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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching TVPN. Today is Wednesday, 05/14/2025. We are live from the
Speaker 2:Temple Of The Fortress Of Finance, the capital of capital.
Speaker 1:Ben is back. Ben is back. Ben is back. Welcome back, Ben. Welcome to happy place.
Speaker 1:He found his happy place. It wasn't in a wander, although it could have been in a wander, but now it's in the studio in the Temple Of Technology. Ben is back, baby.
Speaker 2:That was a huge milestone for the show Yeah. To actually survive for It was remarkable. Ben.
Speaker 1:We were on a shoestring. But pulled through, and he's back, and we're excited. Also, thank you to Sequoia Capital. They sent us some beautiful candles.
Speaker 2:They smell fantastic.
Speaker 1:High dimensional cardamom and violet embedding diffusing through hidden layers of spice back propagating to a musk and sandalwood base. So thank you. This is from their AI Ascent conference. They sent sent to executed. Extremely well executed.
Speaker 2:Extremely well executed.
Speaker 1:And they sent us a nice little note here. It's from from Sonia and the team at Sequoia. Beautiful. She says, thanks for having me on the show to chat all things AI. It's no Himalayan Birkin, but hope you enjoy the candle.
Speaker 1:So thank you, Sonia. We'd love to have you back on the show.
Speaker 2:I really enjoyed the conversation.
Speaker 1:Yeah. It was great.
Speaker 2:And we're gonna be talking to quite a lot of venture capitalists today, John.
Speaker 1:Yes. It's a it's a gladiatorial it's a gladiatorial battle. It's a it's a one man versus a hundred guerrilla situation. One show versus a hundred injuries and partners. Let's take a look at the lineup.
Speaker 1:We do have, four founders here, although one of them is raising a fund. Josh Browder, you know, from Do Not Pay, but he's announcing his, fourth venture fund. That's pretty crazy. We were just talking about how how few, company how few firms get to fund four. He did it.
Speaker 1:We got the founder of Granola. Brian Johnson's coming in, the founder of Don't Die. We're gonna get to the bottom of how not to die.
Speaker 2:Die before he comes on.
Speaker 1:Yeah. And Mateo from Eight Sleep is coming on announcing the pod five.
Speaker 2:Launch today.
Speaker 1:Us talk about the pod four. Now it's time for pod five. And then we're going live to a sixteen z's limited partner day. This is the day of the year that they check-in with all of their investors. So they're all together, we got them all calling into the stream one after another.
Speaker 1:We got six GPs and the cofounder of the firm. So that'll be a lot of fun. But first, I wanted to set up the conversation because I think that if you're talking to Andreessen, what's the most interesting tech trend that they seem to be they have a unique perspective on. And from my perspective, that is open source artificial intelligence. They Mark has been very outspoken about his love for our for the open source community.
Speaker 1:They've backed a bunch of open source, AI companies, and it's been, you know, received very well in the open source community, and some investors love it. Some don't. And so my former colleague at Founders Fund, John Ludwig, wrote a piece that we're gonna be diving into all about, the future. He claims the future of foundation models is closed source, and he makes the argument that open source is not ever going to fully win, not that it can't be helpful or useful. But we've also been having some other conversations with folks that say open source might be a tool of economic warfare that we need to be engaging with, and maybe we haven't considered all the different angles.
Speaker 1:And so, his piece is from a year ago. We'll see how it holds up today, and then we'll talk to a bunch of the Andresen partners about open source AI. But I wanted to kick it off with, Ben Thompson, Insta Techery, talking about OpenAI's restructuring. We covered this when the news broke, but he kinda packaged it up in an update with a few different, pieces of information talking about how Microsoft's involved, talking about the hiring of Fiji Simo and the acquisition of Windsurf. And so he starts it off with a quote from the Wall Street Journal.
Speaker 1:He says, OpenAI abandoned a controversial effort to place its juggernaut artificial intelligence business under control of a for profit entity and will instead remain under its founding nonprofit board. We covered this story this exact story in the journal when it dropped.
Speaker 2:And Sam said, hey. It's not that big of a deal.
Speaker 1:It's not that big of a deal.
Speaker 2:And then people were like, okay. It's not that big of a deal.
Speaker 1:Then we won't talk about it on podcasts. Yeah. Yeah. What what does he want us not to talk about this? Is that what he's saying?
Speaker 1:It's not a big deal. Don't make a three hour podcast out of it. Guys?
Speaker 2:This one thing.
Speaker 1:This one thing is no big deal. Well, too bad. We're making a podcast about it. And it's four hours today, by the way. And so the move could complicate the company's future fundraising efforts.
Speaker 1:Obviously, it's very difficult to invest in a nonprofit even though there was a wait for some cash to flow through. Unlike traditional boards, which must must act in the best interest of shareholders, OpenAI's nonprofit board has a fiduciary duty to humanity. I was joking that if they have a fiduciary duty to humanity, if you're human, you can just ask them to do things, can't you? Yeah. You can just submit them tickets.
Speaker 1:I was telling Yeah. That was me a to do list app. Now Yeah. Do it. I'm human.
Speaker 1:So you gotta you're responsible to me.
Speaker 2:You're in service
Speaker 1:You're in service to me. Yeah. But OpenAI started working on this change, after Sam Altman was surprised, fired, and then reinstated in 2023. Its big investors, including Microsoft, wanted, watched his temporary ouster from the sidelines, unable to wield official power over the outcome because of the nonprofit structure. They couldn't just sue.
Speaker 1:Hey. This is not in in the interest of shareholders. And the nonprofit board was able to make a very convoluted argument for why they were so suddenly changing CEOs. The conversion would have changed OpenAI's business to a public benefit corporation, while preserving some form of the current nonprofit, that controls the company. Altman's rival, estranged cofounder Elon Musk, had tried to block the conversion in court.
Speaker 1:Open eyes said it scraped it scraped the boulder plan after discussions with civic leaders and attorneys general in California and Delaware, which would have been a
Speaker 2:clarifying off.
Speaker 1:And so they probably just went to the courts and said, are you guys gonna veto this if we try and do this? And they said, yes. Absolutely. We're gonna veto this. And so Very likely.
Speaker 1:Okay. We're not even gonna try. Yeah. That's what that that's what that reads like. I don't know.
Speaker 1:But, anyway, the framing of this news and the tenor of the overall reaction has been interesting. OpenAI is characterizing this as a clear step back from their initial for profit plans, and most people seem to be taking them at their word. A small contingent, including Elon Musk, are on the opposite extreme claiming that this is a total betrayal of OpenAI's nonprofit roots. Unsurprisingly, Strathecari falls somewhere in the middle. Ben Toms, of course, with a twist.
Speaker 1:I do in fact think this is still a meaningful change, but also a fair one that does say stay somewhat true to the entity's roots. And, frankly, that's the part that worries me most. And so interesting, of course, that the open source company is now closed source. They're maybe releasing an open source model. I don't know if you wanna pull up the Poly market on whether or not OpenAI will release an open source model or what the timing is, but it seems like they they do that at some point.
Speaker 1:It it doesn't seem like a crazy
Speaker 2:thing to do. Sitting at, will OpenAI release an open source model before July? Polymarket has it it at a 48% chance.
Speaker 1:Wow. Really? Fifty fifty, basically.
Speaker 2:Yeah. Still feels significant on 356 k of volume.
Speaker 1:Okay. Yeah.
Speaker 2:Not not Yeah.
Speaker 1:Yeah. Not small.
Speaker 2:Yeah. Anyway So we'll see. So how this
Speaker 1:Microsoft's obviously a big player in here. They it seems like they need to sign off on whatever happens, and they want a stake. And then there's also some crazy numbers about exactly how they how much they've invested. And so the core problems facing OpenAI as a nonprofit were straightforward. Yeah.
Speaker 1:Developing AI costs astronomical sums of money. Money at that scale is only available from investors who expect a return, and OpenAI has no meaning no means to deliver a return to investors.
Speaker 2:Yeah. Basically, can raise a few hundred million dollars as a nonprofit Yep. From people like Elon Peter Thiel. Things like that.
Speaker 1:Lots of other folks
Speaker 2:put
Speaker 2:by
Speaker 1:But
Speaker 2:beyond that, you start to run out of, you know, they could have just perpetually raised Yep. They could probably have gotten to a point where they were perpetually raising a hundred million dollars a year
Speaker 1:Yep.
Speaker 2:But not
Speaker 1:10,000,000.
Speaker 2:10 billion dollars
Speaker 1:a year. And my and my take on this was like, it's beautiful that Yeah. That that the future of AI must be capitalist. And it's actually very good. I think Ben Thompson kind of agrees with this.
Speaker 1:So he says, now you can certainly make the case, that the most appropriate thing for OpenAI to do at the point that they had this realization, and this was and everyone started realizing that scaling laws applied in 2018 after they released the paper improving language understanding by generative pretraining, and this was confirmed with GPT two. They saw that they didn't really train they didn't really change the algorithm. They just increased the scale of the data and the compute, and it got way better. And so they're like, okay. Well, we thought if it was just genius application, genius algorithm design, all you need to do is just raise a hundred million dollars, get a hundred geniuses in a room, turn them loose, and they would come up with the most beautiful, elegant algorithm for AGI.
Speaker 4:Yep.
Speaker 1:Give them enough time. They'll do it. But that wasn't the that's not the solution. They need compute, and they need energy, and that costs money. And so, they should have wound down the nonprofit at that point is what Ben Thompson argues.
Speaker 1:And he says, I wonder if Altman regrets not just doing that after all. And this critical OpenAI had, at that point, created very little of commercial value. To review the timeline of that critical 2019 period, February, OpenAI releases GPT two. This was the model that showed simply scaling up model size, dataset size, and compute produce more generalizable results. March, OpenAI creates the OpenAI LP, a cap profit entity that could be invested in in exchange for a share of profits.
Speaker 1:And July, Microsoft invest $1,000,000,000 in OpenAILP with the right to 100 x. That's returned. So they can make a
Speaker 4:hundred billion dollars.
Speaker 2:To a hundred x? Yeah. Simple ask.
Speaker 1:Well, the funny thing here is that I'm pretty sure a hundred billion is less than what Microsoft earns in a year. So it it is like it is substantial sum of money, but it's not that much money to them. Yeah. To put in context, a hundred billion is 17,000,000,000 short of Microsoft's total operating income last year. And so it'd be like a nice Yeah.
Speaker 1:Their EBIT could be a double
Speaker 2:EBIT was a hundred and 30 Yeah. One Yeah. Billion.
Speaker 1:But it sounds it sounds crazy, but they I mean, they put in a billion dollars. So the question is like, what's more valuable?
Speaker 2:Grew 28 per they grew EBIT? EBIT 28% from 2023.
Speaker 1:It's amazing. Satya, on fire. Come on the show. Soon. Anyway, of course, OpenAI and the rest of its investors almost certainly don't want to give such a valuable asset.
Speaker 1:You know, I'm I'm not sure that they will have the choice. So the question is, should should should Microsoft go for revenue share or perpetual rights to OpenAI's models that they can vend into Azure? And they probably want to stick with the, with the perpetual rights. The fact of the matter is that Microsoft put up, the money to make OpenAI an entity worth fighting for, and they would do well to give up future profits from OpenAI to secure profits of their own. Assuming this deal happens, that leaves the nonprofit board, which has final say over the company and some amount of shares in the public benefit corporation.
Speaker 1:This is ultimately in line with OpenAI's original structure, so I think it's a reasonable compromise. I don't like it, though, but not for the same reasons as those who think that any for profit entity is wrong. Rather, I don't like the idea of an entity unconstrained by things like fiduciary duty or the profit motive having ultimate say over what is shaping up to be such an important company. I get the theoretical argument for people motivated by the common good. I myself subscribe to the perhaps more cynical view that base motivations like profits and doing right by shareholders are important constraints against utopian visions that all too often end badly.
Speaker 1:And I completely agree. He's very, very convincing on that point. Yeah. And then, we can go through a little bit of the of the CMO, Fiji CMO, and, and windsurf news. So in an Altman email, CMO will enable our traditional company functions to scale as we enter the next phase of growth.
Speaker 1:Altman keeps the top job and will increase his focus on research, compute, and safety systems. Simo's a technologist at heart, but a very pragmatic technologist. She loves consumer companies that have a big impact. That's why she went to eBay.
Speaker 2:And what else does she like? Ads. Ads. Oh, yeah. Ads.
Speaker 1:Yeah. So, now the question is, you know, you interview anyone from OpenAI, when are you gonna get promoted to CEO? Cause now, if there's two CEOs, why not 50?
Speaker 2:Three, four, 50. Yeah. Yeah. Unlimited. Why stop at 50, John?
Speaker 1:Yeah, just keep going.
Speaker 2:I mean, is an entirely uncharted territory. We've seen the co CEO model before. We have not seen scaling is all you need in CEOs.
Speaker 1:Scaling law applied to CEOs.
Speaker 2:The law applied to
Speaker 1:CEOs. Imagine. Do you think that's the value accrues to the most CEOs? CEO drives the most value, so get multiple CEOs.
Speaker 2:More CEOs.
Speaker 1:They need 10 more ooms of CEOs. Yeah. 6,000,000,000 CEOs, then they'll be responsible to humanity. This is this is the way.
Speaker 2:Very likely that the company that develops AGI
Speaker 1:will entirely CEO driven. Yeah. CEO Everyone
Speaker 2:acting like they run the company.
Speaker 1:It's great. And so yeah, I mean, it's obviously like a big shift too. They're going all in to be the next big consumer app, and they're necessarily gonna build an advertising product. And I was trying to think about this. Like, there is a world where you charge people $200 a month or $20 a month or 0 a month, and the $20 a month subsidizes the rest of the of the cohort, but you have to differentiate the product at that point.
Speaker 1:And so you're essentially giving poorer people dumber AI, which feels a lot worse to me than giving everyone equivalently smart AI. Where everyone the same ads
Speaker 2:or everyone the same content, but you either watch ads or you don't or you
Speaker 1:have Exactly. Exactly. Exactly. So I I I I truly yeah. Maybe it'd be nice to be able to pay to remove the ads, but but I I I do I don't like the world where where certain people based on their economic conditions don't have access to the smartest models.
Speaker 1:I think that's very,
Speaker 2:very Are we talking, mean, who are we, I honestly think it was Mad Fez that we were talking with offline about how this dynamic that we've had where billionaires have the same iPhone as
Speaker 1:many times. Talked about this many times.
Speaker 2:Chipotle. Right? I that is not gonna be the case in AI. And that's kind of the issue that you're getting at.
Speaker 1:Well, no. I think it I think it ultimately will be the case in AI, that it will be the same. Because I do think the access I do think the ads and the economics will lead to GPT five being available to everyone, equivalently. And maybe there's less ads for certain people. Maybe there's certain usage limits or certain things that you pay for.
Speaker 1:But Yeah. The other limit is so much better for security.
Speaker 2:If if I'm paying $2,400 a year for OpenAI
Speaker 1:Yep.
Speaker 2:As a prosumer. Right? I use, you know, whatever. I'm on the $200 a month subscription. They could get probably $10 a year in ads in value from me as a user in ads.
Speaker 2:Yeah. Right?
Speaker 1:Hey. We gotta raise the price on you. Yeah. To get rid of those ads.
Speaker 2:That's what I but but but no, the the argument is that like Google, would imagine, you know Yeah. Like OpenAI at some point would have an incentive to just get so good at ads that they can extract the maximum amount of value.
Speaker 1:It's so cocky to be like, yeah, my ARPU at Facebook, they they make $20 off of me because they show me so many AMG g 60 threes that they they just print off
Speaker 4:of me.
Speaker 1:They've shown me
Speaker 2:They found the infinite money glitch.
Speaker 1:They've shown me so many g wagons that Mercedes has purchased We got another
Speaker 2:g wagon addict
Speaker 1:over
Speaker 2:Six
Speaker 1:figures this year.
Speaker 2:He's already got two and he's like
Speaker 1:They're like, I don't have a third. That's ridiculous. Anyway, but, obviously, you know, the company is shifting to it's the what what do they call it? The unlikely consumer tech company, the un the unwilling consumer tech company. They just bought Windsurf.
Speaker 1:It's model agnostic, which is very interesting because you can use Windsurf with Anthropic Claude.
Speaker 2:Yeah. It's some other news that was interesting. Harvey just announced that they're going model agnostic. Interesting.
Speaker 1:What were they built on before? OpenAI?
Speaker 2:OpenAI's fund was invested Sure. In in Harvey.
Speaker 1:Yeah. And so this is the point that, Ben Thompson makes, which is that there is a world where ChatGPT is powered by Claude, and no one notices or cares because all you care about is the app that being a great front door to AI. And you go there, and and as long as you get good responses, does it really matter what exact model you're using? Not really. The actual underlying model matters a lot less than how that model interacts, the other tooling, the tool use, all these different things.
Speaker 1:And so, we gotta dig into this more.
Speaker 2:But Yeah. The other the other, interesting thing here, and Ben calls this out. He says, the unusual part of this this appointment is that Simo is currently a public company CEO of Instacart, And the best way to understand her decision is that it's better to be the number two at a generational company instead of the number one basically anywhere else. Yeah. And it's interesting to, you know, in many ways Instacart was a generational company.
Speaker 2:Yeah. But But it's $11,000,000,000
Speaker 1:right now. And it's been around there since IPO. It's actually fairly up since IPO, I believe. $25 when it IPO ed. Now it's at 45.
Speaker 1:So it's done well.
Speaker 2:Do you remember they were But I think they were over 30 in the private markets.
Speaker 1:Oh, really? Yeah. But still, I mean, $11,000,000,000, that's what, 3% of OpenAI at the current valuation or something like that? But the the takeaway is that if you're running a startup, why don't you just go recruit a CEO from public company to come work for you?
Speaker 2:Totally. Totally.
Speaker 1:Set your star you set your bar high. Massively Only eight players. Appreciated
Speaker 2:approach Yes. To recruiting. Yes. Is just go look at
Speaker 1:Look at the public
Speaker 2:public markets. See which companies have Yep. You know, executed well over the past, call it, eight quarters, and then just go pick out, you know, your favorite Yep. CEO.
Speaker 1:So I wanna shift over to John Ludwig's piece on his Substack, Ludwig's learnings. He says the future of foundation models is closed source. If the centralizing forces of data and compute hold, open sore open and closed source AI cannot both dominate long term. So he was thinking about, you know, this was this was during this wave and this big meme that, open source would just completely dominate and commoditize the foundation model layer. Some of that's happened, but then we've seen missteps with LAMA four, and there's some interesting context in here.
Speaker 1:But it's a year old piece, so it's interesting to reflect on how it's held up. And he got into a big debate with Martin Casado, who I believe is coming on the show in just a couple hours. And I'd love to hear how Andresen's view of open source AI has evolved because they've invested in some open source AI companies and some closed source AI companies. And so I wanna know how they're thinking about so, John writes, two, two seemingly contradictory but equally popular narratives about the future of foundation models have taken hold. In one future, AI centralizes.
Speaker 1:Scaling laws will hold and value accrues primarily to scaled closed source players. In the other future, AI decentralizes foundation models have no moat. Open source has caught up to closed source and will have many competing models. Today, both both narratives seem true. We have powerful closed source models and a thriving ecosystem of sacrosanct open source models.
Speaker 1:Lama three recently put open source on the map of GPT four class models. Meanwhile, an unusual open source alliance is formed among developers who want handouts, which is very controversial to say, academics who embrace publishing culture, libertarians who fear centralized speech control and regulatory capture, Elon who doesn't want his nemesis to win AI, and Zuck who doesn't wanna be beholden to yet another tech platform. As an accelerant of It's like Not letting it happen.
Speaker 2:Simply not
Speaker 1:having a and I will
Speaker 2:spend a hundred billion dollars Yes. This year Yeah. To make sure this doesn't happen again.
Speaker 1:Yeah. Yeah. A %. And he's and
Speaker 2:he's and this is what keeps him up at night. Yeah. Because it it might be happening.
Speaker 1:For sure. But I think he's doing okay. Like Yeah. The the LAVA models, they're not fantastic, but they're definitely good enough for enterprise use. And that's that's really the win case for, enterprise AI or open source AI is is is is seeing fantastic adoption in the in the, in the enterprise where you can fine tune it and tweak it and really understand the cost structure, and you can stuff it in all different parts of your enterprise.
Speaker 1:So as an accelerant of modern software, open source maintains a cherished a cherished place in tech. Who can argue with free stuff, decentralized control, and free speech? But open and closed source AI cannot both dominate in the limit. If centralizing forces hold, scale advantages will compound and leave open source alternatives behind Despite re recent progress and endless cheerleading, open source AI will become a financial drain for model builders. Basically, the this idea that, Zuck will run out of of investment dollars to pour into LAMA if there's not a strong economic engine there.
Speaker 1:Yeah. And that's the main that's the main argument here. And so open source software started as an act of charity. The world owes the likes of Linus Torvalds and Fabrice Bellard for endowing humanity with Linux, Git, and FFmpeg. Because free stuff is popular, open source became a great freemium marketing strategy.
Speaker 1:Think Databricks or Mistral, and sometimes a market equilibrium in itself, e g Android as cheap smartphone option reinforces Google search monopoly. Companies that earned free marketing from open source eventually succumbed to business physics. Red Hat hid CentOS behind a subscription service. Elasticsearch changed their licensing after accidentally seeding competition, and Databricks owns the IP that accelerates Apache Spark. So Apache Spark is open source, but you can't just spin up a Databricks instance.
Speaker 1:You have to license their IP, so you have to use Databricks. Unlike the charity work of open source in the early software era, today, it is subsidized by businesses
Speaker 2:By the way, Databricks.
Speaker 1:Oh, yeah.
Speaker 2:Bought a company for a billion dollars today. Interesting. Got announced. Yeah. They announced this at 3AM Pacific.
Speaker 2:I guess that's six eastern, so not that crazy.
Speaker 1:On the Ashton Hall grind. Play the Ashton Hall sound. We're announcing something at 3AM.
Speaker 2:They are Banana peel
Speaker 1:on the face.
Speaker 2:People have called Databricks the Ashton Hall
Speaker 1:Press release. Analytics. Right. Of data analytics. Yeah.
Speaker 1:And so John writes, that begs the question, if Meta is only pursuing open source insofar as it benefits themselves, which he believes, like, they're not doing it completely charitably. It's not a charity. It's not a nonprofit. What is the tipping point at which Meta stops open sourcing their AI? So sooner than you think.
Speaker 1:Exponential data, frontier models were trained on the corpus of the Internet, but that data source is commodity. Model differentiation over the next decade will come from proprietary data, both via model usage and private data sources. And so the feedback loop in ChatGPT is what's valuable, the thumbs up, the thumbs down, the the follow-up questions. You you you issued a response. Did they close the app because they were satisfied, or did they ask you 25 more for follow ups to get the real answer?
Speaker 1:So open source models have no feedback loop between production usage and model training. So if you're running LAMA, that data doesn't go back to Facebook. Exactly. Exactly. And then there's exponential cap CapEx, A lagging edge model that requires just a few percent of Meta's forty billion in CapEx is easy to open source.
Speaker 1:Nobody will ask questions. But once you reach $10,000,000,000 or more in CapEx spend for model training, shareholders will want a clear ROI on that spend. The metaverse raised some question marks at a certain scale too, diminishing returns on model quality within Meta. There's a large upfront benefit for Meta building open source AI model even if it's worse than the Frontier closed source counterpart. There are lots of small AI workloads.
Speaker 1:Think feed algorithms, recommendations, and image generation where Meta doesn't wanna rely on a third party provider like they had to rely on Apple. But it's unclear whether Facebook products benefit much from models approaching AGI quality. It's equally possible that Meta's model improvements will be very particular to their own internal use cases. And that's like what we talked to that that that the the company that trains small language
Speaker 2:models. Task specific?
Speaker 1:Yeah. They had task specific models. And so you could imagine that
Speaker 2:Figure out the
Speaker 1:data. A lot of Meta's a AI workloads are not gonna need AGI level
Speaker 2:universe Fastino.
Speaker 1:Fastino. That's right. Fastino.
Speaker 2:Fastino AI.
Speaker 1:Yeah. Fastino. And so, so you can imagine that there is a Fastino
Speaker 2:like Task specific language models.
Speaker 1:And so you can imagine there is a Fastino like team inside of Meta actually figuring out, okay. We just need to translate every caption. Let's let's build a model specifically for that, or we just need to flag everything for profanity. Right? Like, they could build a model for that, and they're not gonna need AGI level massive models for that.
Speaker 1:And so, Zuck is not running a charity. He's a savvy capitalist. While Meta can justify scaling CapEx on incremental models for their own ends, their open source strategy will only make less sense over time. And so then, John goes into developers and consumers. As a developer choosing an open source model, what do you get in terms of cost, model quality, and data security?
Speaker 1:Open source models have the illusion of being free, but developers bear the inference cost, which are often more expensive than comparable LLM API calls. You either pay a middleman to manage GPUs or and host models or pay the direct cost of GPU depreciation. In capitalist America, free is never really free. You should wonder how you'll ultimately be monetized. This isn't Linux where a single developer built the product as a gift to humanity.
Speaker 1:These are cash incinerating endeavors whose only way out is to eventually monetize you. You're probably committing to a closed source complement in time.
Speaker 2:I'm not afraid to be monetized. Yep. Are you afraid to be monetized?
Speaker 1:I'm fearless about being monetized. Monetize me. Go right ahead. Even an even Android eventually monetized via Google Play.
Speaker 2:It's like a a pretty good, you know, metal song. You know?
Speaker 1:Yeah. Monetize me. On model quality, like housing, health care, and education, a paid version is generally better than the free version. Even within software, the open source winner is rarely the best product. Android is worse than iOS.
Speaker 1:Open Office is worse than Office or Google Docs. Godot is worse than Unity. FreeCAD is worse than SolidWorks. A corollary is that engineers focus on the best platforms make more money. They're more likely to build cutting edge products.
Speaker 2:Everyone celebrates Lama three. Yeah. Here's the kicker. Everyone is celebrating that Lama three is on par with GPT four a year later.
Speaker 1:A year later.
Speaker 2:The product quality gap between iOS and Android or Mac OS and consumer Linux has stayed wide for a long time because the best software creators are aligned with paying customers. When you choose closed source models, you're not making a point in time decision on model quality. You're paying for future model improvements where the road map is aligned with paying customers.
Speaker 1:Yeah. And then he talks about data security a little bit. Some enterprise need the utmost data security, financial services, health care, legal, but I'm not you I'm not sure using open source models on prem or via third party cloud hosting is actually safer than using third party LLMs in the cloud. This is a legacy belief from the early Internet era where an on premise data center was the Fort Knox of data security. As a customer, I'd trust Microsoft with health care data security more than my IT department self managed data center.
Speaker 1:Oh, putting Founders Fund's IT department on blast there. But very nice very nice IT department over there. They're very nice. I I know them. And that bridge has already been crossed when sixty five percent of the risk adverse Fortune five hundred already uses Azure on OpenAI.
Speaker 1:It makes you wonder who is dealing with data that is too sensitive for cloud based LLMs, of course. And so then he goes into national security, and this is why I wanted to pull up that Aaron Ginn clip, which we'll play in a second. But, even if it makes eventual economic sense for model builders to build open source, should they? Advocates like Yan Lakun claim that open source AI is safer than closed, but it makes me wonder if he really believes in Meta's AI capabilities. Any reasonable extrapolation of capabilities with more compute data and autonomous tool use is self evidently dangerous, and we've talked to some other folks about this.
