Subscribe
Share
Share
Embed
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 TBPN. It it is Wednesday, 04/30/2025. We are live from the Temple Of Technology, the Fortress Of Finance, the capital
Speaker 2:of capital.
Speaker 1:We're here with Zach White from AVC at the Hill and Valley Forum twenty twenty five.
Speaker 3:In the
Speaker 1:Capital Building. We're in the we're in the literal capital, which is great. Yeah. We're normally in the capital of capital. Today, the capital of America.
Speaker 1:Many people
Speaker 3:call this the capital
Speaker 1:America because it It is. It is. We are here with Zach. Can you introduce yourself? What do you do?
Speaker 1:What do you like to invest in? What do you What's your takeaway from Hillen Valley so far?
Speaker 4:So my name is Zach White. I work at a fund called APC. We invest in everything from defense to biotech, healthcare. I spend a lot of time doing defense stuff. Yep.
Speaker 4:And the Hillen Valley has been a crazy vibe so far. We had Hamas protesters.
Speaker 1:Oh, yeah.
Speaker 4:We've had, you know, a a variety of different things happening here. So it's it's been great.
Speaker 3:Talk about the difference between this year's Hillen Valley versus the last, you know, couple years. From our understanding, it's been, you know, almost an order of magnitude more people here
Speaker 1:than Yeah.
Speaker 4:Think there's like 10 x people here.
Speaker 1:It does seem like There's like
Speaker 4:random influencers here, which is awesome. We have people rapping Okay. Like it's
Speaker 1:Oh, yeah.
Speaker 5:Yeah. Yeah. It's an it's
Speaker 4:an amazing vibe. That's It's like Coachella for, you know, people with g five fifty, so
Speaker 1:Yeah. Yeah. I'm sure the tarmacs are absolutely stacked right now. Amazing. Who who who have you listened to any of their speeches yet?
Speaker 1:Is there anyone that you're excited to hear? Yeah. I mean What do you think is the best, like, pitch for an actual concrete plan? Because there's a lot of people that are just like, we want better communication between tech and DC, but then there's other people that come with concrete things. We need to fund this.
Speaker 1:Yeah. Well,
Speaker 4:what's I think Jensen, he was talking about how we need to just be like onshoring all of these like fabs and stuff. You know, everybody wants to be in and like in in is crazy. Around Jensen. Yeah. So, you know, I think that he has like a really good plan on like what we need to do to make sure that we're not relying on China for all this stuff.
Speaker 6:Yep. Yep.
Speaker 4:He he was doing great. And then Brian Schimpf also, he he killed it at Andoril. You know, there's there's a lot of stuff that they're doing right now and it's just really exciting to see Yeah. Building the arsenal. Right?
Speaker 1:The arsenal. Re industrialized pilled project right
Speaker 4:now. Yeah. There's like a bunch of generals here and stuff. Yeah.
Speaker 3:And they have the the, you know, an actual factory, not just hype videos. Right? Yep. It's it's coming out. I think the it was cool to hear from Jensen personally.
Speaker 3:I mean, we we've seen these headlines around Nvidia's investment in The United States and our big question historically has been, you know, how much of that is like Really?
Speaker 7:Really real. And it seems
Speaker 3:like he is, you know, extremely
Speaker 1:Yeah. I have a few questions for Jensen. We wanna follow-up with him. It's like, is he a customer of re industrialization? Or is he truly a re industrializer?
Speaker 1:Because Yeah. Nvidia's an American company. They fab with TSMC. TSMC now investing very heavily in America and Arizona. Yeah.
Speaker 1:And we could see that go a lot further, in which case, I don't know why Jensen wouldn't wanna buy chips from Arizona, TSMC. That seems very logical, packaging with Very cheap. Like, he's gonna be very happy with that. But is there something that he can do personally to bring back jobs or create more manufacturing infrastructure in America? I don't even know if he has the tools or needs to do that, but that was kind of interesting.
Speaker 1:Yeah.
Speaker 3:It's interesting how Foxconn is always doesn't seem to be in the it's so associated with China despite being a Taiwanese
Speaker 1:company. Totally.
Speaker 3:That they have the same incentive to we
Speaker 1:gotta get the CEO of Foxconn.
Speaker 3:Yeah. Terry.
Speaker 4:Yeah. That'd sick.
Speaker 8:That'd very good.
Speaker 4:I think he just needs to start pushing demand here. Like, there's so much demand and if if he starts reshoring it here, all of a sudden, there's gonna be a lot of work that people need to do here. Yeah. And I think that that's kind of just like what he was talking about
Speaker 1:at Yeah.
Speaker 4:At Hillman Valley today.
Speaker 9:So Yeah.
Speaker 3:The the other line that stood out to me, he was like, some people there's gonna be new job creation. Mhmm. Some people are gonna lose their jobs. Mhmm. And then everybody's job is gonna change.
Speaker 3:So it's like, you know, basically embracing that change I think is
Speaker 4:Except, I don't know if you guys saw the Marc Andreessen clip this morning. Apparently, VCs are the only things that stay.
Speaker 1:Yeah. So
Speaker 3:We've been saying this actually. I mean, I I think it's act it the job of an investor is somewhat somewhat in this, you know, I I would actually compare it to just to come to Mark's defense a little bit, I would compare it in some way to the job of a lawyer or a doctor where just because a computer can do something well, you still want a human to sort of like sign off on the investment and have responsibility. Yeah. Because it's just not as satisfying to sort of like fire a it's not as satisfying to fire a, you know, a robot as it is Yep. To say like, you know, you you have you had responsibility over this capital, you know you know, etcetera etcetera.
Speaker 3:So
Speaker 1:The other big question I have is on the robotics side. I know you've done some AI investing. There's a big question in my mind. Obviously, we've scaled up on the pre training side, and these massive data centers have been built out. XAI famously bought a ton of Nvidia chips.
Speaker 1:Yep. Yep. When does that start to happen with robotics companies? Because robots are generating a lot of data. At a certain point, you need to build the big transformer and you need to crunch all that data down.
Speaker 1:And I haven't seen any of the robotics companies. They're still early. Yep. And none you know, you see Boston Dynamics. You don't hear about the Boston Dynamics data center.
Speaker 1:Right. You don't hear about the the physical intelligence data center yet. Yeah. But it feels like it's coming. Jensen kind of put it as like a five year timeline.
Speaker 1:I think anything that we can do to get more sight lines on how that grows is gonna be really, really key to NVIDIA because everyone needs a second act, and NVIDIA is like the king of the second, third, fourth act of its scientific computing, then gaming, then Yeah. Then then AI and robotics. I mean, after LLMs could be the thing that really drives like massive massive GPU demand. What's your take?
Speaker 4:Brett Adcock might be the guy here, but I I actually Really? I really think that like, have to be like really talented at fundraising. You just need such an insane amount of capital.
Speaker 1:Yeah. Yeah.
Speaker 4:You need tens of billions of dollars to do this well, and so it's really gonna come down to the people who can actually raise the money very well. And that's like a very small handful of people. May maybe Adam Neumann could do it, maybe Brett Adcock. I don't know who else,
Speaker 3:but I was kinda I was hoping for a surprise Elon appearance today. I don't know if it's I don't know if it's happening, but
Speaker 4:He's probably around here somewhere. He's probably like yeah. He's probably proximate to where we are right now. We should see he'll pop in.
Speaker 3:Yeah. That makes sense. What what else is top of mind for you this week? I know in many ways you Eight has placed so many bets in this sort of broad category that's relevant to where we are today, that it I I imagine a lot of it's just kind of like, you know, being a part of this, watching it play out. Where where do you where where do you what anything specific you're hoping to learn from today?
Speaker 4:I don't know. I just think that like, this was like this weird heretical space for so long, and now you see like hundreds of people here all just like sort of reveling in the fact that, you know, it's cool to do this now. Yeah. I'm just kinda like taking it all in and I don't know. Joe from from our fund has been doing this for so long and he always has this pithy thing where it's like, now this is the cool thing, what's the next Yeah.
Speaker 4:Sort of contrarian thing to do. Yeah. Yeah. I don't know. It doesn't seem that contrarian anymore, which is like really interesting.
Speaker 4:It's you We see people Yeah. Who are doing all sorts of things, you know, five years ago that are now here doing defense.
Speaker 1:Is there is there more like practical, like, or like tactics that you can do as a founder in an event like this? Maybe not just looking to get a feel for the vibe of DC, but actually understand, okay, there there are dollars going towards this. We can make this happen. We can go after this pool of capital. Is this a place where you can learn that?
Speaker 1:Is that is that a reasonable strategy?
Speaker 4:Something that you should have like done some pre training yourself and learned a little bit about like Sure.
Speaker 2:Who are
Speaker 4:the who are the deal makers here? Who are the people with the pools of money? Where are the programs of record? Yeah. Like, who are the guys?
Speaker 4:And they're all walking around here right now. Sure. So you should have basically done your homework before and and walk up to the people that are actually in control of where this money's coming from.
Speaker 1:Well, we got Dave for a couple minutes. Thank you, Zach. Nice to see you guys. Congratulations, Zach.
Speaker 3:Great to great to have you on.
Speaker 1:Dave, welcome to the show. Let's hear it for Dave Friedberg. We will
Speaker 10:There he is.
Speaker 1:We are on a badge. We're on a we're on a mission to get every single All In podcast host on the show. You're the first.
Speaker 11:How many have you had?
Speaker 1:Well, you're the first. You're the first.
Speaker 11:Might be might be the last.
Speaker 10:Let's
Speaker 1:see. Yeah. Might be the last. Let's see how it goes. We're on camera here?
Speaker 1:Yeah. Yeah. We're on camera here, there, there, everywhere. We are live.
Speaker 11:What's your audience like right now, do you think? How many people
Speaker 1:Probably a few thousand. Growing. It grows over time. The longer we stream, more people flow Yeah. But Yeah.
Speaker 3:Yeah. You mean you mean the livestream this very moment?
Speaker 1:This very moment. Yeah. Probably a few thousand.
Speaker 3:Say in the thousands.
Speaker 12:But
Speaker 1:now that you're here, it's probably gonna 10x, maybe 100x.
Speaker 2:We could
Speaker 11:go to 20?
Speaker 10:Yeah. 30?
Speaker 3:Yeah. It'd be awesome. What are you talking about today?
Speaker 11:So it it's the same topic for everyone. Okay. America leadership. Yep. America strength.
Speaker 11:Yep. China bad.
Speaker 1:America good.
Speaker 8:America good.
Speaker 1:America good.
Speaker 12:I like this supreme.
Speaker 3:Yes. We must win.
Speaker 1:Yes. Yes.
Speaker 11:So that is the topic. Yeah. Think my every one of the topics is, I think, worded a little bit differently, but they all have the same
Speaker 1:end up
Speaker 3:in the same spot.
Speaker 11:The same spot.
Speaker 1:Can you talk a little bit about Ohalo and how you interact with the government? Because it's very different than like what we normally hear with like DOD. I gotta get a program of record. The government's gonna buy my stuff, but it does seem like it's important for you to interface with the government in some way. What does that look like for you?
Speaker 11:The seed industry has three regulators. It's the USDA Mhmm. EPA and the FDA. So there are regulators, regulatory frameworks and bodies in those agencies. And it's a pretty well kinda tried and true, but there's not a lot of procurement.
Speaker 11:You're not servicing the government. So Mhmm. DOD is very different. There's a massive industry here that services the government. Mhmm.
Speaker 12:But like a lot
Speaker 11:of other industries, agriculture is regulated to some extent. Yep. It is regulated.
Speaker 1:Yep.
Speaker 11:So there are regulators that we deal with. But we're not building a business selling it to the government Yeah. And supporting government action.
Speaker 1:Are we over regulated? Are we under regulated?
Speaker 11:Everything's over regulated.
Speaker 1:Okay.
Speaker 11:That is a matter of I was talking with someone last night who I dinner with who works in the government about his observations coming in to the government and just how insane it is. We were talking about why that is. And I think, like, every organization has a fundamental incentive to grow from a couple of different points. Mhmm. You, as an individual, start out as an individual contributor in a company.
Speaker 11:Yep. Then you get promoted to be a manager. Now, you're managing two or three people. So your career progression ultimately is, I wanna manage 20 people. I wanna manage a department.
Speaker 1:Totally. Totally.
Speaker 11:When you have that incentive model within any organization, whether it's a
Speaker 1:school
Speaker 11:administrative or a startup Yeah. Or the government, there's an incentive for people to wanna get more resources.
Speaker 1:Yeah.
Speaker 11:So every year, everyone says, not what can I do less this year? Everyone says, how can I do more this year? Yep. And the answer is always, I need more people. I need more budget.
Speaker 11:Yep. So the natural flow of any organization, nonprofit, school, government, company, over time, get more money
Speaker 1:Yeah.
Speaker 11:Grow, add more people. And ultimately, you end up seeing all of these things that don't necessarily map to the mission Yeah. Of the organization Yep. But they're created to meet those incentive models. So in the government, we have a lot of regulatory overhead like the the guy I was talking with.
Speaker 11:He's like, I cannot believe the regulatory processes that we've created for no reason. Mhmm. It's just stuff that came out of the blue. Yeah. So this is true in energy.
Speaker 11:It's true in agriculture. It's true in drug testing. It's true in so many different markets Mhmm. That I think it's, you know, it's starting to become apparent to a lot of these outsiders who are now stepping into the government that there's an opportunity. Now, last year, the the the important point that there was a Supreme Court case where they struck down what's called the Chevron doctrine.
Speaker 11:And the Chevron doctrine basically vested authority to the agencies to regulate their industry however they see fit. Yeah. The courts always said, hey, whatever the agency says is the way we need to regulate, we're gonna rely on them. Mhmm. And that was the Chevron case from years ago.
Speaker 11:Yep. And what they ended up saying is like, no, that's actually not true. That agency does not have legal authority Mhmm. To just regulate everything however they want. They have to have a law passed.
Speaker 11:Congress has to pass a law Mhmm. That says these are the regulations that need to be enforced. Yeah. And if that law doesn't exist, the agency can't just make up regulations Yep. Regulatory process.
Speaker 11:So what we're seeing now is a lot of attempts, and it's gonna all go to court and Yeah. There's gonna be years of court battles of attempts to unwind and deregulate. Mhmm. And as they do that, they're gonna cut people, they're gonna change the rules. That's gonna lead to people people that are regulatory capture people Yeah.
Speaker 11:Saying, hey, wait. Those regulations are awesome. We need them. Yeah. Or we gotta keep them in place.
Speaker 11:And then that's all gonna get adjudicated. And hopefully, that Supreme Court decision is referenced and holds up Mhmm. As this goes forward. So I think deregulation is a big theme. Yeah.
Speaker 11:It's gonna take a while. It's gonna take a while to work through the courts. Yeah. Sort of like all the Doge actions, they're all gonna go to court
Speaker 7:believe that's some that's a
Speaker 3:trend that we can see carry out across admins? You think it's a decade No. Plus long trend? Or is it gonna be sort of oscillating back and forth?
Speaker 11:I think it is the op I think what happens is it's such a sharp tack right now.
Speaker 3:Yeah. Yeah.
Speaker 11:My personal belief is that the response to this is a sharp tack towards more socialism, bigger government, more more kind of principles Mhmm. Of everyone working for and living off the government. Yeah. And I think that that what we're gonna end up seeing in this midterm cycle is candidates and policy proposals that look like they're diametrically opposed because that's how you're gonna get elected because people are gonna be pissed off about how quick these changes were, how quick these actions were, how bad they're going. Mhmm.
Speaker 11:So the storyline will be let's do the opposite.
Speaker 1:Mhmm. Yeah.
Speaker 11:Let's put everyone back in. Let's spend more money. Let's do blah blah blah
Speaker 1:blah blah. Yeah.
Speaker 11:And so I worry lot that this is actually gonna be now a flip flop Totally.
Speaker 3:The other way so people in
Speaker 11:Washington are decide. Yeah.
Speaker 3:Yeah. There's so many people in Washington today that have lost their jobs in the last three months, and I don't think they're going anywhere. Right? They're just sort of like, you know, circling around in in in many ways and and Find that next thing. Wanna find
Speaker 11:Have you seen all the homes all listed on Zillow yeah. It's crazy. There's like Crazy. A million homes. The prices are down like 30%.
Speaker 1:Wow. Yeah. Hey. There's a lot of talk, especially with the MAHA movement of like comparisons to Europe, comparisons to Japan. On the agriculture side, are there any other countries that you look to as examples for what America should be doing?
Speaker 1:Or are we already kind of like the the least bad regulatory regime for agriculture?
Speaker 11:So there there's a couple of aspects to that. Mhmm. One is the ingredient supply chain and food.
Speaker 1:Yep. Yeah.
Speaker 11:Where a lot of stuff is being addressed Mhmm. And talked about and there's issues there. And that's independent, I would say, of agriculture. Mhmm. So there's a lot of technology and innovation happening and needs to happen in agriculture to grow things more efficiently.
Speaker 10:Mhmm.
Speaker 11:That's a lot. That's the work we do. At Ohalo, for example. And we have these incredible tools that didn't exist using AI to make predictions and take actions in the field and so on and so forth. So The US today is the most advanced agriculture technology adopted market, but we're still very far behind its potential.
Speaker 11:And when it comes to food
Speaker 1:supply chain Yeah. Yeah.
Speaker 10:That's that's where things are.
Speaker 11:Okay. Great. I'm gonna go on stage. We'll see you guys.
Speaker 1:Perfect. Cheers. Bye, guys.
Speaker 8:Thanks for
Speaker 1:coming out. Stopping
Speaker 3:by. Enjoy your, enjoy your talk
Speaker 1:now. Is Keith out there? Yeah. Yeah. Jacob can come on.
Speaker 1:We'd love to have you.
Speaker 12:How are you?
Speaker 1:Hey. Good. Jacob, you got five minutes? Have hot minutes?
Speaker 10:Down. We're
Speaker 1:here with the man himself.
Speaker 3:The man himself.
Speaker 1:The man who organized Hillen Valley, and has championed it and grown it by a thousand x, I think. It's, it's been fantastic to watch. Last year I was here, I was able to find a seat. Now, it's standing room only.
Speaker 13:Yeah.
Speaker 1:What what has it been like growing this? What what can you give us kind of the the the the general overview of what the mission and goals are for Hillen Valley?
Speaker 14:So the Hillen Valley was always designed to be a bipartisan, bi coastal alliance between technologists and policymakers Yep. On the basic premise that builders and policymakers are both in the business of building the future. Mhmm. They just use different tools to do Mhmm. Yep.
Speaker 14:Builders use the laws of science and nature, and policy makers use the laws of man. Yeah. And ultimately, it was very clear through conversations with Diane and Christian that there was a huge amount of distrust between Silicon Valley and Capitol Hill. But also there was this cliche that had, taken hold on Capitol Hill that our best and brightest people were focused on advertising Yeah. Technology, not building Yeah.
Speaker 14:Paradigm shifting Yeah. Technologies. And so ultimately it was clear that, you know, from the vantage point of the tech industry, we actually as a country do have a really deep ecosystem of builders working to solve really hard problems. And so we thought it was incredibly important to actually bring them to Washington, give them the attention that they need so that policymakers actually knew this existed, also thought of them as a toolkit to solve some of our hardest national problems.
Speaker 1:That's great.
Speaker 3:How does it feel being here today? I everybody senses that you guys 10 x year over year. Does it does it feel that way? And I and I know there's like significantly more demand. I heard a rumor about the waiting list being, you know, well well beyond probably even like the actual people here.
Speaker 1:Yeah. Yeah. Yeah. Yeah. What is over time?
Speaker 1:Yeah. That's a very It
Speaker 14:it it's really interesting because in a way, I think the success of the Hillen Valley Forum actually reflects a lot of the the Peter Thielisms about, you know, high growth startups Mhmm. Where at first, you know, it's it's an invention that you can't really give a name to because if you're really going from zero to one it's something that by definition doesn't really exist.
Speaker 1:Yep.
Speaker 14:Yep. And then you start out with something that it's a small community that's really hyped up about it. And all of those principles have actually applied to the Home Valley Forum. I mean Yeah. We started out and it was kind of this opaque dinner
Speaker 1:Yeah.
Speaker 14:That was totally behind closed doors Yeah. And we were initially planning four tables of 10 people. Yeah. It ended up being a hundred people and it just the growth has actually been exponential.
Speaker 1:Now you have random livestreamers here.
Speaker 14:And you know you've made it when you draw the pro Hamas crowd.
Speaker 1:Yeah. Yeah. Totally.
Speaker 14:Next year, the goal is Code Pink.
Speaker 1:I'm surprised they got in. It's just remarkable.
Speaker 14:They impersonated press badges.
Speaker 3:Impersonating a journalist. Well, we we impersonate
Speaker 1:Yeah. In in some way. We do our best impression. I know you're waiting for confirmation, so you can't talk about much else. Is there anything else that folks should be aware of or take away from Hill and Valley other than, I I guess, in terms of like what the audience is getting out of this?
Speaker 1:Do you have any advice for founders who are in attendance, anyone who's watching online? What what is the best way to engage?
Speaker 14:I think it's really inspiring to see so many bright, talented people actually make the effort of flying across the country Yeah.
Speaker 3:Yep.
Speaker 14:To come here and show up. Yeah. You know, they say there's the old saying that so much about life is about showing up Yeah. Especially in politics.
Speaker 3:Yeah. Totally.
Speaker 14:Yeah. And the fact that people actually spend the money Yeah. Took the time to come here and engage in these policy conversations really does make an impact. Yeah. And there isn't a single year where we've had the Hill and Valley Forum where there hasn't been legislation that's actually come out as a direct result of people having conversations here.
Speaker 14:So gratifying to see people show up, but it's also really inspiring to see people talking about re industrialization this year.
Speaker 3:Yep.
Speaker 14:This has been the plague of our country is that we de industrialized 20 ago.
Speaker 3:Yep.
Speaker 14:And it's inspiring to see so many bright people working hard to reverse that.
Speaker 1:Yep. Cool. Well, we'll let you get back to it. I'm sure you have a million more panels to host and
Speaker 3:hands on anytime.
Speaker 1:But we'd love to have you back. Thanks for having me. Yeah. Look
Speaker 14:forward to doing this
Speaker 1:again. Fantastic.
Speaker 3:Cheers. Cheers.
Speaker 1:Thanks for doing this. Yeah. You wanna do this now? Zach, can you come in in fifteen? Are are are you good in fifteen from now?
Speaker 1:Okay. Ten minutes. Yeah. Let's do ten with Keith and then Ten with Zach.
Speaker 3:Ten with Keith, and then we'll have you on.
Speaker 1:Is great? Yeah. Keith, come on. Sweet. Welcome.
Speaker 6:Hey. How are you?
Speaker 3:What's going on?
Speaker 13:I love this live studio.
Speaker 1:Yes. Yes. Yes. I We are live, but we're very fortunate to be graced by someone who's not going through confirmation and maybe can give us a little more hot takes, you know?
Speaker 13:Oh, yeah.
Speaker 1:Can First question, do we need a Department of Government Efficiency for confirmation hearings? They're going Absolutely.
Speaker 13:You know, I think this should be simplified at some Yes. Point, which is basically the president should nominate you per the constitution and the senate should provide advice and consent. And we don't need too many other Sure. Steps in the process. But that said, you know, there's lots of room and improvements in the government.
Speaker 13:First, saving money is probably more important.
Speaker 1:Yeah. Yeah. Yeah.
Speaker 13:Making it more attractive for talented people, as we talked about
Speaker 1:Yeah.
Speaker 13:To to serve and Doge is setting a good example for this is being a magnet for talent Yep. For the best people in America, want to improve society through the government Yep. Would be great. Those are much more fundamental. Yep.
Speaker 13:So there's details that can be improved at the margin, but I wouldn't confuse the details with the strategy.
Speaker 1:Yeah. Are you doing more, investing in companies that touch the government now? Because the it it this feels like Hillen Valley is like the floodgates are open. DC is kind of open for business in some ways, willing to do business with startups. We've seen success with the big defense tech companies, but now we're seeing energy and agriculture and a lot of kind of like hard tech companies or hard tech adjacent just
Speaker 3:mean, big issue is this field, you know, being here, nothing about investing in these categories feels contrarian.
Speaker 1:Anymore. No. But it was for a long time. Well, if you
Speaker 13:look at like the hot sectors, AI still is the,
Speaker 12:you know
Speaker 1:There's some AI founders here.
Speaker 13:And defense tech is the second.
Speaker 1:Yes. Yes.
Speaker 13:Yes. And so I think that that is a structural problem. I don't think I agree more with Dalian 's comments about there's not gonna be many successful defense companies. I think the one thing that is a positive change and is structural and, you know, can improve the odds of success for many founders and entrepreneurs is moving into federal revenue Mhmm. Earlier than usual.
Speaker 13:Mhmm. So many companies have historically had a federal revenue arm. They may not talk about it as much
Speaker 1:publicly for
Speaker 13:a variety of reasons, but usually that comes after significant commercial success.
Speaker 1:Yep.
Speaker 13:You might see the sequencing change.
Speaker 1:I mean, the government runs on Microsoft, often.
Speaker 13:Scale AI. For sure. Federal revenue. It has federal revenue. Yeah.
Speaker 13:That's meaning BARDA, significant revenue early in the trajectory.
Speaker 3:Yeah.
Speaker 13:So that may be more normal and more common. Interesting. But I don't think government only revenue
Speaker 1:Yeah.
Speaker 13:Is gonna lead to a lot of successful companies except for very very small sliver.
Speaker 10:Yeah.
Speaker 13:And so we, as a fund, are not really investing very actively Sure. In government oriented solutions. Mhmm. Do have I just did make a defense or a a technology investment, but that's like an outlier.
Speaker 1:Yeah. Yeah.
Speaker 13:But we have lots of lots of companies that have meaningful federal revenue and Yeah. Continue to scale.
Speaker 3:And this feels like a category Last time we had you on the show or maybe it was the first time you talked about how most like a lot of people just shouldn't be like, oh, wanna be a founder, I'm gonna start a company.
Speaker 1:Mhmm.
Speaker 3:They should go work for a great company. And if you're trying to if you're excited about spaces that are gonna require federal funding early, you probably shouldn't start that right, you know, when you're 20 years old maybe unless you're, you know, truly
Speaker 13:Well, you need to understand the sales process in the federal government, which is different than the sales process in a commercial environment. And there's probably a limited scare there's probably more scarcity on quality salespeople that can sell successfully to the federal government. Yeah. Maybe there's 40 of them. And so unless you have an angle Yeah.
Speaker 1:To be
Speaker 13:able to attract one of those 40. So do you have a better product that the salespeople think, oh my god, I can sell this. Yeah. The best way to attract salespeople is make their life easy. I've got something cool, differentiated, and I know the buyer.
Speaker 13:Mhmm. Second, you have a missionary zeal that's off the charts. Yeah. Riz. Without without the ability to attract one of the top 40 people who can sell into, let's say, defense oriented stuff, three letter agency stuff, I think it's really dangerous.
Speaker 13:So I think that's more critical sometimes than the technical breakthrough. Yeah. You know, the government is decades behind as Safrakat was talking about,
Speaker 1:like Yeah.
Speaker 13:You know, Oracle started serving CIA and NSA. There are examples like that, but Yeah. Very few. And so, you know, one every decade. Yeah.
Speaker 13:So that seems to me to be a bad strategy unless you have a reason to believe you're the once every decade company. And that should be part of your initial seed deck.
Speaker 3:Yep. Talk about what you're talking about today. You're you're doing a a talk with Eric Kleinman. Correct?
Speaker 13:Yeah. We just finished. Eric and I were on stage with Senator Ernst from Iowa Yeah. Talking about how we can make the federal government's expenses Yeah. You know, more streamlined using programmatic expense reporting Yeah.
Speaker 13:That ramp offers commercial sector. Commercial products, commercial customers and ramps save between 515% on expenses. And the federal government probably would be able to save more. So there's 4,500,000 cardholders in the federal government. Yeah.
Speaker 13:There's only two point something million employees.
Speaker 6:Wow.
Speaker 13:So there's clearly a lot of waste, fraud, and abuse. Yeah. The senator cited a bunch of examples of 80,000 charges on federal credit cards at casinos. Clearly, most of those 80,000 charges are not doing official business on behalf of the federal government. So hopefully, you know, that's an easy saving.
Speaker 13:Require cutting programs that people care about. It doesn't require this big controversial debate. But every dollar we save goes back to the American family. And they can spend it on raising a family successfully. Secondly, if we can cut 1% from the federal gun budget, just 1%, the Federal Reserve can lower interest rates by 1% safely and allow people to afford mortgages, allow the economy to grow without triggering inflation.
Speaker 13:So it's a very big deal to save one or 2%. Yeah. I think a lot of people miss that.
Speaker 8:Yeah. You have any
Speaker 3:good stories from visits to Washington during the PayPal days? Was it was a different time.
Speaker 13:It was different. I was actually just mentioning, I don't know if I'd been back in the capital before today since 02/2003. Wow. Wow. When I was lobbying
Speaker 3:That means we're officially back.
Speaker 1:Yeah. Yeah. Welcome back.
Speaker 13:But, yeah. Like, we we spend a lot of time and energy. I spend a lot of personal time and
Speaker 1:energy Yeah.
Speaker 13:Using the federal government to help protect PayPal from a lot of people that didn't like us. He's on Yeah.
Speaker 3:Extra Card. Yeah.
Speaker 13:EBay. And then later, the Treasury Department, post 09:11, the Treasury Department wanted to issue these regs that would have imposed significant burdens on consumers and small businesses.
Speaker 8:Mhmm. Yeah.
Speaker 13:And we were able, using a lot of connections on the hill and messaging about not interfering with e commerce Yeah. To put a put a lot of pressure back on the treasury to to draft much more reasonable Yeah. Regulations. They really wanted everybody to put in their social security
Speaker 3:Yeah.
Speaker 13:Number on every like every transaction, which is, crazy.
Speaker 3:Yeah. Intense.
Speaker 1:Last question. Jensen was saying SF is back because of AI. What's your take?
Speaker 13:Well, he stole my line. Yeah. I mentioned that I my my version of the line was slight slightly narrower, but Yeah. Obviously can expand it. Mine was OpenAI saved SF.
Speaker 1:Yep. Yeah.
Speaker 13:Without OpenAI success Yeah. SF would be dead and still dying.
Speaker 1:Yep. You get another power lock company and that drives a ton
Speaker 13:of and you know, the people who are favorable to SF would say, oh, that well, that happens every ten or twenty Yeah. Years. Like, the Internet saved SF too. Yeah. Yeah.
Speaker 13:You know, I graduated Stanford, before the Internet, SF was like a a twelfth to fifteenth ranked city in The United States.
Speaker 1:Wow.
Speaker 13:Nobody there was no business going on. Oakland was actually a better commercial city at
Speaker 1:the time no way.
Speaker 12:The only people
Speaker 13:who stayed in SF to work at like Bain or BCG were like for lifestyle reasons.
Speaker 1:Totally like city. Yeah.
Speaker 13:Yeah. Then the internet revolution happened Sure. And although a lot of the best internet companies, the best technology companies were Palo Alto Yeah. And Mountain View and Sunnyvale. Yeah.
Speaker 13:There was enough spillover and SF to Yeah. Sort of save
Speaker 3:the city. Well, was just cheaper in some ways. Right?
Speaker 13:Yep. No. And well, cheaper and you need large floor plan like Yeah. Yeah. Floor plan off floor floor print offices like and there's there's been exist in the city.
Speaker 13:The city's culture was never really never great for building companies. Like, when we considered moving the PayPal office to SF in 02/2001, Peter asked this question Peter Tail asked this question of name a successful SF company. Mhmm. And the largest SF company at the time was like CNET or something incredibly mediocre. So we didn't.
Speaker 13:We stayed we moved to Mountain View.
Speaker 8:Mhmm. Interesting. Wow.
Speaker 1:Well, thanks so much for joining. It's been fantastic.
Speaker 10:Great day.
Speaker 15:Great to
Speaker 1:see you.
Speaker 3:We'll see you out.
Speaker 1:Enjoy the rest of the conference. Cheers. Ben, do we need to shift Thank you. Do we need to shift the microphone a little bit? Have Zach maybe sit at the end of the table, point towards us?
Speaker 8:Yeah. We're gonna We're
Speaker 3:gonna go. Down. Yeah.
Speaker 1:But come on in. Welcome. Repeat guest. Yeah. We're gonna go right here so that you're kind of aiming at us right here.
Speaker 1:So just kinda sit right here. Thank you. And lean into the mic as much as possible.
Speaker 5:Look at this. Doing your own AV setup. Yeah. Yeah.
Speaker 1:There you Two of the best in the business here. Yeah. But, you know, it helps when everyone's an individual contributor when you're running a startup. Right?
Speaker 5:Totally. I gotta say this getting into this room is the hottest ticket here. The line Oh, yeah. At your door is just Oh,
Speaker 1:fantastic. Impressive person after impressive person. Alright. Were you were were were you an early, like an individual contributor in the early days?
Speaker 5:A team?
Speaker 1:Yeah. Of
Speaker 5:course. Oh, yeah. Of course.
Speaker 1:Yeah. Were don't know who else would do the work. Yeah. Exactly. So
Speaker 3:FinTech, remember, FinTech, like, wasn't always, you know, one of the hottest categories.
Speaker 5:Yeah. Yeah. The first, like, four years of the business were me telling VCs, hey, financial services, we could innovate here. Like, this might be
Speaker 1:a thing. Yeah. Was like, no.
Speaker 5:2016, someone came up with the word fintech and then it finally cut off. And turns
Speaker 3:out Story from Keith, you wouldn't have heard, but he said the last time he was in the Capitol Building was in 02/2003 fighting for PayPal's life. Oh my goodness. Because after 09/11, there was like a lot of regulation being Yeah.
Speaker 1:But speaking of financial regulation, is like everyone here is obviously, you know, super aware of what's going on with the DOD. There's lot of DOD budgets, and every defense tech company is looking for their next program of record, or SBIR. What is the mood in Washington around financial regulations? Are there is there low hanging fruit?
Speaker 3:Yeah. It getting enough sense?
Speaker 1:It meme that everyone talks about? Or are people talking about it enough?
Speaker 5:It's a good question. Right now, there's probably three things that are top of mind for everybody. First is the Genius Act, which is Okay. The crypto stable coin regulation Sure. Sure.
Speaker 5:That is, as far as I can tell, moving Yeah. Though I don't know the the day to day details of that one. Second is there's section ten thirty three of Dodd Frank. This is the open banking regulation that Yeah. Was put into in it's put into place under the last administration.
Speaker 5:This administration we'll we'll see what happens, but Yeah. There's some talk of making a few modifications to
Speaker 1:it Mhmm.
Speaker 5:Before it before it fully goes live. And then the third big thing is the conversation somewhat kicked off by Doge, somewhat not about payments modernization. Mhmm. Yeah. Can we move the the the payment system of The US to not send out paper checks to everybody Yep.
Speaker 5:In all these places with old addresses and so on and so forth Yeah. And actually make it a little more modern.
Speaker 3:You have any type of estimate of of how of how many of those paper checks just never ever even get, you know, have a base basically been paid, but just sort
Speaker 1:of sit in the cash. That's that's money back in the Yeah. Maybe we don't wanna move off paper.
Speaker 3:Yeah. Maybe is Maybe
Speaker 1:this This is free money for the taxpayer.
Speaker 5:Perhaps you gotta keep in mind the cost in the system.
Speaker 1:So Yeah. Of course.
Speaker 5:You have people that are writing the checks to you,
Speaker 1:people that are of It
Speaker 5:probably costs, you know, 5 to $10 to to send out the check to each person.
Speaker 1:Wow. Yeah.
Speaker 5:Then you get it, you bring
Speaker 1:it to the bank. Yeah. It costs the
Speaker 5:bank 5 or $10 to actually cash the check. Yeah. Getting that out of the system would be a net worth Yep. Plus, getting people payments a little faster is not a bad thing.
Speaker 3:Totally. Talk about the difference in your experience, you know, this week versus maybe your first trip to DC for for Plaid.
Speaker 5:For Plaid ever?
Speaker 1:Yeah. Oh my gosh. Yeah. What was your first trip ever?
Speaker 5:I I think it must have been seven years Okay. Since since the first trip here. You know, we were we were lucky. We hired first head of business development had worked in the previous administration. At some point she said, hey, Zach, we we should go to DC and meet some people and talk about it.
Speaker 5:You know, there's there's some things that are relevant to Plaid. We've known that this open banking rule was gonna come eventually and so
Speaker 3:So even seven years ago, you were thinking about this new open banking
Speaker 5:the concept of Platt is always to then to to kinda build open banking for the world, to build infrastructure that enables people to Mhmm. Link their bank accounts really easily. We've of of course created a ton of stuff on top of the network that later. But we knew that this regulation was a a thing that would be written at some point. So we started spending time here.
