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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching TV band.
Speaker 2:Today is Friday, 05/23/2025. We are live from the Temple of
Speaker 1:Technology, the fortress of finance, the capital of capital. And, John. Yes? This is our last show in the studio.
Speaker 2:It is. It is. But the fortress of finance lives on. The capital of capital lives
Speaker 1:state of mind.
Speaker 2:It's a state of mind. It's a place on the Internet that we we bring. We create the fortress of finance, the temple of technology wherever we are. And soon, it will be in Hollywood, California, the future home of media and entertainment once we're done with it, baby. We're bringing media to Hollywood.
Speaker 2:We got a great show for you today, folks. We got a banger lineup of guests and topics. Wow. We really filled it out. I thought we had four people booked.
Speaker 2:Turns out we have seven now. It's great.
Speaker 1:I don't know how that happened, John.
Speaker 2:We're talking about the the information. They profiled us. Abe came down, hung out with us for a full day, wrote The
Speaker 1:allegations are extreme.
Speaker 2:Yeah. The allegations of bro culture over here are extreme. We'll talk about Apple's AI struggles, Sam Altman's trillion dollar AI device. There's a banger quote in the Wall Street Journal from Berber Gin. And then we got a whole bunch of guests, Jory from Linear, Zach from Curie, Lee Marie Braswell, former colleague of mine over, over at Founders Fund.
Speaker 2:Now she's at Kleiner Perkins coming on to talk about artificial intelligence, some of the seed investing she's been doing. Remember she was like a seed investor in Windsurf, I believe. Absolute banger.
Speaker 1:Absolute And
Speaker 2:we got Sam Lesson coming on. We got the founder of Lambert.
Speaker 1:The great thing, so Sam Lesson
Speaker 2:Yeah.
Speaker 1:Many people call him Jessica Lesson's husband. Yes. He usually goes by that Yeah. In most tech circles. Yeah.
Speaker 1:So Jessica Lesson's husband is coming on and and this was booked before we knew if the information was gonna be a hit piece or a puff Yeah. And so it could have been Yeah. We don't, know, still unclear exactly where it landed but Last time. Could have been a very Yeah. You know?
Speaker 1:Could have
Speaker 2:been extremely confrontational.
Speaker 1:And it still could get you.
Speaker 2:And and what I think the first or second time he came on, Jessica Lesson was in the background and kind of stopped by and said, hey.
Speaker 1:She said hi.
Speaker 2:Hi. And you know, if this if this piece hadn't gone down the way it did, we could have been screaming on the call, and she would have overheard us berating her husband about what happened. But Yeah. Fortunately, the piece
Speaker 1:turned out pretty PC later. And I'm excited to talk to Sam. Then One of greatest Yappers of all time.
Speaker 2:Bobby and Orin also calling in at two and 02:15. And so we're gonna be going late. It's a three and a half hour show. Let's do it.
Speaker 1:They said, hey. It's Friday. Are you gonna take your foot off the gas?
Speaker 2:Absolutely not.
Speaker 1:Absolutely not. Absolutely not.
Speaker 2:Anyway, let's read through how the technology brothers seized Silicon Valley. The big read in the in the weekend section
Speaker 1:of And I thought this image, by the way, if we can pull it up, I thought it was My immediate thought was AI, and you think it's handcrafted. You think they went potentially up the extra mile.
Speaker 2:AI in here, but then there are also things in here that are collage. There's a lot of Photoshop.
Speaker 1:Kinda like the TVPN.
Speaker 2:Might be AI, but the faces are just photos that have just been tuned up. And then
Speaker 1:I like how they
Speaker 2:made me the number overlay. That is not AI.
Speaker 1:They made me quite a bit wider than than you Extremely wide. Not my exact build.
Speaker 2:Well, so so the so the screenshot that's up on the stream is the is the real one. But for some reason, if you on the information, there's a like an HTML bug. And so if you shrink down the website, I don't know if we can pull up the one from the PDF, but it makes us look even wider. And so
Speaker 1:How do you have a PDF, John? Why do you have a PDF?
Speaker 2:I always make a PDF of everything, of every article so that we
Speaker 1:can read through the show. Paid stuff.
Speaker 2:Yes. I am a I am a paid subscriber of the information. PDF allegations are flying around
Speaker 1:Yep. Today. Anytime that there's
Speaker 2:an article that people wanna read, it shares around. But, yeah, he says, at a time when when tech has been at loggerheads with the traditional media, the industry elite have gladly accepted a warm embrace from a pair of insidery talk show hosts, John Coogan and Jordy Hayes.
Speaker 1:A warm embrace. Yeah. That's what all I mean, part of it is that we we typically don't wanna have someone on the show unless if we saw them, we'd give them a warm embrace. Yes. I think that's generally accurate.
Speaker 1:We try to sort out and not have people on Yeah. That we wanna, you know, get into
Speaker 2:Yeah.
Speaker 1:Conflicts with. At some points, we'll have people on the show that we Yeah. Disagree with. But
Speaker 2:But in general, the the like We're trying
Speaker 1:to have people on. Yeah. We generally hire people on
Speaker 2:just to fight Interesting. Argue. You know, we we wanna just hang out with our friends.
Speaker 1:Yeah, if we get to the point where we're getting ultra contentious, we'll probably move to like a pay per view model for that. Oh yeah. So if you wanna see Yeah. Keith Raboy fight with a journalist. Sure.
Speaker 1:Know, potentially in a physically not not just on the timeline. We could set that up and
Speaker 2:Yeah. I'd love to.
Speaker 1:But anyway, so in recent months, John Kugen and Jordy Hayes co hosts of TVPN, a daily tech news show that has captured the attention of Silicon Valley's Investors and founders have followed the same morning routine. The two men meet in Downtown Los Angeles at a members only Jonathan club to work out then sonnet together while reading print copies of the Wall Street Journal.
Speaker 2:Fact check true.
Speaker 1:Fact check true. You have your sweaty copy I do. On the table today. It's real. The image of Coogan thirty six and Hayes twenty nine schwitzing away in such a manner I see.
Speaker 1:Is well a little ridiculous in this day and age. And I posted that God forbid men have hobbies. There's nothing ridiculous about two guys meeting up at a member's club Yeah. And having a sauna and reading reading the journal.
Speaker 2:And he thought I was joking with him, but I was dead serious that we had actually been in the in the sauna just a little bit earlier.
Speaker 1:Yeah. You quote in the article. This was in the sauna Yeah. Pointing to a bedraggled a section of the journal besides on the club's dining room table. It has sweat all over it.
Speaker 2:Yeah. There's the wide version of us because it's been stretched. The extra wide. Wider. It's great.
Speaker 2:Yeah. So I had to prove to him. I actually did invite him to the morning workout. I said, meet up with us at 06:30. It's chess day.
Speaker 2:We'll we'll we'll hit some PRs on the bench, and then we'll go in the sauna. We'll talk. We'll get breakfast. He was he was traveling around, couldn't make it, he just came to breakfast. So I had to prove to him Yeah.
Speaker 2:By showing him the sweat
Speaker 1:on my Not the first time we've invited somebody to a workout though. It's the best. And then had them come up with some range of excuses. Oh, I'm not gonna be able to get there at six.
Speaker 2:Yeah. Yeah. I'm sorry. It is a high bar, but yeah. We don't do coffee meetings.
Speaker 2:Naval says set your opportunity cost extremely high.
Speaker 1:He said meet like a lion. Meet like a lion. Be hitting bench when
Speaker 3:you're meeting
Speaker 2:with something. No. Vol is the original the lion does not concern himself meme. Like, that's where that came from, basically. Work like
Speaker 1:a Basically. He doesn't concern himself with much.
Speaker 2:He doesn't. He doesn't concern himself with email. Yeah. He doesn't concern himself with coffee meetings. But the gym meeting, it's highly efficient.
Speaker 2:Actually, I mean, I I I Strauss Zelnick, the CEO of Take Two Yeah. Owns GTA, putting out GTA six soon. He is famous for doing workouts and doing workout meetings. And so I read that book, and I kind of adopted that and started doing, workouts with Ben and talking to him about the business while we're working out, and it's just a fantastic flow.
Speaker 1:It's the best way to hang.
Speaker 2:So they go on he goes on Abe goes on to write. Kugen and Hayes livestream TBPN, which they originally christened the technology brothers as a knowing nod to the concept of a tech bro on X and YouTube from 11AM to 2PM Pacific and published the recording on Apple Podcasts and Spotify. When I found them sitting down to breakfast at the Jonathan Club, they had mostly prepped their opening commentary on the news. Airbnb's revamp, the Trump administration's proposed changes to chip AI chip exports, and they had a number of guests booked, such as Founders Fund, Delian Asperuhov, Lux Capital's Josh Wolfe, and Eugenia Cudia Cudia, who start up Replica AI, hopes to develop chatbots that can serve as human companions.
Speaker 1:So here's where it gets interesting, John. Yes. He says, like the show's audience, the guests are attracted to quote unquote TBPN.
Speaker 2:Yeah. Like it doesn't it's not a real thing.
Speaker 1:Like it's not a real thing. Yeah. As a safe refuge from the mainstream media. Yeah. One that projects an unabashed, unapologetic enthusiasm for tech.
Speaker 1:I think this is my best line in here. I'm glad Abe included it. We genuinely love the private markets, the venture capital industry, the startup industrial complex. And I
Speaker 2:do So so so there's something interesting here. TBPN is in quotes, but I'm I'm on a different article from the information, and it and it reads, Jim Kramer, CNBC's mad money host, took a swipe at our report today, and CNBC isn't in quotes.
Speaker 1:Why is it?
Speaker 2:That's so interesting.
Speaker 1:I wonder if it was just bug in the in the Oh, it could be a bug.
Speaker 2:In the CMS, in the content management system. Maybe they should switch content management systems.
Speaker 1:I like If
Speaker 2:they're making if bugs like that are sneaking it into articles. Abe's our boy.
Speaker 1:Yeah. And I'm gonna just I'm I'm gonna assume that it was just an accident.
Speaker 2:Probably just a mistake. Probably just a mistake.
Speaker 1:Since TVPN debuted last October, Hayes and Kueger have warmly welcomed investors from pretty much every major firm venture venture firm in existence.
Speaker 2:Let's go.
Speaker 1:We're Switzerland. Switzerland over here. A marker of the podcast widening appeal, Sequoia, Kosla, Lightspeed, I could go on. A week or so ago, they dispatched one of their four producers to Las Vegas to set up a mini studio at Andreessen Horowitz's annual investor day summit where the firm's executives could chat about tech, the news, and what they were presenting to their investors, a level of access no one in regular media would ever get. Thank you to Eric and the whole team at Andreessen for making that happen.
Speaker 2:And I wanna do more of those. I I I'm Yeah. Talking to Koslo about that. I think that's like an interesting thing. The the sit down with like the full partnership to get the full scope of like how everything fits together.
Speaker 2:Because most founders, even in my career, have interacted with like every fund, but usually just a single partner. And so, you know, you usually have this very like point, like maybe you've listened to Mark or, and then you've interacted with, you know, David George on a deal or David Haber on a deal or something like that. It's rare to be able to see, like, all in one. I I I like the way that that came together, so I'm hoping to do more of those.
Speaker 1:Anyway, so it it goes on. He includes TBPN in quotes again, which is
Speaker 2:TBPN is in quotes every single time it's listed.
Speaker 1:And the information includes TBPN in Anyways, he goes on, talks about some of the guests that we've had. I thought this was funny. Augustus Rico, who's startup Rainmaker Technology has come on the show. Has a sky high dream of commercializing cloud seeding. I like that.
Speaker 1:A process of adding chemicals to the atmosphere to increase precipitation.
Speaker 2:He's a good writer. Sky High Dream. It's a bit it's it's it's a good line. As Hayes and Kugen have won attention from a swath of the technoradi and have achieved a constant social media virality, their consistent social media virality. Their audience has remained incredibly niche.
Speaker 2:While they see X as their main platform, they have just about 130,000 followers on their accounts and the one belonging to the show. On YouTube, TBPN has only around 7,000 subscribers. It's weird to be, like, incredibly niche, a 30,000 followers. Like, how many you got, Abe? How many
Speaker 1:Hey. Let's let's pull up
Speaker 2:Let's pull up
Speaker 1:Let's go analytics for analytics. Now let's go analytics for When
Speaker 4:was the
Speaker 2:last time you dropped a 20 k banger on the timeline? Let's check it out. Let's see. Let's see how wide. You know, Jordy has a hundred thousand likes on a post.
Speaker 1:50.
Speaker 2:Hundred and 50 k likes. Is that niche?
Speaker 5:Is that
Speaker 1:is that niche?
Speaker 2:Oh, you know that my Xi Jinping video on YouTube has 3,000,000 views? You know that my analysis of Mark Zuckerberg's metaverse attempts has 8,000,000 views? How niche is that? How niche is that?
Speaker 1:No. We're niche. We're proud we're proudly niche.
Speaker 2:Proudly niche. Yeah. I mean, is actually something we think about is like is like, there are obvious TAM expanders. Politics is the obvious one. And we've and we've deliberately said, we're not going to try and TAM expand.
Speaker 2:Is Abe watching?
Speaker 1:Abe's watching. He says I demand a rebuttal.
Speaker 2:Should we let him call in right now?
Speaker 1:Yeah. Let's have him call in.
Speaker 2:Okay. Send him the link. Send him
Speaker 1:the Abe,
Speaker 2:come on in. Demand a rebuttal.
Speaker 1:Come on in. Anyways Okay. They have no investors and profess to have zero intentions of raising capital, less those investors
Speaker 2:You didn't mention our incredibly complex corporate structure because we do have a nonprofit Yeah. I know why did. LLC that feeds into a c corp.
Speaker 1:That feeds into labs which
Speaker 2:is of course owned by Wilmanitis. Wilmanitis. Wilmanitis.
Speaker 1:I I This was a fun quote which I stand by. We could go out and within an hour I guarantee you we could raise probably like 15,000,000. And I believe that would destroy us.
Speaker 2:I think that's true.
Speaker 1:We very intentionally not raised
Speaker 2:would be your final party round.
Speaker 1:The final party round.
Speaker 2:The final party round.
Speaker 1:If you pull you.
Speaker 2:Because, I mean, realistically, every we could get everyone, but it would it would very much change it would very much change the dynamic of the show. Yeah. It would be it would be less fun. I asked Ramp CEO Eric Lyman what he found so appealing about the show, and he likened their approach to how ESPN chronicles sports where SportsCenter has players, coaches, and games to celebrate and explain TBPN as founders, investors, and developer conferences. They're they're able to bring to life the personalities, the play by play, and capture the zeitgeist.
Speaker 2:Thank you, Eric. That's a great quote. That's exactly what we're going for. Coogan Hayes often hear themselves compared to ESPN commentators, but the analogy is sort of lost on them because putting a major dent in their broken die broke credentials neither watches much sports content. Today's the natural comparison is to Clubhouse, an audio social media app that was popular for a moment during the pandemic.
Speaker 2:We've taken what the magic of early Clubhouse was where you could hear an interesting interesting investor or founder talking in real time about what was happening that day, what's in the news, and turn that into a show. Ultimately, TBPN allegedly Allegedly. Exists at all if it's a real thing, hopes to better capitalize on the same broad truth about tech's relationship with old school media that underpin Clubhouse. More and more Silicon Valley has come to distrust traditional journalists perceiving them as holding an unshakable bias against the industry, part of an undeniable broader shift in American culture against the established media. Many within tech have tried to build their own in house media operations or have rapaciously thrown millions of dollars that would be disruptors like Clubhouse.
Speaker 2:Most such efforts have flopped, mounting to little more than lame public relations. Huguen and Hayes seem to have found their sweet spot. They maintain just enough independence from their subjects but feel none of the pressure for critical coverage most journalists in their position would. They also get far on their twin blessings of easy charm and boyish good looks. And now this is interesting because charm's a little it's a little bit of a charged word in my culture.
Speaker 1:Totally. Irish culture.
Speaker 2:Yeah. I'm I'm Irish obviously.
Speaker 1:Those who don't know, Hayes and Coogan
Speaker 2:We're both Irish.
Speaker 1:Scott's Irish.
Speaker 2:And so, you know, Saint Patrick is obviously a famous snake charmer and and charmed all the snakes out of out out of out of Ireland. And so it's it's it's kind of like
Speaker 1:racial humor. This like Is it racial?
Speaker 2:I don't know racist, it's racial. It's definitely racial. And so Yeah. It's a little bit edgy. But I I mean, I appreciate it.
Speaker 2:It's fun. We're in the post woke era. Totally. Anti woke era. Totally.
Speaker 1:And so If Abe wants to go there,
Speaker 2:Abe can go there. He can go there.
Speaker 4:We can
Speaker 1:go charm for charm with anyone.
Speaker 2:We can go charm for charm with the best of them. It's just a little crazy because I haven't
Speaker 1:been called
Speaker 2:a sneaky charm. Normally think of Potato potato either.
Speaker 1:Think of information Drunk Nick. Editor as an edgelord.
Speaker 2:Yeah. No. You don't. But but he snuck in. Yeah.
Speaker 2:It's good.
Speaker 1:It's a little
Speaker 2:it's a little a little dig. Dig. Little dig. Okay. Oh, yeah.
Speaker 2:I saw him chugging Guinness passed out like a drunk Irishman. You know, he didn't go that far.
Speaker 1:He didn't go that far.
Speaker 2:He stepped it back. Yeah. But he still threw in a little bit of the Irish a little a little dig of the Irishness. Yep. Makes sense.
Speaker 2:They have an interesting they have an interesting voice that I don't think many people could pull off, said Ashley Vance, the Elon Musk biographer and former New York Times and Bloomberg journo. Journo? They used journo? I thought that was our word for them.
Speaker 1:And Bloomberg's He's
Speaker 2:taking back. Abe's taking back Wait.
Speaker 1:That's actually interesting. That's crazy. He he highlights earlier no. He highlights earlier in the article that we took back tech bro.
Speaker 2:They're taking back journo.
Speaker 1:And and but, but, you know, Tech Bro was a slur. Slur. We took it back as technology brothers, but he's taking back journo.
Speaker 6:Yeah.
Speaker 1:He's kind of inverting it. Yeah. He's saying, I'm not a journalist, I'm a journo.
Speaker 2:I'm a journo. It's kind of cool. I like I'm into this.
Speaker 1:It's kind of cool. Journoism is back.
Speaker 2:Yeah. What is it? What is it kibbitz? Do you
Speaker 1:know what that is?
Speaker 2:Because it said, Ashley came on for kibbitz. Look on and offer unwelcome advice, especially
Speaker 1:A chat.
Speaker 2:Chat. Oh, a chat. Okay. So he came on for a chat. Yeah.
Speaker 2:And he's coming on. He's coming back next week. He's been traveling, shooting a movie. Very cool stuff. I don't know if you saw his cinema rig, but he's got, like, 25 different cinema cameras.
Speaker 2:It's amazing. I'm very, excited to see what he's doing. I don't wanna leak too
Speaker 1:much
Speaker 2:of
Speaker 1:the time. Is Abe is in the temple. He is? Okay. Let's him in.
Speaker 2:Abe, we gotta get to the bottom of this. Abe? Okay. We're following him in. Wow.
Speaker 2:Abe on TBPN for the
Speaker 1:first time.
Speaker 4:Alright. Abe for a crowd.
Speaker 1:I could
Speaker 5:go into exactly why, you know, CNBC doesn't get quotes and you guys do, but that seems boring. Let's talk about It'll be more fun.
Speaker 2:Wait. Wait. Hold on. Hold on. Editors, the the Chiron's way wrong.
Speaker 2:Can we put the information in Can we the information in quotes?
Speaker 1:Put the information in quotes. We have to add quotes. Hey. It's fantastic to have you on. We talked about this earlier.
Speaker 1:We knew we knew I mean, Jessica Lesson's husband was gonna come on later later today and it would have been a funny kind of dynamic if this had been a hit piece, which we obviously didn't know until around 9AM when you when you hit publish. So it this will be a fun show end to end.
Speaker 2:Yeah. It was great. I I I don't know. Is there anything else that yeah, I mean, you've been listening to our analysis. Anything else you need to get off your chest?
Speaker 5:No. I I I think the story, you know, is a piece of fair and accurate journalism. And, you know, you guys are you guys are doing Richie do best, which is, you know, common commentating on the news, on the breaking news about the Schenology Brothers.
Speaker 1:Wait. I have to ask. Did you intentionally use the word journo instead of journalist when talking about Ashley Vance?
Speaker 2:Yeah. Because we think of journo as, like, a tech bro style, like, slight dig. Like it's almost a slur for journalist. It's an
Speaker 5:emotional You know guys, in the way that you're funny on camera
Speaker 2:Yeah.
Speaker 5:I also try to be funny in the way I write. You know, just to, you know, make the make the make the jokes go around.
Speaker 1:No. You nailed it. You
Speaker 2:nailed it.
Speaker 1:I mean, it got us. We're we're cracking up.
Speaker 2:It's great.
Speaker 1:It's really good.
Speaker 5:I'll be back in LA soon, and I'll take you
Speaker 7:up on the sauna.
Speaker 1:Let's do Fantastic.
Speaker 2:We can't wait. Yeah.
Speaker 1:We gotta get a big one in the new studio. Like, we gotta, like, basically dedicate 2,000 square feet.
Speaker 2:Yeah. It's just sauna.
Speaker 1:A single sauna.
Speaker 2:For sure.
Speaker 1:Abe, thank you for the fun and fair coverage Yeah. Of what we're doing.
Speaker 2:It's fantastic.
Speaker 5:And likewise, you guys are a good hang. Don't be a Don't be too nice to Sam.
Speaker 1:Okay. Okay. We won't. Yeah. We'll we'll be rough on him.
Speaker 2:We'll put him
Speaker 1:in his sweet zone.
Speaker 4:Bye.
Speaker 1:Awesome. Thanks for jumping on. See you. Look at that. Look at that.
Speaker 1:Media technology. Yeah. All together. Just growing down. It's great to see it.
Speaker 2:They give a little bit of our background, but then go on to talk about how we met. Mutual friend. Do they actually not they didn't
Speaker 1:They didn't name Will Mandus.
Speaker 2:They didn't name it Will Menidas. Saw an opportunity for tech focused podcast that could analyze industry news with a light irreverence and wasn't tied to a single company or venture firm. Last fall, they had enough free time on their hands to record a couple test episodes when they attended Peter Thiel's Heredicon at the Faena Hotel.
Speaker 4:Oh, they put
Speaker 1:founders in quotes.
Speaker 2:No. They sought out feedback from David Senora, host of the popular Founders podcast, if you could call it that. Wait. Did did Abe actually tell us why they put it why he puts it in quotes? I don't think No.
Speaker 1:Said he said it wouldn't be fun. He said it wouldn't be fun, which is Yeah. Yeah. Which is fair.
Speaker 2:No. I mean, makes sense. You're introducing this to the first time to your audience. Like, we're given a hard time. But like Yeah.
Speaker 1:Called TBPN.
Speaker 2:Yeah. Yeah. Yeah. It's it it it like like if if TBPN becomes, like, driving news and the information months from now has written about comments that were said on TBPN and they're citing us, I imagine that we will become unquoted. Like Yeah.
Speaker 2:We will we will earn the removal of
Speaker 1:our quotes. Earn your stripes.
Speaker 2:Throwing off the shackles of the quotes. I'm excited. That's that's definitely on the on the vision board right next to TBP on Eroan Smoothie. You heard it here first. We're working on it.
Speaker 2:Life goal. David Sunderer previously advised Coogan on his YouTube channel. This is funny because, like, it was very, very informal, but I did learn a ton from David. I remember the very first time I I talked to him, I was doing my YouTube channel, like, very much part time on just, like, one day a week on the weekend. When I was bored, I just put up a video, and I did one a week.
Speaker 2:And it was growing, and it was doing well. And I was just like, wait. Like, you have this podcast that's like this is pre deal this is pre invest, like, the best partnership and pre meeting Patrick and stuff. So the show was pretty small at that time. And I was like, wait.
Speaker 2:You do this, like, full time? And he was like, yeah. And he swore a
Speaker 1:bunch of one of the first advertisers on Founders podcast
Speaker 2:I had no idea.
Speaker 1:For Capital. No way. Yeah. Was, was like one of the first one or two. Yeah.
Speaker 1:And it, I'd, I'd certainly won't mention it here, but, and and the funny thing is I'd actually reached out to David and I really didn't I'd I'd I'd listened to the first episode, and I reached out to him, and I was like, would you This was this was at a time that was like Yeah. Every tech company should be a media company Sure. Which I don't agree with anymore. But I was like, would you consider like joining? Like he told me It was sure.
Speaker 1:Ad rates and I was like, well what if we just like acquired Yeah, founders. And in in hindsight that was like such a ridiculous thing to ask because David never under any circumstances would have done that Yeah, or anything like it. Nor would it have been good for the show. But yeah, at that time it was like very, very
Speaker 2:Yeah. You know. Yeah, no, I remember getting on the phone with him and he was telling me like, I was like, do you do this like full time? Like how do you even make that work? And he swore a bunch.
Speaker 2:He was like, absolutely. Like, I I don't do anything else. This is all I do. And I was just, like, super impressed that he'd been able to make this work. And it is like a niche show.
Speaker 2:It certainly was at the time, but he obviously found a really high value audience and was already monetizing very well. At that point, he had like a paywall for some of the episodes. He was starting to do some advertising. He's evolved the business model a ton and probably
Speaker 1:But it was
Speaker 2:very humble. Hundred x.
Speaker 1:But, yeah. Product quality was incredible. Yep. But he was like, it was
Speaker 2:It was just him. It just No employees. Nothing like just like building, building, building. So it was very, very cool. And so, yeah, I mean, I learned a lot from him and kind of kept growing the the the channel and then eventually evolved into this.
Speaker 2:He thought that the two shared natural chemistry and encouraged them to go all in on the concept, which we've told about which we've talked about before. For a model, he suggested they look at sports commentator Pat McAfee. Senra admires McAfee's always on persona. What is Pat doing right now? I bet he's livestreaming, he said.
Speaker 2:And I wasn't exactly sure because we've we've looked to Pat for, as a as, like, a a role model in in many ways, but I wasn't exactly sure where that came from. But I thought the most interesting lesson that I learned from David was that he actually did not tell us you guys should livestream. He told us you should take this
Speaker 1:Go harder.
Speaker 2:A hundred x more seriously. You should go harder. You should go full time on this. And what was interesting is that the we were doing a weekly podcast with no guests. And once we started taking it way, way more seriously and working on it constantly, then switching it into a daily show, switching it into a live show, switching it into a guest led show.
Speaker 2:All of that just happened very naturally. He didn't tell us tactics, he just told us exactly what he what he says on every episode.
Speaker 1:Even we we left Miami and we decided to go to two or three days a I think we had
Speaker 2:three days a week.
Speaker 1:Yeah. Maybe it was three days a week. But then I remember the realization that we would stop recording Yeah. And and we would be on X like an hour later. Yep.
Speaker 1:I'd be like, I wish we were doing the show tomorrow. Yeah.
Speaker 2:And then we just eventually I even decided to
Speaker 1:go to five days, then we decided to go live, then we decided to add I
Speaker 2:even remember talking to you about like, maybe we should do like, one day a week, five hours, and then split slice it up so we're releasing one hour per day.
Speaker 1:Every podcast weekly job.
Speaker 2:And it was a terrible idea. I'm so glad we didn't do it. It's it's it's a way, way better way better format. And so, Abe goes on to write, soon Kugen and Hayes landed on an early gag that helped them gain attention, print out posts from x from founders and investors, then dress up in suits and film themselves with top end four k cameras discussing the posts, a very high touch approach to assembling retweets. Later, they started to share the clips and tag the the post's authors, on x, and the authors would often frequently pass on the clips themselves, giving Coogan and Hayes some of their first virality.
Speaker 2:The pair set themselves up on the Tenth Floor office that Coogan rented in the Jonathan Club, hired a small video production crew.
Speaker 1:Who they sometimes refer to as just
Speaker 2:The guys. The guys. Well, since, well, they're all young men. And over the course of the next several months, the TBPN hosts and the guys have adopted a steady rhythm. When Coogan and Haves go live, two of the guys control what appears on the stream, including the Chyrans, the bit of text below.
Speaker 1:Funny. I didn't even we didn't even know the the term Chiron for, like we had been doing a Chiron for quite a while. I
Speaker 2:knew it. I I knew to explain it to basically everyone on the team because we all learned. But I had in fact heard the term before. But yeah.
Speaker 1:Do have a background in big television jobs that you don't know about?
Speaker 2:No. I've been in NAB. I've been a nerd for like production for several years. Yeah. And so I've I've been, like, loosely familiar with all this stuff.
Speaker 2:Watched a lot of YouTube videos explaining how churches do livestreams.
Speaker 1:Oh, yeah.
Speaker 2:Because megachurches are Elite. Delivering at a level that is equivalent to Fox News on one one hundredth of the budget. And so you can just go on YouTube and search church live streaming setup, and they will have tested everything, and they share all the information. It's a bevy of resources. It's it's a bit it's fantastic.
