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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching TBPN. Today is Monday, 12/15/2025. We are live from the TBPN UltraDome, the temple of technology. The fortress of finance. The capital of capital.
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Speaker 1:So Tim Sweeney was taking a victory lap. I kinda sort of missed this. This was last Thursday. Basically, the Ninth Circuit struck down, you know, Apple trying to do something else in the Apple tax battle with the epic game. So a quick quick refresher on this.
Speaker 1:Tim Sweeney says the Apple tax is dead in The United States. This particular nail in the coffin comes from the Ninth Circuit. These things are never fully over, I've learned. Like, it's just it's just there's there's a class action lawsuit, then there's another lawsuit, then there's this one, then there's appeals, then they go to the supreme court, they go back to the supreme court. It's always up and down, like, know, like, that's just the nature of these things because the stakes are so so high.
Speaker 1:Exposure seems a little hot on that. What's going on there? But, basically, the court had had said that Apple could not charge 30% if a developer routed an app customer to their own payment page. And so Apple was like, yeah. Totally.
Speaker 1:We're cool with that. How about 27% plus 3% for payments and 27% for, like, IP licensing? And so, like, the end result was exactly the same. It was literally 30%. It was just, like, structured slightly differently.
Speaker 1:They just changed the language. And so they were they they were you know, this was contempt. Like like, you you know, it's like, you we we told you not to do this, and you're still doing it, Apple. Yeah. And so now they they they're they're not supposed to.
Speaker 1:Of course, like, the weird takeaway here is, like, these big momentous things happen, and then the stock moves like not at all. Because, of course, my conclusion from digging into this was that the fundamentally, like consumer behavior has built up over almost two decades now. I mean, the App Store launched, I believe, in 2007. This 30% fee, this initial this whole saga starts in 2011. This guy, Robert Pepper, he sues Apple along with three other plaintiffs.
Speaker 1:Mr. Pepper. Mr. Pepper, alleging that he was overcharged for iOS apps. Imagine I mean, that's not exactly what happened because it's like a class action lawsuit.
Speaker 1:It's much bigger stakes. But it's funny to imagine a guy just saying I'm coming for you, Apple. You know what? Flappy bird, I was charged $2 for it,
Speaker 2:should have been a dollar 70
Speaker 1:or something like that. A dollar 20. And and taking it all the way to
Speaker 2:the Supreme Court. Mean, if he's a flock Very fair. Whale, and he spent millions True. True. Tens of millions of dollars in the app.
Speaker 2:Yeah. Yeah. But, yeah, yeah, the the economics are a bit, you know, you wouldn't normally see somebody like that suing Apple because they're like, I you overcharged me by $2,000 across a lifetime, and I'm suing you for damages. And it's like a lawsuit that will you know?
Speaker 1:With class action lawsuit, obviously, you get a couple plaintiffs who are exemplary of the problem. And then Wrangle. When the settlement happens, it's like billions of dollars paid to everyone who ever purchased an app. Right? And and and you see these things before.
Speaker 1:Like, do you have did you use Facebook between 2016, 2017? You may be entitled to, like, 5¢. Right? Class action settlements happen all the time. Obviously, massive economic incentives for the for the lawyers who fight them.
Speaker 1:Anyway, before I continue, let me tell you about linear. Meet the software. Meet the system for modern software development. Linear streamlines work across the entire development cycle from road map to release. So, basically, the you know, Apple's gonna work to so now the the court ruled that Apple can't do that anymore.
Speaker 1:They can only collect fees that are in line with actual costs of facilitating links links to out to other other payment processors.
Speaker 2:So costs for one link.
Speaker 1:I know. I know. It is crazy. And the So, like, actually,
Speaker 2:need to use AI for this. Yeah. And we
Speaker 1:need to Yeah. No. No. No. That's actually what's gonna happen.
Speaker 1:So basically, right now, it's like the like if if I I'm I'm the I'm the App Store. I'm Apple. I have the App Store. You have your own app and you have your own, you know, Stripe account and you wanna pay you wanna accept payments your way. Apple says, well, you know, even though we're yes.
Speaker 1:You are checking out on your payment rails. It's your app. Like, I created the link and the technology that creates links within iOS, and that is helping you. So you gotta pay me an IP licensing fee. And, you know, typically, it was, like, 27% of whatever you make, which doesn't make any sense because, obviously, my as Apple, my my costs don't scale proportionally to your revenue.
Speaker 1:It's it's linear with regard to my cost. So, like, yes, if if Apple probably
Speaker 2:These are pricey links, John. These are pricey
Speaker 3:links.
Speaker 1:Like, you're laughing, but, like like, realistically, like, the the iOS team that has been on just just links. Like, there's there's code there. There's code there. Like and they get paid a lot. It's probably in the millions.
Speaker 1:It might be, you know, across all of the different amortized
Speaker 2:I know. But if you're if you're a cost
Speaker 1:half is a lot.
Speaker 2:If you're a successful mobile developer, you've been paying millions of dollars to Apple forever. And you're talking about millions like relatively fixed OpEx for Apple that, again, doesn't
Speaker 1:And they make $30,000,000,000 a year or something like that. So so so it's like it it like, have paid for the R and D by you know, fully. But, basically, you know, they're the the idea is, like, justifiable costs should be, like, $10, maybe, like, a $100 for reviewing an app and just saying, okay. We ran our software. We understand the the you is know, this violating any rules.
Speaker 1:We maybe had a human stop pop by and look at it for, you know, a couple minutes, make sure that this is compliant with the App Store. And and then there are obviously be other costs. But, you know, should it be millions of dollars? Should it be proportional to revenue? Should be 30% of revenue?
Speaker 1:A lot of people have been arguing no. But, of course, this will go back and forth, and Apple will probably try and make the the the the fee as high as possible, of course, because they have every incentive to. But what else is interesting about this? So so oh, the the other interesting thing is that in in Pepper versus Apple, there was this question of, you know, like, in the chain is the monopoly pricing having an effect? Like, where is it increasing the the price of the good?
Speaker 1:And so this all goes back. This is Ben Thompson's, like, the best chronicler of this whole saga, of course. And he he goes back to this Illinois brick company versus Illinois, the state of Illinois. And so this was in 1977, and the the Supreme Court held that only direct purchases of direct purchasers of illegally priced goods had standing to sue. So the the Illinois Brick case, this is pretty interesting.
Speaker 1:He says, the value chain was very straightforward. Concrete block makers, including the eponymous Illinois Brick Company, great name for a company that makes concrete blocks.
Speaker 2:Yeah. Illinois.
Speaker 1:They were accused of colluding colluding to fixed prices of concrete blocks, which were bought by masonry contractors. Masonry contractors in turn submitted bids to general contractors for construction projects, which were ultimately paid for by the state of Illinois. And so the state of Illinois sued for damages alleging that the higher prices resulting from the price fixing had been passed through to the state of Illinois. So even though the masonry contractors were like, okay. Yeah.
Speaker 1:Like, the Illinois brick company is is is with all the other brick companies, they're jacking up prices. It doesn't really matter because they just passed that through. And so there's a question about, like, well, you didn't actually pay the higher price directly Yeah. State of Illinois, but it was passed through. And so that that harm gets passed through.
Speaker 1:And so, you know, he says, this value chain, it is obvious who the direct purchasers were, masonry contractors to the extent sit the state of Illinois suffered harm. It was indirect pass through harm. Thus, the Supreme Court ruled that the state of Illinois did not have standing. So the so the state of Illinois could not sue then. If every party in the value chain were to sue, the infringing party could be the subject of duplicative recovery for damages, and parsing out the share of damages would be extremely difficult.
Speaker 1:So it's the masonry contractors that have to sue. Now in Apple versus Pepper, there's this question of who is harmed by Apple's alleged monopolistic practices. According to the plaintiffs, the value chain looks the same as the concrete block manufacturers. Basically, there's developers who sell their apps to Apple, who sell those apps to consumers. But Apple said, woah.
Speaker 1:Woah. Woah. No. We're not a retail store even though it's called the App Store. It's not a real store.
Speaker 2:We don't buy inventory. And sell them.
Speaker 1:Yeah. Exactly. We're more we're we're we're an agent. And so the company argued Apple does not buy and resell apps. Instead, Apple acts as an agent for developers and says, as respondents note, this is from the actual court case.
Speaker 1:The developer agreement confirms that Apple acts as an agent for app providers in providing the App Store and is not a party to the sales contract or user agreement between the user and the app provider. Thus, respondents concede that the direct sale is actually between developers and consumers facilitated by Apple as an agent and conduit. And that sort of makes sense. You go to a grocery store, they buy the apples from the farmer, they sell them to the customer, they take possession. A real estate agent facilitates a transaction
Speaker 2:Takes doesn't Like, takes fee.
Speaker 1:Takes a Takes a fee.
Speaker 2:If Apple if Apple was actually going and, buying licenses and then reselling them, you know they'd be negotiating like crazy too and be like, we'll give you $1 and then we're going to sell it for $10 Yeah. You could argue it would be even worse for developers in that situation.
Speaker 1:Yeah. And so the interesting thing about whole case is just just how much the reality of the shape of the App Store and and the business of the services services narrative changed the the entire financial story of Apple over the last, I guess, decade and a half. Yeah. The if you wanna look at Apple stock, you should head over public.com. Investing for those who take it seriously.
Speaker 1:Big on multi asset investing. They're trusted by millions. But what you should do if you go and you look at Apple is look at the price to earnings ratio. Because back in 2011, it was 9.7. Let's call it 10 x price to earnings.
Speaker 1:Today, it's 37 x. So obviously, the business has grown, but the value of the earnings is so much higher. Why is that? It's because it's so much stickier. And it's because they've developed this services monopoly, essentially, where they have aggregated, you know, it's the Ben Thompson aggregation
Speaker 2:It's a toll road for your life.
Speaker 1:It's not a toll road. That's a good that's a great thing. It's a there is a difference between a toll and a tax. And a toll is something that you pay that is directly linked to the to the service that you're getting.
Speaker 2:Okay. So you're saying it would be more like a toll road now?
Speaker 1:Now. Yes. Now it will be a toll road, and we should celebrate that, or developers should celebrate that. Tim Sweeney should be celebrating that because a toll road is something where it's like it's like, I'm paying for $5 to drive down this road. That money goes directly towards this road.
Speaker 2:Yeah. The tax structure applied to a toll road is like, economic value are you creating
Speaker 1:by driving on a road? Exactly.
Speaker 4:We're gonna charge you
Speaker 1:30% of that. Exactly. Oh, you're oh, you're you're transporting a shipment of televisions on this road? Those are high margin. Or, oh, you're, you know, oh, you're you're a rich person driving
Speaker 2:You have some GPUs. I you're hiding GPUs on your truck, are you not?
Speaker 1:Yeah. Yeah. Oh, oh, you can certainly break us off more. As opposed to saying, you know, every time someone drives in this road, it takes a dollar of depreciation. We need a million dollars to repave it every year.
Speaker 1:And so we need to link the link the cost of using the service with the actual underlying cost of operating that service.
Speaker 2:My question with these changes is what is the what is the consumer experience gonna be when trying to cancel subscriptions? Because the one aspect of the App Store that I've always appreciated is the ability to one click cancel Yeah. From within Yeah. The App Store and not having to go to individual apps or services and cancel. Yeah.
Speaker 2:And so I do wonder, as soon as you let payments live outside of the App Store, everyone has experienced any type of software retailer making it hard to figure out how to cancel a subscription. And so will Apple keep that kind of one click cancellation ability within the app? Or will they actually have to
Speaker 5:No.
Speaker 1:Let I mean, this already exists. Because you can go put your credit card down in Fortnite. The thing is that I think the subscription revenue is not as much as you think. It's not as much of a driver. Like, the in app payments, the the the one off clicks, like, are much bigger driver of overall economic activity.
Speaker 1:But I don't know. On on the subscription side, it would be interesting if there's, like, some sort of re aggregation at, like, the Stripe level or something like that. I don't really know. But in general, the interesting thing is that, like, so Apple's price to earnings goes from 10 to 40, basically, like massive run up. And this is all on the back of, like, the services narrative that that Luca Maestri, the the CFO, sort of outlined in, I think, 2016.
Speaker 1:He said, each quarter, we report for our services category, which includes revenue from iTunes, the App Store, AppleCare, iCloud, Apple Pay, licensing and some other items. Today, we would like to highlight the major drivers of growth in this category, which we have summarized on Page three of our supplemental materials. The vast majority of the services that we provide to our customers, for instance, apps, movies, TV shows are tied to our installed base of devices rather than to current quarter sales. And so he's saying, like, you you you need to stop thinking about our our financial performance as driven by how many phones do we sell this quarter. You need to think about just how many users we have broadly and and start valuing us more like Google, more like Facebook.
Speaker 1:Like, if you're an iPhone user, doesn't really matter if you bought a new one this quarter. Obviously, that's sort of continuing. But the big game is better monetization on top of the user base.
Speaker 2:So We should try to get Justin Kahn on to talk about his company Stash because Stash is Yeah. Effectively payments built for game developers Interesting. Circumnavigate It'd be very cool. The App Store. Yeah.
Speaker 2:And so that they're very well positioned here.
Speaker 1:Yeah. So Luca Maestri went on to say, for some of these services such as content, we recognize revenue based on transaction value. For some of these services such as App Store, we share a portion of the value of each transaction with the app developer, and we only recognize revenue on the portion that we keep to fully comprehend the scale of the services that we are delivering to our installed base and how fast this business is growing. We look at purchases in addition to revenue. When we aggregate the purchase value of all the services tied to our installed base during fiscal twenty fifteen, it adds up to more than 31,000,000,000.
Speaker 1:That's an increase of 23% over 2014. So he's like, and so Ben Thompson has some funny quotes here. He says, like, first off, it's striking that when Apple was facing one of the most challenging years in the stock market, its first response was basically to make the plaintiff's point in Apple versus Pepper. Suddenly, the company wanted to recognize all of the app revenue, a portion of which is shared with developers. Sounds like a company in the middle.
Speaker 1:Sounds like a tax. And then secondly, the
Speaker 2:Repeat that original line. You said they've grown 34%?
Speaker 1:31,000,000,000. They they increased 12 23% over fiscal twenty twelve 2014 was the historical growth. So basically, what basically, what's going on is Luca Maestri is the CFO of Apple, and he's he's having trouble in the market because it's 2015, and what's happening? Well, you're eight years into the iPhone. Twenty two thousand seven, the iPhone comes out.
Speaker 1:It's expensive. It doesn't have three g. It's got a lot of rough edges.
Speaker 2:Doesn't have copy and paste.
Speaker 1:But it's cool, and it's interesting, and there's lines out the door for them. And and it's and people at the higher end like, a cell phone back then was, like, a $100, or you'd get it for free. You you get it you get it as part of a, you know, every Yeah. Yeah. Yeah.
Speaker 1:Every two years, you'd get you get a new you get a new phone, and and it was free, basically. Then the iPhone comes in. It's it's $600, very expensive, very upmarket. Then a year or two in, they start figuring out how to bring down the price. It it comes down to, like, $304,100.
Speaker 1:There's these incentives for signing up for a year long plan. There's a whole variety of things that make it you know, the App Store comes out. There's like there's just more functionality. You don't you no longer are like, well, my BlackBerry still does this, but Apple doesn't it's like, no. They do the enterprise stuff.
Speaker 1:They checked all the boxes. And so it's growing, growing, growing. But eight years in, everyone who has one, like, they won the game. And so device, like, actual the device install base, device sales are starting to flatline. Yeah.
Speaker 1:And so then they need sort of the new a new narrative for the stock because it's get sort of getting beat up because Apple's basically winning
Speaker 2:the Sold everyone an iPhone.
Speaker 1:But it's over. The Yeah. Like, the trade's over. Right? It's like, yeah, we get it.
Speaker 1:Everyone has smartphones now. So the the the iPhone revenue is basically unit sales are slowing significantly. Of course, they're able to raise prices still because people are locked in. Like, it's a good business, but it's not this, like, incredibly high growth thing anymore. So Luca Maestri needs to come in with a new narrative, and that's the services narrative.
Speaker 1:And so the services narrative is is saying, hey. For a long time, you've been looking at this bucket of basically, like, other revenue. We have device sales, which you've been obsessed with as the investor Yeah. As the Wall Street. You've been obsessed with, you know, how many iPhones we're selling, how much we're selling them for, our margins on those iPhones, how how many we can make, all of that.
Speaker 1:And then we've had this other bucket, which is like iTunes, App Store, Apple Care, iCloud, Apple Pay, license. There's a bunch
Speaker 2:of other treating it like this storage feature on the iPhone where it's like, hey. You have, like, photos Yeah. And these other things that are taking it in apps. Yeah. Then, like, don't worry about other.
Speaker 1:Yeah. Don't worry about other. Don't worry about other.
Speaker 2:We're just gonna throw everything in there.
Speaker 1:Don't worry about other because we don't really know how it's growing. Is it that high margin? We don't know. Then all of a sudden, it became like, don't just not worry about other. Like, in fact, focus entirely
Speaker 2:on tap yet.
Speaker 1:Focus on it exclusively because it is the best revenue that's super high margin, and it's growing really fast. And, oh, by the way, if you zoom out and you look at the economic activity that is driving on top of the App Store, that's you know, yes, our take rate is 30%. But on top of it, just in 2015, it's $31,000,000,000 of economic activity in that ecosystem. And so this is is like an admission of, like, the economic power that they have. But Ben Thompson was not a fan of it.
Speaker 1:I mean I mean, was he was a fan from the stock price perspective, but he he had some really, really harsh words. He he said at the time, it seems incredibly worrisome to me anytime a company, predicates that predicates its growth story on rent seeking. It's not that the growth isn't real, but rather the pursuit is corrosive on whatever it was that made the company great in the first place. It's like, woah. It's sort of like, okay, they're they're going, like, private equity mode, like, the beautiful art, the creativity is is gone at this point.
Speaker 2:And Tim Tim Cook has effectively done exactly that.
Speaker 1:Yeah. And he says, that is a particular again, this is from 2018. That is a particularly large concern for Apple. The company has always succeeded by being the best. How does the company maintain that edge when its executives are more concerned with harvesting the profits from other companies' innovations?
Speaker 1:So going forward, the growth story of Apple has been someone else innovates, someone else creates an app, and we'll take 30%. And we don't need to do the innovate. The innovation, that doesn't need to happen here. Yep. And that's a big shift in the narrative.
Speaker 1:Whereas before, all through seventies, eighties, nineties, February, it was like the innovation comes from Apple.
Speaker 2:They're like, we're gonna make the iPhone 1,700. Gonna be newer, lighter, better, faster, stronger, and they're gonna buy it, and then we're gonna then we're gonna take take our cut from everything on top of
Speaker 1:it. Exactly. Exactly.
Speaker 2:Anyways, should we
Speaker 1:Yeah. We continue? Yeah. We can move on. Let me tell you about Apple's newest partner, Gemini.
Speaker 1:Gemini three Prime, Google's most intelligent model yet. State of the art reasoning, next level vibe coding, and deep multimodal understanding.
Speaker 2:That's the Megan in the Wall Street Journal has a scoop. OpenAI ended a policy earlier this week that required employees to work at the company for six months before their equity vested.
Speaker 1:Wait. They only have a six month cliff?
Speaker 2:I would already short. Wow. A few months ago, XAI shortened their waiting period known as a vesting cliff from twelve months to six. And then there's been I don't know if you wanna start reading through it at all, but
Speaker 1:The change to the vesting cliff announced by applications chief, Fiji Simo, came on our show last week, is designed to encourage new employees to take risks without fear of being let go before access accessing the first chunk of equity. Interesting. So so they had a problem where people would come in and say, okay, I gotta just do politics for the first six months because I don't wanna get fired before. That's like, that's a crazy culture, I feel like.
Speaker 2:I think this has to be more reactionary to meta. Yeah. And I don't know. Yeah. Let's go let's go And obviously, some of the
Speaker 1:other OpenAI has its vesting period for new employees to six months from the industry standard to twelve months in April. We have to we have to ask Adam Spiegel about how he thinks about vesting periods and and running a public company where your employees can sell the stock that they get. He's the perfect person to ask about this exact article. Let's see. Elon Musk's xAI and OpenAI competitor made a similar change in late summer.
Speaker 1:People familiar with the matter said, xAI didn't respond to a request for comment, of course. The decision to loosen or do away with restrictions meant to ensure new hires stick around reflects the frenzied competition for top tier technical talent within AI within the AI industry. Tech companies typically have a one year vesting cliff that's what I'm certainly familiar with for new employees preventing them from having to give away stock to hires who leave quickly or don't work out. But with AI companies including meta platforms Google, Anthropic, wooing top researchers with pay packages that can be worth $100,000,000 or more researchers and engineers have been able to hold out for the most attractive terms and in many cases have been quick to leave jobs they have found not to their liking. Yeah.
Speaker 1:I think that this is just like a sort of a Red Queen's race. So just a if you give a mouse a cookie sort of situation where
Speaker 2:Competitive market employees end up benefiting. I also could see it them trying to kind of rehab their employer brand. You remember there was a bunch of this was probably six, eight months ago at this OpenAI had a bunch there were there were some articles surrounding they they had some like really restrictive exit agreements.
Speaker 1:That's right. And so That that that
Speaker 2:A lot of people were pretty frustrated around
Speaker 1:I feel like that was over a year ago. That was Maybe. Maybe a year and a half ago. About a year and a half ago. Yeah.
Speaker 1:That story broke that if you left and did maybe didn't sign a nondispairagement agreement or NDA or
Speaker 2:something sign it, they could claw back
Speaker 1:They could claw
Speaker 2:back equity. Equity. And then they were saying
Speaker 6:That was important during the whole, like, Ilya, Ilsting Yes. Because a lot of the employees left after that, but then they couldn't talk about it.
Speaker 1:Yeah. That's interesting. I always thought that that, like, the bull case for that was, well, if you're going to be whistleblowing on something that's like a true AI doom scenario, well, then money doesn't matter, so you shouldn't matter about them clawing back your equity. But, of course, there are more like mundane reasons why, you know, you might wanna talk about your previous competitor or previous Yeah.
Speaker 2:There previous was another line that some people zoomed in on here. Connor Sen over at Bloomberg Opinion says, company expects to spend 6,000,000,000 this year on, stock based comp, almost half of its projected revenue. Mhmm. And and and I saw this post going viral in a few different areas, but a company that creates however many hundreds of billions of dollars in value in a year and then has 6,000,000,000 of a non cash expense, it doesn't seem that crazy.
Speaker 1:Yeah. No. Not at all. It seems like like fairly low for I mean, it's a $500,000,000,000 company, so it's 1% of the market cap that's going out to employees. And also they they have to be in like an incredible talent war.
Speaker 1:They're growing. There's just so much to do there. Yeah. The number that was shocking to me was that you remember last week how there's the rumored SpaceX IPO? That is apparently continuing.
Speaker 1:So SpaceX schedules bank pitches for IPO. It's in The Wall Street Journal. But the the SpaceX IPO, if they raise 30,000,000,000, will be lower than the 40,000,000,000 that OpenAI
Speaker 2:Raised and Yeah. In this private market.
Speaker 1:In the private markets. And so there's been this big question about, like are the private markets tapped? It appears it's the David Goggins thesis of the market. It's just There's always always for life. I mean, if you if you went back, you know, like, I don't know, five years and you were like, yeah, like, do you think you could raise $40,000,000,000 in the private markets or would you have to go public for that?
Speaker 1:They're like, you know, the Saudi Aramco level funding. Like, yes, you'd have to be public. But turns out you do not have to be public because, in fact, 40,000,000,000 is available in the private markets if you're OpenAI. Let me tell you about Numeral. Compliance handled.
Speaker 1:Numeral worries about sales tax and VAT compliance so you can focus on growth. Let me continue with this. Tech investors have privately complained. They're complaining? What do they have to complain about?
Speaker 1:We're in a bull market. They privately complained about the ballooning stock based compensation associated with fast growing AI startups arguing that it eats into shareholder returns. Companies that are needing to be more competitive are dropping the traditional first year vesting cliff, cofounder of Levels. Fyi says. In August, after Meta chief executive Mark Zuckerberg launched that full scale raid on OpenAI's staff and offered giant pay packages, OpenAI gave some of its top researchers and engineers a onetime bonus with some employees receiving millions of dollars, the journal previously reported.
Speaker 1:Yeah. I was thinking about that with the Mark Chen went on Ashley Vance and was I was like, I don't I I don't compete with net dollar to dollar. Like, I won't match their offers. He won't
Speaker 2:go band for band.
Speaker 1:He won't go band for band, but it but it doesn't mean that he won't
Speaker 2:fight back. Cliff.
Speaker 1:He'll go cliff for cliff for sure. And also, he'll go, like, one time bonus during a crazy raid, like, if if the if the time calls for it. So it's not like he's not participating in the war at all. He is a little bit, but I I I think it's the right I think it's the right move. Yeah.
Speaker 1:I I do think that there's been this I don't know. Is it hedonic treadmill? What is the correct metaphor for for what's going on with these offers? But it's very clear that, like, like, you know, whoever like, the the details of the of the packages are leaking at least through internal, like, back channels. And so the next person that gets hired wants something a little sweeter, like something a little bit extra, a little cherry on top.
Speaker 1:And so you go from, you know, four year vest, one year cliff to three year, six months to no cliff to, you know, add more zeros on the pay package, more guaranteed, more upfront. But at the same time, there is something to I mean, the reason I would argue in favor of no vesting cliffs here is that it does feel like the value that you can get from a new engineer joining, from a competitor at least, is on day one. Like day one okay. You were you just left Anthropic.
