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TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays from 11–2 PT on X and YouTube, with full episodes posted to Spotify immediately after airing.
Described by The New York Times as “Silicon Valley’s newest obsession,” TBPN has interviewed Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. Diet TBPN delivers the best moments from each episode in under 30 minutes.
You're watching TBPN.
Speaker 2:Today is Friday, 03/20/2026. We are live from the TBPN Ultra Room. The temple of technology, the fortress of finance, the capital. Capital. Let me tell you about ramp.com.
Speaker 2:Time is money. Save both. He's used corporate cards, bill pay, Accounting and a whole lot more all in one place. We have a massive show. Two in person guests today.
Speaker 2:Let's pull up the linear lineup. Linear, of
Speaker 1:course, is
Speaker 2:system for modern software development. Enterprise 70% of enterprise workspaces on linear are using agents. We have RF Kenmore from the menswear industry insider. No.
Speaker 1:He just is a menswear.
Speaker 2:He's an insider. Insider. Critic. Mitch Bucky from Ark Boats is coming on. Bucky Moore is coming in person from Lightspeed.
Speaker 2:Steve Huffman, the co founder and CEO of Reddit coming on. Then Quaid from Bezos, who you know and love. He's been on the show many times. Ankur Jain from Bilts coming on to talk about credit cards, consumer cards, all all the fintech stuff he's working on. And then Michael Kratsios from the White House, he's the science and technology adviser, he's coming on to talk about the new policy proposals that the White House has put forward around artificial intelligence.
Speaker 2:But first, I wanted to chat more about the breaking news from yesterday. Jeff Bezos is in talks raise a $100,000,000,000 for an AI manufacturing fund. There was a funny post that was like, he has $200,000,000,000. Why does he need to raise more money?
Speaker 1:No conviction? No conviction? Oh.
Speaker 3:It was
Speaker 1:it like it definite this this broke containment
Speaker 2:Mhmm.
Speaker 1:And got into kind of the anti capitalist People are not part of acts and they were like, wait, why are you asking people for money? You have all the money. Yeah. Yeah. Of course
Speaker 2:But of course, he
Speaker 1:He wants to let other people in on the action.
Speaker 2:Well, I want to let I I do wonder what his like GP commit will be.
Speaker 1:That's what I was saying yesterday. Was like, I would
Speaker 4:expect him to be like, yeah, I'm good for 20.
Speaker 2:Yeah. Yeah. 20 or 30 or something like that.
Speaker 5:I don't know.
Speaker 2:Maybe he'll go even longer. But in general, I think the I think the idea of going around the globe, because he's an international person at this point, hoovering up money from all over different sovereign wealth funds and then deploying that to help rebuild the American manufacturing base is a good thing. I wrote about it today in the newsletter, tbpn.com. And I also tried to, you know, do some searching and think about, like, what do you actually buy for a $100,000,000,000? What does a portfolio look like if it's a private equity style roll up?
Speaker 2:If you're just taking out the market caps and you're sort of assuming the debt and continue to operate the business, but then bring more efficiency to bear, what are some of the top options?
Speaker 1:I saw it.
Speaker 2:What are some of the options look like? Don't know.
Speaker 1:The other thing is I saw a very viral post Mhmm. About someone that seemingly read the headline and thought, like, don't you have enough money already?
Speaker 4:Why
Speaker 1:companies and fire fire? Like, they saw automation and they just assume, like, job loss.
Speaker 2:Yeah.
Speaker 1:Yeah. And when I look at this, I'm like, okay. If he's successful Yeah. We will, you know, create we will actually start adding Jobs. A bunch of new manufacturing jobs which we've been shedding
Speaker 2:Yep.
Speaker 1:Over the last year.
Speaker 5:Yeah. Yeah.
Speaker 2:Yeah. So Exactly. So headline number's funny. If he had done 99,000,000,000 or a 101,000,000,000, I don't think people would make it be making as many SoftBank comparisons. But, of course, as soon as you hear a $100,000,000,000 for a mega fund,
Speaker 1:You think this guy's got vision.
Speaker 2:He's got vision. It's a vision fund for America. I like the idea of an American soft bank, a bit of an American vision fund. So I'm generally pro. And but, of course, people are gonna make comparisons to SoftBank, which has had some huge winners and a few black eyes.
Speaker 2:Moss is a high vol guy. He's been the world's richest man briefly during the .com boom. It was reported that he was worth more than Bill Gates. It was pretty temporary, unclear exactly how much. And, of course, there was no liquidity at the time.
Speaker 2:But he's also held the crown for the man who lost the most money in human history after losing $76,000,000,000 in two years. You're supposed to do the wah wah for that. But he made it all back.
Speaker 1:I I was preemptively hitting it.
Speaker 2:Okay. Yeah. Yeah. He did he did make he did make it all back. He's made almost a $100,000,000,000 twice.
Speaker 2:I think maybe there was a moment when he had he had the title of making a $100,000,000,000 twice. One on Alibaba and then the second on ARM. He's made money on NVIDIA and lots of other things. But the idea of an American soft bank, especially one focused on revitalizing American manufacturing, I like that idea. There are a million reasons why this is an important project, job creation, economic independence, national security, etcetera.
Speaker 2:And you might just get more cool stuff. Like, as manufacturing gets cheaper, like, tools that you use, the cars that you drive, the washing machine in your home, the tires on your cars, all these different things get better, not just cheaper, but actually unlock new capabilities and new things that people people enjoy. And so I'm I'm I'm in favor of more manufacturing, more more economic development, basically. I don't think the project is done by any means. And so the question about, like, you know, Jeff Bezos' role.
Speaker 2:Like, he's a great operator, and I think he's the right person to take the reins and actually deliver here. So like Masa, Jeff Bezos has been through the ups and downs of the .com boom and bust. At one point, Jeff Bezos lost 85% of his net worth in, like, two years.
Speaker 1:But he made it back.
Speaker 2:He did make it back and more. He was worth, like, 8 or 9,000,000,000 and got down to his last 1,000,000,000, basically, because of the stock drop in in Amazon. But he built it. But he but he he not only kept Amazon alive, which I think everyone knows that, you know, Amazon went up during the .com bubble and then crashed and then built back up. But he also kept Blue Origin alive during that time.
Speaker 2:Because he's founded Blue Origin in 2000
Speaker 1:Wow.
Speaker 2:Before the crash. I didn't know that. Yeah. Before the crash. So he was Was it before SpaceX?
Speaker 2:Yeah. Before SpaceX. Woah. Yeah. So because I
Speaker 1:I I Elon's assume sold cow. I I assume that Blue Origin was just memetic with Elon. No. No. No.
Speaker 2:He did it earlier. Wow. And so Cool. He so he kept Blue Origin alive. And can you imagine how stressful it is?
Speaker 2:You're like, okay. I'm worth 10,000,000,000. Certainly, I can have a little side project as a treat. And you're like, okay. I just lost 85% of my money.
Speaker 1:I deserve What was I deserve a I deserve a side project that loses Yes. 20,000,000 a month.
Speaker 2:Exactly. Yeah. I don't know how much they really but, like but that doesn't seem unreasonable. But he was able to keep it going. Of course, Blue Origin was a slow story all the way up until, like, last year when they landed New Glenn.
Speaker 2:And and so he kept both alive, and he's never given up on the project Blue Origin that always has felt behind SpaceX for two the two decades that it's been operating, but is now unlocking new capabilities and is
Speaker 1:They were going
Speaker 2:eels eels Yeah. Turtle mode for sure. But it's working. And so, of the fact that SpaceX is still ahead of Blue Origin, you have to give him credit for operating that company efficiently and actually delivering a product that we all saw go up and come back. And so, like, the rockets did go up and land and come back, and he's delivered people to space and back.
Speaker 2:And so he's he's he's, like, achieved the goal and not lost all the money and not put the company in jeopardy. And so like clearly there's some operational expert
Speaker 6:That's a narrative violation.
Speaker 2:It is a narrative violation. What makes Bezos uniquely equipped to take on this type of project is the nature of his business over the last few decades. So he's never really had the zero marginal cost luxuries afforded to other pure play Internet founders. You think about Mark Zuckerberg, it's always been
Speaker 1:Except for his ads business.
Speaker 2:Yeah. He has that now, but that's very new. New. For a long
Speaker 1:time for contributor.
Speaker 2:Yeah. A very real contributor now. But even even then, it is much thinner margin than a Google or a Meta. And it always has been because they've always operated in the real world. They've been competing with Walmart and Barnes and Noble and and Romans and all
Speaker 1:the other orders. Big gross margins scare me.
Speaker 2:Yeah. He's always had thin thin margins until AWS, really. AWS was the first, okay. This is like a monster cash cow. And even AWS doesn't have 80% gross margins.
Speaker 2:It is a cash cow, but it's a different shape. And of course, you go back to the Jeff Bezos lore and he had the door desk and the whole business was very scrappy for a long time. And Amazon's just always interfaced with the physical world. So it's been even though it's a software company and a tech company, it's always interfaced with the physical world. And they've had to focus on operational efficiencies to scale.
Speaker 2:So in 2012, Amazon bought Kiva Systems, which turned into Amazon Robotics. And that's a big risk to buying a big company. And we think that, you know, if this turns into if this $100,000,000,000 fund turns into sort of a private equity roll up, you're gonna ask the question, can Bezos buy a company for $1,000,000,000 $5,000,000,000 $10,000,000,000 $50,000,000,000 who knows, and operate it and scale it and actually continue to deliver value? And he certainly did that with Kiva Robotics, which turned into Amazon Robotics, which delivered over a million robots that are deployed across the operations network. So from fulfillment centers, warehouse automation, inventory flow, last mile delivery, all of these require tight integration between hardware and software to run smoothly.
Speaker 2:Bezos clearly loves this stuff. And you can actually see it when you look at his face whenever he gives a tour of an Amazon warehouse or Blue Origin facility, he's just beaming. And he's absolutely obsessed with this technology and the physical world. And so the question I had was like, what should he buy?
Speaker 1:Yeah. The other thing is like, you know, seeing all the different volume across Amazon and being like, well, it'd be pretty convenient if that was made here or this was made here or at least the Yeah. Some of the components were made here. Yeah. And it wasn't, you know, you didn't just have assembly here.
Speaker 2:Yeah. I mean, yeah. There there there is an I I hadn't considered that narrative, but there is a different flow where you're you're He's not sitting there being
Speaker 1:like, great. Love that so much of our volume is having to be shipped or flown across the ocean.
Speaker 2:Ton of that. Yeah. And then also, he's seen attacks from Tmall and Sheehan and Alibaba and AliExpress and a whole bunch of direct from manufacturing plant to customer. And how do you respond to that? Maybe getting into the deeper in the supply chain makes sense.
Speaker 2:Although I'm not entirely sure that there's so little reporting at this point. It's it's the only line is that he'll be buying manufacturing companies. So there's a lot in the supply chain, so I wanted to dig through some stuff that could potentially be in the crosshairs for Bezos. The first is Lear. They manufacture seats and electronic systems for the automotive industry.
Speaker 2:And a lot of these companies have huge revenues and small market caps. So Lear did 23,000,000,000 in 2025 revenue. The market cap is around 5,000,000,000. And so the business is operationally complex. I mean, on a PE ratio, it trades at like, I think, 13 priced earnings.
Speaker 2:And so, like, you have these high revenues because you're in the manufacturing business, but you're low margin.
Speaker 1:But Yeah. And this has been some of the concern around Yeah. VCs, investing in manufacturing businesses.
Speaker 2:Yep. Are these good?
Speaker 1:And and just a general concern that, you know, they might today be getting valued on a revenue multiple. Yep. But as they get to the public markets, people expect them to be valued on on earnings. Yep. And that is a very different story.
Speaker 2:Yeah. Lear, interestingly, not the maker of the Learjet, sold to the Gates company, which is not affiliated with Bill Gates. I was like, is there a link here? But there's not. But Learjet and Lear are two different companies, although they both make physical things.
Speaker 2:But there's a there there there's an opportunity here for the Bezos thesis that we are sort of, you know, gesturing towards. The business is operationally complex, and AI can be applied across plant scheduling, supplier forecasting, visual inspections, and more. This whole thesis of, like, the colors get less blue, there's upscaling that happens in the facility, and you're able to produce more at scale. BorgWarner is another example. They're a scaled auto supplier, dollars 14,000,000,000 in 2025 revenue.
Speaker 2:Market cap is $9,500,000,000 They're more focused on propulsion and power related systems. They literally make turbochargers for internal combustion engines, although they've they have shifted their business a lot to be focused on electronic components, both in terms of making battery packs, motors. But they're actually already getting into selling turbine generator systems for data centers. They're part of the AI boom already. And there's more opportunities to grow into different industrial power applications.
Speaker 2:Hexcel is another company. They're the a leading producer of carbon fire carbon fiber reinforcements and resin systems for aerospace. They're guiding to 2,000,000,000 in revenue, but the market cap is 5,000,000,000, so a little pricier on a price per price to sales ratio. Here's a fun one, Goodyear. Not only do you get blimps, which is gotta be important if you're trying to go blimp for blimp with Sergey Brin, you just just jump to the front of the line.
Speaker 2:It's only a 1,800,000,000.0
Speaker 1:It's revenue multiple. Dollars It's criminal.
Speaker 2:Yeah. It's So the market cap for Goodyear is 1,800,000,000.0, and revenue was 18,000,000,000. So they're they're trading at a point somewhere
Speaker 1:there's like a VC funded tire company.
Speaker 2:It's like a 100 x revenue? Yeah. They're like, we're gonna go through a thousand x multiple compression over the next decade? Yes, you will. But Goodyear is sort of the classic AI for manufacturing case.
Speaker 1:They gotta focus. They gotta get investors thinking about their their advertising blimp monopoly. Yep. And scaling that business.
Speaker 2:Yep. To capitalize on the Quality control is really critical. There's options opportunities for downtime optimization. So if you can have better systems that limit downtime, you can produce more tires. The tire market is extremely competitive.
Speaker 2:You see Chinese tires on cars more and more. And so these are thin, thin, thin margin companies, and that's why the multiple's so low. But getting good Scariest
Speaker 1:scariest moment of my life in a car. Yeah.
Speaker 2:Chinese tires. Chinese tires. Old Chinese tires. Old Chinese tires. But but, you know, a lot of people go in.
Speaker 2:They say, I need new tires. Just give me whatever's cheapest. And so if you're competing on price and you're a low cost supplier, every dollar counts. On the bigger side, you have Rockwell Automation. I don't know if you ever seen those videos for the Rockwell Turbo Encabulator.
Speaker 2:Have you ever seen these? We should pull this up. Let me let me find The discombobulator? It's it's one of the best, like like, you know, marketing videos. Turbo encabulator.
Speaker 2:Let me find this. The Rockwell retroencabulator. I got it here. We'll we'll we'll watch this. It's a two minute video, and we'll see if you can yeah.
Speaker 2:Yeah. Any of these. Yeah. We got these. If we can pull this up and let's let's play
Speaker 7:Here at Chrysler Motors Automotive Operations, research has been proceeding to develop a line of heavy duty transmissions that establishes new standards for reliability, durability, and quality. With customer needs as our primary focus, work is proceeding on the crudely conceived idea of an instrument that would not only supply inverse
Speaker 2:I think this is I think this is yeah. I think this is Chrysler's, like, joke. Let's play the one that I that I shared from Rockwell. This is this is the the good folks at Rockwell Automation who
Speaker 8:You're at
Speaker 1:Rockwell a cool video.
Speaker 2:Look at this.
Speaker 8:Has been proceeding to develop a line of automation products that establishes new standards for quality, technological leadership, and operating excellence. With customer success as our primary focus, work has been proceeding on the proved conceived idea of an instrument that would not only provide inverse reactive current for use in unilateral phase detractors, but would also be capable of automatically synchronizing cardinal gram meters. Such an instrument comprised of dodge gears and bearings, Reliant electric motors, Allen Bradley controls and all monitored by Rockwell Software is Rockwell Automation's Retro Encabulator. The Retro Encabulator. Now basically, the only new principle involved is that instead of power being generated by the relative motion of conductors and fluxes, it's produced by the modial interaction of magneto reluctance and capacitive Passive interaction.
Speaker 1:Why so much?
Speaker 8:The original machine had a base plate of pre famulated analyte surmounted by a malleable logarithmic casing in such a way that the two sperving bearings were in a direct line with a panometric fan.
Speaker 2:Panometric fan.
Speaker 8:The lineup consisted simply
Speaker 2:of It's just a it's just like such a funny in joke for electrical engineers because it's just a whole bunch of like slop basically. Like, oh, none of those terms mean anything. But it really I don't know.
Speaker 1:Is Start up good start up launch video concept.
Speaker 2:Yeah. Yeah. Yeah. It really I mean, it it it helps you like detect like are you in group out group basically. Very, very fun.
Speaker 2:But they are out group. What? Well, were you able to clock it? Or were you like, oh, that sounds good.
Speaker 1:You know? I mean, it sounded silly.
Speaker 2:It sounds silly. So Rockwell Automation's on the bigger side, but they sit right at the intersection of factory automation software and control. So although that video is a joke, Rockwell does does work on on factory automation already. So the thesis with this one is that the business is already already dedicated to industrial automation. And so it's less of a turnaround, but it's a control point for pushing AI to thousands of other factories who are deeper in the supply chain.
Speaker 2:It's expensive at 40,000,000,000, but potentially in the budget.
Speaker 1:Do you think there's a world where he just buys a Ford Motor Company? That would be crazy. I mean Yeah. He wouldn't he would have to lever up.
Speaker 2:Yeah. But What is Ford now? I
Speaker 1:thought 40 it's 45. But I but I'm not but he's not gonna just drop, like, raise a 100,000,000,000 and then and then buy a company for entirely with equity.
Speaker 2:I I I feel like it will be deeper in the supply chain than a brand, but I don't know.
Speaker 5:It's possible. It's possible.
Speaker 1:But he might say
Speaker 2:Isn't he already a big investor in Rivian?
Speaker 1:Yeah. Sure.
Speaker 2:So, like, looking deeper into that supply chain and there's a few other car companies that he'd been been involved in. I just don't know that there's that, like, that's where the big opportunity is. It might be deeper in in the supply chain, like bending the metal that goes into the bumper, the this and that. And, like, you know, it's 12 steps deep. It's more boring, but it's even thinner margins, less, you know, brand risk and brand value, but really focused on, you know, applying that actual, like, commercial excellence.
Speaker 2:But but, I mean, truly, like, the the you're good your guess is as good as mine. There's very little there's very little to go off of. Also, there's a link to Project Prometheus, which is the AI project. And so there's a chance that, like, this whole project is more aligned with the software singularity, software only singularity, and you wind up with, you know, buying a lot of things, but everything's in line with, like, more data centers, and this is more of, like, let's put the $100,000,000,000 to work towards building, you know, compute capacity for project Prometheus. That feels like not what we're hearing, but it is it is one do anything I think
Speaker 1:there's on on, like, the solar side.
Speaker 2:Yeah.
Speaker 1:Right?
Speaker 2:Yeah. Yeah. Yeah. That'd be interesting. And then there's also the the option that we get some sort of Elon style mega corp with Blue Origin involved at some point.
Speaker 2:Like, you know, x AI and SpaceX merged. It's possible that Blue Origin and this vehicle come together with Project Prometheus in some in some way, and then that goes public as a new entity. A lot of these he's he's actually mentioned the whole space data center, I think, before, I think a a while ago. Wasn't it, like, more than a year ago? I don't
Speaker 9:think Yeah. Think they also just filed something with the FCC
Speaker 10:Okay.
Speaker 2:Yeah. For the new cloud. Yeah. Yeah. For the new
Speaker 9:It was, like, 50,000 satellites, I think.
Speaker 2:Yeah. Yeah. So so he wants, like, a direct Starling competitor. And so when you think about the full AI stack, if he's really, you know, off off planet, you know, pilled and thinks he can get thinks he can get there even if it's like a year or two behind or I guess what's the timeline for his Starling competitor? That would be like three years behind, four years?
Speaker 9:Yeah. Mean, for for for the moon, he he's supposed to be ahead.
Speaker 2:Right? Oh, yeah. So Maybe this will all go on the moon. Well, either way, it's a big move from an experienced operator with lots of opportunity ahead, it'll be fun to follow along.
Speaker 1:And I'm glad he's back in the game in a big way Yeah. Not just doing random, you know, side projects.
Speaker 2:Bottle service.
Speaker 1:Or bottle service. Yes. He's gotta be spending In the worst time and energy securing America's future Yeah. And securing bottle service.
Speaker 2:Well, you know, I mean, the guy can take a weekend off, but one photo from his weekend flies a lot further than you know, he could be completely locked in and just grinding eighty hours, and then he goes and gets bottle service just one time. He was just there for thirty on
Speaker 1:the yacht.
Speaker 2:Not maybe. You never know. Anyway, let's, let's let's first tell you about Gusto, the unified platform for payroll benefits and HR built to evolve with modern, small, and medium sized businesses. And let's also tell you about Figma. No matter where your idea starts, Figma may clog code codex or a sketch, the Figma canvas is where ideas connect and products take shape.
Speaker 2:Build in the right direction with Figma. Let's go over to Jensen on the All In engineer. At the end of the year, I'm gonna
Speaker 11:ask him how many token how much did you spend in tokens, and that person said $5,000, I will go ape something else.
Speaker 2:Yeah. Right?
Speaker 11:If that if that $500,000 engineer did not consume at least $250,000 worth of tokens, I am going to be deeply alarmed. Okay? And this is no different than one of our chip designers who says, guess what? I'm just gonna use paper and pencil. I don't think I'm gonna need any CAD tools.
Speaker 4:Right. Right.
Speaker 12:This is a real paradigm shift to
Speaker 2:start
Speaker 12:thinking about these all star employees. It almost reminds me of of what we learned in the NBA when LeBron James started spending a million dollars a year just on his health and his body, like maintaining it.
Speaker 11:That's right.
Speaker 12:Here he is at age 41 still playing. It really is, hey, if these are incredible knowledge workers, why wouldn't we give them superhuman abilities?
Speaker 11:That's exactly
Speaker 12:Where does that go? If we if we extrapolate out two or three years from now, what is the efficiency of that all star at NVIDIA and what they're able to accomplish? What does look like? Well, first
Speaker 11:of all, things that that that, wow, this is too hard. That thought is gone. This is gonna take a long time. That thought is gone. We're gonna need a lot of people.
Speaker 11:That thought is gone. This is no different than in this in the last industrial revolution. Somebody goes, boy, that building really looks heavy. Nobody says that.
Speaker 4:Right.
Speaker 11:Nobody wow. That mountain looks too big. Nobody says that. Right. Everything that's too big, too heavy, takes too long, those thought those ideas are all gone.
Speaker 13:They're reduced to creativity.
Speaker 11:That's right.
Speaker 13:What can
Speaker 1:you come
Speaker 11:up with? Exactly.
Speaker 13:Right. Which means
Speaker 11:now the question is, how do you how do you work with these agents? Mhmm. Well, it's just a new way of doing computer programming. In the few in the past, we code. In the future, we're gonna we're gonna write ideas, architectures, specifications.
Speaker 11:We're gonna organize teams. We're gonna give them we're gonna help them define how to evaluate the definition of good versus bad. Right. What's the what does it look like when something is a great outcome? How to iterate with you?
Speaker 11:How to brainstorm? That's really what
Speaker 1:you're The looking Internet is having a lot of fun with this. Nuno says, guy that sells shovels says you should spend 50% of your salary on shovels. But, of course, Jensen's point is gen generally correct, which is that you should give your best people a lot of leverage.
Speaker 2:Yeah. I do wonder what the, like, leverage ratio is in other industries. Like, if you're a crane operator and you're making, I don't know
Speaker 1:If you should give him the best possible crane.
Speaker 2:Yeah. Like like, is it possible that that if you're operating a $10,000,000 crane or something, I don't know how much a crane cost, or like a or or a cargo ship, cargo ship that's that's ferrying oil across the world, how much does that crew cost? And then how much does the ship cost? And then what's the depreciation on that ship? Because it might be, like, a $100,000,000 ship that will last twenty years.
