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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.
Welcome to technology brothers. The number one live show in tech. Today is Thursday, 02/06/2025. Jordy, we got some breaking news. I I I a technology brother's exclusive, really.
Speaker 2:Yeah.
Speaker 1:X, the everything app is now profitable. Let's go. There we go.
Speaker 2:There we go. Yeah. We we, we didn't scoop this, but we scooped it from the timeline. Shkreli has a fantastic post here. I'll get into it.
Speaker 2:Julian had shared earlier. He says, x also reported to investors twenty twenty four adjusted earnings before interest taxes, depreciation, and amortization of about 1,250,000,000.00 and annual revenue of 2,700,000,000.0. Investors said that was a better picture than they had expected and that x's finances hit inflection point a few months before the November election. In 2021, Twitter reported adjusted EBITDA EBITDA of about 682,000,000 and about 5,000,000,000 in revenue. That was the last full year before Musk took the company private.
Speaker 2:So Shkreli basically calls out x is worth around the purchase price right now, which is 44,000,000,000. If revenue keeps growing, a hundred billion dollar valuation is not unreasonable, crazy turnaround. So many people, you know, were trying to, at some point, stance on x's grave, said that Elon was running it into the ground. They did face you know, the turnaround of of Twitter was always gonna be a challenge. It got exponentially more challenging as every major advertiser left the platform.
Speaker 2:And so, But
Speaker 1:they are coming back in a big way, and
Speaker 2:we're gonna cover that on
Speaker 1:the show.
Speaker 2:Yeah. We'll cover that soon. A lot of heavy hitters are are bringing their ad dollars to the platform again, which we love to see because it's more money in every poster's pocket. Yeah. And, overall, we love this app.
Speaker 2:You know, we we've built our careers on it, and it's great to see it win. It provides an exceptional amount of joy and value to us here on the show and many of our listeners. So, I love to see this. I they had marked down, you know, the major investors had sort of marked down their positions at some point last year to around $20,000,000,000. And now looking at this, if you have a business that's doing 1,250,000,000.00 in EBITDA, that's, like, the place that the most important conversations in the world are happening live every single day, it's easy to see how that business, especially with its, you know, potential having these advertisers come back to the platform, launching a bunch of new features.
Speaker 2:I agree with Shkreli. It's easy to see how it gets to a hundred billion dollar company and goes public again probably on the Texas Stock Exchange. And, I look forward to hopefully, we can we can buy some some x shares, you know, prior to them, but I look forward to to owning it in the in the, in the public market.
Speaker 1:Portfolio, baby. Yeah.
Speaker 2:There we go.
Speaker 1:Yeah. I mean, when this news hit, everyone was saying he overpaid, which it was I mean, unequivocally, it was a rough time in the market because it he bought it right at the end of the, and it probably would have been cheaper if he waited. Yeah. But he got the deal done, and all that matters is that it's an it's an extremely important app with a really, really strong network effect. And and he's an operator.
Speaker 1:And Elon posted, you know, hey. Maybe I'm actually good with money, which
Speaker 2:I love.
Speaker 1:And and there was a question about, you know, unfortunately, the previous team at Twitter, it turned over. There were multiple CEOs. There were lots of people trying things, but it clearly just needed a more aggressive approach. And Yeah. A take private is, like, the this is the quintessential example of when you want to do a take private because this would never be allowed to happen in the public markets.
Speaker 1:The the stock would be all over the place. So instead, you take it private. You do some crazy reimagining of the business, even change the entire business model. People were saying maybe they should just charge for APIs or maybe they should just do subscription. Maybe they should subscription gate the entire app so you have to pay to even view them.
Speaker 1:There were so many proposals, and they all, and and Elon got a chance to try them all and then see what works, and, clearly, he's on to something here. What do you got, Jordan?
Speaker 2:Yeah. At at the end of the day, he bought what in many ways at that price was somewhat of a toxic asset. Right? It's not making a lot of money. But inside, there was this nugget of potential.
Speaker 2:And I think that I think that he found it, and he's now, you know, giving it, you know, even more life. And, yeah, there there's been a lot of complaints from certain posters over the last year because their reach has dropped. But guess what else has dropped, John? The quality of their posts.
Speaker 1:That's true.
Speaker 2:You can't just, you gotta work the algorithm will work for you, but you gotta work for the algorithm. And, I'm sick of of of, you know, sloppy, low effort posters thinking that they have a hundred k followers, that they deserve a hundred k impressions on a post. You gotta earn it every day. And, you know, the platform will work for you, but you gotta work for it. So, congratulations to the x team.
Speaker 2:I mean, we had to cut the episode short yesterday because of Tyler and Jacoby. But, but we got a lot cooking with x that we're super excited about, and we're very excited to take this live show two x, hopefully starting next week. I think we just wanna be back in the studio for it. So, so, yeah, best app ever, worth worth a trillion dollars in my heart. And, and now probably around 44,000,000,000, you know, mark to market.
Speaker 1:I agree. Well, moving on, let's talk about some breaking news. Eric Gleiman at ramp has bought an ad for the big game. Let's go.
Speaker 2:The big game. And you
Speaker 1:know what? On Sunday, the big game. I'm not exactly sure what that is. I I I know the Super Bowl is on Sunday. The big game sounds like maybe related to the big game, May related to the Super Bowl, but they're running an ad, and they got Saquon Barkley, in the studio shooting, a beautifully directed ad.
Speaker 1:Very funny. Go check it out. Jordy, can you break us down on what this means for ramp, what this means for the future of advertising at the big game?
Speaker 2:So I gotta be honest with you, John. We got a little ins we got the scoop on this, last week, and they said, you know, we're running an ad with with Saquon Barkley. I go, amazing. I love ads. You gotta tell me who that is.
Speaker 2:And then they go on to say, you know, future MVP, future hall of famer. He's, you know, he's playing in the big game. I said, what's the big game? They said the Super Bowl. And I said, I will be tuning in now
Speaker 1:because I'm excited
Speaker 2:to see this ad. Yeah. But, no. I think it's I think it's amazing. It's it's, you know, there's evolutions.
Speaker 2:Right? You go from posting a couple posts on x, then you maybe run some some, you know, meta ads, and then maybe you, you know, do a little organic TikTok, and then you do some out of home ads, and then eventually you're running Super Bowl ads. And so I think it's just the evolution of the the ramp advertising engine, and, I'm excited to see it. I I I love the I love the constraint of Super Bowl ads. You have so little time.
Speaker 2:You have to deliver a message that, is going out to all of America. It's like it's the best channel to to reach a truly diverse audience.
Speaker 1:It's Yep.
Speaker 2:You know, football shouldn't be politicized. There's there's people from all walks of life and industries, from employees that'll be users of Ramp, to business owners that'll, you know, sign up employees that'll be users of Ramp, to business owners that'll, you know, sign up for it themselves, to CFOs that are already using Ramp and are just excited to see, Ramp, you know, running ads on the big game. So great moment.
Speaker 1:It it really hits the core value props in just ten seconds. Like, you know, everyone's everyone in business has been in the position of filing expense reports. It very clearly shows how much that sucks and how much of a distraction that is, and it gets the rest across very quickly.
Speaker 2:And the and the line, you know, basically, would you pull Saquon Barkley off the field to file expense reports? Perfect analogy for your team. Your team, you're hiring, you're paying all these amazing people to do work on your business. You're gonna take them off the field doing the real work and have them file expense reports, bad idea. Yep.
Speaker 2:Run on ramp, save them time. And, it's awesome that he's an investor now in ramp and actually aligned with the future of the company.
Speaker 1:Really cool. I
Speaker 2:see many more ramp ads in the future with with Saquon. So I'm excited to see how this plays out.
Speaker 1:Yeah. And I'm I'm really excited. Obviously, like, ramp markets to CFOs, and I think this will be a very interesting case study for Ramp to share with their audience of CFOs. You know, obviously, this is a very top of funnel, very broad brand marketing strategy here. But the more interesting thing to me is I wanna hear how much they spent.
Speaker 1:Did they get the ROI? How they track it? Because I think a lot of companies look to ramp as a high growth company, and they say, I wanna, you know, be efficient. I wanna grow similarly. And if ramp can put together a really great case study on, hey.
Speaker 1:We took this big swing, and here's what happened. Here's how we here's how we tracked it. Here's how we think we did. And, yeah, we think we got positive ROI.
Speaker 2:And this is a this is a proper Super Bowl ad. You can go and spend 6 figures to get slotted in in some tiny county in Nebraska, and you got a Super Bowl ad. And if you're tuning in at that moment, people will see it.
Speaker 1:Yep. But
Speaker 2:this is gonna be a national ad. Everybody's gonna be seeing it, and, you're gonna be wanna be locked in for this one. Yeah. Might we might have to do a live stream during the show and just wait wait for the ad to go and then maybe a little champagne. You know?
Speaker 2:It's a big moment.
Speaker 1:I think of I I think of Sunday really just as a a showing of this ramp ad, and then they're playing some football around it to help promote the ad.
Speaker 2:Yeah. Yeah.
Speaker 1:Yeah.
Speaker 2:Yeah. Yeah. The the Super Bowl is is really to promote the advertising.
Speaker 1:Exactly. That is the intermission to me.
Speaker 2:Yeah. Yeah. Yeah. Yeah. Well said.
Speaker 1:Well, let's move on to another size gong moment from none other than cursor. They just hit a hundred million in ARR. Let's go.
Speaker 2:I wish I was there to hit the gong for you, John. It's it's not the same, but, you know, you can do a a little self hit there.
Speaker 1:It's a mess. It's a mess. We do work in the size gong and the slides and the mic. I'm doing the best I can.
Speaker 2:Usually usually, we, you know, we hit the size gong for m and a, fundraises, but this is even more special. One to a hundred million in ARR in in, I think it's, like, one point nine ish years. Some some crazy number. And, developers really love this tool. They, I feel like in many ways already say they can't can't live without it.
Speaker 2:So Yep. Love to see it. Incredible progress. This was a painful one for me when Kershaw started blowing up. I clicked to the founder's profile.
Speaker 2:He had been following me since, like, 2021. I didn't realize wasn't there to invest. But
Speaker 1:Punch in the air.
Speaker 2:You know, every once in a while, you leave a hundred bagger on the table. So,
Speaker 1:Live and learn, baby. Live and learn.
Speaker 2:Live and learn. Live and learn. But the funny thing so the funny thing here, somebody quote posted, this and, and said, actually, pumped up fund got to 500,000,000 of of of actual net, you know, revenue in in a year. So, you know, you have Cursor, Wiz, deal together, CoreWeave, OpenAI, DocuSign.
Speaker 1:Yep.
Speaker 2:All all taking a victory lap and then pumped up on, America's, you know, favorite illegal online casino. Yeah. Doing 500,000,000 in a year with Yeah. You know, a fraction of the team.
Speaker 1:I mean, we really gotta do a deep dive on market map on the these new coding agents because I I don't know that this is a winner take all market at this point. I know, there are a number of other companies that are doing really well. Cognition is growing a ton in a very different segment going for enterprise, the super upmarket. And, it'll be interesting to see how these all play out.
Speaker 2:There's, you know, Devin is building agents. Versha's building a code editor. Yep. There's also what's that other one? Is it is it called Tailwind?
Speaker 1:Yep. It's no. Tailwind's a CSS thing. I I I it's Windsurf.
