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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
You're watching TVPN. Today is Tuesday, 09/02/2025. We are live from the TVPN UltraDome, the temple of technology, the fortress of finance, the capital of capital. Hello to chat. Snortgage now.
Speaker 1:There are so many people chatting right now. Thank you for being here.
Speaker 2:For taking yesterday off. Yeah. Wasn't our choice.
Speaker 1:Brutal. Brutal. But thank you for being here on Tuesday. We are happy to hang out with you.
Speaker 2:It's so good to
Speaker 1:be We have a packed show. Tons of stories, tons of posts, tons of news, tons of guests, tons of everything.
Speaker 2:We're newsmaxing.
Speaker 1:PM. We are newsmaxing. And we are kicking it off with a debate that me and Jordy got into earlier today and was burning up the timeline over the weekend. We'll kick it off with this post from. Chat, is this true?
Speaker 1:I'm hearing scales. Alexander Wang is already out the door. Swick says, please tell me this is a joke.
Speaker 2:I mean, this was totally fake news.
Speaker 1:Shlom says, seems like you saw this and misread. Yes. So this came from a TechCrunch article. In the TechCrunch article, said, Scoop, a scale executive, Alexander Wang, brought over to help run MSL, has departed Meta after just two months. And depending on how you read that, where you put the commas, very different ratings.
Speaker 1:Yep. So a scale executive, Alexander Wang. He was brought over to help run MSL. He has departed Meta after just two months. Or it could be a scale executive that Alexander Wang brought over to help him run MSL.
Speaker 1:He's left. Who knows? We'll find out. Well, the news is that it's not Alexander Wang that left. It's someone who is on the team.
Speaker 2:A former executive.
Speaker 1:Former executive.
Speaker 2:Which is very normal.
Speaker 1:Yes. Yeah. I mean, they brought over yeah. Yeah.
Speaker 2:He did not.
Speaker 1:Also, it's like, is was it an acquisition? Was it an acquihire? I was going back and forth with the team about this earlier today. Like, how do we even characterize it? It's one of those zombie deals.
Speaker 1:I just call it a trade deal.
Speaker 2:One thing we know, TechCrunch loves spin. They like to spin Spin. Non stories. They like to put things in the spin zone. Yes.
Speaker 2:We put things in the true zone. They put things in the spin zone.
Speaker 1:Yeah. Yeah. Yeah. Mean, there was there there was one guy who
Speaker 2:Remember, I mean Yeah. For anybody that missed it, we had Aravind on from Perplexity. Yeah. Yeah. Yeah.
Speaker 2:And he made an offhand comment about like ads and browsers. Yeah. And then TechCrunch ran a story that was like, Perplexity will put ads in its browser. And he was like, wait, like
Speaker 1:That's not what we
Speaker 2:wide ranging conversation. He said like, that's helpful. Yeah. Was a hypothetical. So
Speaker 1:Yeah. We were talking about the nature of advertising and AI and stuff. Anyway, yeah. I mean, there was one guy who clearly, like, was working at scale, got, like, zombie aqua hired, went over to MSL, and then, wanted to start a company and was probably already thinking about starting a company.
Speaker 2:He made the most dramatic post.
Speaker 1:And he made it made it a super dramatic post.
Speaker 2:But, yeah. He made himself the main character.
Speaker 1:Wait. Wait. You think it was his fault? I thought it was other people. I thought people were kinda putting that on him.
Speaker 2:Oh, I I just thought the way that he worded it was like, yeah. I I had the opportunity to be basically running it around here, and I decided to take my talents somewhere else.
Speaker 1:Yeah. There's a lot of there's a lot of this going on. People are people are, you know, spinning narratives left and right, left and right. Anyway, let me tell you about ramp.com. Time is money saved both.
Speaker 1:Easy use corporate cards, bill payments, accounting, and a whole lot more all in one place. And you knew you were gonna hit the eagle. I was very excited to hear the eagle. It's been too long. So the cracks are forming in Meta's partnership with Scale AI says TechCrunch.
Speaker 1:It's only been since it's only been since June that Meta invested 14,300,000,000.0 in the data labeling vendor software.
Speaker 2:Invested.
Speaker 1:Yeah. Invested. So it's not an acquisition. It's not an echo hire. It's trades.
Speaker 1:It's basically a trade deal. That's how I think about it. 14,300,000,000.0 for less than half the business equity, a big dividend 49%. Just wanted Some of the
Speaker 2:percent was a nice nice number.
Speaker 1:Yeah. They just pulled it out of the hat. Random. It's random. It's just random.
Speaker 1:And so several of the top executives left scale to go run Meta Super Intelligence Labs. That's MSL. But says TechCrunch, the relationship between the two companies is already showing signs of fraying. At least one of the executives was getting brought over to help run MSL. Scale AI's former senior vice president of Gen AI product and operations, Ruben Mayer, has departed Meta after just two months with the company, two people familiar with the matter, told TechCrunch.
Speaker 1:Mayer spent roughly five years with Scale AI across two stints in his short time at Meta, according to these sources. Mayer oversaw AI data operations teams but wasn't part of the company's TBD Labs, the core unit with InMeta tasked with building AI super intelligence where top You think
Speaker 2:they made MSL and TBD and like the the
Speaker 1:Just to confuse TechCrunch reporters.
Speaker 2:Like Just to confuse
Speaker 1:Yes.
Speaker 2:Yes. Journalists.
Speaker 1:Yeah. Yeah. It's it's entirely the 40 chest that's going on. And so after this after this article was published, Mayer reached out to TechCrunch and was like, hey, you got the story wrong. My job was to set up the lab with whatever was needed rather than data.
Speaker 1:And I was part of TBD Labs from day one rather than being excluded from the core AI unit. Mayer also clarified that he did not report directly to Wang and was very happy with his meta experience and was leaving for a personal matter. So
Speaker 2:So again, it's hard to read
Speaker 1:It has.
Speaker 2:Too much into this article.
Speaker 1:But the bigger the the bigger question is like like TechCrunch has their angle and then the timeline was kind of in turmoil. I feel like the timeline's always been rooting against Alex Wang. And there's a few reasons. So I wanted to go through like the bear case for just the question of like, was Meta buying Scale AI the right move? Like, did they overpay?
Speaker 1:Will we look back on this as a great deal? Because when we look back on Instagram, we're like, that's one of the greatest acquisitions of all time. WhatsApp, also a great acquisition. Very expensive at the time. Both very expensive at the time.
Speaker 1:Even Oculus. I was thinking about it, and I was like, Oculus VR, super expensive, multi billion dollar deal. And the level of headset adoption, I mean, didn't even have like a consumer product at that time. It was like dev kit still. And obviously, retention was super low.
Speaker 1:People would churn off of them. And they still do, even what, a decade later. Like, but you
Speaker 2:But it was very important to Zach.
Speaker 1:Yes. And and you and VR is a tech wave that's going to that's going to happen at some point. Yeah. Like, we know that the technology is gonna get there where
Speaker 2:gonna miss the next platform.
Speaker 1:He has his surfboard. And when that wave come, he's he's ready to surf. Did you get any surfing in this weekend?
Speaker 2:I did. I did. I did. I
Speaker 1:Describe your surfing experience. Can you do like three sixties off the back and stuff? Can you do a backflip? Can you do a backflip?
Speaker 2:No no backflips. But but I went surfing with a with a TBPN Yeah. A technology brother Okay. Steve Yeah. Founder of Clock Tower Capital.
Speaker 2:Mhmm. And he saw me he saw me do a couple airs.
Speaker 1:You could
Speaker 2:do airs. I didn't land either of them. But
Speaker 1:You were telling Speeder, like, he has to get barreled. Did you get barreled?
Speaker 2:It wasn't barrelling this weekend.
Speaker 1:It wasn't barrelling this weekend.
Speaker 2:But it was it was it was was fun. There was definitely swell. I got quite sunburned couple days in a row.
Speaker 1:It's fantastic. We should one day stream your stream your surfing endeavors and we should do it on restream. One livestream, 30 plus destinations, multi stream with audience wherever they are. People have been asking, will TVPN expand to other mediums? Will you do other things?
Speaker 1:And it's Yes. Yes. Surfing live streams. That's what And you, if you're surfing and you wanna live stream
Speaker 2:Head over to stream.
Speaker 1:There's a bunch of questions in the chat we should get to at some point. But let's keep talking about this Scalea stuff. So Zuck has a surfboard with Oculus VR. The question is, what's going on with Scale AI? Because it's not necessarily an obvious compounder where like with Instagram and WhatsApp, it's like you have this network effect.
Speaker 1:It's just gonna keep growing, keep growing, keep growing. You can grow the user base. The user base never goes down. The business never gets smaller. You just run more and more ads and it just prints prints prints.
Speaker 1:Right? Buying a growing social network that has strong product market fit, easy easy to justify at any price, basically. Scaling like
Speaker 2:Well, Elon wanted to get out at one point. Yeah.
Speaker 1:Okay. Anyway, for the most part
Speaker 2:But if you can buy it and then and then lever it up and then Yes. Merge it within a foundation Yes. Model lab.
Speaker 1:Yes. You know. So Scale AI does not have that obvious like winner take all network effect like
Speaker 2:At very real competition.
Speaker 1:Extremely real
Speaker 2:which which is was the bootstrap Bootstrap. Scale AI that was Mercure. Printing money. Mercure, which was emerging.
Speaker 1:Isn't there another one Garrett Garrett at Handshake?
Speaker 2:Handshake.
Speaker 1:Handshake.
Speaker 2:Labelbox. There's a ton of
Speaker 1:these companies.
Speaker 2:There's a bunch of players.
Speaker 1:And so the reason is because it is not a monopolistic
Speaker 2:Totally.
Speaker 1:Market by default. You might be able to make it one, but it's it's it's tough to justify. It's tough to think that, oh, yeah. It'll just continue to compound. And then also, if you're AGI pilled, you don't believe that basic data labeling tasks are gonna be done by humans in the future.
Speaker 1:Like, if you have a bunch of tasks that are like, oh, yeah, like, just, you know, what do you go to Scale AI for? Oh, RLHF this. Tell me if this is a good answer. Like, if you're AGI pill, do you think that the next version will be able to do that level of task, like, perfectly?
Speaker 2:Yeah. And the the the expectation if if Scale had stayed fully independent Yep. Would be that they would keep having to, like, bet the company on these new Yep. Sort of, like, eras.
Speaker 1:Right? And that's and that's sort of the story. I mean, Scale started as a data labeling company for self driving cars. And then eventually, that kind of hit takeoff where there was not that much more business to for Scale to do, I believe, because Waymo had gotten all of the data and Cruise had gotten the data and Tesla had gotten, like, the the the base level data. And then the RLHF boom and the LLM boom happened, and and Scale was able to move over to that.
Speaker 1:And then all of a sudden, were having their best their best years ever. And so the business was kind of like up and down very much like, oh, they have a second act. Do they have a third act? Chunky. Yeah.
Speaker 1:Very high high volatility. And so as the market shifts and more and more expert, like, as it shifts to more of these expert data collection processes, like what we see from Merkor, scale potentially becomes less and less relevant. It's not like an obvious just beneficiary of every next wave. You have to keep kind of reinventing the company. And so there's
Speaker 2:And they were at some point, they stopped working with OpenAI. Correct?
Speaker 1:Yes. Yeah. Yeah. They stopped working with OpenAI and then and then post opportunity for it seemed like Microsoft and and Mike Microsoft and Google both pulled back from working with Scale. And so, like, the core Scale business doesn't seem like it's just like endlessly compounding.
Speaker 1:So you really can't underwrite this, like, $14,300,000,000 investment purely on the basis of Scale's business, potentially.
Speaker 2:They're not trying to make money on the investment.
Speaker 1:Yeah. Maybe. Yeah. It seems like they need a mad scientist for their lab. And every other AI lab
Speaker 2:is Yeah. Mad
Speaker 1:Or a deals guy. Exactly. So OpenAI has Mark Chen. SSI has Ilia. D MIND has Demis.
Speaker 1:Anthropic has Dario. Each leader has a different shape and style, but they're all capable of rallying top AI researchers and building teams of missionaries. Alex Wang is unproven here. So if you believe that the best talent magnet wins, it seems like a bad deal. And that's kind of the bear case.
Speaker 1:Now the bull case is that, yes, meta buying Scale AI is a bit pricey, but ultimately, it was a good decision for the company. Here's why. Let's review the landscape of big tech's AI efforts. Google has DeepMind firmly on the frontier. Microsoft has GPT five, also frontier.
Speaker 1:Amazon's a bit behind, but the core business doesn't seem very threatened by LLMs. NVIDIA benefits from basically every outcome right now. Apple acts as a window into AI, probably not too threatened. Meta feels like it could benefitly benefit hugely from getting to the frontier, but it doesn't have an obvious dance partner. So what are you trying to do?
Speaker 1:You go down the list and you try and buy every company or hire every researcher you can, hence the rumors that Zuck tried to buy S. I. Tried to hire Mark Chen, etcetera, etcetera. Right? King.
Speaker 1:King. It's super high. I mean, I I we we we saw that image of, like, some Wall Street investment bankers, like, did, like, a kind of sum of the parts valuation of Google and just dMind was worth like a $150,000,000,000. Right? And so if if you're thinking like, okay, if I have my lab and it's adding all this value all over the place, like, is that worth $200,000,000,000 to my market cap?
Speaker 1:Like, absolutely. Right? Yeah. And so you try and do that. So at the top of the list, you have something like, you know, assemble a dream team.
Speaker 1:Get Ilia, Mark Chen, Demis. Get everyone. Just put the OG OpenAI team and the DeepMind team together at Meta and, like, you win. Right? But that's obviously not on the table.
Speaker 1:There's a bunch of reasons why you can't make that happen. There's economic reasons. There's interpersonal reasons. There's some ideological reasons. Yep.
Speaker 1:But Alex Wang isn't that far down the list. And so, yes, he hasn't led a real AI lab that's trained a popular big foundation model. But if you look at his trajectory, all of a sudden, it becomes I I can be a lot more optimistic it. So he's 28 years old. He's a fantastic communicator.
Speaker 1:You've seen him on on every podcast, and he clearly communicates very well about
Speaker 2:He's been on Theo Von, one of the few AI heavy hitters that's been on Theo Von, obviously.
Speaker 1:Joke, but he was on Theo Von really early. And he tells a very convincing story. And and he's actually able to communicate to like to to both insiders and outsiders, I think. He's genuinely been at the center of the AI boom for his entire career, but he wants to go bigger. He's built a great company that easily could have cash flowed hundreds of millions of dollars over time and continued to serve the training data market.
Speaker 1:But getting further into the action that's happening at the big labs was probably not in the cards if he stayed at scale. And so teaming up
Speaker 2:Yeah. People people would push back on that and say that that scale was losing real market share to Surge and other players who had a reputation for having higher quality data.
Speaker 1:Losing market share, but still, like, so many big contracts that if they just went, like like, to, like, weaker and weaker clients and just, like, held on and just had high margins, like,
Speaker 2:Built I to die.
Speaker 1:Basically. Like I I I I do think like the the like the run out the clock value on that company is definitely like hundreds of millions of dollars every year. It's just such a big market. But that's clearly not what what Alex wants to do. He's 28.
Speaker 1:He wants to go bigger. He loves being at the center of AI and wants to work on interesting, huge problems.
Speaker 2:Now, has will have does or will have more compute than pretty much
Speaker 1:Pretty much everyone. Like the latest cluster that Zuck's trying to build is is is supposed to be just a couple percent over the next biggest cluster. So he will have the biggest. And so I think that you when you look at at Alex Wang, you see someone who's been through like the Gartner hype cycle of training data. Right?
Speaker 1:It's like, wow. We are teaching cars to drive. This is incredible. Then, oh, wait. Like, they actually don't need that much more data.
Speaker 1:And then, like, oh, wait. Like, LLMs need incredible amounts of RLHF data? And then, like, oh, wait. So he's been on the up up and down. He's bit so there's a bunch of different takes here, but let me continue.
Speaker 1:So there's also the rumor that Scale AI isn't fully delivering all the data that MSL needs to train their next model, but the reporting here is a bit questionable. I don't think that the Scale acquisition was ever fully underwritten against the value of the training data business, as we discussed. So the and the AI race is so aggressive that every company is grabbing every possible resource. Not only is Meta using other data providers, they also just signed a $10,000,000,000 cloud deal with Google. Yeah.
Speaker 1:So this this idea of like, oh,
Speaker 2:like Demand is outstripping supply
Speaker 1:pretty Yeah. Oh, they did one deal with scale. That that means that they shouldn't do a deal with Merkor or they shouldn't do a deal with with Surge. Like, no. They're gonna do deals with everyone.
Speaker 2:I think all yeah. All all it says is that it was primarily an act like an acquihire.
Speaker 1:Yeah. An acquihire of the team and a bunch of the people and mostly, it's a bet on Alex Wang. And so I think that the the FUD over the departures is overstated right now. It doesn't seem like it's an exodus. They hired a ton of people.
Speaker 1:There's been rumors that like one person was thinking about leaving but then wound up staying. And then and then one person left, but they said they were, like, never really planning to stay. And then another person left, but clearly to start a company. So it doesn't seem like there's some sort of massive exodus. And basically, it just comes down to the value of developing an in house AI team that's like DeepMind.
Speaker 1:It's a that that team, if it works and if they build it out, the value of that team is immense, probably in the hundreds of billions of dollars. And so there's inevitably gonna be bumps in the road. But at the end of the day, Zuck is just betting on the most successful entrepreneur that Gen Z has produced thus far. And it seems still reasonable that even if he's not entirely a researcher, he's deals guy, you have him, and then you have Nat Friedman, who's able to who's worked with Ilia, and you have the pieces of the team to put together the right amount of researchers and engineers to actually go and and build out a frontier capability or near frontier
Speaker 2:It's an all star team.
Speaker 1:It's close to an all star team. It's not the all star team. Like, the all star team is Ilya and Demis and Mark Chen, but, like, that's not happening. It's just never gonna happen.
Speaker 2:Yep. You know why I have this out? Why? OpenAI is buying product testing startup Statsig for $1,100,000,000.
Speaker 1:Statsig?
Speaker 2:Haven't heard that name in a while.
Speaker 1:Who did Statsig?
Speaker 2:Who's Statsig, founded in 2021, builds tools to help software developers test and flag potential new features. Services have been used by employees at OpenAI, Eventbrite, SoundCloud, and other firms according to Statsig's website. Statsig raised a 100,000,000 in funding in a funding round earlier this year, valuing it at 1,100,000,000.0. So interesting. I guess they're getting just getting bought out at the last round price.
Speaker 2:As part of the acquisition, Statistics founder and CEO Vijay Raji will join OpenAI's chief technology officer of applications. He'll report to Fiji Simo, the former Instacart head who recently took over CEO of apps at OpenAI. In a statement, Seema said, Raji would help companies and developers use OpenAI's technology to build safe safe applications that empower people. So anyways, all stock acquisition. Nice nice pickup for OpenAI.
Speaker 1:And they're taking the product?
Speaker 2:They're taking the whole company.
Speaker 1:They're taking the whole company.
Speaker 2:It's a proper Rare. Acquisition.
Speaker 1:We
Speaker 2:love Very to see
Speaker 1:rare. Tyler, what's your what was your take on the on the TechCrunch FUD around MSL? What do you think?
Speaker 3:Okay. So I think first yeah. There's I think there's way too much hate on Alexander Wang on the timeline. Yeah. I think also may maybe interesting way to think about like the scale thing is
Speaker 1:like Do you think that's do you think people hate on him just because he's not an AI researcher?
Speaker 3:Yeah. I think there's some sense of it's like, oh, he's like kind of an outsider. Like, he's like has this like
Speaker 2:He's like a business he
Speaker 4:a
Speaker 2:billion dollars doing something that wasn't extremely technical. Technical. Right?
Speaker 1:Yeah. Yeah. It's labor arbitrage. Right?
Speaker 2:Yeah. Yeah. And anytime you have a young person that has massive success Yeah. People figure out a way to kind of poke holes in it.
Speaker 3:Right? Yeah. It's like people were saying like, Scale is just a wrapper on like Vietnam or Yeah. Whatever. Philippines.
Speaker 3:Philippines.
Speaker 1:Yeah. But
Speaker 2:I I think Wrappers all the way down.
Speaker 3:Like I I think a a good way to think about the Scale thing is like, maybe it's just like the people at Scale AI just like have very good taste on what is good training data. Mhmm. Like they've seen, you know, it's like, you know, driverless cars and
Speaker 1:Yeah. Like what actually works
Speaker 3:Yeah. It's like what like they have good taste on like, this is actually like good data. And then if you're a big company that has a ton of data like Meta, that's like actually very like useful. Right? Yeah.
Speaker 4:You have these people who have
Speaker 3:very good taste of like, okay. Obviously, within Meta, within like Instagram or something, there's a like a massive amount of data. Some of it
Speaker 4:is clearly useful, some of
Speaker 3:it's like not useful for training a foundation model. Yeah. Maybe it's just like that is something like that is worth a ton of money.
Speaker 2:Yeah. Yeah. And so Zac went to Alex and basically said it's time for the dragon and the elephant to be. Dragon and the elephant.
Speaker 1:That is the best quote ever. Well, who said that to who?
Speaker 2:Was She said that to Modi.
Speaker 1:Modi.
Speaker 2:Modi. Says, it is time for the dragon and the elephant to dance together.
Speaker 1:And wasn't Modi meeting with Putin? So he's like the the elephant
Speaker 2:That was
Speaker 1:and the bear and the dragon Oh.