Speaker 2:We're gonna plug your brain. We're gonna
Speaker 1:plug You your just left OpenAI. You just left Meta. What's going on there? Just take us through it. Right?
Speaker 1:Like, that's going to be the day one orientation. And so are they adding value on day one? Like, basically. Right? I would imagine.
Speaker 1:So Yep. To be capturing a little bit of that value, that seems like a win for the AI researcher. Yeah. At the same time, it is just another sign of the of the froth in
Speaker 3:the in the AI market.
Speaker 2:Finbar says, okay. But seriously, why is everyone leaving Meta? People are speculating in the comments. No. Jane says, vest.
Speaker 2:Finn says, but if you stay longer, you vest more. True. Someone else says, no direction for the company. Several major unannounced RL project canceled. The 100,000,000 boys reportedly do zero work because they know that if Zuck fires them, he'll look foolish.
Speaker 2:I don't know. I think I think some of these $100,000,000 men and and women Yeah. Just that do they are about that life. They do wanna pursue greatness. They do wanna be do the biggest run.
Speaker 2:Yeah. So who who knows? I'm sure there's some instances of that. Andrew says behind state of the art on their models, of course. That's why Mhmm.
Speaker 2:Zuck, you know, overpaid for talent is to try to catch up. Yeah. No PMF on their consumer AI products even though they force everyone on Instagram to see it. I think we gotta wait a little bit for the Christmas season Yeah. To come and go and see how see how these things are selling.
Speaker 2:Yeah. They don't even use Llama models internally to code. I mean, that makes that makes sense.
Speaker 1:It is a tough position to be in because they don't have a like a like a public cloud. They don't have a cloud service even though they are a hyperscaler. So like with with with Google, with like, even if they even if Google gets completely smoked by OpenAI and ChatGPT, and ChatGPT winds up being, like, truly, like, the the, you know, the the Facebook of of chat apps, and it's, like, 99% people use it captures 99% of, like, the consumer AI value. It's like, well, like, having a Gemini API is still extremely valuable because, like, you have cloud services. It it would it would be odd for Meta to wind up, like, trying to build a cloud public cloud service, like, around the llama models.
Speaker 1:Like, I mean, even they went even if they went closed closed
Speaker 2:stores at one point, though, that they would be open to reselling capacity. But
Speaker 1:But then you're going up against Anthropic directly. It it feels feels very, very tricky. I don't know. Anyway, let me tell you about Cognition, the team behind the AI software engineer, Devin. Crush your backlog with your personal AI engineering team.
Speaker 1:What else is going on? VCs funded OpenAI. In return, OpenAI automated them. This is GPT 5.2 thinking is able to construct a cap table accurately in spreadsheets. This is what Fiji Simo was talking to us about emerging capabilities.
Speaker 1:Seems like they might have RL ed on some spreadsheets. That's pretty cool. Truly everyone is going after spreadsheets at this point. There's a everyone from our sponsor, Ramp, to Microsoft, to the to a number of startups that have been on this show talking about Yeah. Excel agents, Excel plug ins, Google Docs
Speaker 2:plug ins. I'm so interested to see how that market actually shapes out.
Speaker 1:Who
Speaker 2:is? Because there's so many AI for Excel
Speaker 1:Yeah.
Speaker 2:Plays, Some full stacks, some some Yeah. Plug ins.
Speaker 1:Yeah. And and it's like I see. It's not that Harvey was pitched as, like, a Word plug in. Like, even though lawyers do a lot of work in Word, that was not the that was not the the instantiation of that product. It was it was much more just like, you know, a full full service product.
Speaker 1:It was interesting. Anyway, there's a clip of Sergei making a joke about automating away VC. Should we play this video?
Speaker 2:Pull it up.
Speaker 1:Do you have the ability to pull this up? Let's do it. What does he what does he say?
Speaker 2:No audio on our side yet, folks.
Speaker 1:Can you look? Well, in the meantime, let me Might tell you about
Speaker 7:be replaced.
Speaker 1:Oh, here we go. Sorry.
Speaker 7:Can do that human majority of jobs that we know today, like more than 50% might be replaced by machines that can do that human judgment piece better.
Speaker 1:Well, we've been working on
Speaker 4:the venture investment machine learning. No, I'm just kidding.
Speaker 1:It's kind of true actually.
Speaker 7:As long as I can buy one, I'm good.
Speaker 1:Do you think you'll do it?
Speaker 8:That is kinda what Google Ventures does, no?
Speaker 4:They they did they started that way. I don't know if they're actually doing that. Like, I don't know. They keep hiring partners for whatever reason.
Speaker 1:Is hilarious. How they work. Where was
Speaker 2:this? Extremely candid.
Speaker 1:It was very funny. Love it. Anyway, let me tell you about Adio, the AI native CRM. Adio builds, scales, grows your company to the next level. What what is it with this this the CIA lost a nuclear device in the Himalayas?
Speaker 1:Did you read this article? Apparently, this is not new.
Speaker 2:It's not a new story, but there's some new reporting in here.
Speaker 1:Okay. What happened? How do you do you lose a nuclear device in the Himalayas?
Speaker 2:I want to go through this. My only concern is that it's going to potentially take like an hour
Speaker 1:Let's to read do it another day then.
Speaker 2:Yeah, we can do it. Let's do it tomorrow.
Speaker 1:Let's summarize it and put it let's put a link to it in our newsletter where you can get tech analysis and news, get our daily op ed, top headlines, and more. Sign up at tbpm.com. There was Oh, yeah. You want to go to some of those? Take us wherever.
Speaker 2:I was going to take us to Brett Adcock.
Speaker 1:Okay. What's going on with Brett
Speaker 2:Adcock? A party over the weekend Yes. With Deadmau5.
Speaker 1:Okay.
Speaker 2:And let's play this video. So I He posted earlier today that that figure is looking quite cheap now in comparison to SpaceX.
Speaker 1:Okay.
Speaker 2:Right? Because there's a there's a new biggest line on the private markets chart.
Speaker 1:Is drinking on here? What is he drinking?
Speaker 2:I think he's having a I think he's cracking open some colon. This crazy. So my theory is that they have done billions of dollars in sales. Okay. And this is kind of their way of signaling Signaling.
Speaker 2:If you know you know. Because of course, it would be absolutely insane to have a party like this Yeah. If you still hadn't shipped a product, if you still were Yeah. Yeah. Kind of a sort of a I don't know if they're pre revenue, but but certainly being valued on on vibes.
Speaker 2:Yeah. There's no way they would throw a party like this if
Speaker 1:because they were SpaceX has 30,000,000,000 in revenue. Right? Yeah. So and and it's going out at $11,500,000,000,000.0. So it's at, like, 50x revenue.
Speaker 1:So to be cheap, he probably trading at, like, what, 20x revenue? Something like that?
Speaker 2:That was my theory at least. And then what's they're at last around question? $40,000,000,000 They're at around $40,000,000,000
Speaker 1:So yeah, could be doing like 2,000,000,000 to $4,000,000,000 in revenue potentially. If it's cheap on a dollar per
Speaker 2:revenue think this is very much a
Speaker 1:On a price to sales ratio.
Speaker 2:A wink wink moment because seriously, you know, no no, I don't think any CEO would throw this crazy of a party if you weren't if you weren't
Speaker 1:really So
Speaker 2:expect an announcement soon. I would. I would. Expect an announcement on That's pretty crazy. On the revenue side over Figure.
Speaker 1:Anyway, that's wild. Astro Compute, Pranav. Are we getting him on the show? Have we tacked him?
Speaker 6:Yeah. I think he's coming on tomorrow.
Speaker 1:Okay. Fantastic. So Pranav has has done the math. He sat down and did the math on the data centers in space. He said said everyone and their mother has something to say about space compute, but no one has comprehensively broken down the physics, energy, cooling, economics, and the real work involved.
Speaker 1:So I built a first principles model to show you guys myself. Tyler, what was his conclusion?
Speaker 6:Yeah. So I mean, the Or we could can go through it. You can chill it, like, change all the different parameters and stuff, then Yes. You can run the simulation then kind of see where it lands. I think the the conclusion was that, like, there are a lot of scenarios where it does make sense.
Speaker 5:Like Okay.
Speaker 6:We we like, today, right now, if we use current technology, probably not. Mhmm. But if you kind of, you know, use the trend line where things are going, I think it's, like, pretty reasonable to say that, like, there's a scenario where it does work.
Speaker 1:Okay. Yeah. What are you laughing at?
Speaker 2:Fiber Fiberglass is clearly an OG. He says that was some OG dry humor rage baiting, like from day one TVPN. It's true. We certainly
Speaker 1:Still got you.
Speaker 2:A year ago a year ago, that was certainly like 50% of the show's content.
Speaker 1:For sure. For sure.
Speaker 2:Fiverr, it's it's great it's great to have you here. Thank you for
Speaker 1:hanging out.
Speaker 2:For being a day one.
Speaker 1:Andrew McAlliff, who's building spacecraft over at Varda Space. He's gonna put data centers on a boat, potentially. He has a boat project. That's very fun. He says data centers in space, it might not be economically rational, but it might be physically possible.
Speaker 1:Oh, is he break breaking rank from his from the cofounder of his company, Varda, Dalian? He says, I'm trying to bring some quantitative structure to a conversation that's been mostly big number of vibes. So we have sort of dueling dueling math equations at this point. What is he this is vibe coded from public from maybe we need to have a debate. Maybe we need to have them both on.
Speaker 1:But he says, TLDR, the analysis is actually far more favorable than I thought. It's a close thing. I desperately want a Kardashev level civilization, but we've got a lot of work ahead of us. Interesting. So so he so, I mean, Deli has been saying, like, it's impossible.
Speaker 1:It is not gonna happen anytime soon. It's not gonna it's not gonna not gonna be a thing. But Andrew McCallop says there just might be a chance. Who else is talking
Speaker 5:about this?
Speaker 2:This post from Goth. Goth says, my dealer. I got some straight gas. This train called space data centers. You are gonna effing fry.
Speaker 2:LOL. Me, yeah, whatever. Twenty minutes later. Dude, WTF, we just need to radiate the heat and then we can totally bypass terrestrial regulations. My friend pacing.
Speaker 2:I should buy magnet stocks to get ahead of all the rail guns. What is They're smoking space data centers, John.
Speaker 1:Don't get it. This is all over the place. Theo was happy about the the Epic thing. Props to Epic for seeing it through to the end. This is an incredible win for developers quoting Vince Sweeney.
Speaker 2:That e z in the chat says, data centers in a volcano. That
Speaker 1:That might
Speaker 2:be Nobody's is nobody
Speaker 1:of that.
Speaker 2:Nobody's talking about it.
Speaker 1:That does seem like free energy.
Speaker 6:Isn't that just like geothermal? I feel like that's like
Speaker 2:I know, but that that doesn't spack.
Speaker 1:Doesn't spack. Yeah. That's terrible vibes.
Speaker 2:Data center in a volcano spacks immediately.
Speaker 1:For sure. Well, let me tell you about Privy. Privy makes it easy to build on crypto rails, securely spin up white label wallets, sign transactions, and integrate on chain infrastructure all through one simple API. Anthropic has ordered 21,000,000,000 worth of TPUs to train to train large clawed. Is that really what they're calling it?
Speaker 1:Text is from yesterday's Broadcom's earnings call. The scale at which we see this happening could be significant. As you are aware, last quarter, q three, we received a $10,000,000,000 order to sell the latest TPU Ironwood racks to Anthropic. This was our fourth custom that we mentioned. In this quarter, we received an additional $11,000,000,000 order from the same customer for delivery in late twenty twenty six.
Speaker 1:But that does not mean our other two Kaiju fights are the best kind of fights. From October, this is from Andrew Curran. He says, Anthropic is in discussions with Alphabets, Google about a deal that would provide the artificial intelligence company with additional computing power valued in the high tens of billions of dollars according people familiar with the matter. The plan, which has not been finalized, involves Google providing cloud computing services to Anthropic. According to people familiar with the matter, who asked not to be named Google's previous investor and cloud provider for Anthropic.
Speaker 1:Large Claude was just me having fun with words and is not anything official. I also considered Fat Claude. I'm saving Colossal Claude and Gargantuan Claude for twenty twenty
Speaker 2:Big Claude. Fast Claude.
Speaker 1:Other news just need to Vermi. This large Quad thing.
Speaker 2:Fermi, which is the energy company that went public at a $20,000,000,000 valuation. They they talked about getting getting their kind of facilities online, I think, in the twenty thirties, and people were a little bit bearish about that. Mhmm. They've they've traded down almost 75% since their IPO. So it seems like yeah.
Speaker 2:We've we've basically seen this kind of rolling correction across every single AI pure play.
Speaker 1:You could even say
Speaker 2:that But nobody's done volcano data centers.
Speaker 1:No one has done those.
Speaker 2:Where are you gonna where the chat's asking where do you put the heat? Just shoot it up into the air. That's what's
Speaker 1:Yeah. Volcano data center is just funny because immediately they're like, but don't you want the chips to be cold? You want the you need cooling, not
Speaker 8:heating. Yeah.
Speaker 2:The heat dissipates with the lava.
Speaker 1:It would be great to just hard light. But the heat's free. Heat's heat's free. Data centers are And in this one, we're getting the heat for free. No.
Speaker 1:What happens after a correction? You're corrected. I I I think we're corrected. I think it's possible that the market is cracked. It's No.
Speaker 1:Perfectly valued.
Speaker 2:I saw somebody saying that the the PG two interview with Sam may they they were claiming like it's very possibly helped us avoid a 02/2001 scenario.
Speaker 1:Could've yeah. Things could've gotten a lot crazier.
Speaker 2:So maybe that was Brad's play the whole time. He was like, hey, we just need a little reset.
Speaker 1:He's a hero. He's a hero.
Speaker 9:I'm gonna
Speaker 2:look like I might I mean, you know, I'm gonna look like maybe a bad guy for two weeks, but now he looks like a hero.
Speaker 1:I mean, I even even in the moment, he didn't look like a bad guy.
Speaker 2:No. No. He asked a question. If he didn't ask that question
Speaker 1:Yeah.
Speaker 2:He would have been it would have it would have there would have been, I think, some rightful criticism. Everyone was wondering. It was an important question to ask.
Speaker 1:Yeah. What I really like Young Macro. This guy's a great poster. Nick Lan proclaims, May coldness be my God. What normies think he means, you know, techno accelerationism, techno capitalism.
Speaker 1:I like that the circular AI deals made it in here as well, just the stock charts. Just Palantzier logo. Really means Christmas. He means Coca Cola. He means a nice wintry retreat.
Speaker 1:Yes. Exactly. Play some music. This is this is what may coldness be my God means. It means cozy up by the fire and get festive.
Speaker 1:I love it.
Speaker 2:Did you see this reporting on Jim Carrey in Grinch? No. Jim Carrey offered to return his $20,000,000 Grinch salary and was going to quit the movie amid panic attacks over the makeup. Then a guy who trained the military on enduring torture was hired to help him. Woah.
Speaker 2:Richard Marcinco was a gentleman that trained CIA officers and special ops people how to endure torture, Carrie told Vulture. He gave me a litany of things that I could go that I could do when I began to spiral, like punch myself in the leg as hard as I can. Have a friend that I trust and punch him in the arm. Eat everything in sight. Changing patterns in the room.
Speaker 2:What? If there's a TV on when you start to spiral, turn it off and turn the radio on. Smoke cigarettes as much as possible. There are pictures of me as the Grinch sitting in a director's chair with a long cigarette holder. I had to have the holder because the yak hair would catch on fire if I got too close.
Speaker 2:Later on, I found out that gentleman had trained me to endure the Grinch also founded
Speaker 1:You've founded CLT mistake.
Speaker 2:My only kinda question here is I feel like all these things if you're being tortured, they wouldn't exactly be like, oh, let him turn the TV off and on again. Let him turn the radio on.
Speaker 1:Oh, yeah. That is interesting.
Speaker 2:So I think I think these are probably great things to do if you're not getting tortured and you're just developing anxiety attack. Yeah. I did I did resonate with this because when we had the the Halloween makeup Well,
Speaker 1:well, I mean, to be fair, it could be it could be like like metaphorically being tortured, like, in a foxhole as a member of TEAL Team six. Like, if you have, like, you know, oh, you're you're you're staking out some place and you're in a mud pit and it's a hole. And you're not actually being directly tortured by, like, an enemy, but you have to deal with a really hard situation. And so you sit there chain smoking and I don't know why you have a TV in this scenario. Again, I didn't land I didn't land
Speaker 2:on that one, but Yeah. This just resonated because when we had when we were three hours into our Halloween episode and I started to realize
Speaker 1:Didn't resonate for me.
Speaker 2:I was like, I am
Speaker 1:It's still
Speaker 2:a fully it it felt like very suffocating having, you know
Speaker 1:I was fine with it.
Speaker 2:Two centimeters surrounding everywhere and
Speaker 1:Yeah.
Speaker 2:It was it was a very weird feeling.
Speaker 6:I think I mean, he was doing like nine hours a day of makeup.
Speaker 2:Can we get the we get the GigaChad filter on Tyler?
Speaker 1:That makes us look like, you know, wimps compared to him. We were only doing three hours of makeup. Nine hours is really, really heroic. Wow. Well, totally worth it.
Speaker 1:If you aren't watching the Grinch this Christmas, go watch something that's being restreamed. Restream, one livestream, 30 plus destinations. If you wanna multi stream, go to restream.com. Merry Christmas.
Speaker 2:Will Brown says ChatGPT is the only consumer app with regular pop ups asking if I wanna downgrade my subscription.
Speaker 1:This is hilarious. Two, three thousand likes. I mean, it's it's a testament to the
Speaker 2:They're they're running this as an AB test. They're like, we tell people they can pay less, and they don't. They enjoy giving us money.
Speaker 1:Hey, maybe maybe maybe the pro plan results in more permanent churn. And so this is actually LTV a downgrade is actually LTV positive. No way to prove that that's true. But it'd be very funny if that was the case. No.
Speaker 1:The polish around the product is potentially like the way you win consumer. I really think we're in
Speaker 2:the era of productization more than the latest model. The product managers are the heroes now. I want to see a product manager getting a four year $1,000,000,000 package.
Speaker 1:It's not completely over for the AI researchers. Like the models are important. They do get better. And there's functionality under the hood that's research driven that's valuable. But if you believe in the Ilia, we're in the age of research, then what is the AI researcher doing?
Speaker 1:Like they are doing experiments that for that you have no idea of the timeline. Like you're not just doing engineering. You can't just put one foot in front of the other and get easy wins. It's actually going and doing science and discovering new ideas, new ways to create new capabilities. And so in the age of research, the researchers should be off doing research.
Speaker 1:And the user experience designers are the heroes, basically. I mean, the product managers are are going to be more important as the as the apps fight for market share. What do you think, Tyler? You agree with that?
Speaker 6:Yeah. That makes sense. It's fun to think about Elon and Ilya are like perfectly counter positioned. Right? Like Elon is like, we don't have any researchers.
Speaker 6:They're all engineers. Yeah. They're gonna make small improvements. And then you see like like, Where's not? Rock is like Yeah.
Speaker 6:It's largely undifferentiated from all the other LMs. They don't have like a like Anthropic has code. OpenAI has like the actual consumer. Grok is like still kind of undetermined.
Speaker 1:I wouldn't say that they're counter positioned. They're actually they actually agree. They're they're they're they're consistent. I think they are opposites, but they they both embrace the fundamental a fundamental reality about the world, which is that, like, you should either be doing pure research or pure pure engineering, and it's and it's sort of hard to mix the two. Or just that, like, research won't immediately have tran won't translate to faster times on the racetrack, which is, like, what's happening right now in the in the race.
Speaker 6:Yeah. But I mean, Elon is, like, very AGI pilled. Right? He still doesn't think about, like, doing pursuing AGI as, a research thing.
Speaker 1:That's engineering Oh, interesting. Okay. Okay. Yeah. Maybe they are a little bit more different than I than I considered.
Speaker 1:I don't know. I I mean, how how do you interpret the fact that the the ARC AGI scores are going through the roof, and yet qualitatively, like, people are not shocked by the interaction of talking to 52 or the latest quad four five or Yeah.
Speaker 6:I I think it's just like it's just about, like, the spikiness thing.
Speaker 1:Yeah. Or like They just created a new spike?
Speaker 2:It I
Speaker 6:mean, the spike just got longer. Right? It's like the the coding ability of the model, I'm sure, is much better. Yeah. But the actual, like, ability to write pros is not that much better because it's just like not what they're pursuing.
Speaker 1:Sure.
Speaker 6:But it is bullish like the this has been my take for a while where like if they can even if it's just bench maxing on Yes. Or
Speaker 1:If you can create a spike in any direction, you can solve sort of any economic problem.
Speaker 6:Yeah. Then the real problem
Speaker 1:Just create every possible spike and eventually it no longer looks like spiky intelligence. It looks like smooth
Speaker 6:Yeah. Like, the engineering task is to is to find the RL environment that makes the model better at writing, which is like what they're doing. Like, you see all these RL environment startups that basically just make these things that models that that Yeah. Labs train on.
Speaker 2:That specifically do things. Suspended cap says OpenAI could probably send save 25% on their compute if they just taught the model to give me the answer and then shut the f up a bit. Wild. This one resonated.
Speaker 1:Figma. Think bigger, build faster. Figma helps design and development teams build great products together. You can get started. Figma.com, of course.
Speaker 2:Jason Fried has a note here. He says, one of the best upgrades to ChatGPT is simply changing the base style and tone to efficient and giving it a simple get right to the point, be practical above all instruction. No more praise, no more flourishes, just the answers.
Speaker 1:Everyone appreciates Tyler jolly maxing. He really is in the Christmas spirit. It's fantastic. Hey, are you a miner? No.
Speaker 1:I'm here to sell shovels. Everyone's everyone's selling shovels. 20,000 likes Woah. On this just for different shovels. Some people are mining.
Speaker 1:Some people are mining. Some people are in the trenches. But there Yeah. This is is it is just a few people that are that are not selling.
Speaker 2:Big change from a year ago when everyone was just talking about how wrappers were were cooked and people were talking somewhat negatively about wrappers. Yeah. It's interesting. Are And those are
Speaker 1:are wrappers selling shovels during no.
Speaker 2:No. They're they're mining.
Speaker 1:It's mining. It's actually mining in like a very small side mine. Not the main mine, but like a smaller side mine, I guess. What do
Speaker 5:you think?
Speaker 6:I would think of of mining as being like if you are are actually, like, using the models to do, a roll up or something. I think that is more much more In the
Speaker 1:AI AI in shovels mining analogy, the mining, I I feel like it's, like, it's Elon and it's Sam and Demis that are doing the mining. Right? They're doing the core thing. And then everyone else is like is like, I'm I'm drafting off of them. I'm supporting them with shovels.
Speaker 1:Like there there's a gold mine that's being mined and and if I'm just like riding the coattails of that, then I'm coming along.
Speaker 6:I think the of of the gold as being the output that you can get with the models Mhmm.
Speaker 1:When you
Speaker 6:use the models. Mhmm. The models are the shovels.
Speaker 1:The models are the shovels?
Speaker 6:Yeah. So then so that
Speaker 1:is that is actually funny.
Speaker 6:Like, if you're if you're a roll up of of some, you know Yeah. Whatever companies and you're using AI to just Yeah. You're not like it's on AI company, but you're using AI a
Speaker 1:lot to Typically typically, the way typically, the way the whole shovels analogy is levied at start ups is, oh, you don't have it in you to create a great mobile app. So you're going to build a developer tool that helps people ship mobile apps. That was the original, like, the shovels critique. And it's the same thing with AI is the idea of, like, why don't you solve a cool problem with AI? Actually create some sort of, like, you know, system that solves a particular problem versus saying like, we're a platform for running AI agents on top of it.
Speaker 1:Like, we don't know what the agents will do, but we know that they need, you know, a database or something like that. That that critique has never been it's never hit that hard with me because they're like, they're they're both valuable. We need all of that.
Speaker 2:Yeah. That being said though, YC, I think it was the spring YC batch. There was a lot of people selling shovels. They built shovels. A lot of like very specific What I understand.
Speaker 2:I'm creating a full stack solution for end customers. It was I'm creating AI agents to help you manage your AI agent infrastructure company. No. It was like, well, about I think we need more actual end state agent companies that are selling to Yeah. Everyday consumers.
Speaker 1:Everyone talks about selling shovels during a gold rush. No one talks about selling just the wood shaft that goes into the shovel. I don't even sell the shovel. I'm a particular slice of the supply chain in the shovel supply chain. I'm so deep in the shovel supply chain, I sell the screwdriver that makes the screws that go that assemble the shovel.
Speaker 1:That's my business. I'm seven layers of abstraction away from the
Speaker 6:the shovel making machine.
Speaker 1:Yes. The shovel making machine.
Speaker 2:That's where you wanna rappers, I wonder I wonder I wonder if anybody's building a a a rapper company to help people wrap presents. I'm assuming that all the different LLMs can do this pretty well. You take a picture of an item. They they can, you know
Speaker 1:If they do that, that's sort of like your your Rubik's Cube benchmark. Because it it requires shape rotation, which the models have been notoriously bad at. I wonder, can they actually give you instructions on arbitrary sized present, the best way to wrap the present?
Speaker 6:Should That would be
Speaker 2:an Well, speaking of holiday gifts, we did a snap we did a demo
Speaker 1:We did.
Speaker 2:Today. I was wearing the specs for
Speaker 1:Yes.
Speaker 2:How to have Evan on.
Speaker 5:Yes.
Speaker 2:And I asked my specs. I said, can you count the presents under the Christmas tree? Yes. Nailed it.