Speaker 2:Windsurf. Windsurf. You got poolside.
Speaker 1:Poolside. Yeah. Yep. Space. I actually read a thread.
Speaker 1:There's a whole breakdown on all these different ones, and they're all slightly they're all good for slightly different things. Some of them are focused on designers, front end. Some of them are focused on back end stuff. Julius, Rahul Ligma's company, Raul Sunwalker is building, kind of a cursor for, data science. Right?
Speaker 1:It lives right in an iPython notebook. Obviously, there's things that you can do right within ChatGPT. And so the this market's evolving really fast, but it's it's super clear that if you're paying a developer six figures, getting them the best possible tools to amplify them and make their work go harder, faster and just more enjoyable. Like, everyone everyone's always raving about, oh, like, it's so nice not to have to write boilerplate code because I have the agents now. And you're getting to that Andre Karpathy mindset of vibe coding, just kind of steering the AI.
Speaker 1:It's beautiful. And I think this is gonna be, a trend not just in code development. We're gonna see these AI AI agents roll out for everything. We saw this with OpenAI deep research. We're gonna see this in docs and spreadsheets and all sorts of financial modeling tools.
Speaker 1:And I'm just super excited to to finally have some some, some software that just has a really tangible impact. So congrats to the Cursor team. Get out there.
Speaker 2:Thing, you gotta give DocuSign some credit here. Out of these companies, I think they're the first company to 300,000 employees. And so
Speaker 1:Every time you mention DocuSign, you add another 50 k employees.
Speaker 2:I add a zero. I add a zero. Add a zero.
Speaker 1:Add a zero every time.
Speaker 2:DocuSign has has a amazing milestone across 10,000,000 employees today. It's
Speaker 1:so good. Okay. Well, let's move on to our deep dive for today. Timu, we got cut off earlier, but we got a solid hour to break down Timu for you. It's a fascinating story, and it's, one of the sloppiest apps out there right now.
Speaker 2:It's it's the cream
Speaker 1:of the crop. It's the slop of the slop.
Speaker 2:Well, it's the slop of the slop. We'll get into why it's the slop of the slop. Let's start, let's go back in time first and talk about the founder's incredible, you know, sort of history getting getting to this point because he's really he's really an absolute dog. Even though he's making slop, he's a dog. Right?
Speaker 2:He's a dog. So you wanna you have a somewhere you wanna start or you want me to dive in?
Speaker 1:Yeah. I I mean, I wanted to start with these tweets just to kinda set the table. The first one is from, l two l three tweet engineer, mega based Chad. I think he's been on the show before. He said, just downloaded Timu.
Speaker 1:New users can sign up with Twitter. You're immediately greeted by a $250 coupon scam likely. The homepage is showing me fake sneakers, BDSM stuff, and a gun. I love it. It is new.
Speaker 1:Alright. This is from 2023. He was early. So Timu is a spin off of Pindo Duol PDD, which will break down the whole history here. But, Timu, was brand new.
Speaker 1:They launched in 2022, and then they rocketed to to massive numbers very quickly. But, I I had the exact same experience where I I opened up Timu to look at something, and it was like, you just won everything in the store for free. And it's just Well,
Speaker 2:and so
Speaker 1:prices are suspiciously low.
Speaker 2:To put this into perspective, I think a lot of people started to Timu hit their consciousness when they ran a Super Bowl ad.
Speaker 1:That's true.
Speaker 2:In early twenty twenty three, they ran this terrible ad that just said shop like a billionaire, and it's just telling these, like, slop products.
Speaker 1:Yep.
Speaker 2:And so, so, yeah, I think he posted this because around so this is, you know, probably ten months after the initial Super Bowl ad, but they had gone event gone number one in the App Store again. So a lot of people signing up for the for the product when when this was shared.
Speaker 1:Yeah. So did, we'll we'll we'll go through the full the full history, but, the Timu explosion is crazy. So they launched Timu, and it's it is a subsidiary, so the business is already going. But they launched it in September of twenty twenty two. I think the headquarters was in Boston, interestingly enough.
Speaker 1:And then they run a Super Bowl ad, and they're just spending billions of dollars advertising Timu. And by, August of twenty twenty three, so less than one year, they had reached $18,000,000,000 in gross merchandise sales for the full year. Isn't that the
Speaker 2:same 60,000,000 active users? We are gonna absolutely, we're gonna be dunking on this slot for the next hour, but I'm not here to take away from the execution. It's what they've done. They're they're selling absolute garbage, but what they've done is extremely impressive.
Speaker 1:You gotta hand it to him. The the founder's an absolute dog. And if he were in America still, we would be popping Dom Perignon for him. He this guy is one of us. He just happened to be playing for the wrong team.
Speaker 2:Yeah.
Speaker 1:So get back over here, and we'll break it down because this guy was in America for a while and should've stayed here. Should've should've built the slop apps for us. Send him over there. So, the reason this is at the top of everyone's news feed right now is because, recently, there was a change in tariff structure that could put Timu and Sheen and these, Chinese dropshippers effectively out of business. They've been exploding a loophole.
Speaker 1:Let's break it down from Melissa Chen who is quote tweeting Ryan Peterson. Ryan says, de minimis entries from China shut down effectively Tuesday. Melissa Chen says, winning. This is huge. Timo, Sheen, and all these tacky fast fashion companies that sell mostly crap have long relied on an unfair and unwarranted trade advantage.
Speaker 1:They have long been beneficiaries of what's called the de minimis loophole. This loophole allows goods to be shipped directly from overseas to American consumers so long as the value of each package is under $800 without any customs declaration. It's cheap, direct, untaxed, and unregulated. It's a law that existed since the nineteen thirties, long before the Internet and the existence of ecommerce retailers. Last year, The US received a billion packages from China through this loophole.
Speaker 1:CBP cannot possibly inspect items at this scale, so things do slip through the crack. Unsafe items, knockoffs, products made with forced labor from Xinjiang, and, yes, chemicals that can be used to make fentanyl. Wow. To put things in context, in 2022, Gap paid 700,000,000, while H and M paid 200,000,000 in import taxes. Timu paid zero.
Speaker 1:Free trade, once again, is not free. It's flooding our markets with cheap, crappy, potentially toxic goods, gutting our own retail markets, and allowing unsavory foreign competitors to exploit loopholes and gain unfair, unfair competitive advantage over retailers who have to play by the rules because of geography. Now we've closed this loophole for goods coming into China, and Sean Maguire is there to say, great tweet. So we love we love to see breakdowns like that, but let's move on to the history of Pindo Duo, PDD, and, and Timo and how we got here. So 2015, Colin Wang, who was working at Google, establishes Pinwheel.
Speaker 2:And and let's give a little bit more backstory because he wasn't working at Google. He he went to college in The US Yep. Joins Google the year that they IPO.
Speaker 1:Yep.
Speaker 2:So he he he literally joins at at an incredible time, probably one of the the best the best pre IPO company probably to join in history. Incredible timing right out of school. And, and yeah. So he he benefits right away. He gets he basically immediately gets a a a bag from that, which ends up helping him start his entrepreneurial journey.
Speaker 1:Yeah.
Speaker 2:He then goes on to actually launch, launch Google in China. And so this was from you look back in my notes. From 02/2006 to 02/2010, his he's the lead on launching Google in China, and it absolutely goes terribly. It doesn't really get adoption. They're I'm sure they're fighting a lot of sort of, sort of regulatory stuff internally in China.
Speaker 2:China didn't want US tech products to get real market share in China. And so by the end, he basically in 2010, they just give up. Google pulls out of China, and he, and and and so in many ways, I'm sure he did well, personally from that, but it wasn't exactly a huge win. But it did give him, you know, I'm sure high quality experience in terms of building the most scaled consumer products, you know, of all time.
Speaker 1:I mean, the guy seems like a great engineer, master networker. Somebody said, you you know that Jeremy Giffon tweet that's like, if you're you can basically post your way onto a private plane if you're a good poster. Like, the most elite in the society, like, the absolute aristocracy will just pluck you out of obscurity. And it seems like that's what happened. He he was posting something or or or cold emailing or something and gets linked up to the effectively the Warren Buffett of China, and that guy becomes his mentor.
Speaker 1:And then Yeah. And then that guy pays, like, 250 k to have dinner with the actual Warren Buffett. And so there's a picture of Colin, this, Warren Buffett design.
Speaker 2:Colin brings Colin, the the team new founder
Speaker 1:Yeah.
Speaker 2:To this dinner.
Speaker 1:Yeah. And so and so very quickly, Colin is, moved out of, you know, rank and file at Google, obviously early, obviously doing very well, but it's a huge organization. He he's not really gonna be able to steer that that giant cruise ship to networking with both the Warren Buffett of America and the Warren Buffett of China. And, and that sets himself up just to immediately raise tons of money and just do, you know, amazing things.
Speaker 2:Yeah. And so around this time, he had built this is prior to actually incorporating PDD in in 2015. He had built, he had built some mobile shopping apps. So his time at Google had got him excited about shopping. He did alright from those.
Speaker 2:He had a couple exits, and then he starts a gaming studio, which is sort of foreshadowing for all the gamification of of Timu and PDD that comes later. And the gaming studio is just throwing out absolute slop too. So if you ever remember being a kid and getting ads for, like, mafia city, that was a game that his game studio created, which was, like, an early version of one of these games that was meant to be highly addictive that you were meant to come in. A lot of people would just come in and pay play for free briefly, and then they'd get certain whales that would end up spending a ton of money. And he also had some less, less, savory apps on there where you could build a harem of girlfriends that you could then go around and fight other people with.
Speaker 2:So you could build it was like an app that you'd build your harem, and then you'd you'd take them out and go on the attack. So, Colin Colin's an absolute dog for that one.
Speaker 1:Oh, yeah.
Speaker 2:And And, but I'm sure he found some some users. And that that company ended up getting acquired and then changed hands a couple times. And mafia city is actually still a game that you can download in the App Store and and use. Yep. So go check it out.
Speaker 1:Yeah. Everything about this story is just unbelievable evidence that Colin plays hard nose, smash mouth football on the business grid iron.
Speaker 2:And He's the he's the Saquon Barkley of business in China.
Speaker 1:One Hundred Percent. And you don't become the richest man in China even for a small amount of time without being absolutely the most aggressive you can be and just maxing out every single loophole. There there's a whole bunch of things in here about, about, like, importing, like, gambling style mechanics and gamification and and, financialization. And it's just like, let's do all of the most extreme business practices. What what's the tariff loophole?
Speaker 1:How low quality can we go on the goods? Let's add gambling and and and, pay buy now, pay later. It's just Let's apply the extreme, like, dynamics to absolutely squeeze out every penny of performance from the business.
Speaker 2:Yeah.
Speaker 1:So let's go through the timeline here. We'll we'll we'll focus just on PDD. So, former Google engineer Colin Wang, establishes Pin Duo Duo in Shanghai as a social ecommerce platform focused on agriculture and group buying deals. Early angel funding of approximately $8,000,000 is provided by Wang and other investors. And so, the the idea here was you you if you're in China and you're in, like, the middle or lower class, you wanna buy a whole bunch of mangoes, they would focus on just, hey.
Speaker 1:You're gonna buy 12 mangoes. Two of them might be rotten, but it's gonna be so cheap that we're mostly not gonna invest in quality control at all. And Yeah. Also, they're they're bringing in this, like, social mechanic where group buying, basically, you you click on the item you want, and then and then you send that link to everyone else in your social network on WeChat. And the more people that buy, the lower price the the the lower the price goes.
