0:00
[music] >> I see multiple journalists on the We're surrounded by journalists. Hold your position.
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>> [music] >> Overnight success.
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The blades are extremely loud. Double blades. Right.
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We're surrounded by journalists.
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>> [music] >> That's misinformation.
0:59
Marking clearing order inbound. That's just wrong.
1:09
We're surrounded by journalists. Hold your position. Com, get up.
1:18
That's the expert system. Fire code. Linear or expert. Founder known. Fire code.
1:42
I see multiple journalists on the horizon. Stand by.
1:48
>> [music] >> Expert system. UAV online. Blades. Double blades.
2:06
>> [music] >> Triple blades. Double kill. Fire code. Wrong. Com, get up. Blades.
2:40
>> [music] >> Team deathmatch. Linear or expert. Triple blades.
2:58
That's [music] just wrong. Right.
3:06
Marking clearing order inbound. Com, [music] get up.
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We're surrounded by journalists.
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[music] Hold your position. Strike one.
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>> [music] >> Strike two.
3:43
Activate Google retriever mode.
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>> [music] >> Triple blades. Expert system.
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Marking clearing order inbound. UAV online. Fire code. Expert system.
4:18
I see multiple journalists on the horizon. Stand by. Founder known. You're watching TVP.
4:34
Today is Thursday, March 26th.
4:40
We are live from the TVP ultra dome.
4:40
The tablet technology to finance >> capital of capital.
4:44
Let me tell you about ramp. com.
4:45
Time is money, save both.
4:47
Easy to use corporate cards, bill pay, accounting, and a whole lot more.
4:50
Let me also pull up the linear lineup because we have a monster show.
4:55
>> Jordy's back in the TVP ultra dome. I know you missed him.
4:57
Uh we have Eric Goldman coming on to help bring down the meta YouTube lawsuit.
5:00
We're going to talk >> yesterday was the first time we've been live that I was not on the air.
5:04
And so I was watching Watching the show. How did I do?
5:08
Uh here, we can drop the linear lineup.
5:10
Linear, of course, is the system for minor software development.
5:11
70% of enterprise work spaces on linear using agents. Uh give me a review. How did I do?
5:17
Uh I thought you did fantastic.
5:18
I was texting you in real time.
5:20
I probably sent you like 20 something messages of like ask ask about this, ask about that.
5:25
>> It was Yeah, somebody in the chat said that I was I was free soloing TVP.
5:30
>> [laughter] >> And then it was great.
5:30
But we really wore down to our last few uh few associates here. Tyler was out. Jordy was out.
5:37
Uh who else Yeah, Nick was out.
5:39
We we had We were on a What do they call it?
5:42
A shoe string or something like that? I don't know. But uh it worked out. It was a fun show.
5:46
Uh it's not the same show without the soundboard.
5:50
I was going to do this whole bit about like, "Oh yeah, I got it dialed.
5:54
You can just We don't need you on the show anymore."
5:56
And then of course the fans would be like, "No, bring back Jordy."
5:59
And I go, "Yeah, okay, he's back."
6:00
Uh but I can't even joke about it because we need the soundboard. I only got two buttons. >> is amazing.
6:06
>> [screaming] >> It really is >> [laughter] >> Imagine if you were just I was waiting for you to just be spamming that.
6:11
Just sitting there having a serious interview.
6:14
Uh apparently we have some audio issues.
6:16
>> Okay, we will work Bear with us. We're working on it.
6:18
But I can go through I can go through a bit of our guest lineup today.
6:22
We have Nima >> friend of mine.
6:24
Uh he is a founder of Salt and Stone.
6:27
They >> Uh recently uh exited the business as of this week.
6:32
A massive, you know, multi hundred million dollar deal.
6:37
Very excited to um get to understand the business better.
6:42
We have John McNeal coming on.
6:42
He's an author to talk about Elon Musk's five-step algorithm for scaling Tesla.
6:49
Uh then we have Carrie from Linear on how Linear is evolving in the AI age.
6:54
And then we have a bunch of different founders including Mikey from Suno uh coming on to do that. >> back-to-back Zacks.
7:02
Zack Canter, Zack Perret.
7:05
Going back-to-back Zacks.
7:05
That's what I like to see.
7:07
Uh well, the big news of the day of the week.
7:09
This has been going on all week is that ARM, the intellectual property developer that creates uh intellectual property designs for CPUs, is now getting into the chip game.
7:22
And they got a big ARM pump in the stock market.
7:25
So, um the company is up uh 15% over the last few days on the news that they will sell their own chips. This is new for ARM.
7:34
ARM is a very old company. Uh fascinating history.
7:36
I actually made a 25-minute YouTube video all about the history of the company uh back in 2023.
7:44
Um but we'll recap a little bit of it today.
7:47
Uh but uh they normally just license out their intellectual property.
7:49
And that is a phenomenal business. 97% gross margins. 97% gross margins.
7:57
>> Yeah, let's give it up. Let's give it >> go. That's amazing.
8:00
Um and you know, it's a big business.
8:01
4 billion in revenue last year, nearly 800 million of net income.
8:05
Uh they're this new move, they're expecting to ramp revenue uh to 15 billion dollars by 2031.
8:11
So, they're expanding the market significantly.
8:16
Now, margins will be different.
8:17
Uh but the market cap for ARM is now around 166 billion dollars. So, it's a big company.
8:23
Uh trades at a very high high multiple.
8:26
>> last year currently trading at 165 billion.
8:29
But very very high gross margins.
8:31
Uh so, this is a big shift in uh strategy.
8:34
ARM's not an AI loser by any means, but it hasn't gotten the attention that other GPU makers have received like Nvidia.
8:40
Uh CPUs are far from dead though.
8:43
In fact, we are in We are currently in what seems like a little bit of a CPU crunch.
8:47
Intel can't make its CPUs fast enough.
8:50
Nvidia is starting to sell their Grace CPU that goes with their Hopper.
8:56
So, you get the H100 and you pair it with the Grace CPU.
9:01
You get the GPU and the CPU all on one system.
9:03
Well, now you can buy the CPU by itself if your CPU constrained.
9:05
So, you don't want to just be GPU rich and CPU poor.
9:09
You got to be rich in both camps.
9:13
And a lot of companies are jumping in to fill this gap.
9:14
So, um agents and a lot of this is because of agents. Agents need CPUs.
9:19
You need to fill the GPUs constantly with new data and tasks.
9:24
Also, all of the agents use CPUs to make web queries, search the web, run Python, spin up web servers, interact with anything.
9:33
Uh we've just seen, you know, we talked to some folks at SemiAnalysis about this like uptime is going down for non-GPU accelerated workloads.
9:41
Like you go to a SaaS product that is basically just a web server that's running on a CPU somewhere in a data center and you're like, "Uh this thing isn't loading today."
9:50
Or like the there's downtime.
9:52
And a lot of that's just because we're writing more software.
9:55
We're using more software as a society, as a country, and we need more CPUs as well as GPUs, even though GPUs are like the the hot thing to talk about.
10:02
So, ARM has a very interesting backstory.
10:06
Um as I mentioned, you can go watch my 20-minute 25-minute YouTube video about it to go all the way back and this all the precursor companies.
10:13
Uh it's a really long story, but you can think about it basically as a joint venture between three groups, uh Apple, Acorn Computer, and VLSI.
10:22
Uh and so they needed to design a low-power CPU for mobile devices.
10:28
Before phones, you know what was hot, Jordy? PDAs.
10:32
And have you ever seen a PDA, Tyler? No. You've never seen a PDA? I I don't think so.
10:39
>> Okay, so before the iPhone, you know, everyone had flip phones, but before that >> It's not a pager.
10:44
You don't know what this is, either? No. Wow.
10:46
So, there's something called a Palm Pilot, and basically it was uh it was like a like a, you know, iPhone-size screen, and it has stylus, and you could write on it, and you could make notes, and PDA stood for personal digital assistant.
11:02
And I feel like that brand is just itching to come back in 2026.
11:07
Like that's what so many people are >> Everyone is working on a PDA.
11:09
Yeah, personal super intelligence assistant.
11:14
There's a whole bunch of things.
11:14
We're building PDAs, folks.
11:15
Uh they just live in the cloud, and it's not a physical device.
11:19
But these PDAs back in the '90s were physical devices.
11:22
This was post-pager, pre-smartphone, and it was the it was the device that you carried to take notes and do things that you would do today in apps, you would do on your PDA.
11:33
But it wasn't always-on, internet-connected, none of that.
11:35
It was uh it was it was a Palm Pilot, and this was like a fantastic business for a while.
11:41
But there were a lot of problems with this because for the first time you needed a CPU that could live within a plastic like shell, basically.
11:48
These were like, you know, plastic enclosures.
11:53
Needed to run on a battery.
11:53
It needed to be we needed needed to be able to do some things, not crazy compute.
11:56
But the CPU industry in the '90s was very focused on mainframes, servers, desktops.
12:04
There were a few laptops popping up, but there was not the mobile phone revolution that's happening now, where you have Apple silicon chips, and those are of course based on ARM architecture.
12:13
But that's where all this came from.
12:15
They people said, "Okay, we need a lower-power chip that can actually run off a battery, not overheat and melt the plastic, do all of this."
12:22
And it's can be somebody can be can power a device that you carry with you as a personal digital assistant, a PDA.
12:28
And so Chicken in the chat says PayPal started on PDAs. >> That's right. That's right.
12:33
So, PayPal started originally the idea was these PDAs had they didn't have like tap to pay or anything like that, RFID.
12:41
They had basically the same device that you'd see on a TV remote. So, IR.
12:47
Uh and it would flash a light that could be seen by another sensor.
12:52
And if you flash the light at a certain rate, you can send a message.
12:57
You can basically it's like advanced What's What's that SOS thing? It's Morse code.
13:01
It's like a more advanced version of Morse code.
13:03
And so you could send a specific packet of information from PDA to PDA, and this was the original idea for PayPal. That's correct.
13:11
That's a great great piece of lore, tech lore.
13:14
So um the So, [clears throat] you know, you ARM starts to, you know, build these.
13:22
Later, there's Robin Saxby, who was the CEO of ARM at the time.
13:28
He wanted ARM to become the global standard for CPUs.
13:30
And so in the '90s there were lots of different CPU makers, lots of different architectures.
13:34
There's this whole CISC versus RISC debate.
13:37
There's the x86 architecture that that Intel pioneers.
13:41
And slight differences in architectures can limit interoperability.
13:43
You see this with what's going on with Mac, where a whole bunch of applications have been needed to be rewritten for Apple silicon because previously you would have an Intel Mac before we got to the M1, M2, M3, M4, M5 chips. Those are Apple silicon. Those are ARM-based.
14:01
And sometimes you'll go to a website and be like, "Oh, do you want to download this for a Mac? Like what do you have?
14:05
Do you have an Intel Mac or do you have an Apple silicon Mac?"
14:08
Well, it's important because when you write the software that runs on the Mac, you need to use specific instruction sets.
14:15
Now, there are ways to abstract that and run on either, but there are lots of pieces of software that interact with the CPU at a low enough level that they need to be aware of the instruction set.
14:25
So, ARM sets out to be the global standard for CPUs, and they create the ISA, the instruction set architecture.
14:34
And that ultimately let Apple design their own chips, but within the architectural guidelines set forth by ARM.
14:40
So, Apple pays a license for to ARM for every chip Apple sells.
14:45
It's a very small license fee because Apple does a lot of design work.
14:49
They do the manufacturing.
14:49
TSMC fabs it, and like there's a million other pieces of the value chain.
14:53
But for this one little slice, they have to pay ARM, and ARM just takes that and says, "Thanks. Like cool.
15:00
Like >> [laughter] >> you use our intellectual property successfully."
15:02
You know who else says thanks? >> Who? Masayoshi Son. That's true.
15:04
Because they own 90% roughly 90% of the company.
15:11
It was a full buyout in 2016.
15:11
They bought the entire company for um something around 25, 30 billion US USD by the entire company.
15:20
They still own 90% uh today.
15:23
So, their their like SoftBank's holdings just in that one company are somewhere in the range of 140 billion It's great.
15:36
>> when I was looking at.
15:37
>> It's the second time he's made 100 billion.
15:41
Well, and they've massively [snorts] levered up against that position.
15:44
They've used They've um >> [clears throat] >> they've raised uh debt against uh their holdings in ARM.
15:49
But certainly Masa's somewhere out in the world seeing it go up 15% just >> Happy.
15:56
smashing a gong somewhere. >> so. I hope so.
15:58
Um And although everyone knows Apple, my my my clickbait for my YouTube video was like, "Did you know the iPhone is secretly British?"
16:08
I think it's funny because it uses ARM deep inside.
16:10
But ARM licenses to a ton of different tech companies.
16:14
So, Amazon uses ARM for the Graviton chips.
16:17
A lot of Android phone makers have ARM-based chips.
16:22
Tons of other tech companies license ARM's technology to build chips.
16:26
But now ARM is going to be making the chips themselves, and they're going to be working with Meta Platforms and OpenAI.
16:33
This is means a shift in the economics of the business.
16:34
So, 97% gross margins for just those licensing ISA contracts.
16:39
Um this will be closer to 50%.
16:39
But but it is should be offset by the huge gains in market size and revenue potential.
16:46
So, the company has one of the highest multiples in semiconductors, roughly 90 times forward earnings.
16:52
So, there's lots to live up to, but there's a lot of value coming from AI agents that have access to plentiful CPU resources.
16:58
The industry dynamics are also particularly interesting.
17:00
Ben Thompson pointed this out in Stratechery.
17:02
Um So, Nvidia sells an ARM-based CPU, that Grace CPU.
17:07
Uh and so they're Nvidia is sort of competing with ARM.
17:12
Jensen showed up and gave like a remote talk at this ARM event where they announced this chip.
17:17
Um and so they're competing, but they're also in some ways working together because they're challenging x86 options from Intel and AMD that are still really popular.
17:26
And so if Intel's constrained, it's like they're like if Nvidia sells a bunch of chips for you know, AI workloads, well then that actually makes ARM more likely to sell their chips as well because whatever software is built for the Nvidia ARM-based chips will probably run on the ARM ARM-based chips.
17:46
So, there's some sort of like integration there.
17:48
And the x86 moat is not as strong as the CUDA moat, but there's still this like dynamic of of Nvidia and ARM are going up against Intel and AMD in the same way that uh that different GPU makers are going up against the CUDA moat.
18:05
So, there's like this all these different interactions there.
18:09
Um but it'll all be interesting to uh to to follow. Let's let's move on.
18:15
The big news that drove this was of course Meta engineering at Meta.
18:18
"Today we're announcing a new partnership with ARM to collaborate on the development of multiple generations of purpose-built CPUs to support compute and AI infrastructure."
18:26
ARM called it the ARM AGI CPU. What a great name. We love it.
18:32
Let me tell you about Labelbox.
18:32
RL environments, voice robotics, data evals, expert human data.
18:35
Labelbox is the data factory behind the world's leading AI teams.
18:39
And let me also tell you about Sentry.
18:41
Sentry shows developers what's broken and helps them fix it fast.
18:44
That's why 150,000 organizations use it to keep their apps working.
18:48
So uh The The Wall Street Journal has another good write-up of this story uh talking about how this the timing is good.
18:55
It is there is a boom in CPUs right now, but uh the stock is already priced very highly, and uh everything has to go um perfectly because it's it trades at one of the highest multiples of all the semiconductor companies.
19:09
So, um what else is going on in the timeline?
19:14
Well, let's talk about this data center moratorium bill. >> Yes.
19:18
>> Uh I wrote in the newsletter today yesterday, Senator Bernie Sanders and AOC introduced a new bill, the AI Data Center Moratorium Act of 2026 that if enacted would require all current and planned data centers to halt construction {slash} production.
19:29
It even it would even block upgrading existing data centers.
19:35
So, if you have an asset and you want to make changes to it in theory as as this bill is written today, it would be blocked.
19:42
Uh they um uh they sort of like define data centers based on power demands, uh cooling capabilities, like how much power you can get to each individual rack.
19:55
So, they have been fairly specific, but trying to be like very specific.
20:00
>> I was thinking I was fine with this.
20:00
I was thinking like I don't need any more AI data centers at this point.
20:03
We can just freeze those.
20:04
I just want to build AGI data centers and ASI data centers.
20:09
And so, as long as I can just build tons of those, like it should be fine, but it is interesting that they they seem to have figured out the semantic loopholes that might happen if it's defined as Yeah, the bill would halt all new new data center construction and upgrades until more legislation is put in place to guarantee the following.
20:25
And these will be tough to guarantee.
20:30
So, from Sanders site, they want AI to be safe and effective, preventing executives in the AI industry from releasing harmful products into the world that threaten the health and well-being of working families, our privacy and civil rights, and the future of humanity.
20:44
The economic gains of AI and robotics will benefit workers, not just the wealthy owners of big tech.
20:51
And AI does not increase electricity or utility prices, harm communities, or destroy the environment.
20:55
So, anyway >> seems good.
20:58
Yeah, all all generally good, but >> unsafe and ineffective AI.
21:02
Well, yeah, and and the bigger problem is is anytime you're creating We I don't think we've created a technology ever that didn't have some downside.
21:16
>> And so >> I'm sure this will be rewritten and debated, and obviously it has a long way to go before becoming law, but the this set of requirements seems completely impossible to to to actually achieve.
21:33
>> on how you define how you define it.
21:33
I mean, AI does not increase electricity or utility prices.
21:38
Like the ratepayer protection pledge and behind the meter stuff could I'm more I'm more talking about I'm more talking about number one.
21:45
Number one, safe and effective.
21:49
I mean, it's it's it's it's it's all in how you define that.
21:52
Like some of the some of the parental controls are a good example of like how to take that that overarching thesis and then boil it down into something tractable.
22:03
And when I hear that, I think like, "Oh, like I don't know how we are defining safe.
22:07
I don't know how we're defining effective."
22:09
Like this feels like this could be like some sort of very vague thing where like if the government if one particular administration likes this company, they just approve it or not or whatever. Yeah.
22:19
But then when we actually talk to lawmakers and you hear something like like, "Oh, yeah, we're going to, you know, require parental controls.
22:26
So, if your if your offspring has a you know, an AI account, you can say, 'Hey, like they are this age, don't show them anything that's inappropriate for that age.' That seems good. Yeah. So, yeah, I don't know.
22:41
>> Overall, at least this this first bullet point, preventing executives in the AI industry from releasing harmful products in in the world Yeah.
22:48
that feels like that you could end up having something like an FDA that's like every product you create needs to go through years of of studies in order in order for the government.
23:01
And it's like, "Hey, I just wanted to create like a slightly more AI native version of this SaaS tool. Yeah.
23:06
Do I really [laughter] I just want to make SaaS.
23:10
I just want to make SaaS.
23:12
>> Yeah, at the same time, like the like the the bull case, I mean, I I I think we're I think the FDA model would really slow things down based on how long the FDA takes to approve things.
23:21
At the same time, what is the definition of harmful here?
23:26
Is it net harmful products?
23:26
Because that is the goal of the FDA.
23:29
They release drugs all the time that have side effects.
23:32
You take this, it cures your cancer, but it's going to make you throw up or it's going to make you lose your hair.
23:36
And people are like, "Yeah, I'll take that I'll take that trade."
23:37
And so, you know, if you if you went through the government and you said, "Okay, yeah, I'm going to give you this tool that can like write code, but sometimes it's going to hallucinate and like you might get a code you might get some code that doesn't pass tests."
23:48
I'd be like, "Yeah, okay, like it speeds me up on on average, I'm I'm in." Like that's fine.
23:54
And having some of those disclosures and it's the same thing with knowledge retrieval.
23:57
Like I I I do a deep research report, I get something that's 99% of the way there.
24:01
Maybe there's something in there that's like, "Oh, that's actually like misattributed or that number's I I know that that number's from this report online that was wrong and they and the model doesn't."
24:13
And so, I need to fact-check it.
24:14
Like I still see that as like net beneficial, but there are of course like like flaws in every system.
24:19
And so, you know, again, it's like where how does this get defined over time? That's like important.
24:25
One thing I noticed from the announcement was that they are using AI leaders' own statements against them.
24:32
And it's easy to see how this would resonate with their constituents. >> powerful.
24:36
So, they on Sanders' websites, he included this quote.
24:39
In December, Elon Musk, who leads xAI, said he had quote, "A lot of AI nightmares."
24:44
And would quote, "Certainly slow down AI and robotics if he could."
24:49
It's so interesting because Elon doesn't talk about that with like the rollout of electric cars or the rollout of of space travel.
24:57
He's not saying like, "Oh, yeah, like, you know, 2030 is too soon to get to Mars.
25:01
Like we need to we need to slow down on the on the race to the moon.
25:06
Like let's really figure out the the space suits first."
25:08
You know, he's like, "Let's just go." Yeah.
25:11
And then another one, in January, Demis, the head of Google's DeepMind, said he would support an AI pause if he knew other countries and companies also paused development.
25:19
In February, Dario Amodei, the head of Anthropic, said he was absolutely in favor of trying to slow down AI development if other countries also slowed Yeah. down.
25:27
That was Davos, I believe. January, February.
25:33
So, continuing I wrote, "But the problem, of course, is that there is zero movement on getting other countries to slow down.
25:38
I can imagine some companies that would be like >> There's already comments in the chat about like, "Yeah, let China win." Yeah.
25:45
I I'm not going to name the countries that would be [laughter] down to slow down, but I think we all know that that China, even if they agreed to something like this, wouldn't just automatically Yeah. do anything about it.
25:55
So, but the problem, of course, >> any countries that are like, "Yeah, we we definitely should so we're ready to slow down." Like we're France.
26:02
Well, I think if you're way behind if you're way behind, there's kind of a benefit, right? >> incentive.
26:08
Elon Elon had said, I think in 2023, that he supported like a 6-month pause. >> Yeah. Yeah.
26:13
And at that at that moment, that would have been awesome.
26:15
Because you hey, if I could just have 6 months to like get my get my thing >> I feel like if you pulled people in the south of France or the Amalfi Coast, like those folks would say we should just slow down generally.
26:28
Like AI, but also just slow down our lives. Enjoy a glass of wine. Hit the bars.
26:34
>> even like a summer break.
26:34
Like kind of like 4 weeks. >> Yeah.
26:37
Or even like during the work day, like taking a break, taking a nap, just taking just slowing down in general.
26:41
I think I think there's a lot of people that are just in favor of that.
26:43
But okay, Jordy, like if if you're saying like people who are behind should want to like slow down, like doesn't that mean that China should be more in favor of slowing down? That is interesting. That is interesting.
26:54
Well, I'm just saying I can imagine in the same way that like for as many chips as we give them, advanced GPUs as we give them, you can assume they're still going to put an immense amount of pressure to kind of stimulate the local semiconductor industry. >> Yeah.
27:12
In the same way here, I'm sure they would love for the United States to just pause all new data center construction.
27:18
And I think it's possible that they would like gen- generally say like, "Yeah, like this seems good."
27:23
But then what would they actually do?
27:26
They would just use that as an opportunity to Yeah. catch up, right?
27:30
>> So, my question is like, where does China actually stand on this?
27:33
I'd be very interested to know.
27:34
Maybe you could look it up.
27:37
Like has the Chinese Communist Party actually put out any statements about whether they want to accelerate or pause AI development?
27:43
Because there I think that they might refrain from taking that stance because it would discourage local like indigenous development.
27:55
Like if the government is coming out and saying like, "We want to slow down."
27:58
then a lot of entrepreneurs are going to be like, "Okay, I'll go back to e-commerce or I'll go back to manufacturing."
28:03
Like I'm not going to work on this cuz the government doesn't want me to.
28:06
And and so, I feel like there's this tug and like even though I agree with you, like it what we would be in their advantage to say, "Hey, we want to slow down.
28:15
Everyone should slow down. We're pro slow down."
28:18
If they actually said that, it would have an immediate slow down effect on the local AI progress. Does that make sense?
28:26
Yeah, like it would slow down Yeah, I mean Yeah, because even even if they even if they if they just take that stance because it's an authoritarian country.
28:34
Like there's like this like like the the Bernie Sanders comment stands in opposition to other politicians who are saying like, "No, actually things are going well and here's how we're going to, you know, like advance energy and build more."
28:44
And so, but if you don't have that and it comes down as like a dictate Uh or or you know, like this is the stance from the government, it's much harder for local entrepreneurs and local AI labs to like push back against that because it feels like they're all of a sudden in opposition to the government. I would imagine. I don't know.
29:01
I'm very interested to hear how China's actually reacting. >> Yeah, anyway.
29:04
So, so just to kind of finish my thought I all all these quotes, like Musk go extremely hard if if you're not kind of acknowledging the full picture, which is that AI leaders are saying, "Yeah, if you get other countries to agree to slow down, we'd be open to it." >> Yeah.
29:23
But that is like the big elephant in the room.
29:25
They don't mention any even conversations or dialogue with other countries around slowing down, and I don't think there's been any.
29:32
So, anyways, the act has a long way to go, and it seems like the odds of it getting to law are low, but not zero.
29:37
Safe to say that as written, the requirements in the bill would be an incredible gift to America's adversaries and catastrophic for overall AI progress. Yeah.
29:49
Uh could be popular though.
29:49
There are already some candidates who have you know made pausing AI or data center like like pausing data center build outs sort of like their main thing and it does seem to be getting traction.
30:02
I don't know how much of that's just on social media.
30:04
We'll see what how it shows up in the midterms but Sagar and Jeddi was tracking this for a long time like it is going to be a like a political stump speech that hits.
30:13
Like people are going to be like yeah I don't like this stuff.
30:15
>> Yeah, the the the question if anything like this were to become law, what what are the what are the effects of that, right? Space, right?
30:25
The space data center people Yeah.