Speaker 1:Yes. Fantastic. These
Speaker 2:are the important problems. I think it's about time.
Speaker 1:Yes. Evan. From Snapchat. Welcome to the stream. We're gonna walk him in.
Speaker 1:Let me tell you about Fall, a general media platform for developers, developing fine tune models with serverless GPUs and on demand clusters. Evan? Great to see you. I just thought this
Speaker 2:No way.
Speaker 1:No for the tree?
Speaker 4:Thank you.
Speaker 2:Great to have
Speaker 1:you in the Yeah. Put this up there. Please have a seat. And suit it up.
Speaker 2:You're so Look at this.
Speaker 1:You look fantastic.
Speaker 8:What's up? My wife told me to to wear a suit. She was like, it's part of the
Speaker 1:It is. It is. You know, we put on these suits, sort of as a joke. It was it was sort of a I mean, you're you're you're one of the you're one of the many tech people who maybe popularized the T shirt. And I wore the T shirt for my entire career in technology.
Speaker 1:And we were like, we want to stand out. Everyone else in tech podcasting wears the t shirt. Everyone wears the t shirt. Whether you're CEO of a public company or a podcaster, you wear a t shirt. We're like, how do we stand out?
Speaker 1:Let's do the opposite. Let's wear the suit.
Speaker 8:I believe it's like instant credibility too.
Speaker 2:Well, the funny so the funny thing when when some of our videos end up going viral in parts of the Internet that that aren't kind of familiar with what we're doing, there'll be comments of people like, look at these guys in suits. They don't know why how are they talking about software? They don't know anything about tech. It's like not getting the bit. It's very funny.
Speaker 2:Anyways, super super excited to have you on today. There's so much so much to talk about, and I don't even necessarily know where we should start.
Speaker 1:I mean, I'd love to start with a demo that we got just an hour or two ago, specs. How are you thinking about hardware these days? What's the state of the organization? How much of your time are you spending on it? Because you have a monster business to manage.
Speaker 1:You have earnings calls. There's so much going on. How do you how are you splitting your time? Does that team look like? What are your ambitions for hardware these days?
Speaker 8:Yeah. I mean, it's a really exciting moment for Snap because in 2026, we're releasing the first consumer version
Speaker 1:That's right.
Speaker 8:Of our glasses. Obviously, back, you know, maybe now more than ten years ago, we released camera glasses. Yep. You know, we kinda stepped our way into building out
Speaker 2:What was the actual first release of that? Public release?
Speaker 8:Was it probably 2016, broadly public? Spectacles.
Speaker 1:Yeah. Weren't they weren't they yellow?
Speaker 8:The original they had a little yellow accent.
Speaker 1:Yellow. Yellow. Yellow
Speaker 8:accent. The camera.
Speaker 3:Yeah. So
Speaker 8:back in the day, people were you know, and I I think this is still a concern. People were very, you know, worried about privacy. Yep. So big, you know, yellow ring around the camera and a a light to let people know
Speaker 1:There were bunch of really cool, like, little touches. Like, I I remembered the ability to to film. It was basically a square sensor, you could film horizontal or vertical. And and just those little touches. I'm wondering, like, do do you think those, like, small little wins are what help us break through to a world where everyone's daily driving some sort of augmented reality device?
Speaker 1:Is it a game of inches in the product feature side? Or is it just like more deeper in the supply chain once they're $50, everyone's going to be doing it? What do you what do you what's critical path to getting to bone level prevalence in face wearables?
Speaker 8:Yeah. I I think there are going have to be major breakthroughs in terms of the utility people get out of the the product. I I think the biggest challenge, and we learned this very early on with camera glasses, it's just not that much better than taking a photo with your phone. Right? Maybe you're rock climbing, you're on a jet ski okay.
Speaker 8:Yeah. You wanna, you know, make a video Yeah. Yeah. Hands free. I I think that's a totally reasonable use case.
Speaker 8:Yeah. But that's not an everyday, all the time use case. And so a lot of what we did, those early learnings, we sort of proved out people were willing to wear a camera. They were willing to wear, you know, glasses that had a computer inside. But then we just shifted our focus entirely to the platform and to driving more utilities.
Speaker 8:So I think, you know, the the latest version we put out in 2024 that you got to try Yeah. For developers, which is very focused on all those platform components
Speaker 1:Sure.
Speaker 8:So the developers could build all sorts of amazing now developers have built hundreds of these Lenses. You probably got to try a couple of them. Yeah. And so I think it's really about driving utility.
Speaker 1:Yeah. Yeah. That makes a lot of sense. It's it's it's always frustrating when you're in a, you know, a techno you're in, like, a technological platform shift, and I've seen this with with, with virtual reality where it's like so amazing and then the demo is like, well, it's really good on a plane. And you're like, I'm just not on the plane that much.
Speaker 1:It's sort of the same thing where like, if the demo is It's
Speaker 2:really good if you're watching a movie alone.
Speaker 1:Yeah. Exactly. And it's like, well, actually I I I wanna watch a movie with people and so the theater does work or the TV works. I'm wondering about how much AI is an accelerant in delivering value in the wearables context? Because I imagine it's useful for developers to, you know, write software faster now.
Speaker 1:But also, are you are you do you think that that's gonna be like a a relevant precursor to, you know, mass adoption is
Speaker 2:the AI Like, I'll give you an example Okay. Of, like, the live translation And and what's very cool about specs is, like, having having the the basically, the the heads up display, like, centered. So I can be talking to you and and be getting, like, live translation, which to me is like the kind of thing that feels very sci fi. And to be able to get it in a demo today, that feels like the kind of thing that AI is is a is a real accelerant for. And you can imagine being in a situation where you actually have multiple effectively like subtitling happening all the time.
Speaker 2:Mhmm. But maybe on that note, I guess, from from my understanding, you guys are not saying we're gonna build the hardware platform and we're gonna build a foundation model lab. And maybe if you could talk more about that because I think that's obviously quite a bit different than some other hardware players.
Speaker 8:Yeah. So far, we just haven't seen a need to to build foundational models outside of this sort of image and video and three d areas where we think we can really differentiate Yeah. And where there aren't as, you know, as compelling open source solutions. So and we also are very focused on being able to offer our experiences to our entire community, so nearly a billion people around the world. If you do that with back end inference, it's just too expensive to be able to offer it.
Speaker 8:So a lot of our innovation starting several years ago was to be able to run models on device or with a hybrid solution where we can do some on the back end, some on the device. Yep. And so that's really where our foundational work has happened. I think, you know, as you look at the glasses, near term, I wouldn't expect AI to be a major accelerant because, again, I don't think it's meaningfully better than your phone. Mhmm.
Speaker 8:Right? And I think that's really the the bar that we have to clear. These experiences have to be 10 times better than what's possible on your phone. And Yeah. And I do think over the long term, though, AI will be very, very meaningful.
Speaker 8:And Yeah. Less because of the, you know, sort of chatbot style use cases today, but more in terms of the way that, like, we change how we use computers. So if you think about today, we're spending, what, on average seven hours a day in front of screens. Mhmm. Yeah.
Speaker 8:We're spending a huge amount of time operating computers to get work done. So, like, physically getting the work done ourselves. And I think what AI enables is a change in the way we relate to computers, where we're gonna spend less time operating computers and more time supervising AI. And in that transition, the glasses form factor, I think, is going to be really compelling because it it essentially gets you away from this operational paradigm into the supervisory. Yeah.
Speaker 2:Or another I I mean, potentially more near term examples, like you're working on your car and you have this like AI assistant running permanently, and so you have full ability to use your hands and make changes, and it's kind of reasoning on the fly with you in a way that, you know, everyone's experience like, you know, watching a YouTube video and like pausing it and trying to do something and then on, you know, playing it again. And and I feel like I feel like there are some very near term
Speaker 1:How is that shift like, manifesting itself in your daily life as a CEO? Like, I found that since the dawn of ChatGPT, there's been this, like, urge for folks to, like, send ChatGPT written stuff to me. And I've always said, like, just send me the prompt and I can kind of rework it in my like, just send me the bullet points. I don't need to turn it into a paragraph. But I'm wondering if if you can give me some color on how you're seeing, like, AI change your your workflow or the folks that you work with on a daily basis.
Speaker 8:I think it's a really great thought partner. Like, I love to test ideas or try ideas or, like, I love to run simulated focus groups with AI, which is really fun. Like, what do you think different types of people will say or respond to, you know, in terms of, like, a product or idea that we're working on? So I I love it as a as a you know, of course, for all the visual and, you know, the visual stuff, video generation. Yeah.
Speaker 8:I can test out ideas really, really quickly. I I haven't actually found it yet to be particularly creative. But as a creative thought partner, it's it's fantastic.
Speaker 1:Yeah. Yeah. How do you think about the the instantiation of AI features within the core Snap product? It feels like there's an immense amount of energy all over AI with like super intelligent. It's gonna do everything.
Speaker 1:It's gonna make the full video. It's gonna make the video and the audio. And then when I see it's like, yeah. You get, one or two viral videos out of one of those generators. But the much cooler thing is I think when there's AI riding alongside the rest of the creative suite.
Speaker 1:How are you thinking about setting up creators for unique experiences that are, like, AI enabled, but there's still a lot of that creativity that's coming from them?
Speaker 8:Yeah. I mean, I think AI has been a core of the Snapchat experience for such a long time, but we've never described it as that. Yes.
Speaker 1:Slam. Like the original, like, actual, like, location mapping, the AR stuff.
Speaker 8:And even all the transformations that are happening in our camera. Right? A lot of the real time on device, you know, general transformations and these sorts of things. People just laugh and have fun with their friends They're doing not thinking like, oh, this is some, you know, AI. Yeah.
Speaker 8:Yeah. AI enabled.
Speaker 1:Mean, do phase tracking has been in there for so long and that's always been AI, I'm sure.
Speaker 8:Yeah. And and I think there there is a lot of opportunity to, you know, rethink the way that people build lenses. That's been really, really powerful. You know, in the past, you know, developer, it would take a really, really long time. You had to build the three d assets yourself.
Speaker 8:Mhmm. I think there's a huge democratization that's happening right now. Because anyone, you know, we have a tool called Easy Lens. You can, with a prompt, build all sorts of amazing experiences in AR.
Speaker 1:Yeah. What what what is the, like, the economic flywheel there? How do you how do you think about allowing folks to monetize that, build businesses, like, come like, what is your current mental model for the for the economy that's occurring on the platform?
Speaker 8:Well, one of the things we've thought a lot about is that there are a ton of models that are being created Yeah. But very few people actually have We have a ton of customers. Sure. And so what we've done is create a service called Lens Plus. So if you're a developer, you can publish your Lens to Lens Plus.
Speaker 8:Yeah. That means it's behind our paywall. People get free generations. They can use some Lenses for free for a certain amount of time. Sure.
Speaker 8:And then they convert to paying customers and we revenue share with those developers. Yeah. So I think interestingly, Snapchat's become a bit of a a front door, right, for folks who wanna deploy their models or deploy a a specific Lens or, you know, sometimes people are even building more advanced game experiences inside of Snapchat. And with Lens Plus, they get all that monetization for free. Essentially, we do that that work for them.
Speaker 1:Yeah. How do you how do you process, like, the whole the, like, the metaverse boom and bust and maybe it's gonna boom again. Just this idea of, like, just adding more and more functionality until you're effectively in like a game world unlimited content. Do you do you think that like is that is the primary driver of giving people the ability to make games just better AI tools? Are there other things that you are are are actually thinking about integrating there?
Speaker 1:Or or do you think that, like, the just partnering with all the models will eventually give people the ability to build whole game experiences.
Speaker 8:Well, it's interesting. The reason why we love games is actually the same reasons why we hate VR. Right? Which is games actually bring people together Yeah. In really interesting ways and we see that on Snapchat all the time.
Speaker 8:Right? Sure. It can be a conversation starter or a way for, you know, a way for two friend you know, I play putt putt with my wife on Snapchat. Right? And we just send them back and forth.
Speaker 8:It's fun. Right? It's a way to connect. And so I I think for us, games on Snapchat are really about, you know, that that like spark of connection between people. We we've invested $0 into VR.
Speaker 8:Because we essentially take think that it takes people out of the real world and away from the the places, the people, you know, everything that they they love. Yeah. And so our view is that VR has a very, limited and low use future
Speaker 1:Yeah.
Speaker 8:Because people love the real world. And so our bet, you know, for the last eleven years has been exclusively on augmented reality on Yeah. You know, in trying to enhance the human experience rather than replace it with VR.
Speaker 1:Yeah. Is there any is there anywhere where where you think VR does make sense? Like, are are there specific, like, b to b use cases or, like, some sort of, like I don't know. Like, maybe enterprise is where all the stuff, like, goes to die. But, but I I'm wondering if there's any if there's any
Speaker 2:place I guess the question is like
Speaker 1:for that
Speaker 2:think people assume that VR eventually will be good enough that a huge swath of the planet will be engaging in it a lot. Like at least that at least like that that my my personal theory and and maybe you believe differently. It sounds like you're even okay with a scenario where even if it does work, you're like other people can kind of play in that and we're happy to kind of exist in this hybrid world.
Speaker 8:Yeah. Just philosophically, like that's not a world that we wanna support in any way shape, or form. You know, I I think what's really important is actually trying to create products that foster that human connection, right, and then doing so in person.
Speaker 1:I think
Speaker 8:we're in a moment where people are really valuing that. Right? And they want more of that, and they're thinking about how to get get more of And I think AR is coming about it at a really important time when people are saying, actually, I'm spending a lot of time in front of a screen. I'd like to spend more time together with my friends. I'd love to do that in a way that's more fun or entertaining.
Speaker 8:Our kids even you know, our our kids are at least three of them are still pretty little. But like, when I see them playing around with those specs, even though they're clunky and heavy or whatever, they're outside running around playing together. And you're like, that's a different vision for computing.
Speaker 2:Yeah. Mean, you should have seen us doing the demo this morning. Was running last drawing. I was playing this this drawing game that you guys have where I was drawing, and and the ability to have this, like, shared space and have, like, permanence in the kind of in the in the different like visuals that you're creating on on a scene was is just really cool.
Speaker 1:Do do you think AR specifically means pass through? Or can or if I'm doing reprojection, I have cameras on the outside of a VR headset and I'm reprojecting that and it's indistinguishable for the user, does that count in your mind? Is it a meaningful distinction?
Speaker 8:It in our mind, doesn't count. You're describing pass through on VR where, you know, you the camera's in very high fidelity There
Speaker 1:was this quote from Palmer Lucky where he was saying, like, why would you ever, you know, try and, recycle photons? Just create new photons, take a video of the outside world, reproject it inside. And the benefit of that is that if you're in a very bright world or you're in a bright space, you can dim that and put something brighter on top of it. And there's certain like, the additive nature of physics around light make it so that there it does seem like there's limitations to pass through augmented reality, even though the latency is zero and it's the real world and there is something that's better. I just know that you might be grappling with it.
Speaker 8:Yeah. We we've definitely seen some real challenges there. So the the big difference, obviously, is between pass through and then see through, see through glasses that that we're working on. Yeah. You know, I I think Snapchat's actually a really good example of pass through.
Speaker 8:So it's a screen. Oh, That's And we we do have, I think, the best pass through AR technology in the world. Right? So we are able to real time render out those experiences Yeah. Through the phone.
Speaker 8:I think the question is, do people really wanna wear a screen on their face Yeah. In front of their eyes? And then, you know, if you think about the compute that's necessary to reproject the world, right Yeah. And the power required to, you know, power all of those pixels. Right?
Speaker 2:Yep. And it has to be like real time.
Speaker 8:And it's gotta be real time.
Speaker 2:You can't have like a half second of lag. Otherwise, you're just stumbling around.
Speaker 1:Yeah.
Speaker 8:Yeah. Exactly. So so when you put that all together, you're just stuck in headset lanes. And I think it's just very clear that, like, people don't wanna wear giant headsets all day long. I think that's that's Yeah.
Speaker 1:In terms of stuff that they do wanna wear, obviously, like, everyone wants something light. But in a world where field of view is somewhat restricted in the short term I'm sure it'll get better, wider and wider what's the tradeoff between center of field, center center view versus, like, Call of Duty mini map, like, locked in the corner?
Speaker 8:Well, think what's really important is that you're actually able to control where objects are showing up in the world around you. So the big problem with the sort of heads up display style I products mean, I don't love that if you're looking at the screen, you're looking at somebody's crotch, too. It doesn't make any Yeah. You know, but but the exciting thing about specs and as it sounds like you saw earlier today is you can decide where where to place things in the world when you want to draw. And I think that that's a a very big difference
Speaker 1:Yeah.
Speaker 8:From these heads up display products.
Speaker 1:That makes sense. How do you think about like, when the iPhone came out, there was there's sort of mean, it was a little bit expensive. We were talking about the $700. You could compare it to the price of a phone. You could compare it to the price of an iPod.
Speaker 1:You could they Steve Jobs called it inter Internet communicator. Right? So you kind of bundle these few different products together. You know, like, well, I'm getting $700 worth of value or later $400 worth of value. Do you think that there's a there's an important sort of anchoring point for for augmented reality glasses where consumers need to underwrite it against an external monitor for their computer or a TV at home?
Speaker 1:Is there some sort of like economic trade off point where, hey, I'm going to college and instead of getting a 42 inch TV and an external, you know, Apple display for my MacBook that I'm gonna plug in, I'm just going to go with augmented reality glasses because it just makes more sense economically? Is that an important point?
Speaker 8:I think that's one way to think about it, for sure. And, you know, the iPhone, when you add in the the carrier subscription, was way more than that. So I think, you know, they were able to sort of have a $700 sticker price. But then, you know, I think some of the initial plans were, like, $50 a month and that kind of thing. Two or three years, I'm not sure.
Speaker 8:Yeah. You know, that's that's a that was a really meaningful outlay for that for that product. I I to me, I think, you know, the iPhone is maybe not the best reference point here. I I think this feels to me a lot more like the Macintosh or like early computers.
Speaker 1:Sure.
Speaker 8:With the smartphone, you know, Steve essentially said, hey, everyone else is doing the phone wrong. Right? You had a Blackberry already or you had a flip phone or or this kind of thing. And Steve was like, hey, y'all are doing it wrong. This is like what a phone should look like.
Speaker 8:And I think glasses are a little bit different because, you know, we we have some similarities in the sense that, like, on one hand you have these VR headsets, right, that are very capable but that are essentially unwearable. And then you have the, you know, really lightweight glasses that are very wearable but do nothing. And, you know, our vision with specs is to have a very lightweight pair of glasses that's incredibly capable. Right? So VR sort of, you know, level of immersion and and capability, but but in a see through lightweight pair of glasses.
Speaker 8:So I think this is a little bit more of a Macintosh style moment where it's it's a new way to look at computing
Speaker 1:Yeah.
Speaker 8:Rather than, you know, a a better version of something people are already familiar with. And that's a bigger challenge. Totally. So I do think to to your point, you know, anchoring to, you know, hey, a giant flat screen display cost 2,500 cost cost $2,500 or a laptop cost, you know, $1,500 or whatever it is, is an interesting way to think about it. But I think actually describing the utility of the product will be the biggest challenge.
Speaker 2:Interesting. Yeah. There's some there's something to be said for if you just create a product that is incredibly fun and entertaining, like Mhmm. Consumers will find.
Speaker 1:Yeah.
Speaker 2:Like, they're not saying, like, oh, I'm not gonna get the the laptop anymore because I can type on this thing. It's like, I'm gonna I have a device that is Yeah. Creating value in my life purely through fun and function and it's doesn't need to, like, replace anything.
Speaker 1:Who do you think the the earliest adopters will be? Do you think young people will drive the ultimate breakthrough adoption
Speaker 5:of augmented reality?
Speaker 8:I think the earliest adopters will be our developer community. So we already have hundreds of thousands of developers who are building, you know, Lenses for Sure. For our platform. Mhmm. There are already tons of developers using specs today That's very
Speaker 1:building good. All of
Speaker 8:these sorts of building all of these sorts of experiences. And so our strategy is actually to start with that core of folks who are super passionate about this product. And I think, you know, they'll be able to tell stories about all the amazing things that they're building, which can then help us, you know, transition to more like mass market style adoption. So Sure. When a developer's building a lens, you can, you know, pop these on and stargaze or, hey, you can pop these on and, you know, play lawn games with your kids.
Speaker 8:Yeah. You know, or hey, pop them on and and watch, you know, streaming streaming video on a giant screen while while you're Yeah. Playing or wherever you want be without having to shut out the world. I think that those sorts of stories are really important.
Speaker 1:Yeah. I feel like Snap has been able to be remarkably resilient with young people in a way that a lot of other platforms they just kind of like they get their initial bucket of users then they grow with them forever and then they're monetizing when they get older. Is that do you think that there's some sort of benefit of having a a young cohort that potentially could drive just the product being seen as cool? Like
Speaker 8:You know, I joke around with my my wife all the time. You know, it's cool to be uncool. Like, we're not aiming for cool. Okay. We're really aiming for value.
Speaker 8:Interesting. Right? And I think ultimately, like, that value cuts across all sorts of demographics. So I actually think companies Yeah.
Speaker 2:Look at Air AirPods, I think, are a perfect example of this. They were mocked early It was like, oh, look at this guy with his little earbuds in. What a what a bozo. And then all of a sudden it was like $20,000,000,000 a year revenue line. Yeah.
Speaker 2:And it just becomes totally normalized. And it was just because the function was there.
Speaker 8:Yeah. Yeah. And I think being unapologetic about the value is so important. And so that's why, again, starting with our community that loves it, believes in it, you know, and has wanted a product like this now for decades. Mean, some of the folks on our team have been working on glasses based augmented reality for twenty five years.
Speaker 1:Sure.
Speaker 8:We've only been working on it for eleven years. So the community of people who have wanted this product for a super long time are gonna be the most excited about it. And that's really who
Speaker 2:we're looking into. And do the team think about timing timing out these bets? Because obviously, you've been at you've been at it for eleven years. Yeah. And to me, it seems from the outside that it's it's like trying to pull the future into the present, but at the same time being like patient and not betting the company on, like, hey, we need to make, you know, 10 x the progress in the next twelve months, otherwise, we're killing this product.
Speaker 2:Like, it feels like more quite a bit more, like, steady and being Mhmm. Being open to again, like not being being impatient, but patient at the same time. Is that accurate? I
Speaker 8:really love that question because I think that is exactly what has killed a lot of Glass's efforts Yeah.
Speaker 2:To date. Right? Like, we're gonna raise $200,000,000, spend it all in two years, and then you're sitting there and being like, okay, we made progress, but it's not commercial.
Speaker 1:It's not commercial. It feels like we're in an age of research for vision broadly, VR, AR, the entire category. There's just a lot of there's a lot of experiments that need to be run and there's no guarantee that it's gonna be, oh, next year's the year or five year. We don't know.
Speaker 8:This is one of the reasons why we thought it was so interesting to play in this space because we have this huge advantage of being able to invest consistently over the long term.
Speaker 1:Mhmm.
Speaker 8:Right? And and that's that is a unique advantage, especially when we're talking about this amount of capital. Right? We've invested more than $3,000,000,000 Wow. In glasses over eleven years, and we've been able to do that very, very consistently.
Speaker 8:And so Yep. At the same time, we've seen companies both large and small, you know, start a glass initiative, shut it down, start a new one, fire the team, hire a new team. And just the whole time, we have built a team of incredibly talented folks with a very, very singular and focused vision. And we've done that over the
Speaker 2:Is that part of the pitch? I mean, over the summer, we saw insane talent wars. Snap is a in a unique position, like, somewhat isolated down here in Southern California, which which I think helps. But, is part of your pitch to talent, like, hey, this is not a program that we're we just started up and we're gonna, you know, work on for three years and then the budget might get cut by x y z. Is is like durability and longevity a part of a part of your pitch?
Speaker 8:I think that's definitely a part of it. But the most talented folks, like, they wanna create the future, not copy the Yeah. Future. Right? And I think, you know, we have a reputation now for leading in terms of innovation in this space.
Speaker 8:And, you know, the folks who are really deeply in this space and who are experts in this space know that what we're doing is leading. Right? Mean, what you experience with specs today, there's no other product that you can that a developer can just sign up for today and have that type of experience doesn't exist. So I think folks who are really deep in this Yeah. Space understand our our leadership here and and that's really helped.
Speaker 2:Okay. Yeah. The pure the pure depth of of different experiences in the product too. Mean Yeah. We we didn't we only had, you know, twenty minutes or so, but there were, like, so many different pages that we didn't even get to in experiences, which is very cool.
Speaker 1:We we we we gotta talk about copying because, I mean, we've we we didn't invent this.
Speaker 2:We didn't invent television.
Speaker 1:We we but but we've had a lot of success with it this year.
Speaker 8:You clearly innovate.
Speaker 1:You've been part of this. Thank you. Yeah. Exactly. There's, a little bit of innovation here, and then there's been a lot of copying, and it's driven us various levels of insane It drives me more
Speaker 2:insane.
Speaker 1:Drives me more insane than it drives me. But at the same time, like, there's no law that someone's breaking if they wanna just like, you know, do exactly what we do. That's the way it works. So how how do you stay sane when people are copying what you're doing?
Speaker 8:Yeah. Well, you know, in the early days, we had no choice but to just innovate as quickly as humanly possible because we were late to the social space. Right? And Snapchat is not social media. We literally built the business as a response to social media.
Speaker 8:So It's messaging. Facebook came first and Instagram came first and Twitter came first. And we were using all these products and we were like, these are not very fun. Right? Like, is not actually a great way to communicate with your friends.