Speaker 1:And this makes sense. I mean, in America, there's plenty of times where you buy one T shirt, it's $30. You buy 10 T shirts, it's $20. If you're buying a thousand T shirts, you can get the price down to $10.
Speaker 2:Yeah.
Speaker 1:But it's like, what if you could do this for anything on Amazon immediately just with your social network? And that creates insane growth. It's like this insane viral growth mechanism.
Speaker 2:Shopping has historically and in the West, it still is primarily the single player experience. You go on, you buy the product. He turned it into this multiplayer experience that had this crazy viral loop of just building out these networks where one person wants mangoes and suddenly 20 people are buying mangoes. And one thing that, one thing that they did, you can think of what PDD early on is is similar to what Amazon did with books. Amazon picked books for very specific reasons.
Speaker 2:They onboarded sellers, which were bookstores and individuals that had books they wanted to sell. And what PDD did was was, you know, at the time in China, there were ton super the sort sort of agricultural production in China was super fragmented. And so you had tons of individuals and small farms that would be producing goods, and they had to sell through distributors, which would then go into actual, like, retail stores and other markets that you could purchase them. And what PDD did was similar to Amazon where they said, hey. Why don't you just come on and list your product for sale, and we'll find you the customers.
Speaker 2:And you're gonna make more money than you would if you were selling through this distributor, and and they were basically, like, cutting out the historical middleman that was there was two middlemen, basically. There was the distributor, the sort of rep, and then the actual retail store. And so PDD took over both those roles in terms of bridging, the farmers and producers and the end consumer.
Speaker 1:Yep. The
Speaker 2:other thing that PDD benefited from is that, there was, mobile devices had penetrated into the agricultural regions of China, and so farmers would start selling their products on social media using, like, videos. And I remember during this time, some of these videos would start going viral. It'd be like Yeah. You'd be scrolling, and you just it'd just be some guys, like, I you know, like, showing his man goes off or whatever. He'd be like, alright.
Speaker 2:I'm at the wrong wrong side of the Internet. Mhmm. But, but, anyway, so this was, like, basically benefiting from social commerce, the influencer explosion, the explosion of of, you know, mobile device usage all across China, not just in, in cities. And so the timing here, he really, you know, benefited from.
Speaker 1:Yeah. Yeah. It's fantastic, like, product led growth innovation, like, a lot of trends coming together and just wedging more and more things and then just, like, rolling them out in the app super, super fast. Like, when when there's an exploit, he capitalizes, and that's Yeah. And that's what's fueled the growth so quickly.
Speaker 2:And another thing they did, they they basically sold the product at cost, and so they've raised $8,000,000 to get this thing off the ground. And they were fine if they didn't make any money on the on the direct sale. They just wanted market share.
Speaker 1:Yep.
Speaker 2:And they also took a more sort of asset light approach than some of the other players that actually owned logistics. They owned warehouses and stuff like that. And so PDD was was fully focused on, like, enabling the sort of direct to consumer model where, you know, producer would put would list product on the platform. They had their own social presence. They had these group buying experiences, but then third party logistics and warehouses would actually do all of the fulfillment.
Speaker 2:And so PDD could afford to basically sell products at cost without taking massive, massive losses that, for example, Amazon had to take, you know, really aggressive losses for for quite a long time.
Speaker 1:Yeah. I mean, the the the Amazon versus Timu or PDD comparison is crazy. Take a look at this. So, you can think about Amazon right now versus PDD. Amazon's almost 20 times the size.
Speaker 1:But in terms of net income in 2023, Amazon produced 30,000,000,000. PDD produced 8 and a half billion. And so the margins are just the net profit margins at at Amazon five percent versus 25%. And and a lot of that comes down to just super asset like
Speaker 2:looks more like a software business, and Amazon looks more like a grocery store. Right? From a margin profile standpoint.
Speaker 1:Totally. Yeah. And and massive revenue growth. Interestingly, I wanted to answer the question of, like, is Timu actually putting pressure on Amazon? Has there been, like, a market change in Amazon's business because of the Timu threat?
Speaker 1:And what's interesting is that, like, I found, like, 95%, ninety eight % of Timu shoppers also shop on Amazon. The Timu like, the slop that they're buying is actually additive. It's more like gambling money than actually shopping money. Because if you want just, you know, if you're actually in the market for, like, I want Kleenex and I want it to be good and not fall apart and give, like, give me allergies or something, like, you're gonna go to Amazon by the name brand, and you can count on that. But if you just want, like, oh, yeah.
Speaker 1:Some random thing that's like a funny joke, like, yeah. I'll I'll buy that on Timo.
Speaker 2:Yeah. I my biggest frustration with Amazon is I wish that I could shop on Amazon by sorting only for brands that have existed for more than Oh, that's good.
Speaker 1:Lindy filter. The Lindy filter.
Speaker 2:Be because one of my yeah. The greatest annoyance on Amazon is, like, I'm shopping, and I want something as simple as, like, a paper towel holder. Yeah. And then I order it, and I get it, and it's, like, the worst product that I've ever gotten. Like, this should just be a piece of metal into another piece of metal, and it just should be solid.
Speaker 2:Yeah. And because of the hyper optimizations and all these sellers competing and things like that, you end up having to dig through page you might it might take you four pages to find a product that costs marginally more, but it's gonna last for twenty years versus, you know, the Timoo version, which will last for a year and not even function well.
Speaker 1:Dude, so so Amazon has has been forced to launch Amazon Hall, which is their Timoo competitor, and they have price caps for items that you list on Amazon haul because they wanna be competitive. And the price caps are shocking. Like, $13 is the max price you can charge for a guitar. I think of a guitar as like a several hundred dollar purchase, at least couches, couches. I think of a couches like, you know, to get in the game, it's like a thousand dollars.
Speaker 1:Maybe you go to Ikea a couple hundred bucks. The max price for a couch at Amazon hall is $20. 20 dollars. That's just, like, scarily low. I don't wanna sit on a couch that's only $20.
Speaker 1:I know that there's people that are running Airbnbs right now that are like, this is amazing for my margins. Like, I gotta just buy this $20 couch. But it's like, at that at that price, it's like it feels dangerous. Like, how can you possibly make a couch for $20? Like, you're not even using wood at that point.
Speaker 1:Like, what are you making it out of?
Speaker 2:And the the dark side of this story is that many people have accused PDD and Timo of using slave labor. So if you strip out all the labor costs
Speaker 1:Yep.
Speaker 2:Even then, it's still hard to kind of conceptualize how the actual material cost would be less than $20 for something as significant as a couch or a guitar being, you know, $13. So, anyways, let's get back into the timeline.
Speaker 1:Yeah. So they raise, they they raise a bunch of money really, really quickly. They incorporate in 2015 with that $8,000,000 round. Twenty sixteen, they raised series a, series b, hundred and 10,000,000. Gowron Capital, formerly Banyan, does the seed stake.
Speaker 1:They get a 7% stake. Now it's worth 10,000,000,000. Nice. Tencent Holdings comes in and becomes a strategic investor. They get a 16% stake.
Speaker 1:That's $20,000,000,000. Sequoia Capital China gets a 6% stake pre 2022 multibillion dollar value. Yeah. And then there's a couple other, founders and early executives. Yeah.
Speaker 1:And one one thing hundreds of millions of dollars.
Speaker 2:You already know from listening to this, but, like, this guy didn't come out of nowhere. He was went to college in The US. Yep. Goes and works at Google, actually leads an entire, you know, go to market into China while at Google. Then as a couple smaller successes in mobile shopping, then launches a successful mobile game studio.
Speaker 2:And so by the time he's doing PDD, he is very well set up to take on this much capital in this short of a time because he's a savage operator. Right?
Speaker 1:Savage. And
Speaker 2:and the actual performance really backs it up. And so they're raising all this money, but it's on the back of just taking a ton of market share with a product that was very early for its time. Right? We didn't see you remember in 2021, '20 '20 '2, every western VC was talking about social commerce and live streaming and all these things. Yep.
Speaker 2:All of that was because the PDD was just dominating in China.
Speaker 1:Yep.
Speaker 2:And they didn't really it's not that live streaming with with t, Tay it's Taymoo. Right?
Speaker 1:That would be the respectful way to call it. I I call it Timu.
Speaker 2:Timu. We'll stick with Timu.
Speaker 1:Who knows?
Speaker 2:Your disrespect. What's crazy is I was actually so I was in, I was living in China, like, during this era, in 2016, and I was working at a startup accelerator that was and helping a company that was taking, a bunch of international vendors, specifically in shopping and and sort of luxury goods and trying to sell into China. Yep. And, they had raised some funding. It it was fine, but, the the CEO and the c a CTO and the COO were were based in Israel, and they absolutely hated living in China.
Speaker 2:And their entire business was based around China. So they would come in for, like, two weeks and then, like, bounce.
Speaker 1:Yeah. And I
Speaker 2:was like, guys, like, this is
Speaker 1:I'm sustainable.
Speaker 2:I was just an intern, but I was like, yeah. This is if you shouldn't probably hate the country that you're trying to sell into.
Speaker 1:Yeah.
Speaker 2:But, but, anyways, meanwhile, Timo is just focused, you know, just absolutely dominating.
Speaker 1:Yeah. They're just ripping. So, established in September 2015, they've raised over a hundred million dollars by 2016. Series c comes in early twenty seventeen, less than a year and a half. They they raised, 213,000,000 in a series c round.
Speaker 1:And by late twenty seventeen, their gross merchandise volume, their GMV reaches $15,000,000,000 just two years after launch. And so even with super slim margins, they're well over a hundred million in ARR, and this is one of the fastest growing companies and businesses in history. And and, of course, that's gonna rock at the stock. So they do a pre IPO funding in April of twenty eighteen. They raised $1,200,000,000 series d, led by major investors.
Speaker 1:They're valued around 15 to $20,000,000,000. And then 07/26/2018, they go public on the Nasdaq raising 1,600,000,000. The IPO values the company at $24,000,000,000 and marks its rise to over 340,000,000 active buyers in under three years. But then things get tricky. There's a counterfeit crackdown shortly after the IPO.
Speaker 1:PDD faces scrutiny over counterfeit and pirated goods. So you just go on there and and you get it's going some complete knockoff that was just made in a fake factory that wasn't actually made by that company. Of course, companies are gonna be upset. At one point, Amazon Amazon has a price match, like service where if you are selling on Amazon and then you and then you open you go over to Walmart and you undercut Amazon, Amazon will not give you the buy box. They won't let you win the top slot if you're not price matching on Amazon.
Speaker 1:But Temu or Temu was so aggressive and so sloppy that they couldn't they couldn't basically implement this process, and they were like, look. We're not even gonna enforce it with Temu Temu products because it's just it's just slop. It's not even close. And so a lot of stuff was just just absolute junk, and that was kind of the model. And, also, everyone kinda knew that.
Speaker 2:Those products were widely available when I was in Shanghai. You could go to there were specific markets that where they would have retail stores. It'd be like the Nike store, the Adidas store, the Canada Goose store, and everything in them was
Speaker 1:Fake.
Speaker 2:95% less than, like, the traditional retail value. Yeah. And about 60% is good.
Speaker 1:Yep.