Speaker 2:So you're looking at $5,000,000 a year. And if the crew total cost of the crew is, 1,000,000, well, then you're actually spending more on the capital asset than the underlying talent, and you're getting, like, leverage on top of that. And for a long time, software engineering has not been that. It's been, you know, a $100 worth of Internet and a couple thousand dollars on a MacBook and a lot of open source software because you're using Python and Linux and these things. And, I mean, I guess you could maybe burden, like, your cloud budget once you actually deploy the app.
Speaker 2:Like, if you think about if you're a Facebook engineer or Instagram engineer, you could push a feature that consumes a ton of compute. But this is also going back to like the AI talent war where you get back into if you're if you're a, you know, elite software engineer and you're like, look, I'm gonna be cons I'm be in I'm gonna be in charge. I'm gonna be managing half $1,000,000 worth of token budget over the next year. Well, I want comp that's higher than that or something like that. It'll be very interesting to see how the the value works there.
Speaker 2:A reasonable ballpark for the annual cost of a fully loaded cargo ship is around 4 to $18,000,000. So including the cash operating cost plus the depreciation. So I don't know. Yeah. The the the the this certainly isn't like the first industry to be hit with something like that, but it'll be interesting to see how it changes.
Speaker 1:In other news, the US Department of Justice announced yesterday three charged with cons piring to unlawfully divert cutting edge USAI technology to China. The indictment unsealed today details alleged effort to evade US export laws through false documents staged dummy servers to mislead inspectors convoluted transshipment schemes in order to obfuscate the true destination of restricted AI technology, China. Said John Eisenberg, assistant attorney general for national security. These chips are the product of American ingenuity and NSD will continue to enforce our export control laws to protect that advantage. So the company, SMIC Super Micro Computer Inc.
Speaker 2:They got cofounders.
Speaker 1:They him red handed.
Speaker 2:Finjwali, he's arrested today or yesterday. He personally holds half $1,000,000,000 of super micro stock. Still risked it all, and now he's facing thirty years in federal prison. That is crazy. He's charged smuggling billions in Nvidia servers to China, use Southeast and Southeast Asian Shell company to funnel 2 and a half billion in servers to Chinese buyers.
Speaker 2:500,000,000 worth shipped in just three weeks in 2025. That's a lot. 2 and a half billion in servers feels like enough for, like, a frontier training run. Like, that's a big, big, that's a big push. He built thousands of fake dummy servers to fool US compliance auditors caught on surveillance camera using a hair dryer to swap serial number stickers.
Speaker 2:And so, OX, Gee Gee says, this man is a billionaire and was removing labels with a hair dryer personally. You're simply not grinding hard enough.
Speaker 1:There's always there's always a grind set lesson in
Speaker 2:There's always any story like that. This over to LinkedIn.
Speaker 1:And it's also notable because because the there's the export tax or tip that, you know, that you're trying to bring chips out of the country that the the the the US government kind of flips over the Square Terminal and they say tip, Yep. Yep. It's 25%. So you're looking at at hundreds of millions of dollars if these were even if these were chips that were Yep. Able to be exported.
Speaker 2:We were debating the the flipping the iPad around asking for a tip earlier today. And I think our our joint stance was if the iPad is turned around, you got a tip. Yeah. It's just the etiquette is that you got a tip. But is there any is there anywhere where that line crosses and you say, I can't.
Speaker 2:I can't possibly push something.
Speaker 1:Funny thing is Erwan asks for tips
Speaker 2:Really? On online orders. Online orders? Wait. But there will be a human delivering it or
Speaker 1:There's two separate tips.
Speaker 2:Okay.
Speaker 1:There's there's the the person in the store Mhmm. Who puts these things Mhmm. In the bag Mhmm. And then there's the delivery person. Yeah.
Speaker 1:And they're at they they they flip it over twice.
Speaker 2:Yeah. The game theory of this stuff is always hard because I feel like I don't know. There's regulations on like taxes on tips, but it's very unclear if companies actually funnel how they distribute the tips. Like, you tipping the person? Are the tips grouped Were your tips pooled when you were
Speaker 1:valet? Yeah. Yeah.
Speaker 2:They were pooled. So even if you did
Speaker 1:a great job Jobs at the hotel. The valets Yeah. They pool. Yeah. Val staff, the people that like take you down to your room do not And that was just the rules.
Speaker 2:Oh, it's because I might be the one who parks the car. You might be the one who gets
Speaker 1:Well, in a in a dynamic in a dynamic where you have a bunch of valets that are waiting for cars Yeah. It would be a bad experience for the guest if the valets are like, they see a nice car pull in and they're like fighting over themselves Sure. To deliver Yeah. Yeah. It should just be like whoever's available Sure.
Speaker 1:Should deliver the best possible service. Whereas Bell work is much more one on one. Okay. It's like I'm kind of your guide on the property. I'm gonna like, you know, you you might have the person's cell phone.
Speaker 1:They might be Yeah. Texting you Yeah.
Speaker 2:Etcetera. Interesting.
Speaker 1:And so, it makes more sense to not pool.
Speaker 2:Well, tip your export control. Tip your federal
Speaker 1:there there I did have a funny story where there was a guy, a bean heir Mhmm. Who used to come to the property and everyone knew that every every single thing my word. We still have we haven't successfully kind of welded into existence.
Speaker 2:Not at all.
Speaker 1:I think we're the I think we're the only people. It wasn't
Speaker 2:we didn't come up with this term. It was delivered to us. We didn't really appropriate
Speaker 1:it. Anyway. There was a guy who would come to the property. Any single thing he got help with on the property
Speaker 2:You would tip?
Speaker 1:You would just tip a 100.
Speaker 2:Mhmm.
Speaker 1:And so what It did cause chaos.
Speaker 2:Okay. Because then people are like Oh, I know. I'd love to refill your diet coke.
Speaker 1:They'd be like waiting around like trying to be in the right spot to open a door because they knew it was it was a bit it got a bit out of here.
Speaker 2:I saw I saw a piece of alpha on Instagram reels that suggested that you tip the front desk person when you're checking in before you check-in.
Speaker 1:Because you Yeah. That always feels like a bribe, but it is the right move.
Speaker 9:So this is a big thing in Vegas. Right?
Speaker 2:Is. You're supposed
Speaker 9:to put it in between when you give them the card.
Speaker 2:Oh, my yeah. You stack the credit card and the ID, and you put the $100 bill in there.
Speaker 1:That's even more that.
Speaker 2:Then then they have plausible liability and they can be like, oh, like, here you go. Or they can be like, okay, thank you and I'm upgrading you. And I think if at least this person on Instagram was making the case that if you if you average out, you're tipping a $100 for every room and you're buying like a $400 room, but you get a thousand dollar room upgrade every
Speaker 1:is like you you wanna tip before the service occurs. Yes. If you tip the valet when they they bring you your car Yes. Yes. You're how do they know what kind of service
Speaker 2:So if you're ordering at Starbucks and you wanna make sure that they're gonna enter your order correctly and get your name right, you gotta tip up front and then say what your order is.
Speaker 1:Walk up to the counter, say flip it over.
Speaker 2:Flip it over. I'm tipping you first. Now let's start the transaction. Anyway, when a broker who had bought NVIDIA powered servers from the Southeast Asian company Walk
Speaker 1:up to the walk up to the counter and say, what's your tempo address?
Speaker 2:Oh, yes. Yes.
Speaker 1:Send him a machine payment.
Speaker 2:Yes. Automatically. When a when a broker who had bought NVIDIA powered servers from the Southeast Asian company sent Sunny a text message containing a link to an announcement about Chinese nationals being arrested for smuggling AI chips into China, Sunny allegedly responded with sobbing emotions.
Speaker 1:Scroll up. Scroll up so people can see.
Speaker 2:Morning, Bruce says, hey, man. You're probably going to jail. Super mocha co founder. Cry cry cry emoji. And scroll down and you'll see Nick Carter.
Speaker 2:Literally this. Your son has passed away. It's the warthog explosion. Oh, okay. I guess we can't find it.
Speaker 2:It's weird. My ex is different.
Speaker 1:Jordan Schneider apparently was all over this back in August. He said a super micro ad in the middle of a Reuters piece talking about how tracking devices and AI server is just priceless. Woah. What did Jordan know? What did Jordan know?
Speaker 2:Deep Alpha in China Talk. Head head over to China Talk and subscribe. He's got some amazing content, some amazing interviews and is a good friend of the show. And so there's there's clearly secrets to be unveiled through the China talk archive. Let me tell you about CrowdStrike.
Speaker 2:Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. And let me also talk it talk to you about Cisco. Critical infrastructure for the AI era.
Speaker 2:Unlock seamless real time experiences and new value with Cisco.
Speaker 1:Thank you to the Cisco team for sending us us these mini McLaren helmets. They're a sponsor of McLaren. Very cool. And we are honored.
Speaker 2:Yeah. We love f one. I'm sorry, but the super micro thing is awful, but parts of it are genuinely hilarious. They literally used a hairdryer to move serial numbers from real servers to dummy servers to throw in a warehouse and got caught on camera. And the pictures have actually leaked red handed.
Speaker 2:Yes. It's a red it's a red hair dryer. That is that is remarkable. Trunk fan says, do things that don't scale. Classic founder energy.
Speaker 2:Yeah. Definitely. Definitely that. What else is going on?
Speaker 1:Let's pull up this video. I I don't know if if Bone
Speaker 2:Six minutes long.
Speaker 1:The legend Bone
Speaker 2:Chinese is entrepreneur boasts receipt of 200 NVIDIA h 200 GPUs in Beijing despite The US export ban and then explains how he circumvents the export ban. Wow. In January '20
Speaker 5:by Beijing based entrepreneur, Sudie, on the Chinese social media platform, Douyin, has In the video, Sue boasts a
Speaker 2:Oh my god. That's like the biggest logo for Super Micro ever. Well, Bone
Speaker 1:Bone is Bone is absolutely
Speaker 2:from January. No. I I I'm telling you, like, a lot of I I mean, I'm I'm I'm sure the the Wow. The Justice Department were working on this, like, earlier than this. But a lot of times, like, legal action will happen, like, downstream of, like, YouTube drama videos.
Speaker 2:Like, will be some, like, you know, fake guru who's out there, like, running a Ponzi scheme, and people will be dunking on it on social media, and then it will get picked up by the
Speaker 1:So almost a year and a quarter ago, somebody responded to Bone and says, it's SMIC packaged. And Bone says, do think SMIC is smuggling chips? Wow. And And the family owned business in Taiwan. I won't be surprised if there are some family members who wanna make this money by setting up fake shell entities and smuggling chips for business partners in China.
Speaker 1:Wow. It's good money. Wow. Wild.
Speaker 2:This is crazy. Wild. Kevin Quaid has a good meme that everyone enjoyed. They expect one of us in the wreckage brother, and it's not Jensen. The Bane Bane meme.
Speaker 2:It's very, very funny.
Speaker 1:And, yeah, the the SMIC founder, I believe, at GTC just a few days ago.
Speaker 2:Oh, really?
Speaker 1:Hanging out. No way. He was I I saw a picture of him with Jensen.
Speaker 2:Yeah. Until the music stops playing, I suppose. Let me tell you about Labelbox, RL environments, voice, robotics, evals, and expert human data. Labelbox is the data factory behind the world's leading AI teams. And let me also tell you about public, investing for those who take it to stocks, options, bonds, crypto, treasuries, and more with great customer service.
Speaker 2:Speaking of going insanely hard, says Joe Whitenthal, I'm obsessed with the name of the rocket that will take the first Chinese astronauts to the moon. It's called the Long March 10, the next generation crude launch vehicle. Long March is a great, great name for just locking in. The lock in the lock in rocket. Lock in rocket.
Speaker 1:And it's time What are we talking about? For Kimmygate.
Speaker 2:Kimmygate. What's going on here?
Speaker 1:Thin What
Speaker 2:is So Cursor yesterday announced Composer two, which apparently was composed of other models. Did very well on Cursor bench. A little bit odd with the charts on the the higher cost, lower cost, but seemed like it did well for Cursor's use case. Cursor fans were satisfied, I suppose. Finn says, that he was messing around with the OpenAI base URL in Cursor and caught this account slash any sphere slash model slash Kimmy k two p five r l, the and then some other numbers.
Speaker 2:So compute so Composer two is just Kimmy k two with r l. At least rename the model ID. Well, the cofounder, I believe, or someone from Cursor chimed in and said and said, it is in fact RL'd Kim EK two and this is why open weight rules. We, the consumers, get new improved models with minimal cost. And it's Lee Robinson who is teaching developers at Cursor.
Speaker 2:Lee Robinson says, yep. Cons composer two started from an open source base. We will do full pre training in the future. That's an interesting claim. I'm I'm wondering if they even need to.
Speaker 2:I I I don't know that there's any problem with using an open source model here. He says only one quarter of the compute spent on the final model came from the base. The rest is from our training. So they took whatever compute went into k two, and then they four x that or three x it and and drop that into RL. This is why evals are very different.
Speaker 2:And, we are following the license through our inference partner terms. So I don't know. They're they're they're they're they're staking out their claim. They're making their their their strategy known. Jack Morris says people are taking this the wrong way.
Speaker 2:Look at it like this. Composer one, deep seek probably. Composer two, Kimi, certainly. Composer three, likely, will be the first frontier base model pre trained from scratch for a single domain coding. It's a scary thought, isn't it?
Speaker 2:And so people are taking both sides. Tyler, do you have a do you have a take on this?
Speaker 9:Yeah. I mean, I I think it's, like, very reasonable to to do RL on a on, like, some open source pretrained. Like, that's Yeah. Makes a lot of sense. Yeah.
Speaker 9:Right? Because, like, you can kind of imagine that there's this dynamic where there's post about this we can talk about. Yeah. But I'm, like so so there's all this stuff about how, okay, Claude, Anthropic trains the model, and then Chinese Open Source Labs kind of instill on it. Yeah.
Speaker 9:You know, the actual implementation of how they distill it doesn't maybe doesn't matter that much. Sure. You're kind of getting some form of, like, a little bit that's open source. Yeah. And then you take that, and then you can do RL to do, like, a specific hill climb on on some task, like, just coding.
Speaker 9:And that's that's, like, a very good way to to make good model. Right? So Prime Intellect, their most recent release was I think it was GLM, like Mhmm. 4.5. Yeah.
Speaker 9:And then so so they take that base model, and and then you do RL on that. And you get this really great model because, like, RL is, like, where you can get a lot of these, like, small
Speaker 2:Small gains.
Speaker 9:These small gains on specific task, which which can build up over time.
Speaker 2:Yeah. So I
Speaker 9:think it, like, makes a lot of sense. It's not like a big dunk to be like, oh my gosh. They were just doing RRL on some sort of model.
Speaker 2:Think it's very logical strategy.
Speaker 9:Yeah. That, like, makes a lot of sense.
Speaker 1:Yeah. I think the criticism of I I think I think they probably should have come out and said they did it and not try to position it as like we did a they said what? There was this was our first continual pre train. Continue pre train. So they kind of like using that using that word.
Speaker 1:It like Sort of it would have been easy to be like, we took we took world class open source models and improve them
Speaker 2:Yep.
Speaker 1:In order to create a For our specific problem.
Speaker 9:Yeah. And I think people would have been, like, totally fine
Speaker 10:with that. Right?
Speaker 5:Yeah. It's prominent to,
Speaker 9:like I mean, a lot of, you know, American labs have done this and said it, and everyone's like, wow. This is great. This is a great model. Yeah. I'm, you know, I'm happy to use it.
Speaker 2:Yeah. Didn't didn't Perplexity at one point create, like, deep seq seventeen seventy six or something like that, where they were like, we specifically made it more American.
Speaker 9:After I will say after I actually
Speaker 2:Oh, after you did that. Okay. Yeah. So funny that you did that.
Speaker 1:Zaffer says, cursed crows are treating Kimmy like Voldemort. The no. I don't wanna say the name. He did in fact put it in a post. Yeah.
Speaker 1:Yeah.
Speaker 2:Yeah. Yeah. Accelerate Harder says, the funny bit is training from scratch impresses investors and Twitter, but it makes little sense for most teams while still while strong open source options exist. So Cursor actually did the smart thing but pretended they did the dumb thing and it nearly worked. So more of maybe a comms issue than a business strategy issue.
Speaker 2:But, you know, we'll we'll Yeah.
Speaker 5:I I
Speaker 9:think there are some concerns maybe about the actual license of the model because, you know, technically, like, you are supposed to say that that it is, like, Kimi
Speaker 2:Yeah. Usually, you have to pass through these things. Android is built on Linux, and and that's in the
Speaker 1:There, like, is notes.
Speaker 9:Likely to be some deal behind the scenes that is actually means it's fine.
Speaker 2:Yeah. We we really I also I would not be surprised if people have just not read the the, like, the the composer two license stock yet or something, and, like, it's actually just fully disclosed there. And the people are like, I found in the URL. It's like, it was also in the terms of service. Like, it was just in plain text somewhere that you just didn't find.
Speaker 2:Who knows? Let's see. So three x, Ellie is giving some some comps on this. So three x, the training compute gets you a 1% improvement on SWE bench multilingual and 21% on terminal bench two point o, but k 2.5 in is in nonthinking mode. If those benchmarks are useless, it's weird that they're the ones reported in the cursor blog, then something is wrong.
Speaker 2:So people are going back and forth. But, ultimately, I I I think this you know, the where the rubber meets the road is ARR. Like, Cursor has been growing. Cursor continues to grow even even while they've, you know, been, like, steamrolled and the vibes have shifted. If people love this and people are using the product and it's a growing business and the market is growing so fast that they have a great business, that seems like, you know, business continues as usual.
Speaker 2:Let me tell you about the New York Stock Exchange. Wanna change the world? Raise capital at the New York Stock large IPO. It's on the horizon. Let me also tell you about vibe.co, where DTC brands, b to b startups, AI companies advertise on streaming TV, pick channels, target audiences, measure sales just like on Meta.
Speaker 2:So should we Delvegate. Delvegate. Another gate. Another gate. Delvegate.
Speaker 2:So what happened here? Where where should we start?
Speaker 1:Anonymous sub stack Okay. Pops up.
Speaker 2:Yeah. These anonymous sub stacks are interesting. DeepDelver clearly created just to share this particular story. No idea who's behind it.
Speaker 1:Yeah. Incredible incredibly professional.
Speaker 2:Okay.
Speaker 1:In their presentation. Right? They're putting backups of the article. Yeah. On Reporters day who wanna get in touch.
Speaker 1:Whistleblom. Pro Proton. And so, yeah, they they make an argument that Dell has had a a bunch of kind of nefarious activity, kind of duplicating reports, not basically, like a a lot of their value prop, I think, was on the fact that they were using AI Mhmm. And speed. And, yeah, it doesn't look good at all.
Speaker 2:I don't believe we've had Delve on the show, but I searched the calendar and I got one hit for Delve, and it's in it's in a summary it's in a a summary of of Bill Gurley's book that says, it's a page turner that delves deep into the surprising, often zigzagging career paths of exceptional performers. There's something inspiring on every page is a quote from the New York Times bestselling author that he gave to Bill Gurley's book and just got sort of wound up in our notes. Anyway, so so what actually happened? What is Delve? Let's let's start there.
Speaker 1:Delve does SOC two compliance Mhmm. And HIPAA compliance.
Speaker 2:Mhmm.
Speaker 1:They've worked for a number of companies Mhmm. Like Lovable, Cluely Mhmm. Etcetera, etcetera. And, yeah, you can kind of I mean, the article is like very, very, very long Okay. Detailed, but it just goes into
Speaker 2:Erin Griffith shares like the key claim. Erin Griffith, of course, is over at the New York Times. And she quotes this, Dell built a machine a machine designed to make clients complicit without their knowledge to manufacture plausible and deniability while producing exactly the opposite. And a lot of people are having fun with the fact that the Dell founders were in the 30 under 30, which, of course, has surfaced a lot of people. I think there's are there really 1,830 under 30 Yes.
Speaker 2:Every year? That's true?
Speaker 1:Oh. Or
Speaker 2:is that like doc DocuSign?
Speaker 1:I you're saying all in.
Speaker 2:Oh, maybe maybe overall. Yeah. I know that there's multiple cap I it
Speaker 1:used be I think it used to be that there was just there was actually 30. Yeah. And then Forbes realized, like, what if we scaled this?
Speaker 2:Yeah. This is the plan. Scale the Midas list. 100 Midas lists. So you get 10,000 VCs paying you top dollar to rank.
Speaker 2:It should be an auction. So Austin Petersmith says, not gonna lie, as we've been going through a grueling SOC two process with Vanta, one of our sponsors, I have felt a lot of FOMO reading about Delve customers getting it done in three weeks. If all this is true, then no more FOMO. So he's Milo. There are some things that you just can't short.
Speaker 1:Milo pulled up a post from the CEO from April that says the CEO says, when you step into the office and you're founding AI engineers on his third all nighter. Mhmm. His team never shopped stopped shipping. Milo says, third all nighter of what? Compliance?
Speaker 1:I don't want my security company shipping 3AM code. So un very unfortunate situation. Not gonna make any Mhmm. Any real assumptions, but, this story's definitely not over.
Speaker 2:Well, let me tell you about MongoDB. What's the only thing faster than the AI market? Your business on MongoDB. Don't just build AI. Own the data platform that powers it.
Speaker 2:And let me also tell you about Lambda. Lambda is the superintelligence cloud building AI supercomputers for training and inference that scale from one GPU to hundreds of thousands.
Speaker 1:So the snakes post.
Speaker 2:We're not we're not doing the snake post. We're not No. I hate snakes.
Speaker 1:We're not we're not doing Woah.
Speaker 2:I refuse to pull up a snake post. Woah. We're skipping straight to Okay. Bruce Lee. Okay.
Speaker 2:This We're skipping way down.
Speaker 1:Okay.
Speaker 2:We're watching the not Bruce gonna
Speaker 1:make John watch a snake video.
Speaker 2:I hate snakes.
Speaker 1:Do you wanna close your eyes?
Speaker 2:I saw it. I saw it.
Speaker 1:This video is definitely like terrible to watch.
Speaker 2:It's also fake. It doesn't exist. I'm Irish. No snakes in Ireland. We gotta You gotta do that.
Speaker 2:Snakes are banned.
Speaker 1:You gotta do that bit where attaches like a No.
Speaker 2:You would not do that to me. Under no circumstances, we will be watching Bruce Lee fight Chuck Norris in the way of the dragon because this is the way that we pay our respects to Chuck Norris who, of course, passed away at the age of, I think, 86. Norris. He was 86, and this is one of the most iconic fight scenes in movie history. Have you seen The Way of the Dragon?
Speaker 1:Of course. Of course. Not. This
Speaker 2:scene was unique. It was set inside Rome's Colosseum, and it was often cited as a turning point for how martial arts were portrayed on screen, particularly because they didn't use actors. So both Bruce Lee and Chuck Norris were legitimately high level fighters. Norris was world karate champion at the time. They cast him in part because of that, And it has a much more, like, grounded, credible feel as opposed to, like, previously, like, more stylized kung fu films.
Speaker 2:And and you can see this with the Bruce Lee actually directed and choreographed this himself. So Lee had full control. So the director didn't say anything. And they do these cool, like, punch in shots. Look at this.
Speaker 2:So you're seeing nice wide. You can see exactly where he is. There's no body double. And then we're gonna zoom in. And then what are we gonna do again?
Speaker 2:We're gonna zoom in again. And so we see his face, and he's just sitting there waiting. Brilliant shot. So so much time to breathe and understand and feel what he's feeling. The music, footsteps, breathing, clothing movement, the cat, of course.
Speaker 1:Any snakes?
Speaker 2:Yeah. No snakes, I don't think. I haven't watched the whole thing. The camera often stays wide. This is this stands in contrast to something like Bourne Identity.
Speaker 2:Very, like, fast cuts. Close ups. Much easier to get something that feels intense when you're cutting and chopping. It's much harder to make something like this where you see the full body, you see now we're in slow mo. They're they're they're shotting back and forth.
