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TBPN is a live tech talk show hosted by John Coogan and Jordi Hays, streaming weekdays from 11–2 PT on X and YouTube, with full episodes posted to Spotify immediately after airing.
Described by The New York Times as “Silicon Valley’s newest obsession,” TBPN has interviewed Mark Zuckerberg, Sam Altman, Mark Cuban, and Satya Nadella. Diet TBPN delivers the best moments from each episode in under 30 minutes.
You're watching TBPN.
Speaker 2:Today's Friday, 05/08/2026.
Speaker 3:We're live from the TBPN Alteredome.
Speaker 1:The temple of technology, the fortress of finance, the capital of capital.
Speaker 2:Jordy has some new buttons.
Speaker 1:I got some new buttons. And That's why we had to be off for a couple days.
Speaker 2:Yes. Deep engineering work. The great lock in continues. The great lock in? No.
Speaker 2:We will go into a a review of the last few days, but first, we'll give you a review of the next three hours because we have Josh Reeves from Gusto coming on. Jonathan Neman from Sweetgreen. So from LeafFactor,
Speaker 3:and then Brian Chesky from Airbnb coming
Speaker 2:in to the TBPN UltraDome. We're very excited. Lighter schedule. It's Friday.
Speaker 4:We're having fun. We're gonna be hanging out here on the stream telling you about the American Economic Rollercoaster. You've heard this
Speaker 2:story before. It's just nonstop. Okay. So the the American Economic We miss you guys. It's good to be back.
Speaker 2:Yeah. We got a bunch of stuff going on. So the the whole bunch of economic news over the last couple of days. Stock market is absolutely ripping. We should be in white suits.
Speaker 2:Intel's up 20% today, so almost. And there's this split between the AI economy and the real economy, the American economy. And there's a whole bunch of different things that like you need to puzzle together to get a picture of what's going on. And then I'm discovering that there are K shapes within the K shapes even in the real economy. There's divide between different companies and so I wanted to walk through that.
Speaker 2:So let's start with the Intel news. It's up almost 20% today on the news that they will be making chips for Apple. There's a report in the Wall Street Journal about this. They've released reached a preliminary chip making agreement. It's not completely locked in, but there a whole bunch of extra context here that we've been tracking for the last six months, twelve months as some of this was expected.
Speaker 2:The revitalization of Intel was something that a lot of folks were clamoring for, Ben Thompson, myself, a lot of folks, Leopold Aschenbrenner, we're all hoping for something and plans are starting to come together. So the talks have been described as intensive, intensive talks between the two companies have been ongoing. For more than a year, Apple has been talking to Intel. Interesting. Of course, Intel and Apple have been long term partners for, what, the '90s, 2000s, up until the Apple Silicon program where they started going Apple started going direct to TSMC.
Speaker 2:Can they get them back? It seems like potentially in some form factors, but we're going dig into it. So they have hammered out a former deal in recent months. And it's still unclear which exact Apple products Intel would make chips for and manufacture them, both its own designs. So Intel has two main businesses.
Speaker 2:It's both a design shop and a manufacturer. They have a fab and a design unit. And in its foundry unit, both businesses have been underperforming for years before Lip Bu Tan came in as the new CEO and was vowing to revitalize them. And so the last summer, the Trump administration struck a deal to convert nearly $9,000,000,000 in federal grants into Intel stock, giving The US
Speaker 1:Roughly $20.20, $21 a share. It's now at a $125 a share. So White House has gotta be feeling pretty good.
Speaker 2:Yeah. Huge. I mean, I I'm pretty sure Jensen has made over a billion dollars on the $5,000,000,000 investment. I mean, just today, if it's up 20%, and he must have seen a big growth in that position since then.
Speaker 1:Yeah.
Speaker 2:We did. Just today, probably a 1,000,000,000 or $2,000,000,000 print. And so the reporting here in the journal says that the Trump administration was actually key in bringing Apple to the table, putting pressure on sort of both sides to say, hey, let's think about the future of American manufacturing resiliency, reducing Taiwanese depend dependence on a foreign supply chain and giving Intel a real shot at underwriting the next big fad that they wanna build.
Speaker 1:India got in at $23 a share with their $5,000,000,000 investment. So up around a five x.
Speaker 2:Not bad. That's not bad at all.
Speaker 1:The guy really needed it.
Speaker 2:He paid for rock with that. That's pretty sick.
Speaker 1:Oh, yeah?
Speaker 2:He just paid for rock perfectly.
Speaker 1:That's why he wired before they actually closed.
Speaker 2:Yeah. He's like, I'm up. I'm I I I got gains. I need to offset these. So commerce secretary Howard Lutnick has met repeatedly over the last year with high ranking Apple officials, including CEO Tim Cook, as well as SpaceX chief Elon Musk, NVIDIA chief Jensen Huang, to try and convince them to get into business with Intel.
Speaker 2:There was a discussion about should NVIDIA dual source the Grace CPUs from Intel, SpaceX, and Elon's been with Samsung for a lot of Tesla chips, but there's been discussion there. There was that rumor about global foundries, and Elon's always been in the in and around the fab world, and he's obviously going a lot deeper with the long term TerraFab project. So Commerce Secretary, Howard Lettner, was trying to convince them to get into business with Intel. Some of the people familiar with the matter said, with the Apple deal, Intel has now signed partnerships with all three. So over the last decade, Intel fell badly behind rivals.
Speaker 2:This is from The Wall Street Journal, such as TSMC and Samsung Electronics after a series of technical mishaps, leadership changes, and failed attempts at consolidation led outside foundry customers to pull or curb their businesses. When Intel hired Tan in March 2025, wow, just a year ago, I guess a year and two months, to replace ousted chief executive Palette Gelsinger, President Trump raised concerns that Tan's close ties with China would compromise him and called for his ouster. It was a very, very dramatic moment, but Tan won Trump over with a charm offensive. I like that. And the government announced its 10% investment in Intel shortly after.
Speaker 2:Following the investment, Intel shares price rose sharply. On Friday morning, it rose 7.5% to an all time high of nearly $118 per share. It's up more now. Tan has been reshaping Intel's top leadership ranks in recent months, including hiring former TSMC executive Wei Gen Lowe, a move that prompted a lawsuit from TSMC. So they're not friends anymore.
Speaker 2:Intel's CEO has ousted ousted his head of product and hired new executives to lead the company's data center processor and client computing units as well as newly formed custom silicon business. He's also invested heavily in Intel's most advanced manufacturing process known as 14a, and that is the node that Intel is hoping that all of the potential customers will jump together and say, hey, we're going to buy from this if you make it. If you build it, we will come. President Trump personally advocated for Intel to cook in a meeting, which is funny because it sounds like he's advocating for Intel just to cook generally. But he's No.
Speaker 2:He's he's advocating for Intel to Tim Cook in a meeting at the White House according to people familiar with the matter. Trump said, I like Intel in January. He said that the government made tens of billions of dollars from Intel deal and that the government's backing of the company had attracted important partners to Intel. As soon as we went in, Apple went in, Nvidia went in, a lot of smart people went in, Trump said. NVIDIA, the world's largest chip firm, invested $5,000,000,000 in Intel in September, and the two companies announced partnership under which Intel would build custom data center CPUs, the processing brains for most computer systems for NVIDIA.
Speaker 2:And last month, Elon, of course, announced the TeraFab project. And so Apple relies on TSMC to make chips for iPhones, iPads, Macs and other devices and is under pressure to find additional chip suppliers. There's also chip shortages, so it could be good to dual source independent of the geopolitical discussion. On Apple's last two earnings conference calls, Cook blamed a lack of availability of advanced chips for Apple's inability to meet customer demands iPhones, the constraints are expected to continue in the current quarter affecting several Mac models, Cook said, We think looking forward that the Mac Mini and the Mac Studio may take several months to reach supply demand balance. And after the earnings call, Apple raised the Mac Mini starting price.
Speaker 2:And so TSMC's manufacturing capacities capabilities far surpass those of Samsung and Intel, makers of other kinds of chips for memory and storage, for example, are more competitive with one another, giving Apple multiple sources of supply, although, of course, they are memory constrained. Apple's been long been TSMC's top customer, but skyrocketing demand for its manufacturing capacity from NVIDIA and other designers of AI chips means Apple no longer has as much leverage to secure the supplies that it needs. Starting in 2006, Apple used Intel designed CPUs as its main processor of its personal computers, but switched to its own custom CPUs based on ARM design in 2020. That's the dawn of Apple silicon. And so there's been an incredible economic and financial performance concentrated in just a handful of trillion dollar tech companies.
Speaker 2:Intel is starting to join and starting to perform like that. There's a few memory stocks. I saw one report that referred to it as the Mag-ten, and they'd added a few other AI names to that group. But there's just a few companies that are driving the vast majority returns in the stock market. There's a couple slides that we can pull up that show the scope of what they're calling the it is now a bubble.
Speaker 5:The concentration?
Speaker 2:Yeah. The concentration.
Speaker 1:Yeah. We went we went through we we had three sort of beautiful weeks where Yeah. Pretty much everyone started saying there's no way it's a bubble. Yeah. Look at the revenue growth.
Speaker 1:There's no way it's a bubble.
Speaker 6:Yeah.
Speaker 1:But now, people, Steve over at Bloomberg, we can pull this chart up since
Speaker 2:you mentioned Oh, which one is this?
Speaker 1:This is the concentration
Speaker 2:Sure. In Yeah. I've seen this.
Speaker 1:The market. You can see
Speaker 2:The AI Big 10. So, MAG seven plus AMD, Broadcom, and one other. Who is that? Micron. Yeah.
Speaker 2:Now make up 40% of the market. Railroads, for reference, during 1835 to 1910 were 63% of the market and he comps it to Japan, the Nifty Fifty, tech and telecom throughout various periods of time. And yeah, it's an interesting dynamic. And so I was reading this post by this piece by Greg Ipp in the Wall Street Journal and he was trying to disentangle what's happening in the overall American economy from the AI economy, what's where is the growth coming from. He sort of back the envelope did.
Speaker 2:He said the AI economy grew 31% while the non AI economy just 0.1%. And he cites a few economic statistics that are recent. Personal consumption, the biggest component of GDP grew a relatively muted 1.6%. Investment fell in housing, business structures. I think we're building we're spending more in data centers than housing now or office buildings, I guess.
Speaker 2:I I think it eclipsed office buildings and factories and transportation equipment like trucks and aircrafts. Meanwhile, investments soared 43% in tech equipment. Obviously, that's chips and GPUs. 23% in software, surprising, and 22
Speaker 1:percent pretty meaningful
Speaker 2:bounce
Speaker 1:back.
Speaker 2:Certainly on the revenue side.
Speaker 1:Datadog Absolutely. Atlassian. Yeah. There's been some And acceleration.
Speaker 2:Really was extremely widespread where you had I mean, you had like DoorDash and and and companies with strong network effects where the software was not their moat, they still had to go and answer to the market. And some of them got in and out of that in a week or a month, and some of them it took a quarter or two to show that there's resiliency. Some of them are still beaten beaten down. But overall, know, software is still doing very well. And so on the flip side, there's another headline that hit the journal yesterday.
Speaker 2:US ads a 115,000 jobs in April with solid hiring across sectors, retail, transportation, warehousing and healthcare all showed strong growth and led to expectation beating jobs growth. And so this is the weird dynamic that, you know, you're seeing all of this growth in AI economy and yet the overall employment is still chugging along. We can pull up the chart from The Wall Street Journal, but The U. S. Job market blew past expectations in April, buoyed by gains in industries including retail, transportation, warehousing, health care.
Speaker 2:Not completely unexpected given that those are not particularly AI targeted areas, whereas you might see the layoffs in the tech community, but that doesn't it's just not enough because the The US employs over a 100,000,000 people. And so a layoff of 4,000 people at some tech company just doesn't really move the needle when you're talking
Speaker 1:from Gabe in the chat. Texas Roadhouse is up. What? Why? Says 20%.
Speaker 1:I'm seeing 15% either way.
Speaker 2:Why is it up so high?
Speaker 1:He says, you're not bullish enough on Texas Roadhouse. I have never Maybe
Speaker 2:they beat Yeah. Yeah. Everyone says this is a Kiryu filter. It really it really is.
Speaker 1:It's crazy how how viral that Incredibly viral. That meme format has gone. I thought that was just like a thing that I I sent to you because I'd be dying laughing about
Speaker 2:Yeah. Yeah. No. No. No.
Speaker 2:It's quite popular. Broken containment fully. So the the the American economy added a 115,000 jobs in April. This was down from a net gain of a 185,000 jobs in March. But it was much better than what expectations were for April.
Speaker 2:Analysts pulled by the Wall Street Journal were expecting 55,000 jobs and the real number came in more than twice that, which is like it just breaks the narrative a lot. And it's this there's this disconnect between like the AI economy and the real economy. I was talking to Sagar about this. It's like that in in some ways it's like AI is NVIDIA earnings is holding up the global economy and it's holding up the global stock market. It's not actually holding up the the the economy if you view the economy as as all of the different jobs and and and activities that happen.
Speaker 2:Even if there isn't incredible growth there, there's actually a surprising amount of strength and resiliency. So the unemployment I'm
Speaker 1:waiting to hit the gong until we see what the revisions come in at.
Speaker 2:We haven't seen any revisions from March this time.
Speaker 1:I don't know. Maybe It comes it comes like it comes like over six months later.
Speaker 2:Yeah. But that's why I wanted to have Josh from Gusto on today because I think that Gusto has data on hiring. It that is very different from what the labor department what's going on with labor department. It's just a completely different dynamic. And you can look at, like, what's actually going on in small businesses.
Speaker 2:We've talked to folks at Stripe about this, and and and there are a lot of other data sources, the ADP payrolls and stuff. There there's there's plenty of, like, pretty standardized formats for reporting. And while there might be revisions to some government stats, it feels like there's plenty of places to get data. And it's all pointing in the same direction, which is not, Oh, yeah, they said they beat twice they delivered twice as many jobs as were projected and it was actually down. No one's really suggesting that.
Speaker 2:So the April report coming in after strong job gains in March shows how the labor market is holding up better this year than last. While health care is still leading the way in job gains, other sectors now appear to be picking up. Businesses are seeing conditions stabilizing and they have weathered the tariffs so many are hiring. It's looking somewhat better than it did last year. In the first four months of the year, monthly payrolls have averaged 76,000, up from an average of 42,000 during the same period last year.
Speaker 2:Still, The US has shed jobs over the past six months, and many companies are reluctant to bring on new workers en masse. Companies grippling with changes in everything from trade to immigration to tax policy have for the most part held off on large scale hiring and firing. But it does seem like the the the chaos of the tariffs and all of the early, like, EOs, like, that creates a lot of business uncertainty. That settles eventually, and then you get back to, okay, there were a bunch of changes, but at least we know that there aren't wild changes coming in the future at least that are expected. Diane Swank, chief economist at KPMG says it's still a high anxiety job market.
Speaker 2:Those who have a job are clearly clinging on while those who are looking for a job are feeling frozen out. And so I was I was digging into, you know, where where is their strength within the real economy once you go outside of AI? What is going on? And there were two recent earnings reports that were sort of disconnected but showed a little bit picture of what's going on. So it was Whirlpool and Six Flags both had very different reports.
Speaker 2:So Whirlpool, you probably know from refrigeration and washing machines, dryers, that type of appliance. They've making an appliance for for over a hundred years. And they've also been paying a dividend since the nineteen fifties consistently. They've never they've never suspended their dividend even through all the great recession, the dot com crash. Every year, they've been able to pay that dividend.
Speaker 2:They just cut their dividend, which is a really, really big deal for this company since it's a dividend stock. The stock traded down on the news and the stock is down 80% of the past five years. And they're in some financial trouble like they have a lot of debt and they have a lot of competition. But you could play that as like, okay, this that like the real economy is like completely chugging to a halt. At the same time, you had Six Flags which should be the thing that is discretionary.
Speaker 2:Like, do you go to the rollercoaster theme park or not? And Six Flags just reported higher first quarter revenue. They're growing and they're growing attendance and customer spending. And so now Six Flags is not exactly a juggernaut of business. It's only worth 2,300,000,000, and the stock is down over the past two years, about 50%.
Speaker 2:But the business is growing, and you wouldn't expect that during a time of, like, deep economic weakness. And so there's something odd going on there where as you think of refrigeration as extremely necessary, roller coasters as the ultimate, like, you don't. You can definitely skip it if you are cash strapped. But the actual dynamics of the market are very different. So Whirlpool sells big ticket necessities, these refrigerators, but they are deferrable.
Speaker 2:So you can put off getting a new refrigerator. You can repair an old refrigerator if money is tight. But your kids are only really rollercoaster age for a limited time. And Whirlpool also faces brutal global competition and existing home sales are down 3% month over month. And so all of that drives fewer appliance upgrades and they are not and they are not necessarily a beneficiary of all the international competition that they Yes.
Speaker 2:Face from LG and Samsung and other international players. And so I I've sort of Correction.
Speaker 1:Six Flags or new information. Six Flags is is been up since since around around the around November, it sort of bottomed. Yeah. I remember I was thinking of this because one, they have the ticker fun
Speaker 2:Yeah.
Speaker 1:Which is fantastic. The stock has not been having fun. But Travis Kelce and a group put in 200,000,000.
Speaker 2:That's right. We
Speaker 1:talked The about stock traded down pretty substantially
Speaker 2:Yeah. I remember that.
Speaker 1:After the investment but it's basically recovered to where it was Yeah. And it's
Speaker 2:Well, it's still down over the past like five years. Like Yeah. Two years ago, it was it was like a $5,000,000,000 company.
Speaker 1:Yeah. Down down big.
Speaker 2:But but but but the the what's interesting is that at this time of like economic uncertainty and all these questions about hiring, questions about economic resilience, they are increasing revenues, increasing attendance, increasing customer spend. And that's what's driving the stock today. And so there's this I I was looking at these two companies and I was like, they they sort of fit into this this barbell thesis of the AI future, which I've been seeing pop up more and more. And the two examples that I always give are, one, the Ellison family is both like long slop and long anti slop. They have a ton of infrastructure investments in AI through Oracle and then they own legacy media like Batman, Superman through Warner Brothers.
Speaker 2:And then Josh Kushner is doing a similar thing with OpenAI and the San Francisco Giants. Like two completely opposite ends of the spectrum and so you can think of rollercoasters as potentially like anti slop because you can't vibe code Space Mountain. But but but it it it's interesting to sort of like dig into the weeds of what's going on in the global economy and the American economy and seeing like where the unsuspecting winners are. Ryan Peterson shared a post from the or or chart from the Financial Times that perfectly illustrates our possible futures. This is so funny that this is in the the in the Financial Times, but they they fully embraced what happens in the human extinction tech singularity and the end of scarcity tech singularity.
Speaker 2:In the bull case, real GDP per capita goes north of a million dollars. And in the human extinction scenario, it goes to zero, of course. But the AI boosted growth path is a steady trend upwards, and that is the goal that I think everyone should be working for, potentially the end of scarcity outcome as well. But it is fascinating. And I think this chart that Ryan shares is of I think why there's anxiety in the market because there's this know, the whole like you're not prepared if it's not a bubble concept, but there's like a dual anxiety where like if AI gets too good, there's mass unemployment, everyone's worried about that.
