Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 12 - 3 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching TBPN. It's Monday, 04/07/2025. We are live from the Temple Of Technology, the Fortress Of Finance, the capital of capital.
Speaker 2:This is exactly where you wanna be on a day like today.
Speaker 1:Timeline is in turmoil.
Speaker 2:The timeline's in turmoil. You gotta go to the Fortress Of Finance.
Speaker 3:That's
Speaker 2:right. You gotta find out what's going on from the experts, trust the
Speaker 1:experts And geopolitics.
Speaker 2:Because we have been reading the timeline all day, so experts. Yeah. We're experts.
Speaker 1:We've been reading the information on the timeline. We've been getting misinformation from the timeline. We've been mixing it up and we're here to deliver it. We're here to deliver it. Live.
Speaker 2:You always know it's bad when the Wall Street Journal redos their front end web design. And today, it's looking terrible. I don't know if you can pull that up, first slide, but they it's no longer just a normal list of stories. There's only one story, and that's the market chaos. And so, literally, you go to The Wall Street Journal's website, and it's just like, here's exactly what's going on.
Speaker 2:You need to be tracking this live because it's it's bad news. The markets are down. They went 5% down Thursday, 5% down Friday. I was golfing with a buddy. He's like, oh, if we have a big leg down on Monday, could be in business because he does, like, distressed financings because, like, so he's always like, vulture.
Speaker 2:Yeah. I'm gonna lick my chops. Like, I'm getting excited. It's always bad. But, yeah, we didn't quite get another 5% leg down.
Speaker 2:The markets have been up and down all day. There was a rumor the futures were trading down at 5%. We might see a 5% drop. We opened it at around 3% drop. We bounced up.
Speaker 2:We bounced down. But it's all chaos. We're gonna try and figure it out. We're bringing a bunch of people on who can talk about it, bringing on some VCs, bringing on some founders, learning
Speaker 1:about what they're doing. When you need an expert on any anything related to complex geopolitics
Speaker 2:Yes, yes, yes.
Speaker 1:Macro, you've got to go to early stage private market investors Exactly. And get the truth.
Speaker 2:Yeah. Get the truth.
Speaker 1:And so that's what we're going
Speaker 4:be doing.
Speaker 2:But if you're trying to trade the market while it's up, while it's down, you're trying to buy the VIX, you're trying to go short, buy some puts, buy some buy some options, go long, whatever you wanna do, do it on public.
Speaker 3:That's right.
Speaker 2:For those that take it seriously, multi asset investing.
Speaker 1:And many people have been saying
Speaker 2:Interested by millions. And literally, like like, if you're bearish right now in the stock market, you should put your money in bonds. Right? Like, that's that's pretty basic. And there's no better place to do it than
Speaker 1:Not financial advice.
Speaker 2:But not
Speaker 1:financial advice.
Speaker 2:But you can express your opinion about the market anywhere, there's no better place
Speaker 1:to One of the crash outs from the weekend Yep. Was the Ackman, Bill Ackman Yep. Going off on on Lutnick Yep. For being long bonds. Yep.
Speaker 1:And so, you know, pick your pick your hero Yeah. And do your thing.
Speaker 2:Yeah. It was got it it got spicy on the timeline. Lots of back and forth. We're gonna dive into it. But I wanted to start with Ben Thompson on, sir Techar.
Speaker 2:He's back from vacation and not a moment too soon. He gives a good breakdown of the history here. I think we should dive through this because I think it's very, very interesting. So he says, pretend if you can that last week didn't happen. And imagine another scenario, China invades Taiwan.
Speaker 2:What happens then? Says he's not a military expert, but his assumption is that Chinese to to China would be successful. The biggest unknown variable would be time. If The US does not intervene, the conflict will be shorter. But if The US does intervene, the conflict will be longer and ultimately decided in a way that wars are always decided through industrial capacity.
Speaker 2:And that's something we've been talking about on the show a lot. We actually have an announcement from Anderol today and a and a and a friend from Anderol coming on the show to talk about it. It's all about just how many drones can you produce, how many bullets can you produce, how many ships can you produce. That's
Speaker 1:we're working with across the country. Yep. Or not the country, in this case, ocean.
Speaker 2:The ocean. Yeah. China China has a meaningful advantage in both areas given its relative manufacturing might and the fact that it would happen off their coast. They can make stuff right there and just send it on over. There are experts who disagree and concluded that The US would would repel a Chinese invasion, but at a heavy cost to US military forces and Taiwan generally.
Speaker 2:And it's crazy to think about that actually happening. Let's hope that does not get there because it'd be very, very disruptive to the global economy and everyone involved. But Ben Thompson says it would raise a more pertinent point. When it comes to the economic impact, it hardly matters who wins or loses. In both cases, China is effectively removed from from global supply chains and Taiwan's economic output, including chips from TSMC and others.
Speaker 2:That would all be destroyed. It's difficult to overstate the extent to which every aspect of modern life rests on global supply chains, whether you like it or not, which are so long and complex that no one truly understands the effects of messing with them. It has often, however, gotten easier to grasp the complexity in recent years. First, there was the bungled economic response to COVID where the temporal interruption in supply chains triggered worldwide supply shortages and contributed to global inflation. You remember, like, you couldn't get a car.
Speaker 2:And it's like, what does this have to do with washing my hands? But it's like, oh, well, like, actually, if you're locked down, there's trade and, like, you can't get the chips in the car, then you can't make the car.
Speaker 1:Yeah. And it's fascinating. The dealer markups you saw during COVID It's insane. Are basically back. But now, if the tariffs go out, you'll paying that markup directly to uncle Sam Yeah.
Speaker 1:Effectively.
Speaker 2:Yeah. And so, he gives a little bit of history. Last November, in the wake of president Trump's second election, he wrote a chance to build, obviously playing off of Marc Andreessen's a time to build essay. That title referenced the optimistic conclusion to a piece that was, if you read closely, a pretty pessimistic summary of the current trade situation with a special focus on tech. To summarize, The US leveraged foreign aid direct direct investment and and its consumer market to rebuild Europe and Japan after World War two and pegged currencies to the US dollars dollar, which was pegged to gold to do it.
Speaker 2:This started the cycle of foreign countries exporting to The US and buying US debt with the proceeds. Although The US's relative size to the rest of the world meant that The US still ran a trade surplus. By the 1970 by 1971, the system was about to collapse under its own weight, leading The US to depeg from gold, depreciate the US dollar, and dissolve the Brentwood system of currency controls. This led to a decade of pain, including including the oil shock of the nineteen seventies, but what emerged had a similar structure to the post World War two system with the US dollar as the reserve currency untethered from gold. And this was fascinating.
Speaker 2:I was digging into this this morning. I I think a lot of people don't understand the rationale for getting off the the gold peg. It's actually pretty intuitive if you walk through it. So, basically, what happens is gold is fixed. Like, there's not there's not a growing amount of gold.
Speaker 2:So you if you if dollars are pegged to gold, you can't have a growing monetary supply of dollars. Now why is that a problem? Well, when when the entire global economy is bringing new resources and goods online, like, they are discovering more coal and more oil and more trees that they're turning into furniture, and they're creating more value added goods. The economic value of that is all is all going up. Now what does that actually mean in practice?
Speaker 2:You would you would think it's like with Bitcoin, you know, you just use smaller and smaller fractions of Bitcoin. Right? But when you have when you have you have prices denominated in dollars that are pegged to fixed gold, what happens is that prices are going down over time. And so you have deflationary pressure. And so as a consumer, you're like, well, why would I buy this car today?
Speaker 2:It's gonna be cheaper in a month. And so you just don't buy it. And so you there's less that
Speaker 1:can stimulate the economy.
Speaker 2:It doesn't stimulate the economy. And so it seems like stupid because you're just like, why wouldn't we just fractionalize it? Like, a thing that costs a dollar, we have pennies. But really, it's like, well, if the if the true price is going down, down, down constantly, people won't hire because they'll be like, oh, I could pay less tomorrow. And so Yep.
Speaker 2:You've always wanted, like, maybe flat prices or maybe a little bit of inflation, but deflation can be very dangerous. And so that was the alternative. Now a lot of people say, oh, 1971 was terrible. It's this, like, awful moment, and a lot of things, like, stagnated after the fact. And I think all that's legitimate, but I totally now understand the rationale for breaking that peg, which I didn't before.
Speaker 2:This meant that there was inelastic demand for US treasuries, meaning that because of the trade system, no matter where The US price the treasuries, they'd be like, oh, yeah. Like, we're you we wanna issue a billion dollars of debt at 0%. People would be like, great. Inelastic demand. People buy it at any price, basically.
Speaker 2:And so this basically made it impossible for The US not to run a deficit either in terms of trade or the federal budget because there's just so much money flowing into treasuries because you have the lowest rates, and you're the and you're the the the global reserve currency. Still, this was maintainable given the size of The US economy to its trading partners. So, basically, you have a bunch of small countries that are just, like, buying your debt at any price and and hoarding dollars and just, like it's all good stuff because it's a bunch of, like, you know, small little minnows that are, like, just kind of doing, like, helpful things around the edge, basically. That's that's the way I think about it. But then he goes into China, which is obviously a much different dynamic.
Speaker 2:He says Yeah.
Speaker 1:So I can
Speaker 4:read this.
Speaker 1:Yeah. China is the skeleton key to understand so many oddities about The US's fiscal situation over the last fifteen years. In particular, how it is that The US's response to the Great Recession didn't lead to inflation. Chinese production was deflationary and their ever expanding trade surpluses created an ever expanding market for US debt, whether it be held by the Chinese national government, provincial government, state owned enterprises, etcetera. This inelastic demand also served to keep the dollar artificially high in defiance of the theoretical expected response to long running trade deficits.
Speaker 2:Yeah. So if you have a long running trade deficit, you'd expect that to kind of damage your economy. But because there's just so much more demand for the dollar and for US US debt, The the the music's never stopped playing, basically. This more than anything else is what hollowed out US manufacturing. The cost of cheap consumer goods, and seemingly inexhaustible capacity for US debt was shifting far, ever more manufacturing abroad.
Speaker 2:Yes. Things like lower costs and different labor standards played a role, but the structure of the world economy is what matters most. Indeed, China's labor costs are significantly higher than they used to be, but China's manufacturing dominance is actually accelerating, which I think
Speaker 1:is a very interesting take. Yeah. And this next part is key. So part of this is due to China's decision over the last few years to respond to the puncturing of its housing bubble by pushing resources into export oriented industries. Mhmm.
Speaker 1:Another part is the unfortunate reality underappreciated by apostles of comparative advantage that capabilities compound. Meaning that China is just getting better and better and better at manufacturing because they're doing so much of it.
Speaker 2:Yeah. Yeah. A lot of the comparative advantage, like examples in macroeconomics You're
Speaker 1:going to say comparative advantage bros?
Speaker 2:Yeah. Comparative advantage bros. Like, they they will tell you it's it's like, well, I make you know, you make shoes and I make hats, and we could both make shoes or hats at any time. But I make shoes slightly more efficiently than you make hats, so I'll make the shoes and you make the hats and we'll trade. And it's like, yeah.
Speaker 2:That's true. Until we get seven iterations of the global supply chain deep and all of a sudden we're using mirrors that are flatter than anything that's ever been created to bounce, like
Speaker 4:Yeah.
Speaker 2:Or liquefy tin and create, like, silicon transistors that are, like, so complex. You can't just be like, oh, yeah. Well, we do have, like, you know, Ford is still here. Let's just turn Ford Motor Company into TSMC. It's like, that's not gonna happen anytime soon.
Speaker 1:Or or the reality where I'll design the shoes, you make the shoes, and we'll just do that forever and we'll live in peace and harmony and then eventually says, well, actually, I'm gonna design the shoes and I'm gonna make the shoes. Yep. And then I'm gonna still expect you to buy them, but I'm also gonna do that for, you design drones and I'll make the drones. And then eventually it's, well, actually, I'm gonna design and make the drones now. And then you get into sort of some type of conflict and things devolve.
Speaker 1:Yeah. Which has been the big, one of the big reasons for reshoring I'll make a
Speaker 2:gun and you feed John,
Speaker 1:put away the squirt guns.
Speaker 2:I'll make a gun and you
Speaker 1:Put away the squirt guns, food
Speaker 2:and you're gonna pay what you what I ask. You're gonna
Speaker 1:take much We're gonna confiscate the squirt Very
Speaker 2:interesting story from Steve Jobs here meeting with Barack Obama and advocating for kind of re industrialization. Jobs is the original reindustrialization brow, basically. You know? He would have been keynoting it Reindustrialized.
Speaker 1:2025.
Speaker 2:For sure. So, basically, Obama and Jobs get dinner sometime. It was it's from the Steve Jobs biography by Walter Isaacson, so it must have been in the early two thousands, like 02/2008, '2 thousand '9 time frame. But Jobs goes to Obama and says, hey. We we we have 70,000 factory workers in China, and we need 30,000 engineers on-site to support those workers.
Speaker 2:You just can't find that many to hire in America. These don't have to be PhDs or geniuses. They just need to have simple basic engineering skills for manufacturing. Tech schools, community colleges, trade schools could train them. We've gotta find a way to train these, 30,000 manufacturing engineers.
Speaker 2:And so, basically, Steve Jobs keeps pitching Obama like, hey. Let's bring manufacturing back. We can do it, but it's a skill issue. And Obama keeps telling him all these different ways that, like, legally, it's impossible to do, and they just get very frustrated. And so Obama basically says, like, hey.
Speaker 2:The only way we could do this is
Speaker 1:That's one thing about Trump. He's not historically been too worried
Speaker 2:about rules.
Speaker 1:About what the rules say. You know?
Speaker 2:And so Jobs finds this annoying, and it's an annoying example of how politics can lead to paralysis. The president is very smart, he said. He kept explaining to us reasons why things can't get done. It infuriates me. And then Ben Thompson goes on to say, I think jobs had cause and effect backwards, though.
Speaker 2:There's not 30,000 manufacturing engineers in The US because there aren't 30,000 manufacturing engineering jobs to be filled, and that's because of the structure of the world economy. And so what Ben Thompson, I think, is getting to here is this idea that it's like, yes, you could go bottom up and say, let's let's create more schools to train more engineers, and then the and then companies will say, hey. Actually, it is doable to to to build here. But maybe you need to go top down and start with the trade dynamics and the structure of the global economy. And so he goes back in time and looks at what happened with Nixon and goes back to that 1971
Speaker 4:Yep.
Speaker 2:Ending of the Bretton Woods situation and says this this all started with Nixon closed the gold window, instituted price controls, very controversial, and imposed a 10% import tax. And it's very interesting because with the Nixon example, the it was a PR masterpiece, and the market loved it. But it was later re like like, later analysis kind of shows that it was, like, extremely chaotic and, like, not great for, you know, kind of flipping the table.
Speaker 1:Easier to control the narrative when there was newspapers, television, radio, and official Yep. Wires going
Speaker 2:into the White House. Yeah. And so that that's exactly what they did. Like, this treasury secretary John Connolly at the time packaged the whole program, this new deal, this new structure that they were gonna roll out as America. We we weren't abandoning the commitment to the gold standard, which again, like, had said, like, we're we're this is a commitment, basically.
Speaker 2:Like, we're gonna exchange dollars for gold one to one, but this is America taking charge. He turned the dollar's collapse, which could have been shameful into a moment of hubris. The emphasis would be on writing America's trade balance as well as minor points such as a 5% cut in foreign aid. William an aide to William p Rogers, the secretary of state called and interjected, you can't cut foreign aid. Connolly said, tell him if he doesn't shut up, we'll make the cuts 15%.
Speaker 2:Aggressive. Schultz muzzled his disquiet over price controls. Even Byrnes joined ranks. The group feverishly debated whether whether Nixon should address the country on satur on Sunday night, which would mean preempting the popular show Gunsmoke, which I've never heard but I guess it was like what everyone it was the all in
Speaker 1:of the day. So while. I mean, yeah. Last night we had White Lotus. Yeah.
Speaker 1:And many people were hoping that Trump would make some type of announcement over the weekend. It didn't come. I think he didn't want to disrupt quite Lotus. That was
Speaker 2:probably it.
Speaker 4:Probably
Speaker 2:it. And so the public relations aspect was paramount. Stein wrote later that the discussion at Camp David assumed the attitude of script writers preparing a TV special. No one pretended to know how controls would work. The question was scarcely debated.
Speaker 2:Addressing the nation on Sunday, Nixon blamed current currency speculators and unfair exchange rates rather than US mon monetary policy. Politically, he hit the jackpot. Wow. Monday's, rise in the Dow was the biggest ever to that point. Nixon's new economic policy drew raves from the press.
Speaker 2:The The New York Times said, we unhesitatingly applaud the boldness with which the president has moved. What a throwback. You don't hear that about today's stuff. Yeah. Only from, like, a very few people, a very small cohort of supporters.
Speaker 2:In the present era, America's inability to repair its fiscal problems tarnished its credibility and hampered currency negotiations with China. So the end of the end of Bretton Woods was probably inescapable, but it's worth pointing out that the Nixon shock was an economic disaster. The country endured a decade of drastic inflation. This is like the stagflation era where we weren't really growing, but there
Speaker 1:was a
Speaker 2:lot of inflation. And this is only cured with sky high interest rates. I think the interest rate got up to, like, 15 or 17%. Mortgages were super expensive. Just think about how painful that would be.
Speaker 2:We've, you know, we've lived with like, oh, high interest rates are 8%. It's like, it can be so much worse. And there's a massive recession. Volker, Paul Volker, was the guy who instituted the shock. He was on the team with Nixon, then he cured it, and then he became the the chairman of the Fed, I believe, later or the treasury secretary later.
Speaker 2:In other words, the reaction of the market and the press was totally wrong. And so I think what Ben Thompson here is getting at is, like, it's possible that this is happening again, and you need to at least consider that both the reaction from the press and the market could be wrong. I'm not a % on board with that, and I don't think even he is. But it's a very interesting, like, historical example to pull from just to because it's very easy to say, okay. You know, the the the media hates this, but, of course, they do because they don't like Trump.
Speaker 2:And Trump says it's great, but the but let's go to the market because the market's always right. And may and but the market was wrong then, and so maybe that's the case here. It's it's very interesting. I I still don't exactly know where I sit with it, but that's why we're doing this show, and that's why we're talking to so many folks today to hear different points of view. The question is if what happened last week ought to be compared to the Nixon shock or contrasted.
Speaker 2:Certainly, reaction is a contrast. Everyone hates Libertation Day tariffs, including the market. And we saw, like, Tyler Cowen's post. He's coming on the show next week. You know, Tyler Cowen had 25 bullet points why he was stupid, and and a lot of them were very convincing.
Speaker 2:Moreover, the Trump administration's rollout has been the very opposite of a PR masterpiece. No one in the administration can seem to agree about what exactly the goal was or what success looks like. And then even today, there was, like, a leaked story that they might go back on them and then the White House had to come out and say like, no, we're not going back on.
Speaker 1:Well, it wasn't a leaked story. It was somebody
Speaker 2:It's fake news.
Speaker 1:One of those big accounts that shares the breaking headlines, Walter Braum Bloomberg.
Speaker 2:So fake account. Yeah.
Speaker 1:Took somebody asked a question on CNBC that said something to the effect of will will, you know, president Trump, you know, putting a ninety day? And he just was like, boom. Hit he hit the timeline with it. President Trump considering a ninety day, you know, temporary pause on the tariffs.
Speaker 2:And and it actually moved the
Speaker 1:market because the market jumped Moved the market massive.
Speaker 2:And then went down another 5%.
Speaker 1:It was We were in the gym and we looked at our phones and we thought, wow, we might be back.
Speaker 2:Yeah. And then
Speaker 1:we in fact were not back.
Speaker 2:Yeah. I really think, you know, this is the technology business production network. I do think that the fact that the technology comes first is important. Like, I this is a very important story. This is a business story.
Speaker 2:This is a finance story. There's some politics in here, of course. It's important for everyone to understand, but I want to get back to talking about talking about tech so badly. Like Friday's show was amazing talking about AI and that stuff's just way more interesting to me. But this stuff's this stuff's very important.
Speaker 2:So we're so we will we will go through it and cover it. So what Ben Thompson comes back to and what he opened with is that there is a scenario within the realm of possibility that is far more painful than anything Trump proposed. Is it better to try and force into place a new economic system that in least in at least in theory reduces dependency on China and resuscitates US manufacturing now instead of waiting for the current system to collapse by literal force? This does seem to be the administration's goal. Simply terrifying simply tariffing China is deadweight loss, leading to rerouting and the fundamental problem of the dollar as reserve currency unaddressed.
Speaker 2:Blanket tariffs, on the other hand, are a valid if extremely blunt and inefficient way to meaningfully re instruct restructure incentives. And so we've seen this with, you know, this even before there were major tariffs on China, there there there was just like a there there was just a rational business decision to say, hey. Maybe you don't wanna be 100 indexed on China for a variety of reasons. And so Yep. You know, we saw even Apple.
Speaker 2:They make AirPods in Vietnam. Well, now they really have to consider what can they do to make products in America. And the economic equation is like, yeah, if it's gonna be 30% more, like, that could be meaningful over a long period of time. And the thing that I keep coming back to is like, the market is in turmoil. It's dropped like 15%, and I do really feel bad for everyone that's lost money.
Speaker 2:And it is very serious. Like, I do think that there are, like, main street people with pensions and all sorts of retirement funds. It is very harmful. It is very But there is a world where you build that back up in the markets pretty quickly because you get a new AI narrative or you get something that, like, everything rips or interest rates go down. Like, I've seen 50% gains that are coming on.
Speaker 2:But if but if this like 50%, twenty five % tariff Yeah. Like, if this new tariff regime sticks around for years, like that will actually Yeah. Inform and change Yeah.
Speaker 1:There is there is a general feedback from the market and from people online that they're saying that they're saying it's a bad idea after looking at the market's reaction in a couple days. And what Ben Thompson is saying here is that basically, we're going to need to judge this in the fullness of times. Like, yes, the rollout was poor. Yes, the market hates it But if we're avoiding something that would have was bigger and more spectacularly terrible Yep. Than it actually could be worthwhile.
Speaker 1:Yep. And it's funny to contrast it to to Brenton Woods and Nixon's rollout because, again, like you said, the market liked it
Speaker 4:Yep. But then
Speaker 1:it ended up being bad. And so, you know, short term market movement is not necessarily always going to be an indicator for long term success or viability of policy.
Speaker 2:Yeah. Yeah. It'll just be, it'll just be very important to follow like where this actually goes. And I think one of the interesting I I I I kept I kept coming back to, like, okay. If I'm being, like, cautiously optimistic about this stuff, it feels, like, I would say, like, high risk, high reward maybe, or high risk, medium reward is kind of as I was thinking.
