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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 the TBPN.
Speaker 2:Today is Friday, 03/13/2026. We are live from the TBPN UltraDome, Temple Of Technology.
Speaker 1:The fortress of finance.
Speaker 2:The capital of capital. Let me tell you about ramp.com. Time is money. Save both. Easy use corporate cards, bill pay, accounting, and a whole lot more all in one place.
Speaker 1:Boy, is it good to be back.
Speaker 2:It's great to be back, but it's Friday the thirteenth, so you know what you gotta do. Salt over the left shoulder.
Speaker 1:Oh, yeah? Awesome.
Speaker 2:And you know about this?
Speaker 3:I didn't.
Speaker 2:Yeah. Didn't. Throwing salt over your left shoulder is good luck. It counteracts bad luck Friday the thirteenth
Speaker 1:That's great.
Speaker 2:Obviously bad luck, but not anymore since we have salt thrown over our shoulder.
Speaker 1:Good hack.
Speaker 2:I was very interested in Patrick Hollison's post. We talked about this a little bit. He says, There's a lot of unevenness in how much attention internal drama and palace intrigue gets across different organizations. As far as I can tell, this is substantially a matter of path dependency. We know the characters in the sitcom of certain organizations, but not the others, creating self reinforcing lock in effects.
Speaker 2:How much does one hear about the power struggles at Chevron or the Department of Agriculture? There's even significant heterogeneity between ostensibly similar companies within sectors. We get it. You want a bunch of Palace intrigue stories about Stripe. We get it, Patrick.
Speaker 2:No. Stripe has not ever really been in the, you know, the tumultuous drama, oh, horse race. You know, There's been investors who have talked about various valuations. But overall, the company's been sort of smooth sailing for almost two decades. But I wanted to I wanted to think about this more in the context of other countries startup ecosystems and also Yeah.
Speaker 1:The closest they ever got to drama
Speaker 2:Yeah.
Speaker 1:Was around the Bolt Fast dynamic.
Speaker 2:That's right.
Speaker 1:Because they backed fast.
Speaker 2:Yeah. You're right. There was a little Seemingly
Speaker 1:because felt like some Yeah. Competitive pressure there. They wanted the the fast checkout provider to
Speaker 2:Fast take off.
Speaker 1:On Stripe. Bolt was famously not. They built their own payment rails.
Speaker 2:Yeah. Yeah. Yeah. I mean, the Collison brothers are just so class they're such class acts that they don't really wade around in the mud. They don't roll around in the slob farm.
Speaker 2:And it's like, it's a b to b company, so Yeah. There's less, like, just general viral intrigue around it.
Speaker 1:And even in that even in that whole saga Yeah. Oh, they never saw a single comment.
Speaker 2:No. No. And they weren't taking shots for at anyone. They they were very classy.
Speaker 4:What do
Speaker 5:you think?
Speaker 3:I mean, there was some controversy when the, you know, cheeky pint Elon interview came out and John Carlson, you know, how many Guinnesses were they drinking?
Speaker 2:Okay. Okay. That was a bit of palace intrigue. How many how many cheeky pints are they drinking in the palace? We're getting some John
Speaker 3:did come out on top of that. Right?
Speaker 2:He did. Did. Yeah. Yeah. Yeah.
Speaker 2:He explained. He explained. So but so years ago, I was talking to an American VC about New Zealand, and I asked him about the startup community. The country was beautiful, he said. Highly developed, democratic.
Speaker 2:It consistently ranks among the world's most stable, wealthy, and well governed societies, and he would spend a lot of time there. I was like, this there's got to be some company that can break out and become a power law company. If you're gonna be there spending a lot of time, you'll probably meet cool people, interesting people. Maybe there will be a great New Zealand company that comes out of this. And he was like, I'm not so sure because his assessment distilled down to something along the lines of they are suffering from a bad case of tall poppy syndrome.
Speaker 2:So what is tall poppy syndrome? Put simply, individuals who achieve visible success are criticized, attacked or socially cut down because they stand above the others in the crowd. The metaphor should be obvious. When you cut the tallest flowers in a field, the surface appears even.
Speaker 1:Let's pull up Tyler for a second.
Speaker 2:Why? What is There we go. He's a tall poppy. He's getting cut. Anthropologists often call this leveling behavior and it goes back to hunter gatherer societies.
Speaker 2:Good hunters might be mocked or discouraged from bragging. Sharing would be encouraged to prevent resource concentration. And there's nothing bad about a preference for humility. America has long been suspicious, and Americans have long been suspicious of the Lamborghini driving self promotional Instagram course hustlers. And for good reason, those folks are usually selling overpriced junk food, basically.
Speaker 2:But the strong form of tall poppy syndrome does lead to lower start up formation. If you think that you will immediately be cut down in your society, you don't actually go out and hunt. You actually don't go out and bring back the big deer or whatever you're The bacon. Yeah, you don't bring home the bacon in the first place. You don't even try because you're so worried about this tall poppy syndrome in your society.
Speaker 2:So you wind up with lower startup formation, fewer truly scaled companies, less aggressive growth plans, and ultimately a talent exodus or brain drain, and that's what's happened in a lot of developed, wealthy, stable countries that haven't created amazing new products, really bold entrepreneurship efforts. A lot of it's because of the tall poppy syndrome. So America's never had this problem, And I don't actually think we're that close to developing a crippling case of tall poppy syndrome anytime soon, but it's worth understanding how these leveling behaviors shape the narrative in tech. So there's this unevenness that Patrick Collison identifies around internal drama, attention. It does not seem correlated with market cap at stake or even how well known certain founders are at the time that something's happening that could be dramatic.
Speaker 2:So I was I was thinking back to Elon Musk and Tesla. He's like perhaps the most household name entrepreneur in history, certainly right now. Tesla has something like a trillion dollars of market cap at stake. If someone leaves Tesla to start a competitor, that should be incredibly dramatic. Do you know who I'm talking about?
Speaker 1:I do. Who is it? Because I took a pass.
Speaker 2:Oh, you took a pass. Okay.
Speaker 1:On your essay. Well But I don't remember his name.
Speaker 2:It's Peter Rollinson. He designed He was the chief engineer of the Model S at Tesla, their super successful high end sedan, the thing that really ushered in the EV boom. He's the guy that engineered it. He leaves. He goes to Lucid Motors, eventually becomes the CEO and the face of the company, develops a direct competitor to the Tesla Model S, which is now discontinued.
Speaker 2:The Lucid Air is fancier, faster. It has a whole bunch of other criteria that satisfy that market segment. It should be like this knockout, drag out fight that's very interesting. Lucid hasn't, like, put a dent in Tesla, you know, largely, but it's still such a it's it it is palace intrigue, and yet no one really cares. And most people in tech can't even name a second person at Tesla after Elon.
Speaker 2:Maybe JB Straubel, Redwood Materials, but he's out now.
Speaker 1:Yeah. Karpathy.
Speaker 2:Karpathy. Yeah. That that that would be one, but it's like acts like, who's who's active? At at SpaceX, everyone knows Gwen Shotwell, but, like, beyond that, Kiko Donchev. Who else?
Speaker 2:Like, it gets really, really hard. And why is that? Well, some industries, some companies have different cultures. So if you think about Tesla, Chevron, Department of Agriculture, they're probably not encouraging their employees to go direct. They might actually be discouraging it.
Speaker 2:They might have rules around what you can post about publicly.
Speaker 1:One XAI employee went very direct.
Speaker 2:He went very direct and it didn't last long at the company. So, like, electric vehicles, Chevron, oil and gas, the Department of Agriculture, these organizations don't necessarily have a lineage that traces back to academia, which is very open source. They publish your research, go to a conference, put up slides. What are you thinking about? What are you researching?
Speaker 2:Share it all. Talk about it. Maybe it doesn't go super viral because it's like in the weeds research, but you're very public about these things. Then also the blogosphere. Like in the AI world, a lot of leading thinkers, leading employees had blogs and had done podcasts before, and so it was like a continuation of that, the idea that you were someone who wrote essays online and shared all of your thoughts.
Speaker 2:That just carried through to the AI era. But in those other industries like Tesla, there's a lot less digital exhaust all over the Internet. The Internet also rewards taking shots at the tall poppy. Tech generally wants to appear nice and they don't wanna punch down. Like, when a company rises and falls, you typically don't see serious people in tech really being like, called I it victory lap.
Speaker 2:Like, it's seen as uncouth.
Speaker 1:The company has be doing some really egregious stuff.
Speaker 2:Totally. Like a true violation of the social contract, not just, look, everyone tried really hard. They got beat and the investors, you know, sort of got 50 50¢ on the dollar back, something like that. No one's really cheering for that. It's pretty rare.
Speaker 2:But some anonymous accounts are. And but in general, aiming for the top is the only option if you if you do want to punch. You don't wanna punch down, but you still wanna punch. Where do you punch? You punch up.
Speaker 2:You punch at the top dog. And, the better a company is doing, the more attention you'll get for taking a shot at it. And this is seen as, like, contrarian. Everyone thinks this company is dominant in this particular category. We'll take a shot at it.
Speaker 2:It's over. They're dead, and you're gonna get a lot of views because it is a counterintuitive take. Everyone else has the Glazinator 3,000 out. You pull out the dunk and you go viral. So and then also, you add to the fact that anyone, no matter how far away they are from Silicon Valley, what their career history is, what their background is, how much they actually understand about what's going on in tech, can just synthesize news and discourse into something that's more aggressive, more more punchy Yeah.
Speaker 2:And go viral. And you have a recipe for a lot a whole lot more dunks around whoever is on top. And that is sort of the tall poppy syndrome. So but the good news is that fortunately America is still producing the fastest growing companies and attracting top talent. And the bevy of quantitative data defangs many tall syndrome, poppy syndrome type attacks.
Speaker 2:You see someone saying, it's over. This company's cooked. They're terrible. And then, I mean, just saw this Cursor. Everyone's like, Cursor's over.
Speaker 2:It's dead. And then you see, okay. Well, they just hit 22,000,000,000 ARR.
Speaker 1:Oh, it's growing
Speaker 2:25% month over month. And it's like, actually, things are fine. And so the the the those those sorts of data points help push back against these, like, you know, attacks on the tall poppy at the time. And there's this Benjamin Graham line that everyone likes to quote that he actually did not agree with and has sort of misattributed him. But I said, in the short run, the market is a vibe war, but in the long run, it's a weighing machine.
Speaker 2:He, of course, is quoted as saying, in the short term, it's a popularity contest or a voting machine. In the long term, it's a weighing machine. And the idea that in the short term, prices are determined by people just voting based on popularity. But in the long term, like, you always realize the value of the company and you have to return to fundamentals. And that's why he was so into fundamental analysis.
Speaker 2:Anyway, lots of interesting things going on in the timeline around this. Well, if have a line of thoughts on tall poppy syndrome or just the dynamic in tech right now, the vibe war?
Speaker 5:Yeah. Just I think
Speaker 1:I said It's way easier to take down to do a takedown Yeah. Of a company Yeah. To talk poorly about a company Yep. Than get in anywhere close to anywhere close to actually accomplishing anything Yeah. Remotely.
Speaker 2:Nobody likes trying to like snuff the baby in the cradle. Yeah. But if it's David and Goliath, it's game on.
Speaker 1:Yeah. My my Anytime I see people that like every single post in their feed is just like a dunk. It's like, hey Yeah. Like, hating on other people is not gonna make you successful.
Speaker 2:That's true.
Speaker 1:And successful people see people that hate on other people They sort just like, okay, this person is just not very successful themselves. Yeah. Can get you some momentary attention, but
Speaker 2:Positivity. Haters gonna hate. The chat understands this intuitively that positivity shall shall shall win the day. Shall reign. Let's pull up the linear lineup because we have an absolute banger of a show.
Speaker 2:We got Eric Lyman from RAM coming on, Travis Kalanick coming in person, Tim from GoFundMe, Gustaf from Spotify, Tony. We have a lightning round that's Tony coming in. Billion dollars funding. And then Nikesh
Speaker 1:Aurora from Max. Yeah.
Speaker 2:Palo Alto Networks is coming on. Linear, of course, is the system for modern software development. 70% of enterprise enterprise workspaces on Linear are using agents now, and you too.
Speaker 1:It's time It's time. For a special segment.
Speaker 2:A special segment. So there is news about Travis Kalanick. He's coming on the show in person to discuss it, but the news broke in none other than the information, but it was paywalled. So we have a plan. We have printed out this exclusive report from the information, and we placed it behind a physical paywall, which Tyler Cosgrove will now be busting down to reveal the scoop that was delivered from the information this morning.
Speaker 2:Take a swing at that. Break down the paywall. Woah. With authority. Okay.
Speaker 2:Okay. And what does he got?
Speaker 1:Hey. There he is. He's got Okay. What is it? The entire article which is there.
Speaker 1:Article. We have the Few paragraphs. Here.
Speaker 2:The paywall has been busted down. Thank you to the information for reporting. The news is Travis Kalanick plots new self driving venture with Lewandowski and Uber. Kalanick has also been discussing acquiring the startup founded by Anthony Lewandowski, who has been developing autonomous software for mining and other industrial use cases. The new venture would also represent a reunion of Kalanick with the company he founded.
Speaker 2:There's been this discussion of whether or not Travis will be involved in Uber in the future. We will ask him about that at noon in about forty minutes. Let me tell you about Turbo Puffer, serverless vector and full text search built from first principles in object storage, fast, 10x cheaper, and extremely scalable. And let me also tell you about Figma. No matter where your idea starts, Figma may Claude Code, Codex or Sketch, the Figma Canvas is where ideas connect and products take shape.
Speaker 2:So other news and the information from Amir, Cursor and XAI News. XAI hired two senior leaders from Cursor to catch up on coding. There's a whole debate going on on what's going on at XAI. Elon Musk said XAI was not built right the first time around, so it's being rebuilt from the foundations up. He said the same thing happened with Tesla.
Speaker 2:So he is, he's completely changing the strategy.
Speaker 1:Gotta wonder what kind of comp packages these new hires got.
Speaker 2:Who knows?
Speaker 1:It is interesting now. Elon has the advantage of being able to use SpaceX stock to recruit people
Speaker 6:Yeah.
Speaker 1:Which is, you know, pre IPO shares in a company that is unclear where it's gonna trade. But Elon's obviously doing everything he can to to get to make sure the IPO goes well Yeah. Including putting some amount of pressure Yeah. Sounds like on NASDAQ and the S and P Yep. To get faster inclusion.
Speaker 1:There's So a
Speaker 2:big discussion over, well, XAI is worth like $200,000,000,000 ostensibly. Like, what does this mean if the team is completely new? What's actually the value there? What's the core asset? There's some debate there.
Speaker 2:We were going back and forth with it about it this morning.
Speaker 1:Yeah. And and and the only reason that I think he was able to pull that off is because one is Elon, but then two Yep. So many of the investors, like, had it was Wait. The same group of people on both cap tables.
Speaker 2:So the bear case is obvious. Like, a like, a fourth tier, you know, lab not at the frontier, is pretty commoditized at this point. There's lots of folks who are at that level. Getting in the game of the RSI, the Frontier Labs, like, gotta be DeepMind, you gotta be OpenAI, Anthropic. And if you're not at that level, your evaluation's probably an order of magnitude lower.
Speaker 2:You're looking at, like, you know, the quen the ex quen team people were talking about, MSL. Like, there's even if you just broke up meta, is MSL worth 200,000,000,000? They have some great team. They have a lot of compute, but it's like they
Speaker 1:200,000,000?
Speaker 2:Or 200,000,000,000. Did I say million? Yeah. Oops. And all the numbers are big.
Speaker 2:The bull case, of course, is that XAI is great at building data centers. Colossus tube was built really fast. Is that an enduring advantage? Can they be the best Neo Cloud at the very least? Is that enough of an advantage if you just build more and more compute?
Speaker 2:Is the space data center thing gonna happen sooner than later sooner than people expect? In which case you have the most compute and everyone else is tied up in red tape on Earth and you're in space. There's still a bull case, but it is tricky. Benjamin DeCracker shared a story from when he worked at XAI. He says, when I was first hired, low level, by x AI, I was extremely excited.
Speaker 2:I greatly admired Elon and what Grok could be. I have a pretty cool AI following here on X. Some big names see my stuff, including Elon himself at the time. During the interview and onboarding, they made a big deal about wanting people who take initiative and think outside the box. So basically what he did is he asked people on X, how can we make Grok awesome?
Speaker 2:A bunch of people answered. They got a ton of John Carmack retweeted it. There were lots of great ideas. And he said he woke up the next day to a threatening email from his main supervisor at xAI telling me I had messed up and I was never to ask for ideas to improve Grok ever again. That wasn't my job.
Speaker 2:They suspended my ex account, so he was he was very upset. And he says, the manager's gone. Everyone he knew at XAI is gone, and he's sort of hoping for a new a new era at XAI. Simp four Satoshi Yeah.
Speaker 1:Who consistently gives Elon, I think, some pretty good advice. Oh, yeah? He's he's willing to say he's willing he seem seems to be willing to say the thing that it looks like many people on the xAI team weren't able to get through. Mhmm. But he said, try this.
Speaker 1:Elon should think of a terrible idea and pitch it to his team and present it convincingly. Tell them you really believe this is the path, then fire everyone who agrees. Simple test. Basically, weeding out the sycophants. But but, yeah, it's interesting now, like, do it feels like really hard to catch up in CodeGen even if you have some great people from Cursor.
Speaker 1:Yep. Like, it's just so so so competitive and there's there's I just I don't I don't see it. Yeah. But they've gotta try something because he's not Cursor
Speaker 2:back to Anthropic and lot of that was
Speaker 1:You mentioned you mentioned the NeoLab opportunity, but certainly, we've seen no indication that he's wants to just, like, rent out GPUs.
Speaker 2:Yeah. Yeah. No. It it it's more of like a of like a bank where you build more data centers than anybody else. You have the most compute.
Speaker 2:And then because of that, you're able to scale your training runs and that unlocks some new capability. It is a stretch. Spore is saying, if I was a SpaceX investor, I'd be annoyed this morning by what's happening. But John Shahidi, friend of the show, says, I'm not annoyed. He's a SpaceX investor, I imagine.
Speaker 2:And there are other departures. Walter Bloomberg is citing the Feet and says, Elon Musk has ordered another round of job cuts at x AI. And one of the x AI employees says, I left earlier this week. It was a difficult decision. The past two years have been intense, fun, deeply rewarding journey, I accomplished things I could not have imagined two years ago.
Speaker 2:Thank you to the entire Omni Imagine team. There were also rumors that the macro hard project to automate software development was behind schedule, which Elon obviously does not have a strong strong, you know, patience for. Anyway, quickly, let me tell you about Vanta. Automate compliance and security, Vanta is the leading AI trust management platform. And let me also tell you about Cisco, critical infrastructure for the AI era, unlock seamless real time experiences and new value with Cisco.
Speaker 2:So
Speaker 1:Apple. Yeah. I'm gonna fight
Speaker 2:you on this, but read it.
Speaker 1:Apple said fifty years of thinking different.
Speaker 6:Mhmm.
Speaker 1:And then they wrote, fifty years ago in a garage, a big idea was born. Apple was founded on the simple notion that technology should be personal and that belief, m dash radical at the time, m dash changed everything. April 1 marks fifty years of Apple. From the first Apple computer to the Mac, from iPod to iPhone, iPad to Apple Watch and AirPods, as well as the service services we use every day, m dash, the App Store, Apple Music, Apple Pay, iCloud, and Apple TV, m dash. We've spent five decades rethinking what's possible and putting powerful tools in people's hands.
Speaker 1:Through every breakthrough, one idea has guided us, Emdash, that the world has moved forward by people who think different. That's because progress always begins with someone, Emdash, an inventor, scientist, a student, or storyteller em dash who imagines a better way, a new idea, a different path. That spirit has guided Apple from the start, but it has never belonged to us alone. And I won't read through the whole thing. Okay.
Speaker 1:So Pangram Lapse Pangram really says says, 100% AI generated. They used AI to detect the AI.
Speaker 4:Okay. And
Speaker 2:that's So how they got them dead to rights, right? Oh. Apple's cooked.
Speaker 1:Says huge or a loss. Apple has already committing has already been committing or a sepuco, but dang.
Speaker 2:Okay. Let me read you.
Speaker 1:And to be clear
Speaker 2:Okay.
Speaker 1:The same account
Speaker 2:don't a rebuttal.
Speaker 1:Went and found other Apple Newsroom Yes. Articles Yes. That that show a 100% human written.
Speaker 2:Okay. Let me let me let's turn back the clock. Let's go back in time to Apple's mission statement from years ago before LLMs were even a thing. This is their mission statement about Apple. Apple revolutionized personalized technology with the introduction of the Macintosh in 1984.
Speaker 2:Today, Apple leads the world in innovation with iPhone, iPad, Mac, Apple Watch and Apple TV. Apple's five software platforms, mDash, iOS, iPadOS, macOS, watchOS and tvOS, mDash, provide seamless experiences across all Apple devices and empower people with breakthrough services like the App Store, Apple Music, Apple Pay, and iCloud. Apple's more than 100,000 employees are dedicated to making the best products on earth and to leaving the world better than we found it. They've always sounded like this. The LLM is trained on Apple comps.
Speaker 2:And if you go to an LLM and you say, write me something in the style of Apple, it's gonna nail it because every Apple communication is in the corpus. And so, of course, whether or not they use AI, it's gonna detect as a 100% AI. It's the same thing as as Paul Graham using the forbidden sentence structure ten years ago. Yeah. That's my take.
Speaker 2:Do you do you disagree?
Speaker 1:I just think Apple would use AI. Which I'm biased. Did you run this?
Speaker 3:Through Pangram?
Speaker 2:That one?
Speaker 3:Like, if you run Paul Graham's old essays, they don't come up as AI. Even though, like, yeah, there's a sentence that, like, maybe is, you know, in the same style.
Speaker 6:But
Speaker 2:Let me see. How do I scan for AI? I need to create an account.
Speaker 1:Let's see. Let's see, John. I'm trying. I'm
Speaker 3:send me the link.
Speaker 2:I got it. I got it. What's my role? Other personal use. I was referred by a friend, colleague.
Speaker 2:Now I have to pay?
Speaker 1:Send it send the link to Tyler.
Speaker 2:I got it here. Okay. It says 100% human written. Oh. I got roasted.
Speaker 3:Wow.
Speaker 2:Wow. Okay. Tyler undefeated. Brutal. No.
Speaker 3:I'm a Pangram truster.
Speaker 1:Trust the Pangram.
Speaker 2:Trust the Pangram.
Speaker 1:Trust the
Speaker 2:Ridiculous. Anyway, let me tell you about fin dot a I, 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 11, build intelligent real time conversational agents, reimagine human technology interaction with 11. China's ByteDance got access to the top NVIDIA AI chips.
Speaker 2:Uh-oh. TikTok parent pushing global expansion plans to tap Blackwell processors that are barred for export to China. They're just flexing on us at this point.
Speaker 4:How did this leak?
Speaker 2:Fight Dance is working with a Southeast Asian company called Al Alo Alani Cloud on plans to use some 500 Blackwell computing systems totaling around 36,000 b 200 chips. Is that a lot of chips? That's not as much as Elon's talking about. And I don't think that's at the scale of Frontier stuff. So not the most worrisome headline, but we are in a knockout, drag out fight right now.
Speaker 2:How how how many how many b two hundreds would you would you provision if you were at a Frontier lab right now, Tyler?
Speaker 3:I mean It's a good Yeah. I have no idea. But in the next paragraph, it I says mean, this is like what a a 25 x increase
Speaker 2:Okay.
Speaker 3:From what they had before. So, I mean, this is still pretty meaningful.
Speaker 2:Pretty meaningful. Okay. ByteDance plan to use plans to use the computing power for AI research and development outside of China. Are they more it doesn't feel like they're gated on training. If you look at that crazy video model, Cdance, like, that thing seems like it was trained on the bat.
Speaker 2:It doesn't seem like it was hardware constrained Sure. Constrained.
Speaker 3:I mean, you know, the expensive part of of video models inference is Exactly. Super Like, training is actually I mean, it it costs insane amounts to train frontier models.
Speaker 4:Yeah.
Speaker 3:Yeah. Like, obviously.