Speaker 2:And some of them do, like, virtual productions. It gets crazy. Anyway, they tried they tried to make these funny. One example, venture capitalist yaps about venture capital. I'm excited to share a screenshot of of Abe Brown, writer at the information.
Speaker 2:Did you see the final chyron?
Speaker 1:So good. So good.
Speaker 2:Steady crawl of the show's sponsors appear next to the Chirons, along with a ticker available of available polymarket bets with Kugen and Hayes see as telling indicators of market sentiment and their audience's interests. That's true. Another of the guys spends the entire show entirety of the show cutting up clips to publish across social media as quickly as possible. Fourth, Ben Kohler. Let's hear it for vice president Ben who works with Kugenai's YouTube videos, serves as head producer.
Speaker 2:On a traditional TV show, a producer would normally pre interview a guest. Sounds really boring. Yeah. To help both the guests and the But Kugen and Hayes prefer to wing it. And since they're never brandishing any sort of gotcha question, we'll hit you with some gotchas.
Speaker 2:We're just gonna do nerdy gotchas about scaling laws and and Gotcha. And build out timelines and and and and algorithms. We're not gonna ask you about your personal life or your politics. We do not
Speaker 1:discuss politics.
Speaker 2:The informality doesn't discomfort the guests. There's no prep. They just sent me a Zoom link, I joined, said Shom Sankar, Palantir's chief technology officer and a veteran of many CNBC hits. To fill the guest spots, Kugen and Hayes tapped their Rolodexes and industry connections. Unsurprisingly, they've started to get inbound requests.
Speaker 2:We're at the point where we're getting 20 pitches a day from PR firms, Kugen said. We turned down 95%. His rejection method is simple. He goes to x and checks whether they've shared re what they've shared recently, their number of followers, and whether they follow the same people. Yeah.
Speaker 2:I'm generally looking for, like, are they tapped into the news? Are they following technology stories? Are they, you know
Speaker 1:I wouldn't say this is this is one part of the process, but certainly we've had people on that don't have a presence on the X and we actually want to do a lot more of Yeah.
Speaker 2:Totally. But but but if you're getting a pitch instead of warm introduction. Totally. It's very hard to get a pitch from someone that's very dry and then because every once in a while there's someone who who is interesting that just happens to have a a stale PR team that's kind of pitching broadly, and that you gotta kinda just deal with that. But most of the time, if there's just some stock, like, you get these big emails with all these bullet points of all everything the person's accomplished, and then they link you to their LinkedIn account.
Speaker 2:You search them on x, like, they're not really in the conversation. And if they're not in the conversation, it's gonna be hard for them to join and have a conversation.
Speaker 1:And that's not bring something really interesting.
Speaker 2:Come on with talking points. And
Speaker 1:so Yeah.
Speaker 2:It's pointless.
Speaker 1:Or if they come on with LinkedIn takes from
Speaker 2:It's not good.
Speaker 1:Two months ago
Speaker 4:Not good.
Speaker 1:Gonna be rough.
Speaker 2:Hayes and Kugen delight in their shtick for the show, which includes opening bottles of Dom Perignon to markets growth. A constant tongue in cheek showing of ramp, ramps, forever, ramp. Which makes expense account software that would exasperate many madmen, but not us.
Speaker 1:Not us.
Speaker 2:Not us. Switch your business to ramp.com. Save time and money.
Speaker 1:Just do it.
Speaker 2:We had a whole running gag with Abe the entire time. We probably pitched him ramp seven different times.
Speaker 1:At least.
Speaker 2:At one point, I introduced him to Eric over at Ramp, and I and then I immediately followed up, acted like I took him off the email thread, and told Eric, here are the talking points we're sticking to.
Speaker 1:You gotta post that.
Speaker 2:I gotta post that. And and it was just a whole bunch of details about Ramp and how
Speaker 1:Abe, at one point, said, guys, I don't care about expense management software. Please stop pitching me. Something to that effect. And we said, well, I you know, a lot of Ramp customers felt the same way at some point. But once they understood just how much time and money they could sit
Speaker 2:We had so much fun with it. It was great.
Speaker 1:So much fun. Thanks for thanks for being a good sport.
Speaker 2:Yeah. He was good sport about it.
Speaker 1:A preference to always appear in suits, their visual trademark. Coogan gets his suits from a tailor Never find whose identity he wouldn't reveal. Hayes likes What's the name the user? A New York based I guess they're a brand now, but they are primarily a tailor. It's Laura Piana fabric.
Speaker 2:You assured me.
Speaker 1:I guess me and Jamath have that in common. Watch peeking out from underneath the
Speaker 2:suit. Doxed. They doxed your watch.
Speaker 1:They doxed my watch.
Speaker 2:Doxed my watch. The suits are a little dig at Silicon Valley's preference for the inform informality of Cotopaxi, which is that how you pronounce that?
Speaker 1:Never heard that I've never worn it.
Speaker 2:Who can hope they serve another purpose too? It's gonna make it easier to appeal to a public company CEO who's running TBPN. Oh, we got single quotes now. We're upgrading. Oh, because it's inside double quotes.
Speaker 2:He still hit the quotes. He us. Was so excited that we were halfway
Speaker 1:to no Yeah.
Speaker 2:We were doing double quotes. Then we're just getting single quotes. The next thing is no quotes, by his PR team that's maybe more conservative and more risk averse, he said. So when they pull up an example, they see a very clean package and everyone's in suits, and that's true. I I want to be a place where, big public company CEOs can come on.
Speaker 2:It doesn't feel like we're disheveled not taking this seriously. It needs to be brand safe even for big tech companies that want to, you know, up uphold a very serious brand standard that they would that they would feel comfortable on Bloomberg or CNBC. They should feel comfortable here as well. The external appearance That's
Speaker 1:the external appearance at least. This is when he's putting us in the truth zone. Putting us in the truth zone, Abe. Internally, the atmosphere is decidedly informal. When the show wrapped on the day one on the day I was at the Jonathan Club, Kugen and Hayes casually stripped down to their boxers in front of me and the crew changing into t shirts, shorts, pants, and sneakers and then issued a few instructions on finishing the day's production and preparing for the next day's show.
Speaker 1:Well, he got us, John.
Speaker 2:We're schwitzing.
Speaker 1:There is we we do at times wear normal clothing.
Speaker 2:We do. Oh, waving goodbye to the guys. We loaded into Hayes Mercedes Benz G Wagon. Wow. He didn't even he didn't even say the most important part.
Speaker 1:It's an AMG.
Speaker 2:It's an AMG. It's a g 63. Yeah. It's a really important detail. Leaving that out, that feels intentional.
Speaker 2:Trying to take you down a peg. Could be a g five fifty. Yeah.
Speaker 1:Like it though. It's more it's more subtle. Yeah. Yeah.
Speaker 2:It's a dude. He's just leaving it open. Could be any type of g wagon.
Speaker 1:Yep. And we so we drove Abe over to Hollywood to see our new 4,000 square foot studio that we just signed a lease on. Abe says, it dwarfs the size of the current set they have in the Jonathan club. We are in a very small space on this And they're looking forward to the increased flexibility it can give them including the ability to get up and walk around while streaming and basically screaming too. Yep.
Speaker 1:Right now, we basically sit down for three hours.
Speaker 2:Three hours. We get up for like a minute in between, but the energy will be so much better when we can stand. It's gonna great.
Speaker 1:It's gonna be great.
Speaker 2:They'll also have the opportunity to host in person guests, something we're very excited about. We have a bunch of people lined up, and we should be able to make those those in person sessions really special. And I asked them about the Dream Bookings. Of course, we've talked about this before. Our Dream Bookings are the magnificent seven, like all of them.
Speaker 2:We want the CEOs of of Apple, Microsoft, Alphabet, Amazon, NVIDIA, and Meta Platforms, and Tesla. We want them all the Thanos glove of of, of technology leaders. We want them all on the show. So if you know somebody
Speaker 1:who gets an introduction deep,
Speaker 2:care for it happen. For
Speaker 1:all of them.
Speaker 2:But we still have a lot to do on the production side. We want to be a fantastic show. We want their first appearance on TBPN to be memorable and Cinematic. And cinematic and and and enjoyable. And and I I think, you know, and most importantly, I think it's less about, like, asking like the hard hitting questions.
Speaker 2:It's more like what are the questions that the investing community actually wants to hear? How can we dig through those Yep. And drive those questions that move markets? That's what's most important. Yep.
Speaker 2:And so the the the the questions are less gotchas about random things that don't really matter to earnings, which is what a lot of the news has become in tech and business because the audience are not investors, we wanna focus on the questions that investors actually care about, which is more often, how's CapEx looking? Which is like, is that a gotcha? Well, for some companies, it might be. If their CapEx is looking rough, it might be.
Speaker 1:Satya says we're happy to be leasers.
Speaker 2:Is that is hitting him with a question about his pivot away from data center build out to gotcha? Like, certainly not to a normal person who doesn't invest in the stock. Right? But to someone who really cares and owns a lot of Microsoft stock, it's probably pretty important. Anyway, it might be easy to design a show that would appeal to one or two of them, but it would be difficult to do, one that could attract the entire set.
Speaker 2:They've all done podcasts, but there's no podcast that has done all seven and, says Coogan. That's me. On the drive over, Hayes mentioned a dream prop for their Hollywood set. He and Coogan have already already have a small gong in their Jonathan Club that they ring on the show when talking about a company's notable achievement, but he would like to buy an even bigger gong looking around at the Hollywood studio. He could see how nice a an extra large version might look.
Speaker 2:Yeah. We finally have the space. It's gong. He said. Oh, what a fun place.
Speaker 1:Oh, I can't wait. We need a 50 foot by 50 foot gong that requires a group of people to stop it from bringing when you drive a car into the gong. We do. We're working on it.
Speaker 2:What should we move on to?
Speaker 1:I mean, the main thing we have to cover. So yesterday x was a nightmare. Yep. DMs weren't working for a lot of the day, was rough Yep. For us on the show.
Speaker 2:Currently, there was literally a fire Yeah. In the data center.
Speaker 1:So yeah. A fire broke out Thursday morning Yeah. At a data center in Hillsboro, Oregon leased by Elon Musk's x, forcing an extended response from emergency crews according to multiple sources who spoke to Wired. The sources required anonymity as they weren't authorized to speak publicly about the company. Firefighters arrived at Hillsboro Technology Park in a suburb west of Portland at 10:21AM.
Speaker 1:Man, John, Portland, Oregon, vandalize you think this is you call an arson?
Speaker 2:I have no idea. I don't even know how you how you vandalize or or commit arson in a data center. They seem
Speaker 1:be locked Yeah. But the, every time I see Portland in a headline in text, it's some type of This
Speaker 2:is pretty advanced stuff to figure out where the data centers are.
Speaker 1:Okay, I'm sorry. If you're a extremist and you want to bring a bunch of gas
Speaker 2:Will Minidos posted that whole thread about shooting the transformer and taking down all the electrical infrastructure and how like you can basically take out the energy infrastructure with just small arms. So like an AR 15 shot at a transformer can take off a whole a whole a whole piece of the grid. And so you would think that they'd go after that. Don't know. It's very, very, very odd.
Speaker 2:Hopefully, sort it out
Speaker 1:quickly. Yeah. So it's interesting. So before
Speaker 2:mean, Teslas have been setting on fire, so maybe x data center
Speaker 1:is So this is interesting. So before Elon bought Twitter, the company had three data centers in Sacramento, Portland, and Atlanta. This ensured that if one data center went down, traffic could be shifted to the other two and split so no single data center was overwhelmed. Around Christmas Eve twenty twenty two, Musk shut down x's data center in Sacramento in an effort to cut costs. The company experienced a major outage in the wake of the shutdown over the next six months.
Speaker 1:The company moved more than 2,500 server racks from the Sacramento facility to data centers in Portland and Atlanta. So it sounds like they have two core data centers now.
Speaker 2:Okay. I wanna rip through a bunch of stuff really quick. Let's gonna rip through this stuff. So Donald Trump just signed an executive order about nuclear, and so we're gonna try and have some folks on very quickly and slot them in. Might be 02:30, but I'm talking to some nuclear folks about, coming on and breaking it down.
Speaker 2:I haven't even had a chance to read it yet, but it's out apparently. I don't know if you wanna dig into that. I also wanna give you the final analysis on Apple's AI struggles. We've been dipping our toe in and out of this story all week, but, Ben Thompson had a great summary of the problems with Apple's AI ish, with Apple's AI strategy, and he sums it up in these bullet points, which are really rough. One, Apple's head of software engineering didn't believe in AI.
Speaker 2:Apple's head of AI was skeptical about LLMs and chatbots. Apple's former CFO refused to commit sufficient funds for GPUs. Apple's commitment to privacy limited the company to purchased datasets instead of using, like, their own where Meta and Google and YouTube are all highly valuable trainings, training sources. Apple's AI team is understaffed, and the relative talent of the of an AI staffer still at Apple is uncomfortable to speculate about, but given the opportunities elsewhere, relevant. What should Apple do now?
Speaker 2:The baseline advice from Ben Thompson is app make Apple's on device models available to developers as an API without restriction. Make Apple's cloud interface, cloud inference available to developers as an as an API at cost, allow Siri to be replaced by other AIs, perhaps for subscribers to a to those to those AIs who would revenue share with Apple. So you can
Speaker 1:bring I get that.
Speaker 2:ChatGPT into in in into the first instance.
Speaker 1:The Siri button Yep. Apple could get, like, 50%.
Speaker 2:Fifty %. Yeah.
Speaker 1:Up from their their typical Yeah. I mean,
Speaker 2:just hold an auction. Just hold an auction and be like, hey. Yeah. Like, we're we're just not gonna hit this out the park, we're just gonna auction
Speaker 1:it off. It'd be great. They have precedent of selling the search bar. Yep. Right?
Speaker 1:Yeah. Wouldn't they do?
Speaker 2:Anyway, the other the other news is people are now speculating about the exact device that Sam Altman and Johnny Ive will be building together at AI with the IO acquisition for $6,500,000,000. Swix, who's been on the show, says they literally copied Avi Shiffman. Six point five billion for what Avi Shiffman built in the cave with a box of scraps, quoting, Iron Man, of course. And there's an old video from Avi pitching the first friend and, man, I mean, what a throwback. I remember this I mean, this is I was
Speaker 1:saying the I think on Wednesday or Tuesday. It was like Yeah. This could end up being extremely validating for
Speaker 2:Totally.
Speaker 1:Avi Yeah. A friend.
Speaker 2:Yeah. If
Speaker 1:he if he ends up nailing I mean, to be clear, he's also, I think, focused on a much different use case
Speaker 2:I I agree.
Speaker 1:Like, friend.com.
Speaker 8:I agree.
Speaker 1:Spelling like companion.
Speaker 2:To be fair, like, the bear case for Friend is that they wind up in the same position as Pebble, which is that they do the discovery to find out that smartwatches are a good thing. And then Apple comes out with the Apple Watch. They just leverage integration, and it's just a much better product. And then Google doesn't didn't need to buy Pebble. They just created the Samsung Galaxy Gear, whatever, the the Samsung Watch.
Speaker 2:And so the the existing hardware manufacturers, they haven't had to buy companies. And so they've wound up putting like, a lot of the the there's not there's not a winner in independent smartwatches. And so if if there is a pioneering new format and OpenAI has a serious hardware hardware product in the space and then Apple copies it quickly and then Samsung copies it quickly for the Android ecosystem, you're kind of left out to dry. So, obviously, I'm pulling for him, and I hope he I I hope he can wind up navigating it and counter positioning in a way that he creates something that's truly disruptive. But it is it is serious business right now.
Speaker 2:But Augustus sums it up sums sums it up well. He says, I have no stake in SFAI hardware, but this seems right, and it's, the giant, going up against Avi Schiffman and Friend.com. So good luck to him. But, yeah, the current prototype is slightly larger than the AI pin with a form factor as compact and elegant as an iPod shuffle. One of the intended
Speaker 1:use cases Shuffle really was a magic product. Yeah.
Speaker 2:You two,
Speaker 1:were you kinda too mature for a shuffle?
Speaker 2:I don't know if I ever had one, but I think it was more like a poverty problem. I don't think I had the money for it. But it was very much like an accessory.
Speaker 1:Didn't inspire you to grind?
Speaker 2:Yeah, I should have been grinding harder. But honestly, no. You know what it was? I was too much of a nerd. So I had I had something called like an iRiver, which was like
Speaker 1:Yeah. That's what that's kind of what I was
Speaker 2:very unique thing that, like it was it was technically more advanced than the iPod at
Speaker 1:the time.
Speaker 2:Like Yeah. I had one that had a color screen that you could watch movies on. It was like a two inch screen, and it was well before the iPod video came out by, like, a year. And so the release cycle was high was was was faster, and you get newer tech, but it was, like, borderline unusable because there was no focus on user experience. And so the company wind up kind of just not not not ripping.
Speaker 2:What else? Oh, Sam Altman. There's a exclusive in the Wall Street Journal by Berber Jin. A quote in here about what he's planning here, and we just gotta read this one quote. Altman suggested that the $6,500,000,000 acquisition has the potential to add $1,000,000,000,000 in value to OpenAI, which is is such an insane thing to say.
Speaker 2:It's so crazy. But at the same time, how much is Apple worth? If you get if you get a play in that space, like, yes, a trillion dollars of market cap is totally up for grabs. And so I think it's I think it's like, it sounds ridiculous. It sounds like over the top, but that really is the the the expected value.
Speaker 2:And so when you think about it as, like, you know, what is that? A point 6% or yeah. Point 6.65% chance at a trillion, probably worth 6,500,000,000.0, right
Speaker 6:Yeah.
Speaker 2:In equity. And so that's the deal that they made was that, hey. We're gonna get this team that's gonna run really hard at this. If they hit it, it's low probability, probably, you know, a couple percent chance that they pull it off. But if they do, it's a trillion dollars, so it's totally worth the high number.
Speaker 2:At least that's probably like, that that's one way to do the the the discounted cash flow and, like, the the valuation. And and we've we've sliced and diced the 6,500,000,000.0 a bunch of different ways, and and we've I think we both came away with this idea that, like, it's not as crazy as it sounds. It's 2% of the company. You know? You're getting a great executive.
Speaker 2:You're getting a whole team. And, like, it seems like a big number. They haven't shipped anything yet. That's crazy to buy something that doesn't even have a product for 6,000,000,000. But when you think about the market, the opportunity, things start piecing together, and it could wind up looking very good in hindsight.
Speaker 2:But who knows? Anyway, I don't think there's anything else we need to go into before we bring in our first guest.
Speaker 1:We got Jory from Linear. Let's bring him in.
Speaker 2:Let's bring him in. How are you doing?
Speaker 1:Hey, guys.
Speaker 2:Good. Good. How are you? We're great. Good.
Speaker 2:Having fun, reading through the information, looking at the new Sam Altman IO acquisition. Have you do you have a take on the new device? What do you wanna see in the world of AI hardware?
Speaker 7:I I don't know, to be honest. Let let let's see when, like, things start shipping and, like, how things, like, evolve.
Speaker 2:Yeah. It's been Have you had a chance to put
Speaker 4:in know, it it it's it's great
Speaker 7:to see, like, I've, again, like, in a Yeah. You know, in a driver's seat and, like, on the on the news, like, doing doing interviews and so on. So I think, like, it's still, like, we only had a had a break from for, like, whatever, like, four years or like so. It's it's been a while.
Speaker 1:It's more like John called out. It was, like Yeah. Very strategic to go have him do a big interview at Stripe Sessions and then immediately the next week, you know, come in with this massive announcement. But I but I'm excited to see, I think, every every technology
Speaker 2:Call that a coincidence in my parts.
Speaker 1:Yeah. Yeah. But I think every every technology enthusiast will benefit from him taking a a real crack at at AI.
Speaker 2:What what else in the news this week? It's been kind of an informal AI week over here at TBPN between Microsoft Build, Google IO, OpenAI IO.
Speaker 1:Linear Linear Agents.
Speaker 2:Linear Agents and Anthropic Claude four dropping. What's been most interesting to you? What are you most excited to leverage?
Speaker 7:Pretty pretty bad week for me for, like, following the news. This is, like, finished up moving, so I have actually been, like, relatively, like, off news and, like, I've been, like, on the docket for, like, a long weekend to, like, start catching up more on the Mhmm. On, like, all the keynotes and so on. But I don't know. It's it's it's good stuff, like, having more agents or, like, it's really coding agents and, like, different, like, players, like, coming coming to the space.
Speaker 9:So Yeah.
Speaker 7:I don't like it's it's it'll be, like, interesting to see, like, over the next couple of weeks kinda, like, what, like, performs, like Yeah. How well and also, like, what kinda, like, in like, user experiences are gonna be there. Yeah. Because I feel like that's that's kinda like the bit that we're we're, like, at Linear, like, now falling much more as we're, like, also, you know, trying to, like, work with, like, different players and, like, integrate stuff into Linear. It's, like, what are, like, the patterns of, like, usage that will happen with this.
Speaker 2:Yeah. What's more important? Just vague definitions around user experience patterns for agents versus standards like MCP and more technical advances.
Speaker 7:Yeah. I mean, like, those are, like, very two different things. I feel like, you know, like, MCP and, like, open standards, like, that's like, personally, I'm, like, very, very, like, pro, of course, as an engineer. But it's been something, like, I feel like we kinda, like, lost in, like, last decade of, like, the big platforms owning more and more on their, like, own, like, trying to, like, hoard everything. But, like, now things are pretty much, like, being pushed out in the open, and people are like, companies are, like, almost, like, forced to cooperate in the, like, the new world.
Speaker 7:There's just so much demand.
Speaker 1:Yeah.
Speaker 7:And it's been interesting to see from our side too as, like, large companies, like, jumping very early and, like so, like, a whole space is kinda, like, pushing all the companies to, like, act fast. Let's see how much is like, you know, hot air, like what like will come out of it. But I think like overall, it's like push for openness is good. But then
Speaker 1:How have you so yeah. So for for Linear's agents product, how do you evaluate how how open is the product? If if somebody's building an agent, can can they build an integration with with Linear by themselves? Or are you guys really kind of doing your own internal testing to kind of qualify potential partners there?
Speaker 7:Yeah. We're we're kinda like looking more on the promotional side, I would say. Like Mhmm. We believe in like open APIs and like trying to like have people access, but then I don't like that when it comes to, like, security and these kind of things. It, comes more on, like, what do you, like, promote?
Speaker 7:Sure.
Speaker 2:Yeah. Yeah. I mean, at the same time, like, if I get a really amazing agent that just can puppeteer my mouse and keyboard, you can't really do anything about that. Maybe you throw up a CAPTCHA, but, agents are gonna be able to solve those pretty quickly. And so at a certain point, you have to think, like, like, you're you you know, there's a reason why you have an API.
Speaker 2:There's a reason why you have an MCP server. There's a reason why you have maybe an agent integration. But are these, like, temporary steps in your mind, or do you think that there's real durable value to, an agent's, like, a standardization, something that you build in house, some sort of protocol or some or standardizing against things versus just like, MCP, I kept coming back to, like, can't the LLMs, if they're really so smart, can't they just use websites? But what what what's your take on that trend?
Speaker 7:Yeah. It probably comes to, like, down to, like, the user experience that you want to, like, offer. So, you know, like, controlling a computer or, like, VM or whatever, like, that's the, like, the ultimate, like, band aid to, like, everything. Like, it allows to do everything, but it's still, like it's not purpose built.
Speaker 2:Mhmm.
Speaker 7:But unlike MCP to a degree is, like, a little bit, like, similar. It's just like a way to, like, do, like, do request response, like, and get the information in and, share that. But then it's more about, I don't like in our mind, it's like, what is the experience, like, inside the product that, like, you're gonna offer that maybe is, like, specific to that product and how that does how does that work. Like, today, like, our implementation is, like, you know, somewhat, like, rudimentary that we would expect, like, agents look like regular users, but it's not very exciting to see the the progress of the agent when they're, like, posting new comments in their thread. That's a little bit of a hack that you kinda, like, have to, like, live without while we still, like, see what's actually, like, required and, like, what can we, like, build to, like, better, like, like, the agent developers?
Speaker 7:Like, what what's gonna, like, experience, like, give them? Of course, like, we're, you know, like, looking at this from the lens of, like, linear. Of course, like, running the company, like, building the product. But it's also, like, it's it's interesting to see how the like, where does the invocation of, like, agents happen? Like, is it, like, your CLI?
Speaker 7:Is it, a text editor? Is there, like, some kind like, web tool or, like, desktop app? Of course, like, for us, it's, like it it's pretty natural, like, being, like, close to, like, where you work. So, like, integrating into that workflow. And I thought that's why a lot of, these, like, smaller companies, especially, are, like, are pretty excited to, like, build in Linear because they're already using Linear themselves.
Speaker 1:What what agent gets the heaviest usage internally at Linear today?
Speaker 7:I think, to me, it's been, like, couple of the coding agents. But those were, like, the first ones to, you know, to the market.
Speaker 1:No. I I mean I mean, not even I mean, specifically, like, your team at Linear. Yeah. Like, coding age coding agents? Or or
Speaker 7:Well, you know, I I kinda like mentioning names because, like, of course, we're we don't have a horse in the race. Just we're just the interface for this.
Speaker 2:I love I love horse races, and I love having horses in races. Yeah. Pick a horse.
Speaker 7:But, like, it's it's changing, like, every week. I feel like you said, like, there's, like, a lot of, like, new new agents that, like, came out this week from Google and, like, OpenAI and so on. So, like, this kinda, it'll be, like, interesting to see, like, how those, like, play out, and we're, like, looking for, like working with, like, all of them, of course. But I don't beyond like, don't know. Like, currently, the focus is a lot on just coding agents.
Speaker 7:Like, it's it's natural because there's a lot of, like, value to be created over there. But I think, like, we'll in the next couple of months, we'll start seeing much more, like, noncoding agents, like, augmenting, like, in alongside with the coding agent. So you might have a you might have a task where you have a, you know, like a feature like feature flagging, like agent, coding agent, I don't know, like, who knows, a marketing agent like helping you out, like to write the change log blog post or and so on.
Speaker 1:Yeah. That makes sense.
Speaker 2:Are there any other AI features that you're implementing that feel like Windsurfer Cursor for project management? Like something that lives in linear alongside, but it's not that asynchronous? Because in coding, we're seeing a lot of there's synchronous AI and there's asynchronous AI and these two two different patterns. And it feels like the it feels like the market's bifurcating, but no investors want to admit that because they want to say it's gonna be winner take all. But in fact, we're seeing two different paradigms kind of emerge or maybe in three different paradigms emerge.
Speaker 2:What are you seeing on the project management side?
Speaker 7:Yeah. That's yeah. I feel like the agents are roughly, especially in our case, are tied to issues or tasks, and that's kinda like the interface for them. Outside that, we're, of course like, linear is not only, like, issue tracking tool. It's, for project management, like, organizing, like, your your work at the company level, not only, like, an individual level.
Speaker 7:So and that's we're kinda, like, have, like, separate work stream of we're building on, like, our own, like, AI tooling around that. How can we augment the project managers and, like, the product leaders to, like, do their work better.
Speaker 2:Mhmm.
Speaker 7:And that you could, like, imagine looking a little bit more like a a clawed or a cursor,
Speaker 6:like Mhmm.
Speaker 7:It How do alongside your linear data. And but, like, with that, it's gonna be interesting to see, like, how we can start, like, introducing, like, the external, like, agents or, like, MCPs as, like, part of that. That, of course, like, the issue is is that's, the first first step because it's, much more natural.
Speaker 1:What's your team's approach to testing new, for example, coding agents? Right? It's, in many ways, like, the linear approach from my perspective is, you know, really thoughtful, ideally long term planning around building, you know, beautiful products and and taking a calm approach to doing this and and in in that way, you know, enabling other people to maybe have more calm, effective product development. But at the same time, like testing new tools, they can be super effective, but testing new tools can also be super distracting. You know, we don't do a ton of engineering on TBPN.
Speaker 1:We actually do a surprising amount kind of like back office stuff to kind of automate production. I I can imagine an environment where you have, you know, call it 50 engineers and and on any given day one of them can send a message into Slack. Hey guys, you gotta check this out. It's like amazing blah blah blah. Maybe they just got like a couple good results and it's actually not worth directing everyone's energy to, but at the same time, you wanna stay at the edge.
Speaker 1:But do you have a philosophy or kind of an internal ethos around testing new tools?
Speaker 7:Not really. I think, like, mostly comes from people themselves. We're not, like, enforcing, like, certain tools. We're, of course, like, encouraging couple of, like, couple of tools where we can, you know, like, maintain, like, security and those kind of things. We're, like, mature company at this point, so, like, we need to we need to look after, like, our customer's information and, like, a lot of, like, like, also lives inside linear.