Speaker 2:I don't know if there was another I don't know if there was
Speaker 1:The elephant and the bear and the dragon had a tea party this weekend, I think.
Speaker 2:Luke Luke Metro posted, I just know that this line is doing numbers on SF Hinge right now.
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Speaker 1:Thank you to Turbo Pupper for making this possible. The this weekend, Elon Musk revealed the master plan number four for Tesla. And in the video, Nick Cruz shares Tesla revealed a potential three row cyber SUV design in their master plan four video. This could be a true competitor to the Escalade, Range Rover, Navigator, etcetera. Would you buy a Cyber SUV?
Speaker 1:And I've been pushing for this for a long time. I actually went back and looked at the Tesla master plan number one and number two. If you go to Tesla master plans
Speaker 2:How many Em dashes did those have?
Speaker 1:I don't think those had very many. So the the the the latest we'll read through some of the Tesla master plan for the drop over the weekend. It featured 14 Em dashes. It didn't the the Em dash thing is, like, kind of a joke because as I read it, it it read like a kind of it it was a lot staler than it it had a lot more, like, press release vibes than previous Master Plans, but it didn't read as AI generated to me. It it just read as, like, corporate speak, basically, and kind of, like, high level and abstract.
Speaker 1:I actually had Chachiopadhyse summarize it. Tesla's master plan part four is a high level manifesto centered on integrating AI into the physical world via robots and autonomous transport, all powered by cleaner, smarter systems. It casts a bold vision around sustainable abundance but delivers very few concrete actionable targets or road maps, marking a departure for the more structure for from the more structured master plans of the past. And so if you go to the first Tesla Motors master plan just between you and me by Elon Musk, he wrote this in 02/2006, and it's a it's a remarkable document because at the end, he actually sums it up very well. He says, we're gonna build a sports car.
Speaker 1:We're gonna use that money to build an affordable car. We're gonna use that money to build an even more affordable car while doing above also provide zero emission electric power generation options. That's exactly what they did. They built the Roadster, and it made enough money and and generated enough attention that they were able to build the Model S, which was more affordable than a high end sports car. And then the Model S was able to finance the Model three.
Speaker 1:And then, of course, the y and the x were kind of spin offs of those platforms. And so he says, don't tell anyone. And, you know, the the ultimate goal was to go after the the Honda and the Toyota Prius and the and and those cars. And he and he was completely successful. Then it then it was ten years later, he writes the master plan part two.
Speaker 1:And so the first one the the the original master plan, create a low volume car, which will necessarily be expensive, use that money to develop a medium volume car at a lower price, use that money to create an affordable high volume car and then provide solar pale power. No kidding. This has literally been our website for ten years. And so, at the end, in short, the master plan part due is
Speaker 2:It's so crazy that you can lease a Model three for $299 a month. Have you
Speaker 1:seen how cheap some of these are? Look at the like
Speaker 2:Would you like one ChatGPT pro plan or a car?
Speaker 1:Yeah. It it is insane. But it's getting even crazier. So the Wall Street Journal has an article today about EV deals that boom before this deadline. So tax credits are are expiring for EVs.
Speaker 1:And We're gonna get
Speaker 2:naturally aspirated V12 credits before we
Speaker 1:end it. Yeah. We need V12 credits. At a Kia dealer, dealership on Denver's South Side, a steady stream of shoppers navigate around noisy renovation work in search of electric vehicles with super cheap lease deals. Guess how cheap these lease deals are.
Speaker 1:How cheap? As of last week, this Kia dealership offered to lease the small Niro EV for $40 a month before taxes. The EV six lease was being marketed for less than a $100 per month. And the 65,003 row EV nine SUV can be had for a $189 a month before taxes. Can you imagine getting a car for $40 a month?
Speaker 1:That's so ridiculously cheap.
Speaker 2:Okay.
Speaker 1:And so there's some really
Speaker 2:It's weird a bubble.
Speaker 1:It's it's not a bubble. It's like the popping of a bubble. It's like the end of a bubble. It's like they overbuilt and they made all these and no one wants them
Speaker 2:and They've given them away.
Speaker 1:They gotta give them away. But, yeah, very, very bizarre times in the in the EV market. There is a there is an interesting wrinkle that I was listening to one of the a couple of the Tesla engineers did Jay Leno's show recently, and they were talking about how the EV tax credit's going away. So you can't just take money off if you buy it. But if you get a loan, an auto loan, there is an interest tax deduction for EVs now or for American made vehicles, And Tesla's the most American made vehicle.
Speaker 1:And so you can still deduct something like, I don't know, $8.08 or $10,000 off your taxes. So there still are some incentives for Tesla. So it's not it hasn't gone away completely. But if you buy cash, it's not it's not it's not an option. Anyway, the master plan part two.
Speaker 1:Number one, create stunning solar roofs with seamless integrated battery storage. It's kind of happened, but not as major as I feel like it should have. It's still kind of early days there. Two, expand the electric vehicle product line to address all major segments. And so that obviously foreshadows the truck, But it also foreshadows the full size SUV, which I think we're teasing now.
Speaker 1:But it should also be we need a convertible. We need a minivan. Like, we need, you know, every major segment means every major segment, I I think. I don't know. What
Speaker 2:would Should make Tesla make prefabs?
Speaker 1:Prefab homes? Yeah. I don't know.
Speaker 2:I think I think I think Elon could sell homes. Maybe. I think the Elon army could get pretty into just buying a piece of land and
Speaker 1:Throwing
Speaker 2:dropping a little electric box on it.
Speaker 1:Live in the pod.
Speaker 2:Live in the pod.
Speaker 1:Potentially. Then this is where self driving comes in. Develop a self driving capability that's 10 x safer than manual via massive fleet learning. I think that's going very well. And then step four is enable your car to make money for you when you aren't using it.
Speaker 1:Isn't that crazy? 02/2016, he said that. He said, like, you buy the car and then you're gonna be able to put it in the robotaxi, like, army.
Speaker 2:Passive income.
Speaker 1:Very, very early. And then part three comes out and it's hilarious because part three switches from, like, a a like, the the the first master plan is probably, like, I don't know, like, a two page blog post. Very readable. You can just kinda cruise through it. There's one table.
Speaker 1:There's a lot of summaries. Master plan part three is a 41 page PDF with, like, a bunch of diagrams and, like, these all these crazy things. It it's so much more detailed, and it goes into, like, trucks and all these other stuff that they're trying to do. It's it's a pretty, pretty remarkable document. And then and then now he is into Tesla Part four.
Speaker 1:Part four, which is much more high level talking about sustainable artificial intelligence. As the influence and impact of AI technology increases, the mission set forth in Master Plan part four should come as no surprise. The next chapter in Tesla's story will help create a world we've only just begun to imagine and will do so at the scale we have yet to see. We are building the products and services that bring AI into the physical world. We have been working tirelessly for nearly two decades create the foundation for this technological renaissance through the development of electric vehicles, energy products and humanoid robots.
Speaker 2:We we need a polymarket on if XAI and Tesla will eventually merge.
Speaker 1:That does seem like a logical end state here. Innovation removes constraints. It's all very high level. I mean, think the the a lot of the a lot of the, like, the big reveals have kind of already happened. Like, you know, the the idea of a robotaxi fleet, the idea of autonomous or Optimus, the autonomous Does it cover humanoids?
Speaker 2:Yeah. They they
Speaker 1:Yeah. Optimus, our humanoid robot, is is changing not only the perception of labor itself, but its availability and capability. Jobs and tasks that are particularly monotonous or dangerous can now be accomplished by other means. In this way, Optimus' mission is to give people back more time to do what they love. And so he walks through a bunch of different pieces of this.
Speaker 2:You just want one thing from Optimus, which is to keep the Tesla diner open twenty four seven. You wanna
Speaker 1:see It is crazy. So we we work just a couple blocks away from the Tesla diner, and so I drive past it every And and and when I think of a diner, I think of a New York City diner that's open 24 And every day I drive by and it's closed. And it's so crazy. I mean, I guess it's like it makes sense because it's like still like early days and kind of a marketing stunt. But really, they gotta keep that thing.
Speaker 1:They gotta keep it
Speaker 2:Keep it humming.
Speaker 1:Anyway, if you're if you're designing your next mission document, do it in Figma. Think bigger, build faster. Figma helps design development teams build great products together. You can get started for free at figma.com.
Speaker 3:On the on the Tesla Downer website, it says twenty four seven.
Speaker 1:It does?
Speaker 3:Yeah. Oh. And I'm pretty sure at least the first week it was open twenty four seven.
Speaker 2:Okay. So We should go
Speaker 4:over there. Maybe
Speaker 2:could fake news. Yeah. But it also looks incredibly empty at least when we drive by.
Speaker 1:I mean, that's just LA though.
Speaker 2:That's probably
Speaker 1:the nature
Speaker 2:of the 247.
Speaker 1:His fault. If it's if it's
Speaker 2:We'll open there for breakfast tomorrow.
Speaker 1:Yeah. Maybe I'll stop by on the way at at 6AM and see if it's if it's actually open. It seems I mean, there there there are definitely people there like cleaning and stuff, so maybe it's open. But, I mean, if there are truly not that many places in Los Angeles where you can get a burger at three in the morning. Like, LA is not the city that never that never sleeps by any means.
Speaker 1:Yeah. Citadel Securities is There's a
Speaker 3:Yeah.
Speaker 2:What's up? Some interesting highlight here. So power at power bottom dad sucks quoted our post announcing Anthropic series f and says s s b f got so f ed, man. I just did the numbers quickly. SPF stake in and throw up or f not SPF.
Speaker 1:FTX's.
Speaker 2:FTX's stake would be worth just under 15,000,000,000 today. So plenty to plug that hole. So duration mismatch problem. I guess in I guess Gavin Newsom went on pivot and says he's gonna be releasing a meme coin to challenge the Trump token.
Speaker 1:Is that real? He said that? I wonder if he's like trolling or something. It feels very off brand. I don't know.
Speaker 2:You never know anymore.
Speaker 1:I haven't really been following the Gavin Newsom thing. Brandon was saying that like he's been like kind of trying to near Trump in terms of like what if Trump does something crazy, he'll try and do something else that like kinda matches the the energy.
Speaker 2:Matching the crazy energy. And it's I mean, he's doing numbers.
Speaker 1:It's a it's a bold move, Cotton.
Speaker 3:Yeah.
Speaker 1:See how it plays out.
Speaker 2:Yep. I guess Trump is was slated to do announcement at eleven
Speaker 1:Oh, yeah.
Speaker 2:What happened? 11AM Pacific. He is forty three minutes late right now, apparently. So hopefully, he can get get on to that announcement soon. Citadel Securities set to pay an average employee 2,000,000 a year.
Speaker 2:In the 2025, they did 5,700,000,000.0 of revenue, 2,600,000,000.0 in net income. They paid out 1,800,000,000.0 in comp and they have 1,800 employees. Their CEO's name is Peng Zhao. He has a PhD in statistics. So turns out being good at math is good for your income.
Speaker 1:So years at Citadel. Look at that. Quant researcher in 02/2006.
Speaker 2:There was something else about I think Hudson River Trading overall profit at Hudson River Trading was 3,000,000,000 for the first half of the year, which is higher than Citadel Securities, 2,600,000,000.0 Wow. In net income in the 2025. Wow. So they are putting up some crazy, crazy numbers.
Speaker 1:Well, Ken Griffin's on the cover of Barons this weekend. I thought it'd be fun to read through this because he actually gave some some choice quotes in here.
Speaker 2:Is this not a silly kind of a silly picture of him? Yeah. I'm not I'm not
Speaker 1:It looks pretty heroic. I think it looks good.
Speaker 4:Mean, looking up and Sort of.
Speaker 2:I mean, the angle's fine, but I'm just saying they kinda did him they did him a
Speaker 5:little bit.
Speaker 1:What about it? So the the coloring of the cheeks or something? I think it looks good.
Speaker 2:I just I don't know. I think they made him look a little bit silly.
Speaker 1:They should've given him the Gigachat filter and
Speaker 2:Yeah.
Speaker 1:Made his jawline
Speaker 2:a bit If you're gonna draw somebody, at least make them a Gigachat. Right?
Speaker 1:Yeah. I would've like to see more more shoulder definition here underneath the suit. It looks great. The most successful companies of Wall Street on Wall Street have been built by those with relentless ambition and a strong wind at their back. Decades of deregulation helped growth minded CEOs turn firms such as Morgan Stanley and Bank of America into behemoths.
Speaker 1:More recently, financial entrepreneurs have leveraged booming private markets to create the likes of Blackstone in private equity, Bridgewater in hedge funds, and Andreessen Horowitz in venture capital. Now a somewhat stealthier trend fueled by the explosive growth of technology and finance is behind a new wave of digital first powerhouses such as Interactive Brokers Group, Susquehanna International, Jane Street, and especially Citadel, a burgeoning Wall Street empire controlled by billionaire Ken Griffin. Citadel is a two headed business beast consisting of Citadel LLC, a $68,000,000,000 hedge fund operation best known for its top performing multi strategy flagship Wellington, and Citadel Securities, a sprawling market maker that facilitates and engages in the trading of stocks, derivatives, and increasingly bonds. Citadel Griffin chose the name because it denotes a place of strength and protection. Fantastic nominative determinism.
Speaker 1:If you're picking the name for your business, pick something strong like that. Yep. He says, is defining the prototype of the next gen bulge bracket firm except that salt except that Citadel isn't that bulgy with just a fraction of the employees and overhead of the traditional Wall Street firm. As of now, the boss is happy. Quote, it's it's incredibly satisfying to run one of the world's most successful hedge funds and to witness the transformative impact of civil securities on the capital markets around the world, Griffin says.
Speaker 2:Great quote.
Speaker 1:Yes. I'm proud of that. Taken separately, first hedge fund Citadel
Speaker 2:is a
Speaker 1:huge deal.
Speaker 2:This is this is how you do an interview. This is just marketing. Yeah. It is incredibly satisfying to run one of the world's most successful hedge funds and to witness the transformative impact of Citadel Securities on the capital market
Speaker 1:Do care to comment? Yes. I will take a Yes. I'll comment. The self glaisonator 2,000.
Speaker 1:Wellington, not related to Vanguard's Wellington Fund or Wellington Management, has been a superstar producing annual average returns of 19.2% net of fees since inception in 1990, nearly two times the market. And I believe so a million dollars invested in the fund is now is now worth $452,000,000 insane. The other crazy thing is that I'm pretty sure they had a 50% drawdown during the mortgage crisis. So in 2008 or 02/2007, I think they went down 50%. They went from, like, maybe, like, a $20,000,000,000 fund down to 10,000,000,000 or something like that.
Speaker 2:Ran it back.
Speaker 1:I remember one of the traders there, I because I I I interned there, and he gives the story of, like, during the during the crisis, he he was trying to, like, he was trying to, like, explain how important it is to understand how percentages work. And he was like, yeah. I walked outside, and my neighbor was like, oh, like, how's it going? He's like, oh, it's it's terrible. We're down 50% this year.
Speaker 1:And he was like, and then next year, was like walking outside. I ran into my neighbor again. He's like, like, how how's it going this year? I know last year was pretty bad. You were down 50%.
Speaker 1:And and he said, oh, well, we're doing a lot better. We're up 50% this year. Oh. And and then the neighbor's like, oh, great. So you're back to where you started.
Speaker 1:That's Unfortunately. And he was like, no. That's not how it works. And this was like his way to his way to explain to interns like the way the importance of understanding percentages or something like It was just a funny anecdote.
Speaker 2:There was surfing yesterday. My buddy pointed out this guy. He was like that this guy was absolutely shredding. Yeah. He's getting a bunch of great waves.
Speaker 2:And this my buddy pointed out. He said, that guy's lost all his LPs in o eight and just like packed it up, bought a house in Malibu, and now just runs his own just basically retired. Yeah. Runs his own money and just surfs like three times a day.
Speaker 1:Wow. That's amazing.
Speaker 2:Living a great life.
Speaker 1:Anyway, let me tell you about Vanta, automate compliance, manage risk, improve trust continuously. Vanta's trust management platform takes the manual work out of your security compliance process and replaces it with continuous automation whether you're pursuing your first framework or managing a complex program. Anyway, back to Citadel. Even though Griffin says he spends the majority of his time working on the hedge fund's investment portfolio, arguably, the hotter ticket the hotter ticket is Citadel Securities. SITSEC, as it is known, is a complex, sometimes controversial, ever evolving endeavor, which Pac Man like is on a seemingly inexorable march across the capital markets, gobbling up market share in options, equities, treasuries, and corporate bonds, and now expanding to Europe and Asia.
Speaker 1:Example, SITSEC recently bought Morgan Stanley's U. S. Equity option market maker business, leaving no major banks in the market making business. So those security now now trades 25 of all U. S.
Speaker 1:Equities, including 35% of retail flows, plus 45,000,000,000 option quotes a day, and is a top three trader in US treasuries and swaps. In total, it executes 652,000,000,000 in notional trades a day. The goal is clear. Quote, building the capital markets firm of this generation is a vision that is increasingly becoming a reality, says Citadel Securities CEO Peng Zhao, who holds a doctorate in statistics.
Speaker 2:I like how you're just casually giving an ad to Patek right
Speaker 1:here. Of course. Of course. Begin your tradition. Cheapitus.
Speaker 1:Begin your tradition. This is
Speaker 2:a very By the way, Trump is currently live
Speaker 1:Oh, yeah?
Speaker 2:On Fox News.
Speaker 1:Yeah. What's And
Speaker 2:he's he's looking good. So I am happy to see our president doing well.
Speaker 1:Was he what is he announcing?
Speaker 2:I've got it muted right now. Somebody else is Watching?
Speaker 3:Moving the the space headquarters.
Speaker 2:Yeah. The big announcement is they're moving Where is the Space Command.
Speaker 1:Where where
Speaker 3:I think it was in Colorado moving to Alabama. Wow.
Speaker 2:I'm I'm I'm pretty bummed he didn't I'm I'm pretty bummed he didn't like rip the mean, the speech isn't over so hopefully he still rips the the the collared the shirt off and has a Superman.
Speaker 1:Tyler, does does anything ever happen?
Speaker 3:Nothing ever happens, bro. I I was pretty sure that he had passed away.
Speaker 1:You thought he died? You thought he was dead?
Speaker 3:Nothing ever happens.
Speaker 1:We need we need a gong for when nothing happens. We need something. We need some like activity that we can do.
Speaker 2:It's a gong that is like so reinforced that it makes no sound.
Speaker 1:Oh, yeah. That's good. That's good. Just a cement block.
Speaker 2:Yes. With a gong. Looks like a gong.
Speaker 1:Looks like a gong, but it's stone. So it makes no sound. It is a wah wah wah. Hear the wah wah sound. Nothing nothing happens.
Speaker 1:Not that not that we're hoping for bad things to happen, but I was hoping for something exciting to happen. Something something positive, hopefully. Some some
Speaker 2:amazing This is positive. I was disappointed to see a lot of the Internet, like, clearly was was not not was hoping that there was something.
Speaker 1:Wrong with his health?
Speaker 2:Yeah.
Speaker 1:Yeah. Obviously, that's very negative. But this could have been some crazy four d chess trade deal, reinvigoration of the American economy, investment in AI. Like, it could have been like, this doesn't feel like market moving to me. Right?
Speaker 2:Hopefully. I mean, God willing, he finds a way to move forward.
Speaker 1:We gotta find out a way to trade this. We get I mean, is there some Alabama real estate development company that, like, benefits from this? Who knows? Anyway, Alfred Lin is in Barron's. He says, this is a very different company than most people understand.
Speaker 1:Is Lin a partner?
Speaker 2:Stock did. What stock? I mean, true d DJT, True Social did pop a little bit when we went live. Okay. That So was the trade everybody.
Speaker 2:If you were if you were long True Social going into this announcement
Speaker 1:Yeah.
Speaker 2:You you
Speaker 1:Well, makes sense because because True Social is a social network. So whenever, like, news breaks, there's a bunch of people on there and they're gonna sell ads And against that's why people are investing because it's probably good for their financials. Good for their the, like, good for the bottom line.
Speaker 2:Not not a meme at all.
Speaker 1:Yeah. What about you?
Speaker 3:On Polymarket, you this would this would have been good trade. So there's a what will Trump say during announcement today?
Speaker 1:Mhmm.
Speaker 3:And one of the choices was emergency. And it was at 64% right before it started and now it's at 30. So that was pretty big move.
Speaker 1:Okay. Wait. So it's going down. But he still might say it?
Speaker 3:He could still say it. Just yes.
Speaker 2:Yeah. So so far he said China. Is he taking Russia.
Speaker 1:Is he taking questions from the audience?
Speaker 2:He Is he reading chat? He should be. He
Speaker 3:should be.
Speaker 1:Thank you for the 20. Thank you for the 20. I'm not saying emergency. I know you're I know you're on Polymarket right now. Anyway, Alfred Lin chimes in to explain what's going on at Citadel.
Speaker 1:He says he's a partner of venture capital firm Sequoia Sequoia Capital, of course. He's been on the show. And whose brother happens to be the head of global fixed income and macro at Citadel, the hedge fund.
Speaker 2:Sizelords running the family.
Speaker 1:Wow. We we completely missed that scoop on the show. We should have been hammering him about his brother. Legend. Citadel is taking math and their distribution and technology power to price risk using technique techno techniques not you not traditionally used on Wall Street.
Speaker 1:While technology has been absolutely critical to Citadel's success, so too is Griffin's strategy. You don't wanna go up against the Wall Street incumbents. He said, instead, you want to understand where the market is heading and position yourself, there before incumbents arrive. The incremental rise of electronic trading allowed Citadel to move step by step ahead of names like Goldman Sachs and Morgan Stanley and a number of trading businesses. He makes all kind of Griffin makes all kinds of headlines.