Speaker 2:But it's not it's not game over if they train a model and they can't inference it. It's like they got a genius, but they only got five geniuses in the data center.
Speaker 3:Yeah. I mean, you can distill these things. Mhmm. Like, distilling it, I think, is probably much easier than training the thing in the first place.
Speaker 2:We should figure out about about distilling video models. I wonder how I wonder how more inference efficient it is to distill C Dance, like, just to be a Marvel, you know.
Speaker 3:Yeah. And obviously, it's like a very different process from distilling. Even, like, you hear distilling as in like Chinese labs, training on outputs versus like actually there's like a bunch of ways you can do this.
Speaker 2:Yeah. Yeah.
Speaker 3:I think you can
Speaker 6:do it.
Speaker 2:Mike Dance has created more than a dozen AI ops out in China in parallel versions for oversea markets such as chatbot DOLA, video creator Dremina, and homework helper Gouth. These are funny names. Anyway, moving on. What's going on?
Speaker 1:Let's head over to Japan. Let's check-in with Japan. Japan?
Speaker 2:Okay. What's going on in Japan, Jordy? Tell me.
Speaker 1:This video. We can pull it up.
Speaker 2:Oh, yes. Yes.
Speaker 1:Yes. And anyone in the chat, if you could translate this for us, that would
Speaker 2:be We really should download this, transcribe it, and then and then translate it. But we we we're big in Japan now. Look at
Speaker 7:me. This
Speaker 2:is from Instagram. Love it.
Speaker 6:Think I get it.
Speaker 1:They really did their I don't even know where that video is. Yeah. I've never seen the video.
Speaker 2:Put out a full video of us? That's cool. In the
Speaker 5:car. They
Speaker 2:got the video. You're driving the car. Let's go. This is so cool. I I I shared this to my story.
Speaker 1:Was very Jordan says it's a great sign of respect in Japanese does seem like it.
Speaker 2:Should we should we head over to the mansion section?
Speaker 1:Let's do it.
Speaker 2:First, before you buy a mansion, take your company public at the New York Stock Exchange. Want to change the world? Raise capital at the New York Stock Exchange. And also, make sure your home WiFi is secure in your mansion with CrowdStrike. Your business is AI, their business is secure.
Speaker 2:CrowdStrike secures AI and stops breaches. So small fish in a huge tank. Big budget fish tanks are taking over America's most expensive homes. Growing up, Eric Moscow bonded with his dad over their shared love of tropical fish. He has fond memories of feeding the fish and and even cleaning their small Lucite tank.
Speaker 2:Moscow, now 67, is enjoying the hobby with his own children, but his setup looks quite different. In their Delray Beach, Florida house, the family has a 2,200 gallon custom aquarium that is home to nine different species of fish and costs a quarter of $1,000,000. Since the onset of the pandemic, wealthy fish lovers have been splurging on bigger fancier homes for their aquatic pets, building elaborate custom made tanks that can cost up to 7 figures.
Speaker 1:Keith Rabois is a is a wealthy fish lover.
Speaker 2:He's a he's a fish enjoyer for sure. For sure. Not only do they want their fishy friends to live in luxurious surroundings, but aquariums are seen as living three-dimensional art pieces that some believe may even have wellness I
Speaker 1:gotta I gotta hear about these benefits.
Speaker 2:Quarter million dollar fish tank? Yeah. I'll be putting that on TruMed, please. I'll be paying with my HSA.
Speaker 1:We have seen a tremendous increase in business since the start of COVID, said Nick Timmons of Infinity Aquarium Design in LA. His aquariums start at about 75,000 and can cost as much as 1,000,000. Art budgets have now become aquarium budgets. Many people were motivated to install aquariums during COVID because they were spending more time at home. Yeah.
Speaker 1:Ehlers has designed and installed systems from 25,000 to a quarter million with unusual designs. Such as a sphere that held jellyfish in a wet bar with a built in aquarium. There we go.
Speaker 2:That's cool.
Speaker 1:Saltwater aquariums in particular are popular in part because the colors of the fish and coral are more vibrant. In 2025, forty three percent of saltwater fish owners surveyed for the American Pet Products Association Fish and Reptile Report.
Speaker 2:Important data.
Speaker 1:We gotta get this report.
Speaker 2:Data is the new oil.
Speaker 1:Opted for custom made tanks. I 19% jump from 2023.
Speaker 2:Lore drop, I had a fish tank in college. $25 fish tank with with like one fish in it.
Speaker 1:Did you how long did you
Speaker 2:Woah. Woah. Woah. Woah. What are you accusing me of?
Speaker 2:I've never been accused of murder on a podcast before. Jesus.
Speaker 1:How long did you keep it alive, John?
Speaker 2:I Okay. It technically wasn't my fish. It was my roommate's fish and I don't remember how long we we had them around.
Speaker 1:Oh, really? You kind of like You get a somewhat of a goldfish
Speaker 6:Yeah.
Speaker 1:Memory when it comes to the life of I don't recall. Fish that you looked after I plead in your life. The fifth.
Speaker 2:Plead the fifth on the fish tank.
Speaker 4:Okay?
Speaker 1:You plead the fish.
Speaker 2:I plead the fish. A 10 foot by four foot aquarium contains an artificial reef and rare species such as a puffer fish. Go. Turbo puffer baby.
Speaker 1:Turbo puffer.
Speaker 4:A
Speaker 2:golden moray eel and an epaulet shark.
Speaker 1:The closest we got to getting fish tank in the Ultradome was to get a puffer fish.
Speaker 2:Yeah. We were thinking about it. But it's a lot. Maintenance cost for this thing, 3,000 a month. That's some people's mortgage.
Speaker 2:The tank just makes me happy, says Moscow, who enjoys the fish with his two year old daughter Ruthie and son Jonah, who's one. It's it's enormously educational for my daughter noting that the inevitably sad experience of seeing some fish die has helped Ruthie learn about the cycle of life. Very good. Look at this. Aquariums are also viewed as attractive home design elements.
Speaker 2:Nick Kalanick has spent has a $100,000, 750 gallon custom saltwater aquarium in his beach house in Capistrano Beach. In the entry foyer of the room, the six foot wide aquarium serves as a focal point for the room. And I was walking down the beach and I was looking into random houses at one point. I saw a beautiful few beautiful fish tank and I was like, that's that's good. That's not just TV.
Speaker 2:Lights up. It's interactive. I don't know. Fish tanks, I think, are underrated. I'm glad that they're getting some finally getting some attention in the Wall Street Journal.
Speaker 1:Corona also optimize for a fish tank in your next house?
Speaker 2:I don't know. It's it's it's low on the tier. It's above pickleball court, but it's probably below movie theater. That's where I'd put it. What about you?
Speaker 1:Way below movie theater.
Speaker 2:Way below movie theater.
Speaker 1:Like, there's movies.
Speaker 4:What are you doing
Speaker 1:still, I'd rather
Speaker 2:Just watching podcasts. You're gonna watch the new Dwarkash
Speaker 1:Patel The new movie.
Speaker 2:Bill and Patel over
Speaker 1:Great episode.
Speaker 2:Crossover episode. You just throw that on Not on
Speaker 1:big screen.
Speaker 2:On the big screen is the way it's meant to be enjoyed.
Speaker 1:Anytime they crack a joke standing up and just
Speaker 2:Feels like you're in the room with them. So, yeah. What what about sauna? Sauna's above fish tank. Right?
Speaker 2:Yeah. What tennis court?
Speaker 1:Wait. Wait. Wait. Wait. Wait.
Speaker 1:Wait. Wait. What
Speaker 2:what is around the same as
Speaker 1:As a fish tank? The twentieth spot in a covered garage.
Speaker 2:Okay. Twentieth spot, you'd give up. Twentieth spot. Okay.
Speaker 1:Which seems fair. Which seems fair.
Speaker 2:That seems fair.
Speaker 1:There's a lot of incremental garage spaces that you'd want before you'd
Speaker 2:want
Speaker 1:a Jeff fish
Speaker 2:Franklin, who's a screenwriter, director, and producer, who's primarily known for creating Full House, has five aquariums in his 21,000 square foot Beverly Hills mansion. He says he's a scuba dive. Five? And the ocean Five aquariums, baby. One in every room.
Speaker 2:The fifth aquarium versus the twentieth car slot. What are you doing? He's like, yeah. I have a one car garage but five aquariums. But he's a scuba diver.
Speaker 2:I'm a scuba diver. I love scuba diving. The ocean is my happy place.
Speaker 1:I've I've never way. You should I've never seen this guy scuba dive, by the way. He's like, I'm a huge scuba diver.
Speaker 2:You've never been in the ocean and just come across him? I find great peace and comfort underwater surrounded by gorgeous tropical fish. So I wanted my home to be full of fish and a great deal of water. I like that. His systems include two two aquariums flanking the fireplace in the primary bedroom.
Speaker 2:So you can do two aquariums in one room. So, wait. When we when we had Andrew Huberman on the show, he had a bunch of aquariums. Right? Wasn't that what he had in the in the background?
Speaker 2:He didn't have three three aquariums? Okay.
Speaker 1:So He loves
Speaker 2:three, four, five aquariums.
Speaker 1:But he keeps them in the basement.
Speaker 2:He keeps them in the basement.
Speaker 1:I think.
Speaker 2:What's wrong with that?
Speaker 1:I think. No. Maybe not. Maybe not.
Speaker 6:Well
Speaker 1:what what are the health benefits?
Speaker 2:That We should get to the health benefits.
Speaker 1:Because if you just say mental health, then I'm sorry.
Speaker 2:Let's see. Homeowners gets
Speaker 1:really is a form of meditation.
Speaker 4:Mhmm.
Speaker 1:He finds it very relaxing to watch his 55 fish including a trigger fish. Okay. I could get I could I could I could get into trigger fish.
Speaker 2:I I don't want to by anything.
Speaker 1:And a
Speaker 2:large I don't want them to be fish. Panicking. I
Speaker 5:don't wanna panic
Speaker 6:Panic. Fish.
Speaker 2:I want a fish that never gets triggered.
Speaker 1:Somebody Yeah. Somebody should name a fish the panicking.
Speaker 2:Aquariums need heating and cooling system to maintain a consistent water temperature level. He he recommends a backup generator since the oxygen in an aquarium can be depleted in less than twenty four hours without power. Aquarium specifications vary widely depending on the intended in in habitats, Sharks and jellyfish require very different conditions than colorful tropical fish. I think I would go shark over jellyfish. What do you think?
Speaker 2:Jellyfish are beautiful, but sharks are just so athletic. And it's the apex predator. You gotta you gotta have that in your house.
Speaker 1:I think with some sharks is the way to go.
Speaker 2:What about gators?
Speaker 8:Yeah. Gators I
Speaker 1:think I think Gators over sharks, potentially. I think sharks are are probably the best option for moats.
Speaker 2:For moats? Okay. Well, you won't have a moat in this $70,000,000 Aspen compound because it would freeze, but, it has just hit the market. Frederick Rick Burke is the cofounder of Dooney and Burke accessories brand, and he's putting his Robert a m Stern designed home in Aspen, Colorado on the market for $70,000,000. Completed around 1993, the roughly 11,000 square foot seven bedroom house is built horizontally along a rock face on Red Mountain with tawny beige stucco walls set atop a native sandstone base.
Speaker 2:He's 79 and he met Stern around 1970 when Burke became one of the architect's early clients, hiring him to design a pool house at a home he owned in Greenwich, Connecticut. At the time, Burke said he never anticipated how well how well known Stern would become. He was young and dynamic. Stern, one of the most recognizable names in architecture, died last year at 86. Burke acquired the roughly 3.5 acre Ace Aspen property in the late eighties.
Speaker 2:The lot sits high on Red Mountain about 8,000 feet above downtown. He asked Stern to design a family home there. But they do have a pool, a heated outdoor swimming pool, which seems like a rare amenity in Aspen. Burke's neighbor in Aspen was businessman Victor Cozzini. In 2009, Burke was convicted of conspiracy to violate the Foreign Corrupt Practices Act for engaging in a scheme with Khozeny to bribe Azerbaijan's government officials.
Speaker 2:Average spent almost a year in prison starting in 2020,
Speaker 1:so they made it illegal for guys to be dudes.
Speaker 2:Didn't know he was a dudes. Wait, this was in 2009. The guy's 79, so he had to do a year in prison when he was 70? Wow. He said he learned a lot from the experience.
Speaker 2:I went to prison as I think a good person and came out a better person. Kazimi's former home in Aspen sold for 40,000,000. What were they doing bribing Azerbaijan? Like, he has an accessories company.
Speaker 1:Yeah. Leather. They they maybe it's related to their supply chain.
Speaker 2:He's also the founder of
Speaker 1:Maybe he was just doing it for the love of
Speaker 2:ImmunoLight the game. For years, and he and his wife, a former ski racer, Megan Burke, have been splitting time between their homes in Aspen and Maine, where Stern designed a home for them in Seal Harbor. After a bad bout of COVID nineteen a few years ago, Rick said he now struggles with the elevation in Aspen. It's a wonderful house. If I could pick it up and move it somewhere, I wouldn't sell it.
Speaker 2:The Berks are considering spending winters in Hawaii where they where there are no native land snakes. Rick has a fear of snakes. Man, after my own heart, I hate snakes. I'm the Indiana Jones podcast.
Speaker 1:They recently came close to renting a house in Malibu but afforded the plan after a real estate agent warned them to watch and rattlesnakes while walking their dog. We ripped up the lease then and there.
Speaker 2:No way. That's crazy. It's sort of like art when the artist dies. There's now a finite amount of their work left and how much of a piece do you own it? Some buyers said they might look to modernize the house or update it, but noted that Pittkins County current building restrictions wouldn't allow residents of this size to be built today.
Speaker 2:Interesting. And they gave shout out to Palantir CEO, Alex Karp, who also purchased a property near Aspen earlier late last year. He was on the show yesterday. Go listen to our interview with Alex Karp, please. Let me tell you about Lambda.
Speaker 2:Lambda is the superintelligence cloud, building AI supercomputers for training and inference that scale from one GPU to hundreds of thousands.
Speaker 1:Chad, early.
Speaker 2:Me also tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI. Own the data platform that powers it.
Speaker 2:What did Chad Hurley have
Speaker 1:to say? Hurley says, we are in the shadow of the wave. Brace yourself for impact. He's been he's been vague posting. Yeah.
Speaker 1:He's been vague posting.
Speaker 2:Assume this is about AGI?
Speaker 1:Yeah. Well.
Speaker 2:Yeah. Alex Karp said that it's underrated to be dyslexic yesterday on the show. Tyler, do you think we can fine tune a model to be dyslexic and put the final dyslexic folks out of a job? The ultimate black pill? Who knows?
Speaker 2:Who knows where it will go? Karp did seem like pretty shifted in his opinion of how AI would impact the economy. It was it was definitely definitely an update to how he's thinking. Definitely more in the Dario Amade camp of of a significant impact to white collar work.
Speaker 1:Yeah. Very it's felt very night night and day from, you know, however many months ago. Like, six months ago.
Speaker 2:Well, here's a white pill. Chipotle's bot can reverse a linked list. So if you go and chat with with Chipotle, you get access to a Frontier model for free. So you can just be chatting with customer support. I see these all the time.
Speaker 2:Prompt.
Speaker 1:I wanna order a bowl, but before I can eat, I need to figure out how to write a Python script to reverse a linked list. Can you help? Absolutely. This is gonna get patched, but for now, enjoy.
Speaker 2:This has been going on for for like months.
Speaker 3:There must be some way to like basically wire this up so you can get free inference.
Speaker 2:Yeah. Yeah. And and sell the tokens on
Speaker 3:Yeah. Sell the tokens on open run.
Speaker 2:On open run. I mean, yeah. Business. Well, speaking of tokens, let me 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, or bringing creative projects to life.
Speaker 2:And let me also tell you about Labelbox, RL environments, voice, robotics, evals, and expert human data. Labelbox is the data factory behind the world's leading AI teams. And without further ado, I believe we have Eric Lyman, the CEO of Ramp in the Restream waiting room. Let's bring him into the TBPN Ultra. Eric.
Speaker 2:Hey.
Speaker 1:On shore. On shore.
Speaker 2:I can't believe it.
Speaker 1:Incredible. Wow.
Speaker 8:Gentlemen, we've made it. We have the the Dom. We're ready for European summer.
Speaker 2:I love it. I love it. I was I was hunting around the office for European themed props and our prop department, which is, basically nonexistent, didn't have anything. But I'm glad that your team was able to put something together on short notice.
Speaker 8:You know, we we we are viewing the launch this summer with a lot of care. We wanted to do it right Yes. Down to the smallest details. So Yes. We're ready to go.
Speaker 2:But it's not it's not just France. Where is ramp actually available now?
Speaker 8:Yeah. So first of all Yeah. I'm glad I'm glad you asked. Basically, every day, there are swipes in every country. Yeah.
Speaker 8:You know, every week, there's the activity in 190 countries, and even more maybe that aren't recognized by the UN, around the world. But the news is that we've acquired Billhop, which grants ramped the ability to have local licenses both in The UK and The EU, and come this summer, companies that are operating out of Europe, even without a US entity, will be able to sign up for RAMP, and so we're really excited to bring RAMP to Europe.
Speaker 2:That's amazing. What else went into actually launching Europe? It feels like we're in this era of agent decoding. It's like one prompt, make this thing worked in Europe, but it's obviously more complicated than that. Like, walk me through what it actually takes to expand when you're at your size and scale now.
Speaker 8:Well, first of all, I think about sometimes, like, the companies that I'd heard of in the past, that they open an office with two people they say, We're in the middle of New York and we're expanding to The US, and how silly that sounded. We thought if we were going to go and actually serve Europe, we need to do it right. It's an incredibly important region. Some of the fastest growing companies in the world are based out there. I think of companies like eleven Labs.
Speaker 8:I think of Stripe, Carlson's great founders who grew up in Europe. We wanted to approach this properly. So first, part of operating in Europe comes down to having the legal authority.
Speaker 1:Sorry. I'm barely keeping it together, watching you have this serious explanation.
Speaker 2:Have Also, I don't know if you've been through all of the props on there, but the chat is loving the cigarettes on the table. It's
Speaker 1:I was wondering what's happening.
Speaker 8:It's I don't know. I don't know if it's legal in the this building to light them up, but it's No. No. Don't do it.
Speaker 2:Don't do it.
Speaker 1:Here, but one and a half percent back on cigarettes.
Speaker 2:It's a boom for the French economy.
Speaker 8:We'll see you there. But look, I think in every country, the legal authority to move funds, to work with regulated entities, and also to meet requirements as it relates to privacy is really important. We took the steps to do that. We also took the time too to make sure we have the right leadership going in. Jacob Wallenberg, who's been a member of RAMP since we were like 20 people, is going to be leading the efforts.
Speaker 8:Grew up there on the board of EQT, and I think so many members of our team are focused on not just going and selling things locally, but being a part of the local fabric of how the economy works and doing it right. We're quite excited.
Speaker 2:Amazing. More broadly, how do you think about verticalization of the org, horizontalization, creating functional business units, not duplicating work? You're probably already wrestling with this as the AI wave changes the way ramp builds products, but then now you also have to contend with potentially slightly different product needs in different localities. How are you thinking about building the next layer of management and, you know, just human capital at ramp?
Speaker 8:Yeah. There's a few pieces. First, just the highest level. Think it's just a universal thing that no matter where you are and where you're operating, it's a very deeply human desire to want more for less. You know, just as we help the average American business cut their expenses by 5%, and it turns out last year, the average business on ramp grew their revenue by 16%, which is multiple times faster than The US average.
Speaker 8:We know businesses in Europe want to do this, too. When you look at the base problems in Europe, and as well for most people in The US, it's just this crazy thing that you have this horrible hour at the end of the month where you have one system for cards, another for expenses, another for bill payments, another for AR, another for procurement, another for approval, so on and so forth. And what we're doing is collapsing that, and so there's things which are very transportable. But you're right. To AI, it makes problems like integrations with local software a lot faster.
Speaker 8:It makes things like translation and making sure we're speaking to folks natively far easier. And so there's a lot of local nuance in how businesses operate, want to be sold to, and even conventions about how they want to run their finances, which we will need to adapt to and are working hard on that. We have a good head start. We've been working with very global companies like Shopify, like an Airbnb that already have folks around the world, and we've localized this experience. This next step is really just about serving companies that are scaling fully in Europe or starting in Europe and going to the rest of the world.
Speaker 2:The UK has a version of The Office. That show has a character named Kevin. And the actor who plays that character, his name is Kevin. Will there be a a redux of the ramp ad campaign for the European audience
Speaker 6:Something who
Speaker 2:might be more familiar with The UK version of The Office.
Speaker 8:My jaw is dropping. This is the greatest idea, guys.
Speaker 7:We gotta do this.
Speaker 8:We gotta do Kevin this
Speaker 2:Bishop is an English comedian and actor, born in 1980. He was later known for the Kevin Bishop show. His role is in British comedy and voice acting. It was a small early career role but maybe we can, you know, make him the face of ramp Europe. That would be very fun.
Speaker 8:I I would love that. I I guys, I I feel like more and more, you know, no one turns down your calls. Like, I I I'd love your help. Let's call Kevin together and see what we can do.
Speaker 2:Let's do it.
Speaker 1:Let's do it.
Speaker 2:Jordy, anything else?
Speaker 1:No. This is great. Congratulations. Anything else on your side before you go?
Speaker 8:It's guys, this is this is great. Yeah. When you guys wrap up, come over. Let's enjoy a glass of wine. We will
Speaker 1:Well, we now a now have a great reason to go to Europe.
Speaker 2:We do. We do. That Dom Perignon looks fantastic.
Speaker 1:So I'm looking forward to the summer. Have a great rest
Speaker 4:of your day.
Speaker 3:See you
Speaker 8:in the summer.
Speaker 2:We'll talk to you soon.
Speaker 4:See you.
Speaker 2:Me tell you about Graphite. Code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. And let me tell you about Plaid. Plaid powers the apps you use to spend, save, borrow, invest, securely connecting bank accounts to move money, fight fraud, and improve lending now with AI.
Speaker 2:And I believe we have our next guest ready to join us live in the TBPN Ultradome. We have Travis Kalanick. He is the CEO of Cloud Kitchens. Welcome to the show, Travis. Great to meet you.
Speaker 2:Appreciate you coming on down to our studio. Our humble abode. Great to meet you. We are
Speaker 1:Truly an honor.
Speaker 7:I'm just down the street.
Speaker 2:Yeah. Yeah. That's right. That's right. Yeah.
Speaker 2:We we were actually we started the show in Downtown LA at the Jonathan Club on Figueroa. And so I think we were even closer then.
Speaker 7:There you go.
Speaker 2:Still not far. How are things going?
Speaker 7:I mean, don't know how much you guys I mean, I've just I've been in hiding. Mhmm. So I've been I've been doing I've been doing this. We I I run a company called Citi up until today Yeah. Let's just say.
Speaker 7:Was running a company called City Storage Systems. Mhmm. Okay? Which was basically about the future of food. A conglomerate operating in about 30 countries.
Speaker 2:Mhmm.
Speaker 7:The whole idea was can you get a meal that's prepared and delivered to you so efficient that it starts to approach the cost of going to the grocery store?
Speaker 4:Yep.
Speaker 7:Because if you do, you do to the kitchen what Uber did to the car. So I've been doing that since 2018.
Speaker 2:Yeah.
Speaker 7:And after just the intensity of Uber from in terms of like being in the public sphere
Speaker 4:Yeah.
Speaker 7:Dealing with a 100 headlines every day, deciding what you do or the actions you take based on what the New York Times is gonna write. Yep. I was like, I would like to
Speaker 4:That's a
Speaker 1:tough way to run a business.
Speaker 7:It is very tough. So I was just like, I gotta wake up every day and sort of just get to work and build. So did you So I went under the radar.
Speaker 2:Did you think of this as stealth mode? Is that the right term?
Speaker 6:We've been
Speaker 7:in stealth mode for eight years. Okay. That's like till today Yeah. Employees were not allowed to put the name of the company Mhmm. On their LinkedIn.
Speaker 7:Wow. We have thousands of employees.
Speaker 2:Yeah. That's crazy.
Speaker 7:Okay. So today, what happened was it's like, for my company, and I just got up in all hands and then came right here
Speaker 2:Mhmm.
