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Technology's daily show (formerly the Technology Brothers Podcast). Streaming live on X and YouTube from 11 - 2 PM PST Monday - Friday. Available on X, Apple, Spotify, and YouTube.
Welcome to Technology Brothers, the number one live show in tech. We have some breaking news on the cover of The Wall Street Journal business and finance section. Masayoshi Sohn and Sam Altman were pictured in Tokyo on Monday. Masa was holding a crystal ball and dropped it, and Sam Altman is watching him pick it up. And it's, it's so funny because they don't really address
Speaker 2:it in the con
Speaker 1:yeah. Yeah. Yeah. They don't really address it in the context of this article, but it's very clear that the Wall Street Journal was like, this is a metaphor of some sort.
Speaker 2:That is a great omen. That's actually you need to get
Speaker 1:a crystal ball. I mean, these things can people always read into these things. People were like, oh, the cyber truck, he broke the glass. Like these live demos, sometimes they go wrong, but, yeah. Masa, you gotta work on that grip strength.
Speaker 1:The lone ranger will send you some grip, grip strength trainers, and maybe, you won't drop the crystal ball next time. The the this article That's
Speaker 2:actually wild.
Speaker 1:Yeah. I'll I'll read some of it. In his newly built palace near Tokyo, lined by stone statues of Roman emperors and surrounded by an 18 hole golf course, Masayoshi Sohn was stewing. After declaring for years the imminent arrival of artificial intelligence revolution, this chief executive officer of SoftBank Group had missed out on it. I haven't been able to do anything, he thought, According to a speech he gave to SoftBank investors last year, can I just get old like this and die?
Speaker 1:As it turns out, all he needed was a new golden boy. And now Sohn, who has his history of who has a history of latching onto charismatic startup founders, has found one in Sam Altman. In what would be the largest yet investment in a startup, Sone is preparing to put as much as $43,000,000,000 towards Altman's OpenAI in a pair of transactions. SoftBank is in talks to invest between 15,000,000,000 and 25,000,000,000 in the chat GPT maker as part of a blockbuster $40,000,000,000 funding round, the Wall Street Journal reported Thursday. The round would value OpenAI at up to 300,000,000,000, nearly double its valuation in October, and under an an undeniable sign of Son's confidence in its prospects.
Speaker 1:Dorey, what you got?
Speaker 2:Okay. So my reading into this is this is separate from Stargate. So not only is Sun levering up levering up his arm his arm position to go heavy into star Stargate, he's also it's not enough to just own the infrastructure layer. He's gotta own the, the the developer tool, and the consumer product layer Oh, yeah. In, in OpenAI.
Speaker 2:And, honestly, it's absolute absolutely insane. To put this into context, one of the biggest software IPOs ever, Snowflake, we've talked about it on the show, They raised in their IPO, like, 2,500,000,000.0 or something like that, you know, somewhere in that range. And so just so so Sam is is raising, you know, an such an egregious if he gets his round done, it's truly he's he's definitely the greatest fundraiser of all time putting Adam Newman to shame, hit the gong a pre preeminent, gong hit. But, absolutely, absolutely insane if they pull it off, and the only two people on Earth that could are Masa and Sam. So Yeah.
Speaker 2:And and from what I know, this kind of, Sam was really just out there testing the deep research product. He he posted about this, that he was using deep research product to find a new, I think, some type of, vintage Acura. And, he must have just run into MASA while he was doing that, and they just hit it off. And and now they got a potential deal. So, love love to see, you know, a little coincidence like that turn into a big funding round.
Speaker 1:Yeah. I I I hope they got out to the track and put those NSXs to work. I'd love to see Masa behind the wheel.
Speaker 2:That's a good driving. For a $40,000,000,000 round, throw in throw in, you know, why not throw in a vintage, you know, Acura. Right?
Speaker 1:Yeah.
Speaker 2:It's a rounding error. So
Speaker 1:And so, in addition, the Japanese tech and investment conglomerate has committed 18,000,000,000 towards Stargate. So 18,000,000,000 for Stargate between '15 and 25 for chat g p t for OpenAI. So that's a combined you know, we're in the 30,000,000,000 territory. Fantastic. But they got the money
Speaker 2:And remember arms there. 30,000,000,000 the 30,000,000,000 number was Moss's initial target for Vision Fund. He went he was going to Saudi Arabia to meet with MBS. And on the plane, he had written out that he wanted 30,000,000,000, and he circled that. And then he crossed it out and wrote a hundred.
Speaker 2:Yep. Because he liked he liked the idea of saying, give me a hundred billion. I'll give you a trillion. And so, Masa continues to lever up to go bigger than ever, and, you know, we'll we'll see how it pans out. It's too way too early to to have any judgment.
Speaker 2:Yep. And, but we just we like any opportunity to hit the gong. So thank you to to Masa and Sam for for provide providing that.
Speaker 1:For sure. Yeah. It's unclear, you know, the metaphor of dropping the crystal ball. That clearly happened because he didn't go turbo long AI three years ago. But maybe he's picking the crystal ball back up, and he's putting the money in the right place this
Speaker 2:week. I just what was Masa doing in every they they had a little bit of one of the earlier rounds. Right? This is not their first time investing in the company. So Masa is getting the updates on every the first of every month, and he's like, I gotta I gotta own a lot more of this bad boy.
Speaker 1:Oh, yeah.
Speaker 2:He's like, I don't care if the model layer is getting commoditized. I just I love Sam. He's my guy. I'm going turbo turbo long.
Speaker 1:Yeah. Well, hopefully, it works out. We always love seeing these big deals get done. And overall, I'm excited to see a lot of capital flow into an American AI company. I think this is exactly what we need right now.
Speaker 1:So Yeah.
Speaker 2:Bad day to be bad day to be deep seek.
Speaker 1:Bad day to be deep seek. I'm glad the money's not going there.
Speaker 2:No close so close to Japan yet so far away.
Speaker 1:Truly. Truly. Well, let's go to Luke Ferritor. We broke the news yesterday that he is over at Doge. He has read access to The US Treasury and payments flow and has been doing a whole bunch of data science and machine learning to understand where money is going in the government.
Speaker 1:He's part of this crack team of Zoomers that Elon has hired and staffed on a project to understand, how the government works, where money is going. It's been extremely controversial. A lot of people came out in support of Luke. We did, and and the rest of the team. And a lot of people were very upset, and so it was very controversial.
Speaker 1:But we wanted
Speaker 2:to give
Speaker 1:a deep dive on Luke and his previous previous, work on the Herculaneum scrolls today. And so we will go through that in just a minute. Jordy, what you got?
Speaker 2:One quick note. I think it's worth mentioning for the audience that hasn't been following Doge maybe as closely as some other people, but it's important to understand that Luke is actually not an employee of the government.
Speaker 1:Yep.
Speaker 2:From what we know, he's an employee of Doge, which you can think of as operating as this sort of personal vehicle for Elon and Elon's team and the sort of initiative to try to have an impact on the government. So think about it more as like a almost like a consulting shop, think tank
Speaker 1:Yeah.
Speaker 2:That's trying so that's right right way to look at Luke, but we'll kinda get into where where he got started.
Speaker 1:Yeah. And so let's go through some of these posts. Of course, he famously won a portion of a $700,000 prize for figuring out how to read ancient scrolls that were carbonized by Mount Vesuvius, which we'll go through today. And, people are having a lot of fun with this. Armin Tully Tully says that the the Doge Zoomer is preparing to fire half of the federal government, and it's the Bob's from, office space, but with Zoomer haircuts, of course.
Speaker 1:And so people are having a lot of fun with this. You know, everyone, it's become a massive political football, even though I think Luke is is pretty much just trying to understand where the money's actually going, which is a very reasonable thing for either party to wanna do.
Speaker 2:I I like that everybody had to clarify that he only has read access. It's not like you know, he's very you know, he's not just in there, you know, just like he's using it like Venmo or Cash App just whipping money around. He's just trying to get it. He's just trying to understand the scrolls that are the US treasury depart department's database and incredible paper trail.
Speaker 1:It really is like the scrolls project all over. It's so it's so funny, the the similarities. And so, Jarvis writes, like, five people who understand how computers work show up in DC and within two weeks, restructure the entire system that's been in place since World War two. That's wild. I love this post.
Speaker 2:Crazy.
Speaker 1:It's it's so funny, but it is it is a testament to AI and and and, data analysis that that you can actually do this extremely high leverage work and comb through all these payments. Somebody else was saying that, one of the early Doge projects was just get a dump of, of payments, just get a whole bunch of, like, just data on where things are going and just look for the crazy stuff that pops out that seems like really weird. And if you look through the, the PPP loans, there were a lot of those that went to reasonable, you know, restaurants that were closed down by mandate because of COVID made sense that they would that they that they would need PPP to bridge. But then there were some people that set up, LLCs called, like, Ford Raptor LLC. And of we know what that guy was doing.
Speaker 1:And so wait. You you don't need to be a genius. It's not a left right issue. Like, you're you're leafing through that. You're like, why are my tax dollars going to buy someone a truck?
Speaker 1:Like, this should not be happening. And so, hopefully, you know, the the Doge team can find a bunch of stuff like that.
Speaker 2:Yeah. And part of it is understanding, okay, let's understand where the money went, and then let's understand how it's being spent. And yesterday, we highlighted that out of 700 ish million dollars that was going towards just one university in California from the federal government. So this is US federal taxpayer dollars going to a California university. Yep.
Speaker 2:We both live in California. I'm a product of the UC system. I'm nothing against the U UC system, but they were spending, 40% of the budget, roughly $300,000,000 a year purely on administrative costs. So
Speaker 1:Yeah.
Speaker 2:It's not you know, you know, the first step is understand let's understand where the money's going. Yep. Second step is let's understand how it's being spent, but there's a lot of work to do just on the first part because this is one of the most complicated systems that I can even think of. Right?
Speaker 1:Yeah. And there's just been generations of craft built up. Well, let's move on to Ashley Vance's article, which which touch on touches on the Herculaneum scrolls project. He wrote this back in, over a year ago. Actually, a year ago tomorrow or maybe today.
Speaker 1:02/05/2024, Ashley Vance and Ellen Hewitt over at Bloomberg. Right? A few years ago during one of California's steadily worsening wildfire seasons, That that hits hard. Nat Friedman's family home burned down. A few months after that, Friedman was in COVID nineteen lockdown in the Bay Area, both freaked out and bored.
Speaker 1:Like many like many a middle aged dad, he turned for healing and guidance to ancient Rome. While some of us were watching Tiger King and playing with our kids' Legos, he read books about the empire and helped his daughter make paper models of Roman villas. Instead of sourdough, he learned to bake panes quadratus, a Roman loaf pictured in some of the frescoes found in Pompeii. During sleepless pandemic nights, he spent hours trolling the Internet for more Rome stuff. That's how he risk that's how he arrived on the on the Herculaneum papyri, a fork in the road that led him toward further obsession.
Speaker 1:He recalls exclaiming, how the hell is no one ever told me about this? The Herculaneum papyri are a collection of scrolls whose status among classicists approaches the mythical. The scrolls were buried inside an Italian countryside villa by the same volcanic eruption in seventy nine AD that froze Pompeii in time. To date, only about 800 have been recovered from the small portion of the villa that's been excavated, but it's thought that the villa, which historians believe belonged to Julius Caesar's prosperous father-in-law, had a huge library that could contain thousands or even tens of thousands more.
Speaker 2:Sorry to interrupt. We have to bring really bring back the word prosperous into Totally. The today's vernacular. It's it's a fantastic word, and everybody should aim to be prosperous in their own way. Absolutely.
Speaker 1:So he says such a hall would represent the largest collection of ancient texts ever discovered, and the and the conventional wisdom among scholars is that it would multiply our supply of ancient Greek and Roman poetry plays and philosophy by many fold. So So we're talking about, like, a five or 10 x increase in the amount of, of text from Greek and Roman, literature. High on their wish list are the works by the likes of, of Sappho and Sophocles, but some say it's easy to imagine fresh revelations about the earliest years of Christianity. So it's been a massive goal of, you know, all these ancient scholars to unearth these, and we'll go through how they did it. Jordy, you got anything for me?
Speaker 2:No. That's it. That's it.
Speaker 1:Okay. So some of these texts would completely rewrite the history of key periods of the ancient world, says Robert Fowler, a classicist and the chair of the Herculaneum Society, a charity that tries to wear raise awareness of the scrolls and the villa site. I love that he's just out there being like, I gotta spread the word of these scrolls. I gotta get the word out. Someone is gonna figure this out, and he landed on it.
Speaker 1:He found Nat. And Nat Yep. Put together a crack team and and actually figured it out, basically. I mean, it's not a % accurate.
Speaker 2:And Nat, for anybody that's not super familiar, he was was he he was a cofounder of GitHub or he just joined as CEO?
Speaker 1:He was CEO. Yeah.
Speaker 2:He was so he's CEO of GitHub, a tool that literally every developer that I know uses every single day.
Speaker 1:Yep.
Speaker 2:And he has a thing for aggressively pursuing passion projects and side projects with no not necessarily any sort of, direct monetary incentive, more so using his wealth to try to uncover knowledge. And so the scroll is one project that that's really exciting, and and the one that he went pretty viral for recently was called, plasticlist.org, which is similar to, what what another founder named Cormac, is working on, a friend of mine. And what Plastic List did is he went and he spent probably a roughly half a million dollars, so similar to the to the sort of scrolls project and, tested hundreds of different popular food products because he realized that this one, he'd realized this one protein shake that he was drinking had just, like, egregious levels of microplastics, and he was sort of traumatized by that. So he's saying, alright. Let's test a bunch of different products.