Speaker 7:So, you know, we we need to, like, look after stuff. But when it comes to, like, new tools, what the the team is, like, looking at the news the same way we are and, like, trying out stuff. And I think it's a little bit more so you you put out, like, Linus Way. It's a little bit more calm, and I think, like, that also shows on the tool adoption and so on. Like, you you're, like, excited, like, to try out stuff, but, like, you know, you take it with a grain of salt instead of, like, going on Twitter and, like, blasting, we replaced, like, all of our team, like, with AI.
Speaker 4:I mean, like,
Speaker 7:that's one way to do it, but that's definitely not us.
Speaker 1:Yeah. Yeah.
Speaker 7:Nothing against that either, but yeah.
Speaker 1:The Klarna method.
Speaker 7:Not naming any I
Speaker 1:said I said it. I I respect it. It's good marketing. It's good marketing, but it's not for everyone.
Speaker 7:Yeah. I don't know, like, that that's that's being, overall, like, when it comes to developing AI tools. Like, we started, like, when, like, everyone else started, like, a couple of years back when, like, the first GPTs, like, came out. And I tried to do stuff and, like, you know, tried to build a chatbot and so on, like but I felt like very early on, like, we realized, like, well, you get to, like, whatever 70%, but, like, then it's, like, falls apart, the experience. And, like, it's not and then it's really like hard to figure out like what's actually the path to get to like the 95% where you
Speaker 1:want This is the Apple problem. You you Linear and Apple have similar sort of like desires for perfection. Right? And and generative AI is in many ways completely imperfect, right, and and unreliable. So that's an interesting it's an interesting challenge.
Speaker 7:Yeah. But we we built we built a few things. We shipped a few things. We didn't make, like, a maybe, like, the biggest fuss about it. We're not the AI powered, like, issue tracking software raising, like, gazillion, like, dollars.
Speaker 7:But now raising a lot
Speaker 1:from customers, though.
Speaker 7:Yep. Yeah. And, you know, I mean, like, in the end, like, they want to get their work done. And, like, do they want to, like, buy hype or do they want to, like, buy product?
Speaker 1:Yeah.
Speaker 7:Maybe today, like, you you want to, like, buy more, like, AI, and that's where we're seeing, like, a lot of, like, demand for AI solutions. And, like, now we're heavily investing in that. Like and that kinda, like, our we did a course correction over, like, the last like roughly six months ago when I feel like the tools has got so much better. Like for me, personally, I was like, I'm going to leave leave and like doing the deep seek like came out and, like, just trying, like, the thinking mode versus, like, the light bulb moment. Like, I think
Speaker 1:Interesting. Yeah.
Speaker 7:A little bit background on that. I think just because of, like, linear philosophy is, like, try to build really, like, you know, snappy, like, purposeful tools. Like, we always, like, chase the millisecond and, like, try to get something, like, really fast. And when it comes to, like, LLMs, like, you have, like, inherent latency to it. Yeah.
Speaker 7:So it's just felt like, how do we how do we bind this, like, weight into the product that's instant? Yep. And I think, like, now with the the new, like like, thinking modes and so on, like, that has changed the, like, user, like, what people expect, like, that paradigm. And now we can, like, build towards that. And, like, people expect it to a little bit, like, more time, and there was, more UI patterns to support that.
Speaker 7:But, like, you get a lot of value out of it.
Speaker 1:Totally. Well, yeah. Check out some of Google's launches from earlier this week. What was it? They were doing 3,000 tokens in like half a second.
Speaker 2:With the diffusion models? Yeah.
Speaker 1:Yeah. Very cool. Anyways, this was awesome. Congratulations on the launch this week and come back on again soon.
Speaker 7:Yeah. Hopefully. Yeah.
Speaker 1:Cheers.
Speaker 2:So much.
Speaker 3:Later, Joy.
Speaker 2:Talk to you soon. We got Zach Weinberg coming to the studio. And and we also have Doug Bernhauer from Radiant joining at 02:30 to talk about the nuclear event, which I'm very excited about. Welcome to the stream, Zach. How are you doing?
Speaker 6:I'm good. You're like.
Speaker 2:Welcome to the stream.
Speaker 6:Full soundboard now.
Speaker 2:Full soundboard. Yeah. We're getting better every single iteration.
Speaker 6:What other product updates have there been since I was last here?
Speaker 2:Oh, I mean, our Chirons. Yeah. Stop asking about stop asking hard questions about our updates. We're doing
Speaker 1:I know.
Speaker 6:I noticed what whoever makes the yellow drink, I
Speaker 1:assume. Oh, is No.
Speaker 2:To be
Speaker 1:honest, they're
Speaker 2:not sponsoring us.
Speaker 1:To be honest, I I did grow up in the town that this company is from. We have no Proper affiliation.
Speaker 2:Honestly, anything, we could
Speaker 1:just we should just wrap these in in ramp yellow.
Speaker 2:We should.
Speaker 1:We should. Anyways, good good to see you.
Speaker 6:Good see Yeah. Yeah. Good to see you guys.
Speaker 2:Thanks for I mean, we wanted to have you on initially to talk about the most favored nation, drug pricing EO. It's been a week or two since then. There was kind of like a I think it dropped Sunday. It felt like years ago. But but, I mean, it felt like Sunday, like, oh, this is gonna be Black Monday for biotech.
Speaker 2:It didn't happen. The biotech stocks did fine. They also this was coinciding with the pullback on the tariffs broadly, so the market rose overall. Yeah. Mhmm.
Speaker 2:Can you give us how you process the information, how you're thinking about it now? Does this thing matter? Should we even be talking about it? Should we just move on?
Speaker 6:Yeah. Maybe let's start with, like, why it's probably just a misguided idea in the first place Please. Or at least the trade that I think Americans would need to understand that you're making as it relates to drug pricing. And I think we may have talked about this last time, I've talked about this with a lot of people, the idea that America pays a lot for new therapeutics. And we do.
Speaker 6:We do, by the way. This idea that we pay materially more, even on a GDP adjusted basis, than other countries, and in particular, other wealthy countries. So you take Europe is probably the best example, where the amount that we spend on new therapies as a percentage of our like, it was called GDP adjusted price
Speaker 2:Sure.
Speaker 6:If you will, is is still on the upper bound. So like America pays for the innovation for the rest of the world.
Speaker 1:Don't we get the innovations like five to ten years faster than the rest of the world?
Speaker 6:We definitely get them faster. We are usually the first place all these new drugs launch. There is also a set of therapies that we have that you just cannot get anywhere else. Like, you know, other countries refuse to pay for them. It's it's, you know, socialized medicine.
Speaker 6:Right? So it's like a single budget.
Speaker 2:And then there's also the the factor of the rebates where the headline price that you see quoted in America is not what Americans typically pay even if they don't have insurance. You might see that, some, like, Alzheimer's drug is 10 times or or a hundred times the headline price in America versus Japan. But realistically, Americans are paying three times more, five times more, which is still a lot, but Yeah. It's not it's not the scary number that people often quote.
Speaker 1:Personally, I like A %. I like paying more for drugs because inspires me to grind harder. Yeah. Right? Think many Americans feel With drugs are we talking about here?
Speaker 2:They're Caffeine, nicotine, protein, protein, testosterone mostly.
Speaker 6:Protein. Protein. Yeah, yeah, yeah. Full just TRT juicing before the show. Yeah.
Speaker 6:No, so we do pay more, which is where I was going. On a net basis, when you add in all the discounts that are given out, it's not as bad as it makes it seem. But obviously, when you read about it in the headlines, and they're like, oh, this drug is like $65,000 a year, 1 hundred and That is the list price. And so the media doesn't understand net pricing versus list pricing, and so the headlines are much more sensational than they actually are in reality. But, yes, the delta still does exist, and we are we we do pay more.
Speaker 6:Now part of the reason why we pay more is because if we if we don't do it, the drugs don't exist. Yeah. And I just think that little piece of this is really hard for most people to understand, which is biotech there's this really amazing analysis that was done by RA Capital, which is like a giant biotech venture fund.
Speaker 1:Yeah, we had one of their principals on, the I think the Monday after
Speaker 6:Super sharp group. Top five. You know, they're mostly publics, but, like, this is like a, you know, expert expert expert group in in in therapeutics.
Speaker 2:Yeah. We had Yeah. We had to test Cameron on.
Speaker 6:Yeah. I only have, like, a few hundred people. Their founder, Peter, is is super sharp. Cool. We respect them a lot.
Speaker 6:They actually were investors in one of our company's next rounds.
Speaker 1:Oh, cool.
Speaker 6:Anyway, good group. They did a very beautiful analysis of the expected value of a biotech investment at various rounds. Seed round, A round, B round, so on and so forth. Like, what is the EV of $1 that you put in? And I will tell you that at both seed and series A, the EV is negative.
Speaker 6:Negative at our current prices. And and and the reason for this is, like, drug discovery is the single hardest fucking problem that you will ever encounter in your life. Mhmm. Because you are trying to make a drug and using all of these tools that are not actually the human being until the absolute end of it. So you take all this insane amount of risk and spend tons and tons of money, and the data that you have to make your decisions are, like, in a petri dish or in a mouse or in a monkey or in a dog.
Speaker 6:And, like, yes, that's useful, but it's not a human. And so, like, the amount of companies where because you don't see this in tech. Right? You don't see companies that have raised $300,000,000 do one product launch and then go bankrupt. Yeah.
Speaker 6:And, like, that happens all the time in biotech. That's actually, like, the norm is basically, you know, you've spent a few hundred million dollars. You think this thing is possibly going to work. It works in a dog. It works in a monkey, whatever.
Speaker 6:The drug like properties seem all really great. And then you run a human clinical trial for $150,000,000, and it doesn't work, and the company's bankrupt. And everybody loses their money. And it's not like 20,000,000. It's like hundreds of so biotech is an expected value negative investment business even at current prices.
Speaker 6:And so what that means
Speaker 2:Really crazy. Is that just a power law thing where where the best biotech venture funds are doing great at seed and series a? And just like, there's plenty of funds that I could point to in consumer SaaS or enterprise SaaS that are terrible and negative EV, right?
Speaker 6:I don't think you could point to the asset class being negative EV.
Speaker 2:True, true, true.
Speaker 6:Right? Like, yes, there's always a skew in the results. But here we're talking about the entire asset class is negative EV. And so if you're on the front end of it, great. But like, you know
Speaker 2:It's rough.
Speaker 6:You stick it in the middle, you lose money. In tech,
Speaker 2:I don't think you get
Speaker 6:the median fund in tech and you lose money. No,
Speaker 2:no, no, no. So you guys think the fund might be like one and a half x or something.
Speaker 6:Exactly. Not shifted this way. The whole category. Why is it shifted this way? There's a bunch of reasons.
Speaker 6:The biggest one, in my opinion, has to do with this concept of called better than the Beatles, which is basically, like it's a very simple idea when it clicks for you. Mhmm. When I try to launch a new drug, the thing that I have to beat in terms of its efficacy, like, good of a drug is it Mhmm. Is the current standard of care, meaning what a patient would get if this drug didn't exist. So it's not placebo.
Speaker 6:In most cases, it's not like a water, you know, sugar pill. Right? It's like the current thing. And so as we get better at treating the current thing, the bar gets higher. So it actually like, the better we do a drug discovery, it gets harder, not easier.
Speaker 2:That with payroll software. Unless you're better than the best payroll software, you shouldn't be allowed to promote your product.
Speaker 6:Well, and even more like, here's the crazy
Speaker 4:You shouldn't be
Speaker 2:allowed to launch. You shouldn't be allowed launch the product. Okay?
Speaker 6:The government would say, no. No. No. Cannot launch until you better than the current
Speaker 2:Your corporate card isn't better than RAMP, so you can't launch. It's just ridiculous. Could
Speaker 6:you imagine that world where you're like, oh, my new you know, someone would launch, like, I don't know
Speaker 2:Yeah. Of course.
Speaker 6:Chat gbt search engine, and then, like, the federal government's like, nope. Google's better.
Speaker 2:Google's can't use makes sense.
Speaker 1:Yeah, yeah, yeah.
Speaker 6:That is how biotech works. Wow. That is how biotech works. And
Speaker 1:by the way Is the right way for it to work? Does that contribute Mike? Does it you have to imagine it contributes to prices being high because it's somewhat anti competitive, right? If I Okay. For in the payroll in the payroll market, right?
Speaker 1:Like, a payroll platform gets super bloated. Yep. Some founders like, and it and it costs, you know, a hundred dollars an employee. Some a founder comes in, launches an okay version.
Speaker 2:Also, there's iteration on drugs, I would imagine, than on software. Right?
Speaker 6:No. No. You can't, like, iterate through it. There's no, like, learning. You gotta like, it's it's either it's better or not.
Speaker 6:Here's the problem. Are you going to take the drug that's 30% worse but 50% cheaper, even though you don't pay for it?
Speaker 2:Absolutely not. Exactly. Yeah. Yeah. So Exactly.
Speaker 6:Now, if you were on the hook, or maybe you saw some of the rebates went into your pocket, maybe you'd be like, alright. You know, like, my psoriasis isn't, like, that bad. Yeah. I'll take the, like, percent less effective drug, and I'll, like, clip some, you know, coupons. And and and and but that we don't do that.
Speaker 6:Yeah. Because, you know, in in in America, we view health care as like, it's supposed to be free for everybody. So mean,
Speaker 8:can kind of
Speaker 2:do it with over the counter stuff. Like, if you get the Mucinex extra strength max, it might be $3 more than just generic stuff.
Speaker 6:Try telling the cancer patient that you're going to get the same thing as Like, you're just not going to do it. And so the FDA is kind of like, well, what's the bar is current standard of care. That's the standard we've put in place. Look, if we wanted to create a system where you could launch slightly worse drugs cheaper, that would be an interesting system. But the problem is the people using the drugs aren't the one paying for the drugs, at least not directly.
Speaker 6:And so cheaper doesn't win. Mhmm. Right? Like, you can't shift because the the patient, at the end of the day, does not want the worst drug. Like, I can't even I there's so many situations where you're just like, absolutely not, especially in in in serious disease, chronic disease, cancer, all the stuff that really matters.
Speaker 2:Yeah.
Speaker 6:So going all the way back to pricing, one of these weird, weird issues in biotech is simply as the industry gets better, it gets harder, not easier. There's almost no other industry where that is true.
Speaker 2:It's the opposite learning curve pricing. It's the opposite of fabs, the opposite of software, the opposite of Internet.
Speaker 6:Yeah. When you see all these stats of, like, innovation and biotech has slowed and all you know, a lot of it is because of this and they call it better than the Beatles, which is this idea of, like, imagine if you wanted to release music, and the only way it would work is if you were better than the Beatles because that's the best. And so, like, how much music would you really have? And that's that's the I I I I like the phrase because it it whatever. The catchy.
Speaker 6:Like the Beatles. Anyway, so It is,
Speaker 1:it does, the the one thing I'll say is it has an interesting effect of of pushing for true excellence. Right? Mhmm. Mhmm.
Speaker 4:Yeah, yeah, I mean,
Speaker 6:a bunch of people
Speaker 1:are That certainly doesn't happen in SaaS. There's a lot of people that see a good SaaS product, and they're like, I can make an Okay version of that and make a couple million dollars a year.
Speaker 2:Totally. There's less cynicism, and there's less like we don't have a slop problem in farming.
Speaker 6:Well, there's no move fast and break things, you can't tweak your way to the front. You've got to build the best drug before you put it into people. There is no tweaking. So I say all of this, which is to say, yes, drugs are expensive in The United States. But if you wanted cheaper drugs today, you are basically not going to get any in the future.
Speaker 6:And I know everyone's like, oh, that's not true. Blah blah blah. Like, I am on the front lines of this every single day. I mean, we are one of now one of the larger biotech venture funds at seed, meaning like we take the most we're in that negative EV category.
Speaker 2:Risk gone. Different. Risk on. Yeah.
Speaker 6:Yeah. And so if the price on the other side is not big enough for the risk that you take, it's not that you, like, tone it down. It's that you just don't do it.
Speaker 1:You can't Just to be very clear, like, you don't need to do this. Right? You could walk away from the game. Right? There's a And
Speaker 6:by way, it's not me. It's our investors, our LPs. If my fund and every other biotech early stage investor can't make money, our job will cease to exist because our investors won't let us exist. Right? Like, there's this the oh, money will always be there.
Speaker 6:No. Absolutely not. And so, you know, you need a reward on the other side of it. And I think that trade is really hard for people to think about because you're like, well, it's a lot now. And you're like, yeah.
Speaker 6:It's a lot now. But if if it's if it weren't, that means ten years from now, you're gonna have the same drugs available in ten years as we have today. Your kids are not gonna be any better off from a medicine perspective, so the reward does have to be really big. But at the same time, like, do the Europeans kinda, like, preload off of us? Yes.
Speaker 6:And so this kind of, like, rough idea of, alright. This is what the what they're trying to do is say, we're gonna index The US price to, like, a basket of of comparable international countries, basically, like, wealthy first world countries. It's mostly European countries. And that we can't be, like, materially higher than they are on a GDP adjusted basis. Mhmm.
Speaker 6:At least that's the idea behind the executive order. Maybe two thoughts. One, all this will not take a drug US drug prices down. It will not happen. What will happen, this is not a good thing, is it may force first of all, okay.
Speaker 6:This is likely not enforceable. I don't believe the the legally, I don't think the EO works. And that's part of why you didn't see the biotech market react is every expert
Speaker 2:There's no one took it seriously.
Speaker 6:Yeah. Like, it's not there's no it'll fail in the court a thousand times. It'll never get implemented. That doesn't mean some future version of this. There isn't some, like, you know, loophole or whatever that maybe the government slowly figures out.
Speaker 6:Like, this EO seems as if it's basically never gonna happen.
Speaker 1:Yeah. What about what about the is biotech being squeezed on both sides in some way right now, given that there's kind of an attack on the fundamental foundational research as And so if you take that, basically that's investment that's sort of like you know, non effectively the biotech industry gets the benefit of
Speaker 2:Yeah, the negative EV bets are already being subsidized to be By
Speaker 1:the closer to the
Speaker 6:not Yeah, this administration is doing absolutely everything it can to destroy the future of therapeutics that you want. Every single decision they've made basically so far has been negative to future medicines existing. Right? Like, you cut biology research so we don't really understand what drives disease. You cut skilled immigration.
Speaker 6:Do you know who is half of biotech? If you go to any biotech company's website, go to our usually somewhere between 3050% of the people on staff are foreign born.
Speaker 2:Yeah. Yeah.
Speaker 6:Because you know who doesn't want to do the seventeen years of school to become a chemist and do all the training? Americans. And so we already have a skilled scientist shortage, and that's even with current immigration. And so kicking these people out of the country, not letting them come here in the first place to train, we're just going to have a massive skills gap. This isn't like bring manufacturing back.
Speaker 6:This is like you need to be a PhD in chemistry plus fifteen years.
Speaker 10:These
Speaker 6:these people don't exist. And so most of our senior team at at Curie is is foreign born.
Speaker 2:Yeah. And I imagine that I imagine that the biotech industry could very quickly absorb, like, twice the amount of PhDs and just do more research. Right? And and it wouldn't be like job displacement if that happened.
Speaker 1:So the solution
Speaker 6:And like biology and chemistry PhDs and proteins, like specific types of PhDs. Totally, totally. We need like marine science PhDs? No. But you know
Speaker 1:So I don't wanna put words in your mouth, but are you saying the solution is that we need a million Brian Johnsons?
Speaker 6:We're looking for scientists, not crazy people. So, you know, no. We need we need a million, you know, David Luz at MIT.
Speaker 2:Yeah. There's What about what what about that guy in China, He Jiangqui? Have you been following this guy? He
Speaker 6:Is this the one who's testing stuff on himself?
Speaker 2:Yeah. Exactly. And he posts these, like, very vague posts where
Speaker 1:he's found AI I thought it was a AI, like, meme account for months.
Speaker 2:And he keeps posting, like, you know, biotechnology should never be used for to create super soldiers. And it's just like a selfie of him. And it's like, it sounds like you're making a super soldier, man. And it's unclear how much he's in on the joke, but recently, like, he he got married, and his wife can't get into the country. Have you been tracking that story at all?
Speaker 6:No. Because it's like fringe. It's like, you know, it's it's like the New York Post of science. Yeah.
Speaker 2:Yeah. Yeah.
Speaker 1:What about I don't know.
Speaker 2:Alright. Hold on. I wanna go back. Yeah. Please.
Speaker 2:Please. Please. Yeah.
Speaker 6:Because I just like Here we This is the class this is this administration being like, I'm angry about something, and then I make a decision, and nobody thinks about then what happens. And it's just like over and over again. You're like, these are these fucking people are so stupid. And I hope they're listening. Like, you are all so stupid.
Speaker 6:And, like, you're just
Speaker 1:shots fired.
Speaker 6:You're just ruining the thing that has made America excellent in science by killing all these things in, you know, science funding, immigration, blah blah blah. It's like, it is it is idiotic. But even even if you say, like, we're gonna index The US price to international prices, remember that The United States is a giant fucking country. You have 350,000,000 people. We're the wealthiest in the world.
Speaker 6:Like, all 50% of pharma revenue comes from The United
Speaker 2:States. Mhmm.
Speaker 6:And then, you know, like, Japan is kinda second. Then Size gone. Okay. So now put yourself in the shoes of a pharma company. Right?
Speaker 6:You're gonna index you're gonna index our price to the European price. And let's say the Europeans are, like, 15% of your revenue. And the Americans are 50. Are you going lower your price? Absolutely not.
Speaker 6:You're just going raise the European price.
Speaker 4:Yeah.
Speaker 6:Right? And just to bring it up, because you can't lose The US revenue.
Speaker 2:Yep.
Speaker 6:So like, you'll never give this revenue up. So the price The US price will not change. This does not work. All it does is it may even if it were illegal, it may force pharma to bring its European price up. And you know what happens when that happens?
Speaker 6:This is like and then what? The Europeans will go, okay. We can't pay for it. We're not gonna buy it. And all it does is it keeps The US price the same, and it shrinks pharma.
Speaker 2:Mhmm.
Speaker 6:Like, the net net is The United States will pay exactly the same that we paid before because pharma is not going to drop price in its largest category by far. It's the only place you can make money in pharma is in The US. So that price is not coming down. If you have to bring the price externally up, it shrinks the revenue in that market, which shrinks pharma, which shrinks biotech. Because if you if pharma is a smaller, you know, dollar value if the if the profitability of pharma comes down, you know what they stop doing?
Speaker 6:Buying biotech companies. Mhmm. Right? All of this the same effect, which is like, well, if this is less prop it's just a different way of making it less profitable. Mhmm.
Speaker 6:Right? It's the same thing of, like, it's less profitable, I can't take as much risk. And if I can't take as much risk, I stop doing risky drug discovery. And therefore, the whole industry just kind of like this. And that's not a win.
Speaker 4:Do
Speaker 1:companies get valued if they have one drug that's working? And maybe it's the best, right? So it's actually able to be in the market. Mhmm. Yet there's a sort of sense that there are very real competitors that might come in with a drug that is substantially better.
Speaker 1:How is a pharma company that's exploring M and A going to value that? Is it still the same
Speaker 6:This is what they do all day. What you just described is exactly what these people are spending teams and teams of people on, which is like, okay. What is the value of the current drug that we've got? Which is usually if it's at the place where it's approved, you're looking at, you know, say, what are peak sales and how long am I gonna be able how long is my patent? Right?
Speaker 6:What do we what do we expect generic competition to come to to to look like? And then you're looking at the pipeline of competitors, and you're looking at the data that they shared. And sometimes there's some data, and sometimes there isn't. And then you're trying to predict the future, which is like, okay. Just because, you know, company acts as working on a competitor doesn't mean it's gonna work.
Speaker 6:Mhmm. So do we think it's gonna work? Why do we think it's gonna work? If it does work, what are the shit should you do? Like, scenario planning.
Speaker 6:Like, okay. You know, 10% chance this beats us. 50% chance it doesn't. Like, should we be concerned? And all of this math goes into the spreadsheet of, like, what do we think this drug is worth, and what's the risk appetite?
Speaker 6:So, like, this is this is day to day, you know, biotech pharma commercial analysis. There are very, very smart people who do this. You know, this is what the public hedge funds do. This what the RA guys will do. You know?
Speaker 6:And it's it's it's deep science. But all of it is just, like, at least the drug pricing stuff is just a it's a trade that is hard for people to understand. But it's kinda like, if you don't put a reward on a very risky thing, the risky thing doesn't happen. And you just don't feel it until ten years. You won't even really know because it's the drug that never got started in the first place.
Speaker 2:Mhmm.
Speaker 6:And then eventually, what you're doing is you're outsourcing all this to China because the Chinese will pick it up and and and and do we got a longer conversation about China. So I all all of it is just kind of like stupid. The other thing I would say, you know, at the jump, but, like, this is my defense of medicine and therapeutics, if you will, as a great investment. They go generic.
Speaker 2:Yeah.
Speaker 6:Nine to twelve years, let's say, roughly, these are generic, which means they are basically free for you in ten years. I know your kids and your grandkids and your future kids. Like, is an unbelievable investment. You pay a lot upfront. You get a lot of innovation, a lot of people taking risk.
Speaker 6:You have this window in time, which is like, yeah, you you've got to eat it. You're going to eat you're going to pay a bunch for it. It's not going to feel great. Then everybody gets it free. There is no other industry in the world where that happens.
Speaker 6:And even within health care, you know who doesn't go generic? Doctors, hospitals, surgeries. Like, why why why is there so much focus on the therapeutic, which is only also only about 10% of of of medical spending is drugs, which then eventually goes generic versus the 90% of it, which is basically physicians.
Speaker 10:And
Speaker 6:those physicians, they're not Well,
Speaker 1:it's because of the margins.
Speaker 2:Right? What What strikes you as something that, like, the pill only costs a cent to make. And
Speaker 6:so Exactly.
Speaker 2:Yeah. Emotionally you think about high margin things as wasteful.
Speaker 1:What's something Yeah. That could come from the EO? We we we had a infamous healthcare Excuse actually actually, no. We had an infamous healthcare exec message us while we're live. Said ask him if he reads that the EO is maybe trying to solve the consumer pricing problem gross to net rather than actually making pricing comparable in the end given that there was a specific call out for consumer d to c pricing and which might have been why
Speaker 6:Consumer d to like, health care is about the new drugs that are really expensive, not, like, consumer d to c pricing of, like, you know, whatever, consumer medicine. Like, I'm talking about real health care. Very sick, chronic disease people with neurological conditions, with cancer, with heart disease, like, the serious stuff,
Speaker 2:which is what we I just saw a company that they'll give me one pill that has a
Speaker 1:Foreign written
Speaker 2:dysfunction medicine and hair loss medicine in one pill. Is that not real medicine? What's going on?
Speaker 6:Those are generic meds.
Speaker 2:Sounds like amazing.
Speaker 6:It's amazing. And you know why they're so cheap? Yeah. Because they're generic. Because fifteen, twenty years ago, we invented this shit.
Speaker 6:Pfizer made like a crap ton of money selling Viagra.
Speaker 2:Yeah, that's right.
Speaker 6:Everybody now you get to get your six in one dick pill for $2 And that's a pretty cool deal, right? It's cheap and all this. Like Shores, there's some gross to net whatever. That's not what health care is. That's not I'm sorry, hair loss is not health care.
Speaker 2:Interesting. What about CRISPR on demand? There was this infant child that was saved with a custom gene therapy. It seemed like a very inspiring story. There was an inspiring video all about it.
Speaker 2:It seems like an amazing testament to something we've been hearing about for a long time, which is CRISPR. Maybe a decade we've been talking about this. Is that an opportunity for new companies? Is that is there already a company that's, like, ripping on the back of this, or is that just kind of, like, an outgrowth of what we'd expect with the technology given the maturity?
Speaker 6:I believe the company that did this was Beam Therapeutics. Is that them who did it?
Speaker 2:Yeah.
Speaker 6:Yeah, it's cool. I mean, is a perfect example, right? Which is like, that com I think it's b I gotta remember I can't remember offhand which one it is. They that company that that successfully developed this this therapeutic
Speaker 2:Mhmm.
Speaker 6:Is trading for less than money raised.
Speaker 1:Woah. Wow.
Speaker 6:K. Moment moment
Speaker 1:of silence.
Speaker 2:It's terrible.
Speaker 6:Right? And why? Well, because, like, these gene editing technologies where you're going after essentially, like, disease that is very clearly defined by some mutation in your DNA, and that's a that's a small subset of total disease. It's, like, very, very rare conditions that this applies to. So, like, the market the way I think about it is, like, the patient market for this technology is is very small.
Speaker 6:These are horrible diseases in theory, can be can be treated through gene editing. There's not that many of them, but you can you can do some really amazing things if if you can if you can make these edits, which is the first time this has ever happened. But, like, if you add up the patient population of, like, all of these conditions where you could possibly do this, it's not that many. It's I don't know the math off hand. Bet you it's probably, like, tens of thousands at most.
Speaker 6:Mhmm. Okay? And so, like plus the variable cost of manufacturing this stuff on a per patient basis can be hundreds of thousands of dollars.
Speaker 2:Just are we going get some blockbuster gene editing for hair loss and then we're back in business?
