Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 12 - 3 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
What's so proudly we hail. Zero (1h zero
Speaker 2:ms 17s): We're live.
Speaker 1:We're live. Welcome to TVP. N It is Tuesday, 03/11/2025. We are live from the temple of technology, the fortress of finance, the capital of capital. This show starts now.
Speaker 1:We got a great show for you today. Even though the market's down, we are making the best of it. We are up. It's a it's a golden era for short sellers.
Speaker 3:Yes.
Speaker 1:That's what it is.
Speaker 3:A bull market.
Speaker 1:It's a bull market in put options. Yes. So rough times out there. But no matter what you're doing, you gotta do it on public. Go to public.cominvesting for those that take it seriously.
Speaker 1:Multi asset investing, industry leading yields, trusted by millions. Get on public. Move your money around. Do whatever you think is best to your own research and
Speaker 3:you know what we're a fan of? Yeah. Buying when others are scared.
Speaker 1:Yeah. That's good.
Speaker 3:That's what we do. Yeah. When other are fearful. The streets.
Speaker 1:Yeah. When others are fearful.
Speaker 3:When others are fearful, we get greedy.
Speaker 1:Yeah. Greedy. Greedy when others are fearful. Anyway, moving on. We're talking about the market crash.
Speaker 1:Here's what happened. The Wall Street Journal is breaking it down. The stock market yesterday, trade threatens sent the Dow down more than 600 points. The Dow industrials dropped after president Trump said he would ramp up tariffs on steel and aluminum from Canada. Fifty Percent shares of industrial and financial firms were among the biggest decliners in the S and P five hundred.
Speaker 1:All 11 sectors in the broad index were trading lower. Fears about a recession sparked a sell off Monday with sliding tech shares spurring the Nasdaq's biggest loss since 2022. President Trump declined to rule out a recession on Sunday and said his economic shakeup would result in a period of transition. It's it was a really emotionally charged decline, said Katie Stockton, founder and managing partner of Fairlead Strategies. But, she added that, this is more than just a brief pullback that we're going through.
Speaker 1:New labor department data showed that The US had 7,740,000 job openings in January up from 7,510,000 in December, slightly above the consensus, for six point, 7,600,000 openings. So unemployment ticking up, too many job openings, not enough people getting placed in their roles. Big tech stocks recovered. They started to recover from some of their losses. Tesla shares regained some ground after the EV maker shed 15% of its market value on Monday.
Speaker 1:I saw an account I
Speaker 3:saw an account post. You know, there's that iconic shot of, what's the, Chris Paul is the basketball player where he's like, Chris Paul drills a three to close the lead close the the gap to 40 points. Like, that's that's tough. It's like going up Yeah. 3% today after being down.
Speaker 1:And it's, it's rough out there. But we've said it before, naturally aspen naturally aspirated v 12 with a gated manual shifter in the next Tesla Roadster, and it's a 10,000,000,000,000 stock. You heard it here first.
Speaker 2:There you go.
Speaker 1:Verizon stock Not
Speaker 3:financial advice.
Speaker 1:Not financial advice. But if you see them deliver a naturally aspirated v 12 with a gated manual shifter,
Speaker 3:We know that we will be going turbo long.
Speaker 1:We will be going turbo long. Verizon stock dropped more than 7% and was the weakest performer of the Dow industrials Tuesday morning. A company that flagged heightened industry competition at an investor conference. So rough time out there. Complains
Speaker 3:about competition.
Speaker 1:Yes. Yes. Yes. So lot of lot of reactions on the timeline. A lot of Gil here, he says, quote, and he puts in quotes, most things are not as serious as they feel in the moment.
Speaker 1:I don't know if that was about the market crashing, but it seems like it's supposed to
Speaker 2:be. Right?
Speaker 3:It's all priced in.
Speaker 1:I think so. But, yes, it is.
Speaker 3:I I I was just workshopping a post, which was being greedy is low key goated when others are fearful.
Speaker 1:It's extremely stupid, but you send it. I love it. What was the original format of that? I don't know. It was something funny.
Speaker 1:I like that. Yeah. Just send it. Okay. Anyway This
Speaker 3:is just for the record. It's a Warren Buffett quote. Yeah. It says, be fearful when others are greedy
Speaker 1:and be greedy when others are fearful. And so buy low, sell high. Anyway, the Kobayashi letter, has a thread here on the real reason that markets are crashing, and I thought we could maybe take a tour through this. Over the last two months, the S and P 500 and crypto have erased combined five and a half trillion dollars of market cap. I think we need a moment of silence for that.
Speaker 3:Yep. This moment of silence is brought to you by public.com. Fantastic multi invest multi asset investing products trusted by millions. Yeah.
Speaker 1:That's not enough silence. We have we have just witnessed one of the most sudden shifts in sentiment since 2020. What's happening? Let us explain. Let's begin with the timeline.
Speaker 1:Markets have known the trade war was coming since as early as mid twenty twenty four. In December, tariff threats ramped up. We saw many all time highs in the S and P 500 after that. Even after the trade war began February 1, we saw more all time highs. Since February 20, the S and P 500 has raised a whopping 4 and a half trillion in market cap.
Speaker 3:Yeah. Just, I guess, quick comment here.
Speaker 4:Yeah.
Speaker 3:Saying markets have known the trade war was coming is not exactly
Speaker 1:Yeah.
Speaker 3:Not exactly like, it's hard to say or it's hard to basically position that as fact. This is stated as a fact, but this is clearly their opinion. Right? Many people thought Trump would run, but many people all thought also thought Trump was not actually serious about tariffs.
Speaker 1:Yep.
Speaker 3:And still, in many ways, the market isn't fully pricing in tariffs because there's sort of this back and forth. He announces something. He just announced 50% tariffs on Canadian aluminum products this morning. Yep. But who knows if that's real.
Speaker 3:Right? There was, like, a day last week, I think it was Wednesday, where if you paid some big tariff bill, like, you know, at the end of the day, like, you know, it was like, you shouldn't have paid it, like, you know Very odd. Very, chaotic. Yeah. So I think the markets when when you look at the last Trump presidency and and and what the stock market did then, I think the markets to date, the sentiment has just been Trump presidency generally good for the economy because he's a guy that cherishes the economy.
Speaker 1:Yeah. I mean, the whole thing has become very oddly political. We I mean, we covered it during the Trump pump post.
Speaker 3:Trump presidency becomes political.
Speaker 1:It's not that. It's that it it is that for the first time in in my life, at least, I feel like like, small 2% moves in the market are driven by executive level. Like, the narrative is this is the this is the problem of the president. Like Yeah. Like, during the housing crash, you know, there is like a multi multi month sell down and a big recession and way over leveraged.
Speaker 1:And then people start asking questions, and they start asking questions about, well, who's responsible? In in in part the banks, in part in deregulation, they go back and they find different different pieces of legislation that might have led to this. Some of it came from the Bush administration, some of it came from the Obama administration, and and then, and so, it it it becomes like this bigger narrative, but this is the time where, like, crypto pops and people will be like, oh, this is because of Trump. And then and then and then, you know, s and p goes down to, you know, a couple percent and people will be, this is because of Trump. It's the worst thing ever.
Speaker 1:And and it all just, my takeaway is that we need a president who is just hyper focused on the short term stock market returns, and that's all they're doing every day. They're not thinking long term at all. Like a high frequency trader type.
Speaker 3:It's like a Curator protocol founder
Speaker 1:Exactly. Posting. Exactly.
Speaker 3:Which is just which is in many ways.
Speaker 1:Feedback into the market.
Speaker 3:Trump is the closest president we've had
Speaker 2:Very close.
Speaker 5:To that.
Speaker 1:Very close.
Speaker 3:But he's not doing enough.
Speaker 1:Even even he's put out statements like, okay. I don't really I'm not worried about the short term performance of the stock market. I'm trying to make America great again over some long period of time. No. I want him to say, yes.
Speaker 1:I do care.
Speaker 3:If the
Speaker 1:stock market went to to to 2% down, interest rates are negative.
Speaker 3:Yeah. There's some angle here where he says in the first quarter of my presidency, the S and P 500 was x y z. Yeah. By the fourth, it it had, you know, more than three x. Yeah.
Speaker 3:Yeah. You know? So he's he's maybe he's positioning Yeah. Positioning. He's really playing the long game.
Speaker 1:Maybe the president should have some sort of you know how Elon had that pay package that was, like, if he can get the if he can get the Tesla stock up to a certain amount, he gets more of it. He gets rewarded for high share prices. Is that effectively?
Speaker 3:Yeah.
Speaker 1:The president should have that where, like, if the S and P goes up by a by a certain amount, then they get to stay in power longer. But if it drops, then they get fired. And then we get a new president. And we get just Hyper
Speaker 3:financialized. Hyper financialized. It's already kind of like that. Right? You see these senators that are just running up these crazy Exactly.
Speaker 3:Crazy. Operating hedge funds.
Speaker 1:Yeah.
Speaker 3:Yeah. And, you know, the more the more the better they do in the in the public markets, the more they can invest into their campaigns, which
Speaker 1:is the
Speaker 3:more inside information they can get. Yeah. Exactly. Better investors.
Speaker 1:This is a great Yeah. Virtuous cycle. It's something we call it. One hand washes the other. Yeah.
Speaker 1:That yeah. That that's what we're going for
Speaker 4:here. Yeah.
Speaker 3:Alright. Let's get let's get back into this.
Speaker 1:Anyway, the Nasdaq is, sadly just 8% away from entering a bear market for the first time since 2022. What changed so quickly? The trade the the Kobe SC letter is arguing the trade war is simply the scapegoat. The real reason behind the market's decline is a sudden shift in risk appetite. We've gone from extreme greed to extreme fear in a matter of days.
Speaker 1:Positioning was so polarized that we have swung in the complete opposite direction. And, long Mag seven is the most crowded trade. Everyone agrees that tech is great and the AI narrative, and so everyone's pumped into that. Where it gets even more interesting is that institutional capital exited before this decline in tech stocks. Heading into 2025, hedge fund exposure to Mag seven stocks fell to a twenty two month low.
Speaker 1:Let's take a look at the divergence between the Nasdaq and fund positioning. On February 9, institutional investors built the largest Ethereum short position in history. This came as retail investors piled into crypto on the hopes of a US strategic reserve. Crypto is down in
Speaker 3:one direction. Institution Yeah. Went turbo long, and that was World LibertyFi,
Speaker 1:which ETH? Yeah. Oh, really?
Speaker 3:Yeah. Yeah. There we go. What is it? Eric Trump, which was basically Ethereum bull posting, you know, saying, like, now if it's my opinion, but now is a really good time to be stacking it right in there.
Speaker 3:Yeah. Unfortunately, another moment of silence. Yeah. Well, not if they didn't sell yet, but they
Speaker 1:they they're down, like, hundreds of millions. You know, there's whole, like, oh, not financial advice. I'm responsible. Yeah. You could get rid of that.
Speaker 3:A centralized blockchain that could fix do price fixing Yeah. Would be Yeah. Would be cool.
Speaker 1:Step one is Like, basically, a
Speaker 3:stable coin.
Speaker 1:To negative 10%, and then the fund rates the fed funds need rate needs to legally be negative 10% forever. Yeah. And then Yeah. And then and then maybe permanently, you could just legally mandate that the S and P grows at 10% a year forever.
Speaker 2:Yeah.
Speaker 3:Does there something prices.
Speaker 1:Yeah. There's something there. Exactly.
Speaker 3:We should we should workshop this tomorrow. Maybe maybe throw it into a blog post.
Speaker 1:Yeah. Crypto is even more supportive of our thesis. Take a look at the bullish crypto developments that have happened over the last two months. Even the even The US Bitcoin reserve became a sell the news event. So what's changed
Speaker 3:in December? And and to be clear, many people said Trump launching a token is so obviously the top because there's nothing there's really nothing you the US government can't launch a token. Right? It would just be competing. I mean, nothing's off the table anymore, but, you know, competing with your own currencies
Speaker 1:Every time someone said, oh, this is the this is the end of the road for the craziness in crypto Yeah.
Speaker 3:They've been pretty awesome. It very clearly felt like a massive Yeah. You know, sort of dying breath at the of a bull market.
Speaker 1:And retail had just gotten hosed again and again and again throughout Yeah. 2024. So all of the all the meme tokens A
Speaker 3:lot of people wanted to blame it on Melania.
Speaker 1:Oh, yeah.
Speaker 3:Because it sort of pulled the wind out of Sure. Trump coin and everybody, you know, felt like they were losing a bunch of money or were losing money.
Speaker 1:Yeah. But Anyway, so so they go to this, Apollo, risk list. Apollo was predicting a 90% chance of tariffs coming in 2025 while they were also predicting a 0% chance of a US recession. Fear and greed indices in crypto and stocks have hit their lowest since the 2022 bear market this month. Last year, crypto saw extreme greed levels of 92 plus, but now it's at a polar opposite of 17.
Speaker 1:Sentiment is the ultimate driver of price in any market regardless of fundamentals. When sentiment shifts so quickly, outflows hit record highs and cause flash crashes as we have seen.
Speaker 3:How do you how do you put the probability of a US recession at 0% if you're Apollo
Speaker 1:That is crazy.
Speaker 3:When the president is actively threatening trade massive trade wars and things that, I I think I think, Yeah. Any people can get that memo. Yeah. Bucko Capital had a really good post, which was basically, like, the president told me he was gonna destroy the economy, so I listened and sold everything.
Speaker 2:Yeah. Yeah.
Speaker 3:Yeah. And, you know, it's obviously, an exaggeration. Yeah. But there's some there's some truth to that.
Speaker 1:Yeah. Like, the the Like, Trump the Trump people can be sort
Speaker 3:of ripping
Speaker 4:a band aid off.
Speaker 3:Yeah. Yeah.
Speaker 1:Right? It's not it's not, oh, this is gonna be all all sunshine and rainbows. Although people were certainly talking like it was gonna be. So small cap funds saw 3,500,000,000.0 in out outflows. Mid cap funds saw outflows 2,100,000,000.0.
Speaker 1:Sectoral funds saw 4,500,000,000.0 in outflows. Once again, shift in positioning. This means that getting ahead of shifts in sentiment will be the most profitable strategy in 2025. They argue, VIX surges over 70% in one month. The swings are going to broaden.
Speaker 1:This is something that a lot of people have been talking about. Even, I think Jeff Lewis, you know, markets are getting more aggressive. The there will be more swings, more volatility. Probably Sentiment
Speaker 3:spreads faster is one thing. Right? Yeah. You can imagine a world where, now, you know, historically, you have a your college friend group, you know, guys that you just talk about random business, stocks, etcetera. You might get together with them
Speaker 1:Yeah. Once Yeah.
Speaker 3:Once every six months, and they're like, oh, yeah. I'm, like, pretty short the market right now. Yeah. Yeah. Yeah.
Speaker 3:Everybody, like, goes and they go
Speaker 1:short. Crazy.
Speaker 3:Now it's it's a group chat. Yeah. And, you know, it's just sort of that sentiment spreads really quickly.
Speaker 1:Yeah.
Speaker 3:We had a friend who went super long Tesla, you know, basically a month ago exactly. It's down, 40% since then. Oh, well. RIP.
Speaker 1:Yeah. Yeah.
Speaker 2:The the
Speaker 1:idea of going to something like what happened in, like, the seventies where there's, like, languishing stagflation for, like, a decade or even even post, housing crash where the economy was in the doldrums for, like, years seems unthinkable because the swings are just so fast now with COVID down and up, and then same thing with the with the the the interest rate crisis, like, down and up so fast. Through technical and fundamental analysis, they've been trading these swings, stocks, commodities, bonds, and crypto are highly tradable, and they're arguing that you should sign up for their stuff. But, anyway, kind of an kind of an interesting post, but Packy McCormick had one of the best jokes of the day.
Speaker 2:Oh, potty.
Speaker 1:He says, now would be the perfect time to go to to hit go on the strategic Nasdaq reserve. I love it. What a banger. Yeah.
Speaker 3:And and and who is saying that, if the US government needed them to manage oh, it was it was Keith on the show. He said if if we started a US sovereign
Speaker 1:wealth fund
Speaker 3:and, you know He
Speaker 1:wants it to cost
Speaker 3:was asked to manage some of the funds, he would do his He
Speaker 4:would oblige.
Speaker 3:He would oblige as a patriot.
Speaker 2:Yeah. Yeah.
Speaker 1:Yeah. Here, Keith. Go go to play $10,000,000,000,000. Become the next Masa. Great.
Speaker 1:It'd be
Speaker 2:great.
Speaker 1:I mean, the, the the the the steel man on the strategic Nasdaq reserve is, like, the original Peter Thiel thesis on, like, a cryptocurrency that's backed by hard hard assets. So kinda like the MakerDAO idea before, like, you know, non crypto companies. And the idea that you could you could have, like, something that looks like a tradable bond or tradable ETF slice. And when I go to pay you, I'm paying you not just a dollar piece of paper that's bet maybe backed by gold, maybe backed by nothing. It's backed by the cash flows of Apple, Google, Amazon, and every American business.
Speaker 1:Feels very stable, feels very hard to implement, but, was always like an interesting Totally. You know, turbo libertarian dream of the late nineties. Liquidity says, PE funds are the Chad meme, watching public markets plummet while keeping their portfolio marks flat. Always nice to be in privates when the market's down. Power bottom dad says, Elon is down almost $21,000,000,000 today.
Speaker 1:That puts him at only, check's notes, $113,000,000,000 richer than the next richest person alive. We did it, read it. I love it. So, yeah. Everybody's losing.
Speaker 1:Everybody all the billionaires what do they call it? The super billionaires? Wasn't that the the phrase the Wall Street Journal tried to coin?
Speaker 3:Giga beaners?
Speaker 1:Giga would have been way better, but you know they didn't use that.
Speaker 3:Giga nair.
Speaker 1:Giga nair. Between trillionaire and yeah. Centibillionaire is is confusing because some people use it for centimillionaire.
Speaker 3:Yep.
Speaker 1:So it needs yeah. I think giga is the right one. Giga giga billionaire is over a hundred. Yep. You're you heard it here for first folks.
Speaker 1:Garcia Capital says, I can tell the bottom is close because traders are starting to share bible verses.
Speaker 3:I haven't seen this yet, but maybe I'm not following enough,
Speaker 1:accounts. To really see this, but,
Speaker 3:but certainly sharing Warren Buffett quotes.
Speaker 1:Yes. Like,
Speaker 3:he he said, you know, he's known for saying being greedy is low key goated when others are fearful.
Speaker 2:Did did
Speaker 1:you post that already?
Speaker 3:Yeah.
Speaker 1:Yeah. That was great. And and a lot of people were saying, yeah. Like, oh, like, you know, now's a good day to learn about dollar cost averaging. And it's like, you weren't dollar cost averaging the last month.
Speaker 1:Like, now you're gonna start.
Speaker 3:The most memorable moment for me as as an investor where I really thought it was entirely over, like things were never gonna come back, was seeing Ethereum at $800
Speaker 2:Yep.
Speaker 3:And thinking, where's the bottom on this? Yeah. Like, what is the because with with cryptocurrencies, like, yeah, there's there's some network value and activity and all that stuff and fees and stuff like that. But I was like, we got no cash flows here. And and I don't know if this this, you know, protocol is is even gonna exist in in two years with with this was when when FTX had collapsed.
Speaker 3:Oh, yeah. There was just so much contagion. Very dark. And then, of course, it was, like, right when I thought that was the absolute We actually
Speaker 2:bought it.
Speaker 3:Time to buy. Yeah. So
Speaker 1:Yeah. What were the darkest moments? I remember the SUV crisis was pretty crazy.
Speaker 3:Yeah.
Speaker 1:I remember, like, just looking at my phone, like, all night and just be like, woah. And then the other one was the Sam Altman open AI drama over the weekend. That was, like, when when he got fired and then back
Speaker 3:Yeah. Yeah.
Speaker 1:That was, like, wow. I can't believe this is happening. This is, like, history of the movie.
Speaker 3:You were calling your second secondaries broker and, like, sell everything.
Speaker 1:No. That that was less of, like, a shock to the market.
Speaker 3:Yeah.
Speaker 1:But the SVV thing was clearly, like, okay. Like, the market is bad. Like, rough. Anyway, if you're losing sleep over the markets, why don't you improve your sleep by getting an Eight Sleep? Go to 8Sleep.com/tbpn.
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Speaker 1:Yeah. Yeah. Send us your sleep scores. Anyway, let's move on to some historical analysis from the Wall Street Journal. They write today Rolf Winkler writes, what the .com bus can tell us about today's AI boom.
Speaker 1:This week marks the 20, but it was I
Speaker 3:just gotta say Rolf Winkler over at the journal. This time it's different, buddy.
Speaker 1:This time it's different.
Speaker 3:Yeah. No. We don't know yet. It it feels different because, you know, you got companies like Cursor and, you know, WinSurf doing, you know, millions of dollars of revenue per month when their .com counterparties were doing, you know, millions a year. Thousands.
Speaker 3:They're doing
Speaker 1:yeah. We're in the back and
Speaker 2:we're in the side.
Speaker 1:Like, emails of them, like, being like, look at this chart. I went from zero to a hundred thousand dollars in revenue in six months. Of course, I'm worth 10,000,000,000.
Speaker 3:Yeah.
Speaker 1:Of course. And everyone's, like, I'm gonna do it even faster. 0 to a hundred thousand in revenue, then I go home.
Speaker 3:We have plumbing.com. Yeah. How it's worth at least a billion dollars by itself.
Speaker 1:Yeah. I mean, the the the multiple is, is all the difference here. Anyway, there's some good history in the Wall Street Journal today. Twenty five years ago this week, the Nasdaq composite hit its .com era peak after soaring more than 500% in five years. Imagine that ride.
Speaker 1:You're just sitting in the NASDAQ, five x ing your money.
Speaker 3:Mary Meeker just going off.
Speaker 1:Going off. Its subsequent collapse was swift and brutal. Small investors lured by a promising new technology called the Internet's lost called called the Internet lost fortunes. The economy stumbled. High flying companies like pets.com, the globe Com, and webvan collapsed.
Speaker 1:Today, some investors are worried the same cycle might be playing out when it comes to artificial intelligence. Now, the interesting thing, I don't know about theglobe.com, but Webvan was basically Instacart, very successful company now. Pets.com, Chewy Com, pet delivery stuff. Yeah. $10,000,000,000 company for a while.
Speaker 1:I'm not sure exactly where it trades now, but big company. Lots of good ideas. Mp3.com went public with just a domain business plan. No revenue. Obviously, Spotify's a beat beast of a business now.
Speaker 1:So Yep. The story of the.com to me is not, like, wrong ideas, directionally correct, just bad timing, bad bad execution.
Speaker 3:Yep.