Speaker 2:And so he's very, he's doing exactly what we want other other, other to be doing. So not just building companies and investing, but saying, hey. Let me let me spend half a million bucks to sort of unearth some, you know, important knowledge for humanity and and pull together some great people in the process. So Yeah. I'm I'm already excited for for Nat's, like, next project because Oh, yeah.
Speaker 2:He's just gonna keep going.
Speaker 1:Yeah. 100. So we'll pull up a picture of the scrolls. You can see these. And you And,
Speaker 2:John, I I actually can't see this on my screen, by the way.
Speaker 1:Oh, really? Yeah.
Speaker 2:Just a minute.
Speaker 1:You should be able to see the screen I'm sharing. The Bloomberg business week. This is an ancient Roman scroll.
Speaker 2:I see, I see Luke scrolls, so I think you might be in the wrong tab.
Speaker 1:Oh, did it never, let me, let me try and share this again with you. Let's go share and let's go here and let's go. Is that good, Ben? Can you see that Bloomberg business week? This is an ancient Roman scroll flash fired by a volcano, and we got pictures of Nat Friedman here.
Speaker 1:And so, you can see from this scroll, people have spent hundreds of years trying to unroll them, sometimes carefully, sometimes not, and the scrolls are brittle. Even the most meticulous attempts at unrolling them have tended to end badly with them crumbling into ashy pieces. In recent years, efforts have been made to create high resolution three d scans of the scrolls' interiors. The idea being to unspool them virtually. This work though has often been more tantalizing than revelatory.
Speaker 1:Scholars have been able to glimpse only snippets of the scrolls, innards, and hints of ink on the papyrus. Some experts, some experts, have sworn that they could see letters in the scans, but consensus proved elusive. And scanning the entire cash is logistically difficult and prohibitively expensive for all but the deepest pocketed patrons. Anything on the order of words or paragraphs has long remained a mystery.
Speaker 2:So can you imagine, you you've discovered this ancient Roman scroll, and you're just absolutely thrilled. You're like, okay. I'm gonna start I'm gonna start unrolling it and just disintegrates, like, immediately.
Speaker 1:Every single time. And they've tried so many different, like, bring in the, yeah.
Speaker 2:And and, Mike Solana posted something earlier today that was that was pretty interesting. He he basically said blogs from the, early twenty tens are actually less recoverable in many ways than these ancient, you know, multi thousand year old scrolls, which, is a whole other issue of, like, how do you properly archive the Internet and all the content we put out so that it can be, you know, preserved for, you know, people, you know, 5,000 years from today. Yeah. But, anyways, looking a couple Chads here, just a couple Roman Empire enthusiasts. Yeah.
Speaker 2:We love to see it.
Speaker 1:He clearly, like, became actually actual buddies with the the professor on the project, and they're just, like, hanging out now. And so, Friedman isn't your average Rome loving dad. He was CEO of GitHub. And most importantly, within GitHub, he developed GitHub Copilot, which is their AI coding assistant. And he's been AI pilled for years and years and years because this was the one of the first LLM implementations that actually got traction.
Speaker 1:And I remember back in, I think it was built on GPT three and back in '20 I think I guess it was, like, twenty twenty, twenty nineteen, twenty twenty. He was saying, like like, every other model, like like, GPT three at the time, people would kind of use it as a search engine or to, like, you know, do copy editing and stuff, but it wasn't quite dialed there. GitHub Copilot was the one product that didn't have super high churn. Obviously, that's changed now with things like perplexity and chat GPT and a lot of these apps. But GitHub Copilot was the first canary in the coal mine for these LLMs.
Speaker 1:These AI systems are robust enough to be used by people for for a long time.
Speaker 2:Yeah. Now now, I I'm sure people a lot of people just know him as an investor because he's now deploying a ton of capital and and his ability to have an idea and then pull together super talented people and just ship it. He did this with, another, Nat Grossman. So there's Nat Friedman and Nat Grossman and they
Speaker 1:ship it. It's Daniel Gross. Right?
Speaker 2:Daniel Gross. Sorry. Daniel Yeah. Dan Dan Gross. And they shipped an entire cluster just for their portfolio companies because they have another program called the AI grant, which is like a similar YC type of structure.
Speaker 2:So I love that just, like, having an idea, sharing it publicly, and then just, like, quickly actually acting on it, just not letting it stay in the timeline is great to see.
Speaker 1:Yeah. And so he launches the Vesuvius Challenge offering a million dollars in prizes to people who could develop AI software capable of reading four passages from a single scroll. Maybe there was obvious stuff no one had tried, he recalls, thinking. My life has validated this notion again and again. So is this VC investor mindset applied to, like, ancient history research, I guess.
Speaker 1:Yeah. And so as the time as the months ticked by, it became clear that Friedman's hunch was a good one. Contestants from around the world, many of them 20 with computer science backgrounds, developed new techniques for taking the three d scans and flattening them into more readable sheets. Some appeared to find letters then words. They swapped messages about their work in a discord chat, and often much older classicists sometimes looked on in hopeful awe and sometimes slagged off the amateur historians.
Speaker 1:So it's a little bit spicy. Oh, these AI kids gonna be able to make an impact here? They don't really know the the the true stuff. I love that there's, like Yeah. These little subplots and battles going on.
Speaker 2:You're not a real historian unless you've got gloves on, and you're sort of trying to piece apart, you know, disintegrating this ancient scroll.
Speaker 1:This is very disrespectful to the guys who just go Indiana Jones mode and and get in there. And and This
Speaker 2:is I I posted this gotta be the only edge of the the the AI models have eaten the entire Internet. So the only edge now is to go Indiana Jones mode and go looking for rare esoteric knowledge and and, you know, discontinued books. Right? Yep. But, they really did hear.
Speaker 1:And so, you you can see a picture here. Before Mount Vesuvius erupted, the town of Herculaneum sat at the edge of the Gulf Of Naples, the sort of gateway wealthy Romans used to relax and think. Unlike Pompeii, which took a direct hit from the Vesuvian lava flow, Herculane Herculaneum was buried gradually by waves of ash, pumice, and gases. Although the process was anything but gentle, most inhabitants had time to escape, and much of the town was left intact under the hardening igneous rock. Farmers first rediscovered the town in the eighteenth century when some well diggers found marble statues in the ground.
Speaker 1:Wow.
Speaker 2:In
Speaker 1:'8 in 1750, '1 of them collided with the marble floor of the villa thought to belong to Caesar's father-in-law, senator Lucius Calpurnius Piso, Casonius, also known today by historians as Piso. During this time, the first excavators who dug tunnels into the villa to map it were mostly after more valuable artifacts like the statues, paintings, and recognizable household objects. Initially, people who ran across the scrolls, some of which were scattered across the colorful floor mosaics, thought they were just logs and threw them on a fire. No. Terrible.
Speaker 1:Eventually, though, somebody noticed the logs were often found in what appeared to be libraries or reading rooms, realized they were burnt papyrus. Anyone who tried to open one, however, found it crumbling in their hands.
Speaker 2:Crazy.
Speaker 1:Should I keep should I go on? Let's see. Today, the villa remains mostly buried, unexcavated, and off limits. And so there's there's levels to this project where they get a few scrolls, they scan them, it's very expensive, and then that and then the more that they can unearth, the more they can decipher, the more they can invest in more digging and more scanning because each one of those is very expensive. I think even just, just taking the scroll to the CT scan, I think they flew it on, like, a private jet and, like, needed to, like, really, like, make sure they couldn't check this.
Speaker 1:You can't check this on United. It's gonna be a disaster. It's gonna fall apart.
Speaker 2:Yeah. At least you just throw an air tag in it if you're gonna
Speaker 1:Yeah.
Speaker 2:Throw an air tag here.
Speaker 1:Yeah. So, we have about 800 scrolls from the villa today, but there could be thousands or tens of thousands more. For the past twenty years, Brent Seals, a computer science professor at University of Kentucky, has used advanced medical imaging technology designed for CT scans and ultrasounds to analyze unreadable old texts. No one else was working on it, and no one else thought it was even possible. Progress was slow.
Speaker 1:Sales built software that could theoretically take the scans of a coiled scroll and unroll it virtually, but wasn't prepared to handle a real Herculaneum scroll when he put it to the test in twenty two thousand nine. The complexity of what we saw broke all of my software. The layers inside the scroll were not uniform. They were tangled and mashed together, and and my software could not follow them reliably. And, of course, 02/2009, this is before the deep learning revolution.
Speaker 1:There's a lot like the I'm sure this was more of a, of a of a programmatic approach, like more algorithmic approach to, like, mapping the geometry and trying to unroll it. Terrible job for, like, hand coding, perfect for deep learning. And so by 2016, his he and his students had managed to read, one scroll, a charred ancient Hebrew text by programming their specialized software to detect changes in density between the burnt manuscript and the burnt ink layered onto it. The software made the letters light up against a darker background. Sales team had high hopes to apply this technique to the herculane and papyri, but those were written in a different carbon based ink, and their imaging gear couldn't illuminate it in the same way.
Speaker 1:So massive setback in 2016. It is crazy how long this story has been going on.
Speaker 2:Yep. And and relevant too. I'm sure Luke is already dealing with this. You know, he would he had been posting last week. Hey.
Speaker 2:Does anybody have any way to process huge volumes of, you know, PDFs through any type of programmatic way? He's gonna gonna figure out how to do it with one document format, then he's gonna get, you know, a trillion new documents in another format and be having to do it in the same way. So he's, he's prepared.
Speaker 1:Yeah. And this this next paragraph is the biggest indictment of current, Silicon Valley, rich guy, billionaire VC culture. So, Nat Freeman finds this guy sales who's working on these scrolls. And, he had set up Google alerts for him. He's he's Nat Friedman's just getting obsessed with, with Rome.
Speaker 1:A Year past, there's no news. He starts watching YouTube videos, really understands that, this guy sales needs money. So in 2022, Friedman was convinced he could help. He invited seals out to California for an event where Silicon Valley types get together and share big ideas. This is like the perfect thing to send this guy to.
Speaker 1:Sales gave a short presentation on the scrolls to the group, but no one bit. And Nat Friedman says, I felt very, very guilty about this and embarrassed because he'd come out to California, and California had had failed him. And I'm sure what happened was, oh, yeah. We just wanted to hear about this crazy stuff, but we we really wanna put our money in, like, b two b sass. Like, I I could possibly throw a throw a 20 in the in the tricorne hat for this guy.
Speaker 2:It's so funny because, you know, many of the people that were pitched there on this idea would go on to to donate millions to VCs for Kamala. Yeah. And meanwhile meanwhile, Nat goes, you know, goes long on the scrolls and becomes literally a myth himself Totally. Uncovering this kind of thing, thousands of you know, it's it's a legendary move.
Speaker 1:Yep. And so Friedman proposed the idea of a contest. He said he put up some of his own money to fund it, and his investing partner, Daniel Gross, offered to match it. Seal says he was mindful of the trade off. The herculean papyri had turned into his life's work, and he wanted to be the one to decode them.
Speaker 1:More than a few of his students had also poured time and energy into the project and plan to publish papers about their efforts. So now suddenly a couple of rich guys from Silicon Valley were barging into their territory and suggesting that Internet randos could deliver the breakthroughs that had eluded the experts. More than glory though, SEALs just really hope the scrolls would be read, and he agreed to hear Friedman out and help design the AI contest. They kicked off the Vesuvius Challenge on the Ides of March. Krugman announced the contest on the platform.
Speaker 1:We fondly remember his Twitter, and many of his tech friends agreed to pledge their money toward the effort while a cohort of budding papyrologists began to dig in to the task at hand. Incredible. So they the so they lobby the Italian and British collectors for years to scan the first scroll. Suddenly, the Italians were now offering up two new scrolls for scanning to provide more AI training data. With Friedman's backing, a team set to work building precision fitting three d printed cases to protect new scrolls on their private jet flight.
Speaker 1:I was right. From Italy to a particle accelerator in England where they scanned for three days straight at a cost of about 70 k. That's a lot of money, but it's such a good investment. It's so interesting. And, yeah, the whole
Speaker 2:thing is Way less than the cost of flying private from LA to London, though. So
Speaker 1:Yeah. And so,
Speaker 2:Good bargain.
Speaker 1:Seeing the imaging process in action drives home both the magic and difficulty inherent in this quest. One of the scroll remnants placed in the scanner, for example, wasn't much bigger than a fat finger. It was peppered by high energy x rays much like a human going through a CT scan, except the resulting images were delivered in extremely high resolution. For the real nerds, about about eight micrometers. These images were virtually carved into a mass of tiny slices too numerous for a person to count.
Speaker 1:Along with each slice, the scanner picked up infinitesimal changes in density and thickness. Software was then used to unroll and flatten out the slices, and the resulting images looked recognizably like sheets of papyrus. The writing the writing on them hidden. And so these like, the files from the output of the scan are massive. So it's a perfect, case for data analysis and and AI.
Speaker 1:An algorithm that can detect tiny amounts of ink on a little each little piece of scroll fragment can then combine that data into a unified legible simulation of how the scroll might have appeared back in seventy nine AD. It is crazy. It's 2,000 years old. That's so, so old. Like, even even finding a book from 200 years old that's 200 years old is difficult to deal with.
Speaker 1:And, like, the paper might be dissolving. Imagine 2,000. Yeah.