Speaker 2:But if AI is a bubble and it collapses, you go into a recession and everyone loses their job and like you're in a similar scenario of like economic anxiety for both the, not necessarily the true doomers. I mean, obviously, they they they face a similar, you know, opinion. But but but even if you're just, like, in the it's overheated camp, there's real risk to the stability. And I think that's where a lot of the the bubble concerns come from. Although we're certainly not seeing very many signs of of of of the bubble.
Speaker 2:I mean, obviously, the evaluations are high, but so are the revenue growth charts. So we can go through some of the folks that Are are
Speaker 1:you more of a back of the envelope guy or a napkin math guy?
Speaker 2:Oh, that's interesting. I have a napkin here from Wonderco from the event
Speaker 1:I brought in. Oh, would you look at that. Yeah. A little souvenir.
Speaker 2:I like I like a napkin. I like a napkin. Actually, now that I'm thinking about it, napkin math is insane. It's extremely hard to write on a napkin. Totally.
Speaker 2:It's way easier to write on the back of an envelope. Yeah. You've got a lot more big envelope. You can get an envelope that's eight and a half it's effectively
Speaker 1:An envelope is sophisticated. An envelope is is is kind of a core business utility. Yeah. Napkins can be used
Speaker 2:for anything. If you're in napkin math, you got to pivot. I will
Speaker 1:say I'm much more of a napkin math guy. Why? If I can't I mean, just just just The phrase Spiritually and the phrase that I pulled. Okay. But if I can't get excited about an opportunity based on what can fit on a napkin Mhmm.
Speaker 1:Then I'm I'm never gonna get excited about it. Right? There's usually like
Speaker 2:So you think a napkin is is definitionally smaller? It's a less amount
Speaker 1:Totally. Math? It's not it's not it's a it's a lesser vehicle Yeah. Than an envelope.
Speaker 2:Yeah. Because a big envelope you could do a full spreadsheet on. Could you could write out comps
Speaker 1:Totally.
Speaker 2:And have multiple cells.
Speaker 1:No. So I'm I'm I'm in in practice, I'm a nap kin math guy but if something was really serious I would probably
Speaker 2:Pull out the envelope. Yeah. We've been doing too much napkin math around here.
Speaker 3:It's time
Speaker 2:to pull out the big guns. Let's get out the envelope.
Speaker 1:Speaking envelopes, so this morning I was telling Tyler Yeah. I'm I'm incredibly overwhelmed with Slacks Yeah. Emails, you know, DMs on every platform, LinkedIn DMs, Instagram DMs, X DMs, all the different messaging apps. And I was thinking how cool would it be if there was a service where you connected all your inboxes to and then every day Mhmm. They would print out all of the different messages and then bring them to you Mhmm.
Speaker 1:And you could put like a box. Yeah. You could put a box outside of your house and they would just put them in there. Yeah. And then at a specific time, you know, maybe in a roughly like two hour window, you could go out and grab all the
Speaker 2:Yeah. Print out Back messages you,
Speaker 1:you, of sort of like leaf through them, decide what you need to respond to. You would potentially because you're only getting messages once a day, you would probably be a lot more intentional about what you wrote back and forth. Totally. Right? And I think that could be
Speaker 2:Sort of the opposite of Earth class mail, those virtual mailboxes. Because they'll they'll they'll take your physical mail
Speaker 1:I want everything. I want everything in box. I wanna put a box outside of my house that people put. And I think there's something there.
Speaker 5:Yeah. Trump I mean, Trump literally does this.
Speaker 2:He does
Speaker 7:that, Yeah.
Speaker 5:Gets emails printed out and then he'll he'll write with a big marker his response and then his assistant will scan it and then email it back.
Speaker 1:Yeah. More more on C Fry says, a napkin is more available than envelope. Very true. Often the best business meetings Mhmm. Were not scheduled as a business meeting.
Speaker 2:So there aren't envelopes around.
Speaker 1:There's no envelopes around, but there's plenty of napkins.
Speaker 5:Yeah. Also, mean, you're saying napkins are smaller, but if you're at a restaurant and you have like a fabric napkin
Speaker 2:Yeah.
Speaker 5:And you have whole bag, those can be pretty big.
Speaker 2:So you're you're but I feel like it's bad form to be at a restaurant. Like, you're not supposed to ruin the napkins. Or do do you carry a pen that has washable ink?
Speaker 5:You have the crayons for the kids. Right? People are The chat is saying
Speaker 2:They don't ask you to
Speaker 1:The chat is saying I could call my service the United States Post.
Speaker 2:That's a good name.
Speaker 1:Thank you, Alex. That's a great
Speaker 2:name. That's sort of like the the the San Francisco artificial intelligence company or something like that or the browser company of New York. It would be inspired by that. Yeah. I I I think that even with the grand
Speaker 1:grand closed fisted grip right on the tablecloth.
Speaker 2:Tablecloth. Okay. I yeah. I feel like if you're given crayons, you are expected to maintain that the child uses the crayons only on the children's menu, which is typically made out of paper, very disposable. If you see the child using the crayons on a cloth napkin, you are expected as a patron to intervene.
Speaker 1:Jackson says digitize this service and call it email. There we go. We gotta we gotta get we gotta establish the mailbox first.
Speaker 2:We got an And
Speaker 1:then we can go there. But I like where you're going.
Speaker 2:I got an idea. Well, there's some other there's some other posts about the the the markets. Justin Spitler says them, be careful buying semis here. Obviously, the market's very very
Speaker 1:Let's pull up this heated. Travis. Let's play this
Speaker 2:video. Oh, this is Travis Pastrana?
Speaker 1:Yes. That's
Speaker 2:amazing. Nitro Circus, we've mentioned many times on the show. He drinking a Red Bull?
Speaker 5:What a Yeah. No parachute.
Speaker 2:Oh, no parachute.
Speaker 1:Yeah. So he jumps out of the plane, no parachute That's and drinking a Red Bull.
Speaker 2:That's actually
Speaker 1:And then he connects. He's gotta do some tricks He's
Speaker 2:really taking his time here. The tension is building building building. And so he connects with someone who wraps him up and then do they pull the parachute?
Speaker 1:They connect
Speaker 7:to each other?
Speaker 2:Or do they
Speaker 1:They they they strap him to them.
Speaker 2:Oh oh, okay. There is a strap. Strap themselves. Because it seems sort of crazy just to bear hug and and hope for the best.
Speaker 1:I don't think you're bear hugging.
Speaker 2:Don't know. It's Red I Bull. Anything could would I would I would expect him to be delivered a full parachute, his own parachute that he then, you know, dons and and but he made it. Wow. Well, that's what it's like investing in semiconductors right now, I guess.
Speaker 2:Anyway, how was your last two days, Tyler? What what did you get up to?
Speaker 5:It was sick. I was at the I went to the trial.
Speaker 2:You went to the trial.
Speaker 5:Opening on Elon trial.
Speaker 2:Okay. Walk me through it. You left the the studio on Tuesday.
Speaker 1:Yes. Before this.
Speaker 2:Yeah.
Speaker 1:Chat is still going. They said if Gary Tan gets a hold of this service, he's gonna call it Gmail.
Speaker 2:Gmail is good.
Speaker 1:There's something there.
Speaker 2:Gmail. If you vibe codes a full Gmail replacement, anything's possible. So you leave the office at, two after we wrap the show on Tuesday? You went straight to the airport?
Speaker 5:I did. Okay. Yep.
Speaker 2:And then what time did you go to bed? Because you woke up really early. Right?
Speaker 5:Yeah. So I I I got to the trial. So it's in Oakland.
Speaker 2:I got
Speaker 5:to the courthouse at I think like something around like 05:30.
Speaker 2:05:30?
Speaker 5:Yeah. Because you gotta get in line. Basically Really? You know, it's a public Yeah. Because because it's like a federal case.
Speaker 2:Yeah.
Speaker 5:Yeah. There like has to be some room for the public. But there's only like I think the number is somewhere like 20 or thirty. Because I I think it's closer to 20 because I think part of the 30 is reserved just for media.
Speaker 2:Okay. And when you got there at 05:30, were there already people standing in line?
Speaker 5:Yeah. So so there were I think there were like three or four people there already.
Speaker 2:Okay.
Speaker 5:In line.
Speaker 2:Early bird getting warm.
Speaker 5:That's Yeah. Well, because I didn't want to be late, obviously. Because because Did you talk to people? A few of them. I so so Were you there before Mike Isaac?
Speaker 5:I was there before Mike Isaac. Wow.
Speaker 2:But he has a media pass.
Speaker 5:So so yeah. Because last time when Mike Isaac came on the show, he said that because each, like, news Yeah.
Speaker 2:The New York Times got one pass and he was splitting it with Cade Metz. And so they were sort of going back and forth and I guess he had a media pass that day.
Speaker 5:Yeah. So that day he had a media pass. Yeah. He he got there pretty late. He got there like 07:30 or eight.
Speaker 2:Okay. So you're there from 05:30. He gets there at eight. What time does the trial actually start?
Speaker 5:I think around 08:30.
Speaker 2:08:30? Okay.
Speaker 5:Yeah. So basically, I'm just posting up for like three hours.
Speaker 1:Okay.
Speaker 2:And then this is Wednesday. So walk this through like, what what are you seeing? There's these opening remarks from the judge. They sort of welcome everyone in.
Speaker 5:Yeah. Jury comes in. Okay. So there are basically three main like segments. So basically, I'll say it starts 08:30, ends at I think 2PM.
Speaker 5:Mhmm. There's two breaks, two twenty minute breaks. Okay. So starts off and we we watch like the deposition of Miramaradi. So this is all live streamed.
Speaker 5:Right? Yeah. Audio is live.
Speaker 2:The audio
Speaker 1:is live.
Speaker 2:So And you're seeing a video?
Speaker 5:We're watching the video of her deposition.
Speaker 2:Okay.
Speaker 5:It's mostly covering the the time out of the ousting.
Speaker 2:And and did This
Speaker 5:is where this is where all the the
Speaker 2:text
Speaker 5:came
Speaker 2:out. Yeah. Did were they showing you the actual text? Were they playing a video? Or were they playing the AI reenactment of the text?
Speaker 2:Because we have this someone turned Sam Altman's text to Miramaradi into a 2011 style emo teeny teenage heartthrob anthem. Did this make it into the courtroom or no? Let's play this. We have the audio.
Speaker 6:Good
Speaker 2:motion graphics too.
Speaker 6:Wrap up soon lots
Speaker 1:of crashes
Speaker 6:from my kids. For an update. This is very bad. Can I
Speaker 2:What is this Suno? Can you put in text into Suno and
Speaker 5:get a full
Speaker 1:song? Play this for an AI skeptic Yeah. And and see what their reaction is because
Speaker 2:How do you see this and not wanna build? I I'm I I've I've seen these before, and I've always really enjoyed them. But with most of the AI music tools, I've never found a great way to put in a full script that I've written to get the results. But does so
Speaker 5:the author said his steps to make this. So first, the OCR ed the images and turn them into plain text. So images of the actual text messages. Easy. And then removed the names from the dialogue, pasted into Suno and iterated like 20 to 30 times.
Speaker 5:Oh. And then finally, I thought this one was catchy.
Speaker 2:Okay.
Speaker 5:Yeah. So I I I think it's still like this is still Suno but I think you still have to iterate about it.
Speaker 2:I I like this. I like this. Yosh is really having fun with this. Put up a version of this with the the Gen Z brain route slang. Yo fam, can you give me a vibe check?
Speaker 2:And am I cooked or nah for real for real? Satya and the gang low key stressin'. Miramaradi, yeah, you're skibbity. This isn't a rare l. This is an Ohio level generational or a loss, little bro.
Speaker 2:Who ratioed me? Sam Altman says. Miramaradi, some rando zesty NPC Twitch looks maxing Sigma. I'm not even gonna go further. But Yash is having fun.
Speaker 2:Lots of people having fun. What else happened? Did someone actually get on the stand or was it all video?
Speaker 5:Yes. So the first like hour
Speaker 2:It's up teacher played a movie. It's movie day. No. Movie day.
Speaker 5:The judge actually did get angry because like the she was like, oh, the jury's gonna get bored and like she was like offering them coffee and stuff. Okay. So basically, yeah, the first like maybe hour was mirror deposition video and then we go through some of the actual like documents again of the text messages. And then Siobhan Zillis Yeah. Is testifying.
Speaker 5:So she's physically there.
Speaker 2:Okay.
Speaker 5:She was a Yeah. Yeah, open air board member 2020 to 2023.
Speaker 2:Okay.
Speaker 5:And she steps down when Elon started XAI.
Speaker 2:Yep.
Speaker 5:So that was I have no idea how long that was. It that was the majority of the It
Speaker 2:was during the whole conflict.
Speaker 8:So Yeah. Perfect person
Speaker 5:to testify. Well, no. So so she actually left the board before the ousting. So she left in February 2023. Ousting is November.
Speaker 2:Oh, okay. Interesting. I didn't I I the timeline always gets so jumbled up because, like, there's, like, twenty eighteen battles between Sam and Greg and Ilya and Elon, and then there's the board.
Speaker 5:Yeah. Because all throughout this I was staying. There's like yeah. There's There's sort of
Speaker 2:main
Speaker 5:like Yeah.
Speaker 2:Right? Yeah. And we're sort of clicking back and forth between them.
Speaker 1:Yeah. Chat wants to know what kind of wombas were being thrown around. Was Lorraine being used? People saying, can you please Lorraine this email?
Speaker 5:Siobhan was actually dropping some good lingo. I I I don't know Yeah.
Speaker 2:We did. There's something, like Mike Isaac always, talks about, like, they keep referencing DOTA and they keep everyone on the stand is using a ton of jargon. How jargony was it? Was it like Dwarkesh Patel podcast level jargon or like actual, like, like talking to each other jargon? I would say it was
Speaker 5:not very sophisticated. Especially among the lawyers. Right?
Speaker 2:Okay.
Speaker 5:Yeah. Siobhan, she did drop some good lingo.
Speaker 2:Okay.
Speaker 5:I I yeah. It was some referencing some, like, why she got into AI Sure. About, you know, acceleration and all this.
Speaker 2:Okay. Okay.
Speaker 5:Yeah. And then after that, it we watched another, like, hour long video of Helen Toner's deposition. Wow. That was just about the the ousting.
Speaker 2:Okay.
Speaker 5:Interesting. Yeah.
Speaker 2:It was
Speaker 5:very fun. I enjoyed a lot. Yeah. Like, basically, you know, almost everyone like sitting in my section which was basically the public and the and the media.
Speaker 2:Yeah.
Speaker 5:Like everyone that came as the public were basically also media. Get the media
Speaker 1:pass. Sure.
Speaker 5:Sure. So everyone surrounding me is is on their laptop like typing basically. Yeah. Just like taking down what's what's being said.
Speaker 2:Yeah.
Speaker 5:Yeah. And then I'm just sitting there enjoying it because it's like, you know, it's good stuff.
Speaker 1:How how would you rate Mike Isaac's like snack and overall food supplies for the day? Did he burn
Speaker 5:I believe he did bring the butt pillow.
Speaker 2:It seems like he's not making progress progress on the food front. I would expect by day seven of this, he would have a smorgasbord in front of him. A full Thanksgiving.
Speaker 1:I mean, honestly, like Nathan for you where he brings chili into that? Got the chili chili soup.
Speaker 2:You should should bring chili soup.
Speaker 5:I was I fasted the whole time. I just kinda I just Why
Speaker 2:didn't you figure it? We we have talked about the food situation so many times. How did you not think ahead there?
Speaker 5:I just wanted to make it more challenging.
Speaker 2:Okay. Yeah. I was like,
Speaker 5:this is gonna be too easy.
Speaker 1:Inspire you to try parse this chili the chili man.
Speaker 2:If you have it, we can also play what's the other video? The the Hamilton musical has has been adapted. People are are are taking this in all different ways. Has anyone done a
Speaker 1:I have a video here.
Speaker 2:A Korn remix of it. The Hamilton one is Let's play the let's play the the the Hamilton one. Altman, an AI music experiment from start with Chili because
Speaker 1:I think the trial is going for another couple of weeks.
Speaker 9:Onboard. So later that week, I hired a professional tailor to help design the Chili suit based on a detailed sketch I had drawn.
Speaker 2:The easiest way is probably to put the chili in. Guess Tag my guys' right? This is how he Sure. Can make it The
Speaker 9:plan was to have the chili reservoirs mimic the distribution of fat on a larger man's body, so it wouldn't look suspicious under clothing. And with the help of Why
Speaker 2:is he bringing chili into he going into a No.
Speaker 1:He's helping a local business. Sell chili. Sell chili in the stadium.
Speaker 2:Philly in the stadium. That's right. Mhmm. You can probably do like a cup there. Right?
Speaker 2:Yeah. Yeah.
Speaker 1:Alright. Skip ahead. Skip ahead.
Speaker 9:Yeah. They cold over a 100 servings of fresh chili.
Speaker 2:A 100 servings?
Speaker 9:Individual reservoirs would be linked by a network of tubes that would all to a battery powered peristaltic pump for dispensing
Speaker 2:the jail.
Speaker 1:If somebody doesn't do that, the trial is going for another couple weeks. If somebody is not
Speaker 2:I think you might I think the bailiff might actually just send you straight to jail. To a toilet. Did this. I think the judge
Speaker 5:There were surprisingly little high jinks going on. I thought there would
Speaker 2:be way
Speaker 5:more high jinks. I really Like, you know, like, one dressed up in a costume or anything.
Speaker 2:Yeah. We were there Elon fans?
Speaker 1:I mean, it actually is quite possible someone is doing this,
Speaker 2:and we
Speaker 1:just don't know because it's such a good idea, and they're True.
Speaker 2:They might just be enjoying Chile. Were were were there Elon fans? That was something Mike Isaac was talking about. Like, people oh, I I guess Elon's not on the stands, so, like, why would the fans go. Right?
Speaker 5:Yeah. I I don't think they're
Speaker 2:right Elon fans. Purely.
Speaker 5:Because he he was not even there.
Speaker 2:Yeah. Okay. Yeah. Yeah. So Okay.
Speaker 5:So no one there. I I think there's gonna be more testimonials soon with with some higher named Yeah. You know, higher
Speaker 2:I Ilya is getting on the stands, so that'll be a big moment.
Speaker 5:Yeah. I believe Ilya is is early next week Monday or Tuesday.
Speaker 2:That'll be interesting. And did you go two days in a row or just
Speaker 5:I just went one day because Wednesday, the people testifying, I think, were, like, not gonna be as interesting.
Speaker 1:Oh.
Speaker 5:But you may maybe that's a diss, so I apologize.
Speaker 2:Okay. I think everyone's everyone's equally deserving of some attention, especially if there's a nice warm bowl of chili being served in the courtroom. Anyway, should we play this Altman AI music experiment from Daniel Green, the the Hamilton recreation of the texts? Everyone has enumerated their various their various techniques.
Speaker 1:Brian says, John, you should go to the trial dressed as Iliad.
Speaker 2:Oh, yeah. I do have the costume ready to rock.
Speaker 1:It only takes five hours to set up.
Speaker 2:Get up at 2AM, then go stand in line. I think I'd get kicked out immediately. Anyway, let's play this. I wanna hear this.
Speaker 1:How does a startup founder, late stage, get fired by a board on a Sunday?