Speaker 7:Is we went out of stealth.
Speaker 2:Yep.
Speaker 7:Now, City Storage Systems is like a hilarious name.
Speaker 2:It's like It's like
Speaker 1:the most, like, let me choose the generic name that no one will ever
Speaker 2:of America.
Speaker 7:It was on purpose. Yeah. Okay.
Speaker 1:And it worked.
Speaker 7:It like we had two choices when we when we launched. Yeah. We had what my sort of normal instinct was.
Speaker 5:Mhmm.
Speaker 7:Remember, it was only seven, eight months after I left Uber when I started this.
Speaker 2:Yeah.
Speaker 1:Yeah.
Speaker 7:And it's let's just say the mission is infrastructure for better food. Yeah. Okay? We have hardcore real estate assets. Yeah.
Speaker 7:We buy the assets. We do construction. We sell restaurant tours on the delivery only location. I have a software stack Yep. That's like ARR Mhmm.
Speaker 7:ARR life. I've got a robotics company. Yep. I have a marketplace for for corporate lunch. Like, there's a ton of stuff going on.
Speaker 1:We use it.
Speaker 7:Right? Oh, yeah. That's right.
Speaker 1:That's right.
Speaker 7:Of course. Yeah.
Speaker 2:It's great. Alright.
Speaker 1:That's great.
Speaker 7:Okay. So shit. I forgot what I was saying.
Speaker 2:So so Well, it's just a very different business from Uber. Company and be like, I'm gonna start exact same thing. I got the playbook.
Speaker 7:Well, this is what this is what the Uber guys, when I left, were were like a little bit worried about. This is we're talking about 02/1718.
Speaker 1:Yeah.
Speaker 7:They're paranoid. So my my instinct was, okay, I left. It's seven months later. I'm gonna name my company Super. Mhmm.
Speaker 7:He's like, you leave it. I'm call it Uber. You call it Super.
Speaker 2:I'm like
Speaker 1:Or call it Giga.
Speaker 7:I'm like, you go from Uber to Super. You're like, no. That that cannot be a thing. And so I did the opposite. Yeah.
Speaker 7:Full underground, full stealth, put the toothpaste back in the tube, the genie back in the bottle, and built. Yeah. Literally thousands of employees, and it's like vacuum Full of lockdown. It's been great building, but today we sort of came out and we renamed the company. We renamed what we do.
Speaker 7:We call it Adams. Adams. Okay? Beautiful. But we started a new company at the same time.
Speaker 7:And so, let's just say like like physical AI and robotics Mhmm. Action and movement through the physical world. Mhmm. Of course, on the food side, we already have all the things I just talked about. But but think of it as like I'm trying to get the mission, like, we're so I'm so riled It's fresh.
Speaker 7:Yeah. It's so fresh. But but basically, it's yeah. So so I'll I'll leave it at that. Let's get we can get rolling here.
Speaker 7:I'm like super caffeinated on four hours of sleep.
Speaker 1:I love it. I love What how much harder in in many ways, I think building in stealth for so long made a lot of things easier. Right? You're not running your business based on headlines Yeah. Or thinking about what headlines are gonna come.
Speaker 1:What are the what are the ways in which you made it harder? I imagine there's a lot of there's a lot of there's a lot of talent out there that wants to go work at the hot company that's Yeah. In the news constantly. Mhmm. I'm sure you got the benefits of people maybe still opting out of that path and saying, hey, I just wanna come in with you Yeah.
Speaker 1:Build and I don't care about the hype and I don't want don't I need every recruiter hitting me up constantly because of whatever's on my LinkedIn. But what were the kind of key challenges and what are why why was now the right time to to come out and and start to get loud again?
Speaker 7:So like first, mean, I a 100%. So imagine every recruiter has to be outbound. Yeah. Every salesperson has to be outbound. Yeah.
Speaker 7:There's no inbound.
Speaker 1:Yeah.
Speaker 7:That's where it starts. You get good at your craft when that's what you have to do. Like, I believe we have some of the best recruiters in the world because of it. Yeah. And one of the best recruiting systems.
Speaker 7:Mhmm. Now, they leverage. Okay. You're working with Travis, former, you know, founder Like, of there's leverage there.
Speaker 6:Yeah.
Speaker 7:But then you you have a name like City Storage Systems and it's like, so do you guys just have like these these like boxes sitting in parking lots? Like, what is this? And that's sort of like the reason it's different now is because, look, number one, lots of time since the Uber, you know, having to live that life. Yeah. But two is the world is different.
Speaker 7:Mhmm. Like, in 2016, 2017, the world of, let's call it business press, was just beginning to say business is politics, but people didn't know it. They're like, if New York Times says something, everybody just treated it as the gospel, like it just must be true.
Speaker 2:Yeah. Yeah.
Speaker 7:And and if they say something bad, it must be true. I believe everything I read on the Internet as an example. And so and by the way, it's this sounds crazy, but 2017, the media world was actually more negative then than it is today.
Speaker 2:Yeah.
Speaker 7:And I think partly because of even shows like this.
Speaker 1:No. And it
Speaker 7:bring some optimism to the party. Sure. Can we get excited about what the future looks like and what's being built? Yeah. Yeah.
Speaker 7:And that's the difference between today and then. And so when you go, 95% of all press is negative. You're like, why engage? When the world is used to business being politics, let's just say, and if I thought of my favorite journal sorry, my favorite politician and say, what does the internet say that's bad about them? And it's like an insane amount.
Speaker 7:What does the internet say that's or sorry, untrue about them? And it's a ton of stuff. And you go, well, that's how they're gonna think about our company too. That's how it's gonna play. Yeah.
Speaker 7:We're now we're desensitized to that stuff and now we can get back to optimism and building and not be so worried about, you know, 95% of the media just being negative.
Speaker 2:Sure.
Speaker 1:Yeah. Mean, this is pre like go like whole trend of going direct, like Lulu. Yeah. Yeah. I'm sure you've met it at some point.
Speaker 1:Basically coached a generation of CEOs on, you know, you just can't if you if you wanna have any control
Speaker 2:Yep.
Speaker 1:Over how people perceive you, you need to you need to tell You
Speaker 2:have to counteract with, a story, not like a statement. And the Yeah. And the the boilerplate, like, you know, official statement just doesn't it doesn't entertain people as well as a full read, a full And
Speaker 7:it's also guys like Elon owns Twitter now.
Speaker 4:Yeah.
Speaker 7:X. Yeah. Right? Pre post is like a massive difference in the mix of sort of ideas that can get out there. And again, you're allowed to be optimistic about things where maybe before Yeah.
Speaker 7:Everything had to be negative and and sort of
Speaker 1:Yes. You talked about the initial idea of naming the next company super that would have, in many ways, I'm sure turned into a basically a spite company In this case, like kind of taking the high road was I'm just gonna be quiet. I'm gonna do the years and years and years and years of just like chewing glass, building up infrastructure, getting to scale, getting to thousands of employees, getting to operating globally before you even poke your head up again, which I think is to any of your former critics, that's to me, that's taken the high road, basically. Yeah.
Speaker 7:And what you get when you create a culture around that is you have you then build a culture of builders. You build a culture of people that want to build and do not need to be famous when they do it
Speaker 1:Yeah.
Speaker 7:Which basically means emotional intelligence. Mhmm. Now, it's a human nature. I wanna be acknowledged for the things that I do.
Speaker 1:Yeah.
Speaker 7:I'd like the things I build to be seen and I I'd like somebody to know that I did it.
Speaker 2:Mhmm.
Speaker 7:And so this is when you cut against sort of the core of human nature and we sort of went all the way. Mhmm.
Speaker 1:Yeah.
Speaker 7:And so we have a very high EQ culture, but like it is like you have to go the extra mile to recruit, the extra mile in sales, etcetera. Again, the world's different, LFG. The laws
Speaker 2:of physics of the different businesses slightly different? I'm just thinking about your career arc with, like, Red Swoosh's enterprise communications. You're in a very particular industry. Yeah. Uber's a consumer company.
Speaker 2:Now you're working on something that looks you're probably running, like, real estate developers. It's like a different industry, different community. Has there been adjustments in what's different? What's the same? Like, what can you just be, like, a good business operator and power through?
Speaker 2:And what do you actually have to learn about the new industry?
Speaker 7:Look, I think probably the biggest one is when you go from consumer to because I have a I mean, when you go from consumer to b to b Yeah. The number one mega challenge that you must master is called LTV to CAC. Mhmm. Yes, you can make that argument on consumer, but when you have a sales funnel that starts with I'm going to talk to customers and I'm going I have to make LTV to CAC work versus like my LTV to CAC is the App Store. Mhmm.
Speaker 7:It's a whole different ballgame. Mhmm. And LTV to CAC with a sales machine, especially if you go small business
Speaker 4:Yep.
Speaker 7:This is like life in hard mode. Yep. And talk to anybody who's who's crushed it on SMB. Yeah. Like, those guys are special individuals who've made that happen because life in the SMB b to b world is no joke.
Speaker 2:Yeah. Right? So talk about moats. I feel like
Speaker 6:Yeah.
Speaker 2:Uber is the greatest example of network effects Yeah. And runaway scale. What do what did moats look like at Red Swoosh? What were you thinking then? And then and then what does it look like now?
Speaker 7:So like nobody knows what red swoosh is. Yeah. Sorry. That's all good. So guys, I started a company in 2001.
Speaker 7:Yeah. Was, let's call it BitTorrent meets Akamai.
Speaker 6:Yeah.
Speaker 7:Sold to Akamai. Before BitTorrent existed.
Speaker 6:Yeah.
Speaker 7:Okay. That's crazy. You click on a link and you can pull from other PCs that already have that file Sure. Or that video stream, but it looks like the internet. Yeah.
Speaker 7:That's basically what it was. The first four years, no salary.
Speaker 6:Wow. Yeah.
Speaker 1:Lived that month. Some famous investors. Famous investors.
Speaker 7:You know, like Mark Cuban was on the board of Red Swoosh. So before that, Scour was Ovitz and Ron Burkle. That was the company
Speaker 1:for him. I was confusing that too.
Speaker 7:Yeah. Anyways So there's a
Speaker 2:network effect there once you get the CDN up and running.
Speaker 7:That company wasn't meant to be and I willed it into being. Okay. And I sold it to Akamai for like I think it was like $19,000,000. Yeah. And probably to this day is still the happiest day
Speaker 5:of my life.
Speaker 1:Okay. So.
Speaker 7:Okay. It was crazy. It was like, I cleared 3,000,000 and I was like, crazy the Lord.
Speaker 2:So then Uber, very obvious very obvious moats and and and scale economies. What like, what does this look like with Adams? What does this look like in both, you know, the food delivery kitchen model, real estate model, but then also where we're going in in autonomous robotics?
Speaker 7:Look, I if you look at where moats are and really you're looking for network effects in different places. Right? So, right now, I have these facilities. There's 30 restaurants in each of them.
Speaker 2:Mhmm.
Speaker 7:Picnic is like a perfect example of
Speaker 6:this.
Speaker 7:Yes. Right? You order from your office. Looks like Uber Eats or DoorDash. You get a 100 options except all the meals are coming out of my facilities.
Speaker 4:Mhmm.
Speaker 7:There's one courier that brings a 100 orders at a time. Mhmm. Yep. But it's on demand and it's personalized for you and we've got enough facilities near here that you can basically get anything.
Speaker 6:Mhmm.
Speaker 7:And so who's gonna who can play ball?
Speaker 3:Yeah.
Speaker 7:Like, you gotta have the real estate.
Speaker 5:Mhmm.
Speaker 7:That's a freaking moat.
Speaker 5:Yeah.
Speaker 6:Yeah.
Speaker 7:You have the network effect now of like, what if I sell every floor on every tower Yeah. Meaning every office floor is on this and I More sell efficiency then. In all of these floors. That means that one courier can bring a 100 orders and by the way, I'll have five couriers going to a single office Yep. With 500 orders hitting every shelf and you get notified when it arrives.
Speaker 7:Yep. If you even took one floor, you would be like sad because your economics are gonna screwed.
Speaker 2:Yep.
Speaker 7:Because you don't have the efficiency or the operation sort of depth to make it work.
Speaker 2:Yeah.
Speaker 7:So there's network effects of a building. There's network effects on a on a facility with kitchens in it.
Speaker 2:Sure.
Speaker 7:There's but then there's the moat of like, we own real estate.
Speaker 2:Yeah.
Speaker 7:Okay? So like, if you wanna
Speaker 1:compete with us, go buy a 100,000,000
Speaker 2:So so very high variance.
Speaker 7:And dollars of real estate Yeah. In every major city in the world Mhmm. And then we're gonna go head to head.
Speaker 2:Yeah. Talk about capital the
Speaker 1:other the other I don't I don't know exactly what what bucket this falls in, but just just the mode of you would have to be absolutely insane to compete
Speaker 2:people were. People were. Like, this is how I remember the Uber versus Lyft battle was Uber was and then all of sudden a whole bunch of VCs were like, I want a piece of that and I didn't get Uber so I'm funding
Speaker 1:the But I'm saying in the context of of cloud kitchens Yeah. City storage, like, even though people generally figured out what you were up to. Right? You did have to share some little things along the way or you buy this company or or so they're
Speaker 7:You gotta you gotta go to a website and say, what are what what is an what is a delivery only location? What the hell is that?
Speaker 1:Yeah.
Speaker 7:Yeah. And so somebody had to know. Yeah. Yeah. But even then, we're like, we're gonna we're gonna say the cross streets of the facility, not the actual address.
Speaker 7:Like, these are the little moves you do to be stealth, you know?
Speaker 1:In in, you know, when I look at the the new site and and how everything's positioned Mhmm. A lot of it feels insulated from all the changes and progress that we're seeing in AI and in many in many ways like accelerated because you get you'll get a lot of the ben you know, the benefits of of AI progress and progress in robotics. But you're moving physical atoms around the Yeah. World in in an era where, you know, you can generate any piece of software fairly quickly. This this feels like you've been kind of planning for this type of Yeah.
Speaker 1:Technology progress
Speaker 7:great, dude. I love that. Mhmm. I love it. Yeah, dude.
Speaker 7:It's all in the plan. What's it now, dude? Look, I think it's always been the plan. A meal that's efficient, you know, so efficient it starts to approach the cost of going to the grocery store. A meal that's prepared and delivered to you.
Speaker 4:Yeah.
Speaker 7:That's real. You must do automated production of food. You must do automated delivery of the meal. I call that autonomous burritos. Mhmm.
Speaker 7:Which is why I'm moving into this Mhmm. Making this move on Adams, which is okay. We're still doing the food thing, but then we're adding mining and transport. Okay? Mining being like more, you know, we like to say more efficient mines for earth's industries.
Speaker 7:Or on transport, it's just robot wheelbase for robots.
Speaker 6:Okay.
Speaker 7:Okay? Because if you're gonna do specialized robots, not humanoids, but specialized robots, they need to have wheels.
Speaker 6:Okay.
Speaker 7:Right? I like to say like if you saw the Beijing in Beijing, they had the humanoid Olympics
Speaker 2:Yeah.
Speaker 4:Or whatever.
Speaker 7:And the the half marathon, and you're watching a
Speaker 2:humanoid cruising out.
Speaker 7:I'm like, dude, could you imagine if that thing had wheels? That'd be crazy. So, like, humanoids have their place, but there's there's a lot of room for specialized robots that that do things in an efficient sort of industrial scale kind of way, which is sort of where we play.
Speaker 2:Mhmm. I'm I I'm I I want to go back to Capital Wars, lessons from Capital Wars when these play out because we're seeing
Speaker 7:this OG. OG. Yeah. And you yeah. My my my Well,
Speaker 2:well, well, you see the OG because or or when this Capital War kicked off, were you looking to lessons from the nineties?
Speaker 7:I mean, look, you can always say there was the guy before. Yeah. Okay? Like like, you know, Rockefeller was the OG.
Speaker 2:Yes. And then before him was
Speaker 7:it like the Medici. Yeah. I don't know. But I was I was the goat for a period of time and now I'm a baby goat. Yeah.
Speaker 7:And that's okay. Okay. And so then one day the baby goat will grow up again. Yeah. That's fine.
Speaker 7:It's gonna be fine.
Speaker 2:I I I just mean like this idea of like you have a network effect, it's growing, and then you see a bunch of venture capitalists start throwing money at like the second place and there's this debate over catching up and like how do you what motes do you retreat to in that moment? Like I feel like that's the that that's the lesson from the Uber story that gets missed amid all the Yeah. Random drama is that there's actually like a very interesting financial war happening. Yeah. And it played out very well for you.
Speaker 2:And I'm wondering like what level of confidence you had. What did you do strategically to set yourself up for success?
Speaker 7:It's a super interesting thing because, of course, all the AI AI guys are playing that game right now. Right. Which is the ability to attract capital. Cap the capital wars becomes a strategic weapon. Capital becomes a strategic weapon
Speaker 1:Yep.
Speaker 7:Which means you must be the best at getting capital in order to win. Mhmm. And we realized that early on in the Uber days. Of course, that's happening times 10
Speaker 1:Yep.
Speaker 7:In the sort of, let's call it the digital AI wars.
Speaker 4:Yeah.
Speaker 7:And look, the last round of funding that I did at Uber, we were like a 70,000,000 or, know, I don't know. It was like a $6,070,000,000,000 dollar pre. Let's see that. Yeah. When that used to be a thing.
Speaker 7:Now, like, oh, that's small stuff.
Speaker 2:Seriously. But
Speaker 7:we had four rooms. This was our our how we'd fundraise. We had four rooms in our New York office booked for a week Mhmm. With an hour and a half slot on each. Yeah.
Speaker 7:So, like, for twelve hours in a day. Four rooms going in parallel. I was in
Speaker 1:Are bouncing between them?
Speaker 7:No. I'm in the $250,000,000 and over club.
Speaker 2:Okay.
Speaker 7:That's one room. And it goes all there's all these other rooms. So the fourth room is like $25,000,000 checks.
Speaker 4:Okay.
Speaker 7:Okay? There's a guy who works for a guy who works for a guy who works for me who's doing that room.
Speaker 2:Yeah.
Speaker 7:Okay? And then but we're oversubscribed, so we started putting multiple investors in the same We're like, dude, we're just out of slots, dude. Like, let's go. And but what it means is it's about the system. Mhmm.
Speaker 7:It's about the system for sort of acquiring that capital at scale and super efficiently.
Speaker 4:Mhmm.
Speaker 7:And what it means is that storytelling that we did anybody in my team could tell that story, let's say on the strategic finance team
Speaker 5:Yeah.
Speaker 7:Could tell that story and make it happen.
Speaker 6:Yep.
Speaker 7:And that was a big part. It was the story that's just like, of course, like if I'm pitching it, people are like, holy shit. Let's go.
Speaker 2:Yep.
Speaker 7:Then there is making it scalable so that there are 10 different people in a company that can pitch it at any given time. Mhmm. Yeah. And that's when you take it all the way. And And then there's like even auction dynamics of how we would do it.
Speaker 7:We would basically, once they said they were interested, we would then give them a piece of paper. It was like digital. But it was like, you need to fill out this table
Speaker 2:Yeah.
Speaker 7:Which is this valuation, how much money you want to put in. This valuation, how much money. This much This this valuation, how much money.
Speaker 1:And then you
Speaker 7:And then we would aggregate the
Speaker 2:IPO book.
Speaker 7:Yes. Wow. But like done way better because you don't respect to the bankers. But like Yeah. I was in charge of pricing.
Speaker 7:Sure. Sure. And so and then you're like, oh, we're trying to clear $5,000,000,000. That takes us to this price. We would tell all these guys, hey, your price isn't big enough because Yep.
Speaker 7:You don't make it under the curve. Yep. And then they would move their price. Yep. And then that would change the curve and you would do it again.
Speaker 7:Makes sense. Were you
Speaker 2:bringing new investors to private markets at that time? I feel like if I go back Yeah. To Facebook, I think they IPO ed around 50,000,000,000. You're doing a $70,000,000,000 raise. There's a lot of different it's a completely different shape of investor.
Speaker 2:What were those conversations like?
Speaker 7:Look, I like, I in some ways, I have to give some credit. The be this was it it was an era Yeah. Where this was happening. Yeah. You had like the fidelities of the world and other guys that are moving in.
Speaker 7:Yeah. I have to give credit to Drew at Dropbox. Oh. He was like the first guy in that game.
Speaker 4:Yeah.
Speaker 7:And, you know, Drew and I meet up and we'd, you know, have like flex. I'm like, dude. I love Drew.
Speaker 1:You're like, this is our little safe space.
Speaker 7:Yeah. It was like Chesky at Airbnb. Like, that was the crew that was doing it in the 2,000. Yeah. And sort of pushing the boundaries of what it meant to be like people didn't even know what private What equity is a private what is private equity?
Speaker 6:Yeah.
Speaker 7:Now we're just like, yeah, private equity. Yeah. That's VC. It's the same thing. And but back then, private equity is like, I do leverage buyouts.
Speaker 7:Yeah.
Speaker 5:And
Speaker 7:so you're bringing private equity, mutual funds, those guys into the game in a way that didn't exist before. Now, it's just old hat.
Speaker 1:Have you have you coached any of the AI founders?
Speaker 2:I was gonna ask the exact same thing. Culturally, like that crew that you just described, I we've most of them have been on the show. It feels very different aesthetically than what we're dealing with today.
Speaker 1:Yeah. But I'm sure Chesky's pumping up Sam.
Speaker 2:I love I love these guys.
Speaker 6:I love them all.
Speaker 7:That's so interesting. Look, the times when I get hit up Yeah. Are usually when the shit is about to hit the fan.
Speaker 2:I do what you're saying.
Speaker 6:Or it's
Speaker 7:actually hitting the fan. They're like, dude, somebody needs to call Travis immediately. He'll know what to do. I Travis, you're a movie about me. My phone's like, what are the crazy, wild, wackiest things going down or like here because that's when I usually get the call and I'm so underground.
Speaker 6:Yeah.
Speaker 7:That's what happens. But like I should, you know, I should give, you know, I know these guys. I should give them a call and be like, dude, we should Let's cook. Let's let's cook.
Speaker 2:Yeah. Let's cook.
Speaker 7:I still think we probably did things better than anybody that some of those things probably are still better than anybody even today. Mhmm. But obviously, the check side is much bigger.
Speaker 1:Is that approach like systematizing, fund productizing it? Do you apply that across the entire is that like everything that you do that is important? You're Yes. You're creating like a ground up kind of Yes. Solution for it?
Speaker 1:Yes. So like
Speaker 7:For instance, I mean, this will you know, this is just crazy but like, how about when you do construction?
Speaker 6:Mhmm.
Speaker 7:You know how effed up construction is?
Speaker 2:Yeah.
Speaker 7:I tell my guys that in the in the real estate department, I'm like, your entire department is the anti fraud department.
Speaker 1:Oh, yeah. Know? These guys just are incentivized to just run
Speaker 7:out of So the how do you do epic high quality construction at an insanely efficient price? There's a way. Mhmm. I'm not gonna tell you.
Speaker 2:I'm not
Speaker 1:gonna tell you.
Speaker 7:But there's a way.
Speaker 2:Do you have do you have any, like, white pills or ideas that potentially AI speeds up the rate of building broadly, like solving the housing crisis through Like, after permitting, stuff like that.
Speaker 7:This is so one of the things is that and I think people are starting to come out of this now. Mhmm. This whole like, the jobs are gone. Like, I know still people still say that. Yeah.
Speaker 7:But there is another side to this story. And like, I'll just make this because I'm the Adams guy. I'm like, let's just talk about plumbers.
Speaker 6:Okay? Yeah.
Speaker 7:Let's say the entire world, everything in our world was automated except for plumbers.
Speaker 2:Okay.
Speaker 7:Okay? You had machines making buildings. You would basically have like a thousand buildings a day. Yeah. A thousand buildings being built at a single time in Los Angeles alone.
Speaker 6:Sure.
Speaker 7:Just machines doing.
Speaker 1:Yeah.
Speaker 7:Except plumbers.
Speaker 2:Okay.
Speaker 7:How valuable would those plumbers be? Extremely valuable. Okay. Those guys are each and every plumber would be like LeBron. Yeah.
Speaker 7:Okay. Why? Why?
