0:00
All right, today is everybody's favorite episode.
Search this video
0:02
It is the Sarah's list episode.
0:04
So, we're talking about 10 companies that you can become wealthy with without having started it or invested in it or joined early.
0:19
It's called Sarah's list and I got a little presentation for you.
0:21
If you're on audio, get over to YouTube right now cuz I have slides that are going to be fun.
0:27
So, uh it's called Sarah's list.
0:28
This is Sam's wife, Sarah. Oh, that's hilarious.
0:33
She is on the cover of My First Million.
0:35
And the reason why is because she has an unlikely story.
0:38
A story that I hadn't really heard and when I heard it for the first time, it kind of shocked me, which is I think when I heard this, she was about 30 years old at the time.
0:44
She was a self-made millionaire.
0:46
Uh but she didn't start a company.
0:48
She wasn't, you know, killing herself working 100 hours a week like we were.
0:52
She wasn't paying herself scraps.
0:53
She was getting paid a nice salary with nice benefits.
0:55
She worked at a great company that had good culture.
1:00
She didn't have to make risky angel investments and get lucky.
1:02
She was not a high-profile exact that just got, you know, some huge pay package.
1:06
And she wasn't lucky like the Facebook graffiti guy that just got a bunch of stock from from Facebook and, you know, made $70 million.
1:13
And so, her story was almost incredibly boring.
1:16
It was incredibly simple and I just couldn't believe it.
1:18
I was like, "I'm trying so hard to make make a million bucks here."
1:23
That was such a better path.
1:23
And so, just to recap, she, you know, self-made millionaire, didn't start didn't have to start the business, didn't have to do risky angel investing, didn't wasn't a high-profile exact, wasn't the graffiti guy.
1:32
Uh what she did was she joined Airbnb.
1:34
And so, if you look at this chart, this is Airbnb's valuation over time.
1:38
And there was a period when Airbnb started, that was the high-risk period.
1:42
That's the flat part of this curve.
1:42
And to join Airbnb then, you would have to see something that was not obvious.
1:46
You had to believe something that would that took a huge leap of faith.
1:49
You had to work like crazy in a tiny apartment.
1:53
There's a fun video, by the way, of them taking like midday dance breaks where they just played a bunch of Everyone stands up for the desk, they're just dancing.
1:59
You had to do weird startup stuff.
2:01
There's a guy with stinky feet, probably.
2:02
That's not even what we're talking about, right?
2:04
She joined after it had crossed, you know, a 10 even Right, Sam? $20 billion valuation.
2:09
Yeah, and if I remember like they already had that huge office.
2:13
Do you remember that huge office at 88 Brannan?
2:15
And I imagine there was like a thousand people plus working there. Like it wasn't small.
2:20
And you and I were living in San Francisco at the time and it was stupidly obvious.
2:26
Like you could have slapped me in the face and they said, "What's a company that's a winner?"
2:29
and I would have been like, "Uh Airbnb's a company that's a winner."
2:31
It was like obvious at the time.
2:32
I had friends at Uber, same thing.
2:34
Uh Uber was obviously a winner at the time where they were already multi-billion dollar companies, but because of the space that they were in and how dominant they were, it was clear that they still had room to run.
2:43
And what we call Sarah's list is basically a a function of using your time as your investment.
2:50
Most people don't think of their job as an investment decision, but your time, your talent, where you're going to spend four years working is an investment decision.
2:59
You should be thinking about it like a venture capitalist and especially if you're working in the tech scene.
3:03
And so, these are all venture, you know, venture-backed tech companies that we're talking about.
3:07
So, the criteria for Sarah's list, uh it's a company that has product market fit.
3:12
It's just a clear, obvious, successful company.
3:13
Uh doesn't mean it can't fail, but it just means it has product market fit.
3:17
It's not in the scrappy, figure-it-out phase and and and, you know, wandering phase of startups.
3:24
It's funded, it's growing, and you get a nice salary and benefits.
3:25
They got oat milk in the fridge.
3:27
Um and that if you joined and you got a $200,000 stock package.
3:32
So, that's like, you know, getting 50 grand a year of stock.
3:33
So, maybe you maybe you got a 150,000 salary and 50,000 of stock.
3:38
That could become worth a million plus in the in five years.
3:40
So, can it 5x in five years?
3:42
We're not looking for max upside, we're looking for lowest downside and enough upside where you can turn, you know, a $200,000 stock package into, you know, one, two, three million dollars would be the would be the outcomes that we're looking for.
3:54
So, we did this once in 2021, three years ago.
3:59
And before we tell you what we picked and how we did, we got to time travel back real quick. So, let's do this fast.
4:04
So, back in 2021, this NFT sold for $69 million.
4:07
Those were the good old days.
4:09
Tom Brady was a football player. SBF was a hero.
4:11
People cared about whoever these people are.
4:13
It was a simpler time and the stock market was running up.
4:18
It was on a 10-plus year bull run.
4:19
It had its peak uh in 2021.
4:23
For the listener, people cared about quote these people, these people was Prince Harry and his wife. Who? Yeah, see? even know who it is. Point point proven. Thank you. I rest my case.
4:35
By the way, did you know this?
4:35
Sesame Street and 7-Eleven launched VC funds during this time and so, they had their own venture funds.
4:40
Everybody was getting in on the game.
4:42
But nothing lasts forever.
4:44
And so, since then, just to give you some data here.
4:45
So, since then, about 36% of startups who have raised money since then have raised at a lower valuation.
4:52
That's not to count the companies that died or the companies that are avoiding raising cuz they don't want to raise down rounds.
4:59
This is like transactions that cleared, one-third of them are clearing at a lower price of all startups.
5:02
It's even worse if you look at late-stage startups.
5:06
So, later stage startups, which are the ones we're talking about, Series C, Series D, they're down between 30 and 60% on average.
5:10
That's the that's the that's what you're seeing across the board.
5:17
Um Sad news, two-thirds of employees right now that are working at these companies are working for options that are actually worth zero.
5:24
And they probably don't even realize it yet.
5:25
Meaning, they got a pay package of stock options at a $24 strike price, that stock is currently trading in secondary for $8.
5:34
So, all of their shares are underwater.
5:36
We're currently only 33% of the shares are in the money, as they say.
5:40
All right, so what did we pick?
5:40
We picked about 11 companies.
5:42
I think we shared one um company, but we had each picked uh around here. Here's how we did. So, it's not great.
5:49
All the stuff I just told you is basically our big fat excuses as to why it wasn't great.
5:53
We both had two hits, so two things that did that did go up in a sort of step change way, you know, sort of a three, four x so far in the three years.
6:01
Uh I had two that were down, like valuation lower than it was previously.
6:05
You had three that were down.
6:06
And then there were some pushes.
6:08
And a push basically is like has the same valuation as it had before, but that's actually sort of a win cuz you beat the market.
6:14
So, you didn't achieve the Sarah's list dream, but you didn't take the huge write-down that a bunch of You're wrong about Next Health. Next Health is wrong. Next Health is wrong. Is is wrong on here?
6:23
Oh, what is it Is it actually up?
6:25
Well, the word Next There's two companies. One is Next, one is Nex.
6:27
So, I think you you There was a little confusing.
6:32
Uh but that's Someone in the research department's getting fired here.
6:34
No, they're just They're just missing a T.
6:36
Uh OpenStore and uh Well, so OpenStore is down.
6:42
It's un- It's unclear, but I mark it as down.
6:43
And it's a little intellectual honesty.
6:45
I don't think I don't believe that it is uh achieved its its its uh its status to be called up. I We have it as a TBD.
6:50
I gave it a a a less generous interpretation of down just to make my own grading harsher.
6:56
This is not about them, it's about me grading my own picks more more so.
7:00
And you think Figma's down, too?
7:02
Well, Figma tried to It's not a down, it's a push here.
7:04
It tried to sell for 20 billion, didn't clear.
7:06
That the transaction didn't go through.
7:09
So, that would have been a you know, a 2x.
7:10
But then, the last, I believe, round of funding and this, by the way, this is not all very obvious.
7:15
So, companies don't always announce their valuations.
7:19
There's leaked valuations to the media, which are not always true.
7:21
There's valuations that come with a bunch of strings attached.
7:24
So, you maybe you got a a good number, but there's all these caveats and liquidation preferences.
7:27
And a lot of this was we asked people who own secondary stock marketplaces.
7:32
We said, "Hey, what is this company trading at right now?"
7:35
And so, it's incomplete information, right?
7:37
We're doing the best we can here with private stock information that you don't you don't always have.
7:40
By the way, Sarah, my wife, who this is about, had a job offer at Figma like three months before their acquisition offer.
7:48
Which like if had that gone through, I it I believe it would have been a 2x return based off the valuation.
7:54
So, we almost we almost had a mini hit again, but not quite. Yes, exactly.
7:58
All right, let's get to the 2024 picks.
8:00
Uh we're going to try to do better now.
8:02
The good news is that the pick any picks you made, anything in the vintage of 2021, like I said earlier, the the all the companies basically got shellacked.
8:12
Everything got re-underwritten.
8:13
Everything got got corrected.
8:15
But now where we're at, I think we are at a a less hypey period of time.
8:20
And so, this cohort of picks, I think should be better.
8:22
But again, not financial advice.
8:24
Really, me neither me nor Sam actually uh are trying to go get jobs.
8:28
This is kind of like what we would do if we were going to get a job.
8:30
Sam did this with Sarah when she was looking for jobs. So, this is for fun.
8:33
Uh let's put that out there.
8:36
We're not giving financial advice here.
8:37
So, I have like five or six, but then I got a bunch of other ones that were like it's like scrap like I didn't quite get to.
8:41
What do you think is the Let's say we each bring five to the table.
8:45
I bet you there's going to be at least three that we are overlapping on. What do you think?
8:51
Yeah, two I'm guessing two overlaps.
8:51
And by the way, I'll say I think a good hit rate on this good hit rate would be six out of 10.
8:57
Six out of 10 have a a step up where five years later, we're not even five years after the the 2021 ones yet.
9:04
We're only three years in, but five years later that they're sort of like a four or five x in valuation.
9:08
If six out of 10 did that, I think that would be a a great thing.
9:12
I think three out of 10 would be sort of the lowest bar that I would accept.
9:17
Hey, real quick, I want to talk to you guys.
9:18
If you are new to this podcast, if you're new to business, I have a cool resource for you.
9:23
So, the folks at HubSpot, who sponsor this podcast, have put together a kit, a guide for people who are getting started on their entrepreneurship journey.
9:29
And it has a couple of cool tools I want to call out.
9:32
It's a free tool, by the way, this whole thing is free.
9:33
Um you can just go download it.