Speaker 2:Oh, so it's actually like
Speaker 1:Can please officially invite me to the office for a meeting
Speaker 2:it's not the direct quote to the text.
Speaker 1:Agree to a configuration.
Speaker 2:Or maybe it is.
Speaker 1:He is now saying they need till end of day. Sat
Speaker 2:This is much more Uncanny Valley for me. This doesn't sound like a real musical in the same way that the pop punk one sounded pretty accurate. I don't know. On with the net? Are you on with them?
Speaker 4:Not yet.
Speaker 2:We can move on to some other news. Deep seek is raising a monster $7,000,000,000 round at 50,000,000,000
Speaker 3:valuation making
Speaker 2:it China's largest ever AI raise. But what shocks a Jaws here, CryptoPN, the most is the founder. He's personally contributing 40% of the round himself. Wow. 3,000,000,000 coming from the founder directly, owns 90% of the company, unheard of at this valuation.
Speaker 2:DeepSeek was founded inside of his hedge fund, one of China's most successful fund. What a beast. He's gotta acquire as much compute to push out new DeepSeek models. You know, we saw that chart that showed that, Chinese open source models were sort of falling behind a little bit on a different growth curve in terms of performance. But, you know, he's certainly betting on getting back in line having a, you know, frontier model within a within a couple months.
Speaker 2:Oh, Tess has an interesting idea. If I was running a frontier lab, I would have the model versions count
Speaker 1:down. Ominous.
Speaker 2:Extremely on ominous. Be like, yes, we're excited. Version three now. And next year version two. Somebody would do that.
Speaker 2:Well, folks over on Amazon are reviewing The Art of War by
Speaker 1:One one star. Star. Nothing but common sense. How this became a classic is beyond me. So much of it is common sense to the point where it brought out my snarky, no kidding reflex.
Speaker 1:Like, if an enemy leaves a door open, you must rush in. Wow. That was deep. Keep your money if you're thinking of buying it.
Speaker 2:That's very funny. Leaving a bad review so my enemies don't read it. Yeah. That's the game theory. Zach Brock says, congrats to Anthropic for defeating Grok in the market and feasting upon the compute of their fallen enemy.
Speaker 1:Yeah. Basically, every time we take every time we take a day off
Speaker 2:Yeah.
Speaker 1:The show, like something big happens.
Speaker 2:Yeah.
Speaker 1:And that on Wednesday Yeah. Was the was the The big reveal. X AI or SpaceX Anthropic deal. Yeah. A lot of people have been predicting that.
Speaker 1:I I was not simply because I thought there it it was like the rational decision
Speaker 2:Mhmm.
Speaker 1:For the parties. Mhmm. But I thought that the tension between, you know, Elon who had only a couple months ago been hurling insults at the Anthropic team. I didn't think they would be able to uncover that those cultural differences. Totally.
Speaker 1:But could, you know, demand for compute finds a way.
Speaker 2:Yeah. I think that you and others had identified the possibility of becoming a neo cloud, selling the compute last
Speaker 1:year, I was talking about that a lot, all the time. Was like, look, they're incredible at building infrastructure really, really fast. Bringing power online. This feels like a very strong a strong use for Elon Inc. Yes.
Speaker 1:And but I but but as things evolved, I just didn't see I didn't see this coming together.
Speaker 2:I didn't see this coming together specifically because of the cursor deal. I thought the cursor deal was the long term solution for all that compute and then the compute sort of got sold twice maybe. But, of course, there clusters, multiple colossus data centers Yeah. And plenty of work to be done as SpaceX continues to grow their ambitions artificial intelligence. Well, we have our next guest, our first guest of the show, Josh Reeves from Gusto in the waiting room.
Speaker 2:Let's Big news. Bring him in. How are you doing?
Speaker 6:Good to
Speaker 2:see you guys. Welcome back to the show. Always great to
Speaker 5:have It's
Speaker 6:good to be here. It's it's a fun time to talk tech. It's a lot of Yes. Big moves happening.
Speaker 2:A ton of big moves.
Speaker 1:Yeah. In last year. We've had a decade's worth of big moves. Yeah. So progress.
Speaker 6:There was a time when when Silicon Valley was a cottage industry. Not anymore.
Speaker 2:Yeah. A garage industry and now, the largest companies in the in the world for sure. Well, your business is growing. You're quickly becoming one of the largest businesses in the world. You also power, tons and tons of American businesses.
Speaker 2:Give us the update. How are things going?
Speaker 6:Yeah. Excited to be here. I think probably what you're alluding to, we shared a milestone. To me, it's all a byproduct of of helping customers, helping small businesses. But but, yeah, we, passed, actually a few months back, a billion dollars of trailing revenue.
Speaker 6:So Woah.
Speaker 1:Did you hear that, John? Trailing. That's not something you see very often. People want to take today's revenue, multiply it by 365 and and leave it Obviously Talk about
Speaker 6:is is much higher, but yeah. Trailing
Speaker 1:Yeah. Yeah. Talk talk about that. Talk about that decision.
Speaker 6:Yeah. I think for us, I mean, we we when we started this company now over a decade ago, you know, I said, always start with a problem, something you need to go fix. You have to create a solution, actually show it works, but then you have to have a a business model where your unit economics, how much it costs you to serve them, how much it costs you to acquire them makes sense. Otherwise, it's kind of like gambling. So at Gusto, you know, we've been free cash flow positive too for for a number of years.
Speaker 6:We reinvest that money to build more product. But we knew the the potential was there to be at this milestone and frankly much much further. There are 6,000,000 employers in America and two thirds of them are less than five employees. Small businesses are a huge part of the economy. So, yeah, we're excited about this milestone, but much much more work ahead.
Speaker 2:So cash flow positive reporting trailing twelve month revenues instead of ARR. These these all feel like real strengths to eventually go public around at the same time.
Speaker 1:Monday, you should report ARR. Come back on Monday. Yeah.
Speaker 2:But but but at the same time, like, it's an incredibly tumultuous time in the public markets. There's winners and new favorites every day. Everyone SaaS pocalypse narratives. Like, how are you thinking about the benefits of being private right now versus potential future in the public markets?
Speaker 6:Yeah. I mean, our our focus is on just execution. I would not expect Gusto to be private in the near term. Let all the big big folks sorry. Public in
Speaker 2:the near term. Yeah. Correct. What are you announcing here? No.
Speaker 2:I would not expect us to stay private. Yeah.
Speaker 6:I will leave that all to like the SpaceX and Anthropix Yeah. The AIs in the world. There's lots of good noise in that. Yep. I I would say like we're going through this massive paradigm shift in how AI affects not just like our product for example and how we help small business, but also how a company is run, how a company is built.
Speaker 6:And so that is where I'm spending all of my time. It's an exciting time to be spending focus there. It actually is is a net net pretty big tailwind, Augusto.
Speaker 2:Yeah.
Speaker 6:But, like, absolutely no plans to be public in the near term. Super focused on small businesses and execution. And at some point, the timing will make sense. But, yeah, we haven't had any of that process get started.
Speaker 1:We covered the April jobs report this morning. It surprised a lot of people to the to the upside. What are you guys seeing in in your data? You guys basically have a have a a forwards view at least on the
Speaker 2:Yeah. To to to set the table, the Wall Street Journal had pulled analysts' expectations were at 55,000 new jobs, and the number came in at a 115,000 after a very strong March as well. And so things are although there's so much anxiety, so much uncertainty about the future of the American economy, at least over the last few months, things have been looking strong. But we've seen revisions before. I think there's a lot of questions about, as you dig into that data, what's going on.
Speaker 2:And so we'd love to know what you're seeing internally.
Speaker 6:Yeah. So two stats we look at quite a bit. There's the kind of state of new businesses being formed, new employers. Obviously, companies can exist before having an employee. And then there's the state of hiring across the base of customers.
Speaker 6:I would say, you know, on the customer small business hiring front, things are more depressed over the last few years, and that's continued relative to, call it, the last decade, if you will. We think there's many parts of that, including some of the effect of AI on, on frankly company growth rates. On the flip side, we are seeing a lot more new businesses being formed and new employers out there. And that's showing up in our data, that's showing up in a bunch of third party data. We think that's a really good thing.
Speaker 6:Know, there's a there's a scenario with what's happening in AI. We call it the happy path where a lot of people decide to take the plunge and become business owners. Yeah. You know, the non happy path to me is is the Pixar movie Wall E, which is a future I hope we avoid.
Speaker 2:Yeah. How have you been how have you been thinking about getting to customers and small businesses earlier? Like, have you ever explored trying to meet customers before they incorporate, help them with incorporation, anything that gets you into the the system. His gusto, I feel like, always one of the first Yeah. Tools, but it sometimes happens like a month after
Speaker 1:I mean, one one really dynamic is you're you're paying, you know, millions of employees, many of of whom will go and leave company.
Speaker 2:Oh, yeah.
Speaker 1:Like, I had a good experience on Gusto. Yeah. Should I pay myself? I'll use Gusto. Yeah.
Speaker 6:I mean, first off, the biggest way we grow is word-of-mouth and often it is from not just the employer but the employee. Also, we'll have people join Gusto and ask how you heard of us, and they're like, was paid through Gusto. So we don't try to recruit from our customers, but sometimes it happens, it's a wonderful dynamic where they truly, truly get the value of the product. To answer your question directly, absolutely. Like, we we think payroll is one of the best products out there when you're hiring someone.
Speaker 6:Obviously, if you don't pay them, they quit. So it's a really important front door for that interaction. But there's a lot of companies that exist as one person, the founder, for some period of time. And so we have an offering we call Gusto Solo that's very focused on that. Mhmm.
Speaker 6:Turns out, know, the founder still needs to pay themselves. There's specific tax dynamics at play. There's a lot of compliance requirements. We acquired Mozy to help with expanding our work around business compliance. So all those kind of headache compliance things that you still have to do as a one person company, Gusto is going to be increasingly a great, great partner to help with.
Speaker 6:And then when that business owner decides to hire an employee, obviously, we hope they continue their relationship with Gusto. But stay tuned. We're going to be launching some more products in the next several months, really focused on building that relationship more deeply with employers or even businesses before they become employers.
Speaker 1:Yeah. Do you think the are you expecting the velocity of new product releases from Gusto to go up an order of magnitude in the next few years? Or do you do you see it as a smaller of a smaller family of products with a bunch of and higher velocity of like new feature creation?
Speaker 6:Yeah. I was like, few years. Next give me the next few months. It's fun to be accelerating. I think of it as as this is the most amazing time to build.
Speaker 6:People can smaller teams self serve, iterate faster, maintain high quality, but just literally velocity is increasing dramatically. So we apply that to both breadth and depth, to answer your question. So within the world of what we do, whether it's four zero one k, health benefits, payroll, people getting paid when they want, how they want, where they want faster, We're excited to be doing a lot more work there, but absolutely expanding the breadth of the product, it's still way too hard to be a small business owner. So you will see a lot more new product launches coming from Gusto in the coming several months. Things that we maybe thought of as like the next two to three years, I now think of as the next, you know, three to six months.
Speaker 6:And it's it's really fun to say that and actually then back it up and see it happening.
Speaker 2:You one one question that I've been having is we've seen like LLM usage exploding is the shape of LLM spend across a software engineer who fires off a coding agent, builds something that's new but it is deterministic code that runs in perpetuity, new features, new designs, new copy versus LLMs that are baked into an existing work stream where every time payroll runs there is a trigger and it is not something that's fired off by an employee. And I don't know if one of those is more agentic or we need a different word for those, but can you kind of characterize the shape of those two applications for AI right now?
Speaker 6:Yeah. I mean, maybe a couple of cuts on that. Like, I think new product development generally more accelerated, dramatically higher velocity with AI. Yeah. If you have an existing product, existing code base, there's just by definition more of the dynamic of, you know, building the train, rebuilding the train, running the train at the same time, accelerating the train, laying the tracks, kind of all in parallel.
Speaker 6:So I think it's more complex on existing product surface area. Yeah. So that's one cut. I think on the kind of cut around the ongoing interaction dynamic, I guess we've always believed, since we're serving small business, that, you know, what we do, it's mostly compliance centric. It's just better done by technology.
Speaker 6:Right? Yeah. You think about the potential for human error, whether it's from the customer or a guestie, we want to have as much of that as possible be codified into software, into a system that can scale, that can do it repeatedly, that can do it in millions and millions of situations. To your point, some of the newer technology is obviously not fully deterministic, so then having the right evals, having the right feedback loops, having the right review and audit process is super, super critical. So as we do all this velocity acceleration, you can imagine there's a lot of focus at Gusto on not just maintaining, but actually improving the quality of what we do and the accuracy and the reliability for our customers.
Speaker 6:And it does feel like it can have a win win win outcome here where Yeah. The product gets easier to use, it gets even more accurate and reliable, and actually we can build and ship it faster.
Speaker 2:Yeah. Do you do you have a do you have a feeling for which bucket is bigger? Because I can imagine LLMs being very useful to scan every PDF and do translation and do things on an ongoing basis baked into the systems that you've versus augmentation and amplification of engineering efforts and design efforts. Do you have an idea of, like, in terms of spend, which one's bigger or where it goes?
Speaker 6:Yeah. I mean, I would say for us, most of the ongoing systems and how they run, if you're talking about the back end, don't generally involve a lot of LLM technology. Then those are probably efficient
Speaker 2:too. Right? Because even if you Yeah. Do use an LLM to process a PDF, well, you can pretty efficiently get to some sort of, you know, small language model that tailored and probably pretty cheap. So
Speaker 6:Yeah. Yeah. Mean, that's a world where you want accuracy or liability and it's pretty deterministic. Yep. I think like if you look at risk, if you look at
Speaker 2:Yeah.
Speaker 6:Things where you have to make more
Speaker 2:Rescue the
Speaker 6:judgment, that's where I think LLMs can actually compliment humans quite a bit.
Speaker 2:Yeah. Makes That a lot of sense. Jordan, anything
Speaker 1:else? Incredible update.
Speaker 2:Yeah. Congratulations.
Speaker 1:Focus on everything is incredible. Intentionality, the humbleness of of looking backwards versus forwards.
Speaker 5:It's kicking.
Speaker 1:I love it all.
Speaker 2:I love it.
Speaker 1:To catch up, Josh.
Speaker 2:Well, thank you so much for taking the time to come on the show. We'll talk to you soon.
Speaker 6:Yeah. Talk to My pleasure. Talk to soon.
Speaker 2:Have a good one. Take care. Goodbye. And up next, have Jonathan Neman from Sweetgreen.
Speaker 3:Alive with us in the TBPN Ultra Dome.
Speaker 2:Welcome to the show. How are you doing? What'd you bring us today?
Speaker 8:What'd you
Speaker 2:bring us today? Brought lunch?
Speaker 8:Brought you lunch.
Speaker 2:Fantastic. What is it? What are you launching? Give us the updates.
Speaker 8:This week we launched probably our biggest new category
Speaker 2:Yeah.
Speaker 8:In comfy history. We launched wraps done in our own way. So we spent about a year designing a custom tortilla with four ingredients. Mhmm. Most wraps in the market, about 22 ingredients
Speaker 2:Yeah.
Speaker 8:Full of seed oils, preservatives, etcetera. So really wanted
Speaker 1:Yeah. I had a devastating moment yesterday where I was eating a box of crackers, like the the sort of default cracker in my household. And they they updated the ingredient list
Speaker 2:Mhmm.
Speaker 1:Without without me realizing. Because like when I bought them, they were seed oil free. And then some point in the last like two years they added it. And so I looked down at the ingredients list and I was like, no. I just walked over to the trash and devastating.
Speaker 1:But anyways, continue. Yes. Four ingredients.
Speaker 8:Yes. So we created a tortilla, four ingredients and and launched wraps this week. So we launched with four signature wraps. Anything can be customized. The response so far has been awesome.
Speaker 8:Mhmm.
Speaker 10:We
Speaker 8:launched it on Wednesday. We brought you three of them to try. You guys wanna give them give them a give them a taste.
Speaker 2:Fantastic.
Speaker 1:On on air on air taste?
Speaker 8:On air taste. Yeah.
Speaker 1:We'll give it a try.
Speaker 2:What was this customer pull? Was there demand for this? Like how how do you measure that like now is the right time to launch a new product?
Speaker 8:Yeah. So we wanted to reach kind of different customers in different occasions.
Speaker 1:Mhmm. And one
Speaker 8:of the things we heard from our from our guests is they wanted something that was portable. They also wanted food that, you know, was healthy but a little bit more craveable. Mhmm. So this is one way to to get
Speaker 1:stated versus revealed preference. Yeah. Just like you wanna eat healthy Mhmm. Maybe you wanna eat a salad but sometimes you just need something that feels like a bit more dense.
Speaker 2:Exactly. And and how does that feedback actually get to you in practice? Is this like interactions with cashiers and they're taking notes or are you sending out surveys afterwards, polling customers, doing like, you know, some in store marketing that
Speaker 1:Yeah.
Speaker 2:Someone standing there and they're asking people about their experiences?
Speaker 8:Yeah. We do a lot of things in order to get feedback. One is and let see which one you got there.
Speaker 2:Who?
Speaker 8:This is the chicken jalapeno ranch dipping sauce on the side.
Speaker 2:Fantastic. What else you got here?
Speaker 1:Fantastic. We never get a lunch break.
Speaker 2:We don't. We don't. This is chicken Caesar.
Speaker 1:Chicken Caesar. And
Speaker 8:then you got Cali Chicken Club.
Speaker 2:Fantastic. So a
Speaker 8:lot of ways. You know, one thing I say all the time is all the restaurants, all all the answers are in the restaurants. Okay. Spending time in the restaurant, actually talking to guests. We also do a lot of, you know, traditional things like focus groups, etcetera.
Speaker 8:Recently
Speaker 1:Do you ever go do you ever go undercover?
Speaker 8:I do go undercover a lot.
Speaker 1:Like behind the counter?
Speaker 8:Oh, all the time.
Speaker 2:All the time.
Speaker 1:You wear
Speaker 8:a mustache? I spend about, you know, a third, probably like a quarter of my time in restaurants Wow. Talking to customers, talking to team members. I get all, you know, really I get all my best feedback there. Both how to make the experience better for guests, but also how do you make it easier to run from a easier to run from a team member perspective.
Speaker 8:We do a lot of social listening from a feedback perspective. Okay. And recently, about a year ago, we started working with a company I think you featured here, Listen Labs.
Speaker 2:Oh, yeah.
Speaker 8:We're one of their first customers.
Speaker 6:Mhmm.
Speaker 8:And it's it's helped us accelerate our time to feedback by about 10 x and about half the price. And so, you know, this is actually one of the first
Speaker 1:it's been a while since we've had Listen Labs on, but basically there's like a like, what what are the core features of the product again? It's social listening, but then also like surveying?
Speaker 8:It's it's surveying focus groups and insights. So in in, you know, typically when you do a focus group, takes a long really a long time to get it set up Mhmm. And, you know, it can take weeks to get that feedback. With Listen Labs, we can get a diverse cut of customers by demo, you know, age, psychographic group, geography.
Speaker 1:I feel so rude.
Speaker 8:No. And Come so and so that's been a really powerful way as well. And then social listening is is huge, you know, just seeing what people are saying online. Yeah. And then you look at the competitive landscape and where business need is.