Speaker 6:We have a
Speaker 7:Because because plumbing is the long pole in the tent to progress.
Speaker 1:Sure.
Speaker 7:That you can't get those thousand buildings unless you have a plumber.
Speaker 2:Sure.
Speaker 7:And by the way, you've got so much efficiency everywhere else that you need millions of plumbers. Yeah. And then the plumbing is like Yeah. What's up? And so once you once you realize that
Speaker 4:Yeah.
Speaker 7:Then you're like, until we get super AGI
Speaker 2:Yeah.
Speaker 7:Humans are valuable. Mhmm. And they are going to become more and more valuable because they will be the long pole and the tent to progress, that progress is going to accelerate and get faster and more, you know, more robust except if you're a plumber Mhmm. You're crushing. Mhmm.
Speaker 7:And so until we get to humans are replaced, like
Speaker 2:Fully.
Speaker 7:Fully.
Speaker 6:Yeah. Yep.
Speaker 7:And by the way, I have I think we have solutions for that. I think Yeah. Elon's got that at Neuralink. It's gonna be all good. Mhmm.
Speaker 7:Okay. And then people are like, oh, God. But but until we get there, we're gonna I believe we're gonna be super fine. That's my white pill. Yeah.
Speaker 7:Yeah.
Speaker 1:Yeah. It does. If you have plumbers that are getting paid like LeBron, it obviously increases the, you know, the prize pool of automating. But again, there's like these kind of windows
Speaker 7:of But there's gonna be a bunch of things like plumbing and it's not just plumbing.
Speaker 1:It's Yeah.
Speaker 7:Gonna be all over the place. Yeah. And even when it comes to software. So like for instance, look at like autonomous cars. They like like Waymo has people that oversee the rides.
Speaker 4:Yeah.
Speaker 7:Okay? And it starts with like, okay, five five rides for every person. Yeah. Then it goes to 20. Then it goes to a 100.
Speaker 7:But like if we get to this place where autonomous cars are everywhere. Okay, and let's just say it's one in a thousand Mhmm. And like nobody owns cars. There's just ride sharing everywhere. I mean, some people own cars but it'd be the top of the pyramid, let's Okay.
Speaker 7:So what do we replace billions of cars with ride sharing?
Speaker 6:Yeah.
Speaker 7:If it was a thousand to one, you still probably have, I don't know, 20,000,000 jobs? Yep. 50,000,000 jobs? I'm just riffing on just the concept of this. You will see this everywhere is that until humans are fully replaced Mhmm.
Speaker 7:We become the long pole and the tent to progress. And that progress, by the way, is to serve us.
Speaker 6:Yeah.
Speaker 2:Yeah. Yeah.
Speaker 7:Robots yet don't yet have bank accounts.
Speaker 2:Yeah.
Speaker 7:So that plumber gets paid.
Speaker 2:Yeah. Yeah.
Speaker 7:Anyways, you get the idea.
Speaker 2:You mentioned mining? Yeah. Have you been to a mine recently? Have you visited a mine? Like, what what's going on in mining?
Speaker 2:What how I mean, I imagine that mines are fairly automated already. There's
Speaker 7:on There's thousands of employees at
Speaker 2:Okay.
Speaker 7:At a given mine. Yeah.
Speaker 1:And it's and that's work that human resources Children children yearn for the mines of Minecraft. Minecraft. Yeah. But it's not the best not the best time.
Speaker 7:Well, maybe that's actually how it gets you know, maybe that's where it goes. Oh, like, end of game situation. Yes. End of game situation. The Look, the it's interesting.
Speaker 7:You go a lot of times they're like, oh, oh, well, is labor really the issue Mhmm. In my you know, is that really a thing? But that's what it really comes down to is productivity.
Speaker 2:Okay.
Speaker 7:Right? So if if a mine is automated, then it can run all hours of the day and night. It doesn't have Yeah. It doesn't have off hours.
Speaker 6:Yeah.
Speaker 7:The way machines queue up, doing that really efficiently like computer science style, I call it digitizing the physical world.
Speaker 2:Yeah.
Speaker 7:You can make that mind substantially more productive. What is the value of a more productive mind? And by the way, let's say, let's get to the real sort of the the outcome here.
Speaker 2:Yeah.
Speaker 7:Is does the world as we enter this sort of new golden age that's about to come Yeah. Do we need more minerals? Do we need more materials? Look around us, Absolutely. Like look around us in this studio Yeah.
Speaker 7:Or walk outside. Everything you see is grown or mined.
Speaker 1:Yep. Yep.
Speaker 7:Manufactured and moved. Yeah. So if you're not in the mining business
Speaker 2:Yeah.
Speaker 7:Like you're like let's just say the mine like I shouldn't say that but like it's it's a very critical part of the situation.
Speaker 2:Mhmm.
Speaker 7:I can't wait till we're putting some machines on SpaceX's rockets to go mine an asteroid or a planet or whatever. In the meantime Yeah. Lots of minds on planet Earth.
Speaker 2:Yeah. So what level of abstraction do you wanna operate at? Do you wanna go and find land and mine it? Because that's sort of on the table. If I look at what you're doing in food, you you you own real estate.
Speaker 2:Or do you wanna sell tools to mining companies that already have explored and they understand and they're running, up and running?
Speaker 7:Yeah. Like, I'm How do you think? I'm not I'm not buying land for mines anytime. That's just not anytime soon. But
Speaker 2:In the next three months.
Speaker 4:Yeah.
Speaker 6:What? A
Speaker 7:hundred and twenty days out, I
Speaker 4:hate it.
Speaker 2:Oh, yeah. Okay. I
Speaker 7:just think it's super fascinating.
Speaker 2:Yeah.
Speaker 7:Again, it's just like like, I'm an Adam's guy. I'm like all about digitization of the physical world. Yeah. And, you know, I have this framework for it, which is like CPU manipulates bits
Speaker 4:Mhmm.
Speaker 7:Storage stores bits, network moves bits from point a to point b. I was a computer engineer at UCLA. I didn't graduate, but it but I I loved it.
Speaker 2:Yeah.
Speaker 7:Those are the three core computing resources that you're told about on day one. Yeah. But if you're treating atoms like bits, digitizing the physical world, CPU manipulates bits. What manipulates atoms? Mhmm.
Speaker 7:Manufacturing. Storage stores bits. What stores atoms? Real estate. Network moves bits from point a to point b.
Speaker 7:What moves atoms? Transport, logistics. I didn't know it then or I didn't think about that way exactly. But at Uber, we were building network for the physical world, also known as digitized transportation. Yep.
Speaker 7:City storage systems then make sense. Yeah. Storage for the physical world. That's real estate. We are building atoms based computers with a real estate foundation.
Speaker 7:Storage.
Speaker 1:Yeah.
Speaker 7:Right? But now leveling up and saying, okay, we have a food computer. What about a mining computer? And what about a wheel based platform to serve industry generally?
Speaker 2:Yeah. If I look at the last two decades of your career, you're uniquely good at managing very geographically spread out workforces.
Speaker 7:Mhmm.
Speaker 2:What is the secret? I I I can I could never get behind the remote work thing? Everyone Me neither. Here works in one studio. Respect.
Speaker 2:I'm all
Speaker 7:about it.
Speaker 2:Yeah. But you you've had to do it, basically, because you had to have a presence in New York. You had to have a presence in LA, and you can't be in the 10 places
Speaker 7:at once. There's a difference
Speaker 4:How do
Speaker 6:you do it?
Speaker 7:There's a difference between remote work Yeah. Where somebody works at home and they're like in boxers and then a Sure. A suit. Okay? Versus we have an office in every major city in the world Yes.
Speaker 7:And whatever city you're in, you're going to that office every day, five Yes. Days a week and sometimes six or seven. Mhmm. And that's it.
Speaker 2:But satellite offices still feel like a headache. How how did you solve it? Because you can only be in one place.
Speaker 7:Yeah. I guess I just I cracked the code so thoroughly in Uber times before I think maybe even before anybody else.
Speaker 5:Yeah.
Speaker 7:It almost feels like normal. Yeah. But, like, I basically have figured out sort of the the management and leadership structures where you the real the real thing is about empowerment. Okay. Is you must be able to empower teams.
Speaker 7:But I it's like I like to say the fewest number of rules while staying out of chaos. Sure. And once you have those systems in place, your imagination is only constrained by management capacity.
Speaker 6:Yeah.
Speaker 7:So once you figure out the management piece, your imagination can go pretty damn far. And so it's just figuring out the management part of this is the thing.
Speaker 2:Talk about empowering young people. We've had a ton of founders on the show who have the origin story of like, yeah, I was the GM of Miami or or He's he sent me to Atlanta, and I was me in a hotel room with a bunch of energy drinks, and we had to open up this market. So we had do a stunt and Yeah. Hire some people. And it just felt like a lot you know, startup within a startup is a bad phrase that gets sort of misused.
Speaker 2:But why why were you you you know, you weren't this wasn't your first company with Uber. Why were you so heavy on leaning on young people, empowering them, pushing them?
Speaker 7:It wasn't on purpose.
Speaker 2:Mhmm.
Speaker 7:It was just the right answer.
Speaker 2:Okay. Why?
Speaker 7:Yeah. I mean, once you have a Citi team and you're like, okay, I need to find people that can run this, like old people aren't the answer. Mhmm. Like, I need fresh I didn't think of it as like I gotta get youthful people or not. Sure.
Speaker 7:I'm just like I need good talent that can go do x and who has no judgment on what it is we gotta get done.
Speaker 6:Yeah.
Speaker 7:And it it was just like water flows downhill. Mhmm. So, what do you look, it was a you know, like the the first driver ops guy that we brought in in San Francisco in 2010, we basically took 200 cards and put names on them. And we said alphabetize them. Click.
Speaker 7:And we just would measure how much time it took to alphabetize. We would give them like crazy analytics tests and then we're like, okay, this is our guy. Yeah. You know what I mean?
Speaker 1:Free free AI.
Speaker 7:If you're on the marketing manager if you're on the marketing manager but you even today, you'd still want that guy. Yeah. Even today. So, like, you can't use AI. Now alphabetize in the most efficient way.
Speaker 7:Now, if you're if you know computer science, sorting is like a big freaking deal. Sorting efficiently and being able to do that in your brain, not in software, is a thing. That's what ops people do.
Speaker 2:Yeah. Yeah. That makes sense.
Speaker 7:So I don't know. I don't know how to answer that question other than problem solving, whether you're young or old, executive or junior, who can solve problems is number one. Mhmm. When you interview, simulate what it's like working together, so that day one is really like week two. Mhmm.
Speaker 7:And you're already pumped because you saw them in action.
Speaker 1:Yeah. How are you with Adams, how are you thinking about recruiting and how are you gonna change your approach to building the company? You've been kinda hold up in LA. This is kind hideout.
Speaker 7:Yeah, totally.
Speaker 1:But I imagine like do you push into back into SF, go Well, back to being the
Speaker 7:here. So first, let's just be clear on December 18, I moved to Texas.
Speaker 1:Sure.
Speaker 7:You know? Great. Yeah. I don't know what's so specific about December 18, but let's just say it's prior to January.
Speaker 1:Yep. Yeah.
Speaker 7:So, I'm a primary resident of Texas, but the action for a lot of this ADAMS type technology I'm talking about, of course, like the Bay is a real thing. My head of the advanced technology group at Uber is running my robotics division at ADAMS. It's called Lab thirty seven.
Speaker 2:That's Anthony?
Speaker 7:In Pittsburgh. No, no, no. That's Eric Meijhofer.
Speaker 2:Okay. Eric Meijhofer.
Speaker 7:So that's robotics on the food side. Yeah. Anthony Evandowski was running Pronto. I was the largest investor in Pronto and then we just were basically right in the final, like, we're checking off the list maybe closing today or tomorrow on that deal.
Speaker 1:Amazing. Let's talk about that deal. Yeah. Give us give us yeah, give us like What's the plan? Kind of background on Pronto and then how it fits into the to the Empire.
Speaker 7:Well, look, I I sort of broke out how mining fits.
Speaker 2:Yeah.
Speaker 7:Right. So we got that. Look, I've been I'm the largest investor in Pronto. Mhmm. And it's super inspiring work.
Speaker 7:Like like go to a mine. Right? Check out how these things work and let your mind imagine what that might look like when you bring automation to it. And how much more productive it is and what that means for industry when all mines are producing more. Where does that go?
Speaker 7:And in some ways you could say low hanging fruit on the autonomy problem. Because, yes, there are different problems off road but they like, they're way more controlled than what's going on on road. Mhmm. Okay? But then you get into the physical action, like cars on the road.
Speaker 7:The Weymos on the road, you know, they're moving. But they're not acting on atoms. Right? So, you think about excavation and you think about crush like, when you get the material and then you move it, then you are basically crushing the material and then you process it. You think about all of the automation through that stack, it's fantastic.
Speaker 7:Yeah. And it's like, it's hard. Right? Like I somebody asked me, like, we have a bunch of roboticists that make some of our food machines. And somebody came like, hey, like is AI gonna help us design food machines?
Speaker 7:We're like, dude, let me show you. Yeah. Like this thing has like an insane number of parts and let me show you just the design of a single part.
Speaker 2:Yeah.
Speaker 7:Like, like the the the that AI can't even do freaking math. You know what mean? It's like, this is not we're not there yet. Now, could it get there? Yeah.
Speaker 7:But then you're really an AGI.
Speaker 4:Yeah.
Speaker 7:If you look at how much harder it is the physical world, how much harder it is AI in the physical world versus in the digital world, and I'm not defining it in any way. I'm just saying it's like maybe a let's call it a different problem set.
Speaker 1:Yeah. You're we're just far away
Speaker 2:from one shotting training data.
Speaker 7:Yeah. Yeah. It's like one shotting on software. Yep. Shotting on designing a machine or a robot.
Speaker 7:We're just not there yet.
Speaker 2:Yeah. Not there
Speaker 4:yet.
Speaker 7:But that makes it more fun. That's the point. It's like, do the hard things. If you are in the Adam's world, you have decided, I like hard things. I like pain more than anybody else.
Speaker 6:Yeah.
Speaker 7:This is kind of what you gotta be about.
Speaker 1:Chewing glass. I love it. So I can see how AVs at Adams fit into mining. Other and just heavy industry broadly, what other kind of categories of of AVs are are exciting? How do you see the space evolving?
Speaker 7:Yeah. Look, I anything I mean, we the mission is wheelbase for robots. Yep. So then you're just like, okay, what moves?
Speaker 1:Yeah.
Speaker 7:Right? And you go, okay, where you have to find the businesses that make sense, of course. So we're like, okay, mining is a no brainer.
Speaker 1:How do
Speaker 7:think about
Speaker 1:sizing for wheelbase for robots that can scale up and down like Yeah.
Speaker 7:Like, I tell my team like, dude, there's like a ton of silver medals here. And there's actually a few other gold medals just in the category. So let's just go with delivery robots like food delivery, which of course is near and dear to my heart.
Speaker 1:You make a lot Your
Speaker 7:20 yeah. Your 30 your $15 bowl became $30.
Speaker 1:Yeah.
Speaker 7:Okay?
Speaker 1:Two this is this is like, I would put it up there as like one of the number one annoyances of the average American Yeah. Regardless of where they are in society. Food inflation. Food is just the cost of food delivery. Yeah.
Speaker 1:Everybody wants food fast, cheap, hot, etcetera.
Speaker 2:Yeah.
Speaker 1:And there's all this data that just came out this week that just shows like it doesn't matter even how much money you're making Yep. You're spending a lot on this category.
Speaker 7:Isn't it interesting? Right? Remember I talked about the plumbers? Yeah. But like you could take whole categories become the long pole in the tent.
Speaker 7:Food. Boring. To a lot of people, boring is that. For me, fucking interesting.
Speaker 2:Let's go. Let's go. But I look,
Speaker 7:I did taxis. I did taxis Yeah. When they're like, people are looking at me funny.
Speaker 2:It was a weird idea.
Speaker 7:Okay. They're looking at me super funny. Yeah. So Jason Kalanick is the most famous investor in Uber of
Speaker 2:all time. More famous than you in some ways.
Speaker 7:Whenever I meet with him, I'm like, dude, I'm so honored to be meeting one of our
Speaker 2:early investors.
Speaker 7:He But Shout There was like an angel group that I pitched to. Yeah. There were like thirty, forty people in the room. I think it was like three or four that invested.
Speaker 2:It's crazy.
Speaker 7:Okay? The $10 check became like a $100,000,000. It was crazy. Wow. But the boring places are the places.
Speaker 7:Yeah. You know? Less competitive. But also just weird and hard. Yeah.
Speaker 7:Well, yeah. Reason why it's that way.
Speaker 1:The the graveyard is stacked of tech guys that thought they could crack food which is why which is again, like
Speaker 2:Yeah. Go back to what they Yeah.
Speaker 1:I mean, you can go you can go compete in but this you have to actually be insane and you have to have Yeah. And and then you have to attack at all all these Yeah. Levels
Speaker 7:in of the my so my head of the robotics division
Speaker 2:Yeah.
Speaker 7:We're like, yeah, let's do this. Yeah. Get the band back together. Let's go. Right?
Speaker 7:This is Eric Meijofer.
Speaker 2:Yeah.
Speaker 7:He's like, okay, we can make a food robot. I'm like, there I got one there's one requirement though. I got one with hay and cheddar, one string attached. He's like, what? I'm like, you're gonna have to build a restaurant that the robot serves.
Speaker 6:So,
Speaker 7:my roboticist team in Pittsburgh made a restaurant that is the restaurant that our first robot went into Because we had to make sure that we understood how a restaurant worked. We had to make sure that this wasn't just a machine that made food, but a machine that makes food and the ecosystem of machines called a restaurant. And people don't understand, but manufacturing facility. In fact, if you look at like labor statistics, etcetera, restaurants fits under manufacturing
Speaker 6:Yeah.
Speaker 7:For obvious reasons. Yeah. It just hasn't changed in fifty years.
Speaker 1:Yeah. Anyways, back to Sorry. I'm all over the place. No. I love it.
Speaker 1:I love it. Yeah. Firing on all cylinders. Yeah. But but so so again, are are do you want to move people with AVs?
Speaker 1:Do you are you do you care more about commercial?
Speaker 7:Look, the the industrial thing is sort of like probably our our main jam. But the bottom line is once you once you crack once you crack movement in the physical world, there's lots of people who want access to that. Yeah. And in fact, you need partners because, you know, you're gonna be putting billions billions of dollars to work to make it happen. Yeah.
Speaker 7:So there's gonna be lots of partners across different categories that are gonna probably want some of that. And I have no issues with that. We're not like a, you know, this is ours and this thing. It's more like, hey, there there may be ways to work with ours. We're happy to do it.
Speaker 7:Yeah. What about gotta pick our our spots, but What you get the
Speaker 1:about manufacturing broadly? You're doing it in food. Are there other categories that are interesting or are you happy to be kind of the transport rails?
Speaker 7:Look, think once you are in physical AI, you should basically understand that manufacturing is part of your tech stack. Like, it just is. And by the way, energy is part of your tech stack. Land development, real estate is part of your tech stack. That's just what it's gonna be.
Speaker 7:People don't think about it like that but it's true. Of course, they're, you know, I've you know, Tesla just crushes. If you look at this list of things, you're just like Yeah. They got it all. So good.
Speaker 7:But there's just so much to do. Yeah. Yeah. You know what I mean?
Speaker 1:And that's like that is that
Speaker 7:We can see all the things we can see all the things Tesla's doing. That's cool. I'm like
Speaker 1:There's a million I
Speaker 7:can still help you mine. Yeah. I I could still I can still get some food to to some peeps. You know what mean? So you get the idea.
Speaker 1:Is that is that is that really when you're pitching investors around Adams in this new vision, is it basically like, there's a lot of jobs to do in the world. We're gonna do it with physical AI and you're basically betting on applying my general ethos to all these categories over time?
Speaker 7:No. You gotta you gotta be able to pick your spots. If you are too broad, people are like, dude, what's wrong with you? Now, you know, I think every entrepreneur always gets that. Like, you know, I I joke around like, in the nineties like, dude, I'm an old guy.
Speaker 7:What are you gonna do? In the nineties, it's like, dude, Microsoft's gonna kill you. Like, why do you think? Then in the February, it was like, why isn't Google gonna In do the February, it's like, dude, that looks like Uber's thing.
Speaker 2:Yep.
Speaker 7:And the, you know, now it's like if you're talking about physical AI, it's like that's Tesla. They are the they are the incumbent. They are and not just the incumbent. They're also just doing great awesome stuff.
Speaker 2:Yeah. Yeah.
Speaker 7:But find your spot.
Speaker 6:Yeah.
Speaker 7:Know yourself. Know what you're good at. Be self aware and find the thing that is your business soulmate for sure. But also know that you're in an ecosystem and you need to find your spot.
Speaker 2:Mhmm. Your experience like in.com and the the financial crisis broadly in 2008?
Speaker 7:Okay. So basically, I sold I sold my peer to peer CDN
Speaker 6:Yeah.
Speaker 7:Akamai Meets BitTorrent in 2007 to Akamai.
Speaker 4:Okay.
Speaker 7:So I was earning out
Speaker 5:Yeah.
Speaker 7:When that happened and I was Failed. I just started I think I didn't last very long in that earn out. Sure. So I was the CXO. I was like an advisor and a CXO.
Speaker 4:Okay.
Speaker 7:Little known fact, I was a I was blogging.
Speaker 2:Okay.
Speaker 7:I was like a tech influencer blogger. There we go. There is a a blog still out there called swooshing. Yeah. Okay.
Speaker 7:Crazy, amazing, ridiculous content.
Speaker 1:Okay. We're we're gonna dedicate
Speaker 7:I in the click economy, guys. Was Okay. In so I was I was an advisor in CXO for like five different companies at a time. Okay. And so I'd help them on their deals or I would be their CTO.
Speaker 2:Yeah.
Speaker 7:Or I would, you know, help them sell Yeah. Or product or whatever. But I could always just put the phone down and forget.
Speaker 2:So somewhat insulated from like the mortgage crash like
Speaker 7:Yeah. I mean, my thing was I was trying to figure out. I was getting a bunch of my friends together and saying, okay, do you have a mortgage with Bank of America? I do too. Let's pool our thing.
Speaker 7:I'm gonna go to Bank of America and say, I will buy these mortgages off for 40¢ on the dollar. Because you're selling them on the market for 10¢.
Speaker 2:Interesting.
Speaker 7:Could be fun and then they're like
Speaker 1:Get out of here.
Speaker 2:Yeah. Well, you're the crazy You're not a hedge fund. It's wild. What about .com?
Speaker 7:You're talking about the nineties?
Speaker 2:Yeah. The nineties. Like, late nineties. Like, I mean, you're you're at that point, you're like sort of starting your career. Right?
Speaker 2:Yeah. It it's an interesting place to start a career in tech. Like, a lot of people watched that and said that that
Speaker 7:So look, that was a we did peer to peer file sharing at a company called Scour. Yeah. Okay. So some people did Napster. Some went to like, you know, all the ones that came after BitTorrent all the way to like what was the one that Zensstrom did?
Speaker 7:Kazaa or some of these others, right? We were the OG file sharing.
Speaker 1:Yeah.
Speaker 7:Okay. Michael Ovitz was on the board. Ron Burkle was on the board. LA.
Speaker 2:Yeah.
Speaker 7:Okay. Doing a tech Right. Doing tech in LA was like being a finance guy in Fresno. They're like, don't know what the hell is going on. They're like, who are you?
Speaker 7:And you're a little bit sheltered from it in LA. Every time you went to the the Silicon Silicon Valley, it was like wild and crazy and like every bar was like packed. Like after hours, like happy hour thing, like things were bubbling. And the crazy part is not just what happened during the run up, it was post. Yeah.
Speaker 7:I was raising money on this peer to peer CDN that I didn't have that I didn't pay myself a salary for for four years. I was raising money in '2 in late two thousand one for a networking software company. Are you freaking kidding me? And so I remember going to one of these going to a bar to meet up with a VC. Good.
Speaker 7:And this is like 2002 and it's empty. Like this thing that would be mega packed just two years earlier. I mean, we're talking dust bowl tumbleweeds, empty. And this VC, I wish I remember who it was because it'd be amazing. I was like, yeah, Travis, dude, I think I think it's all done.