Speaker 1:Today, some investors are worried the same cycle might be playing out when it comes to artificial intelligence. Even if that is the case, a big if, there's an important lesson for investors from the .com collapse. Ultimately, the early Internet hype proved correct. It's easy to understand the fear and echo of the .com boom. Leading AI companies are valued in the tens or hundreds of billions of dollars.
Speaker 1:Some of them with little prospect of generating meaningful sales. That's not I mean, I I don't know who exactly they're talking about. A lot of these companies have plenty of prospects for generating meaningful sales. There there's obviously a ton of questions, but
Speaker 3:Yep.
Speaker 1:Investors are racing to give the companies still more money it ever had.
Speaker 3:Having a founder on in Yeah. Forty five minutes since putting up insane numbers in his first month.
Speaker 1:Yep. So so they're they're buying AI chips to fill out new cavernous data centers. I like that term, cavernous data centers. Yet the .com boom and bust showed that big bets on ambitious technologies can pay off in the long run. The five most valuable listed companies globally, and six of the top seven are tech companies from that era or ones that grew from seeds planted then.
Speaker 1:In other words, the .com bubble had elements of what some investors call good bubbles that fuel rapid adoption of revolutionary technology.
Speaker 3:I wanna make a statement for the record Yep. That we have been pro bubble.
Speaker 1:Pro bubble. We're pro
Speaker 3:bubble in the first episode of the show. Yes. And we're gonna be pro bubble in the last. Yes. And we're certainly not gonna fold now that Tesla's down 40% a month.
Speaker 3:Yeah. It's gonna take a lot more than that.
Speaker 1:Yeah. So the the journal's, separating out the idea of good bubbles versus bad bubbles, which, I I I think it's a good a good distinction to make. Bad bubbles are things that where people speculate on assets that don't make the economy more productive. Tulip bulbs, beanie babies, houses in the Arizona Desert. Boom to bust and they have some charts here.
Speaker 1:It's very difficult to be a radical innovator, sirs says Carlota Perez, author of Technological Revolutions in Financial Capital, The Dynamics of Bubbles and Golden Ages. To create a world that doesn't exist, such innovators convince suppliers, workers, and financiers that they should march simultaneously toward an imagined future of clamoring consumers. While people race to cash in, ideas are are tried, and infrastructure is built, many fail who nevertheless lay important groundwork. Famously, the the fiber optic lines of 2,000 were the equivalent to the electrical grids of the early nineteen hundreds. The railroad tracks of the eighteen hundreds, the canals of the late seventeen hundreds, says Perez.
Speaker 1:Busts followed those booms, yet the networks fertilized new markets. And so, you know, even if we build these massive, data centers, we don't know what to do with them. Eventually, we'll figure it out, which is, why this is potentially even if it is a bubble, it's a good bubble.
Speaker 3:We love bubbles.
Speaker 1:AI innovators are making their own gargantuan capital investments primarily in specialized semiconductors known as graphics processing units, GPUs made by Nvidia. Today, Nvidia is the most valuable company in the world or among them with a market cap of 2,700,000,000,000.0. The question of whether those investments will lead to productivity advances that power the economy or elements of a good bubble. The jury will be out for some time, but there are tangible advances already. Search is smarter.
Speaker 1:AI bots can write software code, cover letters, and more. AI agents are booking flights, filing taxes, scheduling meetings, and acting as smart assistants that could boost pro productivity in years to come. Not that there won't be losers, some AI companies are already melting down. Sequoia Capital's David Khan has written of the massive revenue hole that AI companies need to fill to justify their data center spending, which could lead to a speculative shakeout. Yet, he's optimistic that That's
Speaker 3:a great article, by the way.
Speaker 1:Oh, yeah?
Speaker 3:It's probably worth revisiting at some point.
Speaker 1:The massive revenue hole is the is the one that'll the the journal linked to.
Speaker 3:Yeah. It's basically this idea of, like, if you're spending I mean, it's simple idea.
Speaker 1:Oh, it makes sense.
Speaker 3:Spending all this money, you have to actually make it back at some point.
Speaker 1:Yeah. But, I mean, as we say, you know, 99% of AI companies quit right before they close the massive revenue hole
Speaker 3:Yes. Before they
Speaker 2:hit it.
Speaker 3:Many have said that.
Speaker 1:Yeah. Yet he's optimistic that a huge amount of economic value will be created as I. To distinguish bad bubbles from good bubbles, look at the assets the people are betting on, says Bill Janeway, former vice chairman of Warburg Pincus, who has studied speculative eras. The world banking system collapsed in 02/2008 when houses couldn't people couldn't afford or financed with risky mortgage mortgages sliced into highly
Speaker 3:leveraged securities. Study speculative errors, John. I participated in them. Who are you gonna trust more? It's great.
Speaker 3:Bill Janeway?
Speaker 1:Yeah. Has he ever
Speaker 3:had an Studied speculative errors?
Speaker 1:Has he ever had an NFT profile picture? Yeah. If you haven't been in the trenches of the speculative eras, Bill, I don't wanna hear from you.
Speaker 3:Where were you in 2021?
Speaker 1:In contrast, Janeway points to Tesla. Some investors think its shares are overvalued, but Tesla is using its windfall to deliver a future of electric vehicle solar as well as self driving cars and robots power powered by AI. Many overhyped AI, startups may flame out, yet some will have had brilliant ideas that get picked up by others. Anyway, fun article, good times, they talk more about, the smartphone revolution. By the time Steve Jobs unveiled the first iPhone in 02/2007, wireless phones and the internet were already widely used.
Speaker 1:Flash memory was cheap, computer chips were smaller and faster, responsive touch screens had already been invented, And when the smartphone revolution came, it was General Magic alums, Tony Fadell and Andy Rubin who helped deliver it. Fadell helped develop the iPod and iPhone and Apple, and Rubin founded Android, the world the the startup behind the world's largest mobile operating system. And so, do you are you familiar with the story of General Magic? Pre It's fascinating. It was basically this like, dream team of like, you know, all the venture capitalists came together, all the top technologists came together, and they were going to build an iPhone essentially in the mid nineties, I believe.
Speaker 1:And they, so an early version of the smartphone was released in 1994 by a company called General Magic. Co founder, Mark Peratt, envisioned digital touchscreen phones, but his device arrived years earlier. There were no digital cellular networks, PourUp recalls, to retrieve digital content of which there was little. It had to be plugged into a dial up modem. So they were just too early.
Speaker 1:Company doesn't work, but the team goes out and works at Apple, and ultimately Google post Android acquisition. And so as hundreds of billions of dollars pour into AI, some are calling it another bubble. True or not, Perez forecast that AI will boost productivity as the first electrical lines did when they replaced steam power. General Magic went bankrupt in 02/2002. Its devices were so far ahead of their time that few customers bought them.
Speaker 1:Another Prussian idea it was working on would also have to wait AI agents to build AI agents built to complete tasks for people. The engineer working on that, project, John Gian G'Andrea, now heads Apple for a AI for Apple. Oof. Interesting. Maybe they need some new blood.
Speaker 1:Maybe he's, he needs to hang his jersey in the rafters. He's been certainly early to this stuff, but not rolling things out faster. My biggest complaint recently, we talked about the gen emoji thing, which is terrible, playground, which is bad. They still haven't replaced the voice dictation. Like, I'm I'm used to decent voice dictation now.
Speaker 3:You use it a lot.
Speaker 1:I use it I use it a lot for ChatChippity. I go to ChatChippity and I click the voice thing, and it and it records it. And it nails it every single time no matter what. And then every once in a while, I accidentally hit the button on the Apple keyboard, and it's just terrible. And it's like, Apple, that's not a security thing.
Speaker 1:That's not that's not some crazy it's it's it's so easy to implement whisper. It's like, there's open source frameworks. There's like, they could buy a company. There's a million ways to just upgrade that and just make the existing stuff better. I was thinking about, like, how funny it is that their their Apple intelligence you've seen, like, their, like, like, their rewriting thing?
Speaker 1:Where, like, you you highlight stuff, and then you have writing tools now. Have you seen this? Writing tools? Writing tools describe your change. This is an Apple intelligence.
Speaker 1:So if you highlight some text, you can go to writing tools. You can say, like, proofread it, rewrite it, make it friendly, professional, concise, like, turn it into key points, turn it into a bullet list, turn it into turn it turn it into a table. Like, it's cool. But it's but it's weird because, like, there's already spell check and grammar check, like, running. And so instead of, like, replacing that with one system that runs over your text, now there's just two systems that are talking to it, and they're, like, kind of fighting.
Speaker 1:One's like the old school, like, hey, we're just checking spell check here. It's like the the metaphor is like there's a robot over your shoulder who's just kinda looking and say, oh, you misspelled this. Like, let's underline it with the blue line. You can click and you can change. Right?
Speaker 2:But
Speaker 1:then there's a separate robot over here saying, hey, actually, you wanna turn this into a list of bullet points? Like, I could do that for you. And it's like, I kinda just want one system that I'm interacting with that I'm, like, really comfortable with instead of, like, when I want this problem, I go over here. It's very, like, fragmented. Anyway, well, time is money.
Speaker 1:Save both. Go to ramp.com. Easy to use corporate cards, bill payments, accounting, and a whole lot
Speaker 2:more all
Speaker 4:in one
Speaker 1:place, folks. You gotta get on ramp.com. We launched our season two of the show, our version two today. We are now officially supported by ramp presented by ramp. And
Speaker 3:We had talked about ramp, but we had never we'd never shown
Speaker 1:a handshake on that we were we never in partnership with them. Little little teasers, but we never actually really told everyone that we were
Speaker 3:Yeah. You
Speaker 1:know, partnered on.
Speaker 3:We had never had a shot of us me grabbing a briefcase out of an unmarked black van and pulling it into a yellow Ferrari and driving away.
Speaker 1:But now That's really not what makes it
Speaker 3:sort of official.
Speaker 1:Now now it's clear that yeah. We're we're we're in the
Speaker 3:Great car too.
Speaker 1:Underrated. We're in the pocket of
Speaker 3:big ramp. Yeah. Big ramp. Big ramp. It's great.
Speaker 1:A lot of
Speaker 3:people have been talking about, you know, the the potential monopoly, you know, positioning of ramp and and big ramp. Yep. Yep. But, we're conflicted out of that.
Speaker 1:We are. We are. Anyway, let's move on to another big deal. OpenAI signs a $12,000,000,000 deal with CoreWeave. They'll get an equity stake.
Speaker 1:Coreweave and NVIDIA backed cloud provider, which we talked about on the show last week. They're filing to go public. We had Nick Carter, one of the first angel investors in the company on the show, which is very cool. They just signed a five year deal to rent AI servers to OpenAI according to a Reuters report. As part of the cloud deal, OpenAI will also get a stake in CoreWeave expected to be worth around 350,000,000 when the company goes public.
Speaker 1:Now CoreWeave already has a big partnership with Microsoft, and they've signed deals to spend more than $10,000,000,000 renting AI servers through 2030. And so this is the Satya Nadella I, you know, I own. I also like to lease. I like to rent. I like to do everything.
Speaker 1:I, you know, I'm a CoreWeave customer. It all just depends on what the flavor of the week is for me. I'm good for my team. 5,000,000,000.
Speaker 3:So, I have another article pulled up here. In 2024, Microsoft accounted for 62% of core we've revenue, which is wild.
Speaker 1:Well, that yeah. Yeah. That that that's one of the main things that people are
Speaker 3:counting on in this
Speaker 1:one is revenue concentration. Yeah. Are they too concentrated? Because if if Microsoft says, hey, we're out, then the company's worthwhile at a tenth or something or fifth. But, you know, we'll see.
Speaker 3:Yep. Yeah. And so in many ways, OpenAI could have continued to access CoreWeave's Yep. Underlying products through Microsoft. Yep.
Speaker 3:But now they're not. Now they're So that's why
Speaker 1:their own company. They're they're leaving the nest, spreading their wings. Yep. Becoming, all grown up.
Speaker 2:Yeah.
Speaker 1:They're even going
Speaker 3:You do have to credit you gotta credit Satya and Sam for publicly, you know, right after everybody's like, oh, they're beefing. They're they're they're they're not on the same team anymore. They they, like, went and took a picture together.
Speaker 1:No. Oh, this is
Speaker 3:recent. This is probably three months ago at this point. But Jersey swab. No. No Jersey swab.
Speaker 3:Okay.
Speaker 2:Well
Speaker 3:So this barely counts.
Speaker 1:Yeah. Barely counts. You you gotta do the Jersey swab if you're serious about, you know, healing wounds.
Speaker 3:Exactly.
Speaker 1:You know, Zuck and Zuck and Jensen seem like they're just really aligned. They're not playing in each other's backyards at all. It's like pure customer. Nvidia never built a
Speaker 3:Doesn't meta have a chip?
Speaker 1:They're, like, talking about it, but it's clear they're still clearly still a huge Nvidia buyer. Nvidia's not trying to do any, you know Nvidia does how, like, have a cloud offering. So with the other hyperscalers Yeah. They're they're in some competition sometimes.
Speaker 3:Yeah. I think today, actually, Meta announced that they're testing a new AI chip with TSMC. So you were correct that they were respectfully just letting each other Okay. You know, do their own thing. But, now Zuck is kind of doing the same thing.
Speaker 1:Was there a Morris Chang, Zuck, Jersey Swap? Maybe they're doing
Speaker 2:the thing.
Speaker 1:I'm guessing.
Speaker 3:I'm guessing.
Speaker 1:They must have. Yeah. Even if there's no photo, they probably did it.
Speaker 3:Jersey Swap. Jersey Swap.
Speaker 1:The Financial Times reported
Speaker 3:it. They're testing it.
Speaker 1:So the Financial Times reported that Microsoft cut back on some plans spending with Corvie Corvie due to delivery issues and missed deadlines. Corvie denied the report and said there have been no contract cancellations or walking away from commitments. And, so that's the story of OpenAI and Coreweave. And I feel like, this IPO is gonna be pretty crazy because there's all these deals that are gonna get papered, like, right before. And the the future in the future revenues and cash flows and contracts of these businesses, like, the entire AI industry is kind of deciding, like, like, hey, like, we're gonna spend, like, you know, what I mean, the base case is, like, 250,000,000,000 in CapEx in the in one year.
Speaker 1:Right? Yeah. And so, like, where does that pie get sliced up? And so if you're a core wave and a couple billion dollars will materially move your, you know, market cap, then, yeah, you're gonna do a deal with OpenAI for 12,000,000,000 over
Speaker 3:all the time. Is very convenient.
Speaker 1:And give stock away and stuff. So there's all these kind of, like, one hand washes the other type deals.
Speaker 2:Yeah.
Speaker 1:We love to see.
Speaker 3:They're just to reiterate, so CoreWeave OpenAI is doing this deal, but then CoreWeave is passing them back $350,000,000 in stock. Yep. And it's very conveniently timed with Corey's IPO where the number one risk factor, like you said, is that the revenue concentration with Microsoft. Yeah. I feel like people will I Yeah.
Speaker 3:My my sense is that analysts will switch from revenue concentration, which is still gonna be a focal point to, okay, you're less you have less concentration going forward, but OpenAI is losing all this money and, you know, it's not the most reliable customer and then they're gonna still, you know, continue to have to fight a similar fight.
Speaker 1:I do like this trend of if you spend a lot of money with a company, you get equity in it. I feel like with how much you spend at Erewhon, you should they should give you a size. They should cut you in.
Speaker 3:They should
Speaker 1:give you some equity.
Speaker 3:You're telling me.
Speaker 1:You're telling me that's
Speaker 3:I go to their customer support daily. Cold email. Hey. Here's how much I spent in the last week.
Speaker 1:Copy in.
Speaker 3:Think about a little
Speaker 1:Little pre IPO.
Speaker 3:Yeah. A little pre IPO slice.
Speaker 1:Slice me off of it.
Speaker 3:I wouldn't even need it. I don't even need the shares. Just let me let me get an allocation.
Speaker 2:Let me
Speaker 1:get an allocation in the area in the Air One. I mean, LVMH should should cut us in with all the Dom we're buying too. Yeah. You know? Every company, if you're a good customer, let us get let us get a taste.
Speaker 1:Anyway
Speaker 3:Exactly.
Speaker 1:Speaking of stuff you can buy at Erewhon, there's a, a tour of food and drink startups in the information today, taken through some d to c, some, some consumer, some CPG brands. I thought this was kinda interesting. Strategic acquirers are starved for growth. They're cash rich, and they need to innovate, says John Levert, a managing director for consumer retail at investment bank, Solomon Partners.
Speaker 3:The most conflicted Yeah. Possible position, the guy who wants to sell all the consumer the upstart consumer brands for the most amount of money to the to the strategic.
Speaker 2:They have
Speaker 1:to this. Conglomerates like Coca Cola, PepsiCo, and Mars.
Speaker 3:You guys have so much cash. You gotta innovate. You gotta do it. Why not buy?
Speaker 1:You gotta do it.
Speaker 3:Why not buy some some
Speaker 1:of my brand?
Speaker 3:Why not some of my clients?
Speaker 1:So they've long used acquisitions to add trendier brands popular with new sets of shoppers. And over the past few years, new food and drink brands have been able to grow sales quicker than ever using social media to reach shoppers cheaply and leaning into viral health and wellness trends. Still, big acquirers will likely be selective. To be a good candidate for an acquisition, brands need to have over a hundred million in annual sales, and gross margins of between 3050%, Lavertz said. They should be nicely profitable on earn on EBITDA, and if they're growing quickly, buyers typically are okay with a lower EBITDA.
Speaker 1:Some potential sellers are holding off on seeking buyers until later this year amid uncertainty around the impact of tariffs and supply chain disruptions. Selling or offloading a big stake to private equity firms could be another alternative for brands that aren't able to find a strategic buyer. And so here are the eight food and beverage startups that, might get acquired in the next year or two. Banza. Banza.
Speaker 1:Banza. They raised 31,000,000. They were founded on
Speaker 3:'24 It's garbanzo bean based pasta.
Speaker 1:Cool.
Speaker 3:I I used to eat a lot of this. Yeah. I still have it from time to time. It's pretty good. There's
Speaker 1:Is is is the pitch low carb? Lower carb than pasta?
Speaker 3:No. It's just, no gluten. Oh, no gluten. Gluten free. Okay.
Speaker 3:Sort of high protein.
Speaker 1:Yeah. In in 2014 when they launched, this was this was ultra trendy as they say. More recently has added products including high protein waffles. They raised $20,000,000 in 2019 from investors including private equity firm Prelude Growth Partners and Danny Mayer's investment firm.
Speaker 3:Smart.
Speaker 1:They sell their products in 23,000 locations. Chomps, the line of You're
Speaker 3:a big Chomps guy?
Speaker 1:I'm not a big Chomps guy. I mean, I'm in a if I'm in, like, a random, store, maybe I'll grab one, but,
Speaker 4:I think they're fantastic. Daily driver.
Speaker 1:Yeah. No.
Speaker 3:I I
Speaker 1:like the idea.
Speaker 3:I'm almost a daily driver. Yeah. My son is an absolute chomp fiend.
Speaker 1:Okay. If
Speaker 3:I ever pull one out Yeah. He'll just come over and and he'll just take it from me and just eat the entire thing.
Speaker 1:I mean, they're looking really strong. It's been a long road, 2012. So, I mean, they're going on thirteen, fourteen years old. But in 2024, they did over half a billion dollars in sales, and the last disclosed valuation was 203 hundred million. They raised 80,000,000.
Speaker 1:Yeah. They're well well done now. They are in the money. Stride Consumer Partners looks great on this deal. They got meat stack meat sticks, other snacks, founded by personal trainer Pete Maldonado.
Speaker 3:That's that's, John had John had an idea, this morning while we were working out to just have fish be
Speaker 1:I don't
Speaker 3:know if you could
Speaker 1:leak this. It's such a good idea.
Speaker 3:Precut steaks. Like, imagine if you could buy, like, steak that was cooked in sort of more of, like, a bacon style, like, pre sliced form factors. You could just instead of going for a chomp, just grab, you know, a little bit of filet mignon
Speaker 1:Yep.
Speaker 3:Which is, I'd like somebody in the audience to build that. We'll we'll definitely trial it.
Speaker 1:Well, my idea was specifically, like, Chick fil A, but steak based. So you go to the drive through, and instead of it getting some chicken nuggets, you get a bunch of steak, and it's, like, $50 because steak, it's expensive.
Speaker 3:And there's no other items and there's no other items on the menu. Yeah.
Speaker 1:It's like I mean, maybe, like, you get a whole steak
Speaker 3:or
Speaker 1:you get half a steak or you get little slices of steak. But, like, it basically, the the restaurant just cooks steaks all day and then you drive up and you buy steaks.
Speaker 3:Economies of steak. Steak.
Speaker 2:It's great.
Speaker 1:Anyway, Chomps has proven it can scale up. It's on its own. The brand has already expanded to most major grocery chains, Whole Foods, Target, Kroger, Trader Joe's, as well as many convenience stores. And Maldonado expects it to hit a billion in retail sales this year. Wow.
Speaker 1:That is big. Could include a strategic exit in IPO, or we could continue to hold it for cash flow. Good Culture. I I I don't know this company. They did over 200,000,000.
Speaker 1:There's founded in 2014. They raised 85,000,000. Good Culture has been the forefront of resurgence in
Speaker 3:the population of yogurt and cheese. It's like a yogurt dairy, health, better for you kind of dairy esque brand.
Speaker 1:Cool. Do you know Lesser Evil? Are you familiar with this? 2,004. Wow.
Speaker 3:Popcorn.
Speaker 1:That's an old company.
Speaker 3:Hundred and
Speaker 1:$65,000,000 in sales. They raised 45,900,000.0. Aria Growth Partners, Valor Equity Partners is in there. That's amazing because Valor's in, like, SpaceX. But, yeah.
Speaker 1:Good team around the around the board. Looking good. Raised money in 2023 around $19,000,000. And apparently, they are exploring a potential sale, but also seeking evaluation of around a billion dollars. That would be a relatively rich number compared to a recent to recent snack deals.
Speaker 1:In January, Flowers Foods said it would pay 795,000,000 for Simple Mills, which sells gluten free versions of snacks like Goldfish and Wheat Thins, but had higher net
Speaker 3:sales revenue. The trade the basically trade of the early twenty tens was just to go into a seven eleven or a gas station and make a better for you version of every product. Yep. Every single product. From meat sticks to, wheat thins to Goldfish, you know, all all these categories.
Speaker 1:It is kinda crazy that no one said, like, let's just do that. They do everyone it was always, like, some random entrepreneur focusing on one single category. There was no one who said, like, our business is we are going to create a better for you product in every single category.
Speaker 3:Yeah.
Speaker 1:Some people focus.
Speaker 3:Yeah. Some people tried to do that, but you can't remember any of their names.
Speaker 1:No. I agree.
Speaker 2:They just They
Speaker 3:didn't nail anything. That's that's the thing. CPG, we talked about this on the show yesterday. CPG is so tangible Yeah. That people assume that it's very easy.