Speaker 8:You know, we do really our business does really well Monday through Thursday, you know Oh, yeah. When people are looking to be healthy and then you see it on Friday calls Oh, off Yeah. Of it and Saturday. Yeah. So it's how do we have that cheat meal that you could still feel good about?
Speaker 2:Oh, sure. Sure. Where in in social listening, like where is the Sweetgreen community? Where are people actually having conversations that are valuable?
Speaker 8:TikTok and Instagram. TikTok and Instagram. TikTok. I mean and Not Reddit. You know, Reddit as well.
Speaker 8:Can surprised how how much juicy information is on Reddit.
Speaker 2:Yeah. So social listening, how how manual is that versus like scrape TikTok and transcribe everything and roll it up?
Speaker 8:It's not manual at all anymore. Okay. So a lot of software Interesting. Into it. Yeah.
Speaker 8:I There's a lot of companies that are offering this now. Yeah. We've looked at it. We've tested a bunch of Sure.
Speaker 2:Sure. Sure. And is it valuable to find stuff that's not viral but still on TikTok? Like the the TikTok creator or just like person that expresses themselves through TikToks or vertical video to loosely just their friend group. Like they don't have a following.
Speaker 2:They're not a professional creator. They're not making any money on it. But like when like like someone would post a photo on Instagram, they post a front facing TikTok. Is is is is that as valuable as the big creator that goes viral for some like dunk or stunt or hot take or something?
Speaker 8:Yeah. You wanna find it before it goes viral. Mhmm. You know, like there's this thing going viral on TikTok right now about this chimichurri steak bowl. Like the Jim bro Yeah.
Speaker 8:Yeah. Yeah. And, you know, we should have done something with that but we should have done it a month ago.
Speaker 2:What is there to do with something like that? Like I feel like a lot of times, if there's something that's good that's organic that's happening like you step in as the brand or the corporation like you risk like making it uncool and corporate.
Speaker 8:Well, for us, if it's something we could actually serve, like that happened to be something that we can put on our menu.
Speaker 2:Oh, sure. Sure. Okay. So you make a change on your world. You're not trying to go and like create your own content around it.
Speaker 2:Them do it.
Speaker 8:We would create content and then I can serve it.
Speaker 2:Yeah.
Speaker 8:Yeah. So we put a video out this week on it Mhmm. To see what happens and if Yeah. The reaction's good. We'll actually put that on the menu.
Speaker 8:We have all the ingredients.
Speaker 2:Yeah. It's effectively That's
Speaker 8:bowl without lettuce or any grains. It's just steak, cucumber tomato, onion, know, That's cheddar great.
Speaker 2:I've seen random videos of focus groups. Do they really do a one way mirror or two way mirror, whatever that is, where like they can't see you but you can see them? Is that a thing? Have you ever built one of those?
Speaker 8:When I do them, I I actually like to sit in.
Speaker 2:Okay. So just sitting in a room.
Speaker 8:Yeah. Just sitting in a conference room. Okay. When we when we tested wraps, brought in Mhmm. We brought in customers every day for a week groups of customers and just tasted them.
Speaker 8:Tasted them a few different ways Mhmm. Really to understand, you know, how important was the sauce on the side, how important was it to get cut, like little details. Like for example, we we decided the wrap was best when you had it mixed first and cut. Yeah. It sounds like such a stupid little detail, but it has huge operational implications.
Speaker 2:Mhmm.
Speaker 1:You mean, the ingredients mix? Yeah. So Yeah. Because that's a that's a worse that is my least favorite part about any wrap or burrito, is you get in there and it's all like spaced out. So you have like avocado bunched over here Yeah.
Speaker 1:Yeah. Exactly. All the chicken over here and then like rice or whatever and it's like you're you wanna be having the full blend with every bite. That's exactly right.
Speaker 8:So it sounds like such a small minor detail, but huge operational implications. Yeah. We also had to figure out how to make this work in our Infinite Kitchens. You know, over 10% of our fleet and growing is powered by the Infinite Kitchens.
Speaker 2:Mhmm.
Speaker 8:How do you make this this, you know, work in that operation as
Speaker 2:well? Mhmm. How are you thinking about other verticals like like I don't even know what you call it. Like prepackaged in in other grocery stores or consumer packaged goods or like product like extensions outside of the the the retail stores?
Speaker 8:We're really focused on our retail stores
Speaker 2:Okay.
Speaker 8:And the experience. We don't we know so much of what we do is based off of the scratch cooking we've been doing Yeah. Restaurants. So we're really afraid of extending that out Yeah. In the retail and
Speaker 2:You don't wanna get into like salad dressing at the grocery store?
Speaker 8:CPG is something we'll eventually get.
Speaker 2:Okay. You'll you will.
Speaker 8:Yeah. We we think CPG like, you know, dressing being an category. Yeah. You know, right now really focused on the core business, but eventually Mhmm. That's definitely a category.
Speaker 1:Was was my my my immediate reaction to this is it's it's it's incredible. We'll add it to our our our reoccurring lunch orders. It reminds me of Chipotle in like twenty two thousand and five to 2010, like some of the best vintages. Some
Speaker 2:of vintages.
Speaker 1:Seriously back back then it was I I yearn for that time when you could just go into any Chipotle and eat something that actually felt that tasted like fresh and clean and a small number of ingredients and they had such an extreme commitment to that. And and somewhere along the way, I just I just stopped going because it didn't it didn't feel like that anymore. But but that's that's my review. To me to me, the best food the best prepared food product that was widely available in history was that, you know, 02/2010 era Chipotle.
Speaker 8:It's funny. That was kind of the inspiration for Sweetgreen in
Speaker 10:a lot
Speaker 1:of ways. I was Yeah.
Speaker 8:In college, you know, 2005, seeing Chipotle take off, eating Chipotle all the time. And the idea was to create just kind of a healthier, fresher version of that. Yeah. And the one you ate, the chicken jalapeno ranch is, you know, it's effectively a burrito. Yeah.
Speaker 8:Some of the other ones are more it have lettuce in them. That one is, you know, rice, avocado, chicken, corn.
Speaker 1:I saved you a half.
Speaker 8:Yeah. And I brought you guys more as well. Amazing. About the wraps is they start at $11. Okay.
Speaker 8:So we were also, you know, given where the consumer is today. Yeah. Really trying to create something that can, you know, meet their needs today. It can be something that you can eat every day. So the chicken Caesar
Speaker 2:Yeah.
Speaker 8:In some markets is all the, you know, all the way down to $10.45 Mhmm. And no wrap is above $15.
Speaker 2:Mhmm.
Speaker 1:Yeah. Let's talk about that because we have consumer sentiment right over I think there was some reporting over the last couple days. It's like as bad as it's been in like a really long time. Stock market at all time highs, like insane disconnect there. Jobs report today came in, better than expected, but, ultimately, consumers aren't feeling great.
Speaker 1:Part of, I guess, part of the approach there is, you know, introducing products like this that, you know, are high calorie or not high I don't know if you describe them as high calorie, but maybe higher calorie and great value. But what else what else are you doing across the business?
Speaker 7:I think
Speaker 8:the key is around the experience. You know, in restaurants, fundamentals win championships. So it's really about delivering a consistent experience around quality and hospitality. And that gives you the opportunity to layer in the menu innovation. So right now, we've been very focused on innovation for a while and right now we're really just trying to dial in the basics.
Speaker 8:It's what you talked about Chipotle. Yeah. It's like what what made you love it wasn't all the new stuff that they're now doing.
Speaker 5:Yeah.
Speaker 8:It's just being really excellent at
Speaker 1:the consistent.
Speaker 8:It's making sure the quality is there, you're not out of stock on things, you're staffed at peak, people are, you know, smiling, friendly and warm. It's all those little things which create Yeah. You know, the system behind that is highly complex, but it's all Yeah. That really creates
Speaker 1:Yeah. So so put another way, Sweetgreen, you know, started in, you know, as like my view is like it's it has the DNA of a technology company and maybe that drove you guys at some point to focus too much on on on like on the things that ultimately don't drive always drive that consistency. Does that feel like somewhat
Speaker 8:Yeah. I'd say the, you know, early on in like the twenty tens, the technology side of the business from a consumer perspective was an advantage. It was was a competitive advantage. Yeah. We were the first ones to have digital ordering Mhmm.
Speaker 8:Delivery
Speaker 2:Yeah.
Speaker 8:Mobile payment, all that stuff. It's it's pretty much been commoditized. Yeah. For the most part Yeah. All restaurants have it.
Speaker 8:Yeah. I You know, think our digital experience is better than most, but at the end of the day, you can order online anywhere.
Speaker 2:Yeah.
Speaker 8:Do have a technology infrastructure that allows us to scale. So if you look at like our G and A, it has it's been flat or down for five years. So as we continue to scale, a lot of the tools we've put in place and now with how we're leveraging AI, like we can continue to scale without adding headcount Yeah. And our data and reporting and all the tools we have to manage our kitchens are really incredible. Like we have tools that, you know, kind of predictive ordering for how we order food.
Speaker 8:Mhmm. You know, predictive apps that teach us, teach our teams or guide our teams as they make the hot food and the cold food. Because what's different about Sweetgreen is we pretty much make everything in the store every Yeah. Single day.
Speaker 5:Yeah.
Speaker 8:But to your point, at the end of the day, it, you know, it's it's about But you can't get
Speaker 1:you can't start spending maybe you're spending half your time on innovation, half your time on like the the basics.
Speaker 8:It's yeah. It's it's probably even more so on the basics right now. Yeah. It's on delivering on a great consumer experience. Someone asked me the other day about how we build our brand.
Speaker 8:And, you know, we do a lot of stuff, culture, social media, events, all great. But the way we build our brand at the heart of it is just creating an experience that people love. Yeah. It's an environment, a store that looks beautiful, clean. Yeah.
Speaker 8:It's, you know, a team member that goes out of their way and is friendly. It's a culture of like saying yes when someone wants something that's a little bit weird. Just figuring out, you know, that how to say yes to that customer.
Speaker 1:No. There's nothing worse as a customer if you're in in like a fast casual experience and you can see everything that's in the store. You can see all the ingredients and then you ask for something and they say, well, that's not available. And it's like, well, you're you're just making a
Speaker 2:call
Speaker 1:on
Speaker 2:the
Speaker 1:fly not to combine those things in the way that that I
Speaker 2:Put the pizza in the deep fry. I know you have both.
Speaker 8:So our our our team knows it's a culture of saying yes. Figure out a figure out a way to say yes. Take, you know, take care of the guest. And I remind our team all the time, our number one marketing channel is word-of-mouth. 80% of people find out about Sweetgreen through a friend, family.
Speaker 8:You know, it's the fit, know, they walk by a store, they had a good experience and they come back. Like our critical metric that we use in in tracking like the health of how we're doing is what we call our comeback rate. So of customers that come in, how what percentage come in within thirty? What percentage come back within thirty days?
Speaker 2:Right.
Speaker 8:And we can now track that across analog and digital customers and we've kind kind of gotten the whole organization aligned around, you know, from the people making the menu, people running our loyalty and CRM, and most importantly, the people in the in the restaurants. Like your number one job is delivering a great experience where that guest comes back, because that's what drives that long, you know, that lifetime value.
Speaker 2:Where was the first store?
Speaker 8:First store was in DC in Georgetown.
Speaker 2:Yeah. What was what was the key to making it work?
Speaker 8:Key to making it work, I think originally, was probably the simplicity of it. Yeah. You know, originally, the idea was create a healthy fast food restaurant, but the size of the first store was 500 square feet. So small store, but great location? Small store, good location.
Speaker 8:Good traffic. Had to keep the the keep the operation pretty simple in order to execute it. And I think just, you know, we were maybe lucky in the naivete, we had never worked in restaurants.
Speaker 2:Yeah.
Speaker 8:And so we were able to approach things a little bit differently Yeah. And create a brand that just didn't look like the other brands, whether it be how we sourced Yeah. You know, how we went to market in the early days. It's, you know, like one of the things that helped build the brand was we threw a big music festival for eight years. Wow.
Speaker 8:It was like, you know, we threw a 25,000 person music festival with
Speaker 2:Huge.
Speaker 8:You know, like The Strokes headlining. And the idea was how do you make healthy eating cool.
Speaker 2:Is that within reach for some brands? Like what's the cost to throw a 25,000 person music festival? Do you charge tickets?
Speaker 8:We charge tickets.
Speaker 2:Okay. So
Speaker 8:it was technically a break even event.
Speaker 2:Oh, that's cool. Okay. Yeah. Yeah.
Speaker 8:It's called the Suite Life Festival.
Speaker 2:Okay. Great. Yeah. Any plans to bring it back?
Speaker 8:We are looking at it. We have our twenty year anniversary next year and so we have some some some ideas.
Speaker 2:Yeah. Where's where's the store footprint these days? Almost 300.
Speaker 8:We'll end this year with 300 restaurants company. And
Speaker 2:do you have a Target? Do you wanna grow that?
Speaker 8:Yeah. If you look at Chipotle, they're at about 4,000. They give a target of 7,500 stores in The US. Okay. So, you know, our first target is a thousand stores, but we think over time should be able to get to about 5,000 units in The United States.
Speaker 1:Yeah. The I I always appreciate looking at the forecast for some of these some of these brands, whether it be Starbucks or Chipotle, because in our in our chaotic modern world, everyone's like, it's so hard to plan more than two years out, especially in tech. Everyone's like, it's hard to see two years out. And if you look at, like, the forecasts of store growth, it's like Chipotle is like, in 2030, we will deliver exactly, you know, 200 new doors across these geos. Was like, you actually can, like, think long term, like, consumers are still gonna wanna eat food.
Speaker 1:They're gonna wanna eat healthy food in two thousand and thirty, 2035, 2040, and, you know, taking that long view, I think, is is super important.
Speaker 8:In in the ADAMS development world, like, we're already building our 2028 pipeline, and we're looking at 2029. You you have to get get ahead of it when you do a lot of ground up development, building drive throughs. Yeah. That sort of thing, you're you're about two years ahead.
Speaker 1:You're doing drive thrus now?
Speaker 8:We do. Yeah. We have a handful of drive thrus. They do really well. We actually just opened our first drive thru featuring an Infinite Kitchen.
Speaker 8:It's close by. It's in Costa Mesa here.
Speaker 1:Yeah. How nice.
Speaker 8:It's awesome because now you have the power of the Infinite Kitchen from a speed perspective with the drive through. Store store is doing awesome. So it's a model for the future.
Speaker 1:Why have you never done anything in Malibu?
Speaker 8:I would love to do Malibu. It's probably my favorite place in the world. Doesn't really have the the density Yeah. From a consumer perspective
Speaker 1:been my so I so I've lived there for coming up on five years. And early on, every time I would leave Malibu and go to somewhere else, I'd go to Montecito. There's like much better restaurants Yeah. In my opinion in in like Montecito, Santa Barbara, some of these other beach towns. And I was trying to figure out why and it's entirely because the town is spread out, like you said, the density, it spread out on this huge line.
Speaker 1:Yeah. That was my intuition. Obviously, I don't have restaurant experience. But you can put a restaurant in Malibu, but it's still like forty minutes in the car for like the average person in town, potentially. Because you have to like get on PCH and drive like miles and miles and miles.
Speaker 1:And if there's a little bit of traffic, then it's twenty minutes there, twenty minutes back and then it's like, I'm not, you know, people are just like, I'm just I'm not driving for
Speaker 8:The bigger challenge in Malibu is actually the staffing side of it. Yeah. Oh, interesting. It's like nobody in Malibu wants to work for $20.25 dollars an hour. Mhmm.
Speaker 8:Yeah. And so the people that are gonna be coming there
Speaker 2:Absolutely.
Speaker 8:Coming from really far away Mhmm. And that's what becomes a problem. You can probably feel it in a lot of the places you go to. Yeah. I'm sure you can see the staffing
Speaker 1:labor labor, you know, turnover will be higher. Yeah. General, you just have to pay significantly more for somebody to be kids.
Speaker 2:But that that's somewhat limited. So
Speaker 8:Yeah. Limit limited on the the mouth of kids working working at
Speaker 2:the Yeah.
Speaker 1:Yeah. So What How do you like, I'm I'm curious how you spend your time with with, like, the capital markets and investors today. You've been public for a while now. I'm you I'm sure you have have had investors come and go, but also some that you've developed, like, you know, really meaningful relationships with. What is that like as a, you know, public company CEO?
Speaker 8:Yeah. You know, I think we were fortunate before we went public. We had a lot of these kind of crossover investors. Yeah. Investors like T.
Speaker 8:Rowe or Fidelity, Gifford. We're able to build those relationships with and, you know, took long long positions, believed in what we're doing. So that really helped us as we made Yeah. As we made that transition. You know, I I talked to them, you know, our our large investors every quarter Yep.
Speaker 8:And it's like I always say with investors or with anything, it's really the people behind it than just like the name Yeah. The name on the door. Totally. And building trust and confidence in what we're doing. And, you know, I think there's investors that are looking for short term results and there's other investors that really, you know, kind of believe in the long term, believe in the management team.
Speaker 8:And the goal is to just build trust with them over time.
Speaker 1:Yep. Makes sense. Yeah. So no no no, We can't expect like an all birds like local inference provider provider out of of Sweetgreen. I was gonna
Speaker 2:ask because he's been on eBay.
Speaker 8:I mean, that's an amazing story.
Speaker 2:Stories, you could go to Sweetgreen and verify baseball cards to auction them off on eBay.
Speaker 8:It's funny.
Speaker 1:Our our
Speaker 8:COO, Jason, who's been with us about a year, spent a long time of his career working at he was actually the COO of GameStop for for while. He ended up more recently, was at Chipotle.
Speaker 2:Yeah.
Speaker 8:But before that, he was at GameStop from like 300 stores to, you know, 3,000 stores.
Speaker 2:Yeah.
Speaker 8:Wow. So it's been fun watching all of the developments now and and talking to whom about it.
Speaker 2:Yeah. Yeah. We we were looking it up. It seems like GameStop has like shrunk the store footprint a ton about half since Ryan took over five or six years ago. But like wildly different business of digital distribution, like there's a direct competitor.
Speaker 2:You can't you can't download a wrap on your phone like you can a game. And so they've had to change the business model Yeah. Significant amount.
Speaker 8:For me, was interesting learning how much of that business model was dependent all of the margin was dependent on the trade business. So the new releases they didn't really make as much money on all Sure.
Speaker 2:The leverage.
Speaker 8:The the yeah. The came
Speaker 2:from GameStop's famous for being like, oh, you bought that $60 game? We'll give you $5 for it. Exactly. And they sell it for 20 and that's not bad.
Speaker 8:That was and that was business.
Speaker 2:Yeah. Yeah.
Speaker 1:Yeah. What are general real estate trends not just restaurants, but that you're seeing across different markets across The US?
Speaker 8:Drive thrus are hot.
Speaker 2:Yeah. What makes for a good drive thru? Like there's a few in LA, but it doesn't feel like a drive thru city
Speaker 8:is more about zoning
Speaker 2:Okay.
Speaker 8:And and getting the right permits for it and they're not adding more
Speaker 1:drive
Speaker 8:thrus.
Speaker 2:Oh, interesting.
Speaker 1:So you
Speaker 8:have to take over an existing drive thru Yeah. In order to get one.