Speaker 2:But the demand you can imagine for sort of name brands that are 95% off effectively Yep. It's insane. So they're just
Speaker 1:And so the super funny thing here is that it's not just American companies versus Chinese co versus PDD in China. There's actually Chinese companies that are like, hey. We're Foxconn. We make iPhones for Apple. Like, don't make fake iPhones here.
Speaker 1:Like, like, this is this is screwing us, and we're a Chinese company. And so, Chinese companies are accusing PDD of counterfeiting and pirating goods that they're making and selling on Amazon. And so, there's an investigation by China's market regulator, and this leads PDD to purge 4,300,000 suspect listings and tighten its policies. But, of course, like, how long would that last? And so in January of twenty nineteen, there's the security incident where hackers, exploit systems, a a systems loophole to steal tens of millions of yuan and discount vouchers.
Speaker 1:This always happens whenever there's, like, some referral program or some discount program. I remember there was some guy on Twitter who's bragging about basically defrauding Uber Eats with, like, all these referral tokens, just getting, people on Mechanical Turk to sign up and get him money. And he was like, I have free Uber Eats forever. And I was like, you shouldn't publish about this. This is a violation of
Speaker 2:this wrong. I'll say just wrong.
Speaker 1:It's also just morally wrong to steal. Yeah. Like, how have we gotten so lost here? And so PDD cooperates with authorities to apprehend the perpetrators and patch its systems. They continue to expand their markets in 2019.
Speaker 1:The gamified team purchase model drives explosive growth, marking making p d PDDs China's Third largest ecommerce site by GMV and active buy buyers. So it's Alibaba and then JD.com, which I don't think is related to JD Vance, but, it's certainly a big beast over there. By the end of the year, the platform approaches over 500,000,000 active buyers, so they are on a tear. Then early twenty twenty, the agriculture focus and COVID response among amid the pandemic, PD doubles down on its agricultural roots by launching programs to help rural farmers sell produce online. This is huge because China had insane lockdowns.
Speaker 1:Everyone is ordering online more than ever, especially produce, especially groceries. People need to get food more than anything else, and so it's another ex explosive growth period for PDD. They just can't miss. Then in 2020, Colin Wang steps down as CEO, appointing Chen Li as the new chief executive while remaining chairman to focus on long term strategy and research. And I think there's something going on where the pressure is starting to build.
Speaker 1:PD is becoming a more controversial company. And Colin's like, yeah. I'm gonna dip before I get Jack Maude. You know? Because, like yeah.
Speaker 1:When when when when you when you scrape the heavens in in China and and you become the richest man, you get a little bit of a target on your back. So you you gotta just, pivot into, you know, teaching English somewhere and and resting on your laurels.
Speaker 2:Little bit. Little bit. It's a dangerous dangerous position.
Speaker 1:It's a dangerous game over there. You become the richest man. You don't exactly get to be the right hand man of the person who runs the country. Unfortunately. Yeah.
Speaker 1:America's just built different, you know?
Speaker 2:Yeah.
Speaker 1:Over here you get a, you get a dot gov email address.
Speaker 2:Yes.
Speaker 1:And so economic challenges in late twenty twenty drive more consumers to pin to PDD for affordable essentials with annual active buyers reaching 585,000,000 by year end.
Speaker 2:Yeah. And they have this they have this interesting demand dynamic where if the economy is doing well, then people have, like, a bunch of extra cash that they're willing to just blow on basically
Speaker 1:Slop.
Speaker 2:TDDs, like slop, you know, gambling on consumer goods. Hey. I'm buying this product for $3. Maybe it's
Speaker 1:Maybe it's good.
Speaker 2:Maybe it it's actually fine.
Speaker 1:Yep. You
Speaker 2:don't know. And then simultaneously, if the economy is not doing well, there's also an increased demand because people are saying, I don't wanna, you know, be like saying, I don't wanna go shop at Target. I'm gonna go to this, like, discount store and and because I can spend $50 and get a lot more for my money. So same dynamic as somebody might be saying, I'm not gonna go on Alibaba or or some or the Chinese, you know, target equivalent. I'm gonna go on PDD and just and get more for my money.
Speaker 1:Yeah. And so in January 2021, there's this work culture controversy. This is terrifying and very sad. The deaths of two employees within a short span sparked public outcry over the brutal nine nine six overtime culture in China's tech industry. And I believe someone affiliated with the company made some callous comment being like, yeah.
Speaker 1:Like, we work hard. People are gonna die, which is obviously way too far, way over the line. And, and and the founder eventually steps down. Colin Wang resigns as chairman and leaves the board to pursue research in food and life sciences, while CEO Chen Li or Lei, assumes the chairman role after Wang relinquishes superpowers.
Speaker 2:That's the that's the Chinese equivalent of I'm gonna go spend time, you know, long everyday time with my family is I'm gonna suit research and life sciences.
Speaker 1:Yeah. It is it is crazy to work people to death. That's unacceptable and something that only happens in China, unfortunately. I
Speaker 2:mean, that's not that's not true. We just had that we just had that issue. I forget which bank. It wasn't True.
Speaker 1:Yeah. I did see that.
Speaker 2:Jeffrey, and it wasn't Jeffrey's.
Speaker 1:No. I've been seeing that.
Speaker 2:But, no, there there was, you know, a
Speaker 1:Investment banker.
Speaker 2:A young investment banker that was being worked, you know, basically twenty hours a day for a long period of time and was telling his friends, like, that he wasn't doing well and then just died from basically overworking. And, anyways yeah. And in in that case, the investment bank had slides that said that we're basically promoting the fact that their associates were available around the clock. Yeah. And so that that again, it's not it's not just a China thing, but, but, yeah, work, it's possible to work too much.
Speaker 1:Yeah. I mean, it's like we always say, you gotta like Naval says, work like a lion. There are days when you should be working twenty hours a day, but if it's twenty hours a day for years straight with no days off, you're gonna burn out. That's not good. You get ready
Speaker 2:Four weeks in a row. Right? That's not sustainable at a certain point.
Speaker 1:Sprints here and there, super important.
Speaker 2:We are working up to we are working up to a 40 of content a week, though. Yes. Our goal is to get there. So thank you thank you everybody for your patience for trying to just ramp up to it.
Speaker 1:Yeah. And so in, May of twenty twenty one, Shanghai's consumer council criticized pin PDD for issuing fake products, false advertising, and poor after sales service. Regulators order the company to rectify consumer rights problems, prompting PDD to pledge stronger merchant oversight. In late August of twenty twenty one, PDD posted its first ever profitable quarter. So from 2015 to 2021, just six years now, they're profitable.
Speaker 1:2,000,000,000 yuan operating profit and an 89% year on year revenue jump. So they're still basically doubling six years into the business. Just fantastic growth. Instead of taking the profits as cash, the company announces a $10,000,000,000, 10,000,000,000 yuan agriculture initiative to reinvest in agritech, farmer support, and rural development. And so in 2022
Speaker 2:Yeah. Because one thing that that might sound strange to some people, but we think of of of of Timu as just like slop consumer goods. In China, people are still using it very actively to buy produce and things like that. So they're invest they wanna invest in the actual agriculture industry in China because PDDs, China business specifically, is have is is a grocery store alternative. It's not just these, you know, ultra low cost consumer goods.
Speaker 1:Yeah. And so they're continuing to grow. The platform, is now handling 4,900,000,000,000.0 yuan, about 590,000,000,000 in GMV, in January in generating annual revenue of roughly 14,700,000,000.0 US dollars, solidifying its profitability. And with all this money, they come to The United States and they launch Timu. The parent company now, PDD Holdings, launches Timoo a discount shopping app targeting overseas markets because it's specifically taking advantage of that tariff loophole.
Speaker 1:Timoo goes live in The United States offering ultra low priced goods shipped directly from China and quickly climbs the download charts. And I think this is so interesting because it like, we I've been in ecommerce for, you know, fifteen years or something now. And, and and the and the the the the wisdom has always been, you gotta get on prime. You gotta be faster with shipping. Everyone cares about page load speed and shipping time, and Americans are willing to pay for that.
Speaker 1:And Colin just realized that there is a contrarian position here, which is Yeah. Hey. Maybe there's certain products and certain segments of the American market where people are more than happy to trade fast shipping for Yep. Lower prices. And so no one is really looking to
Speaker 2:a value it comes down to a value exchange thing. I'm happy to pay slightly more
Speaker 1:Yep.
Speaker 2:To get a product tomorrow with zero effort on my side. Yep. And then on the other end, there's people that are happy to wait a week to get something if they're gonna get 10 items for the cost of two items. Right? Exactly.
Speaker 2:So it's just a value exchange thing.
Speaker 1:Yeah. Yeah. But it was really, really overlooked in the ecommerce market. And so, with the launch of Timu, the company reorganizes under PDD Holdings, a new holding structure encompassing both PDD and Timu. In December, Bash fashion rival Sheen initiates legal action against, Timu, marking the start of a high profile legal tussle.
Speaker 1:And I didn't know this. Do you know where the name Sheen comes from? It's she in, and it's like she's in.
Speaker 2:She's in.
Speaker 1:Yeah. Like like like, she's in.
Speaker 2:They were they were sitting in Shanghai being like, yeah. We got the name. This is the name. This is so cool. And this also by the way, just to reference an earlier point.
Speaker 2:So this is around this is, like, right around the time that they they launched the Super Bowl ad that we mentioned yesterday. And I do remember the not yesterday. Sorry. Earlier in the show. I do remember when that ad dropped, and I remember seeing it live thinking to myself, this is the worst ad I've ever seen.
Speaker 2:It's, like, very it's not westernized at all. This is obviously a western audience. It has this tagline that says shop like a billionaire, which felt felt super out of touch.
Speaker 1:Yep.
Speaker 2:But, ultimately, I wasn't the target audience for it. I've never purchased anything on on Timu. And, and if you think about that that that concept of shop like a billionaire, some people are thinking, okay. Billionaires are just buying, like, you know, infinite amount of goods at all points and and not caring about the price. And that is the experience that they provide.
Speaker 2:Right? You can go on there and buy 30 items, and it'll cost you, you know, the same price as, I don't know, a small, like, grocery.
Speaker 1:You know? The funny thing is if you ever go over to billionaire's house, like, it's always, like, the most sparsely populated house. Like, it's not just junk everywhere. Like
Speaker 2:Yeah. It's because their items are spread across, like, at least five homes.
Speaker 1:I guess. But even then, it's like, you know, most most super rich people are pretty pretty discerning with, like, do I really need another KitchenAid? No. Like No.
Speaker 2:It's it's the Kanye. It's the Kanye thing of, of Yeah. I was sleeping on the plane and I woke up next to this water bottle and it's like, great. Now I have to look after this water bottle.
Speaker 1:Do with this water bottle? Exactly. Exactly. Yeah. And and and and and really it's like, we talked about this before, but like the thing with the billionaires is like, when you're, when you're like middle class, like you have an item and you do it yourself, like you cook for yourself.
Speaker 1:When you're become a little bit wealthier, you have an app that, you know, DoorDash brings you the food. And when you're a billionaire, you have a guy, and it's your chef. And so, you know, a billionaire does not buy any kitchen cook cooking equipment ever because the cook handles that. And they don't even think about any of those items. And there's that for every single item in their life.
Speaker 2:You have a personal shopper who brings you 50 items. You try them on. You keep seven of them.
Speaker 1:You know my size. Just make sure that there's clothes in my, in my closet, in every house. Yeah. And that's the lifestyle. And so, did you see the SNL spoof of the Super Bowl ad?