Speaker 2:And so Hard enough to find a original copy of Mary Meeker's Internet report.
Speaker 1:Yeah. It is. Really? Yeah. We gotta get that on email.
Speaker 2:Original hand printed by Mary Meeker, staple. You know, that's that's priceless. Right?
Speaker 1:Yeah. Yeah.
Speaker 2:There's only a few copies left.
Speaker 1:It's all
Speaker 2:dark scrolls. Yeah. Yeah. Those are the real dark scrolls.
Speaker 1:Yeah. Yeah. Yeah. The draft that didn't make it to the to to to the printer. And so this is where Luke Ferritor enters the story.
Speaker 1:Luke Ferritor was hooked at from the start, Ferritor, a bouncy 22 year old Nebraskan undergraduate who often exclaims, oh my goodness. I heard Friedman describe the contest on a podcast in March. I think there's a 50 chance that someone will encounter this opportunity, get the data, and get nerds sniped by it, and we'll solve it this year, Friedman said on the show. Ferritor thought, that could be me. I love that.
Speaker 2:Yeah. He he good. This is this is a guy who's looking to get nerd sniped by opportunities. Right?
Speaker 1:Yes. Yes.
Speaker 2:You're not on the level unless you're actively looking to be nerd sniped by opportunities.
Speaker 1:Yeah. And so there's a there's a photo of, of Luke here, with his with his hand built piece. I'm sure he's got some graphics cards in there.
Speaker 2:He's grown up a lot in the last years.
Speaker 1:Looking great. Looking great. And so, and and this is an interesting, twist. Do you know Casey Hanmer? I've actually met this guy.
Speaker 1:He has a he has a castle in Los Angeles that he uses for his company Terraform Labs. Very cool company. They're they're, converting, they're trying to build I think it's, natural gas, conversion from the air using solar. So you're gonna put out a ton ton of solar panels and then basically create, like, suck carbon out of the atmosphere, use, hydrogen, get natural gas as for for energy. So you can use the solar panels to basically generate gas that then you can use, and it's all carbon neutral.
Speaker 1:So very cool. And he has a ton of really interesting blog posts about his, his thoughts on global warming and energy and stuff and and and where we go from here. So then Casey Hanmer, an Australian mathematician, physicist, and polymath, scored a point for humankind by beating the computers to the first major breakthrough. Hanmer took a few stabs at writing scroll reading code, but he soon concluded he might have better luck if he just stared at the images for a really long time. This is so funny to me.
Speaker 1:Eventually, he began to notice what he and other contest contestants have come to call crackle. A faint pattern of cracks and lines in the on the page that resemble what you might see in the mud of a dried out lake bed. And, there's a there's an image here of all the letters deciphered, and, the crackle became a big thing in the discord. To Hanmer's eyes, the crackle seemed to have the shape of Greek letters and the blobs and strokes that accompany handwritten ink. He believes it to be dried out ink that's lifted up from the surface of the page.
Speaker 1:The crackle discovery led Hanmer to try identifying clips of letters in one scroll image. In the spirit of the contest, he posted his findings to the discord in June. At the time, Ferritor was a summer contest.
Speaker 2:By the way, I love how this is a contest, but everybody's working together. Reminds me of the, the Russ Ulbricht case where, yeah, everybody wants to win. You know, everybody wants to, like, pin Ross and, like, be the guy. Yep. But at the same time, it's, as much as it's a contest, you know, especially in the case with these girls, everybody's sort of sharing their discoveries along the way, and it's not it's not a they're not seeing it as a zero sum game.
Speaker 2:They're they're playing for humanity. Right? And also the challenge.
Speaker 1:You see, I actually disagree with you because in the in the, in the Ross Ulbrich case, all of the different groups, they weren't working together well at all. No.
Speaker 2:It's no. They weren't wrestling
Speaker 1:their own. And and doing fraud.
Speaker 2:I'm not saying they were working together well, but there was some collaboration. Totally. In this case, you could imagine a world with the scrolls where nobody wants to share anything in the Discord because I want the 700 k.
Speaker 1:Totally. Totally. And and there's also this interesting thing where, in the Ross Ulbert case, everyone thought it was gonna be this, like, crazy hacking data analysis that would win the day. But just going on Google and looking back at old post was, like, a very key part of the story.
Speaker 2:Key. Yeah.
Speaker 1:And and it's the same thing where Casey Hanmer just looking at it and staring at it for a long time actually helped break the case wide open, which is awesome. So Ferritor was, a summer intern at SpaceX. He was in the break room sipping a Diet Coke when he saw the first post, and his initial disbelief didn't last long. Over the next month, he began hunting for crackle in the other images. One letter here, another couple there.
Speaker 1:Most of the letters were invisible to the human eye, but 1% or 2% had the crackle. Armed with those letters, he trained a model to recognize hidden ink revealing a few more letters. Then Ferritor added those letters to the model's training data and ran it again and again and again. The model starts with something that only a human eye can see. The crackle pattern then learns to see ink that we can't.
Speaker 1:Unlike today's large language models, which gobble up data, Veritor's model was able to get it get get by with crumbs. For each 64 by 64 pixel square of the image, it was merely asking, is there ink here or not? And it helped that the output was known. Greek letters squared along the right angles of the cross hatched papyrus fibers. So it's like the perfect case for using AI.
Speaker 1:And fortunately, because it's not this massive large language thing, he can run it on his computer that he built by hand. You know? He just needs he doesn't need a graphics card, and he doesn't need to write some some, you know, somewhat complex code, but he doesn't need a massive data center. You don't need to build Stargate for this, which is great. It's a really cool cool opportunity.
Speaker 1:So in August, Ferritor received an opportunity to put his software to the test. He'd returned to Nebraska to finish out summer and found himself at a house party with friends when a new crackle rich image popped up in the contest Discord channel. As people around him danced and drank, Ferritor hopped on his phone, connected remotely to his dorm computer, threw the image into his machine learning system, then put his phone away. An hour later, I I drive all my drunk friends home, and then I'm walking out of the parking garage, and I take out my phone not expecting to see anything. He says, but when I opened it up, there's three Greek letters on the screen.
Speaker 1:I love this anecdote. It's so good.
Speaker 2:Amazing. Amazing. Somebody was posting that this is this is the counterpoint to the vaccine that, you know, Americans, you know, just just are jocks and, you know, don't have the work ethic. He's he's locking in remotely from his phone to try to inch forward and create more progress, you know, from Nebraska. Right?
Speaker 2:Solving this incredible, almost impossible challenge. So Yeah. It's just I mean, it's such an amazing story.
Speaker 1:I'm not gonna pretend I understand the Saved by the Bell references, but he's clearly the good character in that show, whatever that means. So around 2AM, Ferritor texts his mom and then Friedman and the other contestants about what he'd found fighting back tears of joy. That was the moment where I was like, oh my goodness. This is actually gonna work. We are going to read the scrolls.
Speaker 1:Soon enough, Feridore had found 10 letters and won $40,000 for one of the contest's progress prizes. The classicist reviewed his work and said he'd found the Greek word for purple. Isn't that amazing?
Speaker 2:That's so amazing. So, one, we gotta start using, oh my goodness, because
Speaker 1:For sure.
Speaker 2:It's it's it's a great it's a great phrase and a and a great substitute for another for an alternative.
Speaker 1:Of
Speaker 2:course. But but but I just wanted to put it out there for our listeners. You know, this is a good an example of a great side hustle. So next time you're, you know, thinking to yourself, you know, I like my PM job. I make a couple hundred thousand dollars a month at Meta, but I'd like to do something on the side.
Speaker 2:Why not just sort of try to crack the code of some ancient scrolls to make a few an extra 10, you know, 10, $10,000 on the side? You know? It's a good it's intellectually stimulating and just a great sort of not it's not passive income, but it's it's a nice, you know, second income stream.
Speaker 1:Yeah. I mean, there there are a lot of stories like this. I'm pretty sure Greg, George Hotz, the Yeah. The the hacker who broke the PS three, the original iPhone, jail broke the iPhone and eventually went on to develop comma AI and, a bunch of other cool stuff. But, fantastic hacker, early in his career, he would do, hacking competitions and bug bounties.
Speaker 1:So he would go to Facebook and say, I I hacked your entire system. Like, I'm a white hat hacker. I'm not gonna do anything bad, but can you give me a reward? And they'd say, absolutely. Like, you just saved us billions of dollars.
Speaker 1:Here's here's a hundred k or something like that.
Speaker 2:And then would was he part of the reason that a lot of these companies ended up rolling out more formal programs around this?
Speaker 1:Because Probably generally, yes. Part of a trend.
Speaker 2:And then I think there was even there were even startups created that that were just marketplaces for bounties. Yeah. At some point or another. I don't know if any of them really broadly caught on, but, it's cool. Yeah.
Speaker 2:Cool strategy.
Speaker 1:And and I think at one point, he won a car because of it or, like, I I think he he hacked the iPhone and, Steve Wozniak sent him an email being like, this is awesome. Like you're, you're, you're an amazing hacker. And then Steve jobs was like, this is unacceptable. This destroys my business or something. It's something like that.
Speaker 1:I'm not exactly sure the story, but, it was very funny that he was just like, you know, as a kid, he was very young and he was having an impact and making money. Love to see it. So Ferritor continued to train his machine learning model on crackle data and post his progress on Discord and Twitter. The discoveries he and Hanmer made also set off a new wave of enthusiasm among contestants, and some began to employ similar techniques. In the latter part of 2023, Ferritor formed an alliance with two other contestants, Yousef Nader and Julian, Schillinger, in which they agreed to combine their technology and share any prize money.
Speaker 1:I love this. This is the this is the crew that they're building. Love it. And so in the end, 18 teams submit entries for the grand prize. Some submissions were ho but a handful showed that Friedman's gamble had paid off.
Speaker 1:Scroll images that were once ambiguous blobs now had entire paragraphs of letter of letters lighting up across them. The AI systems had brought the past to life. It's a situation that you practically never encounter as a classicist. You mostly look at texts that have been looked at someone by at by someone before. The idea that you are reading a text that was last unrolled on someone's desk nineteen hundred years ago is unbelievable, and you are on mute.
Speaker 1:A a group of classicists reviewed all the entries and did in fact deem Ferator's team the winners, so he actually won. What? They were able to stitch together more than a dozen columns of text while entire paragraphs all, over their end their entry. Still translating
Speaker 2:Luke got the email telling him that he won, and he just goes, oh my goodness.
Speaker 1:Oh my goodness. I I'm I'm fully taking that term and using that constantly. It's so good.
Speaker 2:Oh my goodness.
Speaker 1:Oh my goodness. It's so nice. Still the still translating the scholars believe the text to be another, work by Philodemus, one centered on the pleasures of music and food and their effects on the senses. Peering at and beginning to transcribe the first reasonably legible scans of this brand new ancient book was an extraordinarily emotional experience. I love that.
Speaker 1:They're just, like, so stoked. It's great. Yeah. Let's.
Speaker 2:It beats, beats slightly changing the color of a button to a different shade of blue and getting, you know, 1% increase in conversion. You know, it's close, but it definitely slightly more emotional.
Speaker 1:Everyone involved in this story is just so earnest, and that's what I absolutely love about this. There's just not there's not an ounce of cynicism here. And it's just beautiful. And that's why I'm so optimistic about his work at Doge. I think he's just genuinely
Speaker 2:Yeah. And that's why the people that are actually sending ridiculous messages, hating on him, trying to dunk on him, make him turn his account private. It's like if they just took literally five minutes to try to understand his story Yeah. I I I it's hard to say the how do you how do you position this? This guy's a bad person.
Speaker 2:Right?
Speaker 1:Yeah.
Speaker 2:Just really I
Speaker 1:mean, a lot of those people that are that are, you know, like, you know, aggressively anti Luke, they are not reading this coverage. They're reading some clickbait sensational sensational viral article about how, you know, he he he has right access to the treasury, and he's gonna send money. Yeah. All and he's just gonna steal all the money for Elon's thing.
Speaker 2:You saw there was this, I forget I forget which politician he he represents somewhere between San Antonio and Austin, Texas. So Texas based US representative. He was posting, we need to figure out how to fire Elon Musk. Like, he's we need to use every bit of political power and pressure and every law to get this man fired. And it's just so funny because he's not an employee of the government.
Speaker 2:You can't fire him, and he's working under the direction of the White House and the chief, you know, the chief executive officer of the country right now. Right? And so and and Luke's in the Luke's in the same boat, so good luck good luck firing Luke.
Speaker 1:As a point of clarification, I it came out yesterday. Elon is a special employee of the government. He does have a a dot gov email address. I I think the the the exact structure of Doge is evolving, and I think we'll go through a couple different, maybe maybe congressional or or legal challenges, but, but it is is evolving. But, yeah, I mean, obviously, there's a lot of people that are anti.
Speaker 1:A lot of people are pro. Even on the left and the right, even there's even some people on the right that are like, I don't like that the tech people are in charge.
Speaker 2:Yeah.
Speaker 1:So, it it it it's developing, but we're here to talk about Luke, the brother of the week. And so let's close out with the the goals going forward. Barring a mass relocation, Friedman is working to refine what he's got. There's plenty left to do. The first contest yielded about 5% of one scroll.
Speaker 1:A new set of contestants, he says, might be able to reach 85%. He also wants to fund the creation of more automated systems that can speed the process of scanning and digital smoothing so that you don't have to three d print the case, bring it over here, like, bring the CT scan there, dig out better. You need a lot of different people here. It's not just about the AI. The AI is just one piece in the value chain here.