Speaker 2:I typically don't see big chains yeah.
Speaker 8:And so you're you're competing with, you know, like some of the drive thrus that we've taken recently have been like old jack in the boxes for sure. You know, who are you competing with? Chick fil A, Reeves and Cane's. And they have very high AUVs. Know, some of these, you know, Chick fil A I think there's 8 or so million dollars Mhmm.
Speaker 8:Per restaurant.
Speaker 1:So they can they can just
Speaker 8:outbid They can outbid you. Mhmm. And they need, you know, the acre lot with the, you know, with the egress for the parking. Sure. So drive thrus are really hard to come by Mhmm.
Speaker 8:But we do see a pretty significant lift
Speaker 2:When you get it. You put
Speaker 8:a drive thru in. Interesting. People are really looking for convenience and that's only accelerated Yeah. Since COVID.
Speaker 2:And do delivery drivers prefer drive thru? Is that faster for them? Or
Speaker 8:No. We actually most people actually don't want the delivery drivers going through it. So you have to build a model where you have a separate area. So if go to
Speaker 2:like McDonald's
Speaker 1:or any Because place they're not doing the ordering. They're just doing pick be taking up
Speaker 8:so you have like separate parking spots for the delivery drivers Yeah. Having them come in. Some places are experimenting with the double drive through.
Speaker 2:I was gonna say, is that possible?
Speaker 8:It's possible, but you need so much space You
Speaker 2:need a lot
Speaker 8:of in order to do it. Okay.
Speaker 1:Don't have a lot of space in California.
Speaker 8:Don't and you don't have the space in California. Other you know, I think the thing about what we see in retail is the best streets continue to be the best streets. Mhmm. So like, you know, and we see it like if you look at LA, like, you know, Melrose Place, just like rents continue to go up.
Speaker 2:Because there's more customers and there's more profit?
Speaker 8:More customers. It's it's like there's this this thing about like this these moments and these, you know, condensed attention and traffic
Speaker 2:Mhmm.
Speaker 8:In these great high streets. Mhmm. And so on those areas, prices have only gone up. Everywhere else, the market's been pretty stable. We haven't seen things, you know, collapse.
Speaker 8:We have seen the the biggest challenge we've seen is around what's happened with interest rates because landlords have left less money to give from a tenant improvement perspective.
Speaker 1:Oh, interesting.
Speaker 8:So that's been, you know, the issue there even though there's probably less demand, you know, when they're, you know, interest rates from zero to where they are today, they're not giving you as much improvement allowance. Mhmm.
Speaker 1:Last question. How is the drone delivery market evolving from your view as as an operator, as a brand? Like, are you are you do you expect drone delivery to be, you know, double double digit percentage of delivery orders nationally or in specific markets? Like, how how do you see it evolving?
Speaker 6:I
Speaker 8:think I think what Keller and Zipline is doing is really interesting. Yeah. We've done some early work with them looking at it. It's not something we're hugely focused on right now. Mhmm.
Speaker 8:But they have had some breakthroughs. And so I you know, if you said 10% in the next year or two, I I probably don't see that, but over time, absolutely.
Speaker 1:Yep. And it's very market dependent. Right? Have to be like, let's work on something in Texas.
Speaker 8:Texas is more suburban. You do have to change how you build your restaurants a little bit, having like the portal where you where you put the food in. But when you think about the Drone portal. Yeah. When you yeah.
Speaker 8:Think You need like a drone portal. But when you think about the speed of delivery, you know, for delivery getting sub thirty minutes is Huge. Is a bit it's that's like kinda like the number. When people are opening the app, you wanna be sub thirty minutes. And what you can do with with drones in getting there, it's it's pretty amazing.
Speaker 8:They still can't do really large orders. So like the Sure.
Speaker 1:The
Speaker 8:Yeah. Yeah. What it feeds in is for
Speaker 2:a whole office. But I
Speaker 8:I do think over time Yeah. They will they will figure it out and more of restaurants will be built around that.
Speaker 2:Yeah.
Speaker 8:I mean, it's it's amazing to think is how much your radius can increase and what that means for your footprint over time if that's true.
Speaker 1:Since, you know, we're here, when you look at this market, the the craziest thing is putting when you put, you know, you go into maps and you put an address in and you're like, it's seven miles and it's gonna be fifty minutes. Yeah. It's like a normal a normal thing. It sounds crazy to anyone else in the country, but it's like a drone going seven miles is like, you know, feasible.
Speaker 8:Yeah. And you've seen the videos. They like they're able to just drop the you know, just literally have it parachute like right on your doorstep. Yeah. So it's it's pretty amazing.
Speaker 8:It's coming, but I think it's a little early for
Speaker 5:us. Yeah. Yeah.
Speaker 2:Very fun. Amazing. Thank you so much. Thank you for
Speaker 1:the food. Hey. Great to see you guys. Let's hang let's hang soon.
Speaker 8:Thank you, guys.
Speaker 2:Put this in here. Throw these back on and we can click over to to some of just Jason Fried's favorite watches. He was a fan of Nike's early two thousands era watch lineup. Have have you ever have you ever seen these before, Jordy?
Speaker 1:I have. I have.
Speaker 2:I have not.
Speaker 1:I've never seen one in person.
Speaker 2:Never seen one in person. Where's my other ear Headphone. There we go. Yeah. This has this design aesthetic come back yet?
Speaker 2:I feel like there's enough posts about it. At some point, I feel like a tech startup is gonna really run with it on Someone will do it.
Speaker 1:I like the kind of soft lines.
Speaker 2:Yeah. Avi from Friend was sort of doing that with the material that went into the Friend pendant, but he was he was talking to Paul Graham about, like, how do you differentiate from Apple? Like, if you launch a product like this, it it it does stand out from an Apple Watch certainly aesthetically. And so you Yeah. At least create some, like, distance that's maybe defensible.
Speaker 2:They even if they even if they come out with a competitive product, it's not and if you become iconic with this design or or similarly bizarre design, you don't stand as much chance of getting commoditized. Well, Ryan Cohen's in the Financial Times. People have been processing the his bid for GameStop to take over eBay. Very fun story. Not too many updates on what's actually happening.
Speaker 2:I think there's sort of a wait and see approach here. But the the Financial Times has a little bit of a deep dive here. Ryan Cohen spent much of his career being dismissed. It's a pattern that has turned the chief executive of video game retailer GameStop into a leather jacket wearing outlier with a loyal base of meme stock investors. I saw someone commenting the legal, the the leather jacket, very Jensen esque.
Speaker 2:Although, I I has he been dismissed? I feel like through the rise of Chewy, there was a ton of respect for him all along that journey since e commerce is such a challenging business. There's so few companies that have exited at at north of a billion dollars. There's been a ton of a ton of attempts to make e commerce companies, but they they often run into Amazon headfirst. The Canadian entrepreneur turned activist investor has built his cult like reputation by repeatedly betting on ideas that many institutional investors labeled as absurd.
Speaker 2:First, it was online pet supplies. Okay. I guess that that fits. Then a dying struggle.
Speaker 8:Why
Speaker 1:has Chewy Where is Why is Chewy So Chewy is a $9,600,000,000 company.
Speaker 2:Yeah. That's great.
Speaker 1:Has Amazon and Walmart not eaten them alive?
Speaker 2:I don't know. I mean, think a lot of people have pet food on subscription and they just don't change it. And so you acquire that customer and then even if it's on Amazon Yeah.
Speaker 1:So the CAC equation just works.
Speaker 2:I think the I think the retention is is remarkable because the dog doesn't tell you, hey, I'm bored of this particular food. It's just like awesome. I feel
Speaker 1:like my dogs would would grow up and they'd be like
Speaker 2:But how would they communicate today?
Speaker 1:They had this look and I know I'd had to go take an egg, go get an egg from the chickens and crack it on their their
Speaker 2:But that's not you're not getting that egg on Amazon. Right? They don't make egg egg laced dog food on on Amazon. Like switching e commerce platforms isn't going to solve your belligerent dog problem.
Speaker 1:Yeah. One one response from eBay could be focus on yourself, King, because Chewy's down 40% Yeah. Over the last year.
Speaker 2:Well, is Ryan?
Speaker 1:No. He's no longer he's no longer he's no longer the CEO, obviously. But
Speaker 2:still, you know, I guess it's down since IPO. It had a it had a quick rise in 2021. The stock was up at a $101 now at 23. So some sell off there. But let's read through more of this.
Speaker 2:Now he is focused on this $56,000,000,000 attempt to acquire eBay and our ecommerce giant roughly four times the size of GameStop. Wall Street right? Wall Street's immediate response to the hostile bid has ranged from skepticism to outright mockery. Analysts have questioned how GameStop valued at roughly $11,000,000,000 could realistically finance the takeover of a company worth around 47,000,000,000. None of that has dissuaded dissuaded Cohen.
Speaker 2:The more eBay fights me, the more I'm gonna not take no for an answer. I'm not going away, he told the Financial Times. The 40 year old billionaire first set out his his stall for the takeover bid in an awkward interview with CNBC on Monday that instantly across social media. He responded to questions about the financing details with a blank expression and clipped mono syllables explaining that it was half cash, half stock. Of course, that became a massive meme.
Speaker 2:The interview generated waves of memes online as acts and Reddit users speculated that Cohen looked drunk, high, or
Speaker 1:exhausted. Do you think the half cash, stock meme is good or bad for the prospects of successfully acquiring the company?
Speaker 2:I think once it clicks, it sort of makes sense and but it is a big jump to eBay shareholders to, you know, to roll into that at that price.
Speaker 1:This yeah. The the decision or or the sort of, like, situation would be wildly different if eBay hadn't been performing Yeah. Since Jamie became CEO.
Speaker 2:Yeah. It's outperformed the S and P five Right? Yeah. Which is pretty remarkable. So, yeah, it's not it's not beaten down and Yeah.
Speaker 2:The shareholders seem pretty happy. The Financial Times says the script has played out before. Born in Montreal in 1986 to a teacher mother and father who imported glassware, Cohen did not attend university. As a teenager, he built websites for family, friends, and small businesses teaching himself coding. Now in 2011, now in his mid-20s, he founded Chewy from South Florida with the ambition of creating an online pet supply business that could compete with Amazon.
Speaker 2:Investors thought the idea was ridiculous. I knew that significant capital would be required to finance the growth, that's for sure. A lot of inventory, very very capital intensive business. He said he approached dozens of VC firms, even flew out to Silicon Valley, went door to door on Sandhill Road. Can you do that?
Speaker 2:I don't think you can just knock on Sequoia Capital. Someone could
Speaker 1:I think some of these neo labs are hot enough that they actually
Speaker 2:They probably
Speaker 1:down no meetings Yep. And just go door to door.
Speaker 2:I'm here.
Speaker 1:Hey, I'm in the middle of Unannounced. Be like, cool. I'll come back in like twenty minutes.
Speaker 2:Got a turn of Yeah. Yeah. Probably. So he went door to door on Sand Hill Road, probably a turn of fray as he was probably scheduling meetings. But he was explaining how Chewy would succeed by delighting customers and running an ultra efficient operation, but everyone turned us down.
Speaker 2:He couldn't raise money. The skepticism was understandable given the failure of pet supply website pets.com and the .com bubble era. Pet food was bulky, low margin, and expensive to ship. Venture capitalists doubted consumers would buy 40 pound bags of dog food online. Cohen ignored them all.
Speaker 2:Instead, he focused obsessively on customer service. Chewy employees wrote customers handwritten cards and sent flowers to grieving owners whose animals had died. That's really sweet. That is a good touch. He doesn't come across as that.
Speaker 2:He comes across as, you know, this like ruthless operator. But that is really I mean, obviously that
Speaker 1:Well, comes across as an absolute dog, John.
Speaker 2:Yes. He was raised by dogs essentially. He grew his career through the dog economy. The approach helped to create unusually intense customer loyalty by 2017. Private equity backed PetSmart bought Chewy for 3,350,000,000, then the largest e commerce deal on record.
Speaker 2:It cemented Cohen's reputation as a rare entrepreneur who had successfully challenged Amazon on its own turf. Flush with cash and credibility, he launched Ryan Cohen Ventures, RC Ventures, his investment vehicle. That led to his most controversial bet in 2020, while much of Wall Street viewed GameStop as a doomed relic of the physical retail era, Cohen quietly amassed a large stake in the company and began pushing for a radical digital transformation. I really wonder if there's going to be what is this? Just horses?
Speaker 2:Why are we just playing horses?
Speaker 1:The team had this on this morning. I thought it was incredible.
Speaker 2:Yeah. The horses are good. I wonder I wonder if there will be a people Ryan Coen subway servers. We do Horses?
Speaker 1:I like it. The horse b roll.
Speaker 2:Do you think there'll be a Ryan Cohen GameStop type deal of the SaaS apocalypse era? Like the most seat based SaaS, you know, like laggard who's getting absolutely beaten up, shorted, huge short interest and some wild card operator comes in and and turns it around or at least turns it into a meme stock. I don't know.
Speaker 1:Yeah. It feel I mean, it's just felt like so many people were were too too afraid of of, you know, catching a falling knife basically. But
Speaker 2:Well,
Speaker 1:sure we'll see
Speaker 8:some of it.
Speaker 2:We can dig into it more. We can ask Zoll about it because we have my good friend Zaul from refractor in the TBPN UltraDome. Let's bring him on down to the seat. And I don't know. Are those plates left over?
Speaker 2:Can Of course. Great to see you.
Speaker 10:Jerry, good to meet you, man. Thanks for having me.
Speaker 2:Let's let's introduce yourself and then I want to hit the gong. Want you to hit the gong. Oh, man. Tell us the news today. Introduce yourself and then tell you the truth.
Speaker 10:Yeah. No. I'm Zahl from Refactor Capital. As you know
Speaker 2:I know.
Speaker 10:I led Lucy's seed round a That's decade right. And it's been a pleasure. Yeah. And I run a deep tech, hard tech fund.
Speaker 2:Hey. You're well. There we go.
Speaker 10:I like it.
Speaker 2:Yeah.
Speaker 10:Yeah. And by the way, I do have schwag for you guys.
Speaker 2:Very fun.
Speaker 10:So that is for you. I got got
Speaker 1:some How John how did John pitch Lucy to you back then? Because this Oh,
Speaker 2:that is a
Speaker 1:is little Four years before Zins were like a common, you know, word?
Speaker 10:Well, no. No. It was a it was a smoking alternative, Jorky. That's what he was pitching to.
Speaker 2:It was before Zin launched.
Speaker 1:It before ZYN launched. Yeah. Yeah. Know.
Speaker 2:Yeah. Yeah. I mean, the pitch was The basically just
Speaker 1:main thing is like, if I was getting that pitch
Speaker 2:Yeah.
Speaker 1:I mean, you're you're very compelling. I probably would have invested if we knew each other back But, you know, a pouch, yeah, it's popular in Europe.
Speaker 2:We weren't
Speaker 8:doing pouches yet. No. It was just the gums.
Speaker 2:And I think we maybe had mapped out lozenges, but the idea was basically that Nicorette was A horrible product. Horrible product, but had grown into like a billion dollars a year in revenue and had been around since the seventies, had been really well studied by the scientific community, had been loosely effective at getting people to quit smoking, but delivered in the most medicinal way and had not had a consumer brand wrapped around it. So very much in like the HIMs and Roman telehealth, like, let's take the, you know, the scientific backed product that we know works but then package it in a in a in a new way and go direct to consumer. Yeah. Chewy style.
Speaker 8:Yeah. It was fun. Yeah.
Speaker 6:It was
Speaker 10:a it was a blast. It was a blast.
Speaker 2:But you were doing a of other investing at the time. Yeah. What else stands out from your investing career?
Speaker 10:Yeah. Well, I've been but can I first say like Yeah? I have had a fantastic week. Can I tell you about the week yeah? I think it's my best week adventure.
Speaker 10:Okay. And and I've been doing this for twelve years. Yeah. So let me let me paint the picture. Right?
Speaker 10:So Wednesday
Speaker 2:Yeah.
Speaker 10:Astronis raises a 450,000,000 series e. Yeah. This was the first check I wrote after I left Andreessen Horowitz.
Speaker 2:That's right.
Speaker 10:Very first check Yeah. I wrote.
Speaker 2:Great company.
Speaker 10:I led the seed round. I love that. Introducing the a 16 z which did the series a and they also done subsequent rounds.
Speaker 2:Yeah.
Speaker 10:So that was on Wednesday morning. Wow. Yeah. That was amazing. Right?
Speaker 10:Yeah. You know, $2,800,000,000 valuation. Okay. And then on Thursday, of course, I launched my new fund. Yep.
Speaker 10:Fund five. Yep. Right? And so I've got 300,000,000 under management. Jesus.
Speaker 2:Amazing. Yes.
Speaker 10:Ten ten years and
Speaker 2:Yeah.
Speaker 10:Change. Yeah. At this point. So another 50,000,000. I just raised $50,000,000 funds.
Speaker 10:Again, we can talk about that in a And then, you know, I'm I'm I'm like waking up yesterday morning and I'm like, you know, getting all my tweets and my LinkedIn posts together for the launch at like 6AM.
Speaker 2:Yeah.
Speaker 10:And something pops up in my feed and my emails. It's like, one of my companies just got acquired. I'm like, okay. Well, gotta take a look at this. Like, what what happened?
Speaker 10:Well, PathAI Okay. Got acquired by Roche for a billion dollars. Oh.
Speaker 1:There we go. Incredible.
Speaker 10:And I have two founders that have had kids this week, babies this week. So it is just Tons
Speaker 2:of good stuff.
Speaker 10:Best best week ever, guys.
Speaker 2:Yeah. Best week. I mean, I I I
Speaker 1:know So
Speaker 10:know, originally from from the Midwest. Yeah. Born and raised in Indiana. Cool. My dad had a computer business growing up, so I built computers in our basement and we sold them to people's homes, doctors' offices, you know, eighties and nineties pre Dell.
Speaker 1:Right? Basically like we'll build you a custom PC Yeah. Your use case.
Speaker 10:Do remember March and April and Pentiums and all that?
Speaker 1:I was born in Oh, okay. '95. Okay.
Speaker 10:So So
Speaker 8:maybe not. Maybe not. Yeah.
Speaker 10:But this was like the era of the eighties and nineties before Dell, like, really kinda took over. Yeah. And so, you know, we built that business. So I got into hardware, software coding at a young age.
Speaker 2:Yeah.
Speaker 10:And then I went to Penn and I did the Wharton undergrad program. Sure. What I didn't understand when I got there was that 90% of my classmates would go into banking and consulting. Yep.
Speaker 2:Yeah. Satya running it?
Speaker 10:No. No. It was the bomber at the time.
Speaker 1:A rising PM?
Speaker 10:He was a rising he was he was VP of product at that point. Yeah.
Speaker 1:Yeah. That's what I'm saying. You're
Speaker 2:you're working under the in the aura.
Speaker 10:Yeah. Yeah. People knew him.
Speaker 1:Of Insane course, people knew aura.
Speaker 2:Yeah. That's awesome.
Speaker 10:But it was like a time when like Microsoft stock price was just between 25 and $30.
Speaker 2:Yeah. The bomber
Speaker 8:era was rough.
Speaker 10:It was it was rough. Yeah. And they didn't understand the Internet. This was 2004 to 2006.
