaker 9:Favorite car? Oh. You know, it's funny. Like, I grew up you you look at, you know, the Porsche nine eleven. You say, like, that's like a a car that old guys who don't know anything about cars buy.
Speaker 9:Mhmm. And then you go and you drive one. Yeah. And it actually turns out that nine eleven, you know, sixty, seventy years of iterative design is is pretty good.
Speaker 1:Yeah. It's what kind of auto parts were you selling? I'm I'm in the market to pick up a straight pipe exhaust system. I was birthday present for Jordy. I'm hoping to get some LED under lighting as well, maybe stance his car.
Speaker 1:Were you doing anything like that?
Speaker 9:I can I can hook you up?
Speaker 1:You can help.
Speaker 9:We're gonna Yeah. It's gonna be like it's gonna be like, you know, TBPN Yes. Come on Ride Edition.
Speaker 1:Yes. Yes. That's what I'm looking for. I want a horse. You like horses?
Speaker 1:We put a horse in your car. We put a gong in the passenger seat. You can't transport anyone but it looks good.
Speaker 3:John John has been trying to get me to go the Mansory route
Speaker 1:Yes.
Speaker 3:For for years and he will be doing it until
Speaker 1:he You gotta do it until you
Speaker 3:do it. Out of this earth.
Speaker 1:Until you do it with the full sponsored livery wrap.
Speaker 3:The car. You guys hiring, I'm assuming? Yeah. Oh yeah.
Speaker 9:Engineers, product.
Speaker 1:Talk a little bit about the company culture. Where are you based? Are you in person? Remote? Like, what's the what's the scale of the company right now?
Speaker 9:It's about a 125 people. Wow. We're distributed. We have a bunch of people in New York, but we've got people all over the place. I live
Speaker 1:in the
Speaker 9:Bay Area.
Speaker 5:Okay.
Speaker 9:And look, I think, you know, with the talent wars, you know, there's, look, there's obvious pros to being in person. Yeah. At the same time, you're kind of making the implicit decision that you're gonna exclude 99% of your potential hiring pool and saying, we're not gonna be able to hire those people. And for us, we think the trade off's worth it. So we're, yeah.
Speaker 9:We're all over the place.
Speaker 1:That's amazing. Awesome.
Speaker 3:Well So great to finally meet.
Speaker 1:Yeah. Great to finally meet.
Speaker 3:Amazing progress.
Speaker 1:Yeah. Thanks so much. Thanks, guys. Thanks for having me on the show. We'll talk to you soon.
Speaker 1:Cheers. Have a good one. Me tell you about fin dot ai, the number one AI agent for customer service. If you want AI to handle your customer support, go to fin.ai. And let me also tell you about Shopify.
Speaker 1:Shopify is the commerce platform that grows with your business and lets you sell in seconds online, in on mobile, on social, on marketplaces, and now with AI agents. And without further ado, we're going back to back There he Zach. Oh, we got Nick. Zach. I love you having Zach.
Speaker 3:Great
Speaker 1:to see go back to back Zach to Zach.
Speaker 3:This. Plaid on plaid.
Speaker 1:But this is a beautiful background. This is a beautiful outfit.
Speaker 3:Matt plaid.
Speaker 1:Tell us how it's going.
Speaker 11:This is where I'm living now. It's good to see you guys. Good to see you too.
Speaker 1:To see you, dude. How you doing?
Speaker 3:Just let's just start with a gong.
Speaker 1:Start with a gong.
Speaker 3:Let's start with a gong, man. I don't wanna wait. Don't wanna wait.
Speaker 1:Don't delay. The anticipation was too high for the last one.
Speaker 11:How long I've dreamed of that moment. Oh. Take a picture photo for my mom.
Speaker 1:Let's see. Got it. Fantastic. Very fun.
Speaker 3:You can, of course, screenshot it. Yeah. But it's cooler. Cooler.
Speaker 1:Later, you will be able to screenshot your
Speaker 3:which is and then say, look mom, I took this screenshot of me taking a picture for you. Give
Speaker 1:us some background. Tell us the story of how you wound up in this particular situation. Just just just take us through it.
Speaker 11:Well, I'm excited to talk to you all about it because as pioneers of new media, I feel like you'll understand this more than most people. But, you know, we've been building This Week in FinTech as what started as a FinTech newsletter and turned into more of a FinTech media company
Speaker 1:That's right.
