Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 12 - 3 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching TBPN live. It is Friday, 03/21/2025. We are live from the Temple Of Technology, the Fortress
Speaker 2:Of Finance. The capital of capital.
Speaker 1:This show starts now. Jordy, what's going on on the desk? There's a bottle of Dom Perignon there. It's not a Dom What's going on?
Speaker 2:Friends over at Slow preempted our Dom episode. Oh. So they said, hey, the growth this week has been tremendous. We wanted to have the next Dom episode be on us. So Yeah.
Speaker 2:Thank you to Thank you. Sam Yoni They're kind
Speaker 1:of in the business of
Speaker 2:over at Slow and Jack, of Of course. So yeah, they're just you know, basically preempting our Dom episode. I love it. Yeah. We'll have to
Speaker 1:I got very excited when I saw this. I love I love a nice bottle.
Speaker 2:Yeah. When I was opening it, like the way the box was, I thought somebody sent me a plant.
Speaker 1:Oh, it's great.
Speaker 2:Yeah. And there we go. So thank you guys. This is a $20.15
Speaker 1:bottle.
Speaker 2:Very tempting. Very tempting. It is a Friday. Very tempting to crack into it, but we we like to do Dom episodes on Monday. Yes.
Speaker 2:Sort of power lunch. Start the week strong. But thank you to the Slow Ventures team.
Speaker 1:Fantastic.
Speaker 2:And let's get into the show. We got some great guests today.
Speaker 1:Yeah. We got some great guests for you. I think we have four different guests coming on in about half an hour, but we're gonna rip through some news. There's a ton of stuff to talk about. First up, Perplexity is in early talks for a new funding round, at 500 they're raising between 500,000,000 and a billion dollars at an $18,000,000,000 valuation.
Speaker 1:I mean, you gotta kick it off with a size gone for Perplexity. Absolute dogs over there.
Speaker 2:Absolute dogs. Big numbers.
Speaker 1:They'll be doubling their valuation from December.
Speaker 2:That's right.
Speaker 1:And it's March. So that's three months double. ARR is also nearly a hundred million dollars. Not too bad. Let's break it down.
Speaker 1:Let's read this little Bloomberg article
Speaker 2:and post some reactions. I feel like the posters didn't like this, but we can wait for some of those reactions.
Speaker 1:Mixed. I found some very positive posts in here. We'll get to I found some more critical posts. We'll break it all down. We'll give our take.
Speaker 1:So Proplexity AI, a startup building artificial intelligence search engine to compete with Google, is in early talks to double its valuation to 18,000,000,000 in a new funding round. The company has discussed raising as much as 500,000,000 to 1,000,000,000 in the round. Founded in 2022, it's a pretty young company, just three years old, Perplexity has emerged as one of the most prominent startups using generative AI to rethink core Internet services. Last year, Perplexity tripled its valuation from 1,000,000,000 to 3,000,000,000 and then tripled it again several months later, a sign of the immense investor interest in all things AI. This new $18,000,000,000 valuation would include the amount raised in the round, so that's a post money valuation.
Speaker 1:But still, seventeen seventeen billion pre money isn't that bad.
Speaker 2:What's pre or post among billions?
Speaker 1:Yep. At this point, it doesn't really matter. Their ARR is nearly a hundred million. Perplexity said it has more than 15,000,000 active users. They're facing growing competition from Google and OpenAI in its core search business.
Speaker 1:OpenAI rolled out a search product to all of its users of its chatbot ChatGPT, and, of course, Google has those AI generated autofill answers. I forget what their what their product name is for that. But basically, when you go to Google You get Gemini. Yeah. You get an AI generative AI.
Speaker 2:And they count all of those as Gemini users. Yes. Which is cool too. It's great.
Speaker 1:It's cool.
Speaker 2:Yeah. You're if you're optimizing for usage, it's great if you are literally Google. And anytime somebody Google searches, you can sort of
Speaker 1:Yeah. They're a user.
Speaker 2:Put it on the
Speaker 1:I mean, this is what's happening with llama too. I mean, like, llama's been forked into WhatsApp and stuffed into Instagram.
Speaker 2:Put it in Yeah.
Speaker 1:It's the number one LLM. It's the one people are talking to. Let's talk about the backers. Perplexity is already backed by SoftBank, Vision Fund two, Nvidia.
Speaker 2:I didn't know
Speaker 1:SoftBank got
Speaker 2:in there.
Speaker 1:Softbank getting in early in this case.
Speaker 2:Oh, don't they have some big I think Softbank is a big customer too.
Speaker 1:Oh, really?
Speaker 2:They're doing this thing where they're sort of Yeah. Investing and becoming heavy users
Speaker 1:Yeah.
Speaker 2:Dog fooding the product.
Speaker 1:Well, we should have the founder on because I I mean, he's a very interesting he's a very interesting figure, very interesting poster. And obviously, I mean, I've used the product. I'm not I'm not like a daily active right now, but I think I think it's cool. And I think we'll get into this later, but Sam Altman was just on Strathecari interview talking to Ben Thompson. And on there, Ben really tried to nail him down on where the value is going to accrue in AI.
Speaker 1:Is it gonna go to the application model layer? And this has been the big debate with all the new foundation model companies. And Sam and it's funny how it's funny how Ben like phrases it to try and kind of like nail him down. I'll actually pull up the exact post. It was from Tane.
Speaker 2:According to Perplexity, SoftBank Vision Fund two invested between 10 and 20,000,000 in Perplexity as part of a larger $250,000,000 funding round. This was back Yeah. Last year. And so SoftBank has gotten almost a five x, I think, on this. More than a five x potentially on this.
Speaker 1:Another size
Speaker 2:the size gong for that.
Speaker 1:So Ben Thompson was interviewing Sam Altman, trying to get to the bottom of does the value accrue to the model layer or the application layer?
Speaker 3:And he
Speaker 1:can't just say that. So, of course, he has to, you know, come up with a good question, and he asks Sam this. He says, what's going to be more valuable in five years? A 1,000,000,000 daily active user destination site that doesn't have to do customer acquisition, wink, wink, wink, ChatGPT app installed on everyone's phone already in the home row on my phone, or the state of the art model. And Sam Altman says, the 1,000,000,000 user site, I think.
Speaker 2:Yep. And
Speaker 1:so Sam is now you know, he was at the forefront of the state of the art model race. Now he is somewhat acknowledging that the value might accrue to the application layer, and he is actually this is what heard from acknowledging that. He is He's pushing that narrative now because
Speaker 2:think he views it and we've talked about this before. The reason that Elon can train a model fairly, he makes it look easy to train a model that's competitive with OpenAI, much harder to get an app that will is pacing towards having a billion, you know, users. And so that says it all.
Speaker 1:Yeah. So it's like if you have distribution through X, you own X or you own WhatsApp or Instagram or you own Google.com, you're gonna do very well. Harder to bootstrap a new destination site with billions of users. We saw in the perplexity numbers 15,000,000 active users. That's a ton.
Speaker 1:Yep. But they gotta grow that. They gotta get into the billions because that's where the consumer tech apps really play.
Speaker 2:Yep.
Speaker 1:But it's interesting. Yeah.
Speaker 2:The b they call it the b
Speaker 1:zone. The b zone. But yeah, I mean, it's interesting because like for a long time, the the the hater, the Sam haters were very much like, oh, like he's like, all the value is going to accrue to the application layer, not the model layer. He's stuck on the model layer. And now he's kind of like pivoting his argument and the narrative's kind of shifting and now it'll just be interesting to see how that plays out because it's
Speaker 2:oscillating back and forth.
Speaker 1:Yeah. Yeah. It's always unclear. It's like it's like, is the CEO spinning
Speaker 2:the narrative? Because Ilya is saying
Speaker 1:this truth.
Speaker 2:Is, yeah, you guys can have fun at the app layer. Yeah. I'll see you. I'll see you at ASI.
Speaker 1:See you at ASI. Yeah. Anyway, I wanted to go through some reactions to Perplexity in general. Our buddy, Emmett Schein, said this was a couple months ago, but he said he set up Perplexity as my default search tool within ARC. I use Claude for creative work and ChatGPT for general larger processing work.
Speaker 1:I like Perplexity's multimedia results for search. So far, so good. And in the little video, he shares, what's he searching for? Rorapfastfiltering. I thought that was a really cool Easter egg.
Speaker 1:He's doing a little shout out for for our friends over at Rorah.
Speaker 2:Well, Emmett did Emmett did the branding for Rorah. Yeah. So he's a shareholder.
Speaker 1:Oh, there we go.
Speaker 2:Like, you know, one hand washes the other. Other. Yeah. Which we love. The cycle.
Speaker 2:Ash
Speaker 1:Aurora has a funny post here saying, at this point, perplexity not raising every six months is a bear market signal.
Speaker 2:Yep. But, yeah, mean, if you're the radar They've set the bar high.
Speaker 1:And if you're trying to go after Google, if you're trying to go after a trillion dollar company, yeah, you're gonna need a lot of capital. You're gonna need a lot of aggressive growth targets. So it's not an unreasonable strategy if you're underwriting it against Yeah. We're gonna be the next Google. But it is a high valuation.
Speaker 2:Yeah. And on the next Arvin, the the CEO says on the next post, perplexity will make Apple intelligence work. So That seems
Speaker 1:that seems obvious. That seems true. Like, he's not bluffing out.
Speaker 2:In many ways, Perplexity, the team at Perplexity would do a much better job leveraging the power of Apple Yep. And their position in the market than Apple's current AI team. Totally. So I can, there is a world where, there's a world where Apple, you know, has to like pay a huge premium to just buy a great AI product team.
Speaker 1:Which is not in their DNA at all. I don't think they've ever done a multi billion dollar acquisition. It's super, super rare.
Speaker 2:They really think small. But you're thinking, you know, Apple's evolving as a company. They're not seemingly in a position now where they're able to do deep, innovative visionary They're
Speaker 1:shuffling. They're shuffling.
Speaker 2:They're shuffling up. And if Apple was ever going to move from a, hey, just, we do all of our R and D in house. We, you know, we don't sort of acquire teams, etcetera.
Speaker 1:This would be a
Speaker 2:big shift. Yeah, it would be a big shift but might be something that over time, you know, don't think if Apple paid $20,000,000,000 to acquire Perplexity today that the market would love it. Yep. But you could see a world in the future where, you know, something like that could make sense.
Speaker 1:Yeah. Mean, the shareholders would be like, Apple, what are you doing? You you wasted like six weeks of cash flow on this company. What are
Speaker 2:you doing? No. It's but honestly, think it's more like I I forget the actual number but I mean, we have When we ran the numbers on like Tim Cook's comp versus like how much money they make and like Tim Cook like barely makes like, you know A day.
Speaker 1:Cash flow.
Speaker 2:Poor guy. Poor Poor guy. But you know that the dynamic here that's interesting him saying we're gonna make Apple intelligence worth. Apple makes $20,000,000,000 a year from Google
Speaker 1:Yep.
Speaker 2:Through their search integration. Yep. So for Apple to wanna integrate, I'm sure that there's something related to that that would prevent
Speaker 1:Well, also have a Apple has a deal with ChatGPT. And in theory, you can ask Siri to go to ChatGPT. And you can actually, on your phone, if you're on the latest OS, you can add your ChatGPT Pro credentials. And it basically uses the consumer API key to send the query to ChatGPT. Should be a great experience.
Speaker 1:I can never really get it to work, though. It it still gets confused about where to route the query, which is really rough. They I think they're just so spoiled from the experience of Google where it was just Yeah. There's just this one little bar in Safari, and then they route it to Google, and that that's the end. And this is a much more nuanced consumer experience.
Speaker 1:But clearly, a a strong deal between Apple and Perplexity would be transformative for Perplexity.
Speaker 2:Yeah.
Speaker 1:And so good luck to him as he tries to hunt that down. Should we go to Near? This is a great post.
Speaker 2:Great post.
Speaker 1:It's just, like, tangentially related to Perplexity, but I like it. Every man has a stack. For some, it's Creatine and Magnesium. For other, it's Arch Linux and Vim. Some just answer Perplexity and Claude.
Speaker 1:Others have Vercel and CloudFair CloudFlare or NGINX and Redis. Some guys will even say Bitcoin and Ether. The essence of being a man, you must have a stack. I love that.
Speaker 2:I mean, my daily show stack is very much Lucy and your Vimante. You're I'm on
Speaker 1:the Celsius and and the nicotine pouches and the creatine and some chat GPT here and there. A lot of x. X Scaling stacks.
Speaker 2:Say is
Speaker 1:in my stack. Yeah. And and a stack of weights in the in the weight room beforehand. This is this is a very funny post, but but I agree. And then there was this interesting Perplexity ad they're doing.
Speaker 1:It's like Apple level cinematography when I saw this. So they this is from a few days ago, March 17. Perplexity just dropped its first celebrity ad starring Squid Game's Lee Jeong jae. I botched I botched that pronunciation, I'm sure. Yeah.
Speaker 1:Anyway, he's the guy from Squid Game. We love him. The AI search startup takes a jab at Google. They call it Poogle with a cheeky line, don't use glue, which was a reference to
Speaker 2:a very, I think, Gemini resignation
Speaker 1:suggesting that you should eat glue on Yeah.
Speaker 2:Something related to mozzarella.
Speaker 1:Yeah, and then Katie Nutipolis over
Speaker 2:What I like about Arvind is he's not willing to poke the bear. No. So in the case of Google
Speaker 1:He's afraid
Speaker 2:to poke the bear. He's not, yeah. Sorry. He's not afraid to poke the bear. He will clear frequently get in Sam Altman's comments and
Speaker 4:gets a little
Speaker 1:spicy. Sometimes he goes a little bit too far. But I like a challenger CEO. Like
Speaker 2:you're fighting with a bull.
Speaker 1:And just from a comms perspective, we should talk to Lulu about this, but I think there's something about when someone is so much bigger than you, your downside is so limited because if they reply to you at all, you're blowing up. It's like, oh, you were acknowledged by the gods.
Speaker 2:He probably runs the numbers on what percentage of ChadGBT's users can I sign up for my product if I get Sam to reply to me?
Speaker 1:Yeah. Me just do
Speaker 2:whatever it takes to get the
Speaker 1:Poke the bear. Poke the bear.
Speaker 2:Yeah. Yeah. This this article was I mean, this ad a
Speaker 1:little bit of this ad, Ben, because it was a little controversial. So token vendor here quote tweets this and says, perplexity seems to be on a path to be a case study. I will not elaborate. But look at look at this ad. This is beautiful.
Speaker 1:It's really, really well done. And, I mean, the lighting, everything, the sets, like, this feels like it would be at home with Apple. But I think people are a little bearish on this because it's like, oh, they're spending too much before they have, like, true breakthrough consumer adoption. Feels like a Super Bowl ad. People are always really skeptical about like, oh, you're advertising too much, but it's like, this is a consumer war.
Speaker 1:You gotta get people you gotta you gotta get people Yeah. On. And I think it's, I I I think it's fun. I think it's a well produced ad. So he goes to Poogle and does not get a good result.
Speaker 1:And I mean, the they clearly made the font smaller.
Speaker 2:I've never watched this show.
Speaker 1:Oh, you never watched this. Watched it. Was pretty good. It's very funny because because they they they created like a fake Google and they clearly sized the text down so it just looks like a complete wall of text. Whereas when when he uses perplexity here
Speaker 2:Just like a
Speaker 1:single it's just like very clear, much larger text.
Speaker 2:I I like their positioning as an answer engine.
Speaker 1:It's a good phrase. And they also have nice merch. There's been some cool coffee cups I've been seeing on the timeline that are pretty cool. Clearly like
Speaker 2:the token vendor line was in reference to Perplexity launching a venture fund. And the response at the time was, hey, I don't even think they were in the top 25 Mhmm. Apps Mhmm. In their category at that point. And so the pushback would be like, why do you have a venture fund?
Speaker 2:Yep. You know, you should just focus on the product. Yeah. Yeah, they're getting attention. I They're getting users.
Speaker 2:They're 16 in the charts right now.
Speaker 1:Yeah. If I have to go long short on this, I would go short perplexity venture fund, long perplexity cinematic ads. Because Yeah. You're trying to get consumers to use it. It's much you have to do this crazy dance of logic.
Speaker 2:We saw all the things.
Speaker 1:Invest in this company, and then our product will become better
Speaker 2:All the ads. Because
Speaker 1:ads work.
Speaker 2:Yeah. All the ads from the Super Bowl, from the big AI players
Speaker 1:Yeah.
Speaker 2:The Googles were very mid. Like, very Yeah. I I don't remember any of them at this point. I remember
Speaker 1:Sure.
Speaker 2:Bits and moments. I remember the OpenAI one The OpenAI one was was cinematic and cool.
Speaker 1:Yeah. But for a lot of these, it's just like you gotta just remind normies that you exist. And hey, yeah, you should try this out, you know, if it if it drives installs Yeah.
Speaker 2:This marketing is better for the average American. Yeah. Perplexity's new ad
Speaker 1:Yeah.
Speaker 2:Than the OpenAI sort of sun god Yeah. Black sun.
Speaker 1:Yeah. Black sun was weird.
Speaker 2:Worshiping the black sun. We're all we're all turning into bits.
Speaker 1:Anyway, you do an $18,000,000,000 you you raise a billion, add an $18,000,000,000 post. Let's say 809 hundred million of that secondary. What's the first thing you're doing? You're heading over to Bezel. Bezel.
Speaker 2:Yeah. Bezel. That's right.
Speaker 1:Get bezel.com. Shop over 23,500 luxury watches fully authenticated in house by Bezel's team of experts.
Speaker 2:That's right.
Speaker 1:Pick something up.
Speaker 2:And We love you, Bezel.
Speaker 1:In terms of other amazing wearables, we got breaking news from Big Screen VR. They launched the Beyond two. There we I am so excited for this. This is just a fascinating story of a company that's just been grinding in VR for so long. I hate to take
Speaker 2:anything away from big screen, but I almost forgot briefly about that Soul Reader company.
Speaker 1:Oh, yeah. Yeah. That's Trey's company.
Speaker 2:Yeah.
Speaker 1:I have one. E Ink screen, very different But that's
Speaker 2:that's what I want. Are they sell are they delivering it?
Speaker 1:Yeah. Yeah. Yeah. You can get a Soul Reader.
Speaker 2:You should. That's
Speaker 1:great. Soul Reader's great right before bed. Yeah. Because you just throw it on it can pull in articles. It can pull in ebooks and stuff.
Speaker 1:I read read The Driver, that story about Cannonball on The Soul Reader.
Speaker 2:Nice. Great.
Speaker 1:Great. Alex Roy.
Speaker 2:Yeah. My main thing is I'm falling asleep. Yep. Right now, do a lot of audio. Yeah.
Speaker 2:You don't want light.
Speaker 1:So it's just it's very it's very warm color temperature. There's no blue light.
Speaker 2:So big.
Speaker 1:And so you'll just fall asleep in, five pages. It's honestly hard to finish
Speaker 2:the I'm sorry to the big screen theme. We got Well, it's
Speaker 1:a very different use case.
Speaker 5:No. No.
Speaker 1:I know. It's a very different use case. So with big screen, it's for this, like, really immersive, like, Ready Player One style VR. And it's so, so light. They they launched the big screen one last year or maybe the year before.
Speaker 1:They launched the big screen BEYOND two just a few days ago. We're trying to have the the CEO on soon to talk about it. And, actually, one of my friends, Kyle Russell, works over at big screen now too.
Speaker 2:Oh, nice.
