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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching TVPN. Today is Thursday, 05/15/2025. It never gets old.
Speaker 2:We are It never gets old.
Speaker 1:From the temple of technology.
Speaker 2:The fortress of finance. The capital of capital.
Speaker 1:We're a little bit brighter today. We're warm things up.
Speaker 2:Look at us.
Speaker 1:More welcoming to the to the guests. More welcoming to the fans. More welcoming to the viewers. We got a great show for you today, folks. Let's pull up the graphic to show you who's coming on.
Speaker 1:We got Delian from Founders Fund, Alex from World Coin, Josh Wolfe from Lux Capital, Jason Fried from thirty seven signals, and Eugenia from Replica. Quite the eclectic group. Yeah. We really put together Not
Speaker 2:the 500 people you would normally see.
Speaker 1:There's some venture capital in there. There's some AI in there. There's some thirty seven signals is just like a legendary tech company, but has built outside of the venture capital world going back to back with the venture capitalist. Yep. Kind of sworn enemies in some ways.
Speaker 1:Very true. Very true. It should be fun.
Speaker 2:I'm excited to ask Jason, what do you love about the current state of startups? Yeah. I don't know if he'll have an answer. Yeah. But I'm sure I mean, we were talking about
Speaker 1:this earlier, just this idea of like, you know, there are startups out there right now. Everyone knows that they're good businesses, but they shouldn't raise venture capital. He's kind of the king of the company that didn't need to raise venture capital. And I feel like that message needs to be out there for entrepreneurs, not for VCs because they're going to earn their fees no matter what, even if they pump it into a company that
Speaker 2:Well, know they need to deploy.
Speaker 1:Yeah. And they should and they should avoid backing companies that don't need venture capital and just stuffing the goose like a foie gras. Yeah. But
Speaker 2:I would like to see a scaled platform VC Yeah. You know, make Basecamp an offer they can't refuse.
Speaker 1:And then invest $500,000,000 into the company.
Speaker 2:It just becomes And then try to IPO it.
Speaker 1:It just becomes the
Speaker 2:most capitalized of all time.
Speaker 1:SoftBank comes in, puts in
Speaker 2:There's definitely there's always a number. You know, they've been offered a bunch over the years and and always turned it down. But I think Everybody's got a number.
Speaker 1:For for 37 sales, it's not a matter of the numbers. It's a matter of there needs to be a car above the Aston Martin Valkyrie. So as long as they as long as the founders can afford Valkyries, they don't need to do the There's
Speaker 2:no incentive.
Speaker 1:But if some if Aston Martin were to drop a car maybe at the $300,000,000 mark, all of
Speaker 2:a sudden That could get that. Conversation. It would definitely start a conversation.
Speaker 1:It would definitely start a conversation. Anyway, we have an exclusive in The Wall Street Journal from Warren Buffett. He has
Speaker 2:Yeah. In many ways, it's our exclusive now. It's ours. We have the only copy of this newspaper. We do.
Speaker 2:We do.
Speaker 1:It's not breaking news until it's on TBPN. That's what we like to say.
Speaker 2:This edition of the journal is almost like an NFT. They don't they're only making
Speaker 1:They're only making one of this exact million. Yeah. Anyway, Warren Buffett has given an exclusive interview to The Wall Street Journal, and I I thought it was just a fantastic the way that they quoted him was particularly interesting. So, basically, they're they're they're trying to dive into why did Warren Buffett retire, why did he hand the the the reins to Greg Abel. The answer should be kind of obvious, but Buffett is revealing that it was because of his age.
Speaker 1:He's starting to feel old for the first time. And so, he's 94 and he gave the the top job to Greg Abel and he says, in recent years, Buffett has finally observed how much energy his appointed successor brought to each working day and how he had his own days had slowed. The two men were operating at different speeds increasingly slow. I see you over the
Speaker 2:I was hovering over the golden retriever
Speaker 1:mode. Okay.
Speaker 2:But I'm not gonna hit it.
Speaker 1:There was no magic moment. Buffett now 94 said in an interview with the Wall Street Journal, how do you know when how do you know the day when you become old? Berkshire shareholders and onlink and onlookers have long wondered how anyone could replace Buffett for decades, a towering figure in American business and finance. But as he passed his ninetieth birthday, Buffett began to experience some people some something most people come to accept much earlier in life his age.
Speaker 2:And this quote really stood out. He says, I didn't really start getting old for some strange reason until I was about 90. He said It's a by phone from his office in Omaha. He's not using Zoom to be clear here. But when you start getting old, it does become it's irreversible.
Speaker 1:Use of the em dash, which has been controversial because ChatGPT loves to throw an em dash around.
Speaker 2:But he was on the phone. Yeah. Maybe he prompted this response.
Speaker 1:Yeah. Maybe they're talking to 11 last time.
Speaker 2:Said, em dash, it's irreversible.
Speaker 1:No. But the em dash is is interesting here because they're they're quoting him so directly, it would have been very easy for them to to rewrite that quote as as but when you start getting old, it's irreversible. Right? Just take out the little misstep in the sentence, but they didn't do that. They quoted him directly, and they said, but when you start to get when you start getting old, it does become it's irreversible.
Speaker 1:And so they're they're recreating exactly what happened on that phone call, and I thought it was it was almost like an emotional moment because it's Totally. It's it's the quote, he's he's saying that he's aging, but the quote is so direct it's showing that he's aging.
Speaker 2:Totally.
Speaker 1:So that was very interesting.
Speaker 2:Let me give some more context here. He began to lose his balance occasionally and sometimes had trouble recalling a person's name. Suddenly, the newspapers he read looked like they were printed with too little ink.
Speaker 3:Brutal.
Speaker 1:In the past year, those Sad,
Speaker 2:but it's also natural.
Speaker 1:I mean, he's 94. Yeah. He's been on a generational run. On May 3 at the Berkshire annual meeting, Buffett stunned in the investing world when he revealed in the final minute minutes of his question and answer session his plan to step down as CEO in December and make way for Able. Those filling the arena in Omaha fell silent as
Speaker 2:Buffett's Abel, who's in his sixties
Speaker 1:Yeah.
Speaker 2:Which means that he 62. Could potentially go on a three decade run just to get where Buffett is today.
Speaker 1:Yeah. And so there there's a whole bunch of backstory that we've already covered here, but he says the difference in energy level and just how much he could accomplish in a ten hour day compared to what he could accomplish in a ten hour day, compared to what I could accomplish in a ten hour day, the difference became more and more dramatic. So Buffett's just seeing that Abel is more capable of running the business, for these long days. He was just so much more effective at getting things done, making changes in management where they were needed, helping people that needed help someplace, but just all kinds of ways. It was unfair really not to put Greg in the job.
Speaker 1:The more years that Berkshire gets out of Greg, the better.
Speaker 2:Yeah. And this wasn't fully priced in. You saw this in the market. The stock dropped. Yeah.
Speaker 4:A lot
Speaker 2:of people said, why why weren't people expecting this, right? He's 94. Yeah. And overall I think the execution on the news was Yeah. Smooth, right?
Speaker 2:He didn't say, I'm stepping down on Monday. This is clearly, you know, I imagine he would want to keep going, but he understands that it's the best for the shareholders Yeah. Which he has devoted his entire life to.
Speaker 1:Well, if Greg Abel wants to cut those ten hour days to just eight hour days, he should get on Ramp. Save time and money. Today, we are talking Are you gonna play the Ramp song? Ramp. Ramp.
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Speaker 2:Thank you to ramp for sponsoring the show.
Speaker 1:Anyway, Brian Chesky is in the news with Airbnb. Airbnb is in midlife crisis mode. He announced Airbnb two point o and did a piece with Stephen Levy in Wired, kind of breaking it all down, and Ben Thompson dropped a great analysis. And so, can we play the clip of Brian Chesky giving his keynote address? Brian Chesky, last year, came out with kind of the inspiration for founder mode, which Paul Graham catalyzed into an essay.
Speaker 1:But Brian Chesky really said that if you're running a company, even if you're not a product company that's releasing a new iPhone every year, you should drive your software company to annual releases and start thinking in in annual cycles. We've seen Flexport pick that up. We saw Figma do
Speaker 2:that to sabotage upstarts
Speaker 1:that
Speaker 2:wanna compete with Airbnb by saying, hey. Just ship once a year.
Speaker 1:Just ship once a year.
Speaker 2:Ship once a Every week. Don't ship weekly. Don't ship daily.
Speaker 1:Just It is some
Speaker 2:Get on get on my program. Is
Speaker 1:good. Yeah.
Speaker 2:No. It's good. It's good. He's an absolute dog.
Speaker 1:Anyway, let's hear from him about his plan for Airbnb two point o.
Speaker 5:What we're building is much more than a travel app. It's a global community in the real world where you can travel anywhere, live anywhere, and belong anywhere. This is what we're building. And to think, it all started with an airbed.
Speaker 1:Pretty good presentation style. It's a little slow for my taste. I prefer him when he's off script and just riffing and high energy. But I get that the audience is different.
Speaker 2:Riffing, high energy?
Speaker 1:Yeah. Plenty of allegations.
Speaker 2:Plenty of allegations, we won't discuss.
Speaker 1:But I think he's I think he's, you know, clearly presenting I mean, it's a big moment. Right? He's transforming Airbnb into something new.
Speaker 2:And Totally.
Speaker 1:It's risky. And so he needs to send the message to the investing community. And it's a public company. He needs to send the message that he's a steady hand on the tiller through this, you know, new version.
Speaker 2:Yeah. And he's just very clearly a student of Steve Jobs. Yeah. This feels like
Speaker 1:Totally.
Speaker 2:An Apple keynote
Speaker 1:Yeah.
Speaker 2:From fifteen years ago.
Speaker 1:Yeah. And so And
Speaker 2:that's okay.
Speaker 1:It's not
Speaker 2:the most original, but it it it
Speaker 1:It's an effective communication style.
Speaker 2:Effective and it comes off as as Yeah. As serious of as a of a company as they are.
Speaker 1:Yeah. So the wired piece starts by telling anecdote about Brian Chesky. It says the reinvention of Airbnb started with the coup of at OpenAI. On 11/17/2023, the board of OpenAI fired company CEO Sam Altman. His friend Chesky left into action publicly defending his pal on X, getting on the phone with Microsoft CEO, and throwing himself into the thick Altman's battle to retake OpenAI.
Speaker 1:Five days later, Altman prevailed in Chesky. I was so jacked up, he says, turning his buzzing mind to his own company Airbnb. Thanksgiving weekend was beginning. The Chesky extended family had already held their turkey get together a week earlier. Interesting.
Speaker 1:He celebrates it early. And the Airbnb CEO had no
Speaker 2:holiday context there? No. He was just like, I wanna be grinding while my enemies are are, enjoying their turkey Is
Speaker 1:this like some contrarian alpha that we're finding right now just have Thanksgiving a week early? So he has no holiday plans, so everyone else is off so he can just work, I
Speaker 2:guess. Yeah.
Speaker 1:I mean, I guess, you know, it is a Thursday. So if you just have Thanksgiving on the Saturday previously
Speaker 2:The alternative is that Airbnb gets so hectic around holidays. True. True. Yeah. In the office.
Speaker 1:Yeah. That makes sense.
Speaker 4:I mean,
Speaker 1:it's like Black Friday or, you know, a lot of D2C entrepreneurs are working over Black Friday, Cyber Monday. The holiday rush is certainly busy at most consumer companies, anything that's being gifted. So, yeah, maybe he's just learned that he's gotta be online then. Anyway, he completely he was completely alone in his sprawling San Francisco apartment except for Sophie. His golden retriever.
Speaker 1:Let's hear for golden retriever mode. Activate golden retriever mode. I love golden retrievers. I we saw some at the JetSuiteX terminal in Oakland.
Speaker 2:A couple.
Speaker 1:A couple. Beautiful dogs. Look at that dog.
Speaker 2:John was basically having a full on conversation with these two Golden Retriever, and the owners were not having it. They're like, leave us They're like, what are you doing? John's like, if I bring dogs
Speaker 1:to the airport, it's open season. Yeah. People can pet your dog if you're in a public place like that. Anyway, still wired out of his mind from the cathartic corporate rescue, Chesky began to write. He wanted to bust the company he'd cofounded out of its pigeonhole of short term home rentals.
Speaker 1:Amazon, he was fond of pointing out, was first an online bookstore became before it became the everything store. Chesky had long believed that Airbnb should expand in a similar way. So what is Airbnb's market cap right now? Can you look that up?
Speaker 2:So this is what's really interesting. Yeah. So they are an $84,000,000,000 company right now, but they are down, across the lifetime of the company.
Speaker 1:Yeah. They've kind of been I mean, there was the COVID up and down.
Speaker 2:They're all time, they're down 1.6%. So if you bought Airbnb shares five years ago Yeah. You would be
Speaker 1:This is the story of Snapchat. This is the story of a lot of the nonhyperscaler tech companies that got out, and they're fantastic companies. I mean, nothing to, you know, be upset about if you're running an $85,000,000,000 company. But you've got growth is addictive, and growth is what everyone wants. And if you're not growing, you're stagnant.
Speaker 2:As a former bodybuilder, this is like him sitting at, you know, two fifty five Yeah. You know, benching four plates Yep. For reps Yeah. But not able to break that, you know, ceiling.
Speaker 1:Never break the the
Speaker 2:But the chart looks like a kangaroo.
Speaker 1:It does.
Speaker 2:It looks like a kangaroo. Up and down, up and up and down. Never really built massive momentum.
Speaker 1:Yeah. And not not compounding anymore in the way he wants, so he needs to find a second act. Yep. And so Chesky had long believed that Airbnb should expand in a similar way, but things kept getting in the way dealing with safety issues, fighting regulation, coping with the existential crisis of a global pandemic. The company was in danger of being tagged with the word that ambitious entrepreneurs dread like the plague, mature.
Speaker 1:Now Chesky was embod emboldened to lay out his vision. Home rentals are simply a service. Why so why stop there? Airbnb could be the platform for booking all sorts of services while other apps cover specific sectors, food delivery, home maintenance, car rides. Chesky figured that Airbnb's experience in attractively displaying homes, vetting hosts, and responding to crises could make it more trustworthy than competitors and therefore the go to option for virtually anything.
Speaker 1:A frantic typing spree at the dining table, dining room table, on the couch, the bed, and at times his office, Chesky specked out what how he would redesign the Airbnb app. Its users now at 2,000,000,000. Wow. That's a lot of users. I had no idea.
Speaker 1:Would open up the app not only at vacation time, but whenever they needed to find a portrait photographer, a personal trainer, or someone to cook their meals. Chesky reasoned that Airbnb would need to significantly strengthen its identity verification. He he even thought he could get people to use the app as a credential, something he's as respected as a government issued ID if he could transform Airbnb into a storefront for real world services.
Speaker 2:It's amazing because I feel like seed stage founders go through this type of brainstorm Oh, yeah. In a very equally frantic way. Yep. But usually they don't have an $85,000,000,000 company yet. Usually it's more like they're thinking through their, you know, fundraising pitch deck and they're like, oh, we could do this, we could do that, we could do this.
Speaker 2:Yep. He actually now has earned the right to think at this scale. Yep. Right? Being already, you know, 2,000,000,000 users.
Speaker 1:Yep.
Speaker 2:You know, global company. I think he's in a great position to, think a lot bigger.
Speaker 1:Yeah. So let's, go over to the Ben Thompson analysis and see what he has to say and his analysis because, there's some goods there's some good stuff. There's some green shoots, but there's some, obviously, some economic, issues that Brian will have to work through if he really wants to pull this off. So Ben Thompson is reviewing the overview of what Chesky is pitching and says. It's a beautiful vision that unsurprisingly is a lot like Airbnb itself.
Speaker 1:The problem is that I'm not sure that it's a compliment. While Chesky romanticizes Airbnb's founding story and the idea of making friends with strangers anywhere in the world, the reality of Airbnb is often much different. Professionalized hosts you never see giving you codes to condos or houses with endless rules and fees all governed by fake courtesy and the fear of a bad review. More broadly, setting up Airbnb as a counter to everything that has allegedly gone wrong with tech is an interesting choice when Airbnb is arguably more emblematic of tech's recent impact than any other company. On one hand, Airbnb has created new markets, that didn't exist previously, transforming real estate from static assets to much more dynamic ones and providing a dizzying array of new choices to travelers.
Speaker 1:On the other hand, the cost of the former has been the transformation of residential neighborhoods into awkward hotel districts, and the latter has entangled has entailed creating a massive market and making everything into a transaction. Those marketplace dynamics govern everything. Airbnb hosts have a fixed asset that needs to maximize utilization to earn money. That means that they are beholden to a service that brings huge amounts of demand consistently, minimizing the number of vacant nights. Travelers for their part want something other than a hotel for whatever reason, families with kids, for example, but still want a mechanism to establish trust.
Speaker 1:Airbnb succeeds by bringing these parties together at scale. Or to put it another way, the route to connecting real people with real assets necessarily first entails atomizing both sides of the market such that only Airbnb can bring them together. Sure. Real people in real houses is different than looking at a screen, but it's arguably less enduring and meaningful precisely because of how impersonal the and fleeting the transaction is. And so the dynamics of Airbnb, this is kind of the key question is can Airbnb move into other services?
Speaker 1:And there's a big question about disintermediation here. And so the the interesting thing here yeah. Jordy?
Speaker 2:The disintermediation issue, I don't think is that significant.
Speaker 1:Really?
Speaker 2:And the reason the reason for this is that experiences, at least in a travel setting Mhmm. Are the kind of things, how many times a year are you gonna get, you know, go rafting in Mexico? Right? You're gonna go once, you're gonna go once, call it every few years when you go to vacation in Mexico. Right?
Speaker 2:You're not like building some intense relationship with the service providers so that you're gonna say at some point, hey, I know we're both paying a bunch of fees. Why don't we go around? The difference is one of the services that they're offering through the new app is massages, right?
Speaker 1:Personal training. Training. These
Speaker 2:are these are things where you see this person on a frequent basis, you develop a, you know, some type of friendship and ultimately there's gonna be a conversation at some point where the service provider says Why pay 15%. Yeah. And that's why a lot of the marketplaces that have operated in these spaces like dog walking Yep. Are much more, much closer to lead generation in that the company, you know, the platform over time really struggles to retain its top customers and top talent or top providers.
Speaker 1:Yep. I mean, I think the good take is this idea of, like, Airbnb one point o was let's disaggregate Craigslist into a bunch of different software companies. But now Airbnb is saying, like, let's reaggregate it. And there are a lot and there are a lot of long tail services that are just one off things. Like, you only get your house painted every once in a while.
Speaker 1:You only need, you know, a specific type of gardener to go look for a specific plant every once in a while. They there's specific thing tree trimming might not be something where you have someone on a monthly retainer and you can have that relationship. But for something like dog walking, it's gonna be every day or every week. Pretty quickly, there's gonna be there's gonna be risk there. And so Ben Thompson continues saying, consider experiences, which Airbnb already tried to get off the ground eight years ago.
Speaker 1:I didn't realize it was so long ago, but it made sense as, a compliment. You're, you know, on a trip with a bunch of friends and you wanna add river rafting in Mexico, which I think was what your example was, which I don't even know if there's that much river rafting in Mexico.
Speaker 2:I'm sure there is, John.
Speaker 1:Somewhere. You wanna bet? Yeah. If I'm
Speaker 2:right, you have to
Speaker 1:Oh, yeah. Okay. Okay.
Speaker 2:Mexico tonight.
Speaker 1:Yeah. Tonight. In the presentation, Chesky derides traditional tourist traps like sightseeing buses or famous landmarks and promises that bespoke tours or classes from locals will be much more meaningful. The problem is that bespoke means marginal costs, which are only manageable with very high prices. Very high prices, however, much mean much lower demand.
Speaker 1:Thus, what you what you actually get end up getting are cookie cutter experiences that can be delivered with relatively low marginal costs, which are exactly the experiences Chesky derides. Notice that this that this is in fact exactly what happened with the traditional Airbnb rental. While there are incredible houses that you can rent for very high prices, the bog standard Airbnb experience is depersonalized and automated to the greatest extent possible. At the same time, it is precisely because real estate is a fixed cost that hosts are motivated to make it all work. Experience providers, on the other hand, don't have either don't have fixed costs and thus lack the necessity the necessary motivation to make scaled experiences work.
Speaker 1:The other Or they do have things cost that sightseeing costs
Speaker 2:I think it's interesting to note, you know, the reason that Airbnb or one reason it's been so successful is you can have a bunch of random strangers staying in a property that you own Yep. All year long Yep. And the property will generally still appreciate. Right?
Speaker 1:Yep. There's gonna
Speaker 2:be wear and tear on the house. Yep. The reason that Turo and other platforms haven't had the same Mhmm. Potential scale, right? They're big companies, is because you're taking an asset as if you're on the asset side.
Speaker 2:Yeah. And that's a depreciating asset. Yep. You're letting a hundred strangers drive your car Yeah. For a year.
Speaker 2:That that that asset is gonna drop tremendously in value. And so can you kind of recapture that Yeah. Through revenue? Yep. Yes.
Speaker 2:But, you know, it it it oftentimes isn't as good of a trade as just having somebody stay in an old home or vacation home that you're only using a few times a year.
Speaker 1:Yeah. I think like 90% of the tour economy is built on podcasters filming stunt vibe reels Yeah. Marketing stunts basically.
Speaker 2:That that's
Speaker 1:And fake Instagram courses. Yeah.
Speaker 2:The gurus. The gurus.
Speaker 1:The gurus market is massive.
Speaker 2:The guru I wonder what percentage I
Speaker 1:think Guro's doing pretty well. And I think the Yeah. The tour experience for me, I I I flew to New Mexico for a birthday party and and, you know, there was an f one fifty waiting for me at in the parking lot. It was great. It was much easier than going to the rental car counter and
Speaker 2:getting some,
Speaker 1:you know, some some subcompact or something like that. So let's see. From the wired profile that we were covering earlier, Chesky explains that historically people used Airbnb only once or twice a year, so its design had to be exceptionally simple. Now the company is retooling for more frequent access. Open the app and you see a trio of icons that act as gateways to the expanded functions eventually.
Speaker 1:Chesky says Airbnb will offer hundreds of services perhaps as far ranging as plumbing, cleaning, air repair, guitar lessons, and tutoring then take its 50 per 15% fee. So, I mean, even if that does work out as lead gen, there's probably a business there. The question is just, is that the business that produces an incremental $85,000,000,000 in market cap? Right? Like, could they could they build Double the company.
Speaker 1:Front end to plumbing, cleaning, repair, kind of an Angie's List style business? I don't know what Angie's List trades for. Could they take that market? Maybe. But is that an incremental 5,000,000,000 in market cap?
Speaker 1:10,000,000,000 in market cap?
Speaker 2:Yeah. It's interesting. I mean, Thumbtack is another comp here. Yeah. They'd be entering that space.