Speaker 1:So let's play the Aaron Ging clip because I wanna react to that.
Speaker 5:But the new AI on our initiative has already started. They're already around the world. We know this. We see them at, you know, different data centers that we work with selling their stuff. And it comes as a fully complete solution with deep sea, open sea like, a Manus models combined with infrastructure, combined with support.
Speaker 2:Manus has has that kind of distribution already?
Speaker 1:You're not talking
Speaker 5:about Like, Huawei is designing for their their their open source ecosystem. So it's still Huawei is being the hands and feet out there building
Speaker 1:I think what Joey is asking is, like, have you ever run into a country that's not China that's like, yeah, we're we have Huawei Ascend, and then we have DeepSeek, and then we have Manus because Manus came out of nowhere just a couple months ago. Feels like that would be a very quick ramp to be like, it's deployed in another country as a part of the AI Belt and Road Initiative.
Speaker 2:DeepSeek, I can believe. Manus,
Speaker 1:I believe. So, yeah, give give us the update on that.
Speaker 5:Yeah. Yeah. Yeah. It it's a point. Like, Deepsea and Manus are everywhere in Europe.
Speaker 5:Like, they're they're everywhere. And, again, it's open source. It it we're open source works as a distribution strategy. Yep. They're not open source because they give they they try to care.
Speaker 5:They don't care about open source. They care about defeating us. Mhmm. And and and so the the approach that this is why, OpenAI made that announcement of we're gonna do, like, this combined deployments of software plus, like, infrastructure is because that's they're mimicking what China's doing. Mhmm.
Speaker 5:But but the proliferation of the open source models, go look at OpenRider. Like, you can just see Yeah. The growth in other models. Those other models are Chinese.
Speaker 1:Okay. So there's this debate about now so so where I think John left off is that if we're open sourcing all American AI and truly the best American AI, you're in you're immediately giving it to near peer rivals geopolitically, and that's risky. What Aaron is saying is that if we don't do it, they will, and there could be this AI Belt and Road initiative where a country that's a little bit more of a coin toss might say, hey. My options are pay OpenAI a ton of money or use the free Chinese model. I'm gonna go with the free Chinese model, and that draws me closer to their economy, and that pulls them away from us.
Speaker 1:And so in terms of forging durable relationships with countries that are kind of on the brink or or could go either way, having a strong American secure open source AI ecosystem might actually be an advantage to us in terms of like broad AI economic warfare.
Speaker 2:And so Yeah. And the question
Speaker 1:That's something that I've been looking
Speaker 2:to this a little bit. I I think the question becomes how much does being able to deploy the truly bleeding edge leading models matter? Yep. Right? Does it matter if you're deploying, you know, GPT six versus
Speaker 1:Yep.
Speaker 2:The open source CCP equivalent of GPT five, right? How big of a difference is is that? Right? Everybody's gonna have a different take. But but yeah.
Speaker 1:We got Let's dig in it dig into it today. Let's tell you about ramp real quick. Time is money. Save both. Easy to use corporate cards, bill payments, accounting, and a whole lot more all in one place.
Speaker 1:And let's invite our first guest into the studio. Welcome to the show. How are you doing?
Speaker 2:It's granola time. What's happening?
Speaker 1:Congratulations. How are doing? We're doing great. Would you mind introducing yourself and the company a little bit?
Speaker 6:Totally. My name's Chris. I'm the cofounder CEO of Granola. How much you wanted me to tell about it?
Speaker 2:Tell us everything.
Speaker 1:Yeah. I mean,
Speaker 2:it's two minutes.
Speaker 1:It's two minutes. Was specifically the evolution of the product because I know people think note taking, but you're doing a lot more. So give us kind of the what was the initial pro, the the initial minimum viable product? What's the product today? Where is it going?
Speaker 6:Totally. So, we launched Ganola a little under a year ago, and the idea was the best way to take notes during meetings and to do that in collaboration with AI. So it's an app that lives on your Mac. It looks a lot like Apple Notes. Mhmm.
Speaker 6:You can take notes however you want, but it listens to the conversation in the background. And when the meeting's over, it'll, like, rewrite your notes to, like, flush them out to make them great. Yeah. And that that's the basic product. We try to keep it super simple, really minimal.
Speaker 6:And, I mean, I I think I think that design resonated. I think we can talk about that, but there I think there are few things about the way we built that that people really liked. And then I think what we noticed happening was that once you start using granola what happens is you have a meeting and, like, a notification pops up saying, hey. You this meeting's starting. Do you wanna use granola for it?
Speaker 6:And once you start using granola for lots of meetings, it kinda becomes this, like, searchable second brain repository thing. Like, you can kinda be like, hey. What did that person say? And you kinda turn to it, and we noticed lots of users doing that. And then kind of the evolution, like, we launched today is now you can do that across your team.
Speaker 1:Mhmm.
Speaker 6:So, like, now you can you can chat. We have we added a bunch of support for these great reasoning models, and you can chat across across meetings across your whole team and ask questions. And, you it's a stepping stone towards, like, the bigger vision of where we're going.
Speaker 7:Yeah. But yeah.
Speaker 1:Tell me about search. Are you stuffing every granola, note into a vector database, or are you just doing a huge context window? What are the different strategies to actually surface insights?
Speaker 6:It I mean, it's it's definitely evolving. What what we found is, like, RAG or, like, stuffing it into a vector database is really good for certain types of, like, information lookup, like search. What what it's what it is terrible at is basically if you ask questions like, hey. Like, coach me. Like, how how could I be better in my one on ones?
Speaker 6:Right? Or when let's say you're trying to sell something. It's like, hey. When I get this type of question, like, how good are my answers and how does that compare to the answers that other folks on my team give? Like, it complete Rag completely breaks with that.
Speaker 6:And what we find is people turn to granola to ask a lot of these kind of analysis type questions. Like, hey. What are the biggest burning fires, right, that I should be focused on or something like that? And RAG's not suitable. So we actually make a lot of use of stuffing these massive context windows with the right Cool.
Speaker 6:With the right transcripts and and notes.
Speaker 1:What's the favorite context window to stuff? I know Gemini's got a big one. But Yeah. Yeah.
Speaker 6:They all have trade offs. The llamas do
Speaker 2:the big ones scare you.
Speaker 1:No. No. The big ones scare me. OpenAI's context window's perfect.
Speaker 6:We just we just today starting today, we let users choose. Before that, it was, you know, we do it. We have
Speaker 1:Everyone's going model agnostic. This is a trend. Right?
Speaker 6:Yeah. I mean
Speaker 1:Windsurf is model agnostic now. Who else were you saying? Harvey just went model agnostic. This seems to be the trend. Really, you're drinking the commoditization Kool Aid.
Speaker 6:Yeah. The the product person in me feel I have mixed feelings about about surfacing it to the user. Because it's like one more thing a user has to think about, and your average person shouldn't have to think about. We should do the best thing. So it defaults to auto, so we try to choose the right model, which for a lot of it is is like Sonic Cloud 3.7, like, the reasoning mode of it.
Speaker 6:Because we find that that for the type of queries that we're getting is it works the best. But you know, if you're a power user now, can choose Gemini o three like whatever you Cool.
Speaker 2:I gotta ask, what was your reaction to Notion's launch yesterday? Mhmm. Many people said it was a granola clone.
Speaker 1:Do we have a shots fired?
Speaker 2:Yeah. Need like a shots fired sound effect. Yeah. I'm curious to get I'm curious to get, you know, your reaction to it. I'm sure it's not even the first time that somebody's taken a little inspiration from you guys over the last year.
Speaker 6:I mean, it feels like it it means we're doing something right, is is my first reaction. Like, I it'd be easier if I didn't like Notion. We really like Notion. Right? It's like, we we think they're great.
Speaker 6:Like, Ivan actually DM me on Twitter letting me know it was coming beforehand, you know, as in like, hey Wow.
Speaker 2:That's very sweet.
Speaker 6:Yeah. It's really cool. You know? He's like, we respect you. I hope this leads to us pushing each other to build better products for people.
Speaker 6:So like, I like them. What it means for I mean, I think the world changed overnight with AI, and we're, like, 2% of the way there figuring out, like, what does that mean in terms of products and tools. And there's just a ton to build. Right? I feel like transcription from the beginning has always been a a commodity.
Speaker 6:Right? Everything is gonna have transcription. So I think the question is, how do you go from what we have today to, like, a true AI assistant that kinda understands you
Speaker 1:Yeah.
Speaker 6:And helps you, like, be a thought partner and do most of the work you wanna do.
Speaker 1:Yeah. It like there's, like, three different, like, approaches to building a new AI enabled note taking app or something like that in this world. It's like Yeah. A greenfield project with startup that has a fresh, clean slate like you guys. There's Notion, which is, like, a well funded scaled company, but still in founder mode, can still, like we saw this with, like, Figma roll a bunch of new features in, move still pretty agilely, compete.
Speaker 1:And then there's the hyperscalers, which are just like, we have a new monopoly, and, yeah, it might take us ten years to add this feature, but you're probably still gonna be using an iPhone. So, yeah, expect Apple Notes to get an update in 2035 or something like that. But Yeah. I'm interested to know kind of, like, do you see the market that way, and and how are you thinking about, the broader competition? Because I imagine that if you just look at the overall, like, people taking notes, Apple Notes is probably still the number one product or something like that or Notepad.
Speaker 1:And so maybe that's the real opportunity, you and Notion can both win.
Speaker 6:Yeah. I think it's it's an interesting question. It okay. So one one angle is, like, I think we underestimate remember when mobile came out and everyone tried to port websites to to mobile to the iPhone, and, like, it took us a little while to figure out that that doesn't work and that mobile app should look really different?
Speaker 1:Yeah.
Speaker 6:The jump from mobile to except from web to mobile is a fraction of the jump of, like, pre AI to post AI.
Speaker 5:So, like,
Speaker 6:I really think the future is gonna look very different. I think and in a in a very different future, I think the the products that are kinda, like, invented in that new medium tend to do better. You know, that doesn't doesn't mean, like, the the massive companies won't be able to add really cool AI features. But if you think about the AI features you use on a daily basis, how many of them were launched by startups
Speaker 1:Mhmm.
Speaker 6:You know, that that came out in the last two years versus how many of them were launched by big companies? Like, it's like an interesting assessment to do. So, like, I the way I see it is, like, it has a ton of opportunity. I I really think, like, when Sam and I started Granola, it wasn't a our vision was never meeting notes. Our vision was to be Yeah.
Speaker 6:Like, a tool for thought that is contextually aware and AI powered. Like, from the you know, you can you can see the stuff that we wrote before launch, and meeting notes just turned out to be a freaking awesome wedge. Like, we thought it would be a good wedge. Turned out it's an amazing wedge, way better than we thought, because there's, like, so much information in in our conversations that we don't
Speaker 1:Is there also, like, a viral loop there where people are sharing their notes with each other onboarding, I imagined?
Speaker 6:Yeah. To I mean, it like, the basically, the granola product is nothing like, there's no gross stuff built in. Like, Until today, there's it was like single player product.
Speaker 1:Oh, really?
Speaker 6:It's something really yeah. There's something super inherent about the information in meetings and wanting to share that. Right?
Speaker 1:Sure. Yeah.
Speaker 3:So, like Sure.
Speaker 6:It's it's all been like word-of-mouth until now.
Speaker 1:Yeah.
Speaker 7:I think
Speaker 1:But I imagine I I if I take notes in a meeting, I could share a static link and we're not multiplayer in that, but I could share my notes and then I'm seeing granola.com and I'm just
Speaker 6:That's true. Yeah. Yeah. You can't you can't share a link and and now you can even you can like put a bunch of meetings together in a folder and can share a folder and someone who doesn't have granola can now see those and, you know, if they log in. And then
Speaker 1:granola.ai. Sorry. I got the domain not wrong.
Speaker 2:You have I'm curious. Do have a do you have a strong thesis around agents? I can imagine at some point companies have agents that are calling people, and companies want to kind of understand the context of those conversations and what happened, what kind of next steps need to take place. Is that something that would live in granola, is that more at the CRM level? What what what's your theory there?
Speaker 6:Oh, man. I I mean, I I think the you mentioned CRM. I think the product categories that we've had for the last twenty years, whether it's like, okay. You have, like, a Wiki company, you have a CRM, you have, like, your docs company or think those are all gonna get redrawn. Because I think in in an AI world, it's it's all about context.
Speaker 6:Right? And then how do you make use of that context to to do work? So Yeah. Yeah. If you have agents calling people, I don't think that's very different from other folks on your team calling people.
Speaker 6:And then how do you make that context useful? I think that could live in granola. I also think agents are just one of those terms or I think we throw it around now, but we don't real there's probably, like, 15 different things that today we're calling agents that are gonna be their own separate things in the future. And it'll be really interesting to see how how that evolves.
Speaker 2:So I got a real time follow-up question from our mutual friend Michael at Lightspeed who was in is in the new round. But he asked, is there an opportunity around agents to take action based on meeting notes? Right? Because in a beautiful world, humans get together, they have a conversation, you figure out next steps, and then things immediately start to happen autonomously.
Speaker 6:A %. Like, a hundred like, that that's the whole future of Granolah. It's basically, like, how do we use this context for meeting notes, but also in the future, email, Slack, you know, Google Docs, whatever, to help you do work. And, like, our vision for Granolah is, like, AI should do all the busy work for you. Right?
Speaker 6:And you should only be left with the judgment. So you can imagine a world you come out of a few meetings. It's already kinda done all the the post meeting work or suggestions, and all you have to do is kinda be like, a little bit more this way, or, yeah, that looks good. Yep. Yep.
Speaker 6:Yep. Yep. Do that, and then move on to your next thing.
Speaker 1:What's the use of the funds? 43,000,000 big series b. Yeah. Is LLM inference a material cost to your business right now? Is it just hiring more engineers, product people?
Speaker 1:Doesn't seem like you're gonna be training foundation models if you're moving to, model agnostic, but what's the use of funds look like over the next twelve to eighteen months?
Speaker 6:Yeah. I mean, I like I said, I think there's a we're, like, in this pivotal moment in history to build the future tooling of work. And it's a big vision, and we need to hire the best people in the world to go out and build that, and there's a just a ton to build. So that's the primary use. LLM inference is it it costs money.
Speaker 6:Transcription actually costs more. So we we transcribe millions of minutes millions of minutes a day right now. So that actually does cost some money, but people also pay for granola. So, like, that
Speaker 1:Yeah.
Speaker 6:The the funds are really, like, can we go after this massive vision?
Speaker 1:That makes a ton of sense.
Speaker 2:That's And what's what's what's the dispersion of the team going to look like over the next couple of years? I know you're in London now. You are an American, though. Yeah. What what what does it look like?
Speaker 6:Yeah. I mean, I think we so when we launched Genoa, we were four people. We're 18 people now. We're still tiny. Right?
Speaker 6:But we got a great group of people here, so we're definitely gonna grow the team in London because I think there's a lot of talent. But our ambitions are global. Right? So we're definitely gonna be opening up more offices probably in The US, probably multiple in The US, but all that's TBD.
Speaker 2:Awesome.
Speaker 1:Very cool. Thank you so much for coming on the milestone. Congratulations.
Speaker 2:And Love
Speaker 1:to see Nat Friedman making some money. Sighs lord.
Speaker 2:We love that.
Speaker 6:That's alright.
Speaker 2:Great happy talk to Chris.
Speaker 1:Yeah. He's great.
Speaker 6:Thank you so much, guys.
Speaker 1:Yeah. Cheers. We'll talk to you soon.
Speaker 2:Have a good one.
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Speaker 2:Building you can just go build an index based on
Speaker 1:I love it.
Speaker 2:Guys that are, very into Olympic weightlifting.
Speaker 1:Fantastic. Well, we have Josh Browder in the studio. He he's a CEO. We'll ask him, does he deadlift? We gotta know because he's going to the portfolio.
Speaker 1:Welcome to the stream, Josh.
Speaker 2:Good to see you. Great to have you on.
Speaker 1:Too long. How are you?
Speaker 4:What's happening? Having me.
Speaker 7:Love the show, and I I love Wanda as well. I see that Wanda Yes.
Speaker 1:You're you're you're you're one of the first investors. Right?
Speaker 7:We did an audit. I'm proud to be the first investor.
Speaker 1:The first investor.
Speaker 2:You found your happy place.
Speaker 1:Found your happy place.
Speaker 2:Spot on the cap table.
Speaker 1:That's fantastic. So, yeah, give us a little bit of an introduction. And do you call yourself a CEO or a venture capitalist at this point? You you've you're on fund four, so moving more into the VC world. What what's the story?
Speaker 7:So definitely a founder at heart. I'm the founder of Do Not Pay, which helps consumers fight companies and governments. The very first use case was parking tickets. But today, I'm announcing my fund that I do on the side with Browder Capital Fund four. Mhmm.
Speaker 7:I'm very lucky we've raised $30,000,000 from a lot of the best investors, and I specialize in backing undiscovered, uncredentialed founders. So we're living in a world now where this is, like, these crazy seed valuations are, like, 50. Everyone going to, like, one company gravitating towards, like, chasing hype. I'm the exact opposite. I've backed more Teal Fellows than any other investor or fund, and I really try and create my own hype and almost incubate them.
Speaker 7:Obviously, it's up to the entrepreneur to build their business, but I put them on the right circuit. And the very first company I did this with was I was the angel investor in a company called Owner.com. Mhmm. I'm in the pre seed, and it's now, yesterday, they announced their billion dollar congratulations. Congratulations.
Speaker 1:What how are you thinking about this how are you thinking about the fund sizing? I feel like most funds, when they get to fund four, they're thinking 3,000,000,000, but you've kinda kept it small. What what are the advantages of that?
Speaker 7:So, I was lucky. I so it took about three weeks to raise, and I've got some raises in in my career. And, this this was, a very smooth process, And I deliberately kept it small and disciplined. I was lucky I had a lot more demand. I wanna do a good job for people.
Speaker 7:I wanna do a good job for the founders I back and my LPs, and I think smaller fund sizes far outperform larger ones. In terms of what I'm backing now, I actually have a founder, like, living with me that I don't know too well. I invited him into my home. Another founder, put his Visa on my credit card personally. Third founder, I cosigned for the apartment lease.
Speaker 7:So it's it's really just about putting people on the right track and being their first believer.
Speaker 2:That's so awesome. Amazing.
Speaker 1:What what overall trends are you excited about or staying away from? What's your take on defense tech? The application layer in in AI, you've kind of built a the perfect company to benefit from foundation models. Didn't have to train anything, but I'm sure Do Not Pay is benefiting from AI and agents and, reasoning models. But what what are the trends that you're most excited about right now?
Speaker 7:So I'm founder first. So wherever the top founders are going, I go. Mhmm. For example, a recent company that I was the first believer in with Corey, is Pilgrim. I think he was on your show a few weeks ago.
Speaker 1:Yeah. Yeah.
Speaker 7:They they raised an amazing round, I think, from Camtos and others, which is a top defense investor. Yeah. Also excited about AI. I'm a investor in a company called Assured, which helps insurance companies process their claims, and they've received huge traction in the market. I I think every AI every company will be an AI company, though.
Speaker 7:So I try and stay away from, like, founders who are, like, too smooth with their pitching. The AI first I I I think about this with do not pay. We've added AI to our business, and really every company should do that. So kind of these AI first pitches where the founders are saying all this jargon, like, we're building LLM operability dev tools. What does that even mean?
Speaker 7:So I'd like to focus on, like, real problems and real solutions.
Speaker 1:Yeah. I I think we actually met Jake Adler of Pilgrim together when we were camping a a year or two ago. I don't know if that's the first time you met him, but that was the first time I met, I think, both of you in person.
Speaker 7:It was the first time I met him in person, but I this is more in the COVID era, so I was, like, doing, like, program over Zoom. But I really enjoyed playing with you guys. I think you can
Speaker 1:Oh, yeah.
Speaker 7:Call if someone's a good founder or investor by how good they are at Mafia.
Speaker 1:Yeah. Yeah. A lot of bluffing. It's fun. I mean, on the topic of, like I I mean, I love Jake.
Speaker 1:I love Pilgrim. I don't feel comfortable due diligence in a company like that because it's so out of my wheelhouse in the biotech space. Is that one of the benefits of being early stage and founder led is that you can kind of just bet on the founder and you're not you you you don't need to do all the technical due diligence, or do you like to dig in on that stuff and just get up to speed?
Speaker 7:I I don't wanna get into trouble by revealing any, like, specific numbers. But Sure. Of my biggest kind of wins, they've been sub five or even around two average. And so that kind of risk is baked into the valuation entry price.
Speaker 1:Sure. Sure.
Speaker 7:I I've seen I've been operator for ten years now. I I've seen things come and go. And if you have a founder who truly, it's their life's work and their technical, they have some sort of good success. Mhmm. And so they just have to keep at it and stay in the game and not run out of money, and then they become really big.
Speaker 2:How long do founders stay under the radar today? Right? And and if you can invest in a founder at five posts, right, they're typically you're either friends with them, you can add a tremendous amount of value, or they're flying under the radar in some form of another and then at cert at a certain point they become kind of discovered broadly and they start getting, you know, these rounds start getting bit up. It feels like with the internet today, even x, you know, a kid can drop out of college and immediately get, you know, three term sheets in a week.
Speaker 1:Especially if they can go viral, which is like a common thing that we're seeing now with X is that some founder does some sort of stunt, gets a ton of attention, and then there's a question about whether they can build a product, but it certainly drives venture capital interest. But, yeah, I'm interested to hear your take on that.
Speaker 7:So I think we're seeing a rise of, like, super credentialism. Now VC top VC firms are even tracking math competitions in high school, And you have to be found as they tell the perfect story. They're like, we I won Intel. I won math. I went to MIT.
Speaker 7:I dropped out of MIT. I worked to OpenAI, and now I'm starting a company. Those ones are super chase. Everyone's chasing them. There's lots of competition.
Speaker 7:But for me, I really think it's about creating one's own winners. And so the best entrepreneurs I've backed, they didn't have those credentials coming in, and maybe they needed to be put more on the right track in terms of what they are working on. And a lot of sometimes investors even passed on them. And so I I really I'm not saying the math competition winners make bad founders. Obviously, there's some huge wins with that.
Speaker 7:But just because someone's good at math doesn't mean that they make a good founder, and there's, like, more innate qualities that other people aren't signaling on.
Speaker 1:How do you think about, kind of the geopolitics of entrepreneurship right now? We're in kind of this this odd realignment towards America. There's there there's some VC funds that are pushing really hard to invest in Europe. There's other folks that are great at I mean, you said you you you paid for someone's visa. Clearly, that sounds like you're bringing a founder from somewhere else to America.
Speaker 1:What what does the trade imbalance look like in the founder ecosystem? Is America still bringing enough, talented entrepreneurs here? Is it still fertile ground for, the global entrepreneurship community to come to America or Silicon Valley and build generational companies?
Speaker 7:So I'm originally from England, as you guys can probably tell from my accent, and I think that America is by far the best place to build a company. People are more ambitious here. The capital availability is, like, a hundred x. I I think a concrete example is, like, the most valuable private company in The UK is, like, Revolut, which is like a bank clone. The most valuable private company in The US is, like, OpenAI or SpaceX.
Speaker 7:SpaceX. There's, like, order of magnitude bigger. So I encourage any founder I back to move to The US and also to move to the San Francisco Bay Area. Unfortunately, still being in the Bay Area really matters a lot. But companies don't have to start in the Bay Area.
Speaker 7:They could start in Arizona or wherever they drop out from, they should really move here. Pilgrim is a great example. Jake started in Canada and then moved to the Bay Area. I also think there's a huge arbitrage on the o one visa. It's people it's known as the genius visa, but, it has, like, over a 95% approval rating, depending on the year.
Speaker 7:And so you get someone the o one visa, and they're a true genius. They move to Silicon Valley, and then they hit the ground running.
Speaker 1:What about advice for young people? Do you think learning to code or being able to code is still a positive signal? Or in the age of Cursor and Windserve and Devon and AI tools, it's becoming less relevant?
Speaker 7:I think the biggest thing is, like, distribution and being an online first and having these skills of, like, distributing your product. Coding and being technical is important, but it's just one skill. Like, I backed the WAP founders, WHOP, as an early check, And they were, like, really deep in, like, sneaker bot communities and things like that because everyone is starting a company now, and you need to break out. I feel like a lot of Stanford students are just starting companies just for the resume. There are so you there's so much noise, and you have to kind of wade through that.
Speaker 1:Yeah. The WAP founders are definitely doing it for the love of the game. I mean, they're they're killers. It's amazing. What a great company.
Speaker 2:Can you give us I know it's not why you're on the show today, but can you give us an update on on Do Not Pay? Seems like in so many ways, the company was incredibly well positioned to benefit from improvements at the model layer. Give us the update there.
Speaker 7:Yeah. So Do Not Pay is an incredibly efficient business. It's a very small team. It's only 14 people, and and seven of those are, like, expensive employees and seven contractors. And when I started Do Not Pay, it was really about templates to get people out parking tickets.
Speaker 7:And admittedly, now, ChatGPT can write you a template letter. But AI has improved our product by five to 10x. So instead of helping people with parking tickets now, we have AI agents. They log into someone's Comcast account and start negotiating with Comcast to get people's bills down. And the big companies have AI, and we have AI, and it's like AI versus AI warfare.
Speaker 7:But we're we're more motivated than the Comcast of the world, and so we're winning, like, thousands of these negotiations a week. And I think it's a good lesson that I tell all the people I back is, like, you can't rest on your laurels. You constantly have to be innovating, change the product, and adapt with the times.
Speaker 2:Yep. That makes a lot of sense.
Speaker 1:Fantastic. Well, thank you so much for coming on the show. We appreciate you, and good luck with the new fund.
Speaker 3:I feel
Speaker 2:like, I I my only concern for fund four is that some of these bigger multistage funds are gonna sort of pay a private investigator to follow you around and just sort of, like, see who you're meeting with, you know, ahead of time and be like, oh, Josh is trying to do another
Speaker 1:The preempts.
Speaker 2:Trying to do another, you know, 500 k on 5 mil. Why don't we offer them 5 on 25?
Speaker 1:Has that actually been a problem for you at all? Have have you, are are the, like, the bigger funds, the the crazier dynamics? Is is that is that a trend that early stage VC should actually be worried about?
Speaker 2:No. Think Josh's playbook is he meets Just way before. Buys 10% before anybody knows about it and then says, hey. You know? You guys, you know, take them on a road trip.
Speaker 7:They're they're not ready for the big funds. They they need about a month to kind of get their their deck published and stuff like that.
Speaker 1:Yeah. That makes sense. So it's not it it it's not strictly like, they wouldn't be sniped even if they could be found because they're just not there's not in a place to do those types of rounds. That's interesting. Makes a lot of sense.
Speaker 1:Well, thank you so much for joining. Love it. This is fantastic.
Speaker 2:Great to hear the update, Josh. And, yeah, congratulations on the new fun.
Speaker 7:Thank you. See you guys soon.
Speaker 2:Bye bye, Josh.
Speaker 1:To you soon. Well, that's a great, cue to talk about Linear. Linear is a purpose built tool for planning and building products. Meet the system for modern software development, streamline issues, projects, and product road maps. Jordy's been using it for the past thirty five years.
Speaker 1:He loves it.
Speaker 2:I wish.
Speaker 1:It was fantastic. And Planned his own.