Speaker 1:He's now one of the few living souls who's roamed the villa tunnels, and he says he's also contemplating buying scanners that can be placed right at the villa and used in parallel to scan tons of scrolls per day. Even if there's just one dialogue of Aristotle or a beautiful lost Homeric poem or a dispatch from a Roman general about this guy this Jesus Christ guy who's roaming around, he says, all you need is one of those for the whole thing to be more than worth it. What a fantastic story. What a fantastic story.
Speaker 2:Amazing.
Speaker 1:I love it. I'm so I'm so excited to see where the scrolls project goes.
Speaker 2:Yeah. The only the only bummer, small bummer
Speaker 1:Yep.
Speaker 2:Is that Luke was kind of a somewhat of you know, he was infamous already. He was but he was a bit more of a secret. And now when he does raise his precede round, it will be a hundred x ever subscribed and, you know, we're we'll all be lucky if we get a thousand dollar slug. But,
Speaker 1:but sure. Just send the wire now.
Speaker 2:But it's good. Yeah. Yeah.
Speaker 1:Here's the Let's
Speaker 2:write him a check.
Speaker 1:Cash it when you when when you incorporate at any terms. Yeah. At any terms. Yeah. We need
Speaker 2:a we need a free incorporation safe that that just says Yeah. This goes into your first your first round Yeah. If you start a company at any point.
Speaker 1:Yeah. Yeah. Exactly. Well, let's let let's go to some, some fantastic analysis from Ben Thompson over at Shrutekary. He's talking about the de minimis loophole, and he opens with a quote from Bloomberg.
Speaker 1:The US president Donald Trump's tariffs on China and other countries are rocking markets and casting a pall over Chinese firms seeking to go public. Take Sheen, the fast fashion sensation, the online retailer founded in China but headquartered in Singapore, is said to be working on what could be one of the biggest listings in London in years, potentially valuing the company at 61,000,000,000 US dollars as soon as this year. Trump's executive order specified that the de minimis exemption for packages worth less than $800, a loophole used by the likes of Sheen for years, will no longer apply. Though Sheen has been diversifying its shipping bases ahead of Trump's trade policies, The full scope of the de minimis changes is still unclear. It's unlikely that the company would be immune to the changes.
Speaker 1:Sheen didn't respond to a request for comment.
Speaker 2:P Yeah. John, can you can you break down for the audience? So Sheen manufacturers their products in China, and then instead of sending a single shipping container that would have a a value far higher than than $800, they send the individual packages
Speaker 1:Yep.
Speaker 2:From China direct to consumers.
Speaker 1:Yep.
Speaker 2:And that's what allows them to get around that that, that that's the loophole. Right? Yes. That is
Speaker 1:the demon and miss loophole. And the reason that the demon and miss loophole exist, it was not this is not something that Sheen and Timu lobbied for. And then, oh, they got lucky and they knew that this was gonna be a thing. No. The de minimis loophole makes a ton of sense because if you're some Etsy seller and you wanna send someone a $50 package, a T shirt from Italy to America, it makes sense that that having to do all the different customs and tariffs and all the different oversight on that small package is cumbersome.
Speaker 1:It actually imposes a massive cost on the government and and the and the ports, and there's all these extra filings. And so the government kind of wisely at the time said, hey. Let's just focus on the big stuff that's coming in, the massive shipments of pallets of TVs or the cars that are coming in. Let's tax those. And you know what?
Speaker 1:At the time, I'm sure they looked at it, and they were like, you know, if we draw the bar at eight at $800, that's less than 1% of trade volume. And so, sure, we'll lose we'll lose if we're if we're taxing something at 10%, we'll lose 10% of 1% of our trade, you know, revenue. Doesn't matter. Not a big deal. But then once this loophole started to exist and became popularized, people figured out how to take advantage of it.
Speaker 1:And the answer was, let's ship directly from the factory, an individual package directly to the American consumer. It takes a long time. And so when you go on Timu, I actually I actually went on Timu, and it is the funniest ecommerce flow you've ever seen. I I you open you go to Google images and you search for something. You land on the Timu website.
Speaker 1:You're on mute. And, and you land on the Timu, like, you know, like like, you know, web view. It really wants you to install the app, but it it it does one of those spinners, you know, the spinners to be like, you know, what's your percent off? And and I'm like, okay. Like, I guess I have to click this to get to the product or whatever.
Speaker 1:And and it spins, and and you always win 100 off. They just figured they realized that, like, giving someone 10% off isn't as good. So just tell them they got a % off. And then it it pops up another spinner that's like, now you're eligible for a multiplier, and it's like two x, three x, six x. You always win the most the highest, like, multiple.
Speaker 1:So then all of a sudden, it's like, you have won $600 in free stuff. Like, install the app, and then, of course, once you go down that funnel, it's like, oh, well, like, you gotta pay shipping and all this other stuff, and the shipping's the only thing that costs money. So, you know, is this whole, like, kind of scammy, like, ultra optimized thing? But I was just cracking up being like, oh, really, Timur? Like, you're just gonna give me all this stuff for free?
Speaker 1:Like, it's such a scam.
Speaker 2:Well, you remember when we launched our trailer for the podcast Yeah. At the end of last year, somebody one of one of the the negative comments that I saw was, oh, tech tech brothers do, Timu's succession. And I was like, yes. This is Timu's succession. We filmed this video in in basically twelve hours with a $2,000 budget.
Speaker 2:It is you nailed it. Yeah. But it's it's interesting how Timo became such a Timo, you know, exploded, and and I don't know if if Ben has the data here, but, it it did become popular, and it did make it really difficult if you made custom T shirts at a at a factory in LA, and you could go on Timu and get a shirt that's, you know, oftentimes something like a T shirt. You're not as worried about the quality if you're just some company that plans to give them away. Say you're an ice cream shop, you'd you'd rather pay $5 for the T shirt than $25 locally.
Speaker 2:And so it really made it almost impossible to compete if you're a localized manufacturer.
Speaker 1:Yeah. And it's been part of this, this value chain erosion that's happened where it used to be, you know, like Apple manufacturers in China. They have a massive facility there, a huge partnership with Foxconn. There's Apple employees on the ground. And so it's very much like an Apple designed and made product with the help of Chinese manufacturing.
Speaker 1:Then you go to the next level, which is like, oh, an entrepreneur has an idea, and they're like, I wanna just sell T shirts, and they just call a Chinese factory. They basically do everything. It's very turnkey. Then and then they list that on Amazon, and it's like China's pro providing, like, all the manufacturing. Then Sheen and Timu kind of cut out the the the middleman and just went direct.
Speaker 1:And so all of a sudden, it went, like, products come out of the Chinese factory, and they go directly to the door of the American consumer.
Speaker 2:And to be clear, manufacturers like Apple aren't benefiting from this loophole even if they're selling a $500 product because Apple is sending, you know, a a a shipping container with with 10,000 AirPods in it. Yep. And so the the total value, even though the individual product might be a couple hundred bucks, ends up being far beyond the the sort of loophole based on because the the loophole is based around the the shipment itself.
Speaker 1:Exactly. Exactly. And so, Tmoo is owned by PDD Holdings, a company that I'm sure will do a deep dive on soon. They rapidly expanded in The United States by offering steep discounts on a variety of products for people willing to wait a week or so for delivery because it comes literally from China from the factory. This is another Chinese linked firm that's in The US's crosshairs.
Speaker 1:The popular marketplace, which eMarketer estimates will sell $30,000,000,000 of products to US shoppers this year, became an alternative to Amazon as well as retail chains such as Hobby Lobby, Party City, and Dollar Stores. Like Sheen, Timu has largely anticipated Trump's decision by expanding networks in The US and moving to bigger bulk orders. Timu didn't respond to quest for comment. American shoppers and companies imported about 48,000,000,000 of shipments from the world under the de minimis loophole in the first nine months of last year according to US Customs and Border Protection estimates. And so, we would show state
Speaker 2:you can think of what we're doing for technology podcasting. Timu is doing for consumer products. Just flooding the market with, and the scale is honestly unbelievable. And and the the, you know, the obvious critique of Timu and the, the the long term critique of China has just been what you know, that they're manufacturing products at incredible scale at incredible prices and just flooding the market. And oftentimes, specifically in the case of Timu, you can if you wanna buy an air filter, you can go buy a Timu air filter.
Speaker 2:I'm sure it costs, like, $20.
Speaker 1:Yep.
Speaker 2:And the and the critique is that, yeah, you woulda had to spend $200 to get a a comparable product that was made by a more reputable firm. And the Timu product's gonna just basically evaporate over time, breakdown, and things like that. And so a lot of these products have a pretty short, not shelf life, but just just life in general. Right?
Speaker 1:Totally. And so, there are two charts in here that will show. One is, de minimis de minimis exports from China, over the last six years from 02/2018 to 2023. And the top bar there is going or the bottom bar is going to The United States, but you can see China has wrapped up has has ramped up these de minimis exports from, about $5,000,000,000 in 2018 to $65,000,000,000 in 2023. And so this de minimis loophole was discovered and then exploited to great effect, and you've seen, you know, this this chart
Speaker 2:So this the blue bar is United States, but the other the other section and and the rest of the bars there are, presumably, there aren't. It's it's maybe maybe Malaysia, Taiwan, United Kingdom, Vietnam, etcetera adopted similar de minimis? Yeah.
Speaker 1:Yeah. De minimis is a is a common construct because it increases efficiency of trade. And so other is probably all of Europe, Africa, LatAm, like, all these different countries combined. And you can just tell that, like, the this chart looks like a start up graph, but you don't see types you don't see graphs like this in global trade. Like, global trade Yeah.
Speaker 1:Typically grows at, like, 2%, three %, ten %.
Speaker 2:Not Yeah.
Speaker 1:You know, not six
Speaker 2:or x or 10 x over Yeah.
Speaker 1:You know, 10 x over six years. Like, that's very, very rare. And it's all driven by, just finding this loophole and then just spamming it, basically. And so let's go into, the Stratechery article. Ben writes, now that tariffs are front and center in the news cycle, you may see some commentary referring to the Smoot Hawley Tariff Act of 1930, which dramatically raised tariffs on over 20,000 imported goods in an attempt to protect US industries.
Speaker 1:In is so interesting. This stuff is not new. Many commentators feel that it contributed to the great depression. One challenge in implementing that level of tariffs, however, is was the sheer amount of manpower necessary to inspect every import and levy the appropriate fee, particularly for small items mailed to individuals to alleviate the challenge, the act included a de minimis exception. And so this is what we were talking about.
Speaker 1:And here's a quote, that the secretary of the treasury be and is hereby authorized in his discretion to prescribe regulations for the administration, free of duty articles, not regulations for the administration free of duty articles not exceeding a value $1 imported by one person one day. So that $1 figure, it was originally $1 in 1930. It's been expanded. In 1962, they took it to $10. In '75, they took it to $25.
Speaker 1:In '78, there was a lot of inflation in the seventies. They took it to $50. In 1980, it was a hundred, 2 hundred and 80 8. And then finally, in 2016, it was a The lesson here. 2018.
Speaker 2:The lesson here, go back in time and buy Bitcoin in 1930?
Speaker 1:Yeah.
Speaker 2:This currency debasement is, is concerning.
Speaker 1:Yep. And so this has been a boon to businesses like Timoo and Sheen, which sell Chinese made products to US consumers and then ship them directly. So now China dominates de minimis, shipments. A key part of China's global ecommerce growth has been the expansion of PRC and PRC tied ecommerce firms into The US market. The US retail ecommerce market constitutes over half of all global ecommerce sales.
Speaker 1:And so, imports under section three twenty one of the tariff act of 1930. And, Ben, I don't know if Jory's not on screen, but you might just wanna go to me. Section two thirty one allows for US imports under a de minimis threshold to enter free of tariffs, fees, and taxes. In 2016, Congress raised the threshold to $800 per shipment, and that dramatically changed the landscape. And so, let's go to, this the as China is dominating, this is obviously important particularly for US ecommerce and its associated e ecosystem, but this has also played a significant role in the fentanyl epidemic.
Speaker 1:Reuters has an excellent in-depth investigation of the relationship here. We will have to read that on the show soon. And so the big question is, how is this affecting, Amazon and Meta? And I don't know what happened with Jordy. Let's see.
Speaker 2:I'm I'm still here. My I think my camera battery died.
Speaker 1:You could probably just switch it over to, the the computer, camera, and I think you'll be good there, and we should be able to see that. So Stratechery, however, is a tech newsletter, and the angle I am most interested in is the effect on US tech companies. That list starts with Amazon, which will likely be affected by this rule. And so the information, reported previously that Amazon plans to launch a section of its shopping site featuring cheap items that will ship directly to overseas consumers from warehouses in China. So this de minimis exception was such a big deal that Amazon was like, well, we have to compete.
Speaker 1:We can't just get left behind here. So we need a team who competitor within the Amazon ecosystem. And so those orders, they're not gonna be prime. They're not gonna be next day. They're gonna take nine to eleven days to get to customers, but they will stem the bleeding because it's a directly competitive product with, with Timu.
Speaker 1:And so it's not clear if these Amazon shipments will be made using a US trade provision that exempts individual packages worth than 800 worth worth less than $800 from US custom duties. Sheen and Timu are among sellers that use the provision, which some US Politicians and trade groups have criticized as a tariff loophole. So it's hard to understand the point of this new offering if it's not leveraging the de minimis loophole. Like, that's the only reason that Amazon would do this is because they're interested in leveraging the loophole. The program did launch last fall, by the way, and it's called Amazon haul, which I think is so funny.