Speaker 3:Oh, I'm gonna make a cracker. I'm gonna make this drink. And then you realize you actually have to the best CPG companies either got super lucky Mhmm. Which is unreliable, or they iterated across 30 plus production runs to, like, dial in a product and make it truly, truly great. And they had to, like, reinvent it when they scaled up again.
Speaker 3:And Yep. It's just really difficult. It's basically blue collar Yeah. Entrepreneurship Yeah. And that, you know, you have to go sit in grocery stores early on and just, like, get people to trial your product.
Speaker 3:It seems crazy, but, that's kinda what it takes.
Speaker 1:Liquid death. I mean, this is another good example. Like, liquid death, super unique go to market, super unique branding. Like, that's not gonna come out of some hold code that's just like, we need better for you in every category because
Speaker 2:Yeah.
Speaker 1:Liquid Death is a very bespoke, like, Liquid Death is not a brand that That was a marketing. Fish. Right?
Speaker 3:It's Yeah.
Speaker 1:It it it doesn't translate. It's a very different thing.
Speaker 3:Liquid Death had perfect marketing market fit in a mass market product that they could sell everywhere.
Speaker 1:Yep.
Speaker 3:And they've executed that very well. They've they've also been very aggressive in terms of raising capital science, which is an LA based sort of incubator that incubated it.
Speaker 1:Yep.
Speaker 3:They were also in Dollar Shave Club. That was, like, their first big outcome, I think, in the in the d two c world. I was getting pitched. Yeah. I was getting pitched, liquid death, you know, pre IPO round.
Speaker 3:I didn't sign any type of NDA. I think it was at, like I think it was at, like, close to $2,000,000,000. I think that's completely unrealistic unless it was trading like a meme stock.
Speaker 1:Well, they did get some private credit money in. They got a $55,000,000 working capital line from Ares Management. Let's go.
Speaker 4:Let's go.
Speaker 3:It's one
Speaker 1:of the best in the game. They got We have
Speaker 3:we have we
Speaker 2:have we have we
Speaker 1:have we have a billionaire support.
Speaker 3:Private credit fund as a partner
Speaker 4:For sure.
Speaker 3:For the show. It's great.
Speaker 1:And so we'll see we'll see where that goes. Olipop, also very, very popular. They're doing four hundred to four hundred and fifty million in sales. They've raised 90, and the last disclosed valuation was 1,850,000,000.00. So while pulling a a a four or five x revenue multiple, not bad.
Speaker 1:We got JPMorgan's private capital growth equity fund, Monogram, Rocana Ventures, low calorie, low sugar sodas with added fiber. It's long been seen as a candidate candidate for buyout by a big beverage company, and they're in kind of a race against Poppy, which was launched in 2020, just three years after Olipop started. Poppy's doing more than 500,000,000 in sales and has raised 30,000,000 in funding.
Speaker 3:Yeah. So Poppy directly they were also making sort of better for you ish sodas, but then Olipop was working so well that Poppy completely cloned their product down to the font. Wow. Like, it was just Spicy. A complete, copycat.
Speaker 3:But they to their credit, they executed well Yep. And have grown sales, pretty impressively. Yep. A buddy of mine is, the head of growth. I actually don't know what his title is now, but he was the head of growth for Olipop back around their seed round.
Speaker 3:And he he's a super well connected, smart guy, and honestly ask him. I didn't really understand how hard Olipop was was ripping. This was, like, 2020, and I was like, are you gonna look and do other things? Like, do you wanna be ahead of growth for, like, a CPG company Yeah. Like, your whole life?
Speaker 3:Because I he had all like I said, he had all these opportunities, and he had been there for a while already. He's like, no. Like, we're doing well. I'm gonna stay. And, like, I'm sure he's gonna do, like, really, really well from this.
Speaker 3:So
Speaker 1:And, Cavu Consumer Partners is in is in Poppy, which is Rohan Oza's fund. You might have seen him on Shark Tank. Good good guy. I ran into him in Beverly Hills the other day. Anyway, if you're building a, consumer product, a food product, a beverage, you're gonna need to advertise it.
Speaker 1:And where should you advertise it, Jordy?
Speaker 3:Out of the home, Jordan.
Speaker 1:Out of the home, Alan. Ad quick. Go to adquick.com. It's out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising.
Speaker 1:Only ad quick combines technology, out of home ad, expertise, and data to enable efficient, seamless ad buying across the globe. And so start a CPG company and throw it on
Speaker 3:a billboard. Obviously, we are obviously, we are partnered with AdQuik. Yep. And, right after we launched the video this morning, with Ramp, we started going back and forth with, Chris and Adam on the AdQuik team about, our video with them. So Great.
Speaker 3:There's lots in the works. I'm excited. Very excited for that one. Iconic memes will be created recreated Definitely. To celebrate out of home advertising.
Speaker 1:Yeah. And we wanted to celebrate some great out of home advertising. Durin, put up a billboard that says, you can't have rocket science without rock science. Duran's a new mining company. Very cool.
Speaker 1:And Jackson Moses here says, ads that go hard. I love it. Right outside the SpaceX headquarters. So beautiful. It's time
Speaker 3:to mine.
Speaker 1:We love we love some billboards out
Speaker 3:That's actually insane alpha that you can get a billboard right in front of SpaceX.
Speaker 1:And then just take the photo and SpaceX is right there. It's really good. Anyway, we gotta move, we gotta move on. We got fifteen minutes till our first guest is joining. Have you seen Meghan Markle's new Netflix show, Jordy?
Speaker 3:I haven't, but everybody's been saying the show is one of a kind. It's the best ever nobody's
Speaker 2:ever made. I don't
Speaker 1:know about the second part. It's definitely one of a kind. But I don't
Speaker 3:know People are saying it might be the show of the year.
Speaker 1:Well, I don't know. I'm not really equipped to judge this. I don't wanna watch a lot of cooking shows, but I watched, like, five minutes of it, and it was atrocious.
Speaker 3:Oh. It was really, really rough. Really, really rough. Ouch.
Speaker 1:But, you know, I me dragging it is nothing compared to what The Economist did. It was one of the roughest articles. I was laughing out loud and I so I wanna read some of it here because, The Economist is one of those one of those journalism outfits that has just incredible command over the English language and can body someone in the most
Speaker 3:Basically, pseudonymously. Not pseudonymously. Basically, anonymously. Yeah.
Speaker 1:It's an it's an anonymous writer, and, it's it's hilarious. So so I'll read some of this. One scene is magical. Another is so pretty. Another, delightful.
Speaker 1:Welcome to With Love with Meghan. Meghan Markle's new cookery and lifestyle show in which she smiles at things in Montecito. In episode one, she smiles at raspberries on a cake. In another episode, she smiles at hydrangeas. She also smiles at bees whose hives she keeps on her property.
Speaker 1:Quote, when I think of honey, I think of bees, she says, in one of the many insights with which the show brims. Just like, wow. When
Speaker 3:I think of honey, I think of bees.
Speaker 1:Just like these are the type of insights you're getting from this show. There have been doubts about whether Netflix was right.
Speaker 3:We talked about bees and honey on the show before.
Speaker 1:We did.
Speaker 3:And John didn't believe that
Speaker 1:She's more of an expert than I am.
Speaker 3:John didn't believe that bees ate their own honey. They do. Turns out they do.
Speaker 1:They do. There have been doubts about whether Netflix was right to fork out a reported 100,000,000 in a deal with miss Markle and her husband Prince Harry for this show and other content. Such doubts must now be dispelled. However, miss Markle is not just smiling. She's on a mission.
Speaker 1:As she explains, she wishes to share some little tips and tricks for entertaining friends and elevating one's life. Such as, perhaps, make sure to member little tips and tricks. Such as, perhaps, make sure to marry a member of the British royal family.
Speaker 3:Wow.
Speaker 1:We've been saying this.
Speaker 3:We've been saying this.
Speaker 1:Marry into royalty.
Speaker 3:Yes.
Speaker 1:Hot tip. That that tends to help to no end or ensure you get Netflix to pay you a vast sum to show off an immense property complete with a vegetable garden beehives and chickens to lay fresh eggs. That helps too. This new eight episode Netflix show released on March 4 is more or less Martha Stewart for the 0.01%, but aimed at the other 99.99%. In it, she offers independent indispensable tips such as how to make candles with your own beeswax or how to boil noodles with tomatoes.
Speaker 1:Apparently, first, you put the noodles in a pan, then you put in water, then you take off the lid, then the water will evaporate, then they are done. At last, everyone had been wondering. Destroyed. Destroyed. Like, it's just this is such good.
Speaker 1:Right? I love I love it so much. It's it's just it's just so funny. Anyway, it's it's a lot of fun. Go read the argument.
Speaker 1:To a
Speaker 3:lot of fans over the last No.
Speaker 1:Decade. Miss Markle says that she is not in the pursuit of perfection, but in the pursuit of joy. This is charming, if not precisely the wording that some inside the palace use. Their descriptions of her tend to go a little heavier on words like abrasive, bullying, difficult, and rude. But then, perhaps those palace workers did not step to did not stop to smell and smile at the hydrangeas.
Speaker 1:That's so funny.
Speaker 2:They
Speaker 1:just went to
Speaker 6:the barn.
Speaker 3:We're not far from Yeah. Montecito. We'll come up.
Speaker 1:We'll come up. We will stay on
Speaker 3:the barn. How we drink, Dom. Yeah. Proper etiquette if you're celebrating a podcast milestone.
Speaker 1:Yes. She had a podcast Yeah. On Spotify. Big deal. And I heard through the grapevine that her one request was that there was quote, unquote, no homework.
Speaker 1:No way. No. Yeah.
Speaker 3:Yeah. She just wanted to show up and do it.
Speaker 1:I mean, this is unsubstantiated rumor, but, the rumor was that at a at a certain point, she wasn't David Sondra will will love this. We gotta send this clip to him. She wasn't even doing the interviews. So, imagine it's like we're gonna have someone on. We're gonna have, like a, like an assistant ask them the questions, record their answers, and then I will come in once a month and record all the questions.
Speaker 1:So I come in and I say, Barack Obama, what was it like being president? Tony Blair, what was it like being prime minister? And then I go and say, co, you know, like, you know, whoever else, like, is is on this week. You know, Martha Stewart, what's your favorite recipe? I come in, I record those lines, and then they cut it together with the answers where that person got interviewed by someone else.
Speaker 3:Insane.
Speaker 1:It's like the lowest effort podcasting, and that's why he's no longer a podcaster.
Speaker 3:That's crazy.
Speaker 1:David Centro rolling over, just ripping his hair out, thinking about the the lowest effort podcasting you possibly do. Brutal. Anyway, the one my my main takeaway from the show is that Montecito is beautiful. We should spend more time there, and there's no better way to do that then on wander.
Speaker 3:That's right.
Speaker 1:Find your happy place. Find your happy place. Go to wander.com. Book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning, and twenty four seven concierge service. It's a vacation home, but better.
Speaker 1:Jordy, do you have a code for folks at home?
Speaker 3:I got a code for us. It's wander.com/tbpn. You can use the code t b p n to get a discount if you're booking a trip. And just by creating an account, you can, get, entered into a giveaway that they're just doing for t b p n listeners.
Speaker 1:Circle.
Speaker 3:So you're only competing with other brothers, which is kind of a win win situation. So either you win a free trip or another one of your brothers wins, so there's zero downside.
Speaker 1:Fantastic.
Speaker 3:Enter now and, you know, take a take a crack at it.
Speaker 1:I love it. Let's, let's do some timeline. We have ten minutes until our first guest. And I wanna kick off with a post from Bezel. We're going back to back with the advertisements today, but this is a great post.
Speaker 1:Sold and authenticated by Bezel, all long as Sone long one time zone reference one three six zero two nine. Two time zones, day night indicators, zero guesswork. If you're crossing continents, this Longa ensures you never call the wrong person at 3AM. Beautiful watch. Flip it over and things intensify.
Speaker 1:It's manually wound l one four one dot one movement is pure German engineering flex. Visible through a sapphire case back, hand engraved balanced cock, seventy two out hour power reserve.
Speaker 3:You hesitate to take off you hesitate there slightly because that sounds vulgar, but it's just No. That's just watch terminology.
Speaker 1:Seventy two hour power reserve and enough finishing to make any wash nerd emotional, fancy along of your own good taste. Better news, we've got more. Hit the link in bio to shop Bezel's full selection.
Speaker 3:This is screaming Zuck to me. I think you might have snapped this up. You might have. Yeah. Obviously, they they have a lot of private, you know, clients.
Speaker 3:They can't, you know, share. Yeah. But, this seems like up his alley.
Speaker 1:Anyway, go to bezel, go to getbezel.com. Shop over 23,500 luxury watches fully authenticated in house by Bezel's team of experts. Download the app, scroll, and have fun. Should we move on to Lulu?
Speaker 3:I just gotta say when we when we do our bezel partnership video
Speaker 1:Multiple watches.
Speaker 3:We need a shot of both of us
Speaker 2:Oh, the watches.
Speaker 3:Just wearing watches all the way up to the shoulders.
Speaker 1:Yeah. Yeah. We we gotta get the the graph diamond hallucination. Yeah. Get get rid of those going.
Speaker 1:Couple of Patacs.
Speaker 3:Yeah. How much would it cost to just get a graph diamonds hallucination for Depends on what the market's doing.
Speaker 1:You buy it, and then you sell it at a higher price. You made me
Speaker 3:That's smart. Yeah. Look at you. Possible. Course coming soon.
Speaker 1:Course coming soon.
Speaker 3:Coupon's code.
Speaker 1:Anyway, Lulu, Meservi posts just went to the DMV. They've replaced the take a number, take a dispenser with a person at a booth, and you get a ticket, you have to line and to get a ticket, you have to line up. And when it's your turn, ask the person to give you a ticket. This is so funny.
Speaker 3:They are mogging mogging computers and artificial artificial intelligence, you know?
Speaker 1:I mean, when when Midjourney came out and everyone was like, oh, this is gonna destroy artists, I was like, there's still courtroom illustrators who, like, draw pictures of, like, SBF sitting there and, like, we have cameras. They could just take a photo. Yeah. And yet, like, somehow that job, like, did not get destroyed by technology. And so there are plenty of jobs that are
Speaker 3:super resistant. I didn't I didn't understand third party DMV services until I was probably 22. Mhmm.
Speaker 1:Break those down.
Speaker 3:Well, pretty much, there's only a handful of things that you need to to actually go to the DMV for. Yeah. And then the vast majority of them, you can pay a third party DMV fifty dollars to do it Yeah. With just over text, and they just send it to you.
Speaker 1:It's great.
Speaker 3:I bought a car recently, and the title, like, you know, got registered under my name, but then the title, never got sent to me. Mhmm. And, I just texted my DMV person, and they're like, oh, yeah. Just, like, send me a hundred bucks, and it'll be there in, like, two weeks.
Speaker 1:That's great.
Speaker 3:And I don't have to touch it at all. So huge alpha. My dad was a very, practical, is a very practical pragmatic guy. He he goes and sits in the line, but he's retired now. Yeah.
Speaker 3:So, I
Speaker 1:always think of the DMV as a good example of, Gell Mann amnesia, which we talked about in the last thing is, like, is very, very ridiculous over the top, like, mental model. But, Gell Mann amnesia, I I I like it because the the whole thesis is like, once you realize that one thing is incorrect, like you're reading you're reading an article in a in a Yeah. Like you're listening to this show and you hear us talking about your your point of expertise and you realize we don't know what we're talking about. And then you assume that we don't know our what we're talking about about anything.
Speaker 2:And you're probably right.
Speaker 1:The DMV is a great insight into, like, how the government works in the sense that, like, everyone's like, oh, man. The DMV is so bad and so inefficient. But I'm sure the NIH is fine, or or I'm sure the DOD works great. I'm sure the, you know, the other arms of the government are fantastic. And it's like, no.
Speaker 1:Actually, like, the DMV is par for the course. Like, what your experience with the DMV is the exact same experience you'll have doing business with the FDA, doing business with the DOD, doing business with, like, any any arm of the government. It's kind of all the same. Yeah. But it but the DMV is the one that, you know, the average citizen interfaces with the most.
Speaker 1:Yep. And so yeah. Anyway, big news. Robinson helicopter company has released a new helicopter.
Speaker 3:We've been waiting for this.
Speaker 1:They haven't released a new helicopter for a very long time. The r 88 reveal trailer is now available to watch on YouTube. Go check it out.
Speaker 3:Very cool video.
Speaker 1:Can we
Speaker 3:pull it up?
Speaker 1:We wanted flying cars. We got new helicopters from Robinson Helicopter Company.
Speaker 3:We wanted flying cars. We already had helicopters.
Speaker 1:I mean, really
Speaker 3:skill issue.
Speaker 1:Why don't we just put wheels on the helicopters? Yeah. Because it seems pretty Yes. You.
Speaker 3:Yeah. With little electric motors in each wheel?
Speaker 1:Yeah. Be fine.
Speaker 3:Probably get up to, like, thirty, forty.
Speaker 1:I I really Hey. Check it out. If you yeah. Can can you play this? Yeah.
Speaker 1:One sec. Let's see. Yeah. I mean, I really feel like, the whole flying car thing, a lot of those a lot of those companies, like, we were talking about Kitty Hawk, the Google founders had trouble. They couldn't get through all the regulatory.
Speaker 1:It'd be very interesting to see someone try and take, like, a much more iterative iterative approach and just take a helicopter, modify it, and do just the minimum. I mean, this is what we saw with the sea glider thing where you gotta find the regulatory hack. Anyway, Aussie hexes. Nice machine.
Speaker 3:Nice machine.
Speaker 1:53 views just showing up. I mean, the Robinson helicopter company, they have a check mark, so they are verified on x, but they still posted a link, got 3,000 views. Fortunately, we're featuring it here. We'll try and get you some amplification. And, yeah.
Speaker 1:Send us more footage, Robinson. We'll check it out. We'll review it on the show.
Speaker 3:Yeah. We gotta give them a master class in the vibe reel.
Speaker 1:Yes. Exactly.
Speaker 2:This should
Speaker 1:have been this should have been native. He should have posted native. Could could have had a banger.
Speaker 3:Could have had a banger.
Speaker 2:Could have
Speaker 1:gone viral. I don't know. I don't know how we're doing on this, but let's see who we got. Okay. We got a bunch of stuff here.
Speaker 1:Let's move on to, Jack Raines.
Speaker 3:Let's do it.
Speaker 1:Jack reigns went on the ad quick podcast. We love ad quick. We love ad.
Speaker 3:Let's go.
Speaker 1:Very funny. He was previously joking that only fans is the best way to get your message out, but now he's advocating for LinkedIn. He says with revenues higher than Pinterest, Reddit, and Snapchat combined, LinkedIn is still ultimately number one for cringe.
Speaker 3:Number one. Number one for
Speaker 1:cringe. We've
Speaker 3:been getting active on LinkedIn.
Speaker 1:We are. Go follow us.
Speaker 3:If you go to tvpn.com, you can follow our LinkedIn account.
Speaker 2:Yeah.
Speaker 3:And, we're starting to share. We're we're we're we're staying true to our x roots by posting the LinkedIn content, like, two weeks later.
Speaker 2:Yep.
Speaker 3:You know, standing, you know, honoring x, you know, being where, you know, know, the everything app where where the most important conversations happen. But LinkedIn, you know, you can it's it's more like a greatest hits.
Speaker 1:I don't wanna, like, I don't wanna pat ourselves on the back too much, but, we do that often, and it's actually part of the brand. So, but but but I I I do I do like the strategy of of just posting interview clips on our LinkedIn. It feels like the least cringe thing to do. Like, we tried to take I tried to take one of my, like, like, sound bites from the show and turn it into text and put it on LinkedIn and be, like, serious. And, like, it's just, like, didn't feel right to me for some reason.
Speaker 3:Yeah. And I remember when we did our first launch video Yeah. The thing LinkedIn doesn't understand is is humor and satire. So we did our first launch video, and people's reaction when they would talk to me about it is they're, like, super cool video, dude. Like, looked very serious.
Speaker 2:Yeah. Yeah. Yeah. Yeah. Yeah.
Speaker 3:It's like,
Speaker 1:everyone on X got it.
Speaker 3:Everyone on X got it. Yeah. Yeah. It was ironic. God.
Speaker 1:Anyway, let's let's get away from the irony, get away from the jokes. We have to talk about this story. This has been shaking up tech. Lamborghini just announced a 5,000 baby stroller. This is huge for the pronatalist crowd.
Speaker 1:Huge for the
Speaker 3:Yeah. This was a lot of people's final excuse. They they were like, you know, I wanna have children. Exactly. I've been planning for this for a while, but all of the strollers are so cringe.
Speaker 3:Exactly. The babies are surprisingly heavy. It's like carrying around. Once they, you know, get a few months old, it's, like, carrying around a 25 pound dumbbell Yep. You know, everywhere, but, you know, it's it's not even as easy to carry as a dumbbell.
Speaker 1:I mean, I gotta say, like, Lamborghini really did not bring their design aesthetic to this at all.
Speaker 3:It's super disappointing.
Speaker 1:It just looks like a normal stroller to
Speaker 3:me. The only thing is maybe it's it's it feels super, like, something I don't like about strollers is because they're made of a lot of plastic. Yeah. Yeah. They don't feel always This looks like there's
Speaker 1:some metal in there. I see some shine on there.
Speaker 3:If they have carbon fiber accents
Speaker 1:It needs carbon fiber.
Speaker 3:I would even I would even, like, imagine if they had the the rear view mirrors on it.
Speaker 1:That'd be cool. Yeah.
Speaker 2:I think
Speaker 3:that could be cool too.
Speaker 1:Yeah. Yeah. Yeah. But I'm thinking, like, sharp angles. I'm thinking, like
Speaker 2:Yeah.
Speaker 1:You know, Reventon.
Speaker 3:Like, the
Speaker 1:one where they take the Aventador and they make it even crazier, like, even more aggressive.
Speaker 3:Yeah. Yeah. So I'm gonna give this a four out of 10.
Speaker 1:Four out of 10. Okay. Well, it is $12.45. We should have our first call in. Ben, make sure we have pulled up the, the zoom and see if we can have our guests join us.
Speaker 1:How we do it.
Speaker 3:Hey, can you guys
Speaker 2:hear me?
Speaker 1:I can hear you.
Speaker 7:Awesome.
Speaker 1:How you doing?
Speaker 2:I have
Speaker 7:a video on too, but
Speaker 1:Fantastic. Yeah. We can see you.
Speaker 2:I can hear you.
Speaker 1:No. This is great.
Speaker 7:Me too.
Speaker 1:Yeah. We can see you. Cool. So, Ken and Davison is here, from Icon. Big announcement today.
Speaker 1:Can you break it down for us? What are you announcing? And give us a little backstory on your product, what you're building, how it's going, just Yeah. From the top.