Speaker 1:We gotta stay on the Super Bowl ad because, one interesting fact is, that Super Bowl ad was not shot for the Super Bowl. That was the ad that they had been promoting on YouTube to millions of people. That ad before it aired on the Super Bowl Yeah. Had millions of ads. So in one way, like, they'd kind of AB tested it and knew that that ad worked.
Speaker 1:But at the other way, it's like super it's still just super lean culture. They're like, oh, yeah. We do Super Bowl slot. We're paying millions of dollars. Like, we don't need to shoot something special for this or get a celebrity.
Speaker 1:Let's just run the the ad that we've been posting on Facebook for the last, like like Yeah.
Speaker 2:In many ways, it's very counter to the approach again, that that many many of their competitors which would take, which is, hey. Amazon is gonna spend is probably planning their 2027 Super Bowl ad Yep. Now. Yep. And it's this multiyear thing, and they wanna try to win awards.
Speaker 2:And Timo is just like, shop like a billionaire, baby.
Speaker 1:Yep. Yep.
Speaker 2:Yep. Yep. Like a billionaire.
Speaker 1:Budweiser is going to shoot a new Clydesdale ad, probably three of them for this for for this Super Bowl. And it's gonna tell a story, and it's gonna be heritage, and it's gonna be very cinematic. And Timo is just like, yeah. Yeah. Like, what's working on, Google right now?
Speaker 1:Oh, okay. Like, just just throw that. Oh, it's new in the new ad slot? Throw it up. Yeah.
Speaker 1:No problem. Again, kind of beautiful. I don't know. I think it kinda worked for them. I bet they got good ROI on that.
Speaker 1:Yeah. But the, the the SNL spoof is hilarious. They they call it, sh, it's like some some portmanteau between Timu and Sheehan. It's like it's like Shimu or something like that.
Speaker 2:Shimu. Yeah. Yeah.
Speaker 1:And and and it's like dress, $10, shoes, $5, working conditions, fine. Don't ask about it. And they're just like, how is it so cheap? And it's like, now with no lead. And they're like, that makes me feel like there might be lead in here.
Speaker 1:Like, the whole idea of, like, suspiciously low prices is so funny to me. I just can't get enough of it. It's like Yeah.
Speaker 2:At a
Speaker 1:certain at a certain point, like, $20 couch raises more questions than it answers.
Speaker 2:Yeah. And and to be honest, there's a very real scenario where Colin realized that he was gonna be the fall guy for China would say, actually, there's so much evidence that China uses slave labor and they have labor camps and and Yeah. You know, it's very dark. But Colin would have been the perfect guy to pin it all on for the CCP to be like, oh, yeah. Actually, this was happening.
Speaker 2:And, like, here's the guy. He was the guy selling you all these cheap products, and, like, it was on him. Yep. Even if they had fully endorsed it. And so I think, yeah, he he so far, it seems like he properly avoided being Jack Maude, but, I haven't seen him on any podcast lately.
Speaker 2:So, you know
Speaker 1:Let's get him on twenty minute VC.
Speaker 2:Colin. Colin, come on x. Go on 20 VC.
Speaker 1:Let's do it.
Speaker 2:I'll have you on the show.
Speaker 1:Yeah. Yeah. We'll we'll get to the bottom.
Speaker 2:Be a little contentious, but
Speaker 1:So they they so they launch in September of twenty twenty two. By February of twenty twenty three, '6 '6 months later, Super Bowl ad, number one shopping app in the in The US, massive growth. They expand their market presence. They launch in Canada, Australia, and New Zealand in March. Then they launch in all of Europe, and, they also relocate their, their headquarters, I think, to to Dublin, Ireland.
Speaker 1:And then in March of twenty twenty three, shortly after the Super Bowl ad, they get suspended from the Google Play Store due to malware found in off store versions. Although Temu is unaffected, the incident raises security concerns, and the app is later reinstalled after reinstated after necessary fixes. And so they were they were doing some sort of exploit with, like, you know, the APIs and the app, and, everyone's like, man, these guys are playing dirty. They're using
Speaker 2:Yeah. I mean, like, across the board. Across the board, this is a company that undoubtedly does not care about anything other than flooding the market, gaining market share, and growing. Right? Of course, many American companies at the end of the day are like that too, but they're a little bit less blatant about this.
Speaker 2:Like, the entire history of PDD and Timu is issues around counterfeiting, supply chain practices, labor practices, data privacy. Like, this is a company that probably is battling, like, a thousand to to 10,000 lawsuits at once continuously. So, while they they're not making US ad agencies, money on Super Bowl ads, I'm sure their legal bills back home are are steep. And I'm sure they're good I'm sure they're a good client to some US law firms that have to
Speaker 1:Again, they're fighting other Chinese companies. So Timu and Sheen are in a legal battle in July of twenty twenty three. Timu filed an antitrust lawsuit in The US accusing Sheen of market abuse while Sheen secures a temporary restraining order against Timu over alleged, copyright infringements. Legal actions to sue
Speaker 2:This is sue across multiple jurisdictions.
Speaker 1:What do what do they call it?
Speaker 2:Call this? Slop on slop violence.
Speaker 1:Slop on slop violence. I love it. And it's so funny because
Speaker 2:The great
Speaker 1:Yeah.
Speaker 2:The great slop wars of the twenty twenties.
Speaker 1:The great slop wars. It it it's so funny to me because, like, even though, like, we are looking at this through a business context, through geopolitical lens, And, obviously, we have we we have to take that, you know, that this is exploitative, and there's a loophole. It's destroying American businesses, etcetera. But there are tens of millions of Americans that where to them, Timu is just, oh, cool. I get stuff for cheap.
Speaker 1:Like, I like it. And, no. I don't run a competitive company. I don't I don't have an ecommerce business, so it doesn't affect me. And the number of people, the number of constituents in the American democracy that are being negatively affected by Timu is in in absolute terms much lower.
Speaker 1:Because if you're like, the number of people that are competing and getting their lunch ate by TMU is probably a million ecommerce people that work in ecommerce or, you know, drop shipping or something like that. Yeah. But the number of people that benefit is in the tens of millions. And so it it is the same kind of, like, popular thing.
Speaker 2:I gotta I gotta push back there
Speaker 1:because it's
Speaker 2:it is more complicated than that. If somebody, you know, is shopping for they they decide, hey. I want a water filter, and they they look at at they go aurora.com. They're like, this looks great. They've got all the certifications.
Speaker 2:And then, they look on Timu, and they see, you know, a similar water filter. Maybe it works, maybe it doesn't, but it's it's 90% less, and then they buy that.
Speaker 1:Yeah.
Speaker 2:That is dollars that could have gone to an American company that supports, you know, a bunch of other American businesses and manufacturers. It supports, you know, a a team here in The US. And so it is very complicated, and so we have no idea how many billions of dollars of Timo's GMV would have just gone to America. You know? It would have bought less products.
Speaker 1:I completely agree. It has
Speaker 2:a bunch of downstream effects.
Speaker 1:Yeah. I completely agree. I'm I'm I'm merely making the statement that that for a lot of Americans, they are addicted to consumerism. They're addicted to shopping, and and they don't think about the second and third order effects of, hey. Yeah.
Speaker 1:If I'm if I'm really supporting this app and buying yeah. Yes. I mean, I am getting these really cheap products, but maybe it'll make it harder for me to find a job. Or maybe my town will be hollowed out because they're because the bit the just the economy is not there anymore in The US because we're just purely an import based society. So I think I think that's the backbone of the tariff renegotiation.
Speaker 1:Is is this a fair deal for America?
Speaker 2:Yeah.
Speaker 1:What were you saying?
Speaker 2:I was gonna say, well, if we eliminate Timo and Sheen and we just get every American addicted to buying cheap stocks
Speaker 1:There we go.
Speaker 2:Add the potential there.
Speaker 1:Massive. Massive.
Speaker 2:Buying early. Yeah. Awesome.
Speaker 1:And so in 2024, they're in 50 countries in sixteen months. On January 17, Timu, officially launches in South Africa, marking its forty ninth country since debuting in The US. Its footprint now expands over North America, Europe, Asia, Oceania, and parts of Latin America and The Middle East. So they are willing to ship anywhere, and it and the reason they can do this is because it's so asset light. They all they need to do is just allow they're just a software platform that allows factories in China to ship as as soon as they can get those packages to the ports.
Speaker 1:They can really go anywhere. So they just need to localize the website, and they're good. It's not like Amazon where they have to set up a local distribution center, hire local drivers. There's there's really nothing, and and it's it's, you know, it's not really building up the local economies. It's actually hollowing it out.
Speaker 1:And so in February of twenty twenty four, they do another Super Bowl, and they hit user records again. They offer $15,000,000 of giveaways at the Super Bowl. And early in 2024, the platform announces it has surpassed a hundred million active users in The United States and over a 30,000,000 app downloads globally. So, yeah, a hundred million people in The US have shopped on Timu, and that is a big constituency. What I'm what I'm getting at is, like, it's similar to TikTok where the number of people that are negatively affected by TikTok are the people that are thinking about, you know, security, cybersecurity, geopolitics, thinking about, dynamic competitive dynamics with American companies.
Speaker 1:But there are still a hundred million people that are just like, TikTok is where I go for entertainment. Don't turn off my TV channel. And so Yeah. It is this complicated, there is a constituency there. They're not highly politically active.
Speaker 1:They don't donate to politics in that way. But, if you just if you just pull the American people, should you ban Timu? A lot of people would say, no. I like I like cheap stuff. It's fine.
Speaker 1:It's where I spin a wheel and get free stuff. Like, why are you banning my fun thing? And that's why
Speaker 2:It's it's in the same way that PumpFun is a is a digital casino. Yep. You could see, you know, PDD or T Mo is like a carnival, right, where it's just like, oh, I'm spinning the wheel. I'm winning. It's entertainment.
Speaker 2:It's social. It's you know?
Speaker 1:Yep. Nice. And so, the company refines its logistics model to manage scale while PDD Holdings faces increased regulatory scrutiny over counterfeiting supply chain practices and data privacy, and the legal battles between Temu and Shien have continued into 2024. Today, in less than a decade, PDD's parent company has become a global ecommerce powerhouse, which includes pin Pindo Adoro in China and Timu abroad reported $34,700,000,000 in revenue and 8,500,000,000.0 in net income in 2023. I'm sure it's higher in 2024.
Speaker 1:I don't know if they've done earnings yet, though. PDD remains one of China's top online shopping destinations with over 800,000,000 users. That is staggering. That's what? It's a billion person country.
Speaker 1:So, that's like massive pet market penetration. While Tmoo's low prices and viral marketing have captured significant international market share, the company continues to navigate rapid growth, fierce competition, and regulatory challenges as it looks to the future. And so we will
Speaker 2:be staying on top of that with the interesting. Yeah. So they have the benefit of, so Timu at some point do you have the the specifics? But I believe they rolled back in Timu, which was independently listed into the main PDD Holdings. And so the original Timu that went public on the Nasdaq is now just a part of PDD Holdings.
Speaker 2:Correct?
Speaker 1:Yeah. That's right.
Speaker 2:And so the the benefit of that is, like, even under all this scrutiny, lawsuits, all this stuff, you're gonna be shocked. I'm on public right now. The stock the stock is up.