Speaker 1:So it's a hundred and seven grams, which is phenomenally light. And John Carmack, when he was at Meta working on their headsets, said that the key to creating consumer adoption in VR was, I think he said, like, a hundred dollars, a hundred grams. So if you make it super light and super cheap, people will just start throwing it on. And there's a bunch of interesting post that we'll go through here. But they're they're claiming breakthrough optics, a 16 degree field of view, edge to edge clarity, a massive sweet spot, reduced lens glare, increased brightness, and eye tracking improved for shareability.
Speaker 1:We added adjustable IPD so you can adjust where the lenses actually go over your eyes. You can give it to a friend. The first version was they would actually like three d print your face onto the Oh, cool. Mold and and we should pull up the video if we can, Ben, to kind of show
Speaker 2:you shipping in less than a month.
Speaker 1:Oh, yeah. And and the demand was crazy. I think they sold twice as many as the previous version.
Speaker 2:How does it integrate Take
Speaker 1:a look take a look here. To any headset in the world. And our community loved it with Beyond Becoming People's Daily Driver VR headset for VR chat, racing sims, and other VR games. But our community has been asking for more, asking us to push further on optics and a wish list of new features. After years of cutting edge research and development, we're unveiling our most advanced product yet, Big Screen Beyond two.
Speaker 1:Let's go.
Speaker 2:Let's go. I'm so hyped. I'm never taking these off. Yes. That looks very cool.
Speaker 1:Yeah. Somebody actually did a teardown of this headset too. They, like, cut out even more stuff and got it down to, like, 60 grams, which is, like, nothing. Feels like just having, like, a pen on your face, basically. But, I mean, the weight thing this was the number one complaint about the Apple Vision Pro.
Speaker 1:They've just gone completely the other direction to give you a super, super light headset. Now they've made a bunch of sacrifices to get there. Like, you I'm pretty sure this thing has to be powered by a computer. It has to be plugged in. There's a bunch of different things that you have to do.
Speaker 1:It's for a prosumer or kind of a developer almost. But I want to figure out how to get this rig built out really, really easily with maybe some small Mac mini powering it or some NVIDIA box that I can just use super simply and just have this wonderful experience. So but, Palmer Luckey's actually been a big proponent of what, big screen's doing. He wrote, we're on the path or he was he was interviewed and was talking about it. We're on a path where we can make virtual reality devices that provide matrix level immersion.
Speaker 1:The big screen VR costs $990, and it weighs one fifth of the o Oculus Quest Pro. Apple headset display is the next generation, for the same company. And so he was interviewed by p Peter Diamandis and and talked about how how excited he was about that direction. And Carmack was saying the same thing. We mentioned this.
Speaker 1:Big screen beyond feels like a prop from a futuristic movie, but it works far and away
Speaker 2:from most I really do sim racing in here.
Speaker 1:Totally.
Speaker 2:We have to in the new in the new studio, we're waiting a sim racing Sim racing
Speaker 1:for sure.
Speaker 2:Setup. Like, the most ridiculous rig.
Speaker 1:I went there there there's a place in Pasadena that has, like, full sim it doesn't do VR because I think people get sick and it's kind gross to show them. Yeah. But they have full full VR, full, like, you know, three screens. And it was fun. I was at Laguna Seca racing racing some Porsche Cup car, and it was it was fun putting up LATAM.
Speaker 1:The the I think it was on the on the simulator for, an hour. It just blew blew right by. It was great. Avi Shiffman chimed in. This is an interesting old quote from Steve Jobs.
Speaker 1:Steve said, there's no such thing as headphones for video. Steve Jobs would have turned 70 today, and I can't help but wonder what he'd think about the early steps for Apple Vision. Avi says Apple should have made something closer to big screen beyond tiny tiny little goggles. Just a more immersive content viewing experience that fits into the Apple ecosystem is enough. It didn't need apps and neither did the Watch.
Speaker 1:And that's a really, really good point. You just Yeah. Put it on and it's just whatever's on your phone is just boom right there. There are there are a couple companies that are not even doing VR. It's just basically a big TV screen and you and it has the form factor of, like, sunglasses.
Speaker 1:So if you're on a plane, you wanna watch a movie on a huge screen, just throw those on. There's a couple companies, but they're all, like, a little rough around the edges
Speaker 2:Yep.
Speaker 1:Soon. But just to put the weight in
Speaker 2:perspective crazy.
Speaker 1:Kyle Russell, my buddy, shares this. He says, even the tiny iPhone SE weighs more than the big screen beyond at 144 grams. Wow. Back in the day, do you remember those VR headsets that were like, you literally slot your phone, it was Google Cardboard. And so you'd slot your phone into a holder and then strap that
Speaker 2:to your Not your
Speaker 1:phone yet. Yeah. Yeah. And and there was another one, the Samsung VR something. You you needed a Samsung phone.
Speaker 1:You put that in there and then you just bought the lenses. And there was this idea that like your phone would be driving the VR experience. It never quite got there, but you can go even lighter if you're just purely focused on VR like big screen is. And then Kyle also shares a little meme from the big screen team Discord. Silence optics engineer, a physicist is talking because clearly, internally, they're always bumping up against the limits of physics.
Speaker 1:It's very difficult. That's the number one constraint for these companies.
Speaker 2:I can't believe how cool this thing looks. This is again this this is why we need new science fiction for the products from like forty years from now. Because this feels like a device out of snow crash
Speaker 1:or something. Yeah, we're gonna check the box and then we're gonna need to move on to the next big thing. But I'm excited for for VR to finally get here and I can't wait to get my hands on a big screen beyond two. We'll have to do an unboxing on
Speaker 2:the
Speaker 1:Well,
Speaker 2:if big screen wants their next million customers, what should they do?
Speaker 1:They gotta buy billboards.
Speaker 2:Immediately. Immediately. Immediately. Got to figure out how many billboards are on the one zero one.
Speaker 1:Small device Massive billboard.
Speaker 2:A power play
Speaker 1:Yeah.
Speaker 2:Is to just get every billboard.
Speaker 1:Get every billboard right around Cupertino. Really let Apple know, hey, we're putting the screws to you.
Speaker 2:We're home.
Speaker 1:This ours weighs nothing. Yours weighs more than a truck.
Speaker 2:You can't make even you can't make your your twenty ninth generation iPhone weigh your neck hurt? A brutal logging.
Speaker 1:A big screen beyond. I wanna see it on an AdQuick billboard. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only AdQuick combines technology, out of home expertise, and data to enable efficient seamless ad buying across the globe.
Speaker 1:Anyway, you see the tornado cache news? Tornado cache?
Speaker 2:Yeah. Is the
Speaker 1:story that's been developing for a while, and it's it feels like tracking, it's kinda hard because it's moving in slow motion. There's been little basically, just to set the level set on Tornado Cash. Tornado Cash was a, I believe, like, an Ethereum contract. It was just code. Yeah.
Speaker 1:But it would allow you to deposit deposit crypto. It would get basically, like, tumbled around with all the other mixed in with all the other tokens.
Speaker 2:And then jam it in the smart contract, turn the blender on.
Speaker 1:Yep. Turn the blender on. Then you can come back later and kind of sneak it out. No one knows who's taken what. It's like basically, like money laundering on the blockchain.
Speaker 1:But it was a big question because although it was used by criminals a lot Yeah. Is math a crime? Yeah. And a lot of the libertarians and a lot of the crypto folks were like, privacy is important. That's why we got into this whole game.
Speaker 1:What are you doing? The I believe the the founder was arrested and has a court case coming up. But the most recent news that just dropped today is that Tornado Cash has been removed from the OFAC sanctions list along with many other addresses. Shout out to Brian Armstrong in Coin Center for suing the government in court and winning for your human right to privacy. Beware many front ends to tornado are fake and scams and will empty your wallet.
Speaker 1:So Yeah. You know, maybe don't try and use this. But, from a libertarian poll political perspective, everyone's celebrating in that crowd.
Speaker 2:Seems like a win for human rights, and law enforcement will still be coming after the criminals that try to use tornado cash
Speaker 1:Totally. In many other ways. As they do with the, you know, Ross Ulbricht using Bitcoin. Yeah. The problem is that like, Tornado Cash was a lot harder
Speaker 2:to
Speaker 1:track than Bitcoin. So still are ways to.
Speaker 2:Little insight, so former teammate of mine and friend Dylan Abruscato is the founder of this online survivor style game called Crypto the Game. He ran, I think it was the first or season two Sure. Before they were acquired by Uniswap. The winner of the season won all this money from playing the game Yep. And then donated it to the legal defense for Tornado Cash.
Speaker 2:So Yeah. Huge support from the criminal just a very
Speaker 1:Yeah. I mean, Chao here at Psycho Sorts says the Tornado Cash founders are political prisoners. The case against them should be immediately dismissed. This is a couple months ago. And there's a little breakdown from one of the founders, Roman Storm.
Speaker 1:Great name. Tornado Storm. Wow. He says, my name is Roman Storm, and I am one of the founders of Tornado Cash, a non custodial privacy protocol. I am being prosecuted for writing open source code that enables private crypto transactions in a completely non custodial manner, meaning his company never takes ownership over your crypto.
Speaker 1:It's the opposite of a bank. It's not designed to be like Coinbase. It's merely a smart contract. This this prosecution represents a terrifying criminalization of privacy. The charges against me threatened to criminalize software development itself.
Speaker 1:If successful, the implications could extend far beyond the crypto industry impacting every software developer. I face up to forty five years in prison on charges including operating unlicensed money transmitting business, conspiracy to commit money money laundering and sanctions evasion. This case has already had a chilling effect on developers working on software tools. Recently, a developer filed a lawsuit against the DOJ seeking relief because my case has made them fearful of releasing new software. And so, this has been very, very controversial.
Speaker 1:Vitalik actually chimed in. No man left behind. Roman Storm and Alex Pertsev next. Tornado cash itself won an important case today, and the the whole crypto community is behind this. There is a flip side to this that we should talk about, which is that there the the allegations are that, you know, maybe this, like, this operation was profiting off of the money laundering in, a maybe more criminal way, and I think that's what they're alleging.
Speaker 1:But I
Speaker 2:This has always been the challenge with crypto where you have these sort of open source on chain protocols Yep. That in many ways can operate autonomously.
Speaker 1:Yep.
Speaker 2:Yet they have to they end up building sort of front end services
Speaker 1:Yep.
Speaker 2:That have to, that end up using like AWS.
Speaker 1:Yeah.
Speaker 2:There needs to be some company that sort of like puts a ramp card down. And probably not ramp in this case, but you know, has to put a card down or pay for these services. And so then you have to look at what is the company that is a US or some type of corporate entity that can pay USD for services. And then what is the protocol? And this is why in crypto they historically would have the sort of foundation that sort of manages the protocol.
Speaker 2:And then there's usually a C Corp that sort of engages with the foundation. Very, very complicated structures, which is why all the big crypto funds would have these pretty massive internal legal teams to help their portfolio companies think through this.
Speaker 1:Yeah. I think in general, I'm pro privacy, but anti money laundering. It's obviously very nice.
Speaker 2:But Zach commented on it apparently and says you can't go after the developers of code. What you actually need to do is go after the individual bad actors who are breaking the laws that exist.
Speaker 1:That makes sense. It's like, don't go after, you don't try and lock up Satoshi for creating Bitcoin, even if you could find him, you go after Russell Albrecht for creating the platform.
Speaker 2:So Vitalik, the creator of Ethereum said, No man left behind. Tornado Cash itself won an important case today and the founders are next. So yeah, interesting that just because Tornado Cash was able to sort of beat their case doesn't mean the founders fully out of the woods yet.
Speaker 1:I think the case is going to trial in April, so we'll have to track that.
Speaker 2:Crazy.
Speaker 1:But if you want to avoid money laundering at your company, if you want to avoid waste at your company, you should go to ramp.com. Time is money. Save both. Easy to use corporate cars, bill payments, accounting, and a whole lot more all in one place. Go to ramp.
Speaker 2:They got you can see on this image here, got a little picture of Report? Saquon.
Speaker 1:Oh, yeah.
Speaker 2:It says keep your team focused on the game, not expenses.
Speaker 1:I love it.
Speaker 2:We're gonna get Saquon on the show. Yeah. It's only a matter of time. Excited to have him on. He can teach us about football.
Speaker 1:And investing apparently because he's a fantastic investor. Yeah, yeah. He's in Ramp and Andoroll now.
Speaker 2:Yeah, he just got into Andoroll. He's good friends. Andoroll offices. Huge alpha just being a a pro athlete and getting into the non the typically non sexy categories. Totally.
Speaker 2:It's normal for an athlete to be like, you know, we we got an NBA player in like Rora.
Speaker 1:Yeah. Yeah. Yeah. I have protein powder,
Speaker 2:but it's
Speaker 1:very competitive.
Speaker 2:Yeah, the real alpha is saying, no, I'm gonna go, I'm gonna become an American dynamism investor.
Speaker 1:Fantastic. Well, speaking of guests, before we have Saquon on, we got a whole bunch of guests hopping on right now. Got Harry Stebbings coming on.
Speaker 2:The king of Europe. The king of Europe. The king of Europe, Harry Stebbings. Harry sent a nice note on the timeline
Speaker 1:He's been super supportive.
Speaker 2:It's interesting. I was DM ing him with with him a little bit and I'm sure he's gonna be in the waiting room any second, but on how he's he's in the waiting room?
Speaker 1:Yeah. He was saying he listens to the show and I think we finally made a show long enough for his marathon walks because the guy's putting up 40,000 steps a day. How many steps have you racked up today?
Speaker 6:50,000 now. So every night run for, like, two and a half hours and I listened to you on the walk.
Speaker 1:That's fantastic.
Speaker 2:We got it. So so just let us know when we need to go from three to four hours. Yeah. It's fun walking your your your steps.
Speaker 6:Honest honestly, I walk with my mother on the weekends. If we could do weekend editions also, it would save me having to talk for six hours with
Speaker 2:I love it. It's been it's it's awesome to see your relationship with with your mom. Sometimes makes me feel like a bad son because I don't walk for for that many hours with my mother. But I was just saying, you had a nice message yesterday on the timeline.
Speaker 1:No, thank you
Speaker 2:for this. It's interesting, you know, the shows that we really respect, all of them are highly ephemeral, right? Like they're shows that aren't really oriented around the news, they're oriented around individuals, people, companies, etcetera. And ours is the exact opposite, right? Like it would be kind of crazy to go back and listen Back catalog.
Speaker 1:It's kind of crazy.
Speaker 2:You know, sometimes we'll talk about a story that maybe is more evergreen, but you know, you've built up this sort of crazy catalog of some of the most amazing investors in venture ever. I wanted to have you on for a few reasons, really to give you an opportunity to talk about Project Europe. We joked on the show that until you guys came out with this new program, the Project Europe that most VCs thought about was planning their sort of trips to Saint Tropez over the summer. But you guys are taking it back.
Speaker 6:Do you know what? We're taking it back. We also have Portofino.
Speaker 1:Yeah. Know.
Speaker 6:I'm fundamentally the world has decided that Europe has, you know, lost innovation. We've lost entrepreneurs. Mhmm. And I meet great founders every day. And do know what they're told?
Speaker 6:You gotta move to the valley. And I'm like, you don't have to move to the valley. You can build a massive company here. And I think bluntly, we need to change the vibes. Vibes is everything.
Speaker 6:Elon, you like him or you don't. The guy knows how to master
Speaker 2:There is
Speaker 6:Now, we've told our young entrepreneurs that you should leave, that you should build a company elsewhere. There's a guy, Gary Stevenson, who is blowing up in The UK, who tells young people that bluntly, it's the system's fault, it's not your fault, and it, you know, there's nothing you can do about it. There is. I was Guys, ten years ago, I had no money. I was a kid in a bedroom.
Speaker 6:Today, we manage over $750,000,000. The show and the media companies, multi multi millions because of the internet. I'm not doing that as a me. The internet and the empowering nature of I I DM'd Mark Benioff fifty three times before he came on the show. I
Speaker 2:I've I've remind by the way, remind sometimes we'll message a friend about coming on the show and they like don't get back right away and I'm I'm like I gotta channel Harry. Yeah. For I just gotta hit him up again and and it's important to share those. A lot of people would just, you know, have the temptation to make it look easy Yeah. And say, oh yeah, I just messaged Mark Benioff and he just like popped on.
Speaker 2:It was easy. I mean But it's important to remind people that that persistence is what creates Totally.
Speaker 1:I mean, Logan Bartlett is the same way. I think he's I think he DM'd he he said he emailed SBF like 15 times to try and get him on the show. And I was like, I don't know how you could do that. It feels so awkward to me. But you've clearly broken it down and it's paid off massively.
Speaker 1:Dude, but
Speaker 6:you know what? You've got to get innovative. I use suno.ai Okay. To write songs about people, and then I send them to them. So I'm like, you know, write me a song asking John in a, like, male folk guitarist tone Very good.
Speaker 6:About, you know, the future of M and A. Then I'll send it
Speaker 7:to him.
Speaker 6:Promise you, you're the only one who's gonna do that.
Speaker 1:Yeah. Yeah. Yeah. Yeah. Yeah.
Speaker 1:And I it's so important in like fundraising, sales, and, you know, even growing a podcast. It's all the same thing.
Speaker 6:Oh my god. Totally the same thing. But but on Project Europe, yeah, it was like the doom loop just pervasive. And I have so many friends in The US who are just like, Europe, dude. Like, why are you still there?
Speaker 6:And it's just it's just not true.
Speaker 2:But the timing But but the timing seems incredible. You've been, you know, banging the the the the European drum for a while now, but it does seem like even in the last month almost, there's been this sort of shift and that's sort of potentially coming from this, you know, The US is getting into trade wars with our neighbors or some of our closest allies. This is sort of like nationalism happening around Western Europe kind of waking up. Know, people are are there there's more, you know, the people are talking about what is gonna be the under role of of Europe. You know, I'm sure you're looking at some of these companies, but the timing seemed great.
Speaker 2:Do
Speaker 6:we need I think we're going through this intense period of deglobalization. And what happens in intense periods of deglobalization is intense patriotism. And I think we're at the start of that now where absolutely we're starting to see Europe once again get a little bit more patriotic. You say it's funny you said there about like the Anjuril of Europe. It's Helsing.
Speaker 6:My favorite thing is when you see defense funds and you're like, no, no. I didn't don't quite know if defense is quite the category. It's more like Anjuril and Helsing. Sure. Yeah.
Speaker 2:Very cool. Do you I'm curious. You you run your fund. You run the the media business. Do you LP into other European funds?
Speaker 2:Are you trying to kind of create a sort of like I'm at one of the Carrezzo. A Carrezzo. No. But one of the things here in America is great if if I've got a buddy who's raising a pre seed round. I talk to them, I'm like, okay, I know 30 people that could lead this pre seed round.
Speaker 2:Like, don't worry if any one person says no. You're gonna get a Just talk to a bunch of people. But I imagine when there's probably not 30 London pre seed funds that you kind of at the moment, but maybe there should be or maybe there are.
Speaker 6:I I I mean, I don't actually LP really into other funds just because with the network from the show, if I LPed into one, I'd have to LP into all of them. So I find it easier to say just like, I'm sorry. I can't do LP checks. Otherwise, you end up being Marc Andreessen. Well, I I don't know a fund that Marc Andreessen is not in.
Speaker 6:I've been paid Yeah. Many funds where Marc is an investor. And so and listen. He has more money than me and can afford to do that. I couldn't do a hundred funds.
Speaker 1:Can you tell us
Speaker 2:a little
Speaker 1:bit about, the the patriotism in Europe? Is there are there layers to this where, you know, a Spanish company will only wanna raise from Spanish investors and say, hey. Get this British guy out of here, or is is Europe kind of, solidified in the same way that The United States is kind of a block even though, obviously, there's a difference between Florida and New York and California?