Speaker 2:The empty arena gives a gladiatorial vibe, a sense of ritual combat. Visually frames the fight as mythic, not just physical. Bruce Lee is learning mid fight. Norris has the edge with his rigid karate form, but Lee adapts. He loses his stance, increases his mobility, switches his rhythm.
Speaker 2:We gotta talk over it or else we get demonetized and banned. So gotta I gotta I gotta figure it out. Anyway, we're very we're we're we're very sad that that he is no longer with us, but he leaves behind a massive legacy in a portfolio of films including the, you know, TV shows as well, Walker Texas Ranger, which was constantly on TV when I was
Speaker 1:a kid. Well, rest in peace What else going to a legend.
Speaker 2:Let me tell you about AppLoven. Profitable advertising made easy with axon.ai. Get access to over 1,000,000,000 daily active users and grow your business today. And let me also tell you about Sentry. Sentry shows developers what's broken and helps them fix it fast.
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Speaker 1:So Bernie Sanders Yes. Had a conversation with Claude. He did. Video was posted yesterday. Yes.
Speaker 1:Justine Moore says he did the meme.
Speaker 2:He did the meme.
Speaker 1:Bernie says pretend to be a scary robot. I'm a scary robot.
Speaker 2:Yeah. Yeah. Taylor Lorenz time time to this too. So this reminds me of that tweet was that was like typing I'm evil into a Google Doc and getting scared. Yeah.
Speaker 2:There's a little bit of that. Will Minitis had another take. He said a trillion dollars was spent on AI risk teams and no one thought to hard code into the model to not tell Bernie Sanders that you do crimes. Very funny. But this is the correct way to disclose that you're talking to an AI model.
Speaker 1:Yeah. Do you think he was inspired by the Vanity Fair piece and then immediately shipped this?
Speaker 2:The Vanity Fair piece, like, buried the lead and, like, it was it was surfaced in, a bunch of screenshots later that made it look like the entire article was AI generated, which it wasn't. Like, the Vanity Fair article did have access to a bunch of people, and there are some interesting vignettes in there. But this is very clear from day one what's happening. Like, he's talking to Claude, and he's investigating and and, you know, sharing his fears. And I I think this is a great way to actually share what you're doing and make it very clear.
Speaker 2:And so, people are mixed on this. Miles Brundage
Speaker 1:says, worst part of the Bernie video is using Sonnet. Not sure why folks are so mad about the other stuff.
Speaker 2:That's very funny.
Speaker 1:Then Hopes
Speaker 2:tacos. Revenge. Delicious tacos. I also smoked a grok and it's it's burning. You know, like this and then no.
Speaker 2:No. Don't don't click that. But you can imagine what happens there. And then Oops.
Speaker 1:Revenge did made the card for us.
Speaker 2:Thank you.
Speaker 1:Signed.
Speaker 2:Signed in the it's great. Anyway, let's move over to Montana. One and only Moonlight Basin. There's a property that made it into the timeline. Oh.
Speaker 2:Pool. New. Okay.
Speaker 1:This is a new hotel.
Speaker 2:Okay.
Speaker 1:Got to visit the property Oh. A few weekends ago with
Speaker 2:I saw some promotional material
Speaker 9:for this.
Speaker 1:Yeah. It is it is absolutely stunning.
Speaker 2:Okay.
Speaker 1:I I wanna have Sam, the founder of Cross Harbor
Speaker 2:That'd
Speaker 1:be the great. Developer on the show because he is he's basically, in my view, felt like he was the mayor Mhmm. Of Big Sky. He's developed All it. And all these incredible properties.
Speaker 1:Donated a hospital
Speaker 2:Yeah.
Speaker 1:To Big Sky too. Just said here's the hospital
Speaker 13:That's cool.
Speaker 1:For the local community, which is amazing.
Speaker 2:Does it have zebras?
Speaker 1:Not no zebras.
Speaker 2:Does it have tortoises?
Speaker 1:For 5,100,000.0, this safari like estate comes with zebras.
Speaker 2:Oh, you got a solution to my I need zebras.
Speaker 1:Animals realm free at California's one three seven Oak Hill Preserve, which has a five bedroom lodge and a helipad. I'm loving
Speaker 2:This is this is crazy. Okay. Wait. I I can't believe, the the value here. I feel like anything that has zebras and tortoises should be up in the double digits.
Speaker 1:Zebra. I don't know how much it costs to get a zebra, but you should get like a 10 x multiplier on it.
Speaker 2:Yeah. For sure.
Speaker 1:So like it's like having an AI researcher.
Speaker 2:Visited Africa for the first time in the eighties, he said, but his heart never left. He he proposed to his now wife, Bernadette Kraft, in a hot air in a hot air balloon. That's elite. Above the Serengeti National Park. The couple got married in Nairobi, Kenya in 1990 in 1988, and two decades after, two two decades ago, after taking their three sons to Victoria Falls in Zimbabwe.
Speaker 2:Brian started wondering how he could bring some of the African experience closer to home. Can I recreate a mini Africa that's a short distance away from our house? Thus began a years long process of developing roughly 137 acre safari like sanctuaries in Ione, California. Is that Ione or Ione? I don't know.
Speaker 2:With a helipad and a collection of animals including tortoises, alpacas, East African plains, zebras,
Speaker 1:I think it's a cow.
Speaker 2:Oni. A oni. Okay. So now approaching the age of 70, Kraft, is a commercial real estate broker, entrepreneur, and aspiring screenwriter, is listing the vacation property for $5,100,000. Approximately 15 animals are included in the offering.
Speaker 2:That's only less than a 10 x multiple per animal. Known as Oak Hill Preserve, the estate is about 40 miles from Sacramento where the crafts live. The animals roam freely on the property with access to plenty of water and grass. Craft likes to drive around the estate in an old pickup truck he outfitted with benches in the back and lights in the front and rear. The idea is to go looking for animals like you would on a safari.
Speaker 2:Kraft assembled the property by buying three separate par parcels over a five year stretch starting in 2007. It had the right amount of open space like a savannah and the right amount of trees like you're in a thicket. Kraft improved the land, a former cattle ranch bit by bit starting with no climb fences, roads, and underground power lines. Throughout the property, Kraft said he tried to evoke Africa with curved roads and buildings with rounded edges. One of the first structures he built was a bunkhouse for a group of friends.
Speaker 2:I've got a group of knuckleheads, he said. I did it with them in mind. It was a guy thing. The wives put it put up put up with all of us.
Speaker 1:Then Someone says knuckleheads Knuckleheads? And you don't immediately think of a specific group.
Speaker 2:This is amazing This in California. Circle. Just driving around this California state and just seeing zebras roaming is amazing Incredible. Ostriches. This is this is a treat.
Speaker 2:This is a treat. A few years ago, Kraft said his friends chipped in to buy him a Jeep with animal print paint. We were all having breakfast all of a sudden. I hear the theme of out of Africa. He recalled then one of the guys pulled up in the Jeep.
Speaker 2:Was quite a surprise. He completed the main lodge on the property around 2018, spanning around 4,200 square feet. It has five bedrooms. There's a cafe for dining near a creek in the property, as well as entertaining space that Kraft calls the cigar bar.
Speaker 1:John, you have to get this place.
Speaker 2:This is extremely me.
Speaker 1:This is so you.
Speaker 2:This is extremely me. Kraft said that he is at the estate every week. It's basically just a family getaway. His children and their friends spend their spend time there too, and his oldest son got married there. Wow.
Speaker 1:Why why is he selling?
Speaker 2:Why is he selling? What's wrong? This is this has gotta be some Jurassic Park style thing where, like, he's been doing some rare zebra crossbreeds that are about to take over. He's like, yeah. The electric fence works well.
Speaker 2:It's no climb. You're like, but they've learned to fly. I'm not I'm not exactly sure. The property has as many outdoor amenities including basketball court. That's gonna be big.
Speaker 2:Basketball's making a comeback.
Speaker 1:Krats said selling his but he promised his wife to list a property when he turns 70.
Speaker 2:Oh, okay.
Speaker 1:That's when that's when you should be selling your primary home Yeah. Moving to the to your to your ranch.
Speaker 2:Okay. I'm I'm how far is it?
Speaker 1:Ione? Ione in Amador County is home to wineries and equestrian properties, and it has become a second home market for people from the Sacramento area. Local Yeah. Luxury market is It's really far, but it has a helipad.
Speaker 2:Yeah. Six hour six and a half hours straight shot, maybe seven hours straight shot in a car. But if my plan to ban speed limits happens and you can drive there 200 miles an hour instead of 65, you'll get there in two hours.
Speaker 1:It's a flat two hours right now from San Francisco. But get this. What? By train Yeah. It'll only take you six hours.
Speaker 9:Wait. Did you guys miss this line? It says one of his friends discovered what he believes to be a century old gold mine.
Speaker 2:Wait. Really?
Speaker 1:I He's just prank he's pranking everyone right now.
Speaker 2:This is crazy.
Speaker 1:He just I think he wanted to just show off his I think he just wanted to show off his ranch. So he's like, yeah. I'm selling.
Speaker 2:I'm selling. He's not selling this thing.
Speaker 1:There's no way.
Speaker 2:Zero
Speaker 1:He just wanted the he just wanted the journal feature.
Speaker 2:We do we do need to get this guy on the show, though. He seems like he's just had a great life and a great time. Seems like a good, good person to learn the the ins and outs of commercial real estate from. Quickly, let me tell you about Plaid. Plaid powers the apps you use to spend, save, borrow, and invest, securely connecting bank accounts to move money, fight fraud, and improve lending now with AI.
Speaker 2:And, somebody who is selling is Orlando Bloom. He put his longtime Malibu home on the market for $12,000,000. He spent millions redoing the four bedroom house. Now, it's for sale. It can be you.
Speaker 2:It is above El Matador State Beach. You're gonna have to tell
Speaker 5:me if that's a good beach. Is this a It is a fantastic beach.
Speaker 2:Okay. It was the primary home for a full decade.
Speaker 1:Lot of tourists there.
Speaker 2:Lot of tourists. Okay.
Speaker 1:Which is
Speaker 2:somewhat of a downside. Some somewhat of a downside. Okay. So it's in a gated community. Stunning.
Speaker 2:It's in a it's in a gated community. Only Jordy can tell us if it's a goated community, though. The Malibu House has interiors by the artist and furniture designer Roy. Mhmm. Bloom did an extensive renovation that cost more than twice what he paid for the house.
Speaker 2:He bought the house in where he bought it in sold he he sold a separate Malibu house in 2024 for 4,100,000.0. How much did he actually buy the house for? I forget. But
Speaker 1:2.5.
Speaker 2:2.5. And then I guess he spent more than 5 renovating it, and now he's looking for 12. So he said he's reluctant to let go of the Malibu house, but he rented it out last year and realized that he likely was not going back there. It felt like it might be the right time to let it go, he said. And he's somebody that picks up the phone when the journal's calling, which we love to hear.
Speaker 1:Listing agent is Somebody Chris Cortazzo.
Speaker 2:No way. Again, Cortazzo.
Speaker 1:Basically, has almost half of all the high end listings in Do
Speaker 2:you know how he described the Ground Floor when Orlando Bloom bought this house? He described the Ground Floor as a bit higgledy piggledy, which is a great line. It was a bit higgledy piggledy, but
Speaker 1:But I needed it for my knuckleheads.
Speaker 2:I needed it for my knuckleheads. He said he's got the most amazing drives through the Malibu Canyons. He's very
Speaker 1:That is true.
Speaker 2:He has a pool, a Jacuzzi, and a sauna, I believe. And so you can go check that out. There are there are some other amazing properties in the mansion section, but we will have to get to those later. First, let me tell you about Vanta, automate compliance and security. Vanta is the leading AI trust management platform.
Speaker 2:And let me also tell you about Graphite, code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster. And without further ado, let's bring in our first guest of the show. RF Kenmore is in the Eastern Way to the TBPN, all for guns and menswear inside. We can give him a couple minutes because there is a tequila billionaire who is selling a Balinese style Hawaii home for $32,500,000.
Speaker 2:It's designed to look like a temple. The house on Kiholo Bay was built in Indonesia, disassembled, and then rebuilt in Hawaii. That is crazy. Billionaire John Paul DeGioria's Hawaii home has traveled I like this as he has.
Speaker 1:I like this home.
Speaker 2:Just take the home
Speaker 1:Bring it Bring it.
Speaker 5:Another That's pretty remarkable. Island.
Speaker 2:So in the eighties, he had the the Balianese style, Bali Bali, from Bali. Home designed and constructed by artisans in Indonesia, then disassembled and shipped to Hawaii's Big island where it was rebuilt on a waterfront lot. The process cost a couple million dollars. He's a cofounder of the tequila brand Patron and the hair care products company John Paul Mitchell Systems. Now, the property with a shingled roof designed to resemble dragon skin is coming on the market for 32,500,000.0.
Speaker 2:What a remarkable property.
Speaker 1:You really haven't lived until you've gotten food poisoning in Bali.
Speaker 2:I've never been. Have you been to Bali?
Speaker 1:Couple times.
Speaker 2:Surfing? Yes. A couple times. Yeah. Isn't it a really, really long flight?
Speaker 1:It's a terrible flight.
Speaker 2:It's a terrible flight. Right? It's very inconvenient.
Speaker 1:It's Especially when you're a college kid Yeah. And you're broke Yeah. And you're just like I I used to with surf trips I'd go and I would just search the rough dates that I'd want.
Speaker 2:Yeah. Yeah.
Speaker 1:Yeah. And then I would just buy the cheapest possible flight
Speaker 2:Yeah.
Speaker 1:Which would usually involve like a seventeen hour layover and like the worst place on earth. Amazing. But I would do it because my time was basically worth nothing.
Speaker 4:Love it.
Speaker 1:And it was worth it.
Speaker 2:But shouldn't you have just gone to an island that's has similar like features closer? Like, have The Caribbean. Is there not good surfing in The Caribbean?
Speaker 1:No. No. That's actually
Speaker 2:yeah. You can't surf in The Caribbean. Question.
Speaker 1:Great No. No. The the it's not to say there isn't good surfing in The Caribbean.
Speaker 2:It's not like Balm.
Speaker 1:But The Caribbean all areas are seasonal. Right? Mhmm. So different times of year, it's gonna be better conditions. Mhmm.
Speaker 1:But The Caribbean, you have situations where, like, it's really good for six hours
Speaker 2:Okay.
Speaker 1:And then it's flat.
Speaker 2:Okay.
Speaker 1:Whereas Bali, you're gonna have, like, more consistent surf and it's an island, so you can, like, go around it depending on the conditions and whatever swells.
Speaker 2:Okay. Well, I believe we have our next guest in the Rish Room waiting room. So let's bring in R. F. Kenmore into the TBPN UltraDrone.
Speaker 2:How are you doing? Good to meet you. Thank you for taking the time. How are you?
Speaker 1:What's going on?
Speaker 7:Boys, how's it going?
Speaker 2:It's fantastic. You're looking sharp. Of the weekend. You are looking sharp. Love having anonymous commentators on the show.
Speaker 2:What can you tell us by way of an introduction? What is your focus? How would you introduce yourself without doxing yourself?
Speaker 7:Yeah. Big big fan of menswear, big fan of the clothing industry, brands, apparel, products. Mhmm. Worked in worked in men's brands in the industry for over ten years now.
Speaker 13:Overnight success.
Speaker 2:It also says here you're a hotel bar evangelist. Explain that.
Speaker 7:That's right.
Speaker 2:Yeah. So special about a hotel bar versus just a normal bar?
Speaker 1:I It's an elevated experience. Why?
Speaker 2:It doesn't necessarily need to be an elevated
Speaker 1:out. Why? You can know about They don't know about it? Follow RF Kenmore yet.
Speaker 2:Okay. Okay.
Speaker 7:It's a bit of a it's bit of a filter, you know? Okay. You don't always have you don't always have people wandering in off the street. Sometimes the bar, you have to go through the lobby to a room to a room and just kind of filters people out, you know? Mhmm.
Speaker 1:I wanted to get the update on the menswear industry broadly where the like, what's happening in clothing
Speaker 2:Who's the biggest winner right now?
Speaker 1:Yeah. Who's the big yeah. Who's who's the biggest winner?
Speaker 2:Yeah. Who's on absolute, like, generational run?
Speaker 7:I mean, on on the on the the largest level, I don't really don't really know in terms of luxury or those like major players. But on the more like specialty sort of scale, probably Buck Mason, you know?
Speaker 13:Oh, Kind
Speaker 7:of digging the conversation. They're opening tons of stores. I think they're up to like 50 or 60 stores now.
Speaker 4:Wow.
Speaker 7:Men's From what I last heard, men's still drives pretty sizable portion of the business, which you don't really see. Usually women's overtakes as soon as you introduce it.
Speaker 1:Oh, interesting. So yeah. Probably So even so so would you expect at some point women's to overtake men's at Buck Mason or is it just the name is like so it's just incredibly masculine? But maybe there's still Yeah.
Speaker 7:Would an opportunity there. I would probably I would probably expect it to from what I hear, it's doing really well. They have sort of a good, like, foundational business going with t shirts and sweats and sort of like coastal, you know, linen and good fabrications.
Speaker 1:Well, would say a large part of their success is that they put a vintage Porsche in their stores. Right?
Speaker 7:Yeah. Have you guys ever seen their Porsches they have in the stores?
Speaker 2:No. Have. Did they actually?
Speaker 1:We went to that suit fitting with Yeah. The amuser. It was at a Buck Mason.
Speaker 2:Oh, that was?
Speaker 1:That's a Buck Mason.
Speaker 2:And they did have a vintage portion Yeah. In the
Speaker 1:Yeah. Yeah. Yeah.
Speaker 2:Yeah. Yeah. Where where did that trend come from? Is there like a clear lineage or is it just like a
Speaker 4:Yeah.
Speaker 2:Broad trend?
Speaker 7:We need we need you guys know Know Your Meme
Speaker 2:Yeah.
Speaker 7:Where it like traces the origins of every meme? Need to know your portion. I don't know. I I I I know that ALD had the the portion there, little Soho pop up that they did for their Porsche collaboration. And that might have predated any any Buck Mason
Speaker 1:Yeah. Porsche. I I think it it it makes total I mean, I I it's funny because I've always appreciated I I I really love your post when when you're just kind of joking around and be like, no. They couldn't possibly put a put a car in their in their retail store because it is so cliche now. But I think it I think it's a way for it's just a way for a brand to signal like who they are because cars are extremely personal.
Speaker 2:Yeah.
Speaker 1:It says, if you're a car person and you choose to invest your money in cars, your car does say something about you like it.
Speaker 2:Yeah. I would love to walk into a menswear store that had like a Dodge Viper sitting there, like a SRT or yeah. Maybe like a Dodge Durango SRT.
Speaker 7:The three wheeler? What's that one that they always play the loud music at?
Speaker 2:Oh, is that the Ariel Adam? No. I I Slingshot or something. I forget what Slingshot.
Speaker 7:Yeah. Who's gonna be the first? Who's gonna stand up and be the first?
Speaker 2:That would be good.
Speaker 1:I like it. I would is actually going into How does a brand thrive today? Everyone knows that apparel brands, know, you you're putting You're having to spend so much money on inventory. You don't necessarily know what's gonna be hot. But what is what are the the brands that are doing the best in men's wear doing from a supply chain standpoint?
Speaker 1:Are they, you know, leaning into US manufacturing? Are they are they are getting or are they still, like, dependent on on Asia or or Latin America? What's what's the approach that's working?
Speaker 7:Yeah. I mean, there there's no one in terms of supply chain or or sort of like the the operational side of the business, I don't think that there's one model that that you have to adhere to. I know that COVID really scared a lot of brands into diversifying their supply chains. There were some brands that were just super super heavily concentrated in China even with just one vendor base. And so that's really forced people to look into Latin America, India, different areas like that.
Speaker 7:But as far as, like, what drives success, I think community is is more important than it's ever been. You know, you look at the the
Speaker 1:actually what does that actually mean though? Because Yeah. Usually when people like for example, like I've bought a bunch of stuff from Buck Mason over the years, but I've never been like Yeah. Identifying as like I'm in the Buck Mason community.
Speaker 2:Community you mean would mean like you walk in and there's, you know, you got your your Dodge Viper there and then they they hand you a white monster and there's like a mosh pit that you can like go and like thrash to like Limp Bizkit with in. Okay. And like you're gonna be fighting guys in the mosh pit, but you're gonna be building community through that.
Speaker 1:Got it.
Speaker 2:That's what it means to me.
Speaker 1:Okay. But Maybe you have a future in men's work.
Speaker 2:I think so. It's possible.
Speaker 7:You look like it. You're looking you're looking dialed. You're kind of mocking Jordy right now.
Speaker 2:I know. Yeah. Casual Friday over here has has crept in to to every day.
Speaker 1:But you almost wore jeans
Speaker 2:I I was very close to wearing jeans, but I did throw on the the dress pants. Walk me through the guide to visiting New York. We we head to New York every once in a while. We're usually at the New York Stock Exchange downtown. I believe it's in downtown there.
Speaker 2:Where's the best place to live? Where's the best place to hang out? What's the guide for the the the West Coast fellow who's visiting or or planning to move to New York?
Speaker 7:Yeah. Everyone's got different that's kind of the cool thing about about Manhattan. There's kind of different flavors depending on which neighborhood you go to. Mhmm. I I think the Upper East Side is coming back.
Speaker 7:People are are rediscovering the Upper East Side, kinda like, like they're the first ones to do it, which is funny. But my favorite neighborhood still is like the nomad, flat iron sort of area. It it's central, but it's it's not it's it's not in the middle of anything, if if that makes kind of sense.
Speaker 2:Does the city have feel of, like, it's back? Because there was a lot of, like, doom and gloom over, like, mom Donnie, everyone's gonna move to Florida. Everyone's gonna leave. And but what's the actual vibe on the ground been?
Speaker 7:I yeah. I I think it's the same as it's always been. I I think, you know, you you walk around anywhere anywhere busy. You know, you go to any of like the shopping areas, whether it's 5th Avenue on Flatiron or you go to a nice a nice restaurant somewhere that's popular, they're they're slammed and they're impossible to get into. So I don't I don't think
Speaker 2:What is your pitch for tech people who want to dress more want to elevate their wardrobes in New York specifically? I feel like the finance guy has some sort of shape to them that's been established going back. There's lots of great reference points. You can say I'm a garden gecko guy or a Patrick Bateman guy or there's plenty of, like, iconic cinematic portrayals of the Wall Street guy, less so in the New York tech scene.
Speaker 1:We got some.
Speaker 2:The New York tech scene is certainly growing, and it feels like it has an opportunity to distinguish itself from the Silicon Valley scene.
Speaker 7:I don't know. I think you just establish, a tribal council of of tech leaders to to really hone in on the personal aesthetic. But if you're an individual, I mean, I think a uniform is always a great place to start. Just pick a couple of good things, a top, a bottom, and then buy buy really good versions of those things that are are obviously well made and that fit you really well. You need to take them to a tailor or whatever to make that happen, and that's good too.
Speaker 7:And and then just buy multiples. And then from there, can kind of introduce maybe a stylish piece that that you found really interesting that, you know, just happened to be kind of like a one and done.
Speaker 1:What's going on with various life lifestyle brands in different kind of subcultures whether that's running or golf? Are they all gonna converge on a long enough time horizon because they need to to scale? What what are you seeing there?
Speaker 7:Well, I don't know if you saw my tweet about Malvern. I guess they're converging. They're just they're just grabbing at whatever hype, they can find transitioning from golf into into run clubs. But I I I don't know. I mean, it's hard.
Speaker 7:Like, you look at the hardcore running brands that are kinda driving the culture right now, Bandit, Satisfye, there's a couple smaller ones like OOVOO or I don't even know how to say it in The UK or Soar. Could you could you imagine a world in in which they they pivot into golf or or they expand, I guess, phrased into golf? I don't know. I think that would feel kind of disingenuous and and you would end up with this, like disparate feeling brand identity and and assortment. So I don't know.
Speaker 7:I I think lifestyle is probably the more the more natural.
Speaker 1:Yeah. It's an interesting dynamic where it's easier to break out and establish a foothold as a brand by really focusing on like a Correct. A subculture like running. But then can you is is running you know, what are you running from? Right?