Speaker 5:We hired a a policy team in DC. I think we probably still have four or five people that are just based in DC full time. Mhmm. And right now, just the conversation is totally different. The the the size of this conference, the number of people that are here, the number of other tech CEOs that I'm seeing in DC, even just casually, they Mhmm.
Speaker 5:I was here about a month ago and was walking into a building and out of the building was was walking a kind of big public company CEO. Yeah. Nice. Yeah. Like, say hello.
Speaker 5:It's like, that that run-in would not have happened seven or eight years Yeah. So it is kind of a testament to in some sense, Silicon Valley for people being willing to come out here and have these conversations. In in a big sense, it's a testament to to to the administration and to a lot of the people that have put together forums like this to bring to bring the two sides together. So it's been an awesome event so far.
Speaker 8:That's awesome. Amazing.
Speaker 1:Well, you gotta get to your next panel, I think?
Speaker 5:I do. Yes. Oh, well,
Speaker 1:it's been great having to stop
Speaker 3:by and stopping on. You. Yeah. We'll we'll see you out on the floor later. See out there.
Speaker 3:Yeah.
Speaker 5:See you soon.
Speaker 1:Let's bring in Zach. You wanna come on? Who else is out there? Welcome to the stream. Let's play this song.
Speaker 1:Let's play let's play a sound effect to let everyone know.
Speaker 15:Sound effect? A song? I think I'm on mass radio.
Speaker 1:Love it. Scoot in as much as possible. We wanna get your mouth Yeah. Right up close to that. Alright.
Speaker 15:You have me
Speaker 1:all the way on it. There we go.
Speaker 15:Thanks for having me, Yeah.
Speaker 1:Can you introduce yourself? Yes.
Speaker 3:By the way, I was gonna say, you look very comfortable in a
Speaker 15:Yeah. Thank you. That's that's a horrible insult. I appreciate it nonetheless.
Speaker 3:I'm not calling you a suit.
Speaker 15:I'm just saying No. I appreciate
Speaker 3:it. Comfortable. Looks like they haven't put it on in a long time.
Speaker 1:That's Will was saying. Will Manitis on on the stream yesterday was saying, you know, it's Hill and Valley when you can't, you don't need to put in new business cards because they're still in there for the last Hill and Valley. That's the standard
Speaker 15:of will say when I first moved to DC, I'm a lobbyist. Short version is I'm a lobbyist. Okay. I was a venture capitalist for a long time, a general catalyst, an emergence capital before that. I work here now.
Speaker 15:I lead the tech and venture capital practice of a lobbying firm. Okay. And I also hang out at a think tank called FAI, the Foundation of
Speaker 14:American Innovation,
Speaker 15:where I'm a senior fellow too.
Speaker 1:That's the short version. Yeah. Yeah.
Speaker 15:The long version, it is a suit. I am a suit.
Speaker 1:You wear a suit.
Speaker 15:I wear a suit now all the time. I have ties.
Speaker 16:You're still a technology brother.
Speaker 15:I am at my heart a technology brother. This feels like a
Speaker 1:safe space for
Speaker 15:suits, to be honest. This feels like Yeah. You guys rock a
Speaker 1:good suit. We wear suits every day.
Speaker 15:You guys brought back suits, actually.
Speaker 1:On the lobbying front Yeah. You know, Lulu's talked about going direct in the world. Yep. Going to an event like Hillen Valley feels like Yeah. Going direct for lobbying.
Speaker 15:I agree. Fully.
Speaker 1:Talk about the the compliments or substitutes of founder led lobbying, essentially.
Speaker 15:Well, the best founders are the ones who are building the relationships themselves.
Speaker 1:Sure.
Speaker 17:I mean,
Speaker 15:the truth is, by the way, I'm I guess I'm talking myself out of a job in some
Speaker 1:ways. Yeah.
Speaker 17:Yeah. But the
Speaker 15:truth is you outsource if you are building in a space
Speaker 1:Yep.
Speaker 15:That is key to regulatory work Yep. And you outsource your regulatory relationships, your government relationships to somebody else Yep. You're not doing your job. I mean, think about it this way. Complimentary.
Speaker 15:If you're raising money, you wouldn't hire a banker if you're Totally. If you're good, frankly. Yeah. You wouldn't hire a banker to go out and organize your fundraise for you. Right?
Speaker 15:Yeah. But if you come to DC and your attitude is great, I'll have my lobbyists do everything. I don't need to go meet these people.
Speaker 8:Yeah.
Speaker 15:That's a problem. And in fact, the biggest people do you guys have Blake on the show from Boom? Has he been on?
Speaker 3:Not yet. Okay. Not yet.
Speaker 1:He's One of
Speaker 3:these days though.
Speaker 15:Yeah. Yeah. He's somewhere somewhere back there, but Blake's done a great job of this. Right? He came in here
Speaker 3:Yeah.
Speaker 15:Five, seven years ago, the idea of supersonic flight Yeah. Was totally outside of the Overton window. Yeah. But he's done such a good job getting into the DC establishment, and I actually say that as a compliment,
Speaker 3:not insult.
Speaker 16:So to put this all terms,
Speaker 3:job of a lobbyist is to make great intros
Speaker 2:Yes.
Speaker 11:Much like
Speaker 3:a VC does and then channel.
Speaker 15:That's exactly right. It's like a part shrink, part Ari Emanuel. Right? You sort of do the, like, you're a little bit of an agent selling somebody downstream. Yeah.
Speaker 15:You're a little bit of a shrink because they complain bitterly about government. They have every reason to do so. So you hear all that out too.
Speaker 3:Yeah. Yeah.
Speaker 15:And then your job is to help actually, in some ways, I think about it as you are teaching people in government
Speaker 1:Mhmm.
Speaker 15:Who don't know about what you do. An educator to them. Yeah. Yeah. Because it's not that they don't care or they don't have any whatever.
Speaker 15:It's you're just not high enough in the priority stack Totally.
Speaker 18:And they
Speaker 15:don't have the background to understand it.
Speaker 1:Yeah. Mean, I I I met a congressman a couple years ago who was like, thanks for telling me about Android.
Speaker 15:Yeah. Yeah. Exactly.
Speaker 1:How do not know about that company? But it's
Speaker 3:like Yeah. Do you feel is is the average is part of the, the best lobbyists are are selective on on who they work with
Speaker 15:Usually.
Speaker 3:You're not gonna be successful if you're Yeah. Yeah. If it's not a solid underlying sort of company. How much are politicians reading into who a company is working with
Speaker 15:Yeah.
Speaker 3:On the lobbying front in terms of understanding the quality of the underlying sort of like, you know, potential?
Speaker 15:It's a really good question. The best lobbyists are tremendously demand constrained. Right? Yeah. So so you're or sorry.
Speaker 15:Supply constrained. Yeah. By which I mean like an infinite amount of people more who wanna work with those lobbyists than they have room to work with. Yeah. The compliment that I love to get is when somebody says to us, hey, you don't feel like other lobbyists because when you
Speaker 13:actually Yeah.
Speaker 15:You come in and you bring the client with you, we actually have a real relationship with them at the end of the day. It's not just, oh, I've come in and I've done my briefing book and I've Yeah. Yeah. Given you your one pager and so on and so forth. So there is a step up from a tour.
Speaker 15:You're totally correct. Yeah. And because the lobbyists who are smart, proactively think about organizing the opportunity, right? Like, I dinner with two members Yeah. They can't be there like, great.
Speaker 15:I would love to meet folks in the valley. I don't know anybody in tech. Yeah.
Speaker 1:Is there a is there a holy trinity of lobbying firms? You know, we we talk about McKinsey, Bain, Yeah. We talk about Goldman, Morgan Stanley. We talk about That's really
Speaker 15:good question.
Speaker 1:Sequoia, Andreessen, Founders Fund.
Speaker 15:It's not only a Trinity, it's more of a single firm and it's mine. Yeah. Yeah. There's not really much of a long tail.
Speaker 1:You have a coupon code we can share? Yeah. You can send to Yeah. Exactly. We want our cut.
Speaker 1:Gives 10% of the ongoing of ongoing I mean, Athletic Greens does that all day long.
Speaker 15:Athletic Greens does that? What's the average order size of Athletic Greens? Because I
Speaker 1:bet you it's a little lower than a lobbying No.
Speaker 12:But that's the that's the
Speaker 1:beauty of the Athletic Greens deal. You use the coupon code and you get paid every month.
Speaker 15:That's a nice plug, by the way. That was very well done. Yeah. Very, very
Speaker 3:Do you guys have specific sectors that you're you're most oriented around or or things that you avoid?
Speaker 15:We we do a lot of tech and science. So as a firm, we do a lot of tech and science. I lead the tech component of
Speaker 1:what we do.
Speaker 15:We avoid things that don't feel values aligned. So Yeah. There are some folks in the world who are doing interesting work, compelling Gambling, yes. Sin, vice are probably outside of the scope for us a little bit. Anything with a foreign government is outside of the scope for us a little bit.
Speaker 15:When it comes to things that are around American dominance, around American dynamism, around global resilience when America comes first, that's the sort of stuff we focus on. Mhmm. But lobbying is pretty fragmented. The truth is it's not a great comp for the Bain, McKinsey, BCG Yeah. Because there's a huge like anybody, any schmo who has one rich friend can say, I'm a lobbyist now.
Speaker 15:Right? Because they can get one contract Yep. And put up a shingle and say, okay, great. I'm gonna service as one person. Yep.
Speaker 15:It's hard to have, great, 50, a 200 clients and do that at a really high caliber.
Speaker 3:How damaging can the wrong lobbyists be? I imagine it can kill your company. Right?
Speaker 15:Yeah. Well, they're they're your representative. Like, you shouldn't work with somebody Mhmm. If you don't feel comfortable with them telling your story when you're not around.
Speaker 1:Yeah.
Speaker 17:Because part of
Speaker 2:the gig is
Speaker 17:Makes sense.
Speaker 15:When you guys go back to SF or you go back to LA
Speaker 1:They're the ones that are
Speaker 15:I'm still out there. Correct. Talking you up all over town.
Speaker 1:That's right.
Speaker 3:That's right. We're in the market.
Speaker 1:So Yeah. Yeah. Yeah.
Speaker 15:Give me a call, guys.
Speaker 1:We're trying to we're trying to put really, really harsh bans ideally, but tariffs on foreign podcasts.
Speaker 15:Yeah. I think that's great.
Speaker 1:That's great. We want significant subsidies for American Made podcasts. That's right.
Speaker 15:You guys should be getting a tax break. That's the real issue. Should
Speaker 1:have a
Speaker 3:tax We actually want it to cost a dollars a year
Speaker 12:to host a podcast. Yes. Yes. To entry. Right.
Speaker 12:It's very dangerous.
Speaker 18:There's
Speaker 15:a lot You guys are familiar with the taxi medallion system? Exactly. Similar idea for podcasts. Podcast safety.
Speaker 1:Let's play them off with the with the sound.
Speaker 12:Thanks for
Speaker 15:having me, boys. I appreciate
Speaker 1:Thank you for coming on the show. Thank you
Speaker 15:for having me.
Speaker 3:This has been great. Hey. Have fun out Would
Speaker 1:you mind grabbing Mike Salana? Think he's right out there if he's if he can.
Speaker 3:Great having you on, Zach.
Speaker 1:The soundboard is a work in production. We are actively looping the short, but hopefully no. No. No. Mike Salana's coming into the stream.
Speaker 1:Welcome to studio, the Temple of Technology. What's up, guys? We got this. We got the sound effects. Where
Speaker 19:do I look We
Speaker 1:are live.
Speaker 3:Oh, we're live.
Speaker 1:We are live. I'm watching my hair.
Speaker 17:What's up, guys?
Speaker 1:Thank you so much for coming on the show. Great to great to have you on. What's been your reaction? What what and and also, I'd love to know, like, I know you're writing a piece. I'm sure it's churning in your head, but, like, what is the what is the angle?
Speaker 1:What is the interesting thread to pull on here? I mean, I don't
Speaker 17:know if I'm supposed to say this.
Speaker 1:Okay. Yeah.
Speaker 17:The thing that I thought was the funniest was getting out of Union Station. The first thing I see are a bunch of sort of failed bureaucrats in shirts that say federal workers matter.
Speaker 1:Oh, no.
Speaker 17:It's just the overall circus vibe of DC, I think, is funny. Yeah. And then I'm paging through the Washington Post this morning. It's just like horrifying headline after horrifying headline in DC. They're talking about DC.
Speaker 1:They're like Yeah.
Speaker 17:Yeah. People things are tense. People are losing their minds. Yeah. No one is at ease.
Speaker 17:Yeah. And it's just like I'm in this beautiful hotel overlooking the White House, and there are all these people going to work. There drinking coffee. Yeah. People are happy.
Speaker 17:I don't know what they're Totally.
Speaker 20:Yeah. I don't like,
Speaker 17:what you're reading is not what I'm experiencing in DC. Every time I'm here, I'm just like
Speaker 2:I mean could I actually move home?
Speaker 3:Well well, it's a momentum thing. The people at this event feel like they have real momentum Mhmm. Opportunity right now. And then if you just lost the job you had for twenty years Yeah. Then obviously they're not they're feeling, know, they're not accelerating.
Speaker 3:Right?
Speaker 17:I don't know. But I was I don't I hate to be Tom Freeman about it, but I was in a car today, and the driver was like, things change here. These people have to we're looking at these protesters Yeah. From outside, and he's like, they gotta get over it.
Speaker 1:Yeah. They gotta get over That's
Speaker 2:what DC is.
Speaker 1:I mean, we're reflecting on this with the tariffs. Like, there's all these crazy headlines about like the global economy is destroyed, and yet like the stock market's kind of flat this year. You know? It's not really like We'll We'll see. We'll see what happens with the
Speaker 17:earnings tonight. Predicting a recession, 70% chance.
Speaker 1:Yeah. But even then, a couple years ago, it was very mild. Like, we seem to be better than ever at just maintaining the status quo. Like, America is somewhat Lindy in this case.
Speaker 17:Yeah. Lindy. You just gotta decide what you wanna do and work on that. And you can't Truly, the reason I brought up the noise was because, also with those federal workers, they were just standing there.
Speaker 1:Yeah. Yeah.
Speaker 17:Yeah. But then Jack Posobich gets out there
Speaker 1:Oh, yeah.
Speaker 17:And starts a fight with them. And everyone's like, DC's in chaos. And I saw it.
Speaker 1:It's not
Speaker 17:that bad.
Speaker 21:It's like No.
Speaker 1:No. It's a lot of theater.
Speaker 17:Everything's fine.
Speaker 3:Yeah.
Speaker 17:You ought to just ignore the noise and focus on your own shit. Yeah. And that's what I'm trying to do. Yeah. It just so happens that the shit that I
Speaker 3:focus on is noise. Yeah. The noise
Speaker 2:That's my art.
Speaker 3:It's running at the noise.
Speaker 1:The noise is my signal.
Speaker 17:The noise is my muse.
Speaker 1:That's hilarious. Is there a good metaphor for DC? Is it like, you know, lunchroom tables in middle school or something? Like, I feel like it's very clicky, maybe even clickier than San than San Francisco Tech. I don't know.
Speaker 1:I'm trying to understand what's the mindset of
Speaker 17:I think it's a little more sociopathic than that. I think it's sort of like, all the people care about here is power Yeah. And they're willing to happily
Speaker 1:Do it get over
Speaker 17:to the other table if they're empowered, generally speaking. Yeah. And then you have you have the exceptions, but Yep. Mostly Yeah. The the the industry town and
Speaker 1:the This is why I felt like kind of out of my element in DC because in tech, there's still a lot of like power games. There's a lot of status games, and you can be like a famous founder. But at the same time, there is the concept of locking in and actually going and building something. Yeah. But in DC, there's nothing really to build.
Speaker 1:No. Like, there's no like, oh, yeah, this person was heads down for six years and then produced like a beautiful piece of legislation. Like, that's not how it works.
Speaker 3:No. Whereas like, stuff happen, and sometimes that means a lot of dinners.
Speaker 1:Exactly. Yeah. Anyway, can you talk about kind of your I mean, obviously, you've been in Silicon Valley forever. How has just the mood around Silicon Valley and Washington changed over your career? What was it like when you first got to Silicon Valley, and how has it changed?
Speaker 1:Like
Speaker 3:Yeah. Maybe talk about your first trip to DC too.
Speaker 1:Yeah. That'd be interesting to hear.
Speaker 4:Ever?
Speaker 1:Yeah. Or or in the context work and tech?
Speaker 17:Well, fir my first work trip to DC would have been, I wasn't in DC ever. We didn't do things here.
Speaker 1:Right? Yeah.
Speaker 17:The first time I came out was for Pirate Wires.
Speaker 1:Oh, no way.
Speaker 17:Because I was invited out Cool. By a congressman, and then I realized that or maybe it was Comfortably Smug. That might have been first time I
Speaker 1:came
Speaker 17:Sure.
Speaker 1:Sure. Effectively a congressman.
Speaker 17:Then I realized there were all these people here who were reading Pirate Wires Yeah. Because they were interested in tech. Totally. They were interested in like the sort of tech Yeah. Center right maybe perspective Sure.
Speaker 17:Or let's say heterodox perspective Yeah. Within tech. Totally. It's very different than what it was, what, fourteen years ago. No one thought about government at all.
Speaker 17:In fact, it was considered like, I I don't know, a red flag if you cared about government. Sure. Yeah. Then Or
Speaker 1:like a distraction.
Speaker 17:The businesses changed and now, you know, the most exciting businesses, a lot of them are working with the government. Yeah. And you have to understand how it works.
Speaker 1:Yeah.
Speaker 17:And so there's a lot of excitement here, and also in Silicon Valley.
Speaker 1:Yeah. I always think that that's like an underrated thing. I mean, lot of people in in tech kind of criticize media, tech media when they start talking about politics or whatever. But I think that's like incredibly valuable because it's very hard for DC to get the tech perspective if they're If it's not from us, it's from, you know In somebody else. Yeah.
Speaker 1:Care especially, right? Are you Do you have that in the back of your mind when you're writing in terms of like the avatars that you're writing for, the messages that you want to send? Or is it just like, you're just gonna write and they're gonna read? I
Speaker 17:just get on the page and Yeah.
Speaker 1:Just let it rip?
Speaker 17:Like, spit out Yep. What I'm thinking.
Speaker 1:That's great.
Speaker 17:And and I hope it resonates.
Speaker 1:Yeah. Yeah.
Speaker 3:It does.
Speaker 1:It certainly has Yeah. Yeah. So so I mean, coming out of this, are there are are you trying to interview the politicians perspective and kind of bring that back to Silicon Valley?
Speaker 12:Because
Speaker 17:Well, I'm here with one of my colleagues Blair? Dodge.
Speaker 1:Blake.
Speaker 3:Blake.
Speaker 1:Yeah.
Speaker 3:Who's a new writer at
Speaker 17:So she's doing a bunch of interviews right now and kind of sleuthing around, she said. We
Speaker 1:love sleuthing.
Speaker 17:For our takedown. Of takedown.
Speaker 3:Dead piece incoming. Yeah.
Speaker 17:No. So she's just she's exploring now and
Speaker 9:That's great.
Speaker 17:We'll probably, you know, collaborate on something.
Speaker 15:But Cool.
Speaker 3:Cool. The interesting thing is it it does feel like this is my experience, but it does feel like it's hill and valley, but there's not a ton not as much overlap maybe as you would you would like. Right? There's like a lot of people from the valley Yeah. A lot of people from the hill Yeah.
Speaker 3:And like technically we're in the same space, but like it's like tech people.
Speaker 17:I mean, just don't think they know how So I got here and I was like, oh, no. I I cannot be back. So I head back. But I that's a cultural Yeah. Vibe.
Speaker 17:Yeah. You know, I've never had to wear a
Speaker 1:suit Yeah. In
Speaker 17:in San Francisco. I didn't even own a suit until Yeah. Years ago. Yeah. Or I think I'd won for our LP meeting.
Speaker 17:But look, that that it's it. That's it.
Speaker 1:So And today you're wearing Fiorentino label? That
Speaker 17:correct? Fiorentino.
Speaker 1:Oh. We go. Yeah. Friend of the show.
Speaker 3:Looking shot.
Speaker 1:We love him. Yeah. We love him.
Speaker 17:A true craftsman.
Speaker 1:He is.
Speaker 3:He is.
Speaker 1:Were you
Speaker 3:surprised at how much press was allowed to to come today?
Speaker 1:Oh, yeah. We went to the press briefing yesterday. Saw your name tag there. Too big. Yeah.
Speaker 1:We were sitting there looking around. Were like, we are the fish out of water here. Yeah.
Speaker 17:I was sweating. I don't think so. I think that journalists are looking for things to write about. Totally. There are a lot of people here that No.
Speaker 3:Would want to write about. Yeah. My question was more like, obviously, they would like to be here, just because, like, there's so many ways that you could spin what's going on. Sure. I was just surprised that Delian
Speaker 1:That they got
Speaker 12:the yes.
Speaker 1:They got the in there. Instead of saying, hey, no.
Speaker 17:Yeah. I think that broadly, tech's relationship with the media is very different than it was Yeah. Five years ago. The war is over. And there are actually plenty of writers who are not unfair.
Speaker 17:Yeah. Yeah. Even in the York Teddy Schleifer writers out there like Nice. That's a guy who's just reporting on wealth. And he reports what he sees in Yeah.
Speaker 17:Both directions. And I think that there are people who have integrity now. Yeah. It's And I think it's just the the environment's different.
Speaker 3:And Yeah.
Speaker 22:You're gonna there
Speaker 17:are gonna be hit pieces, but you have to just read people's work and see who they are and what and and what kind of, you know, interview they run and then make a
Speaker 1:Yeah.
Speaker 17:Make an educated
Speaker 1:Yeah. Guess. Every once in a while, Teddy shows up with the with the telephoto lens and goes TMZ mode outside of a party. But, you know, for most of the time, he's just writing, you know, good write ups. It's
Speaker 12:good. Are
Speaker 3:you obviously, it it you know, manufacturing, defense tech are sort of like dominating the narrative here. Is there anybody that that is kind of flying under the radar that you're or or any like industries specifically that you're that
Speaker 23:you're seeing?
Speaker 1:I feel like you've written a lot about like the sperm racing stuff and some of the the like the zaner stuff
Speaker 17:sperm race representation. Yeah. Yeah. Furiating. Yeah.
Speaker 1:Exactly. Yeah. We maybe we need a subsidy or do we need a tax on foreign?
Speaker 17:No. I think I was having a conversation yesterday and what's actually interesting is they've really expanded beyond tech. Yeah. Or defense tech. It's With energy There's much broader Yeah.
Speaker 17:And there's a much broader interest in the technology industry now, which is pretty cool. People are open. Who was it? Oh, it was Deleon. He was talking to me about how senators and congressmen were just really excited to even talk, you know, to ramp or something.
Speaker 17:Yep. Which a few years ago was just not on their radar.
Speaker 1:Totally. Yeah.
Speaker 3:Keith was saying there's about four times more federal corporate cards than there are federal employees.
Speaker 8:Well, that's just And and there was
Speaker 3:eighty eighty thousand charges at casinos Wow. Like last year or something like that.
Speaker 1:I mean, gambling is the most American thing
Speaker 17:in the world. Federal workers. Matters.
Speaker 1:Yes. Yes.
Speaker 3:Federal workers.
Speaker 1:Even if they're gambling.
Speaker 3:It could have been team building activities.
Speaker 1:Yeah. Yeah. Yeah. Team building, you take them to the gam you take them to
Speaker 3:the Yeah. Slots.
Speaker 1:Anyway. Slots.
Speaker 3:Yeah. What's the difference?
Speaker 1:So so so so what's next coming out of here? How do you think about covering this from both the Pirate Wires perspective? Is it is it just meeting people doing interviews downstream? Or is there supposed to be like a definitive write up or new angle? You're you're just you're still on the hunt.
Speaker 1:Right?
Speaker 17:I think we're still looking. Okay. I think probably a lot of people are gonna do the just here's what I saw.
Speaker 21:Here's the
Speaker 17:hill and valley. Yeah. Maybe what would be more interesting is to find some sort of meaningful interaction between someone in tech and someone in DC.
Speaker 1:I can There there's all these, like, big budgets and you see a hundred and 50,000,000,000 in defense, but then you get down into, like, okay, what is the actual mechanic of a seed stage or series a founder, like, actually getting a $10,000,000 contract? That was
Speaker 3:really was talking about this too. Every hill and valley so far, there's been some policy or like some major sort of business activity that's come out of it. It's clearly working. The question is like, if we've 10 x the size of Hill and Valley, are you gonna get 10 x In order to 10 x the output. Right?
Speaker 1:Yeah. Yeah. Probably. I mean, last year's theme Yeah. Yeah.
Speaker 1:Yeah. Last year's theme was TikTok. Have you been tracking that? Do you have a do you have a TikTok taker? Have you evolved at all since last year?
Speaker 17:Shut it down.
Speaker 1:Shut it down.
Speaker 17:Is how is my
Speaker 1:Shut it down. Don't don't even sell it?
Speaker 17:Shut it down.
Speaker 10:Just I
Speaker 17:don't even believe that you can sell it and have it still not be back doored in some way that
Speaker 3:I
Speaker 17:don't But I also just think that we're in Trump era now, and Anything like nothing matters.
Speaker 1:Yeah.
Speaker 17:And the rules change Yeah. Every day. So it's like, why am I gonna sit here and be like, the right policy for TikTok is because
Speaker 20:we don't we're not playing those rules anymore.
Speaker 17:No. It's a new set of rules. The rules are it's like a bun it's like Trump says some shit and writes executive orders, and then a bunch of wizards in coats in DC fight back with like their random pen shit. Yeah. It's like everyone is searching back to pass court cases Yeah.
Speaker 17:For, I guess, justification for what they're doing and it all is just to me quite chaotic, but also I don't care. I I My intention for this administration was to be calm while others were crazy.
Speaker 1:Okay.
Speaker 17:I am trying my Terrorian. To maintain the calmness through the storm.
Speaker 1:Yeah. It is a great time to be in media. Does it feel like it's the best time possible to be in, like, tech media? Or is it like the the war is over where the dog that caught the car? Yeah.
Speaker 17:It depends on what kind of press you're doing. Think Yeah. Right now what's happening in the tech press is people are trying to figure out who they are in the context of a very different culture. Totally. And how they're supposed to navigate that.
Speaker 17:You see this sort of center left, like Atlantic type people Yep. Who have pivoted wildly to just anti anti Trump stuff. Yeah. But more so than I would say your standard issue left is. Yeah.
Speaker 17:Like, I think there's like this strange thing that's happening where people are just trying to find a lane.
Speaker 1:Yeah. Yeah.
Speaker 17:Yeah. And I'm trying to be I just wanna take my time and Yeah. Write the stories that matter to me.
Speaker 1:There's also that interesting development with the Ezra Klein abundance thing. That feels like very near, but you're rolling your eyes. I roll. What's your abundance take?
Speaker 17:Because they just ripped it off of, like, your standard issue tech bro from five years Right? Or Yeah. Like, EAC, or what about Anatomy of Next? Like, I talked about all
Speaker 1:of these. Yeah. You did.
Speaker 17:All of them.
Speaker 1:All those anecdotes.
Speaker 17:In fact, Derek, the author the co author of that book
Speaker 1:Yeah.
Speaker 17:I saw at Founders Fund for a Charter Cities
Speaker 1:Oh, really?
Speaker 17:Charter Cities conference years ago.
Speaker 21:Many years ago.
Speaker 1:Took the notes. Which we hosted.
Speaker 3:But I would describe that as finesse. It's like, we took your best ideas rebranded them, and now we're selling it ourselves. Yeah. I mean
Speaker 1:Yeah. You you you just say it's such a
Speaker 17:They haven't They definitely successfully created something that they're now selling. The question is whether or not the conclusion is the right their their whole thing is like, we've taken all of these ideas and we blame the fact that we don't have them on the people who created those ideas.
Speaker 1:Yeah. Yeah.
Speaker 17:And I think the reason that we don't have, for example, you know, housing in California is it's just the people who are in charge of the government
Speaker 3:in California.
Speaker 1:Yeah. Yeah.
Speaker 17:It's very simple.
Speaker 1:Yeah. We do
Speaker 3:At what at what point do you expect tech's sort of, you know, basically attention to shift more towards California, given it that it's the home of our industry? We've seen
Speaker 17:I think in the Gary the Gary
Speaker 1:go so bad.
Speaker 3:Yeah. Yeah. Yeah. The Gary the Gary Tans of the world, obviously, kind of were were were took a big stand now probably Yeah. A couple years ago.
Speaker 1:Yeah.
Speaker 3:Yep. I would argue that he's suffered in some ways because of that, just given how much negative attention he's drawn locally. But at some point, tech tech seems so focused on Washington Mhmm. That at some point, you're just gonna look around your backyard and be like, actually, we have some pretty big problems here.
Speaker 2:Well, I guess
Speaker 17:I think a lot of people are I think more peep I just read slightly. I I think more people are focused on local politics in San Francisco within our industry than different
Speaker 3:than, like, broadly in California, though. Because, like, we're in California, and Right. I would say most of the people in the Gundo, again, have much more part partly is the nature of
Speaker 17:the industry LA is a lost cause. I think it's just like, you're never gonna save Los Angeles.
Speaker 1:We are saving Hollywood. We're bringing media to Hollywood.
Speaker 3:We're bringing media to the Hollywood. That's our big push.
Speaker 17:I I think that your best bet is San Francisco. I really think that's tactically the closest. That's the best chance you have at fixing anything. And if you could save even one city, maybe you could do something else.
Speaker 1:Yeah.
Speaker 2:And I
Speaker 17:think that Gary actually has made a lot of progress. And I don't think it's hurt his brand. I think that Mhmm. It's it's he's he's asking for his help online
Speaker 1:when he Totally.
Speaker 3:Wasn't saying it's hurt his brand. Was just saying like acceleration of like death threats and like people saying that Yeah.
Speaker 17:Just stuff like that. That's the price to play, unfortunately.
Speaker 1:Yeah. It it's kind of like raised the standard deviation of his experience. Yeah. He's had some really great experiences, and then some really negative ones, as opposed to just the anonymous VC who flies on the radar,
Speaker 9:doesn't Did you have a Tag
Speaker 3:Switching gears a little bit. Did you have a reaction to Benchmark investing in Chinese AI? Did that feel that that was very contrarian in in some ways, but I was trying to I I was personally trying to understand the decision of, like, okay, Hill and Valley's happening next week. We should invest We're company while TikTok is, like, probably should be banned, maybe it's getting banned, maybe selling, you know.
Speaker 17:I mean, if their job is just to make money, and they think that's gonna make money, it's There's like a There's a moral question about it, but then are we gonna break down every single investment that everybody I mean, what is I don't know. This is a much longer conversation.
Speaker 1:Sure.
Speaker 17:Yeah. I I guess I didn't feel the way that other people felt.
Speaker 24:Mhmm. I don't
Speaker 17:Yeah. I have a much bigger problem with what they did to Travis Kalanick Sure. Than I do with their investment in a Chinese yeah.
Speaker 3:Are you are you digging in at all this idea that It feels like there's a divide right now. It's like if you're a foundation model company, you wanna tell people that we're in an AI war, an AI race Mhmm. Like we have to win the race. And that that's a a good narrative if you're needing to raise a lot of capital and sort of solidify significance. The other side, and this is a real side, and this is actually Girly's position, which is that we're not in you know, the idea that you can win the AI war or race in this technology is not just gonna disseminate anyways
Speaker 17:is Right.
Speaker 3:And he he believes it's flawed. In in conversations that you've had this week, do you feel like, you know, just sort of everybody sort of understands we are in an AI race, we need to win it? Or do you what what and and kind of maybe what side are are you on?
Speaker 17:I don't think anybody knows anything. Think AI is so, like, they were we're waiting for a paradigm shift, and we're trying to also make really firm predictions about what happens after the paradigm shift.
Speaker 1:Yeah. Yeah.
Speaker 17:And so, I I think that all I kinda know is that it's obviously really powerful. It's obviously improving really fast. Yeah. But if something is, you know, fundamentally changing society, then it's anyone's guess. I don't think that we know if it's centralizing.
Speaker 17:I don't think we know if it's gonna be decentralized. Mhmm. I don't think we know if it's a race. I I I actually just Yeah. I don't think we know.
Speaker 17:I think all that anybody knows is that it's powerful and everything else is just people I don't know. I saw Tyler Cowen announce that we had reached AGI the other day, and I felt like, you're just saying shit. Like, don't You don't Do you even believe that? Like, I don't think he believes that. Like, I I I think that I think that people are just I think that Yeah.
Speaker 17:I think that a lot of people are just saying shit. That's kind of how
Speaker 1:I feel about the Trump
Speaker 3:administration. Did you think there was an overreaction then over the weekend when when when four o rolled out and it was just saying like, Solana, like, might be the GOAT? Like, a lot of, you know, like You're one
Speaker 17:of the greatest you ever heard
Speaker 1:about this?
Speaker 3:Blaze Gate.
Speaker 1:No. So so the latest ChatGPT four o release, they they fine tuned it. Basically, any question you ask would be like, that is so brilliant. This is best. Know what?
Speaker 1:You're one of
Speaker 17:the best writers who's called us.
Speaker 1:I am. I am one
Speaker 17:of those. I was like, these just actually
Speaker 1:I love who's acting. Reading
Speaker 17:your landscape. Like, I think felt different. A plus.
Speaker 1:Yeah. Keep it up.
Speaker 15:I love it.
Speaker 1:Well, then, yeah, you gotta
Speaker 3:call potentially for Pirate Wires around that. That was the first time I felt like a model could be dangerous, where if somebody is having, you know, significant Delusions of grandeur. Delusions of grandeur mental health issues. They think they're God. They think they're on some
Speaker 1:It confirms all of that. And says, yeah, you should go and try And
Speaker 3:you're like, you know, if I went to you and I was like, Mike, you know, confidentially, like, think that I'm God. Right. And, you know, I'm on this thing. You might be like, hey, Geordie, like, let let's talk about it a bit more.
Speaker 1:Let's dial this why, like,
Speaker 3:that's not quite right.
Speaker 15:That's not
Speaker 1:what I would do. That's not
Speaker 3:what I
Speaker 17:would ramp
Speaker 1:it up. If somebody
Speaker 17:shows up and is like like some old kind of guy and he looks at me and he says, I'm you from the future.
Speaker 1:Yeah.
Speaker 17:I'm leaning in. Yeah. I'm like, alright.
Speaker 1:Like, I'm listening. Like, prove it.
Speaker 17:Prove it. I'm here. I want the give me the evidence.
Speaker 1:Yeah. If you
Speaker 17:said you were God, I'd be like, alright, like do some God shit.
Speaker 1:Okay. We'll That's amazing. That's my Alright. Well, you so much. Need to
Speaker 3:do some reinforcement learning AI.
Speaker 1:Yeah. This is amazing.
Speaker 3:Dial it in.
Speaker 1:Thank you so much for coming on the Thanks for having
Speaker 3:me. Yeah.
Speaker 1:Was great. We'd to have you back.
Speaker 3:Good looking sharp. Dude, Glad you got
Speaker 1:your suit back. More news and stuff. I'll see you
Speaker 6:guys later.
Speaker 1:Have a great rest
Speaker 3:your Have fun.
Speaker 1:We'll talk soon. I I I texted Sean Maguire, told him we are ready. Nice. Hopefully, he can swing by. In the meantime, why don't I give you a little we we should just literally read some, hey.
Speaker 1:How you doing?
Speaker 2:How are you?
Speaker 1:What's up?
Speaker 21:Guys on air.
Speaker 1:We are on air. We are on air. Enjoying?
Speaker 13:Feel free
Speaker 1:to introduce yourself. Yeah. Sit down. Tell us about yourself. Margin.
Speaker 3:What's Tell
Speaker 1:everyone what who you are. What'd you do?
Speaker 21:Michael Eisenberg, general partner at all of Tel Aviv, before that at Benchmark.
Speaker 1:Fantastic.
Speaker 21:Cool. Yeah. And an original member of the Silen Valley Forum. Really? Yeah.
Speaker 21:Yeah. Four years ago. It was just a dinner in the Library Of Congress Rotunda.
Speaker 1:Yeah. So yeah. Was it bet
Speaker 3:was the dinner, you know, more intimate? Was it more, you know, what what what was your read on it then? What's your read on it now?
Speaker 21:This is overwhelming.
Speaker 1:Yeah. Yeah. It's big.
Speaker 21:You know, for a guy like me, it's like super overwhelming. Yeah. You know, I'm to be on the other side of the microphone. I'm on podcast Sure. And most of my interview other people.
Speaker 21:This is kind
Speaker 1:of funny. Yeah.
Speaker 3:It's fun. It's fun. Yeah. Well, yeah. What what are what what are you trying to get out of the event?
Speaker 1:Are you specifically looking for founders that you could potentially invest in here?
Speaker 21:I'm not. Okay. So we invest only in Israel.