Speaker 2:This is like while they're missing mobile, basically.
Speaker 9:Correct.
Speaker 10:Yeah. They missed the whole and I was like, this is not this is not happening. I'm wasting my career up here in Seattle. So I moved
Speaker 2:That's crazy.
Speaker 10:To Bay Area twenty years ago.
Speaker 2:Okay.
Speaker 10:And I got a job at Google.
Speaker 2:Yeah.
Speaker 10:I was a PM in 2006 on the AdWords team. Sure. That let me tell you a story on that real quick. So this was Susan Wojcicki's team. Yeah.
Speaker 10:So Google was founded in her garage Yep. You know, in the day. She passed away a couple years ago of non small cell lung cancer. But she was an amazing leader, amazing human. And the talent that she had put together on that floor in Building 42 on the 2nd Floor was amazing.
Speaker 2:Yeah.
Speaker 10:So, I'm in this cube. Elad Gill is sitting next to me.
Speaker 2:No way.
Speaker 10:Satya Patel from Homebrew over there. Woah. Josh McFarlane who was at Greylock and now at Boom. Yeah. Ben Silberman from Pinterest.
Speaker 2:No
Speaker 10:way. Kevin Systrom from Instagram. Oh. Dan and Seek from Optimizely.
Speaker 2:Wow.
Speaker 10:Tom Tungus now from Theory Ventures.
Speaker 2:Yeah.
Speaker 10:And Gokurajram who's on board of Coinbase and Pinterest.
Speaker 2:No way.
Speaker 10:Not other of AdSense. We were all within three cubes.
Speaker 2:That's incredible.
Speaker 10:It was insane. I don't know what was in the water there but like
Speaker 2:Yeah. That's remarkable.
Speaker 10:We've all done pretty decently.
Speaker 8:Yeah. For sure.
Speaker 10:Yeah.
Speaker 2:What is what is a PM on AdWords do? Yeah. Because there's a there's like the ad matching product. That's a product. But then there's dashboard with which brands go to advertise sites and there's like a two sided marketplace effectively.
Speaker 2:Like what is a day in the life like?
Speaker 10:Yeah. So there's, you know, back in the the core product offering at Google back then was AdWords and AdSense.
Speaker 2:Yeah.
Speaker 10:So AdWords was like, okay, go to google.com Yep. I type in a search query Yep. Know, the ads show up. AdSense is putting ads, whether it was text or display or image ads, video ads, on other publisher sites so that publishers can start making money from the Google search algorithm based on the content of scraping that page
Speaker 2:Yep.
Speaker 10:Surfacing the best possible ads. Sure. So my job was to kind of think about new concepts or new product launches
Speaker 2:Okay.
Speaker 10:To make more money on the AdSense side.
Speaker 2:Sure.
Speaker 10:But they were AdWords products on AdSense.
Speaker 2:Got it. Yeah. Yeah.
Speaker 10:Right? Yeah. But then we acquired YouTube. Yeah. And so I was asked to move over to YouTube.
Speaker 2:Oh, okay.
Speaker 10:And another OG Hunter Walk
Speaker 2:Oh, yeah.
Speaker 10:Satya's partner at Homebrew
Speaker 5:Yeah.
Speaker 6:Homebrew.
Speaker 10:Brought me over.
Speaker 2:That's awesome.
Speaker 10:And so I was working at YouTube for three years.
Speaker 2:Cool.
Speaker 10:And this is when we were bleeding cash. Yeah. Everybody was suing us. Sony, the music labels, like the movie studios. Yeah.
Speaker 10:We were burning cash
Speaker 2:Yeah.
Speaker 10:Like crazy.
Speaker 2:Yeah.
Speaker 10:And Eric, Larry and Sergei come to us and they're like, hey, guys. This is like 2007, 2008. Hey, guys. Like, we need to turn on the revenue spigot like yesterday.
Speaker 2:Yeah.
Speaker 10:Like, go figure out how to get the Fortune 500 to feel comfortable putting their brands on YouTube. Because remember, with UGC content, people were really worried about Yep. It again twenty years ago. Yep. Right?
Speaker 10:So we had to build all new products to get them more comfortable
Speaker 2:Yeah.
Speaker 10:With making that making that their their brands and their products available on YouTube. Yeah. And so, you know, we built that business to a few 100,000,000 in revenue. Think they did like 20,000,000,000 last year.
Speaker 1:Linear linear 60 or something. Linear TV execs at the time, were they saying like no one's ever gonna put dollars against YouTube because of that UGC risk? Were they were they were people saying that?
Speaker 10:Yeah. I mean, they didn't they didn't they didn't wanna but they didn't wanna risk because honestly YouTube's filters for content were not as good back then. So like like weird stuff was like popping up
Speaker 2:and Totally. Not getting caught. This was like the tagging age where like you could upload a video and tag it like skateboarding, Los Angeles, and then you hope that that's what's in the video, but there wasn't an AI model that could look inside every frame, listen to the audio, and actually understand what it was. At least not yet.
Speaker 10:And then they create What
Speaker 1:what were the I'm I'm super interested in, you know, every every platform every platform that has traffic and usage is, like, different. So, like, you know, just screen spaces on on a website is different than screen space on Instagram is different than screen space on, you know, a Google search result. Right? What what were the unique challenges with building an ad product for YouTube, given the consumption habits and the way and and the state that people come to YouTube in?
Speaker 10:Yeah. So, you know, they actually had to create a new role for me because they they called me the big ads PM. So my job, to your point on linear TV, you know, execs, they wanted a they wanted their thirty second TV spot on YouTube, but we weren't we weren't gonna do that. That's just like so orthogonal Yep. The YouTube thesis.
Speaker 10:Yeah. Yeah. So what we did instead is we let them buy the homepage. Oh, yeah. Do you remember this?
Speaker 10:So we had homepage takeovers.
Speaker 2:Yeah. Yeah.
Speaker 10:So you could put like these big banners up. Yeah. And our sales team would have this calendar of 365.
Speaker 2:And they go sell them.
Speaker 10:And they go sell them for 1,000,000 a pop.
Speaker 2:Wow.
Speaker 10:2,000,000 a pop. Yeah. Whatever it was on Christmas or whatever. Yeah.
Speaker 2:It's like 3,000,000 or whatever.
Speaker 10:Right? And so and it got tons I mean, hundreds of millions of views.
Speaker 2:Yeah. So much traffic. So much lands on the homepage then. Free app.
Speaker 10:Yeah. Apple, EA, all the big brands.
Speaker 2:Yeah. They would all do
Speaker 10:they wanted to put their brands up there. Yep. And, you know, that was getting them comfortable with like a known display ad product that Yeah. They were using at AdSense or somewhere else Yeah. And bringing them on.
Speaker 2:Yeah.
Speaker 10:But in with that million dollar ad buy, John, we were we were forcing them to actually spend money as part of that million on youtube.com through the search engine.
Speaker 2:Sure.
Speaker 10:So when people search, they'd have to have their display ads and their other search products up there and running. So it got them comfortable with using YouTube. Yeah. Because otherwise, it's like, okay, it's just a twenty four hour pop. Yep.
Speaker 10:Don't you want to continue the campaign for the next month and leverage all the gains that made from brand awareness by coming people coming to youtube.com?
Speaker 2:Yeah. And they're not tied to a specific video at random Yeah. Which is where the real brand risk comes. Right. Because it's like your ad was shown on this particular ad.
Speaker 2:It's like, no, we were on the homepage. There's a lot of things. If you're mad at that one video, take it up with Google or YouTube. Right?
Speaker 10:Yeah. Exactly.
Speaker 2:Interesting. Exactly.
Speaker 10:And then after YouTube, I went to Netflix and I was their first head of mobile. Yeah. Yeah. This was like six months after the iPad launch from Steve Jobs and we had to rebuild all the phone and tablet Yeah. From the ground up.
Speaker 10:Yeah. They were they were growing like a weed and they looked like
Speaker 2:This is like Forrest Gump level Silicon Valley lore. Yeah. It's like, then I was in Andreessen, then I was at Netflix, then I was
Speaker 10:at Apple. There's definitely gray hairs here.
Speaker 2:You've been at every big tech company. Yeah. There's like three on the mag seven that you still gotta go do tours at
Speaker 10:some Yeah. Well, did LinkedIn after that.
Speaker 1:Okay. Yeah. So I got Microsoft There we go.
Speaker 10:There. But I was I was basically at LinkedIn.
Speaker 1:Please tell me you were you were put pitching them on short form vertical video on LinkedIn back when you were there. Because they finally added it. They did.
Speaker 10:They finally did. They finally got comfortable with it. Yeah. We were talking about it back then, but they were not they were not going for going for it.
Speaker 2:Yeah. So, yeah. What was
Speaker 1:the I spend I spend $4.05, sometimes six hours on LinkedIn just scrolling on the vertical It's video so
Speaker 10:stupid. It. Oh, yeah. Yeah. Oh, that was great, man.
Speaker 10:I mean, a very small team back then. This was 2011, 2012.
Speaker 2:Okay.
Speaker 10:Only eight PMs in the whole company. Yeah. I was responsible for all the phone and tablet apps. Yeah. You know, across Android, like the the tablet Nook.
Speaker 10:Remember those? The Kindred Fire?
Speaker 2:Sure.
Speaker 10:Yeah. Kindred Fire rather.
Speaker 5:Kindred Fire.
Speaker 10:And so we had to build that. Yeah.
Speaker 2:And one really gives Bezos enough credit for using the Gen Z slang. Like, he made like a fire phone and like that's what like kids would say like, oh, we should make a Like fire this phone is And he and he rolled it into an entire brand. But today, people would like call that out as like being too like patronizing to the younger generation.
Speaker 8:Yeah.
Speaker 2:But the fire phone just sort of slid under the radar.
Speaker 10:Oh, well, was a complete flop too.
Speaker 2:I know. Horrible.
Speaker 1:Yeah. Well, he also has like, you know, he It was actually say, you know, this the derogatory like, oh, you're basic. Yeah. He flipped that around Yeah. And tried to turn it into a positive with on basics.
Speaker 1:Oh, yeah. Like it's okay. It's okay. I'm a
Speaker 2:Gen Z slang over
Speaker 1:there Yeah.
Speaker 2:At Amazon. That's right. That's right. Anyway.
Speaker 10:Yeah. So that was that was a great time. And then, you know, Andreessen Horowitz about twelve years ago were looking for kind of junior folks like like their partners who are product people like me Yep. To come join the investment team and help them source evaluate and work on investments together.
Speaker 2:Yeah.
Speaker 10:Right? And so this was 2013.
Speaker 2:Yep.
Speaker 10:I ended up joining. The firm was only four years old at that point. Yeah. Investing funds three and four, which were each 1,500,000,000 in size. Yeah.
Speaker 10:At that point, they had not launched any sector specific funds like Yeah. Crypto fund or gaming fund or anything.
Speaker 2:Or American Dynamism.
Speaker 10:Exactly. None of that was a lot. It was just one fund.
Speaker 2:Then Didn't you have growth yet? It was just one
Speaker 10:It was just one fund. Yeah. It was just one vehicle
Speaker 2:weird deals. Like the Skype thing is so funny to me. You
Speaker 10:SPVs. Yeah. Yeah. We were doing SPVs in a Pinterest Okay.
Speaker 2:Yeah.
Speaker 10:Facebook. Yeah.
Speaker 2:It was very creative deal making. It was not which I think was like a to their massive benefit. Yes. To so many experiences. Obviously, financial wins, but also just like the breadth of activity at the firm allowed for those expansions to go successfully.
Speaker 10:That's right. That's right. And so, you know, obviously, you can imagine it was just an amazing whirlwind of an experience. Then when I got to meet you and Rob Yeah. Yeah.
Speaker 10:Soylent Journey team
Speaker 2:as well.
Speaker 10:Working with Chris Dixon. Yeah. With Chris Dixon. And that's when I started actually getting into hard tech.
Speaker 2:Yeah.
Speaker 10:So I was kind of bored trying to find the next Netflix, the next Google. Wasn't as interesting to me as like the world of atoms. Yeah. And so I ended up starting getting into digital health, computational biology, synthetic biology. I don't have a bio background, but like very smart people.
Speaker 10:Like you guys got excited about where some of these directions were going, especially in food and chemicals and materials.
Speaker 7:Mhmm.
Speaker 10:And then a few of us convinced our LPAQ to actually launch the Bio Fund. Yeah. Which was the a 16 z's first sector specific fund that they launched in 2015. That's right. Which was a $200,000,000 fund to go after the intersection of life sciences
Speaker 2:Yeah.
Speaker 10:And computer science. And that's when I spun out and started Refactor
Speaker 2:Yep.
Speaker 10:You know, about ten years ago.
Speaker 2:Yeah. Yeah.
Speaker 10:And so, yeah. If you recall, I started it with David Yeah. Yee from SV Angel. And then he ended up retiring. Yeah.
Speaker 10:I've been solo since. And I haven't hired anybody. It's literally just me running running the firm.
Speaker 2:So you have SaaS for the tooling on the back end fund administration? Like, like, you're there are certainly things that in a day you can't do. Do you not even have a executive assistant?
Speaker 10:I I had an executive assistant for nine years part time
Speaker 2:Okay.
Speaker 10:Who would just do all my scheduling
Speaker 2:Yeah.
Speaker 10:All that stuff. But there was a new company that Sequoia, Sequoia partner actually ended up leading called Blockit.
Speaker 2:Okay.
Speaker 10:And it's an AI calendaring tool.
Speaker 2:Okay. And you used And
Speaker 10:I just I just I just made that change three months ago. Wow. It has been amazing.
Speaker 2:Amazing.
Speaker 10:So I have like I don't know what SaaS is, John, but I know what AI is. Yeah. Kidding. But I've got like a whole bunch
Speaker 2:of Yeah. Yeah. You stuff
Speaker 10:and set up that I can actually like amplify my time. Yeah. Have my fund admin. They do all my Yeah.
Speaker 2:Yeah.
Speaker 10:I have a tax and audit team.
Speaker 2:Do all back office.
Speaker 10:Yeah. But as far as employees go
Speaker 2:Yeah. Full time employees,
Speaker 10:you're looking at them.
Speaker 2:That's amazing. Yeah. Yeah. That's wild. Then why why keep the fund size the same?
Speaker 2:Why not at least inflation adjust it?
Speaker 10:Yeah. Yeah. I mean, so this I get this question all the time.
Speaker 2:I'm sure.
Speaker 10:Oh, you because I had more than 50,000,000 of interest
Speaker 2:in
Speaker 10:this
Speaker 2:fifth fund.
Speaker 10:Yeah. Right? And so, if I increase the fund size
Speaker 2:Yeah.
Speaker 10:Then one of a few things might happen. A, I have to write more checks. Right?
Speaker 2:Mhmm.
Speaker 10:And so that's, you know, as a as a single person, like, it might be a little stressful and like I won't be able to give as much time to my founders.
Speaker 2:And marginally you might be adding like the the company that wouldn't make it on the margin in the previous fund. So you're just adding in like worse performance.
Speaker 10:Adverse Adverse selection. Exactly. And so if I'm I only do 20 or 25 companies every fund. A concentrated portfolio. Yep.
Speaker 10:I'm writing 1 to $2,000,000 checks Yep. All things hard tech, bio, energy, aerospace, critical materials, robotics, physical AI. Yep. So all of these things like need my time. And so if and I I want them to actually be a fun driver.
Speaker 10:Right? If I'm starting out with 10% ownership in a business Mhmm. Maybe after dilution I have 5% of that company Yeah. Well, what's 5% of a billion dollar unicorn? $50,000,000.
Speaker 10:Yeah. What's my fund size?
Speaker 1:50,000,000. Yeah.
Speaker 10:So it makes it work. Right?
Speaker 2:Yeah.
Speaker 10:And I hope there are much bigger outcomes. But like PathAI, it was a great great outcome. Right? And so, I wish I had more in it. But Yeah.
Speaker 2:So that's why dilution, is the level of dilution increasing? I mean, you look at the CapEx numbers from AI labs, you look at the CapEx and spending and dilution that's going on at large scale hard tech companies that are growth stage. That dynamic shifting? Are you worried about that or are you changing your strategy based on what's happening with some example companies?
Speaker 10:Oh, yeah. I mean, we're seeing it in the last six months in the areas of hard tech, deep tech, whatever you want to call it. Right? Yeah. Like we're seeing it the the valuations increase both at pre seed and seed.
Speaker 10:And so I have to be able to make certain adjustments to make sure that I can get into the highest quality companies. Yeah. Right? Because like 10% of a bad company is still a bad company. Yeah.
Speaker 10:Right? And so to your point on average selection, I want to avoid that.
Speaker 2:Yeah.
Speaker 10:So I've made very conscious decisions and exceptions
Speaker 2:Yeah.
Speaker 10:On being below my target ownership to get into some of the very best companies.
Speaker 2:Sure.
Speaker 10:Right? And so, especially in this world of AI where I feel like the outcomes may not be a billion. They might be 10.
Speaker 2:Yeah.
Speaker 10:It might be a 100. Yeah. Right? And so And
Speaker 2:we're seeing that constantly even with like there's so many markets. I mean, the the the coding agent market across Cursor, Windsurf, Cognition, like, you have three companies that are all north of there are three Decacorns in the same category effectively. Yeah. Like, that is a wild situation. I I can't remember the last time that happened in a in a competitive industry.
Speaker 7:Yeah.
Speaker 2:Certainly, you had Uber and Lyft, but there was a divergence there at some point. And Right. The third company was I forget what it was called, but I think it topped out at, like, a 100,000,000 in valuation, maybe a billion. But it was very power law driven and we're seeing many more categories be more oligopolistic early on, which is fascinating.
Speaker 10:The venture math is pretty simple for a seed fund of like like like mine, like You like know, if I wanna be a top decile investor, you go back and look at forty years of venture capital history. Mhmm. What is a top decile investor? A net three x fund. Mhmm.
Speaker 10:So I take my 50,000,000
Speaker 2:Oh, interesting.
Speaker 10:And I turn it into a 150.
Speaker 2:Yeah.
Speaker 10:Right? But in order to do that, there's a lot of ways to make money in
Speaker 2:venture. Yeah.
Speaker 10:But the vast majority of those funds that hit that top decile and that three x mark Yep. Had at least one fund returner. Meaning, they had one company return the entire fund, more likely many multiples, like a two, three, or four x.
Speaker 2:Yeah.
Speaker 10:Right? And so, you only can do that if you have sufficient ownership at entry. Yeah. Right? Which is why I've done more of a concentrated strategy versus, you know, I love, you know, SV Angel, Box Group, I co invest with them.
Speaker 10:Yeah. A bunch of other seed funds that I love working with. They write smaller checks and they they probably do like a 100 investments a fund. Yeah. Right?
Speaker 10:And they get into some amazing companies. Yep. So I love working with them because they're they're a great source of deal flow. Yeah. But, you know, they've got a whole team that can go and like just meet companies all day long.
Speaker 10:That's all Yeah. They do. They just meet companies. Yeah. And I wanna really spend more time building like foundational relationships with my founders.
Speaker 10:I just get a lot out of that.
Speaker 2:Yeah. Right? How are you sourcing and vetting hard tech founders? It feels like there's the SpaceX Alumni Mafia, and then there's the the Wildcatters, the the college dropouts who are doing a bunch of interesting stuff.