30:27
are saying like Yeah, we were talking space data centers don't seem so silly now, uh taking that angle. >> Totally.
30:34
Although I'm sure they would also be like you can't put them up there either.
30:37
We're going to we're going to Yeah, I mean there's also there's also just like the globalization process that happened uh based around environmentalism in like the '90s WTO ascension for China.
30:49
Like the reason that a lot of the mining happened in China is because like we said like we don't want that here, right?
30:53
It's dirty, it's gross, there's chemicals, there's pollution and so like out of sight out of mind, let's push it abroad and we could do that again with data centers.
31:03
We could just be like they're all in Canada or Mexico or they're all in some you know Australia or New Zealand or like you know there there could be a receptive country out there that just says like we would love we are an ally now and we'd love to get all these data centers and then you have to ask the question of like what does that look like in 30 years?
31:20
>> centers generate a they they don't create a lot of jobs lately.
31:24
They create a meaningful amount of work during the development process and then they they continue to generate massive amounts of tax rev local tax revenue.
31:34
Yeah, I actually don't know how you tax the data center that we blocked Yeah.
31:38
in New Jersey was going to be generating like tens of millions of dollars of local taxes. That seems pretty good. Yeah.
31:45
Yeah, it seems like it's real estate or I mean yeah like one one medium ground here is like just tax that and then have and then use the tax revenue to internalize >> environmental concerns I think everybody should want to make sure that if we're investing hundreds of billions of dollars into these things that that we're not destroying our uh lovely mother earth. >> Yeah.
32:07
But uh and and the energy costs again real concern but we're making we're making progress there. So.
32:12
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32:25
Uh do we want to talk about lawsuit?
32:31
>> minor headline on the front page of the Wall Street Journal.
32:35
It says Meta YouTube found addictive, harmful.
32:39
It's like one of the hardest hitting headlines I've ever seen on the front of the Wall Street Journal.
32:44
For two companies that are usually relegated to the business and finance section, they made it to the front page because uh they were found guilty or you know uh by California jurors.
32:53
Uh California jurors say the tech companies designed their apps to cause injury to kids. Very very bad. Yeah.
33:01
But Brandon Gorrell had a take and a write up uh and some explanation of what's actually going on here and then we are of course having Eric Goldman from Santa Clara University come on and break it down for us in more detail.
33:14
Uh because there is a lot of debate about this uh and it's been very interesting uh watching it play out.
33:18
The total uh damages are uh I think 3 million each company roughly 6 million total and I had a friend who's a lawyer who texted me and sent me the number.
33:28
It was like hey, I'm predicting that it'll be like three three M and I didn't read the M and I was like okay, three billion. Like what'll I do?
33:36
This is not a big of a deal.
33:39
>> [laughter] >> And then it was three million and I was like that's extremely low compared to like the numbers that we normally see from big tech companies.
33:44
But this has much broader implications because this is precedent setting and there will be a flood of other cases.
33:52
>> like I did spend all of my free cash flow on data centers but if you give me another two seconds, I will have the I will have the cash flow to cover this.
34:02
So just give me like two seconds.
34:02
Yes, but it is it is a very important case even though this particular ruling is not changing the the cash flow structure of these businesses because it has a lot of ramifications and there's a lot more plaintiffs that are in the queue.
34:16
So this is what Brandon Gorrell wrote in our newsletter today which you can sign up for at tvp. com.
34:23
Yesterday, a Los Angeles jury found both Meta and YouTube It's fantastic.
34:29
I want a lot of soundboard for this.
34:31
Both Meta and YouTube liable for a 20-year-old woman's mental health crisis in a bellwether trial that treated platforms as {quote} defective products and potentially marks the end to the absolute immunity nature of section 230.
34:47
In the case, the plaintiff's lawyer Mark Lanier argued that Meta and YouTube built {quote} digital casinos that use neurobiological techniques similar to those employed by slot machines.
34:59
Fun fact about ARM throwback, the first chip that the company the precursor company ever built was a chip that went into a slot machine.
35:07
They call them fruit machines in in England. Fruit machines? >> Fruit machines.
35:11
They call them fruit machines because they have like the cherries and the strawberries and the bananas and you line them up. Got it.
35:16
And and they needed chips to run those.
35:19
So the iPhone traces its lineage and and Apple silicon and all this tra- This goes much deeper than that.
35:25
>> it all goes back to literally gambling. Very fascinating.
35:27
Anyway, um so the jury found that specific features of Meta and YouTube are designed to be addictive.
35:36
Infinite scroll creates an environment where there are no natural stopping points.
35:42
Algorithmic recommendation feeds users feeds users highly engaging content.
35:47
Autoplay removes users agency in choosing whether or not to watch the next video.
35:52
Notifications pull users back in by exploiting their need for validation.
35:58
Instagram beauty filters contributed to the plaintiff's body dysmorphia.
36:02
Features like the like button exploit users biological need for societal approval.
36:08
This is what the lawyer argued.
36:10
Plaintiff's lawyer argued.
36:12
Shake Shack exploited my biological need for food.
36:17
>> Yes, there is this question there was Taylor Lorenz had some great takes here.
36:22
She said >> So so Taylor has come out in the last like 48 hours and I would say is like the number one defender of big technology. >> Yeah.
36:30
She does have one of the top technology podcasts in the world.
36:33
>> she had a she had a she had a take that was like so does Spotify is it Spotify addict you to music by playing like good songs for you on demand and and and >> This DJ this this AI DJ is simply too good.
36:46
>> Basically I mean that's kind of the argument.
36:47
They didn't obviously go after Spotify, they went after Meta and YouTube but yeah there there's a question about like you know what UI features what are dark patterns and how do we regulate those and it's very interesting.
36:58
But the decision has been made and these companies will have to pay $6 million to the plaintiff in total damages.
37:04
Uh this is obviously a trivial amount of money for these companies but the bellwether nature of the outcome has significant implications for social media.
37:12
There are over 10,000 individual personal personal injury cases, almost 800 school district claims and 40 state level cases pending nationwide that are similar to KGM versus Meta and YouTube.
37:26
More broadly, the social media industry's reliance on section 230 which has up to now shielded them from liability for user generated content uh may no longer be enough to protect them from litigation like this.
37:39
Now, to be clear, this case is not is not attacking section 230 because it's not making the argument that someone uploaded a video to YouTube that said you should be sad, you should be afraid, it's over uh and that made someone sad.
37:55
That is the content that is user generated.
37:57
That is protected under two section 230.
37:59
You might be able to go after the individual creator of that video.
38:03
If I make a video that says like Jordy Hayes sucks and should be sad and then you get sad, you might be able to sue me I think. I don't know.
38:11
But that's that's a little bit more defensible cuz it's like me on you but you won't be able to sue YouTube for for platforming that content for putting that up in in just general cases.
38:19
Um but this is different because they went after the like button, the infinite scroll, the recommendation feeds, the features that are built by the platforms themselves.
38:29
So uh if the decision makes it through appeals and this might go all the way to the Supreme Court, we'll see.
38:35
Platforms may be forced to redesign their user experiences and algorithms, put up age verification, uh even deprecate infinite scroll.
38:44
Uh obviously changes like this would have an effect on both these platforms ad-based revenue models.
38:48
Uh Meta and Google plan to appeal the decision and it's not hard to imagine this one making it to the Supreme Court.
38:55
Uh Taylor's also been uh sort of you sounding the alarm bells around um around age verification. It sounds very good.
39:02
I'm I feel like I'm pro age verification based on like I have kids and I don't want them seeing adult content.
39:08
Uh but she was worried about the the the KYC and and needing to track privacy tracking anywhere and and that is a good that is a good argument to be made.
39:19
Um well, let me tell you about Graphite.
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39:35
Uh we have to start apologizing to the schizophrenic community.
39:40
There was a surveillance drone reportedly flown by infiltrator elements and disguised as a natural bird such as an eagle that has been spotted in Iran.
39:49
Uh this goes back to Taylor Lorenz because I believe she worked with the folks behind the the viral stunt birds aren't real that was uh sort of a commentary on the conspiratorial nature of the internet and in that stunt uh they make the argument that birds need to be recharged and they're all spying on you and no birds are real.
40:09
Of course uh that is very satirical and funny uh but apparently there someone made a drone uh some you know organization made a drone that looks like a bird so it can sneak behind enemy lines and spy during the the conflict uh which is uh remarkable.
40:25
Um but uh Do you think there will ever be video games that are effectively >> Mhm.
40:34
you're just remote piloting something in the real world? Yes.
40:38
>> you think there would be demand for Yes.
40:41
So I have heard of this years and years ago that there was something along the along those lines uh that would allow you to hunt remotely.
40:51
So you go to a website and you control a weapon that can hunt an animal which is crazy.
40:56
I don't know if it's >> That's crazy.
40:57
Uh but uh Do they close the loop?
40:59
Like help you actually get meat?
41:02
>> They so after you down the animal they will go and ship it to you.
41:08
So you can mount it on your wall. Thanks.
41:10
A lot of people >> Sort of sort of A lot of people are not going to like that.
41:13
>> I don't think Joe Rogan would approve.
41:15
He he's a bow hunter, you know?
41:15
Yeah, he wants to he wants the connectivity with >> so. I think so.
41:18
It's destroying just destroying the >> Now I'm curious.
41:22
Is it is it like a is it is it like a is it a gun mounted to an ATV?
41:26
Not an ATV but uh sort of like a a two-axis swivel. Like a yeah. Yeah.
41:31
You got a sniper rifle on a on a turret with a webcam. Pretty crazy.
41:36
I don't know if this is real.
41:38
I heard about this like years and years ago. Uh anyway.
41:42
Uh the reactions to the Meta and YouTube trial continue.
41:44
Ariel Grubner says or Gibner says, "This is disgusting and I can't wait for the appeals.
41:49
The precedent set by YouTube being liable for screen time addiction is kind of scary.
41:54
Treating algorithms like a defective product opens the door to endless lawsuits over addictive tech. What's next?
42:00
Books, video games, junk food?
42:02
I mean video games we got to do something about those things. They're too too fun. Too fun. It's true.
42:04
We got to make them We got to make them >> Except except you you ascended. You beat your addiction. Yeah. I definitely did.
42:16
You don't you don't game anymore. You actually did.
42:17
I mean it might be one of those things like you're still addictive addicted.
42:21
You just Might have been playing a game earlier this week.
42:22
Got a sneaky little 45 minutes. Really? >> Yeah. No. Yeah. It was good. No. Player Obscura.
42:29
I'm going to go I'm going to go look You got to pull me out. I'm addicted.
42:33
>> No, I'm going to go look back in our texts and see like when did it take you 45 minutes to respond to something.
42:38
>> it was like Tuesday night or something.
42:39
>> yeah, I'm going to make a coming after Eric Jorgenson >> Oh yeah.
42:41
for the book of Elon >> [laughter] >> Yes.
42:43
>> because that just came out and uh Eric did a fantastic job. Yes.
42:46
And uh I think it's highly addictive.
42:48
We got to we can we sue this lawyer because this is one of the most interesting cases and I I actually can't pull myself away from it.
42:58
And I feel like I'm just going to spend hours and hours uh >> Obsessing over your your your filings.
43:05
Yeah and and uh I I don't know. It's depressing.
43:07
It's making me sad thinking about these uh these tech companies having to pay fines and it just it's just ruining my mood entirely.
43:13
Uh and it was like you can tell that the that the the way the lawsuit was designed was designed to take an emotional toll on me, suck me in, make me read uh the all of the all of the transcripts from the court, all of the all the reporting, all the research and eventually you know talk to Eric Goldman from Santa Clara University on my show about this.
43:34
Like I just can't pull myself away from this. So >> loop. Yeah.
43:38
I I I think I think should he be held accountable for what he's doing? I don't know. We'll see.
43:42
But there might be a lawsuit.
43:45
>> Meta of course trading down massively today almost 9% off of this and you know it it there's some real concerns, right?
43:54
If they there's new legal risk, there's thousands of other kind of lawsuits floating out there.
43:59
You might get more copycat uh lawsuits, class actions and then the real question is like do you do they have to make any product level changes?
44:09
Does that end up impacting time spent in the app which will impact the advertising business.
44:14
Um Such a such a weird one because certainly certainly I don't think back throughout the years >> is also down 2% today.
44:24
So there's a general sell-off but yeah.
44:27
>> Yeah, general sell-off but like you know Meta Meta down dramatically more than that.
44:30
Hundreds of billions of dollars. Mhm.
44:34
Yeah, this is a weird one on a personal level cuz like on one hand my kids I'm going to keep away the infinite scroll machine as long as I possibly can, right?
44:43
Um and I will you know I don't I don't think back on the time that I've spent on social media and think, you know, uh well I'm so glad I I put in those those long hours and I really put in the work. Yeah.
44:56
It just doesn't seem that addictive to me.
45:00
I can pull myself away like anytime. It's not a big deal.
45:06
It's just not a big deal. We lost it.
45:12
It just sounds like it sounds If you pick our honeymoon, okay.
45:15
You just got to get more I'll ask you a question.
45:18
If you follow me I'll double your bank account. Wow, on Instagram? Okay.
45:21
I mean this is good content.
45:23
This is the road you would have to take if you want to go to This is my subscriber.
45:27
And this is my subscriber.
45:29
This is so so such a such a good This is fun. It's fine.
45:36
We're going to get back to the show in a little bit. It's not a big deal. It's fine. We lost it. We have to 100 people.
45:45
He took He took people that are ages 1 all the way to 100 and he's having them taste test lunch meat. I got to watch this. Okay.
45:53
Is the wall is the largest LED floor?
45:57
No, this is just my normal feed. What's yours like? I am scrolling Mr. Beast.
46:02
>> It's so it's so funny cuz it it it um I I think I think whatever that was was completely inverted from you know a a meditation >> [laughter] >> soundtrack, right?
46:13
It's just like it sounds insane.
46:17
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46:36
Uh well No, the the so so the funny thing the funny thing is how addictive are the apps themselves?
46:44
Can they argue that the apps themselves it's really not us. >> Yeah. Right?
46:48
>> I've seen some people's channels not very addictive. Yeah.
46:50
You know like it takes >> Yeah, many and many and many ways like our our content, right?
46:54
We talk about niche subjects in technology and business.
46:59
There's a lot of content on YouTube that is far far far more addictive. Yeah. But Yeah.
47:06
No, I I I've I've generally had a good experience on social media.
47:08
You know what else is addicting? What? High-speed trains.
47:13
>> Oh, you want to skip to high-speed trains?
47:14
You don't want to do uh We can come back to that.
47:17
>> Okay, we can come back to that one.
47:17
Uh what's going on with this?
47:18
So in China high-speed trains have become a high sightseeing [music] attraction.
47:22
This is a good I would definitely go to this.
47:24
I would 100% just go see the the the high-speed train rip through the countryside. That looks amazing. I love it.
47:32
Also this is the most incredible video of China that I've ever seen.
47:36
What is it what is this mountain range at sunset?
47:42
>> I think people are posting up there even if the train isn't there.
47:43
This is like one of the most beautiful You think that secretly everyone there is like boo the train ruined my beautiful view?
47:49
Because like they could just be sitting there watching the amazing sunset and the >> Yeah, that guy's leaning forward as the train goes by.
47:58
>> I think they're cheering.
47:58
I think they're cheering. Uh it's great.
48:01
Um Where else do you want to go?
48:03
Uh we can go back to this article. Okay. Okay.
48:04
I I cuz I need to know where everyone stands.
48:08
I need to know where do you stand on shoplifting? Are you pro or anti? Are you pro or anti? I'm anti.
48:15
>> You're anti shoplifting. What about you? >> go.
48:17
Uh I had one moment as a kid when uh I think I took a piece of candy >> Ooh.
48:23
>> and my parents immediately took me back.
48:26
>> I'm going to put you under citizen's arrest right now.
48:28
>> it's time for a citizen's arrest.
48:28
No, it took me back and it and it was like the most deeply embarrassing moment that's like a core memory of telling them like >> that.
48:37
And I and I think it was at it was at an age that I didn't really know that it was wrong but still.
48:40
Well, that's not what's going on actually.
48:44
So the Wall Street Journal uh wrote a piece about in free expression Emma Camp wrote this op-ed.
48:51
And and there's a new generation of Yes, the Campinator.
48:54
Uh there's a new generation of shoplifters who aren't children who have who should have learned their lesson long time ago but are actually uh fairly affluent and are just sort of sneaking out luxury goods.
49:08
I think that's a piece of it.
49:08
Uh But it was but she makes a very compelling argument for why this is a very bad thing.
49:14
>> to make skydiving more accessible. Okay. Like if skydiving Yeah.
49:18
was was a dollar >> thrill. Okay. >> a dollar Okay. >> a dive Yeah.
49:23
I think a lot of people might say I'm just going to go skydiving today.
49:27
I don't I'm not going to steal anything.
49:29
>> Well, I mean Ben on our on our team is working on uh a new weather report >> Or jet ski racing.
49:34
for a thrilling things to do.
49:36
>> could make jet Universal basic I like that.
49:40
I think a lot of people would say, "I don't have time to steal.
49:44
I'm getting ready for the race later."
49:45
Yeah, my cortisol is super low.
49:45
I don't need to spike it by by sneaking something out.
49:48
So, at least once a week, as I begin my commute from home from a Midtown Manhattan subway station, I I see someone in a suit and tie dodge the fare.
50:00
Well, it isn't always a suit.
50:01
Sometimes it's a chunky gray J.
50:01
Crew sweater and ballet flats.
50:04
Each time I see the fare evader slip through an an open emergency exit or casually hop over the turnstile, a wave outrage bubbles within me, says Emma Camp in the Wall Street Journal free expression.
50:15
And I consider shouting out after the shameless thief. You should do it.
50:19
I I'm in favor of yelling at fare dodgers in this case.
50:24
But before I can work up the courage, he's melted into the crowd.
50:28
It's tempting to give fare hoppers and shoplifters the benefit of the doubt and assume that they are all Jean Valjean's.
50:34
Do you get that reference? >> No. Les Mis. You got to see Les Mis.
50:38
Jean Valjean is the pinnacle of morality.
50:40
He steals a loaf of bread for his family cuz they're starving. Goes to jail. Gets revenge. It's a great story. You will love it.
50:46
You should see it on the in a theater because it is of course a live stage production many times.
50:51
But there's also a bunch there's also a great movie with Liam Neeson.
50:56
The Liam Neeson one is the one you want to see.
50:59
The Liam Neeson Les Mis is amazing.
50:59
I think I have that right.
51:03
But but that's far from the truth.
51:03
Well, according to one 2025 survey, and this is what was interesting about this article.
51:09
The likelihood that someone would purposefully take an item at self-checkout without scanning actually increased with income. So, the rich get richer.
51:19
The rich are stealing from the rich.
51:22
A viral article in Curbed, a site published by the New York Times magazine or by New York magazine, paints a vivid picture of this kind of thief, a member of a certain subset of the city's wealthy-ish, as writer Nora Delæter to puts it.
51:37
For whom a little shoplifting on your grocery run has become as about as mundane as jaywalking.
51:40
This isn't exactly surprising.
51:43
A report from the Council on Criminal Justice released earlier this year found that while reported shoplifting decreased during the pandemic, rates have returned to roughly pre-pandemic >> Wait, did they just decrease because people were ordering groceries online? >> so. I think so.
51:58
If you're not in the store, you can't steal anything.
52:01
You got to you got to hack the system or something.
52:05
Cybercrime to steal from DoorDash.
52:08
The rates have since returned roughly to pre-pandemic levels.
52:13
This This New York magazine profile in Curbed profiles several several shoplifters who were caught stealing from Whole Foods.
52:20
None were acting out of necessity, and most stole what can act what can accurately be described as luxury goods.
52:27
$30 ice cream, strip steak, fancy organic chocolate. None expressed guilt.
52:33
And no one and one explicitly justified her actions as being in a kind of a kind of artists subsidy.
52:43
Petty theft is a vice for a certain kind of loser. Go off, Emma Camp. I love this.
52:48
Many of those profiled in this in this article are are creative types, photographers, graphic designers, sculptors, and musicians.
52:55
Presumably, these people are highly educated but down downwardly mobile.
52:59
They steal because they feel entitled to the kind of life where they can thoughtlessly drop $50 on French cheese and sushi rolls while paying Manhattan rent.
53:08
They can't that they can't indulge in such luxuries feels to them like a moral outrage, one that can be rectified in some small ways by taking what's owed to them.
53:18
When shoplifters justify their actions online, they make themselves out to be Robin Hoods.
53:24
They claim it's good to steal from large and therefore evil corporations.
53:28
This is a teenager's leftism, one in which fighting the man means ripping him off.
53:34
It's a post hoc justification for a baser impulse, the belief that everything you want should be free.
53:41
This motivation is made particularly clear when people justify fare evasion given that public transportation is inherently not a big private enterprise. It's not a mega corp.
53:52
It's it's you know, taxpayer dollars that you're stealing from.
53:54
Even when we grant even when we grant the assumption that large companies are inherently evil, which for the record I don't, says Emma Camp in the Wall Street Journal.
54:05
That doesn't justify stealing from them.
54:06
If thou shalt not steal doesn't work for you, consider another argument.
54:09
Petty theft damages the institutions and businesses in a community, making them materially worse for your neighbors.
54:16
You may think you aren't hurting anyone.
54:20
Actually, you're hurting everyone.
54:22
Businesses hike prices to make up for shoplifting losses.
54:25
Have you heard of like loss It's called like loss rates or something.
54:29
Like every retail store just assumes that they're going to get 20% or 5% or something.
54:33
Yeah, I don't think it's It [clears throat] could be high.
54:37
It could be high in some stores.
54:37
Like significant amount of merchandise just like gets lost prevention is like the term that they focus on.
54:42
But it's like a constant problem for these businesses.
54:46
And they have thin margins.
54:46
People don't realize I think people think like grocery stores because like you go and check out and it's 100 bucks or something, it's like they're making a ton of money.
54:52
But like the margins are very very thin on those. It's not It's not ARM.
54:56
They're not licensing IP to Apple. They may even close.
55:00
A public transportation crumbles without sufficient revenue from riders.
55:04
As journalist Kelsey Piper put it in a post on X, "When you shoplift, you directly and unambiguously impoverish your community.
55:13
That bar of chocolate you swiped isn't nothing.
55:16
That little pot of ice cream you slipped into your purse is more than a rounding error on a corporate balance sheet.
55:21
What you're doing ultimately creates a worse, less functional, less trustworthy society.
55:26
And even shoplifters need a place to get groceries."
55:30
Yeah, the comment section is agreeing with Emma.
55:35
They said, "Well said, and I'll extend it but beyond just shoplifting to include things like buying something with the intent of returning it after using it for a few days.
55:42
I remember someone buying a grill at Lowe's with the intent of using it for the weekend and then returning it, which they did." Okay.
55:51
Yeah, just didn't steaks didn't really come out that well. I don't think it was me.
55:55
I think it was the grill.
55:57
I'm not a I'm not a big returns guy.
55:59
I Costco does have a huge return policy that some >> Yeah, it's so it's so interesting the the Coogan or the Hayes mind cannot comprehend the return.
56:11
>> [laughter] >> Like it's I I've maybe returned Yeah. two things Yeah. in the last 10 years.
56:22
It's just not an impulse that I have.
56:25
Cuz you're deeply in touch with everyone.
56:27
>> [laughter] >> Um It's so funny.
56:29
Anyways, we can >> Okay, let let me tell you about Turbo public.
56:33
Serverless vector database by Pinecone.
56:35
Built from first principles and object storage.
56:36
Fast, 10x cheaper, and extremely scalable.
56:38
And let me also tell you about Gemini 3. 1 Pro.
56:42
With a more capable baseline, it's great for super complex tasks like visualizing difficult concepts, synthesizing data into a single view, and bringing creative projects to life. And thank you.
56:52
The clapping in the studio is at an all-time high now that we're back to a full strength in the TBPN ultradub. So, >> That's right.
56:57
Will Manidis is giving some more context around anti-AI backlash.
57:02
He says, "In case you're skeptical that anti-AI backlash will become a central issue in the next election cycle, Sanders just introduced a bill to halt all new data center construction and require the federal government to review and approve AI products before release."
57:19
Interestingly, this idea of an AI FDA The first time I heard about this concept was on the All-In podcast.
57:24
I believe Chamath Palihapitiya was making the point that an AI FDA was something worth considering.
57:33
I think he's evolved his position, but it it was something that you know, the first time you learn about like the possibility of a fast takeoff, the possibility of AI doom, it seems really rational to say, "Well, let's review everything beforehand."
57:48
But then there's natural effects and there's limitations to the models, and we can't even do a puzzle on our KGI.
57:53
So, maybe there's a little bit more work to be done.
57:54
Maybe there's a few more data centers to build before we actually get good things out of these models.
57:58
But Noah Smith Noah Smith wrote a piece that I think is relevant to the data center moratorium, which is AI has the worst sales pitch I've ever seen.
58:13
And he his quote, "Our product will make you economically useless and possibly kill you."
58:17
He says not says it's not a value proposition.
58:20
AI leaders need to change their public messaging and fast.
58:24
We don't need to read through all this, but >> to read this quote.
58:25
He opens it with this quote, "Hi, do you have a moment?
58:30
I'm from the cursed microwave company.
58:32
Our product is much better than a traditional microwave.
58:34
Not only can it automatically and perfectly cook all your food, it also microwaves your whole body so you and your family are paralyzed and unable to work ever again.
58:42
Don't worry though, because when everyone has a cursed microwave, our society will probably implement universal basic income, and you and your children can just go on welfare.
58:49
Oh, by the way, we estimate that there's a 2 to 25% chance that our microwaves will put so much radiation will put out so much radiation that they destroy the entire human race.