Speaker 2:Like, high risk high reward is kind of the natural thing, but then I was thinking about it. I was like, well, the the high reward is really like we slowly build up industrial capacity and GDP grows a little bit. It's not really like, oh, all of a sudden, we just, like, win everything in America. Like, amazing. It's like, no.
Speaker 2:We're, like, on a slightly better trajectory. So I would say that's, like, medium reward. But then I was thinking, like, is it really high risk? It's like, well, part of the problem here is that and and part it's not really high risk because if it gets really bad, he can just say, with the stroke of a pen, like, it's it's over. Like, I'm rolling it back.
Speaker 2:Like, he could do that. Sure. And so the downside risk feels not so bad as opposed to,
Speaker 1:like The question is what breaks during the negotiation period. Right?
Speaker 2:Totally. But like but like previous crashes
Speaker 1:Yeah.
Speaker 2:Were very much out of the control of the president where, you know, in the .com crash, it's not like the president could go out there and say, like, actually, yeah, AOL is worth the trillion dollars or whatever. Right? Or like COVID, like, because it actually Leading around
Speaker 1:into AOL at 202 times revenue.
Speaker 2:Yeah. Yeah. Yeah. Exactly. Exactly.
Speaker 2:So I don't know if we should close out with his conclusion then move on to the timeline because we had about twenty minutes.
Speaker 1:Yeah. The the one thing that comes to mind, and we'll probably get into this in the timeline, but so Chamath was doing quite a bit of lying over the weekend. He kept getting caught lying. The Internet was being very diligent, but one thing he's posted, which I didn't notice is he's been orienting the narrative around the Mar A Lago Accords.
Speaker 2:Yes. Yes. Yes.
Speaker 1:And so This
Speaker 2:is the thing.
Speaker 1:This entire time, to be clear, David Sacks has been silent. JD Vance has been But the sort of the Mar A Lago Accords. Right? So so if Trump is the deal guy and he lives to do deals
Speaker 4:Yep.
Speaker 1:And he did every deal there was to do in sort of business and crypto and social media, you know, and and real estate or whatever. And the final deal is like the new, you know, the new sort of backbone for the global economy. Then and and and normally I would discount what Chamath would say, but because he had that call on bonds earlier, you remember you were talking about this where he was like
Speaker 2:For default swaps.
Speaker 1:Yeah. Right. Right. Right. I think it's totally possible that there's a lot that the administration could be angling towards that they're not able to really talk about.
Speaker 1:I believe that Chamath would leak it basically order to try to position himself, be like, I call this.
Speaker 2:This a very so so we invited Chamath on the show. Hopefully, he'll be able to join. I don't know what he'll be able to say. It is interesting because he he does not, to my knowledge, have an official position in the administration. Right.
Speaker 2:But he obviously is extremely close with David Sachs, who does have a position in the administration. Yeah. And Chamath has been to, you know, all these different organization events and, like, he's clearly tapped in. And so if you think about, like, hey, we need to, like, send out some messaging, but it can't really come from us. Like, having Chamath post messaging might make sense.
Speaker 1:Of how
Speaker 2:He can be surrogate.
Speaker 1:Regardless of how anybody any one person feels about Chamath, he has a huge following right Yes. Among a bunch of major investor types. Yep. And even if they don't respect everything he says or
Speaker 2:They should be reading into what he's saying Yeah. Because he does have information
Speaker 1:Based on his position.
Speaker 2:Yeah. So it's very very interesting. I don't know. Well
Speaker 3:well Yeah.
Speaker 1:He's also had he's been interviewing Lutnick and Yeah. Besson and everybody. I imagine they're having conversations on air. They're having conversations on air. They're certainly having this, you know, similar conversations off air as well.
Speaker 1:So
Speaker 2:Yeah. I mean Who knows? You should go read the full Ben Thompson piece. You can go to Struteckery and sign up. I it's it's in the everyday carry of every tech person in my opinion.
Speaker 2:He closes with a couple interesting conclusions. There's some there's some knock on effects. Apple services business is not subject to tariffs, which is to say that it will become even more important to Apple's bottom line. That decreases the likelihood that Apple transforms its relationship with developers, which is the most which he thinks is the most promising opportunity for
Speaker 1:AI stop. Really flip their model and make it so that it was, like, $200 for the software and, like, they basically give you the hardware for free? Yeah. And Well,
Speaker 2:they're basically doing that. If you've looked at the price of the iPhone on an inflation adjusted basis, it's not going up by as much as it should. Yeah. And and it's it's held very steady because they make so much money off of services. I mean, you get a new phone, and there's, like, 25 different calls to action to buy, like, Apple Health, Apple News, Apple App Store stuff.
Speaker 2:Subscribe to this, Apple TV plus. And then also every app they get 30% of. And and and and that's why they're not giving up the Siri button even though it would make so much sense. It's because, like, yeah, this button is gonna be auctioned for a trillion dollars, basically. OpenAir has gotten paid Something like that.
Speaker 2:Because this button is gonna be the next Google like, when you go to Safari and you type in just, you know, like restaurant near me, it goes to Google and Apple gets paid for that. It's gonna be the same thing with the hardware button here. But it would be a lot cooler if it was more of a free market for that button and for the ecosystem. And, certainly, it seems to be stalling the Apple Vision Pro with developer hesitation. There's lot of stuff there.
Speaker 2:And then they also have, some interesting takeaways on the advertising based businesses. Meta, Google, Amazon will also be negatively impacted. Lots of cheap products mean lots of advertising, much of which could disappear. Could this mean an a return of app install advertising like mobile games? If ecommerce advertising decreases, lowering prices overall, we gotta get Sean back on the show from Ridge Wallet to give us the breakdown of how how people are thinking about this in ecommerce after all this settles.
Speaker 2:But, you know, so what is my optimistic spin? So what of my optimistic spin last November when I called my tariff preview a chance to build? Well, my skepticism is keeping with the pessimism embedded in that piece. It's a lot easier to build from scratch than to retrofit something that exists. That applies to companies just as much as countries' economic orders.
Speaker 2:I'll be cheering for the startups that seize this opportunity. I'm sympathetic to incumbents looking at guaranteed costs with very uncertain rewards. Rough. Well, if you're feeling upset about the tariffs, you should just treat yourself to a nice weekend on Wander.
Speaker 1:That's right.
Speaker 2:Go wander.com and find your happy place.
Speaker 1:There's no tariffs on Wanders.
Speaker 2:That's true. Book a wander with inspiring views. Hotel great amenities, dreamy beds, top tier cleaning, and twenty four seven concierge service. It's a vacation home, but better folks.
Speaker 1:Do it. Some news CodeTBPM.
Speaker 2:Industries. They launched Copperhead, Andoril's high speed software defined family of AUVs. The US and its allies need scalable autonomous subsea weapons that can be rapidly deployed to meet the demands of modern naval operations. And, yeah, it looks like a torpedo. It's pretty amazing, except it's square.
Speaker 2:So I wanna know about that. They seem to be taking everything that's round and making it square. Have you seen the the Ghost Shark, their submarine?
Speaker 1:Ghost Shark. So cool.
Speaker 2:Yeah. It looks really cool.
Speaker 1:It's like a VW bus.
Speaker 2:And I think that's because it's easier to transport and you can stack them and stuff and fit them in. But I I don't even know. I one of the Andrew old guys, and they were like, I don't know why it's I was like, they were like, ask one of the engineers, you idiot. Well, was like, mean, that that's the first question I would ask. If if he if he doesn't answer it, I'm gonna be like, man, it's a mystery.
Speaker 2:But it looks really cool. Copperhead is built for speed, ready to carry advanced payloads, and integrates seamlessly with autonomous systems. The first two models, Copperhead 105, offer different payload capacities and ranges for commercial and defense. Our munition variant, Copperhead m, equips autonomous vehicles with torpedo like capabilities at a fraction of the cost. Critically, it's mass producible.
Speaker 2:And so, yeah, this is, one of the beneficiaries of tariffs and trade war, more defense, more manufacturing in The United States, and it's it's odd that this is where this is the most high-tech this could be the most high-tech product made in America when you think about it in terms of like, hey. Is this thing more complicated than an iPhone to manufacture? Like, maybe.
Speaker 1:It's out It feels like American manufacturing really comes down to having vision, incredible willpower Yep. And incredible ability to recruit Yep. Amazing talent because Elon's done it. Yep. Andrew Earl's doing it.
Speaker 1:It clearly is possible. Yep. But it takes incredible power effectively to
Speaker 2:actually Yeah. It's also interesting that we're kind of going maybe in reverse here. Like in World War two, we had all this industrial capacity from the from the from the automobile industry. Ford and Chrysler wound up pivoting and making tanks, and there was a there was a, I think, a Ford manufacturing plant that was pivoted to, making bombers. It took them three years.
Speaker 2:And here, I think the good ending is like Andoril secures the global order and then, hey, it's time for you guys to make some iPhones. Like, you guys got all the best engineers. We want you to just make some, like, consumer drones. And we kind of joked about that where it's like, hey, they make all these drones. They keep us safe, but you know, I still want a I still want an FPV drone to fly around.
Speaker 1:No. And there there there definitely is a Tesla like mafia. Totally. Totally. The CTO of deterrence, we had Drew on the show a couple weeks He was in worked in manufacturing at Tesla specifically on on their battery cell side.
Speaker 1:Now he's working in defense. Right? And so we just need winners to win and then distribute out talent into other industries.
Speaker 2:Well, speaking of talent, Andoril ran a great advertising campaign for Don't Work at Andoril, trying to weed out all the folks who don't believe in their mission. And they bought a bunch of billboards. So if you're looking to buy billboards for your company, build your culture, go to adquick.com.
Speaker 1:Home advertising advertising made easy and measurable.
Speaker 5:Oh. Did you know that?
Speaker 2:No. Thanks for letting me know. Would it be possible Really?
Speaker 1:To hearing you're hearing that for the first time?
Speaker 2:Because I I have a lot of headaches about out of home advertising.
Speaker 4:Yeah.
Speaker 2:I be able to say
Speaker 4:goodbye to those?
Speaker 1:Yeah. You can say goodbye
Speaker 4:to them.
Speaker 3:That'd be great.
Speaker 2:I'd love to say goodbye to the headaches of out of home advertising. Only AdQuick combines technology, out of home expertise, and data to enable efficient seamless ad buying across the globe.
Speaker 1:That's right. Go to
Speaker 2:adprint.com. Should we should we review this this Chamath post to kinda give some context on his position? My current best view? Because I think this is
Speaker 1:just one position.
Speaker 2:This is one this is one position. He says, Trump lets tariff reactions play out for the few weeks, sees the trend of capitulations, and is emboldened to keep going. He fields offers from everyone, negotiates with no one, then brings everyone to Mar A Lago in a month or two and puts an offer on the table. Bretton Woods two point o, it's simpler and more effective to have one grand bargain than negotiate piecemeal with 80 countries plus. I am focused on figuring out what terms matter most for the MAL Accords, Mar A Lago Accords.
Speaker 2:I have a few in mind that are which are obvious and would king make The US. I don't buy the whole end of US hegemony. This is the moment to go for the jugular and establish world order around America. So he's very optimistic that this ends well, but we we will see. Who else should we cover from the timeline?
Speaker 2:Because the timeline's been in turmoil. This the Walter Bloomberg pump occurred from 10:13AM to 10:48AM.
Speaker 1:It was glorious.
Speaker 2:Joe Weisenthal documented on the timeline to the tune of 7,000 likes.
Speaker 1:You have to wonder, could this have been, you know, the the default is that it was just a total accident. He just, like, wanted to be the first person to post. I don't I don't know who runs the account.
Speaker 2:Yeah.
Speaker 1:Yeah. It's somewhat anonymous. But it's totally possible this was, like, coordinated. Right? These accounts don't monetize well.
Speaker 1:Like, the the the ad rev the ad revenue that he gets from, you know, posting headlines is probably, like, $3,000 a month. Sure. Sure. So it's just like not super meaningful hedge fund, you know.
Speaker 2:I don't buy it. I think it's just accidental.
Speaker 1:Accidental.
Speaker 2:I think it's just somebody just No.
Speaker 1:I'm just saying like you have drip. It was such a Yeah. I'm just saying the default default Yeah. Is that it was just an accident. Yeah.
Speaker 1:Yeah. But it could have absolutely been
Speaker 2:The funny thing is that, you mean, you mentioned hedge funds. For some hedge funds, it doesn't even matter because they just see the trading volume go up and they make a whole bunch of money during volatility. Like like, I'm sure Jane Street printed during this pump on both directions. Right? Insane market action right now.
Speaker 2:Market exploded on a headline attributed to Kevin Hassert, and now nobody can figure out where it came from, and the markets are diving again. An 8% surge and then a 3.5% plunge in a matter of seconds. Anyway, you wanna make sure that your expenses are plunging with ramp.com. Time is money. Save both.
Speaker 2:Just use corporate cards, bill payments, accounting, and a whole lot more all in one place. Go to ramp.com. We like this DJ Cats host.
Speaker 1:I wanna have Ramp's head economist.
Speaker 2:Or Carazian. I'd love to have him come on.
Speaker 1:On the show.
Speaker 2:Yes.
Speaker 1:I think it'll be next week Yep. At this point just to break down what they're seeing across the Ramp ecosystem.
Speaker 2:Yeah. The Ramp economy. Like these leading indicators. There's this whole idea of like, you know, the market is a leading indicator. It'll eventually show up in GDP, but there's a lot of things in between that we want
Speaker 1:to look at,
Speaker 2:like venture flows and what's what's going on on AngelList and and our funds sizing up or sizing down. During the SVB crisis, we saw a lot of VC funds pull back. Are we there yet? Are we even getting there? And then what are consumers and businesses doing?
Speaker 2:R. Krazian breaks it all down in his, economic reporting from RAMP and has fantastic data. Let's go to DJ Cows. The market crash looks so much nicer in Ghibli. This is a ridiculous chart.
Speaker 2:This can't be real. I mean, maybe maybe this is if you zoom out enough. It's really steep though. I think it might have taken some some liberties. In fact, at the end, it looks like it's going backwards in time.
Speaker 2:Not great.
Speaker 1:Looks a little dramatic.
Speaker 2:But some green shoots. Nvidia is up 9%. There we go. 39.
Speaker 1:There we I don't know if it's data. It's actually up 4.7% today. Is Not bad. Still down almost 9% over the past week.
Speaker 2:Mhmm.
Speaker 1:But we like we like to see a little green.
Speaker 2:Yep. We got some news out of Taiwan. Taiwan does not seek retaliatory tariffs against The US. Instead, we'll start talking from bilateral zero tariffs to ensure Taiwan's competitiveness will increase US US imports and adopt other measures. Working together will usher in a golden age of shared prosperity.
Speaker 2:You'll love to see it from
Speaker 1:our friends
Speaker 2:over in Taiwan. Yeah. I mean, I think this is where everyone wants to get. And Yep. But it's interesting.
Speaker 2:I I was talking with a friend today and we were both kind of lost on like, you know, what is the tariff take? He was just saying, I just want less regulation. Like, I want Yeah. I want this to I want that
Speaker 5:to
Speaker 1:be So so Doug Demuro
Speaker 4:Yeah.
Speaker 1:Actually had a great take
Speaker 2:Oh, yeah.
Speaker 1:Because he is in the automotive industry. Obviously, if you're in the business of selling new cars, you gotta be really frustrated with the tariffs because Doug just compared it to the dealer markups that we saw during COVID. It just became really hard to make cars, move them around the world. And interest rates were super low. People wanted to, you know, and the market was ripping.
Speaker 1:Right? You remember G Wagons were like 350 k for like a $200,000 car. And he basically steal, but Yeah. Still giving it away. Other You're
Speaker 2:gonna need some other
Speaker 1:No. But he basically said, you know, The US was based around
Speaker 2:The Hummer EV was trading for, like, 200 k. Yeah. And now it's like down at 60.
Speaker 1:Where it where it should be. No. But he he basically said, you know, the the the in many ways, The US was like founded on this, you know, the ideals of like free trade Yeah. And capitalism and letting, you know, the market do its thing and, you know, tariffs are taxation. Yep.
Speaker 1:It's protectionism Yep. Which is like against like the entire ethos of like The United States was basically, at least looking back was like, let's win by being the best. Yep. Not and so again, he he's obviously biased from being in the automotive industry, I think that's generally like tariffs being un American is like gen generally It's a good take. That's a good take.
Speaker 2:Yeah. I I also I was talking to a hedge fund manager a year ago during the inflation crisis, and he was talking about, like, you know, when there's, like, too much money flowing around, you you need a place for that to just, like, die. You need the money to die.
Speaker 1:You mean stop moving?
Speaker 2:Stop moving, but just, like, just, like, get sucked out of the economy when the economy is, like, overheating.
Speaker 1:Yeah.
Speaker 2:Right? And so he was like, taxes, like, the IRS or, like, tariffs, which are a form of taxation, is, like, where money goes to die because the money, instead of going into the pocket of, like, a business person that can, like, immediately deploy it or even just a consumer. Like Yeah. A worker can go take the money and immediately deploy it. When it goes into the government, it's often used for, like, such, you know, like, such inefficient means that Yeah.
Speaker 2:Like, funding set history in Iraq. Yeah. That basically, like, it really, really slows down the economy. And and so I I think the the Trump folks have been kind of signaling that, like, okay. If this works and we're generating more money from tariffs, like, we'll do a tax cut, which I think would kind of pare that down.
Speaker 2:But in general, there's
Speaker 1:lot And then we're gonna
Speaker 2:Cut. Cut. It's a tax cut. Increase taxes, increase cuts. Yeah.
Speaker 2:Tax debts.
Speaker 1:We're simultaneously increasing and decreasing taxation.
Speaker 2:I mean, it's it's that's when you put it that way, but it is possible. It's just like, yeah, it it it it's just like, you know, where where does the money get taxed from? Where does it go to?
Speaker 1:You
Speaker 2:know? You can tax from a bunch of different places, and you can cut from a different bunch of different places. But Andrew Reid posted, so turns out the weeks where decades happen happen a few times a decade. And I, I asked him, when's the new Sequoia memo dropping? Because, Sequoia famously dropped the, Black's, RIP Good Times memo at the end of the financial crisis, or the housing crisis, which is a very detailed macroeconomic analysis of where the American consumer was and kind of calling upon all entrepreneurs to gear up for a very different market going forward.
Speaker 1:Yep.
Speaker 2:And then when COVID happened, they dropped the a black swan memo, which was also very well received telling founders, hey. Buckle up. Interestingly, the black swan memo was kind of, like, too soon because the market ripped, but a lot of those lessons were later applied very accurately to the SVB crisis. And if you were running a venture backed startup with twelve to eighteen months of runway coming into the SVB crisis, like, you needed to move very quickly to know that, hey. Hey.
Speaker 2:You weren't gonna raise another round in, I think, was 2022, '20 '20 '3. Yeah. Things were getting rough, so you needed to buckle down. And the companies that did made it through and the companies that didn't went bust. And so I'm sure we will see a lot of interesting takes from venture capitalists.
Speaker 2:We have some on the show today to break down what we think entrepreneurs should do in this case. It's a weird scenario. It's it's half, you know, wait and see right now. We're only a couple days into the crash. But if this sustains and the GDP starts dropping, like, you could see even if you're selling B2B SaaS, people are saying, hey.
Speaker 2:I'm trying to tighten my belt. Right? I'm trying to stretch my burn. I maybe VCs aren't gonna fund me. Maybe there's gonna be, you know, the the requirements that we're gonna you're just gonna see less froth in the market.
Speaker 2:And so that requires a different type
Speaker 1:of management. Anyway And it's such a fascinating time right now because it seems like all of the attention that artificial intelligence was getting
Speaker 2:Yeah.
Speaker 1:Like, just, you know, evaporated. Right? Yeah. Yet if you're heavily in the industry and you're seeing the impact of it and you're seeing the power of it and you're seeing the progress it's making, even if it's, you know, maybe not doesn't feel like it's quite accelerating, you know, maybe like it was Yeah. Six months ago.
Speaker 1:It's still if you're in a private markets investor, you have to be extremely bullish on a number of new investment opportunities despite sort of like macro backdrop.
Speaker 2:I mean, speaking of it is a fascinating time. And speaking of fascinating timepieces, you should go to bezel, get bezel.com. Shop over 24,500 luxury watches, fully authenticated in house by Bezel's team of experts. And, you know, on a day like this, you just wanna look down at a at a fantastic timepiece and remember that things will always look up eventually. There's always a bull market somewhere.
Speaker 1:And Trump's Trump's a Vacheron guy.
Speaker 2:Yeah. He
Speaker 1:is. I don't Historique. Yeah. I Historique. I don't expect the 31% tariffs on Swiss To sold.
Speaker 1:Watches.
Speaker 2:That's gonna be the first one to fall off.
Speaker 5:That's gonna
Speaker 2:be the first one
Speaker 1:to go.
Speaker 2:For sure. Okay. We got our first guest from Andoril. Shane's in the studio. Welcome to the show, Shane.
Speaker 2:How are doing?
Speaker 3:Boom. Hey, John. Yes. Thanks.
Speaker 2:They're they're good. You know, the market's melting down. It's a little chaotic, but, a lot to talk about and a lot of interesting, opinions flying around on both sides. Hopefully, things are doing better for you. Massive launch today.
Speaker 2:Congratulations. Can you break it down for us and maybe introduce yourself as well? Thanks a lot.
Speaker 3:Yeah. So we're at the world's biggest navy trade show Cool. Here in DC. So the sea air and space conference, and we're in the dive Mhmm. I know
Speaker 4:you can see behind me now.
Speaker 3:Nice. Nice. Guys are epic. So
Speaker 4:I love it.
Speaker 3:Yeah. So we've got in the dive bar. So my name's Shane Arnaud. I'm the senior vice president for maritime business line here in at Andrews. So, yeah, really, really, really big conference for us and two brand new products, Seabed Century Compahead going public today.
Speaker 3:So Mhmm. Yeah, it's pretty cool.
Speaker 2:Can you, let me maybe let's start with Seabed Century. What what was the genesis of the project? What's the need? And then what is the what does the product actually do just for, a layman? Can you hear me?
Speaker 3:Yeah. So Seabird Century is about undersea awareness, if you will. So hopefully, am I coming through okay for you
Speaker 6:guys? Yeah.
Speaker 3:You're Yep. Great. So it's pretty crazy. Like, if you zoom out, like, as as a species, we know less about the seafloor than we do about the moon or Mars. Like, some 70 to 80% of the seafloor is uncharted, which is crazy.