Speaker 6:I would say that Europe has solidified completely. There's definitely not this kind of isolationist element of, like, oh, Spanish versus Italian versus whatever. And Jesus, even the English and the French are getting on these days. That goes to show just how much of a united front it is. And I think especially in the wake of, you know, the divide that's growing between The US and Europe, that becomes ever stronger, that unified country element of Europe.
Speaker 6:And so I I don't see that at all, and Europe really as a block. And I think you see that in how people have responded to Project Europe. And we've had, you know, thousands of applications. I started with 25 founders that I was like, hey. I'll go get 25 founders that are amazing, And they will, you know, write a check into this vehicle to back next generation.
Speaker 6:Mhmm. We literally went to a 50 in three days. Wow. We've had another three to 400 requests to be in. There's a legal cap of $2.50.
Speaker 6:We can't actually do it. Wow.
Speaker 2:Capped. It was amazing. Talk about when when you you were an early investor in Lovable. They've seen ridiculous growth. It's one of those charts that's not really, you know, a line.
Speaker 2:It's more like a wall.
Speaker 1:Yeah.
Speaker 2:Was that talk about that round, how that came together. Are you getting these companies, like, weeks earlier than American, you know, investors that would that would want a shot at it? Is it is it months? You know, talk about your edge in Europe on the ground.
Speaker 6:Yeah. Yeah. A %. Lovable is a great example of a global company that's being built from Europe and Sweden in particular. Their numbers are insane.
Speaker 6:They're growing, you know, 2.3 to 2,500,000 ARR per week. Their retention is better than chat GPs at over 85%. I mean Wow. It is a monster, and their retention is really important. It is not sugar high AI revenues.
Speaker 6:And so phenomenally impressive. Listen, Anton is quite obviously brilliant. I think we overexaggerate how difficult our role is as venture investors. Our role is to invest in the 1%. And generally, the 1% I find is quite obvious.
Speaker 6:So when I met him, it was pretty apparent that he was bluntly creating an entirely new category. I've learned one thing in investing that when you're able to make your customer a superhero, it generally works very well. Nike is a good example. Everyone's an athlete. That message is empowering.
Speaker 6:Shopify, everyone's an entrepreneur. And Lovable allows anyone to build a website. My mother who has a bakery uses Lovable to make her bakery website.
Speaker 4:That
Speaker 2:is I I love your commentary on just the website market in in general. The sort of, you know, you've got the framers, the web flows, you know, all these different platforms. It's felt over the last few years.
Speaker 1:Sparespace.
Speaker 2:It's felt over the last few years if you just waited for, you know, web flow to kind of become four years old, then you could create the framers and then you could do the lovable
Speaker 1:feels like the unending gold mine, honestly.
Speaker 6:And it seems like You've got couple of different segments here that I don't think people are really talking about enough, which is like you've got the number ones, which is P owned larger, older players. Mhmm. Now, they are in a lot of trouble. They've lost innovation. They've lost product centricity.
Speaker 6:They're in a real world of pain. I'm really looking at a lot of the PE board assets, your Anaplans, your Coopers of the world, thinking, wow. You were bored at the height of the market. You don't have the founders, the CEO. You've lost product centricity.
Speaker 6:This is gonna be a really tough slog to get back to that acquisition price, and they know that. And then the second that no one's talking about either is this really worrying segment. It's almost what I'm most worried for. 50,000,000 to 200,000,000 ARR SaaS businesses that are growing in the teens and they're not profitable yet or they're barely profitable. They are not acquisition targets for PE.
Speaker 6:Those are not good enough numbers. Not good enough to IPO. What happens in that case? And there's a lot of these companies. That is a really dangerous chasm to fall down that I don't think many people are talking about.
Speaker 1:What about just the broader market? We're seeing a pretty significant sell off in The US. Is Europe seeing something similar? I haven't been tracking it very closely.
Speaker 6:When say sell off, what do
Speaker 2:you mean? Yeah. Think he's talking public equities. But I mean, in your position, do you you as an, you know, a venture investor, probably don't care. But I even talk about maybe just like pricing in the early stage market, which is probably what you're more more clued into.
Speaker 6:I mean, there there's there's so many things here. I I think one thing that no one's doing I'm so shocked about it. It's, like, bluntly how LPs are responding to a lot of the endowment policy changes enacted by a a Trump administration. I mean, like, this is a very, very difficult position for a lot of endowment funds to be in. They're forced to rethink a lot of their private allocations, and that will significantly impact managers' abilities to raise funds this year.
Speaker 1:Can you go back and explain exactly what the change is?
Speaker 6:Well, I so you're seeing essentially the Trump administration reduce a lot of the budgets that they're able to have to their privates. And so you're seeing that reflected in how they're engaging with new managers. When I speak to a lot of endowments today, they're simply not adding new managers, and they're even trimming their existing. And so I think that's bluntly going to really impact the amount of new managers that we see this year. In terms of pricing, honestly, it's it's higher than it's ever been
Speaker 1:Yeah.
Speaker 6:For the clearly great assets. And there's a lot of people who come and say, oh, so unfair. It's so unfair. I understand that for a lot of the market, you're not coming out of Stripe or Facebook or you name it. But if you are, you have more money than ever before and the prices are honestly higher than ever before.
Speaker 6:Prices absolutely nuts today. And so you either have to be if you wanna win in Vantage State, you have to do one of two things. I believe I'm a better picker than anyone else and can find diamonds in the rough. Or I believe that I am such attractive capital that I can win a beauty contest and still pay a very high price but beat everyone else.
Speaker 2:Yeah. Do it all at the same time. No. I think that was it. It's funny that like any investor who's claiming, you know, complaining about high prices is just like just price every investment perfectly and never miss.
Speaker 2:You know, put up a great fund.
Speaker 6:But by the way, entry price really matters. When you look at Wizz and Insight, it's something very Yeah. Timely. You know, their entry price was very high, and so people are really shitting on it as an investment saying like, oh, it only returned a third or a quarter of that fund. It's not.
Speaker 6:It's just that the entry price was so high. Well, talk
Speaker 2:about that. I'm curious. Do you do you know any dynamics? Because I was wondering, imagine you're the the partner who leads, you know, a $200,000,000 investment turns it into 2 and a half billion. And then you're kind of waiting around for your other partners saying like, cut my, I kind of did the heavy lifting here, I need you guys there because they're not in carry yet.
Speaker 2:Is there a scenario where that partner doesn't really see much of a personal benefit from having, you know, returning $2,000,000,000?
Speaker 6:I mean, let's just say, I think they'll be getting a pretty big bonus at the end
Speaker 2:of the Yeah.
Speaker 6:So I'm not too worried about them. Okay. But but I mean, it is just testament to the like fun size matters.
Speaker 4:Yeah. The scale.
Speaker 1:Yep. Scale is massive. It's never been bigger.
Speaker 2:Yep. Yeah. It continues on Alright Harry. There's a lot more to talk about.
Speaker 1:Yeah. We're have
Speaker 2:you on again. Go enjoy dinner. Thanks for coming on late. Yeah. Appreciate you coming
Speaker 1:on late. We really appreciate it.
Speaker 2:It's fantastic to have you and we'll talk
Speaker 6:again you you are fantastic company on the walk. Always let me know what I can do and huge love, guys.
Speaker 2:Fantastic. Thanks so much. Talk to you soon. Enjoy your evening. Cheers.
Speaker 2:Bye. Yeah. I was coordinating timing with him and being in London.
Speaker 1:Well, he seems like he got to a great podcasting studio.
Speaker 2:Mean He's locked in.
Speaker 1:He's locked in.
Speaker 2:He's locked in.
Speaker 1:He'll love it.
Speaker 2:Over time over time, we're gonna get the Delians like a permanent sort of like hub in the office. Just say, come flip on the lights. You'll be live. Yeah. Yeah.
Speaker 2:Yeah.
Speaker 1:We'll we'll we'll set it up. The the remote studio. I mean, that's what the the the big TV channels do. It's like, oh, if you're doing a spot on, you know, NBC, go to the local NBC affiliate in your town, and we'll have a green screen and a great microphone and a and a teleprompter for you, and you and you'll look great if you can stop by. Anyway, we got Adam coming on the show in a couple minutes.
Speaker 1:Give me some background on Adam. How'd you meet him and what does he do?
Speaker 2:The godfather of media, Adam Ryan. That is a bold intro. So Adam Ryan's a very good friend. I was actually on the board of his company through the series a. And he prior to that was at the hustle.
Speaker 2:He like ran sales there eventually was the I think the president and the COO under Sam Par. He also was at Under Armour when they acquired My Fitness Pal. So he's just been kind of like right in the, he also was at Spiceworks as well. So he's always been at kind of the intersection of like software and business media and And so he can talk a little bit about Workweek. And then I wanted to get him on to talk about the TechCrunch acquisition that happened today, which there's a lot of turmoil
Speaker 1:on Has the number actually leaked or is information?
Speaker 2:It's private information. But we got them ready.
Speaker 1:But should we be ringing the sign sign
Speaker 2:or not? There is.
Speaker 1:That's what we'll ask Adam. Adam, we heard TechCrunch was bought. We have this beautiful we have this beautiful gong right here. Should we ring it or not?
Speaker 3:I think this is like a Portnoy champagne bottle situation. It's time to ring
Speaker 1:it. Okay.
Speaker 2:We'll hit it. We'll hit it. Thank you. But great great to see you, Adam. I just wanna say you always thought that I would be good at podcasting and always believed in me.
Speaker 2:So, you know, thank you for that. You were the first person to say
Speaker 1:You you have Facebook podcast. You need
Speaker 2:to be podcasting. So but it's great. I I gave a quick intro earlier, but it'd be great to have it in your words, and then I wanna kinda get into the news.
Speaker 3:Jordy, I think I, sent you a contract, wants to become a podcaster. We can talk about, we can talk about that. But, yeah, it's a big fan of the show, guys. It's been been amazing. And I've never seen Jordy just, in his natural element of, getting to shoot this shit all day.
Speaker 3:It's a it's a perfect it's a perfect job.
Speaker 2:It's fantastic. Yeah. This is
Speaker 3:So Workweek is, imagine if LinkedIn, was only for people that were verifiably in your profession. So think about, if you're in e com or on a hospital system or HR, you have a platform, social media platform that's built just for you. Conversations there are authentic, around your lingo. You get it similar to what this podcast is all about, actually. I think this is why we all like it, as founders, as you guys talk like us, you think like us, you bring that out, and we've built that, in a social media platform.
Speaker 3:So that's largely what we do. I think one of the, areas that we've focused on is, like, if I wanted to go launch an HR, social media platform, I would never have a shot to do it. HR people would not listen to me. And so our go to market is to partner with operators, practitioners in these industries, and have them create newsletters and podcasts, that then help us build an audience to to drive to these these memberships in the future. So, that's that's most of what what we're up to nowadays.
Speaker 3:And, previously, as as Jordy said, The Hustle, MyFitnessPal, and and Spiceworks kind of at various different points of of media.
Speaker 2:Cool. Amazing. Let's jump right into, into TC. You know, we've talked about this on the on the show before. They were owned by what was it?
Speaker 2:AOL, Apollo, the private equity fund bought AOL. It it seems like at some point, there would be an incentive to sort of dismantle AOL, the underlying assets, and I imagine that Apollo doesn't want to just hold that position forever. Maybe just talk about kind of the history of maybe why you think TechCrunch has really just struggled. I think it was owned by Verizon.
Speaker 1:I'll give you some background. So founded in 02/2005 by Michael Arrington, Parker Partners of Archimedes Ventures. Eventually, they went under the Yahoo umbrella after its former parent AOL and Yahoo were acquired by Verizon, so it became a Verizon company. And then Verizon sold to Apollo, so it's been private equity backed since 2021. And now it has been sold to Regent, a media investment firm.
Speaker 3:Yeah. It's it it's the property. It's like the hot potato that no one wants. Right? It's just been sold and sold and sold.
Speaker 3:But I I mean, I think the the the through line is, looking if you look at their search interest on Google Trends, they peaked. Any any guess what year they peaked of search interest?
Speaker 2:Twenty twelve.
Speaker 3:Twenty '11. Good guess, Eleven. Wow. 2011 was the peak of their search history. Today, their search history is essentially the equivalent of what they had in February.
Speaker 3:Wow. And it's just been a depreciating distressed asset for twelve years, and that's why it keeps getting tossed around. And, you know, I actually think it's the they're an interesting one to study, though, because, like, what why were they so good? And they were so good because they figured out one move that was just awesome, which was building relationships with VCs in Silicon Valley, breaking the news, having mom be proud, creating the cycle Yep. Keep going.
Speaker 2:The mom be proud engine.
Speaker 1:It really is true. When you start a company, it's so fake for so long. Even if you go to your parents and you say, hey, I got $2,000,000 from Andreessen Horowitz. They're like, who? That's not Bank of America.
Speaker 2:And at some point some point you
Speaker 1:the you get the TechCrunch article and you can send it to your family and be like, hey, I'm in business. I'm a real person.
Speaker 2:Yeah. At some point, I I had one funny TechCrunch story. So we announced our seed round from Andreessen, and we simultaneously launched our pre seed. It was this awesome moment. We had been in the timeline a lot.
Speaker 2:And TechCrunch agreed to cover the story. They didn't tell us when they would release it. They didn't even tell us they were for sure gonna cover it until like a couple days before. And then when they did release it, they refused to use our product imagery or any assets that we created and they used a stock image of a birthday cake. And we were just like, hey, like, we're really excited about the article and like, we wanna share it broadly, but like, this is not on, you know, not on brand for us and like feels kind of random.
Speaker 2:And they like fired back and they were like, you're not, you don't, you're not a writer here, don't. And it was like very hostile and it left this like terrible taste in my mouth and I was like, okay, I'm never talking to TechCrunch again. And I think a lot of founders have had that sort of frustration where it's like, hey, we still love the TechCrunch brand, because like for me, I grew up reading it. I remember just as a kid going to the homepage and being so excited, and I think it has like a ton of potential as being a place to inspire entrepreneurship, but the fall off is potentially that, and this is like the entire work week thesis is that business people, whether you're an investor, founder, etcetera, want to like learn from other business people. And so at some point along the road after Michael Arrington, I think was out of the picture
Speaker 1:Yeah.
Speaker 2:And he was private equity owned, they maybe stopped hiring sort of founders or people that just deeply loved
Speaker 1:Yeah.
Speaker 2:You know, venture. And it sort of coincided with this explosion of just like content creators broadly within venture capital that, know, Packy would start breaking Totally. Know, fundraising news. And you knew if you work with Packy, he was gonna you know, publish it on the day that he said he was. He was gonna make you look good.
Speaker 1:And actually deep dive it. In a much deeper level than you would ever see on TechCrunch. Right. Yeah.
Speaker 3:And I I I think the other piece of that like, two things they I think they really screwed up. Like, one, when you build the your actual best product, which was their, like, fundraising breaking news around the relationships with the investors, you can't write anything that's actually, like, deeply critical even in the future. And what they did was they got stuck in middleman land of, like you can have, like, the Axios, Sarah Fisher's of the world, Pakis that are like, hey. I'm here to, like, tell a good story, a real story, but, like, to support you. Or, like, hard hitting journalism, like, I'm gonna, like, go say the thing that no one wants to say aloud.
Speaker 3:Like this
Speaker 1:swear in middle. He broke Theranos. Like Right. He's a serious investigative journalist in the business world.
Speaker 3:If they said to do both, and you just can't win in the middle. Like and I think Very hard. With today, like, either your editorial and your audience, like, it can't be rounded anymore. It has to be pointed. Totally.
Speaker 3:And, like, you have to be like, this is what we stand for. This is what we do. This is who we support. If you're, like, anywhere in the middle, you're just gonna get forgotten, and I think they they lost that, like, ten plus years ago.
Speaker 1:Yeah. I mean, looking at their X account, they have 10,000,000 followers on X, and their announcement
Speaker 3:50 likes.
Speaker 1:19 likes on their announcement that they have been sold, which is like big news in their own world. And it's just so rough.
Speaker 2:Yeah. It's interesting. You know, we had heard months ago that it was for sale and was trying to find a buyer. And I do think the actual purchase price came in a lot lower than than what what they had hoped. But but what I can imagine happens now is whoever this guy, I don't know the guy who bought it, but I imagine he basically fires everyone because I can't imagine that that
Speaker 3:He's he's he's not going to. So Regions is a private equity firm that owns a bunch of logos that fifteen years ago were cool. And his playbook is and TechCrunch put this in their own press release. You know, they're they I think their genius line was like, this is this is a software update, not a system restart. But he said he's not firing anyone, but he owns a bunch of different logos and publications that are typically distressed assets.
Speaker 3:And I kind of see it as, like, they're they're hoping he his playbook is, like, I own 50 of these. If I can make a few of them a little bit better, flip them in five years. And so I don't think they're actually gonna probably fire a ton of people, unfortunately. I think it's actually gonna continue the path of not being relevant or good, because they're gonna not lose money. And I think they need a whole restart to do that.
Speaker 1:Let me give a little overview of who they own at Regent, Computer World, Network World, CIO Magazine, CSO Magazine, Macworld, PC World, IT World, Rate My Professors, Cheddar News, Military Times, Defense News, Marine Times, Army Times, Navy Times, Air Force Times. So a lot of, like, these hyper verticalized small trade publications they've put together. And then they own some stuff in fashion as well and then industrial and consumer products as well. But, and it and it says that they were in supercuts for a while, and then they exited. It was very funny.
Speaker 3:I saw I saw that too. That was a fun one. Was like, actually, I'd like to hear that story.
Speaker 1:But Yeah.
Speaker 3:I mean, the, I think, you know, when when was the last time you heard a founder now say like, I can't wait for TechCrunch to, like, break my story. And I think that's like Yeah. The core of what's going on and because
Speaker 2:founders would still want them to break the story, but it's hard to get them to respond even if you have something that's somewhat newsworthy. What else is going on in media today that you you find interesting? I know you wrote earlier this week about the skims, which was like a hustle era, super hot, you know, newsletter that that sold. How how did that go? Is there any takeaways from it?
Speaker 3:Yeah. They, you know, they were started 2014. Oprah said she loved it. Reese Witherspoon, Chelsea Handler kind of, like, went on this, raised, like, 25,000,000 from twenty first Century Fox, bunch bunch of good companies. Also hit their search interest peak in 2016.
Speaker 3:So, I think with them, they had a great business. They were probably seven years too late. I think that's a founder not founders not selling at the right time than, like, being bad builders and their time had passed. But, I don't think they crossed the press stack. So, you know, twelve plus years down the drain for them, and pretty sad considering one time they were they were a household name among among, like, millennial women, for a few short years.
Speaker 3:But, yeah, that happened this week, and I think that's what we're seeing. It's, like, it's the onslaught of, like, if you're not loved, you're out. And none of these people that are getting sold today, like, have people that are truly, like, logging every day and and loving what they're seeing.
Speaker 1:Yeah. I mean, last question, then we'll let you go. What do you think the founders of the skim should have done differently? It was is there a path where this could have been a great cash flow engine if they'd not raised and kind of run it more as just making them influencers? Could they have been the next, you know, caller daddy or something if they played that differently?
Speaker 1:What do you think?
Speaker 3:I do think they were more of a faceless institution than they probably got credit for, which is
Speaker 1:Sure.
Speaker 3:Kind of against my belief of what you have to be today. I think you have to have individuals at the forefront.
Speaker 1:Yep.
Speaker 3:But also, my interesting analysis there, from 2014, their press release was, like, our advantage is that we're low tech. In 2018, when they announced our series b, they said at the heart of what we do is technology.
Speaker 2:Yeah.
Speaker 3:And I think there's, like it's okay today to just admit who you are Sure. And what you do. And they tried to be something they're not, which is a technology company. I think they wasted tons of capital trying to do shit that they have no idea how to do, and they should have just kept with building content for women their age and building creating for themselves, and they would have been just fine.