58:59
If a door-to-door salesman came and gave me this pitch, I would gently see him out the door and then quickly call the FBI.
59:05
But this is only a modestly exaggerated version that the pitch of the pitch that the big AI labs Open AI and Anthropic are making to the world about their technology."
59:13
And I completely agree with this.
59:14
It's very it's very important that that AI lab leaders you know, focus on the actual tangible benefits of the of the technology right now.
59:23
Like I think there's this you keep you keep identifying this disconnect between like like people are afraid of AI and there's so much fear-based marketing, but then like every single person, like a billion people are just using ChatGPT to like get answers.
59:39
And And every person you talk to, no matter how they they can tell they can tell you for 20 minutes, lay out a very coherent like cogent thesis of AI doom, what might happen, terminators.
59:52
They can take you on this very reasonable scenario.
59:54
And then 5 minutes later the topic changes and they'll tell you how they use ChatGPT to like, you know, plan their vacation or something like that.
1:00:01
And And this disconnect just like cannot last. >> Yeah.
1:00:04
Yeah, I wrote January on January 9th, uh the phrase tech lash was originally coined by Adrian Wooldridge in the Economist in 2013.
1:00:12
He correctly predicted that the big developments of 2014 will be the growing peasants revolt against the sovereigns of cyberspace. >> Mhm.
1:00:19
The Silicon elite will cease to be regarded as geeks who happen to be filthy rich and become filthy rich people who happen to be geeks.
1:00:24
Over the coming years, the world experienced the Cambridge Analytica scandal, fear around the mental health impacts of social media on young people, and growing concerns around monopoly power in our digital world.
1:00:34
The internet and the platforms that dominated began to test the core foundations of our country and and the free world, privacy, democracy, censorship, and more.
1:00:41
The second tech lash has begun.
1:00:45
This time because the average American believes that technology, specifically AI, is now a threat to their very way of life.
1:00:51
Uh starting at the bottom of Maslow's hierarchy of needs, Americans have heard the data centers use a lot of water, they heard their power bill is probably going to go up because of it or already have.
1:00:59
They've seen the movie Terminator and have imagined how that might go from science fiction to reality. >> Watch Terminator.
1:01:04
You still haven't seen it, right?
1:01:07
Uh no, I have seen Terminator. >> You have?
1:01:08
Have you seen Terminator 2? Uh probably not. You're killing me.
1:01:12
>> John, it's enough to ask me to finish one movie.
1:01:14
[laughter] Now you're like, oh, you got to see the sequel, too.
1:01:17
>> Two is Two is the best one, I think.
1:01:17
Uh but the end of Terminator, it's a good ending. The humans win. We beat the robots. Yeah. It's a good outcome.
1:01:24
You got to push back on that?
1:01:25
Uh no, I was I was going to add so earlier we were talking about like China and like how is China thinking about some stuff? >> Oh yeah, yeah, yeah. Okay, tell us. Tell us. Yeah.
1:01:31
Okay, so um Xi Jinping is like if you basically compare like Chinese government to US government, Chinese government is probably like much more concerned about safety than the US is. >> Okay. Interesting.
1:01:41
Like there's all these things like so Xi Jinping, we don't want us to we don't want other people to be able to do surveillance as well as we have been doing.
1:01:50
>> yeah, there's always like the the tech which is like Yeah.
1:01:52
you know, if you're super concerned about safety, well, what does that mean?
1:01:55
You you need these the the silver side over everything, right?
1:01:58
Which is like if you're China, you want to be authoritarian, that's like the thing you're going to do.
1:02:00
Um but basically he's like uh he he chaired this it was from time a rare Politburo study session on AI warning of unprecedented risks. >> Mhm.
1:02:11
Um it's listed AI safety is listed alongside pandemics and cyber attacks in their national emergency research response plan.
1:02:18
Um he's also said uh he he stressed the need for monitoring, early risk warning, and emergency response, right?
1:02:23
So it's like sure that's like about safety, but also, you know, monitoring, right? No, no, no.
1:02:29
It's kind of >> I wonder I wonder how this interfaces with the Bernie Sanders position.
1:02:33
Like will there be some sort of uh like open discussion?
1:02:39
Uh you know, Bernie's going around doing a lot of different conversations.
1:02:40
That would certainly be like the next step if he wants to get through the uh you know, the geopolitical pushback.
1:02:48
Even when you talk to a lot of like the positive AI people, very few of them are are like ever really say the US needs to pause regardless of what China does.
1:02:55
It's always like we need to have international uh you know, agreements on cuz otherwise like it obviously doesn't work. >> Totally. Totally. Yeah.
1:03:03
>> Yeah, if everyone could just give their GPUs to Tyler, he will watch after them. He can be trusted. >> He can be trusted. >> He can be trusted. Tyler is a cluster. Yes.
1:03:14
Uh anyways, so this story will continue >> That's good info. Thank you. Uh Rune hit 300k.
1:03:20
He says time to docs on TVPN. Okay, let's do it. 300k is a milestone. Let's go. Congratulations. Boom, boom, boom.
1:03:34
>> [laughter] >> Uh Score says >> gong at 250, too.
1:03:39
Every Every time Every time there's a Rune milestone, we must celebrate it to the fullest.
1:03:43
>> [laughter] >> Score says Really quickly, let me tell you about Cognition.
1:03:46
They're the makers of Devin, the AI software engineer.
1:03:49
Crush your backlog with your personal AI engineering team.
1:03:51
And let me also tell you about Console.
1:03:53
Console builds AI agents that automate 70% of IT, HR, and finance support, giving employees instant resolution to access requests and password resets. Uh continue.
1:03:59
Let's pull up one of the greatest videos created in the last year.
1:04:04
Ooh, yeah, this Score says RIP Sora, you gave us the greatest AI video of all time. Let's play it. This was a great video. I did enjoy this one. >> Sound, please. Yeah, you What's that? IT'S MIDNIGHT. GIVE ME THAT. NO, SIR. NO MORE FIDDLE TONIGHT. Got it? Inside with the fiddle. Go home.
1:04:22
>> [clears throat] >> HEY, WHAT DID I SAY ABOUT THE NOISE?
1:04:25
IT'S THE MIDDLE OF THE NIGHT.
1:04:26
NO MORE SYNTH ON THE PORCH. The door cam.
1:04:30
The Sora model, I don't know what they What was in the training data, but it nailed this like doorbell footage.
1:04:37
Like the graininess really leans into the flaws and it it hides the flaws in the model.
1:04:41
When you try and do something that's photo real, it looks a little waxy still, but this is just perfect.
1:04:47
It's too It's too low res to detect like, oh, the finger's perfect or whatever.
1:04:54
That's a good instrument. That's fun.
1:04:56
She really She really hits the cat with that door.
1:04:59
>> [laughter] >> It's absolutely insane. Yeah. Well, the didgeridoo? Oh. Here's the thing. Here's the thing. Human creativity.
1:05:09
You had to string all these together.
1:05:11
This was not one shot of it.
1:05:13
This is like This is like, you know, 10 prompts. I've done it.
1:05:16
I I I've gone to ChatGPT and said like, think of a funny prompt, and it doesn't come up with something as novel as this.
1:05:22
Otherwise, I would be the creator of that. Hey, that's our gong.
1:05:27
That's literally our gong.
1:05:27
[laughter] Our former gong. Former gong. Yeah. It's nice.
1:05:32
We made it into the training data. Is that aerobics?
1:05:38
Volume down, pause off the neighbor's silent disco. It's good. I love it.
1:05:43
Uh yeah, the Sora the Sora news is interesting.
1:05:46
I mean, obviously good uh to as a reflection on like, okay, era focus.
1:05:50
We heard that news from like a week ago.
1:05:53
Uh this is like a very clear step in like refocusing.
1:05:56
Uh there is a question about like the value of models.
1:06:01
Like Sora jumped ahead of Meta VIBES very quickly.
1:06:04
Meta VIBES launched like a week before.
1:06:06
And when Sora came out, the consensus was like, oh wow, this is like definitely a step above of what you can do with VIBES, which was much more like an animated picture from Midjourney.
1:06:17
It had cool cool aesthetics.
1:06:19
Um but it was it was way less like it was it was very constrained in terms of what you could do with Sora.
1:06:24
You could you could automatically insert different cuts, um generate something that looked a lot more like a native reel, even if there were sort of rough edges.
1:06:35
But uh the question with every model is um you know, you spend money to train it, and then it has ongoing inference costs.
1:06:43
The cost of a video model, it feels immense because I went back and looked at some of the first Sora videos that I generated.
1:06:48
Uh I'm thinking of me in the orange and white suit. Yes.
1:06:53
One of the greatest AI videos.
1:06:55
We'll have to play it at some point.
1:06:57
But um that one felt like it had about a thousand times as much compute allocated to it than the last one that I generated cuz I generated a Sora like a week before this announcement, and it did it does feel like they had they had shifted the GPU workloads to other to maybe Codec because that was the product that was taking off.
1:07:17
What do you think, Tyler?
1:07:18
>> there were some rumors where they were spending something like 10, 15 million dollars a day on compute for just for Sora, which is like, you know, like 3 and 1/2 billion a year or something like something in this range. >> Yeah.
1:07:27
So it's like so much compute just on inference, and it's like, yeah, what's the actual value of it? Yeah, yeah.
1:07:32
And And if it's not monetizing with crazy ad rates immediately or crazy API costs, like like you just you're just in GPT-2 territory, where Greg Brockman came on and told us that, you know, I don't know, they spent probably millions of dollars training GPT-2, and they were like, we had to pay people to use it.
1:07:49
Like every dollar of inference was was negative margin.
1:07:52
We were losing money on every on every token generated.
1:07:57
And then GPT-3 was in a similar boat.
1:07:57
It was like almost there, but they weren't really making any money for it.
1:08:01
And then the GPT-4 training run happens, and that I mean, looking back, that has to be an incredibly profitable uh model because I think it maybe cost a hundred million dollars to train, and then the inference cost like like they distilled the model pretty quickly, uh got to a place where I think that was very very ROI positive based on the subscriptions during that time before they rolled out five.
1:08:21
And then, you know, you're always facing this battle of like, you know, a little bit of a Red Queen's race, training the new model, ca- you know, depreciating the model across whatever the the inference margin you get during the period where you have the best model.
1:08:34
Um Mitchell Green went on Invest Like the Best, and >> Mitchell.
1:08:42
uh Patrick uh Patrick pulled out one of Lead Lead Edge He said Lead Edge Lead Edge is probably most famous for this letter.
1:08:49
Mitch Mitchell calls it the hierarchy of BS.
1:08:53
It's his way of distilling what he learned from cold calling 10,000 companies, and I will go through it.
1:08:57
If companies have good cash product profits, they report those.
1:09:01
If companies don't have good cash profits, they report on adjusted profits.
1:09:05
If companies don't have good adjusted profits, they report on gross profits.
1:09:09
If companies don't have good gross profits, they report on revenue.
1:09:13
If companies don't have good revenue, they report on adjusted revenue indicators like GMV.
1:09:17
If companies don't have good GMV, they report on monthly active users.
1:09:21
If companies don't have good monthly active users, they report on subscribers.
1:09:24
If companies don't have good subscribers, they report on downloads.
1:09:28
If companies don't have good downloads, they report on page views.
1:09:30
If companies don't have good page views, they report on what they were voted the best place to work in XYZ city.
1:09:37
>> [laughter] >> Right now, this this reminds me of the only news that we've shared from TVP and is that we're like the 42nd most innovative company recently, but we're not a public company.
1:09:47
If you want to trade a public company, go over to public. com.
1:09:50
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1:09:52
Stocks, options, bonds, crypto, treasuries, and more with great customer service.
1:09:54
I want more of your take on this.
1:09:58
People that that that flex how many lines of code Oh, yeah.
1:10:02
Like if your product doesn't have any If your product doesn't have any users or revenue, you just report on lines of code.
1:10:08
A lines of code per year run rate is the crazy one I saw recently.
1:10:14
>> LOCRR That's an insane stat, but we have the solution.
1:10:17
It will be released soon.
1:10:20
Do you have a general update, Ty?
1:10:20
Yeah, what's the timeline, Tyler?
1:10:24
Did you when I mean you went on when you went on the road, did you stop walking in? Work.
1:10:28
The project is will be can be done today, tomorrow. >> Really?
1:10:33
>> Does it have sound effects yet?
1:10:33
It does not yet have sound. Let's do sound. Let's do sound. Yeah, in a day or two.
1:10:39
>> [laughter] >> Just one more problem.
1:10:40
The fundamental mechanics are fine-tuning tomorrow at 12:07, chat.
1:10:46
Jordy, it's ask Tyler >> the project's the project's The project's is not done yet, but I talked to Tyler and he said he's he's generating 25,000 lines of code in hour in advancing of this project.
1:10:56
So, I mean he's doing he's clearly putting out a lot of code, and that will translate to a great product eventually. >> Yeah.
1:11:04
The best entrepreneurs I know are generating millions of lines of code daily just to keep their about page up and running and have a about Rough.
1:11:14
Well, let me tell you about Restream.
1:11:16
One live stream, 30-plus destinations.
1:11:17
If you want to multi-stream, go to restream. com. Just do it.
1:11:23
Gwen Shotwell is on the cover of Time magazine.
1:11:25
SpaceX is racing to build the most powerful rockets yet with the goal of returning humans to the moon.
1:11:30
Gwen Shotwell is leading the charge alongside Elon Musk.
1:11:34
This is a good deep dive. Go check it out.
1:11:38
My the first YouTube video I ever made that went viral or like broke out cuz when you have >> was why is no one talking about Gwen Shotwell? Literally.
1:11:45
Literally, that was not exactly the title. So, not literally.
1:11:50
>> But it was it was that was the whole premise.
1:11:51
That was the whole premise.
1:11:51
And and normally I think I had a thousand subscribers, and so getting like a thousand views was like, okay, this is great.
1:11:59
And if you can get more views than subscribers, that's like a banger. What was it called?
1:12:03
The title was the only reason SpaceX works. There we go.
1:12:06
That that I that might have been [clears throat] Gwen Shotwell.
1:12:07
That might have been retitled that a few times, but um you get the idea.
1:12:12
>> Anyways, no surprise that Gwen Shotwell running Yes.
1:12:16
running a company that is shooting things rockets into the atmosphere. No surprises. >> Well.
1:12:23
Uh FT has some reporting on the SpaceX IPO.
1:12:29
Um They Bankers involved are toying with the idea of allowing existing shareholders to sell out of their positions on day one, two the people said. Wow.
1:12:38
That would do away with rules to prevent insiders cashing out or trading shares, which are typically imposed for 180 days after a company goes public.
1:12:45
I would think they're doing rolling lockups.
1:12:47
A third person said SpaceX is considering a so-called staggered lockup that would allow initial investors to slowly sell down their stakes over the course of several months.
1:12:57
The deal is quote too big of an IPO to just unlock. >> Yeah.
1:13:00
Musk's influence over the size and timing of the listing has been highly unusual, said one investor close to a banker on the deal.
1:13:06
It's kind of scary how Elon is setting the price.
1:13:08
It's not being done formally. >> Oh, interesting.
1:13:12
It's not it's not a full auction format.
1:13:13
He says, this is the price, and you can either buy or not, and hopefully you buy. Yeah, interesting.
1:13:19
The the staggered lockup, it feels like it makes a lot of sense.
1:13:22
You could just see, okay, this person's held these shares for 20 years, this person held it for 10 years.
1:13:25
They get 180-day lockup, a 90-day lockup, a you know, 270-day lockup, whatever you want. I don't know.
1:13:31
Just imagine how much money the lawyers are going to make from unwinding all the different entities and the SPVs and the SPVs and the forward contracts with the SPVs and the forward It's going to be Full employment for lawyers, for sure.
1:13:45
Um XAI co-founder Croys Croys, are you Australian now? Man Manuel Croys Okay.
1:13:54
is departing the company, which is I think officially the last co-founder Wow.
1:13:59
remaining outside of Elon, so. That's remarkable.
1:14:06
Well, it'll be interesting to see what the next what the next run, the next version of Grok does.
1:14:10
Is there is there a new 4.
1:14:12
2 came out, is that right?
1:14:12
Yeah, I mean that was a while ago.
1:14:17
>> a while ago, so we're expecting like a five or a 4. 3 soon.
1:14:21
But Yeah, I don't know if you anyone expected super soon.
1:14:24
Right, cuz they're kind of revamping the whole thing. Yeah.
1:14:25
I wonder what they'll try to do with ARK GIV3 because they were the fourth lab that tested, and they were the only lab that got 0%, although I don't know how much worse that is than getting 0. 25%.
1:14:38
But certainly it'll be interesting.
1:14:40
Orion Peterson had an idea for Elon Musk.
1:14:42
He said, if Tesla makes a car with three rows of seats, each with its own pair of doors, so nobody has to climb over everybody else to get in their seat, they will create a baby boom the likes of which we haven't seen in in 80 years, and Elon Musk says noted.
1:15:00
Would you buy a car with three sets of doors?
1:15:05
It would look extremely odd.
1:15:07
It wouldn't be the very iconic, but that's sort of Tesla's thing, and the Cybertruck stands out on the road.
1:15:11
Model YSL SL size lords Size lords, okay.
1:15:14
Well Yeah, so so the YL Yeah. has three rows. >> Yeah.
1:15:23
But it has two sets of doors.
1:15:23
Four doors, a six-door car.
1:15:26
>> know how big I don't Someone has to have done this at some point, a six-door Having a kid jump in and just crawl to the back.
1:15:32
We did that was when back in my day >> Back in your day?
1:15:35
up when you climbed in that door, it was uphill to the third row. >> Yep.
1:15:40
Both and then and then uphill on the way out. >> Okay. So, it was a nightmare. It was a nightmare.
1:15:45
Yeah, but it made you who you are.
1:15:49
Yeah, and so you don't want you don't want easy street extra doors in the back. No way.
1:15:54
>> [laughter] >> Your kids are going to be climbing.
1:15:56
They're going to be climbing all over the seats. Yeah, it's interesting.
1:15:59
It feels like Tesla's entire strategy from a merchandising standpoint has just been to make like more and more as much as possible just make the the the the lowest number of cars. Yeah.
1:16:12
And so, he's getting all this feedback, but they already have like a six-seater coming out.
1:16:18
Okay, someone someone shared an image Yeah, this is the data that Ambrose Stage Way, the Ambrose Stage Way, the world's oldest and largest manufacturer of custom multi-passenger vehicles, and it's a Suburban that was converted, and it comes with six or eight-door models, so you can have rows and rows.
1:16:42
I don't know if you can scroll down and find it.
1:16:44
It's from Talus Dreams in the replies there. But I don't know.
1:16:48
Anyway, what do you want to Meek Mill says, I'm getting 250 for a tweet. Oh, interesting.
1:16:55
Uh I I was fascinated because he's gone on like this big tear of like promoting AI, specifically Claude.
1:17:06
And so What does what does Nikita Bier going to say about this if he's getting paid Like is he is he is he basically just saying like I'm I'm doing undisclosed paid promotions? >> know.
1:17:17
Uh cuz he's certainly getting more than 250 likes. Yeah, I don't know.
1:17:23
He got about 250 retweets on this, 295. So, I don't know. It's possible.
1:17:30
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1:17:40
Lambda is the superintelligence cloud building AI supercomputers for training and influencing that scale from one GPU to hundreds of thousands.
1:17:49
Last last last last thing before we go into our first guest, we have to pull up this post from Peaceland.
1:17:54
He says, I've seen some fire fits in China, but I've never seen a jacket this hard in my life.
1:18:00
And the guy the back of this guy's jacket just says, Mr. Enjoy Da Money.
1:18:02
M E D M E D M >> MEDM, Mr. Enjoy Da Money.
1:18:12
This [snorts] is >> Apparently that's a that's a legit brand. That is very tough. I like it. Mr.
1:18:17
>> This might be the new meta. This might be.
1:18:19
The puffer jacket with the the stitching on the back is very nice.
1:18:24
Uh there's a lot of fun examples of other other swag in the replies.
1:18:29
Well, without further ado, let's bring in Eric Goldman from Santa Clara University.
1:18:32
He's the associate dean for research and professor there. Eric, how are you doing? >> What's going on? I'm all right, thanks. How are you? I'm good.
1:18:40
Thanks so much for joining.
1:18:42
Please, since this is the first time on the show, I'd love a little bit of an introduction, and then of course I want to go into the case today. Uh sure. I'm Eric Goldman.
1:18:49
I'm a professor of law and associate dean for research at Santa Clara University School of Law.
1:18:54
I've been doing internet law for over 30 years, teaching, researching in the area.
1:18:58
And my area of specialization includes how users talk to each other online. Okay.
1:19:04
And when did you start tracking the Meta YouTube lawsuit?
1:19:09
How long has this been going on?
1:19:11
And then I want to hear about your expectations for the case, your interpretations of the case, how things played out.
1:19:18
Uh so, I started tracking the cases when they were filed.
1:19:20
I had set up electronic alerts to notify me of new filings in the cases.
1:19:27
And I had to give that up after a while.
1:19:28
These parties were just beating each other up in court with an enormous volume of very picayune filings.
1:19:36
So, I stopped tracking at that level a while ago.
1:19:41
It's hard to track the state court cases.
1:19:43
There isn't an electronic tracker for that.
1:19:45
So, it's been a little bit harder to get the information in that case. Mhm.
1:19:48
And this has been going on for a couple years and many millions of dollars have been spent by both sides in these cases. Mhm.
1:19:57
So, take us through what actually happened, how we should be interpreting the the the the the verdict, and and then we'll go into where we go from here.
1:20:07
So, we need to step back for a moment and let me lay the describe the landscape and then we'll see how this case fits into it. >> Yeah.
1:20:14
In California state court in Los Angeles, there have been hundreds of plaintiffs who filed lawsuits against the social media services.
1:20:23
These cases have been joined together in a proceeding, but they're not a class action.
1:20:29
So, there's hundreds of parallel lawsuits all sitting next to each other.
1:20:34
A similar lawsuit is also pending in federal court in northern California.
1:20:38
It's called a multi-district litigation or an MDL, and there are thousands of plaintiffs in that case as well.
1:20:44
Similar format, they're sitting next to each other, it's not a class action.
1:20:48
That case also includes entities like school districts and Native American tribes.
1:20:56
So, there's other entities in that as well.
1:20:58
And then, there have been individual filings across the country by state attorneys general and others in the lawsuits.
1:21:08
So, there's basically just a litigation mania taking place across the United States. Yeah.
1:21:13
And what is it what does it actually take to qualify a plaintiff?
1:21:18
Do they just look at their screen time and say like, "Oh, you used social media for 5 hours last week, you're addicted."
1:21:24
And then they kind of figure out how to how to kind of you know Turn it into a lawsuit?
1:21:31
It There is no screening for who gets named as a plaintiff.
1:21:34
They just raise their hand and say, "I think I qualify."
1:21:39
And they've been joining these lawsuits.
1:21:42
The lawyers, of course, are helping them and each trying to each lawyer is trying to add to their portfolio of plaintiffs that they have that they're representing.
1:21:49
So, but whether they're actually going to get any recognition from the court or money, they'll have to make their case eventually.
1:21:58
So, that's part of why the the trial was held that that led to the verdict that came out this week.
1:22:03
What they did in the California state court case is they said, "We're going to pick three plaintiffs and we're going to do what are called bellwether trials.
1:22:11
We're going to let the parties make their case to the jury and we're going to see what the jury thinks."
1:22:18
The goal was to do three, not just one, with the idea that plaintiffs have so many different stories.
1:22:24
The victims are each in their own unique situation that we wanted to get multiple data representations from the pool of plaintiffs to start to be able to estimate the overall value of the case.
1:22:36
So, the first one came out and the jury agreed with the plaintiffs, did not agree with the defendants, and awarded $6 million in damages.
1:22:44
Now, this is just the first data point of what's effectively three just in the state court case.
1:22:51
There's lots of activity taking place throughout the country.
1:22:53
So, how how should we think about the actual ruling?
1:22:59
The Wall Street Journal has a headline, "Meta and YouTube found addictive and harmful."
1:23:04
What how are you interpreting the nature of what the plaintiff attorney proved?
1:23:12
At the core, the plaintiffs' lawyers had to make a number of novel arguments both to the judge to get to the trial.
1:23:18
And then, in front of the jury, they had to convince the jury to recognize the harms that the victims suffered and attribute them back to social media services.
1:23:29
And the jury agreed with all of that.
1:23:32
And so, the way to I think to interpret this verdict is that we've now heard from some ordinary Americans.
1:23:42
I don't want to say, you know, metaphorically picked off the street.
1:23:47
And asked them, "How do they feel about the accountability of social media services for the harm that their of their users?"
1:23:53
And the jury said, "We think that the social media services should be responsible.
1:24:00
And we should assign some pretty significant dollar values to that responsibility."
1:24:03
Is is that is is $6 million seen as a significant dollar value in the courts?
1:24:11
Because these companies are so big, but again, this could just be the beginning of a wave.
1:24:16
>> it by potentially thousands. Yeah.
1:24:16
So, so where does this go in terms of the the damages as they snowball?
1:24:22
Will there be a class action, some sort of master settlement that that goes way bigger?
1:24:30
Just about the numbers for a moment.
1:24:32
$6 million is far less than what the plaintiffs requested.
1:24:34
It's far more than I think the defendants had hoped.
1:24:39
And as you were pointing out, if you multiply it times 3,000 potential plaintiffs that are already in the queue, that translates into something on the order of like $20 billion.
1:24:48
Again, maybe numbers that Meta and Face and Google have, but TikTok and Snap, if they're also going to be coming along for the ride, then maybe they don't have that.
1:25:00
Maybe that becomes uneconomic.