Speaker 2:Years before I, you know, was in the womb, I was I was running on Linear. Now, know, a funny little anecdote. Linear's sending us some merch. Oh, yeah? And and the the automated email to notify us that they were sending us merch that's not even available online was like perfectly designed.
Speaker 1:Designed? No way. That's crazy.
Speaker 2:Like it was truly incredible. I'm like, okay.
Speaker 1:Yeah, culture of design.
Speaker 2:Yeah. Every single touch point.
Speaker 1:Makes sense. We should also talk about Numeral Numeral hq.com. Sales tax on autopilot. Spend less than five minutes per month on sales tax compliance.
Speaker 2:It's sales tax AGI, John.
Speaker 1:It is. We gotta get we gotta get Blueprint on Numeral. Yeah.
Speaker 2:Brian Johnson on this entire
Speaker 1:Pitching him. Bit. Are you doing for sales tax? What if he's just like a Marty on Numeral? It's possible.
Speaker 1:It's a highly efficient business. I'm excited to talk to him about it. Benchmark series a. Anything else you're tracking on Polymarket these days? Saw.
Speaker 1:I'm still obsessed with the world's largest tech company. NVIDIA is surging right at the same market cap as Apple, but NVIDIA has the the momentum.
Speaker 2:Yeah. Largest company May. It's the gap has been closed, John.
Speaker 1:Oh, yeah?
Speaker 2:It's still so NVIDIA is at 42%. Microsoft is at 50%, And NVIDIA has a lot of momentum.
Speaker 1:Oh, yeah. NVIDIA's forty two percent now. Wow. They really are ripping today. They were at 20 something just yesterday.
Speaker 1:Good to be Jensen. Good to be Jensen. Mean, I was I was posting this that that if NVIDIA does it, if they pull it off and they're the biggest company, they're gonna have to teach Jevin's paradox.
Speaker 2:It's $60,000,000,000 it's only a $60,000,000,000 gap.
Speaker 1:Jensen can He
Speaker 2:can do He needs a horse race. More he needs to he needs one more
Speaker 1:One more deal
Speaker 2:with a with a global
Speaker 1:You know, he's been on the conference circuit, but it's working. Like, he seems to be at a new conference every single week, but, clearly, he's getting business done at these events, and he's striking deals. And I'm sure it's like, you know, he meets someone super important, like the head of a country, and then says, my people will talk to your people, and we'll get Napkin. And we'll ship you a hundred thousand GPUs.
Speaker 2:Yeah. He definitely has envelopes or not not not Napkins. Napkins with with full fully fleshed out contracts on them. You know, they just hit
Speaker 1:Just how many zeros do you want behind the one of the number of GPUs you're ordering
Speaker 8:Yeah. Of
Speaker 1:hoppers? Fantastic. I don't know if Brian's here yet. Let's check on him. And, yeah, mean, maybe we can do some timeline while we wait for him.
Speaker 1:We got some posts we can talk about. Mischief collabed with Mercedes. This is a fantastic looking collab. They created a trash can with
Speaker 2:Seeing this
Speaker 1:pedals.
Speaker 2:Seeing this almost made me angry because I want I want every piece
Speaker 1:of that. Like you like, oh, like, what did they do? This is so frustrating.
Speaker 2:Thought something was Yeah.
Speaker 1:Like, did they do they do something that we were thinking about doing or something? No.
Speaker 2:No. Just incredibly well executed partnership.
Speaker 1:You can kinda scroll through
Speaker 2:these And I guess they're gonna be
Speaker 1:selling There's an AMG coat hanger. That looks like a fantastic coat hanger to hang your jacket on. The couch
Speaker 2:is just
Speaker 1:insane. Awesome.
Speaker 2:We got Brian
Speaker 1:We got Brian. Studio. To the stream, Brian. How are you doing?
Speaker 8:Hey, guys. How's it going?
Speaker 2:It's great. It's great. It's great to have to have you on the show finally.
Speaker 1:We've How'd you sleep last night?
Speaker 8:Yeah. Really well. Actually, no. That's not true.
Speaker 1:Oh, no?
Speaker 8:No. I just started a new sauna protocol. Okay. And it's 200 degrees Fahrenheit.
Speaker 1:20 degrees. Wait. What what's the sauna that we do? Isn't it like a 30 or something? That's crazy.
Speaker 2:Yeah. I mean, I can get my sauna so
Speaker 1:Yeah. How how
Speaker 9:much I've
Speaker 1:been nerding
Speaker 2:out about saunas for a decade now. And and currently, my sauna can get up to like one sixty five, and then it'll trip like a degrees. A heat limit. So I'm not I'm not even able to get to that range yet.
Speaker 1:You're in the minor leagues.
Speaker 2:Yeah. It's in the minor leagues.
Speaker 1:Okay. So 200 degrees. What else is special about the new sauna routine?
Speaker 8:Yes. I I found I read this yesterday. Let's see here. So a yeah. At two hundred degrees, it takes about twenty to thirty minutes to bake an egg until the white is set and the yolk is still soft.
Speaker 8:So yeah. It's hot. It's like I've done seven days now, and my sleep has been disrupted. So I'm still getting I'm still getting good sleep scores. I'm my total time in bed, but my nervous system is is pretty high.
Speaker 8:So Sure. Yeah. So I'm going through
Speaker 2:this So do you have to are you wearing gloves? Are you wearing, like, any type of protection on your head at 200 degrees? What what do you need to actually make it not, you know, cause your hair to fall out?
Speaker 10:Or something
Speaker 8:like that. Exactly. So today's day eight. I think I have the system sorted. So I I sit on this this ice pack, and then I have another one that I put inside my shorts to cool the testes because it does lower sperm quality.
Speaker 1:Sure.
Speaker 8:So make sure that the balls need to be cooled. And then I have another ice pack laid over my head, because it can make hair brittle and, yeah, cause scalp alter irritation. So those seem to be adequate.
Speaker 2:Where did people used to never people used to never believe me when I said I had I got an ice pack on Amazon specifically for use in the sauna that is like a more like a cup. They stopped. They discontinued them. I think it was just me and Brian buying them on there. Yeah.
Speaker 2:The special cup ice packs.
Speaker 1:So where did this idea come from? Is there new research, or did you just discover old research? Or I mean, I imagine that you wanna know that there's some sort of data out there about the effects of this, or are you just coming up with this idea on your own?
Speaker 8:Yeah. I mean, our process has been we've rolled through all the scientific literature and said what things have the very best evidence to improve health span, lifespan.
Speaker 11:Mhmm.
Speaker 8:And then we've just gone systematically down the list. And so Sana's always been a target of ours, but most of the data in Sana is observational, which is a a lower grade of quality data than interventional where you say, if we're going to do this thing and it's going to solve the you know, whether you're gonna see whether it has an effect or not. And so we just finished up with hyperbaric oxygen therapy, and now we're pointed at sauna. So we completed about 40 measurements for sauna baseline, and now we're testing. Like, even seven days in, like, I'll tell you, I just did this analysis this morning.
Speaker 8:My I had a five 6% drop in my central blood pressure, a is it's a that's an improvement. A 21% improvement in my central pulse pressure, 50% improvement in my augmentation pressure, and 25% improvement in my augmentation index. So we're looking at all these vascular age markers. So even seven days into sauna, looks like it's having, you know, some some meaningful effects in my vascular health.
Speaker 2:How are you thinking about the potential of hyperbaric oxygen chambers? It feels like the next frontier, the people that have a cold plunge in a sauna at home are probably, you know, thinking about adding one. You've you've used them quite frequently, but but is that is that the next trend that that you're expecting to see broadly on the hardware side?
Speaker 8:Yeah. The hyperbaric was the best therapy I've ever done. Wow. And so we've we've tried so many things. And what was unique about it, it's whole body, health improvement.
Speaker 8:So it improved my brain and my gut and skin and inflammation markers and, like, protein markers that that cause Alzheimer's were down. Trying to think others
Speaker 1:Is there an equivalent to, like, altitude that you're at, or are you just, like, in the stratosphere? Or or is it, like, you're you're in you're in Los Angeles, but you're effectively in Denver, or is it more like K 2 or Everest, or is it like space?
Speaker 8:Exactly. So what what happens is you, it's a hard shell chamber. Mhmm. And then you pressurize to two atmospheres Mhmm. Which is the equivalent of about 33 feet underwater.
Speaker 8:Underwater. Got it. So it's, yeah, it's pressurized, And then you breathe in a % oxygen. So when you breathe in oxygen, the atmosphere is about 21%. So you're getting oxygen through your body.
Speaker 8:But at this high concentration plus the the the the pressurization, you basically flush your entire body with this % oxygen. So it pushes it to via the plasma. So it gets it out to all the extremities, and that has an effect of growing new blood vessels, of getting oxygen to to parts of your body which you just don't get at. So it's that ninety minute exposure to oxygenation to an entire body that which has this whole body effect.
Speaker 1:It seems like a lot of the interventions that you do kind of have there's some that have power lot outcomes, like sleep, diet, exercise, and then there's some that are more on the long tail. How have you thought about as just being like a science communicator relaying the relative importance of these? Because some of these seem like they're extremely expensive for a minor gain, but it's worth it for you because you're running the experiment. And Yeah. This is your life.
Speaker 1:But for other people, it might be a distraction to say, oh, I just need a hyperdiremic chamber, and then I don't and then I can eat McDonald's. Right?
Speaker 8:Yeah. Exactly. I mean, I think the the big the big change for me was in the past few months, I've been able to figure out how to compress everything I've learned into one biomarker. Mhmm. And that I just didn't think that would be possible because before, if you talk about health, it it depends on what era of guru you're in.
Speaker 8:You know, it's sometimes it's like NR or resveratrol or cold plunge or sauna or, like Mhmm. Take your given, you know, a celery juice or whatever. And the marker, I think, that is actually durable over time is resting heart rate before bed. And so the reason why this is so good is it basically is if you show me your resting heart rate, I'll see your soul. It's an accounting of your life decisions.
Speaker 8:And so the thinking is this, that, like so tonight when you go to bed, if you lay your head on the pillow, and if you have a wearable, just take a few deep breaths and then look at your resting heart rate. If you don't have a wearable, just take your pulse. You know, do it for six seconds times it by 10. Let's say your resting heart rate is 60 beats per minute. Your singular goal now is to drive that down.
Speaker 8:And so over the next week or two weeks, you wanna have that be 55 beats per minute instead of 60. And when you see that happen, your sleep is going to be improved. Mhmm. And when your sleep is improved, you're more likely to exercise. When you exercise, you're more likely to eat well.
Speaker 8:When you eat well, you're more likely to. So it creates this really positive domino effect. And the other thing it does is it it's a check against behaviors that drive your resting heart rate up at night. So a lot of our worst behaviors are between, like, 5PM and midnight. We're tired.
Speaker 8:We're stressed. We wanna just be left alone because it just all feels too much. And oftentimes, food can be a soothing mechanism or other things, you know, a drink. So activities in that late night, even though they seem soothing to us, they drive up our resting heart rate. And that necessarily reduces your sleep quality, which then reduces your your likelihood to exercise.
Speaker 8:So I basically I now work with all kinds of people helping them understand which things increase heart rate and which things decrease heart rate. But once you build your life around that, it solves all of the fundamental problems with health that you wanted a basic layer. And then once you get that solved, you can then, of course, flatter up and do other stuff, but really, that's it. Like, that is the marker that you can peg all your electric decisions on. It's a really good starting point.
Speaker 2:Agree. What ingredient are you worried that will that we're consuming a lot of, that this sort of maybe broader biohacker community is consuming a lot of today that in fifteen or twenty years from now we'll discover is is actually terrible for us? Because we've, you know, we've done that we've done that a bunch
Speaker 1:a
Speaker 2:a bunch
Speaker 1:of times.
Speaker 2:Fat is probably the biggest one. But but is there anything that that comes to mind that you're kind of wary of that Food ecosystem. Don't you're maybe not a % convicted on yet, but you're you're starting to We're watching it. Spend more time thinking about?
Speaker 8:I'll tell you. We we got pretty surprised. I was taking rapamycin. This is considered by many in the longevity field as, you know, a very promising drug. And probably if you I mean, antiaging scientists disagree on almost everything, but there was probably more consensus around rapamycin around than anything else out there.
Speaker 8:And I was taking it for several years. We meticulously tracked my blood levels to make sure we were on a a good dose, but we all we stopped last year because the the side effects were too significant. Like, lipids were being messed up. My blood glucose had some alterations. I had soft tissue infections.
Speaker 8:And then a month after we stopped, a paper came out that showed that 16 epigenetic clocks showed that it actually accelerated age. So this is not the end all be all to say rapamycin is toast. This is just to say that it's not like a slam dunk easy one. It's complicated. And so we stopped.
Speaker 8:I I stopped taking that that drug. But I guess, like, it's a good example to your point of we I think we're in the very early stages of truly understanding antiaging and biology and and certain interventions. I think we're good on sleep and exercise and, you know, eating nutritious food, but even then, that branches out into some complexity. But I'd say rapamycin is probably, to your point, a really surprising outcome for where consent like, emergent consensus has been, and now we're not doing it anymore. And so there's a few other drugs we've been looking at.
Speaker 8:We have a similar path we're looking at right now, but that's probably one of the bigger ones that I would identify.
Speaker 2:Do you think, antiaging will be solved in some form via pharma or a collection of lifestyle decisions, right? Because in in many ways lifestyle decisions today, you know, allow you to have a longer health span, lifespan. But in in some ways, you know, we had the the founder of of New Limit on on the show last week, which is working on longevity many Yeah. It feels like if we can all just extend our lives long enough to get the, you know, the the sort of pending miracle drug that, you know, adds whatever, another hundred years, fifty years, what whatever that that number ends up being. But I'm I'm curious how you look at it.
Speaker 8:Yeah. I yeah. I think we need much more robust interventions that the the type that Brian's working on with New Limit. Did you guys have Brian on?
Speaker 12:Yeah.
Speaker 8:Yeah. Yeah. I I love what he's building. I'm an investor there.
Speaker 5:Mhmm.
Speaker 8:I think that that's a very promising path. And what a lot of people, I think, don't understand with what I'm trying to do is I'm not suggesting that one can jump past one twenty or find a path to not die by going to sleep and exercising and eating well. I'm suggesting that this is the most disruptive moment in the history of the human race. We're giving birth to superintelligence. It's gonna transform society in ways we can't understand.
Speaker 8:And in this approaching an event horizon, I'm suggesting, literally, the only thing we know is that none of us wanna die in this very moment. Mhmm. And so I'm really trying to give birth to a new ideology, a new way to understand ourselves as a species. And but, you know, ideology and philosophy is very hard for people to engage with. So I speak with about things that people understand, like going to bed on time and and not eating junk food and, you know, not basically doing things to slowly kill yourself that in a few years' time, I think we'll look back at this moment and we'll say, that was insanity in the you know, before the early before the late twenty twenties, humans used to do things that was some form of slow suicide.
Speaker 8:Can you believe that? That is just incomprehensible. So, really, I guess I'm I'm trying to, get at this from a a philosophical, ideological, spiritual, cultural perspective, by the practices I'm doing now, but I'm I'm I'm grateful that people like Brian working on the more robust interventions that actually will meaningfully change, how we age.
Speaker 2:Are you worried there's not enough companies like New Limit, you know, taking on this monumental task? It feels like, you know, at least within the tech community, there's a bunch of ways. You know, there's a million easier ways to make, you know, dollars 100,000,000 than longevity. Yeah. And that automatically, you know, people self select out of that path.
Speaker 8:Yeah. Exactly. Yeah. I I I'm not surprised at all. And I my die my diagnosis of the situation would be that currently, the strongest incentives are pointed at the accumulation of wealth, power, and status.
Speaker 8:If you look at our day and say, how much effort do we put behind those things? And we do that because when death is inevitable, we've chosen a YOLO game if we're going for epicness, right, of of achievement or of being remembered for a given accomplishment or of status and power in society. And we just haven't crossed over that threshold yet where people really believe that we can begin to dramatically extend our lifespans. And so if if AI progresses to a certain point where it even opens the window or or a longevity intervention makes a breakthrough where it's like, is this moment really different? Like, you know, people look at the health and wellness stuff.
Speaker 8:They're kinda like, I don't really care. Like, if I lose an extra ten or fifteen years of my life, whatever. I don't wanna live those live those years anyways. I'd rather have this preferred life now. So I think it's just we're just really caught in a cultural moment between the death being inevitable and don't die.
Speaker 8:And it's it's happening right now. We're starting to cross over. But I think there will be an event or a few events in the coming years. We'll change it, and then humanity's gonna snap and say, I think this might be it. Like and I think we'll have a big cultural shift.
Speaker 1:How do you think about, like, this internal motivation as something that can overpower an unhealthy lifestyle? I'm thinking about Warren Buffett drinking six Coca Colas a day, kind of rejection of everything that we know about health and wellness. And yet he's been phenomenally successful and performant in a very stressful, important job for, what, seven decades or something like that. Donald Trump's in a similar category. The the it seems like there's something to the motivation and, like, the human will potentially, but is that just all pseudoscience in your mind?
Speaker 8:Yeah. I mean, people, they they do reference Buffett Mhmm. A lot. Right? And and it's like, also, it's like someone's grandma who lived to be one zero two who drank and smoked every day.
Speaker 1:Yeah.
Speaker 8:And, you know, those examples are just not practically relatable. Right? Like, those those are genetic differences that they got they won the genetic lottery, and they live despite their choices. But Mhmm. If most people do what they do, they would die prematurely.
Speaker 8:Mhmm. But I I think it really comes back to the ideology that that Warren Buffett played a game in life about asset accumulation. Right? And he won the prize. I mean, he's arguably the best investor of all time.
Speaker 8:Mhmm. So he really played that game very well. And so the question is, if if you were to basically take a Warren Buffett like persona today, what would they do? Would they try to amass assets or they try to amass existence? And so what I'm suggesting right now is the the highest ROI investment anyone can do is to stay alive.
Speaker 8:And that's what I'm trying to do is I'm I'm trying to basically I've I've attempted to become the healthiest person on the earth, like the you know, with the best biomarkers to demonstrate a new game of status and accomplishment is here. And it's about health and wellness, and it's about your ability to exist. And so this will take time because it's a massive shift in our culture culture. But, really, it's just like we've all whether we've agreed to this explicitly or not, we've all agreed to this wealth, power, status game, and we play it independent of whether we're whether we're aware of it. And I'm just trying to say that that is a game.
Speaker 8:It will shift, and a cold a new cultural emergence will will arise, and don't die will be the prominent thing we'll focus on.
Speaker 2:Last question I have. Do you think people pay too much attention to scaled data sources like, the concept of blue zones, right? Is it, should individuals be focused on highly personalised health and the approach that you're taking, is sort of real time experimentation. Yeah. Rapid testing.
Speaker 2:Because even, you know, I'm curious if you have any type of thesis here. But, you know, I think people, many people have said that, you know, Japan having this, you know, immense longevity might actually just be pension fraud. And I don't know. You know, because people have an incentive to like
Speaker 1:That's funny.
Speaker 2:People have an incentive to say, like, yeah, grandma's still kicking. You know, keep giving us the, you know, 10 k a year or whatever. Funny. I'm not making any accusations myself. But I'm
Speaker 1:just next
Speaker 2:year. People love to read into, you know, oh, this region, they're drinking two glasses of wine. So I should drink three, and I'll be okay.
Speaker 1:Yeah.
Speaker 8:Yeah. I mean, what you're touching on is a real problem where if if somebody encounters the idea of wanting to be in good health for whatever reason like, let's just say a person wants to be hot. Right? They wanna look good and be hot. Then the next question is, what do you do?
Speaker 8:And once you step out into the world and you say, what do I do? You're faced with hundreds of different opinions, and they're all in conflict with each other. And then if you take another scenario where somebody's got something that they're dealing with, they have constant headaches or they have sleep apnea or they have an autoimmune disorder, like or take your your thing, they've got a complicated situation. What do they do? And so up until this point, you've had to go about and navigate the world of experts.
Speaker 8:You know, now these AI tools are better than almost all the experts in helping people solve their given problem. And so the next thing to close this loop is now that we've got a source of advice that is reliable and that everybody has access to, it's now really a function of measurement. Is can you actually get data that then improve the AI's ability to make very precise assessments? And so that's what I'm working on personally is I've become the most measured person in human history, and I've seen firsthand when you have data, it's incredibly helpful to figure out what's happening. And when you don't have data, you're in the dark poking around.
Speaker 8:And so we're trying to figure out how to scale data and access. Because once you pair that with the AI, then the the question of what to do becomes so simple, which, again, is why I believe we're at this moment of shifting dramatically where the complexity and the friction between someone saying, I want to be healthy and knowing what to do is extremely short. Whereas now, it's, like, so big and so complicated. It's, like, honestly, not doing it. So I think we really are.
Speaker 8:Like, this moment is so rich and has such high potential. It hinges on data. With a closed loop of AI, I think we're off to a new race.
Speaker 1:It's exciting.
Speaker 2:Alright. Very exciting. Well, come back on when you have more news. Yeah. Always welcome.
Speaker 1:This is amazing. Thank you so
Speaker 2:much for time.
Speaker 8:Bye. Yeah.
Speaker 5:Good. Hang with
Speaker 8:you guys. Be well.
Speaker 2:Cheers. Talk to
Speaker 1:you soon. Bye.
Speaker 2:We got Matteo.
Speaker 1:We got Matteo coming in in the waiting room. Let's tell you about Vanta really quickly. Automate compliance, manage risk, improve trust continuously. Vanta's trust management platform takes the manual work out of your security and compliance process and replaces it with continuous automation, whether you're pursuing your first framework or managing a complex pro program.
Speaker 2:One of the fastest growing vendors on ramp
Speaker 1:Oh, really?
Speaker 2:At scale.
Speaker 1:No idea. And
Speaker 2:believe that.
Speaker 1:We're excited to have Matteo from Eight Sleep today. Massive day. Congratulations. Huge news. I gotta update my ad reads.
Speaker 1:I'm always talking about the pod four ultra. It's the pod five today. Pod five. Congratulations. What's
Speaker 2:going on?
Speaker 10:And this is
Speaker 1:this is particularly huge for the podcasting industry because I've said this before, but, you know, in the high stakes world of professional sports, sleep is extremely important, but arguably a higher stakes world exists, technology podcasting.
Speaker 12:And you
Speaker 1:need to get your sleep if you're gonna be podcasting three, four hours a day. And that's why we sleep on Eight Sleep.
Speaker 2:You'd be proud. I I legitimately get angry at John when his when his sleep scores are down. It's it's
Speaker 1:It's terrible. It's tearing us apart.
Speaker 2:I take I take this game, this podcasting game very seriously.
Speaker 1:Very seriously.
Speaker 2:And I take John's sleep very seriously. And
Speaker 4:You should.
Speaker 1:Jordy's been smoking me. But, yeah, give us the update. Explain to us what how the launch is going. What's the overview? Break it down for us.
Speaker 4:Yeah. Of course. I mean, first of all, at Eight Sleep, we develop technology to improve your sleep. That that's literally what we do. And the way we do it is by focusing on controlling and personalizing all the environmental factors.
Speaker 4:Mhmm. We started with temperature in the cover, which was a cover is a cover that you can install on top of your mattress. It tracks everything about your sleep and health, and then it changes temperature to give you better sleep. And then we took temperature to the next level now with pod five. So you also get the blanket, and you can sleep in this sort of microclimate.
Speaker 4:And, guys, I I know I'm biased because I'm the CEO of Eight Sleep, but it's freaking cool. I have been using this product for nine months, and I have given it to some friends or people inside the company, and they all love it. Doesn't matter if you like cold or warm.
Speaker 2:Anecdote, John's John's wife Yeah. Messaged John this morning when she saw the launch, and she was,
Speaker 1:like Independently.
Speaker 2:Like, just sending exclamation points. Like, she's being like,
Speaker 1:we have to get one. Yeah.
Speaker 4:She will love it. Do you know if she sleeps hot or cold?
Speaker 1:Extremely she's cold. She wants it to be a blazing fire.
Speaker 2:An inferno. An inferno. A cocoon.
Speaker 4:Yeah. So bad. Love it because now she will be surrounded by temperature, cold temperature everywhere. It's like going in the freezer and closing the freezer and you just sleep there.
Speaker 1:And I like my side freezing cold. I I'm I'm minus 10, and she's plus 10 every night. But she says, you can tell him I love him for inventing this. It's really, like, the greatest upgrade of the entire year to our house. It's fantastic.
Speaker 4:That's awesome. And so temperature is one.
Speaker 1:Yeah.
Speaker 4:Right? And we tackle that biggest factor impacting your sleep outside the medical disorders. So there was plenty of evidence. We didn't even bend the wheel. We were just the first ones to really commercialize a consumer product that will do something that it was already proven to work.
Speaker 4:And then we got into elevation, and so we introduced the base. The base goes underneath your mattress, and it raises your head if you're snoring. Yep. And so you will see a drop in your snoring by up to 45%.
Speaker 1:Wow.
Speaker 4:If you have problems of circulation with your legs, we raise your legs.
Speaker 1:Oh, okay.
Speaker 4:And the most important thing that very few people know, I don't sleep flat anymore. Meaning, sleeping flat is from the eighties. You need to you need you need to sleep in a position where you raise a little bit the head, a little bit your, your your feet, and it takes away any sort of pressure on your back. Yep.
Speaker 1:Is snoring actually bad for you, or is it just annoying to whoever's sleeping next to you?
Speaker 4:Sorry. Say that again?
Speaker 1:Is is snoring actually something you should be worried about or something you should be trying to mitigate from, like, a health perspective or, like, a personal sleep quality perspective, or is it just annoying to whoever's sleeping in the bed next to you?
Speaker 4:No. It's it's negative for you. It it negatively impacts your sleep architecture, and it can limit the amount of oxygen that gets to the brain. Because if you think the the real true problem of sleep apnea, which is a form of extreme snoring Mhmm. If if if you will, is that when you have these episodes of snoring or sleep apnea, less oxygen gets to the brain.
Speaker 4:And so if your sleep apnea is very strong, the reason why you feel very tired in the morning is because you kept lacking oxygen in your brain during the whole night, and your brain cannot rest. Mhmm. And so mitigating snoring is very important for your own health and is important for your partner so you don't bother them with with your noise.
Speaker 1:Yeah.
Speaker 4:Now the latest base also comes with a speaker now.
Speaker 1:Mhmm.
Speaker 4:And the speaker plays soundscapes that you can play to fall asleep, to stay asleep, and then we have this partnership with Huberman where we are introducing an SDR, so non, sleep depressed. It's a sort of meditation and breathing. You can play that with the with the voice of Andrew, and then you just fall asleep, and you sleep like a baby.
Speaker 1:SDR, I think sales development represent is representative for Andrew Huber is just there pitching you on sleep. Like, you know, I've talked to a lot of people that are considering sleep, and I think it'd be really great for you tonight.
Speaker 2:Yeah. I I think there's an opportunity to do an ad supported 08:60
Speaker 1:Oh, yeah.
Speaker 2:That's important. And we'll record ads. We'll record ad.
Speaker 1:And you can fall asleep to the sound of us
Speaker 2:just The sound of ads.
Speaker 1:Ads constantly.
Speaker 2:And even at at at 1AM. Hey. Hey. Have you heard about ramp?
Speaker 1:Have you heard about ramp?
Speaker 4:Exactly. I I I I can start playing ads for Ramp. Know? I'm joking. But
Speaker 1:Well, if they already have an Eight Sleep, we don't need to do an Eight Sleep ad again.