Speaker 11:Over the last six and a half years. Mhmm. And the plan team approached us Yeah. About five months
Speaker 5:I thought we were gonna
Speaker 11:talk about a partnership. So I came in there ready to sell a sponsorship Yeah.
Speaker 1:Ready to
Speaker 11:sell a media deal. Yep. And they said, actually, you know, we've been thinking a lot about how we can improve the conversation around fintech Mhmm. And we wanna partner with you guys. And what that means is we wanna acquire the business.
Speaker 5:Yeah. And they won. They have negotiated me. But here I am.
Speaker 3:Amazing. Amazing.
Speaker 1:So so what do you think stays the same? What do you think changes? Are you gonna be working in their office? How does all this fit together?
Speaker 11:Yeah. I went and did a little office tour this morning, and I got a badge. So they they haven't given me my gun yet, but they did give
Speaker 13:me my badge.
Speaker 12:And so
Speaker 11:after six and a half years working out of a home office, just seeing another person and that having a conversation in an office was a transformative experience for me. Yeah. Are gonna keep things mostly the same from now, and then we'll just keep adjusting as we go. I think probably the best comp for what we're looking to build is something similar to Bloomberg with Bloomberg Businessweek.
Speaker 1:Oh, sure.
Speaker 11:Where these are two really complimentary properties. There's obviously a parent company, they share a name, but you can be a Bloomberg software customer without reading Businessweek and vice versa.
Speaker 1:Yeah. That makes sense.
Speaker 3:What is the state of fintech? What are you I mean, you know, you've you've been six and a half years. You've seen the the boom, the the momentary bust, the the comeback. You've during that time, there's been so many companies that have, you know, thrived throughout the entire period even as the market was was in turmoil overall. But what are you most excited about today?
Speaker 3:Mhmm.
Speaker 11:Well, I I assume most of the half 1,000,000,000 TBPN watchers know Jordy's background, but Jordy is an exited fintech founder who built Party Rounding Capital. And so you also had a front row seat to kind of the change of the fintech ecosystem over that period. Today, what I've noticed is you had this spike in fintech enthusiasm and funding in the venture community in 2021. Mhmm. A lot of companies got out over their skis because of capital availability, and I think there were sloppy decisions made.
Speaker 11:And a lot of them took tough medicine. Some of them didn't make it past the downturn in liquidity for fintech startups. But a lot of them said, look. We're gonna build real businesses now. We're gonna take the tough medicine, and we're gonna come out the other side stronger.
Speaker 11:And so if you look at the top right corner and see Ramp, like, that's a great example of a company that has been around for a long time, said, hey, we grew too quickly, downsized, and now they're better for it and are just kind of crushing and shipping on a weekly cadence and really redefining this entire category. And so what we're seeing today is you have fintech companies. We've been talking about this for a long time. You have fintech companies that are actually taking market share from incumbents. I know fintech companies have wanted to say, hey.
Speaker 11:Look. We're the challengers, but we're gonna be, you know, the dominant providers of financial services one day. But now that's actually happening. And so, you know, thinking about this with my plaid hat on
Speaker 1:So much merch.
Speaker 3:I love how you brought you brought you you just came with the same the same you came prepared. Yeah. Understood You the assignment, the same entertainment level as we bring. Putting on put on your steel man, John. Yeah.
Speaker 3:We
Speaker 11:noticed that, you know, the tech media conversation hasn't really caught up to how well some of these fintech companies are doing, and it's tough. Technology media is really stretched, and I think there are a lot of different areas like AI, like crypto that, you know, command a lot of attention. And so you have really well run companies like Ramp that are doing generally interesting stuff and shipping at this crazy rate, but nobody's covering them other than TBPN. And so we're looking to really Yeah.
Speaker 3:Even even we're not we're covering it on a level where if you're a fintech industry insider or builder, you're actually getting alpha from our fintech coverage. And alpha comes into like, okay, what does infrastructure look like? What kind of what what bank partners are evolving with the needs of these companies? Like, you know, you guys are going like ten ten layers deeper and have been for for so long. I think it's it's it's super important.