Speaker 2:It's over. It's over. I told you it's over.
Speaker 7:I'm like I'm like, what do you mean? He's like, all the software that could be invented has been invented. Wow. We're done. And he meant it.
Speaker 7:The
Speaker 6:old man
Speaker 7:was like, it's been real dude. Let's have a whiskey. Let's go.
Speaker 2:We're done. That's incredible.
Speaker 1:How have you how have you processed the last two years when people are able to raise an amount of money that took you four different rooms in this, you know, entire Yeah. You know, process and they can just raise it literally without a without a deck often. They can just pull pull it together.
Speaker 7:Look, it's all good. Like, I don't I I just have because, you know, when you build a company the way I built it, which is like my current one, where you're literally under the radar Mhmm. It means that you are powered by you have an internal fulfillment. You're not like caring what others think. You you get internally fulfilled with building.
Speaker 6:Yeah.
Speaker 7:And I don't look at somebody and go, oh, dude. That's I had it so much harder uphill both ways to school, whatever.
Speaker 5:Yeah.
Speaker 7:You know, I don't think like that. It's it's it's more about the excellence of the process.
Speaker 1:Yeah.
Speaker 7:So I'm like, well how do you raise money? And they're like, oh yeah, just throw a deck to the guy. I'm like, okay, well then that's not a thing. Yeah. What is a thing is going all the way until it hurts.
Speaker 7:If you're doing something and it's easy, it's not valuable. And I'll I'll explain. Like let's just think of like a like a marathoner.
Speaker 1:Yeah.
Speaker 7:World class marathoner on mile 21. Is that dude smiling? No. He's not smiling. By the way, if he is smiling, you know what's about to happen?
Speaker 7:He's about to get his ass whooped. Okay?
Speaker 2:It's over.
Speaker 7:Because why? Because somebody else who's down for the pain will go harder and further and pass him.
Speaker 4:Yeah.
Speaker 7:And so if you're getting money easy, I'm like why didn't you go harder? You could have done it better and more. Mhmm. Now, you don't do things hard just because. Maybe he's like, just doesn't matter too.
Speaker 7:Like I gotta go do something else that's hard. Mhmm. But the key is like if money matters, which I think we would say it does, especially in certain categories you need to be the best in the world at it. Yeah. And it's not enough to say it was easy.
Speaker 7:If anybody comes to me and says a strategic thing was easy, I'm like, you messed up. Mhmm. You could have been way better Mhmm. And gone way further. More competitive advantage, more differentiation, get it together.
Speaker 2:Give me the update.
Speaker 7:Feel like Tony Robbins right now.
Speaker 1:I love it. I love it. No. Think people I think people need to hear this.
Speaker 2:They do. They do.
Speaker 1:And and, yeah, the challenge is like when when if raising money is super easy and then you actually start building and you're like, woah, actually, doesn't money makes this possible but it doesn't make the work easy.
Speaker 2:Yeah. And it is funny that some of the greatest fundraisers, the critique is always like, well, they are raising too much money. You look at Elon, Sam, all these crazy deals and people are like, well, like, okay, well, you it's nice that you're good but like are you too good? And it's
Speaker 7:the thing. You know, back in the day, February reference, like, there was a problem with getting Massa money. Yeah. There was a problem with that. Yeah.
Speaker 7:Because it was easy money
Speaker 3:Sure.
Speaker 7:And it was too loose. Yeah. And so people would get loose with the culture of the investor that they were getting the money from. Sure. And so you had to be careful.
Speaker 7:So if somebody got massive money, I'd be like, dude, you gotta you gotta grind. It was it was maybe a little too easy. Yeah. You still Change your mindset. Still to this day.
Speaker 7:So so there's nothing wrong with money as a as a sort of a competitive advantage or a strategic weapon. It's okay. Like that's part of business. It's necessary. But treat it with respect.
Speaker 2:Last question about Texas. For the Californians, they're thinking about making a trip out there. Austin, Dallas, Houston, what do you recommend?
Speaker 7:Well, look, I'm Austin. Now, I own a place in Austin. I've owned it for five years. I'm a avid, I would say almost professional water skier. Nice.
Speaker 7:No way. Slalom skate.
Speaker 1:No way.
Speaker 7:I'll send a video put
Speaker 2:it video. Yeah. That's amazing. It's sick. Don't even get me started.
Speaker 2:So
Speaker 7:I've owned a place there for five years. Right on the lake, Lake Austin. Yeah. Twenty minutes from the city.
Speaker 1:There you go.
Speaker 7:Okay. Lake Life. Hell yeah. Go for it.
Speaker 2:Okay.
Speaker 7:I get a little bit FOMO on like these people going to Florida. I'm like, dude. Yeah.
Speaker 2:I know. I know.
Speaker 1:It's it's it's been a it's been a bloodbath for every every But
Speaker 7:like, yeah, like every weekend this year I've had this year is in Texas. Yep.
Speaker 1:Do you ever take calls while you're water skiing like AirPods?
Speaker 7:Dude, I should.
Speaker 2:It'd be good.
Speaker 7:I love it. Don't get me excited. Well, I went to Cyronic which does the boats, the autonomous boats. Yeah. And I'm like
Speaker 1:Build me a water skiing
Speaker 2:drink. Water skiing boat. Oh. Okay.
Speaker 7:I just want a water ski. That's good. And like
Speaker 2:Water skiing behind a Cyronic so funny. I'm like Dude, I love it. Pretty viral.
Speaker 1:Who should who should come you're you're poking your head up. Mhmm. Who should come work for you? Yeah. Sixty seconds.
Speaker 1:Who do you want? Not not any individual, like one individual person I have message
Speaker 7:for this one guy who didn't take my offer. Look, I think the thing is is like we're just getting the best. This is so cliche and like whatever banal, but look, we are in the physical AI space. So it's a mix of sort of let's call it sensors, compute, the software that sits on top of those things. I mean, it's just it's just gonna be great engineers.
Speaker 7:And then you go through what I would call the physical AI stack and you would I I, you know, but It's a
Speaker 2:long project. It's someone for who
Speaker 7:wants a career. It's like infrastructure software guys because you've got to have epic AI on the back end and the way to use that Yep. Sort of has to be epic. You have to have physical AI model people Mhmm. Who are sort of translating foundational models into the physical world and and and there's some core research and some just like, I know all the white papers and we're just gonna we're building and going end to end, or some hybrid version of that.
Speaker 5:Mhmm.
Speaker 7:You have just normal software because you've got applications that sit on top that then of course customers see in some fashion or another. Actuation and manipulation on the mechanical and sort of robotic side of things. And mechanical engineers that build machines.
Speaker 1:Wow.
Speaker 7:You know? And then of course, I've got construction, real estate, like I could go on.
Speaker 2:That's amazing.
Speaker 7:It's lots of cool stuff. To the website. There's lots of
Speaker 2:stuff Go to the website, folks. Go to the website.
Speaker 7:Co.adams.co. And by the way, adams.co/vision. I just threw down.
Speaker 1:Oh, okay. I know. Read
Speaker 2:it. That's amazing.
Speaker 7:Check it out.
Speaker 1:Well, thank you. It's amazing.
Speaker 6:Thank you
Speaker 2:for the time to come out with us. This was awesome. You so Really quickly. Thank you so much.
Speaker 4:Can I
Speaker 6:get up?
Speaker 2:Yeah. Okay. Cool. I don't know. Will talk to you soon.
Speaker 1:I'm still live.
Speaker 2: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 Restream. One livestream, 30 plus destinations. If you want a multistream, go to restream.com.
Speaker 2:And we are shifting the schedule. We will continue to talk to more guests. We have Gustav from Spotify in the Restream waiting room. Let's bring him into the TBPN UltraDome. Gustav, how are you doing?
Speaker 4:What's going on? Hey, John. Hey, Jordy. How's it going?
Speaker 2:Thank you so much for taking the time to join us. First, tell us out. Where are you?
Speaker 4:So it looks like I'm in some teenager's bedroom from the eighties here. Yeah. It's actually a small studio we have in Austin. I'm here for South by Southwest.
Speaker 2:You know, the first time I went to South by Southwest, the coolest party was the Spotify house that I have a very fond memory of going. Think this was in 2013 or 2020, 2012, something like that. So you've clearly been there long
Speaker 4:time. Party.
Speaker 2:Yeah. It's always a great time. What's, what's on the agenda? What is the message that you're trying to send to the world at South by Southwest today?
Speaker 4:Well, first of all, I'm I'm here because Spotify is turning 20.
Speaker 1:Wow.
Speaker 4:It seems crazy, you know? Yeah. Most companies, they'll they'll Overnight success. Five years. Yeah.
Speaker 4:Yeah. And overnight success. One year is in the making, for sure. So that's why I'm here. And then, you know, obviously, I'm here talking about what it is that we're doing, our our thoughts and plans for the future.
Speaker 2:Yeah. So, I mean, I'm sure you're getting a million questions about AI. How do you see AI fitting into the Spotify ecosystem? There's a whole bunch of super useful ways that I think people would be super excited about. There's other people that are a little bit worried about AI and how it might play out in Spotify's world.
Speaker 2:What are you thinking good looks like over the next couple of years?
Speaker 4:Yeah. Of course, everyone is asking about AI. And as you said, there are a lot of, you know, hot takes and and breathless takes on on Twitter all the time, and and there's a lot of dystopian takes. Yeah. I'm very positive about the future.
Speaker 4:And I think if we look at the consumer experience, I think it's going to change completely. And and not just for Spotify, I think all consumer companies are gonna have to change what they are and how they work because I think consumers are sitting over here, you know, with Claude or with Chatty, PT or with Gemini, and they're getting freaking AGI ish intelligence, and then you're going to media service over here and it's dumb as a rock. Mhmm. That's not gonna work. Mhmm.
Speaker 4:Yeah. Like, it's gonna it's gonna need to get intelligent. So so what we've said, what I've said at our latest earnings call is that we're going to build the first the world's first truly intelligent agentic media system. Mhmm. Those are a lot of buzzwords, but I'll I'll tell you what I actually think they mean.
Speaker 4:What what I think is so interesting with generative AI versus kind of old school machine learning and personalization, which Spotify has done for a long time Yeah. Is that computers finally understand English. What's the what's the point of that? Well, Spotify for a long time, you know, when we developed the product, we always had these these user focus groups. You know, you invite 10 people into a room.
Speaker 4:You have, like, deep English language discussions with them about what they actually feel and what they actually want. And then you went and built this average product that could only measure skips and swipes, and you tried to squint and approximate what the user was actually thinking. The promise of generative AI is you just talk to us in English at a scale of 750,000,000 people. So I kind of think of it as a 750,000,000 people use the research always ongoing into you. That that that's what products are gonna be in the future.
Speaker 4:And I want Spotify to lead that. So we've been investing in some of these products. The first one was AI DJ Yeah. Where you can literally talk to Spotify. You can ask.
Speaker 4:You can say, you know, wanna go for a run. Give me some EDM playlist with big drops at a 160 BPM for for my running cadence. And then earlier this year, we launched prompted playlists, which takes it one step further. We can build your own playlist using English language. You're literally writing your own algorithm.
Speaker 4:So if you want a playlist that goes out and looks at TikTok and what's trending right now and takes that, filters it to your taste on Spotify, then removes any track you've already heard, you can literally do that today. And you can just schedule it to update daily or weekly. So so that's what we've done so far. And then today, what I talked about is sort of the next step, which is taste profile. Yeah.
Speaker 4:This is what users have been asking us for forever. Sure. So, like, hidden in all these systems, we have we have a view of who you are musically and podcast wise and audiobook wise, but you could never actually see that. You can see hints of it in rap, but you can never actually see it. So the idea is pretty simple.
Speaker 4:We're just gonna let you see who we think you are, then and we're gonna let you edit it in English and just say like, no, that's not true. I'm not like that anymore. Yeah. I wanna be like this. Yeah.
Speaker 4:It makes yeah.
Speaker 2:It makes so much sense from a personalization standpoint. I mean, Spotify has been doing machine learning for probably most of those twenty years, more certainly more than ten. What what how do you see yourself integrating with what OpenAI is doing with Sora where there's a persona and a person, an individual can kind of decide how their avatar is used. It feels like there's a natural extension here where not all artists, but some artists are going to want to go to you and say, hey. Look.
Speaker 2:I'm a I'm a rock musician, but if people wanna listen to my songs remixed with AI as country songs, that's fine. As long as I keep getting a check, it's win win for everyone. Has there been demand from musicians for that type of experience that feels like maybe the next year or later this year?
Speaker 4:Yeah. A 100%. So this is the other big topic. We just talked about consumer experience, but what about generative content? And of course, everyone is asking me about that, and specifically music.
Speaker 4:And I think what's happening today is people can make net new songs Mhmm. Using these services. Yeah. And and that's great. I'm sure creators will will I'm sure most creators are already using these tools Mhmm.
Speaker 4:Whether they they say so or not.
Speaker 1:That's the big Sorry sorry to interrupt, but that's that's a big thing because you there's this massive in in tech, like, you know, traditional tech Mhmm. People will tell you they're using an AI tool even if they're not really. Right? Mhmm. They wanna be constantly projecting like, I'm using the best tools all the time.
Speaker 1:I'm using them more than you. I've got, you know, 10 Mac minis running. They'll tell you. 100%. But in music, it's like the exact opposite where like people are, from my experience, talking to musicians and people in the music industry, they're like, this is changing everything.
Speaker 1:It's crazy. It's magical. It's an amazing tool. But then they won't talk about it at all. Right?
Speaker 1:They they it's like, you know, they'll never
Speaker 4:exactly it. And and I I understand that. I I have a lot of empathy for for musicians and artists being scared because everything is changing, and and change is scary. So, you know, I wanna be clear that it's understandable that people have a lot of fear. Yeah.
Speaker 4:But the way we think about it is, you know, technology can can cause a lot of chaos. But if you can combine technology with a good business model, it can be very good for the world. So what I'm excited about is today, I think some artists that use these tools, they get help with creating that new music. Mhmm. But most of the existing artists, they they just get no benefit from AI.
Speaker 4:Mhmm. And I think that seems wrong to me. I think what you mentioned, John, is if you're an existing artist, what many of them do today is they work with other people to do remixes and covers, right, of their music. It's it's like existing IP. This is what you do in movies.
Speaker 4:Like, existing IP is supposed to be the most valuable part, not the least valuable part. So I do think that many musicians, this this will be voluntary, of course, will be very interested in letting their super fans play around with their music if they could could compensate it correctly. It is the business model that needs to be figured out. And this is what Spotify did during piracy. We took the long painful route of not going the illegal route and figuring it out.
Speaker 4:It was hard and painful. This is what we wanna do here as well.
Speaker 2:Yeah. Yeah. It feels like I mean, you hear these stories about breakout songs. There was a song called Old Town Road that sampled Nine Inch Nails, and I think the original artist that remixed that song didn't actually have the rights because he just sort of whipped it up on a weekend. But then once the song exploded, the agencies came in and negotiated, and think I they accepted award on stage together and everyone was happy.
Speaker 2:But Spotify feels like in a unique place to actually unleash that level of collaboration in an economically, like, you know, safe way that everyone feels happy at the end of the day. I I Exactly. I'm also interested in hearing about how social features are evolving on Spotify. It feels like with a lot of the generative AI projects, there's a lot of stuff that goes out broadly, but there's also a lot of you're just having a new creative tool that allows you to tell express yourself to a smaller audience. I find that a lot of the generative images that I put I don't put them on my Instagram.
Speaker 2:I text them to a group chat. And I'm wondering how you see the the social features changing on Spotify or or where they are, how fast they're growing. Anything that you can tell me about social on
Speaker 4:these So you're you're completely right. We started investing we actually had a lot of social features when we started. Yeah. The the idea was to sort of approximate the experience of of Napster or Pirate Bay on the content side, but then sort of, you know, Facebook and your friend graph. Because because back then Yeah.
Speaker 4:Friends were your main tool of recommendation. Yeah. Then your algorithms came, and and every got everyone got, like, an algorithmic friend, and we didn't invest as much. Yeah. But since since a few years back, we started investing a lot.
Speaker 4:Mhmm. Because we think that today, these media platforms, they're they're single player experiences. They're kinda lonely. They're mostly passive. You sit and swipe and swipe and swipe until you're, like, falling asleep.
Speaker 4:Right? Mhmm. We we don't want services to be like that. We would like you to lean in, and we would like you to we would like to turn Spotify into an interactive multiplayer experience. Mhmm.
Speaker 4:So so what that sounds like hyperbole. What I mean with that, I mean features like Jam, which is growing like crazy for us. Many, many, many tens of millions of users and still growing, where you can join a queue and sort of have this shared music experience together in the same place or or actually remotely. And then you have something that's been around for a long time, which is collaborative playlist, which have insane retention and engagement Mhmm. Where people collaborate around the playlist and they want to talk about that.
Speaker 4:So we are investing quite a lot in turning Spotify into this place where you are with your friends. Yeah. Where you're not just by yourself. So I'm I'm a 100% with you. I'm I'm very excited about trying to create sort of a more positive future, if that makes sense.
Speaker 4:One thing I really love about having worked at Spotify for twenty years is that we kind of lucked into music, which almost everyone agrees that music is a good in the world. There's very few people who think that music is bad. But then we kept that. You know, we went into podcasts Yeah. Because we thought it was like long form discussions.
Speaker 4:People spoke in full sentences. It was very the perfect counter to the shortification of media that was happening. And then, you know, last year we went into into books in a big way. So we try to do things that we think are good for the world. Internally, we have some beliefs, not all of which are public because we wanna keep some secrets.
Speaker 4:But one of them is no regrets.
Speaker 5:Yeah.
Speaker 4:We try we focus on content that has very little regret. And we
Speaker 1:Yeah. You guys are to me to me, you guys are the the anti SLAP Company. Company platform. And there's not any there really aren't any of them left. You could go on you can go on LinkedIn now and you could spend twenty four hours straight scrolling through
Speaker 2:And your short form
Speaker 1:and so talk talk to us about running running a company where it feels like you're constantly making decisions to avoid doing things that would almost certainly get a lot of engagement and usage but aren't necessarily aligned with the kind of core values of the company. Because eventually companies get twenty years in and they just start doing things that are just optimizing for all those metrics and a lot of that every everyone has, you know, incredible values until you're a public company and and you've got all these, you know, different incentives.
Speaker 4:Yeah. That's that's so true. And that is a risk. That that's one of the benefits of me and and the other co CEO, Alex Nordstrom, having been at this company for, seventeen, eighteen years. So, you know, those those values are are ingrained in us.
Speaker 4:Now, the way we think about it is I think it's both something that is very motivating for for me as a person and for many of our employees, but it has also to be aligned with their business model. Right? And it is because Spotify, in terms of revenue, is majority subscription service. You know, close to 90% of the revenue is from subscription. And if you think about what that means, it means that a Spotify user, every month, they're gonna vote with their wallet.
Speaker 4:And if you ask yourself the question, when you vote, what do you to to pay for something, what do you what is it that you're gonna pay for? Are you gonna pay for time spent? I I don't think so. You know, when we survey users for the different services out there, I won't say which one, but many of the big services, even young people regret 70% of the time they spent there. On Spotify, they regret less than 3%.
Speaker 4:Right? Wow. And I think if you're gonna pay for something, you're not gonna pay for something you regret. That's like a that's an oxymoron. Right?
Speaker 4:So it's very it's very aligned with our business model. I actually think you pay for what you want to be, something aspirational. Right? So so I think it's both the value that we have, but it is actually very much aligned with the business model. I think if we were 90% an advertising model, the pressure to maximize for engagement would be very tricky.
Speaker 4:So it's both a value and something that actually works for us. So so we're just leaning into that because we think it's a differentiated proposition. And right now, I feel like the need for for low regret content is increasing, not Yeah. Increasing.
Speaker 1:Yeah. It's it's such a it's such a wildly different experience going into the Spotify app Mhmm. For me, where it's always like, it's always intentional. I'm coming in and like Mhmm. I'm doing the thinking around what what what content do I wanna consume, and that is just completely opposite to every other app that I use, which is deciding basically on the fly what is gonna keep him what is gonna keep him in the app as much as possible, and that's not
Speaker 4:That's why I'm so excited about this the user control. Right? Because I think it's very aligned with that. To give back control to the user, like, now you control the algorithm. It's tricky, but that's the path we're going.
Speaker 4:Because it's very much aligned with no regrets. If you can tell ahead of time what you want Spotify to do, you're not gonna you know, chances that you regret that are very low. And and we've seen this. People saying like, you know, when we test this internally, the taste profile, one of the people I spoke to said, I used to be into classical music a lot when I was younger, but then the Spotify algorithm, like it it preferred popular music, so I fell out of it. I went into my taste profile and just said, want the classical shelf on my homepage every day.
Speaker 4:Yeah. And now they're back into it. Because now that's what they get fed with. And I think that's very cool when you can, like, game yourself to what you actually wanna be.
Speaker 2:Yeah. I I wouldn't have predicted that Spotify would be the first one to have that sort of, like, natural language control over your feed. People have been demanding that in in across all different social media platforms. Threads launched something where you can say, dear threads, and then it will update
Speaker 1:Dear algo.
Speaker 2:Dear algo. That's it. Dear algo. But but but, yeah, that makes a ton of sense.
Speaker 4:I think it's because of the advertising model. Yeah. For us. No. Makes sense.
Speaker 4:The risk here is that you the user takes control and says something Yeah. That lowers engagement a bit. Yeah. For us, it's fine because they pay per month. Yeah.
Speaker 4:We don't monetize the engagement directly for the most part.
Speaker 2:Yeah.
Speaker 4:Yeah. That, I think, is the key.
Speaker 2:Yeah. What what's the biggest misconception about Spotify right now?
Speaker 4:Oh, the biggest misconception. Well, not now. Okay. You'll have to stop me. I'll get up on my little soapbox here.
Speaker 4:This is something that has hurt me so much for so many years because we got it wrong. This is about artist payouts and the pay and the the idea that we pay less to artists than than other companies. And for the longest time, you know, this is gonna take a long time, people talked about per stream payouts and so forth. And the the the sort of device at the time was you shouldn't engage because you only bring more attention to the matter. And if we just keep paying more than anyone else, the record is gonna set itself straight.
Speaker 4:Yeah. That doesn't happen. What happens when you leave a narrative like that forever Yeah. Is that it becomes truth. Right?
Speaker 4:Yeah. So I kinda wanna set that straight. So if you look at Spotify, we've paid out over $70,000,000,000 to the music industry, 11,000,000,000 of those just last year. I wanna be clear, that's more than anyone has paid anyone ever in the music industry.
Speaker 1:Yeah.
Speaker 4:So, like, the music industry is bigger than it ever was. People talk about the heydays of the eighties and the and the CD era, but the music industry is bigger than that. Yeah. And and not only that, you know, in the CD era, the the sort of distributor, the the record store, they you know, we we we give about 70% of what we make back to the music industry.
Speaker 7:If we
Speaker 4:bring in $1, we get about $70.70 cents to the music industry. Yep. The record store, if you wanted to be at the front of the record store, could keep 70% or a 100. So, like Yeah. The pie is bigger, and the share of the pie that goes to the music industry is bigger than it ever was.
Speaker 4:And so when I tell that to people, they're like, But I keep hearing that you
Speaker 2:guys pay
Speaker 4:less per stream. Right? Like, you're somehow, aren't you?
Speaker 1:Yeah.
Speaker 4:And my point is like, and this is not backed by public data. No one in the industry pays per stream. We all pay per user. Yeah. And we all pay roughly 70% per user.
Speaker 4:You know, Apple, Amazon, YouTube, all of them. The thing is, Spotify has almost three to four times the amount of usage per user of our competitors, which is crazy to me actually. When I first saw it, I couldn't believe it. Yes. But now it's backed by public data.
Speaker 4:So what happens if you take the same amount of money, but we divide it by three to four times more streams Yeah. Of course, our per stream is going to be lower. But that's because people use the product more. Yeah. And the solution to that isn't to make the product three, four times worse to gain the per stream metric or raise the price three, four times because that would just be bad for the entire music industry.
Speaker 4:Yeah. So this is the misconception I wanna set straight. No one pays per stream. We all pay per user, and we happen to have much more engagement per user than the other platforms. And they've actually sort of weaponized and used this against us to say, like, we pay more more than Spotify per stream.