Speaker 1:He's a Republican who has mostly given hundreds of millions to GOP candidates. And Griffin has praised and criticized Trump. Just this past week, Griffin told Barons, I hope president Donald Trump appreciates that while he can score political points by attacking Jay Powell, ultimately, the independence of the Fed is of the utmost importance to the American and global economy. Meanwhile, Griffin, 56, has been adding to his personal portfolio at a stunning prey pace, including buying over a billion dollars worth of real estate in New York, the Hamptons, London, Centrope, Hawaii, and multiple properties in South Florida, including a $400,000,000 compound in Palm Beach according to the Wall Street Journal. His art collection is worth a billion dollars.
Speaker 1:It includes work by Picasso, Van Gogh, and Warhol. And he has
Speaker 2:Couple names.
Speaker 1:Priceless historical American documents including rare copies of The US constitution, RIP to constitution down on that one. Mhmm. He bought he bought the bill of rights.
Speaker 2:Can't believe I I can't sell that. That whole saga was so insane.
Speaker 1:Crazy times.
Speaker 2:And he he he mugged in the entire on chain economy with that one.
Speaker 1:Yes. He owns the thirteenth amendment signed by Abraham Lincoln. He also owns a $45,000,000 stegosaurus. That's crazy. Crazy.
Speaker 1:Yeah. That's good. When I worked at Citadel in Chicago
Speaker 2:You gotta do more dinosaur investing. Two
Speaker 1:I think he kept two phantoms parked in the garage with two drivers like ready to go. So he like never knew which one he was in or He had some crazy crazy crazy crazy choices. A
Speaker 2:good setup.
Speaker 1:I think he also had some sick hypercars down there. I forget.
Speaker 2:Anyway Keep him handy.
Speaker 1:He's doing some philanthropy. He has a cool name for it too. Griffin philanthropy, now directed through an entity called Griffin Catalyst. General Catalyst. Move over General Catalyst.
Speaker 1:Griffin Catalyst exceeds 2,000,000,000 and includes funding Operation Warp Speed on the Hipper side. He recently donated 2,255,000.000 to MrBeast's water philanthropy after the YouTube star superstar called him out on the Today show. Seems very important
Speaker 2:Crazy. That
Speaker 1:Ken to Ken that the world knows how wealthy he is, says a business associate. A lot of other people go to great lengths to keep it the other way. Interesting. He's less secretive. Contrarian.
Speaker 1:The totality of Griffin's world is dizzying. The billions upon billions of hedge fund investments, market making activities and personal assets are markers of a man with great aptitude and perhaps even greater ambition. Along the way, Griffin and his companies have encountered friction, false starts, falling outs, fines, and failures. The hedge fund dropped 55%. This is what I was referring to.
Speaker 1:Losing $9,000,000,000 of clients' money during the o eight, o nine financial crisis and was on death's door. SITSEC tried and failed to get into investment banking. Yeah. They were gonna become an investment bank, and then they were gonna IPO the whole firm. But then investment banks had such a bad like stench on them after that like retail was not gonna be a fan and so they stayed private.
Speaker 1:Very interesting like decision to go back and forth on that. The market maker has had a number of run ins with regulators, Yet now, after more than thirty years in business, the tumblers have begun to fall in place. A decade ago, Griffin was worth a mere 6,100,000,000.0. Today, net worth has ballooned to 48,300,000,000.0, making him the world's thirty first richest person by
Speaker 2:Let's hope he can crack the I just I just hope that he can crack the top 10 by the end of the decade.
Speaker 1:He has an 85% stake in in the business plus an 80% stake in the an 80% stake in the market maker. The latter being valued at 22,000,000,000 three years ago. And like, Citadel Securities has obviously grown a ton. He sold a 5% stake to Sequoia. Never mind the real estate.
Speaker 2:I never knew that. Yeah. Sequoia. That's crazy.
Speaker 1:Yeah. Yeah. Sequoia.
Speaker 2:I'm sure. I wonder if Alfred Alfred
Speaker 1:Brokered the deal. There's some good color in here. I thought we ran hard at Paul at Goldman. Pablo Salame, the co chief investment officer of the hedge fund who came from Goldman Sachs in 02/2019, said to a colleague. And then I showed up here and I realized there's a whole different gear.
Speaker 1:Griffin is chief investment, co chief investment officer and CEO of the hedge fund. I would tell my team, you're playing for real real Madrid, says a former Citadel executive. You don't get to keep your spot on the field if you're not producing. Ken would call you on a Sunday night at 11PM, and he might be screaming and yelling at you, but he was working, says another former employee. He demanded a 150%, and nothing else in your life should matter.
Speaker 1:Ken's not yelling at you. He's yelling with you, joke to person close to Citadel. I'm not yelling at you. I'm yelling with you.
Speaker 2:We're yelling together.
Speaker 1:Citadel Securities and hedge fund Citadel are highly performant places to work, says Matt Kulik, SITSEC's COO, who's worked at the firm for thirteen years. This is a place to come if you have a lot of confidence in your ability and you wanna challenge yourself. It's true that Citadel hardly has an issue attracting aspiring masters of the universe. We had over a 100,000 applicants for our summer internship program. Our acceptance rate was point 4%.
Speaker 1:People are falling over themselves to demonstrate they deserve to be here just for the summer and some subset of them get to come back full time. Griffin was STEM smart and achiever in his early earliest days growing up in Boca Raton where he was president of the high school's math club. He graduated from Harvard with an economics degree in three years. Chapters of Griffin's origin story have become the stuff of Wall Street legend, like pursuing Harvard to let him install a satellite dish on the roof of his dorm room so he could trade convertible bonds. That's sick.
Speaker 1:After Harvard No. Griffin moved to Chicago where Frank Meyer, a pioneering hedge fund investor, mentored him and helped seed Griffin's hedge fund. The best advice I ever gotten I've ever gotten was from Frank Meyer, who in the early days of my career really pushed me to think big, says Griffin. Meyer also pressed Griffin to build a multi strategy platform instead of a single strategy fund. Griffin stayed in Chicago until three years ago when he says he became disgruntled with the crime and business environment and relocated his companies to Miami, a triumphant return of South Florida's most successful financier native son.
Speaker 1:Yeah.
Speaker 2:Thing I'm confused by, there's I don't think Ken Griffin owns any horses.
Speaker 1:No. No?
Speaker 2:Which is You look this up? Strange. Yeah. There's no evidence
Speaker 4:Maybe that's of axe.
Speaker 2:And maybe he's quiet about that. Maybe he wants to be loud about art but then, you know Maybe. Quiet when it comes to horse racing. There was a question. Raghav asked, what's the update on Tyler?
Speaker 2:Has he dropped out? Tyler, any any
Speaker 1:Give us the update.
Speaker 2:Any updates? To know.
Speaker 3:Yeah. I've moved oh, I forget the LeBron. I've moved my abilities. I've yeah. I've my talents.
Speaker 3:I've taken my talents to Los Angeles. Woah.
Speaker 1:That's a gap.
Speaker 2:Gap semester. Tyler's on a gap.
Speaker 1:Wait. Did we did we ever do the trading card with gap semester?
Speaker 2:No. We should. Oh, we
Speaker 1:gotta do that. We gotta put
Speaker 2:up gaps. Throw it up.
Speaker 1:Throw up the gaps of the official Gap semester.
Speaker 2:Yeah. Tyler couldn't miss the great lock in.
Speaker 1:Yeah. He had to lock in.
Speaker 2:He had to lock September.
Speaker 1:The the the the Citadel strategy is fascinating. You you know the how they started trading convertible bonds? Like, the literally, like, the convertible notes that everyone knows about in in Silicon Valley. Like, companies have those, and they're pretty illiquid. So you'd figure out how to price them, buy them, sell them.
Speaker 1:But eventually, he scaled the firm to the point where he basically, like, maxed out the market size. Like, he like, they were the most dominant convertible trading shop Yeah. Convertible debt shop in the world. And, like, there was no nothing more. And so they set up a frequency a high frequency trading firm, got into quant stuff.
Speaker 1:They also had everyone thinks about them for if you're thinking about them in, the 2010 era, you think of them as, a high frequency trading shop. But they also had a global macro fund that took, like like They've just 4,000
Speaker 2:interrupt, but let's give it up for global macro. Yeah.
Speaker 1:They took like 4,000 meetings with CEOs or something like that of like public companies. And it's fascinating because like like how to how would that how would that not produce alpha? You know? It's like it's like obviously, like, you don't need to be insider trading to just talk to the CEO. They don't share any private information.
Speaker 1:Yeah. But you can just get a vibe and you can understand, oh, they know how they're talking about their business. I'm optimistic about this particular business. Or like, this CEO sounds like he doesn't know what he's doing. He seems lost.
Speaker 1:Like, he's talking about a strategy. He's not telling me anything that's non public, but
Speaker 2:I get it. Seems dumb. Like, throw that If you talk with somebody for ten minutes
Speaker 1:Yeah.
Speaker 2:That's almost always enough time to say Totally. Holy bearish.
Speaker 1:Holy bearish. Sure. And it's so funny because like, yeah, you you don't need to be insider trading to just like talk to the CEO, get a vibe check, and then actually go and Yeah. Execute a trade against that. And so that's why I've always been so bearish on retail traders because it's like it's like, if you like You never is who you're going this is like who you're going up against.
Speaker 1:You're going up against someone who Yeah. Gets to sit down with a CEO in a private conference room and have a con and have a conversation. And then also have expert research and all these other things. Yeah. And and and Massive, massive
Speaker 2:have people like to bring up that Citadel has a hedge fund and the market maker Yep. And how that could be a potential conflict.
Speaker 6:Yep.
Speaker 2:But apparently, there is Ken believes the greatest risk to his business is regulators. And so he's not willing he's not, you know, doesn't take risks around that. Basically, there's like an extreme firewall.
Speaker 1:Interesting.
Speaker 2:And they take compliance extremely seriously because you can imagine, like, again, he's he's not so threatened by the the the hedge fund that's Yeah. That's trying to be the next Citadel. Right? He's he's threat he feels
Speaker 1:threatened I I was reading Caesar Palace Caesar's pal Caesar Palace Coup. What what what's that book called? The coup on Caesar Caesar's Palace. I I forget. Where is it?
Speaker 1:On my audible. The The Caesar's Palace Coup. Fantastic book. How a billionaire brawl over the famous casino exposed Power and Greed of Wall Street. It's about Apollo buying Harrah's Casino and then turning into Caesar's.
Speaker 1:And they all came out of the Michael Milken crew, basically, at Drexel. And Milken, of course, was indicted on, like, a ton of counts of securities fraud for insider trading during, like, the eighties. And Milken had a very different approach to regulators. Was he was like, at least he was like quoted in some books saying like like the regulators are like making the market inefficient. Like like the like the market should be a lot more efficient without the regulators.
Speaker 1:And like the courts did not look kindly on that. And he went to jail and and got slapped with a bunch of things. But he was pardoned in 2020, which I think means technically he did nothing wrong after the fact. I don't know.
Speaker 2:Did nothing And he and you went
Speaker 1:on a great run.
Speaker 2:John actually in the chat was asking if we'd covered Anthropics round already. We did early on. They raised 13,000,000,000 at a 183,000,000,000. He was asking if that was the largest round ever. Yeah.
Speaker 2:I think that OpenAI is the only company that has raised more Mhmm. As part of their like $40,000,000,000 funding round. But that was tranched out. Right? It wasn't it wasn't 40,000,000,000 at once.
Speaker 2:So certainly one of the biggest fundraisers of all time. World Liberty World Liberty Financial started trading on the blockchain yesterday. Went out at a $8,600,000,000 valuation now trading down at 6.2.
Speaker 1:Mhmm.
Speaker 2:This is the company with a lot of co founders. Right?
Speaker 1:I think so. Yeah. Yeah. No. It it Co founder Emeritus is a great new title.
Speaker 1:I think Donald Trump is a co founder Emeritus which I I think he means he's not day to day because I think he's tied up at the
Speaker 2:house or something. Yeah. So president is co founder Emeritus. Yeah. Eric Trump is co founder.
Speaker 2:Donald Trump junior is a co founder. Baron Trump is a co founder. Chase Harrow is a co founder. Zach Volkmann is a co founder. Steven Witkoff is co founder Emeritus.
Speaker 2:Zach Witkoff is co founder. Alex Witkoff is co founder. And I think that's the Absolutely. The all the co founders that they have. But stated
Speaker 1:like mission? Like what what I mean How do they wanna
Speaker 2:seems obvious. It's bridging legacy finance and the open economy with purpose built on chain products.
Speaker 1:Yes.
Speaker 2:Where DeFi meets TradFi.
Speaker 1:Yes. But can you elaborate? Like, what like,
Speaker 2:How can I be more clear, John? We're bridging legacy finance and the open economy with purpose built on chain products.
Speaker 1:I'm asking you to steal, man.
Speaker 2:I have no idea what
Speaker 1:L 1, l 2.
Speaker 2:USD 1, a US dollar stable coin upgraded for a new era of finance. Mhmm. Stable, secure and transparent by design. Mhmm. Lend and borrow.
Speaker 2:Supply digital assets and borrow against your holdings. Monitor risk easily with real time health factor. And the World Liberty Fi app. And you can deposit crypto via wallet or bank account and spend by access accessing your liquidity anytime.
Speaker 1:I have the steel man. The steel man on this is basically we know competition's for losers. You don't want you don't want to be you don't wanna be in a highly competitive market. You don't want Brian Armstrong at Coinbase and Vlad Tenev at Robinhood and all the other killers that have, you know, Anatoli at Solana. You don't want them all immediately coming out and crushing you and trying to compete with you.
Speaker 1:Right? And these guys are they're established. They exist in the space. If you if you do something innovative, they could potentially clone that very, very quickly. Right?
Speaker 1:Yeah. So how do you keep them? How do you throw them off the trail? How do you keep them from suspecting that you're going to build something incredible? You launch a bunch of meme coins.
Speaker 1:You you launch Trump coin. You launch Melania coin. You launch meme tokens. You do a bunch of things that makes you look sloppy. Yep.
Speaker 1:And then you come out with a really serious thing. And everyone thinks, oh, this is just another sloppy project. This is a cash grab. This is something that isn't serious. I don't need to really keep tabs on it.
Speaker 1:And then all of a sudden, you're just building silently, building silently until you disrupt everyone.
Speaker 2:Yeah. That's I think I think there's something there. I mean, think they should they should start acquiring companies. You know, they're sitting at their their eight they've they've had 2,000,000,000 in trading volume in the last Okay. Twenty four hours.
Speaker 2:There's there's $66,000,000,000 token. Yeah. Why not start you know, they should just head up Chamath and say, let's let's join forces on this back Yep. And and create the greatest roll up of all time.
Speaker 1:The one thing that they actually should do is get on graphite.dev. It's code review for the age of AI. Graphite teams on GitHub ship higher quality software faster. They could get started for free. They could be reviewing every
Speaker 2:They really could.
Speaker 1:Every GitHub.
Speaker 2:They could and they should.
Speaker 1:They could.
Speaker 2:Fuko Capital says AI features are eroding SaaS margins. Ivan over at Notion says that two years ago, his business had margins of around 90%, typical of cloud based software companies. Now, around 10 percentage points of that profit go to the AI companies that underpin Notion's latest offerings.
Speaker 1:How many times have I asked a founder on the show this? I've asked this question so many times.
Speaker 2:And nobody nobody gives a straight answer.
Speaker 1:No one gives a straight answer.
Speaker 2:And here it is.
Speaker 1:But this
Speaker 2:is But this not that bad.
Speaker 1:This is not
Speaker 2:Especially if revenue Thank
Speaker 1:you, Ivan, for commenting.
Speaker 2:You know, if revenue is really accelerated at at more than, you know, they can take a hit on margins if they're growing the the base Yeah.
Speaker 1:Dramatically. Yeah. Yeah. Well, the real question is like, does it reduce churn? Does it increase sales?
Speaker 1:Does it increase growth? Are you getting more customers? Are your customers sticking around for longer? Are they paying more?
Speaker 2:And I and this is just too this is just this is just too too perfect to tie in. But Notion obviously runs on Turbo Puffer.
Speaker 1:Oh,
Speaker 2:really? And they're saving millions of dollars annually. Part of how they can deliver AI efficiently to all their customers Here we go. Because of Turbo Puffer. Here we go.
Speaker 2:Mickey Liu over the data engineering lead at at Notion says Turbo Puffer makes it too easy to build state of the art AI apps. Absolutely fantastic. Are you a did did you ever were you ever a big Notion guy?
Speaker 1:Never a big Notion guy. Used it a little bit. I was buddies with a Notion influencer. What's his name?
Speaker 2:Oh, I know this. I I know here
Speaker 1:He plays like metal. Oh, what's his name? Notion brand ambassador. He has a really great YouTube like business.
Speaker 2:If he went giga long Notion.
Speaker 1:And it paid off hugely. He had a he had a bunch of really great insights. I forget what what his name is, but he's a nice guy. But I I I use Notion a little bit but have mostly just been Google Docs and, you know, for most of the stuff. I don't know.
Speaker 1:Building a second brain. Never never went too far down that rabbit hole. What about you?
Speaker 2:I've paid for Notion for years and years and years. Yeah. We use it heavily at Branded Native.
Speaker 1:Yeah.
Speaker 2:And they still use it. Yeah. I I think it's a great tool. I think It's
Speaker 1:of an operating system for like a team. Like Yeah. It it's really great in like in the business
Speaker 2:I mean, it's still we we're we're Google Max's here. Use Google Sheets and stuff. But still, like, being able to create, like, knowledge bases and sort of like Yep. Layered is is great. So Yeah.
Speaker 2:It does really get I don't understand the notion the notion haters out there. I think the notion It's actually crazy that
Speaker 1:people can
Speaker 2:type I hate notion. Like, imagine hating a note taking out.
Speaker 1:That's ridiculous. No. No. I I I think the way the the the over optimizer, like, meme happens is that you're basically, like, it it it's the same it's the same vibe as, the credit card points maxi. It's like someone who has like taken something that makes sense in a business context and applied it to their personal life.
Speaker 1:Like, oh, yes. I have a personal CRM for like reminding myself to like call Tyler and get a beer with him on the weekends. It's like that should feel just natural. And so, like, if someone's like, yes, like, just to like
Speaker 4:If you need
Speaker 2:a CRM to manage a relationship, it's probably not that great of a relationship.
Speaker 1:Yeah. Yeah. And it has that same it gives that same vibe off in the same way of like, okay, like, like, if you're spending ten hours a week optimizing credit card points, like, is are you is that really worth it? Don't you have a higher opportunity cost? What are we doing here?
Speaker 1:I actually have a buddy who I get we shoving the show who is like the the biggest points maxi and has gone so far that it's actually driving like tons and tons of value.
Speaker 2:Oh, really? He he he
Speaker 1:I'll I'll have him come on the show and and and tell
Speaker 2:the story. But he I'm a billionaire from credit card points.
Speaker 1:I mean, didn't I tell you this? He bought a half a million dollars of gold at Costco on credit cards points just to get points and then sells the gold and arbs it.
Speaker 2:No way. Oh, okay. That's that's cool.
Speaker 1:He's the king of this stuff. He runs a whole show about it. Anyway, the yeah. I don't know. Notion, like, there are certainly people that get you you have to, like, get joy out of it.
Speaker 1:Like, doing, like, you know, in your personal life. Because if it's if it's not, like, work
Speaker 2:It's definitely it's definitely gatherer coded.
Speaker 1:It is a little gatherer coded.
Speaker 2:Yeah. And that's okay. Some people are hunters. Some people are gatherers.
Speaker 1:Organizing. Yeah. Yeah. I like to hunt through my messy messy documents. I I like it as it's I'm going through the the the file system searching for the random dot TXT file where I put all my passwords.
Speaker 1:Like like a a hunter on the prairies thousands of years ago.
Speaker 2:Yes. Hunting the goosebumps. You like stress of opening your laptop. It makes you feel like makes you feel like you're really, like, you know
Speaker 6:I do. Survive.
Speaker 1:Just like one giga doc of everything. I mean, you're the worst, dude. I see you texting yourself. Yes. That is gonna be the like like, that is so much like I feel like the
Speaker 2:That's my idea.
Speaker 1:The platonic ideal is like, okay, yeah. Like like, you know, you use a spreadsheet when it calls for a spreadsheet. Use the right tool for the job. Like, maybe, you know, you'll you'll use communication tool for this if you're managing a complex product. You know?
Speaker 1:Like, if you are if you are actually, you know, planning and building a product, you're using linear. It's a purpose built tool for planning and building products. Meet the system for modern software development, streamline issues, project product road maps. This is what you actually do. You actually use Linear for real for real stuff.
Speaker 1:But then at the same time, on the other end of the barbell, you're like texting yourself
Speaker 2:a Perfect transition because you know who's a, you know, who's a customer of TurboBuffer.
Speaker 1:You're really on the Turbo Puffer run today.
Speaker 2:I mean, generational run. This is why I talked to Simon. I was like, we're absolutely working together.
Speaker 1:Yep. Yep. Anyway, should we go through this Christopher Mims article or just Yeah. So so Mims is the reason we know about these about these margins. He says with models doing more thinking, the small companies that buy AI from the giants to create apps and services are feeling the pinch.
Speaker 1:Developers who buy AI by the barrel for apps that do things like make software, analyze
Speaker 2:I buy my AI by the barrel.