Speaker 1:Yeah. Last question for me. What what what media formats where like, how would you describe where you are now? And then what excites you? Because, you know, obviously, the the the the newsletter list is over 200,000 subscribers.
Speaker 1:Congratulations. Massive. How many newsletters do wanna send a year? Do you want that to increase? Do you wanna do more in events, video, interviews, audio?
Speaker 1:Like, what what's interesting to sort of, like, zoom out and think about the next couple years?
Speaker 11:Yeah. You know, our DNA has always been the community Mhmm. Initiative. And so events are a big part of what we do. International is a big part of what we do because there's so much interesting innovation happening.
Speaker 11:American tech companies will go on stage at conferences in Mexico City and in Lagos, Nigeria and talk about what they're doing. But then they actually start talking to people who are operators in Lagos and Mexico City,
Speaker 5:and like the level of
Speaker 11:innovation there is often, you know, more advanced in fintech than you'll see in The US because these are areas that don't have the same level of financial services. And so you actually have to build a lot more there, and that's been a big part of our DNA too. And so I think it's really double down on a community focus, really deep thoughtful writing and continuing to grow the pie not just here but internationally as well.
Speaker 1:That's awesome. Well, congratulations. Amazing.
Speaker 3:Super Thank pumped you much for
Speaker 1:for taking the time.
Speaker 3:Match made in heaven.
Speaker 1:A true match between the background and the curtain.
Speaker 13:Truly. And the hat.
Speaker 4:It's
Speaker 3:fantastic. Come come in person next time. Yeah. It's great to finally have you
Speaker 1:on the catch up soon. Have a good one. Yeah, man. Nick. We'll talk to you soon.
Speaker 1:Goodbye.
Speaker 3:See you all.
Speaker 1:And up next, we have the co founder and CEO of Plaid, Zach Gray, in the Restream waiting room. Let's bring him into the TV. Been also down. Zach, how are you doing?
Speaker 5:Doing well. Thank you for having me.
Speaker 3:When did you first meet Nick?
Speaker 1:That's a great question. I
Speaker 5:think it was at Money twenty twenty.
Speaker 11:I think
Speaker 5:it was maybe like six years ago or something like that. Mhmm. It's been a long time, and we've we've long admired what what what Nick and team built. Yeah. It's look.
Speaker 5:I I feel so honored to get to work with them in this new way, and and it's been pretty amazing to watch them go over the last few years.
Speaker 1:Yeah. Yeah. Yeah. Talk about your experience as CEO at an event. What makes for a good event that you will say yes to attending, appearing at, Like, what's the what's the secret sauce that you're like, okay.
Speaker 1:That clicks into place, and I'm gonna say yes to that because I'm sure you get invites every day.
Speaker 5:Yeah. I I I think oh, man. This is a difficult one because my default answer is no. Yeah. My and I have the the the conversation frequently.
Speaker 5:I have no new things.
Speaker 1:Yeah. There's a lot of stuff.
Speaker 11:I think they're look,
Speaker 5:it all comes down to who's there and the size of the event. Sure. Small things where I can meet people that are really high value are super interesting. And, you know, things that have content in an angle that's not covered all the time in the same way are are are valuable. So I don't say yes to a lot of
Speaker 3:things,
Speaker 5:which which feels fortunate. Also, I, like, really like working, so Yeah.
Speaker 1:It's hard
Speaker 5:to get up from.
Speaker 3:Yeah. We're the same we're the same way. What outside of this this acquisition, what's on what's on your mind this week? What's the business focused on? What are what are you focused on personally?
Speaker 3:Mhmm.
Speaker 5:Well, first, I I don't want to skip over the this week of FinTech. I mean Yeah. Big deal for us. Like, we've been really excited to to to push this conversation forward over the past many weeks. We're excited to to now finally have have have Nick and co as a part of the team.
Speaker 5:And the the the future together, think, is gonna be super fun. Aside from that, a big focus is AIFI everything. So you might have seen we did a launch of Perplexity. This was, I think, a week and a half ago or so where we can power the the the finance tab of the Perplexity, application. And it allows you to do things like see your see your stock portfolio in real time, get an update in the morning to understand, you know, what stocks you might wanna trade in a given day.
Speaker 5:Mhmm. Lots more that we're gonna do with them to bring in more financial data into Perplexity. I think this is the first step in a lot of consumer facing AI experiences. That's been a big one for us internally.