Speaker 1:What a great one. Amazon's Well,
Speaker 2:this is and and that's that's probably a reference to people ordering a hundred items on Timu and then doing these sort of unboxing videos, these TikTok videos. I'm sure that the thing is TikTok has been using, they do this warming feature, which we talked about on the show yesterday, where they will, show your videos to more people if you talk about specific topics. So over the week over the last week, it's been if you talk about deep seek, you're gonna get a a lot of, views. And so, I'm sure they did a number of things where if you do Timu halls, you're gonna get a bunch of a bunch more views. And so just blatant proof that, the the Chinese companies coordinate to use TikTok as a channel to influence, activity in The US.
Speaker 1:Oh, yeah.
Speaker 2:Yeah. Which is, again, why is the company still operating? I don't know. I'm sure there's deals being done, you know, behind, behind the scenes.
Speaker 1:That's the big reason why Ben Thompson was advocating for Amazon or Walmart to be the logical acquirer for TikTok if there was a divestiture because that, like, that is the ultimate monetization for TikTok more so than just running ads. And so Yeah. When you sell it to Meta, is this crazy it is kind of, like, anti competitive. They're building this crazy monopoly. Google doesn't really need it.
Speaker 1:Microsoft, it doesn't really make that much sense, but, Amazon or Walmart could be perfectly positioned because TikTok shop has been so successful.
Speaker 2:Well, let me learn yesterday from somebody in the chat too that Walmart had it took a shot at at social media with their WM Connect product back in the AOL days. So Walmart is no stranger to, you know, social media.
Speaker 1:Yeah. And so Ben is, throwing some shade here, putting Amazon on the truth. And he says, I suspect when Amazon says, we also hear from customers, they mean we look nervously at Timu and Sheen's rising sales numbers. Hall, interestingly enough, is only available on mobile where Timu and Sheen derive their sales. In other words, I still believe in my original thesis, Amazon would love for this loophole to be closed.
Speaker 1:A world where everyone pays the same import duties is one where Amazon's delivery network can be much more effectively brought to bear.
Speaker 2:Yeah. And it's it's it is interesting to think about how these companies realize that, even though US consumers basically now demand two day shipping max, Like, your conversion rate will suffer if you're not offering competitive shipping.
Speaker 1:Yep.
Speaker 2:They realize, hey. If we can get somebody 50 items for what it costs to order, you know, five items on Amazon, they'll wait you know, they're happy to wait seven days, in exchange.
Speaker 1:Yep. And so Timu and Sheen are not responsible for all of Meta's growth. We're we're we're going over to how this affect Facebook and Instagram. But the two companies combined, it's estimated spent just under $3,000,000,000 year to date. Mevan Meta's revenue is up around 11,000,000,000 year over year.
Speaker 1:And so the growth of Timo and Sheen, certainly, they're spending more. They're driving a lot of growth, but Meta's growing independently. So it's less of this, like, existential issue. If Timo and Sheen go away, it shouldn't be that much of an effect on Meta. Moreover, this spend is more palatable and potentially sustainable than TikTok spend was.
Speaker 1:So when TikTok was spending on Meta, they were, like, directly stealing
Speaker 2:Yeah.
Speaker 1:You know, users. But ecommerce apps are not a strategic threat to Meta, quite the opposite in fact, and also lack of network effects to make themselves sustaining entities like TikTok has become. So the subsidies could go away. Macro events could intervene. Meta still deserves credit for figuring out ATT, but Timu and Sheen do make the story a bit more complicated because while ATT was kind of throwing all this curve ball towards Meta, and they were figuring out how do we get the small, you know, mom and pop ecommerce engines going again.
Speaker 1:Well, Timu and Sheen came in and were like, here's $3,000,000,000 to, like, you know, keep the Yeah. Keep the revenues up into the right, which is great. Yeah. And so this quarter did turn out to be the peak of Timu and Sheen share of meta advertising around under 7% on Facebook and just under 4% on Instagram, and they're down to around four percent and two percent respectively now. Still to the to the extent their businesses are impacted by these measures and notably an important part of their hedging has been building distribution centers in Mexico.
Speaker 1:There may be some impact on Meta's ad prices. I don't think it'll be substantial is what Ben says. And so Yeah. Very, very interesting, very, very interesting discussion of how the Trump tariffs and changes in regulation are affecting tech. He ends with, a little bit about AI and abundance.
Speaker 1:It's worth pointing out that the de minimis exception exists for a good reason. We mentioned this. There There are a lot of items that are shipped in The US every year, and it's understandably difficult to examine everything. It's also worth pointing out that any item that qualified for the de minimis exception also gets to use what is known as informal entry, which means much more limited paperwork. No needs for a custom bond.
Speaker 1:Informal entry applies to shipments worth less than $2,500. To that end, it remains to be seen just how much of a difference these tariffs make and exactly how the US Customs Authority handles the onslaught of packages. So, you know, you're you're doing those. You're trying to cut down on the amount of, government employees. Well, you know, you might have just 10 x the amount of work, that's going on if you're trying to investigate and and tax all these packages.
Speaker 1:But he ends by saying, I would also note this seems like a very interesting problem on which AI could be brought to bear. There's a story here about how the Internet scale simply crushes a loophole created for a analog world. Perhaps there is a solution in which AI's ability to ingest and understand vast amounts of data could make the chaos could make sense of the chaos in a way that preserves their convenience while solving a problem of abundance. Of course, the chasm between theory and reality is a massive one, particularly in terms of government bureaucracy. But I do think that this is one of the many examples of where AI will have unexpected benefits.
Speaker 1:And so I yeah. We gotta get Luke Ferritor into the, into the, you know What
Speaker 2:is it? Department of Homeland Security? I don't actually
Speaker 1:Yes. I I don't know. Yeah. Yeah. The the at the ports.
Speaker 1:He's gotta go to the port.
Speaker 2:Yeah. Yeah.
Speaker 1:He's gotta open his laptop and, set up some set up some LMS to look at every every day minimus import that's coming in. I guess, US Customs and Border Patrol is the one. It's the customs department. And so let's move on to our third story of the day. A wonderful deep dive.
Speaker 1:So, that last one was from Ben Thompson Everest for Techery. Highly recommend that you go subscribe. It's fantastic, fantastic newsletter in your email three times a week, and, you also get a bunch of podcasts, a bunch of great stuff with it. So highly recommend, Ben. Let's go over to Ashley Vance who now that that first piece we read about Luke Ferritor, that was with Bloomberg, but he's no longer with Bloomberg.
Speaker 1:Luke Ashley Vance has moved over to corememory.com, his new media company. He's independent. He's going direct, and he has a fantastic write up of the boom supersonic, test that happened in the Mojave. And he says, take me to bed or lose me forever in the supersonic corridor. The city of Mojave has a population of about 4,000 people and sits a hundred miles north of Los Angeles.
Speaker 1:Some people might describe it as a dump, I guess, and they would not be altogether wrong. As the name indicates, the city of Mojave is in the Mojave Desert. It gets about two to six inches of rain a year, experiences extremes extremes of heat and cold, and has gusting winds. California State Route 14 rips right along the city's edge. And if you're not on it or not paying attention, you could drive by Mojave in a flash, missing out on the delicacies offered up at a Denny's, Wiener Schnitzel, or Subway, or a fine stay at the two star America's Best Value Inn.
Speaker 1:Core memory has a need, a need for reads. Become a free or paid subscriber and support our battle against nameless faces enemy. Let's go. I love reading the calls to action in the middle of a Substack post. So go subscribe if you're not subscribed already.
Speaker 1:All of this is to say that I love Mojave and go there as often as I can. What drew me this time, is, is this, boom supersonic launch. And so the airport is flanked by Edwards Air Force Base and a and the naval air weapon station China Lake. China Lake is a fascinating story. We should dig into it at some point.
Speaker 1:That's where they do a lot of, like, crazy military tests. That means the Mojave has an exceptional, sometimes eccentric aircraft doing wonderful things, and that the flying stuff is complemented by stuff that goes boom. The event is catalyzed. The event that catalyzed the Mojave's position as a special place incorporated all these characteristics. It occurred in 1947 when captain Charles Yeager, became the first human to go past the sound barrier in the Bell x one plane.
Speaker 1:In the years that followed, the military bases did most of the work pushing the Mohave's reputation as the forefront of aerospace adventure. Tom Wolf captured the scene well in the right stuff where courageous man manly pilots were turning up in the desert to flex their cojones, and young women were apparently all about it. Wolf describes both groups mingling at the happy bottom riding club run by the iconic Florence Lowe Pancho Barnes with language that I'm not sure mainstream writers would get away with today. Although labial piping little birds is evocative. I think he said
Speaker 2:His writing is, this is why when Ashlee Vance started core memory, legacy media died because they lost they lost a star.
Speaker 1:I think this type of writing makes a comeback with Ashlee Vance in the wild. He doesn't have an editor now. He can say whatever he wants.
Speaker 2:Whatever he wants.
Speaker 1:Let's get the flowery language out there. Let's differentiate from the LLMs, the slop. We're not going slap when we're reading Ashley Vance. It's good stuff.
Speaker 2:Yeah. OpenAI is is hitting refresh on corememory.com waiting to ingest this, this incredible, flowery language.
Speaker 1:Yeah. And so, he, he's there to talk about Boom Supersonic. Last week, Mojave, the city, turn returned to its full glory at least for a moment. Boom Supersonic flew its x b one jet past the sound barrier for the first time, and I got to witness the whole affair. And And he's making a video about it, so go subscribe to Core Memory.
Speaker 1:Boom was founded in 2014 by Blake Scholl, and he had nothing resembling an aerospace pedigree. Scholl, a computer scientist, had worked at Amazon and Groupon, dear god, before starting Boom.
Speaker 2:So so his LinkedIn was getting shared around because he was a product manager at Groupon right before starting Boom.
Speaker 1:Yeah.
Speaker 2:So what a what a outlier, bet. He would have been nicely pattern matched to go start a some type of, retail, you know, app SaaS company, but, not the guy that's getting pattern matched to start a a supersonic, aviation, aerospace company.
Speaker 1:Yeah. And so even with his pedigree, he's still he went to YC. They gave him a lot of coaching on how to get, how to pull forward, like, contracts and kind of, like, not like real revenue, but, like, if you make it, we'll buy it, and that derisked for investors. And so all of a sudden, I think I think the combination of the background, the YC strategy, the demo day, all that stuff got the business off the ground and got the initial funding. And I love that when people talk about him working at Groupon, he's like, yeah.
Speaker 1:Now I'm just trying to do 50% off coupons for how long it'll take you to fly from LA to New York. Yeah. He has a great one. He's got a bunch of zingers based on it. And so, here we are eleven years later.
Speaker 1:What a journey. And Boom is still at it, and the x b one is not even the aircraft around which it hopes to fly regular folk. Rag rather rather, the x b one is a single person jet that Boom has used to test out some of its ideas, materials, and team when it comes to handling the pressures of supersonic flight. The plane that that could end up taking people from London to New York in a zip is called Overture, and we'll need a few years and tons more money to create and clear for safe travel. We've obviously been here before with the Concorde, but it had the weight of the British and French governments behind it.
Speaker 1:The x b one has been built on the back of venture capital. And when it went supersonic last Tuesday, it marked the first time an independently developed jet had done so. So when it went
Speaker 2:Yeah. They did start with a with a 50
Speaker 1:person team. Right? Person team on the on the x b one project. They do I think they have a 40 employees. Got
Speaker 2:it. A lot
Speaker 1:of those people are working on overture and other stuff.
Speaker 2:But still, the fact that you can fit 50 people in a shot with the plane is incredible.
Speaker 1:And Crazy.
Speaker 2:Coming off of off the back of a of a recap that, you know, a lot of their investors had to,
Speaker 1:you
Speaker 2:know, they had to say, hey. We're we're gonna, you know, basically double down, triple down on this thing to make it work. Yep. Incredible timing. And I'm I'm imagining this this success of this latest launch, our flight should attract some more capital and allow them to continue to, to hopefully thrive.
Speaker 1:100%. One hundred %. So after the flight, Scholl groused on x that neither the New York Times nor the Wall Street Journal had bothered to cover the event. That's warranted grousing. Calling them out, Ashley.
Speaker 1:Don't let up. You, but then again, you know, I'm glad that we have core memory. You know? I don't know if I wanna read a New York Times write up. Oh, it's annoying that they went fast.
Speaker 1:I don't like it.
Speaker 2:Slow down. Slow down.
Speaker 1:Too fast. Yeah. Okay. So he says, yes. Okay.
Speaker 1:Boom had already flown x b one about 10 times from Mojave at sub supersonic speeds. Shoal will tell you that the company has learned most of what it needed to during these test flights, and there's also a degree to which the x b one busting through the sound barrier was simply symbiotic. But also WTF. There are pragmatic reasons this test flight was such a big deal. Boom is one of our last best shots at getting supersonic commercial travel.
Speaker 1:The The Concorde retired in '20 in 02/2003 because it was too expensive. Afterwards, people were inclined to deem affordable supersonic flights as an impossibility, which is ridiculous. Yeah. We have a couple major supersonic bets going with Boom and Hermes, big fans of both companies, but they're both battling away in a horrifically hard and costly business. And if they fail, we might not see anyone take a swing at supersonic commercial flight for decades.
Speaker 1:Maybe you like being wedged in a seat for eleven hours going from San Francisco San San Francisco to Tokyo. I don't. Yes. I'm with you, Ashley.