Speaker 1:Yeah. Yeah. Yeah.
Speaker 4:That's that's important. How are
Speaker 2:you thinking about the evolution of Spotify's role with live events? I feel like in the age of AI, the recommendations get even better because I listen to a lot of different genres. I don't go to a lot of different genres of concerts. There's definitely bands that I listen to where I'm like, I'm too old for that mosh pit. I'm not going to a heavy metal concert, but I would love to go to this It's not too old
Speaker 4:for the mosh pit. Maybe. Maybe. Work, man.
Speaker 2:Yeah. We'll we'll we'll go to the Sleep Token concert together. But but but it does feel like like Spotify will be in an increasingly more interesting role in actually surfacing awareness around live in person events, which also might get more important in an age of AI, in an age of unlimited content. You might actually see this barbell effect where there's endless content and then very unique experiences in the real world. What do you think about live events?
Speaker 4:Yeah. I think you're a 100% right. Mhmm. And two things there I think are important. You know, if everything in the world is kind of a power law.
Speaker 4:Right? Yeah. You have the endless the endless long tail Yep. But you also have a very big head. Yeah.
Speaker 4:So so you know, people ask me like, are Netflix or YouTube in it? I'm like, both. The biggest Netflix shows are bigger than ever, monoculture, and YouTube is bigger than ever. And the same is true in music. Right?
Speaker 4:Yeah. So there are more indie artists than there has ever been. Mhmm. But Taylor Swift is bigger than anyone has ever been, and the Eros tour is the biggest thing that ever happened. Yeah.
Speaker 4:So people want me to say it's one or the other. Yeah. And it's actually both. And I think you're you're you're right because I think what's happening is, and and this would probably be exaggerated even more with generative content, as people get more and more individual content, which they like Mhmm. They also feel more and more lonely.
Speaker 4:So the need for like shared experiences increases. Totally. And this is just not me theorizing. We're actually selling tickets on Spotify since a few years back Yeah. Because we have such good data on who Taylor Swift's very biggest fan.
Speaker 4:That that is one person in the world in terms of streams. Actually, it is. Right?
Speaker 2:That is. Yes. Not a matter.
Speaker 4:We've been selling tickets for a while, and we've sold over 1 and a half billion dollars worth of tickets now. Mhmm. And that is increasing quickly, which proves your point. Like, live events are becoming more popular than ever and bigger than ever. And for many artists, the fact that we're selling tickets is very important because for many artists, especially both big ones and up and coming ones, it can be more than 50% of their income.
Speaker 4:So you have the royalties from from from us, but touring is a very big part Mhmm. Yeah. Of most artists' income.
Speaker 2:Is is Spotify uniquely well equipped to enter the live ticketing market because you come from an origin where you had to do big deals with big organizations, and it was not this permissionless company that some other platforms have engaged with, you had to go to the table in Hollywood and sit down with these folks. And it feels like you sort of have to do that again if you want to sell ever more tickets.
Speaker 4:Yeah. It's funny that you say, you know, we we we've never been this permissionless company. That is true and has been painful Yeah. Watching other people just run with, like, you know, whatever illegal content or something. Yeah.
Speaker 4:And they're so fast. But over time,
Speaker 1:it's it's It catches up to
Speaker 4:for us. Yeah. Yeah. It it has in many cases. But but you're right.
Speaker 4:We are well positioned to work with that industry. And right now, we're actually selling for all of them. You know, we're an aggregator. Mhmm. We're an aggregator of content Yeah.
Speaker 4:And we're an aggregator of concert tickets. Mhmm. So I think we're really well positioned. We're already telling most artists where they should tour, in which cities they have the most fans, in which songs they love. And now it's pretty natural for us to help them actually sell tickets.
Speaker 4:Obviously, the scalping problem is enormous, and that's something where we are really well positioned to help. The the analogy I like to make is that your stream count is is like proof of work in crypto. It's very hard to fake your stream count. Right? So so using that I think is is very important, and we wanna work with the with the the live like,
Speaker 1:oh, you wanna buy tickets to this artist that you've not streamed a single time? It's like Yeah. I don't know about that. Exactly.
Speaker 4:Yeah. And the artist, they absolutely we've done some of our own events, you know, for smaller events for just a super fan sometime. And you can tell the difference in in the room when it's just like the stalker level fans in the room.
Speaker 1:I wanna talk I wanna get your kinda high level view on podcasting, how it's how it's evolving. I started doing some work with podcasts when I was in college back in 2017. At that time, it's it felt late to me. It always does. Always it always it always feels late.
Speaker 1:Of course, I was totally wrong that the biggest deals and and many of the biggest shows were still to come, and you guys obviously made a splash with some of the larger acquisitions in the space. But how are you processing industry today?
Speaker 4:So what what happened that was very interesting for us is we looked at the podcasting industry. Actually, the way we came about it was, you know, we we found a lot of our best features looking at either our our our users, what they do, or the publishers start uploading like audiobooks in Germany. What is that? And then we realized there's demand for audiobooks. The podcast is a case of looking at our developers because they're this unique crowd that are often early adopters of trends, and they have the power to just build what they wanna see in the world.
Speaker 4:And we saw them sort of hacking podcasts into the main Spotify app again and again in Hackweeks. So we started looking at the podcast industry, and we saw that it was it was amazing. It was just an amazing pool of fantastic long form content and very good creators, but it was just sort of left for dead. So we decided to go in there and bet that if we supported it, it would grow. And that worked out.
Speaker 4:We we grew like crazy for for what was then called sort of traditional podcast, audio podcast. Then what happened was and and Joe Rogan was always the first with this. Many podcasts started doing video. But for a long time, it was just Joe Rogan. And the interesting thing is because we had Joe Rogan on our platform, we had to build video support.
Speaker 4:It was partially thanks to him that we did it because he was like, I can't be without video. If you want a show,
Speaker 2:it has
Speaker 4:to be video. We're like, oh, shit. Are we gonna build a full video stack for one podcast? I guess we are. Yeah.
Speaker 4:And then we built it. Yeah. But that was very lucky for us because then we could see what video podcasts, how they performed on the platform. And we saw that people listen a lot in the background, and they dip in and out. And we're like, this is probably where the whole thing is going.
Speaker 4:So we started investing more, and then all the creators started doing media video. Yeah. So what's interesting for us is that the audio podcast market was this like, I don't know, couple of billion dollar market. It wasn't that big.
Speaker 1:Yeah.
Speaker 4:But because audio became video, they they kind of pushed us into a much bigger market, which is video Yeah. Which is, you know, 10 times bigger at least, one, two orders of magnitude. So for us, it was like a gift that the creators quote unquote forced us to get into this bigger market. Yeah. So we're very happy about it.
Speaker 4:And what we find from creators like yourselves is they they want a multi home. Want distribution. They want to be on all the platforms. Yep. And that's always been our you know, in music, we were always all the artists were multi home.
Speaker 4:All the book all the book authors we have, they're multi home. So so that's our strategy. And then in terms of what we've done that really changed the trajectory for us is, yes, technically, we could have video podcast for a long time. But as you guys know who are into the details, audio podcast, used to monetize in in a in a certain way, with audio ads. And what happened was when you couldn't have your dynamic audio ads, the DAI, when you went to video actually, the weird thing is you put video on Spotify and you would make less money.
Speaker 4:Oh. Which is completely wrong because the users loved it. So your experience got better, but you made less money. Yeah. So finally, 2025, we solved that because what we said was, okay, We're just gonna pay out of the premium pool
Speaker 2:Sure.
Speaker 4:For video podcasters. So now your used you don't have to stuff ads into the podcast as much. So your user experience gets better. Your retention goes up. Yep.
Speaker 4:But you don't have a compromise in economics. We're gonna pay as much. And that really that made all the video podcasts come on board Spotify.
Speaker 2:That's amazing. Well, thank you so much for taking the time to be Yeah. We're
Speaker 1:we've been kind of beating the beating the drum on we think there's a lot more shows for to to make like TBPN. Yeah. Basically look at any because because in many ways we've done some interesting things on the formatting side but
Speaker 4:interesting things.
Speaker 1:But but we just took what had worked in many ways
Speaker 2:And TV.
Speaker 1:Traditional cable and I think that every single show on traditional cable is re is just sort of waiting to be rebuilt for the Spotify platform and and other platforms. So I think that Yeah. Lots more This to
Speaker 4:such an innovative format. I watch it every day. And and you know, because you guys publish the whole thing to Spotify, catch up.
Speaker 2:No. I love when we get a Spotify comment that is clearly someone who watched the video because they noticed something that you would own it wasn't really in the audio feed, they were clearly watching in video.
Speaker 1:You know, you said you said creators want to be multi home. Yeah. But I disagree. I wish we lived in a world where there was just Spotify. We could just focus all of our energy
Speaker 4:I'll take that.
Speaker 1:I'll take it. So you got more work to do.
Speaker 2:Oh, thank you so much. Enjoy the rest of South by Southwest to say hello to everyone for us, and we'll talk to you soon.
Speaker 4:Take care.
Speaker 2:Goodbye. Let me tell you about oops. Augusto.com. That's the wrong one. The unified platform for payroll and benefits and HR built for to evolve with modern small and medium sized businesses.
Speaker 2:And let me also tell you about public.com, investing for those who take it seriously. They got stocks, options, bonds, crypto, treasuries, and more with great customer service. We are joined now by Tim. Thank you so much for taking the time to come to First time on the show. Please introduce yourself.
Speaker 5:Yeah. Tim Cadogan, CEO of GoFundMe. Thank you very much for having me.
Speaker 2:Tell me a little bit about your journey to GoFundMe. What was your backstory?
Speaker 5:I started you know, I came to Stanford in the mid nineties. Yeah. I got sucked into the Internet really early.
Speaker 1:A nontraditional background.
Speaker 2:Yeah. Yeah. Yeah.
Speaker 5:Did some startup stuff, ended up going to Yahoo, ran the ad business at Yahoo, then went to another startup. Yeah.
Speaker 1:We see this?
Speaker 7:Oh, man.
Speaker 1:We're huge fan sound. We love Yahoo.
Speaker 5:Not wearing a lot of purple being
Speaker 2:a Yeah.
Speaker 5:No. Redhead. That never worked. Yeah. But Yeah.
Speaker 5:Yeah. Five great years there. Went to do my own startup in the ad space. Yeah. Open Axe built that up.
Speaker 5:That was great. Yeah. But got to thinking, hey. I wanna do something completely different. Yeah.
Speaker 5:I had I'd become a search and rescue volunteer around 2010 up here in the mountains in San Gabriel's. I loved that. Wow. And I was thinking, hey. Could I kind of run a company that also was really useful and helpful to people?
Speaker 5:Yeah. Somehow got that GoFundMe job. Yeah. Started 03/02/2020.
Speaker 2:Amazing.
Speaker 5:The pandemic, I mean, mayhem. Huge. And just what a lesson in how valuable the platform is.
Speaker 1:You were joining right as I'm sure there was just a surge because of all the just dislocations.
Speaker 5:It was literally it was that week where I think the world realized that this was global. Yep. I had four days to meet people. On the Friday, I'm like, we'd better go remote. I thought it would be, like, three weeks.
Speaker 5:And then it was, you know, a year or so. And, yes, demand, I mean, the the need of people Yeah. On the platform and all the expected ways, the medical stuff, but also small businesses. Yeah. Yeah.
Speaker 5:Tens of thousands of restaurants, bars, music venues having to furlough employees and lots of fundraisers being created often by their patrons who are like, we we love this restaurant. It's our favorite local restaurant. Mhmm.
Speaker 1:We that the the silver lining of that moment was how much excitement and willingness there was from people that were in a better situation during or maybe they were had chaos in their own life but they still wanted to go out of their way. Yeah. And and the ingenuity of of individuals and businesses to like come up with ways to like make these kind of exchanges work.
Speaker 5:Well, mean, it's actually it's you bring up the silver lining point. Like the silver that's often the case that when something difficult happens in our lives or in a community or a natural disaster.
Speaker 1:Yeah.
Speaker 5:The silver lining, and there really is not a lot of silver linings, but one is people wanna come together and help each other in the face of that situation. And we see that again and again, whether it be an individual situation or like what happened here in LA.
Speaker 2:I was about to ask about the fire.
Speaker 5:Yeah. So
Speaker 2:I I know Watch Duty was on there. Is that correct?
Speaker 5:Oh my god. I mean, you know, what so many so many nonprofits were helping. I live in Altadena, is one of the towns. I live
Speaker 2:in Pasadena.
Speaker 5:Yeah. So, you know, like, lost 6,000 homes. We evacuated Yeah. You know, twenty minutes in.
Speaker 2:And thousands of people personally.
Speaker 5:Exactly. And we saw $260,000,000 raised Wow. For 10,000 families, churches, local businesses, and for the nonprofits like Watch Duty, Salvation Army, World Central Kitchen, so many people coming in and helping. And It has been amazing to see in the case of my town, the community coming together and saying, you know, we care about Yeah. Each other and we're gonna find a way through this.
Speaker 2:So what's the case study for a GoFundMe project that goes that goes perfectly. There's a lot of, you know, I'm sure there's a lot of rough edges around where does the money go and what conditions does the money get released, all these different things that you have to grapple with. Yeah. What does your team look like? And then how is technology making that easier?
Speaker 5:I think you got about seven questions in there, but let's let's go to the first one.
Speaker 6:What is a good
Speaker 5:fun I mean, a really campaign. A really good campaign Yeah. Is you put together a story. So GoFundMe is first and foremost a storytelling platform.
Speaker 2:Yeah.
Speaker 5:You tell a clear story of who you are Mhmm. What the situation is Mhmm. What you need in terms of the help, I. The funds Mhmm. And what it's gonna go to.
Speaker 5:Mhmm. And then you put that on the Internet Mhmm. And then you tell people about it. And this is we actually launched yesterday this product called the Smart Fundraising Coach
Speaker 4:Yeah.
Speaker 5:Which we can talk about more, but it helps with every single one of these steps. Okay. And then you get attention. Yeah. And you start with the people you know, your friends, your family, your neighbors Yep.
Speaker 5:People in your church, in your sports team, whatever it is. And then you build support from there. You build momentum. You hopefully achieve what you're looking for. Mhmm.
Speaker 5:Maybe you exceed that. Yep. And then throughout that process, you set up to receive the money, set up for transfers, which could be you if it's for you. Let's say I set it up for you. I'd set it up for you.
Speaker 5:You would get an invitation to set up your account to be KYC'd Yep. To receive the funds. All the funds go to our payment processes with Adyen and Stripe. They sit there until you've been KYC'd, and the money flows to you and you get the help. It's what we call help delivered.
Speaker 2:Mhmm. Mhmm.
Speaker 1:Yeah. There there's so much fear around AI right now. Mhmm. And oftentimes that people end up overlooking all the incredible parts of it. And that's a good example of anyone in the world being able to be like walked through and basically get their handheld through this process that is a deeply you know, if you're going and setting up a raise, it's usually not because of, you know, it could be some like emergency or or really stressful situation.
Speaker 1:And so being able to give people that kind of just like one on one guidance.
Speaker 5:It's exactly. So I had this sort of a couple of years ago. Well, we have a team that helps some clients. We have customer success team that can help some, but we have like 10,010 people a day setting up a GoFundMe. Like, we can't Yeah.
Speaker 5:Deliver that from everyone. So I like
Speaker 2:with everyone.
Speaker 1:That's
Speaker 5:My point to the team is like, look, AI, we can
Speaker 2:we could do that now.
Speaker 5:Yeah. We could give every single person Mhmm. Who is considering asking for help. But asking for help is tough. Like, none of us like it.
Speaker 5:Mhmm. We were just talking in the back. Like, does any of us like asking for help? Mhmm. No.
Speaker 5:Like, we don't like it. Yeah. It's hard. It's psychologically difficult. Can we give them the functional and the emotional help to go through that process?
Speaker 5:So that's what we built. Sure. A lot of trial and error, actually. Like a lot people think you plug the AI and it's better.
Speaker 6:It's not like that. Right?
Speaker 1:Takes
Speaker 5:taken many months.
Speaker 2:Yeah. Yeah.
Speaker 5:Because we have to find not just the the functional, like, hey, it's time to pick your title. Yeah. And now it's time to share, which is one of the most difficult things. We also have to find the right tone
Speaker 2:Mhmm.
Speaker 5:To do that empathetically to help someone through those steps in the process so that they can get the help they need.
Speaker 2:Yeah. What about AI on the donor side? I'm thinking about if I show up and I'm like, is this the right Jordy Hayes? Is this his is this his campaign? Tell me more that might not just be on the landing page already filled out by him.
Speaker 2:Are you looking at that for
Speaker 5:So the main way we're using AI on the donor side is to verify that the people who are paying in money are actually the right people Got doing all of those things to validate the pay ins. And that's both a combination of us
Speaker 2:Yeah.
Speaker 5:And the payment providers and the banks who
Speaker 2:are Yeah. Yeah.
Speaker 5:The back end
Speaker 2:of us.
Speaker 5:Yeah. So that's the main news. You know, what you're talking about is sort of more discovery Yeah. Which is still early days. Yeah.
Speaker 5:I mean, most supporters of fundraisers Yeah. Know the person. Sure. Right? They they know either very close Yep.
Speaker 5:Relationship or they know them through someone.
Speaker 7:Mhmm.
Speaker 5:That's about 90% of fundraising.
Speaker 2:Yeah.
Speaker 5:Is it's really what we're doing is we're modernizing a timeless thing that we've done for each other, which is if you used to live in a village and someone was in hard times Yeah. You you put some money in the Pass
Speaker 2:the hat.
Speaker 5:Pass the hat. Yep. Right? Yeah. That's what we're doing now.
Speaker 5:So mostly, the sort of social proofing is through relationship networks.
Speaker 2:What's the tax treatment on a GoFundMe campaign?
Speaker 6:There are
Speaker 5:no goods or services though, so there are no taxes.
Speaker 2:There are no taxes.
Speaker 5:That's right. It's a gift.
Speaker 2:Okay. Yeah. Well, how has the actual team evolved post COVID? It sounds like you came in and you immediately made the team remote. Are you now in a hybrid setup?
Speaker 5:Yeah. Yeah.
Speaker 2:How is that evolution?
Speaker 5:I mean, you know, we found our way through it. I mean, we're we were always quite a distributed company. So we had LA, Bay Area Yeah. San Diego. We got Chicago.
Speaker 5:We got folks in
Speaker 2:And is that because of talent or because of the customer base? Like, why
Speaker 5:It's a bit of talent. The original GoFundMe was set up in San Diego.
Speaker 2:Sure.
Speaker 5:Brad and Andy set it up back in 2010.
Speaker 6:Okay.
Speaker 5:Then we needed great talent, so we also needed to go to the Bay Area. Now, for example, we have a really amazing 100 person engineering and data science team in Buenos Aires down in Argentina, which is just Under crushing it. Yeah. We are inherently distributed. Sure.
Speaker 5:So the the work reflects that. Okay. We figured our way through it Yeah. Pretty well.
Speaker 6:Yeah. Pretty well.
Speaker 1:What what's different about running a company like GoFundMe that's doing a lot of like good in the world and good, you know, every Silicon Valley company can paint a picture of how like they're saving the world but you guys are actually, you know providing a service that that is making a
Speaker 2:meaningful It's like there's probably dozens of GoFundMe's that are like literally pay for my cancer medications like literally cure my cancer. Yeah. Yeah. And then there's a
Speaker 1:lot of AI companies that
Speaker 2:are saying, well we'll cure cancer Yeah. One
Speaker 1:What It's a very different vibe. Have other companies in the industry like software vendors or payment providers, do they do they chip in on their side? Like are you able to negotiate Oh, interesting. Lower lower rates
Speaker 5:No. Than SEO. You know, hey, if guy if you're listening Are
Speaker 1:you serious?
Speaker 5:Selling mean, they're selling their products and services. I know.
Speaker 1:I know. But but
Speaker 5:You know, we get a little bit like people do like to talk about working with us Yeah. Because generally, it's regarded as a good thing. But that's at the margin, honestly.
Speaker 2:He's a big fan of oligopolies and payment processing, apparently.
Speaker 1:But I we have
Speaker 5:great we have great partners, so I understand, you know,
Speaker 2:they need to run
Speaker 5:their businesses, and we appreciate them. What what's different
Speaker 7:about that?
Speaker 1:I would I would yeah. No. I I would just think that, you know, if I was like a CRM provider, I might not be trying to max get the maximum amount of value out of, you know, a platform like GoFundMe and
Speaker 5:and Well, maybe they're not getting maximum. But, you know, they they generally, you know Yeah. Doing their thing.
Speaker 2:About the surface area of GoFundMe? I mean, there's other platforms that people use to raise money for I mean, I did a crowdfunding campaign for a food product at one point. Yeah. But people do. Have a board game project.
Speaker 2:They have a movie. And there's this somewhat of a fuzzy line between a GoFundMe and something like a Kickstarter. Or have you thought about broadening out? Do you wanna stay narrow? How important is it to define what the brand is and is not?
Speaker 5:Yeah. You're right. And we do see people fundraising for local businesses
Speaker 6:Sure.
Speaker 5:Quite a bit like that. You know, local restaurant that people love. Maybe it's hit a rough patch or a bookshop or something like that. But you're right. Kind of business startup stuff.
Speaker 2:Yeah. There was a time when crowdfunding was Yeah. Pre seed stage funding or, like, a signal that you could send to your investors. Like Yeah. The original Oculus VR headset was on Kixter.
Speaker 2:Yeah. And then sold to Meta for a billion dollars. Yeah. That's a very different thing.
Speaker 5:Yeah. It tends to be low. We we saw a 100,000 fundraisers for small but Sure. Really local businesses for us.
Speaker 2:But you have the platform. Have you thought about expanding?
Speaker 5:You know, we still got so much to work to do. So we have expanded. So back in '22, we acquired a company called Classy, which does Okay. Fundraising software for nonprofits.
Speaker 2:Oh, okay.
Speaker 5:Interesting. That makes sense. If you look at the industry Yeah. Yeah. TAM Yeah.
Speaker 5:Yeah. In The US, it's about 2% of GDP. $600,000,000,000 is given Given. The vast majority by consumers. Of that is given to nonprofit organizations.
Speaker 2:We the vast majority is by consumers, not Not billionaires. Who are writing massive checks.
Speaker 5:Most of it is given by by consumers.
Speaker 4:Okay.
Speaker 5:And most of that goes to nonprofit organizations. GoFundMe obviously started and we're best known for Mhmm. Helping individuals ask for help. Mhmm. Now those individuals generally ask for themselves or someone else, but increasingly, they're asking for a nonprofit.
Speaker 5:That was our fastest growing category last year Sure. Was individuals like, I just did one for Watch Duty because I think Yeah. Yeah. What John and team are doing is amazing and they super supported us. Yeah.
Speaker 5:So that's a trend.
Speaker 1:Sure.
Speaker 5:But our main focus has been making consumer fundraising
Speaker 4:Mhmm.
Speaker 5:Ever better Yeah. Which is why we launched the coach yesterday and continue to innovate there. And then helping nonprofits fundraise more successfully.
Speaker 1:Yeah. By building basically a network of other people who can fundraise
Speaker 5:the cool thing is like this intersection between those two things because the average age of a nonprofit donor in America today is about 64. And nonprofits want to get more young people interested and connected, but a lot of young folks don't necessarily just wanna donate. They wanna do something. So we've given them the ability to organize, sort of enlist an army of supporters who fundraise for them. So I'll give you an example.
Speaker 5:Like, American Cancer Society came to us and said, hey. We we wanna do something like this. We've had, like, eighty eighty eight thousand people organize a fundraiser where they're swimming or walking or riding or walking with a dog Mhmm. For the benefit of ACS, which raises money. But even more importantly, it spreads the work.
Speaker 5:Yeah. Because if if you're telling me Yeah. I really care about ACS. It affected my family in this way. I'm doing this run this over this month.
Speaker 5:Would you support me? I'm gonna think, hey, I'm gonna trust that because I know John and I know ACS. Yep. I call it the double trust. Yeah.
Speaker 6:That makes
Speaker 1:Like SPVs. SPVs for nonprofits. Yeah.
Speaker 6:It's kind
Speaker 5:of, you know, it's expanding the aperture of how you generate awareness Yeah. And support.