Speaker 1:How much is it up? Give me the data. Give me
Speaker 2:the public document. So they're sitting at a the PDD Holdings is sitting at a hundred and $11 right now. Wow. And it was in March of twenty twenty two. It was sitting at, like, $40 a share.
Speaker 2:So
Speaker 1:Yep.
Speaker 2:They've they're still, like, a juggernaut and have done tremendously well just, again, under fire from all of these lawsuits and things like that and and being but they're just steamrolling the market. And I think that's really, in many ways, because of that, you know, they truly are a software company. They're not a they're not a retail.
Speaker 1:100%. Let's go through, who got rich off of this. I think that's always an interesting question to ask. Obviously, the early team made a ton of money. There was an interesting transaction where the, where the, as in 2020, Colin Wang transferred $7,700,000,000 worth of shares to the partners, effectively giving slices of his fortune to the top lieutenants.
Speaker 1:I thought it was very interesting that he did that after the fact. Like, they'd already grown. Obviously, they had stock grants early on, but he was just like, I've made so much money. I'm just gonna hook up the board.
Speaker 2:He's either he's either an absolute, you know, brother of the week brother. Chinese brother of the week potential or Chinese brother. He or they were all gonna throw him under the bus so hard that they said, if you don't give me if you don't if you don't give us billions of dollars, like, you're gonna be the fall guy for all of this, and we're gonna, you know, drag you through the streets Yeah. Jack Ma style.
Speaker 1:Yeah. The dynamics over there are very, very hard to hard to get, get right. So, Garang Capital, former formerly Banyan Capital, was an early VC, investor. It's a Beijing based VC firm. They led the series a round, and Zheng Zhong, Gaorong's founding partner, first backed Colin by leading an $8,000,000 investment round when PDD was just an idea.
Speaker 1:This gave, them an 8% stake pre IPO. It was probably a a a higher round and then got diluted down a little bit. Tencent came in, and, they were able to leverage WeChat, as to fuel PED's growth. Tencent joined in the series b and later led a huge 1,400,000,000 series d in early twenty eighteen, and so they had 16% at IPO. Sequoia Capital China led by Neil Shen, they've since rebranded to, Hongshan.
Speaker 1:By the time of the IPO, Sequoia was principal shareholder even agreeing to purchase a hundred and 50,000,000 shares at IPO to support the listing. Sequoia's stake post IPO was on the order of seven six to 7%. In March of twenty twenty one, Sequoia Capital still held 6.4% of PDD, and so they are just printing over there. Sequoia Capital Sequoia China is really the Sequoia of China. You can't make it up.
Speaker 1:IDG IDG Capital is one of China's oldest VC firms. They were investors during the growth phase. They participated in the series c round. New Horizon Capital was a PE fund that went in the series b. And then Lightspeed China also got a bite of the series b, which was a hundred and 10,000,000.
Speaker 1:And there's a couple other investors here. So massive wealth creation event for Chinese VCs and American VCs that had Chinese arms at the time. So it's a very fascinating story.
Speaker 2:Yeah. Completely crazy story. Incredible ex execution. Yep. They will talk about the slop wars of the twenty twenties for, you know, decades to come.
Speaker 2:And, open invite, Colin. Come on the show anytime. We'll put you
Speaker 1:in the we'll
Speaker 2:put you in the truth zone a little bit on the data privacy, labor, supply chain, crises, things like that. But if you're ready for that
Speaker 1:Yeah. You
Speaker 2:wanna take some heat.
Speaker 1:Yeah. Come on. But we will also sing your praises for massive wealth creation. We'll pop a
Speaker 2:Wealth creation.
Speaker 1:On with you.
Speaker 2:We'll have the size Gong. It'll be mixed. It'll come out it'll come out positive.
Speaker 1:Yeah. Yeah. It won't be a puff piece. It'll be hard nose, but
Speaker 2:We will we will ask you about the.
Speaker 1:Yep. We got
Speaker 2:them now. Yeah. You
Speaker 1:We'll also ask you what kind of car you drive. And Yep. And what and what what And what
Speaker 2:kind of watch. Anything
Speaker 1:mansion you're building.
Speaker 2:And and, how many watches you bought on bezel.
Speaker 1:Yeah. It'll probably be, the the best interview you'll ever do. It'll be great. Come on. Well, let's move on to the timeline.
Speaker 1:Thanks everyone for sticking around for our Timu deep dive. We got another oh, we got a solid forty minutes of timeline today. This is great. Very excited. Let's kick it off with this post from restructuring day in the life of an investor at US sovereign wealth fund.
Speaker 1:Hate to admit it, but sometimes Wall Street Oasis has some hilarious content. Jordy, you threw this in the feed. Why'd you like it?
Speaker 2:Well, so backstory, they they they did an executive order to create a US Sovereign Wealth Fund. So Trump signed this, I think, a couple days ago at this point. A lot of people are speculating on what's gonna go in it. A lot of people, you know, a friend of this show, Jack Raines, said, we already have a sovereign wealth fund. It's called spy.
Speaker 2:Yep. But, but, anyways, I I I just thought this was hilarious, so I'll read it. So this is somebody who's an analyst in private credit. He says, at 7AM, I wake up in my Georgetown apartment to a text from my n MD. Need a deck on strategic lithium reserves by noon.
Speaker 2:Use the DOD template. I have no idea what that means, but I nod, sip my government subsidized coffee, and I get to work. By 08:30AM, I'm at my desk in the Eisenhower Executive Office Building surrounded by former golden guys who rebranded as patriotic investors. Our mandate, deploy 1,000,000,000,000 of taxpayer money into high priority national interest. In reality, we're LARPing his PE bros while writing checks to companies with more lobbyists than revenue.
Speaker 2:By 10AM, I have an IC meeting. The secretary of commerce dials in asking why we aren't buying up more farmland. Then he replies, sir, we already own 15% of I of Iowa. And then I get cut off there, but, We
Speaker 1:nod solemnly. America First. I'll I'll keep reading. Lunch is catered from the White House mess hall. I sit next to a guy from the Pentagon's AI readiness task force.
Speaker 1:He assures me that investing $500,000,000 into a surveillance drone startup run by a 24 year old Stanford dropout is critical for national security. I write synergies in my notes and take a bite of my taxpayer funded steak. By 3PM, we're structuring a bailout for a failing EV battery company. Treasury wants it to be alone, but the MD insists on pref equity with board seats. We're not just capital.
Speaker 1:We're strategic. Everyone nods, except for the one career bureaucrat who still thinks this is about fiscal responsibility. At 6PM, I'm working on a term sheet for an emergency lithium mining JV with some guys in Wyoming. The deal terms, equity upside, mineral rights, and a direct line to the Fed for liquidity. Somewhere, Larry Fink sheds a single tear of pride.
Speaker 1:By 9PM, the interns are arguing whether we should issue high yield bonds backed by military surplus. Someone jokes about tokenizing Social Security. Everyone laughs, but someone writes it down. At 11:30PM, I close my laptop and stare at the framed photo of Teddy Roosevelt in my office. I realize I'm no longer just a finance guy.
Speaker 1:I'm a statesman. This is the most prestigious exit. This is paradise. I
Speaker 2:love it. Paradise. Yeah. So, anyways, this would be applying you know, if tech is Doge, the sovereign wealth fund is gonna be all the all the PE brothers just just having a heyday. I think it's cool I think it's cool to think about.
Speaker 2:We'll see how it plays out. Obviously, the the BTC maxis say that the sovereign wealth fund should just be a trillion dollars of Bitcoin. And, I would wouldn't be surprised if that kind of stuff got in. But it is funny how these these if there was a sovereign wealth fund, I imagine that it would ultimately be Trump as playing Masa Yeah. Where people come and pitch him crazier and crazier, bigger and bigger ideas.
Speaker 2:And then Yep. Because that's what happens. In many ways, that's what happens in, if you're going to try to raise, you know, a billion dollars from from Saudi Arabia for some project, MBS will at that ticket price, MBS probably has to, like, verbally sign off on the deal. Right? Maybe he's not taking the pitch meeting, but, you know, these anytime you're raising money from what's effectively a kingdom, the king's gotta sign off, or he's got a guy who is, you know, responsible for making sure that they don't do anything silly.
Speaker 2:But then when you're playing with dollars of that size, you end up doing you know, he's jokes about giving a a 24 year old $500,000,000, but, you know, it's only, 50 basis points of the fund. You know, why not just, or no? Even even less
Speaker 1:if it's Yeah.
Speaker 2:Even less. Crazy.
Speaker 1:This is so funny to me because, like, the idea I I'm very pro the idea of a US sovereign wealth fund, but our country is in massive debt. Like, we don't have a surplus right now. We don't have money, like, to to put into a sovereign wealth fund, I think. Like, I don't know where it would come from. We need to pay down our debt first.
Speaker 1:Right?
Speaker 2:We're all good on leverage. So
Speaker 1:Yeah. I I don't know. All the rules have been thrown out. It's a new day. Anything is possible, but good to see some analysts having fun on Wall Street Oasis.
Speaker 1:Let's move on to Lulu. Lulu writes, a good slogan is critical for starting a movement. Make America great again. Yes. We can.
Speaker 1:Time to build. No taxation without representation. Keep calm and carry on. Move fast and break things. Just do it.
Speaker 1:Workers of the world unite. Think different. The best slogan is one that gets stuck in people's heads and represents one central idea. And this is quote to an Emmett, former CEO of Twitch. It says the way you influence large language models or a bunch of humans is not by writing persuasive prose, but by coining new words or phrases, which are useful and also make it easier to think certain thoughts over others.
Speaker 1:And, she actually tagged me in this. She said, this is Coogan's law. And I was super excited to see Coogan's law going viral on the timeline once again. I'm very I'm very proud of that coinage. I stand by it.
Speaker 1:I think it's extremely valuable. I need to coin some more. Jordy, give me your take on this, and then I'll I'll riff a little bit more.
Speaker 2:I don't have much more to add here. I think, you know, we're we're just big proponents of of coining, you know, coining constantly, iterating, you know, attempt to coin things. You're not always gonna be successful. But, you know, when you hit something when you hit it like cougar's law, I mean, that's a that's a billion dollar coinage right there.
Speaker 1:It is.
Speaker 2:And, I was actually giving this I was giving this advice to a GP who reached out to me and said they were writing a piece on the intersection of these three trends. And my primary advice was you need to condense it down into five to six words max so that you can if that if these trends play out in the way that you think they will, that you will get credit for sort of creating that, and and sort of, encapsulating that trend in something that is memorable and something that can sort of live on. And so, Brody here says, you know, calls this out well. Brian Johnson has done this incredibly well with don't die. Two words that, that sort of encapsulate his movement and everything that that he's he stands for.
Speaker 2:So, always be coining.
Speaker 1:Always be coining. I mean, Peter Thiel did this with zero to one, but also he popularized the idea of the power law, which was really, like, it's obviously he didn't create that, but he popularized that in in the venture term. And and, owning a coinage and popularizing a coinage is super valuable. I actually looked up all the different ways you can coin a phrase around your name. So Coogan's law is out there already.
Speaker 1:We're working on Hayes law, Geordie's law.
Speaker 2:The Hayes par the Hayes paradox
Speaker 1:Hayes paradox No. Is coming soon, dropping soon.
Speaker 2:That's when you find something so funny. It's so funny that you're you're literally laughing at at your own joke, and then no one else finds it funny.