Speaker 2:No. It really it really is wild to think about just cutting cutting even cutting in half being able to get to Europe from from LA in the time that it takes to get to New York would be incredible. You're shrinking at at a time when in many ways, you know, looking at the trade war story and and and things like that, Peter Zeihan was right in his prediction that we're going through this period of deglobalization, but supersonic flight would would have an opposite effect and that everything would become closer. Right? Being able to get to Tokyo in a couple hours, very cool.
Speaker 2:Sam Altman would would have would love that. He'd get to go hang with Masa a lot more regularly and, go car shopping as well.
Speaker 1:I love it. I love it. And so, Ashley's, waxing poetic about the impact of this. He says, on the far more visceral front, boom, doing this test flight was not just cool, but important for all the historical context reasons I laid out earlier. Some of The US's best engineering achievements have taken place in the Mojave because of the culture built up in the Mojave.
Speaker 1:It's a special place, and it requires tending and fuel to keep on thriving. The US is a rare country to The US is that rare country to even have a supersonic corridor and to have supersonic ready objects to shove through it. It's good to test such engineering limits and be reminded of what we're capable of and to maintain the need for speed. One of my favorite Mohave aerospace types is Ben Brockert, who went on to work at Astra Space after a stint at Masten. I wrote about him in my book, When the Heavens Went on Sale, and include a tribute to Ben from that book here.
Speaker 1:Having pined to get into aerospace since he was a kid, Brockert bought a $500 very, very used 17 passenger van and drove it to the Mojave Desert to begin knocking on the doors of space startups. It took months to find a gig living out of his van and trying to fill the days as best he could. I managed to get a library card and read all the books I had not read, he said. I also spent a lot of time bombing around the desert and trying not to die. Through a stroke of luck, a position opened up at Masten, and Brockert soon established himself as an essential part of the zombie team.
Speaker 1:He continued reading aerospace books and learned a ton on the job over the course of three years. Mojave is like a new space penance. He said, it sucks, but you put in your two to three years, and then you go do something somewhere else if you're good. And so what a what a fantastic anecdote about just, like, if you wanna be an AI, you probably gotta go to SF. If you wanna be in defense tech, you're gonna be in the Gundo.
Speaker 1:If you're gonna be in supersonic stuff, you gotta go to Mojave, and I love that. It's not
Speaker 2:so it's not so bad out there. I'm I'm sure you've driven through the desert at at some point. It's got a kind of a, you know, a a super galactic vibe out there. I, I'm I'm bullish on the Mojave. We should do some on the ground on the ground reporting in the Mojave.
Speaker 2:Ashley, next time you go, please invite us. Yeah. We'll tag along, and and whatever news you're covering and breaking, we'll front run you a little bit. We'll break it live. Yeah.
Speaker 2:But then we'll still cover your your article the next day.
Speaker 1:Yeah. Well, well, let's move on to some, back and forth we had on the timeline with Patrick Collison, the founder and CEO of Stripe. We reacted to his fantastic post about, two different types of phone booths. You might have seen this on a previous show, and he followed up by showing us an image of a beautiful building, which I think he has his eye on, maybe. I don't believe this is the actual Stripe headquarters.
Speaker 1:It looks somewhat AI generated. I couldn't find it on a Google image image, reverse image search, but, I think you got the right idea, Patrick. I wanna see this, I wanna see this in action. And,
Speaker 2:Yeah. Making everything look
Speaker 1:beautiful. Like, what you're doing is so important to tech, and I just, I mean, everything from, like, the blog and the fast, he has a whole, like, documentation of all the different projects that have been done very quickly. He's an incredible thought leader, I guess, you could call him in tech and just, an inspiration to everyone who's building and wants to make beautiful things. And so, happy to happy to have a back and forth with them on the timeline.
Speaker 2:Yeah. And this is a a great example of of a founder with incredible taste who now has the resources to go out and, instead of building, you know, the Apple loop, whatever what do they call their their campus? The spaceship. I don't know. He can build this structure that that looks like, you know, what what maybe a bank would have looked like in the during the
Speaker 1:Roman Empire. Right? Yeah. Yeah. Yeah.
Speaker 1:It it is very funny. It is. I mean, they're not technically a bank, but they do a lot of,
Speaker 2:you know, fintech is bank
Speaker 1:Financial institution. Right? Financial institution. And, yeah, we love Stripe. Stripe helped us incorporate, Technology Brothers, LLC, which was very helpful.
Speaker 2:Certainly did.
Speaker 1:So shout out Stripe Atlas. Give Patrick Collison a call. Tell him the Technology Brothers sent you. Go incorporate your next business on Stripe Atlas today. We love Stripe, and thanks for engaging with us, Patrick.
Speaker 1:We we love to have you on the show. You're welcome anytime. Let's move on to some breaking news. Jason Carmen has launched his new company,
Speaker 2:Story. Back.
Speaker 1:He's back. He took a little break. He was working on just one ninety minute movie. No big deal. Stop posting the weekly documentaries, which are already insane and and crazy high production value.
Speaker 2:In many ways and let let's just be honest. In many ways, John Coogan walks so Jason Carmen could fly. Right?
Speaker 1:For sure.
Speaker 2:He kind of, he kinda came in. He was like, hey. John's a little distracted with the podcast. That's, you know Yeah. I'm just gonna launch a series of highly produced films that will go on to live on, I'm sure, Netflix and Amazon, you know, Prime and and and all these
Speaker 1:For sure.
Speaker 2:Platforms. So it's it's amazing to see.
Speaker 1:The guy sprints everywhere and, incredible energy, unrelenting drive. He says, this is the company I've wanted to build since I was nine, and I'm so glad he landed here and doing this. Obviously, he had a ton of different opportunities. He was in house at a start up for a while. This is such it's just a perfect fit for him.
Speaker 1:He's gonna be be able to make science fiction films as well as documentaries, corporate work, you know, stuff on Netflix. I saw his camera. He's able to post behind the scenes now. He's running the Sony Venice two. This rig's like a hundred k.
Speaker 1:He he is he's he's beyond the requirements to deliver to Netflix at this point. Like, all of his gear is ready to be shown almost in IMAX. Like, it's that level of production, and tech has never seen anyone who's this much of an artisan and craftsman care about this type of media in this way. It's always been a side project, but this guy, this is his life's work. This is clearly what he's doing, and he's gone full send, and we're happy to support him here at Technology Brothers.
Speaker 2:Yeah. And it's amazing to see this rise. I think when you think about legendary filmmakers, of today, you know, that built their careers across twenty, thirty, forty years Yep. You would get to see their films, but you wouldn't get to see behind the scenes in the same way of seeing their journey. Maybe it's a interview with with the New Yorker or, you know, they do a talk at, Sundance, but you're not getting this sort of daily seeing the progress and seeing somebody build a career, which is which is amazing to see.
Speaker 2:So congratulations, Jason.
Speaker 1:Congratulations, Jason. Keep up all the hard work and keep making incredible content.
Speaker 2:Keep posting.
Speaker 1:Keep posting. We have an update on a post from yesterday. Mateo over at Eight Sleep, couple weeks here. We both sleep on Eight Sleeps. We highly recommend Eight Sleep.
Speaker 1:The pods were delivered to Doge. I hope this will supercharge Elon Musk and the incredible team to shape the future of America. Let's go. And so they packed these up. They ran them through the metal detectors, through the scanners, the X-ray scanners, and they got them in the building.
Speaker 1:And incredible quick turnaround. I didn't even know how they got them out of the out of the factory that fast or out of the distribution center, but they were there in DC in less than twenty four hours delivered. And so, enjoy it, Luke. Enjoy it, the rest of the Doge team. I hope you guys Yeah.
Speaker 2:The high sleep scores. Luke, for the four hours Luke is sleeping at night, it's gonna be the best four hours of sleep of his life. Yeah. And, yeah, if you don't have if you don't if you can't invest a lot of hours in your sleep, you definitely gotta be on an aid sleep.
Speaker 1:Yeah. I mean, aid sleep also sponsors f one, these elite athletes. You think about Luke. He is an elite athlete of
Speaker 2:The thing
Speaker 1:government of
Speaker 2:the company. That I don't think, I don't think people realize about eight is is the the cozy element is crazy. So a lot of people think about the the chilling, which is nice. You know, maybe you get into bed and you you wanna be a little bit cooler, relax. But that more you know, turning up the heat a little bit in the morning, it's like being next to a warm fire.
Speaker 2:So it warms my heart knowing that Luke, you know, is gonna be in the depths of the federal government, you know, bureaucracy. And, he's gonna be able to be cozy if he wants and, maybe even use it as sort of an alarm feature. It's like as you start sweating, it's time to hit time to hit, you know, hit the treasury.
Speaker 1:New CSV, pull out a new stack of PDFs, start organizing, start digging through the the the treasury docs. Let's see. We got we got some more massive breaking news. Cali means has posted about RFK. Let's be very clear.
Speaker 1:RFK is the most important cabinet converse, confirmation in American history. Bobby and president Trump have gone up against the largest and most powerful industries in the country and are winning. That'd be the food and drug, industries. The result is a chance for a healthier future for our kids. And, good friend with Cali, love Cali, and everything that he's done to, popularize health and wellness and, and and spread a lot of just very interesting and contrarian ideas.
Speaker 1:I'm sure you've met him. Can you give us some background on Cali and his, business partner, Justin?
Speaker 2:Well, John, Cali is an absolute dog, cofounder of TrueMed. Cofounder's with Justin Mares, former brother of the week. TrueMed makes it easy to use your HSA, FSA funds to buy products that you're already buying, which is super, super important because, HSA, FSA FSA benefits are are already cool, but it's not historically, it hasn't been easy to spend that money on consumer products. We got a chance to hang out with Callie and Justin at Hereticon a while back last year, and, Cali even then was spending hours every day working on the Maha movement, which is which is an interesting, make America healthy again is is is something that we should all be get behind. It clearly was politicized in many ways.
Speaker 1:Totally.
Speaker 2:But I'm I'm glad to see this get through, and and there's so much more to, you know, this is not a political move. This shouldn't be political at all. Right? We're trying to make the average, you know, American healthy. There's a lot of aspects of of our sort of way of life that that simply aren't.
Speaker 1:Yep.
Speaker 2:And, and, yeah, I mean, what they went up against here is insane. The, you know, the the pharmaceutical, the drug, you know, industry is spends billions of dollars on advertising, with legacy media. They spend, tons of money, you know, lobbying pretty much every single politician in in Washington, and at the state level. And so what they went up against to get this done, is is absolutely incredible. And and, you know, personally, you know, we don't talk about politics on this show, but I I firmly believe it's not a political issue at all.
Speaker 2:It's just this this will be good. You know, Americans will get more information, and and, hopefully, we can create some, guardrails to help, everybody be, healthier. So I think it's a huge win.
Speaker 1:For sure. For sure. Congratulations.
Speaker 2:One one one interesting note. I'm gonna potentially butcher the details here, but just, I didn't realize you you you remember seeing, like, we pretty much spend all of our time on x, but, if you've ever watched, you know, CNN, you'll get, like, three ads back to back for drugs. And and you're thinking to yourself, this doesn't seem like a very good ad. Right? Because it's, like, quick shot of a guy, like, driving his truck and then, like, waving to his wife, and then it says, this drug will kill you.
Speaker 2:This drug will put you through a long term coma. Like, this drug will do all this. And so so so I was always so confused. I was like, how is this actually good advertising? Because I come away from this being like, this could this could maim me for life.
Speaker 2:You know? Like, it doesn't seem like an ad. And, one of the one of the reasons that, the pharmaceutical industry has had such a choke hold on legacy media is because they're simply spending so many dollars. It would be, almost financial suicide for someone like a CNN to ever put out negative coverage of the pharmaceutical industry, and the pharmaceutical industry does many, many important innovations that that help us live longer, better lives. But, for a really long time, the legacy media just hasn't been able to talk about some issues with the pharmaceutical industry and some of the downsides.
Speaker 2:And so, the fact that they were able to get this through despite having, you know, the, you know, pharmaceutical industry having so much incentive to not have this happen, just shows, that that this the time to make America healthy again has really come around. So congratulations to, RFK and Cali and everybody involved in the movement.
Speaker 1:And, I mean, that that point, like, that you just made sounds very political, but, it's been that that exact point has been a major talking point of the left for generations. Like, Noam Chomsky has the concept of manufacturing consent, and it's exactly that. And so, like, you you you could be quoting RFK in the modern era where he's a Republican. You could be quoting RFK from, a few years ago when he was a Democrat. You could be quoting, you know, one of the biggest socialists, Noam Chomsky.
Speaker 1:Yeah. So this shouldn't be as much of a political football as it is. But Yeah.
Speaker 2:And so I hope I hope people withhold judgment and understand that there's a very positive intention with this movement around health. Totally. And let's see how things go. Right? And at the end of the day, every American should be able to make decisions for themselves around their health.
Speaker 2:It's, like, one of the greatest personal freedoms that we should, we should always have. So, I'm excited to see what comes of this.
Speaker 1:Yeah. It's it's it's undeniable that, lifespans have flatlined. America is getting unhealthier decade by decade. Everyone kinda agrees on that. Clearly, that's a reason to try something different.
Speaker 1:This is different, and hopefully, it's the right move. So Yep. I'm optimistic. Let's move on to Nico over at default. He had some press for his company written by Brandon Short, Brandon Short.