Speaker 4:Yeah. Maybe an Easter egg.
Speaker 1:Yeah. Yeah. Yeah. Maybe Easter
Speaker 4:When you wake up certain days, there is a a ramp up. By the way, my Tesla, sometimes I start no. I go into Tesla. I use the radio very few times, but then it it there are ads on my Tesla Oh, yeah. When I wanna use the radio.
Speaker 4:So
Speaker 1:Wow. Everything's ad supported now.
Speaker 2:You gotta upgrade to the ad free version of your car.
Speaker 1:Of your car.
Speaker 2:It's a dark sorry. We've entered in This is the very black mirror, but Welcome.
Speaker 1:Feature. It's gonna be cheaper because you're it's gonna be ad supported. What what what else have you looked at in the sleep world? I know that you've launched, some adjacent products. I'm thinking, like, you know, you're in blankets.
Speaker 1:Are we gonna see pillows? Are we seeing, you know, supplements and other clothing and pajamas and all sorts of different things? Like, how do you view the sleep market? And what have you gone after first, and what do you see on the horizon?
Speaker 2:Or even I like blackout curtains. Right?
Speaker 1:Oh, yeah.
Speaker 2:Try to blackout try to trying to blackout your room is is a you know, there's
Speaker 1:Yeah.
Speaker 2:Solutions. Yeah. What do
Speaker 1:you like? What do you what have you already done, and what's on the road map?
Speaker 4:Yeah. So if we go back, you know, to the beginning, right, we use AI and to improve your sleep. So anything that can improve your sleep is something we are gonna do sooner or later.
Speaker 1:Cool.
Speaker 4:Where there is technology is the top priority. There could be other products that maybe they don't have embedded technology, but that we develop based on our data because we are becoming one of the largest sleep labs in the world. So supplements, we launch a first line of supplements that we develop with Spitaratia. And the reason is we have all these data. We know what works or what doesn't work.
Speaker 4:Sometimes you you read people saying, oh, I should I take melatonin? Should I take magnesium? Yeah. We have run clinical studies. Mhmm.
Speaker 4:But from a technological standpoint, I would say the two coolest buckets to me are, one is environmental control, and the second is body scanning.
Speaker 8:Mhmm.
Speaker 4:And I'll tell you about both. So environmental control is, okay, today's temperature was the blanket and the cover, elevation, and sound. Then you should imagine that, yeah, there will be more thermal regulated products because temperature is is is the killer feature. But we I wanna control air, oxygen, light, noise, sound, sense, everything. So everything that we can optimize because the key difference between us and the wearables is wearables do a decent job at tracking stuff, but they don't do anything for you.
Speaker 4:Our job at Eight Sleep is don't wear anything, and we are gonna do the work for you.
Speaker 2:Yeah.
Speaker 4:And so this is the environment. Then doesn't matter how long you sleep. It's still a lot of time. And so the goal here is to work on body scanning technologies where we can scan your body every single night to detect if you are developing certain health conditions before you even know.
Speaker 2:Crazy.
Speaker 4:And that is part of our r and d.
Speaker 1:Have you been able to look across the anonymized sleep data and noticed any interesting trends? I'm thinking right before, tax day, or how do people sleep before Christmas? Or is everyone excited? Anything that you can tell us about, how the global sleep community trends one night or another. Do people sleep better during winter when it's cold or summer?
Speaker 1:I don't even know. Have you learned anything from aggregated data anonymized, of course?
Speaker 4:Yeah. Yeah. Yeah. We we have a look at some of this stuff. Again, as you said, aggregated anonymized.
Speaker 4:So, obviously, we we we don't know anything about an individual. But, like, for example, I think the city where the the town where they sleep the best is in Northern Australia. We have seen people sleeping more after COVID, meaning after COVID, the trend generally changed. Women tend to sleep longer than men. During the election day, people went to sleep, like, a couple of hours later.
Speaker 1:Oh, wow.
Speaker 4:And then we can start tie it or connect it to certain specific events. Right? Even sport, like Super Bowl, all that kind of thing, which is pretty cool. Or you see if there are bad days in New York and is is there's no day in New York, all that kind of thing. And it's pretty interesting to see these patterns.
Speaker 4:This in terms of, I would say, consumer behavior. Then with AI, our models are reaching a point where are smarter than us, and they start connecting the dots of of things that we don't even medically know. Meaning, let's say that you join a sleep and and let's say you you you shared that you have certain health conditions. Our model start understanding that that could be based on these parameters. You might have a certain likelihood to develop a certain health condition that you can go could be completely disconnected from sleep.
Speaker 4:It could be diabetes. It could be Parkinson. Mhmm. It could be a a neurological disease. But by correlating all these aggregated amount of data, hundreds of millions of nights of sleep, we can predict the future of health.
Speaker 1:Mhmm.
Speaker 2:I gotta ask, how did the Charles Leclerc partnership come together? It's good. Was that a was that a two plus year kind of you know?
Speaker 4:Let me start with a cool story. And and then I'll I'll tell you. But so the day we sign so I go to Monaco for the day we sign, and I'm at the hotel. And we need to go to this place where we sign, and then we do the the first photoshoot. And so Charles comes to pick me up, and he comes in the Ferrari because he drives the Ferrari.
Speaker 4:And so I said, good morning. You're the you're the best Uber driver I ever had by far.
Speaker 2:Yeah. Being driven around Monaco by Charles is is is a good good It's fantastic. Should do it once in their life.
Speaker 1:You know? Oh, yeah. The
Speaker 4:interesting thing is Charles bought the pod two years before the partnership. We didn't even know.
Speaker 1:That's always the best.
Speaker 4:Yeah. It's always the best. And so when we got connected two years later, he already knew about us. He he loves the product. And when I teach him our health vision, health is very important for him, and he's, like, an AI geek.
Speaker 4:You would never expect that. But he reads everything about AI. So when we meet, we never talk about formal one because I don't wanna bother him talking about work. Yeah. And we just talk about AI and help.
Speaker 4:Very cool. And so when we met, we had dinner. It was actually before the the f one GP in Miami last year, and it was a Thursday night. And before the end of the of the of the dinner, we said, look. We we wanna work together.
Speaker 4:We'll figure it out. I'll I'll do some steps to I mean, I'm I'm sure you you have a decent cost, and you will make some steps towards me because I'm a startup, and I don't have money. And and within a month, the deal was done.
Speaker 2:Wow. Quick. That's awesome. That's amazing. But, yeah, I I I get, you know, I'm not excited if I have a bad night's sleep and I gotta go podcast for That's right.
Speaker 2:You know, four hours. But I can't imagine getting a bad night's sleep and then needing to go race Race
Speaker 1:against Lewis Harris. Track at,
Speaker 2:you know, hundreds of kilometers an hour. Brutal. Makes sense. Well, congratulations to to you and the team. It's an amazing milestone, and we are, you know Yeah.
Speaker 2:Stoked to be partners. Proud to be partners.
Speaker 4:Yeah. Of course. You guys are doing a great job, so I'm a big supporter, and you for everything.
Speaker 1:Thank you so much. You're the man. We'll talk to soon.
Speaker 2:Coming on. Talk soon. Bye.
Speaker 11:Cheers. Bye.
Speaker 1:Fantastic. We love a big product launch on TV PM. Fantastic.
Speaker 2:Good.
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Speaker 2:Simply too good. And we have
Speaker 1:We're going into the Andreessen Horowitz LP meeting. We sent one of our producers out there, set a a Zoom room. Hopefully, it looks really nice. And we have an absolutely stacked lineup of Andreesen Horowitz general partners and some operating partners, and we should be able to take you on a whirlwind tour of what's going on in the Andreessen world, what they're investing in, what trends they're looking at, and what deals they've done because, we really have a full full list here finishing out with Marc Andreessen. But this should be a lot of fun.
Speaker 1:Eric will be kicking it off. He's been on the show twice. We we we broke the news here. Not really. He came on the show shortly after announcing that he was joining Andreessen Horowitz.
Speaker 1:And, he's been a close friend of us of ours for years, and it's always fun to talk to him about media and venture and tech and all of those things. So he'll be kicking it kicking it off with us breaking down how the transition's been, what it's like working at Andreessen, and how he's settling in. Has he ripped any huge checks? We're gonna get to the bottom of it. So we will bring, him in in just a minute.
Speaker 1:And in the meantime, why don't they tell you about Bezel? Go to getBezel.com. Your Bezel concierge is available to source any watch on the planet. Seriously, any watch. Marc Andreessen's known for wearing what what does what did he wear on Rogan?
Speaker 1:He wore a which one was it? Omega. An Omega. The botch of James Bond, the Speedmaster. The recently voted by Nico Leonard as the most iconic watch in history.
Speaker 1:He had a whole debate with all of his team. The great YouTuber about watches if you're interested in following him. And so maybe we'll see what what Mark's wearing. Maybe we'll see what Eric's wearing. I don't know if we'll get into watches.
Speaker 1:We always, we always try and spice it up, but some people some people wanna stay on message, surprisingly. They wanna they wanna focus on business. But, you know, we try and throw them off.
Speaker 2:Try to
Speaker 1:throw TJ off with some car talk. He wasn't really having it, but we'll get to him one of these days. We'll bring him back for a car segment eventually. Anyway, let's see if Eric is ready. We do we have a red, green, blue, yellow card?
Speaker 1:Let's see. Yellow. We're we're almost ready. So let me tell you about wander. Find your happy place.
Speaker 1:Find your happy place. Book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning, and twenty four seven concierge service. It's a vacation home, but better folks. The other thing that we could talk about is, four years ago, The Verge wrote of Elon Musk's Tesla bot announcement. Don't overthink it.
Speaker 1:It's a joke. It's a distraction and an empty promise. This was the event where Elon hired a dancer to come out dressed as a robot and is dancing around, and it looked very silly. And Elon is saying LOL because now, of course, the Tesla robot is dancing, and it's clearly very real. But Somebody was saying
Speaker 2:it dances like Brian Johnson.
Speaker 1:Oh, yeah.
Speaker 2:Brian Johnson's got that
Speaker 1:That is got
Speaker 2:that very specific style.
Speaker 1:The the interesting thing is that, you have to know know that, like, Elon likes humor. He likes telling jokes, and and he also knew what was capable. He could have just white label. He could have bought all of Boston Dynamics and had a dancing robot on stage, but he chose to put a human in a suit probably to troll people, I imagine. Like, that had to have been he had to have known what would happen, that people would see that and be like, that's obviously a human in a suit that looks And so, you know, we know that you didn't do a real robot, Elon.
Speaker 1:This is a joke. So he almost I I feel like he was baiting the media a couple years ago because what he was proposing, like, a humanoid robot was not impossible by the laws of physics. Elon, of course, lives by the laws of physics, and he gets to take his victory lap today, of course. Anyway, what else is interesting going on? Oh, HBO has rebranded again.
Speaker 1:Max is now HBO Max,
Speaker 2:and Derek Thompson.
Speaker 1:This is so
Speaker 2:That was absolutely brutal. I mean
Speaker 1:It was crazy. It was crazy that they went from HBO Max to Max. They rebranded three times as Max. They have three different logos. Max Max.
Speaker 1:They're bringing back HBO Max. They're Maxing. They're HBO Maxing.
Speaker 2:Somebody said back then, and I I think this was on point, was that HBO is such a good brand Yeah. To drop it
Speaker 1:Is crazy. It was always it was always a crazy, crazy move.
Speaker 2:But why why even call it HBO Max? Yeah. Why not just call it HBO?
Speaker 1:Yeah. They should just call it HBO. Drop the Max. Well, that's what ESPN did recently. It was in the it was in the business section today.
Speaker 1:ESPN prices its new service at $29.99 a month.
Speaker 2:And it's called
Speaker 1:And it's called ESPN. What a concept. You know, the Internet is as important as the linear TV over the over the air TV. And so make your OTT, option just the same name. It's it's genius.
Speaker 1:It's so basic. Derek Thompson was saying if Max is paying a marketing company a million dollar annual retainer for naming strategy, this is pathetic. But if Max figured out that it can add and remove HBO from its streaming title every two years to create a bunch of free outrage publicity, I sort of respect the play. So who knows? Is it three d chess?
Speaker 2:Are they
Speaker 1:playing four d chess? Who knows? Anyway, we got Eric Thornburg from Andreessen Horowitz in the studio. Welcome to the stream, Eric. Welcome to the stream.
Speaker 1:Are you doing?
Speaker 11:Coming off.
Speaker 1:Third time. Back. He's back. Three peat three peat champion.
Speaker 2:And kicking off a record, I have has eight Andreessen partners ever been on one podcast?
Speaker 1:I don't think so.
Speaker 11:I said Nixon went to China. Torenberg go goes on TPPN.
Speaker 2:Yeah. Look what happened. Look what happened.
Speaker 1:You opened the floodgates. It's been fantastic. How has the transition to Andreessen been? We asked you when you joined, what your plans were. Were you hitting the ground running?
Speaker 1:Are you ripping checks on day one? You're a couple weeks in the gig. I expect some sizable checks to be written. What you got for me?
Speaker 11:I feel like TPPN is my, you know, what did you get done this week? Yeah. Exactly. It's my week, fourth week. And, no.
Speaker 11:It's it's been amazing. I mean, just the the scope of the firm, almost 600 employees. I mean, I I don't think people fully appreciate all the the the amazing things that that are happening here. I've been spending a lot of time in the different deal meetings of the different funds, just getting up to speed in how we operate, meeting the meeting the broader team, starting to build out this this media org. And I feel like I talk to employees at OpenAI all the time.
Speaker 11:They're like, we've got so many things cooking. And I feel like there's a little bit of that here, too. Just Ben and Mark are so entrepreneurial, and that leads on to the different vertical fund leads that you're gonna hear yeah. Everyone's gonna you're gonna chat with today and people are gonna hear from. And, yeah, it's just been incredible.
Speaker 1:Yeah. Is is Andreessen the biggest venture fund ever in history now? I can't imagine there's
Speaker 2:a bigger one. Right? Think if you count the original ships that went looking for
Speaker 1:whales Whales. Yeah.
Speaker 2:Harpooning, they probably had, like, something like a thousand spread across maybe a few ships.
Speaker 1:Yeah. Because, I mean, there there there's, like, this narrative in Venture generally that, like, Andreessen's really big and no one's ever done it at this scale before. And, like, maybe that's weird or different or good or bad or whatever. But the other way to think about it is, like, think about the other major financial institutions that are huge, much bigger, sometimes an order of magnitude or two orders of magnitude bigger. And are they in founder mode, or are they, like, 200 year old behemoths?
Speaker 1:And all of a sudden, when you frame it like that, I become very bullish on the founder mode mode organization, even though all there's obviously all these competitive dynamics and different strategies. But it is very interesting to see a new financial institution. We got this from when we were talking to David on the show. And it it was just very interesting to see that, this is David Haber Yeah. That that he he came from Goldman, worked on firm wide strategy there, told us some of the history of how Goldman had developed all these pods.
Speaker 1:I was doing a deep dive on their, their special situations group and how that spun up and spun out during the o eight crisis. And, like, it's such a storied firm, but I don't think you can get there by maintaining some small size. You have to become an institution. That's exactly what you've done.
Speaker 11:And I think the Upwork's core insight, software's in the world and sort of the implication behind that, that the winners are going to get bigger and bigger and there's going to be more of them, is just perfectly coincided with the firm going super big, you need a lot of capital to support that strategy. And it's worked out tremendously.
Speaker 1:Yeah. I mean, yesterday, we were talking about this weird dynamic where you would expect the power law to apply to startup outcomes. And we've seen this from time and time again. It's very obvious, and it also just makes sense based on market dynamics, how, you know, power accrues, etcetera. But, venture capital funds also follow a power law.
Speaker 1:And and and and you would imagine that also the size and scale of the firms might also follow a power law as there are increasing returns to scale. So it's been interesting to see kind of that play out. And in many ways, the power law just keeps applying. No matter what lens or frame you take, there's, like, there's gonna be a big outcome. Anyway, Jordy, anything else you wanna run through?
Speaker 1:Can you break down LP Day? Like, what are what's actually going on today? What are we zooming into? Break it down.
Speaker 2:The thing I'm trying to triangulate is what's what's the next coinage. You know? Oh, yeah. What's the next American
Speaker 1:We gotta break it here.
Speaker 2:That's the trillion dollar that's the trillion dollar question.
Speaker 1:Or or it'll drop as a big piece either in The Wall Street Journal or on a blog, and then we'll we'll get you the same day to break it down.
Speaker 11:Yeah. %. And today and tomorrow is going to be us presenting, one, our biggest portfolio companies or some of our best ones that you'll have Alex Tamar coming on the show, Abania from WorldCoin, but then also the different leads of you know, Jen, who runs LP Day is is coming right after this and and also just our fundraising, I believe, over $40,000,000,000, you know, to to date. But then also the the heads of the different vertical fund. Size
Speaker 1:gone. 40,000,000,000. That's huge. That's the most deserving. That's the biggest SeizGong ever, I think.
Speaker 1:Maybe beaten out by Stargate. But other than Stargate, you know, you're up there.
Speaker 11:All in. I'll I'll yeah. I'll I'll let Jen, you know, sort of go go deeper on it. But I'll also just David George who leads our growth fund, which has done phenomenally well. You know, Martin on the on the infra side.
Speaker 11:Anjou works AI AI under underneath him. Do you Dave Yulovich on the American dynamism side. And and the LP Day is really just us talking to our LPs about, you know, what what is the latest in terms of how we're doing, what what we believe, what's happening in the market, where we think things are going, and it's really giving them kind of an inside purview. And we're gonna release some of the the best talks. But and, of course, you're gonna hear Marc Andreessen himself about, about where we are and where we're
Speaker 3:going.
Speaker 1:In terms of, kind of, like, advice for founders, what is the role of an LP day in the life cycle of a startup CEO that becomes a fun driver? I've seen sometimes where founders go to these LP days, and then couple months later, there's a direct investment from one of the LPs. Is that part of the dynamic, or is it really just an opportunity to kind of, come and and share, like, the story of the business with the wider business and investment community?
Speaker 11:Yeah, 100%. So we have a very influential LP based. Jen will get more into the specifics. And we're more diversified than your average vendor firm. So we have LPs that a lot of firms really focus on endowments.
Speaker 11:We've got some incredible endowments as well. But we also have a lot of other partners, including big international partners. And a lot of companies are looking for, you know, especially some of these AI companies, you know, Andrew told you about sort of the open source AI companies that he's worked with Yep. Looking for the global global partners. So so, yeah, we know we have Worldcoin, etcetera.
Speaker 11:So there are a bunch of companies that have international presence that are growing their international presence and want partnership from from from big players globally. And some of them are here. And, yeah, we we're definitely looking to
Speaker 4:Yeah.
Speaker 1:I mean, we saw that yesterday with Nvidia. Jensen went to Saudi Arabia, announced some big deal. The stock popped. It might be the biggest company in the world. It's so back.
Speaker 1:And, you know, Jensen gets invited to these things. But if you're, you know, two years into your entrepreneurial journey, you might not get a seat at the table. But an LP day could be an opportunity to meet someone from that community. Correct?
Speaker 11:Yeah. Yeah. No. I understand. Ben Horowitz was was also also there as reported, which is why he's he's not joining TBPN today.
Speaker 11:But Mark will give you the the the scoop there
Speaker 1:That's right.
Speaker 11:Or perhaps Jen. But but, yeah, no. There's a there's a there's a lot going on in terms of, international partnerships.
Speaker 1:And Yeah.
Speaker 11:So expect to to hear more from us on on that front.
Speaker 1:Yeah. Now I'm sure the fund is aligned on most of the strategies and kind of topics and hot takes, but there's probably a lot of internal debate as well around how these future tech trends will play out, especially the things that haven't been codified or really decided. Are there any topics that you're hearing the partnership kind of go back and forth on or debate internally, whether it's future of AI or how geopolitics plays out or anything, reindustrialization, different strategies? What is keeping the partnership, you know, excited in, in big partner meetings?
Speaker 11:I'll give you a couple. Please. So so one is more of a meta, topic, which is this idea of you know, a lot of people say a lot of things about us and how much should we engage.
Speaker 1:You
Speaker 11:know? Should we just it's on the work and just just working with founders, just just, you know, driving great returns for LPs, or when do we correct the record? When when do we step in versus, hey. It's not, you know, it it's not worth our time. You know, there's this famous this rap rap beef.
Speaker 11:Yellow once called out Eminem, or maybe it was MGK. MGK called called Eminem. And then Eminem was like, oh, man. Now I gotta answer this fool. I'm gonna, like, build up his profile in in responding to him.
Speaker 11:And so sometimes it's it's a little bit of that. You I'll give you is one example. Eric Newcomer, who, like Ben Smith, unclear if that's a real name or not. If that's a I don't want to dox him. Yeah.
Speaker 2:Don't dox him. Don't dox him here. Don't
Speaker 1:dox him. Yeah.
Speaker 11:We don't dox here. Eric Newcomer, who is a friend of mine, is a guy. But on his podcast, he did say or certainly imply that it was one rumor that our crypto fund has made a lot of its money betting on speculative things and then selling off. And that couldn't be further from the truth. Yeah.
Speaker 11:You know, we we are not a meme coin fund. We we don't we we hold most positions. And so that's
Speaker 1:straight up. There was at least, like, one good company in that fund. Right? Like, am I thinking about Coinbase maybe? Yeah.
Speaker 1:Like like, the biggest potential one. Yeah. The Chris Dixon got into it, like, the seed in the series a and series b and series z, and, like, basically every single round. Yeah. That that turned out okay.
Speaker 11:Industry. Yeah. That's that's an example of disinfo. There's a lot of disin out there. And so we we debate how much we should weigh in.
Speaker 11:Of course, me coming in, I'm like, no. Let's let's correct the record a little bit. Let's so that that's one on the on the highest level how the firm operates. Sure. In terms of where things are going, you know, I'm excited that you'll have both Martine and Anj today because in AI, we have a big and David George, we have a big debate internally around defensibility.
Speaker 11:And is it gonna look like, you know, previous platforms where if it's not state, that's the moat because they can be exported. It's it's context. Context is the moat in that you you chat with chat with ChatGPT, and it gets to know you better, and and that's what's going to keep you. Or is it is it brand? Is it is it are these things just moving so fast?
Speaker 11:You know, we we hear all the time about people who are building cursor for x that that brand is what keeps people going even if if if if it's not context or or they just not not as defensible as previous players. But, you know, the numbers don't lie, and the the user growth and the and the revenue growth is astronomical. And as aggressive as we have been, we talk internally, like, we should be being more aggressive. We should have been more aggressive. There's winners in every category, and it doesn't seem like they have dominant market share.
Speaker 11:That that's a mistake that we've made historically is, like, thinking, oh, you know, OpenAI won this, so know, there's not gonna be another, you know, big big big provider in on either the model layer or or or the apps. And so it seems like the market is expanding where where OpenAI continue continues to to do phenomenally well. And, also, there's winners across the stack and room for more. So
Speaker 2:How has your mindset shifted being at a platform, multistage fund now where you know, historically, if you're investing, maybe you could do personal checks across different, you know, stages, but ultimately, you're very early stage focus. Is it is it has it been enjoyable being at at a, you know, such a scaled fund where you can realize like, oh, I didn't get into the series a of that company, but I wanna meet the founder now. So and and really get to know them so we have an opportunity to be in the b or the c or the d. Right? Like, there's there's really no no sort of cap on on when you guys can get involved and partner with the company.
Speaker 2:And that's a totally different mindset of of a lot of being able to think like truly long term.
Speaker 11:Yeah. And it's a bit of both, Greg. Because on the angel side or seed side, it's easier to invest in people who are doing the same thing or YC as in God knows how many competitors. Companies that absolutely hate each other, I'm not gonna mention names, but Yeah. To get sense.
Speaker 11:And bigger multi stage firms just don't have that same luxury. So you you gotta pick and you gotta be right. And also, to to your your point, yeah, you don't hit something in the a, you know you know, we weren't the earliest backer of Andrew, but we're the second biggest backer now because we just caught it at the at at the right time and just backed it all the way afterwards. So even if you don't get in at the c or the a, and I'll spend a lot of time with the growth team, there's big opportunity to to get involved. So that's that's an encouraging sign and just once like, I didn't know what I didn't know.
Speaker 11:It's kind of like I'm I used to live in Detroit, then I moved to San Francisco. And I was like, why do I live in Detroit? And why did I live in Detroit? And it's similarly, like, just being at a at a place like this, I didn't I didn't quite realize what I was missing.
Speaker 1:That's great. Well, let's kick it over to Jen. I know we're running over time already. I'm sure we're gonna be bumping up against stuff all all day long, but thank you so much for hopping on and and kicking it off.
Speaker 11:Kicking it correspondents signing off. Thank you.
Speaker 2:Always great to
Speaker 1:see you, Eric. Good to see you. Yeah. Keep this soundboard going. Jen told us that she wants some soundboard.
Speaker 1:We'll hit it hard. She's the operating partner at Andreessen Horowitz and is responsible for fundraising. LP Day is obviously a huge day for her, So we will bring her in in a second. We'll ask her what's on the minds of the LPs today and whether or not America is back. Welcome to the stream, Jen.
Speaker 1:How are
Speaker 6:you doing?
Speaker 13:Jen, great
Speaker 1:to you.
Speaker 13:Good to see you all.
Speaker 2:There was a world where we didn't talk and I just hit the size card
Speaker 1:The entire time.
Speaker 2:And over and over over and over, and it's just a ten minute segment of just us
Speaker 1:Yeah. Why don't you kick us off with how much money you've raised for Andreessen so we can just get Jordy an easy layup here?
Speaker 13:Alright. Let's do it. By the way, for the audience, I told Jordy ahead of time, my sole intention is to have all the sound effects
Speaker 2:pop off the entire time I'm talking here.
Speaker 1:Let's give the national ball sound effects. Yeah.
Speaker 2:There you go.
Speaker 1:Welcome to the stream, champ. Welcome to the stream. Let's go. By
Speaker 13:the way by the way, as KB said a few weeks ago, first time caller, longtime listener. But before we get into the content, I have to say, I have to do just a quick plug for your true early fans. You know, I know you had to do the gift guide for the Super Bowl of pronatalism. Right?
Speaker 1:Yes. Yes.
Speaker 13:You had cover tariffs, you had to cover drug pricing, there's a lot happening. But before we get to the real topics, it's been a while since you've talked about Amman property rankings.
Speaker 2:Yes. It has. It has. We're out back. We're out with us.
Speaker 2:600. Why don't we do why don't you join us for the updated power ranking of Levant properties?
Speaker 13:Hey. Is what
Speaker 1:really this is the news that moves Silicon Valley for sure.
Speaker 2:Yeah. Yeah. We can get kind of like a goat debate going. Yeah. Anyway, by the way, I've
Speaker 13:got it. So I've raised over 43,000,000,000 in capital over the course of my career. Most of that was at
Speaker 1:his Alright. Congratulations.
Speaker 13:But I I spend all my time across all the funds. Across crypto summers, tech winters, everything in between. I'm the professional yapper to the capital behind the capital. So the LPs. So that's where I spend all my time.
Speaker 2:What's it like having everybody or not everybody, but but many people under the same roof? I'm surprised you have even ten minutes to get away today. You're probably one of the more popular people in the room. Well,
Speaker 13:it's definitely the quiet before the storm right now. So things are kicking off here shortly, but it's Okay. It's awesome. It is there's a lot obviously happening in the world today, and also our LPs are are busy people. Last week was milking.