Speaker 8:It's awesome if you're into, like, status and building your profile and collecting followers. Not a great way to just have fun with your friends. And so we started building Snapchat and and I think, you know, there was just really a gravitation towards a service that is actually fun to to use with your with your real with your real friends. But as part of that, you know, because we're competing with such giant companies, we just had to innovate as fast as we possibly could in a category that is essentially owned by other players. Right?
Speaker 8:Essentially owned by by Meta. And and I think, you know, part of that is is understanding that, you know, one of the most important things you can do in that position is go and build a new category that's outside of the one that you're currently in. And that's what we identified with glasses eleven years ago. That we wanted to help power this this massive transformation in the way that people use computing. And then that if we invested over a very long period of time in very, very difficult things and things that are incredibly challenging technically and then built a platform as you as you saw lenses, all those different lens experiences, that those sorts of things are incredibly difficult to replicate.
Speaker 8:Sure. And so while I think, you know, app features are easy to replicate, the work that we've been doing over the last eleven years and where we're going with glasses is incredible.
Speaker 2:The example yeah. The example for us is like people see the overlay, so they'll copy the overlay
Speaker 8:and not realize that like it's not
Speaker 2:that's not what, you know There's a lot overlays have existed for decades. Right? So you like you I find oftentimes when people copy, they don't actually fully understand what they're copying. Mhmm. So they take an element out of it.
Speaker 2:Yeah. Not realizing that it's not necessarily that element that makes the other platform successful. How how have you thought about partnering with different AI companies and labs? You recently announced a Perplexity, partnership which is, which I thought people were excited about. And then I feel like all this year, people have been as as some of the labs have have added, hundreds of billions of dollars of value, there's been speculation on, saw people speculating on, you know, you could imagine Sam Altman trying to buy Snapchat because he sees your user base.
Speaker 2:And I can see a lot of reasons why why why there's no price that would that would make that appealing. But how have you thought about partnerships with different AI providers broadly?
Speaker 8:Yeah. Well, I think one of the things that's been really interesting, obviously, Snapchat is so focused on messaging. And right now, the primary way people are interacting with AI is is messaging. And so we saw a huge opportunity to help bring, you know, more of these AI services into Snapchat, into our messaging platform. Because, you know, as I mentioned, whether it's the foundation companies or tons of businesses have built agents now, have built chatbots, but they don't have any distribution for them.
Speaker 1:And
Speaker 8:earlier this year, we launched sponsored snaps, which is a killer ad product for us. It shows up in the in the chat inbox. Yep. Highly effective. But the vision is to transition the sponsored Snap from being something that, you know, you just view to now something you, you know, you can interact with Mhmm.
Speaker 8:Yeah. And chat with. And so part of that was opening up the platform starting with, you know, Perplexity with an exclusive deal with them. But, you know, then over time adding more businesses who are bringing their chop chatbots and their services to to Snapchat.
Speaker 1:Yeah. Can you give me a little
Speaker 5:bit more of
Speaker 1:an example of that? Like, if I'm Diet Coke and I and I wanna advertise this sponsored Snap, but then you can chat with it. And so is it more like q and a on an FAQ? You could ask questions about the product or is it something more gamified than that? Like, what is Yeah.
Speaker 1:If you
Speaker 8:think about someone like, you know, Walmart, they've spent a lot of time building about a service called Sparky. Right? That you can use to learn about products or or buy products. So what they could do is send you an offer directly to your inbox, ideally highly relevant to something you've already been looking for at Walmart or based on Yeah. How you've been engaging with Walmart.
Speaker 8:And then you can follow-up, have a conversation Okay. You know, potentially even convert in the chat.
Speaker 1:And so that's, like, uniquely good in a chat app, like, because you're in you're used to that functionality, I suppose, as opposed to just kicking you out to some web page where the UI is a little bit more foreign or, like, abstract to you.
Speaker 8:Yeah. Exactly. I mean, Snapchat's one of the largest mess maybe Yeah. After iMessage, but the largest messenger, certainly bigger than WhatsApp, for example, in The United States. So I I think, you know, in terms of people who are familiar with, you know, our messaging interface, that's where they go to have their conversations.
Speaker 8:Yeah. Being able to have those conversations not just with your best friend but also with agents like Sparky, I think, is an interesting opportunity.
Speaker 1:That's very cool. There's a whole bunch of news. OpenAI today shortened their vesting period. How do you think about aligning talent, aligning incentives for talent? You've you know, this transition now, you're a public company.
Speaker 1:How do you think about whether or not a vesting cliff makes sense? We were going back and forth on it. I was saying that I'm so used to a
Speaker 2:one year cliff growing up Coming from the private markets.
Speaker 1:Private markets. At the same time, there's a lot of people that show up and on day one, they're creating a lot of value. So how have you thought about incentivizing employees with stock?
Speaker 8:Our perspective on this has like really evolved over the years and we learned a ton. Actually, the early days, we did something really different. We had a ten, twenty, thirty, forty vesting schedule. So you would only vest 10% of your grant the first year, 20% the second, 30, 40%. And the idea and and we were in LA at the time.
Speaker 8:The idea was to really make sure if you were joining Snap, that you were joining it because you loved it. Yep. You wanted to be there for the long term. It was very popular at the time. I think still very popular in in the Valley to kinda hop, you know, spend one year at
Speaker 2:at a company. Yeah. Why do four years when you can build a basket of Exactly.
Speaker 8:Yeah. And and I think, you know, I think that can be real that that can put a lot of pressure on the culture, especially in a start up where you really you know, I I think it's so important that the team is all in on on what you're what you're building. But, you know, I think over the time, our our view has just been, like, to take as much friction out of the compensation conversation, you know, as as possible. I think, like, a lot of this stuff is really, frankly frankly, like, irrelevant. Right?
Speaker 8:Like, what really matters, obviously, if you look at retention and building a team, it's your your leader. Right? The people that you're working with, obviously, what you're working on, the culture, you know Yeah. And and that long term orientation. So I think a lot of this compensation stuff is sort of like details.
Speaker 8:And the less complicated it is and the less time you spend talking about or thinking about it, the better.
Speaker 1:Yeah. What about other just lessons from becoming a public company? We we like to joke with Eric Lyman at Ramp, one of our buddies that, you know, he's maybe about to go out. What is he preparing to do? What what what are your recommendations for CEOs that you counsel about the process and the transition that the company goes through in the IPO process, just culturally?
Speaker 8:I mean, the the most substantive change is that people's compensation changes on, like, a minute by minute basis. Oh, yeah. Right? And, like, that can be very distracting for people, especially in the early days. And when companies are newly public, there tends to be a lot of volatility.
Speaker 8:Sure. Right? So think it's just really important, again, to create a company culture that's not focused on that Yeah. Especially if you want to build something meaningful over
Speaker 1:the long I remember hearing a story about Enron putting the stock price in the elevator. So, like, the exact opposite of what you said. Like, literally orient the entire company culture around the stock price. So you come in, stock price is up, everyone's having a good day, stock price is down.
Speaker 2:How did that how did that work out
Speaker 1:for them? I I don't think it worked out well. I don't
Speaker 2:think What about what about setting what about setting you seem like, you know, through this conversation, you seem like very clear on your values, willing to say like, yeah, we don't wanna do VR specifically. There might be money to be made there, but we don't Mhmm. We wouldn't even do it on a on a principles basis. How do you think about kind of setting vision internally with the team and externally with shareholders? There's been so many companies this year that specifically in AI that kind of like to talk about a vision around, let's say like curing cancer.
Speaker 2:Mhmm. But then you look at what they're actually doing in practice and there's not always incredible there's can there can be like kind of a disconnect between those two things. And I feel like that that, you know, it's confusing for people that are just users, spectators, shareholders, and then team as well. So how do you find that kind of alignment in in vision?
Speaker 8:What a great question. So I think for us, like, of the things we always, you know, remind our team is that as we look at leadership at Snap, you know, lot of people think about leadership in this, like, traditional hierarchy. Right? Where you have, like, leaders and then the team and so we have, at Snap, inverted that. Right?
Speaker 8:So if you're a leader at Snap, you're at the bottom of the pyramid, in an upside down pyramid. Right? And then you have the team that you're responsible for. Yeah. And then you have our community more broadly.
Speaker 8:Right? And that includes our partners. And so that's also how we think a lot about communication. So when we're communicating to the world, when we're communicating to investors, we always try to remind our team that, like, our investors are a subset of our community. Right?
Speaker 8:And so it's really, really important that we speak in, you know, language that people actually understand. Right?
Speaker 4:And Yeah.
Speaker 8:Instead of talking about, you know, you we can talk all day in fancy AI terms. Right? But that doesn't really matter when it comes to communicating to your customer and the customer experience that they're having. And in fact, sometimes it can be more confusing. So I think as long as we put everything through that lens of, you know, putting our community first and foremost, and then communicating, you know, making sure that we're always talking to our community first, even if it's some investor update or, you know, something like that.
Speaker 1:Yeah. Yeah. Yeah. It's interesting. Do you have any book recommendations?
Speaker 1:Did you read any good books this year?
Speaker 8:Oh, my gosh. Christmas gifts for people. What's their I'm like I
Speaker 1:know it's a really wild
Speaker 8:what's highly relevant I think for for this form. There's like a there's a great book that I read Yeah. On I'll have to find the name for you. It's something about like, you know, it's it's very academic, but it's sort of like the economic impacts of techno technological disruption. Sure.
Speaker 8:And it really a bit Maybe
Speaker 2:a little bit bit textbooks.
Speaker 8:Yeah. Like, textbook style.
Speaker 1:Okay.
Speaker 8:But what's great is that it just shows like, you know, from the railroads to semiconductors, etcetera, like the patterns that emerged Yeah. These sorts of large technological changes. And I think it's so important because I think we just need to be reminding folks that, like, these sorts of changes have happened before. Yeah. It there's actually quite a consistent rhyme and reason to what happens.
Speaker 8:Yeah. And that means that all of us should be able to kinda think ahead and manage ahead
Speaker 1:Yeah.
Speaker 8:You know, through some of the consequences of, I think, what's gonna happen through, you know, what will be a a quite a disruptive period of time.
Speaker 1:Do you think do you think it's underrated that AI can potentially really help with moderation on big platforms, like scale platforms where, for the first time, you might be able to effectively, like, review every message that's going everywhere? Or is that is that a negative thing? Is that a positive thing? We were just talking to Dave Bazooki at Roblox, and, obviously, the the potential of, like, screening every message seems like a really great opportunity for him. And I'm just wondering if, like there's so many, like, opportunities, but also, like, risks with this stuff.
Speaker 1:Like, how have you processed this idea of, like, AI as a moderation tool sort of under the hood?
Speaker 8:So so first of all, I I do think AI moderation is already, like, very widespread. Sure. Like, I think that's already best practice. I think virtually everyone's already doing that.
Speaker 2:Yep.
Speaker 8:At at least, obviously, we're Yeah. We've embraced that at Snap. I think it's very important. And I also think it's a really powerful tool, again, customers if they wanna fact check something even that their friend told them. Right?
Speaker 8:The ability to fact check using AI Yeah. Today is is pretty compelling compared to what it was in the past. So when people are talking about concerns about misinformation and this sort of thing, I think AI is a pretty powerful counterbalance to that.
Speaker 1:Yeah.
Speaker 8:What I'm more interested in though is the use of sequence models to find bad actors Yes. And to stop them before something bad happens.
Speaker 1:Okay.
Speaker 8:So that to me is what I think the frontier of, like, Internet safety is, You know, currently, it's certainly an area of research for us and something that we're really excited about because we have a lot of information about what, you know, bad actors try to do on our platform. We catch a lot of them. Right? But with almost a billion people, it's hard to catch all of them, but we're But what's really interesting is, you know, we can train sequence models based on those patterns. What sequence of events are bad actors engaging in?
Speaker 8:How are they using the platform so that we can predict Yeah. You know, when someone is about to do something Sure. That is against our our terms. And so to me, I think that's a lot of, like, the the paradigm that we're gonna see in in Internet safety over the next couple years. I think right now there's a big focus on, you know, features and trying to tease apart what sort of different features different platforms have.
Speaker 8:I think there's just gonna be a massive shift to being able to identify bad actors even before bad things happen Yeah. Using tools like sequence models.
Speaker 1:Yeah. Yeah. Are are you seeing, like, the level of, like, bot activity or at least people trying stuff increasing? We've been talking to a lot of, like, cybersecurity folks, and it feels like they you know, the all all the all the the bad guys on the Internet, all the black hat hackers have more tools, but then also the white hat hackers have more tools. And so it's sort of like a cold war.
Speaker 1:But I'm wondering if, like, do you feel like you're spending more time for just just more headaches focused on, you know, defending against, like, endless bot armies? Or has that just been, like, a drone throughout the entire process, for the entire career?
Speaker 8:I I think for us, like, if if you look at cyber security, right, some of the, like, most significant threats are actually, you know, are human vulnerabilities. Sure. And I think that's where AI actually is is almost the most dangerous. Because today, right Sure. Our team members can get phone calls from Evan.
Speaker 1:Yep.
Speaker 8:Hey. I really need your help. I gotta investigate this saying, hey. Need $200. Wire me $200 or buy some gift cards really quickly for this creator event we're doing.
Speaker 8:Right? Like, that's like and and I think like the ability for for bad actors to use AI to exploit our human vulnerabilities Yep. Is something that we really worry about and think a lot
Speaker 1:Yeah. About. Mean, there were so many times where like the phishing email was clockable just by bad grammar or, you know, spelling mistakes. And it was like that was enough of a tell and like one pass through any LLM and you get rid of all of those.
Speaker 8:I I think another thing that's gonna become increasingly important, you know, as as we look at cybersecurity is the interconnectedness of all of these services. Right? Like a lot of companies today, especially young companies who aren't investing a ton in cybersecurity are using a huge number of vendors. And what's really interesting is, you know, today, compromising a vendor and then using that vendor to compromise the the, you know,
Speaker 1:core business. Tax.
Speaker 8:Yeah. That that's the sort of stuff that's really concerning, especially with phishing. Right? So we saw an interesting one recently where one of our vendors was compromised. I received an email that looked like it was from the vendor.
Speaker 8:Right? But it was actually a phishing email. And, you know, it's, again, very hard to tease apart. So I think the interconnectedness in terms of cybersecurity is something that folks just don't talk about as much as maybe we we need to.
Speaker 2:We we joked about some news organization acquiring paperless posts and then just understanding who where all the different people going to events. Most powerful people. I do have one kind of more broad question, and then I know you you gotta jump. But Snapchat, think of as like country scale or it's it's the size of a nation state. You're basically the governor of a basically the governor of a state or or or a country and and California specifically has gone through a really wild year.
Speaker 2:You grew up in in the Palisades. I'm wondering if you were if you were, like, what would you do? Like, how do you kind of like, how do you feel California is today as a state, even Southern California more specifically? I think, you know, we I live in Malibu, and John lives in Pasadena. We weren't affected by the fires, but there was this, like, extreme frustration during that moment because it felt like, in many ways, the government had had kind of failed the citizens.
Speaker 2:So I'm curious if if there's anything that like, are you thinking about the future of the state and and how we can make positive change?
Speaker 8:Okay. Well, we could spend another another hour on this. So I I love California so much. Obviously, I was born born and raised here. I think it's an incredible state, and it's so important to the future of US competitiveness.
Speaker 8:Right? So I think that people talk a lot about the competition between US and China. Don't I think people talk enough about the competition between China and California.
Speaker 1:Right?
Speaker 8:Which is a really, really interesting relationship because both China and California are deeply interconnected at the same time that that we're competing a ton. So I think California is just unbelievably important to the future trajectory of The United States. I think if you look at California today, I mean, you know, you you obviously know all the stats, but, like, highest unemployment rate, highest poverty rate, most homelessness Housing.
Speaker 2:Housing crisis.
Speaker 8:Massive housing crisis.
Speaker 2:People moving saying, I'm moving Austin for quality of life. I love Texas. Texas is amazing. Justin But it can be like well, it can be like mid I mean, it's very cold in the winter. It's very hot in the summer.
Speaker 2:If you're moving somewhere like that for quality of life, it just means that housing is, I mean, housing affordability is, like, top of mind for a huge percentage of people. Of course, here, that's, you know, most elevated.
Speaker 1:Mhmm.
Speaker 8:Yeah. I think the affordability crisis here is is incredibly concerning. I think one of the things if we look historically at, you know, the way that our government has operated, we kinda we we tend to fall in this pattern, it seems like, of, you know, very heavily regulating our industries, which, you know, by the way, to some degree is important. One of reasons why we love California, it's beautiful. Right?
Speaker 8:It's clean. All these sorts of things we really love about California. But at the same time, we also then layer a ton of subsidy on top of that. So you dramatically restrict supply with very Yeah. Very heavy regulation.
Speaker 8:And then, you know, we we've got a very large economy. We've got the highest one of the highest tax rates here in California. Put a ton of subsidy into that economy after Yeah. Dramatically restricting supply. And as a result, in all these areas, you know, especially things like housing, I think you have massive increases in in pricing.
Speaker 8:And and I I am optimistic in the sense that I think the legislature this year is really starting to pay attention to it. Right? There's some progress on sequel reform. For example, there's more attention being paid to, you know, how expensive it is to building affordable housing here. When the government pays for affordable housing, it's about 30 or 40% more expensive than just Of course.
Speaker 8:Market rate affordable housing. And so I think, you know, people are starting to pay attention to it. But the another thing that's fascinating is I'm just not sure Californians are aware of how problematic things are right now, especially because our politics are so partisan. Totally. That I think if you look at the California voter base, they're saying, oh, well, at least it it doesn't look like the federal government.
Speaker 8:So we're doing better here than, know, than than they're doing in DC. So I'm okay with that. Totally. But so so I think to me, part of the, you know, the journey over the next couple years is is California is really Californians really waking up to the fact Totally. That we can do a lot better here in our state.
Speaker 8:And in fact, we we've gotta do a lot better, you know if The US wants to continue to compete.
Speaker 2:No. And I I went growing up in in the Bay Area and living in Southern California in my adult life, I went through brief moment during 2020 where I started looking on Zillow outside of the state because it was like they shut down the beach. I was like Mhmm. Yeah. I'm living like half a mile from the beach and I can't I can't go there.
Speaker 2:And I made the very specific decision. I was like, no. I'm not gonna I'm not gonna leave this. This place is too beautiful. I've had family roots here going back to the early nineteen hundreds.
Speaker 2:We need to stay and people need to focus on making it better. It's the greatest place on earth that I've been to and and it's worth it's worth continuing to invest in and and steward. And I I felt like the fires were so symbolic too at the Palisades of like the you know, everything burning to the ground except Rick Caruso, the guy we couldn't elect as mayor even though I believe, you know, again, I believe he genuinely loves the city and and wants to see it shine. Well, can
Speaker 1:we help you this present?
Speaker 2:We should.
Speaker 1:Because we could talk about politics for the rest of the show. What is in here?
Speaker 2:We don't talk about we don't talk about
Speaker 1:Oh, is this an ornament for the tree? No way. This is incredible. Oh, I think this is gonna be a new new tradition. I like this.
Speaker 1:Yeah. We we Oh. This is amazing.
Speaker 2:There we
Speaker 1:go. Close-up. Well, how perfect. Thank you. This is remarkable.
Speaker 1:It's a
Speaker 2:great 2025 edition of the song.
Speaker 1:Would you mind signing this? Oh, wow. Love the autographs. We love we're we're building a a museum of business. And then I I think you got a chance
Speaker 2:to That's hang out in incredible. Putting we gotta put that up at the very top.
Speaker 1:For sure. So For
Speaker 2:sure. You
Speaker 1:so much.
Speaker 8:My pleasure.
Speaker 1:Fantastic. We'll let that that looks fantastic. Yeah. Congratulations. So much for
Speaker 4:having me.
Speaker 1:One one almost 1,000,000,000 global Snapchatters. Can we have you hit the gong to some
Speaker 2:You gotta hit the gong too.
Speaker 1:The gong if you come to the if you come to the UltraDome, please, pick up this mallet here.
Speaker 2:Hit it as hard as you want. It's as hard
Speaker 5:as you want.
Speaker 8:I'm glad you labeled it too.
Speaker 2:Fantastic. Thanks for hanging.
Speaker 5:We're really love
Speaker 2:to have you back. Thank you. Anytime.
Speaker 1:I I I really love the ornaments. I didn't even realize that that would be something that could happen given that we have a tree. Like, this is going to be a thing now. We're going to grow an ornament collection.
Speaker 2:That's merch.
Speaker 1:Amazing. I I love it. Well, that was a fantastic conversation. Thank you for everyone for listening. And let me tell you about Vanta, automate compliance and security AI that powers everything from evidence collection and continuous monitoring to security reviews and vendor risk.
Speaker 1:There is some Oracle news. What else is going on? I've just pulled up this hilarious video of Oracle pivoting to AI. I don't know if we should flip back to this. Have RJ from Rivian coming
Speaker 2:out Play just video while we wait for RJ to join.
Speaker 1:This is this is perfectly on
Speaker 2:the franchise. I put this in there for you, John.
Speaker 1:So so the news here is that Oracle, Oracle bondholders now sit on 9% of unrealized losses on 18,000,000,000 of debt.
Speaker 2:We should Don't focus on
Speaker 1:that, John.
Speaker 2:Focus on this video. Matt Turk says Oracle after pivoted after You're pivoting. To AI.
Speaker 1:80 years young.
Speaker 2:This guy look
Speaker 1:this makes me want
Speaker 2:this makes me wanna own the stock. This is really does feel
Speaker 1:like bullish.
Speaker 2:This really does feel like, the current state of Oracle.
Speaker 1:I mean, Larry Ellison looks fantastic. He's he's been on a he's been on a tear and you know, like
Speaker 2:This is this is this is
Speaker 1:I think
Speaker 2:This is your future, John. After we're gonna we'll probably retire somewhere around 70. So we got we got a good we got a good run ahead of us still. But then you're gonna go and and go back and and hire an elite team and Good. Really make a run at the at the Arnold Classic Yeah.
Speaker 2:In the in the in the vintage division.
Speaker 1:Yeah. Well, let's head over to Keller Clifton and Andrew Cote. Keller says next gen infra. And the the drone tower is really remarkable. Like, what is that?
Speaker 1:Four, eight, 12 drones in one tower all charging. These are, of course, the zipline drones that deliver everything from Chipotle burritos to, I think, blood transfusions and all sorts of stuff, saving lives. And Andrew Cote says, we are not mentally prepared for just how cheap everything is about to become as robotics of all kinds explode into the market. And Elon Elon chimed in. He says, harnessing even a millionth of the sun's energy would make every human a billionaire in purchasing power.
Speaker 1:Wow.
Speaker 2:I don't I'm not sure dead mouse concerts are gonna get, any cheaper, given that some of these robotics companies are hiring, hiring in order, for their holidays.
Speaker 1:Keller is locked in. Keller is locked in.
Speaker 2:He's not hiring deadmau5.
Speaker 1:Yeah. Maybe maybe we should see. We I mean, we don't know that he didn't. It's possible he did. It's possible.
Speaker 1:I mean, I I have
Speaker 2:a feeling possible.
Speaker 1:Anyway, fin dot a I, the number one AI agent for customer service, automate the most complex customer service queries for every channel.
Speaker 2:Joe Longsell said, older friend I admire. I'm having a real I'm having real liquidity trouble. Me, you own over 45,000,000 of shares in a private company. X, I started you back this early. Take 10,000,000 off?
Speaker 2:Not sure. I don't like to sell stuff. Me, Okay. FYI, it's QSPS. I'll think about it.
Speaker 1:Yeah. QSPS. In the chat Nothing better. Ryan asks, are we gonna cover Roomba? I'm you news about Roomba?
Speaker 2:Finally Total company
Speaker 1:bankruptcy. Very upsetting because, of course, they were going to sell to Amazon.
Speaker 2:Companies are buying up the assets at auction?
Speaker 1:I'm sure. It does seem like they are I don't know. Is GoPro in the same in the same, in the same bucket? I don't know. How's how's GoPro doing these days?
Speaker 1:But, yeah, Roomba so GoPro is down to a 150,000,000 market cap. Up. Of course, it was in the billions at one point. And Roomba, you know, you just get really heavy competition from international players. It it compounds and compounds and eventually, there's nothing to do.
Speaker 1:But ideally, hang out with the good folks over at Amazon. But that was of course blocked. And so they had to go their own way and their own way led to doom unfortunately. But fortunately, we have an American company that's bringing it back. This is not an intro to our this is an intro to Matic, the Roomba competitor or Damn.
Speaker 1:New company that that came came on the show. And you have one at home. You have
Speaker 2:I do.
Speaker 1:You have the the phoenix rising from the ashes.
Speaker 2:Okay. You know, you wanna know why
Speaker 1:You have the reincarnation of
Speaker 2:wanna know why I believe Matic is really gonna go all the way? Why? It's because my children Yes. Specifically my one year old
Speaker 1:Yes.
Speaker 2:Is constantly messing with it and it still works. Really? That's impressive. My one year old is just constantly Like moving on it. Moving on things.
Speaker 2:Taking it apart Sure. Putting it back together and and not in a not in a very any type of more specific way. She's just kinda messing with it. And it still works. It still runs every day.
Speaker 2:Yeah. I don't you know, some some of these things, a device like that you you the concern is always, okay, it works Yeah. But do I have to spend a bunch of time thinking about it and and kind of like managing this new robot?
Speaker 1:Yep.
Speaker 2:And is it and then at that point, should I just have a vacuum and and just use that?
Speaker 5:Yep.
Speaker 2:This thing has just been running perpetually on a schedule reliably. Yep. I've had it running for at least six months now, and and it's really fantastic.