Speaker 3:So it's a good place to hide if you're a submariner. It's also a good place to hide if you're the threat. So we kinda created this system, if you will, to be able to bring light to the deep, dark sea, if you will. So you look at kind of vast amounts of infrastructure, say, 80% oh, sorry. 90% plus of, Internet traffic.
Speaker 3:So this particular podcast would be running across subsea cables. Yeah. Many nations have their gas lights under the, the waves. These are broadly unprotected, unwatched, right now. So the greatest vulnerabilities are below the waves, and no one's really talking about it or working on it apart from some super secret things, and we kinda think that's wrong.
Speaker 3:So Seabed Century was kinda it came from that place, as you know, around the drill. We can invest our own money, put points towards things that we care about, and we believe this is a big issue that people should be working on-site it's Seabed Century.
Speaker 1:Is Seabed Century, do you expect, you know, DOD, our allies, etcetera, to be the the main buyers or is this the kind of thing if you are in the business of laying undersea cables, Would would, you know, those types of companies be customers as well, or is it purely defense, applications?
Speaker 3:No. We we definitely see it as dual use like anyone who's got energy infrastructure. One of the the key things I will lay out is this is a caballess system. So it's completely wireless. So all the all the systems, as you guys probably know, are Cold War era.
Speaker 3:You need big cabling ships to put these systems on the sea floor. Almost impossible to upgrade. These are completely wireless, fully electric, and you can place them in the ocean. Specifically, we can use some of our autonomous submarines. So you can place them covertly or clandestinely, which isn't a bad idea if you're setting up security cameras and the bad guys know exactly where all your surveillance systems are.
Speaker 3:Kinda defeats the purpose a little bit. So this approach is is different thinking, if you will, that we can place them anywhere on the planet. We can get one of our submarines, and you can place it with all sorts of different payloads in in the body of it for long range surveillance, listening, for other actions that you might be taking as well.
Speaker 1:Can you talk about the broad risk of undersea drones? You know, I imagine it's the same type of dynamic as, you know, traditional, you know, air based drones and that you could send a 10,000 drone to destroy, you know, a pipeline that that could cost a billion dollars or or cause a billion dollars of economic damage. And so the whole ratio is pretty pretty thrown off and and but but I'd be curious like, is it something that's not getting enough attention? Because it feels like right now, kamikaze drones and and everything in Ukraine is sort of like dominating the narrative. But clearly, guys are have found this important enough to to put a lot of r and d into
Speaker 3:it. Yeah. The maritime environment's been kinda slow to the punch, to be honest. Like, you you look at the proliferation and the success of robots in the Ukraine conflict, and everyone looks back now and goes, yeah, of course, this was a better idea. Then you also see kinda crazy things like Patriots being used to drop, UAVs that are a tenth or a hundredth of the cost.
Speaker 3:The the unit economics of that exchange just doesn't make any sense. So Yep. Maritime domain, just on the military side, exactly the same. There is a proliferation of unmanned underwater vehicles, primarily from the Chinese and the Russians, also unmanned surface vehicles as well. And if you're going to utilize and this is probably good segue to the Copperhead, which is the the next thing that we announced, which is a fast, flexible payload, AUV, which could be, made into a munition, so a torpedo, if you will.
Speaker 3:That particular system is built to be at a fraction of the cost of, say, like a mark 48 or a mark 54. These are very prevalent torpedoes for bigger listeners who aren't familiar with that. But when you're launching a mark 48 against a USB, that's like 10 to the cost. The economics don't sort of work. So we've specifically built these things to be at a price point that's fraction of.
Speaker 3:We can also build them at, thousands per year, whereas kinda right now, you may be lucky to get a 200, torpedoes out of a supply chain as it exists today. And, again, that that exchange ratio just does not work against kind of the fight that we're basing into. So the Asia Pacific fight with, with China, clearly, that's a water based, conflict that's coming. But, also, people don't talk a lot about the High North. So and that's where Russia is dominating.
Speaker 3:So, you know, there's a lot of great stuff, sitting under the ice that's now retracting. Everyone wants a piece of that. You know, some of the discussion around Greenland and others is the basis of why the High North is kind of the next focus, if you will. So having these capabilities that are fully electric so we can get them under the ice caps, for instance, is of interest to folks. The ability to do it at on mass affordably in order to kinda deal with a very wide border front is kind of the basis why we invest in these capabilities.
Speaker 2:Can you talk a little bit of a little bit more about the trade show that you're at and exactly what type of buyer are you interfacing with? What kind of points are you trying to make to them beyond just, hey. There's this new thing. It's important and cool.
Speaker 3:Yeah. So as as I said, and, you know, how it's happening to Ramly at the moment. World's biggest night is everything from frigate to, you know, weapon systems, whatever else, that's kinda happening. So I I think a big part of what we're trying to paint, if you will, is the ability to mix match. So we've got our autonomous underwater submarines, that are, in effect, motherships for delivering these things, plus the seabed sentry, plus the copperhead, and just to be able to give the creativity back.
Speaker 3:And it's not an obvious thing. So enabling, you know, within the dive XL, which is our big underwater submarine or autonomous submarine, I should say, we can put dozens of copperheads in. We can put a dozen seabed sentries. Wow. So the ability that you can kinda mix and match and give more creativity to the commander, and that's not immediately obvious.
Speaker 3:So just kinda we got virtual reality experiences for people to kinda, ah, here's how I would do this as well as coming into our our dive bar that we have here to, you know, have the conversation. But the it's not obvious. A lot of this is second order kind of understanding for what's incredibly wicked, difficult problem that the subsea warfare environment kind of presents, if you will. So that that's what it's about, being able to come here and start those conversations.
Speaker 2:I I I always noticed that both the dive submarines and the new Copperhead are square. Is this is are there advantages to that? Does that mean that you're less compatible with old torpedo tubes, or is there some sort of backwards compatibility, or does it just not matter and it's better to stack in, you know, a shipping container as you ship these around the world?
Speaker 3:Yeah. Yeah. Great question. So truth be told, it all started with with Parma. Okay.
Speaker 3:So Parmalaki, our our And, you know, we I was kicking around and said, know, boss, we're looking at doing a a torpedo. And and he said, but make sure it's square.
Speaker 1:Okay.
Speaker 3:And I was, you know, like, well well, why? So, anyway, I took it away, and the guys did the numbers. And interestingly, for what we're doing, it's actually faster. Wow. So given we've got the the software magic to fly these things, it actually flies more stable and quicker for the application that we want.
Speaker 3:Secondary is then the, the manufacturing. It's a lot easier to manufacture something that's, you know, a bathtub as opposed to a big spherical pressure vessel thing. So that was very significant as well. So those two kinda together is why that's the case. Now it is a similar diameter to existing effectors like the mark 48, so they could be used.
Speaker 3:It's not our intent at this stage. So our intent is for this to be launched off an autonomous effector, to be launched off an autonomous submarine, And that that makes the integration and the safety case a lot easier when you're both sides of that equation. So when you're the archer and the arrow, you can just go a lot quicker when it comes to changing the threat, changing the seekers, changing the capability can pivot a lot quicker. So that was the basis of the intent. But, certainly, a lot of customers have asked the question that you've so we'll look into it.
Speaker 1:Maybe last question for me. Just curious. Does Zanderol have scuba divers on the payroll or do you guys observe the R and D and the testing process using other Is it fully autonomous end to end? You just sort of launch them and say goodbye and and then watch from from onboard? Or I'm curious, whatever you can share, I think it'd be fascinating.
Speaker 3:Yeah. I mean, part of the dev process is things go wrong. So I'm a scuba diver. So when things go wrong, I'll stick the tanks on and jump in, as well as tanks. I mean, it's it's the iterative process.
Speaker 3:So it doesn't work all the time, but we're able to spin the wheel fast enough to get to good from, you know, bad fairly quickly. But, yeah, certainly all the team. Everyone's big enthusiast of the the water space. It's not not a terrible thing. We'll be in the group because all the tests are horrible places like Florida and, you know, Sydney or Yeah.
Speaker 3:You know, California or whatever. Previously, I did fast jet stuff, and the the test ranges for the air force guys are in these awful dusty places. So it's not a terrible thing doing navy projects
Speaker 2:nowadays. I mean, last question for me, and then we'll let you go and get back to the important work you do.
Speaker 1:Get back to the dive bar.
Speaker 2:Get back to the dive bar. I would love to hear about some of the challenges of communication in the underwater domain. Obviously, you're flying a drone around. You might be able to talk to Starlink. There's tons of satellites and other drones up.
Speaker 2:When you're underwater, signals don't travel as far. That feels like it makes autonomy more important being able to operate even with if the connection gets lost. But can you talk about how you're thinking about, communication and signal transmitting across the different fleet?
Speaker 3:Yeah. A %. So underwater is the worst domain. So commsarc, there's no GPS, all the things that you rely on for an autonomous system. So we've it is the master class for autonomy.
Speaker 3:So not space, not air, not surface, not land. It is subsurface. It's the most difficult. Right? So we've spent a lot of time, and I think, you know, Andrew, this is kind of our, what we're good at.
Speaker 3:But this is certainly I've got probably the best autonomy engineers on my team because you've got such thin pipes or nonexistent pipes. So you're in effect GPS denied. You're a whole mission. You can only pass very, very small amounts of information between the assets because they all do team together. Mhmm.
Speaker 3:So in doing so, like, you need to be very judicious about what you pass and when, in what configurations, etcetera. So it it's the most difficult domain and and one of the highest reasons for autonomy. And I think where we're getting the success is we've come with this software first thinking for a particularly difficult problem, which is this. I think everyone can build, you know, a sub a submarine autonomous submarine. That's not difficult.
Speaker 3:Having it survive, communicate, act, still be on a string from a human, particularly when you're taking kinetic action to make sure all the approvals are done in the right order is that's that's the big challenge. So you hit the nail on the head there soon.
Speaker 2:I I I did hear one interesting thing in the, Seabed Sentry announcement. I think Palmer mentioned that it can detect biological creatures too. Is does that have a benefit, or is that just like a fun fact?
Speaker 3:Yeah. Yeah. I mean, anything below the waves that kind of makes noise. And in fact, you know, one of the big things we wanna do is actually detect when the biologics are, you know, seasonally coming through because you wanna be careful when you're actually putting energy into the water because it can be harmful for sea life. So we all of our systems are collecting the pattern of life, if you will.
Speaker 3:Mhmm. So we make sure that if there's some humpbacks, you know, cruising through a surveillance area, that we're tuning down our sound system, if you will
Speaker 7:Oh, interesting.
Speaker 3:To make sure that there is no damage to the to the people who live in or the animals that live in that space. So that's just, you know, a good practice. So yeah. Yeah. It does all those things.
Speaker 2:You you mentioned that, the underwater domain is the hardest from a cost perspective, but Palmer's been talking a big game about doing subterranean warfare and tunneling.
Speaker 3:Yeah.
Speaker 2:Yeah. Do you think he's gonna give you for a a run for your money with an even harder domain, or you think you're gonna,
Speaker 3:maintain hard domain, but we'll we'll see what systems actually get deployed. So for right now Yeah. I think it's subsea, but he's he's not wrong. He's always a step ahead Okay. Be told.
Speaker 2:So
Speaker 1:Yeah. Drill. It's gonna be eventually, it'll be time to drill.
Speaker 2:It's time to drill. Drill, baby, drill, Palmer and Mandrill. Well, thanks so much for taking the time out of your out of your day to come chat with us about this launch. Congratulations. It looks awesome.
Speaker 2:The design's fantastic and I'm looking forward to learning more.
Speaker 1:Yeah. I imagine I imagine you're quite busy because I doubt anybody was creative enough to come up with a dive bar at that that conference, I'm assuming. Yeah, everyone's coming by. Yeah.
Speaker 3:Yeah, we had to shut it down just for this. So everyone's very upset. They're lined up outside. I'm not kidding.
Speaker 2:Oh, really? Okay. We'll get back to it. You so much for calling in. We really appreciate it.
Speaker 2:We'll talk
Speaker 3:to you Thanks guys.
Speaker 6:Thanks a lot. Cheers. Bye.
Speaker 1:Well, we shut down the biggest naval warfare conference.
Speaker 6:Just don't worry.
Speaker 2:Yeah. Set back the America America's military.
Speaker 1:It's actually brutal. Imagine imagine you're you're Lockheed Martin. You probably spent a hundred times more than Anderol on the booth and then nobody wants to come by if you can't because Anderol's like, yeah, come by the dive bar and hang Yeah. You actually get to touch the the tech.
Speaker 2:Ridiculous. Should we should we go back to the timeline
Speaker 1:in turmoil? A
Speaker 2:bit more timeline, and then we will I I I mean, actually, we could move on to some of the more optimistic news. I don't know if you saw Llama four launched. Yeah. That's very exciting. And, of course, we got Zuck with a front facing camera video.
Speaker 2:Hello, everyone. It's Llama four day. Llama dropped a, of course, the open source LLM from, Meta. Now they have a 10,000,000 context window, I believe is 10 times what Google was previously offer offering with Gemini. And, the Elo is insane.
Speaker 2:There's a bunch of debate about how much of an advancement this is. Are are the benchmarks getting saturated? We should get into all of that. But I think it's just cool that what they've clearly recognized is that you need to be superlative in something when you're launching a new product. And there's a lesson for their for that in even if you're launching, like, a CPG product.
Speaker 2:You know? Be Celsius. It's the it's the energy drink with the most caffeine of all of them, more than Monster and Red Right? And so you you can say a lot of things about it, but, like, you can sum it down into what is llama for? Good at?
Speaker 2:Well, they're the best at the biggest context win.
Speaker 1:Context.
Speaker 2:And then there's a lot of other stuff that's interesting. But it's funny. Austin Allred posted a screenshot from Zuck on threads. Somebody said, why did you drop llama four on a Saturday, bro? And Zuck responded, which is awesome.
Speaker 2:Normally, like, comps people would be like, oh, like, the person's using bro. Like, shouldn't engage with that person. Like, they're not serious. You should only take questions from, like, really serious people. But Zuck just comes in and says social media.
Speaker 5:That's when
Speaker 2:it was ready. That's when it was ready. It was ready on Saturday, so we launched it on Saturday. And I love that. And Austin says bullish.
Speaker 2:I agree.
Speaker 1:He's posh.
Speaker 2:And Zucks photo on threads is him. An AI image of him with, like, 25 gold chains.
Speaker 1:And that's actually wild.
Speaker 2:It's such a good such a good meme that he's just like, yeah. I'm I'm I'm rocking the 25 chains. Give it yeah. I remember when
Speaker 1:he's He's got a piece on in the video too. Yeah. Yeah. Yeah. He's Not holding back.
Speaker 2:He's he's hanging out. He's
Speaker 1:says if Satya and Zak are shipping on a Saturday, what's your excuse? Yeah. Satya posted thrilled to bring Metis Llama four scout and Maverick to Foundry today as we continue to make sure Azure is the platform of choice for the world's most advanced AI models.
Speaker 2:Yeah. LLM indifferent. They just wanna rent the space. Sachiya wants to rent. He wants to vend.
Speaker 2:He
Speaker 1:wants to deliver
Speaker 2:models all over the place. This is interesting. There's an article, a post from, LessRong. It says recent AI model progress feels mostly like BS. And, we won't get into the whole article.
Speaker 2:You should just go read it, from ZeroPath.com. This was posted by LC on on Less Wrong. But it tells the story of someone building a penetration testing tool driven by AI. So, you know, penetration testing, of course, is you you build a a a a software application. You Yep.
Speaker 2:Put it up on a server or on the Internet. And then, are there different ways you can get around the security, figure out if there's a different way to to break into the server, get root access? You you hear about this, like, WordPress gets hacked every once in a while, and people figure out how to get in the admin page and kinda change your blog posts. But, of course, pen testing is very important, especially at the higher level. And the more money is at stake, the more the bigger the business, the bigger the prize for the hackers.
Speaker 2:And so this this person was building a an AI driven, pen testing thing. Says about nine months ago, I and three friends decided that AI had gotten good enough to monitor large code bases autonomously for security problems. We started a company around this trying to leverage the latest AI models to create a tool that could replace at least a good chunk of the value of human pen testers. They've been working on this project since June 2024. And what he goes on to say is that there's all this hype on on on x and in AI circles about a new model that, oh, now we can, you know, do IMO gold medals and stuff.
Speaker 2:But for some reason
Speaker 1:Oh, not yet.
Speaker 2:He yeah. Not yet, but soon. But but but he keeps he keeps switching to the new models and getting results that are quantitatively better, but not qualitatively better. And so it's not really solving his problem. And this is this question of, you know, we've seen with GPT 4.5, maybe pretraining is maxing out.
Speaker 2:Maybe scale is all you need, but you gotta apply that scale to the right algorithm. Maybe now it's reasoning models, and you gotta scale those up. Maybe it's
Speaker 1:something else.
Speaker 2:Program synthesis is basically write have the model write code that does the problem that you want it to do.
Speaker 1:There's Yeah. Also the just needing new ideas.
Speaker 2:Yeah. New ideas. And and it's crazy. I I need to dig this up because I think this would be a very viral clip, but George Hotz went on Lex Friedman after GPT three dropped. So this was maybe back in 2021.
Speaker 2:And he said that, you know, AGI or ASI will not be GPT nine. It will not just be scaled up
Speaker 4:Yep.
Speaker 2:Of NEXT token because that is not the algorithm for intelligence. That is one thing that we do as humans, but there are a lot of other factors that go into intelligence. And you and you think about that where, you know, even someone like, isn't it Daniel Kahneman with thinking fast and slow? This idea that you have two different frames of thinking. You can you can be very reactive and think fast, but then you can also step back.
Speaker 2:And and Yep. There's all these different subsections of the brain. We barely understand the brain, but we understand that there are long term memory, short term memory. You know, there's probably some humor segment that we haven't even tried to build Neha yet. And all these different That's
Speaker 1:funny bone.
Speaker 2:The funny bone. Yeah. The funny bone has not even been tried to be put into silicon.
Speaker 1:No. But Mike from ArcPrize Yeah. And Zapier, this aligns with what he was saying which is like, hey, we need we still need new ideas Yep. Which is part of what gets me excited about SSI. Totally.
Speaker 1:Trying to take a new approach.
Speaker 2:Yeah. I mean, yeah. I mean, Ilya Sitzkever seemed to be not only the person that decided that that that read the attention is all you need transformer paper and realized the impact of it. Because we look back on that, and there's this survivorship bias where it's like, yeah. Of course.
Speaker 2:Like, all these Google Brain people put out this amazing paper called attention is all you need. They describe the transformer architecture. Of course, that was, like, gonna be groundbreaking from day one, but you forget that on that day, there were probably a hundred papers that dropped. And the next day, there were another hundred papers that dropped. And even that Google Brain team was publishing other papers and others other research trees and other paths and even things like symbol manipulation were popular at the time, and all sorts of different algorithms were being tried.
Speaker 2:And Ilya had the foresight to realize that that was the architecture that you could throw a billion dollars of compute at and get a really magical result. He did it. OpenAI released ChatGPT. It becomes this amazing, like, you know, LLM. We know about that.
Speaker 2:They implement transformer architecture in a ton of different stuff. Even Tesla's autopilot has transformers baked into it now. It it's all over the place, this architecture. Yeah. Then he realizes that reinforcement learning, kind of the the AlphaGo, the MuZero, the stuff from DeepMind, again from Google, you put that on top of an LLM, have it self play, have it talk to itself, reasoning tokens.
Speaker 2:That will be the next the next amazing thing, originally called Q Star. Very scary. There's all this chaos. Then it becomes, you know, what was it, strawberry. Then eventually, it becomes o three, o one, o three high, o three mini high, r one from DeepSeek, all these different reasoning models come out.
Speaker 2:They clearly deep research, they clearly advance the ball towards something that's more usable. You see the coding agents like Cognition and and Devon doing something similar where there's there's a reasoning layer on top of a pretraining LLM. But the question is what's next? And I think everyone is kinda you know, and it seems to be coming to the conclusion that there will be a next thing in order to unlock the next big breakthrough, and we're excited to watch it. But as the model as the race for just general LLM training and scale heats up and all the news about, you know, Grok is in the game now and and OpenAI is scaling up to 4.5.
Speaker 2:There's GPT five coming at a certain point. There's, there's DeepSeek. Meta has been continually, pushing the ball down the field. They have a lot of infrastructure as a hyperscaler, but there was some, controversy on the timeline from Nick. He says breaking meta AI internally caught cooking benchmarks to hide poor poor results.
Speaker 2:Absolute state. I don't know how how how real this is, but they are alleging some benchmark fraud, which you hate to see. Let's read it. It says the original post is in Chinese, but the translation here says, despite repeating trade in efforts, the internal model's performance still falls short of open source state of the art benchmarks lagging significantly behind. Company leadership suggested blending test sets from various benchmarks during the post training process, aiming to meet the targets across various metrics and produce a presentable result.
Speaker 2:Failure to achieve this goal by the April deadline would lead to dire consequences following yesterday's release of LAMA four. Many users on X and Reddit had already reported extremely poor real world test results. There was a debate about whether or not you could even run this on, I'm sure people will play with the models. And we talked to some of the OpenAI folks about, yes, there are all these evals, but at the end of the day, you kind of just got to talk to the model and play around with it and see if it's useful. And then also, you need to implement into your system or your code base and see, you know, is this solving a real problem?
Speaker 2:Maybe it is. Maybe it isn't, but it kinda depends on your your the economics of your business and the and and the application that you're building for. So, interesting to see where this goes. There's been allegations of benchmark fraud and and eval saturation all the time. Some of it is just completely accidental just because, you know, someone posts a a benchmark, then all the results go on to the Internet.
Speaker 2:That goes into the next scrape, and then, of course, it gets baked in. And so, you know, AP Bio, for example, every AP Bio question is just on the Internet now. And so it goes into the pre trained data. And so it's basically just memorized every AP Bio question and answer. Is it really good at biology?
Speaker 2:Like, it's kinda hard to say. It's certainly good at looking up the answers, which is great, and that's useful.
Speaker 1:Memory is all you need.
Speaker 2:And it's a it's a great yeah. It's a great is it intelligence? These things are certainly extremely high on knowledge, and they're amazing knowledge engines. Isn't that the term you use? Knowledge engine?
Speaker 1:Answer engine.
Speaker 2:Answer engine. Like, you're fantastic at that. And what I love about Llama four
Speaker 4:is Is
Speaker 1:that it is funny to think about you could have if if you took a human who had was sort of lowest on intelligence and then you gave them all the knowledge in the world in so many situations, they could fake intelligence. Totally. Like they could you sort of ask them something Yeah. Give you an answer. You go, wow.
Speaker 1:So smart.
Speaker 2:Do do Jeopardy or do do trivia at a bar. You'll be like, that guy's so smart. He knows exactly who won the World Series in 1982. But it's like, is that intelligence? It's unclear.