Speaker 1:Okay.
Speaker 21:But come to Hillen Valley. Why? Mhmm. Because politics and intersection of geopolitics and technology is perhaps the most important issue of our time.
Speaker 1:Got it.
Speaker 21:Yeah. And where there's enormous opportunity. Yeah. Yeah. Maybe a little cap by the size of in general the defense establishment.
Speaker 21:Yeah. The M and A side won't be as big as Google, Cisco, Microsoft.
Speaker 1:Sure. Yeah. So is that an angle here where you kind of act as like a part of your value add as a venture capitalist is a de facto lobbyist for the until they can afford a lobbyist where
Speaker 21:Not a lobbyist.
Speaker 6:I I
Speaker 21:I But but you can
Speaker 1:make I can make This is a relationship with Yeah.
Speaker 21:Exactly. The first Hill and Valley, you know. Yeah. Senator Cotton was here. JD Vansen, now the vice president of The United States was here.
Speaker 1:I remember. Remember last year. Was here. Yeah. You know, this is where people are.
Speaker 1:Josh Wolf is is here. In a minute. You should
Speaker 21:have Josh Wolf on.
Speaker 1:He's coming on in twenty minutes.
Speaker 21:He's a great guy. Yeah. The best.
Speaker 12:And I
Speaker 21:will be together in Tel Aviv next week also.
Speaker 1:Oh, so we're having Sean Maguire jump on in just a minute. He told us about how TALPO has become a pipeline for great founders. Can you give us more insight there? Have you backed any TALPO founders?
Speaker 21:Yes. We've backed many TALPOs.
Speaker 1:I haven't been breaking down thirty years. Well, yeah. Yeah. What what is TALPO? Why is it such a hotbed for entrepreneurial talent?
Speaker 21:Everybody knows about eight thousand two hundred unit, which is like the cyber unit of the Sure. Israeli military. Top Yoda is a unique program. It takes about 30 kids a year who are the best and the brightest.
Speaker 1:Yeah.
Speaker 21:The Israeli genius goes there. It's a ten year program
Speaker 15:Wow.
Speaker 21:In which you get a couple of degrees along the way Okay. And then you get a budget Yeah. To go do a big weapons program or military program. And so we give these 22, 20 three year old kids the most immense responsibility. Yeah.
Speaker 21:They grow up. They deliver. And they know how to build essentially companies
Speaker 1:That's awesome.
Speaker 21:In a box. It's in
Speaker 1:Can you give some examples of, alums that you think are worth digging into or understanding their history?
Speaker 21:Oh, sure. So we backed the company called One Step. Okay. It's actually three top yoke guys, which is like hitting the jackpot.
Speaker 1:There we go.
Speaker 21:Lived by Tomer Shusman.
Speaker 1:X. They
Speaker 21:took they just took this little telephone device Yeah. And turned it into what's called a gate lab.
Speaker 1:Okay.
Speaker 21:And it turns out that how you walk is predictive of your health.
Speaker 1:Oh, interesting.
Speaker 21:In many ways, it's like a blood test. Oh. Literally like a blood test. I can tell if you're gonna have dementia Yep. Or Alzheimer's, by the way, whether your hip and knee replacement works.
Speaker 1:Interesting.
Speaker 21:That's why I mean, the only guys who are literally rocket scientists could the phone into what's called a gate lab and
Speaker 1:That's very cool.
Speaker 21:Use it to measure everything. That's one example there.
Speaker 1:What's the business model? Sell to the customer directly or They vent that into Apple Health or something like No.
Speaker 21:They're actually selling to facilities that do rehab Sure. Elderly people or people of hip and knee replacements. Excellent. They sold to medical device guys like Zimmer.
Speaker 1:Okay. He's growing
Speaker 21:extremely fast.
Speaker 1:That's great.
Speaker 21:And, you know, incredible genius. And, you know Yeah. Then there are others. There's a guy out there. You might have met him, Michael Kaufman.
Speaker 21:Was working with a bunch of guys who come out of that place.
Speaker 10:Cool.
Speaker 21:I think we met him last night.
Speaker 3:Talk about collaboration with this group here and and and and your companies back in Israel. What what does that
Speaker 21:look Here's the thing about Israel is there's no local market. Right? 10 Yeah. Citizens doesn't make much of a market. 400,000,000 on the hand.
Speaker 1:Sure.
Speaker 21:Sure. Yeah. Is big. And so if you assume that US defense spending is gonna go up Yeah. This is a good place to do defense technology.
Speaker 21:We've backed a bunch of companies in the area, a company called Ore, which makes rocket fuel and explosives.
Speaker 3:Got it.
Speaker 21:Using natural and biological means and another company called It's
Speaker 3:chemistry company.
Speaker 21:It is like it is actually a chemistry company using biological means. It's specialty chemicals company. Our co investor there is Standard Industries, you know, W. R. Grace.
Speaker 21:Yep. And we've backed a company that's in the kinetic defense area and another company called Dream. May have heard it was founded by Sebastian Kurtz, the former chancellor of Austria and Shaliev Julio. Yeah. That is doing national level AI protections.
Speaker 21:One of the fastest growing
Speaker 3:Yeah.
Speaker 21:Companies I think in the world right now.
Speaker 3:What's your what's your read on whether or not we are really we're clearly in an AI race. What what is is that something that can be won? Or is it like any other industry where it's just sort of a perpetual race? There's there's no ending, you know, do you have a thesis around Do you
Speaker 1:agree or disagree with Bill Gurley?
Speaker 21:I agree with Bill Gurley. Okay. Yeah. My former partner eventually Of course. Course.
Speaker 21:I I I agree with Bill Gurley. It's an infinite game, but I'm not sure if the question is framed right.
Speaker 1:Sure.
Speaker 21:So AI is going to impact just about everything we do. It's a super accelerant of of many things. I think the question becomes, because the clock gets sped up
Speaker 8:Yeah.
Speaker 21:You could fall really far behind in every iterative game you play Right. If you're not at the head of the game. You know, if you're not winning winning the game. It's not that you win in order to defeat the other person. Mhmm.
Speaker 21:You win in order to stay ahead. And one one of the I've read a bunch of books. One of the core thesis of the books is that the civic society runs on iOS and AI and runs really quickly. And government runs on the fax machines. Yep.
Speaker 21:Yeah. And that's inevitably creates friction. Mhmm. And the society pulls ahead and it creates tension with the government. I think that's part of the loss of faith in institutions.
Speaker 21:Yeah. So if you don't accelerate the clock on absolutely everything, what you just have is unending friction, society kind of collapses on itself. So you need to stay ahead of the race in order for your society actually to be healthy, and then also to deter others Yeah. From doing other things. You know, if science accelerates with AI and weapons development starts with AI, it it can be troubling.
Speaker 21:I I gave a talk in Abu Dhabi about it's about a year and three months ago where I showed that there is correlation. We can argue whether there's causality, think there is, between, the increase in compute power and cyber attacks
Speaker 2:Mhmm.
Speaker 21:And interest in, in bioweapon attacks Interesting. Online. I think it's not an accident. There's agents of chaos in the world Yep. And now they have access to super tools Yep.
Speaker 21:Like AI. So if we don't stay ahead, these people get emboldened and you can't kind of keep them in a
Speaker 3:What you know, there's a lot of talk today around just efficiency in government, specifically around like payments, things like that. Does The US have anything that we can learn from Israel in terms of do you think Israel's done a better job in terms of, like, modernizing the way that governments actually run, or is it still fax machines all the way down?
Speaker 21:The really interesting thing about Israel is not the government. What Israel has is the most incredible civic society on the planet. If you look at what happened October 7, the government was absent, but the civilians all turned up. Yeah. They turned up to evacuate people, turned up with their own weapons and their own cars, and took care of business that what needed to be done.
Speaker 21:In fact, the evacuees were taken care of mostly by civilians.
Speaker 1:Oh, interesting.
Speaker 21:The government didn't turn up. And what I think Israel is a model for the twenty first century, which is it's almost impossible for government to catch up on so many of these technology things. It's just gonna take them a while. Yeah. What we're doing now is devolving this to citizens to take over more control of the economy, emergency response, and everything else.
Speaker 21:I I chair the largest volunteer organization in Israel. There's actually wildfires going on right now in Israel. They've been set on fire by terrorists. There's 20 places that the fires are. This my civilian organization that I chair called the the New Guardians is out there with thousands of volunteers stopping the fire, the fires and stopping people from lighting more.
Speaker 21:And so the lesson from Israeli society is how you leverage technology and civic society to take over more capabilities from the government.
Speaker 6:Now Yeah.
Speaker 21:You can't defend people like that. That still requires, the government and policing should be done by the government. But the Israeli government, think is like every government right now, which is there's lower, trust in institutions. They're still very, slow. Yeah.
Speaker 21:And they're kinda coming around to this very late. But because of the force of the public, think it'll get there faster than most other governments.
Speaker 3:Yeah. That makes What
Speaker 1:what do you think about different geos to invest in? Benchmark was obviously in the news for the Manus investment, which is kind of controversial, but you could see a world where, hey, they're just great founders, they want to get out. And so, you know, American capitalism is like the path out. Are there more Are there other geos that are you think are interesting or more on this continuum of like east versus west narrative?
Speaker 21:I'm pretty bearish on Europe. Yeah. Broadly. I've said that on Harry Stebbings podcast and other places. Sure.
Speaker 21:I'm super bullish on The US and Israel.
Speaker 3:Sure. And I You went on the on the king of Europe Europe's Pilot. That's very fair.
Speaker 1:I did. Brutal.
Speaker 21:By the way, should say I'm an LP of Harry's
Speaker 10:too, buddy. Yeah.
Speaker 21:But, you know, he he feels the need to disprove me right now if you know I'm, you know, super bearish on Europe.
Speaker 3:He's all
Speaker 21:in.
Speaker 10:He's He's dying on
Speaker 17:the hill.
Speaker 3:Gotta make it work. He's gotta
Speaker 21:make This is good to be young and ambitious like Harry is Yeah.
Speaker 1:Yeah. Yeah.
Speaker 21:And do it. I I think there's interesting things going on in pockets. But still, Mecca is it's by the way, it's not The United States per se. It's Silicon Valley Yep. And New York Yep.
Speaker 21:And maybe Austin, a little bit of Miami, and Tel Aviv, its cities around the world, and maybe the Southern London. I think the most interesting thing going on right now is that actually in Abu Dhabi and Yes. And Dubai. Yeah. They've become a massive magnet for the talent fleeing Russia and Ukraine.
Speaker 3:Made it
Speaker 21:really easy to come there. More and more companies are setting up facilities here. Just here, met three people who've set up in Abu Dhabi.
Speaker 8:Yep.
Speaker 21:Yep. And so
Speaker 3:Well, have a lot of incentives too. I've heard that they'll basically say free space, free energy. There's a lot of you know, they'll they'll basically like massively reduce the cost, my understanding of operating things like manufacturing, any type of like hard tech, you know, projects.
Speaker 21:They're also really good at building big projects and they have low cost energy. So they're gonna build big data centers. Big data centers for The US giants and Microsoft has a partnership, you know, in MGX.
Speaker 2:Yeah. With Mubadala and
Speaker 21:I would I think there's interesting things
Speaker 1:Yeah.
Speaker 21:Going on in The Emirates more broadly. Not as much, you know, entrepreneurship coming out of there, but places where you can kind of build infrastructure Yeah. And deploy. I I think the really, really big question facing the West right now
Speaker 1:Yeah.
Speaker 21:And I'm a fan of Alex. I think we're here to defend the West Yeah. Is how do we create a secure and resilient supply chain
Speaker 8:Yeah.
Speaker 21:For the infrastructure we need to stay ahead in AI and not just in AI. AI, robotics, defense, whatever the next generation of bio is and chemicals as we've talked about.
Speaker 8:Yeah.
Speaker 21:That requires real infrastructure to secure supply chain for the West to win, and we gotta focus on that.
Speaker 1:Yeah. Yeah. Great point. What is your postmortem on the bricks narrative that I I don't know, I grew up with? Brazil, Russia, India, China.
Speaker 1:Goldman was calling these the next major markets. And the way that's bifurcated, if you invested in Russia and China, it's really rough. But Brazil and India, they've developed, but not fully. Are are there still, like, jump balls on the geopolitical, like, chessboard that can be pulled towards, like, the broader definition of the West even if India is not in what we traditionally think of as
Speaker 10:the West.
Speaker 21:It's funny you should ask this question. I was just remarking to somebody a couple of days ago. There was BRICS and now there's IMEC.
Speaker 1:IMEC. What's that?
Speaker 21:Ah, the India Middle East Corridor.
Speaker 1:Okay. Sure.
Speaker 21:So we assume that India would go with Brazil
Speaker 1:Yeah.
Speaker 21:China and Russia. But if you look at China and Russia in particular on some level, Brazil, these aren't real democracies. In India Yeah. Is a is a democracy. Yeah.
Speaker 21:Yeah. I think it turns out, by the way, if you invest in a non democracy, you actually don't own what you think you own.
Speaker 1:Yep.
Speaker 21:Yep. They take it from you.
Speaker 1:Yep.
Speaker 21:Yep. You don't you know, free markets is
Speaker 1:Very well.
Speaker 21:A Freeman said, you know, create free societies.
Speaker 1:Yes.
Speaker 21:It turns out the opposite is also true. If don't have a free society, you actually don't have a free market. You don't own what you think you own. And I never thought India was actually a part of that. But this IMEC thing, what's the IMEC corridor?
Speaker 21:India Middle East corridor.
Speaker 1:Yep.
Speaker 21:It's the alternative to the Belt and Road Initiative. And this is, You know, people don't understand this fine geopolitical point. So Turkey, which is kind of, on the side now. Turkey Pakistan, which is now warring with India, are part of the Belt and Road Initiative, the China initiative that China has initiated to try to get to Europe via land. IMEC, Indian Middle East corridors, alternative that where you go via India, via the sea to Dubai, Abu Dhabi.
Speaker 21:You cross through, you know, Saudi Arabia, Jordan, Israel, and out to the Mediterranean.
Speaker 1:Yep.
Speaker 21:And then in there. And this is I think is a big deal. I think bricks fell apart because democracy doesn't belong with these people. But I think there's a giant opportunity Mhmm. For the West and for The United States.
Speaker 21:If we can bring India on board Yeah. And make them a core part of the supply chain across The Middle East and into Israel and Europe.
Speaker 1:Into it and more and more companies testing the waters It takes a long time.
Speaker 21:These things need more time than anyone believes. The supply chain created in Shenzhen, in China, and Taiwan Yep. Is thirty years in the making.
Speaker 6:Yep.
Speaker 21:It's not gonna happen overnight.
Speaker 1:Yep. Thank you so much for coming on. Sean McGuire's Sean's here. Waiting. Can you go grab him?
Speaker 21:I'm like a warm up for Sean McGuire. That's like, you know I mean
Speaker 17:life goal unlocked.
Speaker 1:Yeah. There we go.
Speaker 21:Yeah. Opening for Sean McGuire.
Speaker 1:This is great.
Speaker 10:Hey, you, Josh.
Speaker 1:Hey, Josh. Yeah. Good to meet you. Thanks so much for stopping Fantastic. I think Jordy has to send a a tweet or post promoting the feed.
Speaker 1:We're gonna bring in Sean Maguire from Sequoia Capital. Welcome to the stream. Third time appearance on TVN. How you doing?
Speaker 10:Let's go. Let's go.
Speaker 1:I think we have a question.
Speaker 24:By the way, he's, like, leaning down. These guys are much taller in person than you.
Speaker 1:Oh, yeah. Yeah. Yeah. Yeah. At one?
Speaker 1:Yeah. We'll do six minutes, then we'll bring him in. Great.
Speaker 8:Hey. Great to see you.
Speaker 24:Who's the VIP at one?
Speaker 1:Josh Wolfe is coming on. He's a legend. Great guy.
Speaker 24:Good buddy. You
Speaker 1:guys could share a mic. Yeah.
Speaker 24:I think that'd be entertaining.
Speaker 1:Yeah. What's the initial reaction? Is this your third Hillen Valley, fourth Hillen Valley,
Speaker 24:something like that. Third, you know
Speaker 1:I I actually met you for the first time at the last Hillen Yeah.
Speaker 24:I missed I missed the first one, which is a big mistake. Got the invite. I think I got food poisoning
Speaker 1:or something like Yeah.
Speaker 24:Yeah. This thing has grown. Yeah. Every year it just gets crazier and crazier.
Speaker 1:Yeah. Yeah. Are you do you like the framing of like, re industrialization being the focus? Last year was a lot of, like, TikTok stuff. Is there something else we should be focused on?
Speaker 1:Or is reindustrialization really the heart and soul of the agenda with Hillen Valley now?
Speaker 24:Whatever the agenda is, I think the conference is focused on how tech meets Washington Yep. And like how we play nice together in the future. Yeah. I think that's the right focus and it's, you know, what technologies are gonna matter in the future, what policies can happen that will Yep. Help us get there.
Speaker 24:And I think, like, re industrialization is critical Mhmm. But I'm already hearing, you know, there's a lot of talk of a lot of other things too.
Speaker 1:Yeah.
Speaker 24:Yeah. Like energy, you know, all sorts of things.
Speaker 1:Yeah. Yeah. Yeah.
Speaker 3:Yeah. Does it does feel like even defense tech if defense tech ends up being involved in anything, it ends up overshadowing it Yeah. Because it's just exciting. You have these
Speaker 1:Yeah. Yeah.
Speaker 3:Planes and drones and
Speaker 1:then Great videos. Dominate.
Speaker 3:Like, great vid Great
Speaker 24:videos. Even better demos.
Speaker 1:Even better Yeah. The Nero's demo is wild.
Speaker 24:It's pretty good.
Speaker 1:I got that one early on. Soren's a champion drone pilot. So sort of great drone great demo. In terms of energy, are should every venture capitalist be on the hunt for the Elon of energy? It feels like there is
Speaker 3:power
Speaker 12:lost
Speaker 1:think
Speaker 3:the Elon
Speaker 12:of energy might end
Speaker 24:up being Elon.
Speaker 1:You think he's gonna go into it? I mean, we
Speaker 24:I I can't read his mind No. But if he does, tell me where to wire the money, Elon.
Speaker 17:Is there any limit? Elon Elon. Yeah.
Speaker 1:Because we're talking about,
Speaker 10:like That's kind of
Speaker 1:Reshoring semis. Reshoring semis, but, like, there has to be an upper limit to, like, you know, how much industrial work he can do at some point. I mean,
Speaker 24:look, on, So there have been to the credit of the tech industry
Speaker 23:Yeah.
Speaker 24:There have been probably 10 to 20 pretty promising vision startups in the last five, six years.
Speaker 1:Sure.
Speaker 24:And probably five to 10 fusion startups. Yeah. I haven't invested in any of those, which, you know, means I'm not doing my part to just, like, raise the Come on. Tide
Speaker 1:Spend some money.
Speaker 24:Of wall. And my kind of the challenge for me has been it's even though I believe so much in the category, I have like, I believe in the macro, I have to get the micro right. I made that comment before. Yeah. And it's it's been hard for me to pick, like, who's going to win in that category.
Speaker 24:I I think this is something that we can struggle with in I think some sectors Yeah. There should be a lot of government support. It's like, for all these, if if one ends up as, like, you know, number 10 in the space, but it's still Yeah. Like a public good and it like, is a positive payback for the government. Anyways, I think we need
Speaker 1:government Yeah. I just feel like there's an opportunity for a startup that's like, yeah, SMRs are cool. People are building those. There's new designs that are great, but our startup is just copy pasting Diablo Canyon. We're gonna copy paste it a times.
Speaker 1:Yeah. 500 times. Exactly. But does seem hard to do too.
Speaker 3:We've had a lot of people on from the Valley side of Hill and Valley. Who on the Hill Side are have you been, you know, excited about talking with that you think really gets it?
Speaker 24:I mean, I was just on a panel with senator Todd Young, and I I think he deeply gets it. And for example, one comment he just made was, like, he doesn't wanna, like, re onshore everything Mhmm. Only, like, a small number of very strategic industries. Yes. He doesn't wanna onshore garments.
Speaker 1:Yep.
Speaker 24:You know, and he's fine with things that are not there's different levels of, like, how strategic something is.
Speaker 1:Yeah.
Speaker 24:And, you know, it's fine if the medium strategic things go to friendly nations. Yeah. And so, anyways, I I think Todd has had very nuanced opinions. I think up right now or next is Richie Torres, who is someone on the left who I Mhmm. I've generally admired and felt like has very even though I disagree with him a lot of times, I think he's a very principled Mhmm.
Speaker 24:Person That's who really deeply cares about America
Speaker 1:Yeah.
Speaker 24:And is willing to say unpopular things that he believes in. And for for me, anyone that is willing to be bipartisan, like not just purely tribal, but take a
Speaker 1:Sure.
Speaker 24:On like some topic that is core dogma of their party and they're willing to go against that dogma, like that's someone that I generally admire.
Speaker 1:Yeah. Yeah. I mean, that should be a good fit for Silicon Valley. Like the whole search for contrarianism is like pervasive in Silicon Valley.
Speaker 9:Right? And so
Speaker 24:Pervasive in Silicon Valley, a little less pervasive in Washington.
Speaker 1:Yeah. But it still exists and there's pockets of it that you have to seek out, seek out. What is your read on the new defense budget? We're hearing this hundred and $50,000,000,000 number. For a while, it seemed like there was gonna be a freeze, maybe very bad for challenger defense tech companies.
Speaker 1:Then it seemed like the floodgates opened and there's all these huge numbers for even just small series a companies are throwing out, oh, there's a billion dollars hanging out for my thing. How optimistic are you about that? And and how optimistic are you about not just like the SpaceXs of the world, but the actual up and comers, the next generation of defense tech?
Speaker 24:Unpopular opinion. I simultaneously believe that DefenTech is one of the most important Mhmm. Categories in the world. Yeah. But I also believe that there's gonna be a very small number of winners Sure.
Speaker 24:You know, call it in the West, this is including Europe and Israel and America, roughly 10 companies that go on to be really big next next generation companies, call it companies with 10,000,000,000 plus market caps. Yeah. And I think there'll be multiple with greater than a hundred billion dollar market cap. Wow. And I think that the defense tech companies of the next generation are gonna be way better businesses than the last generation.
Speaker 24:So I think it's
Speaker 3:focus on efficiency.
Speaker 24:Focus on efficiency. Focus on vertical integration. If you go look at like, I think I think one of the core things people got wrong about Tesla in the public markets going back to like 2017, '20 '18 is they were comping it to auto companies Mhmm. Yeah. And they're comping it to GM or Ford or whatever.
Speaker 24:And people didn't realize that GM and Ford don't really make anything anymore.
Speaker 1:Yeah. Mhmm.
Speaker 24:They basically and and our, you know, customer acquisition channels and maybe some financing. Yeah. But they subcontract out everything.
Speaker 8:Yeah.
Speaker 1:Yeah.
Speaker 24:And and so they would look at, oh, GM or Ford have these market caps and Tesla's already here, but they would ignore NXP and ignore like all these supply chain companies.
Speaker 8:Yep.
Speaker 24:And I think we've kind of been doing the same with the defense prime
Speaker 8:Interesting. You
Speaker 24:know, Boeing, Lockheed. Subcontract out almost everything Yeah. Yeah. That goes into their slice
Speaker 1:of the market cap.
Speaker 10:You're only
Speaker 24:getting a slice of the market cap.
Speaker 1:Makes sense.
Speaker 24:And I think these next generation companies are gonna have way more vertical integration, higher margin. I actually think that we're gonna see a change with how procurement happens to move away from cost plus. I think we're already starting to see that. But basically, the reason it's unpopular is I think there's gonna be a very small number of winners that win mega hard, and then a lot of Yeah. Mhmm.
Speaker 24:You know, losers or companies get rolled up into the big, you know, the big winners.
Speaker 3:Were you surprised that I I think the number was $500,000,000 was earmarked for autonomous systems. And when you compare that to some of the other categories, it felt pretty low. Do you do you have any insight into into into how they got around to that number or, you know, general reaction?
Speaker 24:So, like, there's different philosophies. I think one philosophy would be that, like, we're trying to push a boulder up a hill Mhmm. In terms of, like, changing the defense budget and moving budget towards next generation emerging industries. And if that's something where it's like every year it's predictably getting bigger and bigger and bigger, and if ten years from now, 50% of the budget is going towards kind of next generation strategic technologies, then I'll be very happy. Yeah.
Speaker 24:Mhmm. What would be very bad is if it was like 500 this year and then zero next That's
Speaker 3:a really great take. It's like it's like if a company raises, you know, a hundred million dollars in VC and they have to spend it all in the first year
Speaker 1:Yeah.
Speaker 3:Like, they're gonna probably spend it really inefficiency inefficiently Yeah. Versus like, hey, let's like stage this out milestones. And so, yeah, think that's
Speaker 24:a great And this has been the look, learned this lesson the hard way with my cyber security company that focus on defense. Our first big contract, we got we got awarded a $10,500,000 contract, and then government sequestration happened, like they couldn't pass Interesting. A congressional bill. And we basically got told, like, either we accept the contract with 60¢ on the dollar Yeah. Or no contract at all.
Speaker 24:So obviously, we took the 60¢ Yeah. On the dollar. But and we were lucky that this was actually our first big contract because it taught us from day one how unpredictable government
Speaker 8:Yeah.
Speaker 24:Funding can be. But is that predictability, like, if it's if you know it's gonna be 500 this year and a billion next year, etcetera, you can invest Yeah. Strategically. If you have no idea what it's gonna be in the future, it's just very hard to plan.
Speaker 3:Mhmm. Totally.
Speaker 24:You guys get Josh.
Speaker 3:Last last question. Yeah. Sixty seconds. Do you have a re you know, a a take on this idea of whether we're in an AI race, but is it a is it a is it an infinite game? Is it just sort of a perpetual game?
Speaker 3:Or is it AI war even the right framing? Right? I feel like this is bit of debate.
Speaker 24:Oh, man. I I'm so glad you asked this. I've been obsessing over this for a couple years. I have a pretty strong opinion that the foundation model companies are gonna capture way more value than people realize. My I think it's a combination of operating systems plus cloud Mhmm.
Speaker 24:Which means this will be incredible businesses. Let me just make this point. So, like, you think on the operating system level, there's Windows, there's Apple
Speaker 1:Mhmm.
Speaker 24:There's Android by Google, there's, you know, Linux and open source. And these companies, like, the value capture of Microsoft or Apple, it's not on the operating system. It's on all the applications that
Speaker 17:they Yep.
Speaker 1:Yep.
Speaker 24:Control and built on top, and same with Android. But by control I think that the operating systems are gonna be the foundation models themselves. Mhmm. I think there's incredible kind of CapEx in development to get to the point where you are the like, one of the top operating system that has eyeballs. Yep.
Speaker 24:But then I think the lock in and the value capture will be with the applications that are kind of verticalized on top. Mhmm. And and I think there will be an additional moat, which will be like, the moat of cloud cloud has done a very poor job of the application lock in the way the operating systems did, but they've done a very good job of having a hardware moat and a CapEx moat. And and I think it'll I think I think these AI foundation model companies are gonna have both. They're gonna have like a CapEx lock in moat
Speaker 25:Yep.
Speaker 24:And they're gonna have like the usage and application Mhmm. Moat plus value. And then just the last thing I'll say on this, and and like if you look at Linux, Linux probably has five times as many installs as like Windows.
Speaker 3:Mhmm. Yep.
Speaker 24:But the value capture of Linux is like one one hundred Yeah. Of Microsoft.
Speaker 1:Yep. But Red Hat's still a big business.
Speaker 12:But Red
Speaker 24:Red Hat's still a great business, but I I personally think this is where we're gonna go with AI. Is that, like, the open source, DeepSeek and all that stuff will be great and it'll be there'll be more open source models used in the world. I think the value capture will be lower by that than x AI, OpenAI, Anthropic, some Yeah. Chinese, etcetera. Get Josh Wolf on here.
Speaker 1:That makes sense.
Speaker 24:Hey, guys. Let's go.
Speaker 1:Yeah. We gotta do a whole That's fun, on that.
Speaker 3:We'll see you back in LA.
Speaker 1:See you.
Speaker 24:Peace, guys.
Speaker 1:Let's bring in Josh Wolfe, and I got a post that we are live. So much to dig dig into. Sixty second question, Jordy. You you you hit him with the the deepest possible question
Speaker 3:right I wanted to take more on on this idea of, you know, should we be investing in Chinese AI companies? Yes.
Speaker 1:Yes. Well well, we have Josh Wolfe, the man himself. How's it going? Good to see you.
Speaker 3:Great to see you.
Speaker 1:Welcome Triple
Speaker 17:today. To the trains.
Speaker 1:How you doing?
Speaker 8:We've wanting
Speaker 1:to Josh. Please. Awesome.
Speaker 3:We've been wanting to have you on for a while.
Speaker 17:Yeah. Great. I've been wanting to
Speaker 1:be on for I'm glad. Yeah. Yeah. Yeah. I'm glad you could make it.
Speaker 22:I'm gonna disagree with everything that Sean said. I don't know.
Speaker 3:Okay. Perfect. Line by line. Line by Yeah.
Speaker 1:Said AI is valuable. What what what about that? Are you in front of a camera? Can you
Speaker 3:yeah. I think you're good right there.
Speaker 1:Yeah. Yeah. You should be good there. Yeah. Yeah.
Speaker 1:That's great. Yeah. That's great.
Speaker 3:How's it going? Is this is this
Speaker 16:I I I I'm wearing a tie.
Speaker 1:I love it. You're wearing
Speaker 3:a tie. You look sharp.
Speaker 1:One year since you put on the suit and tie for Hill and Valley last year?
Speaker 3:Break down your your first business trip to Washington because I feel
Speaker 22:like I've been coming to DC for a very
Speaker 3:long you've been banging the the, you know, public private partnership, you know, drum for
Speaker 22:A long time.
Speaker 3:A long time. And many of the companies I feel like, you know, oftentimes I see a new fundraise announcement from a new, you know, sort of hard tech company, and I'm like, I I feel like Josh invested in, like, this exact company like six years ago or something
Speaker 8:like that. Company and they
Speaker 25:more money.
Speaker 3:Yeah. Yeah.
Speaker 22:Yeah. Yeah. No. We've been in this for a long time.
Speaker 1:I think
Speaker 22:we really started with a lot of like Intel community facing things.
Speaker 12:Sure.
Speaker 22:Most of that was sort of software, maybe sensors, SIGINT Mhmm. Data collection. That was a lot easier to work with. Then we started working with soft special operations, which basically had rapid fielding so they could deploy stuff and it wasn't at the scale that you need to like win a big army contract.
Speaker 12:Sure.
Speaker 22:Yeah. Started doing stuff in space with satellites. Yeah. And then, I would say like, really the first pure play non quote unquote dual use thing, which was unapologetic, was first round of Andoril. Yeah.
Speaker 22:And, you know, I wish that there was like some sophisticated analysis we did for that, but it really was me and Trey at Balthazar in in York. He's like, I'm gonna start this company with Parmalucki. I'm like, I'm in.
Speaker 12:I'm in.
Speaker 22:So That's great. That the that
Speaker 17:was the diligence.
Speaker 3:How have you found, you know, you do you do a a first round in Andoroll, but then and then you're like, okay, this category is gonna be really important. Do you wanna invest more, but then there's this issue where the Andoroll of Andoroll is probably Andoroll. Right? Yeah. It it is.
Speaker 3:And so and so have you had to hold back in a lot of instances where you're There
Speaker 22:there are venture funds and we we compete with them and we partner with them that are sort of a little bit more polymers and they're doing lots of deals with lots of different We try to be really monogamous. And so there was one company in particular, I'll say it out loud, it was Dive Technologies.
Speaker 1:Yeah.
Speaker 22:They came to pitch us and they were doing subsea, which is very complimentary to our company SailDrone, is doing autonomous on sea. And I said, you know, I think you would really be better off as a part of a platform that has Yeah. The muscle and the mechanisms to be able to win contracts and scale and manufacturing and think about this as part of a portfolio. And so, at first, think they were a little bit hesitant, but then they ended up going to Androle. I got to say, I think it was sixty or ninety days.
Speaker 22:We then won the big Ausak deal. Yeah. Huge. That to me is just like proof positive of high-tech, in the right platform, able to execute. Matt Grimm, credit and props to him.
Speaker 22:I mean, picked up his family, moved to Australia
Speaker 1:Yes.
Speaker 22:Set up his operations, 60 plus people, billion dollar plus contract Yeah. Like very Yeah.
Speaker 3:You know,
Speaker 22:but but clear sign of winning, so we love that. But yes, it is harder Yeah. To do something that is in a category as Andoril expands, because we really want Andoril to just be,
Speaker 1:you know Is there a different type of underwriting that investors could be thinking about? Not necessarily, hey, I'm trying to back the next Andoril and I'm underwriting to a 1% chance of a hundred billion dollar outcome, or is there a world where, yes, we're building something that might get acquired or might go through an M and A process? Totally. Is that even the is that even the purview of venture at
Speaker 22:that Well, you go back to Sequoia. Sequoia funded Cisco. You know, Cisco Yeah. Yeah. And then Sequoia made a fortune selling company after company in Cisco in early nineties.
Speaker 22:Right? So so if Andoril, you know, ends up being a $508,200,000,000,000 dollar business Yeah. The ability for them to buy a bill a company for a billion is venture making Yeah.
Speaker 12:For a
Speaker 22:lot of fun. So I think that the ecosystem is growing the right way that
Speaker 1:it should. Yeah.
Speaker 22:We will have a bubble in aerospace and defense.
Speaker 16:It will happen.
Speaker 22:Yeah. And it will happen in part because of capital formation, which is really interesting. Yep. So you got venture funds like us Yep. That us and Sequoia and founders and
Speaker 1:Yep.
Speaker 22:And KP and Coastal and a handful of people that are doing, you know, these kinds of investments. Then you got dedicated specialist funds.
Speaker 1:Yep. Yeah.
Speaker 22:And then you got fund of funds.
Speaker 12:Yep. And the
Speaker 22:fund of funds are interesting because you have a bunch of universities and endowments and hospitals that are like, we won't invest in the defense category because we are not comfortable being part of a
Speaker 1:kill chain. Yeah.
Speaker 26:Yeah. Yeah.
Speaker 22:We as a partnership are. Right? They might not be. But we would invest in a fund of funds that is investing in a venture fund that is investing Sure,
Speaker 18:in a
Speaker 22:company of Sure, So you have this moral removed that is gonna provoke more formation of capital, but there won't be enough companies in the first few years.
Speaker 12:Yeah.
Speaker 22:So you're gonna get a bubble, there's gonna be a bunch of frauds, there's gonna be a bunch of crashes and disasters.
Speaker 1:Is that an argument against building like a dedicated defense tech fund? Have you ever done a segmented fund? I know a lot of big big VC funds have.
Speaker 22:No. We we we have like a little opportunity fund for some of our best defense companies, but not a carve out. We are generalists. We like to have one pocket, one pool.
Speaker 1:Can do
Speaker 22:a hundred thousand dollar check.
Speaker 1:Can do
Speaker 22:a hundred million dollar check.
Speaker 17:That's great. And you can
Speaker 22:go sort of all sectors. But I don't think there's anything wrong with it. If somebody's a specialist and super passionate about it Yeah. Like, for it.
Speaker 1:Yeah. Rudy?
Speaker 3:What was your play what was your kind of DC playbook? What what advice would you give to your portfolio maybe five years ago and how is it different than today?
Speaker 22:You know, five years ago, I think you were working with a lot of lobbyists to try to get meetings on the hill. You'd be lucky if you can get a senator. You're mostly getting congressmen or staffers Yeah. With that. Today, I think everybody wants to be in the conversation because they don't want to be ignorant.
Speaker 22:Yep. You have a lot more alliances between red and blue, Republicans and Dems on things like shared adversaries. China, you know, that's a question everybody converged upon.
Speaker 1:Yeah.
Speaker 22:Yeah. So American competitiveness, thinking about the scientists, the engineering. People are going to debate some of the policy stuff. Should we be cutting science funding? Should we be partnering with South Korea or Japan or UK and these kinds of things?
Speaker 22:But everybody wants to be in the conversation, so your access today Yeah. Is evidenced by this conference. I mean Yeah. What Jacob and Delian Yeah. And Christian have done here is just really amazing because it started as this napkin sketch.
Speaker 22:It became a crowd. Now the crowd has become sort of a movement, but the caliber of the people that you're getting is both extraordinary. And the politicians sort of keep getting older, but the people that are doing the tech companies that we're looking to fund keep getting younger. I think that's a beautiful thing.
Speaker 3:Are you taking would you say you're taking more a lot more pitches today? I mean, imagine In the halls here?
Speaker 10:In the halls here.
Speaker 3:No. No. No. Just in the context of I I know you guys have all all, you know, been focused for a long time on like, you know, finding like researchers that were developing, you know, things that could be commercialized. But I imagine like just the scale of inbound as hard tech, manufacturing, defense tech, all these categories like became like hot Oh, numbers get heated.