Speaker 1:I have an idea. Okay. So you turn your kids loose on julius..ai. We see if that still works once your kids have gone crazy all over the AI data analyst that works for you. Join millions who use Julius to connect their data, ask questions in an insect and seconds.
Speaker 1:If it holds up, you know, I think it's a good sign. I think it's I think it's built for
Speaker 2:Gold Rock because I won RadioShack's Innovation of the Month in like 2009 for making an Arduino Roomba. That is cool. Speaking
Speaker 1:I was hanging out with some some mutual friends of my kids last night, some parents. And you know what they had in the driveway?
Speaker 2:Did you just call the parents of your kids mutual Sorry.
Speaker 1:So No. Did. It's Brian's parents. What what do you say? Play date.
Speaker 1:I went on a play date. Okay? Shoo me. I went on a play date and and the parents of my kids' friends, yeah, the parents of my kids' friends. Right?
Speaker 1:They had a Rivian r one s in the driveway and they're very happy with it. And I'm very happy that we get to talk to RJ from Rivian here in the studio. Welcome to the show. Welcome RJ. How are you doing?
Speaker 1:Thanks so much for taking the time to come chat with us today. It's
Speaker 2:great to have you.
Speaker 5:Yeah. Nice to be on.
Speaker 1:Yeah. I would love to, I mean, first set the table on, you know, like, how the year went, where the business is, and then, of course, I wanna go into the new chip and, and just self driving broadly. But, but how how are you describing the scale of Rivian at at this point in time?
Speaker 5:Well, I mean, we're we've launched as you as you just referenced, we launched a a set of flagship products. We have an r one s, which is the best selling premium SUV in The US, and then electric SUV in The US, and then we have a truck r one t.
Speaker 1:Yep.
Speaker 5:And we make commercial vehicles. But we haven't launched our mass market product yet, which which is coming in the form of what we call r two.
Speaker 1:R two.
Speaker 5:And so that will dramatically expand the scale of the business. And I think a lot of the a lot of the, in some ways, challenge we've had is we're investing to be a very large business. So we're investing in vertically integrated technology to enable us to be a, you know, multimillion vehicle a year business. And the technology investment has to happen before the products come. And so we have, you know, huge fixed costs to develop all this tech, whether it's you referenced it already, whether it's in house silicon or all of our compute platforms, our operating system, you know, of course, all the high voltage work.
Speaker 5:Mhmm. But that all comes together really nicely with the launch of r two, which is what really gives us the scale to support all this r and d.
Speaker 1:Let's start with r one t. Electric truck felt very contrarian. It feels still a little contrarian. Truck buyers, you know, not to generalize, but it's a very much like, I like my truck, reliable with gas. I don't like this new thing.
Speaker 1:Did it seem like a risk to you at the time when you put when you said, okay. We're gonna do the truck first. We're gonna do that so early. Yeah. Like, what what gave you confidence that it would deliver and you could actually win that market over?
Speaker 5:You mean the truck the truck market specifically is such a it's such a large market, and it's and I think we often think of it as, like, one singular type of buyer, which is Yeah.
Speaker 1:Like, the
Speaker 5:person who's loading up without, you know, 2,000 pounds of concrete in the back.
Speaker 1:Yep.
Speaker 5:Vast majority of trucks used in The United States are actually used more like cars. So they're, you know, they're they're used as a daily driver. The the the bed is used more for lifestyle activities. So, you know, put a dirt bike in the back or
Speaker 1:Got it.
Speaker 5:You know, kids toys in the back, that kind
Speaker 1:of thing.
Speaker 5:And so we said we're not as a company trying to address the contractor use case. So if you're if you wanna load concrete and cement blocks in the back of the truck, this is probably not the vehicle you wanna do it in. It could do that. It's capable of, but that's not the brand aspiration. And it was one of the reasons we also made it really clear that we are had both the truck and then this sibling vehicle, the SUV, and there's so much shared content between the two.
Speaker 5:But the other thing we wanted to do is just to eliminate any questions of whether or not it was capable. You know, you'll laugh, but in '20, I guess, 2019, I would get questions like, well, what if it gets wet? Can it drive through deep puddles? And, like so it's just, like, a very very low level of understanding, I'd say, generally around electric electrification, what that can do in terms of off road and capabilities. And so with r one, we made it really capable.
Speaker 5:So it's you know, it can go extreme rock crawling. It can go drive through three feet of water. It can, you know, it can accelerate faster than, you know, most hypercars. So our our current quad, the zero to 60 in, like, in a half seconds.
Speaker 2:Sort of
Speaker 5:unnecessarily silly in terms of its capabilities, but it's a it's a flagship product. So it's there to make a statement. It's there for for building the brand.
Speaker 1:Yep. On on the SUV side, have you been surprised by how how much runway you've had in that market for full size SUVs? Because it feels like a lot of people went after trucks very quickly, but the the fast followers haven't really come after the r one s. And from I mean, I grew up in a family with a Ford Explorer, and I've always been
Speaker 2:full size SUVs. One of those things that in in twenty years, people will look back at this window of time that Rivian had to just dominate that full size SUV category and and feel like Yeah. This was the biggest possible blessing that you guys couldn't necessarily plan for, but it kind of worked out nicely.
Speaker 5:Yeah. I mean, it's to your point, I mean, the in the space of electric vehicles priced over $70,000, these are all depending on how you draw the boundary diagram. The way we look at it, we have about 35% market share. And so it's the best selling electric premium SUV in The United States by a significant degree, you know, significantly outselling something like a Model x, which is Yeah. Also in that same category.
Speaker 5:But it but interestingly, in the state of California, it's the best selling premium SUV electric or nonelectric.
Speaker 2:Oh, really?
Speaker 5:Well If you for those that are spending time in California, if you're driving around the Bay Area, you're driving around SoCal. Yeah. They're just everywhere. So, you know, our hope is that with r two, it's a price point that starts at 45. It captures a lot of the magic and the essence that's in r one Yeah.
Speaker 5:But at a much lower price point. So if we can have even a fraction of the market share that we have with r one with r two
Speaker 1:Yeah.
Speaker 5:We'll be we'll be very, very, very happy.
Speaker 1:Where did the headlight design come from? When I first saw it, I was like, it looks like cartoon eyes. It was not for me. And now it's completely grown on me, and it's just completely been like, oh, that's just like it's it's become not only, like, I I I think of it as cool. I don't think of it as, like, cartoony or childish, but also it's simultaneously become iconic because I see it from a mile away, and I'm like, oh, that Rivian.
Speaker 1:And I feel like that's exactly what you how you wanted it to play out, but what was the thinking with that? Because it does feel bold and different.
Speaker 5:Yeah. Definitely. And, you know, getting to something that starts to feel iconic, it's always hard because Yeah. You can't design something and it immediately becomes iconic. So I think it has to start with a really strong point of view and a strong conviction around a certain direction.
Speaker 5:So in the case of the front end, I mean, no in 2018, 2019, no one knew what a Rivian looked like. We didn't know what a Rivian looked like. So we were figuring out. So there's lots of different phases of the vehicle. And one of the things we arrived at was the realization we wanted it to look technically capable but also friendly.
Speaker 5:And so often if you go friendly, it starts to look like nice but not tough. And so we wanted, like, nice but still tough. So it's a really hard balance.
Speaker 1:The original Waymo's from Google were, like, a little bit too nice, and they're, like, these goofy things, and then they finally yeah. But, yeah, continue.
Speaker 5:So so it was, like, it was a lot of iteration. And one of the yeah. I grew up a car enthusiast, and so I've I've always been drawn to cars that now we would consider to be iconic. But if you look at the history of those cars, often in the beginning, they're made fun of. And so, you know, if you look at the Volkswagen Beetle as an example, that was thought of as heck, even Volkswagen called it ugly.
Speaker 5:Yeah. They leaned into it.
Speaker 2:Well, you know, on the on the other end of the spectrum, the f 40 was controversial. Yeah. Yeah. And now it's obviously, you know, a car that a lot of
Speaker 1:Yeah. Mean, a lot of supercars start out, like, kind of mocked and then we're not being gearing up or something. Yeah.
Speaker 5:Yeah. So we wanted to push push some boundaries, but we also wanted it to use really clean forms. Mhmm. And the benefit of a clean form, like, you know, like primitive shapes. Yeah.
Speaker 5:In this case, like, half circles with, you know, it's it's like a like a a stadium. It doesn't age. It doesn't you know, it's a form that has been around for ages, and so it feels very timeless. And it the way we integrated it very seamlessly, the hope was is that it would become something that's very recognizable. You see it on the road, you said it's a Rivian, and then that it could scale to different sized vehicles, different vehicle segments.
Speaker 5:So, yeah, there's still people that that don't love it, but I'd say the vast majority of people who have been around it start have either liked it from the beginning or as you as you just described, have grown to really like it.
Speaker 1:I wanna talk about r two. But first, I wanna ask you about r zero. Are we going bigger? I mean, if the numbers go when the numbers go up, the vehicles get smaller. What do I have to do to get something that competes with, a Cadillac Escalade ESV out of you?
Speaker 1:Because I I have a big family. I have two huge dogs, and I want the absolute monster land yacht. And I'm just my my my serious question is, like, is there something about the physics of electric vehicles where it gets harder to make something that's really, really long or huge or big? Or is it more just like that's more of a niche thing and maybe you'll get to it or the market will will get to it eventually, but not the highest priority right now.
Speaker 5:Yeah. Yeah. Well, I I love this question because we have we as a company have so many different ideas. And so you can imagine
Speaker 1:Yeah.
Speaker 5:There's, like, 50 different concepts or ideas we might have for a vehicle. We have to pick a few things to do. And so when you then look at the electrified space and you say, what's what's gonna sell at volume? For a flagship product, we started with something that was larger. But as we move into mass market, the the the the size of the market that exists for these very, very large vehicles, things that are bigger than r one is very, very small.
Speaker 5:So there's not
Speaker 8:a lot
Speaker 5:of customers. You know, it's like maybe 10,000 units a year if that And then you look at just the the biggest segment by far is a two row five passenger SUV, and I'd say there's probably, like, one highly compelling choice today under $50,000 since the Tesla Model Y. Yeah. And so it's, like, wildly underserved.
Speaker 1:Mhmm.
Speaker 5:You imagine there's 300 different choices in the in in the combustion world, and you've got, like, maybe one. Yeah. There's many choices, but there's one that's highly compelling,
Speaker 2:which How how molded, like, how how people wake up every day and they they tell themselves they're buying the car that that they want. But in reality, there's like a regulatory environment that that forces manufacturers to make certain decisions and trade and and push different vehicles. With the new with don't
Speaker 1:want seat belts in your car. Right?
Speaker 2:No. In inside joke. The, but but with the new with, CAFE regulations going away, people are talking about America being flooded with these mini trucks.
Speaker 1:K trucks.
Speaker 2:I'm not I'm not convinced that that there's actually that many buyers of of those vehicles in The US. Maybe maybe there is, maybe there isn't. But how much do you feel like the popularity of different vehicles is really just downstream of choices that manufacturers have had to make because of for various regulatory reasons?
Speaker 5:Boy, we have this discussion all the time. I mean, the the causality of demand is interesting because it's you don't have an infinite set of choices. So therefore, demand starts to look like what supply looks like. And we we see this we we believe this is gonna happen with r two where there's very few choices in I'll take let let's talk about it in detail. So Tesla launch model y, very, very successful.
Speaker 5:It's a it's a nontraditional form factor in terms of a midsize SUV. It's more it's very car like. Yeah. That has its advantages, but you've found a lot of people that are coming out of more traditional SUV form factors into that, but they don't have another choice. And so what we saw happen is a bunch of other manufacturers create their own version of a Tesla Model y.
Speaker 5:So the form factor is very similar to a Model y. You know, if you look at the side view of it and draw a line over the profile of it, it looks you know, it's it's a model y. It's like Yeah. You know, different OEMs versions of that, which was actually the wrong conclusion to draw because you didn't provide customers with better diversity of choice, but rather you gave them a less good version of a Tesla model y. If you want a model y, buy the model y, not some other company's version of it.
Speaker 5:Yeah. And so we were very clear on the need to have a a very different point of view and not fall into that trap of thinking everyone is gonna want that exact vehicle form factor and profile package. Mhmm. And so I think that that happens all the time in automotive, and and it's sort of shocking. But if you were to think about take, like, the sedan space, You have the BMW three series, the Mercedes c class, the Audi a four.
Speaker 1:Mhmm.
Speaker 5:They're all, like, dimensionally very, very similar. And then you have, you know, the BMW five series and the Mercedes e class and the Audi a six. And so you have, like, these interesting segments that are, like, very much because of this, like, hard to trace causality, you just have a lot of people building very similar things with different fronts, different rears, maybe slightly different surfacing.
Speaker 1:Mhmm.
Speaker 5:But the specs of the vehicle are are highly aligned. And so I think there is an opportunity with electrification to reset some of those expectations and to reset segments, sizes, performance characteristics, some of the attributes. One of the things we worked on really hard in r two was the rear seat, like, comfort or space is completely unlike anything else in a segment, so it's a lot of space.
Speaker 1:Yeah.
Speaker 5:But and then you look at all the cars in space, and they're all, like, within 15 to 25 millimeters of each other for rear seat legroom. And you're like, why is why are there 30 cars that have almost identical rear seat configurations? And it's
Speaker 2:Well, yeah, when the when the team sees something like that, are are they like, are we missing some sort of, like, regulation that like, requires? Like, do you ever and then and then you're kind of trying to figure out, wait. Do we actually have flexibile you know? I I always you you end up wondering, like, are are we missing something? And then you realize.
Speaker 5:Well, the the mechanical nature of a car is means that everybody can buy everybody's products.
Speaker 1:Mhmm.
Speaker 5:So every company like, Rivians are owned by every car company, and they take them apart, and they own all the other, you know, all the other things they're competing And so as a result, a lot of, like, the mechanical innovations, let's say, welding techniques or casting techniques, they they sort of very quickly become state of the art. But the the downside of that ability to buy each of those products and so easily observe them is you do have this funneling towards, like, consensus around different segments. And so we we we sort of lose some of the uniqueness between the different vehicles. And see, know, like, for car enthusiasts, you find a lot a lot of times car enthusiasts will say, oh, cars, they all look the same. They all feel the same.
Speaker 1:Yeah.
Speaker 5:And so we we try hard to change that, but there are certain expectations. I'll give you a really good example. On our r one t, we did a ton of research, and we looked at what people put into the bed of the vehicle. And if you're using it for lifestyle, you wanna be able to fit it in your garage. And if you're putting anything anything other than a motorcycle, which in which case you'd or dirt bike where you'd have the tailgate down, the bed length doesn't need to be longer than four and a half feet.
Speaker 5:Just doesn't. There's nothing that goes in that requires unless you're doing, like, construction and you need to put some. And so we made the bed shorter with this articulating tailgate that goosenecks out. So it gives you it's actually longer with the tailgate down, so it fits a really long motorcycle. But when it's up, it it everything fits in the, you know, it fits in the garage more easily.
Speaker 5:And so we we look at most if you drive through a neighborhood, you know how you know who has a truck in your neighborhood? It's because it's parked in the driveway. Most trucks don't in the garage. Yep. And so we wanted to fit in 95% of the garage in United States.
Speaker 5:We went through all this thought process. We built it, and the standard size is five foot. And the amount of times I've been asked, why don't you make the bed five feet long? Well, I said, well, of course, we could have. It was just a decision.
Speaker 5:We made the decision. We wanted the truck to more easily fit in a garage. So those are like, you sort of sometimes if you break the mold of, like, what's expected for Dimensions because customers, media, car journalists are so trained on a certain size Sure. The battle may not be worth it.
Speaker 1:Yeah. And also there's, like, there there's the decision to purchase a car, and you might just be looking at specs, and you're like, five is better than four and a half. But then you're live you live with a car for four years and you're like, oh, well, this is actually way better. I never needed that extra half foot. Yes.
Speaker 1:Yeah. Fascinating.
Speaker 2:What where do you think Chinese EVs are overhyped or underhyped?
Speaker 1:Give us no. Give us a white pill.
Speaker 2:Overhyped. I want the white Shit. So recently, there's been a lot of excitement around them. And fortunately, we're not letting them flood our country
Speaker 1:Yeah.
Speaker 2:With them. But we had a guest on the show recently that had said he was in China a few weeks ago and and he there was one of the I I forget which manufacturer, but one of them were just like caught, like, side of the road burning on on fire. He felt like they were potentially overhyped because they do have some features that are kind of scroll stoppings. I'm thinking of the one that can jump
Speaker 1:The Yongwang U nine,
Speaker 6:I think.
Speaker 2:Yeah. But but, you know, given that given that every manufacturer is free to assemble I mean, disassemble any other vehicle and and learn from it, What do you think American manufacturers can learn from what they're doing? Yeah.
Speaker 5:I do think it's important to sort of pull the pull the curtain back on what sometimes I think gets presented as if it's magic, particularly on cost. So I think there's two things to take away from the Chinese electric vehicle space. First, there's over a 100 different brands and manufacturers in China, and there's only a small fraction of those that I would consider to be in the category what I'm gonna talk about, leading in technology and having really robust architectures. But the two things with that said is so if you if you say there's more than five, less than 10 manufacturers that fall into the categories I'm about to describe, You have an interesting phenomena where a lot of these newer companies in China, for the same reasons that Rivian or Tesla have very different software architectures, electronics architectures, and incumbent OEMs, is they started with a clean
Speaker 1:sheet. Mhmm.
Speaker 5:And when you start with a clean sheet, you would very quickly arrive at a completely different technology topology than what evolved into cars over the last fifty or sixty years.
Speaker 1:Yeah.
Speaker 5:And what I mean by that is prior to, like, '19 early nineteen sixties, cars were a 100% analog. So there are no computers in a car. And the first computer to make its way into a car was ironically, it was for the fuel injection system. And so for any of the car enthusiasts out there, this is like those original, like, Bosch, K Tronic fuel injection systems that we started to see emerge nineteen sixties and early seventies. And car companies at the time said, boy, we're we build engines.
Speaker 5:We design vehicle bodies. We assemble the cars. We don't need to make these little electronic modules. And so they pushed that work to suppliers. Companies like Bosch or Continental would make these little computers that run the fuel injection system.
Speaker 5:Then subsequent to that over the currents of the last fifty years, a bunch of other things started to have a need for computers. And your seat suddenly became smart, and there was a computer that went with the seat. Your eight your air conditioning became intelligent. There was a computer that went with that. Your sunroof had a computer.
Speaker 5:And before you knew it, the vehicle architecture was this proliferation of, you know, in some cars, a 100 to a 150 little mini, what we call electronic control units or computers that run these specific domains, like the domain of an engine or the domain of a door or the domain of a seat. And it's precisely the opposite of what you'd architect if you're thinking about it as a clean sheet. You would never say, I'm gonna build a network architecture and software platform that is a 150 different software code bases running 150 different little mini computers, which communicate through this sort of klutzy can architecture.
Speaker 2:That might all be need to be independently updated at various points in the car's life cycle.
Speaker 5:Wires. It's just like it's a total disaster. So what you'd say is I'd have as few computers as possible doing as much as they can. Yeah. And so, you know, the the fancy way we describe that now is it's a zonal architecture.
Speaker 5:It's a computer that controls a whole zone. And so TESS, of course, developed their architecture like that. We, of course, developed our architecture like that, and a couple of the Chinese did as well. And this the the real benefit of this, besides just taking a lot of cost and complexity out, is that you can make updates really easily. And so if I wanna change, let's say, the sequence events that occur when you unlock the car, I don't have to coordinate amongst 15 different suppliers, the supplier for the horn ECU, the supplier for the door lock ECU, the supplier for the, you know, the interior lighting ECU.
Speaker 5:I can do all of that in, like, a matter of minutes internally because it's running on our own software platform, and it's all of our own code. And so just the the the emergence of regular updates, improved features, features that respond to dynamic customer needs, I think, is a really big shift. And in the West, there's two companies that have that, Rivian and Tesla. And then in China, there's, as I said, more than five less than 10 companies that have
Speaker 1:that. Mhmm.
Speaker 5:And if you don't do a software defined architecture well, the ability to do, like, AI integrated into the vehicle or an AI defined vehicle is enormously hard. So you have to have all these ingredients to be able to do, like, the broader architecture well. Anyway, so that's one big difference, and that actually underpins we did a $5,800,000,000 software licensing deal with Volkswagen. That that technology I just described for network architecture, software OS is what we license as part of a big partnership with Volkswagen Group. But the other is that the Chinese companies have just fundamentally lower cost structure.
Speaker 5:They have much lower labor costs. Their cost of capital's often free or more than free, meaning they get paid to build a plant or they get enormous government subsidies. And so you can just build a spreadsheet to look at this. It's not it's not magic. They're building the cars.
Speaker 5:You know, they're not using some new type of material from outer space. It's it's using very, you know, consistent materials what we use in The United States. You consistent joining and forming techniques, and putting the cars together are very similar. They just have labor costs and capital costs are much, much lower than United States.
Speaker 1:Mhmm. If you had to pick a gimmick that you do like, what's your favorite gimmick? Because the jumping the jumping car is a pretty good one. I showed that to my four year old, and he was like, I need I need
Speaker 2:the car. I don't think it's good unless unless they're jumping a human.
Speaker 1:Oh. They gotta give me a
Speaker 2:demo where they jump a human otherwise. Otherwise, it's just a cheap trick. Yeah. I don't need to jump I don't need to jump a paper clip.
Speaker 1:Okay. Yeah. Or a pothole. Hey. You do need to jump a pothole.
Speaker 1:You gotta
Speaker 6:you gotta fly I a
Speaker 2:did blow out of time. You blew
Speaker 1:out of time. Anyway, favorite gimmick if it like, if you had to pick
Speaker 5:one, what You what you
Speaker 1:know, there's like a there's a tank turn. There's, you know, a whole bunch of these different gimmicks. Is there are there any gimmicks that you think are fun? Or maybe retro gimmick.
Speaker 5:Yeah. I don't know. I mean, they're just fun to watch. I don't know if I I we haven't again, we haven't decided to put any of them in there.
Speaker 1:They're Yeah.
Speaker 5:They're but into vehicles. We we do have something called kick steer in our vehicles, which when you're operating because we have a quad motor, you can turn the vehicle on its axis.
Speaker 1:That's good.
Speaker 5:And it's a it's sort of cool.
Speaker 1:But Yeah. I mean, even if there's a gear tunnel to some to some degree, like, stood out. It was like like, the gear tunnel, when that launched, that was definitely like a like a, oh, wait. Like, this is different than normal. This is not something I see.
Speaker 1:And I feel like there there there's a balance. Like, you don't wanna be all all gimmick all the time, but, you need a little bit of style and a little bit of substance. You need some some
Speaker 2:We gotta we gotta talk about, we we needed a clearly needed an hour, ninety minutes I know. I know.
Speaker 1:I don't know you have parts
Speaker 2:We gotta talk about, some of your guys' new releases Yeah. The chip, and some of the new technical decisions that you guys are making around self driving.
Speaker 5:Sure. Yeah. Sure. Yeah. So last week, we actually finally announced it.
Speaker 5:Amazingly, it didn't leak. We've been working on this since 2020 early twenty twenty two. Mhmm. But we we've rearchitected our whole self driving platform around what we call an end to end train model. So the model is using the millions and millions of miles are being accumulated through our deployed fleet of our gen two vehicles, which launched a little more than a year ago to build effectively a neural net or a foundation model for how to drive.
Speaker 5:Mhmm. And on our gen two hardware stack, it's it's it's using an NVIDIA platform. It's got around 200 tops of compute. We've got 55 megapixels of cameras, nice array of radars, but it's a great platform for for building a data flywheel and for delivering, ultimately, this will be able to deliver point to point,
Speaker 1:you
Speaker 5:know, autonomy. So you can put the address in the vehicle drive there. But to get to higher levels of autonomy, we've developed an in house processor. Well, look at the timing. You guys did that perfectly.
Speaker 5:But the in house processor is a it's a significant step up. So it's a 800 tops. Mhmm. It's got 35,000,000,000 transistors on the silicon. The neural net's capable of processing 5,000,000,000 pixels per second.
Speaker 5:So this is, like, an incredibly powerful platform.
Speaker 1:Yeah.
Speaker 5:And we brought it in house just to given the importance of vision this is a vision based robot. Yeah. The the vehicle. We have other things we're doing in the vision based robotic space as well. And so we came to the view that having our own inference was gonna be really valuable.
Speaker 5:Yeah. But it, you know, it took it took, you know, the better part of almost four years to build the team, develop it. You know, these are things that take a tremendous amount of capital. We're working with TSMC on making it. But, yes, we're excited about that.
Speaker 5:And then we also include upgraded cameras, and we have a new light arm, which is another sensing modality that sits at the top of the windshield, which will help us raise the the capability of vehicle ultimately to what we call level four, which is think of it as the vehicle can operate empty or without anybody in the driver's seat. So it could, like, pick your kids up from school or Yeah. You know, drop you at the airport, these kinds of things.
Speaker 1:Is LIDAR dangerous? I was telling Jordy that there was a LIDAR system that if you pointed your phone at it, it would damage the phone. And, of course, you know, he said, well, if it's damaging the phone, can't be good for your eyes. How do you tell customers that, okay, our LiDAR is safe? Like, what are the what are the parameters to optimize around?
Speaker 5:Yeah. I mean, that that was just, that was a poorly designed LiDAR system that was doing that. This our LiDAR is yep. They don't burn out your phones. They certainly don't burn out your eyes.
Speaker 5:Yeah. Okay. As you're boy, this is great. You're showing the image here. So and the beauty of something on LiDAR is we can use the LiDAR and the radar array to help train our cameras because, again, this is a let's just think of this as we're building a brain.