9:35
It is a solopreneurship guide.
9:37
So, for people who are going to be, you know, an army of one, how do you get started?
9:40
What's the mindset you need?
9:41
What are some tools that you need?
9:43
What are some communities you could join?
9:44
They have some cool resources there.
9:45
So, if you're just getting started and you're a beginner in this journey of entrepreneurship, check out this kit.
9:49
It The link is in the description below.
9:50
And thanks again to HubSpot for making this podcast possible.
9:53
All right, I'm going to go first.
9:55
I'll start with an obvious one.
9:57
It's probably one that you have, too. OpenAI.
9:59
And by the way, there are no bonus points for difficulty in business.
10:04
The fact that everybody knows OpenAI, I'm not trying to give you a secret company, a secret stock tip you've never heard of.
10:08
The point of this often is that the companies that are going to be big juggernauts are hidden in plain sight.
10:15
So, OpenAI, currently valued at 103 billion, it's doing about 3 and 1/2 billion a year in revenue already.
10:19
The bull case, so what do you need to believe if you're going to join this company that you did you think it's a serious contender?
10:25
It's the first credible Google competitor in about 20 years.
10:29
It is something that actually could displace, replace search, which is like, you know, when people need an answer to something or they need help with something, where do they go?
10:36
It's the fastest-growing company ever. That's nice.
10:41
So, it took them, you know, two or three months to reach 100 million users.
10:45
Uh it's five times faster growing than the next fastest product ever.
10:47
It reached 3 billion in revenue in the last, you know, it's in like three years, which is pretty crazy.
10:53
And it's unique cuz it's an enterprise company, it's a consumer company, and it's a dev tools company at the same time.
10:58
I think that's pretty pretty unique and gives it a lot of upside.
11:04
What you would be worried about if you were looking at OpenAI is it's probably the most competitive market on Earth right now.
11:08
You are getting compet- competition from every the the most well-funded startups with the most brilliant people as well as the biggest tech companies in the world, Facebook, Google, Amazon.
11:16
Everybody is coming after this market.
11:18
So, that's the downside is will OpenAI retain their lead or not. Yeah.
11:22
Yeah, the the problem with OpenAI, can you get a job at OpenAI?
11:26
Not only is it the most competitive like not only is it the most like competitive space.
11:30
Like I imagine they have to have one of the more competitive uh like job applicant pools.
11:35
Dude, I read some crazy stat that Tesla has something like 50,000 people a day applying to work there.
11:40
And I have to imagine that OpenAI uh it's somewhat similar where they are just like inundated with applications.
11:47
Well, yeah, I mean, but we're talking our listeners, the cream of the the cream of the crop here.
11:53
This is the crème de la crème.
11:53
So, yeah, of course they can get a job wherever they want.
11:55
So, would will OpenAI 5x the current valuation? Yeah, I mean, yeah. Yeah.
12:00
That that yep, I agree with you.
12:04
Um all right, you want me to do one? Mhm.
12:07
All right, I've got one called Retool.
12:09
Do you know what Retool is?
12:11
I know Retool, I use Retool, and I wish that I invested in Retool.
12:14
I tried to invest in Retool early on, and I missed it.
12:17
I'm not a user of it, so it actually would be best as a user uh explain what it is.
12:22
So, every technology company has the same situation that they would all homebrew a solution for.
12:28
And the situation is you need a back-end admin panel.
12:31
So, you have this, I'm sure, with Hampton, where uh oh, we need to add or remove a member, or hey, this person changed companies, they're asking if we can update their their thing, or hey, can we change their membership status from active to suspended or whatever whatever some admin function that you need to do.
12:50
And it doesn't come out of the box with whatever, you know, you're using 10 tools to run your business, but like this is the what's the tool for your business?
12:57
It's a Retool is a simple way to make the admin, you know, uh panel for admin system for your for your company, where anybody in the company who's not a developer can actually go in and, you know, add, remove, you know, make changes to essentially the database.
13:11
That's like the simplest way of saying it.
13:13
It's basically a back-end tool for any business that you can customize, and your developers can build once so that anybody in the the team can use.
13:21
So, it's a internal tool.
13:21
And here's this crazy stat.
13:23
So, the founder, his name's David.
13:25
David uh David David's a baby genius.
13:27
So, David David started this when he was like at the University of Cambridge when he was like 21 years old.
13:33
And he's like he's got one of these like stories where he basically before this business he had a a payments app that I think did okay, but whatever, he quit working on it.
13:40
But like when you see like a 19-year-old kid do that, you're like, okay, you this and If you have a payments app at 19, you already won.
13:47
Yeah, and you're going to one of the best universities on Earth.
13:50
Like, all right, something is interesting here.
13:51
He gets into YC, comes up with this idea, and here's this crazy stat.
13:55
50 or 60% like 50 between 50 and 60% of all software in the world is internal-facing tools, meaning employees who use uh internal-facing tools.
14:06
That's a one-chart business right there. one-chart business.
14:08
And not a lot of people focus on that because you kind of focus on things that you see and use versus things on the back end that you maybe you kind of get you don't really touch that often.
14:16
But the business has crushed it.
14:18
And so, they launched in 2017, their latest valuation is 3.
14:20
7, they've raised $150 million from Sequoia and a bunch of other great companies. Listen to this growth.
14:27
First 9 months, $500,000 in revenue.
14:28
In 2018, they hit 2 million in ARR.
14:31
In 2024, they hit around 100 million in recurring revenue.
14:34
So, it's got to be one of the faster-growing businesses out there.
14:38
And I've been watching interviews with this guy David, the founder. Dude, he's amazing.
14:42
Uh he's a he's an amazing company. So, at a valuation of 3.
14:47
7, uh I think there's room to run.
14:48
I think there's a five or 10x potential here.
14:49
I mean, that's got to be a they've got to be a be a huge business, but the market is just massive, and I like the guy.
14:54
I think that's something we're going to see in a bunch of these, which is that the CEOs seem to be remarkable in all these businesses, and that's just if you're going to make a bet on a private company, you want to be at one with like one of these all-star CEOs.
15:11
My Retool story, I two two lessons learned here. One, invest in your P&L.
15:15
So, I had this problem, we had we were always trying to build these things internally.
15:18
The devs never wanted to work on it enough because it's an internal tool, so who cares?
15:24
And when we got Retool, it's like, oh, this is great, this is a no-brainer.
15:28
And so, I the first lesson I always I I always remind myself is the best place to invest is in your P&L, meaning look at your expenses and go figure out which of those companies you think other people you wouldn't want to cancel and other people are going to have as their expense, too.
15:41
Go invest in that company. Retool was one of those.
15:44
And then second thing was I once we got acquired by Twitch years later.
15:47
So, the first one was probably 2017, 2018.
15:48
The second one was uh 2020 or 2019.
15:52
I'm at Twitch, and Emmett, who was a YC partner, was like I was at a meeting or he was coming to a meeting with me, and he was running a little late, and he's like, oh, yeah, sorry, I was doing office hours with this YC company that just had they just hit this point.
16:08
He's like, there's this thing that happens where you go through YC, it's all good, then you have after YC, where, you know, you're just like you're back to being like a normal struggling company.
16:16
He's like, and then sometimes you hit this inflection point, and just really starts to work.
16:19
He goes, yeah, this company Retool, this really starting to work.
16:25
S- when you're you know, when a really smart friend tells you that something is hitting an inflection point, like drop everything and go go go hunt that down.
16:33
I remember the time thinking, I should invest in this.
16:34
I saw the guy David in the cafeteria cuz he had just met with Emmett and wearing his Retool shirt.
16:37
And I went up to him, and I was like, nice shirt, love Retool. And then that was it.
16:42
That was my all I needed was that third second to say, guy? Like he's He's young.
16:45
I think he I think he was like a college kid almost.
16:47
Yeah, he looked like he just could have been any employee at the at the company, just he was wearing his own shirt.
16:51
Anyway, so, Retool, I I like the pick.
16:53
Valuation is high, so I think 4 5x is tough from there, right?
16:56
To become a $15 billion company is tough, but I think it's a good really good company.
16:59
Um all right, let me give you my next one. The next one, Mercury. You're nodding. Do you have this one?
17:07
It was on my uh I had it on my a list, and then I removed it cuz I thought you were going to pick them. I I did pick Mercury.
17:13
So, Mercury is a company that I use, so I'm a again, look at look at the tools you use that you don't want to change.
17:20
Um so, I use Mercury for I think not one, two, but like six of my companies now.
17:24
Um it's just a amazing product.
17:27
So, the valuation is still in that sweet spot range where it's uh I think it's 1. 6 billion right now.
17:36
So, the valuation is uh there at Here's the bull case.
17:38
Here's what you need to believe.
17:39
It has a rare combination on.
17:42
What what Mercury is just a bank that is built for small businesses, and it's easier and simpler to use.
17:46
It's basically just a normal bank, just easier and better.
17:50
If you're a startup and you need to have a bank account, which every startup does, uh you can use a bank from like, you know, Bank of America or whatever, like you know, some some traditional bank, where you're going to use their product, and it's going to feel like, you know, a bunch of 50-year-olds hired some web shop to, you know, outsource this tool that they needed, like the second I like second second-class citizen.
18:11
Whereas Mercury is like, oh, a founder made this, I get it.
18:15
It solves all of the founder all of the problems that a founder would have, I get it.
18:19
And it's true, Immad was a founder of multiple startups before he made this, and now it's like the best product for startups.
18:24
So, product's amazing, has a rare combo, it's growing fast, and it's profitable, which is great because a lot of the companies that get written down or or the risk comes from they're not profitable, they're burning so much cash that if the growth ever slows, all of a sudden you get this huge discount in the valuation.
18:40
So, the fact that this is profitable means there's a margin of safety here.
18:43
Silicon Valley Bank used to be the bank of of choice for Silicon Valley startups. It imploded.
18:49
It was a $34 billion company with 7 billion in revenue 2 years ago, and it imploded because they mismanaged risk.
18:56
Nobody has really replaced them.
18:59
I think Mercury is the best positioned to replace them.
19:00
So, if you think about like, what's the shoes they could fill?
19:03
They could fill the SVB shoes as a 30-plus billion-dollar company.
19:07
They're the category leader.
19:09
I saw this great quote from a Sequoia partner.
19:10
He said the cat- category leader in any category tends to get something like 75% of the revenue and 50% of all profits that are going to be in a in a market, which I I don't know if those numbers are exactly right, but it's directionally correct, which is that the winners of every category take this lion's share of the rewards.
19:25
And I think they have a good moat.
19:28
I think they have a great brand.
19:29
It's letting them get customers, you know, for free, and regulatory moat as well, which is this is not a simple thing that any, you know, any person could go start.