Speaker 3:Sure. I'm assuming like the number of pitches just gone through the roof.
Speaker 22:I mean, number of entrepreneurs and by the way, the best entrepreneurs frankly are the people that we backed at Andoril. We've done two people that have vested and, you know, sort of with blessing have gone and left and started their own company. And so being able to find these fountains of talent Yeah.
Speaker 20:That have seen success, have
Speaker 22:seen rapid scaling, have seen valuations, they understand the venture game, they can raise money, they can attract a technologist, they can in license IP or develop it themselves. Those are the people that you can back time and time again. So I think we have a decade long run of amazing talent in this ecosystem Yeah. Isn't gonna be just Silicon Valley. Right?
Speaker 22:It's gonna be SoCal. Yeah. And it's gonna be other parts of The US down in Texas and
Speaker 1:Yeah.
Speaker 22:And and maybe even Florida.
Speaker 1:How do you think about
Speaker 22:And by the way, sorry, too. We did our first two ever Israel investments, both are defense companies.
Speaker 1:Yeah.
Speaker 2:Yeah. We did
Speaker 22:a company in Japan, company in The UK. Wow. So we're interested in not just American defense also, but American allied defense.
Speaker 1:Totally. How do you think about VCs as a conduit to DC? It feels like potentially low hanging fruit for some sort of value add. You know, a lot of VCs would say, oh, we'll help you find find your first, you know, VP of engineering, or we'll help you with some comms puzzle. But like almost like light lobbyist, just making some introductions to the senators and and congress people that you might know.
Speaker 1:Is that a more modern form of value add that's coming out of venture funds these days?
Speaker 22:I think partners at firms like ours and others have relationships and they're authentic relationships and you spend time with these folks and you admire them. There's congressmen who I deeply admire and I think are the future leaders, both Republicans and Democrats. Yeah. People like Richie Torres and Jake Ockenclaus
Speaker 1:Yeah. And then
Speaker 22:on the senate side. Young and Slotkin. I mean, these are like real patriotic Americans that are smart and savvy. Might have been in the CIA, might have been a marine Sure. But but quite savvy.
Speaker 22:And they are tech savvy. And they're young. They want to know these companies. Yeah. And and you know, they want a future donor base too their own self interest.
Speaker 22:As Ben Franklin said, would you persuade appeal to interest, not reason?
Speaker 1:Yep.
Speaker 22:But I think understanding that game, and also understanding tech moves at this crazy velocity that is hard to compete with. It's why tech wins because they out compete because they move faster.
Speaker 1:Yeah.
Speaker 22:Government does not move that fast.
Speaker 1:And so
Speaker 22:you have to be a realist. Government is faster Yeah. Than it has in the past, particularly in defense.
Speaker 1:You look
Speaker 22:at this appropriation bill, this reconciliation bill. Trillion dollars, 40 7 billion plus gonna be going towards shipbuilding, autonomous systems. Yep. Was like, that's gonna be a big boon for Andoril, for Hadrian Yeah. For Varda, for Sail Drone.
Speaker 3:How do you think about founders that are trying to time some of these broader structural changes? If you were in if you're in shipbuilding at all, the best time if you wanna take advantage of this new build to start your company was maybe a decade ago
Speaker 1:Totally.
Speaker 3:Because you're sort of ramped and
Speaker 1:Totally.
Speaker 3:Scaled and you have a great team and you have some credibility. But how do you think what's your advice to kind of early stage founders that are seeing the world change and trying to kind of navigate and see opportunities? You know, an example being like, you know, I I'm not convinced that like every manufacturing, you know, automation company is like gonna do is The right time to start it is now because we don't know. Very the the future is like murky. Right?
Speaker 3:Like Totally. A lot of these things are unfolding. How do you how do you help founders kind of understand market timing when when there's so much influx?
Speaker 22:The honest answer? A lot of it is luck. Yeah. Yeah. I mean, honestly, like, I would say that there's a five year psychological bias that you want to be invested today.
Speaker 1:Yeah.
Speaker 22:Where you should have been five years ago.
Speaker 10:Yep.
Speaker 2:Yeah.
Speaker 22:Okay. But I'll just give you a few quick examples. You think about the people that were doing modular reactors.
Speaker 1:Oh, yeah.
Speaker 22:I'm not a personally great believer, I think it's great for society. We're not invested in them. Did a lot
Speaker 3:of nuclear nuclear waste cleanup. You agree with Sean on that? You guys doesn't sound like
Speaker 17:I hope it happens. You're a solar bull or
Speaker 22:It's it's happening and it's getting cheaper. Like, I'm not crapping on solar, but it's just Yeah. It's not super exciting. True. But but I'm a huge nuclear bull.
Speaker 22:Know, I've renamed it elemental energy. Oh, Yeah. But but if you were developing modular reactors, might have been like, okay, it's large base load power. It's better than intermittency. But you weren't anticipating that there was gonna be this data center build up
Speaker 1:Yep.
Speaker 22:Which is at least part of the narrative.
Speaker 1:And that means gigawatt scale.
Speaker 22:Correct. And whether or not that will actually see the light of day today, they're able to capitalize and and and draft off the hype of that. Yep. So that's number one.
Speaker 1:They're thinking about bringing back 3 Mile Island, Diablo Canyon potentially. There's a lot of big opportunities for large scale nuclear.
Speaker 22:You you look at people that are doing minerals and mining, which is not a really sexy area, but suddenly you're thinking supply chain, geopolitical conflict with China.
Speaker 1:You're thinking
Speaker 22:about robots and magnets and things that have to go into Yeah.
Speaker 1:Magnets and minerals. General matters.
Speaker 3:My question is like, you know, if you're in if you're doing anything in mining or rare earths, obviously, great if you started a company three years ago and then you get to capture this momentum. But do you see potentially enough explosion of sort of demand and and new markets that you could still start something today?
Speaker 15:You can
Speaker 22:always start something today. Yeah. And you gotta remember that I think some of the best successes are not just like execution and you follow this playbook, but it's luck. Yeah. Yeah.
Speaker 22:Fifteen years ago we started a high-tech nuclear waste cleanup company to go after the defense nuclear waste from pre and post coal Yeah. Law making. All of a sudden earthquake, tsunami, Fukushima disaster Yeah. We become the only US company picked for the cleanup to clean up nuclear disaster. Right?
Speaker 22:That became a boon for this company. It was a total black swan for Japan, a negative one, a total positive black swan for this company. Yeah. Today, Sail Drone, autonomous fleets of boats, they started oceanographic research and all this kind of stuff, bright orange ships. Yeah.
Speaker 22:The guy that's here, I don't know if you've seen him, Hondo Gertz, he's a big hulking guy.
Speaker 1:Okay. The two
Speaker 22:of us are together. Looks like the old poster of Schwarzenegger and Devito. Yeah. And
Speaker 10:he's like,
Speaker 27:you know,
Speaker 15:I got a big strategic idea for you.
Speaker 22:What if you paint these things gray
Speaker 1:Yeah. Instead of bright orange
Speaker 2:We should do
Speaker 22:some other stuff with them. You open up to this defense market.
Speaker 3:Sure.
Speaker 22:But that wasn't in their founding thesis of make a fleet of autonomous systems Yeah. For task force fifty nine in Bahrain and expand to the rest of
Speaker 12:the Yeah.
Speaker 1:Yeah. What what what do you think I mean, mentioned some of the other countries that you're investing in. Japan, I think you mentioned Australia. What do you think the future of partnership between The United States and Middle East allies looks like? Huge.
Speaker 1:Explain.
Speaker 22:You know, we we call this sci tech diplomacy. Mhmm. We brought onto our team maybe six, seven years ago Tony Thomas, t two. Okay. Head of SOCOM, ninety people 90 countries, 90,000, you know, all special operations.
Speaker 22:Incredible guy. Great entree into aerospace defense.
Speaker 1:Yep.
Speaker 22:A guy that was on the board of one of our early intel companies that
Speaker 17:we were focused
Speaker 22:on in intelligence community was Brett McGurk.
Speaker 8:Mhmm. Yep.
Speaker 22:Brett just left the administration. He was in Bush White House, Obama White House, Trump White House, left the Trump White House because he had put together the counter ISIS coalition.
Speaker 1:Mhmm.
Speaker 22:And when Trump surreptitiously sort of pulled from Syria, he abandoned the Kurds and he had built that allied nation with the Kurds and said that that allied force with the Kurds and said, we're gonna supply you militarily. He then resigned. Mhmm. Came back in for Biden. His capstone deal was the Gaza Hamas Israel Hostage deal.
Speaker 22:John twentieth left, joined us a few weeks later, company Mid Middle East. We met with MBS. We've met with Tanun and Mhmm. ABZ, Abdul Bin Zayed. I am so bullish about UAE.
Speaker 22:Yeah. UAE is so ideologically righteous on being coexistence.
Speaker 1:Mhmm.
Speaker 22:All three major religions.
Speaker 1:Mhmm.
Speaker 22:You know, Abraham Accords Yep. Major signee.
Speaker 1:Yep.
Speaker 22:Tech Forward, Cleveland Clinic, NYU, Johns Hopkins, the Guggenheim, the Louvre Yeah. Cultural Institute. The Louvre. Yeah. It's incredible.
Speaker 22:And and and they're building it super fast, they're building it thoughtfully. Yeah. And the ability to make a decision very quickly. High-tech, you think about G 42 and some these other things, they've decided we're not going to cast our light with China, we're going with The US. We're gonna build data centers.
Speaker 22:We're gonna partner with The US, and it's gonna be at like giga scale, hundreds of billions of dollars. Super bullish about UAE. Saudi, think, is next.
Speaker 1:Mhmm.
Speaker 22:Both for normalization with Israel. They want to be in the defense umbrella of The US. Yep. They are gonna spend a lot of money on AI infrastructure Sure. And compute.
Speaker 1:There was like Falcon nine b.
Speaker 12:Huge. Yeah.
Speaker 22:So so so UAE, Bahrain, Saudi next, I think, in the region, but of course Israel.
Speaker 5:I mean, is a tech Many
Speaker 22:of those countries realize it's really far to fly to Silicon Valley, but if you can go to Israel it's big deal. Tel Aviv is right there, short of flight. Our first two deals, like I said, defense focused. Hamut Al Meridor, who ran Palantir in Israel, we backed her Sean in a company called Kella.
Speaker 1:Oh, great.
Speaker 22:So Lux and Sequoia teamed on that. And just really bullish That's awesome. On the region.
Speaker 3:How do you think about how quickly information spreads today? It feels like a category, you know, a decade ago you'd have a category that could be underhyped for a long time. Now, somebody enters a space, they release a video and suddenly like a bunch of new people are pouring in. Where where are you looking at this point just besides your own network for the the next founder that you're gonna fund?
Speaker 22:So I have this as a flaw in my personality, which is, you know, I wanna know everything that everybody else talking about, but then I need to understand what's the white space like Sherlock Holmes, what's the curious incident in the dog at night, the thing that people aren't talking about. So I'll give you one because it's unsexy and I've talked about it publicly, maintenance.
Speaker 8:Yeah.
Speaker 22:Maintenance is the most boring thing you can think about, but here's the simple logic that I It wasn't reactive to a quarter or even a year. It was the basic idea that the cost of capital is gonna rise. Yep. Okay. If the cost of capital rises and you're not funding low interest rate stuffs.
Speaker 3:Yep.
Speaker 22:If you think about CapEx Yep. On a financial statement, you've got growth and you've got maintenance.
Speaker 3:Yep.
Speaker 22:Everybody's been funding growth. New data centers, new satellites, new military installations Right, man. New HVAC systems, equipment Eight
Speaker 1:Yeah.
Speaker 22:Now, if you're a CFO or you're a capital allocation committee or you're a board and you're like, do we really need to spend another hundred or billion on that? Do we need another data center? Or can we maintain the stuff we have? So I think that there's going be a demand shift from buy the new shit to how do maintain the old shit. Yep.
Speaker 22:And that is going be demand for preventative maintenance, early maintenance detection Yeah. Robots that can go out into certain things and repair them. So Yeah. All of that I think is gonna be
Speaker 15:a big wave. That's the
Speaker 22:kind of thinking at LOX that we're thinking about orthogonally. Everybody else might be tacking here, but how do you find something? Start making some bets, and then three, four, five years, everybody wants to be in that space.
Speaker 1:Yep. Fantastic. Well, thanks so much for joining. This is great.
Speaker 8:Triple Dave. Hey,
Speaker 3:come on the show again.
Speaker 1:Yeah. We'd love to go way deeper on a on a proper end. There's so
Speaker 3:much to talk about.
Speaker 1:You so And we're bringing in, Deleon Asperuha from Founders Fund, a co host and co creator, co founder of Hillen Valley Forum. Very excited to have him on the show for the, what, seventh time. So let's bring him in. Jordy is posting amplifying the stream, pumping it up, pump up the numbers. How we doing, Ben?
Speaker 1:Can we get a little review of, the stream is up? The Internet's working. It was a fascinating I'll give you a little inside baseball here. We brought in something called pop up WiFi to do this stream. And, it does not look like something that would normally get through security at the Capitol.
Speaker 1:It's locked and only the TSA can unlock it. Capitol security police do not have the key that TSA has. And so, it was very tricky to get in. They had to x-ray it a bunch. We couldn't get into this locked Pelican case.
Speaker 1:There's a WiFi router and a bunch of cell phone net like, modems in there. But we got it through, and we are livestreaming. And we're very excited to have Delian coming in later. We also have Christian Garrett hopping on to break down the other third cofounder of of the Hillen Valley Forum twenty twenty five. And, Jordy is tagging madly, all of our guests, getting us into the timeline promoting the stream.
Speaker 1:And we have we have an absolutely stacked line lineup. We got Delian and Christian coming on, then Eric Lyman. Lulu should be coming on. A lot of repeat guests breaking down what's going on in DC today at Hillen Valley. And here he is.
Speaker 1:Deleon, welcome to the stream.
Speaker 10:TBPN, Hillen Valley. TBPN, Hillen Let's do it.
Speaker 1:Let's fucking go, baby. Let's go.
Speaker 3:Are you Good.
Speaker 10:You know, made sure to arrive here on Monday. Got a little Yep. Accustomed to the East Coast. We always haven't, you know, switched time zones in, three months.
Speaker 1:It's tricky.
Speaker 3:It's probably It's weirdly the most brutal time Yeah. It is. Yeah.
Speaker 10:It's tough. It's tough.
Speaker 16:But, you
Speaker 10:know, we started off the day strong. Yep. Hamas protesters from the get go.
Speaker 1:Pretty wild. That's how you
Speaker 10:know you've made it as a conference. This is the
Speaker 3:first time you've protested. Journalist. First time.
Speaker 10:Yeah. And she that's when you know you really made it. If somebody is disguising themselves as a journalist to sneak into your conference
Speaker 8:Pretty crazy.
Speaker 10:And protest on behalf of a terrorist.
Speaker 1:Yeah. What was Carp actually saying? Was he being particularly controversial?
Speaker 3:Think he hadn't said
Speaker 10:anything. Yeah. Literally, he was like, you know, he was like talking about his book. And they were like, oh, you're killing Palestinians.
Speaker 1:Okay. Okay. Well, yeah.
Speaker 10:As Trump was But
Speaker 1:other than that, how's the reaction been? What have the most important messages been? Obviously, reindustrialization is the theme, but what else is popping up today?
Speaker 21:Yeah. I mean,
Speaker 10:I think what's cool is, like, this is a week where, you know, we talked about this in a couple of prior segments around the, you know, continuing resolution. Yep. So, this week, the, you know, sort of big bill in congress is the reconciliation
Speaker 1:Yes.
Speaker 10:Transferring it from basically, you know, sort of leadership into, you know, you know, some congressional language that actually goes and gets appropriated to individual program offices. And so, I think it's like a really fascinating week to have this conference because, you know, a significant portion of that bill was around shipbuilding. And then today, we have panels on shipbuilding Yeah. With some the appropriators that are literally, by the way, on the other I've been bopping back and forth between Capitol Hill briefing congressmen and then the Yeah. Awesome.
Speaker 10:Yeah. And so it's just like, there's something magical about it Yeah. Where this stuff is happening on like the perfect, you know, sort of week. And then the other thing that's been fun is even for congressmen that weren't aware or not even attending the event, they've been like, dude, you know what's going on? Like, I have like a lot more Silicon Valley tech companies on like my briefing calendar this week than
Speaker 3:like ever before.
Speaker 10:I was like, well, sir, like, I'd like to describe to you about this thing called the Hillen Valley Forum. We'd love to have you. Yeah. It's all here. So I don't know.
Speaker 10:It just feels like an institution. And then the, you know, other piece of feedback that's been fun is like, congressmen have even said that like, this is a place where they get far more casual time, and especially on a bipartisan basis. Dinner, we have 17 Republicans, 17 17 Democrats. Wow. And it's extremely bipartisan, and it's totally off the record.
Speaker 25:Yeah. Completely casual.
Speaker 3:If one person misses the dinner, somebody will write an article.
Speaker 1:Oh. Oh,
Speaker 3:it's left wing. Exactly.
Speaker 10:We're be right down the middle. We're sorry.
Speaker 1:You can't come in. We guarantee it's seventeen and
Speaker 15:seventeen. Yeah.
Speaker 8:It's gotta
Speaker 1:be equal. On the hundred and $50,000,000,000 appropriation, is that an update to what we talked about, I think, the first or second time you were on the show where you said, hey, maybe there's not more money coming. Maybe it's not gonna be a jump ball for a bunch of start ups. Has this updated your thinking?
Speaker 10:Yeah. Mean, I think it was sort of you know, the the February bills were clearly like a pause. Was just like, look, we're not just going forward with what the prior administration did.
Speaker 8:Yep. And even though we're
Speaker 10:very late in the game on passing this year's budget, we're just gonna pass a continuing resolution to put everything on pause. And then, let's instead, you know, sort of set it from the top. Yeah. So it's definitely, you know, sort of a step in the right direction. Obviously, you know, your sec dev is talking about the first trillion dollar, you know, sort of defense budget.
Speaker 10:Yep. Since we last chatted also, they pushed out the executive order on basically analyzing all the contracts and programs that are behind schedule and behind budget and,
Speaker 21:you know,
Speaker 3:sort of Yeah.
Speaker 10:You know, looking at canceling those. So, yeah, I think generally trending, you know, sort of all in the right direction. But I'll always continuously reiterate of just like, this doesn't mean that there needs to be like unbridled optimism. All of this is default going to Silicon Valley companies. Like, a significant amount of that reconciliation package
Speaker 1:Yeah.
Speaker 10:Has a bunch of line items that are currently only possibly be served by traditional defense contractors Yeah. And like the primes. And so, you know,
Speaker 1:it's Is there anything to read into when you see a really round number versus a very precise number?
Speaker 10:The round numbers are when leadership are doing it. The precise numbers is when the program office is actually saying,
Speaker 3:like, what
Speaker 8:do actually need? Interesting. But is
Speaker 1:one more bullish than the other? If I see a if I see a very precise number and I'm like, oh, that's definitely happening, versus the round numbers just like, oh, they just threw something out and they're gonna figure it out.
Speaker 10:Oh, yeah. The precise number is going to be more bullish on. Okay. Like, the reconciliation package is like, great. Yes.
Speaker 10:But it's leadership saying like, there should be approximately a hundred and 50, like, million dollars Yeah. You know, sort of sent sent towards, you know, sort of this package. And it's like, okay, but like is that really the right number? Like, it happened to be exactly a hundred and $50,000,000 exactly on the dot? Like, what's necessary?
Speaker 10:So there'll be some fine Early
Speaker 1:in my career, VC was like, oh, we we we we had our whole team run like a DCF. We know exactly and the value of your company came back at a hundred million dollars. I was like, there's no way that you actually have a spreadsheet that's been out perfectly seven zeros or Exactly.
Speaker 8:Exactly. No way.
Speaker 10:Well, you know It happens. According to leadership, it happens.
Speaker 1:It happens. It happens sometimes.
Speaker 3:How do you how do you think about sort of forecasting government demand? One of the one of the things that that was top of mind this week was $500,000,000 allocated for, like, autonomous systems Goal low. Right. Felt low for a lot of people when you compared it to other categories. Yet, Sean Maguire's point was like if you kind of just as long as that number's gonna go up over time, maybe it's good and it's a more efficient way to kind of deploy budget where because if you're you need to spend $5,000,000,000 this year, it's gonna be spent pretty poorly.
Speaker 3:But how do you think about kind of, like, forecasting government demand and how should teams think about it?
Speaker 10:Yeah. I think you can sort of use the reconciliation package as your sort of, like, combination of TAM and CAGR. Right? Yeah. It gives you a sense of, like, what the current TAM is, but they're clearly indicating also the CAGR of that is going to be.
Speaker 10:And so, I think in some ways for defense startups and startups in general, you know, to go back to like the Peter Thiel's Year to Wonder philosophy, you wanna monopolize a small market first and then grow from there over time. Mhmm. And so in some ways, if they were forced to spend $5,000,000,000 in a single year, probably inefficiently and probably zero chance that it happens to be one provider. There's no way that any startup, no matter how great you are, is ready to spend $5,000,000,000 in a single year. Yeah.
Speaker 10:Yeah. So by default, it's super disparate. There'd be a bunch of different players, which you might not necessarily want 15 shipbuilding players. Like, you know, probably what's best for the country is, like, probably not one, probably not 15, but probably like three that are constantly competing against one another. Right?
Speaker 10:I think that's probably what happens in, the launch provider world. Right? If you look at last week, they announced the latest phase of national security, basically, you know, to launch contracts. And, you know, SpaceX and ULA won as per, you know, sort of usual. But they did introduce Stokespace and, you know, sort
Speaker 9:of Rocklab.
Speaker 10:So it's like, yeah, I think there's probably like an appropriate sized pool and the equivalent on, you know, sort of shipbuilding. So I think you can think of it as a TAM, but it's not guaranteed. Just like in any TAM in technology Yeah. You're not necessarily immediately going to capture it. It's like, you know, VARTA had equivalent, you know, certain areas where there was some language around nuclear weapons modernization, reentry testing, etcetera, of, you know, sort of budgets that were in that same, you know, sort of dollar range.
Speaker 10:But again, that's just like literally the first step of, okay, now that's going towards that program office. Now you have to start thinking about what do the contract looks like, what are the actual missions that you're gonna be providing for them, the hardware that you're providing for them. But, yeah, I think, generally, you know, bull for defense tech That's great. That there's a whole set of, you know, sort of budgets now that in particular are very uniquely tech forward. Right?
Speaker 10:So if you look at like the concept of like unmanned fighter jets and unmanned service vessels, this reconciliation package is by far the biggest budgets that you've ever seen Yeah. For those types of activities. And obviously, that is a particular area. There's some in there that's like ammunitions and like, you know, army barracks, like, you know, refurbishment and things like that. I'm not sure that like Andoril's great at like army barracks refurbishment.
Speaker 13:Sure.
Speaker 10:But like, I think they'll probably be pretty great at some of this like unmanned surface vessel Yeah. Activity. And so it's really exciting to see like, some of these TAMs be pretty big that are very clearly only servable by, like, you know, this next generation of tech companies. Yeah.
Speaker 1:Yeah. We gotta get to Christian. So last question, or we wanna let down Yeah. Just
Speaker 3:just congratulations.
Speaker 1:Yeah. This is awesome.
Speaker 3:I I I said, this is the highest density of absolute killers that I've that I've, you know, set foot in in in a long time. Yeah. So
Speaker 11:I'm glad after I
Speaker 10:saw your guys' YC thing, just, like, texted Tougan afterwards, I was like, yo, this at Hillen Valley, it's gonna be sick.
Speaker 1:We pulled it off.
Speaker 3:Here we are.
Speaker 1:Here we are. Good to see
Speaker 15:you, Vince.
Speaker 1:This is great.
Speaker 8:We'll see
Speaker 9:you for everything.
Speaker 1:We'll talk to soon.
Speaker 10:We don't need anymore part time podcasters. Yeah.
Speaker 1:Let's bring in Christian Garrett from Number one hundred Hillen Valley one three seven. How you doing? Let's break it down. How's the day going? What's the latest with you?
Speaker 1:Is that your third or fourth coffee? Or are you on tea now because you're you're losing you're losing your voice?
Speaker 25:I'm a I'm a tea guy.
Speaker 1:You're tea guy.
Speaker 3:Tea guy.
Speaker 25:I'm half European.
Speaker 1:Okay.
Speaker 25:And any way that I can dig a deli in Yeah. By showing how strong Yeah. Europeans are. I think one way I can do that is by drinking a lot
Speaker 1:less you're also wearing a European watch today. We got the Pompeii Santos on. I
Speaker 25:going on.
Speaker 1:So it looks fantastic. It it is How's the
Speaker 3:day so far? Is it a bit I'm sure it's yeah.
Speaker 25:Yeah. It's been awesome. I'm sure you've heard from folks all day. You'll hear from more, from founders, investors, folks in office. Yeah.
Speaker 25:I know you guys will have elected reps in and out over the next few days and today. Yep. The enthusiasm and excitement is really really special. Yeah. This is the fourth year and just to see how big it is is a testament to how much our ecosystem
Speaker 1:Mhmm.
Speaker 25:Has changed. Yeah. You know, I talked about earlier, it was less than a decade, nine years ago, that Palantir sued the army Yeah. For commercial preference and violating title 10 US two three seven seven. And today, you know, Palantir is seen as one of the greatest partners, and the Army particularly is seen as one of greatest partners to Palantir and to our ecosystem.
Speaker 25:It's it's incredible.
Speaker 1:SpaceX suit as well. And they use the same lawyers as Palantir. Yep. So whoever that He's a good, got a good business going. I know that the theme is reindustrialization.
Speaker 1:What are the other conversations that are happening here? What are the other subtopics that people are digging in to?
Speaker 25:Yeah. Yeah. I think, within that, right, you can go all the way down the supply chain or value chain to, you know, rare earth elements and minerals. Sure. We just had a panel recently with,
Speaker 1:you
Speaker 1:know, James Lutinski from NP Materials.
Speaker 25:Panel with, Ralph Scully from from Lyraq.
Speaker 1:Talk about with NP Materials.
Speaker 25:Oh, right time. He's awesome. Crazy. He's awesome.
Speaker 21:When did
Speaker 1:that company start? Years ago. Right?
Speaker 3:Years ago. Oh, fantastic.
Speaker 25:It's been around for decades. Decades. Decades. Wow. It's one of the oldest minds, and they took it over.
Speaker 25:It's a great turnaround story.
Speaker 1:Oh,
Speaker 25:wow. One of our partners, Low Carbon Capital and Clayton Sure. That. Congressman Richie Torres is in that. Yep.
Speaker 25:That was incredible. It's great. We then went all the way up to you know, we had a panel with with Friedberg Yep. And Sean McGuire and Senator Todd Young on manufacturing, which we hit on We actually talked how energy and education are the key unlocks there. Yep.
Speaker 25:And then you go up to defense. Right? And and Andrew obviously has hit on this and you'll see more talks from Ceronica and others talking about the work that all these defense tech companies and the existing primes are doing to shore up our industrial capacity.
Speaker 6:Yep.
Speaker 25:So I think you've just seen the the the full gambit. I know Jensen hit on semiconductors as well.
Speaker 1:Yeah. Jensen's interesting because he's is a I was asking this question of, like, is he a customer of reindustrialization, or is he truly a reindustrializer?
Speaker 25:Oh, he's both. And Yeah. I think you see where NVIDIA is going. Right? They're now selling full systems.
Speaker 25:Right? I mean, they're moving
Speaker 1:Yeah. They move software.
Speaker 25:Adjust the GPU. Mean, they're doing the networking the cooling. Yep. So, if you extrapolate where that company is going Yeah. And you look at where they are today, it's a % you're right.
Speaker 25:They're on
Speaker 1:both Yeah. You can't really be a trillion dollar company with just, hey, we just designed some stuff and then let TSMC handle the rest. Totally. There's so much more about that company. Yeah.
Speaker 1:Yeah. Fascinating. Jordy?
Speaker 3:Yeah. Mean, I I I'm interested more on who who on the on the on the hillside really gets it. Richie Torres' name Yeah. Up quite a bit.
Speaker 5:Lot of times.
Speaker 3:How many people like that does the Valley need to in order to, you know, continue to be successful. Right? Because I
Speaker 1:feel like a
Speaker 3:big a big part of what's exciting about this event is is it because it's, you know, bipartisan, it's not about this admin. Right? It's about the next ten years, it's about the next fifteen years, the next twenty years. And so how many people are are, you know, we we talk about this in Silicon Valley. It doesn't take that many great CEOs to like transform an industry.
Speaker 3:Right? %. It sometimes just takes one. Right?
Speaker 1:Yep.
Speaker 3:And so how many how many true allies do you think we need and and are are those people today or are you hoping, you know, next year we get Yeah. More?
Speaker 25:Well, mean, one piece of that which is more of a meta point, but I think it would be great for government to have its own version of founder mode. Right? We need to get back to that within government. Yeah. Shyam Sankar talks a lot about this Yeah.
Speaker 25:Yeah. And how that's something that's been missing. And if you look historically, when we've had success, when we were really great at building, it was because we empowered individuals within government to own these programs and see them through. Yeah. So I think
Speaker 1:the person who's responsible for high speed rail.
Speaker 25:I mean, always talks about For good or better? Admiral Rickover, right? Example of this person. Right? I mean, like, we need these people again.
Speaker 25:Yeah. Now, I will say, today, Congress there's a lot of champions in Congress. There's lot of people that get it. They provide support. They obviously draft policy.
Speaker 25:They provide cover. But what you really need more of are these kind of founders at the individual level from the program officers
Speaker 1:Mhmm.
Speaker 25:To the folks running these departments. And Yeah. So, you know, I think that will be a big unlock. And then circling back to your question, right, within Congress, you look at the folks here today. Mhmm.
Speaker 25:Right? You have Senator Shaheen, you have Congressman Richie Torres, you have Congressman Gay Vambo, you have senator Todd Young
Speaker 3:Yep.
Speaker 25:And then you have, you know, house speaker Mike Johnson later. I mean, you really see across the board both Democrats and Republicans, there are folks that understand the importance of this. You know, the last panel said this, like, this is as bipartisan as it gets. Yeah. Right?
Speaker 25:Like, we wanna have a critical mineral element dependence. We wanna get rid of our dependency on China there. Yeah. Right? We wanna have redundancy there and a strong supply chain.
Speaker 25:We wanna have energy abundance. Yep. Right? Yeah. And we wanna have a strong deterrent strategy and a strong military.
Speaker 25:Yeah. And so Democrats and Republicans align on that. And the tech industry is pre preaching something that is in of itself aligning and unifying. And so I think that puts us in a very good spot to try to build bridges and be successful.
Speaker 1:Yeah. Can you I know you work with a lot of later stage companies, but can you share some best practices for government relations lobbying that Yeah. You're seeing tech companies get it right? What are they Yeah.
Speaker 25:You know, I think what's interesting is and I've talked a lot about this. Marc Andreessen has a lot of great stuff on this. You know, tech doesn't have a trade association. Mhmm. And that's actually a very good thing.
Speaker 25:So it is on the onus of individuals, founders, entrepreneurs, operators, the companies, and the investors I think as well Mhmm. To spend time within government educating policymakers on various subjects where they're experts in. Mhmm. A lot of the work that you see here are from folks that do not sell to the government. Right?
Speaker 25:There's no revenue to be had here.
Speaker 1:Yeah. Yeah.
Speaker 25:Yeah. Right? There's just educating and making sure that their industry
Speaker 20:Sure.
Speaker 25:Is a recipient of good policy, good regulation and good support.
Speaker 3:Sure.
Speaker 25:And I think that, you know, from from the first part, think the best thing is like making sure you have these relationships with folks. They are willing to take the meetings. Yeah. It's incredible. It's it's and so I think that would be the first step.
Speaker 25:Yep. I think the second is also figuring out like where's the highest leverage thing that you wanna focus on. You don't wanna come here and just take meetings for the sake of meetings either.
Speaker 3:Totally.
Speaker 25:Right? You wanna be focused on something very specific. You wanna care about something very specific.
Speaker 21:Sure.
Speaker 25:And that makes it easier for folks to to digest. Yep. And so I think that's the other piece is like figuring out where your business should be focused on, whether it's a potential contracting opportunity or something you want in a budget Yeah. Or whether it's just a specific policy or regulation that you care about. So I think it's like first, go build relationships.
Speaker 25:Yeah. Go rely on your investors. Go do this directly. Like, that's the way to do it. Yep.
Speaker 25:And that's how our ecosystem is going to do and always has done it. And then number two is figure out what the high leverage thing is and quite frankly, don't go take the time in DC until you have that.
Speaker 1:Interesting. Okay. Cool. Well, we'll let you get back to
Speaker 8:you guys.
Speaker 1:I'm sure you have
Speaker 8:a million meetings and panels.
Speaker 25:See you guys.
Speaker 10:See
Speaker 1:Yeah. We'll see you later. And let's bring in Eric from Ramp. Welcome to the stream. It's here for Eric Lyman.
Speaker 1:Is has has your panel already happened or is it coming up?
Speaker 17:It happened this morning. It happened this morning. It was a ton
Speaker 1:of We we were we were locked into the stream. Yeah. But give us the overview.
Speaker 3:Ravoy fired up.
Speaker 1:Yeah. Give us give us the high level. What what is the pitch and how did it go?
Speaker 26:It was fantastic. Look, I I think for private companies, startups, whatever it is for a lot of years
Speaker 10:Yeah.
Speaker 26:Getting more from every dollar spent is obvious. Yeah. Right? You know, a dollar saved
Speaker 1:Yep.
Speaker 26:Is not a dollar earned.
Speaker 1:Average Yep.
Speaker 26:American business has an eight and a half percent profit margin, so a dollar saved is 12 earned.
Speaker 1:Yep.
Speaker 3:Yep. You know? The government is thinking
Speaker 26:about this. Yeah. Of course, there's a lot of tax dollars in, but the deficit is growing every year. And so whether it's Doge and the folks there or other parts of government, everyone is starting to think about how can we start to apply modern tools to drive savings.
Speaker 1:Yeah.
Speaker 26:And in many ways, Ramp is at the forefront of it. A lot of the payment systems that are used by the government from the treasury, which doesn't re require, at least in the past, who was sending the payment, why did we send it, what was the purpose and attestation of repayment. Now, it's starting to get put in to credit cards. They're still using old antiquated designs where you have one system for cards
Speaker 1:Yep.
Speaker 26:But your actual expense policy doesn't drive how these cards behave.
Speaker 1:Yep. Yeah.
Speaker 26:And so there's people who are able to go and use cards for purposes that are not really advancing taxpayer interests. And so we we talked about this both, you know, at a high level. So Senator Joni Ernst talked about Mhmm. How she she's approaching it, how the Doge team's approaching this. And then Keith and and I shared a little bit from the Ramp context how how we Is there
Speaker 1:a that you're particularly drawing from of a more recent tech company selling into the government that's not in the defense tech? Obviously, all know SpaceX Palantir stories, but at a certain point, Microsoft must have said, hey, we're gonna try and sell Windows into the government or we're gonna try and sell Outlook or Excel into the government. Yeah. But that's a long time ago. It's a huge company.
Speaker 1:Yeah. Are are there other companies that aren't maybe government first, but have developed best in class government sales functions that you look to? Or as like interesting anecdotes? Are there other case studies that you've heard about that are interesting? Is there anyone out there?
Speaker 26:It's I mean, I I I just think I mean, a couple things. I I don't think people realize the scale of how large the US government is. Yeah. Between federal, state, local education.
Speaker 1:Yeah.
Speaker 26:One of the most mind blowing stats that I learned is one in six Americans who work, work for the US government.
Speaker 1:That's wild.
Speaker 26:It is huge. Yeah. Yeah. And I think at some scale, if you wanna go and and be a, you know, a scaled technology provider, financial service provider, healthcare provider
Speaker 1:Yeah.
Speaker 26:You're gonna work with the government. Yeah.
Speaker 10:Of course.
Speaker 26:Yeah. I just think so. And and so one of the openers this morning Mhmm. Was the secretary of the interior, Doug Burg who, you know, he had started an accounting software Amazing. Company called Great Plains.
Speaker 26:He sold it to Microsoft. Yeah. I think Microsoft is a great example of it.
Speaker 3:Yeah. Totally. Yeah. That's probably the example that I
Speaker 1:can Yeah. In terms of a government contractor. And interestingly, they're one of the big tech companies that Yeah. Never really blinked in their support of the government
Speaker 26:For sure.
Speaker 1:When there was that era in 2015, '20 '14 where a lot of tech companies were saying, hey, maybe we wanna stay away from the US government for a variety of reasons. So it's good to see that there's like a resurgence here. In terms of like, technically or not even technically, but just like the sales process, is that wildly different than a normal sales process? Or is it somewhat like just selling to a Fortune 500 company?