1:25:00
So, the numbers grow, I think, really rapidly because not only is it the people who've already filed, it's all the other potential users who will say, just like like you were suggesting earlier, who will say, "You know, I've been addicted for 5 hours on my site."
1:25:17
There could be tens of thousands of more plaintiffs coming through.
1:25:21
The numbers on this could get extraordinary.
1:25:23
Now, remember this is only one data point.
1:25:24
The other two bellwether cases could establish no liability.
1:25:29
Or they could assign much larger damages.
1:25:31
And so, we'll see if that $6 million is even the right number for the parties to start estimating the settlement. Sure.
1:25:38
So, will those other bellwether cases for sure resolve before this gets appealed?
1:25:45
Do you anticipate that this ruling will get appealed all the way to the Supreme Court?
1:25:48
How do you think about the interaction between the bellwether cases and then other legal proceedings?
1:25:56
So, my I believe that the appeals are going to be lodged now.
1:25:59
But I would expect that by the time that the appellate court is ready to hear the appeals, the other two cases will have been resolved.
1:26:06
And ideally, they'll be all handled together.
1:26:08
Whoever doesn't get the results they want in the other two bellwether trials would go ahead and appeal those as well.
1:26:15
All these cases are going to be appealed until there's some kind of definitive resolution.
1:26:22
And I would expect appeals to go up all the way as high as the court will take them.
1:26:26
The US Supreme Court has discretionary review, so they may not take it, but I expect the cases to be appealed to them.
1:26:33
Unless there's a settlement, and you did ask about that.
1:26:36
And let me just close the thought.
1:26:36
The difficulty with settlements because they are not class actions, the defendants cannot settle against all the potential plaintiffs.
1:26:44
They can only settle against the ones who've already expressed who've already signed up to the case.
1:26:50
And so, one of the tricky aspects of this case is how could they price the settlement to pick up all these other potential plaintiffs who are waiting in the wings? Mhm.
1:26:58
Are there any other countries that have gone through this process of litigating social media addiction?
1:27:04
It feels like uncharted territory.
1:27:07
When I see things like the effect of the like button or endless scroll or feeds, there's been a conversation about the effect of those technologies for a long time, but this is the first time I've seen them actually been, you know, in the court of law. That's a great question.
1:27:27
I don't actually know if there's been any trials on these questions in other countries.
1:27:33
And other countries don't always have a jury system like we do.
1:27:34
So, I do think we are in some new ground here. Yeah.
1:27:39
Having said that, other countries often can regulate the specific mechanics of online publishers in ways that the First Amendment may not protect for sure. here.
1:27:50
So, the other countries might very well have already dictated that certain things cannot be done that are part of the litigation now. Yeah.
1:27:56
So, do you think that there's a hope for sort of new federal regulation alongside what is going on with Section 230 that sort of sets the rules of the road at a national level that then if you're in compliance to, you can't be held guilty of, you know, this these all these lawsuits?
1:28:19
It's possible that we could get some kind of federal legislation that provides some kind of security or safe harbor for the defendants Yeah.
1:28:27
that would also preempt any of the state laws that would conflict with that.
1:28:29
I don't see that anywhere in the Overton window, you know, the window of what's actually being debated today. Yeah.
1:28:35
But maybe if the services are feeling the pain, they would be want to to pursue that.
1:28:42
The reality is today the states throughout the country are passing laws that govern the same issues that are at issue in the litigation.
1:28:52
And so, unless there's some federal preemptive laws, the the defendants the social media services are going to have to navigate this ever-growing stack of state legislation. Mhm. Uh Jordy, please.
1:29:03
Do you think we get to a point where when you open a social media app, it has like an addiction warning like you might see on a cigarette on a on a cigarette box?
1:29:13
Is that is that where this is headed?
1:29:14
Or if this goes far enough are we are are the platforms running the risk of you know, needing to remove the like button because it it hurts people's mental well-being or or eliminating the the infinite scroll or or app level usage limits.
1:29:32
Like what are what are kind of like the extreme sort of [clears throat] downside scenarios for the platform?
1:29:43
Uh so there have been some states that have enacted mandatory warning labels like you're describing.
1:29:48
Those are going to be subject constitutional challenges.
1:29:52
It's not clear to me that they're actually constitutionally permitted.
1:29:53
For example, Texas' law has I believe been enjoined on that very point.
1:30:00
So the warning label approach, I don't think it's likely to be the final resolution in any of any of the disputes here.
1:30:08
I think that that's going to be an effort that probably isn't going to either solve a problem or be constitutional.
1:30:12
Um it is already the case that states have passed laws that have done things like tried to ban auto scrolling or infinite scrolling or auto play or the like button or like counts or whatever.
1:30:27
States are going to get to that level of granularity and they're already doing so.
1:30:31
Many of the things that are already part of social media features today are regulated by state laws that are on the books but possibly being in the process of of being challenged.
1:30:42
Um and I think the bigger question isn't will we you know lose our like button or will we lose infinite scrolling.
1:30:49
I think we would consider that for those of us who are aficionados of social media who think that there's value to them, we would consider that to be maybe the best possible outcome.
1:30:59
I think the more serious outcome is what social media services drop out of the industry entirely, what social media services add barriers to user populations having access to social media and how much we see the circumscription of social media conversations entirely.
1:31:17
In other words, I don't think we should assume that social media will exist in its current form in the future.
1:31:22
The question is whether we will even have social media in the future.
1:31:26
That I think are the stakes of the cases and the legislation. Yeah, yeah.
1:31:31
Yeah, that's fascinating.
1:31:33
Um what other industries have been through this type of pivotal moment?
1:31:41
And where where should we be drawing analogies or where should we avoid drawing analogies?
1:31:45
People have said social media is the new cigarettes.
1:31:49
Jordy was making a point about the warning labels on cigarettes.
1:31:51
It feels like that might not be the actual best analogy.
1:31:55
I was talking to Tyler on our team about the risks associated with driving a motorcycle.
1:32:00
And I was making the point that there's an instruction manual manual that you buy that you get that you get with a motorcycle that you know puts a lot of the risk on you if you choose to Well, yeah, if if if if this progresses like the precedent it sets is like okay, fast food companies shouldn't be able to use bright colors in their logo.
1:32:21
>> a lot Yeah, there's a lot of difference there.
1:32:23
Musicians shouldn't be able to play hooks that are just too good. >> Maybe, I don't know.
1:32:27
Yeah, but but where do you think the the best analogies are?
1:32:33
Um I'm not a fan of analogies between online and offline activities.
1:32:39
And in particular, I don't like the analogy to tobacco.
1:32:40
And let me make clear why and I think that'll start to enlighten where the risks and opportunities are.
1:32:48
Tobacco we would generally say there are no health benefits to consuming tobacco.
1:32:52
Nobody is healthier because of that.
1:32:55
It's just either neutral or negative.
1:32:58
But social media consumption has many social benefits.
1:33:01
There are many communities that that are thriving online and who are I think just as worried and concerned that their benefits are at risk in this litigation without them even having a say in that.
1:33:15
So unlike tobacco, social media is a mix of potentially very helpful things and things that could potentially be harmful for some of its consumers.
1:33:25
And those kinds of mixed uses technology that have both benefits and potential detriments are really I think a better analogy than tobacco.
1:33:35
And I don't know that we have great circumstances where we can point to where mass tort litigation has targeted and potentially removed from the industry these mixed use scenarios.
1:33:50
And in the end, the things that people are being addicted to or that are alleged to be causing harm are people talking to each other.
1:33:56
And that kind of speech related theme is unlike almost any physical product that we might draw an analogy to.
1:34:06
Yeah, that it's a fascinating case.
1:34:06
We really appreciate you taking the time to come chat with us about it.
1:34:09
I hope you have a fantastic rest of your day.
1:34:11
Yeah, come back on as there's more news.
1:34:13
Yeah, we'd love to talk to you again in the future. This is really helpful.
1:34:17
Been great talking to you.
1:34:19
Thanks for the opportunity.
1:34:19
Have a great rest of your day. We'll talk to you soon.
1:34:23
Our next guest is in the TVP ultra room.
1:34:25
First, let me tell you about Railway.
1:34:27
Railway is the all-in-one intelligent cloud provider.
1:34:28
Use your favorite agent to deploy web apps, service databases and more while Railway automatically takes care of scaling, monitoring and security.
1:34:36
We got to make it illegal if I drop a good one-liner in a group chat.
1:34:38
It should be illegal for people to chime in, react, hopefully get get some laughs.
1:34:45
The like button's going to be like a circle.
1:34:46
Good to have you here, dude. Good to meet you. How you doing?
1:34:51
Introduce yourself for those who are not familiar since it is your first time. My name is Nima Jalali.
1:34:56
I'm the founder of Salt N' Stone. And founder and CEO.
1:34:59
Yeah, take us take us back.
1:35:01
And I'll I'll give some context.
1:35:02
So I met Nima recently moved into into my area and I think we met within like a week of of you moving in and so I have not I haven't even gotten like the full story even though we've been hanging out the last couple weeks. Cool. Yeah, full story.
1:35:17
I was a pro Yeah, I was a pro snowboarder.
1:35:20
I heard you're from Pasadena. Is that right? Yeah. So I'm from La Cañada. >> No way. That's awesome. And so grew up there.
1:35:25
I was obsessed with skateboarding and then got into snowboarding and started going to those local mountains Right, Mountain High, Big Bear.
1:35:31
>> No, like Mount Waterman and it used to be called Kratka Ridge. Have you heard of that? >> Yeah, yeah.
1:35:35
Yeah, and so back in the day, you know, when I was in high school, we had you know, El Niño winters.
1:35:40
Like a ton of snow and they would actually operate.
1:35:42
They don't operate anymore.
1:35:43
And so I just I would just get out of school at 12 every day and go up there 5 days a week.
1:35:46
And I got good and went off and turned into a pro snowboarder. What does that mean?
1:35:52
Does that mean like speed competitions, trick competitions? What are you doing?
1:35:56
Cuz there are there are multiple there are multiple ways to become a professional snowboarder, correct? More like freestyle.
1:36:03
Yeah, so there's there's basically like two paths.
1:36:05
There's like think like lifestyle guy who's like going around making movies all the time.
1:36:12
And then there's like the competition track and there's some crossover.
1:36:15
Generally, there's like you you have sponsors in both departments but one one person is focused on like winning contests, going to the Olympics, going to the X Games, doing things like that.
1:36:25
And then there's then there's the more like guys that might do back country or street or park but they're focused on producing like parts basically. Got it.
1:36:33
I didn't know you knew so much about it. I know a lot.
1:36:37
Yeah, so I wasn't the contest guy.
1:36:39
I was more in movies and in magazines and stuff. Yeah.
1:36:41
Um so went off and did that.
1:36:44
>> How long were you doing that?
1:36:44
Uh pro for about 10 years.
1:36:46
From about from about 20 to 30. That's awesome. Yeah. Yeah, it was amazing.
1:36:51
I mean that was like my college really.
1:36:53
>> Yeah, that must be so much fun. It was fun.
1:36:54
>> What is the what I feel like entrepreneurs can probably resonate with what like a pro snowboarder is doing where your job is to basically produce right like a banger part a season potentially multiple and there's like this where you're basically like >> part?
1:37:12
Like that's like a 5-minute video that might be released independently or as part of an entire movie.
1:37:17
And so your job is to do enough tricks, stomp them Yeah.
1:37:22
as Nima would probably It's a lot Yeah, it's a there's a lot.
1:37:25
I mean there's there's like you pick out a song you you know, that you want to have in your part.
1:37:31
There's first part and then the most prestigious is being in the the last part, you know, in the in the video.
1:37:36
Like everyone So it's like you got this video and everyone's supposed to be on the same like kind of like team to make this best video.
1:37:42
There's like probably like 10 snowboarders going after and doing it.
1:37:46
But there's a little competition within that cuz everybody wants to get last part. You know what I mean?
1:37:49
And so it's it's not a team sport, you know.
1:37:51
You're really out for yourself and like there are there are a lot of lessons that you learn especially growing up skateboarding, you know, where it's like fail fail fail fail.
1:38:01
Like trying to like learning how to kickflip takes you 6 months of just failing and then and then you figure it out.
1:38:07
And so Yeah, then the other the other thing is these parts come together.
1:38:09
It might be like 4 or 5 minutes, right?
1:38:12
It's just one trick after another but you're missing Sometimes they'll include it but they're missing like the blooper reel which is like sometimes you have to fall really really hard 20 times in a row to land the one that you make it look easy. And that gets cut out.
1:38:29
So I feel like there's so many there's so many lessons out of that.
1:38:33
You know, a lot of successful entrepreneurs would have would have you know, failed miserably for years and then they have that breakthrough kind of like product or feature or whatever it is.
1:38:43
In snowboarding, it's happening on like a day-to-day basis where you have like one season, right?
1:38:47
To put together your part and you're kind of like racing against mother nature in some sense.
1:38:52
Can you chase the winter into the southern hemisphere effectively? Yeah. Yeah? Yeah, yeah.
1:38:59
So you would be how many days would you actually be snowboarding over a year? I mean 5 days a week.
1:39:05
Like [clears throat] I ended up I would live I lived in Tahoe, Mammoth, Utah and all that but I I ended up landing in Big Bear just because it was like the weather's always good for if you want to just snowboard every day and and train.
1:39:18
The weather's always, you know, sunny and nice and it's not like icy or cold.
1:39:22
So, I would just go there and snowboard every day and then fly out of LAX to wherever I needed to go.
1:39:26
>> Big Bear Big Bear is like basically one lift that you're just going around and around and there's There's practically the best snowboard park.
1:39:31
50 50 features that you can hit on one.
1:39:34
So, you like go and you might be hiking like a little bit on one feature. >> Yeah.
1:39:39
Uh but but you're basically lapping it.
1:39:40
So, people that like don't like park go there and they're like this is the worst mountain ever.
1:39:44
Like if you're used to skiing in Mammoth or Tahoe or Colorado.
1:39:47
But if you just want to ride park Big Bear is incredible.
1:39:51
Jordy, we're going to have to go, man. >> I know. I know.
1:39:52
No, I went I went through I I did I did almost like 50 days, I think my junior year of college a lot at Big Bear.
1:39:59
I would just go up and lap lap the park. >> Nice.
1:40:02
Um a lot of good memories.
1:40:04
>> Yeah, so it's it's a project.
1:40:04
It's a project that you're What's that?
1:40:07
>> you ski in the southern hemisphere?
1:40:07
Um If it's If it's summer here, I imagine that even Big Bear there's no snow and so you have to go to the southern hemisphere.
1:40:15
>> If the only time I snowboarded in the summer was going to Mount Hood where it was like there's a glacier.
1:40:18
Okay, so it's still it's still snow.
1:40:20
I don't >> There's still snow.
1:40:22
So, it's it's in Mount Hood and and they have like the summer camp. Okay.
1:40:25
And so these kids go and a lot of pros go and stuff.
1:40:27
But honestly, during the summer I would just skate I would skateboard. Yeah. >> sense. Okay.
1:40:33
Okay, so the reason you're here is because you built Salt & Stone over the last 8 years.
1:40:39
Exit partially exited this week.
1:40:42
I don't know I don't know which I know the numbers.
1:40:44
I don't know what numbers you're you're disclosing.
1:40:48
But but yeah, take us through what was what was the transition like?
1:40:50
I'm assuming you didn't just like retire and immediately start Salt & Stone or was it effectively instantly?
1:40:56
Um so, I I had a couple of ventures within that industry like the the surf skate snow world.
1:41:02
And then, you know, Salt & Stone was this idea that I had that I had had and It's like I don't know if you can give any context on that, but like brutal industry because every single pro and everybody adjacent also wants to start ventures Yeah. >> within the industry. >> Yeah. Yeah. That's true.
1:41:21
And but I mean there's just such a ceiling in that in that world, you know, unless you're like end up being a Burton or a Quiksilver or something like that, right?
1:41:30
>> Yeah, and even those brands have struggled. Totally.
1:41:31
Um so, I knew I knew I wanted to do Salt & Stone and you know, I wanted to do something on my own to be honest with you.
1:41:37
I had you know, just I had business partners and everything and and I wanted to just see how far I could go if I just went like all in 100% like not have to you know, uh worry about waking up at 2:00 in the morning and doing, you know, emails and just just going so hard and and just I could justify that if it's just like all me and I'm just like going for it. And so, um yeah.
1:41:55
And so, transitioned over to that full-time and it's been just a rocket ship, man.
1:42:00
It's been such a great such a great >> Yeah, you guys did 165 million last year. Scaling still.
1:42:07
What was the first product?
1:42:09
The first product was sunscreen, actually. Yeah.
1:42:11
So, sunscreen was >> is like a brute is I would say like from my perspective sunscreen's like a brutal category cuz like a lot of people use it throughout the year, but like much fewer people actually are using it enough to like need to even be on a subscription.
1:42:28
And then often times you're buying it like just in a random hotel like, you know, retail store because you're on vacation.
1:42:35
Anyways, but How did that go?
1:42:38
>> always wanted to do deodorant and and sunscreen was the it just it just happened faster as far as searching for the perfect, you know, chemist contract manufacturer and and all that stuff to bring it to life.
1:42:46
And so, sunscreen came out.
1:42:48
The the brand was profitable from day one.
1:42:50
And then when we launched deodorant >> How did you sell Were you just selling it D2C or >> So, we had some retail on day one.
1:42:58
So, I had retailers lined up.
1:43:00
We had I think about 40 to 50 of them.
1:43:02
And so, as soon as we were shipping orders we were collecting payment.
1:43:05
And so, you know, I funded it out of my own pocket to start.
1:43:07
But but was able to pay myself back pretty quickly and and you know, Were those 40 or 50 stores were those individual stores or chains or >> They were individual stores. >> Individual stores. Yeah. Yeah.
1:43:19
And then it was when we launched deodorant was really when it you know, stores started coming to us, you know.
1:43:25
What's the What What are the economics of like getting one sunscreen product?
1:43:29
Sounds like one SKU into one of those stores.
1:43:31
Are they buying like a $100 box or Well, there was a minute there's a minimum, you know, like and I from my memory I think it was like a case pack of 12 sunscreens that came out to like 300 bucks or something.
1:43:44
>> And then you can sell it at a markup and then MSRP. That's right. >> Okay. That's right.
1:43:48
Uh how how quickly did you realize that like my my experience having invested in CPG over the years is the number one the number one factor that leads to success is not like operational excellence.
1:44:03
It's not always just the team.
1:44:06
It's just like how good is the product?
1:44:09
And I've seen a lot of like exceptional teams that have like all the operational chops that have all the experience come out with a product that might be fine or pretty good.
1:44:17
Uh but they just don't go anywhere.
1:44:21
They can never reach escape velocity cuz the product fundamentally like doesn't really sell itself. Like you can sell it.
1:44:28
Might cost a lot to acquire customers.
1:44:29
If the sell-through is not that great.
1:44:32
Retailers don't really love it.
1:44:33
And when I first tried your deodorant after trying probably like 20 different like better for you deodorants, I was like wow, this product is like incredible and I've like retained across years even though I I don't even know that I've I maybe bought it on the website once.
1:44:51
Maybe bought it on different stores online or I just buy it in the grocery store, but I'm like permanently retained because I tried everything else and this is just the best. It like goes on well. It smells good.
1:45:03
and so I was just like sold off of that and you didn't need to be like the best at like email marketing to me or like have the best retention flows because I was just like it's a good product.
1:45:11
I've tried everything else.
1:45:13
And so, I'm wondering like how you how how quickly you realized that from like a product development standpoint.
1:45:19
How much of like what is your ethos around product development?
1:45:23
When is a product ready to actually go to market versus just still in that kind of testing phase?
1:45:28
>> Yeah, and that's why we launched sunscreen before deodorant because we were just trying to get everything perfect, right?
1:45:33
And so, we did something in deodorant that hadn't been done before especially in clean deodorant, you know, what was deodorants before didn't smell the way I wanted to, right?
1:45:44
Like they they weren't they didn't have the sophisticated scents and clean deodorants didn't work or they weren't really like a pleasurable experience to use and they certainly didn't look good like on the counter. >> mint. Yeah.
1:45:53
It's like I don't want to smell like toothpaste. >> Yeah. Exactly.
1:45:56
It's like you know, why shouldn't it smell as good as your your perfume or cologne, right?
1:46:00
And so, um just hitting it on all cylinders and making sure it's, you know, perfect.
1:46:03
And for me I was really making it for myself, right? Like what do I want?
1:46:07
And it turns out what I wanted was what everybody else wanted. So, Yeah.
1:46:10
Uh did the company ever almost die? No.
1:46:17
>> [laughter] >> This story It's been a dream It's been a dream come true, right now. Really?
1:46:23
>> [laughter] >> It's been fun.
1:46:24
You're It's so funny cuz cuz like the the classic philosophy and and ventures is like yeah, we almost here's this time we almost [laughter] died.
1:46:32
And and in talking to you like like getting to know you just just recently, it just kind of seemed like it was just like permanently up up into the right.
1:46:40
And you you you told me one story that was like not like kind of annoying around on the on the capital side, but nothing that was like I it didn't feel like you experienced that much hardship.
1:46:51
You kind [laughter] of you kind of just one-shotted entrepreneurship. >> That's amazing.
1:46:56
And it's so crazy cuz I know I know so many you started the company at like the peak of the D2C boom.
1:47:01
Like this was the time This was 2017. >> 2017. Right?
1:47:05
And so, this was the time that like everyone was like Red Antler, Gin Lane were just pumping out brands. >> Yeah.
1:47:12
There was so much capital flowing in. There was competitors.
1:47:15
There was like a Yeah, there was a school on the East Coast.
1:47:18
I forgot I I forgot the name of it, but they had like an MBA program that was like every single Not Harvard.
1:47:26
It was one No, there were a lot of there were a lot of MBAs that were Yeah, there was like every person in an MBA program would be like I'm building a D2C brand and they were just picking up And there were some really good outcomes that people were tracking against like Dollar Shave Club and Harry's and there were a number of companies where it was like oh, they did Warby Parker. They raised money.
1:47:44
They did the VC playbook and it sort of penciled out for everyone.
1:47:47
But then later people realized like oh, those were more like one-off exceptions to the rule where you get a Unilever who gets excited and buys a Dollar Shave Club for a billion dollars and maybe doesn't wind up realizing a billion dollars of value because it's just a young company. So, Yeah.
1:48:04
I mean honestly, it's I feel like it's just the power of a founder who's just going to be relentless and and go up against the big guys, right?
1:48:12
Cuz I interview people from the big guys all the time.
1:48:14
And I'm shocked at like how sleepy some organizations are, right?
1:48:17
And so, if you even have a team of three people that are just relentless and you guys know from like what you guys do.
1:48:23
It's like you can't compete with that.
1:48:25
I don't care how much money you have or what incubator you're in or what VC you know, starting you.
1:48:30
It's if you have a founder who's just going to be relentless and and How did How did the approach to funding evolve?
1:48:37
Like cuz you you said you were like profitable from day one.
1:48:39
You did raise at at a couple different points a little bit of money, but did you did you care about maintaining profitability or did you ever go to go through periods of growth where you thought okay, we can we can burn a little bit here to get to the next stage.
1:48:56
>> We've always been profitable.
1:48:56
That's always been important, right?
1:48:57
I just want to make sure the bank balance is growing.
1:49:02
The the raises were were secondary, right?
1:49:04
It was me sort of taking chips off the table.
1:49:05
The business has just been so profitable that we didn't really need to inject it with with with money, you know?
1:49:12
And so it's it's a healthy business, man.
1:49:13
I'm blessed and Angel capital?
1:49:15
[laughter] Not really my cup of tea.
1:49:19
Oh, it's it's just so it's so crazy.
1:49:19
I mean, I it just goes back to you guys nailed so many different elements of of the product and yet I know I know people that started deodorant brands during that same period that just didn't they just didn't didn't go anywhere.
1:49:33
It's weird that >> team like? The early team? >> Yeah. Yeah.
1:49:37
So so you have the idea, solo founder, but and you mentioned co-packer, did you work with a formulator?
1:49:42
Do you What did you hire salesperson first, operations manager, somebody just to help you, personal assistant? Like what was the stack? >> Yeah.
1:49:50
So first two first 3 years was myself. Just just myself, right?
1:49:52
And and then the for for that it was really working with contract manufacturers, chemists, but also, you know, bouncing off my internal like network on like, "Hey, got this deodorant sample."
1:50:04
Like people I trusted on their their taste and what, you know, "Here's the goal.
1:50:09
This is what I'm trying to achieve here.
1:50:10
Like let's let's test it."
1:50:10
So so that, myself, you know, my wife like constantly were smelling each other's underarms, you know?
1:50:18
[laughter] Is it working? in the lab.
1:50:19
Yeah, you know, it was just relentless, man.
1:50:22
It was like we we know what we want in a product.
1:50:24
We see what else is out there.
1:50:26
We have all the other products on our shelf, right?
1:50:27
Like to just see what what they're like.
1:50:29
Let's make something better. Right?
1:50:30
And so and then 3 years in I hired I hired somebody who really took on all the ops.
1:50:36
All that stuff off my plate.
1:50:39
That's not where I excel, ops and like finance and like all that stuff. I'm more brand product.
1:50:42
Anything the customer sees, that's what what I love.
1:50:46
And so when she took all that and she really excels at that stuff and it was me and her for like 3 years 4 years after that. >> Wow.
1:50:52
Or like like 2 3 years after that.
1:50:55
There was just a couple people.
1:50:56
2022 and you're still two people? No, 2019.
1:51:02
>> No, it was like yeah, sorry.
1:51:02
My years [laughter] are yeah.
1:51:05
>> Three years solo, three years of two people, and six years of >> we then we start hiring.