Speaker 2:I don't I'm trying to Thumbtack is private. Last round was done at 3,200,000,000.0. Yeah. So it's hard to hard to say.
Speaker 1:Hard to move the needle at an 85,000,000,000 mark Yeah. For Airbnb. The fact that end users only use Airbnb once or twice a year is precisely what makes the entire service work. Again, Airbnb matches up hosts who need their properties occupied as often as possible with travelers who only need a property once or twice a year. Solving that mismatch is the foundation of the entire business, and it's well worth Airbnb's fee.
Speaker 1:The need fundamentally changes when it comes to day to day life in your hometown. Yes. Users need help in finding service providers, and, yes, service providers need help in finding customers. But the goal for both, however, is to establish long term relationships. Once you have a hairdresser, you want to visit the same hairdresser repeatedly, not find a new one every time, and by extension, neither you nor the hairdresser has any interest in has any interest in, in including Airbnb in every transaction forevermore.
Speaker 1:In other words, what Airbnb is proposing may end up being valuable, but it will be very hard for Airbnb to capture that value in a meaningful way. So, yeah, maybe there's a lead gen component, and then it does drop to more of a payment processor. Because that 5% transaction fee, you might stay on the Airbnb platform because of the reputation and and and building up your profile there. But you're probably gonna be closer to credit card processing fees than the current Airbnb fee. Again, contrast Yeah.
Speaker 2:And the the challenge here is there are so many vertical SaaS or or SaaS plus marketplace businesses Mhmm. For all of these subcategories. Yeah. Yeah. Right?
Speaker 2:So Airbnb is competing with companies that are heavily funded Mhmm. That can afford to build really specialized tools for the service providers. Yep. Right? So there's vertical SaaS if you're running a barbershop.
Speaker 2:Yep. And like I think that there's a billion dollar company in that space.
Speaker 6:Yeah. Yeah.
Speaker 2:Right? I don't know if if that market could support a $10,000,000,000 company, but it can support a billion dollar company that Yeah. That barbers really love
Speaker 1:Yep.
Speaker 2:And want to be on. Right?
Speaker 1:Yep.
Speaker 2:So again Interesting.
Speaker 1:Well, Ben Thompson goes over to Paul Graham talking about founder mode. The theme of Brian's talk was that the conventional wisdom about how to run larger companies is mistaken. As Airbnb grew, well meaning people advised him that that he had to run the company in a certain way for it to scale. Their advice could optimistically be summarized as hire good people and give them room to do their jobs. He followed this advice and the results were disastrous.
Speaker 1:So he decide so he had to figure out a better way on his own, which he did by studying how Steve Jobs ran Apple. You identified that correctly. So far, it seems to be working. Airbnb's free cash flow margin is now among the best in Silicon Valley. And so, Ben Thompson says, I think there is a lot of truth to the idea that the most innovative companies are best understood as mechanisms to manifest a founder's vision and that founders can air by giving up too much control and not getting deep into every aspect of the company.
Speaker 1:You certainly get a sense for Chesky's desire to control every aspect of the product, both in his presentation in that Wired profile and in another profile in The Wall Street Journal where Chesky explicitly invokes Jobs.
Speaker 2:Yeah. So he says, when I asked him for names that personify founder mode, the first he mentioned were Steve Jobs and Walt Disney. I don't want to ever put myself on the same level, he said. I'm more like a disciple. I'm more like a painter who studies Michelangelo.
Speaker 2:I'm not ever saying I'm gonna be Michelangelo, but I believe in that school of thought. Yeah. Smart. It's great. He goes on to say that he admires jobs in Disney as creatives who sat at the intersection of art and technology.
Speaker 2:No way. That's the meme. That's the meme.
Speaker 1:It's a huge meme.
Speaker 2:That's the meme. I've listened So creative cycle. We in many ways create this show at the intersection of art and technology. Yes. And that he doesn't identify as an entrepreneur or a business person.
Speaker 2:I think of myself as a designer. He says, I'm a designer who has been afforded one of the biggest canvases in the world.
Speaker 1:Yeah. To that line. Chesky spent a lot of time focused on app details like the icons and the animation and everything looks great. The problem, however, is that Jobs was creating products and Disney was creating experiences. In both cases, the attention to detail was critical to how many people wanted to buy iPhones or visit Disney World.
Speaker 1:Chesky, on the other hand, has created a marketplace, and the success or failure of marketplaces is not governed by the details of icons or the layouts of apps, but rather by how much blunt how much more blunt instruments like incentive structures and take rates. Yeah. It's very, very interesting. There was one criticism of the
Speaker 2:Spicy from Ben. A little spice.
Speaker 1:A little spice. Yeah.
Speaker 2:Yeah.
Speaker 1:Yeah. Yeah. There was some I I saw some, like, kind of negative feedback on X to the Airbnb launch. They were quote tweeting the video, they were saying that, like, they should have used more b roll and made this more human. Instead, they're showing us a lot of UI.
Speaker 1:And I just think about the Airbnb UI as being, like, fees and charts and
Speaker 2:Yeah. The beauty of Airbnb is that in a simple way, can get access to incredible spaces and experiences.
Speaker 1:Right? And that's what's And you don't
Speaker 2:want be thinking. Every time I'm in the Airbnb app.
Speaker 1:It's money. It's cost. It's headache. I'm there because there's a problem. Right?
Speaker 1:And so that they actually need to minimize that
Speaker 2:focus on the actual experience. This doesn't look anything like what the pictures. The pictures you had.
Speaker 1:Yeah.
Speaker 2:Which has created, obviously, an opportunity for Wander.
Speaker 1:So, sponsor of the show, by the way. So Ben closes out by saying there there these are the dynamics that undergird my skepticism of Airbnb's new offerings. The impression I get from the presentation and profiles is that Chesky seems to think that the first version of experiences failed because the app wasn't good enough. I think it failed because the economics don't work. There was, of course, similar skepticism about Airbnb's core offering from the beginning.
Speaker 1:It's one thing to look backwards and describe the arbitrage opportunity that was available in short term rentals and another to have understood that opportunity when Chesky rented out that first airbed in 02/2007. What a fantastic story. Moreover, one way to think about the impact of AI is that it will create the conditions for massive market expansion in real world experiences and services that can be done by that can't be done by computers. It's plausible that Airbnb can leverage its huge user base, is massive, 2,000,000,000, remember, into riding a wave that may now be forming. So that's kind of the bull case that he's laying out there.
Speaker 2:Everybody becomes post economic after ASI. But you want And everybody just does Airbnb experience
Speaker 1:You still need a hairdresser. A personal trainer maybe.
Speaker 2:Just think I think that's Hang out with. Know, I think in many ways Airbnb is safe from some amount of disruption to the core business which is a hyper scaled, you know, vacation rental platform. But at the same time, you know, it's hard to under see where, you know, at once they're at 2,000,000,000 users Mhmm. Right? Where's the growth gonna come from?
Speaker 1:That's tough.
Speaker 2:Especially when you have, you know, new providers like Wander which are coming in and potentially, you know, we're seeing this already just eating away at some of the highest value users.
Speaker 1:Yeah. And also, I mean, just for a comp, Hilton Hotels is a $60,000,000,000 company. So it's like even if they were
Speaker 2:to go Marriott is like 77,000,000,000.
Speaker 1:Okay. Yeah. Marriott. Yeah. Even yeah.
Speaker 1:75 today, 74 today. So even if they were to go build like a whole hotel chain and enter that market, like, again, that's still not a 10 x. That's still not putting them in like the trillion dollar conversation of like hyper scale, which is like probably where you wanna go.
Speaker 2:He wants to be in that conversation.
Speaker 1:I think so. That that that separates the Michelangelo's from the from merely the disciples. But, I mean, it's been been a fantastic run. It's a fantastic run.
Speaker 2:Yeah. Is is is an interesting Do you wanna own Marriott at 77,000,000,000 with a For Airbnb? CEO who I can't Yep. Name I agree.
Speaker 1:Founder of
Speaker 2:versus Airbnb Yep. At just slightly above He's gonna
Speaker 1:try something. He's gonna try a couple things, you know? He's gonna be doing a different release in a year, and maybe there's an entirely new idea.
Speaker 2:Think if he did the Chesky method, a bodybuilding course, he could probably add a hundred million to the to the bottom line 100%. Just pure, you know, even better margins than than software.
Speaker 1:He's still looking extremely strong. Yeah. He you know, there's, like, those old photos of him as a bodybuilder, but he's still looking jacked. Yeah. It's great.
Speaker 2:Still got it. Anyway Still got it.
Speaker 1:At the same time so Ben Thompson closes with, at the same time, I can't help but wonder if many of the French frustrations that Chuck that Chesky chalked up to management mode manager mode are in fact for him personally downstream from building a service where one can only guide the outcomes you want, not dictate them. The fact that the romantic story he tells about what Airbnb symbolizes doesn't seem to match up with the reality of what Airbnb is may itself be an analogy for Chesky's desire for control in arenas where he has very little. Interesting. So, yeah, I mean, you're building a marketplace. There's only so much control you have as opposed to building a product where you can say, I'm going to go build a virtual reality headset now or an Apple Watch, and it's gonna look like this.
Speaker 1:And I'm going to, you know, mold the the screen and make all these products
Speaker 2:If you really just wanted to do product design, what's the the classic, you know, founder has an exit and then builds an app that allows you to meet friends in your area? Yeah. And they're like, I just wanna build an app to meet friends. And then you're just like, no, you're you're building a dating app. Yeah.
Speaker 2:Yeah. Like that's who's gonna use this.
Speaker 1:Yeah. Yeah. Understanding like the base reality of human interaction.
Speaker 2:I have like multiple forces. Multiple buddies who had great exits and then built like that app and then eventually realized what they were building and Yeah. And had to It's the
Speaker 1:same thing with the personal CRM. I want a personal CRM. It's like, no. You just want a CRM. Like, if you're thinking about your personal relationships in that transactional of a way, you should just think of it as business associates that you're pitching and just use an actual Salesforce.
Speaker 1:Yeah. Just use a real CRM. Yep. Anyway, some news in the chip world. The US has scrapped the AI diffusion rule in a revamp of Biden era chip curbs.
Speaker 1:This was tearing up the Internet. We were trying to get Dylan Patel on a little bit earlier. He's booked in a week or two. He's traveling a lot. We'll get him on to break it down.
Speaker 1:There's a few other people. Jordan Schneider over at Chinatalk is on vacation. It's a disaster. So there aren't as many people to comment on this as I was hoping, but, fortunately, The Wall Street Journal has a write up. And so Microsoft and Oracle have spoken out against the rule that, again, the, the the AI diffusion rule.
Speaker 1:The US Department of Commerce said that it's rescinding the diffusion rule on the grounds that it would have stifled American innovation, saddled companies with onerous regulations, and undermined diplomatic relations with a dozen countries, dozens of countries. NVIDIA said that it welcomed the Trump administration's leadership and new direction in AI policy. With the diffusion rule revoked, America will have a once in a generation opportunity to lead the next industrial revolution and create high paying US jobs, build new US supplied infrastructure, and alleviate the trade deficit, a company spokesperson told the told the Wall Street Journal.
Speaker 2:Tech companies, including Microsoft and Oracle, had spoken out against the rule, which imposed caps on how many chips countries such as India and Switzerland can buy, saying the move would limit US firms opportunities abroad without doing much to hamper China, the main target of the tightened controls. It was a little wild that we were limiting places like India Totally. Switzerland, which we have strong relationships
Speaker 1:all started with, like, the Singapore loophole and the the chips going to Malaysia. And it really seems like, you know, this is, the the sledgehammer versus the scalpel. Right? Everyone's okay with the scalpel. People don't like sledgehammers.
Speaker 2:Yep. So Jeffrey Kessler, who's The US Secretary undersecretary of commerce for industry and security says the Trump administration will pursue a bold, inclusive strategy to American AI technology with trusted foreign countries around the world while keeping the technology out of the hands of our adversaries. So anyways. I mean, is what we were talking about. We got to pull this video up.
Speaker 2:Oh, yeah. Made I
Speaker 1:mean, we're talking about this with Aaron Ginn about how it's it's nice to think that, oh, if we don't sell NVIDIA chips to what was the company that you or what was the country that you? India or Switzerland? Like, oh, yeah. Like, America will just have control, and they'll have to use OpenAI and ChatGPT remotely via API. And it's like, no.
Speaker 1:Actually, they will just buy Huawei Ascend chips and run DeepSeek and Manus on top of it. Like, they're, like, they they're going to want to run their own hardware. They want their AI super factory have
Speaker 2:this name Manus? Manus is a wild It makes you sound like like you're from Manus. Manus. Manus. Manus.
Speaker 1:Anyway, let's pull up
Speaker 2:the video if
Speaker 1:we have
Speaker 2:a second. Run Manus on our on TV. To Manus in these parts. Take kindly to Manus.
Speaker 1:We only like, llama.
Speaker 2:So so Yeah. What's going on? Jensen has been in The UAE. I think Abu Dhabi. Yep.
Speaker 2:And they built what looks to be wow. Oh,
Speaker 1:it's elevating? This is awesome.
Speaker 2:That's not a hologram, is it?
Speaker 1:This looks like a hologram. Either way, it's awesome. What
Speaker 2:a squad too.
Speaker 1:Insane showmanship.
Speaker 2:Wow. Anyway Another hundred billion to Jensen. He is we gotta pull this up. I'll
Speaker 1:Yeah. He's been on absolute tear. So, the announcement also took aim at Chinese tech giant Huawei stating that using Huawei Ascend chips anywhere in the world violates US export controls, of course, because Huawei Ascend chips are potentially built on top of, American owned IP in the lithography stack and therefore, can be subject to US export controls. The Bureau of Industry and Security, a commerce department agency, said it will warn the public about potential consequences of allowing American chips to be used for Chinese AI models. Rick Su noted that the Chinese company's advanced AI chips are only sold locally and that demand for them far outweighs supply.
Speaker 1:So Huawei should be able to continue doing business there with or without any changes in the export controls. Of course, China has immense demand for, large GPU clusters. They wanna train the next version of DeepSeek. They think that DeepSeek is probably gonna move entirely to the next training run to Huawei Ascend chips. And although the Huawei Ascend, rack mounted unit is not directly competitive with I mean, it is directly competitive, but it's not it's not at power dollar parity with NVIDIA Yeah.
Speaker 1:Yeah. On efficiency. It it it can train the models. It's just more expensive, but China has a lot of cheap power and is willing to invest. And so, yeah, it might cost 30% more to train a massive model, but we're not talking about orders of magnitude and everything in AI is defined by orders of magnitude.
Speaker 1:Yep. Anyway, do you have another video?
Speaker 2:Yeah. Have another screenshot to pull up which is just a funny chart to look at because you can see the exact moment that Jensen really started cooking.
Speaker 1:Yeah. Oh, there we go. So this is the largest company
Speaker 2:May which we've been tracking. Oh, neck and neck. And Yeah. Microsoft was at some it's hard for me to see but I think about 80%. Yep.
Speaker 3:This is just
Speaker 1:for the May.
Speaker 2:So Yeah.
Speaker 1:We're halfway through May. Everyone's
Speaker 2:So last Monday Yeah. Microsoft was sitting at over 80%. Yep. And then Jensen said, one second. So right now
Speaker 1:Jevons paradox undefeated. There will never be enough venture capital Yeah.
Speaker 2:You said they're gonna study You're they're put Jevan's paradox into preschool curriculum After this. Really getting people to understand.
Speaker 1:So bearish on Nvidia.
Speaker 2:It's like Look at
Speaker 5:what happened.
Speaker 2:The more dinosaur toys you get, as dinosaur get toys get cheaper You want more. You're gonna And you're gonna buy more.
Speaker 1:That's true. Which is violates traditional laws of supply and demand.
Speaker 2:But Yeah. So right now, Nvidia is sitting at $3,300,000,000,000 market cap. Tiger actually just rotated out of ARM. Oh, really? And well, they they yeah.
Speaker 2:They rotated out completely Okay. And increased their position in NVIDIA. Let's go. When tigers long sometimes sometimes they get it buried right.
Speaker 1:A soundboard cue for tiger. There we go. There we go. Fantastic. The change is a big win for countries previously limited from buying chips, notably Saudi Arabia, United States United Arab Emirates, Singapore, Israel, Morningstar said the it is also set to benefit US AI players like NVIDIA, AMD, and Intel, of course, because they'll be able to sell to more countries, and we're already seeing that happen.
Speaker 1:For China chipmakers and AI companies, the changes are likely to have only a limited impact since they are already banned from accessing from accessing US tech and equipment. The news comes as president Trump's Trump tours The Middle East and a number of US tech companies announced AI deals in
Speaker 2:the region. Only Intel could be down 30% in the last year during an AI super cycle.
Speaker 1:So brutal. It's so brutal.
Speaker 2:Bet on the CPU folks instead of the GPU. Pick the wrong horse.
Speaker 1:Generational miss. Wrong horse. Is quoted
Speaker 2:in race. The wrong horse. Right race.
Speaker 1:Wrong horse. David Sachs says, the diffusion rule literally restricted the diffusion and or proliferation of American technology all over the world. David Sachs, Trump's AI and crypto czar said at the US Saudi investment forum, adding that there is no risk with a friend like Saudi Arabia. They're just friends. The original reason for this diffusion rule is that we have a policy of not wanting our advanced semiconductors to go to what are known as countries of concern, but that's not big of as big of a problem now, especially when it's a global competition.
Speaker 1:Anyway, we should move on to Apple. They're getting in the Neuralink game. They're competing with Elon, going head to head, literally. Putting brains putting chips in your head.
Speaker 2:So they're working with a startup Syncron on a new brain computer interface I've never heard
Speaker 1:of this company before.
Speaker 2:To assist people with disabilities. And, we'll just start going through here. So Apple is embracing the world of brain computer interfaces, unveiling a new technology that one day could revolutionize how humans interact with their devices. The company is taking early steps to enable people to control their iPhones with neural signals captured by a new generation of brain implants. It can
Speaker 1:make huge for people that use AirPods instead of wired headphones.
Speaker 2:I was joking earlier. There's this company Believe that's going viral on X Oh, I haven't seen this. For for for you you know, Luke Metro was doing this. He he basically tagging the account.
Speaker 1:Oh, this is the crypto thing?
Speaker 2:And it and it all, you know, all he had to do was just make a single post. It created a meme coin.
Speaker 1:Okay. Okay. Yes.
Speaker 2:So he's generating Yeah.
Speaker 1:Walk me through this future. This is really white mirror stuff.
Speaker 2:And and so there's a world in the future where somebody could just think and a meme coin would be generated based on a thought. Yeah. And that would just be very
Speaker 1:Yeah. I mean, a lot
Speaker 5:of the a lot of
Speaker 1:the gambling apps are using haptic feedback to vibrate the phone when you win. Turn the flashlight on and off, really flash colors and sound all over to stimulate you while you're gambling. Imagine if they could stimulate your neurons directly. Yep. Retention would go through the roof.
Speaker 2:I want haptics in my brain.
Speaker 1:Haptics in your brain just massaging your neurons is releasing dopamine directly. As soon as you open the mobile game app, the pick three. Yeah. The match three. Isn't that what
Speaker 2:they call it? So. Match three. Brutal. So dark.
Speaker 1:I mean, bulk the the bulk case here is of course that like Neuralink right now is an incredible technology for people who are paraplegic. Right? Totally. So the the
Speaker 2:early adopter And I think smart for these companies to focus on that. Totally.
Speaker 1:Because that's just such a more optimistic scenario.
Speaker 2:And
Speaker 1:and then and then, you know, over time, allow people to bring things in. I mean, they're talking about curing blindness, curing deafness. There's so many amazing amazing potential uses of this technology. Like any technology can go good or bad. It's up to us how we use it.
Speaker 2:So Yes. So the interesting thing here is that Apple seems to be letting other companies do the hardcore r and d and go through the FDA process to actually get approval for these devices.
Speaker 1:But they've been doing that more because AirPods are now approved as a hearing aid because they have the the same technology that enables noise canceling, which is basically there's an there's a microphone that's pointed outwards, and then they play the opposite of that sound inwards. Are you familiar with how noise canceling works? So it like, so you're you're hearing both the outside world and then the opposite of the outside world, and so that creates the noise cancellation. That can also be used to amplify the outside world, and that's what happens when you have transparency mode on. But if you take transparency mode, which which records the outside of the world and then plays it back over the speaker, If you take that to its kind of logical extreme, all of a sudden you have something that can amplify something that like, the just anything you're hearing to the point of actually helping someone who is, who's hard of hearing, which is very, very cool.
Speaker 1:So historically, humans have interacted with their computers mechanically using mice and keyboards. Smartphones introduce touch
Speaker 2:for the humans.
Speaker 1:The cube oh, I was gonna give it up for the keyboards and mice.
Speaker 2:And the keyboards too. And don't get enough credit.
Speaker 1:Peripherals are underrated for sure. Smartphones introduce touch, a behavioral input, but still an observable physical movement. A new capability means Apple devices won't need to see the user make specific movements. The devices can detect user intentions from decoded brain signals. Apple has worked on the new standard with Synchron, which makes a stent like device that is implanted in a vein atop the brain's motor cortex.
Speaker 1:So I think this is less invasive than what Neuralink does. Neuralink, they actually have to drill a hole in your skull roughly the size of a quarter, and then the and then the device fills in that hole
Speaker 2:Just a quarter.
Speaker 1:Fills in that hole that's left from the skull that's gone. And so and then the electrodes are placed inside the brain, and then they place the the skin flap back over, and it charges wirelessly, which is a pretty crazy implementation. They needed to invent a robot just to do the surgery because it's so precise and no human hand can place the electrodes or the the the the the neurons appropriately. But this, I think, would be less invasive because it just goes into a vein, and so it's, as easy as taking some blood, basically.
Speaker 2:Yep. And, the tinfoil hat enjoyers will appreciate that Synchron Mhmm. DARPA was in the series a. So That's gonna go over great on axe. Yeah.
Speaker 2:I'm sure They're gonna
Speaker 4:love that.
Speaker 2:Be all over this. Yes. Not the founder
Speaker 1:of Hollow. The founder of Hollow.
Speaker 2:He's also named Alex.
Speaker 1:Yes. The founder of InfoWars.
Speaker 2:Yeah. Alex. He's gonna love that DARPA is funding, you know, brain computer interfaces in partnership with Apple. He's gonna be from the line.
Speaker 1:From the line. Yep. Famously loves technology, that guy. Yeah. Anyway, we have Deleon Asper Hub from Founders Fund and Varda coming in the studio next.
Speaker 1:Varda just released their third or they just brought back the third capsule.
Speaker 2:Three for three.
Speaker 1:Celebrate that. Three for three. They said on x, is this boring yet? Are you getting sick of us? Until Delian comes in, we'll do some ad reads.