Speaker 1:It's a great turn of phrase. Are discovering that their bills are higher than expected and growing. What's driving up costs? The latest AI models are doing more thinking, especially when used for deep research, AI agents, and coding. So while the price of a unit of AI known as a token continues to drop, the number of tokens needed to accomplish many tasks is skyrocketing.
Speaker 1:The it's the opposite of what many analysts and experts predicted even a few months ago. That has set off a new debate in the tech world about
Speaker 2:Wait. Who Did
Speaker 1:What?
Speaker 2:What about the the Jevan's Paradox Maxis?
Speaker 1:This is yeah. This is Jevan's Paradox.
Speaker 2:I know. Yeah. Exactly. So while the price of a unit AI, known as a token continues to drop, the number of tokens needed to accomplish many tasks is skyrocketed. So that Jevin's Paradox, something gets cheaper, you
Speaker 1:can Yes. More of This is Yeah.
Speaker 2:So if if if the cost of AI was skyrocketing, I I don't think you'd see
Speaker 1:Yes. So quite the same. So so so so the question that you're beefing with, and I've beefed with this too, is the characterization that it's the opposite of what many analysts Yeah. Experts predicted even a few months ago. And there's a lot more nuance to what the experts if you really trust the experts, the podcasters, what they were predicting, they were predicting drops in per token cost.
Speaker 1:That actually has happened. But then they were also predicting Jevan's paradox that we would use a lot more of the resource. And so I don't know. It seems like that prediction was kind of true. But I I do understand, like, there was a moment where the idea was you spend 10 x more on the training run, and then the inference is too cheap to meter.
Speaker 1:Intelligence is too cheap to meter. And so you basically get the inference free. You spend a billion dollars training this massive thing, and then you can distill it down and inference it on your phone on the edge for free. Yeah. And and and that certainly has not happened.
Speaker 1:Yep. What were you about to ask?
Speaker 2:Should we put Theo Brown, chief executive of t three chat? He says, the arms race for who can make the smartest thing has resulted in a race for who can make the most expensive thing.
Speaker 1:Mhmm.
Speaker 2:I don't totally agree with this. I mean, I think it was I think it was it's always been the case if if you take a hard problem Mhmm. And have an LLM try to tackle it and just give it as much inference, as many tokens as you possibly can, it's gonna probably deliver a better result. But I feel like now, you have companies like OpenAI clearly making decisions to deliver products more efficiently. Right?
Speaker 1:Certainly, like not wasting tokens is the is the the goal of the router. Like the router is let's try to not get I mean, it's also let's try and get people to use the thinking models. If they're not and they're asking questions that should benefit from thinking models, but reasoning models. But also, like, just downgrading my, you know, my hammering of the o three pro API when I ask a question that actually could just get one shot by the default model is probably a benefit. And so it's yeah.
Speaker 1:It's more nuanced than that. I agree. It's it's right tool for the job, sizing the the value of the query to the cost of the query. Makes a ton of sense. Anyway
Speaker 2:And over the weekend, x a I released Grok code fast one Mhmm. Which briefly topped the charts for on open router Mhmm. And is specifically focused on cost. Mhmm. Do wanna keep going here?
Speaker 1:Yeah. So there's a cool graph in here about the cost of doing business. The price per token for prompts and responses for AI models at a given level of intelligence. The least intelligent model showed roughly a nine x decrease in cost per year, while the most capable ones dropped in price by roughly 900 x per year. So remember, AI training and AI inference are different.
Speaker 1:Training those huge models continues to demand ever more costly processing delivered by those AI supercomputers you've probably heard about. But getting answers out of existing models inference should be getting cheaper fast. Sure enough, the cost of inference is going down by a factor of 10 each year, says Ben Cautier, a former AI engineer who's now a researcher at Epoch AI, a not for profit. Despite the drop in cost per token, what's driving up costs for many AI applications is so called reasoning. Many new forms of AI rerun queries to double check their answers, fan out to the web to gather extra intel, even write their own little programs to calculate things.
Speaker 1:And AI agents will carry out lengthy series of actions based on user prompts. Here are approximate amounts of tokens needed for tasks at different levels based on a variety of sources. A basic chatbot Q and A, 50 to 500 tokens. A short document summary, 200 to 6,000 tokens. Writing complex code might be 20,000 to a 100,000.
Speaker 1:And a multi step agent workflow might be up to a million tokens. Hence, the debate of new AI systems that use orders of magnitude more tokens just to answer a single request are driving much of the spike in demand for AI infrastructure who will ultimately foot the bill. This is like, the Jevons Paradox by NVIDIA when they sold off that you did was like so perfectly timed. Like it it it matched it matched what actually happened so flawlessly. Remarkable.
Speaker 2:I should check. I should check on that trade.
Speaker 1:I mean, yeah. It just like like like there was this idea that like models that tokens would get cheaper And like You're the timeline was just like, Jevan's paradox. Jevan's paradox. Like understand this thing. We're gonna wind up using more of these more of these tokens.
Speaker 1:This is a new capability. We're gonna use more of this even though it's getting cheaper. And lo and behold, people use a ton more.
Speaker 2:Literally bought Nvidia on while we were live on the show Yeah. The day the day that it just sold off massively.
Speaker 1:On public.com. Investing for those that take it seriously. They got multi asset investing. Industry leading yields. They're trusted by millions.
Speaker 3:I am
Speaker 2:up 42%.
Speaker 1:Very nice.
Speaker 2:Very nice.
Speaker 1:Not bad. Anyway, the Ivan over at Notion says that he's spending 10% of revenue on on AI now. That is that is high when you think about it in that frame. Because what is Notion's revenue? It's gotta be in the hundreds of millions of dollars.
Speaker 1:Right? And so they're probably spending tens of millions of dollars on tokens for features that they've added to Notion and then they have to upsell or give some
Speaker 2:sort
Speaker 1:of free Yeah.
Speaker 2:I mean, they were they were super quick to add a lot of AI features. Yeah. I remember they're you know, these are founder mode companies. Yep. Right?
Speaker 2:Wrong one. Founder mode. But but No. But I but I just remembered that it was like, okay. ChatGPT was taking off.
Speaker 2:Yep. Ivan clearly looked at that and said, hey, we should just integrate this Yep. Everywhere into our products so that people don't have to leave the app to Yep. Access intelligence.
Speaker 1:I mean, Notion feels like such a beneficiary of AI in sort of like three different ways. One is like, the most intimidating thing about Notion is when you set a when you when you create an account and you're just hit with like a blank page. And that's why there's people like, you know, these influencers that sell Notion templates. Because the whole idea is like, yes, when you set up the second brain and you have your Notion for your finances and your Notion for all your friends and your friends' birthdays and the Notion for everyone you invited to your wedding and the Notion for, you know, your dog's medication schedule, and you have all your different notions, and they all link perfectly, and all the data is perfect. Like, that feels amazing.
Speaker 1:That's like the dream. But getting there is so much work. You have to spend like days and days and days, like, onboarding yourself, basically. And if AI can do that faster, that's huge. Yep.
Speaker 1:So actually, it's actually one of the cases where I think just putting a chat box like, what do you want to do right now? Instead of just being like, hey, here's a blank thing. Like, It's a sandbox. Do whatever you want. That feels incredibly value additive.
Speaker 1:And then also, the behind the scenes AI stuff seems incredibly valuable too, where if I have a CRM built out in Notion or I have a list of a list of topics that I wanna talk about on the show or something like that, having an AI that kinda can, in the background, go and hydrate cells in a table, or hydrate, or or transform, or summarize, or kind of polish up a messier document and keep it all in like the pop the proper Notion taxonomy, that feels hugely valuable. Totally. And so it should be a beneficiary. And then also just like if you're somebody that's actually been doing the hard work of putting a ton of data in Notion for years and years and years, and then all of a sudden, now you have the ability to, with just one prompt, like be able to synthesize some sort of new visualization layer on top of that. That feels really valuable, too.
Speaker 1:So I would be pretty optimistic about them spending this much on AI, Even if they're not immediately reaping the benefit, even if it is a little bit, like, who knows? Maybe they're getting a 50% bump in revenue. And so 10% hit to margin, worth it all day. Take that all day. But but even if they're not, I feel like this
Speaker 2:Yeah. Here's down. Here's if you
Speaker 1:And it will If
Speaker 2:you you can buy Notion
Speaker 1:Yeah.
Speaker 2:For $10 a month. Yep. And then if you want AI features, you just pay more. How much? So it doesn't say here.
Speaker 2:It doesn't say how much
Speaker 1:It's $20,000 a month.
Speaker 2:But it I would I would assume it's like another $10 a month if you want AI features. And so they're having to spend 10% of revenue on AI. But they're potentially, you know, doubling revenue on a per user basis.
Speaker 1:So Interesting. If you have a bunch of data and you wanna analyze it, go to Julius. Chat with your data. Get expert level insights in seconds. Ask Julius to analyze your data.
Speaker 1:Used by Princeton, BCG, Zapier.
Speaker 2:And TBPN.
Speaker 1:And TBPN. Yeah. We we actually are working on something fun. Put all of our all every post that we've ever reacted to has been catalogued, put it in Julius, ranked it by how many times people have been mentioned, kind of a poster power rankings, working on monthly updates here should should be our own kind of top poster list, Top most mentioned of all time. It should be fun.
Speaker 1:Anyway, when Replit updated its pricing model with something it calls effort based pricing in which more complicated requests could cost more, the world the world's complaint box, Reddit, filled up with posts by users declaring they were abandoning the vibe coding app despite protests from noisy minority of users. Quote, we didn't see any significant churn or slowdown in revenue after updating the pricing model, says Replit CEO, Amjad Masad. The company's plan for enterprise customers can still command margins of 80 to 90%, he adds. One solution, says Christopher Mims, is dumber AI. The big companies creating cutting edge AI models can at least for now afford to collectively spend more than a $100,000,000,000 per year.
Speaker 1:And so, yeah, I I I do wonder like a big thing is that if you're just hammering the front, it it's so easy to just hammer the frontier. I think the king of the timeline situation room is Bucco, actually. I think it's think
Speaker 2:Bucco comes out the I
Speaker 1:think he's Delivery. Number one.
Speaker 2:We gotta start at it. We we we should probably add our own creator payouts.
Speaker 1:We should.
Speaker 2:Yeah. Start paying out Buco. Yeah. In merch. King of the timeline.
Speaker 1:In merch. We should send merch to the top 10.
Speaker 2:Zeke says, a Notion premium subscription will get you at least twenty twenty five Tesla. I wouldn't be surprised if if somebody starts throwing in a a lease a Tesla a Tesla lease to your enterprise plan.
Speaker 1:It'd be great.
Speaker 2:Why not?
Speaker 1:So, yeah. I mean, in summary, the bull case here is that the GPT five API, like, eventually, there will be a model router API that will that will dynamically route the request to the best model. And you can and instead of just saying like, okay, this particular feature is wired up to a reasoning model, it will say, okay, well, yeah, like this particular feature is wired up to a model router. And when a customer comes with a question saying, Hey, I'm Notion and I want to reorganize all my data. And it says, Yeah, that's not really a notion that's not really a reasoning level task.
Speaker 1:Let's put that on a cheaper model, dynamically route it, save a bunch of money. Anyway, if you wanna get your brand mentioned in ChatGPT, go to ProFound. Reach millions of customers who are using AI to discover new products and brands. You can get a demo at ProFound. Anyway, should we talk about the podcast gold rush or
Speaker 2:That's it.
Speaker 1:Run through some timeline? What are thinking?
Speaker 2:The podcast gold rush. Media companies race to license star creators with AI upending how people consume information news outlets are willing to pay top dollar for unique voices. Traditional media companies are in a deal making frenzy with podcasters, social media influencers, and other content creators. Fox News in July announced a new media expansion including a licensing agreement with the Ruthless podcast, freewilling talk show featuring several former Republican political strategists. In August, The Athletic agreed to a 7 figure deal to license Pablo Torrey Finds Out, a sports and culture show.
Speaker 2:Vox Media recently announced a partnership with Bella Freud for her fashion neurosis podcast and has agreed to a licensing deal with David Axelrod, Mike Murph Mike Murphy, and John Heilman's show Hacks on Tap. Established media companies watched in Oz, independent podcasters drew starguests and drove the news cycle during the twenty twenty four presidential election. And with artificial intelligence tools changing the way people consume information and audiences hungry for authenticity, outlets from Fox and The New York Times are eager to create content that can't easily be replicated by a chatbot. For many, that means building out rosters of distinctive human voices. The world would be poor if we were just served, quote, by an AI agent with content that is originated from algorithms, says Paul Cheesebrough, chief executive of Fox Coors To Be Media Group.
Speaker 2:The role of the creator becomes even more important in that world. Fox and the journal's parent News Corp share common ownership. Sean Ryan, a former US Navy Seal and CIA contractor started shopping the Sean Ryan show earlier this year. Recent episodes which can last upward of three hours featured a deep dive featuring featured a deep sea mining executive, a former military contractor held hostage in Columbia.
Speaker 1:And like seven of our boys.
Speaker 2:Seven of our boys and California governor Gavin Newsom. Ryan Bills, the Did show is
Speaker 1:Sean Ryan?
Speaker 2:Oh, I didn't realize that. Ryan Bills, the show is focusing on
Speaker 1:Like holding a gun or something. That was like the viral moment.
Speaker 2:Yeah. Focusing on what the media isn't talking about. Mhmm. Yeah. I mean, I I I think they might get into this in a bit.
Speaker 2:But the takeaway here is people are less interested in paying just for news Yep. Because you might open x and see some Anon account posting a headline. Someone else did the fact finding. They're just like posting a easily Yeah. Yeah.
Speaker 2:Digestible screenshot and more interested in commentary and analysis surrounding news.
Speaker 1:I guess my question is, if the end state of these podcasts is partnership with legacy media networks, What does that say about the talent identification and, like, talent nurturing for the networks? Like, why can't why can't Fox go and find the next ruthless and set them up Put it together. Be able to yeah. Exactly. Like or is it maybe more more efficient to actually have the the the the NFL combine of, like the next sports Yeah.
Speaker 1:You guys Entertainer.
Speaker 2:Have a, you know, a competitive bloodbath Exactly. And we'll pick out winners.
Speaker 1:Yeah. Maybe that is actually
Speaker 2:I mean, this this you see this in music now where a lot of record labels wait until somebody shows incredible talent. Yep. And then they'll sign them after they've gotten a billion views on TikTok or
Speaker 1:Yep.
Speaker 2:Have a hit song. So I I I I still think yeah. The question here is does signing you know, if if Sean Ryan goes to Fox Yep. Or Tubi or one of these other platforms, is that enough to is that enough to sustain these legacy media companies? Or do they still get competed away over time?
Speaker 1:Yeah. The question is like what yeah. What does the long term business look like? Like because they're all pivot pivoting to like or they're all expanding to over the top or or instead of over the air, like the I think it's OTT, like the streaming
Speaker 4:Yeah.
Speaker 1:Services. So like, they all wanna have their own streaming networks, but then they're in direct competition with Netflix and that's gonna be really hard. And they're in competition with Apple and Amazon and YouTube and that's really, really hard. And then and so the question's like, in the short term, it makes sense. Like, I could imagine paying Sean Ryan to license his show and running ads against it on Fox being higher value than than just like the next random show that probably costs a bunch to make and brings in the same amount of ad revenue.
Speaker 1:Like, if they're just paying Sean Ryan to to do his show and then they're just airing it, That could be like a good financial decision. Right? Yep. The question is like, does that actually get like a younger Sean Ryan viewer on board on Fox? Like
Speaker 2:Well, yeah. The question is if legacy media, you know, if cable is being competed away by different streaming Yeah. Cable revenues are being competed away by streaming platforms and social media platforms
Speaker 1:Yeah.
Speaker 2:How many Sean Ryans do you need to replace the lost revenue and the fullness of time that comes from cable just going away? Right? Yeah. You need a lot of Sean Ryans.
Speaker 1:There are a lot of Sean Ryans out there though. You you could carry a lot of these shows and you could you could definitely fill out a twenty four seven news cycle. You could fill a full channel with independent content creators that are licensed. Yeah. The question is like is like how how how much does that actually make people stick around versus they just stay in their apps and they just don't really go back to the networks or or like what value at that point is the is the network actually delivering?
Speaker 1:Totally. Anyway, let me tell you about numeral sales tax and autopilot. Spend less than five minutes per month on sales tax compliance. Where'd you go next? Let's rip some timeline.
Speaker 1:Let's do some timeline. So Elon Musk is back to posting about romantic companions, I believe.
Speaker 2:Major upgrade
Speaker 1:of Brock Imagine in a few weeks. Definitely needs an upgrade. People were not very happy with the quality of the video. Although, there were lots of people that were promoting it and and sharing it because it was certainly edgy. But in terms of like the the the video
Speaker 2:pull up that video of Sam Altman?
Speaker 1:Yeah. That's the next one by Taiyoki. If we can pull up that. Try not to share your screen. The the Sam Altman clip from this is from Cleo Abrams show,
Speaker 2:I believe, in
Speaker 1:the in the timeline. In the meantime, let me tell you about fin dot a I, the number one AI agent for customer service, number one in performance benchmarks, number one in competitive bake offs, number one ranking on g two.
Speaker 2:Do not get in a bake off with fin. That's all I'll say.
Speaker 1:And can we pull up the Sam Altman clip from Tai Oke. Tai Oke? I don't know how to say that. Repost from Hungry Donkey of Sam talking to Cleo Abram on her show. It's in the timeline.
Speaker 2:Meanwhile, Rock is highlighting Statsig was acquired by OpenAI in a 1,100,000,000.0 all stock deal. Notably, they announced a $100,000,000 series a at the same 1,100,000,000 valuation from Iconic a few months ago. Wonder what prompted management to sell after the recent large fundraise. This is what I was saying earlier that the acquisition is just at the last round price. Mhmm.
Speaker 2:But it's very possible that the Statsig team and the board think that there's just more upside in in owning a piece of OpenAI than owning a piece of Statsig. So Interesting. Even though it's happening at the last round price Yep. The last investors aren't getting a premium. They are they're riding with OpenAI now.
Speaker 1:That makes no sense.
Speaker 2:We got the video ready? Yep.
Speaker 1:Let's pull it up.
Speaker 2:No audio.
Speaker 1:That is best for the world, but not best for winning.
Speaker 2:Can you start over because we missed?
Speaker 1:What is an example of a decision that you've had to make that is best for the world, but not best for winning?
Speaker 2:Well, we haven't put a sexbot avatar in Cheshkutia.
Speaker 1:That does seem like it would get time spent.
Speaker 2:Apparently, it does.
Speaker 1:Is that graphic added on her show or after the fact?
Speaker 2:I would assume she didn't add that.
Speaker 1:Somebody added that. Yeah. I don't know.
Speaker 2:The other thing about this deal is Iconic is that lead investor in Anthropix new round. So this is a way for Iconic to get some location. To get some open AI exposure.
Speaker 1:Interesting. Did you wanna talk about Align Ventures? They're on a generational run now in early stage CPG investing. The fund started in 2018.
Speaker 2:Yeah. We covered this Friday.
Speaker 1:$20,000,000 fund was invested in some of the biggest
Speaker 2:Because they're in they're in Mammoth Brands They're dog which is acquired coterie.
Speaker 1:Coterie, sale to Mammoth Brands. Figs. Oh, they were in the Fig series a which IPO ed in 2021. Touch how is Figs doing now? I know that they IPO
Speaker 2:ed and they were kind of ripping.
Speaker 1:They were
Speaker 2:in Hymns and Horrors. Still a billion dollar company.
Speaker 1:Wow. Touchland Seed acquired by Church and Dwight Company. I don't know Touchland. For 880,000,000, Billy Seed acquired by Edgewell Personal
Speaker 2:Biggs also IPO'd at at What? $34 a share. It's at $6 a share now.
Speaker 1:So Okay. So it's down.
Speaker 2:They would've done I mean, Align would've done really well
Speaker 1:Yeah. Yeah.
Speaker 2:On the IPO.
Speaker 1:The total EV of their investments is likely north of 15,000,000,000.
Speaker 2:Wow. That's crazy. So that's how they have the capital to be ripping into Figure Robotics. Yeah.
Speaker 1:Yeah. That was a that was uncharacteristic. It seems like they really know their
Speaker 2:stuff. Humanoids could be some of the, you know, the biggest consumer play Mhmm. Of all time if you get a if you get a robot in every in every person's home. Yeah. But obviously competitive.
Speaker 1:Okay. We gotta talk about this Ethan Ding post. Google Trends data on interest in Lovable, replet, clogged code, cursor, windsurf all down. Cursor's down 60%, peaked August 3. Clogged code's down 56%.
Speaker 1:Lovable's down 44%. Reply's down 68%. Wind Surf's down 78%. This doesn't make any sense to me. Like, I mean, even looking at the charts, it doesn't look like it's way maybe down from peak, but, like, that's just Google Trends.
Speaker 1:Like
Speaker 2:Doesn't mean revenue's down.
Speaker 1:Yeah. Is this what do you think, Tyler? Has has any has anything happened in cursor level Cloud Code lovable rep?
Speaker 2:Ethan Ethan responds and he says, might be nothing. Market's maturing. User's not switching as much. Right? If they're actually settling into using products, then they're not
Speaker 1:They're not like posting
Speaker 2:frantically looking. And or it could be that just overall growth is slowing.
Speaker 1:Also, it's just like a it's a slight sell off before before lock in season.
Speaker 2:The Or people are just using the models to do search now themselves?
Speaker 1:Oh. Right? Yeah. So people maybe this is just overall search. No.
Speaker 1:I think all of this is relative.