Speaker 2:Anyway, I like David Holes, founder of Midjourney. He says, I desperately want Mark Zuckerberg to pose with four llamas for the llama four release. I'll even say, please, we need aesthetic moments in tech and this llama branding is good for one thing and one thing only.
Speaker 1:Great picture.
Speaker 2:Great picture. Clearly generated from mid journey. Looks fantastic. But Zuck has the resources to do it. And I think he has the the character and the and the personality to pull it off and have fun with And so I would I would
Speaker 1:highly Drop the chain. Pick up the llamas.
Speaker 2:Yeah. Do get get four llamas together. Do some do some llamas. Llama photos. Anyway, Toby Lutke has a leaked memo that's been floating around that's pretty interesting all about how spot Shopify is using AI.
Speaker 2:He says AI usage is now a baseline expectation. We are entering a time where more merchants and entrepreneurs could be created than any than in any other than than any other in history. We often talk about bringing down the complexity curve to allow more people to choose this as as a career. Shopify's whole business is making ecommerce easy, so they want to make it as easy as possible to set up an online store. They've done it very, very well in my opinion, but they wanna continue.
Speaker 2:Each step along the entrepreneurial path is rife with decisions requiring skill, judgment, and knowledge. Having AI alongside the journey and increasingly not just doing the consultation, but also doing the work for our merchants is a mind blowing step function change here. Our task at Shopify is to make our software unquestionably the best canvas on which to develop the best businesses of the future. We do this by keeping everyone on cutting on the cutting edge and bringing all the best tools to bear so our merchants can be more successful than they themselves used to imagine for what we for what we need to be absolutely ahead. And he, outlines this in an email to every Shopify employee.
Speaker 2:Reflexive AI usage is now a baseline expectation. Maybe you're already there and find this memo puzzling. In that case, you are you already use AI as a thought partner, deep researcher, critic, tutor, and pair programmer. I use it all the time. And so he's telling folks, you gotta be using AI, and we got to, build it into all of our products.
Speaker 2:So just interesting to hear from a big public company CEO in founder mode definitely pushing towards more AI use.
Speaker 1:I'm gonna go out on a limb and say, I think this was leaking.
Speaker 2:Oh, you think it's recruiting?
Speaker 1:I think
Speaker 2:Oh, no. My my memo leaked.
Speaker 1:My extremely well written, kind, visionary memo
Speaker 2:I think it probably leaked. But he did post it now, and it's good kind.
Speaker 1:No. I'm sure it would have leaked. It's just it's just
Speaker 2:You kinda write these things with leaks in mind. Anyway Yeah. We got our next guest coming in to the studio. Welcome to the show, Logan.
Speaker 6:What's up, guys?
Speaker 1:We wanted to bring on the foremost geopolitical expert, tariff expert and
Speaker 6:And you couldn't you couldn't get that person so I you got a VC which is the next best thing, I guess.
Speaker 1:No. Honestly, grow what we've seen is growth stage VCs tend to be know, have the strongest opinions most strongly held. So
Speaker 6:Listen. I am open to I would love nothing more than to be wrong about all of this stuff. And I I spent my weekend glued to my phone more than I should, both out of Schadenfreude and also debating Keith Riboy back and forth, which has he already come on? Is he already pointing No.
Speaker 2:He's coming on in thirty minutes. Maybe you just stay on and start arguing with
Speaker 6:podcast tomorrow. He and I are. I'm gonna try to be a neutral moderator in that discussion rather than a a participant. But yeah. It was it was interesting.
Speaker 6:It was interesting to hear his perspective about the what the intended results are of this. Because I guess I I I typically try to stay out of, like, politics Yeah. For the most part. But this I don't know, this feels a little bit adjacent in that it's pretty economically driven and does tend to impact the world that I play in. So I ended up dipping my toe into it far more than I wanted to.
Speaker 1:Let's start how conversations have gone with portfolio company CEOs. You guys are obviously been a growth stage software investment firm. Yep. But I'm curious in talking with CEOs over the weekend, what's been your sort of high level what's been what's been top of mind aside from just kind of battening down the hatches, maybe?
Speaker 6:Yeah. I mean, I think it's mostly that. I I I will say it sort of feels like we've been through three different ex distential, potentially risky circumstances over the last, what is it, five years? We we had the March COVID stuff, and then we had the unwind that sort of happened post Zurp, the time to get fit or whatever it is. And now we have this.
Speaker 6:And so it it feels like most of our CEOs are are are kind of old hat in some ways at how to deal with this stuff. And I do think that we measure our time in months and years and not, you know, day days and hours, if you will. And so I think it's kind of a wait and see approach, in particular, because it's hard to know is this a means to some end that might be orthogonal to the pure economic purpose of it. And I think you're sort of seeing that with what Navarro comes out and say says versus what Besant will say versus what Elon's, you know, out out tweeting now. It's a little bit hard to know, what the strategy is behind this.
Speaker 6:I do think we probably need to take it literally at this point and assume that this is probably here to stay in some way, shape, or form. But I do think that our company shouldn't be totally moving the dials too much in the near term.
Speaker 1:Mhmm.
Speaker 2:What do you think is happening? I mean, you do those fantastic public market reports. It feels like just kind of everything's down, but I would assume that some of the larger SaaS companies that in the public market should be less affected. But do you think that there will be any sort of like bifurcation or like flight to safety that might happen in the next couple months as people kind of figure out who's actually exposed? Like, if you're Nike, it's different than if you're Salesforce, I imagine.
Speaker 6:Yeah. It's it's a great question. I I I think that it seems because we've gone through this twice before and, ultimately, the results that were learned out of that in the post COVID, you know, after March of twenty twenty and then after 2022, it seemed that everyone kind of learned similar ish lessons of it and maybe the wrong ones. Like, post COVID, the the right answer was to invest into all these tech companies. And so I do think with the war chest that a lot of the venture firms have right now, I think it's gonna take a while before people actually stop dancing.
Speaker 6:I think everyone's gonna convince themselves, at least in the near term, that this is a good buying opportunity. And if you look like, I was looking at some of the numbers. I think March was the highest buying that we've seen on record from retail investors. And so it feels like a lot of people have learned similar lessons of, like, oh my gosh. Well, when a dip happens, that's actually a better buying opportunity than it is a time to be fearful in this.
Speaker 6:And so my guess is it's probably gonna take a couple orders before anyone starts to capitulate that maybe this is the new normal, particularly given how manic the market has kind of been and the decisioning seems to have been.
Speaker 2:Yeah. I remember during the kind of ZERP unwind post SBB crisis, you did a show where you were talking to somebody about just this idea of, like, dry powder, and everyone was saying, oh, well, like, the VCs have so much money they have to invest. And, of course, there were a bunch of funds that, like, returned capital or sized down their funds. But then most of the funds just kind of ripped pretty quickly and came found excuses to move into AI and stuff. And, at this point, it feels like if you're an LP in a large fund and you see the market down, you've been trained.
Speaker 2:So, I guess the question is like like, do LPs pay more attention to this than GPs? Or or does this or or is it even a longer cycle for the LPs to actually start making calls and saying, like, hey. How are you adapting to this strategy?
Speaker 6:Yeah. Yeah. I think that the the GPs in some ways, like, when you're a hammer, everything looks like a nail. If you're if you're thinking, like, hey. I need to do growth stage investing, then I think a lot of people just operate with, okay.
Speaker 6:I'm gonna invest in the relative quality of the names that I see over the next quarter, two quarters, four quarters, and try not to be too episodic. Because at the end of the day, what we're trying to deliver back to our limited partners for the most part isn't, some relative, adjusted return versus all the other sectors in the economy. Right? We're not deciding should we go buy lumber Yeah. Or should we go buy futures contracts or go buy equities in the public markets?
Speaker 6:Like, we're delivering some sliver of a product. And I think within a lot of LPs, that's also the case where you've seen kind of this as they've been more institutionalized, you've seen different people become responsible with, oh, I'm not just responsible for the venture book. I'm actually or I'm not just responsible for the private's book. I'm actually just responsible for the venture's book, and we're gonna allocate 8% or whatever it is to that. And and so at a at a micro level, I think a lot of the LPs are incented almost similar to the to the GPs.
Speaker 6:Now as you go up further and further up the stack to the CIO or someone that oversees some, like, broader purview of all this stuff, then those people are making relative trade offs of, like, is venture at a 12% level, like, the right exposure that we wanna have going forward? And that's where the dominate denominator effect can really play through. I will say back to the everyone kinda learning similar points, though. It does seem like a lot of the LPs have decided, hey. The best time to be in these managers is is when things are going down, and so we're gonna commit to it.
Speaker 6:And then there's also this, like, kind of principal agent problem, I guess. I don't know if that's the perfect term for it. But if you leave a a firm, then they don't let you back in the next fund. Like, you don't get the cherry pick. Okay.
Speaker 6:I'm gonna be a part of this vintage, but not that vintage for the most part with the blue chip names. And so the LPs in some ways are sort of faced with a a decision of do I wanna get out of this manager almost in perpetuity, or do I wanna stick with it and trust their ability to navigate those waters? And so I think that there's a bunch of different dynamics that sort of play out in all of that. And it's gonna take a while for it to roll all through. Right?
Speaker 6:Like, fund cycles are two to three to four years, and it's only on those time periods that the LPs are really making these decisions. So I think we're a long way from knowing.
Speaker 1:Yeah. Doesn't this just continue to overheat AI in that, you know, especially in in other sectors too, when I look at the areas that have gotten the most hype and attention in some of the biggest rounds recently, it's defense, robotics, AI. And like, if I'm a GP or I'm an LP, those are three areas that I actually, you know, the world's becoming less stable. It feels it certainly feels less stable. AI is not getting tariffed and we need to, you know, the the sort of onshoring, reshoring narrative just means that you wanna deploy even more dollars there.
Speaker 2:Yeah. Feels actually very on theme.
Speaker 4:Go ahead.
Speaker 2:No. No. You know, it just feels very on theme, but, well, yeah, what's your take?
Speaker 6:I I mean, I think so. Although, I wonder, when we talk about, like, AI not getting hit or semis not getting hit with tariffs, like, it's such a complicated global supply chain that I do worry about the like, I I I think, and I've heard anecdotally from some of the big foundation model companies that the different tariffs and the the issues that you have to deal with, not just China or Taiwan or South Korea, but also even Mexico. Like Mhmm. There are a bunch of inputs. Even if it doesn't feel like they're direct inputs, there's so many complicated pieces of the puzzle from an AI standpoint that that I think it's gonna be hard to disassociate the the aggregation that is what's being tariffed into AI.
Speaker 6:And in talking to people over the weekend that are exposed to these large model companies, I think there's a real, real concern about what this is gonna do to those businesses and their ability to access the different things that they ultimately need. And it could be everything from, I don't know, cooling to to different server types, and all these different pieces are a part of a big chain. And so I will think there I do think there will be a flight to to those things in some ways, but I I I'm hesitant to say that they're not gonna be impacted. I actually think especially the way at least this has been messaged thus far, it feels like there's gonna be a lot of different inputs that ultimately cause a bunch of issues no matter what the end market is, be it defense or be it robotics or be it AI.
Speaker 2:Yeah. We were talking about electrical transformers, not the architecture, but very key ingredient in drawing power into these huge data centers. And most of those are made overseas, many of them in China. If there's if there's tariffs on those, it could slow down the roll up or roll out of new data centers. Although, I imagine that's not a huge portion of, like, the per token cost.
Speaker 2:But even, like, Polymarket has a chance of a US recession in 2025 at a 62% chance. If there's a recession, like, people could say, you know what? $20 a month GPT or ChatGPT plan, like, maybe I downgrade. There could just be, like, some consumer hesitancy to add a new subscription as people tighten their belts.
Speaker 6:I think I think that's a % where we're headed, on all this. Like, I think that, at a minimum, some of these things are self fulfilling in some ways where if we have the perception of a slowdown
Speaker 1:Mhmm.
Speaker 6:Then people are gonna stop spending
Speaker 2:Yeah.
Speaker 6:Which will inherently lead to a slowdown. And so it starts to become a little bit self fulfilling in that regard. And so I I've seen stuff. I mean, I realized Polymarket's saying 62%. It sounds like I think Goldman moved their estimates to 45% this morning or their economists did.
Speaker 6:And I've seen some people saying we're already in the in the middle of a recession. Recession. I mean, just the amount of uncertainty that this has introduced. I don't know how you do any planning. If you're a if you're a business right now and you're thinking through, like, should I maybe not Apple or someone that has, like, you know, a gobs and gobs of money to go figure this out, but, like, a midsized, public industrial company or something.
Speaker 6:If you're thinking through, like, whether or not to start rebuilding in The US, which in some ways is a very noble goal, particularly with regard to security. And so I don't mean to be, like, entirely anti tariffs. But if you're thinking through that and you're not sure I mean, we've seen some people start to break ranks on tariffs already, be it Elon or Ted Cruz or, I mean, Ackman. There's, like, a bunch of people in the Mhmm. Trump world that's starting to break ranks.
Speaker 6:And then congress does theoretically have the power to revoke some elements of the president's tariff, power. And so, I mean, there's murmurs of that, not to mention midterms in the next, whatever it is, eighteen months. And so you have all these different things that could throw a wrench into the the tariff plan. Not to mention, maybe this is just a means to some other end as a negotiating tactic. And so I don't know if if I think people are gonna be stuck in this state of paralysis a little bit of, like, what do we what do we actually do right now?
Speaker 6:And, inherently, I think that becomes self fulfilling in the way that it's gonna lead to a recession for us. I hope again, I hope I'm wrong. Like, I don't wanna be right about any of this stuff.
Speaker 1:Do you how do you weight posts coming from the handle at Chamath on next? Because, you know, he's he's clearly one to happily sort of like talk his book, but at the same time Chamath? Yeah. Yeah. That that guy the c h a m a t h.
Speaker 6:Chamath was the guy the all in guy.
Speaker 1:Yeah. Yeah. That guy that guy's a big podcaster but no. So so there's two things happening. One, clearly happy to talk his own book.
Speaker 1:He's probably super long, Laura Piana among other things. But he also is like, you know podcasting with the people, some of the biggest sort of like
Speaker 2:He's an insider.
Speaker 1:He's an insider, And so it's one of those things he's he's coming out I think it was last night or this morning talking about the Mar A Lago Accords. How do you how do you kind of evaluate, you know, it's a signal. I don't know if it's a good signal or an an accurate one, but do you do you put any weight on on anything?
Speaker 6:You know, there there's this great feature I've started to use on on Twitter X and you can actually do it for any account. I I you it's I I forget exactly where you find it in the screen, but it mutes these people talking.
Speaker 3:And then you don't
Speaker 6:see what they have to say. And I didn't know I didn't know it existed. And so I will say I I don't know what made me think of that, but I will say that I I think you have to take some of the insights that these folks have because of their access. Yeah. You have to take it with probably a grain of salt, but also as a potential angle of dissemination of information I agree.
Speaker 6:Or at least trial balloons going out there. I saw right before I came on, Kimball Musk tweeted something about how terrible tariffs are. And maybe he just woke up today and thought that, or maybe, you know, his brother, who he sits on the board of, and I think a lot of his net worth can be attributed to, maybe encouraged him to go say that. And so I think it it to be dismissive of any of these individuals, I think, is probably not not particularly important to But
Speaker 1:I'll even if I'm making a joke, I'll I'll say it out loud to John first. Be like, what do you think? And if John thinks it's funny, I'll post it. If he says, I
Speaker 5:don't I don't know.
Speaker 1:Which is
Speaker 6:the exact same thing as, you know, the the Kimball Elon thing.
Speaker 2:Yeah. The Elon thing is is
Speaker 6:so I but but but I I think all of that is to say, I'm not sure there's, like I I I think we've sort of seen that that what what Besson says versus what Navarro says versus what what Lutnick. Elon says. Like, there's not any consistency that Sure. At at a high level is coming out from those different people. They're all the messages are slightly different.
Speaker 6:And so I I would I would find all this stuff pretty intriguing, if not if not necessarily factually accurate.
Speaker 5:And so
Speaker 6:I feel like all these things are kind of informing the little inputs into my decision. But I do think it's interesting to see people like Dan Loeb or Dan Loeb. Bill Ackman break Yeah. Rank and start to come out and really be negative against these tariffs. I I mean, we can joke, and I have certainly on Twitter about him and changing his views and all this stuff.
Speaker 6:But, like, at least he's owning some of the decisions that he now finds to be wrong. I I find the most frustrating thing is a lot of people just morph their view into whatever, fits into the the, I mean, Donald Trump specifically, but I this is true of of people on the left as well, that whatever they say is their talking point, they just follow it in suit. And so I give Acme credit for breaking rank, and, maybe we'll end up seeing Tomath or some of those other guys do the same.
Speaker 1:Yeah. The the Elon the last time?
Speaker 2:Yeah. The the Elon thing's interesting because you you'd think he'd be a big beneficiary of tariffs because of the cars and the exposure for Tesla. But my my my question is, like, I feel like tech VCs, like, shifted so into the Trump camp. Like, I'm not even seeing, like like, the the big dissenting opinions on tariffs are coming from, like, Tyler Cowen and The Economists. And I'm not seeing that from, like, big GPs.
Speaker 2:And it's it's like, have they just completely over rotated, Or do you think that they're just not even thinking about it or not exposed to it? Like what's driving the lack
Speaker 4:of Well,
Speaker 1:one one thing to note. Tesla sell sold almost three quarters of a million. They sold just under 700,000 cars in China last year. Sure. Like, trade war is like company.
Speaker 1:Very bad.
Speaker 2:And and I'm sure they source from China very heavily for certain things.
Speaker 6:Yeah. And I think they have they have factories there as well. Yeah.
Speaker 2:Gigafactory in Shenzhen.
Speaker 6:You know, there's this interesting thing that's that's played out where I think kind of post the election, it was so uncool to have voted for Kamala Harris to the to the point that I was at parties kinda being accosted. Like, people asking who I voted for and all these things. And I was like and I just found it an unusual swing of the pendulum in that way. And I give the Democrats there's a lot of blame that Democrats should should have on that. The one that I there's obviously all the DEI and whatever, all that stuff.
Speaker 6:But I do think that if you look, Democrats have been very antigrowth and anticapitalism in a meaningful way. And I think it was just kind of embarrassing in some ways to be extolling their virtues or pushing back too much over the course of the last couple months because it was such a resounding, election defeat. And there was such a even the people that I think within the the, at least the parties I know, that within technology that voted for Kamala Harris, like, they they all seemingly held not all, but a lot of them seemingly held their nose and did it and was like, hey. This is the lesser of the two things. And so now under the tariffs, it it's been I feel like people are, like, warming up their thumbs a little bit, like, sort of forgetting what like to, like, push back too too much on on this.
Speaker 6:And so I I found myself wading in the waters of all of this far more than I expected. What I found most interesting, though, at, like, a high level is just how populist a lot of the rhetoric within the Republican Party or at least Donald Trump has become. And, I mean, you sort of go back and you look at Milton Friedman or Ronald Reagan or, like, some of these OG conservative icons and what they had to say about tariffs are just so different than than what we're hearing from our president today. And so I guess the question in this is, like, does this present ultimately, if this is gonna be the move that the Republican Party makes from a populist standpoint, does this present an opportunity for the Democrats to be a little bit more pro growth and, like, let's grow the pie? And I think it was pretty well timed that Ezra Klein and Derek Thompson wrote that book abundance.
Speaker 6:Right? Because this there was no such thing really over the last decade as a pro growth democrat, I think. And that would be an interesting lane for the party to try to rally behind. I just don't know. Ultimately, these things seem to follow some, like, charismatic politician in some ways.
Speaker 6:And so I don't know who that person is. Shapiro seems like someone that could be interesting in that regard. You know? Maybe if we tweet enough, we can get Weinberg to run for some political office. He can take the pro growth Democratic thing.
Speaker 6:Maybe that's Aaron Levy's next next, you know, gambit he's gonna go down is politics. I I but it feels like that's a mantle that that people should really take.
Speaker 2:I don't think his hair can get any grayer.
Speaker 6:Agree, honestly. And it's still full. That's the thing. I don't know if that's just genetics or hims or or who we credit that fullness of hair. It's definitely gray, but, man, it's like a robust set of hair.
Speaker 6:It almost feels like he's set up to be presidential in that regard.
Speaker 2:Company public at, like, what, 29? Like, you're go great.
Speaker 6:Which will do it to you. I mean, honestly looks like a West ring
Speaker 2:Oh, yeah.
Speaker 6:You know, like a Josh Lyman kind of running into Martin Sheen, president Bartlett's office on the West Wing now with that gray hair.
Speaker 1:I could see it. Yeah. Fantastic. What did you what did you think about Toby's leaked memo from this morning where he very very eloquently lays out how he announces employ like, to be to be honest, like, one, it's well timed in my point of view and that you can basically say to your team, we're freezing hiring without saying we're freezing hiring because now it's like, hey, if you wanna hire, if you wanna actually make an offer
Speaker 2:Hire an agent.
Speaker 1:Hire an agent. Yeah. Yeah. No. But I'm curious, you know, obviously, if it was leaking, wouldn't have been that damaging, but it's cool that he put it out there.
Speaker 1:I'm curious what what your immediate thought was.
Speaker 6:Yeah. It it's it's something we've been thinking more and more about. And I've seen my my my own workflow switch so much more to being AI native in, like, what I'm doing on a daily basis. I'd be curious your guys' perspective on, like, prepping for this show. Mhmm.
Speaker 6:It's just so much easier to get information at your fingertips and and get access to, I feel like I learned more this weekend or the last week, like, going really deep into the history of tariffs and all this stuff. It would have taken me in the past, like, I don't know, three weeks to do what I did over the course of the last four days, five days. And so I get the perspective of, like, hey. We have to make our company AI native in some ways. I do I imagine there's a little bit of marketing behind it, like, behind every good, leaked internal memo.
Speaker 6:There does seem to be an element of both signaling to the broader market as well as potential new candidates that are coming on board, like, this is the new normal. This is the way we're gonna do things. But I haven't heard anyone else do it. I don't know. You guys might
Speaker 1:Well, the Klarna, I mean, Klarna took another approach. It wasn't a memo. He just came out. We're not hiring anymore.
Speaker 2:Overly aggressive, and everyone was like, we don't really buy it, man. Like, it's too much. And then, Jeremy, Jeremy Diamond Jamie Diamond, had that leaked, like, voice call Yes. Where he was like, you gotta work really hard. And he was like, okay.
Speaker 2:This is just a billboard advertisement for your company and your culture, which is cool. But I think the lesson is, like, ever we all need to be leaking more memos.
Speaker 6:I think that's right.