Speaker 3:I look at it, I mean, not not to not to interrupt, but I I think the the dynamic if you're if you're a scaled up, you know, Fintech company and you plan to be in business in fifty years, like you said, you know you're gonna be working with the government at some point. Yeah. I So it's more about figuring out the right ways to do it early on and also not being, you know, understanding, like, always having urgency because I think that every American can get behind can get behind efficiency. Right? It it it became political over the last, you know, ninety Yeah.
Speaker 3:Days due to Doge and stuff like that. And like you said, one out one out of every six people works in some way for the government, then obviously that's gonna get political. But when I when I look at it, you know, it's just about how do you Yeah. Defense if you're if you're dual use or you're, you know, primarily serving the private market or private companies, it you can you can think I feel like a lot more long term versus the defense Mhmm. You know, defense tech companies that are here and they're like, if I don't get their government this year, I'm You know?
Speaker 3:Yeah. And so I think like having that I'm sure that sort of like long term thinking around partnership with the government has driven a lot of your decision making.
Speaker 26:Oh, for sure. I mean, look, it's I mean, maybe a couple things. I mean, first, I I I actually just think there's like a very I I think some of the story of technology, I I I think about, you know, Steve Jobs' old famous quote of, you know, a computer is almost like a bicycle for the mind. Mhmm. It allows you to go faster, do more, think at an accelerated rate and ultimately achieve more.
Speaker 26:So I I think it's not it's it's great that people are trying to modernize defense. I think that there's a lot of people doing many types of great work. Know, departments of veteran affairs Mhmm. Departments of of whether it's like it's education, interior. There's people doing important work.
Speaker 26:And I I think one of the examples that often I I think just makes clear and connects with people is, you know, there are, I think about a million folks serving in in armed services and they're doing expense reports too.
Speaker 1:Yep. Yeah.
Speaker 26:And you take, you know, some of America's most courageous people who were who were serving, sacrificing a lot to do this and then you say, you know what? I'm gonna make you do hours of expensive horse.
Speaker 1:I I have I've been on a nuclear submarine Yeah. For years. And I was like, what was that like? Yeah. And he was like, a lot of paperwork.
Speaker 22:Lot of paperwork.
Speaker 1:And I was like, I can't believe you're I'm insane. 30,000 leagues in the sea doing paperwork. But he was like, yeah, that was my Don't get
Speaker 17:me wrong. Like, it's it's
Speaker 22:like It's important work.
Speaker 17:You should explain why. Yeah. That's like
Speaker 26:Actually, like, it would be great if a lot more of the work was to, you know Yeah. Defending the country Yeah. Going in in the VA, serving our veterans Yeah. Whatever it may be. So I I think that there's like a a human and moral side to it.
Speaker 26:Yeah. But but to the other question you asked of working with the government, in in some ways it's this was all like pretty organic. I mean, was a tweet Yeah. Put out I think in February
Speaker 1:Yeah.
Speaker 26:That, you know, I I think there was 4,700,000 credit cards
Speaker 1:Yep.
Speaker 26:Right. Issued for I I think there's about half the number of federal employees and people who are running, where are all these extra cards?
Speaker 1:Yeah. Yeah.
Speaker 26:And so a lot of cards were turned off and and at the time, you know, we reached out to someone who was a former customer, put us in touch. So it's early. Involved in the same process as as everyone and I think no matter who does it, I just think that the way I would almost describe it is people would find it ludicrous if our air force is flying with propeller planes in a jet Yeah. And yet that's kind of what's happening with Yeah. With the tools we use to, you know, make expenses, do our accounting, make sure attestation is clear.
Speaker 26:These are old disparate systems that Yep. You know, I I think private industry has has has adopted tools like Ramp leading the forefront of Yeah. It's integrated. Your expense policy drives what you can buy. It does your Yeah.
Speaker 26:Expense report, your accounting. And so however it it goes, I just think countries are gonna be a lot better off using modern technology.
Speaker 1:Great.
Speaker 3:Yeah. Mean, the the the thing that I thought was fascinating is they couldn't actually turn extra cards off.
Speaker 17:It was a dollar.
Speaker 3:A dollar limit. Was like whatever. Which is like system.
Speaker 26:Well, and and and even speaking of that, like, you know, you'd think, okay, let's go and turn a limit, you know, to 0 or $1 or whatever you have. I've heard stories of individual people, because of the way the portal was designed, spent four days going one by
Speaker 1:one No.
Speaker 17:It's not as because no one has done something like this.
Speaker 26:But it's like when when you look into Wow. These things that you think should be trivial are Yeah. Are very hard when you have systems like this. Yeah.
Speaker 1:It's amazing. Well, we'll let you go and we'll Yeah. Bring this This is great. Co founder
Speaker 3:You better.
Speaker 1:To dig deeper into the bowels of the financial system. Oh, my god. Welcome to the stream, Kareem. First time. First time.
Speaker 2:Manass. So?
Speaker 1:Yes. Good to
Speaker 3:see you. What's going on?
Speaker 1:Good to have Welcome. Welcome.
Speaker 23:We're getting to see supplies this
Speaker 1:Friday. Yes. Do. Want one? So we yeah.
Speaker 1:So obviously, we're talking about getting the entire government on ramp and then getting every country in the Western world on on ramp one at a time. Have I was talking to the Andoril guys about some of the integrations that they have to do into, like, these antiquated systems just to do communications because they want their drones to play into the modern systems. Have you started even digging into, like, what the technical standards are that are running? We we we've talked to folks about, like, the Swift system Yeah. Yeah.
Speaker 1:Yeah. And, you know, Stablecoins, but then there's also, like, the overnight payments thing. Like, where do you even start with that? Is it a GPT query or do you start talking to people? Like how do you build your knowledge as a technical mind in how the government runs?
Speaker 1:Because I was telling Jordy I wanna talk about running the government on ramp more just because like I don't think most people know how expense reports work in the government. Like, I don't think it makes sense. Yeah. So, yeah. What what was your journey to kind of digging into this and seeing, like, is it technically feasible?
Speaker 23:Yeah. Yeah. Yeah. I mean, it was it was crazy. Even yesterday, was doing a story of someone who spent three years with the government
Speaker 1:Yeah.
Speaker 23:And filed an expense report on their first week Okay. And only got the check back after they left.
Speaker 3:So way.
Speaker 1:Year to less. It's kinda crazy.
Speaker 3:Mean, think about it in in in the you're at a company and you file an expense report
Speaker 1:Yeah.
Speaker 3:And the company says, yeah, we're gonna pay you back for this, but you don't get it for three years. They're you would be yeah. Yeah. Yeah. Interest, but but also it's just offensive.
Speaker 3:Right? Yeah. It's not it's not nice to an employee who's, you know, you know, to to basically take take their their funds for such an egregious amount of time.
Speaker 1:So
Speaker 23:It's kinda crazy. It's basically companies and and government in some cases using their employees as a
Speaker 27:bank. Yeah.
Speaker 23:Like, that's kinda what a bank is supposed to do, like,
Speaker 3:front Yeah. Yeah.
Speaker 23:Front the cash so they could do your business and eventually you pay them back. Yeah. And, like to your point on the the complexity of those systems, I mean, one of the first thing I did when we started on ramp is try to understand how ACH works.
Speaker 1:True. Totally.
Speaker 23:And it is like absolutely mind blowing.
Speaker 1:Yeah.
Speaker 23:It really boils down to very basic CSV files. Excel files almost
Speaker 1:Yeah.
Speaker 23:That every single entity puts together, constructs. Yeah. And then at the end of the day, they get shared through some system and there's some computer sitting somewhere that's reconciling these files together. Yeah. That's why it takes so long to send money.
Speaker 23:It's like all these systems run-in batch, take a full day to get access to their to get access to information and be able to reconcile it. And you got about eight of those. Right? Yeah. You got one for, like, bank to bank payments.
Speaker 23:You got some for
Speaker 3:Yep.
Speaker 23:I mean, really the way people used to file expenses is they used to submit their credit card statement that Yeah. Doesn't connect at all to the receipts that they have in their their inbox. And then you have to wait an extra day before you find out that you actually forgot to submit the receipt that you wanted to submit for the the restaurant that you were at. But, I mean, I think if you connect these systems, obviously Yeah. You can move a lot faster.
Speaker 23:Talking to people in the government, I don't think they even know what they're supposed to do. So a lot of them just end up either not filing expenses or they get a card with no controls and they're lucky if they have it and they share with their friends and
Speaker 3:Yeah.
Speaker 23:Who knows what what the money is being spent on. But, yeah, one step at a time.
Speaker 1:Do you know much about, like, the counterparty Obviously, Palantir pioneered, like, the forward deployed engineer. Yeah. Because, well, Shyam Sankar was telling us the first time they sold Palantir for on prem installation, the team on the other side, a software developer, tech person, IT person, who worked for the government, installed Palantir on a box with like four gigs of RAM and they needed 16. Yeah.
Speaker 21:Something like that.
Speaker 1:And we've seen with Doge, folks like Luke Feritore are going in. You could see Luke Feritore in another world like working at RAMP or working at Palantir or working at any of the the high growth, high very strong engineering culture companies. Do you think that there's a need for America's best and brightest to kind of do a tour of duty as maybe just an insane IMO level software developer in the government, even if that takes away from your pipeline, I'm sure?
Speaker 23:A %. Yeah. That would be great. I mean, is a company that we all have a stake in.
Speaker 1:Yeah. Yes. The
Speaker 23:equivalent would be
Speaker 1:Yeah. That's a good point.
Speaker 23:Like, we're like, we're all American. Right?
Speaker 21:Yeah.
Speaker 23:Equity stake in
Speaker 1:Yeah. We do. Government.
Speaker 23:Like, we want the government to run well. Yeah. We all win if we we're we're operating more efficiently, we're making better decisions, and we all pay less in taxes.
Speaker 3:Yeah. Yeah. It's it's No. It's it's funny. Efficient spending, which, you know, Ramp is focused on non non payroll spend.
Speaker 3:Right? And so payroll spend gets political really quickly. Yep. Right? We talked about this with where yeah.
Speaker 3:If you're on the government's payroll, you don't most people don't wanna be off it. Right? Like they have a job, they've maybe been doing it a long time. But non payroll spend should be the least political thing ever.
Speaker 1:Right?
Speaker 3:It should be like, we should spend as little as possible, and the dollars that we do spend should every single one down to the penny should be spent efficiently. What what what are your other kind of reactions? How how much are you spending time here at the event versus, you know, meetings around town?
Speaker 23:Yeah. I mean, the the the event is taking another form this year. Seems it's a lot bigger than it used to be and level of excitement is is incredible. I think it's the first time that I felt that government is really trying hard to modernize, build bridges with
Speaker 1:Mhmm.
Speaker 23:Companies in Silicon Valley, New York and and other places. So I I think I think people are on the same page that, yes, we we need to spend less. We do need to introduce technology to to help us. And look, with with a lot of the advancements in AI, some of the problems that seem too intractable, now you could just just throw all your massive database into an LLM and Yeah. You can wrangle it that way.
Speaker 23:Yeah. We we got better tools now to to do the work. A lot of people are excited about it, so we'll we'll see what we can do. I mean, frankly There
Speaker 1:are lot of founders that are here thinking about very specific regulation or deregulation. Obviously, like nuclear energy is the biggest one that is very concrete. May speed up the time to get a new reactor design approved. Is there anything like that in finance? What give us some of the history?
Speaker 1:What's the good and what's the bad?
Speaker 23:I mean, it's everywhere. Like, money transmitter licenses Sure. Is the most basic one. Today, to move money around
Speaker 3:Yep.
Speaker 23:You need a license.
Speaker 1:But Yep.
Speaker 23:You not only need a license an American license, you need a license in every single state. Yeah. Which is kinda crazy.
Speaker 1:Yeah.
Speaker 23:Yeah. Because they're all looking at these same things and making sure that you're abiding by the rules. Like the rules are quite similar. But it's kinda crazy. I I remember having to sit down in a room with Chor and I on our team who who helped us do a lot of that work and there was a stack of papers this thick and I just had to sign one at a time.
Speaker 3:No way.
Speaker 23:It's like I read the first ones, like I know what this is about. I read the second one, they're they're very similar. And at some point, I'm just like
Speaker 3:You're like, I'm already all in. Yeah.
Speaker 23:Would trap
Speaker 1:me in a
Speaker 23:room, there's a cup of coffee, he's like, go, sign.
Speaker 3:Yeah. How how has it been when you when you look at sort of incumbent financial services companies, a lot of them have had, I'm I'm imagining, a large presence in Washington for a long time. Yeah. You imagine Ramp ends up with with a, you know, a a fairly big office here at some point? How do you how do you look at that?
Speaker 3:It I I imagine you've been taking trips here. I know you've been coming Valley, but is this a place that you you and the team expect to be a lot more?
Speaker 23:We we we love to. I mean, it'd be great to to put our best resources forward and and try to help. But I honestly think about it the same way I thought about a lot of the products that we built.
Speaker 6:I think it win
Speaker 23:if people spend as little time as possible in them. Yeah. And more of the work is being automated. I think part of the the problem that you have in and around Washington right now is like the incentives are so misaligned that you have incentives to, like, drag projects on. Cost massive amounts of money.
Speaker 23:Yeah. Any level of change that you wanna do is also, another massive bill. And, like, our our hope is to just build great technology. And, hopefully, if we do that if we do that well,
Speaker 13:we don't need
Speaker 23:massive sort like time and and and people investments to get them to work.
Speaker 3:Like Yeah.
Speaker 23:Technology is just doing their job and
Speaker 1:No.
Speaker 3:I I was talking to Eric too. The the thing that stands out to me is is Ramp is playing in decades. And there's a lot of founders here that are like, if I don't get a program of record in the next two years, like, I'm done.
Speaker 1:Yeah.
Speaker 3:And I think Ramp's position is being able to think long term. There's very pressing problems that we have right now, you know, spending being being one of the biggest. But how do you kind of zoom out and be like, you know, you know, in in the fullness of time, imagine Ramp and and the government will have a, you know, very meaningful partnership. And and it's about finding the kind of right ways to do it in the beginning without understanding that you have tens of thousands of of happy customers.
Speaker 1:And you
Speaker 3:gotta make sure that they're, like, you know, continuing to get resources and attention.
Speaker 1:So Well, that's fantastic. We'll let you get back to the Thank
Speaker 3:you so much for coming on.
Speaker 1:Thanks for coming
Speaker 3:on again soon. Definitely. We'll have Ara on probably next week at this point.
Speaker 1:Oh, yeah. Great.
Speaker 3:The rotation.
Speaker 1:And let's bring in Yes. Josh You got a minute? Come on down.
Speaker 3:Josh Look
Speaker 10:at look
Speaker 3:at that.
Speaker 12:From one a.
Speaker 3:Yeah. So, Simon, we ended up on the same flight.
Speaker 1:Yeah. It was fantastic.
Speaker 16:Simon My
Speaker 1:Papa Rock didn't plan this going on.
Speaker 3:Simon spotted us Yeah. Because I had a huge ramp logo on my
Speaker 16:outstanding.
Speaker 1:It's fantastic.
Speaker 3:Yeah. It's great to see you.
Speaker 16:Yeah. Great to see you too. Where'd you get that though?
Speaker 3:Oh, we
Speaker 1:made it. Yeah. This is a one of one right now, but we will be multiplying them You'll get
Speaker 3:our people. We'll talk to your people. Yeah.
Speaker 1:We'll we'll every guest will will get one for sure.
Speaker 16:That's the thing people understand. The LA streetwear scene
Speaker 1:Yes.
Speaker 16:Like so far away from tech Yes. That you can get super high quality stuff very well made.
Speaker 1:Totally. Totally.
Speaker 16:So I saw that and I was just like Yeah. Just perfect. Yeah. Yeah.
Speaker 1:Yeah. That's awesome. So, yeah, how's the conference been? You're you're probably one of the few tech founders here with real DC experience. Yeah.
Speaker 1:When did you first go to DC? When did you first get into politics? Take me through your journey a little bit.
Speaker 16:Yeah. So, you know, I started my career doing expeditionary stuff as a military officer. Yep. So two tours in Iraq. Wow.
Speaker 16:One my first tour, was at a unit down in Virginia, in Southern Virginia.
Speaker 1:Yep.
Speaker 16:And then my second, I came up here to a to a to an intelligence agency Yep. Here in DC. Yep. And honestly, it was it was '20 I think I showed up in like 2011 Mhmm. And it was like peak Obama.
Speaker 16:And as a military officer in DC, you kinda you were definitely the help. Yeah. You know, you'd like go out to a bar and like girls would be like, oh, what do you do? Oh, you're not some like staff director on the hall like, you know, thanks.
Speaker 1:Get out of here.
Speaker 8:Yeah. But it
Speaker 1:worked out. You have a family now.
Speaker 16:It worked out.
Speaker 1:Someone liked you. It's true. It's great.
Speaker 16:It's true. No, was good. So did that, got out, went to Silicon Valley. Yep. Then, yeah, I got a phone call from an old boss after President Trump won election the first time.
Speaker 16:Yep. During the transition, he's like, come help me out on transition, White House transition.
Speaker 1:Sure.
Speaker 16:And I came and just didn't leave. He asked me to stay. I was a National Security Council staffer in the White House for four years.
Speaker 1:Fantastic. What were the top what were the top issues then and how have they evolved?
Speaker 16:Yeah. So I think the biggest issue in the unclassified space was telecom technology. This is Huawei?
Speaker 1:I assume
Speaker 16:five Yeah. Five g. This was like one of the big issues that I, you know, owned for Yeah.
Speaker 3:Four years.
Speaker 16:So, yeah, think of it like if you were in the middle of the Cold War to go to the Russians and be like, hey, can you
Speaker 9:build out the electrical grid?
Speaker 1:Yeah. Yeah. Yeah. Oh, of
Speaker 10:course. My friend electrical grid for you.
Speaker 1:That's a fantastic Russian
Speaker 10:Don't worry.
Speaker 16:Yeah. And, you know, it's very clear that like and there's there's Wall Street Journal call journal articles about this. Yeah. Like the Chinese in Africa with Huawei, they just use it as a spying tool.
Speaker 1:Yeah. Yeah.
Speaker 16:Yeah. So it's like, why would we have those people build the American telecom infrastructure? Yeah. Why would we have them build the telecom infrastructure of our Five Eyes partner? Yeah.
Speaker 16:Like London, Australia, other places. But, yeah, I think that was probably the biggest
Speaker 1:And where do where do we stand today with five g? I see a five g icon on my phone sometimes. Boom. Is it real five g or are we behind?
Speaker 16:So interesting you should say that.
Speaker 1:Yeah.
Speaker 16:You know, a bunch of the companies kind of raced to brand Yeah. Five g as like here Yeah.
Speaker 1:When actually the It wasn't quite there. Right? Exactly.
Speaker 16:Yeah. So I think a lot of stuff's been rolled out Okay. Or being rolled out. Okay. You know, the big challenge is that America's a big land mass.
Speaker 1:Yeah. Yeah. Totally.
Speaker 16:Right? So I'm guessing we're probably mid roll out. You'd have to talk
Speaker 1:to Yeah. Yeah.
Speaker 16:Actually, guys should have Brandon Carr, the FCC chair.
Speaker 1:Oh, I met him a few times. Yeah. That'd be great.
Speaker 16:Exactly. He's great. Yeah. So he'd be able to tell you like what percentage Yeah. If you put a gun on my head and you're like Yeah.
Speaker 2:Take a guess.
Speaker 16:I'd say like 65% Sure. Something. Because it's race.
Speaker 1:Yeah. So the theme's re industrialization, but in terms of what you do Yeah. What are the more interesting sub themes going on? Yeah. I'm sure you're excited about reshoring manufacturing, but there's other stuff top of mind.
Speaker 16:Yeah. Spain, power power outage and explosion of Northrop Grumman missile, you know, manufacturing and testing facility
Speaker 1:Yeah.
Speaker 16:In the past week. Okay. So like there's this
Speaker 1:Oh, yeah. You think that was an attack?
Speaker 16:Here's the thing. Do I think it's an attack? I'd say it's
Speaker 3:like hat. Yeah.
Speaker 16:Yeah. Hat. Here's the problem.
Speaker 1:Yeah. No.
Speaker 16:I You look at the top five, like, you you list out like the top 10 facilities that The United States and our allies use to manufacture weapons.
Speaker 1:Yeah.
Speaker 16:Half of them have had catastrophic events in the past two years. Yeah. So I don't know, does that seem like a coincidence to you? Yeah. In the used to say like, once is a tragedy, twice is a coincidence.
Speaker 16:Yeah. Three times is enemy action.
Speaker 1:Interesting.
Speaker 16:The number's big.
Speaker 1:Yeah.
Speaker 16:And yeah, they're like, oh, these things go boom.
Speaker 1:Yeah.
Speaker 16:But like, let me tell you, like, it is ten plus years old, unclassified. You have cyber actors going out and modifying safety systems.
Speaker 6:Yep.
Speaker 16:To tell operators that things are operating within the right parameters
Speaker 1:Yep.
Speaker 16:So that they blow up.
Speaker 3:Yep. Yeah. It's well it's well established that Western, you know, groups have have tried to meddle with bronze uranium enrichment.
Speaker 10:Exactly.
Speaker 3:Why would they why would the adversaries not wanna do the same thing back? It's just
Speaker 16:This is what is what warfare looks like. Yep. And the fact that we don't know, and I'm not saying it
Speaker 17:is or it isn't.
Speaker 16:Yep. What I will say is every single person out there building these types of facilities today or running them now, like needs to have the capacity to monitor them twenty four seven. Yeah. Otherwise, you're not gonna know. And so it's like, what are you actually building for?
Speaker 16:Yeah. Like, you're building so that on the day that things actually kick off, you'll finally figure out if you built a defense company or not, if it survives.
Speaker 1:I I wanna talk a little bit more about the shape of your business today. I embarrassed myself. As a podcaster, you know, we try to be experts in everything, but I completely botched the understanding of your company. And so how much of it is consulting driven? How much of it is product driven?
Speaker 1:Yeah. How much of it is SBIR, program of record? Yep. The the stuff we hear in defense tech.
Speaker 6:Yep.
Speaker 1:Give us a rundown of where you are today and where you wanna go.
Speaker 16:Zero consulting, zero government
Speaker 12:Okay.
Speaker 16:% private sector.
Speaker 1:Interesting.
Speaker 16:It's a SaaS offering.
Speaker 1:Okay.
Speaker 16:We come in and protect an industrial facility against cyber attacks.
Speaker 1:Okay.
Speaker 16:So we do that by installing sensors Sure. Facility. Okay. And then we've got a software layer that's collecting essentially anything that generates data.
Speaker 1:Got
Speaker 16:it. These things are already generating data on Yeah. Like a big like for patterns.
Speaker 3:Right?
Speaker 16:We're looking for patterns. We're looking for the absence of certain things.
Speaker 1:Sure.
Speaker 16:We're seeing like, hey, what process is running in this place?
Speaker 1:Yeah.
Speaker 16:What's talking to what? Yep. And we're basically the first company to actually take every single thing that's generating data on an industrial infrastructure
Speaker 1:Yep.
Speaker 16:And take that information and look for threat.
Speaker 1:Yeah. We we we talked to the founder of ChainGuard looking at maybe supply chain attacks.
Speaker 3:Yeah. Yeah.
Speaker 1:Is that something that's completely complementary or in some ways competitive
Speaker 16:trying to do a deal with them. Right?
Speaker 1:Okay. Cool. Yeah. We're live, by the But we'd love to see it. We love we love
Speaker 3:the companies working together. I I
Speaker 16:have co founders meeting with them, like, right now.
Speaker 1:Fantastic. So, hey, guys.
Speaker 3:Switching switching gears a little bit. Yeah. How important is it that Hill and Valley is bipartisan? That's been something that, you know, we're we're Deleon and and Christian
Speaker 1:have been typically isn't No. Not a really bipartisan. No. But but
Speaker 3:in the context of if you're a serious technology company and you wanna be around crushing it the next four years and the four years after that Yeah. And then the ten years after that. Right? Totally right. I I I feel like and and you, I'm sure, got to experience the sort of back and forth nature of Washington.
Speaker 3:But Yeah. When it comes to, you know, talk about how how you think Hill and Valley can kind of evolve from here from your perspective if somebody spent so much time in Washington.
Speaker 16:Yeah. Here's the reality is that, obviously, like I spent four years, first day to last day in the Trump in the first Trump admin
Speaker 1:Mhmm.
Speaker 16:And was never gonna be befriended by people on the left. Just because of that. They didn't have to know me.
Speaker 1:Yeah.
Speaker 16:Yeah. All they had to know was that piece of information Yeah. And like I was just never gonna have an opportunity to even talk to them.
Speaker 1:Sure.
Speaker 16:I do have friends. I wouldn't dare mention who they are that are on the other side of the aisle. I wouldn't wanna, you know, wouldn't wanna put them in a in a a spot. Crosshairs. Yeah.
Speaker 16:Exactly. But like there's good people on both sides. Yeah. And I've done a lot of good work with folks, you know, in the in the Democrat party. And so I think that you wanna find people that wanna solve the problem that you're solving.
Speaker 1:Yeah.
Speaker 16:Right? And that can be any number of reasons. It's because you're gonna put a factory in their district. It's because they care about an issue, because they're on a subcommittee. And like you hope, and I would encourage folks to just look for those folks.
Speaker 16:On both sides. Obviously, you know, part of it is just like the brand that I've built coming out of the place that I came out. You know, I'm talking to folks that I know, and that's what my feed Yeah. Looks like for that reason. Yep.
Speaker 16:But, yeah. I mean, it's part of it is just that's, you know, that's
Speaker 1:how I So Yeah. You I mean, you mentioned you're entirely b to b. No Yeah. B to g Yeah. Yet.
Speaker 1:Or are we properly resourced on the cyber security Definitely. Government? Like Huge fight. Maybe because, you know, we know about Palantir. Know about some I mean, Microsoft sells to the government, but Yeah.
Speaker 1:Is there cybersecurity champion that sells to the government right now? Who who who should we be looking to?
Speaker 16:Yeah. Not really. I mean, some of the solutions in this space are okay. They're not great. Sure.
Speaker 16:You buy them and then you have to like put a bunch of people on top of
Speaker 1:them Sure. Sure. Sure.
Speaker 16:But yeah, look, we're in some talks with some interesting folks. I'm that we'll be able to announce something soon
Speaker 17:Sure. With,
Speaker 16:you know, some of the folks here in this space about building secure facilities Yeah. Secure factories. And I just think that that's probably the most critical thing for us to think about from a security perspective, because I want us to be able to sustain operations on day one or day two or day 10 or day 50 of a conflict.
Speaker 3:Yeah.
Speaker 16:Because that's gonna make it more likely that we're gonna be able to stay in the fight and win. Yep. And if we can't, like, it's a huge problem.
Speaker 1:Yep. Yep. That makes sense. Well, should we let him know We can another question.
Speaker 3:It's been amazing.
Speaker 1:It's fantastic.
Speaker 3:Thanks for jumping on.
Speaker 1:See you
Speaker 2:up there.
Speaker 3:See you.
Speaker 10:I'll see
Speaker 1:you back
Speaker 10:on the Yeah.
Speaker 1:Bill, come on. Give us an update. You haven't been on the show in weeks. It's been far too long.
Speaker 8:Gentlemen.
Speaker 1:We got Phil from Durack in the studio in the Temple Of Technology in the capital
Speaker 3:of Great great tie, by the way. That a What's up? No. No. I thought it was a unicorn.
Speaker 19:Actually, is Moogle Conquerors. Oh. Was recently in London. Okay. Took a trip down Savile Row, walked into breaks and said, you know what?
Speaker 19:That six of six, you know Yes. Only six made tie?
Speaker 1:You gotta have one. Gotta have one. You gotta meet the other five guys who wear the same tie. So true.
Speaker 10:I was getting thinking about this.
Speaker 3:Let's get a group chat.
Speaker 1:Let's get a
Speaker 3:group chat.
Speaker 19:Yeah. Bateman style,
Speaker 1:like Yep. You know,
Speaker 19:let's see Bateman's card.
Speaker 1:Yep.
Speaker 19:Popular in the nineties. I'm thinking we're gonna be bringing back ties.
Speaker 1:I I love it. Let's see Bateman's. We've talked about your business before. It feels like mostly b to b selling into defense tech companies, selling into hard tech companies. What is top of mind for you here?
Speaker 1:Obviously, it's a great event. Good to meet people. But is there is there a particular agenda item that you think is important to highlight at Hill and Valley this year?
Speaker 19:Absolutely. So, yes. We sell into aerospace and defense Yep. Automotive, ag and construction Yep. Maritime recently.
Speaker 19:Yep. To be announced Sure. Soon, but closed the maritime deal, is very exciting.
Speaker 1:Congratulations. There
Speaker 19:is a very, very critical lack of discussion around the American worker.
Speaker 1:Sure.
Speaker 19:You know, we the average age of the American manufacturer is 55.
Speaker 1:In the
Speaker 19:next five, ten years, we're losing a lot of those folks. With that, critical tribal knowledge.
Speaker 1:Yes.
Speaker 19:Yeah. That without writing down, institutionalizing, capturing in some way
Speaker 1:Mhmm.
Speaker 19:We are going to see an immense loss of our ability as a nation to produce.
Speaker 8:Yes.
Speaker 19:Yeah. And so, there you know, I've said this before. I'll say it again. You know, we have spent billions of dollars on environmental conservation. We have spent $0 on tribal knowledge conservation of the This is something I'm advocating
Speaker 17:for from a policy perspective.
Speaker 1:You have a hot take on AI not disrupting your business or not really disrupting the, I I guess, like the American worker. Can you unpack that a little bit and take me through how you see AI changing the way we design and manufacture Yep. Things in America?
Speaker 19:So little bit of a complex perspective I guess. When you look at what LLMs are useful for, generally. Right? People will throw them at generative tasks. But when you look at what LMs have been trained on
Speaker 3:Yeah.
Speaker 1:It's more broadly like the Internet.
Speaker 17:Yeah. The Internet, all
Speaker 19:the forums, and all of this context. Yeah. And context is key.
Speaker 3:Yeah. Right?
Speaker 19:And what you do not have in those LLMs is the context of what you need made Mhmm. The specs of it, and how to actually do it. Because, kinda like what I mentioned earlier, it's tribal knowledge. And Yeah. By that virtue, it means it wasn't written down anywhere.
Speaker 1:Even if you, like, even if it was written down, your scan is probably private. It's not just out on the Internet Yeah. Not callable, like
Speaker 10:Yep.
Speaker 1:You know, some sort of private database. Interesting.
Speaker 19:Exactly. And so, while LMs are useful as a technology, you need to put them in a position to aggregate, contextualize, and then leverage Yep. Critical information that is not, you know, in a LLM that OpenAI might have been able to train on. So, you know, I think if you were ever going to see AI actually disrupt manufacturing Yeah. You're going to have it you're gonna have to have a way to embed it within the workflow and infrastructure of an existing manufacturing facility and make sure that you are able to well integrate it into the flow of folks who are not super tech savvy.
Speaker 16:That's Where
Speaker 1:are you bullish in terms of AI and manufacturing? I can imagine you you we've seen those reports that like Yep. Oh, I I emailed a Chinese manufacturer, a European manufacturer, and an American manufacturer, and Americans and the Europeans didn't even get back to me for a week. That feels like, at the very least, you could just have a chatbot that takes your order and gives you some data. What what's about
Speaker 19:That specific problem is the problem of quoting. Yeah. Complex, not really AI LLME. People have been doing quoting software for a while. Yeah.
Speaker 19:It's really computational geometry intensive. Generally pretty complex. And so companies like, you know, Paperless Parts will or or Xometry will, like, help you with this. Yeah. What we're describing there isn't really like an AI problem.
Speaker 19:It's a, like, work culture problem, generally. Yeah. Like, we as Americans work very, very hard.
Speaker 6:Yep.
Speaker 19:But the the Chinese have the underdog mentality. Mhmm. Yeah. They've been hungry for thirty years. Yep.
Speaker 19:They've on the come up. You know, we what what we're what we're running into is that 1991 Yeah. Was a 1776 moment for China. You know, for,
Speaker 1:you know What specifically in 1990 Momentum.
Speaker 19:So basically for fifty, sixty years from 1945 to 1991, we were in the Cold War.
Speaker 1:Yeah.
Speaker 19:Right? And so we have this, you know, global battle
Speaker 3:of Yeah.
Speaker 19:You know, the West versus Yeah. Communism.
Speaker 1:But is 91 different than '89 follow the Berlin Wall? Why '91?
Speaker 19:I say '91 generally. Okay. Either one is just sort of like that marker of what we basically said. The West is one. Yep.
Speaker 19:Global American, you know, hegemony has one. You know, we can sort of like rest in our laurels. Yeah.
Speaker 1:Very similar to Beginning of the Clinton era.
Speaker 19:Yeah. Exactly. You know, NAFTA and all that stuff.
Speaker 1:We
Speaker 19:basically said, let's pick a couple of nations to offshore our production to. Globalism is gonna win. Let's pick China, Japan, Korea, offshore our production, you know, fund all that infrastructure and then, you know, just trust they'll have our best interest in mind. Very much like this industrial colonialism, like our own version of it. Yeah.
Speaker 19:So if you look at historically, you know, you have the global power do that, set up colonies and then get very, you know, comfortable. And think, you know, the it's the end of history. We've won. What's happening with China is exactly what happened in 1776 now, where we, you know, have basically seen China say, you know what? You know, Japan and Korea, you wanna play with The US?
Speaker 19:Fine. You know, just like Australia and Canada, you know, pay ties to the vassal state or to the to the to the mothership? Fine. Right? But China is now saying, you know what?
Speaker 19:We're not gonna play ball. We are gonna go, you know, seventeen seventy six. We are on the come up. Mhmm. So there's that underdog mentality of one generation, two generations of thirty years of that baked into the culture of the Chinese manufacturer.
Speaker 3:Mhmm. That's we're fighting against. Do you think there's enough conversation at Hill and Valley around just labor in general? Because I imagine, like, part of your thinking is, like, who's gonna be using my product in twenty years? Yep.
Speaker 3:Right? Like, that's a big question. And it and it's one that's interesting because it actually does feel like there's less direct ways for private companies to develop the next labor force for manufacturing. Right? It's like, yeah, individual companies can train people.
Speaker 3:Yep. You can hire try to, you know, poach people from legacy firms. But it does feel like an area that the government can have a a tremendous impact. Are you hearing conversation so far throughout the event on that? Or or it should
Speaker 19:Certainly a little bit, but I would like to see more. Yeah. A lot of technology brings the top up. Yeah. And so you see this distribution of technology at manufacturing companies.
Speaker 19:This is always, you know, always been the case. And so the companies with the most money, all the enterprises, the Lockheed's, the Toyotas, the Ford's, you know, all the big guys can just dump money on the fanciest, schmanciest, you know, AILM stuff. But the key to saving the American industrial base isn't just making the top most, you know, wealthy companies have more and more advanced technologies and having like a 99%, one % split of that distribution technology. It's bringing the bottom up. Yeah.
Speaker 19:And so when you talk about like the labor base, what I'm starting to hear folks get is, you know, this is in something that I deeply agree with. We don't want cheap labor. Mhmm. Like we don't want bug man cheap labor. We want smart labor.
Speaker 1:Yeah.
Speaker 19:Yeah. And so that's why, you know, tools like us, tools like a bunch of other things out there are geared towards saying, hey, we are not just going to radically improve quality of life for the modern manufacturer. Mhmm. We're gonna build something that makes people want to go into this job because of how cool and modern it is. Like Yeah.
Speaker 19:You know, people love building software engineers love building tools for other software engineers.
Speaker 1:Yep.
Speaker 19:And there's this flywheel effect and positively reinforcing feedback loop of cool tool cool tool cool tool. When you start doing that for production, you end up having younger folks saying, that looks super cool. SpaceX has all these cool tools. That sounds awesome. Let me go work in that facility.
Speaker 19:And so
Speaker 1:government Yes. SpaceX is an interesting example. Yeah. Because didn't didn't their their warehouse management system like spin out as its independent company or something?
Speaker 19:No. Not exactly. It is Yeah. People have it is like very very common for like somebody to work in this like thousand plus
Speaker 24:Yeah.
Speaker 19:Software engineering org. They have this internal software they call Warp Speed.
Speaker 1:Okay.
Speaker 19:Warp Speed Warp Drive.
Speaker 1:Yeah. Sure.
Speaker 19:It is, you know, fairly sophisticated. Yeah. And you'll often have, like, somebody who was at SpaceX fairly early on that team say, I'm gonna do this and productionize it. Then they're spinning out. It's there's been like five
Speaker 1:or Yeah. There's been a couple of those guys. Okay.
Speaker 19:And then they're they're fine, but, you know.
Speaker 1:Yeah. Yep. Anyway, Jordy, any other questions?