Speaker 7:Sounds good. Yeah. So we we just announced the second round from Founders Fund. I'm the founder of Icon. And, basically, what we're doing is we're helping brands make, much much better ads with, this thing we're calling the the AI ad maker.
Speaker 7:And high level, what we do is we we take someone's, like, big content library
Speaker 2:Yeah.
Speaker 7:And then we turn it into hundreds of ads.
Speaker 1:Cool. Do you have any good, like, case studies or examples from companies that
Speaker 3:are using it? Wasn't Ridge? Sean Frank was on the show less than two weeks ago, and I think he was one of your guys' super early partners.
Speaker 7:Yeah. Yeah. We we built a lot of, icon with with Sean and then, Ron and Avi and a lot of other folks in the community. Basically, what we're doing is we're tackling, like, nine different problems at once. So we help with script writing.
Speaker 7:In that script writing, we're we're helping you, like, target a specific audience.
Speaker 1:Sure.
Speaker 7:And then once you have that script, we're we're taking your library and then matching it with that script so you don't have to do that by hand. On top of that, we also do analytics. We help you, like, keep an eye on competitors. Like, we help you even, like, launch ads on on many different channels. There's there's all these pieces of ad making puzzle that we're we're taking on, and it's very manual today.
Speaker 7:So we're we're solving that.
Speaker 3:Do you like competitive markets? Previously, you started Skio. Subscription management with an ecom is deeply competitive. I'm actually a cofounder of this company, Aurora. And, Rora was running on some other subscription management platform, but I actually messaged the CEO just before this, Brian Keller, and he said, we're switching over.
Speaker 3:Skio is just a far superior platform than the others.
Speaker 1:That's good.
Speaker 3:So great great review for Skia. But my my big question is is you clearly love competition because to go into subscription management, dominate, and then and then come in and do icon, which is a very obvious idea, and many people are, you know, trying to tackle it, but it's very difficult to do well. Is competition something that you're sort of seeking out in some way because you just know you can do it better?
Speaker 7:Yeah. Definitely. I as you said, Skio was a really competitive space. There's there's at least 10 subscription apps. And, yeah, we we tackled it with one, like, a really, like, engineering first culture, but two, also just, like, a really, like, playful personality.
Speaker 7:I think we we really, like, try to be real, with our customer, rather than corporate. And I think that resonates really well with the community. And, we're we're bringing a similar approach to to Tycon. We we're working seven days a week. We're really, like, pouring our heart into this, and I think it resonates really well with, with the type of customer we're going for.
Speaker 1:Can, can you break down, in terms of where AI lives within the the ad stack? There's so many places from generate a script, generate an AI voice over, generate a deep fake of a UGC customer or even the CEO or something like that, to AI assembly and picking which clips go where. A lot of these could be done, programmatically or deterministically. A A lot of them could be done with AI approaches. What do you see working well?
Speaker 1:Where's the highest leverage point to inject AI?
Speaker 7:Yeah. So I think a really common mistake is is thinking AI is just gonna generate that, and then you're not gonna have to do anything at all.
Speaker 3:Really, the way I see
Speaker 7:us is, basically cursor for ads where Mhmm. We're trying to, like, take the editor, the creative strategist, anyone involved in the ad making process and just make them a lot faster, like, remove the work they don't wanna do. Right? So, with the script writing previously, right, I'm I'm sure everyone knows this, but, you can you can get some writer's block when you're trying to, like, pump out a hundred ads a week. Right?
Speaker 7:So, one of the things we're doing is we're looking at your previously run ads where we're looking at trending, like, concepts on the Internet, and then we're, like, doing all of that behind the scenes and helping you steer that. Like, you're able to write in first or third person. You're able to, like, say don't talk don't make a medical claim or something. Like, really, it's up to the user, and as a result, you're just a lot quicker.
Speaker 1:Is there some sort of concept of, like, temperature? I remember in, like, the early GPTs, like, you could kinda turn up the temperature, get a little bit crazier. Because I feel like I could I could immediately imagine any of the LLMs kind of just, like, re paraphrasing the same value prop again and again and again, but maybe some of the value is actually, hey. Let's let's think of new ideas that then we can test and
Speaker 2:Right.
Speaker 1:And and that's where, like, the real alpha is gonna come. Hey. We never thought to make this type of claim. It's not a medical claim. We didn't cross any lines, but we did we never really knew that that was what the customer wanted.
Speaker 1:Do you have some sort of a way to dial it in?
Speaker 7:Yeah. Yeah. So it you're able to use our thing called, add GBT, very similar to chat GBT, but but for ads. And, the key thing with it is you can really, like, just steer it in the direction you wanna go. There are people who want, like, 100 permutations of their winning ad.
Speaker 7:That's a really common use case. We also have people who wanna, like, just, like, do a hundred different concepts at once. Right? So it's really, like, pick your own adventure sort of thing, and we we just help you do that a lot quicker.
Speaker 1:Got it. Rudy?
Speaker 3:I have a question. So for the last five years, the meta on the meta ads platform has just been meta is really good at, like, finding you the right customers, so you should focus on creative. That's part of the opportunity that you have with icon. Is there a world do you do you imagine a future where Meta tries to almost, like, move up the stack and and get into the area that you're in? Obviously, you're no you're you're not afraid of of competition.
Speaker 3:But, you know, how do you how do you think about sort of meta getting into this game?
Speaker 7:Yeah. Yeah. There's definitely some stuff that's more, in the pocket, but, what I can say here is that we're we're gonna be, like, platform agnostic. Right? So, you, you can run ads on meta.
Speaker 7:You can run, run ads on TikTok. Like, like imagine 10 different platforms, right? Like, I don't think meta is gonna like, want you to like run a TikTok ad or, or different platforms that, of course we can't rule that out. Right. But they're, like, five of those, like, misalignments, I'd say, for Meta to to be doing something like this.
Speaker 7:And they'll therefore have to keep in the pocket, but, pretty excited, to partner with them and, yeah, just see where this goes.
Speaker 3:Awesome. Well, you have to come back on when you can share on that. I Yeah.
Speaker 1:I yeah. I I I've I mean, any anytime I have an AI founder on, I have just a bunch of questions, like, you know, what's hot? What's trending? Like, MCP? Does that mean anything?
Speaker 1:Is that legit and real? What other, like, what other kind of, like, foundational developments are you watching for? The the the give me a deep seek take. Give me a scaling take. Give me whatever you got.
Speaker 7:Yeah. I wanted to bring this up in a few of our other trends of thoughts earlier. One of the things that we're really, like, approaching this with is, like, we wanna, like, pick the best, like, like, model for the the problem. Right? So one of the things we do is, like, UGC like, UGC lip syncing.
Speaker 7:Right?
Speaker 3:Sure.
Speaker 2:I'll be
Speaker 7:really candid. It's not quite there yet, in terms of replacing, like, normal UGC. That's why we're taking existing content and repurposing it. Sure. But we've definitely got our eyes on it.
Speaker 7:I'd say, Hey, John, Tavis. There's, like, 10 players in this space, and we're just gonna, like, partner with the best one. And we we use a combination of them today already. So Mhmm. That that's kind of the way to, like, think about icon.
Speaker 7:We're we're taking, like, the best voice vendor. We're taking the best, like, video, like, UGC vendor, the best, like, writing. Right? Like, we're we're using a lot of, like, clogged underneath, but, like, with, like, a lot of code on top. Right?
Speaker 7:So Sure.
Speaker 2:Yeah.
Speaker 3:It's really picking up. Yeah. How do you think about, you know, cost, reduction at, at kind of the InfraSlayer? You
Speaker 7:Yeah.
Speaker 3:You said you've gone from 0 to 5,000,000 in ARR in thirty days. You're extremely profitable. Yeah. It sounds like, you know, costs aren't a big issue at the moment. You know, you guys are running pretty efficiently, but, presumably, it will only get better.
Speaker 3:So it sounds like you're in a good spot.
Speaker 7:Yeah. Yeah. I think another thing, that's that's really fun about this is there's a lot of people in this space that are are, basically, like, operating on, like, 90% margin. They're they're really charging a lot for what they're doing. And part of the reason we're we're being so disruptive here is we're charging, like, 10% of what they're charging.
Speaker 7:Right? And I wanna, like, pass the savings to, the customers as the the costs get better underneath. Right? I think companies either gonna have to, like, adapt with their pricing or they're gonna die.
Speaker 3:That makes sense. What what's the actual you you're going for the record, to beat every company ever on the one to a hundred million ARR record, which is less than twelve months. Do you know the actual day? Are you just are you just gonna do it in twelve months?
Speaker 7:Twelve or I I'd like to hit it in in nine months, like, not leave it too close, but I will have to see.
Speaker 3:Is there a scenario where at the last on the last day, you have to bump prices, like, 30% just to hit the mark?
Speaker 2:Or are
Speaker 3:you Yeah. Or you think there's enough customers out there at the the current pricing that that you can get in front of? Because I feel like ecommerce is very, the top ecommerce founders and CMOs are all talking to each other. There's almost like, you know, Sean Frank and and Connor McDonnell have their podcast. I think I think, like, you know, probably, an important acquisition channel for you guys.
Speaker 3:But, yeah, you seem pretty confident. We we'd love to, you know, do a check-in call in maybe six months, you know, and see where we're at.
Speaker 1:Throw the gauntlet down. I wanna see that. I was
Speaker 3:gonna say, well, I'm gonna
Speaker 1:let's do it.
Speaker 7:Yeah. Part of the reason I'm doing this is it really, like, pressures me and the the team in a good way, I think. Like, I I don't wanna, like, let everyone down. So keeps me working pretty hard. But, yeah, if you think about it, right, like, we we've got a business plan that's a thousand a month.
Speaker 7:It's only 8,300 customers we need to get to a hundred million. Right? And, like, that keeping the numbers a bit more private, but we're more than a thousand already. So I yeah, we'll see. Six to nine months from now.
Speaker 1:Yeah. 8,300 customers. These are businesses. I mean, Meta has what, like, a million businesses probably advertising at a significant level. Yeah.
Speaker 1:It's it's not insane insane penetration to get there. So good luck. I I love that. That's amazing. Well, we'll let you get to your next meeting.
Speaker 1:I know you gotta jump, but thanks so much for calling in. Please let me know when you have, news or announcements next, and we'll bring you back on.
Speaker 3:Yeah. Congrats on the progress. In the new round. Thank you. Glad to see you guys.
Speaker 1:Talk to you soon. Bye. Cheers.
Speaker 7:Talk soon. Bye bye.
Speaker 1:Cool. Should we move on with more timeline, Jordy?
Speaker 3:Let's do it. Let's run through a couple.
Speaker 1:Well, Elad Gil has reported that Dropbox has converted from Delaware to a Nevada corporation. Lots of people talking about the risks of being in Delaware. Interestingly, I I don't know exactly what triggered this. We should get the Drew Houston, the Dropbox founder on to talk about, like, how he's thinking about his business because Dropbox was one of those companies came out of YC, I believe. Yeah.
Speaker 1:YC company. Got to Unicorn, almost Decacorn status, was super legit, goes public, really big, but then just kind of stays flat.
Speaker 3:Hired 300,000 people. Right?
Speaker 1:No. That's DocuSign. That's a different company.
Speaker 4:For
Speaker 3:they they they they the the name, Yeah.
Speaker 1:Yeah. Wait. Wait. Did you really confuse it?
Speaker 6:Yeah.
Speaker 2:Yeah. No. No. No.
Speaker 1:No. No. I always DocuSign
Speaker 3:and Dropbox. No. No.
Speaker 1:No. No. It's Dropbox. I mean, Dropbox is, like, fascinating engineering culture. They hired Guido Van Rossum for a while.
Speaker 1:Do you know who Guido Van Rossum is? Great. Creator of the Python programming language.
Speaker 3:Clear, Dropbox still has, I think, more employees than x.
Speaker 1:Really? Yeah. I mean, they were they were one of the hottest startups then have been kind of a a what what do they call it? Like, a store value type company. Or, you know, if you bought you bought a thousand dollars at Dropbox five years ago, it's still a thousand dollars today or something.
Speaker 1:The stocks been kinda flat. But Yeah. But I mean, it's a it's a it's a it's a fascinating founder story of, you know, building a multibillion dollar company, and not many people can say that they've done it. So I was wrong.
Speaker 3:I was wrong. X has 2,800 employees.
Speaker 2:Okay.
Speaker 1:How many jobs are you?
Speaker 3:Block Dropbox has 2,200.
Speaker 1:Okay.
Speaker 3:They've been, getting
Speaker 1:Twenty two twenty two hundred. And what does DocuSign have? Because Dropbox acquired HelloSign, which is a DocuSign competitor.
Speaker 3:Has 6,000.
Speaker 1:Six thousand. Let's go.
Speaker 3:Hit the size gong
Speaker 1:for that. Headcount. DocuSign. Headcount's still cool. A lot
Speaker 3:of people says, hey, you shouldn't you shouldn't celebrate headcount.
Speaker 2:Yeah. You
Speaker 3:know, it's not a real metric.
Speaker 1:I'm a job creator.
Speaker 3:Yeah. I'm a job creator. Job creation.
Speaker 1:DocuSign is gonna get the craziest, corrupt bargain from Trump. Be like, well, you're employing half of America. Like, what do you want? DocuSign is gonna decide whether or not there's tariffs or taxes. They're just gonna write the policy and it's gonna get ironed in because they're creating so many jobs.
Speaker 1:Every every
Speaker 3:politician will
Speaker 1:load up.
Speaker 3:Be a founder that comes out and and says, my entire mission is to create jobs. I if if we have point o 1%, you know, profit margins Yep. That and we can Higher more. You know, I will just keep, you know, dividing that point o 1% as many times as possible to just get each incremental employee. Anyway.
Speaker 1:Dropbox, fantastic story. You you know the story of their their viral growth too? They were very, very early at at being very intentional about distribution baked into the product. So, when you would sign up for Dropbox, they would give you, like, you know, one gig of space to store files in the cloud. But then if I referred you, you would get an extra gig of space, and I would get an extra gig of space.
Speaker 2:Right.
Speaker 1:And so it went That was smart. Super viral on college campuses. And and they really did a good job of that, like, that, like, you know, viral, viral marketing model that so many companies tried to copy in, like, after Dropbox was successful, but, it it gets harder and harder over time. But it makes a ton of sense. It's the same Gmail model that worked.
Speaker 1:Anyway, speaking of legendary, Silicon Valley startups changing, things around. Asana CEO Dustin Moskovitz is retiring.
Speaker 3:What did the stock do?
Speaker 1:And I mean, young guy. Down
Speaker 3:24%.
Speaker 1:Really? Oh, but I mean,
Speaker 3:it could be.
Speaker 1:It is like a crazy day in the market still.
Speaker 3:No. No. But that's It was very clearly
Speaker 1:Because of him?
Speaker 3:Because of him.
Speaker 1:It's tough. But, I mean, what an
Speaker 3:interesting run. CEO, you want your stock to stock to drop tremendously Yeah. When you announce your retirement because that is your market value.
Speaker 1:I wonder I I am. I wonder how much of his net worth was in Asana versus Facebook because he was a Facebook cofounder. And so you're looking at a trillion dollar company, even if you got 1%, you know, you're in the multi billions. I'm sure there's dilution in sales and stuff, but still it's like, they there's so many there's so many things where, you know, it's it's a it's a big big shoes to fill. Yeah.
Speaker 1:When you're on your second company and your first one's Facebook. But, I don't know. I used Asana for a while. Nice product. And, you know, Dustin, come on the show now that you're on retired.
Speaker 1:Let let's talk about what you wanna do with all that money now that you're retired. We'll get you we'll get you a nice watch on bezel. We'll get you an Eight Sleep.
Speaker 3:Yes. So Trey
Speaker 1:wander vacation everyone's on.
Speaker 3:In the chat. Yep. There were some Rolex leaks around their new 2025 models.
Speaker 1:Oh, I heard
Speaker 3:about this. And, they they're allegedly introducing a land dweller. Trey says it's a perfect watch for VCs.
Speaker 1:Really?
Speaker 3:Why? Yeah. Well, obviously, they
Speaker 2:just
Speaker 3:mostly dwell on land.
Speaker 2:Yeah. Yeah. Yeah.
Speaker 3:If you're enough of a size lord, you start to be more of a sky dweller. That's great. But, takes a little bit.
Speaker 1:Okay. Do we have our next call in for the this stream? I know we are going, we're supposed to be going live at 1PM. I I I don't like doxing the the guests too frequently. There
Speaker 2:he is.
Speaker 1:Here we go. Hey. Hey. My only
Speaker 5:good to see you guys.
Speaker 1:Welcome to the show.
Speaker 3:Yeah. Welcome to the show. Thank you. It's great to have you, Chrisman. I I don't know why I messaged you yesterday or was maybe the day before, but I was just like, dude, you gotta come on.
Speaker 3:John and I are dads. You're building products that, our children will ultimately use. I don't know if they're quite old enough yet, but, I've got a bunch of buddies that that are on synthesis, for their kids and have said great things. So I wanted to have you on.
Speaker 1:Let's start with just a high level intro, who you are, what your company does, set us up for the viewers, and then we'll just ask a bunch of questions.
Speaker 5:Yeah. Yeah. I think, by the way, it was, like, nine or 10PM, last night that you messaged me. So, yeah, definitely. Thanks thanks for the advance notice.
Speaker 5:Yeah. But, yeah, happy to come on. I was maybe, you know, in in a similar, position, to you guys. Like, five years ago, my oldest son was two. I went down to visit the, school at SpaceX that Elon had created, for his own kids.
Speaker 5:He hired a teacher, out of the fancy private school in LA and started his own school at SpaceX. And, the guy he hired, Josh Don, is, you know, became a friend of mine. And, we ended up starting a company together to kind of scale up the best, parts of that school. So we started during COVID. The initial product was, this this thing that really captured my imagination.
Speaker 5:I went to the school, which, you know, I was at a company education company called ClassDojo, which went from, you know, 0 to a billion dollars. I was a first employee there. And, you know, the the what they did at the SpaceX school looked a lot like what we were doing to build that company. The kids were just working together to solve problems in the form of games. And so we took that approach, put that on the Internet and signed up kids from all around the world, you know, kinda took off.
Speaker 5:So that was our initial product. And, now, you know, I we're we have built an AI math tutor that, I think is, is is taken off pretty well and I think is gonna be a major part of of every kid's education in the future. Yeah. Companies called Synthesis. And, yeah.
Speaker 5:It's where we are.
Speaker 3:Yeah. So right now you have the subscription. What what does Synthesis look like long term? Starting digital makes a lot of sense, but over time, is there, you know, desire to kind of almost verticalize and and go into the real world, or what does that look like?
Speaker 1:I I don't
Speaker 5:know about going into the real world. I think it's there've been some, you know, Silicon Valley startups that have been really well funded that tried to do the software piece and the real world piece at the same time. I think it's really hard to pull off both. Like, if you're going into the real world or schools, you're doing, like, a real estate play, essentially. Yeah.
Speaker 5:Yeah. And and, you know, I think when it comes to learning, you know, math, science, engineering, the fundamentals, these are this is information. And so information can be transmitted, through computers, in in a lot of ways, you know, better than than a human can do it. And so I think if we wanna reach a billion kids, then, you know, it it makes sense to go vertical but within, you know, software, like, things that can be delivered purely software. Never say never because it is attractive to, you the idea of, like, opening up physical in person schools.
Speaker 5:If we did something like that, we'd probably do something like an academy. Like the I always admire that the European soccer clubs, what they do is they'll have an academy attached to all their professional teams, and they'll bring kids in at, like, age six or eight. There's a guy who's a star now for Barcelona that they brought in at eight years old, and now he's, like, 18. And he's just he's amazing. I think if you really want, like, incredible performance, then you should do that kind of, like, focus on the elite.
Speaker 5:So we might do one of those in, like, every city
Speaker 1:We talked about it.
Speaker 5:The kids with the most, potential.
Speaker 3:Yeah. Talked about a teal fellowship for middle schoolers, you know, just to go, like, you just go further further downstream, get the middle like, the you you could basically be that guy of getting the middle schooler to, like, drop out of their, like, regular, you know, or elementary school and be, like, come to the synthesis, institution academy. Walk in. And, you'll be
Speaker 5:building something. Exactly, what if we if we do go in person, that's what we're gonna do. Okay. I think it's it's, that that'll just make a lot of people, upset. But I think it's actually the right thing to do.
Speaker 5:Like, I think you can identify kids who have, potential, like, engineering talent pretty early. And if you develop that, this is it's like this is what they do for sports. And so, like, if if we're looking at people who can actually advance civilization, you know, we should have something that's at least as serious as what we do for sports.
Speaker 3:Yeah. What is what is ten years from now, what is sort of k through 12 gonna look like? My my sort of personal experience with school, was interesting. I I started at Waldorf school. That was, like, my earliest memories of school.
Speaker 3:I think I benefited a lot from it, but they didn't really teach me to read until I was in the third grade, and I was, like, conscious enough to tell complain to my parents and be like, mom and dad, like, I wanna learn to read like the other kids. Like, you know, so I ended up going to a regular elementary school. And then by high school, my my father was actually a math teacher at my high school, and I hated high school so much that I, like, graduated early. So, like, my my and then and then my college, I was just, like, focused on startup stuff. So my I didn't feel like I had a great experience, with my education.
Speaker 3:How much better can it be and and sort of what's your broader vision? Obviously, synthesis can be a big part of, a child, and a kid's education, but, you know, what is the full stack look like in the future?
Speaker 5:Yeah. Yeah. That's funny. I I also had a bad experience with my education, and it's, you know, it's I I got, like, psyched into, you know, devoting the rest of my life to changing the whole system because I hated it, so much. So so so maybe similar to you in that regard.
Speaker 5:I I think the big problem is you start with this Originally, lead education is is with one on one tutors. And I I I don't know, but I don't think it was, like, eight hours a day plus homework with with one on one tutors. I think you can learn a lot more efficiently than that. Then you have, like, the one room schoolhouses, which again were, like, kids are, like, working on the farm, and then they come to the schoolhouse, you know, a couple hours a day, maybe a couple times a week, and that's it. And then all the parents go to work, and these the school day expands.
Speaker 5:And instead of just sticking to that, like, well, we'll teach a little bit, and then we'll kinda have fun for the rest of the day, they just expanded the teaching to making it somehow encompass all the hours from, like, eight to three, 8AM to 3PM and homework. And I think what we're gonna see I think AI tutors are gonna drive this. I think you could actually learn 20 to 30 x faster. I don't think there's gonna be a need for any homework. I think kids are just gonna use AI tutors to learn the fundamentals and hopefully, you know, a lot beyond that, what their interests are.
Speaker 5:My hope is the rest of the day is spent in ways that we can't imagine. Like, there's just like in your life, there's an infinite number of things you can do and ways you can spend your time. And the same is true of kids. So we should spend a little bit of time teaching them the fundamentals so that they can have good ideas and find what they're interested in. And then I I don't know what they should be doing.