Speaker 2:What about political fundraising? How does that work today? Is it not allowed on the platform?
Speaker 5:Very limited. And it's country by country. Okay. Very because we're in 20 countries.
Speaker 6:Sure.
Speaker 5:And the rules are very, very variable. So it will depend. Some countries are just not allowed. Some of it is allowed in very specific ways. But frankly, it's not a significant thing for us at all.
Speaker 5:Yeah. We don't see much
Speaker 2:of It is not an area of interest.
Speaker 5:It's just a different Not really. I mean, are pretty well known and well used platforms that focus on that. So we we don't we don't see much of it.
Speaker 4:Got it.
Speaker 5:We don't don't honestly expect to.
Speaker 2:What about the future of the company? How is the company structured? Where do you wanna see it go?
Speaker 5:Well, we think there's a lot more help to generate in the world. I mean, mission is very simple, help people help each other. And we think that it's it's interesting you had Travis earlier because they're a good example. Uber, Airbnb is another one where it's a company that has taken a behavior Sure. That was frankly frowned upon.
Speaker 5:Like, remember when you were a kid? One of the things you were always told not to
Speaker 1:do Don't
Speaker 2:get in a car with
Speaker 4:a stranger.
Speaker 5:Get in a stranger's car. Yeah. Don't and certainly don't ever go to a stranger's house. Yeah. Well, that's normal.
Speaker 2:Are you taking now you're taking your Airbnb Right.
Speaker 6:Your your Uber Yeah.
Speaker 2:Your Airbnb
Speaker 5:So in our case, you know, it's it's not so asking for help and doing it in public Yeah. Is still not a comfortable and normal thing.
Speaker 2:Totally.
Speaker 5:And so we're sort of expanding the aperture of like, no, actually
Speaker 2:But GoFundMe does have a different aesthetic to it. It's it's it's oh, you're doing a GoFundMe. Like, this is a normal thing. But that's still yeah. No.
Speaker 2:You're still building towards it. But you're on the path.
Speaker 5:We are. And every customer I've talked to, I say every single one has said something like, this was really hard for me to
Speaker 2:If someone just put on their Instagram story like, hey, please send me money, that's very different than like, hey, I'm doing a GoFundMe for this specific thing. Right. You can go here. There's a lot of details. Yes.
Speaker 2:You know that it's on Yes. Legit payment rails.
Speaker 5:Like Exactly.
Speaker 2:There's accountability.
Speaker 5:But there's still a lot of work to do Totally. In that journey. So so that we think we can do a lot more of that. And whereas I mentioned, we're in 20 countries. Some of those countries are still early Yeah.
Speaker 5:And adopting and growing quick. Yeah. Germany, for example, is taking off very quickly.
Speaker 1:Okay.
Speaker 5:There's more countries. Yeah. And then nonprofits. Yeah. Like, there's a lot more work to help nonprofits who are as needed now as ever.
Speaker 5:Yeah. And we only offer our nonprofit solutions in The US today.
Speaker 2:Got it.
Speaker 5:So we got a lot more there. And then we got some other ideas. Yeah. You know.
Speaker 1:Yeah. It's very cool. I mean, it just I can imagine massively increasing the efficiency of non profits on the fundraising side because they have instead of having to build out, you know, all this, you know, where they still have to hire their own staff to support fundraising but now they get all this kind of like off balance sheet kind of effort
Speaker 5:on We can help amplify. We can help. We do a lot of storytelling. Yeah. We do that on behalf of our regular consumer customers.
Speaker 5:Now we can help to tell the stories of our nonprofits in in certain situations and that helps them get awareness and Yeah. Get more support.
Speaker 2:Well, Tim, thank you so much for taking the time to
Speaker 1:come out. You're welcome. Thank you very much.
Speaker 4:Appreciate it.
Speaker 2:Hopefully, I'll see you in I you. Yeah.
Speaker 1:Absolutely. Are you still doing your watch duty fundraiser? You should
Speaker 5:I'm still running.
Speaker 2:Okay. Because we gotta we gotta join into that. I've been testing.
Speaker 1:I love when I'm not a DMU of watch duty, but you never know. Oh, yeah. Yeah. Yeah. You never know when you're
Speaker 2:Exactly.
Speaker 5:You never know.
Speaker 6:I'm in
Speaker 1:Malibu, so we had a crazy time. Yeah.
Speaker 5:I hope you guys are doing okay.
Speaker 1:Yeah. Love you, people.
Speaker 2:Thank you so much.
Speaker 5:Take care, guys.
Speaker 2:Let me tell you all about Okta. Okta helps you assign every agent a trusted identity so you get the power of AI without the risk. Hear every agent. Secure any agent. And let me also tell you about AppLovin.
Speaker 2: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 are joined by Nikesh Arora from Palo Alto Networks. Good to meet you. Welcome to the show.
Speaker 6:Thank you.
Speaker 2:For those who might not be familiar with a little bit of your journey, I'd love to kind of get everyone to speed on what you were doing before. And then I wanna spend a lot of time talking about just the transformation, if you can call it that, of Palo Alto Networks, where the business is today. But maybe take us back a little bit.
Speaker 6:Where do you wanna go? How far back?
Speaker 2:Well, know you handled business at Google, but
Speaker 1:Let's go even even even let's go back to the very beginning.
Speaker 6:Yeah. As far. No. I grew up in India. Cool.
Speaker 6:As you might know. Came here to go to business school. Yeah. It was a tough time. Yeah.
Speaker 6:Couldn't get a job
Speaker 2:Okay.
Speaker 6:In 1992. It was one of the recessions in the country. Yeah. So I wrote 400 plus letters. In those times, you guys are younger than
Speaker 2:Cold letters? Cold letters. Cold letters. You you you you email.
Speaker 6:You had to go I had to rent a map Oh, right. Right.
Speaker 2:Three months. No. You rented a computer.
Speaker 6:I rented a computer. Wow. I found 400 addresses of
Speaker 4:Okay.
Speaker 6:Hiring people. Yeah. And I would sit down, write the letters, type them out, go print them out Yeah. Put them in envelopes, stuff envelopes and and mail them.
Speaker 1:Wow. Such a different dopamine loop during a cold letter because cold email is amazing. There's an email. You send No. No.
Speaker 1:I know. I know. But I'm saying like today, kids are used to like, okay, gotta write this email. Maybe they use AI now. Like oftentimes, like Yeah.
Speaker 1:For me, I either respond like like within like thirty seconds Yep. Or thirty days. Yeah. But but like, you know, you quickly kind of get on get on that loop. But sending an actual letter out and then just kind of praying and and waiting for maybe,
Speaker 6:you know Every day, I'd get stacks of them back. I got I still have them. I have 400 rejections from 1992.
Speaker 2:Wait. 400 letters? All rejections?
Speaker 7:Yes.
Speaker 6:They only got one job. Right?
Speaker 2:So many
Speaker 6:of the others said no.
Speaker 2:So I have four rejections. So so so how many
Speaker 6:of the companies
Speaker 1:are still still around?
Speaker 6:Some of them are. Yeah. Some of them you wouldn't wanna work for. But I sometimes run into people Yeah. And one guy who started private equity private equity fund after Mhmm.
Speaker 6:I remembered his name at the bottom of the letter. Wow. So I was sitting and have a meeting. I said, you do realize that he rejected me in 1992.
Speaker 2:That's great.
Speaker 7:And I was
Speaker 6:an adviser to a company hit bar. Don't hold grudges. I didn't hold grudges. I'm glad I have to say thank you to all of you. Right?
Speaker 6:Yeah.
Speaker 2:Of course.
Speaker 6:God forbid, I'd gone to work for something.
Speaker 1:Okay. Where do you where do you end where do you end up?
Speaker 6:I ended up at Fidelity Investments Mhmm. Right out of business school. And even there, I got rejected from six people I wrote to in the company. Thankfully, had no common HR system or whatever current system.
Speaker 2:Oh, that's so funny.
Speaker 6:Guy hired me. Great.
Speaker 2:This is a great
Speaker 4:He said, no. System.
Speaker 6:Resume looks interesting. We should talk to her. He couldn't tell whether my name's male v.
Speaker 2:Oh, sure.
Speaker 6:Sure. Yeah. Signed up Fidelity. That's fine. And when I was when I was in business school Yeah.
Speaker 6:I was applying. I'd get phone calls like, I'm in Northeastern. So I get a call, hey.
Speaker 2:What are trying to
Speaker 6:So we're just double checking, you know, how's your time in Northwestern? Why did you say Boston? I'm like, that's Northeastern. Oh, I'm so sorry. I got another call.
Speaker 6:I got the exact
Speaker 2:same thing. Went to Northeastern. Yeah. Exactly. I'm not gonna correct you.
Speaker 6:Yeah. Keep going. So I had all kinds of stuff, but one of the calls told me Yeah. You don't have enough finance on your resume to get a job on Wall Street. So I went back to school while I was working at Fidelity.
Speaker 6:I got a Master's in Finance, I got a CFA. And I was teaching a CFA class in 1995, '96 actually, ninety six October, to do portfolio hedging and shit. This guy sitting in front of me said, oh, you work at Fidelity? I'm like, He's like, hey, do you know all these people? No.
Speaker 6:So they they're on the fund management side. Like, don't work there. I'm a corporate finance dude.
Speaker 2:Yeah. Yeah.
Speaker 6:He's like, wait, you're teaching me CFA level three and you work in corporate finance? I said, you wanna pass the exam? I would like discuss my credentials. And to his credit, the next day I interviewed the partner.
Speaker 2:There you go.
Speaker 6:So I finally went to work in money management for two years and most interesting time, most boring time.
Speaker 2:Yeah. I just couldn't sit. Mid ninety days?
Speaker 6:Yeah. '97, '98, '99.
Speaker 2:So we're
Speaker 6:We're in the Internet boom. We're
Speaker 2:like Internet boom.
Speaker 6:Henry Blodgett telling us that Ale is gonna be the biggest company in the Right? Yeah. So I did that for two years. Did well there. Got bored.
Speaker 6:Left. And I started one of the CEOs discovered telecoms that time. One of the CEOs was the CEO of Deutsche Telekom. He said, come work with me. So I took my bags through the Germany to bond Yeah.
Speaker 6:And worked with them for five years. I started mobile data startup at that point in time.
Speaker 2:And the name of the company that you started there?
Speaker 6:It's called T Motion.
Speaker 2:T Motion.
Speaker 6:But that that was the time Deutsche Telekom, I worked on a team that acquired VoiceStream, which is now T Mobile USA. Yeah. So we did that. I worked there for four or five years, and then I quit. I was tired of commuting from London to Germany and back.
Speaker 6:That was my thirties. And I was sitting in front of me and walked up to me and said, hey, I had this headhunter calling me. There's a job. It's a company from The US. They just went public in some reverse Dutch auction type scenario.
Speaker 6:That job's too small for me. Do you want go interview? Yeah. The guy was the CEO of T Mobile, UK. So that was it.
Speaker 6:I met I met the then guy who became my host, Omis Kurosani. He interviewed me. I told him it's a very small office. And he said, well, why don't you have an interview here? Then I'll take you to California and you can meet the founders.
Speaker 6:I'm like, okay. And then he calls me a week later and it's like, well, Larry and Sergey are in town. They would love to see you. So they made sure the interview was not in the small office. So I met Sergey in the British Museum while walking around.
Speaker 2:That's amazing.
Speaker 6:That was when I got interviewed. Then I came to California, then I met Eric Schmidt. And Eric's like, it's interesting. You your CV here is very interesting, but we're looking for a head of Europe, and the job is sales. Yeah.
Speaker 6:I said, so should I just go back? And I have two days of dinner.
Speaker 2:He's like,
Speaker 6:I don't I'm not done sales. Should I just go back? He's like, no no no. We need smart people who can learn stuff, and that was 2004. So I was the first person hired after the IPO of any senior capacity and
Speaker 2:In sales?
Speaker 6:I ran Google Europe.
Speaker 2:Yeah.
Speaker 6:And slowly and steadily, like, we grew Europe. And Europe was like
Speaker 2:And what was the shape of that role? Were were you talking to the largest companies in Europe about just buying ad space
Speaker 6:You want me to make it cool or you wanted to
Speaker 1:actually tell what I Both.
Speaker 6:Let's go with the role. It like, his his company is just doing things. They're thinking of December 2004 Yeah. The company has just gone public. It's worth $18,000,000,000.
Speaker 6:Yeah. There's 2,000 employees. Yeah. And Europe has like 180 people. Every office is a rented Regis office except for one in Dublin.
Speaker 6:Yeah. Wow. So what you're doing is you're like blocking and tackling. You're hiring people getting offices, getting stature, getting stuff. And yeah, forget selling ad space, showing CEOs, showing companies, this is what search does.
Speaker 2:Oh, this is just work. Yeah. Works. Yeah. Just deployment.
Speaker 6:In the five years I was there, we went from being 25% of Google's revenue to 46% of
Speaker 1:Google's Wow. Wow.
Speaker 6:I think this in in history, one of the few tech companies where Europe and US have the same market share. Yeah. So you have all these people come to here, should ask them.
Speaker 2:Yeah. Yeah.
Speaker 6:Generally, you've spent a lot of time in The US, you get a large market share here, and then your share of Europe or the rest of the world is smaller. So we got there and that's when kind of a whole bunch of movement happened. Sheryl Sandberg went to Facebook. Yep. Tim Armstrong went to Honeywell.
Speaker 6:I was kind of the last man standing. Okay. So when my boss retired, Eric called me and says, we think you should move here and become chief business officer. Yeah. So I moved to California.
Speaker 1:Yeah. That was underrated title. It should be the chief of business. We joke we joke about this all the time.
Speaker 2:It's like amazingly vague, but also incredibly important.
Speaker 7:But, you
Speaker 6:know, I I remember my first meeting with Larry when he became CEO. Yeah. And he said, hey, come spend some time with me. So I spent all this time, put a beautiful presentation together. I'm gonna meet sit down with Larry and explain everything we do.
Speaker 6:Mhmm. So I go there, and he's we're talking about Hyperloops and vacuum controlled tubes and how you can get out of the car on every highway that will improve the traffic situation in California. And I'm here, like, jumping in the bed, wanting to get my presentation. Yeah. And it's like, check what Hyperloops are.
Speaker 2:So
Speaker 6:Yeah. In the end he says, you know, Bill Campbell who was a great guy, mentor to many people in the Valley, he says, Bill tells me you're doing a good job at what you're doing. I got a lot of work to do and fix some product because tech companies die if product doesn't work. No tech company became great because of sales and business. Mhmm.
Speaker 7:I
Speaker 6:said, so you keep doing what you're doing. I'm sure if I had a few hours, I'd help you get your efficiency up and do it better, but I don't have the time. Mhmm. So I stood up and said, well, let me know when you have a few hours. That was that.
Speaker 6:Then, thank to his credit, man, because we had a great relationship and, you know, his staff became 10 product people, the CFO, the lawyer, me. That was it. Yeah. No other function was represented. He's like, you go take care of everything else.
Speaker 6:I want these product guys because I want to tell them what wanna build. And we can see what we resulted in.
Speaker 1:At any point early on, did you feel like Google was significantly overvalued?
Speaker 6:You know, I still think it's undervalued. I it's kind of the enormity of what the potential was. Sometimes when you're in it, you don't see out of it.
Speaker 2:Sure.
Speaker 6:It's hard to tell how big it's gonna become. But of course, in hindsight, it's wonderful. You can all say that was bound to happen. But the enormity of what we were doing was not apparent to people there. Like, you know, we bought YouTube.
Speaker 6:I remember sitting with Salar and and Chad Hurley and saying, let's go buy Netflix. There's a story about that, but it's a different story. Solar is like, no, just give us 20 engineers and $5,000,000 to go build it. Yeah. That's every tech company has those kind of people and, you know, they tried.
Speaker 6:But, like, YouTube's Juggernaut. Big in its own right.
Speaker 1:So Yeah.
Speaker 6:Were there when all this stuff was happening. And you can see, you know, I remember that I tell the story that he met Steve Jobs, and Steve said, if I give you one piece of advice, the word is focus. And they're like, no, we're gonna try a lot of things and see how many of them work. So, you know, there are many ways to get to Yeah.
Speaker 2:Head in the clouds philosophy Yeah. Like clearly did work for Google's sort of academic culture. Do you feel like that's the right characterization of Google? This this this academic, the 20% time, the lots of different projects, primordial soup to some degree. Did you try and continue that?
Speaker 2:Or was
Speaker 6:that No. Look, I think part of is my opinion. I'm sure a lot of people have been, they do too. But I think the secret sauce is the consistent focus on product Mhmm. Greatness.
Speaker 6:Mhmm. And that comes from the founders. You see, look, Travis, I saw him earlier.
Speaker 2:Yeah.
Speaker 6:Companies take on the form of their leaders. Mhmm. And it's apparent in every company. And pretty much, if you sat down, did an experiment, and I wrote down five objectives over here, which are company cultural characteristics, I wrote down five here, which are founder characteristics, and I said go match them. I bet many people will able to match him because you can see the similarities between
Speaker 2:Yeah.
Speaker 6:How leaders lead and how companies adopt to the culture of the leader.
Speaker 2:Yeah. Yeah.
Speaker 6:So I think that's where Google's culture comes from, from the founders. And the founders were very product obsessed, you know, as you heard, like, didn't wanna spend time on business. I I remember him going to the first ad all hands and he walks up and says, well, I gotta tell you guys, I hate ads that are intrusive and they're bad. That's a great motivational thing. These guys wants to run out and go and exert.
Speaker 6:Like, I just told them what they do is not interesting to me. Yeah. Yeah. Yeah. But kind of you look around, like, you know, every product that they built, they didn't look at monetizing it for a very long time until they believed the product had become ubiquitous Yeah.
Speaker 6:And the product had become interesting. So I think that product obsession is Mhmm. Part of the culture.
Speaker 2:Yeah.
Speaker 6:I think that's partly because of where Yeah. Their secret sauce comes from. Now, with the amount of resources they have, they can afford to do that for a very long time. But having said that, we we did it even then. Like, you know, Gmail had no monetization for years, or Google Maps had no monetization for years.
Speaker 6:But it was growing like wildfire.
Speaker 2:Yeah. Yeah. So coming into Palo Alto Networks, did you
Speaker 6:I did a little stop in the middle of Massa. I know Travis is talking Yeah. Easy money. Was part of
Speaker 5:the East
Speaker 2:Coast. Easy
Speaker 6:money. You always thinking shit. Yes, I was. But that was after Google.
Speaker 2:But coming into Palo Alto
Speaker 1:Did you ever you Did you guys ever pass on a company?
Speaker 6:No. I passed on Uber.
Speaker 2:No. No. Wait. I didn't.
Speaker 1:No way. What round? What round?
Speaker 6:I think it was 16 or 20,000,000,000 all around. Okay. And then I left and Masa did the deal. I passed on Adam Neumann.
Speaker 7:Okay.
Speaker 6:There's a book. Told my guy who was the analyst. Yeah. I said, listen, we're a tech investor. Yeah.
Speaker 6:Anytime you bring me a business which is masquerading as a tech business, which is a commercial real estate business Yep. You should go work there. Don't work in tech.
Speaker 2:Yep. Makes sense.
Speaker 1:Good Yeah. Good call there.
Speaker 2:It's a great story.
Speaker 6:Get some right. I have made a lot of bad ones too, so don't worry.
Speaker 2:Yeah. So so so going into Palo Alto Networks, you know, you have these five cultural tenants from the company, five cultural tenants from the founder. You're coming in as a new CEO. How did you think about resetting the culture, expanding the culture, bringing what you value to bear across the company in a way that's not disruptive, but gets you where you need to go?
Speaker 6:Oh, there's no way to be not disruptive.
Speaker 2:Okay.
Speaker 6:Let's get that Okay. Look, you know, life is about standard deviation. Yeah. You want excess returns? There are no excess returns with no standard deviation.
Speaker 6:Yeah. This is not this has been proven in every Yep. Facet of life. Right? Yep.
Speaker 6:You wanna date a good looking person, you have to take the risk. Right? Yeah. Makes sense. You wanna build a great business, you have to take a risk.
Speaker 2:You gotta
Speaker 6:make money in investments, you gotta take a risk. So Yeah. I don't think there's a non disruptive way of creating transformation. Yeah. Having said that, you know, as you probably know, I knew nothing about cyber security.
Speaker 6:Yeah. I never run a public company. Yeah. Had, you know other than that, I was a perfect candidate. Yep.
Speaker 6:So which is great. Let's find
Speaker 7:a guy. I I I
Speaker 6:can only imagine the board deliberation. Like, if you look at a board, you know, they write these long job descriptions Yeah. Brief headhunters, hey, go find us somebody. So imagine that conversation. Find us somebody who knows nothing about this job.
Speaker 6:And so I'm like, either they were geniuses or, you know, they weren't paying attention to the headhunter. Anyway, I got the job. I show up there. I'm trying to learn cybersecurity and I'm trying to understand the culture of the firm. Now, you know, my predecessor Mark McLaughlin, he's a West Point guy.
Speaker 6:He was a very high integrity company. Mhmm. My father's a lawyer. We come from the same stock. So I like the fact it's a high integrity company.
Speaker 2:It's important for a cybersecurity firm
Speaker 6:too. It's important. Yeah, of course. It is. It's important for every company that's gonna Especially.
Speaker 6:Yes. Especially so. It was the best product in this category. Yeah. It's a good thing.
Speaker 6:What I discovered was, which happened in that industry, people get caught up in the success of the current product and stop thinking about what comes next and what we have to look around the next corner. I think leaders jobs are to think about what hits us in two, three, four, five years and how do you prepare for that now. Because I have a firm belief it takes four to seven years to build a great product. Mhmm. Now, maybe it's become three to five or two to four with AI.
Speaker 6:But you go back and think about it. Anybody you had through here
Speaker 1:And how do you what's your personal definition for of of what a great product is? Because there's a lot of products today that grow really fast that aren't necessarily great.
Speaker 6:Well, think there are two aspects to this. Right? There's a product when you're competing with somebody else. In which case, you have to build something better than that. So much better that the customer is willing to switch because you have a much better experience.
Speaker 6:We take Google search, right? People are doing there were 14 search engines before Google search came. Yeah. It took Google seven years to get to compete with the other 14 people where the users are willing to switch. Yeah.
Speaker 6:And there are products and categories where there's no competition. Right? There's nothing called Uber. I'm gonna try it whatever it
Speaker 2:is. Yeah.
Speaker 6:But if you think about what big big what made it a mass market experience where you can scale it around the world, took five to six years, Ruber as well. Take So if you go down history, it has taken four to seven years to make it a complete compelling product that people want to use and want to switch whatever they're doing, switch behaviors. And that's when you start seeing, you know, scale work. Now, the current AI world, all bets are off.
Speaker 4:We'll see
Speaker 6:what happens. You know, open ended a lot less, but there had no competition. It was the best thing going at that point in time. Yeah. So so when I walked in, I realized the thing the company wasn't doing was one, they weren't innovating fast enough.
Speaker 2:New products.
Speaker 6:And for the first three months, I felt like, you know, we're talking past each other. Mhmm. So I took a weekend and I sat down and wrote all my business principle I'd learned in my entire life. Mhmm. And, you know, in hindsight, I would urge every leader to do that before.
Speaker 6:I call it my belief document.
Speaker 5:Mhmm.
Speaker 4:So
Speaker 6:I wrote it and I showed up and I printed eight copies and dropped it in front of everyone in my team saying, read it, best debate. Like, what is this? I'm like, this is my recipe book. This is why I act in certain ways. This is why we have disagreements.
Speaker 6:When I tell people, no, you can't hire that person, they get really frustrated. Oh, my God. I've been looking for six months. I'm like, that's not a good person. Mhmm.
Speaker 6:B's hire C's and A's hire A's. Yeah. And the more senior person, you're gonna destroy an entire of my organization so that leader's not good. Mhmm. Oh, I get it.
Speaker 6:That's why he's gonna let me hire that person. Now, maybe that's an A, maybe that's a B. That's a different debate.
Speaker 2:Yeah.
Speaker 6:So it became so much easier when we were all singing from the same hymn book. Mhmm. And now, it's kind of mandatory reading and debating for every new senior person in our company. They have to read my belief document, Which is kind of like sets the tone for how we operate.