Speaker 13:This week was the Saudi conference. Yeah. There's a lot on everyone's minds. We could talk about what's happening with the endowments. Yep.
Speaker 13:And, you know, people are are looking for some optimism. We're probably the bright spot in their portfolio right now. And so as a part of that, it's exciting to gather everyone here.
Speaker 1:Yeah. There's a lot of, like, hot take and micro themes around, oh, if there's a if if Harvard goes for profit or something, that's gonna flood a huge amount of endowment money out of venture capital or Yale's gonna sell their stakes or something like that. But can you talk about some of the more macro themes if we zoom out the last ten years or more? How have trends changed in the LP base of venture capital more broadly?
Speaker 13:Yeah. Well, the asset class has definitely gotten, obviously a lot more sophisticated. Right? It used to be a small cottage industry, and the asset class has just grown alongside, of course, the outcomes. And so as a result of that, you know, the sophistication level of not only the venture capitalists, but also the expansion of LPs have commensurately changed as a part of that.
Speaker 13:So you just don't have endowments or foundations or family offices investing. That's expanded to sovereigns now Mhmm. Who have a different type of opportunity cost of capital. And then you have big pensions now actively playing the game as well. So CalPERS, for example, very famously missed out on the last ten, fifteen years of returns, and now they're making up for for lost time as a part of that.
Speaker 13:Wow. And so traditional pools that didn't used to invest into the asset class are now wanting a seat at the table, largely again because increasingly, the percentage of d d GDP that's being taken over by tech has just exploded. I I heard you mention to to Eric, you know, NVIDIA is about to be this monster of a company just jumped up the
Speaker 1:About to be. It's only
Speaker 2:a 60 it's only $60,000,000,000 gap between
Speaker 13:I checked this morning, so get this.
Speaker 1:Yeah.
Speaker 13:So so NVIDIA, Apple, and Microsoft independently are bigger than the entire stock market of most of the g seven countries. So Germany, UK, France, like, it is wild. It's it's
Speaker 1:actually bigger. Out
Speaker 13:there. Three companies are bigger than all the g seven countries except obviously for The US and Japan.
Speaker 1:Yeah. I mean, speaking of the international stuff A month
Speaker 2:ago, people were buying French bonds.
Speaker 1:So It was a mistake. So it's good to see. Yeah. What what is kind of the trade imbalance, the trade flow in terms of venture capital? I imagine there's a lot of money flowing internationally into American, venture capital firms, but VC funds also invest in, invest abroad and and, internationally.
Speaker 1:Is there is there a trade imbalance there? Is there more money flowing into America than flowing out, or is it kind of fifty fifty? Like, how has that evolved?
Speaker 13:Yeah. So our will only speak for a six and z. So a six and z is still 90% plus in North America. Mhmm. That being said, you know, our portfolio companies, though, spend a lot of time abroad and focus on a lot of distribution as a part of that.
Speaker 13:So I heard your your Saudi correspondent yesterday mentioned that folks in the the defense in Saudi, you know, all of a sudden are like, we want Andoril. We want Cyronic. We want all these early stage technologies. And and guess what? Every country wants to modernize their government.
Speaker 13:They want Silicon Valley tech on speed dial. And so there's a massive interest in all areas, especially in our American dynamism practice for new technologies, and they wanna replatform to the new AI age. And so we actually, at a 16 z, have brought over almost close to 300 plus companies around the world, spending a lot of time in Saudi and also the broader GCC. And particularly yeah. It's it's funny.
Speaker 13:I was watching the the Qatari motorcade welcome Trump earlier today, and, like, they went so hard on on it. But it's it's that kind of classic thing where they're gonna go to test technology Yeah. First and foremost. And so as a part of that, that is the leading driver of wherever trade actually ultimately goes to.
Speaker 1:What is the takeaway from Saudi Arabia and what's going on with KSA and MBS? How are you thinking about Saudi Arabia more broadly these days?
Speaker 13:Yeah. So we we spend a lot of time there, largely again to help our portfolio companies with with expansion. And and, you know, MBS is pretty phenomenal. Everyone's talking yesterday a lot about Trump and and how the vibe has shifted. Right?
Speaker 13:The America's so back. Right? Yeah. And I feel like that deserved a gong. It is.
Speaker 2:America's back. Was caught sleeping.
Speaker 1:Was caught You're sleeping at the wheel.
Speaker 2:You're gonna be
Speaker 1:on top
Speaker 4:of it.
Speaker 2:I got I got more here. I'll I'll stay I'll I'll keep the soundboard up and you just keep going. Good.
Speaker 13:But but MBS is, like, an amazing leader. Right? Everyone's talking about Trump, but but I think the the the other part of this is, in the eight years since Trump's first visit, MBS was basically able to get every tech leader in the world Mhmm. At that conference. Right?
Speaker 1:He's absolutely crushed.
Speaker 13:And and the whole country, by the way, his people love him. They all have if you go to to the country and you see people's cell phones, they have MBS' photo as their their background on their phone. And then if you WhatsApp with people, their profile picture is MBS, which makes it obviously very confusing. But, you know, when was the last time a world leader was as beloved as he has been? And and that's largely again because he's
Speaker 2:That's insane.
Speaker 13:Very conscious of the fact that the future needs to be tech first. He's got 70% of the population 35, and that population is watching Netflix and YouTube. And so he's very conscious of the fact that he needs to modernize his country as a part of that, and he's retooling all the capital away from oil into tech as a part of that.
Speaker 1:Very cool. Well, last question, then we gotta move on.
Speaker 2:Yeah. What what what are people getting you are one of the co creators of a mega fund. What do people get wrong about the the in in this sort of mega fund debate? Because oftentimes the people that are debating have sub 9 figures of AUM. And, you know, I just think it's like unless you're playing The big ones
Speaker 1:scare me.
Speaker 2:The big ones scare them. But but, what what what are people getting wrong about the the mega fund debate today?
Speaker 13:Yeah. It's it's a totally different game. And, obviously, again, I'll only speak for ourselves.
Speaker 1:Yeah.
Speaker 13:What we're playing is is very different than, you know, obviously, seed funds and small emerging makers are playing. So it's very, very difficult to paint the broad paintbrush across every type of venture capital firm. But, you know, I think the the premise of it still holds true. So so I heard Eric mentioned this earlier. You know, Mark pioneered the term software's eating the world.
Speaker 13:And the reality is software didn't just eat it. It DoorDashed it. It devoured it. It asked for seconds. Right?
Speaker 13:And so everyone's obviously now playing catch up as a part of it relative to this massive opportunity. But also more importantly, firms haven't scaled. Most VC firms haven't scaled to reflect that. And so from a capital standpoint, not only have we scaled the capital, but we've also scaled the firm as a part of it. So if you look at every single team at a 16 z, it's actually no bigger than the original incarnation of a 16 z.
Speaker 13:So the deal teams are actually pretty small. They're no bigger than four to six people. So every vertical that you'll talk to today has a deal team focus that is much more oriented around not only that vertical, but also making sure that the fidelity of conversation that you have is super high. Because otherwise, you've scaled the firm, if you have too many people around a table, it ends up being like a Yeah. Presentation.
Speaker 13:Right? And so Totally. When we think about the firm, that's the big part that we focus on. Like, have we actually not only made sure we've scaled the capital to reflect the market opportunity, but also have we also scaled the firm to reflect how we actually wanna run the organization and and making sure we're actually covering each vertical with that domain level expertise.
Speaker 1:That's amazing. Thank you so much.
Speaker 2:I I mean, I my my contribution to the mega fund debate is if you ask a series c or d founder, hey, are you happy that there's, you know, potentially hundreds of millions or billions of dollars available to you to raise in the private markets? Are they gonna be like, no, I'd rather do a small cap IPO and and, you know, be, you know, spend Yeah. Years dragging it out in the in the public markets before. Yeah.
Speaker 1:In my
Speaker 2:So In every financial statement. Yeah. Think that that should end the debate by itself.
Speaker 1:No. No. No. Yeah.
Speaker 2:Jen, it's fantastic having you on. It's great. The crowd loved it too.
Speaker 1:The crowd, wanna say. Good. Thank you.
Speaker 2:Come back come back on again soon. This was great. We'll do the we'll do the Iman power ranking Yeah. We will. Together.
Speaker 2:Awesome. Thank you. Catch you later. Bye. Have a great event.
Speaker 1:Yeah. It's it's funny. Underrated narrative is that they are this mega fund, but I was looking at who invested in Josh Browder's new fund, $30,000,000. It's, like, four Andreessen partners. Right?
Speaker 1:Yeah. Of It's like Mark, Chris, like all the guys. And he raised money from Andreessen for do not pay as well. So there's been this like really Yeah. Like Josh is such an inch.
Speaker 2:Josh is a 16 z round. I think it was a series a. Wasn't it like 4% dilution round?
Speaker 1:Yeah. It was really low. Really low. Fascinating. But they clearly like working with him because they backed him on the fund.
Speaker 2:Yeah. And he's taken such a contrarian approach to building the company. Seven full time employees. Yep.
Speaker 1:Dividends. He was like the first company to be like, I'm profitable. Do you remember He's a master of media. He's always on TV. I'm like, how do you do that?
Speaker 1:Anyway, our next guest
Speaker 2:here. In the family.
Speaker 1:Welcome to the stream. How are you doing?
Speaker 2:Great.
Speaker 1:Looking fantastic.
Speaker 2:Hey, what's happening? What's happening?
Speaker 12:My name is pronounced Anjaney. Friends all call me Anj. You should feel free to as well.
Speaker 1:Anj. Anj. Fantastic. Well, great to meet you. I would love to kick it off with a little bit of overview of what you're investing in today, what you're excited to be presenting at LP Day, and then I have a bunch of questions on open source AI and the specific trends that are going on in in the market right now.
Speaker 12:Sure. I have the fun job of spending the $40,000,000,000 that Jen raises for us in
Speaker 1:a couple of years. Fantastic.
Speaker 12:So I I'm a general partner on our AI infrastructure practice, which is basically all the computing systems that people need and rely on to build great products and services on top. And I basically spend most of my time as a glorified customer support and compute intern for scientists building foundation model companies, training models, all the stuff that happens, you know, at the intersection of of of research and then actually trying to figure out how to get that research out into the real world.
Speaker 1:Okay. So
Speaker 12:I I started at the firm two years ago.
Speaker 1:Oh, cool.
Speaker 12:Almost to the day. And I came to the firm after a couple years as a founder. And then I I I found our company called Ubiquiti six, which we then sold to Discord, and I ran the platform there for a few years during the era where we went from basically being a chat app for gamers to which was about 70,000,000 monthly active users to about 200,000,000 monthly actives basically in six months because
Speaker 1:Wow.
Speaker 12:COVID happened. Yeah. And the the homework assignment was, Anj, go build a developer platform business for us. And it was around that time that I got a call from some friends who were running research at OpenAI who said, hey, we've just trained this model called GPD three, and we think we're onto this thing called scaling laws, where if we can combine compute data and algorithms in the right combination, we just might have a shot at creating God.
Speaker 10:Classic.
Speaker 12:Okay. How much do you
Speaker 5:need to get started?
Speaker 14:They're like
Speaker 2:Sorry. Are are the audience the live audience here got got a little
Speaker 1:excited about excited about that. Yeah. God in your box.
Speaker 12:Well, you know, as of having just gone through the journey as a founder, I was like, okay. How much do think that's gonna cost us? I mean, god god should be pretty pretty cheap in these times where where religion seems to have left the room. And they're like, yeah. It it we think we can get by with 5.
Speaker 12:And I said, okay. 5,000,000 shouldn't be a problem. We can probably scrap that together next week. And this was Daria, who is a longtime friend and now founder and CEO of Anthropic, said, no, Anja. I don't think you realize I meant 500,000,000.
Speaker 12:I said, okay. That's gonna take a little bit longer. So so I I was one of the early angels into Anthropic at the time. That gave me sort of my crash course to scaling laws for neural language models, the idea being that you you could get these these language models to to to predict the next word in a sequence. And if you kept scaling up both the compute the amount of compute you train these things on as well as the dataset, then you'd have no you'd be able to predictably improve the performance of these models.
Speaker 12:I'd call that the pretraining era. What I spent a lot of my time and so for the better part of the last three, four years, I've basically helped teams like Anthropic. I usually get a call from them before there's a company when they're scientists who who've who've who've get who get have this sort of moment where they realize they're they're they're about they've unlocked something repeatable where where you can very predictably improve the performance of these models on some axes. Mhmm. And they usually give me a call, they say, we've we've had the the enlightenment moment.
Speaker 12:We have no idea how to commercialize that and turn that into a business. And so I I've worked with teams like Mistral, which is working on open source models. Last year, I led a our our the the first one into a company called Black Forest Labs, which is the who are the creators of stable diffusion. Right. It's the open source image model family that I I think sort of introduced the world to the idea that open source language and image models can be pretty powerful.
Speaker 12:And so that's that's what I spend most of my days doing, helping folks, you know, get their clusters set up to train models to then build products on top. And I think at this LP day, the the there's sort of two big things I'm getting asked about. The first is, okay, Anj, you know, two years ago, it was all about pretrained models, like the pretraining error, AI scaling laws. What's going on now? Why is everybody talking about post training?
Speaker 12:Right? So that's that's one big question. And then the second is, hey. What what is going on with with sovereigns? Like, why are countries announcing a hundred billion dollars into data centers, And why are they all talking about wanting their own AI champion company, whether that's Mistral in Europe or whether it's Alam in Saudi?
Speaker 12:And so I would say sovereign AI, which is really the idea that you wanna control your own AI. You wanna control what it can and can't do. And the idea that that progress in AI is not coming necessarily from pretraining. It's coming from from post training are the two big themes for for this year for me.
Speaker 1:Yeah. On the on the open source, question, are you are you thinking about Mistral and Black Forest Labs as kind of, like, the Red Hat Linux model where they will be almost like implementers in the enterprise, or is there a real world where you're underwriting against total and complete victory of the open source, of the open source paradigm at the foundation model light layer? And then related to the the international topic you mentioned, like, is Mystrol uniquely, are you uniquely bullish on Mystrol because it's an international company as opposed to an American company because it has this this specific advantage of being in Europe and and that driving extra value for the company?
Speaker 12:Oh, I no. I I think so you're of course, you know, Europe is 400,000,000 consumers. So just mass economy that's that's decided to gear up to build the basically, single largest infrastructure build out I think we've seen in the continent in, like, sixty years. They just passed an $800,000,000,000 defense bill they're calling Rearm Europe. And a huge portion of that is flowing to AI and computing teams, for sure.
Speaker 12:So we can talk about that. But that wasn't when I led the the we Mistral. The series a into Mistral two years ago, $200,000,000 round. Like, Europe was we I did not expect that we'd be in the middle of, like, this massive sovereign AI build out. I mean, the bet was very simple, is that if you look at the history of computing infrastructure, there's basically two frontiers.
Speaker 12:You've got the capabilities frontier, and then you've got the efficiency frontier. So the capabilities frontier is usually dominated by closed source. If you look at databases and storage and networking and so on, usually have a company like Cisco and so on that pioneers some new capability. Or actually, in the case of Linux, like you said, you had Microsoft show up and build Windows, closed source. And that usually opens up the aperture for consumers because consumers are often the first to flock to new use cases.
Speaker 12:The enterprise cares about something slightly different. They care about cheaper, faster, more control.
Speaker 4:And
Speaker 12:that's usually dominated by open source. So two years ago, when I was running the platform Orgut Discord, we got early access to GPT-four. And the OpenAI guys said, hey, we've got this new model. It's going to come out in six months. Can you guys just figure out what it's good for?
Speaker 12:And we ran an experiment. We ran a bunch of tasks through it, and it was extraordinary on a couple of them. And we said, Okay, great. Let's go to production. Well, it turns out, when you're working with sensitive data in our case, this was a social platform, so GDPR, CCPA, all of the compliance stuff, really critical that our data doesn't leave our servers.
Speaker 12:You want control over where the weights are running and what the weights can and can't do. And so we looked around for an open source alternative to GPT-four, and we just couldn't find one. Mhmm. And that's when I realized, okay. For every dollar that that you're seeing in, like, enterprise or large company prototyping or proof of concept revenue, there's, like, 10 more waiting for the open source alternative.
Speaker 12:Right? And, really, there was no alternative until later that summer when Lama showed up.
Speaker 1:Mhmm.
Speaker 12:Right? Lama was the first time there was a comparable open source alternative for to to closed source models. And and, well, the creators of Lama left and started Mistral, so that that made the
Speaker 1:Investment easy. That's great. Can you take me through the deal for, Sesame AI? Obviously, they went viral, but the founder had had a previous Andreessen backed company, I think, in Oculus. How did that come together, and how is the company working?
Speaker 2:Yeah. Even your first interaction with the product blew you away. In many ways, their initial launch in the website, and I think you guys had already completed the investment well before that. But so many people, that moment was truly eye opening for them where it was like, okay, I could imagine this feels like talking to, you know, a friend. You know?
Speaker 2:It it felt it felt really real.
Speaker 1:Yeah.
Speaker 12:Right. Yeah. Sesame is a fun story because we started that company two years ago at a time when like everybody in this space was like, look, the the this this idea that that we're gonna have a new computing interface was completely seen as, like, a crazy crazy idea. I there's there's two parts of of this, asked me. One is the the hardware, and we're building AI glasses over there.
Speaker 12:And the second part is the actual companion, which is the voice interface you guys have probably tried out, the the voice AI. Right? Yeah. And when you put those together, the idea is that it's a it's a system that has so much context about everything you're doing, about your life, that it becomes a primary interface to to to computing. And, I mean, you know, two two years ago, it it it I would say a lot a lot of people had seen and watched, like, Her, the movie.
Speaker 12:Right?
Speaker 2:Yeah.
Speaker 12:But the the the when I'd sit down and I'd describe to people that, hey, what you really need is is this beautiful marriage of hardware and software, and that's what's going to come that's what's going to be the primary interface after smartphones. People would just look at you like you're crazy. And so I was like, okay. The the there's only two people I know who are crazy enough to believe this. One was Brendan, who had been an angel investor in my last company, Ubiquiti's sake.
Speaker 12:Brendan was the CEO of Oculus. Yeah. You know, a few people on Earth who who'd both built a hardware startup and sold it for billions of dollars. I think Oculus sold in total for north of $2,000,000,000 And Ankit, who was co founder and CTO of Ubiquiti six, which was my last company. And Ankit was running the voice, part of the voice AI SDK and infra at Discord.
Speaker 12:You know, about 60% of all Discord voice minutes daily minutes are spent in voice channels.
Speaker 2:Wow. Wow. That's when I
Speaker 12:realized people don't realize it, but for most for many, many, many consumers, voice is actually a much more frequent interaction modality than, like, looking at a screen.
Speaker 1:Yeah.
Speaker 12:And so the idea was if we can combine those two, we might have a shot at building whatever comes next after smartphones. So that that that was the idea. But the the key, like, insight, I guess, or bet, was that it has to feel realistic. You're not like, Siri just doesn't work. Like, you you just know about completely when you try to talk to Siri, you're like, okay.
Speaker 12:I'm talking to a robot. Yeah. But instead, if we could get the companion the the to to cross the uncanny valley, if we could get you to think about talking to Sesame and, know, we have two companions right now. One is Maya. The other is Miles.
Speaker 12:If we could get get you to think about using and talking to Maya and Miles as companions, not as robots, then that's when you'd really start using it in your daily life as an interface constantly to all the apps and services you use. Does that make sense?
Speaker 1:Yeah. Totally.
Speaker 2:How do you in the context of Sesame, what's been the thinking? Because, obviously, sounds like you've been on the board since day one or or, you know, I don't know the exact mechanics. But how how has the company thought and and how do you think broadly across the portfolio around this balance balance between, you know, being heads down building and needing to capture the attention of, you know, the tech community, the broader, you know, potential user base. Because I feel like it's this interesting dynamic right now where there's so much to build. Like, in some ways, companies should just be heads down and almost be silent, right?
Speaker 2:And and this is like the SSI approach is to basically say like, we're not, you know, maybe gonna release anything that that we that we consider less than, you know, a really significant evolution. Yeah. And but Sesame kind of like popped its head up and said, hey, look at us. Look look what we're doing. But then now it seems like, you know, it's taking more of the approach of, you know, being willing to fly under the radar for, you know, call it the next who who knows how many months?
Speaker 12:I'm I'm happy to report that it it doesn't get any easier the more money you raise. I found, like, the the on day one, we we didn't we hadn't raised any money. Right? So we we're just three guys sitting in a room and talking about ideas. And this I I I would say the heuristic for most people who come from the software era is like, hey.
Speaker 12:Ship fast. Ship early. Ship something you're embarrassed about. Right, and then iterate. And AI is a little bit different.
Speaker 12:Frontier AI is a little bit different because you often need a critical you you you need to have a a capability threshold that is sufficiently transformative enough that people would would put up with all the tons and tons of, like, friction that there still is to use AI today. Right? So you guys may have noticed. But when you go to the Sesame site and interact with the demo, right, it's quite fast today. It it one of the things we really the team, like, spent a ton of time honing was the latency of voice responses.
Speaker 12:We had to make it feel like it was sub 200, it felt like you're having a conversation. Right? Two years ago, it wasn't there. It was it was excruciatingly slow. And we knew that nobody it it it people would miss the underlying personality of the model if we hadn't solved the system's problem of latency.
Speaker 12:And I I find it comes down to this really delicate bal the the the the overarching problem of, like, hey. When do we ship? When do we actually put this out in the world versus being heads down? Comes down to this constant tussle between taste, which is who at the company has such a strong opinion that the product experience is good enough and the and the and the ruthless sort of machine learning approach of running evals. Right?
Speaker 12:The idea that you you build a model, you test it in an in an environment, you benchmark it, and you see how it does on that eval. And if it hasn't improved that evaluation score, you know, you keep going.
Speaker 1:Mhmm.
Speaker 12:And it it it basically you you gotta have, like, the I've lost count of the number of hours we've spent debating that that tension. Right? And it's extremely uncomfortable for traditional software teams to do the the eval driven approach because you the the list of features you can kind of deterministically write out and say, check. Check. Check.
Speaker 12:These are the things we need to ship build. Once you've got the v zero, the MVP, we ship.
Speaker 1:Mhmm.
Speaker 12:That's not how that's not how AI works. Right? AI research and post training is e is eval is evals driven, which is you have an intuition for what you what you need to do to improve the model, but you don't actually know until you run it through the through an an empirical test. And so the answer comes down to how good are your evals. Mhmm.
Speaker 12:And so if I was to boil down what's what works for the best teams, that they have great product taste, but they also have great taste in evals, which is what what is the right evaluation metric to build for your team. And then you you basically stay heads down until until you've you've unlocked both of those. Does that make sense?
Speaker 1:Yeah. Yeah. Fantastic. Well, thank you so much for joining. Good luck with the rest of LP day.
Speaker 2:Come back It's a fantastic on again soon.
Speaker 1:Yeah. Yeah. We'd love to have you back and talk
Speaker 12:about You know where to find me.
Speaker 1:Fantastic. We'll talk soon.
Speaker 2:Bye. Cheers. Cheers.
Speaker 1:Next up, have Martin Casado, general partner. He's on the board of Cursor, World Labs, DBT Labs, Kong, Fivetran, Ideogram, Ambient AI. This guy has a lot of board seats. Brain Trust, CoActive, Netlify. He leads the firm's $1,250,000,000 infrastructure practice and has built quite the AI portfolio.
Speaker 1:So we're excited to have Martin on the show, discuss open source AI, his views there, what's Cursor doing. Welcome to the stream, Martin. So good to have you here. How are you doing? We're good.
Speaker 12:Thank you.
Speaker 1:You gotta welcome some
Speaker 2:The live the live audience.
Speaker 1:The live audience really just they couldn't help
Speaker 2:without it.
Speaker 1:They're out of control. Yeah. Yeah. Anyway, thanks so much. Yeah.
Speaker 1:Yeah. Thank you so much for, for joining us. I'd love to know your take. We'd let's just jump right into it since we're running a little bit behind. Cursor, obviously, it's becoming this front end almost aggregation play.
Speaker 1:It's the front end to AI coding. It's, potentially model agnostic. What does that mean? What have you learned from the Cursor journey around how value accrues across application layer versus foundation model layer?
Speaker 10:Yeah. So, I mean, I think that there's two things, you know, that that led up to this cursor moment. And one of them is one of the first use cases for AI was code. Right? We had like Microsoft Copilot, a lot of people used it.
Speaker 10:But like and so, like, you know, there there's, you know, a bunch of users and their behavior was trained by Microsoft, but the models weren't quite good yet. And in the last, you know, year we had this RL movement. Mhmm. And as a result, the models got way way better. And then of it just happened to have like this kind of magic timing where it, you know, it did something very similar to what the Copilot looked like, but, you know, uses greater models.
Speaker 10:And now that they've kind of caught the wave, they're able to, you know, not only serve these amazing models, but, like, for every magic experience you see the the the users have, they've starting to, like, have their own smaller models. And so it's just, you know, very unique point in time, very unique, position, and then, of course, a very unique technology wave behind it.
Speaker 1:Going back to the foundation model layer, can you talk about how your thinking around open source in the foundation model wars has evolved? I remember you and John Ludig were talking about it last year. Since then, we've had llama four, which kind of fell backwards, but then deep seek was a huge moment. And, we just had a a guest on the show yesterday who was talking about the importance of offering the world open source foundation models that they can build on because if we don't do it, our near peer adversaries might. How has your thinking evolved, if at all, and where are you seeing the most opportunity in the foundation model wars?
Speaker 10:Yeah. So it's not clear to me that the model space is significantly different than, you know, the software space when it comes to open source. So in the software space, we've got, you know, twenty years of history of this. You know, the close solutions tend to aggregate the value first and the quickest. And the reason is is you kind of need to make money to change people's behavior.
Speaker 10:Right? And Yep. You know, this is like, you know, you need to have Unix before you have Linux, and you need to have Oracle before you have MySQL, etcetera. And the same thing seems to me to be playing out in in in this AI space, which is, you know, of course, OpenAI was first, and they've aggregated a ton of value and, you know, Anthropic for Code. And and then, you know, even if you look at the nonlanguage models like, you know, image, you know, mid journey was first, and that's closed in 11 labs.
Speaker 10:And so it seems to me like the first movers will close source, and they'll continue to close source.
Speaker 3:They'll aggregate a lot
Speaker 10:of value. But then for every first mover, there's always the opportunity to enable the masses, right, like everybody else. And there's always a lot of value there. Right? And this is kind of where these open source models come in.
Speaker 10:And what's amazing and everybody should realize is just because DeepSeek is out there hasn't changed the calculus or the growth of these other companies. Right? It's been fully accretive. And so I think the only sin anybody can make in AI from an investor standpoint is zero sum thinking because the reality is is every time something new gets introduced, it's not at the expense of something else. It kind of finds new territory to gain value in.
Speaker 10:And then and open source is no different. So it's a very important part of an ecosystem. It's been part of the software ecosystem for a very long time. It'll continue to be I do think that, you know, US should have open source models, and and I think it's very important for, like, continued US presence in technology in that conversation. Yeah.
Speaker 10:But it feels very healthy to me, both the dynamic with existing closed companies and then, you know, new companies that can be built on on the open source.