Speaker 3:No. This has great.
Speaker 1:This has been great. Thank you so much for stopping You guys are fine me? If Aaron's out there, you wanna send him in or anyone Well,
Speaker 19:I think I just saw him.
Speaker 1:Let me grab Okay. Great. Yeah. Yeah. Grab him, because I think he was hanging out for a little bit, and we gotta bring him on.
Speaker 1:We got four more people, maybe five more people on the guest list. Ben is sweating. He needs a bathroom break. Should we take five? Can we go to can we go to a break?
Speaker 1:We are gonna take a five minute break, folks. Thank you for watching.
Speaker 20:Five minute break.
Speaker 3:We'll be
Speaker 1:back in five Have a good one. Well, we're live. GBPN. We just took a quick break, got another coffee.
Speaker 3:We are in the capital Of
Speaker 1:the capital.
Speaker 3:Of America today.
Speaker 1:This this room is the capital of the capital today.
Speaker 3:That's right. Today. That's right. It's the center
Speaker 12:AI pioneer American. Universe.
Speaker 1:We've been on the show before.
Speaker 3:Great to have
Speaker 1:you Camera was a little shakier last time, So I don't know how Oh, yeah.
Speaker 3:You were walking around your factory
Speaker 1:a little bit. Sorry. So you walk around the floor to simulate what it's like to be in the trenches. Yeah. There we go.
Speaker 1:But Just so everyone's familiar. Big what?
Speaker 3:Moment for you. You've been banging the reindustrialized drums for years. It's been good It's the theme of
Speaker 10:the
Speaker 3:entire event. Why don't we start with your reaction to Jensen's Yep. Speech earlier on high level AI, but then AI factories and Sure. And how you're thinking about that.
Speaker 28:I mean, it's amazing. Right? Like, he's obviously like, do a little holding.
Speaker 3:Alright. Yeah. Just as
Speaker 1:close as possible.
Speaker 28:Okay. There we go. No. It's it's it's amazing. Right?
Speaker 28:Like, you have the most powerful man in AI sitting up there talking about bringing American manufacturing back. Right? And like the role of AI converting electricity to now like tokens for for everything. Yeah. It's a really phenomenal way to kinda like wrap wrap the story Yeah.
Speaker 28:I think. And converting that into real outcomes, right Yeah. No matter what the industry is, with the focus on obviously like manufacturing. Right? Yeah.
Speaker 28:Like
Speaker 1:And then you've often said that AI is not a a one shot solution for manufacturing. Break that down.
Speaker 28:So alright. Yeah. When people get a chance to like go through the the transcript, watch him talk Yep. Or whatever. Right?
Speaker 28:Like, there are key things that he kinda mentions that you can pick up on. Right? Like, we can do this stuff in anything that has to do with like text and images today.
Speaker 1:Mhmm.
Speaker 28:Right? Like you might not wanna diagnose a disease because there's no room for error there.
Speaker 3:Yep.
Speaker 28:Yep. Manufacturing and like all all of his talking about like getting to physics faster.
Speaker 1:Mhmm.
Speaker 28:This is kinda like how we do these things eventually. Mhmm. Right? Like Yeah.
Speaker 21:It's a
Speaker 28:matter of computing accurate real time physics for something. Not just, you know, like a bottle falling, but like if I'm trying to design a mold Yep. Right, for like mass production, I need that thing to be five micron tolerant or better. Mhmm. And right now, you know, there's no way to do that Mhmm.
Speaker 28:With current architectures and models and stuff like that. This is why not black billed on it, but like the horizon is longer. That's Yeah.
Speaker 1:So a lot of work to do. Can you talk a little bit about some of the work you're doing with Reindustrialize? Yeah.
Speaker 28:So last year, you know, incredible show of force from this community. Right?
Speaker 1:Like It grew from like wait, was last year the first year? Yeah. Because it grew from like an idea to like a massive massive conference. Yep. What what give me the stats right there.
Speaker 28:So last year, we had about like 4,000 RSVPs and like 800 attended. Wow. That's a lot. And yeah, I mean it snowballed from like, wrote that techno industrial man manifesto. Yeah.
Speaker 1:Power hours.
Speaker 28:We threw together like two and a half months.
Speaker 1:Yeah.
Speaker 28:Yeah. And it was crazy. It just all came together magically, but you know, there's obviously
Speaker 1:a lot And so going back to Detroit For this one?
Speaker 8:Yes. Or DC?
Speaker 28:Yeah. So we're gonna be back in Detroit. Mhmm. We have an amazing benefactor
Speaker 1:Yes.
Speaker 28:Who, you know, was pretty impressed, I guess, by the first one.
Speaker 3:That's great.
Speaker 28:And they're giving us a brand new skyscraper that they just built.
Speaker 1:Fantastic. It
Speaker 28:has a beautiful
Speaker 3:I'd hit the size gong for that.
Speaker 28:Yeah. Beautiful beautiful convention center
Speaker 1:Yeah.
Speaker 28:Attached to it. And, yeah, it's gonna be it's gonna be wild. It'll be very
Speaker 1:high quality. More than 800 this time? What does it take
Speaker 12:to get in
Speaker 1:the off the guest list then? That's hard.
Speaker 28:Just just DM me.
Speaker 1:Okay. Yeah. Yeah.
Speaker 28:Yeah. But yeah, it'll it'll probably be around the same.
Speaker 1:And and is it a similar hill and valley mix, founders, politicians, or are there other folks? Is this a place where someone could go and just find a job or
Speaker 21:Yeah.
Speaker 1:Talent, everyone everything in between?
Speaker 28:This this is like a it's, you know, it's a good champagne problem to have because you want all these different facets from Yeah. Everywhere to be there. But at the same time, I think ultimately what we're gonna struggle with and and need to refine over the years when we do this is we want high quality decision makers there. Right? Because Yep.
Speaker 28:Like the whole community has to move forward somehow. Yep. So that might just be day one Yep. Eventually. And then day two, we can kind of go into like startups and like, you know, maybe a trade show kind of thing like So there's you know, it's all in motion.
Speaker 1:But Very cool.
Speaker 28:We'll we'll take all the feedback and
Speaker 1:When when is it? How can people learn more? Give us the plug. Is there a TBPN coupon code yet? If not, can we get one set up?
Speaker 28:Yes. We will have a TBPN coupon.
Speaker 1:Thank you. I wanna kick back on every sale. Happens.
Speaker 28:Gulfstream 50. Gulfstream It will be
Speaker 3:Yeah. Just send the jet. That's all. Yeah.
Speaker 28:July 16.
Speaker 1:Yeah. July 16. Detroit.
Speaker 3:Yeah. We're super excited for Re Industrialize.
Speaker 1:Yeah. We'll be out there.
Speaker 3:Yeah. How how where where do you think where do you what what do you think people are missing this week around Re Industrialize when you look at kind of like the guest lineup and everything like that? Are there areas We were talking to Phil. One area that I kind of identified as something that doesn't feel like it's a huge part of the conversation is labor. Yeah.
Speaker 3:Right? It's like who's going to Even if we're building automated factories Mhmm. We still, you know, need to upscale just due to how many people within manufacturing are retiring. Right? Yeah.
Speaker 1:Yeah. Education technology has always been hard.
Speaker 28:No. This It's it's insane. Right? Because Yeah. In Jensen's talk, right, like he was talking about trades.
Speaker 28:Elevating trades. Yeah. If we wanna be able to accelerate these things faster just because the gap has grown so large and we don't have time. Yeah. We don't have another twenty years to teach these people.
Speaker 28:Yeah. Right? So, yeah. That's kinda like where my company comes in. Right?
Speaker 28:Like Sure. We're trying to encode tribal tradecraft into technology. Sure. And then, maybe it doesn't take you twenty years to learn how to make a mold anymore. Right?
Speaker 10:It takes
Speaker 28:like a year. So Yeah.
Speaker 3:How how much people,
Speaker 1:you know, forklift operator, and pretty soon he's like, just CNC ing stuff. It's cool.
Speaker 3:So, yeah. How can you can you break down I'll I'll give you an example. I saw somebody take they were working on their irrigation in their backyard, seemingly the very complicated system that, like, one person had kind of designed a long time ago. They were able to take a picture of it, plug it into Grok or four o, and the the model was able able to spit out, like, an completely on point analysis of the situation.
Speaker 1:Everybody's about to put you in the truth zone. And and It's impossible.
Speaker 3:And and so so is that is that, you know, clearly for a simple consumer application, it works. Are we gonna see that in manufacturing in the same way where an individual might not have that? You're you're talking about ingraining tribal manufacturing knowledge into AI. How bullish are you on that? Or or what's the timeline?
Speaker 28:So again, just go back to the mental model of like, how much precision and accuracy do you need to accomplish the the end task. Right? So like, in manufacturing, there's some room for error depending on the process. So ultimately, I'm I'm super bullish on this. Right?
Speaker 3:Yeah.
Speaker 28:But factories have to be rebuilt literally like from the ground up with a software nervous system. Right? Mhmm. And like Yeah. AI will play a huge part, not in just the like the SG and A kind of stuff.
Speaker 28:Right?
Speaker 8:Like Yeah.
Speaker 28:Doing invoicing or whatever.
Speaker 1:Yeah.
Speaker 28:Get rid of that. The actual skill in coding is the thing that becomes this like weird, you know, physics driven deterministic model. Like, if you Yeah. Need to engineer something, that's a that's a really out of distribution problem. Yeah.
Speaker 28:Yeah. Right? Like, you need to understand the physics behind it. I mean, does a trades person? No.
Speaker 28:But like, they sit there and do it for twenty years. They've done it Yeah. 10,000 times. So like, their brain is a physics simulator. So it's just Yeah.
Speaker 28:Like, how close are we getting there, you know, with like each task as it gets more and more refined and like accurate, I think.
Speaker 1:Yeah. Fantastic. Well, we'll let you get back to it. Thanks so much for stopping by.
Speaker 3:Thank you, Barry. Excited for reindustrialize and Yeah. Good luck. Good good work on being ahead of a massive wave.
Speaker 1:For sure.
Speaker 10:For sure. Thank you, Barry.
Speaker 3:Awesome. Well, we have Sampreeti coming on from Navier.
Speaker 1:Aaron, would you mind grabbing her? Navia, we're talking boats, talking maritime.
Speaker 3:Roboticist. She was formerly at NASA. Okay. And she also was working on subcritical nuclear reactors at Fermilab.
Speaker 1:Fun fact, I filmed a two person podcast with Jason Carmen where Jason Carmen was on one of your boats. Welcome.
Speaker 3:Sit sit down. Sit down.
Speaker 1:Welcome. Here you go.
Speaker 3:Great to have you.
Speaker 1:I'd love to start with
Speaker 3:I was just reading off your bio. Absolutely cracked. MIT mechanical engineering, PhD.
Speaker 8:You're screwed in so you be
Speaker 1:as close as possible.
Speaker 3:Yeah. And you can grab the microphone. It's a little bit heavy, but you can hold it.
Speaker 27:Oh, okay. Great to
Speaker 1:have you on.
Speaker 8:This will
Speaker 3:be fantastic.
Speaker 1:How's Yeah.
Speaker 3:How's your Hill Hill And Valley been so far?
Speaker 27:It's been great. It's really incredible people.
Speaker 3:Is this your first one?
Speaker 27:This is my first one. Yeah.
Speaker 1:Yeah. Yeah. Yeah. Are you hoping to be a beneficiary of all, like, the momentum around shipbuilding broadly, or is this more just about meeting folks in Silicon Valley and The Hill as well?
Speaker 27:I think I think this is an incredible time, you know, to build hard things. Yeah. Because I mean, something that, you know, I feel like for years people were holding back and suddenly you see the momentum everywhere and you feel it here.
Speaker 3:Yeah. Yeah.
Speaker 27:You have done an incredible job. I I don't think I've, you know, been in any conference where you're seeing builders, policymakers, everyone coming together and just saying, let's build. Let's do it now. And it's it's awesome to see that energy.
Speaker 1:Speaking of building, what can you describe exactly what you're building? What design trade offs you made that put your product standing out from the pack?
Speaker 27:Right. So, you know, the the the foundation behind building Navier is building next generation maritime vessels. Mhmm. And, you know, when we are thinking of next generation marine vessels, you have to think about, like, you know, why why suddenly now. Right?
Speaker 27:So America is number 11 in maritime and, you know, very small number of vessels. China's putting out putting out thousands of them.
Speaker 1:Yep.
Speaker 27:So the goal is just not to think about, okay, how do we outnumber China? Mhmm. To really win, you have to out innovate China.
Speaker 2:Sure.
Speaker 1:Yeah.
Speaker 27:So that means, when you think of building marine vessels, what does out innovating mean? Mhmm. Means that how do you build vessels that are just not a little bit better, but a step function better? Mhmm. What that means is, not just automation, software, and all that.
Speaker 27:How do you reduce per unit mile? Right? Per unit payload cost of moving things on water.
Speaker 1:Yep. Yeah.
Speaker 27:The world moves. The whole world. Right?
Speaker 1:Yep. Yeah.
Speaker 27:It moves on the terms of, you know, what is the cost and speed Yep. At which goods and people move. Yep. If you tap into that economy, if you tap into that problem, suddenly you're controlling how the world economy moves. Market.
Speaker 1:And functionally, in terms of the actual design of the vehicle, is it a hydrofoil
Speaker 27:that's It's a electric hydrofoil.
Speaker 1:Electric hydrofoil.
Speaker 27:Yes. Mean So unpack The one that is out in the market is electric. Build more than just electric.
Speaker 1:Yeah. So, yeah, what were some of the design trade ups? What are the specs? And and and how do you pitch that to the eventual customer? Who is the customer?
Speaker 27:Well, so the focus, as I say, is to build a maritime company. When I started this company Yeah. We were amidst COVID, actually. Right? And, you know, no VC was interested in maritime, and there was no excitement around it.
Speaker 27:I'm just going around and saying Now, a possible. That's not venture backable. Yeah. And then, the the first application, when you think about put, you know, goods and people Mhmm. And you're thinking electric, the first application is moving people in in coastal cities.
Speaker 27:Mean, that's a good demonstration Yeah. Yeah. Of the use case, operational efficiency Yeah. And cost. Right?
Speaker 27:But this COVID, everybody is like,
Speaker 1:work from No traveling.
Speaker 27:Yeah. And no VC would believe that Yeah. People will ever ever take a go go to work
Speaker 1:across the bay for years.
Speaker 27:That no one remote work is forever. Right?
Speaker 1:Sure. Sure. Sure.
Speaker 27:Yeah. So to do that but for me, it was important, let's get the tech out. Mhmm. And let's get money to get the tech out.
Speaker 1:So what
Speaker 27:we did is that, well, you know what? The first problem we had, water doesn't have a brand. Let's build something
Speaker 1:Sure. Sure.
Speaker 27:Yeah. That gives that awe inspiring magic, you know, that emotion.
Speaker 1:Mhmm.
Speaker 27:Yeah. And put it out in the water, like you feel when you see a rocket. Yeah. Yeah. That's why we started with, like, this super cool, sexy, high-tech Navier thirty and thirty Pioneer edition.
Speaker 27:Yeah. And the initial customers and who backed us are, like, you know, tech entrepreneurs and whatnot. I mean, bought recreational boat buyers bought these boats. Yeah. Yeah.
Speaker 27:Then we also had like, know, hospitality so Sure. But now we have, you know the recreational part is a small segment. Sure. Our major customers are defense and Yeah. So we work with the, you know, our our federal systems.
Speaker 27:Our technology is with the US Navy vessels right How
Speaker 3:does the DOD think about maritime kind of fuel sources long term? Are are EVs a part of, like, how they're thinking? Or is it more traditional sort of fuel sources?
Speaker 27:It all depends on your use case. Right? Yeah. So EV, when you make it all electric board, it has certain use cases. So some Yeah.
Speaker 27:When you're thinking of low heat signature Yeah. That in kind of like noise and and there are certain applications where you're looking at electric all electric application. Yeah. But, you know, the other ones that you're really looking, I mean, what what is the process of a hydrofiling boat? Right?
Speaker 27:Forget electric or gas, like, to a conventional paddling hull, you're taking out the hydrodynamic drag. As a result, you're getting, like, three times longer the range. When you're thinking of long range Yeah. Cable platforms. So it's Yeah.
Speaker 27:You know, you're putting a payload that you don't want to be like Oh, it's bouncing around. Bouncing around. Yeah. You want a steady platform. So so far, you would need like large platform, gimbals, and whatnot.
Speaker 27:Right? Yep. So that's for payload, but also for crew. Because crew, you know, CTB, crew transfer vessels, people can get injured when you're always slamming against them.
Speaker 1:Yeah. Makes sense.
Speaker 27:They're kind of
Speaker 1:Last question? Or should we move on to Jared? I know he's waiting out there.
Speaker 3:No. I I'm just curious how like, talk about the react you know, what what it's like being in Washington, you know, today versus even a couple years ago. I I imagine the response has just been completely different in so many ways. It feels like, you know, you know, every every the ocean is becoming I think in a year it'll be overheated. Right now, seems like it's getting the right amount of investment.
Speaker 3:But
Speaker 27:It's it's 70% of the world, and I hope there are more and more maritime company. Mean, need to build, you And and, I mean, it's a huge economy. I mean, people are you know, all of these talks about jobs getting taken over and we want jobs. And I'm thinking, wow, we are going to unlock a whole new kind of economic opportunity. I mean, there will be so much jobs, so many things that will spin out and the secondary effects of it.
Speaker 27:That to me is exciting. I mean, there's a whole industrial revolution that will happen around maritime and I Amazing. Think it's awesome to be a part of it.
Speaker 3:Amazing. Amazing. Well, thank you so much for coming on the show.
Speaker 6:Thank you.
Speaker 1:We have recorded a stream from the boat.
Speaker 3:Yeah. Yeah.
Speaker 1:Jason already filmed on one. It was extremely cinematic.
Speaker 3:Yeah. We can be nice and stable.
Speaker 1:Yeah. Recording No. He actually was really stable. He was on the phone and we recorded the whole thing. Was amazing.
Speaker 1:Yeah.
Speaker 27:We did 20 degrees banking turn and the doesn't spill.
Speaker 1:That's amazing. That's amazing. If you if you don't mind, can you grab Jared? He's out there in the in the suit with the Marlboro pin, I think. But, yes.
Speaker 1:Fantastic. Jared, welcome to the
Speaker 3:Look at that.
Speaker 1:Well, it's
Speaker 3:normally in a racing jacket, but But you look fantastic in
Speaker 1:a time since last Hillen Valley or you throw on the suit every once in a while?
Speaker 9:I I I wore a tux at the inauguration.
Speaker 1:Okay. There we go. That's about it. That's great. There we go.
Speaker 1:Well, what's top of mind for you? I wanna hear about stable coins. I wanna hear about, the stuff that's less about reindustrialization and manufacturing, maybe more on the crypto side. What is, what's most interesting to you today?
Speaker 9:Yeah. So the crypto industry obviously showed out extremely heavy for Extremely heavy for the You
Speaker 3:can you
Speaker 7:can hold it.
Speaker 9:For the, incoming yeah. The current administration. So effectively there And
Speaker 1:like dollars donated. Lots of crazy stuff, but also lots lots of reasonable
Speaker 9:Yep. So, since then, we effectively have, a few pieces of legislation that Mhmm. Is going to be delivered. Yes. So there's currently two stable coin bills.
Speaker 9:One in the Congress and one in the Senate. In the House,
Speaker 1:one in
Speaker 9:the Senate. Yep. One is called Stable.
Speaker 18:That's the one in the House.
Speaker 9:Okay. And, Genius is the one in the Senate. Genius.
Speaker 3:So the
Speaker 9:main difference between the two Yes. Appears to be the treatment of non US issuers. Okay. Now, there's only one significant non US issuer.
Speaker 1:Is that finance?
Speaker 2:Tether. It's Tether.
Speaker 1:Tether. Okay.
Speaker 9:Yeah. So so Tether has roughly God, I'm I'm gonna butcher the number A lot. But I it's over a hundred and 50,000,000,000 issued. Yeah. Circle is number two.
Speaker 1:Isn't it the most profitable on a per employee basis? Something like that? Yeah. Mean, don't
Speaker 9:know how many people work on the Medallion Fund at Rentec,
Speaker 1:but Yeah.
Speaker 9:It's not that. Like, this has gotta be it. Yeah. They claim they've made over $20,000,000,000 in profit over the past two years.
Speaker 1:Wow.
Speaker 9:An absolute monster of a company.
Speaker 1:Yeah. It's crazy you can make I mean, Medallion Fund makes sense because they're doing such complex stuff, but stablecoin seems simple to me. I don't know. Maybe I'm underselling them. Need
Speaker 9:to talk to the If you're someone in a country like Nigeria
Speaker 1:Yeah.
Speaker 9:You have double digit inflation rates Yeah. Yeah. Your country desperately does not want you to be able to access US capital markets or even like Yep.
Speaker 1:You know
Speaker 9:things to hedge against inflation.
Speaker 3:Yep.
Speaker 9:You want dollars. Yep. And so the demand for dollars has been so strong that, you know, people all over the world go through a bunch of extremely complicated UI processes. Yeah. Know, they they use use
Speaker 3:a bunch of these swapping
Speaker 1:Yeah. Yeah. Who would possibly do this? Not an American consumer. Well, it doesn't matter.
Speaker 9:Yep. Yep. And it's like most stablecoins, from Tether issued on a blockchain called Tron.
Speaker 1:Okay. Those people
Speaker 9:here have probably never heard of Tron.
Speaker 1:Yeah.
Speaker 9:Yeah. So it's it's a very international user base. The pull of the market, you know, we talk product market fit. Product market fit of stablecoins is so insane. And the fact that there's a debate between, you know, the sections of the house on should we write legislation that potentially kneecaps Yeah.
Speaker 9:The one group that's doing the most to export the dollar abroad, I think is extremely interesting.
Speaker 1:Yes.
Speaker 9:Interesting. And this is on the heels of, you know, Circle's trying to IPO right now. Yep. Yeah. We saw that prospectus.
Speaker 9:So Yes. Compared to the 20,000,000,000 profit over the past few years, I believe the EBIT on Circle's sixty two billion dollar issuance was like 258,000,000.
Speaker 1:Yep. Yeah.
Speaker 3:People did not like the s one. It was not and and they their distribution costs are high due to the the Coinbase relationship, I But Yeah. But, yeah. That makes sense. It's like the the the t bill is arguably the bet America's greatest export.
Speaker 3:Right? Like, it's if you if you count the t bill into trade deficits, it's
Speaker 1:gonna be like a much
Speaker 3:very general story. But but, yeah, I think your your point on, hey, we're we're, you know, Tether, regardless of your opinion of them, is exporting the dollar and getting getting more people on ramp to the dollar, which does have does have some benefits.
Speaker 1:For sure.
Speaker 9:Yeah. So we'll see we'll see who ends up winning out in the reconciliation progress. I think enough people are gonna recognize that Tether's probably doing that good for The US.
Speaker 1:Sure. Sure. Yeah.
Speaker 9:My Genius will probably win out a little bit stable, but I mean, it's it's still the early days. We'll see.
Speaker 1:Who who on the hill are the biggest proponents of crypto? Who are the names the crypto founders need to be that
Speaker 3:guy? Who's the one politician with the laser eyes? Is he That's
Speaker 1:base Mike Lee?
Speaker 9:Yeah. Yeah. Mike Mike.
Speaker 1:That's his account.
Speaker 9:I basically,
Speaker 1:this is what he goes by online.
Speaker 9:Extremely based.
Speaker 1:Yes.
Speaker 9:Ted Cruz was one of the first guys to understand how Bitcoin mining can actually help secure, energy grids.
Speaker 1:Sure. Yeah.
Speaker 9:He was he was extremely early to that. Of course, Gillenbrand Lumness, in the House, French Hill, you know, the chair of the financial services committee.
Speaker 10:Yeah. These are
Speaker 9:all people you need to pay attention to. And then there's, know, a whole crop of of of new freshmen congressmen and senators. Richie Torres is extremely on the money he's not even, you know, on the right. So this is very much bipartisan issue.
Speaker 3:Yep. Every almost every single person has brought up Richie Torres today.
Speaker 1:Yeah. Lots of people. Lots of people like
Speaker 3:him.
Speaker 1:That's great. How much
Speaker 3:time have you been spending a lot of time in Washington the last few months?
Speaker 9:Oh, I've been spending a little bit of time in Washington. Look, so much money was given by so many different groups in crypto that there are a lot of us on the ground. So the people actually writing the language, working with the White House, that is extremely saturated. Where I have been spending a bit of my time is I'll meet with junior staffers, you know, I don't have any face to lose. So I'm happy to sit down with, you know, the lowest of the low.
Speaker 9:Everyone's actually really fantastic. But no, I'll go I'll go and I'll I'll make sure that everyone around a certain elected official knows at least what what are the the range of opinions that they Yeah. Should probably have. I'm not gonna say, hey, you should think this, but it's, you know, these are the arguments for one thing, these are the arguments against Yeah. It.
Speaker 3:Is the crypto industry in somewhat of a what what was the example you gave with with tech? It's like the dog that caught the car. Yeah. Is that is that a is that a good analogy here?
Speaker 1:Take on on tech's relationship with DC right now is that like tech kind of came in, you know, made a lot of connections, but now doesn't really know what to do.
Speaker 9:Yeah. Look, I think you're seeing a lot of headlines saying things like Coinbase is trying to tank the stablecoin regulation Sure.
Speaker 24:To force the
Speaker 9:market structure bill. I think it's it's of course gonna be more nuanced than that. I think that there are groups that say, hey, we've won huge. We wanna be able to go really hard. Let's get everything we ask for.
Speaker 9:And then there's others that want incremental wins. I will say that Sacks and Bo Hines, who is kind of his his deputy helping run many
Speaker 1:of Yeah.
Speaker 9:Crypto operations out of the White House, They're incredible. Like, Sachs was a direct crypto investor. He was an LP in a bunch of crypto funds. Founders that know him love him. And Bo Hines, not a lot of people knew him from before, but I mean, he like in law school, he wrote, I believe, you know, one of his theses on crypto regulation.
Speaker 9:Interesting. He he he was a big investor. He worked with a lot of companies. So they're they're really on the money and and, yes, maybe the the dog caught the car caught its own tail, but I'm I'm actually extremely optimistic. And then, you know, out of treasury Yeah.
Speaker 9:Besant and and Commerce, Lutnick, you know, both these guys are extremely pro Bitcoin, pro crypto. So Yeah.
Speaker 3:What are you seeing in terms of US based crypt or or sort of crypto companies gen generally feeling more comfortable coming back America? Are we seeing that now? Or are are we seeing more offices being spun up? Or is it a little bit more like, well, we already did the work to set up infrastructure internationally. We we wanna wait to see how this stuff plays out.
Speaker 9:Yeah. There there's a few things. So the first is, if companies don't come back, the founders are starting to. There was a class founders that wouldn't step foot in The US. Yeah.
Speaker 9:It's like Paolo, the the CEO of Tethr Yep. He literally would not come to The US because he didn't know, like Yeah. Maybe maybe he'd just get seized at the airport. Yeah. So the fact that one, they're coming back, they're being public about it Mhmm.
Speaker 9:They're showing their face, they're meeting with people, that's big. Other things that, like, you might not think of, crypto conferences, companies would be scared to sponsor US based crypto conferences. Wow. Because they're like, if we sponsor this conference in New York, maybe we'll get the attention of the wrong regulator. That's over.
Speaker 9:If you talk to the conference organizers, they'll be like, okay, no, our business is is back better than ever.
Speaker 6:That's great.
Speaker 9:So I think, you know, the next stage is open up, headquarters open up, and the market structure bill that hopefully will come later this year will be a real catalyst for that. And, the other the other thing that's really important is a lot of trading activity has moved to the international offerings of these exchanges. Mhmm. When you look at spot volume, which is just, you know, if I buy Bitcoin directly versus, perpetual futures volumes, which are derivative products. Yeah.
Speaker 9:The majority of crypto trading volume is all in perps. Yeah. And perps are not really clear if they're legal in The US. Yeah. There's some guidance that will hopefully come from the CFTC.
Speaker 9:They just did a request for information a few days ago Yeah. Earlier this month. Coinbase has said that they plan to offer futures contracts with a settlement date very far in the future. So you can theoretically do like a hundred year future contract Yeah. In live rebalances, and it fills the role of the perps without Yeah.
Speaker 9:Yeah. New regulation. It's illegal for futures contracts, not a settlement in The US.
Speaker 1:Sure. Sure.
Speaker 9:Yeah. So hopefully that all gets addressed and we can move the liquidity back to The US because every US based crypto hedge fund has to set up offshore accounts to be able to trade their products.
Speaker 3:Are you expecting any legislation around real world assets? I mean, stablecoins in some way are taking a real world asset, even if it's, you know, a you know, a a number in a in a database, and bringing them on chain. What do you what do you expect on that front over the next couple years?
Speaker 18:Yeah. A lot a lot of people will
Speaker 9:get really excited about real world assets, RWAs. It's a horrible name for something. I mean, RWAs in finance is another thing. Yeah. I think that the way that the stable coin bill is written is that if something is directly redeemable as a receipt, you might be able to issue a tokenized version of it.
Speaker 9:Yeah. There's some specific language around, okay, if it's a, you know, a payment coin or a payment dollar issuer, these are the reserve requirements, but you could extrapolate that and issue most of the time when people talk about real world assets, they they talk about it in the lens of either a, we wanna bring more liquidity to an asset class or we wanna be able to use something as collateral. Yeah. I am far more interested in something being used as collateral, which a sense is bringing liquidity to it. The problem is if I was to tokenize a share of, you know, if we if we start a company tomorrow, we raise a 10 at 50 round, and I wanna tokenize that and say, oh, want this to trade at 50, there's no one there's no buyer for that.
Speaker 1:Right? Sure. You need a buyer of last resort.
Speaker 9:Right? No.
Speaker 3:And that's the interesting thing. Think the lending aspect is fascinating, but illiquidity is such a feature of private markets and everybody's realized that at this point. Right? You don't want a company to be, you know, a company to be on chain. They they have a bad, you know, news cycle, and then suddenly it's trading at like, you know, nine, you know, 90% less.
Speaker 9:Yeah. Totally. And I think there's some companies that I imagine we'll see get tokenized in some form. Maybe it's out of trust in Sweden, or sorry, Switzerland
Speaker 6:Yeah.
Speaker 9:Or maybe, you know, UAE or maybe even in The US. Yeah. And and the ones to expect are did you see that Yahoo Finance has secondaries tickers? No. Yeah.
Speaker 9:They have charts now where they show where secondary transactions are reported to have traded.
Speaker 8:We need to add that.
Speaker 1:We do. Well, this has been fantastic. Yeah. Thanks much for stopping by.
Speaker 3:It's great to see you. Come on the show again.
Speaker 1:Yeah. Yeah. We'll have you back from a deep dive.
Speaker 3:Crypto day.
Speaker 1:Yeah. Doing Crypto day. Can we bring in Kayser Yunis, when we have a second? How are you doing, Christian? Okay.
Speaker 1:Yeah. Yeah. Yeah. Yeah. Let's bring you in next.
Speaker 1:If you don't mind waiting ten minutes. Thank you so much for stopping by. I know you have a crazy schedule, so we really appreciate
Speaker 3:Thanks for coming on. Yeah. What's going on for
Speaker 1:And congratulations on this on all the success. First off, would you mind introducing yourself for those who might not man.
Speaker 12:Yeah. You can actually hold the mic. Whatever works.
Speaker 1:Some people are just doing this. Is best for you?
Speaker 2:I am clearly not. Yeah. So my name is Kastor Yunus. I'm the founder and CEO of a company called Applied Intuition, late stage company based
Speaker 5:Yep.
Speaker 2:In Silicon Valley.
Speaker 1:Yep.
Speaker 2:We do vehicle intelligence broadly speaking. Mhmm. Let me explain a little bit of what that Sometimes people think we only do autonomy, but, as I was just talking on stage at Hill and Valley, like, imagine you work on a mine and there's these, you know, giant dirt movers that move like, you know, they're the size of a house.
Speaker 1:Yeah.
Speaker 2:Yeah. You're mining operator, you go up to it, you know, that machine should be intelligent enough to understand who you
Speaker 1:are Sure.
Speaker 2:What you're trying to do as you get in you talk to it. This is teaming concept.
Speaker 3:Yep. Yep.
Speaker 2:So we think about AI is like on, you know, in your screen. Yeah. On your phone.
Speaker 1:In chat box.
Speaker 2:Maybe you talk
Speaker 1:in chat
Speaker 2:box. We we're the next kind of generation of AI, which is AI that's all around you. Yep. But specifically on moving machines. Cars, trucks, tanks, planes
Speaker 1:Yep.
Speaker 2:And that human AI teaming, that's the company
Speaker 1:Can you talk about the path to full autonomy and what AI means in the context of just, I guess, vehicles broadly? We've seen teleoperation.
Speaker 3:Full autonomy even the right thing to be aiming for when teaming is clearly, like, you know, like the Yeah. The more natural way
Speaker 1:to collaborate
Speaker 2:with So within vehicle intelligence, the broad umbrella, there's sub sub group is autonomy. Yep. And within autonomy, you can break that up into kind of two subgroups in itself. Just for simplification, because you guys are not autonomy engineers. Right?
Speaker 1:You're not. Okay.
Speaker 2:It's alright.
Speaker 3:So We're broadcasters. You're broadcasters.
Speaker 2:Alright. Alright. Alright. We won't we won't we won't bust out any, any software test for you.
Speaker 1:But most of the audience, they're they're much better than we are.
Speaker 2:Okay. Please. But I'll
Speaker 1:Dump down for us, not them.
Speaker 2:Exactly. Exactly. Thank you. So so, instead of talking about, like, Society of Automotive Engineers, like, autonomy levels, just think about autonomy as is there a person in the driver's seat or not.
Speaker 1:Sure. Yeah.
Speaker 2:The Waymo, there's nobody in the driver's seat. Yep. In a Tesla, there's somebody in the driver's
Speaker 1:seat.
Speaker 3:Yep.
Speaker 2:Yeah. And that rough analogy applies all the way to tanks, to planes, to whatever, to drones, whatever. Yeah. So is there a human sitting there or human not sitting there?
Speaker 8:Yep.
Speaker 2:So in these human sitting there, that's the assistance version.
Speaker 1:Yep.
Speaker 2:Yeah. And really, in the in the Warfighter example, that can be one to many machines.
Speaker 3:Sure.
Speaker 1:Yeah.
Speaker 2:Right? It's collaborative autonomy. It's multiple multi mode. Right? In the there's no human in the Waymo example Mhmm.
Speaker 2:Then it's a pure level four autonomous system and Sure. And that's the robotaxi. Both of those things exist. Yeah. So then the question is, well, why would you use one versus the other?
Speaker 2:Yeah. The Waymo version, broadly speaking, is way more expensive. Tesla is already a functioning business model.
Speaker 12:Yep.
Speaker 2:Yeah. You can go buy a production Tesla Yep. That has FSD
Speaker 1:Yep.
Speaker 2:And it works pretty damn well.
Speaker 1:And it's profitable.
Speaker 2:Yeah. And it's profitable. Waymo hasn't figured that out. Sure. And it and it will.
Speaker 2:And just the nature of the actual machine, it's more expensive. Sure. The compute is way more expensive. The sensors are more. Yep.
Speaker 2:The entire operations are more expensive. But what you get is you get that last 5%
Speaker 1:Yep.
Speaker 2:Yeah. Of, you know, scenarios that Waymo will take care of that the Tesla requires your intervention.
Speaker 1:Yep.
Speaker 2:Yeah. Because I can't do this. And so then you can take that into other domains like, let's say, construction
Speaker 8:Mhmm. Yeah.
Speaker 2:To get that last 5%. It's generally not possible right now because in those domains, they're more, let's say, open
Speaker 1:Yep. Yeah.
Speaker 2:Than something like a a road.
Speaker 21:Yeah.
Speaker 2:And so then you need a human teaming. Take for example, you're in a fighter jet Yeah. Or you're in a tank, and you have to make a lethal decision. Yeah. That's where teaming becomes really important.
Speaker 21:These are
Speaker 3:the the beauty of a car is a car can just stop.
Speaker 1:Right? It's
Speaker 2:not like
Speaker 3:trans it's not like moving something that's
Speaker 1:very tight
Speaker 3:and could be damaging. How how much but but the answer to
Speaker 2:question, autonomy is here. Mhmm. It is here. And it's just like a lot of times people ask us, like, oh, when is self driving gonna be a thing? It exists.
Speaker 1:Yeah. Totally.
Speaker 2:It's just now it's like mobile phones. Like, when did mobile phones happen?
Speaker 3:Yeah. I wanted
Speaker 2:to ask that simple question.
Speaker 1:It Between the eighties and 02/2007 when we had the iPhone moment?