Speaker 1:Yeah. That makes a ton of sense.
Speaker 2:Did you follow anything last question on my side for now, and would love to just have you back on when there's when there's media, you know, headlines. The did you follow so Caller Daddy, like, you know, had all this big big issues with Barstool because they just weren't really getting a good deal. Mhmm. Alex Cooper eventually leaves, starts her own network, does very well, but then creates this sort of new superstar in Alex Earl. And then Alex Earl, like, announced this quarter that that she's leaving.
Speaker 2:Do you think it's possible to build networks anymore long term, or with these sort of like, you know, scaled networks, you eventually just lose, you know, your your best talent. How does that work?
Speaker 3:I I think it depend I mean, the Alex Earl one's interesting. I was confused because she was already a superstar. I mean, she was like, she was already making, like, a few million a year, pre Alex Cooper. I think, what the net what the best networks do, I think, is find emerging talent, early, early, like, in pre seed stage essentially as, like, a content creator. And, to keep them and I think there's been plenty of good examples.
Speaker 3:I mean, everyone talks about Barstel leaving, but, like, Big Cat, PFT, and all those guys are still there Mhmm. And drive most of their revenue actually and always have. And so what what happened, how they do that, they get paid a lot of money, and, they feel like they're treated fair. And I think that's, like, at the core. Not everyone wants to do everything, and I think when you're when you're building out those networks, the only way to keep talent is, I think, to talk to the talent and be like, what what kind of life do you want?
Speaker 3:What what kind of pay do you want? And you've gotta build for that. And I think if you look at TV, they actually this is what people should take away is, like, Stephen a Smith just got a fucking whopper of a deal. They kept him, but he they, like, knew what he needed. He wanted to be the high he wanted to get the highest contract.
Speaker 3:TV's done this really well for a long time. Friends cast giving them their new contracts to keep them together. Those are all innovative contracts to keep talent. I think to do to to sustain, you have to kind of take that same approach.
Speaker 1:That makes a ton of sense. Well, thanks for stopping by. We'll talk
Speaker 2:to soon.
Speaker 3:Adam. See you later.
Speaker 2:Talk soon. Bye.
Speaker 1:Very interesting. Nice. Who we got next coming in?
Speaker 2:Adam's always he's never he's never pulled punches in his writing. He's got a great newsletter where he just kind of says it how it is in media. Yeah. Because he's been in the trenches. Right?
Speaker 2:He built a million subscriber list while at the hustle and it's certainly not easy. We got Blake Anderson coming in from the cage live from New York City where he's been in an apartment for thirty three days How
Speaker 1:you doing Blake?
Speaker 7:Can you guys hear me?
Speaker 1:We can.
Speaker 2:Yes.
Speaker 1:Welcome to the show.
Speaker 7:And they can hear me, but I cannot hear them.
Speaker 1:Okay.
Speaker 7:Try it again. Check. Check. Y'all say something?
Speaker 2:Check. Check.
Speaker 1:Check. Check public.cominvesting for those who take me seriously. Multi asset investing Got
Speaker 2:any idea.
Speaker 1:Builds, funded by millions.
Speaker 8:Yeah. Like, can you play music, and do you
Speaker 2:hear it in your pods? Yeah.
Speaker 1:We got stocks, bonds, treasuries, options. Can you hear that?
Speaker 2:Yeah. Speaker two:
Speaker 1:What about Eight Sleep? I know you guys are sleeping on Eight Sleeps out there. Nights that
Speaker 4:fuel your I can hear now.
Speaker 7:How do I sound?
Speaker 1:Bed No. It's my Your ultimate sleeping experience. Go to 8Sleep.com/TBPN. Can you hear that, Blake?
Speaker 7:Yes. I can. Okay. Cool.
Speaker 1:What about getbezel.com? Can you hear can you hear that?
Speaker 2:I can hear that. Blake's a watch Blake's a watch guy.
Speaker 1:Ramp.org. You you I was about
Speaker 7:to ask about Ramp. Could you tell me about them?
Speaker 1:Yeah. Ramp. I mean, time is money, so say both. Getbezel.com. You can hear that?
Speaker 1:Okay. Good.
Speaker 2:About Are we good? I think I think we're in a good spot. Blake. Blake. Fire.
Speaker 4:Happy place.
Speaker 2:Okay. Okay. Blake, it's great to have you on the show. It's a big day today. Thank you for taking the time.
Speaker 2:You haven't been think everybody here is very familiar with you just from PMF or Die and everything. You haven't left the cage for thirty three days. Today, you're launching the app, and maybe you start to get a sense that Freedom might be on the horizon. Freedom might be
Speaker 1:on the horizon.
Speaker 2:But, yeah, talk to us. How are you feeling?
Speaker 7:You know, I'm, I'm feeling very stressed out. I'm, I feel like I have this pit in my stomach that is not going away for anything, and I think that the only way that I can release that is achieving PMF. Mhmm. And if I do not achieve PMF, I think I'll be in a very dire spot. You know?
Speaker 2:Yeah. Yeah. Gonna have we're gonna have the the audience will get to to vote on the sort of fantasy football style punishment. Like you might have to be pink pink hair or something like that. Yeah.
Speaker 2:No, but we we're believers. Why don't you break down 10x in your words, maybe just start with kind of the the manifesto. It feels like the the app is, you know, extremely timely with everybody sort of realizing that one of the biggest opportunities with AI today is giving everybody, you know, a tutor. But, yeah, tell us about 10x in your words.
Speaker 7:Yeah. I think that the power of AI education cannot be understated. Everything that I've built has been on the backbone of AI. And yet at the same time, I have so many friends that constantly ask me how they can use AI to learn more efficiently, to learn how to code, to learn how to market, to learn how to do anything, any digital skill. And I don't think that there exists a platform that's kind of synonymous with AI based learning.
Speaker 7:And this was the general background thesis on building 10x. And next came, the medium. Right? What what is the form factor? And so the original form factor with how we are launching and, the version that's going on the App Store this evening, is a Duolingo style learning path where you can select your skill and progress through the foundational knowledge needed to learn how to code with AI, market with AI, you know, build a business with AI.
Speaker 7:And so that is one key function of the application. Additionally, we have the ability to custom generate lessons. So you can generate a fifteen minute podcast on anything that you want to learn about. I find myself going down these, like, interesting podcast rabbit holes on Spotify. Mhmm.
Speaker 7:And what I found is that, once you get past the very base layer of any sort of any sort of domain, it could be machine learning, it could be complex systems, it could be American history, it's very difficult to find the sort of custom tailored information to to progressing to that next step, and TEDx provides that for people. Additionally, you can track your skill progression over time as well as chat with a ChatGPT, Grok like, basic chatbot within the application.
Speaker 2:Very cool. I saw a post earlier today from this guy, Chris Pike, who's at over at Pace. He says, when elite universities uploaded all of their courses online for public consumption, we collectively realized that the limiting, factor for global intelligence is not access to information, it's motivation. What's your read on on how motivated is the sort of next generation of builders who the the 10 the initial 10x app is like, how do you make somebody how do you turn somebody into a developer, right, who right now maybe knows nothing? Do you feel like there's like like just a ridiculous amount of sort of motivation that doesn't necessarily have, like, a a pathway yet?
Speaker 2:Do you see that 10 x is like, hey. Here's how you go from zero to builder.
Speaker 7:Yeah. So one of the most popular questions that I get on social media is how can I learn to use AI? How can I learn to code nowadays? And there doesn't seem to be any resources that are really constantly up to date with the newest and best techniques. In addition, if we look at what Duolingo has done for language learning, the big thing that they've done is they've they've gamified it.
Speaker 7:They've made it fun. And I think that that's in line with your point, regarding motivation. And so right now with 10 x, it is significantly more enjoyable to learn through 10 x than through a basic, standard chatbot, though, obviously, we have the chatbot embedded within. But going forward, one of my primary North Star metrics is how much dopamine do you feel rushing into your brain when you hear those little sounds and get that XP and see yourself level up.
Speaker 2:Do you have do you have haptics yet? Or you got you got the phones vibrating, or is that rolling out soon?
Speaker 7:Yeah. We we've got we've got haptics, but, you know, I don't you know, hap haptics are are are just just a small step in a very big mountain, in competing with, Instagram and TikTok. Because, you know, my view for the 10 x mobile application is that it might not be the platform that you sit down on and use for three hours straight, but it certainly can fill the latent space in your day instead of Instagram and actually put it towards something productive.
Speaker 2:Yeah. Talk about this Talk about the concept of, like, character building and and sort of leveling up your character because a big part of 10 x is like, okay. I'm a character. I'm Jordy. I can go on 10x and like level up my character to learn how to code, that's awesome.
Speaker 2:Was there a specific video game or anything that inspired you as a kid that you were super into like that you got maybe way too into? Was it, I think World of Warcraft was probably No.
Speaker 1:Well, yeah. Way before your
Speaker 2:time. Yeah. Was there any
Speaker 7:specific So I would say Skyrim was a big one. So Yeah. Not to be confused with World of Warcraft. I think a big difference in terms of the type of person that played the next two games. Now that that said no.
Speaker 7:I I I think that, games where you can, see your skill and and level progression over time are just inherently so much more addicting. Skyrim, Madden, FIFA, even Minecraft, and a bunch of these different mods that I would use when I played as a kid. And that was essentially the thesis behind UMAX and what made it go so viral is the ability to scan your face and get this sort of, like, six factor rating system about, like, your skin quality and your jawline and, like, your overall attractiveness and potential. And so in its current form, it's just XP based. But moving forward, I think that really interesting thing that we can implement is the ability to take these sort of preliminary challenges and quizzes to assess your current skill position and then make this into more than just a system to come and learn statically and linearly, but something that could dynamically update based on where you're at, where you're progressing, and then become somewhat of a status symbol.
Speaker 7:Right? Right now, we all know the term 10 x engineer. You know? I want I want a nine a level 99 in 10 x to be to be a hallmark of of somebody who who has agency in this post AI world.
Speaker 2:Love it. Talk about your go to market. I know you this is historically how you've grown your apps is sort of leveraging these sort of short form video platforms. You're taking all that learning and and, you know, channeling it into 10x's GTM. Are you doing anything different this time or is it the same playbook that you've sort of happily shared with the world?
Speaker 2:Because it's it's easy to talk about. It's hard to actually do.
Speaker 7:Yeah. So, you know, I think that 10x is inherently less viral than the previous products that I've built. Now that said, has so much more long term upside. And so if I were launching a Riz GPT right now, it'd be like, done. Wraps.
Speaker 7:I'd be I'd have completed it. I'd be at a million ARR. But, I'm trying to build a big business here, and I really believe in the long term mission. Now that said, I think that I'm taking a lot of the learnings that I've had from my previous applications and figuring out how to to make something that isn't inherently as viral or maybe, like, you know, scandalous into something that that people really resonate with and still can go viral on organic platforms. And so, you know, I think that one of the big marketing messages that we have is you won't be replaced by AI.
Speaker 7:You'll be replaced by somebody using AI. Learn to use AI. Now that's inherently a little bit scary and, like, digs into insecurity, and I think that that'll be that'll be conducive to to to, you know, engagement on on these social platforms. We're split testing a ton of different niches. We're working with self improvement creators, with AI and tech creators.
Speaker 7:We're working with OnlyFans creators. And so we've got the we've got the whole roster.
Speaker 2:What you're saying before that somebody logs on to OnlyFans for whatever reason. And then it's like, hey. Why don't you learn how to code?
Speaker 1:Go ahead.
Speaker 2:Go ahead. When are you when are you I know you're you're launching today. I got the preorder page pulled up. When do you
Speaker 1:think when do think you're when do you
Speaker 2:think you're going live? Because I know you probably still have some stuff to do there.
Speaker 7:No. We're going live immediately after this call.
Speaker 2:Amazing. Okay. Everybody listening. Blake really wants to see the sunlight. He wants to surf.
Speaker 2:He wants to go hiking. Go download the app.
Speaker 7:I just changed my bio real quick to Cool. My my x bio, which used to be MJ of AI apps, and then everything's there. It's now I haven't left my apartment for thirty three days. Please download so I can surf and hike.
Speaker 1:I love it.
Speaker 2:Alright. Putting it I'm putting it in the chat right now. You're the man, Blake. Good luck today. We will we'll talk to you later.
Speaker 2:I'm excited to see I I see Sam Sheffer in the background there. He's collecting all this footage. I can't wait to see the
Speaker 1:The documentary.
Speaker 2:The documentary on it. It's gonna be amazing. So good. Hell yeah. Godspeed today.
Speaker 7:Thanks for having me, guys. Speak to
Speaker 2:you, Cheers. Bye.
Speaker 1:What a hilarious project. So chaotic. Thirty three days without going outside.
Speaker 2:I mean, they do have the roof deck.
Speaker 1:I know you haven't seen the Shawshank Redemption, but when he gets out of prison and he's just being like
Speaker 2:They do have a little sunlight.
Speaker 1:It's beautiful. Yeah. I guess he can go outside.
Speaker 2:There's somebody in the chat says, if he fails, he has to this is Rusty Yeah. Pitchfork. If he fails, he has to buy a Dodge Charger EV and use it as his daily driver.
Speaker 1:There you go. It's weird. Brutal. So much fun. Well, should we go to one more story?
Speaker 1:Because we have Sean Maguire joining in fifteen minutes, but I think we got enough time to break down the billionaire who just bought the Celtics. He doesn't have a Wikipedia page. No one knows about this guy. Sean Puri said the Celtics just sold for $6,000,000,000 to a guy with no Wikipedia page. Money talks, wealth whispers.
Speaker 1:Send tweet. I love Sean. It does crazy numbers. It does crazy numbers for
Speaker 2:I love when you I love when you can drop something that's Yeah. When you can drop something that's just like Yeah. Very niche Yeah. Like only for your fellow posters. Yeah.
Speaker 2:It's just great.
Speaker 1:It's also great because like Sean's been on the show. You know, obviously, we're notorious yappers and, basically the opposite of whispering. But, we love wealth, so we'll break it down. William Chisholm was a complete unknown to sports fans and most private equity investors until earlier this week. He just bought the Boston Celtics for 6,100,000,000.0.
Speaker 1:By the time they're ready to spend their billions, most sports owners are already celebrities in their own right, Wall Street titans, CEOs of prominent companies, heirs of America's richest families. But when the most prestigious team in the NBA was sold for 6,000,000,000, a record price for a pro sports franchise, the most shocking part of the deal wasn't how much the buyer paid. It was the person who bought it. This is from the Wall Street Journal. William Chisholm of the little known managing partner of a little known private equity firm will become the new owner of the Boston Celtics after agreeing to purchase the team from Wick Gruzbek, the parties announced on Thursday.
Speaker 1:The deal stunned NBA insiders and private equity investors and even Chisholm himself. You think of me at eight years old, 10 years old watching the Celtics, never dreaming that this could possibly happen. It's just a pinch me moment.
Speaker 2:Amazing.
Speaker 1:Chisholm has a far different public profile than other NBA owners, especially those who have splurged on teams in recent years. He's nowhere to be found on Bloomberg or Forbes billionaires list. Little l for Forbes there. They missed a big one. Before the sale,
Speaker 2:did
Speaker 1:they miss off
Speaker 2:the list.
Speaker 1:Yeah. He's getting on there now. He didn't have a Wikipedia page.
Speaker 2:So this line from Bill We know so little about this guy. I don't even know how to pronounce his name.
Speaker 1:Yeah. It's Chisholm, apparently. Not Chisholm. Chisholm. Chisholm, whose firm Symphony Technology Group invests in technology groups intel technology companies that handle cloud security software or run job search platforms has been quoted in the Wall Street Journal exactly once when STG bought the construction data unit of McGraw Hill.
Speaker 1:We look forward to helping the business achieve the next level of success, he said.
Speaker 2:Amazing line. Goated. No no private equity bro has ever said something like that before.
Speaker 1:Yes. Yes. Yes.
Speaker 2:Except every time if they don't actually wanna make a comment.
Speaker 1:Yeah. Yeah. You could have just said no comment, but he's on record with The Wall Street Journal just once. Now the man whose firm invested in companies called Onclusiv, Reich, and Keltra has a slightly more recognizable brand to his name, the Celtics. Chisholm, who grew up in North Of Boston in Georgetown, Massachusetts, spent spent his professional life far from the site spotlight.
Speaker 1:He attended Dartmouth as an undergrad, received his MBA from UPenn, Wharton. He worked at a private equity firm, Bain Capital. I wonder when he worked at Bain. Probably pretty probably in, like, the nineties or something. And then set off to start his own private equity firm, STG.
Speaker 2:You were at Bain.
Speaker 1:I was at Bain, but in 2010
Speaker 2:Do you have, like, a Bain alumni chat
Speaker 1:that you're
Speaker 2:part of?
Speaker 1:Definitely not. I would not I would not be in that. No way.
Speaker 2:But You could have made a generational run at the top for the top spot. Yeah. You've got the height for it.
Speaker 1:Yep.
Speaker 2:They would've just said, hey. We gotta push this guy through.
Speaker 1:The height thing is real there. Was working out at the the, like, the corporate gym at Bain Capital once when I was interning there. And one of the big shot MDs comes in is on the the exercise bike. And he's just like, you, like me, race right now. He was just the most, like, mogging ever.
Speaker 1:And he's like, I could put up it was like the fan bike. He's like, go as hard as you can. I can do 21 units of electricity or whatever. He had some weird metric that he was benchmarking against. And he just wanted, like, the the young guys to see, like, oh, like, push me harder, you know, because he's like a 60 year old guy.
Speaker 1:Yeah. Really competitive. I love it.
Speaker 2:Love it.
Speaker 1:STG, which Chisholm co founded in 02/2002, invests in companies your average hoops fan have never heard of, but it positioned Chisholm to strike when the opportunity of a lifetime came calling. The capital to put something like this together is frankly the easy part, Chisholm said based. After striking the largest deal in pro sports history, it's getting the right folks around the table. The investors alongside Chisholm include current Celtics minority owner Rob Hale, related companies president Bruce a Beale, and investment firm Sixth Street. The Celtics shines a light on the changing financial landscape
Speaker 2:of professional sports. This was done over a group chat or around a golf?
Speaker 1:Probably. Before the Celtics deal, the last three NBA teams that changed hands were sold for between 3 and 4,000,000,000, so the price is soaring. The league recently allowed, the the the league recently allowed private equity firms and sovereign wealth funds to buy team stakes. So they're allowing more capital in. The price goes up.
Speaker 1:It's just supply and demand. It's fascinating because the narrative around the NBA is that they've lost ground to the NFL. Then there's also this larger narrative that just professional sports are falling off and becoming less relevant, and yet prices are have never been higher.
Speaker 2:Yep. Yeah. These are trophy assets. Yeah. They've they've know, over the last twenty years, they've been fantastic investments, but they don't need to make money Yep.
Speaker 2:To be valuable.
Speaker 1:Yep. Based in Menlo Park, STG manages just under 12,000,000,000 in assets according to PitchBook. I wonder how much of that is his because he's putting a lot of money into this deal. Chisholm's backing from Sixth Street drew some shade throwing from current Celtics minority owner Steve Pagliuca. I'm definitely mispronouncing that.
Speaker 1:And I bet all the sports fans know exactly how to pronounce his name, who would also be leading a group bidding to buy the team from Grusbeck. We had no debt or private equity money that would potentially hamstring our ability to compete in the he said in a statement on Thursday. The former cochairman of Bain Capital is no stranger to private equity. Oh, so both of the guys that were building on the deal were Bain alums. It probably wasn't Bain chat.
Speaker 1:You're right. Bain chats. He said he he and his group would remain at the ready if the announced transaction does not end up being finalized. We'll see if this Chisholm guy actually has the money. He's throwing down the gauntlet.