Speaker 3:Yeah. That's very cool. Mean, you think about people are using They're going to AI tools for intelligence to help them understand the world, but then they lack all of the, you know, maybe you've put something into the context or maybe that has some memory, but it's lacking like that real real time data on you individually and money being at the core of everyone's life just means that it's like very important for it to be in there. So that that's very cool.
Speaker 1:Yeah. What is the what what is integration with AI tools look like? How is it changing? Obviously, you're known for the API, which has had, you know, years and years of development. There's MCP now.
Speaker 1:There's skill dot m d files. There's all these different ways to interact. The agents can obviously use APIs and write their own API integrations. Where do you see that going? Are there any changes that you need to make or you're in flight already making?
Speaker 5:Yeah. So the truth is the core of Plaid doesn't change all that much. Right? Yeah. We are a pipe to bank accounts.
Speaker 5:Yep. We're then a data store on top of that and then analytics that sit on top of that. So, like, that that that chain doesn't change all that much. But the entry point to that change does change a lot. So, like, we're doing a lot of work internally to say, how do we build, like, a one shot vibe coder, like, get started with the thing?
Speaker 1:Yep.
Speaker 5:Yeah. So, you know, you can go home and build your own personal financial management app. Now, you guys are nerds. You might do that. Yeah.
Speaker 5:Most of the world is not quite as nerdy.
Speaker 1:No offense.
Speaker 9:And
Speaker 1:I was literally just thinking about that. Was like, okay. So I'm gonna go and tell Codex to write a Plaid integration, pull all my bank accounts together, tell me exactly how much money I spent on everything, recategorize these. I was basically like rebuilding in for myself. And I'm like, maybe there's a tool for this.
Speaker 1:I don't know. But Yeah. It'd be more fun to build, so tinkerer mindset.
Speaker 9:You should
Speaker 5:you should probably just use Perplexity or many of the other wonderful plot outs that are out there. I will say, I have spent more hours than I would care to share building, like, the totally most souped up, like, personal financial management tool
Speaker 1:that doesn't
Speaker 5:have everything in my community to let. Six monitors. Yes.
Speaker 1:Situation monitor.
Speaker 5:Yeah. Not six, but you don't see this room there, Ben.
Speaker 1:We caught
Speaker 5:This app is like the perfect thing for me and my wife. It's like it has everything. Like, we I can, like, chat with, our legal docs from, like, purchasing a house and stuff like all sorts of stuff. Yeah. Anyway, so some people are doing that, and we would like to make it really easy for those people to do it.
Speaker 5:Mhmm. I think we saw, like, like in, like, two months, I think we saw a 200% increase in the number of, like, hobbyist developers that are building stuff Yeah. On Yeah. The I I don't I I don't quote me on that stat. I guess I'm on public TV now, so I said that.
Speaker 1:This is interesting. Turn this into an article for sure. No.
Speaker 5:We don't have a lot of But
Speaker 1:I was about to ask you, like, yes, you are actually seeing some sort of material increase in the number of, like, small indie developers, vibe coders, hackers, individuals. It's not just, you know, I'm sure there's a lot of excitement from the enterprise to deeper their integrations, but you are seeing your groundswell at the individual level, which is fascinating.
Speaker 5:It's that. Yeah. That's that's really big. For our larger enterprises, they're like, how do I automate all of the support stuff and stuff with cloud to look like support tools for them? Yep.
Speaker 5:And then, like, there's a lot of a lot of consumers have questions about, like, what data is going where? So we're thinking about, like, how can we smartly build intelligent permissions on top of the data permission
Speaker 3:Mhmm.
Speaker 5:So that, you know, as a consumer, know, you might not wanna link your Cal sheet spending, but you might wanna be able to analyze your stocks. Sure.
Speaker 1:Like, how
Speaker 5:do we how do create tools for that kind of thing?
Speaker 1:Yeah. Are you are you seeing like, I I guess the question is, like, where are you seeing benefits when the frontier advances? Like, people are, you know, currently excited about GPT 5.4 or or Gemini 3.1. And they see a model and they're like, okay, this new release does this new benchmark better or it has a better smell or it feels better in this particular area. But as a business owner and business leader, you're you know, you might have a system that's using an LLM or an API, and it's already at a 100%.