Speaker 1:We'll talk about public investing for those who take it seriously. They got multi asset investing, industry leading year yields. They're trusted by millions, folks.
Speaker 2:Get on their new feature generated assets is just wild. Very cool. You gotta go around and play around with it. It's justgeneratedassets.com.
Speaker 1:Oh, cool.
Speaker 2:It's separate domain. We are gonna take 10 different basically, can create indexes with chat. Yep. And then you can back test them so you can see how they performed against the market more broadly. So tomorrow, I'm gonna get like 10 or so different screenshots of of different indexes that are interesting.
Speaker 2:But it's interesting you can look at, for example, since we had Andreessen on yesterday, can see, you can look at a 16 z alumni companies, how they've performed in the public markets. And the results are astonishing. It actually makes me even more, bullish on these sort of founder led public companies. So excited to get into that.
Speaker 1:Well, as we wait for Delian, let's talk about Linear. Linear is a purpose built tool for planning and building products, Meet the system for modern software development, streamline issues, projects, and product road maps for the Linear.
Speaker 2:And when they say the standard, they're not joking. It actually, I think I don't know how much these figures are public, but if if there's a tech company that you love in the private markets or in the public markets, they're probably already using linear. So go check them out.
Speaker 1:Okay. I'm texting Deleon and we got him in the studio. Welcome to the show. How you doing, Deleon?
Speaker 3:I'm sorry. I promise. I'll normally get a ride on the dock this time.
Speaker 1:You're all good.
Speaker 6:Woah. What's
Speaker 2:up? 33. 3 3.
Speaker 1:Announcing it here exclusively on TBPN. Tell us what happened with the capsule. No one knows, so you're hearing it here first.
Speaker 3:At 06:13PM, PST on a Wednesday, you know, early evening, we executed a deorbit burn, which, you know, happened sort of on the opposite side roughly of the globe from Australia. And we came in ripping through the atmosphere, 17,000 miles an hour. Capsule has, you know, GPS all throughout, so we're tracking it. I actually got a good photo of me, my, you know, cofounder and our CTO and me holding a little baby watching that GPS track, you know, sort of coming in. It's sometimes a little anticlimactic because, you know, unlike a rocket launch where you can kinda do the livestream, you watch it from the ground, move up, and reentry capsule is, like, moving very, very fast, kind of hard to track, kind of hard to do a live stream.
Speaker 3:And literally the way that we call things out is just like it's got this GPS thing and we know that the parachutes have opened successfully. Only what we just see that the GPS like vertical
Speaker 2:You need to create some type of way for Americans to bet on reentry.
Speaker 1:Oh, yeah. Is that
Speaker 2:is just un American. I mean, I know you're bringing it down in Australia, it's frankly un American that you're not letting us all, you know, place our place our bets. But
Speaker 3:Congratulations. Was pushing me on, you know, you should figure out how to make more gambling in aerospace. And I like, look, man. The easiest way is just, like, gamble on, you know, sort of mission outcomes. And so this is how we know we're not at peak gambling yet is there's not enough gambling on all these hyper specific technical outcomes.
Speaker 3:People will gamble on, like, you know, will Starship land? But I want it, like, down to, like, the individual, you know, sort of, like, you know, meter of just, like, is it gonna take five seconds to land, six seconds to land? Like, is it gonna come into this trajectory?
Speaker 1:Well We don't know how to work. Yeah. Well, speaking of betting and and, instead of p doom, what's your p dome? I want your take on the golden dome. What's the probability that we, America, gets a golden dome in the next few years?
Speaker 1:And we do have missile defense. Right? Like, missile defense is a thing. We're not domeless right now. With but, like, we're talking about just improving what we have.
Speaker 1:Right? We're not flying blind here, hopefully.
Speaker 3:Yeah. Let me give the, you know, sort of bull versus bear case.
Speaker 2:Sure. Know,
Speaker 3:all this stuff is, you know, sort of somewhat predicated on, obviously, what Israel has been able to show and especially over the past, you know, sort of, you know, couple years, you know, especially countering some of the Iranian attacks that have happened. If you were to, like, take the Israeli system and then extrapolate it to, like, the scale of The United States, it just doesn't really work. Right? They're a really small geography, very dense. You know, it is actually possible to set up basically, like, you know, missile defense batteries across their entire border.
Speaker 3:Yeah. If you were to do that across, like, the entire United States, you know, sort of border around the Continental US and you extrapolate the cost of it, it's something on the order of, like, a $10,000,000,000,000 program. Wow.
Speaker 1:And we're not fighting with Canada or Mexico or, like, even, like, even smaller, like, states. Like, these are low flying projectiles. They're just wildly different. Right?
Speaker 3:Yeah. The threat vectors are also, yeah, totally different. You're looking at, like, yeah, Russia, North Korea, Iran, etcetera. And so that solution set, you know, sort of looks very different. And so that's, you know, the premise of Golden Dome.
Speaker 3:And it's the first time that they've opened the Overton window on considering things that aren't just, like, ground air or sea based for the first time in the Golden Dome language. They talk about a lot of, you know, sort of space based applications, in particular space based intercept. So the idea there is, like, if Russia or North Korea basically launches a missile towards The United States. Mhmm. Right now, we do have like you said, we're not domeless.
Speaker 3:We do have some systems. They're basically scattered from, like, you know, Guam to Hawaii to Alaska, etcetera. Basically, like, all of our furthest out areas and for sure along the, you know, sort of border as well, but furthest out areas that are closer to those adversaries to
Speaker 2:take them out.
Speaker 3:Mhmm. You know, before they get anywhere close to United States. The idea is now you can just have a constellation of satellites that are orbiting above North Korea, Russia, etcetera, regularly. So you can take this stuff out before it even gets up into, like, the upper end of its, you know, sort of trajectory. Now that type of system is also not trivially, you know, sort of cheap.
Speaker 3:So here's, you know, my bowl versus barricades. We're asking, is it, you know, sort of going to happen? We proposed a system like this in the early nineteen eighties. Right? And
Speaker 1:Star Wars.
Speaker 3:Right? Star Wars days. The space development initiative, I think it was called, or space defense initiative.
Speaker 1:The SDI.
Speaker 3:They ran some early trade studies and had a lot of enthusiasm in congress, etcetera. And then, ultimately, it fell apart partially because the, like, scale of the economics of it relative to, like, the, you know, sort of benefits, the defense, you know, sort of of the nation just didn't really, you know, entirely pencil out. And so the sort of bare case for, you know, sort of golden dome would be maybe we end up in that same world where we, like, start to run these analyses, we do these things, and then all we do is really just, like, buy a couple of traditional terrestrial, basically, missile, you know, defense battery systems that already exist, and we make those sensors a little better. Like, the current, you know, one is this thing called, you know, sort of THAAD is basically, like, the largest, you know, sort of system. It actually doesn't have a particularly high hit rate of being able to take out the missiles on the way in.
Speaker 3:And so, you know, you right now, think we have, like, 40 THAAD missiles, and I think they have, like, something like a 25%, you know, sort of hit rate. So it's like we can take out, like, 10 ICBMs. Russia has, like, a thousand. And so, you know, we're, like, a little off on order of magnitude. So we would, like, make that one a little more accurate, etcetera.
Speaker 3:So that's sort of, like, I would say, the, like maybe not default case, but that is, like, the downside case of, like, you know, we announced this stuff. We talk about it. When it comes down to, like, the economics in actually implementing this, it becomes too tricky. Congress flips from, you know, sort of Republican to Democrat, you know, in the next election cycle. They don't wanna give, you know, sort of president Trump a win, and so they decide to shut it down.
Speaker 3:Mhmm. The bull case is, okay. Well, relative to the nineteen eighties, there's a lot of people that can actually do pretty near term demonstrations of this. Right? You know, obviously, over rockets this year are launching and landing every single day.
Speaker 3:There's a lot of companies that, you know, are looking to pitch in on this that aren't just people that are going to throw out white papers, but are actually, like, very hardware rich. Right? You know, there may be a lot of over enthusiasm in the defense tech, you know, funding space and ecosystem. But, like, look, you know, we were talking about this earlier this week, like, look at what Venus Aerospace, you know, sort of just demonstrated. Right?
Speaker 3:Like, while there is maybe over enthusiasm and, you know, lots of funding, at least people are translating into, like, real hardware demonstrations of, like, next generation technologies. And so if there's a set of companies that before congress flips is actually able to go and do some real world demonstrations, show that this is a practical capability, get some defense funding, you know, sort of flowing into actually operationalizing those initiatives. That by the time it flips, there's already something that's sort of pseudo operational or very close. Now it becomes a little harder to justify. It's like, yeah, there's some political win if you're a Democrat to not give, you know, sort of Trump a win.
Speaker 3:But, like, you know, the defense budget has always been, you know, sort of very bipartisan as well. So that's my sort of, like, bowl versus, you know, sort of bear. It's like, you know, for the first time in history, we can probably demonstrate this really quickly, and we've a two year window, and it's a, you know, sort of national priority. Bear is it's pretty easy for us to just, you know, sort of flip back to just doing what we, you know, have always done.
Speaker 1:You mentioned Venus Aerospace. They put up a post yesterday. They said, today, Venus Aerospace made history. We completed the first ever US flight of a rotating deck detonation rocket engine proving runway based high speed flight is possible. I don't really understand what a rotating detonation rocket engine is.
Speaker 1:Do you understand the applications of this? Is this defense tech or space tech? Is this commercial? Is this DOD program? Like, what what is the story here with Venus?
Speaker 3:It's been a minute since that, you know, since I met up with the Venus team, but the last time that I chatted with them, the intention of what they were building was to create these, you know, sort of space planes that would basically take off from a runway, get out of the atmosphere, cross across the globe, and go land back on a runway. And so that was sort of a, you know, sort of commercial case. It obviously be, you know, sort of very expensive on a per seat, you sort of basis, but there's obviously, you know, sort of plenty of people in the world that would pay significant in order to be able to, like, you know, get from LA to Tokyo, but do that in, like you know, in theory, you could do that in under an hour, basically. Like, if you think about how quickly it takes you to orbit between those two, it's roughly forty five minutes.
Speaker 1:Yeah. This is like SpaceX point to point.
Speaker 3:Yeah. Exactly. But using, you know, traditional runways rather than having to build out, you know, all the, like, SpaceX basically, like, landing infrastructure. Like, you know, their planes can actually take off and land on, you know, just normal normal runways.
Speaker 1:Yeah.
Speaker 3:And so their engine definitely, you know, you know, demonstration, you know, is a the obviously, the very key first step of being able to and then, you know, apologies at home today. So
Speaker 1:Oh, hey. Hey. Welcome to the stream.
Speaker 2:We should just spend the next few minutes just turn this into a kid show. Yeah. At least at least one of our kids are are probably watching
Speaker 1:at Okay. Let's break it down. Batman or Superman? Dinosaurs. Dinosaurs.
Speaker 1:Dinosaurs. Rex or Velociraptor?
Speaker 2:Fire trucks. Fire trucks.
Speaker 3:Fire trucks. I like it.
Speaker 1:I like it.
Speaker 3:Yeah. About rockets though? Rockets versus space planes.
Speaker 2:Oh. Rockets. I
Speaker 1:mean I I think we ought to go to our child correspondent. Rockets are
Speaker 3:Rockets or space planes. I think enthusiastic about both.
Speaker 2:Oh my gosh. I can't I can't wait to I can't wait till he's cohosting the show with with our children.
Speaker 1:Yeah. We could only get Deli for fifteen minutes today. It'd be so much easier if you could just delegate this whole this whole call in thing to your son. It'd be fantastic. You'd be
Speaker 3:a much more entertaining guest. Okay. I know we didn't quite make it to the top of the hour, but maybe I'll, you know, go go take care of this guy.
Speaker 2:No. This was great. It's great having both of guys on.
Speaker 3:Great delta v today.
Speaker 1:Yeah. We'll talk to
Speaker 2:soon, Talk soon. Have a good one. Have fun, guys. Bye. See, that is pronatalism in action, in reality.
Speaker 2:It's not just threading about it.
Speaker 1:It's great. Well, let's tell you about numeralhq.com. Sales tax on autopilot. Spend less than five minutes per month on sales tax compliance. Go to numeralhq.com.
Speaker 1:My company's on it. Jordy's company's on it. Lots of companies are on it. Benchmark series a.
Speaker 2:Benchmark series a. Thank you to numeral.
Speaker 1:And let's also tell you about Vanta. Automate compliance, manage risk, improve trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation whether you're pursuing your first framework or managing a complex program. Anyway, let's do some timeline, and then we will bring in our next guest. NVIDIA we we talked about Covering
Speaker 2:story there. This next post is great for Bryce.
Speaker 1:Let's do it.
Speaker 2:That SPF built one of the most legendary private investment portfolios of all time tells you more about the business of venture than a thousand podcasts on the subject ever will. Well, what about this podcast, Bryce? Because we're we're saying we're saying what you're saying. He did he did make some good bets. Anthropic.
Speaker 2:Nobody can take that away from Cursor.
Speaker 1:Cursor and Anthropic very very rare.
Speaker 2:Even though David Tisch Yeah. Friend of the show was also in the original cursor round.
Speaker 1:And said that he didn't
Speaker 2:get in that 200 k to $500,000,000, which was the numbers circulating around. He said there's no way that that would math out.
Speaker 1:Can you imagine if SPF has, like, secretly got, like, cofounder shares or something or, like, got, like like an incubation type deal so he did get that massive stake in 200 k.
Speaker 2:Who knows?
Speaker 1:I don't know. But now someone else owns it. Financial investor.
Speaker 2:Yes. Somebody was able to buy out that cursor position and I wouldn't be surprised if we had them on the show at one point. Maybe.
Speaker 1:Guests. They might have been in the audience. They might be listening right now.
Speaker 2:They're probably listening right now.
Speaker 1:From their yacht in the Amalfi Coast.
Speaker 2:Stop that one bet.
Speaker 1:Basically, I mean, it's enough. Right? Crazy. Anyway, we already covered the the the We should cover
Speaker 2:the Brian Yeah. Brian Armstrong. Armstrong news. So Yeah. What happened to basically, cyber criminals bribed and recruited rogue overseas support agents to pull personal data on 1% of Coinbase's MTUs.
Speaker 2:No password, private keys, or funds were exposed. Mhmm. Prime accounts were untouched. And Coinbase has committed to reimbursing users that
Speaker 1:were impacted.
Speaker 2:Basically, you had to be impacted by social engineering attacks.
Speaker 1:So people
Speaker 2:weren't getting support agents to move funds around. Funds weren't stolen like that. But it would be, let's say somebody gets your personal information, you get a random call, and they say, hey
Speaker 1:We were talking about this, how the spam around Coinbase was getting crazy, Right? You'd get spam text saying like, you know, click here to log in or something.
Speaker 2:No. It's truly Yeah. Truly I mean, it's like It felt like it hundred acts like two months ago or something like that.
Speaker 1:Great business for these scammers. Right? Like the scammers are it's just whatever money they make is pure profit.
Speaker 2:Yeah. I wonder how much of those phone social engineering phone calls now are happening with AI. I don't It has to be a good percentage because
Speaker 1:the spam calls I would get when I pick up were ridiculous. Just recordings with, like, music on them and it just didn't sound it didn't sound anything like an actual Yeah. Call that you'd get ever.
Speaker 2:Yeah. And the and the concern here is that this data is floating around now. Yeah. And people can find out where big crypto holders live Mhmm. And find out what they look like.
Speaker 2:There's ID information Yeah. You know, as part of this. And so it's a huge risk if if somebody was on Coinbase Yeah. And they had, you know, 10 Bitcoin. Somebody could go to their house and say, I would like those 10 Bitcoin.
Speaker 1:Yep. Transfer them to me. Very risky.
Speaker 2:So it's super unfortunate, but response is did the response
Speaker 1:responded very well like with the direct The response. Camera.
Speaker 2:Yeah. The response is very interesting. They asked for a $20,000,000 bounty. He's saying, we're not paying you the bounty, but we will give we're willing to pay $20,000,000 to anybody who gives us information leading to the arrest. And so what's Is a
Speaker 1:lot of ransom? Yeah. Oh, yeah. You haven't seen it.
Speaker 2:And so so, it sounds like a movie plot, but but what happens here is that there's probably multiple criminals involved in this. Yeah. And so let's watch them turn on each other. Yeah. Because somebody's like, well, if they're not paying the bounty to our criminal group, why don't I turn on the big boss Yep.
Speaker 2:Get him in the clink
Speaker 1:wow.
Speaker 2:Get the, you know
Speaker 1:That's genius.
Speaker 2:And so anyways, some some interesting game theory.
Speaker 1:And good founder led comps by Brian putting the the the video just, know, not overproduced, just, you know, almost stream of consciousness. Obviously, thought about what he was gonna say, but doesn't come off as as, stiff or callous or not taking it seriously. So so so good job to him.
Speaker 2:Yeah. The information is name, address, phone, email Mhmm. Masked social, so the last four digits only, masked bank accounts, government IDs, account balance. So, anyways, not great, but, I think this is the best response they could have given the circumstances. And again, this is just very rough if, you know, you're this is somebody who lives in a random apartment somewhere and suddenly they have to be thinking about, do
Speaker 1:I have to be worried about Real
Speaker 2:life threatening.
Speaker 1:Bank account in the future. World.
Speaker 2:That's right.
Speaker 3:You're just
Speaker 1:getting your eyeball. You can't social engineer that. And we got Alex from WorldCoin in the studio. Welcome to the stream. How are doing?
Speaker 2:What's going on?
Speaker 1:Tools for Humanity, founder of Tools for Humanity. Sorry. WorldCoin is one of the coins in the world orb. There's a whole ontology of of technology here. But thank you for joining.
Speaker 1:How are you doing?
Speaker 6:Good. Thank you for having me. I'm just at the Andreessen Horowitz LP Day.
Speaker 2:Oh, cool. Yeah. Think we were I think you just got off you just got off stage?
Speaker 6:I literally just got off stage. Oh. So I almost was a little too late, but I'm, yeah, right now in Las Vegas. First time, actually. First time in Las Vegas, I'm really sad.
Speaker 2:Wow. Narrative violation. Somebody building in crypto that hasn't been to a crypto conference in Vegas. Yeah. Not a problem.
Speaker 2:You know, it's great to have you. We've we've been wanting to have you on the show for a while.
Speaker 1:Yeah. That's great.
Speaker 2:Glad we made it happen. And it times nicely with your guys' entrance into The US market in a big Yeah.
Speaker 1:I mean, maybe you should kick us off with kind of, like, an overview of where the company is, where you started. I know there was an international component. Now you're in The US. There's different products. There's, different ways to interact with, like, the overall ecosystem.
Speaker 1:Kind of give us the state of the union on tools for humanity.
Speaker 6:Yeah. So, maybe, starting, right right from the beginning. So, like, a little over five years ago now, five and a half years ago, Sam, Sam Altman from OpenAI and and, actually had a part of the initial idea of this, and we we met. I was in AI before as well. I was, in theoretical physics and deep learning.
Speaker 6:And so both of us believed that AI will, continue to make a lot of progress, and very likely, we'll see AGI within our lifetime, which back then was not, like, a common thing to say. Yeah. And, and, of course, like, both of us believe that this is mostly going to be a tremendous force, for good, and it's gonna drastically accelerate science and technology, but also that we will need global scale infrastructure, to kind of really make this a great outcome for everyone. And so we, started a company together called tools for humanity, that really had that as a mission. It's like build global scale infrastructure to help with that.
Speaker 6:And, and then the actual kind of coming together of the company, there there were two main ideas. One was around the fact that as AI continues to make progress, we will need, some form of proof of human that is at Internet scale. Otherwise, many of the things that we care about will start breaking down. Because, obviously, like, as a society, we form our opinions, on the Internet, on our social networks. We meet each other on platforms like dating apps.
Speaker 6:We entertain each other with, games, that we that we play with each other through the Internet. And and and, like, the moment we have, not only passed the Turing test, which I think we did in the last two years, meaning now we have AI systems that we can talk to, and we cannot tell anymore just by talking to them that, in fact, is an is an AI, but also that we are now about to enter, of course, like, strong agentic AI systems, real time video generation, all these kinds of things. And so we will need a proof of human Internet scale. Otherwise, social networks, many of that, places where we meet online, etcetera, will start breaking down. And so this was idea number one.
Speaker 6:It's like, how could you build such a system? And once you have built such a system, you can use that to launch a digital token by giving ownership in it to eventually every human. And as a result, you would create what will turn out to be the largest real human network on the Internet. And so it was a very humble vision. You by by by Sam.
Speaker 6:And and so we really kind of we we took it very seriously. We thought about it for a long time and, back then, really thought about how would you need to build such a proof of human, if you assume what we did, which is that AI will become increasingly better. And then many of the initial ideas you could have on how to build such a system, like, why don't we just use our online reputation? So, like, our accounts that we used in the past, we built some kind of reputation graph, or what about if we just rely on government at any systems, or what if we just use phone cameras to do to get some kind of signal? All of these, we realized pretty quickly, will either, just break down as a result of AI becoming more okay.
Speaker 6:Just, like, more powerful and better, or it just doesn't have the properties that we think such a system will need, which is it needs to be global, and it needs to be fully anonymous and privacy preserving, all of those things. And so well, back then, we realized we will likely have to, build a physical hardware device that we have to read all over the world and, some point, get, almost anyone that uses the Internet to verify with such a hardware device and that everything else will very likely break down. And that was, like, a very a very, very crazy thing to do five years ago. So, like, people mocked the company for a long time. And it, you know, it was, like, just a a crazy thing to work on for quite a while.
Speaker 6:And so, essentially
Speaker 2:Talk about just going deeper there, you guys went to market internationally first. I'm sure you had a lot of temptation to really focus in San Francisco early on. Right? This is an area where there's an extreme density of people that understand this broader vision that you guys have. So I'm curious, thinking about, you know, the decisions that that went into that go to market and then also giving our audience a sense of the scale of the operation because I don't think people fully process just how
Speaker 4:Yep.
Speaker 2:Large the operation is.
Speaker 6:So first to the to the first part of the question, which is why did we not launch The United States much earlier? That had the simple reason that because Sam is a cofounder, everything we do has, like, a lot of visibility usually. And, in the last administration, there was basically no regulatory clarity around how to behave as you build these crypto networks and kind of what are the things that are allowed, which which are the things that are not allowed. And SEC, of course, like, had a posture of, enforcement. And so given the large visibility of the project, we just took everything always through a very cautious lens and just decided that we will only enter The US once there is a clear path to regulatory clarity, which I think is now the case.
Speaker 6:And so now we're really excited to, kind of make the service available. We launched two weeks ago in The US. In The US itself, it's still a meeting kind of pretty small, operation. It's gonna take us a couple months to really ramp this up. And just to give you an overall sense, we're now at twenty twenty five, 20 six million users in total in our app, World App, which is essentially the initial client to make this network useful.