Speaker 2:But even then, like the iPhone it's not like the iPhone everyone got
Speaker 1:an No. It was really expensive. It took a
Speaker 2:long the iPhone actually isn't the thing that consumers care about. Yep. They care about yeah. The What's that? They care about Uber.
Speaker 2:Yeah. And like if you try to think about like an Instagram, like you can't even think about Instagram No. An iPhone. At all. Yeah.
Speaker 2:But the first iPhone, by the way, no app store.
Speaker 1:No app store.
Speaker 2:No front facing camera. Yeah. You couldn't even there's no such thing as Instagram.
Speaker 1:No selfies.
Speaker 2:So the the the macro point is autonomy is the spectrum.
Speaker 1:Yep. Yeah.
Speaker 21:So, you
Speaker 2:should think about autonomy as like, it's gonna come in drips and it's gonna be it's unevenly like they the old Peter Thiel saying
Speaker 1:Yeah.
Speaker 2:Technology is unevenly distributed. Yeah.
Speaker 3:So, talk about How much is your vision expanded? Right? I imagine early on, you know, even in the last few years, I'm I'm assuming that people came out seeing your success being like, oh, we're gonna do applied intuition for x y z. And then you're probably sitting there being like, well, applied intuition is applied but but as your vision always, you know, been the same or are
Speaker 10:you okay?
Speaker 2:I think I'm just We're not a company. No. You know, we're like we're like street fighters.
Speaker 1:Yeah. How long
Speaker 12:you been doing
Speaker 2:this? Don't let the suit, don't let the suit, you know, I come from Detroit. You're a brawler. Brawler. Yeah.
Speaker 3:No. But how much how much
Speaker 15:Eight years.
Speaker 1:Overnight success.
Speaker 2:Yeah. Yeah.
Speaker 3:Yeah. I'm assuming your vision always was was massive, but but now, you know, seeing the the technological advancement Yes, sir. Are are you discovering new markets every month?
Speaker 2:Yeah. I think our our the the the core hypothesis that we had, the core, like, you know, quantum of idea that we had was we saw Tesla emerging. This is 2016, '20 '17. Mhmm. And it was like, oh, the car is gonna be a software thing.
Speaker 1:Mhmm.
Speaker 2:Yeah. And we just don't know what that means. Mhmm. But we ultimately want to participate in that. So I, you know, I I grew up in Detroit.
Speaker 2:My co founder grew up in Detroit. Our we're a family of automotive folks. My parents in factories, his parents is in engineers. I went to the General Motors Institute. We saw know, I worked in factories for bunch of years.
Speaker 2:And so you just you just see the car business, and you're like, this business is gonna change. Yeah. I think that was the very vague, rough idea. Yeah. And then the product strategy over years has been, let's build all these products to make cars more intelligent.
Speaker 2:Yeah. We got into defense about a year after we started, so now
Speaker 3:it's Oh, okay. So early. Very early on.
Speaker 2:You know, it's not random like General Dynamics and General Motors.
Speaker 3:Yeah.
Speaker 2:Their their technical headquarters are like, you know Yeah. Five minutes from each other.
Speaker 3:How worried do you you were dual you were dual use from almost early. How worried do you get for founders that are here that are not that aren't dual use given your experience government?
Speaker 2:I'm just trying to eat. I don't I don't know about their businesses, man.
Speaker 12:Yeah. Yeah.
Speaker 2:Yeah. I can
Speaker 3:I imagine like if you had started out and you were just doing defense and you use autonomy and it was Yeah? You know, whatever. Automotive. Right? Yeah.
Speaker 2:Yeah. We're doing just automotive. I think I think it's, you know, it's there's a our our company values these values that run the company, but they can all be reduced to two words, radical pragmatism.
Speaker 3:Mhmm. Yep.
Speaker 2:Automotive, specifically, and defense are anti cyclical.
Speaker 9:Sure.
Speaker 2:Yeah. So, you know, it helps. Like, that's not random. It's good. So I think I think it's positive.
Speaker 2:I think just for us, the problem space in a car and a tank are actually surprisingly similar. Yeah. They're both human operated. They both are larger machines that are electromechanical, and then now are becoming more software. Yeah.
Speaker 2:I think if I'm a defense only company, I think it's I think it might be easier to be a commercial company to come in defense than a defense company who got to commercial. That makes sense. The main reason is, in the commercial ecosystem, you gotta fight the globe. You you gotta fight everybody. And it's not about I know the DOD procurement methodology and therefore I get a big contract.
Speaker 2:It's like I have to have the best product and has to be priced the cheapest that it can be bought globally. Yeah. Because otherwise, I'm not gonna I'm not gonna win. Yeah. I I think for us, the transition into defense being from Michigan, I mean, take home, you know, the the tank and automotive the where they build tanks and the Detroit arsenal.
Speaker 2:Yeah. Literally a mile from where I grew up.
Speaker 21:Wow.
Speaker 2:Crazy. General Dynamics three, four miles. I mean, Detroit is a defense Yeah. Ecosystem. It's the building of
Speaker 8:stuff. How do
Speaker 3:you so you you you're clearly much more focused on existing form factors. Right? Cars, tanks, things like that. Drones. Drones.
Speaker 3:When when I'm I'm sure you've been approached by humanoid robotic companies. Yeah.
Speaker 2:Have. Look at this. This guy, you're are you a plant by one of our investors? It is. Who is this Josh Wolf or
Speaker 1:who who earlier.
Speaker 3:No. I but I I'm curious to think, hear about how you're thinking about these new form factors. We don't know at all how they're gonna play out. Yeah. So
Speaker 2:we have been approached by, I would say, three humanoid companies now who said, hey, can we use the tooling? Can we
Speaker 1:use some
Speaker 2:of the technology? I think for us, we like to enter markets where there's a bit stability and maturity because Yeah. You don't want to build a bespoke thing for company a and then Yeah. It's, you know, some good bespoke company. We're a product company.
Speaker 1:Mhmm.
Speaker 3:We're not
Speaker 2:a services company. Yep. Humanoids will get to that. The macro thing that you're tugging on is actually this abstraction from hardware to software. There is a company actually that that's like applied in the past, which is Microsoft.
Speaker 2:Microsoft started
Speaker 1:Yeah.
Speaker 2:As a tooling company
Speaker 12:Yeah.
Speaker 2:Then got into operating systems, then got got into applications. They did it all on the PC in the eighties. Mhmm. We're doing it on the vehicles in the, you know, twenty twenties, but it's the same thing. It's you're abstracting away from the hardware that exists in a car or, you know, whatever truck, commercial truck.
Speaker 2:The humanoid is similar. There's a hardware software bifurcation that's gonna happen.
Speaker 3:How do you do you balance Whether you can do a well balance then wanting to be a part of the the sort of evolution of these new form factors, but not over invest too early. It's like that that that's billion dollar question. Yeah.
Speaker 2:I think I think most companies have we have Marc Andreessen is our first investor and our largest shareholder and he's our sole official board member.
Speaker 1:Oh, nice.
Speaker 2:Very So so Marc's been with the company a long time. And Mark has this great line, is companies are almost always too early. Yeah. And that's super counterintuitive because you always think, don't be late, don't be late.
Speaker 1:Don't be late.
Speaker 2:Actually, mantra everyone should be saying is, don't be early.
Speaker 1:Don't be too early. Interesting.
Speaker 12:Yeah. Yeah.
Speaker 2:And so I think that I say, like, right now is the best time to get into self driving.
Speaker 1:Interesting. Interesting.
Speaker 8:Yeah.
Speaker 2:Because the all the technology is kind of figured out. Yeah. So now you're gonna enter against a Waymo or against a Tesla with none of the cost of the fifteen years, and you have to take all of these engineers who are
Speaker 15:at Cruise and Argo Yeah.
Speaker 21:Who are
Speaker 2:at Waymo and a Tesla, and you recruit them and you build
Speaker 1:some and Cruise.
Speaker 3:Cruise. Tribal knowledge of what works, what doesn't work. Yeah. And they get to work for you.
Speaker 1:Yeah.
Speaker 2:You.
Speaker 1:And they
Speaker 2:have more tribal knowledge. It's like actual hard tech.
Speaker 1:Yep.
Speaker 2:Yeah. And so they now know, you know, it's like building the first web application in the mid nineties. That's a miracle. Today Yeah. Junior high kids build web apps as a part of their class project.
Speaker 2:Yeah. Yeah. Autonomy is gonna be the same way. Human robots are gonna be the same way. It's just the time factor we're gonna So if you're trying to monetize Yeah.
Speaker 2:That's the business we're in. Yeah. That's what commercial of the world is, private business. You have to find where's that meniscus line.
Speaker 1:Yep.
Speaker 2:And and as soon as something becomes mature enough because you also can't be too late.
Speaker 1:Yep. Yeah.
Speaker 2:If you're too late, then there's a bunch of players in the ecosystem. Actually, you know, you talk about defense tech. My actual fear for a young defense tech company isn't, can you make it a commercial? I think you can build a very viable, vibrant defense only company. Yeah.
Speaker 2:It's just there's a lot of defense only companies now.
Speaker 1:Yep. Totally.
Speaker 2:And suddenly, you know, the pricing pressure goes down because you're the fourth company that's doing the same thing.
Speaker 1:Yeah. Yeah. Well, I can't wait for the next season of BattleBots. I'm sure kids will be building all sorts of crazy autonomous solutions because Yeah. There's so many open source packages that they can piece together.
Speaker 3:By the way, the the new spending bill allowed for like $500,000,000 of autonomous systems. Lot of said that felt low Yeah. But but we had Sean Maguire on the show earlier and he was like, well, it's not low if it if that's the starting point and we go up from there, which is Yeah.
Speaker 22:What people
Speaker 2:don't generally use proxy I don't use dollars as a proxy for importance. I u the deep seek, you know Yeah. Outcome is a very clear example that you can do a lot with limited resources. Yeah. I think the the the more important message broadly speaking is autonomy is where, you know, AI meets the war fighter.
Speaker 1:Yeah.
Speaker 2:That mess I mean, I keep saying that again and again. I will you know, trade trademark copyright. Yeah. Whatever it is. The But the point being is, like, it's the thing the the teaming aspect
Speaker 1:Yep. Yeah.
Speaker 2:Of the war fighter with the machine, that's the future.
Speaker 12:Yep.
Speaker 3:Yeah.
Speaker 2:How we get there, that's all details. But, we all have to agree that that's what we gotta get to. Yeah. If we agree to it, then we can figure out the, you know, reconciliation Yeah.
Speaker 1:And this
Speaker 2:specific all that'll get shaken and shaken out. Totally. I don't think enough people still agree that that of that vision of the future. Yeah.
Speaker 1:It really does feel like of the other there's probably 20 other line items where autonomy will be stuffed in, it won't be headline autonomy spent.
Speaker 2:Yeah. Exactly. So, That's fair enough. Even applied Yeah. For our company, we don't cast ourselves as an autonomy company.
Speaker 2:We cast ourselves as an intelligence company.
Speaker 1:Sure. Sure. Sure. Right.
Speaker 2:Vehicle intelligence company. Right? And so, like, why do we do that? Because autonomy is a is a
Speaker 3:Component of It's
Speaker 15:a component. It's component.
Speaker 2:It's it's kind of like saying that, you know, is the government funding enough engines? It's like, well, the car business that we're really talking about.
Speaker 1:Yep.
Speaker 2:Yeah. The engine is a very important aspect of the car. Yep. But you're funding actually the larger industry.
Speaker 1:Yeah. Well, thanks so much for stopping by. Run. This a lot of fun. We'd love to have you back for a much deeper dive
Speaker 21:on the company. This
Speaker 1:is great. This is great. We'll reach out. Cheers. Talk to you soon.
Speaker 1:Bring in our next guest. Welcome to the TVPN livestream. How are you doing? How is your
Speaker 10:What's going on?
Speaker 1:How is your, Helen Valley experience been?
Speaker 7:We had some good entertainment, really.
Speaker 9:What's Hey.
Speaker 1:What's going on? Latest.
Speaker 3:Welcome to the show.
Speaker 1:Nice to meet you. John, pleasure. Would you mind introducing yourself for the stream for the viewers who are watching?
Speaker 20:Justin Fisher Wolfson, one of the founders of one hundred thirty seven Ventures.
Speaker 1:Fantastic. Happy to
Speaker 10:be here.
Speaker 1:How would you describe your fund, what you do for, anyone at home?
Speaker 20:So, I mean, we started the business back in 2011. I used to be a founders fund.
Speaker 23:Yep.
Speaker 20:Left when we sort of had this belief that companies were gonna stay private longer.
Speaker 1:Yep.
Speaker 20:And that if that happened, you know, founders, executives, all the early employees were gonna end up wanting some liquidity. Yep. Because, you know, your life is different when you're 35, when you're 25.
Speaker 3:Yep.
Speaker 1:Yep.
Speaker 20:When you're 45, like, people's needs change. Yep. And so we kinda built the business on that premise Yeah. And we've continued to expand. Like, once you've got great relationships with the founders, you can Yeah.
Speaker 20:Do some primary investing, help people run tender processes Yep. For all the employees, and
Speaker 25:Yep.
Speaker 16:Kinda built it. Hot
Speaker 3:a finance with a deep understanding of venture and the founder.
Speaker 20:Absolutely. Right? I mean, venture's finance. I mean, I'm not sure all the venture people
Speaker 3:but but it's not it's sort of it's a different product in the sense of, like, okay, we're gonna give this entrepreneur money, set and forget, you know, kinda bet on them versus, like, running, like, a firm and, like, built like, it's financial services at the end of in some way.
Speaker 20:I think I think you're right. Like, we're trying to build long term relationships with people. Yeah. Right? Like, we were early investors in SpaceX Mhmm.
Speaker 20:And like, we've continued to invest with them for the last fifteen years. Right? I mean, we've done something similar with Andro. Right? Like, we're just trying to build long term relationships with great companies and continue to invest in whatever way we can.
Speaker 1:Yeah. So, a bit of a hot take. Is the Lena Khan effect on M and A markets good for your firm because it leads to companies staying private longer because they don't get acquired?
Speaker 20:I think well, so I think there's this like misperception US government policy is the thing that drives the M and A markets. It definitely is part of it, but like like go back was
Speaker 3:a good excuse for the last couple, you know, few years.
Speaker 20:Like, that that wasn't what blocked like the Figma deal. Right? That was the Europeans. Yeah.
Speaker 20:True. Like, just because America's like, great, anyone can buy anything, like
Speaker 1:Doesn't do the companies that
Speaker 20:are buying other companies are global, and they're regulated globally. True. And so, like, just solving it in The US is not going to actually solve the M and A problem that you're describing.
Speaker 1:Yeah.
Speaker 20:So, like, do I think less M and A is sort of good for us? On the margin, sure. Right? Mean, like, it's But even that IPO market's kind of closed.
Speaker 1:Totally.
Speaker 20:So, companies staying private ultimately means they end up taking more investment in the private markets. Yeah. And I think at some point, the great companies, I mean, they get cash flow positive. They don't need primary capital anymore.
Speaker 3:Yeah. Right?
Speaker 1:So
Speaker 20:that leads you to these liquidity events, tender events for employees, and like, that's how we've scaled
Speaker 1:Yeah.
Speaker 20:Over time.
Speaker 1:Do you buy that idea that, like, Elon Musk kinda ran the a b test with Tesla and SpaceX, had a great experience with SpaceX, didn't have a really great experience in the public markets as Tesla? I mean, fantastic stock performance, but, like, headaches. And so the takeaway was, hey, maybe stay private longer, and then other founders kind of learned that lesson as well. Is that reasonable?
Speaker 20:I I mean, I certainly think Elon had a better experience in the private markets than the public markets.
Speaker 1:Sure.
Speaker 20:But, I mean, personally, think I don't wanna speak for him, but like impression that he, you know, he really appreciated all of the retail investors who supported Yeah. Him and the company and his vision of where the company could come Yeah. Like Yeah. That's actually like an incredible thing. Like, there's so many small investors across Yeah.
Speaker 20:The country Yeah. Who believed in the company, and and then because of that, actually made huge sums of money Yeah. Right? By being an investor. So, think he actually really does care about those people, because they were there for him when in Somerset's other people weren't.
Speaker 1:Mhmm.
Speaker 3:Yeah. In the private your guys' model is not you're not like, oh, I'm so annoyed this company that was in our portfolio went public. It's like you win in kind of Yeah. Either situation.
Speaker 20:Yeah. Mean, ultimately, think LPs do need dollars back. Right? Totally. You can't have a system where, like, all you do is take money from people, give it to other people, and then, like, it's worth a lot more, but no one ever gets any money back.
Speaker 20:Like, that Yeah. That system will ultimately break. Yeah. But, you know, I think if you're right about the companies, and you're compounding over a long period of time, like, that's that's ultimately the goal. So Yeah.
Speaker 20:You get a little more more leeway when that happens.
Speaker 1:Yeah. Yeah. Do you do you have a take on the new permanent capital vehicle that Thrive put together? It's kind of an interesting story that we haven't seen a lot of VCs do that. But, obviously, Warren Buffett's famous for it.
Speaker 1:There's lot of other folks that have built these holding companies. Yeah. We've seen more just different strategies in venture, I would say. You have continuation vehicles. You have growth stage, almost private equity type deals happening.
Speaker 1:Like like, what what is exciting about the new era of VC in 2025?
Speaker 20:I mean, we've looked at some of these permanent capital vehicles. I think they're interesting. I think they solve certain problems. I think they create other problems. Right?
Speaker 20:Going back to liquidity point.
Speaker 1:Yep.
Speaker 10:It's burning capital. Yeah. Liquidity.
Speaker 20:It's like, it makes
Speaker 2:it hard to get
Speaker 1:Yeah.
Speaker 20:It makes it hard to get the money out. Yeah. But they they do solve certain issues, and I think it's really nice as an investor to be able to take a really long term view on things Yeah. And not get caught up in the market cycles. Like, trick is like, just Like, even the your conversation about applied intuition.
Speaker 20:It's like, if you can just be in this company for a really long period of time, like, who cares what multiples are today?
Speaker 1:Yeah. Yeah.
Speaker 20:I care whether or the the fundamentals of the business, a hundred x over the next ten years. Yep. Who care even if multiples are terrible, then it won't matter.
Speaker 1:Yeah. Yeah.
Speaker 20:Right? Like, so that's Yeah.
Speaker 1:Does seem like there's a shift. I mean, the the the I don't know who came up with the idea of a ten year life cycle for a fund. It seems arbitrary. Seems like they were just like, like, make it double digits. Make it a round nice round But now it does feel like VCs are starting to think, oh, well, like, there's extension periods, there's continuation vehicles.
Speaker 1:Maybe we should be thinking in twenty year cycles, 25.
Speaker 20:Look, turns out everything is historical and structural. Yeah. Right? Reason it was ten years is that the So so you go back to like when we started the business in 2011. Right?
Speaker 20:Yeah. The first company that really kind of stayed private for a really long time was like Facebook. Yeah. Yeah. Right?
Speaker 20:Like that was sort of the wasn't even that long.
Speaker 28:It was. Yeah. It wasn't the time.
Speaker 20:But back then, right, the
Speaker 1:average time to liquidate Google and and like, these companies went public so fast.
Speaker 20:Time to liquidity was like, you know, I think probably four or five years back Yeah. Then. When we started, January in '11, it was like six or seven years.
Speaker 1:Yeah.
Speaker 20:It's now like twelve or thirteen at this point. Yeah. So, like, people pick 10 because they couldn't conceptualize Yeah. That companies would still be private 10, and they're like, they like doubled it and rounded up. Yeah.
Speaker 20:Yeah. Yeah. Right? And so now what's happening is like
Speaker 1:way this company is gonna
Speaker 8:be private ten years.
Speaker 1:This is super safe.
Speaker 20:Exactly. And then and that's and that obviously that broke up the system.
Speaker 3:Yeah. How how early do you do you try to identify these companies? Right? Because once you have a a generational company in the portfolio and and you plan to help support, you know, all the shareholders over, you know, numerous years, it doesn't matter exactly when you get in, but I'm I'm assuming that other other now, even growth stage investors are looking for you guys for signal in in some way or another to to kind of just given the track record of one Yeah. Three seven.
Speaker 20:And for us, I think we're looking at companies that are kind of pro post product market fit Mhmm. That are that are scaling the business.
Speaker 1:Mhmm.
Speaker 20:Yeah. And the thing that's sort of changed, if you look at the last twenty years or so, is that there's really no there's really no cap. Right? Like it used to be that a billion dollar company was like a incredibly huge outcome, and like, honestly Yeah. There's a there's a there's hundreds of those in the private markets now.
Speaker 20:And and so like, for us, it's really just this question about what, you know, can the investment hit our cost of capital? And if you have, you know, you have an opportunity to invest, even like take SpaceX at $3.50, it's like, if you can believe that's a trillion dollar company, like, can still be a great investment. Yeah. It's like, sure, it's a big number or whatever, but Yeah. It doesn't really matter where you are, it matters where you're going.
Speaker 20:Totally. And that's, think, the thing that is different in the private markets, or really even the public markets. I mean, look at the valuations on Nvidia. I mean, that's it. That's an incredible growth story in the public markets, like
Speaker 3:Yeah.
Speaker 1:Yeah. Don't see that at that scale usually. But
Speaker 20:I mean, look at Google. Look at Apple. Right? Mean, like, look at all of the of the tech companies, like,
Speaker 3:it's Yep.
Speaker 20:It it The opportunity is much bigger than people imagined.
Speaker 3:Yeah. Yeah.
Speaker 1:It's true. Any other questions?
Speaker 3:Yeah. That's fantastic.
Speaker 1:We'll let
Speaker 12:you get out of here.
Speaker 1:Thank you so much for putting this
Speaker 3:whole thing on. It's it's
Speaker 20:We're we're happy to help help make this thing possible. And you guys have done quite the job this year. Hope I hope you make it back next year.
Speaker 1:Oh, absolutely.
Speaker 3:We'll be back. Perfectly. Thank you so This is great. Cheers. Thanks so much.
Speaker 3:Let's let's get Ryan Peterson in.
Speaker 1:It. Yeah. Have Zellerfeld. I think we should bring in Cornelius real quickly, do five minutes. We need to go into lightning round folks.
Speaker 3:I wanna text Ryan.
Speaker 1:We got a bunch of Yeah. Yeah.
Speaker 3:Lightning round. Cornelius. Gotta talk about Let's let's talk about the chain real quick and the fit because it is one of
Speaker 1:time I see him, he's dressed fantastically.
Speaker 3:Here, pull pull this up.
Speaker 1:This is happening, Zellerfield.
Speaker 18:Thanks. Yeah. Obviously, as I'm
Speaker 3:from Zellerfield, you can put your shoes on the desk if you want, if you wanna put it up for the audience since since you are in the shoe business. There we go. There we go. Right on the desk. Look at this.
Speaker 3:Made it printed shoes.
Speaker 1:Three d printed shoes.
Speaker 18:Right? In The US. Yeah. So so far, we have done most of our production in Hamburg, Germany. Okay.
Speaker 18:So that's where we started. Yeah. But obviously, like like, a huge part of our market right now is is The US, so we're just bringing that back. We had 200 printers in Hamburg, Germany. Mhmm.
Speaker 18:And now we're bringing 2,000 printers here to The US Wow. Printing millions of pairs a year.
Speaker 1:Amazing.
Speaker 3:Insane. Insane. Where is all the where is the demand coming from outside of the the tech community?
Speaker 18:It's mostly fashion guys.
Speaker 19:So Sure.
Speaker 18:I don't know if you have seen, but we are printing shoes now for Nike, for Louis Vuitton, for Yeah. Sinclair. Even like, lots of celebrities are wearing our shoes all the time. Yeah. Drake did a huge cowboy boot with us because he
Speaker 1:just That's amazing.
Speaker 18:He he just bought a Texas in Texas, a ranch.
Speaker 1:Sure. There we go. Very cool.
Speaker 3:And he some cowboy boots. Just make them make What have
Speaker 1:you learned from I mean, we read a story in the Wall Street Journal recently that Nike was having trouble, Nike was having trouble using robotic automation to assemble shoes and and, meld the upper with the soles because there's so many different sizes. It feels like a unique case for three d printing, but is there any hope to iterate on your product to a point where there are multiple materials?
Speaker 18:Yes. Also multiple colors. I think previous experiments often failed mostly because everybody is trying to make the same product as before, just assembled by robots, kind of.
Speaker 1:Yeah. Yeah.
Speaker 18:Yeah. But
Speaker 1:You need to think about it from first principles.
Speaker 11:A %.
Speaker 20:That makes sense.
Speaker 18:And then you can do even crazier stuff Yeah. That traditionally wasn't done in performance football. So so Yep. All of a sudden with three d printing, every shoe can be custom made. So Yep.
Speaker 18:When you think of performance, you know, everybody talks about I don't know, I think Nike's mission statement is goes something like, making every athlete's dream come true. Yeah. But, like, if you think about it, lots of those brands, like, they have custom for the truth for those performance athletes. But what about the kid on the on the Yeah. School schoolyard that Yeah.
Speaker 18:Just wants to kick some soccer, for example. And all of a sudden, with three d printing, you can get those kids the same custom fitted experience like Amazing. A pro soccer player. And when you think of not just performance footwear, but even anyone, I I think what will happen is I mean, I wear this this is happening, Cap, because printed shoes will be on every foot.
Speaker 1:Yes.
Speaker 18:Yeah. And a big reason is because all of a sudden, you can do stuff like I don't know, every shoe fits whatever design. So Yeah.
Speaker 3:Right now So so talk about the time today shoes are made in factories far away from the end consumer. Yep. They get made, they get sent, eventually they get to the consumer whether it's through retail or online. Talk about kind of like, what is the actual activity, you know, where is the printing gonna happen long term? Is it is could we get to a point
Speaker 18:where Nike decentralized.
Speaker 3:Yeah. Could Nike in a retail store, could somebody design a shoe and print it in real time? Where we're going?
Speaker 18:So, basically basically, what's going to happen is you will have farms all over the world. Maybe a little bit like Coca Cola has bottling plants all all over
Speaker 22:the Sure. Sure.
Speaker 18:Yeah. And then, what's gonna happen is you buy a shoe, for example, on zalafel.com, and depending on where the end consumer is, that's where the production job is going to get. Mhmm. And then what I fucking love is that people are now buying shoes on zalafelt.com, and, like, basically, like, few seconds later, the printer starts printing and you can have a custom fitted shoe, I don't know, two days later. Yeah.
Speaker 18:And that is completely changing the game. And without you know, usually in footwear, you have cycles, production cycles and marketing cycles of eighteen months and longer. Yeah. So you need to make the commitment in the factory in Asia 18 Months before, but you don't even know how many will sell. What's great here is that on demand production basically changes that completely, and it can still be as quick as Amazon.
Speaker 11:Yeah.
Speaker 3:No. It it it's such an interesting story just given, you know, we we've studied how Nike just struggled to bring back shoe production with with one of the most advanced manufacturers in the world. But again, was because they were just taking the the traditional way. Much Shoes has like 14 parts or something like that Yeah. Trying to make it with a robot.
Speaker 3:I think what you're doing with shoes, can apply to so many other categories in terms of
Speaker 1:Thank you for stopping by. Thank you.
Speaker 24:We'll let you
Speaker 3:get back out there. Yeah.
Speaker 1:Come back
Speaker 3:on the show, sir.
Speaker 1:We're gonna have you pull deep dive. Should we bring in Augustus, Ryan Peterson?
Speaker 17:Let's do Ryan Peterson because
Speaker 3:we're told, unless Ryan, Augustus was on the schedule.
Speaker 1:Augustus, do you have to go, or can we do Ryan for five minutes? Okay. Wait. On for a minute. We got
Speaker 3:Ryan because
Speaker 1:I think he isn't gonna call. We'll bring you in in ten.
Speaker 3:Man. Sorry. Yeah. Yeah.
Speaker 1:We're live. Ryan Peterson, welcome back to the show. Third time.
Speaker 8:Treated like cattle.
Speaker 1:Yes. I know. It's really rough.
Speaker 3:Sorry about that.
Speaker 1:We're we're we're not iterating, we're learning. But how has your Hill And Valley experience been? How's your time in DC been?
Speaker 8:That's great. It's great to be in the capital. Yeah. Haven't been here since January 6.
Speaker 1:No, I'm just kidding.
Speaker 8:Bad joke.
Speaker 1:But, yeah, I mean, you're you're in a very interesting business. Obviously, in the news, everyone has called you. You've done mad money. Wall Street Journal's calling you the most boring business that we need to know about or something like that. What is top of mind?
Speaker 1:What are you telling lawmakers that could change or could, you know, improve to, like, what does a great outcome here look like in the next couple of years? What like, what's your stump speech
Speaker 8:right A couple of years.
Speaker 1:Yeah. Yeah. Mean, what's next couple days You worry about the next couple of weeks. What what what's on your mind?
Speaker 8:Don't think anyone cares what I think. I told them tariffs should come way
Speaker 1:down. Okay.
Speaker 8:Yeah. We what we've seen in our data is a 60% decline in freight from China to The US. Yeah.
Speaker 1:Can you unpack that? I heard something about, like, the the the freight rates are actually high because they're not even their ships aren't even moving. Is that right?
Speaker 8:No. Rates are pretty reasonably low right now. There's a risk of it going higher. Like, I think it'll be a first class problem if they undo the tariffs and a lot of volume comes through
Speaker 1:Then it goes high.
Speaker 8:Then you'll see this spike
Speaker 1:But but if you're willing to pay the tariff, you have a really high margin, you can get stuff out of China right
Speaker 8:now. It's a little bit so, like so you've had a 60% decline in bookings of ocean freight from China to The US. Okay. That's resulted in a 25% decline of sailings. The ocean carriers
Speaker 1:Yeah.
Speaker 8:Pool 25% of the ships are not sailing. Yeah. Yeah. So, like, it it's a little bit harder to get service
Speaker 1:Got it.
Speaker 8:Because like ships are getting cancelled. Made bikes for more valuable because if you're booking directly with an ocean carrier, they might cancel the sailing.
Speaker 1:Yep. Yeah.
Speaker 8:We'll find you a different one. Yeah.
Speaker 1:Course. We'll solve you value.
Speaker 8:So some level, some of this like helps us a little bit. But I'm very worried for our customers that those are their businesses. Yep. Like, 60% decline is a lot of companies just deciding, opting out of the system. Yeah.
Speaker 8:And they can't they they can't necessarily
Speaker 1:move to a new manufacturer
Speaker 10:business, they didn't spend enough at the inauguration Yeah.
Speaker 1:Yeah. That's right. What
Speaker 3:what's been what have you been hearing on the ground in China? It's it's it's hard to 60% reduction in freight coming out of China is very bad for China. Right? Like the the the sort of the party can kinda spin that however they want. They have a lot of control over
Speaker 9:Very bad for China, you're saying?
Speaker 3:Yeah. Yeah. Very bad very bad for China. In in an economy that was already bad, in an economy that had extremely high youth unemployment, have you heard anything from the, you know, I I you know, all the different groups that you interact with on on that side of the pond?
Speaker 8:Definitely bad. I mean, it's bad for both parties, know. You kinda have a game of chicken and
Speaker 1:Mhmm.
Speaker 8:There is an outcome where the cars crashing each other and everybody dies. That's rough. So you hope somebody swerves and gets solved. I my view of it I don't have a lot of, like, inside intel here. It's certainly bad for factories.
Speaker 10:Mhmm.
Speaker 8:I just think China can withstand a lot more pain than America.
Speaker 3:Just due to the the way that
Speaker 8:it's Like, the last hundred years of Chinese history, they've like, they would have a couple percent of GDP decline, like, oh, my God. Look at
Speaker 3:the history. They've been through.
Speaker 1:They're ready warlord era
Speaker 8:Yeah. Like, all these different famines and things that Like pain These
Speaker 3:are built into the culture. Yeah.
Speaker 8:Are kinda Yeah. This will be a pretty small amount of pain for them to bear. American side, we're kinda soft. There's a lot more feedback mechanisms here. Mhmm.
Speaker 8:Yeah. Trump, I I had to say, is like a iron will. On a lot, you know, I A lot of people don't like any of the tariff policy. There's other policies I, you know, would not what we're gonna talk about right now, but I don't like any of anything about the tariff policy, and yet, you gotta have respect for this guy who's like, the whole world is it's everyone against Trump. Mhmm.
Speaker 8:Yeah.
Speaker 3:And he doesn't care.
Speaker 8:Yeah. I I would have this power.
Speaker 3:We we we've, you know, heard rumors that that there's, you know, there's obviously just been a constant rumor mill, rumors moving the market, trillions of dollars Mhmm. You know, in seconds. But is there any sense of optimism on the ground with on the with the politicians that you've seeing this week?
Speaker 8:I I've there's let's just say, there's a sentiment that tariffs the tariff with China at $1.45 is not sustainable. It's not where they meant to be, not where they want to be Sure. That it will come down.
Speaker 1:Yeah. But there needs to be renegotiation around that.
Speaker 8:Unclear to me what they think the triggers are, so therefore the timeline for when it would come down Yeah. Or what it comes down to. Because on the day of the reciprocal tariffs on April 2 when it was announced, China was at 54%. Mhmm. And that was already a shocker, like, that was the top of the list and the worst in the Yep.
Speaker 8:Yeah. Kind of that's gonna and that's on top of the prior Trump administration Venezuela.
Speaker 11:So, like Yep.
Speaker 8:Now that seems quaint.
Speaker 1:You're like, oh, let's get to 54. We'll be but 54
Speaker 8:was also really bad for companies.
Speaker 1:If we play this out and there does wind up being a re industrialization, more American manufacturing, maybe it's an automated facilities, what does the future of Flexport and logistics look like? Is it more trucks and trains and automated trucking? What are you thinking about in like five, ten years just to power a more efficient logistics system in the domestic Lower 48?
Speaker 8:Oh, in the domestic side? Yeah. I mean, we we acquired Convoy.
Speaker 1:Sure.
Speaker 8:So we have a truckload business. We do about 200,000 truckloads a year.
Speaker 1:Yeah.
Speaker 8:That is 98% automated.
Speaker 1:It's Really?
Speaker 8:Amazing tag. Wow. 98% of the loads, nobody does anything Wow.
Speaker 3:On the
Speaker 8:inside. 2% need to have an exception managed.
Speaker 1:Yeah.
Speaker 8:Yeah. So that is probably gonna Yeah. Scale that thing like crazy. But by the way, the truckload business, if the tariffs keep going where they are, that's gonna collapse too.
Speaker 1:Mean because yeah.
Speaker 25:It's not
Speaker 1:What are you trucking? You're trucking stuff that came off a boat. Yeah. Yeah.
Speaker 8:Yeah. Exactly. And then not this idea that it's gonna, like, lead to this manufacturing boom is kinda fake. Heard from a senator yesterday that said they do a lot of they have a lot of auto manufacturing in their state.
Speaker 2:Mhmm.
Speaker 8:That all the auto manufacturers have told them that if they don't get an exemption on parts, they're gonna go under. Well, they got an exemption on parts this
Speaker 1:morning Okay.
Speaker 8:Or yesterday. So, hopefully, these feedback loops are working and we don't just, like, kill I knew
Speaker 10:that was gonna happen because you're, they're
Speaker 8:not gonna let all the auto manufacturers
Speaker 1:Yeah. Yeah. Yeah. Yeah.
Speaker 3:Yeah. No. It's a tough I mean, it's a bad situation
Speaker 1:Chaotic time.
Speaker 3:If you have your, you know, team in Washington, you can get get stuff done. And if and if you're, you know, even if you employ a hundred people, you can't it's hard to get your you're still a tiny business
Speaker 1:in
Speaker 3:the eyes of everyone else. I mean, were talking Sean Sean Frank had an interesting kind of policy, you know, recommendation or idea, which was like, basically take what I would have to pay in tariffs and make me invest it here in The US Sure. So I can basically buy some time. Don't just come down with a, you know, just absolute hammer because I can't like, I can't set up a factory in three months even if I wanted to spend, you know, a billion dollars.
Speaker 8:Right? Yeah. They announced today that they would do they'll allow you to expense a % of CapEx if you're building a factory. This could be really big, like Yeah. First year straight line depreciate the Yep.
Speaker 8:Amount of the build out. So, you know, more policies like that might Yeah. Go into industrialization.
Speaker 1:Can you paint me a picture of who the who the major power players are in DC? Are are there trade organizations that are doing stuff here? We've seen some of the different, like the longshoremen's union. Are they Do they have a view on this? Are there different organizations and and leaders who are, championing the the these causes.
Speaker 1:Representing business? Yeah. It seems like you are honestly one of the champions of like the e commerce community.
Speaker 8:Trying to do that In many ways. On behalf of our customers.
Speaker 1:Yeah. Behalf of your customers. But are there other more official organizations?
Speaker 8:I'm sure there are. Natch NRF. Yep. National Retail Federation Sure. Is typically the the main channel Okay.
Speaker 8:For this. There's a few others I'm not that familiar with. Sure.