Speaker 5:We're building a neural net
Speaker 1:on
Speaker 5:driving the vehicle. And it has the ability to see very, very far distances much further than the human eye or camera could see, but also see in perfectly dark conditions or perfectly bright conditions.
Speaker 2:So And and it imagine it helps with weather, like extreme weather as well.
Speaker 5:Yeah. Well, the the radar does particularly well where you have Fog. Optical occlusion. Yeah.
Speaker 6:Like Yeah.
Speaker 5:Heavy fog or heavy rain or snow.
Speaker 9:Sure.
Speaker 5:And then the LiDAR does need line of sight because it is a laser. So the LiDAR is very helpful for training the cameras and and training them the radar system.
Speaker 1:Yeah.
Speaker 5:But it's but it's also very helpful for long range.
Speaker 1:Is so, I mean, it seems like you've solved the inference problem. Like, you're like, the vehicle is ready to rock. Are you worried about, or is it is it a challenge to, like, accumulate enough data? Are you getting enough data off the current fleet that you feel like you're competitive there? Are you GPU rich or GPU poor in the in the training phase?
Speaker 1:Are there or or is it is it about the algorithms? Like, do you need more AI researchers? Like, what is the most what what is the rate limiting factor to actually delivering, like, something really top notch?
Speaker 5:Yeah. So so, I mean, the first is building this when you say data flywheel
Speaker 1:Yeah.
Speaker 5:Every vehicle that we every gen two. So we launched in 2021, and that was what we call our gen one vehicle.
Speaker 1:Yeah.
Speaker 5:In the 2024, we updated it with a complete new set of hardware under the skin, but really most importantly, the self driving platform. And that that's the beginning of this data accumulation platform. And what this is being used for is there's a whole host of trigger events that we identify interesting or or important information from the vehicles that are driving Yep. That gets sent back up to the cloud, and then we process them, as you said, on a large, you know, a dark large pool of of GPUs.
Speaker 1:Yeah.
Speaker 5:And, yeah, this is you know, we're talking, like, many thousands of GPUs. Yep. You know, enormous amount of investment in GPU spend here. But but, ultimately, that's being used to train the model. And so we create this very large model that runs offline, and then we distill it into something that's a little bit tighter Mhmm.
Speaker 5:And smaller that runs real time in the vehicle on inference. And the beauty of expanding the inference capability with our Gen three platform is it allows us to run bigger models. And so as the the model becomes larger and larger, I understand all the nuances and sort of intricacies of driving, the need to compress that to run real time. You know, I should say the ceiling of what it can run, and therefore, the need to compress it is reduced. We don't have to compress it as much.
Speaker 1:Sure. Sure. Yeah. That makes sense.
Speaker 5:So but this is this is by far our biggest investment category. It's been interesting because we've when we first launched, a lot of the investment was going into, like, the fundamentals of the business of ECUs based software, high voltage architectures, things like DC DC converters, all this stuff to make the car real. Yeah. Now those platforms are pretty stable, and we're now shifting. A lot of those r and d dollars are going really almost, you know, entirely towards AI and our self driving platform.
Speaker 2:Yeah. You saw Luminar went bankrupt today. Crazy. What what do you think happens with that asset, with their technology from here? Do do you think there's do you think there's an I I imagine there's a number I can imagine a number of different types of businesses that would be interested in in the technology and what they've built.
Speaker 2:But what's what's your read?
Speaker 5:Yeah. It's hard for me to comment. I I it's it's not something we're looking at, but, you know, I can't I can't comment on others.
Speaker 1:It Yeah.
Speaker 5:Yeah. There may be folks out there looking to buy it out of bankruptcy. I don't know.
Speaker 2:Yeah. We'll see. Convertibles.
Speaker 5:Are we you're selling my dad. My dad really wants a convertible.
Speaker 1:Are we doing it? No. I mean, correct me if I'm wrong. The number one best selling convertible in The United States, Jeep Wrangler.
Speaker 5:Yeah. Jeep Wrangler is very popular.
Speaker 1:Is it possible? Don't we do it? Why don't you do it?
Speaker 5:So it's so funny you ask this because we I I I don't think I've ever said this before. Why not say it here? We on r one, we had a version of the roof that was removable early on. And we actually tooled it, we decided not to launch it because it was just a lot of complexity.
Speaker 1:Yeah.
Speaker 5:But in the fullness of time, at some point in Rivian's life, I'd love to have a version that has a top come off. If nothing else, just so that my dad will be satisfied.
Speaker 1:Amazing. And
Speaker 2:I'll I'll buy I'll buy I'll buy one too. I'll buy one too. Confirmed.
Speaker 5:I get
Speaker 1:with that too. Within the long arc of history, we are we are launching a convertible. No. Thank you so much for coming on show.
Speaker 2:I'm excited to see like how you guys would approach the removable top.
Speaker 1:I think it would be very
Speaker 2:interesting. Very I I don't like a lot of convertible designs Yeah. Specifically but I You really if are. You guys were thinking about it and saying like, well, what's the actual Yeah. Technology we have today?
Speaker 2:What's the best way to make it? So anyways, this was a super fun conversation. And please come on again soon. Yeah. We'll definitely reach out and and have your team reach out as well if if whenever you have news.
Speaker 1:Yeah. Thanks so much for helping on. This is a lot of fun. We'll talk to you soon. Awesome.
Speaker 2:Cheers, RJ.
Speaker 1:Have a one. Yep. Goodbye. Let me tell you about ProFound. Get your brand mentioned in ChatGPT Sound around.
Speaker 1:Reached millions of consumers who use prod who use AI to discover new products and brands. Let me also tell you about this post from Nihilism Disrespecter who says, so is The US economic plan really just build the machine god? Tyler, what do you think? Is The US's current economic
Speaker 2:Shock meme.
Speaker 1:Plan Yeah. Really just build the machine god? Yes. I I would agree. I think it is.
Speaker 1:I think that that is basically the plan.
Speaker 6:We need to nationalize the labs.
Speaker 2:Nationalize the labs
Speaker 6:or not
Speaker 1:Why why are we nationalizing the labs?
Speaker 6:That's the only way we can get we can marshal the the capital soon enough. It seems easy right now. Everyone's like, oh, it's so you know, you can raise so easily. Give me That's
Speaker 2:actually three years.
Speaker 1:And you need 10,000,000,000,000.
Speaker 6:Or even the what is it?
Speaker 1:The $10,000,000,000,000 training run.
Speaker 6:Yeah. $10,000,000,000,000 wire. There's only a couple ways you can get Yeah.
Speaker 1:I don't know. I feel like there's a way that the government can can foot the bill. Well well, not fully nationalizing. Right? There's gotta be a way.
Speaker 6:Yeah. But I mean, certainly you know, maybe not nationalized. But there there's a of ways where it's like, it probably does make sense in some sense to to to Yeah. Subsidize Intel, stuff like that.
Speaker 1:React to this, the fact that Sergey Karayev Karayev says this is the annual reminder. The years left to escape the permanent underclass, it was infinity in 2020. It was infinity years to escape the permanent underclass in 2021. And for the last four years, it's been exactly two years to escape the permanent underclass. Feels like, this AI thing isn't isn't actually creating a permanent underclass like it was supposed to.
Speaker 6:Just two more years, bro. Then different. Yeah.
Speaker 1:Just two more years. Anyway, let me tell you about Turbo Puffer. Serverless vector in full text search built from first principles on object storage, fast, 10 x cheaper, and extremely scalable.
Speaker 6:Okay. So, John, actually, I had a question. Please. So so I'm always curious, like, it seems like in self driving
Speaker 1:Yeah.
Speaker 6:There's, like, Tesla and then there's Kama. Yeah. And I think of those as kind of the leaders. Right? Yes.
Speaker 6:But, you know, Kama, there's, like, the open source. There's OpenPilot.
Speaker 1:Yes.
Speaker 6:So why it it seems like there just aren't that many manufacturers that are that are using OpenPilot. Is there, like, a are they is it, like, George Hotts? He just, hates big manufacturers, and he wants to keep it.
Speaker 1:Well, so so, I mean, I'm not exactly sure the open source license. I imagine that the open source license says, you can't resell this. Now the question is, if you bake it into a car, I would imagine most most companies like, Tesla sells self driving as an upsell. So you buy a Tesla. It doesn't just give you the Tesla's full self driving system for free.
Speaker 1:Have to pay an upgrade. I would imagine that Rivian matches that pricing model eventually. And so if you build on open source software that says you can reuse it, you can you can use this open source software, but you cannot sell it. I believe that isn't that the Apache license? Yeah.
Speaker 1:There's a few different licenses. MIT. One there's I think MIT license, you can do whatever you want with. But there's one license that says, you you you can use it, but you can't resell it.
Speaker 6:And Yeah. Not for commercial use.
Speaker 1:Exactly. Exactly. Yeah. Like, the license transfers down the chain. And so if you're giving it away, you have to get if they give it to you, you you have to give to your customer.
Speaker 1:So you can't monetize that way. So there there's that. There's also the possibility. Again, this is just off the top my head. But I I would imagine that the is it the NHTSA, the National Highway Transport Authority?
Speaker 1:I believe that if it's coming from an OEM, from a vehicle manufacturer, and it's making claims about this is a level two system, the level three system, you can take your eyes off the road, you can take your hands off the wheel, That probably has to go through a certification that, doesn't necessarily have to go through a certification for. So you're in this scenario where if you're effectively white labeling, maybe you don't like you're you would be subject to a higher level of regulation because you're not a third party product. So I would imagine that you still, like, take a peek at the open at the OpenPilot repo and see how they're doing it. But then ultimately, you go and build your own sort of proprietary stack.
Speaker 6:Yeah. I guess also for I mean, Rivian, they're they're using LiDAR, so it's, like, just not compatible.
Speaker 1:Yeah. Yeah. LiDAR also just, like, way more cameras too. Like, the the OpenPilot system is built on two cameras on the on the front of the device and then one on the on the back that looks at the the driver's face. And so you have a wide angle and then sort of a telephoto that will show you the road far away and then the full surroundings.
Speaker 1:But most cars, Tesla, I'm sure the Rivian, will typically have cameras on both side mirrors. They'll also have cameras on the back, cameras, the multiple on the front. So you just get way more data. And that's why I think he was pushing this concept of, like, we're like, the the autonomy compute module three, ACM three, is capable of processing 5,000,000,000 pixels per second. It's like, why do you need so many pixels?
Speaker 1:Because you have multiple cameras that are feeding you 30 frames a second, 60 frames a second, and so you need to be processing all of that. Whereas Open Pilot is not designed for a camera that's mounted on the bumper because it doesn't have a wire that goes to the bumper. It's just a phone that's stuck to the windshield effectively.
Speaker 2:One more note. I believe Rivian uses Luminar as a supplier.
Speaker 1:Oh, interesting.
Speaker 2:And so hence why he
Speaker 1:couldn't comment but said he wasn't looking at buying. Yeah. Which is crazy. Which is
Speaker 2:but I mean, they supply He
Speaker 1:might be using a different one. Good Vault going forward.
Speaker 2:Who knows? But they just made that announcement. So Mhmm. Essentially. But I'm but I'm sure they have a variety of vendors that they're speaking with.
Speaker 2:But Interesting.
Speaker 1:Oh, well. Well, let me tell you about graphite. Dev. Code review for the age of AI. Graphite helps teams on GitHub ship higher quality software faster.
Speaker 1:How did you sleep last night? Did you are you are you back in the game fully? Holiday season is upon us.
Speaker 2:I slept.
Speaker 1:Holiday parties are here.
Speaker 2:Brutal.
Speaker 1:I got a 93 though.
Speaker 5:Saturday.
Speaker 1:Caught up. Saturday was rough. The the holiday party came came through. I made it out with a 69. Not good.
Speaker 1:Avoid them. Avoid the VC holiday party entirely. If you care about your sleep, go to aidsleep.com. It's exceptional sleep without exception.
Speaker 2:I got a 54.
Speaker 1:54 on the night of the VC holiday party? Rough.
Speaker 2:Absolutely. Brutal.
Speaker 1:Fall asleep faster, sleep deeper, wake up energized at 8sleep.com. Well, we have our next guest in the restroom waiting room, Scott Kapoor. Ho ho. Merry Christmas, Scott. How are you doing?
Speaker 1:Great to see you again. Thanks so much for hopping back on
Speaker 9:the show. I I did not wear my elf outfit for today, but No.
Speaker 1:We we were we were this just to do a little inside baseball, we were this close to putting on full Santa suits. And then Wow. The team said, you know, we're we're we're talking to a, you know, US government official. You guys I was
Speaker 9:gonna say, I thought I I was being aggressive. I went Sam's jacket today. I'm like, I took my
Speaker 2:Very very casual. Very casual, but you're a serious You're a serious guy. So Yeah.
Speaker 1:Yeah. So you're so so you're bridging the gap. But, anyway, give us, give us an update on what's new in your world.
Speaker 9:Yeah. So we just announced a a really exciting new program today that I'd love to tell you and your listeners about.
Speaker 3:Of course.
Speaker 9:It is called US Techforce.
Speaker 1:Yes.
Speaker 9:So this is is
Speaker 1:whoo. Alright. This is
Speaker 9:a two two two year program where we are recruiting a thousand engineers, product managers, data scientists, AI specialists into government. You'll work in government for two years. Literally, every agency in the government basically is participating in this. So if you wanna work at Department of War or health and human services or state department or IRS, whatever you wanna do, like, we've got opportunities. And the whole idea is how do we modernize the entire, you know, federal government infrastructure?
Speaker 9:So we've got a real challenge in government. Number one is just, obviously, we need more smart people who've got, like, modern software development, modern AI expertise. And then we're also really have not done a good job of recruiting early career people. So, if you look at kind of people earlier in their career, only about 7% of the federal workforce is early career. Mhmm.
Speaker 9:And at all of the companies all the companies that you guys, you know, talk to on a daily basis, I bet you that number is, like, 25 or 30%. So we are by at least a factor of three to one in a real world of hurt in terms of being able to recruit and retain, early career people. So this is a two year program. We're doing this in partnership with about 25 of the tech companies that you all know and love. So, you know, Coinbase, Robinhood Mhmm.
Speaker 9:Databricks, Snowflake, NVIDIA, x AI, OpenAI. And what those companies are doing is they're gonna help us kinda create a program around this. So in addition to working in your day job in government, we will have a speaker series, with you know, we'll get Sam Altman to come, you know, talk to you and tell you about what it's like to work at, OpenAI. We're gonna do career development. And then at the end of the two years, these private companies have all agreed to kind of participate in a job fair where we're gonna showcase all the work that these guys are done.
Speaker 9:And you know what? If you wanna go in the private sector, god bless you. Go do that. If you wanna stay in government, we'll find a job for you, but we're not asking you to make a forty year commitment. We're asking people to do, you know, do good for their country for two years, solve some of the world's biggest and toughest problems.
Speaker 9:Mhmm. And then, we will gladly help you in terms of your private sector career opportunities.
Speaker 2:A thousand people, how, assuming this goes well, it feels, you know, extremely critical in this moment. Is this something you wanna, like, 10 x, you know, for the next, two year period? Where where does this go?
Speaker 9:Yeah. No. You're absolutely right. So I think there's two big opportunities here. One is just look.
Speaker 9:There's way more demand than, for a thousand engineers and government. So, yes, if this is 5,000, 10,000, I think we'll still be barely scratching the surface of what the needs are. And then more importantly, what we're trying to do is we're trying to do a more efficient way of hiring by centralizing a lot of the hiring. So at at my department, OPM, we're gonna do all the outbound recruitment. We're gonna do all the initial screening.
Speaker 9:We're gonna do all the initial assessments for people. And then we're gonna hand the agencies a list of, you know, here's a thousand people who have passed, the technical qualifications you told us were necessary for the job. Now you all, quite frankly, compete against one another and convince these people why they should work at HHS versus Department of War or others. And if this works, I think this is gonna be a model for how we do do kind of centralized hiring going forward in the government. So we hire a ton of program managers, HR people, financial analysts.
Speaker 9:Like, there's no reason why an applicant should have to know that 40 different agencies are hiring for a program manager. All that person should need to know is, like, my skills are in demand by the US government. I'm gonna centrally apply to this, to OPM, and then my resume is gonna basically get circulated to all the interested agencies. And then, you know, I basically kind of have my pick of the litter of figuring out which one is best aligned with my career objectives.
Speaker 1:Okay. Walk me through how how someone in one of these roles in part of the tech force could actually have an impact. I I worked at the Census Bureau maybe fifteen years ago. And and I would I I would have been like a tech force person. Like, I came in and they gave me a, like a stack of papers and a pencil.
Speaker 1:Yes. And they were like, we do stuff on pen and paper here. I was
Speaker 2:like clear, John worked his way to managing Yeah. A team of like, a 100 people very quickly as a college student.
Speaker 1:Was a it was a very funny story.
Speaker 2:He made the most of it.
Speaker 1:But but but we but our job was to go around on a map and and and interview people in different houses. I was like, we should use Google Maps. Google we just put all of the put all the addresses that you need to go to into Google Maps, and then you know exactly where you need to go that day. And, of course, they were like, no. No.
Speaker 1:No. We don't have a deal. Right?
Speaker 9:That's heresy, my child.
Speaker 1:Exactly. Exactly. So, like, I didn't necessarily have the authority to just tell the entire, you know, organization as a we're using Google now. Also, there's probably some sort of privacy thing. There's a whole bunch of reasons why, know, you can't just fire it up.
Speaker 1:But how how do you how are how do you empower, like, the tech force folks to actually have, like, a positive impact that, like, reverberates throughout the organization.
Speaker 9:Yeah. So you are a 100% right, and this is why a lot of these programs traditionally have not accomplished what we'd hoped they'd accomplished. Because what happens is someone like you, a smart guy let's assume that for a second. Right? A smart guy a smart guy gets rocked into the blob that is the US government, basically.
Speaker 9:Right? So you're right. Like, you will just you basically have no authority. You have no ability to get things done. So what we're doing here is there's two critical differences we're doing here.
Speaker 9:Number one is if you are one of these thousand folks, you are gonna go over as a team to an agency. So Mhmm. I can just I'll give you an example. You know, for example, at IRS, you know, they probably could hire several 100 of these people. Mhmm.
Speaker 9:I don't know. You know? So there are gonna be several 100 people who will be part of this team. So number one, you're gonna be part of that group. Number two, as I mentioned, we're gonna create a programmatic piece around this.
Speaker 9:So your buddies who are at HHS or your buddies who are at state department, you're gonna see them, you know, once a month, twice a month at a speaker series, at dinners, and stuff like that. So you're gonna get real good networking across pollinization. Mhmm. And then thirdly, to avoid the problem you're talking about is we're not gonna drop you into the blob. We're basically gonna have you as a full unit as basically reporting into kind of, you know, senior political leadership in those organizations.
Speaker 9:And they're gonna decide what you do. So you're not gonna come in here and, like, manage a contractor, which is unfortunately, you know, a lot of what does happen inside these organizations. But we're gonna create basically a separate team that can do a lot of the bespoke development that has cover from the most senior political people in the organization. So you're totally right, and your experience is not unusual, by the way. That's that's a lot of what I've heard from people as we try to figure out what to do.
Speaker 9:And so our hope is that by a combination of those things, we can avoid that problem. Because look. For this to work, like, what I'm trying to test is two things. One is, like, you know, can we actually solve the modernization problem in government, which I'm quite convinced with smart people we can. And then two is we demonstrate that the work you do here is valuable not just to the government, but valuable to the private sector such that if you wanna go get a private sector job, private the sector looks at what you did and says, wow.
Speaker 9:Like, those skills are generalizable, to whatever Google, Facebook, you know, Coinbase, you name your favorite company. Mhmm. And so we've gotta make sure that the people here are successful.
Speaker 2:What do you what do you think are the most overlooked agencies, interesting kind of corners of the government that are gonna be hiring through tech force? I think we've I I think the guy from Gumroad, I saw him at the IRS. Yeah. We've seen Doge people over at the treasury. Yeah.
Speaker 2:But but what are some kind of overlooked opportunities?
Speaker 9:Yeah. So there's real I mean, so, like, there are really good people, quite frankly, across the board. But yes. Look. The obvious ones, of course, are department of war.
Speaker 9:You know, it's really cool to do drone stuff, and that's awesome and some people wanna do that. But, you know, like, interior is doing a bunch of actually very cool stuff. Energy. So if you're interested in energy, you know, they're doing a bunch of, like, supercomputer like stuff to basically, you know, make sure that they can have, you know, like, quantum computing work and stuff like that. They've gotta solve, like, the broad energy good problems.
Speaker 9:That's pretty cool. You know, CMS so doctor Oz over at CMS is trying to redesign kind of how consumers interact with CMS. So, you know, something like, for example, an integrated position directory, which I know sounds like very commonplace these days, but, like, that doesn't exist. So there's kind of a combination of what I would call, like, back end infrastructure stuff. And then the other part of this that's gonna be really cool is, you know, my friend of yours, I think you guys know Joe Jebbia, who's one of the cofounders of Airbnb Yeah.
Speaker 9:Who's been sitting literally just behind me in the office here at OPM helping us redesign our retirement services application. He's now starting this whole thing called, design for America, right, which is basically this very broad, like, you know, design oriented relook at all the applications that are customer facing in government. So you can think of this also as an opportunity to take the work he's doing on the front end coupled with a lot of the modernization stuff that has to happen on the back end. And, you know, collectively, I think we can really transform kind of the way government sources are delivered and, you know, quite frankly, provide a much better service to the American people.
Speaker 2:Fantastic. Very, very cool.
Speaker 1:Where can people go to get started? Is there just a a web form to apply?
Speaker 9:Yes. There is. Okay. Yes. It turns out we have a web form.
Speaker 1:Here we go. You
Speaker 9:you can go
Speaker 1:Joe Gevia. By Joe himself.
Speaker 2:By Gevia?
Speaker 9:Exactly. Actually, Joe Gebia.
Speaker 1:That's exactly. There we go.
Speaker 9:By the way, it's I've just learned it's it's Gebia, not Gebia. So unless he's pull unless he's pulling a fast one on me, we we all direct our pronunciation.
Speaker 1:Yeah. Joe Gebia.
Speaker 9:Joejebia. You go to tech force. You can go to either at US tech force, which is our x handle, or you can go to techforce.gov. Cool. Or you can go to my Twitter at s k u p o r.
Speaker 9:All those places will point you to the right one. Apply. Tell your friends. Tell your family. This will be a great, like, a dinner conversation over the Christmas table to say that, you know, you're now coming out of the closet, in terms of working in the basement, and you're ready to ready to kind of, get a real job.
Speaker 2:I love it. I'm very I'm very excited about this. I mean, I I can see I'm I'm excited for people, like, all over the career kind of spectrum, people that have done twenty years in in industry and see an opportunity to come back and serve the country in this way. And in the future, young people coming out of college that are highly motivated, have a skill set, and can apply it across all these different touch points. So very exciting.
Speaker 1:Well, thank you so much. Yeah.
Speaker 9:Have a great holiday season.
Speaker 2:Yeah. Great to get the update. Cheers. To you soon.
Speaker 1:Goodbye. Let me tell you about getbezel.com. Shop over 26,500 luxury watches. Fully authenticated in house by Bezel's team of experts. And let me also tell you about wander.com.
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Speaker 2:Hit me.
Speaker 1:A billboard. Adquick.com. Out of home advertising, make easy and measurable. Plan, buy, measure out of home.
Speaker 3:Get your
Speaker 2:put a billboard under the Christmas tree or at least a credit for a billboard.
Speaker 1:Yes. Absolutely. Well, we have our next guests, Colin and Samir from of course the Colin and Samir show. Living legends. To the show.
Speaker 1:They're gonna come and sit down here. Good to see you guys. Welcome. Welcome. We are live.
Speaker 8:Are you?
Speaker 1:Good to see you in the UltraDome. Good to see you, Steve. How you doing?
Speaker 2:Great to have you guys in person.
Speaker 1:Yeah. Oh, man. Finally.
Speaker 3:Can I raise this? Because the everyone just became very aware of my height when you shook my hand. That's that's
Speaker 2:how do I John's a tall person here.
Speaker 1:I have the worst brain. I said height.
Speaker 3:I look like I'm under the desk right now. How do
Speaker 1:I raise this?
Speaker 4:Do you lean back?
Speaker 1:Stay off the line.
Speaker 2:Stay up there. On the tight.
Speaker 1:Stay on Stay on the the tight. Tight.
Speaker 3:You read my rider.
Speaker 1:Yeah. God. I know. I know. But we're gonna we're gonna for a while, that wide was a 15 millimeter or
Speaker 2:something, and it
Speaker 1:looked insane. I looked way bigger than the guys. Now it's, like, evening out.
Speaker 4:What an incredible holiday vibe here.
Speaker 2:Look signed at
Speaker 1:We signed got holiday Little ghost.
Speaker 2:Wow. That's going straight to the top. Straight to the top.
Speaker 1:We were very very close to being in full Santa suits. I week.
Speaker 6:You can see
Speaker 1:our He's in
Speaker 4:it. Course. He's in it.
Speaker 1:Yeah. I I He's with the bells. I think we will be with the bells on the chair. I do think we will be doing the the Santa outfits
Speaker 2:Yeah. Tomorrow. This is maybe the last time we wear suits this year.
Speaker 1:Maybe. Maybe. Maybe. Rest Anyway, it's been it's been a wild year for us. It's been a wild year for you.
Speaker 1:What what have been the standout moments for you this year as you look back on it as as two creators?