1:51:09
So she came on board and and and it really I saw how how it would really excel the business and I got to focus on what I like to do. >> Totally.
1:51:15
She came in and crushed it way better than I could do on the other stuff, 3PL, logistics, all that stuff.
1:51:20
And then I saw power of team.
1:51:20
And then from there we just started hiring people, hiring people.
1:51:23
And then and then just got the confidence to keep hiring as as you know, cuz more we hired Yeah.
1:51:29
>> then the business kept growing and growing and growing and then all of a sudden it's Sure.
1:51:32
166 and we're the best-selling deodorant on Amazon. How big is the team now? Uh 50 55. >> really tight. >> It's really tight. It's really good.
1:51:39
We have a high bar for who we bring in.
1:51:41
Like it's, you know, we'll interview people and I'll know within 5 minutes like Are you in the office or remote? No office. All remote.
1:51:48
>> [laughter] >> All remote. Yeah.
1:51:53
>> [laughter] >> This is like the most insane the most insane stories I've ever heard.
1:51:58
>> [laughter] >> It's like, you know, most most of the time you get to this moment and you're just like the most battle-scarred >> [laughter] >> Telling you, man, we're blessed. It's been a fun run. >> Okay.
1:52:08
So walk me through the product portfolio expansion, how that happens, and then are you subdividing sales reps by region or vertical or channel? >> have sales reps.
1:52:22
>> You don't have sales reps? No. >> [laughter] >> No. Sales reps? Never heard of them.
1:52:27
So here's here's the thing. Here's the thing.
1:52:29
Like you got to create a brand that the retailer wants. >> Yeah. Right? Circle of life.
1:52:32
You don't want to go and just like push something down a retailer's throat and have your sales guy knocking on the door and all that stuff. And that was it.
1:52:38
Like really focusing like this wasn't all just like, "Oh, it's just happening. It's happening."
1:52:42
It's like an obsession, right?
1:52:44
Like I got I turned into an advertising expert.
1:52:46
For like 6 months all I did was want us to have the best ads, the best digital presence, right?
1:52:52
And like create a brand that the retailers needed to have, right?
1:52:54
And then from there then those retailers need to have you What was that What was that advertising process like?
1:53:01
Were you looking Were you reading Ogilvy, looking at the greats?
1:53:04
>> looking at all looking at all the all the competitors, seeing how they do, right?
1:53:08
And and really it's like not looking at the other indie brands.
1:53:10
Like looking at the big brands, like I've always wanted to take inspiration from the brands like like the Nikes of the world that are going to be here in 100 years cuz that's what I want this brand to be, right?
1:53:18
I don't want this isn't some like influencer brand.
1:53:19
I'm not an influencer, right?
1:53:21
I'm not in front of the camera.
1:53:23
Like this is something that I want to be a legacy brand that's here long after I'm gone.
1:53:27
So those are those are the brands I look at for inspiration.
1:53:30
And then how are you actually instantiating your learnings?
1:53:33
Like are you directing photoshoots? Are you casting models? Are you writing copy? No, no.
1:53:40
Once you go through that that 6-month brand exercise you become the expert.
1:53:44
Are you Are you like, you know, taking a project a brand project from start to finish or are you picking an agency or hiring people?
1:53:52
>> was It was start to finish.
1:53:52
So there was a time where I was picking out models, picking out photographers, videographers, helping with the edit, like all that stuff. The edits here.
1:53:58
And then go in Give me feedback. Yeah. Yeah.
1:54:02
And if there's static like still photos I would go in Figma, drop text overlay, figure out what to say, like all that stuff.
1:54:07
And yeah, I mean, I just threw everything at it, man.
1:54:10
All I did I gave up all like everything, all my hobbies, like snowboarding, skateboarding, like all that stuff.
1:54:16
Like I got into golf for a second. All of it ended.
1:54:18
Like it was just like I'm going to go in on this.
1:54:21
But like when you get a signal that the thing is working, then you want to >> balance is going up?
1:54:25
Bank balance is going up, you're having fun.
1:54:27
It's like really your purpose.
1:54:29
It's just like nothing else I want.
1:54:31
Like I want to build I want to build it, yeah.
1:54:34
>> What do you think about international expansion?
1:54:35
What do I think about it? Yeah.
1:54:37
How has your thinking evolved? What's the strategy?
1:54:39
Is that something that a lot of companies go through this moment where they're like maybe it's so operationally complex it'll change the business, so let's put it off.
1:54:49
Let's maybe wait until we're at a point where we can team up with a bigger company and through a merger or acquisition and let them bring their operational force so that you don't need, you know, a person in every locality because they will bring that to bear and you're set up for success. >> Yeah.
1:55:04
No, so we've already expanded internationally and and As I expected.
1:55:09
>> [laughter] >> Sephora Canada, Sephora UK, Space NK in the UK, Sephora Europe we just launched, Middle East, Southeast Asia, so on so on.
1:55:18
That being said, there's a lot of a lot more opportunity.
1:55:19
And that's one of the reasons I chose Advent to be to be the the partner here.
1:55:23
Is because they have a strong expertise in international and I feel really great about them.
1:55:27
I mean, look, my my goal was never to just exit out fully and just put it in somebody's hands and let it go to [ __ ] Like that's not what I want.
1:55:35
I want the brand to I want I want my grandkids to look at this thing and be like, "Oh, yeah, that's what my grandfather built."
1:55:42
You know, I want it to be around.
1:55:42
I want it to be, you know, what it was always meant to be and not turn into some, you know, discount brand. >> So Yeah.
1:55:48
What what was the How how many Did you have a bunch of opportunities to sell prior prior to this moment?
1:55:54
I'm assuming people were just like kind of seeing public metrics and sell-through and all these things and hounding you at different points.
1:56:03
What was the process of like knowing when the time was was right?
1:56:06
We had a lot of private equity reaching out.
1:56:09
A lot of people reaching out in general.
1:56:10
And so I I worked with Raymond James who who I love and I would just forward it to them and they told me when it was time and it was like, "Let's go. Let's go explore.
1:56:18
Let's go explore the market, yeah."
1:56:21
So this was not a story where you met your acquirer like years and years ago?
1:56:25
We We've been talking for about, you know, for several months, 6-plus months, you know?
1:56:30
And I really really like them, you know?
1:56:32
And for me it's when I did the deal with Humble Growth 2 years ago, I you know, we had 15 private equity funds to choose from.
1:56:39
And I I liked them because of of who they of >> [laughter] >> No, we had a lot.
1:56:45
We had we had a lot of bidders, you know?
1:56:49
You know you know how If you were looking for, you know, the the hero's journey founder stories, this isn't it.
1:56:54
You can't >> [laughter] >> You can't turn it off.
1:56:57
I mean, it is It is It is in a way.
1:56:59
It's missing some plot points.
1:57:03
There's a lot more to it.
1:57:05
But yeah, I mean, I it's it's just I choosing good people to work with, right?
1:57:08
People who can do it with integrity and and I want to work with and that like are aligned vision-wise on like what the brand is going to be in the future and and let's go build that together. Yeah.
1:57:19
What What advice have you been giving to people that want to follow in your footsteps?
1:57:24
That this is like kind of what I feel like every CPG founder imagines is just like, "Yeah, I'm going to be building for like 8 years and then I'm going to sell for you know, half a billion to a billion to a strategic."
1:57:38
And yet, you know, the hit rate is obviously, you know, something probably like, you know, one 1%, right?
1:57:42
Um And over the last year there's I feel like there's actually been a dip in new new brand formation.
1:57:49
At least that's what Sean Frank Sean Frank was was um was I think mentioning on a on I think at the end of last year.
1:57:59
And his point of view, he's a founder or the CEO of Ridge, and he's like, "Okay, in 2 years are people going to want new brands to choose from?"
1:58:09
And his point of view is like 100%, right?
1:58:11
Like there's constantly a desire for newness and that kind of founder-led product development approach that made Salt & Stone what it is today.
1:58:21
So yeah, what what advice are you giving?
1:58:23
I mean, honestly, like I [clears throat] didn't read any entrepreneurial books or really listen to any like entrepreneurial podcast or anything up until [laughter] recently.
1:58:32
I just went off instinct.
1:58:32
Like you got to fight We're fighting for our life.
1:58:33
My advice would be would be to go all in.
1:58:36
Like you can't You can't go and be like work-life balance and like I want to, you know, check out at 5:00 cuz like there's going to be someone right behind you that's going to come and take take your place and be that brand that comes in and does what you want to do if you're going to just Yeah.
1:58:49
So it's like you got to You got to make sure you love it You love it cuz that's the way you're going to be able to do it, you know, basically around the clock from the moment you go to sleep to to wake up, you know, it's it's uh Um, you got to love to do and it's got to be your passion, right?
1:59:02
And so, you got to just just go relentlessly and know I would say like forget the work-life balance stuff. You just got to go hard.
1:59:09
You got to go all in and just use your instincts, you know, you just got to you got to be competitive and go after the big guys and don't be afraid and just go for you got to go for it. Go all in.
1:59:17
Yeah, I like the focus on on the actual incumbents.
1:59:20
Like a lot of people will focus too much on like, "Okay, who are the other new brands in my category?"
1:59:25
And just actually studying like, "Okay, what what makes the big players actually successful?"
1:59:29
It's like, "Okay, massive retail distribution, like actual like IP on the product side, all all these things."
1:59:37
Yeah, I mean for for us it feels like in beauty there was such a playbook.
1:59:41
Like every brand looked the same.
1:59:43
All the content was the same.
1:59:44
It was like pay the influencer, have the influencer talk about the product, post it on your social, like over and over again and that's the playbook.
1:59:51
And I I didn't want to I didn't even know anything about beauty, really.
1:59:54
Like I'm not I don't come from a skateboarder, you know, I don't come from beauty.
1:59:56
I like I like fashion brands.
1:59:57
I like, you know, lifestyle brands.
2:00:00
And so, coming in and just being inspired by you know, the Nikes of the world, the the big brands instead of looking at beauty.
2:00:06
I think played in our favor cuz we came out and it was like, "Oh, this is different, you know?"
2:00:10
Did you do any like community marketing?
2:00:13
Because sometimes there's a brand that I love.
2:00:16
What's maybe it's like I would say like if a deodorant brand was putting together an event, I don't think I'd be like, "I want to I got to be there."
2:00:25
But did you did you do anything that like worked that broke through that like was material to the business?
2:00:30
Because I feel like sometimes it's very distracting for CPG brands to like do IRL marketing early on cuz I'm like I usually will ask a founder like, "Okay, how many units have you sold in the last month?"
2:00:41
And they're like A thousand. A thousand.
2:00:43
I'm like, "Okay, then don't spend $30,000 on like some activation."
2:00:48
Like you should just like make a product that actually sells well and then you'll have opportunities to do things.
2:00:53
Yeah, I mean early on that was my philosophy, too.
2:00:55
It's like, "Why are you going to go waste money on something that you don't know is is going to move the needle?"
2:00:58
So, it's like spend it like if our ads are going well, like let's just pour more money into that versus like doing some pop-up somewhere.
2:01:03
But now we're at the point where those IRL pop-ups it's I think it's good.
2:01:06
It's good brand building, you know?
2:01:08
And so, we we do that now. We do pop-ups.
2:01:12
>> Yeah, but pop-ups are I would say different than like lifestyle event that is just like a bunch of people hanging out. >> Yeah.
2:01:19
What about owned retail, like flagship store?
2:01:20
Have you looked into that?
2:01:22
>> We're looking into it. So, yeah, yeah.
2:01:23
So, so we're looking at we're looking right now. >> Yeah. Yeah, yeah.
2:01:26
But I mean says a lot that you didn't jump into that in year two, for example.
2:01:30
>> Yeah, I mean it's, you know, it would be tough to do that and maintain profitability, right?
2:01:33
And so, it's like you're fighting for your life.
2:01:35
You want to make sure it's it's profitable.
2:01:36
Yeah, it's balancing act like you need enough awareness that you're actually going to get upside, but then if you have complete awareness, it's probably like you're already stocked everywhere.
2:01:44
So, it needs to be in the sweet spot. Yeah. Makes sense. Interesting. Such an amazing story.
2:01:51
>> [laughter] >> Honestly, it's like it's like a very unique It's It's It's amazing because it's like it's exactly what people set out to do and yet it's so uncommon to just like go up into the up into the right every month.
2:02:03
And it's very refreshing.
2:02:05
It's like work hard and don't get caught up in a bunch of you know, >> Stuff that doesn't matter.
2:02:12
>> stuff that doesn't matter.
2:02:12
>> Do the things that matter, right? >> He's gone.
2:02:14
You're going to be relieved.
2:02:15
He's now a David Senra enjoyer. Oh, really? Love his podcast. Yeah, yeah, yeah.
2:02:19
So, he's he's getting to enjoy David Senra after climbing the mountain. >> That's amazing. >> That's funny. I hear that.
2:02:24
It's like I hear the hustle stuff and like you got to do this and you got to go all in and I'm like yeah, like I naturally kind of do that, you know?
2:02:30
It makes me >> [laughter] >> It works.
2:02:34
But but even yeah, I mean David talks about this a lot where like even like a lot of his audience members are not listening to it and saying, "Oh, I never considered working hard."
2:02:43
They're saying like It's a reminder. It's a reminder.
2:02:47
It's a It's a meditation on their current philosophy and then it's a bunch of other examples and just confidence to continue being different because there's a lot of people as simple as like as like focus is, there's a lot of people >> that feel pressure to continue their golf trip.
2:03:02
>> to have this super complicated seven-part strategy?
2:03:05
>> That That and then also just like the work-life balance thing.
2:03:06
Like there's a lot of pressure to not be that person who's not who's who's turning down invites to the golf trip. Right.
2:03:12
And that's and and so, the founder's podcast definitely like reinvigorates you to like add more confident that you're not crazy.
2:03:20
You're not the only person doing this on Earth. 100%.
2:03:22
Yeah, I love I love his passion. It's great.
2:03:25
>> I'm going to I'm going to introduce you guys.
2:03:26
You guys are going to have a lot of a lot of fun. >> will be great.
2:03:28
But brand-wise though, we are just getting started.
2:03:30
Honestly, it feels like that, you know?
2:03:31
And so, this partnership's exciting and can't wait to to keep building this thing. Yeah. >> Amazing, dude. Congratulations. Thank you so much. Thank you.
2:03:38
Yeah, thank you so much for taking the time to come chill. >> at the ranch. This was great.
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2:03:56
Let me get my headphones back in. Back to our guest. >> A lightning round. Yes, of course.
2:04:02
Yes, we have John McNeill, the author of The Algorithm. [music] What's going on? my IEMs back on. How are you doing, John? >> Hey guys. Hey, how are you?
2:04:15
[laughter] I need to adjust my headphones. Great to meet you.
2:04:19
Great to have you on the show. Here we go.
2:04:21
We're We're having We're having a lot of fun over here.
2:04:23
We just had a friend of mine, Nima, come tell a story.
2:04:27
He just exited He's sort of a one-step algorithm.
2:04:30
Yeah, he His algorithm was just like focus, work hard, and he one-shotted entrepreneurship.
2:04:35
He was like, "I think I'm going to just be a solo founder.
2:04:39
Then I think I'm going to build remote."
2:04:40
And then scaled to 165 million of revenue in eight years profitably.
2:04:43
And then And Jordy asked him like, "Did the company ever die?"
2:04:47
He's like, "No, we were all profitable."
2:04:49
>> Did it ever almost die? >> Come close to dying? He's like, "No. No death scares." >> No.
2:04:53
It was like the >> [laughter] >> the opposite of Elon. Yeah, yeah, yeah.
2:04:56
But, you know, that that's the beauty of the show.
2:04:58
We go all over the place.
2:04:58
We like to talk to, you know, entrepreneurs who have all sorts of different paths.
2:05:03
And fortunately, we have someone here who can tell us about Elon Musk's journey, which has been much more tumultuous.
2:05:07
But, why don't you start with an introduction and how you got to a place where this was the book that you wanted to write?
2:05:14
Yeah, I wanted to tell the story of how like Tesla and SpaceX to a certain extent work on the inside.
2:05:19
Like there's And I asked Walter Isaacson when he was writing his book on Elon, like why don't you tell the story of like how Jobs runs his runs Apple cuz there's a really specific way Jobs ran Apple and his his other companies.
2:05:31
And it's the same with Elon.
2:05:33
There's a really specific like operating system and way inside of Tesla.
2:05:36
Why don't you write about that?
2:05:37
And Walter said, "I don't write business books." Yeah.
2:05:39
Yeah, I write character books. >> Character books.
2:05:41
So, he turned to me and said, "You got to write that book." Yeah.
2:05:43
And so, that's the short answer.
2:05:45
When Walter Isaacson tells you to write a book, you write a book. You better listen.
2:05:49
Okay, so talk to me first about the process of distilling the work philosophy, how Elon works inside of Tesla.
2:06:01
And then and then actually take me through the algorithm, the steps.
2:06:04
Because people hear things like first principles, engineering mindset.
2:06:06
But I think all of that is pretty vague and I think you can concretize it for us pretty well.
2:06:13
Yeah, so basically this framework came from two things.
2:06:15
One was all the mistakes we made.
2:06:17
So, do you talk about tumultuous?
2:06:19
A lot of that was self-caused.
2:06:20
And we would do like postmortems and say like, "How the heck did we get ourselves in this situation?"
2:06:25
And "Let's not do this again.
2:06:25
And so, what's the principle that would keep us out of the ditch?"
2:06:31
And so, that's how the algorithm got developed.
2:06:33
And it was with the goal of pushing decision-making out to the edge.
2:06:38
And so, we wanted two-way door decisions, make those at the edge, and here's the framework you can use.
2:06:43
And it turned out the framework drove innovation, too.
2:06:47
And so, it starts with no surprise, simplifying.
2:06:51
And the And the first three steps of the algorithm basically are you got to simplify.
2:06:55
So, the first one is you question every requirement that you're given.
2:06:58
Is it a requirement of physics?
2:07:01
Is it Is it a requirement of safety?
2:07:01
Is it a requirement of law?
2:07:04
And if you can't answer yes to those questions, then you then you got to consider deleting that requirement.
2:07:07
So, example of that is we're trying to sell $100,000 things online.
2:07:12
Nobody'd done that before, sight unseen.
2:07:16
And it took 64 clicks to buy a Tesla.
2:07:19
And 44 of those clicks were in the auto loan and auto lease documents. Woah.
2:07:22
And it turns out an auto loan document's 12 pages of paragraph after paragraph after paragraph of how the bank's going to the bank's going to basically kill you [laughter] if you don't pay. Yeah.
2:07:31
And so, I asked the lawyers, "Can you come back to me and tell me how many of these paragraphs are a requirement of law or regulation?"
2:07:40
They came back not much longer not much time later and they said, "None." Woah.
2:07:46
And I said, "What do you mean?" They said, "None."
2:07:48
"All of this stuff, all these paragraphs were inserted by well-meaning corporate lawyers who were trying to save their companies' necks.
2:07:56
And none of this is a requirement of law."
2:07:57
And I said, "So, literally I could get down to a one-page or maybe a one-paragraph loan that said, 'Here's how much the car is.
2:08:03
Here's how much the interest rate is. Here's the time period.
2:08:07
Here's the monthly payment.' That's four sentences."
2:08:10
And so, like we did goofy stuff like that.
2:08:12
We would question a loan doc.
2:08:12
And it turns out that if you eliminate 44 clicks, you sell a lot more of these $100,000 things online.
2:08:20
And so, that's the first step of the algorithm.
2:08:21
It's just question every requirement.
2:08:22
Second is that you make it you make the new the new thing or the new product as simple as possible, fewest steps, delete everything that the customer doesn't pay you for.
2:08:33
And then you speed it up and cuz speed reveals all kinds of warts.
2:08:37
And if you can make something go fast, it's got to be simple and it's got to be really good.
2:08:41
So, good, fast, and cheap is actually false. You can get all three.
2:08:45
And then this is this sounds nuts coming from a Silicon Valley perspective, but you automate last.
2:08:51
And it's not so nuts when you consider like how DoorDash started.
2:08:56
Five Stanford CS majors in a dorm room.
2:08:59
They put up a PDF with a phone number so that they could figure out the workflow of the business before they automated anything.
2:09:05
Same with the Amazon guys.
2:09:05
They were they put up a webpage to order books, but they had no fulfillment capability.
2:09:11
So they would ran down the street to a bookseller, bought the book you ordered, dropped it in a box so they could learn the business.
2:09:17
And we found this time and time again.
2:09:19
When we automated first like the auto the Model 3 production line, we automated at first and it never worked.
2:09:25
And so the only way we could save the company was build a tent outside the factory and start building Model 3s by hand.
2:09:31
Uh and we learned automate last over and over and over again and it became religion.
2:09:37
So that's the five steps to the algorithm. Yeah.
2:09:39
Uh there's been a lot of speculation about the next Tesla vehicle.
2:09:41
Somebody was proposing a three a car with three sets of doors for big families.
2:09:48
That doesn't sound simple. >> that flies.
2:09:51
There's the Cybertruck Cybertruck turned into a Suburban.
2:09:57
Uh what's the product that you want?
2:10:01
I do want the Cybertruck. Yeah.
2:10:03
>> Here's why like like when you go to when you go to Tokyo or you go to China, they have these like really tricked out minivans. >> Yeah.
2:10:09
And they have every feature.
2:10:09
It's like sitting in the best man cave ever. Uh and I want that car. Yeah.
2:10:16
I think that'd be a good one. Um >> Yeah.
2:10:18
What do you think translates from a hardware company with very very sleepy incumbents thinking of the car industry, the space industry?
2:10:30
What translates to software development, artificial intelligence, app building, social networking?
2:10:35
What's going to transfer of the algorithm of the Elon way of working and what might not?
2:10:44
That's a really good question.
2:10:44
I think what transfers these these principles transfer of like simplify and kind of go slow to go fast as you're developing like the software.
2:10:56
Basically your first your first architecture what the software is going to look like and what it's going to do and really determine like what are the key what are the key features or value we're going to ship and just concentrate like heck on that.
2:11:09
Like keep it simple first and and and a lot of people have talked about this as a minimum viable product, but I think that's still really true.
2:11:18
And then try to make the product as perfect as possible. Yeah.
2:11:19
And like they like you take Claude right now.
2:11:21
The reason Claude code is winning is because it is the best and that came out of long discussions about how to simplify the architecture so it could actually do things that Codex can't do, that Cursor can't do.
2:11:37
And um and I think that's the piece that translates.
2:11:40
Like simplify down to the two or three things you absolutely have to crush.
2:11:45
And then literally go crush those.
2:11:45
Yeah, within Tesla is there a a noticeable bifurcation between the software and engineering orgs and the hardware engineering orgs?
2:11:57
You know, one of the things that Elon believes in is hiring what he calls orthogonally, which means basically that nobody has any experience in the industry cuz he doesn't want you coming in with a preconceived like set of frameworks or preconceived notions.
2:12:09
And so we were all software people.
2:12:12
Like I was a six-time software serial entrepreneur.
2:12:16
And I we didn't know I didn't know anything about hardware.
2:12:17
I never been in it before. Mhm.
2:12:19
Uh and so we approached every problem from a software first perspective.
2:12:24
So an example of that is like if you say, "Okay, to your last question like what do we have to crush in the car business?"
2:12:31
Well, we got to get an autonomous car.
2:12:33
Okay, to run software on an autonomous car the requirement of that is we have a single chip because we have more than one chip, now you've introduced latency and sinking and all that sort of stuff you have to do.
2:12:45
So we can only have one chip and that's the software first kind of mentality.
2:12:49
We're competing with people who are hardware first, who have 18 to 36 chips running in their car, which means they can never deliver autonomy because they're not thinking about software first.
2:12:58
And so that's software mentality gives Tesla an edge kind of every day of the week.
2:13:06
A lot of people have been speculating about demotivation from SpaceX liquidity as the company goes out at a 1.
2:13:15
5 maybe 2 trillion dollar valuation.
2:13:17
There's a lot of engineers who are great.
2:13:20
They're about to have a lot of liquidity and maybe they will decide to retire is basically the thesis.
2:13:24
But we've sort of run this experiment with Tesla.
2:13:26
What was it like post IPO?
2:13:28
Do you have a read on on how the culture changed?
2:13:32
Did Did everyone remain interested in the mission or were there some people that actually did choose to sort of step step step back?
2:13:42
Yeah, I think the majority of people that were there for the mission, they're mission oriented and and size of their bank account over time grew, but it really didn't matter. Yeah.
2:13:49
Uh to them they were showing up every day to solve just to solve the next thing that was in the way.
2:13:56
There were some people that cashed out along the way, but they were kind of the minority. Sure.
2:13:58
And one of the things that Elon did was something that I had done in each one of my startups and a lot of entrepreneurs do, which is you kind of starve the balance sheet.
2:14:06
You raise only as much capital as you need because the the the first principle is you don't want your company to go soft.
2:14:12
And when people see a big number on the balance sheet, you're not close to death and people aren't like really really moving as fast as they can, aren't as motivated.
2:14:21
So even after we were public, we operated Tesla on a quarter's worth of cash, believe it or not. Wow.
2:14:25
And I kept saying to Elon like, "I would like a little breathing room." He's like, "No. [laughter] No.
2:14:30
Like we got it like we got to think about this like when we're young entrepreneurs.
2:14:32
Like if you're close if you're two steps from death, you operate differently."
2:14:36
So I was like, "Man, we have a quarter's worth of cash, but we have 70 days of payables.
2:14:42
That means we have less than three weeks of cash. Like this is tight."
2:14:45
Um but that kept everybody sharp.
2:14:49
And what we started to worry about was post like Model 3 and Model Y when we actually started to generate cash on the balance sheet, like how we could how we could make sure the company stayed sharp.