Speaker 1:If you have one false step, I'm hopping in with my deal. Chisholm attended Celtics games as a kid sitting in obstructed view seats in the rickety old Boston Garden. So when he learned that the team of his dreams was available, he didn't take didn't take long to make up his mind about pursuing it. It was certainly a discussion with my wife and family for about a second. Hey, honey.
Speaker 1:Hey, honey. I I I know you're working on dinner, but can I spend 6,000,000,000 on the Celtics? Oh, okay. Cool. Cool.
Speaker 1:Got Yeah. Okay. At least we talked about it. Yeah. Great.
Speaker 1:Chisholm said that every
Speaker 2:Every husband has gone through that Yes. At some point. Yes.
Speaker 1:Similar. The GT three RS or the Adam Armpitdale, Royal Oak. Yeah. You know, these are conversations that you have to have as a family. Little family meeting.
Speaker 1:Hey. I'm buying a 6,000,000,000 sports team. Let's go. He said a central goal with the Celtics is to maintain its current success. Under the previous leadership, the team won the 02/2008 championship and added another last summer.
Speaker 1:This season is well positioned to become the first repeat NBA champion since 02/2018. To that end, Chisholm agreed to an unconventional arrangement. Grusbeck is to remain the team's governor leading its team operations through the twenty twenty seven to twenty twenty eight season. Chisholm referred to that decision as an intelligence test. Why would you wanna mess with that?
Speaker 1:Chisholm said. That is working at every level. When Chisholm does take the reins of every part of the Celtics organization, though, he is confident that what put him in the position to buy the team will let him hold on to its winning ways. In our little way at STG, we've done that too. They've done it in
Speaker 2:So many good lines in here.
Speaker 1:They've done it in higher job platforms apparently, and now he's doing it in sports. Very fun story. Anyway, one day you'll be able to trade shares in these in these teams. Hopefully, you'll be able to do it on public.com, investing for those who take it seriously. Go to public.com.
Speaker 1:But we gotta move on to, we talked a little bit about Wiz. I don't know if you wanna do some timeline. We got seven minutes. But Sean Maguire's hopping on. We can talk to him about Wiz as well.
Speaker 2:I just was curious. Yeah. What are the publicly traded sports teams? I don't know. There is the Atlanta Braves.
Speaker 2:Okay. The MLB. Really?
Speaker 1:You can just go buy
Speaker 2:shares. That's Major League Baseball.
Speaker 1:Okay. Yeah. Thank you. Good clarifying.
Speaker 2:Just our audience follows business like sports. Yes. So you got to clarify these things. Manchester United. It's got some shares on the nears.
Speaker 2:I'm looking it up because I wonder how these things so Manu's trading at at 2,300,000,000.0 Okay. On the the Nasdaq. You can go buy that on public.
Speaker 1:Third, the Celsius.
Speaker 2:Madison Square Garden.
Speaker 1:Oh, yeah. I guess the MSG Group. But that's the garden. That's the actual, like, holding company for all the different media assets. Founded by James Dolan who also or I guess his dad founded it, but then he runs it and James Dolan created the sphere.
Speaker 2:Oh, interesting. So the Green Bay Packers have done sort of these public offerings Yep. But they're not doing it anymore. But I have a special announcement. Is Jeremy Gaffan's birthday.
Speaker 2:Oh, happy I figured we could sing him happy birthday. Ready? Happy birthday to you. Happy birthday to you. Happy birthday to you, Jeremy.
Speaker 2:I hope you find a special situation today. We love you, Jeremy. Fantastic. You deserve all the success in the world. You're still a young whippersnapper.
Speaker 2:Yes. And you have such a bright future.
Speaker 1:Yes. May all your deals go through in 10 x.
Speaker 2:10 x.
Speaker 1:That's right. Much like this whiz deal, which did more than 10 x. It turned into a $4,000,000,000 windfall for Index Ventures. They're set to earn a 250 fold return on seed money in a startup Google has agreed to buy. And the partner on the deal is Sadir Shah.
Speaker 1:And Shah got Shah got the call he had been waiting for on his 30 birthday in January of twenty twenty. A promising Israeli cybersecurity founder that he had been asking for years to launch a company was in need of funding. It's it's time, said the voice on the other end of the line. Shaw kicked in 3,500,000.0 on behalf of Index Ventures. Flash forward five years, and that original seed money earned a 250 fold return this week, turning into an $875,000,000 stake when Alphabet agreed to buy, Wizz for $32,000,000,000.
Speaker 1:An index didn't stop at its first check, folks. It went turbo long. It put more money in whiz during every subsequent funding round. Let's hear it for folks at index. They built up a 13% stake.
Speaker 1:In total, index has turned its 240,000,000 investment into 4,300,000,000.0. You love to see it, folks.
Speaker 2:So Bryce over at Indy, Bryce Roberts,
Speaker 1:friend of
Speaker 2:the show, taller than you, I believe. I don't think so. Really? I don't think so. Sit up next to him.
Speaker 2:But nice try. Nice try. And, yeah, he broke down. The challenge here is how many they need. They just need so many.
Speaker 2:This is this is the biggest software M and A transaction in history. Yes. That's crazy.
Speaker 1:And and we've been on a dry spell since the WhatsApp acquisition for a decade.
Speaker 2:That was like 25,000,000,000?
Speaker 1:That was 30? I think it was like 16. But, yeah.
Speaker 2:Oh, wow. Okay.
Speaker 1:This is
Speaker 2:double crazy. So Figma would have been the next actually, next biggest. Figma would have been the next. And the crazy thing is is Index or Insight needs, like, 10 of these to have a a
Speaker 1:A five x fund. Yeah. Because it's a it's an $8,000,000,000 fund that they're investing out of. Although, was that the case for this particular seed fund? Because their seed fund, it might be a different vehicle.
Speaker 1:Yeah. Who knows? But
Speaker 2:Either way, huge win.
Speaker 1:They made a lot
Speaker 2:of money.
Speaker 1:But, yeah, we talked about this with Harry. It's possible that, like, they still gotta do more work. Can't retire to the slopes just yet, Index. Keep it grinding. Find five to six more whizzes.
Speaker 1:Come on. Do
Speaker 2:you Yeah. I'm excited to ask Sean about
Speaker 1:Yeah. Because Sequoia was also big in whiz. Yeah. Yep. Success stories such as these were once dime a dozen during the go go years of Silicon Valley when massive startup exits dominated the headlines and made being a venture capitalist one of the hottest jobs in finance.
Speaker 1:These days, the IPO is dreary. Prized startups such as Stripe and SpaceX have chosen to stay private for over a decade, putting their investors into perpetual holding pattern pattern as they await a chance to cash out. Doesn't really matter from a fund performance perspective. For most LPs, they're happy to hold on to Stripe and SpaceX shares at a high at a high mark. They don't really mind that, but still, it's an important factor in terms of getting cash out of these things.
Speaker 2:That's
Speaker 1:right. Regulators, meanwhile, have become more cautious about blessing acquisitions. Google's Wiz deal still needs regulatory approval from Trump administration. We talked to Joe Wiesenthal about the new head of the FTC, the new Lena Khan. And it seems like they will probably be more
Speaker 2:friendly to M and this deal gets blocked, ventures Yeah.
Speaker 1:It would be very, It's all over. It's so over if that gets blocked. But this is a weird one because it's not It'd be very hard to make an argument about a monopoly in the cybersecurity cloud market. Obviously, we've talked about how Google is third in cloud. They're not even first.
Speaker 1:When you look at Adobe and Figma, Adobe is the number one creative suite of apps. And so It's
Speaker 2:not like Wiz is gonna be competing with Google's core business.
Speaker 1:Yeah. Exactly. It's not really consolidating the search market. I'm sure Amazon and Azure both have cybersecurity products that compete directly with Wiz. And so it's it would be harder to make the argument, at least I think it would be.
Speaker 1:We'll see what happens. The review process itself could take years to conclude, so don't buy those vacation homes just yet. If the Wizz deal proceeds, investors hope it will pay pave the way for similar startup exits in the future. Getting the call. When Shah received Asaf Rappaport's call, the entrepreneur and his three cofounders hadn't yet settle settled on a name or a specific plan for the startup beyond wanting to go big in the fast growing world of cybersecurity.
Speaker 1:The how and what, Shaw said, was still waiting to be discovered. In his head, Shaw called the startup Asafco, a testament to his conviction in Rappaport, the founder. It was completely unexpected. It was it was completely expected and unexpected at the same time because I had been waiting, Shaw said of the 2020 call. Shaw's hunch about Rapaport, a dog lover and veteran, which we talked about.
Speaker 1:They have dogs at the office, and I believe their dog is the chief dog officer or something like that. And a veteran of the Israel's Israeli army's elite cybersecurity unit dated back to 2014 when Shaw backed Rapoport's first startup called Adalom. It was later sold to Microsoft for disappointing 320,000,000, but but I love the Wall Street Journal. But Shah felt he had spotted an entrepreneur of rare talent after the call. Yeah.
Speaker 1:I mean, when someone sold three twenty, they're in the position where they've gotten tons of experience. They've known how to run the full playbook, probably hired a great team, can build a team very quickly, and and they probably wanna go bigger, maybe two orders of magnitude bigger, which is exactly what they did. And they exited for, 320,000,000, the first one, 32,000,000,000. The next one, it's exactly a hundred times as big. Awesome.
Speaker 1:You love to see ambition like that.
Speaker 2:We love to see it. Should we talk briefly about the one x and NVIDIA?
Speaker 1:Oh, sure.
Speaker 2:Yeah. They're doing a research collaboration.
Speaker 1:Did you
Speaker 2:see the the you pulled a picture?
Speaker 1:All I saw was the picture of the robot holding a jacket, but I thought it was cool.
Speaker 2:I mean, insane aesthetics. Like, very cool. It almost feels like out of sort of Yeezy Yeezy inspired to some degree.
Speaker 1:Yeah. We're getting somewhere with this where it doesn't look uncanny valley creepily human. It looks more friendly. It doesn't look terrifying. It's not as scary as some of the purely terminator
Speaker 2:bodies. Weird to have this thing walking around your house at night while you're sleeping.
Speaker 1:But I could get used to it. This is the friendliest looking humanoid I've seen so far, I think.
Speaker 2:Yep. But I like it. Anyway, developing AI for humanoid robots involves tackling many open research challenges in safety, dexterity, visual understanding and much more. It helps to compare notes with other labs tackling similar challenges in order to accelerate progress towards a future of neos doing all the tasks needed to keep your home in order autonomously. To that end, I like One X's focus on the home.
Speaker 2:Yeah. That's obviously gonna matter a lot to just like pick it.
Speaker 1:Focusing on the home is just critical. I I I like one x's focus on the I like wanders focus on the home. I could imagine having a wander with a one x in
Speaker 2:it clean We got Sean, Maguire himself. Back.
Speaker 4:What's up, team? I didn't wear a Counter Strike t shirt this day. I let you down. Sorry.
Speaker 1:Yeah. You're still looking good. It's great.
Speaker 2:I'm gonna wear guys.
Speaker 4:And not a whoever that lady that
Speaker 1:So yeah.
Speaker 4:And anyone that comments on your hair is just jealous. Yeah. You guys are very good looking men.
Speaker 1:Everyone everyone on the call has has good hair. Right. But, I mean, it's been it's been a rough week. Sequoia is only making, like, a few billion dollars these days off of these acquisitions. What are you gonna do to turn it around after the Wizz acquisition kind of fell so short of expectations?
Speaker 4:Yeah. You know, it's it's been a tough one, you know, five five years after investments
Speaker 1:Yep.
Speaker 4:To pretty mega outcome.
Speaker 1:What are you gonna do? Talking.
Speaker 2:Congratulations. Breakdown. I'd love to hear the the the quick highlights of of meeting the team and and how that that investment came together. And then what you think from your view, how they were able because we we talked about this yesterday. The the Wiz team, the reason they were able to get such a tremendous price or one of them, I'm sure multiple, is because they just were growing so quickly and getting so much traction that they didn't need to sell.
Speaker 2:So it's, you know, they had infinite optionality, but how do you think they pulled this off?
Speaker 4:So on the team, I mean, Gilly Renan and my partner Doug Leone get all the credit. They are both absolute legends. So the backstory there is, you know, Squay used to have Squay Israel. Gilly was one of the three partners there. Gilly is an insanely talented guy, and he started his own fund called Cyber Starts, which we seeded.
Speaker 4:And early on meaning, like, Sequoia invested in his fund, which we don't do very often.
Speaker 6:Mhmm.
Speaker 4:And Gilly called up Doug, said, I have the next one. And, you know, it was Asaf and the team. Doug holds, like, four of us into a rapid fire meeting. I was in that first meeting. And, I mean, to be very honest, the learning I personally got from watching Doug operate here and, like, get getting to see, like, a phone call from Gilly of I've got the next one with these cracks, like, crack team to multibillion dollar gain five years later.
Speaker 4:Like, it's really hard to explain how much learning goes into that. But to to I think there is a lot of really interesting stuff from the beginning here. And so this is this is my recollection. Different people have different recollections. But basically, Doug got the call, set up the meeting, four of us joined from Sequoia.
Speaker 4:The team had it was obvious how insanely good the team was. You know, they had sold their last company to Microsoft and they're basically running cloud security there. And they had an they had a very strong point of view on what problem was. The problem was cloud security. No one had solved cloud security.
Speaker 4:They had very they had, like, an extreme articulation around the problem, but they didn't really know how they were gonna solve that problem at the time. And so they had they had a really clear insight into the wedge into the market, which was mapping that basically, people don't even know what assets they have in their cloud environments. And so the first thing they're gonna do is they'd figure out how to map people's assets kind of outside in so you can tell a customer in a first meeting, this is everything you own, you know, and therefore, these are vulnerabilities. But the original idea of how to solve the problem after that wedge in was, like, basically a networking solution, like a zero trust networking solution. And so it's I wouldn't say it was a pivot because it was they had identified the problem they wanted to solve, but the actual solution changed dramatically in the first few months.
Speaker 4:And so, you know, people talk about, like, market versus team. This was a market and team, but I think it's interesting how, like, the idea changed so much in the first few months. And I I think it
Speaker 2:But digging in a little bit more, you guys made the first investment. Was it 2020? Or Yeah.
Speaker 4:Was was called January, February '20 '20.
Speaker 2:Okay. In 2020, was the average venture capitalist believing that no one had solved cloud security? Or is that something that you had to really be in it running it at Microsoft to realize that it wasn't a solved problem? Because, you know, I think the market was reacting to the news saying, wait, does Google not did they not have it coherent? Like cloud security
Speaker 1:about security at Google? Like, this that's why they did this deal? What was going on before?
Speaker 2:But, yeah, was it was it con Yes.
Speaker 4:So It's a really good question. And it's
Speaker 1:Yeah.
Speaker 4:Funny. I mean, I personally have, an extreme background in this space. Sure. I had started a company called Xpense, originally KDM a long time ago. I started in 2012.
Speaker 4:And to be very kind of, like, we were a precursor company to Wiz, like, basically directly. And we started off in an on prem era, and so doing, like, the mapping of on prem networks from the outside in and, like, our primary value proper, like, sales wedges, we would show up when we already knew people's networks and their vulnerabilities when we would show up. And so, like, I personally had a prepared mind, but I I think very few peep there was this extreme skepticism of the cloud has been around for fifteen years. Why, like, why is cloud why now? Like, why is cloud security not solved?
Speaker 4:But I think to anyone that was, like, a practitioner, it was clear it was not solved at all. And I think the the lesson is that, like, the way I think about it, the cloud penetration was still very, like, very low in, call it, 2015. If you look at, like, total percent of, like, compute in Fortune 500 companies, I don't know what it was in 2015, but it's probably, like, 5% or 7% or something. That'd be my guess. And by the time you got to 2020, it was a much bigger fraction.
Speaker 4:And so it's like, I think it it we had just flipped where customers and buyers in their heads, if if only, like, 5% of your network is cloud, you care more about securing the on prem than the cloud. And if you're a second class citizen, like, you just doesn't really get done. By 2020, cloud was, like, the first class citizen. It was by far the most important thing to secure, and no one had everyone before had had us, including my own company. Like, we started with an on prem solution, then we started to bolt on a cloud solution.
Speaker 4:And our cloud solution wasn't very good because that's not how we started.
Speaker 1:Mhmm.
Speaker 4:And so to come in and only do cloud, that lets you have a way better product experience for the cloud. And they just they entered the market when it was, you know, call it maybe not in terms of total compute, but 50% of the mind share in an org could become cloud. And then they were able to grow with that as it went from there. And so it's just that something can happen. Like, the cloud can get created, but it may not be the right time for to build, like, the cloud security business for another fifteen years.
Speaker 4:You have to wait for maturity of the market and all of that. And I think they just timed the maturity perfectly. And then the last thing is you you need to solve this from the outside in. Like, you can't Microsoft can't solve this themselves. You have to have a solution that is kind of looking at all clouds and looking at the entire industry because people are multi cloud.
Speaker 4:They work with multiple vendors. And, like, I I I think that this has to be you have to have Wiz, like, very much came with the right approach for that time.
Speaker 2:That makes sense. Can you talk about Keller? Got announced a few days ago, I think five days ago. Very high profile round. I heard about it, I think, last year at this point.
Speaker 2:So it's probably they're probably already getting, you know, preempted on on the next one. But talk about the team there. How quickly did you know that you wanted to to back them?
Speaker 4:I mean, basically, we're killing it killing it in Israel or maybe it's the wrong language. We're we're investing very well in Israel. Anyways, so Kela, my partner David Khan, led the investment, and I'm his wingman there. Kell is an another amazing team. We have known kind of one of the two primary cofounders, Alonjour, for quite a long time.
Speaker 4:He he was an absolute legend. You know, one of the things we've been doing in Israel is and actually, like, let me make a bigger point about Israel. One of the things that I think is very unique about Israel right now compared to most other places, it's much easier to concentrate talent in Israel than it is as like a Stanford spin out. Let me unpack that. Like, if you go back in time, basically, every every great company I can think of in the past has done a phenomenal job concentrating talent.
Speaker 4:You know, if you think about Palantir, like, they got all the best people out of Stanford in a few year range. If you think about Google, like, they got all the best people, you know, ten years prior. And after the dot com crash, they went and acquihired a bunch of the best teams. They brought in Jeff Dean and, you know, like, they scooped up a bunch of the best talent after the .com crash. If you think about, you know, PayPal, obviously, the PayPal mafia, like, had concentrated insane amounts of talent.
Speaker 4:SpaceX in the early days, like, anyone in the world that wanted to work on rockets, like, there was only one place to go, and they went to, you know, SpaceX. And the best companies concentrate insane amounts of talent early on. For a bunch of reasons, I think it's become much harder to concentrate talent spinning out of, like, Stanford or Harvard or wherever than it used to be. I mean, one like, to be very blunt, one is these universities have become like, they basically lost meritocracy and they lost you know, like, there's great inflation. You don't even know where you stand relative to other kids.
Speaker 4:Harvard last year implemented their first ever remedial math because there are people coming in that don't know algebra because they dropped the admission standards. It's it's the truth. It's crazy. Like, they dropped the admission standards so much. And so, like, the people coming in are no longer as good, and then there's grade inflation, so you don't even know who the absolute most crack people are.
Speaker 4:If you go back to, like, call it the eighties and onwards for a while, Harvard had this insane math class called Math 55. Math 50 five was legendary in the math community. It's like, you know, probably 50% of people that even finished the class went on to be math professors.
Speaker 1:Wow.
Speaker 4:It was something that you would basically learn, like, a whole undergraduate math curriculum in one year, so you could just do graduate classes and research after.