Speaker 1:Yeah. Are you a fan of aggregation theory or this idea of, like, the front door to artificial intelligence? Cursor is kind of that for coding, and we're seeing that in other applications that are popping up where the underlying model might not even matter. And my where I'm going with this is that there's one world where, another country wants their own foundation model so they know that the weights are trained in a way that they want aligned with their views on speech, for example. But there's another world where the individual countries should be thinking about how do we create the dominant consumer app that people actually use because even if we have the model, if nobody's using it because they're just opening up a certain URL and they go to another country's model.
Speaker 1:What do you think of there?
Speaker 10:I mean, I think I think the story of AI has been the markets are much larger and they're growing much faster than anybody had expected, and that's just resulted in actual fragmentation. So everybody had these theories early on if you remember. Oh, there'll only be one model. Oh, the models are not defensible. Oh, the apps are just GPT wrappers.
Speaker 10:Oh, like, the apps are gonna take all the value. And you know what? They're all wrong. Like, everybody's been wrong. Like, the only things would have been right are like, you know what?
Speaker 10:These things are massive. I mean, let's just take OpenAI, is one of the most remarkable companies and maybe forever in tech. Right? But, you know, they were the first to image. Remember that with DALL E?
Speaker 1:They lost Yeah.
Speaker 10:Yeah. They were the first to code. And with Copilot, they're the weights. They lost that. They were the first to video.
Speaker 10:And, like, you know, Sora was amazing and remarkable, but, like, they're not the leaders in video. Yeah. And yet, they're still the dominant AI company on language. Right? So what are the takeaways you can take from that?
Speaker 10:Like, in my view, it's you know, every one of these is a massive, massive market that's too big for one company. And so, like, you know, OpenAI has done a great job focusing on ChatGPT. And you could have the same discussion between the model and the app layer. Right? And so I know I mean, you're talking about aggregation theory.
Speaker 10:So there's two views of the world. One view of the world is, like, everything consolidates into one company, and there's another view, which is there's, like, a model per thing that's a behavior. I'm definitely in the second one, and I just you know, even though we're relatively early, we do have four years of experience with this. And the story has just been disaggregation. It really has.
Speaker 1:Yeah. That makes a lot of sense.
Speaker 2:How are you how do you think about revenue quality in the enterprise and an environment when, you know, the Fortune 500 sort of has a mandate to just, you know, buy AI. Some some things they're going to That's a
Speaker 3:great Yeah.
Speaker 10:Yeah. So, okay. So that so there's a the the the there's a lot to this question, and I'll try to be as succinct as possible. So the first most important thing is AI today is mostly a prosumer and consumer movement. So even though the people are working in the enterprise, it's like it's an individual use and individual behavior, and it's not like a big budget buying thing.
Speaker 10:And so the I would say the vast majority of the companies we work with, it's this more kind of bottoms up prosumer thing. And so that's clearly real individual demand. This happens in all super cycles. Like, it was the same thing for the Internet. Right?
Speaker 10:It was the same thing for PCs. It was the same thing for, like, the iPhone, like, true smartphone, like, post BlackBerry. It was, like, individuals. And so, you know, from that standpoint, like, I think we're very, very comfortable. This is real secular movement because it is individuals that are driving the behavior.
Speaker 10:You know, there there's there's there's a second point to all of this, which is, in the early Internet days, you had all sorts of funny accounting because, you know and and it was quite frankly because people just didn't know how to do it. They didn't know that these guys successful. But at the time, people weren't even paying. Right? So, like, they would just kind of say everything.
Speaker 10:And and, of course, in these early super cycles, you have all of that. Like, they don't know the difference between, like, GMV and take rate and, you know, run rate is not a gap thing, and so they kind of had deals. So there's clearly all these funny numbers out there. And, you know, that's just an artifact of massive, massive growth and success. And, like, you know, we'll rationalize it as an industry, but for sure that's going on.
Speaker 10:But it's less about, like, enterprise budget moving, and it's much more about, I've got this consumer phenomenon. I have no idea how to really do the accounting. You know? And so, you know, it just requires, from our standpoint, to, you know, just to kinda go through things and kinda really normalize it.
Speaker 2:Yep. That's great. That makes sense.
Speaker 1:I mean, we could talk for another hour about this. We'd love to have you back on the show. This is fantastic. But thank you so much for even taking the time that you did this.
Speaker 2:Yeah. Wish we had more time. Was great.
Speaker 12:No. Love it.
Speaker 10:Thanks so much. It was a real pleasure.
Speaker 2:Cheers. Have fun. Cheers.
Speaker 1:Bye. Yeah. We didn't even get to Fei Fei Li in World Labs, the deal that he led there.
Speaker 2:I've never heard
Speaker 1:Spatial intelligence
Speaker 12:heard of this.
Speaker 2:Martin, you know, I've seen his post. Yeah. Talk. No. Potentially a hall of fame yapping.
Speaker 1:Yapper. Can we get a sound board for that?
Speaker 2:Hall of fame yapper
Speaker 1:for Boom. Boom. Boom. Okay. See
Speaker 2:you again.
Speaker 1:We got David George, leads the growth fund coming in next. I'm gonna want the Ashton Hall sound effect. I'm gonna want lots of sound effects for this one. We're getting too serious right now. We gotta take it down a notch.
Speaker 1:Everyone thinks, oh, they manage 40,000,000,000. You gotta do this serious. You gotta be on talking points. Go away. News.
Speaker 1:Yeah.
Speaker 2:What's fully executed lease on our new studio.
Speaker 1:Oh, let's hear it for us. Let's hear it for TVPN.
Speaker 2:In the chat.
Speaker 1:Oh, thank you.
Speaker 2:And you know why that's exciting, Josh? Because we're gonna be we're gonna be able to walk
Speaker 9:around the
Speaker 2:know what I'm saying?
Speaker 1:Sitting for four hours.
Speaker 2:Sitting for four hours is
Speaker 1:brutal. Brian Johnson is
Speaker 2:Sitting is sitting
Speaker 1:shaking his fist. Yes. Thank goodness.
Speaker 2:Sitting is is, you know Very bad. Don't they compare it to smoking Yes. Cigarettes in terms of,
Speaker 1:you know, the It's terrible for you. It's terrible for you.
Speaker 2:And we're gonna be walking around
Speaker 1:hitting the biggest gong you've ever seen that we've yet to reveal on the show. We'll be whacking back.
Speaker 14:We're gonna be you're
Speaker 2:gonna be hype mugging me, but I had an idea. We can put a, like, a measuring tape up on the wall so that I can periodically walk over and prove that
Speaker 1:I'm 61 with Yeah. Yeah. Anyway, we got David George in the studio. Welcome to the stream, David. How are doing?
Speaker 1:Well, good to the show. Let's go. How are you doing? We're trying to keep the energy up. It's a big day.
Speaker 2:I love it. Great to see you. Thanks for coming on the show.
Speaker 1:Yeah. Thanks for
Speaker 15:coming on. Love it.
Speaker 1:I would love for you to break down how the growth fund actually works. Andreessen's known for these specialized funds, but then I know that the growth fund cuts across all of them, and you see deals all over the place. Do I have that even roughly correct? How do you think about, supporting the companies in the portfolio that maybe get picked up at the earlier stage?
Speaker 15:Yeah. Absolutely. Well, look. Fun to be on here with you guys. Big, big fan.
Speaker 15:Thanks. Yeah. I mean, you have it right. So we have seven different funds. I think if you talk to some of our early stage folks, they're very domain focused.
Speaker 15:And that means, you know, they know the products. They know the markets. They know the technologies at a very deep level. And then the growth fund, where we sit, is kind of across all of those. So, you know, ideally, way it works is, you know, we can work hand in hand with them and take kind of the best of the best ideas from each of those sectors and then invest stage specific at the growth fund.
Speaker 15:And so what we do, probably half our effort in dollars historically have been follow ons supporting existing portfolio companies. And that's worked great. You know, there's something we talk about all the time, which is game film. And, like, there's no better way to have game film than to, you know, have my partner having done the series a and Databricks. And then, you know, we get to see it all along.
Speaker 15:You know, with that comes access, you know, relationships with the founders. All that stuff helps. But then, you know, the other half of what we do is invest in net new companies that were not, you know, previously investments in a 16 z for whatever reason. And so, we started this in 2019. I had a big list when I joined.
Speaker 15:I'm like, all right, I know the six existing portfolio companies that I want to go try and create a new deal in. And then I knew a bunch of the ones that I wanted to invest in outside the portfolio. And we've been fortunate to have some success. We've invested in outside companies like Roblox and Figma and SpaceX and Waymo. You know?
Speaker 15:And then, you know, obviously, a lot of success, doubling and tripling and quadrupling down, with existing companies.
Speaker 1:Well, it's a great time to tell everyone that TBPN is sponsored by Figma, so thank you for the shout out. This
Speaker 4:is the one good washes
Speaker 1:the other moment. Put some dollars in pocket. Put some dollars in
Speaker 2:our pocket. Didn't you do that deal in, like, April of twenty twenty or got announced back then? That that was a crazy It's great. Moment in history. Congratulations.
Speaker 15:I get out a lot of stories about that one, man. But we so we had been courting. I remember I met Peter Levine when I was, like, right at the tail end of figuring out whether I was gonna join, and and he's like, we need a growth fund. I'm like, okay.
Speaker 2:Like, I
Speaker 15:I was gonna tell you that. And he's like, you know, like, we gotta invest in this company Figma. Like, it's crazy that we're not investors in this thing. Like, it really pisses me off. Alright.
Speaker 15:Well, we can go fix that. And so Awesome. You know, I joined and we courted Dylan for, like, you know, a year, year and a half. And then COVID hits. We all think the world is going to melt.
Speaker 15:We've been trying to convince Dylan to do an investment with us. And like the world's falling apart. And he calls us and he's like, I'll do a deal now. And I'm like, oh god.
Speaker 1:Part of the deal. Dylan Field. Legend. Absolute dog. This is brutal.
Speaker 2:Put you on the spot.
Speaker 15:I know. But it was great. Obviously, we're thrilled to be his partners. That one was funny because we you know like, if you take a traditional growth investing lens and look at a company like Figma at that stage, you know, you could look at a spreadsheet and look at market reports on market size it. And, you know, what what you'd see is like, well, there's not that many designers.
Speaker 15:And sure, the number designers is growing, but how compelling is that gonna be? And, you know, if we didn't have, like, depth of product and technology and market insights, we would have missed, like, the obvious, you know, thing, which is, like, it's not just a design tool. It's a it's a tool for, you know, designers plus front end engineers, and that functionality is all merging together. And the proportion of designers is massively growing relative to relative to engineers. And, you know, there's even gonna be business uses.
Speaker 15:And so Totally. You know, Figma is an awesome one. It's a it's a great example of a company where, you know, traditional lens would probably miss it for what it could be. But, you know, it's sort of a it's one of these things we call, you know, we call them model busters. It's like Sure.
Speaker 15:You do a little spreadsheet model
Speaker 1:Yep.
Speaker 15:And it, like, show these numbers. And it, like, it turns out, like, it's all wrong.
Speaker 2:Like Yeah. The market size is totally wrong,
Speaker 15:and it could just totally exceed it.
Speaker 1:So That's good. That's a great one. Alright. Can you talk about the when it breaks the model busters, the aperture of growth equity deals? Obviously, the traditional growth round is post product market fit.
Speaker 1:Maybe, you know, you're up in the 50,000,000 plus raised range, but we're seeing these crazy deals get done with pre revenue, pre product AI companies raising hundreds of millions of dollars. Are you putting that in the growth bucket, and are you changing the way your team thinks about deals to look at to set yourself up for looking at those bigger but earlier stage deals? Or are you trying to think about how can we fit those into a venture portfolio or venture fund?
Speaker 15:Yeah. Let me just talk to you about, like, the buckets of stuff we do. Please. And so, you know, there's a big bucket of stuff that we do, which is, you know, traditional high flying growth equity companies. And so a bunch of the companies that I listed would fit that.
Speaker 15:You know, Databricks, Roblox. Roblox.
Speaker 1:And those are like mature businesses. Like, have you can do a DCF on them. You can do multiple. Exactly. You can do real, real work.
Speaker 1:But yeah.
Speaker 15:Yeah. So that's one bucket. And I'll talk more about those.
Speaker 1:But
Speaker 15:I would say my observation from, you know, doing growth investing for the last fifteen years or so is, you know, there's a bunch of instances of those that, like, end up being way bigger and better businesses than anybody would have thought. Yeah. And that shouldn't be surprising because if you just look at, like, the composition of the biggest and most important companies in the world, they're all tech companies. And, you know, they you know, their their their market caps have sort of extended beyond anyone's, you know, idea of what they could be, both because they exceeded market size estimates and also they came up with new products. And so there's both flavors of those when when we talk about model busters.
Speaker 15:But that's one class of things that we're we're doing. In the AI in the AI world, there's another class of things that we're doing, which is just like, it slaps you in the face that it's working. Like Yeah. These are the fastest growing companies that we've ever seen. Like, we're investors in a bunch of the fastest growing companies of the previous generation, like Wiz and Slack and Deal.
Speaker 15:And if you put them on a chart with companies like, you know, Cursor or eleven Labs or x AI, like, they get to that hundred million stage way, way, way faster than that previous generation of company. So, you know, that's a that's a bucket. And, you know, there's there's not, like, hundreds of those yet, but I think there will be hundreds of those as the AI applications come because the groundwork's being laid for that. Then you asked about the earlier stage companies that raise a lot of dough. Yeah.
Speaker 15:We do do those. But, you know, we keep an extraordinarily high bar. So, you know, we're investors in, you know, companies like SSI Sure. That are working on, you know, really exciting new things with the best talent in the world. You know, that was part of our thesis in investing in character AI is backing Noam Shazir.
Speaker 15:And and you kind of squint and say, okay. You know, this is a person that we can back, and we know that, you know, he's gonna create something special.
Speaker 1:So those are transformative. So it's pretty He's on the
Speaker 2:but you can really go risk on.
Speaker 1:Yeah.
Speaker 2:I have a question for you around modeling market sizing in this AI era. Everybody likes to say there's an opportunity for software to not just to basically get paid for end work. So instead of creating, let's say software for accountants, can create software that does accounting services. Right? And the TAM expansion there of, you know, these end markets for, you know, that that look more maybe more like payroll spend or services spend.
Speaker 2:It starts to get really exciting because they go from, you know, hey, this is a hundred billion dollar market to this is, you know, could something could be a, you know, multi trillion dollar market around labor. My the question that I've been personally kind of wrestling with is, if you if software solutions are delivering services, maybe there's a short period where you can capture a huge amount of that spend. But over time, those opportunities, there will be other software providers that are competing to do that services work. And won't that have like some type of deflationary effect and overall maybe not maybe markets aren't getting smaller, but maybe prices can't stay as high as they are in a in a sort of human led, you know Yeah. Service market.
Speaker 2:So what are your high level how are you thinking about market sizing given and I don't expect you to have a perfect answer here because, again, a lot of these companies are model breakers, as you described.
Speaker 15:The model model busters, man. The busters. Busters. So so, yeah, I love this topic because it's the it's the, like, it's the fun one that everyone is debating right now is like, well, we can go capture labor. And without a super deeply developed and astute strategy, that's just not going to happen.
Speaker 15:And so if you look at some of the biggest technology breakthroughs of all time, the way that those get priced isn't the replacement of what they are delivering. Competitive forces come in and actually, like, there's return on capital. There's like different competitive positioning. And often that gets competed away. So my rule of thumb is when you have these major technology waves, just assume that 90% plus of the surplus is gonna be on the consumer or customer side.
Speaker 15:And that's great because you can still like, if they work, when they work, you can still create incredible businesses out of it. So if you take the previous wave of technology change, what would you or I or probably any average American person pay for an iPhone? Like, a lot more than $1,000.10
Speaker 1:ks?
Speaker 15:Probably. Like a lot
Speaker 2:more than $1,000 hundred ks. So 100 ks.
Speaker 15:You know, like, we've captured, like, 90% of the surplus. It still turns out Apple has an amazing business on the back of it.
Speaker 2:Yeah. Interesting.
Speaker 15:So, you know, technology can be kind of magical in that way. In the previous cycle, if you just take iPhone and cloud computing, those things together created like 10,000,000,000,000 of new market cap across internet, software, mega cap tech. Now a lot of that got captured by the large tech companies, but a ton of it went to new companies as well. And so my simple framework for AI right now is the more disruptive the technology itself actually is and the more potentially disruptive the business model, the more that favors the startup Mhmm. And the less that that favors the incumbent.
Speaker 15:So, like, what was the mobile version of salesforce.com?
Speaker 1:Salesforce Com. Com. Yeah.
Speaker 15:But if salesforce.com, if that technology wave, instead of being just, hey. Access Salesforce on your mobile device, if instead it was like, hey. We have completely new workflow. Yep. We have a completely new interface, a completely new database.
Speaker 15:Yeah. And, oh, by the way, a totally different business model,
Speaker 1:maybe you'd have a startup positioned. Yeah. That makes sense. We're talking to David Ilovich next. How has, how does growth underwriting work in defense tech or hard tech or American dynamism?
Speaker 1:I imagine it's different because there's more debt. There's more CapEx. It's a slightly different business, not zero marginal cost necessarily. How are you thinking about underwriting the next the hard tech boom?
Speaker 15:I I this is a great question and one that we sit around and talk about all the time. So, our lives are a lot easier because we have an amazing early stage American dynamism practice. And so we see a lot of things. We're on the cutting edge of the trends. We we have the right networks.
Speaker 15:My simple rule on that is you can create venture scale amazing outcomes that are even better than the software only businesses, but they're probably gonna be fewer and further between. Like, they're very, very hard to pull off. So, you know, we saw this at, you know, not quite the degree of difficulty as others, but but still quite a hard one at Samsara, which is one of our portfolio companies, which was one of the first companies that was sort of a modern hardware plus software public company. And they've demonstrated that they can create an incredible business out of it. Right now, the four that I always go to that I talk about that are the sort of champions that I always reference are Andruil, SpaceX, Flock Safety, and Waymo.
Speaker 15:These are four of our biggest portfolio companies that we've, you know, led a bunch of rounds in and and in in some cases are some of the largest shareholders. In the case of Andruil, you know, it's a model buster because they have made multiple products work, and they now have trust. And that's a even more defensible position than a software company could ever be in. So there's 700,000,000,000 of defense market cap for them to go get, And I think they'll go get a lot of it. They might create new market cap too.
Speaker 15:SpaceX has one of the best competitive positions of any company of all time. I mean, it's like the British East India Company of Space. It's incredible. They have
Speaker 8:yeah. I love it.
Speaker 15:They have, like, 1EX relative market share. Like, that doesn't happen anywhere. And then, you know, Flock is doing some crazy stuff. I always say it has the craziest ROI of any company we invest in because it's like we stop kidnappings. You know, recovered lost kids.
Speaker 1:Yeah. It's
Speaker 15:crazy. You know, they solve, like, greater than 10% of all crime in The United States today. That's just incredible. And then, you know, Waymo is the last one, which is, you know, super exciting. Obviously, there's a tremendous amount of r and d and invested capital and difficulty in building that company, but it's a magical experience.
Speaker 15:Like, I I took my family from Kentucky in Waymo's this weekend, and they were like, oh my god. For they were very nervous. And then they were like, okay. This is a better driver than you. And so That's awesome.
Speaker 15:That's it it's super exciting. It's growing really fast. But, yeah, the simple thing for me is, like, they can be better businesses, but they're much harder to pull off.
Speaker 1:Yeah. That makes sense. Well, thank you so much for joining us. We're gonna kick it
Speaker 2:over to the was amazing.
Speaker 1:This was great. Really enjoyed back and talk more.
Speaker 15:Thanks, guys.
Speaker 2:See you. Bye. Cheers. I don't is there anybody that deploys more capital than
Speaker 1:He's up there. He's on the He's in the conversation.
Speaker 2:It's funny. His his his list of investments
Speaker 1:Yeah.
Speaker 2:I thought they were ranked in order of significance, but they're just alphabetical order.
Speaker 1:Oh, really?
Speaker 2:And in many ways, they just get more. So it's like, it starts basically at Andrew Roll and ends at at Six and
Speaker 1:a I. Oh, x and x a I. Yeah. Big, big checks. Well, we're excited to talk to David Ulovich, general partner at Andreessen on the American dynamism team.
Speaker 1:We need an American. We need this is pretty American.
Speaker 2:This feels pretty American.
Speaker 1:We need I'm proud to be an American or free bird or something on the soundboard. Anyway, wake welcome to the stream.
Speaker 2:David, welcome.
Speaker 1:Good to have you here. Hey.
Speaker 9:How are you?
Speaker 1:We're great. I'd love to talk just jump right into it about, army modernization. We talked to general George. We had, Driscoll on as well. How optimistic are you for early stage startups?
Speaker 1:We know it's working at the growth stage, but is this is this time really different? We've been beating the drum of American dynamism for a couple years. There's a lot of startups now. Is there something changing in the army right now?
Speaker 9:Yeah. I I think there is something changing and it has to change. And you hear the enthusiasm from General George, General Fenton Yeah. Secretary Driscoll. And you hear it from everyone else you talk to who's just, you know, not just the people that you haven't spoken with, but the people that are walking up and down the halls and the people that are working in the DoD that they know for a variety of reasons, both from a we don't have the tools we need, we're not procuring things fast enough, we're not manufacturing things fast enough to support the defense industrial base, We are treating our systems that we thought were not attributable
Speaker 12:as quickly as
Speaker 9:we would. So there's a whole bunch of reasons. So I think people recognize there's a need for change. I think the question is, will this be the moment for change? And if you look at the change that's happening elsewhere in Washington and throughout the government, I think you have no reason other than to be optimistic that this is gonna be one of those moments.
Speaker 9:And, you know, there's gonna be a lot of pushback from the primes and from people that have, you know, sort of had a had a delicious steak lunch every day for the last twenty five, thirty years. But, like, this is the mo For the early stage startups, I I think I think you know, we we can talk about the early stage startups, but I do think it's a moment of change.
Speaker 1:Yeah. I mean, on American dynamism, national interest investing broadly, is there a structural reason why venture capital has led here? Because you could have seen this boom play out like biotech where companies go public much earlier. You could have seen a private equity boom where old, subprimes or primes get turned around, taken private, LBO'd, and and and revitalized. And reindustrialization really could have happened that way, but it doesn't feel like it is.
Speaker 1:Do I just have a narrow aperture on venture because I'm in this world, or is there something structural going on?
Speaker 9:Yeah. Yes to both. I think it has to be venture capital Yeah. First because we're in a technology transformation moment. Right?
Speaker 9:Whether it's being able to use AI from, computer vision standpoints and just rapid changes that only startups can really, embrace and and react to and take advantage of quickly, or just the fact that they can attract the best talent. You know, like, private equity firms really manage to the to the bottom line, so they're not gonna pay top dollar for the 10 x engineer the way a venture capital, or venture capital backed startup would. Mhmm. So there's a bunch of reasons why it has to be a venture backed company. Now that said, I think you're gonna see the private equity world quickly follow.
Speaker 1:Mhmm.
Speaker 9:All these small, sub primes and people that contribute to the manufacturing base are gonna not be able to keep up with the demand, and I think you're gonna end up getting rolled up. You're gonna see people doing even venture backed startups that sort of have a private equity sort of lens like what Jay Malik is doing. You're gonna see these things, start to come about where the private equity model is gonna gonna make sense. Yep. But even those things might be venture backed just like you see Jay doing with Amka.
Speaker 1:Yeah. A lot of people think defense when they think American dynamism, but, obviously, the aperture is much broader. Can you talk about the interesting fringe of the of the the circle of competence that for what you can put in the American dynamism bucket as it's grown? I've seen some energy deals. There's hardware.
Speaker 1:There's all sorts of stuff. But, what excites you in this kind of, like, next era of American dynamism?
Speaker 9:Yeah. Look. We we're gonna invest in anything that we, as we say, supports the national interest. Mhmm. So that defense is a big part of that.
Speaker 9:Mhmm. Public safety is another huge area people don't think about. I think that, I I think on the venture side, I'm probably the largest public safety investor in the country, if if not the world. Energy, you know, we have this insatiable thirst for energy. So whether it's on energy generation or energy transmission or energy storage, those are all huge opportunities.
Speaker 9:You know, the battery ecosystem that we live in today is entirely dependent on China. That might be at risk down the road, so we need to have an energy storage infrastructure in this country that's not dependent on China. That creates a whole bunch of supply chain opportunities. So everything from mining to reprocessing and production of minerals and turning those things into batteries is really important. So there's so the aperture is wide, and then I would include everything from transportation, logistics, education.
Speaker 9:You know, the the the tent is big. Uh,brella welcomes anybody that wants to build for American dynamism, but the investments tend to focus on, defense, energy, space, public safety, those things.
Speaker 1:On on energy, I know you're in Radian. I'm a huge fan of Doug. What he's building is fantastic. And, but it is small modular reactors. I think one megawatt reactors designed to replace an a traditional diesel generator.
Speaker 1:I'm I'm kind of cautiously optimistic that we're gonna see someone figure out how to just copy paste Diablo Canyon all over the country, but it feels like that might need some sort of, change on the regulatory side. Are you optimistic about that being the catalyst, and will that happen? Or do we just need an entrepreneur who says, you know what? I don't care about the red tape. I'm gonna go figure it out.
Speaker 1:I'm gonna go copy paste Diablo Canyon forty five times, or is that not even the right strategy?
Speaker 9:So, look, we we we are all all all three of us on this Yeah. On this pod right now have survived the greatest nuclear disaster, in modern history, which is that after the Vogtle three and after Vogtle four reactors came online, we didn't just go build Vogtle five, six, seven, eight, nine, take all the workers who knew how to do it, all the supply chain pieces of of the cement makers and the steel manufacturers who knew how to make all the components and pieces, that we didn't just take them and and stamp them out across the country. Like, that was the biggest miss in our in our lifetimes, frankly, and it's very depressing. Now that said, from a from a startup standpoint, it's Radiant, and you are correct, it's one megawatt. Mhmm.
Speaker 9:I think there's only two ways to win in nuclear. You have to do it at one megawatt or the, like, thousand, the gigawatt scale. And there's a bunch of reasons why I think Radiant will work and why the gigawatt scale can work. And one change on the regulatory front that I think people don't appreciate yes, we need reform in the NRC. And we need the regulators to be much more productive and positive to approving new reactors and making the fuel supply chain more readily available.
Speaker 9:But one of the things that's held up new reactor designs for so long is that when you make a change to your application or you make a change to your design, you then have to go through this hugely laborious process of figuring out all the different statutes and regulations that your change impacts. And there's an entire army of consultants that get paid tens of millions of dollars a year to just help navigate all of the requirements for nuclear regulatory process or fuel, how to transport fuel, all these things. With AI, you now have the ability to parse through all these regulations so that when you make a change, you can say, hey, language model, tell me, are the of the 100,000 pages of regulatory paperwork, what are the things that I need to go update in my application that are affected? So things that might have taken three months and $10,000,000 of consultants work now maybe just takes a few minutes of asking the GPT, hey, how do I update my application based on these changes? And that applies to the regulator as well.
Speaker 9:The regulator can now go through the applications If they're using a language model or GPT that's tuned for the regulatory code around whether it's fuel or a reactor or transport, they can actually say, hey, look, how do I evaluate this application? What are the things I need to watch out for? And the entire process for nuclear regulatory approval should really be condensed dramatically. And that was never possible before the AI boom. So people don't always realize, while we need nuclear power to capture the AI opportunity, we're also going to use AI to, I think, enable the nuclear opportunity in future.
Speaker 1:That's very cool. Truly, do you have anything?