2:14:58
And um SpaceX has had this advantage of that for a long time and Gwynne and Elon are going to have to manage this now post IPO.
2:15:08
But my sense is most people are there for the the experience of working at a Musk company is that you are literally on the biggest challenge you've ever faced in your life and with the best people and you are you're doing the best work of your life.
2:15:20
And so that's what keeps most people engaged.
2:15:21
It is not the balance in their bank account.
2:15:25
>> do people stay engaged and so laser focused on like a singular mission when Elon has like a new hot thing every six months maybe and there's like it feels like if he were to share that cultural tenant of like try and solve every problem that humanity faces with the rest of the organization, you would have a very scattered organization, but that's not what we see.
2:15:46
So how does that dividing line happen?
2:15:50
So like I I started to get the entrepreneurial itch a few years in and so I went to him and said, "Hey look, you know, I you're you're starting Open AI, you're starting Neuralink, you're starting The Boring Company.
2:15:58
Like I got to scratch this itch, too." Yeah.
2:15:59
And he basically said you can't >> [laughter] >> because because I got to have you focused so I can go do these things. >> Sure.
2:16:08
But then it was pretty cool.
2:16:08
Like we designed this way that I could scratch my entrepreneurial itch, which was just doing it inside of Tesla.
2:16:14
So we invented mobile service.
2:16:16
We invented uh insurance inside of Tesla, which now is a third of the cash flow.
2:16:23
So I got to I got to scratch those itches, but you start to learn like Gwynne's job is keeping SpaceX focused.
2:16:29
My job was keeping Tesla focused so he could go exercise that DaVinci side of his personality. Yeah. Yeah, that makes sense.
2:16:40
Uh Jordy, you have anything else? This is great.
2:16:44
Where where are you investing mostly these days outside of the Elon orbit?
2:16:50
Yeah, so we start companies from scratch at my venture firm and we're investing in I would say the intersection of AI and the real world.
2:16:58
So what that means is like we pulled this amazing team out of Tesla that it did the supply chain automation and optimization and they've Uh we create we created this really cool platform for restaurant hospitality where at any restaurant you can get up and walk out without having to pay the check cuz it already knows who you are and what you ate.
2:17:20
So every restaurant becomes like a London supper club.
2:17:24
We're so we're we're deploying AI >> Which company which company is that? That's called Zume. Okay.
2:17:28
I I know a friend of mine has another company competing in that in that category. Same same pitch. Uh Yeah.
2:17:34
But uh I I'm sure he'll be devastated to know that a >> [laughter] >> a Musk-adjacent company is Yeah, there's room for more than one of us.
2:17:44
I like having competition in the and and that that's a really tough technical solve actually to be able to pull that off.
2:17:50
So there's it'll be protectable if your friend's company's working on it and there's room for both of us to swim in that big ocean.
2:17:56
What's your what's your advice for American auto manufacturers cuz it feels like they're just, you know, they're behind in autonomy, they're behind for even from a feature standpoint with a Tesla or BYD.
2:18:10
>> I see these electric cars out of China where it's like has 1,500 horsepower, it's as big as a Suburban and it drives itself and and then you're like and it'll cost $35,000.
2:18:21
[laughter] You're like, "That is impossible.
2:18:23
How can we possibly compete with that?"
2:18:26
So yeah, what should American automakers broadly do?
2:18:29
Well, this is a real is a real challenge that I that I'm a part of cuz I'm on the board of GM now trying to help them navigate this and and so like when I walk around the streets of Tel Aviv or Mexico City or Paris, you see all the BYDs. It's your point.
2:18:42
These are these are not crappy cars.
2:18:43
These are really good cars and at a really good price point.
2:18:46
They're at that price point because the government subsidizes the heck out of that business in China.
2:18:52
Uh, you get free factories, free labor, free parts, basically.
2:18:53
So, uh, so you can sell stuff super cheap. >> Mhm.
2:18:57
But, that is the real competition.
2:19:00
>> What is their >> [clears throat] >> tier knowledge, what is the long-term thinking there?
2:19:04
Is it effectively like an employment program where they just want >> Yeah.
2:19:10
>> Or are they looking at it like CAC where they're like, "We'll lose money for a decade, but then we're going to make it money for four decades."
2:19:18
>> of their strategy overall? >> Yeah.
2:19:19
It's a combination of both of what you guys just said.
2:19:20
So, on your point, Jordy, it is the way that you keep a single-party system in power is you provide jobs. Mhm. So, job, uh, Yeah.
2:19:27
job growth is the is the one metric that every level of government gets bonus on there.
2:19:32
Can you imagine like the American government, everybody gets a bonus that doubles their base salary?
2:19:36
And that one metric is GDP growth.
2:19:38
That's what you have in China.
2:19:40
So, they start with that framework and they say, "We got to provide jobs, and the way we're going to provide jobs is every 5 years we're going to announce five industries that we're going to enter and dominate."
2:19:52
And and the second, well, the third pillar of that is then that they subsidize 100 market entrants to come in, and then they let evolutionary biology take take its place.
2:20:03
Uh, and may the best person win.
2:20:06
And so, they get down to the top three or five competitors that are winning.
2:20:09
So, in this case, it's like BYD, Geely, Nio, and they say to those competitors, "Now we're going to consolidate all of the capacity that we've created with these 100 under you three. You get it for free.
2:20:25
And your job now is to export and dominate these markets."
2:20:28
So, they've gotten subsidies to get started, subsidies to operate, and now they're getting capacity for free.
2:20:36
And, uh, they've proven themselves as the winners in a hyper-competitive market, and now they go enter the rest of the world where the competitors aren't are soft.
2:20:41
And, uh, and that's their formula.
2:20:45
And they run this formula across all kinds of industries.
2:20:49
They've run it in solar panels, they've run it in TVs, uh, they've run it in bicycles, they've run it in electric cars.
2:20:56
And, uh, and it's a very powerful flywheel they create.
2:20:59
But, those are the four pillars.
2:21:02
Uh, they're also starting to buy legacy brands.
2:21:06
Have you Have you seen this?
2:21:08
That That's where That's where it gets really interesting because >> I feel like Volvo.
2:21:12
>> Yeah, so like people talk about are Chinese cars coming to America, and my answer is they already are. It's called Volvo. Yeah.
2:21:16
Yeah, Volvo is owned by Geely. Uh, and yeah.
2:21:20
And, uh, and Zeekr is providing now the new the new Waymos that are hitting the road cuz Jaguar stopped the, uh, I-Pace production, so the new cars you're going to see are Zeekrs.
2:21:28
Uh, so, we already have two Chinese cars that are, uh, that are on the roads in America.
2:21:32
This is not like a theoretical, it's an actual thing that's happening.
2:21:36
Uh, we interrupted you as you were explaining like, you know, how how you're kind of advising GM and and what what American manufacturers need to do to to actually >> even America broadly. Yeah.
2:21:49
Considering they're coming for every every physical >> we fight back, or is this like Happy Meal toys where it's like not that big of a deal that they're over there?
2:21:59
>> I think it's a big deal like that, John. I think it's a big deal.
2:22:01
See, see, the auto industry is 5% of GDP in the US, but let's like consider you're in Germany, it's 29% of GDP, or it's close to that in Japan.
2:22:10
Like, you can't let your car business your car industry go because there's so much GDP is tied up in it.
2:22:15
So, that means we got to compete, and and competing means we got to have like super compelling product, uh, and we've got to have super low-cost manufacturing.
2:22:23
And what's a little scary is like Amazon invented this thing called the lights-out warehouse. Yeah.
2:22:28
Uh, and it's lights-out because the warehouses are so automated, there's no humans, so therefore you don't have to turn on the lights.
2:22:34
The Chinese already have lights-out factories.
2:22:35
So, like Xiaomi has a lights-out factory where raw materials come in one end of the factory, there are no humans in the factory, and finished cell phones come out the other side. That's crazy.
2:22:44
And there's like a couple of electricians and plumbers keeping the thing running, Mhm.
2:22:48
but the plant manager is actually an AI that's running the plant. Yeah.
2:22:55
That is something America's got to get ready for, and to get ready for it, we need a bunch of manufacturing engineers.
2:23:01
And Tim Cook says this all the time, you could gather the best manufacturing engineers in the country, and they would fit in the auditorium at Stanford. Yeah.
2:23:09
Uh, If you gathered all the manufacturing engineers in China, they would fit in three uh, in three Stanford football stadiums.
2:23:16
Like, the we we are so outgunned on the manufacturing engineering, and that's where we've got to like shift this fast.
2:23:22
But, that's got to be a demand pull from places like GM and Ford and others who are >> moving diligently in this >> And And is the answer like literally Stanford?
2:23:29
Like, does Stanford need to be training those folks specifically, or is it more money for trade schools or online courses?
2:23:38
>> I think it's all the above.
2:23:38
Like, yeah, it's all the above.
2:23:40
Like, Stanford needs to be training them, so does Purdue, so does Illinois, so does Michigan, so does, uh, Penn, etc.
2:23:46
Like, we got to like we got to put a focus around this and really bring supply chains into the US, uh, so that we can have a fighting chance of not only building super automated factories, but but super-efficient supply chains next to them. Mhm.
2:24:00
Well, uh, hopefully we can execute.
2:24:02
Thank you so much for at least laying down the algorithm and showing people how it can be done.
2:24:08
Uh, and we appreciate you taking the time >> Yeah, fantastic to meet you, John.
2:24:11
Feel free to pop on the show whenever whenever you feel like it.
2:24:15
>> Same guys, really good to talk to you.
2:24:17
I'm a big fan, so thanks for having me on. Thanks so much.
2:24:18
We'll talk to you soon, John. Great hanging. >> Have a good one.
2:24:21
Let me tell you about Plaid.
2:24:21
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2:24:30
And without further ado, we have Karri from Linear in the Restream waiting room.
2:24:34
Let's bring him into the TV lounge. Karri, how you doing? What's going on? I'm doing great. How are you guys? We're doing well.
2:24:40
You've been, uh, stirring up the internet this week. >> Cooking.
2:24:44
It's It's my favorite hobby.
2:24:44
It's like I just definitely like something I like to do. Yeah.
2:24:47
Well, we're excited to We're excited to talk about it.
2:24:50
So, yeah, take us take us through kind of the the announcement this week, what what led to it, all that stuff.
2:25:00
Yeah, so so this week at Linear, we we kind of like wanted to share more about like what is our thinking and kind of read on the market and and in our category, which which kind of historically has been this issue tracking, project management.
2:25:10
And like I I wrote this essay that like kind of like tries to like talk through some of these topics, and and it starts with this like somewhat like controversial statement saying like issue tracking is dead.
2:25:22
And I think what I was trying to do with it is is to really like shake the industries and everyone's thinking around this.
2:25:29
And I think what still is happening is that how companies and software companies operate, they still are operating with these old assumptions and like kind of processes that are built around the old world, like the world before AI agents and and and that kind of development workflow.
2:25:46
So, I think like historically issue tracking has been this ticketing, uh, task system for engineering.
2:25:52
So, basically engineer doesn't do anything unless there's a ticket, and then like you have to like create the ticket, someone else creates it, it goes goes to engineering, there's some negotiation happening, eventually the engineer does something with it.
2:26:05
And it's kind of like a it's almost like this line cook system where it's like someone yells like, "We need fries and and steak."
2:26:10
And then the then in the kitchen they start cooking it. Yeah.
2:26:14
And it's it's kind of dumb, and like I I I always thought it was dumb, but it's just like how a lot of companies tend to operate.
2:26:21
The second problem, I think, is that these legacy platforms vendors have kind of like created this this kind of idea that it should be complex, and like they kind of encourage the complexity and the overhead of this process.
2:26:34
So, we have customers coming for to us and like, "Hey, we want to switch to Linear."
2:26:40
But, then they say like, "Oh, we have this like bug tracking process which is 40 different states, and the bug report needs to have these 30 different custom fields."
2:26:48
And then they ask like, "Can you do that?"
2:26:50
And we Our answer is like, "I don't think you should We should or you should shouldn't either."
2:26:54
Like, the point of moving to Linear is actually rethink some of this stuff, like is this still necessary?
2:27:02
Yeah, and I think like this becomes even more clear now is that if the agent can fix the bug in 5 minutes, but your bug reporting process or the the process of running through that process takes a week, it starts to be look pretty silly that like the actual work takes a lot less time than actually running through the whole process.
2:27:21
>> sitting here being like, "I don't want to be like part of the bottleneck." Yeah.
2:27:27
And so, I think like my thinking here is like I think we can start kind of compressing and simplifying a lot of these workflows, and even I know that companies do need some process where it's like compliance or security or some some other reasons that you just can't remove.
2:27:42
Um, I think like the agent can likely handle that.
2:27:47
Um, but like this this statement was really for us to say that I think we should all like kind of look into mirrors, like what are we doing here? And like, why?
2:27:54
And do we still need to do these things?
2:27:56
And and from our perspective, our perspective, we don't.
2:28:01
Um, I think we should start looking into different problems.
2:28:02
And the the different problems is like, yeah, like how do you work with the agents?
2:28:05
And I think the problems I notice today is one is like the context problem, like how does the agent know what to work on?
2:28:12
Or like, how do you set up the agent to work on with the right context?
2:28:16
And we think like Linear can be that or is already that context system for humans, so it can also be the context system for, uh, the agents.
2:28:26
So, Linear collects custom like user bugs, it collects like user feedback or customer requests.
2:28:30
Um, there's also kind of all kind of projects, you have a goals, initiatives.
2:28:37
There's a lot of context of like what is your product, what is the state of your product, and also like what is the future state of the product.
2:28:43
And then if you can bring that into the agenda-like workflow, I think the agents can work a a lot better.
2:28:50
So, I think at Linear we want to like look into that category of like context problems and try to like find solutions there.
2:28:57
And then the second thing second second problem I can notice is the the agency part that a lot of the systems historically has been quite static.
2:29:05
Like it doesn't do anything unless you move the thing from one state to another.
2:29:10
And we think like now the system should be with this right context and understanding of what you're doing and what your team or product is doing, it could start moving the work uh on its own.
2:29:22
Like it should become more self-driving.
2:29:25
And so this for example this bug reporting example is like that if the bugs get reported in Linear, they should just like the Linear agent should look at it, like start debugging it, connect to other tools, make a fix, then eventually at the end like tag in a human to like hey, can you authorize or verify my fix?
2:29:43
And so then this like 40 state bug tracking process is now like one state because the human only has to like verify it.
2:29:50
And even if it's not correct solution, you still have the option to fix it and work with the agent.
2:29:55
So, I don't think we can one shot problems all the time, but that's just like the direction we want to go is like is there work that Linear could do automatically that the humans don't even have to look at and it in and at least at the very beginning of the state and Linear could start doing it for you.
2:30:15
Um and the last thing I'll say like I think the um we we are launching like several things over the weeks that that we launched this like Linear agent which it it's a attendant surface for Linear so you can ask things, you can like how I use it is I get feature requests from people then I go there is like I wonder what other customers are saying about this problem and like can I understand the underlying need?
2:30:36
Because I think the problem today starts to become like if you can build anything fast, the problem is not building things anymore, the problem is like deciding what to build and why and even understanding like what is the problem.
2:30:51
So then like Linear can be a system like where you can understand the problem, shape the problems and then pick a direction or solution and then start working on the the like have the agent work on it with that right correct context and direction.
2:31:02
right correct context and direction. So, um and then like in the in the future we'll we'll also like we're working on our own coding agent which I think there was my confusion about it and I think like the goal there is like it's it's
2:31:15
it's more like a wrapper around this existing coding agents and what do we do there is like we can like dogfood our own platform which we have this um like agent platform that third-parties like Codex and and and Devin and Cursor have uh participated in and like they have their agents in there. But like
2:31:31
But like because we are building our own, we can kind of like create the capabilities and the tooling and the hooks or whatever we need better because we also notice the opportunities as we build these things.
2:31:43
And we also just generally see that there's probably like situations where the Linear's coding agent can be better than some of the like generalized coding agents.
2:31:53
Yeah, I I think I think it's I think it's really smart to to you know if if Linear had been started you know 10 years prior, you would have been able to just like add like do the the legacy the legacy SaaS playbook of like let's just
2:32:06
try to add a lot of seats every month and compound forever and that was a beautiful existence and now our entire industry is like disrupting itself and so you can choose I think Toby Lutke on David Sacks' show was talking about like every category is up for grabs. There's going to be an AI native
2:32:24
There's going to be an AI native company in every single category.
2:32:26
You can wish that this wasn't happening or you can decide to be that company and the mature hard thing to do is like admit that things are changing, embrace it, rally the team around it, rally your customers around it.
2:32:40
I think it makes a lot of sense.
2:32:42
Um how do you think taking a step back like how do you how what's your view on how like enterprise software categories are evolving?
2:32:52
Because I think a lot of people are are kind of like waking up to this idea of like everybody wants to be at least in software development in the in the pipeline of tools, everybody now wants to be the same kind of like the same thing.
2:33:06
You want to be the place where people go to uh you know encourage the machines to do things, right? And kind of >> Mhm.
2:33:15
do that and so um and how do you see Linear's role evolving?
2:33:17
You know, you've been very open to different agents leveraging the platform.
2:33:22
I'm sure you know you you'll continue to be, but um but yeah, how how are like software categories evolving in this era of like you kind of need to be selling everyone's trying to sell work.
2:33:39
Yeah, I don't I don't think I have the complete answer there.
2:33:40
I think there's a lot of nuance and it's like depends on the markets.
2:33:44
I I do think like that's that feeling of everyone's building the same thing.
2:33:48
It's I think partially comes from a lot of people are noticing the same primitives and and from like a same kind of blocks or pieces of this puzzle and then they're trying to like figure out like what is the right setup for that?
2:34:02
Like what is the right order of those things and like who is actually the best thing best that best one to like own part of that puzzle.
2:34:08
And I think that's like the the feeling probably there, but I think like my feeling my my thinking is that it's similar to earlier software days too.
2:34:19
It's like it's like when people invented databases, now everyone's like why is everyone making databases?
2:34:23
Like well everyone used to make >> be a system of record, you Yeah.
2:34:26
So I think there is like a lot of like there can be a lot of shared primitives across products.
2:34:34
It doesn't mean that every product still like has the same outcome or like the same advantage or something.
2:34:39
And I think like we we we don't know like how this will all play out.
2:34:44
And I think the the other sentiment I'm seeing is that there's this like idea of like let's throw everything out like no SaaS at all.
2:34:50
And I think that's an option, but I I think like you can do that and then you start like inventing stuff back from that first principles and you maybe end up like in the same spot again.
2:35:02
And I think like that's what we've seen in our space is like everyone's running their agent and now they have 10 agents running.
2:35:08
So then they put them on a Kanban board which Linear has and then it's like oh now I have invented the agent orchestration.
2:35:17
Like no, you invented the Kanban board which has been like around for like 30 years, but you just put the agents on the Kanban board.
2:35:23
So like kudos to like connecting those two topics, but like it's not like that some things don't need to be reinvented.
2:35:30
Like some things can still work, but like if you just throw everything out, you kind of like start from the beginning and then I think it's a long journey to like figure everything out again.
2:35:43
Yeah, I got a I got an investor update last year that was just like workflows have been rebranded in the product as agents.
2:35:51
>> [laughter] >> That was a funny moment cuz I was like okay, some of this stuff is is you know very new approach to software, but some of it is just kind of re some of it is just repositioning.
2:36:00
Uh I have one more question, but first we got to give a shout out to Russell Smith from Y Combinator summer 2012.
2:36:06
We're not beating the YCS12 mafia allegations on the show uh since I believe we all went through that one.
2:36:15
But uh my last question is um uh you know in in we we we we we talk about Linear every day on the show, 75% of uh enterprise work enterprise companies are using agents.
2:36:25
Have you talked to the other 25%?
2:36:27
Like what is unique about those businesses that they haven't jumped in?
2:36:31
Are they just like asleep at the wheel or is there something unique about their business where they're sticky and for security reasons or some other reason that they're not >> but haven't integrated them in their workflow or something.
2:36:46
>> because yeah, it it feels like you know this is such everyone understands how powerful agents are. Why is it not 100%?
2:36:51
That's always an interesting question. Yeah.
2:36:53
And to clarify the stat is like like 75 77% of like Linear workspaces have cloud agents.
2:37:00
So uh uh so there's a difference between cloud agents and the local agents.
2:37:05
So we don't track the local agents, but so I think the the couple things like the cloud agents are still somewhat like less developed today.
2:37:15
There's like environment problems where like if you have a massive system or some kind of large company system, the environment starts to become kind of complicated and the industry hasn't fully solved it yet.
2:37:26
I think it's a solvable problem and what many companies are kind of like solving it with the sandboxes of like you start a sandbox, the agent has the right environment and can do the things.
2:37:36
So there's like just like a timing piece.
2:37:38
Similar timing piece, not everyone has like decided to do this and like go into the cloud agents.
2:37:44
The third piece which is it's it's it's kind of the stupid reason is is the uh policy.
2:37:49
Um so companies are still procurement, IT, and and security still run a lot of like decision-making when it comes to tooling in companies.
2:38:03
And there's a lot of companies that like that employees ask can I use the agent and they say no, you can't.
2:38:08
And they don't have like a reason for it or like we have to evaluate it and that evaluation takes months.
2:38:14
And I think like what the companies need to look into here is like what this has to change.
2:38:20
Like you can't like like it the the industry is moving so fast so you cannot have like a month-long like many month-long processes to evaluate every single new tool.
2:38:31
Like I think like the the security standpoint is like valid, but like you you kind of have to like figure out the new way to think about the security and not like block new tools.
2:38:38
So I one a to this I've seen in some companies is like they have this friction form. Mhm. Oh.
2:38:46
>> So, engineers that want to use like feel of friction and that they want to use new tools or AI, they form a friction form like file a friction form and then that escalates it to the higher leadership.
2:38:57
And then it makes a SLA that has to be resolved in a week or in 10 days or something. Yeah.
2:39:05
And so you force the hand of this like procurement IT and security people to like do something about it because the incentive lot of times for this jobs is like you don't want to rock the boat.
2:39:15
So, you don't want to change things if you don't have to. Yeah.
2:39:16
So, so then like the companies do I think that leadership should recognize that like we do have to like allow people to to use new tools, otherwise we'll kind of fall behind here.
2:39:28
Well, thank you so much for taking the time to come give us the update.
2:39:32
Always good to hear from you and we'll talk to you soon.
2:39:34
Have a good rest of your day.
2:39:35
>> Awesome awesome progress. We'll talk to you soon. Goodbye. Goodbye.
2:39:40
Let me tell you about Gusto, the unified platform for payroll, benefits, and HR built to evolve with small and medium-sized businesses.
2:39:44
And without further ado, let's bring in our next guest.
2:39:47
Yeah, sounds like a lightning round.
2:39:49
Yes, this is the Lambda lightning round. Tell me. What's happening? Good to meet you. You're here with us. >> Zubi VPN.
2:39:56
Please introduce yourself and the company.
2:40:01
Because not only have we not heard of you, but I think you're coming out of stealth. No one's heard of you.
2:40:04
Or at least this company. No one has heard of us. I'm Demi Clark.
2:40:09
I'm the co-founder and CEO of a company called Neon Bio. Yeah.
2:40:10
Uh in a nutshell, what we do is we genetically engineer chickens to produce medicines inside their eggs. Wow.
2:40:18
How did you get into this? What's your backstory?
2:40:22
So, I'm an aerospace engineer, so naturally I went into biotech. >> Yeah, and chickens.
2:40:26
My my co-founder is an evolutionary biologist as well.
2:40:29
You know, I've always been involved in manufacturing of complex things.
2:40:37
Planes are sort of one complex thing.
2:40:41
These proteins, these medicines are also similarly complex in different ways.
2:40:43
Um you know, as as some of the problems facing drug drug pricing and sort of the onshoring of manufacturing had come to bear over the last few years, seemed like a good place to hone my my skill set.
2:41:02
So, what do you Yeah, where where did the original kind of concept come from?
2:41:06
Did it did your was your co-founder you know, making an omelet making an omelet hanging out with the doing like this will cure cancer.
2:41:15
>> [laughter] >> You know, we >> these chickens, they lay eggs every day.
2:41:18
We got to put something in them outside of You're not far off.
2:41:23
I mean, we all know chickens to be sort of incredible sources of edible proteins, you know, the ones that make your omelet.
2:41:32
Most new medicines today are are complex molecules.
2:41:35
They are proteins themselves.
2:41:38
And so um the way they're manufactured today prior to Neon Bio is you know, it's expensive.
2:41:44
It's sort of reliant on these complex fragile global supply chains and and it sort of makes these drugs inaccessible to most people.
2:41:51
But chickens happen to be the universe's best protein factory.
2:41:57
You know, they've been honed by 250 million years of evolution to efficiently turn very simple inputs, grain and water into complex outputs, these proteins inside their eggs.
2:42:08
And so we harness that same system to produce you know, some of the drugs you might see advertised on on TV like Humira or Keytruda. How uh Wild.
2:42:20
So, so I mean, how far away are you from actually doing a partnership with a biotech company that owns intellectual property around a particular protein?
2:42:28
It feels like there's this dance between like you need to genetically engineer the chicken, make the chicken, get the eggs, extract the protein, like actually get into the drug.
2:42:38
That sounds like years, but then there's only there's ticking clock on every drug that's out there in the IP landscape.
2:42:43
So, how do you marry those two?
2:42:46
Yeah, so one of the things we announced today really is is this large commercial deal that we signed with a partner to bring up to three drugs to market. Up to three drugs, okay.
2:42:57
Um and and and the drugs that we're focusing on to start with are known as biosimilars.