Speaker 2:Yeah. I think your your your Redpoint analysis, you shouldn't you shouldn't try and post that. You should be like, it's leaked.
Speaker 1:We'll leak it.
Speaker 2:We'll leak it.
Speaker 6:That's what I don't know if you guys ever, like, newcomer, Eric newcomer. Yeah. It's like a bunch of interesting, like, oh, here's Founders Fund returns. Yeah. Like, how did you where are who would have given you these amazing returns?
Speaker 6:Right?
Speaker 2:Hope you have good news. You gotta link
Speaker 3:that stuff.
Speaker 6:Yeah. The other one I thought was really masterful PR was was Asif and and Wiz last year.
Speaker 5:Mhmm.
Speaker 6:What was interesting in that Wiz announcement, when they when they announced that they were going their own and not gonna be bought by Google was, like, everything that they said was then reported on the media in the media because of the leaked memo. And so they got to really control the narrative of how things went down with Google. So I actually the dark arts of PR, I think, is is a pretty clever thing, for companies to try to master both as for morale and hiring and just public perception. The other one that I thought was funny, I'm not just giving credit credit to Wiz, but I don't know you guys remember this. They, like, SentinelOne had some company that was agitating to buy them or something, and SentinelOne's, like, a $6,000,000,000 public company.
Speaker 6:And, I think Wiz announced that they were interested in exploring the acquisition of SentinelOne. The SentinelOne CEO is like, fuck off. Like
Speaker 2:Yeah. What not starting us.
Speaker 6:What are you talking about? But, like, you know, it gets reported in that way. Hilarious. I think Toby's really smart in that regard. And I do think we'll see this divergence of fluency of of people's ability to use AI.
Speaker 6:I still get asked questions from people internally or externally from buddies that are, like, so quickly answered by a prompt into a model. And so I wonder when that behavior shift's gonna happen, for people in mass, but I I think signaling that that's a requisite thing is smart from an employee standpoint.
Speaker 1:Speaking of models, did you read AI 2027? And do you think we're just sort of picking up pennies in front of a steamroller right now with all the tariff stuff? Because if if AI twenty twenty seven, either path we go on, the forecast basically means the economy will change by, like, a % or something like that.
Speaker 6:I it certainly seems I mean, man, I really hope, I I really hope we get the ubiquitous sort of growth in all of this. Remind me, I just saw it tweeted about. What was the what was the net of AI 2027? What was the takeaway?
Speaker 2:Superintelligence by 2027. So extreme compounding growth driven by AI models that can do their own AI research starting at the end of this year. No no hiccup in any of the scaling laws. A quick path to, you know, 10 terawatt
Speaker 1:It it involves it involves basically by, you know, 2027, '20 '20 '8 OpenAI buying every automotive manufacturer and turning them into self replicating robot production facilities.
Speaker 2:I like that.
Speaker 1:So Will
Speaker 6:we still be able to will we still have our jobs like screwing doing the screws into the iPhones like Yes. Powered record
Speaker 2:That will be in America. Yeah. That's the Okay.
Speaker 6:So we can do that. Our jobs might be gone. But yeah. That's that sounds good. I will say this website's super slick.
Speaker 6:Yeah.
Speaker 2:It is. It's a really cool website. You scroll down and it, like, it updates the probabilities and takes you through all the time. I mean, it's a beautiful
Speaker 4:People are
Speaker 1:calling it
Speaker 2:science fiction fan fiction, but I like it. It's entertaining.
Speaker 1:No. It's a it's a very cool exercise to go through. It it to me, sort of the great irony of this whole situation is like right now, no nobody can talk about anything other than the tariffs and fixating on, like, what's the next post on Truth Social? Bull market for Truth Social usage. But but then, you know, it's possible
Speaker 6:You know, the big winner in tariffs right now is Pete Hegseth, man. I we were all we were talking about last week, signal this, signal that, is he in, is he out? And now that is a long since forgotten thing. So I if there's anyone that I think deserves credit or or celebrating this, I think it's him.
Speaker 1:Last one for me, underrated voice right now online. Anybody breaking through that you think is good signal?
Speaker 6:You know who I I mean, I I I've sort of appreciated this mix of of politics, economy, and all of all of that stuff. So I really Modest Proposal, I think, has always done a good job. I don't know if you guys follow Buco Buco Capital. I always find him super entertaining in some of the stuff he's he's tweeting out. So those are probably the two biggest ones that I've been enjoying of late.
Speaker 6:But I I I definitely added a lot of econ people to my lot of my rotation over the course of the last ten days or something. So
Speaker 2:Yeah. Good time to be an economist. Bull market and economist posted.
Speaker 1:I I've always
Speaker 2:Econ
Speaker 1:I've always honestly thought that you would be the kind of guy to have like a really big alt account that we all like followed and nobody knew.
Speaker 6:You know what's funny is I I feel like I tweak too much of my unhinged stuff, at least I did for a while for my normal account. So
Speaker 2:I Well, he does have an alt. He does have an alt, but it's just about basketball.
Speaker 6:Yeah. Right. College football too, I'll sneak in there.
Speaker 3:Oh, yeah.
Speaker 6:I I will say, I was accused of at different points in time being, I don't know, VC's congratulating themselves Yeah. And like all these different things. And I'm like, I I just I don't know.
Speaker 2:It feels it was actually mean,
Speaker 6:I unhinge things from my own account.
Speaker 1:Yeah. For sure.
Speaker 2:For sure.
Speaker 1:Well, looking forward to your you sort of moderating this debate tomorrow.
Speaker 6:If I hang on, will Keith show is Keith the next guest? Yeah.
Speaker 2:He's the next guest.
Speaker 1:Hang on. Hang Can
Speaker 6:we give should we give a preview? Listen. I I mean, I teased out from him all his stated goals of what he was thinking was gonna come from all of this stuff. So I hope you guys, you you know, pin him down on all that stuff. I need to make sure I have all my prep work done.
Speaker 6:He's sort of open sourcing the manual to debate him by Yeah.
Speaker 2:Yeah. Yeah.
Speaker 6:By tweeting all his takes.
Speaker 5:So I I
Speaker 2:mean, the the debate that was going on in the timeline was just that he's he's somehow found a way to make no matter what happens, proof that it's working, which is kind of genius. I like that
Speaker 6:a I don't know if I I probably can I share on this screen?
Speaker 2:Yeah. You can share. Here. Hang on. Whatever you share is live, so don't share a password.
Speaker 6:Yeah. I know. I know. I know. I need to I need to make sure I
Speaker 2:get Oh, wow. It's the returns from Logan's portfolio. They're fantastic. Lee, Joe,
Speaker 1:what a what a coincidence. Percent IRR Oh my for a decade.
Speaker 6:All these models reaching out to me. It's like, no. I'm married, guys. Take it easy. Let's see.
Speaker 6:I can't find it. But it was it was oh, gosh. Where is this? Give me one second here. I'll wait while while Keith comes on.
Speaker 6:But it was essentially a meeting of, like, the oh, here it is. Let's see. How do I share this?
Speaker 5:Hey, Keith.
Speaker 2:How are
Speaker 3:you doing, Great.
Speaker 7:How are you guys?
Speaker 2:You're you're on with Logan Bartlett too. Prep prep
Speaker 3:Can you see it?
Speaker 2:Cool. Prepping for the next for the next for the next debate tomorrow. Right?
Speaker 6:Is my is my thing coming up or no?
Speaker 7:Is this prime time and that's the backup? Yeah.
Speaker 2:Yeah. Yeah. This is prime time.
Speaker 6:Alright. I'll let you go. Keith, keep open sourcing all the points of your debate. I I wanna hear all the talking points. Just get them out there in the wild for us.
Speaker 7:Good. One day, I'll get you into turn you into a DJT voter.
Speaker 6:Maybe tomorrow.
Speaker 1:You're gonna convert him from a member of the Panikin party, which Trump says is a new party based on weak and stupid people.
Speaker 6:That's me. I I actually am getting my my card and badge tomorrow. It's coming through. So
Speaker 2:Yeah. Yeah. Yeah. Alright. You might win the economic environment, but you'll lose the dunks for sure.
Speaker 2:There's no chance.
Speaker 7:Well, FedEx will have Paul Graham in UK too.
Speaker 2:Yeah. You
Speaker 6:you you can probably buy in bulk at this point, Keith. You just send them around. So alright. See you guys.
Speaker 1:Great to see you, Logan.
Speaker 2:Yeah. Keith, how are you doing?
Speaker 7:Great.
Speaker 2:Yeah. So you're happy about all this?
Speaker 7:Well, I mean, obviously, there's you know, volatility, you know, could be terrifying for everybody. Yeah. But I I think, directionally, the administration has the right strategy, which is we need to address the absurd cost of our debt. Mhmm. We need to rebuild American manufacturing and our search strategic industries.
Speaker 7:We absolutely need to have control of our desk, which we learned during COVID. We're massively exposed to strategic weaknesses. We couldn't manufacture even prescription drugs during the COVID, you know, fiasco. And then on top of that, we need to unlock this golden age of prosperity, which does require rethinking, globalism, does require rethinking our tax and regulate overtax and overregulated state. And so I think some people are isolating tariffs as an individual lever in a grand equation, and there's a lot of moving pieces.
Speaker 7:The country does need to deregulate. Biden alone, just in the Biden administration, we added $1,400,000,000,000 of regulatory costs. Mhmm. Trump will get rid of all of that and go back, you know, in reverse prior administrative buildup of regulatory burdens. That's great.
Speaker 7:Energy costs, soared under Biden. We needed to drill baby drill. We need to bring down the cost of energy, which is major input into goods and services goods, proposed is subservices like Uber. And you need to, invest in the future of technology, which also lowers the cost of goods. But tariffs are also strategic.
Speaker 7:The best way to often convince foreign countries and nations to do things we need them to do is through what I call economic statecraft, and tariffs are perfect lever. Let me give you two examples. Canada has been has been enabled under the Trudeau regime, an incredibly poorest border, and the Mexican cartels took advantage of that and imported fentanyl at mass scale into The United States. And various people in the administration, Biden, the new administration, were complaining about this, but Trudeau administration did literally nothing to serve the border. Think about these, you know, cartoonish, Canadian Mounties on their little horses.
Speaker 7:That's basically the entire security protecting the northern border from fentanyl, and the cartels have been killing Americans, through the northern border. So once Trump started threatening tariffs, of a sudden, even under, like, the, you know, current regime, which is not particularly conservative, they started cracking down on the border. So we've already seen improvements in interdictions of fentanyl, from Canada. All fentanyl, virtually all fentanyl that's manufactured the precursors were manufactured in China with the knowledge and consent of the CCP. So a hundred thousand Americans are dying completely unnecessarily because the CCP and indirectly Mexico and Canada aren't willing to do anything about it.
Speaker 7:Trump has told China and will continue to tell China that when you stop allowing the precursors of fentanyl to be produced in China, we will relax some tariffs. It's much better if a hundred thousand Americans are alive even if the stock market goes through a day of turmoil.
Speaker 1:Mhmm.
Speaker 2:What, historical precedents are you digging into? We've seen a lot of people, calling up Bretton Woods, the gold standard or depegging. What are you looking to to kind of inform lessons? Ben Thompson today was writing about how the Nixon shock was received very well from the public. The New York Times was raving about it.
Speaker 2:The market jumped way up, but over time, it became very, very it was a very rough decade, in the seventies. What are you looking to to inform, where we go from here?
Speaker 7:Well, I think, first of all, just 02/2017 to 02/2020, the first Trump administration, was a massive success. Until COVID was unleashed arguably, you know, potentially arguably through misfeasance, malfeasance or negligence in the American people and the blue states and the blue cities shut down, this was an incredible economy. We had high growth and low inflation, everything we want. And so despite that two despite that three year trajectory, we also increased tariffs massively, strategically. And so and every economist, by the way, was wrong.
Speaker 7:There's a list, a laundry list of economists that said tariffs wouldn't work in the first administration. So they were wrong then, and they're gonna be wrong now. So that's the most relevant history, and it's pretty predictable. I do think that that was posed, which I retweeted, is interesting, which is this is definitely an intentional strategy to kill globalism and reshape the political order and the global order. Absolutely.
Speaker 7:And so I think the implications of that will take months, years to play out. I don't think you can, you know, look at the stock. I think it's a fool's idea, you know, sort of a fool's crusade anyway to look at, you know, the hourly or daily, trading on the stock market as a, you know, indication of the wisdom or quality of a particular policy. Just today, a loan, we've been up, down, up, down, up. Yeah.
Speaker 7:Like, it's it's it's crazy to evaluate policy from that perspective. So I do think that we will see this administration execute on challenging the CCP's threat posed to The United States in the democratic order on multiple fronts, AI, winning in AI is ex existential, on fentanyl and on their attempt to expand their influence in Taiwan and
Speaker 2:Yeah.
Speaker 7:Various other key supply chain moves. I think The United States will be closer to the Monroe Doctrine, if you wanna go historical, where expansion of The United States is a positive expansion of influence, but expansion of land mass. I think the Panama Canal is a very serious agenda item. Greenland is a very serious agenda item for this administration, and we're gonna continue to think that way for the first time since, you know, president Monroe.
Speaker 2:At the same time, if there is if the market continues to crash, maybe we even go into a recession for a couple quarters, You could see consumers tightening their belts. You could see investors tightening their belts. What advice are you giving to founders in your portfolio today about how to deal with maybe it all works out like you're proposing, but it could be a rough couple quarters. What are you what are you advising folks?
Speaker 7:Well, it's uncertain. So I think the best way to approach from an entrepreneurial standpoint is uncertainty is you have to have scenario planning.
Speaker 5:Mhmm.
Speaker 7:Probabilistic scenario planning. Like, if if accident, I would be wise. However, I don't agree that we will go into a recession. I don't think we should go into a recession. I don't think we should accept that as, a reasonable approach.
Speaker 7:I think we need to cut interest rates, which I think there's gonna be some movement on. The evidence is that inflation has been solved by this administration already. You know, you wait for the official government print at CPI numbers, but there's better and more accurate metrics like call to inflation that show you in real time, and we're down to, like, a 1.28% inflation. So it clearly lowered rates safely. As I mentioned, energy prices, oil prices, you know, continuing to crash, and that's gonna continue to happen as long as we explore alternative energy, but drill and proven reserves.
Speaker 7:So I think those are major inputs in allowing people to spend money. There is a wealth of fact, and it is important to know, you know, that it's been studied pretty accurately, that if if people's savings in, you know, four zero one k's and various other, stock like instruments go down, they may spend less.
Speaker 1:Mhmm.
Speaker 7:And that's not necessarily good. Now I don't think tariffs cause spending less directly. People talk about tariffs causing inflation. First of all, that's false. Like, definitionally false.
Speaker 7:Inflation is the rate of growth of crop and prices. Tariffs are, at most are a one time trade shock. So they can't cause inflation by definition. Second, I don't think anybody can easily model the impact. First of all, some countries are clearly gonna bring their, tariffs on The US down, maybe not all 70 companies, but some are already rushing to the doors, you know, to negotiate better trade deals with The United States than we've had in ten, twenty, thirty, forty years.
Speaker 7:So the net effect of tariffs may not even be even may not even raise prices at all. But even if it does, consumers are smart and savvy, and they compare and contrast. They substitute goods. So, you know, if the price of of a good from, let's say, somewhere in Latin America goes up, maybe the domestic equivalent Americans substitute for, and that's actually a cheaper product. So you have deflation, if anything, not inflation.
Speaker 7:And then it's not even that obvious because it they yeah. That's true of competitive like, directly competitive. Let's say you're buying coffee and, you know, coffee from Latin America gets tariffed and it goes up, but you can buy, like, cheaper, but let's say, less quality coffee in the next days, people substitute, etcetera. But maybe some people just decide to buy a self sale instead. And, like, so all the people who are alleging that there's these studies absolutely do not know how the American consumer is gonna substitute from Latin American expensive coffee to American domestic coffee to Celsius and at what rates.
Speaker 7:And so that's why nobody really knows the net effect. But I think if you even if you have I I saw best estimate that even these very high tariffs on on the CCP in China, which are warranted, probably add something like 70 basis points of cost across all goods from China over five years or something like that. And I don't know exactly how we did the math, and I don't have time to, like, rebuild the spreadsheet. But people definitely are overrating the impact that tariffs have because consumers vote with their feet. And that's part of the point is they vote with their feet for products that are manufactured in America that are not subject to tariffs, whether they're American automobiles.
Speaker 7:So for example, some people are like, well, why would you, you know, care? Apparently, a Chevrolet, like, one of these, standard model Chevrolet, like, SUV things, cost a hundred $70,000 in Norway. Well, of course, no Norwegians are buying a Chevrolet Tahoe, it actually is, at a hundred and $70,000. Whether they call it a fad or call it some other policy or something less, it's clearly it's clearly discriminating against American goods and causing Chevrolet to manufacture less than a fair and free market across the world would, you know, sort of naturally stabilize in where equilibrium would be. So we need to address this, but the most important thing is we need to achieve foreign policy objectives.
Speaker 7:Economic economic tools are better than, military tools. Secondly, we definitely need to crack down on fentanyl. It's this, you know, unbelievable how many people die compared to, like, COVID or Vietnam. And the American people, you know, have accepted politicians doing almost nothing about it, and we need to stop that. And then third is we need to set the platform for a century of prosperity.
Speaker 7:And eventually, this burden of debt, which is exceeding the defense department budget and growing at 40% a year is completely unacceptable. It was eventually gonna crash us into at least a recession, if not something severe you know, significantly more severe. So president Trump at least has the courage to address fundamental root causes of economic challenges that most American presidents have avoided confronting since the nineteen eighties.
Speaker 1:In Ray Dalio's, post, which you mentioned earlier, he has a bunch of different points. One of them, he says, is, sort of part of this whole conversation, which which is amazing changes in technology such as AI will be highly impactful to all aspects of life including the money debt economic order, the political order, and the international order. There was also a post, from a friend of ours, Will Menidas the other day where he said, worth figuring out what happens if LLM stagnate at one to two x what we have today. Smart enough to slowly displace all low skilled digital work and things like call centers. No loss for lawyers, doctors, bankers.
Speaker 1:This is very good for The US and very bad for elsewhere. I'm curious how you think about all of this, you know, sort of drama around tariffs with the backdrop, this sort of like looming, you know, AI steamroller, like coming to transform the economy in many ways?
Speaker 7:Well, it is gonna transform the economy, but historically speaking, technology has unlocked new opportunities rather than completely suppressed the of humans to thrive. So for example, when I was growing up as a lawyer, actually, I had a secretary. Literally had a secretary. And the idea that an individual associate would have a secretary today makes no sense. Yeah.
Speaker 7:But, obviously, once the, you know, Microsoft innovated with, actually, Microsoft Words for Lawyers, actually, that's what it was called, there was it became less needs for secretaries. But and my secretary was highly compensated at a law firm in New York City, in Washington, DC, Hundred Plus Thousand Dollar jobs. These this whole workforce has migrated into other higher productive, you know, things to do. And so it'd be inconceivable for me to wake up and, you know, literally expect to have a sector. So I think that is the history of technology.
Speaker 7:I think AI will actually displace lawyers, accountants, investment bankers more rapidly than the middle and certainly faster than manufacturing. I mean, obviously, it's a hyped area of venture now. It's robotic innovation. AI meets robots with the software, hardware, the intersection of the two. But if you've ever been in a light industrial warehouse, I I think that's years out where it's replacing lawyers, you know, can be done much faster and much better, cheaper, less annoying.
Speaker 7:Replacing doctor, you know, it Vinod Khosla, you know, who runs Khosla Ventures, wrote a paper, I believe, in February '12 about AI, how AI was gonna replace doctors. And, you know, I think that is much more realistic in the short term. And they give we'll give people access, lower cost, which will bring health care costs, you know, it's roughly 22% of the g d GP or somewhere like that now. So if you bring down the cost of health care, that also affects whether we have inflation, the disposable income that a consumer has. Obamacare has been a massive disaster.
Speaker 7:The costs are up five x on the average health care plan than before Obama. The American American people just don't have money to spend on disposable income on disposable discretionary purchases. So even if tariffs raise things by 1%, if you bring down the cost of health care, the cost of energy, allow affordable doctors, you know, there's so many offsets that are much, much better and much more fundamental and durable than worrying about a onetime tariff. Personally, I would go with a flat tariff of, like, roughly 10% and then extremely high tariffs on China. I think Druckenmiller is more right than wrong, but I trust treasury secretary to calibrate this correctly.
Speaker 1:How do you think about entrepreneurs coming to pitch you today that that wanna, you know, be a part of this sort of reshoring, onshoring manufacturing? There's fortunately a bunch of companies that have gotten started in the last few years that were focused on manufacturing. But I'm curious, you know, what the playbook sort of you're giving them, how you think about the space, and how you think of manufacturing broadly as a venture investable category, if it is at all.
Speaker 7:Yeah. That's a it's a great question because, you know, venture is probably like 4% of the capital, that funds, you know, sort of start ups. And it's not appropriate for many, many, many great or good or great businesses. Venture capital is designed for high risk, high reward, explosive opportunities, and those are rare. Manufacturing usually does not meet that standard.
Speaker 7:It's really hard to scale manufacturing, like, a thousand x year to year. And so I do think we need to look at alternative source of capital for innovation in manufacturing, and there will be some where venture is appropriate. But just like there's only some financial services innovation where venture is appropriate, there's only some transportation opportunities. There's only some in health, actually. Like, what fraction of health care, you know, dollar venture dollars going to health care is a fairly small fraction.
Speaker 7:And so I don't think venture is the panacea. I also think to go back one question a bit is, look. When when I I invest in c rounds and series a rounds predominantly. That's my sweet spot. I'm taking an eight to twelve, maybe fifteen year view.
Speaker 7:So what tariffs do today should not be affecting the people pitching me, the people that my evaluation, my criteria for something that's eight to ten years in the future, completely, like, ridiculous. That said, anytime there's massive, sort of turmoil or flux in the system, it's a really great time for an entrepreneur. So I I have a back of the thesis that the more flux there is in any market or system, it's a really great time because inertia is not your friend. Let's take take a step back as entrepreneur. Inertia is not your friend as a founder.
Speaker 7:You have to convert inertia and create momentum in a physics sense. And so when the world is kinda moving around, it's the best time to start a company. So I think now is a wonderful opportunity for everybody who's stuck at some large company, not being challenged, you know, etcetera, to look at starting new companies and be innovative because the world is in flux in all the dimensions that Dalio outlined so well.
Speaker 2:Yeah. Can you talk a little bit about deregulation? You said you're, optimistic there. On the White House's website, they're kind of claiming that they're not gonna create new agencies, and, there's the one in, 10 out regulatory budget. But we haven't heard very many concrete details of what that could look like.