Speaker 6:No. Hair loss is not, you know, there's no like one base edit to, you know, fix hair loss.
Speaker 1:But Yet.
Speaker 6:Yet. I it's I like
Speaker 2:this techno pessimist on my stream, Zach.
Speaker 1:Well, one of the
Speaker 6:things you learn as you go into science is that the DNA is not actually the whole story. It's not even close to the whole story. And so it's not There's
Speaker 1:no one Is vibes a part of it? Is that where
Speaker 2:It's actually astrology. Matters. It's taking into account the DNA, but also the astrological Infamous astrologist.
Speaker 6:Vibes are like it in a way that, like, your behavior as you're alive does affect your
Speaker 2:Epigenetics expression. Vibes of the DNA.
Speaker 6:Your epigenetics matter. Right? Like, you sit in in smoke all day, like, you're have some problems. Anyway, I I like this as an example because this company that just made this, like, unbelievable breakthrough, this has never been done before in humans, they're curing diseases, is now trading for basically less than cash raised. I got to
Speaker 1:go find What's the name again?
Speaker 6:Swear it's
Speaker 2:So so there's, I I I just got an answer. So this was a bespoke CRISPR based editing drug. It was built and tested by physician scientists at the Children's Hospital of Philadelphia and Penn Medicine with translational help from Innovative Genomics Institute at UC Berkeley. Reagents and GMP grade components were donated by several suppliers, including Accutas Therapeutics and Integrated DNA Technologies and Aldveron, both Danaher companies for guide RNA
Speaker 6:and Yes. On that one, there was another There's
Speaker 2:another story?
Speaker 6:Yes, there was another story, and I have to find it.
Speaker 4:Which
Speaker 2:Well, we will have to have to jump. But but we'd love to have you back and kind of dig into some of these other biotech companies and take us through, like, the wins and losses. I think it'd be very interesting to see
Speaker 6:what's going what's Imagine if that becomes a drug and we go, oh, we can only pay $20,000 for it. Mhmm. Do you know what happens to that drug?
Speaker 2:Sits on the shelf.
Speaker 6:Sits on the shelf. No one ever does it. No one ever makes it. And there's your drug pricing in in reality, which is like
Speaker 1:Well
Speaker 6:It's gotta be a reward.
Speaker 2:So we're pro higher drug prices, I guess. You pilled us on that? We want the highest prices possible is what I'm hearing.
Speaker 6:You'll get a lot of shit. You put real high prices, like people will come and take rest. I'm sure there's some
Speaker 1:balance We got to have you and Shkreli on together. We need like, oh, oil.
Speaker 6:Here's my favorite set. Here's my favorite set. I'll pull these for you, so I don't want to sound like an asshole just spitting numbers that aren't true. I believe on a per American basis, like you take our drug spend and you divide it essentially over Americans that we spend drugs on, it's something like $1,000 a year or so per person, if you will. We spend more on cosmetics than we do on medicine.
Speaker 2:Wow.
Speaker 6:More on cosmetics.
Speaker 2:That's it for America. We're looking good.
Speaker 1:Fast food? What about
Speaker 2:fast dropping dead at 45, but we're gonna look good doing it. Thanks so much for stopping by. This is fantastic. We'll talk
Speaker 1:to soon. Pleasure. Cheers.
Speaker 2:Next up, we have Lee Marie Braswell from Kleiner Perkins coming in, former colleague of mine at Founders Fund briefly. Excited to talk to her about artificial intelligence, AI agents, all the news of the day, and we'll bring her in. And we got some we got some good Chyrons for her coming up. We'll see if we can get them up on the stream. What do what are we are we talking for her?
Speaker 2:The term sheet tyrant herself. Lee Marie, are you there? Can you hear me? How you doing?
Speaker 11:What's up, Kugen? How's it going?
Speaker 2:It's good. What's, what's new with you? I'd love to get your initial take on, AI week. We got Microsoft Build, Google IO, OpenAI IO. We got Claude four from Anthropic.
Speaker 2:It's been a massive week. What has stuck out to you as, like, the most interesting, the most underrated, the most worth digging into, of the news of the week?
Speaker 11:Well, I guess just to start off, and it's so good to see you again. It's it's been it's been a while.
Speaker 2:It's been too long.
Speaker 11:So, yeah, thanks for having me on the show. Yeah. It's no. There's never a dull moment, really. You know?
Speaker 11:Yeah. You know you know, the I feel like every day, there's there's something really, you know, significant that you need to be paying attention to if you're going to try to make money investing in AI companies. Yeah. And so, yeah, I mean, I think the big thing that's actually, there's so much this week. I mean
Speaker 2:Right.
Speaker 11:You know, starting with some of the stuff you said, the
Speaker 2:I It's the best time to be a technology podcaster. Yeah. Investors are a close second, but podcasters really where you wanna be. That's where the action is. Because every day, there's new news.
Speaker 2:Anyway, yeah, what what what is sticking out to you?
Speaker 11:Hey, Jordy. Hey. Yeah. So so there's the I mean, the IO acquisition in particular, that news, what incredible video, what incredible team. I mean, just really showcasing OpenAI's ambition to really, you know, get into get into a lot of stuff.
Speaker 11:And I mean, obviously, there's a lot of speculation about what the device will look like. I was actually looking to something
Speaker 1:Sorry sorry to interrupt. My favorite part was John and I are, I guess, ex hall monitors. We're in the community notes program. Oh, yeah. So somebody was trying to community note the OpenAI launch video, and the suggested community note was this video uses AI.
Speaker 1:The these two scenes aren't real. If you look at this section, it's like, you're trying to gotcha an AI company for using AI in a marketing video? Like, what is that? That's very silly.
Speaker 11:What do you expect? You know?
Speaker 1:Yeah. Don't even know
Speaker 11:AI. Yeah. Yeah. So I mean, yeah. I mean, super excited about what potentially that could that could imply for just, you know, OpenAI's ambitions, especially as it relates to consumer consumer hardware.
Speaker 11:I was looking it up on on o three, but o three kept then kinda giving me some different answers. But it might be and to be fair, I don't, you know, kinda know the current state of things inside of IO Yeah. Johnny Egg's company. But it might be one of the largest, if not the largest, sort pre product acquisition of all time. So, you know I
Speaker 2:think so.
Speaker 11:I mean, dollars 6,500,000.0 is a lot of money.
Speaker 2:Yeah. We've been noodling on it.
Speaker 1:It's a couple points. It's a couple points
Speaker 2:for a
Speaker 1:key exec.
Speaker 2:Exactly. It's 2% of the company, which when you think about bringing in an executive at that level, that, like, comp for that
Speaker 1:Industry legend.
Speaker 2:It's not that crazy to get to that number. And then today in the Wall Street Journal, Sam Alwyn was quoted saying that if they can nail it and get a major consumer device, that's a trillion dollar opportunity. And that sounds crazy, but you look at Apple's market cap. You look at, you know, Android, Samsung. Like, yeah, there probably is a trillion dollars of market cap
Speaker 1:Well, there was also there was also the the tinfoil hat saying, like, oh, he's trying to dilute the Oh, yeah. That's profit. It's like, you know that they are issuing billions of dollars of stock to employees Yeah. Yeah. Yeah.
Speaker 2:All the time. Right? Like, this
Speaker 1:is not some, like, you know,
Speaker 2:crazy conspiracy. I I I do wanna get your take on the actual device. We we've seen some pre render, some AI images around, like, a pendant with a camera on it, the Her model, maybe it's an earpiece. I imagine you get pitched a lot of AI devices. We've seen the rabbit, the humane, the friend.
Speaker 2:Are there any other, any other ideas that you've seen that could potentially be, just AI devices, even not from OpenAI, but just in general? Because Apple's got it pretty well covered. They got your ears. They got your eyes with the Vision Pro. They got your phone, the watch, the iPad, the laptop, the desktop.
Speaker 2:Like, Apple's there's not a lot of white space in the Apple catalog, but, it'll be interesting to see if somebody can come up with something that's new. Have you seen anything that's interesting?
Speaker 11:Oh, man. I really wish I could I could tell you about it. But, yeah, we actually have a company in Stealth. I say much, but there's certainly different, you know,
Speaker 2:mode the show when they're ready.
Speaker 11:Yeah. I'll I'll I'll be I'll be super excited too.
Speaker 2:Cool.
Speaker 11:People are being really creative. And then also, I mean, just generally, and I'm sure you're seeing this too, just given, like, the pace of how how much is happening and then also the competitive nature of these markets. Like, it's Yeah. Clearly there's this big prize maybe bigger than ever before. Yep.
Speaker 11:And so if you've a really good idea, like and if you don't have trouble raising funding, getting customers, or hiring people, like, you know, why why talk about it too soon? So Yeah. Yeah. I'll be excited to to share more on that.
Speaker 1:Yeah. There's also I feel like people have just been generally willing to fund hardware, but also kind of categorically bearish. Right? People are just like, oh, like, hardware is really hard. Like, I'm gonna make this bet, but, like, it's really hard.
Speaker 1:But the hardware
Speaker 2:is hard. It used to be about supply chain. Yeah. It used to be about all the things that can go wrong.
Speaker 1:But then also look at Like, working capital and We're at a point where, like, Aura and Whoop Yeah. Are, like, big businesses that I, you know, I don't know Yes. Like, ultra specifics on either. But I I bet that Aura will be a really big company in
Speaker 2:ten years. From my perspective, it's almost harder. It's not it it is hard to make the device and manufacture it and deal with the fact that 90% of your revenue comes in Christmas. But, like, the real hard part is actually changing consumer behavior and getting someone to take off their Apple Watch or add a Whoop band to the other wrist, which is, I think, the predominant pattern for most Whoop users. But, what what what are you looking for in hardware startups that you're looking at?
Speaker 2:What are the pitfalls that you wanna see founding teams overcome before potentially backing them?
Speaker 11:Yeah. So I'll I'll I'll say I don't have a a massive background in hardware. I mean, will say I was I was at scale.
Speaker 6:You know, I
Speaker 11:was relatively early there for you know, and was an engineer there for four years and then a PM. And we worked with a lot of hardware companies there. So, I mean, the main customer of scale back in the very early days was self driving car companies Yeah. And robotics companies.
Speaker 2:Yeah.
Speaker 11:And so I have seen just through to working with them as customers, you know, some potential pitfalls. And, I mean, the the the quip is that hardware is hard. Yeah. You know, that you've got all of the challenges of building a company, and then you've also gotta just manage supply chains, and you have to be a lot more careful about, you know, the economics. You know, software is usually relatively high margin or it's easier to make it high margin.
Speaker 11:Hardware, obviously much harder when you've got to figure out where all these materials are coming from and ramping up. So even if you have demand, like ramping up in a sort of scalable way, and then also implementation can generally just just take a really long time.
Speaker 2:And it distributes at the speed of the Internet. Like, you can go viral and get a hundred million people on a website in the day. You you just can't ship a hundred million things anywhere in any reasonable amount of time. It just takes time.
Speaker 11:Like, maybe one day. Maybe. But, yeah, it's, like, interesting to remember. Like, Waymo was founded in in 02/2009. Yeah.
Speaker 11:Right? So, like, just as that like, it took,
Speaker 2:you know Overnight success.
Speaker 11:Twenty years to now become this overnight success. But
Speaker 2:yeah. You mentioned robotics. I'm interested in the pools of training data that are out there. We've been joking about Scale AI. Are they gonna put everyone in motion capture suits eventually to get to the humanoid datasets?
Speaker 2:There's also a lot of work being done in in simulated environments. Is there a data wall that we're gonna run into with humanoid robotics? How are you thinking about the data challenges in robotics generally, whether that's in the humanoid side or or elsewhere? Because it feels like the humanoid narrative is taking hold. People are funding companies.
Speaker 2:It's getting big. But if it's a sixteen year journey like it was with Waymo, we could be, you know, in for in for a long one here.
Speaker 11:Definitely. Definitely. It's been interesting. I mean, like, I do think there are a lot of really good arguments for why we'll see robotics, like, progress accelerate. Mhmm.
Speaker 11:And that's really you know? Obviously, the the data is more challenging to get. You know, we it's not like you can just scrape the Internet like we did with a lot of these these LLMs, and the data is kind of, like, there and and ready for the taking for at least, like, some of the early transformer based models. Though with an asterisk, like, as as we're now moving into agents, I actually think you have to be more intentional about creating different types of data. But then now with robotics too, like, you know, you've gotta figure out ways to get real world data, whether that's, you know, internally or using somebody like a scale, or, you know, there's a lot of really exciting work going on in world modeling and simulation.
Speaker 11:And so, you know, I think, hopefully, a combination of being really intentional about the data both on the sort of, like, human collection side and then also some of this work that we're seeing in simulation and world models will hopefully mean that, you know, we don't all hit this data wall and we'll be able to to sort of scale these systems more effectively. However, I mean, with robotics, it's always a little a little bit challenging to tell what that exact timeline is.
Speaker 2:Yeah. Interesting. We were talking earlier about, the agentic, the coding market, the AI coding market. I was kind of breaking it down to you. And is it three markets?
Speaker 2:Is it two markets? Is it synchronous work, asynchronous work? Is there a consumer, prosumer, bottom up enterprise, top down enterprise, sales motion? How are you thinking about just AI coding generally as a market as the businesses, evolve? Just give me kind of where you're at, and then we can kind of tug on that thread in a bunch of different ways.
Speaker 11:For sure. My favorite my favorite topic of conversation, definitely one of my favorites, AI cogen, near near and dear to to my heart. But, yes, as a disclaimer, so I'm I'm on the board of this company, Windsurf. Yep. So AgenTic IDE, AI powered developer tooling platform.
Speaker 2:Yep.
Speaker 11:Yeah. It's been it has been just utterly sort of shocking to me. Like, you know, when you invest in a company, you expect, like, okay. You know, think hopefully, things will go well. Like, hopefully, the market will be there.
Speaker 11:And I just don't think anybody I don't think anybody really saw this coming just in terms of, like, how widespread tools like Windsurf would become. Yeah. And so right now, you know, you're certainly seeing, like, there's this sort of segmentation specialization. You know, you have tools like Windsurf and Cursor, that are, you know, prosumer. So you've got people even with basically no coding or definitely no coding experience that are able to get up and running very quickly with these tools and really sort of, like, talk to it.
Speaker 11:And it acts like this sort of programmer that will, you know, like, respond to what you wanna do. Maybe it comes back and it comes back with an error, but it can maybe autonomously fix that error once you kinda give it some more guidance. And, you know, it's just been incredible seeing like, you know, even even though I talk about Windsurf all the time, my father-in-law who I never mentioned it to, not a programmer. Just like once he was on a on a we were just talk all talking. He's like, Cooper, you gotta go.
Speaker 11:You're a VC. You gotta go check out this company, Windsurf. I'm, like, using it to, like, you know, help me out at work and create apps. And I'm just like, wow. This is incredible.
Speaker 11:Just how widespread he's, like, you know, outside of Silicon Valley, all of that.
Speaker 2:So So for those types of tools, I mean, you don't have to talk speak about Windsurf specifically, but just how much of it is just a ton of people on small consumer plans versus bottom up enterprise adoption that gets rolled into a much larger consumption based plan or even, like, a seats based plan? Like, how is how is the market for AI tooling in the enterprise evolving in terms of pricing? Because we've seen Salesforce is talking about we want to price things not based on seats, but based on resolutions of customer service tickets. You could imagine charging someone for lines of code that get approved in pull requests or seat based or usage based or just pure inference based. So how is that how is that side of the market just evolving broadly?
Speaker 11:Yeah. I mean, so what we're seeing is, you know, there's certainly the the prosumer segment for these tools, but it very quickly, goes up, you know, bottoms up into the enterprise. And in particular with Windsurf, I mean, from day one, we've been quite focused on the enterprise segment. And so it's, you know, we're we both have a large enterprise sales team and then these tailwinds from now all these prosumers and then, you know, sort of like professional developers that that pick it up on their own and bring it in into their company. I think pricing, it's it's always interesting.
Speaker 11:It's something that we constantly think about. It's a very competitive market. So, I mean, you know, you also have to kinda pay attention to to what other people are doing. I mean, per seat, easy to understand. But then, you know, obviously, a lot of these models, you know, cost money to run, and so you've gotta figure out some sort of either credits or usage system.
Speaker 11:I don't think, you know, encoding where you got to the point where it's, you know, let's price based on outcome. Like, oh, well, if we get this done, then then you pay. Like, maybe, you know, I've seen sometimes in, like, customer support and things like that. But, yeah, certainly having, like, a usage element, think, is pretty pretty
Speaker 1:pretty cool. What's your reaction when an entrepreneur pitches you and they're like, well, we're we're building agents to go after this labor, this like end labor market and Mhmm. And the the TAM is, you know, a trillion dollars because they're just adding up like global payroll for like that type of work. Like what's your reaction to that? Is that the wrong way to think about market sizing if ultimately these are software products that can be delivered very inexpensively, which will ultimately create competition and drive maybe pricing down for that end service.
Speaker 2:Mhmm.
Speaker 11:Yeah. I mean, def definitely definitely some good points. I mean, generally generally, I'm pretty optimistic. I think now just like kinda living through the cogen market where, you know, just to use this as an anecdote, you know, GitHub Copilot came out. My first kind of pessimistic reaction was just like, oh, well, this is, like, so useful already, and GitHub's got all these advantages.
Speaker 11:Okay. This, like, market's done. And they will be like, okay. Every developer, like, uses it, and then it's kind of over. And and it just the opposite of this happened.
Speaker 11:Like Yeah. It turned out that there is a lot of white space in the market for teams to innovate and to create really great product experiences, whether it's a startup, whether it's a foundation model company. And then also just, like, I think the market blew my
Speaker 2:the secret? Yeah. What was the secret to either the the the challengers to GitHub Copilot? I I haven't really used them. Is it is it more driven by flexibility around which model you're plugging into and and and GitHub Copilot kind of locking you into their model and not moving quickly enough?
Speaker 2:Or is it something more on the user experience side?
Speaker 11:So I forgot the exact date. GitHub Copilot started, I think, OpenAI only given the sort of relationship. But it relatively quickly moved to an option. So it's currently
Speaker 2:So you can put in Claude three point seven Sonnet, which everyone loves.
Speaker 11:Yes. And I think, actually, recently, you know, I I think I was reading this this morning, but, you know, you know, GitHub announced, like, okay, for these particular features, we're gonna go with Anthropic only. Mhmm. Like, particular back end features. So it's clear, like, you know, their their GitHub is not locked in to to one model provider.
Speaker 2:Yeah.
Speaker 11:I think, you know, what Cursor, Windsurf, and others have done is just create, you know, different product experiences. Mhmm. And obviously, GitHub Probiotic is still doing very well. But I think what this is all has told me and kind of back to your original question was these these markets are actually much bigger than we give them credit for.
Speaker 1:Mhmm.
Speaker 11:And so when I'm kinda sort of being pitched maybe a ridiculous TAM, sure it's probably good to like verify that and really drill in on that. But I mean, we are in the world where now software can do work. And so you do have to kind of you know, you don't just get the sort of TAM being, okay. It's the, you know, incumbent software spend. I think you have to also realize once the product gets that much better, people will want to buy more software and then also think about it as a work replacement.
Speaker 10:So Mhmm.
Speaker 11:You kind of get all these kind of bonus markets that, you know, TV, you know, end up being just like this huge thing.
Speaker 1:How do you how do you how do you process the tension between model providers kind of figuring out if they're wanting to end the own consumer or be a platform? I mean, the the most obvious example was Windsurf didn't get immediate access to Anthropix new models, which seems, you know, I'm sure you can't comment on that specifically or maybe maybe you wanna come in with a put him in the hot seat. But yeah, I I it just feels like Give the lawyers a heart attack.
Speaker 2:Just do it.
Speaker 1:It feels like a very real tension that's gonna have to get resolved quickly Yeah. Because these are all big companies now Yeah. Or at least the main players are big companies. There's billions of dollars of revenue on the line. Everybody's in a, you know, constant race to be at the edge.
Speaker 11:You're right. I prob probably shouldn't say too much. I mean, what I what I what I I will say, yeah, it's something that I think is going to have to be, you know, addressed in the next year or two. Like and and I think it's just very clear that cogen in particular is this is this market that everybody kind of wants to get into. Yeah.
Speaker 11:You know, I do ultimately think that, you know, I'd be shocked if in a year or two we don't see cogen products that are both, you know, synchronous. So like assistant, you know, I can talk to it. And from the same interface, I can delegate task. I just think that that is something that a lot of people are building towards. Mhmm.
Speaker 11:It's like there isn't a great experience today that kind of has both. Yeah. At least, you know, sort of a generalized both. But, I mean, ultimately, like, all these companies are, I I think, gonna, in the in the sort of, like, even medium term, come up against each other. And ultimately, what you want is sort of this distribution.
Speaker 11:And I think, you know, all these companies too are realizing you also want the model, and you wanna be able to, you know, give yourself really favorable favorable economics. So, yeah, it's it's gonna be a super exciting even, you know, probably probably six to twelve months. I imagine What? Lot.
Speaker 1:Legal, the the sort of legal AI space has been heating up. It kind of a weird, you know, interesting comp. In many ways, felt like Cursor had like a ton of mindshare and then Windsurf just kind of exploded. People realized how quickly it was growing. At least that was my perception.
Speaker 1:And then Harvey similarly has been more in the sort of cursor bucket and that like tons of attention, bunch of rounds back to back. And then Ligora came out of feels like it came out of nowhere, they raised a big series B this week. Is there, are you, do you have a a kind of prediction or a take on what the next category to see these sort of battles play out? I'm sure you guys already have some bets in whatever category that is.
Speaker 2:But She's already on the board of four companies that are gonna dominate it. She's like
Speaker 1:The next four categories.
Speaker 2:Actually, I had
Speaker 1:to jump
Speaker 2:to the board meeting exactly what you just said.
Speaker 11:Yeah. Yeah. You know, I'm I'm I'm very lucky in that, you know, I think I mean, even before I joined, so I've only only been at Kleiner Perkins for two years. And even before that, a lot of my partners made really great app investments. So for example, my partner, Amun, incubated Glean.
Speaker 11:Yeah. Which is now kind of the enterprise knowledge discovery platform in this kind of new AI era. Mhmm. So certainly like we've got a lot of apps in the portfolio. I mean Harvey, we did did their series b.
Speaker 11:Ambiance, which is MedicalScribe also in the news recently, we did their seed in series b. So and then, you know, we have some some investments in sort of sales AI as well. I work with this company, Nooks, which has started with a power dialer that people really like and is now expanding into other other parts of assisting salespeople with AI. I'd say, like, those, you know, those categories plus maybe add customer support, which we don't yet have kind of a generalized play in. Those are kinda like the the battleground spaces.
Speaker 11:These are where it's going down right now. Like, it's clear. The models work for the use cases. It's clear there's a giant prize at the end. And so you've got, you know, inevitably, a lot of companies competing for it.
Speaker 11:In general, especially with software, you know, I think it's basically impossible to be the only company in
Speaker 4:your debt.
Speaker 1:Can you fund a company that will just pick up the phone when I get, like, a robo AI call that's, like, trying to do some social engineering hack or whatever and just pick up the phone and waste their time
Speaker 2:Waste their time.
Speaker 1:Really inexpensively. That's I feel like that's what
Speaker 2:I some cybersecurity companies out there. Yeah.
Speaker 11:I think I've I think I've actually been pitched been pitched one. I have to I would have to find the name. But
Speaker 1:That's right.
Speaker 2:Well, what do you think about competition from the hyperscalers? Obviously, Microsoft Build and Google IO happened this week. And there's one narrative that's like, oh, so many startups are now just bullet points in a Google IO keynote. But Ben Thompson wrote shortly after Google IO that Google only cares about search, and they only win when it's directly impactful to search. And so you might, as a startup, not need to worry if you're doing something that's more in the labs or experimentation phase for Google, and Google is more just almost doing it as a demo of their of their platform, and then they really would be fine with another company just buying a bunch of TPUs on GCP and and and building a real company on top of, their innovation.
Speaker 2:But how are you thinking about startups competing in these new AI markets with the legacy incumbents?
Speaker 11:Yeah. It's it's it's a it's a really good good question, and it's something that I think about a lot. Just been, like, obviously, you know, somebody like Google has giant advantages, distribution, money. I mean, Google literally created the, you know, first transformers paper. So, I mean, certainly certainly, it's something that whenever you're investing in in an app company in particular, you know, you you need to, I think, at least think very deeply about what's what's the road map of of all these companies, OpenAI, Anthropic, etcetera.
Speaker 11:I mean, certainly certainly seems like sort of areas in search and sort of, like, social and and prosumer that, you know, seem like kind of the most under the microscope with these big companies. But, you know, it it wouldn't shock me if they tried tried to compete in some the other app categories we talked about too. So
Speaker 2:Yeah. It's
Speaker 11:In general, though, startups, I I like to bet on startups.
Speaker 1:Yeah.
Speaker 9:Of
Speaker 11:focus is important. And then, you know, I think if you move fast, if you're very strategic
Speaker 2:Yeah.
Speaker 11:There are a lot of good sort of, like, wedges you can sort of start with and then Yeah. And then expand from there.
Speaker 2:What about M and A markets in particular? I mean, my my reaction to the Windsurf acquisition was and it's gonna be kinda hard for you to answer this, but was was basically that, like, woah. Like, maybe that whole meme of like, oh, don't build a chat GPT wrapper or whatever, maybe that was overblown. Maybe that there's going to be a lot of app layer companies that gets scooped up. Obviously, OpenAI is moving very quickly, so they're kind of early to this.
Speaker 2:But you could imagine every hyperscaler needing application layer AI companies to slot in, especially if they've had distribution and they've actually scaled revenues and they have a really great team. And it feels like unlike in the previous era, like, hyperscalers
Speaker 1:are
Speaker 2:more sclerotic than ever. It's been fifteen extra years. They're less founder mode. And so I don't know what your read is on the M and A markets broadly, but how are you thinking about the hyperscalers approach to staying on the leading edge of these AI application layer companies?
Speaker 11:Yeah. I mean, I think it's important to remember, and I have to remind myself that Chad GPT is less than three years old, I think. So it's like, this is happening so fast. Yeah. And so when you think about, like, I'm a hyperscaler, and I see a market that does, like, makes sense for me strategically
Speaker 2:Mhmm.
Speaker 11:You know, is it really faster for me to go and try to build it internally? Mhmm. Or is it faster for me to find a really great startup perhaps with expertise that I don't have
Speaker 1:Mhmm.
Speaker 11:And maybe, you know, some other advantage, whether it's the product or the distribution or or something else, and then, you know, explore explore partnership conversations with them. And so, I mean, you know, the one one, you know, acquisition I I can talk about is I a company that I worked with at at Founders Fund and and still on the board of Neon is partnering with Databrick. Cool. And it makes sense because it's like, you know, you've got this team of database infrastructure experts, and then you've got this company who clearly wants, you know, their customers to be able to realize the full potential of AI agents. And so you do need, you know, a database and memory, for those agents.
Speaker 11:And so, you know, it it's certainly now, you know, now I'm trying to think in my mind, like, oh, well, what what are the other categories that that that hyperscalers might might might be looking in, and and what makes the most sense for each one?
Speaker 1:Mean, the the the big one to me that I'm trying to figure out is just video generation, which we had all I wouldn't call it a Ghibli moment this week, but v o three was was close. Took a little bit. It just takes a lot more work, and it's harder to get a consistent quality output.
Speaker 2:And there isn't a single meme where everyone like, Ghibli thing was like, just take your profile picture, take your whatever's in your camera roll. Two words, boom, one shots, and you have something cool. Yeah. With b o three, you have to be more creative with the prompts
Speaker 1:and more Well, the interesting thing there is I can it's so easy to imagine in the future where consumers are using video generation tools daily Yeah, just for fun. Oh, totally. Yeah, there's there's some like consumers just like making memes on the internet. Then there's like kind of prosumer SMB. Yep.
Speaker 1:I'm gonna make like an advertisement.
Speaker 2:Yep.
Speaker 1:And then there's the like Hollywood studio that's like, I'm gonna make a movie Yep. Or independent filmmaker. But where companies kind of fit into that, I can see a world in which hyperscalers are kind of dominating. Like Meta, for example, figures out a way to get really good at at at video generation because it fits into the Meta ecosystem or YouTube, you know, with with v o three. And I think that from my point of view, can see some of these more independent foundation labs that are focused on video having to really move up market to actually dominate because that feels like an area that like Google's not gonna necessarily build the thing that creates the next blockbuster video.
Speaker 1:Yeah. But if you're competing for the prosumer SMB, feels like a really tough place to compete Yeah. Purely from a cost standpoint and with YouTube or Google's sort of YouTube data advantage.
Speaker 2:Yeah. Yeah. I don't know. Any any any reactions to vo three this week?
Speaker 11:Oh, I mean, super cool. Yeah. And we were playing around with it. My husband's a founder, and he was, like, trying to make this new new video for something that they're developing internally. And, oh my god, just insane.