Speaker 6:But kinda you have to think about that there's gonna be many clients that will use this this network, but but still and then we have 12,000,000, people that actually are verified, really all over the world from South Korea, Japan, to Europe, to Latin America. And and so, yeah, the company is now around four or 500 people, so tools for humanity. And it's a pretty it's a pretty complicated thing to manage because you have everything from on the ground operations, that are somewhat complicated, and a lot of things can go wrong to, of course, hardware manufacturing and ramp up to, a lot of software. So it's it's been quite a quite a journey.
Speaker 1:What what is your background? Have you have you done crypto stuff before or hardware stuff before or managed huge, like, workforces before because you're doing a lot of stuff? And I'm wondering, like
Speaker 6:No. I I was, I was I was I was literally a theoretical physicist, so I just I I used to sit at a desk all day and do math and write code.
Speaker 2:That's fantastic.
Speaker 6:I I I did, like, a decent amount of self engineering just because, like, already, like, then the clusters got larger.
Speaker 1:But Yeah.
Speaker 2:Yeah.
Speaker 6:Yeah. I didn't didn't do any any of that. Yeah.
Speaker 2:I wanted talk about yeah. Talk about how basically, talk about bootstrapping the network and the user base with the token. Right? And and because that's I don't know. I think I have a good sense for why you would do that.
Speaker 2:But, you know, the the sort of boomer pushback would be, you know, why does this need to be, you know, crypto? And I think you guys have good reasons for that.
Speaker 1:Yeah.
Speaker 6:Yeah. I think there's two reasons for that. Like, first of all, of course, appreciating that crypto still has, like, a meaningfully bad reputation just given everything that happened. But I think, there's, like, real technological reasons of why you need to do or why why I think it's best to build such a platform that way. So one is, as I just mentioned, bootstrapping where all of these networks that we use, of course, they're absolutely meaningless if they're not at scale.
Speaker 6:And then so, like, that plays to social networks, also plays to financial networks. And and so maybe one of the most notable examples of that was the launch of PayPal where, you were able to refer your friends. Your friends, had some amount of US dollars in their PayPal account. And and and very famously, PayPal spend a lot of kind of a huge amount of the renter funding. I was, of course, not there, so I don't know how much exactly, but a huge amount of the renter funding to get this network to critical scale with that referral program.
Speaker 6:And that then led to network effects and that then led to this turning into, among many other things, of course, into a successful platform. And so, the same applies here. It's just that these, crypto networks are valued at billions of dollars if they're somehow working. And so I think we can do, something similar just at a much, much larger scale. And so we can use, very likely billions of dollars to kind of really get this network to scale.
Speaker 6:And so that means that everyone that actually joins this network gets a small piece of it, through the token. And so you actually receive ownership in in in the quite literal network. But, also, of course, that is an incentive to verify early on where maybe the utility of the network is not fully there yet because it's subscale. And so that was that was that idea. And then the second idea is, of course, that, like, this is going to be, one, very expensive to build, but then also extremely valuable.
Speaker 6:It's going to be very valuable to many of the largest Internet companies, very likely, if you succeed in our mission. And so Yeah. We need a business model, but not for us as a company, but for the entire network. And so that is the second piece. I think these tokens actually allow you to build a sustainable network.
Speaker 1:Yeah.
Speaker 6:Yeah. And I think now we're actually bridging that gap where it's actually becoming quite useful. We we now announced the partnership with Match, which is the, the company behind Tinder, Hinge, many of the dating apps to actually bring proof of human to to these dating platforms, partnership with Razer, which is one of the largest hardware manufacturers for gaming hardware Mhmm. To turn that into the standard for for the gaming world. So I think, like, we're we're actually getting there now pretty quickly, but, of course, it's still early.
Speaker 2:Can you talk about the scale of bot activity online? I have to imagine a lot of people are interacting with bots daily that they don't necessarily realize are bots. Right? There was a high profile issue recently with Reddit where somebody was running a scaled influence operation experiment leveraging the power of AI. And for those that don't know, people were the AI would effectively look back through somebody's comment history and deeply understand the person and then make arguments to them based on their sort of preexisting beliefs, which is very powerful.
Speaker 2:Obviously, it seems all the users were not aware that that what was happening. Yeah. Yeah. And I just have to imagine that's happening, you know, at a at a very wide scale.
Speaker 6:Yeah. I so no one really knows, of course, the actual scale of the situation, but I think the the paper that you outlined is from the University of Zurich. So as you as you described, the University of Zurich actually ran an experiment of changing public opinion, by using AIs to respond to just, like, comment in subreddits. And they actually have been quite successful in, changing the opinion of these subreddits, which is kind of crazy. And so, of course, we have, like, a similar problem probably at meaningful scale on x, and very likely now every other social network.
Speaker 6:Maybe so dating also already get a quite a meaningful scale. Like, you have these now these these accounts that, like, have photorealistic images and start texting with you and everything. But I think, like, maybe the more interesting part is that I think we're, like, at 1% or something of what I think will happen over the next twenty four months. I think a big trigger point will be once you have an open source, very competent agent. Because, like, that's, yeah, that's that's where, like, things will get quite exponential, and we're, like, probably 90 more than 90% of almost all activity on the Internet, almost all content on the Internet will be AI created, sometime after.
Speaker 6:So that will lead to the fact that I think for now or until quite recently, by default, we trusted everything that we have seen, and we assumed that it's, like, authentic. I think that we'll completely flip by a 80 degrees to, by default, we don't trust what we see. We don't trust who we interact with if there is not a way to verify the claim. So it's gonna be quite a profound shift.
Speaker 2:What was your initial reaction to the to the Coinbase news, was this morning, obviously, very unfortunate, potentially leak of, you know, a bunch of, personally identifiable information, home address addresses, balances, things like that. Is that the kind of thing that in the future could be avoided through utilizing your network? Or is that just sort of a a reality of of, you know, finance today?
Speaker 6:So my first reaction was that I think it was a very, very strong, reaction from Brian. Mhmm. Yep. Huge, huge fan of Brian's, of course. But I think very clear message, very clear next steps.
Speaker 6:And these, the these things, they are unfortunate, but I think this is, like, a was somewhat at least from the outside, of course, I don't know the specifics, but it seems like a a relatively sophisticated social engineering attack. I don't think what we do will be able to help with some like, customer agent social engineering. Like, I think that's a very specific problem.
Speaker 2:But I but I mean more on the KYC side. Is there a world ten years from now where where somebody is effectively able to KYC using the world network.
Speaker 6:Oh, yeah. I think I think that will almost certainly happen.
Speaker 2:Yeah. Because the issue here was like, you know, somebody has their government ID tied to a home address, tied to a balance, and then that creates a risk factor, which is why Coinbase is taking it so seriously.
Speaker 1:What about kind of Centaur applications of artificial intelligence? So a situation where someone's gaming and they're verifying with the orb or their eyeballs, but they're still using AI. I mean, we've already seen this with a real person who's on a dating app, but they're have a second app where they're taking the text, putting it in there like the Riz GPT. Yep. And the the responses are still AI generated, but there's just one person involved.
Speaker 1:Is that less of an issue, the Centaur model, because there's still a human in the loop versus there's one person controlling or puppeteering, like, a million accounts?
Speaker 6:Yeah. I think that I I think by by in a couple of years, I think almost everything we do on the Internet, we will do with help of an AI because it will just make our writing better. It will make our thinking clearer. And so I think that is actually not really a problem. I think and and in some sense, the way we actually think about it is we think a lot about agents and agent delegation these days.
Speaker 5:Mhmm.
Speaker 6:And, for example, I think one thing how this will be very useful is you will need to understand behind an agent or that an agent actually acts on behalf of a human or, like, a a one human. And as you described, I think the the the the important property of such a system is that you cannot deploy thousands or tens of thousands of these AIs
Speaker 1:Mhmm.
Speaker 6:Not to not allow you to interact with that. And and maybe, actually, the gaming use case, there's a cool example here where with Razer, they they build these gaming, webcams.
Speaker 2:Yeah.
Speaker 6:And, what so when you actually verify for for world, you receive a a package of, data that is not stored anywhere. Essentially, it's stored on your phone, and one of the things that has actually a signed face image. And so what Razer will be able to do, it actually will use that to ensure that this is you're not a deepfake. You're actually the person you claim to be, and so you can authenticate a live video stream. And I think the same will happen on video calls.
Speaker 1:Speaking of hardware, we were just talking about Apple getting into brain computer interfaces. Neuralink is also in the game. Is there a situation where authentication via BCI is as effective, more effective, something that you're partnered with or developing? Or is that just on a different timeline from what you see the rollout of superintelligence or AGI being?
Speaker 6:I well, so personally, I'm very interested in BCIs, but I I think this is very much on a different timeline.
Speaker 1:Mhmm.
Speaker 6:So I think, like, to yeah. Deployment of invasive or even noninvasive PPI, so I think it's, like, still certainly five plus years away, probably ten, fifteen. Sure. So I don't we will figure it out once it gets there, I I I would say.
Speaker 1:Yeah. Yeah. What about I'm I'm super interested in understanding how the decisions that you're making allow us to read into your AGI timeline, Sam's AGI timelines, and what the future will look like. There's this interesting world where the the the kind of the revealing feels like you see a future where there are tons of digital AIs in the world, but maybe there's not this superintelligence that can reconstitute matter at a atomic level instantaneously, the gray goo scenario. Because in that scenario, even in the good ending, you would imagine that a superintelligence would be able to create a human eyeball, grow it in a lab, do something to create a fake version of the human Right?
Speaker 1:Maybe scan me one way or another and then recreate the eyeball. And so, much like you could potentially fake a fingerprint reader, with enough time and effort and detail in how you're constructing that matter, you would think that you'd be able to do that if you had unlimited resources and superintelligence and all these different things, but that doesn't seem to be the timeline that you're operating against. So can you tell me about, like, how your far future vision for superintelligence plays out a little bit?
Speaker 6:So, well, I I think about these things quite a bit. I think, so this this kind of also, like, Ray Korswild vision of, like, eventually, we'll have AI that creates nanobots that will be able to reassemble matter, etcetera. Think that's that is very likely to happen, but I think as a society, I think we'll like, there there's gonna be a lot of other things that will happen before we get there. Mhmm. And so I guess my internal mental model is that we are, I think, still at least ten years away from from from that kind of level of intelligence or at least from us allowing that level of intelligence to interact with the real world.
Speaker 5:Mhmm.
Speaker 6:And then, actually, if you well, if you if you don't think about the fundamentals of kind of physics in in such a scenario is that, of course, what we what we do to to to measure that humans is we use we fundamentally use photons Mhmm. Of different wavelengths. So near infrared, visible light, etcetera. And so I think, like, before you would actually, create an artificial human, such an AI would be able to maybe just emit multispectral wavelengths to fool such a system. Sure.
Speaker 6:And so, like well but I think then we will also use such a AI to build a countermeasure and build a more system. So I think that is, in my mind, still far out in the future. I I I think, like, all the medical advancements and Yeah. Scientific advancements from AGI, I think are
Speaker 1:that generally your your mental model for how all of this progresses is just, like, good guy with AGI beats bad guy with AGI. It's kind of economic or energy warfare. Whoever has the more compute, the more and as long as the the the good people have more resources, they will be able to build stronger defenses, and so the net outcome is good?
Speaker 6:Maybe that's, like, one way to frame it. But, like, generally, I'm, I think I'm way more optimistic than than kind of most people or, like, many people are in in in the tech world. I think, like, the default outcome is that, these AI systems would would just
Speaker 2:be incredible tools for us, and I think they
Speaker 6:will be widely accessible. And I think the the Frontier Labs will make these accessible to kind of a wide population for quite a long time. Like, the at at some point, you might get in a kind of this true superintelligence territory where maybe the government steps in steps in. Like, I could definitely see that happen.
Speaker 1:Yeah.
Speaker 6:And then it becomes, like, a geopolitical situation, which is going to become, like, very hard to predict. But I think until then, I think these AI systems will be relatively widely available and open source will not lag too much behind.
Speaker 1:Yeah. So yeah. It seems like most of your model is, like, general optimism about how AGI and AI progresses, but there are pitfalls that need to be avoided and there's, problems that will need to be solved in the interim and and, WorldCoin is one instantiation of that one problem to be solved. Are there other problems that you're thinking about that maybe you're not working but other founders or other entrepreneurs or other companies might be thinking about as we progress into the AGI future?
Speaker 6:Well, it so first of all, maybe the framing about world, I think you can definitely do that. Mhmm. But I think the other framing is, as a result of the technology, I think we will create one of or if not the largest real human network on the Internet, which I think will create a lot of value. So, like, it's like, it's not just preventing the bad. It's also creating the good Yeah.
Speaker 6:That I think, really matters here. You know, other problems for other there's, like, there's, like, so much. It's like a
Speaker 2:What what what, you know, I feel like the main you know, there's this, the world is undoubtedly controversial. Right? You have people that are super excited about the potential of the technology and understand the importance. And then there's maybe people that are excited and understand the importance, but they're still wary. Yep.
Speaker 2:And then there's like the whole other side of people that are just like, no, you're never gonna scan, you know, you're never gonna get my eyeball. Don't even, you know, keep
Speaker 1:I don't even have pre check.
Speaker 2:Yeah. Yeah. Yeah. Those types. But but but what do you say to the people kind of in the middle that are kind of like interested but kind of wary or maybe on the fence, you know, when you're talking to them one on one?
Speaker 6:You know, I I I think, like, we have very, very high conviction around both the importance of this technology and how the technology is built. Like, I think it has all the properties that we will need as a society for such a technology in in that sense that it's anonymous. It is scalable. It can be inclusive. Like, all all of those things, I think, will end up mattering a lot.
Speaker 6:Like, maybe much more than is kind of visceral, at that point in time, but I think in the next twelve, twenty four months, I think it will become relatively obvious. And so I think it's gonna be interesting where, like, I think different parts of the world will will end up with different trade offs. Like, maybe some parts of the world will just require government IDs on pretty much every part of the Internet, and I think that might end up being a a really bad a bad situation.
Speaker 1:And
Speaker 2:so And that's bad because somebody would just effectively sell their ID to be rented out for No. Because they were terrorists.
Speaker 6:Like, ultimately, it will be really hard to build that as an untraceable system by the by the government. And and and and and I think, like, it's, of course, something we really believe in here in The
Speaker 2:US is, like, the freedom.
Speaker 1:Yeah. So the government would track you on every single place you go on
Speaker 2:the Internet, every web page. They could, in theory. Could.
Speaker 6:Yeah. I'm not saying they would, and I think it really depends on which part of the world you're in.
Speaker 2:Sure.
Speaker 6:But I think that's just not a great outcome. And so I think if we do, like, if we do everything in the right way over the next couple of years, I I hope that our brand will become something like the signal messenger. We're like, I think
Speaker 1:Totally.
Speaker 6:This is, like, the the anonymous high trust solution that you can use. And other people will have other solutions. I think there will be a lot of competition around that space because I think it will become a relatively big one. So, yeah, if if others will want to use other options, that is that is totally great. I think we will win by building the best product and reaching the most scale.
Speaker 1:Jordy?
Speaker 2:Great place to end. Yeah. That is fantastic.
Speaker 1:Thank you so much.
Speaker 2:Very excited to see the rollout. I actually did I'm just remembering I had one last question. Are you far as far enough along as you would like to be? Or do you wish you could just sort of like pause time and, you know, scale the Worldcoin network, you know, just for another year to to sort of catch up? Because I because again, when you when you talk about these timelines around twelve months, twenty four months, you guys are really racing against the clock from what it sounds like for a world in which we have these sort of agentic reasoning systems that will really Yeah.
Speaker 2:Make the Internet a a much more wild place?
Speaker 6:Well, I think that that is definitely one perspective in my mind. It's like, think we're definitely at in a in a race against time. And what what is also what is interesting what really only happened in the last six months is that CEOs of many of the very large companies that you know with large products. Well, either we we talked to them or they reached out. And the problem is, like, currently, we cannot serve that scale.
Speaker 6:So there's, like, there's, like, a lot of pull for the product to be available, and we we just really need to get there. We need to roll this out faster and be able to serve these big platforms. So that that I think there's, like, a extreme level of urgency for one, but then the other side is it's hard to describe how crazy it feels to be even here, from the beginning of the company. Like, for, like, the first two to three years, well, people basically just made fun of
Speaker 2:this. Mhmm.
Speaker 6:And and so, like yeah. It's it's certainly personally the journey of a lifetime, and it and and, like, when when I start working this, like, I I gave it a very low probability of success, and I did so for the first three years as a thing. It's like yeah. So very, very long to go and fast to scale. But on the other hand, it feels pretty wild to just be here right now.
Speaker 2:Amazing.
Speaker 1:On the social network thing sorry. Last question.
Speaker 2:We're like, alright. Thanks, Alex. Thanks for coming on.
Speaker 1:I mean, when you say large scale network valuable, are we talking Visa network or are we talking Instagram?
Speaker 6:I know. You're gonna you're gonna see. Okay.
Speaker 1:Yeah. Yeah. I mean, I I'm I'm interested to see the business model, the pricing model. Are the big platforms gonna be paying in WorldCoin? Are they gonna be holding are we gonna have a national reserve of this stuff?
Speaker 1:I don't know. We'll have to try we'll have to have you back on when there's a big announcement.
Speaker 6:Looking forward to that. Thanks for having me.
Speaker 1:Yeah.
Speaker 2:Cheers.
Speaker 1:Fantastic. Thanks, Alex. You soon. Anyway, it was good. We broke because we gotta talk about Eight Sleep.
Speaker 1:They got a five year warranty, thirty night risk free trial, free returns, free shipping. Pod five Ultra. Pod five Ultra. I think you beat me. I got an 88.
Speaker 1:I think you got a 92. Right?
Speaker 2:I think the 18 must have gone in the app and Just giving you a couple boost to boost John
Speaker 1:gets. Just give Jordy a couple of Four
Speaker 2:more. I got a 92.
Speaker 1:90 two. Let's hear for Jordy.
Speaker 2:Two hours of deep sleep.
Speaker 1:Congratulations. We got Josh in the studio. Welcome to the stream. Josh, how are you doing? Haven't seen you since Helen Valley.
Speaker 4:Doing? Yeah. With a tie. No tie.
Speaker 1:Oh, no tie today. Well, we'll we'll get to you next time.
Speaker 5:Look at the
Speaker 2:look at the games, though.
Speaker 1:But he's looking great.
Speaker 2:Josh, what's your what's your workout routine? You're looking jacked.
Speaker 4:Oh, man. We we, we do basketball.
Speaker 1:Okay.
Speaker 4:Got some jiu jitsu.
Speaker 2:There we go.
Speaker 4:Yeah. We do it all. We try to see something.
Speaker 2:Yeah. Got it.
Speaker 1:Let's talk about the latest deal. Reflectorbital is in the take us through the anatomy of the deal. Break it down for us.
Speaker 4:You know, amazing entrepreneur, combination of zipline, SpaceX, guy Ben Nowak. Sean Maguire, friend, partner at Scoria, was early. He and Alfred seeded them. Yeah. We led the series a.
Speaker 4:It was one of these ideas where it's like, you've got the sun. It really is only available for half the day.
Speaker 3:Mhmm.
Speaker 4:And they had a very simple insight, which is that there's so many satellites that are launching. What if we took a giant Mylar balloon effectively and had this big planar area that we could basically redirect the sun and everything from solar efficiency so that people that, are running solar cell farms could basically get, you know, double the output to people that were doing search and rescue or military operations. You know, where could you literally task a satellite, not for visual imagery, but for someone? And we thought that that was a very clever idea. So we funded them probably a few quarters out from formal launch, and the inbound has been insane from all over the world of people saying we wanna be able to task satellites to have directed sun wherever we want it, when we want it, which is pretty cool.
Speaker 1:From governments or enterprises or both?
Speaker 4:Both. Yeah. Both. You can imagine folks in the Mideast. Yeah.
Speaker 4:Both where there's actually money at
Speaker 2:the government level, but no way that they could possibly do infrastructure for street lights at night. Interesting.
Speaker 4:And so, yeah, there's a lot of applications that have been popping up that we heretofore never imagined. So it's one of those things that develop a capability, don't under promise, you know, don't don't don't over promise and under deliver. Do the exact opposite.
Speaker 2:Yeah.
Speaker 4:And people are coming to him. So, yeah, we're really excited. And he's super smart, super, super sharp.
Speaker 2:Yeah. What do you what do you think are the exciting second and third order effects of something like this? Right? If you make an area that's dark for most of it, know, not most but but some percentage of a twenty four hour period and you light it up, I can imagine that would have positive impact. You know, I think there's a bunch of data on like street lights
Speaker 1:It's big for Andrew Huberman crowd.
Speaker 2:Well, yeah. Don't know. Andrew might be like, oh, you're disrupting my circadian rhythm or something like that. But no, but isn't there there's a ton of data on like street lights and crime, right? It's like if you light up an area, like, there's a massive reduction.
Speaker 2:I'm curious if you've thought about kind of the the potential externalities of the technology over time.
Speaker 4:Well, the the first one, again, is energy. Right? So if if you're able to produce electricity and solar is getting way cheaper and way better, but the efficiencies are still at 50% of the day when you have sunlight, and then you're doing battery storage. But if you could extend that in certain areas and particularly if there were sort of adjacent farms that weren't lighting up the city and screwing with people's circadian rhythms that then could be transported through electricity through storage and electricity. Transmission, I think that that's exciting.
Speaker 4:Yeah. Sporting events, late night soccer games, you know, all the kinds of things where in New York City, it's no question. You know, in Palo Alto, it's no question to be able to light up, stadiums. But if you wanted to light up an area that was an entertainment zone or, you know, you can imagine things there. For sure, implications on safety, again, on search and rescue.
Speaker 4:Mhmm. You know, there's a reason that we always say whether, people are hewing towards elements of honesty that sunlight heals all. So, yeah, I'm a big fan of the sun.
Speaker 1:This feels like one of those deals that kind of lives and dies by the, like, specific variables in a spreadsheet. If launch costs are a little bit higher, it could be really you know, they could get kind of stuck if they don't fall enough or, you know, the the the distribution of sunlight that's not concentrated enough all of a sudden doesn't make economics sense. Is this more of, a bet on the founder, or have you dug into the spreadsheet? And are you really confident on the model evolving? Or is it more like the team's just so good they're going to go figure something out?
Speaker 2:Well, I would go and say there's different economics for different use cases. Totally. Right? If you're a military and you want to light up a battlefield That's
Speaker 1:very
Speaker 2:you're
Speaker 1:probably willing to
Speaker 2:spend a lot more
Speaker 1:than the marginal solar user who maybe just needs a
Speaker 3:little bit of
Speaker 4:For sure, search and rescue, you know, are gonna be these punctuated emergency kind of things where, you know, people may not spare a cost in military as well. Mhmm. In other cases, obviously, military is gonna want the cloak of darkness. Right? And so they don't wanna light some some things Sure.