Speaker 1:Yeah. You gotta you gotta post that. I think that's good. I think that can live on. But there's but you have multiple shots on goal.
Speaker 1:So we can get Hayes law, Hayes paradox, Hayes effect, Hayes principle, Hayes razor, hay the Hayes trap, the Hayes critique, the Hayes Hayes syndrome, the Hayes equation Yeah.
Speaker 2:And it's funny.
Speaker 1:Hayes wager.
Speaker 2:Because Lulu didn't put going direct on here, which is her
Speaker 1:Yeah.
Speaker 2:Her her, coinage.
Speaker 1:She didn't coin that. Really? She popularized it. And this is another thing about the Coogan Coogan's law. There's also Coogan's paradox, which is that oftentimes the person that popularizes the coinage accrues more value than the person who actually does the coining.
Speaker 2:Yeah. That's funny. I always thought she created it.
Speaker 1:No. No. I I I think it might have come from Balaji or someone else.
Speaker 2:She also gets credit because she helps so many companies now do the thing, which is going direct, which
Speaker 1:is Totally. And yeah. And coining truly is not coining is not just coming up with the phrase. It's also doing the work to popularize it and beat that drum. And I can tell that people are people are circling around Coogan's law ideas.
Speaker 1:And if I don't stake my claim with a get a banger every week or every month reasserting my ownership over that meme, it will get twisted and repopularized, and I will lose it. And I've been talking to Solana about this with moon should be a state. He has a great phrase. And you can see that as this gets bigger and bigger, this movement could move beyond him and someone else could take it. And all of a sudden, he's no longer the moon state guy, and that would be a huge loss.
Speaker 1:I I I wanna keep it in the salon.
Speaker 2:Yeah. The risk the risk for him is that is that there's two people that could really take that, Elon and Trump. Yep. Positive thing is if you get your your phrase taken from one of those people, you still you still get to be infamous for, you know, creating creating a movement. So
Speaker 1:Totally. Totally. And so did you see this mattress drama? We have to cover it.
Speaker 2:Mattress drama on the timeline.
Speaker 1:Drama on
Speaker 2:the timeline. To me, the drama here was that it was an air mattress and not a Eight Sleep. She wouldn't have caught this kind of shade if she was shown off her her pod four Ultra on the floor, but I think San Francisco's so normalized to the fact that high performers sleep on Eight Sleeps Yeah. That you can't really be taken seriously in San Francisco if you're not on an Eight Sleep. Yep.
Speaker 2:I'm very excited to launch, officially launch our Eight Sleep partnership very soon. But on that note, I thought it was funny because she clearly I think it was, like, one person that just, like, dunked on her and then, like, kicked off this entire firestorm. I thought her original post was totally fine. She said
Speaker 1:funny. She's clearly joking.
Speaker 2:Like Yeah. She's she's joking and, like, she's having fun and she's, like, playing into the culture, but, but I think people saw it a little bit as stolen valor. You know?
Speaker 1:Yep. It's
Speaker 2:like, you're a VC. The mattress on the floor has been reserved for, you know, the the struggling founder with John Coogan in in 2010.
Speaker 1:Yep.
Speaker 2:You know, sleeping on a mattress with $200 a month to spend on, you know, food. Yeah. So, anyways, date she says day two learnings. VCs are hated in SF, and people think that their junior VC job is a lot more glamorous than it is. It's not.
Speaker 2:LOL. Another great reminder to focus on what you love versus being concerned with external validation. I don't think the second point I I think she kinda missed the point. I don't think VCs are hated. True.
Speaker 2:I think that, I don't think I don't think anybody thinks that junior VCs are so glamorous. It's more so that, unless you're working for the world's smallest micro fund, like, you're probably making an okay income, and you don't have any risk of, am I gonna run out of money, you know, in three months?
Speaker 1:Yeah.
Speaker 2:And so, anyways, Megan Megan dunks on her again Yeah. And says VC is s f l m a o. You guys And
Speaker 1:this is a this is a call to action for I don't know exactly what firm Monica works for, but, if you're the GP of that fund, get Monica an eight sleep immediately. And then also somebody get her a Cartier crash to show off in when she's at a partner. Yeah. You know?
Speaker 2:Yeah. A loaner Cartier crash would go a long way to to sort of establish.
Speaker 1:And why not a company car while we're at it? I mean Yeah. You you you know, something nice that she can take, you know, maybe a McLaren f one.
Speaker 2:I think
Speaker 1:that thing two seats. You can take the CTO and the CEO on a a a little drive. Don't You wanna save some money, go with the I eight. The doors still go up. You'll still be respected.
Speaker 2:Yeah. Don't But not majority. Don't LARP as a bootstrap founder. LARP as a size lord GP. Exactly.
Speaker 2:You know, get her get her get her a Bentley.
Speaker 1:Yeah.
Speaker 2:Get her a crash. Get her a sleep. Get her a a $50,000 a month. You know? Let's put those management fees to work.
Speaker 2:You know? Let's do it. It's not meant to be just pure net income for the partners. It's about moving the firm forward.
Speaker 1:Yeah. And you have the you have the proof on the timeline. I think this is an indictment of of, of, austerity at VC firms. We need
Speaker 2:Yeah.
Speaker 1:GPs, kitting their associates out, and their principals out and their junior VCs out with the absolute best, the creme de la creme.
Speaker 2:Creme de la creme.
Speaker 1:Let's move on to, promoted post. Wait. Wait. What you got?
Speaker 2:After we do this, I got some promoter reviews. So let's jump in with Skye.
Speaker 1:Do this promoted post. I'll read through this. This is the job I expect as a dream come true for many software engineers. We're hiring for engineers to join the internal AI team here at Anduril Tech, where you will build agentic tools that power damn near every work stream across the company. If you wanna have access to the biggest foundational AI labs as your partners and work on enabling everything from sales to marketing to internal comms to manufacturing to hardware design to field sustainment while being part of the leader in defense technology apply.
Speaker 1:And so go to, Andrew's, job website on greenhouse. Check out the job that Psy has posted. He is in a he's in a, a massive war with Luke Metro over at Anduril to be the top poster at Anduril. And so give him a follow. Go apply for this job.
Speaker 1:Seems like a dream job, honestly. Company's ripping, and it's exciting place to be.
Speaker 2:Thank you for the tag, Cy. Go apply. Go DM Cy. This is an insane opportunity. You'd be stupid not to take it.
Speaker 2:Go work for America, work for Anduril, and defend our national interest.
Speaker 1:Let's go to some promoted reviews because we've been getting five star after five star review on this podcast. They don't stop coming. And as a reminder, if you leave us a five star review on Apple Podcasts or Spotify, we will read your review live on the show, and we encourage you to include an ad in your review. It's free real estate, folks. Take it.
Speaker 1:Jordy, what you got for me?
Speaker 2:This, this block of promoted reviews is sponsored by AdQuik. AdQuik is the one way to buy out of home ads for your startup. They make it programmatic. They make it super easy. We're planning some of our own out of home campaigns, on AdQuick right now for TB as well as PMF or Die.
Speaker 2:So they're amazing. You can just go to AdQuick.com and sign up. They've got some great, sales reps over there that'll walk you through it. Or if you need some campaign ideas, hit us up. We're happy to support there.
Speaker 2:And I'm gonna jump into some ads now. This is from doctor Brian. He says, technology brothers is a wonderful podcast. Just like my 2020 vision, I don't take a single episode for granted. This five star review is brought to you by GreatTalk Family Vision Care.
Speaker 2:For over thirty years, doctor Mark GreatTalk has been dedicated to providing exceptional eye care to families in Western Pennsylvania with locations in Greensburg, Legionnaire, and Harrison City. And now with the recent addition of his son, doctor Brian, I love it, keeping it in the family. Our commitment to your vision is stronger than ever. As a father son team, we believe that eye care means we care because your vision deserves the best. We offer comprehensive eye services, including dry eye treatments for the 10 x engineers who are glued to their screens all day, creating shareholder value in products such as blue light blocking glasses for terminally online ex posters who seek banger archive acclaim.
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Speaker 1:That's a fantastic review. Fantastic price. Fantastic ad. Thank you for sharing that.
Speaker 2:We got
Speaker 1:it. Promoting family business.
Speaker 2:Go to the eye doctor in a long time, thankfully. But, but I would I would love to actually be treated by them. They they sound amazing. Thank you for the review, guys, and for listening.
Speaker 1:I can read the next one if you want. Okay.
Speaker 2:Yeah. Hit it.
Speaker 1:It sounds funny. It says, it's mewing for the brain, a five star review. Creatine and then raw eggs, castle equals calcium canons, blueprint slash Brian Johnson equals y b stiffs. I don't know what that means. Oh, I think I know what that means actually.
Speaker 1:Technology brothers equals a fully rocked up brain. If you wanna beef up the brain matter, all you need to do is take some creatine and put on these two citizens of the world. Current events, deep takes, and a style sense that would make the ice queen and a winter quiver. Babe, wake up. Just found some good old fashioned ear candy.
Speaker 1:Everyone that matters. Ew. Stew. Thank you.
Speaker 2:Dude, absolute dog. What if there was no ad in there? I would have liked to promote something for you.
Speaker 1:Yeah. But you always get a second chance because you can review us on Apple Podcasts and Spotify. You get two shots on goal, guys. Should I read the next one too?
Speaker 2:Next one next one, I got one from SC. He says
Speaker 1:Do it.
Speaker 2:And this is from Blaine Davis. He says business thrives on deals, and deal makers thrive on technology brothers podcast. Those who who love leverage and luxury listen daily, take it from us, a pair of passionate listeners who like you, love business, and decided to do something about it. We're building a platform to pay homage to dealmakers like Emil Michael and Michael Ovitz. So today, before allocating capital, allocate your network.
Speaker 2:Make a new connect connection for a new company to help them land a customer, and we'll wire you capital the same day. We want to build the business platform of the future where connections you trust could be the new customers for the companies we trust. We are superconnector.com, and we approve this message. Super Connector is an amazing company. I would think of it as, like, almost like an expert network, but for helping you find customers.
Speaker 2:So if you're trying to sell into health care, they have health care executives and people that are hyper connected in that industry that you can basically hire and just pay on a per lead basis. And so super cool platform. Love the domain too. SuperConnector.com. Just ripping through these.
Speaker 2:You You wanna hit the next one?
Speaker 1:Yeah. Tech Bros for the win. If you've ever wondered what happens when two angel investors with LinkedIn level enthusiasm and Chad like confidence get behind a microphone, look no further than technology brothers, a world where AI isn't just a tool but a cohost, and blockchain is the answer to every question, even the ones you didn't ask. Five stars. This review is sponsored by Jay Kramer Corp.
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Speaker 2:Work a
Speaker 1:a new studio. We'll be looking like maybe the fourteenth.
Speaker 2:Jay Kramer, we were gonna just lease a studio, but I feel like now we gotta build one ground up. To be honest, John, nothing like, reading these reviews literally makes my heart sing.
Speaker 1:It's amazing.
Speaker 2:One of the it's it's just so fun. Everybody gets into character. I absolutely love it. Thank you guys for the support and for listening. Love the Kennedy.
Speaker 2:It's the least that we can do to, to add, you know, to run ads for your incredible businesses. So absolutely love it. Let's get back into this timeline.
Speaker 1:Okay. So Connor says number of early stage founders I know who are not struggling to hire, zero. And Monica, from an earlier post says, what's the bottleneck? Is it it's an employer's market, isn't it? And Connor says, the best talent have many options to choose from.