Speaker 10:Yeah. Yeah. I mean, you know, I have one here in LA, General Galactic Yeah. Ex SpaceX, ex Varda team Cool. Building the fastest engines in space using electrolyzers.
Speaker 10:Sure. So water on board. Do you guys remember the TV show The Expanse?
Speaker 2:Yeah.
Speaker 10:And for all mankind?
Speaker 2:Yeah. The
Speaker 10:whole idea is like can we use water as a fuel? Sure. Right? And we think that there's water at the South pole of
Speaker 1:the moon.
Speaker 10:Imagine being able to actually have a satellite powered by water Interesting. That can go all the way out to the moon and refuel and come back. Yeah. And if we're gonna have a civilization on on on on the moon Yeah. You know, that is gonna be required.
Speaker 10:Yeah. Water as propellant.
Speaker 2:So what is your diligence process for that? Because that sounds like amazing, but I don't feel equipped to answer will that work or not. How are you deciding to make the investment?
Speaker 10:Yeah. I mean, when I invested in their pre seed,
Speaker 2:like,
Speaker 10:you know, what was it? Three or four years ago? Three year yeah. Three or four years ago. It was just Halen and Luke with a deck and an idea.
Speaker 10:Yeah. And I just love them as founders. And they were extremely well Yeah. Referenced referenced.
Speaker 6:Okay.
Speaker 10:And I feel like they had a sense of urgency about them. Sure. And that's why I look for it. I mean, I don't really have a market map saying, I need to invest in this idea. Sure.
Speaker 10:I want it to exist.
Speaker 2:Yeah.
Speaker 10:That's where I make mistakes.
Speaker 2:Yeah.
Speaker 10:Right? Where I where I if I fall in love with an idea more so than a founder Sure. I I have to really watch myself.
Speaker 2:Sure. Sure.
Speaker 10:Sure. It's more of the other way around. I need to fall in love with the team. Yeah. I may not know what the business model is gonna be or the product.
Speaker 10:Yeah. Like this team has pivoted once before. Right? And so, like, but they figured out this new idea and it's like, it's gonna work.
Speaker 2:Yeah.
Speaker 10:And the Space Force loves them and like, you know, we're It's some great momentum there. And so, that's an example of one. But like, you know, when you're doing hard tech investments across all these categories
Speaker 2:Yeah.
Speaker 10:I leverage my network of professors, advisors and founders.
Speaker 2:Okay. Yeah.
Speaker 10:And I don't pay them because they just want to meet these companies for free. Yep. Because sometimes they may want to invest. Sure. Sure.
Speaker 10:Sometimes they want to be an advisor. Yep. And so it's it's great to be able to
Speaker 2:do that. And so they can sort of fact check some of scientific claims. Jordy, any other questions?
Speaker 1:Is the is the business getting more, you know, running the firm getting more fun now that you have over a decade of investments that are kind of, you know, some of the most exciting companies in hard tech are the ones that were started ten, you know, twenty in the case of SpaceX, twenty years ago, things I like think of companies like, you know, Zipline, Keller's company that are that were incredibly exciting probably in a deck back then, but then now are like actually coming to real, like, fruition Yeah. At least here in The US. And you mentioned like weeks like this with a lot of activity. I've certainly felt that way as an angel investor. It's like the more time that passes, the more fun it is to be an angel investor because you're not just making new investments, but you're getting to see the see the sort of stories of of all your previous investments play out and you start to like really notch wins and it's a great feeling.
Speaker 10:It's a really great feeling. I've, you know, I've got six unicorns in the portfolio today. I've got many more hopefully coming, you know, nuclear energy company and all of these things. So it's oh, yes. It's great.
Speaker 10:And so, you know, there are just so many amazing companies to be built and I'm and I'm ready to work with them. I don't if you guys saw my my my new website, but I've got my call sign.
Speaker 2:Okay. What's your call sign?
Speaker 10:Better Callzall.
Speaker 2:Better Callzall.
Speaker 1:Better Callzall. Like, T.
Speaker 2:D. Yeah. That's how you pronounce
Speaker 10:my name and it's the call sign I was built for.
Speaker 2:Well, thank you so much for taking time.
Speaker 10:Thank you, John. I appreciate it.
Speaker 2:It's nice meet you. Always good having you.
Speaker 10:Cheers. I'll give these to the guys.
Speaker 2:Fantastic. Perfect. We have Brian Chesky from Airbnb joining in just a minute. We can pull up what else is in the timeline in the meantime. Someone oh, there there there are some birthday announcement.
Speaker 2:David Attenborough turned 100 years old. Wow. He's called the most consequential broadcaster of our time. And if you haven't gone down the David Attenborough rabbit hole, I highly recommend it. Major inspiration for travel and I'm glad we have Brian Chesky from Airbnb here to talk about all things travel and his business.
Speaker 2:He's in the waiting room. We'll bring him in to the Ultra Run right now. Brian, how are you doing?
Speaker 7:Good. How are guys doing?
Speaker 2:We're doing too
Speaker 1:long.
Speaker 2:Yeah. I know. Why don't we kick it off with just, you know, an update on how 2026 is going, how the business is going, what's new in your world?
Speaker 7:Yeah. I mean, things are really good. We've accelerated growth for the first time since the pandemic. We grew 10% last year in revenue. And this quarter, we announced that revenue was 18%, so from 10 to 18%, which is a pretty big acceleration.
Speaker 7:Yeah. Thank And and marketplaces are really, really hard. Right? Like, it's kind of like gravity. Once a marketplace at our size doing around a $100,000,000,000 in gross bookings a year Yep.
Speaker 7:Started to come down, it's really hard to tip that curve. So this has been a pretty big feat for the team to be able to do it.
Speaker 2:So how'd you do it?
Speaker 7:You know, it's kind of funny. A number of years ago, we so I noticed that, you know, as we got bigger, we started losing a little bit of startup intensity, that startup energy. And I asked myself, like, how can we get that energy back? Mhmm. And we basically took a very small team.
Speaker 7:We we named the team Project Hawaii. The name doesn't really matter. But it basically, I took a very small team of people and we said we're going to focus on a very very small service area and we decided to focus on conversion rate, the guest journey. I basically tried to work with a team like as if we're at Rouse Street. Rouse Street was the apartment that Jonah and I started.
Speaker 7:Said, we're going act like a startup. The team just grinded really, really hard. We weren't working like a big company. We're very small team grinding really hard, focusing on obsessing over the customer experience, really looking at the data, and we really got a lot of points in the board. Then we really started taking these pods and we really started working with the teams trying to coach them how we worked in the early days.
Speaker 7:And I just think the pace increased, the intensity increased. We really like tried to bring in like world class people onto the team. They got very very focused. We tried to get all the management and bureaucracy out of their way. And it's been a couple years.
Speaker 7:Yeah. And in fact, we're doing this last year but one of the things is as you know, financial results are lagging indicators especially when you're a big company. So it takes sometimes a while to get the the the financial numbers to reflect what's happening inside the company. But I feel like we're a startup again like more than ever Yeah. Before like where we feel much younger and smaller than earlier.
Speaker 7:And I think with AI, that would be the other thing is 60% of our code is now written by AI, which is twice our benchmark of our competitors and peers. Yeah. And it's really, really helping us. AI, I think, is a huge boon to us. I don't know if it's helped the OTAs, but it's helped us with customer service.
Speaker 7:The cost per customer service ticket's down 10%. 40% people who contact Airbnb, the AI solves the problem for them. And we brought it through the entire journey, so everything is really accelerating.
Speaker 2:On the on the the the the special team that went into optimized conversion rate, I imagine you have folks internally whose job it was basically the customer journey already. Then you bring in your special team. And is there some sort of culture clash there? Like how do you set people up for success to, you know, not get too political in that environment, actually see it as an opportunity for a win, some fresh eyes, some fresh ideas? Like what what is required to actually have success?
Speaker 2:Because I think a lot of big companies that bring in McKinsey and they put together a big deck and everyone freaks out and thinks they're getting fired and maybe some of the good ideas are surfaced, but it never really goes through. So what like, what what what what do you have to communicate to the team that is receiving information from this new this new quai team?
Speaker 7:Yeah. So it's a great thing. I mean, really, what I'm talking about has played out over really five years. Yeah. And the term founder mode, what it really meant that Paul Graham wrote was about me skipping layers of management and going into the details with teams.
Speaker 7:And instead of trying mean, here's my advice. If you're a CEO or a leader of a company that's big Mhmm. Don't try to change the whole company. Try to change a corner of the company. It's kind of like don't renovate the whole house.
Speaker 7:Pick like one room and make it perfect and then go room to room. Sure. So I really told teams like, hey, like I actually I actually didn't replace the team. I took the team that was already working. I like handpicked some people on the team, but I really just taught them the pace and I would review work very regularly.
Speaker 7:So I'd sometimes review the work weekly or even daily
Speaker 2:Mhmm.
Speaker 7:To just teach them a level of intensity, a level of perfection. And it was unfamiliar and uncomfortable. And I will tell you that not everyone liked it and some people didn't stick around the company because they didn't like that way of working but those who stuck around and the vast majority did, they realized, wow, actually, when the CEO is involved, it's actually easier. There's less bureaucracy. I try to make the work better Yeah.
Speaker 7:And I try to clear all obstacles. And so I basically did that group by group and the great thing is like I was in massive number of details reviewing everything for years but eventually it's like muscle memory. It's like a I don't know, an instructor or a coach. You have to teach them but once they learn that and they have the muscle memory like a golf swing, you can step back and now it's muscle memory. So now I don't have to be in all these details, all these teams.
Speaker 7:But I would just say a couple things to people listening. Like, great leadership is presence, not absence. I think a generation of management consulting or management school, management teaching taught us that CEOs should trust their people and get out of the way. And I don't think trust and get out of the way are the same thing. Again, I think leadership is presence.
Speaker 7:And if you if you you should actually be partnering with your people. You should be on the field with them. If you're a if you're a cavalry general, you should be on a horse. You should be on the battlefield. You're not like you're not overseas somewhere else just writing out blueprints.
Speaker 7:You've to be on the field with them and you've got to be leading from example. I think leadership from the front, not from the back. These are just some of the things we do. I think AI is going to create the equivalent of an AI founder mode, which is now you've be even more hands on. I don't think in the era of AI there should be any pure people managers because you're so close to the details, to the data that everyone has the opportunity to be hands on and it's hard to imagine only managing people and not agents.
Speaker 7:I think this hands on approach is for everyone inside of a company.
Speaker 2:How did Jordy, please.
Speaker 1:Do you think a lot about what you would do if you were you from ten or fifteen years ago and you were trying to disrupt Airbnb? Like, is that Yes.
Speaker 2:Is that
Speaker 1:a helpful exercise and Yeah.
Speaker 7:And it's slightly and it's slightly scary because I think that I've told I had a meeting with our team recently. I said that 26 year old me and Joe and Nate could could f us up if we wanted to. And so I told them this is what But I would
Speaker 1:that's because but that's because you understand this market better than anyone else. You know you know the key drivers like I don't think off Hey, the
Speaker 7:I'm paranoid. I think that if everybody sits still, I think a different group of 20 or 30 year olds could also disrupt us. Mhmm. Yeah. And I think that's true of every one of us.
Speaker 7:And maybe by the way, maybe that's not true. Mhmm. And maybe that's not reassuring because we do have a brand that's a noun and a verb. We've got a Same with Netflix.
Speaker 2:Yeah.
Speaker 7:I I think it's actually hard to build a network. That may not be possible. But the software and the app I told our team, like, we can't sit still. Like, our app is beautiful. It's really nice.
Speaker 7:Yeah. But we got to be in a world of AI native. And here's a key point I would make. I do not think a chatbot is the right interface for travel or e commerce. That might be a radical statement.
Speaker 7:ChatGPT launched third party apps last year. In March, they shut them down. Mhmm. I don't think a chatbot's the right interface. It's got four or five problems.
Speaker 7:The first problem is it's text based. You know, photos are an afterthought. The second is there's no direct manipulation. You have to type every single prompt, which is fine for a conversation, but you can't like add filters, can't cook around. The third problem is it's hard to compare.
Speaker 7:A lot of e commerce and travel is comparison shopping. If you have thousands of options, the AI has to know exactly what you want to be able to show you one or two things but you usually want to see more choices and you get lost. And most AI is single player. It's not collaborative. Let alone the fact that Airbnb, it requires people to have an account.
Speaker 7:That 85% of people send a message.
Speaker 1:So what I'm Sorry sorry to push back there, but I'm I'm Yeah. Go ahead. My wife's planning a vacation and there's like three ish hotels that we're looking at and we're looking for specific dates and she theoretically, I'm not saying the products are there yet, but theoretically you could ask a chatbot. I'm interested in staying in this location. I'm interested in these hotels.
Speaker 1:I have x y z number of people. And it could go and the agent could go and pull together like relevant sort of like listings or room types, etcetera, pricing, show me pictures and then actually do an analysis of the trade offs based on all the information available as well as Exactly. Information in other parts of the internet and pull it together and then she could share that chat with me and we could both review it together.
Speaker 7:Yes. I agree. That's the future and that's not a chatbot we described. Yeah. That's not a chatbot.
Speaker 7:It's going be a completely different interface. It's going to be well, I guess you'll have to wait and see but
Speaker 2:Yeah.
Speaker 7:I I I think the future are not apps. The future are agents. But I don't think they're going to be text forward. I think they're going to be really rich user interface.
Speaker 2:Okay.
Speaker 7:Yeah. And so I think the current chatbot paradigm, what you're describing, it can do it. I just don't think it's the best way to do what you just described. I think there's a much more immersive way to do that. Yeah.
Speaker 2:Got it. As you think back, mean it feels like at various points clearly there's been like, oh, is all of this going to move to chatbots? Or is all of is are there going to be a million competitors that are all vibe coding exactly what you have and so is software remote? The stock has not been beaten down during the SaaS pocalypse. But have you had to process those with investors?
Speaker 2:Have you had to walk people through Airbnb strengths again?
Speaker 1:Sure I'm sure you did after the, like, the twenty twenty eight intelligence crisis. Thankfully, they picked DoorDash instead
Speaker 2:of you guys, but they're very
Speaker 7:I really appreciate them picking on someone else for once. But yeah. No. Absolutely. I think I I there were entire like actually when Chachi Pitney launched a third party apps, their stock probably went down like 7%.
Speaker 7:And by the way, I thought it was a really good idea for them to do third party apps. I think it could have been successful. Sure. But they would have needed a richer SDK for it to work. Yep.
Speaker 7:It would have like like the App Store, Apple's App Store was good for Airbnb and was good for every company Yeah. Because they had a really rich user interface. Maybe this is the point I'm making
Speaker 2:Yeah.
Speaker 7:That imagine using iMessage on your iPhone to do everything when in fact like every other app has a unique interface.
Speaker 2:What I
Speaker 7:think is ecommerce, you want a very rich user interface.
Speaker 2:Yeah.
Speaker 7:It would be agentic. You could be able to have a conversation with it. You can talk to it. Yeah. I could talk back to it.
Speaker 7:But I think the point is it has to be more visual. Yeah. I think a text based interface is for some solutions. Yeah. And a chatbot that's visual Yeah.
Speaker 7:Yeah, that would work. Just saying today's chatbots aren't the right solution. The answer to your question, I had a couple new employees. Like, one of our one of our new team members is a guy named Ahmed who is the CTO of Airbnb now. He led the llama models at Meta.
Speaker 7:And one of the comments he made to me was he said, wow. Yeah. Airbnb is so much more than the app. Mhmm. And in fact, the app that you see is like 20% of Airbnb.
Speaker 7:I mean, we have typically four or 5,000,000 people staying in an Airbnb every night in more than a 100 countries around the world. So there's a lot more to do around payments, around customer service, adjudicating everything. We have a $3,000,000 guarantee against theft or property damage for a million homes a night. That's $3,000,000,000,000. There's just so many types of things around managing five and a half million hosts.
Speaker 7:We have a host app. So there's a lot of things that are beyond the guest app. I actually think the guest app would be pretty easy to copy and I think in the age of AI you can make a better app than ours and we want to make that app before anyone else does. Sure. And we want to be agentic.
Speaker 7:But I think the key is most of Airbnb is not the app that you use. It's mostly the offline experience. It's the operation.
Speaker 2:Yeah. That makes sense. Yeah. The the iMessage example is good. It's even maybe even going deeper into, like, old SMS because iMessage has hydrated so many things with the reactions and you paste a link and it hydrates it and it's becoming more of a visual tool.
Speaker 2:But it is a long road.
Speaker 1:Question Yeah. For
Speaker 7:before you say it, one of the things is the last time I was on, I did make a comment and I'll I'll make it again. Almost every AI company is an enterprise company and the last stat I think I said on TBPN was Yeah. Like three months ago and the stats haven't changed. I think it was a 175 companies in a YC batch and I think 16 were consumer.
Speaker 2:That
Speaker 7:trend hasn't changed. Almost everyone is going into coding. Almost everyone is going to enterprise. I think that's great. My whole point though is that the consumer experience hasn't fundamentally changed that much beyond a chatbot.
Speaker 7:And I think the consumer is a massive opportunity for AI. I think it's going to need to be a richer user interface. I think
Speaker 2:Yeah.
Speaker 7:People that want to do more things, they want it to be I mean, the modern AI today is text, photos, and buttons Yep. Mostly, and some videos. And I think there's a more breakthrough visual paradigm that could be much more immersive. And with the new image and video generation models, you could do something so much more immersive. Yeah.
Speaker 7:So the exact example you gave of trying to book a hotel, yeah, you can do it on chat bot, but there's probably some more breakthrough way to imagine that, to visualize it, to see the neighborhood, to see the map, to be able to talk to it, to understand where it is, to be able to compare photos to different hotels. Richer on the horizon.
Speaker 1:Yeah. That was I was I was surprised at the push into browsers last year from some Yeah. Some different AI companies. Specifically because I always I already felt like an LLM, like the chat the chatbots were helping me browse around the Internet. It was like just double down on that and helping me find information all over the Internet.
Speaker 1:But I like that it's brought together in a standardized way, right? If I like the example, you know, of of comparing like different hotels, right? It's nice to have it just like formatted the same way. So I'm looking at it. I'm not being like I wanna be influenced by the images and like the the property, but not necessarily the design of the website, right?
Speaker 1:Because they they can be disconnected. I wanted to ask if you think LLMs will impact travel in the world in the way that social media did and travel trends specifically because Instagram nowadays, like a place like Marfa in like Texas. Right? It's like it's random town or, you know, artistic type town in Texas, and then it just becomes a cool place because of Instagram, and then and then and then the entire kind of town evolves because of that. I can imagine, like, people researching like places to go with LMs could ultimately drive some of that and then ultimately reinforce each other.
Speaker 1:But but what what do you think?
Speaker 7:Yeah. Maybe the simple framework is think about a travel journey. Step one is destination discovery. Where should I travel? Step two is flights.
Speaker 7:How do I get there? Step three is where do I stay? Airbnb or hotel. Step four is like what do I do when I get there? Restaurants, activities.