Speaker 1:Is it is it Mhmm. Is it somewhat of a is it an Instagram kind of, you know, fad? Right? People are are can can running support
Speaker 2:Mhmm.
Speaker 1:10 different, you know, micro brands over time? Probably. But at the same time, like, feels like very like on trend right now to and and We'll see Yeah. We'll see how how durable it is.
Speaker 2:So outside of following you, what's a good way for folks to get into men's wear? If I'm talking to somebody and they're in in cars, I might recommend Doug Dumuro, go down that rabbit hole. There's, you know, there's a whole you can pick up a copy of Car and Driver. You could start watching Drive to Survivor. Just watch f one.
Speaker 2:You'll learn about cars broadly. What are the different entry points? What are the great, you know, either creators or publications that you think help people get up to speed on menswear?
Speaker 7:Yeah. That's That's kind of why I started tweeting, honestly. Sure. It's hard. I don't know that there is one.
Speaker 7:And I think the offering terms of voices publications and more of like the institutional side of it, they're I don't know, I I feel like kind of aimed a little high. Like, they're they're looking at temporary brands. They're looking at runway. They're looking at things that may may not be super useful to most people. And and so I found a really hard time trying to find relatable, digestible content or advice.
Speaker 2:Sure. Sure.
Speaker 1:Yeah. For for new Jeremy people Kirkland. Hello. Okay. He's a buddy.
Speaker 1:Cool. But I he's had a he's had a great podcast forever that kind of goes through and interviews a lot of the great kind of founders and creative That's cool. Leaders in the industry. Yeah.
Speaker 7:He's cool. There's there's that dude no. I'm blanking on his name. I don't know.
Speaker 1:Well Last question. Do you think do you think surf brands can ever make a comeback? Do you think that any people will be like, I gotta get the new Billabong drop. I gotta get the new Quicksilver. Yeah.
Speaker 1:Is there a chance? They've they've fallen off so incredibly hard that I feel like warp tour. Yeah. The the fall off is just insane. I like, people just Oh.
Speaker 1:Like young teenagers, they wanna wear chrome hearts and Yeah. Yeah. And, you know, and and street wear. They that last they don't wanna be caught dead in billabong. But everything all these things come back around eventually.
Speaker 2:Yeah.
Speaker 7:It's kind of funny. I was just talking to a buddy in the industry about this how Bill Bond Quicksilver or whatever kind of, you know, they they were tapped into culture. They were kind of running things for a little bit. But now that I mean, that vibe is probably running brands or or golf brands maybe a little bit. There is the one brand, Florence Marine X, which John Don Florence is the face of.
Speaker 7:Yeah. Which is backed by the Hurley family and he's having a go at this sort of like modern take on on a surf brand. You have Outer Known as well. Kelly Slater's Outer Known brand that he co founded. It's definitely more of like a lifestyle
Speaker 1:the question though is can any of these brands like break back into culture?
Speaker 7:Can Billabong or Quicksilver break back specifically?
Speaker 1:No. No. I'm just saying like even Outer Known and and Florence Marinex, like, you don't see like Instagram kids in a GT three RS, you know, rocking like outer, you know, Outer Known. And my question is like, could you ever see one of those peep one of those archetypes, you know, rocking a surf brand? It seems it seems like a stretch.
Speaker 1:But
Speaker 7:It's it's hard. Yeah. It's it's hard to imagine, but I don't know. I mean, crazy things happen.
Speaker 1:Billabong's gotta sign Yeah. ASAP Rocky as creative director.
Speaker 2:Most of the GT three RS owners seem like the type to put the surfboard on the roof, which is like ridiculous. Obviously, no one would ever do that. I
Speaker 1:mean, this is the anyway, thank you so much. Great to you. Thank you for thank you for all of your
Speaker 2:Enjoy your weekend. Commentary. And we'll chat with you soon. Chatting. Have a
Speaker 5:good time.
Speaker 7:Find a fortune store somewhere.
Speaker 1:We will. You're the man.
Speaker 2:Let me tell you about Turbo Puffer. Serverless back during full text search. Built from first principles in object storage. Fast, 10 x cheaper, and extremely scalable. Before we bring in our oh, is our next guest available?
Speaker 2:Yep. Fantastic. Let's bring
Speaker 7:in Mitch hear that?
Speaker 2:From ArcBoats. That's the sound of the boat going. You need to play that constantly. Let's bring in Mitch Sound that's a good one. From ArcBoats.
Speaker 2:How you doing, Mitch?
Speaker 5:Going on, Mitch? I'm doing well. Thanks for having me.
Speaker 2:Thanks for hopping on. I'm I'm I'm super familiar with you. Maybe we talked on the phone a couple years ago. But since folks out there might not be, please introduce yourself and the company.
Speaker 5:Yeah. My name is Mitch Lee, cofounder and CEO of ARC. Yeah. ARC is on a mission to electrify the marine industry, rebuild this very outdated industry around more modern electric powertrains.
Speaker 2:Yeah.
Speaker 5:This is similar to what happened in rail many decades ago. Every train today is electrically powered. They're diesel electric, hydrogen electric, battery electric, but they're all electric. Yeah. We're marine industry is gonna do the same thing and and we're out to a a big lead there.
Speaker 2:Yeah. We were talking to Travis Kalanick about how he I think he had, like, a tour of Ceronics factory and was like, I wanna water ski behind that. But I think you can technically
Speaker 1:He's so addicted to water skiing. He wants to he wants his drone to help him water ski. Yeah. He's like, what if I can't get anybody to drive the boat?
Speaker 2:Yeah. So so talk to us about
Speaker 13:The Marlin.
Speaker 2:Like, the Marlin. What can you do on an Arc boat? Fish and wakeboard and water skis, everything on the table. And then and then yeah. Is there an autonomous vision in the future?
Speaker 5:Yeah. So briefly on the business, where we started was we we had this core thesis. The entire industry is gonna go electric over the next decade or so. We started by hardening that technology in the consumer space. So our first boats to market were consumer boats.
Speaker 5:A speedboat that you could water ski behind. Now we're ramping production of a wake sport boat. So something that you wakeboard behind.
Speaker 1:John's a lake guy. I like this. I'm more of an ocean guy. I like John.
Speaker 5:This is it's lake boats. Lake boats. That's my that's what I grew up with.
Speaker 2:I love it.
Speaker 5:So we're ramping production of We're making three boats in it.
Speaker 1:Is there anything you can do on the electric side to make, like, the biggest wake ever, or is it more just kind of like Yeah. Hey. We want kind of something that
Speaker 2:Like, like like, plaid was, like, for the price, like, the fastest zero to 60 this time. Is there an equivalent, like, oh, electric unlocks this? Because obviously, everyone knows about the environmental benefits, the cost benefits, like Maintenance. But the maintenance. But, like, is there gonna be, like, a killer feature from electrification?
Speaker 5:There is. I mean, there are multiple killer features. One of the biggest ones is actually sound.
Speaker 2:Okay.
Speaker 1:Yeah.
Speaker 5:The it's quiet when you're on the boat and Cool. Like operating
Speaker 2:Oh, so
Speaker 1:you can just talk. That's that's amazing.
Speaker 2:That's amazing.
Speaker 5:You don't smell the fumes of it. Sure. The torque on it,
Speaker 1:so Well, that's a that's a that's a downside for John. He loves the smell of, you know, fumes in the morning.
Speaker 2:Yeah. Seeing the oil pool of as I jump into
Speaker 5:the water is like Exhausting down into the water and cancer that you're Yeah.
Speaker 2:It's great. Exactly.
Speaker 5:No. But the the torque at low speeds is very high. So you can when you punch the throttle, the it's it's immediate acceleration.
Speaker 2:Yep.
Speaker 5:The way you corner, it handles like a jet boat. So you could whip this it's electronic steering, electronal electronic throttle. Okay. So you could whip this boat around with a like, you know, steering with one finger and throw people off the boat because it's so powerful.
Speaker 2:Right.
Speaker 5:And then it's software defined. So every part of this is, yeah, bit powered by software. You've got in house firmware, in house software, in house telemetry system. Over there updates. You hit one button.
Speaker 5:The wake is perfectly configured for whether you're wakeboarding or wake surfing on the left or right side of the boat. We can set that all up in software, it's just a punch of a button.
Speaker 2:That's amazing. So, Taco, talk to us about where you're going next, how much money you've raised, what the plan is going forward because, obviously, you you you found this beachhead, metaphorically, and you're expanding.
Speaker 5:Yeah. We we just closed a $50,000,000 series c. That brings our total amount to fundraise.
Speaker 2:That's great.
Speaker 5:Love the energy of
Speaker 2:Play the boat sound. I wanna hear the boat sound again. That's
Speaker 5:Guess we fired up in the morning.
Speaker 2:I love it. That should be your so 50
Speaker 5:that's my any time somebody calls me, that's the sound that it makes.
Speaker 2:That's great.
Speaker 5:We we just closed that
Speaker 1:Sorry. It's Friday. We're having fun. Sorry to keep it Don't worry.
Speaker 5:I'm hyped up on Celsius. We're good to go.
Speaker 1:Good. Good.
Speaker 5:We so we just closed that round. It brings our total funding up to a 160
Speaker 2:That's awesome.
Speaker 5:Million. And the again, we hardened this technology on the consumer side. We're now we're at at a, call it, a $40,000,000 run rate on deliveries of those boats. Every month, it's going up. Every month, our margin is expanding.
Speaker 5:Yeah. We are now expanding that core technology, the platform that we built to commercial applications and defense applications. We signed a $160,000,000 deal for ShipAssist tugboats. So giant tugboats out on the water that push and pull cargo ships.
Speaker 1:Oh, wow. Cool. So that so that that rapid acceleration and and that, like, turning capability that you mentioned, I imagine, is is huge for if you're like, makes a tugboat potentially a lot more, like, accurate or something.
Speaker 5:You definitely get a lot of torque benefits from it, but a big part of it is they care about profit. They care about like, tugboat operators wanna make more money. And the way that you make more money is you cut your OpEx in half by reducing the fuel cost, by reducing the maintenance cost, by keeping that vessel, which is a $20,000,000 vessel online and running more, like, a greater percent of the time. And then you also avoid a bunch of compliance burdens. These things are cancer spewing machines.
Speaker 5:So by going electric, you avoid a lot of the compliance burdens for like, hey, do
Speaker 2:you EPA.
Speaker 5:More cleanly burn bunker fuel. Sure. Instead, it's like this thing doesn't even have fuel tanks on board. You can put a diesel generator on the back of it, but it's a it's a much cleaner
Speaker 1:What about what about autonomy?
Speaker 5:The in the commercial space, that's not as big of a deal today. Mhmm. On the consumer side, I mean, we we have a fair amount of autonomy. You could hit a button and the boat will just hold its position in the water. Sure.
Speaker 5:We'll
Speaker 1:Oh, without without an anchor, you're saying?
Speaker 5:Yeah. Yeah. Anchorless anchoring.
Speaker 1:That's awesome. Cool. Yeah.
Speaker 5:So if you're out in Lake Tahoe Yeah. It's it's pretty deep there. You can't drop an anchor, but you can just hit a button and say, I'm gonna jump into the water because my boat's staying slow.
Speaker 2:Just stays there. That's amazing.
Speaker 1:That's really cool.
Speaker 5:I mean, we, as kind of a little side project on a on a weekend, took the boat out and made it remote controllable. So you could just kind of remote control it and Yeah. $300,000 art sport. So if you wanna I mean, I don't think this is legal in maybe any state but Texas, but you can like pop
Speaker 2:Travis lives. I think you gotta give him a call. Yeah. You can you can
Speaker 5:get one of our boats and just remote control What
Speaker 1:about what about the what about the elephant in the room? Jet skis. When are we gonna see jet skis? Was gonna say, where where are we
Speaker 2:going with this? I
Speaker 5:I don't jet skis are a tough problem. It's it's like it's kind of like motorcycles. There's there's a reason that they haven't gone mainstream electric yet. Yeah. I think we might see that one day, but the cost I mean, they're low margin
Speaker 2:Sure.
Speaker 5:Vehicles, and so getting the cost down to be competitive and stuff.
Speaker 2:What about
Speaker 1:We're going Oh, you're saying so it's hard to low margins. You don't care about me having fun?
Speaker 2:Love of the game. What about the charging infrastructure at different marinas? You want a jet ski really badly?
Speaker 1:I mean, the the sass
Speaker 2:Well, you just want this because tow you into the big waves. Right?
Speaker 1:I just Jet skiing is euphoric.
Speaker 2:Yeah. If you're at Nasira, you need an electric jet
Speaker 1:ski that's autonomous to
Speaker 2:tow you into the
Speaker 1:environmental, you know, it's hard with a jet ski. You're thinking about, you know, you're the the the dolphins are not having a good time.
Speaker 2:Oh, they don't like them?
Speaker 1:You need to do it for the dolphins.
Speaker 2:Okay. Okay. For the love of
Speaker 5:For the dolphins. That's that's our that's our motto at our Mark,
Speaker 2:for the dolphins. He's huge dolphin fan. Talk to me about the charging infrastructure at Marinas. Is is this something that you partner with docs to get up to speed? Is there infrastructure that's pretty easy to just plug into?
Speaker 2:How how how has that The
Speaker 5:the way I describe this is Yeah. Electric boats make way more sense than electric cars.
Speaker 2:Mhmm.
Speaker 5:That's not to say electric cars don't make sense. They just have hard problems to solve. You have to solve for road trips.
Speaker 2:Mhmm.
Speaker 5:Gas cars are really good at what they do. Like, going electric on the water is a no brainer.
Speaker 2:Sure.
Speaker 5:Charging infrastructure is a good example of this. Marinos are already wired for power Sure. Because big boats use shore power Yeah. To power refrigerators or batteries
Speaker 1:for a
Speaker 2:long time, so you need a lot of charging infrastructure. So And and
Speaker 5:if you have a dock, then your dock is usually wired for power for lighting or if you have a boat lift, that boat lift already runs two forty.
Speaker 13:Oh, yeah.
Speaker 2:So that makes sense.
Speaker 5:It it charging is a pretty tractable problem. It's not perfectly solved, but it's we've we're out to a huge head start there. When you get into commercial and defense applications, we just design the vessels so that they don't need charging. We're installing charging, but you don't need it. So everything is hybrid electric.
Speaker 5:It's diesel electric or hydrogen electric or nuclear electric. Mhmm. Like, air aircraft carriers today are nuclear electric,
Speaker 13:for example. Mhmm. They
Speaker 5:have an electric propulsion system, but then where the power source is coming from is is nuclear energy.
Speaker 2:Interesting. Yeah. It's fascinating. Well, thank you so much for taking the time to come chat with us. Congrats on the round, and, we'll see how
Speaker 1:We gotta get out on the water.
Speaker 2:We gotta do it.
Speaker 13:There's nothing like this boat.
Speaker 5:Come demo it. Sign up for I a mean
Speaker 2:It'd be awesome.
Speaker 5:To anyone that's watching this too, come out for a demo. It's it's a, it will shift your perspective on the industry.
Speaker 2:Amazing. Amazing. Well, great to have you
Speaker 1:on the show, man. Super fun.
Speaker 2:And we'll talk to you soon. Alright. Cheers. Our next guest is here in person. We have Bucky Moore from Lightspeed.
Speaker 2:Let me first tell you about Shopify. Shopify is the commerce platform that grows with your business, lets you sell in seconds online, in store, on mobile, on social, on marketplaces, and now with AI agents. And without further ado, Bucky Moore.
Speaker 10:How are you doing? It's great to be in the temple today, guys.
Speaker 2:First time in person. Thank you.
Speaker 10:Yeah. Think it's It's an honor. Last time we did this, think we were both kinda just getting started on our journeys. Right? It was Yeah.
Speaker 10:Early last year and so you guys have just ascended. Yeah. More sponsors, bigger studio.
Speaker 2:Better hair.
Speaker 1:Know I you I didn't know you were jacked. Yeah.
Speaker 10:Yeah. It's it's a it's a great day today. We had we had leg day today. Oh. Beautiful day in Oh, in LA.
Speaker 2:Once a week Monday or twice a Friday. Monday Friday. Yeah. Yeah. Serious business.
Speaker 1:Alright. We we maybe that. 52
Speaker 2:leg days a year.
Speaker 1:We're five days a week in the gym with the team. But we do like we've been doing a a technology brother split which is a more traditional So it's like, you know, leg day would be Wednesday Yeah. But then you don't get the second leg day.
Speaker 2:It's like, oh, Saturday. Oh, Saturday. Guessed it. Recovery though. Has how has Lights Bay been?
Speaker 10:It has been fantastic. I mean, think we're all just lucky to be in the center of the industry right now given all the amazing stuff that's happening. I think since we last spoke, we we closed 9,000,000,000 in new funds, and we have been Don't don't hit the
Speaker 2:Gong for us. Alright. Smash that thing. Congratulations. There you go.
Speaker 2:There you go. So 9,000,000,000 funding. And and that's across venture and growth?
Speaker 10:That is correct. Yes. So Lightspeed is is a generalist firm, and I think something that's that's very unique about us is we have produced like really meaningful returns in just about every sector from healthcare and life sciences to enterprise to consumer
Speaker 2:It's a
Speaker 1:shame
Speaker 10:it's and financial services. It actually is though. I and I think it took me a while to realize that it's it's the secret I think of of of the platform is that we were willing to take deep, deep technical risk and very high conviction bets early. And that's I think that's the secret.
Speaker 2:Yeah. So what have you been focused on? More on the venture side?
Speaker 10:Absolutely. So I've spent all my time kind of in and around AI on the early stage side. Obviously, we've been spending a lot of time kind of looking for these like really, really transformative opportunities in the infrastructure layer, so new inference platforms, new model providers. And then in the application layer, I mean, I just feel like I'm seeing the future every day. There are companies that are just bringing this intelligence to bear in unique ways with these industries that I think is really gonna be the tip of the spear in how the world adopts this technology.
Speaker 10:So when we talk about the SaaS apocalypse, I think a lot of that is is is somewhat overblown. It's like, would agree with what Pat and Carl said yesterday in the sense that people do business with people. And ultimately, I think it is so much harder than a lot of these blog posts make it out to be to actually get this technology into these industries, into these end users hands in a way that actually makes it actionable. And so we've been very actively investing in both layers. And I I think there are places where the model providers are gonna do a good job of that, but they are still gonna have to shoulder the responsibility of that last mile.
Speaker 2:Yeah.
Speaker 10:And then I think there's gonna be places where app providers are are gonna be really prolific and and build very valuable
Speaker 2:Yeah. Let's let's work through the supply chain a little bit or the or the stack because AI means so many things right now. Starting with, like, it feels like the the ship has sailed a little bit on, like, training new models for the most part. The big labs are really big now. Huge.
Speaker 2:Maybe going IPO this year.
Speaker 1:Is that true?
Speaker 2:Is that that what? True?
Speaker 1:I mean, there's so there's so there's enough There are a lot of Neo lab at least
Speaker 2:Is that interesting to you?
Speaker 10:So I would say as a firm, we have we have been very active in investing in a lot of these neo labs. So we're an investor in Mistral, SSI, thinking machines. Okay. I do I would also concede that I think the bar to reach the frontier today is Yeah. Is higher than it's ever been.
Speaker 2:Yeah.
Speaker 10:And so I think for us, it's really just a a question of
Speaker 1:now seem like you can have unlimited effectively unlimited resources and not meet the get to the frontier. And so as an investor, they're really you have to see that the team actually has like some Yeah. Like capital is not enough.
Speaker 10:I think I think there's an argument to be made that there are just no secrets in this industry anymore and scale is all you have. And I think there are, you know, really three, maybe four labs that are Sure. That are able to to really play that game.
Speaker 2:I'm more I'm more asking like, yeah, you've made bets on Neolabs. Those make sense. Great teams. Are you expecting to make a whole bunch more Neolab bets that are, like, truly, we're not on top of any open source model? We're gonna do the full thing in 2026, 2027, or has that ship sailed more or less?
Speaker 10:Yeah. I wanna I wanna be careful with what I say here, obviously, to to to remind myself that this is all about exceptions. But I think what we're seeing is the bar is way, way higher.
Speaker 2:Yeah. Yeah. That's
Speaker 10:And so everyone talking about sample efficiency Yeah. Everyone talking about continual learning. I mean, these are things that the large labs are very, very focused on as well. Yep. But I also think that there's a pretty valid argument to be made that the bureaucracy of these large labs is real.
Speaker 10:Like, in the same way that OpenAI was able to exploit Google's bureaucracy by scaling a transformer before they could. I think you can argue that such opportunities will exist in the future for, you know, for OpenAI and Anthropic being distracted by making the products that earn them all this money better.
Speaker 2:Sure. Sure. Yeah. That makes sense. What about, like, much deeper in the supply chain?
Speaker 2:We there was this article in the information a few days ago about a company called Giga that has raised no venture funding. It's a it is a small team that got into, like, building electrical infrastructure, and it's it's in the AI narrative. They were initially selling, you know, transformer equipment, like physical transformers, not the transformer architecture, to, Bitcoin miners, then they pivoted into the AI data center. Boom. They are seeing a lot of success.
Speaker 2:Would you ever dip down that deep, or is that sort of out of your purview? Obviously, exceptions to everything.
Speaker 10:But Oh, absolutely. I mean, I think my, a few of my partners have been spending a lot of time on just the power problem. Yeah. And I think from my perspective as someone who tends to invest more in the in the software layer Sure. What I'm seeing is that a lot of these neo clouds are actually blocked by their ability to raise the credit they need to actually bring this power online by the quality of the counterparties.
Speaker 10:And so if your counterparty is OpenAI, for example Mhmm. The debt providers are gonna be very, very aggressive and open to to to flowing you the the funds that you need to to bring all this online. But on the other hand, these neo labs who aren't generating revenue, may not have a near term path to revenue, they're looked at very differently as counterparties. And so that's, I think, a big blocker for for these neo clouds to bring a lot of the capacity that they have online. And so how do you how do you unblock that?
Speaker 10:Obviously, we need new and more efficient means to generate electricity. And so we've been very actively investing in nuclear.
Speaker 2:Oh, really?
Speaker 10:We we're investors in a company called Base Power that's doing some very interesting work. Right? Go, Zach. Yep. And, I think we will continue to be very active in that area.
Speaker 10:And and my my partners on the hard tech side are very busy trying Then to figure that
Speaker 2:on the other side of the stack, the application layer, what advice do you give to founders? What are the green flags for okay. You're building in the you're building in the application layer. You're never gonna compete in training a foundation model. Maybe you do some fine tuning, but there's other secrets in the business.
Speaker 2:There's other sources of modes and strengths that you will see compounding. And you don't think you're gonna get steamrolled by an OpenAI or an Anthropic anytime soon. Yeah. For What's what's Right
Speaker 1:right in this moment, I mean, this week it's been top of mind over the last couple weeks is like, I expect that the dynamic we're seeing right now between cursor and the labs is what we'll see for pretty much every other vertical. Right? I expect to see that in legal. Like, you know Finance has come out with like plug ins Helps legal. See.
Speaker 1:But you can imagine them just saying like, yeah, we now have a 100 people working on
Speaker 2:Mhmm.
Speaker 1:Just the legal application of our technology. Sure. And so I think that every across that doesn't mean, you know, doesn't mean these companies can't still do well. Yeah. But it I I mix I'm I'm trying to think through, like, the timing Mhmm.
Speaker 1:Where where OpenAI and Anthropic just, like, just, like, basically go all in on on some of these bigger categories.
Speaker 10:Mhmm. Yeah. So I'm glad you brought up Cursor and like the software engineering space because it's obviously the most mature, so I think it's very illustrative as is legal. And interestingly today, you guys I'm not I'm not sure if you guys covered this in the beginning of the show, but like the the model that Cursor launched. So so first off, you know, it's very obvious now that these companies are gonna be training their own models.
Speaker 10:Yeah. And it's it's it's also the case that they're gonna be starting with one of these open weight models, which today are Chinese, which as an American citizen Yeah. Doesn't sit super well with me. We are investors in a company called Reflection AI that aims to change that. But on the other hand, I do think what Cursor is out to prove is that the user data that they're capturing is gonna allow them to set up this reinforcement learning loop that does allow them to to build something that is like frontier quality.