Speaker 1:Very hard to find the right cultural skill and expectation fit. You can hire people more easily by lowering your standard in some capacity, but there's no free lunch. Free lunch. And this is real. Everyone says, oh, AI is gonna kill all the jobs and everything, but it hasn't happened yet.
Speaker 1:There's still a very tight labor market. And with Cursor and and Devon and all these extra tools, it's gotten a lot more fun to work at a startup. It's gotten a lot more productive. And so great engineers and great product builders have the pick of the litter. What do you got for me, David?
Speaker 2:I, I mean, to me, this is playing out. A lot of people said that that, have been saying, you know, that the job of the software engineer is going away. And, we've got another year maybe, but it's, you know, it's gonna be gone. And who who knows really what's gonna happen. But, one thing is clear as these engineers as engineers get more efficient with tools like Devon and and Cursor and and Windsurf and poolside and the whole list goes on, it seems like there's just an even bigger and bigger and bigger demand for engineering talent because then companies say, okay.
Speaker 2:We're more efficient now. Let's build even faster. Right? And so you see these companies that are hitting these incredible revenue milestones and building these really full featured products in in record time. And so so, yeah, it's it's it's a great time to be talented and looking for opportunities.
Speaker 2:It's a tough time to be hiring. And every single one of the comp you know, we talk every company that we talk about on the show is actively hiring. Right? And even they're they're hiring, and and OpenAI themselves is hiring engineers. Right?
Speaker 2:And I'm sure they they are frustrated with with with how competitive the market is right now. So Totally. An awesome time to be joint you know, in the market to join a startup.
Speaker 1:Yeah. I always think about that Pavel, post about, oh, software engineers are cooked. No. Everyone is gonna be competing with software engineers because the tooling is so advanced now that I mean, you see this at ramp. Their marketing organization has tons of technologists in it.
Speaker 1:And Yeah. There's every problem that you have. Whatever your business is, whether it's sales, like having programming skills or being able to think like a programmer
Speaker 2:Well, look at that.
Speaker 1:Into steroids.
Speaker 2:So deep research is does PhD level research now.
Speaker 1:Yep.
Speaker 2:And that is software engineers building that to compete with not other software engineers, but people that would have just been manually putting together that data and information and summarizing sources and things like that. So, you know, look. Even even Tyler Cohen, which who's been he he certainly hasn't been an AI bear, but he's been more so I you know, he was on DoorDash and basically talking about how, yes, it's gonna be transformative, but it's not gonna eliminate all jobs in ten years. Right? Like, these trends are gonna take quite a long time.
Speaker 2:So why don't you get into this?
Speaker 1:Yeah. So Alex Stap says buckle up, folks, and he's sharing a screenshot from marginal revolution. Tyler Cowan writes, I have had deep research write a number of 10 page papers for me, each of them outstanding. I think of the quality as comparable to a having a good PhD level research assistant and sending that person away with a task for a week or two, maybe more, except deep research does the work in five or six minutes, and it does not seem to make errors due to the quality of the embedded o three model. And what I've realized is that, I've gotten better at prompting deep research, and now I'm having fun with it.
Speaker 1:I asked it, when we did the deep dive on Temu Temu, I specifically asked it, who made money from Temu? And it was very good about citing very specific articles to figure out who the investors were. And then I also asked it, write in an analysis of Timu's effect on Amazon. And he was able to look at the financials of PDD and the financials of Amazon and really compare those. It it it was a little bit it was a little bit boring when I asked it just, like, tell me the whole story of Timu because it doesn't really know what I want.
Speaker 1:But when I ask it very specific questions, and and questions that I don't know the answer to or I can't just Google and actually require some analysis and some piecing together, that's where it really shines. And and that's where it would take a long time to pull up the financials, get maybe get into Excel, compare them. So I am loving it, and I think it's a big advancement. What do you got?
Speaker 2:Yeah. One other note. I saw Michael Mignano from Lightspeed posted. He's been on the show before. We covered his blog post, I think on Monday or Tuesday.
Speaker 2:He said deep research marks the first time I've been convinced that AGI is already here. The discussion is over. I I agree. I think that people are realizing that, we we've talked about this on the show before. Right?
Speaker 2:Everybody was saying, you know, we're building AGI. You know, it's almost here. And then everybody kinda looked around and said, hey. What we already got, you can already sort of say is artificial general intelligence. And so the goalpost just got shifted out to artificial superintelligence and agentic systems and, you know
Speaker 1:Well, it's that it's that AEI concept, the artificial economic intelligence in my mind. It's like, at a certain point, these evals mean less than just how much money are these AI systems making. And that's a real that's almost a measure of the unhobblings. Like, the PDF upload we like to joke about, but, really, the the question is, can deep research integrate into a system where it's creating real value? And and is that measurable?
Speaker 1:And then, really, it's just it's just what's the revenue of the application layer? And that is a metric. And once that gets really, really high, well, yeah, we've crossed some sort of quantitative threshold. And these and these questions about, like, is the system human level intelligent or not? It's almost less relevant than is GDP moving up.
Speaker 1:Are we at 5% GDP growth instead of 2%? That would be amazing. That's what Tyler Cowen's a little bit worried about because he thinks that there's a lot of jobs and a lot of roles that are just completely, like, hardened against AI, at least in the short term. Yeah. But but the certain certainly the ideal is that is that all these all these systems get better.
Speaker 1:They create more value. Values captured by the shareholders, by the consumer, by the user, by everyone, and it's just, you know, a a a new a new American boom, which I would love to see. Let's stay on this topic, move forward a few slides, Ben, to, Juwan over at Ramp. He says front end engineers equipped with AI slash ML skills will be the most desirable employees by the end of twenty twenty five. Thought this was an interesting post because a lot of the a lot of the back end and the actual instantiation of the idea of software is, becoming commoditized and becoming easier to do with these AI tools.
Speaker 1:But you still gotta know what to build, how to design a product, and how to make it usable to a human at the end of the day. And so that's why I think he's saying that for an end engineers, designers, people with product sense might be, uniquely poised to benefit from, advances in AI. But what do you think I
Speaker 2:just gotta do a a golf clap for Juwan because it feels like just yesterday, he came out, started asking for raises on the timeline.
Speaker 1:Been on a tear.
Speaker 2:At this point, I think he's beyond earned it. The guy's been on a tear. He's getting millions of impressions a month, putting ramp on the map, making them a target for super smart, young, engineers to go and join ramp. So, I think he deserves a raise. I'll go on record and say it.
Speaker 2:Maybe I'll even text, Eric and Kareem. But, anyways, congrats on the run.
Speaker 1:We got a promoted post from Emmett Emmett Shine. He is looking for a designer to collaborate on pro branding and product design in this style, metallic, chrome, grain, detailing, Americana. If interested, DM Emmett on x or email him at Emmett@LittlePlains.co. And we're big fans of Emmett on the show. If you're not familiar with him, he was, what, Gin Lane?
Speaker 2:Yeah. Quick summary. So Emmett started Gin Lane, like, probably 15 ago. One of the most impactful branding agencies that led the charge on d two c. So they work with all these different companies from, like, Warby Parker to, I think they did Harry's to Sweetgreen, things like that.
Speaker 2:So absolutely incredible human and creative mind. He's also a coach for PMF or Die. We got a big announcement for PMF or Die coming tomorrow. That's right. So he'll be on that show.
Speaker 2:And just a pleasure to work with, he did the Aurora branding. You can see it in the back left corner there, John. So we work with him there, but incredible opportunity for the right designer to go in there and, get to work with the GOAT.
Speaker 1:Well, let's go to another promoted post, not from Bezel, but for someone that should be shopping on Bezel because Brody, fan of the show, asked the question, what should I put in these empty watch slots? He has three watches. He's got 10 slots, seven to fill or eight to fill. Or, actually, that's 12. That's a 12 watch case.
Speaker 1:So he's got plenty of options. What would you
Speaker 2:put there, Jordy? One more. He should have circled that Apple Watch, and you can get that
Speaker 1:out of
Speaker 2:Yeah. Yeah. You're not gonna
Speaker 1:see Apple Watches on bezel.
Speaker 2:I think that watches are are such a considered purchase that I highly recommend if you're interested in getting one, not impulse buying anything because a watch that you think is cool today. And if you just start watching YouTube's on, YouTube videos on watches for just thirty minutes a night for a while. By a month, then you'll you'll all the watches you thought were cool in the fur you know, the first, week suddenly or or, you know, you're you're beyond them. And so, I think it's a journey. There's no rush to fill it up.
Speaker 2:And, and, anyways, I would say, like, work on building up your wish list on Bezel before you do, before you make any, you know, specific purchase. Yeah. But Also, Brody Brody launched a cool he launched a marketplace yesterday that's a marketplace for startups to offload their, startups to offload. Like, you know, if you're moving offices and you have extra chairs or you bought monitors that you don't need, I don't think I don't know if we have it listed here. But but, either way, check it out.
Speaker 2:I think it's VCsubsidized.com, and, you know, potentially get some Herman Miller for 90% off.
Speaker 1:Yeah. And, there's a lot of options. So download the bezel app, start scrolling, and watch some YouTube videos and watches. Let's move over to another somewhat promoted post, and then we'll wrap up the show. Patrick O'Shaughnessy posted today his, fabulous conversation with Graham Duncan.
Speaker 1:And we wanted to highlight this because we covered this on the show because the interview with Graham Duncan was on the cover story of the first colossus review, which we highly recommend going and subscribing to. It's a fantastic, publication. We have it somewhere here in the in the studio. But, we wanted to highlight this because previously, this conversation was only available on the paid Colossus RSS feed. But now in a great turn of events, it's available in an ad sponsored format.
Speaker 1:And so Ramp has has has partnered with, Invest Like the Best. They are the presenting sponsor, and you can go and listen to, Patrick's conversation with Graham Duncan for free on the ad supported invest like the best RSS feed. And so go check it out. He breaks down, starting an investment platform, sourcing, compulsion, grip, and levels of investing of the investing game and evaluating people. So if you don't know Graham Duncan, he is the guy who picks the guy.
Speaker 1:He seeds new investment and asset managers. And so if you're if you're starting a new hedge fund or a new, a new investing firm, you go to Graham. If he likes you, you're gonna get a lot of money for your fund, and he's done very, very well. And he breaks down how he thinks about talent. The guy spends three hours
Speaker 2:a day on his daily beast. It's it's very broadly applicable to just everything from picking, you know, founders that you wanna angel invest in to picking, you know, friends and business partners. And, anyways, his his lessons are are tremendous, so definitely check it out.
Speaker 1:Yeah. So thanks everyone for tuning in. That's our show for today. We'll be back tomorrow. We have tons more stories, tons more news, and I'm sure we'll be breaking stories and getting exclusives like we always do on here.
Speaker 2:Every time.
Speaker 1:So don't forget to leave us a five star review on Apple Podcasts and Spotify. Leave an ad in your review. Send us any questions, DM us, submit banger archive posts. Just engage with us everywhere on the timeline. We'll be on x all day long.
Speaker 1:All day long.
Speaker 2:We'll see you on the timeline.
Speaker 1:We'll see you on the massively profitable x, the app the everything app.
Speaker 2:There we go.
Speaker 1:Thanks for watching, everyone. Folks. Have a good day. Bye.