19:37
There's a lot of obviously like financial compliance and regulation.
19:40
Now, one thing to caveat, we called them a bank, that's cuz to the customer it feels like a bank.
19:46
Technically, they're not a bank.
19:47
Who do they Who do they use?
19:47
So, they use like Choice Bank, I think, and Evolve Bank under underneath.
19:51
So they're what we call like a neo bank, you know, just like a finance platform basically.
19:58
And the bear case, the other thing that, you know, the worry would be can they grow with their startups?
20:00
So some products are great because you get them while they're young and you grow with them.
20:05
And other products you get them while they're young and then they graduate off you.
20:07
And as soon as they become really valuable customers, they take their business elsewhere.
20:11
I think they're going to be able to grow with startups, but that would be the risk here.
20:15
I didn't find honestly much of a bear case.
20:16
Do you I don't know if you have a Yeah, I've got a bear case.
20:17
I think I I I almost always bank with Chase because I've just always been afraid of can I access that my money?
20:27
And it happened recently where a lot of people were using Mercury as I mean not to on Mercury, they're using lots of different things.
20:33
And they couldn't get their payments out or their payroll out because of the bank the banks aren't working. yeah.
20:39
And S and SVB was one of them.
20:41
They're they're they're no longer in business because they're this huge company that mismanaged a bunch of stuff and it didn't work out.
20:45
And so yeah, I think that's a massive bear case.
20:47
I think that The reason I bank with Chase is because if Chase were to go out of business and have the issue that S Silicon Valley Bank had, America would basically go under. Too big to fail.
20:57
Yeah, and I always knock on wood when I say that, but a little bit like that where it's like, you know, I think Chase is like I I would have to look at the stats, but it's something like 5% of like Americans use it.
21:06
So it's like a a pretty big deal.
21:08
And so yeah, I think that's a bearish case as to why I don't think that's necessarily a bear case because first of all, they have like I think $5 million FDIC insurance now.
21:16
Like they offer like 20 times more FDIC protection than than they than they need to or than the average bank does.
21:24
So I think they've they've got some features that help with that.
21:25
But the other thing is like I think the proof is in the pudding which with this which is that if while it's understandable to say oh you know, I I choose to go with a too big to fail bank.
21:36
If you just look at kind of where the startups are voting with their feet, this thing is growing so fast that obviously people are making that choice already.
21:44
So it's not like a future scenario.
21:45
It's like today that choice exists.
21:47
And people are making the choice to go to Mercury.
21:49
So I don't see a reason why that would change later necessarily.
21:52
Like usually when I think about a bear case it's like what could go wrong in the future where is what you're talking about which is maybe people just prefer to use a a traditional kind of 100 year old bank because of the track record.
22:05
They have that choice today and people are like choosing to do the other one.
22:08
So you know, I think that's less of a bear case.
22:10
last weekend because I'm a client at Chase, they gave me box seats to the US Open. And it totally worked.
22:18
I'm going to bank with Chase for as long as they'll have me so long as I can tickets to the US Open.
22:25
So as soon as Mercury like starts doing these wine dine perks, they ain't Like I want I want a fruit basket. I want a gift basket.
22:33
If I don't give a gift basket, you don't get my business. I've changed, man.
22:37
Mercury I mean I'll take a 20 piece nuggets from Chick-fil-A.
22:42
Like I don't I'm not I'm I'm a simple man.
22:43
I don't need the US Open. This is easy.
22:45
Oh my god, I they took me I I got these like amazing seats to the US Open and it worked. It worked. Look like it worked. I get it.
22:55
I I fell for the trap and I and so but yeah, no, I think Mercury's a great business.
22:59
I think the founder is pretty badass.
23:00
So yeah, that that one's good. All right.
23:03
So you said that you were going to look at like the founders and or no, sorry, you said you're going to use your P&L.
23:09
So where you spend some of your money. I like that.
23:14
I also do like where do I spend some of my time and where do people spend some of their time?
23:17
And so a tool that I'm playing with it's called Cursor and I think Cursor's pretty amazing.
23:22
And so and I'm going to tell you not my story, but the reason I've been using it, but there was this little girl, she's 8 years old.
23:31
Her father's on Twitter and her father's a developer I guess and her father tweeted something out saying I'm trying to teach my little girl how to code and we're using Cursor and here's a FaceTime of her like a loom like a screen record of her learning how to code and within 12 minutes or something like that, she's built a website and she used Cursor.
23:47
So Cursor is this really cool tool it's got a lot of hype right now.
23:52
It just kind of the easiest way to describe it is it's sort of like Squarespace, Wix or any of these other website builders, but it uses AI and you talk to it a little bit like a person and it makes it really easy to edit code.
24:03
Now, there's a bunch of pros and cons of this business.
24:05
The pro is I think it's amazing.
24:08
Like I think that this tool is awesome.
24:10
I've been playing with it. It's super good.
24:13
Their latest valuation is $400 million.
24:14
I don't think that that's insane.
24:14
So that's like there's opportunity there.
24:18
I think that the con and this is a big con which is these website building tools, dude, their PE multiples are So you look at like Squarespace, Wix, Weebly.
24:28
Do you remember all these?
24:30
Like they don't trade that well.
24:32
So they can do billions of think you're pigeonholing it as a website builder.
24:36
It's not a website builder. It's a it's a IDE.
24:37
You can code anything in Cursor.
24:40
code anything in it, but it's still I think in that category in terms of You don't think it's in that category in terms of when you look at competitors?
24:48
GitHub Copilot, Replit category where it's a where it's a coding environment where a programmer can become now an AI assisted programmer.
24:57
So however good you were, however efficient you were, however productive you were as an engineer or as a as a programmer, you can now be, you know, some multiple more.
25:06
Maybe it's one and a half X more more productive.
25:07
Maybe it's 10X more productive as the AI improves.
25:09
And so I don't think cuz you know, Wix and Weebly, these are like you know, my sister needs a website for her preschool.
25:17
So she goes to Squarespace and makes a website.
25:19
She's not going to She's not going to go to Today she's not going to Cursor for that.
25:24
And also those tools could never do what a Cursor could do where it could build full applications, you know. Yeah, I feel you. I feel you.
25:30
I still think that like all right, so we use I use Bubble. You know Bubble?
25:36
Bubble's like an app builder.
25:36
This is a little bit of a competitor to Bubble.
25:39
And in my head as an investor and at potentially as a user, I think it comes into like it uses it's like the same churn as a small or a website builder where you spend $10 a month and there's not always a massive reason to stay on the platform versus all the other competitors.
25:56
Like it's pretty easy just to like up and try different ones. Do you know what I mean?
25:59
And so for that reason I think it's a little bit similar in the terms of in terms of valuation. Right.
26:03
Um okay, I have a I have I was I looked at Cursor very close.
26:07
In fact, they were on my first draft of companies to be on here, but then as I did more research, I went with another company that you'll see at the end of this.
26:12
So Okay, but what do you think about Cursor?
26:15
For a $450 million valuation, what do you think?
26:17
I think I mean I think you're getting high upside, high downside there cuz you know, that valuation's not based on it's not based on revenue.
26:25
Um it's it's based on like, you know, this this vision of what the future like might look like and that's great and I think Cursor's awesome right now.
26:33
If I could invest in Cursor, I would totally invest in Cursor right now.
26:38
But I think it is more risky than some of the other ones we've talked about so far. I think that's true.
26:42
They're at a $10 million run rate I believe or I don't know if it was run rate or that's actually what they did in revenue, but yeah, it's tiny compared to the valuation.
26:50
What do you have then instead?
26:51
What's your competitor to it?
26:53
Uh I'll show you it's it's my last one, but I can't rearrange the slides here.
26:56
So you're going to have to wait on that.
26:58
When you told that story about that little girl, I thought you were pulling a Kamala Harris and you were going to say that little girl was me at the end and I was pretty ready for that emotional landing.
27:08
And instead you were like that was just somebody's daughter.
27:13
I just follow grown men's daughters on Twitter. I don't know.
27:15
It was like You are you getting your tech advice?
27:17
Dude, it was Are you Did you see that video?
27:22
I did not see that one, but I've seen some kind of amazing things.
27:23
Like Cursor demos right now all the rage. Dude, it's all the rage. All right, keep going. All right, my next one.
27:30
I don't even know if you've heard of this company.
27:31
Epirus, do you know this company? No.
27:36
Okay, so I don't like that name. Epirus? Yeah, Epirus.
27:39
So this is a Joe Lonsdale company. It is a weapons company. A defense company.
27:44
And I don't know enough about Epirus because it's very secretive company and it's very private to tell you that this is the pick.
27:50
What I actually did was I put this here as a placeholder as a general strategy.
27:54
So one thing I would do if I was interested in this kind of sear this concept, finding a company I can go join that the stock is going to be my my stock package is going to be appreciating, you know, rapidly.
28:03
I'll get a 5X in 5 years.
28:07
I think that the way Anduril hit for us last time there are now like 10 more Anduril type of companies that exist that are inspired by Anduril that are worth checking out.
28:17
Anduril itself might still be a contender by the way.
28:19
Um but there are more companies.
28:21
So Epirus is basically like long range, you know, like defense weapon or whatever.
28:25
Dude, if you go to their website, it's Epirus Inc.
28:29
It basically looks like some type of like electromagnetic thing that shoots like radio waves into the sky and brings down drones and planes. what it does.
28:37
It's a EMP pulse that will take down, you know, a drone or a missile or something like that without being a bomb.
28:42
Like you don't have to like you don't have to bomb something.
28:44
You could just disable it. It's just magic.
28:45
There's a great story by the way.
28:47
I actually the CEO cuz this looks magical.
28:52
Like when I see like invisible rays a good pickup line.
28:56
I'm going to use that next time I'm trying to like talk to a founder.
28:57
Be like, but are you related to David Blaine because this is magical. Is he a cousin?
29:03
Um it does look like magic.
29:04
So he told the story where he's like I was like, dude, how do you sell to these like three letter agencies?
29:10
And he's like it's very hard, you know, there's like decades long relationships and with the the traditional companies.
29:16
So I'm like how do you do it?
29:18
He goes, well, the the big thing we always try to do is get to a bake-off.
29:21
He's like we have to get to a point where they're willing to do a contest of our product versus their product cuz we can win on product.
29:27
We have better product engineering, but we don't have better, you know, good old boy relationships here.
29:33
So we have to get to a bake-off.
29:35
He's like so we did a bake-off for Epirus.
29:37
And basically everybody went to this field and they're like, cool, I'll line up and then you're going to go first and we're going to see how far away you can, you know, disable this and how effectively you can disable this drone. Uh that was the test.