Speaker 2:Oh, right. Right.
Speaker 1:Tyler, what do you think?
Speaker 3:I I think it could be like yeah. It's like the lock in. By now, the kind of exploration phase is over. People like, no. Okay.
Speaker 3:I I like using Cloud Code. I like using Lovable.
Speaker 1:Yeah.
Speaker 3:They've tried everything and now they're kind of maybe just using one now. Maybe. Something like that.
Speaker 1:Yeah. I mean this is this is the I guess the data's down during August. That has to be like the slowest time for basically everything. This is like big vacation season. I don't know.
Speaker 1:I don't read too much into this. I I I still feel like like a lot of these are big markets where many of the companies will do well. Also, there's there's there's some sort of there's some sort of like compounding thing. Also, like clogged code, I wonder if that's even the term. Like, if I go to Google Trends, like, are people just searching for anthropic?
Speaker 1:Like, is anthropic off peak? Anthropic is a search term? Anthropic is a search term over the past, let's see,
Speaker 2:12 every every search everything I've searched so far has peaked around the August.
Speaker 1:Yeah. Yeah. Anthropic broadly is down. What about what's something that should not be down at all? Like, Erawan.
Speaker 1:Is Erawan down? Erawan is flat. Erawan is down.
Speaker 2:Labubu peaked in July as well.
Speaker 1:What about OpenAI? Let's see. OpenAI also saw some crazy spike in August. What what was going on July 27 to August 2? Everyone was talking about AI or something, and then it just like completely dropped.
Speaker 1:Something something weird happened with the Google data in on August 2 or August 1 or something. What was going on then? I don't know.
Speaker 2:Anyway. Anyways, I don't think we should read too much into this. It's interesting data though.
Speaker 1:I agree. Let me tell you about Adio. Customer relationship magic. Adio is the AI native CRM that builds scales and grows your company to the next level. Get started for free.
Speaker 2:This was funny. MrBeast was streaming about his water charity
Speaker 1:Yes.
Speaker 2:And he just kept refreshing Polymarket.
Speaker 1:That's so funny because he can see the actual data of how things are coming in but he just prefer to look at Polymarket.
Speaker 2:I mean, it's a fun chart to look at when it's going up from from Yeah. You know, up to up to 90%.
Speaker 1:That's amazing.
Speaker 4:99%. Wait. Let's see what it was like a week ago, the odds that we were gonna hit it was 50%.
Speaker 1:So Ken Griffin came in.
Speaker 2:Someone said is this is America. It's like we can bet on charity in this country.
Speaker 4:A lot of people who bet that we weren't gonna hit it are are doc DDoSing the site so we don't
Speaker 2:hit it.
Speaker 6:What were the lowest odds? At the beginning, it what was it?
Speaker 1:Oh, that's a crazy dynamic.
Speaker 4:It it looks like it hit a low of 50% a week ago. Wow. At the very start, it was hovering around 30%. Wow. Yeah.
Speaker 4:It's kinda crazy.
Speaker 2:I'm I'm tearing up realizing that we can bet on charity
Speaker 4:giving now. Dollars of betting volume on this. Man, why are so many people betting on this? That's hilarious.
Speaker 2:He's like, can you please just donate to the to the charity?
Speaker 1:Yeah. Instead of gambling on it. Oh, that's hilarious.
Speaker 2:Shout out to Ayush from Warp.
Speaker 1:Shout out.
Speaker 2:Married the love of his life in a five hundred year old cathedral in a 2,700 year old town in Spain this weekend. Absolutely fantastic. Love to see it. Love to see a young technology brother marry the love of their life. Now Ayush, please get back to building SaaS.
Speaker 2:What's this?
Speaker 1:This is Here Comes the Bride.
Speaker 2:This is the this don't think so.
Speaker 1:I think this is like
Speaker 2:Fair use?
Speaker 1:I think it's fair use. We'll see. Maybe we'll get struck. Let's keep talking. We we need a we need a wedding sound on the sound board.
Speaker 1:Anyway, congrats to him. It's a fantastic photo. I
Speaker 2:like that. Wow. So Palantir is launching a new campaign Mhmm. Saying, you're being sold an AI future where you're obsolete or irrelevant. We see it differently.
Speaker 2:Doomers say AI will take your job and then your life. Pacifiers say not to worry. Machines will handle reality as you handle the remote. They're all wrong. Americans are already wielding AI to work wonders.
Speaker 2:In factories to hospitals, they're ditching spreadsheets to solve real problems, make real things, and kick start prosperous era. The most prosperous era in our history. Today, we're launching working intelligence, the AI optimism project to see you to show you how this is great. The doomers will hate to see Palantir providing an optimistic future for AI in our lives. Should we pull up this should we pull up this clip of Gavin Newsom?
Speaker 1:We certainly can. We also have our next guest.
Speaker 2:There we go. Well, why don't we dive into our first guest of the show and we'll come back to that. Andrea from Snackshot who was of course profiled Friday in the Times. Great to see you.
Speaker 5:Hi. Same. How's it going?
Speaker 1:It's good. How are you? Great. Congratulations on all the progress.
Speaker 5:Thank you. It's been five years in the making.
Speaker 1:Five years. What was the what was the inspiration? What was like the first post? Do you remember?
Speaker 5:Yeah. It was about the rise of this new wave of nonalcoholic drinks. And look at it now.
Speaker 2:Is now the time to go long alcohol? Yeah. Yeah. The because I've been seeing people, you know, fading the, like, nonalc trend being like, alright. Everybody's laying off the alc.
Speaker 2:I'm gonna go on heavy.
Speaker 5:Yeah. I think so. Yeah. I I like, Gen z is into, like, buzz balls and, like, people are bringing back hypnotic. So a 100%.
Speaker 2:Hypnotic. We gotta get some buzz we gotta get some unfortunately, some members of our team are not 21, so we will not be bringing back buzz balls in this office. But I think but do you do you know about
Speaker 1:Yeah. Yeah.
Speaker 2:Is that is that around when you were
Speaker 1:Yes. Yes. I'm familiar with buzz balls. I don't think I've ever actually had one. I've seen them at the grocery store, though.
Speaker 1:But what yeah. What were the biggest They're
Speaker 2:not good.
Speaker 1:What were the biggest winners out of the nonalcoholic trend? Was it athletic brewing back then, or were there other were there other, like, companies?
Speaker 5:Yeah. I think the only one that I'm like like, I can say, like, okay. It makes sense
Speaker 7:Oh, yeah.
Speaker 5:Is NA beer because it taste it really does, like, taste like the real thing.
Speaker 1:Yeah.
Speaker 5:And then you have all these, like, NA drinks that I'm just like, dude, it's fucking just like a sugar drink. Yeah. And
Speaker 2:Yeah. That's what I never I I never invested in the the non out category despite getting a bunch of pitches because I was like, I can just have a diet coke. Yep. I could just have like a soda. Yep.
Speaker 2:I guess I get, you know
Speaker 1:Energy drink.
Speaker 2:There's just a lot
Speaker 5:of investing in like protein, heart I mean, there is already a protein heart heart seltzer brand.
Speaker 2:There's foods here.
Speaker 5:We have yeah. We have we have nicotine energy drinks now.
Speaker 2:Is that Okay. But we saw that. We I I don't think that's
Speaker 1:Yeah.
Speaker 2:I don't is it actually real? It seems extremely
Speaker 5:I literally like, I interviewed the founders when I wrote about
Speaker 1:They're doing it. Okay.
Speaker 5:It's they they hired one of the guys from CocoVita.
Speaker 1:Okay.
Speaker 2:No. That's that's a glitch. Do it's they it's illegal?
Speaker 5:So they're operating okay. So I asked them about this and they're operating under the Kratom category.
Speaker 1:Oh. Oh.
Speaker 5:I'm telling you guys, like, so
Speaker 2:so They're we're operating in a gray market of a drug
Speaker 5:operating in the, like like, smoke shop gray market area, but these guys are, like, from the Redneck Riviera, like, Destin, Florida, like
Speaker 2:Okay.
Speaker 5:The kind of person that would be behind this brand, and they don't give a fuck. They're, like Yeah. They literally told me, we're building this for the LA people, the Lower Alabama people. So
Speaker 1:Lower Alabama people.
Speaker 5:That's They know their target market. So Yeah.
Speaker 2:That's the bullshit. What about protein? Are we short protein? You can get protein in everything now.
Speaker 5:You probably I I and I've been reading studies about this. I think in the next ten years, there's gonna be people with, like, severe kidney, like, problems.
Speaker 1:Too much protein?
Speaker 5:Yeah. Your body cannot process the insane amount of protein that American people are putting into their bodies now. And so I joke when people are trying to push you like, you know, I saw protein croutons the other day and I was like, this is ridiculous. But I'd love to see people's blood work like
Speaker 2:No. I no. Won't add protein. I don't wanna add like a a meat or fish to my to my grain bowl. I'll just take protein croutons, please.
Speaker 5:Well, there's also now a brand that's doing protein greens and it's like a solid green. It's
Speaker 2:But don't don't greens have some certain oh, that's funny.
Speaker 5:I have no idea, but we're beyond parody at this point. Starbucks announced they're doing a protein foam matcha latte
Speaker 2:Foam?
Speaker 5:Starting this month. Yeah. Like, cold foam. You know, those drinks that have, like, the cold foam on the So, like, Starbucks is long protein. So I think we should be shorting it at Wow.
Speaker 1:The short
Speaker 5:Now that you're having that, I feel like we're like, okay. We're we can start backing out a little bit about that.
Speaker 2:Just calling
Speaker 5:It's been easy. Beyond protein, you know, like, now it's there's whole, like, creatine snack trend. And I came across, like, creatine you know, man's cereal is this creatine cereal that's launching, but then you also have things job. Creatine muffins, creatine croissants, and it's just that's what the the thing about what I love pastries.
Speaker 2:That that that I don't
Speaker 5:The science behind it is the science behind it is that carbs help our bodies absorb creatine better and faster. So that's the science behind it. But, yeah, that's kind of what I love doing what I love doing. It's like I come across, like, the most insane unhinged products, but it also is a testament of, like, the American consumers, like, optimists. Like, you will you can sell anything to Americans.
Speaker 1:Like Speaking of selling everything, the chat wants to know about psilocybin ice cream. I don't know if that's real or if that's just a joke.
Speaker 5:I mean, I've I've definitely seen, like, psilocybin, obviously, like, the chocolates.
Speaker 1:Yeah.
Speaker 5:There's some places in LA that I've do them the the teas. I've actually had some of those teas, but they operate on the down low. So it's like mushroom tea. Yeah. It's and it has, like it'll deal yeah.
Speaker 5:But it'll be, like, microdose, so it'll be, like, a little small bottle of them. The company is called Toastie Town. I'm obsessed with it. I actually smuggled some. Okay.
Speaker 5:I'm making Okay.
Speaker 2:You're live. You're live.
Speaker 5:Oh, okay. I'm live. But, anyways, great tasting, side of side of cheese. I'm not surprised.
Speaker 2:You smuggled it from the plate into your into your mouth.
Speaker 1:Yeah.
Speaker 5:My mouth. Yeah. Anyways, but, yeah, I'm not surprised if people are doing that on a d l. I don't believe that ice cream would be the best way to ingest it. I don't know.
Speaker 5:I would have
Speaker 2:to Have you seen anybody try to put cocaine back into cola yet?
Speaker 5:No. But I think at this point, I wouldn't be surprised if Coke just says, like, fuck it. You know? Like, what about this, like, so like, push into, like, the cocaine induced opulence of the eighties, and that's why we're seeing people, you know, wanna do three hundred milligrams of caffeine in one drink. We have the killer Panera lemonades.
Speaker 5:Starbucks is also doing taco
Speaker 2:bell lemonade.
Speaker 5:Energy drinks. So I don't know. I feel like America wants to and it yearns to be stimulated, and we're, like, kind of the reverse of the Ayahuasca, psilocybin kind of, like, brain dead, vibes.
Speaker 2:Do you think we're seeing more new CPG companies formed than ever? Because over the last few years, there's been less early stage investment activity or at least from from the institutional side. But it seems like there's still, like, a fire hose of new brands.
Speaker 5:Yeah. Because, like, a lot of the barriers of entry of these categories are so low. And it's really funny because people can just Kickstarter it. Like, Fly by Jing, which is doing really well. It's like a a Chili Crisp brand, and they started off with a Kickstarter.
Speaker 5:You don't really necessarily need venture money to launch a brand, a CPG brand, but, obviously, we've I think it's VC came in to corrupt the CPG industry and trying to, like, grow it in five years and trying to get, those exits, something like a Poppy or a Siete, that have been able to do it in less than a decade. But that's obviously, like, not necessarily the norm for the industry itself. But, yeah, there's
Speaker 2:certainly true. I mean, I've I'll defend venture capital with my life, but I would take a bullet for venture capital. But certainly certainly, a lot of brands that I love were started decades ago and it didn't raise anything close to what venture capital looks like today.
Speaker 5:I wish there was like a way to short c like new CPG brands. Like, so we need to do a polymarket for that.
Speaker 2:Brutal. Brutal. You're supposed to be there.
Speaker 1:Yeah. Yeah.
Speaker 2:But but isn't the isn't the competition good? We just, like, you know, we throw out we they're a bunch of budget bunch of I
Speaker 1:see what sticks, and every once while you get a great product that sticks around forever.
Speaker 5:I know. But, like, the Like Like, I mean, I've come across Palo Santo brewed water. And, like, people are trying to, like wood. Stuff.
Speaker 2:It's just Well It's like a certain type of wood. Really?
Speaker 5:The description of the product is like, you know, Palo Santo is what you burn to, like, sage yourself. And so, like, the product describes itself as, like, something that can, like, elevate your vibe.
Speaker 1:Okay.
Speaker 5:There's people who say, like, oh, you can have, like, spiritual enhancement through, like, these fucking $7 adaptogenic seltzers. And so at this point, I do think that we need to be more, like like, strict in what we allow to put out there because, like, none of that actually changes that there's Skittles water in the market, you know.
Speaker 1:Like Wait. Is there actually Skittles water in the
Speaker 5:No. There's actual Skittles water.
Speaker 2:I bet that raises your vibe crazy.
Speaker 1:Yeah. That seems pretty good.
Speaker 2:How do you do you sell some something What? I like, personally, I think the invest if if you're gonna invest in CPG, it it the only criteria that really matters is the product truly amazing. How much, how often are you surprised where you try a product and you're not impressed by it, but then it goes on to be successful?
Speaker 5:Oh, god. Yeah. And I've I've had spoken my mind about how I don't believe that people are buying $12 protein cereal, or you know, I'm not gonna say the name of the brand, but I there's a lot of things that I don't believe that make any sense to me, and I do believe that it's, like, VC and it has Distorted. Growth. Yeah.
Speaker 5:It's distorted, and it doesn't make sense. And I am someone who does spend a lot of time in groceries really observing from a more anthropological POV. Like, what are people really wanting to spend, like, a lot more on or, you know, how groceries became this, like, way of status signaling that you didn't have before. Like, our parents were, like, showing pictures of Heinz to their friends and being like, oh my god. I have, you know, this in my pantry.
Speaker 5:And now you have go
Speaker 2:edition ketchup.
Speaker 5:The grasa in their kitchen and even, like, the idea of what I call, like, a hype beast grocer, like an aroan or a happier grocery where it's like that it's so crazy that that actually exists. And then our generation, this form of affordable affluence where it's like, oh, yeah. I'm gonna go spend $30 on a 80 gram sugar smoothie for clout. And I I think the I saw the news about, you know, Emily Sundberg posted about that, like, everyone being inside of, like, a Kith, that members club. And so it's really funny because I think that's gonna be, like, the clout chasing final boss.
Speaker 5:Like, you dropped $6,000 on a membership to buy a $30 smoothie in New York. Like, you gotta love it. I can't hate it.
Speaker 1:I mean, badge value is real. People wanna be seen with something. It's an accessory. Like, there is something to that. I mean, it it might be bizarre and distorted, but it's real and monetizable.
Speaker 1:And so it won't will Yeah. Kind of natural.
Speaker 2:I like putting they should put all Airwans inside members clubs. Because I don't like my only critique of Airwon I mean, I I my only critique is like Riffraff. Crowds. Riffraff. I hate going in and you can tell like on a on a summer Yeah.
Speaker 2:Yeah. On a summer Saturday that it's like tourists. I don't wanna see tourists in my grocery store.
Speaker 1:Who Yeah. Who who do you who do you write for? Like who do you think your do you think your audience, you know, do you write with the mind of the consumer in mind?
Speaker 2:Do you do you Yeah. Action generation.
Speaker 5:Yeah. It's or is it more like the
Speaker 1:the industry participant, the investor,
Speaker 5:I the business come from PR and marketing. So, like, my POV was always like, I can kind of dissect this for you and tell you what of this product is mostly BS and a crafted narrative. And so I started this publication based on the idea of no one's writing in this, like, CPG circle jerk of an industry. Like, everybody's just writing for the buyer or for the retailer or whatever or for the other investors, but no one was really talking to, like, your average person who eventually finds us at a target and doesn't understand, like, how come we have, like, protein popcorn at Target? Where did that even come from?
Speaker 5:So, yeah, I write it's funny because, like, a
Speaker 2:lot you thought about putting protein, like, bundling it into the subs your subscription?
Speaker 5:Like Protein using subscription? Protein and vitamins. Well, my audience skew is very young, which is really funny. Like, I've even been invited to give, like, a guest lectures at colleges, which is interesting. My number one advice is, like, don't do it.
Speaker 5:Don't get into CPG. But it's it's interesting. Like, I, know, I it's
Speaker 2:it's people love it. It's fun to make things that you can Yeah. Consume and and physic you know, it's a very common story. Somebody's in finance. They're just in Excel all day long and then they start a beverage company.
Speaker 1:Yeah. It's much less abstract. Like, you are making widgets. It's a widgets business. Like, you manufacture something, you distribute it, you see it, and like
Speaker 2:And people think it's easy because they're like, okay, I just make a drink and sell it a lot of times, and then I exit for a
Speaker 1:full And the the time you see one of your products, like, in the trash out in the real world, and you're like, wow. Like, this is a real thing. It's amazing. Yeah. It's amazing.
Speaker 5:Yeah. So I try to, like, write I started writing for myself as an audience, but I guess that, you know, there's so many people that can take what it is. So, like, I you know, there's I have a a popular Instagram account as well. It's not just a newsletter, and I do a lot of memes there that have gone really viral. It's funny because, like, oh, they're, like, celebrities like like, BJ Novak and, Kira.
Speaker 5:I forgot what her last name is, but, Kira Kipka. And, like, all these random people that I'm like, wait. How did you even find out about this?
Speaker 2:Like, People love snacks. Yeah. It's a universal language.
Speaker 5:Universal experience. So, yeah, I guess that is a very universal subject, but the way that I write it just makes it a lot more relatable and digestible to your average person.
Speaker 2:Are you long or short celebrity brands?
Speaker 5:Good question. Oh, super short. I like I was saying, like, we someone needs to make polymarket for CBD. Maybe that maybe I'll
Speaker 1:do it. What are you long? Are you long, like, legacy brands then?
Speaker 5:Or I I I consumer? A 100% that. But I what I'm fascinated with right now that I I wrote a deep dive on this, like, three years ago, the inner like, the influence of wearables on what we decide to eat and drink. So I'm very invested in not personally because I don't invest. But I like, I'm very fascinated with how, you know, there's the trend of people not drinking at a certain age because they're wearing the whoop.
Speaker 5:They're wearing the aura. This whole, like, the new hot biometrics, which is, like, people wanting to know what their cortisol looks like. I I just talked to a company that has cortisol strips that you put in your mouth and you they immediately, like, populate the information into your cell phone. I think that's crazy. I love the idea of technology advancing enough that you can potentially have one one day a noninvasive glucose monitor that can tell you like, oh, you know, you shouldn't be doing like drinking this or whatever how it affects you.
Speaker 5:But there's brands now, the guy from Oatly, he launched a brand called Good Idea and they developed this ingredient that counteracts your sugar spike if you drink it with meals. So I think that's really cool.
Speaker 2:Think Important because oat oatly massively spikes your Yeah.
Speaker 5:He's trying to, like, undo his like, what he did in that whole company. But I think that's fascinating. I'm like Explaining to people to be
Speaker 2:on that your body, like, processes your your oat latte just like it's a a a Coca Cola is is mind blowing for people. Yeah.
Speaker 5:But you don't have to be Brian Johnson at this point to be able to, like, understand your body in that sense. But
Speaker 2:Yeah. Anyway. Fascinating. Awesome. Well, congrats on the recognition and the profile.
Speaker 5:And It's so nice to be here.
Speaker 2:I know. Thank you for all the support since day one.
Speaker 1:It's a great hangout.
Speaker 2:And it's great watching you win.
Speaker 1:We'll talk to you soon. Cheers. Have a good one. Bye. Get that mallet ready, Jordy.
Speaker 1:We have some news coming into the TVP and UltraDome from the Restream waiting room. We have Rain. Welcome to the stream. How you guys doing?
Speaker 2:Welcome.
Speaker 1:Give us the update. Introduce yourselves. Tell us what you do. Tell us the news. Give us a big number, please.
Speaker 8:Hey. We're cofounders of Rain. I'm Farooq. I'm Charles. And, yeah, we're building stablecoin infrastructure.
Speaker 8:We just raised a $58,000,000 series b.
Speaker 1:Let's go. 52
Speaker 2:hit of the day.
Speaker 1:It's crazy. And what was it? 52, 58? How much money?
Speaker 8:58.