Speaker 10:At the same time, it appears as though these companies are still sending a lot of their most complex queries to Codex to Sure. Or rather GPT into into Claude. There's obviously a margin problem there that that is pretty hard to compete with when you think about the competitive products that OpenAI and and Anthropic have. Yeah. And then when you shift gears to legal, my assumption would be that, like, Harvey and Legora will have to do the same thing that Cursor's doing.
Speaker 10:And so I think this is kind of an elephant in the room right now as to whether
Speaker 2:Doing that data.
Speaker 10:Whether post training open models allows you to, combined with, like, unique user feedback that you get from being an application provider, is is is defensible enough. And so when I when I think about, like, the companies that we're looking to invest in, I would actually say that I think that is just gonna be an inevitable challenge for any of these industries that hit a maturation point of AI adoption, like legal and software engineering have. But on the other hand, I think there's some industries where they're they're very large. They're far enough afield from where the model providers are today, and probably will continue to be. And the context engineering to actually get the the customer data into the model is just so messy.
Speaker 10:It requires going across different business functions. It requires a lot of, like, hands on, forward deployed engineering. Yep. I think those are the kind of companies that we get really excited about because I think just being really good at that is not only defensible, but it also allows you to start to generate this, like, feedback loop with your customers where you hear a lot of their secrets. And those secrets allow you to feed that back into how you make your product better at the expense of anyone else playing in the space because if you're serving the customer, they're only telling you those secrets.
Speaker 10:Right?
Speaker 1:Yeah.
Speaker 10:And I think Palantir is like a good example of this in sort of the pre AI era, and I I think we're gonna see many companies ascend in in in that same way. And so the companies that we're investing in the application layer, I think, have a really clear story around how that is hard and defensible enough that they can make it a core competency.
Speaker 2:Let me throw What about you that that sort of riffs off of that, and and you can tell me if it seems like a fit. Like, Amazon, obviously, the goal is to be the everything store. But there were certain categories, regulated medical products, HIMSS, Roman. Those companies were able to break through because it was out of the core competencies. Is that a reasonable thought where it's not just about the flywheel of what's happening with those customer secrets, but it's also just such a sticky, messy problem that the big one size fits all solutions can't necessarily attack them?
Speaker 10:I think there's sort of a b to c version of this analogy, and then there's like the b to b one. So the b to c one is where you started.
Speaker 2:Okay.
Speaker 10:What you've seen with Amazon is they've obviously like kind of done what Costco does, which is when they see a category that's sort of commodity enough, they can create a generic version of it and they can have sort of margin, you know, advantages there that that allow them to make a lot more money and compete. Mhmm. But I think the the b to b analogy is the one that I think of a little bit more, which is to say, like, if you look at Amazon Web Services Sure. They've let companies like Snowflake and Databricks build really, really large businesses on top of them because it's driving consumption of their underlying infrastructure.
Speaker 2:Oh, interesting. Right? That's a good one.
Speaker 10:And while AWS still has data warehouse and and data infrastructure products, they're, you know, they're probably 80% as
Speaker 2:good. Yeah.
Speaker 10:So if you're if you're in the business of just kinda simplicity and you just want to kind of buy everything from Costco or buy everything from Amazon Web Services in this case, like, you're going go that way and many large enterprises do. Yep. But on the other hand, Databricks and Snowflake have built really, really healthy businesses and and the health of those businesses accretes to the the success of Yeah. Of Amazon Web Services. I think you're gonna see something very similar with the model providers, which is they're perfectly happy letting, you know, 75% of the large industries out there just kinda sit on top of them.
Speaker 10:And then I think the 25% of those industries that they're gonna play in, those are the ones that I think you wanna, you know, be very mindful of and and avoid. And and I think what what the sort of hysteria around the SaaS apocalypse is right now is that we're starting to see the aperture of that 25%, like, rear its head. Yep. And I think what that what that means is you you you naturally take a step back and say, wait, like, it's not just gonna be software illegal. Yeah.
Speaker 10:And so I think that's the conversation that we're having every day is like, what's next? And I think Claude Cowork is is sort of an example of where you could also just imagine that there's sort of this new class of of of AI app company that essentially connects to something like Cloud Cowork via MCP and actually is in a really interesting position. So like, we're seeing companies emerge where, for example, in the coding paradigm, there may be places where you want to jump out of the code and jump to a design canvas, for example. Right? And so there's a company, for example, that's trying to just be called Paper that we think is really interesting, that is trying to provide a canvas that literally just allows you to go from like the code you generate in Claude
Speaker 2:Sure.
Speaker 10:To the canvas and back. Right? And today, that's something that Figma hasn't focused on as much, but I'm sure will. Granola, which is a company in our portfolio, like, they've launched an MCP server, and people are using it very aggressively in Claude. Sure.
Speaker 10:And I think what you're gonna start to see happening is that the monetization model of a lot of software companies is gonna shift actually monitoring sorry, metering the the rate at which the MCP server is consumed. So, for example, every time I call Granola's MCP
Speaker 1:Yep.
Speaker 10:Granola should make a little bit of money. Right? And I think that's actually gonna be a very healthy business model and one that's probably durable
Speaker 2:Jordy? Going Sorry. Cut you off.
Speaker 1:How do you think about opportunities at the super early stage where you where a lab could do it, but wouldn't because it's only in the near term like a $300,000,000, $500,000,000,000 revenue opportunity. Because I think there's like lots of you know, you look at companies like Open Evidence or Suno that have built like, you know, pretty big businesses. And like I think like Suno seems to be a beneficiary of like the battle between Anthropic and OpenAI right now, specifically because OpenAI is like, well, we could put a bunch of resources into a, you know, you know, a music product, but, like, that's not the most important. Like, if we just even if we knock it out of the park, it's not gonna, like, necessarily change the dynamic at the frontier. Are you thinking about are are you seeing opportunities at the early stage where you're like, yes, the labs could do this.
Speaker 1:They would be in a good position to win, but it's just not even a big enough opportunity. And so a small focused team can, like Yeah. Get to a $510,000,000,000 valuation and then have the opportunity to, like, you know, scale from there.
Speaker 10:Yeah. So I'll start with Suno. So we're also one of the largest investors in Suno. Love Mikey. I was honestly very skeptical of the company as a music aficionado.
Speaker 10:Like, it was just difficult for me to conceive that music could be generated by AI that I'd actually wanna listen to, and I've been proven wrong and really changed my mind on the company. And so I think the sky is the limit for them. Like what's interesting about Suno and more broadly audio models is they're just not as big as language models. Meaning, like, don't need as much compute to build really good audio models. And so I think the scale advantage that the labs have is is is just a little bit less of a thing in that area.
Speaker 2:Interesting. Yeah. It's more taste driven.
Speaker 10:That's right. That's right. But but I think coming back to this, hey, there's gonna be 75% of the industries that they sort of rule out is, like, just immaterial given how big they get. And, obviously, they're growing so nonlinearly that, like, what's material for them changes by the week. Yeah.
Speaker 10:And so I think there is gonna be a pocket of really, really venture scale industries that the labs just do not service adequately. And I think that's what we spend every day thinking about is, like, what are those spaces and how do we find the best teams working on them? And so so I think that's that's again why I sort of take the other side of this, like, you know, b to b app businesses is sort of over
Speaker 1:What's a what's an overlooked category right now?
Speaker 10:I mean, I wouldn't say it's underrated, but I think, like, power is still overlooked. It's just so important. Yes. It's such a bottleneck
Speaker 1:that it's big and such a bottleneck. And and the fact that you can name some nuclear companies, you can name you know, we've had base power on a bunch of times, but, you know, you would think there would be a bunch of, like, base power style opportunities.
Speaker 10:I think we're probably rate limited by capital going into that industry right now. That's just my intuition. The other area that I think is, like, more core to where I spend my time that I still think is underrated is inference. Right? So like the GPU supply crunch that we're seeing right now is is largely in part as Dylan has said on the show before, like due to the fact that not only these consumer products, but the b to b products like, like Cloud Code and Codex are just really taking off and and creating like insane demand for inference.
Speaker 10:I actually think that in the end, inference, if you look at it as a market, will be much, much bigger than cloud computing was pre ChatGPT. And if you think about, like I mean, we're talking, like, hundreds and hundreds of billions of of of spend every year. And if that's true, like, I think there will be very, very large inference platforms built in each modality. So there will be an inference platform for real time video models. There will be an inference platform for, you know, open source and custom language models.
Speaker 10:There will be an inference platform built specifically for long running agents. So I think we're just gonna see that industry, which today looks like one industry break up into many because of how big it is and how Yeah. Room for specialty.
Speaker 1:Yeah. I mean, there there was some some leaks around like fall this week. Right? Yeah. It's just been on Yeah.
Speaker 1:You know, an insane trajectory and like kind of, you know, they've they've done a bunch of rounds back to back but going that quickly from a 0 to a $8,000,000,000 valuation while staying like relatively out of the like ten years ago, there would have been like a bunch of beat reporters just recovering, you know, just covering fall and they've like or like kind of just happily being, yeah. We're just building a huge business every
Speaker 2:And you can sort of imagine, like, inference specialization, if that's the thesis that plays out, happens both on, like, the model level, the data level, the taste level, the harness, but also down to the hardware. Like, there's certain configurations, certain chips. I mean, we see this through, inference acts from semi analysis. AMD chips will outperform NVIDIA chips with certain models. So if you're in some some particular inference vertical, you might have a very different semiconductor supply chain.
Speaker 10:Yeah. And I think one one interesting thread to pull on there is if you start to relax the latency constraint when it comes to inference. So for example Yeah. Like, I'm just telling my software agent to go do work and come back to me in a couple days when it's Yep. Done I probably don't care as much about latency.
Speaker 10:Yeah. I care about throughput. And if that's true, then you start to look at these chips that Intel and AMD have, and they look really, really good. They're cheaper Totally. And and and really stand up.
Speaker 2:Yeah. And you can imagine that for, like like if there's if there's if I'm doing, like, blood work or something, and I have to physically mail blood, and there's, like, no AI that can short circuit that, so I'm gonna be waiting a day or two to get the data back. And the and the model that processes the data or sequences it or something takes an hour instead of a minute, like, that's not going to be mission critical to
Speaker 10:act You don't need Blackwells for that
Speaker 3:to go.
Speaker 2:Exactly. Exactly. Whereas if I'm doing a Google search or I'm on my computer, like, actively doing work, throwing that on Cerebras or something or Grok is gonna speed things up and Yeah. Specifically in the developer workflow too.
Speaker 10:Yeah. I think where this starts to get really interesting is, like, if you ask yourself, like, will there be more of those types of workloads or less? Like, I think it's quite obvious more
Speaker 2:Yeah.
Speaker 10:If we're moving to these long horizon, sort of more autonomous agents. Yep. And so I think there's a world in which the sort of latency constraint that drives a lot of the hardware purchase and design decisions today starts to be relaxed, and we see a much more heterogeneous
Speaker 2:Yep. Ecosystem there. Makes sense.
Speaker 1:Fundraising timelines today, faster than ever?
Speaker 10:For venture or for startups?
Speaker 1:Early stage. No. No. No. Yeah.
Speaker 1:Yeah. I'm talking about startups. Like, if if you back Yeah. Saw feed, how long how long, you know, what
Speaker 2:what are Eight companies in the current YC batch that are raising over at over a 100,000,000 valuation, which is crazy because demo day is next week. And so how do we even know that this is happening? Usually, you wait until after demo day.
Speaker 1:Not if you have the kind momentum.
Speaker 2:Average, the average price is around 40, and clearly, deals are getting done very, very quickly.
Speaker 1:Yeah. I I and then, like, any any you know, is is the the global conflict that entered into, is that is that slowing things down at all Mhmm. Yet? Is there any kind of like, pullback that you're seeing?
Speaker 10:So I'm not seeing the geopolitical impact early stage fundraising anyway. But coming back to kind of the velocity question, look, I think right now, we so first of all, what I've learned is that you don't really get to decide how much of the best companies you get to own, and you don't really get to decide the valuation. They decide it, and you have to decide whether you wanna be involved with them or not. Right? And right now, I think early stage is in this tricky place where, like, for a seed round, like, you're really generally getting around 10% ownership, right
Speaker 2:Yeah.
Speaker 10:For the most competitive rounds. And as a result, if you go back to kind of like what made the early stage model work, it was like owning somewhere between like 1520% of companies that that become really really valuable. So the way you kind of have to play this now as a multistage firm is you get the 10% in the seed and then you effectively have to be in a position to buy up in the next round the series a. But at the same time, the series a's are are also ballooning in price, there's really not a lot of derisking because the valuation or because the the velocity is so fast, right, by comparison to even like a couple years ago. So right now, what you see a lot is like you get 10% in the seed, the series a happens somewhere between like, you know, one fifty and in some cases like 300 post.
Speaker 10:Then And you end up kinda trying to co lead that or lead that, and you end up in, like, the low to mid teens. And so it's it's just a different time, but, like, that's that's what it takes nowadays. And there are obviously exceptions to that, and I'll gladly buy more than 10% of a company at seed if I'm excited about it and the founders are open to it. But that is the reality that we live in. And I think what that means is, you're just you're you're building a basket of companies that tend to be kind of in that low to mid teens ownership more often than not.
Speaker 2:Are ghost ship zombie acquisitions affecting venture economics at all? Or has it been So these are
Speaker 10:like legacy software companies that are slow growers and not
Speaker 1:No. More like licensing deals.
Speaker 2:Growth start up with a bunch of venture capitalists that then a bigger company comes along and says, wanna buy you, but we're public. And so we can't just acquire the whole company and go through FTC approval. So instead, we're gonna hire the whole team, do a licensing deal, pay a dividend to the cap table. But there's always this moment where you're like, did everyone get comped what they expected? Did the employees get what they deserved?
Speaker 2:Did the venture investors get what they deserved? Did the founders get what they deserved? And it's sort of this renegotiation moment. And there was a fear, at least last summer, that the Silicon Valley social contract might be violated. And it felt like at the moment maybe that was a fear that didn't come true because in every case, most people seemed like they wound up with jobs at cool companies, at big bigger companies, and they did get paid out.
Speaker 2:But but has that has the fear calmed down, or is there still, a low level ambient fear in venture?
Speaker 10:So first of all, I would say that the idea that an acquirer will try to structure deals in a way that disproportionately rewards the founders is nothing new. Right? That's been happening. That's a tale as old as time. Sure.
Speaker 10:And there is sort of this this term used in the industry called the founder bribe where to get a deal done
Speaker 2:Okay.
Speaker 10:The acquirer may in fact try to route as much of the proceeds toward the the founders and the core team as possible. Sure. It's also perfectly rational because, like, why why would they wanna give me any money as the investor? Right? They'd they'd much rather give, money to the people that are actually doing the real work
Speaker 1:Yeah. You're a job. Value. Right? Done at that point.
Speaker 10:And so it also
Speaker 2:depends on, you know, is it an asset sale or a talent acquisition or somewhere in between and everything's sort of a, you know, a blurry line.
Speaker 10:Yeah. And so with respect to these, like, creative structures that you're referring to, right, like the Scale AI, the Windsurfs, and so on, like, without commenting on specifics, what I would say is this is obviously, an artifact of trying to get around a lot of the the regulatory environment that makes buying companies difficult for one. Two, the bankers out there today are just pitching these left and right because they're, you know Interesting. They're out there trying to transact, and they think this is a much more realistic way to transact.
Speaker 2:That's I didn't realize that.
Speaker 10:And and three, I think I think the jury is still out on whether the acquirer really gets like the the return on these that they're looking for. Right? Like a lot of these are still in flight and and I, know, you I I just don't know. So so but what I can tell you is that, like, it's becoming more common. I told you why it's becoming more common.
Speaker 10:Yeah. And and the bankers are are very, actively trying to consummate these types of transactions Yeah. Every day.
Speaker 2:How introspective should a new founder be as they embark on their entrepreneurial journey?
Speaker 10:Yeah. I
Speaker 2:Because there's two sides to it. Like, I totally get the the Travis was sitting here telling us that he just runs through walls. Everyone was super pumped up about that. I love that attitude. I think that the chopping wood, putting your head down, incredibly valuable.
Speaker 2:At the same time, I love the the the founder's question, the t Peter Thiel question. What do you believe that very few people agree with you on? That's introspection. Like, you're you're actually just reflecting on, where do I disagree with everyone? Maybe there's opportunity there.
Speaker 2:And both maybe there's a combination, but I'm wondering how you how you deal with it. Like, how much of the time are you just probing founders' market size, progress, revenue versus where do you wanna be in a decade? What are you doing with your life? Is this actually the right job? Or do you really just want to get back to working at Google and this is just a way to get a promotion?
Speaker 10:So my experience has been it is very hard to be an effective leader without some form of self awareness, which requires introspection. Mhmm. Right? Let's just get that out of the way. Mhmm.
Speaker 10:At the same time, I think, you know, this this sort of, this position that Mark is taking Yeah. Or the the retard maxing, you know, article that has has has been going around the Internet is, like, there is there is absolutely merit to just, like, moving forward and putting one foot in front of the other. And so
Speaker 2:I think Avoiding analysis paralysis. Exactly.
Speaker 10:And so I think it requires a healthy balance of the two. But I I would disagree with Mark that I just I have not found it's possible to be an effective leader without some form of self awareness. But at the same time, order to inspire people, you also have to demonstrate an ability to move forward through difficult moments. Yeah. I think that's where the, you know, the Yeah.
Speaker 10:Won't say it again.
Speaker 2:And I think I I I think that's that's actually closer to his real belief. But in the context of that conversation with David Senra, like, it it's better to distill the overall thesis, which is that right now, most people would benefit from just having a little bit more forward motion. So let's let's collapse that into some somewhat more of an exaggerated, you know, take that that then can fly and it gets exaggerated in many ways. Yeah. Exactly.
Speaker 1:Yeah. What advice, if any, have you given portfolio founders that may be on the earlier stage side that see seem like they're gonna need to raise over a $100,000,000 in the next twelve to twenty four months. Like, how how concerned should they be around, everything happening in geopolitics right now? Does the conflict in The Middle East kind of like turn off the tap or or slow down any LP dynamics for some of these mega funds?
Speaker 2:Should startups keep their corporate treasury in oil right now?
Speaker 10:Probably Well Not. Probably not.
Speaker 2:Look volatility with bank balance.
Speaker 10:You know, what's happening in Middle East right now is a is a tragedy, and it goes without saying that the, many of the countries that are most most adversely affected by that have been very, very active players as as LPs. And I think the impact that this could have on Mhmm. On the way they behave in that sense is is like very unclear. But like, it seems likely that there will be some impact and so that has a consideration on venture
Speaker 1:Yeah. My my my example was like, if somebody's, you know, doing a lot of angel investing and they're working at Google making $3,000,000 a year in a cushy job and then they, like, lose their job, like, do they keep do they keep, like
Speaker 2:Yeah. We were
Speaker 1:ripping a bunch of do they keep ripping a
Speaker 2:bunch of this. And he was saying, well, like, the LPs that write checks from, like, Gulf sovereign funds, they live in New York, and they operate in New York, and they take meetings in New York. But there's just a matter of, like, you know, the that sovereign wealth fund is zero sum. And if it's going towards something else, it can't go into a venture capital firm and work its way through the And, ultimately,
Speaker 10:the, you know, the the royals get to decide.
Speaker 2:Exactly. The priorities. And there's a whole bunch of other vertical considerations.
Speaker 10:And priorities could be shifting right now.
Speaker 2:Totally. Totally.
Speaker 10:So so I do not know what's gonna happen. I think those are the considerations. And I think when we advise the companies that we're working with that are in a position where they actually can raise that kind of money Sure. We have not yet seen, the market, indicate that that there isn't robust interest for companies that are really scaling rapidly and and have earned the right to go out and and Yeah. Raise money that way.
Speaker 2:Yeah. It seems like we're we're we're pre, like, some sort of correction where we're like, oh, yeah. Like, you can't raise the same round. It's just, you you might raise 80 instead of a 100 and your competitors in the same boat, you're probably gonna operate very similarly with just a little more.
Speaker 10:Yeah. I would say that I do think the bar for these neo labs to raise that second round of funding is much higher coming back to what we were talking about. And so I think to to be able to get one of these off the ground, it's possible to do so as someone who has been a part of doing really novel research at one of the big labs Yeah. And and is someone who can probably build a really outstanding research team. On the other hand, I think to raise that second round of funding where you get to go really big and build out that frontier cluster, I do think it's gonna require some mix of, hey, the work we're doing is unlocking new commercial opportunities, and the work we're doing is truly truly novel at the level of the research.
Speaker 10:And I think absent those things, what I've seen is that it's it's a lot harder to pull those second financing rounds together. And I think this is kind of a dead zone for these neo labs where if they can't go big with compute Yep. It's really, really hard for them to to to be on the frontier.
Speaker 2:Yep. Did you have a conventional path to venture?
Speaker 10:I would say I had a pretty unconventional path. So I I grew up down here. I started my career in lower middle market private equity. I moved up to the Bay Area to work at corp dev at Cisco. And then I think that's when things started to get a little bit more yep.
Speaker 10:Proud sponsor. Right? And it turns out that the the the founding leader of the corp dev team at Cisco was actually one of the cofounders of Lightspeed, Barry Eggers.
Speaker 2:No way.
Speaker 10:And that team has definitely produced a number of VCs that remain in the industry today. And so that's kinda where I I I I sort of got more conventional. But I think Yeah. Where I started was fairly unconventional.
Speaker 2:So so corp dev at Cisco, were you working a lot of m and a deals? What was the m and a environment like back then?
Speaker 10:Yeah. So when I was when I was there in 2011, this was when we were sort of litigating whether there would be cloud computing or on premise computing and whether cloud computing was something that would be more than like a test and dev environment for the average company. Sure. That definitely taught me that, it's very, easy to underestimate the future when you're one of the And, you know, the rest is history, obviously, with respect to cloud. So at that time, we were trying to execute on a strategy that would put Cisco in a position to own the right pieces where they could both serve enterprises building their own clouds and the cloud providers themselves.
Speaker 10:So we were buying storage companies. We were buying, you know, new next gen networking companies. In fact, like one of the projects I worked on was, you know, trying to acquire, unsuccessfully, is Martin Casado's company, Nicira Networks No
Speaker 13:way.
Speaker 10:Which, know, ended up going to VMware and Yeah. And, you know, really did transform the industry. So shout out to Martin on that.
Speaker 2:That's crazy.
Speaker 10:And and so so, yeah, we were working on a lot of deals like that. We were working on, venture venture investments as well. Sure. Sometimes the companies maybe or an industry is not fit to enter via m and a, so you would invest in the right companies and sort of learn. Right?
Speaker 10:Sometimes you would partner. So, yeah, that's the kind of stuff that we were working on. It was an amazing job, amazing way to get into Silicon Valley and Totally. It, it helped me gain deep appreciation for how much impact these infrastructure companies can make across, like, every industry at a time where everyone was kind of focused on what the next Uber or Snap
Speaker 2:was on your phone. Yeah. Yeah. Yeah. Yeah.
Speaker 2:So, yeah. It actually shows you like the breadth of the industry. Because every day you're looking at some company that is not a household name, is not getting a puff piece in, you know, whatever legacy, you know, journal is out there. But their business is fantastic. They have incredible team and there's a path to just absolutely massive
Speaker 1:Also being able to, like, level check founders that that might be exploring m and a and just being like, well, I've actually bought a bunch of companies. And like, you That's awesome. Actually helping them qualify themselves and stuff like, are you ready for this?
Speaker 10:Yeah. And I and I carry that with me to this day and I wouldn't have that experience had it not been for the time I spent over there.
Speaker 2:Well, Bucky, thank you so much for taking the time to come chat with us.
Speaker 10:Have a good rest of your show.
Speaker 2:Have a good rest of the day. I wish we could hang right about it. We will see you week..com. Console helps AI agents build Console builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution for access requests and password resets. And I'm also gonna tell you about Railway.