29:48
And they lined up and he's like handing out binoculars and they're like, "What what's this?"
29:53
He's like, "You're going to need these to see how far away we're going to be able to disable this thing."
29:57
And then they like won the bake-off, won the contract, and all this stuff.
30:00
So, I don't know about this company specifically, I don't know enough, but I would go interview at the top 10 like defense/weapons companies.
30:09
Go talk to all of them and then use your judgment on which of them is the winner.
30:11
I know in that basket there's definitely one or multiple winners that are that are in this.
30:16
I but I I from the outside here I know Dude, how do you even get that person So, let's say you're Joe Lonsdale, which like I guess that's kind of answer the answers the question cuz he's a big shot.
30:24
But if you're not a big shot and you want to get like some CIA buyer into a field in Texas to like show up like to to wow him.
30:34
Like who do you even phone call? You know what I mean?
30:36
Like who Well, I think there's a multiple answers to this, but I'll just give you a couple of data points.
30:41
So, the the very first thing is that there are bids.
30:42
There are like RFPs that you can participate in.
30:46
There are there are like, you know, the government has a process of procurement where they need to be able to go solicit proposals.
30:53
So, you can go look at those.
30:54
You can go talk to those.
30:54
The second thing is when we were at his house after we recorded the podcast with Joe, we were walking out and there was like 10 like senators there for lunch.
31:01
I was like, "Oh, this is how you build your network.
31:05
You you" He's like hosting a lunch for like 10 and you bring you out the back door?
31:08
Like like I'm missing something.
31:11
well, cuz Elon was coming over and he was like, "Hey, might be easier for you if you just want to go this way."
31:15
And we were like, "Easier for you or for easier for me?"
31:18
Like maybe for both of us. All right, good. Fair fair enough.
31:21
Uh cuz I'm literally in my basketball shorts.
31:24
Did he hand you 20 bucks Yeah, like gave you 20 bucks and bought you a and bought you an Uber.
31:32
He's like, "Don't forget your lunch box."
31:33
And then I like wandered off to a bus.
31:35
Yeah, yeah, was there apple juice waiting for you at the doorway out? It's truly how it felt.
31:40
And by the way, I couldn't have been happier with the arrangement.
31:44
I did not want to want to be a fish out of water either.
31:46
So, I think that's one way.
31:47
There's also a great story told on the pod about like how Peter Thiel was telling them like, "Dude, cuz when they started Palantir, he was like a couple years out of college.
31:55
Like he wasn't that old yet.
31:56
And he had like a lot of like kind of like the pride and hubris of like like a tech kind of like genius type of person.
32:04
And he is, you know, a genius type of type genius level person, but going in and saying, "You guys are dumb, we're smart" is not the answer either to sell to these things.
32:12
And so, they hired this guy Alex Karp, who's still the CEO of Palantir.
32:15
And one of the reasons why it was like this guy was just like very very good with relationship building, with networking, with being accepted by these buyers.
32:22
And then he recruited like ex-government people to be like door openers, like warm handshakes to help them get in the room.
32:29
And I think that that's how they got Palantir.
32:32
to a an entire podcast next time just on the New York Times article on Alex Karp. Very funny. Very good. Very interesting. Yeah. Very good.
32:40
All right, I buy into that.
32:40
I To me, working at Epirus or any of these national or these defense businesses, it's sort of like working at a porn company where like you like probably most of the work might be like you be working video entertainment.
32:55
Well, yeah, like most of the work is like normal, like just a normal job. It's boring.
32:59
But then like you see the output and it's like like death or destruction or like like pretty like raunchy if you're working at their tool, this Epirus tool, just in this case, is like a non-death tool.
33:12
It's disabling the electronic device without bombing anything.
33:14
But yeah, yeah, I'll definitely some of the other ones are are are a lot more like, "Yeah, this is war."
33:18
Yeah, where like the output of this, whether it's right or wrong, it's still like a You go to bed every once in a while, I imagine, with a heavy heart, even if you're doing everything right.
33:29
All right, I have an I have another one.
33:30
And I am You know that what is that called?
33:33
That midwit meme where there's people who are on like this the dumb guys are at the far end where they just don't think things or how's it go? You're on one of them.
33:43
Let's just put it that way.
33:45
You're showing that you've got one of the sides nailed.
33:49
There's the big the kind of the beginner, the caveman who's just you know, build product, talk to customers, right?
33:55
And then the Jedi's also like, you know, I should just build a good product, talk to customers.
33:58
And then the guy in the middle is doing like over-analysis, overthinking, over over everything.
34:06
But I feel like you you did a good job like you know, like like a mime.
34:10
You like acted out the meme. It was great. I am what I am.
34:17
I took that approach with a couple of these.
34:18
Dude, have you heard of this company called Wiz? I've heard of Wiz.
34:22
I don't know what Wiz does.
34:23
I looked at it and I was like, "I don't understand this enough." Dude, all right. So, check this out.
34:27
So, it was Wiz is a cybersecurity company for enterprise companies.
34:30
So, or enterprise customers.
34:32
So, basically if you have if you're using like large cloud tools, it the tool Wiz's tool like scans it and be like, "All right, you have a potential threat here, here, and here for cybersecurity issues."
34:42
It's the fastest company ever to get to a hundred million in annual revenue. Took him 18 months.
34:49
The guy who started it Now, this is why where like the mid that meme comes into play here because he's kind of amazing.
34:55
I read this article about him a couple years ago.
34:57
And the opening line is I guess he his first name is Asaf. So, he's Israeli.
35:02
And he was like a Israeli defense guy in the military.
35:04
And it said, "Don't mistake Asaf's gentleness for someone who's willing to play by the rules."
35:10
That was the opening line. I was like, "Okay."
35:12
What does that even mean? Yeah.
35:15
It's like a Tinder bio, Jesus. Yeah.
35:15
All right, I'm interested.
35:17
And so, basically this guy he previously had another company that he scaled and sold to Microsoft.
35:24
It was also a cybersecurity cloud company.
35:26
Sold to Microsoft for a billion dollars.
35:27
He gets through his um His warm-up company.
35:30
Yeah, his warm-up company. He's only 38 years old.
35:32
He gets through his non-compete or whatever, spends time at Microsoft, things go well, and then he starts his next company called Wiz.
35:38
So far, they've already raised two billion dollars, of which a one billion of that came in one round.
35:44
And the company's only 18 months old, which is absolutely ridiculous.
35:46
They've done something I think they're already at 350 million dollars in revenue in just three years.
35:53
350 annual recurring revenue in three years.
35:57
Something like 80% of the Fortune 100 companies are already using the tool.
36:03
So, they've killed it already.
36:03
Now, here's where things get interesting.
36:07
Their last valuation was 12 billion dollars, but there was a rumor that Google was going to buy them for 23 billion dollars.
36:12
And so, there's all these rumors that this was happening.
36:16
And so, he sent an email to the entire company.
36:17
And let me read you a quote.
36:20
He goes, the first line, "Let me cut to the chase.
36:23
Our next milestones are a billion dollars in ARR and an IPO."
36:25
And he explains how they aren't accepting this offer from Google because they want to like make it big and be this huge thing. And I love this guy.
36:34
I think he is just one of the coolest like in most interesting CEOs out there right now. What are you looking at?
36:41
What do you think when you look at him?
36:43
Well, he looks not like what I thought.
36:46
Actually, your first line about like, "Don't let my gentle whatever fool you like I'm here to whatever handcuff you to the bed."
36:52
I don't know what he said, but like something like that. That's what I heard.
36:54
He's he just looks like a good old It looks like a Midwest nice guy when I look at these photos.
36:58
I was really expecting a a lot more hardcore looking of a guy, which is just from my Google image search.
37:04
Dude, when you see a guy wearing a t-shirt who sells to like suits or the NSA or whatever, like these like big big shots, I think that like you're secretly very dangerous.
37:17
Like the the You know what I mean?
37:20
Um and let me tell you something here.
37:22
So, um Okay, so check this out.
37:24
There's a part of the Wiz story that I think is pretty interesting.
37:27
First of all, interesting pick.
37:29
I think they have such a high valuation that you're really betting this is like one of the mega-cap tech companies to do this. Okay, fair enough.
37:37
The the thing that scares me is anything that grows this fast, you know, what goes up must come down in a way.
37:42
This is not it's not as lindy.
37:42
It's not as You know, when something is a slow compounder, you actually trust it more than a explosive but not like doesn't have a long track record.
37:52
Dude, but that's the goal of this thing.
37:54
It's things that could 5x in three years. That's fast growth. Five years, five years. Yes. Whatever. Yeah, true. True.
37:58
But I guess what I'm saying is like I it might be priced in. I don't know.
38:01
So, let me tell you something that's interesting about this.
38:04
So, when I saw this company grow so fast, there's a natural question of, "Well, how?"
38:08
Um Have you heard about the story about this guy named Gili that's associated with Wiz? No, but I'm in.
38:13
All right, so who is Gili?
38:16
I don't even know how to say his last name. Ran Onan? Ran Onan? Something like that. Gili Ran Onan. Let's call him.
38:21
Dude, is it all these guys, by the way, they're Israeli like special force guys?
38:25
So, they all This guy's ex-Israeli military intelligence. Yes.
38:29
He also invented CAPTCHA.
38:32
He invented WAF, which is web application firewalls.
38:34
He did a bunch of other stuff in cybersecurity.
38:35
He was a partner at Sequoia.
38:38
Very well respected in the cybersecurity world.
38:40
And he started a VC firm called Cyberstarts.
38:42
And they're the first investor in Wiz. And now, check this out.
38:46
So, let me just read you this excerpt.
38:47
The numbers for the for the VC fund Cyberstarts are phenomenal.
38:53
The fund that specializes in cybersecurity funded by Gili only six years ago.
38:56
Here's here's how it goes.
38:58
So, 22 companies combined value 35 billion.
39:00
Five of the 22 are unicorns.
39:02
So, a higher hit rate than YC.
39:02
First and foremost is Wiz, who's breaking all the records.
39:06
Four of them were sold in the last 12 months.
39:08
So, you know, like successful exits for a total amount of 1. 5 billion.
39:13
In the last three months, their companies have raised 1.
39:15
8 billion, blah blah blah.
39:17
His his portfolio shows an IRR of more than 100%, which is you know, unusual for even the best performing funds.
39:23
Not a single company has failed so far in his portfolio.
39:25
And it is currently ranked in the top five of all VC funds in the world due to these achievements.
39:31
Okay, so then you say, "Well, hold on. What is What's working?
39:34
What's What's actually happening here?"
39:37
And then you say then there's something called the Gili Ran Onan model.