Speaker 3:I actually think we're in a standout moment right now in everything that's happening with Netflix and and Warner. And, like, the conversation around that, I actually think has a lot to do with with YouTube creators and what has happened with YouTube. Okay. And I think between that and then what we just saw with Disney and and Sora, I think these are two topics that we it's worth getting into Interesting. Giving our perspective
Speaker 2:as creators of what's Yeah. It's I feel like the notable thing is in all the antitrust debate and conversation, everyone's like, look, look at YouTube. YouTube's watch still time.
Speaker 1:Mhmm. Right. You get
Speaker 2:all that watch time.
Speaker 1:Do you buy that? Do you buy the YouTube like like, because there is a narrative in Hollywood that Warner Brothers and Netflix are too powerful together. It's too crazy. And then a lot of people are saying, hey, YouTube's, like, running away with the whole game. This is a sideshow.
Speaker 1:Where do you stand
Speaker 3:on it? Yeah. I mean, look, Greg Greg Peter said that as a quote. Yeah. Right?
Speaker 3:That, like, even if you put these two together, it's still smaller than YouTube. Yeah. Such an interesting justification Yeah. Of why the deal should go through. Yeah.
Speaker 3:But I think the reality is, like, Neil Mohan was just named Time CEO of the year. And I think his positioning Yeah. And what YouTube has done really well, two guys who've been on the platform for fifteen years, his positioning is they build the best stage. Mhmm. Essentially, evaluate it like an open mic night for the Internet.
Speaker 3:It's just anyone can go on there and see. You literally don't know. We don't know if, like, the greatest piece of content could be uploaded today. Mhmm. YouTube has no idea.
Speaker 3:Mhmm. And I don't think you can compete with that. The fact that they don't pay for content.
Speaker 4:Yeah. The fact that people will upload with the chance of getting distribution and not even looking for the economics. The economics are there. Like, you can create content, obviously, that gets millions of views, like, are many ways to monetize. Yeah.
Speaker 4:But that's pretty dangerous in a good way
Speaker 1:Yeah.
Speaker 4:For YouTube to sit in that place where, like, someone can just there's a guy who spent two years making a documentary about bird watching
Speaker 1:Yeah.
Speaker 4:And was like, I'll just put it on YouTube for free. And it's incredible.
Speaker 1:Wait. Who is this?
Speaker 3:His name's Owen Riser. It's an amazing documentary. It's called Listers. It's it it has, like, almost 3,000,000 views now. And
Speaker 1:Yeah.
Speaker 2:He didn't
Speaker 3:know how he wanted to monetize it. He had offers from streamers, but just didn't wanna do it.
Speaker 1:Yeah.
Speaker 3:We'll put it on YouTube and put his Venmo link in the description.
Speaker 2:No way. No way. Yeah. That would work.
Speaker 3:He in the time we talked to him, was like two, three weeks after he put out the doc, he had been Venmoed $75,000.
Speaker 1:Incredible. Oh, that's amazing.
Speaker 3:Which is unbelievable. But like that that this model of just kind of like I I don't think we talk enough about the fact that you can just upload a video or what we're doing right now is just being is just live. Yeah. Right? And like, to do that twenty years ago was impossible.
Speaker 1:Yeah.
Speaker 3:And so I I think it's gonna be really challenging when you're Netflix and you're, you know, spending money on something like Stranger Things. And, like, you're you're placing a bet you're placing a bet that you think the audience will like it based on historical data or based on packaging actors and like old school Hollywood, you know, technique. Whereas YouTube's like, yeah, like, I think you'll like this. And if you don't, I'll just get data to figure out what you'll like next.
Speaker 2:Well, and I think that's why that's why Netflix and Paramount value this IP at to such an extreme degree. Because that's the one thing I feel like YouTube hasn't done is like creating really valuable IP, I think, takes decades. Like, you have to fill it up
Speaker 1:like no amount of money can just create a new Superman or a new Spider Man. And it feels like we would have gotten that out of YouTube, just the broad economic forces, or we certainly would have gotten it out of Netflix. And we have it a little bit Squid Game and certain things to your point. But it just with all the tech money, all the money, there's so much of incentive, but there's just no shortcut for, okay, this has been my my dad watched this. And I watched it with my dad.
Speaker 1:Sure. And then I watched it with my kids. And like, I'm going
Speaker 2:think YouTube IP, I think of like miss Rachel which is like Mhmm. Like I think at some point, she could trade herself out Mhmm. Have an actor, like,
Speaker 3:Dude Perfect and Good Mythical Morning. Yeah. So Rhett and Link with Good Mythical Morning, they're on 3,000 episodes right now
Speaker 1:Yeah.
Speaker 4:Of a
Speaker 3:morning show that people have grown up on. It's been around for near two decades now. Like, it's daily. Mhmm. I think there's there's a lot of value to what they've built.
Speaker 3:They've built like a big company with writers and like Mhmm. They could either someone else could take over that show or they can sell this catalog of relatively evergreen content.
Speaker 1:Yeah.
Speaker 3:Dude Perfect is expanding right now. They've been around also for almost two decades. They just launched Dude Perfect Outdoors. They launched a new podcast. Like, they can expand that universe pretty well.
Speaker 3:So I do think, like, really good IP is building on YouTube. It's all gonna take time. Yeah. But, again, the amazing thing about the platform that is YouTube is that, you know
Speaker 1:I guess the question is, like, like, you you pointed this out to me the first time you were on the show was that there are there are I forget exactly the stat, but it was something like like there's a ton of, young kids where their favorite person is someone no one else knows. Yeah. Mhmm. And it's sort of a referendum on, like, the Nimsel phenomenon that you can be niche, huge in that niche, like, you are getting stopped for a signature by that fan
Speaker 3:Yeah.
Speaker 1:Or never heard of them. Like like, you know, just a bunch of people that are like, never heard I mean,
Speaker 3:the four of us could walk down the street here. Exactly. And there could be people who are like, holy shit. It's John Jordan.
Speaker 1:And then and then have to explain who everything about what you do to this person.
Speaker 3:The opposite can happen.
Speaker 1:Whereas that's not true for Spider Man. That's not true for Star Wars. There's certain things that have broken through too. It's it's household name level. Yeah.
Speaker 1:And I think mister beast has done that Yeah.
Speaker 4:For sure.
Speaker 1:Dude Perfect, yes, to some degree. But it just feels like it's a function. It's not saying that it can't happen. It's just a function of time more than money or anything else. And I think if Dude Perfect twenty years, super impressive, incredible.
Speaker 1:But it takes fifty to be a 50 year old property. Like, there's just no, we had the acquired guys on the show and and we were talking about like, why should we ring the gong for you? What is it? And and the metric that I was the most, like, envious of was, they've been doing it for ten years.
Speaker 5:Yeah.
Speaker 1:And it's like it's like
Speaker 2:actually a function of you need, like, three generations to grow up on the content Yeah. In order for it to be durable IP.
Speaker 4:That is true. We're just getting to the point where there are creators like Rhett and Link or Dude Perfect that are are going towards twenty years.
Speaker 1:Yeah.
Speaker 4:Yeah. That's right. So we're seeing these creators do this for the first time. Totally.
Speaker 3:Well, I think on this like, on the point of Netflix, YouTube, Warner, like, we'll see what happens. Yeah. But I do think it's interesting that Netflix, in order to compete Mhmm. Is it needs to acquire a bigger catalog.
Speaker 4:Yeah.
Speaker 3:And maybe maybe maybe with what they're doing, and they're starting to also offer deals to podcasters. Yeah.
Speaker 2:Yeah. At what point at what point do they just open up the platform and say, here's an upload button?
Speaker 4:So I think 2026. Really?
Speaker 1:I Woah.
Speaker 4:That's think there's gonna be a creator program
Speaker 1:Okay.
Speaker 4:Of some sort because even if you
Speaker 2:Maybe that's more curated, but but
Speaker 1:I've heard you can do that on Amazon Prime. Yes. I'm pretty sure if you have a doctor, you can just upload and say, good chartplay about it. Mhmm. Cool.
Speaker 1:You can do that. I think
Speaker 4:if you look what Netflix did with Mark Rober, massive YouTube creator, they took his top 10, basically, greatest hits from YouTube, repackaged them. They're on Netflix right now, and it was a top 10 show on Netflix, number one kids show. Wow. They also signed a deal with him to make a new series, a reality show.
Speaker 3:He also did a Christmas special with Elmo, directed by another creator, Daniel Thrasher.
Speaker 1:So very cool.
Speaker 2:Very cool.
Speaker 4:But that shows me that they have an openness to content that I don't think they would have been open to a couple of years ago that maybe they wouldn't have deemed premium enough.
Speaker 1:Sure. Sure. Sure. Right. But, I mean, at a certain point, like, just even just the AdSense is if you just took the AdSense from a Mr.
Speaker 1:Beast video, like, that's enough to go shoot a Hollywood. That is the budget of a Hollywood twenty minute production.
Speaker 2:Here's the other the other thing.
Speaker 3:That's yeah. Maybe. I think It just feels like there's enough is that money is very different than other people's
Speaker 1:assets. Sure.
Speaker 3:Sure. I think what you guys have probably experienced is sponsorship dollars are
Speaker 1:Yes. Yes.
Speaker 3:Are gonna drive, you know, the the the majority of production benefits. But my my concern with the Netflix and and as they move into podcasting is, like, their appetite for niche communities. Because they tried this with fitness at one point.
Speaker 1:They did
Speaker 3:a partnership with Nike where they were trying to compete essentially with Peloton. They're like, maybe people will come here to work out. The audience was too small. And, like, they don't do well with niche. Yeah.
Speaker 3:And our world, like we just talked about, is like, it's choose your own adventure from a media perspective. And YouTube is great
Speaker 1:at that.
Speaker 2:Well, here's here's what here's what points.
Speaker 1:Like like, taking k pop demi hunters and making it a national conversation, making Squid Game a national conversation.
Speaker 3:Mean, the big Exactly.
Speaker 1:That's the big
Speaker 2:thing that that Netflix is missing and maybe their opportunity to grow watch time is there's nothing real time on Netflix at all. So much of the time that I wanna watch content, it's like, I'll watch some geopolitical, like, creator on YouTube. Yeah. I'll watch, like, what happened f one Yeah. Commentary reaction.
Speaker 2:Sure. Right? Netflix does has nothing for me if I wanna kind of understand what happened in the last twenty four or forty eight hours. Right? Mhmm.
Speaker 2:And I just feel like a lot of watch time on the Internet is that kind of more real time. There's like evergreen Yeah. Entertainment content that Netflix is dominant in and YouTube but YouTube has both. And so I think that can explain some of the this actually
Speaker 3:it it it the conversation moves nicely into the DisneySora thing. Sure. And and largely because something What
Speaker 2:was your immediate reaction to the news?
Speaker 3:To DisneySora?
Speaker 2:Yeah.
Speaker 3:It's like, it was gonna happen. I'm surprised they're the ones who did it. But I think what what Colin and I have been kicking around is, like, the video gamification of everything, where even if you look at prediction markets. Right? So, like, you guys obviously have a partnership with Polymarket.
Speaker 3:And you look at Calshy, Polymarket. Like, everything is a video game. Right? And if we look at the early origins of YouTube, it was video games. So look at the early origins of Twitch, it was video games.
Speaker 3:And I think our expectation as audience members is that all of our media is interactive. We can play with it. We can touch and feel it. And it's only getting increasingly more interactive. So the DisneySora conversation, especially, like, generative AI has come into the picture, it's like generative AI itself is entertainment.
Speaker 3:So me generating images and videos is time I'm spending entertaining myself. Yeah. Right? It's not just utility. It's entertainment.
Speaker 3:Yeah. And I think, obviously, if you have this IP you guys just talked about, it takes fifty years to build IP. Look at Disney's IP. It's hundreds of years. You have this IP.
Speaker 3:How do you how do you monetize it? Well, what's really interesting my assumption, I haven't read into this if this is what's happening, but with Sora is that if you use one of the 200 characters that's licensed to Sora over the next three years, there's likely some fraction, you know, micropayment going back to Disney. And if it's not, I think that will be the model. Yeah. Where essentially, yeah, I'll give you Mickey Mouse.
Speaker 3:Just give me, like, a fraction of a penny every time someone uses Mickey Mouse. Now, like, from an audience perspective, it's interactive media. It's more fun for me to to prompt and generate Mickey Mouse in the context that I want him. And then for Disney, like, they have these this IP that can be generating, like, very small amounts of money, but you'd scale that out to, like, 30,000,000 people using it or 20,000,000 people using it. It's like, that gets pretty significant.
Speaker 4:It's kinda And I I towards UGC in the same way that Netflix needs to open up a creator model. Yeah. Let's open up our IP for a lot of creators. And like they said, some of it's gonna come to Disney plus.
Speaker 2:Yeah. I just I I think it's I I thought I was smart for a lot of reasons. I think I I think OpenAI specifically needed some competitive edge around, I think people were Nana Banana has, like, really broken through. Mhmm. Mhmm.
Speaker 2:I have two account I have account have an account that that I just have free models for the different labs. So I did the same prompt yesterday with Gemini and ChatGPT for an image generation and Gemini was like ten seconds. ChatGPT on the free plan Slower. Takes like
Speaker 1:Yeah.
Speaker 2:I didn't even come back. I didn't actually go back and see it but it took like multiple minutes. And so having something that gives them a reason to drive a bunch of new paid subscriptions, I think, And like specifically get the next generation
Speaker 5:Mhmm.
Speaker 2:Disney products are like a Yeah. Drug for children. They're addicted. Right? And I think it's like adding a personalization layer that didn't really exist for Disney.
Speaker 2:Like, you go to the parks and you could like do as a a have a meal with a character Mhmm. Or whatever and that was personalized or take a picture or something like that. But I think if you're Disney and you're trying to drive more sign ups to Disney plus, more retention, more park visits, I think it's actually smart because if you put the only thing my three year old knows about AI and he doesn't even call it AI, but he's like, make a dino picture. He just that's like stuck in his head because it's such a fun experience of like, take a picture, we take a selfie and then we just make it make us look like dinosaurs or whatever. He loves it.
Speaker 2:Right? So Disney doing that and getting, you know, I'm sure a lot of people will say this is like terrible and shouldn't happen. But getting a bunch of young people to have that experience of like making a Disney part of their like everyday experience in life, I think is gonna be, have like powerful downstream effects.
Speaker 4:Mhmm. I feel like Sora was a bit of a Napster moment for visuals. Like, Sora came out and sort of broke the mold of what we would expect. And a lot of people started using the IP anyway, and we were like, wait, you're supposed to pay for this stuff. Yeah.
Speaker 4:Right? And then, like, a new model of streaming has emerged, and I don't think artists are particularly super excited about that model, but they've adjusted. Mhmm. Right? And I think this is another moment where it's like, oh, okay.
Speaker 4:The way that we monetize this art has shifted because of technology. Mhmm. And it has just happened. And Disney, in a way, is now, I think, just coming over to me like, this is already happening. People are already using our IP in ways we didn't want them to on Sora.
Speaker 4:So let's just get involved
Speaker 1:We need some control.
Speaker 4:And create the new model. Let's come up with the new model for how we monetize this.
Speaker 3:I actually think, even if you look at what you guys are doing with this show, like, I I always think about a live show like yours as, like, you're open source you're giving open source material to the Internet Sure. In a way. Right? People can clip this and Yeah. And play with it and and interact with it and talk about it and retweet it.
Speaker 3:And it's like it's it's a playable medium.
Speaker 1:Yeah.
Speaker 3:And I would assume that there's some some clips of this show that have extremely high viewership that no one in this building made.
Speaker 1:For sure.
Speaker 3:For sure. Right? And so that Some
Speaker 2:of high some of the clips with yeah. The best performance. If you probably took like individual assets that got the most views, probably at least five out of the top 10 were posted by other people
Speaker 1:Yeah.
Speaker 2:That were just
Speaker 3:most viewed clips of the Colin and Samir show are not made by our
Speaker 1:team. Wow.
Speaker 3:For sure. Yeah. If you go on TikTok, search Colin and Samir show, you search some other interviews, like, they are all clipped by other people in ways that we wouldn't have to reframed. Yeah. It's reframed and it's
Speaker 1:Reframed around your show. It's reframed Totally.
Speaker 4:We can't even compete with our own clips. Yeah. You know, we tried doing like, oh, man. That person already put it out.
Speaker 2:Yeah. Yes.
Speaker 3:We we tried to compete with the Internet for our own clips of our own show and we couldn't compete. And that's where I think the perspective of like Disney and Sora is like, yeah. Just like here's material content.
Speaker 1:ID type system will come for clips and from AI.
Speaker 3:I think I think it has to. I mean, I think I think YouTube has precedent with content ID. I think I think we'll all, as creators, live in the world where we're like, yeah. You can use my same way that Sora kind of showed it. It's like, yeah.
Speaker 3:You can use my face. But I think there will be there have to be a a revenue share model. Like, I think for this to work properly, and maybe nobody cares about this.
Speaker 1:But It's not just revenue. So it it's it's like multi share because it can't just be what it is. I I don't know exactly if it is this way currently, but there's the there's the thing about, like, I could be using some clips from your show and clips from this show and this. But as soon as I put Mariah Carey's, like Mhmm. You know, Christmas song in there, like, she's getting 100% of the revenue Right.
Speaker 1:Owns it. Right? Right. And there's, like, only one claimant right now. But they'll need to be, like, slices where it's like, okay.
Speaker 1:Your face was on screen for this.
Speaker 9:I don't
Speaker 3:wanna say it, but I'll say it. It feels like Web three was starting to get onto this with fractional ownership. Right? Where you can tokenize yourself in a way of, like, yeah, if this token is used, I receive x percent. You may
Speaker 1:or may not actually need the blockchain on your line, but like
Speaker 3:this this idea of fractionalization makes no sense. The idea of that where like Grimes gave her voice out. Right? And like, it was like a fifty fifty rev share if you used her voice. Yep.
Speaker 3:And like, I think that maybe will happen. But I I also think just the Internet and like YouTube specifically, think will look pretty different in that. Not only will we say you can use my IP in my face, but I think you'll take like the full length episode of your guys' show or, let's say, our show. And I think you'll just type in, you know, I got seven minutes. Can you just give this to me in seven minutes?
Speaker 3:Like, you can use their voice and, like, their style of animation, but just, like, give me the give me the seven minute version of this.
Speaker 1:Yeah.
Speaker 3:I I think if you if you've ever played with notebook LM, you start to see like how like manufacturing your own entertainment where I I could go give me TBBN, give me Colin and Samir, and give me acquired last episode, but like summarize it all for my twenty one minute drive. Yeah. Right? Connected to Google Maps.
Speaker 1:It's like Yeah. I'm always I'm always interested in where that lives. Like, does that live in the consumer side or on the platform side or on the creator side? Because like, we literally do that. We have a twenty twenty to thirty minute cut down of the three hour show
Speaker 3:Right.
Speaker 1:That we cut down, we edit. Diet TB people. Diet TB people. Very familiar. Right?
Speaker 1:Yep. It's very yeah. We we it's been
Speaker 2:It's so funny because I've Yeah. Of other people their show now. And when when we were first like conceptualizing the show based on people's feedback of like I want the show in twenty thirty minutes. I was like, oh, we'll just call it diet TBPN. It's like all flavor like like way, you know, way less calories.
Speaker 2:And John was like, diet? Like, does that make does that make any sense? But it is a good
Speaker 1:It's like not an industry term.
Speaker 2:It's not an industry term, but
Speaker 3:it's But it makes it makes more universal sense. But anyway, I think you'll be able to make your own version of diet. Yes.
Speaker 1:Yes. Right?
Speaker 3:And like Yes. But you'll have to say yes Yes. To that. And and again, there'll have to be some new way of like, yes, so long as I'm compensated when that happens. But if it is Yeah.
Speaker 3:You us, you know, Ben and David and Yeah. You guys in one episode, like, the also, the question is who's weighted heavier?
Speaker 4:Yeah. Yeah. Right?
Speaker 3:Is it acquired because they're, like, the luxury brand of of of they're the Rolex of the space.
Speaker 1:Yeah. I don't know. Yeah. That's funny.
Speaker 4:You may not even have to ask the platform to do it from an audience perspective. I think the platform
Speaker 2:does it?
Speaker 4:I think at some point, yeah, they're like, no, we know better than you based off of what you've already told us in your behavior. Potentially.
Speaker 1:Yeah. But what what what's odd is that the AI models, they're really good at a lot of things, but they they they have not yet been good at clipping. Like, like, don't wanna go up against the Internet, but I would say, you know, if there's five mega viral Colin Samir clips that that you guys didn't clip, there was those are clipped by humans, though. Those are humans. Those were not 100%.
Speaker 1:As soon as someone could do it, they would definitely run, oh, yeah. Run run the prompt over all their content. Yeah. Yeah. Yeah.
Speaker 1:Let me put it out. I'll I'll try and monetize
Speaker 3:But that's what would platforms that can get you, like, 65% of the way there. But, yeah, you're right. The framing can't play. Tools.
Speaker 1:They're good as tools alongside the human, but the editorial it's an editorial question.
Speaker 3:There could be this show generated by AI. Right? Like, I'm just saying, if you just look at the technology, like, we could ingest news
Speaker 1:Yeah.
Speaker 3:And figure out how to give it in, like, an audio
Speaker 1:use it. Yep.
Speaker 3:Yeah. Form contextualize. But it's not it's not as fun. It's like that has no I'm not
Speaker 4:It's also nowhere near as special. Like, there is something very special about what happens to your day to day. Yeah.
Speaker 1:It's hard bring
Speaker 4:your own.
Speaker 1:It's like it's like
Speaker 4:feeling like you're here in the moment. Totally.
Speaker 3:Yeah. I think to clarify, like, if I anyone's listening to this being like, oh my god. They're like, this is the dystopian world of content. Like, there is no world where I see like, the the your guys show as an example Yeah. Is like, there is more room for interesting creative now than ever.
Speaker 1:Yeah.
Speaker 3:If you are thinking about what is this is maybe a a bizarre way to put it, but what is like a uniquely human format.
Speaker 1:Yeah.
Speaker 3:It's it's why we've invested more in live events. Like, we did our first big live event in New York in September and
Speaker 1:That was with Google. Right?
Speaker 3:They were sponsored. Yeah. And it was super fun. And it was great. There's 500 people in a room.
Speaker 1:Yeah.
Speaker 3:And and I think you feel like that is there's going to be a rise in live events. That's true. I imagine you guys are gonna do some version. We
Speaker 1:haven't cracked it,
Speaker 3:but You'll do something Maybe. Where people can show up.
Speaker 1:Die to show Yeah. Up to
Speaker 3:Acquired, obviously, had people in the Like, Chase I think good creative will always win, but I do think back to the Netflix conversation, the the question is, like, who is the arbiter of taste in all of this?
Speaker 1:Yep.
Speaker 3:And I think the old Hollywood world is like Hollywood is the arbiter of taste. We're gonna show you what good Mhmm. Is. And Netflix is that. Right?
Speaker 3:They're gonna curate stuff editorially. I think that still matters. I don't wanna suggest it doesn't matter. I enjoy that. The other side is that the audience is the the arbiter of taste and the curators of what's good.
Speaker 3:And that's the I
Speaker 2:as a Netflix subscriber, I would be excited for them to have a corner of Netflix that's just history content from independent creators.
Speaker 1:Mhmm.
Speaker 2:Just like effectively like providing Like Johnny Harris? Yeah. Yeah. Stuff like that. Because I I've been on YouTube to fall asleep at night.
Speaker 2:I can't watch anything tech or business related because it just Rides you up. It prompts a bunch of ideas. So I have to just like it's gotta be like 30 years old. Like, it's gotta be like history. And something I've noticed recently is like, there's a bunch of channels getting a lot of views that are getting served in the algorithm that are clear and I only clock that it's AI because they'll use images and then there'll be like a talk track.
Speaker 5:Mhmm.
Speaker 2:And there's a bunch of creators that have just nailed this format over the years. But I'm starting to hear like, this battle wasn't just a a fight. It was it was a turning point in history and into like very like clockable as AI. And so now, like in the same way on Amazon as a consumer, you're like, I just wanna buy stuff on Amazon that's from brands that are over 50 years old. Because I it's not know like somebody just, you know, drop shipping.
Speaker 2:Shop.
Speaker 3:I'm I'm I sometimes will get caught with a product that I'm like, maybe I want that. If it's on TikTok shop, I'm like, I don't Rough.
Speaker 1:Yeah. Blanket. Disendorsement. Wait. Is that
Speaker 3:not but, like, do you
Speaker 1:TikTok installed.
Speaker 3:These guys are just in deep negotiation with TikTok. I'm
Speaker 1:I'm not. I'm I'm opposite for
Speaker 6:that. It's the opposite.
Speaker 2:I actually so we're Like, I'm
Speaker 4:the hardest digs of this year.
Speaker 2:No. We're we're bad creators. We don't have TikTok on our phones. We get some say, we have one friend that sends us links and I've never watched any of them. Yeah.
Speaker 2:Not a single one.
Speaker 1:That's right.
Speaker 2:I gotta we gotta when when Larry comes out and says like, I fully control TikTok now. It's mine. I've got it here on my phone. Yeah. I trust it.
Speaker 2:You can trust it. Then I'll I'll give it a Spence.
Speaker 3:You know what is? You guys don't have TikTok, so we'll tell you
Speaker 1:about this.
Speaker 3:There is, like, AI creators now.
Speaker 1:Okay.
Speaker 3:And that is very bizarre and dystopian to me because they Yeah. Even me and maybe I'm getting to that age where I'm part of the cohort that can't tell, but I can't tell.
Speaker 1:Okay.
Speaker 4:And
Speaker 1:Oh, so you're not talking about, like, there is a creator that creates various animals being pulled over at DUI checkpoints, like, that's their shtick.