Speaker 2:Yeah. Question? My main question is, you know, I'm I'm sort of sure this is something that you guys talk about internally. But, you know, you have these categories. Right?
Speaker 2:And let's call it defense, public public safety. What what's your kind of internal internal dialogue around making net new investments in something like public safety when in many ways, I imagine flock safety is like flock safety is the flock safety of x y z. Right? Yeah. Know, like people, I'm sure, come to you with with pitches and and oftentimes for things that are just inevitably on the flock safety road map, you know.
Speaker 2:Sure. Sure. And it's why not just put another, you know, billion dollars into into them is kind of a calculus that I'm sure you guys run.
Speaker 9:This is like the end roll of whatever is gonna be end roll. Yeah. Look. Sometimes that's true, and we just try to put more money into Anderol. We've tried to just put more money into Flux Safety.
Speaker 9:We've done that many times. I think that as we get smarter and learn more about these markets, we recognize that the surface area is just much, much more expansive than we realize. So take, for instance, nine one one services. Well, FluxSafety doesn't do anything with nine one one services. Being a nine one one operator is a thankless job.
Speaker 9:It's an exhausting job. The turnover rate's very high. And that entire world needs to be totally reimagined with AI where you have AI operators answering the calls, triaging the calls so that the operators can deal with calls more efficiently. First responders can have more information at their fingertips. Flock safety is not going to do that.
Speaker 9:Another example, you read constantly about what's happening at Newark Airport with the FAA air traffic control system breakdown. Obviously, a venture backed startup can do a much better job than whatever we've had for the last thirty years trying to make the air traffic controllers better equipped with really dated radar systems, not getting the information they need about what's happening down on the ground at the airports. And so that's just an obvious opportunity. Well, neither ANDRWELL nor Fox Safety is going to do that. So we just think these surface areas get bigger and bigger the more we look, especially the ones that have not been disrupted by modern software.
Speaker 1:Totally. Yeah. That makes sense. Makes sense. I last question on on space investing.
Speaker 1:There's a lot of startups that are predicated on declining launch costs. Are you seeing the trend in launch cost pricing and dollar per kilogram to orbit on trend or ahead of trend or or are we lagging there?
Speaker 9:You you would have to ask my partner, Katherine. I'm not the space expert. I have to confess. But I think that the cost is going down. And Yeah.
Speaker 9:You know, we're seeing companies that are now in sort of that that next echelon of what happens now that launch is achievable.
Speaker 1:Sure.
Speaker 9:What about when when we really expand and and be able to return things to Earth, you know, reliably and quickly? Vargas made a lot of progress there. So when when that really unlocks, like, then what what what companies come next, I think, is a question to to ask and that we're asking.
Speaker 1:Yeah. Well, she's been on the show. We didn't get to answer we didn't get to ask her that, but we'll have to ask her the next time that she's on. But thank you so much for taking the time to chat with us. This was really great.
Speaker 2:Yeah. Great to finally have you on.
Speaker 1:And enjoy the rest of LP day. We'll talk you soon. Cheers. Thanks. Yes.
Speaker 1:Thank you.
Speaker 2:We really appreciate round of applause.
Speaker 1:Applause. Fantastic. Next up, Anish, who I think you're buddies with. You've chat you've chatted with a few times. I'm excited for this conversation.
Speaker 1:You can
Speaker 2:More than
Speaker 12:a few times.
Speaker 2:Dear friend. Okay. Okay. Yes. Yeah.
Speaker 2:Yes. Your boys. My boy.
Speaker 1:Your boy.
Speaker 2:I'm excited to chat with him. Yeah. It's Long overdue to come on the show.
Speaker 1:Yeah. Yeah. Yeah. We we've been trying to make it happen for a while. Glad we could make it happen today even if it's just for fifteen minutes.
Speaker 1:But we'll bring him in. What are you interested in, talking through? What are the interesting, angles to take with him today?
Speaker 2:He's focused on the application layer. Okay. So a lot of the if you see Consumer
Speaker 1:enterprise, is there a delineation there? Both?
Speaker 2:Both, but leaning consumer. Sure. So, I just wanna get into the app layer, what he's seeing, how he's, you know, he's a extremely busy guy and I and I've seen his process.
Speaker 1:Oh, he's in Ark Boats. Have you seen it? The Electric
Speaker 2:Boat Yeah.
Speaker 13:And that
Speaker 2:was like a super
Speaker 4:That's cool.
Speaker 2:That was a super super random Yeah. Deal that Yeah.
Speaker 1:It doesn't doesn't I mean, he says AI apps investing in an electric boat company. But I've met the founders. Very, cool company. Anyway, welcome to the streaming niche. How you doing?
Speaker 1:Hey.
Speaker 2:What's up, guys? How you doing? There we go. What's going Why
Speaker 14:are we not in person? I wanna see the size gun.
Speaker 2:I know. Gonna call.
Speaker 1:We're gonna
Speaker 2:come sleep. We we just we just signed a lease today actually for a new space. So next time you're in LA, we'll have to we'll have to have you over. And we do have a comically large gong that has not been shown. But it's about it's about the size.
Speaker 2:It's it's at least I think like seven feet tall. So you can look forward to hitting that in person. Really, it's like this too, man. We used to get
Speaker 14:to hang out all the time and now we gotta do this.
Speaker 2:I know. I know. I know. We both we both got busy but it's great to see you. Thanks for making time today.
Speaker 2:There's so much so much to talk about. I was telling John, before, before you joined a little bit of, your background, but why don't why don't you introduce yourself, and maybe give a quick overview on on your focus at the firm?
Speaker 14:Yeah. Yeah. For sure. It's great to see you, Jordy. So I'm focused on AI apps.
Speaker 14:I lead our consumer team. So we do a lot in consumer. We do a lot in b to b. I've started two companies. I sold the first to Google, second Credit Karma, which is why I've done a bunch of fintech investing as well.
Speaker 14:And this is great, man. I built my first company in 02/2008, and this is the most excited I've been since 02/2008. Like, everything is working, and people that are more technical are winning. So it's just like a fun time to be building or be around building.
Speaker 2:Did you always have conviction around the app layer? There was a period over the last few years where people were kind of oscillating between, you know, there's no value in the app layer. These are all rappers to back to, you know, just kind of back and forth. I'm guessing you never lost faith.
Speaker 14:I don't know, dude. I think the rapper thing was such a mid thought. You know, like maybe for like two Yeah. Give me a break. Am I allowed to swear on here or not?
Speaker 2:Our kids are watching.
Speaker 1:Yeah. Keep it usually pretty clean, but we're working
Speaker 2:on a bleep back now. But yeah, go go swear
Speaker 1:Go off.
Speaker 2:Swear at the people. Okay. Will Go off. Save it for
Speaker 14:a beer when we hang out in person. But look, if you look at the kind of evolution of that comment in particular, sure, there was a minute when it seemed like you had to either spend a hundred million dollars to train a foundation model or you had to be a, quote, unquote, rapper. But as soon as you started to see fine tuning and then all the things that came after it and then, of course, open source, that stopped being a consideration. So anybody who tells me that there's this like rapper concern hasn't thought deeply enough about it, I think.
Speaker 2:Yeah. I I also think there's an an effect there, which is people that aren't seeing enough real data from companies at the application layer and seeing the growth rate of some of these companies where you're meeting with you're meeting with companies all the time that I'm sure you're that that are growing at at rates that would have shocked you in 2021 that you're even passing on because it's maybe not even best in class now. Right? I don't I don't you know? Yeah.
Speaker 2:So I'm And
Speaker 14:the top decile is not zero to one in 12 months or zero to two in 12. It's like zero to 10 to 15. We've seen 10
Speaker 2:to 80. Like, bananas.
Speaker 1:What is Yeah. Yeah. I mean, talk about open source a little bit. Are you seeing that impact, financials in any way? You know, obviously, tokens can be expensive.
Speaker 1:I've we talked to some early stage founders who are prelaunch, and they're like, I need $500,000 of, like, OpenAI credits to just do the prework that I need to do to make my my my startup work. I haven't heard about that. I mean, we we were in the free AWS credits. So if you go through YC, you get a bunch. People would not burn through those.
Speaker 1:They're burning through tokens. Have you have you seen that as a as a meaningful cost driver at the early stage, and has open source shaped that at all?
Speaker 14:Yeah. There there's actually two things to talk about here. One is it's actually amazing that there are real costs because it forces companies to make money.
Speaker 1:Mhmm.
Speaker 14:So it forces them to charge real prices right away, which forces them to deliver value that substantiates the prices they're charging. Yep. So the business model quality is way better than it was three years ago because ironically, because the underlying software has gotten more expensive. So we're seeing way better, especially in consumer. Jordy, you know this, right?
Speaker 14:Like so much of consumer was this field of dreams investing. We'll build it and someday we'll have ads, whatever that meant. And a lot of times it didn't work. And now, like day zero, people are charging for subscriptions and they're making tons of money. And actually And
Speaker 2:strong willingness to pay because people have had such magical experiences on the consumer side. People will be like, sure. I'll pay $50 a month Yeah. For this. Right?
Speaker 14:Or more. You know? And I this is why the most interesting question right now for builders is what is the thousand dollar a month SKU of your product? Right? It's not can I charge?
Speaker 14:It's what is the, like, insanely expensive thing. And this is why I think for consumers, like, you're gonna have food, you're gonna have rent, and then you're gonna have software. That's what the consumer spend looks like. On the open source question, John, I think we're actually seeing is this routing layer emerge where companies are routing to different models based on capabilities and cost. So in some cases, we need something that an open source model can do or you kind of make the cost benefit trade off, you do that.
Speaker 14:Other times, you might route to Claude because you've got a coding thing that you need to generate or a long form writing. OpenAI's got really good general purpose reasoning models. So the routing layer is actually a very interesting thing, and it only exists because there's so many models and because there's open source. And that's changing the considerations for companies like OpenAI that are now moving up the stack. They bought Windsurf.
Speaker 14:They're doing a bunch of things at the application layer because they're no longer the sole provider of the models.
Speaker 2:How are you thinking about the line between consumer, prosumer, and bottoms up adoption in the enterprise? Because I'm sure you've had this already where you make an investment into what looks like a prosumer tool, and then suddenly you see some Fortune 500 company adopting it in in, you know, different patches. But
Speaker 1:Yeah. It used to be those early stage startups would be like, oh, well, one person from an at Google dot com email signed up, so let me just put Google on my landing page. Now it's like, yeah, they're actually getting meaningful adoption in the enterprise just from the bottoms up perspective. But, yeah, mean, that's What are you seeing?
Speaker 14:I from my mindset, everybody's a consumer. I think the greatest thing that ever happened to consumer software is giving people expense cards at companies.
Speaker 1:Oh, yeah.
Speaker 14:Instead of IT buying something, individuals are buying something. And, of course, you're it's not like you've got this work that's you know, like, work brain and and personal brain. Like, you bring your personal brain to work, you wanna use consumer grade software. And we're seeing products like Kria, KREA. That's one of our best companies.
Speaker 1:Yeah.
Speaker 14:You know, they're like, this this team is, like, cracked. They they, like, live to get every model. They're so technical, and the product has a sort of aesthetic and a sophistication that a regular IT buyer might not understand. But it's getting huge adoption in the enterprise because the people that are in those companies wanna be using the best tools, and this
Speaker 10:is what they look like.
Speaker 1:How do you think about the gap between what's happening in these, like, super agile startups? It's a couple people. They ramp to a hundred million in sales really quickly. They're in the enterprise. They're making a difference, consumer adoption, versus, like, McKinsey is also making, like, billions of dollars selling, like, PowerPoint decks on AI adoption.
Speaker 1:Is there a world where someone closes that gap and builds, like, a McKinsey for as a start up or something? Or is that is that a dynamic that's actually good and maybe McKinsey's underrated in some weird way?
Speaker 14:I don't I mean, I would argue that the main thing McKinsey knows McKinsey knows how to do is sell to the enterprise.
Speaker 1:Sure.
Speaker 14:There is no product there. Their product is deep research
Speaker 1:or worse. Okay.
Speaker 14:Everyone's a McKinsey consultant now.
Speaker 1:Now yeah. Yeah. Yeah. Because any CEO can first question they ask, how should my company be using AI? And then and then they go and sign up for a bunch of stuff.
Speaker 1:A %.
Speaker 2:How are you thinking what what's your timeline around ubiquity of ads in consumer AI? Because we're in this interesting moment where a lot of people are paying for models. Some people are using free version of models. But ads aren't ubiquitous yet, but the the movement from OpenAI, you know Did you see Moe coming in from Instacart?
Speaker 4:She bought some
Speaker 1:big ads business there. My take on it that I was debating with Jordi was that I love the world where every human being, regardless of their economic condition, has access to the smartest possible model. But I'd love to know your take on ads in AI products because it feels like it's coming, but we haven't really seen it yet.
Speaker 14:I mean, I think the the more spiritual question for us is what is the front door to the Internet? You know? And the front door to the Internet has been Google
Speaker 3:Yep.
Speaker 14:So many years. And it's really interesting, actually, because Google is sort of search based and intention based.
Speaker 1:Mhmm.
Speaker 14:And the browse based web that existed in the nineties, we've kind of moved away from. A lot of the browse based behavior is now in Insta and TikTok and these other places.
Speaker 1:Yeah. So we're still
Speaker 14:in the command line era of AI. Like, you know, ChatGPT is a command line product essentially, and I think it's gonna evolve in a really different direction. And and wherever that terminal state of that direction is will define the monetization model. I I'd be surprised if it's ads. Maybe it will be.
Speaker 14:So I don't know that we'll ever see ads in the way that we see them today in the AI ecosystem.
Speaker 1:What about, what's happening with the hyperscalers broadly? Obviously, they're all investing insane amounts of money in CapEx, but they've been, by most reports, lagging on the product side. Is this something where their monopolies are so strong, they're just gonna wait it out and develop the products internally? Is there a wave of M and A coming in AI apps? Are they gonna try and build or buy?
Speaker 1:Or what do you how do you think all this plays out in the big tech world?
Speaker 14:I mean, probably all of the above. You know, number one, I think when you have a new technology, the existing companies do a good job of extending their lead in their existing markets Mhmm. With the new technology. So I think a bunch of that will happen. You know, Microsoft will get better at delivering the word processor they've always delivered, and Google will get better at delivering the search results they've always delivered.
Speaker 14:The real issue for Google is not somebody builds them on search, but that there's a new front door to the Internet. So the new categories are where the upstarts will dominate, and that's where I think we'll see a lot of the m and a activity. But it's probably all of the above. The the one most surprising thing for me, not just for sort of incumbents, but often for incumbents, is just that people aren't using the products. Like, I talked to VCs.
Speaker 14:You should test investors on this. Like, give me the five things that you're actually using every day. And if the answer is chat GPT, come on. You know? So there's such an opportunity to build intuition by actually just using the products, and yet so few people do it.
Speaker 14:It's like this alpha that's hiding in plain sight.
Speaker 1:That's great. Thank you so much for coming on the show. We'll definitely have you back.
Speaker 2:Come back on again soon. It it took us nothing long to do this.
Speaker 14:Sound in person. I wanna ring the gong.
Speaker 1:Oh, yeah. Yep. Well, we have a soundbar now. We'll talk to you soon.
Speaker 2:Alright. To see dude. You so And
Speaker 1:next up, we have Marc Andreessen, the founder of Andreessen Horowitz coming
Speaker 2:Why is nobody talking about Marc Andreessen?
Speaker 1:No one really knows about him. And I I think what we need is just one more Twitter thread breaking his career out.
Speaker 2:This was something that probably made us laugh. It was a top three laugh last month was somebody posted a somebody posted a thread on Twitter Yeah. And said, why is nobody
Speaker 1:The clickbait really, really did a great job there.
Speaker 2:I think that was probably entirely chattybt generated, but Probably. Shouldn't need much of an introduction.
Speaker 1:No. But we're But big day for him, so, we're we're glad to bring him in and, ask him about open source, what he's learning from the .com boom, American dynamism, geopolitics, raising a huge fund. There's so many things to talk about. So excited to have Mark on the show. Excited to go, deep with him on everything Andreessen's up to and the firm that he's built.
Speaker 1:So we will welcome into him into the studio. Welcome.
Speaker 2:How are you doing, Mark?
Speaker 3:Hey, guys. What's happening?
Speaker 2:What's happening?
Speaker 1:It's been a great day. This real quick. Sound effect board. Alright. Thanks so much for joining us.
Speaker 2:And thanks for wearing us Thanks for wearing a suit.
Speaker 1:Yeah. Yeah. Exactly. Yeah. You look Special occasion.
Speaker 2:Yeah. Special occasion.
Speaker 3:Was five years. Yeah. Congratulations on the podcast. I just wanna start out by saying I've I've been watching. It's just it's tremendous.
Speaker 1:Thank you so much. Well,
Speaker 2:you know, I have a funny story. We the the moment that I realized that you were maybe paying a little bit of attention to what we were doing and it gave me some conviction that we were on the right track because we we did a reply guy of the week to this guy Baldo. Yeah. And it was like this inside joke and I was like, holy shit. Mark just followed Baldo.
Speaker 2:Very talented guy, but
Speaker 1:That's great.
Speaker 2:But yeah. So it's it's thank you for, for following along, and it's been awesome talking to your whole team today. Yeah. They're fantastic.
Speaker 1:So let's go through some hot topics. I wanna start with we're in the AI era. You obviously lived through the .com era. There's some comparisons. What have you learned, and what, how is this time different?
Speaker 1:Companies are making more money. Valuations are high. But, how are you thinking about teaching the next generation what they should learn or what they should ignore from the people that might say, this is the .com boom two point o?
Speaker 3:Yeah. So, look, I guess I'd say I think as Mark twenty one said, history doesn't repeat, but it rhymes. And so, you know, I think people looking for, like, a direct compare contrast. Sometimes Sometimes you see people like drawing charts where the stock market's gonna do the same thing or whatever. Like, I don't think that stuff ever quite happens that way.
Speaker 3:But, you know, it does rhyme. And, you know, the the line that John Doerr had in 1995, I remember was that the Internet is a cream that you rub on investors to get them all excited. So
Speaker 1:John Doorsen. That's hilarious. Yes. Yes. No.
Speaker 1:I I have many many John Doorsen. Oh, yeah. Exactly. Good.
Speaker 3:But, you know, so, you know, AI is like that now. You know, look, the AI AI sorry. The Internet went through, you know, went through phases. People actually forget, but there was like, you know, there there were like these even the phases like on the way up from, you know, '95 to February, you know, there were these phases of, like, skepticism and panic. You know, it looked like the whole thing was gonna fall apart in '98.
Speaker 3:And then, you know, in 02/2001, you know, after the dot com crash, you know, it's like, all the big companies just, like, completely wrote the Internet off and they just said, you know, thank God that's over. And then and then the Internet itself just kept growing. Right? And then, know, by 02/2005, it was back to, you know, kinda back, you know, back to back to where it had been before, and we you know, the the rest was was history. And so, you know, they you know, people kinda go people are kinda bipolar on these things.
Speaker 3:They kinda get overly excited. They get overly depressed. I, you know, I just always thought then and I think now the substance matters. You know, the substance substance overwhelmingly overwhelmingly matters. And so, you know, is is is is is the technology great?
Speaker 3:Like, are are the products great? Are people using them? And, you know, AI is, like, off to the races so far. It's just like unprecedented rate of growth of actual use. Yeah.
Speaker 3:Right? And you see that in all the numbers. And then, you know, look, the businesses, I, you know, I just I talked to another conversation yesterday with like, you know, companies that raise seed money. They're already over 10,000,000 ARR with this incredible, you know. It like, it's just and you know, there's like a lot of Like, they're, you know, they're they're all over the place.
Speaker 3:And so, you know, the the the the things that are working, the products are fantastic. You know, the users are getting tremendous value out of them. And and and and and as you know, the base technology is moving really fast. So I I feel really good about it.
Speaker 1:Yeah. I mean, it can move faster because we have the Internet. Like, the these apps can get to hundreds of millions of daily active users because there's hundreds of millions of people. There's billions of people on the Internet. Very interesting.
Speaker 1:Not to linger on the .com stuff too much, but I'd love to know, a little bit of a history lesson around the way the browser wars played out. And are is there anything you can learn from that that applies to the open source versus closed sourced AI debate? You've been very opinionated on that. I'd love to know kind of if is there are there any previous eras of tech that you're mapping to when you think about open source AI?
Speaker 3:Yeah. So, you know, look, you know, lot of the browser wars, know, there was kind of a big com little company kind of big company thing. Sure. You know, think that's repeating itself. And, you know, I think one one of the ways to think about what's happening right now is OpenAI is kind of growing up to become Google.
Speaker 3:And Google's kind of, you know, re reinventing itself to be OpenAI. And so, you know, there's like a similar thing there. And, you know, and then you look, Microsoft and Apple and Google control the operating systems, you know, for for end user devices. And they all have, you know, AI strategies, and Amazon as well. So, you know, a lot a lot of those issues are gonna are gonna come back up.
Speaker 3:You know, two two of these big companies are actually on federal trial right now, you know, in big FTC cases in in, in Washington DC, actually in the same courtroom. And so, you know, many of those issues will repeat or, you know, will be intense. You know, the open source thing in tech has always been the wild card. I think it's always been an incredibly positive wild card. You know, I've always been an enthusiastic supporter of it.
Speaker 3:My original work was all open source. And so, you know, the real thing that happened with open source is in operating systems, you know, basically, Unix won and then and then, know, specifically Linux won, you know, for everything on on on the back end. And I, you know, like, you you know, I remember, like, in the nineteen nineties, there was, like, a furious operating system war, and there were these companies that were making huge amounts of money on server operating systems, you know, companies like Sun and many others. And then, you know, Linux just, like, commoditized that entire thing. Yeah.
Speaker 3:You know, I think it's plausible. You know, we'll see. But it look, it's plausible that open source AI may just be the standard. Like, it it you know, and whether whether that derives out of, know, DeepSeeker, Lama, or, you know, any of the other new things that are coming out, you know, we'll see. But, like, I think that's entirely feasible.
Speaker 3:And, you know, I think that would be obviously, you know, there are companies that would have to adjust to that if it happens. But the other side is if if kind of the world had AI for free, I I think that would be a pretty magical result also.
Speaker 1:Yeah. Totally. I mean, shifting to the geopolitical the geopolitics of all this, is it important not just that there's an open source champion, but that there's an American open source champion or a Western open source LLM?
Speaker 3:Yeah. I I believe so. And I believe so for two reasons. One is just actually cultural reasons Mhmm. Which is just, you know, the the you know, open weights is great, but, like, the open weights, like, they're baked.
Speaker 3:Right? Like, the the the the training is in the weights, and you you can't really undo that. And so and and and so are you being trained by, you know, a company or organization or set of people with American or Western values? Are you being trained, you know, by by by, you know, a company with with Chinese values? And and look, know, there's issues on both sides.
Speaker 3:You know, they they, you know, the American trained models have their have their issues. They have their weirdnesses, you know. But the Chinese trained models, you know, look, they they like score really well. You know, they literally the Chinese benchmarks, they literally have like line items for like Marxism. Right?
Speaker 3:Right? And then, you know, Deepsea, like, is like a hundred out of a hundred on Marxism.
Speaker 1:So It's here for Deepsea. It really knocked me out of the park with that one. Congratulations.
Speaker 3:Yeah. Exactly. It's fantastic. Right? And so, well, I was like, all right.
Speaker 3:So these are gonna be, you know, this is gonna be the technology that's gonna intermediate your the legal system
Speaker 12:Mhmm.
Speaker 3:Right? The courts Yeah. The education system, the medical system. Like, you know, how you know, you want your kid know, you guys have kids, like, do you want your kids to you know, your your kids are gonna be learning from these things their whole lives.
Speaker 1:Exactly.
Speaker 3:And, you know, do do they have, you know, do they fundamentally have Western values? Do they or do they have, you know, sort of, you know, CCP values? Think is really critical. And then the other thing, I would say, just close your eyes and just imagine two states of the world. One is which the entire world runs an American open source LLM and the other is where the entire world, including The US, runs an all Chinese software.
Speaker 3:I, you know, I don't know. For me, that's a, you know, very straightforward. It's a very important topic and a very straightforward answer.
Speaker 1:Yeah. I mean, in in the American dynamism context, is it kind of mission accomplished there, or are there new territories that you're looking to expand into with the broader American dynamism thesis? We talked to DU about energy and whatnot, but what is exciting about you outside of artificial intelligence on the national interest investing side?
Speaker 3:Yeah. So, look, I mean, look, we made tremendous progress. I'm super proud of team. And then, you know, this this in this new political environment, the new administration has embraced it. But also a lot of Democrats are actually quite excited about it also.
Speaker 3:Our our event that we hold has has lots of people from both parties. So I think there's a you know, there's this unified view now, think, in the American at least in the in the political world of like, all right, it's time, you know, it's time
Speaker 2:for The US to step up on a lot of
Speaker 3:these things. It's time for The US to build more. It's time for The US to, you reinvent energy. It's it's time for nuclear. Mhmm.
Speaker 3:You know, it's it's time for, you know, infrastructure, you know, housing, like all these things. And so, you know, I I think there's a lot of momentum. I I think we're at the very beginning of it. You know, like, one of the ways to think about what we're doing in American dynamism is we're going after all the sectors of GDP that are, like, really big and not yet basically affected by tech. And so education, health care, housing, defense, law, you know, just to pick five, you know, those are giant important slices of the economy that largely have not been transformed by technology in the last fifty years.
Speaker 3:You know, the US Defense Department spends, you know, it's coming up in a trillion dollars. Very little of that money is going to technologies and companies that have been invented, frankly, in the last twenty years. You know, most military hardware in the Department of Defense is you know, the F-sixteen is from the seventies. Right? Like, the The US plane that does high altitude photography, the high high altitude spy plane, it's still the u two Yeah.
Speaker 3:Which is it's just, literally a 70 year old plane. So, like, there's just, like, enormous changes, you know, that that really have to happen. And I think everybody kind of in the system knows that, but it's hard to get there. And I think, you know, a big part of that is, you know, these new companies, you know, that we're you know, that we that we try to support. You know, they they they need to show up and make their case, but, you know, the entrepreneurs are fantastic.
Speaker 3:And then, you know, we see more receptivity coming from the system than we ever have.
Speaker 2:Talk about the kind of position, the position that the firm is in today. In many ways, it feels like you and Ben and the team had somewhat of a crystal ball to see how the private markets were evolving, companies staying private longer, AI being this massive platform shift that's gonna upend, you know, every industry, and then now the sort of political environment that enables industries to kind of get a second or third life. Did you just get lucky or did you see a lot of this coming?
Speaker 3:I mean, think we got a few things right. We got a bunch of stuff wrong. We buried those ideas up back behind the shed. So we
Speaker 2:made a
Speaker 3:bunch of mistakes along the way or changed a bunch of things. But we got a few big things right. The things I think we got right, one is like the venture ecosystem, as you guys know, has just evolved enormously in a very positive way. And the kind of old model of having a sort of a bunch of kind of midsize firms, they kind of sit on Sand Hill Road and wait for the founders to, you know, to come in. Like that that, you know, those days are kind of over.
Speaker 3:You you have the rise of the high scale, you know, firms like us. But you also have the rise of all these seed and angel investors that are really first money in and then really working closely with founders from the very beginning. And I think that ecosystem is healthier than ever and doing really well. And so that's been a big change. On the IPOs, like, I don't I don't know.