39:38
And basically what he does is he's got this mafia of the chief the CISOs.
39:44
So, the the chief security officers um at all these enterprise companies, and they're all in his pocket. They all respect him.
39:51
They think he's got the Midas touch.
39:52
He's done so much in the space.
39:53
He builds a relationship with them, but then he makes them essentially partners like I think like carry partners in his fund.
40:01
And so, what he does is he basically has this like a bribery network is what my understanding of this is.
40:05
Not what they called it, but like Corruption's awesome. Corruption's awesome.
40:11
Um it's causing uh so, it is referred to as the Gili Raanan model.
40:14
It is causing more I got to stop saying this guy's last name cuz I'm probably butchering it.
40:18
Cause more discomfort amongst Israeli competitors and portfolio companies, which are all jealous for obvious reasons.
40:22
It has reached the US where company executives who are purchasing cybersecurity systems are as committed to Gili as they are to their own company.
40:32
And basically, what he does is he goes to them and he, you know, wines and dines them with dinners and conferences.
40:38
But according to several sources, he promises teams of fresh graduates graduates from tech units not only investment support in the startup, but initial revenues of 2 million a year.
40:47
This is usually their first year of revenue, which is intended to boost them above their competitors and help them get the next round of funding.
40:52
And the way he does that is by using his network of uh loyal loyal CISOs.
40:56
And so, the first sales come from the loyal CISOs who work with the fund.
41:02
It might be considered small money, but the jumps in the the jumps in fundraising for cybersecurity is is difficult.
41:07
If you can get to that 2 to 10 million range, you've like you have escape velocity to get to the next round of funding and all that.
41:15
He creates a mechanism that is diffi- difficult to compete with because the companies immediately jump to a valuation of 100 to 200 million, raise more money, and have more resources to compete later.
41:22
This seemingly so- small purchase of 100 to 200 thousand dollars by the CISO will increase the startup's value dozens of times.
41:28
This is known as the Gili model.
41:32
And I think what he says there's something here about like the kickback that they get.
41:34
So, there's some Here's what he emailed them.
41:36
It is difficult to predict the performance of the fund, but according to our forecast the points you have accumulated in the fund so far are valued at X dollars.
41:42
You can expect additional allocations in the coming years and in the new funds we will raise later.
41:47
So, it's kind of a you scratch my back, I'll scratch yours model. I pick winners.
41:54
I just thought this guy was awesome because he wrote cool emails, and he's got a dope smile.
41:59
Turns out, you know, there's good reason the wolf backing him, yeah.
42:03
Well, a lot of them are from I think it's called the Unit 8200, something like that.
42:06
It's like the NSA of Israel.
42:07
And so, if you look at like some of the largest security companies, so it's like uh I don't want to talk totally out of turn here, but I think it's like Palo Alto Networks and all these like multi-billion dollar companies, they all came from that unit.
42:19
And so, I it turns out with this guy it's more of a they're they're they're definitely working together, but I thought they were just working together because they were all from like the same crew.
42:27
You know, it's like they all went to high school together.
42:28
Turns out there's like a blood oath.
42:30
Neither you nor I know jack about this, but it sounds like a movie, and we're pretty fascinated.
42:37
That's I think that's what's happening here.
42:38
So, it sounds like some sort of some sort of All right.
42:41
A big dummy like me came to the great conclusion as uh this smart dude.
42:50
All right, what do you got?
42:50
All right, my next one is a quick one, Neuralink.
42:55
So, Neuralink is currently valued at 5 billion dollars.
42:58
It's got like pretty much no revenue. Here's the case. Elon.
43:04
They put a chip in a guy's head, and he's like playing video games on a Twitch stream now. Uh it's pretty crazy.
43:09
The first patient They have a huge technical milestone.
43:11
Was he paralyzed or he had MS?
43:11
Yeah, he's a quadriplegic.
43:13
Um you know, so he can't I think he can't move his his arms or his legs, I believe.
43:17
And now with his brain, he's just playing chess and he basically can use a computer with his brain now. Just by thinking. Okay.
43:25
And he's like, "Wow, my life just got so much better. This is amazing."
43:29
Um and they successfully implanted the chip in the guy's brain, and he can now use computers. It is incredible.
43:32
I cannot believe more people are not talking about this.
43:35
I'm going to do a whole deep dive on Neuralink just cuz I think that I'm blown away by the videos I've seen and the the the nerdy rabbit holes I've been down for.
43:45
Um to me, this is a question of when, not if, meaning the next platform shift is probably glasses, but the one after that or the, you know, the big one is just put the computer in the brain. That will happen.
43:55
It's just maybe it's 10 years, maybe it's 100 years, I have no idea.
44:00
Another bull case is, look, even if this doesn't 5x in 5 years, you're going to be helping a lot of people out cuz all their initial customers are people who are, you know, severely disabled, can't see, and they're going to make them see.
44:10
They can't hear, they're going to make them hear.
44:12
They can't uh move their arms, they're going to make them be able to use computers.
44:15
It's it's really incredible.
44:16
So, I think they're doing incredible work, and that you're probably working with really smart people on a mission that matters, and you're probably going to make a lot of money doing it.
44:24
The bear case, of course, revenue uh question mark question mark I you know, they have like one customer right now, right?
44:28
So, like it's going to take time. Long path to success.
44:29
They're kind of at the uh they made the first Tesla Roadster.
44:34
That's where they're at in the the Tesla journey right now.
44:38
Dude, but you're missing the whole point of this list, which is like how do you like not like stress out all the time and like things like that and have a good job?
44:48
need the they need the personality hire.
44:50
They need the guy who's bringing smoothies to the office.
44:51
They need the guy who's a good time to be around.
44:52
They need the guy who's willing to do the dirty work and uh go clean up the files and go organize things.
44:59
you think that Elon has a personality hired?
45:03
Yeah, I think he does, dude.
45:03
I think he's got like literally like meme lords that work for him.
45:07
So, I think he's definitely got personal personal hires. I don't know, man.
45:10
I agree with you on so many things.
45:12
I know some dummies that work at Tesla. Let me put it that way.
45:14
I I have some like Who's this guy Oh, my cousin works at Tesla.
45:19
Then you meet the cousin, it's like, "Does he work like in the tire shop? Like who's this guy?"
45:24
Um Yeah, I feel that, but Neuralink's not that.
45:26
How many employees do you think they have? Uh I have no idea.
45:28
I would guess like probably like 100 is my guess or somewhere like in plus or minus 50. Uh I have no clue.
45:35
That's too small to hide.
45:40
You're assuming I didn't say Sarah's list is the chill life.
45:41
It's It's not the It's not the vest invest life.
45:47
I I think maybe we have a misunderstanding there.
45:48
Maybe Sarah wasn't doing as much work as I thought.
45:51
No, it's like a 40-hour work week.
45:51
I I don't know if Neuralink is a 40-hour work week.
45:54
If it is, then I'm on board.
45:57
Okay, fair enough, fair enough. Um all right.
45:59
I'll do I've got two more, maybe.
46:01
All right, you had OpenAI.
46:01
Now, I want to I want to vote with my attention a little bit.
46:05
I use OpenAI every day, but you know what else I use a ton is Perplexity. Um do you use that? Me, too.
46:11
Yeah, I use Perplexity as well.
46:13
Now, how do I explain the difference between the two?
46:15
I think Perplexity Perplexity is when you need the answer to be right. Yeah.
46:19
ChatGPT is when you have a variety of random things and accuracy is not as important, yeah.
46:24
If I'm doing research for this pod and I need to say a number that's not going to be be wrong, um Perplexity is a better bet than ChatGPT.
46:34
So, Perplexity, I think their latest valuation was 3 billion dollars.
46:35
They raised 415 million bucks.
46:37
Uh so, it's already like a very big, but I think the market's huge.
46:42
I also think when I I find like interesting stories about the founders, and I love it.
46:46
So, what's the CEO of Perplexity? I know how you spell it.
46:50
Uh Arvind, I think is his name. Uh Arvind.
46:52
All right, so there's a funny story about Arvind.
46:54
He grew up in the same area as the Google CEO, and he grew up vegetarian, and his mom wouldn't let him eat eggs, the the Perplexity CEO.
47:03
And uh he like grew up in like, "No, you can't have eggs."
47:05
He's like, "I need more protein."
47:06
She's like, "You can't have eggs."
47:07
So, he sees a YouTube video of Sundar uh from Google saying, "Yeah, I introduced eggs to my diet um in order to like get more protein."
47:15
And then the mother's like, "Okay, you may have eggs."
47:17
And so, the fact that And he goes on That's where I thought you were going with this story. He goes on Dude, listen.
47:27
He goes on to like have this story where like they're like, "Dude, Sundar at my household was like God."
47:32
Where it was like, "Well, if he does this, then you must do this."
47:34
And so, imagine being raised in such a toxic environment where you are either him or you are a failure.
47:42
And so far he's doing pretty good.
47:44
So, like that's again, that's like Sam being a dummy and voting on a company just because the uh the the founder's trying to like prove his mother uh you know, make his mother proud.
47:57
That's a strong That's a strong motivation.
48:01
So, no, but I do think the the company is going to get significantly larger.
48:07
like that episode of like Always Sunny where Charlie's trying to date, and they're like, "Charlie, what about her? She's great. She's got a good job. She's nice.
48:14
She's" He's like, "She doesn't like milk."
48:16
It's like, "What, Charlie?"
48:17
He's like, "You know, she's like this tall."
48:18
And it's like, you know, they basically it's like, "What are your What is your criteria, Charlie?
48:21
What are you doing here?"
48:24
Is this a ridiculous pick or what?
48:24
No, I don't I think a lot of people would say Perplexity, so I don't think your your logic I think is ridiculous.
48:29
I think you're You somehow are landing at the same conclusions as the geniuses, but the way you get there is uh unique, uh I would say.
48:41
No, I I I picked it because uh I use it.
48:43
I I've I like it in terms of getting uh in terms of right now? Uh three. 3 billion bucks.
48:47
Uh so, a lot, but I mean, I don't know.
48:53
It's like a fast-growing space.
48:55
Perplexity also seems like a company that could get bought.
48:56
So, like, you know, OpenAI, ChatGPT is like aligned with Microsoft, and Google's trying to do Gemini and all this stuff, but like if Perplexity keeps executing, you know, it's the way that Facebook bought WhatsApp for 20 billion, right?
49:10
Like At a certain point, if you are a better version of their core product of one of these large companies, um Google being the kind of the main one, you know, you're a a very good acquisition target.
49:22
Even if your standalone business may may or may not reach there, I have no idea, but like it gives you multiple outs.
49:29
The downside is like it seems like no tech company could do big M&A anymore.