Speaker 2:What are you optimistic about on the deregulation side? What's the topic?
Speaker 7:Well, so I think that standard of, you know, for every new one, you have to eliminate 10 sounds great. Yeah. And of reset the equilibrium. We've been overregulated. I think it's it's, you know, cabinet secretary agency specific.
Speaker 7:And, you know, only recently have we seen the staffing of these agencies, you know, get confirmed by the senate. You have to remember, the administration starts on January 20. The cabinet gets confirmed typically pretty quickly, call it a couple weeks, but then they have deputies, secretaries, undersecretaries. These are the people that are the political appointees that drive the administration's agenda. Most of the departments do not have even half of their political appointees confirmed by the US senate.
Speaker 7:So you're asking the secretary. Let's imagine, like, the secretary of state who's got to, you know, work out of Panama Canal, help negotiate various economic things, solve wars globally, blah blah blah blah blah, and doesn't have his full staff. Or the you know, the left is assaulting the administration every day in in all these district courts, you know, this kind of absurd district court litigation. Well, it's it's really unfair to the attorney general when she doesn't have her team confirmed. Last I looked, and hopefully, this has changed or will change imminently, the solicitor general of The United States, the principal, like, appellate lawyer who's supposed to quarterback all of this strategy has not been confirmed by the senate.
Speaker 7:So people are taking advantage of vacuums in the presidential staffing. And I think this is, you know, artifact of history when the world moves more slowly, maybe new presidents acted more, you know, cautiously perhaps, but slowly. And so there was more time for an administration to get staffed, but with an agenda where Trump's running a, like, sort of a no no huddle playbook. You know, he's like boom boom boom boom. Next step.
Speaker 7:Like, this this
Speaker 2:is literally way to describe it ever.
Speaker 7:Yeah. It is it's intentional that, hey. There's a lot of a lot of things to fix. He's had four years to, you know, contemplate what to do. But secondly, just like the no huddle offense leaves defenses, you know, kind of befuddled.
Speaker 7:This is the intention to only keep the Democrats in the left, you know, not able to keep up, and that's what's happened. Legacy media can't keep up. Like, what's the latest thing to complain about? Oops. The news changed yesterday.
Speaker 7:Sorry. Okay. We're out for an next CEO. Yep. But in any event, you need a more modern confirmation process, I suspect, to allow an administration to take office with their core team that can execute.
Speaker 7:Otherwise, you're gonna see things, mistakes made, things broken. It's it's just not an it's not reasonable to ask an administration to fix everything with one tenth their team or one third their team. And so we have to really revisit this. And this is a this should be bipartisan because there will be a democrat president.
Speaker 2:Yeah.
Speaker 4:And they're
Speaker 7:gonna want to appoint he or she's gonna wanna appoint his or her nominees, and the senate's gonna have to act with dispatch to allow that president to exit.
Speaker 4:Mhmm.
Speaker 7:And if anything, the velocity in the world with a free form of information, things like x, is gonna accelerate, not decelerate.
Speaker 1:Yeah. One last question for me, and then I'll hand it over to John. Hopefully, one's quick. Do you think we should be taking more decisive action against UniTree, robotics, DJI, groups like that in terms of just blanket bans? Like, tariffs are a good start, but potentially not significant enough.
Speaker 7:Yeah. So absolutely. I mean, we talked about this before, but TikTok is a threat. I think DGI is even worse, probably. And then advanced robots manufacturer in China, are probably an order of magnitude more threat, and these things could run 17 miles an hour.
Speaker 7:They have military applications. You know, there's a tweet I posted yesterday that retweeted some of the that's already embedded in the Chinese robot.
Speaker 1:For context, they discovered a remote access backdoor in the robot dog from unit tree. Yeah.
Speaker 7:So I I I, you know, I think we can take this very seriously. I hope the administration and the legislative branch acts on this very quickly. I think there is a lot of attention being paid to this. So I think there'll be some traction here, but it absolutely, we need to be very we need to take this stuff very, very seriously.
Speaker 2:Yeah. I wanna let you go, but I wanna give you a chance to respond to this Derek Thompson post. He was asking, how do you know if your plan to shock the system is failing? One of the confusing aspects of the tariff defense is the idea that every event justifies the strategy. Stock market goes down.
Speaker 2:Oh, we're just taking our medicine. Stock market goes up. It's so it's so obvious it's working. Have you had a chance to think more about his, his critique?
Speaker 7:Yeah. As I said, it's a very good question because I think anytime you have a new strategy, whether you're in a startup or in politics, you wanna have directional feedback. You know, is your nose, you know, nose is playing going up or down and stuff like that? A bunch of force crap. So I think on the fentanyl stuff, it's pretty easy.
Speaker 7:We need less fentanyl deaths, which is less fentanyl being important to United States, blah blah blah blah.
Speaker 6:Mhmm.
Speaker 7:On the economic front, I think definitely the yield various yields on our debt are pretty critical. It does seem like that best is managing towards that. I think we need the inflation we need inflation to stay lower or be slightly lower so that interest rates can come down, which accelerates growth and makes homes more affordable, which is absolutely critical. So I think those are easy relatively short term metrics to look at. Whether this whole reinventing the global order is working or not is gonna take time.
Speaker 7:For your point about Ben Thompson's post about Nixon, that is not gonna be measurable, you know, overnight and maybe not even this year. I think we'll have visibility into it by the midterms. You know, with Thatcher and Reagan, the closest metaphors I think about is both Thatcher and Reagan inherited economic basket cases and geopolitical basket cases in many ways. And it took both of them a year or two of pain, but then everything was up into the right. And, you know, morning in America, in the famous Reagan reelection, Thatcher went through a very tough one or two years when, you know, she mentioned this lady's not returning is because she was actually cutting some spending, allowing for the the you know, getting out of stagflation, rebuilding in the military in UK, etcetera.
Speaker 7:But I think two years is a pretty realistic time horizon.
Speaker 2:That's great. Well, we'll let you go. We know you gotta get out of here. But thanks
Speaker 1:so much for
Speaker 2:stopping by. Always a pleasure.
Speaker 1:Great talking
Speaker 7:to pleasure. Thanks.
Speaker 2:We'll talk
Speaker 7:to soon.
Speaker 1:Cheers.
Speaker 2:And our next guest is coming in in two minutes, but we gotta talk about numeral sales tax on autopilot. Spend less than five minutes per month on sales tax compliance.
Speaker 1:That's gone. Newberl put sales tax on autopilot for leading ecommerce and SaaS companies. It is the platform for sales tax compliance.
Speaker 2:We have a 4.8 on g two cloud. That's the review service that's Yelp for SaaS. You know, we love Yelp
Speaker 1:for SaaS. Hit it again. 4.8.
Speaker 2:They're backed by Y Combinator at Benchmark. Go check them out.
Speaker 1:Benchmark series a.
Speaker 2:E commerce. I mean, now is the time. You're gonna have to be figuring out tariffs. You're gonna you don't wanna be slipping on your sales tax
Speaker 1:as well.
Speaker 2:Head over to numeral HQ. Let's do it. I also want to review quickly how'd you sleep last night? Because we are sponsored by Eight Sleep, baby. Eight Sleep.
Speaker 2:Go to eightsleep.com.
Speaker 1:I had a it felt rough. Yep. Still got an 88.
Speaker 2:White Lotus threw me off a little bit. I got to bed a little bit later. Got an 86. I only slept for six hours and thirty four. It was a long episode.
Speaker 2:It was
Speaker 1:I was so I I an episode. Planned my sleep around it being like fifty six minutes.
Speaker 2:And then I
Speaker 1:by Mike White. And then I yeah. Halfway through, I pause it and it's like I thought we were halfway through and it was like fifty four minutes left. Said, great.
Speaker 2:I I was rushing to be like, I I need to start this at 08:30 or else I can't get to bed by ten.
Speaker 1:You know what? I had no difficulty waking up this morning. Yeah. In part because of autopilot. Yeah.
Speaker 1:It was adjusting the temperature throughout the night.
Speaker 2:Yeah. And part because you know It's also
Speaker 1:been hot. We also leaked
Speaker 2:some information. Jordy was repping 02:25 today. They leaked We're gonna leak it.
Speaker 1:I was. Don't don't put up
Speaker 2:press release. Don't that. Share that.
Speaker 1:Don't just leak it out. It was it's Monday. It's great. It's chess day. National chess day.
Speaker 2:Push day.
Speaker 1:Yeah. Also we also got a little sun yesterday.
Speaker 2:We did. We were
Speaker 1:hanging out with Justin Mares and and I honestly was Yeah.
Speaker 2:We had an in person guest for our off pod pod.
Speaker 1:Yeah. Yeah.
Speaker 2:Yeah. You get us together.
Speaker 1:It's awesome. Got Bryce in the waiting room.
Speaker 2:Bryce, how you doing?
Speaker 1:Wow. Look at this background.
Speaker 5:Brethren, I'm doing great. How are you all?
Speaker 2:We're great. Thank you. I mean, things are good.
Speaker 4:Was was
Speaker 5:George stunting on his reps? How many did we talk about how many reps he did or was it just Well, we haven't leaked that.
Speaker 1:We haven't leaked that.
Speaker 2:Yeah. You just wanna get the story going in the press. Hey. Hey. The company's for sale, probably in the billions.
Speaker 2:We're not gonna tell you exactly.
Speaker 5:No. No. Exactly. X x x is a a flutter about this these reps. They're they're pining to know.
Speaker 1:Yeah. Yeah.
Speaker 2:We know you respect the Church of Iron. We've seen many photos. So welcome to
Speaker 4:the show.
Speaker 2:You fit right in.
Speaker 1:Wait. You're traveling now? Is that right?
Speaker 5:I am. Yeah. I'm on the road right now. In Oakland, California right now. About to head over the Oakland Bay Bridge.
Speaker 1:Very cool. Well, thanks Wow.
Speaker 2:Taking a dreams.
Speaker 5:Out of
Speaker 1:belly into the belly of the beast.
Speaker 5:Belly of the beast.
Speaker 1:What what, what brings you to San Francisco? Meeting Founders?
Speaker 5:Meeting Founders. We're recording some stuff, and, I'm trying to get here more consistently. I live in Utah, and it's just a quick trip. There's enough going on here that I've recently decided it's gonna be kind of a weekly adventure out here in San Francisco. Nice.
Speaker 5:So I'm gonna try to try to keep that pace up for a bit.
Speaker 1:Wait. Weekly? Weekly. That's I
Speaker 5:did that for the first five years of starting OATV back in o five. I commuted here, once a week for five years.
Speaker 2:I think if you're going to San Francisco, you shouldn't go weekly. You should go strongly. But
Speaker 6:Oh. Very good point. General.
Speaker 1:That's great
Speaker 2:point. When you're in a business doing business, you want to be there strongly, not weekly.
Speaker 1:Wait. So so weekly, I'm just I'm just curious not to get too into your personal life. Do you just get an apartment and, like, because you're there so much or are you a hotel guy or a wander guy?
Speaker 4:Hotel guy. Hotel guy.
Speaker 1:Hotel guy.
Speaker 5:Hotel can't can't do Airbnb's, can't do Too can't, you know
Speaker 2:Well, you gotta try wander. Wander Com. Code TBPN.
Speaker 5:That was an incredible setup.
Speaker 6:Yeah. Yeah. I mean, it's said you. Yeah.
Speaker 2:I think
Speaker 6:I'll change it too. We'll have you back on,
Speaker 2:and you'll tell us how
Speaker 1:We don't do we don't do Airbnb's either. Yeah. But
Speaker 5:We do go. But Wander
Speaker 1:Yeah. No. That that that's cool.
Speaker 5:I'm gonna
Speaker 4:have to look into this.
Speaker 3:What was
Speaker 5:the what was the code again?
Speaker 1:It's easy to remember.
Speaker 2:Yeah. You can find your happy place. You can book up Wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning, and twenty four seven concierge service. Basically, Bryce, it's a vacation home but better. So, yeah, check it out.
Speaker 7:Laundry.com. To
Speaker 5:get one with an eight sleep in.
Speaker 6:Oh, absolutely. We can figure we
Speaker 2:our people will talk to your people. Cool.
Speaker 1:Figure it out.
Speaker 2:Anyway, we wanna have you on for a
Speaker 1:real Talk about it it feels like Indy is an, you know, traditional venture firm but built for good times and bad times and scary times and fearful times. And right now there's been there's been a lot of fear in the market. You came out and
Speaker 2:Are you being greedy while others
Speaker 1:are Yeah. It's possible to be greedy but pragmatic. Yeah. I think that that what
Speaker 2:That's what we actually wanted to talk about. What? Advice for entrepreneurs, founders in the midst of market turmoil. Maybe it doesn't affect their business today, but they're seeing bad news, and that's gonna put up you know, you know, their customers are gonna be worried. Their employees are gonna be worried.
Speaker 2:Their potential investors are gonna be worried. What advice are you giving to founders these days?
Speaker 4:Well, you know, like
Speaker 5:like Jordy touched on, I mean, part of our whole thesis is traditional venture, same type of upside, but a different approach to building your business. So, you know, the approach most people take today, you know, they go and raise their seed round, their pre seed round, or whatever it is. And then the objective of that round is to get to the next and the next and the next. And so you're oftentimes kind of anchoring on what that next fundable milestone might be, and it takes a bit of a different approach. So our companies are kind of the default we set is, like, let's have that be the last round you need to raise, and then you can kind of be a lot more offensive as you build your company so you don't necessarily need anybody else's permission to exist.
Speaker 5:So with that being the case, I think there's kind of two you know, I tweeted this out last night. We talked about it little bit. You know, there's kind of a few approaches to take with an indie company specifically. Mhmm. You're you know, you have in many cases, you have infinite runway.
Speaker 5:And so you get to operate, and you can message in a very different way. So part of what I said is hunker down, you know, conserve cash. I don't think this environment goes away anytime soon. Mhmm. So I think people need to be preparing, for you know, to be long term focused, and what that often means is, you know, getting getting the house in order.
Speaker 5:Because right now, we've been playing the lottery, and it's time to play, you know, it's time to play chess. I think that's to me, that's a really important distinction. So much of how we've conditioned entrepreneurs is to kinda play for these lottery tickets. So it's all about fundraisers to get it in the next round. We're trying to kinda work with people to play chess through this because I think the game has fundamentally changed.
Speaker 5:As you you know, I I I'm been in venture for a long time now. I came in in 02/2001, so immediately after the .comcrash. So I've kinda lived through the .com. I've lived through the financial crisis. We've lived through ZERP.
Speaker 5:This one, you know, echoes the same, but there's some very fundamentally different dynamics going on here that are gonna influence the amount of capital that's available to entrepreneurs over the next few funding cycles. Mhmm.
Speaker 1:In some ways, we were talking about this earlier with Logan Bartlett, but one one thing I've been maybe paying attention to is the is the categories that felt overheated, AI, defense tech, robotics. In many ways, like, the the sort of tariffs would just encourage, like, you know, more investment. And I imagine, you know, we we had, like, Chris Powers on last week, and and he's been, you know, banging the the reshoring drum. But, yeah, I guess, like, do do you think that do you think that over the next, like, couple months, we'll see, like, a pretty big slowdown in investment activity or just, like, refocusing? Or are you just less interested in like predicting investment volume and and more so just in any whatever the future holds just like run a tight ship?
Speaker 1:I,
Speaker 5:you know, I I think I think I'm always a fan of running a tight ship. You know, I feel a bit like, you know, it's Groundhog's Day today. You know, I'm waiting for Sequoia to drop their memo. That would be the third time.
Speaker 6:Yeah. I see.
Speaker 5:And and you know, it it does feel like we learn the lesson, and then we kinda go right back to the same behavior that got us in the problem in the first place. Not kind of globally, but I think specifically to, the startup ecosystem specifically. You know, we came through ZERP. Everybody wanted to get really tight, and then the money started flowing again. And, basically, kind of people shifted to the, you know, the current narrative, whether that is defense tech or AI or one of these things.
Speaker 5:I think what fundamentally changes this time is you you saw last week, Klarna pull quietly pulled their IPO on Friday. You know, this what you would call the denominator effect in venture, like, that name gets thrown around a bit, so I'm happy to explain it if someone hasn't already hit it today. But I think that denominator effect is probably more pronounced than I've ever seen it in my venture career, and that's gonna cause the longer term liquidity issues. You're you're talking
Speaker 2:about denominator.
Speaker 5:Jordy in terms of kind of how what the funding cycles look like over the next, call it, year or two.
Speaker 2:Mhmm. Yeah. Yeah. Can you unpack the denominator effect a little bit
Speaker 5:I mean, the denominator effect is is basically that, traditional institutional LPs have allocated a tremendous amount of money to the venture and private equity asset class. So the top line number isn't the, you know, the the returns that are coming back from those investments don't come anywhere near to the size of allocations they've already made. So another way to frame that is LPs are out way over their skis on venture and private equity, and there's no there there's no relief coming in terms of returns. So Klarna pulls their IPO. You know, you've got this kind of regulatory uncertainty.
Speaker 5:There were a bunch of people cashing Figma checks a few years ago. Mhmm. That never materialized. And so you've got this real issue now that I think is really acute, and I think it's already even starting to show up. Like, if you look at that $40,000,000,000 OpenAI deal that that Masa just did, right, how much of that is actual cash?
Speaker 5:How much of that is credits? How much of that is debt that he's gonna have to go out to find and service? Like, the financial market the financial picture in startups, I think, is a lot more murky than I've ever seen it before. And so counting on either support from your existing investors or a next round materializing over the next eighteen months if you aren't just, like, absolutely crushing it and putting up insane numbers like I'm sure most of your audience does. But in that case, unless you're just such an obvious pick, the sidelines are gonna be filled with people cheering for you.
Speaker 2:Can you talk a little
Speaker 1:bit about that? Was honestly seeing the tariffs, the trade war, and if rates come down, that kind of saving Masa in the sense that pulling together $40,000,000,000 by Q1 of next year, which I think is the target, a lot of it's coming from debt. You can obviously secure it against you know, ARM and whatever else he's doing. But still it's a lot easier if rates drop, there's a trade war happening and it's like where do you put your money if if if you want to try to generate any type of return that's not. But but who knows?
Speaker 1:What were you
Speaker 2:gonna say? I I I was gonna ask for a little deep dive on some of the buzzwords in the founder world, specifically the difference between boot scaling and indie. You had a post about this. But
Speaker 1:I liked, Uno corn.
Speaker 2:Yeah. Yeah. Yeah. I
Speaker 3:I wanna
Speaker 5:know more about this. Wild.
Speaker 2:Yeah. Yeah. There there's a lot of there's a lot of phrases out there. And I think that, you know, obviously, there's a little bit of hype around these, what does founder mode really mean or whatever. But they are useful tools, and I'm a big fan of trying to
Speaker 1:do it.
Speaker 5:So The the the memetics of it are great.
Speaker 2:Yeah. So so No.
Speaker 5:I mean, I I would say you know, you you touched on a few of them. I mean, Jordi jokingly kind of, amplified one from this morning. Somebody sent me an article they were writing that included Indy, and and they called companies who raise one round of funding Yeah. With the intent that they're gonna get profitable and scale from there as an unicorn. So, yeah, only one brand.
Speaker 5:So people are very creative.
Speaker 2:Yeah. Zapier is a good example of the Uno corn.
Speaker 5:Right? Zapier is a great example of that. You know, Calendly, until they did their growth round, was was a great example of that. There you know, I think this is a small but growing cohort of companies that are kind of working towards that as an objective, not necessarily to, kind of prove a point, more to kind of control their own destiny and to not be so at the whims of these financial markets they're they're whipping so intensely. And, also, you know, kind of putting putting their customers before their investors' needs.
Speaker 5:I think this is the this is kind of a growing you know, what we see is really growing trend in terms of you know, there's there's kind of a this massive wave of returning founders who had built through financial crisis or built through Zurp, who've kind of lived through this kind of treadmill of an experience as an entrepreneur who are looking for a different way to do it, and we hope we can be their partner. But I think you hit on a few of those other terms, right, of boot scaling. You know, the idea with that one is bootstrap for a little bit and then raise money to scale later on. So kind of merging those two ideas. The other one, I think, was seed strapping.
Speaker 5:Right? So again, that idea of
Speaker 2:A lot of portmanteaus. A lot of portmanteaus on the
Speaker 5:You look, hey, you know, I no no judgment, but tech hasn't exactly killed it on the marketing front of Yeah. Naming some of the stuff. But, yeah, the idea with seed scale is, like, raise one round and then scale it, you know, as much as you want, on the back of yeah. I think the the tweet you mentioned was, like, you know, I basically was framing those two really as, like, fundraising tactics. You know, that that's that's still fundraising is still core to that idea.
Speaker 5:And I think with India, you know, what what we'd like to embody is this idea of independence, of this idea of kind of controlling your own destiny, of building things that don't have to ask permission to exist. Mhmm. And I think as we get to, you know, this kind of inflection point in tech, whether it's in the financial markets or in this kind of new and evolving technologies coming, you know, we want lots of possible futures. We don't just want the one that's blessed by a 16 z. We don't just want the one that's blessed by Sequoia.
Speaker 5:We want we want futures that could be, possible with or without their participation or with their blessing. So I I think the world gets a lot less interesting once you start having to ask for permission to exist. Yeah.
Speaker 1:Are you are you bullish on the app layer? I imagine if you want to scale efficiently right now and build an AI, you're not getting into the foundation model
Speaker 2:SSI is technically a unicorn.
Speaker 1:Yeah. Yeah. Yeah. One round.
Speaker 4:That's right.
Speaker 5:Yeah. Exactly.
Speaker 2:Most of them are foundation model companies actually.
Speaker 1:They hacked.
Speaker 2:Straight to unicorn. One round.
Speaker 4:Yeah. One round.
Speaker 5:That's it.
Speaker 2:They didn't have to raise a ton of rounds to get to a billion dollar valuation.
Speaker 1:Yeah. But you're you're Incredible. That's what do. You're gonna be s s f later. Like, what what are you looking for?
Speaker 2:That feels like the place to build an indie company is in the wrapper layer that's overlooked by VCs. Maybe it's not power law company, but you could build a fantastic business delivering amazing stuff. I'm super bullish on it, but I wanna know what you think.
Speaker 5:No. Super bullish on it too. In fact, I think you have Rahul coming on after me, and we we've had this kind of ongoing multi, you know, multi month, multiyear conversation going around, kinda high status and low status startups.
Speaker 2:Yeah.
Speaker 5:Yeah. Yeah. And the, yeah, the kind of high status, have to raise a ton of money or at least look like you have to to kind of position like you're really, really innovating. Mhmm. I think those are so they're such a head fake here in the Bay Area specifically because the kind of social strata is so funny.