Speaker 2:Is that is that class, like, y c where the if you enter into it, you're kind of doing it for twelve hours a day type of thing. Is it that intense or is it
Speaker 4:It's it's the only it's the only thing you do when you're at Harvard, like, if you're in that year. So, like, Bill Gates actually did Math fifty five and so did a bunch of the other kind of Microsoft founders. The like, the fact that they did math fifty five and survived as, say, computer oriented people rather than pure math people, and that they went and started a business, that that calling card let them recruit anyone from Harvard. Like, anyone they wanted would go work for them just because, like, people knew how smart they were because of Math fifty five. It's like these things are actually very important as, like, signals to other smart people that this person's on a level above me.
Speaker 4:And so therefore, like, I should lower my ego. Like, I was not able to finish math fifty five, you know, you know, some hypothetical person, like, tries math fifty five, gets absolutely smoked, weeded out in the first week, and then, you know, Bill Gates crushes it, and so they wanna go work for him. We don't
Speaker 1:Yeah.
Speaker 4:Have that as much anymore at Stanford and Harvard, etcetera. There also just weren't as many companies getting formed back then. And so, you know, the ones that actually did get formed, you know, I'm I graduated college in 02/2007. Facebook was the hottest company in the world kind of when I was an undergrad. And at the time, I think Zuck is probably two years older than me, there were basically no startups coming out of Harvard at the time.
Speaker 4:And so, like, everyone that was good that would consider a startup or was technically brilliant, like, would just go recruit them. Now there's, like, 50, and so the talent gets spread across all of them. In Israel, there is still this insane concentration of talent, and it comes from this is my weave. This is my Trump weave coming on. Yeah.
Speaker 4:There's this insane concentration of talent that comes from the fact that because everyone goes into the army, there's extremely rigorous selection of people for the army and call it from an intellectual standpoint, there's like 60 slots for the most prestigious best thing, and it's, like, extremely rigorous vetting to get those slots. And so the people that go do that are already kind of selected on a totally different level than those other people. And then out of those 60 people, one or two will emerge as like the apex, you know, alpha men or women that just do insane work and are geniuses and everyone else wants to follow. And so when they come out of the army, they are really able to concentrate talent in a way that is basically impossible if all you've done is gone to a school that has, like if, you know, if if you've gone to school that has pass fail grades Yeah. And and your admissions, like, process is basically non meritocratic and, like, an essay.
Speaker 4:And so anyways, like, with Kella, I mean, if you go back to Wiz, like, the Wiz founding team were absolute legends, like psycho level legends in Israel, and therefore able to concentrate insane talent. In the first couple months of the company, like, basically day one, they hired 20 people that were ultra elite. And it's just like, when you're that good and everyone knows it, you can bring in these incredible people from day one. Kela is of this mold as well. You know, like, lot of people know what VCs are now learning what Talpiot is.
Speaker 4:Talpiot is kind of one of the most elite forces in Israel. It's people people that have extreme aptitude in mathematics, physics, and leadership ability. And so three of the four Wiz cofounders were Talpiot. Alonjour, one of the cofounders, is also Talpiot. And and so, like, there's the the Talpiot mafia, and he's especially highly regarded there.
Speaker 4:And so, anyways, they've done an incredible job concentrating talent. And, you know, Alone teamed up with this woman, Hamutal Meridore, who complemented him perfectly. She'd been at Palantir for a long time and just, like, really under obviously, when you're working when you a defense tech company, you need two things. You need to build great technology, but you also need to be able to sell it. And you need to understand, like, government sales, government procurement, and Alone is a genius at building great technology, and Hamotall is a genius at, you know, selling it and navigating government relationships.
Speaker 4:And for this reason, I think both Palantir and Andrew Roll did this unbelievably well. They kind of established this playbook.
Speaker 1:Well, related to that, what is what is your take on the latest continuing resolution? It seems like there's not this massive increase to the defense budget that some, defense tech startups were hoping for. Maybe there's money that's gonna shift around. But what is your advice to maybe young defense tech founders that are hunting for that first program of record looking for some some government money, in the new era?
Speaker 4:It's so crazy that we're having this conversation. Like, if you would have told me ten years ago that someone's gonna say in like a live podcast, what do you say the young bard is hunting for a program of record? It's like, that language, you know, this this was like you you are an alien ten years ago.
Speaker 2:Yeah. Yeah.
Speaker 4:Look, I would say to the young founder that's hunting for program of record, only one or two of you a year are going to do that, and it's gonna be, like, of new companies, and it's really hard. And it takes both having great tech and great, you know, government BD. And so don't underinvest it in either of those. And
Speaker 2:Yeah. It's interesting. It used to be used to be extremely difficult to raise venture capital. Oh, yeah. Now it's seemingly very easy to raise venture capital.
Speaker 2:The part is to in in this category.
Speaker 1:And I wanna hear your take on, dual use. There there's a there's a theory that we were kicking around yesterday talking about, well, maybe you're better off if you're a dual use company. We talked to a satellite company, Albedo. Obviously, they do, imaging of the Earth at 10 centimeter scale. That has military applications, but that also has commercial applications.
Speaker 1:So if the DOD money doesn't come quickly enough, maybe they go sell it to hedge funds and oil and gas companies. Do you think there'll be a shift in VC or defense tech VC towards, I want a little bit more of a dual use story earlier just to hedge against defense budgets?
Speaker 4:So it's kinda crazy that you're asking me these things because the company I started was a cybersecurity company that was basically a worse precursor to Wizz Sure. At where it was dual use and, you know, about two thirds of our revenues from the US government Yep. And one third was enterprise. And so it's like it's these maximum two sets of overlap of the threads you're asking. I think I mean, look, with our company, everyone told us you cannot be Gov only.
Speaker 4:It has to be dual use. That's what every investor told us, every expert. And so, therefore, we did it because we wouldn't have been able to raise money otherwise. But I think dual use is kind of a mirage. Like, it's it can be great, but I think you have to I think we're entering an era where investors are okay with just government sale companies
Speaker 1:Sure.
Speaker 4:Single use. And I think you just have to do what's best for your company and what's best in any given moment. If it's natural for your company to be dual use because the product is basically the same in both, you know, enterprise and gov, then do that. But if it's if it's gonna, like, really cost you on one side to do the other, then I would just not do it early on. And, like, with Palantir, I don't know I was never in the building of Palantir.
Speaker 4:I don't know the story that well. But my kind of my understanding was that early on, they had way more pull with the government than with enterprise and but, like, they tried to do both. And and and it was I think it with Foundry, there were different points in time where they had way more pull with the government than with enterprise and times where they had more pull with enterprise than with government. I think there was pressure on them to always be doing both, and I would just say lean into wherever you're getting a lot of pull right now, but don't close the door on the other.
Speaker 1:Yeah. It depends on the product. Like, I mean, obviously, Microsoft Teams is ITAR compliant. Right? Like, is it a dual use technology?
Speaker 1:Yes, I guess. But then if you Windows XC four
Speaker 8:on it.
Speaker 4:Or, like, Windows 95 is it which everyone's are still certified to run. You know? None of the at least when I was in the DOD, like, the most current operating system was from the nineties.
Speaker 1:Yeah.
Speaker 2:Crazy. There was allegations in a lawsuit of of corporate espionage earlier this week. I don't need you to or want you to comment on that incident, but do you think that corporate espionage is is a sort of potentially broader issue in Silicon Valley, something that needs to be taken more seriously, or is this just sort of like a, you know, one off sort of crisis?
Speaker 4:Oh, man. Well, I I think that Elon was right when he said the most most entertaining outcome is the most likely. That's just been true
Speaker 2:Over and over.
Speaker 4:Level. It's it's like second law of thermodynamics. Look. I I don't have a super strong point of view on this, but I'll just say, I think that nation state espionage in Silicon Valley has been much much bigger scale than people have understood for at least the last decade and probably beyond that. And, you know, Deleon yesterday or whenever I think he's right.
Speaker 4:Like, if you're if it like, if if you're a hardware company, just go try to compete on the merits of the hardware and obviously do what you can to, you know, like, your
Speaker 2:IP.
Speaker 4:IP and data assets and everything. But, like, at the end of the day, in hardware, you're gonna win on the merits of the product. On the software side, I think you have to be a little bit more concerned, but it's it's just in in hacking, there's this expression, you wanna be a target of opportunity. Sorry. You wanna be a target of choice, not a target of opportunity.
Speaker 4:Meaning, like, if some nation state says, we are going to hack this company, like, they can hack anyone. But you don't wanna be like the slow pack animal that's just like the target of opportunity. Yeah. The slowest gazelle
Speaker 1:on It's down by the North Koreans that are stealing your crypto or something like that.
Speaker 2:Exactly. Like,
Speaker 1:X, the everything app?
Speaker 2:Well Yeah. I'd love to give you another victory lap on X because I think last time we came on, it was rumored that there was this new announcement. But but before that, could you talk about what's your sort of takeaway from the incident with the NASA astronauts? We're very happy to have them back here on Earth with the dolphins. But is there any learnings that you think that the space industry should be taking away from that broadly and, you know, NASA in general?
Speaker 4:So I might have mentioned this guy before, but one of my closest friends from Caltech, his name is Casey Hanmer. He's a brilliant guy.
Speaker 1:Brilliant.
Speaker 4:He's a, you know, prolific blogger.
Speaker 1:Love him.
Speaker 4:I mean, very, very smart guy.
Speaker 1:Yeah.
Speaker 4:He has been saying for so he worked at JPL, and he's been saying for many years that I'm I'm this is not what he's been saying. So I'm I'm sorry. Casey, I'm making this more provocative than what you actually said. But he's basically said that NASA's been underestimating SpaceX and that it's in NASA's interest to kind of understand and anticipate, like, just how fast the progress of SpaceX is. And what he actually said is that they're underestimating Starship, and that Starship is gonna really change what's possible in the future, and that NASA has been still designing missions with the constraints of ten, twenty years ago, which is when launch costs are in limit infinity and there's very few slots per year, then, like, the like, if the economic rational thing is to spend close to infinite money making sure that your satellite works the first time because the launch cost dominates in the return math.
Speaker 4:Infinity divided by infinity or whatever. But, you know, if you have any any large constant number divided by infinity is zero. So anyways, like, they've been had this state of mind that launch is precious. There's it's it's infinitely expensive. There's very little of it.
Speaker 4:I think NASA needs to get in the state of mind that launch is becoming abundant. Mhmm. You know, in the future, it's going to be in the limit going to zero. Like like, literally, if you go twenty years from now, I think that I mean, Elon has said that the forecast for Starship are something like $20 a kilogram or something like that.
Speaker 2:You Just a few
Speaker 1:hundred thousand, basically. Yeah.
Speaker 4:Used to be a hundred thousand dollars a kilogram. And so I just we have to get in this mentality that, like, SpaceX is not SpaceX is not just Elon. SpaceX is an incredibly well run company that has, a very diverse set of leadership and, you know, very robust, you know, team and that they are bringing insane capabilities to bear that will deeply, deeply benefit NASA. And we need to intersect the future, not the present or the past.
Speaker 1:I love it. Can you talk a little a little bit about I mean, we talked about the X funding last time, but I wanna know about X's clearly on the warpath to becoming an everything app. We're basically running the entire show on X now. We have group DMs for how we organize the show and stuff. It's been a really robust platform for us, but I see that they're rolling out payments and all sorts of different features.
Speaker 1:There's always been this narrative that an everything app can only happen in the East. Yeah. It's America's
Speaker 4:Happened in China Ten Years ago.
Speaker 1:Exactly. So, can you lay us out, like, what are the hurdles? What are the milestones? What are the opportunities for X to become a really, like, really fully realize the vision?
Speaker 4:It's not my place to fully lay this out. I'll let, you know, I'll let Elon do that. He's pretty good at setting vision on things, but I think people are gonna be look. X has been underestimated the last few years and not by you guys. Like, you guys are part of the small cohort of people that realize the eighties was a great decade and, you know, and and that America is the greatest country in the world and that x was the place to be the last few years.
Speaker 4:But but a lot of the world's been underestimated, and I'm I'm very optimistic about where it's going the next few years. And I'll and I'll just say, like, instead of saying the road map, I'll say the company has had to since to take private, there's been, like, a few years of, like, fixing the foundation of the company. Yeah. And we're starting to enter the era where, like, the foundation is strong, and they get to now, like, actually build on top of this new strong foundation. And so I think we're gonna see it's like the progress has been below the ground the last two and a half years.
Speaker 4:It's about to go above the ground where we all see it.
Speaker 1:Yeah. A lot of the a lot of the products that got built or rolled out were just things that had kind of been on the shelf and maybe were like not really launched for whatever internal political reason. Elon kind of got all those out the door and I feel like the app's been working really well. The algorithm's been more satisfying than ever. I feel like I'm seeing really interesting content, so I've been satisfied.
Speaker 1:One
Speaker 2:more question. Do you think M and A is really you know, is the Wiz acquisition, it still has to be approved from what I know, but is M and A, you know, really back on the menu? Do you feel like, you know, when you're talking to some of these later stage founders that are exploring, you thinking about the future and saying, an IPO make sense? Does some type of strategic acquisition make sense? How are you thinking about this personally?
Speaker 2:I'm sure your general advice is just be a great company and grow really fast and you'll have a lot of optionality. But do you have a sort of a feeling about where things are going?
Speaker 4:Not about Wiz at all. My general kind of m and a view is I think there's two things that people are looking for. They're looking for guidance that things will actually be approved. And it's not just in America. There's also, like, for most companies, European regulatory approvals, and that has been the bottleneck for quite a few m and a deals in the last few years.
Speaker 4:So I think it's, like, greater clarity on the global US and Europe, but everywhere kind of regulatory approvals. And the second, I think there's still like, when I when I talk to bankers or anyone in the last six weeks, there's a lot of macro uncertainty. Like, people are very nervous about tariffs and very nervous about, you know, like, Doge and kind of people don't wanna go do a big m and a transaction when the markets can change 30%, you know, either way quickly because it it just you don't know exactly what you're underwriting.
Speaker 2:This happened with Square and Afterpay or whatever. They they bought Afterpay for like $2,030,000,000,000 dollars, some crazy number, and then Square was worth something like that like a year later, you know. It's just like
Speaker 4:Yeah. Those are the two those are the two things. I think if if we get clarity, like favorable clarity on those two things, then I think m and a will rip. But it requires both.
Speaker 1:Well the new head of the FTC Andrew Ferguson is out doing podcasts. We'll have to have him on the show.
Speaker 4:He should Got him on.
Speaker 1:And we can put the screws to him and say let's do some deals
Speaker 4:Andrew. He's Andrew. He's not coming on after
Speaker 6:that comment.
Speaker 1:He's not coming on.
Speaker 4:Anyways, thanks for having me boys.
Speaker 1:Yeah. Thanks for stopping Have a great weekend.
Speaker 4:I've got say you guys are crushing it. Keep going. Crushing it.
Speaker 2:Thank you for being a part of it. Good Bye. Very cool.
Speaker 1:It's great. It's always difficult to get him in trouble with Sequoia regulatory.
Speaker 2:Yeah. That's the challenge of being an RIA.
Speaker 1:Yeah. Yeah. I mean, we're getting bad think we
Speaker 2:should have a button
Speaker 1:The cone of silence.
Speaker 2:We should have a button that we hit before. This is not financial advice.
Speaker 1:This is not financial advice. And then we have to beep each other because I lean into it so often because I think I'm just asking, like, hey. Do you think that Tesla's a cool car? And he's like, that's a public company. Can't talk about it.
Speaker 1:But but still lots of great insights and always a fun conversation with Sean. And speaking of Sean's, we're having another Sean on the show. Sean from Ridge. Is he in the temple?
Speaker 2:There he oh, no.
Speaker 3:Got Connor. Connor's first.
Speaker 2:Surprise. We got Connor. So for those that don't know you I'm sure everybody already knows. So Connor
Speaker 1:I got my Ridge
Speaker 2:Wall. And Sean are business partners and leaders over at The Ridge, dear friends of mine. Connor, I wanted to have you on for a bunch of reasons. One, because I knew you were gonna dress for the occasion.
Speaker 1:Thank Dude, of course.
Speaker 2:Looking sharp.
Speaker 8:Showing some respect to TVPN.
Speaker 2:Yeah. Yeah.
Speaker 1:Respect. And little little fun fact piece of lore for the fans. In our first launch video, when you see us having dinner and drinking wine, Connor was at that dinner with us. Yeah. And he is pictured.
Speaker 1:He's the shoulder that you see us Yeah. Over.
Speaker 2:Fantastic cameo. Little cameo.
Speaker 8:Early early Technology Brothers supporter for sure.
Speaker 1:Thank you. We appreciate And now you're on the show, welcome.
Speaker 2:It's great to have you on. I I wanted to get a kind of a market update on how performance marketers are thinking about the various platforms and planning for the rest of the year. We've lived in a world, you're also a young adult, but our our entire lives have just been every single year ads get more expensive. So you kind of need to plan around that to some degree, but you're very plugged into the sort of e commerce space broadly. There's challenges in e com on the sort of tariffs side but there's all there's sort of this like sort of dual pressure.
Speaker 2:It's hard to get products. It's expensive to get products. It's expensive to sell them. Maybe I'd love just sort of like a high level sort of like market update around how you're thinking about the different ad platforms and and maybe we get into like where you're finding an edge. Obviously, don't give you know, give away the stuff you're doing like nine months ago.
Speaker 8:Yeah. Yeah. Yeah. Yeah. Of course.
Speaker 8:No. Perfect. So to take a quick quick step back, yeah, Ridge is a direct to consumer brand. As Jordy mentioned, the last ten years, it's gotten harder and harder every year. I think d to c acquisition has been like a war of attrition.
Speaker 8:Things get more expensive. You're reaching that new marginal buyer who's harder to acquire, more expensive. It is it's been a a a difficult environment to scale in as a d to c brand regardless of kind of consumer sentiment. I think what we're facing right now, clearly, all the data is telling us is that not only are things getting more expensive, ad platforms are performing worse, there's restrictions on privacy, but I think people are spending less money. And when it comes to the business of selling minimalist wallets like I do, that's become increasingly difficult.
Speaker 8:So I've got two quick data points, one anecdotal, but there's a great, there's a great service called dtocindex.com, and they have something called the the the direct to consumer confidence index. So it's like a stand in for CPI, which has like you know, they only take that snapshot of data sparingly throughout time. DTCCI is measuring the sentiment of consumers every single day. And on the eighteenth or just a couple days ago, consumer sentiment about the economy dropped to the lowest level since October fourteenth of last year to paint the picture of how are people feeling about spending dollars today. The second point that I have is from, our contact at Meta who described the current climate for d two c brands, at least the growth oriented ones, as a quote unquote bloodbath.
Speaker 8:So that's my that's my quick
Speaker 1:Totally like that.
Speaker 8:That's my quick performance update is, that that is what we're working with. So I can talk, maybe what we're doing to to to work through that a little bit
Speaker 1:if that
Speaker 2:would help. Yeah. That'd be great.
Speaker 1:Yeah. What's Amazing.
Speaker 8:What is working right now? So actually, with a little more doomer news, and then I'll get into what's working. Consumer's tougher. That makes everybody's lives harder. On top of that, I think there's been changes within meta that makes everybody's lives more difficult.
Speaker 8:And people like to poo poo the the importance of meta, but it's like, you know, there's that stat. It was like 40% of every VC dollar went into meta advertising. Yeah. It's like 30% of all digital dollars spent, something like that. So when meta is worse, it's it's harder for everyone.
Speaker 8:And right now, we're at this point in time where it feels as if the meta platform in and of itself is not doing what it used to do. They began kind of waiting outcomes differently. It's become more middle and bottom of funnel to say, you know, it's serve serving to warmer and warmer audiences. And us as marketers or or or, you know, growth people, like, we want to be driving incremental results. Meta is harder to get that done with, at least in the way that it has always been.