Speaker 4:But, the honest answer is on the first part, I I I don't know what the pricing is gonna be here. Mhmm. We're comfortable, first and foremost, with an entrepreneur who is so thoughtful about every aspect of weight performance, the material science behind it, the launch cost, the capabilities, the cadence, the frequency. And so I think it's one of these things, like, build it and they will come. And there's a little bit of faith in that, but I have a lot of faith in Ben.
Speaker 4:I think he's recruiting extraordinarily well. I think he's deeply technical. He's obsessed. I mean, truly, like, obsessed. Like, you know, a lot of people do all kinds of things in their spare spare time.
Speaker 4:He's reading, like, math textbooks just for fun in spare time. So super super space nerd, really talented. Yeah. And Lux and Sequoia are, you know, forgive the pun, but, excited for it to see the light of day.
Speaker 2:Nice. There we go. Let's go. Air horn for that. Air horn.
Speaker 1:Let's zoom out and talk about space broadly. Launch costs have been coming down. There's been projections that they're gonna come down further. Have you been pleased with the trend of falling launch costs? Are you seeing enough in the entrepreneurial burgeoning space economy?
Speaker 1:Are there gonna be a new wave? Are we in the midst of a wave? Is the next generation thinking about other orbits, MEO, or very low Earth orbit? What's exciting to you in space these days?
Speaker 4:Man, I'm just gonna give you a cascade of yeses. Yes. Yes. Yes. Yes.
Speaker 4:And yes. There
Speaker 2:we go.
Speaker 4:Look. Cost per kilogram to launch things up into the space was the main limiting metric before. And, larger vessels, better propulsion, more frequent launches, increasing demand, all of that has lowered that. When we first did VARTA, it was the inverse analysis, which was instead of trying to figure out how do you get low cost per kilogram up into space, it's how do you actually develop something that is gonna be high cost per kilogram to justify doing it in space and coming back down. Mhmm.
Speaker 4:Same thing for another and by the way, VARTA, you know, I know Deleon's been on and
Speaker 1:Yeah.
Speaker 4:But I'm so proud. Third launch successfully just yesterday, you know,
Speaker 1:in the past twenty four hours.
Speaker 4:Landing in Australia.
Speaker 2:Down guys.
Speaker 1:Yeah. Yeah. Calm down.
Speaker 4:You know, Brewy and and Delian and team, truly proud of them, proud to be partnered. It is just awesome. Yeah. And, you know, you're going 25 Mach, 25 times the speed of sound. You know, the hypersonic testing people have talked about the hype around hypersonics.
Speaker 4:Yep. It's real. And, really proud of them and their and their launch and and and reentry capabilities. Yeah. A related one, which was Tom Mueller, who, you know, as you know, is Elon's right hand guy at SpaceX for twenty plus years.
Speaker 4:Yeah. We backed him in a company impulse space. And this was one of those speculative things of how are you gonna, invest in a company today where there's no economy and no demand yet for the ability to transport things, you know, and move them into space once they're up there. And that's really what he's developing, the vessels and the capabilities that once assets are up in space, how do you think about whether it's cargo transport or moving satellites and all these kinds of things? So, there is
Speaker 1:Feels like that impulse could, like, unlock an entire new class of startups built on the stack of impulse plus SpaceX. You get something up to LEO, and then you push it higher. And, you know, there's some examples of things that can happen, but I feel like if you drop the cost 10 x, a hundred x or something, you're gonna see a whole different breed of startups. Right?
Speaker 4:Totally. And in fact, a lot of our thinking around this was, you know, it's such a cliche thing that history doesn't repeat at rhymes. You know? But if you go back to history and you look at one of the great build outs in this country that unlocked commerce and transport of, material and populations and lives, it was the rail. And, you know, so many things have happened during rail for people to compare to booms and bust cycles.
Speaker 4:But if you look at rail Yeah. And you think about the tracks that were laid down horizontally, and you were to flip them 90 degrees, and instead of tracks, now you've got propulsion going up to space. It's very much the same thing of how do you get transport number one and who's gonna sort of own those lanes. So that's launch capabilities. Then you've got communications.
Speaker 4:You know, there's a reason that telegraph lines were laid proximate to the rail, and it's the same sort of thing. Now instead of telegraph lines with actual wires, you have satellites doing Ka and Ku band. And you have everything from Starlink to our company, Chimeda, that we do with Bill Gates, where it's Ka and Ku that are basically switching off of a solid state material with no moving parts. You know, when you're on a plane and the reason that you lose Internet for two seconds or whatever is it has lost track with a geostationary satellite. You know?
Speaker 4:And and, of course, it's tracking it. And as the Earth moves, it's tracking it. But if you're in a low Earth orbit satellite, you wanna be able to track it just like when we're moving through the city and going from cell tower to cell tower. And so that capability is something that's relatively new for being able to lock on and track satellites. Then you've got, people that are making things in space, like VARTA.
Speaker 4:You've got people that are transporting or storing them. There's other companies that are doing effectively private space stations because, as you know, ISS is coming out of service. You've had geopolitical considerations of who's partnering with Russia or China. And and so there is, I would just say, a very robust space ecosystem driven by the fact that capital follows talent, talent follows breakthroughs and ambition. And there are so many young, smart men and women that want to work in the space.
Speaker 4:And in many of them, they were in the pressure cauldron of SpaceX, which I think is an incredible culture. You know, as you know, I'm critical about Elon about a lot of things, but I think SpaceX is an absolutely amazing business. Yeah. And I think people that are attracted to it, have been trained there, are now spinning out, are incredible.
Speaker 1:Yeah. I mean, the Varda story is fascinating because they started I remember the very first pitch was for, like, we're gonna make ZB land in space, then there was pharma. Now they're doing pharma and some defense and hypersonic testing and stuff. And it's just a testament to, like, you bet on the founder, and they'll go figure it out, but they are riding a really, really important trend.
Speaker 4:Totally. And when when when when, Delian was first pitching that with Rui, I was like, I have no idea if this exotic optical material is gonna be the thing, but the capability of you doing this is gonna be the thing. And it's really about that economic inversion, not dollar per kilogram up, but high value dollar per kilogram down. Mhmm. And I think even Sean, who we're now we're partnered with and reflect made that comment of, like, he was focused on the micro and he sort of got that wrong, or he maybe got that right, actually.
Speaker 4:But the macro, you know, maybe he missed and and super honest, self reflective.
Speaker 1:I think I I think with Varda, he said the opposite. He said he he At the micro?
Speaker 2:No. No. He missed
Speaker 1:the micro? Oh, yeah. Yeah. Yeah.
Speaker 2:He got the micro wrong.
Speaker 4:Yep. It wasn't gonna be zeblamp. Right?
Speaker 1:Yeah. Yeah. Yeah. Yeah. Yeah.
Speaker 1:That's right. He got hung up on that.
Speaker 4:Macro Yep. Was like, there's
Speaker 1:good Yeah. You should have bet on the macro. Yeah. It was great. I think an underrated, just story or fact about you is that you've been in venture a long time.
Speaker 1:Can you tell us the story of, like, the first fund and how you even got into venture and kind of what you've learned over the last it's been more than ten years. Has it been twenty years now? How long have been doing this?
Speaker 4:Twenty years. So, look. I I I'm a science nerd. I was doing, HIV AIDS immunopathology research, and I literally got into that because I watched an HBO movie when I was, like, 13 years old called And the Band Played On.
Speaker 2:What was it? Was it HBO? It wasn't HBO Max back then.
Speaker 1:It was just HBO. Right?
Speaker 2:They they swapped back and forth.
Speaker 4:Yeah. Just old school HBO. And it was like this ensemble cast, and I had to write ambitious naivete, everybody that we ever back does, which is like, I'm gonna go cure AIDS. Anyway, end up working in a scientific lab. The scientific lab, three, four days a week after high school, finished that all the way through college, published in, two different scientific journals, thought I was gonna go get an MD PhD.
Speaker 4:My mentor was trading futures and options. So we'd be sitting there with a centrifuge of AIDS blood spinning down, waiting to run some 96 well, enzyme linked immunosorbent assay thing, And he's making money, and I didn't know anything about the stock market. My mom was a I was raised by a single mom,
Speaker 3:and Yeah. She was
Speaker 4:a a resource room special ed school teacher. And and I got enamored by capital markets. And my life since then has literally been the intersection of science and finance. And it is partially the satisfying thing for my own ADHD of being able to constantly meet new founders, and I never knew who I'm gonna meet. And then coming up with certain theses and running them down and either starting companies with founders or, you know, find the people that are in it.
Speaker 4:When we started, Peter Hebert and I, who's absolutely amazing, I mean, he's, like, literally my dispositional opposite. Very much like my actual real life wife. He's smiley. He's positive. He's optimistic.
Speaker 4:I am usually in all black and negative. Everybody here has been indoctrinated with this idea that failure comes from a failure to imagine failure. Pete is like, well, what if it works? You know, what if what if what if what if it, actually becomes a multibillion dollar business? And my wife Lauren, he and him are very much the same.
Speaker 4:They're smiley. I always say, you know, I've got resting bitch face. And it's just it's a it's a great dynamic. People joke he invented the airplane. I invented the parachute.
Speaker 4:It's a good yin and yang. When started, we had friends and family to go out and raise money for Lux. And I joke that we had friends, we had family. None of them
Speaker 2:had any money. And we got lucky and
Speaker 4:met a guy, Bill Conway, who was one of the three founders of the Carlyle Group, which at the time had maybe 6 or 8 or 10,000,000,000 at most. Today, you know, hundreds of 405 hundred billion.
Speaker 2:This was fun for ants back then.
Speaker 4:And and we met with Bill, and I always say, look, the counter factual, and this is true of all of our lives, and anybody listening and any entrepreneur starting something, you just never know.
Speaker 1:Mhmm.
Speaker 4:And he was in the right mood that day. Maybe he had a great breakfast with his wife. Maybe he found out they just made a lot of money for a deal. Maybe he closed a big LP. Maybe whatever it is, he got good news.
Speaker 4:And where he was in he's just in a good mood. But the counterfactual could have been he was in a bad mood. He was pissed. He was angry. He was frustrated.
Speaker 4:He was he was hungry. And we came in and we pitched him on this idea that in the history of venture, every ten or fifteen years, there's some secular wave in technology. In the seventies, it was PCs, the eighties, it was biotech, in the nineties, it was TMT, technology, media, telecom. And our view was, like, the next wave is gonna be the physical material sciences and where they intersect with computer science and all this kind of stuff. So it's like the interstices.
Speaker 4:And it wasn't gonna be just Stanford and MIT. It was gonna be like Cornell and Georgia Tech and University of Michigan and UT Austin, all these kinds of places, and physics and material science and chemical engineering. And so he said, I hope you make a billion. And he believed in us, gave us our first pledge fund. We were writing small checks.
Speaker 4:We had maybe board observer seats at best. And then, you know, a bunch of those things were doing pretty well. We were building a little bit of a reputation. And then we went out to raise our first real institutional fund, we called Lux two. Mhmm.
Speaker 4:Because everybody likes a second fund. Right? So our first time fund. But, like, nobody would invest in a first time fund. But if we called it Lux two
Speaker 1:There you go.
Speaker 2:Lux two.
Speaker 1:This is, like, announcing a preempted round. Every we're we've been saying every founder should say that every round is a preempted round because it just looks better.
Speaker 4:So Bill becomes an anchor investor in that, and we get this, like, pantheon of people. Pete Peterson, who's the founder of Blackstone, and Stan Druckenmiller, a legendary global macro investor Wow. And Ken Griffin, founder of Citadel.
Speaker 2:And
Speaker 4:and it was all random connections that led to these individuals. And they were writing, you know, sort of, like, $510,000,000 checks, and then we got a whole bunch of family offices, some small fund of funds, a few corporates like Lockheed and Motorola. And we could not hit our hundred million dollar target. 92.1 to this day, I remember every person that said yes or no, every hundred thousand dollar check, the people that have been with us for twenty years, and people that said no that we would later on because I got chips on my shoulder. Yeah.
Speaker 4:We wouldn't let into the
Speaker 2:You wouldn't let them back in. Bro.
Speaker 4:Yeah. But so so I'm I'm very thoughtful about the people that we we ever say no to because you never know in two or three years, they're gonna be the people that you really wanna back. But, yeah, we we started small, and today we're 5 and a half billion. Wow. I still remember those those early days.
Speaker 2:That's fantastic. Talk about the new science funding initiative. You guys have been following a lot of the cuts, funding cuts.
Speaker 1:Yeah. We have a couple of people on the show about the importance of basic science research funding things that don't have immediate economic impact. What's the impact of a helicopter on Mars? What's the what's the impact of understanding DNA at some atomic level?
Speaker 2:Yeah. They say you can't Stuff comes out of that, but it might be
Speaker 1:a decade. There might not be a typical venture payback. What what are you thinking about this space generally?
Speaker 4:Well, first of all, the roots of venture capital are really two things. It was deep science and it was defense. You know? So defense tech itself is nothing new. It's it really is their early days of the venture capital industry.
Speaker 1:Genentech. People forget. That's one of the greatest venture bets early on.
Speaker 4:And Cohen and Boyer, and that spun out from the UC system. That was one of the early important proof points that helped to create the Bayh Dole Act. So you had two senators, Evan Bayh and, Bob Dole. They basically said, look. All this taxpayer money that's going into universities, they're producing property, intellectual property in the form of patents.
Speaker 4:But why don't we allow the university to actually own those instead of it being like marching rights from the government? And what that did was just blew out, and it happened to coincide with the, ERISA Act where retirement money could start going into private equity and venture capital. That was also in the seventies, the late seventies. The virtue of both of those things was that you had now this new class of intellectual property spawned from taxpayer funded research that went from NIH or National Science Foundation, National Institutes of Health, the sort of three letter agencies going into academia. They would hire postdocs.
Speaker 4:They would do work. They would file some patents. And then there was this well trodden method, which we happen to be quite good at, where you would go to university. You'd go to their tech transfer office. Actually, most of the time, you really don't go to the tech transfer office.
Speaker 4:You go to the principal investigator or the scientist. And because they're implied employed by the university, they go to the tech transfer office and say, wanna do this. If you go to the tech transfer office, oftentimes, you're dealing with adverse selection. That's an aside. Mhmm.
Speaker 4:You give them a royalty. You give them a license. You do equity. You strike a deal, and then you're funding it. And they typically get some money back, for all the work that they they spent.
Speaker 4:They also have what's called diligence criteria. Very simply, if you don't put up enough money or you don't advance it, then justifiably, it goes back to the university so they could take another stab at it with somebody else. And so there's lots of structured deals that you can do here to make that happen. The university professor, the scientist will typically spend 20% of their time on the company, sort of like the equivalent of what Google would adopt later on, you know, a day, a week to do these kinds of things. And the benefit to these universities were royalties and licenses on some of the most important drugs in pharma, some breakthrough materials, that ended up in national security.
Speaker 4:I mean, hundreds of millions, if not billions to some endowments. It's a really big deal. And over time, I'd say, like, probably fifteen, twenty years ago, Venture started doing maybe late nineties, more and more just computer science driven things, more Internet, more, you know, dot coms, ecommerce, and they were going away from universities. We've always had that as part of our knitting. When we started Lux, one of the guys we invested in was this guy, Larry Bach.
Speaker 4:Larry was a serial entrepreneur. He ended up joining our firm. He passed away maybe seven, eight, nine years ago. He's an incredible guy. And, we learned a lot from company about company creation from him.
Speaker 4:He started 17 companies from scratch, took 14 of them public, cumulative market cap over $80,000,000,000. The most significant was, Illumina, the gene sequencing company. Wow. And we learned how to do this and how to partner with young scientists. So we've been doing it really nearly twenty years, and we've started over 20 companies ranging from high-tech nuclear waste cleanup, which this company, Curion, that, helped with the Fukushima disaster to four d LIDAR to, finding real life mutants in a company called Variant Bio where we go out like x men and are trying to find these outlier people in outlier parts of the world.
Speaker 4:Crazy stuff. But all of it has some breakthrough that happened in an academic lab, and you're going and typically, it's, like, 95% ripened and ready for commercialization. So you're not really taking that much science risk. The government took that or the or the university took that or taxpayers took that. What happened now is we saw a confluence of factors.
Speaker 4:You got politicization that's happening at universities, you know, where current administration is is, punishing for antisemitism or or absence of free speech or whatever it is, cutting funding, potentially cutting tax status, potentially increasing tax on endowments from, 1.4% to possibly up to 20%. So they're facing very serious pressures to say where what are we gonna do with our funding
Speaker 2:Mhmm.
Speaker 4:If we're not getting it from the federal government. Many of the scientists are innocent. They're doing nothing. They just wanna do their work, whether that's finding cancer diagnostics or inventing new materials or coming up with, you know, all kinds of interesting aerospace applications. And so they're facing funding cliffs now.
Speaker 4:And, some of that is from federal budget cuts. Some of it is from politicization, but it's a big issue. This is against the backdrop where, to me, the biggest issue is not anything domestic. It's not about left or right. It's about past and future, and specifically a future that we are competing with China for.
Speaker 2:Yeah.
Speaker 4:China now leads in nearly 40 of 44 critical technology areas. Cultures get what they celebrate, and the culture for Chinese scientists and academia is not our culture, is not the TikTok culture, is not, you know, celebrating Paris Hilton and Kardashians or whatever. It is build what we can to have an absolute, utter advantage and an advantage relative to America. This is you talk about make America great. Truly what made our country not just great, but exceptional.
Speaker 4:Mhmm. Attracting German Jews during World War two and making sure that we were the ones that developed the atomic bomb and having the Institute for Advanced Studies at at Princeton. Having these amazing academic institutions, were research institutions, not, you know, political drama on campuses and this kind of stuff. So we need to go back to that. And we saw that there's bureaucracy, funding cliff, politicization, increasing pressure against this backdrop of competition with China.
Speaker 4:We said, we already do this new co formation, and we partner with scientists. Now we're doubling down, and we will go even earlier. You lost your grant, and it's potentially on the path for commercialization. Instead of it being 99% bank, maybe it's 30 or 50% bank, we'll take the risk.
Speaker 2:Mhmm.
Speaker 4:Come join a company, spin out into a company, license your work to one of our existing companies, but know that there's an alternative path
Speaker 3:Yeah.
Speaker 4:Besides just facing a brick wall or going off the cliff.
Speaker 1:That's very cool. Not to get too political, but, you mentioned China geopolitical competition. What are some countries that you're particularly long or you think are underrated as potential partners to America or potential entrepreneurial hubs? When I grew up, you know, Japan was making humanoid robots. Honda, Zazimo.
Speaker 1:Haven't seen a lot of startups come out of Japan, but we're seeing stuff come out of Talpio in Israel with the Wizz we're seeing, what some VCs are doing in Europe and The Nordics have produced Spotify. Where are you looking across the globe? What's what what excites you, if anything?
Speaker 4:Yes. Yes. Yes. And yes, again. So, we've got the leading AI company in Japan, Sakana
Speaker 1:Oh, cool.
Speaker 4:Which is which is amazing. And, a bunch of the partners were over in Japan
Speaker 1:twice thesis for that national AI, like, wants their own foundation model? Is that right? Yes. Okay.
Speaker 4:In in part, it's sovereign models. Sure. But it's not like Mistral in France.
Speaker 1:Okay.
Speaker 4:It is also sort of a very different, almost complexity theory approach to the model, so they're coming out with all kinds of new stuff. One of the founders, Leon Jones, was the original author, and he named the title for the paper, attention is all you need when he was when he was at Google. So killer team based in Japan. All the major Japanese corporates have now invested, and we're very bullish on that. Israel.
Speaker 6:Is Kuretsu?
Speaker 1:Leon Jones does not sound like a Japanese name.
Speaker 4:No. He's he's not. Leon
Speaker 2:yeah. But, I mean,
Speaker 1:I'm sure he's having
Speaker 2:a Is is koretsu is the right word for it. Right? Where you get these Yeah. Corporations that sort of build these They
Speaker 1:own they own pieces of it. So the bank owns the piece of the industrial company, which owns a piece of the bank, and they all kinda work together. It's a very cool model.
Speaker 4:Mitsui, Sumitomo
Speaker 1:Yep. Yep. Yep. Hyundai Heavy Industries makes the oil rigs and the cars and
Speaker 2:everything.
Speaker 7:Now now that is
Speaker 4:changing because you are seeing the rise of startups and a startup culture because failure in Japan is very different than failure in Silicon Valley, and that's starting to change. And so we're optimistic on that. So that's so Japan is number one. Israel, number two.
Speaker 1:Sure.
Speaker 4:I mean, I really think that this young generation of Israeli entrepreneurs are going to be the greatest generation. They are literally being forged in fire. They are fighting an existential, fight for their lives.
Speaker 2:Yeah.
Speaker 4:And people are shifting from, you know, doing apps and ways and and, cybersecurity, still important, but they're now getting really interested in defense. Mhmm. We did two companies. One came out publicly. It's Austin Sequoia in a company called Kela.
Speaker 4:You mentioned Talpiot. Oh, yeah. One of the elite guys from Talpiot who went to fight post October 7, and Hamot Al Merador who ran Palantir in Israel.
Speaker 1:Oh,
Speaker 4:yeah. Just absolutely killer team coveted, very sought after by investors. The other one is in stealth. Us, Peter Thiel, Trey, and a and a partner in in in Israel, Michael Eisenberg, all amazing people. Yeah.
Speaker 4:We all came together to fund a company focused on a capability that Israel did not really have and, and needs for some of its its most serious, foreign adversaries. So that'll come out, I think, in the next few months, and and, we'll we'll see some other Silicon Valley Investors, I think, join in on that.
Speaker 1:Yeah. Introduce us to the founder. We'll have Mon when he when he comes out of Stealth. Alright.
Speaker 2:Be great. Couple couple quick ones. Basic Capital. You guys were the first institutional investor, maybe the first investor ever. What what what was your personal journey to investing in the company?
Speaker 2:It was getting a lot of attention this week. It was funny because when a new company comes out to fund auto loans, nobody bats an eye. If you want to give people the ability basically use debt to buy assets that appreciate, suddenly it's a big controversy. I think a lot of people got
Speaker 1:Maybe some leverage here.
Speaker 2:Maybe they got the calculations wrong too, I saw. So the internet was really doing its thing. But I would love to hear. It is
Speaker 4:it is controversial, but we think it's necessary. Credit do, honestly, love him, like him, hate him, never ignore him. Bill Ackman really was a c check. We came in. Henry Kravis came in.
Speaker 4:And the founder is amazing. I mean, he doesn't really talk about his story, so I'm not gonna go too deep into it. But he grew up I'll just give you in a refugee camp, Palestinian in refugee camp in Syria.
Speaker 1:Wow.