Speaker 5:I think, John, you hit on it. Like, I think that that app layer is where so many incredible breakout indie companies can be built because you're now talking about, you know, swapping out any of those models, and you get a benefit from all those improvements and just focus on a customer and their needs and the opportunity of a market. I I think it's I think it's a huge opportunity that doesn't feel at all like you have the same kind of network effect lock ins that you had with, like, Facebook back in the day or when Twitter turned off your API access. I think so many of these models are, like, hypercompetitive in terms of what their performance and output actually looks like that you can build incredible experiences off of those that could swap pretty easily between them.
Speaker 2:It's Yeah.
Speaker 5:Yeah. I would think of them more like moving from, you know, Google Cloud to AWS. Right? That feels like more of the analogy than like a, you know, the dependency of of Facebook and their platform.
Speaker 2:Yeah. Yeah. That makes a ton of sense. You got a last question or
Speaker 4:we're good?
Speaker 1:No. This is great. Yeah. This is ask you how you're, you know, offline, how you're trading the tariffs in terms of, like, you know, Japanese fashion and Yes. That's right.
Speaker 1:Collectibles, which I'm sure you're I'm sure you're
Speaker 5:I knew I knew that I knew the fit check was coming at some point. Fit check.
Speaker 4:Fit check.
Speaker 2:This is great. This is great.
Speaker 1:Always a pleasure. Bryce, have fun over across the bay. Yeah. Enjoy. Looking forward to the next one.
Speaker 2:Yeah. We'll you back on soon. Thanks so much.
Speaker 1:Okay. Cheers. Appreciate it.
Speaker 5:Take care, guys. Bye.
Speaker 2:Well, next up, we have Rahul Sonwalkar coming on to talk about Julius. He has a bunch of interesting traction on his startup and did just did a podcast with Bryce, actually. But, we'll we'll talk to him about rappers and high status and low status, startups and everything in between as soon as he joins.
Speaker 1:I'm excited.
Speaker 2:In the meantime, if you're looking for something to do while we're waiting for our next guest, why don't you just go sign up for Ramp? Time is money. Save both. Easy to use corporate cards, bill payment, accounting
Speaker 1:This is a ramp. This is the economy that Ramp was built for.
Speaker 2:It really was. You know, during the during the the major sell off post SVB crisis, like, one of my hacks actually, this is gonna sound like a crazy ramp ad, but one of my hacks was just cancel all the credit cards in the company and then just reset. And you reissue someone a credit card, and then you have some marketing person who's like, yeah, you know what? I was signed up for three SaaS products that I didn't need. And I'm just going to renew the one that I'm using.
Speaker 2:And when you do that, like, now there's, like, credit card updater that can kind of, like, get you on anyway. But for the most part, it's just, like, resetting, and it allows you to cut your burn a little bit. But you don't need to do that with Ramp because you have full visibility in this stuff. And if you're actually Yeah. Is is the best this is the best product for
Speaker 1:us. This is yeah. For my personal Yeah. Card needs, the thing I find most frustrating with credit cards Oh, yeah. Is canceling an Amex card and seeing the same.
Speaker 1:Have a VPN that's been charging me for years. I've I've had I've I've called support to try to get them to remove it. We got
Speaker 2:Rahul in the studio. Welcome to the show. How you doing?
Speaker 8:Thanks for having me, guys.
Speaker 1:Oh, he's gotten the suit. He likes the suit.
Speaker 2:Thank you for dressing up. So good to see you, man. It's been way too long. It's I I think it's been, like, almost two years since we got dinner, but Weird. Thank you so much.
Speaker 1:Understood the assignment.
Speaker 2:Yeah. Understood the assignment. The just quick introduction on you, the company, what you're building.
Speaker 8:Sounds good. I'm Rahul, founder of Julius. We're building an AI data analyst. So if you have data on your hands, whether you work in roles like finance, marketing, operations, product, you need to analyze that data. AI can help you with that and Julius is the tool for that.
Speaker 1:Very cool. Dude, I'm just gonna start. You have 2,000,000 users?
Speaker 2:Oh, yeah. What? How do
Speaker 6:I how
Speaker 2:did that happen? Yeah. What's the secret?
Speaker 8:Yeah. A lot of it is word-of-mouth and some of it is SEO. So if you look up AI data analysis, Jules is the first result on the Internet Mhmm. On all search engines. Basically, turns out, like, analysis is a fundamental part of many jobs and people just kinda assume that it's a solved problem.
Speaker 8:Turns out most people don't know how to analyze data, and Jules helps them with that. So we I think we kinda found that that need and used AI to solve that problem for people.
Speaker 1:That's insane. Where where should we even start with this?
Speaker 2:I mean, I wanna talk about just like the culture of of this this whole meme of like a rapper. I think it's really I've I've said this on the show a bunch, but I think it's kind of like a sigh out from VCs to like not. Like, for so long, it was like, oh, like, you're just gonna get steamrolled steamrolled. Like, it's not it's not a viable place to build a monopoly business, a trillion dollar company. That's all you should be focused on.
Speaker 2:Go for broke. Now we're seeing, oh, the value actually accrues to the application layer. Oh, maybe there are tools that need to be used. But at the same time, like, if somebody said, oh, well, like, GPT seven might be able to do the same thing as Julius, like, I might hear them out on that argument. So how do you process it, and can you take me through your thesis on just companies that leverage foundation models instead of train them themselves?
Speaker 8:Absolutely. By the way, shout out to Sam Altman for for that steamroll sound bite. Think it really stuck a chord with the VCs. But, look. Turns out, like, you know, every business out there in the world is solving problem for people.
Speaker 8:Right? And as long as you're building something that solves a problem for people, like, that's all that matters. Your users aren't paying for a model. What they're paying for is this tool solving a problem for them. And if you can do that faster, easier, cheaper, that's all that matters to your users.
Speaker 8:Now, in terms of, like, models and, like, where does value accrue, I think a lot of early stage founders just get too caught up into that meta level thinking instead of just building something. Like, just go build something, talk to people, see if you can sell to one user. Can you sell to hundred users? And then worry about these other things. What the way it has played out is when we started, people told us, you're a rapper.
Speaker 8:And we would try to, like, fight that label. And then over time, we just learn to embrace it. Turns out, like, these models are they keep getting better. There's multiple model labs, AI labs that are producing really good models. And what that means is the differentiation is actually in the product layer.
Speaker 2:Mhmm.
Speaker 8:Can you create a differentiated product and an experience and a whole infrastructure to power that? Now is is that how it's going to play out forever? Depends. Turns out, like, your your product needs to have enough of a unique value proposition so that it matters outside of the models themselves. Mhmm.
Speaker 8:Like, for example, we have this infrastructure for code execution. Every 24 hours, by the way, every 24 hours, Julius writes and executes over 2,000,000 lines of code. Mhmm. And to serve that to our users, we serve, like, over a million Jupyter notebooks. Most of our users don't even know what a Jupyter notebook is.
Speaker 8:Right?
Speaker 3:Yeah. Yeah. You're a VP
Speaker 8:of marketing at a at a big company. You don't know all that technical details. All you care about is analyzing your data. And then how do we build that infrastructure to power that is really important. And because we have built that, models getting better actually helps us build a better, smarter product with all the infrared, all the UI, and the the interface that we have built.
Speaker 1:Yeah. How do you how do you think about companies in the space doing anything related to AI data analysis? There's companies, you know, coming out Some of them are building products for
Speaker 2:vertical, whereas this is just for investment bankers.
Speaker 1:Yeah. Yeah. Stuff like that. But but the the thing that comes up for me is, like, you clearly have chased hype from users versus hype from VCs. Right?
Speaker 1:Because some of these companies that have come come out, they maybe have like as numb the same amount of users as they have raised millions of dollars. Right? So it's like, you you know, other other companies in the space like with like 300 users maybe at some cool firms or whatever, you know, raising hundreds of millions of dollars. But I'm I'm curious even understanding like adoption at how your tool gets adopted at at, you know, big companies that might have some crazy procurement process, but then you just have like, they're just sign going over to Julius and being like, yeah, actually, almost the work that you're doing in Julius as kind of their own and they're just like pasting in a screenshot to some slide deck or yeah. I'm curious how you think about adoption and and maybe like, have you intentionally avoided hype throughout this entire process?
Speaker 1:Because like clearly, I would say like, yeah. Yeah. Anyways, just just take it from there.
Speaker 8:Absolutely. So I think you're spot on. You know, that's how users discover Julius. You know, they're looking for they're working a job. They need help in the moment to analyze data.
Speaker 8:They're looking something up on the Internet, and then they come across Julius. And once they start using it, slowly, what happens is they're able to, first of all, bypass all the procurement process and just get the value right away. But then analysis and insights are inherently shareable. So they start bringing their teammates, you know, onto Julius. Especially if it's a manager or an executive that discovers Julius, they bring the whole team with them.
Speaker 8:This is a early shout out, but we're we're about to launch real time collaboration in Julius. So you can collaborate on analysis with your teammates in in the product. And and that's going to be huge Yep. For collaboration in
Speaker 1:in Julius. Do you how do you think about much for data analysis. You you guys are the AI data analysis company, but how many of your decisions are based on
Speaker 2:Vibes. Vibes?
Speaker 8:A a lot of the so the for the channels that are established, for example, SEO, growth, all that, we use joyous pretty heavily, and it's also very data driven. Mhmm. For a lot of the exploration, it that's where we bring in a lot of qualitative data. Like, talking to five users that are superpower users and observing how they're using the product, what would they need, how do we some create a simple version of what they need so that many more users can actually access
Speaker 2:I have ton of questions on the actual platform. What models are working the best for you, and what languages are most popular? I know that Python's obviously super popular, but then a lot of data analysis use R and Julia even, which is kind of a funny name. Yeah. Are are you kind of language independent and then you just service the results?
Speaker 2:And then how much are you swapping models under based on, like, what's hot on Twitter today or x? Because you hear about a new model every day, but then, you know, is it actually worth switching?
Speaker 8:Yeah. Great question. So for the models, you know, it this changes quite often. But, you know, if you're watching this a month from now, it might be a different answer. But Mhmm.
Speaker 8:You know, usually, it's just OpenAI and Anthropic Mhmm. Doing a lot of the heavy lifting on the model front. Both both labs have really good models. We do work with other model providers as well in different parts of the stack. But, usually, it's OpenAI and Anthropic doing just a killer job there.
Speaker 8:In terms of languages, turns out, like, a lot of users don't know what Python is. You know? For them, it's just, like, something that the AI is doing to do the analysis for them, And they like seeing that, but whether they understand it is is, like, not that common among our users. Python is pretty popular as a default. It's just so versatile.
Speaker 8:Right? It's it's like the most popular language on GitHub. It's got the biggest ecosystem of modules and all that. So it gives you a lot out of out of the box. There's there's also R that we support, and we might add support for SQL at some point in time.
Speaker 2:Sure. Makes sense.
Speaker 1:Do you think the power of giving anyone in the world access to this sort of complex analysis is under just like priced in yet? Like, because to me because to me I think about, okay Yeah. Every Shopify store owner can now get the power of like this sort of like world class CFO for basically nothing. Right? They have their Julius subscription but it's not super consequential.
Speaker 1:That to me doesn't feel priced in because you can enable millions of businesses to run more efficiently and but I'm curious what you think.
Speaker 8:I think the market hasn't priced this in yet. In fact, the cost of getting an insight from the date from your data has gone down 99% in the last two years. And I think most businesses, whether small or big, haven't really, like, realized that value yet. You know, if you're a big company, you have to realize that every marketer on your team can now go do really deep marketing analysis, channel analysis within seconds using good product like Julius. Every finance person on your team can get financial insights within seconds or minutes using Julius.
Speaker 8:And these businesses, when we talk to them, most of them haven't priced us in yet. So I think we're gonna see, like, a big reckoning in the next few years.
Speaker 1:How do you advise your team around hiring and how do you think about hiring when you know how powerful these tools are? And, you know, I'm assuming you really push people to say like, you know, do we need to make this hire or, you know, I'm I'm I'm curious what you think.
Speaker 8:Hiring internally at Julius or just these companies?
Speaker 1:No. No. No. Just internally at Julius. Like, you know, today the Shopify CEO came out and with a leaked memo where he was saying like, hey, we're we need to be AI native.
Speaker 1:You need to question every single hiring decision that that you wanna make and compare it to just like getting that same service or value from
Speaker 2:Yeah. Models. But it's different at a high growth startup potentially. I
Speaker 8:think you guys had Keith on earlier today. Right?
Speaker 2:Yeah.
Speaker 8:Keith has this, like, memo about barrel and ammo. Yeah. Like, you you you don't wanna hire people that are ammo. You don't hire people that are barrels.
Speaker 2:Yeah.
Speaker 8:Like, I think what he's looking what he's what he's basically hinting at is you wanna find people that are multipliers. Mhmm. And so we look for people that are multipliers. You give them resources and they find a way to 10 x the value creation out of that out of those resources, and AI is a resource.
Speaker 4:Mhmm.
Speaker 8:Right? Really competent Beryl employee, a really competent Multiplier employee can take all the power of AI and just make a lot more happen in a shorter amount of time. And I think that's what we care about when we recruit at Julius. So whether it's engineering, like, what is their learning rate? Not not how much how much, like, hard skills they have in a particular area.
Speaker 8:All of that matters a lot too, but it's do they have this, like, massive learning rate where they can just pick up new things really fast and get really good at it and ship things, for marketing, similar things. Like, you know, you you may have experience with one particular thing, but the game is changing all the time. You have to learn how your users are talking. You have to learn where your users are. Can they learn all that quickly is what we care about.
Speaker 8:And with AI, it's just the people that are multipliers are going to get so much more productive and get so much more done. And that's that that's how our hiring philosophy works today too.
Speaker 2:I have one last question. We'll let you go. Can you tell me about HBS? What's going on at Harvard Business School? How did that come together?
Speaker 2:Tell me kind of the whole story and and how Julius is being used at Harvard.
Speaker 8:Absolutely. So Harvard is Harvard Business School is teaching analysis with Julius for the entire MBA class. So over a thousand MBA students.
Speaker 3:Wow.
Speaker 8:All kinds of backgrounds like investment banking, marketing Mhmm. Product managers, tech executive executives. All of them are learning to do analysis with Julius because they realize companies have data and business leaders need to make decisions, but analyzing that data is really hard. Mhmm. With Julius, it just becomes very easy.
Speaker 8:How did it come about? Well, the professor at Harvard Business School who teaches data stuff, professor Yav Varjanov, he's a Julius user.
Speaker 5:Mhmm.
Speaker 8:He's been a Julius user for over a year before he reached out and said, hey, guys. We wanna teach this whole class with Julius. And we said, let's do it. Like, what we want. And yeah.
Speaker 8:So they're they're all learning to learn to use Julius now.
Speaker 2:That's amazing. Are you gonna scale that to other universities or just hope that memetics take hold and everyone copies HBS?
Speaker 8:We I mean, we have a lot of interest from other institutions as well. So like Rice University is teaching a class Yeah. About AI financial analysis with Julius. Mhmm. It's just like this new way to do analysis.
Speaker 8:It's like the new Excel. That's cool. So yeah.
Speaker 2:That's awesome. Is
Speaker 1:that the prize, by the way? Is Excel you wanna just replace it entirely on a long enough time horizon? Won't tell we won't tell Satya.
Speaker 8:Absolutely. Excel, Tableau, all of that. You know, number one business software in the world, Excel.
Speaker 2:Yeah. We're very
Speaker 8:proud of that.
Speaker 1:I love it. Last take, AI 2027. Did you read it? Maybe you didn't have time. Are we all getting paperclip by a year and a half
Speaker 2:from now? What does Julius have to say about AI timelines? Import import the GDP growth rate and the energy growth rate, and tell me, when will we be paper clips?
Speaker 8:Yeah. Well, I think I think it's a really exciting timeline. You know? I think the best I think the way to I think one one easy way to look dumb right now is to make super bold predictions on how the future's gonna play out. Mhmm.
Speaker 8:And so I'm a big believer in, like, just like, I think it's an exciting timeline, and we just have to, like, ride the tiger.
Speaker 1:Ride the tiger. I'm gonna make a bold prediction. 4,000,000 users by end of year for Julie. Let's
Speaker 2:take you over on that.
Speaker 1:Good. I'm happy to.
Speaker 2:Good. We're going 10,000,000 users.
Speaker 1:It's great to have you on. We we got some data to analyze. Yeah.
Speaker 2:We do.
Speaker 1:You'll see us in And
Speaker 2:yeah, come come back when there's a new product release or funding announcement. We'd love to have you back on.
Speaker 8:I'd love to come back. See you guys.
Speaker 2:See you. You. Talk to you soon.
Speaker 1:Love that he wore a suit. Yeah. Fantastic. Understood the assignment.
Speaker 2:Next up, we got Flo from Lindy, another AI company. You could call it a rapper, but I've seen him doing really, really cool stuff. I'll let him describe it, but I'm excited to to chat with him. And he is in the studio now. Welcome to the stream.
Speaker 4:Hello. Yeah. Thank
Speaker 2:how you doing? Thanks so much for joining. It's been too long, but, good to have you here. Could you just give us a kind of a basic overview of who you are and the company for everyone? You are on mute.
Speaker 2:Sorry. We're lost we lost audio. We're working on it. We heard him for a second. Okay.
Speaker 2:Can we talk now? Hear it. Quantu, can you hear me? Yep. We got you.
Speaker 3:Alright.
Speaker 4:Yeah. Flo here, founder of Linde. We are building a no code platform to build AI agents to automate various, workflows. So, like, sales, customer support, operations, you name it, we automate it using AI agents. Yeah.
Speaker 2:I mean, the question we've been asking everyone is, like, when can an agent book my flight or something like that? What's your timeline, and what milestones are we expected to hit? I guess we're at a big, like, big picture level. We're all just waiting for the Studio Ghibli moment of agents. I think we passed the Turing test.
Speaker 2:Everyone used AI to to do their homework. Everyone had that magical experience of like, wow. I'm talking to a computer. And then it faded out and people use it as a answer engine. And then same thing with Studio Ghibli where everyone was like, this is incredible.
Speaker 2:But now it's like a tool and it's a filter and people use it tastefully and they'll be creative with it and sometimes they won't. But, when when do you think and what milestones do we need to hit to get this kind of breakout societal level meme around agents?
Speaker 4:A year.
Speaker 2:A year.
Speaker 4:I I I broadly buy the meme that 2025 is the year of agents. It's like a year ish. I think those mean to be a pretty serious inflection point. And and, you know, I I think, like, when you hear this kind of prediction, like, a year is quantitatively different from, like, five years. Because, like, five years is like, you know, a year means you see it you see it in the pipeline.
Speaker 4:I can can I share my screen?
Speaker 2:Yeah. You can. Yeah. Should come up. But whatever you share is So if you have tabs open with passwords, we're gonna see it.
Speaker 4:All my passwords, everything is is open. We're transparent.
Speaker 2:Be be careful.
Speaker 4:This is this is a demo we had. Actually, this is really good because it's it's marrying computer use, which we haven't released yet with agent swarms, which we released last week. And you can see here, I'm asking an agent like, hey. Help me plan a trip to, like, Breckenridge in Colorado. Okay.
Speaker 4:I need to book a flight, find an Airbnb, and get a rental car. Okay. And it's deploying a swarm, and check this out. So it's deploying a swarm of three agents, one for each. So it's like booking a flight Oh, interesting.
Speaker 4:Finding an Airbnb, and reserving reserving a car.
Speaker 2:Yeah. Decomposing the problem.
Speaker 4:And it works. It just it just works. No interaction no no interruption needed. It just works. It's doing all of these things at the same time.
Speaker 2:Is this live?
Speaker 4:Oh, no. No. No.
Speaker 1:I
Speaker 2:mean This is screen recording. Right?
Speaker 4:This is a recording. Oh, yeah.
Speaker 2:Okay. This is, like, really
Speaker 5:fast. Goddamn. It works really well. No. No.
Speaker 5:No.
Speaker 4:This is this is the downside to this. Like, it's pretty slow. You can see this is, a six minute long recording, but in the end, it is. So, yeah, I think, like, this is gonna be in production pretty pretty rapidly.
Speaker 2:Okay. Yeah. Follow-up. Like, part of what made the Studio Ghibli moment so powerful in my opinion was the fact that, it didn't require a lot of creativity on the part of the user. And so everyone has a profile photo.
Speaker 2:Everyone has a photo of their dog or their family. They could just click upload, Studio Ghibli style, and they get something amazing. And and I think that that's almost as important as the underlying technology to make something go mega, mega viral. Do you think that we're using the right example with book a flight, or do you think are there any other use cases you've seen where it's like, oh, I could see there's a day when every single person in America or everyone who's online is gonna use an agent to do this because it'll be fun and viral, and they'll wanna share the results or it'll make their day better?
Speaker 4:That's a great question. I am actually quite bearish for consumer agents. I think, like, consumers are time rich and money poor. Yeah. Right?
Speaker 4:It's like they they they don't wanna trade time for money like that, which is why I think, like, Google Assistant and Alexa, like, they've been really the failures, and I I don't think it's because of the technology. I think it's just, like, one, your time reach and money pull. And two, I think the life of a consumer is very convenient. Because on the other side of every transaction as a consumer, you've got a business which interest it is to make the transaction as painless as possible.
Speaker 2:Yep.
Speaker 4:So I actually think, like, the flight booking experience is fine. I think the restaurant booking experience is fine. I think all of these experiences are kind of fine. I think, like, there is going to be a transformational moment for businesses where you have, like, the holy grail of AI agents is, like, what we call the the the drop in replacement for a human worker. Mhmm.
Speaker 4:And I think that's coming in, like, twelve to eighteen months.
Speaker 2:Yeah. I I I almost I'm just kinda riffing on this, but I almost wonder if the agent moment will look like the Studio Ghibli moment, but instead of a single picture, you'll say, go and and do some research about my life or my kid's life or, put in I'll talk to it for a bit, and it just produces an entire animated book or something like that. And it's something that requires using multiple systems and writing and iterating and generating images. And so it's still highly personal. And so anyone in America or anyone in the world can get joy out of that experience, but it's something that wouldn't otherwise be be created.
Speaker 2:Like, you might stop on a boardwalk and have an illustrator draw you at a carnival, but most people weren't hiring illustrators on Fiverr to turn them into anime. They could when it was just one button. And so maybe the maybe the agent use case will be like for for consumers will be de novo. It won't be optimizing something that they're already doing. It'll be something completely new that they would never have paid for.
Speaker 2:I don't know. What do you think?
Speaker 4:We'll see. I mean, we had, like, one competitor that went viral, like, nine months ago. They did something like that. It was, like, use an agent to roast by Twitter. Oh, yeah.