Speaker 2:Railway is the all in one intelligent cloud provider. Use your favorite agent to deploy web app servers, databases, and more while Railway automatically takes care of scaling, monitoring, and security. And without further ado, we have Steve Huffman, the co founder and CEO of Reddit. Steve, how are you doing?
Speaker 1:What's going on? I'm
Speaker 6:doing great.
Speaker 2:Thank you How so much are you? For taking the time to come chat with us. You gave a fantastic speech at my y c batch back in 2018, and I really enjoyed that. And, yeah, it's just great to great to catch up with you. I would love for you to sort of just set the table for us for how 2026 is going over at Reddit.
Speaker 2:What are the biggest initiatives that you're working on? How are you spending your day? Just give us get get us up to speed.
Speaker 13:Okay. Twenty twenty six is going, going fast Yeah. Actually. Man, I can't it's like I'm looking at the date now. It's March 20.
Speaker 13:It's insane. So right now we have a, I think single-minded focus on making Reddit more successful for new users. Mhmm. I think that's the part when I when I think about the Reddit machine and the Reddit business, that's the part that I think Mhmm. Has the most potential Mhmm.
Speaker 13:Or the biggest gap to close. Yeah. So like taking a step back, right, Reddit's got content communities for literally everyone. Yeah. And I think we've proven that Reddit can work for anyone, you know, men, women, young, old, nerds, normies.
Speaker 13:Yeah. And so now our task is can we make it work for literally everyone?
Speaker 2:Yeah.
Speaker 13:And making Reddit successful for those new users in that first session. That's the thing that I spend almost all my time thinking about right now.
Speaker 1:What what what are the qualities like, what is the what is the experience that someone has where when they join Reddit that gets them to stick? Like like what kind of journey are you trying to take them on?
Speaker 13:Yeah. I'm assuming like the Yeah.
Speaker 2:The classic like Facebook one was like, if they add five friends, they'll stick around forever or something like that. Right?
Speaker 13:Yeah. And I I'm I'm not even sure that was true for Facebook. Yeah. Although it's it's like a it's like a tale that's Yes, in it's Silicon Valley.
Speaker 2:Yeah.
Speaker 13:But I mean there's probably something through it. And the the Reddit equivalent of that would be you find five communities on Reddit that you love. Yeah. But
Speaker 1:But do you need but do you need five? Because like, you know Maybe one. Growing up yeah. Because for me it was like hip hop heads in Yeah. High school.
Speaker 1:Like, if I typed in like r in my browser, it would immediately just like generate, you know, like populate r slash hip hop heads and I
Speaker 13:just I think go that's actually the answer. Need to find one of those things that is uniquely Reddit, touches you, and provides that experience that you can't get anywhere else online. And then once you do, you find that Yeah. You know, then we've got you. Then we've Yeah.
Speaker 13:Got
Speaker 2:So so I remember the first time people were starting to use the TikTok algorithm, like, feedback was, like, it's creepily good, basically, within, like, five swipes. You if you if you stopped and paused over a car video or a watch video for just one millisecond longer, your entire feed would be cars or watches or whatever you were into. And I'm wondering, of that that customer journey that you're trying to, you know, funnel people towards the right content that they'll they'll love, is it more of a user interface design problem or UX design problem, or is it actually just a compute problem and you want to apply more machine learning, more modern AI tools to bring that content faster, learn what the user is interacting with or observing, and then and then help them along?
Speaker 13:I actually think it's
Speaker 2:both. Mhmm.
Speaker 13:We've seen this over the years. One of the things we can do most consistently to grow is make the product easier. Mhmm. So that would be like the UI. You make it a little bit easier, a little bit faster, easier on the eyes, maybe less chaotic or overwhelming and we just grow.
Speaker 13:Because we have people trying out Reddit every day and it's just for some of them it just doesn't work. But also, right, the the machine learning, the feeds, those early recommendations and insights have almost unlimited upside as well. Mhmm. But I I actually Reddit is probably in that era of of ML. Like, once you're a core user and you're in your feed, if if you express an interest, yeah, we'll go really heavy on it.
Speaker 13:Yeah. Almost too heavy sometimes. Yeah. And it's a problem because some I I I don't know if this is like a normal Reddit user experience, certainly mine. Like people send me weird shit all the time and then, you know, if I if I if I view it in Reddit, I'm like, oh, okay.
Speaker 2:Oh, no. My whole feed is gonna be life. Yeah. Yeah.
Speaker 13:You need finesse required
Speaker 3:there.
Speaker 2:Yeah. What is the shift to mobile been like? Like, what is the story that you tell about making Reddit more mobile focused? Obviously, there's a huge shift in user behavior across all Internet platforms. But what was your individual experience?
Speaker 13:Well, so if if if you look at Reddit's story, like, Arc
Speaker 2:Yeah.
Speaker 13:The shift to mobile for Reddit was slower. Mhmm. Because Reddit, like, we have so much text. Yeah. And so that was like a key we were like a keyboard and screen platform for longer than most.
Speaker 2:Yeah.
Speaker 13:Now, like desktop, desktop is by far our smallest and so we don't really think about the shift to mobile anymore, like the shift happened. Yeah. Maybe for Reddit it happened despite ourselves in some ways, but it's happened. And so now it's more of the shift to the app. I think our one of our largest platforms, I think our largest single platform is actually probably mobile web.
Speaker 13:And then and then you've got iOS and and Android. And so for us, we get so much mobile web traffic because, because of the search referrals from like Google. Yeah. So people are if you're just using the Internet on your phone, you're probably using Google. If you're probably using Google, you're probably using Reddit.
Speaker 13:Yeah. But so getting, helping people kinda cross that chasm between mobile web into the app and doing so in a way that feels good, right, where we're not like coercing a user to download the app, right, which is which is annoying. Know, finding that balance and doing that in the right way, think that, again, there's a lot of there's many ways to do it, and I think there's a good way somewhere in the middle with a lot of finesse. But that's actually where we spend a lot of time thinking.
Speaker 1:Yeah. How does the average Reddit user feel about AI?
Speaker 13:Well, I think the average Reddit user is basically the average person. Yeah. AI right now is polling less than politicians. Yeah. And and last I checked, nobody likes politicians.
Speaker 13:So but at the same time
Speaker 1:But the but the difference the difference but the difference there that I think is funny is, like, like, people, like, you know, may have a negative experience of politicians. But then but with AI, like, people, like, say they don't like it, but then they have, like, all these magical experiences in their life and they use it like crazy and it makes their life better in even a bunch of different small ways
Speaker 4:That's exactly
Speaker 1:ways that they're aware of and ways that they don't they aren't aware of. Right? Like, it's happening under the hood. And so I think at some point I I think at some point it will actually flip. Right?
Speaker 1:Just because it's like a very valuable, magical tool that anybody can benefit from.
Speaker 13:We're we're going through that transition. Yeah. Exactly. AI. Do do you like AI?
Speaker 13:People's overwhelmingly negative. Do you use AI every day? Every looks like everybody. Yeah. And and and you can see this kind of you can see this relationship with Reddit as well.
Speaker 13:AI makes not just Reddit, the whole Internet safer. Right? Things like like violence, harassment, bullying, we can use LLMs now to find and and and just fill filter out to moderate out at at platform wide scale in seconds. It's incredibly powerful. Right?
Speaker 13:The worst job in the Internet used to be looking at the worst content in the Internet. Yeah. People don't have to do that anymore. So that's really powerful. It also happens kind of behind the scenes.
Speaker 13:But then AI writing, like on Reddit and elsewhere, it's just kind of annoying. Right? And we're going through this you see this on Reddit where
Speaker 2:Yeah.
Speaker 13:It's it's not prohibited behavior. Yeah. Like, a human being with a human account uses ChatGPD to make a post.
Speaker 2:Yeah.
Speaker 13:Like that's allowed, but then you see all the comments just flaming them. Right? Thank you bot. Thank you bot is like the new okay boomer. Yeah.
Speaker 13:And and then of course there's just like the maybe spam and other bad behavior, is definitely not allowed. Sure. So but but I think, like, on Reddit, in emails, in school, we're going through this societal, like, calibration about where AI is helpful and not helpful.
Speaker 5:Yeah.
Speaker 1:How did you process MoltBook?
Speaker 13:Oh, yeah. Oh, I I think I clocked that one, within five minutes. I said, this will be a meme for about a week and the world will move on. Yes. And then it was.
Speaker 13:It was it was like a total insider AI meme Yeah. Like fun thing, you know, you know, if if if the accusation is is on the Internet, the Internet's dead, everything's turning into bots, it's bots pretending to be humans. On MoltBook,
Speaker 2:it was
Speaker 13:a bunch of humans pretending to be bots. And so it's like me, it was like AI fan fiction. Yeah. It was like so so goofy. Funny, but goofy and and otherwise insignificant.
Speaker 1:Yeah. What what has been what is like, walk us through, like, the history of of, like, bots on Reddit, how you've dealt with the problem, when they've been bugs, when they've been Features. Features. Yeah. Like, that's a big I mean, even Yeah.
Speaker 1:Even, you know, on on x right now, it very much feels like a bug. There's certain accounts if you look in the comments, so you can just tell, like, you know, every single comment was written by a bot. It doesn't add anything to the conversation
Speaker 2:at all. And yet five years ago, everyone was tagging those bots, remind me or bookmark this or
Speaker 1:other old would say that, like, Grock, like, the the ask Grock Yeah. Is, like, 50% of the time, it's annoying. 50% of the time, it, like, adds relevant context that improves the Yeah. Experience.
Speaker 2:Yeah.
Speaker 13:Yeah. So I think I think the solution to this issue was and always has been through transparency and intentionality.
Speaker 5:Mhmm.
Speaker 13:We've always had on Reddit helpful bots, right, the remind me bots and the haiku bot and, maybe less helpful, but accepted like the grammar correcting bot.
Speaker 2:Sure.
Speaker 13:And then we've had bad bots. But bad bots, we just call spammers. Yeah. Right? They're they're submitting spam or they're otherwise manipulating Reddit.
Speaker 13:That's always been forbidden and we do our best to remove those. I mean, we do it at an absolutely massive scale. It's like a 100,000 to a million accounts a day that we ban. Mhmm. And then with AI, it's not a new problem, there's just new technology.
Speaker 13:And so again, if you're manipulating Reddit, if you're spamming, if you're pretending to be a human but you're not, that's not allowed, you get banned. But we also wanna leave room for helpful bots or even agents, but I think they need to be labeled as such. And then there's that gray area, which is what we're talking about before, which is a human being using AI to write. That's not forbidden, but it is kind of annoying, but we'll let that one play out. And right now what we're seeing is people downvote it, they complain about it, communities maybe ban it.
Speaker 1:Yeah. But at the same time, for every for every post, there when when a human with AI was, you know, writing something, posting it, and it's getting negative feedback, there has to be, like, a number of them that used AI that people don't even know they used AI and and it is just being additive. Right? Like it's not
Speaker 13:It's possible. It's possible. And and in which case, it's probably okay. I think the question is, is there a human behind the prompt? Is it a human's idea?
Speaker 13:Like, I'll give you an example of of AI content that's totally acceptable. Translated content.
Speaker 1:Oh,
Speaker 13:sure. Like, I'm a non native speaker. Like, help me help me write better. Like that's just the world we live in
Speaker 2:now. Yeah.
Speaker 13:And so for us, like Reddit is for humans. Like that is our platform, that is our product, it's human connection and community. So, we're gonna start actually talking about this more so that this is a really apt time to have this conversation. This idea of humanness and human verification and what I call it as in seat. Like, is there actually human using Reddit right now, regardless of the tooling that you're using?
Speaker 1:Yeah. How how do you how do you think about delivering on that?
Speaker 13:I think I think the most lightweight I think there's various technologies. The most lightweight way is with something like face ID. Face ID or touch ID broadly, that's it's in the family of technology called pass keys Yeah. Which I actually didn't appreciate about these like a year ago. They actually require a human presence, like a human has to touch or do or look at something.
Speaker 2:Yeah.
Speaker 13:And so that actually just proves that there's like a person there or gets you gets you pretty far.
Speaker 2:Yeah.
Speaker 13:And so I think that's very lightweight and accepted. I think there's heavier versions like, you know, the ID checking services
Speaker 2:Mhmm.
Speaker 13:Which we have to use, you know, for for, you know, regulations here or there. Yeah. And I think there's in between technologies, like, that the Internet really needs. Like, third party individual, no ID required, decentralized, like, I I don't wanna say identity, but, like, information providers that that there's a there's a need for on the Internet. Because not just Reddit, every platform wants to know is this a person.
Speaker 13:Now Reddit's version is, is this a person? But we don't want to know which person this is. Right? Because part of our promise to our users is we don't know your name, but we do want to know that you are a person. Mhmm.
Speaker 13:And so it it'll be an evolution for us, I think, for a while. And probably every platform, I think, to find the right kind of middle ground here.
Speaker 1:Seed stage or series a startup wants to unlock revenue on Reddit. What advice do you give them outside of giving you ad dollars?
Speaker 13:Build a great product. Build a great product. I mean, that's my advice for every startup.
Speaker 2:Yeah. Like, build something
Speaker 1:They shouldn't they shouldn't do a hostile takeover of a subreddit.
Speaker 13:Look
Speaker 1:because I know you guys I mean, I know that's like an on Look,
Speaker 13:I think I think that is a very difficult thing to pull off. Know, there there's always that startup that they built something really great and the founders are super authentic and they can show up on Reddit and say, hey, we built this, what do you And and everybody loves it. Mhmm. And then the other 99% of companies get, like, chased away for self promotion. Yeah.
Speaker 13:Or they're manipulating Reddit in some way Yeah. And, you know, we end up banning them. So, it starts with building a great product. And then from there, you've got a lot of options on Reddit. Mhmm.
Speaker 13:Right? Yeah. Of course, can be an advertiser, but you can also talk to your customers. You can provide customer service. You can do AMAs.
Speaker 13:There's all sorts of things you can do. Mhmm. But I think the only ones who are successful are ones who, I think have an earnest desire to contribute to a community Mhmm. And not take advantage of it. Because people are very sensitive to being taken advantage of.
Speaker 1:Yeah. What are what are the unique dynamics on Reddit when it comes to creating ad products, you know, meta meta, you know, and and Instagram seems to be the ultimate state that a that a user can be in just like pure consumption. They get shown cool things and and they're kind of whatever state of mind they're in, they they're there's an openness to, like, you know, immediately just buying something. I would say x is maybe the opposite of that. Think did Ben Thompson describe it as like you go on Reddit to like
Speaker 2:It's a knife fight.
Speaker 1:A knife fight. Yeah. You go on x to get you go on x to get in like a knife, you know, you're like you're there to like
Speaker 2:When you're on Instagram, you're shopping. You're shopping for everything.
Speaker 13:I mean, Instagram's products would be better if it was only ads. Yeah. I know. Well,
Speaker 1:in some way in some way it is. I mean, for me for me, I look like my my explore page is cars and watches.
Speaker 2:Yeah. Cars and watches like clothes.
Speaker 1:Directly they're not directly ads, but they're like functionally, I'm like being marketed to Yeah. Just UGC.
Speaker 13:Yeah. So so on Reddit, you know, what's interesting about Reddit is some people talk about their interests and hobbies and passions.
Speaker 1:Mhmm.
Speaker 13:What I what I didn't see coming when we started Reddit is that it turns out in within people's interests, hobbies and passions, it's a lot of commercial conversation. Yeah. They're basically asking the question of what should I buy? Yeah. But they don't say what should I buy.
Speaker 13:They say, what should I wear? What should I watch? What's the best gear? Like, where should I go? And so, it it turns out that Reddit, which has this kind of anti commercial vibe, is actually extremely commercial.
Speaker 1:It's a hub for commercial activity.
Speaker 13:Because that's what people talk about.
Speaker 1:Yeah. Yeah. Totally.
Speaker 2:And so
Speaker 13:that's why say for brands, can stick the landing.
Speaker 5:Yeah.
Speaker 13:Like it it's there, the conversation is happening. But again, transparency and intentionality, that's what that's what really matters. And so yeah, ads is the easiest way to do it. But also, you can be helpful to your customers, which are definitely on Reddit, talking about your product.
Speaker 2:Yeah. Can you help me understand the shape of the advertising business? It's is it is it the entire revenue stream? I know that there's there's deals with other companies, and there's other other pieces of the of the business throughout history. And then, how power law driven is it?
Speaker 2:A lot of, ad platforms have, a super long tail of small advertisers. We've talked to other folks with ad platforms where they're selling really big ticket packages to Fortune 500 brands and it's all shaking hands and kissing babies. They're basically a all I
Speaker 13:I think that the the story arc of any ad platform is basically the same.
Speaker 5:Okay.
Speaker 13:You start with big companies and brand advertising. Because those are the companies that will test new platforms. And then you simultaneously move down market into mid and small businesses and more performance oriented. What's great about Reddit is we do all of this. So our fastest growing segments were mid and small business last year.
Speaker 13:We have a nice balance between brand and performance. And so we're one of the few platforms that whatever your objective is and whatever the size of your company is, Reddit can work for you. Now, almost all of our work in the ads platform, it comes down to better measurement and better targeting. It's really just a game of inches, just constantly grinding that out and making sure that our ads actually work, actually deliver a return. But Reddit, it's it's so funny to me because when we started Reddit, I didn't like ads.
Speaker 13:Now this was twenty years ago. So so, you know, the the the pressures of the real world have made an honest man out of me. But so it's it's almost surprising to me how good Reddit is for this.
Speaker 5:Yeah.
Speaker 13:And so it's it's it's a never ending journey. But to answer your question before, about 95% of our revenue is ads.
Speaker 2:Yeah.
Speaker 13:It's actually a great business model because it just scales.
Speaker 2:Yeah. It makes perfect sense.
Speaker 1:Yeah. If an investor came to you looking for Alpha, what subreddit do you think there's a $1,000,000,000,000 business brewing business opportunity brewing in. I think, like like, Chris Dixon has talked a lot about, like
Speaker 2:The BR.
Speaker 1:You'd find a subreddit Yeah. Was, you know, a a hive of activity.
Speaker 2:Yeah. This idea of what people do on the weekend for free will all be doing during the week in a few years?
Speaker 13:Oh, well, that's an interesting question. There's so we're in this, like, funny state that, like, we're in this, like, vibe coding takeoff.
Speaker 2:Yeah.
Speaker 13:So I I I look at kind of the arc of of of my career over the last twenty years, and I was lucky to catch a couple of waves. But the first wave, was just the Internet. And I think of each of these ways as a lowering of the bar of what it takes to start a business. Yep. So first is the Internet.
Speaker 13:Then that was the access to capital. So like Y Combinator and the more democratization of investing. And then you got mobile, and then you got cloud. So now like to start a successful company, you can build an app and host it in the cloud. But the equivalent version of that twenty years ago or thirty years ago was you had to know enough people to raise $10,000,000 to even get your foot in the door.
Speaker 1:You had to go to the computer store.
Speaker 13:Yeah. You still had to be technical. And now we're in this era with with vibe coding. And vibe coding is such a small word, think for such a big concept, which is like, basically, if you have an idea, you can basically bring it to life. And that's becoming more and more true every day.
Speaker 13:And so one of the things I've been thinking a lot about is, like, the headlines are all, like, such and such company, let's go of all of their engineers. Like, engineers are being replaced by AI. Yeah. I think that's missing the next step. Like, these engineers are builders.
Speaker 13:What do you think? They're gonna lose their jobs and just go home and sit on their hands? Yeah. No. Now they will probably start companies of their own.
Speaker 2:Yeah.
Speaker 13:And and so I I think there's this transition. I think it's made very, very fun where everybody's a builder, and there's likely to be this, like, Cambrian explosion of creativity and creation.
Speaker 1:Yeah. When I when I think about in the context of Reddit, there's like all these subreddits that might only have like 5,000 active members and historically, they maybe had an idea for like a little vertical software product or a mobile app and like Mhmm. It would never make sense for a team of five brilliant engineers to like raise millions of dollars and then go and build that product because the TAM is like the 5,000 people. But then you actually can do that now because it's just one person that's like Yeah. Hey, if I can even get it like a few 100 of the people in this subreddit Yeah.
Speaker 1:To pay me to use this product, I can like have a real business and I can create a life. It's It like
Speaker 2:looks more like niche podcasting. You're having a Patreon. It's like Yeah.
Speaker 1:The same same exact thing is what's happened in media. Right? The media is
Speaker 2:paying like you $5
Speaker 1:a
Speaker 2:month? Like
Speaker 1:Yeah. This this show wouldn't have been able to exist Yeah. Cable because like you wouldn't Mhmm. Be like yeah. It's just it's too it's too niche.
Speaker 1:And so, yeah. I think like every sub Reddit should like, there is a software product to be built. Probably. And it's not necessarily like a venture scale opportunity, but Mhmm. You just do the math and like, can I get a thousand people that pay me $20 a month?
Speaker 1:I'm like, great. That's that replaces the salary that that you that person may have gotten.
Speaker 13:Yeah. It's it's the whole story of the Internet, which is the transition from centralized traditional power to decentralized. And so it's it's this, you know, really enabling and uplifting force. Yeah. Podcasts are such a great example of the decentralization of media.
Speaker 13:And so now, I I think with AI, there's just going to be this a whole new era of of creation, which I think is the optimistic side of the story I'd love to hear more of. Because I think the pessimistic side is the Yeah. The transition and the change.
Speaker 2:Yeah.
Speaker 13:But I don't think the outcome is all bad. I think it's actually could be quite empowering.
Speaker 2:I completely agree.
Speaker 1:What, what are the give us a guide to watches on Reddit. What are the best sub sub communities? We're talking about
Speaker 2:Amazel and
Speaker 6:I don't know if
Speaker 13:I can, like, with a with a clear conscience recommend anybody get into watches on Reddit. It's like a it's it's it's like I I fallen into that, for better or for worse. Yeah. So you can start with watches. Okay.
Speaker 13:And then maybe you should start with like watch I forgot it's called like watch hot takes or something. But just to see like people who are coming out on the other side of this.
Speaker 2:Okay.
Speaker 13:But, yeah, I mean, like
Speaker 1:In ruins. In shambles. In shambles.
Speaker 13:It's just the the cash. Yeah. It's it's a it's a
Speaker 2:It's a pit.
Speaker 13:Don't know how to it. Like, valueless consumerism, like, just it's it's like telling somebody, it's like, what's the best subreddit about smoking? It's like, I
Speaker 5:don't know
Speaker 2:if I can be underrated. That's great.
Speaker 1:Is is Vacheron underrated by the tech community?
Speaker 6:For
Speaker 13:sure. That that's their whole strategy is to be underrated.
Speaker 2:Yeah.
Speaker 13:I think. Like high quality and, and and and unhyped. Yeah. I think I think their CEO just had an interview where he basically said that's our strategy.
Speaker 1:Yep. I know but but people are gonna figure that out. See, like this this is, you know, it's it's It's
Speaker 2:gonna be properly hyped.
Speaker 1:They're gonna they're gonna prop the Internet will do its thing and it will hype it properly. Slowly though. I think it's Yeah. I think
Speaker 13:I know what look look, it's just the life cycle of hipsters, right? I was there before it was cool.
Speaker 2:Yeah. Yeah. Totally. Maybe over ten years ago, 2012, you taught me Python on Udacity. I took I took that actual course, introduction to back end development.
Speaker 2:Why did you teach that course?
Speaker 13:Oh, okay. So the very specific reason is, one of my favorite professors at at UVA was at the company. And so he invited me and said, Steve, do you wanna teach a class? Yeah. And so and and I did.
Speaker 13:It was it was intro to web development.
Speaker 2:That's right.
Speaker 13:It ended up being in in that era, so it like 2010, '11, somewhere 12, guess. Ended up being one of the more popular classes. Yeah. It was so fun. It was so fun.
Speaker 13:You know, it's actually funny. Still still Yeah. I get recognized in public
Speaker 2:From that.
Speaker 13:From that. Much more than Reddit. That's this guy behind me pops over my seat. He's like, Steve Huffman? Yeah.
Speaker 13:I was like, yeah. I was like, you know, and he's like he's like, Steve, I heard your voice. I learned a program. Listened to your voice for, like, forty hours. Yeah.