49:32
So, maybe that path is not as realistic.
49:35
Um but I I don't think it's a bad pick.
49:37
I think Perplexity is an interesting pick.
49:38
Do you want to do your your other one and then I have one last one?
49:42
Well, my last one is Trava.
49:44
Have you heard about Trava?
49:46
I've heard a lot about Trava because there's like a Trava uh there's like a Trava PR mafia that's out there.
49:51
And I I It's I'm not All right, so let me start with I don't I'm not part of that mafia because I do not want to work there.
49:56
I think it sounds miserable.
49:59
Um, but there's a bunch of freaks who do want to work there.
50:01
And if you are one of these freaks, this is a a place to let your freak flag fly.
50:04
Um, I'm not a fan of it and Like can can you explain that?
50:08
So I think it's kind of like here's a simple explanation of the culture.
50:12
Most tech companies are like, "We value diversity and balance and we want, you know, well-rounded people."
50:17
And Trava's like, "Yo, we're doing China in America."
50:21
They're like, "Yo, we're working like the Chinese over here.
50:25
Like we're doing the 996 model.
50:27
We're here to create a trillion-dollar company.
50:29
We are going to just like compete ruthlessly to get there." And it's pretty awesome.
50:33
Let let me explain what it is and then we're and then I'll I'll I have some other I have a little bit from their deck on when they onboard employees.
50:40
But basically Trava is a software I guess you would you It's not just software.
50:45
You wouldn't categorize it as just software.
50:47
It's it's a little bit of everything, but it's a it's software and a way to get part-time or fast workers when you are a manufacturer or a big company like that. Staffing. Industrial staffing.
50:58
Yeah, so it's software plus like actually getting the people to show up to if you're a big factory, if you're something where you need you know, 100 new employees or something like in in a week to do X Y and Z.
51:10
They make it really easy to find and get those people to actually show up on time. I think they're trava.
51:15
com their website I think it like that's their tagline which is get workers to show up on time tomorrow or something like that. trava. work Yeah. trava. work sorry.
51:22
Now, here's the part where they're they're kind of interesting.
51:25
So Founders Fund who I do respect, they're like, "This is probably our highest potential startup."
51:31
And they've said that these crazy stories like they've showed up at the office at 10:00 p. m.
51:37
And what we've noticed is like the office is still buzzing with people and it feels like the golden days of PayPal.
51:43
And they have these values.
51:43
These values are dream big, have an Olympic Olympians work ethic which is inspired by Chinese China's 996 mentality which I'll talk about, have a growth mindset and be customer obsessed.
51:54
And so basically they say, "Dream big.
51:55
We want you to be the number 1% in terms of ambition plus the number 1% of attitude which is going to allow us to get the number 1% outcome.
52:04
We want you to have an Olympians work work ethic."
52:06
And they basically I think they explicitly said this on their website, "We have a 996 culture."
52:09
Which means working 9:00 a. m. to 9:00 p. m. 6 days a week.
52:15
And there's like these interviews with these employees that are like, "I really wanted that type of work culture and I Googled where can I find that?
52:22
And you guys had it on your website and so that's why I decided to apply and work there."
52:25
And so they're pretty insane.
52:29
It's like I Googled where I could work the most hours and I found you guys.
52:34
Yeah, they're pretty insane.
52:34
I think they only have like 150 employees.
52:36
I think the valuation is something like a 150 million dollars I think.
52:42
No, no, it's got to be higher than that.
52:45
I I don't I I only saw a handful of numbers on their valuation. Is it higher than that? Maybe I'm wrong. Maybe maybe it is.
52:53
The valuation isn't public.
52:55
I think I was trying to like triangulate a bunch of old articles and I don't know if there's a current one out there so I can't say exactly what it is.
53:04
Yeah, all I'm saying is the Founders Fund 22 million-dollar round which yeah, that would probably be more like what you're talking about.
53:10
So it could be worth more.
53:10
I don't have the information.
53:11
I just I'm doing a lot of guesswork out of just articles that were live.
53:16
But people say that it's growing like 5x per year which is like huge and a lot of smart people who even though I think they're douchebags like Keith Rabois, they're behind the company and they're definitely smart. Yeah. Okay. All right.
53:29
I like I like the pick here.
53:29
I didn't realize their valuation was what it is.
53:34
Looks like it's around 200 million.
53:36
Yeah, I think this is a bet on people, right?
53:38
So I think the people behind this company are pretty remarkable.
53:40
They do seem like the Olympians of founders.
53:43
Now, the market opportunity is difficult here because there's a lot of companies that get valued as tech companies that are actually something else.
53:51
WeWork was valued at a tech as a tech company, but it's actually a real estate company.
53:56
There's e-commerce companies where they're you know, D2C companies where they were valued like they were tech startups, but they were actually, you know, selling suitcases and shoes and things like that.
54:05
And eventually those corrections do come and so I think the question here is like is this a tech Is it a tech company or is it a staffing company that uses tech and started by tech people?
54:13
Um, and you know, I'm not in the weeds enough to know, but I do know what you said which is that they seem to have a very unique culture.
54:21
Seems like very smart people are very bullish on them and it seems like the founders are in that elite elite level of both ambition and um drive.
54:32
And that's those are good things to bet on in general.
54:34
But you did definitely just hypocritically tell me that like two of my picks were were two two hard to work at and then you picked like literally the one that's like, "Yo, our thing is that we're the hardest to work at." Yeah. Yeah, all right. Moving on.
54:52
All right, what do you have? All right. My top pick, my finale.
54:57
Drum I I don't want a drum roll because it's going to seem anticlimactic because it's the same company I picked last time that is not that was not a winner in the last one meaning it didn't 5x in the last one. one? It's Replit. Oh, man.
55:08
I think I am more bullish on Replit than any uh any tech company right now.
55:13
Are you so bullish on it that if you could bet all of the money that you have into that company, you would do it?
55:20
No, I'm not foolish, but I would I did invest in the company and I then on top of my fund investment, I wrote a personal check on top of that which probably the only one I've done that with.
55:29
So, you know, my actions do line up with this, but I wouldn't bet all of my money on this because I don't need to do that.
55:34
So, here's here's my case.
55:37
So, 3 years ago when we did this episode, Replit was at a about a 1 billion-dollar valuation.
55:44
It had 5 million developers.
55:44
At the time it really had no like AI story or tailwind.
55:49
And revenue was small um to non-existent. What was it then?
55:55
Um, they don't announce they don't say.
55:58
But it's because it it wasn't it wasn't a priority and it wasn't meaningful.
56:00
So now, everything has changed except for the price.
56:04
So, the 5 million developers has become 20 million developers.
56:08
The no AI tailwind has become a huge AI tailwind.
56:11
And small revenue has become scaling revenue.
56:13
He Amjad came out and said 2024 is our basically like has been our commercial year.
56:18
Like revenue is scaling rapidly. Dude, what's it do?
56:20
Okay, so what is By the way, here here's the Do you know the Replit story?
56:24
It's kind of amazing to be honest.
56:26
So, the Replit story is Amjad grew up in Jordan which is a place I've never been and it's sort of this like, you know, the world is very large and there's people there's talent everywhere, but the opportunity is not as evenly distributed.
56:38
And so he used to code he used to love programming, but he didn't have his own computer at first.
56:44
And so he would go to internet cafes, basically borrow a computer and he would per he would code he would learn to code.
56:49
But the problem with that was that uh every time you go to an internet cafe, you're going to a different computer and you're not like none of your stuff is saved from last time.
56:57
And and if you ever learn to code like one of the first things you do is you first have to like set up your environment.
57:01
And so you need like your IDE, you need to install all the packages for the language that you're going to be using.
57:07
If it's Python, you need to install those files on your computer for it to work.
57:09
And you need to save those somewhere.
57:11
You need to host it somewhere.
57:12
There's all these things that go into coding.
57:13
And so he had this unique problem which was he wanted to code and he was so disenfranchised where he didn't have his own computer that he was doing at internet cafes for a while.
57:21
And then even after that, you know, he worked at Yahoo briefly like once he, you know, kind of graduated.
57:26
And he was uh still just sort of always annoyed with this like this like friction that it takes to get set up.
57:34
And so he as a side project created this thing that was um it was called something else Reppel something at the time.
57:41
And Reppel is this like programming term, but basically what he wanted to do was he's like, "Can I make a cloud cloud-based programming environment?
57:49
Basically like my environment, but instead of it being local to my computer, have it be in the cloud."
57:53
He It's because he saw Google Docs.
57:55
He's like, "Oh my god, Google Docs is amazing.
57:57
This is um instead of having to have Microsoft Office but have the software on my computer, have the file on my computer, I can just go to any computer anywhere, go to a doc.
58:06
The whole editor is built into the website which is amazing.
58:09
I didn't even realize websites could do this.
58:12
And wow, multiple people can like edit the same Google Doc at the same time. This is incredible.
58:17
Can I do that for coding?
58:19
So, that's where he started.
58:19
And so and so he built it as a side project for many years.
58:23
So, he worked at Yahoo as a side project.
58:24
Then he worked at Facebook and it was a side project.
58:28
He worked with the guy at Facebook on the team that the team and the the guy who created React which is like now like, you know, the huge programming framework React.
58:36
Um And somewhere along the way like rep Replit basically starts to get a little bit of momentum.
58:42
Gets like 100,000 users as his like side project.
58:44
And it was he worked at Codecademy and Codecademy was teaching people to code online and they discovered his project.
58:49
They're like, "Dude, some random guy from Jordan created a programming thing that like all of our customers who are coming to learn at Codecademy, they could just code in the browser.
58:59
They don't need to have like their own thing."
59:01
And so it's a side project for many years and he wants to make it a main project.
59:04
You know, he's not taken very seriously.
59:06
He can't raise any money for it.
59:07
And he applies to YC three times, he gets rejected three times.
59:12
And after getting rejected the third time, he's pretty, you know, discouraged.
59:15
He's like, "All right, man, whatever. F YC, who cares?"
59:18
And but the thing was that developers really thought this was cool cuz it was like kind of a technical achievement to do this.
59:23
To do this he had to like write his own compilers and write his own that like would work in the browser.
59:27
It worked with any language.
59:28
And so there was for example a um uh, Atlassian created a competitor to this called Glitch.
59:35
And Atlassian had like a good track record of like Trello and Jira, like they built like developer-friendly tools.
59:43
So, Glitch comes out, huge PR move, raises a bunch of money, and they said, "It's coding in the browser."
59:50
He's like, "Oh, no, they're doing it."
59:51
He goes, but they're like, "It's all JavaScript cuz JavaScript is everything."
59:54
He's like, "Well, I made this choice, this technical choice to support any language."