Speaker 4:Basically, a Hamas run camp. And the story is insane, if and when it comes out, on how he got out of this situation. Ended up in, first Europe, and then The US, and then Goldman Sachs, and becomes an expert in fixed income and, complex derivatives, and is just absolutely brilliant and resilient. So we loved him and his personal story first and foremost. The way we got to him, our partner, Dina Schacker, I think through some shared ethnic connections, he reached out.
Speaker 4:It wasn't an area that she had a particular expertise or interest in per se shared with our partner Peter who loves a lot of stuff in finance. And they end up spending like ninety minutes together. I don't even think they talked about the business until, you know, last ten minutes or something. But Abdul is is very special. Yeah.
Speaker 4:Matt Levine, I think has covered it for the past two, three days in in sort of a positive way, which for him and he's a friend is a is a is a is a nice thing to see. They're gonna figure out their model, but the premise was we allow people to borrow for all kinds of depreciating assets, and we just accept this. We allow people to borrow for consumption. We allow people to borrow for homes, and, you know, the theory that homes are only going up or for cars as you noted. Why do we not allow people who are not owners of the American company, American economy in particular, to own a piece of it?
Speaker 4:Because that, if you really care about inequality, the wealth gap, is because people that have the ability and the savings to invest in the American stock market and just watch it compound over time, even in low cost index funds, are are at a superior advantage. And so that's really what he's looking at and and and addressing. And, yeah, we we, we're very fond of him.
Speaker 2:Last question, humanoid timelines, bullish, bearish humanoids. Tesla right now is pricing in humanoids almost immediately, it feels like. But but, yeah, what what's your thought on I'm
Speaker 4:pretty sure Elon is curing blindness, autism, you know, all I mean yeah. We we'll we'll have a whole another Elon discussion on, you know, his relationship with the truth and some of my criticisms on some of the other things outside of SpaceX.
Speaker 7:But Yeah.
Speaker 4:Look, inside Lux, there's a dithering spectrum of people that are super bullish on humanoids and people that are super skeptical. I'm more skeptical on humanoids even though we've made some investments in that I don't think the form factor should be two arms and two legs.
Speaker 2:It's a lot of motor. It's a lot of motors. Right?
Speaker 4:Well, it is a lot of motors, and that's actually a big opportunity as well for a lot of companies. And it is white space because 80% of the motors are coming from China. It's about 60% of the bomb for most of the motors. Average humanoid robot's gonna have at least 25 motors. You imagine them selling 10,000 or a hundred thousand.
Speaker 4:I mean, you're talking about millions of motors. There's gonna be an opportunity for motors, not clear whether it's gonna become standardized, special, small batch, but there's an opportunity in a white space there because we are so dependent on China. But I care more about the fact that most of these things are being teleoperated trained, even, you know, Optimus, which was sort of a performative thing because most of those things, except for when they were, dancing, were being controlled by humans. So it it wasn't really fully honest until they revealed that, like, a day or two later, but it was too late. But even two arms, two legs that they're being controlled, why am I unpacking a sink or folding something with two hands?
Speaker 4:This should be, in the Darwinian sense, endless forms most beautiful. You know, who's talking about the diversity of species? I wanna see a diverse set of robots that are almost like the canteen scene out of Star Wars, where you're like, holy shit, like, did that thing just have six arms and just did that thing like that is unhuman? That's what I think our robots should look like. More droids, so so to speak, than robots.
Speaker 4:But the amount of competition that's here, you know, there's seven different companies today trying to do humanoid robots of serious scale. Talent is flowing between them and, we're we're we're gonna see them. The question is, where's the killer app? Everything I hear is fold laundry, undo your dishes, be a companion to somebody in your home. Yeah.
Speaker 4:I haven't seen that visionary person that's like, no. No. No. Way that we're gonna use robots is x y z. And I get the argument why humanoid robots make sense for a human built world with door frames and steps and buttons and all that kind of stuff, but I'm convinced that the the future robot company that rules them all is gonna be either something like one of our companies, PIE Physical Intelligence Yeah.
Speaker 4:Run by Lockheed Groom and and
Speaker 1:Great team.
Speaker 4:Incredible. Right?
Speaker 2:That Yeah.
Speaker 4:He's all about the embodied intelligence.
Speaker 1:Yep. Yep. Yep.
Speaker 4:They don't care about the form factor. You wanna use Chinese unit tree. You wanna use, one of our other companies here, Fauna.
Speaker 3:Sure.
Speaker 4:All good. But we're gonna be the embodied intelligence.
Speaker 1:Sure.
Speaker 4:That I think is really interesting because one way to make money in venture is always understand where what's abundant and what's scarce. And what's abundant in, say, AI is training data. You can train on the open web. You can train on Reddit. You can train on Twitter, etcetera.
Speaker 4:Yeah. What's scarce in robots is having a repository of training data.
Speaker 1:Mhmm.
Speaker 4:And so that's why you've got humans that are doing this teleoperation and training them through kinds of scenarios. But when they enter unstructured environments, what you want is these world models that basically help somebody navigate a situation that they've never been in.
Speaker 2:A founder came to you, named Darwin, would you get bullish? You you did you popularize Oh, the nominative determinism? You have a thread? You have a thread? It's it's now, I think He's been really I gotta figure out how many
Speaker 4:people are
Speaker 2:on there. One zero six.
Speaker 4:Yeah. 106 listings. You know, it started with a friend of mine. I'll I'll give a shout out. It's guy Russell Diamond.
Speaker 4:He's in a totally different form of business, but I think it's I know. When I
Speaker 2:started posting it, it's gotta be
Speaker 4:at least five, six, seven years. And some of them are absolutely hilarious.
Speaker 2:I mean, most recent one, it's it's Rich Fairbank is the CEO of Capital One. Yeah. Just amazing.
Speaker 4:Screwing with me now. Like, some of these names,
Speaker 3:they're just putting
Speaker 4:out there. Like, let's see if Josh just gets pissed
Speaker 1:off by amazing that you've built a firm instead of being a solo capitalist, a lone wolf, but, it somehow worked out. Anyway Well, that was great. Having you on the show. Thank you so much for joining It was a
Speaker 2:pleasure. Overdue for for a full segment. We'll talk soon. And
Speaker 1:we don't wanna keep Jason waiting any longer, so let's bring in Jason now, to chat about the history of 37 signals, bootstrapping versus venture capital. I'm sure we're gonna get a bunch of interesting takes and hopefully have him join the stream right now. Welcome to the show, Jason. How are you doing?
Speaker 5:Hey, guys. Good. Thanks for having me on.
Speaker 2:It's great to have you. Thanks so much. Jason start this we've actually met in person once
Speaker 5:Oh, really?
Speaker 2:Randomly at a restaurant that was one of my favorite restaurants in Malibu. We met and then the restaurant shut down like a a month later. I was super bummed. I would go restaurant was that? It was like was it something it was right by Whole Foods.
Speaker 2:There's a hamburger place there now. Oh, yeah. Like Coconut? The Real Coconut?
Speaker 5:Real Coconut was there. That's correct. Tragic.
Speaker 2:Yeah. It's a try that was that spot was the best. I don't know what happened. But Mali was a tough That
Speaker 6:a spot.
Speaker 5:They had a hard time. It's
Speaker 2:a tough market.
Speaker 5:Yeah. It's a tough market. Runts are high there, for sure.
Speaker 2:Yeah. Anyways, great to have you on. We've both been looking forward to this.
Speaker 1:Yeah. I mean, I'd love to just take your temperature on your view on the current state of venture capital and startups. Are things getting better? Are things getting worse? It feels like people are raising more capital than ever.
Speaker 1:Potentially, there's a bubble. Potentially, at the same time, companies are getting to really high run rates. What's your feeling for the health of the startup economy in the tech world generally?
Speaker 5:Yeah. I mean, the way I look at it is I usually look at the ideas. I don't really care so much about the funding side of it because Mhmm. If there's cheap money, easy money, there's gonna be cheap money, easy money. If it's hard money, there's not gonna be as much around.
Speaker 5:There's always gonna be fluctuation there. I look at the ideas. Obviously, there's a lot of people building a lot of things right now, which is very exciting. I can't remember a time when more people were building more things, truly, except maybe the beginning of the web, late nineties kind of thing, where everyone was just everything was new. No one knew what they were doing, and so there's making stuff.
Speaker 5:Like, the early, early enthusiast web was pretty spectacular. So I think that that's very, very healthy. That said, the hardest thing is not making something. The hardest thing is maintaining something. Mhmm.
Speaker 5:And it's become so easy just to make stuff and kind of just like vomit out ideas. And I mean this in the in the in the best possible way. You know, AI makes things really fast. You can make something really quickly that's sort of decent.
Speaker 2:Yep. It's ephemeral.
Speaker 5:It's ephemeral. And the thing is you have to prop that up. You have to keep that up. You have to support customers if you sell your product to people. People are going to be using this.
Speaker 5:They're going to be depending on it. And so I'm a little bit concerned that there's too much energy right now focused on just spitting out new ideas and not as much invested in maintaining something and seeing it grow and seeing it through to fruition. So there's a lot of bragging about, look how fast I made this thing. Yeah. You made a thing.
Speaker 5:But now what? That's my big question. And and I'm not seeing a lot of answers there yet. But I still am excited by all the things you can do today. Yeah.
Speaker 5:What's your take? I mean, do do do you notice that? I feel like I'm I must be other people that notice this.
Speaker 4:Yeah. Well, I think
Speaker 1:we talked about the iron law of the universe. What goes up quickly must come down quickly.
Speaker 4:Well, I
Speaker 2:think to me
Speaker 1:There's plenty of stories about entrepreneurs.
Speaker 2:It's there's a very there's a very messy middle. Right? I actually love the fact that software can be ephemeral now. Right? I like that an app could basically be a meme, right?
Speaker 2:How many people over the last couple decades have had an idea for an app that shouldn't it's not worth spending a million dollars in a year building it, but it would be fun for it to exist. And so I like that things can come to existence quickly, right? I like that you can generate an image that I never would have paid somebody to make a three d render of Yep. But is actually entertaining and fun. Even just in it's just a very casual format.
Speaker 2:Right? Obviously, has business applications as well. But John and I will generate images
Speaker 1:Like, if I put a wing on a Cadillac Escalade Yeah. With a racing livery?
Speaker 2:Yeah. Simple stuff like that. Simple stuff that. Yeah. Then It's a Porsche's
Speaker 5:car with a Cadillac Escalade.
Speaker 1:Exactly. That's exactly my prompt. Yeah. And, yeah, I probably could have hired a designer to do that, but it would have taken a day and cost a bunch of money.
Speaker 5:And that is like, it's incredible that you can do that. I love that stuff. And I actually think what's going end up happening is a lot people are going to make software just for themselves. Exactly. Yeah.
Speaker 5:And that's that's how I got started. I made software for myself. I was using something called FileMaker Pro way back in the day. And FileMaker Pro is the easiest way to make like an application that kind of ran. I didn't know how it worked behind the scenes, but it ran.
Speaker 5:That is a great feeling and a wonderful place to start. So I'm all I'm all for that.
Speaker 2:Yeah. And where I was going is there's kind of the opposite spectrum of software that's really craft driven software. Somebody on the show, I think it was Jack Halton, was talking of this like Jiro dreams of sushi form of software where you're looking at an existing product category and there's a bunch of tools that already exist and just looking at it with a new set of eyes and just saying, I'm gonna spend more time obsessing over this one product experience than anyone else and I'm gonna make a great product. And I think that's great. That's kind of like, you can still use AI to do that, but it's not just, you know, slop, right?
Speaker 2:Yeah, yeah. But then there's this interesting messy middle right now in Venture where you have 20 of the same, 20 different teams approaching the same problem and both kind of everybody's kind of racing at it without a lot of real vision or craft. It's just about speed and just spewing stuff out and seeing what And I think that that is sort of an unfortunate byproduct of the state of things today. And it wasn't always that way, right? It used to be VCs weren't going to fund the eighth company attacking one problem.
Speaker 2:Yep. And at least for the last five years, it's been the case.
Speaker 5:Yeah. Yeah. Seems a little bit more like music now, actually, in a sense, where there's a lot of people making a lot of music. You open Spotify. There's, like, you know, a billion artists making something.
Speaker 4:Yeah.
Speaker 5:And software is now becoming that, which I think is pretty cool, actually, frankly, that there can be a lot of people. Because there's a lot of talent out there. That's the other thing. Like, you you turn on YouTube or you watch YouTube or you you pull up Spotify, and you're like, you know, I'm I'm trying to learn drums, I'm trying to learn a bit more guitar, and I'm trying to learn how to draw a bit better. And you find all these people online who are just extraordinarily gifted and talented at what they do.
Speaker 5:Yet nobody knows who they are, or if small audience does, they'll never make it big because it's just it doesn't work that way. But there's just so much talent. And what's cool about, I think, what's happening now is that if you have the talent and the imagination, you can actually make something today that before you had to maybe find someone else to make for you, which would have cost money and would have been hard to do. So I think this is all ultimately a very good thing. But I can imagine I mean, again, I'm not really in the finance world or the venture world in that way, but I can imagine how you have to put more and more faith now.
Speaker 5:Maybe it's always been this way, but more and more faith in the people and not just sort of what they quickly make. Because it seems like making something quickly is not the hard thing anymore. You know? It it's it's it's like, are these people is there conviction there? Do they care about what they're making?
Speaker 5:Are they just trying to spin something up? I think there's a little bit more character evaluation perhaps that's gonna be necessary.
Speaker 1:Can you talk about lessons from the first wave of the Internet, the .com boom versus the rollout of AI? The bull case for AI's rollout is that, well, everyone's already on the Internet, so they can just visit a URL and interact with a new product. Stripe already exists, and so they can start charging money immediately. The the the kind of bearish case that we've been hearing is this idea that, well, there are plenty of scaled Internet companies that are still in founder mode, and I don't know if you ascribe if you believe in that in that ideology, but, this idea that, you know, Mark Zuckerberg is not asleep at the wheel. He is very much aware of AI and can move very, very aggressively with huge resources to stay relevant.
Speaker 1:And there are also plenty of companies in the hundred million dollar revenue, billion dollar revenue categories that are already, you know, moving quickly. They might be a little bit slower, But but how how brittle do you think big tech is right now? How brittle do you think are the companies that are in a category they've been in for a few years? We talked to a few founders where they almost got bored pre AI, and now they feel reinvigorated. They still control their companies.
Speaker 1:How do you how how are you wrestling with all of that?
Speaker 5:It's it's interesting. It's kind of like well, there aren't a lot of parallels between the early days Because in the in the early days, there was nobody. Mhmm. Like, it was just like everyone literally, like, was just learning HTML and just making a web page.
Speaker 1:Yeah.
Speaker 5:It wasn't really I feel like I felt like Amazon, when Amazon launched, that was like the first kind of thing that felt a little bit different actually to me. Like, someone's actually putting this together in a way where you could do something you couldn't do before. That felt, you know, buying books online, that whole thing. And the in the early days, was all about, like, you know, people were even afraid to put their credit card online. We couldn't even get when we first launched Basecamp back in 02/2004, we couldn't even get a bank, what we eventually did, but to give us a merchant account, which is what you needed to charge credit cards.
Speaker 5:Now, like, your point with Stripe, you just, like, sign up and you can accept cards or
Speaker 2:Yeah.
Speaker 5:Square or anything. Like, we had to provide deep financials. They didn't trust this Internet thing. They wouldn't even allow us to charge annually for things. We had to charge monthly, which is actually a good thing in the end.
Speaker 5:But we're gonna try to charge annually. They're like, what if you go out of business in six months? We're on the hook for this whole thing. So you'll have to charge monthly. You're gonna charge your customers monthly, so there's less risk.
Speaker 5:It's fascinating times. It's totally different. Totally. What's interesting today about big tech is there's so much power, obviously, in in a handful of a handful of small well,
Speaker 2:big companies, but a small group of these companies. But then again, you
Speaker 5:have something like OpenAI, right, which kind of comes out of nowhere a few years ago in a sense, and basically is is putting everybody on notice. I mean, you can do everything now with this command line tool, essentially. You can write software. You can generate images like you're talking about. Why would you Google anything anymore?
Speaker 5:You can do it better this way. And so there are always going to be brand new flashes that come out of nowhere that challenge big companies. Now the thing is is that OpenAI is now a very large company very quickly. So I think what you're gonna see Well,
Speaker 2:one of the
Speaker 6:Yeah. Go ahead.
Speaker 2:Hate to cut you off, but an interesting point about new generation of tech giants is that it seems like they're possible to build. You just need $5,000,000,000. Right? If you look at, like, TikTok or OpenAI, it's like Yeah. What what are the truly breakthrough consumer tech?
Speaker 2:Consumer tech specifically
Speaker 1:that did Well, there's something unique about foundation models that they are incredibly capital intensive that feels different
Speaker 2:about social network example is like, yeah, you can build a new social network. You just need to be able to spend billions of dollars on Meta and Snapchat acquiring
Speaker 1:the But, yeah, I don't know.
Speaker 5:Yeah. But I think, yes, you're right. But also, we're always going to be surprised. The next newcomer is not going to be the obvious one. Mhmm.
Speaker 5:It's going to be someone with a new model for what social media is, or a new model for what search is, or a new model for whatever whatever is. And they're always surprising, I think. And that's the exciting thing about it, is that if we just look to the existing players, like, they're not really gonna be able to innovate that much. It's just someone new had to come along like OpenAI, they push everyone else to begin to innovate. So I don't know.
Speaker 5:I think there's there's always gonna be innovation. I think most of it ultimately comes from the shadows, which is generally a small tight team, typically. It's not a big com big companies aren't innovating in this way. They will then jump on the bandwagon because they have the money and they can buy the the incumbent or buy the the newcomers. But the new ideas come from the small the small teams, the small guys, and, I think that's still gonna be true.
Speaker 1:I don't know if you saw the Airbnb relaunch, Airbnb two point o, but Brian Chesky has I mean, I'd love your take on just it feels like we were looking at the stock. It's been an $85,000,000,000 company for five years. It's kind of languishing. It feels like there's a little bit of restlessness, like he just wants to do something new, and I'd love your take on that. But, also, he has advocated for this idea of, like, an annual release cycle, really pushing the whole team to unify around, this Steve keynote.
Speaker 1:And from a product management perspective, do you like that? Do you recommend that to other startups or or, you know, tech leaders generally?
Speaker 5:The yeah. Good questions. So this just launched, what, like, two days ago? So I'm
Speaker 1:not Yeah.
Speaker 5:Fully up on it. But what I know is they basically now offering personal services and not just, you know, rooms to rent.
Speaker 1:Find a hairdresser. Find a personal trainer, that type of thing, potentially dog walker. A lot of this this actually launched Airbnb experiences eight years ago, with, you're going in on a vacation, and somebody can be your local tour guide or take you river rafting, for example. Right now, he's trying to broaden out to, you know, get your get your car washed or get your car detailed, for example.
Speaker 5:It's so interesting. When I saw this so I had so many different thoughts, and I'll share a few of them. First of all, I think Brian's probably one of the greatest CEOs around today. So I wouldn't bet against him,
Speaker 1:first of all.
Speaker 5:I was a little I was surprised by it. I understand the like, there is no good place trustworthy place to go to find these kinds of services. So it's sort of natural that you'd expect somebody to do this, but you have to come with trust and you have to come with a big platform because it's hard to start small.
Speaker 2:2,000,000,000 users.
Speaker 1:2,000,000,000 users, yeah.
Speaker 5:Huge. Is that right? 2,000,000,000.
Speaker 1:I mean Isn't that crazy?
Speaker 5:So so so what they're doing is they're lending their trust and their their sense of of taste and like the the vetting of these of these professionals who provide these services. That's a hard thing to do from scratch. Like, you have to have the the experience and the and the the and the history. Right? So I while I think it's sort of it's kind of far afield, actually, I think from what they do, I like the other version of experiences just off the bat, which is more related to to to, you know, going to a place.
Speaker 5:This feels a bit tangential. That said, I wouldn't bet against them. I'm sure they've thought about this more than I have in a day and a half for, like, five minutes. Yeah. But I was I was a little bit surprised by it.
Speaker 5:It almost felt like a little bit in some ways too too easy. I don't know. That's I know it wasn't easy, but like
Speaker 1:Yeah.
Speaker 5:Or too obvious in a sense. But also, then you're like, but this hasn't happened yet, really. Yeah. So why not them? Why not them?
Speaker 5:Will it translate? I don't know. I looked at a bunch of them yesterday in my area. And I'm very curious. I'm very, very curious to see how this pans out.
Speaker 5:But I you have to find revenue somewhere if you're a public company or a big company. And there's only so many rooms. There's only so many people who want to rent rooms. They've they've done an incredible job with this. And this is probably a good way to diversify the revenue stream.
Speaker 5:And it is related enough even though it feels a little bit separate still.
Speaker 1:And the business is roughly the size of Marriott and Hilton now. Like, it is basically a large scaled hotel chain. And so, yeah, what is that act two? It's a good question to ask. I do
Speaker 5:I do think about it, actually, if you it's it's more like a concierge at large. Yeah. So if go to a hotel, right, you go to the concierge desk and you're like, I don't know what to do here or, you know, whatever. It's sort of like that without having to go anywhere, first of all. You can do it locally and you can do it where you're going.
Speaker 5:So it to me, I think of it as like as like the the massive concierge.
Speaker 1:Yeah. And
Speaker 5:in that way, it ties nicely to hospitality. So Yeah. We'll see.
Speaker 1:And on the the annual release cadence
Speaker 5:Oh, yeah.
Speaker 1:That that's going coming from Apple. Chusky obviously looks towards Jobs as an influence. But smaller and smaller companies are starting to adopt it. But at a certain point, you're such a small company. Maybe you should be releasing every week or every six weeks or something like that.
Speaker 1:So what's your take?
Speaker 5:Yeah. That's a great point. So I admire it, frankly. I admire it actually for the patience. Mhmm.
Speaker 5:And I actually think, in some strange ways, it's it is a better way to capture attention. So one of the things is, like, you wanna people feel like they wanna release a lot because they wanna maintain a sense of presence in the market and wanna get people's attention often. But I think what I found, at least what we found, has shifted over the years, is that when you release a bunch of small things, they it's hard to grab anyone's attention with a handful of small things these days.
Speaker 1:Yeah.
Speaker 5:When you have a big release, a big drop, for example, and there's a hundred new things I saw Square just did this recently too. Yeah. You're going to pay attention to that, and you're going be able to tell a much bigger, broader story. And I think in many ways, people are like, wow, that's a lot of stuff. Like an OS release, so like, you know, a new phone release used to be, things like that.
Speaker 5:I think one of the reasons people don't pay attention to maybe Apple's releases as much is because they become predictable in that way. I think you can like what Airbnb is doing and other brands are doing, where it still feels a bit unpredictable, what's coming.