Speaker 1:And I love this because included in this is a fantastic quote. He says, Nico has moved to New York City and has an office with a bunch of cracked engineers, a hungry team of go to market folks who are at the bleeding edge. And to use Niko's words, enough Lucy and Celsius to topple a Sub Saharan warlord. The team is building their company in a way that I wouldn't wanna compete with. And so thank you, Niko, for the shout out.
Speaker 1:I love default. We we we we need to put it, to use on the show, get some, get some outbound going.
Speaker 2:Yeah. We need we need our own outbound, you know, guys just dialing, you
Speaker 1:know,
Speaker 2:on the phones all day long, call cold calling people, say, hey. Have you heard about the technology brothers?
Speaker 1:Exactly.
Speaker 2:We're asking about you. They want they want you to listen to the show. Yep. Give us, you know, just three hours of your day every single day. We don't ask for much.
Speaker 1:Just three
Speaker 2:or four hours a day. That's all.
Speaker 1:Yeah. Yeah.
Speaker 2:Exactly. Totally
Speaker 1:free. It's hand to hand combat. Every single listener matters. We need SDRs that are convincing people to
Speaker 2:Pounding and paying.
Speaker 1:The RSS feed. Hey. We'd love to upgrade you from just, listener to live stream watcher as well. Have you looked into this? Oh, have you left five stars yet?
Speaker 1:You know, really develop a relationship with them. It's a relationship business. This, podcasting is relationship business.
Speaker 2:Yep. And so Well said.
Speaker 1:It's fantastic. Let's move on to the timeline. We got a funny post to kick it off with. Apparently over the last decade, the purity of cocaine has increased significantly while the price of cocaine has remained the same. And, and the question is what other industries slash products has this happened in?
Speaker 1:And, Hunter says, it's worth noting that private equity has largely avoided the industry. And the interesting thing here is that, this this this has actually happened. This this trend has happened in a lot of industries, specifically tech industries. Google search has gotten better while remaining free. Like, YouTube has gotten more content without changing the price, and there's a lot
Speaker 2:of buzzers. TVs are basically free. But, I mean TVs. So this this reminds me. I I posted yesterday that Pablo Escobar might be the greatest CPG founder of all time.
Speaker 2:Mhmm. And I'll I'll just read out some of the stats. So Pablo, obviously, you know, contributed to this this trend, and and private equity was actually the counterparty to this trade that Pablo was making in many ways. He was, you know, dominating the market in the eighties. He had about 80% of the of the TAM at the time.
Speaker 2:So
Speaker 1:Wow.
Speaker 2:Just to just to get some idea, you know, ideas of the scale, Pablo bootstrapped to annualized revenue of 22,000,000,000. He didn't really have access to to the private markets the way certain entrepreneurs would. Global operations of sales and distribution hubs on nearly every continent, developed an Amazon style logistics division. He had his own trucks, boats, planes, fulfillment centers, ports, etcetera. He expanded margin and and improved deliverability and traceability, and, this is, you know, one of my favorite ones.
Speaker 2:He actually built a prison for himself so he could lock in and really sort of inspire himself to grind harder, and then he escaped from it just to just to prove that he could. Fantastic. And, he even had a run at politics too. He he became, elected to the house of representatives. So, so yeah.
Speaker 2:I'm sure that private equity is bummed that they couldn't get into that, market, but, but, yes, other people took advantage.
Speaker 1:And Escobar is the one that's chronicled in Narcos season one. Is that correct?
Speaker 2:Yeah. Yeah.
Speaker 1:Oh, yeah. Great show.
Speaker 2:The last the last show that, the last good show that that Netflix made.
Speaker 1:Oh, yeah. It's been rough couple years, but I remember watching that, but five, six years ago, it was great. Highly recommended. Yeah. Well, let's move on to Vittorio.
Speaker 1:He says, b Trump, four d chess grandmaster, slap 25% tariffs on Canada and Mexico, secure the border or else drama ensues. Canada and Mexico are losing their minds. Canada screeching about retaliation. Mexico sweating concedes first and agrees everything. Tariffs are paused.
Speaker 1:Twenty four hours later, Canada folds two. Total victory. Economy saved. Border secured. America First.
Speaker 1:How does he keep getting away with it? And it is it is funny. Like, Trump, the dealmaker, he knows how to come in and put the hurt on someone and and really expose the leverage.
Speaker 2:And it's interesting that he, you know, presumably chose to do it over the weekend when the markets weren't open. Yep. And so he he if if that was intentional to try to minimize some of the chaos
Speaker 1:Yep.
Speaker 2:You know, it it worked well. It was interesting to see how quickly everybody went from, you know, you you can't just stop the flow of fentanyl. It's it's it's impossible, all the stuff, to Trudeau saying, yeah. We're we're sending choppers and the military to the border, and and we're gonna we're gonna stop the flow. And so, anyways, hopefully, it has a positive impact.
Speaker 2:Yeah. Bentonol is is, you know, our our our version of the opium wars.
Speaker 1:Yeah.
Speaker 2:So, Very bad. So yeah. So let's get it out of the country.
Speaker 1:But, hopefully, you know, no market turmoil and less illegal drugs. Like, that's a win for everyone. I I I think everyone should be happy about that if that's the outcome, and that Yeah. Hopefully, it will be. Well, let's move on to Aaron Levy, founder and CEO of Box, cloud storage company.
Speaker 1:He says, can confirm OpenAI deep research is quite strong. In a few minutes, it did what used to take a dozen hours. The implications to knowledge work is going to be quite profound when you when you just ask an AI agent to perform full tasks for you, and it comes back with a finished result. I what what is your experience with, deep research been so far?
Speaker 2:So, we've used it for a couple projects this week that are relevant. So Yep. Yesterday, we we did a deep dive on Mary Meeker, absolute legend, icon of the bubble, and and, more recently, venture capitalist. I thought it was very competent at researching Mary Meeker. And the reason for that is that the project was basically collect information from the entire Internet, try to rank and get the highest quality sources, and then organize it in a sort of sort of linear storyline Yep.
Speaker 2:And help me understand her strengths, her vision, what was her impact, things like that. It did a really good job at that. Today, you tried to use it for for Luke Ferriter Yep. To try to get a better understanding of his background, and I think it was much weaker, the output. And that's obviously because there's just much less, information, about Luke online and and sort of super high quality, sources.
Speaker 2:So
Speaker 1:Yeah. I
Speaker 2:think think
Speaker 1:Yeah. My my thoughts on it are like, I can't tell if I'm I I'm probably some combination of bad at understanding the correct way to prompt deep research to get great results. I noticed I was dumping in whole, text exports of PDFs, and it was kind of just breaking and, like, bugging out. And so there's probably a better way to interact with it to prompt it, and I'm sure we'll learn these patterns. And I kind of need to unlearn some of the patterns that I learned when I was using o one pro or GPT four because for a lot of those with some of them, they have they have the ability to pull things from links.
Speaker 1:So I would dump a bunch of links. It would pull all those in. Other ones, PDF uploads. So I would upload a bunch of PDFs, and then it would have that as extra context. With the deep research Yeah.
Speaker 1:It does it does a lot of it by itself. So I think with just a simpler prompt, you can get a better result. But I think, like, doing too much hand holding might actually be a problem for it. And so there's still the question of how do I get it a source that it doesn't have access to that's maybe behind a paywall or or some arcane scroll that it doesn't know about, and I want it to be in the research report. And then also, there's just a question of, like, for a lot of these, for for for some of the really popular topics, like, there might already be a deep research style report out there just in the form of the Wikipedia page or in the form of some sort of podcast.
Speaker 2:Somebody somebody was posting that it's basically a new form of Wikipedia that you can sort of slightly customize and prompt. But, but, yeah, it's interesting that that, OpenAI made a huge effort to hype this launch. Right? Yep. They have a very good network of investors, team members, Sam, etcetera, that can that can create a lot of hype around a launch.
Speaker 2:And a a lot of people have been working on the same idea using LLMs at for research. Right? And so there was a bunch of different product layer companies doing doing this, previously, but just goes to show that OpenAI, I do think they're feeling the pressure around the model layer, commoditizing, and and potentially good models going open source. And so they're just needing to innovate more at the product level and say, hey. We're actually not just the model layer.
Speaker 2:We're we're we're operating at the app, the product layer as well.
Speaker 1:I mean, the the the easiest win, and I I don't know. Maybe I'm being playing, like, armchair product manager right now, but, the easiest win I could imagine would be just there's only a text box. And and when I prompt it, in my prompt, I say, I'd like you to deep research this, or I'd like you to go online, or I'd like you to use a PDF upload. And then it routes me to the correct model for that, and it intelligently knows, hey. This prompt is perfect for deep research.
Speaker 1:Let's go over here. O three high. O o three mini is actually best for this instead of putting that on me because, now now I wind up with I write the same query in five different tabs with all the Well,
Speaker 2:here's yeah. Here's here's how, here's how the workflow will actually work. Right? As you go to XAI Yeah. You say, hey.
Speaker 2:I wanna do this thing. How should I do it? And it says, well, I can route it here if you want and then bring it back and
Speaker 1:then Yeah.
Speaker 2:Or I'll try this, and I'll I'll try try it in a couple different places. And so, it's interesting to think about how, how you might use a model to help you better understand how to use other models We have 100%. Output.
Speaker 1:100%. Yeah. There's already a version of this happening with, like, the open router system, where a lot of the programmers who wanna use an open source model will they they they instead of just saying, like, I want to use, DeepSeek v three hosted by DeepSeek, they will say, I just wanna use this model at the lowest possible cost, and all of the different servers and and and and companies that serve these models are out there competing on price. And whatever load balancing is going on, whoever has the lowest cost of energy or or c GPUs that day low demand will price their model dynamically and route you to that. We just need kind of like a new layer, a new abstraction layer maybe because, I mean, it'd be very cool to have, like, you know, there's one place where I go to prompt.
Speaker 1:Oh, looks like you want to upload a full book, a million a million token context, Gemini for that. Oh, looks like you want to do some deep research. Chat GPT deep research for that. Go here. Do this, and just kind of route that intentionally.
Speaker 1:But I I do think all of this will be solved very quickly. I I I it seems it seems too obvious to to not be already in the works, and this is one of those things where we're talking about it now. They're probably putting the polishing touches on it right now. It'll go out. Like, once it's a meme, the company knows, especially if it's, like, you know, a fast moving startup with a founder mode CEO and all this other stuff.
Speaker 1:Like, it's not it it's not like, you know, talking about Google where people will say for years or Apple. People were beating the drum of, like, Siri doesn't work for years, and it took them so long. OpenAI, like, they're they're moving fast. They got they got
Speaker 2:Oh, yeah. Okay. Look at Apple today. Everybody's saying your your photo app is the worst app that I've used in in forever, and they're like, okay. We heard you loud and clear.
Speaker 2:We're gonna launch a part of full, competitor now. It's just like, please just just fix the, the photo app. Yeah. Yeah. Anyways.
Speaker 1:Anyways, let's move on to, Nikhil, Krishnan. He says, if there's a market map, you're too late. Do you get this reference? Is this is this a Kanye? Oh, it's Drake.
Speaker 1:It's Drake. Okay. It's a it's a cover art. Okay. Yeah.
Speaker 1:I don't know. I'm out of touch.
Speaker 2:I guess. You just you just, outed yourself as not being a Drake fan, which is not the worst thing to be out.
Speaker 1:Kendrick all the way, baby. Kendrick all the
Speaker 2:way. Anyways, great, great graphic. I mean, this this is, I mean, the the original album if for those, that aren't Drake enthusiasts or didn't pay attention to pop culture, like, ten years ago at this point, is if you're reading this, it's too late implying. I I I'm sure he had had some sort of beef with somebody, and he was dropping the album and, you know, you know, was saying, if you're reading this, you know, I already dissed you or something like that. In this case, I do think it's true.
Speaker 2:A lot of the best companies get started before there's a market map. You look at Anduril and Palantir, you know, these these, yeah, maybe you could go back and look around when they were incorporated and make a market map, but it's really more like by the time the market maps are being shared publicly on x, you're you know, that is not the right point to try to start the company. Right? Yep. And it's not to discourage entrepreneurship or or getting excited about a category and making a bet there, but, usually, by the time the market's mapped, there's a bunch of super, super talented people, that are already tackling different areas of it and and maybe have a two, three, four, five year head start.
Speaker 2:Right? Sometimes even more than that.
Speaker 1:There are two notable exceptions I can think of. First would be Google because there were a lot of search engines, and they were definitely mapped in Mary Meeker's report. ExCyte, Lycos, Yahoo. It was very clear that there was a a a defined market, and it maybe wasn't a market map on Twitter because Twitter didn't exist at the time, but, it was clearly understood. And then the other one would be Facebook, actually, because, LinkedIn had already started and there, I believe, one of the early investors, maybe it was Reid Hoffman or somebody in Peter Thiel's network, had actually started a company called, like socialnetworking.com or something like that.
Speaker 1:And and a lot of people were circling, and Peter has said that, like, he knew that there was gonna be someone that cracked the code. And so he went when when he met Mark Zuckerberg, he was like, I'm in. And so there there there are some exceptions, but, but yeah. I mean, once it's a full market map and there's, like, hundreds of companies, it's a little bit rougher. It's more it's more just like, okay.
Speaker 1:If there's a few competitors and they're doing something really fundamentally wrong, there's probably still innovation opportunity. But if you're just, like, looking into market map, it's gonna be a rough go. Anyway, let's move let let's stay with Meta actually and move into, a a news article from the Wall Street Journal. Meta in talks to reincorporate in Texas or another state, Exit Delaware. Potential step by social media giant follows similar move by Elon Musk who moved to reincorporate his companies in Texas and Nevada.