Speaker 5:My my kids go to like a charter school two days a week where they they build bridges, they do school plays. They do all these kind of things that you're not gonna do with it's not just software and like it's not just reading. And so I'd love to see a lot more of that. Our goal is like be to partner with every in person school that does that. And, you know, hopefully, there's a lot of just local creativity, and and exploration.
Speaker 5:Right? Because kids have a tough job. You know, they have to figure out what they wanna do in life. And that that's it's a hard problem in the modern world. You it's hard to say, like, I just I wanna be a doctor.
Speaker 5:I wanna be, you know, something specific like that because careers get more and more creative. And so, I think it's important for kids to have that time to explore.
Speaker 1:Can you take me on a little tour of of where the government's doing things that are great for education of the next generation, where things could be improved, how charter schools fit into that, how public funding fits into that? Just kind of like, what's your world model for, you know, public private partnership in educating the next generation?
Speaker 5:There's some really exciting stuff going on now, which, I don't know because I had Ryan Delp from Primer on, but he he's done some work in, like, a kind of lobbying, governments in Florida for increased school choice, which is like so I think a lot of people don't know, in California, for example, it costs, like, $20,000 a year, to put a kid through the public school system, which is just, like, an extreme amount of money. And, that that's a little bit higher than the national average, but not by much. And so what a lot of states are trying to do is say, you can take that money with you and go choose a different school. And so that creates, like, the government, where there's usually, like, the local government collecting taxes, paying for the education, but then there's this fierce competition, right? Like somebody can open up a school right next door, bad schools can fail, bad teachers, bad principals can go out of business, and there's gonna be a lot more creativity in in that regard.
Speaker 5:I I think that's maybe one of the most exciting things that government can do because I think, you know, then then you would be as well served by education as people are served by, like, grocery stores. And they'll just be, you know, kinda wild, like, cutthroat competition and people trying to do interesting things to to attract students and and get results. So I think that's that's one place where the government can do something really great just by letting the you know, bringing this, like, kinda consumer mentality into what's typically been a government not monopoly. So schools could get you know, you'd be as well served as grocery stores as opposed to what it is now, which is like the DMV. Right?
Speaker 1:Sure. Yeah. Makes sense.
Speaker 3:Does all, k through 12 education over time start to look more and more, like a video game. Because, like, one one concern I have right now is that, kids, when they're out of school, they're doing Roblox, they're watching TikToks, and then you put them in a classroom or you give them homework that's sort of built around this sort of old style philosophy around learning, which is, like, you know, writing things down and and, you know, here's this, you know, textbook, and and we're gonna read a chapter out of it or things like that. To me, it seems like kind of an impossible uphill battle to try to get a kid to pay attention to that when outside of class or even on their phone in the classroom, they have this sort of consistent, really intense stimulation. So in order to compete, does education need to start looking more like what's on their phone in their sort of leisure time, or how do you think about that?
Speaker 5:I think those are I I I know this is, like, on people's minds. I think I think they're less related, than people think. I think, you know, TikTok and these things are addicting. But also school is just terrible. Like it was terrible when we were kids and we didn't have TikTok.
Speaker 5:Right? So I think I think regardless of what's going on in the rest of the world, you wanna make the tools for learning as effective and as engaging as possible. It's a really tight balance that you have to strike when you're building products. Like, for us, there's, you you know, there's things like Duolingo, which famously, you know, it's it's maybe really good at getting their early retention and engagement. But but, you know, hardly anybody knows someone who's learned a language, from Duolingo.
Speaker 5:So they kinda focus all the way on the engagement and gamification and and not so much on the effectiveness. And then, you know, you you can go the other way where it's like, well, theoretically, if if kids would spend a lot of time on this, they would learn, but they won't do it. And I think the right products is gonna be, you know, just just a balance, of of those kind of things. And I think if you get it right, you know, something a lot of people miss is kids, they wanna learn. When you really learn something, you you rock a new idea, it makes you more powerful and you can feel that.
Speaker 5:And I think it's especially true in math, but I think it's true in all subjects. If you want them to learn something, it's because you're trying to make them more powerful. I think what a lot of teachers do is say, well, this will become, you know, useful to get to the next level of school, and that's not terribly motivating. What we try to do is just show you these ideas make you a more powerful thinker in the moment, and I think kids are pretty motivated. They're pretty motivated by that.
Speaker 5:So yeah.
Speaker 3:Yeah. That makes sense. Last question I really have today, and would love to have you back on in the future, just as, you know, this sort of, industry, develops. But, we had talked before when the humane AI pin came out. I think everybody that was intelligent in the tech industry generally looked at it and said, this is not gonna replace my phone because it does a lot of the same things.
Speaker 3:It doesn't necessarily do them better. But our reaction at the time was that this is not gonna replace my phone, but maybe this is a solution that my kid would use where, like, I want, like, location tracking, and I want, you know, them to be able to easily call me, but I don't want them to be on a screen. Have you thought and and so as, like, all these AI pins sort of evolved, there was the rabbit, there was humane, there were some others. My immediate thought was maybe they're focused on the wrong user type. Maybe there's a market for this with kids who if you gave them something that they could ask any question in the world to and was sort of like this sort of companion, maybe that could be cool.
Speaker 3:Have you guys thought at all about sort of hardware experiences? I know you're very focused on delivering these sort of digital experiences, but is that, you know, ever been even a conversation?
Speaker 5:We we haven't talked about it at all. You know, like, my my kids have, like, the, it's not Apple Watch, but it's like a knockoff, like, watch brand that, like, tracks it a little yeah. They they can talk to you and that kind of stuff. And I I assume, you know, they'll be able to connect to the Internet and use the use AI for for questions and that kind of thing. I think, I I I think, like, for learning, screens are, like, extraordinarily powerful.
Speaker 5:Like, you can simulate almost anything on a screen. And, yeah, that that's, like, underrated. You know? I I I think people, like, don't realize how amazing that is. There's a lot of Luddites and who are, like, you know, there's just something about learning on paper, like reading a book on paper.
Speaker 5:And, like, I just don't agree with any of that at all. I just think it it's, like, information. The information, kinda flows. You know, you can you can kinda do anything on a screen. So yeah.
Speaker 5:You know, we we haven't, we we haven't talked about doing, doing any anything in in hardware yet. One one kinda crazy idea I have is because a lot of a lot of people do homeschooling now. A lot of, you know, they've become, you know, close with some people who are, you know, fairly prominent who who do homeschooling. And, I I like the idea for my kids as well of having, like, a booth with, like, a screen and and speakers and just something to, like, isolate the outside world where you've got the computer in it, and you're gonna go in there. You're gonna go in this booth, which seems kinda dystopian.
Speaker 1:It can't.
Speaker 5:It's just gonna be for, like,
Speaker 4:an hour and a half
Speaker 5:a day. Right? Yeah.
Speaker 3:Lock the door.
Speaker 5:Turn everything else. Yeah. Yeah. Yeah. Lock it.
Speaker 5:It should have, like, a time lock on it, of
Speaker 1:course. Yeah.
Speaker 5:Yeah. Yeah. You have to,
Speaker 3:like, complete the last thing. Focus to, get out get out.
Speaker 1:Well well, last last question for me. Let let me flip that around. I I I know a lot of parents are obviously, you know, they want their kids to be accelerated in in STEM and math, but, there is the other side of, like, socialization, and there's a big question, like, you know, Tyler Cowen's written about this, how maybe in the future, intelligence is too cheap to meet her. The real value is in connections being we we like to joke that we're we're we're trying to be golden retrievers, be very friendly, attractive, and dumb because intelligence is gonna be too cheap to meter. The AI can do the rocket science for me.
Speaker 1:But, you know, if if I'm a friend that you wanna hang out with and you wanna, you know, chop it up with, we're gonna have a great time. So I mean but I mean, seriously, as a as a parent, like, I think a lot of parents do even worry even more about their kids. Like like, hey. It's okay if you're falling behind in math just a little bit as long as you're getting socialized and and becoming, like, an upstanding member of society. And so do you see Sure.
Speaker 1:AI tutors or AI calibration being able to communicate with a child and understand, hey, they're being a little antisocial or something like that in a way that a teacher could or maybe just an augmented or or or an an additional layer there to to see, hey, this this kid is, you know, actually engaging at a very, you know, mature level, which is great. These are good signs we wanna continue this pattern of behavior.
Speaker 5:Yeah. I mean, that that's a great question. I think parents are correct to, worry more about social skills, especially from a young age. How how old are you guys' kids? Are they they're, like,
Speaker 1:quite young? Four, and then I've I've twin boys who are six months.
Speaker 5:Yeah. Oh, okay.
Speaker 1:Three
Speaker 3:and eight months. Yep.
Speaker 5:Okay. Cool. So, yeah, you're in that age now where, like, the social skills matter. I think up up to, like, age seven.
Speaker 1:Yeah.
Speaker 5:It's, like, close relationships with the the family and just try to spend as much time with them as you can.
Speaker 1:Makes sense.
Speaker 5:And be around and, like, reading faces. I actually think it's a mistake. We we don't, like, actively recruit customers below age seven, because if you think about how much processing it takes to, you know, learn how to operate in the social world and read faces, I think you just wanna leave kids' brains, like, open to basically spending all their resources doing that. Because if you get it, it's like speaking a language. You get that by, like, age, you know, four to seven, then then in some ways, you know, you're set for life because you're you're gonna be able to, like, fit in with groups.
Speaker 5:And I think that's that's extraordinarily important. We we kind of and when it comes to education, I I think it's I I I don't see that the AIs are gonna be able to do our thinking for us. I mean, that's, like, a totally different world. It doesn't look to me like we're on the path, to getting that. I think LMs are are really cool.
Speaker 5:I think you're gonna want your kids to be smart and knowledgeable and and able to think as an individual and also have those social skills to work with other people and and solve problems together, which is which is human humanity's way of superintelligence. Right? It's like being able to work together in groups. So this is actually mirrors the structure of the company. Now the AI tutor is like the leading edge of the product, but then we have some sense of teams where we put kids in teams, small groups to work together in solving problems.
Speaker 5:They're like video games, but they're not shooters or race games. They're like complex problems where you have to argue and decide what action you wanna take under conditions of uncertainty, figure out what you got wrong, and make the course corrections. And it's like meta problem solving skills. So it's I think if you you want, like, these, outgoing, like, you know, sociable engineers, people who can do both sides of their brain, I think we can do that. Right?
Speaker 5:I think, of course, people lean one way or the other, but I think we can get people up to, like, a really good standard on both of those, and then that's just gonna make us able to solve more problems and advance the civilization. So that's how I'd look at it if I was a parent anyway. Work on the social skills first and
Speaker 1:That's a fantastic, vision for the future. I'm very optimistic.
Speaker 3:I have one last last question. Miss Rachel on YouTube, very popular, little controversial. Do you have any under the radar creators on YouTube that just make, I my wife is very good about having, like, extremely limited just, like, TV, screen time. We don't do iPads in public or at home. Planes are are maybe the one condition.
Speaker 3:So if I'm taking
Speaker 6:Yes.
Speaker 3:My kids on a plane, is there is there a YouTube creator that you recommend, or you just, like, now put them on put them on, give them their AI tutor and, that's that?
Speaker 5:No. I mean, at at your kid's age, I think, the Daniel the Tiger, like, PBS series is
Speaker 3:is really good.
Speaker 2:Do you
Speaker 5:guys know that one?
Speaker 3:Alpha. I
Speaker 5:don't I don't know what you're getting.
Speaker 1:This is Alpha. Yeah.
Speaker 2:That's This
Speaker 1:is the real Alpha.
Speaker 5:That one's great. That it, like, teaches them little it's like I think it's like the, successor to mister Rogers. I think he's, like, made made by, like, the same people. So it's got, like, little lessons, and it's animated. It's okay for them to watch.
Speaker 5:Your kids watch Bluey?
Speaker 1:Oh, yeah. You ever seen Bluey? I love Bluey.
Speaker 5:Bluey is great. So that's what we would do when they were on planes and little kids like that. I would I've been I've been seeing I've got four of my own and just having seen the, I I think YouTube YouTube is quite bad, and it seems to push them into the YouTube shorts, which are just terrible. And especially even my, like, five year old recognizes, like, this is bad.
Speaker 1:Yeah. Yeah.
Speaker 5:I shouldn't be watching this. Yeah. What's that?
Speaker 3:Yeah. We're just not serious. The short
Speaker 1:form is, like, slop and, you know, you should avoid it at all cost no matter what age you are, basically.
Speaker 3:Except ours.
Speaker 1:Except ours. You should definitely watch clips of this because we will be clipping this interview and posting it out, and you should definitely watch these shorts because they're educational. But The
Speaker 5:clips on on on x are are great. Yeah.
Speaker 1:They're they're great. Some different. Yeah. But I'm sure if you swipe up on this on x, you're gonna get some really good
Speaker 5:stuff. Yeah.
Speaker 1:Anyway, this was an awesome interview. Thank you so much. We'll have to have you back for
Speaker 3:joining. This
Speaker 1:is fantastic. Yeah.
Speaker 3:Very helpful. Thanks. Thanks for
Speaker 5:having me. Appreciate it.
Speaker 1:Have a great rest of
Speaker 2:your day.
Speaker 1:We'll talk to you soon. Talk soon.
Speaker 7:Alright. Cheers, guys.
Speaker 1:That's hilarious. The, the how much screen time thing is a great question. I don't know if you saw Peter Thiel got in asked this at, like, Sun Valley.
Speaker 3:Really?
Speaker 1:Yeah. Because they were saying, oh, you're the you're the board member of, you know, Facebook. Like, how much Facebook do you think kids should use? So it's basically screen time. And he was, like, ninety minutes a week.
Speaker 1:And so I was just like, yeah. That seems like a good number to benchmark against. But then I was I was trying to think like, how can I be like
Speaker 3:Gotta get your 90, son?
Speaker 2:Yeah. No. No. No.
Speaker 3:Here's the iPad.
Speaker 2:No. No.
Speaker 3:Get your 90 in.
Speaker 2:No. No.
Speaker 3:Mister t mister teal.
Speaker 1:Yeah. Yeah. So so so get get your 90. Yeah. You gotta get those numbers up.
Speaker 1:But no. But then I wanted to make it like, you know, can I, can I make it even easier to keep that number lower? Cause you want to basically keep the number as low as possible. And I realized you just have to create a really brutal economy in your house. So we have a whole economy going now where you get stars for brushing your teeth, doing all these different things.
Speaker 3:Oh, yeah. And all
Speaker 1:of a sudden it turns
Speaker 3:something like
Speaker 1:right. The sticker economy is big. And so all of a sudden it turned from like, oh, yeah. Like, it's a Friday. I can watch this to, like, I am grinding for, like, weeks for, like, a movie night, which was, like, it was just free before, but he doesn't mind it that all of a sudden I've just created this, you know, Kafkaesque economy around it that he has to work, like, weeks to get, like, a single episode, a single, like, eight up eight minute episodes of blue.
Speaker 1:But but it's worked fantastically.
Speaker 3:This is the new economy.
Speaker 1:It feels the reward. It's fantastic. I highly recommend it. Create a really a really arcane economy in your household, for whatever your kids wanna do. It's great.
Speaker 1:Anyway, speaking of arcane Kafka esque economies, let's move over to venture capital. Wilma Nidus posts Paul Ferry, founder of May Matrix Partners. There's a little interview in this book. Question, do we have twenty minutes? What do we have?
Speaker 1:And he says,
Speaker 3:no. I'm done. I have to quit. But, again, if you wanna call me next week or continue on, we can do it by phone. Let me just finish the point.
Speaker 3:So why is this the best business? One, you can make a lot of money if you're in it for a long time. It's not a business that you can get rich next year or the following year or five years. It's changed a little bit with some of these these mangoes. Yeah.
Speaker 3:Solo GP funds.
Speaker 1:Secondary.
Speaker 3:It may be ten years or maybe fifteen years, but if you continue to be successful at it, it's amazingly rewarding. But more importantly, you're dealing with interesting people all the time. They're innovators that are people that are changing lifestyles in the world. You're dealing for the most part with people who have no net worth, and you're helpful to them in building net worth for themselves and net worth for their employees. And you can be in the venture business and be relevant for a very long period of time if you're good at it, more so than if you start a tech company.
Speaker 3:The people who started Stratus Soup Computer or Apollo Computer were relevant and important people in the eighties, but nobody knows who they are today. Whereas people that were in the venture business to be relevant for forty, thirty, thirty five years later, you're at the leading edge of product development or technology or capability. There's no other business like that. You're not collecting the receivables for the hundredth time. You're not laying off employees.
Speaker 3:You're dealing with interesting personalities. So it's the best business. Sorry we had to cut it short, but something came up and I have to attend this.
Speaker 1:I love it.
Speaker 3:Great, fantastic quote. The only the only the only pushback here that some GPs would give you is the, downside of having, you know, 20 to a hundred LPs who are your customers in many ways and can call you at any hour of the day, three hundred and sixty five days a year, to, you know
Speaker 1:Well, that's the most interesting thing is that, like, there's this bifurcation right now where a lot of funds are trying to do less LPs, higher GP commits. Yeah. And then simultaneously, there's the opposite which is, like, let's go public. Let's have any retailer Yeah. Retail investor be able to yell at us when the stock goes down because we had a miss.
Speaker 7:Yeah.
Speaker 1:But, you know
Speaker 2:Yeah.
Speaker 3:I've got a I've got a buddy who raised his first fund. It's $20,000,000 fund. Yeah. Hundred k is, like, the average check size. So that means there's people that are way less than that.
Speaker 3:Yeah. People that are way more than that. But you do the math. It's a lot of people.
Speaker 1:I wonder how I I mean, if if if General Catalyst and Andreessen Horowitz get out in the public markets, I wonder what the smallest fund to go public would be in, like, five years. You think someone would take, like, a hundred million dollar fund public?
Speaker 2:Yeah. Are
Speaker 3:there are there any?
Speaker 1:Just raise just raise a fund. Just SPAC it. Sell your entire GP stake. Deploy it all. Yeah.
Speaker 1:I mean, I don't know. Stranger things have happened. Who knows? Silly. Anyway There's not.
Speaker 1:Let's move on to Near Cyan, big friend of the show. They're hiring for a social media influencer marketing lead. This seems like a dream job. Seems really fun. We released v one of RN last week and the response has been amazing.
Speaker 1:If you'd like to lead our marketing team for the, for an app that has already been redefining the relationship between humanity and AI, please apply slash d m.
Speaker 3:Nier is super smart. I got early access to the app. I've used it, and, it's very cool. It's built on, built on Claude. No.
Speaker 3:But, NEAR is super opinionated and, the the little a little lore here, we talked about this before, but for anybody that doesn't know, NEAR developed some notoriety for creating an NVIDIA only fund.
Speaker 1:That's right.
Speaker 3:I think two years ago at this point, it turned out,
Speaker 2:Then you
Speaker 1:just can't sell it.
Speaker 3:Yeah. For ten years. Yeah.
Speaker 1:Ten years. So the ten year lockup.
Speaker 3:Point is that it's a ten year lockup.
Speaker 1:That's really fun.
Speaker 3:And I think that's a cool cool thing.
Speaker 1:So far advice,
Speaker 3:but so far, so good.
Speaker 1:And, yeah. I mean, we we've featured New Year's posts many times, a lot of bangers.
Speaker 3:Yeah. And this is just an underrated role in tech because there's the historical social media manager role
Speaker 1:Yep.
Speaker 3:That was, like, you have your little SaaS tools and, you know, your scheduling posts out weeks in advance. That's just not the way that social
Speaker 1:media works.
Speaker 3:Yeah. It's it's It's
Speaker 1:like it's like, can you make a crazy vibe reel? Can you post a banger? Can you be truly in the conversation? Get a bunch of fans. Be doing frontline customer support almost.
Speaker 1:Getting, you know, executive communication from the founders, get the founders posting more. Yeah. You know, it's just it's just three sixty now. Anyway, I wanted to move on to a little historical size gong, because I wanna have, Connor Zwick on the show from, from Speak. Do we have our guest in here?
Speaker 1:We do. Okay. We'll we'll we'll do this one after. Let's bring in Michael. He's here.
Speaker 1:I I I got so excited with the size gong. I was gonna I was gonna hit it, but I'll
Speaker 3:We can enter the size gong for Michael.
Speaker 1:Welcome to the show.
Speaker 3:Welcome, Michael. We're gonna have you up on Did
Speaker 2:I get the gong? I didn't hear you.
Speaker 6:Hit it a little harder. Hit the gong a
Speaker 1:little harder. Hit it a little harder.
Speaker 6:Alright. There we go. That works. Can you guys hear me right?
Speaker 1:Every time. Oh,
Speaker 3:we broke it.
Speaker 6:That was that's what I was going for. I was hoping we would break it.
Speaker 1:Welcome to the show.
Speaker 3:What's going on? You made it to Boston. He, Michael messaged me, like, maybe two hours ago and says I might, be in the air, but you made it. And you're at, where are you right now?
Speaker 6:So this is the Suno studio.
Speaker 1:Oh, cool. Very cool.
Speaker 6:This is where, I guess, they have, like, artists roll through and stuff when they're in town.
Speaker 1:Nice. Nice. Yeah.
Speaker 3:So Is Boston a major
Speaker 6:in this room.
Speaker 3:Is Boston a major music market, or is it more so they're bringing in musicians that are helping improve the models that they're making and the app in general?
Speaker 6:I I think it is a market. Right? It is a it is a major market, but it no. It's not like in LA or in New York. But this is where Suna was founded.
Speaker 6:Right?
Speaker 1:The
Speaker 6:founders came out of MIT, Harvard. There's still obviously, as you guys know, there's a lot of machine learning research going on in Boston and Cambridge. So that's where the company got started. But, you know, I think with the they had a really smart idea, which was when our artists start going through Boston, which, you know, most major artists do, they can use the studio. It's a place to
Speaker 3:That's cool. Okay. That makes sense.
Speaker 1:Can you introduce yourself to the studio?
Speaker 2:Yeah. Yeah. Yeah.
Speaker 1:And, give us some extra run. You're the man
Speaker 3:the man who needs no introduction.
Speaker 1:Yeah. Yeah.
Speaker 3:But but you may still
Speaker 6:do it.
Speaker 1:But you're not at that level yet.
Speaker 6:Of course. Of course. No. I mean, I I appreciate you guys bringing me out. Sorry.
Speaker 6:Am I introducing myself? How
Speaker 1:do you spell it? Yeah. Yeah. Yeah. Yeah.
Speaker 1:Yeah. Yeah. Yeah.
Speaker 2:Yeah. Yeah. Yeah. Yeah. Yeah.
Speaker 2:Yeah. Yeah. Yeah. Yeah. Yeah.