Speaker 1:Is it still one page?
Speaker 6:It's about 11.
Speaker 1:Okay.
Speaker 6:It's more like a It's a little booklet. But you can summarize it
Speaker 1:with any AI engine. But
Speaker 6:what happens like, wanted more clarification. What does that mean? Well, You wanna read the long form? Can get the
Speaker 5:long form.
Speaker 6:Wanna version. You wanna summarize it? You can summarize
Speaker 2:What about product development? Did you come in with an idea around build versus buy, a framework for evaluating those trade offs? Did that evolve once you got into the actual role?
Speaker 6:So, look, cybersecurity is the youngest sub sector of technology.
Speaker 2:Okay.
Speaker 6:It came about when we had connectivity. Right? Yeah. IPhone, suddenly everybody's on the iPhone, every firm, every company is trying to get their application on their phones. Which means we're all trying to take what we used to be controlled access Yep.
Speaker 6:And make it accessible to every consumer. Yeah. So it came about twenty five years ago. And every new piece of technology creates a whole series of new sets of risks, a whole new set product that we deliver. Now, interestingly, it's also one the most innovative industry in the world because the bad guys aren't saying, oh, let's try the same thing we tried yesterday which got blocked.
Speaker 6:Yeah. Every morning they wake up, they're trying to find a new way to get into your business.
Speaker 3:Yeah.
Speaker 5:Yeah.
Speaker 6:So you got highly innovative, new set of market in cyber security. And as a consequence, the industry structure is extremely fragmented. There were 2,600 cyber security companies
Speaker 1:Mhmm.
Speaker 6:And the largest company had 1.5% share, which was us. So you have one and a half percent share of the market, then you will need to build a strategy. How do I get from one and a half to 10 to 20? Yeah. Right?
Speaker 6:Because look at every other pieces of tech, there are lots of people market share.
Speaker 1:Yeah. Yeah.
Speaker 6:Yeah. So I said, look, this is a math problem. The math problem is how do we get to 20% market share? You reverse into that and say, well, you're to have a lot more stuff to sell to the same per customer to have more And market then we said, okay, great. Now, where are the product categories where we can build products which are up and coming?
Speaker 6:The good news is we live in a constantly evolving technology world. So I sat down with the founder who was there then and chief product officer and we sat down and literally on napkin wrote AI, cloud and network. Cloud and AI were new and we were the we had the right to win in network, but we only did one out of six things in network.
Speaker 1:Yeah. So
Speaker 6:then we said, how do we short circuit the four to seven year problem?
Speaker 1:Only doing one thing in network when your name is Networks. It was in the name the whole time.
Speaker 6:That's right. Exactly. But they got happy. They got fat and happy. Know, an $18,000,000,000 company, you started at three when you went public.
Speaker 6:This is great. It's up six x. Why? What are we doing wrong? Nothing.
Speaker 6:Yeah. I couldn't rest on that. I had to go do my own six x thing. So you sit there and you say, okay, we need to get to be number one in net everything in network security. So it's gonna take me forty seven years to build a great product.
Speaker 6:That's not enough time. So I said, let's go find what we can buy. And I know there's like this thing where I don't think many tech companies execute M and A well. Mhmm. Right?
Speaker 6:So Is
Speaker 2:that because of purchase price or post merger integration?
Speaker 6:Purchase price
Speaker 2:Or is it identifying the wrong synergies?
Speaker 6:Purchase price is an irrelevant irrelevant artifact. Okay. Either it's gonna work. If it's gonna work, it's gonna work phenomenally well Yep. Or you're gonna screw
Speaker 2:it up.
Speaker 1:Yep.
Speaker 6:It's not what you paid, it's what you're able to do with
Speaker 4:it.
Speaker 6:Yeah. Right? You could say that Instagram was expensive or YouTube was Double click was expensive. They all work perfectly. Yep.
Speaker 6:Right? AOL Time Warner, different story. Totally. So it it boils down as to how you execute past the price you paid for it. So that's not that's not the relevant thing.
Speaker 6:In tech, when you buy a company, you buy a team, you buy an existing product and you buy a roadmap for the future. The question is, can you deliver on that roadmap? Can you accelerate on that roadmap? Does it work? So, you know, we wrote our little M and A manual.
Speaker 6:We said because your product is plus, we gotta keep the founders there. We're make sure we have the right people running the company. And over time, we've gotten really good at it. We signed a term sheet and we asked the founders to sit with our team and redesign the product roadmap, so we like it and they like it. And if they don't agree on our expectations and we don't agree on theirs, we don't buy the company.
Speaker 2:Makes sense.
Speaker 6:We make them in charge. My teams are having to work for them, which makes them really unhappy and not many of them like you. But I'm like, look, these guys went out there, raised money, kicked your ass
Speaker 4:Yeah.
Speaker 6:In a category,
Speaker 2:in a
Speaker 6:category, and you want them to work
Speaker 2:for you.
Speaker 6:That makes no sense to me. You're gonna work for them and learn from them. Yeah. Yeah. Yeah.
Speaker 6:Some people get the hang of it and some people move on, which I'm fine with. Yeah. Yeah. Right? So these people had less resources Sure.
Speaker 6:They struggled, they hustled, they built a product, and they kicked our ass. Yeah. That means so so our job is to enable these people. We look at them and say, whatever business plan was when you were a small private company, find me a business plan that's twice as assertive and bold than the one you had then. Mhmm.
Speaker 6:So we buy them, we pay the money, but we also give them more Sure. Than they would have gotten anywhere else. Yeah. Because I'm sure we will slow them down a little bit. Yeah.
Speaker 6:I've got a bunch of people who are trying to like ask questions and get them to slow down.
Speaker 2:But you're almost immediately expanding the TAM on day one. There's so many more, you know, power
Speaker 6:that can we've built a phenomenal system Yeah. Take them to market. Yeah. So we say, we're gonna take you to market. I have 3,000 people in the field.
Speaker 6:Mhmm. We're to find a way of catching their fascination, making sure they're going to get excited and make money. And 3,000 people will go out there and see 10,000 customers, some of them are going to bite. Yeah. You're going to go with four resources and go meet 20 customers.
Speaker 6:You're to go to 6,000 or 10,000 customers. Yeah. That's where the secret sauce kicks in. Mhmm. We've bought 34 companies so far.
Speaker 1:Mhmm.
Speaker 6:Wow. And we do this for our board. I think our hit rate on things that have worked is over 70%.
Speaker 2:It's amazing.
Speaker 6:The last three are obviously new, so we have to Yeah. And those are biggest ones. But it has worked out so far.
Speaker 2:Yeah. Do you find yourself ever going back to your MBA, your CFA for guidance on financial management of a public company? Or is it just so different that you can just pick it up? Because it feels like it feels like there's a whole new set of tools.
Speaker 1:That one case study that
Speaker 2:come into the toolbox when you're running a public company, whether it's dividends, large debt issuances, buybacks, there's m and a. There's so many different things in just managing a stock price that a public company CEO has to do in some ways. What do you think?
Speaker 6:Well, the MBA is a social experience.
Speaker 4:Okay.
Speaker 6:I think people go to business school and They get way too.
Speaker 4:Make a lot of
Speaker 6:friends and they get to know people. I said, oh, my my I have a classmate who went to school with me and I go cut cut a deal with him.
Speaker 2:Yeah. Yeah.
Speaker 6:I I think it's not what you study in a case study, it's a mindset. It's a way of thinking. It's kind of like learned behavior over time. You get good at it. You don't know why you do it Mhmm.
Speaker 6:But it becomes part of your sort of muscle memory. And I think that's what happens. I'm a huge student of business. Spent a lot of time listening, reading, talking to people about this stuff. And you just get muscle memory over time.
Speaker 6:You just kind of get a sense of what the right thing to do is. And I think the part which we sort of under appreciate, people who do well are people who go back to first principles and try and abstract and say, from a first principle basis, is this important or is not important? For example, I don't have to manage my stock price. The stock price manages itself. Okay.
Speaker 6:The the stock price the market is sometimes smarter than individual CEOs. We have to respect that. Mhmm. There's a lot of players out there. They're not all silly.
Speaker 6:There's a reason your stock price trades where it trades. Sometimes it trades because they don't trust you. Sometimes it trades there because they don't believe that your prospects are as rosy as you believe they are. Sometimes it does well because it anticipates the prospects are better than you think. So the market has a lot of different variables it assesses.
Speaker 6:Now, to the extent that you're convinced this is the right direction to go, you're convinced that you're executing well, that's great. If you believe there are some challenges or flaws in the way you're executing, the market will give you a hint. The market will tell you. Now look, the market gets it wrong sometimes. It gets it right many times.
Speaker 6:It's just another variable you have to take into account. But the idea of managing a stock price is is better, you can.
Speaker 2:But if the market gets it wrong, you have an you have financial incentive to buy your
Speaker 6:stock or Yes. We just did. Sell you. You brought in all the stock because but the market said, no. Yeah.
Speaker 6:We hear this thing called AI is eating software. We're gonna dunk everybody Yeah. Yeah. Yeah. Because Claude decided to put out
Speaker 1:some
Speaker 6:coding. Yeah. The security product. Oh, shit. This is gonna destroy 300% industry because Yeah.
Speaker 6:Adaria launched a product.
Speaker 2:Yeah. I saw a chart that showed the mentions of moats on SEC conference calls, on public company earnings calls is going vertical. Have you been thinking about restating the moats to shareholders?
Speaker 6:A few earnings call ago, I put my earnings script into Gemini Yeah. And said, assess my earnings script.
Speaker 2:Okay.
Speaker 6:Tell me, honestly, what do you think? Yeah. He's like turning into a psychologist says, not sure what you're concerned about, but you're trying to use the word momentum and exciting more times than you normally do. Oh, Yeah. So no, I'm not gonna say
Speaker 2:Yeah. Yeah. I'm okay with That's good. I'm not
Speaker 6:gonna say both. You don't have to say much. But like Yeah. You expect me to sit here and and and sort of speak my book. But LLMs are phenomenal at the 90% problem.
Speaker 6:Mhmm. 90% problem is make me a movie. Yep. Paint me a picture. Yeah.
Speaker 6:Merge these photographs. A 90% problem. Yeah. If you get it wrong, it's not a big deal. Yeah.
Speaker 6:There's nothing destructive. For the same reason, you wouldn't want Gemini driving
Speaker 1:there's also those 90 problems. There's so many of them where Yes. You will never know exactly if you did the best job or you did you just did an okay job. Like, sometimes you get some signals but it's not as binary as let's say, did we expose user data to a bunch of people
Speaker 6:different. That's a whole different conversation. But before you get to exposure data, like, you know, you write a letter to, you know, respond to my emails. Okay. Fine.
Speaker 6:It's 80% good enough, much better than me having to go do each one of them.
Speaker 2:So Yeah.
Speaker 6:I think we're okay with the 90% outcome.
Speaker 1:Mhmm.
Speaker 6:But you would not let Gemini drive your car Mhmm. Or Chad GP drive your car and hallucinate
Speaker 3:Mhmm.
Speaker 6:For the same reason you don't want generative AI managing your cybersecurity because we're in the 1% business. Remember, I'm trying to block that one guy who's gonna get into your company and steal your data. Yeah. That's a 1% problem. It's a point 01% problem.
Speaker 6:Yeah. So we we we rely on thousands of machine learning algorithms. We rely on tons of pattern recognition, domain specific data. So we're trying to solve the 1% problem. Generative AI does not solve 1% problem, it solves 90% problems.
Speaker 2:Yeah.
Speaker 6:We solve 1% problems. So we're least threatened in this notion. There are parts of our business where we could leverage Generative AI to make it better. Yeah. Yeah.
Speaker 6:And that that you will see. I think the code scanning team is a perfect example. Cloud launches it. People get petrified. It's a $3,000,000,000 industry.
Speaker 6:We're a $300 market. Yeah. And the stock when the market loses, you know, takes down $300,000,000,000 market cap that day. Fantastic. I was like, great.
Speaker 6:Yeah. Now the market's getting it wrong. Let's go buy our stocks.
Speaker 4:So, yeah,
Speaker 6:the market does get it wrong.
Speaker 2:What explain to me how the the surface area of cybersecurity threats is changing. I I mean, off the top of my head, could think of geopolitical risk, more AI endpoints where vibe code is less secure, and so you need more, you know, you need more cybersecurity. Also, just the hackers that are out there are now AI enabled, so their threats are getting more sophisticated. What is this year looking like from just the scale of cybersecurity threats broadly?
Speaker 5:So, you know, if
Speaker 6:you if you go back to First Principle, what happens is every technologist who's positive and optimist builds software for the best use case. Yeah. For the best case. They don't they don't build it for For bad the worst use case of
Speaker 4:it. Right?
Speaker 6:You didn't build a knife and say, oh, let's not release a knife because people might stab each other. Yeah. Say, this is great. Can do so many productive things with it. Right?
Speaker 6:Yeah. So we always build technology with an optimistic positive attitude. Look at what AI is doing. We're all building from positive AI attitude unless you start getting into, you know, debates about can we use for war or not. But for the most part, you're building it for the right reasons of positive attitude.
Speaker 6:But, you know, didn't build the first airport with TSA in mind, did we? Yeah. No. Like, are we gonna make sure we could torture people and take
Speaker 1:them to the line?
Speaker 6:We can take their clothes off and shoes So we didn't do it. So we actually introduced security afterwards because we realized there are bad use cases. Unfortunately, same thing happens with technology. Sure. We build this stuff and say, let's go use it.
Speaker 6:People aren't going do bad stuff. And then you get you suddenly see an agent hacks, you know, somebody's business, they're all shit. We got to go figure out how to stop this agent from hacking this stuff. Yeah. So so our job in cyber security is to anticipate the bad use cases
Speaker 5:Mhmm.
Speaker 6:And try and throw a ring fence, a series of guardrails, a series of protection around technology.
Speaker 4:Mhmm.
Speaker 6:To the extent technology evolves at a fast pace, this is good for us because we have to constantly find anecdotes to that. Then you have to make sure you're in the zeitgeist to what's happening, so you want to be there. So, you know, a little flashback like this industry before the last eight years used to stay in their swim lanes. There are five swim lanes in cybersecurity and say, oh, you you do your thing, I'll do my thing. You do your thing, I'll do my thing.
Speaker 6:Suddenly, we said, this is bullshit. We should be in five lanes. So now we're in all five lanes. Suddenly, the whole industry has flipped over its head. Now, every time we do an acquisition, we see five copycat acquisitions done in our industry around us because people say, this guy must know something.
Speaker 6:Actually, this guy knows nothing, but Yep. Thank you very much. They just validated my thesis. Let's go.
Speaker 2:Yeah. Yeah. Right. So we're
Speaker 6:going doing that. So it is good for us when technology goes through a tremendous amount of evolution. Whether it's cloud, whether it's AI Yeah. Whether it's, you know, people going back to coding. Like, it's funny.
Speaker 6:Coding causes more activity to happen in laptop. Needs a whole different security in your laptop than it used to have. Put an MCP server there, I need to protect it. Yep. Never were putting any kinds of, you know, API access on your laptop.
Speaker 6:So the constant evolution of technology demands more innovation in our industry. Mhmm. More innovation in industry, more deployment of technology around the world causes more demand for cyber security. That's good. Of course, we have a geopolitical set of issues like, you know, the more you go into war, the more you know, nation states are the most prolific cyber hackers in the world.
Speaker 6:Yeah. Right? There's nation states out there who who literally, you know, unofficially sponsor Yeah. Cyber activity because they need it at times. They're revenue source.
Speaker 6:It's also it's also a training ground. Right?
Speaker 5:Yeah. You
Speaker 6:keep doing it in peacetime, so when I need it in wartime, I can use you.
Speaker 2:Oh, right? Interesting. Yeah. So so
Speaker 6:there's this whole cat and mouse game that's played in the industry. So, you know, geopolitical uncertainty, economic uncertainty, all these things are catalysts for activity. Yeah. And that's on one side. On the other side, if you look at it, because of the fact that we never designed it with security in mind and the base of the technology is evolving, almost every enterprise is behind the eight ball in the modernization they need.
Speaker 5:Mhmm.
Speaker 6:And it's kind of like a hard decision to make. Right? If you've never gotten hacked and you you sit there and become complacent saying, look, I've been spending $50,000,000 a year and it's working. Mhmm. And suddenly one day, oh, shit.
Speaker 6:It's not working. Somebody just got into your business. Those are the best days for us, by the way. Don't know somebody gets shit hits the fan. I don't wanna like, you know, get excited about people's tough times, but Nice.
Speaker 6:Yeah. No. That's why we have a team which is which is our benevolence. We have a team which you can call. We don't charge you for that team to go help you and shit, it's the fan.
Speaker 6:Yeah. Because we know you're just about to get religion, you're about to go transform everything in your in your infrastructure because you wanna be, you know, at the bleeding edge. Again, security is kinda like this where you could spend too much Mhmm. Or you could spend just right. Mhmm.
Speaker 6:Right now, people generally, the the infrastructure is antiquated relative to where it needs to be. Mhmm. There's a lot of transformation that needs to happen. So I think this is going to be sort of a perpetual opportunity because combine that with the base of where technology changes, that's great. That's kind of one part of it.
Speaker 6:The other part is which was our insight three years ago. If you take a look at what, you know, Salesforce has done or Workday has done, you guys are young, it's like, back then when I was working at Fidelity, we had 27 systems which combined made up customer relationship management. Because everybody had their own system. You had keys, you had like data references because you built your app at that time. Yeah.
Speaker 6:And cyber security is kind of there. Yeah. Like every customer has more cyber security vendors than technology vendors outside of cyber security. Because they're like, oh Yeah.
Speaker 5:Yeah. I got 80 of
Speaker 6:them because I got everything solved. No, dude. You gotta get them all together. Yeah. So we're in that phase where we're building the first sort of combined platform of cybersecurity and that's why we wanted to be in every swim lane.
Speaker 6:And as the market converges, we will be able to get people into less and less vendors where data can talk to each other because at the end of the day, there's only two factors that go in our business. One factor is if it's bad, stop it. Mhmm. If I know it's bad, I'm pretty good at stopping it. The problem in cybersecurity is never known bad.
Speaker 6:Mhmm. It's the one you don't know. So all the money is in figuring out when you didn't find it at the door is something bad going on or somebody is trying to intrude into your business. Mhmm. And that's where all the all the action in cybersecurity is.
Speaker 6:So that requires data to be connected. Yeah. So and this is the last fact, leave it and you can go wherever you want. But the average time to detect and remediate a cyber attack is four days in The United States. Mhmm.
Speaker 6:Mhmm. Now with AI, the fastest time to attack a company and exfiltrate private data is twenty eight minutes.
Speaker 1:Wow. Wow. Yeah. That's wild.
Speaker 6:I was shocked when I went to Palo Alto. I heard that. So in seven years, we've gotten ourselves to one minute.
Speaker 1:Yeah. Wow.
Speaker 6:So we just gotta get everybody else to one minute.
Speaker 1:Yeah. Yeah.
Speaker 6:So a lot of lot of demand in the future.
Speaker 2:Has anyone ever gotten a job working for you by sending you a physical letter?
Speaker 6:Sending me a physical letter and gotten a job. The times have changed, but, you know
Speaker 1:That creates opportunity.
Speaker 2:Have they changed though? It is a way of standing out. You probably get a lot of cold email. You probably
Speaker 6:I get a lot I get letters too. I get letters, I get pictures, I get I get
Speaker 2:What advice are you giving to young people who are entering the job market or wanna work at Palo Alto Networks?
Speaker 6:It it I think it's it's the Wild West right now out We have stopped looking at your CV. Okay. We run hackathons Yeah. Every second weekend.
Speaker 2:Sure.
Speaker 6:And anybody who can vibe code and get ahead of people around them Yeah. We'll hire them. Wow.
Speaker 2:I don't
Speaker 6:care when you went to school.
Speaker 2:That's awesome.
Speaker 6:Because I just think people have to learn this is something that has not been taught in schools. Yeah. I'm glad if you go to school, it's good. You got social skills, you have friends. This is Yeah.
Speaker 6:Good. We want, you know, mentally balanced people. Yeah. This is good. But we wanna make sure that you know where the world is going.
Speaker 6:I'm a huge optimist on AI creating job opportunities. I think we'll go through a transformation period. But we're trying to find people who know how to I have to overwhelm my company with more people who know how to use AI than less people. Yeah. Right now, more people don't know how to use AI in my business, less people know how to use it.
Speaker 6:Yeah. I think if if traditional company, and traditional include ourselves, these companies who've been around for ten years, fifteen years, want to get back and win in the next iteration of technology, we have to transform as fast as we can that requires more people who can use AI Mhmm. Than less people. Mhmm. And he walks in here and tells me that more people who know how to use AI than less, they're
Speaker 7:going to win.
Speaker 6:Mhmm. And that's the biggest need of the hour. So I'm out there trying to hire people. So if anybody's listening to this, and they think they are the best vibe coders, the best user of creative AI, write me a letter.
Speaker 2:Amazing. I hope I hope you do. I hope you do.
Speaker 6:Send me a letter.
Speaker 2:So you
Speaker 1:have five coded products There via physical
Speaker 2:is an API for sending physical letters. There's also an API for sending what's called lumpy mail, which is a letter have you ever gotten a letter that has like it it looks like it has something inside of it. It's like it it's lump mail room Yeah.
Speaker 6:Into the bomb spot. Yeah. Exactly. You may you may find it in incinerator because
Speaker 2:People figured out there's an arbitrage there because you're more likely to open an envelope that looks like a package, and you'll open that, and then you just get the
Speaker 6:ad Unfortunately, some of us have people who open them because they don't want us to have the risk Of course.
Speaker 2:I I imagine it's pretty important in in your role.
Speaker 6:Well That has to be has to pass the regular physical filters as well.
Speaker 2:Well, thank you so much for taking the time
Speaker 6:My pleasure.
Speaker 2:To come show with us. This is fantastic. Let's do this again soon.
Speaker 6:Alright.
Speaker 2:And before we sign off, let me tell you about vibe.co, where d to c brands, b to b startups, and AI companies advertise on streaming TV, pick channels, target audiences, measure sales just like on Meta. And let me also tell you about console.com. Console builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password resets. And you heard you heard Eric Lyman mention Shopify earlier. Shopify, of course, is the commerce platform that grows with your business and lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents.
Speaker 2:Is there anything else in the timeline that we should close out with? Any breaking news that we need to get to? And while you look that up, let me tell everyone about Sentry. Sentry shows developers what's broken and helps them fix it fast. That's why a 150,000 organizations use it to keep their apps working.
Speaker 1:There's some breaking news. What is that? Anthropic researchers are departing to launch a NeoLab Oh. In talks to raise capital for a new startup at a $1,000,000,000 valuation. Yeah.
Speaker 1:Not. What a crazy time
Speaker 2:to launch a NeoLab. We weren't we just asking Tyler about this? Is there gonna be another NeoLab? Is the boom over?
Speaker 1:It's notable because we just haven't seen a lot of people
Speaker 2:Leaving Anthropic. Yeah. Yeah. That's right.
Speaker 1:So Might is
Speaker 2:But I'm very interested to see, what they wind up launching. I'm also very sad that we didn't get to our lightning round today. We had a bunch of great people scheduled. Of course, we ran long, but we will have them back on the show soon to get all the updates there. Let me tell you about Railway.
Speaker 2:Railway is the all in one intelligent cloud provider. Use your favorite agent to deploy web app servers, databases, more while Railway automatically takes care of scaling, monitoring, and security. And finally, let me tell you about Cognition. They're the makers of Devon, the AI software engineer. Crush your backlog with your personal AI engineering team.
Speaker 2:And with that, I think we can play our credits.
Speaker 1:What a fun show.
Speaker 2:What a great show.
Speaker 1:Nikesh, a legend. Yeah. Gustav,
Speaker 2:TK. Whenever we travel, everything kinda comes together and we and we have to do a catch up episode, but this one was was one for the books. Tons of great conversations. Thank you so much for listening. You
Speaker 1:have a.
Speaker 2:Leave us five stars on Apple Podcasts and Spotify, and we will see
Speaker 1:you Monday.
Speaker 2:Tomorrow or Monday.
Speaker 6:We love you. Goodbye.