59:59
And these guys are saying, "It's all JavaScript."
1:00:00
And initially they got this huge boost, but he started to notice that like this little language Python started to get really popular on Replit.
1:00:08
And he's like, "I think they're missing the boat.
1:00:09
I think Python is the thing."
1:00:11
And Python became the language of choice for machine learning.
1:00:13
It became the language of choice for back-end development.
1:00:16
It became the language of choice for a bunch of like big waves.
1:00:19
And he was the only one that could support Python.
1:00:21
So, Glitch ends up dying, that Atlassian company ends up ends up failing on in it.
1:00:24
And he just keeps chugging along.
1:00:26
And so, along the way, he was he had this like kind of indie support.
1:00:30
So, it was used by a lot of students, a lot of teachers, a lot of coding boot camps.
1:00:33
But that was kind of looked at like a toy, like, "Oh, that's cute, but those are just like beginners who have no money, who whatever."
1:00:39
Yeah, I'm reading about him on Hacker News.
1:00:42
Like, he was controversial there, but a lot of people loved him, some people disliked him. Is he aggressive?
1:00:48
on, he was really loved on Hacker News.
1:00:50
Not him, but like Replit was really loved cuz it was like kind of cool that you could do this and it actually worked really well cuz he's, you know, a great programmer.
1:00:56
And one person who was reading Hacker News really liked it.
1:00:57
And that person was Paul Graham.
1:01:01
Now, Paul Graham had retired from YC.
1:01:01
He was living in the UK in this like mansion.
1:01:05
And, um, he's not a part of YC anymore.
1:01:08
And Amjad got rejected from YC three times.
1:01:12
But Paul Graham was like, "Dude, I think this is awesome."
1:01:13
And he tells Sam Altman, who's running YC at the time, he's like, "You got to talk to this company Replit."
1:01:18
So, he goes to meet Sam at at the time was a hybrid office of OpenAI and Neuralink before OpenAI was a big deal.
1:01:26
Back when OpenAI was just a research nonprofit.
1:01:27
And he meets Sam and Sam's like, "Hey, um, you know, I don't know anything about you, but Paul really likes your thing.
1:01:33
And he wants me to check this out." And, um, you know what?
1:01:37
You should just like talk to Paul.
1:01:37
He told me but like I'm not the guy for this, you should talk to Paul. Here's his email.
1:01:42
So, Amjad ends up trading emails, like long emails.
1:01:45
He he said like, "I should turn this into a book someday of like my emails back and forth with Paul."
1:01:49
Like the philosophical foundation of Replit, which was like, "What if you could enable like 10 times more programmers in the world?"
1:01:56
Because this whole thing was about opportunity.
1:01:59
So, how do you make a programmer who doesn't even have their own computer, who doesn't know how to start, who doesn't know how to like get everything installed in their environment, all this stuff?
1:02:06
How do you decrease all the friction?
1:02:07
And eventually, in even in his initial like plan was like, "We'll have AI that will help you code.
1:02:13
It'll be your pro- your programming assistant."
1:02:14
This was back before AI was a thing.
1:02:16
This was like 2014, right?
1:02:17
Like people weren't even talking about AI back then.
1:02:19
And it's in his original slide deck.
1:02:20
I have a a slide here for you. Let me show you.
1:02:23
This was his master plan for a seed deck.
1:02:25
"We're going to grow by building tools for signing up teachers and students.
1:02:29
We're going to build a simple network and an AI-assisted interface that blurs the distinction between learning and building.
1:02:32
And eventually we'll become a platform people come to learn how to code, code, explore, and host their code."
1:02:38
Um, this is exactly what they've done.
1:02:40
It's like the Tesla master plan 10 years later. This is his master plan.
1:02:43
10 years later they've done exactly this.
1:02:45
The company's 10 years old now?
1:02:47
More than 10 years old, basically.
1:02:47
He I think he started this stuff like before 2014.
1:02:50
And so, but it was again, it was a side project for a long time.
1:02:53
Only became like a full-time project.
1:02:54
And there's like he shared the email like, "Hey, got rejected again from YC."
1:02:59
Um, and he's emailing Christina, who was his first investor.
1:03:03
Christina is the founder of Vanta, another company I was going to put on this list.
1:03:06
She wrote the first check into Replit, um, as a scout.
1:03:08
And, uh, Vanta is a company that, you know, in 5 years has reached $100 million.
1:03:13
She went through YC, but the way she did it was she just YOLO'd it.
1:03:17
She just like moved to a city.
1:03:18
And he he writes this email to Christina, he's like, "Got rejected again.
1:03:21
Hard to raise money right now.
1:03:23
I might just YOLO, just move somewhere low cost and just start building this thing.
1:03:26
Um, that's that maybe was what I'll do."
1:03:29
And so, look at this chart now.
1:03:29
So, this is Replit developers year over year.
1:03:34
It's literally like a perfect hockey stick.
1:03:36
And Paul Graham posted this and he's like, "The crazy thing about this is that this is a this is an impressive chart for any company, let alone a company where the users are developers.
1:03:46
Meaning all of these developers are going to build things that they has their own user base. That is crazy.
1:03:49
Um, and so, this is the growth.
1:03:53
So, back when we did this in 2021, we were here. And now we're here.
1:03:59
How many developers are there?
1:04:03
Uh, so GitHub has about 100 million users. Wow. Wow. Wow. Wow.
1:04:06
By the way, GitHub, some crazy stats on my research of GitHub.
1:04:10
GitHub is used by 90% of the Fortune 500.
1:04:12
It probably has like the most enterprise penetration of anything besides Microsoft Office.
1:04:18
Um, like Salesforce is 80%.
1:04:18
GitHub is at 90%, which is pretty insane. uh, get sold for?
1:04:24
So, GitHub sold back in 2018 for 7 and 1/2 billion dollars.
1:04:28
And at the time they were doing about 250 to 300 million in revenue.
1:04:30
GitHub now does about two is about a $2 billion run rate.
1:04:35
And by the way, the fastest-growing feature, the thing that makes up 40% of the growth of GitHub's revenue growth, is Copilot.
1:04:41
Is the AI-assisted coder that now does, you know, a few hundred million a year in revenue already after, you know, just a couple years, profitably.
1:04:50
And so, that is the most successful, you know, AI uh, implementation in any in any company so far is GitHub's Copilot. dislike this guy. Is he aggressive?
1:05:00
A lot of people dislike this guy. Is he aggressive?
1:05:05
Well, he said something which is just like, you know, uh, Hacker News is, you know, when you're the underdog, they love you.
1:05:10
And then as soon as they hear your big funding round, they they go and they just say how terrible you are.
1:05:15
There's also there's there's, you know, whatever.
1:05:16
There's people every- I actually included, uh, this is part of my bull case is they got the kiss of death. Yeah.
1:05:22
So, it says they raised this money and then here comes this guy, Beef Findman, who says, "This is another company I felt was going to implode.
1:05:27
They don't do anything that's that's interesting, let alone proprietary.
1:05:31
Uh, the CEO is an ass and everybody knows it.
1:05:32
He acts as if a browser a browser Replit is going to change the world.
1:05:35
I've no idea how their valuation is so lofty, but the core technology is so easily duplicated.
1:05:39
Yeah, go go ahead, go try it."
1:05:42
Um, since the uh, since the heavy lifting they lifting they used to do has become obsolete.
1:05:46
So, classic hack- you know, go read the the launch of Dropbox and Airbnb and other companies like this.
1:05:52
This is like, uh, you know, there's always one of these comments at the top of their their their post that that you want to frame. So, check this out. This is the AI growth.
1:06:00
So, the the thing the criticism of Replit would have been, "Great, you're getting a bunch of developers, but they're all young.
1:06:05
And how are you going to make money off of students and teachers?"
1:06:08
And I think the the misunderstood part of this, right?
1:06:13
Because if you want to find something at a low valuation, it's not that low valuation is just another way of saying misunderstood and mispriced.
1:06:20
So, what what it would be misunderstood here?
1:06:22
What what would you need to believe?
1:06:24
The you need to believe is that this is a leapfrog technology.
1:06:26
So, like I don't know if you've ever seen those graphs of like in Africa, it's like landlines.
1:06:32
Like landline adoption of mobile of phones in in your home was like really, really low.
1:06:36
Or bank accounts was really, really low.
1:06:38
It was like, you know, some, I don't know, 10% of the population had bank accounts and land- landline phones.
1:06:44
But then, and so you would think, "Oh, if this is linear, you start with a landline phone, then you get a cell phone."
1:06:49
Or you start with a bank account, then you start getting, uh, mobile pay like Venmo or whatever.
1:06:51
Um, actually those are easier to adopt and cuz they're on your phone, they're quicker, they're lightweight.
1:06:57
And so, cell phones and mobile payments became this like huge adoption.
1:07:00
And Africa actually has a higher rate of mobile payments than America.
1:07:03
It has a higher rate of cell phone adoption than America did at the time because it was a leapfrog technology.
1:07:08
It was easier to adopt the smaller thing, the the newer thing, than it was to adopt the old thing.
1:07:15
And so, um, one of the things that Amjad said that I really liked, he goes, um, you know, people will all the criticism of Replit is, "Great, beginner.
1:07:24
People use Replit cuz they learn how to code and it's just really easy to get started."
1:07:28
And the criticism is that like, "You're not going to get like big developers to switch, you know, you know, 20-year vets to switch to to Replit."
1:07:35
Replit." And he goes, "That the better question is, if I have 20 million, uh, you know, sort of earlier on in their in their coding career coders right now, and this is a place where they can get started with no friction, build in any language that they want, they have AI
1:07:50
Copilot built in, they can host it, they don't need to know how to set up their servers, and there's a community of other people that they can like, you know, borrow code from and share from and and answer questions with, why would they ever switch?" Like you're
1:07:59
Like you're saying people will never switch from that to this.
1:08:03
like These people will never switch back to oh, actually go make your life harder.
1:08:07
What did you, uh, what valuation did you invest in?
1:08:11
I think like 900 million.
1:08:11
Um, How did you meet him?
1:08:16
I've never met him in person.
1:08:16
This is a company I kind of admired.
1:08:17
I used it and I went, you know, just looked at him and read about it.
1:08:23
And it just immediately was it it ticked my boxes.
1:08:26
Uh, so by the way, this is kind of interesting.
1:08:27
So, JetBrains, which is another one of these like the the probably the most popular coding, uh, environment for like Java developers, it's a bootstrapped company that does 270 million in revenue, 100 million in profit, 134 million a year in free cash flow with 6 million users, um, $0 raised since it started in in the year 2000.