Speaker 1:And so are you are there systems that you're not upgrading and then there's some systems that you wanna keep on the frontier, like chat or or, I don't know, going around and doing fraud detection. Like, what where are you hitting the newest, expensive model button versus, okay, the system that we build is actually rock solid and, like, we're we're we're we're good there.
Speaker 5:Yeah. So there there's a a lot of layers of the stack and it kind of varies based on on the layers. So for for coding, like, I want our engineers to be using cutting edge possible everything
Speaker 1:Yep.
Speaker 5:In in almost all situations. Now at some point, we will get into, like, cost optimization and cost management. Mhmm. We're not in the phase right now. We're gonna be, like, get the best possible thing and go as fast as as fast as you can.
Speaker 5:Yeah. Within the products, we don't want to actually upgrade our our our models too quickly. Mhmm. For example, like, we've we've built a lot of stuff to improve transaction categorization. Yeah.
Speaker 5:If transaction categorization changes quickly, our customers notice and they're like, oh, well, I built like, you know, you know, you you might say that something's a restaurant and I wanna say it's a food purchase. Okay. Great. But if you change it all the time, then I'm not gonna be able to map restaurant to food purchase as quickly as possible. So it's like different names for the same category.
Speaker 1:Yeah.
Speaker 5:Those changes are hard. Where it flows into our anti fraud models and, like, eventually into our credit models, you know, we don't want to be changing the models too quickly because we have to do a lot of back testing every time we make an upgrade. But then anything that's, like, you know, customer facing, like, improved support experience, so on and so forth, like, there there there we can be quite iterative. And, like, oftentimes, we're not using the cutting edge. We're maybe using a a turn or two back because the value it doesn't make any better responses, but it costs us.
Speaker 5:So there's so many different choices that we're making on this stuff. It's honestly really fun.
Speaker 1:Yeah. Yeah. It seems like a really
Speaker 3:What is your thesis on how agents will use money? Because there's a number of companies that have sprung up and their incentive is to tell you that agents will exclusively use stablecoins and generate their own effectively like generate their own real time payment rails on the fly because they don't wanna deal with fees. And I think we've generally John and I have been pretty, like, neutral on this. Like, we can imagine a scenario where an agent would use stable coins, but we can also imagine a scenario where
Speaker 1:like, hires a human to be a man and carry cash from one place to another. That's another possibility.
Speaker 3:That's another possibility. Or just use the existing rails that I if an agent's acting on my behalf, maybe they use the existing Yeah. You know, set of financial products that I already use.
Speaker 5:Yeah. I mean, for as far as I can see, which in this environment is maybe a year or something like that, I think, like, agents using credit cards is going to be, like, the by far the the primary thing that happens. The reason for that is the merchants accept credit cards. Right? Merchants don't accept stablecoins, now for the most part, for most of the things that a consumer wants to do.
Speaker 5:Now over time, certain types of merchants might start to extables accept stablecoins. Like, certain types of payments might might move in that direction. The question is, like, will the companies that care about making credit cards really easy be able to make them sufficiently easy in the amount of time that, you know, the merchants actually start to shift to think about accepting stablecoins? And my hunch is, like, you've seen I think I think, like, Ramp actually launched an agenda credit card. Like, one of our customers, privacy.com, they have an agenda credit card.
Speaker 5:I know there's a bunch of other agenda credit cards that are out there. And, like, I can't, like, imagine that there will not be 5,000 YC companies that are launching agentic focused credit cards soon. So, like, I think we will see more and more options pop up. That's not to say I'm not a believer in stablecoins. I think it'd be super cool, but I just don't think it's realistic in a short time frame.
Speaker 1:Yeah. Yeah. That makes ton of sense.
Speaker 3:What about, what what is your timeline or prediction around, big institutional banks natively supporting stablecoins? Like, is there is there a point where, like, the default Chase account, you wanna make a payment and you have the option of, you know, a Zelle, a wire, or a stable coin payment? Or is that not coming ever? Or, you know, what what's your general read?
Speaker 5:I think it's probably coming. I don't know that it's coming fast. And I think there's, like, a lot of reasons for them to want to be slow, but I certainly think some of that is coming. Like, think wire is not working on weekends. One is actually structurally not true.