Speaker 11:So it's, yeah, really cool. And, I mean, I I I kind of agree with some of the points that have been made. But then on the flip side, I will say, like, especially in video, there's so many really great models, and they excel at a variety of different things. And so if you're, like, kind of a third you know, a startup that is not connected to I mean, Google obviously is developing their own models. So if you're not connected to any one of the particular models and you can offer, like, kind of a best in class, like, okay, you can pick from, you know, many of them, maybe maybe that's an opportunity or if you're in sort of, like, very, very specialized.
Speaker 11:So, yeah, mean, generally still optimistic just kind of given at this point, there's not, in my opinion, a ton of platform risk. You've got so many of the hyperscalers and labs, like, that are both closed and open source offering these types of models.
Speaker 2:Yeah. Very cool. Well, thank you so much for stopping by. We'd love to have you back. This is fantastic.
Speaker 2:Yeah.
Speaker 11:This is great. Thanks, guys.
Speaker 1:Super fun.
Speaker 4:Alright. Bye.
Speaker 11:See you later.
Speaker 2:Really quickly, let me
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Speaker 1:Thank you to Vanta.
Speaker 2:Thank you to Vanta. Anyway, we have our next guest coming in, Steven from Lambda Labs. We've had Lambda School on. We're waiting for Steven.
Speaker 1:Should we
Speaker 2:get some timeline? Yeah. Let's get some timeline. What's did you see Yohay? Pocket is shutting down.
Speaker 2:And so this
Speaker 1:We need a
Speaker 2:sound Creator, basically.
Speaker 1:A soundboard that says,
Speaker 12:moment of silence.
Speaker 2:Yeah. Vibe coded a quick free open source prototype with some AI features called Keepyard. It still has issues, but I challenged myself to push this in one night. I thought this was very cool. I've been joking about we need someone to vibe code a new Google reader since that was such a popular product.
Speaker 2:It should just be out there, and, and it's already starting to happen with replacements for Pocket. And, it seems like Steven's in the studio, so let's bring him in and talk about Lambda. How are you doing? Welcome to the stream.
Speaker 9:Hey, guys. How are you doing?
Speaker 1:Welcome. Great. How are you? Thanks for having
Speaker 9:me on.
Speaker 1:It's good
Speaker 8:to see
Speaker 2:you. Looking fantastic, by the way.
Speaker 1:For wearing a suit.
Speaker 2:You know? Thank you.
Speaker 9:Naturally, I guess, when in Rome. But Yeah. That said, this is how, you know, everyone in Silicon Valley should dress.
Speaker 2:I agree. I agree. I agree. Just a heavy Are you in Silicon Valley right now? Can you give us a little
Speaker 1:Oh, drinking a monster. Introduction. Drinking a monster. Let's This
Speaker 2:is so on brand. It's amazing.
Speaker 9:So so I'm actually in my hometown of Charlotte, Vermont. Oh. That's where I grew up.
Speaker 2:Yeah.
Speaker 9:And it's where I live.
Speaker 1:Great.
Speaker 9:And just got back from landed this morning from that stuff.
Speaker 2:Nice. How how would you describe the business these days? I know that
Speaker 1:Well, first, gotta talk about the AI scene in Vermont.
Speaker 2:Oh, yeah. Picking up?
Speaker 9:You know, I'd say that there's there's there's there's like one or two one or two companies. There's a lot of, I'd say independent minded founders out here. But generally speaking, I'd say it's more of a farming farming.
Speaker 1:Yeah. My little my little brother who's not in tech went to college in Vermont and just stayed. I've I've tried to get him to come back forever. He's committed committed to to the great state of Vermont. But
Speaker 2:Well, let's introduce him to Masayoshi Son, and maybe he gets started with, you know, building an AI company out there.
Speaker 1:It could happen.
Speaker 2:It could happen.
Speaker 1:It's not off the table.
Speaker 2:So, yeah, brief introduction. How would you introduce the company? How are you describing, the different offerings and kind of challenges right now?
Speaker 9:Yeah. So Lambda is an AI cloud. Mhmm. It's a essentially really massive GPU cluster that all kinds of startups and hyperscalers use.
Speaker 1:Yeah.
Speaker 9:And we've both sort of taken invested a ton of work. It's it's basically around a billion dollars worth of GPUs that we've deployed.
Speaker 10:Wow.
Speaker 9:And we've invested, you know, at this point, probably around a hundred million dollars into the virtualization software that allows us to essentially take that massive cluster of GPUs. So you can imagine taking a cluster, let's say, 16,000 GPUs.
Speaker 2:Mhmm.
Speaker 9:And you can sort of dynamically partition it and hand out little slices to people Yeah. You know, on a as as little as a fifteen minute basis. And the the it's it's it's it's quite different from, let's say, a bare metal cloud where you need to sign a three year contract. We've we've basically implemented all this virtualization software that lets you hotel on and off of it Sure. While still, you know, maintaining high speed Yeah.
Speaker 9:InfiniBand interconnect.
Speaker 2:The meme. You another billion dollars for Jensen. How many billion
Speaker 9:dollars for Jensen.
Speaker 2:Is it is is it actually primarily NVIDIA chips, or, are there other, GPU providers that are competitive at this point? I've been following George Hotz's journey with AMD. Yeah. Is is anything competitive with with NVIDIA right now from your perspective?
Speaker 9:I don't think that there's anything that's competitive with NVIDIA right now.
Speaker 1:Yeah.
Speaker 9:What you just see in the customer demand is in, you know, total and utter NVIDIA supremacy.
Speaker 2:Yeah.
Speaker 9:And I think that this is gonna continue on for some time. The the test I always like to say is you you've got to get a customer. They've gotta be able to download kind of any arbitrary model off of Hugging Face, run that model, train the model, fine tune the model, and then they have to buy from you and then buy again. Right? So they that's that's that's the test, I think, for any chip manufacturer.
Speaker 9:And it's really hard to get a stable software stack.
Speaker 2:Do you like the term Neo Cloud? Is that appropriate?
Speaker 9:You know, I think it's I think it's fine. I don't I don't really have any opinion on on it. I we kind of look ourselves as we've always described Lambda as what would the cloud look like if it was reinvented from the ground up for AI. Mhmm. You know, training and inferencing large language models, training and inferencing large scale neural networks.
Speaker 1:Yeah.
Speaker 9:And I think that NeoCloud's an appropriate description for for that concept.
Speaker 2:What is the balance between training and inference right now, and how has that evolved over the last couple years?
Speaker 9:Yeah. So, you know, we we're we're for for for the overall business, we're we're just we're we're just a bit over $500,000,000 of top line revenue. And I'd say that
Speaker 4:Size gone.
Speaker 9:Essentially Congratulations. Thank you. Thank you. Essentially, historically, that's been majority training and then sort of minority interest, you know, maybe eighty eighty twenty for for, you know, training to inference.
Speaker 2:Mhmm.
Speaker 9:And now we've started to see that kind of switch over. Mhmm. I would generally say that when I see any sort of net new deal in the in the space for large scale GPU capacity, it tends to be more inference driven these days. Sure.
Speaker 2:That's great. We're actually using the models. It's not just training ever bigger models with no with no I mean, we saw that at Google IO, Sundar Pichai pulled up the chart of tokens generated, and it's just completely up into the right.
Speaker 9:It's completely up into the right. I mean, you training is always gonna be something where you do it once, and the whole point of training is that you wanna amortize that over as many tokens as possible. Right? Because that's just your fixed cost that you're you're wanting to spread across as many generations as possible. And so that's the point.
Speaker 9:The point of training is inference.
Speaker 1:Yep.
Speaker 9:We're there. I always kind of look at this as like like a I always like to sort AI companies by revenue and just go, okay. Well, who's at the top? Probably like OpenAI today. Mhmm.
Speaker 9:You know, 4,000,000,000, 5 billion. It's it's it's a little bit hard to, you know to to exactly guess. But then, you know, next one down, you kind of look Anthropic
Speaker 2:Mhmm.
Speaker 9:800,000,000 last published, mostly developer API Mhmm. But probably fast growing. I would imagine they're probably in the billions now because Mhmm. Sonnet three seven was really good for code generation. Yep.
Speaker 9:Google doesn't seem to be charging from what I can tell. They're charging you
Speaker 2:$250 a month now just to
Speaker 1:It'll pop up to 500 too.
Speaker 2:So what they're getting my money? What are they charging for $2.50? So I am now on the Gemini Ultra plan. Okay. And, and I have 2.5 pro preview, and then I also have access to v o three, but it's very limited.
Speaker 2:Like, they can only generate two or three video clips per day. It's heavily throttled. But it's a $250 a month plan right now, and it's gonna jump up to $500 a month in a few months. So I imagine that across Gemini Pro subscriptions, they're probably gonna grow that pretty quickly just because I'm seeing the number of five
Speaker 9:star Zero to billion dollars in
Speaker 2:100.
Speaker 9:In a couple weeks. Right?
Speaker 4:Absolutely.
Speaker 6:Yeah. And
Speaker 9:so when you kind of do that breakdown, what do we see in terms of like total top line revenue? It's all inference. Right? I
Speaker 2:mean Yep. Totally.
Speaker 6:All of
Speaker 9:that is inference demand whether it's image or chat GPT or or or video generation. And then you know mid journeys probably you know in the hundreds of millions of dollars Yeah. Revenue run rate. And so there's some substantial businesses that are being built right now.
Speaker 1:What are some kind of narratives What what are some narrative violations things that you feel like the broader ecosystem is getting wrong right now given you guys have unique insight into actual usage and activity?
Speaker 9:Yeah. Okay. So the the the first one is just, obviously, I think if you look back, there was that, that Sequoia, ThinkBoy piece, that was published on, like, where's the Jeep, you know, where's the AI revenue? What's you know
Speaker 2:Sure. Sure.
Speaker 9:Did that. It would it there's there's a lot wrong with that analysis. So I don't need to go into that but I'd say like the general pessimism of like, oh, it's a bubble. It's bubble. It's a bubble.
Speaker 9:Yeah. I I just remember, you know, I started Lambda in 02/2012. '20 '13 was the year that, like, Mark Zuckerberg went to Neuroscience and hired hired Yann LeCun to to start Facebook AI research at the time. And ever I just remember everybody in the field kind of at the time looking at, oh, is is is it a bubble? You know, Google's just bought DeepMind and
Speaker 12:Yep. You know, Facebook's
Speaker 9:buying Jan Lecun. So it must be a bubble because because Mark Zuckerberg just came to NeurIPS. But I think that I think that in general, everybody underestimates how just what exponential growth looks like from you know, it it always looks the same in the the the same you you know, wherever you are, it always looks looks essentially the same. And how good the code generation has gotten over the last ninety days. Right?
Speaker 9:If you were to flip back before January, you know, state of the art for code generation was four o, and then o o one hadn't even I think been exactly released yet. With o one, o four, Claude Sonnet three five three seven, all this stuff, the code generation is getting so good that we I I think I can say here, which is in a couple of years, you're just gonna have a function that goes from cash into software. And that is gonna completely change the way that businesses operate because, you know, you're gonna spin up 500 different versions of the piece of software that you're searching for. You're gonna be able do this sort of, like, high throughput search through software space, and it's gonna spit out a bunch of things. It's gonna have, like, a maybe a taste maker model that just rates it based off of, you know, the computer use compiled version of that software.
Speaker 2:It's like,
Speaker 9:well, these are all the source code bases for all 500 pieces of software. These are the top five. I'd recommend you launch this one. Go for it. And I think that's gonna really change the way that the world operates on the in in technology.
Speaker 2:So should you learn to code if you're a teenager?
Speaker 9:Yeah. Absolutely. I I think that you you still you still need to learn how to code. I I I don't see I I think it's it's really hard to in the intermediate period, you're still gonna need to to learn how to code. Sure.
Speaker 9:I think that you're just gonna see just much higher leverage teams in the world. Right?
Speaker 2:You might always need to think like a programmer and so learning to code is part of that process. That makes sense. What about the evolution of chips and semis?
Speaker 1:Before we dive into that Sure. I I feel like there's this general thesis that sort of we we've talked about this on the show, this idea of like, we call it like Jiro dreams of sushi Mhmm. Software. Right? This like really craft
Speaker 2:More art than science.
Speaker 1:More, yeah, art and science, like super intentionally built software that that is just, you know, super, super thoughtful. And you can see this in companies that, like, maybe go after a category like CRM, where it's like, okay, Salesforce dominates CRM, but they come in and they build this sort of really beautiful, really thoughtful experience. And and typically, if the teams are good enough, they'll end up doing doing well. I I think there's this sense that, like, that class of software is, safe from completely AI generated software. But in the in the scenario you laid out where you generate 500 different variations of a potential tool that you'd use and it sort of automatically ranks it based on some taste driven benchmark, is is it possible that that class of software is is at extreme risk to disruption as well?
Speaker 9:Yeah. Certainly, I think anything that's just software is at is at extreme risk. You you look at a business like Salesforce. Right? It's almost as if I mean, how important is the software?
Speaker 9:How important is the brand? How important is the distribution model? And and I think that when you look the bigger the company gets, the more important the the latter become. You know, the distribution model, the the brand of the company, how deeply embedded it is inside of the day to day life of the customer that's using it. And it's sort of like, well, what is the value of Salesforce?
Speaker 9:Is it the software? No. Not at all. The value of Salesforce is the fact that every single company in the world, the first thing they they do when they hire a VP of sales is like make sure they have a Salesforce implementation, and then it sticks with the company until they're of S and P 500 component. And then all of the company's data is in Salesforce.
Speaker 9:Right? Does that have anything to do with the software that Salesforce has written? Is that the anything does does does the mode have anything to do with the replacement cost of developing the software?
Speaker 1:Crowd app. Yeah.
Speaker 9:No. No. Right? So it's kind of interesting because, like, stuff like software will be solved, but then stuff like how do you build moat and how do you build a business won't be solved. So it's sort of like maybe just, you know, this is we're in the we're in the world for just the the the business cofounder dominates.
Speaker 2:The idea the era of the ideas guy. The era of the ideas guy is upon us.
Speaker 1:Yeah. That's amazing. Yeah.
Speaker 9:That would be a really
Speaker 4:exciting I
Speaker 2:I I I wanna talk more specifically about the the the path to this future of, like, turning money into software and creating value that way. What is more important? Just bigger training runs, knocking down higher MMLU numbers, benchmarks, higher IQ points versus distilling models, faster inference, cheaper inference, baking some of these models down into silicon, what we're seeing with etched and and putting the transformer architecture on a chip, they seem like two different vectors. Every time a new model comes out, my reaction is always like, well, this is good enough. I just want it to be faster.
Speaker 2:And so mid journey v six or whatever, I'm usually just like, yeah. I just love this to be instantaneous as soon as I type the words just generating in milliseconds. At the same time, the labs seem to be iterating towards bigger and better models, and they and and they they have a mentality of, like, jobs not finished. But what's your take on on those on the trade offs there?
Speaker 9:Well, what we're seeing with the advent of reasoning models Mhmm. As well as, like, the the the models that basically will do reasoning and then sort of, like, retrain the model to not do any reasoning, but sort of baking in the reasoning Mhmm. Is that this the the amount of compute that you you know, the the the performance improves is a function of how much runtime compute you do. Yeah. And so if you can make a faster model, and you can reason faster about it, you you could you can make an argument that that that actually, might perform might perform better, in some circumstances.
Speaker 9:I think that we're we're gonna see all dimensions of that space explored by a variety of companies. You know? There will be people out there at the edge building the biggest frontier models. There'll be be people quantizing and distilling those models down to something that runs locally on your phone. That was actually kind of one of the things I did before this iteration of of of where Lambda is.
Speaker 9:It was sort of trained conv nets that ran locally on the on the iPhone.
Speaker 2:Oh,
Speaker 9:wow. And this is, like, 02/2013. And it it you kinda see the same thing. There's use cases for that. It's super useful.
Speaker 9:You you can have privacy preserving image recognition on your phone.
Speaker 2:Yeah.
Speaker 9:But it's not gonna be the same quality as, like, something that goes back to a data center. I think, actually, if there's one narrative violation just going back to, you know, you said this, like, world of software generation. A lot of people are kind of stuck in this. Like, okay. AI is is generating software.
Speaker 9:And I've got this entire, I think, thesis on where the future where we're going, you won't need any software at all, and that the neural network is gonna completely replace all of the software. And so let me walk you through this. The idea is that instead of generating a program, let's say a calculator or an Excel spreadsheet, just go to chat GPT and say, hi. Please behave like a program. Please behave like this calculator or behave like this spreadsheet.
Speaker 9:Generate an ASCII user interface for me. And I want you to essentially just respond, you know, implement the logic of that program in your mind. And that is what I call neural software, and it's really squishy. You know, normal software is really brittle. Right?
Speaker 9:If you make a typo, you you leave a keyword out, you miss a semicolon, it's not gonna compile. This type of neural software, it's not really possible to have a bug. It's really more just that you've have a misunderstanding or you've misprompted it or something.
Speaker 2:Mhmm.
Speaker 9:And I think that that's where all of this is going. It's not code generation, but it's gonna be your your large language models are gonna be, you know, sort of take over more and more of program space. And you you will be largely interacting with these sort of transformer models or next, you know, token, you know, prediction models generally, and they will be the software that you interact with.
Speaker 2:What about diffusion models? We saw Google bring diffusion to text models. Yeah. I was seeing something like 900 tokens per second. Yeah.
Speaker 2:They generated I saw a demo where someone generated a full calendar application. All the code for the calendar application in three seconds. It was 3,000 tokens or, something like that. That feels like, a, you know, an algorithm from image generation that now we're seeing in the text world. Simultaneously, we're seeing images in ChatGPT maybe do something more transformer or token based.
Speaker 2:And so these lines are blurring. Can you give us any insight into what's happening there? Is that exciting, or is this kind of just, in the experimental phase?
Speaker 9:Well, I mean, this is like if it's whether it's exciting or not is gonna kind of answer the question you had earlier, which is how successful are baked in transformer ASICs gonna be? Right? Sure. Because sort of, like, as the space, the underlying space changes
Speaker 2:Yep.
Speaker 9:Then every one of those sort of ASICs now becomes a lot less valuable.
Speaker 2:And Yep.
Speaker 9:You kinda have to go back to the the more general tensor processing that you see inside of tensor cores and you see inside of the architecture of, like, things like TPUs.
Speaker 4:Yeah.
Speaker 9:And away from, you know, really specific things that have to do with, like, the KV cache and different transformer specific architectural things you might wanna put into, an ASIC. And so I think that it's it's interesting to see you you've got diffusion models. You've got things like Mamba, and and where where where there's there's alternatives to the transformer that have, what's what's called basically linear complexity in terms of the, the the amount of memory, that that you're that you need for the context length growing, which is better than the quadratic complexity you see inside of normal transformer models. And I think there's there's gonna continue to be a lot of innovation in the model architecture space, and that will probably benefit NVIDIA a lot.
Speaker 2:Got it. Are there any other side projects in semiconductors that are exciting to you? Huge wafer scale computing like Cerberus. We talked a little bit about baking things down onto, ASICs. We saw that path play out with Bitcoin, with the FPGAs, and then the ASIC kind of Bitcoin mining.
Speaker 2:There's other approaches, and I'm sure NVIDIA is not asleep at the wheel. Jensen Huang's in founder mode. He's He's he's he's aware of the boom. He's aware of the demand. I'm sure people are asking him, how can we run diffusion models faster?
Speaker 2:How can we run transformer models faster? What are you expecting on the semiconductor side over the next, like, few years?
Speaker 9:Well, I it's pretty clear that I I'd say the the front runners for competing with NVIDIA, which are all very far behind NVIDIA, but the ones that are sort of, I think the farthest along is probably I would say today is Google and to some extent Amazon with Trainium and Inferentia. Yeah. That space is always evolving fast, but I think it's it's it's it's kind of a little bit telling that, AMD hasn't, with all the with all the resources, with all the, sort of clarity on what you're supposed to build for the market Mhmm. Hasn't been able to kind of capture enough market share.
Speaker 2:Dylan Patel is gonna turn it around. He's he's gonna write just one more report, and AMD is gonna be back. I'm bullish.
Speaker 1:It's all it takes.
Speaker 2:All it takes. I love it. But, in terms of can you give us a little perspective on on obviously, if I'm if I'm doing a ton of inference on Lambda, I'm probably in the CUDA ecosystem, probably in in NVIDIA land. If I wanna take that over to Amazon or Google with TPUs, how much of a barrier really is that? Can you kind of explain?
Speaker 2:Because at the same time, we have these we have these incredible code generation models. It feels like putting an AI agent on rewrite this CUDA for TPU, that seems like the easiest thing to do. It seems like a a problem perfectly tailor made for AI agents to just sit there and write boring translation code. It's not even it's not even feature design. Right?
Speaker 9:Wasn't that in the TL where someone was making a joke about the the anthropic safety, you know, snitching on the user, and someone said, port this PyTorch code over to Jack's. And then it says, you know, searching calling FBI online.
Speaker 2:FBI. Do not do this. You're gonna you're Preserving the rug on the entire economy. You do that.
Speaker 9:The underlying chips that it's running on
Speaker 2:to make sure It's so important to America.
Speaker 9:So so I think that I think that okay. The the the the the stuff that this code generation is really good at today is still sort of what I would call within the realm of what, you know, one shotting a basic program. One shotting sort of a a one page program where it could be much longer than one page.
Speaker 2:Yeah.
Speaker 9:But it's sort of like single file.
Speaker 2:Yeah. Or a function or or a you know a class or something like that. Not necessarily something small.
Speaker 4:Maybe I'm just
Speaker 9:behind on it a little bit and I'm not you know doing what the kids are doing or something with with with sort of an AI IDE. But I just kind of like when I'm when I'm vibe coding, I will just tell either Chad GPT or Gemini or Claude. I'll go, Do this in one page. Like, have it be a one thing. I wanna copy and paste this into my my thing and run it.
Speaker 9:And it's it's quite good at that. Now when you talk about, like, going through an entire code base, fixing the compilation errors because there will be like subtle Yeah. Subtle bugs that get introduced. It's not quite there yet.
Speaker 2:Yeah.
Speaker 9:It's just the problem is that I now am at like a % confidence that it is going to be there. Mhmm. In just a couple of years. Mhmm. And that that's kind of why why I know that every sort of megawatt that that we build and every GPU that we deploy is just gonna get met with demand on the other side because just two years out like, you just look two years ago, 2023, cogeneration was primitive.
Speaker 9:Yeah. Primitive. It didn't work. Now today, it really works for more simple programs. I think two years from now, it's just gonna it's gonna make you feel sick when you look at it.
Speaker 2:So what are the big bottlenecks you foresee between like energy, water, land? Are you gonna be building a data center in space? What do you think the future looks like for you?
Speaker 9:So I think that the the the bottleneck is definitely what I call, like, wrapped power. So the I think there's plenty of generated power. Right now, it's just not wrapped up in a data center shell. It's not in a powered shell. It's not in a facility that has direct to chip, liquid cooling integrated into it.
Speaker 9:And so it's sort of like that wrapped up power that's, like, ready for the current generation and next generation of chips. I think that there's there's definitely some, like, regulatory bottlenecks or I would just say regulatory hurdles that can be removed, and I think there's a lot of hope that this administration is going to start to remove those. That's like whether it's, like, looking at sort of the way that we run utilities where you kind of have to, in some cases, become an unregulated utility and put, like, let's say, know, build a data center power plant, which is to say behind the grid or not attached to the grid power generation station next to a data center. And not every state's gonna allow that. And I think that there's there's probably a lot to do in the regulatory side to unleash the free market and let people build.
Speaker 9:And so I think that I I think there's some hope there. And the the other thing is just really I think building large contiguous spaces is like is pretty clearly the answer in my opinion.
Speaker 2:Well, good luck with that. I'm glad I don't have to deal with it. But it
Speaker 9:was while logistics is a
Speaker 2:real pain. Yeah. It sounds like a lot of work. But you've been doing it for fourteen, thirteen years. Yeah.
Speaker 2:Classic under the ice. Decade in you at least. So good luck to you.
Speaker 4:Yeah. We'd love to get
Speaker 2:you back on. This is a
Speaker 1:fantastic come back on again soon.
Speaker 6:Guys. Super fun.
Speaker 9:Love what you love what you do. Long time fan.
Speaker 1:This is this is real clock you as a monster guy. See, we gotta go deeper on energy drinks.
Speaker 2:Yeah. There's so much to talk about.
Speaker 1:Lots to talk about.
Speaker 2:But this is fantastic. Good to Thank you so much for coming on.
Speaker 4:We'll talk
Speaker 1:you chatting.
Speaker 2:Quickly, me tell you about numeral sales tax on autopilot. Spend less than five minutes Sales
Speaker 1:tax AGI.
Speaker 2:On sales tax compliance.
Speaker 1:Should we say sales tax AGI?
Speaker 2:Sales tax Go get go get Numeral. Head over to numeralhq.sleep
Speaker 1:last night, John?
Speaker 2:Oh, terrible. I woke up at 4AM. It was a disaster. I'm I'm I'm I know I'm gonna get cooked. But you don't have to be cooked because you can go to 8sleep.com.
Speaker 1:Use code
Speaker 2:TBPN. I got a 76. It was brutal.
Speaker 1:Ugh. 99. I can't I can't get
Speaker 2:99.
Speaker 1:I'm back to back 90 nines. I don't know what I'm doing wrong.
Speaker 2:And then also we gotta tell the folks about public.com
Speaker 6:to grind harder.
Speaker 2:Investing for those who take it seriously. They got multi asset investing, industry leading yields. They're trusted Let's
Speaker 1:give it up for multi asset investing.
Speaker 2:Yep. And and their partnership with Aston Martin, which we might have more information on soon. But stay tuned.
Speaker 1:I cannot wait.
Speaker 2:We got Sam Lesson coming in the temple of technology very quickly. Do you wanna do some timeline while we wait for him? Is he here?
Speaker 1:You know I love
Speaker 2:timeline, John. Dwarkash Patel dropped a banger on Claude Forde. He sat down with Trenton Bricken and Sholto Douglas, talking about Claude four, how far reinforcement learning can scale. I haven't had a chance to listen to the whole thing. I listened to about half of it kinda in and out while I was trying to sleep last night.
Speaker 2:But, I mean, just a very cool vibe of, like, three people having a conversation right on the day when you wanna know this stuff, talking all about, this fascinating metaphor for for AI safety. You guys it's just been controversial. Of course, there's, like, some drama around some random anthropic news. But the cool thing that I liked was, they said, basically, if you want to tell the AGI what to do and how to behave in the best interest of humanity, you could give it specific rules, but it might actually be better to say, imagine there's an envelope, AGI. And in that envelope is what I want you to do, all the rules I want you to follow.
Speaker 2:You can't access this envelope, but you have to behave in accordance to what you imagine to be in this envelope. And so the agent was just like, I have to behave in the interest of humanity. It was a it was a cool, like, thought experiment almost. Interesting. It was very cool.
Speaker 2:Anyway, Patrick O'Shaughnessy was shouting it out. He says one of his favorite genres of podcasts is recurrent expert guests on on the same show. If you're interested in the nitty gritty of AI model progression, you'll enjoy this. So go check that show out this weekend. It's a great lesson.
Speaker 2:And we have Sam Lesson from Slow Ventures in the studio. Welcome to the studio, Sam.
Speaker 1:Gentlemen. There he is.
Speaker 2:It's Jessica Lesson's husband.
Speaker 4:Put it on camera. In the I saw her, like, literally minutes ago. That's how No way.
Speaker 1:I am. Tell her to tell her to come by at least and say hi if if she's not busy.
Speaker 4:Yeah. Yeah. She's she's busy this moment. But, you know, we'll see later.
Speaker 1:Well, we got thirty minutes.
Speaker 2:We got the crossover of the century. TBPN, the information. It dropped today. It was great.
Speaker 4:I love that. Yeah. I actually I I knew about the development of that story from dinner conversations.
Speaker 2:Oh, yeah. It was a lot
Speaker 1:of fun. Yeah. I bet. I bet. Abe Abe Abe is man.
Speaker 2:Yeah. There you go.
Speaker 1:It was it was fun hanging out with him. And
Speaker 2:Kind of the
Speaker 4:semite Oh, so are you guys you guys are the cover of the weekend section? Is that right?
Speaker 2:We are. We are.
Speaker 1:The big Are you guys gonna do a print edition for us?
Speaker 4:That's coveted space. It is. I always thought that they should actually do a print edition. I think it's time. Everything goes in cycle.
Speaker 2:I got the I got the Wall Street Journal here. I need Yeah.
Speaker 4:It really I know. I was in I was in
Speaker 1:a Once weekly
Speaker 2:Be so good.
Speaker 1:Saturday dropped off on the doorsteps of every A %.
Speaker 4:I would like Like, a thousand dollars to kids to like deliver it with the with the you know, throwing it out the window. Yeah. Look, I was in an airport lounge in Germany Two Days ago and they had all the the print newspapers. And I'm like, look, there's a missing opportunity here. The Germans want to read about the information.
Speaker 4:They want to read about technology, brothers.
Speaker 2:Yeah. Of course.