Speaker 7:And step five is typically like logistics, car rental, services. And then step six is you're in the city and then you might want to do things that time spontaneously. I think LMs or let's call it the LM technology applied to, I'm arguing, a slightly richer user interface than typical chatbot will be revolutionary for step one, step two, for destination discovery and flights. Also because flights are not very hard to build, there's just three global distribution systems. Anyone can pipe in an API and have a flight booking app pretty pretty quickly.
Speaker 7:And so I think the LMs are really really good at destination discovery. If you want to say like, hey, I want to go somewhere that's like Paris but it's a little more affordable. It's good to go in August. I like Opera. Like, it's going to give you like a a very rich like suggestion of places to go.
Speaker 7:Now, I think the current chatbot doesn't have really rich maps. I think it could do a lot more visually. I think eventually chatbots or this new interface could be very video based. So imagine a chatbot that was actually video based or very, very photo based rather than a little less text based. I think that would probably be what you'd want for travel.
Speaker 7:I think what I'm describing would disrupt travel more than the current chatbots which are more acting like Google sending referral traffic and they actually the referral traffic from these chatbots are converting higher than Google. And so actually the chatbots are actually additive to travel companies. To a disremediate travel company, you would really want to disremediate the travel journey. It would have to be much richer.
Speaker 2:Yeah. I feel like do do you remember that company Hipmunk? I think it was founded by some the Right? Yeah.
Speaker 7:And actually the CEO of Reddit.
Speaker 2:That's right. Steve Huffman, right?
Speaker 1:Wait. Steve, are you talking about Hipcamp? No. Hipmonk.
Speaker 2:Hipmonk a
Speaker 7:Hipmonk was a really cool flight booking.
Speaker 2:It was a really cool flight booking dashboard and it would it would rank the flights by pain like a pain index. So Yes. It would say, well, you're not going to face financial pain because it's a really cheap flight but you do have a stopover or you do have to get to the the the airport super early. And so it would blend all these things together and it's something that it feels like could be vibe coded over a weekend now. Totally.
Speaker 2:And yet it is weird that when I open up the App Store charts, I see ChatGPT, Gemini, Claude, and then it's just AI chat apps. And we haven't had that breakout moment. Demis was on stage at YC actually talking about the fact that it feels weird that we have this super intelligence in the enterprise and vibe coding and your 60% of Airbnb's code is written by AI now and yet we don't have like a new AAA game or a new video game that everyone's playing. And I'm wondering like is that a lack of creativity? Is it a lack of risk taking that there's just too much money?
Speaker 2:It's too obvious to be able if you're good in AI, just go into enterprise because you'll just raise a bunch of money, get a bunch of customers. It's really easy to make money. It's more risk on in the consumer. Like, what do you think needs to happen? Or is it just the intelligence isn't quite there and maybe the next model is the one that unlocks it?
Speaker 7:Well, this is such a good question. I think there's like three or four factors going The first factor is I saw a tweet recently that I think there's like 60 new Neo labs being formed.
Speaker 2:Yeah.
Speaker 7:And I've met a number of these researchers and a lot of them are interested in doing the same things. Yeah. And I think what I'm noticing is most of these teams are purely AI people.
Speaker 2:Yeah.
Speaker 7:They don't have product people or designers on their team. They're picking things like science, they're picking things coding, they're picking things like we want to create a different type of model. This is great, but I don't know if all 60 companies should be doing the same problem. And so what you're seeing is you don't see a big focus on people wanting to do consumer. I think some people think that the AGI can just figure out consumer.
Speaker 7:I think that's maybe simple overly simplistic thinking. I do think you have to have a a point of view about consumer. So I think that's the first point. I think the second point is, you know, Silicon Valley has become more vibe and trend based than when I came to Silicon Valley 2007, although it was back then. And one of the things I think when people see enterprise companies doing well, they go into it.
Speaker 7:And I think there's this like natural flywheel. The other thing is I know in Y Combinator, for example, we teach the Y Combinator companies to use the other companies as their customers.
Speaker 2:Yeah.
Speaker 7:Now, back in the day, we would get them to use our product as consumers. Yeah. But I think everyone's figured out actually it's way more efficient to get them to become customers.
Speaker 1:It's like five code gen startups all being
Speaker 7:like Yes.
Speaker 1:You code with me.
Speaker 7:Code with Yes. Exactly. Yeah. And code so I think enterprise makes a lot of sense until everyone does enterprise. Yep.
Speaker 7:And then suddenly like everyone's saying consumer's hard but you know what's also hard? Like competing with 10 other companies and enterprise doing your idea too. That's also hard. Yeah. I think additionally, the image and and video generation models are having a I think image two is almost like a Claude code breakthrough.
Speaker 7:It is so good now in the Cdance video models that I think we're about to enter this new era where suddenly going beyond text is possible. I think you're going to even be able to see real time AI generated interface in the next year or two. My prediction is this has been the era of enterprise. Even ChatGPT's breakout success, I would predict that most of the revenue is going to going to Codex. I might be wrong but just given how much money is going to Claude.
Speaker 7:And I think in the next two years, you're going see a massive revolution in consumer. And I think you're going to need a couple of companies to lead the way. Yeah. I think we need reference points. I mean, even me saying the chatbot's not the interface, people are probably asking, well, what is?
Speaker 2:Yeah.
Speaker 7:And someone needs to be the one to do that. I mean, we're going to try to do our part. Not sure Airbnb will be the company to blaze the trail, but I think someone has to. I think in another era, it would have been Apple, like the Steve Jobs era Apple would have done that. Maybe Apple will do that, but they would have been typically the company that would have done that.
Speaker 2:Yeah.
Speaker 1:Are you worried that everyone is working on the exact same thing? And when I say exact same thing, I mean agents that can do things on your computer and or, well, you know, look at the iPhone app store chart or look at look at the early stage startup market. Right? A lot of companies, you know, whether the full spectrum of companies from hyperscalers to labs to neo labs to
Speaker 7:I'm not I'm not too worried. I might be a little worried for the entrepreneurs if they're like the tenth company doing something. I mean, like, Peter Thiel was one of our earliest investors and he used to he wrote this book Zero to One that a lot of people listening probably read. He has a saying, Competition is for Losers, and you want to kind of try to do something that no one else is doing. Back in the day, that was enterprise because everyone was making an app.
Speaker 7:And now I just I have to be careful about being the tenth company doing something unless you're going to be a lot better decisively. It's just really, really hard in a crowded market, so you want to kind of zig when everyone else is zagging. So I'm not too worried but maybe a little bit, and I would just encourage entrepreneurs to try to claim a space for their own. And by the way, Airbnb was that. It was kind of accidental, but like like in 2007, everyone wanted to do like a social networking something.
Speaker 7:And we were like it was tempting for us to try to be a social networking something something as well. It was accidental that we inflated three airbeds one weekend and created Airbed and Breakfast and people thought it was the worst idea ever. I guess it became like the worst idea that ever worked, but we carved our own space as did Uber and we weren't trying to be anything else. And so I kind of and by the way, OpenAI wasn't trying to be anyone else either. Maybe they were a little bit like DeepMind, but AI was not the thing Yeah.
Speaker 7:When OpenAI Anthropic got started. I do think there is something about not chasing trends. I think once it's a trend, it can be a little crowded and to try to claim out your own space. And I would say there's so much of The US economy that AI hasn't yet touched.
Speaker 2:Yeah. On that note, how are you talking to or how would you talk to designers or RISD students about applying nontechnical skill sets or non AI disciplines, non computer science backgrounds to consumer?
Speaker 6:The reason
Speaker 2:I ask you is I feel like there's pushback against AI in design communities, in colleges right now broadly. AI is not particularly popular and there's a lot of fear of job loss. But at the same time, you know, I'm sure, like, the tools have changed throughout the history and there's an and I feel like you believe that there's incredible opportunity, but I'm worried that some people are not jumping on that opportunity because they have hesitations about various, Oh, well, does this displace this tool or how was this made or is this the right tool for the job? Should I even be using this?
Speaker 7:Yeah. I'm really worried that an entire generation of designers, artists, and creative people are going to decide to kind of sit out AI and I think it's the biggest opportunity for creative people in my lifetime. By the way, this is not the first time designers were late. We creatives and designers were really late to the Internet and web. Yeah.
Speaker 7:So going back thirty, thirty five years, most of the prestigious designers did not get into so called web design. Web design was considered a lower tier, lower status design and they stayed with print, all the established people. And so, they did not really chase design. What ended up happening was because you had a lot of these really excellent designers that did not go into web design, I think what happened was a lot of there were a lot of good people that became web designers, but I think there became a gap between web design and engineering. You had people that, you know, maybe didn't have the full full design skill set.
Speaker 7:What happened was this function emerged called product management. Product management, I'm not arguing against. We have product managers. It's very important. But in industrial design, there's no product managers.
Speaker 7:For the most part, they're industrial designers. In architecture, the architect is the product manager. I think what ended up happening in web design, designers are very, very narrow. There was a void. Product managers filled that void.
Speaker 7:I'm not arguing against that model. But I think if designers sit out, what you're going to see is engineers and product managers designing for them. I think the counterpoint is designers can be engineers and product people for intents and purposes. Said differently, if I were starting Airbnb today, I'd be Vibe Coding and Claude Code. Yeah.
Speaker 7:And I'm trying to do it now. I'm doing it I'm for not really going be doing anything productive Airbnb. But if I was 26, I would have thought of myself as a technical person. I think all designers should think of themselves as product people and as front end engineers if anything. And so I think this is a boon.
Speaker 7:I don't think that the future of of the Internet has to be all text based. I think it can be very visual. I think that photo and video generation models allow you to design incredibly rich interfaces and this is I think the best time in the world for designers and creative people to get involved. I think they're just a little bit afraid and I whatever we can do to enlist them to just get their hands dirty, many designers are. I just think more should get involved and not be even beginning getting out of typical wireframes.
Speaker 7:Just start coding.
Speaker 2:Do you think so assuming we solve this problem of not enough creative people working in consumer, we build we as a society build cool new consumer products and experiences and apps. There's something that deserves to be at the top of the app store. Has distribution and the acquisition of customers and users changed structurally? You know, you were very good at SEO and Google and there was a referral program. Do those patterns still work?
Speaker 2:Are they broken? Is there a new playbook that needs to be rolled out for anyone who has something that's great but they need to get it in the hands of consumers broadly?
Speaker 7:I think we need new patterns. This is a funny saying. I think the highest turnover job of any executive at Silicon Valley might be the CMO. I don't know for sure but, like, you you don't see a lot of turnover of CFOs. You don't see a lot of turnover of CTOs.
Speaker 7:Yeah. But, like, Amazon was famously and I I don't know if part of my theory is that like what works in marketing changes every few years and you have to be adaptable and your old playbook gets outdated. So marketing is unfortunately one of the hardest functions. I have a huge amount of respect for people in marketing because once something works, it almost becomes stale because then everyone does it. Yep.
Speaker 7:And so, like, influencer marketing was really successful until everyone did it. And then people kind of tuned it out. It's this thing called banner blindness. Banner blindness is after you see something over and over, tend to be blind to it and so you need a new tactic. So, I think that a couple thoughts.
Speaker 7:Number one, I think that just like we need new interface design, new creative experiential approaches, We also need new types of marketing. I don't know off the top of my head what that is. It's probably something we haven't done before.
Speaker 2:Mhmm.
Speaker 7:I mean, Joe and I, we did bizarre things like we sold collectible cereal boxes Mhmm. And we when social media was new, we were all over social media. And when when there were newspapers, we would hunt down reporters and, like, try to get them to write about us. But, like, people ask me, how do I get users? I'm like, all the tactics from 2008 aren't relevant anymore.
Speaker 7:So you got to be relevant and you got to find new tactics. The second thing I'd say though is you're right, the distribution is mature. When we started Airbnb, the App Store was young. In fact, the Internet was still young. I mean, we could just you could launch a website and just ride the growth of the Internet.
Speaker 7:And it's hard. The Internet is not growing like it did before. In other words, people were coming onto the Internet in hundreds of millions a year, new users. So I do think distribution for consumers mature. At the same time, the top apps in the App Store are new apps.
Speaker 7:They're they're they're mostly chatbots. What that tells you, if you do something truly breakthrough and revolutionary, consumers will still probably find it. I think the two principles are do something so revolutionary, consumers will find you. And number two, you're going to have to find your own new tactics and you know, anything that is standard is probably stale.
Speaker 1:Well said. Have one more. Yeah. Looking out into the future, you've ridden the growth of the short term rental market. You dominate it now is is the biggest opportunity to just continue to make the best product in the category, ride the continued growth of it, or do you think there's another STR size market for Airbnb?
Speaker 7:I think the biggest opportunity for Airbnb is to go beyond our core business. I do think, you know, our core business does close to a $100,000,000,000 in gross sales if you net out all the other businesses or gross booking value Yeah. Total amount of reservations going through the site. I think that could probably double one day. I don't know how long that one day is, but for every person who stays in Airbnb, eight or nine stay in a hotel, I think we can get one extra person in an Airbnb eventually.
Speaker 7:And I think that can get you to 200,000,000,000. I think there's a market much larger than Airbnb which is hotels. Again, hotels about eight or nine times the size of Airbnb. I don't think we'll ever be a hotel dominant site but we are going more aggressive into hotels. A fun thing is that about half the hotels in the world are independents and boutiques.
Speaker 7:They're not chain hotels. Mhmm. And they're not really happy listing on the OTAs because they pay a higher commission to chains. A lot of these independent hotels are being forced or they feel like their hand is being forced to franchise, to Marriott, to Hilton, and other brands because they have loyalty programs. They can, you know, they can negotiate lower commissions.
Speaker 7:So we think we can be a distribution channel for these boutiques' independents. That is a multibillion dollar market. I think another one would be services. There's no Amazon for services. And, you know, think about like you can hit a button and a car can pick you up.
Speaker 7:You can hit a button and food can be delivered to you. But what about hitting a button and having 80 other things possible? You know, I don't know if any one market is large, but if you add up the 80 different service verticals, that to me is another pretty big market. And then maybe the last one is like living, stays longer than thirty days. More and more people have a job via laptop.
Speaker 7:More people are nomadic. More people are moving around. That's another really big market. So I think for Airbnb, we're looking at really expanding to a lot of different categories and I think that's where most of the growth is going be in the future.
Speaker 2:Do billboards in San Francisco work on you? Going back to marketing, it's one of these old things where like, yes, I I completely agree with you. Like the the CMO who did the first billboard campaign back in the fifties probably printed legend,
Speaker 5:you
Speaker 2:know, books written about them.
Speaker 1:Well, the billboard campaign that were Sell
Speaker 2:off now.
Speaker 1:The last couple years was just buy so many billboards that people are like, wait, how did company buy so many billboards?
Speaker 2:And so I'm wondering is your thesis on marketing that these things go in cycles and yes, we might be out of the influencer marketing meta right now, but it's going to come back in five, ten years, who knows? That's possible. Or or is it rise and fall
Speaker 1:I think these channels Yeah. Though, they they don't go away. Yeah. They just stop being like, if you do this thing, you're gonna grow like crazy. Yeah.
Speaker 1:Still need to do that thing, but it's no longer an R.
Speaker 2:Okay. Yeah. What do you think?
Speaker 7:You guys are Okay. So so one thing I have to acknowledge
Speaker 2:Yeah.
Speaker 7:Is I think all of us advertising works better on us than we admit. Yep. I I honestly, I I we we spend a lot on like all these ads and I kind of think to myself, does do these really influence people? Yeah. Like and if they do.
Speaker 7:If they didn't, we wouldn't be spending like a billion dollars a year on advertising. So I want to admit that advertising does influence us more than we realize. There's, I think, the last studies that show, like, oh, that doesn't change my mind. But you see something seven times and it probably even if you don't want to believe it, you might start believing it.
Speaker 2:Yep.
Speaker 7:So clearly, it works. Yep. I do think though the ROI of new ideas works a lot better. Just for example, we spend a lot on advertising, but the most popular marketing we've ever done is like when the Barbie movie came out, we took a house in Malibu. We turned it to Barbie Malibu Dream House.
Speaker 7:And it was like new and the whole internet talked about it. Yep. And the ROI of that was better than any ad we've ever done. Right? Yep.
Speaker 7:We've done things like that. So I do think doing kind of crazy, slightly unhinged things that people notice like, I mean, you guys are successful because you're different. Right? I think. Yeah.
Speaker 7:I think being different is the key to marketing. And so, if you have a billboard, people are probably influenced. But if you if it looks different than another billboard, it's going to work.
Speaker 3:I think
Speaker 7:the key to marketing is to be different because you got to stand out.
Speaker 2:Yeah. Yeah. The the the Red Bull Baumgartner, the the skydive from space is I think like a thousand x ROI. I think they spent less than $1,000,000 on that. And it would it I think it has a billion views or something like that.
Speaker 2:Space. Great example of that.
Speaker 1:Space. But if like 10 people did that
Speaker 2:and that 10 wouldn't
Speaker 7:work as well.
Speaker 2:And that's probably why they didn't do a sequel and then another one and another one. Went and found something else. Let's put a plane through a tunnel or fly a you know Yes.
Speaker 6:A hot
Speaker 2:air balloon upside down or something.
Speaker 1:Get a blimp get a blimp on Airbnb that I can go on a sky cruise.
Speaker 2:Sleeping in a blimp.
Speaker 7:Yeah. That would be that would be a that would be a very good idea. Maybe we can talk about.
Speaker 2:I'd love that.
Speaker 1:Ship it. Definitely. Podcast.
Speaker 2:Yeah. Know I how long it takes Yeah. To get to LA to San Francisco. If it takes me two days, three days, but I have a beautiful view Would you guys do that? I would 100% do that.
Speaker 2:And you. So so we say things like this all the time where we're like, oh yeah, like we'll definitely like do do something and oftentimes it's hard to schedule but we have been talking about blimps for like an over a We
Speaker 1:know we can broadcast. We've been having To happen with a blimp. We've been having guests call in from their jets Yes. With Starlink and the connection is perfect. It is.
Speaker 1:So much so that people in our chat sometimes don't know that the person's on a okay.
Speaker 7:Airbnb and TBPN
Speaker 2:That's are gonna
Speaker 7:work together on a blimp partnership. Yes. You guys are gonna broadcast broadcast across the country on a blimp.
Speaker 2:I love it. I hope he's
Speaker 7:gonna be a part of that.
Speaker 2:Yeah. Wanna make this work. Let's let's Let's let's figure it out.
Speaker 1:Let's go cooks.
Speaker 2:Fantastic. Well, thank you so much for coming Thanks for F show.
Speaker 9:Have a great
Speaker 2:weekend and we'll talk to you soon.
Speaker 1:You're the man. Alright.
Speaker 7:Bye. Bye, guys.
Speaker 2:We're going on a blimp baby. Blimp. For blimp maxing. Let's go.
Speaker 3:We've been waiting for this for so long. We've been thinking about blimps, what we could do with them and we finally have
Speaker 4:the perfect fit. I couldn't be more excited. Thank you for tuning in to TBPN today. It's a fantastic show.
Speaker 2:And thank you to our guests and our
Speaker 3:audience. And leave us five stars on Apple Podcast and Spotify. Sign up for our newsletter at tbpn.com.
Speaker 2:And That was supposed to cut to John. There we go. Oh. Yeah. Anyway
Speaker 1:We love you guys.
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Speaker 1:Have a great weekend.
Speaker 2:Goodbye. Love you.