Speaker 8:So that gets to what has been working. We've basically had to completely change our strategy.
Speaker 2:Real quick, Connor. Yeah. Why is Meta worse? Is it is it stuff that they that they sort of need to do or is it stuff that they did and that it it was sort of the the unintentional effect is that the ad product gets worse for advertisers? Like, is it why is it happening?
Speaker 2:And are your, contacts at Meta saying, hey, we're act we know this is not great and we're actively trying to get back to where we were or is it just get used to it. This is the new normal.
Speaker 8:Totally. Yeah. No. Some of the things are out of Meta's control. Like, Meta's obviously gotten less efficient post iOS 14, which was when Tim Cook and Apple really put a lot of restrictions around what data did Meta have access to.
Speaker 8:At that point, you went from, as an example, being able to optimize for a twenty eight day outcome. So if you're optimizing for a purchase that could happen over twenty eight days and Meta could take could attribute that that purchase to itself. Now that's just a seven day period. Right? So now it's like a much smaller period.
Speaker 8:You have, fewer or less ability to exclude the customers that you want, and Metas began weighting these click based outcomes. So all of those things together means Metas only able to attribute orders to the platform on a shorter time frame. There's less exclusions, and it's serving to people who have already seen your ads. If you're trying to introduce new people to your brand and actually generate awareness, generate intent, and, drive incremental orders, that's just a harder environment to do it within. And those are like that's half things that are out of their control.
Speaker 8:And then part of the things that I mentioned are within Meta's control, and I think they are trying to address. So the answer to your question, Jordy, would be
Speaker 7:a combination of the two.
Speaker 2:Yep. That makes sense. Anyways,
Speaker 1:I have a question on AI ads, not AI generated ads, but actual ads in LLM responses. Perplexity is starting to monetize by allowing advertisers to inject advertisements into you ask perplexity, what wallet should I buy? Boom. Ridge Wallet ad. People are proposing that OpenAI will do this as well in the ChatGPT app.
Speaker 1:Are you thinking about that? Will that be something that you're testing this year if you're not already?
Speaker 8:Well, I will say I just got off a a phone call with the VP of growth at Ramp, George Bonacci. He wanted me to remind everyone that if you're looking to save time and money, go to ramp.com/t
Speaker 2:There
Speaker 1:we go. Safe boat. Thank you.
Speaker 8:Yeah. But no. We were talking about we weren't actually talking about paid ads in perplexity. What we were talking about was SEO optimization within Sure. Chat responses Mhmm.
Speaker 8:Which is not something we've done a lot of so far. It it's one of the things as a more established brand, I think we immediately benefit from. Of course.
Speaker 1:There's already Reddit We
Speaker 8:are we are you.
Speaker 1:Right? And so Reddit gets baked into all the LLMs, and you already pop up.
Speaker 8:Yeah. Totally. So we I don't think we have to focus on whatever you wanna call that, like, LLM SEO optimization Yep. Versus someone else who's less established. But I think over time, as people catch on to that as a opportunity, then we'll have to pay more attention there.
Speaker 8:Mhmm. But I'd be more interested in it from a organic a quote unquote perspective versus the paid ads on perplexity.
Speaker 1:Okay. Interesting. Interesting.
Speaker 2:Yeah. Do you feel like the the the sort of e commerce industrial complex like needs another great ad channel right now? Like it seems like throughout the history of selling products online, like things have gotten a bit rough and then, you know, we got Instagram or then we got reels or then we got, you know, TikTok or whatever and it just seems like in order to like keep the, you know, keep keep growing. There there always needs to be that sort of next platform. And could that be LLMs?
Speaker 2:Like, now, I don't see a lot of from from my lens, it's not commercially oriented searches happening on chat GPT. People still discover products on places like Instagram and then they ask chat GPT, how do I make a good quesadilla maybe? But it's not like there's not a lot of commercial intent there. But do you think, do you see a world in which LLMs can be that next like, you know, 10 x ad platform or do you just think it's a different?
Speaker 8:Probably, I wouldn't say a 10 x ad platform. I think the the important distinction is like, there are certain brands and and and and industries that benefit from like these high intent channels. Right? You are looking for a mattress or you are looking for insurance. They're the ones where as people discover those products through LLMs, like, that's probably a massive opportunity for them.
Speaker 8:How many people on a daily basis are gonna be searching for men's wallet in Chatchip Chatchipity? I don't think it's gonna move the needle on our business. What has moved the needle are these, like, discovery channels, which was, like, when Snapchat was introduced or a TikTok or whatever else is, how can we get out in front of millions of people and say, hey, we've got a better wallet than you currently own. You know, they're supposed to launch ads in Meta's threads. So Oh, yeah.
Speaker 8:We'll hold out hope. Maybe maybe that's the 10x ad platform.
Speaker 2:There we go. You never know. There's always a bull market somewhere.
Speaker 1:I love it. We had we had Kennen Davison on from ICON. His company helps d to c companies like yourself build and scale out AI ads. Not fully ad generated, a lot of repurposing content. Can you tell us a little bit about how AI is incorporated into the creative workflow?
Speaker 1:Who's actually doing this work on your team? It seems like it's probably still like a centaur model where there's a human working with an AI editor of some sort. But can you break down the creative workflow and how AI is impacting that right now?
Speaker 8:Yeah. Awesome. And I'll with, you know, from a performance perspective, I think one of the most important things we've been able to do is scale up our content creation.
Speaker 1:Yep.
Speaker 8:So So that these are like one and the same. We have two performance creative strategists on our team who went from manually concepting to writing briefs to sending out to creators to receiving that content to editing it to creating ads. We're trying to like truncate that all down via AI. So you can imagine the further upstream parts of the creative process, the concepting, the briefing is we're probably doing five, ten times faster and probably more with more novelty than we were otherwise just because it's easier to ideate with something like we use Claude mostly. We found it to be very, helpful in that sense.
Speaker 8:So that's really benefited the the ideating process, and it speeded up sped up that that, that workflow quite a bit. I'm a big fan of Icon and Canon, and they're a really cool example of once we've generated all of this content, how do you go zero to one on, like, some new concept? We have thousands of hours of of content just laying around in Google Drive. So how do we repurpose that and kind of like elongate the value of that? And ICON's been cool in that because it is basically an AI video editor.
Speaker 8:We can say, hey, we want a concept to appeal to 40 year old men in flyover states and it will put together a concept and kind of piece together and stitch together the content to do that.
Speaker 1:Got it.
Speaker 2:Do you have another one?
Speaker 1:No. I was gonna make a joke about asking Siri to buy me a wallet with high grade materials, lifetime warranty, and a ninety nine day risk free trial. But I don't think Apple Intelligence can do it yet. But maybe operator can. I don't know.
Speaker 2:We'll see. I had one more. How are you thinking about sort of activations and stunts and things like that? Ridges out of scale, once you're doing, you know, hundreds of millions of revenue, you can start to think about, oh, should we sponsor a NASCAR team? Should we, you know, do this?
Speaker 2:You have a big partnership with them.
Speaker 8:A Racehorse.
Speaker 1:Yeah. Racehorse. Thinking about getting a Bentley Continental GT Speed, and I thought you could wrap it with the Ridge Wallet logo and maybe help him with the the payment on that as he commutes in.
Speaker 2:Yeah. That'd be great. You can you can have a you know, it'll be just be $3,000 a month. Exactly. No.
Speaker 2:But how how do you think about these sort of bigger stunt marketing and and is it just brand marketing or do you historically just see like, how do you think about attribution?
Speaker 8:Well, we're kind of gearing up for right now from a stunt marketing perspective. Each year, do a sweepstakes. So last year, we Mhmm. We did a 24 carat gold plated Cybertruck that we gave away or
Speaker 1:That's right.
Speaker 8:Velociraptor. Yeah. So, so that's what we did last year. And I think each year, we're just gonna try to raise the stakes. That's kind of the name of the game.
Speaker 8:So what we're we're doing now is we're gearing up for that. Can't share too many details, but we'll have more cars, bigger activations. That'll be live in August, so everybody can look forward to
Speaker 1:it. I feel like the last one, it went really far because I I think I saw MKBHD do something with it, but then later, like, Doug Demuro was auctioning it off. And I saw,
Speaker 6:like Yeah.
Speaker 1:Yeah. I was like, we're now, like, four steps away from the Ridge guys, but I'm still seeing Ridge on all of this stuff. Like, how did this happen? Was that kind of intentional that you talked to multiple influencers and you say, okay. You're gonna have it for a day.
Speaker 1:You're gonna have it for a week. You're gonna Yeah. Auction it off. Is that was that the plan?
Speaker 8:Yeah. No. Totally. So, it was it was that was a part of the plan. Some of it was serendipitous.
Speaker 8:We had realized the year before, hey. If we can get the car in a YouTube creators video, things just performed like three times as well, which is like no real surprise. So so the game last year was just like, yeah, how do we coordinate getting one or both of these trucks in as many videos as possible?
Speaker 1:Yep.
Speaker 8:The serendipitous part was I had this the Cybertruck here in Salt Lake and Jerry Rig Everything, who has a very big tech channel
Speaker 1:Yep.
Speaker 8:Tweeted. He said, hey, does anybody in Salt Lake have a Cybertruck that I can use for a project? And we were like, hey, we do. And that's how we got into his 24 carat gold plating video.
Speaker 1:That's
Speaker 8:right. So that kind of started it. And then we got it in a Marques video. We had it all over the place and we made it in twenty twenty four videos. Colin and Samir did a did an ad read in the truck which was really cool.
Speaker 1:That's right.
Speaker 8:And then to top off the campaign, the winner selected, the cash actually, so they didn't take either car. But we were able to auction off the 24 karat gold plated Cybertruck on Doug Demuro's Cars and Bids. So it was a very YouTube heavy campaign, which was very fun.
Speaker 1:Is it tricky running these, sweepstakes? Because I think legally, you have to be you have to say no entry required. Anyone can just write in, and then people can kind of, like, batch mail in a thousand entries. I remember hearing stories about, someone at Caltech in the very early days of the original photocopier figured out that McDonald's monopoly didn't require any purchase, no purchase necessary. So they dropped off, like, thousands and thousands of pages of, like, I would like to enter the contest, and they got, like, every single code back, and then they changed their rules or something like that.
Speaker 1:But what what do you think about in terms of, like, manipulation of these sweepstakes? Is that a risk at all or is it pretty standard these days?
Speaker 8:We use a we use a third party legal team who, like, runs sweepstakes professionally. I think we're relatively buttoned up. You we have the you have to be able to mail in. You've got some free entries on the site. Sure.
Speaker 8:We we we are able to see some people trying to game it.
Speaker 1:Oh, yeah.
Speaker 8:We had this like yeah. Yeah. Yeah. So we were able to take care of that. Okay.
Speaker 8:But otherwise, it's very above board. We're not doing any like sort of McDonald's monopoly sort of schemes over here.
Speaker 1:Yeah. Yeah. You can get in trouble if you're if you're running unregistered lottery. You wanna stay away from that. Run run a clean game.
Speaker 1:Clean
Speaker 2:Last question I have because you're talking about a bunch of these different creators you're working with. You guys have your MKBHD kind of, like, core partnership. I grew up at a time like following the surf industry where every surf apparel company had like, you know, their core ambassadors and they had other people on the team and then they had the people that were trying to like, you know, you know, just more like development side. Is there a world in the future where Ridge has effectively you've sponsor a ton of creators, so you're just like spending money across all these different channels. But is there a world where Ridge has like a proper team of ambassadors that are just sort of rep like in a more serious way, like representing Ridge within industries helping with product development?
Speaker 2:Or is it the kind of thing that makes sense to do with like one tent pole kind of creator and then everyone else is just more relationship?
Speaker 8:Yeah. I think it's a combination of both. I mean, we went from kind of the spray and pray approach. We sponsored thousands of creators and billions of views. And now, our goal is to just do deeper integrations with with creators over longer periods of time.
Speaker 8:Marquez being like Marquez being the flagship example of that, but I would love to assemble like an Avengers team around him of of cool creators and celebrities.
Speaker 1:It's very cool. Well, reach out if you're that creator.
Speaker 2:Where can people, find your podcast?
Speaker 8:Oh, marketing operators. You can find it anywhere you listen to podcasts.
Speaker 1:There you go.
Speaker 8:Only weekly so that we're not putting out that much content. But, we're we're but well monetized. You guys would appreciate that.
Speaker 1:Yeah. Yeah. You do have ads, which is great. We would Love see probably wouldn't have you on the show if you didn't have some ads.
Speaker 2:Are you guys gonna be sponsoring the All In Summit? I know you are you are you been running that back this year? That's the one plus ad, so it's it's a great place to be. But but, yeah, TBD still?
Speaker 8:TBD. Yeah. We got a sweet deal on it last year. If that comes about again, maybe.
Speaker 2:Cool. Well, good luck. Good luck. Thanks for coming on. Thanks for coming on, Connor.
Speaker 1:We'll talk to soon. Bye. So what's that?
Speaker 2:An absolute dog.
Speaker 1:An absolute dog. What's the what's the word on Sean? Is he joining or should we move on to some timeline?
Speaker 2:I mean, we can start some timeline and then when he's in the waiting room.
Speaker 1:I I like timeline.
Speaker 2:He's coming in right now. He's coming
Speaker 1:in hot. We got Sean Frank from the Ridge Wallet back to back Ridge Wallet guy.
Speaker 2:There he is. Welcome
Speaker 1:to the show, Sean.
Speaker 2:Look at that microphone. That thing is serious. Do you podcast?
Speaker 5:Dude, I am so happy to be in the capital of capital, the fortress of finance. This is this is my my Zen garden. I do podcasts. I just wanna say, I was listening before I jumped on. That last guest you had does not work at Rich Wallet.
Speaker 1:I've never seen him before.
Speaker 2:Just been LARPing. He's got the LinkedIn set up. He's got all the wallets, everyone.
Speaker 1:He actually works for a rival wallet company, and he's been selling secrets on the side.
Speaker 2:Yeah. There there's an alt I mean, Ridge
Speaker 1:Are you worried about spying at Ridge?
Speaker 2:No. Ridge has had so many knockoffs over the years and from all different parts of the world. There's an alternate reality where like ten years ago like Sean and Connor like you know have a blood feud and then like Connor goes and works at one wallet company and Sean does the other and then like they're just always like the same because they're like you guys are like yin and yang in terms of, like, I think, like, being good
Speaker 1:at Operations.
Speaker 2:You know? But, anyways, great to have you on the show, Sean. How's your week going?
Speaker 5:I'm good, man. Yeah. Connor is my rippling. So I'm dealing this scenario, and we're gonna I'm gonna steal all the secrets.
Speaker 2:Okay. That's great. The rippling to my deal.
Speaker 1:Fantastic. We we we wanna talk about Yeah.
Speaker 2:I I wanted to just have you guys both on to just get a a high level read on what's happening in ecommerce. It certainly hasn't been a a easy start to the year with the tariffs. I I mean, technology companies are are in a pretty good spot if you're just selling SaaS, worried less about the impacts of of of of all these different sort of policy decisions. You know, talk to us about how the start of the year has gone. We had you on this you were one of our very first guests, but I feel like a lot has transpired between then and now.
Speaker 5:Totally, man. And I changed my mic. So hopefully this sounds better for
Speaker 1:you guys. Way better. Thank you. Dude,
Speaker 5:I'm reading chat on the on the right hand side. So I'm here to support. Dude, the biggest thing about tariffs is just the uncertainty and the rollout. So, like, we're friends with a lot of 9 figure brands, and everyone would like to bring stuff to America. Right?
Speaker 5:But that is a that is a two to four year manufacturing timeline. Right? Ridge has been working on our US factory and our our capacity for, like, two and a half years, and I can currently make 20,000 units a month. Okay? I sell 50,000 units a month.
Speaker 5:Right? And in peak, I sell way, way, way more than that. So it is just I've not been able to keep up with demand. And maybe in four years, I could get there. But with all of the whiplashing on tariffs, it's very hard to know what to invest in.
Speaker 5:And what that leads to is just me hoarding capital right now. Like, I'm not gonna do distributions. I'm not gonna hire anybody. And it's really this freeze because I don't know where the the puck's going. Right?
Speaker 5:We had we had tariffs come in, tariffs come out. Tariffs come in, tariffs come out. Section three twenty one was stopped, and now it's back on. It's just very hard to make a decision when you don't know what's going to happen in two weeks.
Speaker 2:What are you seeing situations with brands that have less of a, you know, that that have less of a sort of fortress balance sheet where there's, like, actually, you know, like, I imagine there's certain brands that are kind of running the calculus of, like, are we even gonna make it to q four with how this is going? What's kind of, like, the chatter in the industry?
Speaker 5:Yeah. So there's been, like, five years of bullshit when it comes to D2C. Right? Like, you know, there was COVID, which was really good for some people, horrible for some people. Famously, Away sales dropped 90% because people stopped traveling.
Speaker 5:Makes sense. Right? And then you have tariffs. It's just the latest flavor in this. There was iOS 14 issues and everything else.
Speaker 5:Was the reason is the wait
Speaker 1:credit cards going up. It's going to hurt consumers.
Speaker 5:Totally, dude. Yeah. I mean, you're talking about credit cards. Brax very famously was an e commerce credit card provider and they shut down all their credit cards when COVID happened. Oh, wow.
Speaker 5:That's why I'm so glad you guys work with Ramp, the better of the credit card providers. So what we're seeing right now is a wave of shutdowns in smaller sub $10,000,000 brands. Right? Like, that's always been a trend, but it's really ramped up the past, like, three to yeah. Probably the past three months since Trump got elected because they just can't absorb tariff costs.
Speaker 5:Like, things were on the water to be brought into America, and then costs went up 25%, forty % for these people. And when you add that in with everything that's happened, iOS changes, advertising changes, consumer being softer, There's just a wave of bankruptcies and shutdowns happening. So if you haven't secured financing, if you don't have a solid balance sheet, it's just a really, really hard time to be trying to sell stuff on the internet.
Speaker 2:Talk about solo brands. They're currently being priced at $12,000,000 on 450,000,000 of revenue. They're not profitable. I have to imagine this is a tariff thing, but, like, we were we were trying to figure out what was going on with the company.
Speaker 1:Did you track this at all? It's like I the the numbers just don't make sense to me whatsoever.
Speaker 2:Sean is like Sean's got his finger on the buy button. He's like, I can just buy the, like, the every share
Speaker 1:on the because they also own Chubbies. It's like a pretty popular men's fashion brand too, and they're doing like a hundred million in sales over there too.
Speaker 5:So I know Solo so intimately. I know Spencer, the original founder. I know Bertram Capital, the private equity group that bought them. I know Summit, the private equity group that bought them from the private equity group to take them They had a roll up strategy. They overpaid for some assets.
Speaker 5:And they've they've depreciated all of them except for two. So they have Solo, which makes the stoves, and they have Chubby's. And they used to not break out revenue. Last quarter was the last quarter they actually broke their revenue out. And what you have is Chubby does roughly $100,000,000 in sales and is EBITDA positive.
Speaker 5:And then you have Solo, which is a shrinking business and shrinking 25% year over year, losing $50,000,000 or whatever. And the reason why the market kept so low is they have so much debt on that business. I think it's over $250,000,000 in debt. For a shrinking business, they'll lose this money. They will sell chubbies.
Speaker 5:When you break out the finances like that, they're looking for someone to buy that asset to pay down some of this debt. And then they're just a take private. It is just somebody will swoop in. Does it happen before or after bankruptcy? That's the whole challenge, right?