Speaker 1:Let's get it to You guys are
Speaker 4:big in Germany, I'm sure.
Speaker 1:Well, somebody started translating our streams into Dutch Dutch?
Speaker 2:And was interesting.
Speaker 1:Or doing other other
Speaker 4:That doesn't seem like the first choice. Like, don't you want, like, Mandarin or something? Think that's to be
Speaker 1:like your number one. We're trying to get big on Weibo.
Speaker 2:Yeah. What's next?
Speaker 1:Yeah. But we're expecting to have some Some pushback. Some pushback. Anyways, it's great to have you on as always. Congrats
Speaker 4:on all your success. You guys are everywhere. This isn't the new studio yet, though.
Speaker 1:Well, you're part of it. You're a part of you're a part of
Speaker 2:that success.
Speaker 1:You have to
Speaker 2:come down next time you're in LA. Come by in person.
Speaker 1:It'd be great. Come by in person. I'm Tuesday will be the first show.
Speaker 4:Yeah. It's a lot closer than Englewood Cliffs, New Jersey, you know?
Speaker 2:Yeah. Yeah. What's what's there?
Speaker 1:Is that the new is that the new Netflix?
Speaker 4:CNBC. Oh.
Speaker 1:You can't
Speaker 4:you can't make this whole CNBC rival thing and not know where CNBC is.
Speaker 2:Everyone always says because you see Like, yeah. Andrew Reed was like, oh, they're making squawk box for tech. And I was like, gotta start watching squawk boxing. Netflix
Speaker 1:Netflix also Netflix has a new billion dollar New Jersey
Speaker 4:Frankfurt, New York, San Francisco was my was my week.
Speaker 1:What's going on in in Germany?
Speaker 4:Germany was a personal thing I had to take care of, but but New York was the Salana Acceleration what is it? The Salon big Salana conference, which they call ship or die. Very dramatic Nice.
Speaker 1:Nice. You're infamous there. Right? The GM the GM guy. Do you still get comments on that?
Speaker 4:You know, I saw I saw Raj backstage. You know, I I was one of Solana's first investors. I like Yeah. My my Jason Kalkanis, I was the first investor in Uber, was like, I like to do that for Solana. Right?
Speaker 4:And so, you know, I've I've I've known those guys for a long time. And I saw Raj backstage reminiscing when I did the GM thing, which became one of the first meme coins and blew up. And got if you remember, got Raj banned
Speaker 1:No. I know. From That was crazy. Twitter.
Speaker 4:It was a funny thing about that.
Speaker 1:Yeah. Not this was like Twitter still. Right? So it was like somebody Yeah. At Twitter was like, didn't get the joke, obviously didn't have context that like you guys are boys and just
Speaker 3:Yeah. Hit man by
Speaker 4:The thing the thing is I unfortunately have other people on on Twitter legitimately threatened to kill me, which that's not so good. You gotta get that taken down. But the the Raj was a pretty funny one for them to respond so so quickly to.
Speaker 1:Yep. Yep. Quick reaction. There's so much so much to cover
Speaker 2:in the It's AI week. It's week.
Speaker 4:It's in it every week AI week, boys.
Speaker 2:No. But this week was particularly AI week because you got Microsoft Dolby. Google IO, OpenAI IO, Anthropic, a big are you are you taking a victory lap on the idea that this is a sustaining innovation that Google's gonna win.
Speaker 4:I had you guys actually I'll tell you a funny a funny answer
Speaker 1:to that.
Speaker 4:You guys know my associate, Jack Raines. You know this guy? Yeah.
Speaker 1:You're
Speaker 4:Jack's sitting. He's right over there. Okay. Jack, he can he can come wave for
Speaker 1:a
Speaker 4:second.
Speaker 1:Hey, Come say hi.
Speaker 4:Jack sends me this long missive this week about how amazing Google is
Speaker 2:Hey, guys.
Speaker 4:And how Google is going to win the AI wars.
Speaker 1:What's up, dude?
Speaker 4:And I'm like, what value are you adding? I've been saying this for two years. I'm like, thank you. I'm like I wanna check
Speaker 2:it on a little Google
Speaker 4:I was like I was like, Jack. Was like, Jack, you know, you're an associate at an early stage venture capital fund telling us to buy Google stock is not exactly
Speaker 1:Hey, guys. I wanna see slow as the next crossover.
Speaker 2:Yeah. Crossover. Become an RIA. Put 30%
Speaker 4:on the phone. We've actually looked into it. Definitely not a
Speaker 9:thing we will ever do.
Speaker 1:No. I mean I mean, the the the my favorite comparison, I forget who posted it, but they were like, would you do you want, you know, Google at, you know, 17 times earnings or Costco at 50 times earnings? Like, at this moment, this AI inflection sure.
Speaker 4:Post Actually. Look, here's the negative on IO. The negative IO is that per usual, Google's actually terrible at marketing. Right? And so they just launch everything.
Speaker 4:And so you're like, I have no idea even where to focus right now. Right? Like it's it's not value comes in figuring out Thanks, Josh.
Speaker 2:Focus on generative AI videos, video three.
Speaker 4:That's the thing. It's like so many things. You're like, I don't know what the net of it is, like, they're just crushing it. Right? Like, from a tech perspective.
Speaker 4:And I gotta say, I'll tell you a funny story. I spent like twenty hours quote unquote vibe coding over the last week, because I was on so many airplanes. And it turns out airplane WiFi, vibe coding, perfect match of activity. So I just
Speaker 1:like Yeah.
Speaker 4:Was like messing with these things till my eyes bled.
Speaker 2:Mhmm.
Speaker 4:And you know what happened in hour eleven? What? I stopped using ChatGPT and went all in on Gemini. Because it's actually better. Gem 2.5 Pro is just like way better at a bunch of these coding tasks.
Speaker 4:Mhmm. It's better at structuring. It's like a bunch of stuff. So it's it's I think it was absolutely a Google week.
Speaker 1:But were you using Codex?
Speaker 4:No. I wasn't using Codex.
Speaker 2:Oh, there was See,
Speaker 4:all then like Look, this is one of my other insights from the week, spending a week, you know, literally flying around the country vibe coding in the air
Speaker 1:Yeah.
Speaker 10:Is,
Speaker 4:you know, the the the whole what model to use thing is a complete fucking mess.
Speaker 1:Mhmm.
Speaker 4:Right? And I think the the analogy I now have in my head is it's kind of like, imagine walking into a crowded room where you don't know anyone and saying, who should I trust? Right? And then, by the way, every two seconds, a new person pops into the room. You've no and like, I people are like, oh,
Speaker 1:this stupid. Or you can trust this person 95% of the time. Can't trust them with your life, you know,
Speaker 4:but That's a totally that's a totally separate chain of thought. Was talking to some entrepreneurs today about, if you think about what AI is today, it's like having it a b minus employee, or like an 80 percenter. And the question is, how do you get value out of 80 percenters? It's actually more difficult than it looks in a lot of ways. Right?
Speaker 4:Because the reality is so much of work is about
Speaker 1:isn't it more their b minus because it's you're averaging their effectiveness on different things? In in my experience, it's like, for certain tasks, it's like, 90% of the time, it's amazing. And then, some percentage of the time, it's so bad that you would wanna you would ask the employee, is everything okay? You've never
Speaker 4:Kind of. But I think the other thing the thing I really think about guys is, you know, if you think people are always like, oh, there are all these tasks that AI is more efficient at. And so, clearly, those jobs will just go away and it'll be it. And I think that's like exactly the wrong model. Because the reality what people don't understand is the real reason you hire people to do work is not to do the work.
Speaker 4:It's to have a throat to choke when the work goes badly. Right? It's like, why do you have an accountant? You don't have an accountant to do your taxes. You have an accountant so that when the IRS comes and says, what's wrong with law why did you get this wrong?
Speaker 4:You're like, I didn't do it. That guy did it. Right? And so the I think that's the interesting thing is like there's all these models like, great. Good news.
Speaker 4:You get rid of the employee, now you get a queue that's mostly right and you approve and you're like, I don't wanna approve that stuff. Like, the whole point is to have someone else Yeah.
Speaker 1:I think our our example is, like, we use a lot of the different deep research products and, like, we still would love to hire an amazing researcher.
Speaker 4:Yeah. So that you can fire them when they're wrong. Right? Like, do you need like it's just the point is like there's this whole think there's a lot of like
Speaker 1:Well, it's an agency thing too. It's like if you could tell if you could tell deep research to like try itself and then try other products and then combine the outputs of all the different things and
Speaker 4:Yeah.
Speaker 1:Know no wants start asking agent that can, you
Speaker 4:know, tools. There's all these things. But I think the ultimate model in my mind is I don't even care what the average persons are using. I don't care about some review online that's four stars for coding for this type of Mhmm. I don't care.
Speaker 4:What I care about is what are the smartest people I know in the world using. And like how do you make that transparent? I could just be like, it's this type of task, I'm gonna trust this model for that. And like that needs to be up to date. It's much more of like an identity problem or like a human trust problem, right, than it is, you know, a technology problem in a lot of ways.
Speaker 4:And it's just changing really fast. So it's been a fascinating week. But the yeah. Net, I mean, pulling pulling all the way up, yes, I'm taking a victory lap on Google wins. And yes, I'm taking a victory lap on incumbents win.
Speaker 4:Because that's what's happening. So
Speaker 1:you're you're saying to Jack, like, thanks for reading my memo from two years ago?
Speaker 4:Yeah. Exactly. Well, in fairness to Jack, wasn't on the team two years ago.
Speaker 10:Yeah.
Speaker 9:He was
Speaker 4:very excited to discover Notebook L. But
Speaker 1:love you, I
Speaker 4:gotta I gotta I gotta get him out of the pool house. Yeah. Anyway.
Speaker 1:I wanna talk about some other stuff. What what do you think about the Johnny Ive news and and hardware generally?
Speaker 4:I mean, where to begin?
Speaker 1:I know. I know. This is my favorite part of having you on the show. We don't have to prompt at all. We just, like, two we could give you three words.
Speaker 1:Johnny, Ive, hardware.
Speaker 4:Oh, okay. Few things. First of all, I mean, my my my my tweet on this when it was happening was, well, I guess all these hundred million dollar AI researchers are cheap. Right? Like, these it's the designers that are gonna get paid bank on acqui hires in this in this era.
Speaker 4:Right? Look, I think it was marketed in a really interesting way. Right? Like, it's marketed as, like, they tried to pick the biggest number possible. It's a 2%.
Speaker 4:They paid 2% for this thing. Right? For him. They market it as it's this big number. I think because that's it's kind of the pissing match of AI.
Speaker 4:Right? Is you're supposed to look really big and powerful with big number. And I'm sure Johnny doesn't mind being told that he's worth $6,000,000,000. But it's kind of one of those interesting PR stories of how you shape the narrative as much as anything else. The hardware thing is interesting.
Speaker 4:On one hand, I actually think it's like, if you're open AI, you do need a hardware play. You're gonna get fucked otherwise. Right? Meta discovered this years ago, which is like being beholden other people's hardware is really tough. Right?
Speaker 4:In this case, it's only more so. Right? Because of kind of the way these chips are gonna fall with Android and iOS. So I don't think they're raw and like Meta's got its glasses. Everyone's so like it's not strategically wrong from first principles.
Speaker 4:I think the problem is that I have is I just think that like the likelihood they're gonna successfully introduce a new piece of hardware is like zero. Right? Like and that's just, you know, it's you know, you're gonna have a phone, and they could try to compete on the phone, but it's very hard for them to imagine building like a fully featured phone that, you know, whatever. And then also having something that's so great.
Speaker 1:Well well, the one thing that does seem clear, haven't they said this is a a new type of device I know. That will integrate with your phone and your computer. That screams to me, okay, well No, was is is app yeah, yeah. I said septum piercing wear
Speaker 4:I saw that.
Speaker 2:Well, you
Speaker 4:know, my take was eCain. Did you see eCain? So here's this was so when I left when in 2014
Speaker 1:No. But sorry sorry to to finish my thought, the the issue with that is if you're saying we're gonna create a new device that integrates with your Apple ecosystem, that seems like a bit of a like, a a uphill battle. Look what happened to Pebble, right, and Apple Watch. Right?
Speaker 4:In the end of the day, it's like, look, you know, you have the iPhone is a hugely breakthrough device. This is, the way, not my line. It's a friend's line. But, like, hugely breakthrough device. You already had a phone.
Speaker 4:Right? You It wasn't like a new thing you were putting on your body. Mhmm. The glasses work. That's a thing that was already on your body.
Speaker 4:The watch work. It's a thing
Speaker 1:that That phone, you're not
Speaker 4:it's really hard to imagine you're gonna get through with some new device. So my my joke, but it's only half a joke, is look, you know, twelve years ago, I got obsessed with the idea of making an e cane. So imagine, like, bringing back a cane.
Speaker 1:Right? That's what you meant.
Speaker 2:And like, no idea where it's snapped. Like, Novocaine.
Speaker 4:Yes, And if think if you think about the cane, like, it's actually you you put a shitload of batteries in it Yeah.
Speaker 2:Yeah. Yeah.
Speaker 4:Big antenna. Right? And you know what the nice part is, like, the world is getting less safe,
Speaker 1:you can keep
Speaker 4:people with
Speaker 2:it. Yeah. Yeah. Yeah. Yeah.
Speaker 2:The
Speaker 4:world is like the world is aging, so like everyone needs canes. You know, there's all these like macro trends in favor of bringing back the cane. And then, you know, could you drop like a GPU and a microphone and a camera in the top and like talk to your cane?
Speaker 2:Smart Yeah. That's yeah. Smart cane.
Speaker 1:Smart cane. Smart cane. You I don't want to be pitched any more non AI cane. Okay? I've had enough.
Speaker 4:Like I'm just saying, like, if they actually if if OpenAI came out and like, we we're bringing back the cane, I'd be like, alright, listen, for all
Speaker 2:my shit on this Well well, you know that Johnny Ive got his start at a design firm that was working on bathrooms. And so maybe this is all like smart toilet. You know, you can
Speaker 4:use this someone just came out. There's a there is like a new Fitbit for poi for your poop. Okay. I know some friends that have funded that. That's totally a I
Speaker 1:I funded that.
Speaker 2:You funded that? Yeah. I know some people's
Speaker 1:funded that. I funded It's called Throne.
Speaker 4:I think
Speaker 1:it's it's called Throne. I I think it's interesting Yeah. For a bunch of reasons. One is, it's just, like, personally, as like a quote unquote biohacker, there's so much information on how your digestion what's happening with your digestion, your hydration, all these different things. Look.
Speaker 4:In the end of the day, you want to copy behavior as people are already doing. And you know, in college, one of my roommates, Brian, would send me pictures of his poop all the time. So like, you know I don't like
Speaker 13:that at all.
Speaker 4:You gotta double down.
Speaker 2:That's brutal. Brutal. Let's move on. Brutal. Hyperscaler CapEx, give us anything to get us off of this.
Speaker 4:Well, here's my hyperscaler. Hyperscaler CapEx, here's my line on it. I flew through JFK today. They're spending $20,000,000,000 renovating JFK. Yeah.
Speaker 4:I'm like, this CapEx is nothing. More money on AI. Like, if you're going spend $20,000,000,000 on, like, renovating JFK all of a sudden, spending a hundred billion on AI doesn't seem so crazy.
Speaker 1:Mhmm. What about say say as much as you can about what Meta, you know, Meta's playbook over the next kind of six to twelve months. I know they've been having talent, you kind of retention Lama was the Yeah. Lama behemoth. Delayed Delayed.
Speaker 4:Look at the end
Speaker 2:of the day,
Speaker 4:I again, as you know, have huge respect for the team there and the leadership there. I think the beauty of Meta, as I've said many times, is it's a heads you win, tails you win. Right? You know, from from a from a investor perspective. Right?
Speaker 4:Which is if you think about it, it's like the most obvious highest value use case in the world for everything that exists is making ads way more targeted and effective, right? And that's happening and it's an incredible trend to ride and they're gonna crush it. You know, Mark and that team is like deeply competitive. They want to win win win, right? And so just from a pure competition perspective, I think they're gonna like go to the mat to win win win, and like there'll be many chapters to that.
Speaker 4:But the good news is they have a massively profitable business and an immediate use case, right, that is deeply aligned. And so I just I, you know, I learned a long, long, long time ago to never bet against Mark Yep. Especially when he cares about it.
Speaker 2:Yeah. Feels like with Meta, there's huge value to having Llama be a free LLM for them that they can vend into every corner of the app even in places that the consumer doesn't feel or or see. So, profanity filtering and, understanding what content goes where, ad matching, generative AI to clean up Instagram photos, all these things that will just be under the surface Yeah. As opposed to what Google's doing, which is like, now we have 10 new apps, Notebook. Lm.
Speaker 2:Like, you're we're not seeing that from Meta, maybe that's the right strategy.
Speaker 4:I look. At the end of the day, Meta has the most natural beautiful use cases for AI, which is what you're pointing out. And therefore, like, they don't need to do a bunch of crazy shit. Right? They just need to, like, win at, like, the core.
Speaker 4:And then basically, again, the open source thing is clear. It's like, they actually like, think about ads. They don't really care if they're doing the AI or someone else's because it's all gonna go to them either way, right, at the end of the day. It's just better if more people have access to it and innovation will happen. So, look, one of the things I did in my vibe when I got really into, like, all the platforms.
Speaker 4:Right? I spent a bunch of time remember DigitalOcean?
Speaker 7:Yeah.
Speaker 4:Like, DigitalOcean's doing a great job with AI. Right? Like, it turns out, like, their services are really good. And, like, it was really easy to boot up some agents on top of, like, you know, a knowledge base on top
Speaker 2:of, you know It's always the worst part is like deploy you you write some code and you want to actually get it on a server, it's always still a hassle.
Speaker 4:It's like, they've actually done a great it's I was like incredibly impressed. But like, you know, and then you say like, where is Lama showing up? It's like, oh, it's like right there. Like, you just click a button
Speaker 1:and you're
Speaker 4:using Llama. It's like no bullshit.
Speaker 2:You gotta get a killer video generation model out of Meta. Like, they they're the only one that has another data source
Speaker 1:that's similar to YouTube. Do you that evolving? There's a bunch of foundation model labs doing video generation, and I can see some of those getting to the point where they could crush it for big Hollywood movie studio, you know, making very specific types of scenes or assets. But then it feels like the low end of the market for, you know, if you're a random SMB and you wanna make an ad or something like that. Yeah.
Speaker 1:Maybe use some vertical SaaS, but also
Speaker 4:I wonder how much it matters. I mean, you know, I had this conversation actually with my good friend Dave Moran on our little weekly, you know, bullshit session.
Speaker 2:More or less.
Speaker 4:More or less. We're talking about
Speaker 1:the fact that Well, Dave also somehow cracked like the top of the angel. There was like Oh, yeah. Top angel number one. And he he was the top dog.
Speaker 2:It's amazing.
Speaker 4:So take a look at the AOL.
Speaker 2:We'll talk
Speaker 4:about the validity of that list. We'll talk about Yeah.
Speaker 1:We could I mean, I just like to see my boy, David.
Speaker 4:I like see look, my boy my partner Kevin was, like, number four on the list. It was a very interesting list. Let's go. But the
Speaker 2:Congratulations. Wasn't on
Speaker 10:the list.
Speaker 4:But, you know, that's okay. The the but what I was gonna say is the the thing Dave and I were talking about is, look, you know, if you think about what's going on, like, with memes, right, in this whole world, you have this is, like, high road low road thing. Everyone's really excited about, like, super high end video generation and Hollywood and da da da. You know what's happened in the media landscape? Those things don't make any money.
Speaker 4:No one cares about these movies anyway. They're consuming low end crowdsourced memes on the internet. Like, that's where attention is, that's where the energy is, that's where entertainment is. And so Mhmm. I think, obviously, the pure technologists and, like, the highfalutin people are really excited about, like, the narrative storytelling, beautiful da da da.
Speaker 4:But when it comes to like what tools will actually be used, how things will be marketed, how humans will interact with each other and communicate in the store, I think actually it'll be much more budget y tools that actually win. Mhmm. And the other stuff is kind of just, you know, intellectual, masturbation a little bit. It doesn't mean you
Speaker 1:shouldn't do it. People Speaking of that
Speaker 4:like from a business
Speaker 1:perspective. Of masturbation, why is OnlyFans getting priced at eight times earnings?
Speaker 4:You know, I I so desperately want to buy OnlyFans, guys. I wanted to buy for years. I had plans like, there there's been a few iterations of this. This is so good. It's so good.
Speaker 4:I
Speaker 2:just What are you having
Speaker 4:with OnlyFans? I
Speaker 2:just It's good.
Speaker 4:This is but you your reaction is part of the reason I want to buy
Speaker 12:it. Right?
Speaker 1:It would be of course
Speaker 2:The buyer pool is small, so the price is low.
Speaker 4:The well, that's part of it. The other thing is everyone because of the buyers it's actually the best AI short you could possibly think of. Right? Because part of the reason it's getting sold, my understanding, and like the whole story is like, well, we're gonna have all these AI girlfriends. Sure.
Speaker 4:So like the creator economy is gonna get crushed on these things. Mhmm. And I think that is like a very one zero one simplistic take on what's
Speaker 1:actually The thing is a lot of the a lot of the cost that goes into basically generating revenue on OnlyFans is from messaging, which is done by people in
Speaker 4:So this the thing. Everyone OpenAI is like the greatest human loop AI platform in existence, right, from a position because you have I think you still need real brands. I think that having human brands matters at the top end. Your ability to then, like, effectively automate it's kind of like the Facebook story, which is your ability to slot an AI and bank it, right, on messaging, it's like off the charts with OnlyFans and improve the quality. So I think it's interesting.
Speaker 4:Think it's like the most classic thing where it's being sold. I've always loved the asset. It's the number one creator platform in the world. It's so defensible because they actually take up a very low take rate because they're so big that no one can no one can assault them, right, because of how they're kind of set up. What's the take rate?
Speaker 4:It's like it's really low. I want to say it's like 10%, maybe 15, but it's like much lower than you think. Mhmm. And as a result, like you have this incredible cash engine.
Speaker 2:I mean, YouTube's like 45%. And many other sites are 30% just for general content creation platform.
Speaker 4:So it's upshot is like this is an incredible position. It's it's Mhmm. I think there are huge product opportunities. There always have been with it. But then you have this double storm of, like, one, people like you guys boo it because you're you're you're patrician technology brothers.
Speaker 4:Right? Like, and you won't, like, acknowledge human nature and people wanna do this. And then, two, there's all these fancy investors who, like, think it's dead because they read the front page of The Wall Street Journal about AI and don't understand what's actually going on. I'm like, that's great. This is my zone.
Speaker 2:It's underpriced.
Speaker 1:Yeah. I I have no I Well, you're
Speaker 2:gonna have become an RIA to do it, probably. So good luck.
Speaker 4:Well, I gotta figure out how not to that. I also, like, for what it's worth, I'm a seed investor. Don't know how to raise $2,000,000,000 I need.
Speaker 1:But then
Speaker 4:call me if you got it.
Speaker 2:Well, speaking of seed investors, I don't know if you saw this chart from PitchBook. Emerging managers are on track to raise less money this year than they have in a decade.
Speaker 4:That sounds right.
Speaker 2:It's now under $20,000,000,000. During 2021, it was up at 60,000,000,000. It was really, really speed really spike 2022 was around 50,000,000,000, and now we're down in like, the
Speaker 4:single digit Just one JFK renovation.
Speaker 2:That is that is a lot of money for emerging managers. This is, I assume, defined as,
Speaker 4:first billion dollars as an emerging manager?
Speaker 1:Wait. How much did they get in 2021?
Speaker 2:You put it you I mean, you put it in, like, $50,020,000 funds. That's the idea, at least. Or that's what happens.
Speaker 4:They're I just I've been so skin I don't see any of this working out for anyone. Right? Like, you know, I I I know it's it's one of the I the the they'll always be the random winner.
Speaker 2:Yeah. But but isn't that the nature of the game? It's like startups follow a power loss, so do funds.
Speaker 1:I just think we have to hit a size gong because the 64,000,000,000 that they raised in 2021
Speaker 2:Still earning fees.
Speaker 1:12,000,000,000 of fees. Yep. And so let's just give it up.
Speaker 2:Sorry about Congratulations to the emerging managers.
Speaker 4:Guys, but it's kinda guys, I think you guys are cheering too much. I mean, if you the math if you do the math on No. I'm I'm joking, to
Speaker 1:be clear.
Speaker 4:I mean Yeah. Being a doing the math on being a small and being locked in for ten years as like a solo GP with your emerging manager fund and your kind of shitty subscale, it's actually a pretty bad business. What's wrong
Speaker 2:with being locked in?
Speaker 1:No. No. No. No. No.
Speaker 1:You're is so real, which is imagine you have a start up
Speaker 2:Yeah.
Speaker 1:And it's like, okay. You have to commit to this start up for a decade even if by two and a half years in, like,
Speaker 2:it's not worth Is that though? Feel like most of my emerging managers, they they write the checks in the first year and a half, two years. And then, yeah, they get investor updates, they pass them along to LPs, but, like, they could go and get a job at Big Tech and
Speaker 1:Sure. But it's still even if it's couple hours a week for ten years?
Speaker 2:Yeah. I guess that is kinda
Speaker 4:how it's Look. It's also it keeps you from doing other it it's just messy and complicated. And the reality is, again, like if you're earning two and twenty, you're never going see the 20. Right? Like the two ends up actually, you know, on a 50,000,000 fund after you pay for actual things.
Speaker 4:You're doing fine. Like, no one's crying. But, like, it's not like some great business. Right? Like, I think the only reason to raise a $50,000,000 emerging manager fund is, like, to have enough card flips to prove that you can size up a bit.
Speaker 4:Now, I think the flip side is true too, which is I don't know how anyone makes money on a seed fund that's over $200,000,000. I I just know the math doesn't work. Right? I think there's like a sweet spot of fund sizes that work. Too small, you know, the economics to make it work.
Speaker 4:Even if you have a banger, it's like not that important. And like too big, it's just like the law of big numbers, you're never going to produce an important fund, right, from a returns perspective. So look, what we do, seed investing, we're I think in the sweet spot, obviously, because why would I not think that? You know, we've made money. I'm very proud of that.
Speaker 4:I care about DPI, whatever. But here's the thing. Sorry.
Speaker 1:Sorry. We're laughing. We have to explain because you can't see it. But the Chiron right now says seed investor. Don't become a seed investor.
Speaker 4:Stay the fuck out.
Speaker 1:The the but then
Speaker 4:the the reality is that, like, you know, it's not even from my perspective, it's not the best business. You do it because you love it. Right? Yeah.
Speaker 12:Like but
Speaker 4:if you just did the math, being an asset manager and earning 2% and just getting enough DPI to justify more 2% fees is for sure a more scalable business model, which is why most people do it.
Speaker 2:Do you think do you think, part of why every emerging manager jumps into seed is just like they can't do growth? Because I I feel like the skill set of being a growth investor is in some ways more repeatable. You know, you get people to come out of investment banks, and they have all the skills to underwrite a company that's at a billion dollars. There's less risk. But at the same time, when you think about someone who's, you know, starting a new fund, if they're going out and raising a growth fund on fund one, like, that just feels harder to marshal Well, think
Speaker 4:that's an LP question. It's like, who's gonna give you LP level dollars? Right? And, like, by the way, if you're if you're going a later stage fund, you're trying to, like, model to, like, a guaranteed whatever it is.
Speaker 2:Yeah.
Speaker 4:To an f x or whatever. Yeah. Why would you give it to the crazy kid? Right? The crazy kid you give money for because they might be right.
Speaker 2:Yeah. Yeah. Yeah. Yeah. And so you want that seed bet.
Speaker 2:And then also I feel like a big part of the emerging manager dynamic is just like essentially scout funds and and there's a lot of like, you know, horse trading around like, yeah, we will do we will do the deal from our fund to We
Speaker 4:started that way like Yeah. You know, ten plus years ago. And like that when there was the market was much looser and Yeah. And it was a different market.
Speaker 1:Yeah. Yeah.
Speaker 4:And it worked for us and we were able to scale up into being like a legit seed fund, you know, with legit dollars and legit institutional investors. I just think like like most things, that path all paths get super crowded, right? And so once the path is super crowded, it's just really hard to differentiate, it's really hard to make a good business out of it. And I I do think like almost everyone's gonna go away. Right.
Speaker 2:Don't become a seed investor. You hear it you heard it here first, Last
Speaker 1:last, I want your quick take. XAI's Portland data center fire. You think that's just little accident or you think Portland is doing Portland stuff?
Speaker 4:That'd be really funny. That'd be really funny. It's it's God, have you guys ever read the science fiction parable of the sower? No. No.
Speaker 4:Great book. Great book. I'm just finishing it now. But there's a whole slug plot where there's all these people who are addicted to this drug that makes them like think that fire is the greatest thing on earth. So they're just like setting fire to everything.
Speaker 1:Like It's I I just looked it up. It's a post apocalyptic story set in 2025.