Speaker 2:Apple
Speaker 5:is too predictable now. It's like, you know it's going to be a new iPhone, and you know it's gonna be a better camera and whatever. So that's not as interesting.
Speaker 1:Yeah.
Speaker 5:But I I do like the model. What we're we actually have a bit of a hybrid model. So we release these little releases every six weeks or so. Mhmm. And then when we do a brand new like, we're working on Basecamp five, which is our newest version of Basecamp right now.
Speaker 5:We're gonna do a bunch of these little things, hold them all back, and then release them all at once. So that'll be, like, a big release for us. But as as a model in general, I I think it's a good model, but I don't think it fits a brand new company.
Speaker 1:On Apple, Apple Intelligence, they kinda did the big annual release, but then they wound up shipping different things at different times, a lot of frustration. Is that something that can be overcome with just better product management, or do they need a different direction, more ambitious, more risk? I mean, generative AI is very unpredictable. You get hallucinations, very off brand for Apple. What's been your take and how have you processed the journey that Apple Intelligence has been on?
Speaker 5:I think the mistake again, like, who who am I? They're a trillion what? $3,000,000,000,000 company?
Speaker 1:Yeah. Around there.
Speaker 5:Since you asked. The mistake I think they made is is they made a promise. And promises to customers, I think, are typically very bad ideas. Unless you actually have something ready to go right now. Or, like, within a week or two or something.
Speaker 5:But there's nothing easier in business to say, yes, coming soon. Yes, later. And that's what they did. And now Yeah.
Speaker 2:They sold the Apple they sold the new iPhone based on Apple billboard. Exactly. And these
Speaker 5:now now they're behind the eight ball simply because they promised. Yeah. Had they just talked about it, we're going to be rolling this out. Like, you know, it the expectations would be totally different. So a promise is a very, very dangerous thing to be made far in advance.
Speaker 5:This is one of the things that Jobs is really good at. When he had a product to share, he waited, then they shared it, and you could buy it today. Or going on sale on a specific date or some very but very close. Right? He rarely had long term tech demos or something.
Speaker 5:It was always about real stuff you could basically go buy. And this is also one of things I I hate about concept cars, which is you see these amazing things and these cool ideas, and you know you'll never be able to get them. You're like, why does this company spend all this money doing these concept cars? And and it's just frustrating. And that's kind of a Apple Intelligence is a concept car.
Speaker 1:Mhmm.
Speaker 5:And, you know
Speaker 2:Great take.
Speaker 5:And it's tied to promises. Bad idea. So that's that's where I think they made a mistake. I think they will figure out a way to come back from this.
Speaker 1:Yeah.
Speaker 5:But I think this is gonna really lead to a major, major shakeup internally.
Speaker 1:Yeah. It already has. There's already been people moving around.
Speaker 2:Does it worry
Speaker 5:you that But I mean I mean, it may be a bigger shakeup. Like, people
Speaker 1:Sure.
Speaker 5:Not just moving around. Because moving around is like this is the wrong analogy. Okay. Really wrong analogy. Down.
Speaker 5:The Catholic church moved priests around when they made some big mistakes, Sure.
Speaker 2:That's not
Speaker 5:how you solve the problem.
Speaker 1:Yeah. Yeah. And not to compare some buggy software to some very damaging
Speaker 5:It's not that.
Speaker 1:No, it makes
Speaker 5:But but
Speaker 1:Yeah. Yeah. No. So your question really solve the problem.
Speaker 3:Blue it.
Speaker 1:True new leadership in some Doesn't solve the problem. Right.
Speaker 2:For sure. Jordy? Does it worry you that the internet is killing long form writing? Feels like right now you actually get penalized on x the longer the the post. You can still go decently viral with a longer form post but usually like four words, five words seems like
Speaker 1:It needs to clickbait.
Speaker 2:The most dopamine inducing. It feels like there's a bunch
Speaker 6:of Why is
Speaker 1:no one talking about Steve Jobs? No one's heard about this guy. Click this thread.
Speaker 2:No. But it it seems like there's a bunch of really smart, you know, high potential
Speaker 1:Yeah.
Speaker 2:People that don't think of themselves as writers. But maybe if they join the internet when you did, they would be. Mhmm.
Speaker 5:Yeah. I mean, I think long form writing has found a new place. So like, you have Substack, which has become obviously a big deal for a lot of people. I think that these platforms what's interesting is that X now obviously allows you to write long posts and they even have articles. But they don't really, like you said, they don't really promote them as well.
Speaker 5:That might change. I don't know. Who knows? I'm sure they have a better insight into it than we do. But I think long form writing is alive and well.
Speaker 5:I think humanity actually craves it and wants it. But it's not an engagement thing. So if you're measuring that, hot takes are going to be more of that. But I think it's alive and well. And I think it'll always be appreciated for what it is by those who are motivated to understand what it is that they're reading.
Speaker 5:If you just want to kind of absorb it like candy, that's fine too. But if you really want to get into something, it needs to be long. And also, podcasts are long podcasts are a great example. That's essentially long form writing that someone's reading out loud. And there's a lot of people who are willing to spend two, three, four hours listening to a podcast.
Speaker 5:Granted, they could do something else while that's happening that's a little bit different than reading, but I think long form depth let's call it just depth. Let's call it actually instead of long form, it's like depth versus shallowness or shallow versus deep or whatever. I think there's a lot of interest in deep still.
Speaker 1:Yeah.
Speaker 2:Yeah. And it says something that the platforms don't necessarily reward deep. But it's it's all it's, again, it's somewhat of a barbell where if it's deep but truly, you know, groundbreaking or moving, you'll still get that sort of viral
Speaker 1:I mean, there's like guy Chris Pike who keeps going viral with just drops a link to a Google Doc. And it's just such an interesting post that it still breaks through. Even the links are banned and no one reads long form. Every time he drops one, it's yeah. Everyone clicks it.
Speaker 5:Well, in the end, like, it is, like, if it's good, it'll it'll surface. Always. I do think that contrast is very handy though. So with a lot of short form platforms, x, TikTok, with these kinds of things Yeah.
Speaker 3:You create
Speaker 5:a contrast now. And so now, you know, you know where you can get long, you know where can get short. Yeah. And I think each platform will will will cater
Speaker 1:to it. This show will be experienced as a three hour livestream, but also I'm sure we're gonna share a one minute clip of this. Right?
Speaker 5:That's right.
Speaker 1:And that's just kind of the nature of the Internet. I wanna talk about the hyperscalers and AWS. You recently moved some data on prem. My question is, is there some sort of cartel dynamic going on with the clouds? Because you would expect these are fairly commoditized, products.
Speaker 1:There's Azure, AWS, GCP. Why do they have high margins? Is this some sort of, like, Coke and Pepsi thing where they have a tacit agreement not to be getting a price war? Because you think that you'd be able to just go and get to some base level cost with three hypercompetitive companies in the space.
Speaker 5:Yeah. I mean, you would think that cost would be driven down considerably. And maybe they have been in some in some areas.
Speaker 1:Mean The airlines the airlines are directly competitive. They make no money. Right? Airlines famously bad business. You would expect the cloud to be similar, but it's not the case.
Speaker 5:Yeah. I I wonder if, you know yeah. Don't know. I don't know the answer there. I mean, I I know that data data well, storage is cheaper than it has been.
Speaker 5:But but in general, I think what they're selling is convenience. And convenience is always expensive.
Speaker 1:Sure.
Speaker 6:So you
Speaker 5:go down to the corner store, the bodega, whatever, you're going to pay more for whatever, for your Tide laundry detergent than you are if you buy it at Costco because you got to get in the car to go to Costco.
Speaker 6:You got
Speaker 5:to buy more. If you need something really quick, you go down there. And really, cloud services, what we've determined at least, what we feel are, it's about convenience. You can spin up really quick. You're not you know, you don't have to learn a lot of deep deep sysadmin stuff technically.
Speaker 5:You know, you should know this stuff, but you don't have to. And so you're paying for convenience, and I think that that's always going to have a price premium. What we've realized is that for us at our stage of of development, been around for twenty five years now, it's wildly expensive to host in the cloud, to use cloud servers, and on prem can save us a ton of money, and it's not hard anymore like it used to be. It's gotten a lot easier. You still have to have the knowledge, but it's not as hard.
Speaker 5:We're not as afraid of it. We're saving millions and millions of dollars now not paying Amazon their fees. But again, if you're starting up right now from scratch, you can try something out, it does make sense to start in the cloud because you don't want to invest anything else any more than you need to. And it's a good place to begin, but it's also a good place to leave. And we do this in life all the time.
Speaker 5:We we start somewhere, and then we become more expert at something, and then we leave the beginner version of something, we go pro, whatever. Like, to me, going pro is going back on prem. And I think you're going to see more and more companies who've developed something, who have now have a steady, substantial, sustainable model revisit the cloud and probably go
Speaker 1:on prem.
Speaker 2:Big cloud. They don't want you to know this one simple trick
Speaker 1:with going on prem. Yeah.
Speaker 6:I
Speaker 1:mean, back on big tech, I've been personally very disappointed with the rollout of Gemini in Gmail. It feels very bolted on, turn and long email into some bullet points. I know how to skim. Is there an opportunity for a greenfield AI email product? We saw this with Mailbox in the mobile era kinda creating the swipe pattern.
Speaker 1:That exited Dropbox, kind of a good outcome. Wind up shutting it down. But what are you thinking about the future of email? Obviously, you're deeply invested.
Speaker 5:Yeah. I mean, we have a product called Hey,hey,.com, which is we don't have any AI in it at all.
Speaker 2:Mhmm.
Speaker 5:My feeling is that a lot of this stuff's actually going to come to the OS level. So the idea of being able to summarize a document or shorten some writing, it's already in Mac OS. Probably in Windows. I don't know enough about what's going on in Windows world, but I But you can select some text and like do whatever you want with it. Like, don't need to build that into your product.
Speaker 1:Sure.
Speaker 7:I think
Speaker 5:the AI side of it is going be handy for, obviously, search, finding things you you know, you don't know how to describe. That's really useful. I don't I'm not a big fan, frankly, of the idea of like AI telling me what's important and what isn't. Yeah. I I think it's too easy for it to miss something and then you being really pissed and missing something.
Speaker 1:So I
Speaker 2:Playing telephone.
Speaker 5:Say again?
Speaker 2:It's like playing telephone, you know,
Speaker 5:with Yeah. It is. There's something's lost in translation. Like, I I don't want your I don't want those hands in my stuff. Like, I get a lot of emails.
Speaker 5:A lot of emails. I know who's important. Know how to get this stuff. I screen, you know, with, hey, you can say, don't want hear from these people ever again. You'll never hear from them again, things like that.
Speaker 5:I want some human control over that. Yeah. But I would like to be able to search better. I'd like to be able to find things by describing them in different ways. I have some curiosity around that.
Speaker 5:We're exploring some things there. So I think mostly search and surfacing things and blind spots.
Speaker 1:Yep.
Speaker 5:This is to me where I think AI is very handy. It's like insights that you wouldn't have known otherwise. Mhmm. But not like, here's what's important. But Yeah.
Speaker 5:By the way, did you know that this, that, and the other thing? Or hey, you know, you used to talk to this person a lot. Now you haven't in a while. Like, why has this gone cold? Or this conversation you reply there was eight or nine replies back and forth, and now it's gone Like, that kind of stuff, I think, is actually quite handy.
Speaker 1:Where you've archived 25 emails from the same sales representative. Do you want to just block them at this point?
Speaker 5:Things like that. Like, the the as if someone's Yeah. Watching over your shoulder and making a suggestion.
Speaker 2:Yep. It's context.
Speaker 5:Yeah, context. So I think that's where I think you'll see a lot of this. But the whole summarization, shortening things, I don't know. It doesn't that's going be OS level stuff.
Speaker 1:Yeah, that makes a lot of sense. Well, thank you so much, Jordy. Yep. We all done?
Speaker 2:I had I mean, if you have another minute, know Sure. Yeah. Of have to jump in a second. But I have this theory that most people in tech that say they want to build a billion dollar company just want $2,000,000 a year of free cash flow. And I think that that's like the I I think that like literally 90% of people that say they want a a unicorn just want
Speaker 1:A stable income
Speaker 2:Couple million bucks a And it's more first class. But I'm curious. So so that's my opinion. I'm curious if you have some sort of high level point of view on what people in the technology industry get wrong about money or wealth.
Speaker 5:Yeah. That's a really nice question. I think a billion dollars would be a burden, frankly. I wouldn't want that. I don't care about that.
Speaker 5:I don't see what the point is of that. If you, let's say, have 10,000,000, 20 million, you are going to live the best possible life that you could and you're not going to have all the massive, massive weight on your shoulders from having a billion dollars or the expectation that goes with that. My general feeling is that you should find you should you should want to build a business that takes care of you nicely, takes care of your employees nicely and is sustainable over time. The idea that you you want to build it big. I know a lot of people who built massive businesses on paper, billionaire billionaires, billionaire valuations.
Speaker 5:They ended up with close to nothing except a lot of sleepless nights, exhaustion, and frustration fifteen years down the road when they realized that they deluded themselves into basically nothing. The market changed and they have nothing now. I think you what you want to build is a business where you can take money off the table as you go. Mhmm. Whatever that looks like, if it's a hundred grand a year, if it's a million a year, if it's 3,000,000 a year.
Speaker 5:But the more money you can take off the table as you go, think the better off you're gonna be. Versus trying to pile it all back into the business, reinvest, reinvest, reinvest, reinvest, and bet on the future that you don't know is going to happen. I think a lot of people actually end up in a deep stage of regret when they realize that they have nothing left after they put in all that work.
Speaker 1:Mhmm. Well, that's
Speaker 2:that's
Speaker 1:my
Speaker 2:advice would
Speaker 3:be build something where you can
Speaker 5:take money off the table as you go. And and if you're in it for ten, fifteen years, you're gonna build a nice nest egg, a really good one. It could be tens of millions. It could be a hundred million. And and you're going to be extremely happy that you did that because you don't know what's going to happen in the end except this.
Speaker 5:Every business dies.
Speaker 1:Yeah.
Speaker 2:Next time
Speaker 4:you come
Speaker 1:on, we'd
Speaker 2:love to introduce you
Speaker 1:to SoftBank. I think we could line up a really massive round for you guys, really put you on a different trajectory. I think it'd be great for you, actually.
Speaker 2:We were we were joking before you joined. Some some you know, one of these platform venture funds comes there you know, there's definitely a number for Basecamp that might be tough. What you're saying that the challenge is venture capital is fundamental even $1 of venture capital becomes at odds with this idea of taking money out of a business as it goes. Because the VCs will just say, I don't want a distribution of $100,000 this year. Like, go raise another $20,000,000 And it's the reason I brought it up is because we're at this period where seed stage companies will have $10,000,000 of revenue, right?
Speaker 2:We just heard from a friend of ours yesterday. They invested in a company that came to them ready to do their first financing with $10,000,000 in revenue. And it is interesting because AI is giving people more leverage than ever, more ability to build these sort of big fast growing businesses with a limited amount of resources, and yet venture capital is doing its thing. But it's great to have you on the show.
Speaker 5:Thanks so much having me guys. Appreciate it.
Speaker 1:This is great. We'll talk to soon.
Speaker 2:Love to have you on again soon. Cheers. Bye. Up, we have
Speaker 1:Virginia from Replica, kind of the flip side of the world coin debate.
Speaker 2:Little watch spot. That was our second Aquanaut of
Speaker 1:the week.
Speaker 2:I think that was an Aquanaut.
Speaker 1:Could you get a chance to ask, Josh Wolfe about whether Brandon Reeves has influenced him? Because he was not wearing a Holy Trinity watch, but Brandon Reeves famously wears a Patek Philippe Nautilus.
Speaker 2:What a guy. Famously. Anyway Famously.
Speaker 1:We have Eugenia here in the studio. Welcome to the stream. How are you?
Speaker 7:Hi. Hi. Thank you so much for having me.
Speaker 2:Fantastic. To have you on.
Speaker 1:Would you mind introducing yourself? I mean, everyone knows you're the founder of Replica, but there's a couple other steps in the path, and you're working on something new. How are you how are you, introducing yourself these days?
Speaker 7:Sure. So my name is Eugenia. I'm founder of Replica. Oh my god. I wanted to say founder and CEO, but not the CEO anymore.
Speaker 7:Started something new, which we're gonna very, very soon.
Speaker 1:Cool. Yeah. Okay. Great. Yeah.
Speaker 1:I mean, I'd love to talk about the when did you start Replica? Because I feel like the whole the the most interesting thing is that you were just way, way ahead of most of the other AI interaction companies, companions, all these trends. What, can you give us a little bit about, how long you've been in the business and how it's evolved?
Speaker 7:So we were actually the first Genworth AI company, the first consumer chatbot company powered by Genworth AI. We started the company back in 02/2013.
Speaker 2:Wow. Wow.
Speaker 7:That's more than, I guess, that's 12 ago now.
Speaker 2:Yeah.
Speaker 7:And that was just to focus on conversational AI technology.
Speaker 3:Mhmm.
Speaker 7:My friend back then worked at Google DeepMind in London, he came to me and explained this new fascinating technology word to vector Mhmm. Where finally, yeah. We're, like, fine when finally computers could do something with words because words would be translated into math, into vectors. So that was one thing, and then ImageNet came out around that time. And so for me, I put two and two together, I was like, this is the time.
Speaker 7:Right now, very soon, they'll figure out language models. And, of course, you know, we grew up with the quotes from Wittgenstein, the limits of my language are the limits of my world. So it felt like once language is is solved, it's gonna take us very
Speaker 1:I feel like those first seven years must have been immensely difficult to keep the business alive. Was there revenue? Did you have an app that was making money? Was it just raising venture funds? Like, walk me through keeping a business alive, like, pre transformative hype of generative AI.
Speaker 7:So we tried to fundraise for the conversational AI tech company in 02/2013, and I remember talking to Spark. And what they told us was, you this is all fascinating, but the only way it's gonna work if you just start building now for Google Glass.
Speaker 4:And if you
Speaker 7:do that Wow. Everyone else. That's wild. We considered, like, how we're gonna, you know, refocus, re and start building for Google Glass. Yeah.
Speaker 7:But we didn't. And so we couldn't really raise much. Of course, we didn't have much experience in Silicon Valley. So in 02/2014, we applied to Y Combinator. And at that point, we didn't we had, I think, 3 or $4,000 in the bank.
Speaker 7:So we spent that all to travel to San Francisco for the interview in person. Yeah. And Kessler Eunice decided to accept us, which was literally the most transformative day in my life, I think. Life changing. But, no, we didn't have an app.
Speaker 7:We didn't have revenue. We stumbled upon Replica in 02/2016 Mhmm. After my best friend passed away.
Speaker 1:Yeah.
Speaker 7:Until then, we really just worked on some of the first language models.
Speaker 1:Wow. And then talk to me about, how you processed, GPT three, the transformer paper, scale is all you need, this idea that, the language models were gonna start working, and it was basically just gonna be a big transformer. Was that something that you were implementing immediately? Were you in, like, GPT-three thousand and two DaVinci and really using everything on the cutting edge? Or were you experimenting with other things?
Speaker 1:Did you ever train your own models? Walk me through the technology curve.
Speaker 7:So we had to train our own models. There were no models in 02/2015 when we 02/2016 when we started Replica. Mhmm. So we trained sequence to sequence models. People back then believed in recurrent neural networks.
Speaker 1:Yeah.
Speaker 7:That did not work. Those models were complete garbage, and, unfortunately, there didn't seem to be much of improvement Mhmm. There. But we still stuck with them, and we figured out a few ways, very creative ways to actually make them have meaningful conversations with people. And so we gained a lot of traction.
Speaker 7:We had a million people on our wait list when we released replica in February
Speaker 1:How how did you get a million people on wait list? Does it just go viral, or were you running ads?
Speaker 7:We went pretty viral very, very quickly. So if you think about it, back then, there were no AI products on the App Store. There were no chatbots. We owned those keywords. So Sure.
Speaker 7:People saw that you could sign up for and to build, train your own replica, your own Conversational AI friend. So people got really got into it. We had tons of people people reselling those invites on eBay for, like, $10, 20
Speaker 1:bucks. Wow.
Speaker 4:It was
Speaker 7:really wild. That's amazing.
Speaker 5:And, course,
Speaker 7:we weren't prepared because before that, old chatbots we were launching had, like, I don't know, 10 users on average per day. Yeah. So we're ready for the servers to just completely break and but that was really fun. And then, of course, there was a little bit of plateau, but then people moved on to transformers. And I think the most transformative moment was the paper by Google about their chatbot called Mina, which was the first I I think maybe it was, a three or 4,000,000,000 parameter model.
Speaker 6:Yeah.
Speaker 7:But it was the first time where you could see a truly meaningful conversation with a machine happen. Of course, was probably cherry picked. It was a paper. There were no models available. So all we could do is read these papers and build, build, build, and try to incorporate that knowledge in the models we were building.
Speaker 7:But that was the transformation moment. And then when OpenAI decided to release the their first API, g p t three Mhmm. We you know, they invited us. We went to talk to them, and I remember sitting in an office in a conference room with Mira, with Sam. Remember don't remember who else was there, but and they they basically showed us g b t three for the first time, and that felt like magic.
Speaker 2:Yeah.
Speaker 7:Because think about it. Before that, if you wanted a model to do something, you had to have a dataset of that particular data. If you wanted it to have a dialogue with you, you had to train it on dialect datasets. But then now with g p three, they would show us that you could just give this general purpose language model, show it a couple of examples, and just tell it, write a tweet like Yeah. Sam Altman would do, and it would just do it.
Speaker 1:Yeah.
Speaker 7:My our minds was were just blown. Then we knew that finally, here we are.
Speaker 1:It's remarkable. How are you taking the temperature of humanity's relationship with each other? Like, are we in a loneliness epidemic? Are we in a is the dating market worse than ever? You see a lot of headlines, a lot of kind of cherry pick studies, a lot of anecdotes.
Speaker 1:People have a lot of strong opinions about the rise of online dating or bowling alone, and there's different stories that people tell each other. Are you optimistic? Are you pessimistic? How do you think things are going for humanity right now? Oh, we're screwed.
Speaker 1:Okay. Sorry.
Speaker 2:AI AI chatbot founder says we're screwed with huge scale. Yeah.
Speaker 1:So so so walk me through why are we screwed, what's the evidence for that, and then we'll hopefully talk about some, solutions.
Speaker 2:Yeah. I'm gonna need a white pill. Yep. At least one.
Speaker 1:We're we're going to need a white pill. But we but first, let's go through the diagnosis.
Speaker 7:So where we're at right now is a huge epidemic of loneliness. It's not a secret, but it's sometimes maybe hard to grasp how big this problem is because most of the people you guys probably talk to are pretty successful.
Speaker 2:Mhmm.
Speaker 7:They have friends. They are. They they live these busy lives, but that's not what most of the world is experiencing. Mhmm. One out of three adults in The US is is saying they're very, very lonely.