Speaker 13:It's like in my brain.
Speaker 2:Yeah.
Speaker 13:And honestly, it's the greatest feeling. I would love to do that again. I should make time for it.
Speaker 2:You should.
Speaker 13:Because I just meet people for whom it it it it helped make their life better. It's it's truly it was the greatest honor. Yeah. It was so fun.
Speaker 2:It was fascinating because, mean, the content was good, but there was something about the fact that it was coming from you, from someone who actually built something. And the story of Reddit was so intertwined with Y Combinator at the time and and building something sort of without the permission of the big machine that was, you know, traditional, you know, software development or some mega corp. And and, yeah, it was it was just way easier to pay attention, I think, because it was like, oh, yeah. Like, you could imagine yourself building, something similar. And it was yeah.
Speaker 2:It was inspiring. I really appreciate it. Well, thank you so much for taking the time. Have a great rest of your day. Have a great weekend.
Speaker 2:And we'll talk to you soon.
Speaker 1:Yeah. Great
Speaker 13:sharing that story. And guys, thanks so much for having me on. This was a real pleasure.
Speaker 2:Yeah. This was fantastic. Awesome. We'll talk to you soon.
Speaker 1:Talk soon.
Speaker 10:Have a
Speaker 2:good one.
Speaker 13:Take care. Cheers.
Speaker 2:Bye. Let me tell you all about Okta. Okta helps you assign every AI agent a trusted identity so you get the power of AI without the risk. Secure every agent. Secure any agent.
Speaker 2:And let me also tell you about Restream. One livestream, 30 plus destinations. If you want a multistream, go to restream.com. And we have our second in person guest. We have Quaid Walker from Bezos.
Speaker 2:How are doing, Quaid?
Speaker 4:Doing great. Thanks for having me.
Speaker 2:Welcome back to the show. Thanks so much for taking the time.
Speaker 1:Dude, look at this Mogger right here. Look this Mogger. It's Mogger.
Speaker 2:It's insane.
Speaker 1:Look at this Mogger.
Speaker 2:It's body building day on TGI. Dude,
Speaker 1:get a you need a bigger shirt.
Speaker 2:I'm just
Speaker 4:trying to with you guys.
Speaker 2:It's good. It's good. How's life?
Speaker 4:It's great. You guys you let me hear Steve talk
Speaker 2:about watches. Yeah. Yeah. Yeah. Yeah.
Speaker 2:Yeah. It was good.
Speaker 1:He's like, don't get it.
Speaker 2:Dude, yeah. Yeah. Yeah. Yeah. We'll we'll we'll let you react everything you gotta say.
Speaker 2:Vacheron, underrated, overrated? Underrated. Underrated. Why? Explain their strategy.
Speaker 2:Explain how they fit into the landscape of strategies that are run by other brands. How do they differentiate? Why?
Speaker 4:I mean, from a history perspective, been around for obviously an insanely long period of time. I think they have the hype models. They have the overseas, obviously the two two two. Yeah. You're seeing a lot of celebrities wear it.
Speaker 4:I think like the famous Brad Pitt wearing it and kind of the pre of the f one movie made it go crazy. But it was the vintage example of it. They released the new one. Sure. But I think still it doesn't feel like it's at the same hype levels as like an Audemars Piguet Rolex or things like that.
Speaker 4:Yep. So it's in the the top three.
Speaker 1:Mhmm.
Speaker 4:I think from a cultural perspective, it's not totally up there yet. So it's super cool to have that mix where it's got the heritage, but not necessarily the hype quite yet despite being very hyped.
Speaker 2:You mentioned a Reddit watch hot takes. I don't know if you've spent time there, but what hot takes do you have about watches?
Speaker 4:Oh, that's a good question.
Speaker 2:Or or what is a even what is a popular hot take that you see trotted out that maybe you disagree with, something like that?
Speaker 4:I think like the the hot take in the watch world right now is like this quest for independent brands. Like I
Speaker 2:think Okay.
Speaker 4:We have a lot of clients that are diving into like the Jorn market, for example Sure. And it's like absolutely going crazy. And like the Jorn Elegant for Yeah. Like the
Speaker 1:Dude, I I I added that to my Bezel, like, watch list. Yeah. And at the time when I was adding it, you could get one for like 90 and now they're like $1.20.
Speaker 4:We was talking to Okay. Talking to two clients yesterday
Speaker 1:Mhmm.
Speaker 4:In 2024. Yeah. We got each of them an elegant. One paid 42, one paid 53 for it. Wow.
Speaker 4:And now they're like a $170,000 at
Speaker 2:that launch.
Speaker 4:And so and that's a quartz example. It's very cool. Put it on their wrist and it'll it it'll kinda go to the time it is once you put it on. Oh, it kind of stacks itself.
Speaker 2:Yeah. Yeah. Yeah. And tell the story of FP Journe, like why is that company interesting right now?
Speaker 4:It's just like a scarcity thing right
Speaker 2:now Okay.
Speaker 4:In the sense that it's it's like the there's a few of the brands, Joyn being one, like Acribia being one Mhmm. That there's so much storytelling around the mastery of the watches that they're creating. Yeah. But then also, there's so few of them made Sure. So they get wiped up in this kind of hype cycle.
Speaker 2:Yeah.
Speaker 4:And then they end up being so heavily demanded by the same type of collector that would have maybe started their collection buying Rolexes Sure. And moved to Pateks. Yep. And now this is like the upper echelon. One thing that Jorn does really well is whether you buy a Jorn in the secondary market or the primary market, they kind of welcome you into the community
Speaker 2:Oh, interesting.
Speaker 4:Which is super awesome.
Speaker 2:Yeah. Feels like a black mark when you go into some of these stores.
Speaker 4:Yeah. And so, like, they they're excited that you have access
Speaker 6:to it.
Speaker 2:You're just sheepishly admit. Yeah. Is there should I can I mentally comp Jorn to Koenigsegg in the sense that Koenigsegg is, you know, this
Speaker 1:Well, the watches work?
Speaker 2:The watches work. But but but a lot of people will say, you know, Koenigseggs, they're expensive. Maybe there's downsides, but Christian Von Koenigsegg is alive. You can get on the phone with him. You can see him at an event, and you can't do that with Ferrari.
Speaker 2:You can't do that with the Lamborghini. Yep. And you but you can with the Koenigsegg. And similar to Patek, AP, Vacheron, the founders, the real creators are long gone, but not so with FP Journe.
Speaker 4:Yeah. I think the community aspect of of Journe is really vibrant in that sense. Yeah. There's a lot of events that are happening in LA. Sure.
Speaker 4:In Geneva, there's a Michelin starred Jorn restaurant.
Speaker 2:Woah. No. Didn't know that.
Speaker 4:Yeah. So there's a lot of access to the brand in ways that I I think builds that mystique. But ultimately, comes down to the watches.
Speaker 2:That's cool.
Speaker 4:If you're a Jorn collector, you know that there's a period time in the year where you everyone gets emails Mhmm. That lets you know if you get an allocation that year or not. It's not as sporadic as collecting other pieces. Yeah. So, like, everyone knows to check their email around that period of time in the year and we're in the collector groups,
Speaker 1:they're talking acceptances forever.
Speaker 4:Exactly. Yes.
Speaker 2:What what I want a recommendation for you for a tech person getting into watches. In terms of budget, let's assume that they're just like a mid range AI engineer. They have like a $100,000,000 to spend. What would you do?
Speaker 4:Oh, I was just we're talking about this backstage with very different budgets than a $100,000,000?
Speaker 2:No. No. We we can ladder it up. Yeah. What's a great watch that's just a good starting mechanical watch to actually get you into the world of horology.
Speaker 4:Yeah. So that's that's the most fun part of my job is Sure. Is we sell the vast majority of the kind of whole spectrum. Q four Chiba Soft we sold was $750. Most expensive was 1,600,000.0.
Speaker 2:So Wow. Whole spectrum. There we go.
Speaker 4:And we just hit a billion in supply to Native Game. So a
Speaker 1:lot of Gong. Gong.
Speaker 6:Gong. Hell yeah. But
Speaker 4:yeah, it it really depends on price point. Obviously, there's a lot of interest there. Like, you know, I for the Think
Speaker 2:threw like 10.
Speaker 4:10 Sub $5,000. I always go like tutors and omegas, things like that. I love the like kind of tutor Black Bay offerings.
Speaker 2:That's a
Speaker 1:great one.
Speaker 4:It's so fun. Yeah.
Speaker 2:So It's really grown on me. I wasn't super into the hand
Speaker 4:I think the Black Bay 54 is like one of the best kind of vintage reissues Sure. That that's happened in kind of modern era. Yeah. Love that watch. Sub 10, I think vintage Rolex or, like, you know, neo vintage, like, nineties Submariners, like, a one six six one o.
Speaker 2:And what's reliability like with a nineties Rolex? Is that something you're gonna be able to daily drive?
Speaker 4:I so I have a couple watches. Okay. My my daily is a one six six one O 90 Submariner.
Speaker 2:Okay.
Speaker 4:It's probably the the most vintage you can go while you're still trusting that it's, like, pressure tested and everything's working really Sure. Sure. Surfed in it this morning. No way. I work out in it.
Speaker 4:I run-in it. I I love it. I I think I'm a big fan of using your watches.
Speaker 1:Yeah.
Speaker 5:Yeah.
Speaker 4:As you scale up from 10 Working
Speaker 1:out with a watch on, what hap like, what are the downsides?
Speaker 4:I think I think maybe curling is a little bit inhibited. Yeah. Sure. Overhead press maybe on the wrist. But, yeah.
Speaker 4:I don't know. I I I think it's very like James Bondified for watches where you put the watch on in the morning and then you don't you like go work out in it and then you go have your day in it and then you go to dinner in it and then you throw in a tux and you're wearing it. I think there's something so cool about like Sean Connery era black Submariners Yeah. That that I think growing up seeing that I I wanna recreate that a lot.
Speaker 2:And and James Bond only wore Rolex in the books and maybe one movie and then Omega got them?
Speaker 4:I think it switched to Omega in the Pierce Prozos. Prior to that, it was It was
Speaker 2:a deal or something.
Speaker 4:Yeah. Think Acquired Podcast did a whole deal winning that deal.
Speaker 2:That's right. That's right. What are you wearing today?
Speaker 4:I'm wearing a
Speaker 1:Daytona in platinum. Heavy hitter.
Speaker 2:Platinum. Yeah. But It's a heavier material. Right?
Speaker 4:Quite heavy. Yeah. You should we should afterwards, you should should try it out but it's very heavy. It's a good workout.
Speaker 2:Oh. The watch salesman comes by. It's like you could you could take it
Speaker 1:on my No.
Speaker 2:Jordy? What else?
Speaker 1:How how is the watch industry navigating tariffs at this point? There's a lot of confusion. There's new tariffs. What is what is the approach from the manufacturer side? I know on the secondary side, if you owned a bunch of watches, it was great because Yeah.
Speaker 1:They just start going up in value even though there's not necessarily like more demand. Yeah. It's just like kind of a leveling.
Speaker 4:It's funny to talk about it this with you guys, because the last time I was here, I think I had just gotten back from Geneva in like April when they announced it. Yeah. And so it's Oh, yeah.
Speaker 1:That that was what was that? What what event were you?
Speaker 4:Washington One Piece.
Speaker 1:Yeah. Yeah.
Speaker 4:So they then that initial I think it was like 10% or 50%, whatever your initial tariff was was announced while I was in Geneva. And then I came back and chatted with you all about like the overall experience. And then it shot all the way up to like 39 or high 39%, and then came back down to 15. And so throughout that cycle, the first thing that happened is exactly what you're describing where folks who had watches in The US immediately shot up in value and there was much more demand because two things happened. One, the pricing goes up, but also the access goes down.
Speaker 4:If you're a, like, a dealer in The US that gets a portion of your supply from Europe, now it's way more expensive to get the watches in. And so the first order of fact is pricing, like you were mentioning. The second is our authentication reports, like the number of watches that we reject. In h one of last year, rejected 27% of the watches. In h two, we rejected 38% of the watches.
Speaker 4:Wow. And my thesis on that is just if you were a dealer in The US and you had less access to inventory and all of sudden it became more expensive, you were incentivized to get creative and try to pass things through the system. So maybe you're swapping dials, maybe a watch that's been pre owned is polished and you're marking it as unworn. Like, you're doing what you can to get the throughput through that you would expect given the fact that the inventory is limited. And so that's been kind of a second order effect.
Speaker 4:Where we are now, I feel like prices are still increasing. There's less tariff talk than there was. Yeah. I think people are starting to accept the reality. Brands increased prices pretty broadly.
Speaker 4:Some brands then pulled back the price increases.
Speaker 1:Shareholders.
Speaker 4:But like, Patek, for example, pulled back the pricing increase. Some brands have not pulled back the pricing increase, and so it's kind of a per brand thing. The reality is a lot of these brands can charge twice as what they charge right now and everyone's gonna still buy their watches. And so, I think brands have different opinions.
Speaker 1:Price increase from Protect doesn't affect that many people.
Speaker 4:There's no But a deep surprise, like, collectors and groups felt slighted if they, you know, they just felt opportunistic if the tariffs went down. And so, I think a lot of these brands are optimizing for building a relationship for Mhmm. Hundreds of years with their clients, not just, you know, doing better in a short
Speaker 2:I wanna talk Oscar's reactions. Kevin O'Leary was spotted wearing two watches, a Cartier crash skeleton and a ruby set Rolex Daytona
Speaker 4:Yeah.
Speaker 2:Potentially doubling the market size for watches. Are you behind this? Are you pushing this two watches on one watch on each
Speaker 1:You got the you got the whoop on.
Speaker 4:Yeah. I'm wearing I'm wearing a whoop on my other side, which I think I even feel like I'm I'm kind of a clown for for doing that Sure. In some capacity. I'm a I like I'm a one wrist man.
Speaker 2:Yeah. Yeah.
Speaker 4:Yeah. But, you know, it's it's good for our business if everyone wants to wear it on two two wrists. Two wrists. I think if you are passionate about watch collecting, if you're doing it for that reason, amazing.
Speaker 2:I've been seeing a lot of jump hours. Those seem to be popular at the Oscars this year. Is there a broader trend there that you're picking up on?
Speaker 4:I think as people dive deeper into watches, the symptom of that is that I think people are more interested in, like, higher horology pieces more complications that's bad. So, it's kind of that initial swipe that I was talking about with folks getting into independent pieces where it's no longer just, like, to talk to myself, like, I wanna wear the platinum Daytona. Now, you know, I want something that is particularly an independent brand that other collectors will raise their eyebrow about and get interested about. And so, Jumbo Hour being a really fun complication. Yeah.
Speaker 4:It's also just a cool thing to look at on the Yeah. But I
Speaker 2:saw I saw a guy on Instagram who basically just does three d renters of ideas that he has for watches. And he had one the whole thesis was the the watches are often photographed at 10:10. So the hour hand this way and the minute hand this way because that's the most aesthetic presentation. Yeah. And so he designed a set of watches that they where the the hands would be fixed at 10:10.
Speaker 2:Yeah. And then you would have a jump hour over here in a minute Yeah. Wheel over here. And there'd be a whole variety. One was like a flyback where you push a button and then it goes to the actual time.
Speaker 2:But mostly, it's a 10:10. We have a lot of fun ideas.
Speaker 1:Predictions for AP? Yeah. I mean, so so Rolex came out with the Land Dweller.
Speaker 2:Oh,
Speaker 1:yeah. A bunch of different watches that people love. AP, you know, I don't you know, a lot of the watches are for better or worse not super desirable outside of the Royal Oak. Yeah. I'm assuming they wanna change that, like I
Speaker 4:think they're doing a lot to make the code eleven fifty nine, like, as interesting as possible. Mhmm. And so, like, the Star Wheel is a great example, or it's like a really awesome application. It's really the most exciting eleven fifty nine right now. Okay.
Speaker 4:I think I'm hoping we get something in not a 41 would excite me, like Smaller? I I we
Speaker 1:but what about an entirely new silhouette?
Speaker 4:I think it's it'd be awesome. I just think it's less likely.
Speaker 2:When did the code come out?
Speaker 4:I don't know. I think
Speaker 1:And and is there do they do they have a do they have a reason for that? Like, they're just like, we don't need another one.
Speaker 4:Well, I think it's it's it's quite hard to replicate the heritage and the excitement associated with the Royal Oak. Right? Yeah. It's like, you know, it's the like Genta design Yeah. '39 millimeter size Yeah.
Speaker 4:You know, the kind of the silhouette of the current sixteen two zero two. Yeah. There's only four watches, you know, that kind of feel like they have that degree of a mystique and history around them and it's probably like, you know, the Nautilus, the the Overseas maybe, the Royal Oak and then like maybe the Daytona Mhmm. I think are like the steel sports examples that fall into that category of of like hype
Speaker 2:cycle. Universally know.
Speaker 4:And I think it's very very hard to recreate that.
Speaker 2:Bootstrap a new one.
Speaker 1:And you think Rolex is more like Rolex being like, we're gonna create the land dweller. Yeah. And just like take a risk or
Speaker 4:Well, that's if you think about it, it's like Rolex.
Speaker 1:Like, I'm assuming like you have like land dweller, you have cubitus, like, why not take the risk?
Speaker 4:Rolex doing the Cubitus was like a crazy thing.
Speaker 1:You mean, like
Speaker 4:I'm sorry. Yeah. Rolex doing the land dweller was like a crazy thing. Like, it it's they these companies move really slow and intentional. And typically, a new model is like the same reference, but upgraded by one number, new caliber, slight, know, different perspectives on it, but but ultimately the same model.
Speaker 4:So maybe we're moving into a world where watchmakers are are starting to be more ambitious, but I think it would be like a kind of change. And so, I I would expect Rolex to not come out with a new model. I would expect AP to do the same. But we'll maybe get some interesting dial variations, interesting metal variations, things like that. Mhmm.
Speaker 4:I'm hoping for, as I was saying, like, we both wear the $15,300. Yeah. I like the thirty nine size.
Speaker 1:Mhmm.
Speaker 4:I think I if we got more access to that, I think that would be really exciting. Patek,
Speaker 1:it's
Speaker 4:the anniversary for the Nautilus. So there's some conversation around what that's going to be and what's gonna come out there. If it's gonna be a steel reissue, if it's gonna be other precious metal examples, certainly we'll get something in the Nautilus side. There's a lot of rumors around the the Rolex Pepsi. And we've had those rumors for a number of years, but, you know, there's some speculation on what's gonna happen with that, if it's gonna get discontinued and things like
Speaker 1:Are there less leaks in the watch world? Because in the car world, you have to actually, like, go and road test the car, like, people are posted up in Maranello, like, you know, like, just it doesn't matter that
Speaker 2:the
Speaker 1:car is camouflaged. They're gonna get a picture and be able to clock it if they pay enough attention. Whereas in watchmaking, it's like you might have, like, a hint, like only like three people that actually have knowledge and that are working on it.
Speaker 4:I can't profess to know the car example, but I I I would imagine that logic makes sense. The way the leak cycle typically works is like everything builds up to Watches and Wonders in April. And we're in the stage right now where you get like all the fake leaks and AI has just made that even easier. Because anyone now has the ability to like Photoshop Yeah. Whatever they think is and it looks legitimate.
Speaker 1:It looks
Speaker 2:like it
Speaker 1:might look like a render, but they'll use a render.
Speaker 4:Yeah. Yeah. Exactly. But it's like I could go and cook on, you know, any of these models and build out like what I think is going to be cool. Yeah.
Speaker 4:Yeah. And it looks convincing enough is like five years ago that was challenging.
Speaker 2:Yeah. Totally.
Speaker 4:But then as we get closer, you'll get real leaks and those are typically like they're uploading something on the website for a new banner and they miss something or there's a production video that's made and someone has the wrong file somewhere and they leak it. Mhmm. And so as we get closer, sometimes historically those leaks have been correct. Mhmm. And then Rolex will start teasing it themselves.
Speaker 4:And so Yeah. For the Land Dweller, like, they teased like a hint of the integrated bracelet. Mhmm. And everyone was like, oh my god, like it's the ocean courts or what is that? I don't know.
Speaker 4:Yeah. And so that's when they like start to soak it. And then Federer was seen wearing the land dweller like, you know, a week before they announced it somewhere and everyone was like zooming in his wrist like Yeah. Is that a Datejust? What is that?
Speaker 4:And so they they play into it, but it's typically how
Speaker 1:it Yeah. Goes. It's awesome. You you launched a partnership with Cauchy Watch Price Prediction Markets. I saw some funny criticism.
Speaker 1:People being like, this is dumb. Just buy the watch, which I thought was like a really dumb criticism because like, obviously, like, not everyone wants to invest, like, twenty, thirty, fifty, sixty, you know, whatever it is. And there's a lot of other dynamics that that make it pretty interesting. How does that product actually work under the hood? Like Yeah.
Speaker 1:What what is the what does the partnership look like? I'm assuming you guys have all of, like, the real time kind of, like, pricing data. But but tell us about it.
Speaker 4:Yeah. So we we built the price engine internally. Mhmm. Like, you know, very nerdy, machine learning model, mathematical consensus. Our thesis was you can scrape public data.
Speaker 4:So, like, we'll go out and we'll scrape in time. But there's only a few players that are at our scale that have enough actual data. And what I mean by that is like, you know, a watch might be listed for $10,000 publicly and that'll be what everyone scrapes. But then it might actually be offered back and forth and sell for $8,700 and that is data that is only private to like us and other marketplaces that have our scale
Speaker 1:of Yeah. Because that data does need to be public.
Speaker 4:Exactly. 100%. Yeah. It's certainly not public. And so Yeah.
Speaker 4:Our thinking was, you know, we can build what we feel is the most accurate data available and built out that model and it's designed to be predictive. So it uses different inputs and values different inputs based on different models and it's it's truly predictive. And so the thought was to use that internally for us to like badge listings as good price for us to offer, like, some price guide rails for retail sellers, whatever it is. And then saw Calshi was kind of moving into collectibles, so we connected. Okay.
Speaker 4:And we were jamming on building some markets. And so for us, we're just the data kind of provider there. We have no economics from it. For us, it's like just an exciting thing for the watch world. The watch world loves it.
Speaker 4:We're gonna double down on it. If the watch world hates it, like Yeah. We're gonna learn from that. So far, the response has been largely very positive. And we have two types of markets.
Speaker 4:We have the qualitative ones. So that's like, is the Rolex Pepsi going to be discontinued? Mhmm. And the source data for that is like really Rolex, if they're gonna roll it out. Yeah.
Speaker 4:And then we have quantitative markets. So we're like, you can bet on the Rolex index.
Speaker 1:Mhmm.
Speaker 4:Or it can be model specific like, you know, will the Starbucks be above this price threshold by the March
Speaker 1:or things That's like cool. Yeah. Last question. Will will AI ever be able to catch fake watches? Like, could you have a process when somebody's trying to list a watch to just be like, yeah, just don't even send this to us?
Speaker 1:Like, we don't, you know, we don't we don't want it.
Speaker 4:The blanket's large or like, quick answer is no. We believe in in every watch getting in the hands of like the artisans on our authentication team. They're smelling the papers. They're feeling the weight. They're looking at all aspects of it.
Speaker 4:They're opening up all aspects. However, we use AI the computer vision at the listing process. So if you wanted to list the watches on your wrist, it would need to get approved by our team. It needs to go through our model to make sure that there's no, like, obvious problems with it. And then once it gets sold, it ships to us and then we use AI to optimize their flow.
Speaker 4:And so I don't want my team wasting any time doing anything they shouldn't do. I want the product to truly optimize for them. But ultimately, you have a watchmaker and an authentication specialist. It's in their hands and they're feeling the watches and I believe that is forever how they will be authenticated at least for the, you know, medium term.
Speaker 2:I love it. Well, thank you so much for taking the time. Thanks, guys. On the TV. Yeah.
Speaker 2:Quaid.
Speaker 6:To you. Yeah.
Speaker 2:Great to see you. And we will move on to our next guest. But first, let me tell you about Cognition. They're the makers of Devon, the AI software engineer. Crush your backlog with your personal AI engineering team.