Speaker 3:I'm talking about, like, an AI generated human
Speaker 1:Okay. Creator Yeah.
Speaker 3:Who looks human.
Speaker 1:Okay.
Speaker 3:There's this And are people
Speaker 1:in on the joke
Speaker 4:or the pace. They're not. They're not in on
Speaker 1:the joke.
Speaker 4:And and the the tools really have opened up a world where it is easy to create. I mean, I've, like Yeah. I've seen these and I've been like, oh, let's see
Speaker 1:I can make one. Is that sort of the biggest Yeah. Is that sort of the biggest trend of of '25, you think? Or I I I'm super interested, like, at a more tactical level, what's changing on YouTube, like because obviously, we've been through, like Yeah. The eight minute shift
Speaker 2:and
Speaker 1:then the twenty minute shift and and then, know, like, clickbait to, like, the counter switching to ABD and all the all these different little moments have happened. Like, were there any is is it fair to say that AI is, like, the biggest the biggest change in '25, or was there another kind of meta shift that you sort of noticed?
Speaker 4:One that we talk a lot about is the the shift from, you know, podcasts being the meta when you think about the last presidential election Okay.
Speaker 1:Yeah. To Podcasts.
Speaker 4:You know, obviously, like, podcasts played a major part if you look at the amount of podcast appearances and viewership that Trump got versus Kamala Harris. Like, it's just the graph is unbelievable.
Speaker 1:Yeah. And I had this whole take during the election that it was about watch time too. Crazy
Speaker 4:thing is
Speaker 1:that she not only would she would would come and go on, like, a smaller show with a smaller audience, but she would only do a forty five minute hit, and Trump would be there for three hours. Yeah. And I'm like, we know AVD. Right. Like, watch time is important.
Speaker 1:The
Speaker 3:amount We actually clocked and and we wrote down how much time. And I think for Trump, it was like sixteen hours available
Speaker 1:or maybe more. And for Camilla,
Speaker 3:it was like under two.
Speaker 1:And and it's just like as a voter, if you wanna just sit and
Speaker 2:be like,
Speaker 1:I want five hours of content from this person to make my decision. I'm gonna listen to five hours of both, and there's not five hours of one, that's a tough sell. Anyway, that looks extremely real.
Speaker 5:That
Speaker 1:Right. I I I would never I don't know if I can
Speaker 3:show a camera. I don't even know what camera is looking at me right now.
Speaker 1:Oh, there you go.
Speaker 3:There you go.
Speaker 1:I don't know if
Speaker 3:you can tell, but like the the
Speaker 2:Well, so here's the thing that's gonna happen is people are people are gonna start to realize if this person has didn't post at all before 2025, they're not real. Yeah. Because I feel like this year, the model In
Speaker 1:2019.
Speaker 2:Check the check the early Instagram.
Speaker 1:Yeah. Something.
Speaker 3:My understanding of how things have changed on YouTube Mhmm. Is that like, if I if I was to zoom back to when I first got on the Internet Mhmm. I think the amazing thing was, like, it was all information. We could access information in a crazy way. Like, at least when I was a kid, we would go to, like, the library and go to the library and try and find, like, a book about something.
Speaker 1:Mhmm.
Speaker 3:And that changed when we could search ask ask Jeeves or Google or AOL or Yahoo, and, like, we could just find out things, and that was crazy. And I think the information era was capped with the rise of social media and, like, Facebook, specifically. When Facebook came about, it wasn't just information about the world or fun facts. It was information about people. And information about people was, like, really interesting and and had gossip connected to it and had, like, voyeurism connected to it.
Speaker 3:It was just, like, this fascinating world that mirrored celebrity culture, and that then ushered in the next era, which was the attention era. And the attention era was kind of brought all the way forward by, you know, someone like mister beast, Jimmy, who was like, here's human psychology, and here's how these algorithms what they favor, what what are the incentives of the Internet, and let's push that forward. And that's like, we got to that point with the meta of YouTube being all about information and attention. And I think this next era that we're in and the biggest shift that's happened in YouTube over the past year has been a shift towards perspective. Information and attention void of perspective is just completely uninteresting.
Speaker 3:And I think that that actually wasn't the case. I mean, you're talking about, like, history YouTubers. We were talking to this car creator, James Pumphrey, used to work at Donut Media. And he was telling us, like, he could he at Donut, they could get a million views of, like, the entire history of Volkswagen.
Speaker 1:Yeah.
Speaker 3:But that he can't do that anymore. He has to add perspective to it. The title has to be, like, why or how Volkswagen
Speaker 2:Why Volkswagen is cooked.
Speaker 3:Yeah. Or how Volkswagen turn their back on us. Mhmm. Right? And that has perspective suggested.
Speaker 3:And I think we can access information now very easily through LLMs, through search, through anything. We can actually also access, like, attention driving things. Meaning, like, scrolling TikTok captures my attention. Sure. Sure.
Speaker 3:I don't think I'll, like, remember any of it or it just won't matter, but it can fill my need for something to capture my attention with but but perspective Yeah. I think is the thing that makes it stick in your brain of like, I'm coming to these guys, to Jordy and John for their perspective. I can get this information at other places. Totally. Totally.
Speaker 3:And so I think we actually saw that quite a bit on YouTube where the mister beastification, the kind of like big idea that drives a ton of attention is like still kind of interesting, but it's not as interesting as it used to be. Yeah. And and someone growth area. Someone like Marques Brownlee who does the smartphone awards.
Speaker 1:Mhmm.
Speaker 3:You're like dying for his perspective on what was the best phone of the year. Yeah. And I think he has a lot of longevity because his content is rooted in perspective.
Speaker 1:Yeah.
Speaker 3:Emily Sundberg's another great example. Like, that's perspective. And so I think perspective has always mattered but it feels like that era has really been
Speaker 1:pushed up. Using Marquez as an example, do do you think that which which offers more perspective or like waveform podcast, his podcast where he can kind of read if it's unscripted versus a review where he has the requirements to tell you the price, the value, the specs? Does he have more a longer leash to give more perspective in the unscripted format? Or is there an equal amount of perspective because he is who he is and he brings his perspective everywhere?
Speaker 3:I think Marquez in the face to camera is the is the best perspective Okay. Marquez. Okay. And people had problems with that, like, last year with, Humane. Oh, yeah.
Speaker 3:People felt like his perspective carried so much weight that it could
Speaker 1:Bankrupt a company.
Speaker 4:Yeah. Same with
Speaker 3:Same same with Yeah.
Speaker 8:The car.
Speaker 3:And so it's like But I think that also goes to show like how much his perspective matters and how much someone like that's So
Speaker 4:And he's I remember he said, he said a bad he told us, a bad review doesn't tank a company. A bad product tanks
Speaker 3:a Of course. Course.
Speaker 1:But, yeah.
Speaker 3:Yeah. I mean, all that to say again, like, think if you're
Speaker 2:I would be wearing a humane pin if my If it were not for the review.
Speaker 1:I mean, it it can accelerate the demand. Even if you
Speaker 3:look at, like, Ryan Trahan and, like, his videos, they they lead with, like, something like, really fun idea of, like, I stayed in one star hotels or something. But then his perspective gets layered within thirty seconds on top where he's, like, his his job is to leave a five star review at this one star place because, like, he wants to find the good in the world. And that even that is, like, perspective.
Speaker 1:Yeah. That's right.
Speaker 3:And so I think I think POV is like, that's the era we're in on the Internet. Like, you're just Yeah. Delivering me information.
Speaker 1:I mean
Speaker 4:And POV can be style. It can be tone. Like, I think you guys are a great example. There are lot of people talking about what you're talking about. Yeah.
Speaker 4:They're not talking about it in the style you're talking about it with the same tone.
Speaker 1:Yeah. When I think about the Mr. Beast copycats, I think like there's distinctly a lack of perspective and a lack of view. It is just like, okay, yes, like if Mr. Beast does this and you clone it and rotate that piece like Right.
Speaker 1:You have a slight iteration that's enough to get the views, but it wasn't actually something that was, like, inspired or trying to push the other one.
Speaker 3:Navigate how to get views right now. Like, we can navigate how to get attention on the Internet. If if you study
Speaker 1:it forget it.
Speaker 3:If you study it enough Yeah. You know, you can navigate it. But it doesn't mean people will remember you.
Speaker 1:What's the state of the thumbnail industry, the thumbnail sub industry?
Speaker 2:Well well, on on that note, I feel like there's this emergence of the creator with short form video being so powerful for discovery. There's an emergence of a content creator that might have 200,000 followers and no viable business or even path No. To a viable business because they have, like, a bit that they run that's really funny. So they can get attention in a certain audience, but then, like the pathway to monetizing it, you see this with like certain kind of accounts on Instagram where it's like your pathway to monetizing is like online casino advertise. Exactly.
Speaker 2:And so that's kind of like that's kind of like UBI for people that are funny online. It's just like you can
Speaker 3:That is sell a hilarious steak. That's unbelievable. And I I totally agree with you. But that that's
Speaker 2:And I actually somewhat appreciate it because there's this guy that
Speaker 1:He's a guy who's actually sponsored by Steak and he's hilarious.
Speaker 2:And there's a guy who is so funny. Want him to it's like Get a better sponsor? Agent something. Yeah. Yeah.
Speaker 2:Well, I don't care what sponsor he has really. I'm not I'm not I don't I don't buy products based on like some guy that I see for ten seconds. Mhmm. But I do yeah. This like sort of UBI for people that are funny online right now is like gambling.
Speaker 2:Mhmm. And it's dark, but at Yeah. The same time there's a dark side to it, but it is What's
Speaker 3:the light side to it? Just that people are making money?
Speaker 2:Well, the light side is that is that on a personal level, I get enjoyment out of it. I'm like, he's providing it. It's effectively a
Speaker 1:free product. With sports sports podcasting. There's like a massive bubble in sports casting. The the the white pill is that, like, there's a lot of people that have jobs. Podcasting.
Speaker 1:And that's a pretty fun job.
Speaker 3:The Chinese micro dramas. Right? Yeah. Yeah. Chinese micro dramas, like, real short.
Speaker 3:Actually, the drive over here, saw ads for real short, like, billboards for for real short. You're unfamiliar, it's like it's if soap operas were on TikTok Yeah. You know, to swipe able feed.
Speaker 2:Well, yeah. The the crazy thing is that those have been so successful and it's to me very much the same idea as Katzenberg's like short short form play.
Speaker 3:No. It's not the same idea. That was when we went into I'll never forget walking into the Quibi pitch meeting, where they they invited a bunch of creators to pitch shows. When when we walked into their office, like, the the the play there was, like, spend a ton of money on content. Like, they were like, we have a Spielberg movie and an Aaron Sorkin movie.
Speaker 3:Okay.
Speaker 4:Like a $100,000 a minute for some shit.
Speaker 2:Yeah. But they were
Speaker 1:like And what is not real short? It's it's it's higher than TikTok. Right?
Speaker 3:No. Yeah. I don't wanna totally discount what you said. You're right, Jordy. That, what they said in the meeting, I remember.
Speaker 3:I'll never forget it. They were like I was like, when does someone watch this? And they said, when someone is waiting for the bathroom, like, line for the bathroom. Mhmm. They'll they'll they'll flip it on and watch, like, seven a seven minute increment of a show.
Speaker 3:And I remember being like But people watch People look at Instagram during that time. Mhmm. Like, how are you gonna pull me into Well, yeah. Guess I guess
Speaker 2:I guess it's hyper it's hyper it's hyper competitive
Speaker 1:Mhmm.
Speaker 2:For that time. But I think there's something to be said for slow content that's made in a slow format, which is like with production. I've been thinking about like fast and slow content. We make fast content. From a standpoint?
Speaker 2:We show from a from a production standpoint. Okay. Like, there's people that make content. John's content on tech historically was slow content. Yeah.
Speaker 2:Yeah. It's been two, three weeks making a video. Right. You put it out, you get a bunch of views. Yep.
Speaker 2:We're the opposite, very fast. We're making three hours of content a day with, like, three hours of prep a day. Yep. And I think, like, taking the taking a a form factor, like short form video and then putting a different type of content through it, which is this more cinematic, highly produced content. It works in the form of, like, real Real short.
Speaker 2:Real short. Yeah. But they're spending fundamentally
Speaker 4:They're spending a lot less.
Speaker 3:They're spending way less.
Speaker 4:But also, they're formulating it in a way where they're earning your attention every sixty to ninety seconds. There is a hook every sixty to ninety seconds to get you to keep watching.
Speaker 3:You guys know how the economics works? No. So how it works is, like, if you download real shorter drama box, basically, they're spending, like, typically $200,000 for a ninety minute show. Right? And it's that's cut into, like, a 100 slices.
Speaker 3:And how what's happening is you when you download real short, you're getting, like, tokens. So it's kind of like robot Roblox money, like robots. Right? Mhmm. So you're getting these tokens, and you have to buy more, And the first 11 swipes are free.
Speaker 3:You go past the eleventh, you gotta make a payment. You gotta spend tokens
Speaker 1:to keep watching. Every
Speaker 3:swipe, you're spending tokens.
Speaker 1:Interesting.
Speaker 3:And, you know, there's a we interviewed a director on our show who's directed 20 of these. And he is acutely aware of the fact that some of his content has been viewed by 30,000,000 people. And when you're making micropayments again at that scale
Speaker 4:Making 30 to $40 if someone finishes
Speaker 3:it can be upwards of 30 to $40 if someone finishes the movie. Huge. So these and and and the max budget is 200,000 to make these. Wow. The content itself is like, you know, it's not it's it's Soap opera.
Speaker 3:It's soap opera content. It's not Wow. You know, it all speaks to, like, the most aggressive, you know, just versions of what people want on the Internet. But the silver lining the reason I brought this up, the silver lining is that people in Hollywood are working. People who are directors, writers Mhmm.
Speaker 3:Cinematographers, this is where they're working.
Speaker 1:Mhmm.
Speaker 3:So I
Speaker 4:mean, it's by no means a perfect model in terms of, like, compensating actors and people working, but they are working. Yeah. There are opportunities.
Speaker 3:So I can unlock coins right
Speaker 1:now in real time.
Speaker 2:If you wanna read if you wanna
Speaker 1:read some of the titles on real time, I'll read a bunch. American Sniper, the last round. Okay. I was actually gonna ask, like, you know, is it all romantic y or romance?
Speaker 3:I think it's mostly romance.
Speaker 1:American sniper, that's that the last round, that does seem like something I would watch. Okay. I'm I'm down for that. Yep. Step aside.
Speaker 1:I'm the king of capital that directly targeted John gets a new shot. I for me.
Speaker 3:He might have a geotag on there. Seems like it does. Maybe, John,
Speaker 4:you get into acting in these.
Speaker 1:Yeah. Some of these are are a little a little scantily clad into Maybe this Christmas, the billionaire married a homeless girl? That's a kind of interesting
Speaker 2:Didn't China just ban that.
Speaker 3:They did?
Speaker 1:That's right. The format. There
Speaker 2:was a a ton of I mean, there's a very popular type like format for a show.
Speaker 1:Basically, the Hallmark movie.
Speaker 2:Yeah. Like very successful guy marries or falls in love with like a very normal a normal woman. And apparently China is like has a top down mandate to like not do this kind of content because it's creating
Speaker 1:unrealistic expectations. Interesting. Oh, I'll be I will definitely just be randomly plucked from obscurity by a billionaire.
Speaker 3:Interesting.
Speaker 1:And and it's like, well, like, statistically, that's not gonna happen. So maybe, like, marry your high school crush and have kids and build a family, instead of just waiting around for a billionaire to come pluck you out of obscurity because you've seen so many of those stories, which is like a fascinating problem to have. Yeah.
Speaker 4:Amazing stories are that popular that it's gotten to that point.
Speaker 1:Totally. Totally. Yeah. I I I do wonder like like I mean, we've had so many discussions about the like the downstream effects of TikTok or YouTube or whatever. Mister Beastification.
Speaker 1:I I wonder if we're gonna be having that discussion in a year or two because it feels like people are just learning what real short even is.
Speaker 3:Yeah. For sure. It's early.
Speaker 1:It's early. Obviously, the business is working now. What what happens to a
Speaker 3:generation raised on it? Is it good? Is it bad? I don't know. The the last thing I'll say just to close the loop on, like, what I think big metas that have changed on Another one is length of of content and serialization.
Speaker 3:Meaning, like, creators are approaching YouTube as if they're making a show, like a series that you can binge. Cleo Abrams is a great example. Like, Huge If True is a show. It has a format to it. It has an intro card that could, similar to Mark Rober, be pulled onto Netflix as an explainer show
Speaker 2:Yep.
Speaker 3:That explains cool science formats. And I'd from the era even when I was watching you as a YouTuber, like, we all weren't looking we we knew we were making content that fit a format that was you know, should have been repeatable if we were at our best. We weren't making a show. No. And now people are making a show.
Speaker 3:Yeah. And a YouTube channel is a TV show.
Speaker 1:I like that.
Speaker 3:Largely because it's watched on connected TVs. Right? Even our show, over 50% of our watch time comes from a connected TV Wow. And our average view duration is forty eight minutes on on TVs. But you look at, like, Mark Rober thank you, guys.
Speaker 2:Hit the Hit the gong.
Speaker 1:Hit the gong for that? Yeah. For the for the obscure YouTube metric that only the real ones recognize? Hit the gong. Woah.
Speaker 2:See, that that's how you hit the gong.
Speaker 1:That's a great hit.
Speaker 2:That was the hit of the day. Hit of the day.
Speaker 3:Yeah. But, like, Michelle Carre, Challenge Accepted. If you guys are unfamiliar with that, it's a show about taking on big challenges. She hung out outside of a military airplane, recreated Tom Cruise's stunt. But that's one of many episodes that fall in the same format that are thirty plus minutes in length.
Speaker 1:Yeah. So help me help me square that with what I regard as YouTube's sort of organ rejection to overly serialized content. Sure. I'll give you an example. Johnny Harris we're all fans here.
Speaker 1:Bunch of really great it is a show. There's a bunch of great content. But then when he goes and does, you know, I'm doing a three part series, seems like YouTube is like, we don't want your three part series. We don't want your four part series. And it feels like part two is the death knell of a YouTube title, and you should never put part three or part four.
Speaker 1:And they say, hey. We we have playlists for you.
Speaker 3:I don't believe My suggestion is not doing, you know, part one, part two, part three. Totally. Although, a creator named Preston Goes did an amazing series about building a mini truck for abandoned railroad that's three parts, and it worked. It's great.
Speaker 1:But but but you agree with me that he
Speaker 3:he does feel like he should not count part two in the title.
Speaker 4:It speaks to a packaging problem, honestly. Yeah. Netflix, the show has title art.
Speaker 1:Yes.
Speaker 4:Right? And that's what gets me into it. Yeah. That's where I get the recommendation from. And then once you get in, I don't really care what the artwork is for every individual episode.
Speaker 1:It's like it's almost it would almost be better if you're if you're doing like a four part series, four four forty minute episodes or something. Just drop a four hour YouTube video. I I saw somebody watch a ten hour video just on Star Wars episode one. You've seen that one. Right?
Speaker 2:I think you'll
Speaker 4:see the UI changes come to
Speaker 1:the YouTube. So it'll UI
Speaker 8:thing. Think so.
Speaker 1:That makes it all start to feel Like super chapters almost where it's like I think so. But it needs to live in one place because it feels like just if if the algorithm even has a bad day and it serves you part three before it serves you part two, and you're on you're on part two, you're gonna be like, what am doing? I'm not clicking it. I know this is Thanks.
Speaker 4:Can seem minor, but, they're either testing it or it's rolled out where you can now upload four k thumbnails Oh. To YouTube. And I think, just higher resolution thumbnails. I think a lot of that is because now people are sitting and they're watching on their TVs and, like, if it looks like crap when
Speaker 1:you click on Yeah. Yeah. Yeah. Yeah.
Speaker 4:They are they are ushering this move across the platform Yeah. To be ready for consumers to be sitting on their sofas and choosing
Speaker 1:what to watch.
Speaker 3:I'd imagine someone listening would be like, but but didn't you just say that, like, anyone could upload to YouTube and anything could happen? This feels like a high lift to make, like, a show. Sure. Right? And it is.
Speaker 3:Yeah. Yeah. But these creators have all been on the platform for a decade.
Speaker 1:Oh, yeah.
Speaker 3:So the suggestion for me is that, like, this is happening if you watch. Hot Ones is a TV show. Right? So I think you've seen it. It's it's happened over a decade, but it is, like, if you are exploring what is the now of YouTube, that is the now.
Speaker 3:Yeah. Like, it is people are making premium shows that are watched on TV. Mhmm.
Speaker 4:And then the question is, does Netflix come in and and repackage and license those episodes?
Speaker 3:Yeah. Or open the doors to a creator program, which I do think is a Yeah. Very, very realistic path. It's not gonna be anyone can upload Yeah. But it it it's probably gonna happen.
Speaker 1:So what's the state of the thumbnail artist today? Is it all AI? Are there people that have graduated from YouTube thumbnail artists and now they're doing, Netflix thumbnails? Because I imagine thumbnails are important on Netflix too. Right?
Speaker 3:Oh, they're insanely important. I mean, every time you log I if all of us logged into Netflix Yeah. Now, we might have different versions Yeah. Of the same of same thumbnail. No.
Speaker 3:I mean, thumb I said it last time on the show. It's like they're the gatekeepers to to viewership. But I think thumbnail artists are more like strategists now than than pure, like, designers. Right? Because it's more of thinking through the strategy of what what will peak someone's curiosity enough to click.
Speaker 3:I I don't think we need to be, like, hyper hyper designed all the time, but there's there's some really great artists out there. It's actually I mean, when I think about this, there's a thumbnail that comes to mind,
Speaker 2:which is Stuck in your brain.
Speaker 3:Yeah. It's stuck in my brain. It's a really good thumbnail from a basketball YouTuber named Jesser.
Speaker 1:Oh, I know Jesser. Yeah.
Speaker 3:And he went to go tour the new LeBron Nike facility. And it's like kind of a similar thumbnail to mister beast where he's like hanging out of a helicopter, and you can see this like gold LeBron statue.
Speaker 1:That's iconic. Yeah. It's like a classic two pixels, I guess.
Speaker 3:And it has 6,300,000 views, but I I mean, I don't I watch some of Jester's videos. I like his, like, guess the NBA player
Speaker 1:Yeah. Yeah.
Speaker 3:Videos. Those are awesome. Yeah. But I looked at that and caught my eye, and I clicked it. What was amazing is that it pays off in the first second.
Speaker 3:Mhmm. You watch it, you're like, oh, yeah. There's a gold LeBron statue, and this is a brand new Nike facility
Speaker 1:I'm in.
Speaker 3:And so so
Speaker 1:AI could create that thumbnail for someone else, but unless you actually did it Yeah.
Speaker 3:You gotta do this. But unless you're a jester and you pay it off upon hover because it's also like things auto play on YouTube. It's not
Speaker 1:The hover is
Speaker 3:The hover is a very big deal that underrated. It's why that now from a you can't clickbait someone because Yeah. A thumbnail is proven over a hover before you even click. It's like, did this really happen? What does the video look like?
Speaker 1:Yeah. Yeah. Yeah.
Speaker 3:And the fact that he's standing there, that's a strategic move of being like, if I'm gonna make this thumbnail and design it like this Yeah. It can't be so hyperbolic. It has to be pretty real. Like You
Speaker 4:gotta set the expectation with the thumbnail Yeah. And then match it. Right?
Speaker 1:Should we?
Speaker 4:The bird watching doc
Speaker 2:Yeah.
Speaker 4:Listers, the thumbnail looks like a movie. It's like Yeah. Very low fi, but there's text on it that reads very much like a movie that was shown at Sundance or something. Yeah. And then you click on it, you're like, I had no idea this was gonna be so incredible.
Speaker 3:There's a very distinct smell in here. It's not Yeah.
Speaker 1:It's a lot of
Speaker 3:bad smell. It's a good smell, but it's a very distinct smell.
Speaker 2:People say that it smells like rubber. Rubber.
Speaker 3:I would say if anybody in this room has ever been to India, it smells like Really? When you get off the plane in India, this is kind of what it smells like.
Speaker 2:Let's go.
Speaker 3:So
Speaker 1:You know there's someone in the technology world that just got fired for saying that exact No. Really? This is old drama. Who? Very recently.
Speaker 1:Yeah. The CTO of Klein was, it was talking about a hackathon, and then it was a it was a lot of men in the room and Yeah. You know, went all back and forth and it turned into
Speaker 3:Oh, that's a different thing. I'm I'm talking about like a childhood nostalgia for me of landing in the other. Yeah. That should I
Speaker 2:should go ahead, George. As much as I would love to continue this conversation, the good news is we are. That's right. We are.
Speaker 3:It's right.
Speaker 4:It's Yeah.
Speaker 2:I'm not sure when it's gonna release, but we should wrap up.
Speaker 3:Yeah. Slow content.
Speaker 2:Slow content.
Speaker 3:Slow content. Content.
Speaker 2:That sounds slow. But, thank you so much for coming on. Thanks for having We'll close it out.
Speaker 6:I love your show.
Speaker 2:And we'll be back tomorrow.
Speaker 1:We'll be back tomorrow. Thank you for tuning in, Dan.
Speaker 2:We'll be in properly dressed for the for the season.
Speaker 1:We will. We will. Finally. Finally.
Speaker 2:Finally. So thank you for tuning in with us today.
Speaker 1:Goodbye.
Speaker 2:We love you. See you tomorrow. Goodbye. See you guys. Cheers.
Speaker 1:See you.