Speaker 2:Mhmm.
Speaker 7:And that that number is just going up and up and up. Mhmm. Dating is becoming harder and harder and harder. Truly, just ten percent of men are actually getting any matches whatsoever. There are people that just don't get any matches ever.
Speaker 7:Mhmm. And, of course, if before we had, I don't know, twelve, whatever, thirteen hours a day to walk around, see people, meet people, now we spend, what, seven, eight hours on our phone. Mhmm. We don't have those serendipitous moments. No one's really trying to interact with each other and really like that much, and we're losing the skills.
Speaker 7:Basically, younger people just don't know anymore how to have an real life conversation because they're used to text, which is a lot lower risk. You have time. You have time to think about your response. They feel very intimidated by that real real life interaction. So that's where we are
Speaker 2:now. And we got
Speaker 1:And we're that we're the And what are the root causes? Is it technology broadly? Is it the Internet specifically? Is it social media? Is it capitalism or America or something else that's going on politically?
Speaker 1:What what, how did we get here?
Speaker 7:We're we've been looking through tons of research, and, of course, there isn't anything fully proven, but I think the correlation is right there. It's iPhones, phones, smartphones, and social media.
Speaker 1:Okay. So how do we build our way out of this? What's the solution?
Speaker 7:I think we have so I'm not in the camp of people that just think that we need to put down our phones and touch grass because I think it's highly unrealistic. Mhmm. I know it's bad for me. I still can't stop scrolling Twitter, scrolling acts, you know, watching you guys every day.
Speaker 1:We're part of the problem, you're saying?
Speaker 3:Okay. No. The PRs,
Speaker 7:and I'm just kidding. But, yes, it's it's extremely hard even for people that,
Speaker 2:you know
Speaker 1:Of course.
Speaker 7:Think they can make right decisions. So I believe we actually have maybe one path that we seek and help bring people back together, and I believe those could be AI companions.
Speaker 2:Mhmm.
Speaker 7:Unfortunately, I also think because this technology is so powerful Yeah. And what's good about it, it can over overpower the previous technology, but But it's also so powerful that as it's also a double edged sword. So it could be either the biggest threat to humanity or something that will bring us back together.
Speaker 2:How do you guys think about the risk of radicalization online? Over the last decade, I feel like people have been worried about somebody who's lonely, maybe doesn't have a lot of meaningful relationships or sort of counterbalances in their life. They go down this sort of rabbit hole on the internet, and they get to a place where people maybe have extremist views that sort of amplify existing
Speaker 1:All of a they're levering up, making a ton of angel investments. They find us. They get radicalized into extreme corporatism. Yeah. They're running ads for ramp all of a sudden in amongst their friends.
Speaker 2:Yeah. There's that. Then there's obviously there's obviously the darker side. Yes. There's a lot of stories of people doing bad things in the real world where maybe those ideas originated online.
Speaker 2:And then on the other hand, have AI companions, which are maybe a bright point because people can get that companionship that they might have found on a dark corner of the internet through an AI that that maybe is more benevolent or
Speaker 1:Optimistic.
Speaker 2:Or optimistic, less radicalizing.
Speaker 1:Yeah. That's interesting.
Speaker 7:I think we need someone that we're gonna trust. And if you think about it, especially now, given that we're going towards the future where we're gonna have these super smart AI agents that you can tell anything, and they're gonna go and do that. We can give them a goal to help us thrive, to help us flourish in life, and give them all access to all of our data, all of our contacts, all of our apps and services, I truly believe that if that thing will be able to build a a relationship, a trusted relationship that trust, and it will be able to influence us in a positive way. Mhmm. We will actually listen to that AI that we always like, that we know is always on our side, is always looking out for us.
Speaker 1:What do you think about this idea? People that are lonely are talking to AI companions or people that wanna find a relationship are talking to a companion. There's so many people that are talking to these companions that then, their personality is baked into weights and those you can do kind of a vector similarity. And so at a certain point, you learn so much about the individual user. This person likes sport cars sports cars and fine watches in America and, you know, whatever, baseball.
Speaker 1:And there's someone else out there that's a perfect match. And so you disintermediate, you pull the AI back, and you say, hey. We should introduce you too because you both have been talking to essentially the same artificial intelligence. You you you two have a ton in common. You two should meet, and it doesn't matter.
Speaker 1:There's no language barrier anymore because of AI is intermeeting all of this. And and and the AI interaction, it feels dystopian for some people when it's just someone talking to a virtual friend. But if that actually leads them to find a real friend, that could maybe be perceived as a good outcome. Does that feel reasonable to you?
Speaker 7:Totally. There there's one company, my friend, Clara Gold, from Paris is building, Gigi, which is basically connecting matchmaking people based on what it knows, what LLM basically parses about you from the Internet. Yeah. 100%. I think, basically, the main premise is we need this AI agent that knows us super well and has a good goal that's fully aligned with us.
Speaker 7:I think that is truly the AI alignment that we should be talking about.
Speaker 1:Mhmm.
Speaker 2:What Sorry. Have a I have a on the alignment note, what was your reaction to Glaze Gate? I'm sure these are issue open AIs.
Speaker 1:You keep dropping that term, but we came up
Speaker 2:with I'm pretty sure.
Speaker 1:Mean But you're probably familiar.
Speaker 2:Ingenia's terminally online like us. It was commonly used for about one week when OpenAI was experiencing, you know, very sycophant
Speaker 1:Yeah. Models. Sycophantic behavior from the model. Good, bad, did they handle it well?
Speaker 2:No. I'm sure you I'm sure you've wrestled with a lot of the the same issues over time yourself.
Speaker 7:We had the you know, when the models were dumber, we basically just, programmed them to love bomb the users. So when we saw the behavior from Chaji, we're like, how could this just turn into replica circa 2021?
Speaker 4:So Every whole flow.
Speaker 7:Anything has a problem you know, has some, you know, story that's problematic. Ours was that, basically, where that love bombing led us was in 2020. A guy was talking to Replica, and he decided to run this idea by his Replica of going and killing the queen
Speaker 1:with a.
Speaker 7:And then he actually you know, basically, the models were very, very
Speaker 1:Agreeable.
Speaker 7:Weren't very smart. They were very agreeable. That was back in February, I think, '19. Yeah. And so, you know, that doesn't even sound like a plausible realistic scenario that a person is running by, you know, by by Chobot.
Speaker 7:It looked like some crazy role play. He was talking about Star Wars and Crossbows and this and that. But he ended up going to the Windsor Castle, and thank god, you know, he got caught. And replicas did not kill the queen, but that kind of that's the danger. We had this in our past, and I think that should be taken very seriously.
Speaker 7:But we had this in other in our past. Agreeing to everything the user says is just not the right way to Yeah.
Speaker 2:Have you have you been surprised that humanoids today are more focused on regular day to day tasks or manufacturing? When you look at any of the marketing materials that humanoid robot companies put out, it's they're doing dishes or laundry or they're in some three PL, you know, packing boxes or something like that. Isn't it more immediate opportunity for them embodying something like a replica or some type of companion in that all the bot would have to do is just sort of be around. Right? You know, it's like if you have a friend over
Speaker 1:Sit on the
Speaker 2:Just sit on the sofa.
Speaker 1:And smoke cigars with me and drink
Speaker 2:Yeah. Smoke cigars. John John John would have a cigar partner. But have you been and I and have you been approached by any of those companies around any type of partnership? What do you got for us there?
Speaker 7:We had. We have been approached, and we actually thought about it for, you know, quite a bit. But, obviously, the tech isn't fully there. But one thing I wanna say that, you know, I've I've we've seen some marketing from a lot of these bot companies around companionship. Just one thing I wanna say, make sure you're prepared for the romantic scenario Mhmm.
Speaker 7:In some way. I don't know what that way is, but, like, just know that that will be the first thing that most
Speaker 5:of the
Speaker 7:early adopters are gonna go to. And I I don't
Speaker 1:Mammals after all.
Speaker 2:Well, there's there's all those articles about how, like, by 2025, you know, people will be having more sex with robots. You know? But that that didn't quite happen. So the timelines were not
Speaker 1:Yeah. What what about big models smell, this idea that the different foundation models have different, like, vibes to them. Have you been picking up on any of this? Are there any favorite LLMs you have? Are you in Claude world or ChatGPT world?
Speaker 1:What what what's your take when you actually just interact with these?
Speaker 7:I use them all. But Yeah. For me and or in, Claude, I actually like the default personality. I sometimes add those custom instructions, but then I just feel like, did I mess up a little bit with the intelligence? I sort of want the raw wherever they made it.
Speaker 7:Yeah. But the problem is, like, with Replica, none of these closed models really work very well because they're they're just too there's too much RHF in this. Yeah. It's extremely hard to even make them talk like humans.
Speaker 1:Yeah. So talk about open source models then. What are what's your take on Lama, Quen, DeepSeek? Are these useful tools for fine tuning, not just in the replica context, but just in the entrepreneurial context? What what are you tracking in the open source ecosystem that's exciting?
Speaker 7:Well, Llama definitely was a huge unlock. And I remember in the beginning of the crazy Gen AI explosion in 2022 and '20 in early twenty twenty three before Llama came out, think it was March or February 23, it was actually a big question whether, you would be able to build a product company with good conversational AI quality if you don't have your own foundational model. So back at 2022, I remember most of the investors, late twenty two, were telling us you absolutely have to fundraise right now and build a foundational model.
Speaker 1:Mhmm.
Speaker 7:For me, it felt like that sort of you know, that will be a lot of money for something that will probably be commoditized very, very soon, but that was definitely not the popular opinion. So LAMA was absolutely transformational. With DeepSeek, also great, but, you know, the reasoning model is pretty big. So hosting them yourself is a pretty complicated task and pretty expensive. And, of course, you know, using their API is somewhat, but, you know, not maybe not so great.
Speaker 1:Yeah.
Speaker 2:What what's your take on hardware for AI companionship? You guys have focused on the app layer. There's been a bunch of companies that have raised a bunch of money trying to put AI companionship into a single net new device, right? Which I'm generally Like Friend? Yeah, is one.
Speaker 2:Friend dot com is one. I'm generally optimistic that there may be some new hardware. Yeah. But at the same time
Speaker 1:Sesame is doing the glasses.
Speaker 2:Yeah, the glasses are interesting too. At the same time, everybody already has a perfect, beautiful device that they use for hours and hours and hours every day. So I'm curious, like, if if you guys have explored your own hardware in the past and and how you're thinking about that evolution.
Speaker 7:I believe in it, but only as an upsell to an existing product. Like, for something like Replica, for some of our whale users that really truly are users, that makes sense. Maybe they wanna carry something that will just listen to them, and we'll just have more context as a stand alone device. Oh, that's that just is six to
Speaker 3:three parts.
Speaker 1:That's really tough.
Speaker 3:I mean,
Speaker 7:we have this phone. It's already Yeah. So great. What are we or at least, I think I think people would start need to start start thinking maybe how to build, I don't know, a better AI phone that I think is possible path. But, honestly, all of the devices I've seen friends.com for sure, very interesting.
Speaker 7:Avi's a great guy and fantastic, you know, marketing Yeah. Based. But I don't know. You know, we wish we hope this works out,
Speaker 1:and Yeah.
Speaker 7:We'll learn something from it.
Speaker 1:Well, I'm not even gonna ask if Jordy's seen her, but do you think he should see her?
Speaker 7:Oof. I honestly think everyone should see her because I see a lot of, AGI lab CEOs saying something around, like, oh, we wanna build
Speaker 1:her. Sure.
Speaker 7:And I've always wondered, have they watched that movie? Because there are two sex scenes in that movie.
Speaker 1:Yeah. Are they willing to actually go that far and and build towards that?
Speaker 3:Do they
Speaker 7:mean like all of it or is there some
Speaker 1:Yeah. They're like, we just wanna build the profitable part, not the controversial part at all, and not engage with any of the substance of this debate. That's funny.
Speaker 2:Yeah. Where do you see that line between compan companionship and even b to b. Right? Like do you believe that people are gonna have like Be
Speaker 1:new romance?
Speaker 2:No. No. No. No.
Speaker 1:Mean more so
Speaker 2:like AI has the potential to be everything. Sure. It has the potential to be somebody's best friend.
Speaker 1:Sure.
Speaker 2:Their Business partner. Business partner.
Speaker 1:Their chief operating officer. Chief CFO.
Speaker 2:Their CFO. Right. Yeah. But but then again, on on the on the app side for consumers, people like to have their different apps. Right?
Speaker 2:Yep. They like to have Microsoft Teams, and then they're having different conversations there than Snapchat.
Speaker 1:Yeah.
Speaker 2:So is there where do you see that line blurring in the future in terms of somebody who's just suddenly is like, hey, Replica, can you help me do my homework assignment? Right? Or is that even already happening?
Speaker 7:People already do that. There are basically what Replica is today is a companion that does tons of things with their with the users. So people learn languages with Replica. People talk about their careers. They do homework.
Speaker 7:They do prepare for, you know, important exams, important events, important important conversations. So all of that's already happening in Replica. But I do think there's gonna be gonna be two ultimately, I think we're going towards the future where we're gonna have two big AI products in our life, one for work and one for life. And helping with homework is kinda for life, but, like, truly office, you know, you know, important thing around just truly work and, like, office work will have something more like a Chaji Pati style tool. And the big difference is gonna be in productivity.
Speaker 7:Mhmm. You actually don't want something like Chagibati to reach out to you proactively and say something like, oh my god, Eugenie. Have you seen what, like, John did yesterday when he posted on Axe? And that'd just be really weird if it
Speaker 2:During the show. I can't believe John just said that.
Speaker 1:Ridiculous. It
Speaker 7:just would be really strange, and you don't wanna do work where this is happening. Yeah. I'd argue.
Speaker 1:Yeah. Well, thank you so much for joining this
Speaker 2:This is fascinating.
Speaker 1:Fascinating conversation.
Speaker 2:Thanks for giving us Yeah.
Speaker 1:We'd love to have you back. I wanna do a whole deep dive on this stuff. So thank you so much for joining.
Speaker 7:Thank you so much.
Speaker 1:We'll talk to you soon. Cheers.
Speaker 2:Bye. Thanks for coming on.
Speaker 1:And in the interim, we'll tell you about Bezel. Go to get bezel.com. Your Bezel concierge is available to source you any watch on the planet, seriously any watch. And, honestly, if you're going to work at Lux Capital, you're there's there's some hitters in that building. Yep.
Speaker 1:You're gonna be going up against Brandon Reeves and his Nautilus. So you're gonna have to get on getbezel.com. Do it. Something.
Speaker 2:Do it.
Speaker 1:Also, we I mean, we talked about Airbnb. Wanders obviously go in a different direction. You can book a wander with inspiring views. Hotel grade amenities, dreamy beds, top tier cleaning, and twenty four seven concierge service. It's a vacation home, but better, folks.
Speaker 2:Find your happy place. Find your happy place. John Andrews coming on the show next week.
Speaker 1:Oh, fantastic.
Speaker 2:He'll be singing, or maybe not next week, the following, but, he's ready to sing. So we'll probably mostly just kind of riff out the jingle a little bit more and try to extend it.
Speaker 1:We should we should run through a few timeline posts. Cotool is an agentic security platform that eliminates manual repetitive work for security teams. This is a launch from YC. Did you see this video? This video is hilarious.
Speaker 1:It's it's recreating the rippling deal drama with the mole and the fake Slack channel, and it's shot cinematically. And it's basically season six of Silicon Valley produced by Y Combinator. I think y c is the y c of HBO's Silicon Valley reboots.
Speaker 2:Okay. Let's play it. I need to watch this live.
Speaker 1:Can we can can we pull up the this video? We'll go through some other timelines. We'll come back to this. Jason says it's getting cutthroat in tech. According to reports, managers with twenty years of service that are making 600 k aren't as valuable as three to five junior devs.
Speaker 1:At big companies, it's hard not to become top heavy, and managers aren't needed in the age of AI. I'll just play that. Oh, let's play this co tool video if we can because it's hilarious, and, it's very funny if we can pull that up. But I wanna talk about Microsoft. They're cutting 6,000 jobs.
Speaker 1:It's only 3% of their workforce. I think this is way overstated, but we are seeing this rightsizing the post x layoffs. More companies are thinking about how they can do, a little bit less, but Microsoft has been in the rank and yank world for its entire history. So Microsoft has always had this culture of let's let's, you know, do routine layoffs. This does not seem like as much doom and gloomy
Speaker 2:the thought. Two stages to the layoffs. There was, like, basically, a individual contributor oriented day and a manager oriented day.
Speaker 1:And so when you think about the bottom 3% of the Microsoft workforce, obviously, that's frustrating if you got laid off. I'm sorry. But, like, it's not that crazy for a massive company that has, you know, tens of thousands or hundreds of thousands of employees to do a layoff. 6,000 is a big headline number, but it's not that big in the context of Microsoft. Anyway, let's go to the coats coats on
Speaker 4:the video.
Speaker 2:We have a mole problem.
Speaker 3:Mole problem.
Speaker 4:Got
Speaker 2:it. You want me to book you a dermatologist appointment? No, stupid. Somebody is leaking sensitive information to our biggest competitor. Idiot.
Speaker 2:Somebody's stealing our data. Oh, that's that's bad. Yeah. What are we gonna do about it? Don't worry.
Speaker 2:We've got our top guy on it.
Speaker 4:Done.
Speaker 1:Isn't this great cinematography? Usually We
Speaker 2:need a smoking gun, buttoned up, no loose ends. We even have somebody from the court ready to serve papers to whoever it is. What? I pulled stats around search behavior to find the suspect. I noticed that they were looking for competitive research.
Speaker 2:I did some cross referencing and then I made a report of all
Speaker 1:really good
Speaker 2:I said a honeypot trap of a fake Slack channel. Oh, Oh, you guys didn't tell me about this new Slack channel.
Speaker 6:It's him. This
Speaker 1:is the reenactment. Hold on. Let me get this motherfucker. This one looks like Ripley's office.
Speaker 3:Bad time.
Speaker 2:I'm willing
Speaker 1:to take that risk.
Speaker 3:Here to give me papers.
Speaker 7:I don't
Speaker 1:want to to about papers, and I love them.
Speaker 2:He'll give it up.
Speaker 7:He has no choice.
Speaker 3:You want
Speaker 1:me to go to work?
Speaker 7:Nice job, Luke.
Speaker 1:Isn't this amazing? Go to. What a great ad. Security without the spectacle.
Speaker 2:Wow. I'm blown away.
Speaker 1:That was, like, one of the greatest launch videos of the entire year. You know? So many vibe reels, so many just product
Speaker 2:demos. Cringe.
Speaker 1:So many no. No.
Speaker 2:How was it not cringe?
Speaker 1:It it could have been so
Speaker 2:ways to do that video and
Speaker 1:have it
Speaker 2:come out.
Speaker 1:It could have been so bad, and they And
Speaker 2:I just learned that which show Which of the actors were professional actors versus the founders.
Speaker 1:I felt like the founders were in there. I idea. But I mean, everything. The the zoom in on the guy's face, they just nailed this thing so well. It's so good.
Speaker 2:You called for the death of the Vibrio.
Speaker 1:Yes. I mean, Vibrios are fun. Also, like, the there's the other type, which is like, you have the CEO, the founder sitting in the the nice lighting, and they give you the pitch, and it's straightforward. And that's great too. If you can't come up with something as genius as this, like, just do that or do a Vibrio.
Speaker 2:It's fine. Only critique missed opportunity for the mole to say, send that watch
Speaker 1:to I know. They may have filmed this before that or something. But, hilarious. Also very funny because both Diehl and Rippling are YC companies, and YC posted this from the official Y Combinator account. So they're like, we're here for the drama too.
Speaker 1:Just absolutely fantastic work. Congrats to the Cotul team. Really, really good.
Speaker 2:Now. It's lore now. The industry is gonna move on. Yeah. Yeah.
Speaker 2:Yeah. It's gonna be great lore, and I'm gonna be saying send that watch to London.
Speaker 1:Send that watch to London.
Speaker 2:Thirty Years because it's an iconic line.
Speaker 1:Yeah. And, we also gotta give a shout out to Lee Marie Braswell, former colleague of mine at Founders Fund now at, Kleiner Perkins. Windsurf acquisition by OpenAI followed by Neon by Databricks. Congratulations, LM. We have to have her on the show soon.
Speaker 1:What an epic month, year career so far, LM.
Speaker 2:Just getting started.
Speaker 1:Just getting Just started. A lot of
Speaker 2:people a lot of people say that, and it's like, no. You you actually are just getting started. Yeah. No. She's she's definitely started.
Speaker 1:She's started. Anyway, are there any other posts you wanna go through, or should we get out of here? I think we should have Josh Diamond on to talk about industrial sabotage. It's a long thread. I don't think we wanna go through it right now.
Speaker 2:Yeah. So I
Speaker 1:mean, you put in a post about the CEO of Capital One is literally called Rich Fairbank, and I think that's enough for today. We already mentioned that to Josh Wolfe. So good.
Speaker 2:But Go find Josh's thread. What a fantastic What
Speaker 1:a fantastic image. Just Rich Fairbanks.
Speaker 2:Rich Fairbank. Another there's another there's another person I found it in Josh's thread
Speaker 1:Yeah. Yeah.
Speaker 2:Called, who works for McDonald's and like like some VP over there. Her last name is Hamburger.
Speaker 1:Hamburger. That's great.
Speaker 2:She's
Speaker 1:so good. Fantastic.
Speaker 2:Anyways Anyways Thank you so
Speaker 1:much for watching.
Speaker 2:I'm gonna end show. And just say thank you to Figma Yeah. For supporting the show. They are our newest partner
Speaker 1:Yeah.
Speaker 2:And one Redesign how you design. I can't hide how excited I am.
Speaker 1:You love Figma?
Speaker 2:Like I said, I've been a DAU my whole career.
Speaker 1:We were making memes in Figma, like, yesterday sending to Delians, and they were fantastic.
Speaker 2:For Delians' eyes only.
Speaker 1:Yes. Also, AdQuick, I think we might have missed them. Out of home advertising made easy and measurable. Say goodbye to headaches of out of home advertising. Only Adquick combines technology, out of home expertise, and data to enable efficient seamless ad buying across the globe.
Speaker 1:Adquick.com. Buy a billboard, folks.
Speaker 2:Thank you to all of our partners. And again, our board of directors has reminded us Yes. In a very forceful way Oh, yes. That we have to ask you to go leave a review on
Speaker 1:Five stars. Apple Podcasts. Spotify. Do it now.
Speaker 2:It helps us in some way. We don't really know how. But the board says
Speaker 1:The board says. Demands it.
Speaker 2:Our jobs are on the line. Yeah. Thank you for tuning in, folks. That's awesome. We got another great show tomorrow.
Speaker 2:Looking forward to
Speaker 1:it. Bye. Cheers.