Speaker 2:Wow. I don't
Speaker 1:know if you caught that
Speaker 4:when you're reading Yeah. I see. And like, they're basically about people, like, trying to walk north from LA to, like, north to to Seattle to escape craziness. But the yeah. So I don't know.
Speaker 4:If you told me that that drug was invented in Portland, it wouldn't blow my mind.
Speaker 1:Yeah. I think we gotta get a
Speaker 2:point This is fantastic having you on. Thanks so much.
Speaker 1:Always a pleasure, a wonderful time. Happy Happy Talk to soon.
Speaker 2:Cheers. Let me tell you about Adquick.com. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only Adquick combines technology, out of home expertise, and data to enable efficient seamless ad buying across the globe.
Speaker 2:And we got Bobby.
Speaker 1:They are simply the Yep.
Speaker 2:I'm gonna do some, v o three generations for all of our partners. Get those in the mix. Pull those up. I think it'll be fun. Get a little creative.
Speaker 2:We got Bobby coming into the studio. Welcome to the stream. How are doing?
Speaker 1:Thank you for having me.
Speaker 2:Where are you? Are you in Miami right now?
Speaker 12:I am the last one standing in Miami.
Speaker 1:Yes. Let's give it up for
Speaker 2:seen some of Miami. I love Miami.
Speaker 12:Just stuck around. Thank you very much.
Speaker 2:Yeah. Yeah. I I love Miami. I it's beautiful every time I get to go visit. You know, it's always struck me as, like, the it it it's like a classier version of Las Vegas for tech, and it actually worked really well where in every industry, there's always, like, the CES conference that happens in Vegas, and it's a little bit below tech's, you know, prestige.
Speaker 2:And so if Tech could assemble in Miami for events, that's great.
Speaker 12:Right. We we gave it a real college truck.
Speaker 2:It was happening for a while. You know? There's Hereticon.
Speaker 7:And and You know, it's my conference.
Speaker 12:It's the best conference I've ever been to.
Speaker 2:Exactly. And and it was cool that you you get people that come from New York, and they're not just gonna go home on the, after the conference. They're gonna stay.
Speaker 3:And they might.
Speaker 2:Same thing with SF, same thing with LA. So it was actually a feature that not everyone was there. I feel like if you throw a conference in LA or Yes. SF, a lot half the people are just gonna go home.
Speaker 12:It was special for a moment.
Speaker 1:I Anyway. I gotta What's up? I gotta dox Bobby
Speaker 2:Oh, yeah?
Speaker 1:Because he pulled up to Hereticon in a Ferrari.
Speaker 2:Let's go. We
Speaker 1:love this guy. Called it out.
Speaker 2:We were walking.
Speaker 12:Yeah. That's right. Is actually just getting the buttons redone.
Speaker 1:Oh, really? We were just talking
Speaker 2:about this.
Speaker 1:You have the button. You have the button issues. The sticky buttons. No. No.
Speaker 1:It's seriously, it's it's like the worst thing to be in this magnificent machine. And then it's like, I don't know if somebody Yeah. Like ate a hamburger and
Speaker 4:You have a date
Speaker 12:and you you you you okay. Great. I'll pick up my Ferrari. And then she tries to adjust the seat.
Speaker 2:It's sticky.
Speaker 12:She's like she's like, this is disgusting.
Speaker 2:Oh, no.
Speaker 1:It's terrible. What were you doing in here? This is terrible.
Speaker 12:It's it's all fixed now. That's all fixed now.
Speaker 2:Okay. That's good.
Speaker 1:Yeah. That's good. We're glad
Speaker 7:to hear it.
Speaker 1:Find us.
Speaker 2:But, yeah, give us the news. Give us the update. Give us a little introduction on yourself for those who might not know.
Speaker 12:Yeah. So I'm so glad you guys had me on today. We had a very big announcement today. So, this is something I've been thinking about for fifteen years.
Speaker 2:Mhmm.
Speaker 12:And we announced our new email client called Sunflower today.
Speaker 2:Cool.
Speaker 12:This is basically the
Speaker 13:thank you.
Speaker 1:Thank you. It
Speaker 12:is, like, basically the opposite of inbox zero.
Speaker 2:Okay. What's that?
Speaker 1:I don't
Speaker 12:think you should have to have an email client that makes you work for it. Right? In other words, like, you load up in RockZero. I don't care how many keyboard shortcuts. I don't care what what what you give me.
Speaker 12:But if I'm having to triage every single email that comes in, you know, keyboard shortcut this way, that way
Speaker 1:Yep.
Speaker 12:From the Applebee's email. You know? No.
Speaker 1:Yeah. Yeah.
Speaker 12:You need an email client that actually works for you. Okay. So on our marketing website, we don't mention the word AI one time.
Speaker 1:Wow.
Speaker 12:But this thing is entirely this this product would not be possible five years ago.
Speaker 2:Okay.
Speaker 12:It it's you know, if you wanna be if you think you need to be a superhero to use your inbox, there's a product for you.
Speaker 7:Mhmm.
Speaker 12:We're building a product for actual humans. Bold. And it it launches you know, this the wait list launches today, sunflower.me.
Speaker 2:Yeah. So what we
Speaker 1:can do with the product the product is like
Speaker 12:my phone before this because, literally, we we broke Slack today. Like, apparently, there's a limit to how many notifications it can send you.
Speaker 2:It just keeps
Speaker 12:dinging, dinging, dinging.
Speaker 2:That's great.
Speaker 1:Amazing. And the product is, like, already, like, you guys you guys are the product's, like, real. You guys are using it. Right? This is not you're not just launching a wait list.
Speaker 1:Like, there's there's something under the hood.
Speaker 12:We've been working on this for
Speaker 6:a year
Speaker 1:and a half.
Speaker 12:I use it every single day myself.
Speaker 2:Yeah.
Speaker 12:It's about a dozen people right now who have this. Yep. I'll give you guys, early alpha access. Yeah.
Speaker 2:So talk to me about the actual workflow. I imagine I still have an email address. People can still email me, but I imagine an LLM is scanning every email that comes in. Am I seeing the emails? Am I I I mean, I've used Gmail's Gemini features.
Speaker 2:I one time, I randomly clicked it, it just typed a response, and it was, like, kinda decent, but it's honestly just a lot of clutter in the UI right now. How are you thinking about
Speaker 6:your response?
Speaker 12:Hot on the hunt here.
Speaker 2:I'll be
Speaker 1:honest. You
Speaker 7:you yeah.
Speaker 2:Well, I've been thinking about this. I've actually was thinking
Speaker 4:I should just get a
Speaker 2:because I'm getting confused. LLM to summarize every email and just text it to me. No. It's insane. And then I can just text back if I wanna respond, and I just never look at my inbox ever again.
Speaker 3:Apple tried. And
Speaker 2:Would it work?
Speaker 12:Current mail dot app.
Speaker 2:It's it's That's not good.
Speaker 4:Total doggy.
Speaker 1:Yeah. It's just so funny that email, like, the default state of email is like, here's stuff that's important Yep. Here's stuff that's not important, and then it's only ranked by Yeah. When it hit your inbox.
Speaker 4:Yeah. Which is kinda silly because is
Speaker 12:a status quo of email is a to do list filled out by other people.
Speaker 2:Yep. Totally.
Speaker 1:And
Speaker 12:that's that's it. Right? You should be beholden to that. Right? Just because someone sends me an email doesn't I mean, I get a lot of emails.
Speaker 2:Yeah.
Speaker 12:Anyways so, yeah, you were you were kinda close. Mhmm. We're gonna reveal our hand more and more publicly.
Speaker 2:Mhmm.
Speaker 12:But today was, like, the firing of the starting gun. Like, we're building in public now, so you're gonna hear a lot more.
Speaker 2:Boom. Don't share your revenue. If it gets too high, people will copy you. Don't like
Speaker 4:building in public.
Speaker 12:Based based on the sign ups you had today Yeah. Like, we are cash flow profitable if if everyone converts.
Speaker 1:Wouldn't that How much how of your time are you are you gonna be spending here versus investing going forward? Yeah.
Speaker 12:That's a good question. You know, I personally funded this company Mhmm. For the alpha. Like, you know, I I To
Speaker 1:be able to read people's emails, you mean? I'm kidding.
Speaker 12:I totally read like, I can't by the way, I can't read anyone's emails. Yeah. Yeah. An exhaustive security review process with Google right now.
Speaker 2:Yeah.
Speaker 12:So, no, there's no reading. You
Speaker 1:you sign up.
Speaker 12:You can sign up. Just
Speaker 4:Google. Email.
Speaker 1:Just Sundar. Just Sundar.
Speaker 2:Yes. Sundar can sign up.
Speaker 12:Sundar can read you emails, but not Bobby. Yeah.
Speaker 2:I bet I bet he can, actually. I bet I bet that they're pretty locked down over there.
Speaker 1:Yeah.
Speaker 2:But, yeah, I mean, in in I remember the mailbox days and that launched. And one of the things that I loved that I loved was that once you got off the incredibly long wait list, it basically tricked you into just archiving everything, which I thought was a great paradigm because you kind of declare email bankruptcy. You're not deleting these emails, so they're still there. And just that idea of, hey. You you can archive things.
Speaker 2:I had never archived an email before, and I think a lot of people are in that boat where they have unread emails, and they've read emails, and they have a number that's, like, 10,000 Yeah. Next to their email app. What do you think about
Speaker 12:funny story about that? Please. So I I was friends with Gentry when he made
Speaker 2:Mailbox. Yeah.
Speaker 12:And I worked at Facebook at the time. Yeah. And we're on this hike with my friend Beau. And, literally, it's like the Kalalau Trail in Hawaii. It's like a two day hike.
Speaker 12:Like, you're trekking it. The entire time, he just talked about email the entire time.
Speaker 4:He's talking about email and the
Speaker 12:fact that he was about to propose to his now wife. And I said, what are your topics. On this engagement ring. Anyways, so I took a photo of him. It's a beautiful photo, you know, right at the end of the trail.
Speaker 12:And if you remember that app, you know, when you got to inbox zero, right, you you saw this beautiful image. And I and he hated that app the whole time. It just it just launched. He was ranting to me the entire time about how much he hated Mailbox. I was like, it's actually a pretty good app in front of Gentry, etcetera, etcetera.
Speaker 12:But, anyway, so when I got back from the hike, I sent Gentry an email, and I said, hey. Would you would you guys put this
Speaker 2:this image
Speaker 12:into the app? Like, as the, you know, you're done, like, inbox zero state.
Speaker 1:Yeah.
Speaker 12:And so and then I then I took a screenshot, and I sent it to him. I said, you're in the app now. You're in the app that you you
Speaker 1:kinda hate it. That you despise. That's amazing. That's
Speaker 4:And he he took it
Speaker 1:in good faith.
Speaker 4:It was
Speaker 12:it was great. Yeah. But but we're not about inbox zero. I I I think inbox zero is a flawed concept. I think, like, you know, we're
Speaker 1:It's funny. I want you to do this for text. Right right now, I have 3,873 unread texts. And I have that because I don't
Speaker 2:Yeah.
Speaker 1:Feel an obligation. Like, just because somebody had my number at some point
Speaker 10:That's fine.
Speaker 1:Like, I I really try to respond to the stuff that's important and pressing, but I'm not gonna, like, get home from work and be like, oh, I I I gotta respond to this person Yeah. Instead of hanging out with my kids. Right? Like, it's it's not No. Of course.
Speaker 1:Not my
Speaker 12:And everyone everyone feels entitled to your time.
Speaker 2:Yeah.
Speaker 12:Right? You know? Look. I'm an investor. I get the same emails probably we all do.
Speaker 12:Right?
Speaker 2:Mhmm.
Speaker 12:Like, about 20 a day. Mhmm. And they're all, like, drip auto campaign follow ups. So it's like, they send you a cold pitch email, and then you get the you get the email, then you get the email.
Speaker 7:And then
Speaker 12:Yeah. And then every single successive email, like, tries to guilt you into actually, you know, replying. Yep. Like, start using more and more emotionally manipulative tactics.
Speaker 2:Yep.
Speaker 3:And it's like, no. No.
Speaker 12:No. Just because you know my email address does not entitle you to my time.
Speaker 1:Yeah. I think that's right.
Speaker 4:What do
Speaker 1:you think about are you gonna are you gonna tag? Are are you gonna are you gonna, like, identify, like, emails that are being dripped versus, you know, artisanal organic farm to table emails? We're working on that. You know what we're also working on?
Speaker 12:I again, you know, there's a funny Steve Jobs quote. Isn't it funny you gotta ship at least from the top? But here
Speaker 4:you go.
Speaker 2:That's great.
Speaker 12:You know you know, like, email trackers? You know, like, obviously, Superhuman does this. Yep.
Speaker 2:Yep. Yep.
Speaker 12:I'm like, you know, you see you've seen it. Yep. We both allow you to block inbound trackers, and we'll also let you send your own. Nice. So our thing is, like, we are just so a % focused on the individual user.
Speaker 12:So in other words, like, if you want to block these trackers, perfect. We'll let you do that. And then you can send your you can send a tracker of your own.
Speaker 2:I like having those trackers. I like letting the SDR know. I've read this 10 times, I'm still not responding.
Speaker 1:Yes. Yeah. That that's that's awesome. The feature that's that's the feature you should build is is a feature to open and close the email sent
Speaker 2:to feature. Yeah. Yeah. Yeah. It just says, like,
Speaker 4:he keeps paying the pixel.
Speaker 2:Well, then the SDR is like, this person thought about that. They're reading it for hours every day. What? But they haven't responded. What's going on?
Speaker 12:You can just DDoS their tracking console.
Speaker 2:What what what is your take on, Eric Mikovsky, founder of, Pebble? He started this company Beeper, eventually sold it to Automatic. And the whole idea was get into the iMessage world, create one unified inbox for all the different messages. I think he had a knockout drag out fight with Apple, because he was reverse engineering some of the APIs. Obviously, there's changes on in big tech around antitrust, and it maybe now is the time to put pressure on that.
Speaker 2:Is there a world where we could see text and email kinda unify at some point? What's your view on kind of the long term here with big tech? What was that? It was activate activate
Speaker 12:golden What did I sign up for?
Speaker 2:Golden retriever mode. Where you're where you're You know what you do. Dumb.
Speaker 1:Yeah. Yeah. Golden retriever would just tell
Speaker 2:The golden retriever
Speaker 1:would just entire road map.
Speaker 2:Tell everyone.
Speaker 1:I'm I'm No. No. No. You can you can come on again and, you know, you know, spill Yeah.
Speaker 2:Mean, I'm in one
Speaker 12:of your companies, and I passed the
Speaker 9:other one. So
Speaker 2:Okay. Anyway, yeah, future of text email.
Speaker 12:So I'm mostly concerned about email. I think email it's like what's old is new again. Right? And so if I again, if
Speaker 1:I if I if I were
Speaker 12:a ship that's spilled from the top, here's what you have to here's what I have to say. Just like Apple built iMessage on top of SMS
Speaker 2:Mhmm.
Speaker 4:I think
Speaker 12:there's a layer to be built on top
Speaker 6:of email.
Speaker 2:Mhmm.
Speaker 12:That's all I'm gonna that's all I'm gonna
Speaker 2:tease you. Yeah. There's more. Anyway. Yeah.
Speaker 1:No. No. No. I think it's I think I think that's an interesting Yeah. Framework.
Speaker 1:So I
Speaker 12:I don't want I don't wanna own all communication. Like, I I don't wanna, you know, pull pull it on one place. Mhmm. I just wanna clean up the mess that is email.
Speaker 1:Okay. Yeah. It it is an interesting time, right? Because like, AI is transforming everything. Yeah.
Speaker 1:But yet I feel pretty confident that I will have an email address that I have to use 15 And like, that sounds kind of crazy and silly, but at the same time
Speaker 12:It's not going away.
Speaker 1:Fax machines. We talked with TJ yesterday about how he was spending 30% of their dev resources or something like that on fax machines. Right? That's crazy.
Speaker 2:At PillPass.
Speaker 12:When I worked at Facebook, we had the we we launched as a joke, just the TechCrunch network only. We launched a feature called fax this photo.
Speaker 3:And they covered it.
Speaker 1:Wow. No way. Yeah.
Speaker 12:Yeah. It was literally launched
Speaker 1:Just to troll them?
Speaker 12:Oh, yeah. You you can Google this story. Like, TechCrunch, Facebook, fax this photo. My engineering buddy, Evan, we were we were launching all these things one day.
Speaker 2:Fax your photos. Not 2,009. Wow.
Speaker 12:Yeah. There you go.
Speaker 2:That's amazing. Okay. So Facebook punked us. This isn't really going live for everyone. That's actually
Speaker 1:very funny. They they
Speaker 4:they network.
Speaker 12:They they they tried to, like, pretend, like, they were in on the joke, but no.
Speaker 2:They were.
Speaker 4:That's very funny. Got them.
Speaker 2:And
Speaker 12:also, by the way, our homestead
Speaker 2:with tech.
Speaker 12:Didn't know the joke either. And so Nah. This guy, Blake Ross, he had to run upstairs, in a in a in a frantic rush saying, guys, guys, guys, guys, it's just a joke. It's just a joke.
Speaker 1:Yeah. Full stack verticalized mog.
Speaker 2:Love It's amazing. Well, thank you
Speaker 4:so much
Speaker 2:for coming today.
Speaker 1:Bobby, this
Speaker 12:it's the real thing.
Speaker 1:Anyways Bobby, this this was super fun. Congrats on the launch. Excited to try the product and come back on Yes, thanks the insights. Come back on as you have more Right. More news to share.
Speaker 12:Amazing. Sunflower.me, if I can get a plug in.
Speaker 2:For sure.
Speaker 1:Let's do it.
Speaker 2:Go check it We'll talk to
Speaker 1:you there now. Bye. See you guys.
Speaker 2:And if you're trying to visit Miami, you gotta head over to Wander Dot Com. Find your
Speaker 1:Your happy place. Find your happy place.
Speaker 2: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 folks get on Wander. And we got Orin Hoffman coming in the studio. He is here. So welcome to the stream, Orin.
Speaker 2:How are doing?
Speaker 13:What's going on? Great. Happy to be here. Very excited.
Speaker 1:Great to great to finally have you on. Yeah. Probably should have
Speaker 7:done this a long
Speaker 2:time ago. We we we had a brief phone call, I think, a couple years ago. Good to reconnect. What's the latest in your world?
Speaker 13:Well, things are great. We're we've got a couple different things. We run a Yeah. Like a weird holding company where we own a bunch of data companies, start different data companies.
Speaker 2:Yep.
Speaker 13:And then then we're also at Flex Capital where we do a lot of seed stage investing. We did 20 deals last quarter. Wow. We're supposed to do about 100 per year.
Speaker 2:That's amazing. Yeah. We were kind of struggling to find what your title should be, so we just put founder and investor because you you got you wear a lot of hats.
Speaker 13:Yeah. That's good. I I think you got, like, Sam Lesson on today. I'm, like, an aspiring Sam Lesson. So
Speaker 1:Okay. That's great. That's great.
Speaker 2:We are How
Speaker 1:are you
Speaker 2:on the slopes? Are you a good skier?
Speaker 13:No. I'm not aspiring Sam Lesson. Oh, Chad, you're gonna behind that stage. Yeah.
Speaker 1:Yeah. I mean
Speaker 13:aspiring on certain things. Okay. Got like 20 other dimensions. Yeah. I'll never catch up.
Speaker 2:He plays a lot of tennis. He yaps a lot. But, yeah. Yes.
Speaker 13:He runs like three minute miles. Too good. Okay.
Speaker 1:I haven't talked about On the data side of your business, was that an AI bet that you made a long time ago? Is it did you get lucky? Did you have incredible foresight?
Speaker 13:Or betwels? Think I had the wrong bet. And so I think on the data business, I think we had believed that as the that these companies that sell data, like data as the ingredients, not just, like, analysis on top of data, the ingredient, we thought that these companies would become like way more valuable because we thought the number of buyers of data would go up significantly.
Speaker 2:Mhmm.
Speaker 13:So if you think like, you know, people this is ten years ago, people made, oh, there are maybe 50 hedge funds that buy data today significantly. There's 11,000 hedge funds. The market's gonna go from 50 to 500. Mhmm. I think the market went from 50 to like 58 over the last ten years.
Speaker 13:So so it really didn't go up. Retailers or maybe 20 retailers that bought a lot of data ten
Speaker 1:years ago. Out of out of your out of your if you this will be tough to remember specifics, but a lot of, like, seed stage companies will be like, oh, well, we're gonna generate this data and, we're gonna sell it eventually and it's gonna be valuable. And it's like, oh, and then you kind of press them on it, and it's like, well, hedge funds will buy it. And then it's like, okay, are you confident that those 58 hedge funds are Already Have you seen
Speaker 13:any of your They're a terrible market. It's a very small market, And they're really most
Speaker 1:of them
Speaker 13:are even, like, the biggest hedge funds in the world, like Bridgewater, like, amount of data they buy is minuscule. Compared to the AUM, it's, like, it's basically zero.
Speaker 1:Yeah.
Speaker 2:And And is that just because they They spend
Speaker 6:more on, like, lunch.
Speaker 2:Than Yeah. Are they getting data from other sources, like, more public sources? Are they scraping the Internet? Or are they just not using data driven algorithms I
Speaker 6:mean, they
Speaker 13:they have some data. They have data that you could put in an Excel file and stuff like that. These are not, like, you know, smart people
Speaker 1:Yeah.
Speaker 13:Are thinking about quote unquote data, but we actually think of like a data business that's selling data, proprietary data, different types of data. Yep. And usually data that's, like, larger than you could, like, put in Excel file. Most funds are not doing it. Most they're really, really yeah.
Speaker 13:If you think of, like, real estate Mhmm. So when we were starting, like, the number of real estate investors that were using data was zero, and today it's Blackstone. It's like one. It's gone away from zero to one. Real estate's a pretty big asset class.
Speaker 13:Now they're using some data, so people are using still some data. But really, like, we're talking about, like, real alternative data, really have a very sophisticated system to be able to ingest it and use it. It's very, very, very small.
Speaker 2:Is that driven by the fact that maybe it's almost like I mean, I I we've been thinking a lot about Google IO and v o three and Google's advantage in video generation, particularly because they own YouTube. And YouTube feels like an incredibly valuable data source.
Speaker 1:Correct. I agree.
Speaker 2:It's almost but the whole, like, data is the new oil. It's almost like, no. Data is like a Rembrandt painting that there's only one of, and so Google doesn't wanna sell that data. Like, Google wants
Speaker 13:to Definitely not. Sell.
Speaker 2:Right? And so the like, yes, the data market would be bigger if all of these assets actually transacted and were fungible like oil, but they're not. They're super proprietary, and the companies that love brand.
Speaker 13:Your data is more valuable.
Speaker 6:Sure.
Speaker 13:So if you if you've got something like Reddit and everyone knows Reddit, they understand what people are talking about on Reddit and they say, okay, we're having all these interesting conversations, they sell that to Google for $60,000,000 or something to train their LLMs. And but if you if you had just like lots of people having interesting conversations but you weren't called Reddit
Speaker 2:Yeah.
Speaker 13:My guess is instead of 60,000,000, you might get 10,000,000 or 5,000,000 or something. Like, the brand is actually the 10 x thing of why people wanna buy it as well.
Speaker 2:Yeah. What about just, creating data for the purposes of artificial intelligence, not pulling data from other sources and trying to go find a round peg in a square hole with selling into a hedge fund. More like there is demand for robotics data right now, and we are going to go get a bunch of robots and generate a bunch
Speaker 1:of data.
Speaker 13:I like that. Yeah. I mean, obviously, like, Scale AI is a great company. Right? So they're doing that.
Speaker 13:They're actually going and building those types of data. We just we're we're investing in a company doing what you're saying with the robots. Sure. I I think those types of things are good, but it's not always just for the AI. Like, there's other types of buyers because if you just are selling to, like, AI core model companies, you're talking maximum of a dozen buyers.
Speaker 13:That's not a great market.
Speaker 1:Yeah. He went from 58 to 12. Yeah.
Speaker 13:Exactly. So do you just wanna sell to OpenAI, Anthropic, Google, and Facebook and maybe a couple of others. Like, I don't know. That doesn't seem like a great business long term either.
Speaker 1:Yeah. And and if the deal the first deal that you do is a hundred million, what's the deal size on the next one? Correct. Do you gonna create a hundred million dollars worth more data that you can sell to them? Is it even that valuable?
Speaker 1:Anyways, the the wanted to have you on specifically to talk about a a post that you had yesterday that went pretty viral. You said that any VC that makes you pay for their lawyers is not founder friendly. Founders barely affording rent should not be footing legal bills for VCs with private jets, and yet this is standard. You kind of extrapolate on this, but you're writing, you know, 20 checks a quarter, maybe more. I'm sure that almost every single one of the companies you back ends up, you know, having to pay some VC's lawyer bill maybe in the next round.
Speaker 1:But what I I would love for you to kind of break down the post and what
Speaker 13:Yeah. So for those people who don't know, a standard in a term sheet, somewhere in the term sheet, it says usually, says the company must pay up to x dollars of the venture capitalist legal fees. And that x can be negotiated and it's can be as low as $10 and I've seen it as high as $300 for more complicated deals and stuff like that. And it's there. And it just it seems it seems odd for a whole bunch of reasons.
Speaker 13:First, it's like there there may be many different investors, but you're only paying the lead investors types of things. Second is that, you know, why are they, you know, why are they actually having the company pay? It's it's it's like a little bit of backdoor way to get your fees paid. And then there's, like, there's, like, a a more complicated argument as well, which is I don't think this is LP friendly. A lot of l a lot of VCs will say this is LP friendly.
Speaker 13:Because now I don't have to like Yeah.
Speaker 1:Wouldn't the person paying presume you you can pass it. I mean, that the VC could pass the fees on to their LPs. The Correct. So
Speaker 13:they could pass it on to their LPs. And this is a backdoor way of doing that without actually telling the LPs that you passed it on to the LPs.
Speaker 1:By taxing the the company.
Speaker 13:It's it's taxing the company, but it's but it's a it's it's it's even the LP isn't aware of it. Whereas if you actually normally, if you if you use Tigus or something and you pass that on to your LP, your LP sees the bill and they're like, why are you spending $50 on Tigus? Like, you should be spending less. And they can have a conversation or if you're like if you're having air travel, they can understand that as well.
Speaker 2:Wait. Wait. So there's a whole bunch of why Can you give more clarity around the idea of passing fees
Speaker 1:on So the real fees so VCs have like two and twenty. Right? But then there's certain fees that you can pass back that it gets it closer to even 3 you could get it up to like 2 and a half, 4%. And that could even be like when a VC pays for lunch with a founder, you can pass that on,
Speaker 2:correct? Interesting.
Speaker 13:Yeah. And every VC has a different model. Different structure.
Speaker 2:We go online, we'd like, there's 2% fees, and then you gotta do whatever you want with that. If you need a private jet, like, that's coming out of the 2%. If you need to pay salaries, if you need to pay for Tigas, you need to buy lunch, like, it's all coming out of the 2%, but you're saying it can be passed on.
Speaker 1:The the true loaded fees can be much higher than 2%.
Speaker 13:Yeah. Like, we have Flex Capital. We try to almost do everything in the 2%. So if we go to
Speaker 12:a lot
Speaker 6:of social,
Speaker 13:we take it out of our own management fee, which means we get less compensation because that's
Speaker 2:Of course.
Speaker 13:You you most of you see, we wanna protect that 2%, that goes directly to them. Right?
Speaker 2:So Yep.
Speaker 13:Yep. We get less compensation, but we think it's more LP friendly. Mhmm. And then we'll you know, there might be certain things like your your fund audit might be done to the so you have to decide, okay, what is what's actually done to the fund versus what's done to the management company. So we'll we are more to the management company.
Speaker 13:Every VC will do it different on how they do it, but some can be like but at least regardless, at least generally when they're passing fees, at least the the LPs do see it. Yeah. And then they can have a conversation like, hey, why are you do spending all this money with lunches to me? Why am I paying for your lunch to go to Spago or something? Whereas with the legal fees they don't know.
Speaker 13:The LP has no way of accounting that
Speaker 2:money. What about, like, general pressure to bring down the cost of startup legal fees at those series a level? Justin Kahn was working on a project with Atrium to try and automate the the series
Speaker 1:Before you can even get there, there's Hardly seen I think Ahmad had a good response Sure. To your post from Mercury saying that, like, he just basically tells the lawyers, we're gonna cap it at this, and you agree up front. And then the lawyers are super motivated. But that's still
Speaker 13:That's and that by the way, that's Iman's amazing and that's that's definitely step one. Like, gotta negotiate that cap. Maybe you can't negotiate all the way down to zero, which is what I would like to see happen more, but you've gotta negotiate it. My guess is also it it also depends on the higher the cap, the longer it will be to close your round. So, you know, most people know you
Speaker 2:get terms Shouldn't it be the other way around?
Speaker 1:No. The higher if it's a high cap, the the lawyers are just gonna be like, yeah.