Speaker 1:Yep. Yeah. You're not just going to pick that up for $12,000,000 You're going to pick up $250,000,000 of debt with it potentially, and that's a big decision. You've to be ready to do something with that, right? Refinance that or pay that down somehow, right?
Speaker 5:Yeah, yeah. I mean, look, the obvious suitor is YETI, but there's a bunch of outdoor roll ups. I mean, it's one side that's somebody, it makes sense to own that asset, but it's really, really hard to be soloist of right now.
Speaker 1:Yeah, it's rough. Well, good luck to Do
Speaker 2:you believe there's potentially another ad platform on their horizons that will save the industry, swoop in, and provide cheap ads that allow everybody to scale. Everyone in deed
Speaker 1:is just one more ad platform. Yeah. Yeah. Just one more.
Speaker 2:Yeah. I mean I mean, we've you know, you guys have talked about this a bunch. Right? Ridge benefited massively from the rise of just meta platforms and and being able to buy cheap ads and scale very profitably. But what's your conviction level?
Speaker 2:Are are LLMs gonna LLM ad networks going to be a thing, or are you are you short there?
Speaker 5:Well, they will find a way to monetize. Right? I mean, Google is the most profitable best business on earth, $80,000,000,000 in in fucking revenue or whatever. It's all straight profit. And it's all just people searching and then getting in the middle of that.
Speaker 5:So, you know, if you're trash EBT or Perplexity, you could probably build an amazing, you know, sales business on top of that. But, dude, this year, Meta Meta's working. Like, last year, Meta did not work, and we are giving so much of our money to the the big blue beast. And we're spending more today than we spent in December. Right?
Speaker 5:It's just because I think they're taking AI seriously, and they're really trying to bring AI across their ad, like, their ad networks. They do have threads. That's new ad space. Right? You know, Twitter is looking to highly monetize its ad space.
Speaker 5:I think their daily users are going up. Famously, there's Reddit, which has never been able to monetize well. The revenue per user is dog shit. So all we're hoping for is that AI helps people bring the power of the Facebook Ads engine to more places.
Speaker 1:Sure.
Speaker 5:We think app AppLovin did that in q four, but just more ad space to be more higher powered. And, dude, unfortunately, if we're in a recessionary environment, the first thing that gets cut is marketing budgets, and then Ridge Wallet swoops in to buy those cheap CPMs. So podcasts crushing it right now. It makes so much sense why Ramp, Bezel, Wonder, Public dot com, Adquick, Eight Sleep are sponsoring this podcast because podcast that's for us crushing right now.
Speaker 2:Yeah. I love it. What what's your take on I need to redownload threads. I deleted it because I'm just so loyal to the everything app. But do you are you using it at all yourself?
Speaker 2:Do you think it do you do you think it will be like if anybody could make the sort of, like, text heavy format, the sort of conversational format be have good ad units, it would be meta platforms. Are you guys spending like, can you spend on threads yet? Are you getting invited to spend on it soon?
Speaker 5:So I don't use threads. I'm trying to spend less time on the Internet, dude, trying to touch some of that that delicious sunshine that's been hitting my face lately. But, dude, never bet against Zuck. You give him digit you give him pixels, he will monetize them. So if he's got users, he's gonna monetize it.
Speaker 5:The rumor is the threads ads are coming in q four of this year.
Speaker 8:Mhmm.
Speaker 5:And with that, they're also gonna better monetize messaging and WhatsApp in general. So, you know, WhatsApp still has a hundred million users in America. Like, if you're not logged in every day using it, a lot of people are. And they do have, you know, just DMs and everything that hasn't been monetized. So Snapchat lost messaging ads last q '4.
Speaker 5:Whatever Snapchat does, Meta will just scoop up and do it too. We got more ad units coming guys.
Speaker 2:You long Love it. Are you long or short Apple ever doing an ad platform? You'd think they they sort of like handicapped the American online ad industry. It would have been nice if they had offered up like, know, a stick and a carrot at the same time. Is there any, you know, Apple's entering this era of just like, you know, up toll road operations, squeezing margin everywhere, getting these sort of incremental fees.
Speaker 2:Do you see a world where
Speaker 1:They do app store ads.
Speaker 2:Yeah. App stores
Speaker 1:are obvious, but But not much for direct to consumer companies, if
Speaker 2:I'm So
Speaker 5:my wife was interviewing for a role at Apple years ago and she when you interview at Apple, they make you do these presentations and her presentation was the advertising opportunity at Apple and you know, the executives there were very much like, we're never gonna do that. Like, that is so so against who we are. But then, you know, what we've seen in the past two years is that, no, they're actually totally it'll it'll be it'll be an ad exchange. Right? So I don't think they'll actually monetize any of their ad space.
Speaker 5:They have the App Store. Right? They have Apple TV. They have iMessage as a social network, I think. We all spend way more time on iMessage than anything else.
Speaker 5:They won't monetize it, but they will sell your data. And that was the whole iOS 14 breakdown, right, is that Apple wanted to they wanted revenue from Facebook in exchange for that data. And Facebook said no, so they shut it down. So it they will get a they will get probably $40,000,000,000 in the next two years from just ad data exchange, I think. That's I
Speaker 1:mean, have phone number. They should
Speaker 2:I'm curious.
Speaker 1:AI tele telemarketers. Like, they have your phone number, so you pick up your iPhone. It's just ringing, and it's just an ad on the phone.
Speaker 2:Hi, this is Sean Frank here. Was just calling to see if you want You're interested
Speaker 1:in your Ridge Wallet.
Speaker 2:And it's just AI Sean. Last last question. Are the are the various platforms treating you nicely enough? Are they taking you out to dinner as frequently as they should? Do you feel like you have do you do you feel like they're they're, you know, you you you're a huge customer for them and client.
Speaker 1:But didn't ramp send you like a huge like tombstone for how much ad you've spent? Has has meta sent you anything?
Speaker 5:No, dude. I mean, I I think I'm at, you know, over a quarter billion dollars in Meta spend. So I'm I'm waiting to get to a billion and then maybe maybe they'll get
Speaker 1:the steak dinner.
Speaker 5:You know? Maybe maybe just a cameo for Mark Zuckerberg being like, hey, man. I appreciate all the work you're doing. But, no, dude. Ram's a great partner.
Speaker 5:I got a little tombstone from him. I love it. You know, Snapchat is the in terms of, like, understanding and client relations, I think they're best in class. Dude, Evan Spiegel, super involved in the ad platform. I've had lunch and breakfast with him probably three or four different times.
Speaker 5:Wow. And he's just like, how can we get these ads to work? That's all he cares about. That's great. Yeah, dude.
Speaker 5:Love all of the network. Also, Shopify is the best partner out there.
Speaker 1:That's amazing. One one breaking news story that I wanna get your take on. DoorDash and Klarna signed a deal where customers can choose to pay for food deliveries in interest free installments. There's a lot of chatter on the timeline about this. I know Ridge Wallet has Afterpay installed, Shopify integration.
Speaker 1:What's your take on, paying with your paying for your Chipotle burrito over several years?
Speaker 5:Well, so the previous guest you had on, a good friend of mine, Connor, we lived together. And when when these things rolled out, he was he was so bullish. He's like, dude, I can smooth out my my my burn. He's like, everything should be financed, interest free, everything. Take advantage of the the ZERP environment.
Speaker 5:Surprisingly, we see a large percentage of our purchases go through Affirm. It's probably 15% of all purchases running through So they do do serious revenue. There is needs from consumers. And I think people it's probably more bearish for the credit card industry than anything else, like alternative merchant provided financing eating high interest rate credit cards. Who pays for it in that transaction?
Speaker 5:Affirm takes a higher payment processing rate than Visa does. So, like, that's how they're actually funding this whole exercise. Do I think people should should be putting Chipotle burritos on layaway? I do not think that's a good purchase. So that makes me very, very scared.
Speaker 5:The names of the group
Speaker 2:me, it's such a contradiction because, like, leverage is awesome and then burritos are awesome. Yep. Like, you think you putting them together would would be, you know, this sort of 10 x experience, but it feels very dark.
Speaker 1:Risky. And What about, like, conversion rate effects for Ridge? When you rolled do do you remember when you rolled that out? Was there actually a lift in in conversion or revenue that you could see, or is it just something you kind of feel builds like a better customer experience over time when you roll out something like Afterpay?
Speaker 5:So the reason why we did it is because, you know, at one point, not that long ago, 2020, '20 '20 '1, e commerce was the hottest industry. Everyone was rushing into it. The glory days, all of those providers would pay you money to actually add it to the So I think it was either Klarna or Affirm gave us $50,000 to have it as an option on that.
Speaker 1:Wow, that's awesome. And also, mean, Ridge's product portfolio has grown a lot. You could easily wind up checking out with the whole Christmas gifts of luggage and wallets for a lot of people wind up in several thousands. And at that point, yeah, doing some Yeah. Extra pay makes a lot of sense.
Speaker 5:Yeah. Yeah. I mean, if everyone listening is probably billionaires, multi billionaires. But if you need to get gifts for your staff, ridge.com/Sean. Use code Sean for 10% off.
Speaker 5:There you go, guys.
Speaker 2:Fantastic. Sean, I love Good luck in the trenches. And hopefully, there's not news in the next week that is so dramatic that it requires us to call our ecommerce correspondent. But if there is, expect to call.
Speaker 5:You know what? I I would like to go and raise his payroll as the ecommerce correspondent. I'll get a whole outfit, and I'll just I'll be out there in the warehouses telling you what's going down. So I appreciate you guys. Goodbye.
Speaker 5:Yeah.
Speaker 1:Well, I don't know about payroll. I mean, we're trying to be the most profitable podcast here, but we'd love to have you on. Yeah. We'll do it
Speaker 2:if you quit. We'll do it if you if you quit your show.
Speaker 5:No. Sorry.
Speaker 2:If we can buy if we can acquire if we can acquire your show, we can we can work out a deal. You don't have to do all you gotta do is turn on all you gotta do is turn on Zoom.
Speaker 1:Yeah. There you
Speaker 5:I was I was gonna pay you guys.
Speaker 1:Oh, now now we're talking. Okay. Now Oh, now we're we're doing deals.
Speaker 2:The Klarna firm strategy pay every time. Great to see you, Sean.
Speaker 1:Great to see you. Bye.
Speaker 2:Our our new studio, if it goes where we think it's gonna go, will be much closer to Sean.
Speaker 1:Oh, fantastic. So Just
Speaker 2:pop can just pop by. That'd be great. Drop in.
Speaker 1:Well, should we finish up with some timeline, wrap it up, and get out of here? Because we actually gotta see some new studios in twenty minutes and I think they're about forty minutes away. So we are fully screwed. Fantastic. Anyway, there's some new polymarket.
Speaker 1:Very exciting. Will Jesus Christ return this year? What do you think, Jordy? Is that 3% chance? Are you long?
Speaker 1:Are you short on the return of Jesus Christ?
Speaker 2:I I I don't feel ready to to make a bet. Although, I would like to talk to the to the three percent that are going long and just try to see if we could get some some insights.
Speaker 1:Yeah. I bet the comments
Speaker 2:said we don't talk about politics, but we never said Religion. We wouldn't talk about religion.
Speaker 1:Fantastic. Anyway, let's move on to, LinkedIn has discovered loot boxes. Kevin Kwok shares that, jobs are being recommended that are just some from stealth startups. Startups. So you apply to the company.
Speaker 8:Apply.
Speaker 1:And and there's two there's two jobs that look identical. It's chief operating officer at a stealth startup and chief operating officer at another stealth startup. And so you you you click, you apply, you might wind up at the next deck of corn. You might wind up at something that's bankrupt in six months. But it's a it's a lot of fun.
Speaker 2:Speaking of unknown stealth startups, I have a portfolio company Stealth Robotics Company. Oh.
Speaker 1:Is that the name of the company Stealth Robotics? Because that's good name.
Speaker 2:That'd be a good name.
Speaker 1:I mean, my
Speaker 2:name is. But it's not
Speaker 1:They're coming out of Stealth.
Speaker 2:They're going to be coming out of Stealth later this year, but they are absolutely ripping and in a very interesting category. And that's really all I can say, but they're hiring for a ton of different engineering roles. And if you are in the market to join a robotics company or you wanna learn more DM me on X. I will connect you to, the team.
Speaker 1:Well, we got some quick hits because there is more news that I wanna make sure we cover because we'll be going deeper on these stories next week. First off, we didn't get a chance to talk to Sean about this, but Sequoia Sequoia Capital has stepped in and backed Elon Musk in his Delaware battle. A comment from Sequoia, rare. They say Delaware law should not subject founders to heightened scrutiny for being an asset and benefiting to all and benefit to all stockholders. And so if you haven't left already, leave Delaware is the is the the the comment from the account, leave Delaware.
Speaker 1:And so I wanna get I wanna go deeper here. I wanna know exactly what it takes to leave Delaware, how many companies are actually moving, where they're moving to, the Texas Stock Exchange, all these different things that are going on.
Speaker 5:Isn't it?
Speaker 1:Isn't it? I wanna know what's going on.
Speaker 2:Something crazy, like, half of Delaware's, like, tax receipts are from
Speaker 1:I think it's more than half. I think they I think the the state makes like all of their money
Speaker 2:So I wanna see and and didn't this I'm pretty sure that the governor was like going on Yeah. Television and kind of mocking. So anyways, they gotta they gotta really turn this around
Speaker 1:We see.
Speaker 2:Unless they wanna be relegated to obscurity. I always wanted the vacation in Delaware, the home the home of the c corp. Oh, okay. No. Because I I just love business and I respect the, you know Yeah.
Speaker 1:They're gonna if they're gonna have a hall of fame of business, that's where it
Speaker 2:should The biblical home. Yeah. Yeah. The the hall
Speaker 1:It's a of this of the corporation. The
Speaker 2:business hall of fame.
Speaker 1:In Delaware. We should build it. Let's go to Shiel Monat. He says Exit Mania is upon us. $2,600,000,000 exit for NEXT Exit Mania.
Speaker 1:Exit Mania coming soon. Like WrestleMania or or
Speaker 2:Yeah. We gotta have Shiel on to talk
Speaker 1:action mania. So Next Insurance, the rumor is that it was eight x revenue, 14 and a half x $20.24 gross profit. They got scooped up by Munich Re for 2,600,000,000.0. Congrats to them. Little size gone moment for the folks over at Next Insurance.
Speaker 1:You'll love to see it. Lots of M and A stuff going on. Let's also move to more news about Apple. We've been talking about the Apple intelligence delay on repeat for the last few weeks. Well, now they're getting sued.
Speaker 1:They're facing a false advertising lawsuit over Apple Intelligence delay.
Speaker 2:Yeah. You never know how much to read. This is a pretty wild ad. You never know how much to read into this kind of lawsuit because, they'll you can just sue anyone or anything for anything at any time. So this could just be Yeah.
Speaker 2:Money I mean, it
Speaker 1:could literally be, like
Speaker 2:I don't know
Speaker 1:how many action settlement where everyone gets 75ยข, but it's bad press. And you know Apple hates bad press so they're shuffling executives around. We covered that yesterday. And I'm sure the folks at Apple are thinking about how to handle this crisis. They probably need to call Lulu who will be on the show on Monday.
Speaker 1:Anyway, Gary Tan, he says this is the golden age of building. He shares some news from CNBC. Why combinator startups are the fastest growing, most profitable in fund history because of AI.
Speaker 2:Very interesting. Did CNBC get the scoop from us?
Speaker 1:Probably from us.
Speaker 2:When Gary was on the They
Speaker 1:quoted us. But,
Speaker 2:you know Yeah. For attribution. We our scoop.
Speaker 1:Attribution required on everything we say. Although, who knows if we will give you attribution when we cover you. We'll try. We'll try. We'll do our best.
Speaker 2:We'll we'll at least do a sponsor acknowledgment.
Speaker 1:Yes. Definitely. Definitely. Yeah. Who who's advertising on this CNBC landing page?
Speaker 1:We'll we'll we'll we'll shout
Speaker 2:them
Speaker 1:out. Anyway We got
Speaker 2:some great math by Christian Kyle.
Speaker 1:This goes viral every time he posts it. It's insane.
Speaker 2:So great.
Speaker 1:He just knows how to play the hits so well.
Speaker 2:My three month old son is now twice as big as the day as when he was born. He's on track to weigh seven and a half trillion pounds by age 10. Great. And it's awesome that this is definitely this is the first time his son has been on TBPN but I'm sure he's gonna be an absolute Chad Hard Tech founder someday. Yes.
Speaker 2:And we'll be interviewing him by the time he's, you know, at least a teenager.
Speaker 1:So he posted this once on X. It got a hundred thousand likes easily. He just posted it again, got another hundred thousand likes. It's made its way over to Reddit, got become the front page of Reddit over there. People love math jokes like this and exponentials.
Speaker 1:Very fun. What else what else should we cover from the timeline? Saquon Barkley is in Andoril now. That's exciting. He says thank you to Paul
Speaker 2:Hit the Gong for that.
Speaker 1:And the entire Andoril team for having me out. Couldn't be prouder to be an investor.
Speaker 2:I mean I've seen a
Speaker 1:lot of people wore Eagles gear at Anderol headquarters that day. That's a lot of fun.
Speaker 2:Saquon, pull up the Founders Fund portfolio page and then just DM every single CEO. Yeah. Because if you look at Founders Fund fund performance, Arthur Rock leaked it. And he was quote quoting Harry Stebbings who earlier this month says, I've never seen such institutional demand for fund than the current demand for Founders fund growth fund. And the reason for that is they are putting up incredible numbers.
Speaker 2:And I will say this because John
Speaker 1:Can't comment.
Speaker 2:Can't comment but I can comment. This is the kind of performance that you're pleased when it's leaked.
Speaker 1:Inspiring to the whole community.
Speaker 2:Yeah. So Saquon, go hit up the FF portfolio. Get in however you can. We got a post from Jason Levin. We'll close it off here.
Speaker 2:Let's do it. Jason says, when TechCrunch gets acquired by a PE firm to be chopped up for parts
Speaker 1:This is a very creepy deep fake. It's pretty good.
Speaker 2:Is that?
Speaker 1:There's a little bit of me in there.
Speaker 2:Ant, is that?
Speaker 1:It's from The Shining. Here's Oh, you. It's me as Jack Nicholson in The Shining breaking through the wall with an axe because he's gone insane. Think that's the story of The Shining.
Speaker 2:Well, yeah. We love private equity.
Speaker 1:I see.
Speaker 2:And we love
Speaker 1:Compare it on the on the street.
Speaker 2:We love private equity. We love when companies get bought by private equity.
Speaker 1:Yeah. Very appropriate.
Speaker 2:Especially when they're potentially, you know, competing for attention measures.
Speaker 1:And, I mean, if you're the private equity firm that bought it, we have a genius idea to turn it around. We've said it before, turn it into a lifestyle magazine about skiing. That's how you get the capital allocators back on board.
Speaker 2:And that's a great way to leave it. We should we should have the new We
Speaker 1:should go skiing right now.
Speaker 2:We should go skiing with the acquirer and break down the The
Speaker 1:plan to turn TechCrunch
Speaker 2:on. Thank you for tuning in today. It is a pleasure to do the show. We're pretty bummed. It's the weekend.
Speaker 1:It's not normally, one hours and we'll be back. Twenty one hours. And that's what I think. Just twenty one hours. And now it's, like, almost seventy two hours.
Speaker 1:It's Yeah. Sixty eight hours, six seventy hours.
Speaker 2:We'll just be brooding.
Speaker 1:It's gonna be rough. But we'll get through it, folks. The timeline's always there. We'll still be posting. We'll be posting clips.
Speaker 1:Follow us on X. Review us on Apple and Spotify, and enjoy your weekend.
Speaker 2:Thank you.
Speaker 1:Thank you.