Speaker 2:Yeah. Yeah. Yeah. Yeah.
Speaker 1:Yeah. Introduce yourself. Tell us what you do now, and then I I have a bunch of questions about your career. We'll dive into it.
Speaker 6:What's up, everyone? My name is Michael Mcnano. I'm a partner at Lightspeed. I was the cofounder of Anchor podcasting platform. I'm just now owned by Spotify.
Speaker 6:I also recently cofounded a company called Oboe, which is, an AI educational platform.
Speaker 1:Awesome.
Speaker 6:Yeah. Big big fan of the pod. Happy to be, one of the early guests.
Speaker 1:Yeah. I'm a huge fan of Anchor. I we we I used it for some podcast test I did, like, must must have been right when it came out. And I just remember thinking like, man, this is this takes so much of a headache out of podcasting. Facts.
Speaker 1:You just, you can upload it on your phone. I I don't think what was the original vision, you wanted people to be producing and and producing podcasts on their phone and uploading. Because that was a button. You could just kinda hit record, and then boom, it goes out to the RSS feed. But it seemed like it almost became like a prosumer tool pretty quickly because the podcasting market, it's pretty bifurcated between, like, people start taking it seriously once they get any sort of traction.
Speaker 1:Right?
Speaker 6:Yeah. No. The the original vision for Anchor actually was not to be a podcast platform. It was it was very, very idealistic. We wanted to be a social media platform,
Speaker 2:like
Speaker 6:audio social media.
Speaker 1:Yep.
Speaker 6:Like, think Clubhouse, but a couple years earlier. Sure. And what we what we learned is that social audio is really, really freaking hard.
Speaker 1:Yep.
Speaker 6:You know, we we we took a crack at a certain format, take on it that we had, which did, like, fairly well. I mean, there was, like, you know, there were spikes of growth here and there, but overall, wasn't working. After a year, we, like, completely pivoted to another iteration of social audio. Yeah. Gave that a year.
Speaker 6:Didn't work. And then what we were hearing from all of our users is, hey, we just wanna use these tools to publish podcasts to Apple and Spotify.
Speaker 1:Yeah.
Speaker 6:And when we did that, it was just, like, instant PMF from that moment.
Speaker 1:So, yeah, take us through the story of the of the company. How big did you get? You raised money, I'm sure. Eventually, exit. I wanna hear that.
Speaker 1:Yeah.
Speaker 3:Yeah. And for for a little little bit of lore, when I was this was 2018, I just maybe I was still in college. I hit up Michael, and he did a call with me.
Speaker 1:No way.
Speaker 3:Didn't need to. Had no real re I mean, it was much more beneficial for me. I was do I was working in, you know, doing a bunch of podcast advertising stuff at the time, but, thank you thank you to Michael. You always remember the people that, like, give you, you know, thirty minutes of their day, or however long it takes. But, but, yeah, I would love to hear the the the story again.
Speaker 6:Yeah. I mean, so so so my cofounder and I, Nir Zickerman, we we built product at this company called Aviary. And this was around the time that, like, Instagram was taking off and people were realizing that you could take and edit photos on your phone and it could actually look good. Obviously, you know, now that's that's just a given, like, the camera is the phone. And, you know, we sold that that business to Adobe.
Speaker 6:And while we were there, we got really to podcasts. Yeah. And we we were sort of, like, sitting around asking ourselves, like, how come nobody has done for photos? How come nobody's done for podcast? What has just been done for photos?
Speaker 6:And so that was, like, the original idea, like and, of course, at this time, it was, like, 2016. Everything was a social network back then. Like, Snap was exploding. And we're like, oh, of course, this should be a social network. Right?
Speaker 2:Yeah. Yeah.
Speaker 1:We should have a feed. We should have
Speaker 6:a button right at the bottom of the app in the middle. And and and so that was the original vision. We raised a couple million bucks for folks like, Beta Works and SV Angel and ENIAC and all these all these guys. And, and, yeah, like I said, we, you know, we we we had to go through a couple of different pivots. We raised I think to answer your question, John, we ended up raising just under 15,000,000 total.
Speaker 1:Sure.
Speaker 6:We're about 25 people when we exited. We sold to Spotify in 2019.
Speaker 1:Did you actually have
Speaker 6:two acquisitions on the same day, Anchor and Gimlet.
Speaker 1:I remember that. Yeah. I remember that.
Speaker 3:Yeah. Which is, like, the cardinal sin of of launches is, like, if you have two Yeah. Very interesting launches, you should just do them, like, in space them out, like, you know, get the full benefit of each. But,
Speaker 1:I think I wait. I I mean, you could probably speak to it more than I can, but it seemed like Spotify really wanted to plant the flag and be like, we are in podcasting now. So not just one acquisition. We're taking this seriously. Wait.
Speaker 1:Quick question. Did you ever run into Archie Archibong at, Aviary? Yeah.
Speaker 6:Of course.
Speaker 1:I went to high school with him.
Speaker 6:I hope he's listening.
Speaker 1:Yeah. Yeah. I'll have to send him this clip. That's awesome. Yeah.
Speaker 1:Yeah. He was out in Japan a bunch. Yeah. Yeah. That's right.
Speaker 3:Good guy. Big in Japan.
Speaker 1:Huge in Japan, honestly.
Speaker 3:I wanted to ask you about, where you know, as somebody who sold your company to Spotify, worked there for a while, and then now you have a much more sort of, now you're a venture capitalist. I'm but but still, you know, I'm sure very opinionated on the Spotify product. How do you you know, where where do you think Spotify is going? You know, we we had talked about this a little bit offline. I'd said, and I'd even posted about this of Spotify and YouTube have sort of always been on a collision course long ultra long form became very important to YouTube, and then they became the biggest podcast platform.
Speaker 3:And in many ways, like, podcasts aren't just replacing radio, they're replacing TV.
Speaker 1:Yep.
Speaker 3:Right? Which is so it's super important to YouTube, and it it feels like a sort of critical battleground for Spotify, but I'd be curious to get kind of your point of view on the on the overall, battle between these, you know, tech tech giants. Right? Spotify feels like a small company, but it's a hundred and $40,000,000,000 market cap. It's a big business.
Speaker 3:Probably would be well beyond that if Apple Music, wasn't, you know, rammed down everybody's, throat. But, yeah, I'd love would love to get, like, a kind of general market perspective on on that.
Speaker 6:Yeah. So taking a step back, and I should caveat all this by saying that I haven't been at the company in, like, three years. So this is this is a pure outsider perspective. But, you know, I think the big thing that Spotify has always done well and they've always believed in is this notion of bundling. Right?
Speaker 6:Like, taking taking these products and these business lines that they have strengths in and then bundling them with other new new products on product lines and product, and business lines. And that's honestly why podcasts were so successful for Spotify. You know, if you think back back in the day when it was like Spotify head to head with Apple, Apple had two separate apps for these things. Right? They had music Yeah.
Speaker 6:And they had podcast, two separate apps. And that was a that was a total gift to Spotify. Yep. Because Spotify could take the podcasts and put them right next to the music so you never had to leave the experience. And And that's really what kick started the whole thing.
Speaker 6:It's like they had a built in audience of hundreds of millions of people that were one tab away from podcasts. And I think, you know, maybe to start getting to the the question you're asking, I think that's that's how they've probably thought about video as well. It's like, hey. We have people listening to music. Now we have them listening to podcasts.
Speaker 6:What if we bundle in video now? And that opens up a whole new market for us. So the obvious place for them to start was with podcasts. Right? Like, they have every podcast in the world already.
Speaker 6:Now let's get these people to add videos to these podcasts. But, you know, again, as an outsider, you have to imagine the next step is you start to see other types of video content on the platform. And even if they can start chipping away a few market share percentage points here and there, YouTube's catalog, that's a big deal for Spotify. So, I think
Speaker 2:it's I
Speaker 6:think it's a pretty smart move for them.
Speaker 1:How do you think about the relentless march of the algorithmically curated feeds, in the podcasting world? I think a lot of podcasters are super, super happy that they're in the RSS feeds, and they feel like it's almost as strong as having someone's email address. There's a very high open rate. If you have that RSS feed, your weekly show, you're dropping a weekly thing right at the top of their Apple Podcasts app. But and Spotify has a similar feel right now, but you could imagine them going to something that's more algorithmically generated, more variance in the in the total views.
Speaker 1:You see this on YouTube where, you know, mister beast can be can be reliable, but for most other creators, it's like a banger, and then a flop, and then a banger, and then a flop, and we all feel this on x when we post.
Speaker 3:You
Speaker 1:know, it's very high variance, but you can go really, really big because it's an algorithmic feed. You know, your your podcaster who's built on RSS pretty hard to all of a sudden have one episode go 10 x bigger, but the downside's very protected. Do you think my my question is basically, like, if I'm an RSS podcaster, and I'm thinking, hey, I wanna go to Spotify, this is a little dangerous because I could see them going more algo feed in the future, and then that introduces more volatility to my business. Maybe that's good, maybe that's bad. What's your read on that?
Speaker 6:Yeah. I mean, I think the RSS feed is a very, very controversial thing in in podcast land. You have the podcast purists
Speaker 1:Yep.
Speaker 6:That will live and dive by the RSS feed. I mean, they will fight you to the death if you tell them that RSS feed will go away. Yep. But but on the flip side, like, it has lots of limitations, the RSS feed. Like, it's there it's not like a two way channel.
Speaker 6:Right? It's, like, very limited in terms of the functionality it can ultimately provide. And, you know, I think there's probably no coincidence two biggest platforms now for podcast, Spotify, and YouTube are are not really RSS based anymore. Right? They're they're all doing things that layer on top of the format that have nothing to do with RSS.
Speaker 6:And so, again, I know, like, the RSS purists are, you know, probably wanna wanna murder me right now, but I I just don't I I don't know if the the format, is is viable long term as a solution. I think because like you said, you can you can get massive massive distribution on YouTube that you can't get through just like a plain old RSS feed.
Speaker 3:Totally. Yeah. The the two things as a creator now, the analytics on the RSS feed are just obviously a joke. Terrible. You basically get no analytics.
Speaker 3:Yeah. And then with Spotify is a lot better. But then the the distribution, which we're already seeing this with Spotify, you know, we're we're we're growing our audience just by nature of being on Spotify versus, like, that's not really happening on Apple. It's sort of us driving, other sort of top of funnel, growth. But, anyways, it's
Speaker 6:a classic setting time. It's a classic centralization versus decentralization argument. Right?
Speaker 3:Like Yeah.
Speaker 6:And in most cases, I I know people don't wanna hear this, but centralization often wins.
Speaker 1:Yep. Yep. What's your take on the the pivot to video for most podcasters? We saw a big one today, invest like the best now has video. No.
Speaker 1:I've been I started on video with YouTube, basically. I never really had a pure audio product. I think the first episode we did was video. We very much enjoy video. But, is there is there any hope for a creator that just wants to stay audio only for the future?
Speaker 6:I I don't think so because, again, we're talking about Spotify and YouTube being the predominant platforms right now, and we know that those algos, they need the video. They they crave the video. Crave the video.
Speaker 1:I think yeah.
Speaker 6:I think I think users got got got wise to this. Actually, it was during COVID.
Speaker 2:Yeah.
Speaker 1:People don't
Speaker 6:realize it was during COVID when before COVID, people were recording podcasts in studios, in booths. Right? Similar to how you guys are now.
Speaker 1:Yep.
Speaker 6:But they weren't video. Right? It was just like a microphone on a table. And then COVID, everyone went home and the the way that these shows kept going was through Zoom. In Riverside.
Speaker 1:So you get video for free.
Speaker 2:So all
Speaker 6:these podcasters got video for free, and they were like, oh, shit. If I upload this video to YouTube, I get all this distribution. Yeah. And now you you can't go back. The the the Algo craves craves the video.
Speaker 1:Craves the video. You see the AI guys.
Speaker 3:Talk to us about, I'm gonna butcher the name, O Oboe. I've only read Oboe. Oboe. So this is a company you you basically incubated. You're a cofounder, but, obviously, you're you're still a full time investor.
Speaker 3:Maybe talk about that dynamic and then what what you guys are working on.
Speaker 6:Yeah. Recently cofounded this new company with my former anchor cofounder Nir Sikerman. He's the CEO. He's, you know, he's running it full time. I am not full time on it.
Speaker 6:As you mentioned, I'm a full time partner at Lightspeed. Basically, the the the premise behind Oboe is very, very simple. We we, the humans, you guys, me, everyone, we have invested many, many billions of dollars over the past couple of years in making machines, very, very smart, right, through through AI. And we believe with Oboe that it's time for the machines to make humans smarter. And so this is a company the premise of AI making humans smarter.
Speaker 6:You guys have all heard a lot of the talk about, you know, a hyped up use case of ChatGPT has been, oh, that's gonna be a personalized tutor. It's gonna help people learn. ChatGPT is not really built for that. Yes. Yes.
Speaker 6:It's helpful for, like, one off tasks. Hey. Tell me about this thing. Tell me about this thing. But, John, it doesn't know everything you've ever learned, and it doesn't know what your interests are and it doesn't know what your goals are in, you know, maybe learning a new language or learning about, I don't know, some theory around finance or something.
Speaker 6:And so that's the basic premise of what what Oboe is solving. We have a a beta coming very soon. If people wanna be the first to check it out, just go to our, I guess, our x Oboe Labs at Oboe Labs. I'm very, very excited for it. And, yeah.
Speaker 6:I think I think people are gonna really like this product.
Speaker 2:Awesome.
Speaker 3:Yeah. And you, you dropped by the PMF or Die Cage to support the players recently, and they're working on a problem that's that's sort of adjacent. But but yeah. Maybe, you know, and and funny enough, we we just before this, we had the founder of Synthesis, which is an AI tutor. And so it feels like it feels like we're maybe I'm sure maybe people have already done it, but sort of a broader market map around, you know, AI and learning.
Speaker 3:Maybe
Speaker 2:they exist.
Speaker 1:In the app store moment where there's a bunch of we we need to build products around this stuff. We have the new technology, but, you know, what is the dominant product factor product form factor for each of these, use cases? And so it's a knockout drag out fight. Good luck out there.
Speaker 2:Yeah.
Speaker 3:Yeah. What?
Speaker 6:I mean, that's that's it's usually a good sign. Right?
Speaker 1:Yeah. Totally. Couple of things
Speaker 2:going on.
Speaker 1:Consumers benefit. I mean, everyone benefits. Like, you know, you you you you the pace of iteration is very fast. You get to test a bunch of things. You get to try new stuff all the time, everyone.
Speaker 1:And then, you know, at the end, a bunch of people make money, which is great.
Speaker 3:Exactly. How do you Exactly. How do you think about the pressure? So you're sitting on both sides of the table. Right?
Speaker 3:You're an investor at Lightspeed, getting an opportunity to look at and invest in some of the fastest growing, most exciting companies in the world. You're on the founder side now. Meanwhile, the average founder is being inundated with content around companies going from zero to 10 or zero to a hundred million dollars in this super short period of time. Meanwhile, you at Anchor, you know, pivoted multiple times and iterated towards this idea and eventually had a fantastic outcome, but it wasn't this sort of straight shot linear. As a founder now and from the founders that you talk to, is there just sort of this extreme pressure around I need to deliver faster results than ever?
Speaker 3:And do you think that could have a negative impact on outcomes? Because when I think of Obo, I think, okay, massive TAM, massive opportunity. This can be a $10,000,000,000 plus company if you look at, you know, companies like Duolingo and things like that in the public markets. But I could imagine that you're gonna have to sort of iterate in the same way. So what does success look like for you, and what advice do you give founders that are kind of facing that pressure to, you know, put up ridiculous numbers in a in a really short period of time or be, you know, relegated to the, like, you know, sort of not top tier, company?
Speaker 6:Yeah. We act we actually talked about this in the in the PMF or die cage in the cage.
Speaker 1:In the cage. In the cage. As one does. There there are a lot
Speaker 6:of startups right now that are experiencing explosive revenue growth. Right? It seems like every week there that chart has a new line on it. Like, you know, zero what you know the chart on top of
Speaker 1:it. Yeah. Yeah. Yeah. Hundred million ARR.
Speaker 1:Yeah. Six months, two months, one day, zero days.
Speaker 6:Yeah. Something we talk a lot about at Lightspeed is is, like, high calorie, ARR and low calorie ARR. Right? There's a lot of, like, cheap ARR growth out there, and I think a lot of it has to do with the fact that AI is very magical. People see these products.
Speaker 6:They're kind of, like, blown away by them. And they're like, here, take my credit card. Like, I I'm happy to pay.
Speaker 4:Yeah.
Speaker 6:But that doesn't necessarily say something about how sticky these products are Mhmm. Or how good they are or whether or not these users will actually retain. And so, you know, with a lot of these explosive high ARR companies, that we've seen over the past couple of years with with AI, it's not really a secret. You guys probably heard of this as well. Many of them are very, very churny.
Speaker 6:Right? They they they they churn very quickly. A lot of trialing, a lot of like, oh, I wanna experience this magic moment, take my credit card, but then I'm never coming back. And so, you know, the advice I gave to the, the case Play you
Speaker 1:guys and Patty. Was
Speaker 6:I think we gotta remember to continue to pay attention to, like, the metrics that have always mattered. Right? Things like consistent user growth and retention and making sure, like, the retention cohorts flatten out. They don't just, like, drop to zero. Because I think people are getting, like, very, very hung up on this ARR metric, which is great.
Speaker 6:I mean, it's a business that can go from zero to a hundred in six months. Phenomenal. But you can't ignore the traditional metrics that tell you whether or not a product is good. And I think I think that's gonna be really.
Speaker 3:Yeah. So on your side, are you are you ready to, you obviously started this with your former cofounder. Are you guys ready for, you know, I think you have, like, good instincts here, but you you must be sort of ready to, you you know, do as many hopefully, it's a one shot. You just nail it out the gates, but, it sounds like you guys are ready to, pivot as as many times or or sort of adjust the strategy as many times as as necessary because it is such a big problem space. There has to be a there's definitely a billion dollar business in here somewhere, but, you know, it still takes work to, Yeah.
Speaker 3:Find that spot.
Speaker 6:Absolutely. I think I think you gotta be willing to pivot. And by the way, that's what we see, like, you know, in places like YC, these companies pivot sometimes, like, five times over the course of two weeks. The pivot is so important. And, you know, the other thing I would say is, not only do you have to pivot, but you have to move faster than ever.
Speaker 6:I mean, the thing that I felt when I went in the cage with the guys was I've never seen people move this fast. These guys have been in there two weeks. They showed me what they're working on, and I'm not I'm not gonna reveal it. They told me not to reveal it. But the the amount of progress they've made in two weeks, I've never seen anything like it.
Speaker 6:Yeah. Like, they literally went from it not having a line of code to having a very fully featured app, iOS app. They're about to ship to the App Store.
Speaker 3:Yeah.
Speaker 6:There's just never been competition like this one.
Speaker 3:Yeah. Yeah.
Speaker 6:It's insane. I interviewed this, this guy, Josh Moore on my podcast. He he started this app, called Wave. You guys seen this app, Wave?
Speaker 7:I haven't. It's
Speaker 6:kinda like kinda like Renola. It's like a note taking thing with ARR.
Speaker 3:Got it. Sure. Cool.
Speaker 6:It's doing, like, 5,000,000 ARR. He built it by himself just like he had never coded before in his life.
Speaker 1:That's amazing.
Speaker 6:And he uses AI to not only teach him how to code, but to write the code and to check marketing. And it's just the level of intensity and competition right now is unlike anything we've ever seen.
Speaker 3:That's fantastic. Switching over to, putting on your your investor hat, wanna give you an opportunity. You know, Lightspeed's big investor in XAI. No. You know, and has been just one of the most active investors across the foundation model landscape.
Speaker 3:I'd love to, you know, besides the obvious, you know, you just sort of invest in Elon companies and, you know, you tend to do well. What was, like, sort of more of, you know, without going into, you know, go into however much detail you want, but, like, break break down kind of the memo on, on the the XAI thesis.
Speaker 6:Yeah. I mean, a lot of, a lot of what has been reported publicly, you know, aligns with with our our thinking and and our PC, thesis and that, yes, betting on Elon is a pretty smart thing. But but more than that, it's it's the level of intense I mean, to, again, bring it back to the speed and intensity that that he and the people that he hires, brings to the team. And so, you know, the first time we talked to that team and they were telling us about the data center that that they were gonna build. And again, it's been very publicized at this point.
Speaker 7:Yeah. We
Speaker 6:were like, wow. Like, if if you could actually do this, you would you would go for basically the starting gun to, you know, being at the same level or possibly exceeding OpenAI in in a matter of months in terms of model performance. And and then they went and did it. Like, they literally did it in, like, three or four months. And I think that type of intensity and speed and scale that that that, you know, only Elon and e like Elon like companies can actually do, combined with the fact that they've got obviously this incredible distribution channel right out of the gate through x.
Speaker 6:And not just a distribution channel, but a really unique content set to feed off of the model. Right? This model, unlike most other models, it it has real time information that they don't really have. And and that real time information also serves as a surface to trigger, you know, usage of the product. Analyze this post.
Speaker 6:Tell me more about this. So I think those are some of the factors that, that got us excited, and the team has as far beyond delivered, on what they said they would. So it's been really exciting.
Speaker 3:That's good. What, you know, obviously, you can't share any details here, but, should the should the broader market expect more foundation models, or is it kind of getting to the point you remember in crypto? It was like, okay. We don't need another, like, foundation level. Something like that.
Speaker 3:We don't need another l one. Like, you're like and then you'd see one and you'd be like, really? You know, like
Speaker 1:But this one.
Speaker 3:This one.
Speaker 1:Built different.
Speaker 3:Or or or do you think that, you know, the five or six major players, the key machines, xAI, OpenAI, SSI, are those, like, the labs that, you know, you know, we're we're sort of betting on, or do you think there's room for for more teams there?
Speaker 1:The way we were framing this was, like, if it is commoditizing, well, commodities are valuable. Oil is a commodity, and everyone wants to drill for a well.
Speaker 3:Yeah. It's very capital.
Speaker 1:Wells you have the better. Capital. Get a bunch
Speaker 2:of wells.
Speaker 3:Yeah. It's capital intensive. But if you put together a really great team, you can just start a new oil company and just end up being worth something. You know?
Speaker 1:But yeah. What what are you thinking about it?
Speaker 6:Yeah. I mean, I think, you know, I think a few weeks ago, a lot of people wanted to have the debate about whether or not, you know, DeepSeq meant that models were commodities and nobody should ever train foundation models again. I actually feel like that was the wrong conversation to be having. You know, the way we think about it at Lightspeed is these these companies are not just models. They are companies.
Speaker 6:They have distribution. They have customers. They have data. Right? They have security, safety, like, things that enterprises actually care about.