Speaker 2:I will also tell you about Finn, the number one AI agent for customer service. If you want AI to handle your customer support, go to fin.ai. And our next guest is Ankur Jain, and this is part of our Lambda Lightning round. Let's kick off the Lambda Lightning round. Ankur Jain is the founder of BUILT, and we will let him in to the TBPN Ultra on in just a minute.
Speaker 2:Let's bring in Ankur. How are you doing?
Speaker 1:What's going on?
Speaker 2:Good to see you again.
Speaker 3:What's up, man?
Speaker 2:It's been like a decade.
Speaker 3:I was about to say. I saw your name, and I was I was just trying to make sure I get to the dock. It has been a long time.
Speaker 2:It has been a long time. I think the last time we hung out was maybe in Silicon Valley, maybe in New York. Lots of good times. You've been on an absolute tear. Get me back up to speed.
Speaker 2:Where's the business? What's life like now? How's your 2026 going?
Speaker 3:2026 has been a it's been a crazy year so far. Can't believe it's already the March. Yeah. We well, first of we're based in New York now. We gotta get you guys out to the city.
Speaker 2:Love you.
Speaker 3:That's for one. Yeah. We Today, this morning, I don't know if you saw, we just announced Built Hospitality for restaurants.
Speaker 7:Oh, wow. So we and
Speaker 3:we look, we spent the last five years Yeah. Taking housing, which is the biggest expense for people in this in this country.
Speaker 2:Yeah.
Speaker 3:And how do we bring hospitality to the housing market? Mhmm. How do you make your 2,003 thousand dollar a month rent expense feel the same as when you stay at a luxury hotel? Mhmm. So you get rewarded.
Speaker 3:Your experience is seamless. They know who you are. When you sign a lease, you're not sending in paperwork, all these types
Speaker 2:of things.
Speaker 3:Mhmm. We're now bringing that to neighborhood merchants. So today, we announced with chef Thomas Keller, Daniel Ballude, major food group, TAO Group, Boca Group, you know, a bunch of these major restaurant groups across the country, a way for them to design guest experiences end to end the same way we did for housing, and allow you to do things like, you know, John, you go out to a a restaurant, and you can say, charge it to my apartment, just like you would at a hotel. And everything now becomes seamless.
Speaker 2:Amazing. Is the business entirely consumer focused right now in the sense that I I think people think of Built as a fintech company, but also a a credit card company with rewards component. Is there is there anything else to the business? And then I wanna know, like, why have previous attempts struggled Because it feels like there's been needed innovation in this space for so long.
Speaker 3:Yeah. For sure. So no. So our business is actually primarily b to b. Okay.
Speaker 3:We are a consumer brand.
Speaker 2:Yeah. That's right.
Speaker 3:So we provide the hospitality software Mhmm. For apartment managers across The United in four apartment buildings run on built.
Speaker 1:Okay.
Speaker 3:And that's our primary business. Interesting. We then have a marketplace with now over 45,000 merchants
Speaker 2:Yeah.
Speaker 3:Who are looking to connect with people who live in these apartment buildings
Speaker 2:Yeah.
Speaker 3:And we facilitate that connectivity.
Speaker 5:Yeah.
Speaker 3:So that's our core business. Today, I think people often misunderstand this. It's about 11% of the cards linked to your Built wallet. So when you move into an apartment building, you can link your Amex card, Visa card Mhmm. Get a Built co brand card, and use that to pay your rent, get rewards, use it at your local merchants.
Speaker 3:About 11% of the cards linked to Built members' accounts are our built co brand card.
Speaker 7:But Mhmm.
Speaker 3:89% of the business still comes from the broader ecosystem beyond the the card.
Speaker 2:Okay. And and what's the what's the difference in the flow? Are people coming in for the built co brand card and then expanding out, or are they are they or or are you selling customers who are already in the ecosystem through other touch points the co brand card downstream?
Speaker 3:I mean, to your to your to your last question Yeah. It is so hard to break into housing. Yeah. It is this crazy fragmented world Yeah. That peep like, people have been happy to take paper checks up until six, seven years ago, which is crazy for your biggest expense.
Speaker 3:And so we started this company trying to pitch property owners.
Speaker 2:Mhmm.
Speaker 3:Fell flat on our face, and then pivoted to say, what if we went to rent to consumers to build some momentum? That's how we launched the credit card. Yeah. The card then got us momentum Mhmm. Which then allowed us to go back to property managers and say, look, we have hundreds of thousands of people at the time that are now using this card to pay their rent.
Speaker 2:And they wanna pay with
Speaker 3:the Why aren't you using our software for all of your renters? Mhmm. And then we kind of went back and then grew the business. So today, almost all of our growth comes from our housing partners, and people who move into the building that want extra rewards get the card. Sure.
Speaker 2:So it
Speaker 3:looked more like a traditional, like, Gap or you know, Sephora
Speaker 1:or Yeah. Just just to be clear, so you could be living in a building that runs on or with a with a landlord that runs on BUILT, you don't you can still get rewards just through BUILT, but then you can add the card, and so you're it's like b to b
Speaker 13:to c Yeah. In that way. Got
Speaker 3:it. Exactly right. That's Yeah. And and again, most of the most of our revenues come from the housing platform and the merchant platform.
Speaker 6:Sure.
Speaker 3:So if if you think of it, property managers so so these property managers and merchants, we want to connect neighborhoods like a hotel.
Speaker 2:Yeah.
Speaker 3:Right? So they run on our experience platform, they pay us for the software, they pay us for the transactions Yeah. Or the customer pays for the transactions depending on the model, And then we get paid when we send customers to local businesses. Yeah. And that's how we're able to fund these rewards across the ecosystem.
Speaker 2:Yeah. What were people getting wrong during that era where there was a whole bunch of skepticism around, like, is it ever going to be economically rational to give points for something as big as a rent purchase? It felt like there must be some sort of narrative violation there because you have Ken from Amex on the board or it seemed like you're Yeah. A close investor. Like, it didn't seem like you went into that, like, blindly.
Speaker 2:There was clearly a strategy. So what were people getting wrong?
Speaker 3:I think people were just missing what the business was. Sure. Mean, the the reality is, as you know, it's not sexy and fun to talk about b to b software.
Speaker 2:But We think it is. We love b to b software. But yes, I I completely
Speaker 3:understand But people talk about the home brand card, which we love. Yeah. Man, sound effects are great. It's like, this is fun.
Speaker 4:So we so a lot
Speaker 3:of people talk about the card, and the reality they're right.
Speaker 2:Yeah.
Speaker 3:Having a card in isolation Mhmm. Would never make sense in this business. Yeah. But when the card is part of facilitating an ecosystem Mhmm. Which for us, we believe, you know, every other major commerce platform started with how do you sell car service rides?
Speaker 3:How do you sell books online?
Speaker 1:Mhmm.
Speaker 3:How do you sell restaurants, you know, food delivery? We said if you start with where you live, which is the home Mhmm. It's the biggest expense for consumers. So right away, if you can monetize $2,000,000,000,000 a year of spend on housing by being the go to platform and the brand for housing, you have Uber for ride share, you had DoorDash for food delivery. There was no brand in housing.
Speaker 3:Mhmm. Right? That's where we started.
Speaker 2:Yeah.
Speaker 3:And then you start to think about every major decision you make when you move in. You pick your new restaurants that are your go to. You pick your go to bar. You pick your new pharmacy. You pick your new gym.
Speaker 3:You pick your school district. All of that starts with where you live, and we are just piece by piece looking to connect that for customers. So if you saw, we just launched our concierge service and our buildings now
Speaker 2:Mhmm.
Speaker 3:Like a hotel. You move into a building, you sign your lease through BUILT, you pay your rent through BUILT, you get rewarded, and then you can ask the concierge, hey, I need a reservation for three tonight or four tonight in our neighborhood. Book me a dinner, schedule me a car, and use my rewards to pay for it all, and it's all seamlessly done through the built app experience.
Speaker 2:Yeah. Last question for me. How are you thinking about stablecoins and the future of, transferring money? It feels like that's a very interesting place if you're moving a lot of money that is potentially on top of Visa rails. You're potentially paying a fee.
Speaker 2:How are you seeing that play out?
Speaker 3:So look. We're today, just to give you some sense, we'll do over a $100,000,000,000 of housing payments to the build platform. Sure. And that's now we just added mortgage, so that's gonna grow quite significantly too. Yeah.
Speaker 3:I would say our general perspective is we're agnostic on how people wanna pay.
Speaker 5:Okay.
Speaker 3:We we just launched a partner with Venmo recently where people can pay with their Venmo Okay. On their rent payments or at the restaurant.
Speaker 5:Yeah.
Speaker 3:We obviously work closely with big banks. We work with, you know, the American Express network, Visa network, Mastercard network. As Stablecoins develop, we'll do the same with them. Mhmm. If people wanna if merchants wanna pay through stablecoin, we'll support that.
Speaker 3:If customers wanna pay their rent through stablecoin, we'll support that. Mhmm. I think for us, we look at ourselves as a layer above the payments infrastructure.
Speaker 2:Sure. Sure.
Speaker 3:Really focused on orchestrating a seamless experience between where you live and all the bugs around it.
Speaker 2:Yeah. So just picking the right tool for the job
Speaker 1:user ever given you a feature request to be able to tip their landlord?
Speaker 3:So so so they've never come from the we haven't gotten it like as a core user request, but what we have gotten is a lot of property owners saying, hey, can we simplify the the annual holiday tip process rather than having to track a bunch of envelopes down yeah. So that's actually something that's coming out this holiday season. You're gonna be able to tip your building staff.
Speaker 1:Sure. That's very cool.
Speaker 2:That is cool.
Speaker 1:Is very Thank
Speaker 2:you so much for taking the time to come chat with us.
Speaker 3:Great to meet in in New York next time.
Speaker 1:Yeah. We'll talk soon. Us at NICI.
Speaker 2:Yeah. That'd be great. We'll talk to you soon. Awesome. Thank one.
Speaker 2:Thank you. Goodbye. Let me tell you about Gemini 3.1 Pro. With a more capable baseline, it's great for super complex tasks like visualizing difficult concepts, synthesizing data into a single view, or bringing creative projects to life. And let me also tell you about Eleven Labs, build intelligent real time conversational agents and reimagine human technology interaction with Eleven Labs.
Speaker 2:We have our next guest joining in just a few minutes, Michael Kratsios. He is the White House's science and technology adviser. They launched a new national AI framework for child safety and to standardize regulation and balance innovation with protection. We're very excited that he is joining today to help us understand where the conversation around AI might go on Capitol Hill and within the government.
Speaker 1:Interesting information out of some obesity drug test trials.
Speaker 2:This is crazy.
Speaker 1:Says this is not good. People have learned that GLP-1s are really effective. So if they're not losing weight, they know they're in the placebo group. So these people getting placebos are mad and just leave And
Speaker 2:they drop out. And the effect size is so big that they can tell, so it's gonna be harder to do, placebo controlled trials, which is what we need the most in the peptide conversation.
Speaker 1:Yeah.
Speaker 2:But I'm sure that they will figure it out. Anyway, we have Michael Kratsios in the Restream waiting room. Let's bring him in to the TV then. I'll show him. Great to see you again, Michael.
Speaker 2:How are you doing?
Speaker 6:I am great. How are you guys? Happy Friday.
Speaker 2:We are fantastic. Congratulations on the progress. I would love for you to take us through what was actually announced today, and then I have a whole bunch of questions about where we go from here.
Speaker 6:Absolutely. Well, thank you guys so much for having me. I think today was a big day for the White House. As you know, last July that we've talked about before, we put out a big AI strategy for the country. But a big piece of it and something that we've been working on for some time is what is the actual national level legislation that we need?
Speaker 6:What actually needs to be done by Congress to pass sort of the the the actual law of the land for for AI?
Speaker 2:Yeah.
Speaker 6:And we were tasked by the president to do this in December and we unveiled that today. So broadly speaking, main issue we were trying to tackle was figuring out a way to get past this patchwork of AI regulation. As you guys probably, I think, have talked about on your program pretty often, there's lots of states doing all sorts of stuff. While big companies can find a way to navigate all the legal issues associated with this patchwork, a lot of small startups have a really hard time doing that. We wanted to find a way to get past that and create one national standard for the country.
Speaker 6:That's what we put out today. In order to do that, we also included lots of other stuff on what we'd like to see on child safety, on the way that we protect American ratepayers that may be affected by by electricity prices Yeah. Stuff on American workers and also on education. So it's kind of the first comprehensive plan, I think, ever presented to congress from the White House on on what we should do on AI.
Speaker 2:Yeah. We we've been seeing a lot of polling about how AI is deeply unpopular. Are you looking at polling to understand where the American population wants AI to go? What are your sources of inputs to then make recommendations through?
Speaker 6:Absolutely. We we look at polling. We talk to industry. We talk to civil society. We talk to we talk to all all sorts of folks about where we should be going.
Speaker 6:But the numbers are what they are when it comes to the way that Americans think about data centers Yeah. For example. And that's something that we tackled a couple weeks ago. You may have seen the president brought all the executives from the top AI companies around, around the country to the White House and got them to commit something called the rate payer protection pledge.
Speaker 2:Yeah.
Speaker 6:And this was them committing to build, bring, or buy their own power for any data center that they build. And it's a big step forward, essentially a commitment to every American that if you are gonna build a data center in their backyard, they will not pay more for for electricity. I think that's the type of thing that that Americans wanna see, and and it was great the president was
Speaker 2:able I to push I I've been seeing rumblings of that with various hyperscalers sort of putting out small press releases saying that they were sort of going to do it independently. It was great to see it come together as like a unified everyone's holding hands and jumping off the chasm together, working together. Do you think that this would eventually become a law? Or is there some sort of framework that should be carried forward? Or is the ratepayer protection program enough of an effort because the companies are public and they can be held account by their shareholders and and their constituents?
Speaker 6:So in the framework released today, we we we urged congress to codify the ratepayer protection pledge. And I think one of the key pieces of it that, that would be great to put in law is the ability to legally build behind the meter power. Sure. This is something that, needs exceptions that the Trump administration has allowed via executive action, but it'd be good to get that into law. And I think it unlocks a whole new range of possibilities around how you can actually put power online that can support these data centers.
Speaker 6:Because now before, actually, action by the Biden administration was to ban behind the meter power generation. Mhmm. And it's something that makes it they actually make it really hard for for some of these hyperscalers and other data center builders to get the power that they need. Mhmm.
Speaker 1:Jordy? Timelines with congress. What is your optimistic outlook in in actually getting this into law? Mhmm.
Speaker 6:Well, look, our hope is that we can do it in in this calendar year. I think a lot of the provisions that were in the in the plan, particularly the ones around child safety, are ones that have had sort of bipartisan agreement for some time now. And we hope that, you know, bringing congress together and back to your polling question, a lot of the issues that are covered in this framework are eighty twenty issues. If we think about what are the types of bipartisan things that we potentially could drive forward, we think we'd make progress on on things like child safety and also bring along the the the issue the other issues that that that we bring in the framework.
Speaker 2:How do you envision the child safety processes going out? I mean, when I grew up, you know, movies had r ratings. I couldn't really go to the theater. It makes sense to adopt some of that. People are aware of that stuff.
Speaker 2:There's also issues with depression and how the people interact with AI. Where do you think the conversation around child safety will go as we move towards more regulation around keeping children safe in America?
Speaker 6:Where we're trying to take the conversation is putting parents back in control over what their children experience online. Mhmm. And for us in the in the framework, we urge Congress to move forward with legislation that puts that control back in the parents' hands. They should have the tools and platforms should provide the tools to parents so they have an understanding of what their kids are seeing, what they're experiencing, what they're interacting with, who's interacting with them. They should also have the right features in place to allow parents to make decisions for what their kids will be seeing going forward.
Speaker 6:And I think those are just common sense basic solutions that almost all parents around the world would want to have for their children.
Speaker 2:Yeah. Yeah. As a parent, I feel like that's something I would definitely want. What's the reaction been like from industry? It feels like there there's always the, you know, the fear that, oh, they they they want to get them hooked young on whatever social media platform.
Speaker 2:At the same time, I feel like if everyone, you know, has to you know, YouTube's had YouTube Kids for a long time. They've segmented off different content there. The movie theaters obviously have g rated films. It's not like the movie industry has been hurt by the ratings and and the fact that kids can't go to r rated movies. Has there been positive reception from the from the leaders of technology companies that you've spoken to about that concept?
Speaker 6:I think technology companies want to see a viable path forward. I mean, they see the polls just like anyone else does, and they understand that parents want to have control over what their children experience online. Mhmm. And I mean, to some to their credit, to some degree, they've put and installed a bunch of features, as you mentioned, some on YouTube. You've seen parental controls on Instagram for a while.
Speaker 6:There's things growing on Facebook and many other of these platforms. And I think they're already doing that. But I think for real certainty, what parents deserve is an actual national law that enshrines this forever. And I think it's something that that I think could could be a bipartisan push.
Speaker 1:Jordy? Any any insights into the pressure that various industries are putting on states to try to get these sort of like state level regulation and bans? I was seeing something out of out of New York that was trying to make it so that AI couldn't give legal advice which to me isn't Oh, yeah. Insane. We live in America.
Speaker 1:The rule of law, you know, matters. A very litigious country. You can give anybody in the world access to legal super intelligence in an app in an ad supported way
Speaker 2:No. You said Totally free. Should be able to sue
Speaker 1:each No. No. I'm just saying like you should be able to drop a contract Yeah. Totally. Into into an LLM.
Speaker 2:To actually understand the law.
Speaker 1:And understand what you're signing up for, understand, you know, have have transparency and not need not there's a lot of people that aren't in a position to be able to hire a lawyer Yeah.
Speaker 2:Totally.
Speaker 1:300 to $1,000 plus an hour Yeah. Yeah. Understand contracts Yeah. And everybody deals with this. So, like, that's one example where I'm like, okay.
Speaker 1:Where is this coming from? Maybe coming from some lobbying group for lawyers Mhmm.
Speaker 2:Which
Speaker 1:I understand their point of view, but Yeah. Needs to be like some Sure. Middle ground.
Speaker 6:No. You're exactly right. I think laws like that that, you know, we we are are very against are are the primary reason why we're trying to push forward this framework. There needs to be a national standard that essentially says that, look, this is the law of The United States that the federal government has set, and in so states are then can't make laws in those particular areas. And the ones that you mentioned, sort of specific laws banning particular verticals, things like law.
Speaker 6:I mean, that that that's something that we wanna make sure it doesn't happen, and I think that's the power of of having one national framework, and and that's why we're hoping to work with congress.
Speaker 2:What is the conversation like in DC right now around just the the craziest Terminator AI doom scenario, the idea that we need maybe some, you know, big button that we can push to turn it all off? There's been
Speaker 1:So many
Speaker 2:DC that hurts report
Speaker 1:around the issue.
Speaker 2:Okay. Someone
Speaker 1:else with AI, then someone else summarizes it with AI, and then they create a response with AI, and then it gets summarized with AI. Yeah. And it just ping pongs back and forth.
Speaker 2:Potentially. Potentially. But is there is there anything to address, like, runaway AGI superintelligence, the doom scenario that there are at least a few Americans who do think is a serious issue?
Speaker 6:Yeah. In in the framework, we we talk about that a little bit. I think, generally speaking, our view and what we put in the framework is that we want the relevant national security agencies in The US Government to have the expertise and the skills to be able to do the evaluations necessary to ensure our own national security in The United States. It's great that there are a lot of people out there that have concerns about the future and everyone has a right to that and they can waive their papers or everything that you mentioned there. But the key thing as governments, we need to have the capacity as an independent arbiter to do our own evaluations and think about it ourselves.
Speaker 6:I think that's very, very, very different and distinct from it as a regulatory body. I think in last administration where a lot of this type of stuff was being thought at was at places that were essentially regulatory bodies and saying like, We're going to do these tests and if we don't like to answer this test, then we may ban you or nationalize you or something. I think in our case, we think it purely from a national security standpoint where we want our experts that are thinking about the way that these models work to support our war fighters and ensure our own cybersecurity have the tools they need to do the testing to see where these models are ultimately going. I think that's probably a very natural and appropriate role for the government to play.
Speaker 2:How are you thinking about the government's role in reskilling, upskilling? We here on the show talk a lot about the economic opportunity that we see coming downstream of AI that might be some disruptive innovation. People might have new roles. I talk about how the job that I have now didn't exist when I was a kid because live streaming hadn't been invented.
Speaker 1:Or or the other side of it when, you know, Bezos, there was some news around Bezos Yes. This new project, you know, a $100,000,000,000 fund focused on AI manufacturing. Our reaction was like, this is probably gonna create a lot of jobs.
Speaker 2:A lot of jobs.
Speaker 1:We're gonna make more things in America. But a lot of people, you know, maybe outside of tech responded by being like, oh, this is gonna lead to a reduction in jobs.
Speaker 2:But how are you thinking about reskilling, upskilling, just helping shape and help the American workforce over the next decade as we go through this amazing transition?
Speaker 6:At a most basic level, we have a large set of programs at our labor department, at our education department, our small business administration that are all geared towards this reskilling and upskilling category of activity. What we try to pull it out in the framework we've been advocating for over a year is those programs should be geared towards preparing American workers for an AI economy. We should be creating programs and spending the resources that Congress is appropriating to the executive branch to be able to go out there and actually prepare Americans for the next generation jobs. We talk about that in the framework and it's something that we're going to continue to We've done a lot of work on how AI is affecting small business. I don't know if you guys had an opportunity to ever talk with Kelly Loeffler who's our Small Business Administrator.
Speaker 6:Something that she talks about all the time everywhere that she travels is what the uplift that AI is able to provide to America small businesses. The vast, vast majority of Americans are employed by small business, not by all these big corporations that are signing all these mega deals with all the hyperscalers. It's about all of these five to 50 person shops that power the American economy, And it's really these that the the these AI these AI breakthroughs have happened over the last couple of years that provide a whole new set of tool sets for these guys Yeah. In a way that we've never seen before. So I think it could be really really important for Still
Speaker 1:so underappreciated. It's just how transformative this is gonna be for small business owners. A person that's a one to 10 person company, they're bit you know, if you're an electrician, you're busy on a job, somebody calls, you don't pick up the phone because you're in the middle of something, well, great. AI can pick it up, qualify the client, schedule it. Like, that is gonna be transformative.
Speaker 2:Every challenge used to be a consultant or hiring a new person, and you're gonna have so many different opportunities to expand your business. Well, thank you so much for taking the time to come chat with us, Michael. We really appreciate it.
Speaker 1:And Yeah. I love I love how pragmatic it is.
Speaker 2:It's Very pragmatic.
Speaker 1:It's it's addressing the concerns that everyday people have and I think moving the conversation forward in a great way.
Speaker 2:Yeah. Thank you. Have a great weekend. We'll talk to you soon.
Speaker 6:Guys for having us.
Speaker 1:Talk soon. Talk soon.
Speaker 2:Goodbye. Let me tell you about Phantom Cash. Fund your wallet without exchanges or middlemen and spend with the Phantom card. Is there any other news, Jory, that we should go through today? There is a call sheet here.
Speaker 2:Which companies will officially announce an IPO this year? Jersey Mike's is running away with it at 73%. OpenAI is at 48. Anthropics at 42. SpaceX at 80 Jersey Mike's.
Speaker 2:Cerebras is at 91.
Speaker 1:We gotta do the Jersey Mike's IPO.
Speaker 2:Jersey Mike's IPO. If if they don't get on the New York Stock Exchange, we're not doing our job. We gotta have the founder on the show. SKIMS at 31%. Deal at 23%.
Speaker 1:SKIMS IPO is interesting.
Speaker 2:Databricks 22%. Sheehan 21%. Beast Industries at 14%. Andoril at 13%. This is an interesting I'm I'm really into this this market.
Speaker 2:Anyway, thank you for watching. I have to get out of here. Big weekend. I will see you all on Monday. Leave us five stars on Apple Podcasts and Spotify.
Speaker 2:Is there anything we gotta do? No.
Speaker 1:We'd love
Speaker 2:for the newsletter. Great.