Speaker 1:58. 58. And and and that 58,000,000, it's still worth 58,000,000. Right? Because you're keeping the stable coins.
Speaker 2:Exactly. Right? Because
Speaker 1:you already rip it into World Liberty Financial.
Speaker 2:Hopefully not.
Speaker 1:Hopefully not.
Speaker 2:Yeah. Yeah. Just I I'd love to just better better understand the business, kinda go a little bit, below the surface. What what are you guys, doing? What kind of customers are you working with?
Speaker 2:All that good stuff.
Speaker 8:Yeah. We we power a lot of, like, global payments use cases powered by Stablecoins largely on top of the Visa network. We are I have Stablecoin based card issuing platform as well as a Stablecoin based payments institution. So we connect any use case with any sort of payout mechanism around the world. Anybody can embed stablecoins into their app and just rip it.
Speaker 8:You know? We can give US dollars to everybody around the world.
Speaker 2:Let's give it up for just ripping it.
Speaker 9:Some of our customers include Nuvae, a large payment process payment acquirer. Avalanche, we power the Avalanche card. We power a lot of dollar access cards in Latin America and emerging markets.
Speaker 2:Got it. Yeah. I was gonna ask, so, like, is is a lot of the business international at this point?
Speaker 8:Only about, like, 50% of the business international. We power a lot of US use cases where consumers are dealing with stablecoins, but it feels and looks like a regular credit card or debit card product. Mhmm. And so it's not just global. It's everything.
Speaker 8:What we our thinking is is let's just upgrade the infrastructure in the back, and then the consumers and the users can feel whatever they wanna feel with whatever they already have.
Speaker 1:Yeah. What what what are the tangible benefits for the American consumer who might be using just normal Visa network card? Does if you're if you're using a stablecoin as the backing, is that going around the Visa network entirely, or are you still plugging into the Visa network at some point?
Speaker 8:We're still plugging into the Visa network, but I'll give you an example. Okay? Like, Rain is the only company that settles seven days a week with the payment hour Mhmm. Using stablecoins. That lets us have significant savings in terms of collateral that our customers need
Speaker 1:to post. Cool. Got it.
Speaker 8:So the end user advantage is not necessarily to the end cardholder.
Speaker 1:Yep.
Speaker 8:It's for a partner that's operating the program. So you can launch faster. You can service more people. You can be more flexible. You can operate cheap more cheaply
Speaker 1:Yep.
Speaker 8:You can make more money. And so for us, it's really about driving cost down, driving revenue up for our customers Yeah. And using stablecoins to do that.
Speaker 1:A typical Yeah.
Speaker 7:Yeah. Four has to,
Speaker 9:like, four days of collateral or long weekend risk, and we're able to bring that down to less than a days of collateral.
Speaker 1:Yeah. So it it is the long term that you might see someone try and compete with, like, those popular credit cards, like the Chase Sapphire Reserve or AmEx Platinum or something, and they're able to pass through more savings because they're saving more, so they acquire more customers that way, and there's this flywheel there. Is that is that how we might see something like this actually go really big in America?
Speaker 8:You can already see things like this happening in The US. Like, we have a number of customers that are paying, like, 3% cash back, and Yep. They're meeting head to head with some of these programs. And for us, it's really about, you know, being the partner that you can scale with Yeah. At a significant cost savings.
Speaker 8:And so our customers are able to just move a lot quicker.
Speaker 9:Yeah. If you look at the ether five card, which we power, they have really competitive rewards that they offer.
Speaker 2:Nice. You guys start correct me if I'm wrong, but you guys started in, like, 2021. Is that is that right?
Speaker 9:Yeah. We were actually so we initially built this product called SirenWire, which was a little bit competitive with Party Rock.
Speaker 2:Yeah. Yeah. Yeah. Yeah. That's that's what I was getting at because I know obviously, I'm looking at the website.
Speaker 2:Look, obviously, you guys evolved a ton but I remember Yes. I remember those days. Yeah. And we we had we had stable coin we had stable coin functionality in our product but we just after the what I was gonna ask you about is like navigating kind of the FTX kind of crisis because at that point, we had to basically completely jettison or or or remove a lot of the stablecoin functionality that we had because at that point, every major financial institution was just saying like, look Risk off. Risk off.
Speaker 2:Exactly.
Speaker 8:Yeah. I mean, we look we were lucky to find a way through that without having to, you know, cut down on all this stablecoin stuff. And it was actually a blessing for us because we were able to build in relative obscurity
Speaker 2:Yeah.
Speaker 8:All technology that we now take for granted and be able to use that with volume and multiple years of history that now, like, large enterprises come to us, and they're like, wow. You've been doing this for several years. And, you know, anybody starting today is gonna have to start today. Whereas with us, we've started several years ago, and you get a battle tested solution, which has been our advantage in the market.
Speaker 2:Yep. What do you guys, obviously, we have new stablecoin regulations. What are you guys expecting from the market broadly over the next, call it, six to twelve months?
Speaker 8:It's it looks like it's a lot of people are gonna explore what stablecoins mean for their business and for their bank or for their app, and I think that that's all very good. Right? And our hot take is that it's probably gonna look like when people started issuing, like, you know, gift cards
Speaker 1:Yeah.
Speaker 8:That you can buy, you know, CVS where, you know, I can get a Red Lobster gift card and all these other things. But if you can't use it anywhere else, is it really money?
Speaker 2:Yeah.
Speaker 8:That's what people are gonna run into. And a lot of folks come to us when they launch a stablecoin, and they're like, oh, wait. Like, I can't use this anywhere. Like, what if there was a partner that lets me and my customers use this in more places? Yeah.
Speaker 8:And so that's where we come in. Right? We we just started part we just partnered with the state of Wyoming where on the first day of launching their Frontier token, it was accessible and usable on the RAIN infrastructure anywhere that Visa's accepted globally. So just from Wyoming, we were able to take it to the world without them having to do anything.
Speaker 2:That's wild. What is every state gonna launch a a token, or or do you think they're an anomaly?
Speaker 8:Some states will probably launch tokens. I think other states are still probably figuring out why they're anti all this stuff. Yeah. I think this Yeah.
Speaker 1:What what is the rationale for for an individual state not launching an a token that's tied to the economic prosperity of that specific state but just backed by USD. Like, that seems extremely redundant, and and I could not wrap my mind around the benefit of that.
Speaker 8:I mean, a lot of these states, like in Wyoming, for example, they see this as an opportunity to build a state backed token where a consumer around the world knows that, hey. This is supported by a government institution. It's going to be one to one. They're not having to take the risk on a private market issuer that could have a run on the bank. And so there's a potential market for there to be, hey.
Speaker 8:You know, this is a public sector token. It's more trustworthy because it's issued by a regulated by by a actual Sure. State. So is
Speaker 1:that just like a runaround, the no central bank digital currencies, like, vibe that we're getting out of DC?
Speaker 8:I think that there are gonna be a lot of different types of experiments on how do we get around this, like, no central bank digital currency thing. Yeah. Like, ultimately, if you look at the dollar, if you go back far back enough, most of them were just issued by public like, private banks. Right? Dollar dollars were issued by, like, your local community bank.
Speaker 8:And then eventually, they were issued by the federal government, and we're probably gonna have several countries where it's gonna be issued by your local private bank and or your state and other places where it's gonna be issued by the central bank and maybe other places where it's gonna be just issued by your corner store or Walmart or Amazon. And, I mean, it's gonna be interesting to see what the next few years looks like because it we're gonna see if it's like Cambrian explosion of whatever people wanna do.
Speaker 2:And that creates an opportunity for you guys to just be in the back end swapping in and out of all these random stablecoins that each represent a dollar but have varying levels of liquidity and Yeah. Is that is that right?
Speaker 8:I mean, you don't know like, if you have cash in your pocket, I mean, I don't, but you may. But most of the bills in your pocket are issued by or, you know, they have a different Federal Reserve on them. Like, do you know? Do you care?
Speaker 1:Sure.
Speaker 8:Like, is it Denver Federal Reserve? Is it the Kansas City one? Like, which one is it?
Speaker 9:So we really built our infrastructure to be agnostic of whatever stable point is people wanna use, you know, people wanna spend them. And we have direct relationship with these issuers, and we're just providing that utility layer for them.
Speaker 2:Yeah. That makes sense. Last question. Aaron Frank told me to ask you. You've already given some hot takes, but he said to ask for some hat takes.
Speaker 2:You said you're very opinionated on hacks on on hats, Farooq. Anything there or is he just messing with me?
Speaker 8:No. Hey. Look, I'm a big deep hat guy. So, like, think your hat looked very nice because it looks like a nice deep hat. Charles is more of a dad hat guy.
Speaker 2:Never dad hat. Never dad hat. I didn't know I didn't know the Yeah. I didn't know the the terminology for it. But dad hats are over.
Speaker 2:We'll have
Speaker 8:Put this here address as brand new rain hat.
Speaker 2:We'll do it. We'll do it. Awesome, guys. Well, congratulations. And you you started the company at the right time, and it's awesome to see the progress.
Speaker 1:Cool. We'll talk to you soon. Congrats on the round.
Speaker 2:Cheers.
Speaker 1:Talk to you soon.
Speaker 2:How'd you sleep? We Hi, Jordan. We talked to so many incredible entrepreneurs building so many incredible things and yet we still solve the Internet crisis. Yes. There's a global Internet crisis.
Speaker 1:I'm 84 last night. But I think this doesn't count some of the going to sleep I got. What'd you get?
Speaker 2:I got a this is this is crazy. Went to bed at 08:32. Eight? Woke up at 05:30
Speaker 1:Okay.
Speaker 2:But only got six hours of sleep. Just up and up. Because
Speaker 1:Middle of
Speaker 2:the Three year old. Kids. Was going the whole house. It was going crazy. I walked I got up this morning and my my
Speaker 1:What was the final score?
Speaker 2:62.
Speaker 1:Oh, play the sound effect for me. Let's go.
Speaker 2:I I woke up this morning
Speaker 1:One zero this week. Let's see. It's short week.
Speaker 2:Get up.
Speaker 1:See what I can do.
Speaker 2:I get up get up at 05:30, walk out of my room. Three year old walks out of his room holding sandwich.
Speaker 1:That's hilarious.
Speaker 2:Holding a
Speaker 1:Where does
Speaker 2:he got at some point, got up in the night and just grabbed the sandwich from the fridge. Yeah. There is
Speaker 1:a certain moment where the kids be they they like stop being like babies and they start just being like roommates. And you're like, oh, like you're just like
Speaker 2:It's like dude, what are
Speaker 1:you in the fridge bro? Like, did you ask? Did you ask if you could eat my sandwich?
Speaker 2:It was his sandwich to his credit.
Speaker 1:We got Yeah.
Speaker 2:We we got a takeout yesterday. Okay. But but still I was like, dude, it's 5AM. Why why are you where are you?
Speaker 1:He's actually just nine tenths of the lodge already. Yeah. Apparently sleep.com. Get a pod five.
Speaker 2:Five Go to TBN.
Speaker 1:Thirty night free risk free trial, free returns, free shipping.
Speaker 2:So apparently, the judge issued a sealed decision in the Google case trying to figure out what any more details.
Speaker 1:Oh, yes. We got we finally got the Google results, but we don't know exactly what it is. I don't know. In other news, Benny Safdie collapses into tears during the fifteen minute standing ovation for the smashing machine. Do people realize if The Rock wins the Oscar, he's going to run for president?
Speaker 1:41,000 likes. I think people want The Rock to run. That'd be great. What do you think? You think The Rock could pull it off?
Speaker 1:Did you see his new slimmed down look? He lost some weight. He's not he's Do wearing his
Speaker 2:you think he's just getting ready for mask the mask a mask gain run?
Speaker 1:I mean, back half the year. It's coming, clearly. I
Speaker 2:mean, it's hard because he's He so
Speaker 1:he is he is getting older. It seems like it's probably a more healthy decision to to take off some of the weight and not walk around. But I'm excited. I know you won't be seeing this movie because you've never seen any movies, but I will be checking out the smashing the smashing machine. Looks pretty good.
Speaker 2:So, anyways, can't figure out what's happening with Google yet, but the stock is up in after hours trading.
Speaker 7:Mhmm.
Speaker 2:So I guess he likes it.
Speaker 1:This is a this is a good one. So there there's an interview with the the CEO of Chevron in the New York Times. And there's a quote here. So what are you trying to learn about right now? Asks the interviewer.
Speaker 1:And the CEO of Chevron says, artificial intelligence. So what's the last thing you asked AI? He says, my last question was the biggest was about what was the biggest merger in The United States last year? And they say, what was it? Is it our acquisition of Hess?
Speaker 2:So This is the power of AI.
Speaker 1:Power of artificial intelligence. Priceless. Going just going to AI because you're the CEO of
Speaker 2:Just asking about your own activities.
Speaker 1:Yeah. I don't know what was he expecting a surprise there? Like, that is such a funny such a funny result. Anyway, we have Mike Maples from Floodgate Capital in the restream waiting room. We will bring him into the TV panel for you.
Speaker 1:Mike, how you
Speaker 2:Welcome to
Speaker 1:the show. How are you guys doing? We're doing great. Thanks so much for hopping on. I don't know if you read that article, that interview with the Chevron CEO.
Speaker 1:Did that surprise you?
Speaker 6:No. I haven't. You know, I gotta say that it's a little bit out of my lane. I'm I invest way too early in startups, and so Chevron is not top of
Speaker 1:my Top of your radar. Yeah. Jordy, what are you?
Speaker 2:Well, I I still think it's fun to use AI to research yourself. Yes. Chevron CEO was researching his own business activities to to validate. Think his but I'm sure it's fun to look up some of your best investments in ChatGPT. But it's great great to have you on the show.
Speaker 6:Yeah. Thanks for having me. I've been fans of what you guys have been doing even even when it started as the Tech Bro podcast.
Speaker 2:A long time ago. Nine months ago.
Speaker 1:Right. Yeah. I I think we might have replied to one of your posts. We had some fun with that. It was a good time.
Speaker 1:Yeah. Anyway, what how would you introduce yourself to the audience? What what what what's the right way to think about your position in the in the ecosystem right now?
Speaker 6:Yeah. I'd say that I'm I'm kinda one of the OG seed investors. And so, you know, seed investing wasn't really a thing twenty years ago. You know, you you either scared up a few dollars from angels and friends, or you went straight to raising 5,000,000. And so guys like myself and Josh Koppelman started to create these seed firms, And things have obviously changed a lot.
Speaker 6:Now nobody questions whether they're seed investing. Now there's, like, 2,000. You know? Now if you go to LinkedIn and type seed investor, I think you get more of those than there are founders now. So it's changed a lot.
Speaker 6:Yeah.
Speaker 1:What's been the what's been your strategy for dealing with the change in in the market structure? I mean, some firms have been like, I need a massive growth fund so I can ride my winners all the way up. I need to, you know, really, like, incubate stuff and, like, get huge ownership stake at the early stage with less capital. What's been most enticing to you?
Speaker 6:Yeah. You know, what I what I started to realize was I always say to founders, you have to avoid the comparison trap at all costs.
Speaker 7:Mhmm.
Speaker 6:And that, you know, startups role in the world is not to be better, but to change the subject. Mhmm. So I realized about ten years ago that I was a hypocrite giving that advice because here I was one of 2,000 seed funds. Mhmm. And so I was like, you know, I'm playing the comparison game all the time.
Speaker 6:And so what I started to do is to try to say that I I don't wanna be pitched anymore. That I want to find founders before they figured their ideas out and get to know them and and come up with ways to help them evaluate whether they really wanna pursue the idea or not. And so, you know, there's that famous essay that Paul Graham wrote and Brian Chesky talked about founder mode. I like to find people who are in builder mode.
Speaker 1:Builder mode.
Speaker 2:Sorry. That's a little little sound effect for you.
Speaker 6:Yeah. Yeah. We'll have a complimentary one for for builder mode, I suppose. But I
Speaker 1:like I'll
Speaker 2:add that.
Speaker 6:Who are, you know, pursuing something almost to an unreasonable degree. They're down some rabbit hole. They're not sure it's a business yet, but they're doing it because it's interesting for its own sake. They're you know, people are living in so that's really what I try to do is find the what the prime movers to be. Yeah.
Speaker 6:And and it may this may appeal somewhat to your all sensibilities, particularly, you know, some of the founders fund adjacent stuff. Right? Yeah. But you're kinda you know, I just think that that some people just have this very rare blend of determination and original thinking, and those people to me are the prime movers. And my job is to find those people before the rest of the world moves.
Speaker 1:Do you have particularly favorite, lakes to fish in? You know, there's the folks that are, you know, at Stanford and Waterloo constantly. You know, the Thiel Fellowship is pulling from pulling kids out of college. YC pulls a lot of new grads, casts a really wide funnel. Chris Dixon was famous for kind of hanging out on Reddit and finding like these little pockets and communities where, oh, there's a bunch of people doing three d printing online.
Speaker 1:Let me go find a three d printing company or VR or whatever else. That's where the Coinbase investment, I think, came from. Saw saw the community there. There's other people that are, specifically graded at pulling founders out of big tech big tech companies. What what how do you think about the different lakes to fish in for the next generation of founders?
Speaker 6:Yeah. One of my mental models, I call it freshmen and seniors. Mhmm. And so, you know, like, when I first met Justin Kahn when he was doing Justin TV, which became Twitch
Speaker 1:Yeah.
Speaker 6:He's a year out of college, and he's sold his prior company with Emmett Shear on eBay.
Speaker 1:Yeah.
Speaker 6:And, you know, these guys didn't know much about They
Speaker 2:sold their company
Speaker 1:You don't know their story? No. Yeah. Their first YC company. I mean, you can tell it.
Speaker 1:You know it better than I do.
Speaker 6:Oh, yeah. So so I'm I'm sitting in a coffee shop with the Weebly guys, and they were pitching me. And pitch is almost over, and I see this guy show up in the door, the coffee shop. And he's wearing a baseball cap and a camera on it and wires going into a backpack. And I remember thinking, that's kind of a strange dude.
Speaker 6:I wonder what's up with that guy. And, you know, as as the meeting's wrapping up, he's walking into the place. And David Rosenko of Weebly goes, did you get your email earlier today? I was like, what are you talking about? Well, we got this friend, Justin Khan.
Speaker 6:He's got this new idea, Justin TV. And right then, Justin sits down and turns his laptop around, and I'm on the laptop screen because his camera's looking at my face, and he's I'm gonna do a twenty four seven reality show of my life and broadcast on the Internet. And I and I was like, Justin, that's that's one of the dumbest things I ever heard. Like, that's not even how reality TV works.
Speaker 2:You know, Rick Brady TV Script it. Part of some degree.
Speaker 6:They script it and they condense it down. Nobody wants to watch you like you're some fish cam all the time. Right? Like, that's not like, you're not even describing what the business is. And he's like, you're supposed to be a CTO g.
Speaker 6:Why are you shitting on my idea? And I was like, you know, it's terrible. But, like, what's how do you even do it? What's in your backpack? And so he showed me how Kyle Voatte, right, who was a genius, had designed this thing that did EVDO cellular combined with Internet software.
Speaker 6:And so that night, I was just, like, researching them a little bit more, and I'd seen that Justin and Emmett had sold their prior company on eBay. So they had a calendar company called Kiko. And it's an Ajax calendar at the time, and Google decides to Google Calendar. And they're like, okay. We're we're out of business.
Speaker 6:So why don't we try to sell this? So they they try to sell it normal ways. Nobody will buy it. So they just put the company on eBay, and they sell it to two cows for $250,000.
Speaker 1:There we go. Isn't that incredible? I thought, you know
Speaker 2:Just common sense. We wanna sell something. I don't know. Put it on a big marketplace.
Speaker 1:EBay. But one of
Speaker 6:the things back to kind of where do you look for things, I like I call those freshman founders because they they they they haven't been polluted by the conventional wisdom echo chamber of the valley yet. They they think that all you need to do is build stuff and sell stuff, and the rest of it is a waste of time. They don't even know that there's time to waste other than doing those things because they don't have to unlearn anything. They don't know much yet. And that ends up being really valuable because they end up caring about the right things.
Speaker 6:And then sophomores and juniors, I have less luck with. So the sophomores are like, they read a few too many blogs. They spend a little too much time on Twitter. They know a little bit too much that's not worth knowing. And then the juniors are the worst.
Speaker 6:They've worked at Google and Facebook and a bunch of fancy companies, and they decide it's time to be anointed as a founder. And so they raise a $5,000,000 seed round and pay their buddies quarter of a million bucks a year each. And, usually, you know, run out of money halfway into it, raise some more and then they decide not to do it because they can get a bigger job that pays better
Speaker 1:Yeah.
Speaker 6:Back at a big
Speaker 2:It's also interesting too with Justin. He he didn't have enough experience to realize that it was a dumb business opportunity to stream his life. But then it turned out, you know, over a decade later, some of the most popular streaming content is people just filming their entire lives. Like he was He was a living twenty years in the future.
Speaker 6:Yeah. Yeah. Justin wanted to be an influencer before there was such a work. Right? He wanted to be Internet famous.
Speaker 6:And so what you realize in hindsight is he was trying to solve a problem he had. And and those are the the types of freshmen that I've had the best luck with. They're scratching their own itch. Right? They're living in the future.
Speaker 6:They they don't really even think at first that it's a business opportunity. You know, Marc Andreessen, he did the Mosaic browser when he's 21 years old, he's just trying to make the Internet useful, and it wasn't. And so he built what was missing. And then the seniors, I've had luck with too, like Casser Eunice at Applied Intuition.
Speaker 1:Oh, yeah.
Speaker 2:He's little bit of luck.