Speaker 1:Sure. Sure.
Speaker 8:The big CEOs are going direct.
Speaker 1:I mean, you've seen they they were all at
Speaker 8:the White House.
Speaker 1:Yeah. Yeah.
Speaker 8:The but, yeah, not really much of a voice for small business
Speaker 1:and stuff Yeah.
Speaker 8:So we're trying to do that. I'm sure there's all kinds of lobbyists. You you mentioned the long term. And so the ILWU is the West Coast Sports Union. They came out and posted tariffs last week.
Speaker 1:Okay.
Speaker 8:ILA endorsed Trump. Yeah. And they have not come out. Oh, okay. ILA is the East and Gulf Coast Sports Union.
Speaker 1:Yeah. The ones that went
Speaker 8:on strike last September.
Speaker 3:Yeah. But but much less affected yeah. Yeah. But isn't there aren't they much less affected because it's not trade with with
Speaker 8:A lot of trade no. A lot of a lot of the East Coast
Speaker 3:trade Panama?
Speaker 8:Comes through the Panama Canal Yeah.
Speaker 3:Sure.
Speaker 8:Or through the it used to be through the Suez, but around the Cape Of Africa right now. So, yeah. I mean, they gotta be opposed to this. It's bad for their business, but Trump, you know, helped
Speaker 1:them to get talk around the Panama Canal beneficial to trade long term if that happens? Whatever Trump was talking about, like taking more control there, not letting China grab it? That is so It felt like it kind of fell out of the news because the tariffs are so
Speaker 9:much bigger. But The
Speaker 8:crazy thing about Trump is that a lot of these stories of things that he's done or
Speaker 1:said Yeah.
Speaker 8:Or actions would be like the story of the year Yeah.
Speaker 1:For like
Speaker 8:a normal president. We're jamming Last two days. No.
Speaker 1:Yeah. We love driving
Speaker 3:things at once.
Speaker 8:Yep. The media can't keep up. Certainly, the Democrats definitely can't keep up. Yeah. None of us can keep up.
Speaker 1:Yeah. It's it's wild.
Speaker 8:The Panama One was they're trying to get them to the the two port the ports on either end. It's not the canal itself, but ports on either end Yep. Owned by Li Ka Shing
Speaker 1:Sure.
Speaker 8:Hong Kong based Okay. Billionaire.
Speaker 1:Yeah. Which is
Speaker 8:made in Hong Kong. He went to sell it. The Chinese blocked the sale Interesting. Which I think I've seen that the Trump administration argued that the very act of the Chinese being able to block the sale Mhmm. Is a potential violation of the treaty by Yeah.
Speaker 8:Which The US handed over the Canal Zone Sure. Sure. To Panama. Yeah. Okay.
Speaker 8:Now, they're threatening, maybe we'll invade again and take it over. I don't think we anyone wants to see that happen.
Speaker 1:Okay. That's interesting.
Speaker 8:It doesn't I don't think from an efficiency center that's
Speaker 3:We don't need another thing.
Speaker 8:I think I'm sure there's national security
Speaker 1:going through.
Speaker 3:What what have you heard about even I saw a story about iPhone suppliers not being able to get equipment out of China. Did you see anything about that? Oh. Is that even is that is that not even surprising?
Speaker 1:It very closely. I
Speaker 3:don't Yeah.
Speaker 8:I'm not sure.
Speaker 3:Yeah. Just kind of an intro you know, there there's there's, you know, the idea that we're we would decouple even the iPhone supply chain from China without The fresh sort of inward pressure from China.
Speaker 8:Things I heard here in DC is that they, like, senior people, shall not be names, have said that under 45 is a decoupling rate. Mhmm. Yeah. They understand that. That at that tariff level, these economies will decouple.
Speaker 8:Yep. And that's evidence now with the 60% decline in bookings, like, basically instantly.
Speaker 1:Yep.
Speaker 8:And that that's not where they want to be. They do not Sure. They tend to do a decoupling.
Speaker 1:It's more strategic decoupling.
Speaker 8:In a dramatic fashion on such a short time scale Yep. Etcetera. I I think that that speaks to, like and Trump has said as much that they're gonna lower the tariff rates.
Speaker 1:Yeah. It's just
Speaker 8:a question of when and how low do they go Yeah. Is the big those are massive variables. My view is that when it needs to happen almost right away, I don't like, if they last a couple if they wait a couple months, I think you're gonna huge fallout and damage to the economy and small business going getting wiped out in employment and all that stuff, inflation. How low? I don't really have a good read on that, like Mhmm.
Speaker 8:At what level is to no one's gonna tell you honestly. Yeah. Of like, Bloomberg asked me this morning
Speaker 5:what level? I'm like, 0%. Zero
Speaker 8:Don't ask me.
Speaker 10:I'm freakin'
Speaker 1:drink know my business.
Speaker 8:So, I don't know what level it needs to be for business. I don't think anyone really knows though, like these models are super complex.
Speaker 1:Yeah. Totally. And there's only second and third order
Speaker 9:effects.
Speaker 8:Yeah. Like, it's really hard to predict.
Speaker 1:We'll have to keep tracking it.
Speaker 10:And then you have,
Speaker 8:like, what's the dynamic by which Trump can walk this back?
Speaker 1:Sure. Yeah.
Speaker 20:Like, I
Speaker 8:think he needs a scapegoat.
Speaker 1:Yeah. He needs to
Speaker 8:find someone and blame them.
Speaker 1:Blame
Speaker 3:them. We should find somebody from the event. There's gotta be one guy. There's gotta be one guy there.
Speaker 1:We're probably here.
Speaker 3:Yeah. Delian? Delian?
Speaker 1:It's your fault. You gotta
Speaker 3:you gotta do something for the country.
Speaker 1:Delian's like, I'm only interested in space, actually. Anyway, thank you so much for coming on. This is fantastic. I'm Thank you so much.
Speaker 3:I I want the tariffs to end so you can get a good night's sleep.
Speaker 1:Yes. Yes. Yes. You deserve it. Anyway, let's bring in Augustus Dorico.
Speaker 1:Welcome to the stream, Augustus. Third time another third timer on the show, Augustus. How's it going, doc? Welcome. How are doing?
Speaker 1:The hair is looking amazing. Thank you for the weather. It's fantastic. Not too hot, not too cold. Yeah.
Speaker 1:I got feel like you pulled some strings.
Speaker 22:The pleasure's mine.
Speaker 1:Yes. Exactly. We got here and we
Speaker 3:were like, I I was making a joke. I was like, wow, our politicians, the the swamp would set up in one of the nicest climates I've been in in a while.
Speaker 21:And I
Speaker 1:was like, it's normally We're
Speaker 3:here on like, we're here on like the
Speaker 1:one nice week of the year.
Speaker 7:Yeah. Yeah. Yeah. With a with big fluffy cumulus clouds. Beautiful cumulus clouds.
Speaker 3:Yeah. Seated should we want. Yeah. Have have you been here in DC a lot less than random state legislate Yeah. Yeah.
Speaker 3:You know, capitals.
Speaker 7:Yeah. I mean, for those that don't know, there were we're up to 33 states as opposed to weather modification.
Speaker 1:33?
Speaker 3:Wow.
Speaker 7:However, 18 of those bills were either dropped, amended to carve out cloud seeding, and still ban chemtrails, which is gonna be crazy.
Speaker 3:Okay.
Speaker 7:Because those bills will pass and then people will still see chemtrails.
Speaker 1:Sure. Yeah. Yeah.
Speaker 7:Yeah. Or, Montana, great case, we showed up there, we're like, hey, cloud seating's pretty cool, Yeah. Then they funded a program.
Speaker 1:Oh, that's great. So, yeah. Okay.
Speaker 7:We'll be expanding there. But the folks in DC that we met with, they all are way more level headed and just say like, hey, we're not gonna concern ourselves with all QAnon thing. Cloud heating seems like a great water supply tool.
Speaker 3:Yeah. We'd love to start working
Speaker 7:on report language, etcetera etcetera.
Speaker 1:Yeah. That makes sense.
Speaker 3:How how much is water scarcity a factor in re industrialization? I mean, we we Even last week, we were talking about how the oil oil the the the water demands of oil production Mhmm. And just how absolutely insane they are, not to mention they end up with a bunch of water that they don't really know what to do with they're trying to evaporate. But how much is that a kind of a factor and and are you What kind of conversations have you been having here at the event?
Speaker 7:Yeah. You know Jensen gave his speech earlier today. Right? And I think a lot of people intuitively Called this.
Speaker 20:Yeah. Sorry.
Speaker 7:A lot of people intuitively talk about how energy is this like fundamental primitive in all industrialization, so are critical minerals, so is now intelligence and human capital. Water, because nobody has ever had any ability to like work on it and provide Yeah. New supply, has kind of just been this assumed limitation. It's going to be necessary to produce more should we want to build up this industrial base, should we want to ag production. Particularly like the t m the TSMC plant in Arizona Yeah.
Speaker 7:Nobody knows where the water for that's gonna come Really? Yeah. Yeah. Like, you need it to come from either the mountains in Flagstaff Yeah. Or the Colorado River.
Speaker 7:And the only way to get it, there's cloud seeding.
Speaker 1:There are crazy stories about the water at TSMC. If it's slightly saltier, it affects like the yield of chips and stuff. It's like total alchemy.
Speaker 7:Oh, yeah. No.
Speaker 1:It's So
Speaker 7:yeah. Yeah. Like there's all these aerospace parts. CP talks about this all the time. Oh, yeah.
Speaker 7:Like, yeah. Like, there's some parts made in Michigan. First power?
Speaker 10:Yeah. Okay.
Speaker 7:That people
Speaker 10:c three p o. Yeah.
Speaker 1:Anyway.
Speaker 7:And it's like, yeah. There's like a little bit more of whatever in the water in Michigan Yeah. And without it, then you can't make like the lubricant.
Speaker 1:Same thing with the tap water in New York. Makes the good pizza and bagels. Right? Jordy won't touch it, but
Speaker 3:Yeah. That's hot water in DC is rough.
Speaker 1:Yeah. He's not a fan. Not a fan. He's not a fan. Anyway Yeah.
Speaker 3:Yeah. What what you'd bring us into some of the other conversations that you've been having here at the event. What what's exciting? It it Yeah. Walk us through that.
Speaker 7:Yeah. I mean, I think for one, deepening our collaboration with The Middle East. Right?
Speaker 2:Like Mhmm.
Speaker 7:It's no secret people talk about the Trump admin and how close they are to MBS, to The Emirates, otherwise. Think that because that country is very seriously like enacting this vision for a crazy future, for greening Saudi Arabia, for
Speaker 1:Yeah.
Speaker 7:Billions and billions poured into AI. One, they're a great capital partner for a lot of like the tech ecosystem that wants to like grow out of its nascency and deploy, but also I think they like make us look in the mirror about what's possible. Yeah. So talking to people that have been doing work there, that's exciting. Talking about how we're collaborating in The Middle East, that's a big deal.
Speaker 7:What's the name of that like regulatory portal? You like submit a paragraph and it's like, get rid of this regulation, please. Oh.
Speaker 1:Doge. No no no. Bitcoin or something.
Speaker 7:It's like the it's like the FTC
Speaker 10:has And
Speaker 7:you just go like, yeah, get rid
Speaker 22:of this.
Speaker 7:And if accept your
Speaker 1:You can just tweet it Elon actually if you want Yeah.
Speaker 3:Gary Tan.
Speaker 1:Gary Tan. That does it usually.
Speaker 7:Exactly. If you get it approved though, they name the like new regulation
Speaker 1:you wanna do that. Speaking of like national regulation, is there any obviously, the first time we met you talked about China planting trees and terraforming the Gobi Desert. Is that is there any world where that becomes like a national policy or do you still need to go state by state?
Speaker 7:No. Dude, So, secretary Burgham gave Yeah. These great remarks this morning Yeah. About how all of our federal lands should be considered a national asset.
Speaker 1:That makes sense.
Speaker 11:Totally makes sense.
Speaker 1:And we probably have I think of federal lands as like the forests and, like, you know, Yosemite. But there's probably federal land that's desert. Right? Yeah. No.
Speaker 1:There's tons of Tons.
Speaker 17:Tons. Tons.
Speaker 7:Yeah. Yeah. Millions upon
Speaker 1:millions convert this into the next Yellowstone? Exactly. Create a Yellowstone Club.
Speaker 7:Dude, like next Yellowstone Yeah. Which would be sweet Yeah. Or also more timberlands Yeah.
Speaker 1:Which you can harvest. Farmlands.
Speaker 7:Yeah. Exactly. So like all of it or just give it to Teddy and have him tear it all up and strip mine it or something. Yeah. That's also fine with me.
Speaker 7:As long as you have a proportionate amount of new Yellowstone.
Speaker 1:Wait. Who's Teddy? Feldman. Oh, Feldman. Okay.
Speaker 1:Yeah. Yeah. Yeah. From Duran. Yeah.
Speaker 1:Yeah.
Speaker 7:Sorry. Gundo Brain.
Speaker 1:Yeah. Yeah. Everyone's on first name. C. P.
Speaker 1:Teddy. Yeah. Yeah. Yeah. Yeah.
Speaker 1:Really not doing a lot for the listeners at home who might not be familiar inner workings of the Gundo politics. Yeah.
Speaker 3:Where are you headed next? Back to the Gundo?
Speaker 7:I get on a midnight flight back to Gundo.
Speaker 1:Okay.
Speaker 7:I'm gonna interview a bunch of scientists. Okay. And then I get on a midnight flight tomorrow to Florida. And then on Sunday Most By
Speaker 3:the way, most brutal flying midnight flight.
Speaker 1:You land at like 3AM. The worst, and then you're back on an overnight. And the overnight to Florida is terrible, because it's only five hours so you can't even get a full night sleep.
Speaker 7:You get cooked. Well, did Salt Lake to DC this morning. Yeah. First of all, flew into Dallas. Huge mistake.
Speaker 3:Yeah. But That's on the
Speaker 7:rough row was empty, so I laid I know
Speaker 1:you laid down. That's great. Yeah. Good. There you go.
Speaker 1:Hopefully, you can get some sleep. Hopefully, you can make it through those flights. We appreciate you stopping so much. This is, like, always good to have you on. Are you on the couch for the road?
Speaker 1:Sure. Of course.
Speaker 3:Hey. Thank you.
Speaker 1:You can take this whole tin.
Speaker 3:Wow. There you go, man. What a what a guy. Yeah.
Speaker 1:Nice. Anyways, we bring in the next guest. Who do we have? I know we got a couple folks here. Let's bring him down.
Speaker 1:How you doing? What's going on? I met you the last Hidden Valley. Yes. Welcome.
Speaker 1:Welcome to the stream.
Speaker 3:Good morning.
Speaker 2:Good to
Speaker 1:meet Would you mind, doing an intro for the for the viewers? Introduce yourself, the company. What do you do? How are
Speaker 3:you I'm grabbing the microphone.
Speaker 1:At Hill Valley. Yeah. Grab Just so can take it and then just There you
Speaker 23:go.
Speaker 1:Hold it like you're giving a speech at the most important event at Hill and Valley.
Speaker 6:Awesome. Well, thanks again for having me.
Speaker 5:Good again. Yeah.
Speaker 6:So I'm JC Patesh. I'm the founder and CEO of Fuze. Yeah. We're a fusion company working to accelerate the world's transition to fusion energy
Speaker 1:Yes.
Speaker 6:While also safeguarding humankind. So it turns out if you try to create an artificial sun on Earth in a bottle Mhmm. And use a lightning bolt to implode a pellet of fuel Mhmm. That's really useful also to ensuring the safety, reliability of our nuclear arsenal. Yep.
Speaker 6:And so we're, you know, very committed to continuing to help The US modernize its nuclear arsenal and being offering radiation Yeah. As a service.
Speaker 1:Yep. Yeah. When we talked
Speaker 10:as a
Speaker 1:service. It was fascinating because you were much more commercialized than most other nuclear founders that you talked to who are more in the let's get all these approvals, let's build the big thing. What has that commercialization been like, and can you concretize the actual product that you're selling into who?
Speaker 6:Yeah. Yeah. So we have customers both in the US government and and two, you know, public companies.
Speaker 1:Sure.
Speaker 6:And the the way we've built two machines that are operating today. Mhmm. One is the world's highest power energy delivery system. We call it Titan, and we publish. It's one terawatt, but for a billionths of a second.
Speaker 6:One terawatt. Wow. But for billions of a
Speaker 1:second Yeah.
Speaker 6:20 word of the whole 20% of the whole world power production. Yeah. But it's just for billions of a second. Yes. And it's not a fusion machine.
Speaker 5:Okay.
Speaker 6:It's just an energy delivery system.
Speaker 1:Sure.
Speaker 6:Interesting. What it creates is it creates pulses of radiation
Speaker 15:Yes.
Speaker 6:That are so intense Yeah. And then you can expose electronics or materials and see how they behave.
Speaker 1:Okay.
Speaker 6:So you're creating hostile environments similar to what would happen in, you know, made hostile environments and expose electronics, materials to those types of radiation, whether it's X-ray, neutrons Yeah. And see how they would behave. Yeah. And that's really critical to ensuring reliability, safety of critical assets in space Interesting. As well as now conventional systems.
Speaker 6:Okay. And I don't know if you saw last week, but there was an announcement that The US will be spending 946,000,000,000 over the next ten years to modernize the arsenal and its 25% increase in budget since 2023, so it's a big deal. Yeah. And by producing this radiation and reducing the dollar per rad and, you know, the availability of radiation, we can, you know, save taxpayers billions of dollars while offering radiation as
Speaker 9:well.
Speaker 3:Yeah. Talk about the energy requirements of reindustrialization, which is the theme of Hill and Valley. I think a big question is, like, okay, where's where's the power gonna come from? Mhmm. Even if you're not looking at at AI.
Speaker 3:Or a lot of the conversations that you're having here around with some of these bigger, you know, companies that that want to come back to The US, but wanna make sure that they're able to You know, just have energy. And structure to actually thrive here.
Speaker 6:Yeah. It's it's a really challenging problem. I love the quote from Jensen today where one gigawatt is like $60,000,000,000, and it's the annual revenue of Boeing.
Speaker 3:Yeah. Yeah.
Speaker 6:That's clearly not gonna work out very well. Yeah. The good thing about Fusion you know, the first thing I'll say, which may be a bit controversial, but Fusion is still, like, we're still far from commercializing it, so it's probably going to take a decade or two to actually put electrons on the grid. But it's still really important, and we can't afford for another country to get there first. But the good thing about Fusion is that it's location independent.
Speaker 6:So you can put it anywhere you want, right? The fuel is hydrogen, which can be found in seawater.
Speaker 1:Sure,
Speaker 6:sure. You can literally take a data center
Speaker 8:and
Speaker 6:build a fusion plant right next to it, and not have to integrate with the grid.
Speaker 3:Yeah. And I
Speaker 6:think fusion being, you know, safe, clean, abundant, on demand makes a really appealing case for industrials because you can build a power plant right next to your industrial plant, whether it's data center Yeah. A steel factory, glass factory
Speaker 1:Yeah.
Speaker 6:Etcetera. And when you think about, you know, the changes that have happened over, you know, in industrialization, you know, there's been no new nuclear facility built in decades. So the workforce that actually knows how to build is gone. Whereas, like, China is building dozens of plants, we've seen satellite imagery recently that's become open source on exactly our footprint of our facility being built. And so we just cannot afford for China to become for fusion what Saudi Arabia has become for oil.
Speaker 6:Yeah. Yeah.
Speaker 1:So is that is that the long term business plan for you? Like, find commercial applications today that advances the R and D pipeline for ultimately q greater than one fusion production that can be grid scale?
Speaker 6:Yeah. Great. So so we know q greater than one, all this stuff, it's great, like, pat on the back, good for you, you may do it. But ultimately, it's how much does it cost?
Speaker 1:Yes. Q engineering or Yeah. Well, q commercial. Q commercial. I guess.
Speaker 6:Right? And and also reliability, like if Fusion is not a baseload power, which means it's running 99.9% of the time, how is it really competitive with other sources?
Speaker 1:So you're doing one billionth of a second now, and you need to get to twenty four seven. Yeah, which means So you're 10 doubles away, I guess.
Speaker 6:Well, we just need to increase the rep rate, so we'll still be pulsed, but just increasing the repetition rate.
Speaker 1:And and that's that's the thing with fusion, because even Helion is like pulsed. Right? That's the idea?
Speaker 6:Our pulser today operates at point one hertz frequency. Okay. But we still blow up the chamber, and that's still something to work on. But the good thing is, you know, the way we say it is radiation as a service, is we're getting paid today to produce more radiation. Mhmm.
Speaker 6:The cheaper the radiation, the higher our margins.
Speaker 1:Mhmm.
Speaker 6:And the more we fire, the more money we make. So we're getting paid to optimize our radiation service, and radiation is ultimately energy. Yeah. And so we're getting you know, we're building a sustainable business to get to the sustainable future that we all want. And there's a massive multi billion dollar business to be built along the way, which is what, you know, a lot of our investors on the road
Speaker 1:That makes sense.
Speaker 6:To get this
Speaker 1:Yeah. Where where is the business now? How many employees? How big?
Speaker 6:Yeah. So so we have around 50 people now. We've got a couple millions in revenue.
Speaker 1:Awesome.
Speaker 6:We're on active contracts supporting
Speaker 1:for fusion companies. Congrats. Yeah. It's very cool. Yeah.
Speaker 1:Thinking outside the box.
Speaker 6:And Fantastic. We're still we're still humming.
Speaker 1:Well, good luck to Thank you so much for stopping by. Thanks for coming on. I hope you have a fantastic rest of Hill and Valley.
Speaker 24:See you out on the floor.
Speaker 1:Yeah. Yeah. Thank you. We'll see we'll see you later. Got anyone else?
Speaker 1:Yeah. Eric Tornburg wants to stop by. Talk to group chats. Eric, get in here.
Speaker 3:Get over here.
Speaker 1:I I have a bone to pick with you.
Speaker 23:See
Speaker 1:you. I saw you. You posted that you started a new group chat, and I'm not in it. Don't worry. This is I was so looking forward to getting added to something where a bunch of people are yapping and I have to put on mute because
Speaker 3:and then also
Speaker 1:Yeah. No. I learned my lesson. The next one, I'm yapping so egregiously that I definitely get in the hit piece.
Speaker 12:You you will be you'll be you will be invited. Yeah. You know, can kill Chatham House, but they can't kill the idea. Yeah. It's going to resurge again.
Speaker 12:Of course, it's
Speaker 1:still Yeah.
Speaker 12:It's still running. You know, even if the world had a nuclear war Yeah. Mark Cuban and Brian Goldberg would still be there every Yeah.
Speaker 1:So, figure
Speaker 3:it out.
Speaker 12:Figure it out.
Speaker 1:Yeah. Have we gotten to the bottom of who Ben Smith is? It sounds like a generic name. Sounds like a fake alias. It's something that you see on a lot of fake IDs from Yes.
Speaker 1:You know, high school students that are trying to buy beer. I'd love I don't wanna I'm not a big fan of doxing, but I'd love to get to the bottom of who this man really is.
Speaker 12:Ben Smith, you know, dox the group chat.
Speaker 1:Yes. He is That doesn't mean that we should dox him, but I wanna know personally.
Speaker 21:I'm not
Speaker 1:gonna share it. Yeah. No. I agree. I wanna know.
Speaker 1:Who is who is Ben Smith, really?
Speaker 12:I think he's saying Anon for now.
Speaker 1:Okay. I wanna respect that. Yeah. I wanna respect that.
Speaker 12:You know, he he
Speaker 3:He's very kind.
Speaker 12:I I follow the paradoxical commandments, you know, even if people don't even if people dox you, don't dox them.
Speaker 1:Don't dox them. That's smart.
Speaker 12:We'll keep his identity private. But I do know that as an anon, he did publish the Steele dossier
Speaker 1:Oh, yes.
Speaker 12:Did. While he was at Buzzfeed. And I also know that he apologizes. Okay. Or almost regrets it.
Speaker 1:Okay.
Speaker 12:Okay. Yeah. Which to me is as good as an And I believe that people can grow and change
Speaker 1:Yeah.
Speaker 12:And so I'm proud of him. Okay. Because There
Speaker 3:you go.
Speaker 1:Yeah. That's very sweet. Yeah. Any other lessons from the from the story, from group chats? Where's the future?
Speaker 1:What what what's next? What do think?
Speaker 12:Well, I think, you know, I got a lot of people emailing me being like, you know, people like I play pickup basketball with that don't even know being like, how could you platform Tucker Carlson? Oh, yeah. Like how could you do
Speaker 1:it? Yeah.
Speaker 12:Like how and I'm like, I'm sorry. You know, first off, regret to inform you that Tucker Carlson's pretty big already. Yeah. And also it's a private group chat, so I'm not sure exactly how I'm platforming Tucker But So a lot of people are angry that people are getting together
Speaker 1:Sure.
Speaker 12:And having conversations.
Speaker 8:Yeah.
Speaker 12:But, you know, we're gonna keep doing it.
Speaker 1:Yeah.
Speaker 12:Yeah. We're gonna keep doing it.
Speaker 17:I'm not leaving. No.
Speaker 1:The goal was
Speaker 12:to have a left right exchange, and we're gonna keep
Speaker 1:Yeah. That was the original
Speaker 12:trying to to make it together. I I invite more of my friends Yeah. On the left and the right to to be a part of it. And You
Speaker 1:haven't gotten any emails? Well, how could you platform Mike Cuban?
Speaker 12:But no, didn't I didn't get emails that, but I got DMs every day
Speaker 1:Yeah.
Speaker 12:While Chain of House was going of like, why is Mark Cuban here? Yeah.
Speaker 1:It's good. It's an anti echo chamber.
Speaker 21:And how does he
Speaker 12:have so much time to Yeah. To chat every day. And my theory is that the the pinnacle of Maslow's hierarchy of needs is being a poster.
Speaker 1:Yes.
Speaker 12:Once you've truly made it
Speaker 1:Yes.
Speaker 12:Then you could just post all day.
Speaker 1:Yes.
Speaker 12:Yes. We have this ongoing fight with Antonio Garcia Martinez Sure. Who now we should call Antonio Gracias the the Valor guy because he's always getting mistaken for him.
Speaker 3:Oh, yeah. And It is it is funny. He should just own it.
Speaker 12:Oh, yeah. Yeah. Just renames them.
Speaker 3:Antonio Gracias.
Speaker 12:Yeah. Because he they're like, great speech today when he did the Doge thing.
Speaker 1:Oh. He's like, what?
Speaker 10:Talk to him? That's hilarious.
Speaker 1:Yeah. You should have him on and just,
Speaker 12:like, talk about
Speaker 1:Yeah. We should have them both on.
Speaker 12:Yeah. Think you know
Speaker 1:that doing Yeah. You you know, you get both of the Yeah. You know, both of Balogies on, both of Sri Rams on. There's four Kevin Zhangs. We're gonna get all of
Speaker 12:them on. Yeah. So we have this bit with Antonio where he's like, as soon as I'm rich, I'm getting out of this.
Speaker 1:Yes.
Speaker 12:Like, as soon as I'm richer, he just wants come
Speaker 1:up it.
Speaker 12:As soon as I'm like, you know, much richer, I'm getting out of group chats
Speaker 1:Retiring.
Speaker 12:Getting out of Twitter.
Speaker 1:We're talking.
Speaker 12:And of course, know, Mark Andreessen's in the group, all these other people who have done phenomenally well and are just posting all day. He's like
Speaker 1:Enjoy it.
Speaker 12:They're like, you'll never leave.
Speaker 1:This is the best.
Speaker 12:Yeah. In fact, you'll step it up.
Speaker 1:You'll step
Speaker 3:it Yeah.
Speaker 12:So I think the demand is there, I think the supply is there, and we're gonna we're gonna keep doing it.
Speaker 1:Yeah. Do do you think these It's
Speaker 3:so I I have to say, I mean, I think people don't realize, like, how much work everybody, whatever, four years ago was, like, everybody should have a community. And then you had companies making Slacks and Discords or things like that. And it just takes, like, a massive amount of work to sustain
Speaker 6:Yeah.
Speaker 3:That's like not we talked about last time you were on the show, this sort of like admin lift. There's software solution, but then there's like cultivating and there's like selecting like who should be in a group and all these different things. And it's actually makes so much sense to have a third party like do that, not have it just be on one member. One day they might wake up and they don't wanna do it anymore. But should the group die?
Speaker 3:It's like, no. The group should be able to live on, and so having a
Speaker 1:What's the ideal size? Are you Dave Moran had Path, it was a hundred Yeah. 50. Yeah. What's that?
Speaker 1:Dunbar's number. I think Chatham House got up to like three thirty. Yeah. Yeah. Well
Speaker 12:Chatham, what are your best practices? Chatham got too big. I think, you know, dozens of spin off groups have formed. Sure. And it's like ten, twenty, 30.
Speaker 1:Yeah.
Speaker 12:You know, I think it's a it's a good question. I will say, I'm a bit of a street group chatter. Sriram and ACC, these are academic. You know, they have a rigorous operation. They they have community managers.
Speaker 12:I'm excited to lead co lead this operation with with Anish
Speaker 3:still see Brian,
Speaker 1:they pop up.
Speaker 3:They pop up.
Speaker 12:Yeah yeah.
Speaker 3:I'm doing the show, I'm like, what are they fighting about? We should probably talk about it on the show.
Speaker 12:Yeah yeah yeah yeah. Exactly. I'm willing to say publicly that, you know, so nobody kill except this Anon guy, Ben Smith. Yeah. Who I I
Speaker 1:At bottom of
Speaker 12:some Exactly. At the bottom of some point. But outside of that, you know but I will say even before that, it was getting too big.
Speaker 6:You sure?
Speaker 12:And I will also say that on the record that nobody killed Chatham House, but Brian Goldberg did kill Chatham House. A little a
Speaker 21:little bit.
Speaker 12:I love Brian Goldberg.
Speaker 1:Yeah. I actually learned a
Speaker 12:lot from him.
Speaker 1:But he's
Speaker 12:very active.
Speaker 1:Sharing, like, his business experience, and I I I was unaware of him as a founder
Speaker 23:or Totally.
Speaker 1:Or a business operator before, and and the other the other names were kinda, okay. Already know their their bit and I know their shtick
Speaker 12:and No.
Speaker 1:No. I So I wasn't loving how outspoken he is.
Speaker 12:Yeah. He's also a media tycoon Exactly. Yeah. In the women's space.
Speaker 1:Yeah. I own fashion magazines. Yeah. I own fashion
Speaker 21:magazines. I don't I don't know
Speaker 1:who to
Speaker 12:I was like, do tariffs affect your business? He's like, well, we have some advertisers.
Speaker 1:Like, oh, yeah. Yeah. He broke that down very easily.
Speaker 12:He's brought a lot to it, and Yeah.
Speaker 1:Very cool. Anything else?
Speaker 3:What what's exciting so far about Hill And Valley? Is it nice to it must be nice to be at an event or like a social community thing that you didn't put
Speaker 1:together yourself. Yeah. And I
Speaker 12:I was just at the American Diamond Summit last month. That was fantastic too, and and this is also fantastic. I mean, think it's just amazing how how how big this space is. I will say it's like and you guys have covered it on the show, but it's like This is like the new Silicon Valley. I feel like when Paul Graham made that Palantir tweet Yeah.
Speaker 12:It was like a clash between sort of old Silicon Valley
Speaker 1:Yeah.
Speaker 12:And and new Silicon Valley. It's interesting to just sort of see not just the new people that have emerged, but sort of the new ideas around building companies. Yeah. Like it's not just sort of make something people want and just talk to customers and just build something in a day. I feel like maybe
Speaker 1:he's right. Maybe there'll be a crack founding team, ex Anderil, ex Palantir, digital ads. Digital ad startup.
Speaker 3:Well, one one thing
Speaker 1:that could be problem.
Speaker 3:Had Mike Solana earlier on the show, and he was basically talking about how, like, Ezra Klein's whole abundance Yeah. You know, theory and ideas, like, a lot of the stuff that he had, you know, was like five years ago. Yeah. Like this idea of charter cities and of, you know Yeah. Energy production and and all these things.
Speaker 3:I think we're all on the same team. That that's what I just appreciate about Hill and Like, number one person on the hillside of the event is that gets brought up is Richie Torres. Yeah. I know. And I think people associate, you know, a lot of these different characters with the right, but so many of these issues are just American issues
Speaker 12:A hundred altogether. Matt Iglesias, who was a Chatham House member for, I think, a week before he Mhmm. Decided to to to leave, and who I'm a fan of he tweeted a platform for the new for the Democratic Party, and David Sacks quote tweeted and said, this is conservatism. Yeah. So there does seem to be a lot of convergence.
Speaker 12:I I I love what Derek and Ezra are doing with with Abundance, sort of bringing free market economics to to the left in a in a way that is palatable Yeah. And accessible. It's more nuanced than that, of course, but Yeah. Yeah. There seems to be a convergence happening, and if we have a sort of both parties, you know, being more moderate, moving to the middle, you know.
Speaker 12:Yeah. That that all that.
Speaker 1:I I I think the future of American politics is something I'm calling like far centrism, or alt I like that. Just just the most extreme centrism. This is the future.
Speaker 12:Yeah. Just
Speaker 1:being really extreme about it. Unless unless there's representation by both houses, we have a split Yeah. Split house and senate, I'm not happy.
Speaker 12:Yeah. Anyway. It is it is really interesting.
Speaker 1:Yeah. It's fun time.
Speaker 3:How much time are you expecting personally to stay in Washington? Have a lot of places you could be spending time in. Is it an area that
Speaker 12:Well, we we I'm You know, it's my second week on
Speaker 6:the job.
Speaker 12:Yeah. We have a robust DC operation. I want us to tell that story a bit more Sure. And help.
Speaker 1:Yeah.
Speaker 12:So we're gonna do a policy
Speaker 1:Yep.
Speaker 12:Podcast. And so so I wanna spend more time here. And also bring on people who are really at the intersection
Speaker 1:of VC and It does seem like it fits really. Like, the like, we were talking about this, like, lobbying adjacent VC activity, introductions to people on Capitol That feels like it definitely fits into the injuries and machinery. Totally. Of like, hey, if you're doing enterprise sales, like, they'll set you up with bunch of people. Yeah.
Speaker 1:PR was often something that they were very, very good at. Even hiring, you know, find your VP of engineering. Totally. Doing some light lobbying. Maybe not being a lobbying firm or but introducing to the right things, making sure if there's a government relations organization, you know how to build that.
Speaker 12:And I love that we're all so collaborative on this because it just moves the whole industry forward. Like, have same crypto policies, same AI policies, same policy across it just helps everybody, so
Speaker 1:Great. Yeah.
Speaker 12:That's a place where we all get to bring them together. One thing I also just want to say is Gavin Newsom's another example of somebody trying to move to the center Yeah. And, you know, bringing on Charlie Kirk and
Speaker 1:Extreme Centrist. One
Speaker 12:of podcast. Let's make that a thing.
Speaker 1:Var Centrist.
Speaker 12:Yeah. Var Centrist. Var Centrist. I hope that it works out. I hope that it helps him in the primary or
Speaker 8:Yeah.
Speaker 1:Seems like he's better off for every American Yeah. If there's more, like, unity across the aisle. Understand.
Speaker 3:I just wanna know I Yeah. No longer contrarian. Yeah. And so, it's just like a big thing I'm trying to figure out while we're while we're, you know, here is like, you know, what what is the thing that nobody's talking about today that will be, you know, maybe the the entire subject matter
Speaker 7:of Yeah.
Speaker 3:The Hill and Valley or the or, you know, the next American dynamism summit in a couple years.
Speaker 1:Hundred percent. Chat with yourself. Chat dynamism. Exactly.
Speaker 12:Whenever whenever Catherine or or whoever on the team has it, we'll we'll be on TVBN
Speaker 3:for my last my last thought here is is it feels like group chats with people that you don't know that have differing beliefs are the antidote to GPT four o
Speaker 12:A %.
Speaker 3:Agreeing to whatever you're Totally. Saying. Totally. It's like you go on chat GPT Highly disagreeable. You know what, boss?
Speaker 3:Like, you're a % right. Like, everyone else is wrong. You are right. Yeah.
Speaker 1:And then you go on
Speaker 3:a group chat and it's a way to get It's like, fuck you. Yeah. Yeah. Yeah. Yeah.
Speaker 3:Exactly.
Speaker 12:You're wrong. No. No. Yeah. Make disagreements great again.
Speaker 12:And, yeah, hopefully we can continue to be in these spaces.
Speaker 1:Yeah. That's a great place to end the show. Thank you for watching.
Speaker 3:With Eric.
Speaker 1:Thank you. Thank Thank in. Great weekend. We hope you enjoyed the stream. We'll be posting a ton of clips, and we will see you tomorrow Alright.
Speaker 1:Or Friday, depending on when we get back to LA. Talk to you Bye.