Speaker 3:I I would say we have changed on that, which is I used to I used to complain a lot. Like, I used to give these interviews years ago in, you know, like early twenty tens and just complain about, like, the that it was basically becoming impossible for companies to go public and, you know, the things that had had caused that to happen and what needed to change. And then, of course, nothing happened. There were no reforms. There were no improvements.
Speaker 3:If anything, everything got worse. And so we and others adapted to that by basically putting ourselves in a position to fund companies later in their life cycle at larger amounts of money, later growth stages. And it's now much more common for companies to do these tenders and these kind of private sales even for their employees. So that's been a big change. But
Speaker 1:look,
Speaker 3:I don't know, maybe the best directional bet we made was just technology was gonna keep becoming more important. Yeah. It's just like in every area of our life, the the the bet that, you know, in in sector x, tech is going to be more important. There are going to be big tech companies built. They're gonna really matter.
Speaker 3:That I think is true. I think that's a very good bet. I think, frankly, like, don't I it's hard for me to ever see that ending.
Speaker 2:Yeah. What are you you know, you guys are are with your LPs today, tomorrow. What are you hoping they they take away from the event?
Speaker 3:Oh, so this is not a John Dore quote, but I'll give you another quote. When we were raising money originally, we're going around. We raised our first fund in 02/2009, and the world had completely collapsed after the financial crisis. And we went around and we sort of briefed the venture VCs we respected to just give them a heads up of what we're doing. And one of the GPs took us aside at the end and said, guys have been dealing with these very smart public market investors.
Speaker 3:He said, part of job you're going hate the most is working with these LPs. You know, they're just terrible. And he said, key is you need to treat them like mushrooms. You put them in a cardboard box. You put the lid on the cardboard box.
Speaker 3:And you put the box under the bed. And you don't open it for two years.
Speaker 1:That makes a ton of sense. They're like, what what what's what's the markup today? Yeah. That was definitely somebody else.
Speaker 3:That was not John.
Speaker 1:Yeah. Yeah.
Speaker 3:And so, you know, look, the the view Ben and I always had was the exact opposite of that, you know, which is our investors are our partners. Know? And and, you know, look, that's how we wanna be treated by the companies we invest in. You know, that's how we always, you know, viewed it when we were running public companies. Our our investors are our partners.
Speaker 3:You know, they're they're they're they're they're in it with us together. You know, we're they're they're they're making a big bet on us and trusting us. And then, you know, look, correspondingly, the promise that we made to them is like, look, we're gonna try to, like, deliver, you know, excellent returns. But in this business, it's just gonna take a long time. And, you know, the the you you guys know this.
Speaker 3:For for any company that really succeeds, it takes, you know, ten, twenty, thirty years Yeah. You know, to to really have it succeed. And like and along the ways along the way, like, lot of things happen, you know, everything from negative headlines to, you know, lawsuits, disasters, chaos, you know, all kinds of crazy, you know, twists and turns, changes happen along the way. And so I just think it's really important for us as a firm. We really always need to make sure that we're treating our LPs as full partners.
Speaker 3:And so what we're trying to do is be just really open the kimono all the way, show them everything, kind of expose them to everything that we're doing, make sure they really understand it, go as as deep as they wanna go on the on the technology and on the companies. And I you know, this is, year 15 of this for us, and and so far, that I I think they would say that that's gone well.
Speaker 1:That's great. Last question for me. Just general advice for the next generation of entrepreneurs. Are you hoping more college, less college, more coding, less coding? Like, there's a ton of technological change right now.
Speaker 1:How can the next generation of entrepreneurs set themselves up for success?
Speaker 3:Yeah. So there's an old Steve Martin, Steve Martin line. There's you you wrote this great book on on how to be a successful stand up comedian. And it's just, know, short short little book, really well written, you know, every aspired comedian in the world opened it up and said Steve Martin's, you know, advice for being a great stand up comedian. And it was be so good they can't ignore you.
Speaker 3:Right? Like, okay. Thank you, Mr. Barton. Yep.
Speaker 3:You know, I'll get right on that. But, like, that that remains the best advice, I think, which is just, like, quality like we said, like, bears out. Like, quality shows. And so, you know, a you know, really excellent thinking coupled with a high degree of, you know, energy and courage, you know, team building a great team and then a great product, you know, and a real, you know, insight into a market with customers figuring out how to design you know, not just design a product, but also design a business. Like, that's basically like, my my view and my view of that as an entrepreneur always, well, like, that's my job as an entrepreneur.
Speaker 3:And, like, if I, know, if I put a lot of time and effort into that and very serious about it, I can hopefully do a good job. And I think time spent improving the quality of the thing, the product and the business, is almost always better than time spent trying to I don't know, networking or publishing a presentation or trying to get positive press coverage or kind of all the external stuff. And so it's really it's really the quality of the thing. And then, you know, again, my, you know, my hope would be that like we as a firm and others like us, that we really, you know, that we really recognize that and see it, you know, see it, you know, kinda see it when it shows up. And I think that's the thing.
Speaker 3:And then I I think the other thing would be, look, like AI is superpowers. Right? And like if you, as a founder, have access to, you know, just to, you know, just say chat GPT deep research Mhmm. It's just like, oh, you know, it's just like, oh my god. Like, I I have a, you know, I I like, I have a PhD level.
Speaker 3:It used to be so hard to get information. Right? And then it's been so hard, you know, even still to figure out what to do with it. And so to now have this tool, you know, these tools for thinking through everything and, you know, increasingly being able to do things like write code, you know, we ought to see a generation of founders here that are just like incredibly capable, you know, relative to to, you know, to what to what we used to be like. And, you know, we're starting to see those.
Speaker 3:We're starting to see, you know, I would say a handful of those. You know, that's what I'm still waiting for, like, the real conceptual breakthroughs. Like, I'm I'm still waiting for the, you know, the, the company where it's like, it's got a thousand employees, nine ninety nine are bots. Like, I haven't seen that yet. And somebody's gonna really figure out how to use this technology to really not just bring a product to market, but fundamentally change how companies operate.
Speaker 3:And I think that's probably that's probably the next big unlock.
Speaker 2:How do you think about an individual's edge around their own proprietary knowledge? There had been talk of with Warren Buffett, you know, retiring. He read something like a hundred thousand plus earnings transcripts. He had this incredible recall. You're often credited with having this incredible recall, and it certainly gives can give you an edge in thinking through, you know, net new opportunities and decisions.
Speaker 2:Do you do you think that edge remains in a world where all human knowledge is accessible in a single query? Or or what's your kind of mental model there?
Speaker 3:Yeah. So I think it's gonna be I mean, look, I think there's basically, like, two ways to really have a differentiated edge, like, in general. Right? There's sort of, you know, get there's kind of go deeper, go broad. You know, go deep has kind of become a more and more specialized expert over time.
Speaker 3:And and, you know, look, there are domains in which that, like, really matters, you know, biotech and and and things like you know, by the way, designing a you know, AI, you know, working on AI foundation models. Like, that that stuff really matters. The deeper you are, the better. So there's, you know, certain fields where that really matters. I think for most fields, though, now with these new tools, I would probably bet more on basically people who are able to be broad, which is to say basically, can you know something about a lot of different, you know, kind of aspects of life and how the world works?
Speaker 3:And then you can use the tool. You can use the AI to go deep whenever you need to. But then your job as the human is to basically then, you know, basically across the domains, across the disciplines. And and look and look, you see this. If you talk to any of, like, the great CEOs, you see you know, you kind of see this, which is like the the really great c great great tech CEOs.
Speaker 3:They're great product people, and they're great salespeople, and they're great marketing people, and they're, you know, and they're great legal thinkers, and they're great finance people, and they're great with investors, and they're great with the press. Right? Yeah. So it's it's this it's this it's, you know, this sort of multidisciplinary, you know, kind of approach, and being able to cross domains. And I you know, and I
Speaker 2:I don't know. We'll see we'll see
Speaker 3:how good the, know, we'll see how good the AI gets at that. Hopefully, it gets good at that also. But, you know, that's that in a lot of ways, know, the entrepreneur has always kind of had the burden, you know, for somebody who wants to do something serious. Like, they have to be like that, least to some extent. And, you know, the the the best entrepreneurs of the future, think, will probably be, like, quite skilled at, six or eight things and then able to kind of cross and combine them.
Speaker 2:How do you think about the responsibility of the venture industry broadly to try to influence, you know, world, you know, outcomes in the world? I was sort of laughing, you know, less than a month ago. A lot of investors were clearly shifting capital out of The US and just, you know, yoloing into French bonds and things like that. Venture capitalists obviously didn't do that. Right?
Speaker 12:But at
Speaker 2:the same time, there was a high profile story of a venture capital firm, you know, investing in in a in a Chinese AI company that that we won't mention here. And it and it got me thinking around there, you know, if you're operating a a hedge fund, you can go invest wherever you want without a ton of scrutiny, right? People don't look at that as, you know, fine if you Totally. Move assets into some, you know, Chinese It's
Speaker 1:as impactful.
Speaker 2:It's less of a yeah, it doesn't feel like you're betting against your own team in the same Totally. So I'm curious how you think of the the generalized kind of responsibility of of venture capitalists, even especially as a as the sort of AUM has scaled dramatically.
Speaker 1:Been the the arrow of progress.
Speaker 2:Yeah. Yeah.
Speaker 3:Yeah. Look. I the big thing I think I would say is, like, we always we always thought and aspired that we were building things that matter, that that were gonna have an impact on the world. And for a long time, you know, we were trying to convince people that we were doing that, and they never quite took us seriously. Because it's like, you know, it's like, alright.
Speaker 3:Databases, routers, like, okay. Nice, you know, nice guys. I don't even know what those things are. You know, even personal computers, like a thing on my desk. I write letters on it.
Speaker 3:I you know, whatever. Like, they they just like tech was never, like, relevant to politics, really. You know? And I call this I'm talking about between the modern era, nineteen fifties, call it through like the February. And so, you know, and look, know, generally speaking, like our press coverage was, you know, generally people were like, wow, startups are exciting.
Speaker 3:And, you know, when companies succeed, it's great. And then, you know, in the last ten or fifteen years, you know, the the like, questions like yours have started to come up. Then correspondingly, just as you know, just enormous amounts of criticism attacks, indictments of people with all kinds of points of view on the industry. I would say in the beginning, that irritated me because I had gotten used to the environment where either nobody cared about us or people just said nice things about us. What I came to realize is we're the dog that caught the bus.
Speaker 3:We actually now are building things that matter. Yeah. So tech now interfaces direct. When Elon goes into the car market, the repercussions of that, to your point, on many countries, just gigantic. And there's a thousand examples like that that we could give.
Speaker 3:AI probably being the biggest of all. And so look, it worked. The stuff that we do now, the companies that we fund, they really matter. They really have you know, really big implications for society and for for for policy and politics and geopolitics. And so mainly, I think the responsibility is on is on us as a firm as well as, you know, our companies.
Speaker 3:Like, we need to go explain ourselves. You know, we we need to go be present in the policy debates. As you know, like, we have a, you know, we have a huge push now into policy and politics that I never imagined we would have. Yeah. By by the way, that's something I got wrong.
Speaker 3:I never thought we would have that, and then it became very clear that we need that, you know, kind of for this reason. So so, like, I I just think that's part and parcel of, like, of of it working. Like, we're gonna have to do that. And then the geopolitics, you know, the China thing, I think, is probably the most intense version of that. You know, I don't Maybe that's when we got right.
Speaker 3:We just never really did anything in China for a bunch of reasons. You know, and, you know, look, and by the way, we'll see. This is a fluid situation and you guys, it's been publicly reported that there are talks underway with China. So the relationship with China could be better or worse in six months. Think that's what
Speaker 1:everyone wants. Yeah. Yeah. I mean, everyone wants cooperation in general.
Speaker 3:Yeah. Like, look, it's possible. Look. I mean, I'll get that I'll give you my favorite. Here's my favorite story.
Speaker 3:So in '20 I think it was, 2011, the at the time the Obama administration was trying to reestablish was trying to reestablish a relationship with Russia. And there was a famous moment where the secretary of state, who was this this woman named Hillary Clinton I don't know whatever happened to her. Hear rumors that she then went on to I don't know. Did something in politics. But she was the secretary of state.
Speaker 3:There's this famous photo where she was on stage with Sergei Lavrov, who was the foreign minister of Russia, her counterpart. And she brought like a big plastic red button, which was the reset button, right, to reset, know, warm relations with Russia. Then what happened was Medvedev,
Speaker 1:who was The showman. Showman showman showman.
Speaker 2:The reset air horn.
Speaker 3:Yeah. Exactly. And then Medvedev, who who was Putin's number two, actually came to Silicon Valley. And the the the secretary of state's office called all around to Silicon Valley saying, please, you guys, roll out the red carpet to Russia. They're our new friends.
Speaker 3:Like, do everything with them. Do whatever they want. Please go invest in Russian companies. Russia's building this new Silicon Valley. See what you can do to support them.
Speaker 3:And so it was you know, like it was just like a love fest. And then, you know, fast forward four years later and, you know, Putin became, you know, Putler, as they say. And, you know, it just, you know, and then, you know, Russiagate, like everything that followed.
Speaker 1:So That's rough.
Speaker 3:Look, would just say part of being citizens, I think, is, you know, we're just gonna have to navigate through shifting geopolitics. Our view and quite honestly, like, view is just we're just put ourselves squarely on the side of The United States. We should say our foreign policy as a firm is The United States foreign policy. If they don't want us to do things in China, they don't. By the way, if they come to us and they say we should do more, like we'll look at it at that point.
Speaker 3:But we're trying to be good citizens among everything else.
Speaker 1:Yeah. It makes sense.
Speaker 2:Talk about the evolution of the a 16 z brand. You guys came out with a new logo and website. Yeah. And as always, you're good at getting the attention of, the Internet.
Speaker 1:Was gonna talk about this. Yeah.
Speaker 2:We we talked about it on the show. We we liked it.
Speaker 1:Yeah. I I think it's something that's different and and will age very well, but I wasn't exactly sure, like, what are you trying to say with it? What are the references? And even what was the process? Like, did you pick the color?
Speaker 1:I don't know. Or even that conversation, I want to know more about the brand.
Speaker 3:Yeah. So first of all, you know, I know we got some Twitter controversy on it, and I just I just wanna thank Kanye West
Speaker 1:for For drowning that outcome entirely.
Speaker 2:Yeah. You know, like, I I don't
Speaker 1:think we're Really steamrolled creations. At
Speaker 3:at the moment. So, yeah, so that that worked out well. So anyway Yeah. So Look. So it's our we have this incredible designer, Greg Truesdell.
Speaker 3:Got a he's got a team. They did a fantastic job. I worked I I did. I worked closely with him on it. I I have no design skills, but I I provided a lot of input.
Speaker 3:You know, I think the big thing about it is what what is intended to sort of reflect is is like an embrace of what I think is a broad a broad set of cultural changes that are happening right now. You know, frankly, you guys are a part of as well. Mhmm. Which is this what I would describe as it, don't know, fifteen year era of, I don't know, like cultural almost shrinkage, everything get, you know, and you see that in the design world, it's like everything getting like ultra clean, minimalistic. Yeah.
Speaker 3:Then culturally, everybody getting like very cautious and careful about what they say. And you know, with all this kind of censorship and speech control and then, you know, this whole thing of everybody needs to feel feel bad about everything all the time and everybody needs to feel bad about the country and bad about their, you know, ancestors and bad about this and bad you know, everybody's just miserable all the time. Like, I just think like that whole thing got kind of as, know, I don't know, you may call it like Neo Puritanism or something. Totally. Like that thing kind of crested in, I don't know, 2021 or 2020 And basically, in the last three years, I think there's this renewed sense of energy, enthusiasm, ambition, achievement, dynamism.
Speaker 3:But like and again, it's like literally, yeah, we should have nuclear energy. Yeah, we should have rockets going to Mars. Yeah, we should have these things. And that it's good to succeed. It's good to build businesses.
Speaker 3:It's good to make new things in the world. And yeah, we should have the 1,000 yard tall shiny colossus on on Alcatraz Island.
Speaker 2:Yeah. Yeah. I was gonna I was gonna ask. My my only request is, like, make it make it real. You know?
Speaker 2:Like like, make it the Statue Of Liberty Of The West Coast.
Speaker 1:Yeah. I'm imagining a massive instantiation of that coin in the office and maybe physical Not
Speaker 2:the coin. Like, the
Speaker 1:Oh, yeah. The actual figure. True. Yeah. Yes.
Speaker 1:Yeah. We need a module.
Speaker 10:She has
Speaker 3:a name. She has a name.
Speaker 1:She has a name. No. What's the name?
Speaker 3:She has a name. Technomites.
Speaker 1:Technomites. Love it. Technomites. Fantastic. Amazing.
Speaker 1:That's great.
Speaker 2:Exactly. Well, Technomites, buy a plot of land somewhere visible from the Golden Gate and just, you know, build it mile high, please.
Speaker 1:Mile high.
Speaker 2:Make it happen. Make it happen.
Speaker 1:Yes. Thank you so much for joining.
Speaker 2:This is Thank for coming on.
Speaker 3:Thank you, guys.
Speaker 2:Really enjoyed it. Have fun with the with the team and LPs. Cheers.
Speaker 1:We'll talk to you soon. Bye. Let's give it up for Marc Andreessen. Absolute dog. Fantastic allocator, size lord, all of the above.
Speaker 2:People love to yap online, but you talk to the team and it's hard not to be gigabullish.
Speaker 1:For sure. There will never be enough venture capital. We didn't even get to that. We but we'll save that for Ben. Yeah.
Speaker 1:We'll save that for Ben. Anyway, should we do some timeline? Should we get out of here? What are thinking, Jory?
Speaker 2:Well, John, I'd like to talk to you about Figma.
Speaker 1:Okay. Tell me about Figma.
Speaker 2:Figma is the tool to design and build products. It's a tool that we use. Everybody knows that already.
Speaker 1:Yep.
Speaker 2:I've been a DAU for my entire career at this point, and we are very lucky to have them as a sponsor and a partner on the show. Crazy story Oh. The way, from David George earlier. Oh, yeah. Talking about how Yeah.
Speaker 2:Dylan came to him during during the middle of
Speaker 1:That is
Speaker 2:so funny. You wanna invest?
Speaker 1:Yeah. We've been talking about this for
Speaker 4:a Yeah.
Speaker 1:Same price. We've been discussing the price. Right? I mean, that price. But, I mean, that was a fantastic time to actually invest.
Speaker 2:Yeah. Was the best. Had basically, you know, just shut off. Yeah. And that was when how about now?
Speaker 2:How about now? Put your money where your mouth is.
Speaker 1:It's why Dylan's One
Speaker 4:of the
Speaker 1:best to ever do.
Speaker 2:But but I really appreciated getting a snapshot of of everybody at the firm. It's such
Speaker 4:a it's fun.
Speaker 2:Massive organization like Eric said 600,000,000 or sorry six six hundred people not
Speaker 1:600
Speaker 2:people. Six people. We're we're in hour hour four of the show. Yeah. Anyways Well What else we got?
Speaker 1:Is in the news? Tiger's kinda out of the game. They led 47 series a's in 2022. This is from Aaron Harris. Tiger hasn't led a series a since June 2023.
Speaker 1:Although we saw that they are changing their strategy, and they're doing pretty well in their OpenAI investments. So we'll see how the overall fund performs. But they were you remember back in 2022, they were going crazy. They would meet meet a founder, term sheet same day. On the call, they would give you a decision.
Speaker 1:It was actually really nice because you just take the meeting, you know exactly where you stood by the end of the call. But, obviously, a shifting strategy for Tiger and the crossover funds. A lot them step
Speaker 2:I want is for them is for OpenAI to to hit that one t mark
Speaker 1:Mhmm.
Speaker 2:And then Tiger says, you know what? We actually were onto something there.
Speaker 1:There we go. Was the best of times.
Speaker 2:It doesn't even it it felt like they were doing more than 47 series a's. But that was 2022
Speaker 11:Well, that's
Speaker 2:just the
Speaker 1:series a's.
Speaker 2:Well, yeah. That that
Speaker 1:They were doing b's and c's. They were doing everything really fast.
Speaker 12:But also 2022
Speaker 2:was where there was really only like four or five months where things were really ripping and then things became it became obvious that that things were getting a little dicey.
Speaker 1:Yeah. Interest rates went up. No board seats moved very fast. That that Walmart capital is Ev Randall that Kleiner Perkins refers to refers to refer to it as. Ryan Peterson says a gentleman is never rude except on purpose.
Speaker 1:And Paul Graham chimes in to say the the original version, a gentleman is someone who is never unintentionally rude, makes a stronger claim. It's defining the term instead of just telling us one thing that's true of them. I like this because it's it's essentially a coinage. So instead of saying a gentleman is never rude on purpose, say a gentleman is someone who's never intentionally unintentionally rude, Define a gentleman. It's kind of recoining the phrase.
Speaker 1:So you take a you take a word that everyone knows. You know? An entrepreneur is someone who never accepts a down round, who always pre always announces a preempted round, who always has
Speaker 2:Who always gets preempted.
Speaker 1:Yeah. A generation
Speaker 2:of founders always give to raise. They they still get preempted. Yeah.
Speaker 1:It's great. Packy's talking about Harry's. They just launched a new razor. They've been in the business for so long, these Harry's guys.
Speaker 2:You had a good take here.
Speaker 1:So they so it's a very polished ad. It is honestly a fantastic ad that's, like, half vibe real, half comedy. The founders are in there. I thought it was a fantastic ad, and I learned that, hey. They launched a new razor.
Speaker 1:It's kind of like four blades has a pivot, so it's a more modern design. Apparently, that was under patent. The patent expired, so they were able to enter that market, and they already own a German razor factory. Do you know the story of Harry's? They they they their their seed round was, like, a hundred million dollars, and they bought a razor factory Yeah.
Speaker 1:Because the the whole industry was very monopolistic. Yeah. And but they're they're positioning themselves as, like, we're going up against big razor, which is true. Like, Gillette is a huge, huge company. But, also, I think that they tried to sell themselves to BigRazor at some point.
Speaker 1:And so there's a question here in my mind of, like, do do can they really say that they're tech still? Can they really say that they're little razor once you Yeah.
Speaker 4:At what point do you need?
Speaker 2:Claim we're now big razor.
Speaker 1:Exactly. I think Harry is so Lindy at this point. Extract. It's over a decade old. Earnings.
Speaker 1:You're part of big razor. I'm putting you in the big razor bucket.
Speaker 2:Yep.
Speaker 1:Anyway, Sean Frank had a good post. Talked to a founder today. Her business was worth more than Ridge, growing a % year over year. I asked a personal question. How much money do you have?
Speaker 1:Oh, basically none. Business is huge, growing fast, only ever raised a small amount, but no cash for salaries, no cash for dividends, no secondaries. I think this is really stressful. She's top one percent of 1% of outcomes. On paper worth hundreds of millions, still has to rent an apartment.
Speaker 1:Rush to your first million liquid even if even if you have to grow slower, even if you have to take a lower valuation to get secondaries. Money doesn't make you happy, but it certainly reduces the level of stress. So interesting take.
Speaker 2:Good take, Sean. Sean.
Speaker 1:What else is here? Oh, we gotta cover the seven forty sevens. They're, the seven forty seven eight Preston. Boeing business jet, BBJ, VVIP aircraft. Here's a comprehensive list of these planes.
Speaker 1:People think seven forty sevens are around. People think private jets are around. Really, the the overlap of private jets that are at this scale is quite, quite small. And so Yeah. Qatar has three.
Speaker 1:Kuwait has one. Oman has one. Brunei has one. Morocco has one. Turkey has one.
Speaker 1:Saudi has one. Egypt has one. And The US has technically has two for air force ones, and that's it. And so first, shame on all of the tech elite for not stepping into the seven forty seven BBJ game.
Speaker 2:We're gonna What?
Speaker 1:Spiegels? Get a lot of, he's a seven thirty seven.
Speaker 2:Seven 30 seven. The one that we saw which will go unnamed recently?
Speaker 1:That was also a seven fifty seven. So seven forty seven is the biggest, the most expensive.
Speaker 2:It's truly elite.
Speaker 1:Truly elite. Two two stories in many configurations. Absolutely massive plane. Very expensive. And it's, of course, the plane that, that is being rumored to have been delivered to Trump as a gift, and there's a lot of debate over that.
Speaker 1:But, I mean, I say America needs more seven forty seven BBJs for sure. That's essential. This Paki post kinda relates to what Mark was talking about. Everything is technology. He's breaking down twenty twenty five venture backed exits over $1,000,000,000, and you're gonna have to hit the size gong multiple times for this because we got Wiz at 32,000,000,000, CoreWeave at 23,000,000,000, Ampere at 6,500,000,000.0, Deliveroo at 3,900,000,000.0, Windsurf at 3,000,000,000, Derabit at 2.9, Moveworks at 2.9, Scorpion at 2.5, Poppy at 1.7, Ninja Trader at 1.5, Hidden Road at 1.3, and Seven Rooms at 1.2.
Speaker 1:So an absolute stacked year of liquidity above the $1,000,000,000 mark for tech companies. Everything is technology. Thanks for highlighting it, Packy. You'll love to see it. The data's from PitchBook, and he's breaking it down for you.
Speaker 1:Oh, I like this post from Signal, and then we'll get out of here. You should be able to trade employees like sports stream like sports teams trade players. Would be hilarious. Today, OpenAI traded two mid level engineers for a researcher and a veteran UX manager. There should be a trade deadline every year.
Speaker 2:Okay. I love signal, but I I basically posted this exact same thing, like, six months ago. You remember that?
Speaker 1:Did. And I think we posted
Speaker 2:that on equally equally viral. So Okay. I think I I think I must have I must
Speaker 1:have He's trading your post for one of his posts, and he's got running it up again. Bucks.
Speaker 2:You know? We love to see it. I love to see it.
Speaker 1:Play the hits. If you're not gonna play them, he's gonna play them.
Speaker 2:I love to see it.
Speaker 1:Anyway, the last piece of news from semi analysis over the past thirty days, the tech leads responsible for RockM, PyTorch have submitted 14 PRs. That's that's AMD's implementation of PyTorch that runs on AMD graphics cards that have been behind, versus NVIDIA PyTorch tech leads have submitted 22 pull requests, and so AMD is finally catching up to NVIDIA. Just like VLLM maintainers, we are working on internal infra infra pipeline to track the quantity and quality of PRs for NVIDIA and AMD to gain additional insights. Stay tuned. And so Dylan Patel from from Semi Analysis, fantastic analyst, obviously, but he's coming on the show in a few weeks.
Speaker 1:We'll have to ask him about the race between AMD and NVIDIA, but it feels like it's heating up. And I love a horse race in tech.
Speaker 2:Love a horse race, John.
Speaker 1:So stay tuned. We'll see you tomorrow. We have a massive show for you, and we're gonna be in a new studio soon. So please leave us five stars on Apple Podcasts, Spotify.
Speaker 2:Directors said, if we don't ask you to leave
Speaker 1:You have to do it. You on. You have to do it or we're gonna shut the show down. If you like the show at all, leave us five stars.
Speaker 2:They said they're gonna pull the plug.
Speaker 1:We're gonna pull the plug.
Speaker 2:Go do it. Thank Thank
Speaker 1:you for
Speaker 2:tuning in today. We love doing this show. That's fantastic. We hope you have a wonderful evening.
Speaker 1:We'll talk to you later.
Speaker 2:Cheers.
Speaker 3:Bye.