2:43:01
So, they are drugs that you know, have existed. We know they work. They're on the market.
2:43:06
They can cost in the thousands or tens of thousands per dose. >> Mhm.
2:43:11
You know, that's that's super expensive.
2:43:13
We are starting with those because they're they're known molecules.
2:43:15
We're not taking on molecular risk there.
2:43:17
Over time we're developing technologies that will make this process way faster, much more efficient, increase the yields.
2:43:25
But for now we have a a very good market in in in the biosimilar space where there's huge demand for these drugs.
2:43:32
Um Coupled to sort of the cost aspect, which is a sort of a big part of big part of our value proposition is the fact that our >> What?
2:43:41
How many doses from an egg we talking?
2:43:45
What is a single shot or can you get potentially multiple doses?
2:43:47
And then cuz I'm I'm just thinking at some point you're just scaling a facility that has infinite >> Yeah, we we scale by breeding chickens.
2:43:58
That's one of the advantages here, right?
2:44:00
It's it's pretty linear and we know how to do that.
2:44:03
To just give you a sense for scale, you know, with a few thousand birds and and to give you a sense of what that means, you know, a small farm is anything below 25,000 chickens.
2:44:13
So, with a few thousand we can produce the global supply of a drug like Humira.
2:44:19
So, a chicken can treat you know, depending on what the what what what what the medicine is, anywhere between 10 to a 100 people in a year. Wow. That is remarkable. >> That is insane.
2:44:31
You do not have a chicken sound effect on the >> to text the team.
2:44:34
We needed a chicken sound effect.
2:44:36
>> the rest of the barnyard.
2:44:36
We got the whole >> we'll ask, is there a plan to make horses work for us? Are there goats for us? Sheep?
2:44:42
Are you staying in chickens forever or [clears throat] will there be other animals? Okay, eventually.
2:44:45
Okay, well, call us back.
2:44:50
>> we need horses to save to save us from other from other elements.
2:44:53
There there are actually drugs that come from from horses as well.
2:44:57
I my my you know where my mind's going? Premarin.
2:45:01
>> Partnership with Varda. Varda, yes. Space chickens. Space chickens.
2:45:04
I mean, I I was thinking about that when when you said aerospace to bio, there is an there is an interesting overlap there.
2:45:11
Well, thank you so much for taking the time. >> Yeah. Thank you.
2:45:13
Yeah, we're we're having a lot of fun, but this is this is very this is one of the craziest pitches.
2:45:20
>> I think it Caffeinated Capitals I think an investor in both companies as well, right? That's right. That's right.
2:45:27
Raymond Raymond loves making making drugs in difficult ways, but potentially extremely valuable ways.
2:45:32
No, this is very cool, Demi.
2:45:34
Thank you so much for coming on. Thank you guys. >> This is great. We'll talk to you later. Bye.
2:45:38
Let me tell you about vibe.
2:45:38
com where D2C brands, B2B startups, and AI companies advertise on streaming TV, pick channels, target audiences, and measure sales just like on Meta.
2:45:45
And without further ado, our next guest Mikey Shulman from Suno.
2:45:49
He is the co-founder and we cannot wait to talk to him about AI-generated audio.
2:45:55
Let's [music] bring Mikey in from the Restream waiting room into the TBPL Ultra Dome.
2:46:03
Mikey, good to see you again.
2:46:03
Thank you so much for taking the time. Welcome back.
2:46:07
One of the most interesting Do you call yourself a neo lab?
2:46:10
Is that a fair characterization? Uh great to be back. Thanks for having me.
2:46:17
We definitely do not think of ourselves as a neo lab. >> Okay.
2:46:21
But you are training models, you're doing AI, but you're a product company.
2:46:25
Are you a consumer company?
2:46:25
How do you think about yourself?
2:46:27
>> We're we're a consumer company.
2:46:27
We're in entertainment company. >> Entertainment.
2:46:31
Consumer entertainment doesn't seem so hot right now.
2:46:34
Not exactly sure why, but being entertained and fulfilled is like a basic part of being a person and so um often [clears throat] overlooked part of the market.
2:46:43
Um Yeah, we're we're like the word we use here is creative entertainment.
2:46:46
We are giving people the best, most fulfilling creative experiences of their lives. Yeah.
2:46:53
I mean, that sounds maybe broader than music one day.
2:46:56
Have you thought about video?
2:46:58
Are you thinking about I mean, I when I'm on Spotify a lot of times a video will pop up alongside the the the music.
2:47:06
Are you thinking about expanding or continuing to refine the music model itself? It's a great question.
2:47:14
I think there's a lot of reasons why this is going to work really, really well in music.
2:47:17
Least of which is we love music.
2:47:18
This is like really the DNA of the company. Yeah.
2:47:21
Um but I think creative entertainment is coming everywhere.
2:47:26
And I I think about it like this like I think even Cloud Code or all of its competitors are creative entertainment.
2:47:32
I don't know how much you guys play around with it, but it's like really fun to build things and it's really fun to use what you build.
2:47:37
And there's a [clears throat] huge allegory there for music, too. Sure.
2:47:41
Yeah, yeah, that makes sense. The tinkerer mindset.
2:47:45
>> progress since the last time you popped on.
2:47:46
You guys growing revenue at all?
2:47:49
>> [laughter] >> What metrics can you share? I had heard some rumors.
2:47:53
Yeah, so growth has been great.
2:47:53
You know, a lot of things have compounded, a lot of hard work from the team.
2:48:00
And kind of some big step changes in how people engage with the platform.
2:48:03
So, since our last model release um Yeah, so recently we we kind of announced that we had hit 2 million subscribers, 300 million and we're like one Sorry to interrupt.
2:48:17
And you got cut off a little bit, but it's 300 million of ARR you said, right? That's remarkable. That's wild. >> Insane.
2:48:25
Yeah, how much have you appreciated how much have you appreciated the all the other the labs just slugging it out >> [laughter] >> like while while you guys just kind of stay stay in your niche focus and and go after what what clearly is a a a massive opportunity, but but maybe it's per- stays kind of off the radar for some of these other labs long enough for you guys to just run away with it.
2:48:49
Truly, I like wake up 6 days of the week and I think um this is great.
2:48:53
We're the only ones really playing in consumer entertainment, and I'm really really excited.
2:48:57
And then the seventh day of the week I wake up and I say like we must be missing something that all these other giant companies know, uh you know, but I I think um it's what it's what I said before.
2:49:06
Like being fulfilled is a much elevated state than utility, [clears throat] and everybody is focused on utility cuz it's straightforward.
2:49:15
Um but eventually, like you need something more than that.
2:49:19
This is like a basic part of of what being a person is all about.
2:49:23
So, uh we love to focus on it.
2:49:23
I love watching people slog it out in other domains where scale and compute and dollars are honestly bigger weapons than they are in music. Yeah.
2:49:34
Uh Uh yeah, we've been we've been I've been enjoying Suno a lot.
2:49:36
Throwing out making making making songs for the team.
2:49:41
It's just a it's an amazing thing to just like be joking.
2:49:43
In in our use case, we're just like joking around about something, and I'm just like, all right, I'm going to turn it into a song. Yeah.
2:49:51
It's uh it's a lot of fun.
2:49:51
But yeah, to talk about the updates on the on the product side, the new voices, functionality, all that.
2:49:59
Yeah, it's um really exciting launch we uh a couple hours ago released a new model. It's our best model yet.
2:50:02
Uh we'll make the best music.
2:50:04
But um I think most excitingly is really gets personal.
2:50:10
So, um you can use your own voice to make music that sounds like you.
2:50:16
Um and if you're not the best singer, it'll actually sound like a better version of you.
2:50:19
And so, there's something beautiful about that. Auto-Tune? Uh yes.
2:50:24
Yes, it uh and without sounding too like artificially Auto-Tuned. Go go try it out.
2:50:29
I've I've learned not to try to demo this for people in large groups.
2:50:32
People don't like singing in front of their friends.
2:50:35
Uh so, I'm I'm not I'm not going to try that here.
2:50:37
Um and then um some other personalization features on the creation side about how you really kind of tailor um the system to really know everything that you love.
2:50:47
Um and then also really exciting is the ability to upload a bunch of tracks from off platform of your own that you can kind of inspire the model to be more like those.
2:50:56
And um we've seen some amazing things happen from everything from like musicians, film composers, producers to like uploading tracks there and getting the model to really um kind of follow their leads.
2:51:10
It's like um an incredible way to uh fall in love with a particular thing that you already love. Mhm.
2:51:18
Um I'm super excited to play around with it, John.
2:51:20
Yeah, is there I'm interested in like top feature requests and what we can learn.
2:51:26
I don't Yeah, obviously you don't want to spill your entire road map, but uh some of the interesting things that happened in image models where uh you could at at a certain point, you know, take an image and basically just replace the background, and it wouldn't sort of regenerate your face.
2:51:42
And I feel like there's a there's a lot of opportunity if artists hop in or I have music to say, okay, I want to keep the the song exactly the same and just change out the lyrics to do sort of a a remix.
2:51:53
Or keep the lyrics exactly the same and change out the style, style transfer.
2:51:57
And I feel like all of those are maybe it's going to be more of a a lift on like the business development side to to figure out how to do that.
2:52:03
Uh but but what are you excited about in terms of increasing the level of control from the creator or the user?
2:52:17
Um a lot of what you said is is coming soon.
2:52:19
I think um unlike other media, music has like a very rich history of um basically derivatives from covers to samples to remixes to mashups.
2:52:29
And >> [clears throat] >> um people riffing off one another is a way to spark creativity.
2:52:34
It is a way to keep old works alive.
2:52:37
And so, you'll see you'll see a lot of that come in in the not-so-distant future.
2:52:42
>> Yeah, that's interesting.
2:52:42
It's already on platform, you know. Yeah, of course.
2:52:45
Something people don't know is um like almost a quarter of all songs made on platform are um derivatives of other songs on platforms.
2:52:52
Like a lot of covers, basically.
2:52:54
And so, there's a a kind of a social ecosystem around these things. >> Yeah.
2:52:58
What's the B2B side of the business like?
2:53:00
I I like we we would talk to a lot of AI video generation platforms, and it seems like there's a lot of just ad creative, like ad agencies, basically, that are using the tool at volume beyond the creativity and just the fun of making a an AI video uh for themselves.
2:53:17
They actually see it as a way to accelerate creative works on their ad side.
2:53:22
And I'm wondering if you're seeing pull from ad agencies saying, hey, we we need, you know, a new song for this campaign.
2:53:30
We have some AI-generated video, and we're going to partner with Suno on that.
2:53:37
Um we've definitely had a lot of outreach.
2:53:38
Honestly, it's just not a huge focus for us right now.
2:53:40
Like we want to delight everyone.
2:53:43
Like just regular people who love music.
2:53:45
And um we're honestly like a lot of the company's DNA is not being um not trying to do the same thing a little bit faster or a little bit easier, but actually to try to do something that is entirely new.
2:53:58
And like that is changing how people entertain themselves.
2:54:00
So, um there's probably a big business to build helping people make songs for ads or jingles for companies.
2:54:06
Um maybe we can work together on a jingle as a side project. Uh I love that.
2:54:10
But for us, that'll be a side project.
2:54:12
What global superstar has embraced AI music the most? >> And is it Meek Mill? Uh the most? Oh, um I don't know.
2:54:24
There's there's Cuz you kind of have to go on like a villain arc or something.
2:54:27
>> Soulja Boy did an AI Like you like there there's there we again, the last time we were here, I was telling you somebody I know in the music industry is like every artist is using the the Suno.
2:54:38
Every artist thinks it's amazing.
2:54:38
Nobody wants to talk about it yet because they're kind of scared of the reaction from the world and the creative industry and all this stuff.
2:54:48
And so, it feels like the first one or two people to go in a huge way will get some pushback, and then it over time it just is normal.
2:54:59
I I think it's slowly changing.
2:54:59
Um I don't want to out anyone, but um this was this is a quote that is attributed to me, but it's actually not mine.
2:55:05
I'm not this clever of everything that you just said ascribing this is the the GLP-1 of music.
2:55:11
It's like everyone's on it, and no one wants to talk about it.
2:55:15
Um and >> [clears throat] >> uh I think these things just take time.
2:55:18
So, I'm not I'm not going to I'm not going to out anyone just yet. Okay.
2:55:20
Um but it feels like things are changing.
2:55:24
Final question from the chat.
2:55:24
Are there deep cuts on Suno? Uh I don't know. Deep cuts?
2:55:32
>> What is what what You know what a deep cut is? Yeah.
2:55:33
Deep deep cut is like deeply underrated, like from deep cuts in the vinyl.
2:55:37
Like everyone knows >> Yeah, yeah, no, I I understand, but it's not it's not for me to say Sure.
2:55:41
like what is good and not good.
2:55:43
Like we never want to be the arbiters of good music and bad good music.
2:55:46
And like um like I have deep cuts of my own that you're going to hate. Like that I made.
2:55:53
And I promise you'll hate them.
2:55:53
I guess to quantify the question, it would be like, do you think the listener uh the the the the the plays are less power law distributed than on say Spotify?
2:56:03
Where Spotify probably has like Taylor Swift Taylor Swift Taylor Swift at the at the tall end that's driving a ton of consumption.
2:56:12
Do you think that your curve of consumption is a little bit more even?
2:56:18
For sure, for a couple of reasons.
2:56:18
One is that the whole purpose of the platform is actually to enjoy creation and not necessarily to go and browse for other people's music.
2:56:25
It's actually to get inspired to make your own music.
2:56:26
And so, we actually see people falling in love as much with their own music on platform as they do with other people's music, which is amazing and new.
2:56:34
So, it's more it's So, the answer is more deep cuts. It's all deep cuts. More deep cuts. It's all deep cuts. Yeah, okay.
2:56:41
But in the in that lens, it's all deep cuts on Suno. >> it. I love it.
2:56:43
Uh yeah, now I mean, obviously not to paint it into a corner.
2:56:47
Uh there there's a million ways to think about this.
2:56:49
But thank you so much for taking the time to come chat with us. Yeah, great to catch up.
2:56:51
Excited to play around with the new model.
2:56:53
>> Congrats on the progress. We'll talk to you soon. Thanks, guys. Have a good one.
2:56:57
Let me tell you about Figma agents. Meet the canvas.
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2:57:06
Uh and our next guest is Ida Bardari >> [music] >> from Devalence, the anti-surveillance company. What's going on?
2:57:15
I'm very excited to talk to you.
2:57:16
Congrats on on the uh the the the viral sensation.
2:57:18
But since it is your first time on the show, please introduce yourself and the company. Definitely.
2:57:25
Um thanks so much for having me. Um hello, everyone. I'm Ida.
2:57:26
Um I graduated with a degree in physics from Harvard, and now I'm building Devalence, uh a company that's protecting your freedom. How does it work? Great question.
2:57:38
So, basically, we're building on top of existing ultrasonic jammer technology, but what we're integrating here is that we're making it a smart device, which takes in information from nearby environment, and then targets our distortion signals into the direction of where we detect smart devices. Interesting.
2:57:55
Um and then simultaneously, we also have an AI algorithm that makes sure that the the distortion signals that we send out um use artificial tones and voices that make it hard to decode. Oh.
2:58:05
Okay, uh let's take it one one more step back.
2:58:10
Like what what is the actual problem that people are experiencing today and may or may not even be aware of it?
2:58:16
Yeah, no, I love the question.
2:58:16
Um so, in at the beginning of 2024, we saw a huge rise in AI wearables.
2:58:21
I mean, I think everyone in the valley probably knows about friend, about Omi, um all those um you know, promising technologies.
2:58:27
The problem there becomes, well, when you have a conversation and for example, you just forget to turn it off.
2:58:32
A lot of confidential information, private information can be used to train AI models that you might not necessarily want to be trained on it.
2:58:41
And people already have this problem who deal with a lot of confidential information in their everyday professional lives.
2:58:46
So that can be people working in, you know, in jobs that deal with IP, with other sensitive info.
2:58:54
And this issue is way broader than just, you know, audio recordings.
2:58:57
We also see this with Meta Ray-Bans happening.
2:58:59
Like there's a lot of unwanted recording happening there, a lot of freedom for people to just, you know, go out and do whatever they want.
2:59:09
And simultaneously, of course, digital data collection has been a thing for a long time.
2:59:13
And the way that it's used in recommendation recommendation algorithms, for example, is another thing.
2:59:18
So cognitive security is also a big part of this.
2:59:24
How do you not disable someone else's device if you're okay with them using it?
2:59:31
I was I was skiing and a friend had Meta Ray-Bans and he was talking to them and it didn't I was sort of eavesdropping on the questions he was asking.
2:59:38
He was sending texts to friends and whatnot and he was fine with me hearing it.
2:59:45
If I was wearing this device, wouldn't he just not be able to use his device?
2:59:49
In this particular case, I mean, if you don't mind, then you can just turn it off. >> Okay.
2:59:53
That makes So it's very easy.
2:59:53
It's like an on-off thing for you to like genuinely be in full autonomy over it. Okay.
3:00:00
And then what's obviously it says that you launched pre-orders. Who has been buying?
3:00:05
Is this corporations that want to make sure that they're cuz you could imagine you know, cell phone jammers exist and and Faraday cages exist.
3:00:15
Like there are ways to secure a property.
3:00:17
Is this just privacy conscious individuals?
3:00:20
Is this a direct consumer product mostly?
3:00:24
So for the pre-orders, it's been mainly consumer facing, which means that a lot of people who have pre-ordered it are in the range that, you know, the price point allows.
3:00:34
But we're working to like make it accessible and affordable to everyone because we really believe in the mission that everyone who wants autonomy really and agency over the data they should have it.
3:00:44
But we also are working on a version that is for more like organization base because they usually have different requirements.
3:00:53
So we're also working on that.
3:00:53
Why is this >> We got to get TJ one of these. Should gift him one.
3:00:59
Our friend TJ Parker absolutely hates meeting meeting recording and all these things that are just Can you make it into a watch?
3:01:05
That would be the killer app. I know.
3:01:10
There's there's a lot of cool stuff with the form factor that we're experimenting with.
3:01:14
But what are you going to be in a little bit of like an economic war here because $1,000 product to counteract something that cost 100 bucks?
3:01:24
There's just there's a so there's an economy here that's sort of misaligned.
3:01:29
I'm also interested to hear about how on earth can it can a can a recording device cost $100 while an anti-recording device cost $1,000?
3:01:38
I imagine that you you you think the price will drop over time.
3:01:41
But what is in the device that is expensive? Yeah.
3:01:46
There's a lot of processing that's going on because we have certain algorithms that require a lot of power in order for it to, you know, work.
3:01:54
So that is honestly a big component of the cost that's driving it.
3:01:58
Maybe maybe even a more powerful chip than what would just be in a passive audio recorder. Yeah.
3:02:05
I mean, passive audio recorders, they are usually not as complicated to build, right?
3:02:09
You basically just need a mic and then you you can just detect the stuff, right?
3:02:13
But in this case, you want to you want to like find nearby devices, then you also want to make sure that they're blocked.
3:02:19
And then you also want to make sure that the way that you're blocking them is not just reconstructible in post-processing.
3:02:24
So there's like three different tasks here.
3:02:30
That make it way more expensive, unfortunately. But we're working on it.
3:02:34
What are the what are the laws around this right now?
3:02:36
I remember the backlash to Google Glass and then everyone had a phone and it just seemed like if you're out in public, people can just take pictures of you and record you. Yeah.
3:02:47
Is it legal to block someone from recording me?
3:02:50
I don't know anything about this.
3:02:53
Yeah, that's a that's a good question.
3:02:55
In terms of recording, there's one-party and two-party consent states. Sure.
3:02:58
So but nobody really follows that, I feel.
3:03:03
Um Yeah, what's the two-party Is California two-party?
3:03:07
I believe it's two-party, yes.
3:03:07
Certainly doesn't feel like it when you walk [laughter] around.
3:03:11
No, it definitely does not feel like it.
3:03:12
Exactly, that's what I'm saying.
3:03:14
Nobody really follows it or it's not really enforced by folks.
3:03:18
And then regarding the blocking, so certain blocking is not allowed.
3:03:21
So for example, blocking from RF jamming is not allowed because you can get in the way with emergency services.
3:03:29
But unless you don't do that, there's certain areas in which we can work in. Okay. [clears throat] Yeah. Very interesting.
3:03:36
Well, where can people find it?
3:03:37
Where can people pre-order if they're interested? Go on our website. It's stevelens. com.
3:03:43
That's where you can find it.
3:03:43
Otherwise, I mean, in general, we're going to be posting a bit more also about the development process and the general vision and mission behind the company on our social media platform.
3:03:52
So on X, we're on B and Audible.
3:03:54
And then my personal X account is just my name.
3:04:00
I need a I need a little jammer for John's mic.
3:04:01
Sometimes he he'll just keep [laughter] talking, you know, and and now I'm kidding.
3:04:09
Well, thank you so much for coming on. Yeah, great to be here.
3:04:10
Very very cool that the chat is in a positive way saying that it feels very Harry Potter coded to have this sort of magic device that Oh, I like that. That's a good one. I like that.
3:04:22
That's a noble high praise.
3:04:24
Yeah, becoming invisible.
3:04:24
It's the invisibility cloak for the modern era. Well, thank you so much.
3:04:27
Congrats on the progress.
3:04:29
Yeah, excited to follow along. Have a great one.
3:04:31
Let me tell you about Apple Eleven.
3:04:32
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3:04:34
Get access to over one billion daily active users and grow your business today.
3:04:38
And without further ado, we'll bring in Zach Canter >> [music] >> from Steady. Zach, how are you doing? >> on?
3:04:48
We are we need to >> look fantastic. You have many books.
3:04:52
>> is fantastic and the bookshelf is fantastic.
3:04:55
This is, of course, Zach Canter.
3:04:55
He is the founder and CEO of Steady. How about now? Can you hear me now? >> hear you now. How you doing? >> Here we go, guys. Thanks for having me. Thanks for hopping on.
3:05:03
I feel like I'm surprised I feel like I've never met you in person, but I know you from the internet for so so long. So good to finally meet.
3:05:10
Well, we're we're Twitter friends, you know.
3:05:12
It's how I meet up many of my reputable and disreputable friends. Exactly.
3:05:15
But for those who haven't been following you in your journey, since it is the first appearance, please introduce yourself and the company. Sure. I'm Zach Canter.
3:05:23
I'm the founder and CEO of Steady. It's spelled s t e d i.
3:05:27
The We're a healthcare clearinghouse.
3:05:29
So if you're not familiar with the world of of healthcare, you know, we exchange the administrative transactions that power all of all of healthcare.
3:05:37
You probably heard stats like this before that healthcare is 18% of US GDP.
3:05:40
So it's a pretty meaningful chunk of the of the ecosystem.
3:05:44
But you know, you go into your doctor's office, they ask you for your driver's license and your insurance card.
3:05:51
And then they tell you your copay is $20 and you have three visits left and all those details.
3:05:54
That's a transaction called a real-time eligibility check that happens under the hood. We process those.
3:06:00
We process tens and tens of millions of those per month.
3:06:01
And then when you know, you finish the encounter, whether it's a surgery or a or a you know, teeth cleaning, whatever it might be, they have to send a claim.
3:06:12
There's a series of messages that come back.
3:06:14
So there's an adjudication message that comes back saying the claim is rejected or accepted and then the claim gets paid somehow.
3:06:19
You know, you get those things in the mail that say this is not a bill, explanation of benefits.
3:06:25
Your doctor gets one of those as well.
3:06:27
They can get them via paper, but they can also get them electronically.
3:06:28
And basically, we process all these transactions back and forth. Mhm.
3:06:33
And why can't a registered nurse just vibe code a system to do this for them?
3:06:38
>> [laughter] >> Well, it's a funny question.
3:06:40
Like you know, it's interesting.
3:06:41
So we we primarily, you know, we think about our business as selling to other technology companies.
3:06:46
You can think about us as like the the Stripe of of healthcare. Yeah.
3:06:49
The but we've seen a surprising number of these small and medium-sized doctors and dentists' offices that are that are signing up.
3:06:57
And so we we recently did an analysis spoke with a bunch of these places and it turns out that indeed doctors are vibe coding >> No way.
3:07:05
revenue cycle management systems.
3:07:07
So it's not thousands of them, but it doesn't have to be. It it has happened. That's amazing.
3:07:11
Yeah, what what an interesting time.
3:07:13
What what what have been the key milestones for the business?
3:07:15
You're you're raising new money today. Your name is Steady.
3:07:18
John was saying how he's known you forever from the internet.
3:07:20
I feel I feel I feel the same way.
3:07:24
Just stead- steadily Here we go. chugging along.
3:07:26
But but yeah, what what is this milestone represent?
3:07:29
Like what did it take to get here?
3:07:31
Healthcare every healthcare founder will tell you that that obviously there's a big massive market, but but you know, it doesn't move as fast and and it can take, you know, years to make progress that another industry might might happen in a quarter. >> Yeah.
3:07:51
Yeah, it's it's interesting.
3:07:51
So, you know, we didn't start in healthcare.
3:07:53
I don't come from a healthcare background.
3:07:56
I previously started a brand of auto parts.
3:07:58
So I manufactured auto parts in Taiwan and China.
3:08:00
And you know, follow the typical auto parts to healthcare pipeline as many founders do.
3:08:05
>> [laughter] >> And in building that business, you know, I sold to O'Reilly Auto Parts and Amazon and these different retailers.
3:08:10
And I had to at some point, it was probably like 2011, the transaction volume got such that it wasn't feasible to have these things manually entered anymore. It was before AI.
3:08:20
And so I reached out to all the different retailers that I was selling to and asked them to send me the API spec for your for their you know purchase order so I can automate the transactions and you know over the next 2 weeks they all wrote back and they said, "What's an API?"