Speaker 5:Like, there are many ways to, like, create the effect that a wire has moved on weekends. So, like, if a bank wanted to do that, they could do that. But ultimately, like, it is a thing that bothers enough people that some people will want to move money on weekends and we're gonna have to give them ways to do that. So, stablecoin seems to be the the most optimal way to do that even though you can't change the
Speaker 1:existing system. Mhmm. But Yeah.
Speaker 3:You wonder you wonder where that where that maybe maybe there's not enough consumers that are even asking right now, to be honest. But it might actually come from industry first where like car dealerships are like, hey, like we really want better ways to
Speaker 1:I just found I just found a bit of a potential competitor for you you might need to watch out for in, the agentic future. I went to brinks.com, and there you can move money via of armored car. And the roads are open on the weekend so you could move a lot of cash. You might wanna watch out, Zach. You start retooling the business plan because you're gonna have a with Thank you.
Speaker 1:Codex. Dispatch the bring truck. Don't make mistakes. This is gonna happen. You gotta watch out.
Speaker 1:You gotta stay sharp.
Speaker 3:What's on what's on what what else is on the road map for Plaid this year that you could talk about now?
Speaker 5:We've got effects coming up. So effects is our our our annual conference. It'll happen here in a couple months. It's it's gonna be awesome, super fun. Nick, we haven't figured out Yeah.
Speaker 5:What what we're gonna do together.
Speaker 1:I was thinking he could fit really well into that too.
Speaker 3:MFC. Sounds great.
Speaker 5:Very good. Exactly. If you guys want to come visit, we'd we'd love Amazing. To have But yeah. So this is gonna
Speaker 2:be a
Speaker 5:big one. We've got a bunch of launches lined up for that. Cool. You know, I I can't you can't spill the beans on all of them, but, like, there are gonna be a lot of AI related things as you as you might imagine. And then, look, it's it's been a it's been a really fun year so far.
Speaker 5:Think just like e even for me as a as a as a leader retooling the company to think about, like, how do we wanna operate differently if the average size of an engineering product and design pod was eight people, now it's four people, like, how can we parallelize things? So, like, honestly, just as a leader, it's it's really fun right now to get to retool an entire organization around, you know, an improved shipping velocity. Yeah. So, yeah, I'm I'm nerding out with it. It's great.
Speaker 1:I love it. Love it. Love it. Well, congratulations on all the progress. Congratulations on the acquisition, and we'll talk to you soon.
Speaker 1:Have a great day.
Speaker 3:Yeah. Great day. See you, Zach.
Speaker 1:Goodbye. The Daily Beast got a little bit of a scoop. Here's how they phrased it. They said the 75 year old Disney executive who stepped down as CEO just last week has been busted for leading a secret double life on social media under a different name. And Taylor Lorenz is on a tear.
Speaker 1:She says Bob Iger had a private IG account for IRL friends and family where he shared kayaking photos with his wife. And this is how the Daily Beast framed it. That is an absolutely drenched way. It's like, yeah, I guess he had a Finsta. He had a he had a fake Instagram account where he would you know connect with friends.
Speaker 1:Not an uncommon tactic for someone who's probably the most scrutinized and watched public figure potentially in in the business world. Everyone wants to track and read into what is Bob Iger doing. Is he, you know, in in is he in the office? Is he in Orlando? Is he at is he at Disneyland?
Speaker 1:There's a lot of reasons why people would want to report on everything that he does and he probably doesn't want to share all that. So he had to do the fake Instagram, the alternate, the private Instagram for friends.
Speaker 3:We have a good place to end it. Please. John Palmer's wife's company was more innovative than TBPN and Fast Company. Honestly, fair. What is Row seven?
Speaker 1:We got beat.
Speaker 3:Row seven makes seeds. Seeds? A vegetable company dedicated to deliciousness. Seeds company. This is more innovative.
Speaker 1:It is.
Speaker 3:They're inventing vegetables.
Speaker 1:They're returning.
Speaker 3:We we reinvented business television.
Speaker 1:Well, it ain't over till it's over. So stay
Speaker 3:vigilant for year.
Speaker 1:Because we're coming for you.
Speaker 3:We're coming for you. It's personal now.
Speaker 1:It's personal now. We're not stopping till we get to number 41. Let's make it happen. Thank you for watching. Thank you Please for watch today.
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