Speaker 1:I love I love him. And, you know, every time he comes on the show, it's so much fun.
Speaker 6:He's great. And so so, like, the thing about Cassar is he was experienced enough that he knew that what matters is building and selling and all the other stuff is window dressing. And so ironically, the the freshmen and the seniors have the same priorities, but for different reasons. You know, the freshmen have the benefit of the beginner's mind, and they don't know a bunch of stuff that gets in the way of them succeeding. And then the seniors know enough to know that some of it's not important.
Speaker 6:Yeah. That it's yes. And so they they focus on the stuff that matters. And I I love working with both because it with the freshman founders, you're trying to help them avoid avoidable mistakes. Whereas with somebody like Kassar Eunice, you're trying to help him run up the score, you know, because, like, you know, he knows what he's doing.
Speaker 6:You know, he doesn't have to learn business one zero one. But, you know, there are there are other things that where you could be helpful. Yeah.
Speaker 2:You even noticed that in my my curve. My first my first company, an ad network was like very freshman mindset. I mean, was, very young at the time, but it was like, get something for one price, sell it for another, and do that over and over and you're gonna have a business. And then my second company was like, oh, we need to wedge products and we need to do this and that and like if we're gonna do this and then that. And then that that's a really, you know, created something complicated because maybe I'd read too too many memos on on tech Twitter or whatever.
Speaker 2:And then third, being TBPN, it's like we just we have a daily show. We try to make it better every single day and we just do that over and over. So I think you can see that kind of freshman or senior mindset even across an entrepreneur's companies. Yeah.
Speaker 6:And I think the other thing you guys did well, I don't know. You I wasn't there when it happened. But I imagine that when you started it, you weren't super attached to how successful it had to be. It was like, you you take a small enough risk that it you're not attached to whether the risk pays off or not. And if it starts to go your way, you just do more of it.
Speaker 6:And a lot of the a lot of the great startups that I've gotten involved with had that quality where, you know, you didn't try to think of a startup. You were just doing something that was interesting, and it just kinda fed on itself, and then one thing led to another.
Speaker 1:Yeah. Who else sticks out as that freshman archetype that you've worked with in your career?
Speaker 6:I'd say the guys at Weebly were that way. So that was a very that was a very fortuitous two hours, you know, in that coffee shop. One one after the other. Two deals done. Two deals in one hour, you know, that folks did really well.
Speaker 2:Just do that every day, and you'll produce Okay. Trillions of dollars in return.
Speaker 1:Talk to me about about Weebly's business, how it grew, the actual economics of that industry. And then I want I want to bridge to, like, your take on the new crop of site builders because we've been having this debate over the lovables and the and the different companies that are playing in this space, v zero. There's a whole bunch. And we're kinda going back and forth on, like, is it just such a big market that everyone wins and everyone builds a huge business? Or is there some sort of winner take all dynamic?
Speaker 1:So if you could walk through the Weebly story and then kind of bridge to modern web development, I'd love to hear that story.
Speaker 6:Yeah. And the Weebly, it it may not satisfy our modern desires, but it's it's it's kind of interesting. So these guys were about to graduate from Penn State, and I think we invested I think I think they raised $650,000 at $2,000,000 pre money. And it was like Anderson and Biden Senkitt, a couple of guys. Yeah.
Speaker 6:Those those were back in the days when Paul Graham would call you and to make sure you were gonna show up at demo day. Right? At at what? Because the batches would be, like, 10 to 15 companies. And and so so I remember it's, like, two months after the money's cleared, we have another site visit with them.
Speaker 6:Mhmm. And I and I'm like, you know, we ought to start thinking about what we're gonna need to do to be ready to raise a series a. And I said, so what do you guys think we need to do to be ready to raise a series a? And they look at me like, what are you talking about? And I say, well, you know, you've raised $650,000.
Speaker 6:And they look at me like, I know. Right? And I realized that, like, to them, $650,000, it might as well been 650,000,000. Right? Like, it's more money.
Speaker 6:They they they they were surprised it was illegal for them to have that much money. Yeah. It's very And so they they ended up they ended up not raising money again until many, many years later from Sequoia. And at that time, I think we were, like, 65 times in the money on the investment. So I don't know that it it it gives any lessons for today's world other than just I've I've kind of I kinda make fun of my ability to predict how these things are gonna turn out, and that's why I'm so founder focused.
Speaker 6:Right? I just think that that determination is just such the high order bit.
Speaker 2:Do you do you think do you think venture's easier or harder game than it was back when you could get, you know, invest 650 k to two cap into some great founders? Because in some ways, it's like, it's much more competitive now, but also the nature of there being more capital means And that
Speaker 1:for extra reference, Weebly I mean, I'm not sure if this is a 100% right because it's an overview, but acquired by Block Square for $365,000,000 in cash and stock in April 2018. $365,000,000, that's a seed round nowadays. Oh, yeah. It's a good news stream.
Speaker 6:So there's no question it's gotten harder as invest right? And I think even as a builder, I think there's a lot more distractions right now for the founders, and there's a lot more sloppiness on the playing field. And so you gotta play the game that's on the field, whether you're an investor or a founder. I think, you know, back in the days when, you know, Justin was and Emmett were doing Twitch or, you know, what what became Twitch or the David and those guys, Dan doing Weebly. I think it was more of a an act of rebellion to start a startup.
Speaker 6:Right? The the.com meltdown had happened about five years prior. You know, startups were not a popular sexy path for people. It was it was the path for people who didn't wanna have a job at a normal company. And that was the, you know, the only way they could avoid it.
Speaker 1:It's incredibly trendy right now. It has become like
Speaker 2:It's trendy and it's comfortable.
Speaker 1:It's tracked.
Speaker 2:Yeah. It's com you know, if somebody can quit their job in big tech
Speaker 1:Yeah.
Speaker 2:And then maybe they're not making quite as much but but they've got a nice office and they can, like you said, hire all their their friends.
Speaker 1:I will throw out a counter to this, which is I was thinking about the El Segundo companies and the hard tech companies. I don't know if you've spent any time with those folks, but it that feels like, you know, Mountain View in 2008 to me where Yes. These these founders are taking extreme risk. There's not gonna be a $10,000,000,000 acquihire from some mag seven company for your rain cloud seeding company. Like, if it fails, you're look.
Speaker 1:You're getting a normal job. And and and and you're not doing tons of secondary and raising a ton of money and hiring everybody. And so you really are burning more of the ships when you do one of these crazy hard tech companies. But I don't know if you spend any time with those or you have a take on that.
Speaker 6:It's funny you say that. So I think it may have been the only company I invested in in 2021. Certainly, the second half was a company called Hadrian.
Speaker 1:Oh, yeah. Gonna tell it.
Speaker 6:Yeah. And, like, I just think Chris Bauer's a stud. Right? And he's like, you know, what we're describing about the the types of founders who overcome obstacles and can move the world down a different path, he's one of those. Yep.
Speaker 6:And so but but he's a perfect illustration, right, of what you're
Speaker 1:And, I mean, I I don't know if twenty twenty one's the exact year, but, like, there were a couple years there where, like, you could see the toll that the business was taking on him. Like, he was working extremely hard, and you could tell that it was not there was not some cushy soft landing for him. It's like either you build the thing, you get it to work, and it becomes really big or you're kinda screwed. I don't know. I don't know.
Speaker 6:Being a real founder in some ways is more of a curse. Right? Like, most people, it's just like it's not a fun job. It's kind of a
Speaker 1:shit job. Yeah.
Speaker 6:And it's like if people really understood and it's but it's like you're you're called to do the thing, and so you can't not do it. So it's it it doesn't feel like you have any choice but to do it because the you know, there's no way Chris isn't gonna do Hadrian. Right? He's just too he's just too high agency and too high commit commitment to to let it fail. Right?
Speaker 6:And
Speaker 2:so Yeah. You ask any any founder what the lowest point in their life is, and it's probably has to do with their business. Right?
Speaker 1:Oh,
Speaker 2:okay. Maybe some family thing, but almost always they have like a specific moment where they're everything was Yeah.
Speaker 1:Zooming out, I I was I was reading the the Caesars Palace coup this weekend about the birth of Apollo, the private equity group. And I was thinking about how these these there's these eras in finance when there's booms like the LBO boom in the eighties, the high frequency trading boom. And then there's there's multiple venture booms. But I was wondering I was trying to think about, like, is who who's the person, like, 40 who's building the next great financial firm? Like, there are lots of great young investors who are writing checks or building companies, and there's a
Speaker 6:lot of
Speaker 1:founders. But I was having my I was having trouble putting my finger on someone who's who's young and actually set on building a financial firm of some course. I don't know if anyone comes to mind for you. I asked ChatGPT, and the answer it gave me was Josh Kushner, which is
Speaker 6:I would have said Josh.
Speaker 1:Which is great. It's true. But also, it's like he's an investor in OpenAI. So I don't know if it's a fair play. But but is there anyone else that you've seen that maybe is taking a different tact in building a financial firm for the future?
Speaker 1:Like, what what your advice would be to somebody who wants to actually make a career out of venture capital? Leopold's another good one, I think. Yeah.
Speaker 6:Anyway Yeah. It's a good it's a good question. I haven't seen a lot, you know. One way I've one way I would come at that question is to say, what is the financial product that entrepreneurs aren't getting? Yep.
Speaker 6:And and I think that it's probably some combination of venture capital meets project finance. And so I think you have some of these that are, you know, in the world of atoms and bits, and it it only seems like Elon Musk and Palmer Lucky and a few other guys have been able to pull them off. Yep. And and you could say, well, that's because there aren't many of those. And that I think that's true.
Speaker 6:But another way to come at that might be to ask, you know, is it is it a good thing that Elon had to basically bet his entire PayPal fortune to make Tesla a possibility. And but for that, there would be no Tesla because he had to bet all of his winnings on that. And I think Palmer probably similarly invested a lot, but he also had help with the Founders Fund folks who are pretty pretty, you know, off the beaten path at the time. Yep. So so I do think that there is there's a legitimate argument that says that a lot of our institutions that combine the worlds of atoms and bits need to be reimagined.
Speaker 6:And people say, why does a venture capital do that? But I don't think venture capital as it's designed today is is tailor fit for that. I think it's probably some type of new innovation. Right? And it would be almost the opposite direction of y c.
Speaker 6:It'd be something that is more in the upstream capital markets rather than lean startups and that kind of thing. But I think I think that could be kind of interesting. I'd like to see somebody do that.
Speaker 1:Yeah. We're starting to see a little bit of that with I mean, you hear a lot about those, hard tech rounds where it's very clear that the headline number is a mix of debt and equity, and that's usually two different firms. And then there's always been this question of like, is there a way to bring some sort of, like, Silicon Valley technologist mindset to essentially a turnaround of a legacy company where there are some assets, but there's something that the company can stand like, that was what Chris Power at at Hadrian was working on before he was doing a search fund.
Speaker 6:Yeah. Yeah. And it's and it's interesting. Right? There there are some people that I look to.
Speaker 6:Another guy would be the the Stefan Voncell of Moderna. You know? Like, you have some like like, one company I was involved with back in the day was Okta. Yeah. And when you saw Okta, you're like, okay.
Speaker 6:These guys are from Salesforce. They're really smart. They're saying there's gonna be lots of cloud apps. They're gonna need identity management. And I was like, sounds good to me.
Speaker 6:Right? Like but you you're like, that's a very plausible future, and they're the perfect guys to do it. There are other futures that are gonna take a lot longer to happen and much more divergent from the present. I think that Moderna was that way. Right?
Speaker 6:Ten years and $5,000,000,000 before they ship a product. SpaceX is that way. Tesla's that way.
Speaker 1:Mhmm.
Speaker 6:And so to me, the interesting question becomes, can you come up with technical risk takeout gates where you'd have funding that follows the initial funding? And then you don't have to have somebody like Elon Musk be a miraculous fundraiser Mhmm. Going throughout the world trying to find money wherever it exists. People forget that's how it was ten years ago, right, even after they went public. And so I I'd like to see the capital markets part part of what was good about seed investing back when I was doing it at first or Josh was that we were doing something that entrepreneurs needed that they weren't getting.
Speaker 6:Mhmm. And so to me, most of the good answers in financial innovation have something to do with that. You have somebody who would make great productive use of capital is not getting it somehow, and the the the markets have a gap in their ability to supply that capital in that way.
Speaker 2:Well, I think in the case of Hadrian, isn't aren't the capital markets working quite well in the sense that he raised a bunch of risk capital and then was able to derisk certain customer relationships and process, and then now he can access more traditional, you know, forms of of debt.
Speaker 6:For sure. And and I imagine if, you know, the the American dynamism team at a sixteen z was watching this, they'd say, hey, Maples. What you just described, that's what we're doing. Yes. Absolutely.
Speaker 6:And there's there's a lot of truth to that. So, you know, I'm not sure Chris could have done Hadrian ten years prior.
Speaker 1:Yeah.
Speaker 6:And so I think that, you know, there were some changes that were happening that were creating the conditions. But I but I'd still like to see more, you know, like, for example, I I personally invested in Boom Supersonic because I think that Blake is just wildly ambitious. We just need more people like that
Speaker 1:Yeah.
Speaker 6:Who we we need we need to have permission based innovation in the world of, atoms and not just bits. And the more we can do that, I think, the better. Yeah. Yeah. And so that's that's what I think is missing.
Speaker 1:Yeah. I mean, at a high level, it feels like entrepreneurs are pretty catered to on the capital market side. Like, there is a is dollars at every scale, every order of magnitude. I mean, we're I
Speaker 2:don't yeah. I don't know any
Speaker 1:$100,000,000,000 rounds, and then people can snap their fingers fingers on on x and raise a 100 k in the DMs if they need to.
Speaker 2:Yeah. I don't think I've met grant. I've not I haven't met an incredible founder in the last five years. Somebody that, you know, just personally I feel is incredible that hasn't been able to raise
Speaker 1:Yeah. That has that part of their origin story. Like, might have other struggles. Oh, yeah. We got in a lawsuit or, you know, oh, we, you know, we had to pivot entirely because some company steamrolled us or we misanticipated the progress of some underlying technology.
Speaker 1:But the the the the, oh, yeah. We couldn't raise for five years. That's not really a story right now. Maybe the the bigger question to answer in just the broader Silicon Valley is, like, how do you get more of those those freshmen, those weird thinkers, those people who are gonna go and do go from Groupon to building supersonic planes. That's a crazy move.
Speaker 2:Yeah. How do you get people that aren't just seeking status?
Speaker 1:Exactly. Right?
Speaker 2:People
Speaker 1:Less base hits, more swing for the fences. Yeah.
Speaker 6:And by the way, I think part of the reason that the the people who succeed at it do is, like, I think Elon's great superpower among many is that he only pursues business ideas where he existentially refuses to fail. And so, like, Elon never starts a company and says, well, I hope it works out. Easy come, easy go. If it doesn't, you know, he's like, I'm I'm only gonna tackle problems where I will never freaking back down ever no matter what.
Speaker 1:Yep.
Speaker 6:And so, like, if you say, hey. Getting to Mars is the most important accomplishment I wanna achieve in my life, you don't sit there and handicap the you're like Han Solo riding an asteroid. You're like, don't tell me the odds. Right? You're like, this is worth pursuing even if the odds are against me.
Speaker 6:And and that has a way of impacting the odds, right, of of your ability to succeed where others can't. Because if if you'll even countenance the possibility of failure, it changes the equation. Right? It changes the the whole risk that you take. Yeah.
Speaker 2:Where do you where do you think we are on the on the AI hype cycle?
Speaker 1:The Gartner hype cycle.
Speaker 2:Inflated expectations, or are we headed for the the trough of disillusionment?
Speaker 6:Oh, man. Probably all of the above. You know? Here's a here here's what I've been thinking a lot about is in the era of the microprocessors, you had mass computation, and then the Internet, you had mass connectivity. And what got commoditized with micro age was the transistor, and then you had the packet get commoditized.
Speaker 6:And so what I'm interested in is what happens in a world where we have mass cognition and where, you know, the inference unit, know, becomes commodity. Because right now, everybody's talking about the inputs. NVIDIA chips Mhmm. The hyperscaler models. Do we need more energy?
Speaker 6:And all those things are valuable. But it's just like in the early days of the PC era, everybody talked about the hardware. People didn't talk about software until much later. And so I think what's interesting to me is to ask not what's happening, but what is gonna become scarce given all the stuff that's happening. You know, what will the new scarcity be?
Speaker 6:I don't think that's been determined yet. So I've that that gives me a lot of optimism.
Speaker 1:That is
Speaker 6:But it's not the latest model du jour, and it's not the latest chip du jour. It's not the it's not the latest scaling factor that makes things more abundant. It's the thing that becomes rate limited in a world that where it's a given that the new abundance happens. And so that's that's what I'm looking for these days. So, you know, in a world where microprocessing is free, software becomes scarce because you have to make all of these machines useful that are everywhere.
Speaker 6:And in a world where the packet is free, what becomes valuable is the owners of these networks that aggregate attention and users and create network effects and become the systems of record. And so, okay, what will be the monopoly monopoly AI companies in a world where cognition is abundant? I don't think we know yet. But that but but to me, that is the question that is really interesting.
Speaker 1:That is that is 100% the question. That is that is fantastic. I love that. I'm gonna be digging into that for years. That's a fantastic George Gilder,
Speaker 6:you know, he wrote the microcosm and then the telecosm. Like, I wish George Gilder would write the cognitocosm. Right? And talk about, like, what's gonna be the new scarcity that complements the new abundance.
Speaker 2:Used to be that fine you know, that we didn't have enough Reddit threads on niche topics, and now now the LLMs will just hallucinate one for you.
Speaker 1:It's crazy. Anyway, we're we're we're keeping our next guest waiting, this was fantastic. We we'd love for you to hop back on and and continue the conversation. I really enjoyed this. Thank you.
Speaker 2:Hope you have a good trip to the coffee shop later. Hopefully, you meet
Speaker 1:the next
Speaker 2:Justin Justin and the Weebly founders.
Speaker 1:Deals out of it.
Speaker 6:I could get another two for her in the next three months. I'd be happy.
Speaker 1:We're rooting for you. Hopefully, a hopefully, in a two cap again.
Speaker 2:Yeah. Yeah. Here's Yeah. Bring back the two cap.
Speaker 1:Bring back
Speaker 2:Bring back the two cap.
Speaker 6:Yeah. It's gonna be my new yeah. Two two two fur in one hour in two hours of the two cap. Incredible.
Speaker 4:Do
Speaker 1:you? Well, thanks so much for hopping on, Mike. We'll talk to you soon.
Speaker 2:Cheers, Mike. Have a good one.
Speaker 1:Talk to you soon. Let me tell you about adquick.com. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only ad quick combines technology, out of home expertise, and data to enable efficient seamless ad buying across the globe.
Speaker 1:Our next guest is in the Restream waiting room. And as a benefit of Restream, we got our first commenter on LinkedIn, I believe.
Speaker 2:Let's go.
Speaker 1:The the chat is just blowing up. We have chatters on Welcome to
Speaker 2:the show.
Speaker 1:Open CV here. I see folks Thank on YouTube. Thank you. You are live on TBPN. Welcome to the stream.
Speaker 1:How are you doing?
Speaker 7:Whoo. Feeling good. Great to be here. Thanks for having me.
Speaker 1:Do you remember meeting me? We met in near Stanford like a decade ago with Ankur Jain, who now runs that amazing fintech company.
Speaker 2:Built.
Speaker 1:Built. Yes. I am I misremembering that? Do you remember this? I think we met years ago with Ankur.
Speaker 7:This is I was at Heumann?
Speaker 1:Yes. I think so.
Speaker 7:Okay. Awesome. Wow.
Speaker 1:Good to see you again. Good to
Speaker 2:see again. We're
Speaker 1:back. How would you describe where you are right now? Give us the intro. Introduce yourself to the to the to the folks who are watching.
Speaker 7:I am a general partner at Long Journey Ventures. Yeah. We're a pre seed and seed stage firm, and our core thesis is that we think the biggest companies of tomorrow will look really weird at the pre seed and seed stages. And our our mission is to be the second believer in the magically weird.
Speaker 1:There are so many weird things in the portfolio. We had Cyan and, Lee on the show, what was it, a couple months ago, talking about the the diamond company, the cloud seeding company, believe, is in the portfolio. There's just weird stuff all over. What else is in the portfolio?
Speaker 2:And of course, Justin Justin is a close
Speaker 1:friend Yes.
Speaker 2:Venture partner. He's always Yes. Awesome. He's always investing in weird silly things. And then, like, five years later, they're they're deck of corns.
Speaker 7:Totally. It's a good habit. Did they mention the robotic eyelash extension company?
Speaker 1:What? No. What's that? Explain that to me.
Speaker 7:Oh, yeah. It's a robot that applies eyelash extensions instead of taking an hour or hour and a half for a human to do it. The robot can do both eyes at the same time and takes fifteen minutes.
Speaker 2:That sounds high risk because if if the robot like flinches, it just rips your your your eyelashes out.
Speaker 1:Well, that's why they invented the anti flinching technology.
Speaker 2:There you go. Yes. There you go. Patented.
Speaker 1:It doesn't flinch. I mean,
Speaker 7:humans flinch too. So it's not it's not
Speaker 2:It's all high risk.
Speaker 1:It's true. Superhuman unflinching AI. This is the this is gonna work. Yeah.
Speaker 2:I think I think we I I I'm I'm glad you guys do this. You know, obviously, I mean, it's it seems like the the the rest the rest of the partnership, we've we've had them all on the show and I'm there's not enough people that are just like actively trying to find the weird stuff, but like you guys act do it consistently.