Speaker 6:And so, you know, I think should there be more models trained? Maybe. But I don't think a model by itself is necessarily interesting. I think there needs to be a product, and a team behind it. And so I think if you were starting a model you know, if you're starting a company today that's training a foundation model, I think you you you need to either bring something very, very unique to the table in in terms of what that model can do, or you you better have some other advantage in terms of distribution or, or some sort of data that other players don't have access to, that lets you jump up ahead.
Speaker 6:And and I think, like, that's an example of something Elon and the XAI team were able to do. They were able to to build this data center in a way that no no one else was willing to do Yeah. To jump ahead. Right?
Speaker 1:Yeah. So
Speaker 6:Makes sense. Yeah. That that's a little bit of the way that that we think about it and talk about it.
Speaker 1:Yeah. That's fantastic. You have any other questions?
Speaker 3:I think we covered everything. It's been great having you. We'd love to have you on, you know, when you have news with Oboe, new investments, things like that. Come on. We're all about, you know, conflict.
Speaker 3:Right? So we want people coming on that have have positions in the companies discussed on this show.
Speaker 1:Highly conflicted.
Speaker 3:Yeah. So it's,
Speaker 6:No conflict. No interest. Right?
Speaker 3:Exactly. That's, that's
Speaker 1:our motto. You come on, pump your bags, then we'll have your direct competitor come on, pump their bags.
Speaker 3:Yeah. Yeah.
Speaker 1:Why not? Why not? Have you both owned them? Shout out
Speaker 6:to the guys in the
Speaker 1:cage, by the way.
Speaker 2:Yeah. Yeah.
Speaker 1:Yeah. Yeah.
Speaker 3:Yeah. Thank thank you for thank you for coming on. Thank you for supporting the players, and, we'll have you back on here soon. Have fun. You're gonna go play some music right now?
Speaker 6:I don't I don't know. Maybe. Why not?
Speaker 3:Generate some music?
Speaker 6:With that that Gibson in the background.
Speaker 3:Yeah. Generate some music. Honestly, skip the skip the Gibson
Speaker 1:Wait. You're you're in Boston. Are you staying through Saint Patty's Day?
Speaker 6:No. Unfortunately not.
Speaker 1:You gotta go to South. You get get hammered on Guinness's and throw up in the street like you're a Boston And just college student.
Speaker 3:Yell about your striped secondary.
Speaker 2:Yeah. Yeah. Yeah. Yeah. Exactly.
Speaker 1:Yeah. Be fun.
Speaker 6:In in in in another, another timeline, maybe.
Speaker 1:In another life. Yeah.
Speaker 6:Yeah. I don't know if the my my wife hey. I decided to stay
Speaker 1:five more days. Day. There's big parade. And there there's gonna be green beer. There's gonna be green beer.
Speaker 1:I have to drink it. I have to do a Kegistan in Southeast. I'm sorry.
Speaker 6:Exactly. Yeah. Anyway understand.
Speaker 1:She'll understand. Great hanging out with you. Have a great rest
Speaker 2:of your day.
Speaker 1:Great to see you, Michael. We'll talk to you soon. Later, guys.
Speaker 3:Talk soon. Cool. Michael's a man.
Speaker 1:We're we're, like, informally doing a full, like, deep dive on AI education today. Yeah. We we we got that. We got OBO. Now I wanna go to Connor Zwick over at Speak.
Speaker 1:This is for language learning.
Speaker 3:Wait. Yeah. We already did a size gong whole segment on this, by the way.
Speaker 1:We did. So I
Speaker 3:think we should skip this one.
Speaker 1:Yeah. Let's skip it. But we do but I do wanna have them I do wanna have them on at some point. Yeah. But, yeah, little little historical size Gong.
Speaker 1:You know? Yeah. You you you gotta do it. You gotta do it. Any any excuse to hit the gong.
Speaker 1:Yeah.
Speaker 3:Yeah. We'll take it.
Speaker 2:Well,
Speaker 1:let's go over to Sagar and Jetty, good friend of the show. He's reporting. He's getting a little political, but it's fashion based politics, and so we'll cover it here on the show. Denied entrance to the chamber to the senate chamber for senator Jim Banks for wearing cloud runner running shoes with a full suit of tie. He wasn't wearing proper foot wear footwear, and Sagar says, the way I feel reading this must be what it's like to get high on heroin.
Speaker 1:Because soccer has been beating the drum on we need our politicians to be well dressed. They need to be wearing suits. No more sweatpants. No more Hey.
Speaker 3:Dress is at least as nice as we do this show Yes. Which John sometimes gets upset Yes. Because I'm not wearing a jacket. Yeah. But I just like to wear a college shirt sometimes
Speaker 6:and Yeah.
Speaker 3:Do a little business casual.
Speaker 1:It's, it's But
Speaker 3:it's too casual for John.
Speaker 1:Casual. Unless it's casual Friday, in which case we should be in, Jeff Lewis tank tops. Anyway, love love love soccer highlighting that. Speaking of Jeff Lewis, he's the next post in here.
Speaker 3:There we go.
Speaker 1:He says, Jeff Lewis over at Bedrock says, things that go up only over ten year time horizons, select individual companies led by transcendent entrepreneurs, private and public, tasteful ultra luxury real estate. I like where he's going with this. Land in select locations, select cryptocurrencies, select precious metals, and select artwork. He says that is all. I love
Speaker 3:it. Ominous.
Speaker 1:A great post. So
Speaker 3:So if you're in the Mag seven Yep. Rotate to select precious metals.
Speaker 1:Well, if your Mag seven company isn't led by a transcendent entrepreneur. Yeah. Because if you are led by a transcendent entrepreneur, it doesn't matter if you're public or private. You can still go up over a ten year time horizon. But otherwise, get out and get into some ultra luxury real estate, some cryptocurrency, some precious metals, and some artwork.
Speaker 1:I Do it. I I think we're we're getting up to speed with the ultra luxury real estate. We're getting up to speed with the crypto and the precious metals. I think we're behind on the artwork, so we should have him on to talk about that. Where's where's the bull market?
Speaker 1:There's always a bull market somewhere.
Speaker 3:What are we looking at? You can find an artist that you like, buy up all of their available, you know, works, and then just start, you know, putting them up in auction, buying them yourself Yeah. You know, sort of market.
Speaker 1:Chandelier bidding.
Speaker 2:Yeah.
Speaker 1:Yeah. Are you familiar with chandelier bidding? I think so. It's a it's a phrase for when you are essentially bidding on your
Speaker 3:own Yeah. Yeah.
Speaker 1:Just to, like, kind of raise the reserve on a on a piece of, on something that you're you're auctioning off. And, of course, if you
Speaker 3:win your own
Speaker 1:win your own auction, then you have to, then you have to pay the fee. But the fee for the risk of pumping up the price, you
Speaker 3:know, creating demand I think that's just called market manipulation. Champ chandelier bidding, I just looked it up.
Speaker 1:Oh, yeah. What is that?
Speaker 3:It's where the auctioneer auction house
Speaker 1:is doing.
Speaker 3:Tends to see a nonexistent to see a bid from a nonexistent part of the room to
Speaker 1:go, oh oh oh.
Speaker 3:Okay. And and we're going up.
Speaker 1:So is the the auction house trying to fuck their bags? Yeah. I got it. It's not weird.
Speaker 3:You're talking about is even more real where,
Speaker 2:you
Speaker 3:know, I I know people that let's say you own 30 pieces of artist's work, and one of their pieces that's comparable to yours goes up for auction. If it doesn't sell well, then your entire collection is taking part now.
Speaker 1:You might as well just buy it.
Speaker 3:So you might as well just buy it. Mark. Yeah. Mark it up. Smart.
Speaker 3:Mark it up. VCs do this.
Speaker 1:Yeah. They're like they're like, all of the all of the foundation model companies Because every time one comes to market, it's worth billions. And so, you know, the the the first one I invested in certainly has to be worth a trillion.
Speaker 3:Yeah.
Speaker 1:Who knows? Anyway, speaking of a company that sorely needs to acquire one of these foundation model companies.
Speaker 3:Transcendental
Speaker 1:Apple, plans one of the biggest software overhauls in its history for iOS 19, iPad IO iPad OS 19 and Mac OS 16.
Speaker 3:Folks, if you love the Photos app, you're gonna love this.
Speaker 1:Looking to revamp its operating systems for a new generation of users, and Rajvir says, I don't trust twenty twenty five Apple to pull this off. They might just incinerate the greatest business ever created. And Chris Warren says, yeah. I'm taking under on this. I don't know I don't know if they can incinerate the greatest business ever created, but, they definitely need to try something new.
Speaker 1:They definitely need to get some fresh blood in there, take
Speaker 3:some risks. Really make the software much worse, and it would still take a lot to actually compete with them on the hardware.
Speaker 1:People don't like green bubbles, and, yeah, the hardware is hard to make. It's a very reliable product. It connects to the wireless network reliably. People forget that, like, you know, a lot of the beauty of the Apple ecosystem is just yeah. Like, it finds the five g tower or the LTE tower or it it doesn't drop phone calls that often.
Speaker 1:Like, that those are considered table stakes, but they could go away if you if you get lost in something else. Anyway, Jared Rossner says, huge opportunities for AI startups that no one is talking about. AI native brokers. When broker transactions can be fully automated, those markets
Speaker 7:are all
Speaker 3:context, Jared.
Speaker 1:Oh. Hey. Really quickly. We got Dalian on the show.
Speaker 3:Oh. Bring it in the There he goes.
Speaker 1:Hey. How you doing, Dalian?
Speaker 4:What up, ma'am? Congratulations on launch day.
Speaker 1:Making the
Speaker 4:tech great again.
Speaker 1:Yes. Thank you. Thank you. What's new with you? How did you, how did you enjoy the weekend?
Speaker 4:You know, Tahoe, terrible place to ski, great place to hang out with friends. Always, you know, sort of happy to, you know, sort of be there. And, yeah, God bless you know, sort of Coogan's wife for being willing to carry two big Coogan's and bat of her once upon a time. Really hard to do that myself.
Speaker 2:Well, I mean, she got
Speaker 1:she got a relaxing weekend. It was good. She was worth it. It was all worth it.
Speaker 3:You have twins.
Speaker 2:It was
Speaker 4:all worth it
Speaker 2:at the end.
Speaker 3:Twins. If you have twins, twin boys Yeah. Give me a third son. Yeah. I'll take you to Tahoe.
Speaker 1:I actually didn't get to ski with you, Dylan. Are you good? Can you do backflips and three sixties? Or
Speaker 2:you
Speaker 4:know, I think I was the best skier on the trip, but, you know, I'm not quite at the level of, doing backflips. But I do have many friends from high school because I went to high school in Utah that are very backflip capable, including, my little brother Pavel's, cofounder, Jeff Morelli. She's, either sort of CEO out of New York, not skiing very much, but is very here. So this is
Speaker 2:why Where
Speaker 3:are you on the where are you on the skiing risk curve? Do you ever scare yourself skiing? John and I were talking yesterday. If you're getting the point where you're genuinely scaring yourself consistently, it's probably too far. But at the same time skiing, I I was telling a story in in December.
Speaker 3:I was in the Alps and having the best run of the trip, you know, got distracted for a second and fell, like, 200 feet, got a yard sale did a yard sale then fell, like, another 200 feet. But, you know, that that happened once on the trip. That's maybe the most that I'm comfortable with. Where where are you on the risk curve?
Speaker 4:You know, I think I'm, very bad at the risk curve, and I should be better at that given that I have a wife and, you know, sort of child. But weirdly, somehow in skiing is not the place where it shows up. Like, I've had probably more near death incidents in, like, the first quarter of this year than, like, you know, the prior decade, basically, combined.
Speaker 2:And
Speaker 4:so it's made me think a lot about maybe I need to adjust my risk curve. But somehow it's skiing. I think it's because I just ski for so long that I know the downside of, like, I did all the crazy shoots and cliffs and all that stuff when I was younger, so, like, I don't feel the need to, like, quite go that crazy. But then yet again earlier this year, I found myself in this place where I was just, like, I kept powder hunting. Where was I?
Speaker 4:Oh, yeah. In Deer Valley. And I just kept going slightly more off piece and slightly more off piece and slightly more off piece until at some point, I found myself going a little too fast off a cliff that I didn't know was there. I managed to catch myself, but unfortunately, like, halfway down the cliff where I no longer had an option of, like, climbing up, I just had, like, the rocks below me, but not enough speed to clear them. And so I was like, well, there is only one way out of this.
Speaker 4:It doesn't involve, like, you know, waiting an hour for ski patrol to, like, you know, come and grab me, and it's like, it's time to go rock skiing.
Speaker 2:Oh, okay. Rock skiing. Oh, right.
Speaker 4:I launched myself, skied across the rocks a little bit, went off, and I was like, I think I'm done for the day. So, you know, I'd like think I've gotten better by risk curve, but, yeah. Instead of where you're gonna take care of I, purposely only grabbed super thin, racing carving skis because I'm like, that's not even tempted to go off piste. The only thing that these things are capable of is carving.
Speaker 3:Are you, are you having those near death experiences as a pilot? You fly small planes. The pilots I know will tell me these stories where I'm that are just, like, the most harrowing stories about a single landing on just, like, what was supposed to be a casual trip. And they're, like, yeah. It was raining, and we lost connection with the tower.
Speaker 3:And it was, like, completely pitch black, and there was no lights on the runway. So we had to land, and the plane was, like, going backwards. There was so much wind. And I'm like, how does your wife let you do that? Yeah.
Speaker 3:Where are you having near death experiences other than skiing?
Speaker 4:You know, every, motorized vehicle that, I find myself behind, you know, whether it's in the air or not, I I I somehow have found myself in a bad situation over the past quarter.
Speaker 2:Right.
Speaker 4:So I'm so deep in the doghouse that, I I I I I'm putting myself through a remedial, you know, program of you know, I'm very good at the technical nature of the operation of the vehicle, but it's the higher level risk calculus of what situations I put myself into that is very poor.
Speaker 1:Yeah.
Speaker 4:So my, remedial program is I went, and, back to all my, flight trainers, and I went and found the oldest one. Because as they like to say, there are bold pilots and there are old pilots, but there are not bold and old pilots. There you go. I think it's important for me to become an old pilot rather than a bold one. And I think right now, sometimes I'm a little too bold.
Speaker 4:So That's great. Yeah. Well, mister Keith out from South, South LA, which speaking of yeah. I'm excited to be, you know, in LA with you guys a little more often lately.
Speaker 1:Yeah. Yeah. Yeah. We're we're happy to have you. Well, stay safe.
Speaker 1:We I wanted to run something by you. Obviously, there's turmoil in the financial markets. We were pitching something called the yard sale theory of financial markets where, basically, every ski season, the capital allocators go. They're speaking freely on the ski lifts together. They know no one else is listening.
Speaker 1:They share stock tips, and then the market crashes. And so if you look at, like, Theranos, it it happened during ski season. FTX happened during ski season. Enron was discovered during ski season. What do you think of that, or why do you think the market's going down right now?
Speaker 1:What what's gone wrong?
Speaker 4:You know, there is a, like, historical seasonality to, like, the stock market. I remember, you know, sort of seeing something similar where it was basically the past, like, you know, sort of fifty years of the steepest dry downs of the S and P 500. Something like 80% of them happened between, like, October and February. There's a component of that that I'm sure is also, like, tax season related where, like, people want a lot in, you know, sort of gains versus losses at the end of the year, but not too closely. You know, sort of coupled to it.
Speaker 4:I'm sure there's a component of it as, you know, people sharing, you know, stock tips in Aspen. There is also the presidential transfer, whether it's, you know, sort of this year or any prior year always happens at this time of year, which also introduces volatility and people don't like volatility. The one bull sign that I'll say is I was just looking at this. I don't know if you guys know this website, Truflation, which basically tries to do, like, a week to week, analysis of inflation, just tracking grocery store prices, etcetera. And it has it is actually showing, like, a pretty steep drop That's great.
Speaker 4:Over the past Yeah. Fifty months. And so I'm a I'm a little bit of a believer of, like, the Scott Bessent. You know, there is going to be a detox period. Sure.
Speaker 4:Now I think that some of the moves that the administration are making feel, like, a little, blind, and they clearly are sometimes pulling things backwards. Like, you do the tariffs, you roll them back, you do a bunch of layoffs. And then some of those layoffs, like in Noah, I was just reading today where, like, they laid off a bunch of, like, the Noah commercial sent remote commercial sensing team, and then there is a huge, you know, sort of backlash. And so some of those people got rehired, like, a week after getting fired by, you know, sort of Doge and crew.
Speaker 1:Oh, interesting.
Speaker 4:So there is a little bit of, like, I feel like they're taking, you know, sort of a chainsaw, which is not unreasonable when you need a scalpel because it's just like the scalpel may take too long and the, you know, it only has two years before, like, congress potentially flips. And so it's probably a reasonable, you know, sort of approach, but I think that's what you're seeing in the market is, dear God, like the, you know, sort of president and Elon are taking a chainsaw to the federal government, and, that's, you know, introducing some level of volatility. I like this, you know, you you've, I'm sure, heard, you know, sort of Peter say this a bunch, but I I love his, you know, analogy on what is The US President, and it's either they're the mayor of The United States, but the dictator of the world. Yeah. In that, you know, they basically have infinite power over foreign policy, but actually pretty limited power domestically.
Speaker 4:And so there's so much of, like, the S and P 500 that's been propped up over the past couple years by just, like, insane amounts of foreign inflows
Speaker 2:Sure.
Speaker 4:That actually starts to become, you know, sort of very, aggressive to some of our, you know, sort of partners and allies and especially in Europe. You'll start to see some of that, you know, sort of flow out into, like, their own domestic stock market, which, again, you know, I'm not saying, like, I'm somebody that, you know, obviously comes from Eastern Europe, and I'm, you know, sort of crazy anti, you know, sort of Russia. And so I, you know, don't necessarily, you know, want us to totally concede to Putin. But at the same time, I also think it's important for allies to finally, like, you know, get their you know, their shit together. Now rearming of Germany, we've seen how that's gone the past couple times.
Speaker 4:So, you know, we gotta be a little cautious there. You never know, you know, AFD, you know, Elon being very pro AFD, probably good. If AFD gets too powerful
Speaker 2:Yeah.
Speaker 4:You know, maybe we're back to Lebensenal. And so that's maybe a little, you know, sort of tricky. But, yeah, the Germans probably, you know, could stand to be a little more, you know, prideful.
Speaker 1:Well, speaking of Elon, Starship, do you have a theory for how long it for why it's so long?
Speaker 3:Real quick before that, because it sort of leads into this. Right as the Doge stuff started to get very intense and was sort of top of mind, NASA just happened to come out and they said, oh, by the way, there's asteroid that's it's basically it was there was, like, doubling every day.
Speaker 1:Had on.
Speaker 3:Yeah. Yeah. I gotta I gotta throw this on. We keep this nearby for instance, like we
Speaker 1:discussed conspiracy theories.
Speaker 3:Yeah. Yeah. It was, like, almost every day it was, like, doubling the the the chances that an asteroid was gonna hit in ten years. And I was, like, this is just, like, it's ten years out. It's particularly convenient conveniently timed.
Speaker 4:Then now we finally need NASA.
Speaker 3:Yeah. Yeah. Yeah. That that would that would that was kind of the joke. But how how to do you have any insight into how, into why they they could have had some an event that's far enough out that we have probably quite a lot of data on that then there could be that amount of variance in such a short period of time around something as catastrophic as impact?
Speaker 4:I'm gonna, you know, bring up a totally unrelated point and then, answer your question. The totally unrelated point is, China has now confirmed that they're gonna fly Pakistani astronauts to the Chinese space station. Wow. So for the first now I'm not saying that Pakistan is like a huge, you know, sort of lover of The US or anything like that, but I actually don't know too much about, like, the, you know, general foreign policy history with them. Do they like us versus China more?
Speaker 4:I mean, China did did basically invade, you know, their next door neighbor, India, but I know they hate the Indians. So maybe they because of that, you know, the enemy of my enemy is my friend. Sure.
Speaker 2:And
Speaker 4:so maybe, therefore, Pakistan likes China. But I think the interesting thing to think about there is that China is exerting soft power, not just via, like, the Belt and Road initiative and, like, investing in the infrastructure, but it's like, you know, come visit our infrastructure, and they're starting to build up a coalition around that. Because you can imagine that eventually turning into, you know, Pakistani astronauts visiting the Chinese lunar station. And, you know, I don't know if Pakistan's good at a lot of things, but, like, maybe they're good at having, you know, sort of some of their folks go up there and be, you know, sort of lunar miners that may have a very high death rate early on. But, you know, maybe they're willing to, you know, sort of push for that.
Speaker 4:So thinking about some of our, you know, sort of enemies, you know, coalescing around, you know, sort of stations in space, you know, potentially scary thing. We gotta think about what we do as America. On the, like, asteroid tracking, I I kinda buy it in that man, it's so hard to track even on our satellite, and we know where SpaceX dropped us off and, like, where things are going, and that's, like, so close to Earth. The idea that, like, we have perfect tracking on these, like, asteroids super far out. You know, there is, I think, a lot of statistical, you know, variability, and then you have to, like even the reason that there is, you know, increasing increasing and then set and drop is I'm sure what was happening is we have a bunch of these, like, you know, sort of deep space radar, etcetera, different assets.
Speaker 4:One of them starts to pick up, hey. This thing is starting to get close. And then it may take some time for us to, like, spool up a bunch of resources. You probably need the Earth to spin around a couple times. You have, like, the Australian radar, etcetera, pointing at it, and then we just get better and better, and then all of a sudden, it drops down to zero.
Speaker 3:So Every time that because that is it really felt like every day was a sort of doubling effect. So, and it's very possible that it was, like, the Earth was just spinning around. We're getting another look at it. Yeah.
Speaker 1:That makes sense.
Speaker 3:But, yeah,
Speaker 1:going back to us.
Speaker 4:Though that we did a, like, a test run on this. So NASA, actually, about two and a half years ago, did a test run on what we would do if we had to deflect an asteroid. And so they basically slammed a satellite into an asteroid going crazy fast and then measured that they were able to adjust, the course of the asteroid. So
Speaker 1:How does that work exactly? Is that, like, there's there's already an there's already a satellite up there and they just task it to move a little bit to intercept? Or is this, like, we're gonna launch a new rocket with a new satellite on it specifically for this? Like, what what's the trade off there?
Speaker 4:I think one of the things that helps with SpaceX and this is both true for, like, space space, like, even stuff that Varda, you know, sort of works on on the defense side because, you know, Falcon nines are basically going up, like, every 24 hours now. You don't have to think about this stuff as much as, like, fixed assets in orbit needing to be ready to go because the difficulty with that is, like, now you have to think about, like, the longevity, the maintenance of that asset. You have to, you know, sort of replace it because what people don't realize is, like, if you're up in lower Earth orbit, it's not like you get to be up there infinitely because, like, there still is a little bit of atmosphere up there. So you have a little bit of drag. And so if you're, like, 500 kilometers in the size of a Varda satellite, you'll still deorbit over the course of five years and basically come back down.