Speaker 1:And so she'll Monot says Delaware probably lost its status as a place where most companies choose to incorporate. Huge hit to the state budget. 40% of general fund comes from franchise taxes and corporation fees from companies who choose to incorporate there due to the business friendly approach. And so, yeah, it'll be interesting to see, like Yeah. You know, YC and Stripe Atlas, they still kinda recommend Delaware.
Speaker 1:It's like the standard thing, but these things change over time.
Speaker 2:Yeah. How hopefully, I'm not lagging too much. It seems like my connection's dropping a little bit. But, but yeah. So so give some people some backstory here.
Speaker 2:So so, obviously, every venture backed startup has been incorporating in Delaware. I've invested in over 50 companies. I don't think I've invested in a single, company that wasn't incorporated in Delaware originally. And, yeah, you can be register in other states where you kind of operate, but the actual incorporation happens in Delaware because there's so much case law there. It just it just makes sense to do it.
Speaker 2:Sort of the been the default, and and Delaware has really benefited from that. Now what happened and why Meta is making this move is that, there was a very high profile lawsuit. I think we covered it at different points where there was a Tesla shareholder who had something like seven shares or something like that, or or maybe it was even it was, like, very, small number of Tesla shares, and and he basically partnered with a law firm or a group of law firms to bring a very aggressive case against Elon's, pay package saying that it wasn't in the best interest of the company and ended up being, I don't know where it's shaken out today. I think it was, the the judge, like, ruled in favor of the shareholders and said, no. This is not right even though it had been approved, you know, back in the past.
Speaker 2:And then, they they did a vote to overturn it, and Elon was sort of rallying the troops and saying, like, hey. I'd, and, originally, the pay package was set up in a way where Elon had to hit the world's most aggressive, you know, sales and growth targets to achieve the pay package. And he basically did the impossible to do that, and then you had this hyper sort of political judge in Delaware who struck it down. And, what that means is every CEO now is saying, look, we I don't feel comfortable operating out of Delaware if, judges there are going to get involved in basically the internal decision making at the company. Right?
Speaker 2:It just doesn't it really doesn't make sense. And so now you have people moving to Nevada, some people moving to Texas, and, we'll see what shakes out, but huge cell phone from from Delaware.
Speaker 1:Yeah. And so, I just looked it up. The story was, Elon calls his shot and says, I want more equity in Tesla, and you will benchmark you will benchmark my performance to the stock price, which is the purest essence of shareholder value creation for a CEO. It's perfectly aligned. He's not talking about revenue or deliveries.
Speaker 1:He's just talking about if the value of the company goes up, this will be accretive for everyone. You will you will have you'll you'll dilute yourself because you're giving me more shares, but your shares will be worth so much more. And so during that time, he, like, 10 x or hundred x the stock. It went way up generational run, and so he hit all of his targets. He was ready to get that package.
Speaker 1:The Delaware court struck it down, and then Elon did a shareholder vote. All the shareholders were like, yeah. This is great. Like, this guy is putting up insane numbers. Let's give it to him again.
Speaker 1:And then, a judge struck that down again. So as of December 2024, the pay package has not been approved. But if they reincorporate in Texas, they can try and go approve it again, and then the Delaware judge would not have the authority to block it. And so
Speaker 2:Yeah. And and to be clear, the the the the real devil in all of this is a law firm that that I believe made hundreds of millions or billions of dollars in fees, as part of this lawsuit even though the original, plaintiff in the case, the shareholder who brought the case, had had something like seven shares or something like that total that money actually in terms of the person who
Speaker 1:Yeah. I need to dig into more of, like, where that where that, where that money for that law firm came from because, you know, the money had to come from somewhere. It clearly couldn't come from the plaintiff, if they just own seven shares or something like that. So maybe the the Delaware court awarded it. I wonder if that's on hold as Elon's fighting back.
Speaker 1:It's all very unclear, but, certainly worth a deep dive and certainly reshaping how large tech companies think about where they're incorporating. Because, I don't know if Zuck wants to do some sort of similar pay package. He already owns so much of Meta. I don't think it's that big of an issue, but, it's certainly scary thinking that the shareholders collectively could wanna do one thing, and then a judge could say, hey. Actually, we we we we we don't want you to do that even though it's it's massively popular amongst the shareholders broadly.
Speaker 1:Anyway, let's move on to Gary Tan GTs on the timeline again with a low tam banger that I thought we should highlight here because we love cars. He says, if you like cars, watch this space, and he's quote tweeting Bubs, who says the car community for the car community, it's gonna be fire. And he posts a logo for something called rides. I couldn't find any more information on this, but I wanted to track it because it seems like maybe it's a y c company. Maybe it's some sort of, ride sharing or or or car community.
Speaker 1:Maybe there'll be the ability to buy and sell cars on there.
Speaker 2:Also, it's
Speaker 1:very interesting.
Speaker 2:I've always thought there was an opportunity to build, like, a Strava like app for, car enthusiasts because people are constantly doing you know, I'll meet up with friends to go for a drive. I'll share that drive with other people. Oh, there's there's little rallies that happen. There's car meets. There's things like that.
Speaker 2:And then, so I'm just totally, sort of extrapolating what something like this could be, but I do think that you could use a social network to bootstrap a, actual, like, mark you know, secondary marketplace for cars, and some of these car marketplaces can be extremely lucrative. And so, anyways, cool opportunity there. We'll have to Gary, send us some more information, and we will, we'll use the app to talk about it on, an upcoming show.
Speaker 1:Let's move on to Ryan Peterson. Can't believe this app is only $8. Absolute banger. 40 k likes. He says, dear Doge, please look into the US Mint in San Francisco.
Speaker 1:It occupies an enormous block of prime commercial real estate, and all it does is produce special commemorative coins for collectors. The coins aren't even cool. And Elon says noted.
Speaker 2:Noted. And bad bad day to be a commemorative coin. I gotta say, if you're seeing that post get forty forty chance
Speaker 1:the other side of this. I I'm very pro pro physical commemorative coins, generally anti the meme coins. I I I I I think these are the the the commemorative coins are Lindy. Maybe the designs aren't cool. That's an easy fix.
Speaker 1:Let's get a flex port coin. Let's get a SpaceX coin made from the men.
Speaker 2:Well, yeah. I was I was pro crypto until I bought, the client at the official Kleiner Perkins
Speaker 1:Oh, you lost it all.
Speaker 2:Yesterday. I think I lost it all. The market cap last time I checked is went from $10 to something like 0. And so I'm gonna have to talk with Everett about this and see, you know
Speaker 1:You should send him your tokens.
Speaker 2:Yeah. Yeah. Yeah. No. No.
Speaker 2:Honestly, there there's, like, you know, commemorative, token for me.
Speaker 1:Leave it in the leave it in
Speaker 2:the wallet.
Speaker 1:Everyone will know. You you bought Kleiner.
Speaker 2:I bought her. I was early. But, the
Speaker 1:idea Kleiner. It was a hacked project, by the way. In case you're just tuning in for the first time, this was a hacked meme token on pumped out fun. We do not support this. It's not financial advice.
Speaker 2:That is correct.
Speaker 1:Anyway, let's move on.
Speaker 2:And and it's worth noting that that the app, would cost negative $8, you know, negative like like, Ryan Peterson is actually printing money. If you're getting 40 k likes on a post, you're definitely making your $8 back by by being a premium subscriber. So shout out to Jacoby and Tyler and all of our friends at x for making x usage profitable for posters.
Speaker 1:Yeah. For posters. Let's go to Willem. He says, our children will romanticize the last era of pure human creation in ways we can't imagine. And he posts a screenshot, that says, cultural memory has a certain rhythm.
Speaker 1:Every generation romanticizes the era roughly thirty years before its own. Gen z clings to the pixelated naivete of the 20, of the two thousands. Millennials buff the nineteen eighties and nineties into a yuppie golden age. Gen x yearned for nineteen sixties idealism, but the twenty twenties will mark a rupture in this continuum when AI generated when an AI generated song hit the billboard charts in 2023, the prior century collapsed into legend. The last time creativity wasn't a dialogue with silicon.
Speaker 1:I think that's very well written. Very interesting. Well, lock in brothers because this show is not a dialogue with Silicon in any Yeah.
Speaker 2:It's it's it's cool because even so so Willem is an investor in a company called Visual Electric that makes the it so far to me is is it's it's an amazing alternative to stock photos because you can just go in there, and it's similar to MidJourney, but it's more oriented around designer use cases. So I've used it to create a bunch of assets. I used it to create an asset for PMF or Die. Super powerful. But, ultimately, I don't I think it's still, like, the idea that, we've been romanticizing every art form forever.
Speaker 2:We romanticized, you know, hitting hitting a stick at the right tempo against another stick. Right? And we moved sort of up the chart. And, ultimately, the the the power of combining the human mind with, you know, new tools creates beautiful things. So, it reminds me of that.
Speaker 2:I think it was was it Grimes that was just absolutely dunking on the guy who was doing the AI song generation tool who said, oh, it sucks to learn music. You know, why even learn, when you could just generate songs with AI? But, ultimately, I think these new tools are just gonna introduce more people to the process of creativity. And then as you get as you fall in love with the pure process of creation, you realize that, you realize that, that that the pure act of creation is so enjoyable
Speaker 1:Totally.
Speaker 2:And so stimulating that that you you'll use the tools and then you'll take them to new places that they haven't been, then you'll combine them with your own genius and and both things happen.
Speaker 1:Yeah. Study chess. Chess has been solved by computers for decades. It's more popular than ever. People like watching people do things, and this is not going away even as the computers defeat humans in all of the evals.
Speaker 1:The entertainment will continue on. Let's move on to David over Ulevich over at a 16 z. He says, for the twelve thousand and five hundred and eighty ninth time, Revesting is actually is usually the founder CEO's friend. The email below from counsel explaining to CEO why the departing cofounder is basically fully vested. I explained this all to no avail in the series b.
Speaker 1:And the email says closing the loop on this for the rest of the thread, the reinvesting concept was proposed early on in the series b negotiations, but dropped in the final term sheet. So it was not included in the series b docs. Best. Rough.
Speaker 2:Best. Brutal.
Speaker 1:Clearly, there's some sort of cofounder dispute, somebody leaving, and the vesting, they they did not reinvest. And so, they're looking to negotiate.
Speaker 2:Yeah. Just just for for some context, if you go on Stripe Atlas today or you do a standard incorporation with a Goodwin or a Cooley or or someone like that, they're gonna set the founders up on a four year vest. Yep. That's four years is a long time, but oftentimes, it takes many, many, many, many years to build a company far beyond four years. And so Really.
Speaker 2:Especially now when a company can go from zero to a series b or even further in a in a few years, you end up in these situations like David is highlighting where, a founder's able to leave after three years, and they've they've fully, you know, almost fully vested their shares, yet there's so much more work to do. And and in that situation, they could have the same amount of equity or close to the same amount of equity as the the CEO and the team that's gonna continue to work, work on the business. And so, so, yeah, I think, it's always an opportunity to to extend, extend out the vesting period, and and it's usually in the benefit of the person who's, you know, gonna continue working on that business day to day in infinitely.
Speaker 1:Yeah. Yeah. And, I mean, that's what the negotiation during series b was clearly framed around was, hey. Look. We're gonna go bigger.
Speaker 1:We're raising money. We are gonna be in this for another four years, another eight years, decade. So let's revest to make sure this is the team that's, like, standing on board. And because, like, refresh grants just aren't gonna be anywhere near what the initial founding grant is. And so, but it can often be seen as a, very adversarial between the cofounding team and the investors.
Speaker 1:And so the cofounding teams is like, we we don't wanna invest. Like, what if you fire us all? Or what if we leave? Like, then we won't have our equity. We started this company, and it becomes this big debate.
Speaker 1:But, even I I think the happy medium here can be, just extending the unvested portion at the series b. And so maybe you're halfway through a four year vest. You take the second half that has invested, and you extend that to a new four year vest. So you're not actually losing the shares that you vested on the original schedule. You're just extending the unvested shares, and that's kind of a happy medium that can work out sometimes.
Speaker 1:But, it's always tricky because, yeah, I mean, you could, you could not be doing your job, get fired, and you're like, I didn't get I didn't get my full stake, which I wanted, and that would have been awesome. But, then, you know, like, what's fair to the team? What's fair to the people that are gonna go build this company for the next decade? You know? You gotta have equity for those folks.
Speaker 1:You gotta have them aligned. Anyway, we will end it there. Thanks for tuning in. Thanks for dealing with all the technical difficulties. We are still ironing things out, but, that's what comes with being the number one live show in tech.
Speaker 1:You know? You just gotta figure things out sometimes.
Speaker 2:So wrestle with you gotta wrestle with tech.
Speaker 1:Yeah. You gotta It's not
Speaker 2:always autonomous. Sometimes it acts up, and you gotta you gotta just figure it out. So thanks for bearing with us. We're trying to get, we're trying to get a % every better every day. You know, a lot of people say, I wanna be 1% better every day.
Speaker 2:It's not enough for us. Doing our best to hit a hundred every single day. And, soon we'll be, at the top of the charts.
Speaker 1:I love it. Leave us five star review. Apple Podcasts and Spotify, leave an ad in your review, and we'll read it on the show. Thanks so much for tuning in, and we'll see you tomorrow.
Speaker 2:Have a good day everyone. See you tomorrow. Thank you.
Speaker 1:Bye.