3:08:33
And so you know things got a little bit better since then but what I found out at that point was that this whole world of of retail logistics supply chain transportation etc.
3:08:43
Manufacturing is powered by a technology called X12 EDI and so if you see steady spelled S T E D I it's because we we started with this underlying EDI technology.
3:08:53
technology. And you know long story short maybe long story long here I I got so frustrated with the various EDI systems that were out there so like look what I want to do is I want to receive purchase orders in I want to get them into NetSuite I want to have those automatically sent to a warehouse I want the warehouse to ship the order I want the transaction come back I want when
3:09:13
things come in via Flexport I want those things to you know get automatically pushed into my system this can't be that hard kind of famous last words and I was like I was so sick of the the solutions that were out there that I ended up having my own system built and then you know I ultimately sold the auto parts business to a private equity firm and I started Steady. And uh
3:09:31
And uh I spent like 50 grand on which first you know I was a a bootstrap business so spending 50 grand is a lot of money 50 grand on building this homegrown platform and I was like you know it's going to cost like 10 times as much to do this for everybody for all
3:09:46
transactions I was like but to be safe you know there's margin of safety I'll I'll raise a million dollars instead of 500K and you know now we've raised 142 million dollars total I think we we you know still have still have It's gong time it's gong time. Here we go. Here we go. Thank you thank you.
3:10:03
What what's your favorite car? Uh favorite car.
3:10:10
You know it's funny like I grew up you look at you know the Porsche 911 you say like that's like a car that old guys who don't know anything about cars buy and then you go and you drive one and actually turns out the 911 you know 60 70 years of iterative design is is pretty good.
3:10:24
It's What kind of auto parts were you selling?
3:10:26
I'm I'm in the market to pick up a straight pipe exhaust system as a birthday present for Jordy I'm hoping to get him some LED under lighting as well maybe stance his car were you doing anything like that?
3:10:39
>> I can I can hook you up. >> help?
3:10:41
>> We're going to you know it's going to be it's going to be like it's going to be like you know TBPN my right edition.
3:10:44
Yes yes that's what I'm looking for I want a horse you like horses we put a horse in your car we put a gong in the passenger seat.
3:10:54
You can't transport anyone but it looks good.
3:10:57
>> John John has been trying to get me to go the Mansory route. >> Yes.
3:11:01
For [laughter] years and he will be doing it until he until he does it.
3:11:06
Out of Until you do it with the full sponsored livery wrap. On the car.
3:11:09
Uh you guys hiring I'm assuming? >> Yeah. Oh yeah.
3:11:13
Yeah engineers product Talk a little bit about the company culture where are you based are you in person remote like what's the what's the scale of the company right now?
3:11:24
So we're about 125 people we're distributed we have a bunch of people in New York but we've got people all over the place I live in the Bay Area and look I think you know with the town wars you know there's look there's obvious pros to being in person at the same time
3:11:40
you're kind of making the implicit decision that you're going to exclude 99% of your potential hiring pool and saying we're not going to be able to hire those people and for us we think the trade off's worth it so we're we're all over the place. That's That's amazing. Awesome.
3:11:51
Well So great to finally meet >> Yeah great to finally meet >> amazing progress. Yeah.
3:11:54
Thanks so much Thanks guys thanks for having me on the show. We'll talk to you soon. Have a good one.
3:11:59
Let me tell you about fin.
3:11:59
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3:12:04
ai and let me also tell you about Shopify.
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Shopify is the commerce platform that grows with your business and lets you sell in seconds online in store on mobile on social on marketplaces and now with AI [music] agents and without further ado we're going back to back Zach oh we got Nick. Nick.
3:12:20
I know you're having Zach I was excited to go back to back Zach to Zach. >> this plaid on plaid.
3:12:23
This is a beautiful background this is a beautiful outfit introduce yourself. Tell us how it's going.
3:12:29
This is where I'm living now it's good to see you guys. >> Good to see you too. How you doing?
3:12:34
>> Just let's just start with a gong let's start with a gong I don't want to wait.
3:12:40
Oh the delay the anticipation was too high for the last one. Congratulations.
3:12:44
>> long I dreamed of that moment I got to take a photo for my mom. Let's do Got it.
3:12:50
>> [laughter] >> Uh Very fun.
3:12:53
>> [clears throat] >> You can of course screenshot it. >> Yeah.
3:12:55
>> But it's cooler [laughter] it's cooler You you later you'll be able to screenshot yourself taking a picture.
3:13:02
Which is and then say look mom I took this screenshot of me taking a picture for you.
3:13:06
Um Give us some background tell us the story of how you wound up in this particular situation just just take us through it.
3:13:15
Well I'm excited to talk to you all about it because as pioneers of new media I feel like you'll understand this more than most people but you know we've been building this week in fintech as what started as a fintech newsletter and turned into more of a fintech media company over the last 6 and 1/2 years and the plaid team approached us about 5 months ago. Yeah.
3:13:36
And I thought we were going to talk about a partnership so I came in there ready to sell sponsorship ready to sell media deal.
3:13:43
And they said actually you know we've been thinking a lot about how we can improve the conversation around fintech and we want to partner with you guys and what that means we want to acquire the business and they won they out negotiated me.
3:13:54
>> [laughter] >> So here I am. Amazing.
3:13:55
So so what do you think stays the same what do you think changes are you going to be working in their office how does all this fit together?
3:14:05
Yeah I went and did a little office tour this morning and I got a badge so they they haven't given me my gun yet but they did give me my badge and so after 6 and 1/2 years working out of a home office just seeing another person and that having a conversation in an office was a transformative experience for me. Yeah.
3:14:20
We are going to keep things mostly the same from now and then we'll just keep adjusting as we go I think probably the best comp for what we're looking to build is something similar to Bloomberg with Bloomberg Businessweek where these are two really complimentary properties there's obviously a parent company they share a name but you can be a Bloomberg software customer without reading Businessweek and vice versa. >> Yeah. That makes sense.
3:14:41
Uh what is the state of fintech? Mhm.
3:14:44
What are you I mean you know you've you've been 6 and 1/2 years you've seen the the boom the the momentary bust the comeback you've during that time there's been so many companies that have you know thrived throughout the entire period even as the market was was in turmoil overall but what are you most excited about today? Mhm.
3:15:10
Well I assume most of the half a billion TBPN watchers know Jordy's background but Jordy's an exited fintech founder who built Party Round and Capital and so you also had a front row seat to kind of the change in the fintech ecosystem over that period.
3:15:26
Um today what I've noticed is you had this spike in fintech enthusiasm and funding in the venture community in 2021 a lot of companies got out over their skis because of capital availability I think there were sloppy decisions made and a lot of them took tough medicine.
3:15:43
Um some of them didn't make it past the downturn in liquidity for fintech startups but a lot of them said look we're going to build real businesses now we're going to take the tough medicine and we're going to come out the other side stronger and so if you look in the
3:15:56
top right corner and see Ramp like that's a great example of a company that has been around for a long time said hey we grew too quickly downsized and now they're better for it and are just kind of crushing and shipping on a weekly cadence and you know really redefining
3:16:11
this entire category and so what we're seeing today is you have fintech companies we've been talking about this for a long time you have fintech companies that are actually taking market share from incumbents I know fintech companies that wanted to say hey
3:16:22
like we're the challengers we're going to be you know the dominant providers of financial services one day but now that's actually happening and so [clears throat] you know thinking about this with my plaid hat on >> [laughter] >> So much merch. I love how you brought
3:16:34
I love how you brought you brought the you you just came with the same the same you came prepared you understood the assignment the same entertainment level as we >> [laughter] >> Putting on put on your steel man John. Yeah that's right.
3:16:52
Um we noticed that you know the tech media conversation hasn't really caught up to how well some of these fintech companies are doing and it's tough technology media is really stretched and I think um there are a lot of different areas like
3:17:09
AI like crypto that you know command a lot of attention and so you have really well run companies like Ramp that are doing generally interesting stuff and shipping at this crazy rate but nobody's covering them other than the TBPN and so
3:17:21
we're looking to really cover >> even we're not we're not we're not covering it on a level where if you're a fintech industry insider or builder you're actually getting alpha from our fintech coverage and alpha comes into like okay what does infrastructure look
3:17:38
like what kind of what what bank partners are evolving with the needs of these companies like you know you guys are going like 10 10 layers deeper and have been for for so long I think it's it's it's super important. Yeah. Last Yeah.
3:17:50
it's it's super important. Yeah. Last question for me what what what what media formats where like how would you describe where you are now and then what excites you because you know obviously the the the the newsletter list is over 200,000
3:18:06
subscribers congratulations massive how many newsletters do you want to send a year do you want that to increase do you want to do more in events video interviews audio like what what's interesting to sort of like zoom out and think about the next couple years? Yeah you know, our DNA has always been
3:18:22
Yeah you know, our DNA has always been the community Mhm. initiative.
3:18:24
And so, um events are a big part of what we do.
3:18:29
International is a big part of what we do because there's so much interesting innovation happening. >> That makes sense.
3:18:33
>> You know, American tech companies will go on stage at conferences in Mexico City and in, you know, Lagos, Nigeria and talk about what they're doing.
3:18:40
But then they actually start talking to people who are operators in Lagos, Mexico City and like the level of innovation there is often, you know, more advanced than fintech than you'll see in the US because these are areas that don't have the same level of financial services.
3:18:53
And so, you actually have to build a lot more there.
3:18:55
And that's been a big part of our DNA, too.
3:18:58
And so, I think it's really double down on the community focus, um really deep thoughtful writing, um and continuing to grow the pie not just here, but internationally as well. That's awesome. Well, congratulations. Amazing. Super pumped for you. >> the time. Match made in heaven.
3:19:12
A a true match between the background and the shirt.
3:19:16
And truly >> [laughter] >> It's fantastic.
3:19:18
Uh come come in person next time.
3:19:20
It's great to finally have you on the show. >> up soon. Have a good one. We'll talk to you soon. Goodbye.
3:19:27
>> And up next we have the co-founder and CEO of Plaid, Zach Perret, in the rooster waiting room.
3:19:31
Let's bring him into the TV camera. Zach, how you doing? Doing well. Thank you for having me.
3:19:38
When did you first meet Nick? That's a great question.
3:19:41
Uh I think it was at a Money 2020.
3:19:41
I think it was maybe like 6 years ago or something like that.
3:19:47
Um it's been a long time and we we've long admired what what what Nick and Tim built.
3:19:53
Um it Look, I I feel [clears throat] so honored to get to work with them in this new way and and uh it's been pretty amazing to watch them grow over the last few years. Yeah. Yeah.
3:19:59
Uh talk about uh your experience as CEO at an event.
3:20:05
What makes for a good event that you will say yes to attending, appearing at, etc.?
3:20:10
Like, what's the what's the secret sauce that you're like, "Okay, that clicks into place and I'm going to say yes to that" because I'm sure you get invites every day.
3:20:19
Uh I I think Oh man, this is this is a difficult one because my default answer is no.
3:20:23
Uh my I have the the the conversation frequently of no new things.
3:20:27
Yeah, there's a lot of stuff.
3:20:30
I think there Look, it it all comes down to who's there and the size of the event.
3:20:34
Um small things where I can meet people that are really high value are super interesting.
3:20:40
Um and uh you know, things that have content and an angle that's not covered all the time in the same way uh are are are valuable.
3:20:47
So, um I don't say yes to a lot of things.
3:20:53
Which which feels fortunate.
3:20:53
Um also, I like really like working, so Yeah. it's not a good problem. Yeah.
3:20:57
We're the same we're the same way.
3:20:59
Uh what uh outside of this uh this acquisition, what's on what's on your mind this week?
3:21:04
What what's the business focused on?
3:21:05
What are what are you focused on personally? >> Mhm.
3:21:09
Well, first I I don't want to skip over the uh this week in fintech. I mean, big deal for us.
3:21:14
Like, we've been really excited to um to to push this conversation forward over the past many weeks.
3:21:18
We're excited to to now finally have have have Nick and Co. as a part of the team.
3:21:23
Um and the the the future together I think is going to be super fun.
3:21:27
Um aside from that, I big focus is AI-fi everything.
3:21:31
So, um you might have seen we did a launch with Perplexity.
3:21:36
Um this was I think a week and a half ago or so um where we can power the the the finance tab of the Perplexity um application.
3:21:42
And it allows you to do things like see your see your stock portfolio in real time, uh get an update in the morning to understand, you know, what stocks you might want to trade in a given day.
3:21:53
Um lots more that we're going to do with them to bring in more financial data into Perplexity.
3:21:55
And I think this is the first step in a lot of kind of consumer-facing AI experiences.
3:22:01
Um so, um that's [clears throat] going to be one for for for us internally.
3:22:05
Um Yeah, that's really cool.
3:22:06
I mean, you think about people are using their their going to AI tools for intelligence to help them understand the world, but then they lack all of the, you know, maybe you've put something into the contacts or maybe that has some memory, but it's lacking like that real real-time data on you individually and money being at the core of everyone's life just means that it's like very important for it to be in there.
3:22:31
So, that that's very cool.
3:22:33
Yeah, what is the what what is integration with AI tools look like? How is it changing?
3:22:38
Obviously, you're known for the API, which is had, you know, years and years of development. There's MCP now. There's skilled. md files.
3:22:48
There's all these different ways to interact.
3:22:50
The agents can obviously use APIs and write their own API integrations.
3:22:54
Where do you see that going?
3:22:57
Are there any changes that you need to make or you're in flight already making?
3:23:02
Yeah, so um truth is the core of Plaid doesn't change all that much, right?
3:23:08
Um we are a pipe to bank accounts.
3:23:08
Um we're then a data store on top of that and then analytics that sit on top of that.
3:23:14
So, like um that that that chain doesn't change all that much.
3:23:17
But the entry point to that change does change a lot.
3:23:21
So, like we're doing a lot of work internally to say, "How do we build like a one-shot vibe coder like get started with a thing?"
3:23:27
Um so, you know, you can go home and build your own personal financial management app. Now, Yep.
3:23:31
you guys are nerds, you might do that.
3:23:33
Um most of the world is not quite as nerdy. >> Yeah.
3:23:38
Um and I was literally just thinking about that.
3:23:41
I was like, "Okay, I so I'm going to go and tell Codex to write a Plaid integration, pull all my bank accounts together, tell me exactly how much money I spend on everything, recategorize these all and basically like rebuild Mint for myself."
3:23:50
And I'm like, "Maybe there's a tool for this. I don't know."
3:23:54
But it'd be more fun to build, so tinker mindset.
3:23:57
You should probably just use Perplexity or many of the other wonderful Plaid apps that are out there.
3:24:01
I will say I have spent uh more hours than I would care to share building like the totally most souped-up like personal financial management tool that does literally everything in my financial [laughter] life. Six six monitors. Yes. Situation monitor. Yeah.
3:24:17
Not six, but you don't see this room. There are many.
3:24:21
>> [laughter] >> But this this this this app is like the perfect thing for me and my wife.
3:24:24
It's like it has everything and like we I can like chat with like our legal docs from like purchasing a house and stuff like that, all sorts of stuff.
3:24:32
Anyway, um so, some people are doing that.
3:24:34
Um and we would like to make it really easy for those people to do it.
3:24:36
Um I think we saw like like in like 2 months I think we saw a 200% increase in the number of like hobbyist [clears throat] developers that are building stuff on Plaid.
3:24:44
Yeah, the I I don't I I don't quote me on that stat.
3:24:48
I think I said it >> [clears throat] >> on public TV now, so that >> [laughter] >> This is going to turn this into an article for sure.
3:24:55
Yeah, we're going to have a lot of fun.
3:24:57
But I was about to ask you like, yes, you are actually seeing some sort of material increase in the number of like small indie developers, vibe coders, hackers, individuals.
3:25:06
It's not just, you know, I'm sure there's a lot of excitement from the enterprise to deeper their integrations, but you are seeing a groundswell at the individual level, which is fascinating.
3:25:18
It's that Yeah, that's so that's really big.
3:25:20
For our larger enterprises, they're like, "How do I automate all of the support stuff on top of Plaid?"
3:25:23
So, we build like support tools for them.
3:25:26
Um and then like there's a lot of a lot of consumers have questions about like what data is going where.
3:25:28
And so, we're thinking about like how can we smartly build intelligent permissions on top of the data permission so that you as a consumer I, you know, you might not want to link your cow sheet spending, but you might want to um be able to analyze your stocks.
3:25:43
Like, how do we how do we create tools for that kind of thing? Yeah.
3:25:45
Are you uh are you seeing like I I guess the question is like, where are you seeing benefits when the frontier advances?
3:25:53
Like, people are, you know, currently excited about GPT-5. 4 or uh or Gemini-3. 1.
3:25:57
And they see a model and they're like, "Okay, this new release does this new benchmark better or it has a better smell or it it it feels better in this particular uh area."
3:26:09
But as a business owner and business leader, you're, you know, you might have a system that's using an LLM or an API and it's already at 100%.
3:26:17
So, are you Are there systems that you're not upgrading and then there's some systems that you want to keep on the frontier like chat or or I don't know, going around and doing fraud detection?
3:26:30
Like, what where are you hitting the newest, most expensive model button versus, "Okay, the system that we've built is actually rock solid and like we're we're we're we're we're good there."
3:26:43
Yeah, so there there's a a lot of layers of the stack and it kind of varies based on on the layer.
3:26:47
So, for for coding, like I want our engineers to be using cutting edge possible everything >> [clears throat] >> in in almost all situations.
3:26:54
Now, at some point we will get into like cost optimization and cost management.
3:26:57
We're not in that phase right now.
3:26:59
We're in the like get the best possible thing as fast as as fast as you can. Yeah.
3:27:02
Um within the products, >> [clears throat] >> we don't want to actually upgrade our our our models too quickly.
3:27:08
Um for example, like we've we've built a lot of stuff to improve transaction categorization.
3:27:13
Um if transaction categorization changes quickly, our customers notice and they're like, "Oh, well, I built like You know, You know, you Yeah.
3:27:21
you you might say something is a restaurant and I want to say it's a food purchase. Okay, great.
3:27:25
But if you change it all the time, then I'm not going to be able to map restaurant to food purchase as quickly as possible.
3:27:29
So, it's like different names for the same category. Those changes are hard.
3:27:32
Where it flows into our anti-fraud models and um like eventually into our credit models, um you know, we don't want to be changing the models too quickly because we have to do a lot of backtesting every time we make an upgrade.
3:27:43
Um but then anything that's like, you know, customer-facing like our improved support experience so on and so forth, um like there there there we can be quite iterative and like oftentimes we're not using the cutting edge.
3:27:54
We're maybe using a a turn or two back um because the value it doesn't make any better responses, but the cost is low.
3:28:03
So, um there's so many different choices that we're making on this stuff.
3:28:05
It's honestly really fun.
3:28:06
Yeah, yeah, it seemed like a a really uh really interesting >> your what is your thesis on how agents will use money?
3:28:12
Because there's a number of companies that have sprung up and their incentive is to tell you that agents will exclusively use stable coins and generate their own effectively like generate their own real-time payment rails on the fly because they don't want to deal with fees and I think we've generally John and I have been pretty like neutral on this.
3:28:34
Like we can imagine a scenario where an agent would use stable coins, but we can also imagine a scenario where my agent >> like hires a human to be a bad man and carry cash from one place to another.
3:28:45
That's another possibility.
3:28:45
That's another possibility or just use the existing existing rails that I if an agent's acting on my behalf, maybe they use the existing, you know, set of financial products that I already use.
3:28:58
Yeah, I mean for as far as I can see which in this environment is maybe a year or something like that.
3:29:03
I think like >> [clears throat] >> agents using credit cards is going to be like the by far the the primary thing that happens.
3:29:09
The reason for that is the merchants accept credit cards, right?
3:29:11
Merchants don't accept stable coins now for the most part for most of the things that a consumer Now over time certain types of merchants might start to take stable accept stable coins like certain types of payments might might move in that direction.
3:29:23
The question is like will the companies that care about making credit cards really easy be able to make them sufficiently easy in the amount of time that you know, the merchants actually start to shift to think about [clears throat] accepting stable coins.
3:29:37
And my hunch is like you've seen I think I think like Ramp actually launched an agentic credit card like one of our customers privacy.
3:29:43
com and they have an agentic credit card.
3:29:45
I know there's a bunch of other agentic credit cards that are out there and like I can't like imagine that there will not be 5,000 YC companies that are launching agentic focused credit cards soon.
3:29:56
So like I think we will see more and more options pop up.
3:29:58
And this is not to say I'm not a believer in stable coins.
3:30:01
I think it'd be super cool, but I just don't think it's realistic in that short time frame. Yeah.
3:30:05
Yeah, that makes total sense.
3:30:07
What about What What is your timeline or prediction around big institutional banks natively supporting stable coins?
3:30:16
Like is there is there a point where like the default Chase account you want to make a payment and you have the option of you know, Zelle, a wire or stable coin payment or is that not coming ever or you know, what's your general read?
3:30:39
I think it's probably coming.
3:30:39
I don't know that it's coming fast.
3:30:41
And I think there's like a lot of reasons for them to want to be slow, but I certainly think some of that is coming.
3:30:47
Like I think wires not working on weekends one is actually structurally not true.
3:30:55
Like there are many ways to like create the effect that a wire has moved on weekends.
3:30:59
So like if a bank wanted to do that, they could do that.
3:31:02
But ultimately like it is a thing that bothers enough people that some people will want to move money on weekends and we're going to give them ways to do that.
3:31:08
So stable coins seem to be the the most optimal way to do that even though you can change the existing system. >> Yeah, I don't know.
3:31:14
You wonder where that where that maybe maybe there's not enough consumers that are even asking right now to be honest, but it might actually come from industry first where like car dealerships are like, hey, like we really want better ways to I just found I just found a bit of a potential competitor for you.
3:31:32
You might need to watch out for in like the agentic future. I went to brinks.
3:31:36
com and there you can move money via of armored car and the roads are open on the weekend.
3:31:45
So you can move a lot of cash.
3:31:47
You might want to watch out Zach.
3:31:49
You're starting to retool in the business plan.
3:31:52
Cuz you're going to have to deal with hey, [laughter] the codex dispatch the Brink's truck. Don't make mistakes. This is going to happen. You got to watch out. You got to stay sharp.
3:32:00
What's on What's on What else is on the road map for plaid this year that you can talk about now?
3:32:07
We've got a facts coming up.
3:32:07
So facts is our our our annual conference.
3:32:09
It'll happen here in a couple months.
3:32:13
It's It's going to be awesome and super fun.
3:32:16
Nick, we haven't figured out what what we're going to do together.
3:32:19
>> I was thinking he he could fit really well into that, too. MC. Exactly.
3:32:23
And if you guys want to come visit, we'd we'd we'd love to have you.
3:32:27
But so that's going to be a big one.
3:32:29
We've got a bunch of launches lined up for that.
3:32:31
You know, I can't spill the beans on all of them, but like there're going to be a lot of AI related things >> [clears throat] >> as you as you might imagine.
3:32:37
And then look, it's it's been a it's been a really fun year so far.
3:32:41
I think just like even for me as a as a as a leader retooling the company to think about like how do we want to operate differently if the average size of an engineering product and design pod was eight people now it's four people.
3:32:51
Like how can we parallelize things?
3:32:53
So like honestly just as a leader it's it's really fun right now to get to retool an entire organization around, you know, an improved shipping velocity.
3:33:00
So yeah, I'm I'm nerding out with it. It's great. >> it. I love it. >> Love it.
3:33:05
Well, congratulations on all the progress.
3:33:07
Congratulations on the acquisition and we'll talk to you soon. Have a great day.
3:33:11
Thanks for having Goodbye.
3:33:13
The Daily Beast got a little bit of a scoop.
3:33:16
Here's how they phrased it.
3:33:16
They said the 75-year-old Disney executive who stepped down as CEO just last week has been busted for leading a secret double life on social media under a different name.
3:33:30
And Taylor Lorenz is on a tear.
3:33:33
She says Bob Iger had a private IG account for IRL friends and family where he shared kayaking photos with his wife and this is how the Daily Beast framed it.
3:33:43
That is an absolutely It's like, yeah, I guess he had a finsta.
3:33:46
He had a he had a fake Instagram account where he would you know, connect with friends.
3:33:51
Not uncommon tactic for someone who's probably the most scrutinized and watched public figure potentially in in the business world.
3:34:00
Everyone wants to track and read into what is Bob Iger doing?
3:34:02
Is he you know, in is he in the office? Is he in Orlando?
3:34:07
Is he Is he at Disneyland?
3:34:09
There's a lot of reasons why people would want to report on everything that he does and he probably doesn't want to share all that.
3:34:13
So he had to do the fake Instagram, the alternate the private Instagram for friends.
3:34:19
>> we have a good place to end it. >> Please.
3:34:21
John Palmers wife's company was more innovative than TVP and Fast Company. Honestly fair. What is row seven? We got beat. Row seven makes seeds. Seeds?
3:34:34
A vegetable company dedicated to deliciousness. This is more innovative. >> It is.
3:34:39
They're inventing vegetables.
3:34:42
>> [laughter] >> We We reinvented business television.
3:34:46
Well, it ain't over till it's over.
3:34:46
So stay Just wait for next year.
3:34:47
cuz we're coming for you. >> We're coming for you. It's personal now.
3:34:53
>> That's it's personal now.
3:34:53
We're not stopping till we get to number 41. Let's make it happen.
3:34:58
Thank you for watching TVP and Fast Company.
3:34:59
Apple podcast and Spotify.
3:35:01
Sign up for our newsletter at tvp.
3:35:03
com and we'll see you tomorrow at 11:00 a. m. Pacific. See you tomorrow. Goodbye.