Speaker 1:Sure.
Speaker 4:And so with something like that, we could actually just, like, you know, have the satellite basically ready to go in a storage facility down here on Earth. The moment we know the asteroid is starting to head towards us, then, you know, basically go launch it. And so, they demonstrated that, you know, sort of now, you know, in terms of the, like, go launch the custom satellite and go send it directly to an asteroid and go hit it. And then in space, even though the satellite is, like, so so so so so small relative to the asteroid, the speeds are just so insane that, like, you're going at such a speed that it's, like, basically, like, a thermonuclear weapon getting, like, you know, detonated on the asteroid at those speeds. And you can actually, like, adjust this thing's course.
Speaker 4:And if you're, like, if you hit it when it's, like, seven years out, even, like, a 1% adjustment is, like, a thousand kilometer, you know, basically, like, you know, going off course, in which case, you, like, totally miss the Earth. And so, yeah, I don't think we need to be too worried about the asteroid stuff. We've gotten pretty good at, you know, detecting that and, you know, now showing that we can read the, what's it called? Neil Stevenson book, Seven Eves.
Speaker 1:Oh, yeah. Bigger book.
Speaker 4:Little dot that goes to the moon. Yeah. Then we're fucked.
Speaker 3:Well, so so every guy, you know, thinks they could land a commercial airliner, like, if if required. Right? It's sort of like, oh, I could do it. Like, you probably actually could given your experience as a pilot. But if we had an asteroid coming here, it you'd probably secretly get a little bit excited because you're like, alright.
Speaker 3:Yeah. It's my time. Like, I'm I'm the guy. I'm gonna deflect the asteroid.
Speaker 1:You'll use the artist's capsule.
Speaker 4:Speaking of needing that, you know, land an airliner, as a pilot, if one were to ask me, what's your favorite situation? If you had if you put me behind the cockpit of a seven forty seven, you're like, Dell, you gotta land this thing. I would say, I would wanna be in the northern latitudes at daytime on a very cold day in the winter with super clear skies. Why? Because that's basically, like, the highest air pressure that you can basically get.
Speaker 4:So the atmosphere is very, and and at sea level, so the atmosphere is very forgiving. Basically, you have, like, a, you know, sort of ton of, you know, both lift, but then also when you, you know, sort of put your, you know, sort of flaps in a ton of drag, it's basically almost like, you know, flying like the equivalent of, like, if you've ever seen x k c d comic of, like, if we had humans on Titan, which is one of the moons of Jupiter, you could actually just go out there with, like, wings and the atmosphere is thick enough that basically, like,
Speaker 6:we could just, you know,
Speaker 2:sort of
Speaker 4:flap our wings as humans and fly. And so it's pretty surprising that, you know, a Delta pilot landing in Toronto in the middle of winter on a cold clear day with super high air pressure somehow flipped that thing upside down. That is literally, like, should be the easiest situation to, you know, sort of land in.
Speaker 2:So
Speaker 1:Well, we we need to give you the the tinfoil hat and you can tell us what really happened. You gotta
Speaker 4:I mean, you know, there's a lot of, like, you know, TDI accusations going up there. Maybe it's, you know, the Canadians are starting to try to, you know, fight back against the trade wars by, you know, making our planes flip upside down.
Speaker 1:Yeah. UFOs or something. Who knows?
Speaker 3:Talk to us about SpaceX last week. The haters the space haters were taking a victory lap. Yep. What what's your take on the situation as as a as an entrepreneur who's building on top of SpaceX infrastructure? Obviously, a big believer.
Speaker 1:Why is why is Starship so much harder than Falcon nine on this? Like, walk us through some of the complexity there.
Speaker 4:Yeah. I mean, you have to remember Falcon nine was in the early days, ultimately based off of technologies that had, like, a ton of heritage. There wasn't really anything that was that totally net new other than as they started to, you know, sort of do the landing lags and the, you know, grid fins. Right? Yeah.
Speaker 4:And those were obviously very, you know, sort of net new. And as we saw, it took them, like, you know, basically on the order of if I remember, like, the first landing was, like, 2014 when it really got operational. I would argue it was, like, sort of, like, end of twenty nineteen. So it was still, like, a five, five and a half year. And by the way, they were trying to land for, like, two years before that.
Speaker 4:So call it, like, two years of lots of failed tests, five years even from when the first test succeeded to when it became operational. That was obviously, in some ways, a much simpler vehicle. It was smaller. It was based off of, like, you know, technology that had a lot of heritage. Everything from the metals they were using, the way that the rocket engines were, you know, sort of designed, there was a lot that already had a ton of heritage.
Speaker 4:As we flip over to Starship, those technologies just do not scale to the size of, you know, sort of Starship, especially as they started to think about, like, distributed engine architecture, they wanted to be able to reenter, etcetera. So, like, Starship is, you know, both a huge leap in size, but you're also, like, discarding this whole history of aerospace that you can you previously you're building on top of. And so the fact that they've even made it this far this quickly is, I still think, astounding. Obviously, the company is a lot bigger. They have more resources.
Speaker 4:You wanna push for, like, hey, they should be able to make, you know, sort of faster progress. But I I don't see it as any sort of, like, existential, you know, sort of risk. I think it's just that the company is way more high profile. Like, in 2013 and '14, where all these rockets were, like, landing and blowing up, I don't feel like there was, like, huge news cycles around each one because Elon was, like, a loved lib, you know, that, you know, the media, you know, treated as, like, a darling versus, like, you know, he's, you know, seen as a Nazi. And so anytime anything ever so slightly, you know, goes wrong, they're trying to, you know, sort of attack him.
Speaker 1:I mean, SpaceX even turned the all the crashes into this, like, vibrio with, like, in the hall of the mountain king playing, and it was, like, celebrated by everyone. It was, like, oh, yeah. They blew up so many rockets. This is how progress happens. It's awesome.
Speaker 1:It was great.
Speaker 4:Yeah.
Speaker 1:And now it's I
Speaker 4:mean, there's also I don't know if you guys saw, actually, Kiko Donchev, who's the, VP of launch at SpaceX, actually just, wrote, you know, maybe it can be one of the tweets you guys discussed at some point. But, he just earlier today, like, two hours super long tweet to, like, a random, SpaceX, fan Twitter account. Basically asking, like, what's going on? Why are things Sure. Gears are taking a bit, you know, sort of longer, etcetera.
Speaker 4:And if you want, I can even text it to you if you I don't know if it's something you guys Yeah.
Speaker 3:We should pull it up right now and maybe walk
Speaker 4:through it. Yeah. Let me let me text you the,
Speaker 1:I I got it here. I found it.
Speaker 4:Oh, you got it, Kiko Danshu. Yeah. Cool. It's like this long, you know, sort of super long reply. But it was basically, like, look, like, you know, they are just flying a
Speaker 6:lot.
Speaker 4:So it's like Falcon nine has also had more issues over the past years or six months than, like, the prior, like, five years years or combined. And I think you get it from his point. It's like, you know, sort of look. Some of these boosters are getting, you know, sort of a lot older. Also, just like the sea conditions, you know, off of, you know, Florida have actually been, you know, sort of pretty crazy, and so that's been more refurbishment.
Speaker 4:We're now starting to learn what happens when something flies twelve, thirteen, 14 times in a row. And so we still have a long ways to go until, like, Falcon nines are at the level of safety of, like, a seven forty seven. Remember, with commercial aviation from when, like, the first jet tube, you know, sort of airliner came on to when we basically stopped having deaths other than let's ignore the DC thing, you know, which, you know, more has to do with, like, aircraft control than it does with, like, the jet. It took us on the order of, like, fifty years for those things to become very, very safe. Right?
Speaker 4:Like, we basically had lots and lots of airliner crashes in The United States until 02/2012.
Speaker 2:Yeah. And then
Speaker 4:in 02/2012, they basically stopped. Or maybe it was, like, 02/2010. And then we didn't have them for, like, fifteen years other than this, like, DC thing. Yeah. And so I'm sure Falcon nines will get to that point, but, like, it may be, like, either thirty years of finding all the weird edge cases, atmosphere, this seat condition, this thing before these things are, like, as reliable as commercial jets.
Speaker 4:And they're more, you know, complicated than commercial jets are. Oh, one analogy that I like to, you know, sort of bring up that, you know, some of the viewers might like. People think about, like, how expensive is it to go to space, etcetera. If you think about it on, like, a unit of fuel of, like, how much fuel you need to get up there, The amount of fuel that it'll take for, somebody to transport us from, like, London, to New York on a seven forty seven, that's basically the same amount of fuel, like, hydrocarbon energy that you would need to get up to orbit. Which it gives you a sense of, like, once
Speaker 3:you On a per person basis?
Speaker 4:Yeah. Yeah. On a per person basis. Basically. So, like, at this point, if you think about your, like, tickets to, you know, from London, New York, it's actually mostly the fuel cost.
Speaker 4:Right? Like, they've largely amortized the airframes. There were so many passengers in so many flights that you're barely paying for that. And so to give you a sense of, like, what is the terminal cost of going to orbit, it's gonna be roughly, like, a Cross Atlantic flight is basically, like, how much it should cost, like, on the order of, like, 500 or $700 for, like, an economy ticket.
Speaker 1:Interesting. Yeah.
Speaker 3:Great.
Speaker 1:That probably unlocks point to point as well then. Like, the SpaceX point to point just like using the rockets to get from New York to Japan as well, similar cost.
Speaker 4:Yeah. Yeah. I mean, obviously, that's where it's like, okay. The rockets now have to be probably as safe as that. Because, like, the the people
Speaker 1:that are gonna pay for that are gonna
Speaker 4:be, like, the richest people in the world. They're also the most safety conscious Yeah. Which is what I always think about when people are talking to these, like, faster jets, etcetera. I'm like, man, people are definitely willing to pay for some speed, but, like, rich people also really care about being safe too.
Speaker 2:Totally. So there's
Speaker 4:a little bit of this, like, you know, people claim, hey, I'm gonna build the, like, you know, the Tesla style, you know, what what was their first vehicle called? The expensive one and then, you know,
Speaker 3:on the Roadster. It's like a little bit
Speaker 1:of a little less than
Speaker 4:100. Of planes approach is, like, a little harder to do. Like, the crazy people are more the, like, you know, small, you know, sort of pilots like me that are a little crazier, but, like, you know, I don't know that, like, you know, mister Peter is, you know, hopping out of his jet anytime soon.
Speaker 3:Yeah. Talk about Eric Schmidt going to Relativity Space. He's obviously been a big backer of the company. You've you you have some of your own opinions. And then we'd love to maybe extract have you extrapolate a little bit on
Speaker 1:Just context. We don't we don't we we cover a lot of posts on x here, but we we don't cover, deleted posts. So Yeah.
Speaker 4:That's probably forget it. Yeah. Let's say
Speaker 3:there there there were
Speaker 4:some great deleted posts performing quite well, but, you know, the team here is all about not making enemies. So I've got a play it safe.
Speaker 1:The deep state the deep state came for you.
Speaker 4:There's the problem with two jobs is you have twice the number of people that are trying to get you to delete tweets. And so yeah. I I I think I should have zero jobs. That way, I have zero x the number of people trying to get me to delete tweets. I
Speaker 3:can't wait for that moment when you're just running your family when he's running his family office from Mars, and he can just say whatever he wants. No. But just talk touch generally.
Speaker 4:Even delay. So Even if people ask me to delete, it's, like, so late that it's like, dude, it's been up there for an hour already. And, you know, sorry.
Speaker 3:It's just
Speaker 1:it. Unhinged.
Speaker 3:Talk about Relativity as a company that presumably would want your business, you know, should it, you know, continue to make progress?
Speaker 4:Yeah. I mean, you have to look at it from our perspective. Right? We have to sign launch contracts basically on the order of, like, two years out because that's basically how long it takes us to, like, supply chain, plan things, build vehicles, etcetera. That's how far out our customer contracts are.
Speaker 4:You know, we plan on, you know, call it roughly that two year cycle. And so if I'm signing a launch contract two years from now, I better have that, you know, vehicle ready to go. Otherwise, like, my customer is going to be disappointed, and all of a sudden I'm, like, holding up revenue. And so from a commercial basis, it's, like, really hard to sign contracts with anyone but SpaceX right now because no one's showing any level of repeatability. Like, even though, you know, sort of Blue Origin has gotten to space, Firefly, Rocket Lab, etcetera have, nobody's matched, like, the consistency or the price of SpaceX and nowhere close to it.
Speaker 4:Right? It's like, you know, there's just there's not even, like, an obvious number two even anytime soon. It's like for me to feel confident in, you know, let's say, relativity, they would have to launch, like, this year. They have to probably do it multiple times and multiple times next year, and then might be maybe at the end of twenty twenty six, I would consider signing a contract Sure. For 2028.
Speaker 4:And so, man, that's, like, a really tough business to take over. You know, I think in 2017, the sort of consensus viewpoint in Silicon Valley was that launch was this commodity. There was gonna be, like, you know, four or five players. There was gonna be very, you know, sort of low margins. And it wasn't going to be a place where you could generate many, you know, sort of venture returns.
Speaker 4:And it turned out that it's actually quite the opposite. There's basically one player. SpaceX effectively represents 99% of the market and has, like, insane profit margins on their launch business. It's something on the order of, like, you know, sort of 50%, you know, sort of gross margin is, like, the rough report numbers that I've seen publicly. And so, man, stepping in as Eric Schmidt into Relativity, it's like, one, my understanding is he's basically funding the company payroll to payroll.
Speaker 4:That, I always think, is a really hard, cultural place to be as a company Yeah. Because you're both on the brink of death, but then also you don't have an obvious death date.
Speaker 3:Yeah. It's just the emotional sort of, you know, you you might feel great about the company one week and the next week, and the CEO is like, should I should I hold a plug, like, is it time? Whereas funding, you're like, at least I'm funding for twenty four months of runway and, you know, I will see do
Speaker 1:the experiment.
Speaker 3:Have good weeks and bad weeks, etcetera.
Speaker 4:Yeah. Exactly. Like, this is why I think a a lot of these billionaire funded projects where the billionaire has made it clear that they will backstop the company somewhat indefinitely without a clear end date have never really worked, because you don't have this clear like, I think what's become the magic of venture and how it's been staged out is, like, you have this very clear window. You have twenty four months. You have to accomplish a lot.
Speaker 4:If you don't, you're dead, and if you do, you get to march on to, like, the next window. Yeah. And, like, there's a reason why Darwinistically, basically, all the best companies in the last twenty years have gone through those windows, and the ones that tried to, like, avoid those windows basically haven't worked. Right? And, like, we can list so many examples of this.
Speaker 4:Airship, Kitty Hawk, etcetera. There's been, like, so many types of projects.
Speaker 1:Yep. Larry Ellison has a farm on his own.
Speaker 3:He's spent, like, almost, like, a billion dollar
Speaker 1:He's, like, half a billion into
Speaker 2:it, and
Speaker 1:it doesn't seem like it's going too well.
Speaker 4:Yeah. And it's, like, I I think when people try to avoid this in self fund like, I tell billionaires when it's, like, when you're going to start a company, don't do the backstopping thing. Still raise them much or participate alongside the venture rounds and make it clear that you'd like to invest in the company, but predicated on, like, again, hitting, you know, sort of these milestones and growth. And so the thing that I think is really hard about this Eric Schmidt situation is, like, you're both totally decoupled from the, like, we need to hit milestones in x y z period of time. But, also, it's not like, you know, Eric has indicated I'm gonna fund this thing for multiple years.
Speaker 2:Yeah.
Speaker 4:You're sort of, like, you know, on some indefinite, you know, time period, which is, like, the worst parts of both worlds. And then, also, SpaceX just continue to succeed, and there's other players, like, you know, at this point, relativity was thought of in 2021, let's say. Relativity was thought of as, like, the number two because they had so much funding, momentum, etcetera. It's like, you're not even number three anymore. Right?
Speaker 4:Like, number two is obviously very much so Rocket Lab. Number three at this point is Firefly. Right? And Firefly is actually getting to space on some regular basis. They just landed on the moon.
Speaker 4:You know, I'm sure it's gonna generate a ton of investor interest for them. Like, even though their prior, you know, CEO twiddled some diddles and had to get, you know, booted from the middle, you know, the the new CEO is, you know, hopefully, not gonna twiddle some diddles
Speaker 3:and block
Speaker 4:some rockets instead.
Speaker 1:Yeah. Let's keep it focused on the rockets here.
Speaker 3:Are there are there any, how closely do you track, you know, China's progress? Do they have anything that could be competitive with Falcon nine in the next fifteen years? I'm assuming they're stealing all of our sort of trade secrets actively, but it still takes even if you have the master plan and, you know, even the schematics, it takes quite a lot of Is
Speaker 1:there Chinese Varda yet?
Speaker 4:There's an Indian Varda as of yesterday. Okay. Yeah. It's actually in the latest white combinator batch.
Speaker 1:No way.
Speaker 4:Props to them. It was a very cool launch video.
Speaker 1:Okay.
Speaker 4:Wow. That was awesome. You know, look forward to hopefully there being Chinese varda and, you know, African varda and, you know, I just want every continent, Aussie varda, you know,
Speaker 1:formations.
Speaker 3:That would actually be very bearish if you weren't getting copied Exactly. At all. Right? You want that.
Speaker 4:That's that's always
Speaker 2:my perspective.
Speaker 4:If you're not getting copied, then your idea is probably not very good. Yeah.
Speaker 1:So there
Speaker 4:are plenty of, SpaceX, copycats even today.
Speaker 1:Of course.
Speaker 4:On the Chinese side, they don't have anything that is anywhere close to landing, but they're clearly just willing to throw manufacturing and bodies at the problem where I think it's something like SpaceX has launched 27 times so far this year. China has basically launched 19. So it's I mean, in the grand scheme of things, it's like pretty close, I believe. They just, you know, are, you know, very good at manufacturing these things very rapidly, and they're just pumping it off the line and just not dealing with user reusability. And so I'd somewhat been like there's a couple of Indian launcher companies that have taken that approach too.
Speaker 4:It was like, we're not even gonna try and do reusability anytime soon. We're just gonna make these things super, super, super cheap. And then at some point, we'll think about reusability down the line. And so the Chinese are definitely like, if it weren't for SpaceX, man, there would be, like, red panic bells all over the place. You know, sort of god bless that SpaceX has actually succeed the level they have.
Speaker 4:Otherwise, we would be, like, very far behind the Chinese.
Speaker 3:Is there is what what's the chatter within the space industry of, you know, we we've seen plenty of, you know, undersea cables being cut. How worried is the average space founder generally like, how worried are they about sort of sabotage? Is that something that that's sort of like a risk factor in a in a series c deck where they're where they're like, you know, you know, is that is that even the right question to ask?
Speaker 4:I would say, like, not too worried. And it's not to say that it could happen or anything and we should underwrite this, but it's like the the the thing that would be really bad is if, like, Russia basically, you know, nuked lower orbit, either that 93 nuclear weapon, and you had a bunch of, like, highly charged ion particles, you know, basically orbiting around, Earth at a much lower level than where you're like the Van Allen Belt is. Because it basically destroy everybody's Leo business. Right now, part of why Starlink works is they're low enough, in orbit that, the Earth's magnetosphere basically deflects the solar winds. So you're you're still relatively protected.
Speaker 4:If that all of a sudden becomes a very unprotected zone, you have a ton of radiation. Man, everybody's economics basically just blow up. Actually, one of the few that probably doesn't blow up is BARDA because radiation basically screws you on a day by day basis, and we don't need to be up there for very long. Mhmm. But anybody whose business case is built off of, like, being in space for a longer period of time, man, if the Russians launch a nuke up there, that'd be really hard.
Speaker 4:And I haven't seen any, like, how one would fix that problem if they did. Like, I don't I don't think that, like, there's even, like, a hypothesis for how to do that. Like, it is maybe some, like, really big magnets or something. I but I don't even know. It'd have to be, like, massive magnets up there.
Speaker 4:So I don't know if, like, the Russians detonated nuke. And I can see them doing it where, like, they just keep falling behind. They see Starlink helping Ukraine. They see that, like, you know, The United States is, like, winning this, like, you know, new space race, you know, sort of three point o. And, like, you know, Us and China are leaving them in the dust, and Putin is, like, dying, you know, breath.
Speaker 4:To just, like, screw it. Nuke space because it's, like, you're not killing anybody, but you're just tanking all the commercial space economies. That'd be tough.
Speaker 1:Like it. Don't like it.
Speaker 3:Yeah. It feels like most of the opportunities in space should be pursued by private companies that said stuff like thermonuclear radiation cleanup in low Earth orbit and, like, asteroid deflection are probably better suited for NASA and or sort of NASA private partnerships just because Varda, yeah, you'd be a good candidate to potentially, you know, save us from an asteroid, but it's not a good business model where you're like, okay. We have to, like, develop technology, maintain it, like, carry this team, but then maybe you never have to use it across thirty years. It's not gonna be necessarily a huge profit center.
Speaker 4:Yeah. I mean, I don't think we're so religiously libertarian at Founders Fund that we believe the government has no use whatsoever. So, you know, there is the occasional need for something that is, you know, of the public good, and asteroid deflection and thermonuclear cleaning is probably, you know, you sit up there with that. But, yeah, I mean, hopefully, you know, diplomacy is more effective than having to do the cleanup, you know, sort of part of it.
Speaker 3:Yeah. Makes sense.
Speaker 2:Well, this
Speaker 1:is awesome. I think we gotta wrap up, but, thanks for
Speaker 3:Closing it out.
Speaker 6:We'll have
Speaker 3:you for coming out.
Speaker 4:Oh, yeah. Thanks so much for having me, boys, and congratulations on a phenomenal launch day. Look forward to seeing success of TVPM calendar. Going on. Hey.
Speaker 3:We expect a cameo on the next video. It's already in the works. True.
Speaker 1:We'll hear
Speaker 3:that. You cameo in this video post. This video. Iconic post.
Speaker 4:Oh, yeah. Oh, yeah. I mean, look. Everybody needs an island vacation, but, you know, read off and,
Speaker 1:like, you really need one. You had a face cameo because because we used a clip from your call in. I wasn't talking about the tweet. You had two cameos, I guess, technically. Yeah.
Speaker 1:Oh,
Speaker 4:I had two cameos.
Speaker 2:You had
Speaker 1:two cameos because at at at thirty seven seconds, thirty eight seconds, you pop up for a second as an example of one of the guests that we've had. That's a double cameo.
Speaker 4:Well, I like my first cameo better
Speaker 2:than the last one.
Speaker 1:Your first cameo is good. But, yeah. A little bit of an Easter egg.
Speaker 3:Fantastic having you on.
Speaker 4:Goodbye boys.
Speaker 1:I'll see you soon. We'll talk to you soon. That was great. We