1:08:50
And so, like I think, you know, when you look at what is Replit's revenue potential, I think it's it's a lot bigger than this cuz this has multiple things.
1:08:56
So, What do you think they're worth right now?
1:09:00
What What is Replit worth?
1:09:00
What do you think they're worth today?
1:09:03
Well, their last valuation was 1. 1 billion.
1:09:05
I know, but what do you think is like, if they were to raise again, it would be, uh, at what valuation?
1:09:10
You couldn't buy my stock.
1:09:12
You'd have to pay you'd have to pay it like a $50 million valuation to take my stock right now.
1:09:15
Like I would rather just hold the stock and see where it goes. Why?
1:09:18
Because you're looking ultimately in in tech investing for giant winners.
1:09:21
Uh, I think a VC once he told me, he's like, "Everyone's talking to talk I want Godzilla."
1:09:26
He's like, "Basically a Godzilla company."
1:09:27
He said, you know, a company that becomes worth 50 to 100 billion plus.
1:09:31
And he's like, "Those are the ones that make your career."
1:09:32
And so, I was like, "Cool. Cool branding."
1:09:34
Um he But But what do those companies have? Network effects.
1:09:39
So, this is a network effect business where it's a network of developers.
1:09:45
It's growing like a staff infection at spring break.
1:09:46
So, it's growing really fast.
1:09:48
Like, since the last time we did this Saras list, it's grown 4x in terms of the number of developers who signed up for it.
1:09:53
You called the founder and you're like, "Looks like you got a real ring room on your hands. Congrats, dude." Exactly.
1:09:57
Like I think it's mispriced and misunderstood.
1:10:01
I think it gets discounted for being just something for beginner coders when I think actually it's like a Snapchat or whatever.
1:10:06
It's It's a product where that's the generation you want is the people who are going to be using this thing for the next, you know, 20, 30 years.
1:10:15
Uh it's riding a huge tech wave in that like uh it is perfectly positioned to uh ride the AI wave because AI programming is a thing.
1:10:23
Yesterday, Sergey Sergey Brin was at the All-in Conference Yeah, I code with AI.
1:10:28
Like he's like he's like, "Yeah, I got back into coding. I I use AI.
1:10:31
Basically, I just kind of tell the AI what to do."
1:10:33
It's like, "Dude, the founder of Google is like, "Yeah, I wanted to build this thing, but I just it's easier actually just for me to just tell AI to do it and it kind of wrote all the code for me. It was awesome."
1:10:41
He's like, "Then I showed it to my team at the like Google like AI thing."
1:10:45
He's like He's like, "I told them I said, more of you need to be using this."
1:10:48
And he's talking to like the top programmers in Google.
1:10:52
Um uh which is kind of amazing. Dude, this is awesome.
1:10:55
I think you got to ask this guy out for prom. I think I just did. I think you just did.
1:11:00
It's just like you asking Taylor Swift, you know, like someone to This is um you've convinced me. What's the downside?
1:11:11
I mean, what what is the downside? Uh let's see.
1:11:14
you had that for every company.
1:11:14
That they're not going to be able to make as much revenue as you think that people will graduate off of Replit and decide that remote?
1:11:22
Are they a remote company?
1:11:24
No, actually another another Sam bull signal. They're not remote.
1:11:26
And not only that, they moved from SF to Foster City to like build their own cult there.
1:11:31
And he's like, "Why wouldn't we?
1:11:32
Why wouldn't we move 40 40 minutes out and uh just make be like the kings of this little area and have like the best the best environment without the problems of San Francisco, but still being in still being close enough to the talent density."
1:11:46
I think that um you used all of this great logic and all these silly arguments and all these numbers and facts and data.
1:11:55
You should have just told me that he wants to build a a commune in Foster City and I would have been I would have been on board. And he deadlifts. You like that? I know you like that. Does he really deadlift?
1:12:05
Yeah, he's a powerlifter.
1:12:05
Yeah, I mean, powerlifter power gains. Like it makes sense.
1:12:09
I think my my simpleton strategy can almost be as effective as yours.
1:12:13
If you look at the our last um our last lives would say yes, it does. Right? Yeah. Like yeah.
1:12:23
Uh There's no knock on that.
1:12:23
I I strive to be more like you.
1:12:25
I think you you have it right.
1:12:28
No, but I'm only teasing.
1:12:28
It's part of me is being simpleton just because I literally don't understand that.
1:12:31
Like when you're explaining that to me, I'm like I have to learn what all this means as we go.
1:12:37
Um Yeah, that's It's complicated.
1:12:39
Let me tell you the story about Dude, these guys are geniuses, by the way. These guys are geniuses.
1:12:42
To like and be able to invent things like this, I just think I just like I'm like we're not the same.
1:12:49
Well, I wrote two words that I would almost never write in a to slide deck.
1:12:51
I wrote mission driven and visionary for Replit. And those are so cringe.
1:12:56
You can't You're not even really allowed to say those unless there's an exception, which is this dude from Jordan who was like, "God, I really want to increase access to it for kids like me."
1:13:06
Built this as a side project when there was no money on the line.
1:13:11
There was nothing for years.
1:13:13
Just kept kept tinkering away building it, building it, building it.
1:13:15
Um in his master plan from 10 years ago in the seed deck was talking about how he's going to have an AI assistant in your coding terminal that's going to help you write the code.
1:13:23
Um and did exactly what he wrote, you know, 10 plus years ago.
1:13:29
That is mission driven and that is visionary to me.
1:13:30
Well, mission driven being into mission driven and and visionary stuff, that's only cringe when it's not true.
1:13:38
When it's true, it's awesome.
1:13:38
Well, it's cuz it Yeah, cuz it gets abused, right?
1:13:41
It gets It's like gets used and abused by everybody.
1:13:43
There's no like there's no um there's no earning that badge, right?
1:13:48
You just get to use it if you want, which bastardizes it.
1:13:49
But like, you know, you look at something like Neuralink or whatever.
1:13:53
Um and you got to give credit to these people.
1:13:55
Like, you know, when there's there's videos of Elon talking like, you know, decades ago about the four or five like most important things to do.
1:14:03
And he's like, you know, the the advent of the internet, you know, uh creating clean, you know, sustainable energy future, uh creating artificial general intelligence safely.
1:14:12
He literally was saying these things for for so long.
1:14:15
need to be mission driven and a visionary on world-changing things to be intoxicating.
1:14:18
Like that that makes it awesome, but you can like if I meet someone who's into something uh like relatively trivial and they're they're passionate about it, I still I get like turned on. You know what I mean? 100%.
1:14:30
Dude, the Nick Gray episode.
1:14:30
It's like this guy his his rockets to Mars is like the 2-hour cocktail party, right?
1:14:37
It is helping people toot their harmonica and have a good time for 2 hours and much strangers make some friends.
1:14:43
And he is more into that than anybody I know than uh than probably anybody that there is.
1:14:51
Uh he wrote a book about the thing, for God's sake.
1:14:52
And then on top of it even though I literally don't want to do that.
1:14:56
Like I would hate if I had to host one of those things.
1:15:01
I love being around Nick because that energy is so, like you said, intoxicating.
1:15:04
It's the perfect word for it.
1:15:06
Yeah, when I um and so when I see a guy like this Replit thing, I'm like, I don't really care about any of that stuff, but I care that you called your shot and I'm into it.
1:15:11
During COVID, when we all had to work from home, I got to hear Brian Chesky give these like monthly or weekly meetings.
1:15:17
And he was like in his bedroom and he looked horrible.
1:15:21
He looked like because like his business was like on top of the world and then it's like, I don't know if we're going to be in business and I have like 3,000 employees and like travel is literally the worst thing on earth. Like Airbnb is paused.
1:15:35
And I remember seeing his talks and I thought like, dude, I will I want to fight for this guy.
1:15:40
Like if if I was on his team, he has got me bought in.
1:15:45
And that And so my point being is that mission driven and visionary attitude that is actually really important when it comes to the value how valuable a startup can get.
1:15:58
Uh I think it is if you're making your bet, which is what we talked about.
1:16:02
Basically, take taking your time and your talents and betting on one company.
1:16:04
A super concentrated portfolio where you're going to in you basically you're getting a 100 to 200,000 dollar bet that you get to make on a company when you when you take a job at one of these tech companies.
1:16:15
You might as well bet on the most talented, most driven, you know, mission-oriented, sees the future more than anybody else type of founder because it's their decisions that are going to trickle down.
1:16:25
Um I remember I made a Ethereum and Ethereum is probably one of the best investments I ever made and I made it more on the Sam criteria.
1:16:32
I was like this gangly ultra nerd who's saying words that I barely understand This founder's got the thinnest neck I've ever seen. I'm in.
1:16:40
And everything I read about the I was like, so at like 16, he's like or whatever, 18, he's writing articles for Bitcoin magazine cuz he was so enthusiastic about it.
1:16:51
And he was getting paid four Bitcoin, which at the time was like 12 dollars per article.
1:16:58
And that's kind of like how he, you know, he is he's truly like of this.
1:17:00
He didn't come when it was time to get rich. He was there before.
1:17:04
And then I remember when Ethereum hit an all-time high and everybody on Twitter was basically like Lambos and yachts and they were like pumping their bags.
1:17:14
He posted a Twitter thread that was like, "Hey, this is great, but like how many of the unbanked have we banked?
1:17:20
How many people have we actually helped?
1:17:22
How much of the mission are we actually doing?
1:17:23
Like, yeah, the price went up, but who gives a And that is, you know, the best founders do that.
1:17:30
When morale is low, like the Brian Chesky example, they give you that confi- They never let you get that low. They like bring you up.
1:17:35
And when hype is high, they bring you back down to reality of like, "What are we here to do?"
1:17:41
And that I when I saw that and I was like, this guy is Crypto is full of potential, but it's full of pumpers.
1:17:50
It's full of, you know, people who are going to take advantage of this.
1:17:53
I at least trusted that the person who was stewarding that project was not you know, to use bachelor terms, they were here for the right reasons.
1:18:00
Vitalik is here for the right reasons.
1:18:02
He was there to actually, you know, like help humanity and build build a free economic system. To use what terms? The bachelor.
1:18:11
You You don't You don't know that that every contestant I play sports.
1:18:13
I don't I don't watch bachelor.
1:18:17
You're like, "I have triceps and biceps."
1:18:22
Like two levels are over 300, so I don't understand Tell you the difference between a barbell or a dumbbell bench press and why why each is good.
1:18:27
You could tell me all about the Golden Bachelor. Yes, I can. You're absolutely right. Priorities.
1:18:36
Um all right, that's the pod. That was good. Thank you, Sean. Thank you, Ari.
1:18:41
Thank you to everyone listening.