Speaker 2:This is gonna take
Speaker 1:things. Yeah.
Speaker 2:Because it should be it should
Speaker 1:be I mean, search price
Speaker 2:So that
Speaker 1:so I'll pay
Speaker 2:you 300 k to close it this weekend or 50 k, and, yeah, you can take a month.
Speaker 13:Like, actually, I shouldn't basically tell you, like, here's how you close your round. It's gonna be Yep. Fifteen days
Speaker 2:Yep.
Speaker 13:Plus one day for every two thousand dollars that's in that.
Speaker 2:Oh, my god.
Speaker 13:That will I can guarantee you that that will that will that will be exactly what it is for every single round that
Speaker 2:is in there. So backwards.
Speaker 1:Shouldn't shouldn't one one defense of of start ups eating the cost is that, you know, if you're if you have an emerging manager with a $20,000,000 fund and they're barely, you know, paying themselves Mhmm. A dollar in in salary and they wanna lead around that that ends up getting priced, it it could get ex expensive. But your argument is still like, okay. Well, the LPs are still eating that that cost.
Speaker 13:Yeah. I mean, look. It it can be negotiated, and it maybe in some cases, could make sense that's in there. But there if if you're why are you doing something so complicated? I mean, YC created the safe.
Speaker 13:The safe doesn't have any legal costs, right, really. You you can actually use a pretty boilerplate thing. You you knew that most of these terms you should be negotiating in the term sheet anyway. So going from term sheet to close, which is where all the legal costs come in from term sheet to close, like, why is that expensive anyway? It's because probably you're not managing the lawyers.
Speaker 13:The lawyers have no incentive to to keep the cost low because they know what the cap is. If the cap says 50 k, I guarantee you, you're getting a bill for no less than 49 k. Like, in in the history of the world, I doubt it has almost ever come in less than 49 k for a cap of 50 k. Like, how do they automatically always It's perfect.
Speaker 1:It's perfect.
Speaker 13:They're they're filling the space.
Speaker 1:They're built different. Priced. The the other thing as an LP, what you don't wanna pay the fees and not get the ownership is the other thing. Right? It's like, if you're just getting past the costs and you're like eating that, but you're not getting like the the incremental kind of dollars deployed into the company.
Speaker 1:Yeah. Or like the incremental ownership. Is it does it I mean, I I guess like where I'd wanna go with this is what do do you have conviction or or any excitement around tools that can be, like AI tools specifically, that can be introduced into the process? Like, that term sheet to close period to just make that more efficient where we could say, okay.
Speaker 13:In most cases
Speaker 2:but first of
Speaker 13:all, like, we we just said, we're just involved in a company that did term sheet to close in in six days. Like, it's not that hard, especially in the early stages of a company. Like, how much diligence do you need to do? You need to and look, the company did a good job. They got all their stuff in a data room.
Speaker 13:They did all the things that they were supposed to do. Then as the venture capitalist, okay, well, you've gotta you've gotta somehow read it read through it. Maybe you can use AI to read through some of it. You gotta go check it. You have to make sure that the the bank account is legit and all these other types of things that isn't fraudulent.
Speaker 13:But it shouldn't take that much time. The main reason it takes a really long time is just the back and forth. You put a red line in. I send it to you, then you don't have time to look at it that day. It takes you three days, then you send it to me, then I it's like, if we actually all got in a room, that's what they did.
Speaker 13:So they got it all in a room on day six
Speaker 1:That's right.
Speaker 13:And they basically put like a four hour block and they said we're gonna just go through every single issue right here and they're able to iterate on it just live and then you would put it on mute, you would talk to your lawyer, you'd go back, it just got done. It's so much easier and obviously even M and A agreements like you should be able to get those done so much faster and actually those often do get done faster. Yeah. Like sometimes you can do an entire M and A from term sheet to close faster than you can do a VC financing. Many M and As go faster than Because everyone's just motivated Incentives.
Speaker 13:To really work on it and put in the time to make it happen.
Speaker 2:Yeah. Well, thank you so much for stopping by.
Speaker 1:Come back on again soon. Sorry we unmuted.
Speaker 13:Invite me anytime.
Speaker 1:Yeah. This is great. Yeah. We'll make it happen. Yeah.
Speaker 1:Great hanging.
Speaker 2:Talk to you soon. Cheers. Bye. Yeah. We have some breaking news.
Speaker 2:The first nuclear executive order has dropped. I'm gonna read here from one call out that people are celebrating. To maximize the speed and scale of new nuclear capacity, the Department of Energy shall prioritize work with the nuclear energy industry to facilitate five gigawatts of power uprates to existing nuclear reactors and 10 new large reactors with complete designs under construction by 2030. This is exactly what we were asking for with let's copy paste Diablo Canyon. We have Doug Bernhauer from Radiant Nuclear in the studio.
Speaker 2:We're gonna bring him in and get his breakdown on it because he's obviously been working in this industry for years and should be able to give us an update on, what's happening. Thank you so much for joining the show. Doug, been too long since I see saw saw you. I think I saw you in DC last, but, should be an exciting day. But can you give us your read and analysis on what's happening?
Speaker 10:Yeah. It's, unbelievably exciting. There's a whole lot of, text. I I had these fact sheets that came out, I think, to the media on all these executive orders. It's unbelievably exciting, but it's all coming in, like, right now.
Speaker 2:Just this,
Speaker 10:I think the the actual official documents just got posted only minutes ago, so I I haven't read
Speaker 1:So you're an expert. You're an expert is what you're saying. I know.
Speaker 2:Well, we really put you on the spot. But, I mean, can you talk to me about a little bit of the a little bit of the history? What, I mean, first, introduce yourself, what the company does, and then maybe we can build up to some of the, maybe problems or areas for improvement that the industry has been asking for, and then we'll kind of dig into, what's happening today.
Speaker 10:Yeah. Thanks. So I'm the CEO of Radiance, a nuclear portable microreactor company. We're focused on mass production of one megawatt reactors. We'd like to see 50 of those per year, and they've come up factory line and then go out to the customer wherever they are, run for five years, and then come back and be refueled.
Speaker 2:Yeah.
Speaker 10:So it's a very unique sort of model. And my background, before that, I I worked at SpaceX for twelve years. Worked on the first rocket with legs amongst other really cool stuff for Elon, but eventually focused on nuclear. And it's a it's a really unique model that we've been trying to work. You know?
Speaker 10:A a normal reactor is about a thousand megawatts. The thing we're working on is one megawatt. Mhmm. It's gotta be road transportable. We're trying to make the nuclear power that people want because the problem that we see, with why we don't have all this nuclear technology today is really that there's not as many customers, but that is all completely turned around, I don't know, in the past maybe just two years, right, with all these announcements of the big data center players coming in to buy nuclear, to restart old plants, to build new ones.
Speaker 10:And we've actually been fighting for a lot of regulatory reforms that that we see as probably being necessary for our particular model
Speaker 1:Yeah.
Speaker 10:Where you've got a, really, a factory that makes reactors Yeah. Where you have assembly, and you don't have any construction. If you read the rules that are 50 years old, you get you hear about construction a whole lot.
Speaker 2:Yeah.
Speaker 10:And so it's not really focused on or talking about the right sort of thing.
Speaker 2:So, yeah, when we last spoke, you were working on the helium loop going to test at a dome in Idaho. How are things going? What have been the most recent updates for Radiant?
Speaker 10:Yeah. There's some legal updates. Just a month ago, we were announced as one of just five companies who will get access to fuel from the Department of Energy.
Speaker 2:Mhmm.
Speaker 10:Something we've been working on for a very long time. It's unbelievably exciting. When I started the company back in 2020, we said we would do a critical test for the reactor at full scale in 2026. We are on target to do that. And, really, I mean, because of that announcement and the support that we're getting from federal government, another change just recently.
Speaker 10:You know, we've been working through a process they have with the national labs. We're working with Idaho National Laboratory. And the fun context that are here, they they've tested actually 52 reactors in their history.
Speaker 1:Wow.
Speaker 10:Although the last of which was in 1977. So it's been a while, and we have a kinda old process. They are aware that
Speaker 1:Anybody was there anybody that was a part of that last test that's still there, or is it all just kind of lore at this point?
Speaker 10:It is sort of lore. It is sort of lore for the new reactors, but there definitely are staff for their you know, there are the advanced test reactor, the ATR reactors, so they test all the navy fuel that's been operational for a very long time. You can go tour it today. It's still operating. So there are definitely staff there who are very familiar with reactor operations and refueling.
Speaker 10:They also have a transient pulse test reactor, which is pretty amazing. It actually has an original core from the nineteen fifties still running and operating. It I I forget what the numbers are, but it pulls us into the several gigawatts range. So that there's some expertise there, but, certainly, there are not people there from the early nineteen seventies anymore.
Speaker 2:Okay. I have the, Wall Street Journal article pulled up. I wanna read some of the key points and, just get your reaction. So, the high level is that Trump signed executive orders to boost nuclear power industries, citing the need to overhaul regulations and fast track licenses. A lot of this is driven by tech companies like Amazon and Google who are driving demand for nuclear power to support AI systems and data centers.
Speaker 2:And there's an interesting wrinkle there where a lot of the hyperscalers made very aggressive ESG targets and, climate pledges before they knew that they were going to need 50 gigawatts of capacity. And so now they're really, really pushing for clean energy. The executive order aims to shorten approval times for new reactors, but critics worry about the impact of safety. Now I wanna talk to you about that balance between speed and time to market and safety. I wouldn't trust myself to design a nuclear reactor and get it approved in a day, but it feels like we haven't had a new reactor design approved in way too long.
Speaker 2:And so we're probably on the too slow, side of the curve. But where should we be? What is a reasonable amount of time to actually approve a new reactor design in your opinion?
Speaker 10:Yeah. I mean, probably on the shortest scale, it's gotta be something like six months. Like, if I use that context I said earlier, 52 reactors in up till just 1977 Yeah. Nuclear technology only existing since the mid fifties. That means they were doing more than two per year.
Speaker 2:Yeah. Yeah. So let's get back to that standard. Right? Walk us through what Absolutely.
Speaker 2:What what just as a citizen, not as an entrepreneur or founder or executive, as a citizen, what type of tests do you actually think are the most valuable? Is this, I need a physicist to run all the numbers in a spreadsheet and run simulations? Do we need to just fire this up in a place where even if it explodes, it's we it's you know, we've seen that it didn't explode, and so we've done real word testing. Is it a balance of those? What kind of testing do you think, is best that can be executed at speed?
Speaker 10:Yeah. Well, it's a great question. The best is immediate testing Mhmm. Incremental testing.
Speaker 2:Yeah.
Speaker 10:And there's no reason that you you necessarily need to go slower. You can regulate along with the speed with which you can do the design, the analysis, the procurement, the assembly of a reactor. Mhmm. If a company is willing to spend capital to take that financial risk, you know, the the goal is don't put fuel in unless you get approval. But there should be really zero barriers up until that point because there's no safety risk.
Speaker 10:Yeah. But then when you get to that point of, like, okay. Now there is risk. We are gonna load fuel in. You do want someone to go and check your numbers, and you want them to dig deeply and thoroughly into what your reactor is and does and what the plan is.
Speaker 10:But the fact of the matter is when you load fuel, it's not anywhere near critical. You can make a you could look at subcritical multiplication factor
Speaker 1:Mhmm.
Speaker 10:That will trigger little sensors that are effectively it's not you know, something that sounds like a Geiger counter. We use fancier things today. We use vision chambers. We use BORON line proportional counters. You can do the analysis to show that you will get many, many counts per second even with a very small amount of fuel loaded.
Speaker 10:Like, let's say you construct one sixth of your core, you can already validate models. Mhmm. And yet you are ridiculously far away from being able to go critical.
Speaker 2:Interesting. They
Speaker 10:haven't even assembled the whole system. Right?
Speaker 2:Yeah. So, the the FDA has similar approval timelines for new pharmaceutical drugs, but, the the reason that it takes a long time to to approve a new pharmaceutical drug in America, it makes more sense to me because if I'm gonna take a drug, I kinda wanna know, hey. Is it gonna is it gonna have an effect on me in thirty years? So maybe I wanna see a mouse model or a monkey model or a dog model or even human testing over a long period of time. And, sure, there's some acceleration there.
Speaker 2:We don't need to wait a full lifetime to approve a new drug, but there is an element of time. Is there anything that's that's comparable to that in nuclear where the behavior of a system over a two year time period is different than a behavior of a system over a two hour period?
Speaker 10:Yeah. I I think the the most similar thing would be the effect of neutron fluence inside of the core. Mhmm. So if you hit some part parts of your system with neutrons, they will generally swell up. Metallic parts swell up, and their thermal conductivity usually go down.
Speaker 10:Their density goes down, but the physical shape of them changes.
Speaker 2:Sure. So you might have to test that in some special way to know what a ten year lifespan looks like. Right?
Speaker 10:Yeah. But a lot of these materials have been tested, and there are these giant data handbooks that that it's very predictable. So there's, like, the nuclear systems materials handbook, which is, like, put together in the nineteen seventies. It's actually just released finally through this lengthy process where we had a ton of help. We went and recovered this great national asset, and it's now available for all reactor developers.
Speaker 2:That's amazing.
Speaker 10:Yeah. So they're pretty predictable effects. So there's not I would say there's really other than the effects of neutron fluence Yeah. There's nothing really that challenging. We we plan to test right next year in the dome.
Speaker 10:That is a hermetic structure totally sealed with its own radionuclide detection, in it. And so you can partially fuel a core, and you could do it in a hermetically sealed chamber at a facility where it's surrounded by scientists, right, and, experimental hot cells and other test facilities that would allow you to see what any problem is, solve any problem. But we are using all well known standard materials.
Speaker 1:Got it. Makes sense. Were you is it funny to you that the the news of Taiwan decommissioning their reactors hitting the same week that were saying that We need more. We need more? Or or is there something about Taiwan's as an as an island?
Speaker 1:I I'd read something about there being a bunch of, you know, enough earthquake activity in the area that, like, there was some potential reasoning around that. But then I we also had someone else on who said we that we have solutions for that at this point. It's not a a risk that should require shutting it down entirely.
Speaker 10:I don't know that these things are linked, actually. I think I'm I'm behind on the the Taiwan Reactor news. Mhmm. Those might have just been around for a
Speaker 6:long time.
Speaker 10:Might be coincidental.
Speaker 1:Yeah. It's not No. No. I I'm not implying that they're linked. I I was saying more that it's it's it is kind of ironic in the sense that, like, you know, we have one one country saying we're we're shutting these things down meanwhile.
Speaker 1:And they're less far less
Speaker 2:energy dependent than Germany kind of doing the same thing. It feels like some con like, some countries are following the American nuclear playbook from two decades ago. And maybe they should be adopting the playbook from today. And and they need to
Speaker 10:Well, we just announced it today.
Speaker 1:And Yeah. So hopefully Yeah. How how monumental is this for you? Were were you, like, betting the company in some way on eventually getting an administration that would, like, introduce an EO and, like, you know, try to bring about policy around this?
Speaker 10:I think, yeah, in a lot of ways. Absolutely. If you're working on something innovative, there's gonna be regulatory gray areas. You have to know about those gray areas and manage the direction they're going in to make sure that the vision that you have is the right the way that the administration or the the regulatory agencies go so that you're not decoupled from reality. But you do have impact on that.
Speaker 10:And you actually you know, you can't write down rules ahead of time for something that's not invented yet.
Speaker 2:Mhmm.
Speaker 10:Right? So you but you do always take some risk in doing that, but I I think it's actually pretty beautiful. Yeah. You lay out a vision go, like, imagine you have, like, a bunch of reactors. They're all built identical to one another, so they're super reliable.
Speaker 10:You deploy a whole fleet of them. They all stream data back continuously. We're in the modern world. We're in the information age. Why can't all that data just stream to the regulator?
Speaker 10:Why can't it be completely modernized? And we've been talking about that for a while, and I think that has led to now that along with other things people said have led to these sort of events where the administration goes, okay. We're gonna just we're gonna actually go and support this.
Speaker 2:Yeah. Right? Last question from my side. Can you talk a little bit about how you see the market playing out? Obviously, there's some news about where we might be getting really big nuclear reactors reactors at the one gigawatt scale.
Speaker 2:You're building at the one megawatt scale. Is there going to be a 10 gig a 10 megawatt company, a hundred megawatt company? Is it a smoothie? You call it the
Speaker 1:same company and you just Yeah.
Speaker 2:Or or maybe they're maybe they're bundled or or broken down or scaled up or scaled down. Like, where like, how will this play out and and and who will do what, I guess?
Speaker 10:Yeah. Well, as a consumer, what you want is for there to be two or more companies at each scale.
Speaker 1:Yeah.
Speaker 10:Right? And, yes, there will be something at the portable micro reactor scale. May Mhmm. Two two companies there at least, and maybe that's one megawatt and smaller.
Speaker 1:Mhmm.
Speaker 10:If you are willing to put a reactor in the ground somewhere and pull the fuel out on that site and put it in a system, you can make a bigger reactor. I call it a micro reactor, 10 megawatt scale. So you want two companies there. You want two at the hundred megawatt. You want two or more at the gigawatt also because of different different areas that need these amounts of power.
Speaker 10:So if you think about and we never think about these places. There are remote places in the world. Like, in Alaska, you have over a 50 disconnected micro reactor locations or micro grid, sorry, locations that could use reactors. Canada has over 200 of these sort of areas, and these are coastal if you know, look at those land areas on the map. They're they're massive.
Speaker 10:They have a need for heat and for power. They're extremely isolated. There isn't an actual grid, so you need a small system, right, on those those types of regions. And if you put in a one gigawatt reactor somewhere, you had better have a lot of big power lines to move that power to enough customers to use that. Right?
Speaker 10:So on the two, like, extreme ends of the scale, there's, like, pretty obvious use cases. And then in the middle, it's like, if you don't wanna wait years to upgrade the grid or it'd be very expensive, like, million dollar a mile or more upgrades to power lines
Speaker 4:Mhmm.
Speaker 10:Then you might go, well, hey. We have this region where we're gonna use 10 megawatts. We could put a 10 megawatt reactor. That's economical for us Mhmm. Right, without overcomplicating it or having to add power lines extending across states.
Speaker 2:Awesome. Well, thank you so much for popping We'd love to be back again
Speaker 13:and to
Speaker 2:go even deeper.
Speaker 1:Congratulations on the overnight success. I know the job's not finished, but, I like, I like this for you guys.
Speaker 2:Yeah. This is great. It's great news.
Speaker 10:Yeah. It's really exciting. I mean, one of the coolest things, they, they ask to reform the process that we're using at national laboratories to test reactors. That's gonna be extremely critical to us staying on our schedule. We will achieve going critical next year, because of a lot of things happening today.
Speaker 2:That's great news. Thank you. You're the man.
Speaker 1:Thanks for joining, Doug. We'll talk to you soon. Milestone. Alright. Cheers.
Speaker 2:Good luck. Talk to you soon. I wanted to pull up well, we're we're gonna stay on nuclear for a little bit. We're going long. We wanna pull up Scott Nolan, my former colleague at Founders Fund and the CEO of General Matter, a nuclear fuel, refinement company, was in the White House.
Speaker 8:CEO of General Matter. We're an American enrichment company trying to bring back The US's lead in producing nuclear fuel. So just like car engines need fuel, nuclear reactors need fuel. Right now, The US is completely dependent on other countries to make the key step of enrichment in this fuel. And these executive orders are gonna pave the way for The US to regain its lead.
Speaker 8:So we really appreciate it.
Speaker 6:Will you be doing the AI plants? Because we have a lot of them going up now and or soon going up, and they need tremendous electricity. Are you gonna be involved in many of these plants?
Speaker 8:Yes. Will Scott Nolan, CEO of
Speaker 2:General Motors. Company. We're in the White House. Color temperature, a little bit off on that video, but, otherwise, fantastic.
Speaker 4:Yeah. Well, congrats
Speaker 2:to Scott. I mean,
Speaker 1:what's Saia from Valor Yeah. Waiting room.
Speaker 2:We'll bring him in.
Speaker 1:Let's bring him in. Well, he's also has he been in the he's been in the capital?
Speaker 2:Yeah. He was over there today in DC. Let's bring him in. And he is building at the 10 megawatt scale. And so the the everyone's got everyone's playing in the different market.
Speaker 1:Come play. There he is.
Speaker 2:Thanks so much for calling in. Can you give us the breakdown? How are doing?
Speaker 3:Doing really well. Thank you so much for having me on, guys. I'm, I'm actually just coming back from going live on a a little upstart called Bloomberg TV. Very nice. You know, the it'll take a while for them to catch up to your stature.
Speaker 4:Yep. Yep. But Yeah. It's kind of like
Speaker 1:a feeder heavy. It's like kinda like a feeder system
Speaker 2:for season. Can you go horizontal with your phone?
Speaker 3:Yeah. Yeah. Sure. There you go. Yeah.
Speaker 3:That's right.
Speaker 4:A little
Speaker 3:a little feeder network for the technology brothers. So, yeah, great to be in the temple technology today.
Speaker 2:Yeah. It's good to have you. Break it down for us. We we we read kind of the highlights, but, what were the key, the key pieces of the EO in your opinion?
Speaker 3:Yeah. Listen. This is a total rewrite of the regulatory system in The United States for nuclear energy. You know, nuclear grew up in The US with a total dominance of nuclear power in terms of US strategy. Right?
Speaker 3:So we had the only nuclear reactors in the world for a while. We piloted essentially every nuclear reactor architecture that there is, and we wanted to protect that edge and protect that advantage. And so what we did is we built these high regulatory walls around the nuclear environment, hoping that nuclear wouldn't spread around the world. We wanted to protect this advantage. This is a natural instinct.
Speaker 3:I think it was a good instinct at the time, but the problem is that over time, our competitors are, you know, geopolitical rivals built nuclear anyway. And and where we are now is that these walls that we built to protect our advantage in The United States actually eroded our advantage, and we ended up building, you know, a a large wall around an empire of dirt. And so today, this is about bringing those barriers back down, allowing American entrepreneurs to to build nuclear energy again. There's a couple really important things announced here. One is revitalizing the Department of Energy.
Speaker 3:So the Department of Energy was created to be a nuclear test agency. Not a lot of people realize this, but the DOE, we kind of imagine it to be this, you know, broad based energy agency, and and it is. But it was actually created to be a nuclear reactor test agency. And since it was created, it's only done that one time. And so this is about revitalizing that.
Speaker 3:And, actually, president Trump has given a strong commission to the nuclear industry. He wants three test reactors critical on US soil by 07/04/2026, America's '2 fiftieth birthday. And just a few minutes ago, we announced with the governor of Utah for the first time that we're partnering with the governor to, you know, full charge you know, full steam at hitting that goal and turning on a reactor by 07/04/2026 at the San Rafael Energy Test Center in Utah. So that's what we announced today.
Speaker 2:Congratulations. That's amazing news.
Speaker 4:Good luck. Thank you. Let's see. Success.
Speaker 2:So, yeah, I mean, it seems like, with any nuclear project, regulatory is always the main risk, the main, rate limiting factor. With regulatory out of the picture, is this more of an engineering challenge now? Is it a manufacturing challenge? Like, how do you weight the different challenges ahead for you to hit that deadline?
Speaker 3:That's absolutely right. Listen. You know, nuclear is is a technology that we've been exploring for seventy years now. We've we've done an enormous amount of physics around this. We've done an enormous amount of research.
Speaker 3:The thing that has stood in the way is one company deciding to be the SpaceX of nuclear. Right? Deciding to own nuclear energy, full verticalization from the design of reactors to construction, to manufacturing, to deployment, to operation. That's what Valor Atomics is attempting to do. There hasn't been a Ford of nuclear energy yet.
Speaker 3:There hasn't been a Tesla of nuclear energy yet. There hasn't been a SpaceX. Valoratomics is intending to be that company, and regulation has absolutely been the long pole in that tent. So this executive order is incredibly important. You know, I think this is really gonna set the tone for the next a hundred years of energy dominance.
Speaker 3:If we're gonna win on AI, on manufacturing, on supply chain, we're gonna do it with a ton of cheap energy.
Speaker 2:Talk about the first product, 10 megawatts. Is that correct?
Speaker 3:25 megawatt electric is our our commercial model.
Speaker 1:So Why'd you settle
Speaker 2:that there?
Speaker 3:Is yeah. We, you know, we've gone out and we've really hit an ambitious milestone. You know, I founded this company about seventeen months ago. We were intending to go out and build our first prototype reactor in eighteen months. We finished it in sixteen months.
Speaker 3:This is a test reactor sitting in our Los Angeles facility today. We've operated above temperature, above pressure, not with uranium, not splitting atoms yet, but with electrical simulation. And really what we proved to that is that it's possible to build a nuclear reactor in under eighteen months. Now that we've done that, we go and actually build it again in Utah and another one in The Philippines, and we actually load them with uranium for the first time, turn them on. After that, we go and build our commercial model, which is this 25 megawatt unit, and build thousands of them around the world.
Speaker 2:Very cool. Jordy, anything else?
Speaker 1:Sounds pretty simple.
Speaker 2:Draw the rest of the owl. Boys.
Speaker 1:Yeah. Just draw the
Speaker 2:rest of the owl.
Speaker 1:Yeah. We make we
Speaker 3:make thousands of nuclear reactors. We make trillions of dollars. I'm very excited. It's a good day and energy.
Speaker 1:Yeah. I mean, it's fantastic. I I I, you know, we were just talking with Doug from from Radiant, and in many ways, like, if you started a nuclear company at any point in history
Speaker 2:It'd be rough.
Speaker 1:You were betting on activity like we're seeing today and and action.
Speaker 2:So Yeah.
Speaker 1:Super validating for for you guys that had to get looked at like you were crazy in a bunch of pitch meetings early. Yeah. Because it it feels like one of those things where, like, culturally, I think in 2020, people started kind of waking up to, hey, wait. Nuclear is pretty cool and probably good, and we probably want more reactors, not less. Yeah.
Speaker 1:And then companies that, know, have have started picking up.
Speaker 2:How important is it for you to vertically integrate into the actual productive use of the energy? It feels like there's so much demand for energy. You could just become a mass manufacturing for nuclear reactors, and that would be enough of a business. Pre bro, we when we talked last time, I about a year ago, you were talking about, generating, fuel out of the air with this energy, but it feels like you might just wanna let the free market decide what the best and highest use of the energy is. Is there still a plan to do something with the energy that you own and control and just and and and decide, or is is it just like, let's just make as many nuclear reactors as possible right now?
Speaker 3:Yeah. You know, one of the core realizations of Valor is that there are some products that the market actually doesn't know how to buy. Right? So I think this is one of the most important realizations that Elon had with SpaceX, which is that if you're gonna make a rocket company that makes really good rockets, you also need to fly them. Right?
Speaker 3:You can't just build a rocket. You have to fly them too. And the reason is that the customer actually doesn't know how to fly the rocket. Right? A small sat company, a telecom company doesn't know how to fly a Falcon nine.
Speaker 3:And so it turns out the the best way to use a Falcon nine at SpaceX is to actually own the entire operational cadence, and then you sell products like kilograms to orbit and Internet connectivity. Right? So that's that's the right way, you know, to think about these really, really complex technologies. Nuclear reactors are like this as well. So, yeah, when we think about building lots of reactors, we think about building them on these very large energy campuses, and then we sell energy.
Speaker 3:Right? We sell energy, not not nuclear reactors. That might mean energy to AI data centers. Absolutely. It means hydrogen, and it means eventually synthetic fuels.
Speaker 3:Right? If we can make a synthetic fuel cheaper than diesel, cheaper than gasoline, we can actually become, you know, the the energy company of the world. Right? Because the majority of the energy today is in a hydrocarbon format. So that's that's kind of the core realization that we have in in starting Dollar.
Speaker 2:Very cool. Well, good luck. Thanks for calling in.
Speaker 1:Yeah. Huge day.
Speaker 2:Huge day. Congratulations.
Speaker 3:Huge day. Thanks, guys.
Speaker 2:We'll talk to
Speaker 1:you through whole industry.
Speaker 2:Cheers. What a great show. A whole world tour. Think just,
Speaker 1:I guess we just hit four hours.
Speaker 2:Anything else we need to cover before we get out of here?
Speaker 1:I think, breaking news, John.
Speaker 2:What's that?
Speaker 1:It's the weekend.
Speaker 2:It's the weekend.
Speaker 1:And as always, our board has been very explicit about this. Leave us
Speaker 2:a five on Apple Podcasts.
Speaker 4:Or less
Speaker 9:you
Speaker 1:don't feel like it. Yeah. Review us. Listen this far, you're four hours in. I'm guessing we earned that five star.
Speaker 1:So
Speaker 2:Just do
Speaker 1:it. Everybody have a great Memorial Day weekend. We actually won't have a Monday show Yeah. Because we're moving into the new studio Yep. But we'll be back in full
Speaker 2:force Tuesday.
Speaker 1:In the new studio in the temple on Tuesday. We're excited. Cheers.
Speaker 2:Have a great weekend. Have a good one. Bye.