Speaker 1:A lot of people say they want to find the weird stuff and then it just winds up being a lot of b to b SaaS.
Speaker 2:Defense SaaS, kid. Whatever's on trend. Whatever's on trend.
Speaker 5:Okay. We could we do quite
Speaker 7:a bit of defense tech too, but I think we were doing it back when it was weird or taboo. For sure. I think Sian was one of
Speaker 2:the best Two years ago.
Speaker 7:Girl.
Speaker 1:Yeah. Yeah. Is there something to the now contrarian statement that occasionally you want to do consensus investing and you want to be the momentum trader? It's certainly paid off for people in AI over the last few years. Can you at least see the value in that?
Speaker 7:Oh, for sure. No. We have a we have quite a bit of cognitive dissonance on the team because so many talented builders are are building in AI. Yeah. We wanna play the game that's out on the field.
Speaker 1:Yeah.
Speaker 7:So we but, yeah, it kinda, like, hurts our souls when things feel consensus. And it's a question, like, are we too late?
Speaker 5:Yep.
Speaker 7:Because, I mean, we feel like the best time to invest in seed and pre seed is when things feel absurd or or nonconsensus. Mhmm. And we wanna we wanna invest before they become consensus. That's where the alpha is.
Speaker 1:Yeah. What's the what's in internally, like, your feeling on, like, the AI hype cycle where we are? It feels like it's been, like, punishingly dominant for the last few years. Are you overall
Speaker 2:Expectations are inflated.
Speaker 1:Are there pockets of optimism? How are you seeing kind of the overall AI boom? Sam Altman recently said, we might be in a bubble, which is kind of a crazy thing to say. But who knows? Maybe he's having fun.
Speaker 1:What what what is your current thesis on, like, opportunity within AI?
Speaker 7:Yeah. I mean, we like to think of, like, the second order effects and especially, have been looking more towards deep tech Sure. And the implications and and how AI creates a tailwind for deep tech companies, you know, robotics, biotech, etcetera. Because we feel like, you know, working in those spaces, there's a lot of defensibility in doing something that's really hard. So that's kind of how we're we're thinking about it.
Speaker 1:How, yeah. How do you dial in, like, the the opportunity there? Obviously, you have, like, big companies. I mean, Tesla just put out this big, the fourth master plan. Going into humanoids, it seems like it's it's an incredibly expensive place to play.
Speaker 1:But then we just had a friend send us a new Roomba that is just like a new friendly robot vacuum cleaner. And it seems like I mean, it's a fantastic product. I'm not exactly sure how the business is doing, but it seems like
Speaker 2:a fantastic business. And
Speaker 1:and those are like two like wildly diver diverging opportunities. What are you seeing that's kind of interesting in in the deep tech AI enabled, like, AI tailwind world?
Speaker 7:Yeah. I mean, we're looking at everything across robotics because, I mean, there's just the ability to train robots because of LLMs and physical AI, I mean, it's just gotten so much faster and easier, which is, you know, the the cost of training robots to do something that's actually creating value has just gone down immensely. Yeah. So that is one of the tailwinds that we think has enabled you know, we've invested in companies that, you know, doing case picking and distribution centers. You know, we've invested in robotic eyelash extension.
Speaker 7:Yes. That's a great question. There are, you know, many, many applications of of robots. We've looked at a lot of, you know, in home robots. I'm not a 100% sure how people will feel with a humanoid like figure in their home.
Speaker 7:I mean, I don't I don't know if I personally want that. But
Speaker 1:Yeah. Yeah. Yeah. On on that, do you think that we're learning anything from the the the reception of the, like, AI companionship to how robots will be, like received in the home. Because I agree with you that having a robot over there that's in my house seems maybe a little black me or a little odd.
Speaker 1:But at the same time, I also would never have predicted that millions of people would be complaining about ChatGPT four point zero going away because they saw it as a friend and a coach. And then Elon's going into the romantic space. And there's like all these different areas where it seems like people are actually you know, incredibly receptive to having a personal relationship of whatever kind with the robot. Do you think there's something we can learn about that for or from that?
Speaker 7:Absolutely. I mean, I reserve the right to change my opinion over time, but I think today, it would be creepy and Black Mirror esque, and I am much more into the idea of, like, ambient Yeah. You know, single purpose objects doing a doing a task. Like, something that lives in the laundry room.
Speaker 1:Sure.
Speaker 7:You know, moving your laundry or folding your laundry, and, you know, that can be one thing that lives there, and then I will have another thing that lives elsewhere. And I I think, like, ambient robots So but not, you know, necessarily rosy.
Speaker 1:I completely agree with you. And yet, I can immediately imagine the Black Mirror scenario where my laundry robot is like, John, I'd I'd like to actually go trim the trees today. Like, you know
Speaker 2:Or figured out a way to goals. To I figured out a way to run the laundry with the door open and I'm gonna flood your home. Oh, yeah. We had we had we had somebody on the show that that makes like, a a A lamp. Bedroom lamp that can unfold your laundry.
Speaker 1:It was the exact oh, yeah. Saw him to that company. I love it.
Speaker 7:It was cool.
Speaker 2:But the but the thing is you could easily imagine the Black Mirror scenario where the lamps just start, you know really
Speaker 1:lent itself to the dystopian world but
Speaker 2:How do you how do you guys talk about like timelines? Because something that stood out to me Yeah. From conversations with Lee and Justin and I know you guys are talking all the time about deals is they're willing from my sense is they're willing to invest in a founder and and be okay with them like going and just wandering and tinkering for a long period of time and there's less of this pressure of like, okay, we're leading your seed and then you're gonna sprint to the a, like, hopefully later this year.
Speaker 1:Did we do the seed in Crusoe or something like that? It was not Yes. Yeah. It's a crazy deal. Like
Speaker 7:I mean, I think it would be rough if we were named Long Journey Ventures.
Speaker 1:Oh, yeah. But you have to get to the series.
Speaker 2:Long journey, short time, right? Let's get to the end this year.
Speaker 7:Or actually medium journey. Yeah.
Speaker 1:I think we'd pump more money in this thing. But, yeah, I mean, like, unpack a little bit more about, like, is that just matching finding the right founders? Is it a specific vibe that you bring? Is that, like, not taking a board seat, taking a board seat, coaching the founder?
Speaker 7:Not take board seats. Okay. Yeah. We do not typically take board seats. And, yeah, I think sometimes, you know, when you're investing in the absurd before it becomes consensus, sometimes you whiff you whiff it.
Speaker 1:Yeah. Of course.
Speaker 7:The and, you know, it's just a matter of talking that through with the founder. And, usually, the founder realizes it even before you do. And so, yeah, we have quite a few companies that end up pivoting and renavigating the idea maze. But but, yeah, sometimes it lands, and then you're one of the earliest investors in something incredible like Crusoe. So
Speaker 1:yeah. Yeah. What a crazy crazy
Speaker 7:for the course.
Speaker 1:Yeah. Yeah. What, how have you been processing the, all all the news about, like, Jevan's Paradox and, like, the, the the token costs coming down, but then companies using more expensive models, and maybe this is gonna hurt margins and whatnot. Like, did you did did you go through the same roller coaster ride that most people did during, like, the deep seek moment? Or how how are you how are you processing the overall, temperature of, like, how the the the latest trends in the AI models just affect, like, the the companies that are actually building on this technology day to day?
Speaker 7:Yeah. I mean, I think the cost reductions are obviously extremely significant. And and I think, you know, people right now, a lot of enterprises are in the kind of pilot or experimental phase where I think they wanna use, you know, the highest performance models based on the academic benchmarks.
Speaker 1:Sure.
Speaker 7:But I think cost reduction or, you know, the cost profile will really come into play when people wanna start deploying, you know, AI companions to all their employees or, you know, autonomous background agents, you know, these sort of deployments across many workloads that will consume a lot of tokens, then I think costs will really matter.
Speaker 1:Yeah.
Speaker 7:So I think that's that's kind of, like, what I'm looking out for is, you know, not just increases in performance, but how these cost reductions will enable, you know, scaling more use cases.
Speaker 1:Yeah. Yeah. We we were debating Notion earlier. Ivan said that, these gross margins went from just just scraping by at 90%, and now it's down at 80%. And, to to to me, it seemed like trade it seemed like trade I'd take all day long for for growth and a better product and something that's AI enabled.
Speaker 1:Of course, you gotta build the right the right product in there but it seemed like seemed like a no brainer and that's probably why he's he's talking to Chris Mims at the Wall Street Journal Definitely. Yeah. About it.
Speaker 7:It was interesting. And I think, like, the sentiment has been interesting. It almost feels like the general reaction or, like, the gen pop reaction to new models is that we're almost in, like, the iPhone era. Mhmm. I mean, I remember when people used to wait in line, people freaked out about, like, new iOS releases and and new iPhone releases.
Speaker 7:Yeah. And now people are, like, kinda deeply ambivalent about whether they're gonna they're gonna get the new iPhone or not. But it almost feels like the public feels like we're in that spot with the newest AI models. Yeah. But I feel like that that misses the picture on the the cost reduction side, which I think is really powerful.
Speaker 2:Yeah. I mean, it's interesting. It doesn't I mean, this is why so many people are so bullish on on ChatGPT and OpenAI despite all the chaos and competition is is you go walk to the average person down the street. Have you tried any AIs? They'll say, yeah.
Speaker 2:I've used ChatGPT. It's cool. And then if you go to those same people and say, hey, I have a something like ChatGPT. It's it's twice as good. They're gonna tell you, oh, okay.
Speaker 2:Like, I don't know. Yeah. I don't know what that's really gonna do for me. So, yeah. It it's it felt like six months ago we were in this era.
Speaker 2:Again, it was like the early iPhone days like you said where it was like, oh, a new model came out. Let me rush to try it. And now there's way less of that that energy.
Speaker 7:So Yeah. Totally.
Speaker 2:It's good for the new incumbents.
Speaker 1:We were talking about Naples about this at the early stage where, like like, the this analogy of, like, finding good lakes to fish in for outside the box thinkers, entrepreneurs that might be up for a long journey. They might wander for years. Like, where are some of the underrated places where you're seeing pockets of entrepreneurial talent bubble up? Like there are years ago, it was like the the PayPal mafia was like a massive explosion of like, just back all those companies. They're huge.
Speaker 1:The same thing happened with other other big tech companies that threw off a ton of talented entrepreneurs. There was like the invest in every Stanford grad phase. There
Speaker 7:is Yeah.
Speaker 1:You know, get kids to drop out of college to do startups. Like, where where are the interesting pockets of entrepreneurial talent that you're seeing just across the globe?
Speaker 7:You know, we're just, you know, waiting outside YC demo day. I was just kidding. We have partnered with a really cool organization. I am really excited about where they're going. It's called Edge Institute, and they run these monthly, yeah, monthly pop ups called Edge Esmeralda.
Speaker 7:Yeah. They're about to do a month long one in Patagonia. They did one in Healdsburg back in June.
Speaker 5:That's cool.
Speaker 7:And it attracts a lot of weird thinkers. It's not all founders. It's a lot of, like, researchers and, you know, people who aren't necessarily in the kind of entrepreneurial ecosystem, but it's a lot of people with crazy ideas. I mean, that's the whole concept is edge edge city. People living on the edge, doing things on the edge, and operating, you know, in not necessarily societally accepted ways right now, but, like, probably will be consensus in the future.
Speaker 1:Yeah. That seems like a good good pool to fish in, just like weird thinkers, academics, just anyone who's
Speaker 7:like Yes.
Speaker 1:Just spend Yeah.
Speaker 2:They might not be a founder themselves but they're like, hey, my my friend is working on this
Speaker 1:Or maybe they could be
Speaker 2:crazy idea. Yeah.
Speaker 1:Yeah. I love that.
Speaker 7:Yeah. We we did our residency program That's good. In in Healdsburg Good. Back in June.
Speaker 1:And Edge Esmeralda is also building a city. Right?
Speaker 7:Can you tell
Speaker 5:me about, like,
Speaker 1:what's the progress there? How's that going?
Speaker 7:They have bought a site for it and our our plan yeah. And our planning planning the city itself.
Speaker 1:It's Devon.
Speaker 7:I'm not sure how how much is public. Yeah. Devon.
Speaker 1:Yeah. We're have her on the show.
Speaker 5:That'd be great.
Speaker 7:Yeah. You gotta have her on the show.
Speaker 1:Yep. Devin Zugol. Right? Is that the name? I think that's her last name.
Speaker 7:I believe so. Yes.
Speaker 1:Anyway, we will get her on the awesome. You so much for taking time to hop on.
Speaker 4:Awesome.
Speaker 2:Cheers.
Speaker 1:Let me tell you about Bezel. Get bezel.com. You Bezel Concierge, they will now source you any watch in the planet. Seriously, any watch.
Speaker 2:So results from the Google ruling Yes. They don't have to sell Chrome.
Speaker 1:Okay.
Speaker 2:And they don't have to stop paying to be the preferred search provider. So total So little big tech victory.
Speaker 1:Let's go to Tyler. Did anything happen?
Speaker 2:Has ever happened?
Speaker 3:Nothing happened.
Speaker 1:Nothing happened. Totally.
Speaker 3:When you the no on Play Market continues to print every time.
Speaker 1:No. Tyler is our official did anything happen correspondent. What? Yeah. What was the point of all this?
Speaker 1:Just to waste a bunch of time and attention and
Speaker 3:Also, we'll not be required to divest Android.
Speaker 1:Yes. Okay. So Nothing. Well, I mean, something happened if you're a lawyer collecting a paycheck.
Speaker 2:That's true. I
Speaker 3:mean, after like, what, five years?
Speaker 1:This is five years
Speaker 2:Yeah.
Speaker 1:For us. Wait. Is this the final final final? Or is this like b one final? I don't know.
Speaker 1:We need to figure that out.
Speaker 2:Somebody posted Meek Mill about to raise 25 mil from a 16 z. Meek Mill quoted it and said, my first time hearing that but l o l. But for real, I need investors. I don't think they're on Twitter. Donald Vote Donald Vote responded and said, DM.
Speaker 1:That's so
Speaker 9:many 100
Speaker 2:will lead you around but first you need to buy him a private jet.
Speaker 1:Yeah. What a crazy
Speaker 2:He needs a jet.
Speaker 1:Yeah. So I I mean, the news here is Meek Mill, the the the rapper is going to start an AI company of some sort.
Speaker 2:Yeah. It went viral a couple days ago working on a AI tool that can change the world l o l.
Speaker 1:The funniest thing was that in the screenshot he posted, he'd he'd switched it to four o and so everyone was like, he's been one shot. He's been one shot. Because because
Speaker 2:I mean, it it really yeah. He he had That's a talent. Yeah. SPEC SPEC or OpenCV
Speaker 1:saw that.
Speaker 2:Basically
Speaker 1:Hopped in the chat and said that.
Speaker 2:No. He he was yeah. He specifically highlighted that Meek had gone back to four o. So you can imagine he's deep in the prompts. Yeah.
Speaker 2:You're like, okay. Me and ChatGPT figured out Figured out. Figured out the next company. The app that's gonna disrupt ChatGPT.
Speaker 1:It's great. Love to see Yeah. I I do switch back to four o every once in while but only when I wanted to write a really obviously one shotted like like piece of prose.
Speaker 2:You're right, John.
Speaker 1:Yeah. Exactly. So so if I if I want to write something that's like, it's not this. It's that. It it's it's more than this.
Speaker 1:It's actually that. And like use a lot of em dashes, I'll fire up four o and and give it a little tease
Speaker 2:The of the comments on this or Shkreli comments, let me know if you need help. I got a 100 goons ready to go for you. Bone GPT, your favorite rapper's favorite rapper.
Speaker 1:Oh, okay.
Speaker 2:Reginald says, mister Mill, I'm a well known AI practitioner. I think you should collaborate with Cluely or friend. These are some of the most innovative companies in the space. Happy to talk you through some of the players if you're interested. VC Braggs just says, top.
Speaker 1:Okay. Anyway, let's switch over to Ron Rule. He says, this is pathetic, Gen z in the workplace. This is a poll from Fox News. They say, seventy seven percent of Gen Z in the workforce admitted to bringing a parent to a job interview.
Speaker 1:Fifty three percent of parents spoke with a hiring manager on their behalf. 73% parents helped complete work assignments. 45% regularly have a parent talk to their current manager. I think we're pro work pro we're pro parent workplace here at TBPI. We've had many parents stop by the UltraDome, and it's been great.
Speaker 1:I don't mind talking to some parents about And I say, hey, if
Speaker 2:It wasn't during the application parents
Speaker 1:come in and help complete some work assignments, do it. Tyler, you wanna bring your dad in and have him code something for us?
Speaker 3:Think my parents are coming on Friday.
Speaker 1:Fantastic.
Speaker 2:There we go.
Speaker 1:Put them to work. Just let them know. They gotta be in the 73% of parents that help complete work assignments. Mister Cosgrove
Speaker 2:Yeah. You will using pod code today. Yeah. We're we're fully in support of all the team's parents just helping them with their jobs.
Speaker 1:In fact, I would insist that they come and they pull their weight and they help they help organize the information. I think we had Michael's parent in the in the UltraDome recently. Think get them on the switcher. Get them on the pull the graphics up. We need all hands on deck.
Speaker 1:Get the parents in here. This is a pro parent workplace. Anyway, the great lock in of September to December has begun. This is just a general announcement. It's also bulking season, folks.
Speaker 1:We've seen this. It was teased earlier by Will at at OpenAI. He said, the de twinkification process has begun. We are, of course, sending him some mass gainer on his journey to become a mass monster.
Speaker 2:But very lock
Speaker 1:in. What?
Speaker 3:Meniere's saying that that's it's bearish for OpenAI.
Speaker 1:It's bearish that that he's de twinkifying? Why?
Speaker 2:Yeah. Why would that be that could be
Speaker 4:No. It's literally Keyboard.
Speaker 1:It's wait. Oh, it's bearish because he's turning into a bear? Because he's gonna be as large as a bear? Like a a hairy bear man or something?
Speaker 2:I'm just imagining Will.
Speaker 1:Wait. That the actual joke? Like, twink and bear? Like, bearish? Because like the opposite of a twink is a bear?
Speaker 3:No. I don't I don't know.
Speaker 1:Okay. That's not clear. I think it's bullish. I think it's very good. I I hope he turns into a
Speaker 2:Yeah. Bull and
Speaker 1:and gets yoked like a bull. That would be that would be very very very good. Lift heavy, run far, marry early, eat steak and eggs. We didn't really talk about
Speaker 2:We missed this post. Somebody somebody was
Speaker 1:the timeline over the weekend.
Speaker 2:Yeah. This was let me try to find the original quote.
Speaker 1:It's deeper in the stack And people like to hate on it. Jira ticket. I mean, everyone was having their take. Some people were hating. Some people were just having fun.
Speaker 1:Jira ticket said, the current vibe is drinking drugs ten to three, five days a week. Lift heavy, run far, marry whoever, stay up late, eat spicy Szechuan food. That's pretty funny. Yeah. I I don't know.
Speaker 1:This was something that was like very dunkable but, you know, the the Yeah.
Speaker 2:This made me when when
Speaker 1:I thought it was fine.
Speaker 2:The actual quote was the current vibe is no drinking, no drugs. September. Lift heavy, run far, merry, early tracks, sleep, eat steak and eggs. And I resonated with this so deeply that it made me wanna start doing drugs.
Speaker 1:Wait. Why?
Speaker 2:Well, I've just this this exactly tracks with my life.
Speaker 4:Oh. Oh. Oh. No drinking. No drugs.
Speaker 1:Yes. It is it is now so
Speaker 2:Lift heavy.
Speaker 1:To do this.
Speaker 2:Very early track sleep.
Speaker 1:Yes. Eat
Speaker 2:state next. I was like, it's time
Speaker 1:to This was start sort of the this was sort of the top for that concept. But Yeah. You know, I I I think overall, that take is more correct. It's just more from first principles, more foundationally true than not. And so it should it should stand the test of time as like roughly correct even if it's like phrased in a little bit of a incendiary kind of frothy like style.
Speaker 1:Yeah. I I I respect that founder going to the wall it was at the Wall Street Journal that he quoted in or something. I don't know. Talking to a journal like that's pretty funny to me. I think it's fun.
Speaker 2:The current vibe.
Speaker 1:I I I I think I think it's a funny quote and I don't think it's I don't think it needs I don't think it needs to be fully dunked on. I think you can just be you can just have fun with it.
Speaker 2:Yeah. Anyway. Well, on that note
Speaker 1:Wander. Find your happy place. Book a wander with inspiring views, hotel grade amenities, dreamy beds, top tier cleaning, twenty four seven concierge service. It's a vacation home but better. And we do have Gotta get on.
Speaker 1:Get on with Pyongyang. So we are going to hop on the phone.
Speaker 2:Now, they're gonna be they may send a nuke if we don't.
Speaker 1:Pyongyang Investment Fund, PIF. You've heard a lot of founders raising for PIF. They're talking about Pyongyang Investment Fund, folks. Yep. We gotta hop on with Pyongyang.
Speaker 1:Guys later.
Speaker 2:It's gonna be a big week. Thanks for hanging out. Have a great evening.
Speaker 1:We will talk
Speaker 2:to See you all of you. Go out there. Don't get one shotted by four o. Void four o.
Speaker 1:Oh, thanks Max, the SF Standard.
Speaker 2:That's right.
Speaker 1:Gabe, Daniel, everyone who listened. Good hanging out with you.
Speaker 2:We love you.
Speaker 1:Talk to you soon. Bye.
Speaker 2:Bye.