Speaker 4:Viral, and then it fizzled out
Speaker 2:because, like,
Speaker 4:how the market is that, really? Think, safe for this. Even the the the the Gibly thing, I think, is going to eventually fizzle out. It's all fizzled out. It's like, I I I don't know that consumers need all that many agents.
Speaker 4:I think I think businesses need agents.
Speaker 2:Yeah. Well, do you think it's a good, like, marketing strategy at least? Like, have you ever thought about, like, how can I get, even if it's even if it's a meme product or a meme use of Lindy, and it's not gonna be an enduring or it's gonna be extremely high churn, but I know that everyone will sign up for that day, do one task, and, yeah, I'll keep 2% of them? But that's a great trade because I figured out how to go viral with my product.
Speaker 4:That's a that's a good point. I think the downside, though, is that, boy, it's so expensive. AI, it sounds so expensive. And so that's gonna be that's gonna be a $10,000,000 bill, know, like actually $10,000,000 bill. Yeah.
Speaker 4:And like, OpenAI is burning money right now on the Ghibli thing and they don't care because they raised like $40,000,000 to have infinite money. If you're a startup, it's, you know, it's it's it's a different move.
Speaker 1:Yeah. What what was your reaction to Toby's leaked memo this morning around, you know, being AI native? Did you did you see it?
Speaker 4:I I skimmed it, and I I forwarded it to the team, and I say that cosign before I even read it. I was like, whatever he says. I I agree. I love it.
Speaker 2:That's good management.
Speaker 1:But but do you think do you think CEOs in general have been wary around, you know, being too pro AI in their businesses and not almost like basically scare employees because, you know, some
Speaker 4:It's just about not scaring employees. I think there is a culture in tech of avoiding to be too prescriptive on exactly the how and really leading on outcomes and, like, letting engineers, like, do whatever they want and use any IDEs they want. And I think that's the graph the the gap has grown so much now between the frontier of the level of productivity that you can achieve as an engineer and the median practice of the median engineer, especially in big companies, that now employers have no choice but to just lay the law and be like, hey. This is the tooling we use. Like, you don't get to use tooling from, the nineteen eighties anymore.
Speaker 1:Yeah. Can you talk a little bit about Linde being sort of multi product and and I can see a lot of reasons why, you know, for phone calls as an example, you know, there's companies that do just do that, right? And I could see the reason for Linde to to do multiple things is like, you know, a customer does a phone call and then they need an email and then they want a recording and like there's a bunch of, you know, sales, customer support, all all these different areas end up, you know, connecting in. So I can see I can see why you would wanna be sort of multi product, but I'm curious if there's any more I'm sure you've thought very deeply about that and and curious your
Speaker 2:Just being less opinionated about the actual use case for the customer?
Speaker 4:Yeah. I actually think of us. I actually think it's a single product. It's just a lot of use cases, and I I think that's an important distinction be because the beauty of building it this way is that you build a a set of actually few low level primitives. And then this is like Lego bricks.
Speaker 4:You know? And then you can combine these Lego bricks however you want Mhmm. And they they combine super linearly. And then they they explode into this set of of use cases. The demo I just gave with, like, agent swarms and computer use, we didn't have to build this.
Speaker 4:We just built agent swarms, and now we're building computer use. And now these two things, like, is this demo just, like Yeah. Happens, like, spontaneously, basically. So it's the same thing for computer use. You know?
Speaker 4:Like, when you build a computer use startup, I surmise that maybe 5% of your bandwidth is the actual not sorry. Not computer. It's phone agents. Five percent of your work is actually phone, like phone code and phone whatnot. Right?
Speaker 4:The rest is, like, the scaffolding around the product. Right? Like, the the SaaS features around, like, team collaboration and, like, the the way to, like, orchestrate your agent and then the go to market overhead and all of that stuff. And so I'm like, man, if we it actually didn't take us that long to build the phone agent because we have all of that scaffold scaffolding around it. And once we have that building block, it's just that much more powerful because it's it's it's plugged into all of our other primitives.
Speaker 4:And so you you realize a ton of economies of scale from, like, a good market standpoint and r and d standpoint. I think it's a better experience very often for the end user because you end up having all of your AI agents in one place. So you have, like, one clean paint pane of glass, and you have all of your AI agents in one place. And I actually think it's going to be much more important even once AI agents can actually work together. You don't want like, having all of these different platforms for all of your different AI agents is gonna be the same thing as having, like, five headquarters.
Speaker 4:You want all your AI employees under the same roof able to work together very, very seamlessly.
Speaker 2:Can you talk a little bit more about cost? You said that AI agents are very expensive to run. What are you what was your reaction to DeepSeek? What's your reaction to LAMA four, some of the open source models that might be a little bit cheaper? What are you monitoring on the inference side?
Speaker 4:Yeah. I mean, we are seeing costs fall by roughly 40 to 100 x every year. Okay. So today, you know, we we don't have negative unit economics, but our unit economics are pretty thin. The margins are pretty thin, and we're totally fine with it and so are investors because we're like, it doesn't matter.
Speaker 4:Like, we have actually seen the the the the the prices go down by 40 x. So it's expensive today, but it's it's actually still the ROI is is tremendous, and and soon it's just going to be an absolute no brainer.
Speaker 2:How much do you think that's driven by new algorithms and optimizations versus just new hardware and put the transformer on silicon or bake the weights of Lama four into an ASIC or something like that?
Speaker 4:Historically, it's been mostly new algorithms.
Speaker 2:Mhmm.
Speaker 4:Yeah. Well, you know, or like distillations, you know, for example, GPT four turbo or, like, GPT four o is so much smaller than, like, the original GPT four. Like, GPT four was, like, a 1,700,000,000,000 parameter model, and GPT t four o, I think, is, like, what, 50 b or something like
Speaker 1:that? Yep.
Speaker 4:And then, yes, they're all done. It does, like, quantization, and there's, like, a lot of optimizations at the rate of all of the stack. We know that these innovations didn't happen at the hardware level in the time span where we saw these, gusts fall.
Speaker 2:Can you talk a little bit about evaluation of new models? We saw Llama four dropped on Saturday. How does your team actually test that? Do you just roll it out to a small set of users? Are you just playing it with yourself?
Speaker 2:Do you have evals built out? How are you testing new LLMs when they drop? Because it seems like it's every week this this year.
Speaker 4:Totally. I I think, like so we do have our own evals built out for, like, cool set of use cases that we're going after, and there's a couple hundred test cases there. And we also test by vibes quite a lot. I will say Mhmm. I feel bad for saying that because the I have friends, like, the Llama team.
Speaker 4:But, like, Llama four, the vibes are really bad. Like, the events are good and the the vibes are quite bad, actually.
Speaker 2:What what what do you think is driving that? Is that just too much focus on pre training, which is hitting a wall on the scale side? Or is there something else going on?
Speaker 4:There are rumors that they injected some data from the evals in the training set at the last minute.
Speaker 2:Yeah. Is that like date data poisoning or something like that? Or Yeah. Just evals saturation?
Speaker 4:Yeah. I don't know if you saw, like, the I saw the allegations. I I apologize to my Llama friends, but the VP of AI research at Meta resigned and so have a couple members of the core research team seemingly in protest for what they deem to be unethical practices.
Speaker 2:Oh, interesting. We'll have to follow-up on that.
Speaker 1:And is that you think that just comes down to their AI team being on just having so much pressure due to Meta's investment in CapEx that it's like if you're not best in class, it's just clearly
Speaker 2:Yeah.
Speaker 1:You know, what what are you doing basically?
Speaker 2:You're not first, you're last.
Speaker 4:I I I think Zach is is massively raising the temperature, and I think he's basically threatened to like destroy the whole org or like fire happy org or like similar stuff like that if they don't hit certain targets by a certain date. And I think that's led to this
Speaker 1:outcome. How how how do you think about AI adoption in enterprise, but just sort of b to b, SMB broadly? Because I'll give you an example. So and I brought this up a few times on the show, but during the Stib Studio Ghibli moment, if you had a post go viral enough, people would would respond to it and not know where it was being created seemingly unaware of OpenAI, ChatGPT broadly. When you talk to business owners today that are maybe outside of Silicon Valley and you explain to them what's possible for AI with AI, are they are they surprised?
Speaker 1:Are they aware of this stuff already? Do you think they're they're quick to adopt these products? You know, I'm curious.
Speaker 4:People are aware, definitely. Mhmm. We're seeing some very interesting dynamics play out in the market where SMBs are aware, and they are eager to realize immediate ROI. So SMBs are actually the ones who have, in my mind, the most real deployments out there. They are actually deploying agents for mission critical stuff all day long.
Speaker 4:Mhmm. Enterprise customers are interesting because there is I think, AI agents, there is a little bit of a return of Shelfware. So, you know, Shelfware is like that thing that happened in, the February or, like, the nineties. Like, Microsoft and Oracle, like, just, like, released this software. Very expensive, and everybody the enterprise customers buy it because the pitch is compelling, but then it gets it off no adoption internally.
Speaker 4:It just sits on the shelf. And and I think that's happening again with AI agents because Dynamic will seem play out quite a bit. And I don't wanna say names, but there are some very hot AI startups out there in the enterprise that are basically software. Like, their revenue is skyrocketing, and they're meeting very little deduction internally. And what's happening is that the board is on Twitter all day, and they're freaking out.
Speaker 4:And they're on the back of the CEO, and they're like, you've gotta figure out this AI thing. Whatever it needs to figure out this AI thing. Mhmm. And then the CEO turns around and talks to his executives, and he's like, you guys have got to figure out the AI thing. Basically, the the sheet rolls downhill, and immense, budgets get unlocked.
Speaker 4:Like, hundreds of millions of dollars, like, figure out the AI thing. And so, you know, we we we are seeing these huge ARR numbers and these huge growth numbers. Adoption is is low very often, and and even when adoption is there, satisfaction is is low because the the the the products are not quite mature yet. And even when the products are adopted, they're not typically for very mission critical tasks yet. Like, enterprises are notoriously, and I think for good reason, quite risk averse.
Speaker 4:And so they're going slowly here as far as, like, actual adoption and deployment is concerned.
Speaker 1:That makes sense. Do you think about how do you think about general risk of rolling out these products? Right? If you're using Cursor internally to write code and help you ship faster, there's, you know, if you make if if the if cursor makes a mistake, you know, you sort of can have the opportunity to correct it. The customer doesn't isn't necessarily made of aware of the mistake.
Speaker 1:Whereas, there's a bit more risk with with what you're doing. Right? If if a customer gets an email and it doesn't make any sense or they're on the phone and and they're talking to an agent and the the agent is just sort of stumbling or whatever. I'm curious how you think about, you know, testing. I'm sure you're doing a massive amount of testing internally and then making sure that these things are functioning before they're really, you know, being rolled out at the customer level.
Speaker 1:But I'm curious what your approach is there.
Speaker 4:Well, first of all, I I always tell people to compare apples to apples, which is like the the the bar is much lower for agents than it is for other software. For other software, you want, like, three or four lines of reliability or what or whatnot. Agents, the comp is not other software. It's it's humans. Mhmm.
Speaker 4:Right? And when you hire humans and very often enterprise customers, they have their support done by BPOs in The Philippines or in India or whatnot. The quality is not a hundred Mhmm. Right? And so you've gotta compare you've gotta compare this to that.
Speaker 4:So the vast majority of the time for use cases where AI agents are deployed right now, they more than clear that bar of human quality and then some. Right? Because they are obviously, they are available twenty four seven. They respond to tickets in, like, a couple of seconds, and then they give you perfect observability. So you can actually see exactly task by task what your AI agents did, like, all day.
Speaker 4:You can't say the same for for for for humans. And then on top of that, with this noted, which is like, hey. Headline. It's fine. AI agents work pretty well.
Speaker 4:But, you know, on top of that, what you do is, obviously, you deploy evals. You deploy human in the loop for, like, the most critical parts of a workflow. So for example, customer support agent. If Uber we don't have Uber as a customer, but I used to work at Uber. If you're Uber and a customer complains about, like, a sexual assault, don't have an AI.
Speaker 4:Just just, like, escalate that to a human ASAP. Right? Or, if a customer is asking for a refund on a transaction of more than, call it, like, $500, escalate that to a human. Right? And you can have these hard guardrails in place that are like, this action always structurally requires a human in the loop for the AI agent to perform it.
Speaker 2:That makes sense. Can you talk a little bit about distribution? With a lot of these b two b products, you hear, oh, yeah. Anyone can set up a Shopify store. Anyone can set up QuickBooks.
Speaker 2:But oftentimes, these products are actually vended into companies from agencies, consulting groups. There's actually a, like, a middleman that's that's doing the implementation and the maintenance of the software. And in some cases, the companies don't even know that their emails are being sent by Mailchimp under the hood or Klaviyo or any of these different, SaaS products. Are you finding do you think that'll be a material part of your business, or or are are you thinking about that?
Speaker 4:Yeah. It is a material part of the business today. We have a partner network. If you go to, like, Lindy.ai/partners, we've got, like, dozens of implementation that that help us implement these things. I think it's temporary, though, because AI agents are soon going to be simple enough.
Speaker 4:Again, if you have a a drop in replacement for a human worker, it's going to be no more complicated than collaborating with your human teammate. So I I don't I don't know that you're going to need this for all that long.
Speaker 2:How do you think about collaboration between agents? I was reading the AI twenty twenty seven thing and they were talking about, oh, well, like, when there's a billion AGIs, they'll just set up a Slack workspace, and they'll talk to each other literally in Slack. Yeah. What you you gave that demo of the three agents working on separate things, and then I imagine that their results are kind of put together. Are you thinking about communication between the agents during the process?
Speaker 2:Because you could imagine that, oh, it finds a great it finds a great place to stay while you're traveling, but that requires taking a slightly different flight, and there's a trade off there. If you had a really great human working on booking you a trip that involved a flight and a and a stay, that they might wanna talk to each other about the trade offs there and kind of do some sort of optimization. You don't just wanna book the flight and then also book the best hotel or whatever because they might not be the same.
Speaker 4:Yeah. Oh, and so this is currently something we support. So for example, like, we do a lot of recruiting, you know, engineers or designers or salespeople, anything. We're hiring everything. Hit me up.
Speaker 4:But, you know, I have a Lindy that's really good at sourcing candidates, and then I have a Lindy that's really good at reaching out to them. So she performs research about them. She knows exactly how to reach out to each person and all of that stuff. And so these two Lindy's are in are in touch with each other. So one finds candidates, the other reaches out to them.
Speaker 4:Yeah. I I think that's going to be super important, and that's part of why we are so passionate about having all of the agents in the same platform. You could say you don't need them in the same platform because they can use platforms like Slack and whatnot to to collaborate. But and then as part of the AI twenty seven, twenty twenty twenty seven essay. Right?
Speaker 4:He he talks a lot about. He says, like, agents are not always going to go communicate with each other in human readable tokens. Mhmm. And and that's also part of our thesis. And so that's going to be much easier for AI agents to do if they are part of the same platform.
Speaker 4:I think, ultimately, this, like, the AI agent team topology, is going to be one of the main trivials of the performance of your of your AI agent setup. And I think that first is going to be on you as a user to figure out that topology. In a way, you're gonna be doing the the job of a CEO. It's like, hey. What's the reporting structure?
Speaker 4:Who communicates to whom? How? Like, all of that stuff you're gonna have to design. Eventually, and in this not too distant future, you are going to have an AI agent design design that for you. So we call that the AI chief of staff.
Speaker 4:It's just going to manage all of your AI agents. And you can imagine this this recursively. Right? Just like agents managing agents managing agents.
Speaker 1:What's your PDOM? Are you scared? Does AI does AI scare you or are you just like, no. We're putting them to work?
Speaker 4:I'm terrified. My PDOM is about look, I fluctuate. The error bars are are huge, but, like look. Even if it was low, like 10, that's unacceptably high. If you listen to the Dwarkat the Dwarkish podcast on AI twenty twenty seven, that's the part I love Dwarkash.
Speaker 4:I love the podcast, but that's the part where I'm like, what? At some point, they talk about p doom, and one guy is like, yeah. I'm 70%. And the other guy is like, I'm an optimist. I'm only 20%.
Speaker 4:And then they move on. I'm can we spend the whole conversation talking about the fact that, like, very credible, very smart people who are who spent a lot of time thinking about this literally think that there's a 20% chance that we as a civilization go extinct in ten years? Like, I'm I'm terrified. I I I think I I think it's very under discussed. I think it's it's pretty and I think that's in
Speaker 1:the Is it possible is it possible that Lindy at some point pivots to being a defense company but you guys are deploying agent swarms to to fight the Robot apocalypse. Yeah. Our our robot adversaries.
Speaker 4:Look, you know, we're we're selling to SMBs. We all better. I'm more, yeah, agent company.
Speaker 2:I mean, I I want to talk about something very anodyne compared. Just the idea of like putting an agent on a cron job, that feels like something that's that's potentially so simple but very value creative. Just, Okay, I have a task that I need to do, and I want to make sure it happens every single day. Are you seeing traction in that vertical? Are you messaging that type of activity?
Speaker 2:And and what are the what what are some of the cool use cases? Like, you have any, like, cron jobs set up where an agent does something for you, even if it's simple? Just checking a newsletter, checking a website, just doing something pretty simple, but it's something that happens reliably every day that can
Speaker 4:Oh, I have it done. I have it done. So I have one that actually I received the email from this morning that checks out my favorite podcasts Mhmm. Every week. And, because I I don't really listen to podcasts anymore.
Speaker 4:And so it just, like, takes the podcast, transcribes transcribes it, and sends me a summary of my favorite podcast every week. Yeah. I have a couple that ping me on Friday nights that so one of them looks at my calendar and tells me, like, and looks at my priorities and tells me whether my calendar is aligned with my priorities. One of them looks at my personal CRM and at my calendar and is like, hey. You met with this guy this week.
Speaker 4:He seems interesting. You should heat him up.
Speaker 2:That's cool.
Speaker 4:One of them one of them looks at all because I have an Indy in all my meetings. And so she looks at all my meetings for this week, and she sends me a digest of all my meetings this week. We have one that, like, every day this one is really powerful. Actually, it's my among my favorite. It's it's company wide.
Speaker 4:So every day, ingests a ton of information from the company. So every external meeting we had with customers, every support ticket we received, like, a lot of communication, and then it sends a company wide digest to the whole company, like, the general channel on Slack. So, like, in a couple of bullet points, you get, like, that heartbeat of the company. Mhmm. That's been one of the most surprising use cases to me is AI agents are really good at just ingesting a ton of data very rapidly and summarizing it.
Speaker 4:So writing reports is a is a really, really strong use case right now.
Speaker 2:Do you need a larger context window for that larger task, or does it work with any of your models?
Speaker 4:I mean, modern models have like 200,000 tokens context windows. That's enough for like a 50 pages book or something like that. That's that's plenty.
Speaker 2:Okay. Last question. We'll let you go. What about the name? This seems like the least Lindy company possible.
Speaker 2:It's like very new age and futuristic in sci fi. Is it a reference to the Lindy effect, or did you just like the name?
Speaker 4:No. We have a teammate named Lindy, actually. Oh, okay.
Speaker 6:Yeah. And so we
Speaker 4:were all just, like, looking for a name for way too long, and then she was in the room. We were brainstorming. He was like, how about Lindy? And so, yeah. Alright.
Speaker 4:Lindy.
Speaker 2:That's great.
Speaker 1:I love it. Can never leave now.
Speaker 2:Yeah. Just gotta say. Do you have
Speaker 1:list Oh, this is great.
Speaker 2:This is great. Thanks so much.
Speaker 1:We gotta get some Lindys going internally at TPN. I love it.
Speaker 2:And Yeah. Yeah. Where can people sign up, get started? What's pricing look like for your average consumer B2B?
Speaker 4:Yeah. Go to Lindy.ai and don't worry about the price. Right? It's it's starts at $50 a month. Yeah.
Speaker 6:Okay.
Speaker 4:We also offer, to my point about the implementation, like, you know, if you've got stuff you wanna automate, heat us up, we're we're used to implementing Mendis for people.
Speaker 2:That's amazing. Amazing. Well, thanks so much for joining.
Speaker 1:Great to chat, Flav.
Speaker 2:This has been fantastic. See you
Speaker 6:all Bye.
Speaker 1:That was great. Pdoom.
Speaker 2:It was a great day. Yeah. A 10. He he writes about it a lot on his on his his acts. It's always scary when you talk to somebody who's close to the metal and terrified of the metal.
Speaker 1:Yeah. But I I feel safe knowing that he could turn his swarms Yeah. Against, you know.
Speaker 2:That's all that matters is this And that's robots than bad robots and we win. Yep. But hopefully we outnumber them. Anyway, any other posts you want to do from the timeline or should we get out of here?
Speaker 1:No, I honestly was just looking at Polymarket pulled up. Was tracking. I don't know how this feels. It's crazy. Do you know that poly market right now is only has a 1% chance of a US recession before May 2025?
Speaker 2:Well, that's like, it would be very, very hard for it to happen in
Speaker 1:May the recession is designed to Because they would have like rewrite the data
Speaker 2:Yeah. Yeah. Yeah. Yeah. So recession is defined as like I I think it's actually just it's usually defined as like multiple quarters of
Speaker 1:of economic So so so it's basically impossible. Yeah. Yeah. It's basically they were to rewrite unless they were to basically get new Restate
Speaker 2:Yeah. Old data. Old GDP data. Because, I mean Yeah. These like, the market is a leading indicator.
Speaker 2:Right now, you're seeing people I mean, even on the show, we're talking about will companies pull back? Maybe they will. Will consumer stop buying foreign made cars? Will they stop buying cars overall? Or is there gonna be inflation?
Speaker 2:Like, we have no idea what's gonna happen to the to the business community or the or the American consumer. And so for GDP to just suddenly shrink, it it would be very rare. Unlike what happened in COVID where, you know, all the businesses were closed immediately and there was a massive drop in GDP very, very quickly, but all came back. Yeah. This is very much I mean, you talk to the smartest people in the tech and finance world, and they're all saying some version of let's wait and see.
Speaker 2:I don't know. The market's down. It doesn't seem great, but maybe it'll work out. I I don't know. I'm kind of just doing the same thing.
Speaker 2:I'm focused on AI or whatever. And so I'm sure there's a lot of people that, yeah, they're they're upset that the market's down, but they're not fearing for their jobs or really, like, pressing pause on that purchase or that vacation. Yeah. They're just kinda continuing on. Anyway, we'll be digging into it more throughout the course of the week, so stay tuned.
Speaker 2:And other than that, thanks for watching.
Speaker 1:Thank you. It's gonna be a great week. Yeah. Bye. Talk to
Speaker 2:you Monday.